MKX2521 Brand Management

Defining “Brand” #1
De Chernatony and dall’Olmo Riley (1999):

A multidimensional construct whereby managers augment product/service offerings with values and this facilitates the process by which consumers confidently recognize and appreciate those values

Defining “Brand” #2
Keller (2003):

A brand is a name, term, sign, symbol, or design which is intended to identify the goods or services of one seller or group of
sellers and to differentiate them from those of competitors

“Brand” in practical terms
• The identity of the branded product becomes clearer to both brand manager and consumer
• …a distinctive entity that differentiates a relevant, enduring and credible promise of value associated with a product and indicates the source of that promise
Customer Based Brand Equity is
the differential effect of brand knowledge on consumer response to marketing of the brand
Brand Knowledge Framework
Know the diagram
Brand Knowledge leads to
Brand knowledge leads to CBBE.
-Customer is aware of and familiar with the brand
-Customer holds some strong, favorable and unique brand associations in memory -Keller
Building CBBE;
Brand Knowledge Structures depend on
-Initial Choices for the brand elements
-The supporting Marketing program and the manny by which the brand is integrated into it
-Other associations indirectly transferred to the brand by linking it to some other entities
-Deliberately or accidentally
Benefits of +ve CBBE
-Greater Brand Loyalty
-Larger price premiums
-Greater trade support&co-op
-Increased MarComm Effectiveness
-Licensing Opportunities
-Support Brand Extensions
-Graduate jobs
-Customers’ lives are easier
-Brand Managers’ jobs are easier
Disadvantages of CBBE
-Difficult2change perceptns
-Positioning Shifts
-Volvo? Connex/Metro?
-Inaccurate/unwelcome associations
-Innumerate Marketers
-Boring Academics
-Ignorant Prejudice
-Racism
-Blonde Stereotypes
-Fraud
-Phishing
Strategic Brand Management Process
1.Identify & Establish Brand Positioning & Values
2.Plan & Implement Brand Marketing Programs
3.Measure & Interpret Brand Performance
4.Grow & Sustain Brand Equity
1.Identify & Establish Brand Positioning & Values
-Mental Maps
-Competitive Frame of Reference
-POPs & PODs
-Core Brand Values
2.Plan & Implement Brand Marketing Programs
-Brand Matrix
-Mixing & Matching of Brand Elements
-Integrating Brand Marketing Activities
-Leveraging of 2ndary assoc.s
3.Measure & Interpret Brand Performance
-Brand Value Chain
-Brand Audits
-Brand Tracking
-Brand Equity Management System
4.Grow & Sustain Brand Equity
-Brand Product Matrix
-Brand Portfolio & Hierarchy
-Brand Expansion Strategies
-Brand Reinforcement & Revitalization
CBBE Pyramid:
Know the Triangle: (Left side Rational, Right side Emotional)

Consumer-Brand Resonance

Consumer Consumer
Judgements Feelings

Brand Brand
Performance Imagery

Brand Salience

Salience Dimensions
Depth of Brand Awareness
-Ease of recognition & recall
-strength&clarity of category membership

Breadth of brand awareness
-purchase consideration
-consumption consideration

Performance Dimensions
Primary characteristics & supplementary features
-how to judge?
Goods Characteristics
-reliability, durability, serviceability
Service Characteristics
-effectiveness, efficiency, empathy
Style,Design
Price
Imagery Dimensions
User Profiles
-Demog&psychol chars
-actual/inspirational
-group perceptions — popularity
Purchase&usage situations
-type of channel, specific stores, ease of purchase
-time, location, context of usage
Personality & values
-sincerity, excitement, competence, sophistication & ruggedness
History, heritage & Experiences
-Nostalgia, memories
Judgement Dimensions
Brand Quality
-Value & Satisfaction
Brand Credibility
-Expertise, Trustworthiness, Likeability
Brand Consideration
-Relevance
Brand Superiority
-Differentiation
Feelings Dimensions
-Warmth
-Fun
-Excitement
-Security
-Social Approval
-Self-respect

-Of the brand itself, not peripherals
-What is this for Monash? Coke? L’Oreal?

Resonance Dimensions
-Behavioral Loyalty
-Frequency & amt of repeat purchases
-Attitudinal Attachment
-Love Brand/Proud of Brand
-Sense of Community
-Kinship
-Affiliation
-Active Engagement
-Seek info
-Join club
-visit website, chatrooms
Sub-Dimensions of CBBE pyramid
Know the Pyramid
Parts of the brand
Functional:
-Satisfying performance needs
Representational:
-Satisfying personal expression needs
-Particularly important with intangible products
In Both cases, perceived value exceeds cost:
-Nash Equilibrium
Components of the brand
Legal Instrument:
-Linoleum, Hoover, PC, Rollerblades, Bandaid, Kleenex
Logo:
-Bass, McDs, Coke
-A surprisingly small part of branding
Company Name:
-Telecom -> Telstra
-The virtuous cycle: McDs, Volvo, Monash
-Jagermeister
Components of the brand 2
Shorthand:
-7bits of info max
-Champagne, Schapelle, Ferrari
-Meaning can be unclear – Monash:”sustainable”
Risk Reducer:
-Performance, Financial, Time, Social, Psychological, Physical
Positioning:
-Happens in a customer’s mind
-Volvo, forever second?
Components of the brand 3
Personality:
-Singapore girl, sports stars, politicians
Cluster of Values:
-Price/value, product, personality; eg. virgin
Vision:
-Inspirational leadership; shared values
Added value:
-Must be genuine value
Identity & Reality
Brand Positioning
Act of designing the company’s offer&image so that it occupies a distinct and valued place in the target customer’s mind
Brand Positioning
Define competitive frame of reference:
-target market
-nature of competition
Define desired brand knowledge structures
-POP
-necessary
-competitive
-POD
-strong, favorable, unique
POPs & PODs
Points of parity
-“the same as”
Points of difference
-“better than”
On what criteria
Identifying & Choosing POPs&PODs
Desirability criteria (consumer perspective)
-personal relevance
-distinctive & superior
-belivable & credible
Deliverability criteria (org’n perspective)
-Feasible
-profitable
-pre-emptive, defensible & difficult to attack
Core Brand Values
-Set of abstract concepts or phrases that characterize the 5-10 most impt dimensions of the mental map of a brand
-relate to POP&POD
Mental Map -> Core Brand Values -> Brand Mantra
Brand Mantras
A brand mantra is an articulation of the “heart & soul” of the brand:
-brand mantras are short 3 to 5 word phrases that capture the irrefutable essence or spirit of the brand positioning & brand values
Nike:-Authentic Athletic Performance
Disney:-Fun Family Entertainment
Bic:-???
So how to put this into practice?
-Resourcing
-IMC
-2ndary associations
IMC & CBBE
It doesn’t matter HOW brand associations are formed, only the actual strength, favorability (or lack of), and uniqueness
-Melb better cuz Nobel prize winner worked 60 yrs ago; older buildings
-Monash better b/c of peter dixon, lawyers, IVF
-Nonsense, of course
-But.. Perception is reality
Climate Change?
Audience communication option overlap
know the Venn diagram
Leveraging 2ndary associations
Brand assocs also link2other entities, creating 2ndary assocs:
-Company (branding strategies)
-Cty of origin (identification of product origin)
-Chnls of distribution (thru chnls strategy)
-Other Brands (co-branding)
-Characters (thru licensing)
-Celebrity (endorsement advertising)
-Events (sponsorship)
-Other 3rd party sources (awards & reviews)
2ndary assoc.s may lead to a transfer of:
-Response-type associations
-Judgements (credibility)
-Feelings
-Meaning-type associations
-Product/service performance
-product/service imagery
2ndary assoc Transfer depends on
-Awareness & knowledge of entity
-Perceived relevance of entity linkage
-fit
-cue overload
-attributions
-evaluative consistency with brand assoc.s
Designing the Brand Hierarchy
-No. of levels:
-Principle of simplicity: least lvls possible; complexity of branding match product involvement
-Principle of clarity: r/s of brand elements obvious&transparent
-Lvls of awareness, types of assoc.s @ each lvl
-Principle of relevance: create global assocs, relevant across as many indiv items as possible
-Principle of differentiation: Differentiate individual items & brands as much as possible
Designing the Brand Hierarchy
-Decide how to link brands from diff lvls for a product
-Principle of prominence: relative prominence of brand elements affects perceptions of product distance & e type of image created for new products
-Decide how to link a brand across products
-Principle of commonality: the more common elements shared by products, the stronger the linkages
Brand Extension
Use of existing brand name to enter a completely different product class
-diff. to line extension (use of existing brand within existing product class/category
-btw 60-70% of all new products are extensions; in some categories, up to 95% (US FMCG)
Brand v line extension
Product Category
New Existing
New Product Flanker Brand New brandname
Brand Extension Line Extension Existing
Adv. of extensions
can potentially help new product acceptance:
-reduce risk perceived by customers&distributors
-decrease cost of gaining dist&trial
-increase efficiency of promotional expenditures
-avoid cost (&risk) of developing new names
-allow for packaging & labelling efficiencies
-permit consumer variety seeking
adv. of extensions
Can also provide “feedback” benefits to the parent brand & e company as a whole
-enhance the parent brand image
-improve strength, favourability & uniqueness of brand assocs
-improve perceptions of company credibility
-convey broader brand meaning to customers
-clarify core benefit proposition & business definition of the company
-bring new customers into the franchise & increase market coverage
disadv. of extensions
Risky
Can potentially result in these costs:
-cannibalize sales of parent brand
-hurt image of parent brand
-if extension fails
-even if extension is successful
-Opportunity cost
Do great brands avoid extension?
Model of Extension Evaluations
Creating extension equity depends on 3 factors:
1. Salience of parent brand assocs in ext. context
2.Favorability of inferred assocs in ext. context
3.Uniqueness of inferred assocs in ext. context
Brands have value
A reservoir of future cash flow
Methods of Measuring Brand Equity
-Qualitative
-Quantitative

Pros&cons?
When is each appropriate?

Quantitative
Consumer Surveys
-brand recognition, recall, imgae, purchase, intentions, loyalty, brand r/s
-google searches
-twitter mentions, FB fans
-experiments
-eye tracking
Brand Dynamics
-Measures & explains a brand’s consumer equity
-for each brand the system has 2 key components
-consumer value
-the brand pyramid
How they calculate brand value
Intangibles * Brand Contribution * Brand Multiple
WPP BRANDZ & Millward Brown Brand Dynamics Pyramid
-Bonding
-Advantage
-Performance
-Relevance
-Presence
Financial world valuation of Coke
Sales $9b
30% oper. margin
–>operating profit $2.7b
GENERIC PRODUCT:
60c capital needed for $1 sales
–>$5.4b capital
assumed 5% RoC for non-branded
2.7-(5.4*0.05)=2.4b Profit due to brand
Adj. for brand strength: up to 33.4b
in 2001 brand value was up to $68.95b
In Practice:
Interbrand
-projected future earnings for the brand
-adj. for inflation & risk
-brand earnings: 3yr weighted avg. of hist. profits
-exclude things that do not relate to the brand identity
Other proprietart brand measurement systems
Brand Asset Valuator (BAV)
Millward Brown’s Brand Dynamics
Right design depends on
-context
-industry
-client needs
brand vision
-long-term
-long-term objective
-aggregation of ST objectives
-must be pure & clear
Who owns a brand?
Shareholders?
Managers?
Customers?
Non-customers?
The Market?

Like having a baby?

Brand reinforcement strategies
Brand Awareness
-what products does the brand represent?
-what benefits does it supply?
-what needs does it satisfy?

Brand Image
-how does the brand convey superiority?
-what strong, favorable & unique assocs exist?

Continuity of brand meaning
-Subtle gradual changes as the marketplace changes
-Monash as radical new niche player 50 yrs ago; market leader now.
-Holden from aussie icon to global contender
Revitalizing a Fading Brand
Reversing a brand’s fortune involves
-recapturing lost sources of brand equity (eg. Kodak)
-Identifying & establishing new sources of brand equity (eg. Harley)

More Revolutionary than evolutionary, generally
-b/c you’re reversing a trend

Expanding Brand Awareness
Increasing Usage
-Increasing lvl or qty of consumption
-increasing frequency of consumption
Identifying new or additional usage opportunities
-communicate appropriateness of more frequent use in current situations
-reminders to use
Identifying new & completely diff. ways to use the brand
Effects of brand revitalization
-retain vulnerable customers
-recapture lost customers
-identify neglected segments
-attract new customers
-identify additional opportunities to use brand in similar way
-identify completely diff., new uses
Brand mgmt continuum
Evolutionary, reinforce, remind, refresh, revitalize, reposition, relaunch, Revolutionary
Retiring Brands
Decline stage of PLC
-reduce range, reduce support, harvest profits
Or merge/consolidate
-to preserve shelf space
-use mgmt time efficiently
-unilever 1600 to 400 brands
Consider exit barriers
-Pharmaceuticals
Disadv. of going global
-Consumption patterns differ across countries
-C responses 2 mktg stimuli diff. across coutries
-is this a problem?
-mkts diff. across countries
-legal, infrastructure variations
Standardization v. Customization
“think global, act local” -greenies
“think local, act local” -coke
Do the research properly
-Does existing mental map apply in new mkt?
-what is lvl of awareness?
-how valuable are assocs?
-what changes need to be made 2 mental map?
-how should changes be made?
set usable rules and use them
global brand charter
-what the brand is & what it is not
eg Disney
-never ever license disney images for toilet paper
-require permission from burbank to license
-can license w/o permission (t-shirts)
-with overriding rules
measure it
-track the brand
-global brand equity measurement system
-where possible
-the brand mantra, soul, values
Characteristics of Strong Brands
-Understand brand meaning & mkt appropriate products
-properly position brands
-superior delivery of desired benefits
-maintain innovation&relevance 4 e brand
-establish credibility&create appropriate brand personality& imagery
-communicate w a consistent voice
-employ a full range of complementary brand elements&supporting mktg activities
-strategically design&implement a brand hierarchy