Chapter 11

Designing and Implementing Brand Strategies

Designing and Implementing Brand Strategies…defines brand boundaries and brand complexity…defines the relationship between the brand and

the products Two strategic tools help formulate branding

strategy that1. Brand architecture / strategies

(a) Brand-product matrix and (b) Breadth of branding strategy(c) Depth of branding strategy

2. Brand hierarchy

Brand Architecture / Brand Strategy Objective of Brand strategy is to understand

and organize Firm’s products in consumer’s mind

Its role is to -1. Clarify – Brand Awareness – improve consumer

understanding and communicate similarities and differences between individual products

2. Motivate – Brand Image – to improve trial and repeat purchases by maximizing transfer of brand equity to / from the brand to individual products

Brand Architecture / Brand StrategyFrequently adopted brand strategies are

broadly 2 Branded house – umbrella branding

(corporate /family branding) House of brands – collection of individual

brands

Brand-Product Matrix

Must define the Brand-Product Relationships. . . ROWS – all Brands of the Firm,

Brand-product relationship (brand lines) COLUMNS – all Products of the Firm

Product –brand relationship (prortfolio strategy)

1 2 3 4

A

B

C

Products

Brands

Designing and Implementing Brand Strategies 1. (a) Brand-product matrix – graphical

representation of all products sold by the firm Brand line – particular brand name under which

products are sold Brand line is one row of the matrix (brand extensions) Brand line may be composed of either a single brand

or a family brand that has been line extended – Nestle, Maggie

Brand mix – all brand lines that a firm sells

Designing and Implementing Brand Strategies 2 strategic tools1. (a) Brand-product matrix – graphical

representation of all products sold by the firm Product lines - group of products within a

category, that are closely related because they function in a similar manner, are sold to the same customer group, marketed through the same type of outlets and fall within the same price range

Product mix – all product lines and items that a firm sells

Designing and Implementing Brand Strategies 2 strategic tools - Brand-product matrix Brand Portfolio – consist of all brands and

brand lines that the Firm offers for sale (occupies the columns of matrix)

Brand portfolio strategy is judged on – Its ability to collectively maximize BE, and Not decrease the equity of other brands

Designing and Implementing Brand Strategies 2 strategic tools –

(b) Branding strategy – reflects the number and nature of different products linked to the brand and sold by the firm

It is characterized by - product brand relationships, and extension strategy Breadth - product mix and Depth - number of brands in a product category

Strategic decisions about breadth and depth of Product mix are - How many product lines should the company carry? How many variants should be offered in each product line?

–

Designing and Implementing Brand StrategiesBranding Strategy – Breadth of product mix – considers

product attractiveness on the basis of - 3 factors that affect category attractiveness

1. Aggregate market factors – attractiveness of market - large, fast growing, growth stage of its product lifecycle, non cyclical, non seasonal, yields high profit margins

2. Category factors – structural factors affecting the category – low threat of new entrants, bargaining power of suppliers, and trade, current category rivalry, few product substitutes, market operating at near capacity

3. Environmental factors – technological, economic, regulatory, social factors that affect the category

1. Also consider1. Firm’s capabilities and abilities, strategic objectives and goals2. Name chosen for these products - depends on branding

strategy

Designing and Implementing Brand Strategies Branding Strategy – Depth of a Branding Strategy – number and

nature of different brands marketed in a product class -

Multiple brands strategy - in the same category are used for

Market coverage – targeting multiple market segments (different price, distribution, geographic boundaries etc.) P&G

Designing and Implementing Brand StrategiesDepth of Branding strategy –

Optimal brand portfolio is a trade off between market coverage, costs and profitability

A brand should be clearly differentiated, and appealing to a sizeable enough market segment to justify its production and marketing costs

Distinct positioning and segmentation for each brand must

maximize market coverage (no customers are ignored) but minimize brand overlap

Portfolio is too big if the profits can be increased by dropping a brand

Designing and Implementing Brand StrategiesBranding Strategy – Determining Depth of product mix – Optimal product line is based on –

Ability to address consumer needs by each item in the product line

Ability to withstand competition Percentage of sales and profits contributed If line is too long if profits can be added by dropping

an item, or too short if it can be done by adding an item

Branding perspective – longer product lines may decrease consistency of brand image if the same brand is used

Branding strategy must determine which brand elements should be used for which products

Designing and Implementing Brand StrategiesDepth of Branding strategy - Portfolio Roles - brands play as part in the

portfolio1. Flanker brands - protect a flagship brand2. Cash cow - milked for profits3. Entry level product - attracts new customers to the

brand franchise4. High end prestige product - adds prestige and

credibility for the entire portfolio

Designing and Implementing Brand StrategiesPortfolio Roles –

Flankers – (fighter brand) discount brands introduced to compete with store brands

It creates strong POPs so that more important brands can retain their desired positioning

Flanker brands should not be too attractive and take away the sales of their higher priced brands

They should not be connected to the better brands as they will reflect poorly on these other brands


Cash Cow – some brands are retained (despite dwindling sales) as they continue to generate sales with virtually no marketing support

The existing brand equity is milked – Gillette's Trac II, Atra, Sensor


Low end Entry Level brand and High end Prestige brands

End points of the line extensions play an important role

Relatively low-priced brand in the brand portfolio is to attract customers to the brand franchise

Retailers use these as traffic builders with a view to ‘trade up’ customers

Relatively high priced brand in the brand family is to add prestige and credibility to the entire portfolio even if it is not the most profitable

Designing and Implementing Brand StrategiesOther roles brands play -1. Attract a segment currently not covered2. Attract customers seeking variety who may otherwise

have switched to another brand3. Increase shelf presence and retail dependence in the

store4. Yield economies of scale in advtg., sales,

merchandising, distribution5. Increase internal competition within the firm

Designing and Implementing Brand StrategiesDepth of a Branding Strategy – Summary

Different roles that brands play in the brand portfolio are based on considerations related to the consumer, competition, and the company

Expand market coverage Provide protection Extend an image And fulfill other roles

Portfolio decisions basic criteria - Each brand name product must have

1. A well defined Portfolio role for brands2. A well defined Positioning as to what benefits it offers

customers encapsulated in the associations - Maximize coverage, minimize overlap, optimize portfolio

Designing and Implementing Brand Strategies 2. Brand hierarchy – graphically displays the

branding strategy The number and nature of common and distinctive

brand elements across the firm’s products It reveals the explicit ordering of brand elements

Captures the relationship between the different products Represents how different products are nested with other

products of different brand elements at lower levels It graphically portrays the firm’s branding strategy (brand trees) Typically there are more entries at each successive level of the

hierarchy

Brand Hierarchy LevelsThe Jean Noel Kapferer Model A brand hierarchy can involve multiple

levels:Corporate Brand

Family Brand

Individual Brand

Individual Item or Model (Modifier)

(Range brand / umbrella brand)

Designing and Implementing Brand Strategies There are 2 strategic tools2. Brand hierarchy – Corporate or company brand -

For legal reasons present on label and packaging Used differently for strategic reasons -

As the only brand - Sony Combine the family brand name (individual brand) with

the corporate name (Sony Bravia) It might be virtually invisible and receives no attention

in the marketing program

Designing and Implementing Brand Strategies There are 2 strategic tools 2. Brand hierarchy – Family brand – used in more than one

product category (but not the name of the company) Maggie

Most firms support only a few Family Brands Corporate brand functions as a Family brand

when it is used for a range of products. The 2 levels collapse into 1 for those products

Designing and Implementing Brand Strategies There are 2 strategic tools 2. Brand hierarchy – Individual brand – restricted to only one

category, although it may be used for many product types within the category (variants) - Park Avenue

Modifier - means of designating a specific item or model type, or version - Ultra

Product descriptor – explains what the product is and does

Brand Portfolio Structure cont.

Brand structure can be captured by hierarchy trees

Toyota

Corolla-VE-CE-LE

Camry-CE-LE-VE

Avalon-Platinum-Edition-XL-XLS

Celica-Liftback-Convertible

Camry Sedan-SE-SLE V6

Lexus-LS-400

-GS-300-400

-ES-300

-SC-300-400

Building Equity for Hierarchy Levels and Knowledge Structures

Building Equity for Hierarchy Levels and Knowledge Structures Corporate / Company brand level –

Corporate image dimensions – Important when it plays a prominent role in the

branding strategy Corporate image - depends on a number of factors

Products it makes Actions it takes Manner in which it communicates Doing the right thing everyday

Firm’s role in society and its reputation (with respect to employees, neighbor, stakeholders) builds credibility.

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate brand level Brand Equity - is the

differential response by consumers, employees, other firms, and others to the Firm’s activities

Corporate BE occurs - when relevant constituents hold relevant, strong, favorable associations about the brand in memory

They respond more favorably to a corporate ad campaign, corporate branded products, and PR releases, than if the same was attributed to another company

It is distinct from Product Brands as it encompasses a much wider range of associations which impacts individual products of the firm

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate Image Dimensions – affect BE

Type of associations at the Company Brand level affect BE - Common product attributes, benefits, attitudes

Intangible attributes High quality image association Innovative image associations

People and Relationships Customer focused corporate image associations

Values and programs Corporate credibility

Corporate expertise Corporate trustworthiness Corporate likeability

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate Image Dimensions – Common product attributes, benefits, attitudes

– performance associations, judgment and feelings association, – type of user, use occasions, etc. Intangible attributes - abstract benefits or attitudes are

the strongest associations – fun, high quality standards, leader

Product related corporate image - 2 dimensions are important

1. High quality corporate image association2. Innovative corporate image associations

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate Image Dimensions – Common product

attributes, benefits, attitudes – 2 specific product related dimensions are -1. High quality corporate image association –

Create a perception that Products are of the highest quality (one of the most important decision factors) Rated by various sources

2. Innovative corporate image associations – Modern, up-to-date, investing in R&D, advanced

manufacturing facility, introducing new product features Unique marketing programs with respect to product

introduction and improvements

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate Image Dimensions – People and

relationships – Reflects characteristics of employees (a natural

positioning strategy for services) as they directly or indirectly impact the product / services offered

Retail stores derive BE from employees - Customer focused corporate image associations –

perception that company is responsive, and caring, listening to customers - King Fisher Airline

Reflected through out the marketing program and communicated through advertising

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate Image Dimensions – Values and

Programs Reflected without directly relating to products Corporate image campaigns about the philosophy,

and actions of the company with respect to – organizational, social, political, and economic issues

Socially conscious image and environment friendly image

Targeting consumers, employees, others

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate Image Dimensions – Corporate credibility – reputation acquired through designs

and delivery of products and services Consumers form abstract feelings and judgments

about the company Personality of the corporate brand Success and leadership

Credibility is dependent on 3 factors - Corporate expertise – extent to which it can competently

make and sell products or conduct its services Corporate trustworthiness – extent to which it is seen as

honest, dependable, and sensitive to consumer needs Corporate likeability – seen as likeable, attractive, prestigious,

dynamic

Building Equity for Hierarchy Levels and Knowledge StructuresCorporate Image Dimensions –

Corporate credibility – advantages Company will be treated favorably by govt, legal

bodies Can attract better quality employees Helps existing employees become more

productive and loyal Helps survive a brand crisis and avoid public

outrage (buffers corporate trouble)

Building Equity for Hierarchy Levels and Knowledge Structures Corporate Brand – building and managing it

Firms must have a high public profile especially to shape more abstract associations

MD, CEO must maintain a more public profile to help communicate news and information and a be symbol of the current marketing activity

Firm will also be up for more public scrutiny - has to be transparent in terms of its values activities and programs

Strong Corporate Brands (if built and nurtured) offer a host of potential marketing advantages

Building Equity for Hierarchy Levels and Knowledge StructuresSummary

Many types of associations become linked to the corporate brand image that transcend physical product characteristics

These intangible associations are valuable sources of BE and provide POPs and PODs

Companies have a number of means of creating these associations

In doing so the companies must talk the talk and walk the talk with customers – communicating and backing up claims with concrete programs that they can understand and experience

Building Equity for Hierarchy Levels and Knowledge StructuresFamily brand level – (Range or Umbrella Brands)

applied across a range of product categories Company level associations are less salient Family brands are used for several reasons -

When products become dissimilar, it is difficult to use the Company brand and still retain its meaning –Titan and Fast Track

Family brands evoke a specific set of associations across groups of related products

These associations may relate to - Common product attributes, benefits attitudes, To a lesser extent to people, relationships, values, and

corporate credibility

Building Equity for Hierarchy Levels and Knowledge StructuresFamily brand level – (Range Brands or Umbrella Brands)

Family brands are an efficient means to link common associations to many but distinct products

Cost of introducing related new products is lower Likelihood of acceptance is higher Products linked must be considered carefully so that

associations of the family brand do not become weaker and less favorable

Failure in one product has ramifications on other products in the family because of common identification

These consideration determine whether a Branded House or a House of Brands is a more appropriate strategy

Building Equity for Hierarchy Levels and Knowledge StructuresIndividual brand level – restricted to 1 product

category (there may be many product types) Different models, package size, flavors, forms

Advantage – brand and supporting activities are customized to meet the needs of a specific customer group and designed for them

The name, logo and other branding elements Product design, IMC programs, pricing and distribution

If the brand fails, the risk to other brands / company is minimized Disadvantage of creating individual brands -

Difficulty, complexity and expensive to developing separate marketing programs to build sufficient levels of BE

Building Equity for Hierarchy Levels and Knowledge StructuresModifier level – used with Corporate or Family or

Individual brand to further distinguish the type of items / models involved

Signifies refinements or differences in brand related factors – quality, attributes, functions,

Makes products more understandable, and relevant to the customer / trade

Plays an important organizing role in communicating That different products within a category may share the same brand name, but differ on one or more attribute / benefit

Plays an important role in market coverage within the category

Building Equity for Hierarchy Levels and Knowledge StructuresProduct descriptor – (is not a brand element)

used with branded product so that consumers understand what the product is and does, and helps define the relevant competition for the product

A basic product name - useful to facilitate familiarity and understanding of how it is different from other similar products when it is difficult to describe a new product with unusual functions.

Designing Branding Strategy

Managing Brand Equity

Managing BE concerns those activities that take a broader and more diverse perspective of a brand’s equity Understanding how branding strategies

should reflect corporate concerns and be adjusted, if at all, over time or over geographical boundaries or market segments

Branding Strategies

The branding strategy for a firm reflects the number and nature of common or distinctive brand elements applied to the different products sold by the firm Which brand elements can be applied to

which products and the nature of new and existing brand elements to be applied to new products

Brand Hierarchy Decisions In creating the hierarchy, it is important

to decide:1. The number of levels of the hierarchy to

use in general2. How brand elements from different levels

of the hierarchy are combined, if at all, for any one particular product

3. How any one brand element is linked, if at all, to multiple products

4. Desired brand awareness and image at each level

Designing the Brand Hierarchy

Decide on –1. Number of levels

Principle of simplicity: as few levels as possible Principle of clarity: Logic and relationship of all

brand elements employed must be obvious and transparent.

2. Levels of awareness and types of associations to be created at each level

Principle of relevance: Create associations that are relevant across as many individual items as possible

Principle of differentiation: Differentiate individual items and brands


3. Products to be introduced Principle of growth - depending on ROI

invest in market penetration / expansion vs. product development

Principle of survival - brand extensions must achieve brand equity in the categories

Principle of synergy - brand extensions should enhance the equity of the parent brand


4. How to link brands from different levels for a product

Principle of prominence: The relative prominence of brand elements affects perceptions of product distance and the type of image created for new products

5. How to link a brand across products Principle of commonality: The more common

elements shared by products, the stronger the linkages

Adjustments to Marketing Strategy Multiple levels of branding strategy

Different levels of awareness and image Sub-brand strategy - marketing communications at the

corporate / family brand level to complement individual brands

2 marketing communication strategies1. Corporate image campaign (also works at Family level)2. Brand line campaigns


2 marketing communication strategies1. Corporate image campaign – to create associations for

the corporate brand to - Build awareness of company and nature of business Create favorable attitude and perceptions about company

credibility Link beliefs that can be leveraged about product –specific

marketing Make favorable impression on the financial community Motivate present employees and attract better recruits Influence public opinion on issues


2 marketing communication strategies1. Corporate image campaign –

To build CBBE 3 objectives are critical1. Build awareness of company and nature of business2. Build trust worthiness and credibility3. Create corporate image associations (beliefs) that can be

leveraged by product –specific marketing


2 marketing communication strategies2. Brand line campaign – to emphasize the breadth of

products associated with the brand It refers to the range of products associated with a brand line Brand line ads shows uses and benefits of various products

To builds awareness Clarify meaning Suggests additional use applications

Umbrella ads (that encompass also serve brands) used in conjunction serve a purpose

Managing Brand Portfolios Multiple brands are often employed in a

category for market coverage Target different market segments

Basic principle of brand portfolios… Maximize coverage Minimize overlap

Basic economics guideline ... A portfolio is too big if profits can be increased

by dropping brands. A portfolio is not big enough if profits can be

increased by adding brands

Brand Consolidation & Focus

Number of factors are driving this trend Movement from transactions to

relationships with consumers Value of strong “power” brands Difficulty of brand management

Cost Need for efficiencies

Importance of “top-down” brand management

Chapter 11

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Transcript of Chapter 11