CRAVENS

PIERCY

8/e
McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc., All

9-2

Chapter Nine
Strategic Brand
Management

McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc., All

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.

Strategic Role of
A strategicBrands
brand perspective

9-6

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 buyers 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.

FOR SELLERS, BRANDS CAN

FACILITATE:

9-7

repeat purchases that enhance the

companys 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
Source: Marketing Science Institute Report No. 97422, 1997
coherent message to the target

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
Managing
Products

9-9

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

Marketings Role in
Product Strategy
1.Market sensing

2.Identifying the
characteristics and
performance features of
products
3.Guiding target market
and programpositioning strategies
Strategic brand management
decisions are relevant to all
businesses, including
suppliers, producers,
wholesalers, distributors,
and retailers.

Strategic Brand
Management

9-11

Brand
Identity
Identity
Implementation
Brand
Strategy
Over Time
Strategi
c Brand
Analysis

Managing the
Brand Portfolio

Leveraging the
Brand

Brand
Equity

Strategic Brand
Analysis
Analyses

Market and
Customer

Competition

Brand(s)

Product

Product
Line

9-12

Portfolio
of
Product
Lines

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
Product
grid analysis

Financial
analysis

Analyzing
Brand
Performanc
e
Research
studies

Standardized
information
services

Brand
Positioning
maps

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

Managements 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

Brand Equity

9-17

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 firms
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).
* David A. Aaker, Managing Brand Equity, The Free Press, 1991, 15.
**Ibid,
102-120.
These
components provide the basis for
developing operational measures of brand

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
Private
Branding

Line
of
Products

Basis
of
Identification
Combination
Basis

Company
Name

9-20

MANAGING
PRODUCTS/BRANDS
Building the
Product/Brand Over
Time
Product Line
Strategies
Product/Brand
Portfolio Strategies

Strategies for
Improving Product
Performance

9-21

Cost
reduction
Add
new
product(s)

Product
Alter
improvement marketing
strategy
Product line
Strategy

Eliminate
specific
product(s)

Product mix strategy

Delete
product
line(s)

Change
product line
priorities

Add new
product
line(s)

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

Product Mix
Modifications

9-23

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
EXTENSIO
N

Minor variants of
a single product
are marketed
under the same
brand name

BRAND
EXTENSIO
N

Extensions of
the brand
name to other
product
categories
--Similar
--Dissimilar

9-25

Leveraging
Alternatives

LINE
EXTENSIONS

Horizontal
Extension

BRAND
EXTENSIONS

Vertical Another
Extension Product
Class

Up from
Core
Brand

Down from
Core
Brand

CoRange
Brand Branding

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

*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
Dont 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 subbranded content

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

9-31

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?