Why is branding important today? Substantial, attention, structure 1. 2. 3. Brands yield substantial business value based on the anchoring in the consumer’s mind. Branding is a powerful technique in today’s attention economy. Strong brands do not happen by chance but are a result of a structured process. Functions of a brand: What do brands do for the customer? 1. Trust: strong brand serves as an anchor of trust, leading to higher customer retention, share-ofwallet, and positive word-of-mouth, while reducing churn rates. 2. Self-Expression: Brands act as vehicles for expressing identity. The theory of self-congruity suggests that the more a brand aligns with a consumer's self-concept, the likelier they are to purchase. 3. Guidance: Brands reduce mental workload, providing information and helping in decisionmaking through their heritage, origin, product portfolio, and typical user profiles. 4. Emotions: Like Pavlov's dog experiment, brands create emotional connections through repeated exposure, leading consumers to associate certain emotions with the brand. 1 Branding Challenges Dynamic Market Changes: Necessity for brands to adapt quickly to consumer needs and trends. Responsiveness to shifts in preferences, technology, and competition. Preventing Interchangeability: Competition from Private Labels: Aligning Identity and Image: Crucial for brand identity to reflect consumer perception. Alignment influences trust and loyalty. Importance of showcasing unique features to maintain brand identity. Manufacturer brands must distinguish themselves from often cheaper private labels. Digitalization: Need for a strong digital presence to stay competitive in a transparent market. Globalization & Competition: Brands compete globally, requiring strategies that cater to both global and local markets. Market Oversaturation: Brands must differentiate to stand out in a cluttered market. Internal Brand Management: Digital era elevates the role of employees as brand representatives. Internal branding and training are increasingly important. 2 Functions of a Brand Guidance: Brands offer functional benefits, easing decision-making. They provide information based on heritage, products, and pricing. Example: Barilla represents freshness, guiding their customers to quality in their pasta products. Emotions: Brands create connections through consistent positive emotional associations. Advertising efforts anchor these emotions in the consumer's mind. Example: Coca-Cola symbolizes happiness and celebration. Self-Expression: Brands serve as a medium for consumers to express their identity. Alignment with self-concept (self-congruity) can drive purchase decisions. Example: Patagonia resonates with environmentally conscious consumers. Trust: Built through demonstrated competence, reliability, and integrity. Leads to customer loyalty, increased spending, and advocacy. Relies on fulfilling promises and maintaining a positive image. 3 Functions of a brand: Nike as an example: Guidance showcases its heritage of sports excellence Innovations in athletic gear are emphasized Endorsements by top athletes guide consumer expectations Clear messaging on product benefits simplifies purchasing decisions Emotions Self-Expression Nike serves as a symbol of personal fitness and achievement. The brand aligns with individuals who see themselves as active and ambitious. Wearing Nike expresses a commitment to a sporty and healthy lifestyle. The "Just Do It" slogan inspires motivation and perseverance. Advertisements evoke the emotional journey of achieving athletic goals. Creates a connection through shared values of success and determination. Trust Trust built through consistent quality and innovation. A reputation for leading the sportswear market instills confidence. Loyal customer base and brand recognition speak to trust in Nike. 4 Definitions of branding Legal definition (EUIPO): Trademarks are signs used in trade to identify products. The management definition: Brands are benefit clusters that yield sustainable differentiation. → Benefits are divided into functional and symbolic benefits. A brand is a bundle of functional and symbolic advantages that create sustainable differentiation. This perspective emphasizes that beyond simply identifying and distinguishing products, a brand encompasses a bundle of attributes and associations that provide value to the consumer. Functional benefits: Practical aspects of a product/service, ex. convenience, usability, problem-solving features. Symbolic benefits: The brand's representation of social identity, status, and personal significance, often related to lifestyle, values, or aspirations. From a management perspective, brands are not just identity markers, they are dynamic and encompass a broader role that includes building a relationship with the consumer based on the unique value they provide. 5 Starbucks as a Brand Starbucks is more than just a coffee shop; it's a brand that has crafted a unique cluster of benefits, creating sustainable differentiation in the market of coffee retailers. Functional Benefits: Provides high-quality coffee and a diverse menu that caters to different tastes and dietary preferences. Offers a consistent product experience across all its global locations. Creates a convenient customer experience with mobile ordering, drive-thru services, and free Wi-Fi in stores. Symbolic Benefits: Starbucks positions itself as a "third place" between home and work, symbolizing comfort, community, and a personal escape. The brand has become a status symbol; carrying a Starbucks cup is often seen as a lifestyle choice reflecting a modern and cosmopolitan identity. Engages in environmental sustainability and ethical sourcing, which resonates with consumers who prioritize corporate responsibility. 6 Starbucks successfully combines functional benefits with symbolic associations, reinforcing its identity and ensuring its distinction as a leading brand in the coffee industry. Identity-Based Brand Management: views a brand through two lenses: internal (company's definition) and external (consumer perception). Brand Identity (Management Perspective): Internal view of the brand's long-term characteristics. Brand Vision: Future aspirations and goals of the brand. Brand Values: Core principles guiding actions and communication. Brand Personality: Human traits associated with the brand. Brand Competencies: Special abilities or expertise, often linked to product quality. Brand Offer: Specific products and services offered. Linking Identity and Image: aligning brand identity (company's intent) with brand image (consumer's view). Brand Image (Market Result): External view as perceived by target groups. Brand Awareness: Recognition and recall level among consumers. Brand Knowledge: Information consumers hold about the brand and its offerings. Brand Benefits: Perceived functional and symbolic advantages. Global Image: Overall consumer impression of the brand. Communication through various touchpoints is key to shaping brand image. 7 aim = create coherence between how brand is presented (identity) and how perceived (image). Importance: crucial for consistent brand management Vital for building strong, relatable brands that endure over time 8 Brand Identity (Management Perspective) Brand Image (Market Result) Brand Vision: Nike's vision is to be the leading innovator in athletic footwear, apparel, equipment, and accessories, inspiring athletes around the world. Brand Values: Nike emphasizes innovation, inspiration, and empowerment in sports and fitness. Brand Personality: The brand embodies characteristics of being energetic, motivational, and high performing. Brand Competencies: Nike is known for its high-quality, technologically advanced sports products and its effective marketing campaigns. Brand Offer: Nike offers a wide range of athletic products, including footwear, apparel, and sports equipment. Brand Awareness: Nike is highly recognized globally, with the "swoosh" logo and "Just Do It" slogan being iconic. Brand Knowledge: Consumers associate Nike with professional athletics, high-quality sports apparel, and innovative design. Brand Benefits: The functional benefits include highquality athletic performance, while the symbolic benefits are associated with determination, success, and the athletic lifestyle. Global Image: Nike is perceived as a leader in the sports apparel industry, synonymous with sporting excellence and cutting-edge design. Linking Identity and Image Nike aligns its brand identity (what it stands for and offers) with its brand image (public perception). This is achieved through consistent branding across all touchpoints, including product design, marketing campaigns, sponsorships of athletes, and social media presence. By ensuring that its internal vision, values, personality, competencies, and offers are reflected in the public's perception and knowledge of the brand, Nike has established a strong, cohesive brand identity that resonates with its target market. 9 Purpose of the Brand Funnel: Maps the customer journey with a brand, from awareness to advocacy. Highlights customer progression stages and identifies improvement areas. Stages of the Brand Funnel: Aided Awareness: Initial recognition when prompted. Consumers recognize the brand from a list or suggestion, without needing to recall it independently. Importance: Essential for initial brand introduction Familiarity: Post-recognition, consumers gain deeper knowledge about the brand's offerings and values, moving beyond just recognizing the brand. Importance: Builds deeper brand connections and understanding Relevant Set: Consumers consider the brand among their shortlist for potential purchases. The brand is seen as relevant and a primary choice in its category. Importance: Marks the brand's entry into consumer purchase considerations First Choice: The brand becomes the preferred option among the relevant set. This stage is pivotal as it directly relates to actual purchase decisions and market share. Importance: : Indicates strong brand preference and potential sales Recommendation: Final stage where loyal customers actively recommend the brand to others, enhancing the brand’s influence through word-of-mouth. Importance: Drives organic growth and reinforces brand credibility. Goal of the Brand Funnel: not only facilitate sales but also cultivate loyal brand advocates. Understanding funnel helps businesses pinpoint where they might be losing potential customers & where enhance the customer experience. Application in Brand Strategy: Use funnel to gauge brand health at each stage. Identify opportunities for strengthening brand appeal & customer retention. 10 Aided Awareness: Most consumers, when presented with sports apparel or athletic footwear options, will recognize the Nike brand when they see the iconic Swoosh logo or hear the slogan "Just Do It". Familiarity: Consumers familiar with Nike are aware of its product range, from sports shoes to apparel, and its association with top athletes and sports events. They understand Nike's reputation for quality, innovation, and association with athletic excellence. Relevant Set: When thinking of purchasing athletic wear or sneakers, Nike is often part of the shortlist for many consumers, especially those prioritizing performance and style. First Choice: For many in the market for sports-related goods, Nike is often the first choice due to its strong brand image, quality assurance, and the latest technology in athletic gear. Recommendation: Satisfied Nike customers frequently recommend the brand to others, advocating for its products based on their positive experiences. This could be seen in social media posts, reviews, or word-of-mouth endorsements, reinforcing Nike's presence and credibility in the market. 11 Brand Positioning = Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect. framework that helps marketers define & communicate brand's unique value proposition. consists of three main elements, CDR: clarity, relevance and differentiation. Elements work together to establish brand's position in minds of consumers → Inefficient Positioning: If a brand lacks clarity, relevance, or differentiation, its positioning is considered inefficient. Examples: tech product with advanced features that aren't communicated clearly or fashion brand that doesn't distinguish itself from similar labels. Importance in Marketing Strategy: Effective positioning differentiates a brand in a crowded market. Helps in creating a unique brand identity that resonates with the target audience. Influences consumer perception and decision-making, guiding them towards choosing the brand over others. 12 Definition of Clarity in Brand Positioning: Clarity is about making the brand's message and value proposition easily understandable to the consumer It helps consumers quickly comprehend what the brand represents and offers. Key Components of Clarity: Brand Identity: Clarity begins with a distinct brand identity, which includes the brand's values, personality, vision, and standpoints. Power of Three: A principle that suggests concepts grouped in threes are more memorable and impactful, enhancing communication clarity. Consistency: brand's message being uniform across all platforms and touchpoints. ensures coherent brand experience, whether in-store, online, or through advertising. Continuity: maintaining the core brand message and identity over time. adapting to market changes while preserving the brand’s essence, contributing to long-term brand equity and recognition. → For a brand to be effectively positioned in the minds of consumers, it must communicate clearly what it represents, ensure that this representation is consistent wherever the brand appears, and maintain this representation throughout its lifespan. These three elements work together to build a strong, reliable, and recognizable brand. 13 Example Nike: Clarity: Nike's message "Just Do It" promotes motivation and athletic excellence, clearly conveying the brand's dedication to performance and innovation. Brand Identity: Nike is synonymous with athleticism, high-quality performance wear, and the spirit of competition, reflected consistently in its marketing and product lines. Power of Three: Nike focuses on performance, innovation, and inspiration, making its brand message memorable and impactful. Consistency: Across all channels, from product design to athlete endorsements, Nike ensures a uniform and recognizable brand experience. Continuity: Nike has consistently emphasized athletic excellence and innovation, maintaining this message as a core part of its brand across decades. 14 Definition of Relevance in Brand Positioning: Relevance is the degree to which a brand's offerings and messaging resonate with the interests, needs, and priorities of its target audience. It determines how meaningful and significant a brand is to consumers, influencing their engagement and choice. Key Components of Relevance: Benefits: valuable offerings provided by a brand to meet consumer needs and wants. They can be functional (e.g., convenience, performance, reliability) or symbolic (e.g., prestige, identity, lifestyle). offer expected need fulfillment, making the brand more appealing and relevant to the consumer. Example: electric car brand offering extended range and fast charging appeals to consumers valuing environmental consciousness and convenience Vitality: Refers to a brand's ability to stay dynamic, current, and significant over time by adapting to trends, maintaining cultural significance, and engaging consumers. ensures brand remains relevant by evolving with current trends & topics, keeping brand in consumer conversations. Example: tech company frequently updating its software to stay abreast with the latest technological advancements appeals to users who value innovation and security. Distinguishing Benefits from Facts: Emphasizing benefits over mere technical facts can enhance a brand's relevance. For instance, Intel promotes the speed and reliability of its processors, which resonates more with consumers than just listing technical specifications. 15 Benefits = Expected need fulfillment Addressing Needs Using Maslow’s Hierarchy: Maslow’s Hierarchy helps brands address various consumer needs from basic physiological needs to self-actualization. Examples: Physiological Needs: Affordable food products from a grocery store brand. Safety Needs: Security systems for home safety. Love & Belonging: Social media platforms for community. Esteem Needs: Luxury cars for status and respect. Self-Actualization: Educational brands for personal growth. 16 Identifying deeper rooted needs: Laddering technique connects what a product has (Attributes) to what it does for the consumer (Consequences), and how that fulfills their deeper personal goals (Values) Attributes: characteristics of a product / service Concrete: Tangible features (e.g., a washing machine with multiple programs). Abstract: Intangible aspects (e.g., the range of washing programs for convenience). Consequences: outcomes that consumers experience from using the product / service Functional: Practical benefits (e.g., the best-fit washing program). Emotional: Personal feelings (e.g., satisfaction from clean laundry). Values: End-goals or states of being that drive consumer behavior (e.g., freedom). Patagonia: Attributes: Concrete: Durable, weather-resistant clothing. Abstract: Commitment to sustainability and environmental responsibility. Consequences: Functional: Reliability for outdoor activities. Emotional: Feeling of responsibility and pride. Values: Desire for ecological preservation and personal integrity. 17 Vitality = Using current trends and topics to create talk-about of your brand refers to a brand’s ability to stay relevant, dynamic, and engaging by adapting to current trends and topics brand's capacity to evolve with changing consumer preferences & market conditions. Using Topicality to Create Vitality: Brands use current events, trends, and popular topics to maintain visibility and relevance. By staying current, brands remain part of the ongoing conversation. Application in Brand Management: Vitality keeps a brand relevant in the rapidly changing market. It’s about adapting and evolving with the times to stay connected with the target audience. Measures to Create Vitality: Brands can use various marketing tactics to inject vitality, such as: o creating viral marketing campaigns o utilizing billboards in key locations o running promotions o hosting or sponsoring events o engaging with influencer marketing 18 Trend identification in branding involves understanding and mapping three fundamental trend elements: human, technological, and societal trends. Human Trends: Changes in consumer behavior, lifestyle choices, values, and demographics. Technological Trends: Advancements in technology altering consumer-brand interactions, like mobile apps, social media, and ecommerce. Societal Trends: Broader societal shifts such as environmental consciousness or health and wellness. Basic Needs in Trend Identification: Core needs that consumers seek to fulfill, enduring even as markets evolve essential for brands to maintain relevance. Drivers of Change: Forces shaping the direction of consumer expectations and market movement monitor + respond to drivers to stay ahead in market Innovations: New solutions developed by brands in response to evolving consumer needs and preferences. The "Sweet Spot" in Trend Identification: convergence point where a brand’s offering meets basic consumer needs, adapts to drivers of change, and incorporates innovation. Positioning in this "Sweet Spot" helps brands strongly resonate with consumers, fulfilling expectations and standing out from competitors. 19 Differentiation focuses on how a brand sets itself apart from competitors, emphasizing its unique features or benefits. Points-of-Parity (PoP): Attributes where brand matches its competitors, meeting basic expectations of category. Examples: Safety features in cars Prevents customers from dismissing the brand due to a lack of fundamental features. Points-of-Difference (PoD): Unique attributes or benefits that distinguish a brand from its competitors. Critical for winning in marketplace by offering compelling reasons to choose brand. Examples: Tesla's autopilot feature Highlights a brand's unique qualities, making it stand out in the market. Brand Personality: Set of human character traits applicable & relevant to brands. Essential for making brand more relatable and human-like to consumers. Creates a unique emotional connection with consumers. Helps brands to stand out beyond just product features. Integrating PoP, PoD, and Brand Personality: Successful differentiation combines meeting basic expectations (PoP), offering unique selling points (PoD), and a distinctive brand personality. Ensures a well-rounded brand identity that appeals to consumers at multiple levels. 20 Choosing PoP or PoD: KANO model A tool for identifying which product or service features influence customer choice. Categorizes features into basic needs, performance needs, and delighters. Basic Needs: Essential features that customers expect as standard. Role in Differentiation: Serve as Points-of-Parity (PoP), ensuring customer satisfaction at a fundamental level. Example: In smartphones, basic needs include reliable connectivity and battery life. Performance Needs: Attributes that increase satisfaction when present and cause dissatisfaction when absent. Role in Differentiation: Can act as Points-of-Difference (PoD) if they surpass competitors' offerings. Example: Camera quality or storage space in smartphones. Delighters: Features that provide a competitive edge by exceeding customer expectations. Role in Differentiation: Strongly differentiate a brand, offering unique value and appeal. Example: Innovative features like advanced facial recognition or ecosystem of connected devices in smartphones. 21 Strategic Application: Brands should balance meeting basic needs with providing performance features and delighters. Differentiation is maximized when a brand effectively addresses all three categories, creating a compelling reason for customer choice. Implications for Brand Positioning: Understanding customer preferences in each category helps crafting strong brand positioning strategy. Brands can prioritize features based on their impact on customer satisfaction and loyalty. Example for Understanding Kano Model: A car brand could focus on safety features (basic needs), fuel efficiency (performance needs), and autonomous driving technology (delighters) to differentiate from competitors. Key Takeaway: valuable framework for brands to identify where to invest in product development and marketing for effective differentiation. 22 Understanding Brand Personality: The set of human character traits applicable and relevant to brands. Humanizes a brand, creating a unique emotional connection with consumers. Differentiates a brand beyond product features. Brand Personality Scale (BPS): Sincerity: Genuine, honest, wholesome. Example: Dove with its real beauty campaigns. Excitement: Spirited, imaginative, up-to-date. Example: Red Bull's extreme sports image. Competence: Reliable, intelligent, successful. Example: Google’s tech leadership. Sophistication: Charming, glamorous, aspirational. Example: Chanel's luxurious appeal. Ruggedness: Outdoorsy, tough, adventurous. Example: Patagonia's durable gear. Case Study: Apple Inc.: Excitement: Showcased through innovation and anticipated product launches. Competence: Reflected in reliable products and user-friendly interfaces. Sophistication: Evident in sleek design and premium pricing. 23 Process of Brand Positioning The process of brand positioning involves strategically defining and communicating the unique value proposition of a brand in the minds of its target group. 24 Step 1: Brand Analysis thorough examination of the brand's current market position, strengths, weaknesses, opportunities, and threats understanding how consumers perceive the brand and identifying the brand's unique attributes. 1. 2. 3. Ensure Relevance: Does the brand resonate with what the audience cares about? Identify Differentiation: How does the brand stand out from the competition? Match with Brand identity: Does the brand's positioning reflect its true character + values? Key activities: Brand Audit: evaluate current state of brand including visual identity Competitor Analysis: assess strengths weaknesses + threats of competitors Customer Insights: collect and analyze data SWOT Outcome: thorough understanding of brands current position, market context and areas for improvement or differentiation 25 Step 2: Positioning model: how a brand strategically aligns its core values, benefits, personality traits, and reasons to believe (RtBs) to create a distinct market position. Brand Core: essence or heart of the brand. It’s what the brand stands for, often encapsulated in a slogan or core message. Nike’s brand core is often associated with performance and inspiration, encapsulated in its iconic slogan “Just Do It.” Benefits: These are the practical and emotional advantages that the brand provides. Benefit 1: high-performance athletic wear Benefit 2: innovative technology in its products Benefit 3: fashion-forward design Personality Traits: These are human-like traits attributed to the brand. inspiring (Trait 1), innovative (Trait 2), and determined (Trait 3) Reasons to Believe (RtB): These are the justifications or proof points that back up the brand's claims. RtB 1: endorsements from professional athletes RtB 2: its history of product innovation RtB 3: customer testimonials or its brand legacy in sports 26 Step 3: Creative Execution bringing a brand's strategy to life through visual and communicative design includes development + consistent application of corporate design elements across all customer touchpoints to build distinctive brand identity 1. 2. 3. Corporate Design Logo: A recognizable graphic representation of the brand. Key Visuals: The central, recurring images or design elements used across marketing materials. Colors: Color schemes selected to evoke specific emotions aligned with the brand's personality. Font: Typography chosen to reflect the brand's character and ensure legibility across mediums. Design Guidelines: Rules that ensure consistency in the use of all design elements. Core Messages: the essential themes a brand promotes across all communications Communication Plan: dictates the where (channels like social media or TV) and when (timing for campaigns and ads) to deliver these messages effectively Symbolic Meanings of Colors: Red: Energy, passion, danger. Orange: Creativity, youth, enthusiasm. Yellow: Happiness, hope, spontaneity. Green: Nature, growth, harmony. Blue: Calmness, trust, competence. Purple: Luxury, mystery, spirituality. Pink: Femininity, playfulness, romance. Brown: Health, warmth, honesty. Black: Power, elegance, perfection. White: Purity, innocence, minimalism. Gray: Professionalism, formality, convention. 27 Brand Portfolio Management Strategic approach to optimize a company's collection of brands. Focuses on ensuring that multiple brands under one umbrella complement each other, cater to diverse target groups, and collectively contribute to business success. Major Questions: Which target group(s)? What goal? What role? How many brands? Which relationship? Product Branding: Focuses on creating a distinct identity for specific products. Target Group: Consumers, end-users, retailers. Employer Branding: Centers on a company's reputation as an employer. Target Group: Job seekers, current employees, potential talents. Corporate Branding: Builds and manages the identity of the entire organization. Target Group: Stakeholders, investors, influencers. 28 Dimensions of Brand Portfolios: include both the vertical (brand architecture) and horizontal (multi-branding) aspects, shaping how a company structures and manages its collection of brands. Vertical Dimension: Brand Architecture Defines the hierarchy and relationship between a corporate brand and its product brands. Branded House: Utilizes a single corporate brand across all products and services. Example: Google, where services like Google Maps and Google Drive share the Google name. Endorsement Branding: Features sub-brands endorsed by corporate brand, leveraging reputation while allowing distinct product identities. Example: Procter & Gamble endorsing brands like Tide and Pampers with the P&G name. House of Brands: Maintains separate identities for each product, with corporate brand in background. Example: Unilever with distinct brands like Dove and Lipton, separate from Unilever's corporate identity. Horizontal Dimension: Multi-Branding Involves managing multiple brands within the same market category. Single-Brand Strategy: Focuses on one brand per market segment for clarity and strong presence. Example: Red Bull dominates the energy drink segment with a single, focused brand. Multi-Brand Strategy: Offers multiple brands within the same category to cater to diverse consumer preferences and cover more market segments. Example: Volkswagen Group with various automotive brands like Audi, Porsche, and Skoda, each appealing to different consumer segments. 29 Key Takeaways: Brand architecture (vertical dimension) is about how a company structures the relationship between its corporate brand and product brands. Multi-branding (horizontal dimension) focuses on how a company positions different brands within the same market category. The choice of brand architecture and multi-branding strategies depends on the company's goals, market dynamics, and target consumer segments. 30 Internal Brand Management refers to the strategies and practices that ensure a company's employees understand, support, and embody the brand's values and positioning Brand Positioning Concept: Definition: Establishing how the brand wishes to be perceived in the market. Key Aspect: Clear internal communication of the brand's core message and values across the organization. Anchoring Among All Employees: Goal: To deeply embed the brand's positioning within the company culture. Requirement: Every employee, from leadership to front-line staff, must understand and embody the brand's identity and their role in representing it. Operational Execution: Process: Translating the brand's positioning into everyday operations. Expectation: Employees must deliver on the brand's promise through consistent actions and decisions, providing a uniform brand experience to customers. Key Strategies in Internal Brand Management: Promoting Brand Knowledge: Ensuring all employees are well-informed about the brand's history, values, objectives, and strategies. Cultivating Brand Commitment: Developing strong psychological connection between brand and employees act in brand's best interests. Internal brand management is crucial for ensuring that a brand's positioning and values are consistently reflected not just in marketing but in every aspect of the company's operations and employee behavior. 31 32