Objective for Module 5 • Define brand equity and understand the issues that relate to brand management. • Define brand in the technical sense as well as by various abstract conceptualizations. • In relation to the Brand Report Card, the Brand Pyramid, and the Brand Space, know: • The problems/issues that led to the proposal of each. • How to identify the components of each • How to evaluate a brand according to each. • Any cautions of suggestions given in applying each. • Differentiate between branding issues for traditional good versus high-tech products.
WHAT IS BRAND EQUITY? The added value a given brand name gives to a product beyond the functional benefits provided. The amount that a customer is willing to pay for a given brand over and above a generic version of the same product.
2006Rank 2005Rank Name Country 2006Value($Mil) 2005Value($Mil) Change inValue(%) 2006Rank 2005Rank Name Country 2006Value($Mil) 2005Value($Mil) Change inValue(%)
Problems With Brand Equity • Few managers can assess their brand’s specific strengths and weaknesses. • Most have a good sense of one or two areas. • Most also have a hard time seeing all factors that affect the whole. • How can managers build brand equity? • What factors should be considered?
THE BRAND REPORT CARD • A systematic way for managers to assess the strengths and weaknesses of a brand • Based on ten characteristics displayed by the worlds strongest brands • Each characteristic is given a rating, 1-10. • This same tool can be used to assess competitive brands
The Brand Report Card 10 Traits • 1.) The Brand Excels at the Benefits Customers Truly Desire • Put together the right bundle of attributes that lead to benefits. • 2.) The Brand Stays Relevant • Brand equity is tied to objective aspects of quality as well as various intangible subjective elements: • User and usage imagery • Personality • Feelings elicited • Type of Relationship • Role of brand in society
The Brand Report Card 10 Traits • 3.) Pricing Strategy is Based on Consumers’ Perceptions of Value • Product Quality, Design, Features, Costs, and Price • 4.) The Brand is Properly Positioned • Well positioned brands occupy a niche in consumers’ minds • Points of parity • Points of difference
The Brand Report Card 10 Traits • 5.) The Brand is Consistent • Does the meaning/image of the brand remain consistent over time? • Balance of continuity in marketing activities with change needed to stay relevant • “Where you’re going, it’s Michelob” • “Weekends were made for Michelob” • “Put a little weekend in your week.” • “The night belongs to Michelob” • “Some days are better than others” • “A special day requires a special beer” • “Some days were made for Michelob”
The Brand Report Card 10 Traits • 6.) The Brand Portfolio and Hierarchy Make Sense • Main Brand and Sub Brands should complement each other • Each brand should have boundaries • 7.) The Brand Makes Use of and Coordinates a Full Repertoire of Marketing Activities • Logos, symbols, slogans, jingles, signage, packaging. • Integrated Marketing Communications • 8.) The Brand’s Managers Understand what the Brand Means to Consumers
The Brand Report Card 10 Traits • 9.) The Brand is Given Proper Support, and that Support is Sustained Over the Long Run • Build a solid foundation so consumers have proper awareness and association with it • Keep supporting the brand • 10.) The Company Monitors Sources of Brand Equity • Conduct Brand Audits and Brand-Tracking Studies • Formal brand-equity-management systems
Balancing the Brand Report Card Criteria • Maximize all 10 is the ideal objective • Focus on one may impact others, positively or negatively • Requires systematic plan • Requires commitment, not just going through the motions • Practice - Get one down, others become easier
What High-Tech Managers Need to Know About Brands Ward, Light, and Goldstine
The High-Tech Trap • Focus on the price-performance ratio as a means of achieving success. • Strategy is based on a product-centric model. • Brands and brand images are only relevant for irrational or emotional purchases. • Brand management is for the marketing department.
Getting Free From the Trap • A critical factor for high-tech success is brand management. • From product-centric to promise-centric business model. • Brand = promise of value • Beyond making the promise, must deliver the promise.
What is a Brand? • AMA definition = any name, sign, symbol, design, trademark, or combination thereof. • Authors’ definition = a distinctive identity that differentiates a relevant, enduring, and credible promise of value associated with a product, service, or organization and indicates the source of that promise. • All associations consumers have for the brand.
Why is creating the promise of value more challenging for high-tech products than for other types of products such as consumer packaged goods?
A Brand Pyramid What is the essential nature and character of the brand? Level 5 What does “value” mean for the typical loyal customer? Level 4 What psychological rewards or emotional benefits do customers receive? How does the customer feel? Level 3 What benefits to the customer or solutions result from the brand’s features? Level 2 What are the tangible, verifiable, objective, measurable characteristics of products, services, ingredients, or components that carry this brand name? Level 1
Understanding and Managing the Brand Space Berthon, Holbrook, and Hulbert
The Brand Space Enacted (focus on what it means rather than what it can do) Reified (brand closely identified with product) Abstract (brand almost product-independent) Functional (focus on what it can do rather than what it means)
The Reified-Enacted Brand (brand is strongly linked to the material product/service and is used to generate meaning and identity) The Abstract-Enacted Brand (brand is independent of product, or even groups of products, and is used to generate meaning and identity) Enacted (focus on what it means rather than what it can do) Reified (brand closely identified with product) Abstract (brand almost product-independent) The Reified-Functional Brand (brand is strongly linked to the material product/service and is primarily utilized for its functionality) The Abstract-Functional Brand (brand is relatively independent of product, or even groups of products, and is primarily utilized for its functionality) Functional (focus on what it can do rather than what it means)
Applying the Brand Space • Brainstorm at least one brand in each quadrant (not suggested by the article). • “Companies cannot so much manage a stable brand image as negotiate an evolving one.” • Consider the possible evolution/repositioning of each brand. What issues need to be considered? • Given the cautions and generalizations given by the authors, which directional migration makes the most sense? Is there a “best” quadrant?