Brands in Multiple Dimensions_Grp1_SecA

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Viewing Brands in Multiple

Dimensions

Product Brand management

10/10/2013

Group 1, Sec A



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Table of Contents1.0 Brand Management Failure .............................................................................................................. 2

1.1 General Motors Corp. ................................................................................................................... 2

1.2 Nestle ............................................................................................................................................ 2

2.0 Heart of the Problem ........................................................................................................................ 2

3.0Revisiting the broader implications of brand .................................................................................... 3

4.0 World Hypothesis: Karl Popper ......................................................................................................... 3

5.0 Refining Brand Equity: Key Dimensions - Nuanced view of brand ................................................... 4

6.0 Measuring Brand equity in terms of Customer vs. Company ........................................................... 5

7.0 Brand Manifold ................................................................................................................................. 5

8.0 Conclusion ......................................................................................................................................... 6



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1.0 Brand Management Failure

1.1 General Motors Corp.

GM tried to revive the Daewoo Car division (low priced Korean Auto) in UK early in 2005.

Result:

Falling Sales

Resignation of the Chief Executive of GM’s Operations in UK

Chevrolet Brand deteriorated

Ranking went down

Reasons:

Car buyers had difficulty linking the iconic American brand with low priced Korean Auto.

1.2 Nestle

Nestle tried to revive its lackluster sales of KitKat bar in 2003 by doing a brand extension andlaunching KitKar bar with new flavors such as Blood Orange, Lime , Crush and Christmas Pudding.

Result:

Temporary interest in new launches but was utter failure

UK sales fell by 18% in just 2 yrs.

They have to drop all the new flavors

Reasons:

KitKat was associated with Chocolate flavor and customers have difficulty in accepting the

same in different flavors.

This shows why viewing the Brands in multiple dimensions is important. The managers must

redefine the brand discourse in more flexible language.

2.0 Heart of the Problem

What is Brand?

As per the article Brands are the symbols around which companies, suppliers, supplementary

organizations, public, customers construct identities.

Brands

• Create identities

• Loyalty

• Repeat Purchases

• Ease in introduction of new products

• Enhanced Financials by premium pricing

Problems

• Marketing Myopia is being replaced by Branding Myopia where brand becomes an end in

itself or end for the people who have been managing them.

• Managers use brand as a tool for short term objectives

• Risks posed by technology, consumption and competition



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3.0 Revisiting the broader implications of brandEarlier company’s value was represented by Net book value of the assets on balance sheet which

was mostly the value of all the tangible assets of the company. Now the concept has changed there

are something called soft assets i.e. company brand.

Brand Equity = Price premium + Market Share (As per research)

Due to this company’s value have increased manifold.

Stakeholders assessments of Brand depends upon –

• Mediated Perception i.e info about Brand – Brand communication

• Direct experience – direct interaction with a Brand – Brand Embodiments

Brand Communication-Information from company, customers and other stakeholders

Brand embodiments-Brand as experienced through products, suppliers, channels, third party,

consumers.

This shows that branding is not just a marketing issue now, it has become a strategic issue that

shapes the future of the company.

4.0 World Hypothesis: Karl Popper

Here the author explains the concept of brand formation with the help of 2 world analogy.

The author refers world 1 as the core product (goods and services) and its attributes. It is the

physical objects, services, states and systems.



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The author refers world 2 as the stakeholder’s perception towards the core product, their thoughts,

emotions and perception towards the product.

The above 2, world 1 and world 2, joins together to get stronger to form the brand of the product. It

says about the imagery in the customers minds concerning the brand.

In the above model the arrows are bi-directional stating that information flow is both from

products/services and customers to the brand and vice versa.

5.0 Refining Brand Equity: Key Dimensions - Nuanced view of brand

In this model the author tries to distinguish between brand equity and the value of the brand. By

brand equity the author refers to the perception of a brand and by value as what is the monetary

value of the brand to the company.

Here the author, differentiate the value into two, Embodied Value and Exchange Value. Embodied

value refers to the perception and value that the manager’s see in the brand. Exchange value refers

to the cash flow stream that result from the company’s ability to acquire and retain customers.

The premium products which are sold at higher price but bought only by a small number of

customers are said to be high on customer exchange value but low on the company exchange value.

Whereas, the mass marketed products, which are sold at lower cost, are said to be low on customer

exchange value but high on the company exchange value.



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6.0 Measuring Brand equity in terms of Customer vs. Company

The framework defined in the previous section has been broken up further, to discuss the concept of

brand equity from the customer and the company point of view. Brand equity has the two followingfacets:

- Financial Value: This means that the brand value has been quantified by a non-partisan party in

terms of some number i.e. for instance, the Coke brand is worth X million USD.

- Behavioral value: This means that the customers perceive of a specific brand in a specific way.

Surveys are conducted by parties to find out the intangible aspects of the brand.

Commodity products are those for which even the company and even the customers perceive a low

value. These could include something as simple as a potato. For specialty products, say something

like a Ferrari or a Rolls Royce, the company perceives low value because the sales and thus thenumbers are low, whereas from the customer point of view, the value of a single product is

substantially high. For a mass market product like a low price wine, since the product is sold in bulk

numbers, the value with respect to company is high, whereas the equity value perceived by the

customer is low. Finally, iconic is the stage where most companies strive to be where equity value

from the point of view of company and customer both are high. Coke, Microsoft are amongst the

companies which have managed to reach this stage.

7.0 Brand Manifold

The concept of Brand Manifold speaks of two factors primarily:

• Temporal Factors: These factors contribute to the fact that the brand needs to evolve over

the years and still hold value for people of various generations. Beetel(car) is an epitome for

the same concept.

• Multiple Constituencies: This speaks of the concept that various stakeholders concerned

with a brand have various perspectives and outlooks for a brand. Thus, the suppliers, the

customers and the company itself have all different ways of looking at the success / failure

of the brand.



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The framework divides the axes from future/past perspective and internal/external brand meanings.

Thus, if the developments happen from the internal employees feedback looking at history of the

brand (as happened with BMW Mini), it will fall in the lower left quadrant. However, if the same

happens looking at a future perspective (as happened with the case of Porsche), it will fall in the top

left quadrant. Finally, if external factors are considered i.e. the feedback of suppliers, customers etc.

and if past trends are followed (as happened in the case of Chrysler), it falls in the lower right

quadrant. Finally, as done by GM’s Hummer, it was influenced from the external factors and the

future outlook was considered.

8.0 Conclusion

Looking from an overall perspective, the brand is only a means to an end and not the end itself. The

moment managers ignore this fact, problems are bound to arise.

It is also important to note that Popper’s World 1 and World 2 are directly in touch with World 3

(dual relationship). Thus, if a luxury car is to be showcased (World 3), then it will directly influence

the sort of materials used for manufacturing the car (World 1) and it will also lead to a prestigebased marketing campaign (World 2).

Brands in Multiple Dimensions_Grp1_SecA

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