Brand Management

Lecturer: Cecilia Pasquinelli

MSc International Marketing & Management
How the 3
analysed models
combine?

Brand Meaning
(what are you?)
 Identification and
establishing of
brand positioning
and values Brand Positioning model

Strategic Brand Plan and

Grow and Sustain Management implementation of
Brand Equity Process brand marketing
programs

Measure and
Interpret Brand Brand Resonance model
Performance
Source: Keller 2012
Brand Value Chain
Tools to design brand management
strategies in multi-brand companies
u Brand-product matrix
u Brand hierarchy
 Brand-Product Matrix: A tool to design brand
management strategies
The tool highlights the brand mix and
product mix: towards the design of the
relationships amongst brands
Brand-Product Matrix
(Source: Keller, 2013, p. 387)
Product line: the set of product in the same
category, offering similar benefits, sold to the
same segments (similar prices, same channels). A
product line can correspond to one or more brands
(columns of the brand-product matrix)
Product mix: the whole set of products (all the
columns of the brand-product matrix)
By raw: brand-product
relationships (brand line)
telling about the set of products
(in the same or other
categories) sold under a specific
brand and so informing on brand
extension strategies (category
and line extensions)
By column: product-brand
relationships (brand portfolio
strategy) telling about the set
of brands and brand lines that
a particular firm offers for sale
to buyers in a particular
category, informing on nature
and number of brands in a
specific category (use of
different brands for addressing
different market segments à
issues of brand portfolio
management)
Key principle to structure a brand porfolio:

to maximize market coverage and minimize brand overlap

• Responding to different segments
• Responding to similar segments differently (responding
to customers that like change): a costly strategy with
risks...
• Risk of cannibalization between brands of the same
company (need for pruning?)

Overall aim: to maximize overall brand equity

• (generally) any brand in the portfolio has not to
decrease the equity of the other
• Ideally, the combination and co-presence of the brand
in the portfolio maximize the brand equity (synergy)
 • Circles = customers
Risk of cannibalization • Intersections= customers stepping
from one brand to another
• Potential market= rectangular area
• Marca X (Brand x) = the set of
(old brand)
competing brands
(Brand x) (old brand)

(Brand x)
(new brand)
(new brand)
• What is the best and
(Brand x) (old brand) (Brand x) (old brand) worst case?

(new brand)

(new brand)

The case of a new brand launch in a (Source: Lambin, 2016, p. 364)

multi-brand company
 • Circles = customers
Risk of cannibalization • Intersections= customers stepping
from one brand to another
• Potential market= rectangular area
• Marca X = the set of competing
(old brand) brands

(Brand x)
Case 1: the new brand gives no market
(new brand) advantages while sharing the same
market with the old brand

Case 2: the new brand extends the

firm’s market share without, however,
‘stealing’ customers to the competitors

Case 3: the new brand address the

market occupied by the old brand and
by the competing brand; it also expand
the market

The case of a new brand launch in a (Source: Lambin, 2016, p. 364) Case 4: the best case, no
multi-brand company cannibalization.
The case of Coca-Cola Zero and Coca-Cola Light
(Italian market): A planned cannibalisation?
u 2007 launch of Coca-Cola Zero, adding to Coca-Cola
Light as «healthy» drinks à perceived as the same by
many consumers
Why this choice? A «planned cannibalization»
Ø Different target segments: addressing men, a segment
that had remained uncovered by Coca-Cola Light;
while strengthening the female target for Coca-Cola
Light (e.g., cobranding with Maybelline New York in
2009)
Ø Different positioning
Ø Different communication policy
u A «cannibalization effect» was forecast (10% sales
from Coca-cola classic and 25% from Coca-Cola Light):
however, the overall sales would have grown
u A successfull strategy: first stage à a degree of
cannibalization; second stage à the % of light cola-
drinks doubled over the total cola sales (C-C Light
Source: Lambin, 2016, p. 365
from 6% to 5.3%; C-C Zero reached 6.5%)
 Branding strategy in multi-product and multi-
brand companies.

Two dimensions characterising branding

strategies: We spoke
of
• Breadth: brand-product relationship in
breadth
relation to brand extension strategies (how and
much the brand is “extended” by line and depth in
by category; how many products are what
covered by a brand?) other
context?
• Depth: product-brand relationship in
Brand-Product Matrix relation to choices of portfolio structuring
(Source: Keller, 2013, p. 387)
and the brand mix (how much the company
is “deep” in filling a certain product
category with its brands; how many brands
cover one product category?)
Brand roles in the portfolio
Possible roles of brands in the brand portfolio
(Source: Keller, 2013, p. 394, p. 396)
Flagship brand: flagship brand,
representing the company to consumers
(the most recognizable and with higher
equity)
Flankers: creating POPs (competitive
POPs) with competitors to support the
advantage of the flagship brand of the
company
Cash cows: profitable and high sales,
despite no marketing
Low-end/high-end (price/quality):
brand line extremes from low-end
attracting to store to high-end giving
credibility and prestige (highly
profitable).
Brand portfolio optimization

u Two important questions for portfolio optimization (maximising

market coverage and minimizing overlaps):
u What role does the single brand play in the portfolio?
u What positioning for the single brand?
Brand hierarchy

u A tool to summarise the branding strategy of a company by looking at the

brand elements and their combinations – either distinctive or in common
across the owned products – revealing the company’s branding strategy
u What relationships (closeness) across the branded products?
u What distance is built across the branded products?
u The brand levels structuring the hierarchy:
u Company or corporate (group) brand
u Family brand
u Individual brand
u Modifier (distinguishing the specific model)
u Product descriptor (additional, not properly brand element but it helps the
positioning)
Family brand:
Buitoni
An
umbrella
for more
than one
product
category,
but it is
not the
corporat
e brand

Corporate
brand
Corporate brand

Individual brands

Family brands
Family
brand Modifier

Individual brand Product descriptor

u The potential contribution of each hierarchy level to brand value creation:
u Corporate / company brand: not necessarily both are known by the customer; it
may be crucial in the branding strategy; increasing role of some associations such
as the social responsibility (also in relation to workers treatment, human
rights) and reputation of the organization; it may be composed of a broader set (including
services)
of associations than the single products; it is created over time, by means of
the offered products, general behaviour and communication; growing
acknowledgement of the role of the corporate/company brand in highly
competitive markets
u Family brand: the company brand can not be equally effective (with its
associations) in relation to any product the company offers, so the family brand
Source: Keller, 2013
can be a good option to introduce more specific associations to the “family”
(e.g., Nestlè is the corporate brand encompassing Kit Kat and Buitoni, two very
different brands)
u Individual brand: it gives the opportunity to personalise the brand and the
marketing programme for the specific target; it may help isolate the product
brand failures (limiting the impact on the company brand)

Adding levels in the brand hierarchy:

- Gives opportunity to enriching and differentiating brand
associations (a dedicated positioning)
- Implies additional marketing expenses
- It adds specificity and sophistication but it may also result to
complex and articulated to understand for the customer
Strategic management:
Developing a Brand Architecture
 Brand architecture strategies

Source: Aaker & Joachimsthaler, 2000

u Brand architecture:
u How to sustain, nurture and maintain brand equity
u Relevant to multi-product companies
u Diverse products for different segments
u Diverse products for different (geographical)
markets
u Diverse products in the same category, segment,
(geographical) market
u Diverse products in different categories

u Aim:
u To clarify brand awareness (improving consumer Source: Douglas & Craig, 2001
understanding)
u To improve brand image (transferring or not brand
associations within the portfolio)
Designing a brand architecture

u Defining the number of brand levels in the hierarchy

u Principle of simplicity: the lowest possible number of levels
u Defining desired brand awareness and image at each level (considering trade-offs)
u Principle of relevance: creating as abstract (yet relevant) associations as possible to
be adequate to the largest possible number of products
u Principle of differentiation: to differentiate single products as much as possible
u Considering the opportunity to use a brand element for more products
u Principle of commonality: the more common elements products share, the stronger
the linkages between them
u Defining combinations of brand elements from the different levels for the individual
product
u Principle of prominence: defining what brand element should be relatively more
visible compared to the others (larger, more distinctive, appearing first)
(from Keller’s handbook)
Defining the brand architecture

u Defining the brand architecture means to specify the brand elements and
positioning associated with the specific products/services for the brand
u A strategic decision to make when launching a new product
The two possible “extreme” strateges
80 major brands with
limited link to P&G

House of Brands
Branded House strategy
strategy (a collection of
(umbrella corporate individual brands
or family brand for with different brand
all products) elements)
Source: bristolcreativeindustries.com
 Framing different
The brand relationship spectrum relationships between
parent/master brand
(corporate/company/fami
ly brand) and the
u This is a brand architecture tool to support brand
endorsed/sub-brand
strategists
(family brand, individual
u A range of strategies to: brand)
u Allow brands to stretch across products and markets
u Address conflicting brand strategy needs
u Protect brands from being diluted by over-stretching
u Signal that an offering is new and different
u A continuum that involves 4 basic strategies and 9 sub-
strategies
u In choosing the most suitable strategy one would need to
look at the specific «driver role» that each brand plays
in influencing the purchase intentions of consumers.
(Source: The Brand Relationship
u A mix of strategy can be employed Spectrum: the key to the brand
architecture challenge,
Aaker & Joachimsthaler, 2000)
 Driving role of
the individual brand

Driving role of
the corporate or
family brand
 House of brands: (individual brand is the driver) an
independent set of stand-alone brands, each maximizing
the impact on a market. This strategy renounces to the
economies of scale of marketing and synergies which come
from leveraging a brand (and its elements) across multiple
Synergies & economies of scale in marketing

businesses.
A very costly strategy overall: some brand has no
opportunity to make significant investment and risks
decline or stagnation.

Not connected - An appropriate strategy when:

• Targeting niche markets with very focused value
proposition
• Avoiding brand associations that would be incompatible
with the offering (the corporate brand and the other
related brands would hamper the niche brand)
• Signalling the advantages of new offering
• Avoiding or minimizing channel conflicts

Shadow endorser – only few consumers know there is a link

between the parent brand and the endorsed brand (not
visibly linked). The endorsed brand represents a totally
different brand but the organization is backing the brand
Source: Aaker & Joachimsthaler, 2000
Individual brand Corporate brand

Shadow
endorsers
 Driving role of
the individual brand

Driving role of
the corporate or
family brand
Endorsed brands:
Nestlè endorsing Kit-Kat when
Still the independence (individual brand is the driver, acquiring it in 1988 to establish
but...) of the house of brands but there is a visible
itself more in the UK market
endorsment by an established brand that provides
credibility and substance (strong endorser), even though it where Kit-Kat was a leading
plays a minor driver role. national brand.
This may also provide useful associations to the endorser (in
some case this prevails over supporting the endorsed
brand).

Token endorser – minimal presence of the master brand just

to give some credibility and ressurance (less visible, less
prominent). To be useful the endorser has to be highly
reputable.

Linked Name – A link provided by the presence of part of the

endorser’s name which is so strong to boost the link to the
brand in people’s minds
Sub-brands:
Brands connected to a master or parent brand and augment and modify the
associations of that master brand. The master brand is the primary frame of reference
(master as driver), which is stretched by sub-brands that add associations (functional,
symbolic...).
The sub-brand extends the master brand into a meaningful new segment.
A closer link than endorser-endorsed brands. Such stronger link can also imply risks for
the master brand.
Subbrand as co-driver – both master and sub-brand have a major driver role (e.g.
Apple-iPhone)

Branded house:
Use of a single master brand (master is the driver) to span a set of offerings that
operate with only descriptive sub-brands; a large number of products under the master
brand. The master brand becomes a dominant driver (not just primary as in the
subbrand strategy). The subbrand is a mere descriptor with little or no driver role.
There is a risk of dilution and loosing appeal as spanning several different markets and
this strategy can limit the opportunity to serve specific groups. However, this strategy
maximizes clarity, synergy and leverage.
«It should be the default brand architecture option. Any other strategy requires
compelling reasons» (Aaker & Joachimsthaler, 2000, p. 15)
International markets: Same brands with different identities – when the same brand is
used across products, segments, and countries, different brand identities (brand A popular form of
elements) may be needed under the same brand name: the same brand identiy may not
work in different contexts, at the same time too many brand identities are not brand extension
manageable and costly.
 Step 3: Branding new products and services: how to position the new product in the
brand portfolio (what strategy is the firm employing?)

Higher
Lower synergies,
synergies,
limited
capitalising on
capitalisation on
the existing
the existing brand
brand assets,
assets, higher
lower costs
costs BUT lower
BUT high risk
risk of dilution,
of dilution,
lower risk of
negative
negative effects on
effects on the
the existing
existing
brands...
brands...

A balance of brand equity and cost implications

related to the marketing programmes
 House of brands, Endorsement, Sub-brand or Branded house?
Family
brand

Endorsed brand: Token

endorser – minimal
presence of the master
brand just to give some
credibility and
ressurance (less visible,
less prominent). To be
useful the endorser has
to be highly reputable.

Corporate
brand
 House of brands, Endorsement, Sub-brand or Branded house?

Endorsed brand:
Strong endorsement
 House of brands, Endorsement, Sub-brand or Branded house?

Branded house – same

identity
 House of brands, Endorsement, Sub-brand or Branded house?

Sub-branding – sub-
brand as co-driver
Brand extension

u Brand extension strategy are considered when a new product has to be

launched
u Capitalise on existing brands (brand extension)?
u Or launch a new brand?
u From scepticism for the this strategy (following the “one brand-one product”
approach) to understanding the potential of this strategy
u A strategic option for firm’s growth
u Need to balance advantages and disadvantages
Assessing the opportunity for brand
extension
Ansoff’s Growth Matrix
(product/market expansion grid to
reflect on modalities of growth for a
firm)
Two ways to categorize growth
strategies:
• Through existing or new product
• Focusing on existing or new
market
When introducing a new product, three
strategies are possible:
1. A new brand (a very risky and costly
choice)
2. Brand extension (application of an
existing/established brand, the
parent brand) (not without risks!)
3. A combination of new and existing
brand (various options in the brand
relationship spectrum)
 Brand extension is a strategy based on
leveraging brand equity to support the new
product launch

• New product launch often fail (8 out 10!): brand

extensions increase success rate although they carry on
risks
• Brand extension for the majority of new products:
there is however a significant chance of failure
(Volkner & Sattler, 2006)
• Any sector has its characteristics: e.g., in the
technology markets there is a trend of adopting new
brands for new products (endorsement can be however
very important!)
Brand extension

u Two typologies:
u Line extension: application of parent brand to a new product that
targets a new or old market segment within a product category
the parent brand currently serves (e.g. adding different flavour,
ingredient variety, different form/size...)
u Category extension: application of the parent brand to enter a
different product category from the one it currently serves (also
addressing the same already known market)
u Vertical extension:
u Providing a version of the product in the same category but with a lower (or higher)
price (vertical extension towards higher prices is very difficult)
u Forms of sub-branding: identifying the new product at a lower price
u Risky strategy for prestigious brands (lower price policy) – loosing sense of
exclusivity?
Important question: On
what basis this
extension was possible?
What type of brand extension
in this case?

Brand extension – line

extension
What type of brand extension
in this case?

Brand extension –
Category extension