Keys To A Successful Brand Revitalization

As I mentioned in my last post”Growth Oriented Companies Pay Attention To Customer Goals”, a few weeks ago I attended a 2 day conference titled Realizing Opportunities for Profitable Growth.  The conference was jointly organized by the Marketing Science Institute and the Kellogg Graduate School of Management.  I am taking my notes from the conference and posting here on HorizonWatch some of the the key thoughts that resonated with me.

One of the presentations on the agenda talked about how a mature company can go about revitalizing its brand that perhaps had seen better times.  The case study that was discussed was McDonald’s. 

Back in 2002, McDonald’s was in a tough spot.  Overall, it’s customer base was declining, competition was taking business away, brand reputation was taking a hit, company-wide morale was low, and the stock price was at an all-time low.  In 2003, the McDonald’s executive team launched a strategy it called “Plan to Win” to drive an ongoing, customer informed revitalization of the business. 

Our discussion during the conference centered around strategy behind the revitalization and how it came to life through customer-facing initiatives.   There were six takeaways for me.

1.  Improving Customer Experience.  Center to the strategy to revitalizing any brand is a renewed focus on continuous improvement of product and service quality.   Many firms get too focused on cost reduction at the expense of improving the customer experience.  Firms that don’t have a  program to continuously improve customer experience will eventually see a degradation of product and service quality.  McDonalds helped restaurants understand what customers value with regard to customer experience and then developed programs designed to achieve operational excellence.  For example, in Singapore, customers value delivery in the congested areas of the city, so bikes and food carts have been used to enhance food delivery service. 

2.  Product/Service Innovation.  Innovation is also a key part of any brand revitalization strategy.  In McDonald’s case, a disciplined new product pipeline management system was developed resulting in a dramatic improvement in new product success rate.   Examples of successful McDonald’s innovations include white meat McNuggets (white meat is healthier), Milk Jugs (the jug is reseals better than milk cartons), and the Chicken Snack Wrap (has good price points and appeals to lighter eaters). 

3.  Re-Establishing The Brand Promise.  Improved marketing programs focusing on reestablishing the brand’s promise is critical for any brand revitalization.  The brand promise is an articulation of the relevant and differentiating experience that the brand will deliver to every customer, every time.  Brand revitalization means defining where you want the brand to be and then deciding how to get there.  Starting in 2003, marketing programs began stressing McDonald’s brand promise in order to restore the relevance of the brand.   Marketing programs based on on McDonald’s brand promise were built around the five P's (people, product, place, price and promotion). 

4.  Rebuilding Trust.  Brands that have been beaten down need to re-establish trust.  For McDonald’s, rebuilding trust was also critical.  Consumers today are demanding more openness, more social responsibility and more integrity.  One way McDonald’s has done this is through its Shrek movie promotion with a new meal for kids that packaged apples, milk, and white chicken McNuggets.

5.  Balance Global vs. Local.  Finally for global brands, any brand revitalization plan must be able to balance both global and local priorities.  There needs to be a clear understanding of consumer similarities and differences across markets.   For each market, an understand of consumer buying framework of who, what when, where, why is necessary.  From the global perspective, brand managers need to identify business and brand building initiatives that "will travel" worldwide.   For McDonald’s examples included  offering 24 hour operation, cashless transactions,  drive-thru, salad entrees,  low price point snack-wraps.  

6.  Leadership.   Brand revitalization needs the courage and perspective of strong leaders.   While many factors contributed to McDonald’s turnaround, the number one factor contributing to success of the brand revitalization was executive leadership.  McDonald’s execs were insistent and persistent in assuring the consistent implementation of the “Plan to Win”.

I really enjoyed this presentation and the discussion we all had as a result.  Thanks to the Marketing Science Institute for putting on such a great conference!!

IDC Insights: 2010 Predictions for Manufacturing Supply Chains

IDC Today I attended the IDC Manufacturing Insights conference call where IDC outlined its 2010 Predictions for Manufacturing Supply Chains.  On the call Simon Ellis, IDC Mfg Insights Practice Director, Supply Chain and Kimberly Knickle, IDC Mfg Insights Practice Director, Emerging Agenda outlined the firm’s recommendations for manufacturer supply chains in 2010

The call started with a overall look at economic trends affecting supply chains disciplines such as procurement, planning, manufacturing and logistics and then moved into the top 10 predictions.  The overall theme from IDC is that manufacturing companies need to rethink their supply chain structures and begin to evolve to a variable-cost-driven value network.

Here is a summary of the top ten trends.

  1. Optimization Focus: “Dynamic Optimization” dominates Capability Investment to Support Redefining of the Supply Chain
  2. Sales & Operation Planning:  S&OP Will Re-emerge as the Synchronizing Process for Reconciling Supply and Demand
  3. Redesigning Supply Chains:  Balancing Supply and Demand Across the Value Chain Will Prompt a Strategic Redesign of the Supply Network
  4. SCM and PLM Convergence:  Supply Chain and Product Life-Cycle Management Applications Will Increasingly Converge as Manufacturing Companies Focus on Innovation Delivery
  5. Intelligent Supply Chains:  Intelligent Supply Chains Will Put Broader Visibility Burden on Supply Chain Organizations, Both Owned and Outsourced
  6. Globalization:   Supply Chain Organizations Will Invest in Capabilities That Facilitate Global Operations
  7. Rethinking Fulfillment:  Transportation Capacity Will Tighten, Causing Supply Chain Organizations to Rethink Fulfillment Strategies
  8. Risk Management:  The Increasing Pace of Supply Chain Outsourcing/Offshoring Will Keep Risk Management High on the Strategic Agenda, But Investment Will Remain Focused on Building Risk Awareness
  9. Time to Get Smarter?  Smart Services and the Need for Persistent Assets Create the Inflection Point for RFID, Sensors, and M2M
  10. Metrics Drive Intelligence:  Armed with Metrics, Manufacturers Move from Sustainability Reporting to Intelligence

As the IDC team summarized the call, it was stated that 2010 will be the year of the intelligent supply chain.  There will be a focus on developing smarter processes, products, plants, people, and partners.   This thought confirms IBM’s Smarter Planet campaign.

You can register for access to the conference call webinar and slides by going to IDC Insights Predictions 2010: Manufacturing Supply Chain.  There is also a detailed research report on the topic:  Worldwide Supply Chain 2010 Top 10 Predictions

For more information…

IBM Weighs in on “The Future of the Consumer Products Industry”

cpbanner_hero IBM recently released a new Institute for Business Value whitepaper titled, "The Future of the Consumer Products Industry" which identifies the powerful macroeconomic, demographic and social trends that are driving deep changes across the CP industry.

For most of the 20th century, the CP industry grew largely by improving its ability to develop and sell products to a relatively affluent, homogenous market of shoppers, who responded in familiar and predictable ways to the traditional 4 Ps of price, product, place(ment) and promotion.

The CP industry of the future will be led by those companies willing to take bold, innovative steps to define the markets they serve, re-imagine the channels they use, and transform current business models, while executing flawlessly against six capabilities:

  • Globalization – Balancing market demands for localization with global/standard operating efficiencies
  • Differentiation – Deploying assets and processes to create sustainable differentiation
  • Integrated information – Integrating information to drive the business through insight
  • Innovation – Create and deliver offerings that go beyond consumer expectations
  • Consumer-centricity – Finding new ways to connect with consumers
  • Corporate responsibility – Integrating corporate responsibility into the organization's DNA.

In conjunction with the release of “The Future of the Consumer Products Industry”, IBM recently released the results of a research study that found Americans at all income levels are refusing to sacrifice quality, value and nutrition to save money on food, despite difficult financial conditions.

The study also revealed that the current economy has led U.S. shoppers to reassess the brands they purchase, the stores they patronize and their preferred packaging – all with an eye toward finding ways to save money. Respondents said that this in-store spending strategy would last beyond the recession.

The study was based on interviews with 4,000 U.S. residents across all income levels. Among the findings:

  • 72 percent of respondents are more concerned with quality than price while food shopping.
  • 90 percent of respondents said that value and nutrition will be of equal or greater importance when the recession ends.
  • 68 percent say nutrition is the most important consideration when food shopping.
  • 49 percent are shopping at multiple stores to get the best deals.
  • 35 percent of respondents said that they have changed grocery stores to save money.
  • 52 percent of consumers are reducing the volume of food they purchase from the grocery store.

For more informatoin

2009 Venture Capital Investment Survey by Deloitte and NVCA

Deloitte and the NVCA  released their annual Venture Capital global survey findings last month.  The report found that (not surprising) VC firms have been cutting back in their funding of startups.   While it has been a difficult recession, the industry is making some adjustments.

Some summary findings

  • Portfolio Pruning.  51%  are decreasing the number of companies in which they plan to invest and just 13 percent are increasing this activity.
  • Cleantech:  The clean tech sector is poised to become the leading investment category.  Overall 60% of respondents say that cleantech investments are on the rise.  Among U.S., UK and Israeli investors, about half expect to increase their investments in cleantech, while about seven out of 10 AP respondents and European respondents expect their cleantech investments to increase.
  • Globalization:  Globalization of the venture capital industry will intensify in coming years, posing significant competitive questions for the United States, and opportunities for emerging markets such as China.
  • Regional Investments:  Investment levels are more likely to increase in countries outside the United States.  Governments of all countries have a crucial role to play in fostering competitiveness and innovation.  Specific findings include that 52% of the survey respondents are currently investing outside their home countries.  19% of respondents expressed that investment levels will rise in Israel,  50% believe that investment will increase in Asia (excluding India); 43% in India; 36% in South America; 25% in Europe and the UK; and 17% in North America.
  • Government:   66% of venture capitalists would like a tax break from their respective governments. 40% believe that government support for entrepreneurial activity is important; 31% would like governments to encourage more active public markets; and 29 percent believe improved access to private capital sources will help better support innovation.
  • Investment Timing:   According to 51% of the VCs, now is a good time to invest. Only 6 percent believe that it is not a good time to make investments.

The 2009 Global Venture Capital Survey was conducted in the first quarter of 2009 and measured the opinions of more than 700 venture capitalists worldwide.  To view the full survey results visit: 2009 Global Trends in Venture Capital

IBM Launches Smarter Planet Campaign

In the future, every human being, company, organization, city, nation, natural system, and man-made system will be interconnected, instrumented, and intelligent.   Imagine what that will be like.  Wow! 

How do we get there?  IBM's Smart Planet campaign, which kicks off today, will help position IBM to participate in this future.   As I write this Sam Palmisano, IBM's CEO is preparing to speak to The Council on Foreign  Relations in New York City on the topic of “A Smarter Planet: The Next Leadership Agenda.  At the bottom of this post I'll provide some more links on the campaign

This is a perfect time to launch this campaign.  At this very moment in our planet's history, there are a number of very significant and fundamental shifts that are occurring in society, business and technology.  These shifts are playing an increasingly critical role in shaping the agenda of both the CEO and IT Managers.  IBM is in a unique position in the industry and should have a big role in communicating to CEOs and CIOs the implications of these shifts.  IBM will also need to deliver a roadmap to the future Smarter Planet.  Look for the Smarter Planet campaign to do just that.

Fundamental Shifts…

So let's reflect on some of the important shifts that are occurring across our great planet…

New Intelligence:  The explosion of information is driving the need for new  intelligent systems.

  • An explosion of next-generation mobile & computing devices, a system of a trillion smart devices and physical things—more connected, alive with intelligence are creating insights that could improve competitive advantage.
  • Scores of new devices and touch points that are collecting terabytes of valuable new customer data daily.   This has created a massive data explosion – enterprise data expected to grow 57% CAGR 2010
  • Web 2.0 is enabling two-way collaboration with customers that is shaping new business models and razor thin margins are forcing companies to identify and capture customer opportunities in real-time

Globalization:  Globalization is transforming society and reshaping business at a rate that few imagined.

  • Global markets are creating change on an unprecedented scale – new consumers, new infrastructure, new WW talent pools, and aggressive new competitors for Western markets will impact firms of all sizes
  • A huge new global “middle class” is awakening before our eyes” – unfolding with a greater disposable income.  Just consider the impact China and India consumers will have in the future.
    • A growing Chinese middle and upper class: 2005=7%; 2015=45%; 2025=71%.
    • Indian middle and upper class: 2005=7%; 2015=26%; 2025=49%
  • An estimated 2 Billion people will be on the Web by 2011.  This will drive an insatiable demand for goods and infrastructure.  Companies will have a much more demanding customer set that wants locally tailored/customized solutions.

Impact of Technology:  Technology has enabled a freedom of choice that has created a wealth of new client expectations.

  • Technology is freeing people from traditional constraints that once governed their lives. It is enabling personal and professional “freedom” and interaction wherever, whenever, however.
  • Growing global prosperity is giving rise to the pursuit of new customers in new markets, while ubiquitous connectivity is creating a growing class of more informed and collaborative customers
  • Systems & processes enable billions of people to work & live; physical goods to be developed, manufactured, bought & sold; services to be delivered; & movement of everything from people , to money to oil, & water

Green Initiatives:  New environmental responsibilities have awoken the public’s consciousness and shocked business into new approaches.

  • New responsibilities including environment, air, energy, water & food shortages are now pervasive and urgent issues. There are visible signs of climate change, $140+ /bbl. petroleum prices, rising energy costs, rising energy demand, environmental compliance and governance mandates
  • Mainstreaming of “green” beliefs/activism. Customers, employees, regulators, investors, and other stakeholders look for actions that produce genuine results that improve their environmental and financial results. Companies & governments of all sizes need to look across their operations, prioritize their focus areas / investments, & take action now.

Bigger Than The Industrial Revolution

This is an exciting time to work in the Information Technology industry as we are in the position to truly lead in this transformation to the vision I stated at the beginning of this post.

Future generations will look back at this time in history much like we look back at impact the period of the Industrial Revolution.  Back then, developing economies experienced major transformations in agriculture, manufacturing, and transportation.   Much of this was caused because of the introduction of the steam engine and related technologies.  The Industrial Revolution and the changes that occurred as a result, had a profound effect on socioeconomic and cultural conditions of those developing economies. 

The vision of a Smarter Planet will have a much larger impact than the Industrial Revolution.  It will usher in the Industrialization of Services.   And if you have been reading my posts this year, you know that I believe  that Cloud Computing will be the 'steam engine' that supplies the brain power for us to accelerate towards the Smarter Planet Vision.

Want To Learn More?

Take a look at A Smarter Planet page on ibm.com or check out some videos at Youtube playlist: Building a smarter planet

IBM’s Global Location Trends Report

A few days ago, IBM's Global Location Trends report-October 2008 was released.  The report is prepared annually by Plant Location International (PLI), IBM's global center of excellence for global location strategies, and economic development strategies. 

IBM's Global Location Trends study reveals that multinational companies are increasingly widening their investments to include a number of emerging countries, with notable increases in Latin America and Africa.

Some of the key findings from this year's report are:

  • Globally, an estimated 1.2 million jobs will be created by 10,200 foreign (greenfield) investment projects announced in 2007.  
  • The widening of global investment is a structural trend: despite an overall decrease in total investment, companies extend their search for markets, talents, and cost efficiency to new corners of the world.
  • New emerging markets continue to appear on companies' radar screens; Latin America & Africa in particular are increasing their share of global investment
  • Different strategic location drivers (market, talents, cost efficiency) result in a variety of location choices by sector and business function; targeted economic development strategies are indeed effective in responding to these different location strategies.
  • Renewable energy sector promises to be an important new job creator in many different areas globally.
  • Indian and Chinese companies are increasingly creating jobs in key global markets, and becoming important target groups for inward investment attraction.
  • Competition for skills, markets and cost efficiencies forces companies to be increasingly innovative in where they locate their activities and how they structure their global footprint.

To find out more about IBM's Plant Location International team or to download the Global Location Trends report, visit the IBM Plant Location International website.