Executive Summary

This thesis centers on the management of brands. Particularly the phenomenon is examined

through studies from the financial service industry and the case study of Saxo Bank A/S. The

findings reveal that in order to satisfy today’s demanding customers, offerings should be

thought of as experiences, and created through internal processes with the aim of being

innovative. The challenges are to suc- cessfully develop, align and coordinate the internal

processes, while at the same time incorporating consumer insights in terms of wants and

needs. In order to differentiate the brand, innovation needs to be founded not only on the

tangible features and functions of the experience but just as much on the intangibles, such

as the emotional rewards, the values and the personality of the brand.

At the outset, the study seeks to explore the trends, motives and drivers of the brand

management within the financial service industry. Consequently this thesis materialized from

an initial explorative research supported by theory and the case study of Saxo Bank.

Brand management in the financial service industry is today essential to survive in an

increasing competitive marketplace. Accurate consumer insights along with effective internal

management of resources are vital elements and the underlying premises of this thesis in

order to reap the benefits of a differentiated and relevant strong brand.

Consequently, the problem area of research in this study centers on the implications of the

changes in today’s economy, to the management of brands in the Financial Service Industry.

Thus, this study is a theoretical and empirical examination of 1) “How should companies in

the Financial Service Indus- try create brand experiences with the goal of maximizing

shareholder value?” and 2) “How can the stages of the brand management process be

applied to a case?”

In the case study analysis, it is found that the developed brand management process applies

well to Saxo Bank. However as the focus on brand management has been almost non-

existing, the company needs to improve within many areas as outlined in the case
conclusion. Conversely Saxo Bank has through its remarkably strong corporate culture,

established a solid foundation to leverage the brand in the future

1. Introduction
The pace at which the world is changing is accelerating every day. As a consequence we as

humans and organizations need to adapt increasingly faster and the ability to response to

the changes be- comes imperative for success in this new millennium. Jack Welch former

Chairman of General Elec- tric expresses this:

When the rate of change inside the company is exceeded by the rate of change outside the
company,
the end is near.”

During the nineties and the first seven years of the new millennium, the emergence and

evolution of the Internet and other technological advances have transformed the world.

Today individuals have the ability to collaborate, compete and consume globally in a more

dynamic, transparent and liberal way. Technology is a key factor contributing to this change,

as it is through technical means that in- dividuals and organizations can communicate faster,

cheaper, having a global reach and being able to access and exchange more knowledge

simply through the use of a PC. These technological advances have had an effect on the

way companies compete and collaborate to satisfy consumer demands, leading in many

cases to product commoditization. The Internet has been the greatest force of this

commoditization; its capability for friction-free transactions enables instant price comparisons

across many offerings, physically located in different geographic regions; while its ability to

rapidly execute these transactions allow customers to benefit from time and cost savings.

Consequently organizations have been forced to adapt to the developments in the

environment and to the changes in consumer demands.

The financial service industry has been significantly affected by these changes and like

many other industries, found their products and services commoditized (Kevin J Clancy,

2001). Until recently, the companies within this industry, have been protected by little
transparency making it difficult for customers to compare offerings and hence easy for

companies to overcharge their offerings. How- ever, the emergence of the Internet increased

transparency and enabled customers to easily compare price and offerings. With no

discernible differences among brands, consumers select financial serv- ices products based

on price instead of product features or advertising. Consequently without a dif- ferentiating

brand companies will find themselves stuck in a low-price rut trying to out cheap their

competitors in order to maintain their market share1.

This paper will discuss the implications of the changes in the economy throughout the last

decade and their impact on the financial service industry. Grounded in the field of brand

management it will propose the necessary adaptations to models and frameworks to answer

following problem state- ment.

1.1 Problem Statement
“What are the major implications of the changes in the context of today’s economy, to the
management of brands in the Financial Service Industry?”

In order to answer this we set out with an exploratory research that serves to identify these

implica- tions and key elements, for further investigation. The exploratory research unveils

the interrelation- ship of these implications and elements and resolve in a set of research

questions which allow for further examination.

Research question 1:
“How should companies in the Financial Service Industry create brand experiences with
the
goal of maximizing shareholder value?”

This research question serves to identify the important elements of brand experiences.

Moreover it aims at explaining the relationships between these elements and their connection

to the field of brand management. Based on this it seeks to propose a brand management

process, that can be used within the industry. Finally a set of propositions will be presented

and subsequently tested through a case study.

Research question 2:
“What do the stages of the brand management process consist of and how can the
process be
applied to a case
Kevin J Clancy, 2001 “European Financial Marketing and management newsletter

Brand Management Process Master Thesis

The brand management process will be operationalized through a case study, from the

financial serv- ice industry. The Danish online investment bank, Saxo Bank presents us with

a suitable case that al- lows for investigation: a multinational company, which emerged in the

90´s and has rapidly ex- panded through innovation led profitable organic growth. Saxo Bank

is currently facing the chal- lenge of creating a strong brand to leverage from its evolving

capabilities and to sustain as a signifi- cant player in the increasingly competitive market.
1.2 Research Motivation

The research and foundation of this present thesis is motivated by a number of factors.

Firstly, we believe that the changes the world is undergoing, presents some challenges that

the companies have to acknowledge. A main contributor to this change derives from the

technological advances. Thomas L. Friedman describes the key technological developments

that have transformed the economy in his bestselling book “The world is flat” (2005). These

developments include the PC (which allows every individual to produce his own work in

digital form), the Internet and the fiber-optic cable (which en- able individuals and

organizations to access more digital content and global resources) and software

(which empowers individuals and organizations to coordinate the exchange and production

of knowledge in digital form). Changes, that all have had a major effect on the consumer

behavior, and hence also the organizations.

Secondly, the literature review revealed that not much literature has attempted to construct a

brand management process that captures the mentioned changes of the 21st century.

Kapferer presented in 1992 the “Identity System” followed by Aaker (1996) the “Brand

Identity” as processes to build a strong brand. However, as they originated prior to, or at

least at the same time as, the radical changes of the 90´s, these processes do not capture

the changing elements and have to some degree turned obsolete. Later several authors

have presented brand management in this new context (Smith & Wheeler, 2002;

Chernatony, 2006; Ind & Bjerke, 2007), but none have explicitly formulated a proc- ess or
model to follow. Instead various theories and concepts on how to incorporate this into brand

management have been presented.

Thirdly, little emphasis in the financial service industry has historically been placed on brand

man- agement due to an extensive amount of “low hanging fruit” (Von Hippel, 2007).

However recent years has shown a gradual shift towards increasing focus on this area e.g.

Deutche Bank, Citi Group HSBC, Zecco, E*Trade. As a consequence of the increasing

transparency the Internet has crafted, the competition has increased, which has eliminated

the “low hanging fruit” and required a mean of dif- ferentiation to avoid commoditization.

At the same time the industry has historically been product centered rather than costumer

oriented. This has led to many advanced and technical products based on what the state-of-

the-art technology allowed, rather than focusing on the customers actual needs.
1.3 Central Definitions
The following section serves to outline the main concepts of the thesis and the way in which
they
should be understood to avoid any misinterpretations.
Brand

Brands are often confused with logos or trademarks. A trademark is a distinguishing name,

sign, symbol, or design, or some combination of them, that identifies the goods or services of

one seller. While a brand is a distinctive identity that differentiates a relevant, enduring, and

credible promise of value associated with a product, service, or organization and indicates

the source of that promise (Larry Light 1999). Following a strong brand can be defined as a

distinctive identity with which con- sumers are familiar, which promises a special experience

and comes from an authoritative source.

Brand Management Process

Is the process that seeks to maximize returns to shareholders by understanding both the

internal and external environments of the firm, crafting a vision, understanding its

consumers, sourcing the neces- sary resources and aligning the organizational value adding

processes to create and maintain a prom- ise of a relevant and differentiated brand designed

experience.
Brand promise
“Buy this brand, get this experience.”
The brand promise is what should ultimately define the offering and should be the essence

of the ex- perience. A promise of value and deliver on that promise is critical if a company is

going to differen- tiate itself from its competitors and take a solid claim in its intended market.

The offering encom- passed by the product, service and or experience will act as the

evidence for this promise.

Relevance

Occurs when two conditions are met; first there must be a perceived need or desire by

customers for a submarket defined by some combination of an attribute set, an application, a

user group, or other distinguishing characteristic. Second, the brand needs to be among the

set considered to be relevant for that submarket by the prospective customers. Being

relevant within a submarket, however, is no longer enough. There are two other challenges,

first the submarket associated with the brand should be a relevant one; and the brand should

be considered by customers to be an option with respect to another possible existing or

emerging submarket (Aaker 2007 pg. 61).

Differentiation

Differentiation relates to the ability of a brand to promise and deliver a unique value

proposition based on a configuration of features, functional benefits, emotional and

psychological rewards, val- ues and personality.

Experience

An experience is the totality of the cognitions given by perception; all that is perceived,

understood, and remembered. By perception we mean the recognition and interpretation of

sensory stimuli based chiefly on memory. This definition entails learning, knowledge, sensing

and feeling emotions. Expe- rience as an offering occurs whenever a company intentionally

uses services as the stage and goods as props to engage an individual (Pine and Gilmore,

1999).
1.4 Structure of the thesis

The structure of a paper is always determined by its purpose, problem field and context, in

which the research is carried out (Andersen, 2003). It serves to guide the reader by providing

an overview of the thesis and the content of the different chapters.

The thesis is therefore is divided into chapters. This present chapter 1 introduces the

context, states the problem as well as research questions that will be examined. Furthermore

it elaborates on the un- derlying motivation and purpose of the thesis.

Chapter 2 describes the research strategy and methodology the paper relies upon. It

explains the rela- tionship between empirical research and theory and their connection to the

context and case example. Additionally it raises the question of the validity and reliability of

the paper, as well as it provides the reader with an overview of the limitations and

constraining factors.