What is a brand? --A distinguishing name and/or symbol to identify and differentiate products from those offered by competitors. --Brand equity: the set of assets (or liabilities) linked to a brand name and symbol that goes beyond the value provided by the product.
Brand Strategy • Generic Branding: e.g. generic drugs • Global Branding: e.g. Nike • Umbrella Branding: e.g. levi’s and Dockers • Corporate Branding: e.g. Manufacturer--DuPont, Intel, Retailer--Wal-Mart, Rite-Aid • Co-branding: e.g. AA/Citibank credit card • Internet Branding: e.g. Yahoo!
A Simple Conceptual Model of Brand Equity . . . provides positive consumer responses . . . . . . and benefits both target customers and firm A good brand . . . Brand Awareness • Depth • Breadth Customer Benefits • Confidence • Loyalty • Satisfaction Product, Price, Community, Communication and Distribution Programs Wraparounds Core Product/ Service Brand Associations • Strength • Relevant • Consistent • Valence • Uniqueness • Memorable • Distinctive Firm Benefits • Reduced marketing costs • Increased margins • Opportunity for brand extensions Source: Keller (1996), Aaker (1996), Strategic Market Research Group, Marketspace Analysis
Marketing Programs to Build Brand Equity • Product • Pricing Brand Equity • Communication • Promotional • Program • Distribution
Customer-Equity • Attracting and Keeping Customers: • key to Successful Marketing Program • Examples: McDonald’s in China—traffic • online brands—google, yahoo • How to determine customer equity? • cost of acquiring customers and the future profit stream from retained customers.
Customer Equity (cont.) • Balancing the cost of customer acquisition and customer retention. • How to determine the optimal balance? Using decision calculus to determine the two returns from acquisition and retention. • Key for judging new products: will it grow our customer equity?
Maximizing Customer Equity • What are some ways to maximize the customer equity? • --Invest in highest-value customer base first. • --Transform product management into customer management. • --Reduce costs if you can. However, think about the take-off • time. • Tracking marketing programs for all competitors and yourself. • Is current market program build or erode your customer base?
High-Tech Brands • Product-centric vs. customer-centric model • Two statements about branding in high-tech industry • --brand images are only relevant when purchase decisions are • emotional. • --brand management is the job of marketing people. The future • of a high-tech company lies in technical breakthrough. • What is your opinion regarding the two statements? • High tech industry is still struggling. Where lies for future for IT • brands? Customer Service or technological rules?
High-Tech Brands (cont.) • Branding does not simply refers to designing an • attractive logo or slogan. • A brand plan is a full business plan! • Impact of merger on brand equity. • e.g. HP-Compaq merger, • Cingular-AT&T wireless
Brand Extension • Success v.s. Failure in brand extensions: • Success: e.g. Arm and Hammer toothpaste, Hershey chocolate milk • Failure: e.g. 7up Gold, Levi’s Tailed Classics suits, Dunkin Donut cereal, • Xerox Computer • How to Manage Brand Extension? • Advantage and Disadvantage of brand extension • Manage the risk of diluting or even destructing • parent brand image.
A Seven-Step Branding Process Clearly Define the Target Audience Step 1 Understand the Target Customer Step 2 Understand the Competition Step 3 Design Compelling Brand Intent Step 4 Identify Key Leverage Points in Customer Experience Step 5 Execute the Branding Strategy Step 6 Establish Feedback Systems Step 7
In class branding exercise • Pick an industry that of your interests. • Choices: cell phone, auto, beer, cosmetics, fragrance etc. • Following the seven-step branding process to come up with a new product/brand that have the potential to compete in the marketplace. • Be sure to analyze the competition using perceptual map, and see where you want your new brand to be placed into the competition. • Design a simple advertising program highlighting its logo, name, slogan if you can.