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Why Build Brands?

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Buildings age & become dilapidated. Machines wear out. Cars rust. But what lives on are Brands
Sir Hector Laing

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Brand value is the extra worth engendered in customers, whose loyalty is made more secure.
The Economist (Dec.,1988)

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Their continuous usage goes beyond rational features.

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What you show is more important than what you say. One Brand. One Voice
David Ogilvy

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What Is a Brand?
A service

A packaging
A product

A logo

A country

A shop A person
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Brand = Product + Images

More than just the product or the service Add the intangible images that come to mind Add the usage occasions that come to mind Add the user imagery that comes to mind

Brand = Values + Added values


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A brand is a promise

a sellers promise to deliver consistently a specific set of features, benefits and services to buyers. A short-hand that communicates powerfully and reduces uncertainty Differentiates goods or services from competing offerings

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Promise
If the promise is strong enough, the brand speaks for itself

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Marketing Advantages of Strong Brands


(Kotler & Keller, Ch. 9)

Improved perceptions of product performance Greater loyalty Less vulnerable to competition Less vulnerable to crises Larger margins Inelastic consumer response to price increases

Elastic consumer response to price decreases Greater trade cooperation Increase in effectiveness of IMC Licensing opportunities Brand extension opportunities

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Brand Management
Advantages of Branding (see also Fig.7-1, p. 286)
Consumers viewpoint 1. Product quality 2. Increased shopper efficiency 3. Calls attention to new products 4. Reduces psychological risk Sellers viewpoint 1. Handling orders, tracking down problems 2. Trademark legal protection 3. Brand loyalty 4. Reduces need for in-store contact 5. Facilitates segmentation, promotion, and pricing

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Managing Brands for Competitive Advantage


Branding is the process of creating that identity. Buyers respond to branding by making repeat purchases because they identify the item with the name of its producer. Brand: name, term, sign, symbol, design, or some combination that identifies the products of a firm while differentiating them from the competitions

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Brand Loyalty Brand recognition: Consumer awareness and identification of a brand.


Brand preference: Consumer reliance on previous experiences with a product to choose that product again. Brand insistence: Consumer refusals of alternatives and extensive search for desired merchandise.

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Brand Names

Brand attributes

Short: Kodak, Fuji


Morgan Stanley Dean Witter Discover CNN an AOL Time Warner Company

Name

Pronounceable: LOiseau Lyre

Logo

Colors

Essence Statement

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Brand Names continued

Brand attributes

Product (not firm) brands should be


suggestive of product benefits:

Name

Explorer, Cover Girl

Logo

Toyota Siena, H-P Pavilion Flying Pigeon bicycles

Ps: Public Storage example

Colors

Essence Statement

Distinctive: Lexus/Lexis

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Brand Names still continued


Translatable: AOL in Germany Golf, Jetta, Scirocco? Not mean anything rude or silly in another language

Brand attributes

Name

Logo

Colors

Essence Statement

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Brand Names continued further

Brand attributes

Name

Logo

Changing your name will not overcome a bad strategy Consignia (Royal Mail) Monday (PricewaterhouseCoopers Consulting)

Colors

Essence Statement

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Worst Product Brand Name

Oil of Olay Oil Free Moisturizing Cream

This product has been discontinued. Using the latest advancements in skin care, Olay has replaced Oil Free Active Hydrating Cream with new Olay Sensitive Moisture Therapy Cream.

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Sound or jingle

Brand attributes

Examples: Intel da-da-da-ding Windows sound


Name

Logo

Colors

Sound (jingle)

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Brand Logo & Colors

Brand attributes

Name

Logo

Colors

The keys are:


Essence Statement

Consistency Creativity
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Brand Essence Statement

Brand attributes

Name

Logo

Colors

Essence Statement

It should leverage a compelling truth (Jeff Manning)


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Criteria for choosing Brand elements


Memorability Meaningfulness Likeability Transferability Adaptability Protectability

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Types of Brands
Generic product: item characterized by plain label, with no advertising and no brand name Manufacturers brand or National Brand: brand name owned by a manufacturer or other producer Private brands: brand name placed on products marketed by wholesalers and retailers

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Captive brands: national brands that are sold exclusively by a retail chain Family brand: brand name that identifies several related products Individual brand: unique brand name that identifies a specific offering within a firms product line and that is not grouped under a family brand

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Brand equity: added value that a respected, well-known brand name gives to a product in the marketplace. Brand equity increases the likelihood that consumers will recognize the firms product when they make purchase decisions A strong brand equity can contribute to buyers perceptions of product quality Branding can also reinforce customer loyalty and repeat purchases

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The Role of Category and Brand Managers Brand manager: Marketing professional charged with planning and implementing marketing strategies and tactics for a brand
Category management: Product management system in which a category managerwith profit and loss responsibilityoversees a product line.

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The Consumers Brand Knowledge


Brand Exploratory
Brand Recognition Non-product related

Price
Package User Situation Uses Situation

Brand Awareness
Product related Brand Recall Attribute Functional Types of Brand Associations Strength of Brand Associations Favorability of Brand Associations Uniqueness of Brand Associations Benefit Attitude

Brand Knowledge

Experience baseed
Symbolic

Brand Image

By Kevin Lane Keller

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Understanding Brands : Aakers Model


Extended Core Brand Essence

Brand as Product Brand as Organization Brand as Person Brand as Symbol Value Proposition (Emotional/Rational/Self-expressive) Credibility (Support / Proof / Story )
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Brands are part of a strategy aimed at differentiating supply. Companies do so by consistently and repeatedly providing an ideal combination of attributes -- both tangible and intangible, practical and symbolic, visible and invisible. Strategic Brand Management : New Approaches to Creating & Evaluating Brand Equity Jean Noel Kapferer

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The Kapferer Brand Identity Prism


PICTURE OF SENDER
Physique
Personality

EXTERNALISATION Relationship

INTERNALISATION Culture

Reflection

Self-Image

PICTURE OF RECIPIENT
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Brand: Amul Draw Aakers model Draw Kapferers prism

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AMUL : Aakers Model


Extended Core
Pride Value Available

Brand Essence:

Taste

Milk
Quality Variety Food

Indian

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AMUL : Kapferers Prism


Physique : Taste, Quality

Personality : Simple, Indian

Relationship : Sociable

AMUL

Culture : Co-operative, Sharing

Reflection : Value Oriented

Self-Image : Proud Indian, Fun loving

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Brand-building: The Steps


Determine the current image with consumers

Define the desired image


Identify focus areas for action Product development/innovation Packaging/delivery systems Advertising/promotions Implement action plan with a monitoring programme
Feedback to action plan
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Brand Management

Adding An Item: Four Brand Types (Fig. 7-3, p. 292)


Product Category Existing Existing Brand Name New New

Line Brand Extension Extension Flanker Brand New Product


31

Dalrymple & Parsons/Marketing Management 7th edition: Chapter 7

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Product Identification
Brand name: part of a brand consisting of words or letters that form a name that identifies and distinguishes a firms offering from those of its competitors Brand mark: symbol or pictorial design that identifies a product Generic name: branded name that has become a generically descriptive term for a class of products (e.g., nylon, aspirin, kerosene, and zipper)

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Trademark: legal protection which confers the exclusive right to user brand name, trade mark, and any slogan or product name abbreviation Trade Dress: visual cues used in branding to create an overall look The distinctive shape of Philips light bulbs and the McDonalds arches provide an example of trade dress

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Brand extension: application of a popular brand name to a new product in an unrelated product category Line extensions refers to new sizes, styles, or related products Brand licensing: practice allowing other companies to use a brand name in exchange for a payment

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Brand Management
Brand equity: The goodwill (equity) that an established brand has built up over its existence. DREK -- differentiation, relevance (strength) -- esteem, knowledge (stature) Brand concept: specific meaning that brand managers create and communicate to the target market. Brand concept management: the analysis, planning, implementation, and control of a brand concept throughout the life of the brand.

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Understanding Brand
Brand A promise to customers

Brand attributes

Brand Management

Brand "Architecture" (Aaker article)

Name

Co-brand

Firm

Product (Product line)

Logo

Stealth brand

House of Brands

Colors

Fighting brand

Endorsed Brands

Essence Statement
Sound

Multi-brand

Subbrands

Hidden brand

Branded House

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Managing Brand offer Architecture


Or How to signify at the same time : . a common reference of brand offerings and . how they differ from each other and . What the Brand stands for.

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Complex Brand Offer Architectures Product Brand : Exclusive name to a single


product to assure individual positionning (Tide, Martini ) product in segmented market or across similar markets (Renault .) product categories with same ability (Green Giant ..)

Jean-Noel Kapferer

Line Brand : Extend a concept across different Range Brand : Use same name and promise in

Umbrella Brand : Support products in different


markets with each its own promise, Danon

Source Brand : Support sub-brand names as above Endorsing Brand : Approve/garanty wide variety
of product brands, line and range brands GE

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Brand extension/stretching
Why extend ? What is Brand stretching ? Where to extend ? Risks Keys to success Fitting why NOT extend ?

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Why extend brands ?


increasing competition between less & larger players with global aspirations and ability to communicate globally towards saturation of markets similarity of brands offers attributes decreasing brand loyalty react to declining markets nourish the brand perceived vitality

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What is the brand stretching ?


It is the transfer of brand values on the new market It shows that the brand is not related directly to one sector but has values that can transcend different products categories

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Where Stretching the Brand


same category : no distance extension new sub-category : short distance extension new category : middle distance extension new activity : long distance extension Geographic expansion

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Dim Brand stretching

Comfort, liberty
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Low cost in launching Danone Activ and Talians

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Barilla move into biscuits

taste, savor, Italian way of cooking


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Swatch move into jewel

Modern, Quality/price, Variety, Innovative design


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Caterpillar moved into shoes and clothing

reliable, resistant, masculine


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Taillefine move into biscuits and water

Non fat, healthy


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Mars move into ice cream

gourmandize, rich, sweet


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Brand stretching risks


Distort/Dilute the values of the Brand

Lose the original consumers

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Pierre Cardin brand dilution

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Keys to success in brand extension

Brand identity
Fit
Relevance

Brand extension

Added value

Markets values

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Fitting
Perceived brand typicality, ie product categories which go well with the mother brand Emotional agreement with the potential extension product categories tested transferability of the brands intangibles and of the brands vision, brands identity & brand project.

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Economic evidences of brand extensions


Higher survival rate of products Higher chances of success, due to : . trial rate . conversion rate . loyalty rate (repurchase) Lower launch cost

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Why NOT extend brands ?


Unclear/no Brand Identity High brand switching pattern Unwatched Overheads Cost increase No sufficient resources for success No sufficient Fit and Relevance .

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Understanding Brand Management

Brand Management

Co-brand Stealth brand Fighting brand Multi-brand Hidden brand

Everything the firm does either adds or subtracts to the brand equity
Positive interactions reinforce the promise Negative experiences reduce the value of the brand
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Understanding Brand Management Conventional Brand Decisions

1. Line extension (e.g. Mercedes A Class) 2. Brand extension (using Mercedes on sunglasses) 3. Should we do private label goods?

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Understanding Brand Management

Brand Management

Co-brand Stealth brand Fighting brand Multi-brand Hidden brand

Examples: Kelloggs Pop-tarts with Smuckers Jam The Eddie Bauer Ford Explorer Turns out to be very big on the Internet: NYTimes gives Amazon credibility, and Amazon makes NYT look modern.
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Understanding Brand Management

Brand Management

Co-brand Stealth brand Fighting brand Multi-brand Hidden brand

Who is the Lucky Dog Phone Company? Who owns 10-10-321?

Who owns Turning Leaf Vineyards?


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Understanding Brand Management

Brand Management

Fighting Brand is a pricing strategy as a competitive response: Example: Smirnov (market leader, owned by Heublein) Wolfschnidt -- $1 less Heublein raised the price of Smirnov Introduced Reiska = Wschmidt (the fighting brand) then added Popov lower than both
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Co-brand Stealth brand Fighting brand Multi-brand Hidden brand

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Understanding Brand Management

Brand Management

Co-brand Stealth brand Fighting brand Multi-brand Hidden brand

Multi-brand strategy lets us sell to customers in any way they want to buy
Chrysler, Dodge Having several brands can be useful

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Understanding Brand Management Multi-brand Strategy

Example: Harman International (Car Stereos) owns the following brands:

Harman/Kardon Becker Infinity JBL Oxford

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Carnival Cruise has 12 lines

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Carnival Cruise has 12 lines:

Carnival Cruise mid-price, mass market, fun Cunard Trans-Atlantic, old-world European Seabourne High-end, exclusive, exotic travel Windstar Youth and adventure Holland America Package tours

What are the pros & cons of the multi-brand strategy?

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Understanding Brand Management

Brand Management

Co-brand Stealth brand Fighting brand Multi-brand Hidden brand

It may make sense to hide our brand (the OEM game) Examples: Yahoo Travel is really Travelocity Follett runs university bookstores The visible brand gives a reason to buy, the hidden brand is the B2B reason to contract
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Hidden Brand Disambiguation

Brand Management

Co-brand Stealth brand Fighting brand Multi-brand Hidden brand

Private Label manufacturing is forced on the manufacturer when there is excess capacity in the industry In contrast, Hidden Brand is a strategy the producer chooses when it wants to reach new market segments

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