Chapter 8. Brand Building Through Global Brand Growth
• How do you capture both explicit knowledge and tacit knowledge in one place and make them useful for global marketers?
• How can a global brand keep a single personality intact while presenting consumers with different expressions around the world?
• How can you maintain brand authenticity and still change?
• How can global metrics be used to manage brand growth?
Even businesses in mature, flat categories can achieve breakthrough growth by reigniting their brand value and top-line growth by global expansion of distribution.
A brand with universal emotional appeal can be a powerful platform for international growth. The brand equity investment really pays off in rapidly growing markets such as India, China, and Eastern Europe. Many associate brand equity with specific business categories such as consumer goods or fashion; however, brand value is a universal driver of growth and profits in every category. Engineering marketing to increase brand value is based on maximizing the relationship with desirable consumers to increase engagement, loyalty, revenue, and margin. This engineered relationship is the key to profitable growth whether your brand is IBM, GE, Chevrolet, Tide, Qantas, Mittal, Kit-Kat, or a server farm solution from Sun Microsystems. The relationship can be understood through the principles of consumer engagement, consumer loyalty, and long-sustaining revenue and margin cash streams:
• Consumer engagement: Chapter 5, “Measuring Consumer Engagement,” explained that consumer engagement is one of the best measures of marketing success. We can define engagement by measuring relevance, cognitive, affective, and behavioral variables. The brand engages the consumer effectively when it offers a relevant benefit or solution, supported by the right information that is easy to access and consume, and when the offering results in a positive shift in or reinforcement of brand attitudes and perceptions. This shift in attitudes leads to positive consumer behavior to purchase. Consumer engagement is secured when the right target audience is identified; the message is communicated distinctively, authentically, relevantly, and accurately; and the delivery of both information and brand experience achieves “right time/right place” status.
We can measure this (via consumer engagement points) and apply analytics of share, effectiveness, and efficiency and translate it into revenue and other outcomes.
• Consumer loyalty: Consumer engagement is the sum of the attitudes and perceptions the consumer holds about the experience he or she has had with the brand, whether through use; via communications; or in an information exchange with a referral, a salesperson, or a website. These attitudes and perceptions are monetized when they translate into consumer loyalty—purchasing more consistently, with greater frequency, and with the allocation of a greater share of requirements to your brand than to your competitors. This is the consumer behavior that we seek to achieve as marketers when we focus on improving brand attitudes.
• Revenue and margin: Brands that generate strong perceptual attitudes also drive fast, long-lasting, less risky, less volatile cash streams. Similarly, well-perceived brands can raise margins relative to their peers and their categories via both pricing power and the ability to change the unit mix to include more premium-priced components.
This chapter demonstrates how the Jack Daniel’s® brand generates global growth in a mature category (whiskey). Jack Daniel’s management capitalizes most effectively on global consumer insights, and they harness those insights to generate astonishing growth momentum.
“The Globalization of Jack”
There are debates over whether marketing should be more creative art or more business science, but for Jack Daniel’s, balance is a particularly strategic imperative. The Jack Daniel’s brand legacy is an artistic interpretation of a history that began in the mid-19th century and extended into global 21st century relevance with an emotive and engaging message. “Under the hood” is a rigorous application of management science, metrics, and groundbreaking technology utilized to establish and sustain Jack Daniel’s as a leading global brand.
In the mid-1990s, Owsley Brown II became Chairman of Brown-Forman and ignited his vision of a global Brown-Forman with the Jack Daniel’s brand as the launchpad. We don’t know what Mr. Brown’s wildest dreams were, but he may have succeeded beyond them: from 0 to 200,000 cases sold a year in South Africa, and from 200,000 to almost a million cases sold in the U.K. Jack Daniel’s passed the 120,000 case mark in China in 2005. Growth in the United States has also increased. The international sales share of total sales expanded from 10% in 1985 to 46% in 2005. The surge in “the globalization of Jack” is probably the most exciting development for the brand in the past two decades (see Figure 8.1).
Figure 8.1. How Jack Daniel’s® world has changed.
Provided with permission by Brown-Forman Corporation
We asked Mike Keyes, Global Managing Director for Jack Daniel’s, to provide his perspective on how brand values and popular culture have contributed to the Jack Daniel’s persona and taking Jack Daniel’s global. He also discussed how technology has enabled Jack Daniel’s to communicate with the consumer.
Mike Keyes
Mike Keyes is one of the world’s most experienced and accomplished beverage marketers. He has studied the complex and subtle emotional relationship of consumers with their alcoholic beverage brands of choice. He also has studied the equally complex world of multitier distribution through licensees, wholesalers, retailers, on-premises bars, and off-premises retail stores. He has guided brand building through most forms of local, regional, and national government regulation that the bureaucratic mind can design. Few people can aspire to his level of command in his field, and, because he loves his work as much as he does, to his level of professional satisfaction. Mike is a member of the Brown-Forman team most associated with the “globalization of Jack”—the establishment of a powerhouse brand that has achieved astonishing heights of success at the global level of competition.
Applying Process, Technology, and Metrics to Grow Jack Daniel’s Globally
Mike describes the early years of international expansion for Jack Daniel’s as “relatively easy” to manage. The market target was the “American abroad” or others, such as tourists returning from United States visits, who had been exposed to the authentic American Jack Daniel’s. A small United States brand management team could define the strategy and a set of rules for transferring Jack Daniel’s brand communications to foreign countries. They were able to manage the brand’s substantial growth for a long time by simply making the Jack Daniel’s brand available to those who knew about it.
However, this simple “rule book” approach does not work today. The target market has changed to millions of global users who may never have been to the United States, and whose emotional connection to the Jack Daniel’s brand is based on a new set of contacts and contexts. Also, the marketing team has changed. As Brown-Forman opened offices in Hong Kong, Seoul, Cape Town, and Prague, it recruited new teams of marketers who were exposed to the brand heritage for the first time. They were professional marketers but were not yet steeped in the history or culture of either the Jack Daniel’s brand or the “Brown-Forman Way” of global brand building.
Brown-Forman faced the challenge of transferring tacit knowledge—from the top management team who had “lived” the brand for many years and held its traditions, history, and essence—into explicit knowledge. This is the codified, organized, accessible shared knowledge that constitutes the intellectual property on which the brand’s future would be built. Mike relates his view of the challenge.
“We have hired over twenty new Jack Daniel’s marketers in the past two years in Europe, Eurasia, and Africa. How do we get these people up to speed to feel the passion, intuition, and understanding of Jack as quickly as we need to?”
Process and technology help provide the solution. Brown-Forman created an ordered and disciplined marketing knowledge center with technology to support knowledge management and dissemination while investing in the creation of new intellectual property. This enabled the marketers to use institutional knowledge and consumer insights to build the Jack Daniel’s brand systematically wherever it was distributed.
“First, technology and the processes of designing and building a marketing knowledge center enable us to immerse global marketers as quickly as we possibly can in the Jack Daniel’s heritage. We categorize consumer attitudes about our brand and share lessons that we learned from our consumers and consumer tracking—what our consumers are talking about and how we communicate with them to create and reinforce their sense of friendship with the Jack Daniel’s brand.
“Second, we utilize a process-based Brown-Forman Way of Brand Building, because we no longer can exclusively lead the brand globally with a small group in an intimate, intuitive way. As the brand becomes more global, process becomes more important to managing it. The B-F Way, currently Version 3.0, provides the process for all of our marketers around the world to become our brand champions.”
Mike describes an “old world” of brand strategy meetings that were intimate and less process-driven because decisions were made intuitively by a small group of highly experienced people. In the “new world” of marketing planning that integrates global and local planning—with local plans developed in different languages, often with interpreters—brand strategy development must be much more process-driven. And a matrix organization must be created to operate the process globally.
As Mike explains:
“The challenge is to not become so process-driven that you lose the creative magic inspired by history, heritage, and intuition about the Jack Daniel’s brand. We address this through a core Jack Daniel’s global team here in Louisville: a business strategy analyst, creative director, creative manager, consumer insights expert, and me. For the past four years, two of us have played a leadership role in the various strategy and ideation meetings in each of our regions. So you get this nice balance of people who understand their market, and people who understand how the business is structured, and a process that enables them to work together from a shared playbook. The global team members are the gatekeepers for the Jack Daniel’s heritage and history, and through knowledge sharing and process-based collaboration, the local market teams also become better gatekeepers for Jack Daniel’s. The balance can’t be maintained without process.”
The Insights-Led Process Should Define the Brand Culture So That a Diversity of Cultures Don’t Define Your Brand
“You learn very quickly in global marketing that your brand people abroad have a natural inclination to emphasize their market uniqueness. As I enter their market and share what has worked for us around the world, the first thing people do is tell me why and how their market is different.”
The global brand team responds to this naturally strong tendency by developing tool kits of marketing programs for local marketers to choose from. Whatever they choose will be within the acceptable parameters of the translation of the Jack Daniel’s brand.
“Our biggest challenge is to have our marketers embrace brand attributes that we have in our Jack Daniel’s toolbox and for them to choose which are applicable to their market rather than simply trying to create new ones. So we have to achieve a balance of Jack Daniel’s history, heritage, and its actual cultural dynamics and even its legal dynamics with the reality that every market reacts differently to beverage alcohol. Sometimes we can be too rigid in how we view the brand without sufficiently understanding the culture, and sometimes our people abroad can be too parochial to open their eyes to see how Jack Daniel’s may in fact have some global brand-building techniques that are wonderfully powerful in their own market.”
“The solution to this organizational tension is—as always—to be consumer-centric and gather insights through consumer research and observation. Managing the intellectual property that is the Jack Daniel’s global brand in a local market is delicate, but critical. You hire the best and brightest marketers and put them to work in the marketplace, be that China or India. Does their business school education cause them to prefer change over the preservation of heritage? Does it qualify them to interpret the local popular culture in the right way? The best way to avoid the risk of misinterpreting the brand to the local market is to provide the marketers with the consumer-centric insights process. Also important is our insistence that country marketers learn the brand’s story; visit its home; and study its roots, origins, and all the cornerstones of brand building.”
One Global Brand Personality—with Different Expressions
“There is this wonderful tension between the messages we send and popular culture. One of our lessons learned about Jack Daniel’s is that the brand personality registers strong attributes on authenticity, honesty, and integrity. This can be translated into positive rebellion or living life on your own terms. Look how Jack Daniel’s is used as a prop by Hollywood and the popular culture in the United States to portray something about character. Jack Daniel’s-type characters tend to be masculine, strong, and, whether bad or good, tend to live life on their own terms. But we see the idea of self-independence interpreted differently around the globe. So, a very smart, highly educated Asian brand manager will say, ‘You know, Mike, that won’t work in Asia. Everything about Asia is a little bit different with regards to independence; people here try their best to fit in and work very hard to not be independent or be perceived as on the fringe.’ We actually believed that for a period of time, but our ethnography in the market enabled us to develop the insight that it was not true that people didn’t want independence or to live life on their own terms. It’s just that the Western measure of expressing independence may be different. So being independent in a small market in Southeast Asia may be very different than being independent in Chicago, Illinois.
“So, in Asia it might be just a different haircut. We may think that is minuscule, but Asians are likely to think it is major. The way this translates to Jack Daniel’s is that the consumer may spend a large amount of their income to go to a bar and buy a bottle of Jack Daniel’s—it is served in many markets in Asia by the bottle—just so they can set it in front of them in a nightclub. People will look at them and say, ‘Wow! That person is very independent, and that person is living life the way they want to live life—they are a trendsetter.’ This is something we at first had a hard time getting our arms around. But we know now that we have to understand Jack Daniel’s attributes in a cultural setting. We do so by developing insights from observed behavior and research.”
Similar lessons have to be learned directly from consumers and applied in other areas of brand imagery. Take graphics as an example. The Jack Daniel’s graphics are based on the iconic black-and-white Jack Daniel’s label. As a result, most of the brand’s messaging and point-of-sale materials around the world tend to be black-and-white. However, in parts of Asia black is a symbol of death. Posting billboards with a black background and white letters is something consumers in those countries aren’t used to, consciously or unconsciously, and they find it shocking and upsetting. In those markets, Jack Daniel’s altered its out-of-home advertising beyond a simple black-and-white campaign. A global brand should not defy the local culture.
Another similar example of balancing “the brand’s world” with the realities of what Mike call’s “the drinker’s world” concerns the imagery of the original distillery in Lynchburg, Tennessee. One of the icons of the distillery is the famous tour guide, dressed in overalls and a straw hat, representing authentic heritage and rural pace of life.
“In the United States, the imagery creates this interesting attention to a real place that’s very different from the urban markets—the last respite from the frenetic pace of life, a beacon of relaxation, where you can catch your breath, and your cell phone won’t work.
“The problem, for example, is that in parts of Romania a tour guide’s appearance might actually have been too close to what the people are trying to escape from. So while ‘down home’ is a universally virtuous attribute in developed urban markets around the world, it may not always be a positive attribute for folks who are just emerging from rural economies and rural life. We let the consumer make the decision, and we simply downplay ‘down home’ in Romania for other pertinent brand attributes.”
Despite the exceptions, the bigger insight is that universal attributes, benefits, and messages can be found.
“Another powerful need that I believe is universal, that our brand tends to satisfy more than most brands, is the need for genuine friendship. Jack Daniel’s messaging is about trust and civility and what these values stand for—delivered with an authenticity that we call tell, don’t sell. We try our hardest not to cross a boundary with our selling messages that would put us “in your face” or “ask for the order.” We believe consumers “get it”; they personify Jack Daniel’s, and they call for “Jack” by name.”
The Importance of Metrics in Managing Global Brand Growth
Jack Daniel’s brand teams can manage positioning, marketing, and messaging systematically across the globe using process and technology. The third member of the triumvirate of global growth management is measurement. Metrics become more important than ever as global brand owners like Brown-Forman face up to the challenge of global marketing resource allocation.
“When brand sales were 85% in the United States, it was easy to understand how we would expend our available human and financial resources to grow the brand. But the brand is now in over 120 countries. We have to be smarter about how we continue to grow the brand and how we grow our other current and future one million case markets around the world.”
Mike suggests that four factors measure global brand growth metrics:
• Focus on brand consistency and continuity by sending consistent brand-building messages that resonate around the world. This requires investing in the development of a consistent brand-building model for the company’s global talent to utilize.
• Develop adaptations of the model in countries and regions, and apply them in pilot form as proofs of concept. Demonstrate that the model actually works on the ground and qualifies for investment. China provides a good example.
“We have developed a brand-building model in China that combines tactical choice, channel selection, and geography focus. We grew the brand on-premises (nightclubs and bars) in large and midsized cities around China using promotion rather than advertising. We developed the model collaboratively with our Chinese and Asia Pacific in-market teams, activated the model in a controlled fashion, and collected the results. From there, we were able to build the business case to sell the corporation and local team on investing a larger percentage of resources against China.”
• Become expert in data collection, data analysis, and data modeling to effectively allocate resources. The global team might develop similar models for Australia, Brazil, or Russia. It must be able to measure accurately the return the brand can generate market-by-market and overall in the short, medium, and long terms from the resources it allocates to the operation of the global brand-building model.
• Underpinning the successful application of these strategic disciplines are highly talented marketers who are motivated brand champions in every country and who are aligned with global brand process disciplines.
“As the brand grew in the early days, we were less systematic in allocating people and dollars in potential markets. Now it is becoming incumbent on us to take an analytical and strategic approach: we have to be right about it, we have to measure it, and we have to adjust. We have to exercise this approach to decide not just which countries to invest in, but also what programs to invest in. Is it above the line (advertising) or below the line (pricing and promotion)? Is it on-premises, is it off-premises, or is it more feet on the street?”
This is precisely the point in the marketing process where data and technology start to make a massive contribution. In a global brand-building environment, there are inevitable variations in the amount and quality of the data that is available. Point-of-sale purchase data streams, panel data, and other standard forms of information flow are just not always available. The analytical and modeling tool kits must be able to adapt to and deal with these different data environments. Global currencies such as the brand engagement point methodology (refer to Chapter 5) must be developed so that a measurement unit in China can be compared directly with a measurement unit in Brazil or the United States. Technology in the form of statistical packages, advanced analytics, and data modeling must be applied to develop priorities from a vast range of brand, country, channel, and program data results.
In data-rich environments such as the United States, the same technology and analytics can help the brand make resource allocation decisions that support groundbreaking innovation.
“We are in the third year of our NASCAR program, the largest single program that Jack Daniel’s has ever sponsored. We believe it is important that we put the proper metrics in place to make sure we are getting a rewarding return on our investment. Before we extended an agreement with Richard Childress Racing, we conducted an in-depth consumer tracking survey to determine whether our NASCAR involvement was helping to build our core brand measures. It showed we were getting more NASCAR fans and people in NASCAR markets—not only in the United States but around the world—interested in our brand. So, it has been the most in-depth program measurement undertaking that we have ever tracked. We track not just intent to purchase, but also our image attributes and ratings on key predictive measures such as “Is the brand for people like me?”, “What brand I would recommend to a friend?”, and, very importantly, “Is it a responsible brand?” We use exactly the same metrics in a tracking study that measures the same variables everywhere around the globe. In this way we can make local investment decisions (like NASCAR) from a global framework and manage a very complex set of choices. We can also measure long-term values such as brand equity so that we never risk the long-term future of the brand by eroding its equity for short-term sales results.”
The success of NASCAR/JDTW (Jack Daniel’s Tennessee Whiskey) partnering in the U.S. led to a similar new 2006 sponsorship in Australia with V-8 racing.
You Can Maintain Your Global Brand Authenticity and Still Evolve
Jack Daniel’s brand essence lies in its history and authenticity. In the “world of the drinker,” the brand essence also revolves around its role of making friends in a contemporary, fast-changing global setting. How is it possible to balance these two vectors? The solution is to separate the delivery medium from the brand message and not confuse the two. While the brand essence is unchanging, the selection of media and communications, and how consumers choose to consume media, is changing dramatically. Policies and practices must keep up with the change. Mike cites a simple but dramatic example.
“If you click on NASCAR.com, you will see that the Jack Daniel’s brand is very visible and very active on that website. It is an enormously popular website, because NASCAR fans around the globe come here to get their information. Featuring the Jack Daniel’s brand on a website other than our own is just something we have never done before. However, making friends with NASCAR fans is important to brand growth, and so we have to be flexible enough to make sure that our policies don’t put hurdles in the way we keep up with our consumers. We’ve not only initiated a presence on the NASCAR website; we’ve evolved it. Every Friday on NASCAR.com, for example, Clint Bowyer, our driver, writes a letter about what’s going on in his life. This is consistent with our guidelines of trying to be friends, or telling versus selling; we give our consumers a look into Clint’s life and his challenges rather than just trying to sell Jack Daniel’s. This whole idea of just keeping a wonderful dialogue with consumers, in new modalities and contexts, with a voice that is authentic for the Jack Daniel’s relationship, is a really interesting everyday challenge for us.”
The Harvest of Brand Equity in the Global Marketplace
Mike Keyes points out that not many spirits products are truly global brands; they may be available globally, but they do not communicate the same brand experience everywhere. They may lack investment in a global brand framework or the rigor in its implementation. Mike suggests:
“At some point in time, for many other brands, sadly someone cut a corner or someone positioned the brand in one country in a way that’s not even similar to the positioning in another country, or someone discounted the price of a brand that’s positioned as super-premium elsewhere in the world.”
These practices are destructive to global brand equity.
There is immense long-term cash flow and profit stream from the investment in global brand consistency, supported by processes, frameworks, data, metrics, and technology. After the global platform is built, the brand team can enter new markets such as China—not by reinventing the brand for the market, but by adapting a global toolkit and success model to local consumer and channel needs. As soon as the measurement system is in place, the brand team can make informed decisions about both level of investment and marketing mix.
“We have proven that Jack Daniel’s is able to achieve an attractive return on investment in each of our expansion markets because we’ve invested in brand equity and we are diligent about maintaining it. Technology really has begun to help us succeed. Today, we do more of our research through the Internet, so we can talk with more consumers very quickly. We can show consumers advertising and ask for their reaction. We can test cross-geography and cultures so that we are not communicating in ways that upset our consumers, but confirm they can relate to our messages. This is how we adapt quickly yet don’t change our foundational building blocks.
“While Jack Daniel’s is rooted in both our production locale and the ‘drinker’s world,’ there are very few new Jack Daniel’s marketing managers who, when they first see some of our Lynchburg-based advertising, featuring the whiskey makers, say, ‘Boy that’s just what we need in my market.’ They are so used to ads from other alcohol beverage brands being either more rational or more based on lifestyles or the latest fashions. But we demonstrate scientifically and through business results that Lynchburg advertising can create a wonderful platform and tension with what consumers see and hear from other brands that it actually shows how differentiated—in a positive way—our brand is. When we first enter a market with the traditional Jack Daniel’s approach, the local marketing teams are skeptical, but many would kill us if we ever tried to take it away now. That’s the power of the global brand framework, technology, process, metrics, and global brand equity.”