Design Driven Brand Strategy by Karin Lycke

Design Driven Brand Strategy HDK University of Gothenburg / Business & Design KMD666 Design, Branding & Marketing / 2014 Spring semester Lydia Dahlgren & Karin Lycke

Table of contents

1. Introduction.......................................................... s. 3 2. Background.......................................................... s. 3 3. Theory.................................................................. s. 4

3.1 Marketing and branding â&#x20AC;&#x201C; the inseparable pair.............................. s. 4

3.2 R elevant theories connected to the study...................................... s. 6

3.3 The evolution of design................................................................... s. 8

3.4 The connection between marketing, branding and design........... s. 12

4. Analysis.............................................................. s. 14

4.1 Brand architecture......................................................................... s. 14

4.2 SWOT............................................................................................ s. 14

4.3 Target customer............................................................................ s. 16

4.4 Competitors.................................................................................. s. 20

4.5 Conclusion of the analysis............................................................ s. 21

5. The strategic pyramid......................................... s. 22 5.1 Theory and background................................................................ s. 22

5.2 Implementation of the strategic design model.............................. s. 24

6. Constructing the new brand strategy................. s. 30 7. Conclusion......................................................... s. 32

1. Introduction This report is the process and outcome of the assigned task, in the course design, branding and marketing, to develop a design-driven brand strategy for the company Intellego Technologies. The focus of the study has though been narrowed down to mainly concern its sub-brand Smartsun. This focus have been chosen for the purpose of relevancy and implementation potential. It is relevant in that sense that it can solve some of the current problems of today and be executed in a near future. This is important for the company as it needs to expand within a short period of time in order to satisfy stakeholders, potentially selling the brand further on. The implementation potential follows the level of relevancy, as it is more likely and

possible to implement the new brand strategy if there is a high level of relevancy to back it up. Through reflection and critical discussion of what branding and “design-driven” branding is in the current context we have formulated a perception of what a design-driven brand strategy is. By analysing and evaluating the current situation, we could reach a problematization and through analysis find areas for improvement. By the use of design and marketing methods we have been able to give solution to the problematization and develop a new brand strategy for Smartsun.

2. Background Intellego Technologies, founded in 2011, is a Swedish company based in Gothenburg at the University hospital of Sahlgrenska. The company’s main activities are research and development, with a focus on UV indication technology. At current state, the company has one patented technology, which is the focal point of the company. It is an ink that changes color when exposed to UV radiation, to indicate if it is time to put on more sunscreen or stay out of the sun, in order not to get damaged by the UV-light. Intellego Technologies has one sub-brand; Smartsun, that uses the ink in their product, which currently is a plastic wristband. Smartsun has aimed to create the wristband as being a self-explanatory and easy-to-use device, in order to help people monitoring the sun exposure they receive. The uniqueness of the technology is that the sunscreen is directly taken into consideration, since it is applied on the body as well as on the wristband. The wristband is not only sold under the label of Smartsun, but the company

also sell the product and ink to other brands who has their own labels on the product. During this case, we come in at a stage when the Smartsun brand wish to further expand its business in order to be able to reach the goal of desired development within five years. This report is an extension of a previous study concerning the company’s business strategy, which was developed during the course in Design, Innovation and Strategy. In the study, we were able to see that the CEO, Cleas Lindahl, had problems separating the parent brand from the sub-brand. From the communication it was difficult to distinguish their different purposes, brand values and characteristics. With this background, it is obvious that the two brands are in need for separation and development of a clear brand strategy. We will in this case focus on the development of a brand strategy for the subbrand Smartsun, with a design driven approach.

3. Theory We will in the following chapter describe how the notions of marketing and branding have evolved throughout the history and what the perceptions of these fields are today. Following this chronology of the background, we will elaborate on certain main approaches and ideas within marketing and branding, that are relevant to the study. We also present the evolution of design, which has evolved from being seen as the mere creator of artefacts to the maker of meaning. As a conclusion, we will make reflection and definition of how a design driven brand strategy could be perceived as, based on the presented theory.

3.1 Marketing and branding â&#x20AC;&#x201C; the inseparable pair The concepts of marketing and branding have for a long time been paired together, where branding for the majority of time has been seen as the function of marketing. However, as Levy and Luedicke (2013) are arguing in their chronological odyssey of the shift from a marketing to a branding perspective within business strategy; marketing has instead become a function of branding. This new ideology is an expression from the gaining importance and interest of branding in the current management discourse, which has lead to a shifted focus where branding has entered the center stage. Today the brand is deeply connected and incorporated within the company, driving decision making in various levels of the company. The perception of brand has, as such, gained a much wider meaning and conception, making it, as Franzen and Moriarty (2009) describes it, a complex issue with a number of interacting marketing processes and relatively unclear set of interrelated components. The evolution of marketing and branding stems from the shifted focus in business strategy, which is closely linked to the current world of which they exist (Franzen & Moriarty, 2009). Looking to history we are able to see just how conducive the society and its context are for creating the contemporary approach of strategy. During the beginning of the nineteenth and early twentieth centuries the world was experiencing major technical development and innovation, deriving from the industrial revolution (Tadajewski & Jones, 2008). The urbanisation was also a result from the improvements within production and transportation. The industrial revolution, together with the urbanisation, created a new kind of society, which for businesses meant the potential of large-scale markets. It was within this new context, like Fullerton (1988) acknowledges, that the modern era of marketing commenced. The expansion of markets meant a need to distribute products more effectively, which consequently meant a need of better understanding of the distribution process (Tadajewski & Jones, 2008). Following this period, of seeing marketing as a function dealing with distribution, came the era of marketing as a concept concerned with customer orientation. 4

The growing physical separation between producer and buyer had lead to a need of better communication between companies and faraway strangers who were potential customers. This was realized through advertising, market research, better physical distribution, and expanded retailing. Market analysis had been used before but the methods of gathering, measuring and evaluating had greatly been improved (Fullerton, 1988). Every action was directed towards the customer, as it was believed that meeting the consumerâ&#x20AC;&#x2122;s need was the starting point for successful and profitable marketing (Levy and Luedicke, 2013). The field of marketing started to apply psychological and sociological theories and methods to broaden the marketing research and practice. Wanting to better understand its customer, the companies also started to apply the ideas of segmentation as a marketing tool. It was furthermore during this period of time, with growing competition, that the notion of brand within marketing started to rise, which worked as a symbol and differentiation mark. However it was starting to become clearer to marketers that the consumers had certain brand images with more complex perceptions, thoughts and feelings connected to the brand. Marketeers started to formulate new perceptions, such as brand name, brand image and brand loyalty. This era of market ideology focused in short on customer orientation and branding, as a way of create and satisfy consumersâ&#x20AC;&#x2122; needs, within an expanding competitive market environment (Levy and Luedicke, 2013). In the current context of society the concept of brand has evolved in both meaning and value. Today the concept of brand has taken on an even more complex sociocultural phenomenon, where customers may consume brands personally, privately or join in a brand community and become part of the cocreation of the brand. It is the idea where people see beyond the mere brand, establishing further values of the brand by giving it certain brand personalities. As a consequence of the new possibilities and value of branding, it has entered the centre stage of marketing ideology. This has as such moved the con-

cepts of marketing and branding strategy to its current position, where marketing is seen as a function of branding (Levy and Luedicke, 2013). From having had more of a focus on product function we are today more concerned about establishing relationships with the customers, from the departure of the brand. Thus satisfying the customers’ needs and wants rather takes place within the framework of the brand (Urde, Baumgarth, & Merrilees, 2013). In order to build strong brands, Melin (2005) states, that a brand oriented approach is needed in order to succeed. Adapting the organisation to a brand-orientated structure requires the company to work with an inside-out perspective. Where the brand, with its emotional values and symbolic meaning, takes a central position of the decision-making all the way through the organisation, having a strategic key role (Urde, 1997). Whether companies chose to follow a more market oriented or brand oriented strategy depends on the vision of the company. The ones that aim to attract customers usually take on a more brand oriented approach, while the companies wishing to serve its customers by answering to unmet needs and wants usually instead takes on the more market orientation approach. External issues that for example can

affect the choice is furthermore the existing culture, competencies and resources. Urde, Baumgarth, & Merrilees explores in their article from 2013 the interaction of the two concepts of brand orientation and market orientation. The authors argue that companies are in need of a balanced strategy - a so called hybrid orientation. They take the example of Electrolux, which is a company that always starts with a consumer insight process but are still very careful to avoid making compromises with their brand. The CEO of Electrolux had in a discussion on the interaction between market and brand orientation said; “A brand that does not appeal to consumers becomes a problem.” Thus, to only have an inside perspective would be unsuccessful for many companies, however only to have an outside perspective and adapting the brand values to suit the customers needs would neither contribute to a prosperous business. After having established this evolution of the continuously inseparable pair of marketing and branding, are we then able to guess what they are to become in the future? Levy and Luedicke (2013) makes an attempt to do so by concluding:

“We propose that owing to an intensifying and globalizing competition branding may overtake marketing ideology as a more glamorous and sophisticated as well as virtuous idea. It means having a vision that is implemented by suitable forms of expression, tangibly, with imaginative language and artistic visualization rather than pursuing less inspiring commercial goals. Branding, like all other human activities, will vary with the motives of the brander.” (Levy & Luedicke, 2013)

3.2 Relevant theories connected to the study As the field of marketing and branding is ever expanding with new theories and implications, usually following, as we have seen, the current contexts and ideas of the society, we are focusing on a few selected approaches. These approaches have been chosen following the aim and purpose of the study. 3.2.1 Market segmentation – knowing your customer Market segmentation has for a long time been considered as being one of the most fundamental concepts of modern marketing. Tynan and Drayton (1987) argues that it is a key strategy which is essential to the development of the strategic plan for a brand. They look upon it as a tool for decision-making, for the marketing managers in their process of developing the appropriate marketing mix. By dividing total demand into homogeneous segments, businesses are able to explain and predict the response of the consumers, in a given segment, to a certain marketing stimuli (Tynan & Drayton, 1987). The concept builds on the logic that the customers demonstrate heterogeneity in their product preferences and buying behavior (Dibb & Simkin, 2001). How the segmentation is made, is based on the type of product, the nature of the demand, the method of distribution, the media available for market communication, and the motivation of buyers that the company is dealing with. This can be formulated into certain types of segmentation bases. Tynan and Drayton (1987) presents five major segmentation bases of such, which divides a market into different sub categories. These bases are rarely used alone, but rather as a combination of two or more. They are as following: • Geographic bases – in which markets are divided into geographic units. • Demographic bases – including segmentation studies based on age, sex, socio-economic group, family, size, life cycle, income, occupation, education, etc. • Psychological bases – in which personality factors, attitudes, risk, motivations, etc., are used to divide the market. • Psychographic bases – including lifestyle, activities, interests, opinions, needs, values and the like as market delineators. • Behavioural bases – including brand loyalty, usage rate, benefits sought, use occasions. (Tynan & Drayton, 1987)

In modern marketing the implementation process of the market segmentation usually follows three main steps, described as STP - Segmentation, Targeting and Positioning. In the initial step, the customers are grouped by the use of one or more of the base variables, where customers are grouped with those that have similar needs and buying behaviour. The second stage involves targeting, where the company evaluates the segment’s attractiveness and make decision of where the resources should be prioritized. In the final step, the company arranges a market offering for the chosen segment to match the requirements of the targeted customers. With this process companies are able to create value and offering to the customer. The market segmentation thus involves analysis, strategic thought, and clear recommendations, all with a clear customer orientation (Dibb & Simkin, 2001). 3.2.2 C ustomer satisfaction – delivering value to the consumer Herzberg presented in his article from 1968 a two-factor theory of motivation. It was first directed towards employees, to establish their satisfaction/dissatisfaction of the organisation and the working conditions. The concept aimed to measures how the factors met the employee’s expectations and motivations. The theory, with slight modification, has also later been applied by Naumann and Jackson (1999) but then with the aim to measure customer satisfaction, which is said to be obtained when values meets or exceeds expectations. The two factors that Herzberg (1968) established were the so called hygiene factor and motivator, which Naumann and Jackson (1999) have adapted, only replacing motivators with satisfiers. Naumann and Jackson says that for most products, there is a variety of product and service attributes which can be identified as hygiene factors or satisfiers. The hygiene factors are attributes which the customers expects to experience and be part of the product or service. Having an absence of these factors would thus result in customer dissatisfaction. The satisfiers on the other hand goes beyond customer’s basic expectations, and enables the company to create a unique contribution to competitive advantage. Examples of these two types concepts are shown in image 1, which is taken from the article of Naumann and Jackson (1999). By looking to the factors of customer satisfaction, it is possible to see that only to have a good product quality or a good service department, is not enough to create customer satisfaction. Customers rather chose those brands that are able to follow the hygiene attributes that meets their expectations and whose performance on satisfiers exceeds them.

Hygiene Factors and Satisfiers Hygiene Factors

Satisfiers

Credibility

Responsiveness

Reliability

Courtesy

Accessibility

Empathy

Delivery

Exceptional Quality

Accuracy

Personnel

• Trustworthy • Believable • Honest

• Product does what it is supposed to do • Caomany is there when needed • Basic competence –possesses necessary skills • Can be contacted quickly and easily • Convenient phones, location, hours, etc.

• Timely; meet deadlines

• Billing, invoice, orders, products, specifications, etc. as they should be

• • • •

Prompt service Immediate response to customers Individualized attention Quick complaint resolution

• Customers treated with respect and consideration

• Takes time to realy understand the customer’s situation and engage in joint problem solving • Provides ‘extra service’ • Durable • Technical excellence • Thoroughly trained • Knowledgeable

Image 1

3.2.3 Reality Gap – a barrier to become a powerful brand The term Reality Gap refers to the gap between a brand promise and customer expectations and actual customer experiences (Harripaul, 2013). The aspirational side to your brand is the way you hope to be perceived and the reality aspect of your brand is what people are saying and feeling about it. Your brand is therefore determined by the way customers perceive it and is only as good as people say it is. In the book The Brand Gap (2006) the author Marty Neumeier puts it like this:

In today’s competitive landscape, rising customer expectations has fast become a critical component of a brand’s bottom line. Instead of fretting over brand campaigns, companies’ brand-building efforts are more successful if they are directed toward the actual customer experience. A company cannot afford to spend its precious marketing dollars on a brand campaign only to see them wasted when the customer walks through the door. Closing the Reality Gap needs to be a top priority for brand reality is an important aspect of branding (Lee Yohn, 2014).

“Companies don’t build brands, consumers do by experiencing those brands, developing feelings for those brands and emotional connections to them, and talking about those brands with other people.”

In a perfect world the two facets would be in unison, and because actions speak louder than words, companies need to put brand values and attributes into action in order to shrink the Reality Gap. Through better, more relevant customer experiences in line with the brand values, managers can identify strategies to minimize incongruency and develop more powerful brands (de Chernatony, 1999).

3.3 The evolution of design What is the role of design in the context of strategy, branding and marketing? To figure this out we have to take a closer look at design as a concept and how it has developed over the years. 3.3.1 From design as styling to design as process Throughout the 20th century, design has been a later stage add-on, being synonymous to an aesthetic value in relation to artifacts. In the late 1960’s Charles Eames described design as “a plan for arranging elements in such a way as best to accomplish a particular purpose”. Business leaders placed the discipline of design in the category of ‘styling’. But during the later half of the twentieth century this perception of design has changed. The basis for the new definition was put forward around 40 years ago by the leading social scientist Herbert Simon who stated that “Everyone designs who devises courses of action, aimed at changing existing situations into preferred ones” (Simon, 1996). He believed that design was a powerful tool for change, not only a tool for styling products and communications. According to Simon, anyone who tries to improve a situation is a designer, you just need to find a situation to improve and then work through the creative process. This lead on to the contemporary concept of ‘design thinking’ in which business leaders have moved their view of design away from styling towards seeing design more as a process where they can benefit from designers way of doing and thinking and adopt the attitude and mindset. Design researcher Navarro (2014) stresses that especially the rise

of the expression “design thinking” and the growing influence of international design consultancies such as IDEO has brought design closer to the realm of business. 3.3.2 Design in relation to strategy In the fast changing marketplace where the only certain thing seems to be uncertainty – managers are looking for new concepts to solve their ‘wicked problems’ and the new role of design as a people-centred, problem solving process became a fashionable strategic tool in the beginning of the 21th century (Kimbell, 2011). Liedtka (2004) argues that design offers a different approach to strategy formation and suggests a process that are more widely participative, more dialogue-based, issue-rather than calendar-driven, conflict-using rather than conflictavoiding, all aimed at invention and learning, rather than control. Abilities that are often associated with designers are that they can visualize ideas and complex situations with a focus on the user. Therefore they are often aware and reflective of what is happening around them which makes them sensitive to trends and style because these aspects reflect peoples’ actual propensity of acting (Rylander, 2010; Tonkinwise, 2011). This designer approach is claimed to add value in the strategy process. A major shift can be noticed from 2007 onwards, since the concept business related to design appears more frequently in literature related to design, management and strategy, and researchers have started to write about business design focusing on design as a resource for business (Moore, 2010).

While design thinking sett the ball rolling for seeing design as a business asset to be used by managers to improve and design business, the role of design as a practice to add aesthetic value to products has remained important beside. The Danish Design Centre (DDS) claims that the management of design and the value added is defined by the design maturity of a company, e.g. how a company sees design. They place the different views of design in the formation of a ladder – the higher a company places on the Design Ladder (Image 2) the greater the strategic significance of design in the company and thus more value is added through design (Design Creates Value, 2007).

Stage 3: Design as process Design is a method that is integrated early on into the development process. The production focuses on the end user and makes use of contributions from a range of specialists. Stage 4: Design as strategy Design forms a part of the continuous renewal of the company’s operating model by furthering innovation. The design process is integrated into the company’s targets and it plays a major role at each stage of development.

Stage 1: No design Design is a negligible part of product or service development, and any design activities fall to professional groups other than designers. Design decisions are based on the personal operational or aesthetic opinions of those who are involved. The views of end users are hardly present or non-existent. Stage 2: Design as styling Design is seen solely as relating to the final physical form of a product, for example as style, appearance or ergonomics. It can be the work of a designer, but is often contributed to by other employees.

Design Ladder

Design as strategy Design forms part of the company’s strategy

Design as process Design is part of product development and other processes

Design as styling Design is used for improving the appearance of products

No design Design plays no role in product or service development

Image 2 9

Design Management professor Borja de Mozota (2003) argues that design can be managed and applied at three organizational levels: operative, tactical and strategic. For lasting connections to be created between design and strategy, design should have an influence at each of these levels (Joziasse, 2000). Operative: At the operational level design creates value for an organisation by differentiating its offerings. Successful design solutions are those that satisfy both the client’s and the customers’ needs (Borja de Mozota, 2003; Best, 2006). The more consistent design is used, the more efficient it functions as a competitive advantage (Borja de Mozota, 2003; Best, 2006; Best, 2010). For example, product development can be part of the operational activities. Tactical: At the tactical level, design can be used for identifying new business opportunities and generating unique product concepts (Joziasse, 2000). Design acts as a link between functions and coordinates the strategy in line with marketing, innovation and communication functions (Borja de Mozota, 2003). Strategic: At the strategic level, top management defines the overall business strategies, mission and vision of an organisation. Managing design at this level is about managing the contribution of design to the strategy formulation process. This is where design establishes itself as a strategic resource that operates and overlaps the business objectives and customer needs (Borja de Mozota, 2003). de Mozota (2003) further argues that successful design solutions are those that satisfy the customers’ needs. The more consistent design is used, the more efficient it functions as a competitive advantage.

According to Cooper, Junginger and Lockwood (2011) there is three paradigms of design’s relevance in business; Design Practice Paradigm, Design Management Paradigm and Design Capability Paradigm. The three paradigms are based on different views of designs role in strategy. Cooper, Junginger and Lockwood (2011) divide them into four categories; Design as Strategy, Design in Strategy, Design Strategy and Design Facilitating Strategy (Image 3). To conclude, there is a problem when trying to define design because there is no established definition. One challenge in creating definitions is that design refers both to the process and to its outcome (Tether, 2004). Design practice (doing), the hands-on work that designers do, are used in the design process. Design methods can inform strategy formulation, and also at the same time, competing with ‘high design’ can be a strategic position itself (Stevens et al, 2008). Design as outcome or styling and design as process or strategy are clearly working in close relationship. Design can take on different hats and roles – but the conclusion is that – using design methods can be helpful in the creation of a strategy that can meet the demands of today’s marketplace and a clear strategy can be helpful in the delivery of high quality product or service design. Brand consultant and writer Marty Neumeier (2006) argues that it is no longer enough to get better on today’s market, we have to get different in order to survive. Differentiation is the most powerful strategy in business today, where design in general is the one most important factor in creating that differentiation.

Designs role in strategy DaS

DiS/DS

DfS

Function

Design practice paradigm

Design management paradigm

Design capability paradigm

Adds value through...

Aesthetics, product innovation, differentiation

Interpreting the need, writing the brief, selecting the designer, managing the design and delivery process

Humanistic, comprehensive, integrative, visual approaches

Solves problems of design relationg to...

Products, brands, services

All aspects of design in the organization, but principally products, brands and service

Change in environment, society, economy, politics and organizations

Develops and fosters design competency among...

Top management, board members, design leaders, design consultants, design team, cross disciplinary teams

Top management, board members, senior management, design management consultants

Every area of the organization

Achieves objectives of...

Designing products and services that are beautiful, functional, create a brand and make a profit for the organization

Managing design to deliver strategic goals

Delivering sustainable organizations in the context of societal and global wellbeing

Image 3 Key • (DaS) Design as strategy – focusing on it as a dominant paradigm, used to achieve competitive differentiation • (DiS) Design in strategy – one of many functions • (DS) Design strategy – what you do with design • (DfS) Design facilitating strategy – provocation, imagination, facilitation, organisational change

3.4 The connection between marketing, branding and design in strategic planning â&#x20AC;&#x201C; What is a design-driven brand strategy? Trying to define the characteristics of a design-driven brand strategy is most complicated, due to the various definitions of each concept separately. What is defining a design driven brand-strategy is depending on its context and what it is targeting. We can see that design can be seen in different ways and that it can be added at different levels in an organization. Depending on how design is perceived and how we make use of it, we can achieve different objectives. What combines the different views of design is that it is user-centred or human-centred. What then drives a strategy in a design way is the use of various design methods which all have in common that they are user-centered. A design-driven strategy could be viewed as containing four different areas which are each others opposites (Rylander, 2014), (Image 4). Depending on which design-driven strategical approach the company chose to have, decides where in the model they are placed. It is dependent on what the company is trying to achieve and the knowledge as well as the resources they have. Usually you use a combinations of the different approaches, depending on the earlier mentioned factors. If you use design as a process you most certainly also use design as a tool within that process, and vice versa. This also accounts for the other areas, the optimal approach is thus to keep a balance between all the opposites (Rylander, 2014).

To keep in mind when brand building is that a company should have a clear idea of its core values and the environment in which they are operating in, i.e. customers, competitors etc. In strategy building, design could be seen as a tool for framing who you are addressing, as well as a process in the strategy development. Roscam Abbing and van Gessel (2008) makes a metaphor for designâ&#x20AC;&#x2122;s part in building a brand strategy by describing it as the conductor of a symphony. Where all parts that build the brand; products, communication, environment and behaviour of the employes should play in harmony. Whether you design a brand strategy or marketing strategy the use of design methods are there to help you in all different stages of the process of creating that strategy. From the presented theories we are able to see that a design driven brand strategy aims to create strong and powerful brands, which creates a great foundation for further branding and marketing. Without a strong brand, marketing effort does not have the same effect. What connects brand marketing with design is the importance of knowing your customer and end user, in order to create successful strategies.

Design-driven strategy

Thinking Strategy Creation

Analysis

Design methods

Process

Tools

User-centeredness

Strategy Expression

Experience

Doing

Image 4

4. Analysis In the following chapter we will present an analysis over the current situation of Smartsun. We will also present suggestions for new brand architecture, market segmentation, positioning and customer profile based on the observations from the different analysis methods.

4.1 Brand architecture Today there is no clear brand strategy for Smartsun as there is no clear distinction between Smartsun and the corporate brand Intellego Technologies. Therefore the current mission, vision and core values are a mix of the corporate brand and the sub-brand. It will be easier to find focus for the different brands if we separate these foundations, as they address different targets, have different market offerings and aims for different goals. To clarify the relationship between Intellego Technologies and Smartsun we have made a new Brand Architecture (Image 5). To make a clear distinction between the Intellego Technologies brand and Smartsun brand they are placed in a hierarchy. From our previous study we were able to find Intellego Technologies’ core values which are: Reliable partner, unique R&D competence and innovative high technology. This means that Intellego Technologies is not only associated with UV-technology, but are also developing technology for any purpose. The only shared core value that Smartsun has with Intellego Technologies is the reliability.

Other differences between the two brands is that Intellego Technologies provides its sub-brands and other business partners with the pure technology, while Smartsun on the other hand provides products for a certain target user. Therefore their market offerings are greatly divided and different. In order to create a brand consistency between Intellego Technologies and the sub-brand, the corporate brand (Intellego Technologies) is suggested to adopt a new logo, where Intellego Technologies can work in an easy way as endorser to the sub-brands. The sub-brands then conceive credibility in the eyes of the consumer from Intellego Technologies. Intellego Technologies work as a quality stamp around its sub-brands and is therefore recognised regardless sub-brand or product.

4.2 SWOT To get an understanding of Smartsun’s current situation we performed a SWOT-analysis to define Smartsun’s strengths, opportunities, weaknesses and threats. This gives us a good overview of Smartsun’s situation. The issues we identified were:

S – Unique product properties, expansion possibilities through various products and applications of the ink, a somewhat already worked up network around the brand. W – Low awareness, no brand building when private label, no conscious design, little customer insights O – High reliability compared to competitors, sponsorships and cooperations T – Advances in UV-indication technology, broken brand promise, has to rely on distributors, competition between different brands and themselves.

Brand architecture

Corporate brand

Sub brands SUB BRAND

Product portfolio

New product

XXX

SUB BRAND

XXX

Image 5

4.3 Target customer Today Smartsun has a broad target group. The CEO of Intellego Technologies, who also is in charge of the Smartsun brand, states that Smartsun targets people everywhere there is sun. However from previous market research for Smartsun the main purchaser of the product is defined as mothers with small children. After deeper research of trends and the risks with skin cancer we can conclude that it is quite logical to target the Smartsun brand towards children as they have more sensitive skin than adults and melanoma is the most common form of cancer for young adults 25–29 years old and the second most common form of cancer for young people 15–29 years old (Skin Cancer Foundation, 2014). In addition, a sun safe behavior in young age accompanies throughout life which can lead to a decreasing number of people with skin cancer later on (appendix 1). Thus, we believe that this is the target group that the company should focus on by doing a segmentation. As we can see from the theory chapter Segmentation, market segmentation is one of the most fundamental concepts in modern marketing, where it is a key strategy and essential to the development of the strategic plan for a brand. By doing a segmentation we are able to develop the right marketing communication and predict the response from the customers. With the child as end-user we conducted a secondary research on current trends and consumer behavior in society. Our result is based on this research as well as our own conclusions and observations. What we were able to see was this: 4.3.1 Trends Departing from our previous research from interviews with parents, they state that they would not monitor the UV-exposure on their children everyday but rather on special occasions as holidays and boat trips. We thus believe that the possibility to visualize UV-exposure is for parents that have the ability to spend money on travel, entertainment and outdoor activities. If they have money for this, it is also likely that they have money to spend on a product that assures them that their child does not get burnt in the sun. The people traveling lives in households with 50 percent higher income than average. Although it has become cheaper to travel, a sun-bathing-week for a family with two children costs around 3 000 USD including all

expenses. If you live on the margins, is on sick leave or unemployed a may holidaying remain a dream. People are becoming more and more experienced travelers today and to compose the trip is more common than buying a package holiday at a travel agency. People book on various sites online and then flies regular, not charters (Andersson, 2013). The Swedish average traveler goes to Spain, traveling with a partner and a child, choosing to fly rather than taking the car or train. In 2012 the Swedes had nearly 13 million holidays abroad. That’s an increase of 6 percent compared to 2011 (Andersson, 2013). The people with the highest income are the ones who are well educated and therefore well educated people are the ones that travel the most. Since education has been expanded, we have children later in life – this is a trend that has been going on for several decades. Gunnar Andersson, Professor of Demography at Stockholm University, explains that we want to establish ourselves in the labor market before we have children, therefore, the highly skilled get children later in life. This means that parents with good economy first get children in their 30–40’s (Höjer, 2011). Well educated, older parents are more aware of risks and therefore spend more money on safety products for their children. High income makes it possible to buy better quality and quality products is a kind of symbolic capital that provides status and good social positioning. For this target group it is thus very important with quality and therefore also design as good and attractive design can express quality through functionality, usability, aesthetics and intuition (Klemp and Ueki-Polet, 2010). 4.3.2 Consumer behaviour In virtually every society in the world, women have primary care-giving responsibilities for both children and the elderly (and often, just about everybody else in-between). In this primary caregiving role, women find themselves buying on behalf of everyone else in their lives. It means that women are multiple markets in one. They are the gateway to everybody else, which means that every time a great service is delivered to a woman, she has a multiplier effect on the business because she represents a broad range of other potential customers, and will likely tell people about the great service you offer (Brennan, 2013).

One of mothers favorite splurges is to buy stuff for the kids. Mothers get a hit off buying things for their children – so much so that 76 percent said they are more likely to splurge on the kids than on themselves (Babycenter, 2005). 4.3.3 Segmentation Following Tynan and Draytons (1987) theories about market segmentation and its implementation, we have grouped the customers in three base variables, to create a homogeneous segment. It will describe the similar needs and buying behaviour of the customer – in order to be able to develop and create an attractive offering. Target customer profile based on consumer behaviour: • Demographic base: Mothers in the ages between 30–55 years of age, with children in the ages between 2–18 years old, that come from a well educated, middle class background. Are part of a household that earns more than average. • Psychological base: Responsible, style and quality conscious, tries to achieve a certain social status, early adopters. • Psycographic base: Healthy lifestyle, enjoys being active, likes to travel a lot. 4.3.4 Perception of the brand After establishing the target customer for Smartsun, we wanted to meet the target customer in reality to see if the brand ambition matched the perception of the brand (brand image). The CEO Claes Lindahl states that Smartsun wants to develop the most reliable and easy to use UV indicator that is the obvious choice for people who wish to monitor their UV-exposure (Lindahl, 2014). In order to carry out this research we wanted to use the method of perceptual maps which is a marketing research technique where consumers’ views about the brand and product are traced or plotted (mapped) on a chart. Respondents are asked questions about their experience with the brand and the product function and design in terms of its performance, packaging, price, size, etc. Theses qualitative answers are transferred to a chart (called a perceptual map) using a suitable scale and the results are employed in improving the brand and its products or in the development of new ones (businessdictionary, 2014).

Because of time and resource limits we, instead of using the perceptual map, chose to use the intuitive map (also called judgmental maps or consensus maps). In the creation of intuitive maps the management uses its best judgment. In this case we used our joined knowledge as design and management experts. We created the intuitive map by defining two axes. The words that we chose were taken from Claes Lindahl’s description of the Smartsun brand. On the horizontal axe we placed the word reliability – writing reliable and unreliable in the two ends. The vertical line refers to the experience, where we placed the word fun and boring. Both reliability and experience creates loyal customers, which works to be the obvious choice for customers when choosing a product and a brand. Based on our definition of the target customer we contacted five mothers with children in the age between 2–10 years old for them to use the product for two days: 8–9/3, 2014. After the weekend we met with the mothers to talk with them about the experience of the wristband, by using the intuitive map. From the intuitive map we could see that the mothers perceived the wristbands as being both boring and unreliable (Image 6). Although they were positive to the brand idea of measuring UV-exposure. This is some things that were brought up by the mothers: • It was hard to define the color change of the band, therefore it does not feel reliable. • The band is too long for children, you need to have a scissor if you want to cut off the band, this feels complicated. • Three out of eight children did not want to keep the band on. • Even if the quality is said to be high – the appearance of the band does not express quality. • It would be nice if it was more diverse. • The users would prefer to monitor the UV-exposure by another design. From this research we are able to see that there are some clear differences in how the consumers perceives the brand and what the brand wish to communicate. From the study we could also conclude that there is no awareness of the product.

Intuitive map

Fun

Wanted spot

Unreliable

Reliable

Boring Image 5

Some photos from our customer survey.

4.4 Competitors In order to be able to position Smartsun on the market, we have done a competitor analysis. Most of Smartsunâ&#x20AC;&#x2122;s competitors use technology to monitor UV-radiation (appendix 2) â&#x20AC;&#x201C; there are monitors, bracelets and watches among others. These are in a higher price range than the current wristband from Smartsun and only one out of nine competitors put their focus on children. In order to position the product on the market we have compared Smartsun to its competitors where we have placed them in a position map (Image 6). Based on the features of the competitors

we chose the different axes of evaluation. From the positioning of Smartsun we can conclude that there is both simple and advanced products on the markets. The products that are advanced are usually digital and therefore very accurate in their communication. What the competitors lack are simplicity combined with accuracy. Furthermore, they do not either take in consideration the sunscreen. We can therefore see that there is a possibility to position Smartsun as a simple and accurate brand.

Positioning of Smartsun Simple

Non accurate

Accurate

Advanced Image 6

4.5 Conclusion of the analysis From the analysis of the current situation we have been able to observe external and internal issues, concerning areas such as the target customers, the perception of the brand, the positioning of the company and its brand awareness. With the analysis we have solved some of the issues in the current situation. We have found who to target and where to position the brand on the market among the competitors. However, there is still a problematization around the brand awareness and the functionality and design of the product, which has lead us to a problematization for Smartsun. 4.5.1 Problematization What can be seen is that the current Smartsun brand, which in this case is closely connected to the product, is not consistent with the values of the target group. A brand only has value when it is communicated correctly to the appropriate audience (Vaid, 2003). The Smartsun brand has failed to communicate and deliver the brand values in

a desirable way and a so called ‘Reality Gap’ has occured. Helen Vaid (2003) describes it like this: ‘The best branding strategy has a zero sum of who you are versus who you say you are and who your target customers say you are. Its also a zero sum of what you do versus what you say you do and what your target market says you do’. Our task is thus to close that gap. Once a brand and its mission, vision, and values are in place, along with a unique brand identity and a positioning that is right for the time, then the brand is ready to be implemented (Vaid, 2003). This background implies that we need to start from the beginning to refine the brand. This is done by taking into account the values of the target group when defining Smartsun’s brand values. We then need to align the brand in accordance with these values.

5. The strategic pyramid – a method for a design driven brand strategy From the problematization, made in the analysis, we could conclude that Smartsun had a reality gap between the brand image (how it is perceived) and the brand values (how it is conveyed within the company). Our aim with the new strategy is to close this gap, by creating a new brand language for the company as well as a consistent brand platform. In this way we wish to provide a more coherent image of the company. In our quest to close the reality gap of the brand we used a model (Image 7) developed by Sohrab Vossoughi, presented in his article from 2007 “The best strategy is the right strategy”, which is a strategic design model that can be adapted in order to create a brand experience that connects the brand with its target customers. We will in the following section give the reader a background to this model and describe its different stages.

5.1 Theory and background From practical work, within his own design consultancy firm, the author has outlined three essential elements for design strategy: 1. Deep understanding of the values, attitudes and behaviour of the target customer. 2. The nature of the company’s values, essence, and character (the company’s DNA). 3. The time-based trends that serves as backdrop to the product or service experience. Without these essentials, the author states that design would only be working with making things pretty, but applying a mindset from the three essentials will give design another relevancy. Having relevancy, according to the author, creates meaning, which is the backbone of a design strategy. It is on this basis of seeing design strategy that the author has built his model. 5.1.1 The strategic design model The strategic design model, which is used for companies in order to develop a solid brand language, is visually presented as a pyramid to show the importance of the base that serves as a foundation of the following layers. The higher up the pyramid the more flexible the strategy gets. The pyramid is used within the whole company, dragging design out of the marketing and product department to spread it within an entire organization. The four layers of the strategic design model: Core values One could call it the DNA of the brand, as it is from this basis of which the company makes its business and it presents itself to the market. Due to that it is deeply rooted in the character and essence of the company, it should not go through any major changes.

Visual positioning Works more as a strategic tool, that determines the visual tone of a brand in the context of other brand. Design principles Defines the visual characteristics of the brand, in order to guide the expressions of the company and to inform design decisions for all of the strategic touch-points. The aim is to be a bridge between the verbal and visual worlds. Signature elements Through form, texture, logo badging, color etc., the company is able to embody the design principles, which aims to communicate the brand personality. By taking departure from the foundation of core values, essence and customer views, the company is able to start building its strategy. Firstly by beginning to map the visual positioning, through various forms of customer researches and secondly by establishing the design principles which was abstracted from the visual positioning. Before entering the last stage of the model the company should unite the findings from the previous layers to, through customer research, explore the desired brand position and understand the concept’s ability to communicate the brand attributes to the customers. From the finding in the customer research, the final signature elements are abled to be refined.

The strategic design pyramid Image 7

Signature elements

Design principles

Visual positioning

Core values

5.2 Implementation of the strategic design model 5.2.1 Base The target customer and end-user, the essence of the brand, mission, vision and core values are based on our analysis in previous chapter. Departing from the conclusions of our analysis we are able to create the base of the pyramide. The wanted position in the visual positioning

map and the wanted market positioning gave us four different concepts that summarize our findings. These concepts were turned into core values that will work as a guide for decision making within the Smartsun brand family.

Positioning Statement: To responsible mothers who wants to be completely sure that their children do not get sunburned. Smartsun is always reliable, providing affordable, simple but good designed products with a high level of accuracy that takes in consideration the applied sunscreen.

Essence of Smartsun: A simple, reliable and fun experience of the sun that gives the target customer peace of mind.

Mission:

Vision:

To deliver reliable and easy to use UV-indicators that gives the customer a safe and enjoyable experience of the sun.

Core values Accuracy, Reliability, Experience and Simple

To become a well known and trustworthy knowledge intensive brand that raises awareness of the harm UV-exposure can cause.

5.2.2 Visual positioning To establish a visual positioning, we used information from both the positioning of Smartsun in comparison to its competitors and information from the intuitive map, in the analysis section. These findings show both where Smartsun should be positioned on the market as well as how the brand should be perceived and experienced.

We can then conclude that in order to create a brand language that communicates the base of the pyramid in an accurate way, the brand needs to develop a language that is perceived as more fun and more reliable, as well as more accurate and more simple.

Simple Fun

Wanted spot

Unreliable Non accurate

Reliable Accurate

Boring Advanced

Visual positioning Simple, Fun, Accurate, Reliable

Core values Accuracy, Reliability, Experience and Simple

5.2.3 Design principles From the analysis we came up with four core values derived from both the intuitive map and the wanted market positioning. In order to find out what these core values stands for we met with the mothers again to 足figure out what they actually mean and what they can mean in the context of brand language. We discussed each of the four core values, one at a time. After the discussions we turned

all the insights to useful meanings of the core values. These are the principles that should guide the design work of future products. To visualize this we have come up with one product (Image 8) that emphasise these core values. It is just one example that should inspire and help future product design, as it illustrates how it can be interpreted.

Reliability > Safe attachment Experience > Playful functional attractive design Accuracy > Clear and pedagodgic color change/gradient Simple > Easy to use

Design principles Safe attachment, Playful functional attractive design, Clear and pedagodgic color change, Easy to use

Visual positioning Simple, Fun, Accurate, Reliable

Core values Accuracy, Reliability, Experience and Simple

Inspirational design-piece Image 8

5.2.4 Signature elements From the design principles we are able to define the signature elements for the brand and its products. Colours The gradient scale takes departure from the universal colour code of traffic lights, i.e. green, yellow and red. Green is a colour connected to safety and a sign of approval to twist it with a touch of blue the colour ads values as fresh and calm. Red is the universal colour for warning, harm and danger. It is also the colour you do not want your skin to be. Logo The logo of Smartsun express the core values of the brand. The Smartsun logo always appears together with Intellego Technologies, where the logo of Intellego Tech-

nologies is used as a mark of quality and where the the logo of Smartsun expresses the experience and fun connected to the product. The logo should always be clear and visible, and always embossed in the product. Material Quality but not luxurious. Should be able to use in all kinds of weathers. The material must be water proof. Packaging Expressive, fun and coherent with the product, which means it should adopt a colourful and playful design. It goes with the core values of experience where it should display playful and attractive design, but in the same way it should always be simple.

Signature elements Design principles Safe attachment, Playful functional attractive design, Clear and pedagodgic color change, Easy to use

Visual positioning Simple, Fun, Accurate, Reliable

Core values Accuracy, Reliability, Experience and Simple

Visualization of possible future Smartsun product & packaging

6. Constructing the new brand strategy By implementing the design strategy model we have been able to establish a brand platform for Smartsun. The brand platform, with the developed brand language, is an important link in the final construction of the new brand strategy for Smartsun. In complementation to the new brand platform we have created a new market offering.

Market offering For: Mothers Who: Are responsible and care about their childrens safety. Who has a style and quality conscious mind, and who lives healthy lifestyles, enjoys being active and likes to travel. We provide: A reliable and easy to use UV-indicator that gives the customer a peace of mind. That: Are accurate and gives an enjoyable experience in the sun. Unlike: Most competitors who are either more advance or not as accurate. Because: They are not as user oriented towards children as we are.

Our proposed design-driven brand strategy

Brand Language

Market offering Products

Internal perspective

External perspective

Satisfaction Brand awarness

In the process of the development of the new brand strategy for Smartsun it has been of great importance to make a separation between the Smartsun sub-brand and the corporate brand Intellego Technologies. The idea of the new brand architecture is that Intellego Technologies deals solely with research and technology development. For Intellego Technologies it means that they are able to look into any field of research that they wish to engage in, as their primary brand activity is within R&D. This makes it possible for the company to create many different subbrands, regardless the industry or field, but linked together by the brand promise of innovation and high-quality technology. Intellego is as such more focused on business-tobusiness activities while Smartsun on the other hand has another aim and focus, which is more concerned with certain products and consumers. Smartsun targets children as end user and mothers as customers, producing UV-indication products. This differentiation of the two brands generates two completely different brand strategies. The construction of the brand strategy for Smartsun takes its departure from an internal as well as an external perspective. The internal construction stems from a brand orientation where we look to the core of the brand - the different values, mission and vision. The external perspective concerns the view and feedback of the consumers, as it has more of a market orientation. An important key in the development of the external perspective has been the market segmentation. First of all has it given us an insight in the consumer preferences which has governed the outcome of the new proposal. It furthermore also contributes to a clearer perception of which channels to approach when marketing and selling the product. After establishing the foundation of the design strategy model we have been able to build a strong brand language through the different stages of visual positioning, design principles and signature element. The brand language is further manifested through the brand awareness and the customer satisfaction that follows the implementation of the model. The aim with the new brand strategy for Smartsun is to raise brand awareness and customer satisfaction through the development of a new brand language.

In a conclusion, the new brand strategy for Smartsun focuses on the development of a brand language in order to close the reality gap. The brand language is based on the appliance of a market orientation and a brand orientation approach, a so called hybrid orientation. The hybrid orientation is a balanced brand strategy which focuses on both an inside perspective as well as an outside perspective. The brand language is developed by the use of a design driven process which ought to govern managerial decision making as well as the design and communication of the brand. It is important to be reminded of that everything that the company do is brand building, from the suppliers to the product development to the advertisements, and that it is not only the product that the company is selling but rather the promise and the experience of the brand. It is therefore important for Smartsun to adapt the new brand language as it will help them in the construction of the company, through the different decision making that is it permeated by the brand language. The brand language articulates the brand promise which is the core and market offering of the company. It tells what the product do for the customers and what kind of feelings it gives them. It is important that the promise of the brand correspond to what they actually deliver, otherwise the reality gap will yet again occur. Hence, it is key that everything that the company communicates is coherent with how the brand actually is, in order to reach customer satisfaction, which is done when the expectations of the consumers are reached or exceeded. The new strategy demands a constant process of working with all the different external and internal factors that may affect the brand language. Thus, the company will always need to evaluate and be attentive to changes and other influences that may affect their business activities. The customer feedback is of essence in this process. In summary, the brand strategy and the development of a new brand language constructs a base for a fundament of creating UV-indication products that meet the customersâ&#x20AC;&#x2122; wants and needs. In this way Smartsun is able to differentiate and stop competing with themselves, by the different private labels, through the different channels. 31

7. Conclusion In the report we have formulated a design-driven brand strategy for Smartsun. The process of doing this started by looking into the established theories in the field in order to get a base for continuation of the development of the brand strategy. By applying different analysis and marketing methods we were able to establish a new market segmentation, positioning and market offering. This gave us a the basis in the design strategy model in which we could develop the new brand language that works to close the reality gap. The brand strategy and the different solutions that are suggested for Smartsun have a hybrid orientation, where we take in the perspective of both the brand and the customer. This approach is very much in line with how the

discourses within branding, marketing and design looks like today, as all of the disciplines put emphasis on having a user-centredness as well as being grounded in the core of the company. This approach creates value for both the customer and the company. In order to show how Smartsun could adopt the new brand language we furthermore also chose to visualize this in an inspirational piece. Thus, this report has given the company a practical solution to its problematization, through the development of a design-driven brand strategy, which departs from a theoretical base. The use of design has as such worked to guide and mediate the brandâ&#x20AC;&#x2122;s values in the development of the new brand strategy as well to execute it.

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Appendix 1

â&#x20AC;Š

Appendix 2 The table below shows that most of Intellego Technologies’ competitors use technology to monitor the UV exposure. These may have the reason that they have the feeling to measure the exact amount of UV light to give customers advice when to move out of the sun. Same product type

Electronic Products Same application

LUXES Bracelet

June Netamo

Same as Intellego. Use with sunscreen as an indicator. Used by cancer activists, athletes, outdoor lovers, teachers, pharmacist, nurses in their commercial.

More fashionable. Made in collaboration with some well known designers. Connected to an ap. Tells which kind of protection you should use.

Parnass UVbracelet

BBW213 by Oregon Scientific

Similar to the one of Intellego Technologies. Indicates how strong the UV-radiation is. Changes colour and becomes darker when the UV-radiation increases. Is not exact in its function.

Parnass UVwatch

“Ideal for Your Baby's Protection”

RA103 by Oregon Scientific

Shows how strong the UV-radiation is. The sensors indicates how much UV-radiation you UV indicator, with sport features, weather forecast- with 4 icon symbols, barometric are affected of, by changing colour. pressure (history memory), temperature measurement.