BRAND MANAGEMENT AND NEW PRODUCT DEVELOPMENT

SECTION 4ABrand Management and the Firm

The Strategic Brand Management Process

ALAN L. WHITEBREAD

STRATEGIC BRAND MANAGEMENT

1. Identify and establish brand positioning and brand values.

2. Plan and implement brand marketing programs.

3. Measure and interpret brand performance.

4. Sustain and grow brand equity.

BRAND MANAGEMENT SUCCESS

• Capitalize on a few strategic brands– Driven by benefits for the consumer– Put all sub-brands under the primary name– Strong intangible appeal is needed

• Act as a leader – set the rules and/or standards.

• Have a constant flow of innovations – Strong flow of new product development– Deliver personalized services [whenever possible]

BRAND MANAGEMENT SUCCESS

• Reward customer repeat purchases to covert them to active promoters of the brand.

• Globalize the brand. – Rapidly– Use a planned roll-out schedule

[Mental] Mind maps* [causal models]Competitive frame of referencePoints-of-parity and points-of-differenceCore brand values*Brand mantra*

Mixing and matching of brand elements*Integrating brand marketing activitiesLeveraging of secondary associations

Brand Value Chain*Brand auditsBrand trackingBrand equity management system

Brand-product matrix*Brand portfolios and hierarchies*Brand expansion strategies*Brand reinforcement and revitalization

KEY CONCEPTSSTEPS

Grow and SustainBrand Equity

Identify and EstablishBrand Positioning and Values

Plan and Implement Brand Marketing Programs

Measure and InterpretBrand Performance

THE STRATEGIC BRAND MANAGEMENT PROCESS

THE STRATEGIC BRAND MANAGEMENT PROCESS

• IDENTIFY AND ESTABLISH BRAND POSITIONING AND VALUES– How do consumers perceive brands?

• Involvement [brand association to brand personality]• Reducing perceived risk• Familiar = trusted• Brand A > Brand B [B2C]

– Is this a perception of quality?– Or is it needs satisfaction?

• Perceived benefits [B2C]• Actual benefits / Performance testing [B2B]• Ego / self-actualization

BRANDS

• Individual consumers [B2C] buy images associated with the products that tie to expected benefits and real or perceived meaningful points of difference.

• Business consumers [B2B] buy the firm behind the products and the products because of their performance.

THE STRATEGIC BRAND MANAGEMENT PROCESS

• FUNCTIONS OF A BRAND– Identify the product [packaging]

• Easily recognized by sight, sound, or other means– Practical [successful experience]

• Save time with repeat purchases– A guarantee [warranty; standards compliance]

• Consistency of performance or quality– Optimization for the consumer [experience,

advertising]• The best solution for their need – minimal cognitive

dissonance– Continuity

• Long-term relationship [lifetime value of a customer]– Hedonistic [advertising, image, recognition]

• Ego satisfaction

THE STRATEGIC BRAND MANAGEMENT PROCESS [try it on your own]

BRAND FUNCTION PRODUCT POWER[Strong, Medium, Weak]

Recognition signal Brand X milk ?

Guarantee [quality] Bic pens ?

Optimization [best for need]

Boeing

Caterpillar

Tata

?

Continuity / Permanence

Old brand = ? ?

Advertising research has shown that brand familiarity and brand uniqueness are very important to consumers [B2C]. It has also shown some relationship between brand advertising and sales volume.

THE STRATEGIC BRAND MANAGEMENT PROCESS

• Brand reputation – what is important?– Brand advertising [creative, meaningful, and

beneficial]

– Brand familiarity [recognition via repetition]

– Brand uniqueness [perception / performance]

– Brand sales [increasing faster than the market]

– Market share [top 2 – 3 at worst]

– Number & strength of competitors [positioning]

– Relative price [value]

IDENTIFY AND ESTABLISH BRAND POSITIONING AND VALUES [TOOLS]• MIND MAP [How do we associate thoughts?]

• POINTS OF PARITY [POP] – Items you point out as being the same as your

competitor. Usually used to improve your image.

– Sales people use these to offset a claim by a rival salesperson.

IDENTIFY AND ESTABLISH BRAND POSITIONING AND VALUES [TOOLS]• POINTS OF DIFFERENCE [POD]

– The one, two or three key meaningful differences that would cause the prospect to buy from yours not from your competitors.

– They must have these key characteristics.

• RELEVANCE – It must be relevant and important.

• DISTINCTIVENESS– It must be distinctive and present superior solution for their situation.

• BELIEVABILITY – It must be believable and credible.

• COMMUNICABLE – It must be simply communicated so there are obvious consumer

benefits.– Competitors should not be able to easily use as a point of parity.

STARBUCKS POP AND POD [try it on your own]

COMPETITOR POP PODFast food chains / convenience stores

Convenience

Value

Quality

Image

Experience

Variety

Supermarket brands for home

Convenience

Value

Quality

Image

Experience

Variety

Freshness

Local café Quality

Experience

Price

Community

Convenience

YOUR PROJECT ? ?

IDENTIFY AND ESTABLISH BRAND POSITIONING AND VALUES

• POINTS OF CONTENTION [POC]–Are elements where there is

disagreement as to how its performance or functionality compares to the next best alternative.

–Seen in comparison or negative advertising

• Always remember your competitive positioning and frame of reference.

B2C and B2B POINTS

POINTS OF B2C B2B

…Parity May be used to show at least equal to …

Virtually meaningless

…DifferenceMust be relevant and distinctive and believable

To sell your item

Proof

Subjective or emotional are best

Must provide a specific important advantage to be of benefit

…Contention Consumer may evaluate [unscientific]

Performance testing during the supplier qualification stage will answer this.

POINTS, NEEDS, AND OFFERINGSJoel E. Urbany and James H. Davis [Notre Dame], HBR Nov., 2007 pp. 29-30

Unneeded

Unneeded

Customers’ needs

Their PODs

Our PODs

Points of parity

Growth

Every POD must translate to meaningful benefits!

Our unique PODs

COCA-COLA COMPETITIVE FRAME OF REFERENCE

Ice cream

Fast food

Hobbies

Videos

???

Colas

Water

Beer

Juices

Coffee, tea

Dairy

Wines

FlavoredColas

LemonLimes

DietVersions

Diet

Colas

COMPETITION

• Most direct only diet colas

• Indirect other soft drinks

• Most indirect any other type of beverage

• Fringe any other expenditure

BRAND VISION AND PURPOSE

• BRAND VISION – It’s reason for being– The heart and soul of the product– Guy Kawaski [Apple Mac, VC] video

• BRAND PURPOSE – It’s raison d’être [its absolute purpose] – A guide for its life cycle– How would the market be different if GM did not exist?– How is Fiat changing the American car and truck markets?

• A powerful influence on a market [segment]– What does Cadillac mean?– What does Escalade mean?– What does Proctor and Gamble mean?– What does Pampers mean?

PRODUCT-BRAND RELATIONSHIP

• Every brand needs a flagship product [family, line].

• Expectations must always be exceeded by– actual and /or perceived benefits, AND– actual performance!

IDENTIFY AND ESTABLISH BRAND POSITIONING AND VALUES

• CORE BRAND VALUES*– The 5 to 10 most important attribute and benefit associations

that characterize a brand.– B2C: Lufthansa brand video– B2B: SYNGENTA brand video

• BRAND MANTRA* – Emotional modifier

• How does the brand deliver benefits?

– Descriptive modifier• How do you describe the business?

– Brand functions• How do you describe the product?

CORE BRAND VALUES EXAMPLE

• Texas Tech University Basketball– Incomparable basketball within a large

geographic area– Unique environment and experience– Always competitive– Fast, controlled, tough mentality– Unlimited possibilities [championships]– A vital part of the university, city, and area

BRAND MANTRA EXAMPLE“A passionate, competitive, west Texas experience.”

Texas Tech Basketball

Arena external ease of access

Arena and area security

Arena seat location

Arena comfortability

Arena parking options

Arena internal ease of access

Team quality and spirit

Team competition

Team excitement

Team coaching staff

Team current stars

Meet other TTU team stars

Game as a social function

Game entertainment

Game sense of electricity

Game : Big 12 Conference

Game fills a passion

Game of high quality

BRAND ELEMENTS

• The IP items that serve to identify and differentiate the brand from its competitors.– Name, logo, symbol, characters, colors,

endorsing characteristics, jingles, packaging, signage, slogans, and URLs.

• Criteria for selecting brand elements include– Memorable– Meaningful– Likeable– Transferable [add to brand equity]– Adaptable [change over time]– Protectable – International considerations

PLAN AND IMPLEMENT BRAND MARKETING PROGRAMS

• MIX AND MATCH BRAND ELEMENTS TO MAXIMIZE BRAND EQUITY.– Visual or verbal information that identifies and meaningfully

differentiates a product [brand name, logo, symbol, character, package, or slogan, etc.]

• INTEGRATE BRAND MARKETING ACTIVITIES– 4P’s

• LEVERAGE SECONDARY ASSETS– Company, geography, channel, ingredients, characters,

spokespeople, events, …– Maximize synergies

MEASURE AND INTEPRET BRAND PERFORMANCE

• BRAND VALUE CHAIN [value creation]1. Define brand hierarchy

2. Define brand-product mix

3. Enhance brand equity over time

4. Establish brand equity over multiple market segments

1. DEFINE BRAND HIERARCHY

• Principle of Simplicity– Few brand levels

• Principle of Relevance– Create abstract associations to many products

• Principle of Differentiation*– Differentiate individual items and brands

• Principle of Prominence*– Maximize product distance to competitive products

[perceptual map]• Principle of Commonality

– Link to other branded products through shared brand elements

• HP Printer family

2. DEFINE BRAND-PRODUCT MATRIX

• Brand extensions*– Establish new equity– Enhance existing equity

• Brand portfolio*– Maximize coverage with minimum overlap

[minimize cannibalization]

3. ENHANCE BRAND EQUITY OVER TIME

• Brand reinforcement– Innovate for position– Use relevant imagery

• Brand revitalization– Do the basics well– Continually refresh / reinvent the brand

• RC Cola and Coca-Cola

1944

1951

1955

1962

1965

2004

1940

1947

1958

1960’s

1971 – Hilltop - “I’d like to buy the world a Coke.”

http://www2.coca-cola.com/presscenter/av_advertising.html [GLOBAL]

1979 – The first polar bear Coke commercial.

1982

1993-9

•http://www.adeater.com/bin/view.cgi?/usr2/internet/www/adeater/welcome2.html,1,ZurlW/MULTI/html/cinema.htmlZ

Virgin Cola [France #1] Argentina Chips Ahoy +Coca Cola + Fiat Germany Nescafe #2 Burberrys Rifle Jeans [Italy]

4. ESTABLISH BRAND EQUITY OVER MARKET SEGMENTS

• Identify differences in behavior– Identify purchase patterns– Use patterns– Knowledge and opinion about different brands

• Adjust branding program– Choice of brand elements– Nature of the marketing program– Leverage associations

Sample question #1

• Which strategic planning tool asks what are we best at, deeply passionate about, and drives our economic engine? – [A] BCG Business Portfolio Analysis – [B] Blue Ocean Analysis – [C] GE Business Planning Matrix – [D] Hedgehog Analysis

Sample question #2

• Your firm is evaluating the purchase of a brand from another company. The most likely key financial number for estimating the long term value of that firm and its brands would be – [A] after-tax income – [B] EBITDA – [C] M&A free cash flow – [D] net sales