blackboard lecture 10 - chapters 11 and 12 - sem 1 2010 mh

8/6/2019 Blackboard Lecture 10 - Chapters 11 and 12 - Sem 1 2010 Mh

1/84

Week 10Chapter 11

Designing and Implementing

Branding Strategies


2/84

OverviewDesigning & Implementing

Brand Strategies

Preview BrandArchitecture

Brand HierarchyDesigning a

Branding Strategy

Using Cause Marketingto

Build Brand Equity

The Brand-ProductMatrix

Breadth of aBranding Strategy

Depth of aBranding Strategy

Building Equityat Different

Hierarchy Levels

Corporate ImageDimensions

No. of Levels ofthe Brand Hierarchy

Desired Awareness &Image at Each

Hierarchy Levels

CombiningBrand Elements

from Different Levels

Linking BrandElements

to Multiple Products

Developing aBrand Architecture

Adjustments to theMarketing Program

Advantages ofCause Marketing

DesigningCause Marketing

Programs

Green Marketing


3/84


Brand Strategies



Branding Strategy


Build Brand Equity





Hierarchy Levels




Hierarchy Levels



Linking BrandElements

to Multiple Products





Programs

Green Marketing


4/84

Branding Strategy

Branding strategy is critical because it isthe means by which the firm can helpconsumers understand its products and

services and organize them in their minds.Two important strategic tools: The brand-product matrix and the brand hierarchy

help to characterize and formulatebranding strategies by defining variousrelationships among brands and products.


5/84

Branding Strategy orBrand

Architecture

The branding strategy for a firm reflectsthe number and nature of common ordistinctive brand elements applied to thedifferent products sold by the firm.

Which brand elements can be applied towhich products and the nature of new andexisting brand elements to be applied to newproducts


6/84

The Role of Brand

Architecture

Clarify: brand awareness

Improve consumer understanding andcommunicate similarity and differencesbetween individual products

Motivate: brand image

Maximize transfer of equity to/from the brandto individual products to improve trial andrepeat purchase


7/84


8/84

Brand Architecture: Brand-Product

Matrix

Must define:B

rand-Product relationships (rows)Line and category extensions

Product-Brand relationships (columns)Brand portfolio

1 2 3 4

A

B

C

Products

Brands

Brand linesB PR O

A RN TD F

OLI

O


9/84

Brand Product MatrixDental health (= Product category)

Product lines

Electrictoothbrush

Manualtoothbrush

..

..


10/84

Important Definitions

Brand LineConsists of all products in the same brand. Includesoriginal and extension

Product line

A group of products within a product category thatare closely related

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

seller makes available to buyers (regardless of brand)Brand mix (brand assortment)The set of all brand lines that a particular seller makesavailable to buyers


11/84

Important Definitions (Example)

Brand Line (Oral B)

Consists of all products in the same brand.Includes original and extension(s)

Product category (Dental health)A group of products within a productcategory that are closely related

Product line(Floss, Toothpaste, Toothbrush)

A group of products within a productcategory that are closely related


12/84

Product mix (product assortment)The set of all product lines and items that a particularseller makes available to buyers

Floss (Floss picks, Essential floss, Satin floss)

Toothpaste (Sensitive)Toothbrush (Advantage 123, Advantage BreathRefresh, Advantage Glide Gum Care)

Brand mix (brand assortment)The set of all brand lines that a particular seller makesavailable to buyers

All P&G brands such as OralB, Crest, Covergirl, Tide,Gillette, Head and Shoulders, Pampers, Vicks, etc.

Important Definitions (Example)


13/84

Brand Architecture: Brand-Product

Matrix

Must define:B

rand-Product relationships (rows)Line and category extensions

Product-Brand relationships (columns)Brand portfolio

1 2 3 4

A

B

C

Products

Brands

Brand linesB PR O

A RN TD F

OLI

O

Breadth of a Branding

Strategy

Depth of a

Branding

Strategy


14/84

Breadth of a Branding Strategy

A) Breadth of product mix how manyproduct lines should be offered?

Aggregate market factors

Market sizeMarket growthStage in product life cycleSales cyclicitySeasonalityProfits

Category and line

attractiveness:Criteria to determine attractivenessof a product category and howmany lines should be offeredin that category


15/84



Category factorsThreat of new entrantsBargaining power of buyers/ suppliersCurrent category rivalryPressures from substitutes

Category capacity Category and lineattractiveness:Criteria to determine attractivenessof a product category and howmany lines should be offeredin that category


16/84



Environmental factorsTechnological

PoliticalEconomicRegulatorySocial

Category and lineattractiveness:Criteria to determine attractiveness

of a product category and howmany lines should be offeredin that category


17/84


B) Depth of product mix how manyvariants to offer in each product

line?

Examining the percentage of sales and profitscontributed by each item in the product line

Deciding to increase the length of the product lineby adding new variants or items typically expandsmarket coverage and therefore market share but also

increases costs Products within product line:Toothpaste: Sensitive, now alsochildren, seniors, gum care,whitening? Is there a need?


18/84

Depth of a Branding StrategyThe number and nature of differentbrands marketed in the product classsold by a firm

Referred to as brand portfolioThe reason is to pursue different marketsegments, different channels ofdistribution, or different geographic

boundariesMaximize marketcoverageand minimize brand overlap

Brand portfolio:How many brands makesense in one productcategory?


19/84

Upscale

Traditional

Holiday Inn Worldwide

Budget

Business-oriented

Family-oriented

Brand portfolio:Different brands

in one productcategory


20/84

Reasons for introducing multiple

brands in a categoryTo increase shelf presence and retailerdependence in the store

To attract consumers seeking variety whomay otherwise switch to another brand

To increase internal competition with the firm

To yield economies of scale in advertising,

sales, merchandising, and physical distribution

Brand portfolio:Different brandsin one product

category


21/84

Designing aB

rand PortfolioBasic principles:

Maximize market coverage so that no

potential customers are being ignored

Minimize brand overlap so that brands arentcompeting among themselves to gain the

same customers approval

Brand portfolio:Different brandsin one productcategory


22/84

Brand Roles in the Portfolio

Flankers (Fighter)

Create a strong POP with competitorsbrands so that the flagship (more

profitable/important) brands can retain theirdesired positioning

Luvs diaper brand to serve as a price fighteragainst private labels and store brands to

protect the premium-positioned Pampersbrand


23/84


Flankers (Fighter)

Australian example

Jetstar serves as a fighter brand for Qantasversus Virgin Blue


24/84


(Cont)Cash cows

Kept around despite dwindling sales because

still manage to hold on to a sufficient numberof customers and maintain their profitabilitywithout marketing support

Discontinue Gillette Trac II may not

necessarily result incustomers switching toanotherGillette Brand


25/84


(Cont)Cash cows

Australian Examples

Is Kelloggs Corn Flakes a Cash Cow?Slow growth category

Rarely, if ever, advertised

Large market share and profitable


26/84

Brand Roles in the Portfolio (Cont)

Low-end entry-levelA low-priced brand in the brand portfolio to attractcustomers to the brand franchise

A traffic builder

Retailers may able to trade-up customers to a higher-priced brand

BMW introduced 1-series (start from US$23,800) whichsame production line as 3-series on 2004, which hopescustomer will trade-up to higher-priced models when they

traded their cars in


27/84


(Cont)High-end prestige brands

A traffic builder by adding prestige and

credibility to the entire brand portfolio andrelatively high-priced brand in the brandfamily


28/84


Brand Strategies



Branding Strategy


Build Brand Equity





Hierarchy Levels




Hierarchy Levels



Linking BrandElementsto Multiple Products





Programs

Green Marketing


29/84

Brand Hierarchy

A means of summarizing the brandingstrategy by displaying the number and

nature of common and distinctive brandelements across the firms products,revealing the explicit ordering of brandelements

A useful means of graphicallyportraying a firms branding strategy


30/84

Brand Hierarchy Tree

ToyotaCorporation

Toyota(Trucks)

Toyota(SUV/vans)

LexusToyotaFinancial

Services

Toyota(Cars)

Corolla PriusAvalon Celica Yaris MatrixMR2

SpyderCamry

CES

LE

SELE

XLE

PlatinumEdition

XLXLS

SESLE Aurion


31/84

Brand Hierarchy Levels

Corporate Brand

Family Brand

Individual Brand

Individual Item or Model (Modifier)

A brand hierarchy can involve multiplelevels:


32/84

Brand Hierarchy Levels (cont.)

Corporate or company brandAlmost always present for legal reasons In some cases virtually the only brand used, e.gXeroxCan be used with modifier, e.g. Siemenstransportation systems, GE finance

Sometimes hidden, e.g. De Walt power tools(manufactured by Black and Decker)

Family BrandBrand used in more than one product category butnot necessarily the company brand. An efficientmeans to link common associations to multiple butdistinct products, e.g. E.g. Uncle Tobys


33/84

Individual Brands

Restricted to essentially one productcategory

There may be multiple product typesoffered on the basis of different models,package sizes, flavors, etc.


34/84

Modifiers

Signals refinements or differences in thebrand related to factors such as qualitylevels, attributes, functions, etc.

Plays an important organizing role incommunicating how different productswithin a category that share the same

brand name are


35/84

Corporate Brand Equity

Occurs when relevant constituents holdstrong, favorable, and uniqueassociations about the corporate brandin memory

Encompasses a much wider range ofassociations than a product brand


36/84


37/84

Corporate Image Dimensions -

AssociationsCorporate product attributes, benefits or attitudes

Quality

Innovativeness

People and relationshipsCustomer orientation

Values and programs

Concern with the environment

Social responsibilityCorporate credibility

Expertise

Trustworthiness

Likability


38/84


Brand Strategies

Preview BrandArchitecture Brand Hierarchy Designing aBranding Strategy

Using Cause Marketing

toBuild Brand Equity





Hierarchy Levels



Desired Awareness &

Image at EachHierarchy Levels



Linking Brand

Elementsto Multiple Products




DesigningCause MarketingPrograms

Green Marketing


39/84

Brand Hierarchy Decisions

The number of levels of the hierarchy touse in general

How brand elements from differentlevels of the hierarchy are combined, ifat all, for any one particular product

How many one brand element is linked,

if at all, to multiple productsDesired brand awareness and imageat each level


40/84

Number of Hierarchy Levels

Principle of simplicityEmploy as few levels as possible

Principle of clarityLogic and relationship of all brand elementsemployed must be obvious and transparent


41/84

Levels of Awareness and

Associations

Principle of relevanceCreate global associations that are relevantacross as many individual items as possible

Principle of differentiationDifferentiate individual items and brands


42/84

Linking Brands at DifferentLevels

Principle of prominence

The relative prominence of brand elementsaffects perceptions of product distance andthe type of image created for new products


43/84

Linking Brands Across Products

Principle of commonality

The more common elements shared byproducts, the stronger the linkages


44/84

Brand Architecture

GuidelinesAdopt a strong customer focus

Avoid over-branding

Establish rules and conventions and bedisciplined

Create broad, robust brand platforms

Selectively employ sub-brands as means of

complementing and strengthening brandsSelectively extend brands to establish newbrand equity and enhance existing brandequity


45/84

Corporate Brand CampaignDifferent objectives are possible,

contd:

Build awareness of the company and

the nature of its businessCreate favorable attitudes andperceptions of company credibility

Link beliefs that can be leveraged byproduct-specific marketing


46/84

Corporate Brand CampaignDifferent objectives are possible:

Make a favorable impression on thefinancial community

Motivate present employees andattract better recruits

Influence public opinion on issues


47/84


Brand Strategies



Branding Strategy


Build Brand Equity





Hierarchy Levels




Hierarchy Levels



Linking BrandElementsto Multiple Products




DesigningCause MarketingPrograms

Green Marketing


48/84

Cause Marketing

MacDonalds example-Ronald Macdonald Househttp://www.rmhc.org.au/


49/84

Using Cause Marketing to Build

Brand Equity

The process of formulating andimplementing marketing activities thatare characterized by an offer from thefirm to contribute a specified amount to adesignated cause when customers

engage in revenue-providing exchangesthat satisfy organizational and individualobjectives


50/84

Advantages of Cause Marketing

Building brand awareness

Enhancing brand image

Establishing brand credibilityEvoking brand feelings

Creating a sense of brand community

Eliciting brand engagement


51/84

Green Marketing

A special case of cause marketing thatis particularly concerned with theenvironment

Explosion ofenvironmentally friendlyproducts and marketingprograms


52/84

A little wake up for you before we talk

about serious things...Watch out on the road!

http://www.youtube.com/watch?v=Hb2Yb9ciJWA

SuperBowl award winning ad.

http://www.youtube.com/watch?v=hpjaOUjUPUc


53/84

Crisis Marketing Guidelines

The two keys to effectively managing a crisis are thatthe firms response should be swift and that it shouldbe sincere.

Communicate early and often.Show compassion, and be sure the company isdoing everything possible to improve the situation.

Be honest and open.

Be consistent in the message.

Monitor public opinion using new technology (chatrooms, message boards, discussion groups, surveys).

Follow up with public opinion surveys and employeequestionnaires to learn from mistakes


54/84

Tylenol Incident7 murders- October,1982

Tampered product24 hour toll free line

Immediate recall- 31

million bottles!Stopped advertising

Madeannouncements in

media

Coupons- 60 million-$2.50 free offer

New ads- aiming tore-building trust

Tamper proofpackaging

Sales back to normalby 1983


55/84

Tylenol ad -1984

http://www.youtube.com/watch?v=EQrAD_InXHk


56/84

Tylenol ad-1986

http://www.youtube.com/watch?v=i6EBNti7Vo0&NR=1


57/84


58/84

Chapter 12

Introducing and Naming New

Products and Brand Extensions


59/84

Overview

Introducing & NamingNew Products &

Brand Extensions

New Products &Brand Extensions

Advantages of Extension

Provide FeedbackBenefits to theParent Brand

Disadvantages ofBrand Extensions

Understanding HowConsumers Evaluate

Brand Extensions

EvaluatingBrand Extension

Opportunities


60/84

Leverage the Brand

Firms are seeking to build power ormega brands that establish a broad

market footprint, appealing to multiplecustomer segments with multipleproducts all underneath the brand

umbrella.


61/84

DefinitionsBrand extension

Use an established brand name to introduce anew product

Sub-brand

New brand combined with an existing brand

Parent brand

Existing brand that gives birth to a brand extension

Family brandParent brand already associated with multipleproducts through brand extensions


62/84

Brand extensionLine extensionParent brand is used to brand a new product thattargets a new market segment with a productcategory currently served by the parent brand

Involves different flavour or ingredient variety,different form, size or application

Category extension

Parent brand is used to enter different productcategory from that currently served by the parentbrand


63/84

McDonald's2000s, McDonalds faced a challenging environment

Market saturation

Global health concerns

Market Penetration Strategy

Negative publicity of Fast food poor health & obesityOffer better choices and healthier options

Launched Bag a McMeal website for customers to calculatethe nutritional content of McDonalds menu

New marketing campaign for global markets Im livin it

Result

2004 recorded incremental visitor of 2.3m customer per day &continuing grow


64/84

Market Development Strategy

Closed slow demand restaurants in UK and Japan

Pursued overseas expansion by opening 1200 newrestaurantsRecorded 30,000 restaurants in 119 countries in 2003-2004, 65% revenues came from outside USAFastest growing marketing in mid-2000 was China.

Target to open 1,000 locations by 2008 BeijingOlympics2006, strengthen global present by launched a globalpromotion reality packaging (global casting call)and tied to the Im Lovin it campaign

Develop a new market and target 20-30s female tothe brand with premium salads served withNewmanss Own dressing and other light menuoptions


65/84

Product Development Strategy

2001, extended its brand and opened 1st

McCafe, agourmet coffee shop and McTreat an ice cream anddessert shop

Start to offer specialized menu items in differentcountries ie, Teriyaki Burger in Japan, Vegetable

McNuggets in EnglishRemoved Super Size options and added healthieroptions, such as fresh salads and Happy Meals adultversions and included salad and bottled water andencourage exercise and healthier Happy Meals for

child version

McDonald


66/84

Product Development Strategy

Result, recorded No.1 salad brand in UKEmphasized McDonalds recasting of RonaldMcDonald as its Chief Happiness Officer asa sports enthusiast

Launched premium roast coffee & McGriddle

breakfast sandwich

McDonald


67/84

McDonaldDiversification StrategyDiversifies its product offering according toregional tastes when it enters new markets.

India introduced Maharaja Mac made frommutton (no beef in India) and spicy sauces ofMcMasala & Mclmli


68/84


69/84

Brand Extensions

When a firm uses an established brand name to introduce anew product

Brand extension=existing brand + new product

Brand extension classificationLine extension

Using a sub-brand to target a new market segment within thesame product category

Sub-brand=new brand + existing brand

Involves different flavour or ingredient variety, different form,

size or application

Category extension

Using the parent brand in a different product category

Example: Iams pet food & pet insurance


70/84

General Strategies for Establishing a

CategoryTaubers FranchiseExtensionIntroduce the same product in a different form. Example: OceanSpray Cranberry Juice Cocktail, Jello-O

Introduce products that contain the brands distinctive taste,ingredient, or component.

Example: Haagen-Dazs cream liqueur

Introduce companion products for the brand. Example: DuracellDurabeam flashlights


71/84

General Strategies for Establishing aCategoryTaubers FranchiseExtensionIntroduce products relevant to the customerfranchise of the brand. Example: Visa travelerschecksIntroduce products that capitalize on the firmsperceived expertise. Example: Canon photocopymachine

Introduce products that reflect the brandsdistinctive benefit, attribute, or feature. Example:

Dettol

Introduce products that capitalize on the distinctiveimage or prestige of the brand. Example: Porschesunglasses


72/84

Advantages of Extensions

Facilitate new product acceptanceImprove brand image

Reduce risk perceived by customers

Increase the probability of gaining distribution and trial

Increase efficiency of promotional expenditures

Reduce costs of introductory and follow-up marketingprograms

Avoid cost of developing a new brand

Allow for packaging and labeling efficiencies

Permit consumer variety seeking


73/84

Advantages of Extensions (Cont.)

Provide feedback benefits to parent

brand

Clarify brand meaning

Enhance the parent brand imageParent brand = existing brand gives a birth to a brandextension

Bring new customers into brand franchise and

increase market coverage

Revitalize the brand

Permit subsequent extensions


74/84

Disadvantages Extensions can

confuse or frustrate consumersencounter retailer resistance

fail and hurt parent brand image

succeed but cannibalize sales of parent brand

succeed but diminish identification with anyone category

succeed but hurt the image of the parentbrand

dilute brand meaning

cause the company to forgo the chance todevelop a new brand


75/84

Managerial assumptionsConsumers have some awareness of and positive

associations about the brand in memoryAt least some of these positive associations areevoked by the brand extension

Negative associations are not transferred from the

parent brandNegative associations are not created by the brandextension

Understanding How Customers

Evaluate Brand Extensions


76/84

Creating Extension Equity

1.Salience of parent brand associations inthe minds of consumers in the extension

context2.Favourability of any inferredassociations in the extension context

3.

Uniqueness of any inferred associationsin the extension context


77/84

Contributing to Parent Brand

EquityHow compelling the evidence is concerning thecorresponding attribute or benefit association in theextension context

Howrelevant or diagnostic the extension evidence is

concerning the attribute or benefit for the parent brandHow consistent the extension evidence is with thecorresponding parent brand associations

Howstrong existing attribute or benefit associations are

held in consumer memory for the parent brand


78/84

Successful Extensions mustcreate points-of-parity and points-of-difference in extension category

recognize competitive reactions

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

maximize the advantages andminimize the disadvantages of brandextensions


79/84

Successful Extensions

Ivory shampoo andconditioner

Vaseline Intensive careskin lotion

Visa Travelers cheques

Colgate toothbrushes

Nutri- Grain snack bars

Bic disposable lighters

Honda lawn mowers


80/84

Unsuccessful Category

ExtensionsCampbells tomato sauceLifeSavers chewing gumHarley Davidson wine coolersBic perfumesKleenex nappies/diapersLevis Tailored Classics suitsDominos fruit-flavored bubble

gum


81/84

Evaluating Brand Extension

OpportunitiesDefine actual and desired consumerknowledge about the brand

Identify possible extension candidates

Evaluate the potential of the extensioncandidate

The likelihood that the extension will realize theadvantages and avoid the disadvantages of brandextensions. As with any new product, analysis ofconsumer, corporate, and competitive factors can beuseful.


82/84


83/84

When are brand extensions

appropriate?If they see some basis of fit or similaritybetween the proposed extension and parentbrand

The major mistake in evaluating extensionopportunities is failing to take all of consumersbrand knowledge structures into account.

Often, marketers mistakenly focus on only one

brand association and ignore other potentiallyimportant brand associations in the process.


84/84

blackboard lecture 10 - chapters 11 and 12 - sem 1 2010 mh

Documents