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  • Posted by: Interbrand on Thursday, March 22 2012 11:08 AM | Comments (0)

    Jez Frampton

    Welcome to part 2 of this Demand and Desire special, where Interbrand’s Global CEO, Jez Frampton, joins Global Chief Communications Officer, Karen Burke, in examining what 2012 has in store for these eight sectors:

    • Financial
    • Hospitality
    • Food & Beverage
    • Healthcare
    • Luxury
    • Telecommunications
    • Media
    • Retail

     

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  • Posted by: Interbrand on Friday, March 2 2012 03:03 PM | Comments (0)

    Jez Frampton

    Welcome to part 1 (of 2) of this Demand and Desire special. Interbrand’s Global CEO, Jez Frampton, joins Global Chief Communications Officer, Karen Burke, for a lively and informative discussion on the year ahead and what’s likely in store for these four sectors:

    • Airlines
    • Automotive
    • Business Services
    • Fast Developing Markets

    Stay tuned. Part 2 coming soon.

     

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  • Posted by: Stuart Green on Thursday, January 13 2011 12:30 PM | Comments (0)

    As we enter 2011 we are witnessing a stronger than expected recovery in the global airline industry with increased demand and more stable cost structures. After numerous profit upgrades, the world’s airlines anticipated a profit of $US 15.1 billion in 2010.

    However, the current recovery remains fragile with Europe lagging behind with expected losses of US $1.3 billion in 2010 and Asia and Latin America surging, indicating a very divergent global picture. Furthermore, net margins in the airline remain extremely low at 2.7 percent (and are expected to fall further to 1.5 percent in 2011) because airline recession strategies often centered on realigning to deliver value to customers through low prices, co-branding, and packages.

    This is an industry that already contends with many factors out of its control such as huge capital requirements, high operating costs, government policies, a reliance on ground operating systems, strict aviation regulations, strong labor unions, pressure from environmental groups, not to mention volcanic ash clouds and of course the weather! On top of all of this, airlines will have to get used to being in a constant state of flux driven by evolving demographics, the influence of technology and changing customer demands.

    Post-recession strategies
    Consolidation has continued as airlines struggle to adapt to a post-recession era of lower profits and price competition. Following the merger between Delta Airlines and Northwest Airlines in 2008, United Airlines and Continental Airlines announced a merger in May 2010, and Southwest has announced its planned acquisition of AirTran to increase economies of scale and competitiveness. In 2011, expect to see more of the same. British Airways and Iberia have already agreed to a five billion pound merger in order to expand their international presence and airlines in the Asia Pacific.

    Emerging markets
    Global travel will continue to expand with the main growth coming from Asia and emerging markets. It’s estimated that by 2020, Asia-Pacific will account for nearly 22 percent of arrivals, up from 18.3 percent now. Asia Pacific will also account for nearly 32 percent of all travel spending, up from 21 percent today.

    A huge potential revenue stream will come from catering to travelers from emerging markets, particularly Brazil, India, Russia and China. However, a key challenge for many international airline brands will be how they cater to very different customer tastes.

    Cross-selling opportunities
    We continue to see an increase in the growing importance of ancillary revenues and earnings from non-core operations with airlines increasingly unbundling products previously included in the ticket price, such as seat assignment and passenger preferences for meals, entertainment, and internet access. Longer-term, we may even see greater variety of cabin classes catering to differing customer tastes and affordability.

    There is also a huge opportunity for the more “trusted” airline brands to further cross-sell services provided by third parties such as insurance, car hire and hotel rooms — providing a more seamless customer experience.

    Technology adoption
    Adoption of mobile technology for both entertainment and business needs will continue to transform the in-flight experience, for better or for worse. Brand owners need to have a clear strategy that aligns all aspects of the customer experience around their brand promise to determine what and how technology is implemented.

    On the ground, the travel industry continues to be transformed by social media, with large numbers of consumers choosing to book accommodation, flights and activities directly online, based on the advice of fellow holidaymakers and travelers.

    Twitter, Facebook, Flickr, YouTube and online blogs have been used as advertising and promotion platforms, and some airlines have developed iPhone apps for online booking and check-in, targeting specific market segments and developing brand loyalty to the carrier.

    Ultimately, airlines will increase profitability in a sustained way by creating unique customer experiences that are meaningful and relevant, with a clear understanding of which touchpoints are genuine drivers of purchase.

    Airlines that continually question their business models and adapt to constant changes in customer behavior will be those that prosper most in 2011 and beyond.

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  • Posted by: Julian Dailly on Monday, January 10 2011 09:59 AM | Comments (0)

    Banks will keep a low profile as they aggressively rebuild
    In 2011, we can expect a continued antagonism between the state and banks.
     
    The events of the last few years have required the state to play a larger role in creating stability through bailouts and legislation. Consumers continue to be outraged at banks’ resistance to disclosure and their complicated answers and defense of the status quo. Overall, in many consumers’ minds, the sector appears unwilling to change its attitudes or behaviors. Still, despite public opinion, financial service brands have continued to profit and grow. This and their quick return to pre-downturn bonus culture are evidence that cultural reform may not be required to safeguard shareholder returns. In 2011, expect traditional banks to lie low as the drama continues to play out. Also expect opportunities for genuinely ethical, service and end-user oriented brands to enter the fray.

    Banks will become the scapegoat if governments can’t fix economic problems
    The legislative framework through which financial services sector gains its license to operate may become more difficult to navigate if the recessionary climate hardens. Politicians are keen to sidestep their own responsibility for the situation and are likely to reframe their own economic mismanagement as the greed of the financial services sector — as the recklessness and misalignment with society in general.
     
    Expect more CEO’s in select committees and punitive reporting requirements of banker bonus allocations. Also expect challenges to the assumption that banks must be profitable and are too big to fail. In 2011, banks will be challenged with making the case to society that they need substantial freedom to operate sufficiently.

    Challenger brands will take on the dominant players
    With large parts of the retail banking model commoditized and product innovation deemed “not worth it” there is a space in the market for consumer retail oriented banks to enter and differentiate when it come to service. Those that focus on service can steal share from traditional banks that can’t deliver. Expect to see this occur primarily in the developed work world. This challenge will expand out from core banking services based on clients’ requests.
     
    Also expect to see criticism of pan-regional payment brands like Visa and MasterCard. Customers will see fees as too high, share too dominant, and competition as ineffective. As a result, payment methods that claim ease of use will be developed. Innovations linked to web payment and low-cost, peer-to-peer money transfer are also likely.

    Basel II driven consolidation will drive out risky activities by banks looking to be bought and decrease local communities’ access to credit
    Compliance with new balance sheet stability rules means large, unstable banks will buy and integrate many smaller, less risk-hungry banks to improve their overall asset mix. Unfortunately, the losers here will be small- and medium-sized businesses looking for credit lines. As smaller banks try to avoid looking bad in their quest to attract picky buyers, expect continued frustration from small business folk unable to get credit, expand or start new and risky businesses.

    Life insurance companies will be increasingly seen as attractive choices for a wider range of financial services needs
    Insurance companies are getting better at presenting themselves as credible suppliers of more financial services products — from savings and mortgages to complex investment products. The blurring of the boundaries in the sector means banks will have to work harder to secure the deposit balances required for lucrative lending. Nevertheless, there continues to be a lack of delivered surplus needs in either sector — personal identity, usage experience or aspiration — leaving the door open for a challenger brand to enter the market.

    Banking will continue to be viewed as a dirty business
    The bonus culture rolls on, but at what cost? Large investment banks continue to attempt to please and sustain their employees even as general public perceptions grow more negative.
     
    As the world teeters on the edge of another recession, people are wondering, “How come we’re still in their mess and they are back to their old ways? Consequently, bankers are increasingly seen as disconnected and aloof. This threatens the employee proposition at the graduate and middle manager level. Expect lower trust scores, less effective corporate citizenship investments, and less corporate citizenship activities overall.

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  • Posted by: Federica Judica on Thursday, January 6 2011 01:59 PM | Comments (0)

    Cloud computing and education
    The adoption of cloud computing continues to surge. While its relevancy is no longer in question, the need now is for an understanding of its characteristics and benefits. Companies have started to assume the educator role in the category, clarifying the differences among the spectrum of offerings on the market and what are public, private and a hybrid cloud. While growing the category means growing a piece of it, unless tech brands are able to bring clarity to their complex offerings, it will be hard for them to capitalize on their investments.    

    Increased partnerships
    In mobility, a single brand can’t arguably deliver a complete end-to-end experience. That’s why we’re likely to see increased brand partnerships in the category. Together, brands will play together to deliver against an ever-increasing set of consumer expectations. While a partnership approach is more likely to yield success for both parties, it also is true that consumers may have difficult discerning which brand delivers what portion of the experience. As a result, if a product fails to meet expectations, the brand with the greatest equity and loyalty base is likely to carry most — if not all — the risks.


    Balance and authenticity
    Technology brands have been going through a transformation in their struggle to differentiate. Many are attempting to tap into the emotional space, claiming that they are responsible for life changing experiences. Results so far have been mixed. In some cases, the pendulum may have swung too far. The key to long-term success will be to examine the relationship between functional and emotional attributes and communicate this with balance and authenticity.

    Mergers & Acquisitions
    Growth in the category continues to be spurred by mergers and acquisitions. More than ever, the emphasis is on aligning internal cultures and clarifying what the brand stands internally. A survey Interbrand conducted in 2010 across a variety of sectors showed that while 82 percent of companies regularly measure internal brand engagement, 21 percent of them actually link it to customer satisfaction. In the technology sector, internal activation is key to loyalty growth.

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