Strategic Brand Management - Exeterpeople.exeter.ac.uk/wl203/BEMM211/Materials/Lecture 4/Day 4.2...
Transcript of Strategic Brand Management - Exeterpeople.exeter.ac.uk/wl203/BEMM211/Materials/Lecture 4/Day 4.2...
-
1
Jack Buckner
Strategic Brand ManagementStrategic Brand Management
Exeter MBA and MSc Exeter MBA and MSc Day 4Day 4
Lecture 1Lecture 1
Brand ManagementBrand Management
Jack Buckner
Brand ManagementBrand Management
Brand Portfolios / architectureBrand Portfolios / architecture
Corporate brandsCorporate brands
Brand extensionsBrand extensions
SubSub--brandsbrands
Brand alliancesBrand alliances
-
2
Jack Buckner
Some definitionsSome definitions
Most brands are part of a wider organizationMost brands are part of a wider organization
Brand architecture Brand architecture the structure and the structure and
organization of brandsorganization of brands
Brand hierarchy Brand hierarchy the different the different
organizational levels within a brand systemorganizational levels within a brand system
SubSub--brand brand an identified division (other of an identified division (other of
products) within a brandproducts) within a brand
Jack Buckner
Brand HierarchiesBrand Hierarchies
Resolution Resolution
EnhancementEnhancement
NutrasweetNutrasweetMrMr
GoodwrenchGoodwrench
service systemservice system
BRANDED BRANDED
FEATUREFEATURE
LaserjetLaserjet IV IV
SESE
CarnationCarnation
Instant Instant
Breakfast Swiss Breakfast Swiss
ChocolateChocolate
Chevrolet Chevrolet
Lumina Sports Lumina Sports
CoupeCoupe
SUBBRANDSUBBRAND
LaserjetLaserjet IVIVCarnation Carnation
Instant Instant
BreakfastBreakfast
Chevrolet Chevrolet
LuminaLuminaPRODUCT LINE PRODUCT LINE
BRANDBRAND
HP Jet BrandHP Jet BrandCarnationCarnationChevroletChevroletRANGE BRANDRANGE BRAND
HPHPNestleNestleGeneral MotorsGeneral MotorsCORPORATE CORPORATE
BRANDBRAND
Aaker : Building Strong Brands
-
3
Jack Buckner
Brand Architecture alternativesBrand Architecture alternatives
Product Range Brand Product Range Brand
Umbrella BrandUmbrella Brand
Endorser BrandEndorser Brand
Kapferer: Strategic Brand Management
Jack Buckner
Product Range Brand StrategyProduct Range Brand Strategy
Company
Brand A
Product A
Positioning A
Brand B
Product B
Positioning B
Brand N
Product N
Positioning N
-
4
Jack Buckner
Product Range Brand StrategyProduct Range Brand Strategy
Allows multiple market entry and flexibilityAllows multiple market entry and flexibility
Consumer oriented branding not corporate Consumer oriented branding not corporate brandingbranding
Encourages innovation and risk taking (failure will Encourages innovation and risk taking (failure will reflect less on corporate brand)reflect less on corporate brand)
Possible to control greater shelf space with strong Possible to control greater shelf space with strong brandsbrands
BUT expensive and requires sophisticated BUT expensive and requires sophisticated organization organization
Example Example P & G (Ariel, Tide, Crest, Pampers, P & G (Ariel, Tide, Crest, Pampers, Pringle)Pringle)
Jack Buckner
Umbrella Brand StrategyUmbrella Brand Strategy
BRAND
Products or
Services
Specific
communications by
product or service
A
A
B
B
N
N
-
5
Jack Buckner
Umbrella Brand StrategyUmbrella Brand Strategy
Builds brand equity at the corporate levelBuilds brand equity at the corporate level
Corporate brand strength is criticalCorporate brand strength is critical
Reduces marketing investment in new categoriesReduces marketing investment in new categories
Allows fastAllows fast--follower strategies in innovative follower strategies in innovative
companiescompanies
Easier for horizontal rather than vertical extension Easier for horizontal rather than vertical extension
(in some categories)(in some categories)
Risk of overRisk of over--stretchingstretching
Examples Examples Sony, Canon, SchweppesSony, Canon, Schweppes
Jack Buckner
Endorser Brand StrategyEndorser Brand Strategy
Endorsing Brand
Brand A
Product or
range A
Promise A
Brand B
Product or
range B
Promise B
Brand N
Product or
range N
Promise N
-
6
Jack Buckner
Endorser Brand StrategyEndorser Brand Strategy
Allows dual brand equity to developAllows dual brand equity to develop
Quality seal of approvalQuality seal of approval
Cheaper method of building brand equity in Cheaper method of building brand equity in
company namecompany name
Use product brands to express different aspects of Use product brands to express different aspects of
personalitypersonality
Requires comprehensive understanding of brand Requires comprehensive understanding of brand
valuesvalues
Examples Examples GM, ICI, 3M, HSBCGM, ICI, 3M, HSBC
Jack Buckner
Brand architecture debate Brand architecture debate 3M3M
In 1981 created 244 new brandsIn 1981 created 244 new brands
Over 1500 trademarksOver 1500 trademarks
Established branding committeeEstablished branding committee
3M to be sign off on all products (except 3M to be sign off on all products (except cosmetics)cosmetics)
Ban the use of more than 2 names on one Ban the use of more than 2 names on one productproduct
Clear guidelines for branding to all subsidiariesClear guidelines for branding to all subsidiaries
Brand decision treeBrand decision tree
-
7
Jack Buckner
Brand Architecture Brand Architecture the car the car
industryindustry
Toyota / LexusToyota / Lexus
BMW / MiniBMW / Mini
Mercedes / Smart CarMercedes / Smart Car
FordFord
Audi / VolkswagenAudi / Volkswagen
GMGM
Critical issue is clear structure and Critical issue is clear structure and understandingunderstanding
Jack Buckner
Brand Extension Brand Extension -- ProsPros
Facilitate new product acceptanceFacilitate new product acceptance
Increase profitsIncrease profits
Avoid cost of developing a new brandAvoid cost of developing a new brand
Appeal to new consumersAppeal to new consumers
Revitalize the brandRevitalize the brand
Prevent marketing myopiaPrevent marketing myopia
-
8
Jack Buckner
Brand Extension Brand Extension -- ConsCons
Hurt parent brand imageHurt parent brand image
Dilute brand image (diluted investment)Dilute brand image (diluted investment)
Confuse consumersConfuse consumers
Alienate existing consumersAlienate existing consumers
Retailer resistanceRetailer resistance
Jack Buckner
Some brand extension researchSome brand extension research
Successful brand extensions have a Successful brand extensions have a perceived fit (the basis for fit may vary)perceived fit (the basis for fit may vary)
High quality brands stretch further than High quality brands stretch further than average quality brandsaverage quality brands
A prototype brand can have difficulty A prototype brand can have difficulty extendingextending
Vertical extensions can be difficultVertical extensions can be difficult
Most effective advertising focuses on the Most effective advertising focuses on the extension (not the parent)extension (not the parent)
Keller Strategic Brand Management
-
9
Jack Buckner
Nike and the Skate marketNike and the Skate market
Skateboarding fast expanding sport
New brands emerged Etnies, DC
Traditional sports brands struggled
image, distribution
Nike 4 attempts in 1990s ACG
separate division
Orange County office big brand
approach
We were hurt by the fact we were the
number one sports company
Recognised brand extension not
possible
Savier new brand
Hurley acquired - $50 million
Jack Buckner
Extend profits, not product linesExtend profits, not product lines
Why do companies extend their brands?Why do companies extend their brands? Customer segmentationCustomer segmentation
Consumer desiresConsumer desires
Pricing breadthPricing breadth
Excess capacityExcess capacity
ShortShort--term gainterm gain
Competitive intensityCompetitive intensity
Trade pressureTrade pressure
The pitfalls of proliferationThe pitfalls of proliferation Weaker line logicWeaker line logic
Lower brand loyaltyLower brand loyalty
Under exploited ideasUnder exploited ideas
Stagnant category demandStagnant category demand
Poorer trade relationsPoorer trade relations
Increased costIncreased cost
Quelch and Kenny HBR September 94
-
10
Jack Buckner
Extend profits, not product linesExtend profits, not product lines
RecommendationsRecommendations Improve cost accountingImprove cost accounting
Allocate resources to winnersAllocate resources to winners
Research consumer behaviourResearch consumer behaviour
Manage deletionsManage deletions
CoCo--ordinate marketingordinate marketing
Work with channel partnersWork with channel partners
Findings debatedFindings debated Energizing a brand?Energizing a brand?
Manage a dynamic environment?Manage a dynamic environment?
Consumers are forgivingConsumers are forgiving
Marketers as biologistsMarketers as biologists
HBR on Brand Management
Jack Buckner
SubSub--brandsbrands
Vertical extensionVertical extension
Upwards (The silver bullet concept Upwards (The silver bullet concept Audi TT)Audi TT)
Downwards (Levis signature range) Downwards (Levis signature range)
-
11
Jack Buckner
Guess the Brand?Guess the Brand?
I believe there is no limit to what a brand I believe there is no limit to what a brand
can do. You can ignore those who go on can do. You can ignore those who go on
about brand stretching.about brand stretching.
attitude is, weattitude is, well just get ll just get .to do a .to do a
personal appearance and it will help the personal appearance and it will help the
brand.brand.
There are times a brand has to say There are times a brand has to say nono to a to a
brand extension.brand extension.
Jack Buckner
-
12
Jack Buckner
The Virgin EmpireThe Virgin Empire
Richard Branson founded in 1972 Richard Branson founded in 1972 record shoprecord shop
Virgin airlines Virgin airlines 19841984
1986 went public, 1988 private1986 went public, 1988 private
midmid--19901990s s over 100 companiesover 100 companies
1997 1997 railwaysrailways
Virgin.com and telecommunications late 1990Virgin.com and telecommunications late 1990ss
1999 1999 sold 49% airlines to Singapore Airlinessold 49% airlines to Singapore Airlines
2000 2000 withdraws from clothingwithdraws from clothing
2002 2002 appoints first Brand Marketing directorappoints first Brand Marketing director
Jack Buckner
Virgin Brand ValuesVirgin Brand Values
Richard BransonRichard Branson
Have a goHave a go
Quality, fun, challenge, innovation, Quality, fun, challenge, innovation,
provocativeprovocative
Stylish, young, irreverentStylish, young, irreverent
-
13
Jack Buckner
Virgin Virgin
Successes Successes music, travel, hotelsmusic, travel, hotels
Failures Failures clothing, computersclothing, computers
For every Virgin Atlantic or Virgin music group For every Virgin Atlantic or Virgin music group there have been numerous failures.there have been numerous failures.
For a company so diversified, it is vulnerably For a company so diversified, it is vulnerably dependent on a single brand.dependent on a single brand.
I can do what I want.I can do what I want.
Virgin Direct Virgin Direct we are going to exist for 200 we are going to exist for 200 years and clearly Richard is not.years and clearly Richard is not.
Well, we would not launch a cigarette.Well, we would not launch a cigarette.
Jack Buckner
Brandstretch Brandstretch (David Taylor)(David Taylor)
Why 1 in 2 extensions fail, and how to beat the Why 1 in 2 extensions fail, and how to beat the
odds.odds.
Virgin: the biggest ever brand ego trip?Virgin: the biggest ever brand ego trip?
Strengthen the coreStrengthen the core
Vision, ideas, focus, deliveryVision, ideas, focus, delivery
Brand architectureBrand architecture
Heroes Heroes Gillette Mach 3, Gillette Mach 3, Bacardi BreezerBacardi Breezer, ,
Blockbuster, PampersBlockbuster, Pampers
Villains Villains Tango Tropical, LeviTango Tropical, Levis suits, s suits, easyGroupeasyGroup
-
14
Jack Buckner
Brand AlliancesBrand Alliances
Sony Sony SiemensSiemens
Star allianceStar alliance
McDonalds McDonalds Cadburys CrCadburys Crme Eggsme Eggs
IntelIntel
Movies / Video GamesMovies / Video Games
Jack Buckner
adidas / Cocaadidas / Coca--ColaCola
Strategic alliance proposalStrategic alliance proposal
Global brands Global brands
Collective marketing assetsCollective marketing assets
Similar target audiencesSimilar target audiences
-
15
Jack Buckner
adidas / Cocaadidas / Coca--ColaCola
A global adidas branded sports drinkA global adidas branded sports drink
adidas providesadidas provides
Sports credibilitySports credibility
Sports exposure and networkSports exposure and network
CocaCoca--Cola providesCola provides
Product expertiseProduct expertise
Global distributionGlobal distribution
Jack Buckner
adidas / Cocaadidas / Coca--ColaCola
Income potential for adidasIncome potential for adidas
But risk of brand dilution greater for adidasBut risk of brand dilution greater for adidas
CocaCoca--Cola brand equity and marketing Cola brand equity and marketing
capacity significantly greater than adidascapacity significantly greater than adidas
Budgets would dwarf adidas brandBudgets would dwarf adidas brands effortss efforts
Distribution issuesDistribution issues