Branding October 2010

2 What is a Brand? Asset that drives premium pricing and future cash flows Asset that drives premium pricing and future cash flows Signal of quality and a trust mark Signal of quality and a trust mark Shorthand way of simplifying complexity when making choices Shorthand way of simplifying complexity when making choices Relationship Relationship A set of rational and emotional associations that identify and differentiate a company or its offer A set of rational and emotional associations that identify and differentiate a company or its offer A form of self expression A form of self expression

3 What is a “brand” “unique identity” - Wells et al “the sum total of impressions about a name” - Duboff and Gallo

Page 4 Build equity in multiple brands Build brand equity in master brand Maximize synergies across business units Targets multiple customer segments Reinforce a global organization mindset Key Issues Driving Spectrum House of Brands Branded House Combination Varying levels of connection to and endorsement from the parent Brand portfolio strategies employed by companies today typically fall somewhere on the spectrum outlined below Stand-alone brands with little connection to its parent A single master brand to span a set of offerings

5 3 Distinct Brands; 3 Distinct Models

6 Generally speaking, there are three types of brand portfolio strategies based on the relationship to the corporate/master brand Authority Endorser Holding Company Master Brand: When a corporation’s strategy is to reinforce a comprehensive solutions focus and to maximize opportunities across business units, thereby building equity in a dominant master brand Master Brand: When a corporation’s strategy is to reinforce a comprehensive solutions focus and to maximize opportunities across business units, thereby building equity in a dominant master brand Master Brand Authority Endorser: When a corporation’s strategy is to broaden its frame of reference and deliver value across a portfolio of loosely related brands…thereby building equity in distinct brands with the corporate brand lending credibility and expertise across the portfolio Authority Endorser: When a corporation’s strategy is to broaden its frame of reference and deliver value across a portfolio of loosely related brands…thereby building equity in distinct brands with the corporate brand lending credibility and expertise across the portfolio Holding Company: When a corporation’s strategy is to build and deliver unique customer experiences and to maximize impact in a targeted manner… thereby building equity in distinct, stand-alone brands Holding Company: When a corporation’s strategy is to build and deliver unique customer experiences and to maximize impact in a targeted manner… thereby building equity in distinct, stand-alone brands

Page 7 Master BrandAuthority EndorserHolding Company Each of these has approaches has pros and cons that should be taken into consideration Cons Pros  Limits expansion into new markets/businesses outside of the established brand perceptions  Inhibits flexibility to create unique and distinct customer experiences, due to linkage to an overall brand  Allows less flexibility to address regional specific issues and to build a global brand presence due to regulatory or other issues  Builds equity in a single brand, establishing a clear, consistent point of distinction that maximizes market impact  Reduces overall investment by focusing resources on building and managing a single brand  Enhances ability to cross-sell and build customer loyalty through a more consistent delivery against the ideal customer experience  Adds credibility to other strategic brands while broadening the organization’s frame of reference  Allows easier expansion into unrelated businesses and new markets (domestic and global) while maintaining linkages across the portfolio  Offers greater flexibility to build a broader and more cross-regional brand presence  Requires significant investment to build a meaningful authority endorser brand that can be leveraged by the other brands in the portfolio  Requires a greater degree of sophistication to manage multiple brands at multiple levels  Increases risk of customer confusion, if not managed properly  Requires substantial investment in multiple brands required to drive market impact  Inhibits ability to instill shared values and a unified culture across the organization  Makes it more difficult to deepen and broaden customer relationships and brand experiences  Allows the most flexibility and opportunism by allowing autonomy and independence across the organization  Allows for easier acquisitive growth (domestic or global) and leveraging new brands and businesses within the portfolio  Provides greater ability to deliver on unique customer experiences across distinct customer segments

8 Ongoing management may vary depending upon the strategy selected House of Brands House of Brands Leader Optimal where products are within one category and no sub-brands -Center engaged in category management and all aspects of managing the brands Branded House Leader Optimal strategy where priorities are: -Unified brand strategy -Consistent brand messaging -Marketing investment efficiencies -Leverage of “bigger, fewer bets” -Managing few touchpoints Branded House Facilitator Optimal strategy where center controls aspects of brand but delivery is locally tailored: -Touchpoints are dispersed -High levels of customization needed -Typical for service businesses House of Brands Facilitator Optimal strategy where there are diverse product categories -Influencing role for the center, managing core brand essence and maximizing synergy but the real brand decisions made by sub brands Facilitator Leader Branded House