LEVERAGING SECONDARY BRAND LEVERAGING SECONDARY BRAND KNOWLEDGE TO BUILD BRAND EQUITYKNOWLEDGE TO BUILD BRAND EQUITY

7.2

Figure 2-9 Building Customer-Based Brand EquityBRAND BUILDING TOOLS AND OBJECTIVES CONSUMER KNOWLEDGE EFFECTS BRANDING BENEFITS

Choosing Brand Elements

Brand name MemorabilityLogo MeaningfulnessSymbol AppealCharacter TransferabilityPackaging AdaptabilitySlogan Protectability

Developing Marketing Programs

Product Tangible and intangible benefitsPrice Value perceptionsDistribution channels Integrate”push” and “pull”Communications Mix and match options

Leverage of Secondary Associations

CompanyCountry of originChannel of distributionOther brandsEndorsorEvent

AwarenessMeaningfulnessTransferability

Possible Outcomes

Greater loyalty

Less vulnerability to competitive marketing actions and crises

Larger margins

More elastic response to price decreases

More inelastic response to price increases

Greater trade cooperation and support

Increased marketing communication efficiency and effectiveness

Possible licensing opportunities

More favorable brand extension evaluations

Brand Awareness

Depth

Breadth

RecallRecognition

PurchaseConsumption

Brand Associations

Strong

Favorable

Unique

RelevanceConsistency

DesirableDeliverable

Point-of-parityPoint-of-difference

7.3

Leveraging Secondary Leveraging Secondary AssociationsAssociations

Creation of new brand associationsCreation of new brand associations Effects on existing brand knowledgeEffects on existing brand knowledge

Awareness and knowledge of the entityAwareness and knowledge of the entity Meaningfulness of the knowledge of the Meaningfulness of the knowledge of the

entityentity Transferability of the knowledge of the Transferability of the knowledge of the

entityentity

7.4

Leveraging Secondary Leveraging Secondary AssociationsAssociations

Brand associations may themselves be linked to Brand associations may themselves be linked to other entities, creating secondary associations:other entities, creating secondary associations: Company (through branding strategies)Company (through branding strategies) Country of origin (through identification of product Country of origin (through identification of product

origin)origin) Channels of distribution (through channels strategy)Channels of distribution (through channels strategy) Other brands (through co-branding)Other brands (through co-branding)

Special case of co-branding is Special case of co-branding is ingredient brandingingredient branding Characters (through licensing)Characters (through licensing) Celebrity spokesperson (through endorsement Celebrity spokesperson (through endorsement

advertising)advertising) Events (through sponsorship)Events (through sponsorship) Other third-party sources (through awards and Other third-party sources (through awards and

reviews)reviews)

7.5

Co-BrandingCo-Branding

Occurs when two or more existing Occurs when two or more existing brands are combined into a joint brands are combined into a joint product or are marketed together in product or are marketed together in some fashionsome fashion

Examples:Examples: Sony EricssonSony Ericsson

7.6

Ingredient BrandingIngredient Branding A special case of co-branding that A special case of co-branding that

involves creating brand equity for involves creating brand equity for materials, components, or parts materials, components, or parts that are necessarily contained that are necessarily contained within other branded productswithin other branded products

Examples:Examples: Intel insideIntel inside

Carl Zeiss LensCarl Zeiss Lens

7.7

LicensingLicensing Involves contractual arrangements Involves contractual arrangements

whereby firms can use the names, whereby firms can use the names, logos, characters, and so forth of other logos, characters, and so forth of other brands for some fixed feebrands for some fixed fee

Examples:Examples: Entertainment (Star Wars, Jurassic Park, Entertainment (Star Wars, Jurassic Park,

etc.)etc.) Television and cartoon characters (The Television and cartoon characters (The

Simpsons)Simpsons) Designer apparel and accessories (Calvin Designer apparel and accessories (Calvin

Klein, Pierre Cardin, etc.)Klein, Pierre Cardin, etc.)

7.8

Celebrity EndorsementCelebrity Endorsement

Draws attention to the brandDraws attention to the brand Shapes the perceptions of the brandShapes the perceptions of the brand Celebrity should have a high level of Celebrity should have a high level of

visibility and a rich set of useful visibility and a rich set of useful associations, judgments, and associations, judgments, and feelingsfeelings

Q-Ratings to evaluate celebritiesQ-Ratings to evaluate celebrities

7.9

Sporting, Cultural, or Other Sporting, Cultural, or Other EventsEvents

Sponsored events can contribute to Sponsored events can contribute to brand equity by becoming associated brand equity by becoming associated to the brand and improving brand to the brand and improving brand awareness, adding new associations, awareness, adding new associations, or improving the strength, or improving the strength, favorability, and uniqueness of favorability, and uniqueness of existing associations. existing associations.

The main means by which an event The main means by which an event can transfer associations is credibility. can transfer associations is credibility.

8.10

DEVELOPING A BRAND EQUITY DEVELOPING A BRAND EQUITY MEASUREMENT AND MANAGEMENT MEASUREMENT AND MANAGEMENT

SYSTEMSYSTEM

8.11

The New AccountabilityThe New Accountability Virtually every marketing dollar spent Virtually every marketing dollar spent

today must be justified as both effective today must be justified as both effective and efficient in terms of “return of and efficient in terms of “return of marketing investment” (ROMI). marketing investment” (ROMI).

Some observers believe that up to 70% Some observers believe that up to 70% (or even more) of marketing (or even more) of marketing expenditures may be devoted to expenditures may be devoted to programs and activities that cannot be programs and activities that cannot be linked to short-term incremental profits, linked to short-term incremental profits, but yet can be seen as improving brand but yet can be seen as improving brand equity. equity.

8.12

The Brand Value ChainThe Brand Value Chain

Broader perspective than just the Broader perspective than just the CBBE model CBBE model

The brand value chain is a The brand value chain is a structured approach to assessing the structured approach to assessing the sources and outcomes of brand sources and outcomes of brand equity and the manner by which equity and the manner by which marketing activities create brand marketing activities create brand value. value.

Brand Value ChainBrand Value Chain

ProgramMultiplier

MarketingProgram

Investment

CustomerMindset

MarketPerformance

ShareholderValueVALUE

STAGES

- Product- Communications- Trade- Employee- Other

- Awareness- Associations- Attitudes- Attachment- Activity

- Price premiums- Price elasticity- Market share- Expansion success- Cost structure- Profitability

- Stock price- P/E ratio- Market capitalization

ConsumerMultiplierFILTERS

- Clarity- Relevance- Distinctiveness- Consistency

- Channel support- Consumer size and profile - Competitive reactions

- Market dynamics- Growth potential- Risk profile- Brand contribution

MarketMultiplier

8.14

Brand Equity Measurement Brand Equity Measurement SystemSystem

A set of research procedures that is A set of research procedures that is designed to provide timely, designed to provide timely, accurate, and actionable information accurate, and actionable information for marketers so that they can make for marketers so that they can make the best possible tactical decisions in the best possible tactical decisions in the short run and strategic decisions the short run and strategic decisions in the long runin the long run

8.15

Brand Equity Measurement Brand Equity Measurement SystemSystem

Conducting brand auditsConducting brand audits Developing tracking proceduresDeveloping tracking procedures Designing a brand equity Designing a brand equity

management systemmanagement system

8.16

Designing Brand Tracking Designing Brand Tracking StudiesStudies

Tracking studies involve information Tracking studies involve information collected from consumers on a collected from consumers on a routine basis over timeroutine basis over time Often done on a “continuous” basisOften done on a “continuous” basis

Provide descriptive and diagnostic Provide descriptive and diagnostic informationinformation

8.17

What to TrackWhat to Track

Customize tracking surveys to Customize tracking surveys to address the specific issues faced by address the specific issues faced by the brandthe brand

Product-brand trackingProduct-brand tracking Corporate or family brand trackingCorporate or family brand tracking Global trackingGlobal tracking

8.18

How to Conduct Tracking How to Conduct Tracking StudiesStudies

Who to track (target market)Who to track (target market) When and where to track (how When and where to track (how

frequently)frequently) How to interpret brand trackingHow to interpret brand tracking

8.19

Brand Equity Management Brand Equity Management SystemSystem

A A brand equity management systembrand equity management system is a set of organizational processes is a set of organizational processes designed to improve the designed to improve the understanding and use of the brand understanding and use of the brand equity concept within a firm:equity concept within a firm: Brand equity charterBrand equity charter Brand equity reportBrand equity report Brand equity responsibilitiesBrand equity responsibilities

8.20

Brand Equity CharterBrand Equity Charter

Provides general guidelines to Provides general guidelines to marketing managers within the marketing managers within the company as well as key marketing company as well as key marketing partners outside the companypartners outside the company

Should be updated annuallyShould be updated annually

8.21

Brand Equity Charter Brand Equity Charter ComponentsComponents

Define the firm’s view of the brand equityDefine the firm’s view of the brand equity Describe the scope of the key brandsDescribe the scope of the key brands Specify actual and desired equity for the brandSpecify actual and desired equity for the brand Explain how brand equity is measuredExplain how brand equity is measured Suggest how brand equity should be measuredSuggest how brand equity should be measured Outline how marketing programs should be Outline how marketing programs should be

deviseddevised Specify the proper treatment for the brand in Specify the proper treatment for the brand in

terms of trademark usage, packaging, and terms of trademark usage, packaging, and communicationcommunication

8.22

Brand Equity ReportBrand Equity Report

Assembles the results of the tracking Assembles the results of the tracking survey and other relevant survey and other relevant performance measuresperformance measures

To be developed monthly, quarterly, To be developed monthly, quarterly, or annuallyor annually

Provides descriptive information as Provides descriptive information as to what is happening with the brand to what is happening with the brand as well as diagnostic information on as well as diagnostic information on why it is happening why it is happening

8.23

Brand Equity Brand Equity ResponsibilitiesResponsibilities

Organizational responsibilities and Organizational responsibilities and processes that aim to maximize long-processes that aim to maximize long-term brand equityterm brand equity

Establish position of VP or Director of Equity Establish position of VP or Director of Equity Management to oversee implementation of Management to oversee implementation of Brand Equity Charter and ReportsBrand Equity Charter and Reports

Ensure that, as much as possible, Ensure that, as much as possible, marketing of the brand is done in a marketing of the brand is done in a way that reflects the spirit of the way that reflects the spirit of the charter and the substance of the reportcharter and the substance of the report

9.24

MEASURING SOURCES OF BRAND MEASURING SOURCES OF BRAND EQUITY: CAPURING CUSTOMER EQUITY: CAPURING CUSTOMER

MINDSETMINDSET

9.25

Qualitative Research Qualitative Research TechniquesTechniques

Free associationFree association What do you like best about the brand? What do you like best about the brand?

What are its positive aspects? What are its positive aspects? What do you dislike? What are its What do you dislike? What are its

disadvantages?disadvantages? What do you find unique about the What do you find unique about the

brand? How is it different from other brand? How is it different from other brands? In what ways is it the same?brands? In what ways is it the same?

9.26

Free AssociationsFree Associations

LEVI’S501

High quality, long lasting, and durable

Blue denim, shrink-to-fit cotton fabric, button-fly,

two-horse patch, and small red pocket tag

Feelings of self-confidenceand self-assurance

Comfortable fittingand relaxing to wear

Honest, classic,Contemporary, approachable,

independent, and universal

Appropriate for outdoorwork and casual social

situations

Western, American, blue collar, hard-working,

traditional, strong, rugged, and masculine

BENEFITS

ATTRIBUTES

Symbolic

Usage ImageryUser Imagery

Brand Personality

Functional

Product-Related

Experiential

9.27

Qualitative Research Qualitative Research TechniquesTechniques

Projective techniquesProjective techniques Diagnostic tools to uncover the true Diagnostic tools to uncover the true

opinions and feelings of consumers opinions and feelings of consumers when they are unwilling or otherwise when they are unwilling or otherwise unable to express themselves on these unable to express themselves on these matters matters

9.28

Projective TechniquesProjective Techniques

Consumers might feel that it would Consumers might feel that it would be socially unacceptable to express be socially unacceptable to express their true feelingstheir true feelings

Projective techniques are diagnostic Projective techniques are diagnostic tools to uncover the true opinions tools to uncover the true opinions and feelings of consumersand feelings of consumers

Examples:Examples: Completion and interpretation tasksCompletion and interpretation tasks Comparison tasksComparison tasks

9.29

Brand Personality and Brand Personality and ValuesValues

Brand personalityBrand personality refers to the human refers to the human characteristics or traits that can be characteristics or traits that can be attributed to a brand.attributed to a brand.

The Big FiveThe Big Five Sincerity (down-to-earth, wholesome, and Sincerity (down-to-earth, wholesome, and

cheerful)cheerful) Excitement (daring, spirited, imaginative, and Excitement (daring, spirited, imaginative, and

up-to-date)up-to-date) Competence (reliable, intelligent, and successful)Competence (reliable, intelligent, and successful) Sophistication (upper class and charming)Sophistication (upper class and charming) Ruggedness (outdoorsy and tough)Ruggedness (outdoorsy and tough)

Jennifer Aaker, 1997Jennifer Aaker, 1997

9.30

Experiential MethodsExperiential Methods By tapping more directly into their actual home, By tapping more directly into their actual home,

work, or shopping behaviors, researchers might work, or shopping behaviors, researchers might be able to elicit more meaningful responses from be able to elicit more meaningful responses from consumers. consumers.

Advocates of the experiential approach have sent Advocates of the experiential approach have sent researchers to consumers’ homes in the morning researchers to consumers’ homes in the morning to see how they approach their days, given to see how they approach their days, given business travelers Polaroid cameras and diaries business travelers Polaroid cameras and diaries to capture their feelings when in hotel rooms, and to capture their feelings when in hotel rooms, and conducted “beeper studies” in which participants conducted “beeper studies” in which participants are instructed to write down what they’re doing are instructed to write down what they’re doing when they are paged. when they are paged.

9.31

Quantitative Research Quantitative Research TechniquesTechniques

AwarenessAwareness ImageImage Brand responsesBrand responses Brand relationshipsBrand relationships

9.32

AwarenessAwareness

RecognitionRecognition Ability of consumers to identify the Ability of consumers to identify the

brand (and its elements) under various brand (and its elements) under various circumstancescircumstances

RecallRecall Ability of consumers to retrieve the Ability of consumers to retrieve the

actual brand elements from memoryactual brand elements from memory Unaided vs. aided recall Unaided vs. aided recall

9.33

AwarenessAwareness Corrections for guessing Corrections for guessing

Any research measure must consider the issue of Any research measure must consider the issue of consumers making up responses or guessing. consumers making up responses or guessing.

Strategic implications Strategic implications The advantage of aided recall measures is that they The advantage of aided recall measures is that they

yield insight into how brand knowledge is yield insight into how brand knowledge is organized in memory and what kind of cues or organized in memory and what kind of cues or reminders may be necessary for consumers to be reminders may be necessary for consumers to be able to retrieve the brand from memory. able to retrieve the brand from memory.

The important point to note is that the category The important point to note is that the category structure that exists in consumers’ minds—as structure that exists in consumers’ minds—as reflected by brand recall performance—can have reflected by brand recall performance—can have profound implications for consumer choice and profound implications for consumer choice and marketing strategy. marketing strategy.

9.34

ImageImage

Ask open-ended questions to tap Ask open-ended questions to tap into the strength, favorability, and into the strength, favorability, and uniqueness of brand associations.uniqueness of brand associations.

These associations should be rated These associations should be rated on scales for quantitative analysis.on scales for quantitative analysis.

9.35

Brand ResponsesBrand Responses

Research in psychology suggests that Research in psychology suggests that purchase intentions are most likely to be purchase intentions are most likely to be predictive of actual purchase when there is predictive of actual purchase when there is correspondence between the two in the correspondence between the two in the following categories:following categories:

Purchase IntentionsPurchase Intentions Action (buying for own use or to give as a gift)Action (buying for own use or to give as a gift) Target (specific type of product and brand)Target (specific type of product and brand) Context (in what type of store based on what Context (in what type of store based on what

prices and other conditions)prices and other conditions) Time (within a week, month, or year)Time (within a week, month, or year)

9.36

Comprehensive Models of Comprehensive Models of Customer-Based Brand Customer-Based Brand

EquityEquity Brand dynamics Brand dynamics Equity enginesEquity engines

9.37

Brand DynamicsBrand Dynamics

The Brand Dynamics model adopts a The Brand Dynamics model adopts a hierarchical approach to determine hierarchical approach to determine the strength of relationship a the strength of relationship a consumer has with a brand. consumer has with a brand.

The five levels of the model are:The five levels of the model are: PresencePresence Relevance Relevance PerformancePerformance AdvantageAdvantage Bonding Bonding

9.38

Equity EnginesEquity Engines

This model delineates three key dimensions This model delineates three key dimensions of brand affinityof brand affinity——the emotional and the emotional and intangible benefits of a brandintangible benefits of a brand——as follows:as follows: Authority:Authority: The reputation of a brand, whether as The reputation of a brand, whether as

a long-standing leader or as a pioneer in a long-standing leader or as a pioneer in innovation innovation

Identification:Identification: The closeness customers feel for a The closeness customers feel for a brand and how well they feel the brand matches brand and how well they feel the brand matches their personal needs their personal needs

Approval:Approval: The way a brand fits into the wider The way a brand fits into the wider social matrix and the intangible status it holds social matrix and the intangible status it holds for experts and friendsfor experts and friends

9.39

Four Primary Four Primary AspectsAspects

How Brands Are BuiltHow Brands Are Built

KnowledgeKnowledge• The culmination of brand building efforts; acquisition of consumer experience

EsteemEsteem • Consumer respect, regard, reputation; afulfillment of perceived consumer promise

RelevanceRelevance• Relates to usage and subsumes the five Ps of marketing; relates to sale

DifferentiationDifferentiation• The basis for consumer choice; the essence of the brand, source of margin

9.40

Room to grow... Brand has power to build relevance.

D > R

0

10

20

30

40

50

60

70

80

90

100

DifferentiationRelevance

Healthy Brands Have Healthy Brands Have Greater Differentiation Greater Differentiation

than Relevancethan Relevance

Examples:

Harley DavidsonYahoo!AOLWilliams-SonomaIkeaBloomberg Business News

9.41

R > D

0

10

20

30

40

50

60

70

80

90

100

DifferentiationRelevance

Uniqueness has faded; price becomes dominant reason to buy.

Brands with greater Relevance than Brands with greater Relevance than Differentiation Are in Danger of Differentiation Are in Danger of

Becoming CommoditiesBecoming Commodities

Examples:

ExxonMott’sMcDonald’sCrestMinute MaidFruit of the LoomPeter Pan (peanut butter)

9.42

E > K

0

10

20

30

40

50

60

70

80

90

100

Esteem Knowledge

Brand is better liked than known.

More Esteem than Knowledge More Esteem than Knowledge Means, “I’d like to get to know you Means, “I’d like to get to know you

better”better”

Examples:

Coach leatherwearTag HeuerCalphalonMovadoBlaupunktPella WindowsPalm PilotTechnics

9.43

K > E

0

10

20

30

40

50

60

70

80

90

100

Esteem Knowledge

Brand is better known than liked.

Too Much Knowledge Can Be Dangerous:Too Much Knowledge Can Be Dangerous:

“I know you and you’re nothing special”“I know you and you’re nothing special”

Examples: PlymouthTV GuideSpamWoolworthsChryslerMaxwell HouseNational EnquirerSanka

11.44

DESIGNING AND IMPLEMENTING DESIGNING AND IMPLEMENTING BRANDING STRATEGIESBRANDING STRATEGIES

11.45

Branding strategyBranding strategy Branding strategy is critical because it Branding strategy is critical because it

is the means by which the firm can help is the means by which the firm can help consumers understand its products and consumers understand its products and services and organize them in their services and organize them in their minds. minds.

Two important strategic tools: The Two important strategic tools: The brand-product matrixbrand-product matrix and the and the brand brand hierarchyhierarchy help to characterize and help to characterize and formulate branding strategies by formulate branding strategies by defining various relationships among defining various relationships among brands and products. brands and products.

11.46

The role of Brand The role of Brand ArchitectureArchitecture

Clarify: brand awareness Clarify: brand awareness Improve consumer understanding and Improve consumer understanding and

communicate similarity and differences communicate similarity and differences between individual products between individual products

Motivate: brand image Motivate: brand image Maximize transfer of equity to/from the Maximize transfer of equity to/from the

brand to individual products to improve brand to individual products to improve trial and repeat purchase trial and repeat purchase

11.47

Brand-Product MatrixBrand-Product Matrix

Must define:Must define: Brand-Product relationships (rows)Brand-Product relationships (rows)

Line and category extensionsLine and category extensions Product-Brand relationships (columns)Product-Brand relationships (columns)

Brand portfolioBrand portfolio

1 2 3 4

A

B

C

Products

Brands

11.48

Important DefinitionsImportant Definitions Product lineProduct line

A group pf products within a product A group pf products within a product category that are closely relatedcategory that are closely related

Product mix (product assortment)Product mix (product assortment) The set of all product lines and items that The set of all product lines and items that

a particular seller makes available to a particular seller makes available to buyersbuyers

Brand mix (brand assortment)Brand mix (brand assortment) The set of all brand lines that a particular The set of all brand lines that a particular

seller makes available to buyersseller makes available to buyers

11.49

Depth of a Branding Depth of a Branding StrategyStrategy

The number and nature of different The number and nature of different brands marketed in the product brands marketed in the product class sold by a firmclass sold by a firm

Referred to as Referred to as brand portfoliobrand portfolio The reason is to pursue different The reason is to pursue different

market segments, different channels market segments, different channels of distribution, or different of distribution, or different geographic boundariesgeographic boundaries

Maximize market coverage and Maximize market coverage and minimize brand overlapminimize brand overlap

11.50

Designing a Brand Designing a Brand PortfolioPortfolio

Basic principles:Basic principles: Maximize market coverageMaximize market coverage so that no so that no

potential customers are being ignoredpotential customers are being ignored Minimize brand overlapMinimize brand overlap so that brands so that brands

aren’t competing among themselves to aren’t competing among themselves to gain the same customer’s approval gain the same customer’s approval

11.51

Brand Roles in the PortfolioBrand Roles in the Portfolio FlankersFlankers Cash cowsCash cows Low-end entry-levelLow-end entry-level High-end prestige brandsHigh-end prestige brands

11.52

Brand HierarchyBrand Hierarchy A means of summarizing the A means of summarizing the

branding strategy by displaying the branding strategy by displaying the number and nature of common and number and nature of common and distinctive brand elements across distinctive brand elements across the firm’s products, revealing the the firm’s products, revealing the explicit ordering of brand elementsexplicit ordering of brand elements

A useful means of graphically A useful means of graphically portraying a firm’s branding portraying a firm’s branding strategy strategy

11.53

Brand Hierarchy Tree: Brand Hierarchy Tree: ToyotaToyota

Toyota Corporation

Toyota(Trucks)

Toyota(SUV/vans)

LexusToyotaFinancialServices

Toyota(Cars)

Corolla PriusAvalon Celica ECHO MatrixMR2

SpyderCamry

CESLE

SELEXLE

Platinum EditionXLXLS

SESLE

11.54

Number of Hierarchy LevelsNumber of Hierarchy Levels Principle of simplicityPrinciple of simplicity

Employ as few levels as possibleEmploy as few levels as possible Principle of clarityPrinciple of clarity

Logic and relationship of all brand Logic and relationship of all brand elements employed must be obvious elements employed must be obvious and transparentand transparent

11.55

Corporate Brand Corporate Brand CampaignCampaign

Different objectives are possible:Different objectives are possible: Build awareness of the company and the nature of Build awareness of the company and the nature of

its businessits business Create favorable attitudes and perceptions of Create favorable attitudes and perceptions of

company credibilitycompany credibility Link beliefs that can be leveraged by product-Link beliefs that can be leveraged by product-

specific marketingspecific marketing Make a favorable impression on the financial Make a favorable impression on the financial

communitycommunity Motivate present employees and attract better Motivate present employees and attract better

recruitsrecruits Influence public opinion on issues Influence public opinion on issues

12.56

INTRODUCING AND NAMING NEW INTRODUCING AND NAMING NEW PRODUCTS AND BRAND EXTENSIONSPRODUCTS AND BRAND EXTENSIONS

12.57

Leverage the BrandLeverage the Brand

Firms are seeking to build “power” Firms are seeking to build “power” or “mega” brands that establish a or “mega” brands that establish a broad market footprint, appealing to broad market footprint, appealing to multiple customer segments with multiple customer segments with multiple products all underneath multiple products all underneath the brand umbrella. the brand umbrella.

12.58

Ansoff’s Growth Share Ansoff’s Growth Share MatrixMatrixCurrentCurrent

ProductsProductsNewNew

ProductsProducts

CurrentCurrent

MarketsMarkets

Market Market penetration penetration

strategystrategy

Product Product development development

strategystrategy

NewNew

MarketsMarkets

Market Market development development

strategystrategy

DiversificatioDiversification strategyn strategy

12.59

Brand ExtensionsBrand Extensions When a firm uses an established When a firm uses an established

brand name to introduce a new brand name to introduce a new productproduct

Brand extension classificationBrand extension classification Line extensionLine extension

Using a sub-brand to target a new market Using a sub-brand to target a new market segment within the same product categorysegment within the same product category

Category extensionCategory extension Using the parent brand in a different Using the parent brand in a different

product categoryproduct category

12.60

Advantages of ExtensionsAdvantages of Extensions Facilitate new product acceptanceFacilitate new product acceptance

Improve brand imageImprove brand image Reduce risk perceived by customersReduce risk perceived by customers Increase the probability of gaining distribution Increase the probability of gaining distribution

and trialand trial Increase efficiency of promotional expendituresIncrease efficiency of promotional expenditures Reduce costs of introductory and follow-up Reduce costs of introductory and follow-up

marketing programsmarketing programs Avoid cost of developing a new brandAvoid cost of developing a new brand Allow for packaging and labeling efficienciesAllow for packaging and labeling efficiencies Permit consumer variety seekingPermit consumer variety seeking

12.61

Advantages of Extensions Advantages of Extensions (Cont.)(Cont.)

Provide feedback benefits to parent Provide feedback benefits to parent brandbrand Clarify brand meaningClarify brand meaning Enhance the parent brand imageEnhance the parent brand image Bring new customers into brand Bring new customers into brand

franchise and increase market coveragefranchise and increase market coverage Revitalize the brandRevitalize the brand Permit subsequent extensionsPermit subsequent extensions

12.62

Disadvantages of Disadvantages of ExtensionsExtensions

Can confuse or frustrate consumersCan confuse or frustrate consumers Can encounter retailer resistanceCan encounter retailer resistance Can fail and hurt parent brand imageCan fail and hurt parent brand image Can succeed but cannibalize sales of parent Can succeed but cannibalize sales of parent

brandbrand Can succeed but diminish identification with Can succeed but diminish identification with

any one categoryany one category Can succeed but hurt the image of the parent Can succeed but hurt the image of the parent

brandbrand Can dilute brand meaningCan dilute brand meaning Can cause the company to forgo the chance to Can cause the company to forgo the chance to

develop a new branddevelop a new brand

12.63

Successful ExtensionsSuccessful Extensions

Must create points-of-parity and Must create points-of-parity and points-of-difference in extension points-of-difference in extension categorycategory Must recognize competitive reactionsMust recognize competitive reactions

Must enhance points-of-parity and Must enhance points-of-parity and points-of-difference of parent brandpoints-of-difference of parent brand

Must maximize the advantages and Must maximize the advantages and minimize the disadvantages of minimize the disadvantages of brand extensionsbrand extensions

12.64

When are brand extensions When are brand extensions appropriate?appropriate?

If they see some basis of “fit” or If they see some basis of “fit” or similarity between the proposed similarity between the proposed extension and parent brandextension and parent brand

The major mistake in evaluating The major mistake in evaluating extension opportunities is failing to extension opportunities is failing to take all of consumers’ brand take all of consumers’ brand knowledge structures into account.knowledge structures into account.

Often, marketers mistakenly focus on Often, marketers mistakenly focus on only one brand association and ignore only one brand association and ignore other potentially important brand other potentially important brand associations in the process.associations in the process.

13.65

MANAGING BRANDS OVER TIMEMANAGING BRANDS OVER TIME

13.66

Reinforcing BrandsReinforcing Brands

Generally, we reinforce brand equity Generally, we reinforce brand equity by marketing actions that by marketing actions that consistently convey the meaning of consistently convey the meaning of the brand to consumers in terms of the brand to consumers in terms of brand awareness and brand image. brand awareness and brand image.

13.67

Managing Brands over Managing Brands over TimeTime

Effective brand management requires Effective brand management requires taking a long-term view of marketing taking a long-term view of marketing decisionsdecisions Any action that a firm takes as part of its Any action that a firm takes as part of its

marketing program has the potential to marketing program has the potential to change consumer knowledge about the change consumer knowledge about the brand.brand.

These changes in consumer brand These changes in consumer brand knowledge from current marketing activity knowledge from current marketing activity also will have an indirect effect on the also will have an indirect effect on the success of success of futurefuture marketing activities. marketing activities.

13.68

Consumer response to past marketing activities

Consumer response to future marketing activities

Consumer response to current marketing activities

Brand awareness and brand image

Changed brand awareness and brand image

13.69

Entering New MarketsEntering New Markets

One strategic option for revitalizing One strategic option for revitalizing a fading brand is simply to more a fading brand is simply to more or less abandon the consumer group or less abandon the consumer group that supported the brand in the past that supported the brand in the past to target a completely new market to target a completely new market segment. segment.

13.70

Adjustments to Brand Adjustments to Brand PortfolioPortfolio

Migration strategiesMigration strategies A corporate or family branding strategy in which A corporate or family branding strategy in which

brands are ordered in a logical manner could provide brands are ordered in a logical manner could provide the hierarchical structure in consumers’ minds to the hierarchical structure in consumers’ minds to facilitate brand migration. facilitate brand migration.

Example: BMW with its 3-, 5-, and 7-series numbering Example: BMW with its 3-, 5-, and 7-series numbering systems systems

Acquiring new customersAcquiring new customers Tradeoffs in their marketing efforts between attracting Tradeoffs in their marketing efforts between attracting

new customers and retaining existing onesnew customers and retaining existing ones Firms must proactively develop strategies to attract Firms must proactively develop strategies to attract

new customers, especially younger ones. new customers, especially younger ones. Retiring brandsRetiring brands

14.71

MANAGING BRANDS OVER MANAGING BRANDS OVER GEOGRAPHIC BOUNDARIES AND GEOGRAPHIC BOUNDARIES AND

MARKET SEGMENTSMARKET SEGMENTS

14.72

Regional Market SegmentsRegional Market Segments Regionalization is an important recent Regionalization is an important recent

trend that, perhaps on the surface, seems trend that, perhaps on the surface, seems to run counter to globalization. to run counter to globalization.

Reasons for regional marketingReasons for regional marketing Need for more focused targeting Need for more focused targeting The shift from national advertising to sales The shift from national advertising to sales

promotionspromotions DrawbacksDrawbacks

Production headachesProduction headaches Marketing efficiency may suffer and costs may Marketing efficiency may suffer and costs may

rise rise

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Rationale for Going Rationale for Going InternationalInternational

Perception of slow growth and increased Perception of slow growth and increased competition in domestic marketscompetition in domestic markets

Belief in enhanced overseas growth and Belief in enhanced overseas growth and profit opportunitiesprofit opportunities

Desire to reduce costs from economies Desire to reduce costs from economies of scaleof scale

Need to diversify riskNeed to diversify risk Recognition of global mobility of Recognition of global mobility of

customerscustomers

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Advantages of Advantages of Global Marketing ProgramsGlobal Marketing Programs

Economies of scale in production and Economies of scale in production and distributiondistribution

Lower marketing costsLower marketing costs Power and scopePower and scope Consistency in brand imageConsistency in brand image Ability to leverage good ideas quickly Ability to leverage good ideas quickly

and efficientlyand efficiently Uniformity of marketing practicesUniformity of marketing practices

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Disadvantages of Disadvantages of Global Marketing ProgramsGlobal Marketing Programs

Differences in consumer needs, wants, Differences in consumer needs, wants, and usage patterns for productsand usage patterns for products

Differences in brand and product Differences in brand and product development and the competitive development and the competitive environmentenvironment

Differences in the legal environmentDifferences in the legal environment Differences in marketing institutionsDifferences in marketing institutions Differences in administrative Differences in administrative

proceduresprocedures

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Standardization vs. Standardization vs. CustomizationCustomization

According to Levitt, because the world According to Levitt, because the world is shrinking—due to leaps in is shrinking—due to leaps in technology, communication, and so technology, communication, and so forth—well-managed companies forth—well-managed companies should shift their emphasis from should shift their emphasis from customizing items to offering globally customizing items to offering globally standardized products that are standardized products that are advanced, functional, reliable, and low advanced, functional, reliable, and low priced for all.priced for all.

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Standardization vs. Standardization vs. CustomizationCustomization

Blending global objectives with local Blending global objectives with local or regional concernsor regional concerns

““Think global. Act local.”Think global. Act local.” A global brand has a clear consistent A global brand has a clear consistent

equity across geographies: same equity across geographies: same positioning, same benefits plus local positioning, same benefits plus local tailoring if neededtailoring if needed

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Global Brand StrategyGlobal Brand Strategy

To build brand equity, it is often necessary to To build brand equity, it is often necessary to create create

different marketing programs to address different different marketing programs to address different market market

segments.segments. Identify differences in consumer behaviorIdentify differences in consumer behavior

How they purchase and use productsHow they purchase and use products What they know and feel about brandsWhat they know and feel about brands

Adjust branding programAdjust branding program Choice of brand elementsChoice of brand elements Nature of supporting marketing programNature of supporting marketing program Leverage of secondary associationsLeverage of secondary associations

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Building a Global BrandBuilding a Global Brand

How valid is the mental map in the How valid is the mental map in the new market? new market? What is the level of awareness? What is the level of awareness? How valuable are the associations?How valuable are the associations?

What changes need to be made to the What changes need to be made to the mental map?mental map?

By what means should this new By what means should this new mental map be created? mental map be created?

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Global Customer-Based Global Customer-Based Brand EquityBrand Equity

To build customer-based brand equity, To build customer-based brand equity, marketers must:marketers must:

1.1. Establish breadth and depth of brand Establish breadth and depth of brand awareness awareness

2.2. Create points-of-parity and points-of-difference Create points-of-parity and points-of-difference

3.3. Elicit positive, accessible brand responses Elicit positive, accessible brand responses

4.4. Forge intense, active brand relationships Forge intense, active brand relationships Achieving these four steps, in turn, Achieving these four steps, in turn,

requires establishing six core brand requires establishing six core brand building blocks. building blocks.

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Core Brand Building Core Brand Building BlocksBlocks

Creating brand salienceCreating brand salience Developing brand performanceDeveloping brand performance Crafting brand imageCrafting brand image Eliciting brand responses. Example: Eliciting brand responses. Example:

positive brand judgmentspositive brand judgments Creating brand feelingsCreating brand feelings Cultivating resonanceCultivating resonance

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Questions for Global Questions for Global Branding PositioningBranding Positioning

How valid is the mental map in the new How valid is the mental map in the new market? How appropriate is the positioning? market? How appropriate is the positioning? What is the existing level of awareness? How What is the existing level of awareness? How valuable are the core brand associations, valuable are the core brand associations, points-of-parity, and points-of-difference?points-of-parity, and points-of-difference?

What changes should we make to the What changes should we make to the positioning? Do we need to create any new positioning? Do we need to create any new associations? Should we associations? Should we notnot re-create any re-create any existing associations? Should we modify any existing associations? Should we modify any existing associations?existing associations?

How should we create this new mental map? How should we create this new mental map? Can we still use the same marketing activities? Can we still use the same marketing activities? What changes should we make? What new What changes should we make? What new marketing activities are necessary?marketing activities are necessary?

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Building Global Customer-Building Global Customer-Based Brand EquityBased Brand Equity

In designing and implementing a In designing and implementing a marketing program to create a marketing program to create a strong global brand, marketers want strong global brand, marketers want to realize the advantages of a global to realize the advantages of a global marketing program while suffering marketing program while suffering as few of its disadvantages as as few of its disadvantages as possible possible

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Ten Commandments of Global Ten Commandments of Global BrandingBranding

1.1. Understand similarities and differences in the global Understand similarities and differences in the global branding landscapebranding landscape

2.2. Don’t take shortcuts in brand buildingDon’t take shortcuts in brand building3.3. Establish marketing infrastructureEstablish marketing infrastructure4.4. Embrace integrated marketing communicationsEmbrace integrated marketing communications5.5. Cultivate brand partnershipsCultivate brand partnerships6.6. Balance standardization and customizationBalance standardization and customization7.7. Balance global and local controlBalance global and local control8.8. Define operable guidelinesDefine operable guidelines9.9. Implement a global brand equity measurement systemImplement a global brand equity measurement system

10.10. Leverage brand elementsLeverage brand elements

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ENCAPSULATE BRANDINGENCAPSULATE BRANDING

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Brand Knowledge StructureBrand Knowledge Structure

Brand awareness, depth, and breadth

Brand associations

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Summary of Customer-Summary of Customer-Based Brand Equity Based Brand Equity

FrameworkFramework Sources of brand equitySources of brand equity StrengthStrength Favorability Favorability UniquenessUniqueness

Outcomes of brand equityOutcomes of brand equity Greater loyaltyGreater loyalty Less vulnerability to competitive marketing actionsLess vulnerability to competitive marketing actions Less vulnerability to marketing crisesLess vulnerability to marketing crises Larger marginsLarger margins More inelastic consumer response to price increasesMore inelastic consumer response to price increases More elastic consumer response to price decreasesMore elastic consumer response to price decreases Greater trade cooperation and supportGreater trade cooperation and support Increased marketing communication effectivenessIncreased marketing communication effectiveness Possible licensing opportunitiesPossible licensing opportunities Additional brand extension opportunitiesAdditional brand extension opportunities

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Tactical GuidelinesTactical Guidelines

Building brand equityBuilding brand equity1.1. Through the initial choice of the brand Through the initial choice of the brand

elements making up the brand elements making up the brand

2.2. Through marketing activities and the Through marketing activities and the design of the marketing program design of the marketing program

3.3. Through the leverage of secondary Through the leverage of secondary associations that link the brand to associations that link the brand to other entitiesother entities

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Guidelines for Building Brand Guidelines for Building Brand EquityEquity

Mix and match brand elements Create a rich brand image and high

perceived quality Adopt value-based pricing strategy Consider a range of distribution

options Mix marketing communication

options Leverage secondary associations

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Importance of Importance of Complementarity and Complementarity and

ConsistencyConsistency

CComplementarityomplementarity means choosing different means choosing different brand elements and supporting marketing brand elements and supporting marketing activities so that the potential contribution activities so that the potential contribution to brand equity of one compensates for the to brand equity of one compensates for the shortcomings of others. shortcomings of others.

A high degree of A high degree of consistencyconsistency across these across these elements helps to create the highest level elements helps to create the highest level of awareness and the strongest and most of awareness and the strongest and most favorable associations possible. favorable associations possible.

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Guidelines for Measuring Guidelines for Measuring Brand EquityBrand Equity

Formalize the firm’s view of brand equity

Conduct brand inventories Conduct consumer tracking studies Assemble results of outcome

measures Establish a department to oversee

the implementation

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Guidelines for Managing Guidelines for Managing Brand EquityBrand Equity

Define brand hierarchy Create global associations Introduce brand extensions Clearly establish the roles of brands

in the portfolio Reinforce brand equity over time Enhance brand equity over time Identify differences in consumer

behavior in different market segments

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Characteristics of Strong Characteristics of Strong Brands ManagersBrands Managers

Understand brand meaning and market appropriate Understand brand meaning and market appropriate products in an appropriate mannerproducts in an appropriate manner

Properly position the brandProperly position the brand Provide superior delivery of desired benefitsProvide superior delivery of desired benefits Employ a full range of complementary brand elements Employ a full range of complementary brand elements

and supporting marketing activitiesand supporting marketing activities Embrace integrated marketing communications and Embrace integrated marketing communications and

communicate with a consistent voicecommunicate with a consistent voice Measure consumer perceptions of value and develop a Measure consumer perceptions of value and develop a

pricing strategy accordinglypricing strategy accordingly Establish credibility and appropriate brand personality Establish credibility and appropriate brand personality

and imageryand imagery Maintain innovation and relevance for the brandMaintain innovation and relevance for the brand Strategically design and implement a brand hierarchy and Strategically design and implement a brand hierarchy and

brand portfoliobrand portfolio Implement a brand equity management system to ensure Implement a brand equity management system to ensure

that marketing actions properly reflect the brand equity that marketing actions properly reflect the brand equity conceptconcept

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Seven Deadly Sins of Brand Seven Deadly Sins of Brand ManagementManagement

1.1. Failure to understand the full meaning Failure to understand the full meaning of the brandof the brand

2.2. Failure to live up to the brand promiseFailure to live up to the brand promise3.3. Failure to adequately support the brandFailure to adequately support the brand4.4. Failure to be patient with the brandFailure to be patient with the brand5.5. Failure to adequately control the brandFailure to adequately control the brand6.6. Failure to properly balance consistency Failure to properly balance consistency

and change with the brandand change with the brand7.7. Failure to understand complexity of Failure to understand complexity of

brand equity measurement and brand equity measurement and managementmanagement

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Industrial and B2B Industrial and B2B BrandingBranding

Adopt a corporate or family branding Adopt a corporate or family branding strategystrategy

Link non-product-related imagery Link non-product-related imagery associationsassociations

Employ full range of marketing Employ full range of marketing communication optionscommunication options

Leverage equity of other companies that Leverage equity of other companies that are customersare customers

Segment markets carefully and develop Segment markets carefully and develop tailored branding and marketing tailored branding and marketing programsprograms

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Guidelines for High-Tech Guidelines for High-Tech BrandingBranding

Establish brand awareness and rich Establish brand awareness and rich brand imagebrand image

Create corporate credibility Create corporate credibility associationsassociations

Leverage secondary associations of Leverage secondary associations of qualityquality

Avoid overbranding productsAvoid overbranding products Selectively introduce new products as Selectively introduce new products as

new brands and clearly identify the new brands and clearly identify the nature of brand extensions nature of brand extensions

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Guidelines for Service Guidelines for Service BrandingBranding

Maximize service qualityMaximize service quality Employ a full range of brand elements to Employ a full range of brand elements to

enhance brand recallenhance brand recall Create and communicate strong Create and communicate strong

organizational associationsorganizational associations Design corporate communication programs Design corporate communication programs

that augment consumers’ service encounters that augment consumers’ service encounters and experiencesand experiences

Establish a brand hierarchy using distinct Establish a brand hierarchy using distinct family or individual brands as well as family or individual brands as well as meaningful ingredient brandsmeaningful ingredient brands

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Guidelines for Branding Guidelines for Branding RetailersRetailers

Create a brand hierarchy consisting of Create a brand hierarchy consisting of the store as a whole as well as the store as a whole as well as individual departmentsindividual departments

Enhance the manufacturer’s brand Enhance the manufacturer’s brand equity by communicating PODsequity by communicating PODs

Establish brand equity at all levels of Establish brand equity at all levels of the brand hierarchythe brand hierarchy

Create multichannel shopping Create multichannel shopping experienceexperience

Avoid overbrandingAvoid overbranding

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Guidelines for Small Business Guidelines for Small Business BrandingBranding

Emphasize building one or two strong Emphasize building one or two strong brandsbrands

Focus the marketing program on one or Focus the marketing program on one or two key associationstwo key associations

Employ a well-integrated set of brand Employ a well-integrated set of brand elements that enhances both brand elements that enhances both brand awareness and imageawareness and image

Design creative brand-building push Design creative brand-building push campaignscampaigns

Leverage as many secondary associations Leverage as many secondary associations as possibleas possible

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Guidelines for Online Guidelines for Online BrandingBranding

Don’t forget the brand building Don’t forget the brand building basicsbasics

Create strong brand identityCreate strong brand identity Generate strong consumer pullGenerate strong consumer pull Selectively choose brand Selectively choose brand

partnershipspartnerships Maximize relationship marketingMaximize relationship marketing

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Future Brand PrioritiesFuture Brand Priorities

How will branding change in the How will branding change in the coming years? What are the biggest coming years? What are the biggest branding challenges? What will branding challenges? What will make a successful “twenty-first-make a successful “twenty-first-century brand”? century brand”?

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Building Brand EquityBuilding Brand Equity Brand elementsBrand elements

In a cluttered, competitive marketplace, the In a cluttered, competitive marketplace, the brand elements that make up the brand will brand elements that make up the brand will have to do more and more of the selling job. have to do more and more of the selling job.

Marketing programsMarketing programs Strong brands in the twenty-first century Strong brands in the twenty-first century

also will rise above others by better also will rise above others by better understanding the needs, wants, and understanding the needs, wants, and desires of consumers and creating desires of consumers and creating marketing programs that fulfill and even marketing programs that fulfill and even surpass consumer expectations. surpass consumer expectations.

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Measuring Brand EquityMeasuring Brand Equity

Marketers of successful twenty-first-Marketers of successful twenty-first-century brands will create century brands will create formalized measurement approaches formalized measurement approaches and processes that ensure they and processes that ensure they continually monitor their sources of continually monitor their sources of brand equity and those of brand equity and those of competitors. competitors.

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Managing Brand EquityManaging Brand Equity It will be essential in building strong It will be essential in building strong

twenty-first-century brands to align twenty-first-century brands to align internal and external brand management. internal and external brand management. Internal brand management Internal brand management ensures that ensures that

employees and marketing partners appreciate employees and marketing partners appreciate and understand basic branding notions and and understand basic branding notions and how they can affect the equity of brands. how they can affect the equity of brands.

External brand managementExternal brand management requires requires understanding the needs, wants, and desires understanding the needs, wants, and desires of consumers and creating brand marketing of consumers and creating brand marketing programs that fulfill and even surpass programs that fulfill and even surpass consumer expectations. consumer expectations.

Companies must also align bottom-up and Companies must also align bottom-up and top-down marketing management .top-down marketing management .

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Achieving Marketing Achieving Marketing BalanceBalance

The most fundamental challenge of The most fundamental challenge of marketing and brand management is marketing and brand management is reconciling the many potential trade-offs reconciling the many potential trade-offs in marketing decisions in marketing decisions

There are three means or levels of There are three means or levels of achieving marketing balance, in achieving marketing balance, in increasing order of potential increasing order of potential effectiveness:effectiveness: Alternate Alternate Divide Divide Finesse Finesse