Branding Notes by arvind mallik

Teaching Plan: Brand Management‐MBA Teaching Plan: Brand Management Course: MBA Instructor: Dr Amit Rangnekar Objectives: Help participants understand various aspects of brand management, and the importance and contribution of strategic branding to the company and its consumers Teaching Methodology: Theory plus case studies in almost every session Evaluation Criteria (Marks): Written exam (50) + 2 Class presentations (20 each) + Class participation 10 marks for = Total 100% Session Details: Topic 1 Concepts 2 3,4

Product Brand

Brand Positioning Brand Resonance Brand Identity

6,7 8,9,

11,12 Brand Portfolio 13 Brand Equity 14 Lifecycle Management 10,15 Presentations

Sub Topic Gap Analysis, Environment, Situation Analysis, Marketing Classification, Customer Value Hierarchy, NPD Brand Basics, Branding Decisions, Brand Decision Making Crafting the Positioning, Product Differentiation Resonance & Value Chain Models Essence, Promise, Personality, Identity, Kapferer’s Prism, Brand Customer Relationship, Logos, Mascots, Taglines, Packaging, Executing the Brand Identity Brand Architecture, Extension, Strategy Building Equity, Brand Valuation Models Stages and Strategies in Brand Management

Case (From) Tata Group Tata Nano Dominant Brands Nivea Nike v Adidas Audi, Peter England

Gillete, Amul FabIndia Chic Shampoo

By Students

References Books • Keller, K, Strategic Brand Management, 3e, Prentice Hall, New Jersey, 2008 • Aaker, D A, Building Strong Brands, Free Press, 1996 • Kapferer, Jean Noel, Strategic Brand Management, Kogan Page, 1997 • Kumar, Ramesh, “Marketing and Branding-The Indian Scenario”, Pearson • Pran K.Chaudhary (2001), Successful Branding, Hyderabad: University Press Internet • www.brandingasia.com, www.brandinstitute.com, www.brandchannel.com • www.brandrepublic.com , EBSCO database Daily / Weekly Reading • Economic Times- p4 “Business of Brands”, Wednesday -“Brand Equity” • Business Standard Supplement “The Strategist” • The Mckinsey Quarterly • Harvard Business Review

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Product Brand

Brand Positioning Brand Resonance Brand Identity

6,7 8,9,

11,12 Brand Portfolio 13 Brand Equity 14 Lifecycle Management 10,15 Presentations

Case (From) Tata Group Tata Nano Dominant Brands Nivea Nike v Adidas Audi, Peter England

Gillete, Amul FabIndia Chic Shampoo

By Students

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Brand Management MBA Notes Dr Amit Rangnekar

Analysing market opportunities Strategic gap analysis

Intensive Growth Strategies Ansoff’s Product-Market Expansion Grid- Case- Maruti Suzuki

Current Markets New Markets

Current Products Market Penetration Launch 800, grabbed market share on styling, fuel economy, affordability Market Development Launch in class II-IV towns, easy loans, higher payback periods

New Products Product Development New models Van, Zen, Esteem, Wagon R, Baleno, Swift, SX4 Diversification Training schools, Auto insurance, True Value cars,

Integrative growth- Vertical-Backward (Reliance- Polyesters), forward (Videocon-Next), Horizontal- M&A (HLL-Lakme) Diversification growth- Reliance Retail BCG Matrix- Growth Share Matrix- Case Classifies product portfolio into categories, firms should have a healthy balance. Dogs- Low market share & low market growth. Phase out / tweak, invest & build Question Mark/Problem Child- Low market share, operate in high market growth. Entry level, brand may ascend / descend / stagnate- important to build. Star- High market share, operate in growing market. High growth but high promotional cost, need to be sustained. Cash Cow- Mature products generate high cash, but low growth. Sustain, they generate funds for new projects and maintaining portfolio. www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar

Strategic Marketing Environment

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Brand Management MBA Notes Dr Amit Rangnekar Marketing Plan A marketing plan aims to help organize and implement the marketing strategy for its products or services. Part of the overall corporate objectives.

Situation Analysis

Corporation Customer Competition Conditions Opportunities Dynamics

Where do we want to go?

Marketing Objective

Marketing Strategy

Leadership Rank Geographic Share Profits Growth

Mktg Research Segmentation Targeting Positioning Differentiation Mix- 4Ps Prod Life Cycle

Where are we?

How do we get there?

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Execution Control

Projections Orgl Structure Implementation Performance Review

Are we getting there?

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Brand Management MBA Notes Dr Amit Rangnekar

Product “We lead the public with new products than ask them what products they want. They don’t know what’s possible, but we do. So instead of doing a lot of market research, we try to create a market for a product by educating them” (Akio Morita, Sony) • Product- offered to satisfy a want or need. Judged on features, quality, services mix and price. • Product planning process- issues related to product mix & product lines. How 5 product levels add more customer value: core benefit, basic, expected, augmented, and potential. • Product differentiation- Choice of form, features, performance quality, conformance quality, durability, reliability, repairability, and style. PQRSTUV • Services differentiation- Ordering ease, delivery installation, customer training, customer consulting, maintenance and repair • Convenience items purchased frequently, immediately, with minimum effort. • Capital goods last long and are purchased infrequently by consumers. • When physical product cannot easily be differentiated (commodities), value additions, branding and improving quality are the key to competitive success. Computers, education Exercise- 3 examples of products performing at exceptional levels despite intense competition Exercise- Select 1 convenience & 1 capital good, compare & contrast consumers value hierarchy. Product Strategy-Coordinate product mix/lines, brands, packaging & labeling- decisions Product Levels: The Customer Value Hierarchy Product Levels Core Basic Expected

What it means

Marketers Job

The service / product bought Benefits Attributes & conditions

Provide benefits

Augmented

Exceed expectations

Potential

New ways to satisfy & differentiate

Turn benefit to product Minimum buyer expectations, so price, convenience location- important (emerging markets) Augmented benefits become expected benefits, competitors step in- important (developed markets) Anticipate & innovate

Hotel Customer Place to sleep Bed, bath, closet Clean bed & toilets, peace Satellite TV, Tea machine, Internet Customised service

ITC Hotels

Budget-Fortune 5-Star- Welcome

Super deluxe ITC Welcom HeritagePalaces, forts

To plan the market offering, a marketer must consider 5 product levels that encompass the augmentations & transformations the product ultimately undergoes. Each level adds more customer value, the 5 levels constitute a customer value hierarchy. Product Classification Durability & tangibility • Non durables- tangibles, one or few uses, frequent purchase, available, promotion - Soap, toothpaste, beer • Durables- tangibles, many uses, infrequent purchase, personal selling, high margin, guarantee / warranty- Fridge, clothes • Services- intangible, inseparable, variable, perishable, quality, adaptability, credibilitywww.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar Repairs & servicing, legal advice, haircut, Consumer goods • Convenience goods- frequent, immediate, minimum effort- staples (paste, soap, biscuits)/ impulse (chocolate, chips)/ emergency (umbrella sweaters)- product location importantpos • Shopping goods- selection, comparison, (homogeneous- differ in price, heterogeneousdiffer in features . service)- variety & trained salesmen • Specialty goods- unique, brand identity, special purchasing effort- cars, camera, suitscustomers seek location, convenience not important • Unsought goods- unthought, unknown, but useful- Insurance, encyclopaedia- advertising, personal selling. Industrial-goods • Materials & parts (raw materials, manufactured materials & parts) • Capital items (installations & equipment) • Suppliers & business services (operationals, supplies, maintenance, repair) Product Mix - HUL Portfolio- Consumer Product-Mix Width

• •

Axe Rexona

Lakme

BB Lipton

Bru

Kissan Knorr Annapurna

Ice cream

Pepsodent Close Up

Foods

Sunsilk Natural Clinic

Coffee

Fair & lovely Ponds

Tea

Oral care

Surf Excel Rin Wheel

Colour cosmetics

Hair care

Lux Lifebuoy Liril Hamam Breeze Dove Pears Rexona

Deodorants

Skin care

Length

Laundry

Product line

Foods

Personal wash

Home & Personal care

Kwality Walls

Product satisfies a need Product line is a group of brands, closely related in terms of their functions & benefitsDell’s desktops & laptops, Nokia’s mobiles. • Product mix- total set of brands marketed by a firm, may contain product lines • The width of the product mix is number of product lines offered. HP product mix covers PCs, Laptops, Printers within the personal & business computing market. • Mix- set of all products & product lines • Width- How many product lines- HUL 11 lines • Length- product mix length is the total number of items in the mix- 25, average length is 25/11 = 2 • Depth- Variants of each product in the line- Lux has 4 fragrances and 2 sizes, so 8 • Consistency- How closely are the functions related- not consistent if they perform different functions, but consistent as common distribution channels • Tools to develop the marketing strategy • Deciding which product lines to grow, maintain, harvest, and divest 5 amitrangnekar@gmail.com www.dramitrangnekar.com

Brand Management MBA Notes Dr Amit Rangnekar Product differentiation • Product dimensions- form, features, performance, conformance, durability, reliability, repairability, style & design • Service dimensions- ordering ease, delivery, installation, customer training, customer consulting, maintenance & repair Product line • To upgrade customers - Maruti 800, Alto, Zen , Wagon R • To cross-sell- HP printers, PC & Laptops, Videocon- Washing machine, TV, fridge, microwave, AC • Line-stretch- Titan:Down-market(Sonata), Up-market(Xylys), 2way(Fastrack), Taj Hotels (Ginger, Palaces, International) • Line fill- Maruti variants, I-Pod- nano, shuffle, classic, 80/40/20/8/4gb • Line prune- Reduce unwanted / unprofitable- Maruti Gypsy Product-Mix Pricing Besides the core pricing strategies like penetration, premium, economy & skimming, other strategies include • Psychological- Bata, Mobile Airtime Tariffs • Geographical- LG electronics across Urban/Rural India • Promotional – Sansui, AKAI • Loss Leader- Factory outlets • Special Discounts / Rebates - BOGOF, % Off, Sale • Financing- EMIs, Low interest rates • Warranties/ AMCs- Onida, Cars, PCs- Extended warranties, free AMC • Psychological Discounting- Prices slashed 399 to 199, Baazee • Old for New- Exchange offers-Van Heusen, TVs • Price point-Cadburys- Full range @ Rs 1 to Rs 500 • Value –Superstores-Big Bazaar Discriminatory- Same brand/service, 2 prices • Customer segment- Student discounts • Product form- Ketchup-100gm-20, 250gm-45, 500gm-75 • Image- Hotels-Taj Palaces, Resorts, Business Hotels, Budget Hotels • Location-Theatres-Stall/ Balcony/Dress Circle, Stadium-Pavilion, Stands • Time- Seasonal-Hotels, Clothes, Bakeries & Bars- happy hours • Product line-Full Range in all segments- Maruti Cars 2 Lacs to 8 Lacs at every 25000 intervals , Nokia- range covering all price points • Optional feature pricing- Cars- Insurance+ Deck+ Central Lock free • Captive product- Cameras / Razors cheap but consumables costly • 2-Part- Esselworld- admission + rides, Airtime + SMS/VMS/STD • By-product- Lubricants with petrol • Product bundling- Season tickets, Time share • Internet- cheapest-No layers, minimum transaction cost, auctions, bargains, visibility, convenient www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar Other ways to ‘increase’ prices without increasing price Revise discount structure Premium for urgent orders Change minimum order size/shipper Interest on overdue outstandings / penalty clause Charge for delivery/ installation Produce less of low margin models Packaging and labeling- The 5th P, part of product strategy Packaging- Activities of designing and producing the container for a product 3 levels: Primary, Secondary, Shipper, Insert • Promotional value- packaging is buyer’s 1st product encounter- can turn on or off • Functional components- Product protection during transportation & storage, usage convenience, ease of storage, safety, conveying usage information & instructions • Aesthetic components- Design, size, shape, material, color, text, graphics, branding, harmonizing the packaging elements Labeling Identifying product or brand, grading, describing the product, adhering to regulatory requirements, promote through attractive graphics. Warranties & Guarantees- Expected product performance level by manufacturer, reduces a buyer’s perceived risk, helps when not so well-known product’s quality is superior to competition. New product development (NPD) • Idea generation- Employees, Sales force, Trade, Competitors, Customers • Idea screening- Feasible, Workable, Practical • Concept development and testing- Feedback from target audience • Marketing strategy- Mix (4Ps), STPD, Targets, Projections, Geographies • Product development- Final touches & Mfrg • Test Marketing- Geography or Segment • Commercialisation- National / Global launch Why new product development (NPD) • Changing customer needs – Diet Coke, Saffola • New Segment Entry- Maruti SX4 • Changing market needs- Scooters to Bikes • Own successes- Brand / line extensions- Maggi • Competitive Successes- Krackjack- 50:50, Marie • New Capabilities- UB Group • New Concepts- Suzuki Swift, Tata Ace / 1L Car • New technology- I-Pod, I-Phone, TV • Product lifecycle- MS Office, Play Station 1,2,3 • Portfolio / Business realignment- Reliance Mobile • Environmental changes- Music downloads

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Unexplored Opportunities

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Brand Management MBA Notes Dr Amit Rangnekar

Brand Management Brand: A brand is a mixture of attributes, tangible and intangible, symbolized in a trademark, which, if managed properly, creates value and influence. • “Promise” Harish Bijoor • “Strategic Asset” Nirmalya Kumar • “Functional, Economic & Emotional Value Propositions” –Deepak Jain • “A collection of perceptions held in the mind of the consumer” Susan Fournier • “A name, term, sign, symbol or design, or a combination of these, that is intended to identify the goods and services of one business or group of businesses and to differentiate them from those of competitors” Kotler • “A mixture of tangible and intangible attributes symbolised in a trademark, which, if properly managed, creates influence and generates value” Interbrand Brand & branding are different concepts. The brand exists in your mind, and is a collection of associations or feelings people have about a particular product, service, or an organization. Branding is the tangible process of creating the signals that generate these associations. Branding: Endowing products and services with the power of a brand • Select & and blend tangible and intangible attributes to differentiate the product, service or corporation in an attractive, meaningful and compelling way. • Establish a differentiated brand meaning that target consumers care about • Differentiation and relevance – not awareness – make and keep a brand strong. • Teach consumers “who” (product), “what” (function) & “why” (differential) • Create mental structures that help consumers organize their knowledge of products & services so as to clarify their decision-making and provide value to the firm. • Know your audience, your competition & clearly highlight differences over the competition • Brand equity- The value of a brand, based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations. Also includes other “intangible” assets such as patents, trademarks and channel relationships. • Brand image- The set of beliefs that customers hold about a particular brand, important to develop well, as a negative brand image can be very difficult to shake off. • Brand extension- Using a successful brand name, to launch a new or modified product in a new market. ‘Virgin’ brand extended & applied to quite diverse & distinct markets. Co-Branding-Brands sold or marketed jointly with other brands that add value, have equity, and are perceived as an appropriate fit, exit clause critical- McDonalds- Coke • Logical fit between 2 brands can maximize individual brand advantages, equity, image • Generate more sales from existing target market, open additional channels & opportunities • Promotional cost reduces, complementary effect • Disadvantages- brand class, brand eclipse, negative repercussions of unsatisfactory performance, risk of overexposure, lack of focus Ingredient branding- Creating equity for materials, components, parts contained within other brands- Intel inside, Dolby system, Teflon coating, www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar Branding decisions (For Compamy) Branded product Identification, awareness, differentiation Promotional spend Customer loyalty Premium or value pricing

Generic Product No differentiation, no standardisation Low production & marketing costs Price loyalty Economy or competitive pricing

Branded product Private label Captive in-store customers In-house promotional costs Pricing freedom Less scope outside Extension into other categories easy

Own brand Command shelf space Pull strategy Price inelasticity Less channel conflict Extension into other lines easy

Single market Single brand Focus on one brand Less promotional costs, no duplication Easier for customers & channel partners

Multiple brand Segmentation is critical Multiple promotion Options for customers

Multiple market Global Focus, reduced promotional costs No brand confusion Harmonisation of identity Ideal for culture free brands

Local Vernacular issues Brand building critical Adaptation critical Allowance of quality variation

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Brand Management MBA Notes Dr Amit Rangnekar Brand decision making (For customer) Buying a Shirt upto Rs 1000 Brands Unknown Manzoni, Pedroni, Zegna,

Known Louis Phillipe, Van Heusen, Arrow, Color Plus, Peter England, Dockers, Charagh Din, Oxemberg, Indian Terrain, Zodiac, Austin Reed, Allen Solly, JohnPlayer, Armani, M&S, Wills LS, Park Avenue,

Acceptable Louis Phillipe, Van Heusen, Arrow, Allen Solly, Austin Reed, JohnPlayer,

Purchased Van Heusen

Unacceptable Cambridge, Peter England, Oxemberg

Indifferent Allen Solly, Dockers, Charagh Din, Indian Terrain

Overlooked Armani, M&S Wills LS, Zodiac, Color Plus, Arrow

Not Purchased Louis Phillipe, Allen Solly, Austin Reed, JohnPlayer,

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Brand Management MBA Notes Dr Amit Rangnekar

Brand Positioning Marketing excellence requires firm to implement holistic marketing practices. The 3 models presents ways to execute & measure firm’s progress in brand marketing efforts & guide managerial efforts: Brand Positioning: How to guide integrated marketing to maximize competitive advantages. Brand Resonance: Describes how to create intense, actively loyal relationships with customers. Brand Value Chain: Describes how to trace the value creation process to better understand financial impact of marketing expenditures & investments. Brand Positioning- The act of designing a firm’s offering and image to occupy a distinct place in the mind of the target market. • • • • • • • • • • •

Difficult to succeed if products resemble competitive products Pursue relevant positioning & differentiation Represent a distinctive big idea in the mind of the target market Identify different needs & groups in the market (segments) Target groups/markets it can satisfy in a superior way (targeting) Locate brand in the minds of consumers (positioning) Communicate offering (promotion) to the target market Target market recognises firm’s distinctive offering (differentiation) Good brand positioning clarifies brand’s essence & how a brand satisfies consumer needs in a unique way—customer-focused value proposition Draw positioning from target market, category, competition & differentiation Brand congruence- Intended positioning (identity) should be congruent (match) with what exists in the ‘consumer’s mind’ (image)

Positioning requires determining a frame of reference by • Identifying the target market • The nature of competition • The points-of-parity (pop) brand associations • The points-of-difference (pod) brand associations • Understanding consumer behavior and their considerations in chosing brands The competitive frame of reference defines associations that consumers use to evaluate points of parity and points of difference. The frame of reference often includes other brands in the same category, but could also include brands in other related categories. • • • •

Relevance- customer connect Diffferentiation- value addition Credibility- deliver on promises & perceptions Stretch- extensions, NPD

Points-of-Difference (PODs) & Points-of-Parity (POPs) Points of parity are shared values between target brand & its competitors. These values are common denominators that define the category. PoP can be leveraged to negate competitors’ PoD. PoPs associations are not necessarily unique to the brand but may in fact be shared with other brands. POP www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar associations come in two basic forms. Category POP are associations’ consumers view as essential to be a legitimate & credible offering within a certain product or service category. They represent necessary conditions but not necessarily sufficient for brand choice. Category POP may change over time due to technological, legal, or consumer trends. Competitive POP are associations designed to negate competitors’ POP. If a brand can “breakeven” where competitors are trying to find an advantage and can achieve advantages in other areas, the brand should be in a strong competitive position. PODs are attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find the same extent with a competitive brand. Creating strong, favorable, and unique associations as PODs is a real challenge, but essential in terms of competitive brand positioning. Choosing POPs and PODs POP driven by needs of category membership (to create category POPs) & the necessity of negating competitors’ PODs (to create competitive POPs). Key to choosing POD is that consumers find POD desirable and firm is capable of delivering on the POD. 3 consumer desirability criteria for POD- Relevance, Distinctiveness & Believability • 3 deliverability criteria are Feasibility, Communicability & Sustainability • Marketers should decide level(s) to anchor the brand’s points-of-differences. • Lowest - brand attributes, Middle- brand’s benefits, Top- brand’s values • If consumers infer proper benefit, brands can be differentiated on irrelevant attributes. POP v/s POD • To achieve POP on a particular attribute or benefit, consumers must believe brand is “good enough” on that dimension • Brand may not be perceived as equal to competitors, but consumers must feel brand does well enough on a particular attribute or benefit. • With POD brand must demonstrate clear superiority • Often, key to positioning is not achieving a pod but in achieving pop. Establishing Category Membership • Positioning preferred when consumers informed of brand’s membership before stating its POD • New products should clearly convey category membership, as brands are also affiliated with categories in which they do not hold membership. • 3 ways to convey a brand’s category membership: Announcing category benefits, comparing to exemplars, and relying on the product descriptor. Creating POPs and PODs Strong competitive positioning may be affected if attributes/benefits making up the PoP & PoD are negatively correlated. Consumers may rate a brand high on 1 attribute or benefit, but rate it poorly on another important attribute. Consumers want to maximize both attributes & benefits, so develop a product that performs well on both dimensions.

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Brand Management MBA Notes Dr Amit Rangnekar The mental map shows Nike’s range of associations, where few are brand specific many are category specific. • • • •

Nike- PoD are MJ, Air & Basketball Adidas- PoD is Top athletes Reebok- PoD is Tennis All the other associations are category PoPs

Exercise- How Should Maruti position itself with respect to the Tata Nano? Exercise- POPs & PODs for Apple i-Phone, Rs 5000 mobile phone Negatively correlated attributes and benefits: Low Price v High Quality

Powerful v Safe

Nutritious v Good Taste

Ubiquitous v Exclusive

Taste v Low Calories

Strong v Refined

Efficacious v Mild

Varied v Simple

A firm may use dual strategies to communicate negatively correlated attributes & benefits. Although expensive to use dual marketing strategies, for product / service with negatively correlated attributes, such strategies may appeal to both sets of product consumers. Marketer may also anchor PODs & POPs, with other brands / associations that emulate desired characteristics or communicate the desired emotional appeals. • • • • • • •

Functionality & price: products/services with features but low price- PC, appliances Easy & completeness: easy to use products containing everything a consumer wants in the products- computers, home entertainment products. Fun to drive and good mileage: for cars, t an ongoing challenge along with safe and good gas mileage and “large” and good gas mileage. Safe and scary: amusement rides, movies, television shows, books. Choices and convenience: variety but sized for convenience (has the right mix of products but is not too big—convenience stores. Close but not too close: shopping center location & mega-stores not close enough Simple to use yet not complicated-computer and game programs.

Product Differentiation Add a set of valuable & meaningful differences to distinguish your offering from that of the competition. Differentiate to avoid commodity trap, on the basis of different product/service dimensions. High www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar quality, high price may signal premium. Quality enhanced by packaging, distribution, advertising, promotion & manufacturer’s reputation. Competitive advantage through differentiation, across 5 dimensions: • Product (form, features, performance quality, conformance quality, durability, reliability, reparability, style, design) • Services (order ease, delivery, installations, customer training, customer consulting, maintenance and repair, miscellaneous services) • Personnel - better-trained people, 6 characteristics: Competence, Courtesy, Credibility, Reliability, Responsiveness & Communication. • Channel - coverage, expertise, and performance. • Image - As buyers respond differently to company & brand images, identity & image need to be distinguished. Identity is how a company aims to identify or position itself/product. Image is how the public perceives a company or its products. Image (symbols, media, atmosphere, and events). An effective identity • Establishes product’s character & value proposition. • Conveys the character in a distinctive way. • Delivers emotional power beyond a mental image. • To be conveyed through every available communication vehicle & brand contact. • Can even be a seller’s physical space, also a powerful image generator. Exercise- i-phone • Key success factor? Brand positioning, innovation, brand image • Where is iphone vulnerable? Economical competitors, imitators, higher technology. • What should it watch out for? Changing preferences, value, new trends • Key improvement areas? Price, promotion, features, customer service • Positioning? Pop, Pod, image

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Brand Management MBA Notes Dr Amit Rangnekar Brand Resonance

Brand resonance is characterized by strong connections between consumer & brand. Brands with strong resonance benefit from increased customer loyalty and decreased vulnerability to competitive marketing actions. The challenge for a brand is to ensure that a customer has right experiences to create right brand knowledge. Building resonance involves a series of steps. Stages of development • • • •

Identity- 1st stage, consumers begin to understand what a brand is Meaning- Consumers begin to understand PoD & PoP- performance & reliability Response- Consumers judge the brand with their heads and hearts on factors like credibility, expertise, and trustworthiness. Relationships- How do we connect

Building blocks Salience- how easily / often consumer recognizes & recalls a brand, especially during purchase and consumption. Gives depth & breadth of brand awareness & recall Performance- What a brand does to meet customers' more functional needs. Refers to intrinsic brand properties in terms of inherent product benefits. Imagery- Think abstractly about brand, than about what it actually physically does. More extrinsic properties of the brand. Judgments- Customer’s overall brand evaluations, how they combine performance & imagery associations to form different kinds of brand opinions Feelings- Customers emotional responses/ reactions to a brand, can be mild / intense; +/-, or experiential / enduring in nature. Experiential (warmth, fun and excitement)- immediate & short-lived than enduring, and, Enduring (sense of security, social approval, and self-respect), are private and potentially part of day-to-day life. www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar Resonance• • • • • •

Intense, active loyalty- where customers feel a connection or sense of community with the brand and they would miss it if it went away Extent to which customers feel they are “in sync” with a brand Intensity or depth of the psychological bond that customers have with a brand Level of activity engendered by this loyalty Repeat purchase rates Extent to which customers seek brand information, events, other loyal customers.

Brand Value Chain Helps assess financial return of developing the brand through 4 stages. Some relationships have not yet been directly measured, but are important to consider when valuing a brand. • • • • • • • • •

• • • •

The first line shows 4 stages of the brand value chain The second shows multipliers, or filters, between these stages Multipliers are factors that influence impact of one stage on the subsequent stage. Brands must invest in the marketing program in such areas as the product, employees, or advertising. All these factors affect future brand value. Program quality factors- distinctiveness of ads or consistency of service determine how much the first stage influences the second stage- customer mindset, which includes 5 A’s: awareness, associations, attitudes, attachment & activity. Dimensions are hierarchical in nature- So awareness supports consumers’ ability to make brand associations, which drive attitudes, which lead to attachment & ultimately activity. Translation of the 5 A’s to brand value depends on multipliers related to market conditions like competitive reactions and support from channels or intermediaries. Market performance, where brand performance is measured in the marketplace Price premiums and price elasticity demonstrate brand’s ability to charge a premium, market share demonstrates brand’s ability to drive sales, expansion success is the brand’s opportunity to increase revenue streams & cost savings are possible if consumer knowledge is strong enough to decrease marketing expenditure while maintaining same effectiveness Finally, the first 5 factors determine a brand’s ability to have profitable sales Such factors lead to shareholder value, after investor sentiment is factored into the calculation. Market forces like growth potential & risk profile can affect the evaluation. The final stage of the brand value chain is shareholder value. Measurements in include stock price, price/earnings ratios & market capitalization Taken together, these stages allow managers to evaluate their brand value & suggest where improvements can be made.

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Brand Management MBA Notes Dr Amit Rangnekar

Sustaining brands What sustains

What erodes

Competitive advantage in its product Consumer needs and wants met by brands, change, differentiation dimensions (product, services, evolve, or die, leading to loss of brand pod or lack of personnel, channel & symbols) sustains a brand pop with other brands Continuously monitoring environmental Complacency, change in technology, lack of new changes, customer preferences, strategies, and products, not responding to competitive and technology, equip brand with pod/pop environmental threats and strategies, can spell doom Positions that firms successfully have claimed in India • • • • • • • • • • •

• • • • • • • • • • •

Beauty- Lux Premium-Bose, Benz Thanda- Coke World scale- Reliance Generic-Cadbury/ Xerox/ Amul Butter Delivery-Domino’s/ Blue Dart Service- Private Banks, Maruti Fast food- Udipi, VadaPav, Sandwich Range- Vijay Sales, Alfa, Nokia Youth- Pepsi, Swatch Fever- Crocin

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Innovation- Sony, Casio Macho- Enfield Bullet Performance- Nokia, Bata, Titan Friendly salesmen-Eureka Forbes Reach-HLL, Glaxo,Colgate Kids-McDonalds, Esselworld, J&J Indian MNC-Ranbaxy, Infosys, Wipro Economy- Big Bazaar Value-Dollar Shops, Factory outlets Tourism-Goa, Kerala, Rajasthan Headache-Saridon/Anacin

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Brand Management MBA Notes Dr Amit Rangnekar

Brand Identity Brand Essence- A brand’s fundamental nature or quality. The one constant across product categories and throughout the world. • Adidas: Athletic Performance • Tata: Trust • Volvo: Safety • Disney: Fun • J&J: Baby care Brand Promise- What a brand can and must do for customers To successful position, brand must promise differentiated benefits, relevant & compelling to the consumer. Benefits are functional, experiential, emotional & self-expressive. Brand promises require compelling proof points (‘reasons to believe’) in support of the brand’s promise. A promise must: • Address important consumer needs • Leverage organization’s strengths • Give competitive advantage through differentiation • Inspire, energize & mobilize people • Drive every organizational decision, system, action, and process • Manifest itself in your organization’s products and services The brand promise- Kristin Zhivago • Brand promise- which promises customers want companies to make and keep • Which promise would give you the best competitive advantage • Keep that promise in every marketing activity, action, decision & interaction • Promote promise internally & externally, everyone within should internalize and commit- politics and personal turf issues start to disappear. • Visually, brand promise drives or is in congruence with, each of the 5 star points Brand Personality- Consumers perceive a brand’s personality in terms of human traits. Fun (Disney), macho (Enfield Bullet), reliable (Nokia), safe, sincere, sophisticated, cheerful, old fashioned, progressive & consistent Brand Identity- Combination of visual, auditory & other sensory components that create recognition, represent the brand promise, provide differentiation, create communications synergy, and are proprietary. • Brand identity may also include essence, personality, promise & positioning • Brand’s marks or outward visual expression, including its name & visual appearance, developed from the positioning & values www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar • The brand’s identity is its fundamental means of consumer recognition & symbolizes the brand’s differentiation from competitors. Components of a brand’s identity are: • Names, logotypes, symbols & graphic devices- Mercedes tristar, Nike swoosh • Distinctive shapes and colors- Colgate red, • Brand voice and visual style, sounds, jingles and other mnemonic devices • Typography, theme lines or slogans- Nike Just do it • Characters uniquely associated with a brand- Coke- Slanting flourish • Textures, scents, flavors, and other sensory elements (Identity details also in Aaker’s model in Brand Equity section) Kapferer’s Brand Identity Prism (1997)

Kapferer’s Prism factors Sender Physique (central purpose, Personality (soul of the brand) foundation, what brand does) Receiv Reflection- how an individual in the Consumer mentalisation- Self-image, how an er targeted group identifies himself as a individual in the targeted group identifies brand person wrt brand wrt self, internal reflection Relationship (externalizing the brand from the company outwards) Culture-an aid to internalise brand in the organization & in the customer’s conscience. The strongest dimension, represents the difference between brands

Case- Brand identity of Adidas & Nike

Personality

Nike focus on individual athletes Sports & fitness Sponsorship, ethics Aggressive, provocative, inyour- face Michael Jordan, Tiger Woods

Culture Self-Image

American, Just Do It Cool, trendy

Promo strategy External Physique Relationship Reflection Internal

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Adidas Sponsors teams & global events Sports & fitness Quality & heritage Sportsmanship, team player, strong work ethic Traditional, conservative, collective European, traditional Competitor, competent amitrangnekar@gmail.com

Brand Management MBA Notes Dr Amit Rangnekar

Adidas

Nike

Re lationshi p: Sponsorship, ethi cs

Culture: American, Just do It!

Reflection: Aggressive, provocative, in-your-face

Se lf-Image: Cool, I am an ”Athlete ”

Internalization

Personal ity: Like Jordan, Woods…

Externalization

Physique: Sports and fitness

Personal ity: Tradi tional , conservati ve, collective

Re lationshi p: Quali ty and heritage

Culture: European, Traditional

Reflection: true sportsmanship, A good team player, strong work ethic

Se lf-Image: Rel ates more to competing t han t o winning

Internalization

Picture of Sender

Picture of Recipient

On analysis with the Kapferer prism, key difference between the two companies is at the cultural and the self-image level. • Adidas stands for European culture, traditional, conservative, collective & competent. • Nike symbolises American way: individual & aggressive- Michael Jordan, McEnroe • Adidas connected to positive emotions, more to competing than to winning • Adidas- challenging oneself is exciting; winning is reward, not reason for playing well • Adidas personality reflects true sportsmanship, good team player & strong work ethic. • Nike has a cool attitude, You don’t win silver, you lose gold, winning is paramount A comparative analysis trough the equity model. Brand equity- brand assets linked to a brand’s name & symbol that add to a product or service. This asset can be created and analysed trough the four dimensions, brand awareness, perceived quality, brand associations, and brand loyalty.

Brand Equity Brand Awareness • •

• •

Perceived Quality

Brand Associations

Brand Loyalty

Brand awareness- the base that affects consumer perception and even taste. People like the familiar and ascribe good attitudes to familiar items Perceived quality is a special type of association, partly because it influences brand associations in many contexts and partly because it has been empirically shown to affect profitability as measured by ROI (Return On Investment) and stock return. Perceive quality, is basically how the customer perceive the brands quality status. Brand associations can be anything that connects the customer to the brand. It can include user imaginary, product attribute, use situations, organizational associations, brand associations, and symbols. Brand loyalty is at the hart of any brand’s value. The concept is to strengthen the size and intensity of each loyalty segment.

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Brand Management MBA Notes Dr Amit Rangnekar Nike Ext

Int

• • • • • • • • • • • • • • • • •

Adidas

Physique

Sports & fitness

Relationship

Sponsorship, ethics

Quality & heritage

Reflection

Aggressive, provocative, in-your- face

Sportsmanship, team player, strong work ethic

Personality

Michael Jordan, Tiger Woods

Traditional, conservative, collective

Culture

American, Just Do It

European, traditional

Self-Image

Cool, trendy

Competitor, competent

Adidas- European culture, traditional, conservative, collective & competent. Adidas- Positive, more keen on competing than winning Adidas -Challenging oneself is exciting; winning is reward, not reason for playing well Adidas -Personality reflects true sportsmanship, good team player & strong work ethic. Nike- Symbolises American way: individual & aggressive- Michael Jordan, McEnroe Nike- Cool attitude You don’t win silver, you lose gold, winning is paramount Nike - endorsement focus, dominant media presence, Flagship stores, NikeTown and subbranding Adidas- endorsement focus, advertising, global event sponsorships, team & sports associations, subbrands. Endorsement strategy common in brand-building Adidas- teams, Nike- Individuals Both used similar theoretical systems to build brands Benchmarking techniques emanate from each others successes Nike launched Alpha line based on Adidas’ Equipment subbrand success Adidas aped celebrity endorsement strategies of Nike Similar strategies in advertising but applied across core of individual (nike) v team & events (adidas) Nike also getting into soccer (Brazil) & cricket (India)

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Brand Management MBA Notes Dr Amit Rangnekar

Brand Portfolio Brand portfolio is the mix of brands and subbrands owned by an organization. HUL portfolio comprises various brands in segments like: • Home & Personal care (Lux, Lifebuoy, Liril, Hamam, Dove, Pears, Rexona) • Laundry -Surf Excel, Rin, Wheel • Skin care- Fair & lovely, Ponds • Hair care- Sunsilk Natural, Clinic • Oral care- Pepsodent, Close Up • Deodorants-Axe, Rexona • Colour cosmetics- Lakme • Beverages & Foods- BB, Lipton, Bru, Kissan, Knorr, Anna-purna Kwality Walls Brand Architecture (or Brand Structure)- Brand’s family tree or its hierarchy How an organization organises the various named entities within its portfolio, and how they relate to each other. Ideally, brand architecture has 2 levels- brand and subbrands, which may take many forms, based upon the type of name used for the subbrands. Brand architecture types: Corporate brand- The brand bearing the company name. It is always the highest in a brand hierarchy. Sony, Tata, Reliance, HP Master brand- The dominant, highest level brand in a brand hierarchy. Typically, also the only brand in the system. Historically, many corporate brands were master brands, few master brands left. Parent Brand- The brand extended into more than one product category. It may or may not be the same as the corporate brand. Cadbury’s, Godrej, Videocon Advantages: Less expensive new product launch, trust/assurance, marketing economies Brand/subbrand- A new brand combined with a parent or corporate brand in the brand identity system. The subbrand can make the parent brand more vital and relevant to a new consumer segment or within a new product category. Ford Ikon- Flair, Hyundai GetzPrime, Gillette Sensor Excel Endorsed brand- Brand endorsed by the parent or corporate brand where parent brand is also identified with the product, but, endorsed brand is given greater visual weight than parent brand. The corporate/parent brand lends credibility or assurance to endorsed brand without overpowering it with its own associations. Cadbury’s Dairy Milk / Five Star. Separate (stand-alone or independent) brands- The brand name is built and becomes known, the company name may not be mentioned in the communication- Nivea, Crocin. Trade Dress- Trade dress refers to aesthetic elements that provide legal protection for a brand’s identity. For example, Coca-Cola’s bottle shape, Colgate Red & White Design, Harley-Davidson’s engine sound.

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Brand Management MBA Notes Dr Amit Rangnekar Brand Extension Applying the existing brand to new products, services, or consumer segments. If the existing brand is combined with a new brand, the new brand is called a subbrand. If executed properly, brand extensions can broaden and clarify the meaning of the brand. If executed improperly, they can dilute or confuse the meaning of the brand. Kingfisher (Beer to Airlines) and Amul & Maggi (Milk products & Foods). Devising the Branding Strategy Branding strategy reflects the number & nature of common and distinctive brand elements applied to different products sold by the firm. •

When a firm introduces a new product, it has three main choices: 1) Develop new brand elements for new product 2) Apply some of its existing brand elements 3) Use a combination of new and existing brand elements

•

Brand extension- use an established brand to introduce a new product-Gillete Sensor

•

Sub-brand- Brand extension where a new brand combines with an existing brandGillete Sensor Excel

•

Parent brand- Existing brand which gives birth to a brand extension- Gillette

•

Family brand- When the parent brand is already associated with multiple products through brand extensions. Cadbury

•

Brand extensions can be broadly classified into two general categories: 1) Line extension- when parent brand is used to brand a new product, targeting a new market segment within a product category currently served by parent brand – Maggi Noodle SKUs 2) Category extension- when parent brand is used to enter a different product category from that currently served by the parent brand- Kingfisher Airlines 3) Brand line- All products- original, line & category extensions, sold under a particular brand- Godrej, Videocon, Heinz 4) Brand mix (or brand assortment- set of all brand lines that a particular seller makes available to buyers – HUL- Close-up, Pepsodent 5) Branded variant- brand lines supplied to specific retailers / distribution channels- Pharma franchisee 6) Licensed product- where brand name is licensed to other manufacturers who actually make the product-Disney

Branding Decision: To Brand or Not to Brand? Branding is such as strong force that hardly anything goes unbranded. • Commodity- Basic product, difficult to physically differentiate in minds of consumers www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar • Branding strategies: Individual names, Blanket family names, Separate family names for all products, Corporate name combined with individual product names • 2 key components of any branding strategy are brand extensions and brand portfolios Exercise- Line Extensions Good or Bad? Line Extensions advantages Line Extensions disadvantages • Drive growth and add sales • Companies lose focus • Consumer familiarity with parent • Consumers become confused brand • Proliferation causes parent brand to • Strong parent brand identity helps lose its identity consumers narrow down choice • Erodes brand equity for parent brand • Extensions gain retailer • Brand extension failure may impact acceptance parent brand • Maximize economies of scale in • May cannibalise parent brand marketing mix • Opportunity loss of building new • Can cater to new markets/users brand • Reduces cost & period of new brand development Brand Extensions Advantages Leverage assets Facilitate new product acceptance & availability Improve success odds, reduce new launch risk Optimise promotional & packaging costs Brand name / trademark issues avoided Help improve perception of the firm Renew brand interest, basis for subsequent extensions Expand market / segment coverage

Disadvantages Line extensions dilute brand strength Line extensions weaken brand associations Too many line extensions lead to confusion Inappropriate extensions may question integrity & competence of the brand. Extension failure may harm patient Cannibalisation of parent brand / extension Extension does not have own unique image and equity Lack of ‘fit’ in the consumer’s mind

Brand Portfolio- Set of all brands/lines a firm offers to buyers in a particular category. • Multiple brands increase shelf presence, attract variety seeking consumers, help new market entry & yield economies of scale in advertising, sales & distribution • Portfolio maximises brand equity & market coverage, minimises brand overlap • Clear differentiation can appeal to a sizeable marketing segment & justify its marketing and production costs • Portfolio monitoring & pruning of weak brands and unprofitable brands is critical.

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Brand Management MBA Notes Dr Amit Rangnekar Brands play a number of specific roles as part of a brand portfolio: Flankers- Flanker (“fighter”) brands are positioned wrt competitors’ brands so that more important (and profitable) flagship brands can retain their desired positioning. Fighter brands must neither be so attractive as to cannibalise own brands nor be cheaply designed that they reflect poorly on the other brands in the portfolio. Cash Cows- Brands may be retained as they still manage to hold on to a sufficient number of customers & maintain their profitability with virtually no marketing support. Low-End Entry-Level- The role of a relatively low-price brand in the brand portfolio often may be as a means of attracting customers to the brand franchise. High-End Prestige- Role of a relatively high-priced brand in the brand family often is to add prestige and credibility to the entire portfolio.

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Brand Management MBA Notes Dr Amit Rangnekar

Brand Equity Attributes of Strong Brands Excels at delivering desired benefits Stays relevant Priced to meet perceptions of value Positioned properly Communicates consistent brand messages Well-designed brand hierarchy Uses multiple marketing activities Understands consumer-brand relationship Supported by organization Monitors sources of brand equity The Role of Brands Identify the maker Simplify product handling Organize accounting Offer legal protection Signify quality Create barriers to entry Serve as a competitive advantage Secure price premium Marketing Advantages of Strong Brands Improved perceptions of product performance Greater loyalty Less vulnerable to competition 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 • Brand Associations- Strong, Unique, Favorable • Brand Promise- Marketer’s vision of what the brand must be and do for Consumers. • Brand Elements- Brand names, Slogans, Characters, URLs, Logos, Symbols • Brand Element Choice Criteria- Memorable, Meaningful, Likeability, Transferable, Adaptable, Protectable Brand Equity- added value endowed to products and services, the marketing effects uniquely attributable to a brand. The differential effect that brand knowledge has on consumer response to the marketing of that brand.

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Brand Management MBA Notes Dr Amit Rangnekar Building brand equity depends on • The different components of a brand—brand names, logos, symbols, package designs, etc.—are brand elements. • The initial choices for the brand elements or identities making up the brand • The way the brand is integrated into the supporting marketing programs • The associations indirectly transferred to the brand by linking the brand to some other entity (company, country of origin, another brand) Measured by • Brand audits- in-depth examination of brand health & to set strategic direction • Tracking studies- information from consumers to provide valuable tactical insights into short-term effectiveness of marketing programs and activities. • Strategic brand management involves the design and implementation of marketing activities and programs to build, measure, and manage brands to maximize their value. Building Brand Equity • The marketer’s challenge in building a strong brand is to ensure customers have the right type of experiences with products and services and their marketing programs create the desired brand knowledge structures for the brand. • Customer knowledge drive the differences that manifest themselves in brand equity. • Value may be reflected in how consumers, think, feel, and act wrt the brand as well as the prices, market share, and profitability that the brand commands for the firm • An important intangible asset to the firm, with a psychological and financial value • Marketers and researchers use various perspectives to study brand equity • Customer-based brand equity is the differential effect that brand knowledge has on consumer response to the marketing of that brand • +ve customer-based brand equity- when consumers react more favorably to a product & the way it is marketed when the brand is identified, as compared to when it is not. • -ve customer-based equity- when consumers react less favorably to marketing activity for the brand under the same circumstances. The strategic brand management process involves four main steps: • Identifying and establishing brand positioning. • Planning and implementing brand marketing. • Measuring and interpreting brand performance. • Growing and sustaining brand value. Brand Equity as a Bridge The marketing spend is an investment in consumer brand knowledge, quality is critical. Understanding consumer brand knowledge is the foundation of brand equity. Brand equity drivers- creating right brand knowledge structures with the right consumers, 3 key drivers: • The initial choice for the brand elements or identities making up the brand www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar • Product, service, accompanying marketing activities & supporting marketing programs • Other associations indirectly transferred to the brand by linking it to some other entity. Choosing Brand Elements Brand elements are the devices that serve to identify and differentiate the brand. • Brand elements can be chosen to build as much brand equity as possible. • The test of the brand-building ability of these elements is what consumers would think or feel about the product if they only knew about the brand element. Brand Element Choice Criteria • Memorable, meaningful and likeable can be characterized as “brand building” in terms of how brand equity can be built through the judicious choice of a brand element. • Transferable, adaptable and protectable are more “defensive” and concerned with how the brand equity contained in a brand element can be leveraged & preserved in the face of different opportunities and constraints. Developing Brand Elements • In brand creation, marketers have choices of brand elements to identify their products • Companies use marketing research firms to develop and test names. • Name-research procedures include: Association, Learning, Memory & Preference tests. • Play many brand-building roles• Easily recognized, recalled, inherently descriptive, and persuasive • Memorable or meaningful brand elements reduce burden on marketing communications to build awareness and link brand associations • Associations arising from likeability & appeal of brand elements enhance brand equity • Slogans- extremely efficient to build brand equity & help consumers grasp what the brand is and what makes it special Designing Holistic Marketing Activities • Brands are not built by advertising. • Customers come to know a brand through a range of contacts and touch points: Personal observations, personal use, word of mouth, interactions with company personnel, on-line or telephone experiences and payment transactions. • Brand contact- any (+/-) information-bearing experience a customer / prospect has with a brand, product category, or market relating to the marketer’s product or service. Personalization- Making sure that the brand and its marketing is as relevant as possible to as many customers as possible. The Internet creates opportunities to personalize Integration- Integrating marketing is about mixing and matching marketing activities to maximize their individual and collective effects, especially marketing communications Brand awareness- the consumers’ ability to identify the brand under different conditions, as reflected by their brand recognition or recall performance and whether it creates, maintains, or strengthens brand image. Brand image- perceptions and beliefs held by consumers, reflected in the associations held in consumer memory. www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar Internalization- Marketers must adopt an internal perspective to appreciate and understand basic branding notions, and how they can help—or hurt brand equity. Key influence on brand perception is customers experience with company personnel. • Internal branding- activities and processes that help to inform and inspire employees. • Brand bonding- when customers experience the company as delivering on its brand promise. To deliver the brand promise, every employee should live the brand. • Holistic marketers should train & encourage distributors / dealers to serve customers Leveraging Secondary Associations The third way to build equity is to “borrow it”. Brand associations may be linked to other entities that have their own associations, creating “secondary” brand associations like: • The company—through branding strategies. • Countries or other geographical regions—identification of product origin • Channels of distribution—channel strategy. • Other brands—ingredient or co-branding. • Characters—licensing. • Spokespeople—endorsements. • Sporting or cultural events—sponsorships. • Other third party sources—awards or reviews. • Measuring Brand Equity- Two complementary approaches employed by marketers • Indirect approach- assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures. • Direct approach- assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing. Brand Audits- a consumer-focused exercise involving procedures that assess brand health, uncover sources of brand equity & suggest ways to improve & leverage its equity. • Used to set the strategic direction for the brand • Regular audits allow marketers to manage brands more proactively and responsively. • Profound implications for the strategic direction and brands’ resulting performance. • Requires understanding sources of brand equity from the firm and the consumer perspective • Brand audits consist of two steps Brand Inventory- To provide a current, comprehensive profile of how all the products and services sold by a company are marketed and branded. • Profile each product/service, identify all associated brand elements & supporting marketing program • Profile competitive brands in terms of their branding and marketing efforts. • Suggest what consumers’ current perceptions may be based on. • Assess consistency of all the different products or services sharing a brand name. Brand Exploratory- To understand what consumers think and feel about the brand and its corresponding product category to identify sources of brand equity. www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar • Prior research studies and qualitative research techniques like word associations, projective techniques, visualization, brand personifications, and laddering. • Gain understanding of the beliefs of company personnel about consumer perceptions. Brand Tracking - collect information from consumers on a routine basis over time. • Quantitative measures to understand how brands & marketing programs are performing on key dimensions • Understand where, how much, and in what ways brand value is being created Brand Valuation- estimating the total financial value of a brand. Brand value may be typically over one-half of the total company market capitalization for leading brands. Brand

Rank 2002 1 2

Value 2002($ bn) 70 64

Rank 2007 1 2

Value 2007 ($ bn) 65 59

Grw

Industry

Beverages Computers

IBM

Computers

Diversified

Intel

Computers

Nokia

Mobiles

Disney

Media

McDonalds

Restaurants

Marlboro

Tobacco

Mercedes

Automotive

Toyota

Automotive

Coca-Cola Microsoft

Managing Brand Equity- requires a long-term view of marketing decisions. Brand Reinforcement- Manage company’s strategic asset to ensure value does not depreciate. A) Brand equity is reinforced by marketing actions that consistently convey the meaning of the brand to consumers in terms of: • What products the brand represents? • What core benefits it supplies? • What needs it satisfies? • How the brand makes those products superior? • Which strong, favorable & unique brand associations should exist in consumers mind? • Reinforcing brand equity requires innovation & relevance through marketing program. B) Marketers must introduce new products and conduct new marketing activities that truly satisfy their target market. C) An important consideration in reinforcing brands is the consistency of the marketing support the brand receives, in terms of both amount and kind.

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Brand Management MBA Notes Dr Amit Rangnekar D) In managing brand equity, it is important to recognize the trade-offs between those marketing activities that fortify the brand and reinforce its meaning and those that attempt to leverage or borrow from existing brand equity to reap some financial benefit. Brand Revitalization Changes in consumer tastes & preferences, emergence of new competitors/ technology, or regulatory or environmental developments may potentially affect fortunes of a brand. • To reverse a fading brand’s fortunes, restore lost brand equity sources or create new • Understanding, what the sources of brand equity were, is the first step to a revival • Expand depth &/or breadth of brand awareness by improving consumer recall & brand recognition during purchase / consumption settings. • Improve strength, favorability & uniqueness of brand associations to build brand image. Brand crisis- Longer response time in a crisis increases chances of consumers forming negative impressions but sincerity in tackling the crisis will be appreciated by customers Measuring Brand Equity- Brand audits, Brand tracking, Brand valuation Interbrand’s Brand Equity Formula Brand earnings • Brand sales • Costs of sales • Marketing costs • Overhead expenses • Remuneration of capital charge • Taxation

Brand strength • Leadership (25%) • Stability (15 %) • Market (10 %) • Geographic spread (25 %) • Trend (10 %) • Support (10 %) • Protection (5 %)

Brand Equity Models 1) Brand Asset Valuator- BAV (Young & Rubicam Ad agency) measures value of a brand along 4 dimensions • "Differentiation" - the brand's point of difference, relates to margins • "Relevance" how appropriate the brand is to you, market penetration • "Esteem" how well regarded the brand is, perception • "Knowledge" an intimate understanding of the brand, consumer experience • Differentiation + relevance= brand strength, describes the brand's growth potential • Esteem + knowledge= brand structure, describes the brand's current power • Brand strength+ brand structure= Powergrid, depicts brand development cycle stages Relationship among 4 pillars yields compelling information about brand's capacity to carry a premium price & fend off competition- the key to brand health. BAV can be used to gain a range of knowledge about a brand: • Identify key perception drivers, potential target groups, problem areas and barriers

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Brand Management MBA Notes Dr Amit Rangnekar • • • •

Analyze own image/attribute/brand personality & competitive strengths & weaknesses Track brand movement over time on critical dimensions Investigate a corporate name as a potential parent/umbrella brand Determine marketing needs and possible common communications/programs

Typical patterns of brand development

2) Aaker Model (Professor David Aaker) Brand equity is a set of 5 categories of brand assets & liabilities linked to a brand that add to or subtract from the value provided by a product / service to a firm and/or to that firm’s customers. The categories of brand assets are: • Brand loyalty • Brand awareness • Perceived quality • Brand associations • Other proprietary assets such as patents, trademarks, and channel relationships www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar

Brand identity- unique set of brand associations that represent what a brand stands for and promises to customers. Consists of 12 dimensions organized around 4 perspectives: • Brand-as-product (product scope, attributes, quality/value, use, users, country of origin) • Brand-as-organization (organizational attributes, local versus global) • Brand-as-person (brand personality, brand-customer relationships) • Brand-as-symbol (visual imagery/metaphors and brand heritage) Brand identity also includes • Core identity- the central, timeless essence of the brand • Extended identity- includes various brand identity elements, organized into cohesive and meaningful groups 3) Brandz model of brand strength (Marketing research consultants Brown and WPP) Brand building involves sequential steps, where each step is contingent upon successfully accomplishing previous step. Objectives at each step, in ascending order, are: • Presence, Relevance, Performance, Advantage • Bonding- bonded consumers, build stronger relationships with the brand, spend more of their category expenditures on the brand than those at lower levels of the pyramid. Brand value- the sum of all earnings that a brand is expected to generate. 3 steps: • Establish company's intangible earnings and allocate them to individual brands and countries of operation, based on financial data • Determine portion of intangible earnings attributable to brand alone (Brand Contribution), which reflects share of earnings from a product or service's most loyal consumers or users, as opposed to other factors such as price • Project brand value based on market valuations, brand risk profile, & growth potential. Brand Resonance The brand resonance model ( Also Under Brand Positioning Page )views brand building as an ascending, sequential series of steps, from bottom to top. • Enduring identification of the brand with customers and an association of the brand in customers’ minds with a specific product class or customer need. • Firmly establishing the totality of brand meaning in the minds of customers by strategically linking a host of tangible and intangible brand associations. • Eliciting proper customer responses in terms of brand-related judgment and feelings. Exercise- Slogans (Guess the company / brand) The Complete man Just do it The Joy of Flying God’s Own Country

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Brand Management MBA Notes Dr Amit Rangnekar

Product Life Cycle (PLC) Increasing competition, technology & changing economic conditions make firms reformulate positioning and differentiation strategies during a PLC. • • • •

Introduction & growth stage- Slow growth & low profits, but if successful, then high growth and increasing profits Maturity stage- Slow sales growth, stable profit, extend successful brands Decline stage- Identify weak brands and phase out or reformulate Markets evolve through 4 stages: emergence, growth, maturity & decline.

• Style- basic and distinctive mode of expression appearing in a field of human endeavor. • Fashion- currently accepted or popular style in a given field. Length of a fashion cycle is hard to predict but fashions pass through 4 stages- Distinctiveness, Emulation, Massfashion & Decline. • Fads- fashions that come quickly into public view, are adopted with great zeal, peak early & decline very fast. Fads do not satisfy a strong need, hence do not survive. Marketing Strategies: Introduction Stage and Pioneer Advantage • Profits negative/ low, high promotional expenditure, to inform potential consumers, induce product trial and ensure availability • Market pioneer- being first can be rewarding, but risky & expensive • Coming in later makes sense if with superior technology, quality, or brand strength. • Speeding up innovation time is essential in an age of shortening product life cycles. • Pioneer has strong brand name recall, establishes brand attributes that product class should possess, advantages of economies of scale, technological leadership, patents & ownership of scarce assets. • Pioneer weaknesses: crude new products, improper positioning, an idea before its time, high product-development costs, lack of resources, managerial incompetence or unhealthy complacency. • A pioneer could also be an inventor, or a product pioneer or a market pioneer. Marketing Strategies: Growth Stage • The growth stage marked by rapid sales climb, consumer base • New competitors enter, attracted by the opportunities • Prices may remain where they are or fall slightly. • Companies maintain / increase promotional expenditures, educate market, take on competition, profits increase, costs fall due to volumes Strategies to sustain rapid market growth • Improve product quality and add new product features and improved styling. • Add new models, flanker products, enter new market segments. • Increase distribution coverage and enter new distribution channels. • Shift from product-awareness advertising to product-preference advertising. • Lowers prices to attract the next layer of price-sensitive buyers. www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar • Trade-off between high market share and high current profits. By spending money on product improvement, promotion, and distribution, it can capture a dominant position. Marketing Strategies: Maturity Stage Growth declines, longer stage, marketing mature products is a key challenge. 3 phases: • Growth, where the sales growth rate starts to decline. • Stable, where sales flatten on a per capita basis because of market saturation. • Decaying maturity, where sales level starts to decline, customers begin to switch. • The sales slowdown creates industry overcapacity, intensifies competition • Industry consolidation, few dominate firms, many nichers, profits through volumes • Key issue- f become one of the “big 3” or pursue a niching strategy • Companies may abandon weaker products & concentrate on more profitable & new products. Market Modification Expand market for mature brand by working with 2 factors that drive sales volume = number of brand users x usage rate per user. • Expand the number of brands users by converting nonusers. • Expand the number of brand users by entering new market segments. • Convert competitors’ customers. • Convincing current users to increase brand use, users, usage Product Modification Modifying product characteristics through quality, feature or style improvement • Quality improvement aims at increasing the product’s functional performance. • New features that expand product’s performance, versatility, safety, or convenience. Build image as an innovator, win loyalty of market segments that value these features • Feature style improvement may only increase product’s aesthetic appeal. Marketing Program Modification Modifying other marketing program elements the 4 Ps and services. Marketing Strategies: Decline Stage Sales decline- due to technology advance, shifts in consumer tastes & competition Over capacity, increased price-cutting, and profit erosion. As sales and profits decline, firms may withdraw from the market or reduce number of products offered • Stop, increase or maintain investment. • Drop unprofitable customer groups, strengthen investment in lucrative niches. • Harvest firm’s investment to recover cash quickly. • Divest the business. • Appropriate strategy depends on industry’s relative attractiveness & company’s competitive strength in that industry • Companies successful in rejuvenating a mature product, often do so by adding value to the original product. www.dramitrangnekar.com

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Brand Management MBA Notes Dr Amit Rangnekar The Product Life-Cycle Concept: Critique The PLC concept helps interpret product and market dynamics, used for planning, control, and forecasting. PLC focuses only on a brand than the market, customers or competition., or new needs, , technology, channels, and other developments. Markets evolve through four stages: emergence, growth, maturity, and decline.

• Emergence- Before a market materializes, it may exist as a latent market. Marketers either follow a single-niche or multiple-niche or a mass-market strategy. • Growth- If new product sellsl, new firms enter, ushering in a market-growth stage. • Maturity- Eventually, competitors cover and serve all the major market segments and the market enters the maturity stage. As market growth slows down, the market splits into finer segments, and high market fragmentation occurs, often followed by market consolidation caused by the emergence of a new attribute with strong appeal. • Decline- Eventually, demand for present products begins to decrease, market enters decline stage. Total need level declines or new technologies replace the old.

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