One of the empirical facts of business strategy is that “big” innovations that create new categories or subcategories do not come from the leading incumbents – they come from outsiders.

Successful incumbents have the resources to lead but, in fact, success breeds complacency, lethargy or arrogance. What is also disturbingly true is that incumbents not only fail to innovate, but also fail to be relevant to major innovations of others and sometimes lose not only their momentum but their very existence as a player.

“Success breeds complacency, lethargy or arrogance.”

In a brilliant new book, Unrelenting Innovation: How to Build a Culture for Market Dominance, Gerry Tellis explains why this is. His answer, based on nearly a dozen major clinical studies conducted by he and his colleagues, is that it is the culture of the incumbent firm that is inhibiting the firm from innovating or even responding to innovation.

He identifies three cultural traits and three practices that inhibit incumbents from “big” innovation, which is the only route to real growth as I argue in my book, Brand Relevance: Making Competitors Irrelevant. Understanding these traits and practices is the key to creating a culture where “big” innovations can be nourished.

6 Reasons Incumbent Firms Do Not Innovate

1. Refusal to Cannibalize Previously Successful Products

Firms want to protect their golden goose and certainly not kill it. Kodak had many of the patents that were the basis for digital photography, but they were protective of its film business. Microsoft had a model for paid search before Google but was afraid it will kill the banner ad business of MSN. Sony came out with an MP3 player two years before Apple, but Sony Music was petrified that a successful MP3 player might foster music piracy. Compare these examples with Gillette’s willingness to, again and again, obsolete successful products.

2. Reluctance to Take Risks

Failure is endemic to innovation, with rates ranging from 50% to 90% at various stages of development and commercialization. And executives rarely get blamed for missing a major innovation, but having one fail is often a career buster. The safe course is to avoid risky initiatives and stick to incremental innovations on the existing businesses. But big payoffs require big risks. Toyota gambled with the Prius with respect to undeveloped technology and uncertain demand. Both Amazon and Federal Express took a big risk in sacrificing profits with a big bet that scale would pay off.

3. Inability to Focus on the Future

In has been shown in one of Tellis’ studies that, for incumbent firms, major innovations go through two main stages:

• A Flat Stage: During which the innovation is being improved and gaining market traction. This stage can be lengthy. Firms tend to accept this first stage data as predictive and fail to analyze the potential technology or distribution developments that may ensue.
• Take Off Phase: As a result, they fail to invest or even stop an innovation that is in the marketplace. For example, Blackberry had a smartphone prior to the iPhone and HP had an e-reader before the Kindle or the iPad, but the potential of each, based on the existing market, seemed too weak to merit investment. Apple and Kindle, of course, proved them wrong.

In addition to these traits, incumbent firms also lack three practices that promote the traits that engender innovation: providing incentives for “big” innovation, fostering innovation competition and empowering innovation champions.

4. Using Outdated Incentive Methods

In successful, dominant firms, incentives are often set to current sales or satisfaction of current customers and are even biased toward employee seniority or loyalty. Innovation, when it is evaluated, has a heavier weight on failure than success, which can take years to determine. Google is the model for getting innovation incentives right. Employees are expected to spend 20% of their time on innovation, a “license to pursue dreams.” The Founder’s Awards, which run into millions, recognize employee innovations. There are innovation reviews whereby employees can present new product ideas to Google’s top management, including the CEO. And there’s more.

5. Lacking Internal Competition for Innovative Ideas

As a result, innovation is stifled. Silicon Valley is successful in part because of the frenzy of competition for ideas and people. The firms that keep coming up with “big” innovations have found ways to create such energy inside a firm. For over a decade, HP supported inkjet and laser technologies with competing printing divisions within the company. Each division worked hard to outdo the other, and innovation was the beneficiary. Some firms have idea fairs, research contests, competitions for internal startup funding or autonomous innovation units. The idea is to find and nourish embryonic business ideas that can be a growth platform for the future.

6. Not Championing Innovators

Firms like Apple that have been serially successful at innovation empower innovation champions, or individuals within the firm that are charged to develop major innovations and are provided with a team and resources. Successful innovation champions have a vision for the future mass market, tend to be mavericks and dissenters, have the conviction to persist against heavy odds and are willing to take risks. Such people are rare and need to be attracted, cultivated, supported and rewarded. Not easy for most organizations.

P&G’s “Thank You Mom” Olympic marketing program was a brilliant effort to draw on a universal human value to create a program with energy, relevance and emotion that spanned brands and countries. Plus, it’s ongoing with life beyond one Olympic Games.

In my book, Spanning Silos, I noted that brand and country silos have advantages. They are close to market and product technologies, they promote accountability, and they encourage decisive decisions. But they simply don’t work in today’s environment. One reason is that brand messaging, especially as it is spread through global digital communities, is hard to confine to local markets. As a result, a brand that has different local positions can become confused. A second reason is that the necessary scale of advertising, promotions, and big idea brand building are virtually unavailable when local brand building dominates.

So how might firms deal with the silo issue? The organizational answer is to overlay coordination and communication between silos. The brand-building answer is to find driving ideas in the form of human values that are universal, that everyone can relate to. That answer could be found in education, health issues, water conservation or others, but it needs to apply to all silos and be capable of maintaining relevance over time.

P&G’s “Thank you Mom” campaign uses both answers to conduct a successful cross-silo global marketing campaign. Applied at the Vancouver games of 2010 and the Special Olympics of 2011, it made its major push during the 2012 Olympic Games in London. It’s all about celebrating what moms do and thanking them for their efforts, their care and their achievements.

The campaign came to life with the short film, “Best Job” which touches the heart and celebrates the role that moms play in raising Olympians and great kids. There were also videos of the moms of some of the 150 athletes sponsored by P&G brands. A mom was shown watching their child excel through an exceptional performance or by medaling an event. The campaign was promoted through a host of media channels. A companion in-store worldwide retailer program was enacted five months before the London games and involved four million retailers. It was tied to an effort to raise over 25 million dollars to support youth sports programs that would aid both the Olympics and moms everywhere. The promotions involved some 34 P&G brands including Tide/Ariel, Pantene, Pampers, and Gillette. There was a “Thank You Mom” app that allowed people to thank their own moms with personalized content in the form of a video.

“It provided the prestige and energy of being involved in the Olympics, plus the “feel-good” aspect of supporting youth sports.”

The marketing program was a winner for several reasons, besides the fact that it scaled over dozens of brand silos and many countries and was estimated to have generated $500 million in sales. It provided the prestige and energy of being involved in the Olympics, plus the “feel-good” aspect of supporting youth sports. Further, the connection with real moms provided a hearty dollop of authenticity and emotion. It’s easy to empathize with moms that have fed babies, provided lunches, supported at swim meets, bandaged skinned knees, attended recitals and shared in the joy of winning gold at the Olympics. Everyone has a mother, and everyone can relate to the best aspects of a mom’s role.

The brand experience, the essence of a relationship, is created by brand touchpoints. A brand touchpoint occurs any time a person in the marketplace interacts with the brand. To improve the brand experience, a firm needs to identify priority touchpoints and implement a program to improve those that are not on-brand.

Five Steps to Enhancing Your Brand Experience

1. Identify all existing touchpoints, as well as those that should exist. Touchpoints can be under the control of the firm such through the communication programs, the public relations efforts, the customer contact points such as service and accounting staffs, sponsorships, or customer-focused programs such as the Tide Stain Detective. Touchpoints can also be external and controlled by retailers, run by third parties like the Consumers Report, or operated by a leading recipe website.
2. Provide an internal evaluation of all the touchpoints to determine which are managed well and which are deficient. What organizational unit owns each touchpoint, how is it managed, and what person is responsible?  Ask how well the touchpoint experience is being delivered with respect to internal expectations, external expectations, or the competition. What will it take in terms of resources and program change to improve the performance?
3. Look to past, current, and future customers to determine which touchpoints have the greatest impact on their decision and experiences. What are their needs and expectations from the touchpoint experience, and is the organization delivering? Get the customers to use their own words to describe the touchpoints and their appraisal of the experiences – don’t put words and ideas into their minds. Ask them to describe the ideal touchpoint experience. Accepting the status quo as something you have to live with may prevent customers from identifying areas that should be improved.
4. Prioritize and balance three dimensions. A high priority touchpoint program would have a high rating on the importance of the touchpoint experience in enhancing the brand, the value proposition, and customer loyalty, the degree to which the experience is deficient, and the extent to which the cost and feasibility of improving the experience is reasonable.
5. Develop a touchpoint action plan. For the priority touchpoints, the goals of the touchpoint and who is responsible should be clearly identified. There will need to be accountability. Further, a development and execution plan to improve the touchpoint experience that includes performance metrics will be needed. The plans may have to involve multiple functional areas and coordinate with other touchpoint experiences.

The effort to improve the customer experience should strive to achieve simplicity and trustworthiness.

Customers want a touchpoint experience to be simple, easy to use, navigate and understand. They do not want complexity, information overload and frustration. The power of simplicity is shown by its effect on customer decisions. A study published in the Harvard Business Review found that those brands that scored in the top quarter on delivering simple, relevant information were 86 percent more likely to be purchased and 115 percent more like to be recommended to others.

“Customers want a touchpoint experience to be simple, easy to use, navigate and understand.”

Touchpoints around brand search are particularly prone to complexity and inconvenience and are not oriented to brand comparison. Several automobile brands, recognizing that reality, do offer the ability to compare their brand to a set of comparison brands of choice. Anything that can reduce the complexity of a decision will be welcome. DeBeers’s uses the 4 Cs (cut, color, clarity and carat) to frame a complex decision. Herbal Essences provides a decision guide based on identifying hair type and color treatment needs that simplifies the decision. Information that is screened for relevance will be valued. ShoeDazzle.com, for example, provides shoe suggestions based on personality information such as favorite fashion icons and heel preference.

The customer also wants trustworthy, relevant information about brands and guidance on to how to compare them. Often, customer input is seen as the most trustworthy because it is based on actual experience without commercial bias. Walt Disney World’s Moms Panel, for example, answers questions about the Disney vacation. JC Penney posts videos of teens talking about their purchases (termed “hauls”) and provide insights into what and why purchases were made. TurboTax provides over 100,000 of unfiltered reviews of their product and helps customers find the most relevant reviews for their needs. Saks Fifth Avenue relies on expert commentary and has fashion writer Dana Riggs give fashion advice to its customers. Betty Crocker has an “Ask Betty” forum that provides the specter of the heritage expert.

Almost all brands need energy in order to gain visibility and support key associations. And one way to gain energy is with an ownable, internal branded energizer.

However, creating and owning an internal branded energizer that resonates with the target segments and energizes and enhances the target brand is difficult and expensive. It can take years to get traction at a time where action is needed in months. Indeed, it may not be feasible at all in a marketplace in which competitors have strong brands and active energizers of their own.

Enter the External Branded Energizer

An alternative is the “external branded energizer, a brand that is owned by another organization. In essence, you find a brand already established with energy and attach the target brand to it. By energy, I mean some combination of exciting/interesting, involving/engaging, innovative/dynamic and/or purpose-driven/passionate.

There is an infinite supply of brands outside your organization that have the potential to energize and enhance that also have enormous strength, are not tied to competitors, and can be linked to the target brand. With discipline and creativity, candidates can be located. The challenge is to create and manage the resulting co-brand alliance.

An external branded energizer will have a variety of sources, but among the most important are sponsorships and endorsements.

Using Sponsorships to Energize Brands

The right sponsorship, handled well, can energize and even transform a brand, adding a meaningful higher purpose. Home Depot, for example, sponsors Habitat for Humanity. Home Depot supplies volunteers, some of the material needed to build and support in raising money and awareness. It is easy for a Home Depot shopper to know of the connection because of the signage, the programs and the continuity over time. FedEx has received energy by sponsoring the FedEx cup, the world series of professional golf. It culminates in four tournaments, the last of which contains 30 top golfers vying for a 10 million dollar top prize. The venerable motor oil brand Valvoline gains involvement and a visible shared interest through its NASCAR sponsorship, supported by a creative website.

“The challenge is to create and manage the resulting co-brand alliance.”

Prestige events like the Olympics can add energy and give a leadership halo to a want-to-be leader brand. Samsung broke through from being just another Korean technology brand to becoming a real player in the US market as a result of its sponsorship of the Olympics. Prestige events can also add energy to established brands, such as VISA. Brands such as these that are successful at creating links with the sponsorship surround the sponsorship with a host of brand-driven activities including promotions, publicity events, website content, newsletters and advertising over an extended time period, usually measured in decades.

Using Endorsers to Energize Brands

Another route is using an endorser, a personality that is contemporary, visible, on-brand, energetic, authentic and in the news. Think of what LeBron James brings to not only Nike but Coca-Cola, State Farm, and McDonald’s. And Roger Federer to Gillette, Mercedes, Rolex, Credit Swiss, and Wilson. An endorser can also be a symbol, such as the Peanuts characters adapted by Metlife in 1985 or the Pink Panther used by Owens Corning, the insulation company even earlier. These symbols can provide energy and visibility to a brand stuck in a boring product class.

Guidelines for Sponsorships and Endorsements as Brand Energizers

• Make sure that the external branded energizer does in fact deliver energy, and that the energy remains a primary objective during the management of the brand alliance. Be also sure that the branded energizer fits its role.
• Understand and manage the role of the branded energizer. How exactly is it going to be used to deliver on its objective?
• The brand alliance relationship should be entered into and managed as a long-term marriage, not as a fling. It is a marriage. There needs to be a two-way reason to partner that will endure the future strategies and people changes. There should be compelling fit.
• Find ways to associate the target brand with the energizer (it is not important to do the reverse —associate the energizer with the target brand). The key is the long term relationship and a set of surrounding programs so that the link goes beyond simply repetition.
• Consider the external branded energizer as part of the brand portfolio, and manage its links to the other brands in the portfolio. Again, it is not another sponsorship or promotion, it is a brand that is a member of the firm’s brand portfolio.

For more, see my book Brand Portfolio Strategy. 

Most brands need more energy in order to provide the visibility needed to be considered and to support perceptions and attitudes. But how do you energize a brand, especially when the brand has no newsworthy innovations on hand or there is little interest in the brand or product category? It can be a tough assignment.

The solution might be to create an ownable, internal branded energizer which is not part of the offering per se but has energy and then to use that “branded energizer” to energize the target brand or sub-brand.

“A brand makes it so much easier to achieve the energizing objectives.”

An ownable branded energizer is a branded product, promotion, sponsorship, symbol, program or other entity that by association significantly enhances and energizes the target brand and is developed and owned by the organization.

Examples of Brand Energizers

The Avon Walk for breast cancer provides energy to the cosmetics firm that could not be obtained through the offering. The Oscar Meyer Weinermobile, the hot dog-shaped vehicle that travels the country and supports the Oscar Meyer jingle context. The Adidas Streetball Challenge is a branded weekend event centered around local three-person basketball tournaments and featuring free-throw competitions, street dance, graffiti events, and extreme sports demonstrations all accompanied by live music from bands from the hip hop and rap scenes. Symbols like the AFLAC duck, Betty Crocker and the Michelin man provide enormous visibility while highlighting relevant attributes. Virgin’s founder and CEO, Richard Branson with his outlandish stunts (some involving hot-air balloons) have become a large part of the energy and personality of the Virgin brand.

An effective homegrown brand energizer should:

• Have energy and vitality. That means it should be described as exciting/interesting, involving/engaging, innovative/dynamic, and/or purpose-driven/passionate. In most cases, the branded energizers will benefit the brand and the business in several ways including generating short-term sales. But the energy should be one of the primary goals and the brand and its entity should be managed accordingly.
• Be connected to the master brand. One route is to use a sub-brand such as Ronald McDonald’s House, which means that the target brand has a connection in the name. A second route is to select a program or activity that is so on brand that it makes the link easier to establish. A baby-care program, like that of the Pamper’s Village would require little effort to connect to Pampers because of its close connection with babies. A third is to simply forge the link by consistently building it over time with significant link building resources.
• Be regarded as a long-term asset and be managed accordingly. We are not talking about a seasonal promotion, energizing though it might be. It should be a program, product, symbol or other entity that merits a long-term investment and ongoing active management. It should have an active life of its own and not just be something on the shelf. Consider the Avon Walk, the Oscar Meyer Weinermoble, the AFLAC duck, and Branson’s activities. These energizers all have had decades of life and themselves been continuously refreshed.

Unless your brand is one of the exceptions, it needs energy!

A brand that has insufficient energy has two potential liabilities. First, it will lack visibility and it will no longer be amongst those that come to mind when considering a purchase. It will be lost in the noise of the environment and no longer be relevant. Second, and perhaps worse, it will see declines in key image items such as perceived quality and trust and, in addition, have its ability to drive differentiation and loyalty degraded. There is disturbing evidence to back up these assertions.

The Y&R Brand Asset Valuator (BAV) database includes more than 38,000 brands measured on over 75 metrics for over more than 40 countries, from 1993 to the present. The Brand Bubble by John Gerzema and Ed Lebar reports findings from the BAV database that show brand equities (measured by trustworthiness, esteem, perceived quality and awareness) have been falling sharply over the years. For example, over the span of 12 years, trustworthiness dropped nearly 50 percent, esteem fell by 12 percent, brand quality perceptions fell by 24 percent, and remarkably, even awareness fell by 24 percent. This fall continued, even accelerated, after the financial shock of 2008.

Brands with energy have proved the exception to 2008 decline.

They have, in general, not only resisted an image decline but have retained their ability to drive financial performance. A BAV modeling effort by Bob Jacobson of Washington and Natalie Mizik of Columbia shows that for high-energy brands, increases in energy and attitude drive stock return (based on an analysis of those brands like GE or IBM that represent a significant part of the sales of a firm). In fact, the BAV team has redefined differentiation, now calling it “energized differentiation,” because, without energy differentiation, the impact is compromised.

So what is brand energy?

• Interesting/exciting: There is a reason to talk about the brand. (Disney, AXE, Avon Walk for Breast Cancer, Pixar, FedEx Cup)
• Involving/engaging: People are engaged; the brand can be part of a valued activity or lifestyle. (Lego, Disney. Starbucks, Google, Amazon)
• Innovative/dynamic: The brand is like to be continually innovative or capable of creating “must have” innovations that create new subcategories. (Apple, Virgin, Dove, GE, 3M).
• Passionate/purpose-driven: There is a higher purpose that propels passion. (Whole Foods Market, Patagonia, Muji, Nike).

One way to energize the brand is to energize the business, and the best way is through offering innovation. Apple, Dove, Virgin, 3M, Subway, and many other brands have a continuous flow of innovations that create interest and visibility. However, that route is not always open. In many cases, successful innovation is elusive even with motivated efforts, talented people, creative processes and healthy budgets. And innovations that really make a difference, that rise above those that simply maintain a market position, are even rarer. Further, some businesses compete in product categories that are either mature or boring — or both. Whether you make hot dogs or market insurance, it is hard to conceive new offerings that are going to energize the marketplace. So the need then is to look beyond the offering for ways to make the brand interesting, involving, dynamic, enthusiastic, and a topic of conversation.

“Innovations that really make a difference, that rise above those that simply maintain a market position, are even rarer.”

Some suggestions to energize your brand:

• Create an involving promotion. Coke Zero, for example, asked basketball fans to upload their most fanatical videos and photos supporting their favorite teams, and winners were shown in a special show before the championship game.
• Create a promotion to attract new customers. Denny’s gave away more than two million Grand Slam Breakfasts in one day with the help of a Super Bowl commercial and online buzz. Free breakfasts broke through.
• Attach a social network to the brand. The General Mills “Live Gluten Freely” site provides a social network for those interested in gluten free eating. On the Harley-Davidson website, bikers can post pictures of their most recent ride.
• Go retail. The Apple store is a good part of the success of its products and brand because it presents Apple in a way that is completely on-brand. Nike and Sony have statement stores that serve to present the brand and offering story in a compelling and integrative way.
• Bring the brand to the customer. TaylorMade golf equipment representatives travel to golf clubs to demonstrate and sell equipment, giving customers a more vivid and on-brand way to experience them than they would get in a sporting goods store. Target created the 30-day Bullseye Bazaar in Chicago to introduce the Tracy Feith Clothing collection, the private-label food line from Archer Farms, and Target furniture.
• Hold publicity events. Consider the balloon adventures of Virgin’s Richard Branson, the BMW short films created by top directors, or the incredible Red Bull sponsorship of a person jumping out of a balloon 24 miles above the New Mexico desert.
• Support the higher order purpose. Whole Foods Market provides information and support to those interested in organic and natural foods.

Creating an effective brand portfolio strategy is one of the most difficult and critical challenges facing today’s executives. Too often, the family of brands generates customer confusion, inefficiencies, mixed opportunities, and misallocation of resources rather than supporting each other and the brand’s underlying strategy.

10 Steps for a Successful Brand Portfolio Strategy

Gathered from my book, Brand Portfolio Strategy, here are 10 guidelines that point toward the creation of a cohesive, effective, well-defined brand portfolio strategy.

1. Make sure that each brand has a well-defined role or set of roles to play in each product-market context that it is expected to contribute.

It is important to make sure that each brand has a well-defined role or set of roles to play in each product-market context that it is expected to contribute. Each brand needs to be actively managed in order to be successful within that role. In particular, brand-building resources should be allocated on the basis of these roles and not based on the sales and profits they are currently generating. For example, future master brands, emerging brand platforms, endorser brands, and lynchpin brands (brands like GM’s “On-Star” that provide differentiation to other brands), for example, should receive adequate funding so that they can fulfill their role.

2. Identify the strategic brands that will play a driver role in supporting major businesses or product platforms in the future.

As a brand strategist, you should identify the strategic brands that will play a driver role in supporting major businesses or product platforms in the future. A brand is said to have “a driver role” when it drives the purchase decision and defines the user experience. A brand with a driver role will represent the offering and summarize its value proposition and lead the charge against competitors into the product market. A strategic brand is the present or future star player, a brand that the future success of the business will hinge on.

3. Understand the roles of sub-brands and endorsed brands when deciding how to brand a new offering.

When deciding how to brand a new offering, you will need to understand the role of sub-brands and endorsed brands. A sub-brand will allow some distance from a master brand, an endorsed brand more, and a new brand the most. How much distance is needed? Three questions are involved in branding new offerings and deciding whether a new brand is needed. Will existing brands enhance the new offering? Will the new offering enhance an existing brand? Is there a compelling reason to generate a new brand?

4. Brand portfolio strategy is intimately connected to the business strategy, which specifies the product-market growth directions and the associated value propositions.

Your brand portfolio strategy is intimately connected to the business strategy, which specifies the product-market growth directions and the associated value propositions. So, you need to articulate the business strategy. A brand needs to be in place to support those growth directions. In particular, brands are needed to provide visibility and credibility to new offerings in priority product markets.

5. Find or create branded differentiators.

Actively managed branded features, ingredients, technologies, services or programs create a meaningful impactful point of differentiation for a branded offering over an extended time period. The Heavenly Bed, for example, is a branded differentiator for Westin Hotels.

6. Almost all brands could use more energy.

Some brands, especially established brands, may be noticeably bland and tired. A solution is to create or exploit branded energizers, a branded product, promotion, sponsorship, symbol, program, or other entity that by association significantly enhances and energizes a target brand. The branded energizer can be controlled by the firm (e.g., the Walk for Breast Cancer) or by another firm (Home Depot’s connection to Habitat for Humanity).

“It is important to make sure that each brand has a well-defined role or set of roles to play in each product-market context that it is expected to contribute.”

7. Leverage strong brands through brand extensions.

Extension opportunities that will fit and add value to a brand through its associations and customer base should be sought out. The extension should also enhance the brand by providing visibility, associations, energy, access to growth arenas, and communication efficiencies. Rather than conducting ad hoc brand extensions, it’s strategically better to develop brand platforms with a vision for the ultimate future of the brand.

8. Vertical extensions are risky, but sometimes necessary when creating a new brand is simply not feasible.

Vertical extensions are risky, but sometimes necessary when creating a new brand is simply not feasible. However, when moving into a value market sometimes a sub-brand or endorsed brand strategy will reduce the risks of extending a brand. The same is true when it is necessary to enter a super-premium market. In any case, implementation needs to address delicate issues.

9. A corporate brand can be a powerful master brand or endorser because it is uniquely suited to capture the organization’s heritage, assets and skills, people, values, citizenship and performance.

A corporate brand can be a powerful master brand or endorser because it is uniquely suited to capture the organization’s heritage, assets and skills, people, values, citizenship and performance. While competitive products may be similar, organizations rarely are. A corporate brand is thus a potential source of differentiation as long as it stands for something meaningful and positive.

10. Reduce the size of the portfolio when possible.

Resist adding brands that are not needed. Eliminate brands that have no role and relegate a brand to descriptor status if it is not getting traction or failing to play a driver role.

A key ingredient to success is to have a clear, realizable, impactful business strategy. But what is a business strategy?

I developed my view for part of my book, Strategic Market Management (updated edition coming soon), and I deduced that four dimensions define it. The first concerns where you should compete, and the remaining three concern how you should compete.

The first dimension concerns the product-market investment strategy, the scope of the business and the dynamics and resource priorities within that scope. Which products should be offered, and which segments should be targeted? Which should get aggressive investment to enter or grow, which should get minimal investment, and which should be milked, exited or avoided? Where should growth come from? Options include bringing existing products to new markets (market expansion), bringing new products to existing markets (product expansion), or entering new product markets (diversification).

The second dimension concerns the customer value proposition, which needs to be relevant and meaningful to the customer, reflected in the positioning of the product or service, sustainable over time and differentiated from competitors. It can involve elements such as providing good value (Wal-Mart), excellence on an attribute such as getting clothes clean (Tide), quality (Lexus), product line breadth (Amazon), innovative offerings (3M), a personality that connects (Harley-Davidson), organizational values (saleforce.com), or shared interest (Pampers and baby care).

“A strategic competency is what a business unit does exceptionally well.”

The third dimension concerns strategic assets or competencies that provide a sustainable competitive advantage. A strategic competency is what a business unit does exceptionally well—such as a customer relationship program, manufacturing or promotion—that has strategic importance to that business. It is usually based on knowledge or a process. A strategic asset is a resource, such as a brand name or installed customer base that is strong relative to competitors. Strategy formulation must consider the cost and feasibility of generating or maintaining assets or competencies.

The fourth dimension concerns a supportive set of functional strategies or programs and the executional elements needed to deliver on the value proposition. Creative excellence in conceptualizing and implementing these strategies will be critical to success. They could be around offering development, new product introduction, customer relationships, brand building, communication, social technology, distribution, coordinating global markets, quality, logistics and more.

For over a decade, Burger King has experienced mismanagement of relevance challenges by a series of “new” owners. Menus were not suitable for large, important segments such as women, families and the health-conscious. At one point it was all about the young male and their burgers, but even this group was attracted to new fries/burgers/shakes concepts with attractive personalities and/or local connections. The experience was inconsistent and at times disappointing. The advertising and the “King” symbol were ineffective and even strange even to the young male. For many in the broad market that needed to be served, Burger King was simply irrelevant.

“For many in the broad market that needed to be served, Burger King was simply irrelevant.”

As recounted by Jordan Melnick in QSR CEO Steve Wilborg, who was hired in 2010, may have finally gotten it right. In April of 2012, Burger King announced a four-prong initiative to make the brand relevant to more than the young male burger crowd. In particular, they…

1. Expanded their menu to include “Garden Fresh” salads, mango smoothies, chicken wraps, crispy chicken strips and mocha frappes among other new offerings, thereby broadening the potential customer base.
2. Improved the consistency of the experience by turning the franchisees into partners rather than the adversaries they had become. In particular, Burger King set up a restaurant council, a marketing council and a people council consisting of franchisee and company representatives.
3. Developed a new marketing program under the tag “Exciting things are happening at Burger King” that included a set of “A-list” celebrities to help communicate the new Burger King with humor that resonated with the broader target market.
4. Allocated funds to location renovation with a new look and feel that included digital menu-boards, new uniforms and fresh packaging.

When I was in China several years ago, I felt that the firms there would eventually become leading global players. It’s happening now, and a new book, The New Emerging Marketing Multinationals by Amitava Chattopadhyay and Rajeev Batra (with Aysegul Ozsomer) explains how. The authors report a study of some 39 firms that have made a move toward global prominence.

There are four strategies that have been employed by Emerging Multinational Corporations (EMNC):

1.  Acting as a cost leader by leveraging local low-cost human resources to provide low-end products, often starting with private-label brands that gain volume sales in their home market and in other assessable markets as well.
2. The knowledge leverage-er who draws upon specialized knowledge of customer needs when the conditions are privative and the income is low. The answer is often simple, rugged and inexpensive products that can often find a market elsewhere, eventually. Because TMNCs (triad multinational corporations—firms from Japan, the US or Europe) cannot be prevented from accessing low-cost resources or learning about their markets, it is not clear how sustainable these strategies can be.
3. The niche customizers, such as India’s Godrej that focuses on hair color, soap and household insecticides and targets South Asia and Africa. They take advantage of their cost structure and operations to adapt and customize for small segments that the TMNCs, who instinctively standardize as much as possible, have difficulty reaching. The strategy is to out-localize the TMNCs.
4. The global brand builder with focused innovation to enhance the cost advantage and to develop customer improvements. The key is to have a narrow innovation menu. HTC, for example, focused on smart phones and is now the third leading player. The innovation can also be directed to enhancing the customer experience. Lenovo has a brand essence of “innovation that makes a difference to customers.” Innovations like its ultra-thin, ultra-small, wide screen Thinkpad notebook and its laptop that boot up 20 seconds faster are examples. The innovation is significant enough to break out of the clutter and be noticed by the customers and the trade.

I am particularly intrigued by the last two strategies and the fourth specifically. My belief, as described by my book, Brand Relevance, is that the path to growth is to create customer “must-haves” that render competitors irrelevant. That is what at least some of the new emerging marketing multinationals are doing in part supported by their low-cost R&D.

“The path to growth is to create customer “must-haves” that render competitors irrelevant.

A key to their efforts is brand building. They recognize that a brand is necessary in order to be a global player in not only the premium segment but also the middle market. But the interesting finding is that innovation rather than advertising is taking the lead in brand building. Thus, firms like LG, with front loading washing machines, and Brazil’s Natura, with its biodiverse ingredient-based cosmetics, have been able to create high-end brands.

This is the future, and this study provides an early view of what the winning competitors are doing and will continue to do.

There is often a business case to stretch a brand into an area that it just does not fit, even when shielded by a subbrand or as an endorser. The answer can be a shadow endorser.

BMW is a shadow endorser of the MINI Cooper. A shadow endorser brand is not connected visibly to the endorsed brand, but most consumers or potential customers know about the link or can be informed about it prior to purchase. It’s in the shadows. The fact that the brands are not visibly linked makes a statement about each brand. It communicates that the organization realizes that the shadow-endorsed brand represents a totally different product and market segment than other offerings connected to the endorser.

A shadow endorser can protect the endorser brand while still providing the reassurance that an endorsement provides. Every buyer of a MINI Cooper knows that it is made by BMW and will have the same quality and innovation standards, even though it’s a cut below the BMW line. But the BMW owner does not connect the two, and thus the emotional and self-expressive benefits connected to the BMW are not in jeopardy.

“The fact that the brands are not visibly linked makes a statement about each brand.”

A shadow endorser strategy can also protect the new offer. Consider Lexus. Most buyers, especially in the early days, knew and were reassured that Toyota makes Lexus because of Toyota’s financial strength and reputation. However, Lexus delivers self-expressive benefits that would be diminished by a visible connection with Toyota. But the connection with Toyota is recessed in memory and accessed only when relevant, not in day-to-day experiences as a buyer or user of the Lexus. With no visible link to Toyota, there is no memory cue about the endorser. You buy and drive a Lexus, period.

A shadow endorser strategy allows complete freedom for the offering brand to be whatever it wants to be. Lettuce Entertain You, a Chicago-based restaurant group with dozens of restaurant concepts such as Savanello’s (Italian), Everest (very upscale French), and Mon Ami Gabi (French Bistro) was a shadow endorser for some 25 years after opening their first concept restaurant in 1971. Each restaurant had its own image, personality, style and brand name. The absence of a visible endorsement from Lettuce Entertain You meant that there was no chain connotation, and patrons needed to discover the shadow endorsement themselves through word-of-mouth and PR. Discovering the endorsement and having some intriguing “insider knowledge” only increased its impact.

A shadow endorser can evolve as brand equities change. In particular, it can play a role in providing functional service. In the late 1990s, Lettuce Entertain You became a stronger brand and developed a frequent diner program and even cross-promoted their restaurants to a limited extent. Starwood, long a shadow endorser of its hotels, which include stand-alone brands like Westin, Sheraton, “W” and others, used the Starwood brand as a reservation service and loyalty program. However, Starwood as a provider of auxiliary service in no way inhibited their portfolio brands.

A shadow endorser can also play a key role in B2B marketing. Dockers and Mountain Dew both get more respect from retailers because of their association with Levi-Strauss and Pepsi. The shadow endorsement of Touchstone by Disney helps attract high-potential scripts. The shadow endorsement by Viacom of its properties such as CBS Television, Simon & Schuster, Paramount Pictures and Nickelodeon affects investors and advertisers.

Every person has a brand, represented by a name and face that has a host of associated characteristics, such as: professional skills and assets, career paths, communication styles, appearance, personalities, interests, activities, friends, family and more. The brand influences all relationships by affecting how a person is perceived and whether he or she is liked and respected.

The “personal brand” can be actively managed with disciple and consistency over time, or it can be allowed to drift. There is a huge payoff to employing the active management option, and there are large risks to the alternative.

There are three keys to getting your brand under your control.

Your brand needs to have a strategic vision that details what you want it to stand for. It should be aspirational but realistic in terms of what can be added, changed or made credible. Just the decision to manage your brand and develop a brand vision can be transformational. Several questions need to be addressed:

• What is the current image? What do people think of you in terms of personality, skill, activity, possession and people you associate with? What are their expectations of you in terms of talent and motivations?
• What are your assets, such as your education, personality elements and people skills? What are you good at? What are you interested in improving?
• What are your plans for programs to upgrade or change? Any plans to build new skills, add new activities or dial up of existing ones?
• What image would you like to portray? How is it different from your existing one? How aspirational is it? Is it simply emphasizing some aspect of your brand that already has credibility, or does it represent changing the person and ultimately the image?

It should be recognized that the latter is more difficult. Several alternative brand dimensions should be on the table. Usually, there are alternative ways to group and prioritize them. The end goal is to develop an aspirational image that will resonate with the target audiences, be credible or capable of becoming credible, and reflect personal aspirations. Recognize that a single-person brand will not work in all contexts. Each context will potentially require an adaptation of the master brand or sometimes even a separate brand.

“The end goal is to develop an aspirational image that will resonate with the target audiences”

In particular, a person may need a professional brand and a personal brand. And a professional brand may need a slightly different face for subgroups such as clients, co-workers, subordinates and senior executives. One challenge is recognizing how to reconcile these different brands.

There should be some characteristics that are core to the person and common across all brands. Adaptation can simply involve emphasizing some of these common characteristics in one context more than another. For a professional brand, it might emphasize different talents for different audiences. For a personal brand, the humorous side might be dialed up for friends, and/or the romantic side for a spouse.

There might be contexts in which a person’s brand vision needs to be augmented by adding a characteristic that is not inconsistent but is unique to that context. For example, in the co-worker context, being a mentor player might be a characteristic that is added but doesn’t appear elsewhere.

Develop a program to make the aspirational brand come to life — to reinforce on-brand patterns of behavior, to create programs and to develop communication vehicles. What can and should be done in order to communicate the brand? A good way to get ideas is to consider role models. Who inside and outside your professional or social circle has been successful at achieving the brand vision you aspire to, or at least has been successful with respect to a dimension of the brand vision? How did that person get there? Is there something that can be learned from the role model?

Examining the behavior of successful people almost always stimulates actionable programs that can be adapted. A person brand reflects everything a person is and does, including his or her appearance and actions. That means that there are a lot of tools to work with, but it also means that the task can be overwhelming. In a firm, the culture and values can help guide the implementation of the brand. For a person, some central personality elements or core themes, such as being supportive, might be developed to play that role and inform a wide variety of behaviors.