Module IV: Nurturing Brand to Grow: Understanding & Developing Brand Architecture Managing Strategic...
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Transcript of Module IV: Nurturing Brand to Grow: Understanding & Developing Brand Architecture Managing Strategic...
Module IV: Nurturing Brand to Grow:
• Understanding & Developing Brand Architecture
• Managing Strategic Branding Issues:– Brand Extension & Brand Revitalization– Corporate & Internal Branding– Managing Global Brand
Branding Strategy or Brand Architecture:
“The number and nature of
common and distinctive brand elements
applied to the different products sold by the firm”
Soap Talcum Deo Cold cream
Lux
Liril
Ponds
Palmolive
Products Br
ands
Brand-Product matrix
Rows (Brand Line)
Brand portfolio strategy
Columns (Product Line)
Brand extension strategy
Breadth of a Branding Strategy
The number and nature of different products linked to the brands sold by a firm
Aggregate of market factors Mkt size Mkt growth Stage of PLC Seasonality Profits
Category factors
Porter’s five forces
Category capacity
Environmental factors Technological Economic Political Regulatory Social
Breadth of Product Mix: How many product lines a company should carry ?
Factors effecting Product category
attractiveness
Breadth of a Branding Strategy (Contd.)
Depth of Product Mix: How many variants should be offered in each product line ?
Issues in deciding no. of Product lines
Understanding of the market Cost interdependence between products
% of sales and profits contributed by each item or member of the product line
The ability of each item in the product line to Withstand competition Address consumer needs
Length of the product line
Depth of a Branding Strategy
Number and nature of different brands marketed in the product class sold by a firm
Why multiple brands?
To pursue multiple market segments & larger mkt. coverage
To increase shelf presence and retailer dependence in the store
To attract customers seeking variety
To increase internal competition within the firm
To yield economies of scale in adv., sales and distribution
Maximise market coverage, minimise brand overlap
and optimize the product portfolio
Brand hierarchy
Means of summarising the branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products revealing the explicit ordering of brand elements.
The simplest representation of a Brand Hierarchy from top to bottom is as follows:
Corporate ( or company ) brand.
Family Brand eg: Colgate
Individual Brand eg:Lux
Modifier( designating item or model) eg. Pentium PI, PII, PIII…
Special role of brand in brand portfolio
Special role of brands in
a brand portfolio
Serve as a flanker and
protect flagship brands
Serve as a cash cow and
Milk for profits
Serve as a lower end entry level product
to attract a new customer to the brand franchisee
Serve as a high end prestige product
Phillip Morris
Gillette
Mercedes
Toyota
Designing a Branding StrategyG
uide
lines
for b
rand
hie
rarc
hy
Decis
ions
The no. of levels of the hierarchy to use in general Principle of simplicity: As few levels as poss.
Desired awareness and associations at each level Principle of relevance: Create abstract associations that are relevant across as many individual items as possible Principle of differentiation: Differentiate individual items and brands
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
How to link a brand across products? Principle of commonality: The more common elements shared by products, the stronger the linkages
Strategies for Growth
Introduce New Products Explore New Markets
New Brand Existing Brand
Line Extension Category Extension
New Products & Brand extensions
Brand StrategiesBrand Strategies
Line Extension
Multibrands
Brand Extension
New Brands
Bra
nd N
ame
Existing New
Product Category
Existing
New
• Brand equity is reinforced by marketing actions that consistently convey the MEANING of the brand to consumers in terms of BRAND AWARENESS and BRAND IMAGE.
• Reinforced marketing actions, along with product development, branding strategies etc. also help in keeping the brand meaning in terms of products, benefits and needs as well as in terms of product differentiation intact.
Reinforcing brands…
Reinforcing depends on nature of the brand associations
• Product related performance associations
Product innovations are critical.
Change in product may not be drastic, as brand meaning may be associated with the product characteristics.
• Non-product related imagery associations
Relevance in user and usage imagery is critical.
Potentially easier to change through major advertising campaigns (no product innovation may be involved).
Too frequent repositioning can blur the image of the brand and confuse or even alienate the consumers.
Reverse Fortunes of Brands
Recapture lost sources of Equity
Identify and establish new
sources of Brand Equity
Approaches to Re-vitalization
1. Expanding Brand Awareness
2. Improving Brand Image
3. Entering New Markets
Approaches adjustment to brand portfolio
1. Migration Strategy
2. Acquiring new customers
3. Retiring Brands
What is a brand?
A brand is a name, term, sign, symbol, or design,A brand is a name, term, sign, symbol, or design,
or a combination of them,or a combination of them,
intended to identity the goods or servicesintended to identity the goods or services
of one seller or group of sellersof one seller or group of sellers
andand toto differentiate them from those of competitorsdifferentiate them from those of competitors
- American Marketing Association- American Marketing Association
A sum of parts
Functional ProductAttributes
Symbolic Values & Associations
Rational (Head) Emotional (Heart)
The Brand
+
BRAND IMAGE: the way of thinking by a consumer about the brand and the feelings the
brand arouses when the consumer thinks about it
• Life style
• Expectation
• Experience
• Disposition
• Differentiation
Brand Positioning• Define competitive frame of
reference– Target market– Nature of competition
• Define desired brand knowledge structures– Points-of-parity
• necessary• competitive
– Points-of-difference• strong, favorable, and unique brand associations
Your Brand’s Genetic Code: BRAND DNA
•Every great brand has substance. a brand’s DNA is timeless. a brand’s blue print is a unique set of values that originally defined them. Great brands can remain relevant through creativity.•A brand’s DNA is not strictly about the product, service, the past or even about research -- its about tapping in to an essence or story that defines who you are to the people that matter most, your core customers.•What Do You Stand For?
- Brand Names
Logos and Symbols
- Characters:
- Benefits
- Cautions
- Slogans
- Benefits
- Designing Slogans
- Updating Slogans- Jingles BRAND_VIDEO CLIPS\Hutch song.mp3
- Packaging
- Benefits
- Package design
- Packaging changes
Criteria1. Memorabiltiy
• Easily recognized• Easily recalled
2. Meaningfulness• Descriptive• Persuasive
3. Likability• Fun and interesting• Rich visual and verbal imagery• Aesthetically pleasing
4. Transferability• Within and across product categories• Across geographic boundaries and cultures
5. Adaptability• Flexible• Updateable
6. Protectability• Legally• Competitively
Leveraging Secondary Brand Leveraging Secondary Brand Knowledge to Build Brand EquityKnowledge to Build Brand Equity
•Brands may be linked to other entities that have their own knowledge structures in consumer minds•Means of reinforcing existing associations in a fresh and different way •very important aspect if the existing brand associations is deficient in some way
The Brand Value ChainMarketing Program
Investment
Customer Mindset
Market Performance
Shareholder Value
Program Quality
Market place
Conditions
Investor Sentiment
Multiplier
Value
Stages
•Awareness•Associations•Attitudes•Attachment•Activity
•Product•Communication•Trade•Employee•Other
•Price premium •Price elasticity•Market share•Expansion success •Cost structure•Profitability
•Stock prices •P/E ratio •Market capitalization
•Market dynamics •Growth potential • Risk Profile•Brand contribution
•Competitive reactions•Channel support•Customer size and profile
•Clarity•Relevance•Distinctiveness •Consistency
BRAND_VIDEO CLIPS\Lufthansa Brand Movie_vcd0.mpg
BRAND_VIDEO CLIPS\Performance Review IKEA 2009.flv
BRAND_VIDEO CLIPS\Global Brands Lose Value as Economy Suffers.flv
BRAND_VIDEO CLIPS\Recap - Intel's Shareholder Meeting - Bloomberg.flv
Key Metrics: Consumer Based
Brand Persuasion =Ratio of Intention to Purchase Brand/ Spontaneous Brand Recall
Brand Pull =Ratio of Likely Switch-ins to the Brand / Likely Switch-outs from the Brand
Brand Loyalty = Ratio of Likely to Continue Buying the Brand / Total Current Users of the Brand
Secondary Brand Share = Total Current Users of the Brand / Total Current Users of the Category
Primary Brand Share =Preferred Current Users of the Brand / Total Current Users of the Category
Discounted Cash Flows Method:
Value of Brand =
Where = Anticipated Revenue in year t attributable to the brand
r = Discounting rate or WACC (Weighted average cost of capital)
= Residual Value after n (year)
rRBrRB nt
t /)1(/(
tRB
nRB
For Example:
•Brand A had revenues of Rs 600 crores ( 2009).•The Brand A is expected to grow at around 10% per annum for the next five years.•The Discounting rate is taken at 12 %.•The period when the brand is expected to operate status quo is assumed to be the next five years
BrandAsset® Valuator
Leading
Brand Strength
Differentiation Relevance
Lagging
Brand Stature
Esteem Knowledge
A Two Dimensional Framework for Diagnosing Brands: The
Power Grid
Soap Talcum Deo Cold cream
Lux
Liril
Ponds
Palmolive
Products Br
ands
Brand-Product matrix
Rows (Brand Line)
Brand portfolio strategy
Columns (Product Line)
Brand extension strategy
Brand hierarchy
Means of summarising the branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products revealing the explicit ordering of brand elements.
The simplest representation of a Brand Hierarchy from top to bottom is as follows:
Corporate ( or company ) brand.
Family Brand eg: Colgate
Individual Brand eg:Lux
Modifier( designating item or model) eg. Pentium PI, PII, PIII…
Strategies for Growth
Introduce New Products Explore New Markets
New Brand Existing Brand
Line Extension Category Extension
New Products & Brand extensions
Reverse Fortunes of Brands
Recapture lost sources of Equity
Identify and establish new
sources of Brand Equity
Approaches adjustment to brand portfolio
1. Migration Strategy
2. Acquiring new customers
3. Retiring Brands