BRAND MANAGEMENT AND
NEW PRODUCT DEVELOPMENT
SECTION 4A
Brand Management and the Firm
The Strategic Brand Management Process
ALAN L. WHITEBREAD
STRATEGIC BRAND MANAGEMENT
1. Identify and establish brand positioning
and brand values.
2. Plan and implement brand marketing
programs.
3. Measure and interpret brand
performance.
4. Sustain and grow brand equity.
BRAND MANAGEMENT SUCCESS
• Capitalize on a few strategic brands
– Driven by benefits for the consumer
– Put all sub-brands under the primary name
– Strong intangible appeal is needed
• Act as a leader – set the rules and/or standards.
• Have a constant flow of innovations
– Strong flow of new product development
– Deliver personalized services [whenever possible]
BRAND MANAGEMENT SUCCESS
• Reward customer repeat purchases to
covert them to active promoters of the
brand.
• Globalize the brand.
– Rapidly
– Use a planned roll-out schedule
THE STRATEGIC BRAND
MANAGEMENT PROCESS
STEPS
KEY CONCEPTS
Identify and Establish
Brand Positioning and Values
[Mental] Mind maps* [causal models]
Competitive frame of reference
Points-of-parity and points-of-difference
Core brand values*
Brand mantra*
Plan and Implement
Brand Marketing Programs
Mixing and matching of brand elements*
Integrating brand marketing activities
Leveraging of secondary associations
Measure and Interpret
Brand Performance
Grow and Sustain
Brand Equity
Brand Value Chain*
Brand audits
Brand tracking
Brand equity management system
Brand-product matrix*
Brand portfolios and hierarchies*
Brand expansion strategies*
Brand reinforcement and revitalization
THE STRATEGIC BRAND
MANAGEMENT PROCESS
• IDENTIFY AND ESTABLISH BRAND
POSITIONING AND VALUES
– How do consumers perceive brands?
•
•
•
•
Involvement [brand association to brand personality]
Reducing perceived risk
Familiar = trusted
Brand A > Brand B [B2C]
– Is this a perception of quality?
– Or is it needs satisfaction?
• Perceived benefits [B2C]
• Actual benefits / Performance testing [B2B]
• Ego / self-actualization
BRANDS
• Individual consumers [B2C] buy images
associated with the products that tie to
expected benefits and real or perceived
meaningful points of difference.
• Business consumers [B2B] buy the firm
behind the products and the products
because of their performance.
THE STRATEGIC BRAND
MANAGEMENT PROCESS
• FUNCTIONS OF A BRAND
– Identify the product [packaging]
• Easily recognized by sight, sound, or other means
– Practical [successful experience]
• Save time with repeat purchases
– A guarantee [warranty; standards compliance]
• Consistency of performance or quality
– Optimization for the consumer [experience,
advertising]
• The best solution for their need – minimal cognitive
dissonance
– Continuity
• Long-term relationship [lifetime value of a customer]
– Hedonistic [advertising, image, recognition]
• Ego satisfaction
THE STRATEGIC BRAND MANAGEMENT
PROCESS [try it on your own]
BRAND FUNCTION
PRODUCT
POWER
[Strong, Medium, Weak]
Recognition signal
Brand X milk
?
Guarantee [quality]
Bic pens
?
Boeing
Caterpillar
Tata
Old brand = ?
?
Optimization [best for
need]
Continuity /
Permanence
?
Advertising research has shown that brand familiarity and brand uniqueness are
very important to consumers [B2C]. It has also shown some relationship between
brand advertising and sales volume.
THE STRATEGIC BRAND
MANAGEMENT PROCESS
• Brand reputation – what is important?
– Brand advertising [creative, meaningful, and
beneficial]
– Brand familiarity [recognition via repetition]
– Brand uniqueness [perception / performance]
– Brand sales [increasing faster than the market]
– Market share [top 2 – 3 at worst]
– Number & strength of competitors [positioning]
– Relative price [value]
IDENTIFY AND ESTABLISH BRAND
POSITIONING AND VALUES [TOOLS]
• MIND MAP [How do we associate thoughts?]
• POINTS OF PARITY [POP]
– Items you point out as being the same as your
competitor. Usually used to improve your
image.
– Sales people use these to offset a claim by a
rival salesperson.
IDENTIFY AND ESTABLISH BRAND
POSITIONING AND VALUES [TOOLS]
• POINTS OF DIFFERENCE [POD]
– The one, two or three key meaningful differences that
would cause the prospect to buy from yours not from your
competitors.
– They must have these key characteristics.
• RELEVANCE
– It must be relevant and important.
• DISTINCTIVENESS
– It must be distinctive and present superior solution for their situation.
• BELIEVABILITY
– It must be believable and credible.
• COMMUNICABLE
– It must be simply communicated so there are obvious consumer
benefits.
– Competitors should not be able to easily use as a point of parity.
STARBUCKS POP AND POD
[try it on your own]
COMPETITOR
POP
POD
Fast food chains /
convenience stores
Convenience
Value
Quality
Image
Experience
Variety
Supermarket brands for
home
Convenience
Value
Quality
Image
Experience
Variety
Freshness
Local café
Quality
Experience
Price
Community
Convenience
YOUR PROJECT
?
?
IDENTIFY AND ESTABLISH BRAND
POSITIONING AND VALUES
• POINTS OF CONTENTION [POC]
– Are elements where there is
disagreement as to how its
performance or functionality compares
to the next best alternative.
– Seen in comparison or negative
advertising
• Always remember your competitive
positioning and frame of reference.
B2C and B2B POINTS
POINTS OF
B2C
B2B
…Parity
May be used to show
at least equal to …
Virtually meaningless
…Difference
To sell your item
Proof
Subjective or
emotional are best
Must provide a
specific important
advantage to be of
benefit
Consumer may
evaluate [unscientific]
Performance testing
during the supplier
qualification stage will
answer this.
Must be relevant and
distinctive and
believable
…Contention
POINTS, NEEDS, AND OFFERINGS
Joel E. Urbany and James H. Davis [Notre Dame], HBR Nov., 2007 pp. 29-30
Our
PODs
Our
unique
PODs
Unneeded
Customers’ needs
Growth
Points
of parity
Their
PODs
Unneeded
Every POD must
translate to
meaningful
benefits!
COCA-COLA COMPETITIVE FRAME
OF REFERENCE
Videos
COMPETITION
• Most direct
Beer
Ice cream
only diet colas
Flavored
Colas
Colas
• Indirect
Juices
Wines
other soft drinks
Diet
Lemon
Limes
Fast food
Water
Colas
Diet
Coffee, tea
Versions
Dairy
Hobbies
???
• Most indirect
any other type of beverage
• Fringe
any other expenditure
BRAND VISION AND PURPOSE
• BRAND VISION – It’s reason for being
– The heart and soul of the product
– Guy Kawaski [Apple Mac, VC] video
• BRAND PURPOSE – It’s raison d’être [its absolute
purpose] – A guide for its life cycle
– How would the market be different if GM did not exist?
– How is Fiat changing the American car and truck markets?
• A powerful influence on a market [segment]
–
–
–
–
What does Cadillac mean?
What does Escalade mean?
What does Proctor and Gamble mean?
What does Pampers mean?
PRODUCT-BRAND RELATIONSHIP
• Every brand needs a flagship product
[family, line].
• Expectations must always be exceeded by
– actual and /or perceived benefits, AND
– actual performance!
IDENTIFY AND ESTABLISH BRAND
POSITIONING AND VALUES
• CORE BRAND VALUES*
– The 5 to 10 most important attribute and benefit associations that
characterize a brand.
– B2C: Lufthansa brand video
– B2B: SYNGENTA brand video
• BRAND MANTRA*
– Emotional modifier
• How does the brand deliver benefits?
– Descriptive modifier
• How do you describe the business?
– Brand functions
• How do you describe the product?
CORE BRAND VALUES EXAMPLE
• Texas Tech University Basketball
– Incomparable basketball within a large
geographic area
– Unique environment and experience
– Always competitive
– Fast, controlled, tough mentality
– Unlimited possibilities [championships]
– A vital part of the university, city, and area
BRAND MANTRA EXAMPLE
“A passionate, competitive, west Texas experience.”
Arena external
ease of access
Arena and area
security
Game as a
social function
Arena seat
location
Arena
comfortability
Game
entertainment
Arena parking
options
Game sense of
electricity
Texas Tech
Basketball
Game : Big 12
Conference
Game fills a
passion
Arena internal
ease of access
Team quality
and spirit
Team
competition
Game of high
quality
Meet other TTU
team stars
Team
excitement
Team current
stars
Team coaching
staff
BRAND ELEMENTS
• The IP items that serve to identify and
differentiate the brand from its competitors.
– Name, logo, symbol, characters, colors,
endorsing characteristics, jingles, packaging,
signage, slogans, and URLs.
• Criteria for selecting brand elements include
–
–
–
–
–
–
–
Memorable
Meaningful
Likeable
Transferable [add to brand equity]
Adaptable [change over time]
Protectable
International considerations
PLAN AND IMPLEMENT BRAND
MARKETING PROGRAMS
• MIX AND MATCH BRAND ELEMENTS TO
MAXIMIZE BRAND EQUITY.
– Visual or verbal information that identifies and meaningfully
differentiates a product [brand name, logo, symbol, character,
package, or slogan, etc.]
• INTEGRATE BRAND MARKETING ACTIVITIES
– 4P’s
• LEVERAGE SECONDARY ASSETS
– Company, geography, channel, ingredients, characters,
spokespeople, events, …
– Maximize synergies
MEASURE AND INTEPRET BRAND
PERFORMANCE
•
BRAND VALUE CHAIN [value creation]
1.
2.
3.
4.
Define brand hierarchy
Define brand-product mix
Enhance brand equity over time
Establish brand equity over multiple market
segments
1. DEFINE BRAND HIERARCHY
• Principle of Simplicity
– Few brand levels
• Principle of Relevance
– Create abstract associations to many products
• Principle of Differentiation*
– Differentiate individual items and brands
• Principle of Prominence*
– Maximize product distance to competitive products
[perceptual map]
• Principle of Commonality
– Link to other branded products through shared
brand elements
• HP Printer family
2. DEFINE BRAND-PRODUCT
MATRIX
• Brand extensions*
– Establish new equity
– Enhance existing equity
• Brand portfolio*
– Maximize coverage with minimum overlap
[minimize cannibalization]
3. ENHANCE BRAND EQUITY OVER
TIME
• Brand reinforcement
– Innovate for position
– Use relevant imagery
• Brand revitalization
– Do the basics well
– Continually refresh / reinvent the brand
• RC Cola and Coca-Cola
1944
1951
1955
1962
1965
2004
1940
1947
1958
1960’s
1971 – Hilltop - “I’d like to buy the world a Coke.”
http://www2.coca-cola.com/presscenter/av_advertising.html [GLOBAL]
1979 – The first polar bear Coke commercial.
1982
1993-9
•http://www.adeater.com/bin/view.cgi?/usr2/internet/www/adeater/welcome2.html,1,ZurlW/MULTI/html/cine
ma.htmlZ Virgin Cola [France #1] Argentina Chips Ahoy +Coca Cola + Fiat Germany Nescafe #2
Burberrys Rifle Jeans [Italy]
4. ESTABLISH BRAND EQUITY
OVER MARKET SEGMENTS
• Identify differences in behavior
– Identify purchase patterns
– Use patterns
– Knowledge and opinion about different brands
• Adjust branding program
– Choice of brand elements
– Nature of the marketing program
– Leverage associations
Sample question #1
• Which strategic planning tool asks
what are we best at, deeply passionate
about, and drives our economic
engine?
– [A] BCG Business Portfolio Analysis
– [B] Blue Ocean Analysis
– [C] GE Business Planning Matrix
– [D] Hedgehog Analysis
Sample question #2
• Your firm is evaluating the purchase of
a brand from another company. The
most likely key financial number for
estimating the long term value of that
firm and its brands would be
– [A] after-tax income
– [B] EBITDA
– [C] M&A free cash flow
– [D] net sales