What’s a Business Strategy?

The right strategies define where and how companies should compete.

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 (, 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.


The concept of a business strategy is central to most businesses, but, strangely, there is no accepted definition. As a result, the process and its output can be all over the map.


How Burger King Is Attacking Their Relevance Problem

For brands that have fallen out of favor, one solution isn’t enough. This four-step plan is paying off.

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.


The effort to dig itself out of a relevance hole looks promising. It addresses the major relevance issues —understanding who is the target segment and their changing tastes, making sure the offering is what they are looking to buy, communicating in a way that fosters relationships, and adding energy through innovation. Other established brands that face similar relevance challenges could learn from Burger King’s efforts.


The Strategies of Emerging Market Competitors

A new book details 39 global companies are letting innovations–not advertising–drive their branding efforts.

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.


If they chose to, U.S. companies could learn a great deal more than they think from emerging multinational corporations. Companies in India, Brazil, China and more are cranking out innovations and concepts. And with their lower R&D costs and attention to brand-building, they are already major players.


The Power of the Shadow Endorser

This approach lends credibility to one brand, while protecting another, like BMW and Mini Cooper.

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.


New offerings can face a huge barrier in establishing a new brand when the use of existing portfolio brands, even as an endorser, represents a risk. The solution could be a shadow endorser that can provide an extra measure of separation between the offering brand and the endorser while providing many advantages.


Three Keys to Managing Your Personal Brand

Your personal brand deserves attention, too. And knowing how others perceive you can spark growth.

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.


Managing your own brand will take uncomfortable introspection and discipline in terms of emphasizing “on-brand” thoughts and actions and avoiding being seen as “off-brand.” It is difficult, but it can be very worthwhile.


Ten Routes to a Successful Brand Extension

These efforts leverage a brand’s established expertise, translating them into bursts of new energy.

A brand extension can be a source of new offering ideas, bursts of energy, brand enhancements, brand building economies and new growth platform. The extension option is not always optimal, but it should be part of most strategy and new product discussions. One key step is to identify extension product categories where a new entry will benefit from and contribute to the brand associations.

The process usually involves identifying the associations and brainstorming where they might be relevant. A more systematic approach is to explore the 10 routes to brand extensions that come from an analysis of successful extensions.

“One key step is to identify extension product categories where a new entry will benefit from and contribute to the brand associations.”

A friend of mine, Ed Tauber, considered the father of brand extensions, did a classic and influential 1988 study of 275 successful extensions in which he concluded most companies employed one of seven approaches to extensions. The Parham Santana extension agency, in conjunction with Ed, has reprised that study by identifying 500 successful extensions and systematically identifying 10 routes to brand extensions. Each of the extensions fit into at least one of the routes. The study furthers our knowledge of strategic extensions and makes the search for potential extensions much more robust and efficient.

10 Examples of Successful Brand Extensions:

  1. Shift the form: Starbucks Frappuccino, Snickers Ice Cream Bars, Black & Decker Role Play Tool Toys, Clorox Bleach Pen, Dial Hand Wash.
  2. Transfer a component: Crayola soap paints (creative color), Entenmann’s “Fresh Baked” Candles, Dr. Scholl’s shoes, Ghirardelli Brownie Mix.
  3. Transfer a benefit: Arm & Hammer Car Litter Deodorizer, Mr. Clean Magic Eraser, Ziplock Food Containers, Weight Watchers Ice Cream Bars.
  4. Leverage an expertise: Food Network cookware, Honda lawnmowers, Gold’s Gym 7-in-1 Body Building system, Mayo Clinic Diet, Reebok Sports Club.
  5. Companion products: Coleman Sleeping bags, Coppertone Sunglasses, Harley Davidson Apparel, Mr. Coffee Premium Coffee, Steinway Furniture Polish, Weber Seasonings.
  6. Leverage the customer base: Trix Yogurt, Smith & Wesson Tactical Police Mountain Bikes, Sesame Street Toys, Barbie Scooter, Adidas Watches, Fisher-Price Diapers.
  7. Leverage a lifestyle: Biggest Loser Kitchen Scale, Coach Fragrance, Cover Girl Sunglasses, Discovery Kids Telescope, ESPN Restaurants, Esquire Furniture, Porsche Kitchen Appliances, Rolling Stone Restaurant.
  8. Leverage a celebrity expertise: Jack LaLanne’s Power Juicer, Jack Welch Management Institute, Jan Fonda Workout DVD, Martha Stewart Bedding, Ralph Lauren Paints, Wolfgang Puck Frozen Pizza.
  9. Leverage a celebrity lifestyle: Cindy Crawford Jewelry, Donald Trump Signature Collection Apparel, Eddie Bauer Baby Stroller, Jessica Simpson Luggage, Kelly Ripa Shoes, Lakers Bottled Water, George Foreman Grill.
  10. Change the game by changing a brand image: Old Spice High Endurance Deodorant, V8 V-Fusion Vegetable and Fruit Juice, Zagat Health Survey Doctor’s Ratings

Of course, getting ideas on the table, even good ones, is only a first step in an often complex decision – see my book Brand Portfolio Strategy. Two points illustrate this complexity.

First, the extension decision is best made in a larger strategy context looking out years and for a stream of extensions rather than as an ad hoc, one-off decision. The “next extension” may not be justified unless the value of adding or changing associations is taken into account.

Second, a key element is the ability of the extension to represent a distinctive solution to a real customer need. We know empirically that “me-too” products seldom succeed, no matter how they are branded. Truly distinctive products that have “must haves” that define new subcategories are the big winners. So even if the extension makes brand sense, there needs to be a compelling offering that is brought to the market.


These examples are proof that when done correctly, a brand extension can be extremely successful. While it can certainly be a complex process and difficult decision to make, the results enable brands to create and dominate new subcategories.


Which Firm has the Best Brand Portfolio Strategy?

Take a closer look at how four beauty companies organize different products and categories.

When I was writing my book, “Brand Portfolio Strategy“, I would ask executives which firms had excelled in developing a brand portfolio strategy. The most mentioned firm was L’Oréal.

L’Oréal today maintains an admirable “house of brands” strategy in which some 20 brands are used to span the relatively narrow area of cosmetics and skincare in the US. There is a high level of clarity, differentiation and leverage. The portfolio is first divided into four groupings, with little overlap in customers and outlets.

Out of the 20 L’Oréal brands, four are “consumer products” and are distributed through drug and discount stores, 13 are “luxury products” distributed through department and specialty stores, four are “professional products” used by hairstylists, and four are “active cosmetics” sold to dermatologists and other specialists. Within each grouping, the brands have very distinct positioning.

Consider the brand portfolio strategy of these four consumer product brands:

  • Maybelline New York (Maybe she’s born with it, maybe its Maybelline) is trendy, innovative and infused with New York energy.
  • L’Oréal Paris (Because you’re worth it) is affordable luxury with excellence around the Parisian beauty Claudia Schiffer.
  • Garnier (Take care) is inspired by natural ingredients and dermatological science.
  • Softsheen & Carson (My style, my way) is focused on women of color who are looking for confidence, individuality and flair.

All are highly differentiated with strong positions that connect to their audience. In addition, L’Oréal Paris is aggressive with branding innovations such as Pro-Retinal A or Silk & Shimmer Conditioning Technology and is giving them legs. They have a host of sub-brands and endorsed brands such as L’Oréal’s Age Perfect, Couleur Experte, and Feria.

“Each brand has a role and the portfolio as a whole has energy and coherence.”

Finally, the firm also generates descriptive umbrella brands such as Eye Studio, Instant Age, and “Can I help you?” the L’Oreal Paris’ community site. Each brand has a role and the portfolio as a whole has energy and coherence. Consider, in contrast, Shiseido, much more of a branded house, which spans a wide quality/price spectrum and struggles to resonate in segments targeted by L’Oreal, especially in the US and Europe. There is too little attention paid to the brand portfolio and how each brand needs a role and reason d’être. In part this is due to decentralized organizations that fail to coordinate brands and in part this is because portfolio strategy is simply neglected.


A faulty portfolio strategy can result in marketplace confusion, wasteful internal competition, misallocation of resources, ineffective marketing, aimless brand proliferation, new product naming mistakes and lost opportunities to leverage strong brands.


Emart’s Transformation to a World-Class Retailer

Reconsidering customer experience and types of shopping trips leads to high-impact expansion.

After years of leadership in its home market, and being called the “Korean Walmart,” Emart is pushing hard to become recognized as a world-class retailer in its own right. And it’s using strategy-led design to get there. Strategy-led design is the seamless integration of the brand and business strategy with design. This approach is rooted in a deep understanding of the customer, which is built into every facet of design, whether visuals like logos and signage or the experience itself.

Emart’s direction is in keeping with the leadership tradition that has marked the company as South Korea’s first discount retailer since its launch in 1993. Moves like its fresh market grocery, occupying the entire first floor of its typically three-level hypermarkets and being first to adopt an “everyday low prices” policy helped cement its position. Today, it operates 130 stores in Korea that produce £6bn annually in turnover.

In recent years, Emart has faced soft sales in a very difficult market environment. The consumer base is very homogenous and any significant point of competitive differentiation is immediately copied.

The challenge became clear – to achieve world-class retailer status, Emart would need to undergo a major transformation. It needed to more effectively engage customers through an experience unlike any other in the market. To enable this strategic transformation, Emart realized it would need a complete rethink of its hypermarket brand and experience, and to develop stand-alone retail formats to drive growth. It appointed Prophet to chart the way, using our strategy-led design approach as the basis for the process.

“To achieve world-class retailer status, Emart would need to undergo a major transformation.”

Building up an understanding of Emart customers was particularly challenging because Korean consumers all tend to have similar demographics, attitudes and shopping behaviors. Moreover, 80% were already shopping at Emart. That made typical segmentation studies about “who” was shopping there less germane than “why” they were.

It took a novel and innovative approach to identify segments based on trip types and their corresponding needs, the economics of different shopping occasions and how retail formats and shopping occasions intersect. Over a six-month period, we delved into why Korean customers shopped at both Emart and its competitors across 10 major product categories.

Eight occasions were identified – such as “everyday needs”, “quick mission” and “social outing” – and prioritized against brand and business credibility, along with execution capability. This selection became the filter for understanding the customer needs that had to be built into the brand.

Understanding customer behavior was one thing. Finding ways to link and drive their shopping occasions to an Emart versus a Lotte Mart or Tesco’s Home Plus – all major players in Korea – posed another challenge. Despite the popularity of its fresh groceries, the lack of cohesiveness in the rest of the store was a detriment to delivering the kind of clear brand story and consistent customer experience that can translate into brand loyalty and greater sales.

Emart’s hypermarket stores are typical of Korean retailing. From one section to the next, the style, feel and look are dramatically different. This promotes customer confusion. Shoppers are awash in a variety of point-of-sale communications. It all results in unclear messaging and an inconsistent experience.

Retail executives walk their stores with an eye on merchandising and signage. They don’t typically put themselves in the customer’s shoes to understand what they are feeling – excitement at exploring the store or dread at wasting time trying to fight the crowds to find five specific items.

We were able to put Emart’s leadership (and our own team) into its shoppers’ shoes by utilizing a technique we call Experience Attribute Mapping (EXAM). This allows us to map the customer experience in minute detail, from the customer’s perspective. From there, we apply elements of what the brand strategy should be at various key interaction points. How this greater understanding of Emart’s customers and the shopping experience will play out in a repositioned brand is still a work in progress. But Prophet was able to provide a taste of the possibilities through the development of three new store formats all designed and opened in 100 days.

The challenge was to transform an underperforming Emart store, which had been a Walmart, with formats that previously hadn’t existed in Korea: a warehouse/club-style store (minus membership requirements), a lifestyle-oriented electronics store and a pet store.

The 17,000-square-metre ground floor was given over to Emart Traders – characterized by mass merchandising, value pricing and bulk purchases of everything from fresh food to office supplies. Featuring a clean, simple and well-organized flow, it emphasizes deals, through bright and inviting signage, along with a merchandising presentation of open cases on shipping pallets.

Matrix, the electronics division, departs from the single-manufacturer stores that typify Korean electronics retailing. It emphasizes interactivity, with demonstration areas that hadn’t previously been employed in the market. It also focused on customer needs, with “watch” “listen” and “play” sections, which shoppers gravitate to according to the type of product they want. It also has a more urban feel – reinforced with graffiti on concrete surfaces.

The pet department, Molly’s (named after one of the Emart chairman’s dogs), shares the first floor with Matrix and is a huge draw to people who normally shop for pets through vets or online. The bright and lively environment features color cues to denote different departments – from the Beauty Studio’s (grooming) bright topaz blue to the blue and white of Molly’s Café where owners (known as pet parents) and dogs can enjoy a meal together.


All three concepts have exceeded Emart’s expectations and are being rolled out more broadly. They established the value of identifying customer needs and creating an engaging experience to address them. And as the retailer moves closer to bringing its new positioning to life in its stores, it can understand the role of customer-focused, strategy-led design in its move to the world stage.


6 Reasons Your Brand Needs a Brand Identity Model

Extended identity elements play a useful role, making it easier to decide if new efforts are “on brand” or not.

The brand identity (BI) model, sometimes called the Aaker Model, was introduced in my book “Building Strong Brands” back in 1996 and was refined and elaborated four years later in my book “Brand Leadership.” Although there are many dozen competitive models, the BI model has a worthwhile market share – as reflected by the fact that some 170,000 copies of the two books have been sold.

But why? What are the differentiating beliefs or principles that the model is based on? Let me identify six.

1. A brand is more than a three-word phrase.

In fact, a motivation for developing the BI model was the prevalence of advertising agency brand models that needed a single thought to guide an advertising campaign. The BI model usually has six to twelve of them that are termed identity elements, values, pillars or principles. These elements are created by listing the aspirational associations, clustering these associations into coherent groupings and finally generating a phrase to describe each cluster. Some of these associations can be points of parity in that they are critical to being relevant but do not differentiate.

2. The “one-size-fits-all”/“fill-in-the-box” models are too confining.

The BI model does not pre-specify dimensions that all brands in all contexts must contain. It also doesn’t elevate those dimensions to equal weight, even those dimensions that are minor or make no sense. Nor does the model discourage people from introducing dimensions for which there is no box. Users are encouraged to draw on organizational associations and values, symbols, emotional benefits, social benefits, self-expressive benefits, personality, user imagery (values and lifestyle), functional benefits and bases of authority. The freedom to use (and exclude) any dimension when establishing the BI can be powerful.

3. Extended identity elements play a useful role.

The identity elements are prioritized. A core set of two to five that will drive programs are identified, but there is also an extended identity set (usually three to five elements.) The extended identity can provide texture to the brand vision and allow strategists to make judgments as to whether a program is on-brand. It can also provide a home for a brand characteristic that is important but will not be a program driver and for a brand personality that often doesn’t make the cut as a driving differentiator, especially in B2B contexts. Finally, an extended identity element sometimes evolves into a core element – staying visible keeps it alive.

“The extended identity can provide texture to the brand vision.”

4. The brand essence should be optional.

The brand essence can represent much of the brand identity. However, there are times in which the core identity is compelling, and the insistence of an essence will only divert energy and cloud the strategy going forward. If the essence is not compelling, it will become a focus and the whole brand identity will suffer. One firm had leadership, partnership and trust as its core identity. An essence, in that case, would only get in the way, and a compulsion to create one would have distracted.

5. The elaboration of the core identity leads to the identification and prioritization of programs.

The ultimate goal is to create effective brand building programs that bring the brand identity to life. To create the bridge and discover brand-building ideas, each core identity element should be elaborated. The elaboration could include defining strategic imperatives (programs that need to be developed if the brand is to deliver on the aspirational promise), proof points (assets and skills now in place that support an identity element), external role models (other brands that have achieved an aspirational association) and internal role models (people, products or programs that best illustrate an identity element).

6. The brand should be able to be adapted to different products, markets or countries.

Wherever possible, the same brand identity should be applied especially so that effective programs can be scaled and efficiencies will result. However, the goal should be strong brands everywhere, not the same brand everywhere – adaptation is often necessary. The BI model is well suited to adaptation because an identity element can be added, de-emphasized or redefined. The result is an effective strong brand in each context that is never inconsistent with the overall BI. Chevron, for example, has this type of adaptation available to its business units. The BI model’s six principles serve to make it a less confining, more flexible model than many of its competitors. But any framework is better than none, especially if it is not rigid in its execution. A business that manages its brand in an ad hoc manner without a guiding framework is unlikely to create a brand that will support the business strategy.


Branding is a complex discipline, and once launched, brands can take on a life of their own. Establishing a Brand Identity Model makes sure efforts align with strategy, positing the brand for greater success.


5 Biggest Challenges Facing Marketing & How to Solve Them

Muddled strategies. Flagging energy. Uncooperative coworkers. Almost every brand faces a struggle sometimes.

Today, customer preferences, digital technologies, and global markets are constantly changing the way we do business. This means that marketing needs to keep up. Unfortunately, this is not as simple as it sounds.

Here, we will examine 5 key challenges that marketers are facing right now, as well as how to overcome them using transformation in capability and charge.

1. The Need for Transformational Innovation

Marketing focused on “my brand is better than your brand” strategies supported by incremental innovation and conventional programs rarely create sales growth because markets have a lot of inertia. The only way to grow is through big idea innovation that will create enhancements or augmentations of the offering that will be regarded by customers as “must-haves.”

2. Prioritizing Strategy

Marketing should own three key drivers of strategy: customer insights that should enable growth initiatives and be the basis for strategic resource allocation, the value proposition or the key to strategy, and the brand strategy that should both inform and enable the business strategy.

3. Fostering Collaboration and Eliminating Silos

Firms no longer have the luxury to see opportunities for consistency and synergy lost. It is especially important to overcome functional silos and create integrated marketing programs where some functional areas accept a supporting role, even when that is not what they are accustomed to.

4. Injecting Energy into Brands

Brand equity across the world has been declining for over a decade. The exceptions are those brands with energy. Energy is imperative. If a brand cannot provide product energy like Apple, Dove, Hyundai and others have done, their need is to create or find something with energy and attach the brand to it.

5. Creating a Clear Marketing Approach

With the fragmentation of media options, the dynamics of social media and the proliferation of brands and offerings, there is much clutter and complexity. Nothing less than great marketing and exceptional offerings will break a brand out. This means marketing needs access to creative tools, people willing to innovate and a broad array of marketing modalities.

“Nothing less than great marketing and exceptional offerings will break a brand out.”


There are many more solutions to these challenges, but if marketing can influence or deliver real innovation, a marketing-influenced business strategy, control of the silos, energy and involvement and great tactical marketing, it will be relevant to the organization and see success in the marketplace.

This post originally appeared on Harvard Business Review’s blog . For more of my HBR blog posts, click here.


Define Your Own Market Category

Why be one of many in a crowded category, when you can create one and keep it all to yourself?

The only way to achieve real sales and profit growth is to create a new category or subcategory in which competitors are weak or irrelevant. It is Econ 101: Create an environment with weak competition. The alternative, fighting the “my brand is better than your brand” preference war, is rarely successful at changing market positions because of the resulting customer momentum. Successfully creating a new category or subcategory involves—in addition to finding a concept and introducing it into the marketplace—the active management of customers’ perceptions, attitudes and behaviors toward it. Here are five guidelines toward that end.

1. The new category or subcategory needs to be defined with a set of associations that should deliver a value proposition that will differentiate the category or subcategory from alternatives and appeal to customers.

It should, if at all possible, go beyond functional benefits, such as superior performance or cooler design, to provide self-expressive and emotional benefits. A richer conceptualization of the new category or subcategory will provide a stronger basis for a customer relationship and, thus, a barrier to competitors. In particular, the category or subcategory should be, if possible, provided with a personality. Oft en being a feisty underdog can add energy and reinforce the value proposition. That worked for, which in 2000 pioneered “cloud computing” for application software. With a communication program that included an assortment of guerrilla marketing stunts, positioned firms that had not adopted cloud computing as pursuing the “old way.”

The category or subcategory should be defined so that the boundaries are clear and potential competitors will be classified by customers as missing some “must-haves”—and thus not relevant. The challenge is to make those “must-haves” visible enough to affect customers’ decisions to consider the brand.

2. Strive to make the brand the exemplar of the category or subcategory.

When the brand gains exemplar status, the brand strategy and its associated brand building can play the role of building the category or subcategory and developing its associations. In addition, the brand will automatically have credibility, visibility and authenticity with respect to the new category or subcategory.

How can a brand become an exemplar? Focus visibly on the category or subcategory. Be a thought leader and innovator of the category or subcategory. Disneyland is the exemplar of theme parks and it continues to innovate. Become the early market leader in terms of sales and market share. It’s hard to be an exemplar and to leverage that role without market share leadership.

3. Focus on Promoting The Category or Subcategory and Not The Brand

The goal is not only to reinforce the exemplar status but also to make sure the new category or subcategory wins because that’s the heart of the innovation strategy. Even though choosing to promote the category over the brand is unnatural and sometimes hard to justify, it’s imperative. If the category or subcategory wins, the brand also will win.

In 2000, Barclays Global Investors (BGI) came to believe that exchange-traded funds (ETFs) were relatively unknown and had the potential to be a major investment vehicle.

As a result, BGI committed to bringing the new subcategory out into the open with its iShares series of ETFs as the vehicle. BGI had a multi-year, well-funded, broad-based program to establish the new subcategory that involved advertising, three sales teams directed to financial advisors, education seminars and a compelling website.

4. Stimulate Buzz.

A new category or subcategory will involve a substantial or transformational innovation. That often means that it’s worth talking about. One way to get the conversation started is with a story about topics such as dramatic features or benefits (the Tata Nano, with its breakthrough price of $2,000); the people behind the idea and how they brought it to life (Steve Jobs’ iPod story); how the technology developed (Ivory soap was found through a production mistake); interesting applications (Segways are used by mall cops); or a firm’s culture (Zappos’ service culture led to its domestic 24/7 call center).

5. Don’t Stand Still

Innovation, improvement and change will make the category or subcategory dynamic and the brand more interesting. If the brand achieves the status of an exemplar, it’s natural to create ongoing innovations attached to the brand that can become part of the defined dimensions of the category or subcategory. That will make the category or subcategory a moving target and will make it harder for a competitor to become relevant.

Chrysler did exactly that by continuously innovating its minivan for which it enjoyed 16 years with no viable competitor after its introduction in 1982. Every two or three years, there were significant innovations that raised the bar for competing firms. The driver-side sliding door, for example, changed the category parameters. Westin followed the Heavenly Bed with the Heavenly shower and accessories like soap and shampoo, which raised the bar.

Building a new category or subcategory is a key element of the innovation strategy.

“Successfully creating a new category or subcategory involves—in addition to finding a concept and introducing it into the marketplace—the active management of customers’ perceptions, attitudes and behaviors toward it.”


Inventing new categories and adding subcategories are important paths to growth. To succeed, companies must first find a concept that resonates in the market, and then carefully launch it. Then it must also actively manage it, monitoring consumer perceptions, attitudes and behaviors.


The Curse of Success: A Lack of Transformational Innovation

Companies too committed to short-term financial wins are often timid, and miss opportunities for innovation.

The only way to achieve real growth is to create offerings so innovative that they contain “must-haves” that define new subcategories because market inertia makes alternatives ineffective. What is needed is substantial or transformative innovation that disrupts the marketplace. The remarkable fact is that such innovation rarely occurs in the organizations that have strong profitable positions in established categories, and thus have the resources to deliver change. Why? It is the curse of success that can take several forms:

First on the list is the insidious and common “stick-to-your-knitting” curse. Firms have been successful in focusing on their core businesses: investing vigorously in incremental innovation to reduce costs and improve the offering, pursuing “my brand is better than your brand marketing” to engender more customers and higher loyalty, and building assets and capabilities that support the business. This commitment strategy, however, leads to:

  • A failure to see opportunities even when they are obvious
  • A bias against any innovation that may cannibalize the core business. Why invest in an offering that may kill the golden goose?
  • An organizational structure that gives undo power to the large existing silos
  • A fear of going outside the existing set of skills and assets

“What is needed is substantial or transformative innovation that disrupts the marketplace.”

Second is the related “too small to matter” curse. McDonald’s, Intel, Frito-Lay, Microsoft, and Coke all have had innovation smothered by their huge brands and businesses. Any embryonic business idea will simply not matter financially, so why bother?

Third, is the “competing story” curse. Nearly every executive in the organization will have a list of investments that are worthy, even indispensable, for his or her silo business. A proposed new offering, particularly a game-changer, will compete for those resources. Even though most will represent marginal new offerings or more marketing that is unlikely to foster growth, they will have strong advocates. There is also the competing story that emphasizes the risks of the technological barriers that will not be overcome, that the market is smaller than planned, and that the customers will not respond. With decision influences biased, the competing stories are likely to win.

Finally, there is the “short-term financials “curse.” The pressure to create short-term growth and margins, driven by the needs of stock investors and by managers with short job tenures can be intense. Short-term results can best be obtained by diverting R&D funds to support or enhance the core businesses. Creating a new business platform is risky, expensive, and likely to result in short-term financial pain.


So, how can substantial or transformation innovation occur in the face of these impediments? It’s not easy as the culture, people, processes, and structure of the organization may need to be changed. It helps to have a strong, informed strategic vision and then to centralize strategic decision-making and resource allocation so that the successful silos do not prevent innovations from moving forward.

It also helps when there is a crisis. Crisis conditions enabled the Chrysler minivan to live, for Lou Gerstner to reinvent IBM, and for the Walmart environmental initiative to happen. In the absence of a real crisis, an artificial one can sometimes be created, as we saw when the CEO of Toyota mandated that the Prius be designed in two years.

Allowing and enhancing real, market-changing innovation has never been more vital. Being aware of the curses of success is the first step.

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