How to enable the organization to translate strategy into reality

By Boston Consulting Group

Brand transformation can anchor a growth or turnaround strategy, driving customer loyalty, profit, and shareholder returns. However, the strategic investment decisions required to shape and strengthen the brand must be tackled with rigor and discipline: debated by the most senior executives, grounded in data-driven insights, and embedded throughout the organization.

A robust approach to branding synthesizes a variety of consumer insight sources ― including qualitative interviews, quantitative market research, internal financial information, and competitive landscaping ― in a systematic process.

A data-driven approach to brand transformation requires that executives first understand what drives consumer choice in the product category and then translate that understanding into the core elements of the brand. To accomplish this, the BCG suggests “brand benefit ladder,” a tool commonly used by marketers to describe how specific product benefits layer to support one another in delivering a brand experience to the consumer.

The basic brand benefit ladder includes the following elements. Technical attributes include physical characteristics of a product or service, such as the ingredients, quality level, or aesthetics. Functional benefits describe differences in how the product or service features are experienced and used by the consumer. Emotional benefits capture the feelings inspired by the product or service.

The optimal approach to brand transformation ties together the drivers of brand choice, the brand benefit ladder, and the company strategy, and is grounded in deep consumer insight, including both qualitative and quantitative analysis. It conveys the product’s technical, functional, and emotional benefits in a globally meaningful way. It ensures a consistently delivered experience using “brand drivers” across all the marketing “P’s” ― placement, promotion, and people. It touches all parts of the organization to ensure buy-in and commitment. It is both creative and disciplined. It shapes what the company is (and is not) permitted to do, and can be measured and tracked over time.

The BCG recommends a four-step methodology that quantitatively links the brand ladder to brand strategy and then enables the organization to translate strategy into reality.

Step one: identify the drivers of brand choice

The first stage of the process explores how consumers might choose between different brands within a product category. Choice drivers are never entirely rational. While practical matters such as price or ingredients matter, the final purchase decision more often than not also reflects emotional positioning clusters: essentially, collections of feelings that consumers might have when experiencing the category. For example, the emotional positioning clusters for a particular type of retail store might include a “relaxing escape” untroubled by the busy world outside, or a “sensible” feeling of having made good use of one’s time and money, or a “hip and in-the-know” sense of access to new trends that most people don’t have, or a “hassle-free” confidence in always being able to find a desired item.

Choice drivers will naturally differ by occasion, location, or life stage: business travel versus leisure travel, restaurant meals versus eating at home, clothing for young children versus teen apparels. The category landscape is divided into a large number of “market spaces” created by the intersection of emotional positioning clusters with occasions, locations, and life stages.

Because the consumer sits at the heart of brand-centric transformations, so does exhaustive consumer research. Qualitative consumer research leads the way to identifying the different drivers of choice in the product category as well as the entire universe of emotional positioning clusters ― both current and potential. Combining this research with other data sources, such as a detailed assessment of the competitive landscape, executives can build a comprehensive view of all the possible market spaces and potential brand benefits for the category. The result is a holistic perspective of the company’s competitive brand positioning.

Step two: select the market space and emotional positioning clusters to target

The next step involves selecting the market spaces that are most attractive and feasible for the brand to target and own. The goal is to identify specific opportunities that are financially attractive and also available to capture. Ideally, these are “white spaces” (not already owned by any existing brand) or are adjacent to where the company’s brand currently plays.

To achieve this goal, the company must know how consumers of its existing brand ― and of the product category more broadly ― are arrayed relative to the market spaces and how the spaces compare in size. In describing the spaces, there may be many relevant considerations: who the specific customers are, where they live, and what their usage occasions are. Market sizing is critical, in terms of not only the customer base but also dollars. For example, an emotional positioning cluster centered on “smart and practical” might appeal to a large number of customers who spend sparingly, while “local community” might appeal to a smaller number of customers who spend liberally.

Size is not the only factor in selecting the right market space; it is also important to know where your brand has a competitive advantage. This can be more complex than it sounds, especially if various divisions of your company ― or markets in which you operate ― have different starting points.

For example, while crafting a new “umbrella” brand positioning, senior managers at a global airline alliance realized that in their particular case they needed to develop functional, emotional, and social brand benefits that were not just relevant but also realistic. They had to mirror the capabilities of all the partnering airlines, so that any shared brand promise could be implemented across the entire alliance ― while at the same time fully building on the uniqueness of the individual airlines. The decision by the airline alliance to consider the delivery constraints early in the brand transformation process also proved to be critically important to successful execution over time.

Step three: identify the brand ladder requirements to win

Now it’s time to build the brand benefit ladder, starting with the market space and the critical emotional benefits and then centering every other element of the ladder on that starting point. To effectively target the chosen emotional benefits, executives must link each one to the corresponding functional benefits or technical attributes that will make it real for the consumer. Research and analytics can help establish these links with quantitative precision rather than instinct and guesswork.

This round of analysis quantifies the importance of each functional benefit to delivering the emotional benefits, and identifies the role of each technical attribute in driving the functional benefits. Links across the ladder match each benefit precisely.

Armed with a prioritized list of technical attributes and functional benefits, along with key tradeoffs, executives can compare the list to their current product or service offering and will likely find critical gaps. A competitive view is also a critical factor in building the full brand ladder, because efforts to address these gaps may run straight up against a competitor’s superior offering and capabilities. In Europe, for example, Audi’s Quattro four-wheel-drive system so thoroughly defines that space that there is little room for other carmakers to claim similar territory.

Next, executives must make final brand-investment decisions. On the basis of the detailed analytics undertaken in the previous stages, executives can demonstrate the financial value of delivering each layer of the brand ladder. As a result, guidelines on how much to spend on brand reinvention, and when to stop spending, are much clearer.

Step four: develop the brand execution strategy and playbook

This final step of the program centers on aligning the organization around the new brand. Senior executives must translate the brand positioning into something that can be communicated, digested, understood, and acted on by all employees at all times. Each relevant function of the organization needs an action plan for internal execution, converging to create the integrated brand ecosystem for the customer to experience.

With a detailed definition of the target market space and brand ladder elements in hand, company executives may now develop an adaptive framework to manage and align the entire business, connecting the brand ladder to the overall strategy. They must define everything from brand essence (the heart and soul of the brand) to brand pillars (themes that group the key attributes of the brand ladder) to brand drivers (individual technical attributes required to execute the brand through the day-to-day operations of the business).

The output of this stage is a detailed implementation plan across the whole organization ― from marketing to operations. The operational plans ensure that each and every customer-facing decision is aligned with the new brand positioning. Best practice here is to apply the brand framework to each of the “P’s,” going well beyond the narrowly defined four P’s of marketing ― product (design and innovation), price, placement (distribution), and promotion (advertising, discount strategy, and public relations) ― to the extended marketing-mix P’s, which include people (from store associates to call-center staff) and processes such as sales and service approaches.

It goes without saying that to accomplish all of the above, the branding organization must have senior-level leadership and commitment, as well as the underlying capabilities to successfully execute any ambitious transformation program.

This article was provided by The Boston Consulting Group.