Post on 27-Jun-2020
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BRAND MANAGEMENT SESSION 5 BRANDS & THE PRODUCT LIFECYCLE
Last Orders For Guinness
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Last Orders For Guinness?
Evaluate the management of the Guinness brand
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Diffusion & PLC
Innovators
Early adopters
Early majority Late majority
Laggards
Product life cycle curve
Diffusion curve
Cu
mu
lati
ve P
erc
en
tage
of
Ad
op
tio
n
100
90
80
70
60
50
40
30
20
10
0
Introduction Growth Maturity Decline
Time of Adoption of Innovations
Slide
9-11
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Product Life Cycle: The Role of Line Extensions
Introduction Growth Maturity Decline Time
Sales
Product Line Extensions
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Guinness has enjoyed consistent long-term growth AND evolved relentlessly
Guinness Long Term Volumes 1850 to 2010
0.0
1.5
3.0
4.5
6.0
7.5
9.0
10.5
1850 2000
mHl
Porter
1900
Extra Stout
1950
Guinness
Draught in Bottle
Guinness Extra
Smooth
Foreign Extra
Stout
Guinness
Draught in Cans
Guinness
Draught
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14
15
Age: 401
Age: 6
Age: 35 Age: 250
Age: 260
Age: 70 Age:
Age: 190 Age: 26 Age: 150
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Diageo
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Diageo
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Diageo
What is marketing / brand management accountable for? How are targets set? How are budgets set?
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0% 5% 10% 15% 20% 25%
Linking Brand-Market Opportunity and Resource Allocation
China Product 1
Italy Product 1
Mexico
Product 1
Current Allocation to Opportunity
Op
tim
al A
lloca
tio
n t
o O
pp
ort
un
ity 30%
25% 20% 15% 10% 5%
USA Product 1
Argentina Product 1
Singapore Product 1
S Africa Product 1 Portugal Product 1
Russia Product 1
Hong Kong Product 1
Canada Product 1
Netherlands Product 1
Adapted from Optimal Marketing
Size Growth Competitive Structure Margin Responsiveness Marketing Efficiency
Opportunities Above this Line merit an Increased share of marketing budget
Commonly a function of: Legacy measures - % of sales, budget v prior year
Or Industry level measures – competitive parity etc.
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“People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things.”
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R&D Expenditure at Apple following Return of Steve Jobs
’95 ’96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06
US$ 200 million
The declines in expenditures for R&D in 1999 and 1998 as compared to 1997 were due to actions taken to focus R&D efforts on projects perceived as critical to the Company's future success. Apple 1999 Form 10-K Filing
US$ 600 million
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R&D Spend ≠ Innovative Most Innovative Companies Globally
InnovativenessRank
Company R&D Spend $US
R&D Spend % Sales
R&D Spend Rank
1 Apple $9.9 4.3% 81
2 Google $9.6 16.4% 44
3 3M $9.4 19.6% 84
4 GE $9.1 13.5% 35
Source: Adapted from Booz & Co. 2009
Transformational Developing
breakthroughs and inventing things for markets that don’t exist yet
Adjacent Expanding from existing products into ‘new to the company’ products
Core Optimizing existing Products for existing customers
Reformulations, refinements, repackaging, size changes, repositioning,
SERVE EXISTING MARKETS
AND CUSTOMERS
ENTER ADJECENT MARKETS SERVE
ADJECENT CUSTOMERS
CREATE NEW
MARKETS TARGET NEW NEEDS
Targ
et (
Wh
ere
to
Pla
y)
USE EXISITNG
PRODUCTS & ASSETS ADD
INCREMENTAL PRODUCTS & ASSETS
ADD
NEW PRODUCTS & ASSETS
Capabilities (How to win)
The innovation portfolio
Adapted from Managing your innovation Portfolio: Harvard Business Review 2012
Balance of innovation portfolio in different sectors
2% Transformational
Consumer Good Company
80% Core
18% Adjacent
10% Transformational
Diversified Industrial Company
70% Core
20% Adjacent
15% Transformational
Tech Firm 45% Core
40% Adjacent
Adapted from Managing your innovation Portfolio: Harvard Business Review 2012
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FMCG New Product Success Rates Malaysia, Indonesia, Philippines and Thailand
DISTINCTIVENESS Deliver a new value proposition to the market. Ingredient reformulations, repackaging, size changes, repositioning, and other minor refinements to existing brands are excluded.
RELEVANCE Generate significant year-one sales. ENDURANCE Achieve at least 90% of year-one sales in year two.
Nielsen Breakthrough Innovation Report South East Asia 2015
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FMCG New Product Success Rates Malaysia,
Indonesia, Philippines and Thailand
Nielsen Breakthrough Innovation Report South East Asia 2015
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FMCG New Product Success Rates Europe
Nielsen Breakthrough Innovation Report South East Asia 2015 Nielsen Breakthrough Innovation Report Europe 2014
DISTINCTIVENESS Deliver a new value proposition to the market. Ingredient reformulations, repackaging,
size changes, repositioning, and other minor refinements to existing brands are excluded.
RELEVANCE Generate significant year-one sales. ENDURANCE Achieve at least 90% of year-one sales in year two.
Investment – Return Relationship
70% Core
10% Core
20% Adjacent
20% Adjacent
70% Transformational
10% Transformational
Long-term cumulative returns
on innovation
Investment of time, effort, money
Adapted from Managing your innovation Portfolio: Harvard Business Review 2012
Potential Returns
Risk (standard deviation)
Potential Returns
Low risk / return
High risk / return
Risk (standard deviation)
Risk (standard deviation)
Potential Returns
Low risk / low return
Low risk / low return
Risk (standard deviation)
Potential Returns
Risk (standard deviation)
Potential Returns
Risk (standard deviation)
Potential Returns
Innovation at Google
JUST BECAUSE I WANT CASH
TODAY…
…DON’T CALL ME RISK AVERSE
DON’T ASK ME TO TAKE RISKS…
…WHEN YOU ARE
SQUEEZING ME FOR CASH TODAY
Lifecycle assumptions and their implications
If I had asked people what they wanted they would have said faster horses
Henry Ford 1911
“None. It's not the consumers' job to know what they want.” Steve Jobs 2011 on the development of the iPad
BRAND MANAGEMENT SESSION 5 BRANDS & THE PRODUCT LIFECYCLE
BRAND MANAGEMENT
BRAND COMMUNICATIONS
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Virtuous & Vicious Marketing Communications Cycles
Disciplined Execution (budget and process)
Low
Hig
h
Low High
Failed Campaign No Impact and or No Reach
Pointless Noise Marketer & budget chasing a message
Creatively Impossible to provide breakthrough
Viable Campaign Reliant on
creative execution
Marketing Graveyard The Colouring In Department
Logo Cops Discretionary Spend
Som
eth
ing
New
To
Say
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The Brief – the project definition
GET: [target]
WHO: [currently think / feel / do this]
TO: [desired think / feel / do]
BY: [communicating proposition (our point of differentiation)]
LIKE THIS: [tone]
Success Will be measured By [metric of think / feel / do]
Competition
Brand Attributes
Business Objectives
Campaign Management
Customer Insights
Messaging Media
Strategy
Implementation Metrics
Competition
Brand Attributes
Business Objectives
Campaign Management
Customer Insights
Messaging Media
Strategy
Implementation Metrics
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GET: [target]
Anna
35 years old
Two children
$100,000+ HH income
Reads Business Week
& Sports Illustrated
Plays tennis and golf
Home value $175,000
Owns home
Married
Drives a minivan
Works at home
Newcomer
Interests:
Food, Wine
Parenting
Travels out of state
three times a year,
international travel
once a year.
Subscribes to Sunday
newspaper, buys
occasional single-copy
Combines quantitative & qualitative data
Must deliver consumer insight
Sarah Robb O'Hagan CMO
Gatorade / Formerly at Nike
Mark Addicks CMO General Miills
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Do you know about it?
Is it relevant to your needs?
Is it satisfactory?
Is it on your short list?
The Brand Pyramid
Does it beat all the others? Bonding
Advantage
Performance
Relevance
Awareness
Adapted From BRANDZ™
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Promise Delivery (post purchase)
Visibility
Marketing Tasks Across the Brand Pyramid
Frame of reference and points of parity What category does the brand compete in and what common benefits does it provide ?
Target Who is the brand for?
Bonding
Advantage
Performance
Relevance
Awareness
Support & points of difference What are the reasons to believe in the brand promise What are the Unique (functional, emotional, social) benefits offered?
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Total market size
(# or value)
Determinants of market performance: what are the pain points – what is the marketing problem/opportunity?
% Aware of your offer
% Relevance %
Performance (consideration) %
Purchase % Loyal
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Values Values Heritage Mission
Values Values Heritage Mission
Values Values Heritage Mission
Values Values Heritage Mission
Contextual attributes of the brand: heritage, values & mission
Brand Promise
Visibility
Promise Delivery
Leverage
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“Walking into an Aesop store is a sensory experience that is reminiscent of experiencing a museum exhibit. You can't help but feel like you are partaking in something special and exclusive.” Huffington Post 2015