STRATEGIC BRAND MANAGEMENT

BUILDING, MEASURING, AND MANAGING BRAND EQUITY by Kevin Lane Keller

What is a Brand?
American Marketing Associations definition
A brand is a name, term, sign, symbol, or design which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors

Brand is a perceptual entity (it resides in the mind) It is rooted in reality - product, service, person, etc. Brand creation is by the Firm that provides the impetus

What is a Product?
Brand versus Product

Product is anything that can be offered to a market for attention, acquisition, use or consumption that may satisfy a need or a want (goods, services, retail store, person, organization, ideas, etc.)
The 5 levels of a Product as defined by Philip Kotler
1. 2.

3. 4.

5.

Core benefit level fundamental need or want that is satisfied Generic product level basic version attributes necessary for functioning (stripped down level) Expected product level what customers normally expect Augmented product level additional attributes, benefits that distinguish it from competition Potential product level all transformation that it might undergo in the future

What is a Product?
Brand versus Product Product Hierarchy by Kotler 1. 2.

3.

4.

5.

6.

Need family core need that underlies the existence of the Product Family Product family all product classes that can satisfy the same need with reasonable effectiveness Product class / category - group of products within the family having a certain functional coherence Product line (different brands / family brand / individual brand- group of products within the class having a similar function, sold to same consumer groups, from same outlets, at similar prices Product type group of items within a product line that share 1 or several forms of the product Item (stock keeping unit) within the brand or product line distinguishable by size, price, appearance, attribute

What is a Brand?
A Brand is a Product with dimensions that differentiates it from other products, designed to satisfy the same need (competition)

Differences give the brand Equity and distinguishes it brand

from a commodity and Differences may be

Rational and tangible related to product performance (Sony, Gillette)

Or / and

Symbolic, emotional, intangible related to what the brand represents (Coca Cola, Lee)

Equity is the sum total of consumer perceptions and feelings about how a brand performs

The name and what it stands for The company associated with the brand

New Concept of Brand Equity (BE)

Brand Equity is defined differently by many but there is a point of consensus

BE relates to the Marketing Effects that are

uniquely attributable to the brand

Different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name

BE concept in marketing - stresses the importance of the brand in marketing strategies.

New Concept of Brand Equity

There is also agreement that Branding is about creating differences Differences in outcome arise from added value endowed on a product as a result of past marketing activities for the brand Value for a brand can be created in many ways Value can be exploited to benefit the firm in many different ways BE provides the common denominator for

interpreting marketing strategies and assessing the value of the brand

Why Brands Matters

Brand Value translates into financial profits Branding creates perceived differences Which develops a loyal consumer franchise Therefore future sales and profits can be expected to follow Therefore the brand (an intangible valued asset) needs to be handled carefully

Why Brands Matter

Brands matter because there is a

Brands take on a special meaning and change the experience and perception of a product that leads to greater satisfaction

Relationship between brand and consumer which creates a bond / pact of trust and loyalty

Consumers expect consistent product performance, appropriate price, distribution and other actions

Marketers can expect to be rewarded with loyalty

Customers with past experience learn more about the brand

Why Brands Matter

To Customers

Signal of quality Symbolic device for self expression It is a Promise, Bond, Pact, with maker of the product about consistency of the offering Risk reducer Search cost reducer Means of identification of source of product for assignment of responsibility to product maker

To Manufacturer

Means of identification for handling, tracing Signal of quality level to satisfied customers Competitive advantage Financial return Legal protection of unique features

Benefits to the Firm of Customer-Based Brand Equity

Branding is a powerful means of securing a competitive advantage

Brand experience can last for years and cannot be duplicated

Enjoy greater brand loyalty, usage, and affinity and therefore Predictability and security of demand

Command larger price premiums on a regular basis, also during A&Ms

Creates entry barriers for others Receive greater trade cooperation and support

Increase marketing communication effectiveness

Supports brand extensions Yields licensing opportunities

Anything Can Be Branded

Branding is possible for

B to B products High-tech products Products, Services Commodities atta, salt Online products and services Retailers and Distributors People and Organizations Sports Arts, Entertainment Geographic location Ideas and causes

The Key to Successful Branding

For branding strategies to be successful

Consumers must be convinced that there are meaningful differences among brands

Consumer must not think that all brands in the category are the same.

PERCEPTION = VALUE

The Key to Successful Branding

Consumer has to be taught about the brand so that they

Learn to Identify the brand label, name and other brand elements Learn the brand meaning - functional, emotional and symbolical value Know the brand difference from other similar product brands (the performance, the brand image and other non-product related considerations)

The Concept of CBBE and Marketing

Customer-based brand equity is the

Differential effect of brand Because of Customer brand knowledge Which generates a Differential in Customer Response to brand marketing

Determinants of Customer-Based Brand Equity

The determinants of CBBE are

Customer awareness and familiarity with the brand and

Strong, favorable, and unique brand associations in memory

Brand Equity and Marketing Management

BE concept stresses the importance of the Brand in Marketing Strategies

BE is defined in terms of Marketing Effects uniquely attributable to the brand Therefore marketing activities will have to be planned and evaluated based on customers brand knowledge

Building Customer-Based Brand Equity

CBBE is generated by Brand Knowledge Structures

Brand Knowledge Structures depends on

The initial choice of brand elements The supporting marketing program and the manner by which the brand is integrated into it Other associations indirectly transferred to the brand by linking the brand to some other entities

Customer-Based Brand Equity as a Bridge

CBBE is a Bridge because CBBE represents the added value endowed to a product as a result of past investments in the marketing of a brand This knowledge structure generates CBBE And provides direction and focus to future marketing activities

Strategic Brand Management

Strategic Brand Management is about building, measuring, managing BE

Through brand marketing programs and activities designed and implemented

The process involves four main steps:

1) Identify and establish brand positioning and values 2) Plan and implement brand marketing programs 3) Measure and interpret brand performance 4) Grow and sustain BE

Strategic Brand Management Process

STEPS
Identify and Establish Brand Positioning and Values

KEY CONCEPTS
Mental maps Competitive frame of reference Points-of-parity and points-of-difference Core brand values Brand mantra Mixing and matching of brand elements Integrating brand marketing activities Leveraging of secondary associations Brand Value Chain Brand audits Brand tracking Brand equity management system Brand-product matrix Brand portfolios and hierarchies Brand expansion strategies Brand reinforcement and revitalization

Plan and Implement Brand Marketing Programs

Measure and Interpret Brand Performance

Grow and Sustain Brand Equity

New Branding Challenges

Brand management is difficult today

Savvy consumers Increased competition Traditional marketing tools are not as effective, and the emergence of new marketing tools Complex brand and product portfolios Consumer need for simplification Consumer need for risk reduction

But brands are important as ever today

So marketers need to have an understanding of:

Customers and brands And the relationship between the two