Designing and

Implementing
Branding Strategies

Patricia Harris
Previously on Strategic
Brand Management
 Brand Value Chain
Marketing Customer Market Shareholder
VALUE program mindset performance value
STAGES investment
Pricepremiums
Product Awareness Stockprice
Priceelasticities
Communications Associations P/Eratio
Trade Marketshare
Attitudes Marketcapitalization
Employee Expansionsuccess
Attachment
Coststructure
Other Activity
Profitability

Program Marketplace Investor

MULTIPLIERS Quality conditions sentiment
(ORFILTERS)

Clarity Channelsupport Marketdynamics

Relevance Consumersize&profile Growthpotential
Distinctiveness Competitivereactions Riskprofile
Consistency Brandcontribution
 Readings for Today
Aaker, D.A. and Joachimsthaler, E. (2000), The Brand
Relationship Spectrum: The Key to the Brand Architecture
Challenge, California Management Review, 42 (4): 8-23
Keller, K.L (2015) Designing and Implementing Brand
Architecture Strategy, Journal of Brand Management, 21:
702-715
Laforet, S. and Saunders, J. (1994) Managing Brand
Portfolios: How the Leaders Do It, Journal of Advertising
Research, 35 (5): 64-77
Today ...
Branding Strategy or Brand Architecture

Two important strategic tools:

Brand-product mix matrix Define relationships
among
Brand hierarchy products and brands
Next week...
More on Brand Architecture
Two important strategic tools: Define relationships
Brand-product mix matrix among
products and brands
Brand hierarchy

The brand relationship spectrum (Aaker and

Joachimsthaler, 2000)

New product introduction choices

Some relevant concepts
from earlier sessions
 Brand Elements
A variety of brand elements can used to
enhance brand awareness or facilitate
the formation of strong, favorable, and
unique brand associations:

Brand Name Character

Logo Packaging
Symbol Slogan
 Criteria for Choosing Brand
Elements
Memorability Marketers offensive strategy
and build brand equity
Meaningfulness
Likability
Transferability
Defensive role for leveraging
Adaptability and maintaining brand equity

Protectability
 Putting It All Together

The entire set of brand elements makes

up the brand identity, the contribution of all
brand elements to awareness and image.
The cohesiveness of the brand identity
depends on the extent to which the brand
elements are consistent.
 Branding Strategy or Brand
Architecture
The branding strategy or architecture is about
the number and type 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 characteristics of new and existing brand elements to
be applied to new products
 The role of Brand
Architecture

Clarify: brand awareness

Improve consumer understanding and
communicate similarity and differences
between individual products
Motivate: brand image
Maximize transfer of equity to/from the brand
to individual products to improve trial and
repeat purchase
Branding Strategy or Brand
Architecture
Important because
it is the way by which the firm can help
consumers understand its products and services
and organize them in their minds (Keller, 1999)
It specifies brand roles and the nature of the
relationships between brands (Aaker &
Joachimsthaler , 2000)

Two important strategic tools:

Brand-product mix matrix Define relationships
among
Brand hierarchy products and brands
 Brand-Product Matrix
Product Mix
1 2 3 4
A
Brands B
C
Must define . . .
Product-Brand Relationships (COLUMNS)
Depth of Product Line number of brands in each product category
Brand Portfolio set of all brands sold in a product category
Brand-Product Relationships (ROWS)
Breadth of Product Mix (number of product lines and items sold)
Line & Category Extensions
Breadth of Brand Lines
 Important Definitions

Product line
A group of products within a product category that
are closely related

CHOCOLATE &
CONFECTIONERY
Chocolate
Biscuit
Boxed
Sugar (Rowntree)
 Important Definitions
Product line
A group of products within a product category that
are closely related
Product mix (product assortment or range)
The set of all product lines and items that a
particular seller makes available to buyers
 Nestle Product Mix (UK)

1. Drinks
2. Breakfast Cereals
3. Chocolate & Confectionery
4. Dairy Products
5. Coffee
6. Bottled Water
7. Food
8. Pet Care
9. Professional
http://www.nestle.co.uk/brands
 Nestle Product Mix (UK)
Breadth of Product Mix

Drink Break Chocolat Bottle Coffee Food Dairy Pet

s . e d Product care
Cerea & Conf. Water s
l
 Product Mix
Breadth of Product Mix

Depends upon:
Aggregate market factors
Market size; Market growth; Stage on PLC; Seasonality
Category/industry factors
Porters 5 forces
Environmental factors
PEST
 Brand-Product Matrix
Product Mix
1 2 3 4
A
Brands B
C
Product line
Must define . . .
Product-Brand Relationships (COLUMNS)
Depth of Product Line
Brand Portfolio
 Product Lines & Product
Mix Line
Depth of Product
Drinks Break. Chocolat Bottle Coffee Food Dairy Pet
Cereal e d Products care
& Water
Conf.
Chocolat Children Chocolate Natural Everyda Frankfurters Milk based Dog
e based Breakfas Mineral y products care
t Cereals H 2O
Adults Biscuit Spring Decaf Sauces Cat
Breakfas H 2O care
t Cereals

Cereal Boxed Prepared Cafe

Bars H 2O Menu
Sugar Dolce
Gusto
Super
Premiu
m
Coffee
Mate

http://www.nestle-waters.com/brands/types-of-wat
 Product Line & Product Mix
Breadth of product mix
Aggregate market factors
Category factors
Environmental factors
Depth of product line
Examining the percentage of sales and profits
contributed by each item in the product line
Deciding to increase the length of the product line
by adding new variants or items typically expands
market coverage and therefore market share but
also increases costs
 Brand-Product Matrix
Product Mix
1 2 3 4
A
Brands B
C
Product line
&
Must define . . . Brand portfolios
Product-Brand Relationships (COLUMNS)
Depth of Product Line
&
Brand Portfolio
 Product Lines & Product
Mix Line
Depth of Product
Drinks Break. Chocolat Bottle Coffee Food Dairy Pet
Cereal e d Products care
& Water
Conf.
Chocolat Children Chocolate Natural Everyda Frankfurters Milk based Dog
e based Breakfas Mineral y products care
t Cereals H 2O
Adults Biscuit Spring Decaf Sauces Cat
Breakfas H 2O care
t Cereals

Cereal Boxed Prepared Cafe

Bars H 2O Menu
Sugar Dolce
Gusto
Super
Premiu
m
Coffee
Mate

http://www.nestle-waters.com/brands/types-of-wat
 Product Lines & Product
Depth of ProductMix
Line & Brand Portfolio
Drinks Break. Chocolat Bottle Coffee Food Dairy Purina
Cereal e d Product Pet
& Water s Food
Conf.
Nesquik Nesquik Aero Buxton Nescafe Herta Carnation Purina
Cheerios Yorkie Acqua Nescafe Maggi Bakers
Panna Decaf
Shredde Smarties Contrex Nescafe Winalot
d Wheat Cafe Menu
range
Clusters + 7 other Deer Dolce Gusto Gourmet
brands Park
+ 12 KitKat Nestle Nescafe Alta Felix
other + 6 other Pure Rica + 3
brands brands Life other
variants

After Eight Gerber Nespresso Go Cat

+ 3 other
brands
Rowntrees + 61 + 3
Polo other other
https://www.nestle-cereals.com/uk/our-cereals/cereal-
brands brands
 Why have a brand
portfolio?

http://www.accolade-wines.com/our-portfolio
 Managing Brand Portfolios
Multiple brands are often employed in a category for market
coverage
Target different market segments, channels of distribution or
geographic boundaries
Basic principle of brand portfolios
Maximize coverage so that no potential customers are ignored
Minimize overlap so that brands are not competing among
themselves
Basic economics guideline ...
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
Portfolio / Individual Branding /
House of Brands Strategy
Advantages of portfolio (individual
branding/house of brands) strategy:
fragment the market = less attractive to competition
no contamination if disaster
lower risk
maintain economies of scale of production, R&D,
market research, distribution
allows for tightly focused segmentation strategies
allows a company to be seen as a specialist in many
markets, without becoming a jack of all trades
achieve a larger share of shelf space
 Nestle
Breakfast Cereals Brand Portfolio
(16 brands; 23 variants)
Nesquik Cereal
Cheerios (4 variants)
Cookie Crisp
Shredded Wheat (5) Oats & More (2)
Clusters Curiously Cinnamon
Shreddies (5) Curiously Strawberry
Golden Nuggets Lion
Grab 2 Go (3)
Golden Grahams
Fitnesse (2)
Toffee Crisp
Gluten Free Corn Flakes (2)
https://www.nestlecereals.co.uk/content/Brands/Brand.aspx?BrandId=
 Weetabix
Breakfast Cereals Brand Portfolio
1. Weetabix (6 variants)
2. Alpen (4)
3. Alpen Cereal Bars (8)
4. Ready Brek (3)
5. Weetos (3)
6. Crunchy Bran (1)
7. Oatibix (4)
8. Oatibix Flakes (3)
9. Oatybars (3)

http://www.weetabix.co.uk/brands/
 Kelloggs
Breakfast Cereals Brand Portfolio
(21 brands; 70+ variants)
Optivita
All-bran
Pop tarts
Bran Flakes Rice Crispies
Coco Pops Special K
Corn Flakes Wheats
Crunchy Nuts Country Store
Frosties Honey Loop
Fruit n Fibre Just Right
Fruit Winders Luxury Muesli
Natures Pleasure Ricicle
Start
Nutri Grain
http://www.kelloggs.co.uk/products/
 Top Ten UK Breakfast Cereal
Brands
Market Shares %
BREAKFAST 2005 2008 2009 2015
CEREALS (UK)

1. Weetabix (Weetabix) 8 8 8 9
2. Special K (Kellogg) 5 7 7 5
3. Corn Flakes (Kell.) 7 5 5 5
4. Crunchy Nuts (Kell.) 6 5 5 7
5. Coco Pops (Kellogg) 3 4 4 5
6. Rice Krispies (Kell.) 3 3 3 3
7. Shreddies (Nestl) 3 2 2 4
8. Cheerios (Nestl) 2 4 4 4
9. Frosties (Kellogg) 3 2 2 2

Source: Mintel
 Portfolio or Individual Branding or
House of Brands Strategy

Disadvantages of portfolio (or house of brands)

strategy:
Loss of economy of scale in advertising and other
marketing costs
http://www.marketingweek.co.uk/3022336.article?cmpid=MWE01&cmptype=newsletter&email=tru

Proliferation of brands at the expense of profit

http://www.marketingweek.co.uk/opinion/too-many-brands-spoil-the-strategy/4004938.article?cmpid=MWE01&cmp

Lack of endorsement from corporate brand

Weaker against private labels
http://www.marketingweek.co.uk/opinion/does-procter-and-gambles-house-of-brands-need-major-repairs/4002888.artic
 Brand Roles in the Portfolio
Flankers or fighter brands

Cash cows

Low-end entry-level

High-end prestige brands

 Important Definitions
Product line
A group of products within a product category that
are closely related
Product mix (product assortment)
The set of all product lines and items that a
particular seller makes available to buyers
Brand mix (brand assortment)
The set of all brand lines that a particular seller
makes available to buyers
 Brand-Product Matrix
Product Mix
1 2 3 4
Breadth of
A brand lines

Brands B
C
Product line
or
Must define . . . Brand portfolios
Product-Brand Relationships (COLUMNS)
Depth of Product Line
Brand Portfolio

Brand-Product Relationships (ROWS)

Breadth of Product Mix
Line & Category Extensions
Breath of Brand Lines
 Product Brand Matrix
Breadth of Brand Lines
Drinks Break. Chocolat Bottle Coffee Food Dairy Purina
Cereal e d Product Pet
& Water s Food
Conf.
Nesquik Nesquik Aero Buxton Nescafe Herta Carnation Purina
Cheerios Yorkie Acqua Nescafe Maggi Bakers
Panna Decaf
Shredde Smarties Contrex Nescafe Winalot
d Wheat Caffe Menu
range
Clusters + 7 other Deer Dolce Gusto Gourmet
brands Park
+ 12 KitKat Nestle Nescafe Alta Felix
other Yorkie Pure Rica + 3
brands Life other
+ 5 other
brands variants

After Eight Gerber Nespresso Go Cat

+ 3 other
brands
Rowntrees + 61 + 3 other
Polo other brands
brands
 Branding Strategy or Brand Architecture
Important because
it is the way by which the firm can help
consumers understand its products and services
and organize them in their minds.

Two important strategic tools:

Brand-product mix matrix Define relationships
Brand hierarchy Among
Products and brands
 Brand Hierarchy
Shows
the ordering of brand elements
captures potential branding relationships among
different products sold by the firm
graphic illustration of a firms branding strategy
Different ways of defining levels of hierarchy
 Brand Hierarchy Levels
A brand hierarchy can involve multiple levels:

Corporate Brand

Family Brand

Individual Brand

Individual Item or Model (Modifier)

Brand Hierarchy Levels
A brand hierarchy can involve multiple levels:
Corporate brand

? Family brand

Individual brand

Individual item or model (modifier)

http://www.accolade-wines.com/our-portfolio
 Brand Hierarchy Levels
A brand hierarchy can involve multiple levels:

? Corporate Brand

Family Brand ThinkPad

Individual Brand X

32
Individual Item or Model (Modifier)
 Brand Hierarchy Tree:
Toyota
Toyota
Corporation

Toyota Toyota Toyota Toyota Lexus

(Trucks) (SUV/vans) (Cars) Financial
Services

Corolla MR2
Camry Avalon Celica ECHO Matrix Prius
Spyder
Platinum
CE SE Edition
S LE XL SE
LE XLE XLS SLE

http://www.marketingweek.co.uk/sectors/automotives/toyota-prius-to-become-sub-brand/3022131.article
 Hierarchy levels (1)

Corporate
mostly visible on the product/package
adds shareholder value
encompasses a much wider range of
associations than a product brand
e.g. Nestle, Ford, PepsiCo, Unilever
 Hierarchy levels (2)
Family
Can be used in more than one product category but
is not necessarily the corporation name
an efficient means to link common associations to
multiple but distinct products
e.g.
Ben and Jerrys (Unilever): Ice cream, Frozen yoghurt
Tropicana (Pepsi): Juices, Juice Drinks, Smoothies
Buitoni (Nestle): Pasta, Sauces, Grated Cheese
Hierarchy levelscont. (3)
Individual Brand
Restricted to essentially one product category
e.g. Perrier
Hierarchy levelscont. (4)
Individual Item/Modifier/Variant
Signals refinements or differences in the
brand related to factors such as quality
levels, attributes, functions, etc.
Plays an important organizing role in
communicating how different products
within a category that share the same brand
name are
Flavours (e.g. banana, custard, summer)
pack-sizes (e.g. small, medium, large, extra large)
forms (e.g. tablet, liquid, powder)
pack-types (e.g. pouch, carton, bag)
 Nestle
Polo Brand Variants
POLO
ORIGINAL
SPEARMINT
SUGAR FREE
FRUIT
SUPER MINT
CITRUS SHARP
GUMMIES
MINIMINTS
Brand Equity at Hierarchy
Levels
 Corporate Level Brand
Equity
Occurs when stakeholders hold strong,
favorable, and unique associations about the
corporate brand in memory
Encompasses a much wider range of
associations than a product brand (see next)
 Corporate Associations
Dimensions
Corporate product attributes, benefits or attitudes
Quality
Innovativeness
People and relationships
Customer orientation
Values and programs
Concern with the environment
Social responsibility
Corporate credibility
Expertise
Trustworthiness
Likeability
 Some dangers..

Doves Campaign for

real beauty
http://uk.youtube.com/watch?v=Ei6JvK0W60I
versus

The Lynx effect

http://www.marketingweek.co.uk/lynx-ads-banned-for-degrading-
women/3032118.article
http://www.marketingweek.co.uk/lynx-sets-out-cheeky-apology-for-banned-
ad/3032218.article

Lynxversus
attract
 Coca Cola's New 'One
Brand' Strategy (2015)

New One Brand strategy

from Coke (2015)

One Brand Global Strategy

(2016)
 Brand Equity at Hierarchy
Levels
Corporate level
Association with corporate reputation
Corporate citizenship
Family Brand Level
Associations across a group of products
Individual Level
Identity can be customised to suit the user segment
Modifier/Variant Level
Category/market coverage
Respond to competition
Differentiation based on function attributes
Niche effects
Brand Hierarchy Decisions

In creating the hierarchy, it is important to

decide:
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 (1)
Decide on the number of levels
Principle of simplicity: Employ as few levels as possible
Principle of clarity: Logic and relationship of all brand
elements employed must be obvious and transparent.
Decide on the levels of awareness and types of
associations to be created at each level
Principle of relevance: Create global associations that
are relevant across as many individual items as possible
Principle of differentiation: Differentiate individual
items and brands
 Designing the Brand
Hierarchy (2)
Decide on 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

Decide on how to link a brand across products

Principle of commonality: The more common elements
shared by products, the stronger the linkages
 What determines the
branding strategy of a
company?
A recent study by Strebinger (2014) found that:
branding strategies for products are determined by
industry, the overall strategy of the company and
product level decisions
corporate branding tends to be more common for
services and consumer durables companies than for
consumer non durables
at the product level, quality differences between
products and differences in experiential product
positioning favour individual brands
 Which brand strategy or
brand architecture is better?
(1)
A number of studies:
Rao, Agarwal, and Dahlhoff, (2004): the highest financial
valuation achieved by firms pursuing a corporate branding
strategy, followed by those practicing a house of brand
strategy, while firms with a mixed branding strategy achieve
the lowest value. But, do financial markets understand
branding?
Morgan and Rego (2009): brand portfolio characteristics
(e.g. number of brands, internal competition among brands
in the portfolio etc. ) has impact on marketing effectiveness,
efficiency and financial performance
 Which brand strategy or
brand architecture is better?
(2)
In financial services:
Devlin (2003): a multi-corporate approach, where the
brand architecture comprises a family of many brands,
preferred by financial services marketing practitioners
But Devlin and McKechnie (2008): consumers tend to
view a financial service organization as a single entity
and treat all services offered by a particular
organization as components of a single brand.
 Readings for next week
Aaker, D. A., Keller, K. L., (1990) Consumer
evaluations of brand extensions, Journal of
Marketing, 54 (1 - January): 27-41
Keller, K.L and Sood, S. (2003) Brand Equity
Dilution, MIT Sloan Management Review, Fall: 13-
15
Tauber, E.M. (1988) Brand Leverage: Strategy for
Growth in a Cost-control World, Journal of
Advertising Research, 28 (4): 26-30