Brandinavia: Why Nordic Brands Rule

How did this small geographic area in northern Europe, comprised of countries with little political capital, become such a branding powerhouse? The story starts around AD 900, according to the book The Viking Manifesto: The Scandinavian Approach to Business and Blasphemy by Steve Strid and Claes Andreasson (Marshall Cavendish, 2008). The authors point to the Vikings as the admittedly barbaric forerunners of contemporary Vikings: “The Viking is more soft spoken, but alive and well. Without any army to speak of, they still invade with a better idea and a new approach to marketing, advertising, culture and corporate culture.” The book’s premise is interesting: that the Viking philosophy survived and has been updated, resulting in modern business success.

With this concept in mind, it is useful to take a look at modern Scandinavia. Each country has a unique culture, of course, but they are all bound by their Nordic roots and their belief in socialist democracy. Scandinavian countries support their citizens from cradle to grave. A high standard of living, free health care, free higher education and government-supported retraining in the event of job loss are all components of the social system. It comes at a steep price, however: personal tax rates can reach 50 percent or 60 percent. What does this have to do with brands? Since people are essentially taken care of, the countries can focus on commercial issues. Corporate tax rates are low, and Scandinavian governments encourage investment and foster business growth. Scandinavian companies aggressively export their products, and that means they need to compete effectively on the world stage. Having the ability to compete is one thing, but the real question is, can you make something the world wants to buy? Here, Nordic brands have excelled. As a region, Scandinavia has become known as a center of good design. As early as the 1950s, “Scandinavian design” emerged as a defined style. While the term primarily applies to furniture, Scandinavian design represents a larger movement reflected in simplicity and elegance of design along with a focus on affordable functionality. Outstanding design remains a cornerstone of Scandinavian brands today, whether it is the clean cleverness of the Absolut vodka advertising campaign, the brilliant interconnectivity of LEGO pieces or the streamlined beauty of IKEA furniture. Just as important, makers of Scandinavian brands have been exceptionally innovative. The Swedish vodka Absolut entered a marketplace dominated by Russian vodkas, not by creating a superior product, but by introducing breakthrough packaging. Absolut produced upwards of 1,400 individual ads focusing on the clear bottle itself in a campaign that won more than 350 awards worldwide, catapulting the vodka to its position as the third largest premium spirit in the world. The Finnish company Nokia, which resulted from the merger of a rubber and cable company in 1967, created the first car phones in 1982, designed to run on the world’s first international cellular network, Nordic Mobile Telephone. By 1998, Nokia was the world leader in mobile phones. Nokia was ranked fifth in the 2008 Best Global Brands list. Pharmaceutical company Novo Nordisk, created through a 1989 merger of two Danish companies, is a relatively small, niche-focused company on the world stage. But the company, known for its social and environmental responsibility, created the world’s first insulin preparation identical to human insulin and now does business in 80 countries worldwide. The Norwegian cheese brand Jarlsberg began modern production in 1956, based on a recipe from 1830. This distinctively flavored, medium-fat cheese with holes has become a major export success story. Jarlsberg is now exported to Australia, Canada, the EU and the United States, where it has become the number-one brand of specialty cheese. Arguably, the most prolific producer of word-class Nordic brands is Sweden. Swedish brands include Absolut, Astra (which merged to become AstraZeneca), Brio, Ericsson, H&M, IKEA, Saab, Scania and Volvo. And let’s not forget the renowned band brand ABBA, recently rejuvenated by the hit movie Mama Mia! One reason there are so many well-known Swedish brands is that Sweden is simply more aggressive than its Nordic brethren, according to Nicholas Ind, author of the book Living the Brand (Third Edition, Kogan Page, 2007). In a 2002 article comparing Norwegian and Swedish brands, Ind says, “…as soon as they have a good business base within Sweden they look to capitalize on the growing power of their brands. In many cases this is surprising, because internationally there have been no historic associations with Swedish vodka or clothing. Rather these brands, often in their own idiosyncratic way, have established markets that no one knew existed.”
	But don’t count out the other Scandinavian countries. “In Finland, we love brands,” says Alexander Stubb, a member of the European Parliament, in a December 2007 interview withBlue Wings magazine. He says Finnish brands, regardless of industry, have three things in common: “They are good products. They have an interesting story to tell. They know how to market their products.” Stubb sees “a bright international future for many Finnish brands” because traditional brands such as Marimekko “are in the middle of a generational shift in their management. The 30- and 40-somethings have been brought up in an open, international market. They have studied and worked abroad before taking over major companies in Finland.” Scandinavian brands occasionally compete with one another on the world stage, but it seems as if their common heritage and close geographic proximity keep these countries well-grounded and cooperative. After World War II, for example, the national airlines of Denmark, Norway and Sweden agreed to form a uniquely regional carrier called Scandinavian Airlines, which later became SAS. While SAS was for decades a major international carrier, it has had its share of economic troubles in recent years. Still, it remains the largest airline and travel group in the Nordic countries and owns four airlines. Scandinavia itself has not been unaffected by the world’s economic ills either. In fact, while the United States has dominated headlines, Iceland had its own version of a banking meltdown recently. The other four Nordic countries came to their brethren’s aid with a US$ 2.5 billion loan, which was added to a US$ 2 billion loan from the International Monetary Fund. Iceland got some much-needed relief. It is apparent that even in the face of a catastrophic crisis, Vikings stick together.

Remy Martin:::"Things are getting interesting"

Rémy Martin was outspent by its top competitors in terms of adspend, and in the autumn of 2008 embarked on an innovative and inventive out-of-home campaign as part of its "Things are getting interesting" campaign to increase its share of voice in the liquor category.

The brand launched an interactive out-of-home campaign to generate buzz and drive potential Rémy consumers to retail locations. The OOH strategy included a three-tier approach beginning in September 2008 via 20 media channels in five US markets. The brand wanted to create a buzz about the brand, with references made to illegal drinking dens of the 1920s.

The first phase included traditional OOH formats to create impact and build reach via highly trafficked areas with wallscapes (large posters on sides of buildings), bulletins, branded trains and station dominations.

The second phase used formats to engage consumers and encourage purchasing via street level adhesive posters, graffiti murals, 3-Dstreet graphics and graffiti gates. Experiential media included night time projections and aninteractive 3-D window equipped with a virtual bouncer, making it look like an exclusive night-spot. Digital underground tunnel projections featured a 15 second spot providing passengers with a glimpse into the ‘Speakeasy scene’ as their train moved through the tunnel.

The final phase was designed to drive traffic to retail locations through street furniture within a five block radius of key liquor stores and bars.

Research conducted post campaign found that the out-of-home media had a direct influence on top of mind awareness. 50% of white and 62% of African American consumers recalled seeing the ads. 65% of all respondents recalled specific formats. 68% of all respondents agreed they were more likely to drink Remy Martin after seeing the advertising.

BRAND:Remy Martin

BRAND OWNER:Remy Cointreau

CATEGORY:Drinks (alcoholic)

REGION:USA

DATE:Sep 2008 - Nov 2008

AGENCY:La Comunidad

MEDIA CHANNEL

MyToys.de:::Three dimensional QR codes

MyToys.de is one of Germany’s largest online toy stores. It wanted to promote Lego, one of the company’s leading products and drive people online to the Lego section of the website.

MyToys.de created an interactive outdoor campaign that incorporated the playful elements of Lego. The campaign created three dimensional QR Codes using real Lego bricks. Passers by could take a picture of the QR code with their mobile phone which would be decoded into a message revealing a suggested imaginative constructions that could be built with the Lego bricks that made up the code. There was also a link to the MyToys.de site with an option to buy the corresponding brick set.

Some 49% of all online visitors to the Lego section of MyToys were achieved through the campaign, with the Lego brick boxes outselling the non-advertisers Lego by 100%.

BRAND:MyToys.de

BRAND OWNER :MyToys.de

CATEGORY:Retail

REGION:Germany

DATE:2009

Agency:Lukas Lindemann Rosinski

MEDIA CHANNEL

Five ways to manage customer loyalty

Managers are typically taught to things that can be easily quantified and reported on a balance sheet. Stop for a moment to answer this fundamental question: "What is the purpose of any business?” On the face of it, this question seems pretty easy to answer. Most managers would answer: "To make a profit."

But that's the wrong answer. Profits are an outcome. They only tell us if our business strategy and execution are viable.

Peter Drucker, widely considered the father of modern management, argued that the common belief that creating profits was purpose of a business was not only wrong, but harmful. It causes us to make bad business decisions and lose sight of those things that delight customers. He summed up the actual purpose of business this way: "There is only one valid definition of business purpose: to create a customer."

The mark of success for a firm, and therefore the ultimate objective of its strategy, is to satisfy customer needs and wants at a sustainable profit. Whatever strategy and tactics we employ to gain competitive advantage must ultimately be based upon our profitably providing a better solution for customers.

Managing Customers as Assets

Customers are the ultimate asset for all profit-making organizations. They provide all of a company's real value. Paradoxically, customers are one of the few aspects of a business that are not managed as an investment. This oversight negatively impacts profits in multiple ways, including inefficient resource allocation (via suboptimal company-customer interactions); product design and launch failures (via poor fit with customer needs); and unstable cash flows (via increased customer defections and price sensitivity).

Therefore, if customers are the primary asset, the ultimate aim of any business strategy should be to maximize the net present value (NPV) of customers to the firm. While on its face such a statement may seem academic, this is much more than a theoretical maxim. Researchers consistently find firms that adopt a customer lifetime value framework for customer selection and resource allocation strategy significantly outperform their competitors in profits and shareholder value.

But this doesn't just happen. It requires the successful integration of all areas of management -- accounting, finance, marketing, operations, and human resources -- in profitably addressing the needs of customers. Below is a good place for us to begin.

Accounting. Analyze the profitability of your customers. Research conducted by the Harvard Business School finds that most customers for most firms do not produce an acceptable rate of return (i.e., they are not profitable). In fact, for most companies, the top 20 percent of customers in terms of profitability produce all of a company's profits, the middle 60 percent break even, and the bottom 20 percent lose the company money. Paradoxically, revenue is a terrible predictor of customer profitability. The highest revenue customers tend to be the most profitable or the least profitable.

Managers need this information to effectively run their businesses. They need to know who their profitable customers are and what behaviors are associated with profitability.

Finance. Incorporate customer metrics in your financial models when making investment decisions. When prioritizing investment decisions, pay attention to the projected impact on the future value of customers to the business. Analysts cannot consistently beat (or even meet) the market -- in the language of finance, they don't add alpha. Research finds that this is because intangibles that reflect the strength of the company-customer relationship are excluded.

For example, analysts are generally skeptical of the impact that customer satisfaction has on a company's market value. Analysts tend to view customer satisfaction information as "soft" data because they don't understand how satisfaction data links to a company's bottom line. Because it is intangible, they frequently regard it as a money drain.

Our own research found that incorporating customer satisfaction into standard models used in investment finance significantly improved the ability to pick winners versus losers. And the winners dramatically outperformed the market by 2 to 1.

Marketing. Put more focus on current customers. Marketing activity has largely focused on persuasion -- the ability of the company to change someone's attitudes or behavior. And while that is a critical role of marketing, too often this gets translated into simply persuading someone to try something for the first time. An old saying goes, "A good salesman can sell anything once. The trick is getting them to buy again."

But it is not as simple as focusing on customer retention either (i.e., getting them to come back). Today, customers buy competing products from multiple companies with seemingly no real loyalty. In other words, customers divide their wallets among competitors.

Consequently, one of the most important elements in improving financial performance is getting customers to allocate a larger share of their wallets to the firm. A McKinsey study found that focusing on share of wallet had a 10 times greater impact than focusing on retention alone. Research demonstrates that the strongest driver of share of wallet is customer loyalty.

Therefore, the primary goal of marketing must be the creation of loyal, long-term customers out of first-time or occasional buyers. Accomplishing this requires a clear understanding of what makes customers want to be loyal. Gathering and understanding customer needs is the job of marketing.

Operations. Make certain that company-defined quality and customer-perceived quality are aligned. Because operations are often focused on the creation and distribution of products and services, there is a natural tendency for managers to focus on meeting technical specifications.

While the quality movement of the 1980s has done a great deal to establish standards of technical excellence, we have a long way to go to achieve user-defined excellence. It matters little if a firm is meeting its internal guidelines if these are disconnected from the customer.

We must always remember that the customer did not design the process, and they don't care that the system we have designed makes our lives easier. It needs to make customers' lives easier. So when designing and implementing any process, we need to experience the offering as customers do (i.e., shop our own stores).

Human Resources. Establish a climate for service in the organization. By service climate, we mean the procedures and behaviors that get rewarded and supported within the company with regard to customer service. Research consistently demonstrates that service climate is positively linked with lower turnover, higher customer satisfaction, and improved financial performance.

While we all pay lip service to the importance of employees in serving customers, too often we manage in terms of their operational productivity at the exclusion of all else. How many employee evaluations actually include customer metrics as part of the formal criteria? The reality is that most employees are rewarded for completing tasks. Few, however, are rewarded for making customers happy.

A Holistic Strategy

Too often we as managers think about strategy in terms of our own functional area: marketing strategy, operations strategy, finance strategy, etc. But each of these strategies should exist as part of a holistic company strategy. A winning strategy focuses everyone in the organization to come together for one cause: to profitably create and keep a customer.

Timothy Keiningham is a world-renowned authority in the field of loyalty measurement and management, and Global Chief Strategy Officer and Executive Vice President for Ipsos Loyalty, one of the world’s largest business research organizations.

Lerzan Aksoy is an acclaimed expert in the science of loyal management, and Associate Professor of Marketing at Fordham University. They are coauthors of a new book, with Luke Williams, entitled Why Loyalty Matters and creators of LoyaltyAdvisor, a web-based tool that analyzes your loyalty across multiple dimensions proven to link to your success. LoyaltyAdvisor is the product of a global effort, the most comprehensive study of loyalty ever conducted.

Consumer Power

The Cola Bull

Wherever you go, the name of the game is known in the cola world, Coke vs Pepsi.

Except the USA market, the market share difference is amazingly spacious in most of the world markets where the major 2 players are present.

For example, in Lebanon, Pepsi dominates 75% of the market while Coca-Cola barely manage to get the leftover of 25%, without forgetting about the many players that entered and left the market and with no extra harassment to the big guys, left without making much noises, while some others are still there and gaining market shares in remote locations where brands does not mean anything to the consumer.

2 side players made it to the Lebanese market. Virgin Cola was there in 2003/2004, I still remember the big dreams of the importer while meeting him over a job interview, he wanted to beat both big brothers and be #1 in no time, unfortunately, without knowing any specific reason, the whole brand evaporated from the Lebanese market.

Another player came back in 2008 after exiting the market for so many years, its RC-Cola (check my previous 2 postings about this : http://tr.im/rLFB and http://tr.im/rLFX), but contrary to Virgin guys, RC-Cola is distributed thru the correct channels along with other drink products, mainly juices.

Now back to the bigger part the game, unlimited number of companies and retailers tried to launch their Cola brands but no one really was to reach close to the global volumes of Coca-Cola and Pepsi. (wikipedia list of cola brands worldwide)
And while all these small players were trying their luck in this hard to compete industry, the big boys never stopped being so creative on their packaging (Pepsi new logo launched in October 2008 and the non-stopattractive Coca-Cola cans).

Then came the Red Bull Cola which i will call the Cola-Bull, exactly like the stock market, it will take the cola market to new heights while riding the bull.

Red Bull Simply Cola also has slightly more caffeine, at 45 milligrams per 355ml (12-ounce) can, than Coca-Cola (34 mg) or Pepsi-Cola (37.5 mg), but less than Diet Coke (47 mg) or Pepsi One (54 mg) or Mountain Dew (54 mg). The cola contains significantly less caffeine than Red Bull’s eponymous energy drink (80 mg per 8.2 ounces). It also lacks the artificial flavors, colors, and phosphoric acid commonly used in commercial colas. Red Bull Cola is packed in 250 ml (8.4 fl. oz.) and 355 ml (12 fl. oz.) cans.

As of 2008, Red Bull Simply Cola is available in Austria, Czech Republic, Egypt, Switzerland, Spain, Poland, Germany, Bulgaria, Belgium, Italy, United Kingdom, Ireland, Thailand, Romania, Hungary, Russia, Canada and the United States.

Why do I believe that Red Bull Cola will make it?

Red Bull when first launched its energy drink, proved to the whole world that a company can make it simply by having one simple product with full focus and dedication, and it positioned itself in both retail and horeca (hotels-restaurants-catering) sectors, and without any hesitation it went beyond all expectations on shelves and in night-life mode without giving a slight chance for both Burn and AMP, the energy drinks respectively coming from Coca-Cola and Pepsi.

Today Red Bull is everywhere, and has its own displays in every single retail outlet and night club across the globe, they give away thousands of fridges every year, let their branded cars run all day long on the streets, they throw millions of free cans in schools, sponsor extreme sport events and do whatever it takes to be number one.

Of course, like the Cola war, thousands of energy drink brands saw the light, some of them made it thru tiny channels some of them just died the next morning.

Having said the above, it is not gonna be hard for Red Bull to position its new Cola with an excellent visibility when it comes to retail stores, and the same technique will be applied to night clubs, where they own their fridges. An easy game for them, while the big guys will be thinking how to stop this invasion of Red Bull in the cola world and maybe even going beyond that and try to hit hard on the energy drink side in order to make them lose focus.

UPS:::'free movement'

UPS isn’t a brand one would immediately associate with the glitz and glamour of the fashion world. But, without the world’s largest package delivery company, there would be no garments for fashionistas to ogle on the catwalks.

Deciding to make more of this link, UPS sponsored a design contest at the Royal College of Art challenging up-and-coming designers to best represent the UPS brand, its culture and heritage along with the concept of 'free movement'.

The winning design – a man’s knee length jacket that could be transformed into a skirt - focused on alleviating problems faced by the urban traveller. Its multitude of zips allowed for easy item storage and judges praised the garment for its quality and flexibility -

both core elements of UPS’s brand identity. All shortlisted designs were hosted at a dedicated site www.upsalamode.com.

The RCA design competition follows successful fashion partnerships undertaken by UPS in Belgium, China, France, Germany, Italy, Poland and the US. By supporting young designers, UPS hopes to reflect the company’s commitment to serve the fashion, textile and luxury industry.

BRAND:UPS

CATEGORY:Corporate

REGION:UK

DATE:Jan 2009 - Jul 2009

Agency: Edelman

MEDIA CHANNEL

Orange:::Give and you will receive

Orange wanted to encourage young people to give back to their community. Having teamed up with pro-social production company Rockcorps in 2008, it wanted to continue the partnership for 2009 but this time in collaboration with Sony Ericsson and Channel 4. Young people are again being encouraged to volunteer in community-based projects in return for concert tickets.

To get a feel for young people’s attitudes towards volunteering, Orange conducted a ‘Society Matters’ survey, via the top student website and the RockCorps site. 1,547 16-24 year olds responded providing Orange with valuable data with which to plan this year's campaign.

In return for doing 4 hours of voluntary work, participants will be rewarded with free tickets to see pop sensation Lady Gaga and N-Dubz. As an extra incentive to young people to get involved, the celebrities will also be participating in the projects.

The voluntary events, including the creation of a woodland retreat for residents of Tower Hamlets in London and regeneration projects around Moss Side in Manchester, will be broadcast on Channel 4 as part of its T4 summer schedule. After the London and Manchester concerts the RockCorps campaign will be rolled out to Paris.

Overall eight thousand Britons and five thousand Parisians will take part in up to 150 charity projects over the summer. Last year volunteers worked 20,000 hours at 55 projects, helping 41 charity partners. 96 percent of those who took part last year intend to volunteer on an Orange RockCorps project again, and 57 percent said they would volunteer for their local community without the incentive of a ticket.

BRAND:Orange

BRAND OWNER:France Telecom

CATEGORY:Telecoms/ Mobile

REGION:UK

DATE:May 2009 - Dec 2009

Agency:Fallon

MEDIA CHANNEL

Sony's cross-division Blu-ray marketing strategy

Sony UK is working on promoting Blu-ray, the optical disc format expected to replace DVD, by combining marketing of its TVs and Blu-ray players with upcoming film releases on Blu-ray.

The consumer electronics company will tie up with content coming from the Sony Pictures content arm.

Carl Pring, Sony's head of brand and advertising, said Sony would run Blu-ray campaigns towards the end of the year to coincide with the release of major films Terminator Salvation and Angels & Demons.

‘What you will start to see is campaigns across the various companies. We can tell consumers about the greater thrills and excitement they will see with Blu-ray releases on our Blu-ray products.'

Pring said the Blu-ray push would be the ‘first of many spanning different Sony divisions'.

Yellow Pages - Live Search Category Demonstrations

Agency: SAA/Y&R Tel Aviv

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