Branding HS Talks

Branding: How It Works and Why It Matters
Prof. Robert F. Lauterborn
Branding:
How It Works and Why It Matters

James L. Knight Professor of Advertising Emeritus
UNC-Chapel Hill
1
Core concept of marketing
The marketing plan

is the implementation plan
for the strategic plan
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1
The marketing plan

for the strategic plan
The marketing communications plan

for the marketing plan
Think about it:

Nothing happens
until somebody buys something
Value of a strong brand
“People don’t buy something;

they buy from someone4”
4and that’s what “brand” is all about
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• Trust
• Trust
Trust isn’t earned by what you say;

it’s earned (or lost) by what you do
• Trust
• High interest in new market offerings
828,000 albums sold off iTunes in three days!
3
• Trust
• Price premium
10
de Bono’s three stages of business
1) Product and production stage

2) Product relative to competition
3) Sur-petition
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• Trust
• Price premium
• Protection from competitive challenges
vs.
It’s not about making the sale,

it’s about building a customer relationship
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4
Positioning
The objective of positioning is to persuade someone

that there is no completely satisfactory substitute
for your product or service
vs.
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• Trust
• Price premium
• First choice of best talent
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• Trust
• Price premium
• Benefit of the doubt if trouble comes
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• Trust
• Price premium
• Benefit of the doubt if trouble comes
• Investor preference
Union Carbide share price in 1999 pre-Dow acquisition = $49

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How to build a strong brand
• Figure out who your customers are,

what they need and want,
and what their values are
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Marketing driver analysis
• Profitability is driven by customer behavior

• Behavior is driven by motivation
• Motivation is driven by4 perceived value
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6
Value proposition
If the price is equal, certain specific customers

will buy our products rather than competitive
products because they value _______
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Value proposition
Certain specific customers will pay a premium

for our products, because they value _____
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Brand-building resource allocation
Perceived
^
Value to the customer
Cost of the product
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Brand-building resource allocation
Where the price falls is a function of power
What matters is understanding

what constitutes value to the customer
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• Find a way to connect with those values,
wants and needs based on who you are
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Company vision and brand purpose
24
8
Typical vision statement
“Nestle is the world food company dedicated

to providing people and their pets with the best food
and beverages throughout their lives.
We will not rest until our employees, our consumers,
our customers, our suppliers and our shareholders
judge our company to be the very best.
Our commitment to achieving our vision
is the source of Nestle pride.”
25
Typical vision statement
“The Ritz-Carlton Hotel is a place where the genuine

care and comfort of our guests is our highest mission.
We pledge to provide the finest personal service
and facilities for our guests, who will always enjoy
a warm, relaxed, refined ambiance.
The Ritz-Carlton experience enlivens the senses,
instills well-being, and fulfills even the unexpected
wishes and needs of our guests.”
Take a look at your own vision statements4

Are they “we we? or outside-in, i.e. about your customers?
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Your vision statement
What does your company’s vision statement say?
Will it be the same five years from now?

Why or why not?
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9
Brand purpose
WalMart (retail)
“We save people money so they can live better”
Fidelity (investments)
“We help people create better lives
for themselves and their families”
Sherwin-Williams (paint)
“We help people use color to brighten their lives”
What is your company’s brand purpose?
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Brand positioning
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Brand positioning
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Brand positioning: Kathy Button Bell

“A few basics can help every traditional company move
forward. First, concentrate on what you do and not on what
you make. This is a terrible mistake that manufacturing
companies tend to get mired in. Secondly, practice research
and great listening skills to better define exactly who the
company is and what it can grow into. You need to stay true
to the authentic ‘bones’ of the company. You don’t want
‘reinvention’ — you want to build aggressively
on your differentiation. Third, think of complexity reduction
in marketing. Less truly is more when trying to make
progress. Always go back to your main brand story.”
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• Frank Compton’s title:
“Chief Storyteller”
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“What I do for a living is tell stories.”
Glen Cobin, brand-building firm founder
What is your company’s story?
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• Find a way to connect with those values,
wants and needs
• Communicate with urgency
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Agency assignment: Zero to national brand in six months
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• Cable TV show, Website, Social media presence, Mobile phone apps,

Product placement, Interviews on women’s TV and radio talk shows,
Publicity in women’s fitness magazines, Blog
Exercise book, Branded exercise apparel and footwear,
Diet book, Branded vitamins and supplements,
Food and beverages, even Housewares
Retail store deals in selected outlets, Direct marketing print
and TV deals in selected media
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How to lose a strong brand
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• Forget who you are
- In your customer’s mind
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• Forget what you “own”
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• Forget what you “own”
• Forget that it’s not all about you
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Marketing myopia
Theodore Levitt
Harvard Business School
Satisfying a customer’s need4

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“Why everything they ever taught you

about marketing is wrong!”
Kotler’s 4P’s
vs. Lauterborn’s 4C’s
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Lauterborn’s 4C’s marketing model
• Not product:
Customer wants and needs
• Not price:
Cost to satisfy those needs
• Not place:
Convenience to buy
• Not promotion:
Communication
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“No one buys a product or service;

they buy the anticipation of an experience”
Bob Lauterborn
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45
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Value proposition criteria (Aaker)
• Functional:
- How does a customer use your product?
- What does he or she do with it?
• Emotional:
- How does it make him or her feel?
• Self-expressive:
- What does it help him or her to become?
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The power of a strong brand

Brand leaders
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Brand
Brand leaders2008
leaders5of 1928!
• Soup
• Soft drink
• Canned fruit
• Film
• Appliances
• Tires
• Crackers
• Chewing gum
48
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Questions?
lauterprof@aol.com
www.rlauterborn.com
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50
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Branding: How It Works and Why It Matters

Prof. Robert F. Lauterborn

Prof. Robert F. Lauterborn

Core concept of marketing

The marketing plan

BCG portfolio analysis tool

Core concept of marketing

The marketing plan

The marketing communications plan

Core concept of marketing

Think about it:

Value of a strong brand

“People don’t buy something;

Value of a strong brand

Value of a strong brand

Trust isn’t earned by what you say;

Value of a strong brand

828,000 albums sold off iTunes in three days!

Value of a strong brand

de Bono’s three stages of business

1) Product and production stage

Value of a strong brand

It’s not about making the sale,

The objective of positioning is to persuade someone

Value of a strong brand

Value of a strong brand

Value of a strong brand

Union Carbide share price in 1999 pre-Dow acquisition = $49

How to build a strong brand

• Figure out who your customers are,

Marketing driver analysis

• Profitability is driven by customer behavior

If the price is equal, certain specific customers

Certain specific customers will pay a premium

Brand-building resource allocation

Cost of the product

Brand-building resource allocation

Where the price falls is a function of power

What matters is understanding

How to build a strong brand

• Figure out who your customers are,

Company vision and brand purpose

Typical vision statement

“Nestle is the world food company dedicated

Typical vision statement

“The Ritz-Carlton Hotel is a place where the genuine

Take a look at your own vision statements4

Your vision statement

What does your company’s vision statement say?

Will it be the same five years from now?

What is your company’s brand purpose?

Brand positioning: Kathy Button Bell

How to build a strong brand

• Frank Compton’s title:

How to build a strong brand

“What I do for a living is tell stories.”

Glen Cobin, brand-building firm founder

What is your company’s story?

How to build a strong brand