Product & Brand Management

(1)

Important Notice:

This file is intended only for use by the

students of Alliance University’s

MBA 2011-13

Batch, Semester III, Section B

as part of the

Product & Brand Management course.

(2)

Product & Brand

Management

MBA July 2011-13 Semester III

Marketing Section B

(3)

Four Parts within the Course

1. Brand Introduction, Customer Equity,

Customer Value

2. Brand Elements, Product Strategy,

Integrated Marketing

Communications

3. Secondary Brand Associations, Equity

Measurement

4. Implementation, extension, managing

(4)

Part 1:

Introduction

Customer Based Brand Equity

Creating Customer Value

(5)

(6)

Brands versus Products

• Product: anything offered to the

market that satisfies a want or need

• Brand: a product with a difference

compared to other products that

satisfy the same need

(7)

Evolution of Branding

Unbranded Goods

•Treated as commodities

•High level of substitutability

Classical marketing Post-modern

marketing

Brands as Reference

•Companies start to differentiate

based on physical attributes of

product (clothes get “cleaner”)

•Mainly due to competition

Brands as Personality

•Differentiation by product

attributes becomes difficult

• Many similar claims

•Gives the brand a personality

•Also adds emotion

(caring mother)

Brands as Icon

•Brand owned by consumers

•Extensive knowledge +

associations

•Starts belonging to a group

Brands as Policy

•Alignment of company with

ethical, social causes

•Consumers commit to the

cause

Brands as Company

•Complex identity

• Many points of contact

•Brand is same as the Co.

•Customers involved in

brand creation

Source:: McEnally, Martha R. and de Chernatony, L, The Evolving Nature of Branding: Consumer and Managerial Considerations, Academy of Marketing Science Review, 1999, pp.1.

7

(8)

Too early for brand as policy?

8

(9)

Branding Challenges and

Opportunities

• Savvy customers: customers check

websites, blogs, reviews

• Brand proliferation: many similarities

• Media fragmentation: high cost, high

clutter, technologies (TiVo, AdBlocker)

• Increased competition and costs

• Greater accountability (short-term

quarterly view)

(10)

Customer Based Brand

Equity

(11)

Customer Based Brand Equity

• CBBE: The differential effect that brand

knowledge has on customer response

(12)

Customer Based BE: Sources

• Two sources:

1. Brand Awareness: ability to recognize

and recall the brand

2. Brand Image: creating strong,

favorable and unique associations

(13)

Four Steps in Brand Building

• Identity: identification of the brand

• Meaning: what does it stand for?

• Response: what is the customer

response?

• Relationships: how can an intense

loyal relationship be made?

(14)

Internal Transformation

Four Steps in Brand Building

©Dr. Thomason Rajan, Alliance University 2012

Response

Relationship

14 Superior

customer care

Hiring &

grooming top

software talent

Provide options

for people to

express

Cosmetic Element

Identity

Meaning

The world’s

local bank

Let’s build a

smarter

planet

Express

yourself

(15)

Keller’s Pyramid: Six Blocks

• Salience: awareness-depth (recall) and

breadth (range of products)

• Performance: how well it meets functional

needs-features, price, consistent (reliable),

long life(durable)

• Imagery: intangible links (e.g. Nivea + family)

• Judgments: evaluation of quality

• Feelings: emotional reactions (warmth, fun,

social approval)

(16)

Keller’s Pyramid: Six Blocks

Intense active loyalty “Relationships”

Positive, evaluations and

emotional reactions “Response”

Points-of-parity & difference,

“Meaning”

Deep awareness,

“Identity”

Salience

Performance

_Imagery

Judgments

Feelings

Resonance

16

(17)

(18)

Customer Value

• Companies must study whether their

product offers value-will customers pay

for their product?

• Two concepts:

– Customer Relationship Marketing uses a

company’s own data systems to track

consumer activity & interactions

– Customer Equity: sum of lifetime value of

customers (cost to acquire customers,

retain them and cross-sell other products)

18

(19)

19

Customer Relationship:

Retention dynamics

Most traditional

marketing efforts

directed to this region

(attracting customers)

But retention is key!

Prospects

Suspects

Disqualified

Clients

(special)

Members

(

membership)

Advocates

Ex-customers

(Inactive)

Partners

First-time

(20)

20 Engaging customers is the key to

Lifetime Value and Retention

e.g. Engaging an airline

customer with a 360

o

_view

(21)

Customer Equity: 3 Key Drivers

1. Value Equity:

objective

assessment of

utility (quality, price, convenience)

2. Brand Equity:

subjective

assessment of

the brand (customer’ brand awareness,

attitude & perception of brand ethics)

3. Relationship Equity: tendency to

stick

with

the brand (loyalty programs, special

care, community building, knowledge

(22)

Power shift to customers

22 #ccdsucks: A hashtag propagated by a group of

twitterers who had a poor experience at CCD in

Chennai. The CCD Manager had demanded that the

group shell out a cover charge if they wanted to use

their premises for a tweetup:

CCD sucks… @cafecoffeeday at Ispahani center is kicking twitter out.. #ccducks

Tweet from @PPrakash (Prakash P) at 7:50 PM Feb 4

th

_{from Snaptu}

#ccdsucks cover chrg not defined but threats turng up frm mgr

Tweet from @idlee_amin (Tushar R) at 7:51 PM Feb 4

th

_{from Snaptu}

Cover charge for sitting in this place RT @PPrakash: CCD sucks… @cafecoffeeday at Ispahani

center is kicking twitter out.. #ccducks

(23)

23

Next morning, CCD wakes up

and smells the coffee

@gopal_b :O We're v sorry about this! It is not CCD's policy to charge a cover.

Thanks for letting us know. We're checking on it right away!

Tweet from @CafeCoffeeDay (Café Coffee Day) at 10:44 PM Feb 5

th

_{via web}

@narayananh @bombaylives @additiyom @wiredvijay @ubiquitense CCD does

not charge a cover. Thanks a lot for letting us kno n we're v sorry!

Tweet from @CafeCoffeeDay (Café Coffee Day) at 10:47 PM Feb 5

th

_{via web}

@PPrakash @AmolMathur @ahmedhussain @idlee_amin @CreativeWolf Tnks for

leting us kno ppl! We don have a policy to chrg a cover. Chking rt nw

Tweet from @CafeCoffeeDay (Café Coffee Day) at 10:52 PM Feb 5

th

_{via web}

@AmolMathur @PPrakash We really want to resolve this issue. pls help us do that.

Give us a no. to call so we can personally apologize.

Tweet from @CafeCoffeeDay (Café Coffee Day) at 12:14 PM Feb 5

th

_{via web}

#ccdsucks #ccd CCD does not have a policy to charge a cover anywhere in

India. We apologize for the goof up. This will nt be taken lightly.

Tweet from @CafeCoffeeDay (Café Coffee Day) at 12:17 PM Feb 5

th

_{via web}

#ccdsucks #ccd Like we said, give us an opportunity. Give us a no. to call. When

resolved, we'll tell evryone bout it on Twitter. Publicly

(24)

Sentiment Analysis

126

488

68 10%

Positive

72%

Neutral

18%

Negative

Number of #ccdsucks tweets (1-week period)

For/Against Analysis

36%

For CCD

64%

Against CCD

49

27

CCD : Digital Troubles

(25)

@CafeCoffeeDay Followers

Jan 19

Jan 24

Jan 29

Feb 3

Feb 8

Feb 13

Feb 18

300

250

200

150

100

50

0 @CafeCoffeeDay’s followers

increased exponentially in the

week of the #ccdsucks crisis

(26)

26

(27)

Brand Equity versus Customer

Equity

• Both BE and CE are related and linked

to each other.

• A few differences:

Customer Equity

Obsessed with

short-term revenues

,

does not focus on brand building,

employees or competition

Brand Equity

Strategic

in nature, focuses on

long-term profits, less focus on

segmentation

(28)

(29)

Brand Positioning

• The

heart

of marketing strategy

• Designing the company’s offer &

image to occupy a distinct place in

the customer’s mind

(30)

Brand Positioning Guidelines

• Two Parts

1. Define the competition: understand the

product and the category

2. Chose POP and POD

Brand Y

_{Brand X}

(31)

POP and POD

1. Points of Parity (POP): attributes shared

with other brands. Two types:

– Category POP: match the product category

(e.g. bank cheques)

– Competitive POP: match the competition

(e.g. banks and online banking)

2. Points of Difference (POD): attributes or

benefits that are positive, strong and

different from competitive brands.

– Desirable: relevant, unique, believable

(32)

Establishing POP and POD

• Attributes & benefits must be correctly

correlated. Trade-offs happen:

• Update the positioning over time:

– Laddering: explore motivations (Maslow);

move from attributes to higher values

– Reacting: defend, attack competition

Price

Quality

Taste

Health

Strong

Safe

32

(33)

Laddering hidden motivations

Health, food, sleep

Safety, shelter

Love, affection,

group belonging

Self esteem

esteem from others

True

potential

Maslow’s Needs Hierarchy

Soft drink

Safe

drink

Friend’s

drink

CEO’s

drink

My

private

drink

(34)

Core Brand Associations

• Abstract associations that show 5-10

most important aspects of a brand

• To create this, customers asked to

draw a mental map, then grouped.

Intellect

Values

Principles

Murthy

Good Brand

Blue logo

Green

campus

Pyramid

Conservative

Human Connection

S

e

a

r

c

h

Funny

Larry, Sergey

Great Brand

Colorful logo

Free

food

Doodle

Risk taking

34

(35)

Brand Mantra

• Heart and soul of the brand (the spirit, the

essence) in 3-5 words

–

Mc Donald’s: “Food, folks and fun”

–

Nike: “Authentic athletic performance”

–

Fedex: “Peace of mind”

• Usually has three parts:

–

Emotional modifier: benefit (authentic)

–

Descriptive modifier: attribute (athletic)

–

Brand Function: product nature (performance)

(36)

Internal Branding

• Members of the company must be

aligned to the brand.

• Employees must be up-to-date and

have an understanding of the brand

• Helps create a brand “culture”

• Critical for service companies

(37)

Internal/External Branding Example:

Tata Code of Conduct

(38)

©Dr. Thomason Rajan, Alliance University

2012

38 Have FUN

Don't take yourself

too seriously

Maintain perspective

Celebrate successes

Enjoy your work

Be a passionate

Team-player

Follow The Golden Rule

Adhere to the Principles

Treat others with respect

Put others first

Be egalitarian

Demonstrate proactive-

Customer Service

Embrace the SWA Family

Work Hard

Desire to be the best

Be courageous

Display urgency

Persevere

Innovate

Internal Branding Example:

Southwest Airlines Culture

(39)

Internal Branding Example:

Defining the Zappos Culture

1. Deliver WOW Through Service

2. Embrace and Drive Change

3. Create Fun and A Little Weirdness

4. Be Adventurous, Creative and Open-Minded

5. Pursue Growth and Learning

6. Build Open and Honest Relationships With

Communication

7. Build a Positive Team and Family Spirit

8. Do More With Less

9. Be Passionate and Determined

10. Be Humble

Employees document their thoughts on Zappos Culture in the Culture Book

(40)

Brand Audit

• Examination of a brand to discover its

sources of brand equity. Two parts:

1. Brand Inventory: how products are sold,

competitor profiling (POP, POD), brand

extensions

2. Brand Exploratory: understand customer’s

thoughts, feelings, perceptions

• Can be Qualitative (Free association, story

telling, projective techniques) or Quantitative

(41)

Part 2:

Brand Elements

New Perspectives

Product, Price, Channel Strategy

(42)

(43)

Choosing brand elements:

Six criteria

• Memorable - how easily it is recalled-Lux, LG

• Meaningful - is it credible to the

category-Close-up

• Likeable - is it aesthetically appealing-Scorpio

• Transferable - is it good for related

products-Close-up Mouthwash, Scorpio Minivan?

• Adaptable - can the brand be

updated-Dettol liquid hand wash

• Protectable - can it be legally protected, risk

of becoming generic e.g. Kleenex, Xerox,

Fiberglass

I have a Meaningful Memory of this girl/boy. I Like him/her cause he/she

is so APT (Adaptable, Protectable and best of all -Transferable!!!)

(44)

Tactics for Brand Elements

• Brand Name

–

Awareness: simple and easy (Lux, Coke)

–

Associations: meaningful (Close-up)

–

Legally Protectable

• URL: simple, avoid cliches, armani.com

• Logos and Symbols: visual appeal

• Characters: human element (Pillsbury)

• Slogans: short phrases, verbal imagery

• Jingles: musical messages (Intel tone)

• Packaging- display, storage, transport;

visual & verbal appeal

Anand

Ramnath

Mani

(45)

Elements of Look & Feel

Graphic element

+ The colour palette

+ Typography (font)

+ Image style

+ Tone of voice (angry, sweet)

(46)

Commands

respect, authority

•America’s favored color

•IBM holds the title to blue

•Associated with club soda

•Men seek products packaged in blue

•Houses painted blue are avoided

•Low-calorie, skim milk

•Coffee in a blue can perceived as

“mild”

Caution, novelty,

temporary,

warmth

•Eyes register it faster

•Coffee in yellow can perceived as

“weak”

•Stops traffic

•Sells a house

Secure, natural,

relaxed or easy-

going, living things

•Good work environment

•Associated with vegetables and

chewing gum

•Canada Dry ginger ale sales increased

when it changed sugar-free package

from red to green and white

BLUE

YELLOW

GREEN

The Personality-like Associations of Colors

©Dr. Thomason Rajan, Alliance

(47)

Human, exciting, hot,

passionate, strong

•Makes food “smell” better

•Coffee in a red can perceived as “rich”

•Women have a preference for bluish red

•Men have a preference for yellowish red

•Coca-Cola “owns” red

Powerful, affordable,

informal

•Draws attention quickly

Informal and relaxed,

masculine, nature

•Coffee in a dark-brown can was “too

strong”

•Men seek products packaged in brown

Goodness, purity,

chastity, cleanliness,

delicacy, refinement,

formality

•Suggests reduced calories

•Pure and wholesome food

•Clean, bath products, feminine

Sophistication, power,

authority, mystery

•Powerful clothing

•High-tech electronics

Regal, wealthy,

stately

•Suggests premium price

RED

ORANGE

BROWN

WHITE

BLACK

SILVER,

GOLD

47

(48)

48

(49)

(50)

The New Pepsi Logo

• Industry estimates suggest Pepsi paid

the designer firm close to $1 million for it.

(51)

Response to the New Pepsi Logo

Pepsi Logo-Designer’s

Response

(52)

Brand Identity

• The entire set of brand elements is

called the brand identity

• Marketers must ensure that the identity

is consistent

• Rich, concrete visual imagery usually

helps

(53)

Legalities of Branding

• Trademark: Visual representation that

can be registered. Helps fight

counterfeits

– Name, logo, pack design can be

trademarked

• In India, protection is through

Trademark Act 1999

(54)

Legalities of Branding

• Kraft sued Britannia over infringement

of Oreo product design

54 ®

(55)

New Perspectives on

Marketing

(56)

The New Economy

• Four major drivers:

– Digitization: Internet, mobile

– Disintermediation: new middlemen

• e.g. eBay charges its stores insertion and

subscription fees plus 1-7% of final sale

– Customization: tailored products

– Industry convergence: blurring boundaries

and products

(57)

Industry &Product Convergence

Gaming

Console

Book

Reader

Internet

Browser

Music

Player

Video

Player

Digital

Camera

Television

Alarm

Clock

FM

transmitter

Personal

computer

Document

Scanner

10

(58)

The New Economy: 2 keys

• First Key-Integration: Every point of contact

matters. Marketers must use all possible means

to create product knowledge.

–

e.g. P&G “Moms” for Olympics

58

(59)

The New Economy: 2 keys

• Second Key-Personalization: 3 parts

–

Experiential Marketing: the time customers spend

with you is key, dazzle their senses, appeal to their

hearts, let them think, act, relate (Schmidt)

–

One-to-one Marketing: database (Readers Digest)

–

Permission Marketing: offer incentive to customer

to volunteer, teach about product, reinforce

guarantees that customer retains permission, get

more permission, try to get profits

(60)

Experience Counts

Coffee Cup

Identity

Experience (charging for time spent)

‘It’s not about the coffee - we are in the “Time Pass” business.’

-K. Ramakrishnan, President – Marketing, Cafe Coffee Day

(61)

Product, Pricing and

Channel Strategies

(62)

(63)

Basic Concept: Product Levels

Generic

Expected

Augmented

Potential

Core

Product

Fundamental Need

Rest and sleep

Basic, no-frills version

Bed, towels

What the customer normally expects

Clean bed,

_{fresh towels}

Additional features, benefits

and service

Cable TV, flowers

All possible future transformations

_{pillow, free spa}

Chocolates on

(64)

Part 1: Perceived Quality &

Value

• Perceived Quality: Customer’s perception

about overall quality compared to

alternatives. Depends on:

– Functional dimensions: performance, features,

reliability, durability, service, style, design etc.

– Intangibles: abstract product imagery,

symbols, personality

• McKinsey 3-D: 3 dimensions-functional, process

(purchasing), relationship benefits

– Value Chain: Porter’s tool to create value

(65)

Porter’s Value Chain

©Dr. Thomason Rajan, Alliance University

Margin

Competitive

Advantage

Four Support Activities:

Firm’s infrastructure, HRM, Procurement ,

Technology development

Five Primary Activities

Inbound

Logistics

Operations

Outbound

Logistics

Marketing

& Sales

Service

(66)

Part 2: Relationship Marketing

• RM: current customers are key to

long-term success.

• Three issues:

– Mass customization: built to order (Dell,

Nike ID)

– After-marketing: marketing after purchase

(user manuals, toll-free, blogs)

– Loyalty programs: maintaining and

increasing yield from best customers

(67)

(68)

Value versus EDLP

• Commanding price premiums is crucial

for a brand. Most products have a

“Price band”- a range of acceptable

prices

– Value Pricing: right blend of product

quality, costs and prices. Design helps

– Everyday Low Pricing (EDLP): long-term

price discounts for retailers.

• Discounts did not reach customers, so P&G

reduced list price on all its products worldwide.

(69)

(70)

3 way balance to fix prices

Product Design

(new tech, new

styles)

Product Price

(perceived value)

Product Costs

(lower costs)

70

(71)

• Cartier designer Aldo Cipullo designed “Lovers

Bangle” in 1969. Features a unique screw design

that can only be opened by couples with a special

screwdriver, symbolizing eternal love.

• Premium pricing as there is “value” in it (GBP 3000).

Design helps improve prices:

Cartier Love Bangle

(72)

(73)

Channel Strategy:

Direct, indirect and web

• Design and management of distributors,

wholesalers, retailers (intermediaries)

• Design (direct and indirect)

– Direct: through contacts. Better for B2B

• Company owned stores, shop within stores, directly

– Indirect: sell through 3rd party

• Push (through retailers) and Pull (through customers)

• Retail Segmentation (branded variants for shops)

• Co-operative ads (company & store share 50-50)

(74)

Channel Strategy: Private Labels

Real

brands

“Similar”

_{Store brands}

(75)

Channel Strategy: Private Labels

• Private label: product marketed by stores,

25-30% margins (twice that of brands)

– Costs less, so customers prefer it

– Focuses on broad category, challenge for

brands

• How brands respond:

– Product and packaging innovation

– Increase ad and promotion budgets

– Introduce “fighter” brands

– Reduce costs for critical POP

(76)

Integrated Marketing

Communications (IMC)

(77)

Marketing Communications

• Media landscape is changing rapidly

• Various options to choose from:

• Key is to find out ways to pick the right

media & judge effectiveness of the ads

Media

TV, Radio,

Newspaper, Mags

Direct Response

Mail, phone, print

Online

Web, email, social

media

Place

Billboard, movies,

airports, lounges

Purchase Point

Shelf, aisle,

shopping cart,

in-store TV

Trade promos

Trade deals, POP

allowance,

incentives

Customer

promos

Samples, contests

Event Marketing

Sports, arts, fairs,

entertainment

Publicity and PR

Personal selling

(78)

Communication Options:

Advertising

• Advertising: Paid form of promotion of

ideas, goods or services by a sponsor.

• Several mediums. 2 aspects:

– Message strategy: Positioning of the ad

(what to convey), scientific

– Creative Strategy: Expressing the claim,

artistic

• At times, testing is done to gauge initial

reactions of customers to new ads

(79)

Simple test for Marketing

Communication Effectiveness

• What is your current brand knowledge?

(Detailed map)

• What is your desired brand knowledge?

(POP, POD, Brand Mantra)

• How does the communication option help

get the brand from current to desired

knowledge?

Current Brand

Knowledge

Desired Brand

Knowledge

(80)

Advertising Guidelines

• TV: easy way is to find borrowed

interest devices that capture

attention:

– Cute babies:

– Frisky puppies: Hutch ‘pug’

– Popular music: most Coke ads

– Celebrities: Lux

– Amusing situations: Chlormint,

Centerfresh “Security”

– Provocative sex appeal: Axe

– Threat: Saffola, Max Bupa

80

(81)

Advertising Guidelines

• Radio: identify brand early, repeat

• Print: clear headline, images

• Direct response: database driven, personalized

• Websites: eye catching, experience

• Billboards, lounge, POP: must sell in “15 seconds”

• Promotion: must drive consumer/trade loyalty

• Event Marketing & Sponsorship: corporate

image, social issues, reward- ‘optimum’ use

• PR and Publicity: buzz (e.g. Apple media leaks)

• Personal Selling: train the team, talk to customers

(82)

Sales Promotions:

(for sales decline or excess stock)

01July -28 September, 2010

The “Achieving 30 lakh sales” promotion

Launch of re-designed i10

29 September, 2010

(83)

(84)

IMC: Six Criteria

• Coverage: proportion of audience reached

• Contribution: ad’s ability to get desired

response

• Commonality: Consistent image across

different elements

• Complementarity: Combine communication

options (e.g. ads + promos)

• Versatility: ads must affect different consumers

(multiple or broad campaign)

• Cost: most effective & efficient per Rupee

spent

84

(85)

(86)

Part 3:

Secondary Brand Associations

Brand Equity Measurement & Tracking

Relationship Models

(87)

Secondary Brand

Knowledge

(88)

Secondary Brand Knowledge

• Linking the brand to some other entity. Two

outcomes:

–

Creation of new associations: customer may form a

new mental association, especially of they don’t

care about the original brand

–

Effects existing brand associations: transfer of

judgment and feelings occur

• Key is to look for commonality(similar) or

complementary associations

Attributes, Images,

Thoughts, Experiences

(89)

Sources of Secondary Brand

Knowledge

• Company itself (Corporate)

• Countries/geography (American Tourister)

• Distribution channels (Exclusive rights, licensing)

• Co-brands (Tata-AIG, Wipro-GE)

–

Ingredient co-brand (Dolby, Lycra)

–

Advertising alliances

• Characters

• Spokespersons (Celebrities, employees-IBM)

• Sporting or cultural events (Rolex Cup)

• Third party sources (awards, reviews)

(90)

(91)

Brand Equity Measurement:

Overview

• Marketing spends have to be justified

• Key word is ROMI (Return on Marketing

Investment)

• The Brand Value Chain is a good

starting point to assess the sources and

outcomes of Brand Equity

• Marketers much create value by investing

in the chain and then “maximizing” it using

multipliers

(92)

The Brand Value Chain

Marketing

Programs

(ads,

promotions)

Customer’s

Mindset

(awareness,

attitudes, activity)

Market

Performance

(market share,

reaction to

changing prices)

Shareholder

Value

(stock price,

P/E ratio)

Stages

Multipliers

Quality

of

Programs

•Clarity

•Relevance

•Distinctiveness

•Consistency

Conditions

in

the Marketplace

•Superior competitors

•Channel support

•Customer size &

profile

Sentiment

of Investors

•Market dynamics

•Growth potential

•Risk profile

•Brand Contribution

92

(93)

The Brand Value Chain

(e.g. Tata Motors)

Marketing

Programs

(ads,

promotions)

Customer’s

Mindset

(awareness,

attitudes, activity)

Market

Performance

(market share,

reaction to

changing prices)

Shareholder

Value

(stock price,

P/E ratio)

Stages

Not Impressive

(Total Mouthshut Rating)

Impressive

Good quality of ads

Happy shareholders

Impressive

Vehicle Market Share:

Commercial: 61%

Personal : 18%

(94)

Brand Tracking

• Brand Audit: intensive, customer-focused

• Assesses brand health, uncover sources of BE,

suggest ways to improve equity

• Brand Tracking Studies:

• Collect quantitative data periodically on how

brands perform on key dimensions

• Tracking routine information from customers &

documenting in Brand Equity Report

• Product-Brand Tracking: awareness & image

• Corporate Brand Tracking: family brand (GE, Tata)

• Global Tracking: track many geographic areas

(95)

Brand Equity Management

System: 4 steps

1. Formalize the company view of brand

equity into a document: The Brand

Equity Charter

– Scope of key brands, actual and desired

equity, measurements, tactical guidelines

– Usually updated annually

2. Capture results of tracking surveys into

Brand Equity Report (What’s happening

and why)

– Updated monthly, quarterly or annually

(96)

Brand Equity Management

System: 4 Steps…Contd.

3. Define organizational responsibilities:

– Centralized with VP or Director (Brand

Management)

– Reports directly to CEO

– Oversees Brand Equity Charter and Report

– Long-term perspective (3-4 years)

4. Re-design the marketing function to

optimize brand equity

– Introduce Brand or Category managers

– Manage suppliers and partners

96

(97)

Brand Equity Management

System: 4 Steps

2. Track and report

1. Document

3. Define the

structure

4. Redesign the

function

(98)

Measuring Sources

of Brand Equity

(99)

Qualitative Techniques

• Unstructured approach based on

customer responses

• Free Association: most powerful, asks “what

comes to your mind when you think of”

• Focus groups: 6-10 carefully selected people

freely discuss

• Projective Techniques: to uncover true hidden

feelings-comparison, completion tests

• Brand Personality and Values: human

character (if the brand is alive, who’d it be?)

• Experiential Methods: go out and observe

(100)

The Azerbaijan Car:

what comes to your mind?

₁₀₀

(101)

Quantitative Techniques

• Definitive, numerical

• Awareness: Recognition (Yes/No) and aided /

unaided recall

• Image: use scale, rank to measure Strength,

Favourability (like/dislike), Uniqueness

• Brand Response: measures likelihood of

purchasing the brand

• Brand Relationships: measures loyalty (last

brand purchased), substitutability (chose

another brand)

(102)

Tests (Unaided & Aided)

• H Y _ T _

• D_ _ N E _

• M_ _ I N _ _ A

• K _ T_ _

HYATT

DISNEY

MAHINDRA

KOTAK

(103)

Tests (Unaided & Aided)

(104)

Zaltman Metaphor Elicitation

Technique

• Participants asked to select 12 images

from their own sources that represent

the research topic

• These images are explored further in a

2 hour interview

• Tries to understand consumer’s

unconscious motives while buying stuff

• Also helps to understand interconnected

ideas or themes that influence thought

(105)

The 7 Universal Metaphors

(Zaltman)

105 • Balance: need for justice, equilibrium

• Transformation: changes in substance and

circumstances

• Journey: meeting of past, present & future

• Container: need for inclusion, exclusion

• Connection: need to relate to oneself,

others

• Resource: need to acquire & its

consequences

• Control: sense of mastery, vulnerability, and

well-being

(106)

Examples of using 7 key

metaphors

(107)

(108)

ZMET Step 2: Getting

metaphors from pictures

108 ZMET DE Beers Study Collage Creation

among High Networth Individuals:

Driving statement is “I

am rich, so I bought

diamonds” for her

birthday and I also

love her!

Pictures of luxury

products, individual

women

Driving statement is “I

love her and as it was

a special occasion, I

bought diamonds”!

Pictures of relationship

and bonding

Key Insight: “Diamonds are mile-markers on life’s journey”

Heavy Consumers

(109)

ZMET Step 3: fit into 3 levels

and one of 7 key metaphors

109

(110)

ZMET Step 4:

Campaign/ Product

110 Key Idea:

Buy a diamond for each

step in your journey of love

(111)

Relationship Models:

(112)

Brand Relationship Quality

• Susan Fournier measures brand strength

using Brand Relationship Quality (BRQ)

• Six facets:

– Interdependence: routine rituals, addiction

– Self-concept connection: one with the brand

– Commitment: faithful, loyal

– Love/passion: warmth, affection

– Intimacy: deep familiarity

– Partner quality: empathy, reliability, faith

(113)

Brand Dynamics Model

(Millward Brown)

Strong

Weak

Presence

Relevance

Performance

Advantage

Bonding

Is it the best?

Does it offer anything better than others?

Can it deliver?

Does it offer me something useful?

Do I know about it?

(114)

Brand Asset Valuator

(Young & Rubicam)

2012

•Differentiation (degree of difference)

•Energy (ability to meet future needs)

•Relevance

•Esteem (respect for the brand)

•Knowledge (familiarity)

Brand

Stature

(Report Card)

Energized

Brand

Strength

(Future Value)

114

(115)

Brand Asset Valuator Grid

Current Performance-Brand Stature (esteem/ knowledge)

Future Financial

Performance

Strength

(Differentiation,

energy,

relevance)

Unfocused or

New

Strong Current

Performance

High Earnings with

continuing High

potential Leadership

High Potential, Low

Earnings, Niche

Challenged

Eroded

Low

High

New

Eroding

Growing

Leadership

(116)

Measuring Outcomes of

Brand Equity

(117)

Measuring Outcomes of

Brand Equity

• Two methods:

– Comparative: examine (by comparing

with others) the consumer attitudes,

awareness and unique associations

toward a brand

– Holistic: estimating an overall value either

in abstract utility terms or concrete

(118)

Measuring BE Outcomes:

1. Comparative Method

• Comparative Method: approximate

values

– Brand based: customer response to

different brands (e.g. blind tests)

– Marketing based: customer response to

changes in marketing

– Conjoint analysis: response to see what

customers insist and what they are willing

to let go (e.g. utility vs. price trade-off)

• value attached to each feature- “part worth”)

(119)

3246

Response to

Changes to Marketing

119 • Skoda Rapid was launched in the

Indian market in November 2011

• Initial campaign was typical

formula-driven

• Feb 2012, the Big Fat Indian Wedding

campaign released

• Sales growth starts

• Sales

in the month of June 2012 is

3246 units

Nov 11

Dec 11

Jan 12

Feb 12

Mar 12

Apr 12

May 12

Jun 12

Wedding

Campaign

1000-1200

Source: Nov 11-Feb 12 http://www.carkhabri.com/carnews/skoda-rapid-overtakes-volkswagen-vento

1503

+16%

2204

+46%

(120)

Utility Functions Based on

Conjoint Analysis

Most preferred choice

in red circles

(121)

Measuring BE Outcomes:

2. Holistic Method

• Holistic Method: overall value (utility/

financial)

1. Residual: Unique Brand Value is Consumer

Preference minus physical product

attributes. Difficult to calculate precisely

2. Valuation: placing a financial value on

brand equity for licensing/mergers. 2 parts

• Brand Earnings: profitability

• Brand Strength: leadership, stability, market,

(122)

2.1 Holistic Method:

Residual Approach

Greater the difference

between Coke’s

perceived value and

the final price, better

the Residual Value

(123)

2.1 Holistic Method:

Residual Approach

• If you control parts of the marketing mix,

you get the unique brand preference

• Several ways to check:

– Brand Awareness: how popular the brand is

– Equalization price: price that equates brand

utility to the attribute utility (utility of brand

name, brand image, usage)

– Attribute-perception biased component:

perceived value of the brand minus

(124)

2.2 Holistic Method

: Brand Valuation

• Helps during:

• Mergers and acquisitions: evaluate

purchases and to facilitate disposal

• Brand licensing: to third parties and for tax

calculations

• Fund raising: as collateral on loans

• Brand management decisions: allocate

resources, develop brand strategy

(125)

2.2 Holistic Method:

Brand Valuation..Contd.

• To calculate brand value, you need 2

numbers: Earnings (profit, margin) and

Brand Strength

(multiplier)

– Earnings of Coke: $9 billion sales with 30%

margin, so brand contribution (approximate)

is $2.7 billion (9 billion X 30%)

– Strength

(multiplier) gives points to factors like

leadership

(2.5)

, stability

(2.5)

, Market

(2)

,

geography

(2.5

) protection

(0.5)

and adds up

the points. E.g. for Coke

10

(126)

Calculating brand value:

Infosys methodology

• Determine brand profits

by eliminating the

non-brand profits & tax from

the total profits

• Calculate the

brand-strength multiple.

• 4,486 X

09.03 = Rs. 40,509cr

(2011)

• 3,687 X

10.01 = Rs. 36,907cr

(2010)

Rs. Crores

Source:

http://www.infosys.com/investors/reports-filings/annual-report/annual/Documents/AR-2010/Additional-Information/Brand-Valuation.html