Module IV: Nurturing Brand to
Grow:
• Understanding & Developing Brand
Architecture
• Managing Strategic Branding Issues:
– Brand Extension & Brand Revitalization
– Corporate & Internal Branding
– Managing Global Brand
Module IV: Nurturing Brand to Grow
Branding Strategy or Brand Architecture:
“The number and nature of
common and distinctive brand elements
applied to the different products sold by the firm”
Brand-Product matrix
Products
Soap
Talcum
Deo
Cold cream
Brands
Lux
Liril
Ponds
Palmolive
Columns (Product Line)
Rows (Brand Line)
 Brand extension strategy
 Brand portfolio strategy
Breadth of a Branding Strategy
The number and nature of different products linked to the brands sold by a
firm
Breadth of Product Mix:
How many product lines a company
should carry ?
Environmental
factors
 Technological
 Economic
 Political
 Regulatory
 Social
Factors effecting
Product category
attractiveness
Aggregate of
market factors
 Mkt size
 Mkt growth
 Stage of PLC
 Seasonality
 Profits
Category factors
 Porter’s five
forces
 Category
capacity
Breadth of a Branding Strategy (Contd.)
Depth of Product Mix:
How many variants should be offered in
each product line ?
Length of the
product line
 Understanding of
the market
 Cost
interdependence
between products
Issues in
deciding no. of
Product lines
The ability of each item
in the product line to
 Withstand
competition
 Address consumer
needs
 % of sales and
profits contributed by
each item or member
of the product line
Depth of a Branding Strategy
Number and nature of different brands marketed in the product class sold
by a firm
Why multiple brands?
 To pursue multiple market segments & larger mkt. coverage
 To increase shelf presence and retailer dependence in the store
 To attract customers seeking variety
 To increase internal competition within the firm
 To yield economies of scale in adv., sales and distribution
Maximise market coverage, minimise brand overlap
and optimize the product portfolio
Brand hierarchy
Means of summarising the branding strategy by displaying the number
and nature of common and distinctive brand elements across the firm’s
products revealing the explicit ordering of brand elements.
The simplest representation of a Brand Hierarchy from top to bottom is
as follows:
 Corporate ( or company ) brand.
Family Brand eg: Colgate
 Individual Brand eg:Lux
 Modifier( designating item or model) eg. Pentium PI, PII, PIII…
Special role of brand in brand portfolio
Serve as a high end
prestige product
Mercedes
Toyota
Serve as a lower end
entry level product
to attract a new customer
to the brand franchisee
Serve as a flanker
and
protect flagship brands
Special role
of brands in
a brand
portfolio
Phillip Morris
Gillette
Serve as a cash cow
and
Milk for profits
Guidelines for brand hierarchy Decisions
Designing a Branding Strategy
The no. of levels of the hierarchy to use in general
 Principle of simplicity: As few levels as poss.
Desired awareness and associations at each level
 Principle of relevance: Create abstract associations that
are relevant across as many individual items as possible
 Principle of differentiation: Differentiate individual items and brands
How to link brands from different levels for a product?
 Principle of prominence: The relative prominence of brand
elements affects perceptions of product distance and the type
of image created for new products
How to link a brand across products?
 Principle of commonality: The more common elements shared
by products, the stronger the linkages
New Products & Brand extensions
Strategies for Growth
Explore New Markets
Introduce New Products
New Brand
Existing Brand
Line Extension
Category Extension
Brand Strategies
Product Category
New
Line Extension
Brand Extension
Multibrands
New Brands
Brand Name
Existing
Existing
New
Reinforcing brands…
• Brand equity is reinforced by marketing actions that consistently
convey the MEANING of the brand to consumers in terms of
BRAND AWARENESS and BRAND IMAGE.
• Reinforced marketing actions, along with product development,
branding strategies etc. also help in keeping the brand meaning in
terms of products, benefits and needs as well as in terms of
product differentiation intact.
Reinforcing depends on nature of the
brand associations
• Product related performance associations
Product innovations are critical.
Change in product may not be drastic, as brand meaning may be
associated with the product characteristics.
• Non-product related imagery associations
Relevance in user and usage imagery is critical.
Potentially easier to change through major advertising campaigns
(no product innovation may be involved).
Too frequent repositioning can blur the image of the brand and
confuse or even alienate the consumers.
Reverse Fortunes of Brands
Recapture lost sources of
Equity
Identify and establish new
sources of Brand Equity
Approaches to Re-vitalization
1. Expanding Brand Awareness
2. Improving Brand Image
3. Entering New Markets
Approaches adjustment to brand
portfolio
1. Migration Strategy
2. Acquiring new customers
3. Retiring Brands
Quick Revisit
What is a brand?
A brand is a name, term, sign, symbol, or design,
or a combination of them,
intended to identity the goods or services
of one seller or group of sellers
and to differentiate them from those of competitors
- American Marketing Association
A sum of parts
Functional Product
Attributes
+
Rational (Head)
Symbolic Values
& Associations
Emotional (Heart)
The Brand
Four characteristics
Difference
Clarity
Consistency
Leadership
Brand Identity (Kapferer’s Prism)
BRAND IMAGE: the way of thinking by a
consumer about the brand and the feelings the
brand arouses when the consumer thinks about it
•
•
•
•
•
Life style
Expectation
Experience
Disposition
Differentiation
Brand Positioning
• Define competitive frame of reference
– Target market
– Nature of competition
• Define desired brand knowledge
structures
– Points-of-parity
• necessary
• competitive
– Points-of-difference
• strong, favorable, and unique brand associations
Your Brand’s Genetic Code: BRAND DNA
•Every great brand has substance. a brand’s
DNA is timeless. a brand’s blue print is a
unique set of values that originally
defined them. Great brands can
remain relevant through creativity.
•A brand’s DNA is not strictly about the
product, service, the past or even about
research -- its about tapping in to an
essence or story that defines who you are
to the people that matter most, your core
customers.
•What Do You Stand For?
- Brand Names
Logos and Symbols
- Characters:
- Benefits
- Cautions
- Slogans
- Benefits
- Designing Slogans
- Updating Slogans
- Jingles
- Packaging
BRAND_VIDEO CLIPS\Hutch song.mp3
- Benefits
- Package design
- Packaging changes
Criteria
1.
Memorabiltiy
•
•
2.
Easily recognized
Easily recalled
Meaningfulness
•
•
3.
Descriptive
Persuasive
Likability
•
•
•
4.
Fun and interesting
Rich visual and verbal imagery
Aesthetically pleasing
Transferability
•
•
5.
Within and across product categories
Across geographic boundaries and cultures
Adaptability
•
•
6.
Flexible
Updateable
Protectability
•
•
Legally
Competitively
Leveraging Secondary Brand
Knowledge to Build Brand Equity
•Brands may be linked to other entities that
have their own knowledge structures in
consumer minds
•Means of reinforcing existing associations in
a fresh and different way
•very important aspect if the existing brand
associations is deficient in some way
Customer Based Brand Equity (CBBE): Keller
The Brand Value Chain
Value
Stages
BRAND_VIDE
O
CLIPS\Luftha
nsa Brand
Movie_vcd0.
mpg
Marketing
Program
Investment
Customer
Mindset
•Product
•Communication
•Trade
•Employee
•Other
•Awareness
•Associations
•Attitudes
•Attachment
•Activity
Market
Performance
Shareholder
Value
•Price premium
•Price elasticity
•Market share
•Expansion success
•Cost structure
•Profitability
•Stock prices
•P/E ratio
•Market capitalization
BRAND_VIDEO
CLIPS\Performance
Review IKEA 2009.flv
Multiplier
Program
Quality
•Clarity
•Relevance
•Distinctiveness
•Consistency
Market
place
Conditions
•Competitive reactions
•Channel support
•Customer size and profile
BRAND_VIDEO
CLIPS\Recap Intel's Shareholder
Meeting Bloomberg.flv
Investor
Sentiment
•Market dynamics
•Growth potential
• Risk Profile
•Brand contribution
BRAND_VI
DEO
CLIPS\Glob
al Brands
Lose Value
as Economy
Suffers.flv
Key Metrics: Consumer Based
Brand Persuasion =Ratio of Intention to Purchase Brand/ Spontaneous Brand Recall
Brand Pull =Ratio of Likely Switch-ins to the Brand / Likely Switch-outs from the
Brand
Brand Loyalty = Ratio of Likely to Continue Buying the Brand / Total Current Users
of the Brand
Secondary Brand Share = Total Current Users of the Brand / Total Current Users of
the Category
Primary Brand Share =Preferred Current Users of the Brand / Total Current Users
of the Category
Discounted Cash Flows Method:
Value of Brand =
Where
 ( RB /(1  r )
t
t
 RBn / r
RBt = Anticipated Revenue in year t attributable to the brand
r = Discounting rate or WACC (Weighted average cost of capital)
RBn = Residual Value after n (year)
For Example:
•Brand A had revenues of Rs 600 crores ( 2009).
•The Brand A is expected to grow at around 10% per annum for the next five years.
•The Discounting rate is taken at 12 %.
•The period when the brand is expected to operate status quo is assumed to be the
next five years
The Interbrand method for valuing brands:
A Two Dimensional Framework for
Diagnosing Brands: The Power Grid
BrandAsset® Valuator
Brand Strength
Differentiation
Leading
Relevance
Brand Stature
Esteem
Knowledge
Lagging
Brand-Product matrix
Products
Soap
Talcum
Deo
Cold cream
Brands
Lux
Liril
Ponds
Palmolive
Columns (Product Line)
Rows (Brand Line)
 Brand extension strategy
 Brand portfolio strategy
Brand hierarchy
Means of summarising the branding strategy by displaying the number
and nature of common and distinctive brand elements across the firm’s
products revealing the explicit ordering of brand elements.
The simplest representation of a Brand Hierarchy from top to bottom is
as follows:
 Corporate ( or company ) brand.
Family Brand eg: Colgate
 Individual Brand eg:Lux
 Modifier( designating item or model) eg. Pentium PI, PII, PIII…
New Products & Brand extensions
Strategies for Growth
Explore New Markets
Introduce New Products
New Brand
Existing Brand
Line Extension
Category Extension
Reverse Fortunes of Brands
Recapture lost sources of
Equity
Identify and establish new
sources of Brand Equity
Approaches adjustment to brand
portfolio
1. Migration Strategy
2. Acquiring new customers
3. Retiring Brands