Despite the uncertainty of the global pandemic and recessionary outlook, M&A activity continues to surge across all industries, with a record $2.9 trillion in transactions in 2021, and 2022 is expected to be even bigger. While not every deal requires naming, the large transformation deals do. In these cases, a new name is the most visible, symbolic and longest-lasting M&A decision. It’s an opportunity to start fresh and signal unity to employees and customers alike. But shockingly, many companies still get it wrong. 

Getting to a great name in these fast-paced environments requires significant care and attention. What sometimes starts out as “let’s brainstorm and come up with something cool,” can often turn into a highly emotional, intensely subjective process that can create leadership friction and decision-making paralysis, ultimately delaying a brand’s launch.  

Following are five best practices to get M&A naming right.

1. M&A naming is not a democracy. 

Since naming a new enterprise is something many executives experience just once in their careers, many leaders don’t want to make the decision alone. So, they invite stakeholders from every angle to weigh in. However, there will likely already be numerous decision-making voices at the table—including multiple CEOs, private equity partners, other investors or board members. In these multi-stakeholder environments, we believe the decision-making body should be kept to the right balance of as few executives as possible, but as many as necessary, with focused participation early in the process (yes, even CEOs).  

Despite the perception that naming is a fun, creative exercise, the reality is that it’s a high-stakes, emotional decision that will carry your organization into the next several years, and maybe even the next several decades. With this in mind, getting lean on the decision-making team, and ensuring they’re active participants from the very beginning, will lead to a more successful outcome.   

We also recommend that clients resist the temptation to test name candidates with employees—while inclusion is a noble goal, this step gives employees a voice in the decision, rather than treating them as an audience we want to inspire with our ultimate reveal.  

2. The name you want is probably taken, but there’s a better name out there that isn’t. 

This one is a tough pill to swallow. But with most M&A deals being highly global, getting a name to clear across many trademark classes and geographies requires deep, divergent thinking. Yes, ‘Mosaic’ is taken. No, you cannot have the name ‘Fountain’. ‘Iris’ does indeed tell an intuitive metaphorical story, but four other organizations already beat you to it!  

While we wish it was easy enough to just call the U.S. Patent and Trademark Office and ask for an exception, unfortunately, it’s not. But by exhausting creative exploration, you can uncover an adjacent or new idea that tells an even richer story. Sometimes that means you’ll get lucky with a simple, metaphorical real word that isn’t yet taken. Sometimes it’s about coining a gettable, “sticky” new word, and sometimes it takes getting comfortable with an idea that is more abstract—and more ownable. With an estimated 213 million companies in the world, naming isn’t just a creative game. It’s also a numbers game. And arriving at an answer that is inspired, strategic and viable requires diligence, objectivity and a willingness to push past your comfort zone. 

3. Every name has varying degrees of legal risk—but not every risk is a deal breaker.  

To add on to point #2, almost any name you consider will have some degree of risk associated. No name is ever given an ‘all clear,’ so getting legal involved early on can help you understand what degree of risk your organization is willing to take on, which will then influence the types of names explored. What’s more, different legal teams may employ different legal strategies to pursue or secure a name, from acquiring a mark to petitioning for co-usage with another party.  

When Google launched Alphabet, even an enterprise of their size and influence couldn’t clear the pure URL of alphabet.com or secure the pure ‘alphabet’ social handles, which were currently being used by other organizations with the same name, including a division of BMW. But Google believed Alphabet was the name that best represented the story they wanted to tell, so they went to market understanding there were legal risks associated with that name and launched with another URL—the very clever www.abc.xyz. All to say, legal baggage associated with your favorite names can be investigated and often worked around, as long as you have legal embedded in your process from the very beginning. 

4. Fast-paced M&A deadlines can work in favor of a successful naming outcome.  

With all the critical decision points and process gates leading to deal closings and ultimately a new brand launch, getting a name identified, cleared, designed and launched can feel like a daunting process. At Prophet, we believe sticking to an objective process and adhering to a thoughtful naming brief as the source of truth enables teams to use time pressure in a way that works in their favor. Having less time can actually be the forcing function teams need to evaluate ideas objectively, leave emotion and biases at the door and make quick, but meaningful decisions. When there is no time to second guess or decide by consensus, teams often trust their guts and arrive at impactful answers. 

5. And finally, remember that a name is a powerful asset—but not the only asset. 

Although we always say your name is your most visible asset, it is not your only asset. This is especially important in M&A environments, where there are multiple parties coming together under a shared value proposition that is oftentimes broader and more aspirational than their previous strategies or stories. While the name can certainly signal part of this new experience, it cannot tell the complete story on its own. We help clients see their name in the context of other strategic levers, like the promise they make to their customers, their visual language, or the experiences they aim to create.  

Buckle up, brand marketers. While a recession is by no means certain, it’s clear that the markets are unsettled. As consumers cut back on their spending, layoffs start and revenues slow, jittery leadership will begin to look for ways to slash spending. Brand marketing budgets are often high on the list. 

However, that’s a mistake. A well-built portfolio of brands is critical in a recession–or even just a downturn. Healthy brands generate more trust, they’re more in demand and have more resilience and strong brands retain customers, even in the face of lower-priced alternatives. In fact, in past downturns, companies that held marketing budgets steady or increased them bounced back best, reports the Harvard Business Review. 

For example, Reckitt Benckiser increased marketing spending by 25% during the 2008 financial crisis, as rivals trimmed their budgets. With a larger share of voice, the UK-based consumer goods company saw revenues gain 8%, and profits rose 14%. Most of its competitors posted profit declines of 10% or more. 

The 2021 Prophet Brand Relevance Index® (BRI), which was fielded in late 2020 during the pandemic and a period of high market uncertainty, proved this point. . As obvious as it seems in hindsight, consumers flock to names they trust in times of instability. They’re less inclined to take risks, and trust is significant to them. 

In the 2021 BRI, the average relevance score of the top brands jumped 5%. In other words, in a time of uncertainty, these leading brands became more relevant than they had been in times of relative calm.  

Strong brands allow companies to justify and maintain pricing power because consumers understand the value equation. Products from companies like Apple, KitchenAid, Dyson, Bose and USAA on the whole cost more than competitors. But because consumers appreciate their value, they are willing to pay more. 

That advantage holds for B2B companies as well. When selling through intermediaries, B2B firms that deliver greater value can retain a negotiation advantage with channel partners. Weak brands have less leverage and are easier to squeeze. 

An economic downturn may mean fewer people are spending on a given category, reducing the size of the pie. But strong brands get to take a bigger bite. Here are three ways to protect and build brand value, even in stormy economic periods: 

1. Strengthen the Brand’s Foundation 

Strong brands, often with a years-long history of consistent investment, already have a robust foundation. Brand equity stems from clarity of purpose. These brands know what they promise and how to deliver on that promise in the market. That clarity of purpose ensures an efficient spending of dollars. 

Even companies that believe they’ve adequately defined their brand’s purpose need to take a closer look, finding new ways to sharpen, deepen and extend that focus. Purpose–the reason a brand exists in the world– should be clear internally. And it should shine through to customers in every offer, channel and message. 

This is also a great opportunity to lean into the stakeholder networks. With a well-defined purpose, it’s easier to ask key stakeholders–customers, employees, investors, influencers and community members– to step in and act as brand ambassadors. They can amplify a brand’s voice and purpose. Because trust matters so much more right now, word-of-mouth endorsements carry even more resonance. 

2. Make Sure the Story of Value is Clear  

While this is most evident in B2B marketing, it’s just as important when dealing with consumers. People are worried about money, especially with inflation and interest rates rising. There’s an increased focus on the value equation of their purchases. They want to understand all the trade-offs they make between price and quality.  

Customers have a lower tolerance for confusion. This is a moment for marketers to be exquisitely clear about the value in each part of their portfolio. It’s too much to expect people to confront a number of brands and sub-brands and understand why they are priced or marketed differently. Spell out precisely what they get by trading up or down within the portfolio.  

3. Stay Nimble, Rebalancing Brand and Demand Investments 

Agility is important. Marketers should be having earnest internal debates about how and whether to rebalance spending between brand and demand marketing.  

Brand marketers will–and should–argue it’s an important time to continue building trust and equity. Demand marketers, as well as financial leaders watching revenue trends most closely, will want to focus more on driving immediate sales. Our latest research, Brand and Demand Marketing: A Love Story shows that brand and demand marketers must find ways to work together – and those that do are able to deliver better outcomes that are tied to the overall business goals. Everyone wants to ensure they are the brand chosen at the end of people’s purchase decision. 

We’re betting that a year from now, CMOs will have plenty to say about how they’ve threaded this needle and which investments yielded the best results. But right now, brand and demand need to work in tandem, more closely than they have in the past. 

Strong brands can be confident that they’ll continue to lead the way, delivering the innovations that matter most to consumers. 

It’s hard to have a conversation about technology these days without hearing the terms blockchain, Web 3.0, NFT, decentralization or Metaverse. These concepts are undoubtedly the building blocks of the next generation of the Internet – but as a marketing or innovation expert, what exactly should you be considering?  

Below, we provide our thoughts on how this next frontier will redefine the relationship between brands and consumers – and how brands can position themselves to win. Brands must be clear on their “why” (strategic objectives) as well as their “what” (experience value proposition and activation strategy). 

What is the Metaverse and Web 3.0? 

First a simple explanation of what the Metaverse and Web 3.0 are. Web 2.0 is built on contribution, interactivity, collaboration and social media. However, whoever controls the data on their “centralized server” has access to a lot of information.  

This imbalance is what Web 3.0 is trying to solve. Web 3.0 is a space where people operate on decentralized platforms. This means moving away from the big tech giants and intermediaries and shifting towards democratized, collective governance. The users create the content! 

We are at the beginning of the Metaverse. There are still a lot of limitations including visual, user experience, commercial infrastructure and sustainability considerations. However, brands are already out there on the Sandbox, Decentraland, or other platforms, exploring unique value propositions to offer to users and their consumers.  

Is Your Company Leveraging the Metaverse to Elevate Your Brand? 

In the Metaverse, consumer brands will continue to enable commerce, interactions and experiences for people. Brands must think about how they will engage with customers in this new world. What will their needs be? What will touchpoints–including marketing and sales channels–look like? What are the limitations, or rather, the possibilities of what a brand can stand for in the Metaverse? How should marketing campaigns be launched to attract the target audience?  

We found that brands that have invested in the Metaverse follow five key trends, which reflect a wide breadth of opportunities for marketers: 

1. Broadcast: increase brand awareness through large live events
2. Engage: drive consumer engagement by creating communities and immersive experiences, especially younger demographics
3. Advocate: engage loyal customers with exclusive offerings 
4. Inform: create gamified, interactive education on their products and services
5. Sale: launch virtual offerings and explore new business models  

The Metaverse offers a novel and uninhibited space for brands to test and learn. Because of this, brands are eagerly diving in, testing the waters and making a splash with bold moves. However, the Metaverse is far from merely a new touchpoint/channel/platform for marketing activation. Eventually, it will redefine the entire world brands operate in.  

Marketers need to maintain a long-term perspective as they consider brand building in the Metaverse:   

1. Bolstered and Enriched Brand Promise and Equities 

Entering the Metaverse does not mean starting over. A strong brand in the physical world can focus on bolstering its image in the Metaverse by reinforcing its message, amplifying its reach and innovating new ways to delight customers.  

Because the Metaverse also offers a fundamentally different way for consumers to experience the world, brands should seize the opportunity, which offers them the ability to explore how their existing equities can be reimagined in a new space and in a holistic and multidimensional way. Entering the Metaverse can unleashes new possibilities for both themselves and their customers.   

For instance, Nike created the virtual world, Nikeland, on Roblox’s online gaming platform. Nikeland is complete with customizable avatars, Nike headquarters buildings, mini-games and apparel. It builds on the brand’s mission to create immersive and engaging communities that offer a personalized experience for every user.  

Louis Vuitton, one of the most storied brands in the fashion industry, has embraced digital transformation in the Web 2.0 world with a successful omnichannel approach. In the Metaverse, LV has continued to stay at the front of the pack by launching the mobile game “Louis: The Game” to commemorate the 200^th birthday of its founder. In the game, players can explore six different Metaverse worlds while learning about LV’s history, earning virtual branded memorabilia and even collecting in-game only NFTs. The game allows the brand to honor its deep heritage and timeless legacy in an entirely new way that enriches the customer experience and deepens their connection to the brand. 

2. Multi-Sensorial and Immersive Branded Experience 

Regardless of which approach you choose to take, the Metaverse has meaningful implications on how a brand comes to life visually. Nike extends its signature curve of the Swoosh into the Nikeland with a bright and dynamic color palette. LV applies its iconic emblem to the character and landscape designs of “Louis: The Game.” These robust visual assets have made their Metaverse experiences stand out among the others.  

However, in the Metaverse, establishing a brand using logos, typography and color palettes alone is not enough. Current brand identities and visual systems are largely made for two-dimensional usage, but the Metaverse requires us to expand our thinking and create brands that are conversational, multidimensional and multi-sensorial. Brands need to create meaningful interactions to immerse the users and reward their visit. 

How does a brand express itself through aspects such as dimension, motion, sound, touch and conversation? How can a brand build towards a holistic identity that is not just an eye-catching way to create buzz, but rather a lasting way to reinforce what it stands for and position itself for long-term growth? These are the important questions brands must consider while entering the Metaverse. 

Think About Your Metaverse Strategy Today 

Whether you’re a skeptic or an evangelist, there is no doubt that the Metaverse will create an unprecedented shift in how consumers and brands interact. As Web 3.0 technologies continue to develop and companies race to build our future virtual world, brands must think about how they will show up and how they will engage their customers in the marketplace of tomorrow. Traditional and digitally native brands alike have an opportunity to redefine themselves in the hearts and minds – and screens – of their consumers.  

As a wrap up, these are the questions brands must be able to answer: 

1. Your target audience: Who is hanging out there? 
2. Your business outcome: What are your strategic objectives? 
3. Your experience value proposition: What do you do there? 
4. Your campaign strategy: How to activate and engage your audience?
5. Your costs: What costs do you need to have in mind?  

The idea of brand purpose is not new. For years Prophet has helped clients fuel business growth by defining their purpose – an evergreen and inspirational North Star that articulates the core business strategy and guides internal and external audiences by answering two key questions: What do we believe? And why do we exist? While brand purpose has long been a critical first step in building and maintaining brand relevance, today, it has become a highly discussed and often misunderstood catchphrase.

A recent “Wall Street Journal” article investigated “the brands-with-purpose strategy,” questioning Unilever’s decision to assign each of its 400 brands a socially or environmentally focused purpose. As purpose continues to rise to the top of brand builders’ “to do” lists, these conversations illustrate a growing misconception: Purpose is being conflated with social or environmental impact. While it’s true that purpose and Environmental, Social, and Governance (ESG) strategies are both critical to building a relevant brand, not all brands’ core reasons for existing can or should be centered around social or environmental impact. 

Brand Purpose and Its History

Over the last century, in the first iteration of purpose, brands often focused on signaling strength and building employees’ and shareholders’ confidence. Under legendary CEO Jack Welch in the 1980s, General Electric existed “to be the world’s most valuable company.” Brands formed consumer relationships through one-way mass media communication, and consumers had more transactional expectations of brands, so many brands anchored their purpose (or mission, as they were often called) around a strong product portfolio, optimized operations and a healthy balance sheet that resonated primarily with shareholders. This is no longer a viable option.

In today’s world of unprecedented access to data and elevated customer expectations, brands have an ability – and indeed a responsibility – to speak directly to the needs and motivations of consumers. McDonald’s falls squarely in this realm. The fast-food giant exists “to make delicious feel-good moments easy for everyone.” With a focus on the customer, the brand is built around taste, happiness, ease and accessibility. Many brands today successfully anchor their purpose around the key impact they make in customers’ lives, even as they implement strong and cohesive ESG strategies.

Over the past two years, the pandemic, social justice movements, political polarization and climate crisis have accelerated the transition to the next stage of brand purpose. In this environment, consumers are more socially- and environmentally-minded than ever before and, thus, a socially- or environmentally-oriented purpose can be a viable strategy.

For those brands attempting to build relevance by elevating social or environmental impact into their purpose, two key considerations can help ensure authenticity and avoid accusations of virtue signaling or greenwashing – creating an authentic connection between the business model and social or environmental impact and taking meaningful action to back up the brand’s purpose.

Create an Authentic Connection Between the Business Model and Social or Environmental Impact

The closer the inherent connection between the business model and the social or environmental impact at hand, the more authentic the purpose becomes. Patagonia’s dedication to climate protection, for example, is a natural fit with its outdoorsy audience. Tesla’s quest “to accelerate the world’s transition to sustainable energy” aligns with the gas-free cars it produces. Oat milk brand Oatly exists “to make it easy for people to turn what they eat and drink into personal moments of healthy joy without recklessly taxing the planet’s resources in the process.” As an oat-based milk provider, Oatly can credibly deliver against this purpose simply by continuing to produce oat milk over dairy or almond milk.

Take Meaningful Action to Back up a Brand’s Purpose

Brands must also consistently take real, substantial action to bring their purpose to life. Oatly backs up its purpose with actions like opting to include its environmental impact statistics on the back of its packaging and leading a campaign to encourage lawmakers to require all food producers do the same. Some of Unilever’s brands including Ben & Jerry’s and Dove have been able to authentically build social impact into their purpose through true dedication, as evidenced by in-market moves over many years. Including their recent move to go as far as to sue their parent company “to protect the brand and social integrity Ben & Jerry’s has spent decades building.”

The idea that brand purpose must always be focused on social or environmental impact is a misconception. It is neither authentic nor prudent for every brand to integrate social or environmental impact into its purpose, and many brands with strong ESG strategies do not articulate social or environmental impact as part of why they exist.

Warby Parker, for example, investigated what mattered most to its customers and decided to focus its purpose on style, fit, value and the buying experience – needs that its customers valued more than the brand’s ESG commitment to donate a pair of glasses for every pair purchased. The beloved direct-to-consumer glasses and contacts brand exists today because they “believe that buying glasses should be easy and fun. It should leave you happy and good-looking, with money in your pocket.” While its “buy a pair, give a pair” ESG strategy continues to be a critical driver of employee recruitment and retention, its purpose centers on the key impact it makes in consumers’ lives.

Purpose is the North Star – It’s Not the Whole Universe.

Purpose does not – and should not – provide all the critical elements of a strong brand strategy. A purpose must be brought to life through everything the brand does – internally, by whom it hires, how it supports its employees and how it recognizes the values it stands for, and externally, by the promise it makes to deliver value for customers, the way it portrays itself through its promotional marketing, and, yes, its ESG strategy.

Hellmann’s mayonnaise appears to be following in the footsteps of Ben & Jerry’s and Dove, after integrating an explicit emphasis on social impact into its purpose a few years ago. The condiment brand appears to have an authentic dedication to fighting food waste and is determined to build its brand about this social impact. Additionally, Hellmann’s focused on this food waste initiative explicitly and exclusively in this year’s Super Bowl commercial.

If it continues to consistently live up to this purpose through its actions as well as its advertising, it can create a relevant brand that could differentiate it from the competition – as long as it also continues to relentlessly reinforce its core promise to deliver the best tasting mayonnaise on the shelf. Though the Super Bowl commercial focused entirely on fighting food waste, its tagline “Make taste, not waste” indicates that Hellmann’s is on the right track to creating a relevant brand purpose by balancing consumer benefit and social impact.

Each year Prophet asks more than 13,500 U.S. consumers about the brands that matter most in their lives. We codify our findings in the Prophet Brand Relevance Index® (BRI), a tool to help companies understand the significance of relevance and how it can be harnessed to unlock growth. The 2022 BRI revealed the highly coveted group of relentlessly relevant standouts—brands that resonate by appealing directly to our heads and hearts. 

But some brands stand out because they appeal to our practical nature above all else. They’re the brands we rely on day after day—to help us problem solve, check off our to-do lists and keep our lives running smoothly. Brands that rank highly in our head category build relevance with consumers by reinforcing promises with performance and enabling autonomy.  

In addition to our overall BRI ranking, we have identified the top brands that speak directly to consumers’ heads.  

While top performers among head rankings excel at making the best products, delivering consistent experiences, and meeting important needs, among other attributes, we discovered three additional things head brands do exceptionally well to fulfill consumers’ fundamental needs and become an everyday go-to.  

1. Pursue Partnerships with Industry Leaders  

Top-performing head brands reinforce their positioning as a trustworthy, reliable solution by pursuing authentic partnerships with leaders in the space. Zelle (#9 in head rankings) enables easy, real-time transfers between hundreds of trusted yet “traditional” banks that have yet to get on the digital bandwagon. The Costco Next (#24 in head rankings) loyalty program allows members to purchase products directly from “hand-picked” suppliers. Brands like these take steps to surround themselves with trusted organizations and consequently appear legitimate to consumers when guaranteeing a job well done. 

Clorox (#65 in overall BRI rankings, #14 in head rankings) does this especially well. The leading cleaning brand appealed to consumers as a necessity for keeping our homes clean and safe early during the Covid-19 pandemic. Despite already offering household products with medical-grade certifications, the brand seized the opportunity to partner with hospital systems to stock their inventories and pledged multi-million-dollar donations to those working on the front lines. These extra steps helped position a brand already known for quality cleaning products as an active part of the solution. Clorox successfully bridged the gap between health and wellness and household maintenance, becoming a fixture in under-the-sink cabinets across the nation. 

2. Simplify Complex Tasks 

High-ranking head brands provide clear, easy solutions to complicated problems, giving consumers a sense of control and ownership. They understand daily errands can be time-consuming, confusing, and frustrating. So, they tackle these common tasks with enthusiasm—providing streamlined, accessible, convenient, customizable experiences, to keep things functioning. While brands like InstantPot, Tide, and CashApp have reinvented the way we cook, do laundry, and split the bill, one brand stood out for its ability to make one of the least flashy annual to-dos somewhat enjoyable.  

Filing taxes–it’s one of the most important interactions we have with the government each year, and yet it often leaves consumers feeling anxious, overwhelmed, and frankly, bored. Yet, enter TurboTax (#70 in BRI Rankings, #7 in head rankings), a tax preparation software that has succeeded because it was the first to solve such a tedious process, streamlining the many stages of filing traditional paper tax returns. TurboTax’s software relies on a recall method, prompting users at each step of the process to claim additional deductions or list additional work, eliminating human error associated with the process. Its partnerships with top investment brands and banks also mean consumers’ information can securely and automatically be uploaded into the return, with the click of a button. Customers can even input documents on their own time, as opposed to setting up a meeting with a traditional accountant. These innovative fixes help TurboTax remain relevant as the best-selling tax preparation software and take some of the sting out of filing taxes, which consumers are greatly appreciative of.  

3. Raise the Standard by Defining Your Own Grade of Excellence  

Many highly-rated head brands design trademarkable technologies to integrate with all their products. These brands underpin dependability with high-performing, trademarked technology and consequently reinforce their reputations as trustworthy, reliable options by championing it. Unsurprisingly, many automotive brands appear among BRI rankings– Tesla, Mercedes-Benz, Toyota, Honda—no matter how luxurious or basic, eco-friendly or gas-guzzling, cars are an integral part of life. At any point in time, they can be filled with kids, groceries, suitcases, camping gear, moving boxes, empty coffee cups, and memories. So, we rely on them to get us from A to B as safely as possible.  

Toyota (#23 in BRI rankings, #16 in head rankings), known for manufacturing top-notch vehicles with reliable performance, positions its cars as “built to last, created to perform and designed for life.” Similarly, Honda (#30 in BRI rankings, #22 in head rankings) rose to the top of the head category due to its cars’ long-term dependability. With products that consistently rank among the best energy-efficient options, rarely break down, and consider safety from the beginning, the brands could solely rely on their performance to make sales. Instead, both brands continue to innovate new driver-assistive technology and redefine safety standards with ownable, pervasive technology. Trademarked Toyota Safety Sense™ technology is standard on all new models, to complement its already award-winning built-in safety features. The Honda Sensing® suite boasts modernized safety and driver-assistive technologies featured in a range of its vehicles. So, when it comes to making a smart investment, consumers turn to the cars they know uphold the highest standards—even if those standards were set by the brands.  

What Lessons Can We Learn from Leading Head Brands? 

To go from an amenity to a necessity and build relevance in the daily lives of consumers, brands need to: 

• Pursue partnerships with top leaders in the space to demonstrate your commitment and expertise
• Find a way to simplify complex tasks—prioritize user experience and service design when creating your offerings to ensure consumers can use your products easily or quickly
• Whether it’s messaging around a new technology or suite of offerings, continue to raise standards of reliability, performance, and experience, and find a way to talk about (or trademark) it that’s unique to the brand

Building brand relevance with Chinese consumers remains top of mind for emerging and legacy brands alike. Budweiser Brewing Company APAC (Budweiser APAC), part of AB InBev and a key player in both the global and China beer markets, claims some of the most storied beer brands in the world as part of its portfolio – from Budweiser, founded in 1876, to Harbin, founded in 1900. Despite their longstanding histories, these brands are constantly evolving and innovating to maintain relevance in an increasingly fragmented and competitive market.  

Tom Zhang, an associate partner at Prophet, sat down with Matt Che, CMO of Budweiser APAC, to discuss how the Budweiser APAC portfolio continues to house the top beer brands and resonate with Chinese consumers through strong purpose and values.

Matt Che 
CMO at Budweiser APAC 

Matt Che is Chief Marketing Officer at Budweiser APAC, who leads the marketing team in China, Korea, India & Southeast Asia. An over-20-year veteran of marketing and sales, Matt oversees all brand marketing activities including Budweiser, Corona, Hoegaarden, Cass, Harbin, Blue Girl and Sedrin, etc. He is also held accountable for driving marketing-led business growth. 

Regarded as a trailblazer in the industry, Matt contributes to the growth of Budweiser APAC by creating a series of aggressive campaigns and driving marketing digital transformation. 

Matt Che earned a master’s degree in arts from the University of Birmingham. He also completed various marketing courses for executives at Harvard University, Stanford University, and Kellogg School of Management. 

As a major FMCG group, how does Budweiser APAC maintain a pulse on Chinese consumers and the latest trends? 

We must remain curious and constantly consider how the relationship between our brands and consumers is evolving. My thoughts are three-fold.  

First, there is a shift away from educating the consumers. Brands need to think about how to communicate product benefits and brand values in a way that is “effortless” and most resonant to consumers, allowing them to take in the information willingly and easily. Rather than standing on moral high ground and preaching to consumers, brands should view consumers as their equals and strive to grow together. To be a relevant brand means being humble. Champion the consumer. Recognize, appreciate and celebrate them. 

The next trend I see is a shift in focus from brand building to full-funnel marketing throughout the consumer decision journey. With the maturation of digital, social and new retail, there are more ways to not only build brand awareness but also close the gap between awareness and purchase. However, the marketing mix from awareness to consideration to purchase is varied, and we need to consider different content assets at each stage of the funnel to deliver the right message at the right time. As marketers, we must hold ourselves accountable for the full customer lifecycle.  

Lastly, the innovation cycle of FMCG products is changing. Previously, innovation was centered on a few big bets that would generate significant commercial impact. Now, innovation is also a way to drive brand equity. For instance, we launched the Budweiser Brewmaster Reserve in China, an ultra-premium product made with the highest-quality ingredients. Rather than measuring its success with immediate sales KPIs, we are looking at whether it contributes to brand equity. Marketers should approach innovation more strategically to shape the today, tomorrow and future of the brand. 

With Budweiser APAC’s extensive portfolio, how will you drive innovation of products and experiences to meet increasingly diverse consumer needs?  

The traditional notion of brand loyalty no longer exists in this age of fragmented markets. Instead, each brand should strive to build occasion-based loyalty. Consumers might go out to KTV with friends and choose Budweiser, then grab some late-night street food with Harbin. On the weekend they might have a picnic and bring some Hoegaarden, and then order a Corona at the beach while on vacation.  

Rather than spending our marketing budget attempting to make one brand the beer of choice for every drinking occasion, we take a very nuanced approach in segmenting consumer drinking need states and occasions to a high degree of specificity. In each of these need states and occasions, what are the consumer’s functional and emotional needs? Once we understand those, can beer as a category deliver on them? If so, then we can consider which of our brands has the story, value proposition, and DNA to own an iconic demand state and occasion.  

Of course, we will still source sales volume from adjacent drinking occasions, but the center of gravity and the “hook” we communicate to consumers must be clear and distinctive. Once we have this, we must then be disciplined about focusing brand-building efforts on channels and occasions that are core to the brand, allowing each one to own distinctive space in the portfolio. 

Many Budweiser APAC brands go beyond the product to communicate a higher purpose to consumers. Why is this important? 

A strong purpose is what makes a brand stand the test of time. Consumers might select you once or twice based on eye-catching packaging or a unique product, but purpose is how brands can earn an unwavering position in their customers’ hearts and minds. The way purpose manifests will change over time, but the purpose itself should be timeless.  

For instance, Budweiser has always championed authenticity – being true to yourself and living on your own terms. For the Qixi Festival (Chinese Valentine’s Day), Budweiser launched the “All Love Is Love” campaign. We released limited edition bottles that featured illustrations of people of all genders, and the bottles can be paired together in different combinations to feature two figures kissing.

The message is clear – regardless of how you define love, we respect, celebrate and champion it. We’re communicating with our customers as equals, meeting them where they are to convey the brand’s higher purpose.  

Purpose must be built over time. Rather than inundating consumers with a once-a-year massive campaign, we should reinforce the messaging consistently to build a purpose that is lasting and authentic. This is an example of “effortless marketing” in action.  

This reminds us of Corona. Corona is a strong example of how brands commit to ESG initiatives. Why is this important to Budweiser APAC and consumers? 

ESG is among the top priorities for AB InBev globally, and it’s deeply rooted in what we do. As the largest beer company in the Asia Pacific, Budweiser APAC is committed to achieving a future that’s sustainable and inclusive.  

Although there have already been many exciting results, I don’t think we as marketers should overly commercialize ESG. While its successful integration into company strategy, operations, and culture can potentially drive customer love and as a result sales volume, this cannot be the starting point.  

For instance, Corona’s brand essence is about a slice of lime, the sunset, and the ocean. It’s clear and simple. As a result, the brand is genuinely concerned about ocean conservation and marine protection. Corona partnered with Blue Ribbon, the biggest ocean conservation organization in China, and launched limited edition bottles on World Oceans Day, encouraging consumers to use less plastic.  

This March, Corona also initiated the “Ocean Restoration” program for the second year, partnering with fishermen across Fujian and Hainan provinces to recycle plastics from the ocean. Through our continued efforts, Corona is now the first beverage brand in the world to achieve a net-zero plastic footprint, meaning it recycles more plastic than it produces.  

However, the goal of Corona’s ESG efforts is not to convince consumers to drink more Corona but to convey the importance of protecting our planet for future generations. If these initiatives draw consumers to the brand, then that is a positive externality of our ESG efforts, but it cannot be the intention behind them. 

Nowadays, many marketers experience tension between longer-term brand marketing and shorter-term demand generation. How do you resolve the tension to balance “fast and slow”? 

As I mentioned before, marketers have the challenging task of building today, tomorrow and the future. It’s a difficult balance to achieve, especially as marketing has traditionally been less focused on immediate commercial growth in favor of long-term brand building. But our remit is expanding, and we must not only identify consumer needs but also the commercial potential of these consumer needs.  

In my role, I’m working more closely with our commercial leaders to ensure alignment from the get-go and help balance the tradeoff between “fast and slow.” It’s important to align across marketing and sales teams on what long-term success looks like as well as what challenges might arise in the short term. Collaborating with sales allows us to better identify commercial realities such as pricing, competition, and potential cannibalization within our portfolio. 

In April, AB InBev appointed our first global chief growth officer, a newly created position that aligns sales and marketing under the same umbrella. This indicates a clear mindset change.  

Budweiser and Harbin are the official beer sponsors for the 2022 World Cup. How will Budweiser APAC use the event to engage fans and create a memorable brand experience?  

With the resurgence of COVID-19 in some areas of China, consumers are once again dealing with certain levels of anxiety, uncertainty and stress. Thus, we are adjusting our messaging.  

We want to keep things simple and help consumers unleash the fun – not only the fun of the World Cup but the fun that comes with being with family and friends and forgetting about your worries for just a moment. We want consumers to be able to just enjoy the game and enjoy a beer.