Brands and Brand Management

Introduction and Discussion

The Issue of Branding

Branding simplifies the complexity of the offering via brand elements such as:

– Brand names– Logos– Symbols– Package designs

Branding helps in the thought processes of consumers when they are considering purchasing or purchasing an offering.

A brand name must be:

Unique Distinctive Easy to remember Easy to pronounce Relevant to the offering Positive about the offering

The Issue of Branding contd.

Branding helps in reducing risk associated with an offering.

Used as a differentiating criteria between offerings.

The genesis/basis of brand management is consumer perceptions – the need to satisfy consumers’ perceived differences between offerings.

Let us define a brand…..

Class exercise…

So, what exactly is a brand? In its simplest definition,

it is a name, term, symbol, feature or any combination of these. It is used/employed to identify the distinctiveness (special) of an offering (i.e., product, service, brand) from those of competitors.

The legal term for brand is Trademark.

The top ten global Brands 1. Coca-Cola 2. Microsoft 3. IBM 4. GE 5. Intel 6. Nokia 7. Disney 8. McDonalds 9. Marlboro 10. Mercedes

USA USA USA USA USA Finland USA USA USA Germany Source: Business Week Special Report,

August 4th, 2003

Discussion of Cases – Coca-Cola

The formation and maintenance of brand-product relationships provide the basis for certain cultural roles/transformation.

Brands can command higher financial value than the net book value of tangible products.– The purchase of Kraft by Philip Morris

– The Split-up of Saachi & Saachi Advertising Agency between the original owners (Saachi brothers) and shareholders & senior managers

Brands Because product differences are generally non-

existent, brands have been successful in creating a seeming tangible image of the product.

“Products are made in the factory” “Brands are what consumers buy”

– The two statements are linked by the concept of “added value”

– Brands help to create an image and establish a positioning for the firm/offering

– Hence, brand management and positioning are intertwined.

Brands

Firms (e.g., retailers) can introduce their own brands – to further enhance their positioning/competitive advantage.

Retailers’ own brands, “store brands” or “private label brands”:

• Sears Kenmore electricals, Craftman tools, DieHard batteries

• M & S St. Michaels• ASDA (now Wallmart) George

Brands Brands extend beyond offerings into (a) people, (b) organizations,

© places, (d) countries– Amazon.com brand– Martha Stewart– Bill Gates– Cindy Crawford– Michael Jordan– Tiger Woods– Bill Clinton– Las Vegas– Mecca– Amsterdam– Jamaica– London– Egypt– Morocco

Brands Virtually anything can be and has been

branded— Similarly, anything can be positioned vis a vis

the competition

The issue of strong brands and weak brands -- why are some brands stronger than others?– Any brand – no matter how strong at any one point

in time is vulnerable and is susceptible to poor brand management.

Five Factors Leading to Brand Leadership

1. Vision of the mass market2. Managerial persistence3. Financial commitment4. Relentless innovation5. Asset leverage

The underlying issue about the above is the concept of “added value”

What is added value?

“…this is the case/situation whereby the finished offering can command a higher price than the cost of its component parts or the raw material used in producing it…”

…in other words...

The finished offering is more valuable to the consumer than the pile of raw material from which it was made.

Branding and added value

One key issue about a brand is that when a consumer is unable to make a rational choice based on performance,– They rely on added values (and the image they have

in their minds of the brand) to be able to distinguish the firm’s offering from their competitors.

– Consumers make these (rational) decisions because of (a) numerous competing offerings, (b) perhaps, the consumer lacks the technical or expert knowledge to judge the differences between competing offerings.

Added values are called brand values

They ensure that: An offering will be

reliable, The offering is the

best, An offering is good

value for money.

Added values are based on: Perceptions (the position of

the offering/firm in the market place) of the firm and the offering,

Believes about the firm’s authority and its reputation in the market– This may be based on market

share, history, consistency in marketing, experts’ (or family and friends) recommendation.

Brand values are emotional values – often difficult to “tangibilize/verbalize”

Brand/added values are added to the offerings through the application of marketing strategies and tactics including the marketing mix – 4 P’s/7 P’s:– Product/service/packaging,– Promotion/marketing communications,– Distribution – logistics,– Pricing– Service quality and delivery– Physical evidence of the premises/store/shop,– People who actually interact/deliver the service– STP marketing

Brand/added values contd.

Brand values help create a uniqueness about the offering where none may exist functionally.

They are the means by which offerings are positioned in the market place.

Brand values create a total image and personality for the “brand”/offering.

To the consumer the brand provides a guarantee of quality, value for money, the best choice.

Brand Equity “…fundamentally, branding is about endowing products

and services with the power of brand equity..” (Keller, 2002, pp.42).

Brand equity refers to brand/added value that has been associated with the offering over time.

Brand equity = the value of the brand.

Several ways in which the value of a brand can be manifested or exploited to benefit the firm:

(a) greater profits, (b) market share, © lower production costs (d) clear and long-lasting position in the market place.

How to achieve brand equity

Skillful design and implementation of marketing programs

The capitalization on a well thought-out positioning

Strong brand leadership position in the market place

What is strategic brand management?

The design and implementation of marketing programs and activities to build, measure, and manage brand equity.

Strategic brand management process

• Identifying and establishing brand positioning and value.

• Planning and implementing brand marketing programs

• Measuring and interpreting brand performance.

• Growing and sustaining brand equity.

What is brand mantra? The most important and pivotal aspect of the

brand to the consumer and the firm– It is the essence of the brand.

Thus, core brand/added values and a brand mantra are an articulation of the heart and soul of the brand.

“…once the brand positioning strategy has been determined, the actual marketing program to create, strengthen, or maintain brand associations can be put into place…” (Keller, 2002, pp.45).

Identifying and establishing brand positioning and values Determine the full meaning (mantra) of

the brand vis a vis competitors, Assess perceptions of the target audience

and Assess the firm’s own capabilities via

marketing audit.– The goal is to place the brand image in the

mind of the customer so as to maximize the firm’s benefits.

Challenges facing brand management

Managing brand equity over time. Managing brand equity over geographic

boundaries, cultures, and market segments.

Changing PESTLE of the market place. Stochastic consumer perceptions

Product brands vs corporate brands

Product branding builds separate brand identities for different products- the imagery varies from one brand to another:– Sprite and Mr. Pibb

under Coca-Cola– Lux and Dove from

Unilever– Toyota and Lexus from

Toyota– Honda and Acura from

Honda.

Corporate branding refers to the strategy in which the brand and corporate name are the same– IBM & Nike = USA– RBS & Virgin = UK– Sony & Mitsubishi =

Japan

Question?

– What do the following mean?• Added value

• Brand value

• Brand equity

• Brand mantra

• Brand personality

• Product brand

• Corporate brand

• Positioning.

Corporate branding

The issue of company branding

Corporate branding contd.

Companies with a more positive reputation appear to project their core mission and identity in a more systematic and consistent fashion than those with lower reputation rankings.

High reputation companies try to impart more information about their offerings, their operations, identity and history.

Corporate Branding contd.

According to Bickerton (2000), the concept of corporate image/reputation started from a customer market perspective.

Further appreciation of the environment gave the impetus to the development of brand marketing.

To this end, there are two perspectives to academic thinking about corporate branding: (a) marketing perspective and (b) multidisciplinary perspective.

Relationship of the academic thinking (two schools of thought)

Marketing Perspective – Customer focus. Brand image Brand positioning Brand identity Corporate associations Corporate branding

Multidisciplinary Perspective – Organization focus. Corporate image Corporate personality Corporate associations Corporate branding

The pivotal role of marketing communications Importance of marketing communications in the branding process (corporate and

offerings) is supported both conceptually and empirically. Communications revolve around (a) management, (b) marketing and (c)

organizational and (d) brand stakeholder audiences.

Brand stakeholders that have an economic interest include Employees Shareholders Suppliers Partners (other owners of the business).Brands have an economic impact (affects) on: Customers Opinion formers (politicians) Regulators and Legislators.

Based on Bickerton D. (2000), Corporate reputation versus corporate branding: the realist debate, Corporate Communications: An International Journal, Vol.5, No.1, pp.42-48.

Questions?