Chapter 9

Strategic Brand
Management
 STRATEGIC BRAND MANAGEMENT

▶ Strategic Brand Management

▶ Strategic Brand Analysis
▶ Brand Equity Measurement & Management
▶ Brand Identity Strategy
▶ Managing Brand Strategy
▶ Managing the Brand Portfolio
▶ Brand Leveraging Strategy

9-2
 1) STRATEGIC BRAND MANAGEMENT

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

1) 9-3
 A brand is a name, term, design, symbol, or any
other feature that identifies one seller’s good or
service as distinct from those of other sellers.
American Marketing Association

A compelling logic has been proposed that the

distinction between goods and services should be
replaced by a view that services are the dominant
perspective in the 21st century, consisting of both
tangible and intangible components.*

1) *Stephen LVargo and Robert F. Lusch, “Evolving to a New Dominant Logic for Marketing,” Journal of Marketing, January 2004, 1-17. 9-4
 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 & accurately,

• reduce the buyer’s perceived risk by providing an assurance of quality and

consistency (which may then be transferred to new products),
AVATAR>> incarnation (ex: Gandhi Family)

• 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.

1) 9-5
 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.

1) Source: Marketing Science Institute Report No. 97-422, 1997

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 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 (Next Slide)

Bias Against Innovation (Innovative Pdt may cannibalize the existing

pdt.)

Pressure to Invest Elsewhere

Short-Term Pressures
1) *David A. Aaker, Building Strong Brands, 1996, 26-35. 9-7
 Brand Management Responsibility

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
1) 9-8
 Strategic Brand Management

Brand Identity Strategy

BRAND
EQUITY
Identity Implementation
MANAGEMENT

Brand Strategy Over

Time
STRATEGIC
BRAND
ANALYSIS Managing the Brand
Portfolio

Leveraging the Brand

1) 9-9
 A) STRATEGIC BRAND ANALYSIS

Analyses Product Product Line Portfolio of

Product Lines

□ Market and
Customer

□ Competition

□ Brand(s)

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 Tracking Brand Performance

Performance
Objectives

Select Method(s) for

Evaluation

Identify Problem
Products

Decide How to
Resolve the
Problem
9-11
 Product life cycle
analysis
Financial Product
analysis performance
analysis
Analyzing Brand
Performance

Brand
Researc positioning
h Standardized analysis
studies information
services
9-12
 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

9-13
* Product Performance 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

9-14
B) Brand Equity Measurement &
Management

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 BRAND EQUITY

Company/Customer Value
of Brand Name and
Symbol of
a Product

Determined by the
brand’s set of
assets (and liabilities)

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 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.*

* David A. Aaker, Managing Brand Equity, The Free Press, 1991, 15.
**Ibid, 102-120.

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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.

9-18
 C )BRAND IDENTITY STRATEGY

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
Produc
Private Line
t
Brandin of
g Product
BRAND FOCUS s

Combinatio Corporat
n e
Branding Branding 9-20
D) MANAGING BRAND STRATEGY

Proactive efforts
should be devoted to
managing each brand
over time.

9-21
Strategies for Improving Product Performance

Product
Cost improvement Alter
reduction marketing
Product strategy
Add line Eliminate
new Strategy specific
product(s) product(s)

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E) MANAGING THE BRAND PORTFOLIO

Leverage
Commonalities to
Generate Synergy

Allocate Reduce
Resources Brand
BRAND PORTFOLIO Identity
OBJECTIVES Damage

Facilitate Change Achieve Clarity

and Adaptation of Product
Offerings

Source: David A. Aaker, Building Strong Brands, New York: The Free Press, 1996, 241-242.

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 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

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 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
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F) Brand Leveraging Strategy

9-26
27
9-27
 LEVERAGING ALTERNATIVES

LINE EXTENSIONS BRAND/Category

EXTENSIONS

Horizonta Vertical Anothe Range Co-

l Extensio r Brand Branding
Extension n Product
Class * A brand
Up Down which
from from extends
Core Core across
several
Brand Brand categories,
usually
related
Ex: Oral-
B 9-28
BRAND LEVERAGING IN UPSCALE AND VALUE
MARKETS

Vertical Brand Extensions*

New
Core Up-Market
Brand Brand

New Core
Down-Market Brand
Brand
Ex: Pepsodent Powder
* ONE OF THE MOST DIFFICULT
BRAND PORTFOLIO CHALLENGES
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 MOVING DOWN IS EASY BUT RISKY

❑ Affects perceptions of the brand –perhaps even more

significantly than other brand management options.
We are influenced more by
unfavorable information than by favorable
information.
❑ The brand’s ability to deliver self-expressive benefits
may be reduced.
❑ Potential cannibalization problem.
❑ Potential failure risk.
❑ Problem when the value entry is perceived to be
inconsistent with the quality expected from the
brand.
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 MOVING A BRAND UP

THE DRIVERS
•Enhanced Margins at the High End
•Energy & Vitality
•Enhance Credibility and Prestige of the Brand

THE RISKS OF DAMAGING THE CORE

BRAND
•Lacks Credibility
•Lacks Self-Expressive Benefits
•Falls Short of Expectations
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 BRAND EXTENSION DECISIONS

Extending into Different Product Classes

THE PROCESS
◊Identify product categories for which the product fits and
adds value.
Determine existing brand associations and the
brand identity.
◊Identify related product category opportunities
Screening should be limited
◊Evaluate each category
Attractive
Growing
Good margins
Competition
Assets/Capabilities
◊Select the most promising extension concept
◊Develop a viable Brand Strategy
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 CO-BRANDING

Co-branding (dual branding) involves two or more

established brands making a joint offer of their product
brands —

The participant’s brand names

are identified on the good or
service.

Several different forms –

Component co-branding
(Volvo and Michelin)
Same company co-branding
Alliance co-branding
(Delta and American Express)
Ingredient co-branding
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 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
▪Brand Equity Impact
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 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. 9-35