9-1

Chapter Nine

Strategic Brand
Management

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

 9-2

STRATEGIC BRAND
MANAGEMENT

 Challenges in Building
Strong Brands
 Strategic Brand Analysis

 Brand Identity Strategies

 Managing
Products/Brands
 Managing the Brand
Portfolio
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CHALLENGES IN
BUILDING STRONG
BRANDS
A product is anything
that is potentially valued
by a target market for
the benefits or
satisfaction it provides,
including objects,
services, organizations,
places, people, and
ideas
 9-4

A brand is a name, term, sign,

symbol, or design, or combination
of them, intended to identify the
goods or services of one seller or
group of sellers, and to
differentiate them from those of
competitors.
American Marketing Association

Goods Versus Services

Services are intangible
consumed at the time they are
produced, often linked to the
people who produce the
services.*

* Leonard Berry, “Services are Different,” Business, May-Jun 1980, 24-30.

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Strategic Role of Brands

A strategic brand perspective requires
managers to be clear about what role
brands play for the company:
FOR BUYERS, BRANDS CAN:
• reduce customer search costs by
identifying products quickly and
accurately,
• reduce the buyer’s perceived risk by
providing an assurance of quality and
consistency (which may then be
transferred to new products),
• reduce the social and psychological
risks associated with owning and using
the “wrong” product by providing
psychological rewards for purchasing
brands that symbolize status and
prestige.
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FOR SELLERS, BRANDS CAN

FACILITATE:

• repeat purchases that enhance the

company’s financial performance
• the introduction of new products, because
the customer is familiar with the brand
from previous buying experience,
• promotional effectiveness by providing a
point of focus,
• premium pricing by creating a basic level
of differentiation compared to competitors.
• market segmentation by telling the target
audience, for whom the brand is intended

& for whom it is not.

• brand loyalty, in product categories where

loyal buying is an important feature of

Source:buying behavior.
Marketing Science Institute Report No. 97422, 1997
 9-7

Brand Management
Challenges*
Internal and external forces create
hurdles for product brand managers in
their brand building initiatives:
Intense Price and Other Competitive
Pressures

Fragmentation of Markets and Media

Complex Brand Strategies and

Relationships

Bias Against Innovation

Pressure to Invest Elsewhere

Short-Term Pressures

*David A. Aaker, Building Strong Brands, 1996, 26-35.

 9-8

Marketing’s Role in
Product Strategy
1. Market sensing
2. Identifying the
characteristics and
performance features of
products
3. Guiding target market and
positioning strategies

Strategic brand management

decisions are relevant to all
businesses, including suppliers,
producers, wholesalers,
distributors, and retailers.
 9-9

Strategic Brand
Management

Brand Identity

Brand
Identity Implementation Equity

Brand Strategy
Over Time

Strategic
Brand
Analysis Managing the
Brand Portfolio

Leveraging the
Brand
 9-10

Product life cycle

analysis

Financial Product
analysis grid analysis

Analyzing
Brand
Performance

Brand
Research Positioning
studies maps
Standardized
information
services
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Product Life Cycle

Analysis
Relevant issues in PLC
analysis include:
 Determining the length and
rate of change of the PLC
 Identifying the current PLC
stage and selecting the
product strategy that
corresponds to that stage
 Anticipating threats and
finding opportunities for
altering and extending the
PLC
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BRAND IDENTITY
STRATEGIES
Brand identity is a unique set of
brand associations that the brand
strategist aspires to create or
maintain. These associations
represent what the brand stands
for and imply a promise to
customers from the organization
members.*

Four Brand Identity Perspectives

Product
Organization
Person
Symbol
* David A. Aaker, Building Strong Brands, 1996, 68.
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MANAGING
PRODUCTS/BRANDS

Building the
Product/Brand Over
Time

Product Line Strategies

Product/Brand Portfolio
Strategies
 Strategies for
9-14

Improving Product
Performance
Product Alter
Cost improvement marketing
reduction strategy

Add Product line Eliminate

new Strategy specific
product(s) product(s)

Product mix strategy

Delete Add new

product Change product
line(s) product line line(s)
priorities
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Strategies for Brand

Strength
 Brand-Building Strategies
– Developing the brand identification
strategy
– Coordinate identity across the
organization
 Brand Revitalization
– Find new uses for mature brands
– Add products related to heritage
 Strategic Brand Vulnerabilities
– Brand equity can be negative
– Retailer private brands compete with
manufacturer brands
– Major shifts in consumer tastes
– Competitive actions
– Unexpected events
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Product Mix
Modifications
Motivation for changing the
product mix:
 Increase the growth rate of the

business
 Offer a more complete range of

products to wholesalers and

retailers
 Gain marketing strength and

economies in distribution,
advertising, and personal
selling
 Leverage an existing brand

position
 Avoid dependence on one

product line or category

 9-17

SEVEN DEADLY SINS OF

BRAND MANAGEMENT*
Failure to fully understand the
meaning of the brand.
Failure to live up to the brand
promise.
Failure to adequately support the
brand.
Failure to be patient with the brand.
Failure to adequately control the
brand.
Failure to properly balance
consistency and change with the
brand.
Failure to understand the complexity
of brand equity measurement
and management.
*Kevin Lane Keller, Strategic Brand Management, Prentice Hall, 2003, 736.
 9-18

HOW MANY
BRANDS?
1. Is it different enough
to merit a new name?
2. Will the brand identity
add value?
3. Are there risks in using
an existing brand
name?
4. Is the new brand a
viable business
venture?