Brand Management

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Brand Management

• 03/02/05

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Brands

• Branding is an important differentiation tool
• It refers to the name, term, symbol or design
  that is used to identify and differentiate your
  product from competing products
• It is like a promise to consumers
• A brand is also like an identity for your product

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Brands

• Brands are important because consumers buy and
  are loyal to brands not products
• Loyalty can be driven by inertia or by preference
• Hence, purchase patterns alone do not adequately
  represent brand loyalty
• There can be different levels of loyalty for a
  brand

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Brand Loyalty
INCREASING LOYALTY
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Advantages of Brand Loyalty

• Reduced marketing costs
• Greater leverage and power in channels
• Ability to charge higher prices
• Ability to launch extensions
• Defense against competitors

Greater profitability
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Brand Equity

• Brand equity is the total value of a brand to the
  company.
• Brand awareness Do people know about your brand?
• Recall
• Recognition
• Mental and emotional associations
• Perceived quality/performance
• Image
• It is closely linked to brand loyalty and depends
  on the number of loyal customers of a brand

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Brand Awareness

• A brand that is not considered cannot be chosen
• A customer cannot consider a brand unless they
  are aware of it

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Brand awareness Recall/Recognition

• Increases likelihood of consideration at the
  point of purchase
• Enhances the salespersons initial contact
  (industrial)
• Enhances in-store promotional efforts
• Increases attention and comprehension of
  advertising

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Brand associations Quality
Profitability (ROI) PERCEIVED RELATIVE
QUALITY inferior moderate superior RELATIVE h
igh 21 27 38 MARKET medium 14 20 29
SHARE low 7 13 20 SOURCE PIMS (Profit
Impact of Market Strategies based on 2,200
business units)
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Brand associations Image

• Brand image is the integration of all experiences
  with and information about a brand as perceived
  and remembered by customers
• The whole is more than the sum of its parts
• Brand image is relative easy to create, but
  almost impossible to change!
• Examples

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Worlds most valuable brands

• 1997 2000 2004
• Coco-Cola Coca-Cola Coca-Cola
• Marlboro Microsoft Microsoft
• IBM IBM IBM
• McDonalds Intel GE
• Disney Nokia Intel
• Sony GE Disney
• Kodak Ford McDonalds
• Intel Disney Nokia
• Gillette McDonalds Toyota
• Budweiser ATT Marlboro

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Types of brands

• Manufacturer vs. private label
• Multi-product vs. Multi-brand
• Mixed brands
• Generic brands
• Co-branding
• International, National and regional brands

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Extending brands

• Line extensions
• Same brand, same product
• Risk cannibalization
• Higher survival rates
• Brand Extensions
• Same brand, different product
• High risk to the original brand if the extension
  fails
• Lower marketing costs
• Brand associations determine success

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Types of extensions

• Upward stretch is when the product quality is
  superior to the current brand quality
• Downward stretch is when the product quality is
  inferior to the brand quality
• 2-way stretch a brand with both high and low end
  presence

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Conclusions

• Consumers are loyal to brands not products
• Different types of brands
• Brand equity is a very important contributor to
  profits
• Brand image is very difficult to change once it
  is established
• Brands can be leveraged to new products