What price Premium?w o r t h a n d v a l u e g r o w t h

What makes a brand valuable?

Successful brands build associations that deliver these commercial benefits

I N C R E A S I N GT H E L I K E L I H O O D

that a consumerwill buy

I N C R E A S I N GH O W M U C H

consumerswill pay€

Millward Brown’s new equity framework

Three key measures of brand equity that align to business outcomes

Premium

Pre-disposition to pay more fora brand

=PRICE INDEX

Potential

Pre-disposition to keep buyingthe brand in the future

=VALUE SHARE GROWTH

Pre-disposition to choose one brand over others

=VOLUME SHARE

Power

Premium versus ‘Luxury’

• Premium can  be defined in many ways. It is important to make a distinction between Premium and Luxury

• ‘Premium’ can be the ability to command a price premium in an otherwise mass market product category. Luxury is about scarcity and exclusivity. 

• A few brands tap into status and ‘luxury’ but the majority of brands are seeking to command a premium (be ‘worth paying more for’)

9.4

2.3

5.6

0.6

16.5

8.0

0.1

-8.0

Worth Paying MoreFor

Super Premium Low Price but GoodValue

Poor Value

Current Brand Strength Potential to Grow

‘Premium’ makes for strong brandsBrands that are ‘premium’ are more likely to be grow Premium Brands Examples   

(from BRANDZ database )

Source : BRANDZ 2010‐2011;  60,000+ brands in over 200 categoriesWorth paying morr, Super Premium, Good Value, Poor Value are metrics from Millward Brown’s ValueD framework

Close to 6 in 10 strong brands are perceived to deliver a Premium

6

48%

60%

34%

36%

36%

Distribution of Strong Brands on Premium

* STRONG BRANDS : Olympic, Classic, Specialist, Little Tigers; Above Average Voltage

5%

4%

5%

4%

6%

11%

37%

32%

38%

34%

39%

52%

29%

42%

31%

34%

21%

13%

29%

22%

25%

29%

34%

24%

GLOBAL

South America

North America

Europe

Asia

Africa

Poor Value Good Value Worth Paying More Super Premium

58%

Authentic –Knows its "true north" and is committed to this idealQuality – Is consistent and shows obsessive attention to detailConfident – Projects a feeling of intrinsic worth

The DNA of a Premium brand

7 Source: What Makes Premium brands Premium? David Murphy, Lambesis

GENUINE

DESIRABLE

EXCLUSIVE* Mysterious – Draws us in deeper and reveals more to us over timeRare – A discerning choice, intriguing because it is uncommon

Sensual – Arouses our senses and feels indulgent. It is an experience. We want to touch it; we enjoy looking at it

* More True of Luxury brands

How can a brand deliver ‘Premiumness’?

Brands deliver ‘Premiumness’ (worth paying more for) via a number of means – but often the starting point is product innovation and design

Use product innovation and design to build perceptions of premiumness

Premiumness

Innovation Association Communication

Use retail, events, celebrities and media to create

positive premium perceptions

Use cues symbolic of a premium brand in communications

Delivering ‘Premiumness’ via Communication

How can we leverage communication to deliver cues of premiumness?

Use product innovation and design to build perceptions of premiumness

Premiumness

Innovation Association Communication

Use retails, events, celebrities and media to create

positive premium perceptions

Use cues symbolic of a premium brand in communications

Building Premium cues : Messaging

10

EMOTIONAL CONNECT is vital

but showcasing functional difference is also important for durables and technology products

Samsung ‘incredible journey’

Building Premium cues : Product

11

Focus on FEATURES and INNOVATION rather than people USING the product

WHAT IT HAS , HOW IT WORKSfererro rocher ‘chef’

* INGREDIENTS and FORMULATION for packaged goods

EMOTIONAL CONNECT is vital

Building Premium cues : Executional Cues

12

Focus on FEATURES and INNOVATION rather than people USING the product

Bournville ‘bird’

EMOTIONAL CONNECT is vital

HUMOUR (while certainly entertaining) can actually detract from cues of premiumness

Building Premium cues : Executional Cues

13

Focus on FEATURES and INNOVATION rather than people USING the product

EMOTIONAL CONNECT is vital

Simply having a CELEBRITY in the ad doesn’t necessarily add to a premium image

a celebrity does need to be chosen very carefully to build the right associations

HUMOUR (while certainly entertaining) can actually detract from cues of premiumness

dr. dre and beats audio

dr. dre and 24 other endorsements

Building Premium cues : Brand Cues

14

Focus on FEATURES and INNOVATION rather than people USING the product

EMOTIONAL CONNECT is vital

Simply having a CELEBRITY in the ad doesn’t necessarily add to a premium image

HUMOUR (while certainly entertaining) can actually detract from cues of premiumness

Once you have developed Premium cues….STICK WITH THEM

Ways to build Premium cues

15

Focus on FEATURES and INNOVATION rather than people USING the product

EMOTIONAL CONNECT is vital

Simply having a CELEBRITY in the ad doesn’t necessarily add to a premium image

HUMOUR (while certainly entertaining) can actually detract from cues of premiumness

Once you have developed Premium cues….STICK WITH THEM

What price Premium?w o r t h a n d v a l u e g r o w t h

For further information please contact:SHIV MOULEE

Chief Solutions OfficerAfrica, Middle East & Asia Pacific

Millward BrownCell +6591299487

Email: Shiv.Moulee@millwardbrown.com