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STRATEGIC BRAND MANAGEMENT

BUILDING, MEASURING, AND MANAGING BRAND EQUITY

Kevin Lane Keller

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What is a Brand? American Marketing Association’s 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.

Attributes that identify the brand are called – Brand Elements (based on people, place, objects, animals, etc.)

Practicing managers define brands as more than that. This distinction is important since it can lead to confusion.

What is a Brand?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, idea)

Kotler defines 5 levels of a product1. Core benefit level – fundamental need or want that

is satisfied2. Generic product level – basic version – attributes

necessary for functioning (stripped down level)3. Expected product level – what customer’s

normally expect 4. Augmented product level – additional attributes,

benefits that distinguish it from competition5. Potential product level – all transformation that it

might undergo in the future

What is a Brand?A Brand is therefore a Product – that also has

dimensions that differentiates it from other products designed to satisfy the same need (competition)

Differences may be - Rational and tangible – related to product performance

(3M, Sony, Gillette) Symbolic, emotional, intangible – related to what the brand

represents (Coca Cola, Calvin Kline, Marlboro)

What distinguishes a brand from a commodity gives it equity - the sum total of consumer perceptions and feelings about how it performs (3M, Sony, Gillette)

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

New Concept of Brand Equity (BE)

BE is defined differently by many but there is a point of consensus. It is agreed that -

BE relates to marketing effects that are uniquely attributable to the brand BE relates to the fact that 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 about - Branding is about creating differences Differences in outcome - arise from ‘added

value’ endowed to a product as a result of past marketing activities for the brand

This value can be created for a brand in many ways

Brand value can be exploited to benefit of 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 created translates to financial profits for the firm as:

Creates perceived differences through branding

Develops a loyal consumer franchise

The brand is an intangible valued asset that needs to be handled carefully.

Why Brands Matter Customers

Risk reducer Search cost reducer Signal of quality Symbolic device for self expression Promise, bond, pact, with maker of the product Means of identification of source of product for assignment of

responsibility to product maker

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

Why Brands Matter It creates a relationship between brand and consumer

a bond / pact. trust and loyalty and in return ……. expect consistent product performance, appropriate price, distribution

and other actions Brands take on a special meaning and change the

experience and perception of a product that leads to greater satisfaction

Customers with past experience learn more about the brand The advantages

Lowers search cost internally and externally The value may not be only functional in nature They are symbolic devices allowing them to project their self image Extremely important with credence goods to signal quality Brands reduce risk particularly in BtoB settings

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Benefits 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

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 & support Increase marketing communication effectiveness Yield licensing opportunities Support brand extensions

Anything Can Be Branded

Branding is possible for - B to B products High-tech products Services Retailers and Distributors Online products and services People and Organizations Sports Arts, Entertainment Geographic location Ideas and causes

Anything Can Be Branded

To brand a product what needs to be done is -Consumer has to be Taught to identify the brand – label, name and

other elements Learn the brand meaning - functional, emotional

and symbolical Know the brand difference from other similar

product brands (performance / image and non-product related considerations)

Commodities have been branded – atta, salt

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Determinants of Customer-Based Brand Equity

Customer is aware of and familiar with the brand

Customer holds some strong, favorable, and unique brand associations in memory

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The Concept of CBBE and Marketing

Customer-based brand equity - creates Differential effect of brand because of … Customer brand knowledge…which

generates Customer response to brand marketing

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Brand Equity and Marketing Management

BE concept stresses - importance of the brand in marketing strategies

BE is defined in terms of the marketing effects uniquely attributable to the brand. Brand equity relates to the fact that 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.

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Building Customer-Based Brand Equity

Brand knowledge structures depend on . . .

The initial choices for the 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 it to some other entities

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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

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Customer-Based Brand Equityas a “Bridge”

CBBE represents the “added value” endowed to a product as a result of past investments in the marketing of a brand.

CBBE therfore provides direction and focus to future marketing activities

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Strategic Brand Management

Strategic brand management involves design and implementation of marketing programs and activities

to build, measure, manage BE

Strategic brand management process involves four main steps:1) Identify and establish brand positioning and values2)  Plan and implement brand marketing programs3)  Measure and interpret brand performance4)  Grow and sustain BE

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Strategic Brand Management Process

Mental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantra

Mixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associations

Brand Value ChainBrand auditsBrand trackingBrand equity management system

Brand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalization

KEY CONCEPTSSTEPS

Grow and SustainBrand Equity

Identify and EstablishBrand Positioning and Values

Plan and Implement Brand Marketing Programs

Measure and InterpretBrand Performance

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New Branding Challenges

Brands are important as ever Consumer need for simplification Consumer need for risk reduction

Brand management is as difficult as ever Savvy consumers Increased competition Decreased effectiveness of traditional

marketing tools and emergence of new marketing tools

Complex brand and product portfolios

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The Customer/Brand Challenge In this difficult environment, marketers

must have a keen understanding of: customers brands the relationship between the two