West, Ford & Ibrahim: Strategic Marketing 2e, Chapter 6

ChapterSummaries
Chapter6BrandingStrategies

Brandingisamajorcomponentofproductstrategy.Theabilitytodevelopandnurtureeffectivebrands
is probably the single most important skill set within the marketers professional toolkit. Brands
communicatevaluableinformationtothecustomer,andathoroughunderstandingofwhatthebrand
signifiestothecustomerisanessentialpartofbrandmanagement.Whateverthecompanydoescan
haveanimpactoncustomerperceptionsofthebrand,andthepotentialimpactofcorporatestrategic
decisionsmustbeassessedparticularlyintermsofconsistencywiththeunderstandingandexpectations
ofthecustomer.
Atabaselevel,abrandiswhatidentifiesthecompanysellinggoodsand/orservices.Itisinformation
laden and helps the consumer make the choice to fill a particular need among a series of similar
offerings.Brandcanbethoughtofashavingavarietyofimportantfacetsthatshouldbeconsideredin
assessing the full nature of the brand. First of all a brand can be thought of as a product. Another
importantfacetofbranddealswiththeconnectionsbetweenthebrandandthecompanywhichcreates
the brand. A third level of branding can be seen in the brand possibly becoming synonymous with a
particular person. The fourth possible level of branding is for the customer to see the brand as a
symbol.
Another interesting aspect associated with brand is the concept of brand equity, defined as a set of
assets(aswellasliabilities)connectedtothenameandsymbolsofthebrandthataddsto(ordetracts
from)thevalueoftheproductorservicetoacompanyand/orthatcompanyscustomers.Thepointis
tocomparebrandassetstobrandliabilitiesandmaintainastrongandviablebrandequityvaluation.
This book is not a basic marketing management book, and as a result, it is important to look at the
strategic issues that surround branding. The important questions that are raised for the needs of
strategicbrandmanagersgiventhePorterfocusthatwehaveadoptedforthisbookare:(1)howcanwe
usebrandstrategytoreduceouroverallcostsand(2)howcanbrandstrategydifferentiateourofferings
andhelptobuildameaningfulrelationshipwiththetargetconsumer?
Firmshavemanydifferentoptionsfacingthemwhenitcomestobrandchoices,anditisimportantto
laythegroundwork.Thebestframeworktodateistheconceptofbrandarchitecture,whichlooksat
the brand portfolio as a complex structure with a variety of different types of brand roles and
relationships.Adescriptionofthevariouschoicesundertheconceptofbrandarchitectureisprovided,
andnumerousmodernexamplesareusedtohighlighttheoptions.Theadvantagesanddisadvantages
ofeachareprovided.Thepointistoprovidethenecessarybackgroundfromwhichtoprovideasuitable
foundationfortherealvalueaddedofthechapter:strategicinsightsfromanarrayofrecentarticles.

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West, Ford & Ibrahim: Strategic Marketing 2e, Chapter 6

StrategicBrandManagement
Strategicbranddecisionscanhaveanimportantimpactonfirmfinancialperformance,andtherearea
numberofwaysinwhichbrandmanagerscanimprovebrandperformancefromacostandprofitability
perspective. Operational efficiencies canbeachievedfromsuchmechanismsasbrandleveraging, co
branding, using new promotional vehicles, and promising new valuation mechanisms. It is also
importantforbrandmanagerstobegintochangetheirtemporalbrandfocusfromshorttermtolong
termasbrandshavebeenfoundtohavebeenweakenedbyconstantpricecuttingandsalepromotions
attheexpenseoflongtermbrandbuildingadvertising.
CostReduction:BrandEfficiencyandBrandProfitability
BrandLeveraging
Strong brands often produce aboveaverage returns for shareholders, and there is great pressure on
brand managers to use the name recognition that accompanies a strong brand to increase potential
salesandprofitsbyattachingthenametoothercompanyofferings(Court,LeiterandLoch1999).What
are the potential advantages associated with brand leveraging? Brand extension is constantly luring
businessestotienewofferingstoexistingbrandssincethenamerecognitionisalreadythere,andthe
costs to build awareness are considerably lower than would be associated with new startup names.
Anotherdrawingpointisthemovementtowardsconvergenceasmergersandacquisitionsarebecoming
more and more commonplace. Another reason for leveraging involves the heavy focus on building
relationships between customers and brands since what the product has in terms of features and
options is not as much an issue as the fact that they emotionally engage with the brand and feel a
kinship. While leveraging can produce economic benefits, there is also a downside to aggressive
leveraging, as was found in the unsuccessful strategies employed by both BIC and Gucci. These
companies were drawn into confusing extensions with product offerings that were inconsistent with
theirflagshipproducts.
CoBranding
Cobrandinginvolvesthebringingtogetheroftwoseparatecompanybrandstobemarketedtogetherto
create a new joint offering with additional value for the customer. Examples would include such
successful pairings as Examples would include such successful pairings as British Airways and Hertz,
Adidas and the New Zealand Rugby Union, Starbucks Coffee and Barnes & Noble Bookstores, and
KelloggsCerealsandWaltDisney.Cobrandingmaybeaviablestrategicoption,butitrequiresacareful
assessment of the potential candidates for partnering. There will be spillover effects that will be
incurred when the brands are combined in an alliance, but much of the potential downside would be
drivenbythelackofcongruenceinimageorfitinvolved(SimoninandRuth1998).

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West, Ford & Ibrahim: Strategic Marketing 2e, Chapter 6

NewBrandValuationMechanisms
Therearethreerecentapproachestoassetvaluationfromafinancialresourceperspectivethatmayaid
brandmanagerstoachievegreaterefficiencies.Oneoftheseinvolvesthemeasurementofadvertising
turnoverandwassuggestedbyHerremans,RyansandAggarwal(2000).Theauthorssuggesttworatios
foranalysistotiebrandassetvaluationtotheefficiencyandeffectivenessofmarketingexpenditures:
advertisingturnoverandbrandROI.Thethirdandlastofthesenewpromisingvaluationmeasuresis
brand health, which was suggested by Berg, Matthews and OHare (2007). The authors found that
many brand managers were making mistakes when approaching brand strength by relying too often
uponproblematicmeasures.
ShortTermPromotionalMistakes
Lastly, in keeping with the issue of brand mismanagement that was raised in the previous section,
furtherproblemswithmismanagementhavebeenidentifiedintheresearchofLodishandMela(2007)
inarecentHarvardBusinessReviewarticle.LodishandMelasuggestthatbrandshavelosttheirluster
for consumergoods companies since they are too focused on shortterm data and are not concerned
about their brands longterm health. They claim that too much reliance on price promotions at the
expenseofadvertisingandlongtermbrandbuildinghasseverelyweakenedanumberofoncepowerful
brands.
Differentiation:ConsumerPerceptionsofBrandandSustainableCompetitiveAdvantage
CustomerBrandInvolvementandPerceptualConnections
Companieshavefoundthatthekeytobrandsuccessistobuildstrongrelationshipswithcustomersby
enhancing customer experiences with the brand, its personality and its heritage (Joachimsthaler and
Aaker1997).Thisinvolvementandrelationshipbuildingcanclearlybeseenininnovativeattemptsto
enhancecustomerexperienceswiththebrand.
BrandPerceptualReinforcementandRevitalization
KevinLaneKeller(1999)suggeststhatbrandmanagementmustalwaystakealongtermperspectivein
terms of brand equity and valuation. Any strategic decisions made in the short term can affect the
futurepotentialofthebrandbyimpactingbrandawarenessandimage.Kellersuggeststhateffective
brandmanagementrequiresalongtermperspectivewithcontinuousreinforcementofbrandmeaning
and, when necessary, brand revitalization. Change for the sake of change has the potential to
undermine the brands position in the head of the consumer. The reinforcement of brand meaning
dependsonthetypesofbrandassociationsintheheadsofbrandconsumers.Revitalizationrequiresa
carefulassessmentofbrandmeaningandassociationssothatmeaningfulrepositioningdecisionscanbe
made.Thisrequirestheimplementationofathoroughbrandaudit.

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West, Ford & Ibrahim: Strategic Marketing 2e, Chapter 6

KeyBrandAssessmentVehiclesforDifferentiationPurposes:TheBrandWheel
Giventhecomplexnatureofbrands,ausefultool,developedbyWard,LightandGoldstine(1999),can
give the brand manager a reasonable view of his or her brand/brands without inordinate amounts of
complicateddataacquisitionandanalysis.Thisisknownasthebrandwheel.Animportantdistinction
heretomakeisthatfeaturesandbenefitsmaycreatepreference,buttheywillnotnecessarilyensure
loyaltytothebrand.Valuesandpersonalityreflectthecharacterofthebrandandthereforeofferthe
potentialforloyalty.
Sowheredoesthebrandmanagergofromhere?Thenewestthinkingpresentsnewopportunitiesin
theformofdevelopingloveforthebrand,creatingenormousbuzzaroundmakingthebrandrelevantin
theformofcool,andsimplifyingthebrand.Thesewillnowbediscussedingreaterdetail.
Lovemarks,Coolbrands,andBrandSimple:theLatestBrandThinking
OneofthemostinterestingnewviewsonbrandingispresentedbyKevinRoberts,CEOforWorldwide
Operations for Saatchi & Saatchi, in his 2004 book, Lovemarks: The Future Beyond Brands and later
enhanced and expanded in his late 2006 book, The Lovemarks Effect: Winning in the Consumer
Revolution. It is Roberts premise that branding itself is flawed since brands are not actually making
strongemotionalconnectionswithpeople.
For strategic positioning purposes, what is particularly relevant in terms of differentiation and
distinctiveness is the buzz that is generated when the brand is considered by the public to be cool.
Thiskindofsocialcachekeepsthebrandtopofmind,andtheimmensepublicityvaluepaysforitself
manytimesoverforthefirmluckyenoughtoattainthisperceptualposition.Toqualifyasacoolbrand,
thebrandmustmeetthefollowingsixcriteria:1)itmustbethoughtofasstylish,2)itmustbeperceived
to be innovative, 3) it must be seen as an original, 4) it must be felt to be authentic, 5) it must be
desirable,and6)itmustbeconsideredasunique.
So, how should these varying brand perspectives and dimensions be handled? Allen Adamson in his
2007book,BrandSimple:HowtheBestBrandsKeepitSimpleandSucceed,suggeststhatthebestbrand
strategiesareonesinwhichthebrandbecomesclearlysynonymouswiththeorganizationandembodies
itsvalues.Adamsonarguesthatbrandsneedtobesimplifiednotcomplicated.

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