Issue 1 | Volume 1
What Every CEO Should Expect From Their CMO Jonathan Becher
Lego Enters The Girls Domain Svend Hollensen
Why Do Fans Buy Tickets? Kirk Wakefield
The Chinese: Global Branding Geniuses Martin Lindstrom
Focus: South Africa Danette Breitenbach & Antony Michail
Kevin Lane Keller:
Navigating the future of Brand Management
Global CMOâ„˘ is the Official Magazine of Global Marketing Global CMOâ„˘ TheNetwork, Magazine the Global Body for Marketing Professionals. March 2013 | 1
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Global CMO™ The Magazine
Dr Tracy Tuten
Marketing Professionals: Welcome To Your New Global Magazine After a lot of hard work from our wonderful team and more than a couple sleepless nights, Global CMO™ The Magazine is now ready for launch! This is probably going to sound a bit like an Oscars speech, but here goes anyway... There are a lot of people that we would like to thank for being a part of this positive initiative for the Marketing Profession. Of course I have to start with our own team, knowing just how much work has gone into this. Along side them, the core team at GMN deserves a lot of thanks too.
Cover Image: Kevin Lane Keller
There are also a number of contributors we must give thanks to for being willing to get involved in our very first issue.
Global CMO™ The Magazine
First and foremost, Kevin Lane Keller for being our lovely cover model and featured Thought Leader. Danette and the team at Advantage Magazine for their work on the South Africa Focus, Jonathan Becher, Svend Hollensen, MaryLee Sachs, Tom Fishburne, David Hood, trendwatching.com, Ardi Kolah, Martin Lindstrom, Antony Michail, Kirk Wakefield, Steffano Codurri, and the ever-elusive “Walter Spoonbill”. Every month in Global CMO™ The Magazine, we will look to bring you the very latest and best practices in Marketing. Providing you with thought-provoking articles, informative interviews, the latest research, case studies, reviews of currently recommended books, upcoming events and programmes. Integrating with the magazine, is the online Marketing resource Global CMO™ The Community providing even more value with additional articles, news, events, publications, forums and even a question and answer section. Global CMO™ The Community will also be the home of the full directory of GMN Members. I recommend popping over to the new site (there are many links in this magazine) when you get a chance, to find out everything that it offers. So, once again, a big Thank You to everyone who has made this new publication possible. We appreciate everything you have done. And to all our readers - Thank You, for taking the time to read it. We hope you gain some useful insights from this, our first fully fledged issue of Global CMO™ The Magazine, and look forward to providing you with many more in the future. We look forward to receiving your feedback, ideas and suggestions (you can do this in the ‘Letters To the Editor’ section of our forums on Global CMO™ The Community). Until next time,
Global CMO™ The Magazine
Issue 1 | Volume 1 | March 2013 www.theglobalcmo.com The official Magazine of Global Marketing Network, the Global Body for Marketing Professionals.
Advertising and Sponsorship: firstname.lastname@example.org Click here to view media pack and rate card Production: email@example.com Editorial: firstname.lastname@example.org Editorial Board: Editor-in-Chief | Fiona Vesey GMN CPD Director | David Hood GMN Global Faculty | Professor Greg Marshall GMN South Africa | Dr Anthony Michail GMN Global Advisory Council | MaryLee Sachs GMN Global Faculty | Professor Michael Solomon GMN Brand Guardian | Andrew Vesey GMN Membership Committee | Dr Kellie Vincent Published in collaboration by: Vesey Creative Ltd email@example.com www.veseycreative.com UK +44 131 208 2285 NZ +64 9 889 0013 Global Marketing Network firstname.lastname@example.org www.gmnhome.com
As the publishers of Global CMO™ The Magazine, we take every care in the production of each issue. We are however, not liable for any editorial error, omission, mistake or typographical error. The views expressed by all contributors are not necessarily those of the publishers. Copyright: This magazine and the content published within are subject to copyright held by the publisher, with individual articles remaining copyright to the named contributor. Express written permission of the publisher and contributor must be acquired for reproduction.
March 2013 | 5
Inside This Issue Cover Story 38. Brands That Transcend How to navigate the future of Brand Management Kevin Lane Keller
50 Shades of CMO
The Banker / BrandFinance® Banking 500
In Association with BrandFinance®
LEGO - World’s third largest toy manufacturer moves into girls’ domain with LEGO Friends
Why Do Fans Buy Tickets? What Drives People To Purchase?
Getting The Job Done: A New Approach To Marketing Wine
How The Chinese Became Global Branding Geniuses
Looking To Contribute? Find out more here.
70. How To Ensure Your Sales Pipeline Is Realistic Rather Than ‘Over Optimistic’ In 2013
Focus: South Africa In Association With Advantage Magazine
60. Targeting a shifting market 63. Building on culture 66. Emerging markets coming of age
68. Developing Marketing Capabilities in South Africa Antony Michail
6 | March 2013
Global CMO™ The Magazine
Global CMO™ Regulars
8. Global Partnerships News from around the globe, from GMN and it’s partners
10. Upcoming Events 12. A View From The C-Suite What Every CEO Should Expect From Their CMO Jonathan Becher Chief Marketing Officer - SAP
11. Ask The Experts
14. Thoughts From The Boardroom The Future Is Now: It’s Time To Create The Future CMO Today Darrell Kofkin
GMN Fellows answer your questions
48. Partners For Marketing Growth The Global Marketing Network Partner Directory
24. The Trend Report With trendwatching.com
Innovation in Asia, by Asia, for Asia set for rapid growth in 2013 and beyond.
29. “Getting It Done”
74. Global CMO™ Recommended Reads The latest books every Marketing Professional should read
The Right Tool For The Job. Andrew Vesey
A listing of all Official GMN Events and GMN Endorsed Events around the world
33. The Marketoonist Maslow’s Hierarchy of Needs Tom Fishburne
56. The Marketing Manifesto ‘The Purpose of Marketing is the Marketing of Purpose’ David Hood
Join The Discussion: When you see this box on an article, it lets you know that there is a special discussion dedicated to it on Global CMO™ The Community.
72. GMN Fellow Profile Markus Pfeiffer
Founder and Managing Director, Bloom Partners GmbH
75. Midnight Worries Walter Spoonbill of Spoonbill & Coot answers your marketing midnight worries.
This month - is “new” a company saviour or curse?
Global CMO™ The Magazine
Follow the link, join the discussion and find out what others have to say about the topics raised in the article. We believe Peer-to-Peer discussion is a vital part of Continuing Professional Development. So please do visit the community and join the discussion. March 2013 | 7
Global Partnerships A Major Forward Step for the Marketing Profession in Brazil
Professor V Kumar
Global Marketing Network and Pontifícia Universidade Católica Do Paraná (PUCPR), recently ranked by as the 3rd leading private university in Brazil, has launched a collaboration committed to building a stronger, better respected and more unified Marketing Profession in Brazil. Through the collaboration PUCPR becomes an Academic Partner of GMN, joining other leading universities, publishers, marketing associations, and marketing and business leaders that together are committed to GMN’s vision for building a stronger, better respected and more unified Marketing Profession, worldwide.
Click to watch the course review online.
Says GMN Chief Executive Darrell Kofkin. “GMN only works in partnership with world-leading organisations who share our commitment to providing the Marketing Leaders of today and tomorrow with the capabilities they say they require in order to survive and indeed thrive in the 21st century. We are proud and delighted to have formed a collaboration with PUCPR, in recognition of its hard-won status as the 3rd ranked private university in Brazil and its continuing commitment to the delivery of high quality marketing education and professional development.” Included within the plans being drawn up by GMN and PUCPR is the launch of The Global CMO Programme, a unique programme consisting of masterclasses delivered by leading members of the GMN Global Faculty featuring some of today’s leading Marketing experts, each a world-recognised expert in their own area of marketing specialisation. The collaboration was formally announced at an inaugural lecture delivered by GMN Global Faculty Member, Professor V Kumar, recognized as one of the world’s leading experts on Customer Engagement. Professor V Kumar then delivered a 2-day masterclass on Customer Profitability to around forty senior marketing professionals. ~ CMO
Click to watch PUCPR video online.
Left to right: Carlos Augusto Fontanini; Business School Dean, Professor V Kumar fgmn, Dr Eduardo Damião da Silva; Vice Rector for Academic Affairs
Africa Comes to Oxford Oxford Brookes University Business School is the latest organisation to become a GMN Academic Partner. To celebrate this The Oxford Brookes Global MBA held a special networking event on their UK campus on 7th March. The event focused on the role and importance of Africa in today’s business world. Africa is now universally recognised as the next big investment frontier after the ‘’BRIC’ economies. Its abundant natural resources, solar potential, agricultural land and upwardly moving population, makes it as one of most attractive places in the world - the next frontier. GMN Special Adviser – Africa, and prominent Africa business leader Anurag Saxena led a fascinating exploration of the scope of the opportunity in Africa. Growing at 5% per annum he put forward a compelling case for investing in Africa. Then followed a lively Q&A chaired by Dr Sola Adesola Senior Lecturer, International Business Strategy, Operations, Africa, Law & Entrepreneurship and Chair, Brookes Africa Forum at Oxford Brookes University
Left to right: Dr Sola Adesola, Anurag Saxena fgmn
The evening was also attended by Dr Louise Grisoni, Associate Dean Research and Knowledge Exchange at Oxford Brookes University. A corporate poet, she wrote a special poem to sum up the event:-
THE OXFORD BROOKES MBA
Africa is calling Open your eyes, your hearts, your minds Millions on the move Releasing the lions to play with dragons and tigers Virtual transfers Funding food, fashion and finance Yes there are risks But opportunity calls in the Dark Continent Ask not what we can teach Africa But what Africa can teach us No charity or sympathy required Keep heart with the people, feet on the ground And eyes on the goal Football rules!
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Combining academic rigour with professional executive development, taught by leading academics with extensive business experience, our MBA is based upon four key attributes: connectivity, collaboration, creativity and commercial practice. Available on-campus and online, or in combination, our renowned programme is adaptable enough to accommodate your working life. Individual careers coaching ensures that you gain full value from your investment in the Oxford Brookes MBA. Find out more:
Upcoming Events Offical GMN Events: Measuring Marketing Performance Masterclass 20th March 2013, Athens, Greece
Digital Marketing and Social Media Masterclass 10th April 2013, Athens, Greece
Winning the Empowered Consumer Masterclass 26th June 2013, Athens, Greece
GMN Endorsed Events: Mauritius Marketing Workshops 3rd-4th April 2013, Cybercity, Ebene, Mauritius.
The Festival of Media Global 2013 28th-30th April 2013, Montreux, Switzerland
On The Edge Digital Conferences
Would you like your event endorsed by the Global Accreditation Body for Marketing Professionals? Find out more here.
London, 30th April | Manchester, 23rd May | Bristol, 11th June | Birmingham date TBA
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10 | March 2013
HootSuite is a social media management system for businesses and organizations to collaboratively execute campaigns across social networks such as Twitter, Facebook, LinkedIn and Google+ Pages from one secure, web-based dashboard. Advanced functionality includes tools for audience engagement, team collaboration, account security and comprehensive analytics for end-to-end measurement and reporting. •• Over 6 million global users spanning six continents. •• HootSuite’s users send over 3 million messages through the dashboard each day. •• Over 1.2 billion messages have been sent through HootSuite since its launch. •• Notable clients include 79 of the Fortune 100 companies, as well as McDonalds, WWF, PepsiCo, Virgin, FOX, Sony Music among others. Global CMO™ The Magazine
Ask The Experts Do you have a question for our experts? Some of the best questions posted in the ‘Ask the Community’ section on Global CMO™ The Community will be answered here by our GMN Fellows*. Post your question today.
*Note: our experts may vary in each issue fgmn
A strategy ought to be viewed holistically - as a plan for going to market which integrates all aspects of organisation, from resources and competitive advantage through to the 4Ps. Revisit your strategy and ensure that all the pieces are complementary, and that there is an internal logic to the strategy which makes it a unified whole.
Selling and Sales Management
The much heralded war between marketing and sales is a civil war and it is destroying brands and customer relationships. Ending this war is beyond the scope and capability of mid-level marketing and sales managers. For the sake of the organization, truce must be called by the CEO and truce violations cannot be tolerated going forward.
A number of syndicated services provide ongoing tracking of macro consumer behaviour trends. In addition, the explosion of social media makes it possible to stay on top of what real people are talking about and thinking about. For example, the Trending Topics section on Twitter provides a free glimpse into ideas that are surfacing.
Global Marketing Stategy
When your organisation has decided to internationalise a key challenge is to select the most attractive markets (countries). In this ‘screening’ process you should try to match the internal competencies with the external market opportunities. For example many organisations are considering the socalled BRIC nations (Brazil, Russia, India and China). Whilst the total BRIC population accounts for approximately 42% of the world’s population, it only accounts for around 20% of the world’s GDP. However, this percentage is expected to increase in future as a result of the increasing economic activity in the BRIC countries compared with the “old” economies of Europe and North America.
Digital Strategy and Innovation
Do not underestimate the power of digital communications with your customers. Classic media like TV and print may still seem like a safe haven to reach broad audiences, but digital channels, i.e. social media, will drive these mediums down to marginal effectiveness. And your website is not enough when you want to leverage the full potential.
Examine the big picture marketing metrics before drilling down into the tiny details. Global CMO™ The Magazine
March 2013 | 11
What Every CEO Should Expect From Their CMO Jonathan Becher
We all know that consumers are disrupting companies’ business models. One visible example is the increasingly popular practice of “scan and scram” (a.k.a. “showrooming”), in which customers browse in brick-andmortar stores but use their mobile devices to find better prices online. According to comScore, four out of ten consumers “showroom” first then purchase online. Some retailers have attempted to counter this trend by rolling out price-matching guarantees.
gap between what you say and do. Everything, from the distribution network to the call center to R&D, must support a company’s positioning. It’s not just about consistency of message; it’s a matter of survival.
But discounting is not a long-term solution. Given access to information in the Internet age, low price is an indefensible strategy. At a time when business models are being continuously challenged, every customer must know exactly what your company stands for if you want to stand out.
Said another way, positioning is no longer a marketing problem, it’s a company problem. The CEO needs to clearly articulate the urgency of this new reality and unite the organization. Marketing is strategically important to the follow through, both in terms of supporting the CEO in determining the right positioning and in becoming the glue that holds the different parts of the company together behind the promise. Why? Because armed with the voice of the market and an outside-in perspective, marketing is best equipped to help different areas of the company support the positioning.
For example, even though Target recently announced that it would match the prices of some online retailers, it has successfully staked out a position as “high design” (at an affordable price). Target understands that positioning means more today than a snappy tag line hatched by Mad Men. In a digital world, it’s no longer possible to have a
However, many marketing groups are not ready to take on this kind of leadership role. They are trapped in their tactical silos, whether from a lack of skills, vision, or their place in the organization. Some tough love, resources, and air cover from the CEO will transform marketing from an order taker to a business driver.
12 | March 2013
Global CMO™ The Magazine
A View From The C-Suite Join The Discussion: To be that partner, marketing must embrace five key responsibilities:
1. Represent the voice of the market. Most employees see no tangible benefit in their silo or in their KPIs from listening to the market, despite all the bromides from CEOs imploring them to do so. Marketing understands (or should, anyway) the voice of the market in all its different forms, from customers (and non-customers) to analysts to trending topics in social media and search. Marketing must be the cultural catalyst that gets the company thinking about the market.
2. Be the champion of the overall experience. When people interact with brands, they still have relatively fragmented experiences—online is different from instore, etc. The social Web has increased the urgency of addressing this fragmentation because customers can quickly identify—and amplify—any inconsistencies between what a company says it is (positioning) and how it acts.
What do you think every CEO should expect form their CMO?
5. Be an integrator and force multiplier across the company. Most large organizations are designed around any number of silos—by geography, product, or function. Marketing needs to rise above these divisions (including its own) and think holistically about the company’s overall value proposition, integrating messages and insights across business units, geographies, and functional groups. By doing these things, CMOs will see how the business model should change over time and play a role in helping make that happen. CEOs need to give them the permission to do that. Together, these five responsibilities add up to something very powerful: the ability for marketing to both visualize and evangelize the future. CEOs, what do you think about this role for your CMO? Fellow CMOs, are we ready to handle it? ~ CMO
3. Be the brand steward. This traditional marketing role has taken on a new twist because companies no longer control their brand. Instead, marketers must take on a more subtle role: working with internal groups (such as customer service) to humanize the brand and influencing (rather than dictating) how those outside the corporate walls use the brand.
4. Capitalize on insights. For the first time, marketing has the ability to get a view of customers in real time. Using customer, market, and social data together, marketing can get a macro view (think crunching data on a scale unheard of a few years ago) as well as a micro view (think data equivalent of a focus group) so that businesses can observe and react in the moment just like humans do. In retail it’s the instant offers in the aisles you’re hearing about; in other industries it could be adjusting territory and account planning on the fly. In high tech it could be serving up content in response to a person’s actions on the website. CMOs must learn how to apply both the art and the science of marketing.
Jonathan Becher Chief Marking Officer, SAP As the Chief Marketing Officer of SAP, Jonathan oversees the development and execution of marketing strategy across the globe. He champions SAP’s focus on customers and world-class innovations, while continuing Marketing’s focus on building the SAP brand. Jonathan is an active participant in social media, author of the popular blog Managing By Walking Around, a frequent speaker at industry events, and a published author on multiple subjects. He is a board member for the Churchill Club, Silicon Valley’s premier business and technology forum, and Revel Systems, an iPad point of sale solution.
The Future Is Now: It’s Time To Create The Future CMO Today Darrell Kofkin
When we first launched Global Marketing Network in 2006 we felt that technology would play an increasing role in the development and implementation of marketing strategies and that Marketing Professionals would increasingly require professional development support in this area. As an organisation we too have had to improve our capabilities and competencies in this area and the launch of our new magazine and community in association with Vesey Creative, coupled with the launch of our new website in association with eBeyonds, is testament to this. Many people have contributed to these new initiatives behind-thescenes and we really are most grateful and appreciative for all their support and contributions. It certainly is fair to say that In the face of growing customer choice and market transparency, and the rise in the empowered consumer and digital and social media, the shift in marketing in recent years has been profound. Firstly in the era of mass marketing, the primary source of value for most companies was their products or brands. Today, through technological advances, value is moving to the customer interface. So undoubtedly the Marketing Professional is becoming more important as organisations around the world strive to develop products and services that appeal to their customers and aim to differentiate their offerings in the increasingly-crowded global marketplace. Perhaps not surprisingly therefore, marketing is being embraced increasingly in board rooms across the world. The position of the ‘chief marketing officer’ (CMO) is gaining currency. In recognition of this last year IBM released ﬁrstever Global CMO Study and is putting the CMO at the heart of its business strategy. The marketer would therefore seemingly be well positioned to be at the heart of driving forward the business agenda. But as always, with added responsibilities become added challenges. The truth is that today’s marketers are having a hard time keeping up. In recent years there have been countless calls from business leaders over many years for the Marketing Profession to raise its standards and become more professional.
14 | Feb 2013
As Distinguished Professor Philip Kotler – widely regarded as the father of modern marketing – has stated, “It is no secret that marketing organizations are under pressure. Chief executive officers are growing impatient with marketing…they feel that they get accountability for their investments in finance, production, information technology, even purchasing, but don’t know what their marketing spending is achieving.” And so it is an increasing concern – that whilst companies recognise they need good marketing, many simply do not trust those they have hired to do the job. The sad fact is that - to paraphrase the prophetic words of John Quelch - many CMO’s focus on the issues that do not keep their CEOs awake at night! The perils facing the modern CMO have also been welldocumented in recent publications such as Bloomberg BusinessWeek, McKinsey Quarterly, Fast Company, and others. Many have complained about CEO underutilisation of the CMO perspective in making important businesslevel decisions, charging that CEOs do not realise that the absence of a CMO perspective can negatively impact longterm organisational performance success. Most recently MaryLee Sachs, Global Marketing Network’s CMO ‘Czar’ and author of ‘The Changing MO of the CMO’ wrote that “the role of the CMO is probably one of the least understood. Marketing is often seen as a “black box” confused with sales, and which is sometimes viewed as a financial drain on an organization, funding expensive advertising campaigns, sponsorships and other untold extravagant items.” And it is this confusion that is causing immense frustration over the role and performance of marketing which is permeating down through the marketing function and the people operating within it. Marketers: Welcome to the future ... ... and the boardroom
Thoughts From The Boardroom Given this degree of uncertainty there is a clear need to educate and inform the business community about the role of Marketing, to recognise and distinguish those Marketing Professionals who are committed to their continuing professional development and to equip the Marketing Leaders of today and tomorrow with the capabilities required to survive and thrive in today’s challenging business environment. So, what of the CMO of today? How do we ensure that senior marketers are not left behind in controlling the future of the marketing agenda and are able to continue to rise through their career and be a critical player in the Boardroom? MaryLee Sachs argues that the key steps to CMO success depends on four key issues: 1. Assessing marketing capabilities across the organization 2. Structuring the marketing functions to be more holistic and inclusive of new disciplines 3. Unlocking the business potential associated with engagement and participation to drive brand advocacy 4. Harnessing the power of creating internal marketing champions In addition CMOs require new capabilities in strategic management and leadership, a deeper understanding of the empowered consumer and how to reach them through digital marketing and social media, an ability to create more profitable customers, a clearer evaluation of how to develop global marketing strategies and a better grip on the finances are all requirements for the CMO in today’s challenging 21st century business environment. Balancing the requisite short-term wins with the longer-term aims
Join The Discussion: What are your thoughts on the future of the CMO position? and demonstrating a return on marketing investment also becomes more of a challenge than ever before. The good news is that according to Spencer Stuart, the average tenure for a CMO was up from just under 35 months in 2009 to 42 months in 2010. But beware of the average – it masks significant differences in tenure across industry sectors. For example, the life expectancy of CMOs in the highly competitive communications and media sector is just 22 months, and in the restaurant business just 25 months. In their recent article “The CMO and the Future of Marketing” Professor George Day and Professor Robert Malcolm describe those CMOs who will rise to the intensifying challenge, and earn a “seat at the table” as “whole-brain” Marketing leaders – those who “ground their decisions in analytic realities, while painting a realistic vision for the company that bridges today and the future.” So, with an estimated 20 million people worldwide working in a definable marketing role, the increasing need for business to take a marketing-led approach, along with widespread acceptance of the need for senior marketers to become more professional, there has never been a better time for Marketing Professionals to seize the initiative and make the difference. It’s time for a change in our Profession. And that time is now. We look forward to you joining us in helping to create a stronger, better respected and more unified Marketing Profession, worldwide. ~ CMO
CEO, Global Marketing Network Darrell is the co-founder and Chief Executive of Global Marketing Network, the global accreditation body for marketing professionals. Leading its global development and expansion, Darrell works extensively with leading marketing academics and thought-leaders, Deans of international business schools, consultancies and global publishers. With over twenty years experience in marketing Darrell divides his time between the worlds of practice and academia and is a member of the visiting faculty for several UK universities, teaching the next generation of marketing professionals. He is currently writing his first book ‘The Marketer’s Global Survival Guide’, due for publication in 2014. Learn more about Global Marketing Network at www.gmnhome.com
Global CMO™ The Magazine
March 2013 | 15
On The Edge Digital Conferences London, 30th April | Manchester, 23rd May | Bristol, 11th June | Birmingham date TBA The inaugural On The Edge conference series hit the big UK cities with a bang in 2012 & they’re back with more punch this year! These one day, sit down conferences, are covering all the hot topics emerging in the digital marketing world today and with internationally-renowned speakers sharing their knowledge, it is sure to be insightful. The format has been devised to make maximum use of your time with each session delivering key insight and actionable strategies from world-class speakers that you can implement immediately. We guarantee you will walk away with the knowledge and tools necessary to develop an effective Digital Marketing Strategy.
Conference passes start from only £95! Find out more from www.ontheedgelive.co.uk What else? •• Network with Marketers, Business Owners, Copywriters, Designers, Brand Managers, Analysts, Account Managers, PR Managers, Event Managers, Social Media Experts from a whole range of SME & corporate businesses. •• Sumptuous lunch and as much coffee as you can handle •• Earn CPD points •• A guaranteed seat for every speaker session •• Use the FREE Wi-Fi to keep up with your working day and implement your new strategies straight away
image: iStockPhoto | EskimoPye
50 Shades of CMO MaryLee Sachs
The recent CMO Club Summit demonstrated to me more than ever how many variations of a CMO job spec there are. Of course there are the traditional delineations - B2C, B2B or both; industry sector; size of business; size of budget; responsibilities held - the list is pretty much infinite. Company culture, CEO mindset and C-suite support also factor in to the make-up of a CMO. Personalities and interests of the CMO, as well, impact how the CMO approaches the task at hand. To make the position even more challenging, the role of the CMO is probably one of the least understood by both the outside world and internal audiences. Marketing is often seen as a “black box” confused with sales, and which is sometimes viewed as a financial drain on an organization, funding expensive advertising campaigns, sponsorships and other untold extravagant items. While marketing accountability is increasing and marketers are working more closely than ever before with their CEOs, CFOs and HR heads, the marketing discipline is still often shrouded in mystery. It is probably the least understood management function at the boardroom level – if it is at the boardroom level, often getting short shrift in terms of attention except when there is an issue. And yet it can be such a powerful driver of growth, innovation and reputation. In fact, according to Wikipedia, the CMO is ultimately responsible for facilitating growth, sales and marketing strategy. He or she must work towards objectives such as revenue generation, cost reduction or risk mitigation. The good news is that according to Spencer Stuart, the average tenure for a CMO was up from just under 35 months in 2009 to 42 months in 2010, but how much of that was driven by the economic conditions versus improved performance? And the average masks significant differences in tenure across industry sectors. For example, the life expectancy of CMOs in the highly competitive communications and media sector is just 22 months, and in the restaurant business just 25 months. I’ve seen a few job specs for CMOs over the last several months as research for my book, and I never cease to be surprised by the diversity of responsibilities. You do not see that with CEO or CFO job specs! On a basic level,
Join The Discussion: What do you think we need in the way of industry standards for the CMO role? CMOs are supposed to have significant influence over all “4 Ps of marketing” – promotion, product, place and price. However in reality, a study conducted across over 1,700 CMOs by IBM last year indicated that while CMOs exert a strong influence over promotional activities such as advertising, external communications and social media initiatives, in general they play a smaller role in shaping the other 3 Ps. And that’s a problem given that they don’t have power over the combined effect. So what we have here is a sort of “50 shades” effect, but what we need are some industry standards in terms of CMO role and responsibilities which can be used to inform and educate the business community at large. ~ CMO
Founder | CEO | CMO, Changing MO LLC MaryLee Sachs is GMN’s Global CMO Czar. With over 27 years of integrated marketing experience in the international arena, MaryLee has worked with and advised many blue-chip organizations including P&G, Kellogg’s, Motorola, PepsiCo, Frito-Lay, Beiersdorf, HSBC, American Express, Porsche, Patek Philippe, Mexico Tourism and many others. MaryLee has always been highly active in the marketing space for many years and has taken on many roles • An advising member of the Marketing 50 for over three years • An advisor to The CMO Club in the US for over four years. • A 2009 jury member for the PR category in its inaugural year at the Cannes Lions International Festival of Creativity • A member of the Marketing Group of Great Britain and the Marketing Society (UK) for over 15 years. Find out more about MaryLee at www.changingmo.com
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LEGO - World’s third largest toy manufacturer moves into girls’ domain with LEGO Friends Svend Hollensen
LEGO (www.lego.com) is the third largest toymaker globally, with retail value sales of traditional toys valued at US$4.5 billion in 2011. Its main category presence is in construction toys, where LEGO holds the leading company share in the vast majority of countries. While the majority of LEGO products fall within construction toys, the company maintains a diverse product portfolio, with a mix of licensed and non-licensed properties, and different toys. LEGO continues to experiment with the brick toys concept, and launched Minifigures in 2010, positioned as impulse collectible toys, as well as Lego Games in 2009. The product range is designed to appeal to all age groups. In the pre-school age range, LEGO is strong with LEGO Duplo, while the majority of its properties, including LEGO
City and LEGO licensed products are aimed at 5-15 yearolds. LEGO Mindstorms, meanwhile is aimed at more mature demographic. LEGO maintains a strong relationship with licence owners such as Disney and LucasArts, and uses many licences on its products. In general the majority of toy production is outsourced to China. However, Lego has retained production capabilities in-house rather than outsourcing to the Far East, focusing on product quality and innovation rather than price. This strategy has paid off, with customers proving that they are willing to pay a price premium as long as the product quality is perceived as high.
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LEGO’s financial development in different regions
LEGO registered record company revenues and profits in 2011, having outperformed the overall traditional toys and games market. Its revenues more than doubled between 2007 and 2011 (see Table 1) and LEGO can arguably be viewed as the most successful toy company
The global Top 10 of traditional toys companies has remained largely unchanged through 2008-2011; nevertheless there were significant movements in terms of global market share e.g. for LEGO which has moved upwards (see Table 2)
Table 1 LEGO’s financial results for the period 2007-2011
Table 2 Top 5 in toys & games (worldwide)
Overall toy market:
Mill DKK (1 EUR = 7.5 DKK)
Net profit (before tax)
Number of employees
BANDAI NAMCO Group
Takara Tomy Co Ltd
In 2011, growth in LEGO sales was driven by the launch of the new Ninjago line of construction toys, which was one of the most successful LEGO product launches. While growth in Western Europe slowed in 2011, LEGO had a very strong year in North America, which was a major contributor to growth in 2011. As a company, LEGO remains firmly focused on the developed markets, in particular North American and Western Europe. Combined, the two regions accounted for 72% of LEGO sales in 2011. Western Europe was the largest market for LEGO, and the company had especially strong position in Germany, Scandinavia and the UK. In the emerging markets, LEGO is particularly strong in Eastern Europe, where it was the leading toymaker in 2011, ahead of both Mattel and Hasbro. Asia Pacific is an opportunity area, since LEGO sales are still rather small in countries like China and India.
Source: Based on data from euromonitor.com
Construction toys: Construction toys remains the main business for LEGO, and its sales in the category are unmatched by any other toy company. Hence, LEGO has managed to maintain dominance in construction category in most markets, but new entrants, such as Hasbro’s KRE-O range, and local companies, producing bricks may create price pressure in the future. Mattel announced it was entering the segment with Fisher Price Trio range, featuring toys with similarly “click and snap technology”. LEGO’s main global competitor is Mega Brands with its MegaBloks range, which typically ranks second in the construction category in Western markets. In Asia Pacific, LEGO has more competition from building sets licensed from popular action figures. In South Korea and Taiwan, for instance, Bandai Namco’s Gundam brand has a large category share. In some markets, LEGO faces competition from local brick toys rivals. Of the total world market for traditional toys and games, construction toys contribute with USD 6,750 million (2011). As LEGO net sales was USD 3,286 million (DKK 18,371 million) this means that LEGO in 2011 had approximately 49% of the world market for construction toys. The overview of LEGO’s market shares in different countries of the world is shown in Table 3.
20 | March 2013
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15% of toy sales in 2010. Here the grocery retailers play a much bigger role.
Table 3 LEGO’s market share in construction toys, 2011
Country Sweden Russia Netherlands US UK Germany Brazil Poland Mexico Japan Turkey Spain South Korea Taiwan China India World (in average)
% 80 77 76 76 68 68 65 60 53 46 44 43 42 33 9 5 49%
Emerging markets in Eastern Europe and Latin America present opportunities for the expansion of traditional toy stores. Toys “R” Us entered Poland in 2011, and has hinted at further expansion in Eastern Europe. Latin America presents another exciting expansion opportunity - currently Toys “R” Us does not have a presence in the region.
Positioning strategies in toy retailing In response to competition from other channels, traditional toy stores are undergoing a change in store design. The stores are increasingly positioning themselves as play destinations rather just shopping destinations. Figure 1 shows examples of how four different toy distribution companies positioned themselves differently in the toy retailing.
Figure 1 Different positioning in toy retailing
Source: Based on Euromonitor, MarketLine and other public sources
In India, LEGO’s products are distributed by Hasbro’s Funskool, and LEGO has a particularly low share in the country. With rising disposable incomes, India and other Southeast Asian countries will present a growth opportunity, demanding a more specific marketing focus. India, in particular, has the largest population of 0-14 year-olds in the world, at 366 million and is likely to see increasing demand for branded construction toys. In China the traditional toys market is currently largely dominated by unbranded toys, branded toy sales are on the increase.
Distribution of toys Increasing internet penetration and usage, competitive pricing and wide product availability made internet retailing a clear winner. It outperformed other retail channels consistently throughout the review period. In South Korea, 19% of traditional toys were sold via the internet in 2010, the highest share in the world. The popularity of on-line shopping will continue to increase, with most growth happening in emerging markets. The trend towards grocery retailers and shopping over the internet has reduced the importance of traditional toy stores, such as Toys “R” Us in toys retailing. However, the channel remains very important for toy sales, and is unlikely to be completely phased out.
Toys “R” Us used to be seen as just having the largest stock and variety of toys on its shelves, luring children to its aisles. However, with Amazon and Wal-Mart increasingly focusing on toys, Toys “R” Us is finding it harder to differentiate itself. Grocery retailers and the internet can also match it on price, resulting in less incentive to visit Toys “R” Us. As a result, the retailer is intensifying its efforts in terms of “in-store entertainment”, such as elaborate shelf displays, as well as interactive and playful staff, creating an enjoyable - almost theatrical - store experience, encouraging both children and parents to visit the toy store. Disney has stepped up its toy retailing operations as well, using the strong media properties it holds.
Japan is the largest market for traditional toy stores. The strong position of domestic toy retailers, as well as Toys “R” Us, has meant consumers prefer traditional toy stores in Japan for toy purchases to a much greater extent than in the US, where traditional toy stores accounted for only
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LEGO is entering the girls’ segment with its LEGO Friends
Other related LEGO product ranges for girls have included Homemaker (1971-1982), Paradisa (1991-1997) and Scala (1997-2001).
The main target of LEGO products are the 5-12 year old age group. But LEGO has a diversified range of products and licenses to keep its brand appeal highly across various age groups. For example, as part of its Duplo range, LEGO has The Winnie the Pooh licence from Disney that is tailored to pre-school age range. As children grow older other licences become more popular. LEGO has for example Pirates of the Caribbean, which is especially popular among 5–12 year old children. For older age Lego offers the Technic range, among others aimed more at 12–16 year olds.
The LEGO Friends story centres on the everyday lives and personalities of five girls in a fictional hometown called Heartlake City. Each of the friends has a distinct personality and interests, such as animals, performing arts, invention and design, that are reflected in the models. Building sets reflect different parts of town where the girls’ adventures take place—downtown, suburbs, beach, camping grounds and mountains.
LEGO products do not have a firm gender distinction in the same way as dolls or action figures, but its main product lines appeal mostly to boys. This fact was the main trigger for the LEGO Management to launch LEGO Friends, which was designed to appeal primarily to girls. Introduced in January 2012, the theme includes unique “mini-doll” figures, which are about the same size as the traditional minifigures but are more detailed and realistic. The sets include pieces in pink and purple colour schemes and depict scenes from suburban life set in the fictional town of Heartlake City. The Friends product range replaces LEGO’s previous female-oriented theme Lego Belville, which had been in production since 1994
The launch of LEGO Friends generated some controversy, where the critics claimed that the new product line gave into gender stereotypes. Lego has also released accompanying products branded under the Friends name. In June 2012 a book was released based on the Friends theme: Lego Friends: Welcome to Heartlake City. Here the girls can meet the LEGO Friends as they hang out at all the hotspots such as the tree house, beauty parlour, the idyllic whispering woods and the favourite café. In terms of sales LEGO Friends has done surprisingly well since the launch in January 2012. By the end of 2012 the LEGO Group sold as twice as many LEGO Friends sets as expected. Therefore LEGO has now increased production to meet the demand for LEGO Friends in the important preChristmas period. ~ CMO
Join The Discussion: What do you think of LEGO’s foray into the girl specific toy domain?
22 | Feb 2013
Source: Based on: - www.lego.com - www.friends.lego.com - www.euromonitor.com - Other public available data
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screenshot of http://friends.lego.com
Mauritius Svend Hollensen
Associate Professor, University of Southern Denmark Svend Hollensen is the GMN Programme Director for Global Marketing Strategy, and Associate Professor of International Marketing at University of Southern Denmark (Sønderborg). He has published articles in international recognized journals and is the author of the globally published textbook, Global Marketing (which is published in its 6th edition in July 2013). Indian and Spanish editions have been developed in cooperation with co-authors. The textbook Global Marketing has also been translated into Chinese, Russian, Spanish and Dutch. Other books include: Essentials of Global Marketing, Marketing Planning and Marketing Management. This case will be featured in the 6th edition of Svend Hollensen: Global Marketing (Pearson), published in July 2013. This textbook is the world’s leading textbook in International Marketing with more than 100,000 copies sold in the book’s lifecycle.
Marketing Workshops 3rd-4th April 2013 Cybercity, Ebene, Mauritius. Centosis (Mauritius), in collaboration with Open Source Development Ltd (UK) presents a two day Marketing Workshop on Marketing Audit and Marketing Planning & Strategies with keynote speaker Nasser Jamalkhan fgmn. The programme is aimed at Managers and aspiring Managers to enhance their skills and knowledge in learning about the best approach to deal with the market environmental challenges which are becoming more driven by the crowd, social media and technology. Day 1: Marketing Audits. £300 Day 2: Marketing Planning. £300 (inclusive of 2 tea breaks and lunch) To find out more and register your interest contact:
Najma Khodabux: firstname.lastname@example.org Isabelle Philogene: email@example.com
Nasser Jamalkhan FGMN Nasser is the Founder of Open Source Development Ltd and a University Lecturer and Researcher in Marketing in the UK, Europe and North America. As a professional consultant and a certified trainer to the global businesses, he has had the opportunity to work for multinationals and in matrix organisations as a former CEO. As well as being a GMN Fellow, Nasser is the GMN Programme Director for Global Outsourcing and a Fellow of the Higher Education Academy. He first graduated in Computer Science and then completed an MBA with Specialisation in E-commerce with a distinction. He is very active in research on global marketing and outsourcing matters. He also holds a Post Graduate Diploma in Marketing from the University of Natal, S.Africa. From his previous contributions as a CIO, Nasser became one of the first Certified Outsourcing Professionals in the USA and is a Professional member of the International Association of Outsourcing Professionals in New York.
Centosis Ltd Nexteracom, Ebene, Mauritius Tel: (230) 467-1001 (230) 466-9139 (230) 466-8807 Open Source Development Ltd Tel: +44 (0) 2032868085 +44 (0) 7853886522
LOCALIZASIAN Innovation in Asia, by Asia, for Asia set for rapid growth in 2013 and beyond. Expect to see a boom in products ‘Made in Asia, for Asia, by Asia’ fuelled* by:
•• The race for the Asian consumer, which has resulted in ever higher regional expectations, and therefore demand for products and services that get it ‘just right’.
Asian consumers have never had higher expectations, while brands across Asia are producing ever more best-in-class products and services. No wonder the thirst among Asian consumers for products and services tailored to their needs – by regional brands who really understand them – is set to grow spectacularly.
* There are key economic and political currents driving this trend too, such as the strengthening of regional trade blocs and the desire to decouple the region and protect against global economic shocks. But in this Trend Briefing we’ll keep focused on the consumer drivers.
Main Image. Clockwise from top left: Chinese youth in Japanese Cosplay at Chinajoy; the Korean reality show K-Pop Star Hunt cherry-picked and auditioned talent from the Asian region; Indonesian girls clad in hanbok, the Korean traditional dress; and a LG showroom in India.
** Yes, we know, there is of course no one ‘Asia’. From longtime Gangnam socialites in Seoul to emerging consumer classes in Cambodia, the ‘Asian consumer’ encompasses the whole spectrum of wealth, sophistication, lifestyles and expectations. But the point remains that brands from the region are better placed to understand and dissect these nuances than those outside.
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•• The desire among Asian consumers for regional success, and the increased receptiveness of Asian consumers to increasingly best-in-class Asian brands. •• The greater natural affinity that Asian brands have for regional consumer needs and wants.**
Global CMO™ The Magazine
The Trend Report Those drivers in more detail: 1. MATURING MARKETS
brands than ever before (see MADE BETTER IN CHINA for endless examples of leading Chinese brands). A glance at the trade statistics tells the story: while both global trade and Asia’s trade with outside economies has doubled since 2000, Asia-to-Asia trade has tripled (IMF, May 2012).
Rising numbers of affluent Asian consumers means that competition for their yuan, rupee, won, baht and rupiah is fiercer than ever.
3. HOME ADVANTAGE
The boom that has made Asia an economic and consumer powerhouse continues apace. In 2011, Asia accounted for just 14% of global consumer spending; by 2020 its share will be 25%, and by 2030 it will reach 40% (Ernst & Young, 2012).
Whether as a result of shared values, operational experience in fast-growth economies, or a natural affinity for local nuances, Asian brands and businesses simply ‘get’ Asian consumers – their mindset, wants and needs – in ways that outside brands sometimes still struggle to.
Already, there are countless signs of Asia’s coming domination of the consumer arena. From global brands such as Estée Lauder paying homage with special MADE FOR CHINA (IF NOT BRIC) products and services, to Asian brands such as ‘DAMN! I Love Indonesia’ flaunting their culture in an orgy of CELEBRATION NATION, and brands like Lenovo driving growth in A2A (Asia-to-Asia) trade. Plenty more on these and more in our forthcoming exclusive AsiaPacific Consumer Trend Report.
Just see the way Chinese beer brand Tsingtao adapted their product around a traditional Chinese drinking practice (below): we haven’t spotted any Belgian beer brands doing the same ;-)
Examples Some recent examples of LOCALIZASIAN to learn from or run with:
Pictured above: Estée Lauder’s Osiao skincare range, tailored to Chinese complexions; Apparel brand ‘DAMN! I Love Indonesia’; China-based Lenovo launching their smartphones in Indonesia
All this attention and subsequent choice means Asian consumers can, are, and will continue to become more demanding: seeking out best-in-class products and services that cater explicitly to their needs, wants and desires.
The traditional narrative runs that as Asian consumers become more affluent, they flaunt their new-found status by turning to established brands from ‘western’ markets. And this is true: just look at the success that luxury brands from the ‘old world’ of France and Italy have had in the region. But running counter to this is the deep-rooted desire for consumers in the region to see Asia succeed (alongside the ongoing political squabbles in the region, just witness the support for Jeremy Lin and Psy throughout Asia as they saw global fame in 2012). All of which means that now Asian brands are competing with (if not exceeding), the best of the best on the global stage, Asian consumers are more eager to embrace Asian
2. LOCAL LOVE
Tsingtao: ‘Made for Chengdu’ adaptation Chinese brewery Tsingtao has adapted its beer bottle for Chengdu consumers (how’s that for truly regional LOCALIZASIAN?). The new bottle is larger – holding two or three pints – allowing for the beer to be poured into small cups and shared over Sichuan food. This mimics the traditional way that baijiu (a Chinese spirit) is communally drunk.
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HTC: Smartphones with Burmese language keyboards LG: India’s most trusted consumer durable brand Korean LG Electronics has been pursing a dedicated ‘microlocalization’ strategy in India since 2010. The company now has 27 products tailored to the Indian market, including the Charcoal Lighting Heater Microwave, which includes an autocook menu with settings for over 130 Indian dishes (including naans, parathas, and tandoori items like murg tandoori and paneer tikkas). The brand was voted the most trusted consumer durable brand in India in 2012.
In January 2013, Taiwan-based electronics firm HTC debuted six models of its smartphones in its first store in Yangon, Myanmar (Burma). All the phones were equipped with specially designed, localized font keyboards in the Burmese language. Myanmar has the lowest rate of mobile penetration in Asia.
Wangz: Adaptable boutique apartments for large groups and families
WeChat: Chinese messaging app caters to the region Tencent’s WeChat, the Chinese voice, text and photo messaging service packed with features that resonate with Asian consumers (such as the ability to connect with nearby strangers at random) changed its name from ‘Weixin’, to have broader global appeal. In September 2012 the service added Hindi support in India to add to its support for Thai, Vietnamese and Indonesia. In December 2012 it was even made available on Blackberry’s platform, catering to its Southeast Asian users.
Singapore-based Wangz opened The Forest by Wangz serviced apartments in 2012. The apartments are designed to cater to the large family travel groups often found in the region. Each apartment has a kitchenette and communal dining area, allowing groups to cook or eat together. The building has also been designed with extra doors fitted in the corridors, so that several rooms can be privately sectioned off for large groups. One night at The Forest by Wangz costs from around SGD 250 (USD 204).
Join The Discussion: What’s your take on the LOCALIZASIAN trend?
26 | March 2013
Korean popstar Psy shares his Gangnam Style moves with Taiwanese model-actress Lin Chi-Ling during the Shanghai Spring Festival TV Gala.
Global CMO™ The Magazine
• Local consumers will appreciate Asian brands that celebrate regional culture by re-shaping or integrating their products into established traditions or practices, and so honouring them; as Tsingtao did when they reimagined their beer bottle around a traditional Chinese drinking custom.
Eslite: Taiwanese bookstore brings 24-hour services to Hong Kong In August 2012, Taiwanese bookstore Eslite opened its first overseas branch in Hong Kong, featuring experimental 24hour opening times from Thursday through Saturday that are suited to the ‘night owl’ shopping habits and lifestyles of Hongkongers. In Taiwan, Eslite is famed for its 24/7 opening hours and the wide range of lifestyle goods that accompany its bookshelves, including stationery, children’s toys and music. It will open its first Mainland Chinese branch in Suzhou in 2014.
NEXT: Want to get going on LOCALIZASIAN of your product or service? If you’re an Asian brand, remember: • Take advantage of your position (both the psychological and physical closeness) to tailor your products and services for (sub-)populations. Learn from the Wangz example above, and think about sizes, lifestyles, practices etc.
• LOCALIZASIAN can be also as simple as tweaking an existing product or service (especially one that strongly appeals to Asian consumer desires) to cater to a new group of Asian consumers. Witness how WeChat have successfully expanded across the region by adding local language options to their already strongly ‘regionalized’ offering. But if you’re a non-Asian brand doing business in Asia – or planning to – you also need to respond to the LOCALIZASIAN trend. That might mean creating a point of difference by explicitly stressing your ‘otherness’ (though think further than the traditional ‘higher quality’ narrative, as the quality gap is disappearing fast). Or seize the opportunity to partner with (if not buy) a local brand and engage in some true LOCALIZASIAN of your own. Finally, even if you’re a non-Asian brand, operating outside Asia, with no plans to enter: don’t ignore LOCALIZASIAN. Remember: many of the Asian brands doing an expert job of LOCALIZASIAN will succeed, grow and beat out the competition in their local markets. So keep an eye on them: how long will it be before they start competing in your neighbourhood, too? LOCALIZASIAN is sweeping across the world’s most dynamic consumer arena in 2013. So whether you’re in Asia or outside: partake or perish!
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28 | March 2013
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Getting It Done
Join The Discussion:
The Right Tool For The Job Andrew Vesey
How do you make sure you have the right tool for the job?
I was at a luncheon recently where I had the privilege to hear Scottish explorer Craig Mathieson speak.
What can we learn from this? Quite simply: Always make sure you have the right tool for the job.
Craig is an amazing individual who has successfully skied to both the North and South Poles.
This is something that I see people (Marketers and the Non-Marketing variety) get wrong time and again.
He told us about getting ready for the South Pole journey and how amazing it was that as soon as word got out that he had sponsorship and the expedition was going ahead everyone started throwing gear at him.
It’s so easy to be wooed by ‘the next big thing’, ‘the big shiny thing’, or even ‘the way we’ve always done it’. It’s much harder to stop, take a step back and ask “Is it actually the best tool for the job?”
The latest carbon fibre skis, kevlar boots. You name it, he was given it.
Now, I’m not going to stand here on a soapbox and preach to you about ‘the good old days’ or try to convince you that technology is bad. Because well, it’s not.
His one word to describe all this flash new gear? “Rubbish” A carbon fibre ski breaks, and you have to throw it away. Use a good old fashioned wooden ski and you can just patch it up and keep going. And can you imagine wearing kevlar boots for 730 Miles of hard slogging? It makes no sense.
In fact, I love technology, shiny stuff and ‘the next big thing’, but I also know the dangers of using things only because they are new. How many times have you, or someone you know, rushed out and purchased the latest phone, piece of software or ‘toy’, only to find out that this great new thing didn’t
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March 2013 | 29
actual do what you needed it to?
3. Which Tool Will Provide The Best Results?
Frustrating isn’t it?
Now that you’ve got your list narrowed down (hopefully) a few tools, be they Social Media, TV, Print, Exhibitions, Product Development, etc.
This is the curse of many a Marketer - but one that can actually be broken. It just takes a little change in thinking. It’s time to stop thinking like a Marketer, and start thinking like a consumer. As Marketers I’m sure we all find the concept of ‘Job To Be Done’ Marketing quite simple. 1. The consumer needs something ‘To Be Done’, be it a hole in a wall, an adrenalin rush or a boost in social standing. 2. Said consumer analyses (our believes the ‘analysis’ provided by their helpful local Marketer) the products and services available. 3. They decide on the best matching ‘Tool’ to ‘get the job done’ and they make the purchase. How easy is that? OK, I know that’s over simplified, but it works for this situation. It gives us a (really simple) model to follow to ensure we are actually using the right tools. 1. What Do You Actually Need Done? Important word here: NEED. Not “What do you WANT done?” but “What do you NEED done”. This is a big difference I have learned from years of working with clients. They will quite often come and tell you what they WANT, but they don’t really have any idea what they actually NEED. This is the most important part of the process. Without defining what it is you actually need, how can you hope to gauge your potential tools for effectiveness? There are many texts written on this topic, and I don’t have much space to get long-winded about it here. And let’s be totally honest. Most of us do know (to some degree at least) how to define a need. Stop, take a breath and do the work. If you are unsure, I’m sure (more than) one of our esteemed contributors can offer you the answer. 2. What Options Do You Have? Moving on... We now have that elusive need. The next thing to do is find out what options you have in the way of tools. Make sure you’re realistic with this one - and specific. Is Social Media really an option? In today’s day and age, most likely, but we’ll find out to what degree in step three. If Social Media is indeed an option, don;t just leave it at that. Break it down further. Which Social Media channels offer any real potential? There are so many out there, and a majority probably won’t be of any real use to you. 30 | March 2013
It’s time to put them to the test. A/B testing, focus groups, historical analytics, or one of the wonderful pieces of Marketing software out there - I was about to say “Avoid trial and error”, but I just realised that is essentially what A/B testing is in it’s base from. Analyse the results of your research. Don’t be afraid to ask for advice on this. Everyone has their strong suit, and analytics is one that a lot of people have troubles with. Once you’ve got your results, you have your answer. The right tool for the job. Just make sure you review your campaigns properly. This will give you even better results next time. It’s not rocket science, but so often we all get caught up in the hype, the big picture, or just get overloaded with ‘stuff’ and forget the basics. Remember, every tool has a use. Just maybe not for your project (or any project you ever undertake). Don’t just use it because it’s there, or everyone else is. Find out if it’s really what you need. Well, that’s enough from me. Let’s hear from you. Let us know what your thoughts are on this. Have any tales of warning? A major success in ‘getting it done’? We’d love to hear it. ~ CMO
Founder | Creative Director, Vesey Creative Andrew is the Founder and Creator of Global CMO™ The Magazine and Director of the New Zealand and United Kingdom based Graphic Design and Branding Agency, Vesey Creative - the official Brand Guardians for GMN. Working in partnership with a wide variety of clients around the globe, Andrew’s business experience includes over a dozen years leading design and branding studios and agencies, including the launch of his own agency Vesey Creative over 9 years ago. Andrew is a strong believer in continually upskilling, learning and staying relevant in business. This ‘education brings growth’ mentality lead him to create Brand Quarterly, a not for profit digital magazine for SMEs, and the magazine you are now reading.
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The marketer’s toolkit isn’t complete without Maslow’s Hierarchy of Needs, a theory of what motivates people. The gist is that as our more basic needs are satisfied, we look for fulfillment progressively higher up the hierarchy. Brands that tap these higher-order needs can deepen their meaning with consumers. The classic Maslow marketing case is Michelin Tires. Rather than focusing on durability and performance, Michelin filmed a baby sitting in a tire with the tagline, “Because So Much Is Riding On Your Tires”. Michelin focuses on our need for safety and family belonging. Many brands claim to fulfill higher-order needs in Maslow’s hierarchy. Some overreach and come across as silly or outof-touch. The proof I think is whether they can compete without deep discounting. Doug Hall once said, “If you’re not meaningfully unique, then you’d better be cheap”. Many brands compete largely on price. Brands that truly fulfill higher-order needs around Belonging, Esteem, or Self-Actualization don’t need as many price promotions. The level of trade promotion is a litmus test for meaningful brands. ~ CMO
Join The Discussion: What are your views on Maslow’s Hierachy of Needs?
Tom Fishburne Founder | CEO, Marketoon Studios Tom is the Founder and CEO of Marketoon Studios, a content marketing studio that helps businesses such as Unilever, O2, Kronos, Baynote, Rocketfuel, and the Wall Street Journal reach their audiences with cartoons. He is also a frequent keynote speaker on innovation, marketing, and creativity, using cartoons, case studies, and marketing career to tell the story visually. The Huffington Post ranked his South-By-Southwest (SXSW) talk “the third best of the conference out of 500”. Tom was a VP at Method Products (“the 16th most innovative company in the world” ~ Fast Company). Over five years with Method, he launched new products, led marketing, and started the European business from scratch. He has led brands at Nestle and General Mills, developed web sites for interactive agency iXL, and helped launch the first Englishlanguage magazine in Prague. He has also published two collections of his marketing cartoons. The most recent entitled: This One Time at Brand Camp.
Getting The Job Done: A New Approach To Marketing Wine Stefano Codurri
“How is a bottle of wine chosen and purchased by the customer?” are questions that wine marketers have been seeking an answer to for many years without success. Although wine consumer behaviour is gaining worldwide increasing interest of marketers, there are few known issues that can help us to understand the way in which the consumer makes the choice. Even the consumer profile is a quite unknown issue. Marketers agree that retailers are the main supply channel to the final consumer. In the UK modern supermarket retailers dominate the wine market. However the influence and the growing trend in retail marketing of wine in countries where you might imagine a closer cultural attachment to wine through direct-to-consumer channels is well established such as in Italy and France. Surprisingly, even in the countries such as Romania the balance between traditional marketing methods and home production is changing rapidly in favour of the larger retail outlets. Scientific research has shown that brand/producer, region, grape variety and price are the more powerful drivers of consumer wine choice at retail stores and their potential influence depends on the wine culture in any given country. The wine market has classically been divided between consumers who show a high involvement in the choice of wine and consumers with low involvement. The willingness to pay normally aligned to a price and perceived value for a bottle of wine follows the level of involvement. High and low involvement customers often purchase in the same retail shops. Studies on wine market segmentation revealed three 34 | March 2013
potential categories/clusters of customers: •• Consumers looking for “cognitive cues” and “extrinsic factors” able to certify the quality and taste of the wine. These clues might be provided by the label or the grape variety. •• Consumers looking for “assurance cues” able to reduce the risks of being wrong. Normally this means a choice based on experience or recommendation by a friend. •• Consumers looking for “in store informational cues” able to simplify and accelerate the selection. In this case the choice is based on merchandising or packaging. To try to reach their targets marketers have worked on clearly promoting the key attributes of their wine through brand image, tasting events or building long term relationships with key accounts. Generally the wine brand is highlighted across all the consumer profiles. Thus the marketing mix is not targeted to any one particular segment making it difficult to quantify the effectiveness of the campaign. The next challenge is that the factors influencing the choice of wine are strictly related to the environment in which the consumer intends to drink the wine. Different consumption environments can amplify or change the relevance of the wine attributes and therefore confuse the marketers understanding of consumer behaviour. Moreover there are many potential factors consumers might consider in choosing wine.
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Alternatively, one might speculate that the consumer may select wines on the basis of the “job” that needs to be done. In this model consumers may buy a bottle of wine to satisfy the “job” they need done. As can be seen this model is subtly different and cuts through some of the issues associated with traditional segmentation by focusing on the “job” a different bottle of wine at a different price or from a different region will deliver for you. This approach fits very well with the spread of Social Media and Search Engine Marketing techniques. This opens up a broader demographic appeal for brands in a digital world by allowing the consumers to self select their buying behaviour. This essentially allows consumers to ascribe values and meanings to the brand thereby indirectly segmenting the market according to their individual needs. Research concerning how to build wine brand values in Italy, Romania and UK has highlighted that brand values in a social media context are linked to the ability to generate a viral marketing process that mirrors the consumers’ lifestyle and image. Thus the brand appeal is broadened through self selection of the need to be satisfied at any given point. In this context embracing the concept of “job to be done” means rethinking the consumer journey by placing at the beginning of it the consumption expectations and as the final destination the choice of the wine bottle that best of all is able to fulfil that function. Therefore, an effective social media and search engine marketing strategy which identifies the “job to be done” touching points along the value chain could lead to significant changes in the value added to the producer or brand owner in re-organising the distribution of retained profit across the chain. ~ CMO
image: iStockPhoto | funstickers
Join The Discussion: What are your thoughts on this new concept in wine marketing?
Stefano Codurri Research Fellow, The University of Verona Stefano is a Research Fellow at the University of Verona (Department of Business Administration). He holds a research grant in Wine Marketing. His scientific interests concern branding and social media marketing. He is leading the international project “Building wine brands through digital marketing tools and social media: an exploratory study in Italy, Romania and United Kingdom” launched by the British Institute of Technology & E-commerce of London. He is also a consultant for food and wine companies.
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Brands That Transcend
How to navigate the future of Brand Management Kevin Lane Keller
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Global CMOâ„˘ The Magazine
image: iStockPhoto | SamBurt
Brands have endured for centuries - and are likely to thrive for years to come - because of the benefits they provide. They allow consumers to reduce risk, simplify decision making and gain greater satisfaction in their lives. The role and functions of brands are so fundamentally pervasive and valued by consumers, it is difficult to see their potential importance diminishing. Managing brands to achieve that potential, however, is as difficult as ever. The pace of change in the marketing environment has greatly accelerated in the past decade. •• Consumers are increasingly diverse, enlightened and empowered. •• Virtually every market has experienced heightened competition as a result of the entrance of global firms, private labels and mega-brands from related categories and emboldened rivals. •• Technological advances have profoundly affected how consumers learn about and shop for brands. •• Troubling environmental, community and social concerns exist all over the world. Here are six branding imperatives to help managers navigate the new challenges of brand management. Adhering to these guidelines should help marketers create stronger customer loyalty for their brands and enjoy marketplace success for years to come.
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1. Fully and accurately factor the consumer into the branding equation: Engage in “participation marketing” by establishing what consumers know and don’t know, and what they want and don’t want from brands. One of the most important rules of branding can be encapsulated by the aphorism, “The consumer owns the brand.” From the one-time business mantra of “You’ll never get fired by choosing IBM” to the New Coca-Cola debacle to the modern challenges of Detroit auto makers in convincing consumers of the quality of their vehicles, consumer sovereignty has and always will rule. From a managerial perspective, a consumer voice must be incorporated in every branding decision. But which voice? And should louder ones receive more attention? The increasing diversity and empowerment of customers offers significant branding challenges. Customer diversity. Multiple segments and sub-segments of consumers make up the customer franchise for every brand. Embracing a multicultural perspective in branding with appropriately inclusive marketing programs is an absolute necessity in today’s diverse world. A multicultural perspective helps marketers focus on how brands can be made relevant to different segments of the target market. This adaptation, however, must be done with care. For strong brands, the common core of their brand promise should be evident in virtually all aspects of their marketing programs. For example, Ritz-Carlton’s brand mantra of “ladies and gentlemen serving ladies and gentlemen” affects how the company delivers service to all guests.
given such diversity in consumer propensities, interests and activity levels. Moreover, even consumers who choose to become more engaged with a brand may have difficultto-express, undefined, ambiguous or even conflicting preferences. In that regard, marketers need to employ “participation marketing,” where marketers and consumers work together to find out how the firm can best satisfy consumer wants and needs. With participation marketing, consumers and firms freely exchange information to arrive at mutually beneficial solutions. Intuit’s QuickBooks Live Community, which serves the small-business market, is a place where QuickBooks customers can trade tips and ask questions, providing Intuit with valuable feedback.
2. Go beyond product performance and rational benefits: Craft welldesigned products and services that provide a full set of rational and emotional benefits. At the heart of a great brand is a great product or service. This is even truer in today’s highly transparent world. For many firms, the design aspects of their products and services are increasingly crucial components of their value proposition. Adept marketers at firms such as Apple, Nike, Ritz-Carlton, Singapore Airlines and Samsung are optimising
BRAND MARKETING IMPERATIVES Brand marketers must strive to stay close to all customers and understand what they know and like about brands and what they don’t know or don’t like.
Customer empowerment. One of the driving factors behind the empowered customer trend is the greater transparency prevailing in the marketing environment. The emergence of the Internet and social media - as well as the expansion and pervasiveness of traditional media - has given consumers, for better or worse, the ability to seek information and arrive at what they feel is the “truth” about products, services and brands like never before. Marketers must anticipate that any actions they take or claims they make can be scrutinized and shared with others instantaneously. With this transparency, consumers can be more actively involved in brands than before. But the reality is that only some of the consumers want to get involved with only some of the brands they use and, even then, only some of the time.
Brand marketers must increasingly utilize functional and aesthetic design principles and techniques, as well as understand the duality of rational and emotional dimensions of consumers’ relationships to brands and how the two can interact.
For consumers who do choose to become engaged at a deeper level, marketers must do everything they can to encourage them with social media and other marketing tools. But for consumers who choose not to do so, it is important to understand how to best market a brand,
Brand marketers must be able to understand and justify their marketing investments by employing a set of models, tools and perspectives that fully illuminates how consumers and brands are affected in the shortand long-run by any marketing activity or programs.
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Brand marketers must think holistically about how marketing communications efforts work (or don’t work) together. Brand marketers must assemble the right brand architectures to ensure that brands reach their marketplace potential. Brand marketers must take a long-term perspective as to what is good for their brand, as well as what is good about their brand.
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functional and aesthetic aspects of the design of their products and/or services to maximize sales and brand equity. Developing better designed products and services requires a comprehensive, up-to-date understanding of consumers, how they purchase and use products and services, and how they think and feel about brands. Product design encompasses not only how a product works, but also how it looks, feels, and even sounds and smells. Similarly, service design is a function of all of the sensory aspects that consumers encounter and experience with a brand. Designing products and services that can more efficiently and effectively deliver the full range of category benefits is still of paramount importance, and provides a means to gain a competitive advantage. This is true even in mature categories, as illustrated by Procter & Gamble’s recent successes with Gillette, Pampers and Tide.
telephones, cell phones and company stores, while also selling indirectly via wholesalers and retailers. In devising communication strategies, marketers must address a number of marketplace developments: the fragmentation of TV viewership; the increasing use of mobile phones; the explosion of online blogs and social communities; and the greater importance of buzz marketing. To develop successful communication programs, marketers must combine: online/interactive communications, “real-world”/ experiential communications and traditional mass-media communications.
Mixing and matching communications. The challenge for marketers of top brands in assembling the best set of channel and communication options is to both maximize sales in the short run and brand equity in the long run. Moreover, the art and science of integrated marketing is Great product and service design comes from keen to optimally design and implement any one channel or consumer insight and inspired, creative solutions. A wellcommunication activity to not only create direct effects, but designed brand offers advantages in product and service also indirect effects that increase the financial or brand performance, and in the imagery equity impact of other channel that creates significant functional or communication options. A From the perspective of and psychological benefits. breathtaking TV ad might change building brand equity, Consider Gillette’s launch of the a viewer’s opinions of a brand, marketers should be Venus line of razors. The first increasing the likelihood that he or “media neutral” and razor designed solely for women, she will buy the brand in the future. evaluate all different possible it was a marked departure from But it may also make that viewer communication options previous women’s razor designs, more likely to visit the brand’s according to effectiveness which had essentially been website or respond more favourably criteria and efficiency colored or repackaged versions of to a subsequent brand promotion, men’s razors. Functionally, Gillette resulting in a more immediate considerations. designed the Venus with a wide, purchase. sculpted rubberized handle offering superior grip and From the perspective of building brand equity, marketers control for in-shower use, an oval-shaped cartridge with soft should be “media neutral” and evaluate all different cushions for flexibility and a storage case that could store possible communication options according to effectiveness replacement blades and stick to shower walls. Emotionally, criteria and efficiency considerations. Marketers should the razor was designed to look sensual and be a “must mix and match communication options to build brand have” beauty essential. Advertising communicated that equity and drive sales - that is, choose a variety of different Venus helped to reveal the beauty within and the “inner communication options that share common meaning goddess” in women. Highly successful, the Venus brand and content but also offer different, complementary now holds more than 50 percent of the global women’s advantages so that the “whole is greater than the sum of shaving market. its parts.” For example, to change unfavourable consumer
3. Make the whole of the marketing program greater than the sum of its parts: Develop fully integrated channel and communication strategies that optimally blend their strengths and weaknesses. The diversity of means to communicate about and sell products and services to consumers has grown exponentially in recent years. Marketers can combine push-and-pull distribution strategies to maximize coverage and impact, selling directly via mail, the Internet,
impressions of the taste of its pizza, Domino’s “Oh Yes We Did” marketing campaign combined documentary-style TV and print advertising with interactive activities, anchored around www.pizzaturnaround.com. Social media. As more consumers spend more time on the Internet, it is crucial to use interactive communications to impact consumers at all stages of the decision funnel reinforcing any offline marketing efforts at the same time. An online, interactive communications program can include the following: a well-designed website, emails, electronic ads, search advertising and social media. The most challenging is social media - encompassing online communities, forums, blogs and a presence on websites such as Facebook, Twitter and YouTube, which
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provide an effective means to create active engagement and involvement with consumers. By offering the right online information, experiences and platforms for brands, marketers can help consumers learn from and teach other consumers about a brand. Despite those advantages, marketers frequently express concern that the engagement of consumers with social media can produce brand harm via subversive behaviour by a small group of consumers, undeserved negative feedback or other unfavourable outcomes. Marketers should acknowledge that undesirable branding effects can occur whether the brand is engaged in a social media campaign or not. Being online and providing an affirmative brand point-of-view can only help counterbalance these negative effects.
4. Understand where you can take a brand (and how): Design and implement a new product development and brand architecture strategy to maximize long-term growth across product offerings, customer segments and geographical markets. For long-term financial prosperity, the successful launch of new products and services and the entry of existing products and services into new markets and customer segments are of paramount importance. Proper branding is an essential component of that success. Managers frequently err in naming new products by taking an internal company perspective and arriving at overly complicated solutions with different levels of branding. In such cases, consumers will often try to simplify the branding of the offerings, or even worse, they may very well move on to a competitor with a more straightforward set of offerings. Part of the appeal of Colgate Total was undoubtedly that it offered a simple solution to navigating the toothpaste aisle, a section of the store that consumers often find bewilderingly confusing. From a branding standpoint, growth requires a well-thought-out and well-implemented brand architecture strategy that clarifies three key issues: 1. The potential of a brand in terms of the breadth of its “market footprint;” 2. The types of product and service extensions that would allow a brand to achieve that potential; and 3. The brand elements, positioning and images that should be used to brand any new or existing product. Brand potential. A good brand architecture defines brand boundaries: What products or services the brand could represent, what consumer benefits it could supply and what consumer needs it could satisfy. It provides “guardrails” as to appropriate—and inappropriate—line and category 42 | March 2013
extensions. It clarifies the meaning and promise of the brand to consumers, and helps them choose the right version of the product or service for themselves. Understanding the brand promise and how it should best be adapted to different products and markets is challenging, but critical. Every product or service sharing the brand name should be seen as delivering on the unique brand promise. If it is possible to replace the brand in any of its marketing - an ad, online promotion, sponsored event, etc. - with a competitive brand, and its marketing would still basically make sense for consumers, then the marketing is probably not aligned sharply enough with the brand promise and meaning. By adhering to their brand promise and growing the brand carefully, brands can cover a lot of ground. For example, by delivering on its brand promise of being gentle, mild, caring, and protective - through a sequence of carefully designed and implemented extensions - Beiersdorf’s Nivea brand has evolved from a skin creme brand to a skin care and personal care mega-brand with hundreds of products. Brand extensions. The vast majority of new products are extensions, but the vast majority of new products also fail. An increasingly competitive marketplace will be even more unforgiving to poorly positioned and marketed extensions Marketers must be rigorous and disciplined in their analysis and development of brand extensions. Based on academic research and industry experience, addressing the following set of questions should improve the odds of extension success: 1. Does the parent brand have strong equity? 2. Is there a strong basis of fit to the proposed extension? 3. Will the extension have necessary points of parity and points of difference to create competitive advantages and overcome any perceived weaknesses? 4. How can marketing programs enhance extension equity? 5. What implications will the extension have on parent brand equity and profitability? 6. How should these feedback effects from the extension best be managed? Brand elements. The third aspect in a brand architecture strategy encompasses the name, look and other branding elements applied to existing and new products or services. Marketers can signal the relationship between any two products for a brand by “dialing up” or “dialing down” common brand elements, such as names, logos, colours, etc. In particular, sub-branding a new product, by combining new brand elements with existing brand elements, can facilitate access to associations and attitudes to a parent brand, while also allowing for the creation of new brand beliefs to position the product in the new category. Consumers are very literal. Putting the parent brand name
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before a new, individual name—as compared to putting it second—conveys that an extension product is more like the parent brand. Marriott’s Courtyard would be seen as much more of a Marriott hotel than Courtyard by Marriott by virtue of having the corporate parent brand name first. To realize all these different benefits, however, sub-branding typically requires sufficient investments and disciplined and consistent marketing to establish the proper brand meanings with consumers.
5. Do the ‘right thing’ with brands: Embrace corporate social responsibility and manage brands for the long-run. With increased media coverage of business, there is greater transparency and awareness of companies’ internal and external actions and statements. Many consumers want companies to do “good things” for local communities, society as a whole and the broader natural environment. At the same time, heightened scrutiny from the investment community has caused many companies to adopt an overly myopic short-term planning horizon for their brands. Brand marketers need to address both of these marketplace realities.
In Brief: •• Adhere to branding imperatives to create stronger customer loyalty for brands and enjoy success in the marketplace. •• Accept that the consumers own the brand; the brand parent company does not. •• Think holistically about how your organization’s marketing communications efforts work - or don’t work - together. Corporate social responsibility. Brand marketers must proactively embrace social responsibility and behave ethically and morally at all times. In particular, marketers need to find “win-win” solutions with cause marketing programs and other activities that allow them to enhance the welfare of consumers, society or the environment - all while still profitably running their businesses. Effective cause marketing programs can accomplish a number of objectives for a brand: build brand awareness, enhance brand image, establish brand credibility, evoke brand feelings, create a sense of brand community and elicit brand engagement. General Mills’ “Box Tops for Education” program, which encourages parents and students to collect box tops and gain points in other ways to raise money for
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cash donations for their schools, reinforces the company’s commitment to education while encouraging consumers to try different brands, enjoy various promotions, etc. Long-term brand management. Doing the right things with brands also involves something even simpler and more straightforward: Take a long-term view to protect and respect the brand promise and meaning to consumers. Over-exposing, over-extending, over-modernizing and overdiscounting - there are many ways to take advantage of a brand for perceived short-term benefits. The best and most widely admired marketers treat their brands with understanding and respect, as well as a clear sense of commercial and social purpose. They take their brands on thought-out journeys that allow them to profitably grow, while preserving the brands’ close bonds with consumers and benefits to society as a whole. Strong brands avoid the “death-by-1,000-cuts” syndrome, where a decision may be deemed acceptable by some, because even though it may not make good brand sense or enhance brand equity, it is seen as only potentially detracting or taking away from brand equity “a little.” Over time, however, a repeated number of those seemingly safe decisions can add up, and the brand can suffer significant damage as a whole. For example, it could be argued that a series of micro-decisions on service delivery by Starbucks in recent years eventually added up enough to transform the customer experience in such adverse ways that loyalty suffered, forcing founder and returning CEO Howard Schultz to take drastic actions.
6. Take a big-picture view of branding effects. Know what is working (and why): Achieve a deeper understanding of the limits and power of brands, and be able to qualitatively and quantitatively justify brand investments. Increasingly, marketers have to do “more with less” in their marketing budgets, which requires that they be able to demonstrate to decision makers in their organizations what is and is not working and why. One challenge in achieving brand accountability is that brand marketing often has long-term, broad and varied effects. Any particular marketing activity may increase the breadth or depth of brand awareness, establish or strengthen performance-related or imagery-related brand associations, elicit positive judgments or feelings, create stronger ties or bonds with the brand and initiate brandrelated actions such as search, word-of-mouth, purchase, etc. And these effects may have short-term and/or longterm impacts.
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To help develop return-on-investment insights and interpretations, marketers must adopt comprehensive, cohesive and actionable branding models. As an example, Figure 1 (above) summarizes three linked, interlocking models that I use in brand planning, tracking and measurement: 1. The “brand positioning model” describes how to establish competitive advantages via points of difference (strong, favourable and unique brand associations) and points of parity (brand associations designed to negate competitors’ points of difference, overcome perceived vulnerabilities of the brand or establish category credentials). 2. The “brand resonance model” considers how to create intense, active loyalty relationships with customers. The basic premise is that building a strong brand involves a set of logically constructed “brand building blocks.” Brand resonance occurs when consumers feels completely in sync with the brand. The second level of the model is where the output from the brand positioning model appears in terms of which points of parity and points of difference are to be created with which performance and/or imagery associations. 3. The “brand value chain model” describes how to trace the value creation process to better understand the financial impact of marketing expenditures and investments. The brand value chain model examines four different stages in the value creation process for a brand. It considers how marketing activities affect the customer mindset - as can be measured by all the building blocks in the brand resonance model - which, in turn, creates various marketplace outcomes and ultimately shareholder value.
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General Mill s Domino’s Gillette
The best and most widely admired marketers treat their brands with understanding and respect, as well as a clear sense of commercial and social purpose.
They take their brands on thought-out journeys that allow them to profitably grow, while preserving the brands’ close bonds with consumers and benefits to society as a whole. The specific components of these three models are not as important as their purpose and scope: These models can both assist planning and measurement; they can capture a full range of marketing activities for any type of brand. In particular, by tracing the effects of marketing activities through the customer mindset, and on to various marketplace outcomes such as price premiums, loyalty, sales, market share and profitability, marketers can gain a clearer picture of how well their marketing is doing and why.
Join The Discussion: What do you think is the key component to maintaining a strong Brand?
Kevin Lane Keller Tuck School of Business, Dartmouth College
Challenges and opportunities Six imperatives were identified as crucial for branding in the years to come (see the sidebar on page 38 for a summary). It is important to note the implications of these imperatives on marketers themselves. Unquestionably, the talents and abilities of marketers to successfully manage brands needs to correspondingly evolve and be broader and deeper than it has been in the past. Today’s brand marketers must know all of the usual marketing fundamentals, but also embellish those skills in important ways. The best brand marketers must have cultural skills to understand the diversity of the new consumer; fluency in working with design techniques and designers; information technology and Internet skills to understand Web-related marketing activities; an appreciation of new branding models and formal qualitative and quantitative measurement methods; creativity to devise holistic marketing solutions; and so on. These requirements pose significant challenges, but also very exciting opportunities as marketers adopt higher standards in brand management excellence. ~ CMO
Kevin Lane Keller is the E. B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College. Professor Keller has degrees from Cornell, Carnegie-Mellon, and Duke universities. At Dartmouth, he teaches MBA courses on marketing management and strategic brand management and lectures in executive programs on that topic. Professor Keller is currently conducting a number of studies that address strategies to build, measure, and manage brand equity. His textbook on those subjects, Strategic Brand Management, has been adopted at top business schools and leading firms around the world and has been heralded as the “bible of branding.” As of the 12th edition, he is also the co-author with Philip Kotler of the all-time best selling introductory marketing textbook, Marketing Management.
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The Banker / BrandFinance® Banking 500 2013 Rank 2013
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
2 5 1 3* 6 4 11 7 8 10 18 14 17 15 16 9 12 13 23 21 20 26 22 27 28 29 36 19 25 30 38 31 24 34 41 33 * 39 50 32 48 35 45 42 43 44 40 51 47 37
Domicile Wells Fargo Chase HSBC Bank of America Citi Santander ICBC American Express BNP Paribas China Construction Bank Agricultural Bank of China Deutsche Bank Sberbank Bank of China J.P. Morgan Bradesco Barclays Itaú Bank of Tokyo-Mitsubishi UFJ TD RBC Banco do Brasil Credit Suisse BBVA Visa Morgan Stanley Capital One Goldman Sachs Rabobank UBS Société Générale Scotiabank Standard Chartered Nordea U.S. Bancorp Bank of Montreal ING State Bank of India ANZ Bank of Communications Sumitomo Mitsui Financial Group Mastercard RBS Commonwealth Bank of Australia nab UniCredit CIBC Mizuho Financial Group China Merchants Bank PNC
UNITED STATES UNITED STATES UNITED KINGDOM UNITED STATES UNITED STATES SPAIN CHINA UNITED STATES FRANCE CHINA CHINA GERMANY RUSSIA CHINA UNITED STATES BRAZIL UNITED KINGDOM BRAZIL JAPAN CANADA CANADA BRAZIL SWITZERLAND SPAIN UNITED STATES UNITED STATES UNITED STATES UNITED STATES NETHERLANDS SWITZERLAND FRANCE CANADA UNITED KINGDOM SWEDEN UNITED STATES CANADA NETHERLANDS INDIA AUSTRALIA CHINA JAPAN UNITED STATES UNITED KINGDOM AUSTRALIA AUSTRALIA ITALY CANADA JAPAN CHINA UNITED STATES
Brand Value 2013 (USD) $26.04 bn $23.41 bn $22.86 bn $22.4 bn $21.68 bn $20.12 bn $19.82 bn $19 bn $18.57 bn $16.95 bn $15.97 bn $14.57 bn $14.16 bn $14.15 bn $13.78 bn $13.61 bn $13.44 bn $12.44 bn $11.6 bn $10.4 bn $10.28 bn $9.88 bn $9.82 bn $8.33 bn $7.56 bn $7.55 bn $7.46 bn $7.42 bn $7.41 bn $7.29 bn $7.25 bn $7.04 bn $7.02 bn $6.54 bn $6.5 bn $6.49 bn $6.11 bn $5.99 bn $5.83 bn $5.8 bn $5.48 bn $5.42 bn $5.42 bn $5.3 bn $4.98 bn $4.93 bn $4.81 bn $4.71 bn $4.59 bn $4.57 bn
Brand Rating 2013 AA+ AAAAAAAA+ AA+ AAAAA+ AAAAAAAA AAAAAAA+ AA+ AA+ AAAAA AA+ AA AAA AAAAAAAA+ AA AAAAA AA AAAAA+ AAAAAA+ AA+ AA+ AA+ AA AAAA+ AA+ AA AAAA+ AAAA+ AA+ AA AA AAAA AA
Brand Value 2012 (USD) $23.23 bn $18.96 bn $27.6 bn $19.54 bn $18.64 bn $19.97 bn $15.16 bn $18.23 bn $16.81 bn $15.46 bn $9.93 bn $12.91 bn $10.77 bn $12.86 bn $11.6 bn $15.69 bn $13.55 bn $13.17 bn $8.31 bn $8.5 bn $8.65 bn $7.26 bn $8.37 bn $7.2 bn $7.09 bn $6.35 bn $4.95 bn $9.33 bn $7.33 bn $5.94 bn $4.73 bn $5.72 bn $7.62 bn $5.25 bn $4.51 bn $5.36 bn $6.2 bn $4.69 bn $3.38 bn $5.63 bn $3.85 bn $5.18 bn $4.06 bn $4.24 bn $4.16 bn $4.14 bn $4.56 bn $3.38 bn $3.98 bn $4.85 bn
The 2013 Top 50, courtesy of Brand Finance® - www.brandfinance.com 50 | March 2013
Global CMO™ The Magazine
Brand Rating 2012 AA+ AA+ AAA AA+ AA+ AAAAA+ AAAAA+ AA A+ AA+ AA+ AAAA+ AAAAA+ AA AAAAAA+ AA AA+ AAAAAAA AA AA+ AA+ AA A+ AA AAAAA AAAAAAAA+ AA+ AAAAAA+ A+ AA+ AA A+ AAAAAAAA
The Banker / BrandFinance® Banking 500 Wells Fargo Heads Retail Banking Recovery To Become the World’s Most Valuable Bank Brand. •• Wells Fargo is the world’s most valuable bank brand with a brand value of $26bn •• There has been a 15% increase in total brand values from $746.8bn in 2012 to $860.7bn in 2013, in contrast to over $100bn lost the previous year •• Despite murmurings of reduced growth Chinese banks have again performed well, with a total brand value increase of 335% •• UK banks, including 2012’s most valuable bank brand HSBC, have done poorly - the UK is the only top 10 country to see the total value of its bank brands fall (by 2%) The Banker / BrandFinance® Banking 500, is an annual study conducted by Brand Finance plc, the world’s leading brand valuation consultancy, published in the ‘The Banker’ magazine. The world’s biggest banks are ranked by their brand value, with the results reflecting industry trends and indicating future developments. With a brand valued at $26bn in 2013, Wells Fargo is the world’s most valuable bank brand. CEO John Stumpf has spearheaded an impressive recovery from 2012, when total brand values for the top 500 banks fell by over $100 billion. Wells Fargo leads a field of retail-focussed banks that have outperformed competitors in other sectors. Total retail banking revenues for the top 500 are up 24% with brand values increasing 21%. Meanwhile investment banking revenues are down 7% and brand values down 14%. US banks have fared well relative to their European counterparts. Most have disposed of bad assets and with the domestic economy and property market starting to recover, earnings projections, a key brand value driver, have improved. At the same time they have help boost employment, with employee numbers up 10%. US banks now occupy four of the top five places and five more places in the table as a whole, with a total of 93.
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Emerging markets have seen huge increases in brand value, reflecting the fast growth of their banks and the continuing establishment of their brands. Russian banks have performed the best with a 453% uplift since 2008, followed by Indonesia (443%), the Philippines (412%), Colombia (377%) and China (335%). The presence and might of the Chinese banks has been ever growing. This year their total brand value reached $95.7 billion, with Agricultural Bank of China recording the highest leap in brand value of any bank ($6.04 billion) sending it from 18th to 11th place. Commenting on the results, The Banker’s editor, Brian Caplen, said: “Total bank brand values are the highest they have ever been and are nearly double the level in 2009 during the worst of the financial crisis. Chinese banks are still leading the charge in terms of the largest increases in brand value but they are now being joined by leading US banks such as Chase, Citi, Bank of America and Wells Fargo.” Brand Finance Chief Executive, David Haigh said: “This year’s results show that globally the banking crisis is nearly over as both brand ratings and values are rising. Only UK banks continue to lag behind the global recovery in both reputation and brand value.”
Global CMO™ The Magazine
March 2013 | 51
Why Do Fans Buy Tickets? What Drives People To Purchase? Kirk Wakefield
Knowing the right information about customer prospects should make salespeople more efficient by: 1. Reducing the length of each sales call, thereby 2. Increasing the number of calls within a given time period, 3. Allowing salespeople to select more productive calls, and 4. Initiating, building, and maintaining relationships with valued customers. The question is, “What is the right information?” The right information is what most readily identifies customers as ticket buyers. Russell Scibetti, Director of Relationship & Database Marketing at the New York Jets, outlines the core elements of lead scoring within a database according to the customer’s Affinity, Ability, Action, and Area. Those data buckets are a good way to think about the kinds of information needed. The problem is team databases are not the result of studied research into what data should be collected to tell us the most about the likelihood of fan purchase. Instead, the stored data are more a function of accounting and sales management practices intended to track revenues and its sources. Consequently, lead scoring models to date are estimated on what data is available, not what data would most readily identify current customers as potential ticket plan buyers.
What data do we need? Years ago, Russ Bookbinder, then with the San Antonio Spurs, asked an interesting question, “We know 80% of San Antonio are Spurs fans, but only 20% have ever attended a game. We want to know why the other 60% don’t attend.” That research question was the genesis for a major project we conducted in collaboration with the Spurs, Mavericks, and Rockets surveying over 5000 fans across the respective DMAs. The objective was to uncover any and all barriers or incentives to purchasing tickets among fans. We started with the 4 A’s (affinity, ability, action, and area). But, then we talked with the sales managers at each team to learn about typical objections, selling points, and issues experienced by salespeople. Taken together with academic literature, we generated a total of 24 characteristics and perceptions thought to influence the ticket buying process. The table below displays the demographics (7), media communications (4), barriers (7), and incentives (6) examined in the study, including a sample survey question or description where needed for clarification. Demographics & Media Communications The demographics include relatively standard data points. However, one caveat to the obvious effects of household income is that some people have money; they just don’t ever spend much on entertainment. To account for this possibility we measured how many times a month the individual goes out and spends at least $25 for entertainment purposes.
Frequency of talking about team/game with others
Miles from venue
•• “No one else in my family really cares about going.” (Popularity) •• “Once I pay for parking, food, and everything else, I just can’t afford to go.” (Perceived value) •• “I can never find any good tickets. I don’t want to sit in the nosebleeds.” (Ticket availability) •• “I’m not too familiar with downtown. Where is will call anyway?” (Game knowledge) •• “Traffic is terrible down there. Besides, there’s no other reason for me to be down there.” (Convenience)
+ Team loyalty
+ Team identification
+ Felt Similarity
“Good seats are available to buy for the games I want to attend.”
“I am very much like the players on this team.”
Cares enough to consider team performance, opponent, date/time
+ Entertainment value
“I know the best way to ... at a game.”
Kids at home
“When I talk about the team, I say my team rather than their team.”
“All financial costs considered, the expense to go to games is a (bad) good buy.”
“I will always be a fan of this team.”
Feeling that “this is my home town.”
“I am a die-hard [sport] fan.”
“Going to games is popular with my friends/family.”
+ Perceived value
Frequency of following in paper
“Going to a game is (not) worth the effort it takes.”
+ Hometown acclimation
M Newspaper Married
•• “It’s just too much trouble for me to get to the game.” (Psychic costs)
Frequency of watching games
We classified the objections salespeople often hear in terms of barriers to purchase. For example, prospect who came to one or two Celtics games might have moved from the Boston area and is not a local team fan. This objection is characteristic of individuals who have not acclimated to living in their new home town and still think of home as elsewhere (viz., “hometown acclimation”). Other frequent objections include:
+ Psychic costs
+ Game talk
How many times do you go out for entertainment and spend at least $25 of your household’s money?
Media communications Barriers Frequency of listening to games
The extent to which fans follow the team in the media— and now through social media—is always a good clue as to likelihood of purchase. We went one step further and measured how frequently the fan talks about the game before/after events with others. This second-hand communication may give a better measure of how important the team is in their social circles.
Relative to top 10 entertainment venues in DMA
“The [arena] is in a convenient location.” Sign in box ( + or - ) denotes direction of the effects on ticket purchase
Global CMO™ The Magazine
March 2013 | 53
9. Radio listening
Salespeople often encounter customers who are die-hard fans, say they’re loyal to the team, strongly identify with the team, and really like the players. Generally, these are incentives for fans to want to attend.
10. Game talk
Salespeople might find fans who only want to go to certain games at certain times—or question the performance of the team. These aren’t objections, but instead give an indication the fan cares enough to consider going to a game. If prospects don’t care about any specific game factors, they probably don’t care about buying tickets at all. Sure, season ticket holders don’t care about these things, but that’s because they have already committed to tickets for all of the games. Finally, some fans perceive that going to the game is more (less) entertaining than other options. So, we selected the top ten entertainment venues in each city and asked perceptions relative to each of the other options, including going to the movies, the aquarium, or someplace else they might spend entertainment dollars.
11. Number of kids in family (negative effect) 12. Popularity with friends/family 13. Identification with team 14. Marital status (married) Knowing these 14 data points allows us to correctly predict (non)buyers 83.2% of the time. As always, the best indicator of future behaviour is past behaviour. The vast majority of fans will do pretty much the same thing every year, unless a salesperson equipped with the proper information can (a) identify who is most likely to be predisposed to attend more games and (b) provide the appropriate incentive to change behaviour. objections,
These aren’t but instead give an indication the fan cares enough to consider going to a game. If prospects don’t care about any specific game factors, they probably don’t care about buying tickets at all.
The Results: Qualified Prospects Like many prospect lists of warm leads from the team’s database, our respondents included 50% who attended zero to two games and 50% who bought tickets to three or more games during the recently completed season. Without any prior knowledge, the expected accuracy of picking someone from either group from the list is the same as chance (50/50). How much can we increase our accuracy with the information gathered? More importantly, which data points most increase accuracy? As expected, all 24 items measured have a significant relationship (see table for the positive or negative sign of the effect) with the number of tickets purchased during the most recent season. However, the most important indicators of buying more tickets in order of influence are:
Another advantage of examining this data is helping marketers and salespeople better understand the buyer’s decision-making criteria. The best salespeople are always the best prepared. The demographic data will already be available from the organization’s CRM system. However, using the list above, a salesperson could quickly qualify a completely cold call prospect by asking a few simple questions in order to assess: 1. Game knowledge: Tell me about your experiences going to the game. Where do you think are the best places to park? The best seats? Best place to get tickets? 2. Psychic costs: Some people find it’s no trouble getting to the games. What’s your experience? 3. Going out: What do you like to do for entertainment? What do you do most weekends?
1. Last year’s attendance 2. Game knowledge 3. Income 4. Psychic costs (negative effect) 5. Distance (from arena) 6. Age 7. Gender (male) 8. Going out
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The basic information regarding the 4 A’s (bolded) make the list. Yet, other data not commonly gathered could help improve the likelihood of correctly identifying prospects. Space doesn’t allow us to go further into how to collect such data on a routine basis, but techniques are readily available.
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4. Radio listening: Do you ever listen to [team announcers]? Do you catch many of the games on the radio?
How do you feel knowing why your fans buy tickets will improve your own sales?
5. Popularity/Identification: Are you a big fan of the team? Anyone else in your family or close friends?
In a matter of a few minutes a good salesperson has figured out whether a ticket package will meet their needs or if it’s time to move on. If the individual is a good prospect, s/he will be more than happy to supply this information and will become a valued customer. If not, the unwillingness will be readily apparent and save needlessly presenting ticket information.
Baylor University Kirk is the GMN Programme Director for Sports Marketing. Since arriving at Baylor University in 2002 as Chair of the Marketing Department (2002-08), Professor Kirk Wakefield has planned, initiated, and successfully executed plans for the creation and development of 3 unique programs housed in the Department of Marketing: The Sports Sponsorship & Sales program and its advisory board of 40 major league teams, the Music & Entertainment Marketing program with its own studentrun record label www.uproarrecords.com and entertainment company, and the $5 million endowment from Gary Keller for the Keller Center for Residential Real Estate Marketing. Kirk is the editor and publisher of the newly launched Baylor S3 Report www.Baylors3.com supplying best practices in sports sponsorships, sales, and leadership. Dr. Wakefield has written Team Sports Marketing, published by Elsevier (2006) and now a widely used online textbook www.teamsportsmarketing.com
Conclusion Let’s repeat where we began. Knowing the right information about prospects will make salespeople more efficient by: 1. Reducing the length of each sales call, thereby 2. Increasing the number of calls within a given time period, 3. Allowing salespeople to select more productive calls, and 4. Initiating, building, and maintaining relationships with valued customers. ~ CMO
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‘The Purpose of Marketing is the Marketing of Purpose’ David Hood
What a fantastic time to be launching our Global CMO magazine, at a time when the Marketing Porfesisonal is in more demand than ever before and the numbers of students seeking to study marketing is on the rise. It is high time that our profession spoke with a collective, leading voice and in this magazine we now have the means to bring the best tools, methods and ideas that enhance our profession and personal effectiveness. For my part, I am introducing summarised extracts from my book, ‘The Marketing Manifesto’ in the form of 15 ‘MiniManifestos’ in this column. The tag-cloud here shows some of the main ongoing issues for the Marketing Professional and over the course of the next 15 issues, I will address the core issues I feel underpin these issues, one by one – so please make sure that you read every issue! Marketing is more than just ‘Polishing the Proposition’ Marketing needs to be more robust and better understood; both as a discipline and as a suitably productive career choice for us all. It must be seen as more than just a necessary evil or a cost to the business. It has to be a more attractive and fulfilling career option and ambition for the student, executive, manager or director and seen as a key business activity to non-marketers on the Board and valued accordingly by our colleagues of other disciplines. We need to make marketing more coherent a contribution to business management thinking in general; redefining what it does and what it can do to better align ‘the market’, ‘what the company does’, and the value exchanged between both. We need to engender an acceptance that it is critical to the business. How we will make Marketers and Marketing Critical to the Organisation Whilst the ‘chattering classes’ stir up the ongoing digital media debate and discuss the next new fad on their radar, we professional Marketers still have unresolved, core issues to resolve such as the distinct lack of something as fundamental as widely recognised and understood need identification and product/service development processes. Why for instance, is there a plethora of quality standards for internal in-company processes, but little relating to the external system that exists outside of the company? 56 | March 2013
We have to address a range of these issues if we are to personally improve our value to the organisation and to help it markedly improve its security of revenue. We need to challenge longstanding assumptions (There are a number if fundamental beliefs, assumptions, conflicts and contradictions that result in under-performance). The great news is that these have been clarified and shrunk down to an identifiable shortlist of core hurdles that are keeping you, the Marketer, and marketing from realising and being valued for its pivotal role in matching needs, propositions, and profit. ‘Personal Prowess’ In this column, we offer you a very Personal Manifesto. In identifying these critical conflicts, we can - and have - begun to assess how to reduce and remove and replace them all with elegant, robust and powerful maxims to help make marketing, as both a practice and career, more effective
Global CMO™ The Magazine
The Marketing Manifesto for the Marketer. From the point at which you start your career and subsequently develop strategies, researching and engaging with your market and deploying marketing tactics, conflicts can be resolved that can help you better align the market with your organisation and hence improve revenue opportunities. This should herald the start of the New Era for Marketing and the Marketer. In an age of increasingly market-led commerce, we are now even better placed to evolve our profession and practices to offer a marked opportunity to steer the organisation and provide internal leadership as never before. The opportunity is there, the tools really are available, but we need the leadership, direction and approach to match our ambitions. As ‘champions of the customer’, we are best placed to provide value in delivering real “thought Leadership” to our markets and to our organisations. There is a plethora of new collaborative tools that need collaborative principles, championed and managed by the Marketer. Arguably, noone is better placed to help the organisation become proactive, agile and “get the proposition right, first time”. In becoming what we have always striven to become - the value-add interface between the market and the organisation - we can develop and adopt a true ‘systems-thinking approach’ to help the organisation sense and respond in ways it could only ever dream of; we can become the absolute agents for sustained, productive change.
Join The Discussion: What do you feel is the most important thing that Marketers need to change?
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A Call to Action for Marketers
•• We need a new ‘Creed for Marketing and the Marketer’ •• A deep and meaningful commitment to the (renewed) Purpose through resolving marketing issues •• A worldwide, strong and recognised body to act on behalf of the profession (Global Marketing Network) •• Activities and engagement around the Global CMO brand It is easy, but frustrating, to simply ‘follow the flow’, feeling that we have to grasp each and every new fad in the hope of realising ambitions for our organisations; it is quite another matter to grasp the opportunity to address longstanding issues and make marketing work as it should - ultimately for the betterment of mankind through creating and sustaining valuable and valued exchanges. It is time for some Leadership - the Marketer can create and sustain an unassailable position in and for the organisation... and have marketing and the Marketer valued as critical to the health and longevity of the company and the wellbeing of its customers. Are you up for the challenge? ~ CMO
David James Hood is the GMN CPD and Online Community Director. A proficient and experienced Competitiveness Strategist who thrives on seeking improved revenue performance using realistic and practical market-led methods, David’s passion is to lead the call for the smaller business to improve marketing effectiveness through the ‘Competitive SME’ initiative. He has served on the UK’s Marketing and Sales Standards Setting Body and the manufacturing trade body competitiveScotland. He is Co-Director of the ‘Competitive SME’ mission, and is also a Guest Lecturer at the University of Glasgow. David’s two new books, are available through Kogan Page - ‘The Marketing Manifesto’, for professional marketers and marketing, improving prowess for both the Marketer and the organisation, and ‘Competitive SME: Building Competitive Advantage Through Marketing Excellence for Small to Medium Sized Enterprises’.
How The Chinese Became Global Branding Geniuses Martin Lindstrom
In the same way China approached its preparations for the Beijing Olympics, businesses have fully detailed each sensory impression a product will have on consumers. One company’s ultimate objective: Become a global leader in car manufacturing. Look out, Detroit. There I stood, having just been given permission to see an area of a building that few were allowed to enter. As I opened the door to the first room, the unmistakable smell of freshly cut grass pervaded my senses. The air was misty, the colours were light green, and the Mandarin name of the room I’d just entered, translated, meant “The people from the Nordic countries.” With my Danish background, it was comfortably familiar--the colours seemed lifted directly from the designer Arne Jacobsen’s catalogue, the smell took me right back to my parents’ garden, and the air was full of spring sounds Scandinavian birds make at dusk. The building I found myself in was huge--about the size of a football stadium--and it was located some 200 miles outside of Beijing. With the same level of zeal its country used in preparing for the 2008 Beijing Olympics, this business was fully detailing each sensory impression its products will have on potential consumers. For this business, the objective is to become a global leader in car manufacturing. Here, thousands of cars were lined up to leave an ultramodern production facility, which, until recently, featured all the familiar global brands. Now, there was a new take on it. The cars that stretched, row upon row, were all Chinese brands designed specifically to appeal to foreign markets. The world soon will see the ability of the Chinese to absorb 58 | March 2013
new ideas, and fast track them into the mainstream with accuracy, skill, and speed. In a very short time--despite a rocky start--they have grasped the essence of branding. In fact, their embrace of the fact that branding is a sensory discovery has put them ahead of others in the same industry operating on the other side of the globe. Beside the Nordic room was another room, one that focused on precision and detail. Surprising details of how, for example, Germans perceive mechanical movement, compared to the Chinese idea. Looking at a sliding door, it opens slowly, then speeds up, before slowing down to a perfect stop. In contrast, the Chinese door would swish open quickly and stop with an abrupt bang. The colours: gunmetal gray, black, white, puce, and olive. The shapes: perfectly symmetrical. The sounds: deeply resonant. Overall--a very conservative feel. Welcome to Germany. For almost three years, a team of scientists, researchers, anthropologists, and psychologists travelled the world to study the most inspirational and innovative countries in the world. They carefully selected the best features of those countries, focusing on those aspects that could influence the evolution of Chinese brands, shape their innovation process, define their future, and most importantly, serve as a model for their success. It seems like history repeating itself. Way back in the 1980s, the Japanese developed their version of the “German Room.” In order to surpass competing nations, they had to fully understand how they worked. They learned their lessons well, and Japan went on to build among the
Global CMO™ The Magazine
Martin Lindstrom Chairman, Buyology Inc and BRAND Sense Agency
image: iStockPhoto | Photomorphic
Martin Lindstrom is a 2009 recipient of TIME Magazine’s “World’s 100 Most Influential People” and author of Buyology - Truth and Lies About Why We Buy (Doubleday, New York), a New York Times and Wall Street Journal bestseller. His highly anticipated new book Brandwashed: Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy was released September 2011. Lindstrom is the CEO and Chairman of Martin Lindstrom Company Ltd and Chairman of Buyology Inc (New York), as well as BRAND Sense Agency (London). He is a trusted advisor to numerous Fortune 100 companies including McDonald’s Corporation, PepsiCo, American Express, Microsoft Corporation, The Walt Disney Company and GlaxoSmithKline, amongst others. His book, BRANDsense, was acclaimed by the Wall Street Journal as “…one of the five best marketing books ever published.” Buyology, was voted “pick of the year” by USA Today, reached ten of the Top 10 bestseller lists, including the New York Times and Wall Street Journal. His 5 books on branding have been translated into more than 30 languages and published in more than 60 countries worldwide.
The irony of this did not escape me as I found myself in this exclusive area of European sensibilities, the Nordic room and the German room. Especially given the fact that the very CEO who wondered when the “real” branding of his product was going to begin had commissioned more than 200 people to create an unprecedented database of the world’s consumer profiles.
best-selling cars in the world. China wants to be next. But they didn’t start out as naturals at understanding how branding works. Over the years I’ve worked with Chinese people, I’ve been somewhat taken aback by their perspective on the world. Their skill in producing sophisticated technological products is awe-inspiring. And yet, when it came to understanding the concept of branding, they seemed to struggle with the notion.
At the end of the day, that very same CEO was so proud as he asked me what I thought. The answer was obvious--I was more than impressed. I was intrigued to understand the end result of our work.
After spending weeks and weeks inside some of the largest Chinese companies teaching the fundamentals of creating an emotional brand, a CEO approached me, indirectly of course, to ask when we would begin work on creating the actual brand. For him, all the emotional stuff seemed irrelevant. The business was the product. This was particularly striking in light of the fact that, more than any others, the Chinese have an even greater passion for brands than, say, Russian or Japanese consumers. A recent study reveals that the average Chinese consumer feels the need to wear at least three branded items to feel comfortable at work. Yet, when probed further, they were at a loss, unable to define the features of a brand. However, they had no difficulty describing the product. It seems that for them, the product is the brand. The emotional connection is simply absent.
I asked him what he intended calling his new car. I imagined a Toyota-like name, or perhaps one with a German lilt. He looked at me, answering with absolute certainty, “It will be a Chinese name, of course.” He was firmly convinced that the time has come for the Western world to understand that there’s another language dominating the conversation, and that’s Mandarin. He went on to explain that the brand would only be written in Chinese, because, after all, there are enough people in the world who speak and read Mandarin, and it may very well be to others’ advantage to learn to do so, too. In the same way as when he first asked me to focus more on branding in my training sessions, and then to subsequently see him learning and changing his mind, something altered in his demeanour. It was like the last word had been spoken. He meant what he said. Soon we will find it necessary to speak Mandarin--especially when buying the brands of tomorrow.
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What can we learn from the Chinese about targeted global branding?
March 2013 | 59
Focus: South Africa
This feature has been developed in association with Advantage magazine, South Africa’s leading magazine for marketing professionals. GMN is delighted to be in South Africa and to have entered into an exclusive collaboration with Advantage as its Official Marketing Media Partner. Over the course of this year GMN will be implementing a number of new measures with Advantage designed to provide South Africa Marketing Professionals with the global accreditation and enhanced capabilities which they increasingly require to operate successfully in the 21st century. These include: •• Global CMO™ networking events, taking place in association with Henley Business School and other organisations and featuring keynote presentation from Marketing leaders •• Global CMO™ Forum, taking place later this year and focussing on digital and mobile marketing •• participation in our certification programmes, designed by the award-winning GMN Global Faculty, equipping marketing and sales professionals with the latest practices and capabilities so that they can improve their performance for their organisations and their clients •• the opportunity to participate in our research study aimed at identifying the most important challenges facing South African marketing professionals today
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•• Crime continues to deter foreign investment to some extent, hindering the growth of the country •• Unemployment in South Africa is still high •• Political risk (including the risk of nationalisation and expropriation) has been an obstacle in attracting further foreign investment, and in so doing, slowing down the growth of the emerging market.
image: Cape Town Stadium | iStockPhoto | holgs
However with challenges come opportunities. “Emerging markets are untapped and untainted by international trends; hence advertisers can influence consumers if they focus on the right means of communication. Advertisers need to be in areas where large volumes of the emerging market can be reached,” he says.
Targeting a shifting market Danette Breitenbach
As the battle for the wallet of the emerging-market consumer shifts into higher gear, companies that think about growth opportunities at a more granular level have a better chance of winning As the South African private sector continues the upward trend of rapid internationalisation following its previous years of isolation, our emerging market economies are fast providing new markets for South African capital, investment and management expertise. South Africa’s trade and investment relations are rapidly moving away from traditional to new emerging markets.
Challenges and opportunities Emerging markets not only provide new challenges, but greater market opportunities says Althaaf Cassim, group financial director, Primedia Unlimited. He foresees the following challenges in this regard:
Today South Africa is one of the most sophisticated and promising emerging markets globally. For Cassim this unique combination of a highly developed first-world economic infrastructure including leading shopping centres and a huge emergent market economy has given rise to a strong entrepreneurial and dynamic investment environment. “As the emerging market is ever growing, it is spread over a large volume of people which makes this market an attractive target market to advertisers. This market has recently gained wealth and will be in the market for new technology like computers, mobile phones, banking products and motor vehicles.” Garry Rogers, sales director, ComutaNet and Campus Media says this market is characterised by rapid financial and lifestyle progression with individuals entering the market more educated and therefore entering at a much higher income bracket than they were five to 10 years ago. “In fact, I believe that we are witnessing the extinction – albeit a slow one in this climate - of the LSM 1-2 while the LSM 4-6 is burgeoning, which is exciting as this quickly evolving sector presents immense potential.” For him it is crucial that we face our challenges face on. “Challenges are always going to be present, what is crucial is that we understand them. We are faced with the same challenges of production versus labour costs as our global counterparts and how that impacts on the local economy. Corruption and bureaucratic red tape is definitely a perceived challenge in South Africa, as is slow public sector delivery.” The great opportunity for him is South Africa’s influence in Africa, as the gateway to Sub-Saharan Africa. “This is a massive opportunity for South Africa as an emerging market. SA is the no. 1 exporter of platinum and third biggest exporter of gold, telling of our wealth in natural resources. This coupled up with the massive expansion of our local infrastructure places South Africa in an ideal position for bigger and better things.” Also to our beneficial relations with upcoming world powers and massive tech-product exporters like China and India is also encouraging, and will surely offer great opportunity within the South African economy he says.
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No-one-size-fits-all Margie Knap, Business Unit head, ZenithOptimedia, quotes the McKinsey Quarterly Report, saying there is no one-sizefits-all strategy for capturing consumer growth in emerging markets. “What’s clear though is that traditional country strategies and other aggregated approaches will miss the mark because they can’t account for the variability and rapid change in these markets,” she says. As the battle for the wallet of the emerging-market consumer shifts into higher gear, companies that think about growth opportunities at a more granular level have a better chance of winning. Emerging markets consume media she says. “They are building better futures for their families and will be loyal to brands that they have formed a bond with. The economy is tough and it is this lower end of the market that is really feeling the pinch. It is vital for brands to connect on an emotional level. Once that emotional bond is formed, and a brand is seen to be visible through both good and bad times, will ensure that these consumers will remain loyal.” She sees massive opportunity in conversing with the youth via mobisites as the cost of browsing a mobisite is much cheaper and faster than browsing a traditional website on a cellphone. “This makes mobisites an attractive alternative. Kick Off magazine has extended its print offering into a mobisite platform as well - combining the passion for sport with new technology.” The mass broadcast media of TV, radio and outdoor offer the highest penetration. Outside of TV and radio it should come as no surprise that advertising on minibus taxis has the highest penetration – 73% of LSM 4 to 5 have seen a minibus ad in the past seven days. In terms of radio listenership (on a national level) Ukhozi FM reigns supreme while the Daily Sun has a readership of 1.9 million. Bona magazine is the most widely read magazine (1.5 million readers). This success is due to the correct editorial mix and the fact that Bona is printed in four languages: English, Zulu, Sotho and Xhosa. Sport offers an emotional as well as physical outlet for this market she says. “Around 50% say that it is important for them to know what is happening on the sports front. This passion is carried through to sponsors of sport, as these consumers are more likely to buy products from companies that are actively involved in sport sponsorships.” These are traditional consumers. Their language and culture are important. “They like to be spoken to in their own language and believe that their children should be taught in their own language.A one-size-fits-all approach in these segments will fail, but by targeting city clusters within the emerging markets, companies can seize growth opportunities.” ~ CMO
image: iStockPhoto | michaeljung
Building on culture Danette Breitenbach
Emerging markets come from a culture of fables and stories developed from the time of communicating around the camp fire. Today emerging markets are still telling stories, but using different vehicles to do so In the world most people are still going online via a computer. In South Africa this is not so. They are using mobile. This is according to James Fergusson, TNS Global Director for Technology and Emerging markets, at the recent TNS Digital Life conference, held in Johannesburg where he presented “Understanding the world’s digital life from an African perspective”. There is a preference to do more and more on the mobile device in Africa than in US. In SA the complexity of tasks on mobile device is also much higher than in the US. For example, Mpesa, which is leading the way in mobile banking. Without alternative technology device options, mobile gains are increasing relevance in emerging markets. However, emerging markets demand for comprehensive mobile offerings and advanced features is limited dues
to infrastructure and low device ownership levels. Limited smartphone penetration prevents ease of mobile Internet access.
Quick as a wink This is going to change, and change quickly. The future of technology and how to access the Internet will flow from what is happening in China vs. what happening in US, he says. “Of the 513 million people online in China, 952 million users are mobile users. These numbers surpassed the US two years ago when 215 million Chinese came online for the first time.” China has set the benchmark for other rapid growth markets. “This will be the same in SA as more broadband becomes available. Already the average revenue per person shows that they are spending less time talking on their mobile. Critical mass is needed which means that prices must come down.”
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It is also about the device itself. “An android enabled touch screen device that needs no manual, because it is completely intuitive making it easy to use it for about US$80 is being developed. And it will take the market quickly. In Kenya, an android enabled device for $70 dollar sold 30 000 instantly. With strong mobile reliance Africa is a key example of where low-cost smartphones will be eagerly adopted.” Africa is poised to take advantage of these developments and his advice is be ready for this as the reasons for using mobile is growing daily. “Already a mobile provides continuous access to online services, especially in the evenings, making it the primary entertainment device. In Africa it is the primary device in bed, because in a house full of people it is the one place of privacy.” Africa is a key example of adoption of the mobile. “In Africa social media’s critical mass grew faster than any other continent and as infrastructure develops it will offer alternatives to traditional advertising platforms such as television. In SA TV is still strong and it will always be relevant. But the key is to integrate digital strategy with traditional strategy. Remember, many South Africans watch TV while accessing the Internet on their mobile.”
Reaching communities Newspapers are also a key part of emerging markets communication mix. Bucking the trend newspapers such as the Daily Sun and Sunday Sun are proving that the emerging market is where the action is. Working together with these two papers is Mamba Media, which is a content developing business, utilising the
medium of comics and sequential storytelling. Apart from working in the corporate communications arena, they also develop intellectual property for the emerging market. Their joint venture with the Daily Sunday and Sunday Sun, for which they provide the Soccer Warrior, is a successful example of this. According to Mamba Media, MD, Craig Nadelman, the company is a pioneer in the emerging market arena in terms of what it does. “We are amplifying something indicative to the emerging market using elements of telling stories in a non-threatening, easy to consume, entertaining and educational manner. We believe Mamba Media is a pioneer of this in grass roots communities on the scale that we are executing it.” The company works includes the LSM 4-7 market on the ground where it partners with newspapers, providing content and pictures. Its portfolio now also includes mobile. “We provide the content and they provide the distribution channels. We procure advertising and brand the product with non-competing exclusive brands. This advertising is peppered throughout the product.” With mobile a growing trend in the emerging market when Soccer Warrior recently revamped it has also launched a mobisite, which readers can navigate to when they enter Soccer Warrior competitions. This market is interested in communicating and being communicated to via mobile, he says. “This will increase as the costs of data in the country go down. The movement of technology and the increasing cost-effectiveness of data make a fantastic distribution vehicle to this market, using
Characteristics of the Emerging Market in SA •• One third of SA’s population falls into the LSM 4 and 5 segments* •• One third of this group are between the ages of 15 and 24. South Africa has a young population, unlike Europe which has an aging market* •• LSM 5 in particular has a very young profile, with 32% (1.8 million) falling into the 15 to 24 year old demographic* •• According to AMPS 2011 (Main Branded BA), the LSM 4 and 5 segments comprise 10 200 000 people (aged 15+), with an average monthly household income of R3 717* •• The incidence of single parent families is very high in this
market, with many people living with their families* •• The hard-earned salaries have to accommodate the needs of at least five people per household* •• A staggering 74% claim to not work at all - equating to 7.5 million people!* •• SA’s middle class has grown from 6.3 million (2001) to an estimated 12.7 million (2010) - a 100% increase versus a population growth of 10%. •• The development of the middle class is partly due to increases in income (from various sources), and partly through an accumulation of goods over time i.e. as the populace ages.
*(Supplied by Margie Knap, ZenithOptimedia) ^(Supplied by Althaaf Cassim, group financial director, Primedia Unlimited, from the Bureau of Market Research (BMR)
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•• The fastest developing LSM groups are found in the mid to upper end. •• Defining the middle class in SA is not as simple as it is in more developed countries, based on our exaggerated wealth disparity. This class is defined by the BMR using an income range of R50 000 to R500 000 per annum, and is made up of: •• Low Emerging •• Emerging •• Realised Middle Class •• To simplify matters, the BMR also concludes that the Middle Class is predominantly Black, LSM 5-7. According to AMPS 2010, there are 13 149 000 Black, LSM 5-7.
mobile and content collectively.”
For him the mobile space is the way of the future and entering it is providing a continuation of new and innovative platforms for their clients to reach their markets. “For us as a company, providing cost effective animation/comic material is an effective way to amply our already existing platform of print matter.”
Editor, Advantage Magazine
At the heart of it, regardless of the delivery vehicle is content. “All segments are interested in content, and it is content that attracts their attention. We see it in developed markets in the growth of tablets and smartphones. This is the new terrain in developing markets. However, we are bridging the gap and when the data becomes affordable enough the gap will be bridged – and quickly.” This said, newspapers are indicative to emerging markets, and there is a stronger sustainability and opportunities around emerging market papers. “It is also a community and social characteristic. This market likes, for example, to stand around the taxi rank, engaging with papers. Many read the paper from start to finish and then back again.”
The cross over Newspapers in emerging markets are finding that the response from their audiences online is very good. Razia Pillay–van der Schuur, senior web production, Avusa who manages SowetanLive and Sunday World websites says this is a market that loves to interact.
Danette is the editor for Advantage Magazine in South Africa. Danette Breitenbach has worked extensively in marketing, specialising in internal and external communications and public relations. Today she works in a diverse number of industries, including advertising and marketing, mining and engineering, construction, gaming, disability and general business. She has interviewed some of the top business people in South Africa including Lazarus Zim, previously vice-president of Anglo American and Sipho Nkosi the Chamber of Mines president and CEO of Exxaro Resources. After two years as deputy editor of Advantage magazine, the leading trade publication in SA which specialises in advertising, marketing and media, she became editor in March 2012. She works specifically in the BTL media, and is a specialist in out of home media. She holds a post-graduate diploma in Marketing Management (UNISA) 1998 with a distinction in Strategic Marketing Management. She has a Hons Degree in Africa Studies (University of Stellenbosch) and a BA Degree (English, History, African Studies, History) also from the University of Stellenbosch.
“Therefore your content has to be engaging. You cannot simply put up news content, but you have to give them news that relates to them.”
To do this you have to know your market. “We try to innovate but also to educate our audience. For example, teaching them to take pictures and upload them.” Shana Kay, Senior Business Analyst, Avusa says social media is key to their engagement with their audience. “The emerging market uses social media extensively and mainly through their mobile devices.” While this is generally the younger generation (the older still prefer a print product), she sees digital and print working together, for example building apps to complement each other. “In the emerging market it is the print product first and then the complementary digital offerings.” ~ CMO
Join The Discussion: How do you see South Africa’s position in the Marketing Profession?
She says people want to communicate and engage. “They don’t just want to read the news; they want to talk to us and they want us to talk back. They are so new to this offering that they want engage, because of curiosity. We therefore have to bridge the gap between offering services and engaging the readers.”
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Emerging markets coming of age Danette Breitenbach
The New Digital Economy: How it will transform business* by Oxford Economics (produced in collaboration with AT&T, Cisco, Citi, PwC and SAP, June 2011) provides insights into how corporations are responding to the key economic and technology megatrends reshaping the marketplace. The findings for emerging markets are particularly insightful. The following is a summary of parts of the study, relevant to emerging markets.
allowing them to instantly plan for a global market. The study identified six dramatic shifts for which firms will need to prepare: 1. The global digital economy comes of age 2. Industries undergo a digital transformation 3. The digital divide reverses 4. The emerging market customer takes centre stage
5. Business shifts into hyper drive. The internet has benefitted both developed and developing 6. Firms reorganise to embrace the digital economy. countries. The global marketplace is being transformed. The recession of 2008-09 only served to accelerate the market trends already set in motion by the internet and The digital divide reverses other forces. Economic growth and technology are linked Developing economies have easier access to talent, capital, and in emerging markets, industrial expansion, rising intellectual property and other resources unavailable to wealth and increasing populations have ramped up the them in the past. They were also not as hard hit by the demand for technology. Advanced economies on the other recession so they are in a stronger position for growth. hand are looking for higher rates of return. Regardless of The traditional digital divide favouring the haves in the location, firms looking to grow must engage with parts of industrial world over the havethe economy that are flourishing – the nots in developing markets digital marketplace and the emerging “When the G20 summit was now seems to be swiftly world. This is propelling the digital in South Korea, a lot of Western marketplace in both emerging and delegates found that their phones reversing. As a result we will be advanced economies. This has led didn’t work because they were too seeing a lot of leapfrogging of technologies, where countries to rapid market transformation unlike old-fashioned. They did not work bypass normal technological anything seen in the past. Historically on South Korea’s 4G networks.” states of development because most firms in advanced economies Mr Weber of the BBC they don’t need them. Firms modernise inside the framework of a in emerging markets are more domestic strategy, growing first within willing to adopt emerging their own borders and then replicating their business digital technologies than their counterparts in industrial elsewhere. Today’s emerging economies however are nations. There is a greater opens to shift practices, try new doing so at a time when technology has made it easier to technologies and take greater risks. gain access to global capital, talent and other resources, 66 | March 2013
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image: Johannesburg City Centre | iStockPhoto | thegift777
The rapid adoption of new digital technology in emerging markets is evident in global mobility trend. Of the about 5.3 billion mobile subscribers in the world, about 73% (3.8 billion) located in the developing world.
to ultra-high speed mobile is the most obvious example of leapfrogging in emerging markets.
The emerging market customer takes
China and India are fuelling most of the growth. These centre stage markets added about 300 million new mobile users in 2010 alone – a figure greater than the US’s entire mobile Emerging economies’ consumers are seeing their subscription base. According to eMarketer the number disposable income soar and as a result entering the middle of mobile users in China will jump from 671.1 million in or upper middle income class. Consumers are therefore 2010 to over 1.06 billion in 2015; buying more phones, appliances Two thirds of emerging India’s will leap from 516.2 million and other product and services. market executives expect to 901.2 million over the same Industrial markets are aging, while businesses to embrace period. The number of people emerging markets are seeing a social media and networking, accessing the internet over their rapid rise in well-educated workingwhile only one third of their mobile devices is also skyrocketing. age segments. Many emerging Conservative estimates show the industrial market counterparts markets are also largely debt world’s current 500 million mobile share this view. free and are poised to become internet users doubling to over economic powerhouses. By 2020 one billion by 2015. Much of this the E7 (Brazil, Russia, India, China, will come from emerging markets. Despite lower internet Mexico Indonesia and Turkey) will hold a great share of the penetration rates, emerging markets because of their size, world GDP then the G7 and a new tier of emerging markets now even enjoy a greater internet user base than industrial such as Vietnam, Colombia, South Africa and South Korea economies. For example the number will take off in their slipstream. of web users stands at 642 million in ~ CMO Two thirds of executives in the BRIC countries, compared to only emerging markets believe that 409 million in the four top industrial mobile devices will become *(The study surveyed 363 business executives nations. the standard method for in December 2010, from a range of countries The likelihood of emerging markets bypassing older technologies adds yet another competitive threat to Western companies. Going straight
web applications over the next five years, compared to only one half of executives in advanced economies. Global CMO™ The Magazine
and sectors. For the full report: http://www. pwc.com/gx/en/technology/publications/ transform-business-in-new)
March 2013 | 67
Developing Marketing Capabilities in South Africa Antony Michail
It’s Time For Change Traditional marketing as we know it — including media, advertising, public relations, branding and corporate communications — has evolved and changed over the past few years at a tremendous rate. Globalisation, technology, the rise of the empowered consumer and the need for marketing professionals to focus more than ever before on demonstrating the ROI they are making are just of the pressures that marketers are facing. All to often many people in traditional marketing roles may not even realise they’re operating within a changing paradigm. And therefore the capabilities they require are constantly changing. Marketers are having a hard time keeping up. Says GMN’s CMO ‘Czar’ MaryLee Sachs, a former US Chairman AND worldwide director of consumer marketing of WPP firm Hill & Knowlton and author of ‘The Changing MO of the CMO’ wrote that “the role of the CMO is probably one of the least understood. Marketing is often seen as a “black box” confused with sales, and which is sometimes viewed as a financial drain on an organization, funding expensive advertising campaigns, sponsorships and other untold extravagant items. “ Specifically in South Africa, most of the business people define marketing as media, selling or advertising. It is true that these are parts of the marketing and all of us every day are bombarded with TV and radio commercials, emails, sales calls, coupons, and direct mail. But marketing is much more than advertising and selling. In fact marketing comprises of a number of activities which are interlinked and the decision in one area affects the decision in other areas. By its nature, marketing defines how the organisation interacts with its market place. Consequently, all strategic planning, to a greater or lesser degree, requires an element of marketing. Only in this way can organisations become strategically responsive to customer need and commercial pressures. This year Global Marketing Network is establishing the Global Marketing Standards Council to determine the capabilities that Marketing Professionals require at each and every stage of their career, wherever they live and work in the world. Led by myself the first phase of this work will commence in March with the South Africa Marketing Professional Study™, with the support of GMN’s partners in South Africa such as Advantage magazine. 68 | March 2013
Global Marketing Standards Council Since its founding in 2005 Global Marketing Network has been resolutely committed to raising standards in Marketing Practice worldwide, and to the development of a stronger, better respected and more unified Marketing Profession. This vision is now widely supported worldwide by Marketing and Business leaders from both academia and industry. The Marketing Leaders of today an tomorrow require new capabilities in strategic management and leadership, a deeper understanding of the empowered consumer and how to reach them through digital marketing and social media, an ability to create more profitable customers, a clearer evaluation of how to develop global marketing strategies and a tighter grip on the finances. This year we are launching the Global Marketing Standards Council to identify the capabilities that are required by today’s Marketing Professionals worldwide. With an estimated 20 million people working in a definable marketing role in the world, coupled with widespread acceptance of the need for marketers to become more professional, there is both a very sizeable market, and a clear driver for change.
The purpose of the Study is to:•• identifying the capabilities and standards that the leading Marketing Professionals in South Africa possess and their state of readiness in helping their organisations cope with the challenges facing today’s business; •• establishing the capabilities and standards that organisations increasingly require from South Africa’s Marketing Professionals; •• developing the South African Marketing Capabilities Framework which establishes the capabilities and knowledge that South Africa’s Marketing Professionals require in order to deliver increasing value to South African businesses.
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Haydn Townsend, CEO of Trinergy Brand Connectors welcomes this development. “The marketing model has evolved. Marketing Professionals in South Africa are not only seeking the knowledge to implement the very latest Marketing Practices but are continually seeking stronger representation and the knowledge, insights, inspiration and education they need to help them deliver improvements in Marketing accountability. I wholeheartedly support this initiative and look forward to seeing the results.” The first phase of the research will be conducted in Spring 2013 with the Study being published later this year.
Antony Michail is the GMN Country Director for South Africa and Founder of Anacalypsis Strategy and Marketing Consultants. He has 15 years of progressively responsible experience consulting and advising both small and large corporations in relation to their marketing strategy, implementation, and company growth.
For any further information about this initiative please contact me by email at: email@example.com ~ CMO
Antony has led these companies through start-up, survival, turnaround and growth modes. Antony has spent 15 years as an consultant and senior marketing director in a variety of industries, including food and beverage, fashion, IT, heating, consumer durables, building products and construction, and environmental services.
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He has experience in auditing the marketing function, strategy, and tactics develop and execute marketing strategies, provide direction for future growth and development, new product development, effective budgeting, forecasting, and measurement. Antony has also designed a number of new initiatives to promote creative thinking in relation to new product development such as specialized Think Tank rooms, QMI (quick market intelligence) and VOC (voice of the customer) workshops. Antony has also delivered a number of academic lectures and seminars in relation to business strategy.
Register and Obtain Complimentary GMN Membership* Simply register for participation in the survey at: www.theglobalcmo.com/sasurvey by 30th April 2013 and you will also receive one year’s complimentary GMN Affiliate membership* so that you can obtain full access to the Global CMO™ The Community and receive the magazine direct to your inbox every month.
Among his significant previous positions, Antony served as Marketing Director of Fokas Department Stores in Greece, Commercial Director of Anatron Food Services SA (Greece, Cyprus, Bulgaria), Product Marketing Manager and NPD of Triscan Systems Ltd (UK), and Marketing Intelligence Officer of Baxi/Potterton Heating UK.
One person will also WIN a signed copy of ‘The Marketing Manifesto’ by David J Hood and a complimentary ticket to a GMN Global CMO™ Forum taking place in South Africa later this year.
Antony holds a Bachelor of Science (BSc) degree from National & Kapodistrian University of Athens (Greece), a Master of Arts (MA) degree from University of Central Lancashire, a Postgraduate Diploma in Strategic Marketing from CIM, and a Doctor of Philosophy (PhD) from University of Central Lancashire.
* Participants must be based in South Africa. Because of this, only South African registrants qualify for complimentary GMN membership and the prize draw.
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How To Ensure Your Sales Pipeline Is Realistic Rather Than ‘Over Optimistic’ In 2013 Ardi Kolah
The first thing to do in 2013 is to stop selling.
in constructing a realistic sales pipeline that takes account of these forces for change.
Few would argue that the nature of communication, information and the global economy have all transformed the way we now communicate and prospect for customers and clients.
Read that sentence again. Selling, by definition, is about the seller. It focuses on you and what you need. It’s an internalised perspective. And if you’re thinking about what you need to do to make the sale you won’t be focusing on your customer or client and will end up losing the sale. When you make a sale, you don’t always create a customer. Think about it. Selling tends to have a short horizon and tends to focus on a single transaction. But a customer isn’t a one-night stand – well, at least the customer you want to do business with in the future! Depending on the nature of your business, contact with your customer or client may be fleeting or sustained, daily or infrequent, but when they have a need for a product or service you want them to come to you and only you. And the reason they do is because they need help in making the right purchasing decision and fundamentally trust you to provide this to them. It’s your job to make them believers. Convert their interest and hope into the conviction that you can give them what they need and desire. The sales pipeline you’re looking to build in 2013 is all about ‘lead conversion’ because it recognises your prospects’ willingness to become a paying customer or client if you can give them what they need and desire. You need their custom and loyalty to grow your business and they need your products or services and a relationship that’s gratifying and valuable for them. This is the sales pipeline or put another way, the ‘customer pipeline’ that needs to be built. When you stop being manic about doing everything humanly possible to land a sale and instead start look for ways in which you can satisfy your customers’ needs, then the sale – when it comes – will be the natural consequence of giving your customers or clients what they want in order to make that purchase decision. In the UK, the Centre for Economics and Business Research predicts that living standards could fall by as much as 25 per cent over the next quarter-century as consumers adjust not only to the pressure from much cheaper Asian labour markets but also from far greater competition for share of scarce resources. It’s against this backdrop that we must re-wire our approach 70 | March 2013
In many respects, the strategies that are often employed to predict and manage customers’ or clients’ purchasing behaviour have been spurred on by the growth of online data, which in itself has its own challenges for the sales and marketing professional. What started life within the airline and hotel market segments has rapidly been adopted across other market segments that now database and online strategies proliferate sales pipeline management thinking. Implementation of these techniques often requires a combination of sophisticated mix of tools with equally sophisticated statistical methods to help manage and track frequency and timing of purchase, repeat purchase behaviour, market share and other indicators of commercial success including cost of sales and profit data and return on equity. As sales and marketing professionals, we feel we’ve been trained to do things a certain way. To think in a certain way that distinguishes us from our colleagues in other parts of the business or organization, such as operations, logistics, HR and finance. Yet this distinction that lives in our own minds may in fact inhibit our ability to become successful at sales pipeline management. At one level, we have much more in common with these guys than we may first believe! The point here is that at away from the office, we all behave very similarly. We’ll often hold differing contemporaneously.
We’ll often make compromises and customer sacrifices if we can’t get exactly what we want. In essence, the way we behave as consumers has also started to seep into our roles as business people. “Customers are more different and individual, more discerning and demanding than ever. Whilst 100 years ago, a new car buyer would be more than happy to buy a Ford Model T, a model that hardly changed in decades, in ‘any colour as long as it’s black’, today customers are intelligent, expectant and pedantic. Their stated needs may well be true, but their unstated needs and wants often matter even more,” observes sales and marketing guru Peter Fisk.
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A recent survey by Jupiter Research in the UK showed that 70 per cent of the respondents found that online research and review to be extremely helpful in making a purchase decision and 97 per cent of them also trusted online reviews (both negative and positive) five times more than they trusted information in a TV commercial or newspaper advertisement. British media entrepreneur Mark Palmer adds: “I see a fundamental shift in power to the consumer, to the people. That requires us to engage, to create and connect with consumers on a scale that we’ve never seen before.” And this is regardless of whether they are in the home or at the office. Every consumer today has either heard of or knows someone who’s been on the wrong side of a sales transaction that’s gone badly wrong. Today, its colleagues, friends, family and peers that your customers and clients will want to listen to and it’s this group that increasingly has a stronger influence on the ultimate purchase decision that’s being made. The balance of power has fundamentally shifted from sellers to customers and clients. In markets of infinite choice and over supply, it’s the customer who is in control. They expect companies to do business where, when and how they want and they don’t appreciate the pursuit of profit being placed in front of their own needs and requirements! Today, building a sales pipeline isn’t that straight forward and will require you to start from the ‘outside in’, then respond ‘inside out’ in a more enlightened and focused way in order to do business. ~ CMO
I’ve got it! We can double our quarterly sales! From now on, each quarter will last six months!
Join The Discussion: How are you going to keep your sales pipeline realistic in 2013?
Ardi Kolah Author, Communications Advisor Ardi Kolah is prolific author and one of the most respected marketing and communication practitioners in the world. He holds a masters degree in law and is a fellow of the Chartered Institutes of Marketing and Public Relations, and a Liveryman of the Worshipful Company of Marketors. His unique approach has made Guru in a Bottle extremely popular throughout Europe, the USA and India. His three recently published titles: “Essential Law for Marketers”, “The Art of Influencing and Selling” and “High Impact Marketing That Gets Results” are all available through Kogan Page and Amazon.
GMN Fellow Profile Markus Pfeiffer
Founder and Managing Director, Bloom Partners GmbH Markus is the GMN Programme Director for Digital Strategy and Innovation, and a Founding Partner of Bloom Partners. Before founding Bloom Partners he has spent ten years with Vivaldi Partners, a leading international strategy and innovation consultancy, where he had built and led the European operations out of their London and Munich offices. Markus brings a combination of strategy and marketing experience, deep knowledge about research methodologies, and expertise in working with top-level executives across many industries. He has served over 50 international and European clients to solve complex challenges in strategic marketing and identify new growth opportunities. Recently, he has led major growth initiatives for consumer brands within the Nestle portfolio, the energy conglomerate EDF, electronics giant Philips, and many others. His experience from working for large organizations as much as startups is vital for the tool development and expertise about digital business models at Bloom Partners. As an angel investor and serial entrepreneur Markus is also involved with several startup companies in the social commerce, fashion, telecommunication and media sector. He is a regular invited speaker to industry conferences and a visiting professor at the University of Cologne, Germany. He holds a diploma in Business Administration from Munich School of Management, Germany and a doctorate degree from the Center on Global Brand Leadership, Columbia Business School, New York. His publication list includes over thirty papers and books. ~ CMO
Coming In The Next Issue:
Are you ready? Driving organisational readiness in a digital consumer world Organizations find themselves increasingly facing an environment where the use of the Internet for social exchange, information and commerce has become the new normal. They are embedded in a digital world where consumers gain more and more control â€“ the fact that digitization is a growing phenomenon and will impact businesses across industries substantially is incontestable. Thus more and more companies
72 | March 2013
Global CMOâ„˘ The Magazine
have embraced Digital on an operational marketing level. However, leading organizations have understood and taken measure to use Digital as a broad strategic enabler for future success across the whole value chain, from top management down to sales. But how well prepared are firms to undergo and successfully manage the digital change? In order to analyse effects of growing digitization on organizations, Bloom Partners conducted a “Digital Readiness” study, following a hybrid research approach: Toplevel executives of leading brands from German speaking markets were interviewed and the results supplemented and validated through quantitative interviews with middleand upper managers. The aim of the study was to find what success factors lead some firms to better master digital change than others (and ultimately enjoy higher levels of firm performance). Key research questions addressed include to what extent the leading German brands embrace “Digital” – this included analysing how important these organizations deemed the impact and importance of digital topics on their entire organization and what digital strategies they had implemented so far. Also assessed was their know-how regarding digital topics and their acceptance of digital change, both necessary to successfully undergo the digital switch. The study identified significant differences between firms, meaning there are Digital Leaders, Followers and Laggards based on their level of adoption and incorporation of digitization into their organisational processes. This is a cornerstone on the path to becoming digitally ready, where companies need to combine the adoption of digital marketing and sales tools with a deep understanding and incorporation of digital channels and tools across their value chain. Firms that did so demonstrated significantly better developed capabilities like product innovation and the ability to attract top talent compared to competitors. This in turn enabled them to better sense fast changing customer needs and respond accordingly immediately – customer agility becomes key in a digitized and therefore increasingly dynamic market environment. These capabilities hence led digitally ready companies to achieve better firm performance, scoring significantly higher on all major dimensions like market share or profitability. Through the study we showed that being digitally ready is not only essential, it does pay off after all– it is an opportunity not to be missed to develop customer agility and reap the benefits. The entire endeavour however is ultimately reliant on strong top management advocacy. The goal of achieving “Digital Readiness” thus calls all managers to account for digitization being put on the top of their management agendas and motivating the entire organization to accept and implement digital change. ~ CMO
Also in the next issue: •• The GMN Chairman’s ‘Year End Address’ •• We profile GMN Fellow Michael Solomon •• Marketing Manifesto 1: The Future of Marketing •• What is Content Marketing? •• Are You A Victim of Phantom Vibration Syndrome? •• Implement or Die •• Meet GMN’s ‘Digital Doctor’
Issue out Monday 8th April
Global CMO™ The Magazine
March 2013 | 73
Global CMO™ Recommended Reads £14-99
1st edition | Paperback | 200pages
Precision Communication for the Digital Age Theo Theobald
• Shows you how to connect with new media savvy audiences in a meaningful way and make your messages stick
Gone are the days of the traditional sales letter. Engaging with global audiences in an increasingly competitive world means that what you say has to be incisive, relevant and delivered in a way that can’t be ignored. On Message provides expert guidance to help you keep up with the demands of the newest of new media, build a community and compete with big players. Packed with examples and practical help, it includes: templates; simple formulae for better messaging; practise exercises; review techniques; tips on flexing your writing muscles, and strategies to develop hard-hitting communication. Examining how to capture more followers who listen for longer and more intently, On Message will teach you how to develop your voice, segment your audience for more effective messaging, edit existing copy and engage with new and emerging markets.
• Provides inspiration and techniques from the world’s most famous orators, including John F Kennedy, Winston Churchill and Steve Jobs • Advice on how to develop and build a community around your blog
Essential Law For Marketers
2nd edition | Paperback | 288pages
‘Guru in a bottle’ series
• Follow up to the best selling text book originally published by Butterworth Heinemann
Ardi Kolah This completely updated and revised edition of the bestselling book in its field helps you to understand the basic legal principles applied in England and Wales that impact on your work in sales and marketing. We’ll give you the confidence to make authoritative statements online and offline, and comply with legal requirements in sales and marketing practice. You’ll understand the implications of EU laws and regulations, and how to prevent legal barriers stifling competition in your market segment. Jargon free, accessible, no detailed knowledge required, signposts the reader to all the important bits. The GURU is out of the BOTTLE!
• Takes account of all recent changes in UK and European law • Written by one of the world’s leading exponents of sales and marketing law
The Better Mousetrap
Brand Invention in a Media Democracy
1st edition | Paperback | 296pages
Simon Pont Advertising can be great. Great advertising, that is. Brands live or die on the power of their advertising and the advertiser’s role is to build better mousetraps. But why do we love certain brands and passionately or indifferently reject the rest? What do our brands say about us? And why do we feel so compelled to use digital brands to say even more? Advertising has always been the hard sell and subtle hustle that piques our interest and gets us thinking I WANT that, but in a world that now moves with binary speed, the Brand Game is taking ever-new and remarkable turns in its pursuit of better and faster mice. A provocative and insightful look at the chase, The Better Mousetrap lifts the lid on the brand and advertising strategies of leading companies who, in a world redefined by digital media, are setting the best traps for these ever quicker mice.
• Unique ‘insider’ analysis and commentaries on some of the world’s leading brands from Google to the BBC, Apple to Nike, McDonalds to Cadbury • Written by one of the ad world’s leading lights, and head of one of the industry’s most successful agencies • Packed with case examples ofleading brands, with original analysis of the success, and failures, of advertising in the digital age
GMN Member Discount
25% off all titles* Click here to find out how to redeem your member discount. *Conditions apply. Sorry, not available in USA & Canada
Order your book online now by clicking on the cover image. For the full range of Kogan page books visit
What keeps you wide-eyed in the depths of night? Walter Spoonbill of Spoonbill & Coot answers your marketing midnight worries. This month - is “new” a company saviour or curse?
“Dear Walter, My board has told the marketing department to come up with a new financial services product that will add significantly to top & bottom lines. I asked my ad agency & they presented a Cannes showreel (followed I must admit by a jolly nice lobster thermidor), while my Social Media agency referred me to Kickstarter. What do I do?” Confused Marketing Director Dear Confused When Machiavelli wasn’t telling the Prince to chop off heads, he did advise that there is nothing more difficult, more dangerous, more uncertain of outcome than introducing a new thing. Coot & I see the wave of marketing books & articles genuflecting to the success of innovation & postrationalising all-encompassing theories in pursuit of guruship, however we miss the tsunami of failure & bankruptcy brought about by new flops.
Music & movie companies know that one big hit can pay for at least half a dozen failures & so the lesson to learn from them is to spread your bets by multiple innovation - however, looking at the parlous state of most music & movie companies, perhaps not. Coot points out that the back-catalogues are the real cash-cows, plus Bowie is back, Kraftwerk & Petshop Boys headline this year’s Sonar in Barcelona, Bond has turned 50, Mad Max & Star Wars franchises are being revived. Old, in Coot’s view is the new, new. Another challenge is to keep the mainstreamers & newstreamers in your company from murdering eachother. The mainstreamers keep the revenue engine going, endure long hours, for salaries, a bonus if you’re lucky & remember the dress-code. Newstreamers are the unrealised future, with their own time-clocks, dress-sense, muses & incentives. What can be batters what is, whilst now undermines next. And yet, without innovation death will be slow but pure. So what’s to do? Coot supports the fast & better second. Apple did not invent the personal computer, the tablet, the digital music player, the smartphone - they saw the trend before it trended & made it cool. A financial company of our acquaintance has spread its international wings though the fast & better second. In the tradition of Sun Tzu’s “Art of War” they have an army of spies (now called researchers) to monitor what is happening in their space around the world & discover where the weaknesses are in these shiny new things. And so, if you want to be first, Coot advises, be second. For the road to bankruptcy is paved with new intentions.
“Dear Walter, We are starting a new global on-line business magazine in a world awash with advice. Is our money better invested in a psychiatrist?” Debating On-Line Publishing Enterprise Dear D.O.P.E This is a classic case of ju-jitsu marketing - finding the weakness in your opponent’s strength. Here, your opponent is the Internet – the sprawling mega—city of order & chaos, of knowledge & foolishness, of insight, ego & rage. You will only succeed by being the prescient curator, cutting out the noise, the tired rehash & following the footsteps of a Fortune Magazine editor who rejected every submission that contained less than two insights per page. Time is the most precious commodity for business-people. It can never be saved – it can only be spent more wisely. Delivering this is a sane investment. Coot is of the opinion that you should follow in the footsteps of great rock festivals. Bring in a superstar, then introduce a few supporting acts that steal the show. The superstar may sulk or come back stronger, some supports will remain loyal & new acts will be lining up at the door. Your job is then about saying no, often & nicely.
Wishing you marketing nirvana
Wspoonbill@theglobalcmo.com Spoonbill & Coot North Corner, Southern Tip, Western Cape, South Africa
Do e-mail Walter with your Midnight Worry – the most intriguing will be published & answered.
Global CMO™ The Magazine
March 2013 | 75
76 | March 2013
Global CMOâ„˘ The Magazine
Published on Mar 11, 2013
Global CMO™ The Magazine brings to Marketing Professionals globally the very latest and best practices in Marketing. Bridging the gap betwee...