Brand Management. Online Course Level 1. (Part of ISB Customer Behavior & Branding PGPpro)

Transcription

1 Brand Management Online Course Level 1 (Part of ISB Customer Behavior & Branding PGPpro) V. Kumar, PhD Regents Professor, Richard and Susan Lenny Distinguished Chair & Professor of Marketing, Executive Director, Center for Excellence in Brand & Customer Management, and Director of the Ph.D. Program in Marketing J. Mack Robinson College of Business, Georgia State University, Atlanta GA and Chang Jiang Scholar, HUST, Wuhan China. Fellow, Hagler Institute for Advanced Study, TAMU, College Station, TX Senior Fellow, Indian School of Business, India Dr. V Kumar 1

2 What you will learn in this section What is a brand? Why do brands matter? What are the most valuable global and Indian brands? What is brand equity? What methods are used to measure brand equity? Dr. V Kumar 2

3 MODULE 1 The Concept of Branding - Introduction Dr. V Kumar 3

4 Source: Dr. V Kumar 4

5 BRAND CONCEPT What is a Brand? A name, term, design, symbol, or any other feature that identifies one seller s good or service as distinct from those of other sellers. - American Marketing Association (AMA) The different components of a brand that identify and differentiate it are brand elements Dr. V Kumar 5

6 BRAND CONCEPT What is a Brand? (contd.) Many practicing managers refer to a brand as more than that as something that has actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace We can make a distinction between the AMA definition of a brand with a small b and the industry s concept of a Brand with a capital B Dr. V Kumar 6

7 BRAND CONCEPT Brands vs. Products A product is anything we can offer to a market for attention, acquisition, use, or consumption that might satisfy a need or want. A product may be one of the following: A Physical Good (e.g. Automobile) A Service (e.g. Airlines) A Person (e.g. Sportsperson) A Retail Store (e.g. Departmental Store) An Idea (e.g. Social Cause) A Place (e.g. Country) An Organization (e.g. Nonprofit Organization) Dr. V Kumar 7

8 BRAND CONCEPT So, what is a brand? A brand is therefore more than a product, as it can have dimensions that differentiate it in some way from other products designed to satisfy the same need. Some brands create competitive advantages with product performance; other brands create competitive advantages through non-product-related means. Dr. V Kumar 8

9 BRAND CONCEPT Why do Brands Matter? Aids in Consumer Purchase Decisions Creates Customer Loyalty Protects Firm from Competition Eases Marketing Costs Serve as Assets for the Firm Enhances Firms Market Value Dr. V Kumar 9

10 BRAND CONCEPT How do Brands Influence Consumers? Influence on Consumers Identification of source of product Assignment of responsibility to product maker Reduces risk Reduces the search cost Promise, bond, or pact with the maker of the product Symbolic device Signal of quality Dr. V Kumar 10

11 BRAND CONCEPT Reducing the Risks in Product Decisions Consumers may perceive many different types of risks in buying and consuming a product: Functional risk The product does not perform up to expectations Physical risk The product poses a threat to the physical well-being or health of the user or others Financial risk The product is not worth the price paid Social risk The product results in embarrassment from others Psychological risk The product affects the mental well-being of the user Time risk The failure of the product results in an opportunity cost of finding another satisfactory product Dr. V Kumar 11

12 BRAND CONCEPT What about Firms? Influence on Firms Means of identification to simplify handling or tracing Means of legally protecting unique features Signal of quality level to satisfied customers Means of endowing products with unique associations Source of competitive advantage Source of financial returns Dr. V Kumar 12

13 BRAND CONCEPT What can be Branded? Ultimately, a brand is something that resides in the minds of consumers The key to branding is that consumers perceive differences among brands in a product category Even commodities can be branded: Coffee Bath Soap Flour Beer Salt Cereals Chicken Water Dr. V Kumar 13

14 BRAND CONCEPT What is Branded? Physical goods: Services: Retailers and distributors: Online products and services: People and organizations: Sports, arts, and entertainment: Geographic locations: Ideas and causes: Dr. V Kumar 14

15 MODULE 2 Valuable Branding Dr. V Kumar 15

16 VALUABLE BRANDS What are the most valuable brands? Brand Values measured by Interbrand, Brand Finance, and BrandZ Dr. V Kumar

17 VALUABLE BRANDS Interbrand s 2017 Best Global Brands Source: Best Global Brands 2017, Interbrand Dr. V Kumar 17

18 VALUABLE BRANDS Brand Finance 2018 Global 500 Brands 2018 Rank 2017 Rank Brand Country of Origin 2018 Brand Value ($m) Change in Brand Value from United States 150, % 2 2 United States 146, % 3 1 United States 120, % 4 6 South Korea 92, % 5 9 United States 89, % 6 4 United States 82,422-5% 7 5 United States 81,163 +6% 8 7 United States 62,826-5% 9 8 United States 61,480-1% China 59, % com/images/upload /bf_global2018_500 _website_locked_fin al_spread_ pdf Dr. V Kumar 18

19 VALUABLE BRANDS BrandZ s Top 100 Global Brands in Rank 2016 Rank Brand Country of Origin Sector 2017 Brand Value ($m) Change in Brand Value from United States Technology 245,581 +7% 2 1 United States Technology 234,671 +3% 3 3 United States Technology 143, % 4 6 United States Retail 139, % 5 12 United States Technology 129, % 6 5 United States Telecom 115,112 +7% 7 14 United States Payments 110, % 8 7 China Technology 108, % 9 9 United States Technology 102, % 10 4 United States Fast Food 97, % dbrown.com/brandz /top-globalbrands/2017 Dr. V Kumar 19

20 VALUABLE BRANDS The Newcomers Brands added in 2017 to the BrandZ Top 100 Most Valuable Global Brands Source: Dr. V Kumar 20

21 VALUABLE BRANDS Top 20 Risers Fastest Growing Brands in the 2017 BrandZ Most Valuable Global Brands Source: Dr. V Kumar 21

22 VALUABLE BRANDS BrandZ s Top 10 Brands by Region 2017 Top Brands from Continental Europe Top Brands from the UK Source: Dr. V Kumar 22

23 VALUABLE BRANDS BrandZ s Top Brands by Region 2017 (contd.) Top Brands from Asia Top Brands from Latin America Top Brands from India Dr. V Kumar 23

24 VALUABLE BRANDS BrandZ s Top Global Brands by Industry in 2017 APPAREL CARS Source: 2017 BrandZ Top 100 Brands Note: Lists only show top 5 Dr. V Kumar 24

25 VALUABLE BRANDS BrandZ s Top Global Brands by Industry in 2017 LUXURY RETAIL Source: 2017 BrandZ Top 100 Brands Note: Lists only show top 5 Dr. V Kumar 25

26 VALUABLE BRANDS BrandZ s Top Global Brands by Industry in 2017 SOFT DRINKS BEER Source: 2017 BrandZ Top 100 Brands Note: Lists only show top 5 Dr. V Kumar 26

27 VALUABLE BRANDS BrandZ s Top Global Brands by Industry in 2017 PERSONAL CARE FAST FOOD Source: 2017 BrandZ Top 100 Brands Note: Lists only show top 5 Dr. V Kumar 27

28 VALUABLE BRANDS BrandZ s Top Global Brands by Industry in 2017 GLOBAL BANKS REGIONAL BANKS Source: 2017 BrandZ Top 100 Brands Note: Lists only show top 5 Dr. V Kumar 28

29 VALUABLE BRANDS BrandZ s Top Global Brands by Industry in 2017 TECHNOLOGY TELECOM PROVIDERS Source: 2017 BrandZ Top 100 Brands Note: Lists only show top 5 Dr. V Kumar 29

30 VALUABLE BRANDS BrandZ s Top Global Brands by Industry in 2017 OIL AND GAS INSURANCE Source: 2017 BrandZ Top 100 Brands Note: Lists only show top 5 Dr. V Kumar 30

31 VALUABLE BRANDS What challenges and opportunities are brands faced with? Dr. V Kumar 31

32 VALUABLE BRANDS The Brand Bubble Dr. V Kumar 32

33 VALUABLE BRANDS Wall Street Values Brands More than Main Street The financial markets think brands are worth more than the consumers who buy them Today, brands are worth 30% of the market capitalization of the S&P 500. This has risen steadily from 5% 30 years ago. Dr. V Kumar 33

34 VALUABLE BRANDS Wall Street Values Brands More than Main Street (contd.) In a study that surveyed over 500,000 consumers over a period of 15 years in 44 countries on 40,000 brands, it was found that: Brand awareness is down 20% Brand esteem is down 12% Perception of brand quality is down 24% Trust in brands is down 50% Dr. V Kumar 34

35 VALUABLE BRANDS The Accelerated Decay of Brands Consumerism is drastically and profoundly changing, and in turn is rapidly accelerating the decay of brands Consumers are quicker to punish undifferentiated and uninteresting brands Brand equity is not the cushion it once was Brand equity is a measure of what the brand is up till now and consumers seem to believe that brands past reputations mean very little Old brand management models are not allowing brands to keep up with the new digital consumer who moves faster than old marketing strategies The result is a failure to differentiate the brand Dr. V Kumar 35

36 VALUABLE BRANDS The Paradox Today, consumers have more brand choices than ever before Yet, they are emotionally invested in fewer brands than ever before Dr. V Kumar 36

37 VALUABLE BRANDS Why the Change in Consumer Behavior? Brands were originally built on the back of mass media Media fragmentation, internet, and social media have allowed low cost competitors to attack without geographical boundaries or the need for access to massive capital Consumers have also lost trust in brands (Financial institutions, product recalls, etc.) Dr. V Kumar 37

38 VALUABLE BRANDS Why the Change in Consumer Behavior? (contd.) Consumers now demand creativity (YouTube videos) and have boosted their creativity expectations Most brands don t meet consumers creativity expectations and hence don t differentiate Dr. V Kumar 38

39 MODULE 3 The Concept of Brand Equity Dr. V Kumar 39

40 BRAND EQUITY What is Brand Equity? A set of brand assets and liabilities linked to a brand, its name and symbol, that add or subtract from the value provided by the product The Assets Are: Brand Loyalty Name Awareness Perceived Quality Brand Associations Other Proprietary Brand Assets Dr. V Kumar 40

41 BRAND EQUITY How to Measure the Value of a Brand? Dr. V Kumar 41

42 BRAND EQUITY David Aaker s Brand Equity Model Brand Loyalty Brand Awareness Reduced marketing costs Trade leverage Attracting new customers Create awareness Reassurance Time to respond to competitive threats Anchor to which other associations can be attached Familiarity-liking Signal of substance/commitment Brand to be considered Provides value to customer by enhancing customer s: Interpretation/processing of information Confidence in purchase decisions Use satisfaction Brand Equity Perceived Quality Brand Associations Other Proprietary Brand Assets Reason-to-buy Differentiate/position Price Channel member interest Extensions Help process/retrieve information Differentiate/position Reason-to-buy Create positive attitude/feelings Extensions Competitive advantage Provides value to firm by enhancing: Efficiency & effectiveness of marketing programs Brand loyalty Prices/margins Brand extensions Trade leverage Competitive advantage Dr. V Kumar 42

43 MODULE 4 Measuring Brand Equity Dr. V Kumar 43

44 BRAND EQUITY What Methods Are Used to Measure Brand Equity? Customer Mind set Market Performance Measuring the Sources of Brand Equity Dr. V Kumar 44

45 BRAND EQUITY What Methods Are Used to Measure Brand Equity? Excess-Price Approach Price premium commanded by a brand due to name awareness, perceived quality, and loyalty. Ask customers how much they would pay for the product. This is called a dollar metric scale a direct measure of the brand name s value. Observation Observing price levels, pricing patterns, & market responsiveness to price changes in the market to measure the price. Dr. V Kumar 45

46 BRAND EQUITY What Methods Are Used to Measure Brand Equity? Trade-off Analysis Respondents are asked to make trade-off judgments about brand attributes. For example, suppose that a computer s attributes include price, service support, and name. A respondent would prefer an established brand at a higher price or another respondent can prefer a lesser known brand at a lower price. Dell starting at $699 vs. Apple Mac Pro starting at $2,999 (price & brand)? Apple with no service vs. Dell with service (service support & brand)? Dr. V Kumar 46

47 BRAND EQUITY What Methods Are Used to Measure Brand Equity? Impact on Customer Evaluation The impact of the brand name on customer evaluation, as measured by preference, attitude, or intent to purchase. The marginal value of the extra sales or market share that the brand name supports is the value of the brand. Replacement-Cost Approach Identifying the cost of establishing a comparable product that can bring in the same amount of business. Dr. V Kumar 47

48 BRAND EQUITY What Methods Are Used to Measure Brand Equity? Stock-Price Approach Using stock price to evaluate the value of the brand. The stock market will adjust the price of a firm to reflect the future prospects of the brand. Future-Earnings Approach The discounted present value of future earnings attributable to brand-equity assets. Applying an Earnings Multiplier Estimate current earnings of the brand, and apply an earnings multiplier (which can be obtained from the price earnings ratio or, P/E). Dr. V Kumar 48

49 BRAND EQUITY Other Methods Used to Measure Brand Equity? Qualitative research techniques for tapping into consumer brand knowledge free associations, projective techniques, brand personality tests, etc. Neuromarketing Study of how the brain responds to marketing stimuli, including brands. Research indicates that consumer buying decision is a unconscious habitual process Dr. V Kumar 49

50 Level 1 Completed! Dr. V Kumar 50