strategic brand management - keller- chapter 1.pdf
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Strategic Brand Management - KellerTRANSCRIPT
1.1
CHAPTER 1:
BRANDS & BRAND MANAGEMENT
Kevin Lane Keller
Tuck School of Business
Dartmouth College
Brand History
The word “brand” is
derived from the old
norse word “brandr”
which means: “to burn”
as brand were and still
are the means by which
owner of livestock mark
their animals to
identifyy them
1.2
Source:
http://www.texaslonghorn.net/longhorn_info/management_tips/I
mages/Branding-CU-1009-033.jpg
Brand – an Introduction
1.3
1.4
What is a brand?
For the American Marketing Association (AMA), a brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.”
These different components of a brand that identify and differentiate it are brand elements.
brand with a small ‘b’
1.5
What is a brand?
“Brand” with a capital “B”:
Many practicing managers refer to a brand as more than that— as something that has actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace.
We can make a distinction between the AMA definition of a “brand” with a small b and the industry’s concept of a “Brand” with a capital b.
1.6
Brands vs. Products
A product is anything we can offer to a market for attention, acquisition, use, or consumption that might satisfy a need or want.
A product may be a physical good, a service, a retail outlet, a person, an organization, a place, or even an idea.
http://t3.gstatic.com/images?q=tbn:ANd9GcTFXLwHBmhehZDojyOlXfoCYQt026ssb2QaQvevhqmOlIiD_7fgubpsnOeshg
1.7
Five Levels of Meaning for a Product
(e.g. Air Conditioner) The core benefit level is the fundamental need or want that
consumers satisfy by consuming the product or service. (Cooling and comfort)
The generic product level is a basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features. This is basically a stripped-down, no-frills version of the product that adequately performs the product function. (sufficient cooling capacity/BTU/hr)
The expected product level is a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. (based on consumer report: having 2 cooling speed, power cord 60 inches, R-22 HCFC refrigerant etc)
The augmented product level includes additional product attributes, benefits, or related services that distinguish the product from competitors. (additional feature e.g. Electric touch-pad, temperature display, etc)
The potential product level includes all the augmentations and transformations that a product might ultimately undergo in the future. (extended “infinite life” batteries, mosquito repealant, auto on of – heat detector etc)
1.8
A brand is therefore more than a product, as it
can have dimensions that differentiate it in some
way from other products designed to satisfy the
same need.
Source: Personal Documentation
1.9
Some brands create competitive advantages with
product performance; other brands create competitive
advantages through non-product-related means.
http://mlb.mlb.com/mlb/images/sweepstakes/y2008/gillette/gillette_ad.jpg
http://t2.gstatic.com/images?q=tbn:ANd9GcSF1q6TqD9uZA-
M81R9Cw7NoUHNauKMmNuKeLSWnbAhyzNXEqhjFw3_xzRR4Q
Performance
non
product
related
1.10
Why do brands matter?
What functions do brands perform that make
them so valuable to marketers?
The Famous Pepsi blind test:
“New Coke” Disaster .........
Source: http://www.brandchannel.com/home/image.axd?picture=2012%2F5%2Fpepsicoke.jpg
Pepsi ad 1
1.11 Video courtessy of Youtube
Pepsi ad 2
1.12 Video courtessy of Youtube
New coke Campaign
1.13 Video courtessy of Youtube
Pepsi Reply
1.14 Video courtessy of Youtube
1.15
Importance of Brands to Consumers (Individual/Business)
Identification of the source of the product/maker
Assignment of responsibility to product maker
Risk reducer
Search cost reducer (due to their past experiences, the simplification for their
product decision)
Promise, bond, or pact with product maker (trust and loyal to the brand as long
as they are satisfied/able to fulfil their functional utility)
Symbolic device(allowing customer to project their self image)
Given to the difficulty of assesing and intepreting product attributes and benefits
of experience and credence product, Brand become important as a signal of
quality :
Search goods (e.g. groceries: consumer able to evaluate the product attributes such as
sturdiness, size, color etc. by visual inspection)
Experience goods (e.g. automobil tires: should experience it first/actual product trial to
judge durability etc)
Credence goods (e.g. Insurance coverage: consumer might rarely learn product attributes)
1.16
Reducing the Risks in Product Decisions
for customers
Consumers may perceive many different types of risks in buying and consuming a product:
Functional risk—The product does not perform up to expectations.
Physical risk—The product poses a threat to the physical well-being or health of the user or others.
Financial risk—The product is not worth the price paid.
Social risk—The product results in embarrassment from others.
Psychological risk—The product affects the mental well-being of the user.
Time risk—The failure of the product results in an opportunity cost of finding another satisfactory product.
Picture source: http://t3.gstatic.com/images?q=tbn:ANd9GcTdVzogoarhQdxjy4b-os9V5VjgVC3SZAWBvSwafZ5v0nZ9hx-B
1.17
Importance of Brands to Firms
Identification to simplify handling or tracing, and operationally help to
organize inventory and accounting records
Legally protecting unique features to ensure that the firm can safely
invest in the brand and reap the benefits of a valuable asset (can be
protected through registered trademark, manufacturing through patent,
packaging through copyright and design: Apple vs. Samsung) Signal of
quality level
Endowing products with unique associations
capable of influencing consumer behavior,
Source of competitive advantage
Source of financial returns by providing the security of sustained future
revenues (a belief that strong brands result in better earnings and
profit performance that in turn will create greater value for
shareholders)
1.18
Can everything be branded?
Ultimately a brand is something that resides in the minds of consumers.
The key to branding is that consumers perceive differences among brands in a product category.
Even commodities can be branded:
Coffee (Maxwell House), bath soap (Ivory), flour (Gold Medal), beer (Budweiser), salt (Morton), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), chickens (Perdue), pineapples (Dole), and even water (Perrier)
1.19
An Example of Branding a Commodity
De Beers Group added the phrase “A Diamond
Is Forever”
Source:
http://www.gemnation.com/images/debeers/3_stone
_ring_she_already_kn.jpg
Source:
http://youthvoices.net/discussion/diamo
nd-engagement-rings
1.20
What is branded?
Physical goods
(Coca Cola, Mercedes benz, ribena, etc)
Services
(McD, Hilton, TM, AisAsia, etc)
Retailers and distributors
(Carrefour, Giant, 7 Eleven, Lotte, etc)
Online products and services
(Amazon.com, Google, etc)
People and/ organizations
(Nonprofit Organization, Donald Trump, etc)
Sports, arts, and entertainment
(Harry Potter, Broadway, MU, etc)
Geographic locations
(Las vegas, Genting, Bali, etc)
Ideas and causes
(Save Orangutan,, AIDS ribbon, etc)
Source: various resources fom Google Images
1.21
Source of Brands Strength
“The real causes of enduring market leadership
are vision and will. Enduring market leaders have a
revolutionary and inspiring vision of the mass
market, and they exhibit an indomitable will to
realize that vision. They persist under adversity,
innovate relentlessly, commit financial resources,
and leverage assets to realize their vision.” Gerald J. Tellis and Peter N. Golder, “First to Market, First to
Fail? Real Causes of Enduring Market Leadership,” MIT Sloan
Management Review, 1 January 1996
1.22
Importance of Brand Management
The bottom line is
that any brand - no
matter how strong
at one point in
time - is
vulnerable, and
susceptible to poor
brand
management. Source: http://celebritynewsandstyle.com/wp-content/uploads/2012/07/kristen-rupert.jpg
What are the strongest brands?
1.24
Top Ten Global Brands
Brand 2006 ($Billion) 2005 ($ Billion)
1. Coca-Cola
2. Microsoft
3. IBM
4. GE
5. Intel
6. Nokia
7. Toyota
8. Disney
9. McDonald’s
10. Mercedes-Benz
67.00
56.93
56.20
48.91
32.32
30.13
27.94
27.85
27.50
21.80
67.53
59.94
53.38
47.00
35.59
26.45
24.84
26.44
26.01
20.00
1.25 Source: http://socialcommercetoday.com/wp-content/uploads/2011/10/BGB2011-Poster-Interbrand-1.png
1.26
Branding Challenges and Opportunities
Savvy customers (well informed, social media, info/opinion web
etc. - e.g. Traveladvisor, FB, twitter, blogs etc)
Brand proliferation (the rise of brand and line extension, getting
crowded hard to decide)
Media fragmentation (more and more specific media)
Increased competition (Globalization, low-priced competitor,
brand extension, deregulation)
Increased costs (higher cost of developing a product or
supporting the existing one)
Greater accountability (short term profit target/benefit but long
term cost/consequences e.g. Cutting advertisining cost)
1.27
The Brand Equity Concept
No common viewpoint on how it should be conceptualized and measured
It stresses the importance of brand role in marketing strategies.
Brand equity is defined in terms of the marketing effects uniquely attributable to the brand.
Brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name.
Fundamentally, branding is all about endowing products and services with the power of Brand Equity
1.28
Strategic Brand Management
It involves the design and implementation of
marketing programs and activities to build,
measure, and manage brand equity.
The Strategic Brand Management Process is defined as
involving four main steps:
1. Identifying and establishing brand positioning and values
2. Planning and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity
1.29
Strategic Brand Management Process (to pull all various concept together)
Mental maps
Competitive frame of reference
Points-of-parity and points-of-difference
Core brand values
Brand mantra (core brand promise)
Mixing and matching of brand elements
Integrating brand marketing activities
Leveraging of secondary associations
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
Key Concepts Steps
Grow and sustain
brand equity
Identify and establish
brand positioning and values
Plan and implement
brand marketing programs
Measure and interpret
brand performance
1.30
http://thisisnotawebblog.files.wordpress.com/2011/11/werkgroep-01-mindmap2.png
Example: association tree/ mental map
Li Ning Company Limited is one of the leading sports brand companies in China, mainly providing sporting goods
including footwear, apparel, equipment and accessories for professional and leisure purposes primarily under the LI-
NING brand. Headquartered in Beijing, the Group has brand marketing, research and development, design,
manufacturing, distribution and retail capabilities. It has established an extensive supply chain management system
and a retail distribution network in China, predominantly through outsourced manufacturing operations and
franchised distribution (www.lining.com)