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A letter from CEO Michael Dunn. Welcome to the inaugural issue of our bi-monthly newsletter. Through this expanded format, we hope to help you stay abreast of trends, issues, and best practices that influence senior marketers' ability to support and drive business performance. Our new format will continue to provide you with Prophet's latest thought leadership, but in addition, the newsletter will include perspectives from Prophet's Vice-Chairman, David Aaker, interviews with leading CMOs on key issues they're facing, and stories about companies that are successfully overcoming marketing and branding challenges. One of biggest business trends over the last 12 months has been the resurgence of the market for mergers and acquisitions. In every sector – from technology to consumer products, from telecom to retailing to financial services – these deals are creating huge organizations that face major integration challenges that must be addressed if they stand a chance of rendering shareholder and business value. This environment poses new opportunities for marketers. Whether the deal's rationale is to achieve scale and cost-savings or to achieve revenue growth, attention must be paid to the role of marketing and brand. Not only do brand integration issues need to be addressed, but also a concerted effort must be made to manage expectations of customers and other key stakeholders. The merger presents a prime opportunity to start thinking about customers in a broader and more integrated fashion. It's also a chance to take a look at how well your marketing organization is structured to manage the new set of brands. In this issue, we provide several articles we hope will inform and inspire – whether you're in a merger situation or just looking to help your firm compete more effectively. You will also find our interview with the head of global brand management for UBS, which reveals how this financial services giant consolidated its merger-created multitude of brands into a single global brand. And our own Vice-Chairman, David Aaker, takes a look at the future of marketing. We hope you'll enjoy the newsletter and welcome your comments and suggestions. Please feel free to contact me any time. Best wishes,
Michael Dunn Building Great Brands and Businesses An interview with UBS's Global Head of Brand Management, Beni Eggli. In 2004, financial services giant UBS was included in Business Week's ranking of the world's most valuable brands for the first time. It was a mere year after the external launch of an ambitious consolidation of its diverse portfolio of more than 5 brands in 4 regions under a single, corporate brand better aligned with its business strategy. Beni Eggli, a ten-year veteran of UBS who has been instrumental in seeing through this strategic shift as Global Head of Brand Management, talks with Prophet about the challenges, rewards, and learnings of this undertaking. Q: What were the key business reasons that made the move to a corporate brand strategy critical? A: We looked at it from several perspectives: Our industry analyses suggested that financial products were becoming commoditized, which makes the role of the brand more important. Our competitive review confirmed that an increasing number of financial services companies are moving toward a simpler brand architecture. Our customer research revealed that the functional and emotional benefits that clients expect from their preferred financial services provider are not fundamentally different, from a segment or a geographical perspective. Our internal review showed a brand architecture unaligned with the business model and strategy, and that neither clients nor employees understood what the brand stands for. Ultimately, we realized that the UBS brand's strength lagged behind our business' status, which hindered its ability to help drive the growth of our business. Q: What were the two most critical challenges you faced and how did you overcome them? A: First was getting senior management buy-in. We had gone through a series of transformational mergers, where, clearly, branding was a concern. But other major undertakings absorb the time and energy of senior management: The integration of the new businesses, organizational structures and infrastructure, business model, and culture. Finding the right time for a major undertaking like the redefinition of the brand strategy was crucial. Second was finding a way to deal with the brand strategy in a thorough, methodical, fact-and-figures-based manner that closely aligned with our business strategy. The discussion had to move from a subjective and emotional discussion around logo, color, advertising, and sponsorship to a more holistic interpretation that treats brand as an important contributor to the business success; the whole organization needs to deliver on our promise to clients to provide a unique UBS client experience. Q: What has the payoff been? How do you measure the success of this strategy? A: Our CEO said that the brand strategy decision was the UBS Group Executive Board's single most important decision in 2002 – a strong statement. The effect it had internally was amazing. The culture has changed significantly. Our "One firm" approach has become a reality, and we are capturing the benefit of the closer collaboration between the business groups with additional revenues. The external brand-building activities have resonated well in the market, with UBS brand awareness increasing, although it has some way to go. Being a new entry to the Business Week survey, at No. 45, was important. And every six months, we measure the most important brand identity elements (awareness, familiarity, consideration, etc.), using findings to adjust our activities accordingly. Q: What are five key take-aways regarding brand and marketing you can share with others following the M&A path as a growth strategy? A: First, if you don't have the chance to influence the branding at the time of the merger, wait for the right moment to bring the topic to the table and secure top management buy-in. It's also important to have a clear game plan that is based on a thorough methodology and is research-driven. Third, the brand needs to be attractive and relevant to the customer – therefore, the voice of the customer needs to be heard and should be decisive. Fourth, inform and involve the senior management at every major step of the process to avoid surprises. And finally, don't forget structure. The organizational structure should not define the brand architecture. But it should be adjusted to the chosen brand strategy – especially the areas that are key for future brand-building activities. For more information on our work with UBS, please click here. Vice-Chairman David Aaker's perspective on the future of marketing. The marketing function of the future will continue to be polarized. Chief Marketing Officers within firms that view marketing as tactical and are preoccupied with short-term financials will struggle to have real impact. Other CMOs, increasingly, I believe, the majority, will elevate marketing to be a visible driver of success by being a strategic partner within the firm. In the latter group, the CMO and his or her team will have been successful at addressing five challenges. First, they will find ways to generate home run brand-building programs that break out of the clutter even at the sacrifice of schedules and budgets. This will involve creative thinking, organizational tolerance for change, and talent in execution. It will also involve the capability of drawing upon a wide spectrum of resources, including the use of influentials in the marketplace, guerrilla marketing, leveraging the Internet, and connecting with the customer's activities and values. Second, marketing will be the driver behind achieving growth through business development, a priority for most CEOs. This also will require creativity and a willingness to suspend boundaries. The goal should be for the CEO to look to marketing for the development of growth platforms whether from developing and leveraging brand assets or finding new markets. Third, CMOs will find ways to truly connect to the customer by building relationship-based loyalty going beyond product-centered and product-driven approaches. A strong relationship can have a variety of sources such as organizational associations (e.g., innovation, the environment, customer concern or high standards), the delivery of emotional benefits, or creation of active customer dialogues. Fourth, the brand will be managed across the product and geographic silos in order to allocate marketing investment optimally, drive brand consistency, leverage cross-market insights and data, and create synergy by leveraging effective programs. The route will usually be to create, expand, or energize central marketing departments, without which the firm, at best, will be under a severe competitive disadvantage. Finally, these CMOs will ensure relevance. When competing in dynamic markets, the most strategic challenge is to make sure that the firm produces offerings that customers want to buy. The need is to detect and evaluate trends and develop responsive offerings supported by brand assets. In a growing number of businesses, marketing will have more of a strategic role. That means the marketing group must have the skills and talent to think strategically and the credibility to influence the CEO to think in terms of building branded assets rather than immediate sales. It's not an easy task, for sure. *These excerpts are based on an article that originally appeared in the January issue of The Marketer. For other recent articles written by David Aaker, please Prophet's latest articles Going Against Merging Goliaths Not So Gargantuan A Challenge Five Lessons for a Happy Honeymoon Most frequently downloaded article from www.prophet.com Leveraging the Corporate Brand Other articles of interest The False Debate About Focus The Rise of the Creative Consumer; The Future of Innovation Overextended
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