MANAGING BRAND EQUITY-2

Why is managing brand equity important over time? Changing marketing environment (external forces) Shifts in consumer behaviour Competitive strategies Govt. regulations Internal forces Changes in strategic focus of the company.

STEPS FOR MANAGING BRANDS OVER TIME Reinforcing brands

Revitalising brands

Adjusting brand portfolio

REINFORCING BRANDS

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. Slide 72Change in product may not be drastic, as brand meaning may be associated with the product characteristics. Slide 73

Non-product related imagery associationsRelevance in user and usage imagery is critical. Slide 73Potentially easier to change through major advertising campaigns (no product innovation may be involved). Slide 74Too frequent repositioning can blur the image of the brand and confuse or even alienate the consumers.

Reinforcing of brands can be throughMaintaining brand consistencyProtecting sources of brand equityFortifying or Leveraging Fine-tuning the marketing support program.

1. Maintaining brand consistencyConsistency of marketing support is essential for maintaining strength and favorability of the brand. Shrinking R&D and communication budgets may risk the brand becoming out-of-date, irrelevant or even forgotten. Consistency to be shown in brand positioning. Consistency doesnt mean no changes at all. Tactics may change, but strategic positioning of brand should not change.Prices may go up or down, product features may be added or deleted, brand extensions added or withdrawn, ad campaigns may change .Key elements of the marketing program and brand meaning should be retained and preserved

2. Protecting sources of brand equity While looking at potentially powerful sources of brand equity, preserve and defend the existing sources. Unless there is some change with either consumers, competitors or the company that makes the strategic positioning of the brand less powerful, successful positioning should not be deviated from. Key brand associations should not be altered. E.g. Maggis new introductions.

3. Fortifying versus Leveraging There is always a trade off between fortifying a brand and leveraging the benefits of the brand to financial gains.Fortifying means ways of increasing brand equity and furthering the brand image through continuous marketing and advertising efforts.

On the other hand, capitalizing on existing brand equity to reap accruing benefits in terms of cost savings (reduced communication expenditure) and revenue opportunities (seeking increasingly higher premium and introducing brand extensions.)

REVITALISING BRANDS

Reverse Fortunes of BrandsRecapture lost sources of EquityIdentify and establish new sources of Brand Equity

Steps to Reverse Fortunes of BrandRevolutionaryor Evolutionarychanges?Revisit the basic values of the brandsDetermine current status of sources of Brand EquityAscertain effectiveness of key brand associationsDecisions on repositioning

Marketing Program FailuresInsufficient ConsumersLess DamagingEnforce positive AssociationsPositioning FailuresSufficient but dissatisfied ConsumersExtremely damagingDifficult to overcome negative associationsBack 2 BasicsReinventionContinuum

Approaches to RevitalisationExpanding Brand Awareness

Improving Brand Image

Entering New Markets

1. Expanding Brand AwarenessExpand Breadth Increased UsageQuantityDifficult to changeFunction of particular beliefsException Impulse Consumption (availability)FrequencyNew opportunitiesNew Ways

1a. New usage OpportunitiesAppropriateness & Advantages of using brands in new situationsReminders to use brands in those situationsImproving Top of the mind awareness.Functional Fixedness - avoidance in non traditional situationsAssociated with special occasions only.

1a. New usage opportunities contd Retain premium brand associationConsumer perception of usage differs from the reality of their usage.

Replacement cycles

Consumers educated about the merits of regular and increased usage.

1b. Identifying new & completely different ways to use the brandNew and different usage applicationOnly new ad campaigns not enoughNew uses may arise from new packagingEgs Milkmaid, Amul Cheese, McDonalds

2. Improving Brand ImageChanges in Brand Awareness not sufficientA new Marketing ProgramOld positive associations to bolsteredNew positive associations to be createdNegative associations to be neutralized

RepositioningChanging Brand Elements

RepositioningRepositioningEstablishing more compelling points of differenceRemind consumers of virtues of brands that have been taken for grantedNostalgia and heritageEstablish a point of parity on key image dimensionNegative product-related associations due to changes in consumer tastes

Changing brand elementsModification of Brand nameOther Brand Elements Packaging, logos etc.Moderate and evolutionary in naturePreserve salient aspects of Brand elementsE.g.: Adidas, Federal Express, GE

3. Entering New MarketsReach out to new Customer groupsJohnson and Johnson: Baby Soap, Baby ShampooReach out to decision making segment instead of the usersWomen as decision makers for mens productsTapping the female segment of the marketNew market segments based on cultural dimensionsRetaining existing Customers and Regaining Lost Customers

ADJUSTMENTS TO BRAND PORTFOLIO

Approaches adjustment to brand portfolioMigration Strategy

Acquiring new customers

Retiring Brands

1. Migration StrategyEntry-Level Brands Critical in bringing new customersLogical ordering Hierarchical structure in consumers mind. E.g. BMW with 3,5,7 Series

2. Acquiring New CustomersTo make up for loss of existing customersImportant to attract younger customersChallenge Making Brand seem relevant to customersEach generation has a different attitude from its preceding generation Strategies to encompass both new and old customers

a. Multiple Marketing ProgramSeparate advertising campaigns and communication programs for each segmentBlurring of images due to media overlapb. Brand Extensions and Sub- BrandingNew technology, features and attributesNeeds of new customers or changing needs of existing customersc. New Distribution OutletsMaking products more available

3. Retiring BrandsOptionsMarketing Support (Orphan Brand)Reduce no. of product typesAlmost no advertising and promotional expenditureConsolidationStronger Brand HLL POWER BRANDSCut CostsFocus marketing EffortsDiscontinue productSpin off Orphan Brands after a cut off of low salesSell Orphan BrandsFade away or discontinue consciously. E.g. - Citra

Abandonment Decisions for Retiring BrandsMarkets prospectsRate and type of declineSegments of enduring demandReasons for declineCompetitive intensityCA of CompetitorsWillingness to exitBrand Loyalty of Customers and Price pressuresBrand StrengthStrong AssociationsMarket share and position in the marketCA w.r.t. key SegmentsBrands fit in the Strategic ThrustExit Barriers

MANAGING BRANDS OVER GEOGRAPHIC BOUNDARIES AND MARKET SEGMENTS

Rationale For Going AbroadSlow growth and increased competition in domestic marketsOverseas growth and profitEconomies of scaleDiversify riskGlobal mobility of customers

Advantages Of Global MarketingEconomies of ScaleLower Marketing CostsPower and ScopeConsistency in Brand ImageLeverage good ideas quickly and efficientlyUniform marketing practices

DisadvantagesDifferences in consumer needs, wants and usage patternsDifferences in consumer response to 4 PsDifferences in brand and product development and competitive environmentDifferences in legal environmentDifferences in marketing institutionsDifferences in administrative procedures

Global Branding DecisionsDeciding which markets to enterDeciding how to enter the marketDeciding on the marketing programDeciding on marketing organisation

Selecting Global Markets

Global Customer Based Brand EquityCreating Brand Salience

Crafting Brand Image

Eliciting Brand Response

Cultivating resonance

Building Global Customer Based Brand EquityUnderstand similarities and differences in the global branding landscapesNo shortcutsEstablish Marketing InfrastructureIntegrated Marketing CommunicationBrand PartnershipBalance Standardization & CustomizationLocal and global controlEstablish operable guidelinesGlobal BEMSBrand Elements

1. Understand similarities and differences in the global branding landscapes

Developed & Developing Markets

Landscape of Global Brands

2. Sustained activity in Brand ManagementContinuous activitiesGreater focus on R&DProduct Life Cycle critical to brands growth

3. Establish Marketing InfrastructureBlend push and pull strategies to build brand equityInfrastructure constraints. Ex. Nestle in China

4. Integrated Marketing CommunicationEstablish awareness and key points of parity. Ex. KelloggsPositioning same but creative strategies may differ. Ex. Dove Easily available media options: cable and satellite; niche magazines

5. Brand PartnershipAlternative ways of entry:Exporting existing brands (geographic extension) Acquiring brands (Brand Acquisition) Brand alliance

Trade off between key criteria: speed, control and investment.

Heinekens Sequential StrategyExport to build brand awarenessLicense to local brewer to expand volumeTake equity stake or forge a joint venture (piggyback sales of high priced Heineken brand with established local brand)Heinekens takeover of DB Breweries in New Zealand successful

6. Balance Standardization & CustomizationStandardization versus Customization- Globally standardized items: advanced, functional, reliable and low priced.Ex.: McDonalds: Ronald McDonald appears worldwide but the food and marketing is localized.Standardization and Customization: Standardized marketing:LOreal: Because Im Worth It. Customized marketing:Tide in Russia positioned as economy brand. (Little specific knowledge in Russia)

Factors favoring standardizationCommon customer needsGlobal customers and channelsFavorable trade policies and common regulationsCompatible technical standardsTransferable marketing skillsEssential criteria for development of global brand:- positioning and branding applied globally- technology which can be applied globally- capabilities for local implementationKey considerations in implementation- market development and competitive environment at similar stages in both countries- consumer target markets should be alike

Supporting Marketing Programs - ProductOnly certain products marketed similarly. Ex. Pampers disposable diapersConduct research in local marketsProduct differences sometimes not justified. Ex. Palmolive soapSell both global and local brands. Ex. Coke sells Thums-Up in India

PriceConsumer perceptions of value, willingness to pay, elasticity to price changePressures for international price alignment: Gray importsPrice Corridor takes in account differences in countries and alignment pressures

7. Local & Global ControlDecisions on Centralization or DecentralizationNature of products and its linkage to local cultureStrategically easier to define but difficult to implement

8. Operable GuidelinesBRAND MANAGEMENT GUIDELINES

9. Global BEMSBrand Asset Valuator

Interbrand Method

10. Brand ElementsGeographical Transferability: Verbal (name translation) vs. Non-Verbal (logo, color translation) Ex.: Mars changed the name of its third largest UK brand Marathon to Snickers which was used in the rest of Europe

Brand Equity Across Other Market SegmentsRegional Market SegmentsEx. Campbell soups- Factors: splintering of mass markets, pockets of sales strengths, focused targeting.Other Demographic And Cultural Segments(Differences in attitudes and behavior)

THANK YOU

COURSE RECAP3 QUIZZES: 207 CASES: 201 MIDTERM: 301 END TERM: 30

INTRODUCTION BRAND, BRANDING, BRAND MANAGEMENTTYPES OF BRANDS NAMESHISTORICAL ORIGIN OF BRANDINGBRAND EQUITYCUSTOMER BASED BRAND EQUITY

BUILDING BRAND EQUITY CASES: LEVIS DOCKERSINTELSTARBUCKS

CUSTOMER BASED BRAND EQUITYBRAND KNOWLEDGEDIFFERENTIAL EFFECTCUSTOMER RESPONSE TO MARKETING

BRAND KNOWLEDGEBRAND AWARENESSBRAND RECALLBRAND RECOGNITIONBRAND IMAGESTRENGTHRELEVANCECONSISTENCYFAVOURABILITYDESIRABLE DELIVERABLEUNIQUENESSPODPOP

DIFFERENTIAL EFFECTPRIMARY BRAND ELEMENTSBRAND ELEMENT CHOICE CRITERIAMEMORABILITYMEANINGFULNESSTRANSFERABILITYADAPTABILITYPROTECTABILITYSECONDARY BRAND ASSOCIATIONMARKETING PROGRAM TO SUPPORT ASSOCIATIONS

MEASURING BRAND EQUITYCASES: CMPBB&J

BRAND VALUE CHAIN & BEMSMARKETING PROGRAM INVESTMENTPROGRAM QUALITY (MULTIPLIER)CUSTOMER MINDSETMARKET PLACE CONDITION (MULTIPLIER)MARKETING ENVIRONMENTINVESTOR SENTIMENT (MULTIPLIER)STAKEHOLDERS

METHODS TO MEASUREPRICEPRICE PREMIUMPRICE PREMIUM AT EQUALISATIONPRICE PREMIUM AT INDIFFERENCECOSTHISTORICAL COSTREPLACEMENT COSTDCF METHODBRAND CONTRIBUTIONINTERBRAND METHODMARKET VALUE METHODCUSTOMERBRAND KNOWLEDGEBLIND TESTATTRIBUTE BASED

MANAGING BRAND EQUITYCASES: NIVEANIKE

BRAND PRODUCT MATRIXBRAND BREADTH STRATEGY BRAND DEPTH STRATEGY

BRAND HIERARCHYCORPORATE FAMILYINDIVIDUALMODIFIER

BRANDING STRATEGYBRAND HIERARCHYSUB-BRANDING & BRAND EXTENSIONS DECISIONSGRAY & SMELTZER BRAND PRODUCT RELATIONSHIPPRINCIPLES OF BRANDINGSIMPLICITYRELEVANCEPROMINENCEDIFFERENTIATIONCOMMONALITY

MANAGING BRANDS OVER TIMEREINFORCING BRANDSMaintaining brand consistencyProtecting sources of brand equityFortifying or LeveragingFine-tuning the marketing support program. REVITALISING BRANDSExpanding Brand AwarenessImproving Brand ImageEntering New Markets ADJUSTING BRAND PORTFOLIOMigration StrategyAcquiring new customersRetiring Brands

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HLL POWER BRANDSBACK Retiring Brands