[MUSIC] So one of the management challenges we have is, how do we build strong brands? How do we fix weak brands? What can we learn? Now the inventor, so to speak, of modern brand management is Neil McElroy. And he was a young executive at Procter and Gamble in 1931 when he wrote a memo outlining what he called the brand man. And he outlined what brand men, and they were typically men back then, had to do. They would study when brands sold a lot, which units, where. What are the reasons why they sold? And when products didn't sell so well, to really understand the basis for that. And to keep track of that, to keep notes, to basically understand, to gain insight into what worked and what hasn't. Now that has grown into a very large industry worldwide. And what we really think about now is, well, what is the health of our brand? What is the strategic health of our brand? How can we represent this? And there's companies worldwide who are doing this across sectors. They're looking at you and your competition because it's not just about how well you’re doing, but how well you’re doing compared to others. So, if we go back to module one, if you can, when we introduced the three B framework, business, brand, and behavior, we talked about traditionally how do we think about it, and there were a couple of visuals we used there. One was the funnel. So this was the sales funnel, and just to remind you, it was about, have we created awareness of our brand? Are people considering it? A subset of those are actually buying us, and a subset of those will buy nothing else. They're very, very loyal to our brands. So that's in some sense, that is the basis, the spine, if you will, of what Neil McElroy was talking about. And the modern way of measuring brand health is traditionally this turned upside down, which is basically from a brand perspective, which is not looking at the sales, but it's saying okay, how many customers are aware of us? How many consider us? How many prefer us, if you will? You might prefer me, but still buy something else because of price. How many buy me? How many have an emotional bond with me, where they really would struggle to buy something else? So maybe if you love Coke, you would actually go somewhere else to find your Pepsi. You might walk to another store. If you love Adidas, you might not buy Nike, even if it's on sale. So that's one aspect of the model. Now, the other one was the brand image, which is really a set of associations in consumers' minds. So, what these global brand tracking studies do, in essence, is create these pyramids of this sales funnel turned upside-down. And additionally, they tried to measure based on many, many different criteria, what is the brand image in consumers' minds? So, one of the leading companies in the space is part of Young Rubican, their brand asset evaluator. And they will look at that pyramid, basically at the bottom. As I said, it's about awareness, it's about preference. It’s about bonding and so forth. Another brand in the space is brand Z by Millward Brown, which is part of WPP, and they use a very similar approach. They add a twist though, which is kind of interesting, which looks at the momentum, what they call the conversion metric, which they call voltage. Which is basically saying, well, how well am I doing at converting customers from one level to the other? So if you think about awareness, well, I've made a lot of people aware. Has that investment paid off in terms of consideration or preference? How well am I doing it converting preference into sales? How well am I doing in converting current sales into repeat sales, which might be something like bonding, that you might think of? And that vaulted score gives them a sense of the trajectory of where the company is going, right? A few people know of me, but it's kind of like this straight line, a cylinder almost. Well, those maybe niche brands. I'm not known by a lot of people, but boy, do they love me, and they will go nowhere else, and they bond with me. There's other brands, which have a different shape. Maybe you're losing out in preference. People keep on buying you, but it's basically habit. It's no longer because of an emotional bond, those brands are at risk. And then, you have strategic implications, which are quite different for these different brand profiles. Now the brand image I mentioned is separate from this inverted funnel or this pyramid, if you will. And that's really about understanding how do people perceive my brand? Are they perceiving it in a way that I intend them to perceive it? So if you brand is about reliability, are they perceiving you as reliable or maybe unreliable? Maybe there's some negative perceptions. So I need to kind of measure both. Do they trust me? Or if I'm Southwest Airlines, which I've mentioned in an earlier module, if it's about fun, well, do people see me as fun? If I'm about cheap and cheerful, do they see me as great value? Maybe not the cheapest, but as great value. Now what these global brand tracking studies do is they have a set of maybe 30, 40, 50 different associations, and more or less, they should match most brands' desired positioning in the space. Now your job as a brand manager is to think about well, am I taking ownership of those associations that I want to own? So Volvo owning the concept safe, Disney, the concept of magical, Southwest Airline, cheap and cheerful, right? The list goes on. And I'm also avoiding those negative associations that would undercut, would threaten the bond my customers have with me. So in essence, that's what these brand health metrics do. Is the image as I intend it to be? Is there a match between what I want and what I promise and what customers perceive? And then, if you think about that pyramid, or the inverted funnel, is that translating into changes in actual customer behavior in terms of consideration, in terms of purchase, and loyalty, if you will? Now, one final aspect of brand health is to really look beyond kind of the headline number. And this is something I see all the time unfortunately, management is very busy. We might go and have these syndicated studies, third-party vendors like Brand Z or Brand Asset Valuator, and they basically give you an average RAND health score across the population. We tend to do the same thing with customer satisfaction scores or net promoter scores, if you will. We often look at the population at large, instead of looking at the narrow or narrower segment of customers that I actually care about. Now for some brands, this can be a real problem because by appealing to some groups of customers, I'm actually not appealing to other ones. There was a chocolate bar here in the United Kingdom, which was called Yorkie. And for a long time, even here and now, they had a signal on it, which said not for girls. It's basically a sign for girls with a big cross through it. Why would they say it's not for girls? Well, every little boy, if it's not for girls, they'll grab this candy bar, because it's for them. My son, who is a couple years older than my daughter, loved this candy bar, why? Because it meant his little sister couldn't have it, even if she wanted to. So if I look at the average liking of that bar, of course, she hated that candy bar at the end because it's not for her. If I looked at the average liking, well, that doesn't mean very much. He loves it, she hates it. I get an average score. Does that mean my brand is weak? Not at all. Another example here is you might think about Marmite. So this brand recently celebrated 100 years of love and hate. Some consumers love it, others hate it. And they made a play of it. Again, the average score is not very meaningful. I need to think about this carefully. Now, another brand many of you will know is Red Bull. Red Bull is kind of for young, excitement seeking, predominantly males. Again, a story, this involves my son again. He decided, or I should say, his friend decided he would adopt Red Bull at the age of 12, which was of great concern to his mother, because this is of high caffeine value. She really didn't consider this the appropriate drink for her son. But she knew if she forbade him to drink Red Bull, he would only desire the brand more. And in some ways, if you think about that logic, she in a sense is the out group. Not only is he trying to identify with these young, excitement seeking men, sort of this macho personality, he's also, in terms of identity, trying to disassociate himself from his mother, the out group, if you will. So there's that tension between the in group and the out group. Now my recommendation to her was a bit more devious. I suggested that the next time they came over and they came back from the park, that the mothers would sit around the kitchen table, all of them drinking Red Bull, instead of the tea or coffee that they would normally consume. Now you can imagine what happened. Two boys coming back from the park, soccer ball under their arms, and they literally froze as they came in. And my friend's son looked at her, and he said, what are you doing? I'm drinking Red Bull. But Mommy, why are you drinking Red Bull? It's got so much caffeine, all the mothers love drinking Red Bull. It's a mommy's drink. And you can see in his head little cogs turning. Mommy drinks Red Bull, it's a mommy's drink, I cannot drink Red Bull. Now if she hadn't started laughing, she might've gotten away with it. But what I'm trying to do here is to illustrate that notion, to be very, very clear. Which of the customers do I want to have a strong brand image with? Because I'm trying to drive their behavior. And sometimes it means actually dissociating yourselves from the wrong kind of customers. Now I've given you a couple of consumer examples, but let's think about this in the luxury space as well. Let's think about a British luxury brand, Burberry. Burberry's got that distinctive plaid pattern. Well, about ten years plus ago, they were in a desperate state in the UK. Why? Because a certain segment of consumers in the UK made Burberry their colors. They called themselves with pride, the chavs. These are people, maybe football hooligans, they wear heavy gold chains. They're typically the kind of people that the luxury customer would not want to associate with. Actually, they felt they didn't want to be robbed by these people, to be quite frank. Now they made Burberry their color, now the real problem was, of course, that Burberry wasn't actually selling to them, because they were buying fake Burberry product. But because these chavs were wearing the Burberry colors, the luxury customer stopped wearing Burberry. And sales kept on going down. And it was not until the new CEO at that time, Angela Ahrendts, and the creative director, Christopher Bailey, came onboard, and they downplayed those colors in Burberry. And they tried to crack down on the fake product, that took them a few years, but they managed to get the chavs to reject Burberry as a brand. They basically said, if you don't want us, we'll move somewhere else. And that the start for the rejuvenation of the Burberry brand. So when we think of brand health, to summarize, think about which associations are the ones that I want to own, which are the ones I don't want to own. Critically think about the customers with whom you want to own these associations, which ones do you want to sell to, which ones do you not want to sell to. And then think about that pyramid or inverted sales funnel because that's what's driving your business at the end of the day. And what you're seeing is, you're basically looking at your revenues almost like an accordion. I think of this as this stairway to revenues. Am I taking customers from awareness to consideration, from consideration to trial, from trial to repeat, to cross-selling, up-selling, loyalty, whatever that might be? And at which point is my health of the brand allowing me to migrate the customers to become loyal customers? That's why we need brand tracking, and traditional brand metrics allow us, if you will, to kind of drive our strategy without a blindfold. We have a better view of the territory, and we can better navigate the space. And that's why we need brand tracking to allow us to gain traction for our strategy. [MUSIC]
