Has social media brought major changes to brand-building?

What should a modern entrepreneur focus on to build a really strong brand? Should you go for revitalizing and old brand or rebrand completely? How important customer experience is? Has social media brought major changes to brand-building? Christian Majgaard, former Head of Global Brand & Business Development at LEGO, gives you answers to these questions and more, in an interview with Portfolio ahead of the HVCA-Portfolio Investment Conference 2018 coming up on 12 June.
Portfolio: How can revitalization of brands work alongside private equity?

Christian Majgaard: Getting new owners, often implies new corporate strategy and hence new brand strategy. New brand strategy, by the way, should never stand alone. New owners often bring new spirit and new competences, that can raise the quality of the analysis and discussions around the brand strategy.

How can investors revitalize brands in traditional sectors? Should they revitalize the old brand, or rebrand completely?

There is no given answer to that question, - it depends on the situation, i.e. I recommend follow the sequence: analysis, diagnosis, cure-plan. For brands with a high awareness but a dusty image, it is most often easier to lift the image of such a well-known brand, than it is to raise the awareness of a completely new brand. Innovation of product and service is often an overlooked, yet highly important prerequisite for e.g. changing advertising strategy.

How can you revitalize a brand? How can new owners help re-energize an established brand?

New owners can (should!) request proper brand analysis and bring people on board who know about brand building. Too often ideas about brands are not rooted in analysis or competency.

How successful can a brand be after an extensive turnaround process?

It depends on whether the turn around was designed with a better customer experience in mind or only was a short-term number cruncher - exercise, aimed at saving the bottom line.

How helpful is outside investment in establishing or recreating a brand?

It depends on which other values that are joining the investment, such as potential alliances, access to skilled people, possible co-branding etc.

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How strong is Europe’s technology base as a seed bed for strong new branded enterprises?

I am not a sector analyst nor a macro economist, but new innovative technology often fosters many more new brand-building opportunities outside the circles of the pure R&D /invention scene. Think of the invention of plastic or aluminum or the chip! In my city alone (250,000 inhabitants) there are more than 100 new robotic companies. Robotic technology in its core was about programming a chip and getting signals from sensors, but on the stage of applications we see many new brands (mostly B2B).

What sectors in CEE have the strongest brands?

Among consumer brands I think Gorenje in Slovenia and Skoda in Czech Republic have come a long way. Cities, such as Prague and Budapest, are certainly also strong tourist brands.

Chopin is in a way a strong Polish brand although mixed up with Paris, and Swarovski a strong Czech brand.

How strong is entrepreneurship in Western Europe?

It has certainly become main stream to talk about and to cherish entrepreneurship. Numerous conferences and prizes throughout Europe are dedicated to entrepreneurship.

How strong is entrepreneurship in CEE?

I sense there is a lot of spirit and energy in favor of innovation. I sometimes hope there would be more corporate locomotives per industry sector leading the way for other start-ups.

Has social media brought major changes to brand-building?

Yes and no.

“Yes" in the sense that the brand owner is no longer controlling the dialogue about his own brand. And yes in the sense that the communication parameter has changed a lot.

“No" in the sense, that the customer experience during use /consumption still is the key to brand building in most cases.

What should a modern entrepreneur focus on to build a really strong brand?

Whether modern or not, I recommend focusing at the customer experience.

Christian Majgaard will hold the keynote speech at the HVCA-Portfolio Investment Conference 2018 in Budapest on 12 June.

Reports from our previous conferences organised jointly with the Hungarian and Private Equity and Venture Capital Association (HVCA):

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