Why brands shouldn’t focus on meaning

Oat drink branding wars.

Purpose-driven companies might be putting themselves at risk if they opt for meaning in their branding, says intellectual property expert and author of Brand Tuned, Shireen Smith

‘Distinctive branding lasts, differentiation does not,’ writes Byron Sharp, Professor of Marketing Science and Director of the Ehrenberg-Bass Institute, in his 2015 book, How Brands Grow.

Sharp suggests that rather than striving for meaningful, perceived differentiation, marketers should seek meaningless distinctiveness. This has a significant impact on brand creation approaches.

Brand names

When it comes to choosing a brand name, opt for a name like ‘McDonald’s’ rather than ‘Burger King’. People are drawn to descriptive names that suggest the category and such names require a smaller marketing budget to promote. However, the recent decision in the case of Oatly vs. Glebe Farm Foods demonstrates the serious drawbacks of suggestive names.

The name ‘Oatly’ comes very close to being purely descriptive, which is why London’s High Court decided that the name of Glebe Farm Foods’ oat-based drink – ‘PureOaty’ – did not take advantage of Oatly’s reputation.  

To better understand the significance of this decision and the broad protection trademarks give, compare it to a fictitious hypothetical case of a competing mayonnaise product called ‘PureHellman’s’. Without doubt this would infringe on Hellmann’s trademark rights. Hellmann’s is more distinctive because it does not convey any meaning about mayonnaise. As a result, it enjoys broader protection than a name like Oatly which uses the generic term ‘oat’ in its name.

As the words ‘oat’ and ‘oaty’ are both generic, it was purely the presence of the letter ‘L’ in the name that lifted Oatly from being purely generic, and incapable of being registered as a trademark, to being sufficiently distinctive to function as a trademark. But not all trademarks are equally worthwhile. The name itself determines the strength of the trademark rights a brand enjoys.

Brand protection

Names that suggest the category are weak for brand protection. The time to be aware of the drawbacks of such names is when you’re choosing a new name. This involves weighing up the advantage that descriptive and suggestive names have in helping form a mental association in customers’ minds with what the company sells against the significant drawbacks.

Effectively, opting for a meaningful name means that competitors are free to use the generic element of your name. You stand out less because it is a fundamental tenet of trademark law that nobody can get exclusive rights to use generic terms that others in the category legitimately need to use.

That’s why Oatly was unable to stop Glebe Farm calling its oat milk PureOaty even though Oatly is a famous mark and enjoys greater protection than lesser brands. Had it chosen a name like Hellmann’s then it would have been able to stop a competitor simply adding ‘Pure’ to a similar name. It would have got a strong trademark which is a ‘must have’ for a brand like Oatly that is purpose driven.

Purpose-driven brands

Oatly was somewhat apologetic when seeking to enforce its rights in its name during the Oatly vs. Glebe Farm dispute. Being called a bully did not sit well with a brand whose purpose is to promote health and environmental consciousness. Yet it is essential to enforce your trademark rights vigorously to protect your territory. For example, EasyJet comes down heavily on uses of the word ‘Easy

While Oatly followed legal advice and did take action, it found itself in a legal dispute with a competitor that has a similar ethos. The legal action alienated consumers who questioned what the similarity was between the two products. A petition called for Oatly to cease action against Glebe Farm, accusing it of ‘rather aggressively, and wholly unnecessarily’ targeting the UK farm. Perhaps that explains why Oatly decided not to appeal the High Court’s decision.

If Oatly had chosen a non-descriptive name, it is unlikely consumers would question why it was taking action to defend its turf. For a purpose-driven brand, choosing a highly distinctive name makes more sense because it reduces the risk that competitors would use similar branding that you would then need to dispute.

The Oatly example suggests that before finalising the choice of name it is worth considering some of the drawbacks of using a suggestive name.

Visual identity

A downside to searching for a meaningful basis around which to design a brand’s visual identity is that you miss an obvious opportunity to stand out distinctively, such as by using characters and other symbols.

I briefed my designer to incorporate a strong visual in the Azrights brand, but the final brand identity used no symbol because her approach was to focus on differentiation instead of distinctiveness. Having understood that we specialise in online business, she opted to replace our strapline, ‘Easy Legal Not Legalese’ with the strapline ‘Lawyers for the Digital World’ and produced a logo with stripes that were reminiscent of IBM’s logo. 

By using differentiation as the basis of the visual identity, the designer failed to use the opportunity to create a strong symbol to give us a distinctive look despite there being only one law firm (a much larger one) that was using a symbol in its branding. It used an orange tiger (now gone) and its brand stood out among all the other commercial law firms that were using plain logos.   

Your differentiation or positioning does not need to form the focus of your visual identity. For us, making the law easy to understand was, and is, core to the Azrights brand. So, the visual identity designs didn’t need to focus on our specialisation in digital matters.

The way to avoid sameness in branding is to stop choosing brand names and other identifiers based on their meaning, and instead focus on standing out distinctively by choosing names and identifiers that are legally distinctive. That is the way to create legally protectable distance between a brand and its competitors. As Byron Sharp puts it distinctiveness lasts; differentiation does not.

Shireen Smith is the Founder of Azrights, an intellectual property law firm and the author of Brand Tuned: The new rules of branding, strategy and intellectual property (Practical Inspiration Publishing, 2021). She has a master’s degree in intellectual property from the University of London.

BGA members can receive 20% off the price of a copy of Brand Tuned courtesy of the BGA Book Club. Click here for details.

How to make your brand likeable and increase your sales

‘A new type of millennial decision maker is in the ascendancy and they want you to be different.’ Discover the four types of likeability and determine which can best help your brand achieve its goals

It is well known that consumers buy from people they like. We often shop in stores or eat in restaurants because the staff give us great service, even if the prices are higher. When we buy in a business to business (B2B) context, it’s no different, except that the individual people behind the product aren’t always visible to us. This means that the brand has to do the likeability job.

Your customers make their buying decisions based on which company or brand they like the best – it’s as simple as that. This is especially important today. Over the past 10 years, there’s been a massive shift in the way that buyers in the B2B world think, act and feel about business brands. A new type of millennial decision maker is in the ascendancy and they want you to be different. This can already be seen in the gradual move away from macho, ‘alpha’ brands like Oracle and IBM, and towards ‘beta’ B2B brands like Salesforce which are more in touch with their customers’ emotions.

Popularity contests in a new era

In complex and digitised markets, such as technology and financial services, likeability is especially critical. For many years, companies relied on expensive salespeople to create the likeability factor, but today, when communications are usually online rather than face-to-face, they recognise that they need to invest in their brands to deliver a positive and friendly experience.

In the last year, the pandemic has accelerated this trend. People are buying from behind computer screens so they look for cues for likeability factors from a digital image of the brand more than ever.    

In this new era, you should think of business not as a sales game to be won or lost, but as a popularity contest in which you always need to be evolving, to have a voice and to be relevant. What’s more, brand likeability is about more than just attracting customers; it also gives a structure to how you embrace techniques, such as storytelling and measurement, to drive your future growth.

So, what factors can you focus on to create a likeable brand? This depends on where your company is at, the kind of brand you have and what else is happening in your sector. Which of the following four types of likeability is the one that would most suit your brand and product?

1. Instant likeability

You know how some people are instantly likeable? You only have to meet them for the first time, and you’re telling them everything about yourself. These people have an ‘X-factor’ for likeability, and they’ve most probably developed it unconsciously.

Some companies have this too – they’re intensely likeable in an instinctive way. Maybe they simply use a choice word here and there on their website, or a piece of imagery that strikes a chord with their audience. Sometimes the effect is all the more charming because not much thought seems to have gone into it. But as these businesses grow they need to find a way of scaling their likeability by becoming more deliberate about it, much like a startup has to consciously manufacture a culture as it expands. They have to manage their likeability in all aspects of their companies: their brand image, their product design, their people and their content – without losing the magic along the way.

2. Earned likeability

This is when your brand becomes likeable over time through the effort you put into it. Your company could have a dogmatic adherence to the truth no matter how unpopular it may be. You could show an over-commitment to a cause, or challenge the status quo, revealing a passion for what you believe in above all else, like The Body Shop did.

Or, you could demonstrate an amazing level of helpfulness to people, leading them to feel reciprocity towards your brand. This is especially effective if it’s both personalised (directly relevant to your audience) and unexpected. A good example is from car-hire company, Avis, and its campaign, ‘We try harder’.            

3. Compassionate likeability  

When you have a reputation as a compassionate brand, it means that people see you as a company that puts its own interests second and the wider good first. You view the world through a larger prism than pure profit, gearing your efforts towards making a positive difference through the enactment of your overarching purpose. This is a likeable position to be in because it generates trust; a company that goes out of its way to help others is one that can also be relied on to treat its customers well. It has a warm and caring glow around it.

Another way to look at this is to imagine that you bump into the CEO of a company that you want to do business with and have a minute to impress them. Do you reel off your usual elevator pitch, full of buzzwords and ‘benefits’? Or do you offer them something of value? Something that would be meaningful to them as a person, such as the opportunity for one of their teenage children to do an internship in your business? If it’s the latter, you’ve hit on a home truth. It’s emotionally intelligent to apply your brand in a way that creates a valued exchange – this is what creates compassionate likeability.        

4. Challenger likeability         

This is when you achieve likeability by virtue of the fact that you’re the non-conventional player in your industry. Instead of going with the crowd, you’ve identified an unconscious need – something your audience didn’t even know it wanted until it saw it – and jumped into a space that’s badly served by others. You’re challenging the norm.

There’s an inherent likeability involved with being a challenger because people love an underdog, and they can see you’re committed to serving your customers above all else. By doing the right thing rather than following the crowd, and by being a trusted educator who tells your customers what they really need to know, you become a likeable brand.

***

You’ll have noticed that each of these types of likeability inspires trust in its own way. Brands with instant likeability prove they understand you, those with earned likeability win you over through reciprocity, those with compassionate likeability show you they care about you and those with earned likeability gain your respect.             

You can also create different kinds of likeability throughout your marketing activity. Your website should create ‘instant’, your brand should create ‘earned’ (because you always deliver against your purpose and values), your customer service teams should create ‘compassionate’ and your sales teams ‘challenger’. Your job is to pull these elements together so that your business becomes unstoppable. 

This is an edited excerpt from Humanizing B2B: The new truth in marketing which will transform your brand and sales, by Paul Cash and James Trezona (Practical Inspiration Publishing, 2021).

Business School communications in the time of Covid-19

Communicating long-term plans has been the biggest issue facing Business School communications professionals, says Stephanie Mullins, Associate Director at PR consultancy, BlueSky Education 

More than half of Business School communications professionals state that the single biggest communications challenge they have faced as a result of the Covid-19 pandemic is communicating long-term plans. 

That was the key finding from a targeted LinkedIn poll run in 2020 by specialist PR consultancy, BlueSky Education, to really understand what was keeping industry practitioners awake at night. Communicating long-term plans wasn’t the only challenge singled out by those polled – 29% of these communications specialists felt that their main problem is showing the value of online learning, while for 14% it is attracting international students, and for the remaining 5% it is securing coverage for expertise.  

The respondents were spread across the globe, with responsibility for communications at institutions that include Warwick Business School, Bocconi University, NEOMA Business School, Alliance Manchester Business School, Wits Business School, Nyenrode Business University, BI Norwegian Business School, and more. 

The challenges span borders

All of the institutions listed above are home to excellent communicators – but this is an unprecedented time. Never before has our industry had to tackle a crisis like the Covid-19 pandemic, and so the challenges it has caused Business Schools are not only new, but they are also wide-ranging. It is a testing time for communications teams in Business Schools globally. With respondents based across continents, from Europe to Africa, the survey confirmed this. 

The most worrying aspect of this is clear. Many Schools have only recently formalised their plans for the present academic year and have been facing the prospect of making them public. Perhaps – given how late many plans have become concrete and that, even then, they remain subject to change in response to government lockdowns and regulations – it’s not surprising that the majority of people polled believed that sharing long-term plans was their main concern. Given that this virus isn’t likely to disappear anytime soon, and that a vaccine is not seemingly imminent, the industry will not be returning to pre-Covid normality. Communicating how institutions are going to operate in the long term will be vital. 

Yet, whether plans now include the likes of blended learning and smaller class sizes, it’s communicating them effectively that’s important. It’s ensuring that the institution remains attractive to target audiences, especially prospective students, and ultimately having the wider goals drive the communications strategy. Fortunately, there are a number of ways in which messages can be bolstered in order to give them the best chance of success.  

A clear message is the basic foundation

Going fully online? Delaying programme start dates? Making changes to the campus?

It all needs to be clear and there need to be reasons why, as well as an explanation that makes the changes not just acceptable, but also attractive. Is the School particularly adept at online learning, or even an edtech pioneer perhaps? How do the plans benefit those a School wants to influence? 

Preparation is key here because sharing plans is a strategic matter. Sharing the news internally, with staff and faculty, will most likely be the first step. Then, sharing the plans with engaged prospects – those who were already signed up to start a programme, those who have paid deposits, and so on. These prospects should be offered the chance to ask questions and understand what the plans mean for them, whether that’s via email or offering telephone, or even Zoom, consultations. Many Schools have already overcome this hurdle. The next step is sharing the long-term plans with the wider community, including alumni and the media.

Choosing a spokesperson

Who is communicating these plans? The Business School’s dean is a good place to start. Messages from a dean carry weight as they come from an institution’s figurehead. 

‘It’s true that the dean is key to providing a top-level, long-term strategic view of how, when, and in what manner the School will reopen the campus,’ says Kerry Parke, Associate Director of Communications at IE Business School. ‘However, academic institutions are hardly lacking in expertise and applied knowledge, so there’s no need for the dean to serve as the sole spokesperson and, in fact, having a variety of voices speak to the topic can help get a more complete message out to a wider audience.’

Parke says that, at IE Business School, they’re preparing for this next, rather fluid, stage in higher education and that there are many who can speak to the media, including the vice deans, programme directors, and staff who are updating course content, classroom facilities, and health protocols, as well as the professors teaching face-to-face and online students simultaneously, and the students joining on campus in Madrid or online from around the world.

‘Each one is an ambassador for IE Business School and can deepen the School’s message through their individual experience. This layering of perspectives – so long as the foundation is clear and set by the dean – provides a complete view of a complex and constantly evolving global situation, and this is the type of honest messaging that resonates with stakeholders,’ Parke explains.

Ultimately, institutions are addressing those already committed to the brand, ensuring its pipeline of students remains dedicated to studying despite necessary adaptations due to the pandemic. Indeed, Dean of Lancaster University Management School and former chair of the Chartered Association of Business Schools (CABS), Angus Laing, suspects that student numbers might not be as bad as some fear. 

For Laing, the simple reality facing prospective students is that options to entice them away from further education are limited. For those interested in postgraduate programmes in particular, other options that these people might consider – such as travelling or getting a job – aren’t easy avenues to pursue. For most, they aren’t options at all. ‘While initial sentiment analysis was suggesting they’d rather not come this year and rather not have blended delivery, the brutal reality is… what are the alternatives?’ Laing says. 

But institutions have to set their sights further afield. They also have to attract the next generation of participants at every level – from undergraduate business degrees to executive education programmes – who are well aware of the pandemic’s ongoing impact on delivery and student experience. Communications initiatives must address this. 

Picking the media

Where, exactly, are messages being shared? This includes social media – for, research shows that personal posts on LinkedIn and Twitter are often well-received – and in the sector-specific, national and international press. Understanding what the target demographic is reading is crucial. Strategic communications professionals look to share their messages in outlets that will be read and respected, that includes top-tier business media like Forbes and the Financial Times, as well as education-specific press, such as Business Because, QS TopMBA.com and Times Higher Education

Many institutions have been sharing their plans, and successfully validating them, in target media. A number of UK Business Schools, including London Business School, UCL School of Management, Imperial College Business School, Durham University Business School and Alliance Manchester Business School, were some of the first to effectively do this effectively, in an article for Poets&Quants – one of the world’s most influential specialist outlets for business education. 

Many long-term plans that have been shaped and shared by Schools in the industry have involved an aspect of online learning that is inevitable in a world where health and safety is paramount and government regulations must be observed, so it’s easy to see why many institutions want to highlight their abilities in the realm of education technology. Yet almost a third of respondents to the survey indicated that their biggest challenge, due to the current pandemic, was showing the value of online learning. 

One effective way to demonstrate prowess in virtual teaching is to reiterate credentials by sharing stories, for example, that secure the School as totally capable in this area in the minds of potential students. Take Imperial College Business School, which continues to share helpful messages that position its faculty as technological leaders. It has, for instance, offered advice on how to host a successful virtual conference and how businesses can use AI to cope during the Covid-19 pandemic. Consistent press coverage like this reinforces the School as leaders in technology, alongside student stories that advocate the worth of the programmes and other targeted media opportunities that highlight the School’s value. 

Regardless of the challenges a School may be facing, it will ultimately be judged on the strength of its communications. Good communications will see Schools through this period safely and help to secure a successful future – but a single interview is not enough. Schools must make sure that their messages are consistently visible. They must be timely, clear, transparent and frequent. 

Stephanie Mullins is Associate Director at BlueSky Education, a specialist public relations consultancy for business and higher education.

This article is taken from Business Impact’s sixth edition in print.

A calling in business

From Sri Lanka to Europe and grocery shop to international corporation, Allirajah Subaskaran, Founder and Chairman of Lycagroup, has remained agile and adaptable, creating an 8,000-strong business with a family feel. Interview by David Woods-Hale

Can you tell us about your career to date, outlining some of your biggest challenges and achievements?

I was born in the town of Mulllaitivu, Sri Lanka, to a working-class family. 

I am from humble origins, having lost my father at a young age and being brought up by a single working mother as a result. During my childhood, Sri Lanka experienced internal conflict caused by a civil war and my hometown was a major conflict zone. My family decided to emigrate in the hope of finding safety and increasing our chances of having a positive future.

In 1989, I followed my brother to Paris and was joined shortly after by my mother and sister. After some time, my family, led by my older brother, opened a restaurant. It was entirely family run and it was soon joined by a grocery shop. We began selling calling cards for people who wanted to phone abroad. Initially, a distributor was providing us with
the calling cards to resell. However, they stopped providing the cards, creating a sudden vacuum. My brother recognised that there was a demand for the product and identified the opportunity for us to distribute the cards ourselves.

As this venture developed, instead of selling cards produced by someone else, we started producing and distributing them ourselves. By 1997, our market had grown from just Paris to a number of countries in Europe, and we found ourselves, led by my brother, travelling from Paris to many European cities.

After marrying in 1999, my wife and I decided to move to London and continue the business; in 2002, I started Lycatel, a telephone calling card company. 

By 2006, with advancements in technology and the emergence of the mobile virtual network operator (MVNO) market thanks to government regulation, there was a void to be filled. This is how Lycamobile came to be.

Due to our price positioning and the global movement of people, the company has been able to expand rapidly and now, 10 years on, we are operating in 21 countries and have become the world’s largest international MVNO and the market leader in international prepaid mobile calls. 

We have also expanded beyond the telecommunications space, launching a range of complementary businesses servicing different market segments, including LycaMedia, LycaHealth, LycaFly and Lycaremit. 

In my younger days, I didn’t have any plans for the future. I always focused on seeking out and seizing the opportunities available to me. This approach has been fundamental to the growth of Lyca Group over the past 10 years and is something I continue to live by now. 

What does your role as Chairman involve?

In the early days, we were very focused on the day-to-day business activities and tried to be spontaneous, seizing every opportunity as it came along. 

Now, while I play a very active role in everyday business activities, my priorities as Chairman involve developing a long-term strategy that will ensure we are delivering the best services to our customers and meeting their ever-changing needs. This involves thinking outside the box and introducing innovative and complementary ideas, as well as looking for big investment and expansion opportunities. 

Part of my role has also been about building a strong team from the ground up throughout the business. I believe in the need to diversify a company’s power base and I know the business would not be where it is today without the work and support of my management team. These individuals play a vital role, overseeing the development of the business as we continue to innovate and grow. 

What has fuelled the growth of Lyca Group over the past 10 years and what are your next steps? 

Lyca certainly looks different now than 10 years ago. Geographical expansion has been a long-term focus and strategy of Lycamobile, in particular as we work towards our goal of reaching 50 million customers by 2020. We are now present in 21 countries around the globe, ensuring we are the largest MVNO by geographical footprint. This means we are able to offer a cost-effective service, and we are constantly innovating to meet the needs of diverse markets, geographically and across sectors and communities.

Some of our recent product launches have seen us breaking into new territories to bring our low-cost calling, messaging and data services to emerging markets such as Tunisia and Macedonia, and we have plans for further expansion into six new countries this year, including Ukraine, Serbia, Russia, South Africa, Sub-Saharan Africa, Eastern Europe and South-East Asia. The market context in these regions presents numerous challenges that we have continued to tackle through focused innovation and building meaningful relationships with partners.

To meet the needs of a rapidly developing global community, we have also needed to innovate, not only by launching Lycamobile’s services into new territories, but also by expanding our range of services into new business sectors. 

Today, it isn’t enough for families to be able to contact each other; they want to be able to transfer money to each other, watch the same shows, listen to the same music, and share in each other’s everyday lives. It is along these lines that the Lyca Group has evolved. The Lyca Group is now a multi-national corporation delivering low-cost products to more than 15 million customers, not just in telecoms but also across technology, media, financial services, travel and transport, healthcare and entertainment.

We have bold ambitions, and have already launched a number of new products and services in recent months, including Lycalotto and ChilliTickets, which we acquired earlier this year. Ultimately, we want Lycamobile to be an industry leader in the technology, media and telecoms (TMT) sector and for the group to be a well-established brand, synonymous with connectivity, trust and affordability.

What are the challenges and opportunities you’re facing in a VUCA world? 

We are operating in a highly competitive environment that is becoming increasingly saturated. 

Our flagship brand Lycamobile is faced with the entrance of businesses from a wide variety of sectors, which are showing an interest in launching MVNOs, be it post offices, football clubs, social-media start-ups, multilevel marketing groups, banks, and non-for-profit associations. 

In addition, the sector is rapidly changing with new technologies coming to market, and new regulations being brought in to manage them.

We need to ensure that we are always offering a differentiated service to our customers. We have done this not only by expanding our existing MVNO business into new geographies, ensuring we are able to offer a cost-effective service in the market today, but also by diversifying the business, offering our customers a range of complementary offerings that meet their needs. 

Do you think it’s possible to have a long-term strategy in business, or is success based on agility within the marketplace? 

In this volatile environment, I believe it is important to focus on a long-term strategy and core product offering, ensuring it is delivered consistently, with the highest possible levels of service. 

At Lyca, this means being dedicated to driving forward our ambitious growth plans and customer acquisition target. However, it is crucial to ensure this long-term strategy is never static and continuously reviewed. We must continue to have an innovative, dynamic and entrepreneurial approach that will allow us to react quickly to changing technology, customer needs, and the developing economic and political climate. 

We would not have got where we are today without this ethos. We have always been committed to staying ahead of the game, and so must remain dynamic and adaptive and push forward into new areas and markets that others haven’t, adapting to our external environment accordingly. 

What do you see as the trends impacting most on employers’ strategy globally? 

We are predominantly a technology-focused business and must compete with some of the world’s largest tech companies, to source and retain people with the right skills to drive the business forward and remain on top of the recent technological advancements. 

By fostering employee growth and development, we aim to create an environment where our staff are able to thrive, feel supported, become adaptable to different situations and want to remain loyal to the firm. Despite being a company with more than 8,000 employees, we retain a strong family feel, with everyone invested in the success of the business and experiencing the same highs and lows together. Everything we do at Lycamobile is about connecting with people and bringing communities together, and that’s also our attitude towards our employees. 

How do you ensure there is a culture of innovation throughout the organisation? 

Ensuring a culture of innovation within the group is crucial as we continue to develop high-quality products and services to meet our customers’ varied needs. 

Lycamobile is proud to be a market leader in our industry, and a large part of that is down to our commitment to staying ahead of the game by pushing forward and moving into new areas or markets that others haven’t. Not only have we been able to capitalise on this approach, but we’ve ensured we are delivering the best services to our customers, by continuing to meet their ever-changing needs.

We are dedicated to supporting, developing and nurturing the next generation of senior management, so hiring the right people at all levels of the business is vital, ensuring we maintain and foster the company values of trust, connectivity and innovation. It’s important that despite being a company of 8,000 people, we’ve maintained an open atmosphere, where staff at all levels feel comfortable putting forward ideas, big or small, which are supported, discussed and explored. 

You’ve moved between borders throughout your career. How have you been able to adapt?

I’m not sure how rare this trait is; the movement of people is as old as the world itself. However, having moved from Sri Lanka to Europe to escape the civil war at an early age, I’ve had to learn how to quickly and purposefully adapt to new cultures, markets and contexts in both my personal and business lives, and this certainly hasn’t been easy. But, over the years we’ve managed to transform these survival tactics into a set of core skills which have become the foundation of Lyca’s success and the key to running a successful global company. 

These skills – agility, flexibility, being relationships-driven – are not only the skills that we drive every employee to have, but also enable us to adapt our products and services across borders, and build strong and constructive relationships with partners across our operating regions. 

Lyca Group has employees in 21 countries – how do you ensure there is
a consistent mission and culture?

Working across such a diverse range of markets, it’s important that we uphold the clarity of our mission to connect communities and bring people together through a range of high quality products and services. To ensure that this message is spread across all our operating regions, we have a strong culture driven from the centre of the Lyca Group. 

Our management team is committed to travelling across the different markets to lead negotiations, build lasting relationships with our partners, and place people who share Lyca’s values in key positions.

Do you feel optimistic about the future of business in the age of the ‘new normal’?

As a group, we continue to adapt and evolve to market developments and new environments and are excited about plans to ensure the continued success of the Lyca Group through a programme of expansion into new markets and sectors. 

Reports have shown that the MVNO market will continue to grow in the coming years and we aim to be at the forefront of that growth, with plans to have 50 million people using Lycamobile by 2020, focusing on Africa, Asia and South America for growth – huge, largely untapped markets for MVNOs. We know we can make a real difference to people’s lives by bringing cost-efficient, high-quality products and services to help them better connect with their communities. 

I certainly feel very optimistic about the future. 

Exploring the digital marketing revolution

To create and communicate superior customer value, marketers must now combine traditional advertising with social and digital tools, argues American marketing guru Philip Kotler, in an interview with David Woods-Hale

You’ve written Marketing 4.0? What has changed since Marketing 3.0 was published in 2010?

Marketing is undergoing a digital revolution. We published Marketing 3.0 seven years ago to help companies broaden their view of how computers and the internet impact marketing theory and practice. We stressed the importance of meeting the needs of women, young people, and ‘netizens’ in carrying out company marketing activities. 

Today there is a need to pay attention to the growing role of social and digital media. Social media – such as Facebook, Instagram, Pinterest and Snapchat – create an increasingly connected world and they stimulate greater communications and sales to a wider world. Digital media is enabling artificial intelligence (AI) and the ‘internet of things’ (I0T) and increasing the rate at which robotisation and automation is penetrating business. Our aim in Marketing 4.0 is to illustrate the growing role and impact of digital marketing. I’ve also described this ‘new marketing’ in my 15th edition of Marketing Management

How can Marketing 4.0 help in bringing marketers up to date with the current skills required – from traditional to digital?

In the past, consumers made purchase decisions largely in retail outlets, whether in an auto dealership or in a large department store. Some consumers also used the telephone or mail order catalogues. Today, a growing number of consumers are making more of their purchases online via online retailers. In-store retailing is facing a major decline: witness, in the US, the news of Macy’s closing many stores, clothing store The Limited going out of business and shopping centres in deep trouble. 

Consumers still go into stores to sample and touch the product and then use their smartphone to see if they can a better deal elsewhere. Many retail shops are evolving into ‘showrooms’, partly charged by the company to its advertising budget. Business-to-business transactions are being increasingly conducted with digital media. Most companies list their product catalogues on the internet. Purchasing agents are happy to compare prices on the internet and are less interested in accepting sales calls. All this points to the need for companies to acquire social and digital skills before they are outclassed by more sophisticated digital competitors.

You describe ‘shifting power dynamics’ in the market. Can you explain this in more detail? 

Power has been shifting from the advertising giants who used 30-second commercials to inform and persuade consumers, to savvy consumers – who rely on their friends and acquaintances, plus online product ratings, to make their brand choices. Power has moved from companies to consumers. Companies must now develop fresh pictures of how consumers journey toward making their final purchases. It’s no longer a journey from a 30-second commercial to a purchase but from a stimulus on the internet, or from a friend, to a search for further information, to a purchase. Marketing 4.0 discusses the key steps in consumer journeys and the various touch points that will have an impact on the final purchase decision.

You explain how the rules of marketing regularly change, but this time the very customers have changed – and this is revolutionary – can you talk a bit more about this?

The basic maxim of marketing hasn’t changed. Decide on the consumer need your company wants to meet and the individuals who strongly have this need. Create a solution that meets this consumer need better than any competitor can meet it. See your job as one of creating superior customer value and communicating this value in a superior way.

What is revolutionary is the need for the company to incorporate social and digital tools to carry out this work. Companies need to collect ‘big data’ about individual consumers who have specific needs and apply sophisticated marketing analytics to arrive at consumer insights that can be converted into compelling consumer value propositions.

How do cyclical trends in the economy affect marketers? More specifically, if demand-led growth is on the decline, what single marketing effort is the most important to avoiding a loyal consumer defecting to a competitor?

Buyer behaviour obviously changes in times of market growth versus market decline. When a recession, or a fear of recession, occurs, consumers will intelligently reduce their expenditure and move towards lower-cost products. Every competitor will have a choice: increase the value of the offer, or cut the price of the offer. Normally it makes sense for the company to retain the price and better document and confirm the offer’s superior customer value. If superior value doesn’t exist, the company either has to add more value (for example, free shipment) or cut its price.

Do you think the original elements of the traditional marketing mix will still be relevant in 10 years’ time? 

The marketer’s main toolkit remains the 4Ps (product, price, place, and promotion) and STP (segmentation, targeting, positioning). Each of these elements undergoes modernisation all the time. Product includes packaging, as well as service products. Place is being redefined into omni-channel marketing but it is still place. Promotion is including digital and social communication alongside print and broadcast media. I would welcome a new marketing framework if it promised to address marketing decision problems in a more decisive way. Until then, most companies will use the traditional framework in preparing their marketing plans.

How will creative and media agencies need to evolve over the next five years to keep up with the pace of technology? 

The agency of the future will develop skills in both traditional and digital advertising. This would be better than hiring separate traditional and digital agencies because companies must connect traditional and digital advertising. A 30-second commercial may need to include a digital address showing where viewers can go for more information. The job of the ‘full-service agency’ is to find synergies between the two types of communication, so that 2 + 2 = 5, not 4.

Do you think that the chief marketing officer (CMO) role will be replaced by a combination of chief tech officer and chief analyst, or is this still a viable career path?

I’d like the CMO position to continue to manage the integration of all the elements that will impact on customer demand. The CMO should spend at least 50% of their time working with the other ‘chiefs’ in the company. The real value of the CMO will be realised when he or she is included in all the strategy planning. It would be unwise to confine marketing to designing tactical moves. The CMO is in the best position to foresee where the particular market is going economically and technologically. The CMO’s staff must include an excellent digital person and technology person. 

Do you think marketing and HR may evolve into one business function, as people leadership and organisational branding become increasingly connected, with shared goals and purposes?

I would prefer the heads of marketing and HR to work very closely together but remain separate functions. The CMO is highly interested in seeing that HR hires very service-minded people. In the hotel business, Marriott says that the first job is to hire the right employees and then the customers will come. The CMO should support the HR person to gain a sufficient budget to hire excellent employees, not just average employees. The evidence is strong that excellent employees have a productivity impact that is several times that of average employees.  

Do you think that zero-based budgeting for marketing, based on the Unilever example, will be widely adopted, to make marketing entirely accountable? How can value be measured throughout all channels since tracking is harder offline? 

Zero-based budgeting for marketing means starting each year with no budget allocated to marketing, until marketers propose specific marketing spend – along with the evidence that results will exceed costs. This is in contrast to normal budget setting where the budgets of the past year are the starting point, raised or lowered slightly. We acknowledge that some past marketing expenditures were not productive, and that from time to time, it is worth reviewing each major budget item to decide whether it should be eliminated, decreased or increased. 

The problem with zero-based budgeting for marketing is two-fold. Many campaigns need continuity and they shouldn’t be cut off before they have achieved their full impact. 

Also, it is increasingly difficult to assess the financial impact of a particular digital tool or a particular marketing channel in an increasingly complex and interactive world. 

Zero-based budgeting is a highly impractical tool for yearly budgeting. However, I grant that it could raise marketing efficiency by being introduced every few years.

Do you believe leaders across all disciplines and functions need to change their mindsets to succeed in a volatile world? 

Today’s world is increasingly characterised by volatility, uncertainty, complexity, and ambiguity (VUCA). Donald Trump’s election as US President has greatly contributed to VUCA. If Hillary Clinton had been elected (she won the popular vote by 3 million votes), we would arguably not be in a VUCA world. Events would have taken their normal course and businesses would carry normal expectations. 

But Trump sends out tweets in the middle of the night, many of which attack companies, journalists, judges, pollsters, or the voters themselves. These attacks are a sign of paranoia. Many business leaders have to think twice about any move for fear that the president will call them. Consumers are worried about their health benefits and they are no longer certain about social security and Medicare. They, and businesses, are spending their money more carefully, which slows down economic growth.

My answer to that? Business leaders must change their mindsets, in light of Trump’s erratic behaviour; he issues executive orders almost daily. His behaviour has been copied by populist leaders abroad with the effect of introducing even more instability into the world economy. 

Are there marketing skills that all MBA students and graduates need to thrive in a VUCA business world?

Most Business programmes are training their students in social and digital skills. They are also making students more aware of the effects of climate change. Professors are increasingly criticising shareholder value as the measure of business success and replacing it with stakeholder value as a more comprehensive measure of business performance. Marketing students graduate with a broader view of the factors that affect corporate image and reputation than previous Business School graduates. 

And finally, do you feel optimistic about business adaptability as the
world becomes more uncertain but also more connected? 

Business literature increasingly emphasises company agility and responsiveness to rapidly changing conditions. Companies need to monitor technological trends, political debates, and economic issues. Companies such as Unilever, Starbucks and Amazon show incredible business adaptability. But many companies are still coasting and need a few more shocks to wake up. My hope is that an increasing number of companies recognise that growing income inequality will hurt, not help them, and that they need to take a more expansive customer benefit and welfare view of what makes an economy strong.

Philip Kotler is the SC Johnson & Son Professor of International Marketing at the Kellogg School of Management, Northwestern University, Evanston, Illinois

Professor Kotler received his Master’s Degree at the University of Chicago and his PhD Degree at MIT, both in economics, conducting post-doctoral work in mathematics at Harvard University and in behavioural science at the University of Chicago.

He is the author of 57 books and has published more than 150 articles in leading journals. He was the first recipient of the American Marketing Association’s ‘Distinguished Marketing Educator Award’ (1985) and has received a host of other accolades, being inducted into the Management Hall of Fame in 2013. 

Kotler has consulted for such companies as IBM, General Electric, AT&T, Honeywell, Bank of America, and Merck in marketing strategy and planning, marketing organisation and international marketing. He has travelled throughout Europe, Asia and South America advising companies on applying economic and marketing science principles to increase competitiveness, and governments on developing the skill sets and resources of their companies for global competition.

He has been Chairman of the College of Marketing of the Institute of Management Sciences, Director of the American Marketing Association, is a member of the Board of Governors of the School of the Art Institute of Chicago and of the Advisory Board of the Drucker Foundation. 

He has received a number of honorary doctoral degrees from several international organisations.