Brand Management 3.0 MBA Class Notes: DR Amit Rangnekar

Brand Management- MBA Notes- Dr Amit Rangnekar
Brand Management 3.0

MBA Class Notes
Dr Amit Rangnekar
amitrangnekar@gmail.com
For MBA Class Notes and Case study presentations on
strategic management/ brand management/ marketing management, visit
www.dramitrangnekar.com
www.dramitrangnekar.com 1 amitrangnekar@gmail.com
About the Author
Dr Amit Rangnekar, MBA (Marketing) and PhD (Business Strategy)

from NMIMS, Mumbai, has over 2 decades of progressively
responsible pharma industry experience with Centaur
Pharmaceuticals. In 2006 Dr Rangnekar was awarded a 10 nation
scholarship to Europe by the Government of Denmark to complete
his doctoral research. His co-authored book "Cases in Indian
Management" was launched in Mumbai, Dubai and London in 2008.
Embarking onto teaching as a hobby in 2003, Dr Rangnekar is a

visiting faculty at Mumbai's leading B-Schools. His repertoire of insightful notes and compelling
case studies have added value to over 10,000 MBA students. He shares his thoughts and
knowledge with a global audience through his immensely popular website and blog, which have
together clocked over 900,000 hits.
Dr Rangnekar has presented on various business case studies on marketing, branding and
business strategy, at B-schools and corporates across India and Europe. He has been a faculty at
global leadership programmes of numerous Fortune 100 companies in Europe and Asia. He is also
an external guide for two PhD research scholars.
Co-ordinates Email amitrangnekar@gmail.com , amit@dramitrangnekar.com
Visit www.dramitrangnekar.com … the homepage for MBA students worldwide
Home What's New MBA Notes Case Study PPTs Knowledge Publications Contact Me
Concise class notes on marketing, branding and strategic management

 Researched Case studies in power point presentation (ppt)
 Tips on PhD, Pharma and deliverables
 Various publications of the author, Insights into pharmaceutical industry
Notes adapted through readings, cases and notes from- Harvard Business School/ Review, Ivey,
Stanford, Kellogg, MIT Sloan, LBS, Insead, Wharton, Emory; publications by Porter, Kotler,
Keller, Kapferer, Nirmalya Kumar & Mckinsey; Economic Times, Indian and international
business magazines, and the internet. Garnished with my own experience, insights & knowledge.
Objective: Help students understand the concepts of brand-development/ management/ building,

and crafting the brand strategy, through interaction and cases.
Evaluation (%): Group Presentations 40%, Class Participation10%, Final Exam 50% = 100%
Course Outline: (Total 30 Hours)

Topics Pg
1 Analysing- Environment, Competition, Market opportunities, Gaps, 3
2 Product- concepts, packaging, brand hierarchy 7
3 New Product Development 9
4 Brand management - Concept, Associations, Company‘s/ Customer‘s brand decision 11
making, Brand Personality, Keller‘s CBBE, Brand Value Chain
5 Brand positioning strategy, Frame of reference 18
6 Brand Identity- concept, execution, Kapferer‘s Prism, Brand Identity Planning Model 23
7 Brand Architecture & portfolio management 27
8 Brand Equity- 34
9 Brand valuation 41
Cases from among (Most cases available on www.dramitrangnekar.com)

Adidas v Nike- Brand Identity Dolce & Gabbana- Fashion Brand Parle G- Brand Building
Aircel- Service Branding Dominant Brands Rolex- Luxury Branding
Amar Chitra Katha- Kid Brand Gillette- Brand Extensions Tata Nano- NPD
Amul- Umbrella Branding Horlicks v Complan- Brand Equity Titan- Brand Architecture
Audi- Brand Identity Kellogg- Brand Valuation Vodafone-Speed Branding
Bisleri- Brand Building Kellogg- Brand Failure Wipro- B2B Branding
Chanel- Branding to ladies Mont Blanc- Luxury Branding ZooZoos- Brand Campaign
Chic Shampoo- Rural Brand Natural Ice Cream- Buzz Branding Kancheepuram Sari- Ethnic
References
Brand Management Notes www.dramitrangnekar.com Brands & Branding- The Economist
Strategic Brand Management- Keller 3e / Kapferer 4e Marketing Management- Kotler 13e
Brand Equity- Aaker, Brand Leadership- Aaker Asian Brands- Martin Roll
Websites- Mckinsey Quarterly, Harvard Business school, India knowledge @ Wharton
Notes adapted through readings, cases and notes from- Harvard Business School/ Review, Ivey,
Stanford, Kellogg, MIT Sloan, LBS, Insead, Wharton, Emory; publications by Porter, Kotler,
Keller, Kapferer, Nirmalya Kumar & Mckinsey; Economic Times, Indian and international
business magazines, and the internet. Garnished with my own experience, insights & knowledge.
Best Wishes
Dr Amit Rangnekar
www.dramitrangnekar.com
1 Analysing market opportunities

Strategic gap analysis
Intensive Growth Strategies

Ansoff’s Product-Market Expansion Grid- Case- Maruti Suzuki
Current Products New Products

Current Market Penetration Product Development
Markets Launch 800, grabbed market share New models Van, Zen, Esteem, Wagon
on styling, fuel economy, affordability R, Baleno, Swift, SX4
New Market Development Diversification
Markets Launch in class II-IV towns, easy loans, Training schools, Auto insurance, True
higher payback periods Value cars,
Integrative growth- Vertical-Backward (Reliance- Polyesters), forward (Videocon-Next),

Horizontal- M&A (HLL-Lakme)
Diversification growth- Reliance Retail
BCG Matrix- Growth Share Matrix- Case

Classifies product portfolio into categories, firms should have a healthy balance.
Dogs- Low market share & low market growth. Phase out / tweak, invest & build Question
Mark/Problem Child- Low market share, operate in high market growth. Entry level, brand may
ascend / descend / stagnate- important to build.
Star- High market share, operate in growing market. High growth but high promotional cost, need
to be sustained.
Cash Cow- Mature products generate high cash, but low growth. Sustain, they generate funds for
new projects and maintaining portfolio.
Strategic Marketing Environment
Marketing Plan
A marketing plan aims to help organize and implement the marketing strategy for its products or
services. Part of the overall corporate objectives.
Situation Marketing Marketing Execution

Analysis Objective Strategy Control
Mktg Research
Corporation Leadership Segmentation Projections
Customer Rank Targeting Orgl Structure
Competition Geographic Positioning Implementation
Conditions Share Differentiation Performance
Opportunities Profits Mix- 4Ps Review
Dynamics Growth Prod Life Cycle
Where do we Where are How do we Are we getting

want to go? we? get there? there?
Competitive forces Barriers & profitability
Analysing Competition:
Industry structure Consolidated / fragmented, Monopoly/ duopoly/ oligopoly,
Market structure Leader, challenger, follower, nicher
Broad competition
Generic competition
Direct competition
Lines Broad / narrow
Competitor rating on critical success factors

Competitor Awareness Quality Availability Range Technology Service
A
B
C
Key variables in analyzing competition:

 What segments do they serve?
What products do they offer?
What channels do they use?
What pricing strategies have they pursued?
What management resources do they have?
What financial resources do they have?
What are their objectives?
What are their core competencies?
What alliances are they pursuing, and for what purpose?
How successful are they in the marketplace?
 Share of market /voice /mind /heart?
Competition
Direct Indirect
Category Need Brand Product Generic
fulfilled Competitors Competitors Competitors
Basic requirement Market products similar Compete in same Market different
customer features, class, but differ in products to solve same
benefits & price features, benefits & problem, satisfy same
price basic need
Beverages Refreshment Coke, Pepsi Tea, Nimbu Pani Regular water
Thums Up Mineral water
Chocolates Dessert/ Dairy Milk, 5Star Mithai, Namkeens Aniseed/Saunf Candy,
snack Celebrations Ice creams, Fruits Sugar
Films Entertainment PVR Single screen TV, Shopping
Fame Adlabs Drama theatre Reading, Internet
Cars Transportation Maruti, Hyundai Small cars, Big cars, Taxi, Auto, BEST,
Tata SUVs Local train, Walk
2 Product
―We lead the public with new products than ask them what products they want. They don‘t know
what‘s possible, but we do. So instead of doing a lot of market research, we try to create a market
for a product by educating them‖ (Akio Morita, Sony)
 Product- offered to satisfy a want or need. Judged on features, quality, services mix and price.
 Product differentiation- Choice of form, features, performance quality, conformance quality,
durability, reliability, repairability, and style. PQRSTUV
 Services differentiation- Ordering ease, delivery installation, customer training, customer
consulting, maintenance and repair
 Convenience items purchased frequently, immediately, with minimum effort.
 Capital goods last long and are purchased infrequently by consumers.
 Commodities- where physical differentiation is difficult
Exercise- 3 examples of products performing at exceptional levels despite intense competition

Exercise- Select 1 convenience & 1 capital good, compare & contrast consumers value hierarchy.
Product Strategy-Coordinate product mix/lines, brands, packaging & labeling- decisions
Product Levels: The Customer Value Hierarchy

To plan the market offering, a marketer must consider 5 product levels that encompass the
augmentations & transformations the product ultimately undergoes. Each level adds more
customer value, the 5 levels constitute a customer value hierarchy.
Product What it means Marketers Job Hotel ITC
Levels Customer Hotels
Core Product bought Provide benefits Place to sleep
Basic Benefits Turn benefit to product Bed, bath, closet Budget-Fortune
Expected Attributes & Minimum buyer expectations, price, Clean bed & 5-Star- Welcome
conditions convenience, location- important (EM) toilets, peace
Aug- Exceed Augmented benefits become expected Satellite TV, Super deluxe -
mented expectations benefits, competitors step in- important Tea machine, ITC
(developed markets) Internet
Potential New ways to Anticipate & innovate Customised Welcom Heritage
satisfy/differentiate service Palaces, forts
Product Mix - HUL Portfolio- Consumer Product-Mix Width

 Product line- group of brands closely related by functions & benefits- Dell PC, Nokia mobiles
 Product mix- total set of brands marketed by a firm, may contain product lines
 Width- product lines in the mix- HP PCs, Laptops, Printers within home & business segments
 HUL 11 lines (Personal wash, laundry, skin care…….)
 Length- total number of items in the mix- 25, average length is 25/11 = 2
 Depth- Variants of each product in the line- Lux has 4 fragrances and 2 sizes, so 8
 Deciding which product lines to grow, maintain, harvest, and divest?
Home & Personal care Foods
Deodorants
Ice cream
Hair care
Oral care
cosmetics
Skin care
Laundry
Personal
Colour
Coffee
Foods
wash
Tea
Product Lux Surf Fair Sunsilk Pepso- Axe Lakme BB Bru Kissan Kwality
line Lifebuoy Excel & Natural dent Rexona Lipton Knorr Walls
Liril Rin lovely Clinic Close Anna-
Length Hamam Wheel Ponds Up purna
Breeze
Dove
Pears
Rexona
Product line strategy

 Upgrade customers - Maruti 800, Alto, Zen , Wagon R
 Cross-sell- HP printers, PC & Laptops, Godrej- Washing machine, TV, fridge, microwave, AC
 Line-stretch- popular(Titan), mass(Sonata), premium(Xylys), youth (Fastrack), ethnic (Raga)
 Line fill- Maruti variants AX, LX, VX; I-Pod- nano, shuffle, classic, 80/40/20/8/4gb
 Line prune- Reduce unwanted / unprofitable- Maruti Gypsy
Packaging and labeling- The 5th P, part of product strategy

Packaging- 3 levels: Primary, Secondary, Shipper, Insert
 Promotional value- packaging is buyer‘s 1st product encounter- can turn on or off
 Functional components- protection in transportation & storage, usage, convenience, ease of use,
storage, convey usage information & instructions
 Aesthetic components- Design, size, shape, material, color, text, graphics- harmonizing
Labeling- Identifying product or brand, grading, describing the product, adhering to regulatory
requirements, promote through attractive graphics.
Warranties & Guarantees- Expected product performance level by manufacturer, reduces a
buyer‘s perceived risk, helps when not so well-known product‘s quality is superior to competition.
A Brand Is More Than a Product
3 New Product Development (NPD)
NPD- risky but if based on a sound foundation- market segmentation, understanding and targeting
customers - reduces risk. If NPD is first and then you figure out how to market, it usually leads to
disaster. Exception- Alexander Bell invented the Telephone, but it was an innovation. Today- NPD
compete with similar products /effective substitutes and customers are spoilt for choice as well as
bombarded by product and marketing messages.
New Products Types – Breakthrough or incrementally altered products

Breakthrough Incremental
 New to the world performance features  Improvement in existing product
 Huge advances in performance  Derivative of existing platform
 Dramatic cost reduction  Exploits existing forms / technology
Higher risk Lower risk
Infrequent More frequent
Costlier Less costly
Targets new /existing markets Targets existing/ adjacent markets
Marketer’s responsibility
 Envision market  Listen to existing market
 Create demand  Accommodate current demand
 Educate market
Change the basis of industry competition:  Intel‘s Pentium IV computer chip- incremental
• Electric lighting, antibiotics, microwave, improvement over Pentium III as they share same
credit card, transistor, heart pacemaker, hip fundamental technology
and knee replacements, GPS  Incorporated design improvements that enhanced
chip performance
 Windows, MS Office, Play station
Exercise: Course of NPD in your industry over L10Y- what changed the basis of competition, what
were the real breakthroughs, which were only incremental? What are the new technologies /
products lined up, how will they affect your company and competitors when launched, in terms of
sales and profitability?
Identifying new product opportunities
Unexplored
Opportunities
Exercise: For an industry of your choice, identify the unexplored opportunities in every quadrant,
and identify the players who operate in each quadrant.
New product development (NPD) Stages

 Idea generation- Employees, Sales force, Trade, Competitors, Customers
 Idea screening- Feasible, Workable, Practical
 Concept development and testing- Feedback from target audience
 Marketing strategy- Mix (4Ps), STPD, Targets, Projections, Geographies
 Product development- Final touches & Mfrg
 Test Marketing- Geography or Segment
 Commercialisation- National / Global launch
Why new product development (NPD)

 Changing customer needs – Diet Coke, Saffola
 New Segment Entry- Maruti SX4
 Changing market needs- Scooters to Bikes
 Own successes- Brand / line extensions- Maggi
 Competitive Successes- Krackjack- 50:50, Marie
 New Capabilities- UB Group
 New Concepts- Suzuki Swift, Tata Ace / 1L Car
 New technology- I-Pod, I-Phone, TV
 Product lifecycle- MS Office, Play Station 1,2,3
 Portfolio / Business realignment- Reliance Mobile
 Environmental changes- Music downloads
Source: Harvard Business Review
4 Brand Management
Brand
 ―Promise‖ Harish Bijoor
 ―Strategic Asset‖ Nirmalya Kumar
 “Functional, Economic & Emotional Value Propositions” –Deepak Jain
 “A collection of perceptions held in the mind of the consumer” Susan Fournier
 “A name, term, sign, symbol or design, or their combination, intended to identify goods &
services of a business or group of businesses and differentiate them from competitors” Kotler
 “A mixture of tangible and intangible attributes symbolised in a trademark, which, if properly
managed, creates influence and generates value” Interbrand
Brand exists in our mind, as a collection of associations or feelings. Branding endows the product
with the power of a brand by creating signals that generate these associations. Blend tangible and
intangible attributes to differentiate in an attractive, meaningful and compelling way that target
consumers care about. Brands command premium, high margins, better availability & wide
customer loyalty. Products deliver series of core benefits to consumers (Watches- time) but
consumers pay a premium for added value (lifestyle accessory) that enables a brand to differentiate
itself from competition. This helps a customer choose or prefer the brand. Mercedes, Sony, Apple.
US brand leaders in the 1930s- J&J, Heinz, Colgate, Disney, Coke- are leaders even today
Company’s brand decision making: To Brand or Not to Brand?
Brand associations
The brand stays as a set of associations in the mind of the customer eg Amul may mean- Indian,
butter, milk, cheese, co-operative, value, or even the ads. These associations are stored as links to
the brand that include the brand, company, category, visuals, celebrity, design, usage experience,
feelings. These links help the customer prefer a brand over competitors but a negative link can be
disastrous for the brand. Eg Cadbury is generic in India for milk chocolates and common
associations could be dairy milk, taste, value, satisfaction, international quality etc but the negative
association of the worm-controversy hurt the brand.
Creating a solid network of associations helps create a strong brand preference, where the
customer demands for a brand and also knows what to expect with the brand. If the brands delivers
on expectations, brand credibility builds up which helps deter competition and brand switching. Eg
Titan, Nokia, Amul, Levis, Santro
Customer’s brand decision making (Buying a Shirt upto Rs 1000)

Brands
Unknown Known
Manzoni, Louis Phillipe, Van Heusen, Arrow, Color Plus, Peter England, Dockers, Charagh
Pedroni, Din, Oxemberg, Indian Terrain, Zodiac, Austin Reed, Allen Solly, JohnPlayer,
Zegna, Armani, M&S, Wills LS, Park Avenue,
Acceptable Unacceptable Indifferent Overlooked

Louis Phillipe, Van Heusen, Cambridge, Peter Allen Solly, CD, Armani, M&S,
Arrow, Austin Reed, England, Oxemberg Dockers, Indian Wills, Zodiac,
JohnPlayer, Terrain Color Plus, Arrow
Purchased Not Purchased

Van Heusen Louis Phillipe, Arrow, Austin Reed, JohnPlayer
The company‘s marketing efforts are focused on pushing the brand first into the known stage and
then to take it up to the purchased stage. Surrounding the consumer with the right kind of links in
an associated network, created through brand experiences and marketing communication helps
form thoughts, feelings, images, beliefs, perceptions, opinions, and preferences. These links form
strong associations deep into the mind of the customer which drives purchase preference.
Exercise: Create a customer’s brand decision making model and a company’s brand decision
making model for a company and a category, similar to the illustrations above
Brand Personality
 Brand Personality (Aaker)- Consumers perceive brand‘s personality in terms of human
personality traits. Like human relationships, as brands grow, emotional dimension dominates.
 Consumers easily attracted to brand personality traits- dependability (LIC), trust (Tata), honesty
(Peter England), reliability (Titan), safety (Volvo), fun (Disney)
 Exercise- Identify brands with personality-sincere, sophisticated, cheerful, old fashioned,
progressive
Brand Personality Drivers
Product related characteristics Non Product related characteristics
Product category (Bank) User imagery (Levi's 501)
Package (Bisleri, Parle-G) Sponsorships (Rolex, Femina)
Price (Rolls Royce, Louis Vuitton, Big Bazaar) Symbol (Marlboro Country)
Attributes (Kingfisher Beer) Ad style (Obsession, Absolut)
Country of origin (Audi)
Company image (The Body Shop)
CEO (Vijay Mallya, Steve Jobs)
Celebrity endorsers (Aircel Dhoni)
A Brand Personality Scale (BPS): The Big Five

Sincerity Raymond, Hallmark, LIC, Parle-G, Rolex
Down-To-Earth family-oriented, small-town, conventional, blue-collar
Honest sincere, real, ethical, thoughtful, caring
Wholesome original, genuine, ageless, classic, old-fashioned
Cheerful sentimental, friendly, warm, happy
Excitement Porsche, Absolut, Benetton, Virgin, Kingfisher
Daring trendy, exciting, off-beat, flashy, provocative
Spirited cool, young, lively, outgoing, adventurous
Imaginative unique, humorous, surprising, artistic, fun
Up-To-Date independent, contemporary, innovative, aggressive
Competence Titan, Fedex, Dabbawallas, IBM, Moov, Nokia
Reliable hardworking, secure, efficient, trustworthy, careful
Intelligent technical, corporate, serious
Successful leader, confident, influential
Sophistication Lexus, Mercedes, Revlon, Apple,
Upper Class glamorous, good-looking, pretentious, sophisticated
Charming feminine, smooth, sexy, gentle
Ruggedness Levi's, Marlboro, Nike, Woodland, Enfield Bullet, Tag Heuer
Outdoorsy masculine, Western, active, athletic
Tough rugged, strong, no-nonsense
Brand personality of 2 brands competing in premium vodka market for decades

 Both are expensive, high quality, and pure yet have different personalities
 Stolichnaya as a person is experienced, self assured and successful in a traditional career- law,
banking. He is male, recognizes quality, drives a Lexus, and follows the latest trends
 Absolut person is younger, more contemporary and flashier. He is also male, works in a creative
occupation- advertising or arts, more likely to go to trendy bars
 For both, brand personality is the glue that holds together the identity and communication effort.
How does Brand Behaviour speak for Brand Personality

Brand behaviour Personality traits Brand
Frequent changes- position, product forms, symbols, Flighty, schizophrenic Coke India
advertising, etc.
Frequent deals and coupons Cheap, uncultured Big Bazaar
Advertises extensively Outgoing, popular Nokia, Airtel
Strong customer service, easy-to-use, etc Approachable Maruti
Continuity of characters, packaging Familiar, comfortable Parle-G
High price, exclusive, ads in upscale print Snobbish, sophisticated Rolex
Friendly advertising, endorsers Friendly Disney
Association with cultural events Culturally aware Times of India
 Brand identity- add personality, set of values, perceptions and brand aspirations… all the
pieces converging. Swoosh replaces Nike brand name, Coke slanted flourish, Mont Blanc star
 Brand image- Sum total of consumer perceptions, firms fit perceptions to communication-
Swatch trendy, Nokia value, Titan performance, Volvo safe
 Corporate identity- Visual aspects/image of firm's presence-eg logo, collaterals-Tata
 Brand repositioning- customer preferences change- Petrol pumps, typical to vibrant
Customer Based Brand Equity Pyramid- Keller (Brand Resonance Pyramid)

 Brand resonance characterized by strong brand & consumer connect, thro‘usage & experience
 Strong resonant brands- increased loyalty & decreased vulnerability to competitive actions
 Brand challenge- ensure right customer experiences to create right brand knowledge
 Brand equity- customers develop differential towards a brand hence prefer it over others
 Understanding differential critical to interpret the past, design effective future programmes
Building resonance involves a series of steps

 Identity- Who are you- consumers begin to understand what a brand stands for, means
 Meaning- What are you- consumers link in/tangible associations, understand PoD & PoP
 Response- What about you- judge brands on credibility, expertise & trustworthiness
 Relationships- What about you and me- How to connect, create intense, active loyalty
Building blocks- structure to build brands with customers

 Salience- consumer‘s brand recall in a purchase situation- depth & breadth of brand awareness
 Performance- What a brand does to meet customers' functional needs- intrinsic properties
 Imagery- Think abstractly than physically about brand, intangibles- extrinsic brand properties
 Judgments- Customer brand evaluation (performance+ imagery association)- brand opinions
 Feelings- emotional brand response/ reaction (mild/intense; +/-, or experiential / enduring)
 Experiential feelings (warmth, fun and excitement)- immediate & short-lived
 Enduring feelings (sense of security, social approval, self-respect), private, of day-to-day life
Resonance- Intense, active loyalty- customers feel a connect to brand, will miss it if it went away
 Nature of relationship, extent to which customers feel they are ―in sync‖ with a brand
 Behavioural loyalty- repeat purchase rates
 Attitudinal attachment- intensity or depth of psychological bond customers have with a brand
 Active engagement- level of activity engendered by this loyalty
 Sense of community- extent to which customers seek brand info, events, loyal customers
Brand Value Chain (Kevin Keller)

Helps assess financial return of developing the brand through 4 stages. Some relationships have not yet
been directly measured, but are important to consider when valuing a brand.
 The value stages lead to shareholder value driven by multipliers, or filters, between the stages
 Multipliers are factors that influence impact of one stage on the subsequent stage.
 Marketing program investment in product, employees, advertising affect future brand value
 Program quality- ad distinctiveness, service consistency determine how much the first stage
influences the second stage
 Customer mindset, includes 5 A‘s, hierarchical in nature- awareness supports consumers‘
brand associations, which drive attitudes, which lead to attachment & ultimately activity
 Market condition multipliers translate the 5 A‘s to brand value
 Market performance measures brand performance in the marketplace through price premium
and elasticity, market share demonstrates brand‘s ability to drive sales, expansion success is
brand‘s opportunity to increase revenue streams & lower costs- all lead to brand profitability
 These lead to shareholder value, driven by investor sentiment based on market forces like
growth potential & risk profile which can affect the evaluation.
 Shareholder value is attained through stock price, PE ratios & market capitalization
 Together, these stages allow brand value evaluation & suggest areas of improvements
Brand knowledge
Brand knowledge creates a differential that drives brand equity. If customers carry strong, unique,
favourable brand associations in mind, strong brand is built due to high brand awareness & +ve
brand image. This convinces a customer of meaningful and valuable difference in one brand and
compels him to prefer it over others.
Cognitive brand dimensions

Dimension Meaning Company / brand
Brand weight Brand dominance in a market Microsoft, J&J baby, Dettol
Brand length Brand ability to diversify across categories Disney, Virgin, Tata
Brand power Loyalty of the customer group Apple, Harley Davidson, Old
Monk
Brand breadth Brand appeal across customer groups Coke, Parle G, Amul Butter
4Cs to create positioning

Company Customer
What to offer and communicate To whom
Channel Competitor
Where to sell it Differential
5 Brand Positioning
Brand Positioning- Design firm‘s offering & image to occupy distinct place in target customer‘s mind
 Represent a distinctive big idea in the mind of the target market
 Identify different needs & groups in the market (segments)
 Target groups/markets it can satisfy in a superior way (targeting)
 Locate brand in the minds of consumers (positioning)
 Communicate (promotion) a value proposition to the target market that is distinctive, valuable
& meaningful (differentiation)
Brand Ladder (How does a

brand get into customer‘s mind)
 Promise- Value proposition
offered to customers, choice
 Affinity- Interest in the brand,
differentials evident
 Brand Bonding- Perceived as
delivering on promise
 Loyalty- +ve differential
effect driving customer brand
preference over identical
competitive brands, willing to
pay more /wait/ go places if
unavailable
 Brand Equity- Brands financial value to the firm, includes sum total of factors besides sales.
From a customer‘s perspective, the reason why he chooses that brand over competition
 Promotional strategies revolve across various brand purchase stages
Crafting the brand positioning

Positioning requires determining a competitive frame of reference. The frame defines associations that
consumers use to evaluate directly and/or broadly competing brands, as under:
1. Identifying the target market(which brand for which market)
2. Understanding consumer behavior and their considerations in choosing brands- price points,
culture, buying patterns, attitudes, preferences.
3. Nature of competition (direct, indirect, PLC stage, intense, consolidated, fragmented)
4. Points-of-parity (pop) associations- which consumers view as essential to be a credible offering
in a certain product category. Shared values between brand & competitors, common
denominators defining the category. They represent necessary conditions but not necessarily
sufficient for brand choice.
5. Points-of-difference (pod) brand associations- attributes/benefits consumers associate with a

brand, positively evaluate & believe they cannot find to the same extent with other brand.
6. Reason to Believe (RTB)- Why should a customer buy your brand- company consistency,
credibility, heritage, innovation legacy, country of origin etc
Choosing POPs and PODs

 POP driven by category membership needs, to achieve an attribute or benefit POP, consumers
must believe brand is ―good‖ on that dimension, key is perception of clear superiority.
 Category POP change over time due to technology, legal, trends. Eg HTC v IPhone.
 Competitive POP- to negate competitors POP. HTC‘s features similar to IPhone helps position
it as an IPhone competitor at a much lower price, which otherwise was difficult to command.
 Creating strong, favorable & unique POD associations essential to competitive positioning.
Apple innovation, Parle- G value, Tatas- trust, Maruti- Service, Dabbawallas- reliability.
 POD should be desirable & relevant to consumers, which firm should be capable of delivering,
communicating and sustaining. Marketers should decide level(s) to anchor the brand‘s POD-
lowest - brand attributes, Mid- brand
benefits, Top- brand values.
Creating POPs and PODs

The mental map shows Nike‘s range of brand
specific and category specific associations,
 Nike- PoD are MJ, Air & Basketball
 Adidas- PoD is Top athletes
 Reebok- PoD is Tennis
 All other associations are category PoPs
Exercise- How Should Maruti position itself with respect to the Tata Nano?
Exercise- POPs & PODs for Apple i-Phone, Rs 5000 mobile phone
Executing the brand positioning
 Brand identity- how company aims
to identify or position brand. Built
through logo, jingle, ads, celebrities,
product trial, exposure etc.
 Label- post identity, brand remains
a label in customers mind. Customer
may not associate anything with the
brand, nor be inclined to purchase it,
yet may identify it, remember the
ad, logo, celebrity, pack.
 Brand Image- how customer
perceives the brand. What customer associates with the brand. Perception turns to position over
time. Built by exposure to communications, word of mouth, product usage and experience, etc
 Brand congruence- Intended positioning (identity) should be congruent (match) with what
exists in the ‗consumer‘s mind‘ (image)
 Brand credibility- how well brand delivers on its promise Moov- Backaches, Nokia-
Performance, Titan- value
 Brand Position- Distinct place or a deeper perception in the customer‘s mind, achieved by
exposure, association, usage, credibility.
 Positioning = combining internal (brand identity+ image) + outward brand expressions
(guarantees, service, performance & packaging). The part of the brand identity and value
proposition (central benefit) to be actively communicated to the target audience
Positions that firms successfully have claimed in India

 Beauty- Lux  Innovation- Sony, Casio
 Premium-Bose, Benz  Macho- Enfield Bullet
 Thanda- Coke  Performance- Nokia, Bata, Titan
 World scale- Reliance  Friendly salesmen-Eureka Forbes
 Generic-Cadbury/ Xerox/ Amul Butter  Reach-HLL, Glaxo,Colgate
 Delivery-Domino‘s/ Blue Dart  Kids-McDonalds, Esselworld, J&J
 Service- Private Banks, Maruti  Indian MNC-Ranbaxy, Infosys, Wipro
 Fast food- Udipi, VadaPav, Sandwich  Economy- Big Bazaar
 Range- Vijay Sales, Alfa, Nokia  Value-Dollar Shops, Factory outlets
 Youth- Pepsi, Swatch  Tourism-Goa, Kerala, Rajasthan
 Fever- Crocin  Headache-Saridon/Anacin
Perceptual Map
Watches
Cars
Premium
stige
Jaguar Ferrari
Audi
BMW
M Benz
Corolla
Conser City Sporty /

vative Hi Tech
Swift
Ritz I20
i10
Indica
Nano
Popular
P&G Positioning: distinct positions, even in same segments (Aaker & Joakimsthaler)
Brand Segment Position
Head & Shoulders Shampoos Anti-Dandruff
Pert Plus Shampoos Conditioner + shampoo
Pantene Shampoos Healthy + shiny hair
Ariel Detergent High Tech Detergent
Tide Detergent Tough cleaning
Cheer Detergent All-temperature cleaning
Bold Detergent Fabric softener
Dash Detergent Concentrated powder
Whisper Sanitary Products Hygienic protection
Vicks Cold Clears blocked nose
Old Spice After Shave Manliness
Crest Toothpaste Cavities
HUL- Axe and Rexona, both marketed by HUL, operate in the same segments- deodorants.
Rexona is positioned against body odour targeting the working population, while Axe is positioned
on seduction targeting the youth. Both use completely different communication strategies,
although they target the same broad segment.
Positioning the company

Customers Who, Demographics, Psychographics, How do I reach them
Where are my customers Geographies, Segments
Social / economic status
Touch points, Media habits
How do customers find me Media, Promotion (SPPASMDT, WoM), Internet
How customers perceive value Performance, VFM, 4Ps, technology, service, design, delivery
How do we best deliver value Brick, click, brick and click, click & brick, mail order, catalogue
Competition Direct, indirect, generic
Benefits for customers of What needs do they serve, serve better than us, do not serve
competitive brands better
How am I positioned Unique, not unique, competitive advantage
Product Differentiation
Add a set of valuable, meaningful and compelling differences to distinguish your offering from that
of the competition. Customers buy based on their perception of quality, value, price, performance,
usage experience parameters, which should ideally be differentiated on. Brands differentiate on
features/benefits irrelevant to customers. Most mobile phones features may hardly be used, newer
management text book editions- bigger & costlier, not necessarily better
Competitive advantage through differentiation, across 5 dimensions:

 Product (form, features, performance quality, conformance quality, durability, reliability,
reparability, style, design)
 Services (order ease, delivery, installations, customer training, customer consulting,
maintenance and repair, miscellaneous services)
 Personnel - better-trained people, 6 characteristics: Competence, Courtesy, Credibility,
Reliability, Responsiveness & Communication.
 Channel - coverage, expertise, and performance.
 Image - Buyers respond differently to company & brand images, identity & image to be
distinguished
Sustaining brands
What sustains What erodes
Competitive advantage in its product Consumer needs and wants met by brands, change,
differentiation dimensions (product, services, evolve, or die, leading to loss of brand POD or lack
personnel, channel & symbols) sustains a brand of POP with other brands
Continuously monitoring environmental Complacency, change in technology, lack of new
changes, customer preferences, strategies, and products, not responding to competitive and
technology, equip brand with POD/POP environmental threats and strategies, can spell doom
Exercise- i-phone
 Key success factor? Brand positioning, innovation, Pop, Pod, brand image
 Where is iphone vulnerable? Economical competitors, imitators, higher technology.
 What should it watch out for? Changing preferences, value, new trends
 Key improvement areas? Price, promotion, features, customer service
6 Brand Identity
―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 organisation.‖ Aaker
To be effective, a brand identity needs to resonate with customers, differentiate the brand
from competitors, and represent what the organization can and will do over time.
What does a brand stand for? How does it create a relationship with its customers? What
is its value proposition? Differential? Brand‘s uniqueness‘?
 Brand identity- what a brand wants to convey to its customer - meaning, self image
 Brand Image- how a customer perceives the brand, through signals emanating from
the brand‘s communications and usage experience
 Brand Essence- A brand’s fundamental nature or quality.
 The one constant across product categories and throughout the world.
Adidas: Athletic Performance, Tata: Trust, Volvo: Safety, Disney: Fun
 Brand credibility- delivering on your promise builds brand credibility
 Trade Dress- aesthetic elements that provide legal protection for a brand‘s identity
Coke bottle shape, Colgate Red & White Design, Harley-Davidson’s engine sound
Brand Promise- What a brand can and must do for customers

 Must promise differentiated benefits, relevant & compelling to the consumer
 Benefits that are functional, experiential, emotional & self-expressive
 Support brand promises with compelling proof points (‘reasons to believe’)
 Address key consumer needs, manifest in organization‘s products and services
 Leverage organization‘s strengths, competitive advantage through differentiation
 Drive organizational decision, system, action, and process, inspire & energize
Components of a brand’s identity:

 Names, logotypes, symbols & graphic devices- Mercedes tristar, Nike swoosh
 Distinctive shapes and colors- Colgate red
 Brand voice and visual style, sounds, jingles and other mnemonic devices
 Typography, theme lines or slogans- Nike Just do it
 Characters uniquely associated with a brand- Coke- Slanting flourish
 Textures, scents, flavors, and other sensory elements
Choosing Brand Elements

Brand elements are devices that identify and differentiate the brand, build brand equity
 The brand-building ability of these elements is ‗what consumers would think or feel
about the product if they only knew about the brand element‘
 Memorable, meaningful and likeable can be characterized as ―brand building‖ in
terms of how brand equity can be built through the judicious choice of a brand element.
 Transferable, adaptable and protectable are more ―defensive‖ and concerned with
how the brand equity contained in a brand element can be leveraged & preserved in the
face of different opportunities and constraints.
Developing Brand Elements

 Companies use marketing research firms to develop and test names.
 Name-research procedures include: Association, Learning, Memory & Preference tests.
 Brand-building roles- easily recognized, recalled, inherently descriptive, persuasive
 Memorable or meaningful brand elements reduce burden on marketing communications
to build awareness and link brand associations
 Associations arising from likeability & appeal of brand elements enhance brand equity
 Slogans- build brand equity, help consumers grasp what brand is, what makes it special
Kapferer’s Brand Identity Prism (1997)

 How 6 personality &
physical facets define
brand identity
 Helps marketers gauge
brand identity, provide
answers to questions like-
If the brand was a person,
how would he look? What
traits would he have?
Warm, cold, aggressive,
approachable or smart?
 Knowing identity helps
design strategy, positioning
& affects marketing
collaterals
 Physical facet, brand relationship and customer reflection are externalization factors,
rest represent internalization
Physique  Core, central purpose, foundation

 What is the product, what does it do, how does it add value, fill gaps
 Titan and Nokia performance, Head & Shoulders dandruff
Personality  Soul, what the brand would be if it were a person, personality traits
 Disney fun, Woodland rugged, Raymond well-groomed man
Reflection  External mirror, how target identifies himself wrt brand
 Brand reflects customers‘ image outward, image of buyer using brand
 Lux- beauty, Pepsi young, Thums up adventurous
Consumer  Internal mirror, consumers attracted to brands where they see own traits
mentalisation  Self image, how the targeted identifies brand wrt self, inner relationship
 Nike- athletic, sporty, Enfield Bullet- armed forces
Relationship  Intangible brand and consumer connect, exchanges, experiences
 How should brand be seen by customers in marketing communication?
 Nokia reliable friend
Culture  Culture spawns brand values and principles which bind customers
 Strong dimension, differential, internalises in customer‘s conscience
 VW- German engineering, Amul- Indian, HSBC World's local bank
Case- Brand identity of Adidas & Nike

Nike Adidas
Promo strategy focus on individual athletes Sponsors teams & global events
External Physique Sports & fitness Sports & fitness
Relationship Sponsorship, ethics Quality & heritage
Reflection Aggressive, provocative, in- Sportsmanship, team player, strong
your- face work ethic
Internal Personality Michael Jordan, Tiger Woods Traditional, conservative, collective
Culture American, Just Do It European, traditional
Self-Image Cool, trendy Competitor, competent
Nike Adidas
Picture of Sender Picture of Sender
Physique: Personal ity: Physique: Personal ity:
Sports and Like Jordan, Sports and Tradi tional , conserva-
fitness Woods… fitness ti ve, collective
Externalization
Internalization
Externalization
Internalization
Re lationshi p: Culture: Re lationshi p: Culture:
Sponsorship, American, Quali ty and European,
ethi cs Just do It! heritage Traditional
Reflection: Se lf-Image: Reflection: Se lf-Image:

Aggressive, Cool, I am an true sportsman- Rel ates more to
provocative, ‖Athlete ‖ ship, A good team competing t han t o
in-your-face player, strong work winning
ethic
Picture of Recipient Picture of Recipient
Key differences between the two companies are at the cultural and the self-image level.
 Adidas stands for European culture, traditional, conservative, collective & competent
 Nike symbolises American way: individual & aggressive- Michael Jordan, McEnroe
 Adidas connected to positive emotions, more to competing than to winning
 Adidas- challenging oneself is exciting; winning is reward, not reason for playing well
 Adidas personality reflects true sportsmanship, good team player & strong work ethic.
 Nike has a cool attitude, You don‘t win silver, you lose gold, winning is paramount
Executing the Brand Identity- Combine visual, auditory & other sensory components
that create recognition, brand promise, communication synergy & help differentiation.
 Starts from positioning & values and is executed through the marketing mix (4Ps)
 Product- consumers‘ brand experiences should meet/surpass expectations
 Pricing- perception of value, equate with quality
 Place- availability and visibility
 Promotion- integrated marketing communication (IMC) to drive home the message
Brand Identity planning model (DAVID AAKER)

To understand, develop, and apply the brand identity concept. Introduces 2 strategic
brand components- strategic brand analysis and brand identity implementation system.
Strategic brand analysis-Helps firm understand self, brand, customers & competition
 Customer analysis-
unbiased customer
opinions, firm
experience and
market situation
 Competitor
analysis- current
and potential
competitor
communication
strategies
 Brand analysis-
how brand can be
differentiated
meaningfully
 Self-analysis-
SWOT + R&C, will
to deliver
Brand Identity system
 12 brand identity
element categories
organized around 4
perspectives -brand
associations in all
12 categories- hard
 Brand identity
structure includes
an essence, a core
identity and
extended identity
 Brand essence-
glue to hold core
identity elements
together, drives
value proposition
 Core identity
should reflect firm
value and strategy, brand differentiation and resonate with customers
 Extended identity includes brand personality and elements beyond the core identity
7 Brand Architecture
An organizing structure, family tree or hierarchy of the brand portfolio that specifies
brand roles and the nature of relationships between brands and sub brands (Aaker &
Joakimsthaler)
Brand architecture is like a soccer team with the football pitch as the market map, and
each football player as a brand playing a major, minor or support role. Hence individual
players/brands will benefit from identity and communication programs
The ideal portfolio Typical market/brand portfolio
Source: Designing brand architecture (Davidson, 2002, portfolio managing matters. Brand Strategy pp 28-29)
Objectives of brand architecture are- creating effective & powerful brands, allocate
brand building resources, create synergy, clarity of product offering, leverage brand
equity, and provide platform for future growth.
 Brand portfolio- all brands, subbrands, cobrands; add /extend/ delete brands
 Portfolio roles of each brand-
 Strategic Role- important source of future profits/vision- Virgin Air, Tata indicom
 Linchpin Role- brand provides key basis for customer loyalty. First Citizen Club for
Shoppers Stop, J&J baby range
 Silver Bullet- brand positively influences image of another brand- IBM Thinkpad
boosted public perceptions of IBM, Nano of Tata Motors
 Cash Cow- significant customer base may not require high level of investment but
generates funds to be invested in strategic, linchpin, silver-bullet brands. Parle G,
Nivea Creme
Design Your Portfolio Graphics

 Visual representations across portfolio of brands- logos, packaging, symbols, product
design, layout of print ads, taglines- look and feel of each brand presentation
 Do visual representations send right signals of relationships between brands in
portfolio?
 Exercise: put all graphic representations of brand portfolio (logos, packs,
mascots) on paper. Do they convey consistent message and support brand
portfolio’s structure
Develop Brand Portfolio Structure

 Brand portfolio structure is a way of grouping brands to clarify logical relationships
 Brand hierarchy tree for Indian Hotels- Taj Hotels, hallmark of luxury and service
 But Taj tag was on every group hotel, guests were confused what brand Taj stood for?
 Differentiated by quality & service standards , hive off hotels not fitting architecture
Exercise- clarify relationships among brands by drawing a ―brand family tree‖.
Specify the Product-Market context of each brand

 Endorser brands- Brand endorsed by parent or corporate brand where parent brand
is identified with the brand, but, endorsed brand is given greater visual weight than
parent brand. The corporate/parent brand lends credibility or assurance to endorsed
brand without overpowering it with its own associations. Cadbury’s Dairy Milk /
Five Star. Xylys, Swiss Made- Brought to you by Titan
 Subbrand- A new brand combined with a product or corporate brand. The subbrand
can make the parent brand more vital and relevant to a new consumer segment or
within a new product category. Ford Ikon- Flair, Hyundai Getz- Prime, Gillette
Sensor Excel
 Benefit brands- branded features, components, or services that augment the brand
offering- Maruti Ritz with Kappa engine
 Cobrands- combine your brand with brand/s from another firm to create a unique
offering- Citibank-Jet Platinum credit cards or highlight an ingredient of another
firm in your brand communication- HP laptops with MS Office or Intel inside,
Dolby system in Multiplexes, Teflon coating in Pans, Carl Zeiss in mobile cameras
Titan Brand Architecture
House of Brands or Branded House

Branded House House of brands
Master brand strategy Product brand strategy
1 master brand across categories New brands /extensions / sub brands
Harvard (HBR, HBS, Medical/Law), Nike Maruti (800, Alto, SX4, Swift), P&G
Master brand does not connect in all markets Easier for different brands to connect to
(Nike Laptops, Harvard Entertainment) different / adjacent markets
Low branding costs/synergy- 1brand leveraged Costlier- separate branding costs
Category failure may damage master brand Brand failure may not affect firm
Brand architecture types: Common branding systems are
Brand Type Example Strategic Rationale

Corporate Heinz  Bear company name
brand GE  Highest in brand hierarchy
Sony, Tata,  Harnesses strong corporate image
Reliance, HP synonymous with product class
Corporate Dominant
CD common, FMCG rare, tech popular

Master BMW  Dominant, highest level in hierarchy
brand Mont Blanc  Typically, only brand in the system
Nokia  Corporate brands were master brands
Licensed Calvin Klein,
brand Disney  Name licensed out- fashion industry-
Tommy Hilfiger clothes, leather, eyewear, accessories
Parent brand  Brand extended to multiple categories
 May resemble corporate brand
Godrej, Videocon  Economical NPL, trust/assurance,
marketing economies
House  Diversified firms leverage corporate
brand (family brand association across segments/
brand) Tata, Amul
categories
 if 2 product lines are incompatible
Mixed Brands
(Titan & Sonata premium & economy)

Dual Cadbury- 5 Star  Combine corporate + strong subbrand
brands (family Gillette- Mach3  Subbrands help differentiate, drive
/ endorser Ford-Ikon brand preference
brands) Tata Indica  Umbrella for a family of products
extensions
Co-brands Intel inside  Raise perceived quality & familiarity
(ingredient Teflon coated of both brands
brands) Dolby system  Brand exposure in absent product class
Product/Mono Rexona, Crocin  Strong brand identity, need focused
brands (single Nivea, Axe  Corporate brand insignificant, FMCG
Brand Dominant
brands)  Expensive and risky but profitable

 Shelf space/market share/extensions
Sub Brand Ford Ikon- Flair,  New brand + parent/corporate brand in
Hyundai Getz- brand identity system
Prime,  Subbrand draws on parent brand to
Gillette Sensor target new segment or category
Excel  Enables existing consumer connect
Brand Portfolio Strategies
Brand Portfolio- Set of all brands/lines a firm offers to buyers in a particular category.
 Multiple brands increase shelf presence, attract variety seeking consumers, help new
market entry & yield economies of scale in advertising, sales & distribution
 Portfolio maximises brand equity & market coverage, minimises brand overlap
 Differentiation appeals to a sizeable segment & justify marketing and production costs
 Critical- Portfolio monitoring & pruning of weak and unprofitable brands
 Maruti- 800, Alto, A-Star, Estilo, Wagon-R, Ritz, Swift, Desire, etc & their variants
Product Branding
 Separate brand, own identity, image & set of associations, company not prominent
 Paras- Moov, DCold, Livon, Dermicool, Freshia,
 CavinKare- Chic shampoo, Spinx perfumes, Meera Herbal, Nyle Shampoo
 HUL- Rexona, Axe, Close Up, Taj Tea, Lipton Tea, Surf, Wheel
Line Branding
 Brand successful in a category for a targeted consumer group, is extended to other
product lines in the category/ adjacent categories, but catering to same group‘s needs.
 Product lines cater to different needs, cosmetics- lipstick, nail polish, moisturizers,
beverages- flavours, ketchups/ mineral water/ biscuits- pack sizes, cars- variants.
 Identity of the main brand is leveraged across other extensions
 Line branding restricted to adjacent territories & complementary products.
 Gillette razors and cartridges- Vector, Sensor, Mach 3, Turbo; shaving gels, deos,
L’Oreal- cosmetics, beauty, shampoos, skin, salons
 Amar Chitra Katha- comics (print), mobile, TV, Cinema, online
Range Branding
 Built on common association, competence or promise of the main brand or firm
 Brand‘s common position/ association spread across related and unrelated categories
 Kingfisher symbolizes ‗the good times‘, hence extended across Beer, airlines and
soccer. Godrej stands for a century of trust and reliability, extended across FMCG,
CD, property, furniture and security systems.
Umbrella Branding
 One brand for all products/categories, drawing on the strength of the master brand
 Safer, cheaper than building new brand, association should strategically fit categories
 Samsung- TV, fridge, washing machines, mobiles, hard disk, monitors, laptops
 Virgin- Airlines, Cola, Music, Moon travel, mobile, entertainment
Source/Double Branding
 Corporate + new brand (combination of umbrella & product branding strategy)
 Equal prominence in communication and branding for both brands
 Brand benefits from corporate brand‘s image or adds subtracts to/ from it.
 Hyundai name precedes – Santro, Getz, i10, i20, Verna, Tucson
 Johnnie Walker Scotch Whisky– Red label, Green label, Black label & Blue label
Endorsement Branding
 Similar to source branding, but product brand more significant than corporate brand
 Corporate brand conveys basic associations, augmented by the product brand
 Cadbury’s precedes Dairy Milk, 5 Star, Fruit & Nut, Celebrations, Temptations
 Polo by Ralph Lauren, Armani- Signature, Collezioni, Exchange, Junior
Brand Extension
 Extend existing brand to new products, services, or consumer segments
 Existing brand + new brand, new brand is called subbrand
 If executed well, brand extensions broaden and clarify brand meaning, if not, dilute or
confuse brand meaning. Kingfisher (Beer to Airlines) and Amul (Milk & Foods).
Devising the Branding Strategy

NPL 3 choices: Develop new brand elements for new product, apply some of its existing
brand elements, use a combination of new and existing brand elements
 Brand extension- use an established brand to introduce a new product-Gillete Sensor
 Sub-brand- new brand combines with an existing brand- Gillete Sensor Excel
 Parent brand- the existing brand which gives birth to a brand extension- Gillette
 Family brand- Parent brand already associated with multiple products through brand
extensions. Cadbury
Product category
Brand name
Old New
Old Line extension-(New SKU, flavours- Category extension- (Titan
Mirinda lemon, Rasna mango, Pepsi 1.5L) Raga, Junior Horlicks)
New Sub brand- (Gillette Sensor Excel, Ford New brand- (Maruti Ritz,
Ikon Flair, Kellogg Frosties K) Tata Nano)
Brand extensions can be broadly classified into two general categories:

1) Line extension- parent brand used to brand a new product, target new market segment
within a product category currently served by parent brand – Maggi Noodle SKUs
2) Category extension- when parent brand is used to enter a different product category
from that currently served by the parent brand- Kingfisher Beer to Airlines
3) Brand line- All products- original, line & category extensions, sold under a particular
brand- Godrej, Videocon, Heinz
4) Brand mix (brand assortment) - all brand lines of a firm available to buyers – HUL-
Close-up, Pepsodent
Brands roles in a brand portfolio:

 Flankers- Flanker (―fighter‖) brands positioned wrt competitors‘ brands so that more
important (and profitable) flagship brands can retain their desired positioning
 May cannibalise own brands or reflect poorly on other brands in the portfolio
 Celeron and Intel, Toyota & Lexus, I Pod range- nano, shuffle etc
 Cash Cows- retain brands retained as they hold on to a sufficient number of customers
& maintain their profitability with virtually no marketing support. Parle G
 Low-End Entry-Level- a relatively low-price brand in the portfolio to attract
customers to the franchise. Gucci accessories, Sony Vaio entry level, Armani Jeans
 High-End Prestige- Role of a relatively high-priced brand in the brand family often to
add prestige and credibility to the portfolio. Armani Signature, Mont Blanc Pens
Brand portfolio assessment matrix

Competitive position
Strong Medium Weak
High Maximise dominance Challenge leader, Niche, acquire,
Attractiveness
build on strengths flank, exit

Market
Medium Challenge leader, build on Manage for cash Milk and

strengths flow, flank specialise
Low Cash generator Milk, consider exit Divest
Line Extensions advantages Line Extensions disadvantages

 Drive growth and add sales  Companies lose focus
 Consumers familiar with parent brand  Consumers become confused
 Strong brand identity, preferred  Proliferation, parent brand loses identity
 Extensions gain retailer acceptance  Erodes brand equity for parent brand
 Economies of scale in marketing mix  Brand extension failure may impact parent
 Cater to new markets/users  May cannibalise parent brand
 Reduce cost & period of NPD  Opportunity loss of building new brand
Brand Extensions
Advantages Disadvantages
Leverage assets Dilute brand strength, confuse
New product acceptance, safer, economical Line extensions weaken brand associations
Brand name / trademark issues avoided Extension cannibalises, failure harms brand
Renew brand interest, future NPL base Time to create unique image and equity
Expand market / segment coverage Lack of ‗fit‘ in the consumer‘s mind
Brand Equity
 The differential effect that brand knowledge has on consumer response to the
marketing of that brand
 Added value endowed to products and services, the marketing effects uniquely
attributable to a brand
 Brand assets linked to a brand‘s name & symbol that add to a product or service
 An important intangible asset to the firm, with a psychological and financial value
 Customer’s viewpoint- Brand equity is the differential in a customer‘s mind that
makes him prefer one brand over another
 Firm’s viewpoint- Brand equity is value of the brand to the firm in monetary terms
 This asset can be created and analysed trough the four dimensions, brand awareness,
perceived quality, brand associations, and brand loyalty.
Brand Equity
Brand Perceived Brand Brand

Awareness quality Associations Loyalty
 Brand awareness- the base that affects consumer perception and even taste, people
like the familiar and ascribe good attitudes to familiar items
 Perceived quality- how the customer perceive the brands quality status
 A brand association, as it influences associations in many contexts and also because it
is empirically shown to affect profitability as measured by ROI and stock return
 Brand associations- anything that connects the customer to the brand
 Includes user imaginary, product attribute, use situations, organizational associations,
brand associations, and symbols
 Brand loyalty- key to brand value, strengthen size & intensity of each loyalty segment
Factors to influence Brand Equity
How Brand Equity Generates Value (Aaker)
Source: Managing Brand Equity: David Aaker1991
Building Brand Equity

 The marketer‘s challenge in building a strong brand is to ensure customers have the
right type of experiences with products and services and their marketing programs
create the desired brand knowledge structures for the brand.
 Customer knowledge drives the differences that manifest themselves in brand equity
 Value may be reflected in how consumers, think, feel, and act wrt the brand as well as
the prices, market share, and profitability that the brand commands for the firm
 Marketers and researchers use various perspectives to study brand equity

 Customer-based brand equity is the differential effect that brand knowledge has on
consumer response to the marketing of that brand
 +ve customer-based brand equity- when consumers react more favorably to a product &
the way it is marketed when the brand is identified, as compared to when it is not.
 -ve customer-based equity- when consumers react less favorably to marketing activity
for the brand under the same circumstances.
Measured by
 Brand audits- in-depth examination of brand health & to set strategic direction
 Tracking studies- information from consumers to provide valuable tactical insights into
short-term effectiveness of marketing programs and activities.
 Strategic brand management involves the design and implementation of marketing
activities and programs to build, measure, and manage brands to maximize their value.
Building brand equity depends on

 Brand elements- brand names, logos, symbols, package designs
 The initial choices for the brand elements or identities making up the brand
 The way the brand is integrated into the supporting marketing programs
 The associations indirectly transferred to the brand by linking the brand to some other
entity (company, country of origin, another brand)
Strategic brand management process involves four main steps:

 Identifying and establishing brand positioning.
 Planning and implementing brand marketing.
 Measuring and interpreting brand performance
 Growing and sustaining brand value.
Brand equity drivers- creating right brand knowledge structures with right consumers, 3
key drivers:
 The initial choice for the brand elements or identities making up the brand
 Product, service, accompanying marketing activities & supporting marketing programs
 Other associations indirectly transferred to the brand by linking it to some other entity.
Designing Holistic Marketing Activities

 Brands are not built by advertising.
 Customers come to know a brand through a range of contacts and touch points:
Personal observations, personal use, word of mouth, interactions with company
personnel, on-line or telephone experiences and payment transactions.
 Brand contact- any (+/-) information-bearing experience a customer / prospect has with
a brand, product category, or market relating to the marketer‘s product or service.
Personalization- Making sure that the brand and its marketing is as relevant as possible
to as many customers as possible. The Internet creates opportunities to personalize
Integration- Integrating marketing is about mixing and matching marketing activities to

maximize their individual and collective effects, especially marketing communications
Brand awareness- the consumers‘ ability to identify the brand under different
conditions, as reflected by their brand recognition or recall performance and whether it
creates, maintains, or strengthens brand image.
Brand image- perceptions and beliefs held by consumers, reflected in the associations
held in consumer memory.
Internalization- Marketers must adopt an internal perspective to appreciate and
understand basic branding notions, and how they can help—or hurt brand equity. Key
influence on brand perception is customers experience with company personnel.
 Internal branding- activities and processes that help to inform and inspire employees.
 Brand bonding- when customers experience the company as delivering on its brand
promise. To deliver the brand promise, every employee should live the brand.
 Holistic marketers should train & encourage distributors / dealers to serve customers
Leveraging Secondary Associations

The third way to build equity is to ―borrow it‖. Brand associations may be linked to other
entities that have their own associations, creating ―secondary‖ brand associations like:
 The company—through branding strategies.
 Countries or other geographical regions—identification of product origin
 Channels of distribution—channel strategy.
 Other brands—ingredient or co-branding.
 Characters—licensing.
 Spokespeople—endorsements.
 Sporting or cultural events—sponsorships.
 Other third party sources—awards or reviews.
Measuring Brand Equity- Two complementary approaches employed by marketers

 Indirect approach- assesses potential sources of brand equity by identifying and
tracking consumer brand knowledge structures.
 Direct approach- assesses the actual impact of brand knowledge on consumer
response to different aspects of the marketing.
Brand Audits- a consumer-focused exercise involving procedures that assess brand

health, uncover sources of brand equity & suggest ways to improve & leverage its equity.
 Used to set the strategic direction for the brand
 Regular audits allow marketers to manage brands more proactively and responsively.
 Profound implications for the strategic direction and brands‘ resulting performance.
 Requires understanding sources of brand equity from the firm and the consumer
perspective
 Brand audits consist of two steps
Brand Inventory- To provide a current, comprehensive profile of how all the products
and services sold by a company are marketed and branded.
 Profile each product/service, identify all associated brand elements & supporting
marketing program
 Profile competitive brands in terms of their branding and marketing efforts.
 Suggest what consumers‘ current perceptions may be based on.
 Assess consistency of all the different products or services sharing a brand name.
Brand Exploratory- To understand what consumers think and feel about the brand and
its corresponding product category to identify sources of brand equity.
 Prior research studies and qualitative research techniques like word associations,
projective techniques, visualization, brand personifications, and laddering.
 Gain understanding of the beliefs of company personnel about consumer perceptions.
Brand Tracking - collect information from consumers on a routine basis over time.
 Quantitative measures to understand how brands & marketing programs are performing
on key dimensions
 Understand where, how much, and in what ways brand value is being created
Managing Brand Equity- requires a long-term view of marketing decisions.

Brand Reinforcement- Manage firms strategic asset to ensure value does not depreciate.
A) Brand equity is reinforced by marketing actions that consistently convey the meaning
of the brand to consumers in terms of:
 What products the brand represents?
 What core benefits it supplies?
 What needs it satisfies?
 How the brand makes those products superior?
 Which strong, favorable & unique brand associations should exist in consumers mind?
 Reinforcing brand equity requires innovation & relevance through marketing program.
B) Marketers must introduce new products and conduct new marketing activities that
truly satisfy their target market.
C) An important consideration in reinforcing brands is the consistency of the
marketing support the brand receives, in terms of both amount and kind.
D) In managing brand equity, it is important to recognize the trade-offs between
those marketing activities that fortify the brand and reinforce its meaning and those that
attempt to leverage or borrow from existing brand equity to reap some financial benefit.
Brand Revitalization
Changes in consumer tastes & preferences, emergence of new competitors/ technology,
or regulatory or environmental developments may potentially affect fortunes of a brand.
 To reverse a fading brand‘s fortunes, restore lost brand equity sources or create new
 Understanding, what the sources of brand equity were, is the first step to a revival
 Expand depth &/or breadth of brand awareness by improving consumer recall & brand
recognition during purchase / consumption settings.
 Improve strength, favorability & uniqueness of brand associations to build brand image.
Brand crisis- Longer response time in a crisis increases chances of consumers forming
negative impressions but sincerity in tackling the crisis will be appreciated by customers
Brand Equity Models

1) Brand Asset Valuator (BAV)- Young & Rubicam ad agency measured brand equity
for 450 global brands and 8,000 local brands in 24 countries, using a 32 item
questionnaire on brand personality plus 4 dimensions:
1. Differentiation- Measures how distinctive the brand is in the marketplace

2. Relevance- Measures whether a brand has personal relevance for the respondent. Is it
meaningful to him or her? Is it personally appropriate?
3. Esteem- Measures whether brand is held in high regard and considered best in its
class. Closely relates to perceived quality and extent to which brand is growing in
popularity.
4. Knowledge- an intimate understanding of the brand, consumer experience
 Differentiation + relevance= brand strength, describes the brand's growth potential

 Esteem + knowledge= brand structure, describes the brand's current power
 Brand strength+ brand structure= Powergrid, depicts brand development cycle stages
Relationship among 4 pillars yields compelling information about brand's capacity to
carry a premium price & fend off competition- the key to brand health.
Y&R Power Grid- Stature Versus Strength

Brand stature (knowledge + esteem)
H L
Brand strength Budweiser BMW
(differentiation Gap Guinness
+ esteem) H Heinz Starbucks
Disney Vodafone
Sony Swatch
Kodak HP
L Levis Kellogg
Xerox Reuters
BAV can be used to gain a range of knowledge about a brand:

 Identify key perception drivers, potential target groups, problem areas and barriers
 Analyze own image/attribute/brand personality & competitive strengths &
weaknesses
 Track brand movement over time on critical dimensions
 Investigate a corporate name as a potential parent/umbrella brand
 Determine marketing needs and possible common communications/programs
Typical patterns of brand development
2) Aaker Model (Professor David Aaker)

Brand equity is a set of 5 categories of brand assets & liabilities linked to a brand that add
to or subtract from the value provided by a product / service to a firm and/or to that firm‘s
customers. The categories of brand assets are:
 Brand loyalty
 Brand awareness
 Perceived quality
 Brand associations
 Other proprietary assets such as patents, trademarks, and channel relationships
Brand identity- unique set of brand associations that represent what a brand stands for
and promises to customers. Consists of 12 dimensions organized around 4 perspectives:
 Brand-as-product (product scope, attributes, quality/value, use, users, country of origin)
 Brand-as-organization (organizational attributes, local versus global)
 Brand-as-person (brand personality, brand-customer relationships)
 Brand-as-symbol (visual imagery/metaphors and brand heritage)
Brand identity also includes

 Core identity- the central, timeless essence of the brand
 Extended identity- includes various brand identity elements, organized into cohesive
and meaningful groups
3) Brandz model of brand strength (Marketing research consultants Brown and WPP)
Brand building involves sequential steps, where each step is contingent upon successfully
accomplishing previous step. Objectives at each step, in ascending order, are:
 Presence, Relevance, Performance, Advantage
 Bonding- bonded consumers, build stronger relationships with the brand, spend more of
their category expenditures on the brand than those at lower levels of the pyramid.
9 Brand valuation
Top Brand values 2009 Interbrand
1. Coca-Cola 68,734 ($m)
2. IBM 60,211 ($m)
3. Microsoft 56,647 ($m)
4. GE 47,777 ($m)
5. Nokia 34,864 ($m)
6. McDonald's 32,275 ($m)
7. Google 31,980 ($m)
8. Toyota 31,330 ($m)
9. Intel 30,636 ($m)
10. Disney 28,447 ($m
Interbrand list of Top 20 Brand Ranks 2000-2009

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Coca Cola 1 1 1 1 1 1 1 1 1 1
Microsoft 2 2 2 2 2 2 2 2 3 3
IBM 3 3 3 3 3 3 3 3 2 2
Intel 4 6 5 5 5 5 5 7 7 9
Nokia 5 5 6 6 8 6 6 5 5 5
GE 6 4 4 4 4 4 4 4 4 4
Ford 7 8 11 14 19
Disney 8 7 7 7 5 7 8 9 9 10
McDonalds 9 9 8 8 7 8 9 8 8 6
AT&T 10 10
Marlboro 11 11 9 9 10 10 12 14 18 17
Mercedes Benz 12 12 10 10 11 11 10 10 11 12
HP 13 15 14 12 12 13 13 12 12 11
Cisco 14 16 16 17 16 17 18 18
Toyota 15 14 12 11 9 9 7 6 6 8
Citi 16 13 13 13 13 13 12 11 11
Gillette 17 18 19 16 15 15 16 16 14 13
Sony 18 20
American Express 19 17 15 15 14 14 14 15 15
Honda 20 18 18 18 19 19 19 18
BMW 13 13 15
Louis Vuitton 18 17 17 17 16
Samsung 20 20 19
Apple 20
Interbrand’s Brand Equity Formula

Brand earnings Brand strength
 Brand sales  Leadership (25%)
 Costs of sales  Stability (15 %)
 Marketing costs  Market (10 %)
 Overhead expenses  Geographic spread (25 %)
 Remuneration of capital charge  Trend (10 %)
 Taxation  Support (10 %)
 Protection (5 %)
Brand value- the sum of all earnings that a brand is expected to generate. 3 steps:
 Establish company's intangible earnings and allocate them to individual brands and
countries of operation, based on financial data
 Determine portion of intangible earnings attributable to brand alone (Brand
Contribution), which reflects share of earnings from a product or service's most loyal
consumers or users, as opposed to other factors such as price
 Project brand value based on market valuations, brand risk profile, & growth potential.
Brand Valuation Approach (Interbrand)

Companies like P&G- Gillette, Unilever, L‘Oreal and Nestle create significant brand
value, from a portfolio of brands than from a single brand.
Brand value model

• Brand Value as net present value (NPV) of future earnings generated by the brand
• Captures present and future value of a brand
• Determines how brand creates value and aligns with customer‘s drive for purchases
• The model comprises 4 key elements:
1) Financial forecasting
 Projections of all revenues from that brand in the future
 Deduct operating costs, taxes, capital costs to operate the brand
 Difference represents brand‘s Intangible Earnings (like EVA / intellectual capital)
2) Role of Branding
 Measuring how the brand influences customer demand at the point of purchase
 Analyse (Brand Earnings / Intangible Earnings) % solely attributable to the brand
 Identifies and weights key drivers of customer demand, their dependence on brands
 Calculated as a %age and applied to Intangible Earnings to derive Brand Earnings.
3) Brand Risk
 Brand specific risk rate at which forecast Brand Earnings are discounted to their NPV
 Discount based on risk free rate (yield on government bond + brand premium based on
Brand Strength analysis)
 Assesses risk profile of projected Brand Earnings based on brand franchise security
4) Brand strength
 Measured against 7 key attributes- Market, Stability, Leadership, Support, Trend,

Geography and Protection
 Provides brand specific discount rate for the Brand Earnings forecast
5) Brand Value Calculation
 A financial representation of a firm‘s earnings due to superior demand created for its
products and services through the strength of its brand
 Brand value is the financial worth today, similar to market cap of a firm
 Brand value is calculated as the NPV of projected Brand Earnings
 Brand value depends on good financial performance + strong market/ing position
 Higher Brand Value looks at long term results than short-term performance
Applications of Brand Valuation in Brand Management

 Strategic asset (M&A, licensing, valuation, PE) as economic value considered not sale
 Key brand value (Coke, Apple, Microsoft) is significant portion of company value
 Brand building becomes a corporate objective not a marketing initiative
Compare brand value to shareholder value, intangible/ tangible assets
ssess Brand value across customers, segments, geographies, channels, competition
Brand value change to assess internal performance, increase accountability, ROI
Part of value based management frameworks ( EVA, BSC, shareholder value)
Establish best practices brand management, integrate brand value in corporate planning
Performance benchmark (quarterly brand value score card review)
Approaches to Brand Valuation:

• Cost: Looks at all costs incurred in creating a brand or what it might cost to recreate a
brand hypothetically. Rarely used as costs incurred are substantially less than actual
brand value. Eg Property price cannot match cost in building it.
• Market value: Estimate brand's value based on market transactions of comparable
brands. Issues- all market transactions not publicly available, cannot be easily compared
• Economic use: Earlier economic valuations were based on historical brand earnings,
now on the discounted value of future brand earnings
• Royalty relief: Assumes that company does not own that brand but needs to license it
from its owner, hence a royalty rate based on sales is applicable. As company owns the
brand it does not need to incur this charge hence the name ‗royalty relief'. Future sales
(rather than future gross profit) are forecast, hence royalty rate applied to provide an
income attributable to the brand that is then discounted back to a net present value.
Briefly, brand's value is a product of 2 quantities

(1) Annual "net" after tax profits, adjusted to exclude the earnings expected for an
equivalent unbranded product, and averaged over time;
(2) A "multiple" (or discount rate), reflecting brand's "strength"
Brand strength factors (greater a brand's strength, the higher its multiple)
(i) Leadership—ability to influence the market.
(ii) Stability—ability to maintain a consumer franchise.
(iii) Market—vulnerability of market demand to changes in tastes or technology.
(iv) International Scope—cross national/cultural potential.

(v) Trend—long term appeal to consumers.
(vi) Support—strength of communications.
(vii) Protection—security of the brand owner's legal or property rights.
Brand valuation approaches (http://www.brandchannel.com/papers_review.asp?sp_id=357)
 Earlier, intangibles (brands, technology, patents, employees) not financially valued
 Unexplained differences in book valuation and market capitalization
 1980s M&A activity led to valuation of companies and brands, today majority
business value is derived from intangibles
 Average corporation life is 25 years, average age of world‘s Top 100 brands 60 years
 A study (Interbrand- JP Morgan) concluded that on average brands account for over
one-third shareholder value with McDonald‘s accounting for 70% and Coca-Cola 51%
Approaches to brand valuation

Financial values on brands is now widely accepted. With transfer pricing, licensing deals,
M&A and value based management, brand valuation plays a key role in business today.
Research-based approaches- Brand equity models measure consumer behavior and

attitudes that have an impact on the economic performance of brands through consumer
research where they interpret and measure consumers‘ perceptions that influence
purchase behavior. Their integration into an economic model helps them assess economic
value of brands
Financially driven approaches- Cost-based approaches fail as there is no direct

correlation between investment made and value added by a brand
Comparables- brand value is arrived at on the basis of something comparable, but value
creation of brands in the same category can be very different, even if most other aspects
of the underlying business are similar. Comparables are useful for cross-checking
Premium price- Brand value is calculated as NPV of future price premiums that a
branded product would command over an unbranded or generic equivalent. However
brand objectives are based on ability to secure future demand than current premium.
Economic use- This approach combines brand equity and financial measures, and is
widely accepted methodology for brand valuation 3,500 brand valuations worldwide.
 Brands help generate customer demand, which translates into revenues and long term
repurchase and loyalty
 Brand‘s future earnings are identified and discounted to a NPV using a discount rate
that reflects the risk of those earnings being realized
Steps to capture complex value creation of a brand:
1. Market segmentation- Brands influence customer choice, but influence varies

depending on market in which the brand operates. Split brand‘s markets into non-
overlapping and homogeneous groups of consumers according to applicable criteria such
as product or service, distribution channels, consumption patterns, purchase
sophistication, geography, existing and new customers etc. The brand is valued in each
segment and the sum of the segment valuations constitutes the total value of the brand.
2. Financial analysis- Identify and forecast revenues and earnings from intangibles
generated by the brand for each of the distinct segments determined in Step 1. Intangible
earnings are brand revenue less operating costs, applicable taxes and a charge for the
capital employed. The concept is similar to the notion of economic profit.
3. Demand analysis- Assess the role that the brand plays in driving demand for products
and services in the markets in which it operates, and determine what proportion of
intangible earnings is attributable to the brand measured by an indicator referred to as the
―role of branding index.‖ This is done by first identifying the various drivers of demand
for the branded business, then determining the degree to which each driver is directly
influenced by the brand. The role of branding index represents the percentage of
intangible earnings generated by the brand. Brand earnings are calculated by multiplying
the role of branding index by intangible earnings.
4. Competitive benchmarking- Determine the competitive strengths and weaknesses of

the brand to derive the specific brand discount rate that reflects the risk profile of its
expected future earnings (measured by an indicator called as the ―brand strength score‖).
This comprises extensive competitive benchmarking and a structured evaluation of the
brand‘s market, stability, leadership position, growth trend, support, geographic footprint
and legal protectability.
5. Brand value calculation- Brand value is the NPV of the forecast brand earnings,
discounted by the brand discount rate. NPV calculation comprises both the forecast
period and the period beyond, reflecting the ability of brands to continue generating
future earnings. An example of a hypothetical valuation of a brand in one market segment
is shown in the Table below. This calculation is useful for brand value modeling in a
wide range of situations, such as:
 predicting the effect of marketing and investment strategies

 determining and assessing communication budgets
 calculating the return on brand investment
 assessing opportunities in new or underexploited markets
 tracking brand value management.
Hypothetical brand value calculation:
Applications
 Strategic brand management, where brand valuation focuses on internal audiences by

providing tools and processes to manage and increase economic value of brands.
 Financial transactions, where brand valuation helps in a variety of brand-related
transactions with external parties.
Attributes of Strong Brands

 Excels at delivering desired benefits
 Stays relevant
 Priced to meet perceptions of value
 Positioned properly
 Communicates consistent brand messages
 Well-designed brand hierarchy
 Uses multiple marketing activities
 Understands consumer-brand relationship
 Supported by organization
 Monitors sources of brand equity
The Role of Brands

 Identify the maker
 Simplify product handling
 Organize accounting
 Offer legal protection
 Signify quality
 Create barriers to entry
 Serve as a competitive advantage
 Secure price premium
Marketing Advantages of Strong Brands

 Improved perceptions of product performance
 Greater loyalty
 Less vulnerable to competition
 Larger margins
 Inelastic consumer response to price increases
 Elastic consumer response to price decreases
 Greater trade cooperation
 Increase in effectiveness of IMC
 Licensing opportunities
 Brand extension opportunities
Product Life Cycle (PLC)

Increasing competition, technology & changing economic conditions make firms
reformulate positioning and differentiation strategies during a PLC.
 Introduction & growth stage- Slow growth & low profits, but if successful, then
high growth and increasing profits
 Maturity stage- Slow sales growth, stable profit, extend successful brands
 Decline stage- Identify weak brands and phase out or reformulate
 Markets evolve through 4 stages: emergence, growth, maturity & decline.
 Style- basic and distinctive mode of expression appearing in a field of human endeavor.
 Fashion- currently accepted or popular style in a given field. Length of a fashion cycle
is hard to predict but fashions pass through 4 stages- Distinctiveness, Emulation, Mass-
fashion & Decline.
 Fads- fashions that come quickly into public view, are adopted with great zeal, peak
early & decline very fast. Fads do not satisfy a strong need, hence do not survive.
Marketing Strategies: Introduction Stage and Pioneer Advantage

 Profits negative/ low, high promotional expenditure, to inform potential consumers,
induce product trial and ensure availability
 Market pioneer- being first can be rewarding, but risky & expensive
 Coming in later makes sense if with superior technology, quality, or brand strength.
 Speeding up innovation time is essential in an age of shortening product life cycles.
 Pioneer has strong brand name recall, establishes brand attributes that product class
should possess, advantages of economies of scale, technological leadership, patents &
ownership of scarce assets.
 Pioneer weaknesses: crude new products, improper positioning, an idea before its time,
high product-development costs, lack of resources, managerial incompetence or
unhealthy complacency.
 A pioneer could also be an inventor, or a product pioneer or a market pioneer.
Marketing Strategies: Growth Stage

 The growth stage marked by rapid sales climb, consumer base
 New competitors enter, attracted by the opportunities
 Prices may remain where they are or fall slightly.
 Companies maintain / increase promotional expenditures, educate market, take on
competition, profits increase, costs fall due to volumes
Strategies to sustain rapid market growth

 Improve product quality and add new product features and improved styling.
 Add new models, flanker products, enter new market segments.
 Increase distribution coverage and enter new distribution channels.
 Shift from product-awareness advertising to product-preference advertising.
 Lowers prices to attract the next layer of price-sensitive buyers.
 Trade-off between high market share and high current profits. By spending money on
product improvement, promotion, and distribution, it can capture a dominant position.
Marketing Strategies: Maturity Stage

Growth declines, longer stage, marketing mature products is a key challenge. 3 phases:
 Growth, where the sales growth rate starts to decline.
 Stable, where sales flatten on a per capita basis because of market saturation.
 Decaying maturity, where sales level starts to decline, customers begin to switch.
 The sales slowdown creates industry overcapacity, intensifies competition
 Industry consolidation, few dominate firms, many nichers, profits through volumes
 Key issue- f become one of the ―big 3‖ or pursue a niching strategy
 Companies may abandon weaker products & concentrate on more profitable & new
products.
Market Modification
Expand market for mature brand by working with 2 factors that drive sales volume =
number of brand users x usage rate per user.
 Expand the number of brands users by converting nonusers.
 Expand the number of brand users by entering new market segments.
 Convert competitors‘ customers.
 Convincing current users to increase brand use, users, usage
Product Modification
Modifying product characteristics through quality, feature or style improvement

 Quality improvement aims at increasing the product‘s functional performance.
 New features that expand product‘s performance, versatility, safety, or convenience.
Build image as an innovator, win loyalty of market segments that value these features
 Feature style improvement may only increase product‘s aesthetic appeal.
Marketing Program Modification

Modifying other marketing program elements the 4 Ps and services.
Marketing Strategies: Decline Stage

Sales decline- due to technology advance, shifts in consumer tastes & competition
Over capacity, increased price-cutting, and profit erosion. As sales and profits decline,
firms may withdraw from the market or reduce number of products offered
 Stop, increase or maintain investment.
 Drop unprofitable customer groups, strengthen investment in lucrative niches.
 Harvest firm‘s investment to recover cash quickly.
 Divest the business.
 Appropriate strategy depends on industry‘s relative attractiveness & company‘s
competitive strength in that industry
 Companies successful in rejuvenating a mature product, often do so by adding value to
the original product.
The Product Life-Cycle Concept: Critique

The PLC concept helps interpret product and market dynamics, used for planning,
control, and forecasting. PLC focuses only on a brand than the market, customers or
competition., or new needs, , technology, channels, and other developments.
Markets evolve through four stages: emergence, growth, maturity, and decline.
 Emergence- Before a market materializes, it may exist as a latent market. Marketers

either follow a single-niche or multiple-niche or a mass-market strategy.
 Growth- If new product sellsl, new firms enter, ushering in a market-growth stage.
 Maturity- Eventually, competitors cover and serve all the major market segments
and the market enters the maturity stage. As market growth slows down, the market
splits into finer segments, and high market fragmentation occurs, often followed by
market consolidation caused by the emergence of a new attribute with strong appeal.
 Decline- Eventually, demand for present products begins to decrease, market enters
decline stage. Total need level declines or new technologies replace the old.
Brand Valuation
Brand Equity
• Brand worth/value- Levis Jeans sans logo or Nike sneakers without the swoosh?
• Nurtured and built over years through sustained performance and promotion to a loyal
customer base by providing value- Parle-G, Mangola, Microsoft
• High brand awareness and consumer loyalty, difficult to put a value on
Brand Salience
• Brand’s ability to be recalled (come to mind) by customers in a purchase situation
• Propensity of a brand to be thought of or noticed in buying situations (Coburn)
• Print ads more effective than TV. If print ads added to TV, then increase in brand
salience, enhanced memorability of communication & strengthening of brand values.
People multi task while watching TV but are not distracted while reading - INS 2004
• Advertising helps change consumer attitudes toward brand & influences market share
by increasing brand salience, but has limited impact on brand image (Lisette 1998)
MS NMIMS SDL p 98
P&G Positioning: distinct positions, even in same segments (Aaker & Joakimsthaler)
Brand Segment Position
Head & Shoulders Shampoos Anti-Dandruff
Pert Plus Shampoos Conditioner + shampoo
Pantene Shampoos Healthy + shiny hair
Ariel Detergent High Tech Detergent
Tide Detergent Tough cleaning
Cheer Detergent All-temperature cleaning
Bold Detergent Fabric softener
Dash Detergent Concentrated powder
Whisper Sanitary Products Hygienic protection
Vicks Cold Clears blocked nose
Old Spice After Shave Manliness
Crest Toothpaste Cavities
Lifestyle dimensions: (Plummer)

Activities Interests Opinions Demographics
Work Family Own Age
Hobbies Home Social Education
Social Events Job Political Geography
Vacation Community Business Income
Entertainment Recreation Economics Sex
Club Membership Fashion Education Occupation
Community Food Sports Family size
Shopping Media Products Dwelling
Sports Achievements Culture Lifecycle stage
Positioning the company;
Customers Who
How do I reach them
Demographics
Where are my customers Geographies
Segments
Social / economic status
Touch points
Media habits
How do my customers find Media
me Promotion (SPPASMDT, WoM)
Internet
How do my customers Performance, VFM, 4Ps, technology, service, design,
perceive value delivery
How do we best deliver Brick, click, brick and click, click & brick, mail order,
value catalogue
Competition Direct, indirect, generic
Benefits for customers of What needs do they serve, serve better than us, do not
competitive brands serve better
How am I positioned Unique, not unique, competitive advantage
Brand Power Knowledge Matrix

Customer knowledge
Articulated Unarticulated
Ethical brands Experiential brands
(Concern about environment, (Engage and delight customers)
Unmet tradition) Disney
Customer power
Body Shop
Fab India
Rational brands Emotional brands
(Value proposition) (Satisfy psychological & sociological
Domino’s- service needs for identity & status)
Met
Walmart- price HP
Titan- performance Kellogg
Reuters
FCB Grid
Thinking Feeling
High Informative Affective
Involvement Learn-feel-do Feel-learn-do
Low Habitual Satisfaction
Involvement Do-learn-feel Do-feel-learn
Image (symbols, media, atmosphere, and events). An effective identity

 Establishes product‘s character & value proposition.
 Conveys the character in a distinctive way.
 Delivers emotional power beyond a mental image.

 To be conveyed through every available communication vehicle & brand contact.
 Can even be a seller‘s physical space, also a powerful image generator.
 Relevance- customer connect

 Diffferentiation- value addition
 Credibility- deliver on promises & perceptions
 Stretch- extensions, NPD
 Brand Resonance: Describes how to create intense, actively loyal relationships with
customers.
 Brand Value Chain: Describes how to trace the value creation process to better
understand financial impact of marketing expenditures & investments.
Reason to Believe
Co-Branding-Brands sold or marketed jointly with other brands that add value, have
equity, and are perceived as an appropriate fit, exit clause critical- McDonalds- Coke,
Shoppers Stop Citibank, HPCL- Jet
 Logical fit between 2 brands can maximize individual brand advantages, equity,
image
 Generate more sales from existing target market, open additional channels &
opportunities
 Promotional cost reduces, complementary effect
 Disadvantages- brand class, brand eclipse, negative repercussions of
unsatisfactory performance, risk of overexposure, lack of focus
Ingredient branding- Creating equity for materials, components, parts contained within
other brands- Intel inside, Dolby system, Teflon coating,
McDonald's Brand Identity- Rich identity provides several links to customers

Core Value offering McDonald's provides value as defined by the product, special
Identity offers, and the buying experience given the price
Food quality Consistenly hot, good-tasting at any McDonald's in the world
Service Fast, accurate, friendly, and hassle free
Cleanliness The operations are always spotless on both sides of the counter
User Families and kids are a focus, but serves a wide clientele
Extended Convenience McDonald's is the most convenient quick-service restaurant — it is

Identity located close to where people live, work, and gather; features
efficient, time-saving service; and serves easy-to-eat food
Product scope Fast food, hamburgers, children's entertainment
Subbrands Big Mac, Egg McMuffin, Happy Meals, Extra Value Meals and
others
Corporate citizenship Ronald McDonald Children's Charities, Ronald McDonald House
Brand personality Family oriented, ail-American, genuine, wholesome, cheerful, fun
Relationship The family/fun associations are inclusive, and McDonald's is part
of the good times
Relationship The Ronald McDonald Children's Charities engender respect,
liking and admiration
Logo Golden arches
Characters Ronald McDonald; McDonald's dolls and toys
Value Functional benefits Good-tasting hamburgers, fries, and drinks that provide value
Proposition extras such as playgrounds, prizes, premiums, and games
Emotional benefits Kids — fun via excitement of birthday parties, relationship with
Ronald McDonald and other characters, and feeling of special
family times
adults — warmth via link to family events and experiences
reinforced by the Mc- Donald's emotional advertising
Nike Brand Identity

Nike ispresent in different segments like fitness and competitive sports
Core Identity Product thrust Sports and fitness
User profile Top athletes, plus all those interested in fitness and health
Performance Performance shoes based on technological superiority
Enhancing lives Enhancing peoples' lives through athletics
Extended Brand personality Exciting, provocative, spirited, cool, innovative, and aggressive;
Identity into health and fitness and the pursuit of excellence
Basis for Hanging out with a rugged, macho person who goes for the best in
relationship clothing, shoes, and everything else
Subbrands Air Jordan and many others
Logo "Swoosh" symbol
Slogan "Just do it"
Organizational Connected to and supportive of athletes and their sports; innovative
associations
Endorsers Top athletes, including Michael Jordan, Andre Agassi, John
McEnroe, Ronaldo
Heritage Developed track shoes in Oregon
Value Functional benefits High-technology shoe that will improve performance and provide
Proposition comfort
Emotional benefits The exhilaration of athletic performance excellence; feeling
engaged, active, and healthy
Self-expressive Self-expression is generated by using a shoe with a strong
symbolic benefits personality associated with a visible athlete
Credibility Makes performance shoes and clothing that are stylish
Customer & Brand Laddering – Parameswaran
 Brand Associations- Strong, Unique, Favorable

 Brand Promise- Marketer‘s vision of what the brand must be and do for Consumers.
 Brand Elements- Brand names, Slogans, Characters, URLs, Logos, Symbols
 Brand Element Choice Criteria- Memorable, Meaningful, Likeability, Transferable,
Adaptable, Protectable
Exercise- Slogans (Guess the company / brand)

 The Complete man
 Just do it
 The Joy of Flying
 God’s Own Country
 We try harder
 Innovation at work
 This Bud’s for you
 Always low prices
Customer loyalty ladder

Intent- Convert sale into long term customer relationship to mutual benefit
The aim is to convert, retain and regain customers. By laddering
stages of relationship between company and customers, company can
devise specific strategies for customers at each level.
Surveys- Attracting new customers 6 times costlier than retaining
(Harvard)
 Suspect- Potential customer, exposed to your communication
 Prospect- Potential customer, interested in your promotion
 Customers- Purchasers of your product / service
 Clients- Those who return to re/purchase
 Advocates- Convinced and happy about the product / service,
they now promote on your behalf to others
Brand Laddering
"Brand Laddering involves progression from attributes to benefits to more abstract values
or motivations. Laddering involves repeatedly asking what the implication of an attribute
or benefit is for the customer." Strategic Brand Management, Kevin Lane Keller
 Keller- means-end chain takes the following structure
 Attribute (descriptive features) lead to benefits (meaning attached to attributes) which
leads to values (enduring personal goals and motivations).
 Laddering concept is applied in brand positioning. When brand is launched, attributes
and benefits are the focus, but after the basic functionality is established in the
consumers mind, the brand has to deepen the meanings associated with the brand.
 Laddering is not easy, as a clear understanding of the brand's core values is essential
 Failure of laddering up reduces strategic alternatives available to the brand
 Laddering works if consumers are convinced/satisfied with brand‘s basic functionality
 In laddering the brand will break free from product restrictions, which gives lot of
flexibility in extending and communication to the brand manager
 Dove- from ‗moisturiser‘ to " celebrating real beauty "
 Nike- is all about Athletic Performance
 Raymond- classy apparels to "A Complete Man "
 Gillette- Razors to ‗The best a man can get‘
 Moov- backache specialist to ‗ A Woman‘s inner voice‘
 From Mike Parry

Brand Management 3.0 MBA Class Notes: DR Amit Rangnekar

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Brand Management 3.0 MBA Class Notes: DR Amit Rangnekar

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Brand Management- MBA Notes- Dr Amit Rangnekar

Brand Management 3.0

About the Author

Dr Amit Rangnekar, MBA (Marketing) and PhD (Business Strategy)

Embarking onto teaching as a hobby in 2003, Dr Rangnekar is a

Co-ordinates Email amitrangnekar@gmail.com , amit@dramitrangnekar.com

Visit www.dramitrangnekar.com … the homepage for MBA students worldwide

Concise class notes on marketing, branding and strategic management

Objective: Help students understand the concepts of brand-development/ management/ building,

Course Outline: (Total 30 Hours)

Cases from among (Most cases available on www.dramitrangnekar.com)

1 Analysing market opportunities

Intensive Growth Strategies

Current Products New Products

Integrative growth- Vertical-Backward (Reliance- Polyesters), forward (Videocon-Next),

BCG Matrix- Growth Share Matrix- Case

Strategic Marketing Environment

Situation Marketing Marketing Execution

Where do we Where are How do we Are we getting

Competitive forces Barriers & profitability

Competitor rating on critical success factors

Key variables in analyzing competition:

Exercise- 3 examples of products performing at exceptional levels despite intense competition

Product Strategy-Coordinate product mix/lines, brands, packaging & labeling- decisions

Product Levels: The Customer Value Hierarchy

Product Mix - HUL Portfolio- Consumer Product-Mix Width

Home & Personal care Foods

Product line strategy

Packaging and labeling- The 5th P, part of product strategy

A Brand Is More Than a Product

3 New Product Development (NPD)

New Products Types – Breakthrough or incrementally altered products

Identifying new product opportunities

New product development (NPD) Stages

Why new product development (NPD)

Source: Harvard Business Review

Company’s brand decision making: To Brand or Not to Brand?

Customer’s brand decision making (Buying a Shirt upto Rs 1000)

Acceptable Unacceptable Indifferent Overlooked

Purchased Not Purchased

A Brand Personality Scale (BPS): The Big Five

Brand personality of 2 brands competing in premium vodka market for decades

How does Brand Behaviour speak for Brand Personality

Customer Based Brand Equity Pyramid- Keller (Brand Resonance Pyramid)

Building resonance involves a series of steps

Building blocks- structure to build brands with customers

Brand Value Chain (Kevin Keller)

Cognitive brand dimensions

4Cs to create positioning

Brand Ladder (How does a

Crafting the brand positioning

5. Points-of-difference (pod) brand associations- attributes/benefits consumers associate with a

Choosing POPs and PODs

Creating POPs and PODs

Positions that firms successfully have claimed in India

Conser City Sporty /

Positioning the company

Competitive advantage through differentiation, across 5 dimensions:

Brand Promise- What a brand can and must do for customers

Components of a brand’s identity:

Choosing Brand Elements

Developing Brand Elements

Kapferer’s Brand Identity Prism (1997)