1. Building Brands in Challenging Times Presented by Andrew Zolli Clark University GSOM May 2003

2. YUCK! (I Want the 90’s Back!) Rapid Commoditization Recession Global Fear & Uncertainty Rebuilding Iraq Lack of Trust Corporate Scandals Over Capacity Ken Lay Dot Bomb War & Terrorism SARS Investor Revolt

3. A Quick Definition… “A brand is a meaningful, enduring and distinctive idea, formed in the minds of key constituencies based on the sum of direct and indirect experiences of an organization: its products, services, communications, behavior, history, cultural standing and interaction with stakeholders.” “A brand is a promise delivered.”

4. What’s Not Mentioned…  Logos  Tag Lines  Corporate Identity  Positioning  Direct Marketing  Advertising  Viral Anything

5. BRANDS EXPERIENCES CULTURE

6. No Logo vs. Pro Logo vs. Whoa! Logo!

7. “We Hate Starbucks!” “They’re a blight on the neighborhood!” “They’re taking over!” “They put the local place out of business.” “They have too much power.” “I want my brain back!”

8. The Heavenly Starbucks, Christian Family Center, Munsey, IN Meanwhile…

9. The Last Ride, Munsey, IN

14. How Did We Get Here? 186018701880189019001910192019301940195019601970198019902000 Relative increase of new brands

15. How Did We Get Here? 186018701880189019001910192019301940195019601970198019902000 Relative increase of new brands

16. The Dawn of the Modern Brand

17. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Growth in New Goods

18. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Percentage Change in the Growth in New Goods 1880-1900 1980-2000

19. Mass Manufacturing Mass Distribution Mass Communications Parity Products The Dawn of the Modern Brand

24. Where Are We Today?

25. Old vs. New communicationsbehavior vs. communicationsbehavior innovation

26. The Modern Acceleration of Branding 19602000 1960 2000

27. The Modern Acceleration of Branding 1960 2000 Key Drivers:  Globalization  New Technology  Deregulation  Tax Policy  Public Policy

28. The Modern Acceleration of Branding 1960 2000 Responses:  New Branding Disciplines  New Brand Consultants  Expansion of Brands into the Public Sphere Key Drivers:  Globalization  New Technology  Deregulation  Tax Policy  Public Policy

29. 2002 Brand of the Year: Google Source: Interbrand #1 in Loyalty… #1 in Preference… …NO AD AGENCY.

30. 2002 Top Global Brands Source: BusinessWeek

31. Of the Top Global Brands… On a normalized basis:  40% spend less on marketing and advertising than their nearest competitor!  But … they all spend more on IT – 18% more, on average! Source: Z+Partners

32. …And It Has a Huge Impact! Source: Z+Partners +30% Value of the top 10 global brands, as a percentage of their parent’s market value. (~ $390b!) +160% Difference in brand value between these leaders and their closest competitors +340% Difference in market cap between these leaders and their closest competitors +18% Difference in IT spending by brand leaders and their closest competitors (size adj.)

33. IT is the New Glue customer care ebusiness advertising strategic planning employees services R&D IR BRAND PROMISE HR supply chain operations inventory mgmt. Shaping InterpretingIntegrating Delivering Using Improving

34. Commodities $.10 Experiences $4.50 Culture $??? ? Moving Up The Chain of Meaning Products $.25 $1.00 Services

35. Total inventory managed every 90 minutes.

36. Winning through design and aesthetics.

37. 120,000 prescriptions filled by telephone.

38. Leadership through ease of use.

39. Claiming one’s heritage

40. The brand as sensory theatre.

41. New Technologies of Intimacy

43. #1 is HomeDepot.com #2 is HomeDepotSucks.com #3 is HomeDepot’s Suppliers

44. Another Quick Story

47. So What Comes Next?

48. Just Screw It.

49. Another Curve! 2000 2020

50. Another Curve! 2000 2020 Key Drivers:  Values  New Structures  New Metrics  Sustainability  Accountability  Transparency  Responsiveness  Dialogue

51. Another Curve! 2000 2020 Key Drivers:  Values  New Structures  New Metrics  Sustainability  Accountability  Transparency  Responsiveness  Dialogue

52. Some Questions For The Next Curve  Growth : Is it the foremost goal?  Scale : Is it the enemy of accountability?  Time : Do we need a longer view?  Profit : Is it only financial?  Customers: Are we merely consumers?  Metrics: How should we measure and reward?

53. “We’ve pushed market wisdom and moral wisdom as far apart as possible. The next chapter will be dominated by the painful process of bringing them back together.” -Eamon Kelly GBN (2000)

54. Thank You! Download This Presentation At www.zpluspartners.com/ta03 Z + Partners Design Strategy | Futures Research | Interesting Projects andrew@zpluspartners.com