ORGANIZING FOR BRAND BUILDING

 

BRAND-BUILDING IMPERATIVES

Building brands involves strategic and tactical imperatives that create significant organizational challenges. Yesterday's organi­zational charts will need to be modified or changed; the successful brand-building companies in the coming decade will find new struc­tures and systems.

The strategic imperative: having a brand identity

A basic imperative is to have a brand identity in place to guide the de­velopment and coordination of the tactical programs. This identity should have a well-defined core and generate a value proposition and/or a basis for a brand relationship. Too often there is little effort to specify a brand identity, in part because no one is charged with that task. One goal of the brand-building organization is to make sure that someone is in charge and that an identity gets created.

The brand identity needs to be sufficiently rich and defined to help distinguish between on-target, supportive communications and those that are inconsistent and non-supportive. If the identity is fuzzy or incomplete, it will not provide real guidance—virtually any communi­cation program will appear to be consistent.

Also needed is a vision of the brand's future identity and roles (for example, endorser, descriptor, or driver). Unfortunately, most organi­zations are product driven rather than brand driven. This means that the brand's future is dictated by the past actions of product develop­ers. At General Mills, for example, the R&D area may produce a new product that takes advantage of novel food-processing techniques. After the product is developed, a brand name is needed; the immedi­ate temptation is to apply an established General Mills name (such as Betty Crocker, the Big G, or Bisquick). If there is no brand vision to guide this type of decision, an identity will drift over time, pushed into uncharted waters by incremental decisions. The result can be a brand that is diffused and meaningless, or one that has drifted away from its core business.

COORDINATING ACROSS THE ORGANIZATION

In many firms, a brand is shared by several businesses. At Hewlett   Packard, for example, the HP brand and sub-brands like the Jet series (DeskJet, LaserJet and so on) are shared by very different businesses, each with its own strategy, customer set, and objectives. A host of di­visions share the General Electric, Suntory, and Goodyear brands. In such cases, an organizational imperative is to create a mechanism for implementing a common, coordinated brand strategy across all busi­nesses. If no such mechanism is in place, the brand identity is likely to be inconsistently implemented. The result will be customer confu­sion and lost opportunities for building synergy.

coordinating across media

Another imperative is to create mechanisms to coordinate brand building across diverse media options which include event sponsorship, clubs and usage programs, direct response marketing, public relations, publicity, promotions, event stores, packaging, and design. At one time, brand building was primarily done through media ad­vertising, and the coordination problem was small or nonexistent. The advertising agency was often the dominant player. Today, effective brand building needs to involve many organizations staffed by in­dividuals who specialize in particular types of media or modes of communication. Each of these people and organizations will have a unique perspective and set of objectives. Making them all march to the same brand identity—indeed, getting them all to even understand the identity—is a formidable task whether the "captain" resides in an agency or with the client firm.

Furthermore, not all media programs will be consistent with the brand's identity. The challenge will be to have measurement systems in place to identify inconsistencies, even if this measurement involves both expense and inconvenience. In addition, the organization must empower an individual who has the will and the ability to discontinue inconsistent programs, even if these programs seem to be helping the brand on other measures.

coordinating across markets

When a brand is active in multiple markets (defined by products or segments), a final imperative is to coordinate strategy and tactics across those markets in order to build synergy and economies of scale while remaining flexible enough to adjust to each market's unique characteristics. The task is usually complicated by the many func­tional areas that influence brand building (such as advertising, sales, and market research, among others).

ADAPTING THE ORGANIZATION FOR BRAND BUILDING

There are a host of demands on organizations in this era of restruc­turing, flattening, total quality management, total cost control, cus­tomer focus, innovation thrusts, and on and on. In the face of these demands, one challenge for the organization is to get brand building on the list of priorities. Another is to adapt the organization to deal with the brand-building imperatives.

the organizational culture

Firms that are good at developing strong brands usually have a strong brand-building culture, including clearly defined values, norms, and organizational symbols. Brand building is accepted in these firms: Top management visibly supports the brands, and actions that put brands at risk are questioned as a matter of course.

The culture of an organization, more than procedures or struc­tures, is ultimately what drives the attainment of sustainable advantage. Unless brand building becomes an organizational priority, it will be difficult for the organization to address difficult branding problems.

At some organizations, there is a tendency to give lip service to building brands. If one listens carefully, though, one finds the as­sumption that brand building will occur only after the business "makes the numbers." When sales and profit goals are threatened, brand investment is cut back to compensate. Such organizations talk the talk of brand building, but they fail to walk the walk. A key is to have measurement and reward systems that make it feasible to main­tain and enhance brand equity even when the brand is not "making the numbers."

who is incharge of the brand?

In too many organizations, the answer to this question is no one. Or there are many people in charge, but each has different objectives. Hewlett-Packard, for example, has hundreds of managers, each with responsibility for the HP brand in a particular business area. Further, marketing products in different countries adds another layer of com­plexity and additional caretakers of the HP brand.

When a single person is in charge of the business associated with a brand, there will be an incentive to protect and nurture that brand. Suppose, however, that another business unit borrows the brand name, as, for example, the Sara Lee brand name (attached to the Sara Lee Corporation as well as the bakery line) has been borrowed by Sara Lee Packaged Meats (which also has such brands as Hillshire Farm and Ballpark Franks) to use on some top-end deli meats The borrower (in this case, the Packaged Meats line) has an opportunity to exploit the brand, while the risk of damage to the brand is shouldered by another organizational unit (in this case, Sara Lee Bakery). If the brand is mishandled, it is unfortunate for the Packaged Meats line but not a disaster. A borrower thus would have less incentive to pro­tect the brand name.

Someone, or some group, needs to be in charge of designing the brand identity and position in today's market, of seeing to it that identity/position implementation is effective and efficient; of ensuring that the identity/position is not compromised; and of designing crisis man­agement plans to handle possible disasters. Several models that have proven successful for different companies are outlined below.

The Brand Manager

Brand managers have traditionally had strategic and tactical respon­sibility for their brand, including having responsibility for the brand's identity and position, maintaining that identity by securing needed investments, and making sure that all media efforts are consistent with the identity. The brand manager role, first developed by Procter & Gamble in the mid-1930s for brands representing distinct busi­nesses of manageable size, is now being applied in more complex organizations.

One problem is that the brand manager is charged with tactical programs that require day-to-day fire fighting. It is difficult to focus on strategy issues when there is always a crisis to be dealt with. Fur­ther, the brand manager is inevitably rewarded on the basis of short-term measures such as sales and profits. He or she thus lacks the motivation to engage in programs that build brands, or to stop programs that risk brand equity. Successful managers are often re­warded with a promotion that takes them away from the brand— a practice that also reduces the incentive to do long-term brand building.

To make sure that strategic, long-term brand building takes place, strategic objectives and a clear brand identity need to supplement the short-term sales and profit goals. Strategic brand objectives should in­clude brand equity dimensions such as loyalty, brand image, and brand awareness, and they should be sufficiently operational so that they can truly guide programs and tactics and be used as a basis for performance appraisal and compensation.

The Brand Equity Manager

Some firms have separated brand strategy from the implementation of the marketing program. A brand equity manager (sometimes labeled as a brand manager) is in charge of creating and maintaining the brand identity and coordinating it over products and markets. Freed from the tactical management of the brand, this manager is responsible for strategic brand research and brand equity measurement. Implemen­tation of the brand strategy is then conducted by tactically-focused managers or (in the case of some large organizations such as Marriott, General Motors, and Hallmark) functional organizational units. The brand equity manager monitors, reviews, and perhaps approves the tactics from a brand strategy perspective.

The Range Brand Manager

Firms with range brands are naturally organized by products. As a result, different people in different contexts and with different objectives usually manage the brand. A solution is the range brand manager—one person who looks after the strategic interests of the brand across the different businesses. The range brand manager sup­ports the brand by making sure that there is an overall brand strategy accepted by everyone and that managers are sensitive to both the need to support the brand identity and the need to avoid inconsistencies. This task involves developing communication vehicles that maximize brand identity synergies across the organiza­tion.

The Global Brand Manager

IDV, the spirits business of Grand Metropolitan, has extended the brand equity manager concept to a global operation. Each country has a complement of national brand managers, each of whom is charged with marketing his or her respective Grand Met spirit brand in that country. However, the major IDV brands also have a global brand manager (in the case of Smirnoff, this person is president of the Pierre Smirnoff Company) who is charged with developing a brand identity worldwide, ensuring that the companies in each country are faithful to the brand strategy, communicating and facilitating best practices, and encouraging consistency and synergy across countries. This concept has been extended to Grand Met's Pillsbury operations for brands such as Green Giant and Haagen-Dazs.

The fact that the global brand manager and the national operations have different perspectives and objectives creates a tension that Grand Met considers to be healthy. For many decisions (for example, the selection of an ad agency for a country), the two organizations must reach a consensus. For other decisions, the country management is given some leeway but within clear guidelines. Thus the Smirnoff "Pure Thrill" advertising campaign featuring scenes as seen through a Smirnoff plays all over the world, but it is adapted to each individual country by using locally meaning­ful scenes or characters.

The CEO

In some firms the CEO is in charge of the brand, and all decisions that put the brand at risk need to be approved at the top. The CEO, of course, has the authority to cross business units to prevent risky programs or to provide resources when and where they are needed. Further, at least theoretically, he or she should have a long-term per­spective. Unfortunately, the CEO also has a host of objectives involv­ing operational measures (such as sales, costs, profits, and new products), many of which conflict with brand building. Moreover, the CEO must answer to a variety of constituencies (including share­holders, employees, customers, and retailers) while running a com­plex business. These multiple responsibilities make it difficult for a CEO to have single-minded concentration on building and protect­ing the brand.

The Brand Champion

In practice, brand stewardship is often housed at the highest level of the organization in some variant of the "CEO in charge" model. Typi­cally the brand manager will put forth proposals and programs, and a senior management team will review them. This team is usually the de facto guardian of the brand, resisting efforts that may risk the brand franchise and encouraging programs that will enhance it. Despite their strategic perspective, though, such teams usually are spread thin over many brands and thus lack in-depth understanding of the current brand context. As a result, their oversight can be somewhat ad hoc.

One solution, used by Nestle, is to create brand champions— senior executives who look after a single brand. Their responsibilities are similar to those of brand equity managers, except the brand cham­pion is at the highest level of the organization. Further, because a top executive is involved, it is natural and appropriate for the scope of oversight to include all of the brand's business areas in all of the coun­tries where the brand is active.

The Category Manager

The category manager role was created in response to the need for companies to think more broadly about efficiencies in distribution and logistics. When a brand identity is tied to a category (such as oral hygiene products), the category manager is in a good position to manage the brand strategically by developing strategies and programs among sub-brands and across products within the category. Coordi­nating with one or two other category managers will be simpler than working with a dozen brand managers.

Even when a category manager is responsible for multiple brands, his or her overview perspective can still be useful in coordinating ad­jacent and related brands. Gillette toiletries, for example, include Right Guard, a Gillette Series (for men). White Rain, Dry Idea, and Gillette Foamy; Procter & Gamble has seven soaps and several detergents. Individual brand managers, without a category-level per­spective, may not necessarily manage their brands optimally in rela­tion to others in the category. The result may be cannibalization problems among too-similar brands.

The problem is that the category manager is often under even men-pressure (from retailers and others) than managers of individual prod­ucts to deliver efficiency and low prices. Brand building will not automatically be a priority.

SmithKliine Beecham—the maker of Turns antacid, Contac cold medication and oral care products such as Aquafresh—has estab­lished a global category management structure Each category man­agement team has research, brand, and market groups that report to a category management director at the vice-presidential level. The category management team is charged with developing ways to expand existing brands and offering new concepts for brand groups around the world.

The Brand Committee

Coordination across businesses can be addressed by a committee that spans the organization. Hewlett-Packard, for example, has a brand equity committee of communication executives representing the divi­sions that use the HP name. The role of these executives is to develop an identity position for HP, to make sure it is communicated, and to facilitate coordination and synergy in the brand-building activities.

The Communications Coordinator

To reduce the coordination problem and to increase opportunities for synergy, a firm can centralize the various communications functions under a single manager. Clorox, Coca-Cola, General Foods, and others have taken this route, placing a senior manager over such functional areas as advertising, media, consumer promotions, mar­keting research, marketing information services, and consumer response / promotion services. The problem with this approach is that line management is not involved, and staff functions often lack clout, especially when overall budgets are squeezed.

Another problem is that centralized efforts often run counter to the current management imperative to flatten the organization. Tom Peters, in Liberation Management, is one of many current gurus who preach that the modern organization must remove bureaucracy and flatten the organization dramatically by putting managers on the front lines, removing layers of management, decentralizing, and empowering Such an approach is appealing because it promises to improve productivity, responsiveness, and energy; however, it can make coor­dination of brand strategies more difficult. In that context, a brand equity manager or brand champion might be needed.

THE ROLE OF THE AGENCY

A brand strategy needs a single architect, someone who will imple­ment and coordinate a cohesive brand strategy across multiple media and markets. The advertising agency is often a strong candidate for this role.

In fact, the best brand strategists may be agency personnel. Agen­cies attract employees who are interested in brand strategy, and these employees often develop brand strategy toolkits and gain insight and experience because of their exposure to different brands and brand contexts. Further, when brand managers change frequently, the agency—with its understanding of the brand and its heritage—is often by default the keeper of the brand equity.

Agencies also inherently provide a strong link between strategy and execution, because both functions are housed under the same roof. Strategy development in an agency thus is more likely to include issues of implementation. Even when they reside on the account side, agency brand strategists will have a good feel for execution. They are more likely to realize that most strategies will be ineffective unless an outstanding execution is generated.

Global brands can benefit from contributions of global agencies with strong country organizations in place. Most global agencies have experience in achieving consistency and synergy across countries. Even agency skeptics believe that agencies are well-positioned to adapt a brand identity from one nation to another.

The advertising agency, as a student of new communication forms and as a communication practitioner, is also in a good position to lead efforts to coordinate across media. Most major agencies have de­signed R&D programs that explore the use of emerging communica­tion forms. Ogilvy & Mather, for example, has been experimenting with interactive advertising since the early 1980s. Many advertising agencies, however, still have a bias toward media advertising at a time when such advertising is becoming less important. When all you have is a hammer, as the saying goes, everything looks like a nail. Further, an agency's experience at managing alternative media (such as event sponsorship or direct marketing) may be limited.

The challenge for agencies is to be able to develop an integrated communications effort that will access and employ a wide range of communication vehicles. Several of the approaches used to create this ability are discussed below.

the conglomerate communications company

The initial approach toward "solving" the integrated communications problem was to create agency conglomerates by acquiring other com­munications companies with complementary capabilities. The usual mix would include companies specializing in promotions, corporate design, package design, direct marketing, marketing research, trade shows, public relations, and perhaps event marketing. The hope was that internal synergy would result from cross-referrals and clients would receive one-stop coordinated communications efforts.

The general consensus, however is that the conglomerate approach did not work. The disparate organizations that made up the conglom­erate had unique cultures and perspectives that did not blend well. Each unit tended to address communication problems as it always had, and the coordination breakthroughs rarely materialized. Further, it was difficult to convince clients that the best talent for each com­munications task resided within the conglomerate; thus, even if the coordination rationale was persuasive, it was not easy to convince clients to sign on. Somewhat ironically, even referrals within the con­glomerate were avoided, since some units lacked confidence in their sister companies and considered them rivals for the client's commu­nication budget.

the in-house generalist agency

Another option is to expand the agency's capabilities to include such other media as promotions, brochures, and public relations. Brand teams spanning communication vehicles can then deal with the co-­ordination issue. A good example of this approach is the set of pro­motional programs designed for Saturn by Hal Riney & Partners.  Riney was named the guardian of the Saturn brand, and the agency created brochures, developed promotions, de­signed a Saturn site on the Internet, and even got involved in design­ing the retail concept.

Leo Burnett has deliberately avoided the conglomerate approach in favor of developing and integrating capabilities in direct market­ing, promotions, public relations and new media into the firm. The agency's non-advertising specialists are not allowed to work for non-Bumett clients

Technology can help an agency deliver efficiency and integrated communication across a variety of media. San Francisco's CKS Group uses technology to span advertising, trade shows, packaging, brochures, corporate design, virtual stores, and (for the Apple Newton) even an interactive kiosk. The heart of the CKS system is computer-stored and processed imagery that can be shared across ap­plications. A proposed logo or design can be seen on everything from brochures to signage to packaging; an image that works in an ad can be employed in a trade show banner, in a brochure, and on in-store mer­chandising. The work-in-progress and the final result are available to all members of the team at CKS and to their clients. CKS regards tech­nology (including e-mail and the World Wide Web, as well as shared imagery) as the key to integrated communication.

This in-house generalist approach can work as long as the agency has the talent to handle the new services or the funds to hire new staff members. Agencies, however, do not always have the clients or the revenues to support such a diverse staff. Thus it is not clear that ex­tending an agency broadly is always wise or feasible.

new agency organizational forms: the service cluster

Keith Reinhard of DDB Needham Worldwide envisions a future ad­vertising agency—which he terms Agency 2000—based on a dynamic service-cluster team concept A service-cluster team is a cluster of people drawn from all of the agency affiliate organizations (or perhaps from outside companies aligned with the agency). Strategically, the cluster has one purpose—to serve the client—and it has the flexibil­ity to change with client needs. Thus if promotions are relatively important to the brand strategy for a client, the team will be weighted toward people from the promotions company. Although the promo­tion team members will still have the support, critical mass, and infrastructure of their promotion firm, the focus and thrust of the team will be the client and its needs.

This multifunctional, service-cluster team can actually form its own organization, as DDB Needham showed when it created a multi­functional agency for a single client, GTE. This agency, called Focus GTE, is composed of people drawn from the various DDB Needham affiliates, representing capabilities including sales promotion, direct marketing, and database marketing. The expectation is that drawing people from different organizations into one place may be the catalyst needed to get over the coordination barrier. In essence, this is an ap­plication of the virtual corporation—a fluid grouping of people or organizations in order to optimally address the task at hand.

The service-cluster team can be centrally located, but such a move is expensive and reduces the adaptability that service clusters were conceived to provide. An alternative is to use electronically based communication to link the service-cluster team members. Using com­puters and video links, all members of the team can share not only data, but ideas and executions as well. A London agency, Electronic Studio, is a leader in using computers and scanners to speed the ad creation process; its system even includes on-line connections to clients. This operating concept, perhaps augmented by video confer­encing, could be extended beyond advertising to include other communication vehicles. The hope is that the technology will link the team members while maintaining the adaptability that a large agency can provide.

A key characteristic of a service-cluster team is that it will focus on creating ideas rather than advertisements. A prime agency differ­ential advantage is its ability to hire, train, and support strategic and tactical creative talent. The concept is to channel this creativity into generating ideas that can drive a brand. These "brand ideas" (a term used by J. Walter Thompson) will then be implemented by whatever media are most appropriate—the implementation will not be re­stricted to advertising. The Black Gold story (below) illustrates.

A radical change in thinking inside agencies is required for them to accept that a brand idea, rather than a great ad concept, can drive a communication program. The underlying premise is that advertising need not be the principal force behind brand communications. A sponsorship (like the WordPerfect bike racing team, or the Jose Cuervo volleyball sponsorship) might instead play the central role in communicating the brand identity.

the agency as a communication integrator

One of the problems of the service-cluster approach is that it assumes that the best talent is available within the agency umbrella. In this era of specialization and fragmentation, that supposition is unlikely. An­other approach is to redefine the agency as an integrator of commu­nication services drawn from sources outside the agency. The agency as an integrator and coordinator draws upon its potential to be:

• a good brand strategist

• creative in proposing communication solutions

• well versed in alternative media

• excellent in execution, particularly in developing themes and visual imagery

• an objective voice in client politics

Note that these are potential strengths; they will emerge only at the best agencies when they are operating well.

General Motors is one firm moving toward expanding the role of the agency to that of a "general contractor." The agency is expected to manage CM brands while turning to specialists, such as event spon­sorship firms and external boutiques, to implement specific initiatives. The agency role is to create ideas, select who will implement those ideas inside or outside the agency, and manage the process to ensure that an integrated communications effort results

the client approach

For many clients, the solution is not to rely on an agency, but rather, to bring the brand strategy in-house. There are often sound argu­ments for this approach.

First, agencies may be good at creating ads, but brand strategy may be better planned by the brand management team. In fact, developing such a strategy should be a top priority for the brand team. If outside help is needed, an agency may not he the best source, particularly if it has have limited research capabilities.

One client firm found only 13 percent of agency compensation went toward creative effort. Stripping the agency of other responsibilities (including media buying and market research) and adjusting the compensation accordingly saved a substantial sum.

Second, in this era of market fragmentation and media specializa­tion, it may be necessary to employ a team of specialized communi­cation firms that are each the best at what they do. An ad agency might be a team member when advertisements are needed; however, when interactive media or event sponsorships are needed, agencies may not be the best choice.

Third, a client can develop specialized expertise—including research, media buying, and strategy consulting—when needed. Campbel's Soup even produced its own Lifetime cable TV special on the key role teachers play in educating children as part of its Labels for Education, cookbook publishing, and point-of-sale programs.

Ref: Prof. H. Kombrabail's notes