CHAPTER 1: BRANDS AND BRAND MANAGEMENT

Transcription

1 CHAPTER 1: BRANDS AND BRAND MANAGEMENT

2 Learning Objectives Define brand, state how brand differs from a product, and explain what brand equity is Summarize why brands are important Explain how branding applies to virtually everything Describe the main branding challenges and opportunities Identify the steps in the strategic brand management process

3 What is a Brand? Brand Elements Brands versus Products

4 Brand Elements

5 Brand Elements Different components that identifies and differentiates a brand Name, logo, symbol, package design, or other characteristic Can be based on people (Porsche automobile), places (British Airways), animals (Mustang automobile, Dove soap), and others (Apple computers).

6 Brand Elements Umbrella brands Parmalat, Samsung and General Electric Mixed brands Procter & Gamble (Tide, Pampers, Pantene etc.) Unilever (Dove soap, Rexona deodorant, Knorr chicken stock cubes, Magnum ice cream etc.)

7 Brand versus Product Brand Has dimensions that differentiate it in some way from other products designed to satisfy the same need. These differences may be rational and tangible or more symbolic, intangible and emotional. Can be differentiated on the basis of: Packaging Services provided Customer advice Financing Delivery arrangements Warehousing Other things valued by the customers Product Anything available in the market for use or consumption, that may satisfy a need or want. Thus, products may be a physical good, a service, a retail outlet, a person, an organization, a place or even an idea. Can be categorized into five levels namely: Core benefit level Generic product level Expected product level Augmented product level Potential product level

8 Example of different Product Levels

9 To Sum Up... Through branding, organizations: Create perceived differences amongst products Develop loyal customer franchise Create value that can translate to financial profits

10 To Sum Up... Brands with competitive advantages with product performance Brands with competitive advantages with nonproduct-related means

11 The World s Most Innovative Companies 2017, Forbes

12 Branding brief 1-1 Coca-Cola branding lesson

13 Why Do Brands Matter? Consumers Firms

14 Consumers Encompass all types of customers, including individuals as well as organizations Functions provided by brands to consumers Identify the source or maker of the product Simplify product decisions Lower the search costs for products internally (how much you have to think) and externally (how much you have to look around) Helps set reasonable expectations about what consumers may not know about the brand

15 Consumers Signal product characteristics and attributes On the basis of attributes products can be classified as: Search goods (consumers evaluate product attributes) Experience goods (consumers cannot assess product attributes) Credence goods (consumers may rarely learn product attributes) Reduce risks in product decision These risk can be categorised as Functional, physical, financial, social, psychological, and time

16 Consumers Functional The product does not perform up to expectations (e.g. Duracell) Physical The product poses a threat to the physical well-being or health of the user or others Financial The product is not worth the price Social The product results in embarrassment from others (e.g. Heineken) Psychological The product affects the mental wellbeing of the user Time The failure of the product results in an opportunity cost of finding another satisfactory product

17 Consumers Brands take on unique, personal meanings to consumers that facilitate their day-to-day activities and enrich their lives. The ability of a brand to simplify decision making and reduce risk is invaluable.

18 Firms Brands provide valuable functions Simplify product handling and tracing Help organizing inventory and accounting records Offer the firm legal protection for unique features or aspects of the product (e.g. trademarks, patents and copyrights) Provide predictability and security of demand for the firm and creates barriers of entry for competitors Provide a powerful means to secure competitive advantage

19 Firms Provide predictability and security of demand for the firm and creates barriers of entry for competitors versus iphone HiPhone

20 Mimetism

21 Commercial Mimetism

22 Commercial Mimetism

23 Commercial Mimetism

24 Firms Provide a powerful means to secure competitive advantage

25 Figure Roles that Brands Play

26 Can Anything Be Branded? A brand is something that resides in minds of consumers. A brand is a perceptual entity rooted in reality. It reflects the perceptions and perhaps even the idiosyncrasies (i.e. a mode of behavior or way of thought peculiar to an individual) of consumers.

27 The Golden Circle by Simon Sinek

28 Branding brief 1-2 Branding commodities Coffee Oil Salt Bananas Apple Water

29 Can Anything Be Branded? Physical Goods - Name (who the product is), Label (identify the product) and Meaning (what the product can do for you). - The key to branding is that consumers perceive differences among brands in a product category. - Marketers can benefit from branding whenever consumers are in a choice situation. Services

30 Physical Goods Business-to- Business Products Can provide valuable reassurance and clarity; Can provide a strong competitive advantage. High-tech Products The speed and brevity of technology product life cycles create unique branding challenges. Trust is critical.

31 Services Role of Branding with Services Services are less tangible than products and are more likely to vary in quality. Branding can be extremely important to service firms as a way to address intangibility and variability problems. Professional Services They are a combination of B2B branding and traditional consumer services branding. Corporate credibility is key. Variability is more than an issue with professional services. Long-term relationships are crucial too. Referrals can be powerful when services offered are highly intangible.

32 Can Anything Be Branded? Retailers and Distributors Brands can generate consumer interest, patronage, and loyalty in a store. You are what you sell. Retailers can introduce their own brands. We call them private labels. Some of them are also bricks and clicks. Online Products and Services Pandora, Google, Facebook etc. People and Organizations Red Cross, Doctors Without Borders, Unicef, President Trump etc.

33 Role of Branding Sports, Arts, and Entertainment FIFA World Cup, Star Wars, Harry Porter, Marvel, Disney, DC Comics etc. Geographic Locations Helsinki, Saint Petersburg, Jericoacoara Beach, Rio de Janeiro, Paris, New York, Las Vegas (What happens here, stays here), Amsterdam (Van Gogh Museum) etc. Ideas and Causes AIDS ribbons, No Bullying Org., Yellow September (Ribbon Suicide Prevention Program) etc.

34 To Sum up... Branding is universal and pervasive in different product categories Applicable to both tangible and intangible offerings of an organization Technological developments have impacted the way firms market their offerings Organizations reap financial benefits from positive brand images

35 Strong Brands Brands that have been market leaders in their categories for decades Five factors for enduring market leadership: Vision of the mass market; Managerial persistence; Financial commitment; Relentless innovation; Asset leverage (to hold a leadership position in a related category Coke vs Diet Coke vs Life Coke with stevia). Any brand is vulnerable and susceptible to poor brand management

36 What are the most valuable Finnish brands?

37 Most Valuable Firms in Finland Source: Brand Finance at

38 Source: Brand Finance at

39 Most Valuable Brands Source: Forbes

40 Most Valuable Brands Source: Forbes

41 Most Valuable Brands Source: Forbes

42 Most Valuable Brands Source: Forbes

43 Most Valuable Brands Source: Forbes

44 About Nestle and Nescafe Source: Forbes

45

46 Factors Responsible for Branding Challenges Savvy customers Economic downturns Consumers bought lower-priced brands and they found better performance. They no longer preferred higher-priced products. Brand proliferation The average supermarket holds 30,000 different brands. Media transformation Digital media, in-store advertising, sports sponsorship etc.

47 Factors Responsible for Branding Challenges Increased Competition Globalization, Low-priced competitors, Brand extensions and Deregulation (telecommunication, health care etc.). Increased costs In 2008, about 123,000 new products failure rate over 90%. Greater accountability Marketers find responsible for meeting short-term profits.

48 Figure 1.9- Challenges to Brand Builders

49 Brand Equity Principles of branding and brand equity Branding is all about endowing products and services with the power of brand equity Brand equity consists of the marketing effects uniquely attributable to a brand Differences in outcomes arise from the added value endowed to a product The added value can be created for a brand in many different ways Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a brand There are many different ways in which the value of a brand can be exploited to benefit the firm

50 Strategic Brand Management Process Identifying and Developing Brand Plans (Chapters 2 &3) Designing and Implementing Brand Marketing Programs (Chapter 2) Measuring and Interpreting Brand Performance Growing and Sustaining Brand Equity

51 Identifying and Developing Brand Plans Brand Positioning Model (competitive advantages) Brand Resonance Model (to create intense, activity loyalty relationships with customers) Brand Value Chain (to better understand the financial impact of brand marketing expenditures and investments)

52 Designing and implementing Brand Marketing Program Choosing Brand Elements (Chapter 4) Integrating the Brand into Marketing Activities and the Supporting Marketing Program (Chapter 5) Leveraging Secondary Associations (e.g. country, sporting or cultural events, others brands) (Chapter 7)

53 Measuring and Interpreting Brand Performance (Chapters 8, 9 & 10) To manage brands profitably, managers must implement a brand equity measurement system Brand equity measurement system involves: Brand audits (a comprehensive examination of a brand to assess its health) Brand tracking studies (collect information from consumers on a routine basis over time) Brand equity management system (a set or organizational processes designed to improve the understanding and the use of a brand equity management system)

54 Growing and Sustaining Brand Equity Defining Brand Architecture (Chapters 11 & 12) Managing Brand Equity over Time Managing Brand Equity over Geographic Boundaries, Cultures, and Market Segments (Chapter 14)

55 Figure Strategic Brand Management Process

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