Brand Management Notes 3.0

Brand Management- MBA Notes- Dr Amit Rangnekar

Brand Management 3.0 MBA Class Notes

Dr Amit Rangnekar [email protected] For MBA Class Notes and Case study presentations on strategic management/ brand management/ marketing management, visit

www.dramitrangnekar.com www.dramitrangnekar.com

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About the Author Dr Amit Rangnekar, MBA (Marketing) and PhD (Business Strategy) from NMIMS, Mumbai, has over 2 decades of progressively responsible pharma industry experience with Centaur Pharmaceuticals. In 2006 Dr Rangnekar was awarded a 10 nation scholarship to Europe by the Government of Denmark to complete his doctoral research. His co-authored book "Cases in Indian Management" was launched in Mumbai, Dubai and London in 2008. Embarking onto teaching as a hobby in 2003, Dr Rangnekar is a visiting faculty at Mumbai's leading B-Schools. His repertoire of insightful notes and compelling case studies have added value to over 10,000 MBA students. He shares his thoughts and knowledge with a global audience through his immensely popular website and blog, which have together clocked over 900,000 hits. Dr Rangnekar has presented on various business case studies on marketing, branding and business strategy, at B-schools and corporates across India and Europe. He has been a faculty at global leadership programmes of numerous Fortune 100 companies in Europe and Asia. He is also an external guide for two PhD research scholars. Co-ordinates Email [email protected] , [email protected]

Visit www.dramitrangnekar.com … the homepage for MBA students worldwide

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Concise class notes on marketing, branding and strategic management  Researched Case studies in power point presentation (ppt)  Tips on PhD, Pharma and deliverables  Various publications of the author, Insights into pharmaceutical industry Notes adapted through readings, cases and notes from- Harvard Business School/ Review, Ivey, Stanford, Kellogg, MIT Sloan, LBS, Insead, Wharton, Emory; publications by Porter, Kotler, Keller, Kapferer, Nirmalya Kumar & Mckinsey; Economic Times, Indian and international business magazines, and the internet. Garnished with my own experience, insights & knowledge.

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Contact Me

Brand Management- MBA Notes- Dr Amit Rangnekar Objective: Help students understand the concepts of brand-development/ management/ building, and crafting the brand strategy, through interaction and cases. Evaluation (%): Group Presentations 40%, Class Participation10%, Final Exam 50% = 100% Course Outline: (Total 30 Hours) Topics 1 Analysing- Environment, Competition, Market opportunities, Gaps, 2 Product- concepts, packaging, brand hierarchy 3 New Product Development 4 Brand management - Concept, Associations, Company‘s/ Customer‘s brand decision making, Brand Personality, Keller‘s CBBE, Brand Value Chain 5 Brand positioning strategy, Frame of reference 6 Brand Identity- concept, execution, Kapferer‘s Prism, Brand Identity Planning Model 7 Brand Architecture & portfolio management 8 Brand Equity9 Brand valuation

Pg 3 7 9 11 18 23 27 34 41

Cases from among (Most cases available on www.dramitrangnekar.com) Adidas v Nike- Brand Identity Dolce & Gabbana- Fashion Brand Parle G- Brand Building Aircel- Service Branding Dominant Brands Rolex- Luxury Branding Amar Chitra Katha- Kid Brand Gillette- Brand Extensions Tata Nano- NPD Amul- Umbrella Branding Horlicks v Complan- Brand Equity Titan- Brand Architecture Audi- Brand Identity Kellogg- Brand Valuation Vodafone-Speed Branding Bisleri- Brand Building Kellogg- Brand Failure Wipro- B2B Branding Chanel- Branding to ladies Mont Blanc- Luxury Branding ZooZoos- Brand Campaign Chic Shampoo- Rural Brand Natural Ice Cream- Buzz Branding Kancheepuram Sari- Ethnic References Brand Management Notes www.dramitrangnekar.com Brands & Branding- The Economist Strategic Brand Management- Keller 3e / Kapferer 4e Marketing Management- Kotler 13e Brand Equity- Aaker, Brand Leadership- Aaker Asian Brands- Martin Roll Websites- Mckinsey Quarterly, Harvard Business school, India knowledge @ Wharton Notes adapted through readings, cases and notes from- Harvard Business School/ Review, Ivey, Stanford, Kellogg, MIT Sloan, LBS, Insead, Wharton, Emory; publications by Porter, Kotler, Keller, Kapferer, Nirmalya Kumar & Mckinsey; Economic Times, Indian and international business magazines, and the internet. Garnished with my own experience, insights & knowledge. Best Wishes Dr Amit Rangnekar

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1 Analysing market opportunities Strategic gap analysis

Intensive Growth Strategies Ansoff’s Product-Market Expansion Grid- Case- Maruti Suzuki

Current Markets New Markets

Current Products Market Penetration Launch 800, grabbed market share on styling, fuel economy, affordability Market Development Launch in class II-IV towns, easy loans, higher payback periods

New Products Product Development New models Van, Zen, Esteem, Wagon R, Baleno, Swift, SX4 Diversification Training schools, Auto insurance, True Value cars,

Integrative growth- Vertical-Backward (Reliance- Polyesters), forward (Videocon-Next), Horizontal- M&A (HLL-Lakme) Diversification growth- Reliance Retail BCG Matrix- Growth Share Matrix- Case Classifies product portfolio into categories, firms should have a healthy balance. Dogs- Low market share & low market growth. Phase out / tweak, invest & build Question Mark/Problem Child- Low market share, operate in high market growth. Entry level, brand may ascend / descend / stagnate- important to build. Star- High market share, operate in growing market. High growth but high promotional cost, need to be sustained. Cash Cow- Mature products generate high cash, but low growth. Sustain, they generate funds for new projects and maintaining portfolio. www.dramitrangnekar.com

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Strategic Marketing Environment


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Brand Management- MBA Notes- Dr Amit Rangnekar Marketing Plan A marketing plan aims to help organize and implement the marketing strategy for its products or services. Part of the overall corporate objectives.

Situation Analysis

Corporation Customer Competition Conditions Opportunities Dynamics

Marketing Objective

Marketing Strategy

Leadership Rank Geographic Share Profits Growth

Mktg Research Segmentation Targeting Positioning Differentiation Mix- 4Ps Prod Life Cycle

Where are we?

How do we get there?

Where do we want to go? Competitive forces


Execution Control

Projections Orgl Structure Implementation Performance Review

Are we getting there?

Barriers & profitability

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Brand Management- MBA Notes- Dr Amit Rangnekar Analysing Competition: Consolidated / fragmented, Monopoly/ duopoly/ oligopoly, Industry structure Leader, challenger, follower, nicher Market structure Broad competition Generic competition Direct competition Broad / narrow Lines Competitor rating on critical success factors Competitor Awareness Quality Availability

Range

Technology

Service

A B C Key variables in analyzing competition:  What segments do they serve? What products do they offer? What channels do they use? What pricing strategies have they pursued? What management resources do they have? What financial resources do they have? What are their objectives? What are their core competencies? What alliances are they pursuing, and for what purpose? How successful are they in the marketplace?  Share of market /voice /mind /heart? Competition Direct Category Need fulfilled

Indirect Product Generic Competitors Competitors

Brand Competitors

Basic requirement

Market products similar customer features, benefits & price

Beverages

Refreshment

Chocolates Films

Dessert/ snack Entertainment

Cars

Transportation

Coke, Pepsi Thums Up Dairy Milk, 5Star Celebrations PVR Fame Adlabs Maruti, Hyundai Tata


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Compete in same class, but differ in features, benefits & price Tea, Nimbu Pani Mineral water Mithai, Namkeens Ice creams, Fruits Single screen Drama theatre Small cars, Big cars, SUVs

Market different products to solve same problem, satisfy same basic need Regular water Aniseed/Saunf Candy, Sugar TV, Shopping Reading, Internet Taxi, Auto, BEST, Local train, Walk

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2 Product ―We lead the public with new products than ask them what products they want. They don‘t know what‘s possible, but we do. So instead of doing a lot of market research, we try to create a market for a product by educating them‖ (Akio Morita, Sony)  Product- offered to satisfy a want or need. Judged on features, quality, services mix and price.  Product differentiation- Choice of form, features, performance quality, conformance quality, durability, reliability, repairability, and style. PQRSTUV  Services differentiation- Ordering ease, delivery installation, customer training, customer consulting, maintenance and repair  Convenience items purchased frequently, immediately, with minimum effort.  Capital goods last long and are purchased infrequently by consumers.  Commodities- where physical differentiation is difficult Exercise- 3 examples of products performing at exceptional levels despite intense competition Exercise- Select 1 convenience & 1 capital good, compare & contrast consumers value hierarchy. Product Strategy-Coordinate product mix/lines, brands, packaging & labeling- decisions Product Levels: The Customer Value Hierarchy To plan the market offering, a marketer must consider 5 product levels that encompass the augmentations & transformations the product ultimately undergoes. Each level adds more customer value, the 5 levels constitute a customer value hierarchy. Product Levels Core Basic Expected Augmented Potential

What it means

Marketers Job

Product bought Benefits Attributes & conditions Exceed expectations

Provide benefits Turn benefit to product Minimum buyer expectations, price, convenience, location- important (EM) Augmented benefits become expected benefits, competitors step in- important (developed markets) Anticipate & innovate

New ways to satisfy/differentiate

Hotel Customer Place to sleep Bed, bath, closet Clean bed & toilets, peace Satellite TV, Tea machine, Internet Customised service

ITC Hotels Budget-Fortune 5-Star- Welcome Super deluxe ITC Welcom Heritage Palaces, forts

Product Mix - HUL Portfolio- Consumer Product-Mix Width  Product line- group of brands closely related by functions & benefits- Dell PC, Nokia mobiles  Product mix- total set of brands marketed by a firm, may contain product lines  Width- product lines in the mix- HP PCs, Laptops, Printers within home & business segments  HUL 11 lines (Personal wash, laundry, skin care…….)  Length- total number of items in the mix- 25, average length is 25/11 = 2  Depth- Variants of each product in the line- Lux has 4 fragrances and 2 sizes, so 8  Deciding which product lines to grow, maintain, harvest, and divest? www.dramitrangnekar.com

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Pepsodent Close Up

Axe Rexona

Lakme

BB Lipton

Bru

Kissan Knorr Annapurna

Ice cream

Sunsilk Natural Clinic

Foods

Oral care

Fair & lovely Ponds

Coffee

Hair care

Surf Excel Rin Wheel

Tea

Skin care

Lux Lifebuoy Liril Hamam Breeze Dove Pears Rexona

Colour cosmetics

Laundry

Length

Personal wash Product line

Foods Deodorants

Home & Personal care

Kwality Walls

Product line strategy  Upgrade customers - Maruti 800, Alto, Zen , Wagon R  Cross-sell- HP printers, PC & Laptops, Godrej- Washing machine, TV, fridge, microwave, AC  Line-stretch- popular(Titan), mass(Sonata), premium(Xylys), youth (Fastrack), ethnic (Raga)  Line fill- Maruti variants AX, LX, VX; I-Pod- nano, shuffle, classic, 80/40/20/8/4gb  Line prune- Reduce unwanted / unprofitable- Maruti Gypsy Packaging and labeling- The 5th P, part of product strategy Packaging- 3 levels: Primary, Secondary, Shipper, Insert  Promotional value- packaging is buyer‘s 1st product encounter- can turn on or off  Functional components- protection in transportation & storage, usage, convenience, ease of use, storage, convey usage information & instructions  Aesthetic components- Design, size, shape, material, color, text, graphics- harmonizing Labeling- Identifying product or brand, grading, describing the product, adhering to regulatory requirements, promote through attractive graphics. Warranties & Guarantees- Expected product performance level by manufacturer, reduces a buyer‘s perceived risk, helps when not so well-known product‘s quality is superior to competition. A Brand Is More Than a Product


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3 New Product Development (NPD) NPD- risky but if based on a sound foundation- market segmentation, understanding and targeting customers - reduces risk. If NPD is first and then you figure out how to market, it usually leads to disaster. Exception- Alexander Bell invented the Telephone, but it was an innovation. Today- NPD compete with similar products /effective substitutes and customers are spoilt for choice as well as bombarded by product and marketing messages. New Products Types – Breakthrough or incrementally altered products Breakthrough Incremental  New to the world performance features  Improvement in existing product  Huge advances in performance  Derivative of existing platform  Dramatic cost reduction  Exploits existing forms / technology Higher risk Lower risk Infrequent More frequent Costlier Less costly Targets new /existing markets Targets existing/ adjacent markets Marketer’s responsibility  Envision market  Create demand  Educate market Change the basis of industry competition: • Electric lighting, antibiotics, microwave, credit card, transistor, heart pacemaker, hip and knee replacements, GPS

 Listen to existing market  Accommodate current demand  Intel‘s Pentium IV computer chip- incremental improvement over Pentium III as they share same fundamental technology  Incorporated design improvements that enhanced chip performance  Windows, MS Office, Play station

Exercise: Course of NPD in your industry over L10Y- what changed the basis of competition, what were the real breakthroughs, which were only incremental? What are the new technologies / products lined up, how will they affect your company and competitors when launched, in terms of sales and profitability? Identifying new product opportunities

Unexplored Opportunities

Exercise: For an industry of your choice, identify the unexplored opportunities in every quadrant, and identify the players who operate in each quadrant. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar New product development (NPD) Stages  Idea generation- Employees, Sales force, Trade, Competitors, Customers  Idea screening- Feasible, Workable, Practical  Concept development and testing- Feedback from target audience  Marketing strategy- Mix (4Ps), STPD, Targets, Projections, Geographies  Product development- Final touches & Mfrg  Test Marketing- Geography or Segment  Commercialisation- National / Global launch Why new product development (NPD)  Changing customer needs – Diet Coke, Saffola  New Segment Entry- Maruti SX4  Changing market needs- Scooters to Bikes  Own successes- Brand / line extensions- Maggi  Competitive Successes- Krackjack- 50:50, Marie  New Capabilities- UB Group  New Concepts- Suzuki Swift, Tata Ace / 1L Car  New technology- I-Pod, I-Phone, TV  Product lifecycle- MS Office, Play Station 1,2,3  Portfolio / Business realignment- Reliance Mobile  Environmental changes- Music downloads

Source: Harvard Business Review


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4 Brand Management Brand  ―Promise‖ Harish Bijoor  ―Strategic Asset‖ Nirmalya Kumar  “Functional, Economic & Emotional Value Propositions” –Deepak Jain  “A collection of perceptions held in the mind of the consumer” Susan Fournier  “A name, term, sign, symbol or design, or their combination, intended to identify goods & services of a business or group of businesses and differentiate them from competitors” Kotler  “A mixture of tangible and intangible attributes symbolised in a trademark, which, if properly managed, creates influence and generates value” Interbrand Brand exists in our mind, as a collection of associations or feelings. Branding endows the product with the power of a brand by creating signals that generate these associations. Blend tangible and intangible attributes to differentiate in an attractive, meaningful and compelling way that target consumers care about. Brands command premium, high margins, better availability & wide customer loyalty. Products deliver series of core benefits to consumers (Watches- time) but consumers pay a premium for added value (lifestyle accessory) that enables a brand to differentiate itself from competition. This helps a customer choose or prefer the brand. Mercedes, Sony, Apple. US brand leaders in the 1930s- J&J, Heinz, Colgate, Disney, Coke- are leaders even today Company’s brand decision making: To Brand or Not to Brand?


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Brand associations The brand stays as a set of associations in the mind of the customer eg Amul may mean- Indian, butter, milk, cheese, co-operative, value, or even the ads. These associations are stored as links to the brand that include the brand, company, category, visuals, celebrity, design, usage experience, feelings. These links help the customer prefer a brand over competitors but a negative link can be disastrous for the brand. Eg Cadbury is generic in India for milk chocolates and common associations could be dairy milk, taste, value, satisfaction, international quality etc but the negative association of the worm-controversy hurt the brand.

Creating a solid network of associations helps create a strong brand preference, where the customer demands for a brand and also knows what to expect with the brand. If the brands delivers on expectations, brand credibility builds up which helps deter competition and brand switching. Eg Titan, Nokia, Amul, Levis, Santro


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Brand Management- MBA Notes- Dr Amit Rangnekar Customer’s brand decision making (Buying a Shirt upto Rs 1000) Brands Unknown Manzoni,

Known Louis Phillipe, Van Heusen, Arrow, Color Plus, Peter England, Dockers, Charagh

Pedroni,

Din, Oxemberg, Indian Terrain, Zodiac, Austin Reed, Allen Solly, JohnPlayer,

Zegna,

Armani, M&S, Wills LS, Park Avenue,

Acceptable

Unacceptable

Indifferent

Overlooked

Louis Phillipe, Van Heusen,

Cambridge, Peter

Allen Solly, CD,

Armani, M&S,

Arrow, Austin Reed,

England, Oxemberg

Dockers, Indian

Wills, Zodiac,

Terrain

Color Plus, Arrow

JohnPlayer,

Purchased

Not Purchased

Van Heusen

Louis Phillipe, Arrow, Austin Reed, JohnPlayer

The company‘s marketing efforts are focused on pushing the brand first into the known stage and then to take it up to the purchased stage. Surrounding the consumer with the right kind of links in an associated network, created through brand experiences and marketing communication helps form thoughts, feelings, images, beliefs, perceptions, opinions, and preferences. These links form strong associations deep into the mind of the customer which drives purchase preference. Exercise: Create a customer’s brand decision making model and a company’s brand decision making model for a company and a category, similar to the illustrations above Brand Personality  Brand Personality (Aaker)- Consumers perceive brand‘s personality in terms of human personality traits. Like human relationships, as brands grow, emotional dimension dominates.  Consumers easily attracted to brand personality traits- dependability (LIC), trust (Tata), honesty (Peter England), reliability (Titan), safety (Volvo), fun (Disney)  Exercise- Identify brands with personality-sincere, sophisticated, cheerful, old fashioned, progressive Brand Personality Drivers Product related characteristics Non Product related characteristics Product category (Bank) Package (Bisleri, Parle-G) Price (Rolls Royce, Louis Vuitton, Big Bazaar) Attributes (Kingfisher Beer)


User imagery (Levi's 501) Sponsorships (Rolex, Femina) Symbol (Marlboro Country) Ad style (Obsession, Absolut) Country of origin (Audi) Company image (The Body Shop) CEO (Vijay Mallya, Steve Jobs) Celebrity endorsers (Aircel Dhoni)

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Brand Management- MBA Notes- Dr Amit Rangnekar A Brand Personality Scale (BPS): The Big Five Sincerity Down-To-Earth Honest Wholesome Cheerful Excitement Daring Spirited Imaginative Up-To-Date Competence Reliable Intelligent Successful Sophistication Upper Class Charming Ruggedness Outdoorsy Tough

Raymond, Hallmark, LIC, Parle-G, Rolex family-oriented, small-town, conventional, blue-collar sincere, real, ethical, thoughtful, caring original, genuine, ageless, classic, old-fashioned sentimental, friendly, warm, happy Porsche, Absolut, Benetton, Virgin, Kingfisher trendy, exciting, off-beat, flashy, provocative cool, young, lively, outgoing, adventurous unique, humorous, surprising, artistic, fun independent, contemporary, innovative, aggressive Titan, Fedex, Dabbawallas, IBM, Moov, Nokia hardworking, secure, efficient, trustworthy, careful technical, corporate, serious leader, confident, influential Lexus, Mercedes, Revlon, Apple, glamorous, good-looking, pretentious, sophisticated feminine, smooth, sexy, gentle Levi's, Marlboro, Nike, Woodland, Enfield Bullet, Tag Heuer masculine, Western, active, athletic rugged, strong, no-nonsense

Brand personality of 2 brands competing in premium vodka market for decades  Both are expensive, high quality, and pure yet have different personalities  Stolichnaya as a person is experienced, self assured and successful in a traditional career- law, banking. He is male, recognizes quality, drives a Lexus, and follows the latest trends  Absolut person is younger, more contemporary and flashier. He is also male, works in a creative occupation- advertising or arts, more likely to go to trendy bars  For both, brand personality is the glue that holds together the identity and communication effort.

Brand behaviour

How does Brand Behaviour speak for Brand Personality Personality traits Brand

Frequent changes- position, product forms, symbols, advertising, etc. Frequent deals and coupons Advertises extensively Strong customer service, easy-to-use, etc Continuity of characters, packaging High price, exclusive, ads in upscale print Friendly advertising, endorsers Association with cultural events

Flighty, schizophrenic

Coke India

Cheap, uncultured Outgoing, popular Approachable Familiar, comfortable Snobbish, sophisticated Friendly Culturally aware

Big Bazaar Nokia, Airtel Maruti Parle-G Rolex Disney Times of India

 Brand identity- add personality, set of values, perceptions and brand aspirations… all the pieces converging. Swoosh replaces Nike brand name, Coke slanted flourish, Mont Blanc star  Brand image- Sum total of consumer perceptions, firms fit perceptions to communicationSwatch trendy, Nokia value, Titan performance, Volvo safe  Corporate identity- Visual aspects/image of firm's presence-eg logo, collaterals-Tata  Brand repositioning- customer preferences change- Petrol pumps, typical to vibrant www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar Customer Based Brand Equity Pyramid- Keller (Brand Resonance Pyramid)     

Brand resonance characterized by strong brand & consumer connect, thro‘usage & experience Strong resonant brands- increased loyalty & decreased vulnerability to competitive actions Brand challenge- ensure right customer experiences to create right brand knowledge Brand equity- customers develop differential towards a brand hence prefer it over others Understanding differential critical to interpret the past, design effective future programmes

Building resonance involves a series of steps    

Identity- Who are you- consumers begin to understand what a brand stands for, means Meaning- What are you- consumers link in/tangible associations, understand PoD & PoP Response- What about you- judge brands on credibility, expertise & trustworthiness Relationships- What about you and me- How to connect, create intense, active loyalty

Building blocks- structure to build brands with customers       

Salience- consumer‘s brand recall in a purchase situation- depth & breadth of brand awareness Performance- What a brand does to meet customers' functional needs- intrinsic properties Imagery- Think abstractly than physically about brand, intangibles- extrinsic brand properties Judgments- Customer brand evaluation (performance+ imagery association)- brand opinions Feelings- emotional brand response/ reaction (mild/intense; +/-, or experiential / enduring) Experiential feelings (warmth, fun and excitement)- immediate & short-lived Enduring feelings (sense of security, social approval, self-respect), private, of day-to-day life

Resonance- Intense, active loyalty- customers feel a connect to brand, will miss it if it went away  Nature of relationship, extent to which customers feel they are ―in sync‖ with a brand  Behavioural loyalty- repeat purchase rates  Attitudinal attachment- intensity or depth of psychological bond customers have with a brand  Active engagement- level of activity engendered by this loyalty  Sense of community- extent to which customers seek brand info, events, loyal customers www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar Brand Value Chain (Kevin Keller) Helps assess financial return of developing the brand through 4 stages. Some relationships have not yet been directly measured, but are important to consider when valuing a brand.

      

  

The value stages lead to shareholder value driven by multipliers, or filters, between the stages Multipliers are factors that influence impact of one stage on the subsequent stage. Marketing program investment in product, employees, advertising affect future brand value Program quality- ad distinctiveness, service consistency determine how much the first stage influences the second stage Customer mindset, includes 5 A‘s, hierarchical in nature- awareness supports consumers‘ brand associations, which drive attitudes, which lead to attachment & ultimately activity Market condition multipliers translate the 5 A‘s to brand value Market performance measures brand performance in the marketplace through price premium and elasticity, market share demonstrates brand‘s ability to drive sales, expansion success is brand‘s opportunity to increase revenue streams & lower costs- all lead to brand profitability These lead to shareholder value, driven by investor sentiment based on market forces like growth potential & risk profile which can affect the evaluation. Shareholder value is attained through stock price, PE ratios & market capitalization Together, these stages allow brand value evaluation & suggest areas of improvements

Brand knowledge Brand knowledge creates a differential that drives brand equity. If customers carry strong, unique, favourable brand associations in mind, strong brand is built due to high brand awareness & +ve brand image. This convinces a customer of meaningful and valuable difference in one brand and compels him to prefer it over others.


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Cognitive brand dimensions Dimension Meaning Brand weight Brand dominance in a market Brand length Brand ability to diversify across categories Brand power Loyalty of the customer group Brand breadth

Brand appeal across customer groups

4Cs to create positioning Company What to offer and communicate Channel Where to sell it


Company / brand Microsoft, J&J baby, Dettol Disney, Virgin, Tata Apple, Harley Davidson, Old Monk Coke, Parle G, Amul Butter

Customer To whom Competitor Differential

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5 Brand Positioning Brand Positioning- Design firm‘s offering & image to occupy distinct place in target customer‘s mind     

Represent a distinctive big idea in the mind of the target market Identify different needs & groups in the market (segments) Target groups/markets it can satisfy in a superior way (targeting) Locate brand in the minds of consumers (positioning) Communicate (promotion) a value proposition to the target market that is distinctive, valuable & meaningful (differentiation)

Brand Ladder (How does a brand get into customer‘s mind)  Promise- Value proposition offered to customers, choice  Affinity- Interest in the brand, differentials evident  Brand Bonding- Perceived as delivering on promise  Loyalty- +ve differential effect driving customer brand preference over identical competitive brands, willing to pay more /wait/ go places if unavailable  Brand Equity- Brands financial value to the firm, includes sum total of factors besides sales. From a customer‘s perspective, the reason why he chooses that brand over competition  Promotional strategies revolve across various brand purchase stages Crafting the brand positioning Positioning requires determining a competitive frame of reference. The frame defines associations that consumers use to evaluate directly and/or broadly competing brands, as under: 1. Identifying the target market(which brand for which market) 2. Understanding consumer behavior and their considerations in choosing brands- price points, culture, buying patterns, attitudes, preferences. 3. Nature of competition (direct, indirect, PLC stage, intense, consolidated, fragmented) 4. Points-of-parity (pop) associations- which consumers view as essential to be a credible offering in a certain product category. Shared values between brand & competitors, common denominators defining the category. They represent necessary conditions but not necessarily sufficient for brand choice. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar 5. Points-of-difference (pod) brand associations- attributes/benefits consumers associate with a brand, positively evaluate & believe they cannot find to the same extent with other brand. 6. Reason to Believe (RTB)- Why should a customer buy your brand- company consistency, credibility, heritage, innovation legacy, country of origin etc Choosing POPs and PODs  POP driven by category membership needs, to achieve an attribute or benefit POP, consumers must believe brand is ―good‖ on that dimension, key is perception of clear superiority.  Category POP change over time due to technology, legal, trends. Eg HTC v IPhone.  Competitive POP- to negate competitors POP. HTC‘s features similar to IPhone helps position it as an IPhone competitor at a much lower price, which otherwise was difficult to command.  Creating strong, favorable & unique POD associations essential to competitive positioning. Apple innovation, Parle- G value, Tatas- trust, Maruti- Service, Dabbawallas- reliability.  POD should be desirable & relevant to consumers, which firm should be capable of delivering, communicating and sustaining. Marketers should decide level(s) to anchor the brand‘s PODlowest - brand attributes, Mid- brand benefits, Top- brand values. Creating POPs and PODs The mental map shows Nike‘s range of brand specific and category specific associations,  Nike- PoD are MJ, Air & Basketball  Adidas- PoD is Top athletes  Reebok- PoD is Tennis  All other associations are category PoPs Exercise- How Should Maruti position itself with respect to the Tata Nano? Exercise- POPs & PODs for Apple i-Phone, Rs 5000 mobile phone Executing the brand positioning  Brand identity- how company aims to identify or position brand. Built through logo, jingle, ads, celebrities, product trial, exposure etc.  Label- post identity, brand remains a label in customers mind. Customer may not associate anything with the brand, nor be inclined to purchase it, yet may identify it, remember the ad, logo, celebrity, pack.  Brand Image- how customer www.dramitrangnekar.com

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   

perceives the brand. What customer associates with the brand. Perception turns to position over time. Built by exposure to communications, word of mouth, product usage and experience, etc Brand congruence- Intended positioning (identity) should be congruent (match) with what exists in the ‗consumer‘s mind‘ (image) Brand credibility- how well brand delivers on its promise Moov- Backaches, NokiaPerformance, Titan- value Brand Position- Distinct place or a deeper perception in the customer‘s mind, achieved by exposure, association, usage, credibility. Positioning = combining internal (brand identity+ image) + outward brand expressions (guarantees, service, performance & packaging). The part of the brand identity and value proposition (central benefit) to be actively communicated to the target audience

Positions that firms successfully have claimed in India  Beauty- Lux  Innovation- Sony, Casio  Premium-Bose, Benz  Macho- Enfield Bullet  Thanda- Coke  Performance- Nokia, Bata, Titan  World scale- Reliance  Friendly salesmen-Eureka Forbes  Generic-Cadbury/ Xerox/ Amul Butter  Reach-HLL, Glaxo,Colgate  Delivery-Domino‘s/ Blue Dart  Kids-McDonalds, Esselworld, J&J  Service- Private Banks, Maruti  Indian MNC-Ranbaxy, Infosys, Wipro  Fast food- Udipi, VadaPav, Sandwich  Economy- Big Bazaar  Range- Vijay Sales, Alfa, Nokia  Value-Dollar Shops, Factory outlets  Youth- Pepsi, Swatch  Tourism-Goa, Kerala, Rajasthan  Fever- Crocin  Headache-Saridon/Anacin Perceptual Map Watches


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Brand Management- MBA Notes- Dr Amit Rangnekar Cars Premium stige

Jaguar

Ferrari Audi

M Benz

BMW

Corolla City

Conser vative

Sporty / Hi Tech

Swift Ritz

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i10 Indica Nano Popular P&G Positioning: distinct positions, even in same segments (Aaker & Joakimsthaler) Brand Segment Position Head & Shoulders Shampoos Anti-Dandruff Pert Plus Shampoos Conditioner + shampoo Pantene Shampoos Healthy + shiny hair Ariel Detergent High Tech Detergent Tide Detergent Tough cleaning Cheer Detergent All-temperature cleaning Bold Detergent Fabric softener Dash Detergent Concentrated powder Whisper Sanitary Products Hygienic protection Vicks Cold Clears blocked nose Old Spice After Shave Manliness Crest Toothpaste Cavities HUL- Axe and Rexona, both marketed by HUL, operate in the same segments- deodorants. Rexona is positioned against body odour targeting the working population, while Axe is positioned on seduction targeting the youth. Both use completely different communication strategies, although they target the same broad segment.


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Brand Management- MBA Notes- Dr Amit Rangnekar Positioning the company Customers Where are my customers

How do customers find me How customers perceive value How do we best deliver value Competition Benefits for customers of competitive brands How am I positioned

Who, Demographics, Psychographics, How do I reach them Geographies, Segments Social / economic status Touch points, Media habits Media, Promotion (SPPASMDT, WoM), Internet Performance, VFM, 4Ps, technology, service, design, delivery Brick, click, brick and click, click & brick, mail order, catalogue Direct, indirect, generic What needs do they serve, serve better than us, do not serve better Unique, not unique, competitive advantage

Product Differentiation Add a set of valuable, meaningful and compelling differences to distinguish your offering from that of the competition. Customers buy based on their perception of quality, value, price, performance, usage experience parameters, which should ideally be differentiated on. Brands differentiate on features/benefits irrelevant to customers. Most mobile phones features may hardly be used, newer management text book editions- bigger & costlier, not necessarily better Competitive advantage through differentiation, across 5 dimensions:  Product (form, features, performance quality, conformance quality, durability, reliability, reparability, style, design)  Services (order ease, delivery, installations, customer training, customer consulting, maintenance and repair, miscellaneous services)  Personnel - better-trained people, 6 characteristics: Competence, Courtesy, Credibility, Reliability, Responsiveness & Communication.  Channel - coverage, expertise, and performance.  Image - Buyers respond differently to company & brand images, identity & image to be distinguished Sustaining brands What sustains

What erodes

Competitive advantage in its product Consumer needs and wants met by brands, change, differentiation dimensions (product, services, evolve, or die, leading to loss of brand POD or lack personnel, channel & symbols) sustains a brand of POP with other brands Continuously monitoring environmental Complacency, change in technology, lack of new changes, customer preferences, strategies, and products, not responding to competitive and technology, equip brand with POD/POP environmental threats and strategies, can spell doom Exercise- i-phone  Key success factor? Brand positioning, innovation, Pop, Pod, brand image  Where is iphone vulnerable? Economical competitors, imitators, higher technology.  What should it watch out for? Changing preferences, value, new trends  Key improvement areas? Price, promotion, features, customer service www.dramitrangnekar.com

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6 Brand Identity ―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 organisation.‖ Aaker To be effective, a brand identity needs to resonate with customers, differentiate the brand from competitors, and represent what the organization can and will do over time. What does a brand stand for? How does it create a relationship with its customers? What is its value proposition? Differential? Brand‘s uniqueness‘?  Brand identity- what a brand wants to convey to its customer - meaning, self image  Brand Image- how a customer perceives the brand, through signals emanating from the brand‘s communications and usage experience  Brand Essence- A brand’s fundamental nature or quality.  The one constant across product categories and throughout the world. Adidas: Athletic Performance, Tata: Trust, Volvo: Safety, Disney: Fun  Brand credibility- delivering on your promise builds brand credibility  Trade Dress- aesthetic elements that provide legal protection for a brand‘s identity Coke bottle shape, Colgate Red & White Design, Harley-Davidson’s engine sound Brand Promise- What a brand can and must do for customers  Must promise differentiated benefits, relevant & compelling to the consumer  Benefits that are functional, experiential, emotional & self-expressive  Support brand promises with compelling proof points (‘reasons to believe’)  Address key consumer needs, manifest in organization‘s products and services  Leverage organization‘s strengths, competitive advantage through differentiation  Drive organizational decision, system, action, and process, inspire & energize Components of a brand’s identity:  Names, logotypes, symbols & graphic devices- Mercedes tristar, Nike swoosh  Distinctive shapes and colors- Colgate red  Brand voice and visual style, sounds, jingles and other mnemonic devices  Typography, theme lines or slogans- Nike Just do it  Characters uniquely associated with a brand- Coke- Slanting flourish  Textures, scents, flavors, and other sensory elements Choosing Brand Elements Brand elements are devices that identify and differentiate the brand, build brand equity  The brand-building ability of these elements is ‗what consumers would think or feel about the product if they only knew about the brand element‘  Memorable, meaningful and likeable can be characterized as ―brand building‖ in terms of how brand equity can be built through the judicious choice of a brand element.  Transferable, adaptable and protectable are more ―defensive‖ and concerned with how the brand equity contained in a brand element can be leveraged & preserved in the face of different opportunities and constraints. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar Developing Brand Elements  Companies use marketing research firms to develop and test names.  Name-research procedures include: Association, Learning, Memory & Preference tests.  Brand-building roles- easily recognized, recalled, inherently descriptive, persuasive  Memorable or meaningful brand elements reduce burden on marketing communications to build awareness and link brand associations  Associations arising from likeability & appeal of brand elements enhance brand equity  Slogans- build brand equity, help consumers grasp what brand is, what makes it special Kapferer’s Brand Identity Prism (1997)  How 6 personality & physical facets define brand identity  Helps marketers gauge brand identity, provide answers to questions likeIf the brand was a person, how would he look? What traits would he have? Warm, cold, aggressive, approachable or smart?  Knowing identity helps design strategy, positioning & affects marketing collaterals  Physical facet, brand relationship and customer reflection are externalization factors, rest represent internalization Physique

Personality Reflection

Consumer mentalisation Relationship

Culture

                

Core, central purpose, foundation What is the product, what does it do, how does it add value, fill gaps Titan and Nokia performance, Head & Shoulders dandruff Soul, what the brand would be if it were a person, personality traits Disney fun, Woodland rugged, Raymond well-groomed man External mirror, how target identifies himself wrt brand Brand reflects customers‘ image outward, image of buyer using brand Lux- beauty, Pepsi young, Thums up adventurous Internal mirror, consumers attracted to brands where they see own traits Self image, how the targeted identifies brand wrt self, inner relationship Nike- athletic, sporty, Enfield Bullet- armed forces Intangible brand and consumer connect, exchanges, experiences How should brand be seen by customers in marketing communication? Nokia reliable friend Culture spawns brand values and principles which bind customers Strong dimension, differential, internalises in customer‘s conscience VW- German engineering, Amul- Indian, HSBC World's local bank


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Brand Management- MBA Notes- Dr Amit Rangnekar Case- Brand identity of Adidas & Nike Nike focus on individual athletes Sports & fitness Sponsorship, ethics Aggressive, provocative, inyour- face Michael Jordan, Tiger Woods American, Just Do It Cool, trendy

Promo strategy External Physique Relationship Reflection Personality Culture Self-Image

Nike

Adidas

Picture of Sender

Re lationshi p: Sponsorship, ethi cs Reflection: Aggressive, provocative, in-your-face

Culture: American, Just do It! Se lf-Image: Cool, I am an ‖Athlete ‖

Internalization

Personal ity: Like Jordan, Woods…

Externalization

Externalization

Physique: Sports and fitness

Picture of Sender

Picture of Recipient

Physique: Sports and fitness

Personal ity: Tradi tional , conservati ve, collective

Re lationshi p: Quali ty and heritage

Culture: European, Traditional

Reflection: true sportsmanship, A good team player, strong work ethic

Se lf-Image: Rel ates more to competing t han t o winning

Internalization

Internal

Adidas Sponsors teams & global events Sports & fitness Quality & heritage Sportsmanship, team player, strong work ethic Traditional, conservative, collective European, traditional Competitor, competent

Picture of Recipient

Key differences between the two companies are at the cultural and the self-image level.  Adidas stands for European culture, traditional, conservative, collective & competent  Nike symbolises American way: individual & aggressive- Michael Jordan, McEnroe  Adidas connected to positive emotions, more to competing than to winning  Adidas- challenging oneself is exciting; winning is reward, not reason for playing well  Adidas personality reflects true sportsmanship, good team player & strong work ethic.  Nike has a cool attitude, You don‘t win silver, you lose gold, winning is paramount Executing the Brand Identity- Combine visual, auditory & other sensory components that create recognition, brand promise, communication synergy & help differentiation.  Starts from positioning & values and is executed through the marketing mix (4Ps)  Product- consumers‘ brand experiences should meet/surpass expectations  Pricing- perception of value, equate with quality  Place- availability and visibility  Promotion- integrated marketing communication (IMC) to drive home the message Brand Identity planning model (DAVID AAKER) To understand, develop, and apply the brand identity concept. Introduces 2 strategic brand components- strategic brand analysis and brand identity implementation system.


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Brand Management- MBA Notes- Dr Amit Rangnekar Strategic brand analysis-Helps firm understand self, brand, customers & competition  Customer analysisunbiased customer opinions, firm experience and market situation  Competitor analysis- current and potential competitor communication strategies  Brand analysishow brand can be differentiated meaningfully  Self-analysisSWOT + R&C, will to deliver Brand Identity system  12 brand identity element categories organized around 4 perspectives -brand associations in all 12 categories- hard  Brand identity structure includes an essence, a core identity and extended identity  Brand essenceglue to hold core identity elements together, drives value proposition  Core identity should reflect firm value and strategy, brand differentiation and resonate with customers  Extended identity includes brand personality and elements beyond the core identity


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7 Brand Architecture An organizing structure, family tree or hierarchy of the brand portfolio that specifies brand roles and the nature of relationships between brands and sub brands (Aaker & Joakimsthaler) Brand architecture is like a soccer team with the football pitch as the market map, and each football player as a brand playing a major, minor or support role. Hence individual players/brands will benefit from identity and communication programs The ideal portfolio

Typical market/brand portfolio

Source: Designing brand architecture (Davidson, 2002, portfolio managing matters. Brand Strategy pp 28-29)

Objectives of brand architecture are- creating effective & powerful brands, allocate brand building resources, create synergy, clarity of product offering, leverage brand equity, and provide platform for future growth.

 Brand portfolio- all brands, subbrands, cobrands; add /extend/ delete brands  Portfolio roles of each brand Strategic Role- important source of future profits/vision- Virgin Air, Tata indicom www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar  Linchpin Role- brand provides key basis for customer loyalty. First Citizen Club for Shoppers Stop, J&J baby range  Silver Bullet- brand positively influences image of another brand- IBM Thinkpad boosted public perceptions of IBM, Nano of Tata Motors  Cash Cow- significant customer base may not require high level of investment but generates funds to be invested in strategic, linchpin, silver-bullet brands. Parle G, Nivea Creme Design Your Portfolio Graphics  Visual representations across portfolio of brands- logos, packaging, symbols, product design, layout of print ads, taglines- look and feel of each brand presentation  Do visual representations send right signals of relationships between brands in portfolio?  Exercise: put all graphic representations of brand portfolio (logos, packs, mascots) on paper. Do they convey consistent message and support brand portfolio’s structure Develop Brand Portfolio Structure  Brand portfolio structure is a way of grouping brands to clarify logical relationships  Brand hierarchy tree for Indian Hotels- Taj Hotels, hallmark of luxury and service  But Taj tag was on every group hotel, guests were confused what brand Taj stood for?  Differentiated by quality & service standards , hive off hotels not fitting architecture

Exercise- clarify relationships among brands by drawing a ―brand family tree‖. Specify the Product-Market context of each brand  Endorser brands- Brand endorsed by parent or corporate brand where parent brand is identified with the brand, but, endorsed brand is given greater visual weight than parent brand. The corporate/parent brand lends credibility or assurance to endorsed www.dramitrangnekar.com

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

 

brand without overpowering it with its own associations. Cadbury’s Dairy Milk / Five Star. Xylys, Swiss Made- Brought to you by Titan Subbrand- A new brand combined with a product or corporate brand. The subbrand can make the parent brand more vital and relevant to a new consumer segment or within a new product category. Ford Ikon- Flair, Hyundai Getz- Prime, Gillette Sensor Excel Benefit brands- branded features, components, or services that augment the brand offering- Maruti Ritz with Kappa engine Cobrands- combine your brand with brand/s from another firm to create a unique offering- Citibank-Jet Platinum credit cards or highlight an ingredient of another firm in your brand communication- HP laptops with MS Office or Intel inside, Dolby system in Multiplexes, Teflon coating in Pans, Carl Zeiss in mobile cameras

Titan Brand Architecture

House of Brands or Branded House Branded House Master brand strategy 1 master brand across categories Harvard (HBR, HBS, Medical/Law), Nike Master brand does not connect in all markets (Nike Laptops, Harvard Entertainment) Low branding costs/synergy- 1brand leveraged

House of brands Product brand strategy New brands /extensions / sub brands Maruti (800, Alto, SX4, Swift), P&G Easier for different brands to connect to different / adjacent markets Costlier- separate branding costs

Category failure may damage master brand

Brand failure may not affect firm


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Corporate Dominant

Brand architecture types: Common branding systems are Brand Type Corporate brand

Example Heinz GE Sony, Tata, Reliance, HP

Master brand

BMW Mont Blanc Nokia Calvin Klein, Disney Tommy Hilfiger

Licensed brand Parent brand

Brand Dominant

Mixed Brands

Godrej, Videocon House brand (family brand)

Tata, Amul

Dual brands (family / endorser brands)

Cadbury- 5 Star Gillette- Mach3 Ford-Ikon Tata Indica

Co-brands (ingredient brands) Product/Mono brands (single brands)

Intel inside Teflon coated Dolby system Rexona, Crocin Nivea, Axe

Sub Brand

Ford Ikon- Flair, Hyundai GetzPrime, Gillette Sensor Excel


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Strategic Rationale  Bear company name  Highest in brand hierarchy  Harnesses strong corporate image synonymous with product class CD common, FMCG rare, tech popular  Dominant, highest level in hierarchy  Typically, only brand in the system  Corporate brands were master brands  Name licensed out- fashion industryclothes, leather, eyewear, accessories  Brand extended to multiple categories  May resemble corporate brand  Economical NPL, trust/assurance, marketing economies  Diversified firms leverage corporate brand association across segments/ categories  if 2 product lines are incompatible (Titan & Sonata premium & economy)  Combine corporate + strong subbrand  Subbrands help differentiate, drive brand preference  Umbrella for a family of products extensions  Raise perceived quality & familiarity of both brands  Brand exposure in absent product class  Strong brand identity, need focused  Corporate brand insignificant, FMCG  Expensive and risky but profitable  Shelf space/market share/extensions  New brand + parent/corporate brand in brand identity system  Subbrand draws on parent brand to target new segment or category  Enables existing consumer connect

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Brand Management- MBA Notes- Dr Amit Rangnekar Brand Portfolio Strategies Brand Portfolio- Set of all brands/lines a firm offers to buyers in a particular category.  Multiple brands increase shelf presence, attract variety seeking consumers, help new market entry & yield economies of scale in advertising, sales & distribution  Portfolio maximises brand equity & market coverage, minimises brand overlap  Differentiation appeals to a sizeable segment & justify marketing and production costs  Critical- Portfolio monitoring & pruning of weak and unprofitable brands  Maruti- 800, Alto, A-Star, Estilo, Wagon-R, Ritz, Swift, Desire, etc & their variants Product Branding  Separate brand, own identity, image & set of associations, company not prominent  Paras- Moov, DCold, Livon, Dermicool, Freshia,  CavinKare- Chic shampoo, Spinx perfumes, Meera Herbal, Nyle Shampoo  HUL- Rexona, Axe, Close Up, Taj Tea, Lipton Tea, Surf, Wheel Line Branding  Brand successful in a category for a targeted consumer group, is extended to other product lines in the category/ adjacent categories, but catering to same group‘s needs.  Product lines cater to different needs, cosmetics- lipstick, nail polish, moisturizers, beverages- flavours, ketchups/ mineral water/ biscuits- pack sizes, cars- variants.  Identity of the main brand is leveraged across other extensions  Line branding restricted to adjacent territories & complementary products.  Gillette razors and cartridges- Vector, Sensor, Mach 3, Turbo; shaving gels, deos, L’Oreal- cosmetics, beauty, shampoos, skin, salons  Amar Chitra Katha- comics (print), mobile, TV, Cinema, online Range Branding  Built on common association, competence or promise of the main brand or firm  Brand‘s common position/ association spread across related and unrelated categories  Kingfisher symbolizes ‗the good times‘, hence extended across Beer, airlines and soccer. Godrej stands for a century of trust and reliability, extended across FMCG, CD, property, furniture and security systems. Umbrella Branding  One brand for all products/categories, drawing on the strength of the master brand  Safer, cheaper than building new brand, association should strategically fit categories  Samsung- TV, fridge, washing machines, mobiles, hard disk, monitors, laptops  Virgin- Airlines, Cola, Music, Moon travel, mobile, entertainment Source/Double Branding  Corporate + new brand (combination of umbrella & product branding strategy)  Equal prominence in communication and branding for both brands  Brand benefits from corporate brand‘s image or adds subtracts to/ from it.  Hyundai name precedes – Santro, Getz, i10, i20, Verna, Tucson www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar 

Johnnie Walker Scotch Whisky– Red label, Green label, Black label & Blue label

Endorsement Branding  Similar to source branding, but product brand more significant than corporate brand  Corporate brand conveys basic associations, augmented by the product brand  Cadbury’s precedes Dairy Milk, 5 Star, Fruit & Nut, Celebrations, Temptations  Polo by Ralph Lauren, Armani- Signature, Collezioni, Exchange, Junior Brand Extension  Extend existing brand to new products, services, or consumer segments  Existing brand + new brand, new brand is called subbrand  If executed well, brand extensions broaden and clarify brand meaning, if not, dilute or confuse brand meaning. Kingfisher (Beer to Airlines) and Amul (Milk & Foods). Devising the Branding Strategy NPL 3 choices: Develop new brand elements for new product, apply some of its existing brand elements, use a combination of new and existing brand elements 

Brand extension- use an established brand to introduce a new product-Gillete Sensor

 Sub-brand- new brand combines with an existing brand- Gillete Sensor Excel  Parent brand- the existing brand which gives birth to a brand extension- Gillette  Family brand- Parent brand already associated with multiple products through brand extensions. Cadbury

Brand name

Product category Old

New

Old

Line extension-(New SKU, flavours- Category extension- (Titan Mirinda lemon, Rasna mango, Pepsi 1.5L) Raga, Junior Horlicks)

New

Sub brand- (Gillette Sensor Excel, Ford New brand- (Maruti Ritz, Ikon Flair, Kellogg Frosties K) Tata Nano)

Brand extensions can be broadly classified into two general categories: 1) Line extension- parent brand used to brand a new product, target new market segment within a product category currently served by parent brand – Maggi Noodle SKUs 2) Category extension- when parent brand is used to enter a different product category from that currently served by the parent brand- Kingfisher Beer to Airlines 3) Brand line- All products- original, line & category extensions, sold under a particular brand- Godrej, Videocon, Heinz 4) Brand mix (brand assortment) - all brand lines of a firm available to buyers – HULClose-up, Pepsodent


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Brand Management- MBA Notes- Dr Amit Rangnekar Brands roles in a brand portfolio:  Flankers- Flanker (―fighter‖) brands positioned wrt competitors‘ brands so that more important (and profitable) flagship brands can retain their desired positioning  May cannibalise own brands or reflect poorly on other brands in the portfolio  Celeron and Intel, Toyota & Lexus, I Pod range- nano, shuffle etc  Cash Cows- retain brands retained as they hold on to a sufficient number of customers & maintain their profitability with virtually no marketing support. Parle G  Low-End Entry-Level- a relatively low-price brand in the portfolio to attract customers to the franchise. Gucci accessories, Sony Vaio entry level, Armani Jeans  High-End Prestige- Role of a relatively high-priced brand in the brand family often to add prestige and credibility to the portfolio. Armani Signature, Mont Blanc Pens

Market Attractiveness

Brand portfolio assessment matrix

High Medium Low

Competitive position Strong Medium Maximise dominance Challenge leader, build on strengths Challenge leader, build on Manage for cash strengths flow, flank Cash generator Milk, consider exit

Line Extensions advantages  Drive growth and add sales  Consumers familiar with parent brand  Strong brand identity, preferred  Extensions gain retailer acceptance  Economies of scale in marketing mix  Cater to new markets/users  Reduce cost & period of NPD

Line Extensions disadvantages  Companies lose focus  Consumers become confused  Proliferation, parent brand loses identity  Erodes brand equity for parent brand  Brand extension failure may impact parent  May cannibalise parent brand  Opportunity loss of building new brand

Brand Extensions Advantages Leverage assets New product acceptance, safer, economical Brand name / trademark issues avoided Renew brand interest, future NPL base Expand market / segment coverage


Weak Niche, acquire, flank, exit Milk and specialise Divest

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Disadvantages Dilute brand strength, confuse Line extensions weaken brand associations Extension cannibalises, failure harms brand Time to create unique image and equity Lack of ‗fit‘ in the consumer‘s mind

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Brand Equity

 The differential effect that brand knowledge has on consumer response to the marketing of that brand  Added value endowed to products and services, the marketing effects uniquely attributable to a brand  Brand assets linked to a brand‘s name & symbol that add to a product or service  An important intangible asset to the firm, with a psychological and financial value  Customer’s viewpoint- Brand equity is the differential in a customer‘s mind that makes him prefer one brand over another  Firm’s viewpoint- Brand equity is value of the brand to the firm in monetary terms  This asset can be created and analysed trough the four dimensions, brand awareness, perceived quality, brand associations, and brand loyalty. Brand Equity

Brand Awareness

Perceived quality

Brand Associations

Brand Loyalty

 Brand awareness- the base that affects consumer perception and even taste, people like the familiar and ascribe good attitudes to familiar items  Perceived quality- how the customer perceive the brands quality status  A brand association, as it influences associations in many contexts and also because it is empirically shown to affect profitability as measured by ROI and stock return  Brand associations- anything that connects the customer to the brand  Includes user imaginary, product attribute, use situations, organizational associations, brand associations, and symbols  Brand loyalty- key to brand value, strengthen size & intensity of each loyalty segment Factors to influence Brand Equity


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Brand Management- MBA Notes- Dr Amit Rangnekar How Brand Equity Generates Value (Aaker)

Source: Managing Brand Equity: David Aaker1991 Building Brand Equity  The marketer‘s challenge in building a strong brand is to ensure customers have the right type of experiences with products and services and their marketing programs create the desired brand knowledge structures for the brand.  Customer knowledge drives the differences that manifest themselves in brand equity  Value may be reflected in how consumers, think, feel, and act wrt the brand as well as the prices, market share, and profitability that the brand commands for the firm www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar  Marketers and researchers use various perspectives to study brand equity  Customer-based brand equity is the differential effect that brand knowledge has on consumer response to the marketing of that brand  +ve customer-based brand equity- when consumers react more favorably to a product & the way it is marketed when the brand is identified, as compared to when it is not.  -ve customer-based equity- when consumers react less favorably to marketing activity for the brand under the same circumstances. Measured by  Brand audits- in-depth examination of brand health & to set strategic direction  Tracking studies- information from consumers to provide valuable tactical insights into short-term effectiveness of marketing programs and activities.  Strategic brand management involves the design and implementation of marketing activities and programs to build, measure, and manage brands to maximize their value. Building brand equity depends on  Brand elements- brand names, logos, symbols, package designs  The initial choices for the brand elements or identities making up the brand  The way the brand is integrated into the supporting marketing programs  The associations indirectly transferred to the brand by linking the brand to some other entity (company, country of origin, another brand) Strategic brand management process involves four main steps:  Identifying and establishing brand positioning.  Planning and implementing brand marketing.  Measuring and interpreting brand performance  Growing and sustaining brand value. Brand equity drivers- creating right brand knowledge structures with right consumers, 3 key drivers:  The initial choice for the brand elements or identities making up the brand  Product, service, accompanying marketing activities & supporting marketing programs  Other associations indirectly transferred to the brand by linking it to some other entity. Designing Holistic Marketing Activities  Brands are not built by advertising.  Customers come to know a brand through a range of contacts and touch points: Personal observations, personal use, word of mouth, interactions with company personnel, on-line or telephone experiences and payment transactions.  Brand contact- any (+/-) information-bearing experience a customer / prospect has with a brand, product category, or market relating to the marketer‘s product or service. Personalization- Making sure that the brand and its marketing is as relevant as possible to as many customers as possible. The Internet creates opportunities to personalize www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar Integration- Integrating marketing is about mixing and matching marketing activities to maximize their individual and collective effects, especially marketing communications Brand awareness- the consumers‘ ability to identify the brand under different conditions, as reflected by their brand recognition or recall performance and whether it creates, maintains, or strengthens brand image. Brand image- perceptions and beliefs held by consumers, reflected in the associations held in consumer memory. Internalization- Marketers must adopt an internal perspective to appreciate and understand basic branding notions, and how they can help—or hurt brand equity. Key influence on brand perception is customers experience with company personnel.  Internal branding- activities and processes that help to inform and inspire employees.  Brand bonding- when customers experience the company as delivering on its brand promise. To deliver the brand promise, every employee should live the brand.  Holistic marketers should train & encourage distributors / dealers to serve customers Leveraging Secondary Associations The third way to build equity is to ―borrow it‖. Brand associations may be linked to other entities that have their own associations, creating ―secondary‖ brand associations like:  The company—through branding strategies.  Countries or other geographical regions—identification of product origin  Channels of distribution—channel strategy.  Other brands—ingredient or co-branding.  Characters—licensing.  Spokespeople—endorsements.  Sporting or cultural events—sponsorships.  Other third party sources—awards or reviews. Measuring Brand Equity- Two complementary approaches employed by marketers  Indirect approach- assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures.  Direct approach- assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing. Brand Audits- a consumer-focused exercise involving procedures that assess brand health, uncover sources of brand equity & suggest ways to improve & leverage its equity.  Used to set the strategic direction for the brand  Regular audits allow marketers to manage brands more proactively and responsively.  Profound implications for the strategic direction and brands‘ resulting performance.  Requires understanding sources of brand equity from the firm and the consumer perspective  Brand audits consist of two steps Brand Inventory- To provide a current, comprehensive profile of how all the products and services sold by a company are marketed and branded. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar    

Profile each product/service, identify all associated brand elements & supporting marketing program Profile competitive brands in terms of their branding and marketing efforts. Suggest what consumers‘ current perceptions may be based on. Assess consistency of all the different products or services sharing a brand name.

Brand Exploratory- To understand what consumers think and feel about the brand and its corresponding product category to identify sources of brand equity.  Prior research studies and qualitative research techniques like word associations, projective techniques, visualization, brand personifications, and laddering.  Gain understanding of the beliefs of company personnel about consumer perceptions. Brand Tracking - collect information from consumers on a routine basis over time.  Quantitative measures to understand how brands & marketing programs are performing on key dimensions  Understand where, how much, and in what ways brand value is being created Managing Brand Equity- requires a long-term view of marketing decisions. Brand Reinforcement- Manage firms strategic asset to ensure value does not depreciate. A) Brand equity is reinforced by marketing actions that consistently convey the meaning of the brand to consumers in terms of:  What products the brand represents?  What core benefits it supplies?  What needs it satisfies?  How the brand makes those products superior?  Which strong, favorable & unique brand associations should exist in consumers mind?  Reinforcing brand equity requires innovation & relevance through marketing program. B) Marketers must introduce new products and conduct new marketing activities that truly satisfy their target market. C) An important consideration in reinforcing brands is the consistency of the marketing support the brand receives, in terms of both amount and kind. D) In managing brand equity, it is important to recognize the trade-offs between those marketing activities that fortify the brand and reinforce its meaning and those that attempt to leverage or borrow from existing brand equity to reap some financial benefit. Brand Revitalization Changes in consumer tastes & preferences, emergence of new competitors/ technology, or regulatory or environmental developments may potentially affect fortunes of a brand.  To reverse a fading brand‘s fortunes, restore lost brand equity sources or create new  Understanding, what the sources of brand equity were, is the first step to a revival  Expand depth &/or breadth of brand awareness by improving consumer recall & brand recognition during purchase / consumption settings.  Improve strength, favorability & uniqueness of brand associations to build brand image. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar Brand crisis- Longer response time in a crisis increases chances of consumers forming negative impressions but sincerity in tackling the crisis will be appreciated by customers Brand Equity Models 1) Brand Asset Valuator (BAV)- Young & Rubicam ad agency measured brand equity for 450 global brands and 8,000 local brands in 24 countries, using a 32 item questionnaire on brand personality plus 4 dimensions: 1. Differentiation- Measures how distinctive the brand is in the marketplace 2. Relevance- Measures whether a brand has personal relevance for the respondent. Is it meaningful to him or her? Is it personally appropriate? 3. Esteem- Measures whether brand is held in high regard and considered best in its class. Closely relates to perceived quality and extent to which brand is growing in popularity. 4. Knowledge- an intimate understanding of the brand, consumer experience  Differentiation + relevance= brand strength, describes the brand's growth potential  Esteem + knowledge= brand structure, describes the brand's current power  Brand strength+ brand structure= Powergrid, depicts brand development cycle stages Relationship among 4 pillars yields compelling information about brand's capacity to carry a premium price & fend off competition- the key to brand health. Y&R Power Grid- Stature Versus Strength Brand stature (knowledge + esteem) H Budweiser Brand strength Gap (differentiation Heinz + esteem) H Disney Sony Kodak Levis L Xerox

L BMW Guinness Starbucks Vodafone Swatch HP Kellogg Reuters

BAV can be used to gain a range of knowledge about a brand:  Identify key perception drivers, potential target groups, problem areas and barriers  Analyze own image/attribute/brand personality & competitive strengths & weaknesses  Track brand movement over time on critical dimensions  Investigate a corporate name as a potential parent/umbrella brand  Determine marketing needs and possible common communications/programs Typical patterns of brand development


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2) Aaker Model (Professor David Aaker) Brand equity is a set of 5 categories of brand assets & liabilities linked to a brand that add to or subtract from the value provided by a product / service to a firm and/or to that firm‘s customers. The categories of brand assets are:  Brand loyalty  Brand awareness  Perceived quality  Brand associations  Other proprietary assets such as patents, trademarks, and channel relationships Brand identity- unique set of brand associations that represent what a brand stands for and promises to customers. Consists of 12 dimensions organized around 4 perspectives:  Brand-as-product (product scope, attributes, quality/value, use, users, country of origin)  Brand-as-organization (organizational attributes, local versus global)  Brand-as-person (brand personality, brand-customer relationships)  Brand-as-symbol (visual imagery/metaphors and brand heritage) Brand identity also includes  Core identity- the central, timeless essence of the brand  Extended identity- includes various brand identity elements, organized into cohesive and meaningful groups 3) Brandz model of brand strength (Marketing research consultants Brown and WPP) Brand building involves sequential steps, where each step is contingent upon successfully accomplishing previous step. Objectives at each step, in ascending order, are:  Presence, Relevance, Performance, Advantage  Bonding- bonded consumers, build stronger relationships with the brand, spend more of their category expenditures on the brand than those at lower levels of the pyramid.


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9 Brand valuation Top Brand values 2009 Interbrand 1. Coca-Cola 2. IBM 3. Microsoft 4. GE 5. Nokia 6. McDonald's 7. Google 8. Toyota 9. Intel 10. Disney

68,734 ($m) 60,211 ($m) 56,647 ($m) 47,777 ($m) 34,864 ($m) 32,275 ($m) 31,980 ($m) 31,330 ($m) 30,636 ($m) 28,447 ($m

Interbrand list of Top 20 Brand Ranks 2000-2009 2000 Coca Cola 1 Microsoft 2 IBM 3 Intel 4 Nokia 5 GE 6 Ford 7 Disney 8 McDonalds 9 AT&T 10 Marlboro 11 Mercedes Benz 12 HP 13 Cisco 14 Toyota 15 Citi 16 Gillette 17 Sony 18 American Express 19 Honda 20 BMW Louis Vuitton Samsung Apple


2001 1 2 3 6 5 4 8 7 9 10 11 12 15 16 14 13 18 20 17

2002 1 2 3 5 6 4 11 7 8

2003 1 2 3 5 6 4 14 7 8

2004 1 2 3 5 8 4 19 5 7

2005 1 2 3 5 6 4

2006 1 2 3 5 6 4

2007 1 2 3 7 5 4

7 8

8 9

9 8

9 8

10 6

9 10 14 16 12 13 19

9 10 12 17 11 13 16

10 11 12 16 9 13 15

10 11 13 17 9 13 15

12 10 13 18 7 12 16

14 10 12 18 6 11 16

18 11 12

17 12 11

6 11 14

8

15 18

15 18

14 18

14 19

14 19

15 19 13 17

15

18 20

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17 20

2008 2009 1 1 3 3 2 2 7 9 5 5 4 4

13 17

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Brand Management- MBA Notes- Dr Amit Rangnekar Interbrand’s Brand Equity Formula Brand earnings  Brand sales  Costs of sales  Marketing costs  Overhead expenses  Remuneration of capital charge  Taxation

Brand strength  Leadership (25%)  Stability (15 %)  Market (10 %)  Geographic spread (25 %)  Trend (10 %)  Support (10 %)  Protection (5 %)

Brand value- the sum of all earnings that a brand is expected to generate. 3 steps:  Establish company's intangible earnings and allocate them to individual brands and countries of operation, based on financial data  Determine portion of intangible earnings attributable to brand alone (Brand Contribution), which reflects share of earnings from a product or service's most loyal consumers or users, as opposed to other factors such as price  Project brand value based on market valuations, brand risk profile, & growth potential. Brand Valuation Approach (Interbrand) Companies like P&G- Gillette, Unilever, L‘Oreal and Nestle create significant brand value, from a portfolio of brands than from a single brand. Brand value model • Brand Value as net present value (NPV) of future earnings generated by the brand • Captures present and future value of a brand • Determines how brand creates value and aligns with customer‘s drive for purchases • The model comprises 4 key elements: 1) Financial forecasting  Projections of all revenues from that brand in the future  Deduct operating costs, taxes, capital costs to operate the brand  Difference represents brand‘s Intangible Earnings (like EVA / intellectual capital) 2) Role of Branding  Measuring how the brand influences customer demand at the point of purchase  Analyse (Brand Earnings / Intangible Earnings) % solely attributable to the brand  Identifies and weights key drivers of customer demand, their dependence on brands  Calculated as a %age and applied to Intangible Earnings to derive Brand Earnings. 3) Brand Risk  Brand specific risk rate at which forecast Brand Earnings are discounted to their NPV  Discount based on risk free rate (yield on government bond + brand premium based on Brand Strength analysis)  Assesses risk profile of projected Brand Earnings based on brand franchise security 4) Brand strength www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar  Measured against 7 key attributes- Market, Stability, Leadership, Support, Trend, Geography and Protection  Provides brand specific discount rate for the Brand Earnings forecast 5) Brand Value Calculation  A financial representation of a firm‘s earnings due to superior demand created for its products and services through the strength of its brand  Brand value is the financial worth today, similar to market cap of a firm  Brand value is calculated as the NPV of projected Brand Earnings  Brand value depends on good financial performance + strong market/ing position  Higher Brand Value looks at long term results than short-term performance Applications of Brand Valuation in Brand Management  Strategic asset (M&A, licensing, valuation, PE) as economic value considered not sale  Key brand value (Coke, Apple, Microsoft) is significant portion of company value  Brand building becomes a corporate objective not a marketing initiative Compare brand value to shareholder value, intangible/ tangible assets ssess Brand value across customers, segments, geographies, channels, competition Brand value change to assess internal performance, increase accountability, ROI Part of value based management frameworks ( EVA, BSC, shareholder value) Establish best practices brand management, integrate brand value in corporate planning Performance benchmark (quarterly brand value score card review) Approaches to Brand Valuation: • Cost: Looks at all costs incurred in creating a brand or what it might cost to recreate a brand hypothetically. Rarely used as costs incurred are substantially less than actual brand value. Eg Property price cannot match cost in building it. • Market value: Estimate brand's value based on market transactions of comparable brands. Issues- all market transactions not publicly available, cannot be easily compared • Economic use: Earlier economic valuations were based on historical brand earnings, now on the discounted value of future brand earnings • Royalty relief: Assumes that company does not own that brand but needs to license it from its owner, hence a royalty rate based on sales is applicable. As company owns the brand it does not need to incur this charge hence the name ‗royalty relief'. Future sales (rather than future gross profit) are forecast, hence royalty rate applied to provide an income attributable to the brand that is then discounted back to a net present value. Briefly, brand's value is a product of 2 quantities (1) Annual "net" after tax profits, adjusted to exclude the earnings expected for an equivalent unbranded product, and averaged over time; (2) A "multiple" (or discount rate), reflecting brand's "strength" Brand strength factors (greater a brand's strength, the higher its multiple) (i) Leadership—ability to influence the market. (ii) Stability—ability to maintain a consumer franchise. (iii) Market—vulnerability of market demand to changes in tastes or technology. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar (iv) International Scope—cross national/cultural potential. (v) Trend—long term appeal to consumers. (vi) Support—strength of communications. (vii) Protection—security of the brand owner's legal or property rights. Brand valuation approaches (http://www.brandchannel.com/papers_review.asp?sp_id=357)  Earlier, intangibles (brands, technology, patents, employees) not financially valued  Unexplained differences in book valuation and market capitalization  1980s M&A activity led to valuation of companies and brands, today majority business value is derived from intangibles  Average corporation life is 25 years, average age of world‘s Top 100 brands 60 years  A study (Interbrand- JP Morgan) concluded that on average brands account for over one-third shareholder value with McDonald‘s accounting for 70% and Coca-Cola 51% Approaches to brand valuation Financial values on brands is now widely accepted. With transfer pricing, licensing deals, M&A and value based management, brand valuation plays a key role in business today. Research-based approaches- Brand equity models measure consumer behavior and attitudes that have an impact on the economic performance of brands through consumer research where they interpret and measure consumers‘ perceptions that influence purchase behavior. Their integration into an economic model helps them assess economic value of brands Financially driven approaches- Cost-based approaches fail as there is no direct correlation between investment made and value added by a brand Comparables- brand value is arrived at on the basis of something comparable, but value creation of brands in the same category can be very different, even if most other aspects of the underlying business are similar. Comparables are useful for cross-checking Premium price- Brand value is calculated as NPV of future price premiums that a branded product would command over an unbranded or generic equivalent. However brand objectives are based on ability to secure future demand than current premium. Economic use- This approach combines brand equity and financial measures, and is widely accepted methodology for brand valuation 3,500 brand valuations worldwide.  Brands help generate customer demand, which translates into revenues and long term repurchase and loyalty  Brand‘s future earnings are identified and discounted to a NPV using a discount rate that reflects the risk of those earnings being realized


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Steps to capture complex value creation of a brand: 1. Market segmentation- Brands influence customer choice, but influence varies depending on market in which the brand operates. Split brand‘s markets into nonoverlapping and homogeneous groups of consumers according to applicable criteria such as product or service, distribution channels, consumption patterns, purchase sophistication, geography, existing and new customers etc. The brand is valued in each segment and the sum of the segment valuations constitutes the total value of the brand. 2. Financial analysis- Identify and forecast revenues and earnings from intangibles generated by the brand for each of the distinct segments determined in Step 1. Intangible earnings are brand revenue less operating costs, applicable taxes and a charge for the capital employed. The concept is similar to the notion of economic profit. 3. Demand analysis- Assess the role that the brand plays in driving demand for products and services in the markets in which it operates, and determine what proportion of intangible earnings is attributable to the brand measured by an indicator referred to as the ―role of branding index.‖ This is done by first identifying the various drivers of demand for the branded business, then determining the degree to which each driver is directly influenced by the brand. The role of branding index represents the percentage of intangible earnings generated by the brand. Brand earnings are calculated by multiplying the role of branding index by intangible earnings. 4. Competitive benchmarking- Determine the competitive strengths and weaknesses of the brand to derive the specific brand discount rate that reflects the risk profile of its expected future earnings (measured by an indicator called as the ―brand strength score‖). This comprises extensive competitive benchmarking and a structured evaluation of the brand‘s market, stability, leadership position, growth trend, support, geographic footprint and legal protectability. 5. Brand value calculation- Brand value is the NPV of the forecast brand earnings, discounted by the brand discount rate. NPV calculation comprises both the forecast period and the period beyond, reflecting the ability of brands to continue generating future earnings. An example of a hypothetical valuation of a brand in one market segment is shown in the Table below. This calculation is useful for brand value modeling in a wide range of situations, such as:


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Brand Management- MBA Notes- Dr Amit Rangnekar     

predicting the effect of marketing and investment strategies determining and assessing communication budgets calculating the return on brand investment assessing opportunities in new or underexploited markets tracking brand value management.

Hypothetical brand value calculation:


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Applications 

Strategic brand management, where brand valuation focuses on internal audiences by providing tools and processes to manage and increase economic value of brands.  Financial transactions, where brand valuation helps in a variety of brand-related transactions with external parties.

Attributes of Strong Brands  Excels at delivering desired benefits  Stays relevant  Priced to meet perceptions of value  Positioned properly  Communicates consistent brand messages  Well-designed brand hierarchy  Uses multiple marketing activities  Understands consumer-brand relationship  Supported by organization  Monitors sources of brand equity The Role of Brands  Identify the maker  Simplify product handling  Organize accounting  Offer legal protection  Signify quality  Create barriers to entry  Serve as a competitive advantage  Secure price premium Marketing Advantages of Strong Brands  Improved perceptions of product performance  Greater loyalty  Less vulnerable to competition  Larger margins  Inelastic consumer response to price increases  Elastic consumer response to price decreases  Greater trade cooperation  Increase in effectiveness of IMC  Licensing opportunities  Brand extension opportunities www.dramitrangnekar.com

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Product Life Cycle (PLC) Increasing competition, technology & changing economic conditions make firms reformulate positioning and differentiation strategies during a PLC.    

Introduction & growth stage- Slow growth & low profits, but if successful, then high growth and increasing profits Maturity stage- Slow sales growth, stable profit, extend successful brands Decline stage- Identify weak brands and phase out or reformulate Markets evolve through 4 stages: emergence, growth, maturity & decline.

 Style- basic and distinctive mode of expression appearing in a field of human endeavor.  Fashion- currently accepted or popular style in a given field. Length of a fashion cycle is hard to predict but fashions pass through 4 stages- Distinctiveness, Emulation, Massfashion & Decline.  Fads- fashions that come quickly into public view, are adopted with great zeal, peak early & decline very fast. Fads do not satisfy a strong need, hence do not survive. Marketing Strategies: Introduction Stage and Pioneer Advantage  Profits negative/ low, high promotional expenditure, to inform potential consumers, induce product trial and ensure availability  Market pioneer- being first can be rewarding, but risky & expensive  Coming in later makes sense if with superior technology, quality, or brand strength.  Speeding up innovation time is essential in an age of shortening product life cycles. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar  Pioneer has strong brand name recall, establishes brand attributes that product class should possess, advantages of economies of scale, technological leadership, patents & ownership of scarce assets.  Pioneer weaknesses: crude new products, improper positioning, an idea before its time, high product-development costs, lack of resources, managerial incompetence or unhealthy complacency.  A pioneer could also be an inventor, or a product pioneer or a market pioneer. Marketing Strategies: Growth Stage  The growth stage marked by rapid sales climb, consumer base  New competitors enter, attracted by the opportunities  Prices may remain where they are or fall slightly.  Companies maintain / increase promotional expenditures, educate market, take on competition, profits increase, costs fall due to volumes Strategies to sustain rapid market growth  Improve product quality and add new product features and improved styling.  Add new models, flanker products, enter new market segments.  Increase distribution coverage and enter new distribution channels.  Shift from product-awareness advertising to product-preference advertising.  Lowers prices to attract the next layer of price-sensitive buyers.  Trade-off between high market share and high current profits. By spending money on product improvement, promotion, and distribution, it can capture a dominant position. Marketing Strategies: Maturity Stage Growth declines, longer stage, marketing mature products is a key challenge. 3 phases:  Growth, where the sales growth rate starts to decline.  Stable, where sales flatten on a per capita basis because of market saturation.  Decaying maturity, where sales level starts to decline, customers begin to switch.  The sales slowdown creates industry overcapacity, intensifies competition  Industry consolidation, few dominate firms, many nichers, profits through volumes  Key issue- f become one of the ―big 3‖ or pursue a niching strategy  Companies may abandon weaker products & concentrate on more profitable & new products. Market Modification Expand market for mature brand by working with 2 factors that drive sales volume = number of brand users x usage rate per user.  Expand the number of brands users by converting nonusers.  Expand the number of brand users by entering new market segments.  Convert competitors‘ customers.  Convincing current users to increase brand use, users, usage Product Modification www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar Modifying product characteristics through quality, feature or style improvement  Quality improvement aims at increasing the product‘s functional performance.  New features that expand product‘s performance, versatility, safety, or convenience. Build image as an innovator, win loyalty of market segments that value these features  Feature style improvement may only increase product‘s aesthetic appeal. Marketing Program Modification Modifying other marketing program elements the 4 Ps and services. Marketing Strategies: Decline Stage Sales decline- due to technology advance, shifts in consumer tastes & competition Over capacity, increased price-cutting, and profit erosion. As sales and profits decline, firms may withdraw from the market or reduce number of products offered  Stop, increase or maintain investment.  Drop unprofitable customer groups, strengthen investment in lucrative niches.  Harvest firm‘s investment to recover cash quickly.  Divest the business.  Appropriate strategy depends on industry‘s relative attractiveness & company‘s competitive strength in that industry  Companies successful in rejuvenating a mature product, often do so by adding value to the original product. The Product Life-Cycle Concept: Critique The PLC concept helps interpret product and market dynamics, used for planning, control, and forecasting. PLC focuses only on a brand than the market, customers or competition., or new needs, , technology, channels, and other developments. Markets evolve through four stages: emergence, growth, maturity, and decline.

 Emergence- Before a market materializes, it may exist as a latent market. Marketers either follow a single-niche or multiple-niche or a mass-market strategy.  Growth- If new product sellsl, new firms enter, ushering in a market-growth stage.  Maturity- Eventually, competitors cover and serve all the major market segments and the market enters the maturity stage. As market growth slows down, the market splits into finer segments, and high market fragmentation occurs, often followed by market consolidation caused by the emergence of a new attribute with strong appeal.  Decline- Eventually, demand for present products begins to decrease, market enters decline stage. Total need level declines or new technologies replace the old. Brand Valuation

Brand Equity • Brand worth/value- Levis Jeans sans logo or Nike sneakers without the swoosh?


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Brand Management- MBA Notes- Dr Amit Rangnekar • Nurtured and built over years through sustained performance and promotion to a loyal customer base by providing value- Parle-G, Mangola, Microsoft • High brand awareness and consumer loyalty, difficult to put a value on Brand Salience • Brand’s ability to be recalled (come to mind) by customers in a purchase situation • Propensity of a brand to be thought of or noticed in buying situations (Coburn) • Print ads more effective than TV. If print ads added to TV, then increase in brand salience, enhanced memorability of communication & strengthening of brand values. People multi task while watching TV but are not distracted while reading - INS 2004 • Advertising helps change consumer attitudes toward brand & influences market share by increasing brand salience, but has limited impact on brand image (Lisette 1998)

MS NMIMS SDL p 98 P&G Positioning: distinct positions, even in same segments (Aaker & Joakimsthaler) Brand Segment Position Head & Shoulders Shampoos Anti-Dandruff Pert Plus Shampoos Conditioner + shampoo Pantene Shampoos Healthy + shiny hair Ariel Detergent High Tech Detergent Tide Detergent Tough cleaning Cheer Detergent All-temperature cleaning Bold Detergent Fabric softener Dash Detergent Concentrated powder Whisper Sanitary Products Hygienic protection Vicks Cold Clears blocked nose Old Spice After Shave Manliness Crest Toothpaste Cavities Lifestyle dimensions: (Plummer) Activities Interests Work Family Hobbies Home Social Events Job Vacation Community Entertainment Recreation Club Membership Fashion Community Food Shopping Media Sports Achievements

Opinions Own Social Political Business Economics Education Sports Products Culture

Demographics Age Education Geography Income Sex Occupation Family size Dwelling Lifecycle stage

Positioning the company; www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar Customers

Where are my customers

How do my customers find me How do my customers perceive value How do we best deliver value Competition Benefits for customers of competitive brands How am I positioned

Who How do I reach them Demographics Geographies Segments Social / economic status Touch points Media habits Media Promotion (SPPASMDT, WoM) Internet Performance, VFM, 4Ps, technology, service, design, delivery Brick, click, brick and click, click & brick, mail order, catalogue Direct, indirect, generic What needs do they serve, serve better than us, do not serve better Unique, not unique, competitive advantage

Customer power

Brand Power Knowledge Matrix

Unmet

Met

Customer knowledge Articulated Unarticulated Ethical brands Experiential brands (Concern about environment, (Engage and delight customers) tradition) Disney Body Shop Fab India Rational brands Emotional brands (Value proposition) (Satisfy psychological & sociological needs for identity & status) Domino’s- service Walmart- price HP Titan- performance Kellogg Reuters

FCB Grid High Involvement Low Involvement

Thinking Informative Learn-feel-do Habitual Do-learn-feel

Feeling Affective Feel-learn-do Satisfaction Do-feel-learn

Image (symbols, media, atmosphere, and events). An effective identity  Establishes product‘s character & value proposition.  Conveys the character in a distinctive way. www.dramitrangnekar.com

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Brand Management- MBA Notes- Dr Amit Rangnekar   

Delivers emotional power beyond a mental image. To be conveyed through every available communication vehicle & brand contact. Can even be a seller‘s physical space, also a powerful image generator.

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Relevance- customer connect

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Diffferentiation- value addition

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Credibility- deliver on promises & perceptions

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Stretch- extensions, NPD

 Brand Resonance: Describes how to create intense, actively loyal relationships with customers.  Brand Value Chain: Describes how to trace the value creation process to better understand financial impact of marketing expenditures & investments.

Reason to Believe

Co-Branding-Brands sold or marketed jointly with other brands that add value, have equity, and are perceived as an appropriate fit, exit clause critical- McDonalds- Coke, Shoppers Stop Citibank, HPCL- Jet 

Logical fit between 2 brands can maximize individual brand advantages, equity, image

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Generate more sales from existing target market, open additional channels & opportunities

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Promotional cost reduces, complementary effect

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Disadvantages- brand class, brand eclipse, negative repercussions of unsatisfactory performance, risk of overexposure, lack of focus

Ingredient branding- Creating equity for materials, components, parts contained within other brands- Intel inside, Dolby system, Teflon coating,


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Core Identity

McDonald's Brand Identity- Rich identity provides several links to customers Value offering McDonald's provides value as defined by the product, special offers, and the buying experience given the price Food quality Consistenly hot, good-tasting at any McDonald's in the world Service Fast, accurate, friendly, and hassle free Cleanliness The operations are always spotless on both sides of the counter


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Extended Identity

User

Families and kids are a focus, but serves a wide clientele

Convenience

McDonald's is the most convenient quick-service restaurant — it is located close to where people live, work, and gather; features efficient, time-saving service; and serves easy-to-eat food Fast food, hamburgers, children's entertainment Big Mac, Egg McMuffin, Happy Meals, Extra Value Meals and others Ronald McDonald Children's Charities, Ronald McDonald House Family oriented, ail-American, genuine, wholesome, cheerful, fun The family/fun associations are inclusive, and McDonald's is part of the good times The Ronald McDonald Children's Charities engender respect, liking and admiration Golden arches Ronald McDonald; McDonald's dolls and toys Good-tasting hamburgers, fries, and drinks that provide value extras such as playgrounds, prizes, premiums, and games Kids — fun via excitement of birthday parties, relationship with Ronald McDonald and other characters, and feeling of special family times adults — warmth via link to family events and experiences reinforced by the Mc- Donald's emotional advertising

Product scope Subbrands Corporate citizenship Brand personality Relationship Relationship

Value Proposition

Logo Characters Functional benefits Emotional benefits

Core Identity

Extended Identity

Nike Brand Identity Nike ispresent in different segments like fitness and competitive sports Product thrust Sports and fitness User profile Top athletes, plus all those interested in fitness and health Performance Performance shoes based on technological superiority Enhancing lives Enhancing peoples' lives through athletics Brand personality Exciting, provocative, spirited, cool, innovative, and aggressive; into health and fitness and the pursuit of excellence


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Brand Management- MBA Notes- Dr Amit Rangnekar Basis for relationship Subbrands Logo Slogan Organizational associations Endorsers

Value Proposition

Heritage Functional benefits Emotional benefits Self-expressive symbolic benefits

Credibility

Hanging out with a rugged, macho person who goes for the best in clothing, shoes, and everything else Air Jordan and many others "Swoosh" symbol "Just do it" Connected to and supportive of athletes and their sports; innovative Top athletes, including Michael Jordan, Andre Agassi, John McEnroe, Ronaldo Developed track shoes in Oregon High-technology shoe that will improve performance and provide comfort The exhilaration of athletic performance excellence; feeling engaged, active, and healthy Self-expression is generated by using a shoe with a strong personality associated with a visible athlete Makes performance shoes and clothing that are stylish

Customer & Brand Laddering – Parameswaran

 Brand Associations- Strong, Unique, Favorable  Brand Promise- Marketer‘s vision of what the brand must be and do for Consumers.  Brand Elements- Brand names, Slogans, Characters, URLs, Logos, Symbols  Brand Element Choice Criteria- Memorable, Meaningful, Likeability, Transferable, Adaptable, Protectable

Exercise- Slogans (Guess the company / brand)  The Complete man  Just do it  The Joy of Flying  God’s Own Country  We try harder  Innovation at work  This Bud’s for you  Always low prices


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Brand Management- MBA Notes- Dr Amit Rangnekar Customer loyalty ladder Intent- Convert sale into long term customer relationship to mutual benefit The aim is to convert, retain and regain customers. By laddering stages of relationship between company and customers, company can devise specific strategies for customers at each level. Surveys- Attracting new customers 6 times costlier than retaining (Harvard)  Suspect- Potential customer, exposed to your communication  Prospect- Potential customer, interested in your promotion  Customers- Purchasers of your product / service  Clients- Those who return to re/purchase  Advocates- Convinced and happy about the product / service, they now promote on your behalf to others Brand Laddering "Brand Laddering involves progression from attributes to benefits to more abstract values or motivations. Laddering involves repeatedly asking what the implication of an attribute or benefit is for the customer." Strategic Brand Management, Kevin Lane Keller  Keller- means-end chain takes the following structure  Attribute (descriptive features) lead to benefits (meaning attached to attributes) which leads to values (enduring personal goals and motivations).  Laddering concept is applied in brand positioning. When brand is launched, attributes and benefits are the focus, but after the basic functionality is established in the consumers mind, the brand has to deepen the meanings associated with the brand.  Laddering is not easy, as a clear understanding of the brand's core values is essential  Failure of laddering up reduces strategic alternatives available to the brand  Laddering works if consumers are convinced/satisfied with brand‘s basic functionality  In laddering the brand will break free from product restrictions, which gives lot of flexibility in extending and communication to the brand manager  Dove- from ‗moisturiser‘ to " celebrating real beauty "  Nike- is all about Athletic Performance  Raymond- classy apparels to "A Complete Man "  Gillette- Razors to ‗The best a man can get‘  Moov- backache specialist to ‗ A Woman‘s inner voice‘  From Mike Parry


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Brand Management Notes 3.0

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