9-1 topic: 7 strategic brand management dr. ehsanul huda chowdhury course: strategic marketing...
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Topic: 7
Strategic BrandManagement
Dr. Ehsanul Huda Chowdhury
Course: Strategic MarketingBatch: 17 thBBA Program
IBADhaka University
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A product is anything that is potentially valued by a target market for the benefits or satisfaction it provides, including objects, services, organizations, places, people, and ideas
CHALLENGES IN BUILDING STRONG
BRANDS
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A brand is a name, term, sign, symbol, or design, or combination of them, intended to identify the goods or services of one seller or group of sellers, and to differentiate them from those of competitors.
American Marketing Association
Goods Versus Services
Services are intangibleconsumed at the time they
are produced, often linked to the people who produce the
services.** Leonard Berry, “Services are Different,” Business, May-Jun 1980, 24-30.
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Strategic Role of BrandsA strategic brand perspective
requires managers to be clear about what role brands play for the company in creating customer value and share-holder value.
FOR BUYERS, BRANDS CAN:• reduce customer search costs by identifying products quickly and accurately,
• reduce the buyer’s perceived risk by providing an assurance of quality and consistency (which may then be transferred to new products),
• reduce the social and psychological risks associated with owning and using the “wrong” product by providing psychological rewards for purchasing brands that symbolize status and prestige.
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FOR SELLERS, BRANDS CAN FACILITATE:• repeat purchases that enhance the company’s financial performance because the brand enables the customer to identify and re-identify the product compared to alternatives,
• the introduction of new products, because the customer is familiar with the brand from previous buying experience,
• promotional effectiveness by providing a point of focus,
• premium pricing by creating a basic level of differentiation compared to competitors,
• market segmentation by communicating a coherent message to the target audience, telling them for whom the brand is intended and for whom it is not,
• brand loyalty, of particular importance in product categories where loyal buying is an important feature of buying behavior.
Source: Marketing Science Institute Report No. 97422, 1997
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Brand Management Challenges*
Internal and external forces create hurdles for product brand managers in their brand building initiatives:Intense Price and Other
Competitive Pressures
Fragmentation of Markets and Media
Complex Brand Strategies and Relationships
Bias Against Innovation
Pressure to Invest Elsewhere
Short-Term Pressures*David A. Aaker, Building Strong Brands, 1996, 26-35.
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TM 5-1
Product/Brand Management Planning, managing, and
coordinating the strategy for a specific product or brand
Product Group/Marketing Management
Product director, group manager, or marketing manager
Product Portfolio Management
Chief executive at SBU Team of top executives
Responsibility for Managing Products
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TM 5-1
Marketing’s Role in Product Strategy
1.Market sensing
2.Identifying the characteristics and performance features of products
3.Guiding target market and program-positioning strategies
Strategic brand management decisions are relevant to all businesses, including suppliers, producers, wholesalers, distributors, and retailers.
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Strategic Brand Management
Brand Identity
Identity Implementation
Brand Strategy Over Time
Managing the Brand Portfolio
Leveraging the Brand
Brand Equity
Strategic Brand Analysis
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Tracking Product Performance
Set Performance Objectives
Select Method(s) for Product Evaluation
Identify Problem Products
Decide How to Eliminate the Problems
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Analyzing Brand
Performance
Product life cycleanalysis
Financialanalysis
Product grid analysis
Researchstudies
Standardizedinformation
services
BrandPositioning
maps
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Relevant issues in PLC analysis include:
Determining the length and rate of change of the PLC
Identifying the current PLC stage and selecting the product strategy that corresponds to that stage
Anticipating threats and finding opportunities for altering and extending the PLC
Product Life Cycle Analysis
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Product Grid Analysis Management’s performance
criteria Strengths and weaknesses relative
to portfolio
Brand Positioning Analysis Perceptual maps for brand
comparison Buyer preferences
Other Product Analysis Methods
Information Services Research studies Financial analysis
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Brand EquityEffective strategic brand management requires that we understand brand equity and evaluate its impact when making brand management decisions:
“Brand equity is a set of brand assets and liability linked to a brand, its name,and symbol, that add to or subtract from the value provided by a product orservice to a firm and/or to that firm’scustomers.*
Measuring Brand Equity. Several measures are needed to capture all relevant aspects of brand equity.**
• loyalty (price premium, satisfaction/loyalty),
• perceived quality/leadership measures (perceived quality, leadership/popularity),
• associations/differentiation (perceived value, brand personality, organizational associations),
• awareness (brand awareness), and
• market behavior (market share, price and distribution indices).
These components provide the basis for developing operational measures of brand equity.
* David A. Aaker, Managing Brand Equity, The Free Press, 1991, 15.**Ibid, 102-120.
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BRAND IDENTITY STRATEGIES
Brand identity is a unique set of brand associations that the brand strategist aspires to create or maintain. These associations represent what the brand stands for and imply a promise to customers from the organization members.*
Four Brand Identity PerspectivesProduct
Organization
Person
Symbol
* David A. Aaker, Building Strong Brands, 1996, 68.
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SpecificProduct
Lineof
Products
PrivateBranding
CompanyName
Basisof
Identification
CombinationBasis
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MANAGING PRODUCTS/BRANDS
Building the Product/Brand Over
Time
Product Line Strategies
Product/Brand Portfolio Strategies
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Strategies for Improving Product
Performance
Product mix strategy
Product lineStrategy
Addnew
product(s)
Costreduction
Productimprovement
Altermarketingstrategy
Eliminatespecific
product(s)
Deleteproductline(s)
Changeproduct line
priorities
Add newproductline(s)
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Strategies for Brand Strength
Brand-Building Strategies– Developing the brand identification
strategy– Coordinate identity across the
organization Brand Revitalization
– Find new uses for mature brands– Add products related to heritage
Strategic Brand Vulnerabilities– Brand equity can be negative– Retailer private brands compete with
manufacturer brands– Major shifts in consumer tastes– Competitive actions– Unexpected events
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Motivation for changing the product mix:
Increase the growth rate of the business
Offer a more complete range of products to wholesalers and retailers
Gain marketing strength and economies in distribution, advertising, and personal selling
Leverage an existing brand position
Avoid dependence on one product line or category
Product Mix Modifications
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BRAND EXTENSION
LINE EXTENSION
Extensions of the brand name to other product categories
--Similar
--Dissimilar
Minor variants of a single product are marketed under the same brand name
Brand Leveraging Strategy
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LINE EXTENSIONS
BRAND EXTENSIONS
HorizontalExtension
VerticalExtension
AnotherProductClass
RangeBrand
Co-Branding
Up fromCore
Brand
Down fromCore
Brand
Leveraging Alternatives
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BRAND LEVERAGING EVALUATION
CRITERIABrand Relevance/Differentiation
Capabilities/Perceived Value Match
Market/Segment Opportunity
Cannibalization Risks
Potential for Core Brand Damage
Clarity of Product Offerings
Estimated Financial Performance
Brand Equity Impact
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SEVEN DEADLY SINS OF BRAND MANAGEMENT*Failure to fully understand the
meaning of the brand.Failure to live up to the brand
promise.Failure to adequately support the
brand.Failure to be patient with the brand.Failure to adequately control the
brand.Failure to properly balance consistency and change with the
brand.Failure to understand the complexity of brand equity measurement and management.*Kevin Lane Keller, Strategic Brand Management, Prentice Hall, 2003, 736.
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MANAGING THE BRAND PORTFOLIO
Objectives:
– Leverage commonalities to
generate synergy
– Reduce damage to brand identity
– Obtain clarity of product offering
– Enable change and adaptation
– Guide resource allocations among
brands
Source: Aaker, Building Strong Brands, 1996.
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GLOBAL BRANDS
International markets: strategic branding challenges
Global brands supported by increasingly cosmopolitan consumers in many countries
Don’t build global brands but strive for global brand leadership
Challenge for MNCs: managing brand systems containing global, regional, and local brands