Title: Strategically Branding A Destination
1Strategically Branding A Destination
- William D. Neal
- Senior Executive Officer
- SDR, Inc.
2What Values Come to Mind?
3What Values Come to Mind?
4What Values Come to Mind?
5What Values Come to Mind?
6What Values Come to Mind?
7Branding is a Strategy
- Great brands are built strategically
- Great Brands are a central element of strategic
business planning. - Great Brands dominate the market planning process.
8- Strategy - integrated actions in the pursuit of
competitive advantage - George Day
9Strategic Market Planning
- A planning process to develop or improve
sustainable competitive advantage.
10If it moves, we sponsor it, if it doesnt
move, we paint it red. Roberto C. Goizueta,
Coca Cola
11Can we adopt strategic business planning models
to the Travel Tourism Industry?
Yes ! But we must change our thinking a bit
12Think in terms of BUSINESS
- The location can be thought of as the ENTERPRISE.
- ORLANDO
- Individual destinations can be thought of as
STRATEGIC BUSINESS UNITS dominated by Brands. - Disney World
- Universal Studios
- Sea World
- Specific activities can be thought of as CUSTOMER
REQUIREMENTS. - Rides Attractions - History Education
- Culture/Heritage - Nature
- Night Life - Educational Programs
13Think in terms of BRANDS
- The destination area can be thought as an
AUTHORITY BRAND. - ORLANDO
- Individual destinations can be thought of as
STRATEGIC BRANDS. - Disney World
- Universal Studios
- Sea World
- Specific activities can be thought of as
INDIVIDUAL BRANDS to meet customer needs. - Indiana Jones Theme Park - Theme Hotels
- Old Town Orlando - Nature Island
14The Brand Hierarchy
Orlando
Authority Brand
Universal
Disney
Sea World
Strategic Brand
Strategic Brand
Strategic Brand
Sub- Brand
Sub- Brand
Sub- Brand
Theme Hotels
Indiv. Rides
Attractions
15What Master Brands come to mind for this
Authority Brand?
The Riverwalk The Alamo The Five Missions Texas
Museum of History The Spurs
16What Master Brands come to mind for this
Authority Brand?
The Braves Turner Field Stone Mountain
Park Buckhead Emory Medical Center Lake Lanier
17What Master Brands come to mind for this
Authority Brand?
Where is Ocracoke?
18The Marketing Concept
External Environment
Other Co. Activities
Marketing Activities
CONSUMER
Marketing Mix
Finance, Production, Legal
Economic, Political, Technological, Social,
Demographic
19The Marketing Concept
- The purpose of business is satisfied customers
- Drucker, Levitt, McKitterick
- The purpose of business is to deliver value
- Porter, Reichheld, Berry
20Brand Value Concept
Satisfaction simply keeps you in the
Consideration Set
All Products Services in the Category
The rational buyer purchases the brand with the
highest value to them
21The Marketing Concept
- REALITY
- Marketing Concept must also address the
competition - The purpose of business is to deliver higher
relative value. - To survive and grow, you must provide
SUSTAINABLE COMPETITIVE ADVANTAGE
22Goal of Marketing Strategy
Develop Sustainable Competitive Advantage
23Strategic Market Planning
- A planning process to develop or improve
sustainable competitive advantage. (Neal,
Introduction to Marketing Strategy)
24The Kotler Model
25The Major Elements of the Strategic Planning
Process at the Enterprise Level
- Mission
- Goals Objectives
- Growth Strategy
- Business Portfolio Plan
26Mission
- Short statement of the business you are in
- Used to focus and limit your purview
- Often the hardest step in the process
- Often accompanied with a VISION STATEMENT - what
do I want to be in the future.
27Goals Objectives
- Goals - longer term, broader outcomes you are
seeking (e.g. lead the industry in sales and
service) - Objectives - shorter term, totally measurable
outcomes (e.g. sustain a 10 increase in annual
profitability for each of the next three years) - Each goal should have multiple, time-phased
objectives crafted so that their accomplishment
will fulfill the goal.
28Growth Strategy
- To grow by how much over what time period.
- How will we measure growth - sales, profits,
share, operating ratios, etc. - How will we grow?
- Higher Demand
- New products
- Market expansion
- New market penetration
- Production efficiency
- Acquisition
- etc.
29Business Portfolio Plan
- What elements of my business will I put under the
same management group? - By brand family
- By product line
- By geographic/country location
- By channel
- By buyer benefits delivered
- etc.
30Developing The Strategic Marketing Plan
31Step 1 - Assessment
- Areas to Address
- Internal Opns
- Competitors
- Markets
- Marketing
- Environment
- Core knowledge
- Experience
- SWOT Analysis
- Strengths
- Weaknesses
- Opportunities
- Threats
32The Kotler Strategic Planning Model
The Company
TheEnvironment
Corporate Divisional Levels Strategic Planning
Process
Company
Objectives
Growth
Business
Macro-environment
and
Strategy
Portfolio
Mission
Goals
Plan
Publics
Competitors
Marketing Channels
Markets
Product Market Levels The Marketing Process
Target Markets
Marketing
Target
Marketing
Marketing
Market
Mix
Systems
Opportunity
Selection
Strategy
Development
Analysis
Customers
Information
Execution
Market Segmentation
Product Positioning
Product Optimization
Philip Kotler
Market Forecasting
Business Magazine
May-June, 1980, pg..3
Customer Feedback
Brand Value
33Step 2 - Marketing Opportunity Analysis
- Segment the market - What bases?
- Needs/preferences
- Values/benefits sought
- Occasions
- Demographics
- Align your strengths against competitions
weaknesses - BY SEGMENT - Share of market, Share of preference,
- Channel control, Price advantage, Brand strength,
- Price/value perception, Production capability, etc
34Market Segmentation
- Firms that properly segment their market and
focus their resources on deep penetration of
targeted segments almost always exhibit higher
profitability.
35Why is Market Segmentation usually successful?
- Focuses the resources of the firm on a specific
target of similar customers. - Limits competitive pressure.
- Allows the firm to develop a deep marketing-mix
experience with the segment. - Provides a platform for expansion into contiguous
segments.
36The Multi-Dimensional Segmentation Model
Activities
Occasions
Demographics (Life Stage)
37The Kotler Strategic Planning Model
The Company
TheEnvironment
Corporate Divisional Levels Strategic Planning
Process
Company
Objectives
Growth
Business
Macro-environment
and
Strategy
Portfolio
Mission
Goals
Plan
Publics
Competitors
Marketing Channels
Markets
Product Market Levels The Marketing Process
Target Markets
Marketing
Target
Marketing
Marketing
Market
Mix
Systems
Opportunity
Selection
Strategy
Development
Analysis
Customers
Information
Execution
Market Segmentation
Product Positioning
Product Optimization
Philip Kotler
Market Forecasting
Business Magazine
May-June, 1980, pg..3
Customer Feedback
Brand Value
38Step 3 - Target Market Selection
- Evaluate segments in terms of your perceived
strengths and weaknesses vs competitions
-develop perceptual maps for segment groups - First, select segments you currently dominate and
determine how to defend and improve your position - Next, select segments that you could dominate and
prioritize by cost of domination.
39Step 3 - Target Market Selection (cont.)
- Finally, find any remaining segments that
represent high growth potential and look at ways
you could successfully enter those segments. - New product introduction
- New brand platform
- Power promotion
- Order segments by financial attractiveness and
prioritize investments
40The Kotler Strategic Planning Model
The Company
TheEnvironment
Corporate Divisional Levels Strategic Planning
Process
Company
Objectives
Growth
Business
Macro-environment
and
Strategy
Portfolio
Mission
Goals
Plan
Publics
Competitors
Marketing Channels
Markets
Product Market Levels The Marketing Process
Target Markets
Marketing
Target
Marketing
Marketing
Market
Mix
Systems
Opportunity
Selection
Strategy
Development
Analysis
Customers
Information
Execution
Market Segmentation
Product Positioning
Product Optimization
Philip Kotler
Market Forecasting
Business Magazine
May-June, 1980, pg..3
Customer Feedback
Brand Value
41Step 4 - Marketing Mix Strategy
- FOR EACH TARGETED MARKET
- Determine how you will optimize VALUE for each
target market, now and in the future - Plan the product/service attributes you will
emphasize - Plan your advertising/promotional support program
- Plan your channel/delivery strategy - avoid
channel conflict - Plan your pricing strategy
42Step 4 - Marketing Mix Strategy (cont.)
- FOR EACH TARGETED MARKET
- Develop contingency plans for likely competitor
counter-attacks - For each segment, determine how you will enhance
your brand equity - Use market simulation (preference or choice
models) to test likely market response to your
initiatives and to test competitive responses - Check for incompatible brand and product
positions across targeted segments
43The Kotler Strategic Planning Model
The Company
TheEnvironment
Corporate Divisional Levels Strategic Planning
Process
Company
Objectives
Growth
Business
Macro-environment
and
Strategy
Portfolio
Mission
Goals
Plan
Publics
Competitors
Marketing Channels
Markets
Product Market Levels The Marketing Process
Target Markets
Marketing
Target
Marketing
Marketing
Market
Mix
Systems
Opportunity
Selection
Strategy
Analysis
Customers
Development
Information
Execution
Market Segmentation
Product Positioning
Product Optimization
Philip Kotler
Market Forecasting
Business Magazine
May-June, 1980, pg..3
Customer Feedback
Brand Value
44Step 5 - Marketing Systems
- Forecast the growth in each targeted segment
- Develop selling and delivery systems that will
support the current market and can handle the
forecasted growth. - Market information systems
- Customer service operations
- Communications programs
- Develop a customer feedback system that measures
plan vs. actual
45The Kotler Strategic Planning Model
The Company
TheEnvironment
Corporate Divisional Levels Strategic Planning
Process
Company
Objectives
Growth
Business
Macro-environment
and
Strategy
Portfolio
Mission
Goals
Plan
Publics
Competitors
Marketing Channels
Markets
Product Market Levels The Marketing Process
Target Markets
Marketing
Target
Marketing
Marketing
Market
Mix
Systems
Opportunity
Selection
Strategy
Analysis
Customers
Development
Information
Execution
Market Segmentation
Product Positioning
Product Optimization
Philip Kotler
Market Forecasting
Business Magazine
May-June, 1980, pg..3
Customer Feedback
Brand Value
46Strategic Planning
- Strategic market planning is non-linear and
recursive (and sometimes chaotic) - The interface between the overall business
strategy and the strategic marketing plan is
critical - they must be fully integrated - Ultimately, the strategic business plan dictates
the amount of investment you can afford in your
marketing plan - Develop a plan to measure costs, effectiveness,
and progress to objectives - ROMI
47Winning Strategy - Maximize value which
maximizes loyalty for each target market
- The KEY to customer LOYALTY and growth is to
- Get into the consideration set
- Then, consistently deliver the BEST VALUE to the
targeted customers. - VALUE is the KEY DRIVER of choice, thus LOYALTY!
- Brand Equity should be a major element of the
VALUE PROPOSITION.
48Why is Brand Equity Important?
- Prevents commoditization of the category.
- Communicates added value beyond the tangible
product performance characteristics, improving
selling price and margins. - Provides a strong defense against low price
generic brands. - Provides a platform for new product
introductions. - Gives more channel control to the
manufacturer/producer. - Improves stockholder value and stock price.
49Competing Theories of Brand Equity
- Financial Orientation
- Interbrand - Premium over category avg.
- Accepted Accounting Procedures
- Farquar - New Accounting Procedure
- Market Orientation
- Total Research - Equitrend
- Landor Associates
- Aaker
- Young Rubican
- CDB Research
- Vanderbilt/SDR (Srinivasan, Russell, Kamakura)
50MARKETPLACE APPROACHTOBRAND EQUITY
51Competing Market Theories of Brand Equity
- Aaker-Building Strong Brands. Views brand equity
as the total value of a brand, including price
premium, satisfaction, product attributes, image
attributes, public opinion, and so forth. - Vanderbilt Model - (MSI Series on Brand Equity.)
(Srinivasan, Russell, Kamakura) Views brand
equity as just the imagery that surrounds the
brand name by buyers in the product category.
Brand equity is separate from price and product
performance attributes and may be measured as a
price differential.
52Aakers 10 Measures
- Loyalty Measures
- Price Premium
- Satisfaction/Loyalty
- Perceived Quality/Leadership Measures
- Perceived Quality
- Leadership/Popularity
- Associations/Differentiation Measures
- Perceived value
- Brand Personality
- Organizational Associations
53Aakers 10 Measures (cont.)
- Awareness Measures
- Brand Awareness
- Market Behavior Measures
- Market Share
- Market Price Distribution Coverage
- The price premium may be the best single measure
of brand equity available, because it directly
captures the loyalty of customers in a most
relevant way. Aaker, pg 321.
54Aakers 10 Measures (cont.)
- Aaker model uses very disparate measures for each
of the 10 criteria. - Uses judgement to weight measures, depending on
the product category, in order to construct a
single summary measure. - Does not work cross-culturally because of
measurement and scaling issues. - Gives no examples
- Ultimately, it is totally judgmental.
55BRAND VALUEVanderbilt/SDR Model
(Combines market orientation and financial
orientation)
56 The Brand Value Model
- Idea developed from literature of Srinivasan,
Russell Kamakura - Very similar model described by Srinivasan
Park (JMR, May 94) (used expectancy-value
measurement model) - SDRs approach uses tradeoff exercises combined
with other measurements.
57Brand Value Concept
- 1. Buyers who are considering a purchase, scan
their product/service options and develop a
consideration set. - 2. Within the consideration set, they develop a
hierarchy of brands/products based on their
assessment of VALUE. - 3. Typically, they choose the brand or product at
the top of their value hierarchy, if available. - THIS MAY BE A CONSCIENCE COGNITIVE PROCESS, OR A
SUB-CONSCIENCE PROCESS WITH SOME EMOTIONAL
ELEMENTS
58Brand Value Concept
The
All Products/services in the Category
Consideration Set Brand Hierarchy Brand V
Brand X Brand Z
The rational buyer purchases the brand with the
highest value
59How Brands Get Into the Consideration Set
- Awareness
- Satisfaction in previous experience, or
reputation for high satisfaction of customers - Trusted
- Compatible image with purchaser
- Perceived acceptable price range
- Not socially irresponsible
- Acceptable country of origin
60Brand Value Concept
- Elements of Brand Value
- - A BUNDLE of tangible attributes delivered by
the product/service or its channel. - - A BUNDLE of intangible attributes delivered by
the name of the brand or producer (brand image
or brand equity.) - - The price of those combined bundles.
61Brand Value Concept
- Customers determine brand value
- Varies by customer and customer segment
- Varies by product/service category
- Any one Customer may have a different value set
for different product categories
62Brand Value Model
Value
What Drives Value ?
63Brand Value Model
Value
Price is one element Price includes - Initial
Costs - Operating Costs
Price
Initial Price Operating Cost
64Brand Value Model
The bundle of tangible product/ service
attributes is another.
Value
Product/Service Deliverables
Price
Attribute 1 Attribute 2 Attribute 3 etc..
Product Performance
Service/Channel Performance
65Brand Value Model
Brand equity is the third element.
Value
Product/Service Deliverables
Co./Brand Equity
Price
Image Driver 1 Image Driver 2 Image Driver 3 etc..
Attribute 1 Attribute 2 Attribute 3 etc..
Attribute 1 Attribute 2
66Brand Value Model
Each element of the brand value model has a weight
Value
WPrice
Wbrand
WiAttributes
Product/Service Deliverables
Co./Brand Equity
Price
Wi
Image Driver 1 Image Driver 2 Image Driver 3 etc..
Attribute 1 Attribute 2 Attribute 3 etc..
Wi
Attribute 1 Attribute 2 etc..
Wi
Wi
Wi
Wi
Wi
Wi
Wi
Wi
67Brand Value Model
Each buyer has a different weight structure
Value
WPrice
Wbrand
WiAttributes
Product/Service Deliverables
Co./Brand Equity
Price
Wi
Image Driver 1 Image Driver 2 Image Driver 3 etc..
Attribute 1 Attribute 2 Attribute 3 etc..
Wi
Attribute 1 Attribute 2 etc..
Wi
Wi
Wi
Wi
Wi
Wi
Wi
Wi
68Brand Value Model
The buyers weight structure is their Value
Equation
Value
WPrice
Wbrand
WiAttributes
Product/Service Deliverables
Co./Brand Equity
Price
Wi
Image Driver 1 Image Driver 2 Image Driver 3 etc..
Attribute 1 Attribute 2 Attribute 3 etc..
Wi
Attribute 1 Attribute 2 etc..
Wi
Wi
Wi
Wi
Wi
Wi
Wi
Wi
69Brand Value Model
- Each buyer has a unique Value Equation
- The Value Equation provides the buyer with a
preference structure for making a CHOICE among a
competing set of products or services in a
category. - Rational buyers choose the best VALUE.
- Thus VALUE drives CHOICE.
70Brand Value Model
Value
Choice
WPrice
Wbrand
WiAttributes
Product/Service Deliverables
Co./Brand Equity
Price
Wi
Image Driver 1 Image Driver 2 Image Driver 3 etc..
Attribute 1 Attribute 2 Attribute 3 etc..
Wi
Attribute 1 Attribute 2 etc..
Wi
Wi
Wi
Wi
Wi
Wi
Wi
Wi
71Brand Value Management
- BRAND VALUE
- Varies by product/service category.
- Price and performance features can often be met
by competitors. - Brand equity is more difficult to change - long
term strategy - Both offensive and defensive. - When there is weak brand equity and product/
channel parity in a category, price is the only
remaining marketing variable.
72Brand Equity Characteristics
- BRAND EQUITY
- Intangible, varies by category
- Not easily duplicated, thus provides long- term
defense against competition - Underlying drivers are perceptual
- Image imparted to the purchaser
- Trust
- Longevity in the marketplace
- Reputation for quality
- Community involvement
- Built and improved by effective advertising
73Brand Value/Equity Measurement
- ASSUMPTIONS
- Buyers optimize value within a product or
service category. - Buyers therefore assign utilities (weights) to
price, performance attributes, and brand equity. - Buyers trade off performance attributes and
brand equity against price in order to optimize
value. - The utilities (weights) of price, performance
attributes and brand equity is summative and
equal to total brand value.
74Brand Value/Equity Measurement
- First, we use conjoint models to estimate
utilities. - Respondent goes through two tradeoff tasks
- TASK 1 - Brand-Price tradeoff
- TASK 2 - Brand-Features-Price tradeoff
- Merge results of both tasks at the respondent
subgroup level and re-scale to be comparable. - Purpose is to get accurate estimate of price
utility
75Measurement Model
Total Value (Ut)
First stage conjoint
Price (Upr)
Product (Upt)
X
Attribute 1 (u1)
Attribute 2 (u2)
Attribute J (uj)
Brand (Ub)
Price
Second stage conjoint
76Task 3 - Choice Task
- Respondent then goes through a CHOICE TASK that
is based on their conjoint results. - Respondent is asked if they would switch to, or
purchase next, their highest rated conjoint
profile. - IF YES, we ask about another (lower) profile, and
so on until they would not purchase or switch. - PURPOSE measure barriers to switching and
confirm conjoint results
77Task 4 - Brand Image Ratings
- Each brand in the competitive set is also rated
(0-10 scale) on its imagery, for example - A brand I can trust
- A brand that I want seen in my home
- A company that will fix any problems I may have
with their product - etc.
- Ratings are then (ridge) regressed against
derived brand equity from the conjoint to get the
relative weight of each image driver.
78Task 4 - Brand Image Ratings
- The beta coefficients from the ridge regression
(or similar models) reveal the key drivers that
are most associated with each brands utility
(derived brand equity) - Thus, you can reveal the key drivers of brand
equity, improve your imagery on those attributes
and improve brand equity
79Brand Equity DRIVERS Service Co.
- Honest in its dealings with customers
- Concerned about my familys needs
- Progressive and innovative
- Respects me as a customer
- Is well managed
- Efficient in coordinating the service activities
of different departments - Keeps me informed of energy matters that are
important to my familys health - Easy to do business with
- Contributes to the community
80Average Importance of the Elements of Brand Value
81Brand Valuation RESULTS
- With this type of model, you can build a market
response simulator to determine how each
marketing mix variable effects share of choice. - Changes in BRAND EQUITY can be tracked over time.
- Changes are relative to other products/ brands in
the category.
82Brand Value Model
Value
Choice
WPrice
Wbrand
WiAttributes
Product/Service Deliverables
Co./Brand Equity
Price
Wi
Image Driver 1 Image Driver 2 Image Driver 3 etc..
Attribute 1 Attribute 2 Attribute 3 etc..
Wi
Attribute 1 Attribute 2 etc..
Wi
Wi
Wi
Wi
Wi
Wi
Wi
Wi
83Winning Strategy - Maximize value which
maximizes loyalty for each target market
- The KEY to customer LOYALTY and growth is to
consistently deliver the BEST VALUE to the
customer. - VALUE is the KEY DRIVER of choice, thus LOYALTY!
- Brand Equity can be a major element of the VALUE
PROPOSITION.
84Market Segmentation Based on the Value Model
- Derive the value equation for each respondent in
the survey. - Each buyers value equation can be used as the
basis for segmenting the market. - Form groups of respondents who have similar value
structures (e.g. price sensitives, service
sensitive groups, product performance sensitive
groups, etc.)
85Brand Value Model
- Each buyer has a unique value equation.
- We use modified conjoint/choice exercises to
determine that value equation for each
respondent. - From the derived utilities and choice
information, we can determine each respondents
switching behavior under different competitive
scenarios.
86From the Brand Value Model
- We can determined who switched.
- We can determine why they switched.
- We can describe the switchers.
- We can describe the non-switchers.
- FOR EACH COMPETITIVE SCENARIO
87This led us to a discovery!
- There are different kinds of loyalty!
- Some people are loyal because they are committed
to a brand or company. - Some are loyal because a particular brand offers
some unique benefits or performance
characteristics. - Some are loyal because they wont spend the time
or effort to make an evaluation. - Some are loyal because they have little choice.
- And some are just disloyal, buying on price or
convenience alone.
88Some Parting Thoughts
- A label is not a Brand!
- Advertising and Promotion costs to support a
brand is an investment, not an expense. - The starting point, and the KEY to building Brand
Equity, is to define what you want your brand to
stand for - the implied contract you have with
the consumer. - Then, support that brand image in every way - in
all selling materials, with distributors
retailers, in advertising, promotion, and PR.
89Some Parting Thoughts
- You can stake out a brand promise in many ways
- The highest quality in the category
- Good Economical
- Available everywhere - systems, parts and repair
- The best designs in the business
- Extreme versatility/diversity
- Make sure your performance (and your channels
performance) backs up your promise - walk the
talk!
90Some Parting Thoughts
- Strong brands mitigate channel dominance and
product commoditization. - Strong brands pull product through the channel.
- Strong brands improve profit margins.
- Strong brands build stockholder equity.
- If you do not build strong brands in your
category, someone will do it to you!
91Questions and CommentsWDNEAL_at_sdrnet.com