Module IV: Nurturing Brand to Grow:

• Understanding & Developing Brand Architecture

• Managing Strategic Branding Issues:– Brand Extension & Brand Revitalization– Corporate & Internal Branding– Managing Global Brand

Module IV: Nurturing Brand to Grow

Branding Strategy or Brand Architecture:

“The number and nature of

common and distinctive brand elements

applied to the different products sold by the firm”

Soap Talcum Deo Cold cream

Lux

Liril

Ponds

Palmolive

Products Br

ands

Brand-Product matrix

Rows (Brand Line)

Brand portfolio strategy

Columns (Product Line)

Brand extension strategy

Breadth of a Branding Strategy

The number and nature of different products linked to the brands sold by a firm

Aggregate of market factors Mkt size Mkt growth Stage of PLC Seasonality Profits

Category factors

Porter’s five forces

Category capacity

Environmental factors Technological Economic Political Regulatory Social

Breadth of Product Mix: How many product lines a company should carry ?

Factors effecting Product category

attractiveness

Breadth of a Branding Strategy (Contd.)

Depth of Product Mix: How many variants should be offered in each product line ?

Issues in deciding no. of Product lines

Understanding of the market Cost interdependence between products

% of sales and profits contributed by each item or member of the product line

The ability of each item in the product line to Withstand competition Address consumer needs

Length of the product line

Depth of a Branding Strategy

Number and nature of different brands marketed in the product class sold by a firm

Why multiple brands?

To pursue multiple market segments & larger mkt. coverage

To increase shelf presence and retailer dependence in the store

To attract customers seeking variety

To increase internal competition within the firm

To yield economies of scale in adv., sales and distribution

Maximise market coverage, minimise brand overlap

and optimize the product portfolio

Brand hierarchy

Means of summarising the branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products revealing the explicit ordering of brand elements.

The simplest representation of a Brand Hierarchy from top to bottom is as follows:

Corporate ( or company ) brand.

Family Brand eg: Colgate

Individual Brand eg:Lux

Modifier( designating item or model) eg. Pentium PI, PII, PIII…

Special role of brand in brand portfolio

Special role of brands in

a brand portfolio

Serve as a flanker and

protect flagship brands

Serve as a cash cow and

Milk for profits

Serve as a lower end entry level product

to attract a new customer to the brand franchisee

Serve as a high end prestige product

Phillip Morris

Gillette

Mercedes

Toyota

Designing a Branding StrategyG

uide

lines

for b

rand

hie

rarc

hy

Decis

ions

The no. of levels of the hierarchy to use in general Principle of simplicity: As few levels as poss.

Desired awareness and associations at each level Principle of relevance: Create abstract associations that are relevant across as many individual items as possible Principle of differentiation: Differentiate individual items and brands

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

How to link a brand across products? Principle of commonality: The more common elements shared by products, the stronger the linkages

Strategies for Growth

Introduce New Products Explore New Markets

New Brand Existing Brand

Line Extension Category Extension

New Products & Brand extensions

Brand StrategiesBrand Strategies

Line Extension

Multibrands

Brand Extension

New Brands

Bra

nd N

ame

Existing New

Product Category

Existing

New

• Brand equity is reinforced by marketing actions that consistently convey the MEANING of the brand to consumers in terms of BRAND AWARENESS and BRAND IMAGE.

• Reinforced marketing actions, along with product development, branding strategies etc. also help in keeping the brand meaning in terms of products, benefits and needs as well as in terms of product differentiation intact.

Reinforcing brands…

Reinforcing depends on nature of the brand associations

• Product related performance associations

Product innovations are critical.

Change in product may not be drastic, as brand meaning may be associated with the product characteristics.

• Non-product related imagery associations

Relevance in user and usage imagery is critical.

Potentially easier to change through major advertising campaigns (no product innovation may be involved).

Too frequent repositioning can blur the image of the brand and confuse or even alienate the consumers.

Reverse Fortunes of Brands

Recapture lost sources of Equity

Identify and establish new

sources of Brand Equity

Approaches to Re-vitalization

1. Expanding Brand Awareness

2. Improving Brand Image

3. Entering New Markets

Approaches adjustment to brand portfolio

1. Migration Strategy

2. Acquiring new customers

3. Retiring Brands

Quick Revisit

What is a brand?

A brand is a name, term, sign, symbol, or design,A brand is a name, term, sign, symbol, or design,

or a combination of them,or a combination of them,

intended to identity the goods or servicesintended to identity the goods or services

of one seller or group of sellersof one seller or group of sellers

andand toto differentiate them from those of competitorsdifferentiate them from those of competitors

- American Marketing Association- American Marketing Association

A sum of parts

Functional ProductAttributes

Symbolic Values & Associations

Rational (Head) Emotional (Heart)

The Brand

+

Four characteristics

Difference

Clarity

Consistency

Leadership

Brand Identity (Kapferer’s Prism)

BRAND IMAGE: the way of thinking by a consumer about the brand and the feelings the

brand arouses when the consumer thinks about it

• Life style

• Expectation

• Experience

• Disposition

• Differentiation

Brand Positioning• Define competitive frame of

reference– Target market– Nature of competition

• Define desired brand knowledge structures– Points-of-parity

• necessary• competitive

– Points-of-difference• strong, favorable, and unique brand associations

Your Brand’s Genetic Code: BRAND DNA

•Every great brand has substance. a brand’s DNA is timeless. a brand’s blue print is a unique set of values that originally defined them. Great brands can remain relevant through creativity.•A brand’s DNA is not strictly about the product, service, the past or even about research -- its about tapping in to an essence or story that defines who you are to the people that matter most, your core customers.•What Do You Stand For?

- Brand Names

Logos and Symbols

- Characters:

- Benefits

- Cautions

- Slogans

- Benefits

- Designing Slogans

- Updating Slogans- Jingles BRAND_VIDEO CLIPS\Hutch song.mp3

- Packaging

- Benefits

- Package design

- Packaging changes

Criteria1. Memorabiltiy

• Easily recognized• Easily recalled

2. Meaningfulness• Descriptive• Persuasive

3. Likability• Fun and interesting• Rich visual and verbal imagery• Aesthetically pleasing

4. Transferability• Within and across product categories• Across geographic boundaries and cultures

5. Adaptability• Flexible• Updateable

6. Protectability• Legally• Competitively

Leveraging Secondary Brand Leveraging Secondary Brand Knowledge to Build Brand EquityKnowledge to Build Brand Equity

•Brands may be linked to other entities that have their own knowledge structures in consumer minds•Means of reinforcing existing associations in a fresh and different way •very important aspect if the existing brand associations is deficient in some way

Customer Based Brand Equity (CBBE): Keller

The Brand Value ChainMarketing Program

Investment

Customer Mindset

Market Performance

Shareholder Value

Program Quality

Market place

Conditions

Investor Sentiment

Multiplier

Value

Stages

•Awareness•Associations•Attitudes•Attachment•Activity

•Product•Communication•Trade•Employee•Other

•Price premium •Price elasticity•Market share•Expansion success •Cost structure•Profitability

•Stock prices •P/E ratio •Market capitalization

•Market dynamics •Growth potential • Risk Profile•Brand contribution

•Competitive reactions•Channel support•Customer size and profile

•Clarity•Relevance•Distinctiveness •Consistency

BRAND_VIDEO CLIPS\Lufthansa Brand Movie_vcd0.mpg

BRAND_VIDEO CLIPS\Performance Review IKEA 2009.flv

BRAND_VIDEO CLIPS\Global Brands Lose Value as Economy Suffers.flv

BRAND_VIDEO CLIPS\Recap - Intel's Shareholder Meeting - Bloomberg.flv

Key Metrics: Consumer Based

Brand Persuasion =Ratio of Intention to Purchase Brand/ Spontaneous Brand Recall

Brand Pull =Ratio of Likely Switch-ins to the Brand / Likely Switch-outs from the Brand

Brand Loyalty = Ratio of Likely to Continue Buying the Brand / Total Current Users of the Brand

Secondary Brand Share = Total Current Users of the Brand / Total Current Users of the Category

Primary Brand Share =Preferred Current Users of the Brand / Total Current Users of the Category

Discounted Cash Flows Method:

Value of Brand =

Where = Anticipated Revenue in year t attributable to the brand

r = Discounting rate or WACC (Weighted average cost of capital)

= Residual Value after n (year)

rRBrRB nt

t /)1(/(

tRB

nRB

For Example:

•Brand A had revenues of Rs 600 crores ( 2009).•The Brand A is expected to grow at around 10% per annum for the next five years.•The Discounting rate is taken at 12 %.•The period when the brand is expected to operate status quo is assumed to be the next five years

The Interbrand method for valuing brands:

BrandAsset® Valuator

Leading

Brand Strength

Differentiation Relevance

Lagging

Brand Stature

Esteem Knowledge

A Two Dimensional Framework for Diagnosing Brands: The

Power Grid

Soap Talcum Deo Cold cream

Lux

Liril

Ponds

Palmolive

Products Br

ands

Brand-Product matrix

Rows (Brand Line)

Brand portfolio strategy

Columns (Product Line)

Brand extension strategy

Brand hierarchy

Means of summarising the branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products revealing the explicit ordering of brand elements.

The simplest representation of a Brand Hierarchy from top to bottom is as follows:

Corporate ( or company ) brand.

Family Brand eg: Colgate

Individual Brand eg:Lux

Modifier( designating item or model) eg. Pentium PI, PII, PIII…

Strategies for Growth

Introduce New Products Explore New Markets

New Brand Existing Brand

Line Extension Category Extension

New Products & Brand extensions

Reverse Fortunes of Brands

Recapture lost sources of Equity

Identify and establish new

sources of Brand Equity

Approaches adjustment to brand portfolio

1. Migration Strategy

2. Acquiring new customers

3. Retiring Brands