Brand management
I.
Introduction
Definition of a brand (American Marketing Association): A brand is a name, term, sign or
symbol or design or a combination of them intended to identify the goods or services of seller
and to differentiate them from those of competition.
Too restrictive
Optimal brand definition: A name, a sign or a symbol which serve to identify and
differentiate a product versus other ones and that is registered in the minds of consumers as a
set of tangible and intangible benefits.
Brand is a name that influence buyers and create mental associations
Example: Apple: tangible benefits: design, innovation, intangible benefits: fashionable, part
of a group…
HP, Fanta, Sony
different personalities, quality perceptions, attitudes toward the brand,
different feelings from consumers…
Other definition (Keller): Is a set of mental associations, held by the consumer, which add to
the perceived value of a product or service. The association should be unique (exclusivity),
strong (saliency) and positive (desirable).
Example: Nike is unique and strong but there are negatives associations due to child labor.
BP has negative associations too.
A brand is more than a product: added value given to a product, creation of perceived
differences among products
The power of a brand resides in the mind of consumers
The world’s top 3 brands??
Coca-Cola, IBM and Microsoft
The World’s 10 best Global Brands
Rank
1
2
3
4
5
6
7
8
9
10
Brand
2010 Brand Value
($Millions)
Coca-Cola
70.452
IBM
64.727
Microsoft
60.895
Google
43.557
GE
42.808
McDonald’s 33.578
Intel
32.015
Nokia
29.495
Disney
28.731
HP
26.867
The Belgian’s 7 Strongest Brands
Rank
Brand
1
2
3
4
5
6
7
Belgacom
Proximus
Colruyt
Mobistar
Delhaize
Quick
Spa
Brand Value
($Millions)
1.145
763
737
733
247
226
185
Belgacom has two strong brands (number 1&2)
1
Country of origin makes a large role in certain cases.
When do we have brands?
Reduction of the risk
Perceived risk
Brands
They are two types of risks. When you buy a certain brand, you buy a guarantee. It’s not easy
to create brand.
Brand or not brand?
-
Need of important communication support
Need R&D support
Need trade support
Firms using brand management
Consumer goods (Swatch)
Services (Base)
Industrial Products (ArcelorMittal)
Industrial components (Intel) => in the ad we can see more the logo of Intel than the logo of
HP. Intel becomes stronger in the negotiations versus HP.
What can be branded?
Consumer goods, geographic location, high-tech products, online products, retailers and
distributors, services, people and organizations, perishable products, B to B products, causes,
sport, arts and entertainment…
Everything can be branded but giving a brand is more than giving a name. You need also to
innovate, it’s essential.
Evolution of brands
1. 1990’s: Retailers brands and competition among national brands$
End of brands?
2. 2000’s: Success of brands continue
Advantages of brands
Firms
 Differentiation
 Consumer loyalty
 Possibility of premium price
 Financial capitalization
 Legal protection
Consumers
 Identification
 Origin, traceability
 Reduced risk
 Guarantee
 Constant quality
 Value of sign/part of a community
Creation of a barrier to entry
2
Difficulties of today’s branding
-
High cost of brand creation and brand support
Increased power of consumers
Less controllable brand image
Aggressive private labels competition
Importance of global brand
Fragmentation of media
Brand responsibility given at a high level
Brands important for financial analysts
New challenges of brand building
1. End of new brand proliferation /Increased use of brand extension
o Increased use of brand extension
o Capitalization on existing brand
2. Brands in social networks and internet
o Marketers do not control anymore the brand image
o Power of bloggers
o Power of social networks
How to keep the brand strategy without being too quickly influenced?
3. Optimization of brand portfolio
o Complex portfolio
o Reduction of the number of brands
o Difficulty to select the right ones
4. Brand architecture build up
o Which name to give to a brand?
o Which name to build or to eliminate?
o What branding strategy (House of brand or branded house)?
5. Capitalization on global brands
o Creation of mega brands
o Important economies of scale
o Brand localization?
6. Sustaining brands with innovation
o Not communication management
o Creation by innovations
o Rejuvenated by products, not by advertising
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7. Addressing diversity
o Fragmentation of markets
o Many sub-segments
o Customization needed
8. Challenge of ethics
o New stakeholders: non-governmental organizations
o Pension funds interested
o Difficulty in the virtual world, info spread very fast
9. Brands do not belong to marketing anymore
o CEO’s responsibility
o Need for continuity
o Need for brand management across business unit
The enlarged scope of brand management
1. From transactions to relationship
o Focus on keeping clients, on building long lasting relationship
o Relationship marketing: financially driven concept => banking world is an
example
o Long relationship with the consumer, loyalty group. Be close to ours
consumers
2. Bonding through aspirational values
o Aspirational brands. Concept of CEO Saatchi&Saatchi
o Non product related values of the brand
o You inspire your consumers
3. Importance of communities
o Before, consumers: individuals, eventually market segments
o Now, consumers belong to groups, tribes or communities
o Need to build brand communities
4. Activation the brand at contact
o Too much media fragmentation
o All brands must think of their activation plan
 Acting within communities
 Acting on premises, at the point of consumption
 Acting with prescribers
 Acting with virtual communities
Brand legal definition: a sign or set of signs certifying the origin of a product or service and
differentiating it from the competition.
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II.
Building brand equity
A. Brand equity
What is brand equity? Is a new concept and you have different way to define this concept
Customer brand equity: from the consumer point of view
Financial brand equity: from the financial point of view
Customer brand equity (Keller)
= Differential effect that brand knowledge has on consumer response to the marketing of that
brand.
If the brand is much known, you have two different reactions:
1. Brand knowledge
Brand awareness:
- brand recognition
- Brand recall
Brand image:
- Brand benefits
- Brand attributes
2. Strong customer brand equity
-
High level of awareness
Strong image: associations are strong, unique and favorable.
Financial brand equity
Strong brand equity => high brand value
Brand equity models
DDB survey among marketing directors: What is strong brand equity?
- Brand awareness (65%)
- Strength of brand positioning, concept, personality (39%)
- Strength of signs of recognition (logo, code, packaging) (36%)
- Brand authority with consumers, brand esteem, perceived status, loyalty (24%)
5
1. Aaker (1991,1996: Brand equity 10)
Brand equity:
-
Brand loyalty :
a. Price premium
b. Satisfaction/loyalty
-
Brand awareness
c. Brand awareness
-
Brand associations
d. Perceived value
e. Brand personality
f. Organizational associations
-
Perceived quality
g. Perceived quality
h. Leadership
-
Other proprietary assets
i. Market share
j. Price and distribution indices
2. Keller (1992)
-
Indirect approach
o Brand awareness
o Brand image
-
Direct approach
o Mix marketing
Brand equity
3. Martin and Brown (1990)
Brand equity:
-
Perceived quality
Brand image
Perceived value
Trust
Commitment
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4. Lassar, Mittal & Sharma (1995)
Brand equity:
-
Performance
Social image
Perceived value
Trust
Commitment
5. Thomas (1993)
Brand equity: leadership, brand awareness, satisfaction, brand loyalty, price premium, brand
extension, brand image
6. Landor Associates
Image Power:
Brand equity: Awareness and esteem
7. Feldwick (1996)
Sources of brand strengths:
-
Brand awareness
Brand image
Perceived quality
Perceived value
Brand personality
Organizational associations
Brand strength:
Leadership
Price premium
Brand loyalty
Market share and distribution
Brand value
There is a distinction between cognitive and affective variables.
8. Millward Brown International (1996) : Brand Dynamics Pyramid
9. Srivastava and Stocker
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10. Interbrand
11. Kish, riskey &Kerin (2001)
12. Tocquigny
13. Total research Corporation
14. Young and Rubicam
B. Brand identity, positioning and image
Brand identity integrates also the personality of the brand. Identity goes further than the
positioning.
Brand equity and positioning:
 Not enough brands know who they are
Reason of being and what they stand for
 Essential to define the brand’s positioning and identity
Need of a brand charter
Brand positioning: The firm identifies the advantages or benefits that will differentiate the
brand versus other brand.
No integration of the personality
Brand identity: It gives information on what the brand is, its personality, its history, its values.
There are more intangible values integrated.
More complete concept. You give more
info about the brand.
Kapferer’s 6 Facets Brand identity prism
Sender
Physique
Personality
Relationship
Reflection
(prototypicval
buyers
Culture (values)
Self-image (of
actual buyers
Consumer
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-
-
-
-
Physique: The key physical qualities, product and brand attributes that make the brand
recognizable
Example (Lacoste): shirt, croco, outstanding quality, comfortable
Personality: The way in which the brand speaks of its products. The kind of person it
would be if it were human
Example (Lacoste): optimistic, without excess, touch of class
Culture: a brand has its own set of values
Example (Lacoste): French elegance, individualist, aristocratic
Relationship: A brand is often at the crux of transactions and exchanges between
people.
Example (Lacoste): social conformity
Reflection: The desired image of the brand user, the consumer’s outward mirror
Example (Lacoste): neither hyper-masculine, neither hyper-feminine, trans-generation
Self-Image: The consumer’s internal mirror, how people see themselves when
consuming the brand.
Example (Lacoste): be a member of a chic club.
How to develop a good identity prism?
-
Few words to each facet
Not the same words on each facet
All words have strength and are not lukewarm
Facets are not filled with traits image: identity is not image. Identity is selected
by the company and image is perception of consumer.
Some firms have their own identity models:
-
“Brand key” for Unilever
“Footprint” for Johnson&Johnson
Brand essence
Brand essence is the summary of the brand positioning and/or identity
Example: in 1 or 2 words, try to define the brand essence
o Dove: feminity restored
o Benetton: tolerance & friendship
Brand image
All the associations held in consumer memories that characterized one brand versus another.
(Dobni and Zinkhan 1990)
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III.
Launching the brand
Choose a name is important; sure that selection of name is well done.
Brand creation
a. Defining the brand’s platform
= Creation of the brand’s identity and positioning.
Why must this brand exist?
b. Choosing the right name
More than 10 million of protected brand names in the world. A consumer knows +/- 5000
brand names. There are so many names in the market. It has to be short, that could be better. It
has to be international name, clear link or not with the product.
A name should be:
- Simple Example : Dash, OMO, Ikea, Lipton, Kodak
- Short
- Easy to pronounce : Non good example: Head & Shoulders, Hoegaarden
- Not descriptive : Non good example: Banque directe, Optic 2000, New man
- International: Non good example: Pschitt!, Nova
- Not linked to time
o Protecting the name
 In one country
 In Europe
No possibility to protect a brand in the world (one country after one)
 Only protected in one product category
 New brands are not too close to existing brands
Example: Netium used by a company of micro-computer (versus Pentium). “Deep Valley” for
clothes versus “Sun Valley”
o Testing the name
 Can last several months and be very costly
 Some companies are specialized (Nomen)
How do you test name?
-
First you establish a list
You make a first ranking
You test with some clients
o Association tests
o Wording tests
o Memorization tests
o Preference tests
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c. Choosing the right logo
-
Need to communicate the values of the brand
Need to modernize regularly (Coca-Cola every 10 years
Can be associated with a typo (like LU)
Shorter life cycle for the slogan
Key advantages of strong brands
-
Large share of market
Higher price and less elastic (price premium, low price sensitivity)
Larger margins (like Apple)
Good quality perception
Higher trust (you want to go and buy this brand again)
Greater consumer loyalty
Stronger vs. competitive marketing actions
Better defense in case of marketing crisis
Greater trade cooperation (more power)
Brand extension opportunities
Less risks
Growth in mature market through
-
Existing customers:
o Building volume per capita
o Building volume by addressing the barriers to consumption
o Growth through new uses and situations
-
Line extension : offering different product forms
Innovations (P&G and L’Oreal: 3.2% sales, Unilever: 1.8%; Nestlé: 1.2%). In food
business, innovation seems less important than in other sector.
Internationalization
Creation of entry barriers
-
Mastering technology and quality. Example: P&G, L’Oreal and 3M
Domination through image and communication. Example: Coca-Cola, Nike, Adidas
Costs of production. Example: Dell and Decathlon
Range extension. Example: Dim
Putting a name to a product; Example: all chemical firms produce elastone, only
DuPont produce Lycra
Controlling relationship with opinion leaders
Controlling distribution (McDonald’s)
Legality (protection against counterfeit products)
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IV.
Growth through brand extension
Brand extensions:
= Transfer the name and the image of a brand to gain a competitive advantage in a new
category
-
Most firms exploit today brand extension: when they can to extend the brand they try
to do it.
Industrial and luxury brands have traditionally extended their brands (Siemens,
Philips, Accessories, jewelry and watch)
Systematically used by Japanese brands (Mitsubishi: shipyards, nuclear plants, cars,
high fidelity, banks…)
Example of brand extension: - Virgin (in different categories), Mars (to ice-cream business),
Vitalinea (to biscuits and drinks), HP (to digital photo), Mercedes ( to vertically with class A),
Salomon (to surfboards).
Key reasons for brand extension
-
High costs of launching brand, so extend brand is a way to reduce costs
Less risky of a brand extension if it’s worth
A way to become stronger and bigger
High costs of supporting several brands
Need to build mega brands in face of retailer brands
Escape from declining market segment
Advantages of brand extension
-
Avoid the costs of launching a brand
Lower brand support costs, especially in advertising
Use of existing awareness
Use of existing image
Revitalize the brand
Better accepted with trade
Enhance the parent brand image
Risks of brand extension
-
Dilution of the mother brand image
o No fit between both product categories
Innovation is hidden by the existing brand name
Destruction of the existing brand capital
Cannibalization of the mother brand if the different categories are too close.
Possibilities of fit: same target group, same benefit, same technology
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Example:
- Bic launched a perfume and it didn’t not work
o Bic: practical, cheap, disposable
o Perfume: dream, feminity, pleasure
- Bic phone
- Pierre Cardin had dilute his brand image
- Fit: Evian : water and cream=> same benefit, Salomon: involved the brand => same
target group and same technology
Different classification of brand extension
1. Brand or line extension
Line extension: Launch of products under the same name in the same category
Brand extension: Launch of products under the same name in other category
2. Horizontal or vertical extension
Horizontal: we keep the same price bracket
Vertical: upward or downward extension
Specifities of vertical brand extensions:
-
-
-
Extension to the low-end of the market : frequent in the fashion category
Examples: Mercedes (class A), Giorgio Armani (Emporio Armani), Donna
Karan (DKNY)
Extension to the high-end of the market
Examples: Volkswagen (Phaeton, not a success), Maybach (Mercedes,
competitors are Rolls Royce and Bentley)
Extension to both sides
Examples: Accor Group: cover all segments with Formula 1, Ibis, Novotel,
Mercure and Sofitel)
3. Continuous or discontinuous extension
Continuous extension: a sport brand can cover another sport.
Discontinuous extension: real diversification (Yamaha: piano and motorbikes)
Research on brand extension
-
Early brand extension research (Aaker and Keller 1990)
o Fit: feeling or perceived similarity between the core product and the extension
The results were determined by the method, very conservatives results
In the real world, consumers are more informed and can better evaluate extension
New research
An extension is considered acceptable if it “fits” the idea that consumers have of the parent
brand:
- High perceived similarity with the parent brand
- High coherence between the extension and the brand concept
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Key to successful brand extension
-
The brand has strong equities (assets)
These assets are transferable
Included in a long term vision, not on an ad hoc basis
The brand benefits and values are very relevant to the new category
The new products will deliver a perceived competitive advantage
The company has the resources on the long run
We have the right name
The new category is really attractive
There are limits to brand extension research
Brand extension process
1.
2.
3.
4.
5.
6.
7.
8.
What are brand equities?
What is the intrinsic attractiveness of likely extension categories?
Can the brand assets be transferred?
What is the relevance of these assets?
What is the ability of the company to deliver the expected benefits?
What is the perceived superiority of the extension to existing competitors?
What is the ability of the firm to sustain competition in the extension?
What are the feedback effects on the parent brand?
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V.
Building brand architecture
Find the right name for the different products that you have in your portfolio.
Key questions
- What is the branding strategy?
- What brand name and symbols should we give to different products (corporate name,
product name??)
- How many levels of branding do we need to give?
Brand architecture
-
-
Define what the relations between products are
Decide how the system of names and symbols will be organized
o Importance of the product name or corporate name
o Number of levels of branding
o Visibility of the names
Determine some rules in advance
Importance of the corporate name
Many companies are leveraging today their corporate name to benefit from a worldwide
name.
It is difficult in consumer goods where targeting on multiple segments is key.
Example: Pepito of LU (children from 6 to 10) and Prince of LU (children from 10 to 15)
Number of levels
Number of levels of branding depends on:
-
The level of segmentation in a market
The strategic use of the corporate name
Degree of visibility
What is the degree of visibility of different brand name?
- Corporate name? (Samsung, Sony, Toshiba)
- Business units?
- Divisions? (Accor travels, Accor Hotels, Accor casinos)
- Product lines? (Laguna or Vel Satis by Renault)
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4 types of brand relationship
1. Branded house (umbrella branding)
Examples: Virgin, Yamaha, Platinum
= Firms choose to use a single name (corporate or master brand name) across all brands, even
in different business sectors
Advantages
 Benefit from existing awareness and
image
 Minimize communication and support
costs
Risks
 Brand dilution
 Does not allow different identities when
targeting different segments
 Risk of endangering the whole portfolio
2. Endorsed brand
Examples: Lycra only by DuPont, Nesquik by Nestlé, Novotel Accor hotels, KitKat by Nestlé,
Hello by LU, Polo Ralph Laurens, Fjord by Danone…
= Brands are still independent but they are endorsed by another brand (usually a corporate
brand = an umbrella brand)
Advantages
 Create credibility
 Benefits from the awareness and image
of the mother brand
 Endorsed brand keeps its identity
Risks
 Might dilute the mother brand in case of
problem
 Might dilute the identity of each separate
brand
3. Sub-brands
Examples: Microsoft Office, Gillette Fusion, Gillette Mach3
= Brands connected to a master brand or parent brand that augment or modify the associations
of that master brand
The link between the sub-brand and the master brand is stronger than for the endorsed brand
Advantages
 Use of awareness
 Use of the existing image
 Less costly
Risks
 Can affect the associations of the master
brand
 Less freedom to create distinct brand
image
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4. House of brands
Examples: Volkswagen Group: VW, Bentley, Audi, Skoda, Seat, Bugatti, and Lamborghini.
P&G, Unilever…
= A group of brands that have no link one with each other. They are all independent from the
corporate brand
Advantages
Risks
 Each brand can maximize its impact on
 More costly to support
the market
 No synergies between markets
 Selection of the ideal brand name
 Selection of the ideal positioning for
each brand
 Ability to cover different segments
 No channel conflict
 Signal of real breakthrough innovation
Brand relationship analysis
Branded house
Does the master brand provides:
 Associations enhancing the value
proposition
 Credibility with organizational
associations
 Communication efficiencies
House of brand
Is there a need for a separate brands:




Will the master brand be strengthened?
Will the business support a new brand?
Create and own an association
Represent a new different offering
Avoid an association
Avoid channel conflict
Selection of branding strategy
Companies have usually mixed strategies
o L’Oreal: brand for lipstick and umbrella for Studio, Elsève or Plénitude.
The selection depends on:
- The corporate strategy
- The business model of the firm
- The culture of the firm
- The
pace
of
innovation
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VI.
Managing brand portfolio
Brand portfolio: (Kumar 2003)
 Complex portfolio
 Hidden costs
 No systematic brand deletion process
 Solution?
Disadvantage of having many brands in a portfolio in a same market: very expensive, need to
have different brand managers, need to have financial resources, need to have engineers…
Multi-brand portfolio is expensive in several levels.
Why they do that (having many brands)? Idea: link the portfolio to the segmentation of the
market despite it’s expensive.
Very often they had a lot of brand and when you have many brand you have to develop them.
The difficulty is to see which brand to keep or which brand actually to eliminate.
 Need to conduct brand audit
 Conduct a portfolio or segmentation approach
o Portfolio: identify parameters of selection
 Need of a brand portfolio management approach
More brands seem more costs.
Brand portfolio management:
 Today, the priority is to reduce the portfolio of brands but which brand to keep?
Which role?
Why the company takes the risk to reduce the number of brands?
 Pressure by financial analysts to reduce the number of brands for reduce the costs
 Reduce the number of brands to have big international brands
 Distribution retailers take many places so it’s also a pressure to reduce the number of
brands to have more big brands to compete with distributor’s brands.
Reasons of brand portfolio reduction





High costs to support brands
Concentration of the distribution
High possible economies of scale in production
Internationalization of brands
Power of consumers
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Role of brands in a portfolio
 A financial role: financing of other brand
 A defensive role: defend the leader (risk: lower margin on lead brands if this brand is
to good)
 A role of group banner brand
Example: Mars brand portfolio
Wiskas: strategic brand
Kitekat: good value
Sheba: niche brand, premium
Ron-ron label: tactical brand against private
 Each brand has a role. If a brand has not clear role, we can forget it.
Brand portfolio management:
 Classical tools for product portfolio: use of matrices (BCG, McKinsey) to evaluate
profitability, competitive situation and growth
 Divide brands in groups according to attractiveness and roles
o We can identify Global brand (more profitable)
o Growing local or regional brands
o Local brands (fortress)
o Local brands (cash cow)






Financial contribution of the brand is very important
Need to check if they’re target a specific segment
Growth of the market
Awareness of brand
Market share, performance
Problems/opportunities of the market
 Get info of the brand; understand the market for ALL brands.
Step for brand portfolio auditing





Identify the number of brands in the portfolio (brand inventory)
Calculate the financial contribution of the brand
Evaluate the brand performance (current and expected)
Evaluate problems and opportunities
Develop a new portfolio
More brands should mean more value for the clients rather than costs for the company
 Link portfolio to segmentation to better meet demand of segmented markets
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Linking the portfolio to segmentation
The organization of the brand portfolio reflects the type of market segmentation chose by the
firm.
1. Socio-demographic segmentation
 Kinder have develop his portfolio based on the age of consumers (kinder eggs
to snack for teenagers)
2. Benefit segmentation
 Evian, Volvic, Taillefine, Tallans, source water…
3. Channel segmentation

Selective premium distribution
 Lancôme, Biotherm, Kiel’s

Mass channels
 L’Oréal, Garnier, Maybelline

Pharmacies
 La Roche-Posay, Vichy

Professional brands
 L’Oréal professionnel, Redken, Matrix, Kerastase
L’Oréal is doing a double segmentation:
 By channels
 By prices: different price segment within the channel segmentation
Why? To get more people, target more segments despite that is more expensive.
4. Price segmentation
 Group Volkswagen: VW, Bentley, Audi, Bugatti, Skoda, Seat, Lamborghini
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International portfolio management
Key question: how many brands should be kept in each country?
 Analysis of the brand’s function in its respective market
 Need to know the strategic rule of each brand
Identification of
 Global brands
 Local or regional brands (having potential to become global brands)
 Local or regional brands that are fortress (historic market leader)
 Local or regional brand that have low growth but good profitability
Examples:
1. Nestlé :
 6 strategic worldwide “corporate” brands (Neslté, Maagi, Nestcafé,
Buitoni…) You can see them everywhere
 70 strategic international brands (Kitkat, Vittel…)
 83 strategic regional brands
 More than 8000 local brands
2. Unilever
 International brands: same positioning and advertising campaign
 Regional brands: same positioning but different name (Becel and Flora)
 Local jewels: unique positioning
3. Inbev
 Global brands (more premium)
 Local brands (Jupiler, on average)
 Important for them to have strong global brands
4. Michelin
 From mono to multi-brand strategy
 Kleber in Europe and Uniroyal in Us: good price quality ratio
 Goodrich for 4*4: flashy wires (same price as Michelin)
Multi-brand portfolio: key rules
1. Need of coordination (brand coordinator or brand committee)
2. Allocate innovations according to each brand positioning
3. It is a reflection of a global strategy of market domination (specific sole allocation for
each brand)
Benefit of multiple entries: market growth via multiple brands, best market coverage, tactical
flexibility, defense against new competitor, protection of the main brand image.
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VII.
Handling name changes and brand transfers
It’s not easy to name change. Risk changing the name? When you change the name what do
you have to do?
 Check the attachment of the consumer to the name, make sure that the associations
that you have move with the new name.
 Quite risky
 Sometimes, we will change the name and we won’t to move the associations, why?
When there is a problem, a scandal (ex: BP).
 It’s cost a lot of money to change the name. Be pretty sure that’s necessary. Need to
create the awareness, the brand image.
Names changes and brans transfers
 More than a name change
 One of the most risky strategy
 Risk depends on the nature of the name (umbrella brand, product band etc.)
Reasons of brand name transfers






Many brands in M&A (elimination of local brands)
Necessity to build big international brands
Stop of activities
Merger
Bad names
Lost court case
Ex: Yves Saint Laurent wanted to launch a perfume named "Champagne". But it was forced
to change name because the naming "champagne" is controlled and protected. He thus named
perfume "ivresse".
Advantage of brand transfers




More modern image when old-fashioned
More international
Less linked to a certain activity
Eliminate mistakes
We change the name also when there is a negative connotation.
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Difficulties of brand transfers
 Name used in very language
 Not protected
o Easier to take a name of the group
 Enormous costs
o Creation
o Legal protection
o Awareness creation
How to transfer brand name?
o Paradisio (too commercial) => Pairi Daiza (More poetic). Brand association is not the
same?
o La poste => bePost (old fashion to more modern)
o Bio => Activia (control of bio name)
o Mars abandoned Treets and Bonitos to merger to M&M’s
o UK post => Consignia in 2001. Many negatives reactions. Royal mail has used today.
o Danone eliminated the local Optavia
o P&G moved in 2001 German Fairy under the new international brand Dawn. Share are
reduced => loss of money
o In 1991, change in Europe from Raider to Twix:
 Objectives of the name change: increase the market share, established a global
brand, economies of scale
 Raider was very strong in Europe (n°2)
 Plan was: On the pack, one year before: “Globally known as Twix”. Six month
after: “The new name of Raider”.
 Key of success: Quick change, Key event out of this, Strong promotional
advertising. All the company has concentrated his effort to make the change a
success.
 Keys learning of this success: No other marketing mix changes, Rapidity, focus
on sales forces, Focus on media. The total company has behind. Inform the
consumers.
Mistakes of brand transfers




No market research
Lack of originality
Traditions
Complexity
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Key success factors of name changes








Motivations of all departments of the company
Seen an opportunity, not a constraint
Prepared well in advance
All consumers should be informed
Have the financial means
Make it easy for the distribution
Necessity to be rapid
Inform clearly the consumers
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VIII.
Brand turnaround and rejuvenation
Revitalization of brands
1. Factors of brands decline







Internal disinterest
Missing of new trends
Mono-product
Poor clients follow up
Neglect the quality of the product
Decline of the distribution network
Excess of daughter brands
2. Way to revitalize





Redefining brand essence
New situations
Distribution changes
Contact with opinion leaders
Changing the business model
Even if a brand is eliminated in the market, many years after, the consumers think that brand
is still in the market. The brand is an asset even if it’s eliminated. You can re-launch brand
many years after and have a great success.
Ex: Le coq sportif
3. Strategies of revitalization






Innovation
New business model
Change of target
Change of distribution network
Focus on new opinion leaders
New communication
Brands remain in the mind of consumers. The challenge is to identify them and to re-launch
them. There is certain nostalgia among consumers.
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IX.
Managing global brands
(Covered in international marketing course)
Type of brands:
 Local brands
 International and global brands
o Different options:
 Brand name
 Positioning
 Product
Different levels of brand globalization
1
2
3
Yes
Yes
Yes
Name
No
Yes
Positioning Yes
Yes
Yes
No
Product
Coke
Mars
Nescafé
Channel
Garnier
Sony
Can be globalized or not
4
Yes
No
No
Persil
5
No
Yes
Yes
Unilver
ice
cream
6
No
No
Yes
Tide
and
Ariel
7
No
Yes
No
Unilever
margarine
8
No
No
No
Ricoré
Yes: Global - No: Local
Examples of global brands: Marlboro, Sony, McDonald, Swatch, Benetton, Mercedes,
Nokia, Ikea
You can’t have a pure global brand that all is globalizing all over the world.
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X.
Managing luxury brands
Two different approaches to build brands:
1. Brands with an “history”
 Stronger focus on the product
2. Brands with a story
 Stronger focus on atmosphere and image
See Burberry case.
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XI.
Evaluating brand value
Be able to evaluate the brand if you want to sell the brand or have some licensees.
How could you evaluate the financial value of a brand?
o Market survey to see brand preference
o Higher price you accept
o Customers base
o Global brand or not?
o Brand awareness
Financial value of brands
 Brand value is not included in balance sheets
 Ni inclusion of these intangible assets
 The value of brands is different depending on the objectives to achieve
o Value of liquidity in case of a forced sale
o Book value for company account
o Value in case of licenses etc.
Interband’s method for valuing the best global brands
Criteria for consideration:





Substantial publicly available financial data
At least 1/3 of revenues outside of its country-of-origin
Market facing brand
Positive economic value added (EVA)
No purely B2B single audience with no wider public profile and awareness
a. First step: Financial analysis
Evaluation of current and future revenue specifically attributable to the branded products
Branded operating profit = revenue- operating costs
Economic earnings = branded operating profit – charge for capital employed
b. Second step: Role of brand analysis
A measure of how the brand influences customer demand at the point of purchase
Industry benchmark analysis derived from Interbrand’s database
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c. Thirst step: Brand strength
A benchmark of the brand’s ability to secure ongoing customer demand (loyalty, repurchase,
retention)
Comparison between the brand and common factors of brand strength: market position,
customer franchise, image and support
Brand valuation methods
 Valuation by historical costs
 All the costs needed to build the brands (development, marketing, advertising, …)
 Valuation by replacement costs
 How much does it cost now to recreate the brand
 Valuation by market price
 Value of similar brands in the market
 Valuation by royalties
 Annual royalties to be received if the brand was to be licensed
 Valuation by future earnings
 Measured by expected profit
 Value by present earnings
 Comparison of the cash and multiple method
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