introduction to brand-lecture notes

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ks

Advanced Diploma in MarketingAdvanced Diploma in Marketing

and Brand Managementksand Brand Management

Module Introduction to Branding

Copyright© Chan Ka Sik 2010. all rights reservedAdvanced Diploma in Marketing/Marketing and Brand Management – Introduction to Branding

Lecture 1Po Leung Kuk Community College Campus

Objectives of This Module

Module Introduction to Branding focuses on the role of branding in marketing management. The module covers the measurement of the

This Module


success of a brand, critical evaluation of branding strategies, and positioning a brand in the competitive marketplace.

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Structure of This Module

Class Attendance12 Lectures (10% - Class Participation)Two Assignments

Individual Assignment (10% - due Week 6)

This Module


g ( % )Group Assignment (Report: 15% - due Week 11; Presentation: 5% - Week 12)

Term-End Examination (60%)

Who am I?My Profile

KS ChanDo and Don’t - My expectation on class, assignments and presentation

Who am I?


How about you?NameProfession/Industry

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5 Whys in Brand Management

5 Whys Technique developed by Toyota for Root Cause AnalysisFor example:

Taking Introduction to Branding from Advanced

Brand Management


Taking Introduction to Branding from Advanced Diploma offered by HKU Space1st Why? Branding is importance to modern

marketing management2nd Why? A good brand can add value to

company3rd Why?.....

Advantages of having a BrandEasy for the seller to track down problems and process ordersProvide legal protection of unique product featuresGive an opportunity to attract loyal and profitable set of


Give an opportunity to attract loyal and profitable set of customersHelp to give a product category at different segments, having separate bundle of benefitsHelp build corporate imageMinimise harm to company reputation if the Brand fails

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Key to BrandingFor Branding Management to be successful, consumers must be convicted that there are meaningful differences among Brands in the

Key to Branding


product or service category.Consumer must not think that all brands in the category are the same.

Perception = Value Brand Loyalty: Motivate Desire to PurchasePerceived Quality: Satisfaction, Product Image and Product Quality


Consumer reasons for Brand ChoicePast experience & Peer Pressure/RecommendationPrice & QualityAdvertising/Media & Rating on Consumer ReportEnvironmental Performance……

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Example: SamsungUntil late-1990s, Samsung was far behind its rivals in both technology and response to market – Samsung was not only a mediocre manufacturer but also a poor marketer. The old identities for Samsung were also associated

ith l d d t f t h l i l l d

Example: Samsung


with low-end products from a technological laggard. The new identity, by Lippincott Mercer, communicated the added value of a technology leader, while maintaining elements that suggested honestly and longevity – quality that were unchanged. (Perception follows image)

Entering the 2000s, Samsung scores better than its competitors in predicting the future trends, decreasing its response time, and excelling its marketing muscle.Twin strategies of Samsung – Speed and Choice are i l t d i t th d B d I f


implanted into the revamped Brand Image of Samsung.

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What is Brand and Brand Management?Brand Management?

A Brand is a Name, Term, Sign, Symbol, or Design which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.The word "brand" is derived from the Old Norse


The word brand is derived from the Old Norse word brandr, meaning "to burn (i.e. branding of cattle)". It refers to the practice of producers burning their mark (or brand) onto their properties and products.

Meaning of Brand in Chinese:品牌是通过以上这些要素及一系列市场活动而表现出来的结果所形成的一种形象认知度，感觉，品质认知，以及通过


象认，觉，质认，过这些而表现出来的客户忠诚度，总体来讲它属于一种无形资产。所以这时候个品牌是作为一种无形资产出现的(http://baike.baidu.com/view/9013.htm?fr=ala0_1_1)

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Source: WorldBrandLab.com

Who owns the brand? ” The real owner of the brand is not the marketing or communication director… The brand is intrinsic to the product or service offered, and the needs to be supported by all operations”.


pp y pA NAME becomes a BRAND when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or service. It is the seller’s promise to deliver the same bundle of benefits/services consistently to buyers.

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Branding is always a two-way process, a dialogue between suppliers and customers to define a brand’s promise in a workable way. Each side plays a different, but vital, role.Great brands never change and change


Great brands never change, and change constantly. The core of what appeals to a customer – a brand’s meaning and values, its promise, and the satisfaction it gives – should be consistent, giving customers something to believe in and remain loyal to, over the long term.

The manifestation of a brand – external factors and internal factors – not only can, but must change.Kevin Roberts of Saatchi & Saatchi calls brands “lovemarks” - meaning that the best


brands lovemarks meaning that the best brand appeal to us because we love what they stand for. People is not always rational, more often emotions drive our behavior, including our purchasing pattern.

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It is a rational and emotional formula based on the sum of trust, relevance, and significance that relates people to a firm, a product, or a service throughout their life.A Manager’s goal must be to build Brand Equity


A Manager s goal must be to build Brand Equity A Brand can only be strong if it has a strong supply of loyal customersBrand Equity therefore can be defined as a measure of strength of consumers’ attachment to a Brand.

Brand MantrasBrand MantrasA Brand Mantras is an articulation of the ‘Heart and Soul’ of the Brand .

Brand Mantras are short three to five word phrases that capture the


five word phrases that capture the irrefutable essence or spirit of the Brand Positioning and Brand Values.

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Nike – Authentic Athletics Performance


Disney – Fun Family Entertainment


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How about HKU Space?


Brand ElementsBrand ElementsA variety of Brand Elements can be chosen that inherently enhance Brand Awareness or facilitate the formation of strong, favourable and


formation of strong, favourable and unique Brand Association.

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Brand Elements:Brand NameLogoSymbol


SymbolCharacterContent and PackagingSlogan

History and Development of Brand ManagementBrand Management


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The first brand-like marks, existing long before industrialisation and the emergence of distinct commercial brands, included monograms, earmarks, ceramic marks, hallmarks watermarks and furniture marks


hallmarks, watermarks and furniture marks.Brands show origin or ownership of goods.

Brands in the field of marketing originated in the 19th century with the advent of mass production, improvement of transportation and rise of packaged goods. Wh f t i t li d d ti f


When factories centralised production of household items, some of them branded their logo, extending the meaning of "brand" to that of trademark.Brand value depends on threshold of its target market.

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Also, products were marked by hand which made them difficult to attach values of brand to products in any consistent way. After Industrial Revolution, innovations in

d ti d k i d th


production, and packaging made the mass branding of goods possible – individual packages of branded goods became available for consumers to buy.Mass production and Expansion of Reach gave birth of Brand Management.

After the Industrial Revolution, manufacturers have bigger capacity, wider market and more diversified customer-base. Manufacturers needed to convince the

k t th t th bli ld l j t


market that the public could place just as much trust in the non-local product. Heniz, Campbell Soup, Coca-Cola and Quaker Oats were among the first products to be 'branded', in an effort to increase the consumer's familiarity with their products.

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The capacity to flexibly respond to consumer trends has been a part of post-Fordist economic organization since the 1970s.What is the relationship between


What is the relationship between Unique Selling Points (USPs) and Mass Production?

The period from late-19th century to mid-20th century was characterised by:

increased competition between relatively similar products


a more systematic use of advertising as well as packaging to make products more attractiveattach various kinds of ‘values’ and associations to their goods for differentiation from competitors.

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From there, manufacturers quickly learned to build their brand's identity and personality, such as youthfulness, fun or luxury. Thi b th ti k


This began the practice we now know as "branding" today, where the consumers buy "the brand" instead of the product. This trend continued to the 1980s, and is now quantified in concepts such as Brand Value and Brand Equity.

In 1988, for example, Philip Morris purchased Kraft for six times what the company was worth on paper; it was felt that what they really purchased was its brand name


brand name.On 2nd April 1993, the same Philip Morris reduced RSP of its products. The so-called Marlboro Friday illustrated how erosion of brand power of some megabrands.

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Naomi Klein’s (2000) No Logo drew special attention to the role of branding:

expanded spatial scope of this form of marketing into a wider array of


g ypublic spaces in the form of sponsorship, ‘viral’ marketing and more elaborate retail sites.

Rivalry between Production and Distribution:

Phase IProcurement

of Raw Materails

Manufacturing of Finished Products Logistics

Manufacturing Distribution Retailing

Procurement of Semi-Finished/Finished Products and Handling of Finished Products

Stocking up and Selling of Finished Products


Phase IIProcurement of Raw Materails

Phase IIIProcurement of Raw Materails

Logist-ics

Phase IV Logist-ics

Sales Promotion

Manufacturing and Supply Chain

Management Systems

Branding and Development of

Finished Products

Advertising & Promotion

Manufacturing of Finished Products

Branding of Finished Products Logistics Sales Promotion of Finished

ProductsStocking up and Selling

of Finished Products

Manufacturing of Finished Products

Branding of Finished Products

Advertising & Promotion Logistics

Sales Promotion of Finished

Products

Sales Promotion of Finished

Products

Sales Promotion of Finished Products

Merchandising of Finished Products

Logistics Merchandising of Finished Products

Source: Chan, 2008

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The cultivation of more or less abstract values around brands relates to a second new function of branding, which concerns its growing efforts to use


consumer affect, and socialised forms of exchange more generally, as sources of value.

By the late-1990s, brands and branding had taken on a significant number of new functions:

their status as indicators of ‘origin’ and t f lit di i i h d


guarantors of quality diminishedThe abovementioned functions are taken place by regulation of public authoritiesBrands: a mean or an end?

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Positioning of Brand in Marketing ManagementMarketing Management

5 Whys on Branding Revisit: What is the Positioning of Brand in Marketing Management?


Group Discussion: Personal BrandingPersonal Branding


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Takeaway of the LectureTakeaway of the Lecture



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and Brand Managementand Brand Management




Review of Lecture OneReview of Lecture One


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Possible Advantages of Branding Strategyof Branding Strategy

Key Brand Strategies:Line Extension – existing brand name extended to new sized in the existing product categoryBrand Extension – brand name extended to new product categories


categoriesMulti-brand – new brands in the same product categoryNew brand – new product in a different product categoryCo-brand – brands bearing two or more well know brand namesRepositioning of Brand – which might take a few years to face new competition and changing customer preferences

Strategic Brand Management involves the design and implementation of marketing programmes and activities to build, to measure and to manage Brand Equity.Strategic Brand Management process is defined


Strategic Brand Management process is defined as involving four main steps:

Identifying and Establishing Brand Positioning and valuesPlanning and Implementing Brand Marketing ProgrammesMeasuring and Interpreting Brand Performance Growing and Sustaining Brand Equity

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Recent Developments of Brand Managementof Brand Management

Some key recent developments affecting Brand Management:

Shift in Power in the Value ChainFragmentation of Markets and Media


Complex Brand Strategies and Relationship

Impacts of Telecommunication RevolutionInternet


Intensifying Market Competition – in both Price Competition and other competitive


pressures:Bias Against InnovationPressure to invest elsewhere – go overseasShort-term pressures

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Brand being product-plus (product-driven) to Brand being a concept


) g p(market-driven) Brand as core competence of company

Seven deadly sins of Brand Management (Keller, K. L., 2003):

Failure to fully understand the meaning of the BrandFailure to live up to the Brand promiseFailure to adequately support the Brand


Failure to adequately support the BrandFailure to be patient with the BrandFailure to adequately control the BrandFailure to properly balance consistency and changes with the BrandFailure to understand the complexity of Brand Equity Measurement and Management

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Some key strategic brand elements covered by this module include:

brand as corporate strategy/core competence of companyfi t d t


first mover advantagebrand renewal and revitalisationbrand naming and identitychallenger brandsbrand positioningemotional branding

Some key strategic brand elements covered by this module include:

service brandingbrand alliances/M&A/strategic lli / t hi / b di


alliances/partnership/co-brandingProtection of Intellectual Property (patents, indigenous knowledge, authenticity and trademarks)Images in conflict - Most corporations’ visual identities were currently created by several different actors, from industrial designers and agencies to freelance graphic designers.

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Brand PowerBrand PowerCustomer will change brands for price reasonsCustomer is satisfied. No reason to change.Customer is satisfied and would take pains to


get the Brand.Customer values the Brand and see it as a Friend.Customer is devoted to the Brand.

New Brand ChallengesChallenges

Brand Management is as difficult as ever:Savvy ConsumersIncreasing Market CompetitionDecreased effectiveness of traditional marketing tools and emergence of new


marketing tools and emergence of new marketing toolsComplex Brand and Product Portfolios

Brands are important as ever:Consumer need for SimplificationConsumer need for Risk Reduction

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The Customer/Brand ChallengeChallenge

Marketers should understand their:CustomersBrandsR l ti hi b t th T


Relationship between the Two

Group Discussion: Branding a NationBranding a Nation

Strategic Brand Management involves the design and implementation of marketing programmes and activities to build, to measure and to manage Brand Equity.Nation branding firstly introduced by Simon


Nation branding, firstly introduced by Simon Anholt, is theory and practice aiming to measure, build and manage the reputation of countries. It believes that symbolic value of products can affect economic activities of the country in certain extent. How to brand China?

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Briefing on Individual AssignmentIndividual Assignment




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Review of Lecture TwoMental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantra

Mixing and matching of brand elements

KEY CONCEPTSSTEPSIdentify and Establish

Brand Positioning and Values

Plan and Implement d k i

Review of Lecture Two


Integrating brand marketing activitiesLeveraging of secondary associations

Brand Value ChainBrand auditsBrand trackingBrand equity management systemBrand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalization

Grow and SustainBrand Equity

Brand Marketing Programs

Measure and InterpretBrand Performance

Re-defining BrandRe-defining BrandAuthenticity and RealBrands inhabit categories, but are not really of those categories. A great brand transcends categorization to stand for a


glarger, abstract meaning.

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On Branding:A composite of how consumers feel about a product, the personality they attribute to it, the trust they place in it. The Relationship between the product and its user the total


between the product and its user, the total experience a consumer has (Ogilvy & Mather)A Brand is the sum total of a customer’s experience of it – 360 degrees – emotional, sensory, physical contacts. On-going relationships build brands (Brand Week)

Brand EquityBrand EquityBrand Equity stresses the importance of Brand StrategyBrand Equity is said to be the difference between the perceived value and the intrinsic value - at the root of these marketing effects is consumers'


root of these marketing effects is consumers knowledge on product and brand. Power of a Brand resides in the minds of customers.Brand Equity is defined in terms of the marketing effects uniquely attributable to the Brand.

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Brand Equity needs to be nourished and replenished. If Brand is not well maintained, Brand Equity will be diluted or dissipated.Source of Brand Equity

Brand Image


Brand ImageBrand AwarenessLearning AdvantageConsideration AdvantageChoice Advantage

Challenges is to ensure customers have the right types of experiences with products and services and their marketing programmes to create the right brand knowledge structures:

Thoughts


ThoughtsFeelingsImagesPerceptionsAttitudes

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Brand Awareness

Brand Association


BrandLoyalty

Brand Positive Attitude

Brand Occasional users

Customer-based Brand EquityBrand Equity

ConceptDifferential EffectCustomer Brand KnowledgeCustomer Response to Brand Marketing


Determinants of Customer-based Brand EquityCustomer is aware of and familiar with the BrandCustomer olds some strong, favourable and unique brand associations in memory

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Customer-based Brand Equity as a ‘Bridge’:

Customer-based Brand Equity represents the ‘added value’ endowed to a product as a


result of past investments in the marketing of a brand.Customer-based Brand Equity provides direction and focus to future marketing activities.

Benefits of Customer-based Brand Equity:

Enjoy greater Brand Loyalty, Usage and AffinityCommand larger Price Premiums/ Capability of Initiating Price Competition


Initiating Price CompetitionTrade Leverage - Receive Greater Trade Cooperation and SupportReduced Marketing Costs and Increase Marketing Communication EffectivenessYield Licensing OpportunitiesSupport Brand Extension

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Customer-based Brand Equity Pyramid

Consumer-BrandResonance

Consumer Consumer

INTENSE, ACTIVE LOYALTY

RATIONAL & EMOTIONAL

Brand Equity Pyramid


Brand Salience

Judgments Feelings

BrandPerformance

BrandImagery

EMOTIONAL REACTIONS

POINTS-OF-PARITY &

POINTS-OF-DIFFERENCE

DEEP, BROAD BRAND

AWARENESS

Salience Dimensions (品牌特征 or品牌顯著性)Depth of Brand Awareness

Ease of Recognition & RecallStrength & Clarity of Category


Strength & Clarity of Category Membership

Breadth of Brand AwarenessPurchase ConsiderationConsumption Consideration

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Performance DimensionsPrimary Characteristics & Supplementary FeaturesProduct Reliability, Durability and


ServiceabilityService Effectiveness, Efficiency and EmpathyStyle and DesignPrice

Imagery DimensionsUser Profiles

Demographic & Psychographic characteristicsActual or AspirationalGroup Perceptions – Popularity


Purchase & Usage SituationsType of Channel, Specific Stories, Ease of PurchaseTime, Location, and Context of Usage

Personality & Values (Sincerity, Excitement, Competence, Sophistication & Ruggedness)

History, Heritage & ExperiencesNostalgia/Sanctuary & Memories

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Judgment DimensionsBrand Equity – Value & SatisfactionBrand Credibility – Expertise, Trustworthiness & Likability


Trustworthiness & LikabilityBrand Consideration – RelevanceBrand Superiority - Differentiation

Feeling DimensionsWarmthFunExcitement


ExcitementSecuritySocial ApprovalSelf-Respect

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Resonance DimensionsBehavioural Loyalty – Frequency & Amount of Repeat PurchaseAttitudinal Attachment – Brand Likability


yand Proud of BrandSense of Community – Kinship & AffiliationActive Engagement – Seeking Information and Joining Gathering

Brand-Product RelationshipRelationship

What is a Product?A Product is any offering by a company to a market that serves to satisfy customer needs and wants.


Object, Service and Idea which carry Commercial Value.

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Beverage

Water Non-Water


Non-Alcoholic Alcoholic

Dairy Coffee& Tea Juice Pop Wine Beer Spirits

Brands transform productsConsumers use both tangible and intangibleattributes to decide whether two products are different

Quality and Value


Brand ImagePerceptions of Brand Users

Intangible AttributesDifficult for Competitors to CopyMore likely to involve consumer emotionally A Product is any offering by a company to a market that serves to satisfy customer needs and wants.

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Should we start with Brand or Product in order to build the business?

Some model answers include:If your products are differentiable, start with them;Always start with brand;


Always start with brand;Brand and products just cannot be separated from one another.

Which answer is sound to you?



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Review of Lecture ThreeReview of Lecture Three


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Product Life CycleRelevant issues in PLC analysis

Determining the length and rate of change of the PLCIdentifying the current PLC stage and

Product Life Cycle


Identifying the current PLC stage and selecting the product strategy that corresponds to that stageAnticipating threats and finding opportunities for altering and extending the PLC

Product Life CycleProduct Lifecycle Management

System Lifecycle Marketing & Sales Engineering Logistics Finance

Ideation (idea generation)

Conceive Ideation Investment

DevelopmentDesign and develop

Concept Design Sourcing

Design Detailed Design Procurement

RealizeProduction,

construction or Advertising Tool Design Purchasing


Source: http://en.wikipedia.org/wiki/Product_lifecycle

procurementDistribution or

deliveryProduction Planning

Stock control Cash flow

Introduction Service Selling Manufacture Delivery PO SO admin

GrowthOperation,

maintenance and support

Sales Order processing

Maintenance Spare Parts

Mature Redesign Return

DeclineRetirement, phase‐out and disposal

Recycling

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New Product Development (NPD)Most new product development (NPD) is an improvement on existing productsFailure Rate of NPD


Success Rate of NPD is extremely low –less than 5% of NPD exists after one year launching“You have to kiss a lot of frogs to find a prince”

New Product Development (NPD)New-to-Us vs. New-to-MarketLess than 10% of new products are totally new concepts


y pObsolescence of Products and Shortening of Product Life Cycle

Technical ObsolescenceMarket/Planned Obsolescence

Merits of NPD

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NPD CycleIdea GenerationIdea ScreeningConcept DevelopmentConcept Testing


Concept TestingCon-joint Analysis (Valued Attributes by Consumers)Product Design and Branding of ProductBusiness Analysis (Sales Expectation; Breakeven Point and Cash Flow Projection)

Elements of Brand: Intrinsic Attributes of BrandIntrinsic Attributes of Brand

Intrinsic Attributes are those properties of a good or service that, when they are changed, they change the product (Szybillo & Jacoby, 1974).Non-distinguishing Intrinsic Attributes

Found in all branded articles of a product cat


Found in all branded articles of a product cat.For example, all bottled waters are in PET bottle

Distinguishing Intrinsic Attributes Intrinsic attributes found in particular brand onlySuch as Mineral Water vs. Distilled Water

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Preference or Hierarchy of AttributesAlthough a branded product might have many attributes, only one or part of attributes be relevant to customers.Therefore, customers will rank these attributes


,according to their own preferences.Irradiation Effect of Intrinsic Attributes

Attributes can influence each otherStudies on User Interface and Consumer Sensory Reflect

Example: Why Benz but not Lexus?

Elements of Brand: Extrinsic Attributes of BrandExtrinsic Attributes of Brand

Extrinsic Attributes are simply all those attributes of a branded article that cannot be considered part of the Intrinsic Attributes.Key elements:

Brand Name


Brand NameCountry-of-Origin Effect

PackagingInformation Available/DisclosurePriceCorporate Image

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4P/4C and Branding4P/4C and BrandingRevisiting concepts of 4Ps and 4Cs in Marketing Management:

Product CommodityP i C t


4Ps was coined by Jerome McCarthy in 1960.

Price CostPlace Channel

Promotion Communication

What is Marketing?What is the positioning of Brand Management in Marketing Management?


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STP of MarketingSTP of Marketing“Formula STP (segmentation, targeting and positioning) is the essence of strategic marketing (Kotler, 1994:93)”.Segmenting allows marketers to seek out a group of customers who share a similar set of wants, and “shapes the configuration of the value chain (Porter, 1985:53)“


1985:53) . Targeting can make sure that resource is fully utilised and company's objectives are met.Positioning is to let bundle of attributes join to form one concept which aims at capturing the essence of that which the target audience seeks in the product category.

1. Identifysegmentationvariables andsegment the

MarketSegmentation

3. Evaluateattractivenessof eachsegment

MarketTargeting

5. Identifypossible

positioningconcepts for

h t t

MarketPositioning


segment themarket

2. Develop profiles ofresultingsegments

segment

4. Select thetargetsegment(s)

each targetsegment

6. Select,develop, andcommunicate

the chosenpositioning

concept

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Segmentation and Brandingand Branding

Identifying bases for SegmentationSegmenting the MarketDeveloping Segment Profiles


Developing measure of segment attractivenessSelecting target segments

Demographic Segmentation –Variables include:

AgeGenderFamily Size or Life Cycle


Family Size or Life CycleIncome (and Disposable Expenditure)OccupationEducationReligionRaceGenerationNationality

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Behavioural Segmentation –Variables include:

OccasionsBenefitsU St t


User StatusUsage RateLoyalty StatusReadiness StageAttitude toward Product

Psychographic Segmentation – Divides customers into different groups based on Social Class, Lifestyle and Personality.4 groups of customers:

C tibl Hi hl lik l t it h b d


Convertible – Highly likely to switch brandsShallow – Not ready to switch but consider alternativesAverage – Comfortable with their choice, unlikely to switch brands in the near futureEntrenched – Loyalty to the Brand, Unlikely to change in the foreseeable future

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Positioning and Brandingand Branding

The Concept of Positioning is promoted by Al Ries & Jack Trout in their epic work,

“Positioning: The Battle of your Mind”.Positioning is to create an identity in target market segment for its product/brand.


“Position is not what you do to a product, it is what you do to the mind of a prospect (Ries & Trout, 1972)”Three kinds of Positioning:

Functional PositionsSymbolic PositionsExperiential Positions

How to position a brand in market place?Positioning Choices

Relative Price of the Brand/ProductWe believe pricing create some psychosocial effects to some particular groups of customers


effects to some particular groups of customers Low-Cost StrategyPremium StrategyPrestige StrategyRemember: NEVER do price cut until all marketing tools are found ineffective

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Positioning ChoicesIts Intrinsic Dimensions

“Water A contains xxxyyyyzzzzz” (Instrumental aspects)“After drinking Water A, you can feel 5 years


After drinking Water A, you can feel 5 years younger” (impressive aspects)“Mr. aaabbbbccccc is also fan of Water A” (Expressive aspects)

Differences between PLC and Brand Life Cycle is that after the Decline Stage, a brand can re-born through Re-positioning.

The process of creating a perception in the consumer’s mind regarding the nature of a company and its products relative to the competition.


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7 ways to achieve effective positioning:


POSITIONING

Differentiation and Brandingand Branding

Positioning choices (Pricing and Purchase motivation)

Differentiation:functional instrumental

Differentiation:functional impressive or expressive aimed at social

High


functional instrumental expressive aimed at social recognition

Identification:functional instrumental

Identification:functional impressive or

expressive aimed at no frills

Purchase Motivation

Price

Low

Negative Positive

Source: Riezebus, 2003: 59.

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Brand ImagesBrand ImagesBrand Image is a subjective mental picture of a Brand shared by a group of customersPerceptions, Recognition and Feeling vs. Brand ImageComponents of a Brand Image:


p gContent of a Brand Image – Manifest and Latent contentsAssociation of Content to Brand ImageImage Forming (Communication, Experiences and Peer Influences)Representation of Brand Image in Memory (Short-term store and long-term store)Image Transfer



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Review of Lecture FourReview of Lecture Four


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Choice of Route for Brand DevelopmentBrand Development

Brand Building is an expensive exercise.Among various Brand Building activities, Advertising is regarded as the most effective mean in promoting Brand among customers.Choice of Route for Brand Development:


pBudget for Brand Building and ROI of investment

Reach of Target Group and its Market Share TargetSize of Target Market SegmentLevel of Differentiation

How many GRPs are necessary?Share of Voice (SOV) vs. Share of Market (SOM)

High-Budget Route of Brand BuildingBrand Building

A deep-pocket company can afford high-budget route of Brand Building by the means of massive advertising campaign.Objective of advertising campaign is to make clear Brand Positioning to target groups.


Pull Strategy vs. Push StrategyBrand Life Cycle:

Introduction SamplingDevelopment Advertising on Differential BenefitsMature Advertising against CopycatsDecline Repositioning of Brand

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Low-Budget Route of Brand BuildingBrand Building

For startups or companies without much A&P budget, high-budget route is not an option to them. By making good use of some available marketing tools on hand, such as Brand Name and Packaging Design those companies can also be


Packaging Design, those companies can also be used for Branding purposes in a certain extent.Remember: all Great Brands are nobody in the very beginning and Goliath is not always the winner.

Low-Budget Route of Brand Building:

Brand NameBrand Name

Joyce and Juliet Principle:A well-chosen Brand Name can transfer associations of the name to Brand Equity –Joyce Principle.

For example, Bonaqua can make customers


For example, Bonaqua can make customers associating to high-quality bottled water products

However, an irrelevant Brand Name can also impress customers favourable, provided that sufficient marketing communications have been made.

Yellow Tail and wine?

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Low-Budget Route of Brand Building:

PackagingPackaging

Packaging is not only provide protection and convenience to food products itself, packaging is also a carrier of information, and give cues on natural and quality of the product (Grunert, 2006:164).


)Packaging serve logistic functions, marketing functions and also bear eco-friendliness implications; and it also forms part of competitiveness of finished products and companies themselves.

Active and Passive roles of Packaging:Active role of Packaging – when packaging design can contribute to Brand Image

For example, Bonaqua can make customers associating to high-quality bottled water products


g g q y pPassive role of Packaging – when packaging serve as a signal function for customers to identify the brand at given circumstances

Yellow Tail and wine?

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Packaging design of Absolut Vodka:


Above-the-Line vs.Below-the-LineBelow-the-Line

Above-the-Line means promotions for enhancing Brand Awareness among mass audience. Therefore, common ATL campaigns involve uses of mass media.


While, Below-the-Line promotions target particular groups of customers and affect their intention of making purchase decision.Marketing mix of ATL and BTL for a low-budget route of Brand Building are?

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Qualification Mark and External AccreditationExternal Accreditation

Needs for Qualification Mark and External Accreditation are?3 levels of protected status of foods in the EU:

Protected Designation of Originfood products that are produced within a particular geographical area,


food products that are produced within a particular geographical area, and must have features and characteristics due to that area;

Protected Geographical Indicationfood products that are produced within a particular geographical area, and with a reputation, features or certain qualities attribute to that area;

Traditional Speciality Guaranteedfood products that are traditional or have customary names and a set of attributes distinguishing from other similar products.

Private BrandPrivate BrandSainsbury’s (UK) started retail labels in 1869, as had the Co-op in France in 1929. The real rise of them in modern times started in the 1920s when retailers noticed a shrinking profit margin for branded goods


margin for branded goods. According to Strasser (1989), until the mid-1920s they thought they also paid for the advertising costs of national (manufacturer) brands. Wholesalers were even more reluctant, since they were losing their power over branding.

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During the 1970s, retail brands attracted more attention, but they were often regarded as cheap and low-quality products.The French retailer Carrefour, however, was a pioneer in Europe and introduced produits libres


pioneer in Europe and introduced produits libres(free products) in 1976. These brands were known as banner brands – umbrella brands, and they were a new type of brand. Carrefour wanted to show that their products could be as good as manufacturer’s strong brand but without a brand name and with lower prices.

Generics were seen as extensions of their labels and competed with them and not with the manufacturer brands.The increasing scale and internationalization of retailers has significantly changed their relative


retailers has significantly changed their relative power with respect to the manufacturers. Retailers are now following the manufacturers and becoming international and multinational retail chains. And in some cases, beginning to exceed considerably the scope and flexibility of today’s multinational brands.

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Private Label Present: Status Reduction (improved); Brand Loyalty toward Manufacturer Reduction; Convenience is the name of the game;


gWe all love a Bargain; Trading Up (of Private Brand); Involvement’ Freshness;

Health.



62






Review of Lecture FiveReview of Lecture FiveNeeds of

CustomersForms of

WantsAttributesOf Brands

SpecificationOf Products

CompetingN d

CompetingF t

CompetingB d

CompetingS t


Needs Format BrandSegment

TransformInto

Wants

MarketSegment

ProductCategories

BrandABC$$$

63

Brand Name StrategiesStrategies

Monolithic Brand Name Strategy1 Brand Name and 1 Visual Style among various product category

Dualistic Brand Name Strategy


2 Brand Names for same product categoryMultilitnic Brand Name Strategy

Brands have their own name

Brand Name Strategies of Volkswagenof Volkswagen


64

Considerations of Deciding Brand NameDeciding Brand Name

Size of Marketing Comm. BudgetLower the budget, Higher Joyce Principle

Brand-Product RelationshipConcerns on Brand Extension and Positioning


Concerns on Brand Extension and Positioning

Competitive Position of the BrandBrand name in indicating newness to market, class of products and associations

Use in other language areaMeanings of a Brand Name in other languages

Classification of Brand NamesBrand Names

Fictitious

虚构的

Associative

联想的

Suggestive

暗示的

Descriptive

描述性的


Legal protection Product relatedness

65

Fictitious brand names do not refer to the product at all:

The brand name does not refer to the product at all – e.g. Kodak, Rolex


Name of the family who started the company – e.g. Ford, AddidasName of the place of origin – TabascoForeign names – e.g. Nike, XeroxAbbreviations – e.g. BMW, Fiat

Associative brand names do not directly refer to the product but do contribute to the desired experience of consuming the brand:


gFor example, Venetian (casino), Name-of-places (restaurants), After Eight (chocolate mints), Timeout (chocolate snack)

66

Suggestive names indirectly refer to the product or the advantages of consuming the product:

Head & Shoulders (dandruff shampoo)


Head & Shoulders (dandruff shampoo), Crown/Camry/Corolla (automobile), I Kleenex (tissues), Ray-ban (sunglasses)

Descriptive names refer to the functionality of the brand or the tangible advantages of the product:

Bank of China


Pros: Low consumer involvement/high perceived quality; easy to recognise and understandCons: Boring, difficult to use globally, difficult to protect legally

67

Brand Name Development ProcessDevelopment Process

1. Agency briefing: market position and competitors, brand-product relationship, brand-name strategy

2. Creative process: brainstorming


3. Names tested: strategic criteria, linguistic criteria, legal criteria (5 to 10 brand names)

4. Feasibility research: consumer acceptance tested

5. Brand name choice and registration

Change of Brand NamesNames

Reasons of changing Brand Names:Brand Name Association diminish Brand Value

Kentucky Fried Chicken -> KFCSub-brand’s value exceeds mother brand

Tancho -> Mandom (brand owner of Gatsby)


Tancho > Mandom (brand owner of Gatsby)Brand ExtensionGoes overseas (pronunciation/positioning)As a result of M&ALegally problematic

Before legal settlement with The Beatles, Apple cannot use its brand to music industries

68

Effective Brand NamesNames

Brand names should be emotional for certain productsBrand name should be legally protectableAvoid excessive use of initialsDevelop brand names that are effective


pinternationallyThe brand name should be simpleThe brand name should be distinctiveThe brand name should be meaningfulThe brand name should be compatible with the product

Effective Brand Names: linguistic aspectslinguistic aspects

Repetition of consonants: KitKat, Range RoverRepetition of vowels: CoronaI iti l l i b d k t h d


Initial plosives: b, d, k, p, t or hard sounding c or g, Bic, Dior, Gucci, KodakShortening of brand names: Coke, KFC

69

Effective Brand Names: Brand AssociationBrand Association

Repetition of consonants - KitKat, Range RoverNames of animals – CrocodileN f f l G t W ll


Names of famous places - Great WallNames of regions – ChampagneNames of colours - Orange

Brand Name Recognition vs Brand Name Recall

Recognition

vs. Brand Name RecallHigh

Graveyard Brand


Recall (evoked set)

g(awareness only)

LowLow High

Niche brand

70

Brand Name SpectrumBrand Name Spectrum


Company as brand name

Strong company endorsement

Weak company endorsement

Individual brand name

‘Incomplete’ Brand Name: Principle of ClosurePrinciple of Closure

‘Closure’ implies that consumers tend to perceive an incomplete picture as complete. This can increase consumer involvement and strengthen the


involvement and strengthen the impact of a brand nameFor example: Esprit, FCUK

71

Role of Design inBrand ManagementBrand Management

A package can be more important than the product itself. For some successful products, the package had become the product and brand identity.


Design as a Brand Instrument can:IdentificationDifferentiationTransfer of Material Brand ValuesTransfer of Immaterial Brand Values

Brand Attributes in which Design playswhich Design plays

Product DesignPackaging DesignCorporate DesignLogo Design


Logo DesignIdentificationDifferentiationCommunication of Brand ValuesAttractivenessFamiliarity, or elements make customers familiar with

72

Shape and ColourShape and ColourShape

“Gestalt Theory” – the whole is greater than the sum of its parts

Colour


Tint of HueToneBrightness

Evolution of Brands/LogosBrands/Logos


Source: http://www.instantshift.com/2009/01/29/20-corporate-brand-logo-evolution/

73


Source: http://www.instantshift.com/2009/01/29/20-corporate-brand-logo-evolution/



74






Review of Lecture SixReview of Lecture Six


75

Advertising as a Marketing InstrumentMarketing Instrument

Advertising can provide information by making consumers familiar with the brand/brand name;Advertising can highlight the differential


g g gadvantages of a product;Advertising can act as a reminder on the advantages of the product;Advertising is inciting consumer to purchasing behaviour.

However, please be aware of followings:Advertising might has delayed effect on sales of products;Absolute effect of Advertising indicates

l ti f d i t d l lt i


correlation of ad. inputs and sales result is not necessarily in equal portion;Direct result of Advertising depends on execution of Advertising and choice of Advertising means.

76

Objectives of AdvertisingAdvertising

Increase brand awareness (and eventually turnover) without altering price dimension of positioning.During Planning Process, identification


g g ,of prime target audience is important:

Who is the most influential in the decision processWho you think you can influence

Again, we need to rethink: “Pull” vs. “Push”

Customer-focused ObjectivesCentral/High Involvement/Thinking routePeripheral/Low Involvement/Feeling route

Exposure-oriented Objectives


Exposure oriented ObjectivesIntensive Reach/Frequency/GRP inputs dictates effectiveness

77

Functions of AdvertisingAdvertising

Provision of information to customersReminding role of advertisingFamiliarising of the BrandCreation of Brand added value


Creation of Brand-added valueInciting customers’ purchase behaviour

Two Forms of Advertising ExecutionAdvertising Execution

Informational Advertising (Functional)Product QualityDistinguishing Key Attributes (USPs)“Slice-of-life” advertising


gTransformational Advertising (Expressive)

Conveying a ‘feeling’ to customersTransforming use experiences in a positive wayIncreasing Psychosocial communicative value of the brand

78

Operating Aspects of AdvertisingAdvertising

For informational ad, problem-solving context is effective in attracting target customer groups:

Teaser Ad http://www.youtube.com/watch?v=PbEatXPDkTE

Reason-Why ad http://www.youtube.com/watch?v=3VkTOlVo0kE&feature=related

P t St l Ad


Presenter-Style Ad http://www.youtube.com/watch?v=0ljL3-u0pcY

Testimonial Ad http://www.youtube.com/watch?v=X5dqU6v4SA8&NR=1

Slice-of-Life Ad http://www.youtube.com/watch?v=wZv44LjztFU

For transformational ad, advertisement should be interesting, easy to identify, and call up for authentic emotion: http://www.youtube.com/watch?v=actzm5fI0d0

The most successfulAdvertising Campaign in

a decadea decadehttp://www.youtube.com/watch?v=m-aQnkyyNIUhttp://www.youtube.com/watch?v=xFzYiLDa6mg&NR=1http://www.youtube.com/watch?v=M1ItxNWf2-k&feature=relatedhttp://www.youtube.com/watch?v=oChEaJskWy0&NR=1


http://www.youtube.com/watch?v oChEaJskWy0&NR 1http://www.youtube.com/watch?v=t9iyB0gZB2s&feature=related

http://www.youtube.com/watch?v=mggxOaGXh4w&feature=related

79

Time Period of Effects of AdvertisingAdvertising

Wear-in of Advertising (An Ad has an effect on the cognitive, affective or behaviourial levels)Wear-out of Advertising (Dissipation of


g ( pWear-in of Advertising)Longevity of Wear-in depends on:

Numbers of times that a consumer is exposed to an AdAmount of time between exposures to an Ad

Advertising BudgetsAdvertising BudgetsTrade-off among different A&P comboPercentage-of-SalesShare of Voice vs. Share of Market


80

Evaluating Advertising CopyAdvertising Copy

Consumer JuryPortfolio TestsReadability TestsTheatre TestsLaboratory Stores


Laboratory StoresWelcome to the real world

Inquiry TestsRecall TestsRecognition TestsSales Tests

Milestones in Media HistoryMedia History

1275 Invention of Paper by Chinese1452 Gutenberg’s Bible printing project1631 First classified ad in a French paper1841 First ad agency born in the US1882 Ivory’s “99 & 44/100% Pure” brand ad1919 Short-wave radio was invented


1920s Full-colour ad in magazines in the US1928 Television sets entered household1939 Regular TV broadcast began1954 Regular colour TV broadcast began1972 TV game (“Pong”) was introduced 1986 Dennis Jennings introduced TCP/IP protocols1994 Internet became available to private

81

Old Media vs New Mediavs. New Media

“The internet is this big, huge hurricane. The only constant in that storm is the customers.”

Jeffrey Bezos, at interview with


y ,Businessweek, 16th Sept

1999.New media are those media only doing some key things “better” than their predecessors.

The expanding capability of New media enlarged the ways marketers can communicate with customers.However, New media also has their own


,weaknesses as well as advantages.What is the weaknesses of Internet?

82

Story-TellingStory-TellingThree models of asserting expectations about the future based on personal experiences:

Familiarity, Confidence and TrustRelationship between Risk and BrandDeveloping perceptions of trust in symbolic


Developing perceptions of trust in symbolic brands involves the development of a consumer-brand relationship based largely on personal experience with the Brand.This requires the brand to engage in two-way communications with consumers in building a sense of intimacy – “tell a story”

Every brand needs to tell a story. People love a great story, and the best storytellers have an uncanny ability to forge a personal, emotional bond with


their audience. The experience of enjoying a good story is a powerful one that pulls in all of our senses so that we feel as if we ourselves are actually living the story.

83

Stories helped shape the identity of any entity, gave it values and boundaries and helped established its reputation among rivals


reputation among rivals“Who we are”“What we stand for”

The “American Dream” is a classic example of a man, who, by working hard goes rags to riches and fulfils his dream


dream. It continues to seduce people from all over the world who continue to head for America in search of happiness.

84

Four elements of Story-Telling

MessageStory-telling is about using stories to communicate messages that reflect positively on the brand. A clearly-defined message is necessaryAmong storytellers the central message or

Story-Telling


Among storytellers, the central message, or premise of the story, is an ideological or moral statement that works as a central theme throughout the story. Try to stick to one message per story. If you want to communicate more than that, you need to prioritise.

ConflictToo much harmony and not enough conflict makes for a story that is about as exciting as watching paint dry. Conflict is the driving force of a good story No


Conflict is the driving force of a good story. No conflict, no story. It lies in human nature. Any storytellers get our message across through conflict and its resolution. The greater the conflict the more dramatic the story will be. However, the conflict should not get so over-the-top that it becomes confusing.

85

CharacterAlthough conflict marks the turning point in the story, but in order for this conflict to play out, you need a cast of interacting and compelling characters.


The classic fairly-tale is build on a fixed structure when each character has a specific role to play in the story, and each person supplements each other and forms an active part of the story. This classic structure (Hero+Supporter+Adversary= Goal+Benefactor+Beneficiary) can be found in storytelling traditions throughout the Western world.

PlotOnce message, conflict and cast of characters are all in place, it is time to think about how story should progress. The flow of the story and its events are vital to the


The flow of the story and its events are vital to the audience’s experience. It must have a precise structure to propel it forward and maintain audience interest. Generally speaking a traditional story can be segmented into three parts: Beginning, Middle and End.

86


Legal Protection of BrandBrand

Trademark is a distinctive sign or indicator used by an entity to identify that the products to users with which the trademark appears originate from a unique source, and to distinguish its products from those of other entities.


A trademark is designated by the following symbols:

™ - for an unregistered trademark used to brand goodsSM - for an unregistered service mark used to brand goods® - for a registered trademark

87

What a Trademark coversTrademark covers

Word MarksCombination of CharactersCombination of NumbersWords written in a certain styleL /Sl /C l


Logo/Slogan/ColourLayout on Packaging/Packaging DesignProduct DesignGesture TrademarkSoundmarkScent Trademark

Trademark InfringementTrademark InfringementGenerally speaking, there are 3 types of Trademark Infringements:

Identical Trademark for the same type of products;Similar Trademark for similar products;


Similar Trademark for similar products;Completely Different Products

88

In mainland China, Trademark Infringements are identified as (http://baike.baidu.com/view/535233.htm?fr=ala0_1):

未经商标注册人的许可，在同一种商品或者类似商品上使用与其注册商标相同或者近似的商标的。该条又可分成四种商标侵权的形式：

被控侵权的商标与注册商标相同，被控侵权商标所使用的商品与该注


册商标所核定使用的商品也属于同一种类。

被控侵权的商标与注册商标相同，被控侵权商标所使用的商品与该注册商标所核定使用的商品类似。

被控侵权的商标与注册商标近似，被控侵权商标所使用的商标与该注册商标所核定使用的商品属于同一种类。

被控侵权的商标与注册商标近似，被控侵权商标所使用的商品与该注册商标所核定使用的商品相类似。



89






Review of Lecture SevenReview of Lecture Seven


90

Instruments of Brand StrategyBrand Strategy

A product conforming to certain quality standardsA legally protected brand name and brand sign


gA legally protected designBrand value-enhancing marketing communication

Single Brand Strategy - Line Extension- Line Extension

For a well established brand, line extension is a handy way in market penetration:

Vertical Extension – introduction of new product variants on the same price dimensionHorizontal Extension - introduction of new variants


which differ from each other on price dimensionObjectives of line extension might be offensive-, defensive- or rejuvenation-oriented.What are disadvantages of a Single Brand Strategy?

91

Line Extension over Product Life CycleProduct Life Cycle

Turnover

B

C

D


Profit

Introduction

TimeGrowth Mature Decline

A

Adoption of InnovationsInnovations

2 5% 13 %

34%Early

majority

34%Late

majority 16%


2.5%Innovators

13.5%Early

adopters

majority majority 16%Laggards

Time of adoption innovations

92

Environment of Brand Management

Legal/Political Economic

Company

GeneralPublic

Brand Management


Social/CulturalTechnological/

Natural

Competitors

Suppliers Interm-ediaries

Customers

Micro-Environments

Macro-Environments

Competitive Forces ofMichael PorterMichael Porter

Supply Chain Co-operation

BrandingInnovation

Suppliers


Retailer

Segmentation Targeting Relationship

Branding

Positioning

Innovation

Cost ControlDirect competitors

Customers/ Consumers

Imitatory substitutes

Source: Based on Porter (1985)’s Competition Model

93

Three Generic Strategies of Competition

According to Porter, three generic strategies are:

Cost Leadership, Differentiation

of Competition

Firm Infrastructure

Human Resources

Technology Development


Differentiation,Focus.

Source: Based on Porter (1985)’s Value Chain Model

Supply Chain

Store Location and Design

Marketing and Promotion

Store Operation

Service

Procurement

Multi Brand Strategy -Brand ExtensionBrand Extension

Product Management vs. Brand Management vs. Category Management

Advantages of Category Management:


g g y gStimulate internal competition towards maximum achievementDevelop a balanced portfolio of brandsKeep cannibalisation between brands minimal

94

Advantages of handling a portfolio of brands (Barwise & Robertson, 1992):

Consumers can make a choice among offerings of a single organisationIt can benefit from economies of scale


Exploitation of multi-brands can result in certain strategic advantages (e.g. barrier of entrance for competitors)Exploitation of multi-brands gives a larger degree of risk spreadSynergy effects from competition among internal brandsInternal competition provides a more solid basis for brand extension

Brands in a Brand PortfolioBrand Portfolio

Point of Connection of AB InBev’s 200+ beer brands over the world:

Type of Brand Bastion Brand Prestige Brand Flanker Brand Fighter Brand


Sample

Financial Inputs

High High low Moderate

Strategic Importance

High Moderate High High

Management Attention

High Moderate Moderate low

95

Brand Portfolio of Accor Group:


Source: http://www.accor.com

Strategies for building a Brand Portfolioa Brand Portfolio

A company can select combination of different strategies upon market environment:

Strategy SpeedMarket Position Investment


Brand Development Slow Moderate Moderate

Brand Acquisition Quick High High

Brand Alliance Moderate Low Low

96

Rationalisation of Brand PortfolioBrand Portfolio

Backgrounds of Rationalisation of Brand Portfolio since the 1990s:

After consolidation in different market segments, value of a lesser-tier brand diminishes;Brand building is becoming more expensive;


Brand building is becoming more expensive;Pressure from different stakeholders

Financial evaluation of performance of Brands vs. Strategic objectives of Brands

BCG Growth-Share MatrixGrowth-Share Matrix

20%

AB

C

D

StarQuestion

Mark

Growth Rate


10%

0 10X1

0.1X

FE

G

Cashcow Dog

Comparative Market Share

97

International Aspects ofBrand Portfolio ManagementBrand Portfolio Management

Motives for International Brand StrategyExport (Trading) vs. global marketing developmentFor example: P&G operation and Coca-Cola operations in Japan


operations in Japan

Standardisation vs. AdaptationDiverging Process and Converging Process

A game of Speed in international marketplace



98






Review of Lecture EightReview of Lecture Eight


99

Extension StrategyExtension StrategyFlagship Product vs. Extended ProductsReasons for Extension Strategy

Rate of success of a new brand is low;Marketing costs of a new brand is high;


g g ;Average marketing communication investments will be lowered;Launching costs of new products is lower;Quicker launching, rejuvenation of mature brands and risk aversion

Critical Success Factors for Extension:Perceived performance of extended must be consistent with flagship brandNo conflict of Psychosocial meaning among flagship brand and extended brands


g pThe higher the Brand-name awareness of flagship brand, the higher the chance of success of extended brands

Besides, product relatedness and similarity of target groups also affect success of extended brands

100

Six applications of Extension StrategyExtension Strategy

Uses of an unique features of flagship brand into extended brandsOffer of same product in another formOffer of complementary productsOffer of substitute products


Offer of substitute productsApplication of unique expertise into other product categoryUses of brand name/reputation when penetrating into other product category(Source: Riezebos, 2005:221)

Hazards related to Extension StrategyExtension StrategyCannibalisation

Sales of Flagship Brand being affectedNo Transfer of Associations

Extended Product becomes irrelevant in


the marketNegative Evaluation of extended product

Negative impact onto Flagship BrandBrand Dilution

USP of Flagship Brand diminishes

101

Strong Company EndorsementEndorsement

AdvantagesCheaper to introduce new brandsQuicker to introduce new brandsCumulative development of Brand Equity


DisadvantagesHigh risk exposure, if one brand failsLack of freedom to create a new brandReduces opportunity for diversification

Weak Company EndorsementEndorsement

AdvantagesAllows freedom for creating new brandsMore opportunity for diversificationReduced risk, if new brand fails then little h t i ti b d


harm to existing brands

DisadvantagesExpensive to introduce new brandsTakes time to build new brand awarenessNo cumulative development of brand equity

102

Brand Manager’s Best CardBest Card

A Brand manager can choose from three strategies when launching a new product:

Extension Strategy – new product is launched under an existing brand nameEndorsement Strategy – new product is launched under a new brand name and with endorsement


under a new brand name and with endorsement from flagship brandMulti-Brand Strategy – new product is launched under a brand new brand

Evaluation Criteria: Fit with existing brand; Marketing Budget; Rate of Success and Negative Spill-over

When facing CrisisWhen facing CrisisA complaint can probably look at being the last chance given by a real customer; and a crisis is the last chance for company to make a change for the better.When reviewing a crisis, company needs to i ti t t f th i i d t


investigate root causes of the crisis are due to intrinsic attributes of the product (i.e. product tinkering or product tampering is necessary) or because of wanted states of extrinsic attributes (i.e. marketing communication is the key).

103

Case Study:Johnson & Johnson and

TylenolTylenolIn 1982, J&J’s Tylenol accounted for 35% in US’s OTC analgesic (and 15% of NCBA of J&J).One individual succeeded in lacing the drug with cyanide. Seven people died as a result and public associated Tylenol as poisonous.


J&J recalled all Tylenol from the market and tampered packaging for contamination-proof.Despite fall in sales and costs involved in recall and improvement, J&J won praise for the quick action, and recovered 70% of its market share.

Crisis ManagementCrisis ManagementPlanning

Creating escalation rules for the organisationCreating a Crisis Team

Incident ResponseMaking sure organisation can work properly under a crisisI f ti h ld b th d d l d b th


Information should be gathered and analyzed by the Crisis TeamCommand, Control and Communication

Business ContinuityPreparing for Disaster Recovery (Backup)Providing a Word about EvidenceCrisis management focuses on long term effect

104

Group Discussion: When a Brand lose its shinesWhen a Brand lose its shines




105






Review of Lecture NineReview of Lecture Nine


106

Importance of Brand to any organisationto any organisation

Nowadays, Brand is commonly recognised as an important factor determining success of a company, or “lifeblood” of an organisation.At the same time, the increasing market-to-book value of listed companies indicate that over half of


value of listed companies indicate that over half of market value of these companies is based on intangible assets:

Brand EquityOrganisational factors and technical superiorityIndustrial factors such as monopolistic rights granted

Among the abovementioned three intangible assets, Brand is regarded as the most important since it is brand-added value contribute to higher top-line of the company (consumers is willing to pa higher price for the product).


p g p p )At the same time, companies with high brand equity can enjoy better position in strategic and management advantages.

107

Brand Equity revisitedBrand Equity revisitedBrand Equity can be defined as:

Brand Equity is the extent to which a brand is valuable to the organisation; this value can be manifested in term of financial, strategic and managerial advantages.


g g

Components of Brand EquityBrand Equity

Generally speaking, brand-added value determines brand equity.However, other factors such as distribution and penetration of products, and price difference are also affecting brand equity of a product


also affecting brand equity of a product.Four components of brand equity are known as:

Size of market share (penetration of product)Stability of market share (repeated purchase)Margin/GP of productsRight of ownership related to brand elements

108

Brand MonitorBrand Monitor


Source: Riezebos, 2005:271

Difficulties in measuring Brand EquityBrand Equity

Although psychometric measures of Brand Equity may be compared, theses measures do not necessarily translate to financial performance easily, due to:

They are relative measures


They are relative measuresDifferent types of measures cannot compare with others directly

Furthermore, these measures do not generate a metric that links Brand Equity to financial performance

109

Importance in measuringBrand EquityBrand Equity

By establishing an effective Brand Equity measurement system, it can help the organisation:

Increased effectiveness of marketing organisation and planningROI tracking


ROI trackingJustification for marketing programs, budgets, and valueImproved marketing resource allocationAccountability to senior management and BOD

Criteria of good measures of Brand Equityof Brand Equity

Similar result should be arrived by different people applying same set of measurementQuantifiable and based on readily available data that can be monitored across brands and product categoriesMeasurements can meet definition of an element of a


financial statementA single number, to enable easy tracking and communicationIntuitive and credible to senior managementCalibrated to include market and competitive effectsAllows for comparisons across industries

110

Financial Brand Valuation:M th d b d tiMethods based on consumer perceptions

Indifference MethodBy conducting rounds of testing with consumers on price premium among products, one can decide price premium of each product

Brand/Price Trade-off Method


Consumers have chance in matching price elements and product attributes. At the end, added price of a product can be determined

Dollar Metric MethodIndicating price premium between branded product and no fill product with same attributes

Financial Brand Valuation:M th d b d ti i i lMethods based on accounting principles

Cost-price approachBrand value is determined by historic costs invested into the Brand

Market-price approachBrand value is determined by replacement costs


a d a ue s dete ed by ep ace e t costsof brand at market price

Income ApproachBy translating incomes (1- historic earnings and future; 2- net cash value) of brand into present value of Brand Equity

111

Financial Brand Valuation:Comparison of two methodsComparison of two methodsMethod Consumer perceptions method Accounting method

ProsGives clear insight into added‐value of brand

Be more 'objective'

Perception is not as objective as price is; and it is difficult to translate them into price

Cost allocation is not as objective as expected


Cons

No brand stimulation of added value is not realistic as consumers are willing to pay for the difference in reality

Replacement costs cannot be determined in some product category

Consumer perception can consider only one components of brand equity at once

Valuation is difficult if income is not stable

Brand Valuation:InterBrand ApproachInterBrand Approach

InterBrand measure two sets of components:Earnings attributed to the brand: two year weighted average of the earnings attributed to the brandBrand Strength

Market leadershipBrand stability


Brand stabilityCurrent market prospectBrand extension possibilitiesInternationalisation potentialAdaptability over timeBrand supportLegal protection

Brand strength is correlated to P/E ratio, and then is linked to Brand Earnings via historical data

112

Brand AuditBrand AuditWhen measuring Brand Equity, one should:

Conducting brand auditsBrand InventoryBrand Exploratory

Developing tracking procedures


Developing tracking proceduresDesigning a brand equity management system

Brand Equity ChartersBrand Equity ReportsBrand Equity Overseers

A brand audit is a comprehensive examination of a brand involving activities to assess the health of the brand, uncover its sources of equity and suggest ways to improve and leverage that equityA brand audit requires understanding sources of


brand equity from the perspective of both the firm and the consumerSpecifically, the brand audit consists of two activities:

Brand InventoryBrand Exploratory

113

Brand InventoryBrand InventoryThe purpose of the brand inventory is to provide a complete, up-to-date profile of how all the products sold by a company are marketed and branded


For each product, the relevant brand elements must be identified, as well as the supporting marketing program. This information should be summarised both visually and verbally

Brand ExploratoryBrand ExploratoryThe brand exploratory is research activity designed to identify potential sources of brand equityThe brand exploratory provides detailed information as to what consumers think of and feel about the brandTo allow a broad range of issues to be covered and also permit those issues to be pursued in depth qualitative


permit those issues to be pursued in-depth, qualitative research techniques are often employed firstTo provide a more specific assessment of the sources of brand equity, a follow-up quantitative phase is often necessary

114




115






Review of Lecture TenReview of Lecture Ten

Analyzing Brand Performance

Product life cycleanalysis

Financialanalysis

Product grid analysis


Performance

Researchstudies

Standardizedinformation

services

BrandPositioning

maps

116

Market Research ABCProcess of conducting market research:

Define the problemDefine the research objectives

Market Research ABC


jDetermine the sources of informationCollect the informationAnalyse the informationPresent the findings

Market Research:Define the problem

Define the problem:Where are we?How did we get here?Where should we be?

Define the problem


Where should we be?How would we get there?

117

Market Research:Define the ObjectivesDefine the research objectives:

Research Objectives must be SMART:SpecificMeasurable

Define the Objectives


MeasurableAttainableRealisticTimely

Market Analysis ABCSome common Strategic Analysis tools are:

PEST AnalysisSWOT Analysis

Market Analysis ABC


SWOT AnalysisCompetitive Forces Analysis

118

Market Analysis:PEST Analysis

PEST focuses on the political, sociocultural, economic and technological forces at work in the macro-environmental:

PEST Analysis


What environmental factors are currently affecting the company?

Which are the most important?What new factors may be relevant in

the future?


Typical Political/Legal factors:Change of GovernmentTax PoliciesEmployment Law (minimum wage)T di H R t i ti

PEST Analysis


Trading Hours RestrictionsPlanning GuidelinesMonopoly LegislationTerms of Trade CodesBargain Offer RegulationsEnvironmental Laws

119


Typical Economic factors:GNP TrendsRegional EconomiesDisposable IncomesS i R ti

PEST Analysis


Saving RatioInterest RatesExchange RatesFuel CostsEmployment LevelsNational/International Competition


Typical Sociocultural factors:Environmentalism/ConsumerismChanging work patternsIncome DistributionH lid d L i Ti

PEST Analysis


Holiday and Leisure TimeExecrise/Sport ParticipationFood ConcernsLevel of EducationAgeing PopulationDelays in Starting Family

120


Typical Technological factors:High-Tech productsFood processing/presentationInternet/interactive TVEl t i F d T f

PEST Analysis


Electronic Funds TransferWarehouse TechnologyGreener VehiclesStaellite TrackingInternational TeleconferencingSecurity Technologies

Market Analysis:SWOT Analysis

SWOT Analysis:SWOT Analysis is systematic

evaluation of company’s strengths and weakness. On the top of it, it reviews

SWOT Analysis


p ,opportunities and threats within the competitive environment.

121


SWOT Analysis:Both Strengths and Weaknesses

are internal factors illustrating company’s strategic capabilities.

SWOT Analysis


p y g pBoth Opportunities and Threats are

external/uncontrollable factors company can respond to, given its particular Strengths and Weakness.


Sample: SWOT Analysis for Wellcome:

SWOT Analysis

1) Largest in numbers of outlets

2) Backed by Jardine Group

3) Excellent buying power

1) Small average store size

2) Low Ad Effectiveness

3) Format Innovation


Strengths Weaknesses

Opportunities Threats

3) Excellent buying power

1) Increasing concentration of mkt

2) Increase of home cooking

1) Popularity of Hi-End retailers

2) Anti-Monopoly Law

3) Ageing population

3) Format Innovation

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Shopper AnalysisShopper Analysis Shoppers are becoming more sophisticated, more educated and more cynicalThey are increasingly postponing their decisions to the point of purchaseThey also make more impulse purchases - this is our


opportunityThey are more interested in the appearance of products they buyIf in employment they have high disposable incomes but still need to be wooedThe shopping environment is now part of the purchase satisfaction

How Shopper ShopsHow Shopper Shops“Attention Span” is limited, “shoppers” cannot scan everything. They “Chunk” information (5-7max).“Selective perception & decision making”. A process used by “shoppers” that “sorts” and rejects the irrelevant before concentrating on a small number from hich to p rchase Time cons ming


from which to purchase : Time consuming.“Sort” procedures, if complex, leads to confusion, frustration and brain overload “lock-out”.Memory (limited), visual memory is very limited. High density of brands + complex SKUs adds to this limitation.

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“Shoppers” use cognitive “maps” to aid location instore -(learned behaviour).Shoppers use colour, movement, large vertical blocks as “geographic” cues instore. Strong brands are used as “signposts” to the category.Brand leaders aid shopper location in stores + they are used


pp yto identify, provide clarity and give meaning to specific categories (70% chose products via brand leader).Shoppers scan objects around an object they have fixed upon - if relevant they shift their attention.These adjacencies are as relevant between total categories (skin, cosmetics etc), sub categories or even brands within categories. If logical - people cross shop. If illogical people ignore or don’t even see.

Summary of the Module: Characteristics of a Strong

and Enduring Brandand Enduring BrandWhat is a Brand?

How is it represented in memorySocial knowledge structureHow it affects perception and cognition


How it is related to the self-concept

Brand equityBrand is “value added” to the product or service

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How do we maximise Brand equity?By analyzing and manage following factors:

The Brand in the environment (Portfolio)The Brand inside the firm (Drivers)The Brand outside the firm (Marketing Research)


( g )

Drivers and criteriaOrganisational (Mission, Story, Values)Brand (Principle, Personality, Associations)These are translated into communications by the marketing department, and lived by the employees of the firm



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Lecture 12 – Group PresentationPo Leung Kuk Community College Campus

Thank you!!Thank you!!

My contact is:


[email protected]

introduction to brand-lecture notes

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