Max Mednik

Sorry, ya'll, been super busy, but wanted to chug through some backlog of posts to get to fresher content. Below are my penultimate notes on brand management.

Age of consumer capitalism

• Focus on customer first, not shareholder value
  
• Managerial capitalism
  
• Customer-driven capitalism
• Maximize customer value subject to minimum shareholder value

Grow: Evaluate progress and people against the ideal

• Brand contribution to market value has risen heavily
  
• Quarterly brand index
  
• KPIs in terms of ideal
  
• Toyota: dedication to people
  
• Link ideal to employees' daily work plans
  
• Design performance reviews by focusing on how and ideal
  
• Reward time spent with end customers
  

MillwardBrown Brand Database Speaker

• Apple #1 brand in world by brand value of BrandZ Top 100
  
• China Mobile only Chinese one in top 10
  
• Measuring the effectiveness of super bowl advertising
  
• Sales effects
  
• Equity effects
  
• Turned out that super bowl ads had good ROI
  
• 1.       Iconic brand
  
• 2.       Top league of advertisers
  
• 3.       In mind of consumers, this has big impact
  
• Using measurement to create business case
  
• Great brand examples: Apple, Starbucks, Method, LVMH, Chandon

I'm on the plane to Hong Kong and about to spend a week learning about doing business in China through a UCLA Anderson trip. I'm very excited because this is my first trip to Asia, and I'm interested in learning about how entrepreneurship and small business works over there.

I've heard the architecture and culture are very different from the United States, though Hong Kong I expect won't be as drastic of a departure. Even so, I hope to get a flavor for some of the more traditional culture, architecture, food, and music while I'm there. I'm looking forward to meeting with real businesses, getting to know the business students at Chinese University Hong Kong, and trying to some real dim sum. I've also heard the light show at the harbor is beautiful, and I'm a big fan of light shows.

Also, as someone with a finance background, I'm excited to see one of the four "Asian Tigers" and one of the world's financial centers in action. I've heard that relationships and personal contacts are much more critical in Asian business, and I'm looking forward to learning more about that. Do people "network"? How do you meet new people? Do people give each other intros? How prevalent is bribery?

Overall, I'm very excited and will report what I learn soon.

Below are great articles I've run across in my preparations and research.

WSJ: After Earning Cash in China, The Trick Is Getting It Out

WSJ: DreamWorks in China

Really interesting article about modern HK-Mainland relations: MSNBC: Birth rights battle: China vs. Hong Kong

Understanding China and censorship: MakeUseOf: How To See If Any Website Is Blocked In China

An Overview On Doing Business In China: Intro, Full

Foreign Entrepreneurs in China: A JV Survival Guide: Article 1, Article 2

BBC: Hong Kong entrepreneur finds opportunity in city’s darkest moment

TechCrunch: From Zynga To Flipboard: Why All Eyes Are On China For The Next Mobile Boom

WSJ: China Premier Wen Jiabao Backs Financial Market Reform

9 Trends in Chinese Entrepreneurship

In search of best dim sum in Hong Kong

Week 6 was about a lot of the touchy-feely stuff which makes a big difference in getting a brand's ideal to ring true with customers. The speaker from GSD&M was extremely eloquent and taught about the importance of leadership to run a business that makes an important difference in people's lives; this message definitely jived with me, and the talk was quite engaging.

Grow: Must do #3: Communicate the ideal to engage employees and customers

• Model human loving relationship
  
• Keys: active involvement in advertising and viral potential
  
• Genuine intent to improve people's lives
  
• Innocent fruit drinks impacting society
  
• Walk the walk in other communications
  
• Funky labels
  
• Relevant and interesting, not sales 
  
• Unity of voice
  
• Good writers critical
  
• Brand ideal creative brief guides new communications projects

Delivering Happiness: Platform for Growth: Brand, Culture, Pipeline

• Culture book, party
  
• Ask anything
  
• Customer service as core loyalty
  
• Culture is brand
  
• Core values

Communicating your ideal

• Everything we do is media
  
• Everything communicates
  
• Engaging w/ people
  
• High standards for communications
  
• 1 to 1 always the best

GSD&M

• What is real underlying problem that needs to be solved?
  
• What do we have that consumer really wants that competition can’t deliver?
  
• Be a hugger
  
• 10 hugs of life
  
• Have to hug yourself
  
• Hug your family, ALL of them
  
• Hug friends
  
• Hug receptionist
  
• Hug where you come from, hug your flag
  
• Hug your fears
  
• Go in front of mirror, say “I’m afraid XYZ” and let it go
  
• Hug your failures
  
• There’s a difference between coming up short and failing
  
• Failure is lying or hurting someone; coming up short is just not winning business
  
• Hug your future
  
• Don’t let anyone tell you that you can’t do something
  
• Hug your “first”
  
• First time rode bike
  
• First time felt important
  
• First time something special happened to you
  
• Hug your finals
  
• When parents pass away
  
• 4 types of hugs
  
• Mind hug: just think nice things of them
  
• Heart hug: hold thought in heart
  
• Touch hug
  
• Bear hug
  
• Power of purpose in business
  
• “Capitalism”
  
• Conscious capitalists in business to improve people’s lives
  
• Croney capitalists about improving own life
  
• What’s the purpose of business?
  
• Create value for all of our stakeholders
  
• 5 fundamental human values
  
• 4 kinds of companies
  
• The good: purpose to serve others
  
• The true: the people who explore, those who are looking for the truth
  
• The beautiful: great ad agencies, Apple
  
• The heroic: business model to improve the world
  
• If someone helps you out, you need to help them out
  
• Take the competition seriously, but not yourself
  
• Have fun, enjoy people
  
• Stay humble, stay hungry
  
• Never miss a kid’s birthday
  
• Are you improving someone’s life today?
  
• Artistotle: where your talents and needs of the world intersect, therein lies your purpose
  
• Don’t be average at what you’re bad at; hire someone; spend all of your life doing what you're good at
  
• You get burned out doing what you’re supposed to be doing but what you’re not good at
  
• Great creative briefs important
  
• Southwest brief: “Our purpose is to give people the freedom to fly.”
  
• Harley: “We fuel freedom.”
  
• Their goal: create compelling and contagious work that builds the business
  
• Having purpose statement sets creatives free
  
• Singing
• Gotta know the words to the song
  
• Gotta sing when it's your turn
  
• Gotta listen to each other
  
• Sounds good when you sing together
  
• Nice when you have a good song to sing
  
• Good versus piercing insights
  
• Do purpose piercing work with anthropologists
  
• When you live your life with purpose it opens the heart

Week 5 of brand management was all about design thinking as applied to marketing and company culture. Below are my notes on our readings and the class discussion. Hot Topic itself has been in a big transition recently, focusing way more on music as the core driver for people's identification with the brand and having success in partnering with artists to co-promote.

Change by Design: Returning to the surface, or the design of experiences

• A good idea is no longer enough
• Consumption to participation
• Design thinking, experience engineering
  
• To change behaviors or not to change
• Experiment blueprint

Change by Design: Spreading the message, or the importance of storytelling

• Designing in the 4th dimension (time)
  
• Think of the sequence of events for the customer

Grow: Deliver a near perfect user experience

• Apple stores as promoting their ideal
  
• Digital arts classes
  
• Genius bars and employees restoring relationships
• Netflix
• Zappos
• Core values
• 5 takeaways
• Start with the ideal
• Make innovation personal
• Collaborate widely
• Have a portfolio of innovations
• Establish a process for innovation

Class

• Ideals driven product/experience design
  
• Super Bowl ads that were ideals-based
  
• Chrysler/halftime in America
  
• Budweiser GE ad
  
• Budweiser optimism and opportunity ad
  
• Honda CRV
• Ideal (enjoy): freedom, experience, fun
• "No Pepsi for you”

Design

• Execution of expression
  
• Hard to quantify
  
• Logo and bottle shape
  
• Method: Understanding people at the friend level
• Latent behavior
  
• Lexus: Winning people over daily in small ways
• Airline service sucking, everything being charged vs. Virgin differentiating on providing more service (order on monitor, first class suites)
• Experiences: Sense, Feel, Think, Act, Relate
• Toyota minivan swagger wagon ad
  

Hot Topic

• Teenager dress code matches music tastes
  
• People got a lot more diverse
  
• What is the brand going to stand for (our purpose)
  
• The experience: Core values / purpose, Physical elements / the look, Connection / the feel (social elements)
• Independence
  
• Connection
  
• Looked into world of teen in depth
  
• Purpose first, sales second
  
• "Everything about the music"
  
• Got band signings in stores
  
• Organized concerts
  
• Moving over to licensing/movie characters (Draco Malfoy)
  
• Interviews: require people to declare passion in first day of work
  
• Teens reading less and less
  
• Buyers out in night clubs 3 times a week
  

We had Nordstrom's CMO visit our class, and it was interesting to hear about the "Nordie" culture and what that means for their marketing efforts. My personal experiences with the stores haven't revealed to me anything special about their culture, but maybe that's just the LA stores.

Grow Must-do #2: Build your culture around your ideal

• One team, one dream (Saatchi)
  
• Largest P&G ad agency
  
• Lovemarks (brands that elicit love)
  
• Be clear and explicit about what ideal is what stand for
  
• Stand for something
  
• Cover Girl coming back to ideal
  
• Use every opportunity to train and do post mortem after each ad meeting (what learned, what could be done better, how excited)
  
• 10 culture builders
  
• Reveal brand ideal and operationalize it
  
• Be clear about what you stand for
  
• Design your organization for what it needs to win
  
• Get your team right quickly
  
• Champion innovation of all kinds
  
• Set standards very high
  
• Train all the time
  
• Do a few symbolic things to create excitement about what is important
  
• Think and act like a winner
  
• Live your desired legacy
  

Grow: How Pampers changed the world

• Slowdown globally
  
• Focus on dryness
  
• Missed Pull-Ups
  
• Male-dominated, engineering culture
  
• Disparate, international leadership that didn’t cooperate
  
• Sought answers from moms themselves to rediscover brand ideal
  
• Pampers Baby Stages of Development line of diapers
  
• Created useful website for moms

Method (company)

• Keeping culture weird
  
• Hiring question: how will keep it weird
  
• Open workspace, wikiwall post-its
  
• Wacky job titles people pick themselves
  
• Culture book
  

Southwest

• “Don’t try to learn your job. 1st priority to get to know your people.”
• Rapper for GAAP rules at Southwest annual meeting
  

Zappos

• No call times tracked
  
• No sales-based goals for reps
  
• Culture book
  

Nordstrom

• #1 goal at Nordstrom: deliver excellent customer service
  
• Relevancy really important (close to what customers want)
  
• Story of finding diamond ring that customer lost
  
• Everyone is about the customer (including security, janitors)

We had the CEO of Taco Bell speak to our brand management class a few weeks ago, and it was fun to hear about their brand ideal, how they dealt with the beef lawsuit (and spun it to their advantage), and how they're positioning themselves in a health-conscious 21st century. Some of my notes on the class and presentation below.

It’s not what you sell, it’s what you stand for

• What is purpose
  
• Jim Collins: core ideology
  
• Core purpose
  
• Purpose is a definitive statement about the difference you are trying to make in the world
  
• Purpose drives everything. It will drive all major decision making and become the determining factor in how you allocate resources, hire employees, plan for the future, and judge your success.
• Purpose is a path to high performance. It fulfills a deep-seated need that people have and will drive preference for your company.
• Purpose fosters visionary ideas and meaningful innovation. It provides the motivation and direction necessary to create meaningful innovation.
• Purpose moves mountains. It can rally the troops to overcome seemingly insurmountable odds.
• Purpose will hold you steady in a turbulent marketplace. It will see you through when times get tough and the road seems unclear.
• Purpose injects your brand with a healthy dose of reality. It is not something you can fake. It's genuine. It's real. And it's something that your customers honestly appreciate about you.
• Purpose recruits passionate people. It will make your organization more attractive to value-based, passionate people.
• Purpose brings energy and Vitality to the work at hand. It provides meaningful and sustainable motivation for employees.
• Purpose contributes to a life well lived. Work is no longer a 9-to-5 job to be endured but a meaningful source of fulfillment and satisfaction.
• Discovering purpose
  
• Revisit your heritage
• Hedgehog concept
  
• What deeply passionate about
  
• What best in world at
  
• What drives economic engine
  
• Revisit Your Heritage. Explore the genesis of the organization. Talk to the founding fathers, review the founding documents, and find the motivation that's been present since the inception.
• Review False Starts. Review the "inspirational" initiatives that have been undertaken only to peter out for any number of reasons. The seeds of a great purpose might reside within the rubble of a historical initiative that was given up on too quickly.
• Contrast Your Successes and Failures. Takethe time to deconstruct your successes from your failures. Move beyond obvious variables to find both the tangible and the intangible factors that are present when you are at your best.
• Start Asking Why? Look at all the major initiatives under way at your organization and start asking why, to what end, for what purpose, to make what difference.
• Notice What Occupies Your Mind. Take notice of where your natural energy and attention tend to gravitate. If enough of your best and brightest people share this natural passion, the universe may be trying to tell you something.
• Transcend the Generic Mission Statement. A great purpose statement goes far beyond the modern-day mission statement that is often no more than a basic category description wrapped in corporate performance goals. Be clear and definitive about the difference you are trying to make in the world and leave the category descriptions and sales goals for the annual report.
• Remember, This Is Not a Tagline. A great purpose statement errs on the side of clarity over creativity. It is intended to inspire your internal constituents by giving them a clear sense of purpose for all they do. Leave clever taglines for the branding process.

Grow

• How well do we understand the ppl most important to our future?
  
• What do we and our brand stand for?
  
• What do we want to stand for?
  
• How are we bringing these answers to life?
  
• Great brands know when to say no
  

Customer-based brand equity (CBBE) model

• Differential effect: Because we know something about the brand, it changes how we react to identical programs.
• Brand knowledge affects taste test results (New Coke disaster)

Taco Bell

• Marketers good at what and how but not why
  
• Functional, emotional
  
• Don’t sell top 3 fast food items
  
• Chipotle not after same customer
  
• House illustration for brand plan
• Foundation: How
• Floor 1: What
• Floor 2: Who
• Roof: Brand (heartbeat/soul, insight, mindset)
• Mission

(Sorry, fell behind on class notes blogging. Trying to catch up now!)

(Reading notes above, class notes from guest speaker from Budweiser marketing below)

The Global Brand CEO

• Focus on global brands
  
• Market is globalizing
  
• World is really flat
  
• Connected customer
  
• Globally converging consumer needs
  
• Cost of differentiation has exploded
• Story of Johnnie Walker campaign

What keeps global marketers awake at night

• Consumers are taking control
  
• Brand consistency across markets
  
• Story of Dove / real women beauty campaign

What global brands do best

• Universal Consumer Truth
  
• Global “end/inherent values” all consumers respond to
  
• Johnnie Walker: universal appeal of progress
  
• Using a common language
  
• Purposeful positioning: brand stands for something, a belief, pursues strategy that leverages brand’s reach and impact
• Understand difference you’re going to make in customer’s life
• Top: purpose: The brand's contribution to the world
• Proof: Hard evidence to substantiate the brand promise
  
• Discriminator: The unique differentiator versus competitors
  
• Personality: The brand defined in terms of human characteristics
  
• Benefit: The functional and emotional benefits the brand offers
  
• Insight: The universal truth, the human need and the friction the brand is built on
  
• Target: Demographic and psychographic description of the target consumer
  
• Market: The market the brand competes in
  
• Total brand experience
  

Drivers of global marketing effectiveness

• Connect: foster interdependency in organization
  
• Inspire: ignite organization
  
• Focus: align priorities and targets
  
• Organize: clarify roles and responsibilities
  
• Build: develop and leverage marketing capability
  

Grow

• Brand ideals drive the performance of the highest growth businesses.
  
• The brand ideals of the highest growth businesses center in one of five areas, or fields, of fundamental human values.
  
• Eliciting Joy: Activating experiences of happiness, wonder, and limitless possibility.
  
• Enabling Connection: Enhancing the ability of people to connect with one another and the world in meaningful ways.
  
• Inspiring Exploration: Helping people explore new horizons and new experiences.
  
• Evoking Pride: Giving people increased confidence, strength, security, and vitality.
  
• Impacting Society: Affecting society broadly.
• The highest growth businesses are run by business artists, leaders whose primary medium is brand ideals.
  
• Business artists excel in similar practices that constitute an operating system for generating and sustaining high growth
  

Ideal tree framework

• Trunk: competition
  
• Points of difference
  
• Points of parity
  
• 5 branches
  
• Discover an ideal in one of 5 fields of human values
  
• Build your culture around your ideal
  
• Communicate your ideal to engage employees and customers
  
• Deliver a near-ideal customer experience
  
• Evaluate your progress and people against your ideal
• Story of Method
• Mantra: keep it weird
• Male founders had to clean up room and wanted non-toxic cleaning products that had a great user experience; didn’t find any
  
• Ideal: be a catalyst in a happy, healthy home revolution that improves human health
  
• Impacting society
  
• Convinced famous bottle designer to do design on rev share basis
  
• Did some initial testing with stores in their area
  
• Cold-called Target buyer
  
• Phone call from mom whose son drank bottle; told her it’s safe and to relax
  
• Ops trucks using biodiesel fuel and telling marketing story on the side
  
• Building culture around its ideal
  
• Hiring critical
  
• Someone designated as hiring manager
• Assembles cross-functional interview team of 7-10
• 1-3 invited back for another interview
• Have to do homework assignment to address a current business challenge, strategic and tactical; must also answer how they will keep Method weird
  
• Fast prototyping of candidate, design thinking
  
• Open floor plan, writing on walls
  
• Communicating Method Ideal
  
• Viral videos
  
• No traditional advertising
  
• 4 pillars
  
• Surface design
  
• Premium fragrance
  
• Efficacy
  
• Sustainability
  
• In-store marketing and word of mouth
• Deliver a near-ideal experience
• Design thinking, attractive design like Apple’s
  
• Evaluate progress and people against Ideal
  
• 4 metrics
  
• Style
  
• Substance
  
• Advocacy
  
• Gross margin
  
• Weekly product council meeting
  
• 1-page monthly scorecard and longer quarterly scorecard
  

Class

• Hard to have a common culture w/o common framework
  
• Beliefs from organizational history
  
• Go back to start and look at writings of founders
  
• Values help a brand choose what to do
  
• Zappos culture video
  
• J&J Credo (order of priority): doctors, employees, community, shareholders
  
• Explaining complex products: start w/ high ideal, then get into how do it through product
  

Budweiser

• “Driven by image”
  
• Dream: to be the best beer company in a better world
  
• “Best” through KPIs
  
• “Better” came from needing to hold on to something from growth
  
• Dream-People-Culture platform
  
• Never complacent with results
  
• Love competition
  
• Hire people smarter than you
  
• 200 brands through M&A
  
• 14 billion dollar brands in 1 category (beer)
  
• 80% of profit from 20 brands; give these most focus, and those outperform market
  
• Consumer empathy
  
• People as people, not people as beer bottles
  
• Power of personal relationships, physical, 1 to 1
  
• Video: history of beer and connecting people
  
• Beer = original social network
  
• Physical + digital social network of today
  
• 2 pyramids: consumer attitude (how much you love me) + consumer behavior (how much you drank me)
  
• 24 modules measured yearly of brand performance
• Bud is 2nd largest brand for ABI (after Bud Light)
• American icon
  
• 20+ years of Bud share and volume decline
  
• Global icon under pressure, can’t do global strategy w/o fixing US
  
• Root cause analysis
  
• Lack of perceived presence, less relevant
  
• Average age going up
  
• Consumer base perceived low class
  
• Bad drinking experience
  
• Used consumer collages
• Good images of American icons, military, rebels, American cars
  
• Global Budweiser dream: 1st and only true global beer brand
  
• 5 critical segments (types of drinkers and occasions)
  
• 3 perspectives: way they see themselves, the way others see them, the way they want others to see them
  
• Roper values / global map: pleasure, people, tradition, tradition axes
  
• VBB: values-based positioning model
  
• Consumer benefits
  
• Functional: flavorful, balanced, reminds of first sip
  
• Emotional: promise of great camaraderie
  
• Reasons to believe: care and quality, ingredients, crafted since 1876
  
• Brand personality: inspirational, heroic
  
• Brand essence: brand ideal celebration and optimism in a bottle
  
• Brand ideal: exists to inspire people to champion opportunity and achieve their dreams
  
• Consumer values: authenticity, freedom
  
• Demand segment: loyalists, experimenters
  
• One compelling, unifying creative idea
  
• "Celebrate anticipation"
  
• One global look and feel
  
• Reality TV
  
• Can redesign
  
• Packaging redesign
  
• Baseball
  
• Nascar
  
• American flag on can
  

I'm pretty mixed on patents. I understand that if a company invests huge resources into discovering something, it is unfair for someone else to simply piggyback and copy it (but I think companies should make money from execution and service, not ideas). I understand there is societal benefit to sharing inventions (but I think the current system doesn't accomplish that since it's impossible to keep up with the multitude of patents granted and in-progress).

I believe that many of the lawsuits around software patents are frivolous (and many of the duplicating/overlapping patents shouldn't have been granted in the first place), so the whole situation is a mess.

Too many people still pay attention to "patent portfolios" (with quantity often more important than quality), and that attitude causes difficulties for entrepreneurs wondering if they should spend their time and money collecting [often useless] patents simply to show off.

Also, the recent law change that gives priority for patentability to those who file first instead of those who invent first requires filing patents immediately upon thinking of an idea, which is costly and sort of ridiculous/impossible for everyday people or entrepreneurs to do (and incentivizes patent trolls).

I heard an interesting session last week at UCLA Anderson by an accomplished patent attorney, Todd Miller. It was generally on tips for entrepreneurs (and less on controversial issues like should there be patents or how the system should be reformed). Below are my main notes and takeaways. What do you guys think about the issues I've raised above?

Tip 1: Work backwards.

• First figure out your business goals and strategy.
• Then think about if/how IP fits into that.
• Most money spent on IP is inappropriate.

Tip 2: Be flexible.

• You will have to pivot your business.
  
• Smart while being lean: Use an omnibus patent application (put all ideas in one application to save money and time).

Tip 3: Basics of IP

• Many patents not valuable because protection is too limited.
  
• Patent infringement requires each element listed in a claim.
  
• Use Google Scholar and Google Patents to check before you file.
• Trade secrets protect business info.
  
• Trademarks protect source of idea.
  
• Patents protect idea.
  
• Copyright protects expression of idea.
  
• Requirements for patent: novelty, usefulness, non-obviousness
  
• Claims at end are the actual protection.
  
• Use the USPTO website.
• In trademark, define description of goods as broadly as possible.
• Trick: File patent in Korea (if green tech, it's expedited to 6 months); then file in US and bypass the line.
• Another good search engine: prior-ip.com
  
• Search for your idea and find clusters of other patents and ideas

Tip 4: Avoid common mistakes

• Public dissemination (and discussion with anyone or public release in talk or website) kills patentability in most of world besides US (like Europe)
  
• Prior employer: invention might belong technically to prior employer (check your employment contract)
  
• Licensing terms: don't license out all IP early at bad terms; avoid "most favored nation" clauses in licenses if you can
  
• Chain of title: anyone who works for you must sign agreement that IP belongs to you