Designing and Implementing Brand Strategies

Designing and Implementing Brand Strategies

defines brand boundaries and brand complexity defines the relationship between the brand and the products Two strategic tools help formulate branding strategy that
1. Brand architecture / strategies
(a) Brand-product matrix and (b) Breadth of branding strategy (c) Depth of branding strategy

2. Brand hierarchy

Brand Architecture / Brand Strategy

Objective of Brand strategy is to understand and organize Firms products in consumers mind Its role is to 1.

2.

Clarify Brand Awareness improve consumer understanding and communicate similarities and differences between individual products Motivate Brand Image to improve trial and repeat purchases by maximizing transfer of brand equity to / from the brand to individual products

Brand Architecture / Brand Strategy

Frequently adopted brand strategies are broadly 2 Branded house umbrella branding (corporate /family branding) House of brands collection of individual brands

Brand-Product Matrix
1 A Brands B C

Products 2 3

Must define the Brand-Product Relationships. . .

ROWS all Brands of the Firm, Brand-product relationship (brand lines) COLUMNS all Products of the Firm Product brand relationship (prortfolio strategy)

Designing and Implementing Brand Strategies

1. (a) Brand-product matrix graphical representation of all products sold by the firm Brand line particular brand name under which products are sold

Brand line is one row of the matrix (brand extensions) Brand line may be composed of either a single brand

or a family brand that has been line extended Nestle, Maggie

Brand mix all brand lines that a firm sells

Designing and Implementing Brand Strategies

2 strategic tools 1. (a) Brand-product matrix graphical representation of all products sold by the firm

Product lines - group of products within a category, that are closely related because they function in a similar manner, are sold to the same customer group, marketed through the same type of outlets and fall within the same price range
Product mix all product lines and items that a firm sells

Designing and Implementing Brand Strategies

2 strategic tools - Brand-product matrix Brand Portfolio consist of all brands and brand lines that the Firm offers for sale (occupies the columns of matrix) Brand portfolio strategy is judged on

Its ability to collectively maximize BE, and Not decrease the equity of other brands

Designing and Implementing Brand Strategies

2 strategic tools
(b) Branding strategy reflects the number and nature of different products linked to the brand and sold by the firm

It is characterized by - product brand relationships, and extension strategy

Breadth - product mix and Depth - number of brands in a product category

Strategic decisions about breadth and depth of Product mix are

How many product lines should the company carry? How many variants should be offered in each product line?

Designing and Implementing Brand Strategies

Branding Strategy

Breadth of product mix considers product attractiveness on the basis of

3 factors that affect category attractiveness

1.

2.

3.

Aggregate market factors attractiveness of market - large, fast growing, growth stage of its product lifecycle, non cyclical, non seasonal, yields high profit margins Category factors structural factors affecting the category low threat of new entrants, bargaining power of suppliers, and trade, current category rivalry, few product substitutes, market operating at near capacity Environmental factors technological, economic, regulatory, social factors that affect the category Firms capabilities and abilities, strategic objectives and goals Name chosen for these products - depends on branding strategy

Also consider

Designing and Implementing Brand Strategies

Branding Strategy Depth of a Branding Strategy number and nature of different brands marketed in a product class

Multiple brands strategy - in the same category are used for Market coverage targeting multiple market segments (different price, distribution, geographic boundaries etc.) P&G

Designing and Implementing Brand Strategies

Depth of Branding strategy Optimal brand portfolio is a trade off between market coverage, costs and profitability

A brand should be clearly differentiated, and appealing to a sizeable enough market segment to justify its production and marketing costs
Distinct positioning and segmentation for each brand must

maximize market coverage (no customers are ignored) but

minimize brand overlap

Portfolio is too big if the profits can be increased by dropping a brand

Designing and Implementing Brand Strategies

Branding Strategy

Determining Depth of product mix Optimal product line is based on

Ability to address consumer needs by each item in the product line Ability to withstand competition Percentage of sales and profits contributed If line is too long if profits can be added by dropping an item, or too short if it can be done by adding an item

Branding perspective longer product lines may decrease consistency of brand image if the same brand is used Branding strategy must determine which brand elements should be used for which products

Designing and Implementing Brand Strategies

Depth of Branding strategy - Portfolio Roles - brands play as part in the portfolio
1.

2.
3.

4.

Flanker brands - protect a flagship brand Cash cow - milked for profits Entry level product - attracts new customers to the brand franchise High end prestige product - adds prestige and credibility for the entire portfolio

Designing and Implementing Brand Strategies

Portfolio Roles
Flankers (fighter brand) discount brands introduced to compete with store brands It creates strong POPs so that more important brands can retain their desired positioning Flanker brands should not be too attractive and take away the sales of their higher priced brands They should not be connected to the better brands as they will reflect poorly on these other brands

Designing and Implementing Brand Strategies

Portfolio Roles
Cash Cow some brands are retained (despite dwindling sales) as they continue to generate sales with virtually no marketing support The existing brand equity is milked Gillette's Trac II, Atra, Sensor

Designing and Implementing Brand Strategies

Portfolio Roles
Low end Entry Level brand and High end Prestige brands End points of the line extensions play an important role

Relatively low-priced brand in the brand portfolio is to attract customers to the brand franchise Retailers use these as traffic builders with a view to trade up customers Relatively high priced brand in the brand family is to add prestige and credibility to the entire portfolio even if it is not the most profitable

Designing and Implementing Brand Strategies

Other roles brands play 1. 2.

3.

4.

5.

Attract a segment currently not covered Attract customers seeking variety who may otherwise have switched to another brand Increase shelf presence and retail dependence in the store Yield economies of scale in advtg., sales, merchandising, distribution Increase internal competition within the firm

Designing and Implementing Brand Strategies

Depth of a Branding Strategy Summary

Different roles that brands play in the brand portfolio are based on considerations related to the consumer, competition, and the company

Expand market coverage Provide protection Extend an image And fulfill other roles

Portfolio decisions basic criteria - Each brand name product must have
1. 2.

A well defined Portfolio role for brands A well defined Positioning as to what benefits it offers customers encapsulated in the associations - Maximize coverage, minimize overlap, optimize portfolio

Designing and Implementing Brand Strategies

2. Brand hierarchy graphically displays the branding strategy

The number and nature of common and distinctive brand elements across the firms products It reveals the explicit ordering of brand elements

Captures the relationship between the different products Represents how different products are nested with other products of different brand elements at lower levels It graphically portrays the firms branding strategy (brand trees) Typically there are more entries at each successive level of the hierarchy

Brand Hierarchy Levels

The Jean Noel Kapferer Model A brand hierarchy can involve multiple levels:
Corporate Brand Family Brand (Range brand / umbrella brand) Individual Brand Individual Item or Model (Modifier)

Designing and Implementing Brand Strategies

There are 2 strategic tools 2. Brand hierarchy Corporate or company brand

For legal reasons present on label and packaging Used differently for strategic reasons

As the only brand - Sony Combine the family brand name (individual brand) with the corporate name (Sony Bravia) It might be virtually invisible and receives no attention in the marketing program

Designing and Implementing Brand Strategies

There are 2 strategic tools 2. Brand hierarchy Family brand used in more than one product category (but not the name of the company) Maggie

Most firms support only a few Family Brands Corporate brand functions as a Family brand when it is used for a range of products.

The 2 levels collapse into 1 for those products

Designing and Implementing Brand Strategies

There are 2 strategic tools 2. Brand hierarchy Individual brand restricted to only one category, although it may be used for many product types within the category (variants) - Park Avenue Modifier - means of designating a specific item or model type, or version - Ultra Product descriptor explains what the product is and does

Brand Portfolio Structure cont.

Brand structure can be captured by hierarchy trees
Toyota Corolla -VE -CE -LE Camry -CE -LE -VE Avalon Camry Sedan Celica -Platinum -Liftback -SE -Edition -Convertible -SLE V6 -XL -XLS Lexus -LS -400 -GS -300 -400 -ES -SC -300 -300 -400

Building Equity for Hierarchy Levels and Knowledge Structures

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate / Company brand level Corporate image dimensions

Important when it plays a prominent role in the branding strategy Corporate image - depends on a number of factors

Products it makes Actions it takes Manner in which it communicates Doing the right thing everyday

Firms role in society and its reputation (with respect to employees, neighbor, stakeholders) builds credibility.

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate brand level Brand Equity - is the differential response by consumers, employees, other firms, and others to the Firms activities

Corporate BE occurs - when relevant constituents hold relevant, strong, favorable associations about the brand in memory

They respond more favorably to a corporate ad campaign, corporate branded products, and PR releases, than if the same was attributed to another company

It is distinct from Product Brands as it encompasses a much wider range of associations which impacts individual products of the firm

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate Image Dimensions affect BE

Type of associations at the Company Brand level affect BE

Common product attributes, benefits, attitudes

Intangible attributes High quality image association Innovative image associations Customer focused corporate image associations

People and Relationships

Values and programs Corporate credibility

Corporate expertise Corporate trustworthiness Corporate likeability

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate Image Dimensions Common product attributes, benefits, attitudes performance associations, judgment and feelings association, type of user, use occasions, etc.

Intangible attributes - abstract benefits or attitudes are the strongest associations fun, high quality standards, leader Product related corporate image - 2 dimensions are important
1. 2.

High quality corporate image association Innovative corporate image associations

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate Image Dimensions Common product attributes, benefits, attitudes 2 specific product related dimensions are 1.

High quality corporate image association

Create a perception that Products are of the highest quality (one of the most important decision factors)

Rated by various sources

2.

Innovative corporate image associations

Modern, up-to-date, investing in R&D, advanced manufacturing facility, introducing new product features Unique marketing programs with respect to product introduction and improvements

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate Image Dimensions People and relationships

Reflects characteristics of employees (a natural positioning strategy for services) as they directly or indirectly impact the product / services offered

Retail stores derive BE from employees -

Customer focused corporate image associations perception that company is responsive, and caring, listening to customers - King Fisher Airline Reflected through out the marketing program and communicated through advertising

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate Image Dimensions Values and Programs

Reflected without directly relating to products Corporate image campaigns about the philosophy, and actions of the company with respect to organizational, social, political, and economic issues Socially conscious image and environment friendly image Targeting consumers, employees, others

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate Image Dimensions
Corporate credibility reputation acquired through designs and delivery of products and services Consumers form abstract feelings and judgments about the company

Personality of the corporate brand Success and leadership

Credibility is dependent on 3 factors Corporate expertise extent to which it can competently make and sell products or conduct its services Corporate trustworthiness extent to which it is seen as honest, dependable, and sensitive to consumer needs Corporate likeability seen as likeable, attractive, prestigious, dynamic

Corporate Image Dimensions Corporate credibility advantages

Building Equity for Hierarchy Levels and Knowledge Structures

Company will be treated favorably by govt, legal bodies Can attract better quality employees Helps existing employees become more productive and loyal Helps survive a brand crisis and avoid public outrage (buffers corporate trouble)

Building Equity for Hierarchy Levels and Knowledge Structures

Corporate Brand building and managing it

Firms must have a high public profile especially to shape more abstract associations MD, CEO must maintain a more public profile to help communicate news and information and a be symbol of the current marketing activity Firm will also be up for more public scrutiny - has to be transparent in terms of its values activities and programs Strong Corporate Brands (if built and nurtured) offer a host of potential marketing advantages

Building Equity for Hierarchy Levels and Knowledge Structures

Summary

Many types of associations become linked to the corporate brand image that transcend physical product characteristics These intangible associations are valuable sources of BE and provide POPs and PODs Companies have a number of means of creating these associations In doing so the companies must talk the talk and walk the talk with customers communicating and backing up claims with concrete programs that they can understand and experience

Building Equity for Hierarchy Levels and Knowledge Structures

Family brand level (Range or Umbrella Brands) applied across a range of product categories

Company level associations are less salient Family brands are used for several reasons

When products become dissimilar, it is difficult to use the Company brand and still retain its meaning Titan and Fast Track Family brands evoke a specific set of associations across groups of related products These associations may relate to

Common product attributes, benefits attitudes, To a lesser extent to people, relationships, values, and corporate credibility

Building Equity for Hierarchy Levels and Knowledge Structures

Family brand level (Range Brands or Umbrella Brands) Family brands are an efficient means to link common associations to many but distinct products Cost of introducing related new products is lower Likelihood of acceptance is higher Products linked must be considered carefully so that associations of the family brand do not become weaker and less favorable Failure in one product has ramifications on other products in the family because of common identification These consideration determine whether a Branded House or a House of Brands is a more appropriate strategy

Building Equity for Hierarchy Levels and Knowledge Structures

Individual brand level restricted to 1 product category (there may be many product types)

Different models, package size, flavors, forms

Advantage brand and supporting activities are customized to meet the needs of a specific customer group and designed for them

The name, logo and other branding elements Product design, IMC programs, pricing and distribution

If the brand fails, the risk to other brands / company is minimized

Disadvantage of creating individual brands

Difficulty, complexity and expensive to developing separate marketing programs to build sufficient levels of BE

Building Equity for Hierarchy Levels and Knowledge Structures

Modifier level used with Corporate or Family or Individual brand to further distinguish the type of items / models involved

Signifies refinements or differences in brand related factors quality, attributes, functions, Makes products more understandable, and relevant to the customer / trade Plays an important organizing role in communicating
That different products within a category may share the same brand name, but differ on one or more attribute / benefit

Plays an important role in market coverage within the category

Building Equity for Hierarchy Levels and Knowledge Structures

Product descriptor (is not a brand element) used with branded product so that consumers understand what the product is and does, and helps define the relevant competition for the product

A basic product name - useful to facilitate familiarity and understanding of how it is different from other similar products when it is difficult to describe a new product with unusual functions.

Designing Branding Strategy

Managing Brand Equity

Managing BE concerns those activities that take a broader and more diverse perspective of a brands equity

Understanding how branding strategies should reflect corporate concerns and be adjusted, if at all, over time or over geographical boundaries or market segments

Branding Strategies

The branding strategy for a firm reflects the number and nature of common or distinctive brand elements applied to the different products sold by the firm

Which brand elements can be applied to which products and the nature of new and existing brand elements to be applied to new products

Brand Hierarchy Decisions

In creating the hierarchy, it is important to decide:

1.

2.

3.

4.

The number of levels of the hierarchy to use in general How brand elements from different levels of the hierarchy are combined, if at all, for any one particular product How any one brand element is linked, if at all, to multiple products Desired brand awareness and image at each level

Designing the Brand Hierarchy

Decide on 1. Number of levels

Principle of simplicity: as few levels as possible Principle of clarity: Logic and relationship of all brand
elements employed must be obvious and transparent.

2.

Levels of awareness and types of associations to be created at each level

Principle of relevance: Create associations that are

relevant across as many individual items as possible Principle of differentiation: Differentiate individual items and brands

Designing the Brand Hierarchy

3.

Products to be introduced
Principle of growth - depending on ROI invest in
market penetration / expansion vs. product development Principle of survival - brand extensions must achieve brand equity in the categories Principle of synergy - brand extensions should enhance the equity of the parent brand

Designing the Brand Hierarchy

4. How to link brands from different levels for a product

Principle of prominence: The relative prominence of

brand elements affects perceptions of product distance and the type of image created for new products

5. How to link a brand across products

Principle of commonality: The more common

elements shared by products, the stronger the linkages

Adjustments to Marketing Strategy

Multiple levels of branding strategy

Different levels of awareness and image

Sub-brand strategy - marketing communications at the corporate / family brand level to complement individual brands Corporate image campaign (also works at Family level) Brand line campaigns

2 marketing communication strategies

1. 2.

Adjustments to Marketing Strategy

Multiple levels of branding strategy

2 marketing communication strategies 1. Corporate image campaign to create associations for the corporate brand to

Build awareness of company and nature of business Create favorable attitude and perceptions about company credibility Link beliefs that can be leveraged about product specific marketing Make favorable impression on the financial community Motivate present employees and attract better recruits Influence public opinion on issues

Adjustments to Marketing Strategy

Multiple levels of branding strategy

2 marketing communication strategies 1. Corporate image campaign To build CBBE 3 objectives are critical
1.
2. 3.

Build awareness of company and nature of business Build trust worthiness and credibility Create corporate image associations (beliefs) that can be leveraged by product specific marketing

Adjustments to Marketing Strategy

Multiple levels of branding strategy

2 marketing communication strategies 2. Brand line campaign to emphasize the breadth of products associated with the brand

It refers to the range of products associated with a brand line Brand line ads shows uses and benefits of various products

To builds awareness Clarify meaning Suggests additional use applications

Umbrella ads (that encompass also serve brands) used in conjunction serve a purpose

Managing Brand Portfolios

Multiple brands are often employed in a category for market coverage

Target different market segments

Maximize coverage Minimize overlap A portfolio is too big if profits can be increased by dropping brands. A portfolio is not big enough if profits can be increased by adding brands

Basic principle of brand portfolios

Basic economics guideline ...

Brand Consolidation & Focus

Number of factors are driving this trend

Movement from transactions to relationships with consumers Value of strong power brands Difficulty of brand management

Cost Need for efficiencies

Importance of top-down brand management