Name: Sumbul Mughal

Topic: Brand Leadership

EXTRACT TAKEN FROM THE BOOK

WRITTEN BY DAVID A. AAKER
 BRAND MANAGEMENT-THE CLASSICAL MODEL
BACKGROUND
In 1931, Neil McElroy who was a junior marketing manager of
PROCTER and GAMBLE, was responsible for the advertising
of Camay soap, Ivory was the king at P & G. He observed that
the Camay marketing effort was diffuse and uncoordinated
with no budget commitment or management focus. As a
result,he wrote a classic memo proposing a brand-focused
management system.
Extract from the Neil McElroy classical memo
• IN 1931 memo Neil described the following duties and responsibilities
of brand man:
• BRAND MAN:
• 1. Study carefully the shipments of his brands by units.
• 2. where brand development is heavy and where it is progressing
• 3. where brand development is light
• A) study the past advertising and promotional history of the brands in
order to find out the trouble.
 Continued
• B) After uncovering our weakness develop a plan that can be applied
to this local sore spot.
• C) Outline this plan in detail to the Division Manager to obtain his
authority and support for the corrective action.
• D) Prepare sales force and all other necessary material for carrying
out the plan.
• E) Keep whatever records are necessary and make whatever field
studies are necessary to determine whether the plan has produced
the expected results.
 From a limited to a broad focus
In the classical P & G model, the scope of the brand manager was
limited to not only a single brand but also one product and one
market. In the brand leadership model, following are some challenges
that a brand man faces:
1. Multiple products and markets
Because a brand can cover multiple products and markets so
determining the brand’s product and market scope becomes a key
management issue.
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• Product scope
• Product scope involves the management of brand extensions. To
which products should the brand be attached? Like for example
Clorox is extended to other brands like Clorox washroom cleaner, tiles
cleaner, glass cleaner and as a detergent, similarly Lipton is extended
to Lipton yellow label tea, green tea, rosehip peach, yellow label
mega daane.
 Continued
• Market scope
• Market scope refers to the stretch of brand across markets. For
example Pringles, Coke and Kitkat. These three brands have been
strectched in different markets.
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• 2. Category focus:
• The classical P&G brand management system
encouraged the existence of competitive brands
within categories such as Pantene, Head & Shoulders
and Pert.
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• 3. Global perspective
• The brand leadership has global perspective. Thus a key to manage the
brand across different markets and countries is a challenging task for a
brand man.
• 4.Communication team leader
• The classical brand manager often just act as the coordinator and
scheduler of a tactical communication programs.
• In the brand leadership model, the brand manager needs to be a
strategist and communication team leader directing the use of
sponsorships, the Web, direct marketing, publicity and promotions.
Brand identity as the driver of strategy
• In the brand leadership model, strategy is not guided only by short
term performance measures such as sales and profits but also by the
brand identity.
• The development of brand identity relies on a thorough
understanding of the firm’s customers, competitors and business
strategy as well as an in depth knowledge of customer motivations.
• Competitor analysis is another key because the brand identity needs
to have points of differentiation.
 Brand building pays off
• Because the classical brand management model focused on short
term sales and profits, investments were easy to justify. The brand
leadership focuses on building assets that will result in long term
profits. The firm’s highest executives must believe that building
brands will result in a competitive advantage that will payoff
financially.
 Brand equity
• Brand equity' is a phrase used in the marketing industry which
describes the value of having a well-known brand name, based on the
idea that the owner of a well-known brand name can generate more
revenue simply from brand recognition. Brand equity has four
dimensions:
• 1. Brand awareness
•  This is the fundamental component of brand equity.  Consumers
have a set of brands in their heads, that they think of for any
particular category.  These sets change constantly as new information
is acquired.  The aim is to have their awareness for our product.
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• 2. Brand’s Perceived Quality
• Customer quality perceptions extend to all aspects of your brand through
brand contacts.  Brand contacts are any point where the customer will
encounter your brand.  Customers judge quality as a total brand experience.
• 3. Consumer Associations with the Brand
• The essence of the brand is its key to association and the basis for its
positioning.  Associations are key to forming attitudes, opinions, and beliefs
with customers.  Associations form the basis of brand identity and brand
image, they can be both positive and negative.  The identity is the strategy
of the brand.  Strive for a high positioning in your audience’s set as well as
positive associations.
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• 4. Brand Loyalty
• This is the big one, the most valued component of brand equity.
 Loyalty is the foundation of the Lifetime Value (LTV) marketing
concept.  Loyal customers increase profitability (awareness) and
reduce consumer acquisition costs (time/effort).