Branding

Brand equity – the commercial value a brand provides to a firm through its effects on the
attitudes and behaviours of its stakeholders.
Brand identity – a name, symbol or design that identifies a product, service or entity from
others.
Brand image – a set of associations attached to a brand identity in the minds of its stakeholders.
Brand promise – the customer value proposition or benefits communicated by the brand to the
customer and/or consumer.
Brand purpose – this answers the question of why a brand exists with respect to the positive
difference it aims to make in people’s lives.
Brand valuation – the Net Present Value (NPV) of future cash flows stemming from the brand as
an intangible (separable) asset, for example, as estimated in the avoided royalty payments
through ownership of a trademark and associated intellectual property (e.g., brand guidelines).
Brand value – the incremental Net Present Value (NPV) of future cash flows stemming from a
branded compared an unbranded business and product via its effect on all stakeholders (e.g.,
customers, employees, suppliers, financiers, channel partners, etc.). In simpler terms, what
deploying the brand is worth to management, the bottom line, and shareholders.
Branding – the creation of names, symbols, characters, and slogans that (1) help identify a
product and (2) create unique positive associations that differentiate it from the competition by
(3) creating additional meaning (value) in consumers’ minds.
Consumer – a person or entity that makes use of a good or service.

Culture – the tone and way in which things are done around the organisation.
Customer – a person or entity that purchases goods or services.
Customer-based brand equity – “the differential effect of brand knowledge on consumer

response to the marketing of the brand” (Keller, Journal of Marketing, 1993).
Customer/consumer experience – a customer’s and/or consumer’s holistic perception of their

interactions with an organization and its products and services over the duration of their
relationship.
Consumer/customer journey – the mapping of the customer experience across all touchpoints
(in particular those “moments-that-matter”) between the customer and/or consumer.
Customer value proposition (CVP) – the sum total of benefits which a seller promises a
customer will receive in return for the payment or other value-transfer.
Differentiation – relevant associations or the net value of customer perceptions of a brand,

product, or service that sets it apart from the competition.
Employee-based brand equity – “the value a brand provides to a firm through its effects on the
attitudes and behaviours of its employees” (Tavassoli, Sorescu & Chandy, Journal of Marketing
Research, 2014).
Employee branding – the process by which employees learn about, commit to and are are
motivated and enabled to deliver the proised brand experience to customers and consumers.
Employee Value Proposition (EVP) – the benefits promised by an organisation in return for the
talent, experience and engagement employees bring to the organisation.
Employer brand – the image of an organisation as a great place to work in the minds of
potential and current employees.
Experience – the perceptions of an event, episode or encounter that leave an impression.
Intangible asset – a non-physical asset such as a patent, trademark, or goodwill recognized in

business combination.
Mission statement – a simply written statement of the current business purpose to provide
direction and guide decision making: what business are we in, i.e., what do we aim to provide
for our customers and other stakeholders?
Net Present Value (NPV) –the future cash receipts associated with an investment, discounted
by a specified rate of return.
Positioning – the strategic intent (aim) or design for a differentiated brand image within a
specific target audience.
R
Royalties – rent-like payments made to the legal owner of a brand (or other asset) by those
who wish to make use of it, for example, to generate revenue.
Sales funnel – the visual representation, in the form of an inverted funnel or pyramid, of the
customer relationship with a brand, product or service ranging from “customer states” such as
awareness, to consideration, to trial, to repeat purchase, to adoption (e.g., habit or loyalty), or
other sales outcomes such as up-selling and cross-selling.
Trademark – a distinctive mark or feature particularly characteristic of or identified with a

person or thing.
Values – these describe your desired culture and can be “who values” that describe the
organisation’s character or spirit, often anchored in its heritage; what or “end” values that link
to the organisational purpose; and how or “means” values that are a code of behaviour that
defines the manner in which the organisation intends to accomplish its aims, the emphasised
norms, principles, or common set of beliefs.
Vision statement – based on the organisational purposes, this describes why a business is doing
what it is doing and where a well-executed mission will take them. Best done as an inspiring
image of a possible and desirable future state, in order to unite and inspire all stakeholders.
1.1
[MUSIC] [SOUND] So, you've probably seen one of these. It's called a Newton's cradle. It's a
very popular executive tool. It's a very simple principle. They're both of the same size, which is
important with the balance across them and it's really about the motion of one being
transferred to the next and that motion is being conserved as it moves across. What's
important is that the balls kind of conduct the energy and also that they're aligned. They're
lined up. They're the same size, so there is a balance as I said.
Play video starting at ::47 and follow transcript0:47
I tend to use this as a metaphor for the basic model, for this course, which I call the 3B's. It's
about business, brand and behavior. And in the beginning, we have the business. All of us are
running a business, whether we are sole-proprietors or in a commodity business selling
unbranded cocoa beans. Or if we're in services, financial services, for example.
Play video starting at :1:12 and follow transcript1:12
We're building a business and the idea behind the business is that at the other end of the
business are the customers. And we want to create values for these customers, so you can
think of this line that you'll see on the slides is about creating value. Superior value, then maybe
the customers could create themselves and what you want to do is of course, create more
value than it costs you to create those values, so that value for the customer. That's the basic
equation and that's the basic starting point for any business. Now if we think about the
behaviors that we have as part of this, I tend to think of, this is a funnel here and we can think
of a sales funnel that we have as part of any business. And when we think of a sales funnel,
what's interesting is we tend to represent the customer over time as part of a funnel. In the
beginning, we think of the total market that's available. How many were customers are even
aware that they have a need for products and services? How many of them are aware that we
have the solution? How many of those are considering us? How many of those have tried us,
have bought us and of adapted as in maybe bought us overtime? So, it's basically a make and
sell equations here. On the business side, we're making things. On the customer side, we're
trying to convert them from one level to the next. And Peter Drucker who's really, some call
him the father of management, talks about that the role of business is to create and to continue
to create customers. So, that's the traditional model that I'll be referring to in this MOOC. Now,
the role brands play in this model is quite simple. We think of the products and services of
having certain functional components and the brand is kind of another brick in the wall, it's
layered on top. Almost like the icing of the cake, if you will. It's something extra that you're
getting, giving to the consumer. So, you may have the same shirt. One has a a famous logo on it,
the other doesn't. The brand adds something extra. I said, it's the icing on the cake. It's another
brick in that value equation and the brand image lives in the minds of the customers. So you
can think about on the one hand, we offer brands as an identity. Maybe that logo or that brand
name and the image what this brand means, what the customer expects, what they've been
promised sits in the minds of customers. Now that's the traditional approach and there's
nothing wrong with the traditional approach except that as I'll talk about. It doesn't really
differentiate you or not by much anymore in todays environment and the word customer is
really in the way of things here. What I'll be focusing on is this term consumer. The consumer is
not this static recipient of an offering. We're not just buying something static, but it's a dynamic
journey, the customer's on. And that whole journey from learning about your offering, buying
it, using it, disposing it. That's really a sequence of experiences that you're staging, as a
business. And everything changes when you think about the customer, as a consumer who's on
this journey across a variety of experiences. And if you think about the behaviors of the
organization, it's not so much about selling or making. It's really about designing and delivering
differentiated experiences. Experiences, if you will, the customer journey traverses all these
different. This is staying business processes. That might be IT, operations, your services, on the
product side communications, but the customers on this journey and the key element here is
the element of time. And we provide value and we differentiate our brands with this element of
time, and things change when you approach business in that way. So if you think, what does it
take to do that? Well, the behaviors and the brand really plays a role in driving our people's
behaviors. They need to know. They need to understand what is the brand about, so that brand
image is also importantly represented in the minds of our people. Do they know what the brand
is about? Do they know what we want them to do and to delivery? So, brand in that sense is an
articulation of our business strategy. You can also think about the brand being something they
engage with. Does it motivate them? Do they buy into it? And critically, do they know how to
deliver the brand in a differentiated way at those moments that matter? So the brand is not just
the icing on the cake, it's something inside. It's the cake itself. It makes up everything that's
inside the cake. So it's not separate, it's not extra in that sense. And critically, going back to
Newton's cradle here. You can think of the role of management to kind of orchestrate, to align
the business to align business brand and behavior. So, if you think about this cradle here.
[SOUND] If these balls are not aligned or you've over invest in a business rather than the brand
or the customer's side when the balls of different size, if they don't match, what you're
customer actually expects if you take that metaphor to this stage, then this motion doesn't
work. At least it doesn't work quite, as well. So in terms of brand governance, it is not
something that marketing is engaged in at least not in isolation, but it's really about the whole
organization working together. That's the idea behind this MOOC and each of the different
modules will focus on different aspects of this cradle. [MUSIC]
1.2
Hello and welcome to this MOOC on brand management, aligning business, brand and
behavior. I am Nader Tavassoli, I am a Professor at London Business School and I know all of
you´re wondering, what is it with this coat hanger that is part of this course. I will tell you, but
you'll have to wait until the second week. So, what I will tell you today is about brands. We'll
start out by discussing what are brands, then we'll talk about how is the environment for
brands and for their success changing.
And then we'll think about new ways of building brands and what that means for you, and your
organization. So the first thing I'd like you to do is to think of a brand as quickly as possible
when I put up a very, very simple word in the English language. Now, I've done this across the
world and most people get it. So I know most of you will at least think of this brand, as one of
the first two or three brands that you can think of. Here's the word.
Now, did you get it? Many of you will have thought of the brand name Volvo. Some of you
would have thought of a brand like Safeway, because safe is part of the word Safeway. Some
would have thought of Chubb, because they make safes. But few of you will have thought of
brands like Renault even though Renault, some years ago has won many of the major safety
tests for cars. They even went out with a big advertising campaign saying, we are safe. Drive us,
but most people did not rewire their brains. Volvo simply owned the term safety in people's
minds. So, how do we think about that? Well, Volvo itself is the identity of the brand. It's the
brand name. It's a registered trademark. Attached to that registered trademark are a set of
associations. Some good, some not so good. So if we think of the brand image, it really is net
net what do these associations mean to you or more importantly, to their target customers? If
I'd said, Volvo and tell me what you think, some of you would've probably said, a bit boring
even though they design some of the most exciting cars today. That image has stuck with them
over decades.
So Volvo's challenge to build the brand is to protect safety for those consumers who care about
safety, as their key purchasing criterion. It's an image they've built overtime with various
advertisements, various images. And of course, they've invested in safety over the last 70 to 80
years. They've been consistently at the forefront of either inventing safety features or like the
ABS brakes, which they did not invent, they made part of the standard car earlier than others
did and it was still an optional feature for other cars. So if you think of a brand, it is the identity,
which is Volvo, its logo. The visual identity in many ways and its image this set of associations
attached to the brand. And marketers think of their job being to enhance the brand image by
negating negative associations and elevating positive ones. And of course, to protect the visual
identity of their brand as well.
So, next question is if this is what a brand is how has the competitive environment for brands
and branding changed? What's the landscape brands are now competing in? So to discuss that,
let me take you back in time, 1984. I'm an undergraduate student in economics and I'm
introduced at this point to a concept called perfect competition. Now, some of you have not
heard this concept before, so let me explain it to you. A perfectly competitive environment is
where competition is so fierce that the players in the industry are forced in terms of their
pricing down to basically their cost base. They don't make profit anymore. All the value that's
created goes to the consumer. Now, what are the conditions under which you have perfectly
competitive markets? One is you have a large number of sellers with low barriers to entry.
The other is you have perfect information and the third is you have homogenous or commidity-
like products. Now back in 1984, that seemed kind of ludicrous. And as you might imagine, as a
teenager, I was not paying much attention, but dial forward just a few decades. Do we have a
large number of sellers? Well, have a look at Google and think of a product like the iPhone. Lots
of retailers are selling the same product. So if you think about the retailer profits, they're
basically under huge pressure, because everybody's selling the same products. What about the
concept of perfect information, especially in a global environment? Today, you look at the
internet. You look at Google. You look at Metasearch engines like Kayak, which is a search
engine on top of search engines. You look at in the UK, we have moneysupermarket.com. You
can even go to a store and use your mobile phone, and scan in the barcode, and find a better
price elsewhere. And there are even some websites, like ratemyprofessor.com where you can
get information on the people that teach you. So, there's a lot more information consumers
have. Not only do they have more information today than they had yesterday, but they often
have more information than your very own salespeople at least about the products they are
interested in. So if I go and buy, let's say, a television. I might have done my search online
beforehand. I'll have selected two, three different models and I research them in depth. And
when I go to the store, I want the sales person to help me make my decision. Now of course,
they have dozens of TVs to deal with. They have lot of other electronics in their mind. So for
them, it's actually quite difficult to know more than I know, so that whole relationship in terms
of information has shifted. The customer often knows more than the company. And finally, let's
think about this idea of commodity like products. Homogeneous markets. Just this year at the
Oscars in 2015, we had Taylor Swift appear in a white jumpsuit as part of the Oscars. And the
brand called Nasty Gal, which sells this jumpsuit for $78, thought it was theirs and so did most
of the consumers and it sold out online within just a few hours or days maybe. Turns out, this
was actually a jumpsuit by Balmain, which sold for almost $2,000. They look so similar not even
the brand and Nasty Gal knew it was not one of their own. Now, look at other products in a
space. Go to any supermarket, look at hair care products. A lot of low-cost competitors,
basically, copy the trade dress of leading brands in order to look alike. Think of trying to get a
mortgage product or any kind of insurance product, I'd say.
Most of them are very, very much alike between competitors. And even think about the iconic
Apple brand in terms of the pad, in terms of the iPad. The lawyer when they were suing
Samsung went to the judge and showed the tablet from Samsung versus the pad from Apple
and said, look, they are so similar. They've copied everything we do. So competitive
benchmarking and competition has really commoditized industries, and I don't have to tell
those of you in business to business products how difficult it is to actually differentiate your
products from each other. Not only that, but your customers are driving this commoditization.
So in business to business, we've got strategic functions now, which are procurement and they
really are making products seem very similar. Why? Because they want to ask you to compete
on price. They're basically telling you as competitors, hey, you're the same as all these other
prequalified suppliers. Give me their best price.
So, the question is what role does a brand play in this environment? Does it really matter if the
same product comes from one brand versus the other? If the jumpsuit comes from Nasty Gal or
it comes from Balmain. If the oil comes from Shell or it comes from BP, does it really matter. So
what this MOOC is about is yes, it does matter. Let me just give you one more example to stress
this point. I asked you to name a brand when I said, safe and many of you will have said, Volvo.
I'm going to give you another brand now or not another brand, you're going to give me another
brand and the word is the following. Try and guess the brand.
Now most of you, if not all of you will have thought of Disney. Why? Well, in part, because
magical is part of their slogan for the brand. The Magic Kingdom, but now think about what
makes Disney so magical. So for those of you who've been lucky to visit a theme park, think of
all the different experiences. The brand is not really a product or even a service, it's an
experience that happens over a prolonged period of time. There are many, many touch points
and these touch points cut across all your different business silos. It can be the parking lot
attended. It can be the ticketing person. It can be an operator of a little choo, choo train where
you can listen to. It's a small world and you're in your own little magic bubble while you're
there. And you can think of even vendors who are constantly fixing and upgrading the theme
park, they have to disappear into the background. It's very, very difficult to create a magical
experience. It's not the same as commodity products. This is really the behavior of dozens, if
not hundreds of people that occur across this experience that you have.
So, what this this MOOC really is about is about this gap between the brand promise. Which
traditionally, marketing communications was about creating that promise. It's creating those
expectations and about the delivery of that promise. So the brand is not just the icing on the
cake, it's the cake itself. It's not an outcome, as in the brand image. It's really part of the
process itself. It's its inside the organization. It fuels innovation. It drives your people's behavior
who then deliver the costumer experience. Now, this is a real step change from the way we
think about branding before. Before, it was very controlled. It was the visual identity. I could
have advertisements, place them media, again, which were very controlled. Now it's about
internal to the organization, engaging with different business functions that marketing
traditionally has not engaged with with. Operations, human resources, IT.
And it's about those functions, delivering the brand at many various touch points across the
customer experience.
Our luck changes, the ways of work change for the company. The ways to measure brand
health changes. The way you measure success changes and that's really what this MOOC is
about.
1.3
[MUSIC]
I'm here with Bethany Koby, from Technology Will Save Us. So you started the company in
2012? >> Mm-hm. >> When we say the company, the brand, what is it that you started? What
is it that you sell? What is it that you start a movement around? >> So, Technology Will Save Us,
we make DIY kits that teach young people and families how to make things with technology.
The kits are all essentially vehicles for education, what we call 21st century skills, so soldering,
electronics, programming, design, problem-solving. But we design them around what we call
everyday themes, so gardening, cycling, gaming, music, things that kids are already excited
about. And we lead with the benefit. We lead with what you can do with the tech, not with the
tech. It just so happens that in order to make that thing, you have to learn programming, or you
have to learn about circuits, or you have to learn how to problem-solve something to actually
manifest this thing you want to make. >> Now, there's 18 people. Ive met some of them,
they're quite amazing people. How do you attract people like that to such a small startup? >> I
think there's a few things. One, we knew our representing and have a really strong mission and
purpose. I think you automatically attract people with values that really want to be a part of
building something that's inherently going to try and change the world in some capacity. So, we
still have our first employee. She eventually was sitting in my kitchen. She was called the
producer, and now she leads up learning partnerships which is pretty amazing. And I think that
the fact that we have already mission-driven business has helped us to attract really great kind
of people with similar values. I think also, because we're tapping into this area of learning and
education. We have a varied design approach to that. We also attract really creative people and
then, also because we're talking about young people, we attract people that care about young
people and their potential. So, I think we have a lot of ingredients that mainly attract some
really great people. And I think if you kind of stay true to that, you continue to do that as you
grow as an organization. >> So I've been tracking what you're saying, you've used the word do
or make about three times as often as the word learn. And looking around the table that some
of these products are not your own and looking at some of the things we have at our home, the
chemistry set, the electrical kit, they sort of seem to be collecting dust. What's the trick? I mean
those are obviously competitors in some sense to your business. >> Yeah, to some degree. I
mean I don't even think we look at those things as competitors because they don't even sit next
to us in the places that we're selling. Those things tend to sit in I would say slightly more old
school kind of scenarios. Not that we don't love muffins, we're actually selling muffins as well,
but a kind of a legacy of what technology was as opposed to where it's going. I think one of the
things we're really aware of is that, because we're leading with the benefit and not just the skill,
the acquisition of kind of tech skills, that our kits tend to be more in the world of
entertainment, and play, and toys, as opposed to just this kind of world of kind of hardcore
learning like education with a capital E. And I think we didn't invent the electronic kit. But I
think we're reframing it and we imagining it for a generation born with iPads, and tablets, and
things that a generation ago didn't have. And I think that requires a very different way of
looking at what kit is, how you actually use it, how much you use it, what the kind of
peripherals around it with the experiences, really. So, it's about an experience and not just
about a kit. >> So one of your colleagues just whipped this thing up here, which looks like a
soccer goal or a football goal. >> Yep. >> And, so this one of your electronic kits? >> Yeah, so
this is one of our, so our kits range from kind of younger age groups. So four is the youngest
age, so this is our electro dough kit. It's electronic play dough. So basically, you make dough in
your kitchen, and you make conductive dough. So we talk about what is electricity. Basically,
the dough contains salt and lemon, which creates a conductivity. We talk about why that works,
so basically bringing kind of science to your kitchen. But then you're using something as simple
as dough to basically make LEDs turn on, buzzer buzz, motors spin. You're basically making a
circuit.
And I think the fun thing about this is for quite frankly a lot of families and a lot of young
people, it's the first time they've ever seen an electronic component, may be the first time as a
family who talks about electricity, or the word conductivity.
>> You mention the word stories, what's a brand story and why would somebody share it? >>
So I think there's the story of our brand, of the Technology Will Save Us brand, which brings a
sense of delight and a real kind of lowering the barrier of entry to these things being accepted
by parents who otherwise wouldn't even consider that this as something they could do. I mean
we're selling LEDs and circuit boards in places like Selfridges.
That doesn't happen, but I think it's because we've created an ecosystem around
entertainment, excitement. It's all based on learning, but that really gives a sense of I can be
part of that, which I think is really important from a parent perspective. But I think there's the
individual kind of use stories, those the six-year-olds that are building synthesizers. There's the
little girls that are soldering and they realize that they're better solderers than their fathers.
There's the teachers that are struggling quite frankly to try and bring in technology that's
engaging and really empowering for young people and trying to tick boxes on the curriculum.
But, doing it in a way that actually means something to the young people. And I think that the
creativity that we see with teachers and parents is pretty amazing. Teachers have bought things
like our speaker and made whole six-week lessons out of that, where they took the kids to
recycling plants to get recycled material. Then that material becomes their exploration for their
speakers and they designed brands around their speakers to really say what the proposition is.
And they did a demo day for their entire class around why their speakers were the coolest
speakers. And that was all about a kind of a broad range of technical skills, but also them having
public speaking skills, being able to build narratives. So that teacher was able to kind of parrot
with a kind of cross-curricular approach. I think those stories are when we get really excited
that we've created kind of platforms for teachers, parents and kids to kind of invent a long tail
of stuff and have kind of adventures around tech. And I think those are the stories we get most
response [INAUDIBLE] >> [CROSSTALK] And those stories, I guess, bring meaning back to the
brand and go back to your purpose as well. >> Absolutely. >> Before i finish, let me ask you one
more question. Your own education was also based on kind of action-based or experiential
learning.
How did some of those ideas feed into the business and given that I'm trying to design the
MOOC around action-based learning, what would be your tips and recommendations? >> I did
my master's in responsibility in business practice and that was in action research foundation.
And I think in the world of startups and businesses and brand building, they use this word agile
a lot. And I think we were doing that without really even thinking that was what we were doing.
I mean it is what we were doing, but we can't help ourselves but test something, put it in the
world, get feedback, iterate on it, make it better. That's kind of so embedded in the way we do
things as makers and designers in this business that, yeah, I think that's just kind of the way we
approach solving problems and building our organization. I think the challenge when you're
that kind of iterative is then creating processes that help you to streamline that without taking
the magic out of the unexpected, because that's one of the things that's always exciting. You
don't have to have the answer. It's about putting it in the world to get some feedback to then
put it back into a loop of understanding. >> Well, great, well that's inspiring and it's an inspiring
story, and I hope I can take some of that on board for this MOOC as well. Thank you, Bethany.
We're here outside of Technology Will Save Us. And there's really three important messages
from this visit. One, it's about the experience. There's no value outside of the customer
experience. We'll come back to that. The second is it's learning by doing. It's not learning to do,
but learning by doing, and that's really the part where our homework comes in for this MOOC.
And the third part is the purpose-led business, and we'll come to that next. [MUSIC]
1.4
You're probably wondering about this nose. I don't sound very good speaking through this
nose, but that's not the point. I'm sure this is different from what you expected. But being
different is not the same as differentiation.
By differentiation and by brand differentiation, we're really talking about a difference that
matters. That matters to consumers. A difference that's relevant and it's a difference that
they're willing to pay for and they are willing to acquire. When we think about brands and the
purpose of brands, often communicated through things like slogans, it's good practice to
actually think about what these slogans or these brand positionings, their brand DNA, their
brand essence, whichever term you might give it. What does it actually mean? It's important for
a variety of reasons. One reason is, that if your own people don't understand what the brand
stands for
It will not affect their behavior, they won't know how to react. But the question then is, how
will their brand shine through? Will the customers actually know what you stand for. And I
thought I'd give you a couple of examples of slogans, which are not exactly the same as the
brand purpose, but they can get pretty close. One of them is from UPS. Until 2010 their slogan
was, what brown can do for you. Now that's a very internally focused slogan and in the first
video I talked about how brands used to be very much about visual identity. That's basically
taking the brown of UPS, United Parcel Service, and making it as part of their brand promise. It's
taking a color, and that's what the brand is about, the brand is a color. And that's not very
powerful. This year they re-branded their slogan to, united problem solvers.
Now, that might seem a bit of an odd term, it sounds bit of like a labor union but what they're
trying to signal is that the brand is about solving problems, not just logistical ones, but business
problems overall. So it's taking their acronym UPS and given it secondary meaning. Very much
like BP, which used to be known as British Petroleum, rebranded as Beyond Petroleum when
they focused on green energy. So it's a shift more towards the customer in terms of solutions
for UPS and towards the value to the environment for BP.
So let's think about this in action. For a brand which many of you will know, Pampers. These are
diapers or nappies depending on which market you might be in. So I just bought these last night
for the purposes of this video. I came home with them, and two children, my son looked at me
in horror. Thinking about dad you and mom. Well, no my daughter was quite excited that she
thought she'd get a sibling is just for the video and soon interest faded. Now, why did I bring up
UPS? If we go back to 2001, they were by then the largest single brand for P&G. It was a $3.4
billion for P&G. The problem was, it was shrinking. And it was a drag on the earnings of P&G
overall. And it was about to be, well, activists were asking for them to spin it off.
Dial forward 10 years to 2010 and it became a $10 billion dollar brand. Entirely through organic
growth. It's a story told by Jim Stengel in a book that I recommended as part of this MOOC. It's
called Grow. And it's one of the chapters where he talks about the story. It's a story I also know
from Saatchi and Saatchi which was the advertising agency that accompanied Jim and his team
on this journey. So what did they do in order to gain more relevance for the brand? They did
something very simple.
They took a deep dive into the lives of their customers. They tried to figure out what drives
mothers? Not just to buy diapers, but in general. Especially first-time mothers because that's
when they make their decision about diapers. And they typically then stay brand-loyal. Is it just
about price where Huggies had really enjoyed market leadership? As a matter of fact, Huggies
had become the number one brand in the US, the home market for Pampers, which was very,
very painful.
It's not just about that. If you think about being a mother or a parent, it's about babies' health.
Babies' development. That was the key consumer insight. And the question then was, how do I
make these diapers relevant to baby development?
So if you look at this here, most of these diapers, for them and their competition, it's all about
dryness. Now how does dryness help baby development? Well, it turns out, and Pampers did
these studies, it helps baby's sleep. So if baby sleeps, they got the little sleeping rabbit here,if
baby sleeps, that's when the baby develops it's mind and muscles. And of course, the parents
get a bit of extra rest as well. And they turned that into the foundation of their brand. They
went away from dryness to better sleep. And that was a fundamental change. It was a change
that did not just affect the slogan, if you will.
Before the change Pampers was a very male dominated engineering culture. People in white
frocks focusing on dryness and dryness metrics, focusing on product attributes. There were very
few women comparatively speaking to other P&G brands working for Pampers, which is a bit
surprising. As part of this change, Jim and his team changed fundamentally everything about
Pampers. The new headquarters became more baby and mother friendly, the colors were pink
and apricot and the parking spaces close to the building were reserved for expecting mothers.
The key metrics by which to evaluate the quality of the products went from dryness to better
sleep. The values of the brand were aligned with the values of a parent. Literally everything
changed, including something that was almost sacrosanct to a P&G, which were the two year
rotations that the staff went through going from one brand to the other. What they realized is
even though it was a packaged product, they had to build the brand from the inside out. They
hired people who had a passion for babies. Even if you're in finance or if you're the accountant,
if you didn't have a passion for babies, there are lots of other brands you might qualify for. But
not so much Pampers. They also aligned the corporate social responsibility. Working with
UNICEF about baby development, keeping babies healthy. That became the fundamental, and
core purpose of the brand that also allowed them to move away from just dryness and diapers.
They moved into baby development. Into wipes. Into products where baby had its first soap.
Where they could wipe themselves for the first time. Literally, anything that had to do with
baby development was now a fair territory for Pampers to compete in.
That also built a very different relationship with mothers. I mean, mothers don't want to talk
about dryness with a brand. That's just a product attribute. But Pampers village, which is a new
website they developed, they can now have a conversation with mothers. Another core insight
was that mothers thought of developmental stages. So you can engage with mothers before
baby was born, when baby was born, when it was a toddler, and so on. They built a true
relationship over time with the mothers. Which also fueled the development of different stages
of diapers. Training diapers and so forth. So everything changed about Pampers, and it was
driven by core consumer insight, which became the purpose of the brand that motivated the
brand from the inside out, and even a packaged good category, it made it a huge success. So
strong that it actually added to Huggies pulling out of European markets. With their lower cost
diaper because Pampers had taken over that space. [MUSIC]
1.5
Peter Drucker who was voted as the Management Thinker of the Century had a saying which
said, the customer rarely buys what the business thinks it sells him.
Many brands don't actually know what they're selling and to get to the core purpose of the
brand really means to understand the core driver of your customer's behavior. So let me give
you a couple of other examples in addition to Pampers. From different sectors. The next one is
actually from financial services, and this is a story about Ameriprise. Ameriprise is a financial
planner in the United States, and they deal with things like pension products, for example. And
their target customer are the wealthy Baby Boomers, so this is a very wealthy clientele, and the
first research they did with them, it was really to understand what retirement means to these
wealthy Baby Boomers. And when they asked them, they got these traditional notions of
retirement back. Two people on a porch, looking at the sunset. They could enjoy the later years
of their lives together. But, it didn't quite smell right. It didn't quite smell right, and they
realized they were doing the research in the wrong way. And, to get to the core sort of purpose
of the brand, you really have to sometimes get to the more emotional side of customers and
using language is often not that easy. In this case they did, but they asked the question slightly
differently. They simply asked them to keep on projecting themselves into the future.
From where they are now into the future and when they did that they realized
that customers were not worried about their retirement in any sense. What they had were big
dreams. They wanted to start a business when the traditional time of retirement came or they
wanted to go back to school. Or they wanted to give back to society in terms of philanthropy or
they wanted to travel the world.
Now, that was a deep customer insight and it really changed everything that Ameriprise did. It
changed their products because most of the products in the space are annuities, they kick in
when you retire traditionally maybe around 65 and then you get a steady payment over time.
But these big dreams, did not have the format of a steady payment over time. They came with a
a big payment at the moment of retirement. So they had to invent products. They also had to
change the way the financial wealth planners interacted with these customers. They were not
used to speaking to their customers about their dreams. So they created this thing called a
dream book, where the customers, typically a couple, could fill out their dreams into the future,
which then provided a basis for the financial planner to engage with their customers.
Very powerful change for them. And I'll end with a quick example. In business-to-business we
often forget that customers are not buying products. They're buying solutions, and that's been
a big shift in business for many years. And I'll give you one example, which is Hilti. Where their
business is fundamentally changed from selling tools, like drills and other power tools, to
actually managing the tools for the customers. The customers, not only weren't they buying
tools, but solutions. They also didn't want these tools to sit on their balance sheet. They didn't
know how to manage these tools and, Hilty, because they provided these tools to so many
customers, could invent different solutions, different services around this notion of tools for
hire. So fundamentally changed the business model of Hilty and provide a deeper and more
purposeful value to customers. So if you think of brand purpose it starts with deep customer
insight and it then means building a business around that deep customer insight that provides
better value to customers. And on a final note I should say when your employees understand
the purpose you're engaged in, they're also more motivated. A deep purpose motivates your
employees to be more productive, more engaged, and to provide more value to your
customers. This has been shown in study after study.
Just as a couple of examples, Metronic invites in patients for the company's holiday parties,
where patients talk about the difference their technology has made into affecting their lives,
into saving their lives. John Deere brings in farmers into their factories where they talk to, they
call this a golden key experience, where these farmers have tours of the factory and the
employees on the assembly line learn about the difference they have made in these farmers
lives. All of this has been shown to fuel productivity far more than any inspirational kind of
speech that might have been given by the CO.
So the brand purpose, is what connects the brand to the customer, but it also connects the
employees to the customer, through the brand
1.6
[MUSIC] I'm here at M&C Saatchi with David Kershaw, the global CO of the group. I'd like to ask
you a few questions about your view on branding, and maybe M&C Saatchi's view on branding.
And also over the nearly four decades of your career. Some of the changes you've seen. >>
Thanks for reminding me. >> [LAUGH] >> I think it's interesting. I think some fundamentals
actually have not changed. I think they are immutable truants of branding, essentially brands
are there and they're differentiated to have a purpose. And that purpose is clearly for
consumers to meet their needs and in doing so consumers will buy more of them, buy more
than the expensive brand and also the reasons why marketing exists. And I think that those
principals have not changed that much. However, what has radically changed, and particularly
say in the last ten years, has been the way that that brand is communicated to consumers, and
also the speed with which those brands come in and out of fashion. Say, we used to talk about
the brand life cycle, and the brand life cycle when I first started It could be 50 years. Now
brands can be become irrelevant. Be overtaken. Get out of fashion at an amazing speed. At a
matter of years rather than decades. So it's sort of like two speeds. I think the philosophy of
brands remains constant. I think the practicalities of managing brands is unrecognizable. >>
What would be an example? You mentioned brand purpose and that you start with a consumer
insight and you work backwards. What are some examples, maybe in different industries that
you might think of? >> In an industry I remember we did for a Glaxo SmithKline when they
came together and they wanted a noble purpose, as he says. And this is very much to
stakeholders, it wasn't really to consumers. It was to a whole array of stakeholders,
governments to regulators to shareholders, etcetera. And we tend to here, we use what we call
three box thinking. Which is basically what I was referring to earlier. We will find what we call a
simple university recognizable truth about the target audience. Something that the target
audience will always know unquestionably, and overwhelmingly believe. And then we'll find a
brand truth. And then we'll put those together for a purpose. So, in the case of Glaxo
SmithKlein.
The consumer truth was, the target truth, was that everybody is frightened of disease. Hard to
argue with.
The brand truth was that Glaxo SmithKline spends more on R&D in that field than any other
company in the world.
And the noble purpose of the company, you don't have to be Einstein at this point, was that no
one fights disease more than Glaxo SmithKlein. And so we fight disease became their rallying
cry. And often with companies, I'm sure you've seen it, that particularly for corporate brands,
you can get stuck in a mire of values, and missions, and objectives. It's very hard for people and
huge organizations and all their stakeholders to really understand what you're about. If you can
put that in to three words, we fight disease, then it's a great way of galvanizing those
stakeholders together. And as you also might know the other sort of mantra of this company is
beautiful simplicity of thought. And we are passionate believers that if you are going to make a
brand, stand for something. And for people to remember it and for it to stick, you have to distill
it and distill it and distill. And get it down to absolutely, brutally simple communication. Like we
fight disease. Because it's always easy with a brand to say six things.
It's getting it down to one, because you always, the dreaded word is and. If you get a brand
brief, as soon as you see the word and, you start to panic that it's going to difficult to get really
concise communication, particularly in the brand truth. In that second box I talked about,
because companies and brands quite rightly want to talk. They're very proud of lots of aspects.
They'll talk about the ingredients, they'll talk about the quality, they'll talk about sustainability.
There's so much. And of course, the more things you put in, the less likely you are to be able to
communicate effectively.
>> And assume the changing environment that you mentioned with the fragmentation of the
media landscape, having a brutally simple thought also leads to more simplicity and sort of
consistency, I guess. >> It's the glue that holds it together. Because I think, again, if I go back to
my grainy nostalgic days when I first came into the industry. You could run maybe two weeks'
worth of TV and you'd get up to 80% coverage of the population and you'd have a big outdoor
campaign. But I mean you didn't have to spend that much money or to be a brilliant
communication media planner to get to everyone with sufficient frequency to have impact with
your message. Well, now trying to put together coverage, as you know, it's like a mosaic.
There's hundreds of pieces you've got to put together, through traditional media, digital media,
social media. And so, each of those media will require a different length, so you might be
talking about a 30 second TV commercial. Might be talking about a ten minute piece of content
that sits on someone's Facebook page. So there's even more need to have some glue, that
brand glue, that purpose which will hold all those different formats together. Because the
consumer is seeing these thing in lot's of different places, at lots of different times, in lots of
different formats. Say the chance of them having a coherent view on what that brands about,
it's a lot tougher to pull off. >> And you mention different stakeholders in terms of
communication, to what degree are you involved in internal communications of the brand? >>
A lot. A lot. I mean we, we can't be working on a brief, I would say four, but it's a good example.
It's very kind of right for a very, very well known investment bank and yes, they want to
influence people that they seek to advise on, help raise capital, but interestingly enough the
first thing that they talked about in the brief and which we spent huge amount of time. Was
how we could unite the internal audiences. Because, it's like investment banks. There might be
people taking wealth management, there might be bond traders, their advisory people, they've
all got very, very different view, of what that brand is about, and what their role is in it. And so
having, getting back to the glue word, being able to make people in a very diverse organization,
with very different motives operate to the same drum beat of what that brand and what that
company is about, is extraordinarily important. Particularly in service businesses, where you're
asking people to behave in a certain way. It's a lot tougher than saying each chocolate bar is
going to deliver that brand value.
I really I cut my teeth for many years on British Airways which we looked after for probably 25
years or so. I worked on it for about 15 of those. That was fascinating because you had
genuinely trying to effect people's behavior and the great insight of Colin Marshall, when he
became Chief Executive of British Airways all those years ago, was that he did not want to do
anything externally, he got to communicate with people, of course you hear that all the time
now, but this was back in the mid 80's. This was a revolutionary thought, so I think in the
service business you've got to go inside out rather than outside in when it comes to establishing
the brand and brand consistency. And those two words should go together. But it's obviously a
much tougher ask in the service business than the product business. >> David, you took some
time out and you got your degree at London Business School in 1982. How did a business
degree play into your career and how did it affect you as an advertising man. >> Well I'll tell you
how I got into it. Because that was interesting, that really was the part that I was after. Was
that I had come out of the university where I studied politics, and got into graduate school in
the agency. And then after some three years of photocopying, preparing all that work,
production estimates. I thought I don't really understand what the client's businesses are
about.
And so it was a matter of confidence that I could have those conversations, because it did
exactly that. It gave me an understanding of business, and not just how to make adverts. So I
think from learning basically how to read a set of accounts, to marketing strategy to business
strategy, to organizational behavior. I mean all these things and interestingly enough some of
them at the time you thought well with is not particularly interesting or relevant. And then of
course when I came back, I was fortunate enough to sort of get up the management ladder.
And when I became the CO of Sachi in the UK, which was 1990, so eight years after I'd left LDS.
It was amazing how many of those things kicked in, because finally I wasn't just talking to
clients about their business. I was thinking about how we ran our business. And invaluable. I've
still got my file of NBA names. And occasionally I'll just go back, that's a long, long time ago, so it
played a huge part in my own personal development. And long may it last.
>> Thank you for your time David. >> Thanks very much. [MUSIC]
1.7 3E's (part 1)
I've already mentioned the importance of the consumer experience, and I thought I would put
this idea of value creation into its historical context. And what I'd like to introduce is a very
simple 3Es I call them. Efficiency, Effectiveness and Experience. And the idea is that you need all
three of them in order to be a successful business to be a successful enterprise, but increasingly
it's the experience part that differentiates you. It's increasingly difficult to have an efficiency
advantage or even an effectiveness advantage. And just to give you an idea of how we value
things or how we perceive quality or beauty or whatever it might be, have a look at this chap
here. This is Joshua Bell. Joshua Bell is a famous violinist. And in this image, he is playing his
Stradivari from 1713, it cost 3.5 million dollars. He bought it himself, and he's embossed in
Symphony Hall. The auditorium is packed with 1,000 people and even the cheap seats went for
about $100 per seat. And he's playing some of the most complex music, some by Bach, Chacon.
And the audience is hushed, he's very particular about it being quiet. And at the end of the
performance, the whole auditorium erupts into applause. Now, the Washington Post decided
to run an experiment. They asked themselves, well, what would happen if we took the same
product, if you will, and put it into a different context. And they went into a metro station, a
subway station in Washington DC which has great acoustics, and he dressed up as a busker, just
some musician on the street trying to earn a little bit of money. And he's playing with the same
Stradivari. There is security around. He's playing the same pieces, and they decided to wait for
about 1000 people to pass through this hall. This is in the morning during the week. And you
can imagine what happened.
A crowd gathered everybody was hushed. They were mesmerized and they broke into applause
at the end.
Not quite. Take a look at what happened. So as you saw, not much happened at all.
Few people stopped, few people gave money. He made something like $32.17, which means
people gave him pennies for his performance. The reason he made $32 in the first place is
because one woman gave him $20. She was interviewed afterwards, like many of the other
people were. And they asked, why did you give him $20? And she said, I think it was Joshua
Bell.
I didn't know he had to do this to make money. So it's quite a humorous moment. But now ask
yourself, what was different in this situation?
Well everything was different and maybe it wasn't the right audience. They wouldn't have paid
the money in the first place. It was not the right time. They weren't in the right state of mind.
They weren't ready, they weren't expecting, they didn't desire to hear this music. And they
couldn't judge it without the branding, without the context, without the conductor, the stage,
the auditorium, the advertising and maybe the ticket prices they paid in the first place also lead
them to appreciate the piece more.
So it's the entire experience that's different between the Boston Symphony Hall and the Metro
Station. And that's what the experience is about, it's not just the product. If we put it in a
different place it's not the same.
And I'll show you this image here is one I took in the underground here in London, which was
quite a different experience. A crowd had gathered, what you're seeing is the busker is actually
taking a picture of the crowd to show his girlfriend. because he's so excited a crowd had
gathered, it was at 10:30 at night on a Thursday, I'd comeback from the theater with my wife,
and some women started singing while he was playing his guitar. Somebody was sort of playing
on his suitcase like it was a drum. It was one of those London moments which was magical in
some sense. The quality of the product? Not so great. The experience? Fantastic. So let's go on
a historical journey when it comes to the customer experience. And if we think about the three
B model I talked about before, business, brand, and behavior, let's sort of allocate the three E's
to this model. It's not a perfect match, but just stick with me for a moment.
If we go back in time from around the Industrial Revolution to maybe 1950, of 50, 60 years. If
you will. The whole idea about business was efficiency. It was about having access to the
supply. It was controlling supply. Demand was far in excess of supply at that time. And if you
think about some of the products from that time, the Ford Model T, The famous car which
showed up in one color and it was black. The big invention of the time was the assembly line.
And the assembly line was all about, if you think about the efficiency aspect. If you think about
trying to get this level of output, can I do it with less input?
That's basically the challenge of that time. And people like Frederick Taylor, who is one of the
fathers of modern scientific management, it was all about the ergonomics trying to, you know,
reduce waste in that sense. And by reducing waste, but keeping the value the same, that's how
you increased, or the output the same, that's how you increased the value at the end of the
day. Efficiency is alive and well today. In a recent report from PWC, when they interviewed
CEOs, they asked them what were some of the major projects you're launching. 70% of them
said they were launching a major cost cutting Initiative.
And this is in the midst or on the back, if you will, of a global recession. Where they probably
were doing the same cost cutting even the year before. So there is still a strong focus.
Now, efficiency experts are also amazing branding experts. Here is efficiency in a variety of
language. 1, 6, Sigma, that's greek, right? That's a cost saving initiative at least in practice.
The Japanese characters you see there is spelled kaizen another way we've branded what
basically is a cost cutting initiative. TQM, total quality management again Results in many cost
cutting initiatives. What's interesting, we don't have the same focus on branding processes
when it comes to effectiveness or experience, so keep that in mind.
Now if you think about, does cost cutting actually work? There's a recent report in the Harvard
Business Review by my colleague Jules Goddard who talked about this as well. And what they
looked at were basically companies within their sector with below average costs, versus those
who had above average costs. Now it turns out that very few of the companies with below
average costs had above average profits.
But those with above average costs had above average profits. At least, if you did have above
average profits, it was typically because you also invested in higher costs. So, when it comes to
cost cutting, it's okay to cut the bad costs.
But be careful not to cut the good costs. [MUSIC]
1.8 3E's (part 2)
Now, moving on to the concept of effectiveness, what we thought of as the assembly line or the
supply chain, if you think at the industry level, the focus shifted towards value creation. And
Michael Porter of Harvard Business School introduced this concept of the value chain. Now
remember, efficiency was all about having a certain level of output with less input.
The value chain is quite different. It says, well, what if I have these inputs?
Can I get more out of them? Both of them lead to productivity gains, but they have a
fundamental different approach. So if you think about the people side of things, for example,
one is about, can I do the same with fewer people? Can I basically fire people?
Or from a value perspective effectiveness, can I train them? Can I develop them so I can get
more out of them? So things have fundamentally shifted in this model. This idea of
effectiveness at the product level, we can look at something like a razor. Think of the original
safety razor by Gillette. It was a single blade and the idea was that you wouldn't cut yourself.
The next big innovation was the second blade. Now, if you think about what the two blades do,
well, you can think about the hair being inside, here is under the skin. The first blade gently lifts
the hair out of the follicle. The second one swoops in and cuts it off. And then the hair
disappears under the surface of the skin, so you have a baby smooth face. Now, the next big
innovation of Gillette was the MACH3. Three blades. You might ask yourself, what's the third
blade going to do?
Now, it might not matter. Maybe it exfoliates your skin, because within six months, the
competition came in with four blades.
Play video starting at :2: and follow transcript2:00
And of course, a few years later, Gillette came out with the Fusion which has five blades. As far
as I know, they're already working on the MACH14 with 14 blades.
So you can think of this idea of effectiveness, this race in terms of performance. But all of these
races kind of have diminishing returns. The second blade add a lot over the first blade, the third
just a little bit less, and so forth. If we add more and more blades, maybe you even have
diminishing returns. And industry after industry, whether it's your computers or your
telephones, whatever it might be, we don't compete on these functional benefits anymore.
Most people don't even know what the RAM is on their PCs anymore.
So think about one of the leaders in this space, Apple. Did you choose your Apple product,
whether it's a computer or whether it's a phone based on its quality? Did it have a better
battery life, higher screen resolution, a better camera? My guess is you didn't. Otherwise, you
might have chosen an HTC or a Samsung. Now, if you think about that moment of choice, the
moment of purchasing the product, go back to this concept of value chain. What we actually
see in the value chain is the absence of a very, very critical component, and that's the
consumer.
We have the customer who is just at the tip of that value chain. They're paying good money for
what you have created, but they're not part of the value creation process at all. If we think
about values created within the value chain. And that's the real focus here of experience. My
contention is there is no value created outside of the customer experience, outside of the
consumer experience. Let's go back to the value chain.
You'll notice something peculiar. Value is created entirely within on the production side of
things.
At the very tip of that value chain is the customer. They're paying money for the value you
created, but from the customers perspective, this is not value at all at this stage. All it is is cost,
it's something they paid for.
The value is actually only created through use, and that's not even the customer, that's the
consumer.
And in many ways, that's the magic of Apple. What Apple has done is they've tried to get you to
use your products as much as possible. If you think of iTunes for example, iTunes really helped
sell iPods. iPods had been around for several years before they took off. And it was once iTunes
that you could buy your music in easier ways, you could manage it in easier ways, and listen to
it in creative ways. That's when the hardware sold much more, because they figured out the
entire consumer experience. It wasn't just the hardware, their product, it was the consumer
experience. And when Apple test their product, if you think about what quality metrics do we
have on the customer experience, we don't have many. How do you test quality? It's probably
something functional, something you can measure very easily, but do you actually measure
what the customer experience is? My guess is not.
Take a look at Apple, go to their website, maybe you have access to their stores. And you'll see
that everything they do is about lowering the barrier to the consumer experience. They make
everything easier, things are simple, the products are integrated. If you go to their website,
they have videos on how to actually use these things. If you go into their stores, they have a
genius bar where they can give you advice. They have a whole stage here in the store in London
where they have demonstrations every afternoon on how to use your photography software,
your music software. They have people talking about how to write books and use your editing
software. It's all about allowing you to be creative. So value is created within the consumer, not
within the product. The product allows you to release the value if you will.
And that's really the magic of the Apple formula.
Now, I gave you some examples of how you could find out about Apple products in the store,
the demonstration of the software, the help you might get. That is the customer journey.
There's many, many moments that matter, and each one of those is its little experience in and
of itself. And the big shift is, that what we consider value creation within the industry is a cost
for the consumer, until the value is released through use. And what we can do from a branding
perspective is to increase the perceived value of the products by demonstrating, by
documenting what the consumers actually experienced. Think about buying an energy efficient
light bulb.
To what degree can we demonstrate to the consumer maybe a few months in that they have
been saving on their energy bill? In a business to business setting, what if we are selling a water
saving device?
Do we actually measure and document the value we've provided?
Because then the customer might actually recognize the value you've provided and purchased
you again or engage in word of mouth. One of the leaders in this space is SKF and they sell, for
example, ball bearings at quite a premium, maybe 30% to the competition. And they realized
that many procurement functions are focused on the landed costs. Meaning, what did I pay for
the service, for the product, for the ball bearings in this case. But actually, the value you're
providing to the customer is the total cost of ownership, or the reduction in the total cost of
ownership. So, SKF have developed sales tools where they can demonstrate that value at the
moment of sale, track the value over time, and they've even aligned their pricing so they
engage in a risk sharing agreement. They will only get paid a certain amount if they deliver on
what they promised. And that's the entire and radical shift we see going from efficiency to
effectiveness, to the experience. At the business side, if it's just about efficiency, what you're
really doing is you're assembling commodity like products. They're being sold in markets. At the
brand level, you're designing products for customers, or you're delivering services to clients.
Whereas experiences, you're really staging these experiences to consumers. So the questions
I'd like us to end this first module with are, thinking about, well, what dominates your thinking
in your industry today? Are you more efficiency focused, more effectiveness focused, or more
experience focused? How much effort and attention is the top management paying to each of
these three Es? And then take us over, look at you and your competition. Do you actually have
efficiency advantages? If you do, are you actually trading on a lower price? Is that your
differential advantage? Or are you pretty much the same as your competitors on the functional,
the basic functional benefits that are being offered? And maybe whether you know it or not,
whether you're acting on or not, the experience is actually what is differentiating you in terms
of the competition. So as we go towards next module, what we're really going to think about, if
it really is about experience, how do I design and deliver experiences? How is that a different
capacity, a different capability from designing products and services? My contention is it's a
radical change in the way you design and deliver value to your consumers.

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Brand equity – the commercial value a brand provides to a firm through its effects on the

attitudes and behaviours of its stakeholders.

Consumer – a person or entity that makes use of a good or service.

Customer – a person or entity that purchases goods or services.

Customer-based brand equity – “the differential effect of brand knowledge on consumer

Customer/consumer experience – a customer’s and/or consumer’s holistic perception of their

Differentiation – relevant associations or the net value of customer perceptions of a brand,

Experience – the perceptions of an event, episode or encounter that leave an impression.

Intangible asset – a non-physical asset such as a patent, trademark, or goodwill recognized in

Trademark – a distinctive mark or feature particularly characteristic of or identified with a

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