Chapter 11
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Transcript of 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
Designing and Implementing Brand StrategiesPortfolio Roles –
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
Designing and Implementing Brand StrategiesPortfolio Roles –
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
Designing the Brand Hierarchy
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
Designing the Brand Hierarchy
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
Adjustments to Marketing Strategy Multiple levels of branding strategy
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
Adjustments to Marketing Strategy Multiple levels of branding strategy
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
Adjustments to Marketing Strategy Multiple levels of branding strategy
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