Commercial Exploitation of Brands

Frank Rinaldi

Intellectual Assets Centre

Marketing & Branding

Marketing & Branding Fundamentals

Its all about them (Broad or Niche) Never about you

No relevance to them – no business for you

Examples

Each the above means something to all of us

So what exactly is a Brand?

The value that your company, product or service occupies in

the customer’s mind            

ORThe value that you want to

create in the customer’s

mind            

Who is the customer?

Target Market ‘Tribe’

•Aligns with needs/aspirations/desires (individual)•Part of a community (social)

•Local•Regional•National•Global

Benefits of Branding

Create a ‘monopoly’ Premium pricing? Increases customer loyalty Reduces switching rate Market acceptance of new offerings from the brand Increased referral and repeat business Easy for the customer to make a purchase

choice/decision against a backdrop of many alternatives Creation of business models for expansion (franchising) Realisable value - sales

Brand Classification - Monolithic

Monolithic brand or Branded house Examples include the Virgin Group, the Easy group and

Scotland? These brands use a single name across all their activities

and this name is how they are known to all their stakeholders – customers, employees, shareholders, partners, suppliers and other parties.

These brands are often experiential in character conveying the essence of what is offered by the brand i.e Virgin – Young, exciting willing to take risks, explore

new ways of doing things Easy – Low cost Scotland – High quality environment

Brand Classification – Endorsed Brands

Endorsed Brands Examples include the Sony PlayStation, Polo by Ralph

Lauren and Apple’s iPOD The endorsement of a parent brand should add credibility

to the endorsed brand in the eyes of the customer. This strategy also allows companies who operate in many categories to differentiate their different product groups’ positioning.

The parent brands in this context usually convey: Quality Innovation Credibility

Brand Classification - Product brand

Product brand or House of brands Examples include Procter & Gamble’s Pampers,

Unilever’s Comfort fabric conditioners and Diageo – Guinness, Johnny Walker and Smirnoff

The individual sub-brands are offered to customers Purchase is made on the basis of direct association with

the brand

Brand Boundaries

Monolithic - Enter new markets that align with values -

Endorsed brands - New product offerings that align with parent brand -

Product brands - Limited to line extensions -

Scope for Commercial Development

Case Study 1 – Virgin (Monolithic Brand)

The Virgin empire's origins can be traced to a music record shop started by Branson in London in 1972.

According to a survey conducted in 1998, 96 per cent of UK consumers were aware of the brand “Virgin” and 95 per cent were able to name Richard Branson as The Virgin Group’s founding member.

Market research has ranked Virgin among the top five brand names in the UK and among the top 25 in Europe.

For Richard Branson, “The brand is the most single important asset that we have; our ultimate objective is to establish it as a major global name. That means we need to have a number of core businesses with global potential”.

Case Study 2 – Endorsed brands

Michelle Mone started the business in November 1996 with the redundancy money from her previous employment as a sales and marketing manager for Labatts Brewery in Glasgow.

The breakthrough for MJM International was the 1999 launch, in the UK, of the Ultimo a unique gel filled bra that has taken three years of research and development. From a turnover of £300,000 in year end April 1999, the projected revenue for the business in 2000 was £2 million.

Relies heavily upon celebrity endorsement

Case Study 3 – Sports Division (Product Brand)

In 1984, Tom Hunter founded the Sports Division chain of sports shops. He built this up into a leading retailer. In 1998, he sold the chain to JJB Sports, making over £250 million.

Brand – Huge range, low priced sporting goods (Trainers) Caught the change in footwear trend at the right time.

Case Study 4 – Kwik-Fit (Product Brand)

Founded 1971 by Tom Farmer Brand message: ‘Trust’ ‘Kwik-Fit is an organisation that provides product and

services which will encompass the life if a car from showroom to scrapyard’

In 1971 – Automotive Servicing and Repair perceived as untrustworthy

Key IA – Customer Relationship Key IA components – Organisations people, plus

customer orientated key performance measurement at all levels

Brand Built by continual ‘Trust' message

Case Study 5 – Company X (Product Branding with Monolithic association)

Scottish smokehouse in the Highlands Main customer Tesco, getting squeezed on price ‘Started branding Smoked Salmon in tartan packaging

and selling through Delicatessens in Europe and US Price premium 3 x time the sales price to Tesco Achieved reasonable results, got call from their Italian

Distributors who asked for a Piper to be put on the packaging. Re-branded (Design Protected) accordingly

Sales in Italy soaring

Recap

A brand is the mental association that the ‘tribe’ has with the company, product or service

It’s intention is to create a ‘monopoly’ where price becomes less relevant and loyalty is increased

There are different types of brands – know yours (from the customer’s perspective) Remember that branding is a key element of your Marketing Strategy. But needs to

balanced against others especially strategy execution.