CORPORATE INNOVATION AT 3MDeepika Saxena|PGP31148

Designing and implementing brand architecture strategies

3M: A well known and respected brand

About the Company

Minnesota Mining and Manufacturing Company, headquartered in Minnesota

Employs more than 75,000 people worldwide, produces more than 50,000 products

Regularly ranks among top 10 U.S. companies each year in patents received

With around $30 bn in sales, 3M budgets roughly 5-6% of sales to R&D activities

Culture of innovation promoted by a corporate environment that facilitates new discoveries

3M Range of products

Post-it Notes

Adhesives

Contact lenses

Tapes

Optical filmsIndustrial Abrasives

History of Innovation

3M was founded

First sandpaper sale was made

Waterproof sandpaper- world’s first water resistant coated abrasive patented & introduced

Scotch cellophane first introduced

Scotchgard fabric & upholstery protector introduced

First metered dose asthma inhaler introduced

LED illuminated projection engine for integration in personal devices introduced

Cubitron II industrial abrasives were introduced

World’s largest aperture trough for concentrated solar power was unveiled

19021906

19211930

19561995

2008

2012

2010

What makes 3M so innovative?

3M’s “15 percent time” allows the staff to spend 15% of their time working on projects of personal interest to explore new ideas

3M encourages everyone, not just engineers, to become “product champions”. A culture of healthy competition among highly motivated peers helps the company innovate and create

Promising new ideas are assigned to a multidisciplinary venture team headed by “executive champions”. Venture teams whose new products earn more than $2 mn in U.S. sales or $4 mn in worldwide sales within three years of commercial introduction are awarded

3M expects some failures and uses them as opportunities to learn how to make products that work. Further, a dual ladder approach allows senior, technically inclined individuals with attractive career opportunities to advance, without having to switch to management

3M: One strong brand, complemented by many strategic brands

One of the best 100 global brands by strategic brand consultancy, Interbrand in 2012

Market leading strategic brands

Strategic brands play an important role in strengthening the 3M brand allowing the company to deliver tangible results that enable customer success

Branding strategy or Brand architecture

Branding strategy for a firm reflects the number and nature of common brand elements applied to different products sold by the firm

Brand architecture improves brand awareness, customer understanding and communicates similarity and differences between individual products

Brand architecture also enhances the brand image by maximizing transfer of equity to/from the brand to individual products, thus improving trial and repeat purchase

3M Brand architecture strategy

Articulate Brand vision:3M Technology Advancing every company3M products enhancing every home3M innovation improving every life

Define Brand boundary:3M has limited its operations in the industrial, healthcare, consumer, electrical, safety and cleaning segments. These segments are in alignment 3M’s vision & positioning, appealing to a sizeable market

Brand positioning:3M has positioned itself as a product leader. It strives to have consistently better products than its competitors through its innovative approaches.

Step 1- Define brand potentialStep 2- Identify brand extension opportunities

Step 3- Brand new products and servicesThrough its consistent innovation, 3M has

managed to achieve brand extension in most of its business segments. Some of the extension opportunities 3M has capitalised upon are:a. Traffic safety productsb. Advanced healthcare productsc. Cubitron II abrasivesd. Authentication productse. ESPE LAVAf. ACCR

Though 3M spends around $1.8 billion a year on research and development and employs 8,500 researchers in its labs world-wide, it is known to the public mainly for a few household and office products including Scotch tape and Post-it Notes. 3M’s higher-tech materials, including films used to brighten the screens of smartphones, often are hidden inside other company’s products.To make sure that it is a science-based company, 3M recently introduced a new tagline : “3M Science. Applied to Life.”

Alternative branding strategiesThe 6 main brand architecturesPositioning alternative branding strategies

3M: Endorsing brand strategy

Brand hierarchy for an endorsing brand

Brand endorsement can be graphic (placing the emblem of the endorser next to the brand name)

Endorsing brand allows greater freedom of movement; profits less from its products

Endorsing brand strategies is one of the least expensive ways of giving substance to a company’s name

Brand-Product Matrix

A Brand-Product matrix must define:

Product-Brand relationships (columns)• Brand portfolio

Brand-product relationships (rows)• Line & category extensions

Products

Brands B

C

A321

Designing a Brand portfolio

• The number and nature of different brands marketed in the product class sold by a firm is referred to as brand portfolio

• The reason for creating a brand portfolio is to pursue different market segments, different channels of distribution, or different geographic boundaries

• The objectives while creating a brand portfolio should be to maximize market coverage and to minimize brand overlaps

3M Brand Portfolio

Through its focus in these segments, 3M has taken concrete steps to ensure a. Maximization of its market coverage

so that no potential customers are being ignored

b. Minimization of brand overlap so that brands aren’t competing amongst themselves to gain same customer’s approval

Brand roles in the portfolio

High-end prestige brands

Low-end entry level

Cash cows

Flankers3M CORE Brands

Corporate Branding at 3MCorporate Image Dimensions

Common product attributes, benefits or attitudes• High quality corporate image association• Innovative corporate image association

People and relationships• Customer-focused corporate image association

Values and programs• Socially responsible corporate image association• Environmentally concerned corporate image association

Practices at 3M

Innovative corporate image association- Strong emphasis on a culture of innovation, facilitation of new discoveries and brainstorming sessions

Customer-focused corporate image association- Focus to provide best customer solutions and become product leader

Environmentally-concerned corporate image association- Commitment to sustainable development through a proactive approach to environmental protection

Corporate credibility• Expertise• Trustworthiness• Likability

3M delivers on all three parameters

e

Corporate Brand Equity

• It occurs when relevant constituents hold strong, favourable and unique associations about the corporate brand in memory

• Encompasses a much wider range of associations than a product brand

Objectives of Corporate Brand Campaign

Possible objectives

Build awareness of the company & the nature of its business

Create favourable attributes & perceptions of company credibility

Link beliefs that can be leveraged by product-specific marketing

Make a favourable impression on the financing community

Motivate current employees and attract potential recruits

Influence public opinion on issues

3M’s Corporate Brand CampaignCorporate key messages

3M is a diversified technology company

3M applies innovation systematically to anticipate & respond to customer needs

Practical & ingenious solutions are a strong part of 3M’s legacy

3M is a global company with local presence throughout the world

3M consistently fulfils its commitment to investors, customers, employees & communities

3M fosters a culture of leadership at all levels

3M can be trusted to do the right thing

Summary

3M has a creative corporate culture that promotes innovation

One of 3M’s major strengths is that it works closely with customers to find new opportunities and trends in the market

The company operates across five major business segments that maximize customer coverage and minimize brand overlap

3M follows an endorsing brand strategy that allows greater freedom of movement

Through its corporate key messages, 3M aims to build a strong corporate identity

These slides have been created as part of an individual assignment during the PGP Brand Management cuurse taught by Prof. Sameer Mathur at IIM Lucknow.