Strategic Brand Management Chapter 1
What is a Brand? Old Norse word – brandr – to burn. AMA – Name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of the competition. Branding basis – people, place, animal or bird, scientific term, and things or objects. Branding contain – inherent product meaning, and attributes or benefits. Branding could be done for product (physical good, retail store, person, organization, place, or an idea. Brand = product + other differentiating dimensions (physiological and psychological)
Product Levels? Core benefits – fundamental need or want. Generic product – basic offering. Expected product – normal expectation from a product in the market. Augmented product – differentiating and distinguishing attributes, benefits, or related service. Potential product – ideal and in future.
Branding is Universal (anything can be branded) Commodity – Chicken, Coffee, salt, fruits, vegetables, water, etc. Physical good - Consumer products; Business to Business; High-tech products. Services – KPMG, Citi, Airlines, Energy firms, etc. Retailers and distributors – Sears, Wal-Mart, private or store brands. On-line product and services – google, e-bay, etc. People and Organizations – Paul Newman. Sports, Arts, and Entertainment – Cowboys? Geographic Locations – Australia, Alaska. Ideas and Causes – Red Cross, NRA.
Determinants of Brand Longevity Vision of the mass market? Managerial persistence? Financial commitment? Relentless Innovation? Asset leveraging.
Some Challenges… Savvy consumers, maturing market, decreasing brand loyalty. Brand proliferation, complex brand families, . Media fragmentation, eroding traditional media, new options, changes in advertising and promotional expenditures. Increased competition, difficulty differentiating, private labels. Increased cost, increasing trade power. Increased accountability, job turn-over.
Next? Brand Equity – financial value, intangible value, loyalty, consumer perception, consistent behavior???
Why Brand Equity? • Positive brand equity leads to: • Loyalty • Larger Margins • Greater Trade Support • More Efficient Communications / Marketing • Resiliency to Crises • Licensing Opportunities • Brand Extension Opportunities • Reduced Vulnerability to Competition • Greater financial returns
Brand Equity • Sources of Brand Knowledge • Associative node model of memory • Brand awareness • Brand image • Strength of brand associations • Favorability of brand associations • Uniqueness of brand associations
Stolichnaya Experienced Self-assured Successful Male Lexus Not-trendy Absolut Young Contemporary Flashy Male Bars Advertising or arts Brand Associations
Evolution of Brand Elements, GE • 1876-1960’s electronics • 1900 trademark’s logo • 1900 slogan – Better Living Electronically • 1960’s General Electric -> GE • 1970’s slogan – Progress for People • 1979 slogan – We Bring Good Things to Life
Brand Equity • But how does one develop brand equity? • The goal of this course is to learn how to manage brands (via marketing programs) in order to create brand equity - that is, create an enduring advantage for your brands. • Strategic Brand Management Process: • Identifying and Establishing brand position and values. • Planning and Implementing brand marketing programs. • Measuring and interpreting brand performance. • Growing and sustaining brand equity.
Building Customer-Based Brand Equity TOOLS AND OBJECTIVES KNOWLEDGE EFFECTS BENEFITS Choosing Brand Elements (4) Possible Outcome Brand name Logo Memorability Symbol Meaningfulness Character Transferability Packaging Adaptability Slogan Protectability } Brand Awareness (2) Greater loyalty Less vulnerability to competitive marketing actions and crises Larger margins More elastic response to price increases More inelastic response to price increases Increased marketing communica- tion efficiency and effectiveness Possible licensing opportunities More favorable brand extension evaluations Depth Recall Recognition Breadth Purchase Consumption Developing Marketing Programs (5 & 6) Product Functional & symbolic benefits Price Value perceptions Distribution channels Integrate “Push” & “Pull” Communications Mix and match options Brand Associations (2&3) Strong Relevance Consistency Favorable Desirable Deliverable Unique Point of parity Point of difference Leverage of Secondary Associations (7) } Company Country of origin Channel of distribution Awareness Other brands Meaningfulness Endorsor Transferability Event
Building Equity • Determine brand knowledge structures • Breadth of awareness (brand salience) • Positioning (points of parity/difference) • Image (strong & favorable brand associations) • Develop marketing programs • Integrate across product lines and geographies • Measure and control • Feelings/judgments/loyalty
Brand Value: Brand Hierarchy Pyramid Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers The emotional beliefs and values that consumers feel are being addressed by our brand (CENTRAL) Beliefs & Core Values The functional and emotional benefits that our product/services provides to the consumer (EXPRESSIVE) Benefits Easy to deliver and explain to consumers but also easy to imitate Features & Attributes Product/Service features and/or attributes that must be addressed (FUNCTIONAL)
Brand Management • Brand management is the act of designing and implementing marketing programs to build and maintain brand equity. • Product • Price • Distribution • Communications
The Role of a Brand or Product Manager • Prepare Marketing Plan • Develop Copy, Programs, and Campaigns • Stimulate Sales and Distribution • Market Intelligence • Product Improvements
The Role of a Brand or Product Manager • Pluses - Cost effective mix, quick market reaction, attention for small brands, good training for executives • Minuses - Conflict and frustration (responsibility and no authority), administrative work with executive expectations, learns products not functions, short horizon, costs of associates and assistants
A Product Manager -Computer Software Firm • Typical day • Meetings - new product line, marketing mix, marketing staff, organizational design and integration • E-mail/Phone - 3rd party developers, sales force, product support • Marketing planning - drafting the marketing plan
A Product ManagerComputer Software Firm • Marketing mix - recommends price to corporate committee, manages advertising, conducts focus groups for product positioning and development, decides on channels
A Product Manager -Consumer Packaged Goods Firm • Typical day • 75% fighting fires, 25% planning • Marketing planning - key is volume forecasting since unsold inventory is perishable • Mix - 1/3 on pricing issues (list & trade), 20% on consumer promotions, president handles ads, 15% on distribution, little on sales and service
A Product ManagerPackaged Goods Firm • Marketing mix - recommends price to corporate committee, manages advertising, conducts focus groups for product positioning and development, decides on channels.
Brand Management Issues Media Purchasing Packaging Promotion Services Salesforce Product Manager Distribution R&D Fiscal Manufacturing Legal Publicity Market Research Advertising Agency
Project Staring Point: Brand perception about: Brand features and attributes - awareness? Brand benefits – needs & expectations? Brand values - associations?