Brand Management (BM001)

Transcription

1 Brand Management (BM001) The copyright of all IMM Graduate School of Marketing material is held by the IMM GSM. No material may be reproduced without prior written permission from the IMM GSM. Revised: December 2012 IMM GSM Page 1 of 111 BM001

2 Table of contents SECTION A 1. Word of welcome 4 2. How to use this guide 5 3. Purpose and overall learning outcomes 6 4. National Qualification Framework Specifications 7 5. Pre-knowledge 8 6. Relationship with other modules 8 7. Prescribed textbook 8 8. Curriculum Specific learning outcomes Critical cross-field outcomes Assessment details 24 SECTION B Study Unit 1: Opening Perspectives on Branding Specific learning outcomes Brands and brand management 28 Study Unit 2: Developing a Brand Strategy Specific learning outcomes Customer-based brand equity 37 Study Unit 3: Designing and Implementing Brand Marketing Programmes Specific learning outcomes Choosing brand elements to build brand equity Designing marketing programmes to build brand equity Integrating marketing communications to build brand equity Leveraging secondary brand associations to build brand equity 62 IMM GSM Page 2 of 111 BM001

3 Study Unit 4: Measuring and Interpreting Brand Performance Specific learning outcomes Developing a brand equity measurement and management system Measuring sources of brand equity Measuring outcomes of brand equity 78 Study Unit 5: Growing and Sustaining Brand Equity Specific learning outcomes Designing and implementing branding strategies Introducing and naming new products and brand extensions Managing brands over time Managing brands over geographic boundaries and market segments 100 Study Unit 6: Closing Observation Specific learning outcomes Strategic brand management guidelines What makes a strong brand? Future brand priorities 108 Bibliography 110 IMM GSM Page 3 of 111 BM001

4 SECTION A 1. Word of welcome Welcome to the exciting module of Brand Management a subject that opens up a world of understanding of the importance of brands and branding something that is part of our lives whether we like it or not. Even today, as you drive along a busy street, stroll in a mall, watch television, page through a magazine, listen to the radio, surf the net or chat on Twitter, you are constantly faced with numerous brands and branding messages. For a long time branding has been seen as part of the marketing discipline. Traditionally branding is part of the marketing mix, or the 5P s: product, price, promotion, place and people, whereas branding is part of the augmented level of a product. In recent years marketing has however evolved, and now has become competition led with huge implications on branding, which explains why branding has become central to the marketing discipline. As brands become central to the core of many businesses, brands are now considered to be the responsibility of senior management and the boardroom. As you embark on this exciting journey of discovering branding, know that you will learn more than what is commonly understood when referring to a brand or branding as a concept. You will also learn how to think strategically about managing a brand and ensuring each brand becomes the responsibility of senior management and the boardroom. South Africa is now, more than ever ready for creative, original and passionate marketers who have the ability to build brands that will not only be successful within the southern African context, but also become truly global brands. We trust that this learning experience will equip you to be one of them! IMM GSM Page 4 of 111 BM001

5 2. How to use this guide Brand management is designed to be a combination of theory and practice and deals with brands why they are important, what they represent to consumers and what should be done to manage them properly. It focuses on the theory behind the application of how to manage brands. It will not only offer you an interesting account and analysis of brand management, it will also provide you with the tools for planning and implementing brand marketing programmes and how to sustain and grow brand equity. Experience has shown that most students taking this module will be brand or product assistants, especially at the earlier stages of their marketing careers. The goal then is to instil in you an understanding and healthy sense of respect for brand management. We aim to make you knowledgeable about the wonderful world of branding. The most effective way to achieve this will be to ensure that you understand and enjoy the module. The learner guide is especially designed for a student who studies at a distance. The guide will provide an overview of the total curriculum and will indicate the learning outcomes, which are essentially the core of this guide. It will provide you with each major topic that has to be covered, along with the learning outcomes for each topic, which are systematically explained. The guide will also indicate how the learning material must be prepared for assessment. The learner guide should be studied in conjunction with the prescribed textbook and does not replace the textbook. At the end of each study unit you will find some typical examples of examination questions which should be used for self-evaluation. The following icons appear in all of the learning guides of the IMM Graduate School of Marketing: IMM GSM Page 5 of 111 BM001

6 indicates learning outcomes indicates the sections in the prescribed textbook that you need to study. indicates the self-evaluation questions. 3. The purpose and overall learning outcomes The aim of this module is to provide a comprehensive and current handling of the subjects of brands, brand equity and strategic brand management the design and implementation of marketing programmes and activities to build, measure and manage brand equity. One of the module s important goals is to provide the student with concepts and techniques to improve the long-term profitability of brand strategies. Current thinking and developments related to brands are incorporated from both academic and industry participants. These are combined with a comprehensive theoretical foundation and with practical insights to assist managers in their day-to-day and long-term brand decisions. As you develop your knowledge, it is essential that you also focus on how to implement this knowledge a critical characteristic of any first-class brand manager. IMM GSM Page 6 of 111 BM001

7 On completion of the Brand Management syllabus, you should: Understand the role of brands, the concept of brand equity and the advantages of creating strong brands. Understand the three main ways to build brand equity by properly choosing brand elements, designing marketing programmes and activities and leveraging secondary associations. Understand the different approaches to measuring brand equity. Be able to implement a brand equity measurement system. Understand the alternative branding strategies and be able to devise brand hierarchies and brand portfolios. Understand the role of corporate brands, family brands, individual brands, modifiers, and be able to combine these into sub-brands. Be able to adjust branding strategies over time and across geographic boundaries to maximise brand equity. To achieve these goals, you will not only have to carefully follow the guidelines and instructions of this learner guide, but you will need to observe, in your every day life, how these principles are implemented, and critically evaluate their effectiveness. The assignment described later in this learner guide, as well as the examinations, will evaluate to what extent you have succeeded in reaching the objectives of this course. 4. National Qualifications Framework (NQF) Specifications This module forms an elective module in the second year for the BBA in Marketing Management as well as the Diploma in Marketing Management. In terms of the new National Qualifications Framework (NQF) it is designed as a 20-credit module offered on NQF level 7. IMM GSM Page 7 of 111 BM001

8 5. Pre-knowledge Brand Management requires a thorough understanding of the principles of marketing (Marketing 1), Business Communications 1 and Business Management 1 and, for this reason you will only be allowed to take it as a second year module. It is assumed that you will have a sound knowledge of Business Statistics, Business Law and Business Numeracy before attempting Brand Management. It is also assumed that you will be sufficiently computer literate and that you will be able to operate the Internet when attempting this module. A sound knowledge of the Harvard Referencing System is compulsory before attempting this module. 6. The relationship with other modules By this stage you have come to know marketing as an innovative activity of an organisation through which ideas, brands, products and services are conceived, priced, promoted and distributed to satisfy consumer needs, and through which it is possible to anticipate, and even create, the consumers future needs. With that in mind, it s easy to see that brand management stands at the centre of marketing, as an integral part of marketing strategy development. 7. Prescribed textbook The prescribed textbook for this course is: Keller, K.L., Strategic Brand Management. Building, Measuring and Managing Brand Equity. 4 th ed. Global edition. Pearson Prentice Hall. The additional recommended reading for this course is: IMM GSM Page 8 of 111 BM001

9 Kapferer, J.N., The New Strategic Brand Management: Creating and Sustaining Brand Equity Long Term. 4 th ed. Kogan Page. The textbook is written in a clear and systematic manner. Always start your studies by consulting the learner guide and then study the relevant learning units in the prescribed textbook. It is unlikely that you will pass this module if you have only consulted the learner guide without studying the content of the textbook. This textbook should be supplemented by exploring South African examples and other relevant reading material. Additional reading is vital for success in brand management. You should routinely be checking the latest information on various aspects of branding, via the Internet, quality newspapers and the marketing press. You should further explore various examples of branding elements in all forms of media, whether you are watching television, listening to radio stations or reading newspapers and/or other printed publications, i.e. magazines or engaging online via the World Wide Web, through Facebook, Linkedln or Twitter or various other marketing related blogs to identify relevant examples which can illustrate brands and branding theory in practice. In addition to the prescribed textbook, it would be useful to consult the following report both for assignments, and for practical application in a brand management role: Interbrand. (2011). Best global brands [Online] Available from: [Accessed: 23 November 2011]. Since this is a newly introduced subject at the IMM GSM, no previous examination question papers are available from the IMM GSM s Johannesburg Office or any one of the IMM GSM Regional Offices. IMM GSM Page 9 of 111 BM001

10 8. Curriculum In line with the purpose of the module described above, this course has been divided into six study units as depicted in the table below: Study Description Chapters Unit in Keller (2013) 1 Opening perspectives on branding Brands and brand management Developing a Brand Strategy. Customer-based brand equity and brand positioning Brand Resonance and the Brand Value Chain Designing and implementing brand marketing programmes Choosing brand elements to build brand equity Designing marketing programmes to build brand equity Integrating marketing communications to build brand equity Leveraging secondary brand associations to build brand equity 2, 3 4,5,6 & 7 4 Measuring and interpreting brand performance 8,9 & 10 Developing a brand equity measurement and management system Measuring sources of brand equity: Capturing customer mind-set Measuring outcomes of brand equity: Capturing market performance IMM GSM Page 10 of 111 BM001

11 5 Growing and sustaining brand equity Designing and implementing brand architecture strategies 11,12,13 & 14 Introducing and naming new products and brand extensions Managing brands over time Managing brands over geographic boundaries and market segments 6 Closing observations 15 Strategic brand management guidelines What makes a strong brand? Special brand applications Future brand priorities The first study unit sets the stage by providing the big picture of what strategic brand management is all about. The goal is to provide a sense for the content and context of strategic brand management by identifying key branding decisions and suggesting some of the important considerations for those decisions. The study unit introduces some basic notions about brands and the role they ve played and continue to play in marketing strategies. It defines what a brand is, why brands matter and how anything can be branded, and provides an overview of the strategic brand management process. Study Unit 2 is an exploration of the topic of brand equity and provides a blueprint for the rest of the learner guide. The first concept being considered is the concept of customer-based brand equity and outlines the customer-based brand equity framework. It also summarises guidelines for building, measuring and managing customer-based brand equity. The next important theme of this study unit IMM GSM Page 11 of 111 BM001

12 develops a conceptual model of brand knowledge and addresses the critically important issue of competitive brand positioning. Study Unit 3 examines the three major ways to build customer-based brand equity, taking a single product-single brand perspective. The first section being exploratory, focusing on the first way to build customer-based brand equity and taking a look at how to choose brand elements and the role they play in contributing to brand equity. The next section in this study unit considers the second way to build brand equity and how to optimise the marketing mix to create customer-based brand equity. It covers product, pricing and distribution strategies. It further examines the creation of integrated marketing communication programmes to build brand equity. It is interesting to consider the 4P s of marketing from a brand equity perspective and the effects of brand knowledge on consumer response to marketing activity and vice versa. The final section of this study unit examines the third major way to build brand equity by leveraging secondary associations from other entities like company, geographical regions, persons and other brands. Study Unit 4 examines how to measure customer-based brand equity. This unit takes a detailed look at what consumers know about brands, what marketers want them to know, and how marketers can develop measurement procedures to assess how well they re doing. The first section of this study unit provides a big picture view of these topics, introducing the brand value chain and examining how to develop and implement a brand equity measurement system. The second section of this study unit examines approaches to measure customers brand knowledge structures in order to identify and quantify potential sources of brand equity. IMM GSM Page 12 of 111 BM001

13 The third section of this study unit looks at measuring potential outcomes of brand equity in terms of the major benefits a firm accrues from these sources of brand equity. Study Unit 5 addresses how to manage brand equity, taking a broader, multiple brand perspective as well as a longer-term and multiple-market view of brands. The first section considers issues related to branding strategies which brand element an organisation chooses to apply across the various products it sells and how to maximise brand equity across all the different brands and products that an organisation might sell. It further describes two important tools to help formulate branding strategies the brand-product matrix and the brand hierarchy. The next section being addressed is the pros and cons of brand extensions and how to develop guidelines for introducing and naming new products and brand extensions. The third section being explored considers how to reinforce, revitalise and retire brands, whilst examining a number of specific topics in managing brands over time, such as the advantages of maintaining brand consistency, the importance of protecting sources of brand equity and trade-offs in fortifying vs. leveraging brands. The last section of this study unit examines the implications of different consumer behaviour and different types of market segments for managing brand equity. Particular attention is paid to international issues and global brand issues. The sixth and final study unit considers some implications and applications of the customer-based brand equity framework. It highlights managerial guidelines and key themes which emerged in earlier study units. It further summarises success factors for effective branding, applies the customer-based brand equity framework to address specific strategic brand management issues for different types of products and relates the framework to several other popular views of brand equity. IMM GSM Page 13 of 111 BM001

14 9. Specific learning outcomes Learning outcomes are drawn from a hierarchy of skills, depending on the skills level that you are required to attain. These different levels are: 1. Knowledge level this is the most basic level. It just requires you to learn the facts. Words that indicate that you are being tested at the knowledge level include list, define, state, name, tell, show, etc. 2. Comprehension level this level expects some understanding to have occurred. Key words that indicate that you are being tested at the comprehension level include explain, elaborate, describe, discuss, etc. 3. Application level this level involves the use of knowledge and comprehension in concrete situations. Key words that indicate that you are being tested at the application level include demonstrate, calculate, apply, construct, design, etc. 4. Analysis level at this level you are expected to be able to break a concept/theory down into its component parts. Key words that show you are being tested at this level are analyse, assess, etc. 5. Synthesis level this is the reverse action of analysis, in that you are required to put the parts together to form a whole concept. Key words that show you are being tested at this level are assemble, reconstruct, create. 6. Evaluation level this level requires you to judge the value of a concept/ model using various criteria. This is the highest level of learning. Key words that indicate that you are being tested at this level are evaluate, assess, compare, choose, judge, etc. There are a number of specific learning outcomes for this module, as indicated per study unit in the table below. IMM GSM Page 14 of 111 BM001

15 Study Unit Description Specific Learning Outcomes 1 Opening Perspectives on branding Brands and brand management Explain what a brand is. Understand the difference between a product and a brand. 2 Identifying and establishing brand marketing programmes Discuss why brands matter to consumers and to manufacturers. Explain what can be branded. Have a clear understanding of what are the strongest brands. Explain the challenges and opportunities of branding. Understand market leadership. Explain the brand equity concept. Apply the strategic brand management process. Customer-based brand equity and brand positioning Explain customer-based brand equity. Understand the concept of brand knowledge. Explain the sources of brand equity. Apply the four steps of brand building to build a strong brand. Explain the customer-based brand equity pyramid. Understand the sub-dimensions of brand building blocks. Explain the ten commandments of emotional branding. Understand the possible measurements of brand building blocks. IMM GSM Page 15 of 111 BM001

16 Explain how to create customer value. Explain the marketing advantages of strong brands. Explain the identification and establishment of brand positioning. Apply positioning guidelines. Explain how to identify and establish brand mantras. Understand the importance of internal branding. Brand Resonance and the Brand Value Chain Explain the term brand resonance. Describe the steps in building brand resonance. Explain the brand value chain. Identify the stages in the brand value chain. Contrast brand equity and customer equity. 3 Designing and implementing brand marketing programmes Choosing brand elements to build brand equity Explain the criteria involved when choosing brand elements. Understand the optics and tactics for brand elements. Understand what set of brand elements is required to make up the brand identity. Explain the guidelines for creating high-impact packaging. Designing marketing programmes to build brand equity Understand the new perspectives on marketing. Explain the guidelines for experiential marketing. IMM GSM Page 16 of 111 BM001

17 Explain the role of the product strategy in building brand equity. Explain the role of the pricing strategy in building brand equity Explain the role of the channel strategy in building brand equity. Explain the reasons in the growth in private labels. Integrating marketing communications to build brand equity Examine the role of the new media environment on building brand equity. Provide an overview of marketing communication options when building brand equity. Understand the effects of advertising on building brand equity. Develop an integrated marketing communications programme for a brand of your choice. Explain the general marketing communications guidelines. Explain how you would coordinate media to build brand equity. Leveraging secondary brand associations to build brand equity Understand the process of leveraging secondary brand knowledge. Conceptualise the leveraging process. Understanding how to leverage through the company. Understand how to leverage through country of origin and IMM GSM Page 17 of 111 BM001

18 other geographic areas. Explain how to leverage through channels of distribution. Explain how to leverage through co-branding. Understand brand alliances. Understand the concept of licensing. Explain the role of celebrity endorsement in building brand equity. Explain the role of sporting, cultural and other events in building brand equity. Explain how to link brands to various third-party sources. 4 Measuring and interpreting brand performance Developing a brand equity measurement and management system Explain the concept of new accountability. Explain the brand value chain. Explain the concept of brand tracking studies. Explain how to establish a brand equity management system. Measuring sources of brand equity: Capturing customer mind-set Examine qualitative research techniques. Understand consumer memory. Explain how you can make the most of consumer insights. Examine quantitative research results. Examine the guidelines for online market research. Understand categorical brand recalls. IMM GSM Page 18 of 111 BM001

19 Understand brand attitudes. Explain comprehensive models of consumer-based brand equity. Explain Y&R s Brand Asset Valuator (BAV). Measuring outcomes of brand equity: Capturing market performance Explain comparative methods research studies or experiments. Explain holistic methods research studies or experiments. Apply the valuation flowchart to a brand of your choice. Explain the Interbrand Brand Valuation model. 5 Growing and sustaining brand equity Designing and implementing brand architecture strategies Explain the concept brand architecture. Apply the Brand-Product Matrix. Explain how the ideal brand portfolio can be achieved. Explain brand hierarchy. Apply the determinants of corporate image. Explain corporate brand personality. Design a brand strategy for a brand of your choice. Explain the guidelines that could be followed for brand hierarchy decisions. Explain how you could use cause marketing to build brand equity. IMM GSM Page 19 of 111 BM001

20 Introducing and naming new products and brand extensions Explain Ansoff s Growth Share matrix. Examine the advantages and disadvantages of brand extensions. Explain the concept of fighting feature fatigue. Understand how consumers evaluate brand extensions. Evaluate brand extension opportunities. Discuss extension guidelines based on academic research. Understand the concept master brands. Apply the guidelines for profitable line extensions to a brand line extension of your choice. How to manage brands over time Explain how you could reinforce brand equity over time. Understand the long-term effects of marketing actions on brand equity. Explain the theory brand concept management. Explain how you could revitalise a brand. Understand usage expansion. Explain the theory behind adjustments to a brand portfolio. Apply brand reinforcement strategies. IMM GSM Page 20 of 111 BM001

21 Apply brand revitalisation strategies. Managing brands over geographic boundaries and market segments Explain regionalisation of market segments. Explain other demographic and cultural segments. Discuss the rationale for going international. Examine the advantages and disadvantages of global marketing programmes. Examine standardisation versus customisation. Explain the strategic issues in a global brand strategy. Understand how to build global customer-based brand equity. 6 Closing observations Examine the guidelines involved in strategic brand management. Explain the determinants of desired brand knowledge structures. Explain what is required to create a strong brand. Examine the seven deadly sins of brand management. Consider various special applications of branding that may not fit into the general branding concepts. Understand future brand priorities. IMM GSM Page 21 of 111 BM001

22 Apply David Aaker s brand equity model. Apply the brand report card to a brand of your choice. You are encouraged to use the above information for the planning in advance of your studies and to avoid cramming. It is always wise to set up your own study timetable so that you can manage your time effectively. When planning your studies, please keep the submission date for the assignment in mind. 10. Critical cross-field outcomes The critical cross-field outcomes, also known as transferable skills as identified by the South African Qualifications Authority (SAQA), are essential for your development as a student within the education and training system, regardless of the specific area of learning. It is these outcomes that are deemed critical for your development in the capacity of life-long learning. The critical cross-field outcomes adopted by SAQA are as follows: (1) Identify and solve problems in which responses display that responsible decisions using critical and creative thinking have been made. (2) Work effectively with others as a member of a team, group, organisation and community. (3) Organise and manage oneself and one s activities responsibly and effectively. (4) Collect, analyse, organise and critically evaluate information. (5) Communicate effectively using visual, mathematical and/or language skills in the modes of oral and/or written presentation. (6) Use science and technology effectively and critically, showing responsibility towards the environment and health of others. IMM GSM Page 22 of 111 BM001

23 (7) Demonstrate an understanding of the world as a set of related systems by realising that problem-solving contexts do not exist in isolation. (8) Reflecting on and exploring a variety of strategies to learn more effectively. (9) Participating as responsible citizens in the life of local, national and global communities. (10) Being culturally and aesthetically sensitive across a range of social contexts. (11) Exploring education and career opportunities. (12) Developing entrepreneurial opportunities. The transferable skills identified in this module are as follows: Taught Practised Assessed Problem solving X X X Working in teams X X Self-management X X X Information gathering/research X X X skills Communication skills X X X Analytical skills X X X Learning strategies X X X Responsible citizenship X X Cultural sensitivity X X Career development X Entrepreneurship X IMM GSM Page 23 of 111 BM001

24 11. Assessment details There are two assessments involved in terms of the Brand Management module: Assignment: The assignment contributes 20% to the overall mark for the module. Assignments will focus on selected study units, and need to be typed. Please ensure that you adhere to the general rules of the IMM Graduate School of Marketing pertaining to the style and format of assignments. You will be issued with a separate brief in this regard. Examination: The exam incorporates all content covered in the workbook and constitutes 80% of the final mark for the Brand Management module. The duration of the examination is three hours and the paper will count 100 marks. The examination paper will consist mainly of paragraph and essay type answers and could be based on answering a relevant case study/relevant case studies. Examination results are usually released within six weeks of sitting the examination and are released in the form of symbols only. The final mark, consisting of an assignment mark and an examination mark, is released in the form of a final percentage (mark out of 100). The grading system is as follows: Percentage Scale Description 75% or more Pass with Distinction 50% - 74% Pass 0% - 49% Fail A timetable of the assessment programme for the semester, including dates for the assignment to be submitted during the course of the year, is available in the Calendar of Events for that year. Please refer to the current issue of the IMM IMM GSM Page 24 of 111 BM001

25 GSM Prospectus. This document and the Student Yearbook provide details of the IMM GSM assessment policy. Under this learning unit refer to, amongst other things, the following: Assessment policy of the IMM GSM in which issues like absenteeism from tests, methods of feedback, moderation and appeals procedures are addressed A detailed timetable of the assessment programme for the year/semester (including due dates for assignments to be submitted during the course of the year/semester) Assessment methods that will be used (e.g. tests, assignments.) Admission requirements for the examination Composition of year mark Any additional assessment information, for example, how to use references, the compilation of a bibliography, the answering of questions according to the use of action verbs Plagiarism. IMM GSM Page 25 of 111 BM001

26 SECTION B The prescribed textbook contains a thorough description of each of the study units of this module. This section of the learner guide will therefore only highlight key elements of the module. Carefully study the learning units from the textbook in accordance with the learning outcomes described in the study units that follow. In order to emphasise the practical relevance of this module, the textbooks concepts will be illustrated with the use of an applied example. When you study the module, you should also think beyond this example to understand the intricacies of brand management. IMM GSM Page 26 of 111 BM001

27 Study Unit 1: Opening perspectives on branding 1.1 Specific learning outcomes The first study unit lays the foundation by setting up the rationale for the entire syllabus. Because brands are so valuable to the organisations that own them and the consumers who purchase them, and because the market-place has become increasingly complex and competitive, brand management is more important and challenging now than it ever has been. Brand managers face a seemingly unlimited number of options and opportunities with respect to product, price, place and promotion strategies. But they also face increased risk as they strive to deal with a sea of changes in the marketing environment, including the rise of private labels, media fragmentation, pressure for short-term results, shifting consumer preferences, and technological advancements that level the product feature playing field, to name just a few. Despite these pressures, many brands continue to grow and flourish, as evidenced by the global successes of such mega-names like Nike, Disney, Mercedes, and others. Moreover, even categories that had previously been thought of as consisting of mundane commodity products now contain brands, including Koo s Chakalakah, Afrox Handigas and Rainbow chickens. Study Unit 1 highlights that by focusing specifically on brands. This learner guide enables students to gain valuable knowledge, broader perspectives, and more strategic insights versus a more general marketing text. The study unit introduces the concept of a brand as an identifiable and differentiated product or service. Brands offer tangible and intangible benefits to the companies who manufacture them, the retailers who sell them, and the consumers who buy them. Examples of strong brands given in the text include not only products and services, but also people, places, and sports, art, and entertainment industries. The study unit describes some of the past and present challenges faced by brands (such as IMM GSM Page 27 of 111 BM001

28 those noted above), and states that the purpose of the learner guide is to set principles, models and frameworks that will help guide managers through these challenges as they plan and execute brand strategies. It is essential that you fully understanding the first study unit in preparation for the rest of the units. Ensure that you have achieved the learning outcomes outlined below which will facilitate your learning over the following weeks that you dedicate to this module: After studying this unit, you should be able to: Brands and brand management Explain what a brand is. Understand the difference between a product and a brand. Discuss why brands matter to consumers and to manufacturers. Explain what can be branded. Have a clear understanding of what are the strongest brands. Explain the challenges and opportunities of branding. Understand market leadership. Explain the brand equity concept. Apply the strategic brand management process. IMM GSM Page 28 of 111 BM001

29 1.2 Brands and brand management Your first task is to thoroughly familiarise yourself with what brands and brand management are, why they are important in the context of marketing and ultimately business success. Good brand management is based on a clear strategy and sound management. Strategic brand management achieves its results through vision, analytical skills and talent. The main driver of strategic brand management is the customer, because the overall need is to adapt brands to suit the requirements of that customer. Strategic brand management seeks to increase the customer s perceived values of a product, thereby increasing brand franchise and equity. Strategic brand management is also concerned with creating, nurturing and building a brand, as well as managing customer and stakeholder relationships. Study reference: Keller, 2013, Chapter Introduction This section provides an introduction to brand management. The section details the three main factors that contribute to brand equity: the initial choices for the brand elements or identities making up the brand; the way the brand is integrated into the supporting marketing programme; and the associations indirectly transferred to the brand by linking the brand to some other entity (e.g., the company, country of origin, channel of distribution, or another brand). Several strategic imperatives for effective brand equity management are introduced in the study unit, namely the brand hierarchy, the brand-product matrix, and policies regarding the strengthening of the brand over time and over geographical boundaries. IMM GSM Page 29 of 111 BM001

30 In this section, the strategic brand management process is described. The strategic brand management process involves four main steps: Identifying and establishing brand positioning and values, planning and implementing brand marketing programmes, measuring and interpreting brand performance, and growing and sustaining brand equity. Branding Brief 1-1 explains the branding lessons Coca-Cola has learnt. Key take-away points 1. A company s management of a brand is typically the determining factor in the ultimate success or failure of the brand. 2. Brands have differentiating features that distinguish them from competitors and add value for consumers. 3. Consumers often don t buy products; they buy the images associated with products What is a brand? Your first step in this section is to identify the definition of a brand and the difference between brands and products. You will find more information on this in Chapter 1 of Keller (2013). Make sure that you understand the meaning of each of these elements, and that you can identify real world examples. Figure 1.1 in Keller (2013) will provide you with an in-depth explanation of the different product levels that can be found Why do brands matter? The question being answered here is why are brands important? What functions do brands perform that make them so valuable to marketers? IMM GSM Page 30 of 111 BM001

31 You need to understand the different perspectives that make brands so important from a consumer perspective as well as from a marketer s perspective. You also need to understand the different risks that consumers may perceive when buying a product and the role that brands play in reducing these risks. The real causes of enduring market leadership are vision and will. Enduring market leaders have a revolutionary and inspiring vision of the mass market, and they exhibit an indomitable will to realise that vision. They persist under adversity, innovate relentlessly, commit financial resources, and leverage assets to realise their vision. (Tellis & Golder, 1996) Can everything be branded? The question being asked now is whether everything can be branded. Remember, a brand is something that resided in the minds of consumers, so almost everything can be branded. The key to branding is that consumers perceive differences among brands in a product category. Even commodities can be branded for example: Coffee (NESCAFÉ), bath soap (Lux), flour (Snowflake), beer (Castle), salt (Cerebos), oatmeal (Quaker), chutney (Mrs Balls), chickens (Rainbow) and even water (Valpré). Consider Branding Brief 1.2 in Keller (2013) and what has happened in the diamond industry as such. You should also understand business-to-business branding as explained in the Science of Branding 1.1, as well as high-tech branding as explained in the Science of Branding 1.2 in Keller (2013). There are many excellent examples of various well-known brands in the branding briefs in your prescribed textbook be sure to read through all of them they will greatly assist you in understanding branding far better. IMM GSM Page 31 of 111 BM001

32 1.2.5 Branding challenges and opportunities Brand management may be even more difficult now, than ever before. You should familiarise yourself with the challenges and opportunities of branding and consider the more recent developments that have significantly complicated marketing practices and pose challenges for brand management. These challenges can be found in Figure 1.9 in Keller (2013). Figure 1.6 and Figure 1.8 provide some wonderful insight regarding brands then and now and the factors that determine enduring leadership as indicated in Figure 1.7. Also consider the Science of Branding 1.3 that provides a good understanding of market leadership. You should also be aware of the proliferation of new brands and products as well as the erosion or fragmentation of traditional advertising media and the emergence of interactive and non-traditional media, promotion and other communication alternatives. Other important aspects that should not be ignored are the increase in competition, increased costs of introducing new products and the greater accountability on marketers to achieve profit targets The brand equity concept Explain the brand equity concept. Branding is all about creating differences it is imperative to ensure that you understand the basic principles of branding and brand equity. Study Unit 2 provides an overview of brand equity and a blueprint for the rest of the learner guide. The remainder of the learner guide addresses in much greater depth how to build brand equity, measure brand equity and manage brand equity. The concluding sections of the learner guide provide some additional applications and perspectives on branding. IMM GSM Page 32 of 111 BM001

33 1.2.7 Strategic brand management process The remainder of this section provides an overview of the strategic brand management process that helps to pull all these various concepts together. You would be required to apply the steps involved in the strategic brand management process. Figure 1.12 in Keller (2013) would be extremely helpful in this regard Conclusion This study unit provides a thorough introduction to brand and brand management. Ensure you are familiar with the content of the following as explained in Keller (2013): Science of Branding 1-1: Understanding Business-to-Business Branding 1-2: High-Tech Branding 1-3: Understanding Market Leadership 1-4: Marketing brands in a recession Branding Briefs 1-1: Coca-Cola s Branding Lesson 1-2: Branding Commodities 1-3: Place Branding 1-4: Brand Focus 1.0: History of Branding Read through these sections in Keller (2013). Ensure you are familiar with the content of these branding briefs as all provide valuable information regarding the aspects of this study unit. IMM GSM Page 33 of 111 BM001

34 The field of brands and brand management is constantly changing and you therefore need to be fully aware of the most recent changes in branding and brand management. The following self-assessment questions are examples that may be used to test your understanding of the module so far. Also refer to the discussion questions found at the end of each chapter in Keller (013). Self-assessment exercise 1. What do brands mean to you? 2. What are your favourite brands and why? Check to see how your perceptions of brands might differ from those of others. 3. Who do you think has the strongest brands? Why? 4. What do you think of the Interbrand Best Global Brands 2011? Do you agree with the rankings? Why or why not? 5. Can you think of anything that cannot be branded? 6. Select an example that was not discussed in each of the categories provided (services; retailers and distributors; people and organisations; sports, arts, and entertainment) and describe how each is a brand. 7. What do brands mean to you? 8. What are your favourite brands and why? Check to see how your perceptions of brands might differ from those of others. IMM GSM Page 34 of 111 BM001

35 Study Unit 2: Developing a brand strategy 2.1 Specific learning outcomes This study unit deals with the topic of brand equity and provides a blueprint for the rest of the study units. The first section of this study unit introduces the concept of customer-based brand equity and provides a useful overview or topline summary of the scope of topics covered in the entire syllabus. The second section develops a conceptual model of brand knowledge and addresses the critically important issue of competitive brand positioning. The third section describes the brand resonance and brand value chain models that assist marketers in developing profitable marketing programmes. It is essential that you fully understand the second study unit in preparation for the rest of the study units. Ensure that you have achieved the learning outcomes outlined below which will facilitate your learning over the following weeks that you dedicate to this module: After studying this unit, you should be able to: Customer-based brand equity Explain customer-based brand equity. Understand the concept of brand knowledge. Explain the sources of brand equity. IMM GSM Page 35 of 111 BM001

36 Apply the four steps of brand building to build a strong brand. Explain the customer-based brand equity pyramid. Understand the sub-dimensions of brand building blocks. Explain the ten commandments of emotional branding. Understand the possible measurements of brand building blocks. Explain how to create customer value. Explain the marketing advantages of strong brands. Brand positioning Explain the identification and establishment of brand positioning. Apply positioning guidelines. Explain how to identify and establish brand mantras. Understand the importance of internal branding. Be able to conduct a brand audit. Brand resonance Explain the term brand resonance Apply the steps involved in building brand resonance. Explain brand value chain. Apply a brand value chain to a brand of your choice. Contrast brand equity and customer equity. IMM GSM Page 36 of 111 BM001

37 2.2 Customer-based brand equity (CBBE) Study reference: Keller, 2013, Chapter 2 & Introduction In studying Chapter 2 of Keller (2013), we start to focus on the important component of brand equity. This section defines the concept that is the focus of the learner guide. Customerbased brand equity (CBBE) is the differential effect that brand knowledge has on consumer response to the marketing of that brand. Brand knowledge is a function of awareness, which relates to consumers ability to recognise or recall the brand, and image, which consists of consumers perceptions of and associations with the brand. Building awareness requires repeatedly exposing consumers to the brand as well as linking the brand in consumer memory to its product category and to purchase, usage and consumption situations. Creating a positive brand image requires establishing strong, favourable and unique associations for the brand. Key take-away points: 1. Customer-based brand equity is the differential effect of brand knowledge on consumer response to the marketing of a brand. 2. Positive brand equity results when consumers are familiar with the brand and have strong, favourable and unique associations for it. 3. The power of the brand and its ultimate value to the firm resides with customers. IMM GSM Page 37 of 111 BM001

38 2.2.2 Customer-based brand equity and brand equity Customer-based brand equity and brand equity background You need to familiarise yourself with the concept of customer-based brand equity - The differential effect that brand knowledge has on consumer response to the marketing of that brand. (Keller, 1993.) Understand the three key ingredients of this definition: (1) differential effect; (2) brand knowledge; and (3) consumer response to marketing. Figure 2.1 in Keller (2013) provides a detailed account of the advantages of strong brands and you should take cognisance of these advantages. Understand the concept of brand equity using the metaphor of a bridge being a connection to, and a reflection of the past as well as providing direction for the future. Annually, the global branding agency, Interbrand publishes a Best Global Brands report on the world s most valuable brands. The top ten brands in 2011 according to the Interbrand Best Global Brands report: IMM GSM Page 38 of 111 BM001

39 1 Coca-Cola 71,861 ($m) 2 IBM 69,905 ($m) 3 Microsoft 59,087 ($m) 4 Google 55,317 ($m) 5 GE 42,808 ($m) 6 McDonald's 35,593 ($m) 7 Intel 35,217 ($m) 8 Apple 33,492 ($m) 9 Disney 29,018 ($m) 10 Hewlett-Packard 28,479 ($m) Making a strong brand: brand knowledge You need to be able to examine the benefits of brand knowledge as a key to creating brand equity because it creates the differential effect that drives brand equity. Understand that brand knowledge consists of a brand node in memory with a variety of associations linked to it and brand knowledge has two components: brand awareness and brand image. Follow Science of Branding 2-1 in Keller (2013) to have a better understanding of Naomi Klein s No Logo book and the impact on brands. IMM GSM Page 39 of 111 BM001

40 Sources of brand equity Understand the two sources of brand equity, namely brand awareness and brand image in their entirety. Brand awareness is important because: 1) it is a necessary condition for inclusion in the set of brands being considered for purchase, 2) in lowinvolvement decision settings it can be a sufficient condition for choice, and 3) it influences the nature and strength of associations that comprise the brand image. Awareness can be heightened by increasing consumer exposure to the brand and by linking the brand to product category, consumption and usage situations. A brand s image reflects all the associations consumers have for a brand in memory. The strength, favourability and uniqueness of the associations affect the response consumers will have to the brand and to its supporting marketing activities. Associations can be about attributes and benefits of the brand, or attitudes toward it. Attributes, which are descriptive features of a brand, can relate to the actual physical components and ingredients of a brand (productrelated) or to such things as the price, imagery, feelings and experiences, and personality associated with the brand (non-product-related) Identifying and establishing brand positioning The section addresses how ideal or desired brand knowledge structures can be defined with respect to brand positioning. This involves selecting a target market, segmenting the market, and evaluating the competition. With respect to competition, positioning the brand with points-of-parity and points-of-difference is discussed next. Points-of-difference are characteristics unique to the brand that help distinguish it from the competition, while points-of-parity may be shared by other brands in a given category. IMM GSM Page 40 of 111 BM001

41 Positioning guidelines Once a brand has an established positioning, it may be necessary to update the positioning over time. The section discusses the aspects of defining and communicating the competitive frame of reference, and how to choose points of difference. With respect to competition, positioning the brand with points-of-parity and points-of-difference is discussed next. Points-of-difference are characteristics unique to the brand that help distinguish it from the competition, while points-ofparity may be shared by other brands in a given category. It further covers the aspect of how to update your brand positioning over time and covers the laddering technique used to deepen the meaning of brand associations in the minds of consumers. The chapter also details how marketers can change positioning in response to competition by doing nothing, going on the offensive, or going on the defensive. Ensure you follow Branding Brief 2-1: Positioning Politicians to understand the concept of positioning better Defining and establishing brand mantras This study unit provides information on how to establish brand values. Marketers can use a mental map to represent all associations and responses consumers have regarding the brand. The core brand values are the five or ten most important attributes or benefits of the brand that appear on the mental map. A brand mantra can capture the core brand values and provide the essence of the brand in a short phrase. You should familiarise yourself with the concepts core brand associations and brand mantras. When you consider the aspect of designing a brand mantra you should understand the following: The term brand functions describes the nature of the product or service or the type of experiences or benefits the brand provides. The descriptive modifier further clarifies its nature. IMM GSM Page 41 of 111 BM001

42 The emotional modifier provides another qualifier how exactly does the brand provide benefits, and in what way? Follow Branding Brief 2-2: Nike Brand Mantra as well as Branding Brief 2-3: Disney s Brand Mantra, to understand the concept Brand Mantra s even further. You should also read The Science of Branding 2-2: Branding Inside the organisation and follow Brand Focus 2.0 the marketing advantages of strong brands. Let s consider three examples of the above-mentioned: Emotional modifier Descriptive modifier Brand function Authentic Athletic Performance Fun Family Entertainment Fun Folks Food Brand resonance and the brand value chain Background In this section the focus is on the introduction of two new models the brand resonance model, which describes how to create intense, active loyalty relationships with customers, and the brand value chain model, which is a means by which marketers can trace the value creation process for their brands to better understand the financial impact of their marketing expenditures and investments. IMM GSM Page 42 of 111 BM001