CRAVENS

PIERCY

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McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
 9-2

Chapter Nine

Strategic Brand
Management

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.

 9-3

STRATEGIC BRAND
MANAGEMENT

 Challenges in Building
Strong Brands
 Strategic Brand Analysis

 Brand Identity Strategies

 Managing
Products/Brands
 Managing the Brand
Portfolio
 9-4

CHALLENGES IN
BUILDING STRONG
BRANDS
A product is anything
that is potentially valued
by a target market for
the benefits or
satisfaction it provides,
including objects,
services, organizations,
places, people, and
ideas
 9-5

A brand is a name, term, sign,

symbol, or design, or combination
of them, intended to identify the
goods or services of one seller or
group of sellers, and to
differentiate them from those of
competitors.
American Marketing Association

Goods Versus Services

Services are intangible
consumed at the time they are
produced, often linked to the
people who produce the
services.*

* Leonard Berry, “Services are Different,” Business, May-Jun 1980, 24-30.

 9-6

Strategic Role of Brands

A strategic brand perspective requires
managers to be clear about what role
brands play for the company in
creating customer value and share-
holder value.
FOR BUYERS, BRANDS CAN:
• reduce customer search costs by
identifying products quickly and
accurately,
• reduce the buyer’s perceived risk by
providing an assurance of quality and
consistency (which may then be
transferred to new products),
• reduce the social and psychological
risks associated with owning and using
the “wrong” product by providing
psychological rewards for purchasing
brands that symbolize status and
prestige.
 9-7
FOR SELLERS, BRANDS CAN
FACILITATE:
• repeat purchases that enhance the
company’s financial performance because
the brand enables the customer to identify
and re-identify the product compared to
alternatives,
• the introduction of new products, because
the customer is familiar with the brand
from previous buying experience,
• promotional effectiveness by providing a
point of focus,
• premium pricing by creating a basic level of
differentiation compared to competitors,
• market segmentation by communicating a
coherent message to the target audience,
telling them for whom the brand is intended
and for whom it is not,
• brand loyalty, of particular importance in
product categories where loyal buying is an
important feature of buying behavior.
Source: Marketing Science Institute Report No. 97422, 1997
 9-8

Brand Management
Challenges*
Internal and external forces create
hurdles for product brand managers in
their brand building initiatives:
Intense Price and Other
Competitive Pressures

Fragmentation of Markets and

Media

Complex Brand Strategies and

Relationships

Bias Against Innovation

Pressure to Invest Elsewhere

Short-Term Pressures
*David A. Aaker, Building Strong Brands, 1996, 26-35.
 Responsibility for 9-9

Managing
Products
 Product/Brand Management
 Planning, managing, and
coordinating the strategy for a
specific product or brand
 Product Group/Marketing
Management
 Product director, group
manager, or marketing manager
 Product Portfolio
Management
 Chief executive at SBU
 Team of top executives
 9-10

Marketing’s Role in
Product Strategy
1. Market sensing
2. Identifying the
characteristics and
performance features of
products
3. Guiding target market and
program-positioning
strategies
Strategic brand management
decisions are relevant to all
businesses, including
suppliers, producers,
wholesalers, distributors, and
retailers.
 9-11

Strategic Brand
Management

Brand Identity

Brand
Identity Implementation Equity

Brand Strategy
Over Time

Strategic
Brand
Analysis Managing the
Brand Portfolio

Leveraging the
Brand
 9-12

Strategic Brand
Analysis

Analyses Product Product Portfolio

Line of
Product
Lines

□ Market and
Customer

□ Competition

□ Brand(s)
 9-13

Tracking Product
Performance

Set Performance
Objectives

Select Method(s) for

Product Evaluation

Identify Problem
Products

Decide How to
Eliminate the
Problems
 9-14

Product life cycle

analysis

Financial Product
analysis grid analysis

Analyzing
Brand
Performanc
e
Brand
Research Positioning
studies maps
Standardized
information
services
 9-15

Product Life
Cycle Analysis
Relevant issues in PLC
analysis include:
 Determining the length and
rate of change of the PLC
 Identifying the current PLC
stage and selecting the
product strategy that
corresponds to that stage
 Anticipating threats and
finding opportunities for
altering and extending the
PLC
 9-16

 Product Grid Analysis

 Management’s performance
criteria
 Strengths and weaknesses relative
to portfolio

 Brand Positioning Analysis

 Perceptual maps for brand
comparison
 Buyer preferences

 Other Product Analysis

Methods
 Information Services
 Research studies
 Financial analysis
 9-17

Brand Equity
Effective strategic brand management requires that we
understand brand equity and evaluate its impact when
making brand management decisions:
“Brand equity is a set of brand assets
and liability linked to a brand, its name,
and symbol, that add to or subtract
from the value provided by a product or
service to a firm and/or to that firm’s
customers.*
Measuring Brand Equity . Several measures are
needed to capture all relevant aspects of brand
equity.**
• loyalty (price premium, satisfaction/loyalty),
• perceived quality/leadership measures (perceived
quality, leadership/popularity),
• associations/differentiation (perceived value, brand
personality, organizational associations),
• awareness (brand awareness), and
• market behavior (market share, price and
distribution indices).
These components provide the basis for developing
operational measures of brand equity.
* David A. Aaker, Managing Brand Equity, The Free Press, 1991, 15.
**Ibid, 102-120.
 9-18

BRAND IDENTITY
STRATEGIES
Brand identity is 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 organization
members.*

Four Brand Identity Perspectives

Product
Organization
Person
Symbol
* David A. Aaker, Building Strong Brands, 1996, 68.
 9-19

Specific
Product
Line
Private of
Branding Products
Basis
of
Identification

Combination Company
Basis Name
 9-20

MANAGING
PRODUCTS/BRANDS

Building the
Product/Brand Over
Time

Product Line Strategies

Product/Brand Portfolio
Strategies
 Strategies for
9-21

Improving Product
Performance
Product Alter
Cost improvement marketing
reduction strategy

Add Product line Eliminate

new Strategy specific
product(s) product(s)

Product mix strategy

Delete Add new

product Change product
line(s) product line line(s)
priorities
 9-22

Strategies for
Brand Strength
 Brand-Building Strategies
– Developing the brand identification
strategy
– Coordinate identity across the
organization
 Brand Revitalization
– Find new uses for mature brands
– Add products related to heritage
 Strategic Brand Vulnerabilities
– Brand equity can be negative
– Retailer private brands compete with
manufacturer brands
– Major shifts in consumer tastes
– Competitive actions
– Unexpected events
 9-23

Product Mix
Modifications
Motivation for changing the
product mix:
 Increase the growth rate of the

business
 Offer a more complete range of

products to wholesalers and

retailers
 Gain marketing strength and

economies in distribution,
advertising, and personal
selling
 Leverage an existing brand

position
 Avoid dependence on one

product line or category

 9-24

Brand Leveraging
Strategy

LINE Minor variants of a

single product are
EXTENSIO marketed under the
N same brand name

BRAND Extensions of
the brand name
EXTENSIO to other product
N categories
--Similar
--Dissimilar
 9-25

Leveraging
Alternatives

LINE BRAND
EXTENSIONS EXTENSIONS

Horizontal Vertical Another Co-

Range
Extension Extension Product
Brand Branding
Class

Up from Down from

Core Core
Brand Brand
 9-26

BRAND LEVERAGING
EVALUATION
CRITERIA
Brand Relevance/Differentiation
Capabilities/Perceived Value
Match
Market/Segment Opportunity
Cannibalization Risks
Potential for Core Brand
Damage
Clarity of Product Offerings
Estimated Financial
Performance

 9-27

SEVEN DEADLY SINS

OF BRAND
MANAGEMENT*
Failure to fully understand the
meaning of the brand.
Failure to live up to the brand
promise.
Failure to adequately support the
brand.
Failure to be patient with the brand.
Failure to adequately control the
brand.
Failure to properly balance
consistency and change with the
brand.
Failure to understand the complexity
of brand equity measurement
and management.
*Kevin Lane Keller, Strategic Brand Management, Prentice Hall, 2003, 736.
 9-28

MANAGING THE BRAND

PORTFOLIO
 Objectives:
– Leverage commonalities to
generate synergy

– Reduce damage to brand identity

– Obtain clarity of product offering

– Enable change and adaptation

– Guide resource allocations among

brands

Source: Aaker, Building Strong Brands, 1996.

 9-29

GLOBAL
BRANDS
 International markets:
strategic branding
challenges
 Global brands supported by
increasingly cosmopolitan
consumers in many
countries
 Don’t build global brands but
strive for global brand
leadership
 Challenge for MNCs:
managing brand systems
containing global, regional,
and local brands
 9-30

Internet Brands
 Interactivity enhances brand
relationships and corporate
reputation
 Guidelines for a website used to
reinforce an existing brand
Create a positive experience (ease
of use, value, interactive,
personalized, timely)
Reflect and support the brand
Synergy with other communication
programs
Provide home for loyalists
Differentiate with strong sub-
branded content

Source: Aaker and Joachimsthaler, Brand Leadership, 2000, 242.

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HOW MANY
BRANDS?
1. Is it different enough
to merit a new name?
2. Will the brand identity
add value?
3. Are there risks in
using an existing
brand name?
4. Is the new brand a
viable business
venture?