Creating meaning in the way we satisfy consumer needs and engage with them
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This document discusses the changing landscape for brands, with an informed and engaged consumer who is difficult to reach through traditional media. It emphasizes that brands must offer real consumer value and differentiation through deep consumer insights and engagement. Brands will need to move from product categories to concepts that span categories and are defined by their meaning to consumers. Authenticity, quality, and delivering on brand promises through all consumer touchpoints will be important in this new era that values substance over puffery in branding and marketing.
Creating meaning in the way we satisfy consumer needs and engage with them
- 1. Engaging in meaning in brand value and consumer engagement… the future of brands.27 September 2011
- 2. We will coverHow: An informed consumer;Media proliferation making it difficult to pinpoint a given consumer;An explosion in social media;A global shift in consumption; Brand parity in most categories;Increasing difficulty to establish a competitive advantage for a brand;The questioning of marketing ROI. Introduces an era of “substance” in branding & marketing.This impacts how we create - and communicate - “meaning” for consumers:What our brands offer in real consumer value; How we differentiate them; How we integrate it into all the brand interfaces;What channels we use to engage with consumers.The above impacts the role of consumer insights; the marketing discipline and the company philosophy.
- 3. The consumer is informed, in control and engages when he/ she feels like itThem“Us”The traditional view of brands telling consumers what they should know, is gone. We now have little control over what is said about us. At best we can engage with honesty and transparency. And not be boring!
- 4. Are we ready for “deep consumer engagement”?Human, likeable, in-tune and in-touch. “One of us”, not “us” and “them”.Share in their communities. Amediated environment. Yet, why do most brands use social media merely as extensions of their websites? We still see marketing as something we DO to the consumer.We need to become consumers!
- 5. Reaching them is a challenge, establishing differentiation is even more difficultDifficult to reach consumersEasy to talk to consumersQuestion: how do you differentiate yourself in the current short-term insurance market? Will a consumer even listen to what you say? (But it shows that you CAN still buy awareness!)
- 6. Choosing media is now complexMedia channels have grown exponentially. It has proliferated message dissemination and it makes it more and more difficult to reach a given consumer. We cannot “pin down” the consumer like before.
- 7. Traditional media types are being challengedThere are four reasons for this:The cost of media.The sophistication of consumers.To break through the competitive clutter, has become difficult - and costly.A decline in the impact of traditional marketing (in some markets and product/ service categories like financial services, the number of breakthrough messages is less than 10 in 100 (Millward Brown). Traditional media are now less successful – and its share of exposure is in decline.
- 8. YET, advertising is NOT DEAD as some want us to believeThe Virgin Atlantic “still red hot” campaign (2009) started a viral explosion. Advertising still has the power to open the floodgates = if it is really good. “… it energized and engaged a whole new constituency out there…”Steven Ridgway, CEO of Virgin Atlantic.
- 9. Brands will create their own media – define themselves in the “utility” space
- 10. The more functional buying becomes, the more entertaining the retail environment needs to be
- 11. Brand proliferation is extreme, leading to an explosion in choiceMost industries are saturated with brands. The boundaries between product and service categories are converging. These factors make it difficult for any given brand to gain a significant advantage over others. In some industries, it may have become impossible to establish a competitive advantageunless a brand fundamentally changes the rules of competition.
- 12. The result is that all brands are seen as about the sameConsumers increasingly see brands within the same product or service class the same. If so, why pay more for a given one?
- 13. We have brand parity in real and in perceptual termsMost brands in the same class deliver about the same – and our communications look about the same.
- 14. Content is king in deep consumer engagementUnless what we do is really good: informative, relevant and engaging, we are wasting our time. There is no place – or money – for mediocrity of content today. We will simply be talking to ourselves.
- 15. Brands and their renewed global statureGone is the era of Naomi Klein and the “No Logo” generation…Brands are more alive than everBrands are dead
- 16. Within emerging markets, brands are pervasiveRight now, brands define people more than thirty years ago!There is no subtlety. Brands get defined by their individual - and collective - “meaning”.
- 17. The emergence of “brand-new-brands”Technology enabled brands
- 18. Brands catering for the “bottom of the pyramid” Established iconic brandsMost new global brands are technology brands.Yet, compare the significant innovation by companies like Proctor & Gamble and Unilever in emerging markets.
- 19. This is leading from product & service innovation to “design thinking” in large companies“Design thinking” - the new buzzword that works for companies from Unilever to Proctor & Gamble.The entire company drives innovation, using a combination of internal to external resources.They often involve small independents to develop new concepts. Innovation drives brand leadership and margins.
- 20. An important view from Gary HamelToday 90% of what you need to know,happens outside your industry. Otherwise you can at best be as good as the best out there, instead of changing the category parameters.Real margins now lie in changing the status quo. The death of “incrementalism”?(Gary Hamel)
- 21. The global economic shift is good for brands…Developed markets drive growthEmerging markets drive growthEmerging markets now constitute 50% of global GDP.The BRIC countries may now save the West! The new consumer is “consumption-driven”.
- 22. Infinite imagination rules in the “new-new world” - all the tallest buildings are now in emerging marketsEmerging markets do not just copy. Brands like Samsung and Hyundai are highly innovative. Emerging markets are the new pioneers: they energize and inspire.
- 23. Will new products and services require“deep” differentiation?Strong functional & emotional differentiation; high marginsCommoditisation; reduction in profit margins
- 24. What is “inside” – integrity/ quality - now mattersWhat used to beBelieve what the marketer says. Often “puffery” (words like the “best”; the “leading”; the “only”; the “first”).Possibly creative but often in-substantive advertising.What is nowSubstance and integrity matters, quality is now more important than ever – and is seen as the norm, not the exception. In many surveys, emerging market consumers place quality first – if they can afford it. What the consumer sees and experiences.What the product looks like - and how it performs. Fact-based.
- 25. “In order to be irreplaceable, one must always be different.” Coco Chanel
- 26. Brand authenticity matters – where do you come from? What makes you unique?In Fortune of October 22, 2007, the CEO of Burberry, Angela Ahrendts, emphasizes the importance of being British as a differentiator for the fashion brand. She stated, “Our goal is not to be Hermės or BottegaVeneta. Britishness is so much a part of what we’re about –now let’s do that better than anyone in the world.”
- 27. Apple illustrates this principle well: its products are really different, enabling it large margins“Design is not just what it looks like and feels like. Design is how it works.” (Steve Jobs)To illustrate: non-Apple tablet computers only sell if they discount!
- 28. The Coca-Colalogo takes ownership of the category
- 29. A brand is what is delivered, not what is saidWe had customer service and service excellence. We had best-practice. We had customer satisfaction.We now have a branded customer experience through all consumer touch points.According to Forrester Research, 92% of US executives rank customer experience as very important, yet only 38% do anything about it. In a HBR survey of CEO’s, 80% said their customer service was good to excellent. When their customers were interviewed, only 8% said they received good or excellent service from these same companies!If we do not deliver an “on-brand” experience at each customer touch point, we are inefficient. In an era of social media it will also signify “dishonesty”: to say one thing and act another!
- 30. There is a major shift in “brand meaning” (Verganti)Category brandsConcept brands
- 31. We move from product to concept brandsBrands defined within industries.Brands have narrow meanings (Toyota = cars).Brands defined within the consumer user space.Brand concepts span categories (Apple = products that are fun and easy to use).Brand meanings are more important than category meanings. Brands now manage “meanings”. Products support these meanings.
- 32. A given philosophy underlies concept brands “The Virgin brand (philosophy) is built around an idea — being the‘people’s champion”’. Virgin finds gaps in how other brands service or under-service their customers…and then jumps in…
- 33. Swarovski has extended its “brand meaning” dramatically – from ornaments to…
- 34. Consumer engagement expects a dialogue, not a monologueOngoing changeConsistency
- 35. We are moving from an era of consistency to ongoing changeConsistencyIdentities were slowly and incrementally adapted when they became stale. When this was was rather arbitrary.And whilst a degree of consistency remains important, it is no longer as simplistic as that.Ongoing changeThe new rule is to challenge the consumer.The new rule is to engage and involve the consumer.The new rule is to set “the boundaries of engagement” for a consumer.
- 36. A brand like Shell gradually adapted its identity over the years
- 37. As against Shell,BPchanged its name, positioning and identityThis added a dynamism to the brand that no other petrochemical brand has! And it increased sales.
- 38. To enable an authentic dialogue, we need to know what is core to our brand, yet how we can extend the way it speaks
- 39. To do all of the above well, we really need to know our customers!Deep consumer insight, observation and intuition Consumer research
- 40. Customers are no longer “disguised” amidst the massesNot just quantitative research. Qualitative, observation, experiential. Creative interpretation of it.Insights central to decision making, not just an entity churning out figures with lip service paid to it. Link internal and external data. Really identify customers by name. Really place the consumer in the centre.
- 41. To do all this, we will need to reassert the role of marketingMarketing as an intangible costMarketing ROI
- 42. The credibility and stature of marketingDespite CEO’s saying marketing is now more important, they also say it is not accountable enough.In a US survey of CEO’s, 75% complained their business and marketing agenda’s, were not aligned.
- 43. Marketing permeates everything…Marketing departmentsThe marketing organisation
- 44. The best marketers are not marketers!
- 45. The brand as defining the organisationBrand a “sub-set” of marketing.Brand defines the way the organisation works and delivers customer value. We organise the company around the brand.
- 46. To conclude: we will manage meaningAn informed consumer;
- 48. An explosion in social media;
- 49. A global shift in consumption;
- 50. Brand parity;
- 51. Increasing difficulty to establish a competitive advantage for a brand;
- 52. The questioning of marketing ROI. Introduces an era of “substance” in branding & marketing.Brand owners will engage in “creating reciprocal meaning” – to do that they will need to extend the language of the brand: in what it delivers, how it speaks, what it says and what channels are used. The everyday challenge will be to remain relevant and interesting!
- 53. In the brave new world of marketing, do something that scares you everyday Otherwise computers can do our jobs!