Strategic Brand Management Ananda Hussein Ph.D
STRATEGIC BRAND MANAGEMENT • A product is anything that is potentially valued by a target market for the benefits or satisfaction it provides, including objects, services, organizations, places, people, and ideas
What is Brand? • A brand is a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.
Strategic Role of Brands • FOR BUYERS, BRANDS CAN: • reduce customer search costs by identifying products quickly and accurately, • reduce the buyer’s perceived risk by providing an assurance of quality and consistency (which may then be transferred to new products), • reduce the social and psychological risks associated with owning and using the “wrong” product by providing psychological rewards for purchasing brands that symbolize status and prestige.
Strategic Role of Brands • FOR SELLERS, BRANDS CAN FACILITATE: • repeat purchases that enhance the company’s financial performance because the brand enables the customer to identify and re-identify the product compared to alternatives, • the introduction of new products, because the customer is familiar with the brand from previous buying experience, • promotional effectiveness by providing a point of focus, • premium pricing by creating a basic level of differentiation compared to competitors, • market segmentation by communicating a coherent message to the target audience, telling them for whom the brand is intended and for whom it is not, • brand loyalty, of particular importance in product categories where loyal buying is an important feature of buying behavior.
Brand Management Challenges • Intense price and other competitive pressure • Fragmentation of markets and media • Complex brand strategies and relationship • Pressure to invest elsewhere • Short-term pressure
Strategic Brand Management Brand Identity Strategy BRAND EQUITY MANAGEMENT Identity Implementation Brand Strategy Over Time STRATEGIC BRAND ANALYSIS Managing the Brand Portfolio Leveraging the Brand
Strategic Brand Analysis • Strategic brand analysis includes market and customer, competitor, and brand analysis • Tracking brand performance to guide decision on new products, modified products, and eliminating products.
Product Life Cycle Relevant issues in PLC analysis include: • Determining the length and rate of change of the PLC • Identifying the current PLC stage and selecting the product strategy that corresponds to that stage • Anticipating threats and finding opportunities for altering and extending the PLC
Brand Equity • Effective strategic brand management requires that we understand brand equity and evaluate its impact when making brand management decisions: “Brand equity is a set of brand assets and liability linked to a brand, its name,andsymbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.”
Measuring Brand Equity. Several measures are needed to capture all relevant aspects of brand equity.** • loyalty (price premium, satisfaction/loyalty), • perceived quality/leadership measures (perceived quality, leadership/popularity), • associations/differentiation (perceived value, brand personality, organizational associations), • awareness (brand awareness), and • market behavior
BRAND IDENTITY STRATEGY Brand identity is a unique set of brand associations that the brand strategist aspires to create or maintain. These associations represent what the brand stands for and imply a promise to customers from the organization members.* Four Brand Identity Perspectives Product Organization Person Symbol * David A. Aaker, Building Strong Brands, 1996, 68.
Strategies for Improving Product Performance Product improvement Cost reduction Alter marketing strategy Product line Strategy Add new product(s) Eliminate specific product(s)
MANAGING THE BRAND PORTFOLIO Leverage Commonalities to Generate Synergy Allocate Resources Reduce Brand Identity Damage BRAND PORTFOLIO OBJECTIVES Facilitate Change and Adaptation Achieve Clarity of Product Offerings Source: David A. Aaker, Building Strong Brands, New York: The Free Press, 1996, 241-242.
BRAND LEVERAGING STRATEGY LINE EXTENSION Minor variants of a single product are marketed under the same brand name BRAND EXTENSION • Extensions of the brand name to other product categories • --Similar • --Dissimilar
CO-BRANDING Co-branding (dual branding) involves two or more established brands making a joint offer of their product brands — The participant’s brand names are identified on the good or service. Several different forms – Component co-branding (Volvo and Michelin) Same company co-branding Alliance co-branding (Delta and American Express) Ingredient co-branding
SEVEN DEADLY SINS OF BRAND MANAGEMENT* • Failure to fully understand the meaning of the brand. • Failure to live up to the brand promise. • Failure to adequately support the brand. • Failure to be patient with the brand. • Failure to adequately control the brand. • Failure to properly balance consistency and change with the brand. • Failure to understand the complexity of brand equity measurement and management. *Kevin Lane Keller, Strategic Brand Management, Prentice Hall, 2003, 736.