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MANAGING BRAND EQUITY-2. Why is managing brand equity important over time?. Changing marketing environment (external forces) Shifts in consumer behaviour Competitive strategies Govt. regulations Internal forces Changes in strategic focus of the company.

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  2. Why is managing brand equity important over time? • Changing marketing environment (external forces) • Shifts in consumer behaviour • Competitive strategies • Govt. regulations • Internal forces • Changes in strategic focus of the company.

  3. STEPS FOR MANAGING BRANDS OVER TIME • Reinforcing brands • Revitalising brands • Adjusting brand portfolio


  5. Reinforcing brands… • Brand equity is reinforced by marketing actions that consistently convey the MEANING of the brand to consumers in terms of BRAND AWARENESS and BRAND IMAGE. • Reinforced marketing actions, along with product development, branding strategies etc. also help in keeping the brand meaning in terms of products, benefits and needs as well as in terms of product differentiation intact.

  6. Reinforcing depends on nature of the brand associations • Product related performance associations • Product innovations are critical. Slide 72 • Change in product may not be drastic, as brand meaning may be associated with the product characteristics. Slide 73 • Non-product related imagery associations • Relevance in user and usage imagery is critical. Slide 73 • Potentially easier to change through major advertising campaigns (no product innovation may be involved). Slide 74 • Too frequent repositioning can blur the image of the brand and confuse or even alienate the consumers.

  7. Reinforcing of brands can be through… Maintaining brand consistency Protecting sources of brand equity Fortifying or Leveraging Fine-tuning the marketing support program.

  8. 1. Maintaining brand consistency • Consistency of marketing support is essential for maintaining strength and favorability of the brand. • Shrinking R&D and communication budgets may risk the brand becoming out-of-date, irrelevant or even forgotten. • Consistency to be shown in brand positioning. • Consistency doesn’t mean no changes at all. • “Tactics may change, but strategic positioning of brand should not change.” • Prices may go up or down, product features may be added or deleted, brand extensions added or withdrawn, ad campaigns may change . • Key elements of the marketing program and brand meaning should be retained and preserved

  9. 2. Protecting sources of brand equity • While looking at potentially powerful sources of brand equity, preserve and defend the existing sources. • Unless there is some change with either consumers, competitors or the company that makes the strategic positioning of the brand less powerful, successful positioning should not be deviated from. • Key brand associations should not be altered. • E.g. Maggi’s new introductions.

  10. 3. Fortifying versus Leveraging There is always a trade off between fortifying a brand and leveraging the benefits of the brand to financial gains. Fortifying means ways of increasing brand equity and furthering the brand image through continuous marketing and advertising efforts. On the other hand, capitalizing on existing brand equity to reap accruing benefits in terms of cost savings (reduced communication expenditure) and revenue opportunities (seeking increasingly higher premium and introducing brand extensions.)


  12. Increase quantity of Consumption Expand depth/breadth of awareness and usage of Brand New opportunities Increase frequency of Consumption Refresh old sources of BE New and different ways of use BRAND REVITALISING STRATEGIS Retain vulnerable Customers Create new sources of BE Bolster fading associations Recapture lost Customers Improve strength, favorability, and uniqueness of Brand Associations Neutralize negative Identify neglected segments Create new associations Attract new Customers

  13. Reverse Fortunes of Brands Recapture lost sources of Equity Identify and establish new sources of Brand Equity

  14. Repositioning(RI) Marketing Program (B2B) Steps to Reverse Fortunes of Brand • “Revolutionary”or “Evolutionary”changes? • Revisit the basic values of the brands • Determine current status of sources of Brand Equity • Ascertain effectiveness of key brand associations • Decisions on repositioning

  15. Marketing Program Failures Insufficient Consumers Less Damaging Enforce positive Associations Positioning Failures Sufficient but dissatisfied Consumers Extremely damaging Difficult to overcome negative associations Back 2 Basics Reinvention Continuum

  16. Approaches to Revitalisation • Expanding Brand Awareness • Improving Brand Image • Entering New Markets

  17. 1. Expanding Brand Awareness • Expand Breadth – Increased Usage • Quantity • Difficult to change • Function of particular beliefs • Exception – Impulse Consumption (availability) • Frequency • New opportunities • New Ways

  18. 1a. New usage Opportunities • Appropriateness & Advantages of using brands in new situations • Reminders to use brands in those situations • Improving Top of the mind awareness. • Functional Fixedness - avoidance in non traditional situations • Associated with special occasions only.

  19. Event Performance 1a. New usage opportunities contd… • Retain premium brand association • Consumer perception of usage differs from the reality of their usage. • Replacement cycles • Consumers educated about the merits of regular and increased usage.

  20. 1b. Identifying new & completely different ways to use the brand • New and different usage application • Only new ad campaigns not enough • New uses may arise from new packaging • Egs – Milkmaid, Amul Cheese, McDonalds

  21. Repositioning 2. Improving Brand Image Changing Brand Elements • Changes in Brand Awareness not sufficient • A new Marketing Program • Old positive associations to bolstered • New positive associations to be created • Negative associations to be neutralized

  22. Repositioning • Repositioning • Establishing more compelling points of difference • Remind consumers of virtues of brands that have been taken for granted • Nostalgia and heritage • Establish a point of parity on key image dimension • Negative product-related associations due to changes in consumer tastes

  23. Changing brand elements • Modification of Brand name • Other Brand Elements – Packaging, logos etc. • Moderate and evolutionary in nature • Preserve salient aspects of Brand elements • E.g.: Adidas, Federal Express, GE

  24. 3. Entering New Markets • Reach out to new Customer groups • Johnson and Johnson: Baby Soap, Baby Shampoo • Reach out to decision making segment instead of the users • Women as decision makers for men’s products • Tapping the female segment of the market • New market segments based on cultural dimensions • Retaining existing Customers and Regaining Lost Customers


  26. Approaches adjustment to brand portfolio • Migration Strategy • Acquiring new customers • Retiring Brands

  27. 1. Migration Strategy • Entry-Level Brands – Critical in bringing new customers • Logical ordering – Hierarchical structure in consumers mind. E.g. – BMW with 3,5,7 Series

  28. 2. Acquiring New Customers • To make up for loss of existing customers • Important to attract younger customers • Challenge – Making Brand seem relevant to customers • Each generation has a different attitude from its preceding generation • Strategies to encompass both new and old customers

  29. a. Multiple Marketing Program • Separate advertising campaigns and communication programs for each segment • Blurring of images due to media overlap b. Brand Extensions and Sub- Branding • New technology, features and attributes • Needs of new customers or changing needs of existing customers c. New Distribution Outlets • Making products more available

  30. 3. Retiring Brands Options • Marketing Support (Orphan Brand) • Reduce no. of product types • Almost no advertising and promotional expenditure • Consolidation • Stronger Brand HLL POWER BRANDS • Cut Costs • Focus marketing Efforts • Discontinue product • Spin off Orphan Brands after a cut off of low sales • Sell Orphan Brands • Fade away or discontinue consciously. E.g. - Citra

  31. Abandonment Decisions for Retiring Brands • Markets prospects • Rate and type of decline • Segments of enduring demand • Reasons for decline • Competitive intensity • CA of Competitors • Willingness to exit • Brand Loyalty of Customers and Price pressures • Brand Strength • Strong Associations • Market share and position in the market • CA w.r.t. key Segments • Brand’s fit in the Strategic Thrust • Exit Barriers


  33. Rationale For Going Abroad • Slow growth and increased competition in domestic markets • Overseas growth and profit • Economies of scale • Diversify risk • Global mobility of customers

  34. Advantages Of Global Marketing • Economies of Scale • Lower Marketing Costs • Power and Scope • Consistency in Brand Image • Leverage good ideas quickly and efficiently • Uniform marketing practices

  35. Disadvantages • Differences in consumer needs, wants and usage patterns • Differences in consumer response to 4 Ps • Differences in brand and product development and competitive environment • Differences in legal environment • Differences in marketing institutions • Differences in administrative procedures

  36. Global Branding Decisions • Deciding which markets to enter • Deciding how to enter the market • Deciding on the marketing program • Deciding on marketing organisation

  37. Selecting Global Markets • Economic Environment • Stage of development • Standard of living • Per capita income • Distribution of wealth • Currency stability • Exchange rates • Cultural Environment • Language • Lifestyle • Values • Norms and customs • Ethics • Taboos International Marketing and Promotional Decisions • Demographic Environment • Size of population • Number of households • Household size • Age distribution • Occupation distribution • Education level • Employment rate • Income levels • Political/Legal Environment • Government policies • Laws and regulations • Political stability • Nationalism

  38. Global Customer Based Brand Equity • Creating Brand Salience • Crafting Brand Image • Eliciting Brand Response • Cultivating resonance

  39. Building Global Customer Based Brand Equity • Understand similarities and differences in the global branding landscapes • No shortcuts • Establish Marketing Infrastructure • Integrated Marketing Communication • Brand Partnership • Balance Standardization & Customization • Local and global control • Establish operable guidelines • Global BEMS • Brand Elements

  40. 1. Understand similarities and differences in the global branding landscapes • Developed & Developing Markets • Landscape of Global Brands

  41. 2. Sustained activity in Brand Management • Continuous activities • Greater focus on R&D • Product Life Cycle critical to brand’s growth

  42. 3. Establish Marketing Infrastructure • Blend ‘push’ and ‘pull’ strategies to build brand equity • Infrastructure constraints. Ex. Nestle in China

  43. 4. Integrated Marketing Communication • Establish awareness and key points of parity. Ex. Kellogg’s • Positioning same but creative strategies may differ. Ex. Dove • Easily available media options: cable and satellite; niche magazines

  44. 5. Brand Partnership Alternative ways of entry: • Exporting existing brands (geographic extension) • Acquiring brands (Brand Acquisition) • Brand alliance Trade off between key criteria: speed, control and investment.

  45. Heineken’s Sequential Strategy • Export to build brand awareness • License to local brewer to expand volume • Take equity stake or forge a joint venture (piggyback sales of high priced Heineken brand with established local brand) • Heineken’s takeover of DB Breweries in New Zealand successful

  46. 6. Balance Standardization & Customization • Standardization versus Customization - Globally standardized items: advanced, functional, reliable and low priced. Ex.: McDonald’s: Ronald McDonald appears worldwide but the food and marketing is localized. • Standardization and Customization: Standardized marketing: L’Oreal: ‘Because I’m Worth It’. Customized marketing: Tide in Russia positioned as economy brand. (Little specific knowledge in Russia)

  47. Factors favoring standardization • Common customer needs • Global customers and channels • Favorable trade policies and common regulations • Compatible technical standards • Transferable marketing skills • Essential criteria for development of global brand: - positioning and branding applied globally - technology which can be applied globally - capabilities for local implementation • Key considerations in implementation - market development and competitive environment at similar stages in both countries - consumer target markets should be alike

  48. Supporting Marketing Programs - Product • Only certain products marketed similarly. Ex. Pampers disposable diapers • Conduct research in local markets • Product differences sometimes not justified. Ex. Palmolive soap • Sell both global and local brands. Ex. Coke sells Thums-Up in India

  49. Price • Consumer perceptions of value, willingness to pay, elasticity to price change • Pressures for international price alignment: ‘Gray imports’ • ‘Price Corridor’ takes in account differences in countries and alignment pressures

  50. 7. Local & Global Control • Decisions on Centralization or Decentralization • Nature of products and its linkage to local culture • Strategically easier to define but difficult to implement

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