www.dramitrangnekar.com [email protected] 1
Brand Management 3.0
MBA Class Notes
Dr Amit Rangnekar
[email protected]
For MBA Class Notes and Case study presentations on
strategic management/ brand management/ marketing management, visit
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About the Author
Dr Amit Rangnekar, MBA (Marketing) and PhD (Business Strategy)
from NMIMS, Mumbai, has over 2 decades of progressively responsible pharma industry experience with Centaur
Pharmaceuticals. In 2006 Dr Rangnekar was awarded a 10 nation scholarship to Europe by the Government of Denmark to complete his doctoral research. His co-authored book "Cases in Indian
Management" was launched in Mumbai, Dubai and London in 2008.
Embarking onto teaching as a hobby in 2003, Dr Rangnekar is a visiting faculty at Mumbai's leading B-Schools. His repertoire of insightful notes and compelling case studies have added value to over 10,000 MBA students. He shares his thoughts and
knowledge with a global audience through his immensely popular website and blog, which have together clocked over 900,000 hits.
Dr Rangnekar has presented on various business case studies on marketing, branding and business strategy, at B-schools and corporates across India and Europe. He has been a faculty at global leadership programmes of numerous Fortune 100 companies in Europe and Asia. He is also an external guide for two PhD research scholars.
Co-ordinates Email [email protected] , [email protected]
Concise class notes on marketing, branding and strategic management
Researched Case studies in power point presentation (ppt)
Tips on PhD, Pharma and deliverables
Various publications of the author, Insights into pharmaceutical industryNotes adapted through readings, cases and notes from- Harvard Business School/ Review, Ivey,
Stanford, Kellogg, MIT Sloan, LBS, Insead, Wharton, Emory; publications by Porter, Kotler, Keller, Kapferer, Nirmalya Kumar & Mckinsey; Economic Times, Indian and international
business magazines, and the internet. Garnished with my own experience, insights & knowledge.
Home What's New MBA Notes Case Study PPTs Knowledge Publications Contact Me
Objective: Help students understand the concepts of brand-development/ management/ building, and crafting the brand strategy, through interaction and cases.
Evaluation (%): Group Presentations 40%, Class Participation10%, Final Exam 50% = 100%
Course Outline: (Total 30 Hours)
Topics Pg
1 Analysing- Environment, Competition, Market opportunities, Gaps, 3
2 Product- concepts, packaging, brand hierarchy 7
3 New Product Development 9
4 Brand management - Concept, Associations, Company‘s/ Customer‘s brand decision making, Brand Personality, Keller‘s CBBE, Brand Value Chain
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5 Brand positioning strategy, Frame of reference 18
6 Brand Identity- concept, execution, Kapferer‘s Prism, Brand Identity Planning Model 23
7 Brand Architecture & portfolio management 27
8 Brand Equity- 34
9 Brand valuation 41
Cases from among (Most cases available on www.dramitrangnekar.com)
Adidas v Nike- Brand Identity Dolce & Gabbana- Fashion Brand Parle G- Brand Building
Aircel- Service Branding Dominant Brands Rolex- Luxury Branding
Amar Chitra Katha- Kid Brand Gillette- Brand Extensions Tata Nano- NPD
Amul- Umbrella Branding Horlicks v Complan- Brand Equity Titan- Brand Architecture
Audi- Brand Identity Kellogg- Brand Valuation Vodafone-Speed Branding
Bisleri- Brand Building Kellogg- Brand Failure Wipro- B2B Branding
Chanel- Branding to ladies Mont Blanc- Luxury Branding ZooZoos- Brand Campaign Chic Shampoo- Rural Brand Natural Ice Cream- Buzz Branding Kancheepuram Sari- Ethnic
References
Brand Management Notes www.dramitrangnekar.com Brands & Branding- The Economist Strategic Brand Management- Keller 3e / Kapferer 4e Marketing Management- Kotler 13e Brand Equity- Aaker, Brand Leadership- Aaker Asian Brands- Martin Roll
Websites- Mckinsey Quarterly, Harvard Business school, India knowledge @ Wharton
Notes adapted through readings, cases and notes from- Harvard Business School/ Review, Ivey,
Stanford, Kellogg, MIT Sloan, LBS, Insead, Wharton, Emory; publications by Porter, Kotler, Keller, Kapferer, Nirmalya Kumar & Mckinsey; Economic Times, Indian and international business magazines, and the internet. Garnished with my own experience, insights & knowledge.
Best Wishes
Dr Amit Rangnekar
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1 Analysing market opportunities
Strategic gap analysisIntensive Growth Strategies
Ansoff’s Product-Market Expansion Grid- Case- Maruti Suzuki
Current Products New Products
Current Markets
Market Penetration
Launch 800, grabbed market share on styling, fuel economy, affordability
Product Development
New models Van, Zen, Esteem, Wagon R, Baleno, Swift, SX4
New Markets
Market Development
Launch in class II-IV towns, easy loans, higher payback periods
Diversification
Training schools, Auto insurance, True Value cars,
Integrative growth- Vertical-Backward (Reliance- Polyesters), forward (Videocon-Next),
Horizontal- M&A (HLL-Lakme)
Diversification growth- Reliance Retail BCG Matrix- Growth Share Matrix- Case
Classifies product portfolio into categories, firms should have a healthy balance.
Dogs- Low market share & low market growth. Phase out / tweak, invest & build Question Mark/Problem Child- Low market share, operate in high market growth. Entry level, brand may
ascend / descend / stagnate- important to build.
Star- High market share, operate in growing market. High growth but high promotional cost, need
to be sustained.
Cash Cow- Mature products generate high cash, but low growth. Sustain, they generate funds for
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Marketing Plan
A marketing plan aims to help organize and implement the marketing strategy for its products or services. Part of the overall corporate objectives.
Competitive forces Barriers & profitability
Mktg Research Segmentation Targeting Positioning Differentiation Mix- 4Ps
Prod Life Cycle
Marketing
Strategy
Projections Orgl Structure Implementation Performance ReviewExecution
Control
Where are we? How do we get there? Are we getting there? Leadership Rank Geographic Share Profits GrowthMarketing
Objective
Corporation Customer Competition Conditions Opportunities DynamicsSituation
Analysis
Where do we want to go?Analysing Competition:
Industry structure Consolidated / fragmented, Monopoly/ duopoly/ oligopoly,
Market structure Leader, challenger, follower, nicher
Broad competition Generic competition Direct competition
Lines Broad / narrow
Competitor rating on critical success factors
Competitor Awareness Quality Availability Range Technology Service
A B C
Key variables in analyzing competition: What segments do they serve?
What products do they offer?
What channels do they use?
What pricing strategies have they pursued?
What management resources do they have?
What financial resources do they have?
What are their objectives?
What are their core competencies?
What alliances are they pursuing, and for what purpose?
How successful are they in the marketplace?
Share of market /voice /mind /heart?
Competition Direct Indirect Category Need fulfilled Brand Competitors Product Competitors Generic Competitors
Basic requirement Market products similar customer features, benefits & price
Compete in same class, but differ in features, benefits & price
Market different products to solve same problem, satisfy same basic need
Beverages Refreshment Coke, Pepsi Thums Up
Tea, Nimbu Pani Mineral water
Regular water Chocolates Dessert/
snack
Dairy Milk, 5Star Celebrations
Mithai, Namkeens Ice creams, Fruits
Aniseed/Saunf Candy, Sugar Films Entertainment PVR Fame Adlabs Single screen Drama theatre TV, Shopping Reading, Internet Cars Transportation Maruti, Hyundai
Tata
Small cars, Big cars, SUVs
Taxi, Auto, BEST, Local train, Walk
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2 Product
―We lead the public with new products than ask them what products they want. They don‘t know what‘s possible, but we do. So instead of doing a lot of market research, we try to create a market for a product by educating them‖ (Akio Morita, Sony)
Product- offered to satisfy a want or need. Judged on features, quality, services mix and price.
Product differentiation- Choice of form, features, performance quality, conformance quality, durability, reliability, repairability, and style. PQRSTUV
Services differentiation- Ordering ease, delivery installation, customer training, customer consulting, maintenance and repair
Convenience items purchased frequently, immediately, with minimum effort.
Capital goods last long and are purchased infrequently by consumers.
Commodities- where physical differentiation is difficult
Exercise- 3 examples of products performing at exceptional levels despite intense competition
Exercise- Select 1 convenience & 1 capital good, compare & contrast consumers value hierarchy.
Product Strategy-Coordinate product mix/lines, brands, packaging & labeling- decisions Product Levels: The Customer Value Hierarchy
To plan the market offering, a marketer must consider 5 product levels that encompass the augmentations & transformations the product ultimately undergoes. Each level adds more customer value, the 5 levels constitute a customer value hierarchy.
Product Mix - HUL Portfolio- Consumer Product-Mix Width
Product line- group of brands closely related by functions & benefits- Dell PC, Nokia mobiles Product mix- total set of brands marketed by a firm, may contain product lines
Width- product lines in the mix- HP PCs, Laptops, Printers within home & business segments HUL 11 lines (Personal wash, laundry, skin care…….)
Length- total number of items in the mix- 25, average length is 25/11 = 2
Depth- Variants of each product in the line- Lux has 4 fragrances and 2 sizes, so 8
Deciding which product lines to grow, maintain, harvest, and divest?
Product Levels
What it means Marketers Job Hotel
Customer
ITC Hotels
Core Product bought Provide benefits Place to sleep
Basic Benefits Turn benefit to product Bed, bath, closet Budget-Fortune
Expected Attributes &
conditions
Minimum buyer expectations, price, convenience, location- important (EM)
Clean bed & toilets, peace 5-Star- Welcome Aug- mented Exceed expectations
Augmented benefits become expected benefits, competitors step in- important (developed markets) Satellite TV, Tea machine, Internet Super deluxe - ITC
Potential New ways to
satisfy/differentiate
Anticipate & innovate Customised service
Welcom Heritage Palaces, forts
Home & Personal care Foods P e r so n a l w a sh L a u n d r y S k in c a r e H a ir c a r e O r a l c a r e D e o d o r a n ts C o lo u r c o sm e ti c s T e a C o ff e e F o o d s Ic e c r e a m Product line Lux Lifebuoy Liril Hamam Breeze Dove Pears Rexona Surf Excel Rin Wheel Fair & lovely Ponds Sunsilk Natural Clinic Pepso-dent Close Up Axe Rexona Lakme BB Lipton Bru Kissan Knorr Anna-purna Kwality Walls Length
Product line strategy
Upgrade customers - Maruti 800, Alto, Zen , Wagon R
Cross-sell- HP printers, PC & Laptops, Godrej- Washing machine, TV, fridge, microwave, AC
Line-stretch- popular(Titan), mass(Sonata), premium(Xylys), youth (Fastrack), ethnic (Raga)
Line fill- Maruti variants AX, LX, VX; I-Pod- nano, shuffle, classic, 80/40/20/8/4gb
Line prune- Reduce unwanted / unprofitable- Maruti Gypsy
Packaging and labeling- The 5th P, part of product strategy Packaging- 3 levels: Primary, Secondary, Shipper, Insert
Promotional value- packaging is buyer‘s 1st product encounter- can turn on or off
Functional components- protection in transportation & storage, usage, convenience, ease of use, storage, convey usage information & instructions
Aesthetic components- Design, size, shape, material, color, text, graphics- harmonizing
Labeling- Identifying product or brand, grading, describing the product, adhering to regulatory
requirements, promote through attractive graphics.
Warranties & Guarantees- Expected product performance level by manufacturer, reduces a
buyer‘s perceived risk, helps when not so well-known product‘s quality is superior to competition.
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3 New Product Development (NPD)
NPD- risky but if based on a sound foundation- market segmentation, understanding and targeting customers - reduces risk. If NPD is first and then you figure out how to market, it usually leads to disaster. Exception- Alexander Bell invented the Telephone, but it was an innovation. Today- NPD compete with similar products /effective substitutes and customers are spoilt for choice as well as bombarded by product and marketing messages.
New Products Types – Breakthrough or incrementally altered products
Breakthrough Incremental New to the world performance features
Huge advances in performance
Dramatic cost reduction
Improvement in existing product
Derivative of existing platform
Exploits existing forms / technology
Higher risk Lower risk
Infrequent More frequent
Costlier Less costly
Targets new /existing markets Targets existing/ adjacent markets
Marketer’s responsibility Envision market
Create demand
Educate market
Listen to existing market
Accommodate current demand Change the basis of industry competition:
• Electric lighting, antibiotics, microwave, credit card, transistor, heart pacemaker, hip and knee replacements, GPS
Intel‘s Pentium IV computer chip- incremental improvement over Pentium III as they share same fundamental technology
Incorporated design improvements that enhanced chip performance
Windows, MS Office, Play station
Exercise: Course of NPD in your industry over L10Y- what changed the basis of competition, what
were the real breakthroughs, which were only incremental? What are the new technologies / products lined up, how will they affect your company and competitors when launched, in terms of sales and profitability?
Identifying new product opportunities
Exercise: For an industry of your choice, identify the unexplored opportunities in every quadrant,
and identify the players who operate in each quadrant. Unexplored
New product development (NPD) Stages
Idea generation- Employees, Sales force, Trade, Competitors, Customers
Idea screening- Feasible, Workable, Practical
Concept development and testing- Feedback from target audience
Marketing strategy- Mix (4Ps), STPD, Targets, Projections, Geographies
Product development- Final touches & Mfrg
Test Marketing- Geography or Segment
Commercialisation- National / Global launch
Why new product development (NPD)
Changing customer needs – Diet Coke, Saffola
New Segment Entry- Maruti SX4
Changing market needs- Scooters to Bikes
Own successes- Brand / line extensions- Maggi
Competitive Successes- Krackjack- 50:50, Marie
New Capabilities- UB Group
New Concepts- Suzuki Swift, Tata Ace / 1L Car
New technology- I-Pod, I-Phone, TV
Product lifecycle- MS Office, Play Station 1,2,3
Portfolio / Business realignment- Reliance Mobile
Environmental changes- Music downloads
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4 Brand Management
Brand ―Promise‖ Harish Bijoor
―Strategic Asset‖ Nirmalya Kumar
“Functional, Economic & Emotional Value Propositions” –Deepak Jain
“A collection of perceptions held in the mind of the consumer” Susan Fournier
“A name, term, sign, symbol or design, or their combination, intended to identify goods &
services of a business or group of businesses and differentiate them from competitors” Kotler
“A mixture of tangible and intangible attributes symbolised in a trademark, which, if properly
managed, creates influence and generates value” Interbrand
Brand exists in our mind, as a collection of associations or feelings. Branding endows the product
with the power of a brand by creating signals that generate these associations. Blend tangible and intangible attributes to differentiate in an attractive, meaningful and compelling way that target consumers care about. Brands command premium, high margins, better availability & wide customer loyalty. Products deliver series of core benefits to consumers (Watches- time) but
consumers pay a premium for added value (lifestyle accessory) that enables a brand to differentiate itself from competition. This helps a customer choose or prefer the brand. Mercedes, Sony, Apple. US brand leaders in the 1930s- J&J, Heinz, Colgate, Disney, Coke- are leaders even today
Brand associations
The brand stays as a set of associations in the mind of the customer eg Amul may mean- Indian, butter, milk, cheese, co-operative, value, or even the ads. These associations are stored as links to the brand that include the brand, company, category, visuals, celebrity, design, usage experience, feelings. These links help the customer prefer a brand over competitors but a negative link can be disastrous for the brand. Eg Cadbury is generic in India for milk chocolates and common
associations could be dairy milk, taste, value, satisfaction, international quality etc but the negative association of the worm-controversy hurt the brand.
Creating a solid network of associations helps create a strong brand preference, where the
customer demands for a brand and also knows what to expect with the brand. If the brands delivers on expectations, brand credibility builds up which helps deter competition and brand switching. Eg
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Customer’s brand decision making (Buying a Shirt upto Rs 1000) Brands
Unknown Known
Manzoni, Pedroni, Zegna,
Louis Phillipe, Van Heusen, Arrow, Color Plus, Peter England, Dockers, Charagh Din, Oxemberg, Indian Terrain, Zodiac, Austin Reed, Allen Solly, JohnPlayer, Armani, M&S, Wills LS, Park Avenue,
Acceptable Unacceptable Indifferent Overlooked
Louis Phillipe, Van Heusen, Arrow, Austin Reed,
JohnPlayer, Cambridge, Peter England, Oxemberg Allen Solly, CD, Dockers, Indian Terrain Armani, M&S, Wills, Zodiac, Color Plus, Arrow
Purchased Not Purchased
Van Heusen Louis Phillipe, Arrow, Austin Reed, JohnPlayer
The company‘s marketing efforts are focused on pushing the brand first into the known stage and then to take it up to the purchased stage. Surrounding the consumer with the right kind of links in an associated network, created through brand experiences and marketing communication helps form thoughts, feelings, images, beliefs, perceptions, opinions, and preferences. These links form strong associations deep into the mind of the customer which drives purchase preference.
Exercise: Create a customer’s brand decision making model and a company’s brand decision making model for a company and a category, similar to the illustrations above
Brand Personality
Brand Personality (Aaker)- Consumers perceive brand‘s personality in terms of human personality traits. Like human relationships, as brands grow, emotional dimension dominates.
Consumers easily attracted to brand personality traits- dependability (LIC), trust (Tata), honesty
(Peter England), reliability (Titan), safety (Volvo), fun (Disney)
Exercise- Identify brands with personality-sincere, sophisticated, cheerful, old fashioned, progressive
Brand Personality Drivers
Product related characteristics Non Product related characteristics
Product category (Bank) User imagery (Levi's 501)
Package (Bisleri, Parle-G) Sponsorships (Rolex, Femina)
Price (Rolls Royce, Louis Vuitton, Big Bazaar) Symbol (Marlboro Country) Attributes (Kingfisher Beer) Ad style (Obsession, Absolut)
Country of origin (Audi)
Company image (The Body Shop) CEO (Vijay Mallya, Steve Jobs) Celebrity endorsers (Aircel Dhoni)
A Brand Personality Scale (BPS): The Big Five
Sincerity Raymond, Hallmark, LIC, Parle-G, Rolex
Down-To-Earth family-oriented, small-town, conventional, blue-collar
Honest sincere, real, ethical, thoughtful, caring
Wholesome original, genuine, ageless, classic, old-fashioned
Cheerful sentimental, friendly, warm, happy
Excitement Porsche, Absolut, Benetton, Virgin, Kingfisher
Daring trendy, exciting, off-beat, flashy, provocative
Spirited cool, young, lively, outgoing, adventurous
Imaginative unique, humorous, surprising, artistic, fun
Up-To-Date independent, contemporary, innovative, aggressive
Competence Titan, Fedex, Dabbawallas, IBM, Moov, Nokia
Reliable hardworking, secure, efficient, trustworthy, careful
Intelligent technical, corporate, serious
Successful leader, confident, influential
Sophistication Lexus, Mercedes, Revlon, Apple,
Upper Class glamorous, good-looking, pretentious, sophisticated
Charming feminine, smooth, sexy, gentle
Ruggedness Levi's, Marlboro, Nike, Woodland, Enfield Bullet, Tag Heuer
Outdoorsy masculine, Western, active, athletic
Tough rugged, strong, no-nonsense
Brand personality of 2 brands competing in premium vodka market for decades Both are expensive, high quality, and pure yet have different personalities
Stolichnaya as a person is experienced, self assured and successful in a traditional career- law, banking. He is male, recognizes quality, drives a Lexus, and follows the latest trends
Absolut person is younger, more contemporary and flashier. He is also male, works in a creative occupation- advertising or arts, more likely to go to trendy bars
For both, brand personality is the glue that holds together the identity and communication effort. How does Brand Behaviour speak for Brand Personality
Brand behaviour Personality traits Brand
Frequent changes- position, product forms, symbols, advertising, etc.
Flighty, schizophrenic Coke India
Frequent deals and coupons Cheap, uncultured Big Bazaar
Advertises extensively Outgoing, popular Nokia, Airtel
Strong customer service, easy-to-use, etc Approachable Maruti
Continuity of characters, packaging Familiar, comfortable Parle-G
High price, exclusive, ads in upscale print Snobbish, sophisticated Rolex
Friendly advertising, endorsers Friendly Disney
Association with cultural events Culturally aware Times of India
Brand identity- add personality, set of values, perceptions and brand aspirations… all the pieces converging. Swoosh replaces Nike brand name, Coke slanted flourish, Mont Blanc star
Brand image- Sum total of consumer perceptions, firms fit perceptions to communication- Swatch trendy, Nokia value, Titan performance, Volvo safe
Corporate identity- Visual aspects/image of firm's presence-eg logo, collaterals-Tata
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Customer Based Brand Equity Pyramid- Keller (Brand Resonance Pyramid)
Brand resonance characterized by strong brand & consumer connect, thro‘usage & experience
Strong resonant brands- increased loyalty & decreased vulnerability to competitive actions
Brand challenge- ensure right customer experiences to create right brand knowledge
Brand equity- customers develop differential towards a brand hence prefer it over others
Understanding differential critical to interpret the past, design effective future programmes
Building resonance involves a series of steps
Identity- Who are you- consumers begin to understand what a brand stands for, means
Meaning- What are you- consumers link in/tangible associations, understand PoD & PoP
Response- What about you- judge brands on credibility, expertise & trustworthiness
Relationships- What about you and me- How to connect, create intense, active loyalty
Building blocks- structure to build brands with customers
Salience- consumer‘s brand recall in a purchase situation- depth & breadth of brand awareness
Performance- What a brand does to meet customers' functional needs- intrinsic properties
Imagery- Think abstractly than physically about brand, intangibles- extrinsic brand properties
Judgments- Customer brand evaluation (performance+ imagery association)- brand opinions
Feelings- emotional brand response/ reaction (mild/intense; +/-, or experiential / enduring)
Experiential feelings (warmth, fun and excitement)- immediate & short-lived
Enduring feelings (sense of security, social approval, self-respect), private, of day-to-day life
Resonance- Intense, active loyalty- customers feel a connect to brand, will miss it if it went away Nature of relationship, extent to which customers feel they are ―in sync‖ with a brand
Behavioural loyalty- repeat purchase rates
Attitudinal attachment- intensity or depth of psychological bond customers have with a brand
Active engagement- level of activity engendered by this loyalty
Brand Value Chain (Kevin Keller)
Helps assess financial return of developing the brand through 4 stages. Some relationships have not yet been directly measured, but are important to consider when valuing a brand.
The value stages lead to shareholder value driven by multipliers, or filters, between the stages
Multipliers are factors that influence impact of one stage on the subsequent stage.
Marketing program investment in product, employees, advertising affect future brand value
Program quality- ad distinctiveness, service consistency determine how much the first stage influences the second stage
Customer mindset, includes 5 A‘s, hierarchical in nature- awareness supports consumers‘ brand associations, which drive attitudes, which lead to attachment & ultimately activity
Market condition multipliers translate the 5 A‘s to brand value
Market performance measures brand performance in the marketplace through price premium and elasticity, market share demonstrates brand‘s ability to drive sales, expansion success is brand‘s opportunity to increase revenue streams & lower costs- all lead to brand profitability
These lead to shareholder value, driven by investor sentiment based on market forces like growth potential & risk profile which can affect the evaluation.
Shareholder value is attained through stock price, PE ratios & market capitalization
Together, these stages allow brand value evaluation & suggest areas of improvements
Brand knowledge
Brand knowledge creates a differential that drives brand equity. If customers carry strong, unique, favourable brand associations in mind, strong brand is built due to high brand awareness & +ve brand image. This convinces a customer of meaningful and valuable difference in one brand and compels him to prefer it over others.
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Cognitive brand dimensions
Dimension Meaning Company / brand
Brand weight Brand dominance in a market Microsoft, J&J baby, Dettol
Brand length Brand ability to diversify across categories Disney, Virgin, Tata
Brand power Loyalty of the customer group Apple, Harley Davidson, Old
Monk
Brand breadth Brand appeal across customer groups Coke, Parle G, Amul Butter 4Cs to create positioning
Company Customer
What to offer and communicate To whom
Channel Competitor
5 Brand Positioning
Brand Positioning- Design firm‘s offering & image to occupy distinct place in target customer‘s mind Represent a distinctive big idea in the mind of the target market
Identify different needs & groups in the market (segments)
Target groups/markets it can satisfy in a superior way (targeting)
Locate brand in the minds of consumers (positioning)
Communicate (promotion) a value proposition to the target market that is distinctive, valuable & meaningful (differentiation)
Brand Ladder (How does a
brand get into customer‘s mind)
Promise- Value proposition offered to customers, choice
Affinity- Interest in the brand, differentials evident
Brand Bonding- Perceived as delivering on promise
Loyalty- +ve differential effect driving customer brand preference over identical competitive brands, willing to pay more /wait/ go places if unavailable
Brand Equity- Brands financial value to the firm, includes sum total of factors besides sales. From a customer‘s perspective, the reason why he chooses that brand over competition
Promotional strategies revolve across various brand purchase stages
Crafting the brand positioning
Positioning requires determining a competitive frame of reference. The frame defines associations that consumers use to evaluate directly and/or broadly competing brands, as under:
1. Identifying the target market(which brand for which market)
2. Understanding consumer behavior and their considerations in choosing brands- price points, culture, buying patterns, attitudes, preferences.
3. Nature of competition (direct, indirect, PLC stage, intense, consolidated, fragmented)
4. Points-of-parity (pop) associations- which consumers view as essential to be a credible offering in a certain product category. Shared values between brand & competitors, common
denominators defining the category. They represent necessary conditions but not necessarily
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5. Points-of-difference (pod) brand associations- attributes/benefits consumers associate with a brand, positively evaluate & believe they cannot find to the same extent with other brand. 6. Reason to Believe (RTB)- Why should a customer buy your brand- company consistency,
credibility, heritage, innovation legacy, country of origin etc
Choosing POPs and PODs
POP driven by category membership needs, to achieve an attribute or benefit POP, consumers must believe brand is ―good‖ on that dimension, key is perception of clear superiority.
Category POP change over time due to technology, legal, trends. Eg HTC v IPhone.
Competitive POP- to negate competitors POP. HTC‘s features similar to IPhone helps position it as an IPhone competitor at a much lower price, which otherwise was difficult to command.
Creating strong, favorable & unique POD associations essential to competitive positioning. Apple innovation, Parle- G value, Tatas- trust, Maruti- Service, Dabbawallas- reliability.
POD should be desirable & relevant to consumers, which firm should be capable of delivering, communicating and sustaining. Marketers should decide level(s) to anchor the brand‘s POD- lowest - brand attributes, Mid- brand
benefits, Top- brand values. Creating POPs and PODs
The mental map shows Nike‘s range of brand specific and category specific associations,
Nike- PoD are MJ, Air & Basketball
Adidas- PoD is Top athletes
Reebok- PoD is Tennis
All other associations are category PoPs
Exercise- How Should Maruti position itself with respect to the Tata Nano? Exercise- POPs & PODs for Apple i-Phone, Rs 5000 mobile phone Executing the brand positioning
Brand identity- how company aims to identify or position brand. Built through logo, jingle, ads, celebrities, product trial, exposure etc.
Label- post identity, brand remains a label in customers mind. Customer may not associate anything with the brand, nor be inclined to purchase it, yet may identify it, remember the ad, logo, celebrity, pack.
perceives the brand. What customer associates with the brand. Perception turns to position over time. Built by exposure to communications, word of mouth, product usage and experience, etc
Brand congruence- Intended positioning (identity) should be congruent (match) with what exists in the ‗consumer‘s mind‘ (image)
Brand credibility- how well brand delivers on its promise Moov- Backaches, Nokia- Performance, Titan- value
Brand Position- Distinct place or a deeper perception in the customer‘s mind, achieved by exposure, association, usage, credibility.
Positioning = combining internal (brand identity+ image) + outward brand expressions (guarantees, service, performance & packaging). The part of the brand identity and value proposition (central benefit) to be actively communicated to the target audience
Positions that firms successfully have claimed in India Beauty- Lux
Premium-Bose, Benz
Thanda- Coke
World scale- Reliance
Generic-Cadbury/ Xerox/ Amul Butter
Delivery-Domino‘s/ Blue Dart
Service- Private Banks, Maruti
Fast food- Udipi, VadaPav, Sandwich
Range- Vijay Sales, Alfa, Nokia
Youth- Pepsi, Swatch
Fever- Crocin
Innovation- Sony, Casio
Macho- Enfield Bullet
Performance- Nokia, Bata, Titan
Friendly salesmen-Eureka Forbes
Reach-HLL, Glaxo,Colgate
Kids-McDonalds, Esselworld, J&J
Indian MNC-Ranbaxy, Infosys, Wipro
Economy- Big Bazaar
Value-Dollar Shops, Factory outlets
Tourism-Goa, Kerala, Rajasthan
Headache-Saridon/Anacin
Perceptual Map Watches
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Cars
P&G Positioning: distinct positions, even in same segments (Aaker & Joakimsthaler)
Brand Segment Position
Head & Shoulders Shampoos Anti-Dandruff
Pert Plus Shampoos Conditioner + shampoo
Pantene Shampoos Healthy + shiny hair
Ariel Detergent High Tech Detergent
Tide Detergent Tough cleaning
Cheer Detergent All-temperature cleaning
Bold Detergent Fabric softener
Dash Detergent Concentrated powder
Whisper Sanitary Products Hygienic protection
Vicks Cold Clears blocked nose
Old Spice After Shave Manliness
Crest Toothpaste Cavities
HUL- Axe and Rexona, both marketed by HUL, operate in the same segments- deodorants.
Rexona is positioned against body odour targeting the working population, while Axe is positioned on seduction targeting the youth. Both use completely different communication strategies, although they target the same broad segment.
Premium stige Popular Conser vative Sporty / Hi Tech Swift M Benz City Audi Corolla Jaguar Ritz i10 I20 Indica Ferrari Nano BMW
Positioning the company
Customers Who, Demographics, Psychographics, How do I reach them
Where are my customers Geographies, Segments Social / economic status Touch points, Media habits
How do customers find me Media, Promotion (SPPASMDT, WoM), Internet
How customers perceive value Performance, VFM, 4Ps, technology, service, design, delivery How do we best deliver value Brick, click, brick and click, click & brick, mail order, catalogue
Competition Direct, indirect, generic
Benefits for customers of competitive brands
What needs do they serve, serve better than us, do not serve better
How am I positioned Unique, not unique, competitive advantage
Product Differentiation
Add a set of valuable, meaningful and compelling differences to distinguish your offering from that of the competition. Customers buy based on their perception of quality, value, price, performance,
usage experience parameters, which should ideally be differentiated on. Brands differentiate on features/benefits irrelevant to customers. Most mobile phones features may hardly be used, newer management text book editions- bigger & costlier, not necessarily better
Competitive advantage through differentiation, across 5 dimensions:
Product (form, features, performance quality, conformance quality, durability, reliability, reparability, style, design)
Services (order ease, delivery, installations, customer training, customer consulting, maintenance and repair, miscellaneous services)
Personnel - better-trained people, 6 characteristics: Competence, Courtesy, Credibility, Reliability, Responsiveness & Communication.
Channel - coverage, expertise, and performance.
Image - Buyers respond differently to company & brand images, identity & image to be distinguished
Sustaining brands
What sustains What erodes
Competitive advantage in its product differentiation dimensions (product, services, personnel, channel & symbols) sustains a brand
Consumer needs and wants met by brands, change, evolve, or die, leading to loss of brand POD or lack of POP with other brands
Continuously monitoring environmental changes, customer preferences, strategies, and technology, equip brand with POD/POP
Complacency, change in technology, lack of new products, not responding to competitive and environmental threats and strategies, can spell doom
Exercise- i-phone
Key success factor? Brand positioning, innovation, Pop, Pod, brand image
Where is iphone vulnerable? Economical competitors, imitators, higher technology.
What should it watch out for? Changing preferences, value, new trends
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6 Brand Identity
―A unique set of brand associations that the brand strategist aspires to create or maintain. These associations represent what the brand stands for and imply a promise to customers from the organisation.‖ Aaker
To be effective, a brand identity needs to resonate with customers, differentiate the brand from competitors, and represent what the organization can and will do over time.
What does a brand stand for? How does it create a relationship with its customers? What is its value proposition? Differential? Brand‘s uniqueness‘?
Brand identity- what a brand wants to convey to its customer - meaning, self image
Brand Image- how a customer perceives the brand, through signals emanating from the brand‘s communications and usage experience
Brand Essence- A brand’s fundamental nature or quality.
The one constant across product categories and throughout the world.
Adidas: Athletic Performance, Tata: Trust, Volvo: Safety, Disney: Fun Brand credibility- delivering on your promise builds brand credibility
Trade Dress- aesthetic elements that provide legal protection for a brand‘s identity
Coke bottle shape, Colgate Red & White Design, Harley-Davidson’s engine sound Brand Promise- What a brand can and must do for customers
Must promise differentiated benefits, relevant & compelling to the consumer
Benefits that are functional, experiential, emotional & self-expressive
Support brand promises with compelling proof points (‘reasons to believe’)
Address key consumer needs, manifest in organization‘s products and services
Leverage organization‘s strengths, competitive advantage through differentiation
Drive organizational decision, system, action, and process, inspire & energize
Components of a brand’s identity:
Names, logotypes, symbols & graphic devices- Mercedes tristar, Nike swoosh
Distinctive shapes and colors- Colgate red
Brand voice and visual style, sounds, jingles and other mnemonic devices
Typography, theme lines or slogans- Nike Just do it
Characters uniquely associated with a brand- Coke- Slanting flourish
Textures, scents, flavors, and other sensory elements
Choosing Brand Elements
Brand elements are devices that identify and differentiate the brand, build brand equity
The brand-building ability of these elements is ‗what consumers would think or feel about the product if they only knew about the brand element‘
Memorable, meaningful and likeable can be characterized as ―brand building‖ in terms of how brand equity can be built through the judicious choice of a brand element.
Transferable, adaptable and protectable are more ―defensive‖ and concerned with how the brand equity contained in a brand element can be leveraged & preserved in the face of different opportunities and constraints.
www.dramitrangnekar.com 25 [email protected] Developing Brand Elements
Companies use marketing research firms to develop and test names.
Name-research procedures include: Association, Learning, Memory & Preference tests.
Brand-building roles- easily recognized, recalled, inherently descriptive, persuasive
Memorable or meaningful brand elements reduce burden on marketing communications to build awareness and link brand associations
Associations arising from likeability & appeal of brand elements enhance brand equity
Slogans- build brand equity, help consumers grasp what brand is, what makes it special
Kapferer’s Brand Identity Prism (1997) How 6 personality &
physical facets define brand identity
Helps marketers gauge brand identity, provide answers to questions like- If the brand was a person, how would he look? What traits would he have? Warm, cold, aggressive, approachable or smart?
Knowing identity helps design strategy, positioning & affects marketing
collaterals
Physical facet, brand relationship and customer reflection are externalization factors, rest represent internalization
Physique Core, central purpose, foundation
What is the product, what does it do, how does it add value, fill gaps
Titan and Nokia performance, Head & Shoulders dandruff
Personality Soul, what the brand would be if it were a person, personality traits
Disney fun, Woodland rugged, Raymond well-groomed man
Reflection External mirror, how target identifies himself wrt brand
Brand reflects customers‘ image outward, image of buyer using brand
Lux- beauty, Pepsi young, Thums up adventurous
Consumer mentalisation
Internal mirror, consumers attracted to brands where they see own traits
Self image, how the targeted identifies brand wrt self, inner relationship
Nike- athletic, sporty, Enfield Bullet- armed forces
Relationship Intangible brand and consumer connect, exchanges, experiences
How should brand be seen by customers in marketing communication?
Nokia reliable friend
Culture Culture spawns brand values and principles which bind customers
Strong dimension, differential, internalises in customer‘s conscience
www.dramitrangnekar.com 26 [email protected] Case- Brand identity of Adidas & Nike
Nike Adidas
Promo strategy focus on individual athletes Sponsors teams & global events
External Physique Sports & fitness Sports & fitness
Relationship Sponsorship, ethics Quality & heritage
Reflection Aggressive, provocative, in-your- face
Sportsmanship, team player, strong work ethic
Internal Personality Michael Jordan, Tiger Woods Traditional, conservative, collective
Culture American, Just Do It European, traditional
Self-Image Cool, trendy Competitor, competent
Key differences between the two companies are at the cultural and the self-image level.
Adidas stands for European culture, traditional, conservative, collective & competent
Nike symbolises American way: individual & aggressive- Michael Jordan, McEnroe
Adidas connected to positive emotions, more to competing than to winning
Adidas- challenging oneself is exciting; winning is reward, not reason for playing well
Adidas personality reflects true sportsmanship, good team player & strong work ethic.
Nike has a cool attitude, You don‘t win silver, you lose gold, winning is paramount
Executing the Brand Identity- Combine visual, auditory & other sensory components
that create recognition, brand promise, communication synergy & help differentiation.
Starts from positioning & values and is executed through the marketing mix (4Ps)
Product- consumers‘ brand experiences should meet/surpass expectations
Pricing- perception of value, equate with quality
Place- availability and visibility
Promotion- integrated marketing communication (IMC) to drive home the message
Brand Identity planning model (DAVID AAKER)
To understand, develop, and apply the brand identity concept. Introduces 2 strategic brand components- strategic brand analysis and brand identity implementation system.
Reflection: Aggressive, provocative, in-your-face Se lf-Image: Cool, I am an ‖Athlete ‖ Re lationshi p: Sponsorship, ethi cs Personal ity: Like Jordan, Woods… Physique: Sports and fitness Culture: American, Just do It! Picture of Sender Picture of Recipient E xt er n a liz at io n Inte rn a li z at io n Nike Reflection: true sportsman-ship, A good team player, strong work
ethic
Se lf-Image: Rel ates more to competing t han t o winning Re lationshi p: Quali ty and heritage Personal ity: Tradi tional ,
conserva-ti ve, collecconserva-tive Physique: Sports and fitness Culture: European, Traditional Picture of Sender E xt er n a liz at io n Inte rn a li z at io n Picture of Recipient Adidas
www.dramitrangnekar.com 27 [email protected] Strategic brand analysis-Helps firm understand self, brand, customers & competition Customer analysis- unbiased customer opinions, firm experience and market situation Competitor analysis- current and potential competitor communication strategies Brand analysis- how brand can be differentiated meaningfully
Self-analysis- SWOT + R&C, will to deliver
Brand Identity system 12 brand identity element categories organized around 4 perspectives -brand associations in all 12 categories- hard Brand identity structure includes an essence, a core identity and extended identity Brand essence- glue to hold core identity elements together, drives value proposition
Core identity should reflect firm
value and strategy, brand differentiation and resonate with customers
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7 Brand Architecture
An organizing structure, family tree or hierarchy of the brand portfolio that specifies brand roles and the nature of relationships between brands and sub brands (Aaker & Joakimsthaler)
Brand architecture is like a soccer team with the football pitch as the market map, and each football player as a brand playing a major, minor or support role. Hence individual players/brands will benefit from identity and communication programs
The ideal portfolio Typical market/brand portfolio
Source: Designing brand architecture (Davidson, 2002, portfolio managing matters. Brand Strategy pp 28-29)
Objectives of brand architecture are- creating effective & powerful brands, allocate
brand building resources, create synergy, clarity of product offering, leverage brand equity, and provide platform for future growth.
Brand portfolio- all brands, subbrands, cobrands; add /extend/ delete brands Portfolio roles of each brand-
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Linchpin Role- brand provides key basis for customer loyalty. First Citizen Club for
Shoppers Stop, J&J baby range
Silver Bullet- brand positively influences image of another brand- IBM Thinkpad boosted public perceptions of IBM, Nano of Tata Motors
Cash Cow- significant customer base may not require high level of investment but generates funds to be invested in strategic, linchpin, silver-bullet brands. Parle G, Nivea Creme
Design Your Portfolio Graphics
Visual representations across portfolio of brands- logos, packaging, symbols, product design, layout of print ads, taglines- look and feel of each brand presentation
Do visual representations send right signals of relationships between brands in portfolio?
Exercise: put all graphic representations of brand portfolio (logos, packs,
mascots) on paper. Do they convey consistent message and support brand portfolio’s structure
Develop Brand Portfolio Structure
Brand portfolio structure is a way of grouping brands to clarify logical relationships
Brand hierarchy tree for Indian Hotels- Taj Hotels, hallmark of luxury and service
But Taj tag was on every group hotel, guests were confused what brand Taj stood for? Differentiated by quality & service standards , hive off hotels not fitting architecture
Exercise- clarify relationships among brands by drawing a ―brand family tree‖. Specify the Product-Market context of each brand
Endorser brands- Brand endorsed by parent or corporate brand where parent brand is identified with the brand, but, endorsed brand is given greater visual weight than parent brand. The corporate/parent brand lends credibility or assurance to endorsed
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brand without overpowering it with its own associations. Cadbury’s Dairy Milk /
Five Star. Xylys, Swiss Made- Brought to you by Titan
Subbrand- A new brand combined with a product or corporate brand. The subbrand can make the parent brand more vital and relevant to a new consumer segment or within a new product category. Ford Ikon- Flair, Hyundai Getz- Prime, Gillette
Sensor Excel
Benefit brands- branded features, components, or services that augment the brand offering- Maruti Ritz with Kappa engine
Cobrands- combine your brand with brand/s from another firm to create a unique
offering- Citibank-Jet Platinum credit cards or highlight an ingredient of another
firm in your brand communication- HP laptops with MS Office or Intel inside,
Dolby system in Multiplexes, Teflon coating in Pans, Carl Zeiss in mobile cameras
Titan Brand Architecture
House of Brands or Branded House
Branded House House of brands
Master brand strategy Product brand strategy
1 master brand across categories New brands /extensions / sub brands
Harvard (HBR, HBS, Medical/Law), Nike Maruti (800, Alto, SX4, Swift), P&G
Master brand does not connect in all markets (Nike Laptops, Harvard Entertainment)
Easier for different brands to connect to different / adjacent markets
Low branding costs/synergy- 1brand leveraged Costlier- separate branding costs
www.dramitrangnekar.com 31 [email protected] Brand architecture types: Common branding systems are
Brand Type Example Strategic Rationale
Cor p or at e Dom in an t Corporate brand Heinz GE Sony, Tata, Reliance, HP
Bear company name
Highest in brand hierarchy
Harnesses strong corporate image synonymous with product class CD common, FMCG rare, tech popular
Master brand
BMW Mont Blanc Nokia
Dominant, highest level in hierarchy
Typically, only brand in the system
Corporate brands were master brands
Licensed brand
Calvin Klein, Disney
Tommy Hilfiger
Name licensed out- fashion industry- clothes, leather, eyewear, accessories
Parent brand
Godrej, Videocon
Brand extended to multiple categories
May resemble corporate brand
Economical NPL, trust/assurance, marketing economies M ixed B ran d s House brand (family
brand) Tata, Amul
Diversified firms leverage corporate brand association across segments/ categories
if 2 product lines are incompatible (Titan & Sonata premium & economy)
Dual brands (family / endorser brands) Cadbury- 5 Star Gillette- Mach3 Ford-Ikon Tata Indica
Combine corporate + strong subbrand
Subbrands help differentiate, drive brand preference
Umbrella for a family of products extensions Co-brands (ingredient brands) Intel inside Teflon coated Dolby system
Raise perceived quality & familiarity of both brands
Brand exposure in absent product class
B ran d Dom in an t Product/Mono brands (single brands) Rexona, Crocin Nivea, Axe
Strong brand identity, need focused
Corporate brand insignificant, FMCG
Expensive and risky but profitable
Shelf space/market share/extensions
Sub Brand Ford Ikon- Flair, Hyundai Getz- Prime,
Gillette Sensor Excel
New brand + parent/corporate brand in brand identity system
Subbrand draws on parent brand to target new segment or category
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Brand Portfolio Strategies
Brand Portfolio- Set of all brands/lines a firm offers to buyers in a particular category. Multiple brands increase shelf presence, attract variety seeking consumers, help new
market entry & yield economies of scale in advertising, sales & distribution
Portfolio maximises brand equity & market coverage, minimises brand overlap
Differentiation appeals to a sizeable segment & justify marketing and production costs
Critical- Portfolio monitoring & pruning of weak and unprofitable brands
Maruti- 800, Alto, A-Star, Estilo, Wagon-R, Ritz, Swift, Desire, etc & their variants Product Branding
Separate brand, own identity, image & set of associations, company not prominent
Paras- Moov, DCold, Livon, Dermicool, Freshia,
CavinKare- Chic shampoo, Spinx perfumes, Meera Herbal, Nyle Shampoo HUL- Rexona, Axe, Close Up, Taj Tea, Lipton Tea, Surf, Wheel
Line Branding
Brand successful in a category for a targeted consumer group, is extended to other product lines in the category/ adjacent categories, but catering to same group‘s needs.
Product lines cater to different needs, cosmetics- lipstick, nail polish, moisturizers, beverages- flavours, ketchups/ mineral water/ biscuits- pack sizes, cars- variants.
Identity of the main brand is leveraged across other extensions
Line branding restricted to adjacent territories & complementary products.
Gillette razors and cartridges- Vector, Sensor, Mach 3, Turbo; shaving gels, deos, L’Oreal- cosmetics, beauty, shampoos, skin, salons
Amar Chitra Katha- comics (print), mobile, TV, Cinema, online Range Branding
Built on common association, competence or promise of the main brand or firm
Brand‘s common position/ association spread across related and unrelated categories
Kingfisher symbolizes ‗the good times‘, hence extended across Beer, airlines and
soccer. Godrej stands for a century of trust and reliability, extended across FMCG, CD, property, furniture and security systems.
Umbrella Branding
One brand for all products/categories, drawing on the strength of the master brand
Safer, cheaper than building new brand, association should strategically fit categories
Samsung- TV, fridge, washing machines, mobiles, hard disk, monitors, laptops Virgin- Airlines, Cola, Music, Moon travel, mobile, entertainment
Source/Double Branding
Corporate + new brand (combination of umbrella & product branding strategy)
Equal prominence in communication and branding for both brands
Brand benefits from corporate brand‘s image or adds subtracts to/ from it.
www.dramitrangnekar.com 33 [email protected] Johnnie Walker Scotch Whisky– Red label, Green label, Black label & Blue label Endorsement Branding
Similar to source branding, but product brand more significant than corporate brand
Corporate brand conveys basic associations, augmented by the product brand
Cadbury’s precedes Dairy Milk, 5 Star, Fruit & Nut, Celebrations, Temptations Polo by Ralph Lauren, Armani- Signature, Collezioni, Exchange, Junior
Brand Extension
Extend existing brand to new products, services, or consumer segments
Existing brand + new brand, new brand is called subbrand
If executed well, brand extensions broaden and clarify brand meaning, if not, dilute or confuse brand meaning. Kingfisher (Beer to Airlines) and Amul (Milk & Foods).
Devising the Branding Strategy
NPL 3 choices: Develop new brand elements for new product, apply some of its existing brand elements, use a combination of new and existing brand elements
Brand extension- use an established brand to introduce a new product-Gillete Sensor
Sub-brand- new brand combines with an existing brand- Gillete Sensor Excel
Parent brand- the existing brand which gives birth to a brand extension- Gillette
Family brand- Parent brand already associated with multiple products through brand extensions. Cadbury
Brand extensions can be broadly classified into two general categories:
1) Line extension- parent brand used to brand a new product, target new market segment within a product category currently served by parent brand – Maggi Noodle SKUs 2) Category extension- when parent brand is used to enter a different product category
from that currently served by the parent brand- Kingfisher Beer to Airlines
3) Brand line- All products- original, line & category extensions, sold under a particular brand- Godrej, Videocon, Heinz
4) Brand mix (brand assortment) - all brand lines of a firm available to buyers – HUL-
Close-up, Pepsodent B ran d n ame Product category Old New
Old Line extension-(New SKU, flavours-
Mirinda lemon, Rasna mango, Pepsi 1.5L)
Category extension- (Titan
Raga, Junior Horlicks)
New Sub brand- (Gillette Sensor Excel, Ford
Ikon Flair, Kellogg Frosties K)
New brand- (Maruti Ritz,
www.dramitrangnekar.com 34 [email protected] Brands roles in a brand portfolio:
Flankers- Flanker (―fighter‖) brands positioned wrt competitors‘ brands so that more important (and profitable) flagship brands can retain their desired positioning
May cannibalise own brands or reflect poorly on other brands in the portfolio
Celeron and Intel, Toyota & Lexus, I Pod range- nano, shuffle etc
Cash Cows- retain brands retained as they hold on to a sufficient number of customers & maintain their profitability with virtually no marketing support. Parle G
Low-End Entry-Level- a relatively low-price brand in the portfolio to attract customers to the franchise. Gucci accessories, Sony Vaio entry level, Armani Jeans
High-End Prestige- Role of a relatively high-priced brand in the brand family often to add prestige and credibility to the portfolio. Armani Signature, Mont Blanc Pens
Brand portfolio assessment matrix
Competitive position
Strong Medium Weak
M a rket At tra ct iv eness
High Maximise dominance Challenge leader, build on strengths
Niche, acquire, flank, exit
Medium Challenge leader, build on strengths
Manage for cash flow, flank
Milk and specialise
Low Cash generator Milk, consider exit Divest
Line Extensions advantages Line Extensions disadvantages Drive growth and add sales
Consumers familiar with parent brand
Strong brand identity, preferred
Extensions gain retailer acceptance
Economies of scale in marketing mix
Cater to new markets/users
Reduce cost & period of NPD
Companies lose focus
Consumers become confused
Proliferation, parent brand loses identity
Erodes brand equity for parent brand
Brand extension failure may impact parent
May cannibalise parent brand
Opportunity loss of building new brand Brand Extensions
Advantages Disadvantages
Leverage assets Dilute brand strength, confuse
New product acceptance, safer, economical Line extensions weaken brand associations Brand name / trademark issues avoided Extension cannibalises, failure harms brand Renew brand interest, future NPL base Time to create unique image and equity Expand market / segment coverage Lack of ‗fit‘ in the consumer‘s mind
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Brand Equity
The differential effect that brand knowledge has on consumer response to the marketing of that brand
Added value endowed to products and services, the marketing effects uniquely attributable to a brand
Brand assets linked to a brand‘s name & symbol that add to a product or service
An important intangible asset to the firm, with a psychological and financial value
Customer’s viewpoint- Brand equity is the differential in a customer‘s mind that makes him prefer one brand over another
Firm’s viewpoint- Brand equity is value of the brand to the firm in monetary terms
This asset can be created and analysed trough the four dimensions, brand awareness, perceived quality, brand associations, and brand loyalty.
Brand awareness- the base that affects consumer perception and even taste, people like the familiar and ascribe good attitudes to familiar items
Perceived quality- how the customer perceive the brands quality status
A brand association, as it influences associations in many contexts and also because it is empirically shown to affect profitability as measured by ROI and stock return
Brand associations- anything that connects the customer to the brand
Includes user imaginary, product attribute, use situations, organizational associations, brand associations, and symbols
Brand loyalty- key to brand value, strengthen size & intensity of each loyalty segment
Factors to influence Brand Equity
Brand Equity Brand Awareness Perceived quality Brand Associations Brand Loyalty
www.dramitrangnekar.com 36 [email protected] How Brand Equity Generates Value (Aaker)
Source: Managing Brand Equity: David Aaker1991 Building Brand Equity
The marketer‘s challenge in building a strong brand is to ensure customers have the right type of experiences with products and services and their marketing programs create the desired brand knowledge structures for the brand.
Customer knowledge drives the differences that manifest themselves in brand equity
Value may be reflected in how consumers, think, feel, and act wrt the brand as well as the prices, market share, and profitability that the brand commands for the firm
