Product&Brand Management : Product&Brand Management What is a product? : What is a product? A product is any offering by a company to a market that serves to satisfy customer needs and wants.
It can be an object, service, idea,etc. New Product Development : New Product Development Most new product development is an improvement on existing products
Less than 10% of new products are totally new concepts. Success rate of new products : Success rate of new products The success rate of new products is very low – less than 5%. ‘You have to kiss a lot of frogs to find a prince.”
Product obsolescence is rapid with improvements in technology
Shorter PLCs Product Development Stages : Product Development Stages Idea generation
Concept development and testing
Conjoint analysis – to find out the best valued attributes by consumers Business analysis : Business analysis The most customer appealing offer is not always the most profitable to make
Estimate on costs, sales volumes,pricing and profit levels are made to find out the optimal price – volume mix.
Breakeven and paybacks
Discounted cash flow projections Market testing : Market testing Test markets
What information to gather?
What action to take? Commercialization : Commercialization When? (Timing)
Where? (Which geographical markets)
To whom? (Target markets)
How? (Introductory Marketing strategy) Product Levels : Product Levels Customer value hierarchy
Potential product Customer Delight : Customer Delight When you exceed customer expectations Product Hierarchy : Product Hierarchy Need
Item Product classification : Product classification Durable
Non – durable
Services Consumer goods classification : Consumer goods classification Convenience goods
Unsought goods Industrial goods classification : Industrial goods classification Materials and Parts
- raw materials
- manufactured materials and parts
Supplies and business services Product Mix : Product Mix The assortment of products that a company offers to a market
Width – how many different product lines?
Length – the number of items in the product mix
Depth – The no. of variants offered in a product line
Consistency – how closely the product lines are related in usage Product Line decisions : Product Line decisions Product rationalization
Product line length
too long – when profits increase by dropping a product in the line
too short – when profits increase by adding products to the product line
Line pruning – capacity restrictions to decide Brand : Brand A name becomes a brand when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or service
It is the seller’s promise to deliver the same bundle of benefits/services consistently to buyers Brand Equity : Brand Equity When a commodity becomes a brand, it is said to have equity.
The premium a brand can command in the market
The difference between the perceived value and the intrinsic value Levels of meaning : Levels of meaning Attributes
Users Brand Power : Brand Power Customer will change brands for price reasons
Customer is satisfied. No reason to change.
Customer is satisfied and would take pains to get the brand
Customer values the brand and sees it as a friend
Customer is devoted to the brand Brand Equity – Competitive Advantages : Brand Equity – Competitive Advantages Reduced marketing costs
Can charge a higher price
Can easily launch brand extensions
Can take some price competition Managing Brand Equity : Managing Brand Equity Brand Equity needs to be nourished and replenished. We must not flog the brand for equity to be diluted or dissipated
Store brands Advantages of branding : Advantages of branding Easy for the seller to track down problems and process orders
Provide legal protection of unique product features
Branding gives an opportunity to attract loyal and profitable set of customers
It helps to give a product category at different segments, having separate bundle of benefits
It helps build corporate image
It minimises harm to company reputation if the brand fails Brand parity : Brand parity Consumers buy from a set of acceptable/ preferred brands Umbrella Brand : Umbrella Brand Products from different categories under one brand
Dangerous to the brand if the principal brand fails
Sometimes the company name is prefixed to the brand. In such cases the company name gives it legitimacy. The product name individualises it. Naming the Brand : Naming the Brand Product benefits
Easy to pronounce
Should be distinctive
Should not have poor meanings in other languages and countries Brand strategy : Brand strategy Line extension – existing brand name extended to new sizes in the existing product category
Brand extension – brand name extended to new product categories
Multibrands – new brands in the same product category
New brands – new product in a different product category
Cobrands –brands bearing two or more well known brand names Brand Repositioning : Brand Repositioning This may be required after a few years to face new competition and changing customer preferences Packaging : Packaging Includes the activities of designing and producing the container for a product
Packaging is done at three levels
- shipping Packaging as a marketing tool : Packaging as a marketing tool Self service
Company and brand image
innovation Designing packaging : Designing packaging Packaging concepts
Environmental considerations Labels : Labels Identification
Description of product
Date of mfg., batch no.
Instructions for use
Promotion Labels as a marketing tool : Labels as a marketing tool Labels need to change with time or packaging changes to give it a contemporary and fresh look Product Life Cycle : Product Life Cycle Definition : Definition Product Life Cycle (PLC) deals with the life of a product in the market with respect to business or commercial costs and sales measures Slide 36: Every Product has a limited life
Product sales pass through distinct stages, each posing different challenges, Opportunities, and Problems to the seller
Profits rise and fall at different stages of the Product Life Cycle
Products require different Marketing, Financial, Manufacturing, Purchasing and Human Resource Strategies in each Life Cycle stage. Product Life Cycle Stages : Product Life Cycle Stages Introduction : Introduction a. Costs are high
b. Slow sales volumes to start
c. Little or no competition - competitive manufacturers watch for acceptance/segment growth losses
d. Demand has to be created
e. Customers have to be prompted to try the product
f. Makes no money at this stage
Conti…. Growth : Growth a. Costs reduced due to economies of scale
b. Sales volume increases significantly
c. Profitability begins to rise
d. Public awareness increases
e. Competition begins to increase with a few new players in establishing market
f. Increased competition leads to price decreases
Conti… Maturity : Maturity 3. a. Costs are lowered as a result of production volumes increasing and experience curve effects
b. Sales volume peaks and market saturation is reached
c. Increase in competitors entering the market
d. Prices tend to drop due to the proliferation of competing products
e. Brand differentiation and feature diversification is emphasized to maintain or increase market share
f. Industrial profits go down
Conti…. Saturation and Decline : Saturation and Decline a. Costs become counter-optimal
b. Sales volume decline or stabilize
c. Prices, profitability diminish
d. Profit becomes more a challenge of production/distribution efficiency than increased sales Strategies for the differing stages of the Product Life Cycle. : Strategies for the differing stages of the Product Life Cycle. Introduction.
The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution. Growth : Growth Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise. Maturity : Maturity Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media. Decline : Decline At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting. Classification of New Products : Classification of New Products Marketing Innovations:
The actual product is not changed and the habits of the consumer also need not to be changed, only a few alternatives are done. Eg. Packaging, branding, easy availability etc.
Juices Slide 47: Product Improvements
when a little improvement is done to the existing product. Like 100 cc scooters, Tubeless tyres, Digi Cams etc.
These are normally targeted to a new segment of buyers. Slide 48: Technological Innovations
personal Computers, Photo copiers
Here early entrants enjoy the major market leadership. New Product Development : New Product Development Transfer of Technology
Penetration of New Market
New Product Lines
Product Line Extensions
Repositioning or New Product Launch Transfer of technology : Transfer of technology This is more of an adoption of any product.
New products are often launched on the basis of new technology.
It can be acquired from the parent company or with foreign collaboration.
Eg. Personal Computers Diversification : Diversification Eg. ITC venturing into Paper Products, FMCG Etc.
Bombay Dieing Venturing into Real Estate Business. Additions to existing product line : Additions to existing product line Eg. Godrej extension from Durable like Refrigerators to Office equipment etc.
Videocon entered into washing machine and Music Systems etc. Improvement in existing product : Improvement in existing product New product which offers superior performance than the existing one and replace it.
Eg. Gramophones and record players have been replaced by cassette players and now CD players. Cost Reduction : Cost Reduction New product which provides similar performance at lower cost.
Classic Eg. Nirma Product Re-launch : Product Re-launch Some times old products are re-launched with little improvements.
Eg. Tata Tea, Maggie New Product development process : New Product development process Idea Generation
Commercialization Slide 57: Product, Classification of Products, Product Line and Product Mix What is a Product? : What is a Product? A product is any tangible, intangible offering that might satisfy the needs or aspirations of a consumer.
A product has 3 basic levels
Core Product: This answers WHY the buyer should have it. It is also called as Generic Requirement. Slide 59: “Purchasing agents do not buy drills, they actually buy its ability to make same size holes”
Theodre Levit Core Benefit : Core Benefit The generic product concept has two key issues:
Its consumers view of what a given product represents.
The aspiration of consumer differ from place to place and time to time.
Eg. For someone Washing Machine would be: comfort in washing the cloths, some, tough wash, some complete dryer… Tangible Specifications : Tangible Specifications Tangibility is added to the core product in the form of features, style, color, design, efficiency etc.
Eg. The Color of the machine
The Electricity consumption
Quality …. Augmented Features : Augmented Features This fulfill more of psychological or esteem needs.
Eg. Brand Name
etc…. Classification of Products : Classification of Products The classification of the product depends upon the TANGIBILITY and DURABILITY found in an offering.
Typical classification of Product:
Non Durable Non Durable Products : Non Durable Products Products that are consumed fast and are purchased on a regular basis. The consumer here spends minimum time and effort in comparing and buying the item.
Consumer Products are further classified according to its use: Personal, Family and Household as Convenience, Shopping and Specialty. FMCG : FMCG Fast Moving Consumer Goods are the Non Durable Goods. Eg. Sot Drinks, Chips, Ice Creams etc…. The consumer shows minimum effort in buying these articles.
FMCG is further sub divided into 3 Classes… Slide 66: Staples
These are goods purchased on a regular basis. Eg. Soap, Pulses, Toothpaste etc…
Whenever the stock is about to end the consumer buys these products again. Slide 67: Impulse Goods
These are the goods which are purchased without planning or search… Our external stimuli provokes us to buy these products. Eg. Cold drinks, Chocolates, Chips….
Most of the time the consumers aim is not buying the product solely but when spots them, feels, attracted and ends up in buying them. Slide 68: Emergency Goods
These goods are purchased when the need arises. Eg. Umbrellas in rainy season, Pullovers in winters etc..
The marketers tries for a very good distribution chain, as the sales is not the same throughout and whenever the need arises, the product should be available at maximum places… Characteristics of FMCGConsumers Point : Characteristics of FMCGConsumers Point FMCG has a very low shelf life
1. Frequent Purchases: Salt, Rice, Chocolates
2. Low Involvement: The consumer will buy an alternative if the brand ask for is not available….
Exceptions to the rule: Products like Cigarettes, Personal Hygiene Products, Brand Loyalty. Characteristics of FMCG Marketers Point : Characteristics of FMCG Marketers Point High Volumes
The volume of the product required is very high.
Eg. An average family may require 3-4 Soaps a month… Imagine No. of family using it in the whole country???
If the organization cannot ensure high sales volume, they will have difficulties in surviving. Slide 71: Low Margins
As the product is required in high volume, there is an intense competition which makes the marketer sell the product with very less margin.
They earn through high volume sales to maximize their turnover.
The Key Becomes High Volumes Low Margins. Slide 72: Extensive Distribution Networks
Consumer preference in FMCG products are not that rigid.
Recall plays a very important role.
Brand Loyalty is not very high.
Consumer allows shopkeeper to decide for him.
Due to all this it becomes very important for the marketer to make its product available at maximum place possible. Slide 73: High Stock Turnover
It is a characteristic feature of FMCG. It is because these products are bought frequently or on a regular basis.
Which in turn allows the marketer to rotate the capital invested. Product Mix : Product Mix It is the set of product lines and items that a particular company offers to buyers.
The Width of product mix refers to how many different product lines a company carries.
Product Line: It is a group of products that is closely related because they perform a similar function, targeted at the same customer groups, marketed through same channel. Slide 75: Eg. Products line of P & G :
Disposable Diapers etc.
If, Pantene comes in 4 variants in 3 different sizes, the depth of the product mix becomes 4 X 3 = 12. This can also be referred as Stock Keeping Units (SKU’s) Slide 76: Consistency of a product mix refers to how closely related the various product lines are to the end user.
The Width, Depth and consistency of product mix enables the company to define the Product Portfolio. Product Line : Product Line Line Stretching
Downward Stretch : It takes place when the company finds a particular segment (Lower) which is un-attended by the existing product. And introduces a product to cater that lower segment.
Upward Stretch : It is when company a company enters Upper market through Line Extension. Slide 78: Line Filling : A product line can be extended by adding more items to the existing range.
Reaching for more profits
Trying to satisfy dealers who complain about lost sales due to missing items in the line
Trying to utilize excess capacity
Trying to offer a full line of the production
Trying to plug holes in the positioning map. Slide 79: Line Modernization : Modernization is carried out continuously as competitors are constantly growing and coming out with new products and ideas.
In this process an Organization should not be too early, if so, It can harm the existing product or late so that competitors already have a hold in the market. Slide 80: Line Featuring
Its about featuring a particular product of the product line, so as to increase foot falls and then making the consumer exposed to other products too. Growth Strategies for FMCG : Growth Strategies for FMCG Multi-brand Strategy
When a company nurtures number of brands in a single category.
Strategy: To capture as much market share as possible by trying to cater as much possible segments.
Eg. HUL Bathing Soaps:
Names????? Slide 82: Product Flanking
Basically offering same product in different and price combinations to tap diverse market opportunities. Slide 83: Brand Extensions
This enables the company to enter new product categories more easily.
Eg. Lifebuoy: Lifebuoy Plus, Lifebuoy Liquid, Lifebuoy Gold.
Eg. Amul: Amul Butter, Amul Ghee, Amul cheese, Amul Milk, Amul Chocolates Slide 84: Building Product Lines
Companies add related new product line to the existing Line.
Eg. Britannia: It has all Baked food items which are increasing. Have also added milk products to its kitty. Slide 85: New Product Development
Its due to ever increasing Competition in the market Slide 86: Innovations in Core Product
The life of a FMCG product is short. The marketer continuously tries to introduce new products and a consumer is also open to try new products. Slide 87: Long Term Outlook
Eg. Kelloggs Slide 88: Extending the PLC
Expanding Markets by Usage
Increase the Number of Customers
Encouraging more consumption.
Wide distribution Network Slide 89: Advertising and Media Coverage
Sales Pomotions offer a direct incentive to buy more in the short term. What is the Territory of the Brand? : What is the Territory of the Brand? Six inches wide
Grey and wet
Mysterious Contents : Contents Presentation Objective
From Products to Brands
Evaluating Advertising Presentation Objective : Presentation Objective To understand the facets / issues involved in branding
To develop a framework for building a brand Contents : Contents Module 1 Understanding Branding : Module 1 Understanding Branding Understanding
Branding Brand Building Module 1 Understanding Branding : Module 1 Understanding Branding Module I - Understanding Branding : Module I - Understanding Branding Exercise Architecture Management Attributes Products to brands Module 1 - Stage 1 From Products to Brands : Module 1 - Stage 1 From Products to Brands Module 1 - Stage 1 From Products to Brands : Module 1 - Stage 1 From Products to Brands Brand v/s. Product A brand is more distinctive than a product
It is first of all a name, a means of identification
Secondly it s a set of added values offering both functional and psychological benefits Above all ‘a brand is a promise’ Module 1 - Stage 1 From Products to Brands : Module 1 - Stage 1 From Products to Brands A Brand is a Promise “ …A seller’s promise to deliver consistently
a specific set of features, benefits and services
to buyers. Module 1 - Stage 1 From Products to Brands : Module 1 - Stage 1 From Products to Brands …….a short-hand that communicates powerfully & reduces uncertainty Fevicol Case : Fevicol Case Fevicol Case : Fevicol Case Fevicol Case : Fevicol Case Brand as an Asset : Brand as an Asset “If Coca Cola lost everything except for ‘the formula’ and its brand name , it could walk into any bank in the world and get $100 billion loan to start from the scratch”
Fortune Magazine Module 1 Understanding Branding : Attributes Module 1 Understanding Branding Exercise Architecture Management Attributes Products to brands Module 1 Understanding Branding : Module 1 Understanding Branding Exercise Architecture Management Attributes Products to brands Name Logo Colours Essence Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Immutable Law of Name In the long run the brand is nothing more than a name Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Name Logo Colours Essence Brand Name
CNN an AOL Time Warner Company
Toyota’s Lexus is distinctive.Toyota’s Luxury commonplace
Orange was a striking name in a world of tel and coms
Not mean anything rude or silly in another language
Big Macs( McDonald’s) is a slang for big breasts in Canada Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Name Logo Colours Essence Brand Name
Avoid generic / line extended names
Xerox as opposed to Haloids Paper Master
Xerox (Copier) is powerful. Xerox Computer is not
Changing your name will not overcome a bad strategy
“Monday” (Price Waterhouse Coopers ) Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes A brand’s logotype should be designed to fit the eyes.
Both eyes Immutable Law of Shape Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Name Logo Colours Essence Brand Logo
Simple logo, designed to fit both eyes
Mercedes three star
Logos with a horizontal bias
Logo with a horizontal bias is esp. useful for retail brands
Logo font has to be clear and legible
A housewife does not buy Ariel because it is written in a specific font Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes A brand should use a colour opposite of its rival Immutable Law of Colour Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes The Cola Wars: Energy Vs. Peace Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Name Logo Colours Essence Brand Colours
Colours have meanings
Purple means royalty
Red is energetic
Blue is peaceful
Opposite colours can differentiate
Coke is red, Pepsi is blue
Kodak is yellow, Fuji is green Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Name Logo Colours Essence Brand Colours..
Colours can help you stand out
FedEx’s orange and purple packet stands out in corporate blue
Logo and colours help, but the power of the brand
Essentially in the meaning of the brand name in consumer’s mind, its essence Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Most important thing for a brand is its
single mindedness. Immutable Law of Singularity Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Single-mindedness means consistency.
Fresh and interesting manifestations of a single idea. Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Name Logo Colours Essence Brand Essence
A brand must “leverage a compelling truth”
Linux stands for freedom as opposed to Microsoft’s monopoly
A brand should mean a single powerful thing: the essence
Essence of Volvo is Safety
Essence of Tata is trust
Essence of Fevicol is bonding Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Name Logo Colours Essence Brand Essence
A brand should also be clear of what is not its essence
In India, STAR NEWS is not a channel of the masses unlike STAR PLUS
A brand should drive single mindedly its essence
Volvo has been selling safety for 35 years
Raymond has been selling the complete man for over 2 decades
Essence of Dettol is protection against germs
A brand loses its essence if it starts meaning a lot of things
What is Miller :A regular,light,draft,cheap, expensive beer Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes A brand should try to own a word in consumer’s mind Immutable Law of Word Module 1 - Stage 2 Attributes : Module 1 - Stage 2 Attributes Module 1 Understanding Branding : Attributes Module 1 Understanding Branding Exercise Architecture Management Products to brands Management Module 1 Understanding Branding : Attributes Module 1 Understanding Branding Exercise Architecture Products to brands Co-Brand Stealth Brand Fighting Brand Multi-Brand Module 1 - Stage 3 Management : Module 1 - Stage 3 Management Co-Brand Stealth Brand Fighting Brand Multi-Brand Co-Brand
Brands need to address a similar need segment
Kellogg's Pop-tarts with Smuckers Jam
Brands with complementary strengths: Seen often on the Net
NY Times gives Amazon credibility
Amazon makes NY Times look modern. Module 1 - Stage 3 Management : Module 1 - Stage 3 Management Co-Brand Stealth Brand Fighting Brand Multi-Brand Stealth Brand
Brand building that attracts customer attention but not of rivals
Home-to-home, word of mouth / PR, internet community building
Krispy Kreme relies only on PR
Good option when unsure of a new medium/market
Little promotion for Maytag website as opposed to a buy.com. Maytag sold 1000s of Neptune washers on web Module 1 - Stage 3 Management : Module 1 - Stage 3 Management Co-Brand Stealth Brand Fighting Brand Multi-Brand Fighting Brand
Pricing led branding option. Works as a competitive response.
Smirnov (Heublein) Case
Smirnov attacked by W’schmidt @ $1 less
Heublein raised the price of Smirnov
Heublein introduced Reiska(fighting brand) at the same price point as W’schmidt
Heublein added Popov lower than both Module 1 - Stage 3 Management : Module 1 - Stage 3 Management Co-Brand Stealth Brand Fighting Brand Multi-Brand Fighting Brand
Built as new, independent brand
Prevents dilution of the leading brand
HLL introduced Wheel to fight Nirma Module 1 - Stage 3 Management : Module 1 - Stage 3 Management There is a time and place to launch a second brand Immutable Law of Siblings Slide 130: Possibly even a third or a fourth brand.. Module 1 - Stage 3 Management : Module 1 - Stage 3 Management Co-Brand Stealth Brand Fighting Brand Multi-Brand Multi Brand
Key to a multi-brand approach is to give each sibling a unique identity
Time, Fortune,Life, Money, People
Tempting to mash the brands and top it with corporate frosting
Tata Salt,Tata Tea
Second brand risks diluting equity
Is Kingfisher Mild drinker more likely to be from Kingfisher or from Fosters? Module 1 - Stage 3 Management : Module 1 - Stage 3 Management Co-Brand Stealth Brand Fighting Brand Multi-Brand Multi Brand..
Common product area focus
Shampoos: Clinic Plus, Ayush, Sunsilk
Single attribute segmentation
Price:Maruti 800, Zen, Esteem
Sibling creates a new category
Herbal Anti-Dandruff category by Ayush Module 1 Understanding Branding : Attributes Module 1 Understanding Branding Exercise Architecture Management Products to brands Architecture Module 1 Understanding Branding : Attributes Module 1 Understanding Branding Exercise Management Products to brands House of Brands Endorsed Brand Sub Brand Branded House Module 1 - Stage 4 Architecture : Module 1 - Stage 4 Architecture Immutable Law of Contraction A brand becomes stronger when you narrow its focus Module 1 - Stage 4 Architecture : Module 1 - Stage 4 Architecture The Economist is red and daring.
Provocative, brutally honest and non-conformist Module 1 - Stage 4 Architecture : Module 1 - Stage 4 Architecture Products to brands House of Brands Endorsed Brand Sub Brand Branded House House of Brands
Often dictated by corporate strategy. Core competence of the firm is marketing / branding
P&G is the prime example. Its “big” with the channel
Multiple independent brands allows company to fill each niche
Helps brand focus
Gives an opportunity for the company to focus on each brand and contract its scope. Module 1 - Stage 4 Architecture : Module 1 - Stage 4 Architecture Products to brands House of Brands Endorsed Brand Sub Brand Branded House Endorsed Brand
Endorsement used as a device to transfer brand assets from one brand(corporate) to another
Titan from TATA, transferring trust
Danger of diluting the equity of endorsing brand
Best as a transitional strategy
Gain, from makers of Ariel Module 1 - Stage 4Architecture : Module 1 - Stage 4Architecture Immutable Law of Expansion Brand’s power inversely proportional to scope. Module 1 - Stage 4 Architecture : Module 1 - Stage 4 Architecture The Volkswagen bus ad, talked only about ‘plenty of room’ Module 1 - Stage 4 Architecture : Module 1 - Stage 4 Architecture Products to brands House of Brands Endorsed Brand Sub Brand Branded House Sub Brand
Inside out branding.Company pushes core brand in different directions
Sub-branding can destroy what branding builds
Donna Karan menswear, DKNY, DKNY menswear, DKNY kids Module 1 - Stage 4Architecture : Module 1 - Stage 4Architecture Immutable Law of Company Brands are brands, companies are companies.
There is a difference. Module 1 - Stage 4 Architecture : Module 1 - Stage 4 Architecture Products to brands House of Brands Endorsed Brand Sub Brand Branded House Branded house
Consumers buy brands, not companies
Danger of branded house, being many things to one group of people
Virgin? Does “Virgin trains” work?
May motivate trade, so might be useful for PR purposes with trade/other stakeholders
P& G way Module 1 Understanding Branding : Attributes Module 1 Understanding Branding Exercise Architecture Management Products to brands Exercise Module 1 Understanding Branding : Module 1 Understanding Branding Two brand positioning within the same brand family?How do we reconcile the two positions?
The options available to us
Stand Alone New Brand
Transfer of Brand Assets from an existing brand
What are the pros and cons of each option ? Exercise Module 1 Understanding Branding : Attributes Module 1 Understanding Branding Architecture Management Products to brands Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Single Brand Family
‘Stand-alone’ New Brand
Transfer of Brand Assets ‘x from y’ Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Option : Single Brand family
Constant values / different products
Dettol antiseptic / soap / hand wash
Crest toothpaste / Mouth wash (But not chewing gum)
Differentiate on product usage
IBM Value Point - Entry level purchase
Gillette Good News Line - Disposables Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Option : Single Brand family
Use as umbrella branding
SONY Electronic technology
But Taj from TATA for Performance segments
Difficult for a single brand to straddle Performance and Price segments
Surf entry in popular segment with Surf Easywash. Withdrew after 2 yrs
Gap changed Gap Warehouse to Old Navy Clothing due to perceived brand erosion Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Option : Single Brand family
+ Cheaper than creating a new brand
- Difficult to stretch brands across Price and Performance
- Risk of eroding present position
- Lose opportunity of creating a new segment Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Option : ‘Stand-alone’ New Brand
Levers enters popular segment successfully with Wheel as opposed to Surf Easywash
Levers use of brand-wise differentiation of brand values and attributes to target consumer segments- Surf / Rin / Wheel / OK detergents
Toyota launches Lexus to enter the Premium Auto segment credibly Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Option : ‘Stand-alone’ New Brand
+ Clear brand identity, values and assets
+ Create new opportunity of a range possibility in Popular segment
+ Leave present brand secure
- Expensive to build brand assets
- Difficult to build trial as a stand-alone Brand Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Option: Transfer of Brand Assets ‘x from y’
Titan (from Tata’s)
Worked well for Titan
Sonata (from Titan)
Eroding equity of Titan
Gain (from the makers of Ariel)
Apparently a ‘Transitional Strategy’ Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Option: Transfer of Brand Assets ‘x from y’
+ Cheaper than developing a new brand
+ Can be used as a ‘Transitional Strategy’
- Still a risk of eroding present image
- Possible mix of values and assets Module 1 - Stage5 Exercise : Module 1 - Stage5 Exercise Options Single Brand Family Stand Alone Brand Transfer of Brand Assets Branding Options: Conclusion
‘Single Brand family possible if:
Different products / similar values
Differentiate on end use
‘Stand-alone ‘New Brand’ best option to straddle values - however it is expensive to create a new Brand
‘Transfer of Brand assets ‘x from y’’ possible, especially as a transitional strategy - still a risk of eroding present values and mixing values and assets POSITIONING :The Battle for Your Mind : 156 POSITIONING :The Battle for Your Mind A concept so simple,people have difficulty in understandinghow powerful it is! : 157 A concept so simple,people have difficulty in understandinghow powerful it is! What is Positioning ? : 158 What is Positioning ? Positioning is owning a piece of consumer’s mind
Positioning is not what you do to a product
It’s what you do to the mind of the prospect
You position the product in the prospect’s mind
‘It’s incorrect to call it Product Positioning’ – Ries & Trout Slide 159: 159 Positioning Colgate
Attraction Pond’s DFT
Confidence Examples Brand Identity and Brand Image : 160 Brand Identity and Brand Image
Brand Positioning “To position a product/service in the minds of consumers relative to competitors”Ries and Trout : 161 “To position a product/service in the minds of consumers relative to competitors”Ries and Trout A ‘reason to be’“The brand has to be distinctive, relevant and appealing to its target audience” : 162 A ‘reason to be’“The brand has to be distinctive, relevant and appealing to its target audience” Positioning : 163 Positioning Positioning refers to ‘how organizations want their consumers to see their product’ Positioning = Segmentation + Differentiation
Slotting your product in the consumer’s mind.
Who am I? Why buy me?
“Positioning starts with the product….But Positioning is not what you do to the product. Positioning is what you do to the mind of the prospect” - Ries and Trout Why is Positioning Required ? : 164 Why is Positioning Required ? The assault on our mind…
The media explosion
The product explosion
The advertising explosion
So little message gets through that you ignore the sender and concentrate on the receiver
Consumers only accept what is consistent with prior knowledge or experience
Very difficult to change the perception once formed How it is done… : 165 How it is done… The easy way to get into a person’s mind is to be first
Xerox, Kodak, Polaroid, Sun TV, The Hindu
If you didn’t get into the mind of your prospect first, then you have a positioning problem
Better to be first than be best
Even if you are not first, be the first to claim a unique position in the mind of the consumer
Miller Lite – first lite beer and Beck’s Beer – first beer popular in Germany
In the positioning era, you must, however, be first to get into the prospect’s mind Slide 166: 166 The basic approach is not to create something new or different, but manipulate what’s already in the mind
To find a unique position, you must ignore conventional logic
Conventional logic says you find concept inside product
Not true; look inside prospect’s mind
You won’t find an uncola idea inside 7-up; you find it inside cola drinker’s head How it is done… Brand Positioning : Complan : 167 Brand Positioning : Complan Complan for what?
Enriched with 23 vital nutrients in right quantity and proportion essential for healthy growth
Complan for whom?
A brand for growing children
Complan for when?
Higher nutrition needs
Complan Boy/Complan Girl Brand Positioning : Complan : 168 Brand Positioning : Complan “Complete planned food” Brand Positioning : Boost : 169 Boost for what?
For fitness and health
Boost for whom?
For the young and the sporty Kapil Dev, Sachin Tendulkar and Virender Sehwag
Boost for when?
Whenever and wherever energy is needed
Tall cylindrical straight jar that symbolizes athleticism and fitness Brand Positioning : Boost Brand Positioning : Boost : 170 “Boost is the secret of my energy” Brand Positioning : Boost Brand Positioning : Bournvita : 171 Bournvita for what?
For nutrition and health
Bournvita for whom?
For a growing kid who is healthy, intelligent, energetic and glowing
Bournvita for when?
Everyday to ensure you are energetic throughout the day
A tall cylindrical straight jar that reflect energy, enthusiasm and vigour Brand Positioning : Bournvita Slide 172: 172 Brand Positioning : Bournvita Positioning of a leader : 173 Positioning of a leader Do not boast of being number 1, implies insecurity about leadership (Coke – “the real thing”)
Single Position Strategy – Each brand occupying a single unchanging position in the mind of the customer
Cheaper to introduce new brands
Introduce new brands instead of changing existing – Safari and Sumo
Change is inevitable and leader must be willing to embrace change. Positioning of a follower : 174 Positioning of a follower It is always better to be first and establish leadership
If the product is not first, then it must find an unoccupied position
“Munch ka crunch Mahaan” – Chocolate with a crunch
“Avis is only No. 2 in rent-a-car, so why go with us? We try harder.”
A product that seeks to be everything to everyone will end being nothing to everyone ‘You concentrateon the perceptions of the prospect, not the reality of the product’- Al Ries & Jack Trout : 175 ‘You concentrateon the perceptions of the prospect, not the reality of the product’- Al Ries & Jack Trout ‘It’s difficult to change behaviour, but easy to work with it’ : 176 ‘It’s difficult to change behaviour, but easy to work with it’ What you need… : 177 Understand the role of words and how they affect people
Turtle vs. Lexus
Be careful of change
Long term / Not on technology or fad What you need… Guidelines : 178 Guidelines Start by looking not at the product but at the position in the market that you wish to occupy, in relation to competition
Think about how the brand will answer the main consumer questions
What will it do for me that others will not?
Why should I believe you?
Try to keep it short and make every word count and be as specific as possible
Vagueness opens the way to confused executions Guidelines : 179 Guidelines Keep the positioning up-do-date
Give as careful consideration to change as you did to the original statement
Look for a Key Insight!
An ‘Accepted Consumer Belief’ What is Key Insight? : 180 What is Key Insight? Key Insight is ‘seeing below the surface’ / ‘seeing inside the consumer’
Insight expresses the totality of all that we know from seeing inside the consumer
An insight is a single aspect of this that we use to gain competitive advantage
By identifying a specific way…
That the brand can either solve a problem or
Create an opportunity for the consumer Slide 181: 181 Key Insight
‘I wish to get married to a handsome prince’ Slide 182: 182 Key Insight
‘Fragrance of my current talc does not last long and I miss opportunities to enjoy life’ Slide 183: 183 Key Insight
‘Soap leaves my skin feeling dry and tight’ More on Key Insight… : 184 More on Key Insight… It will require two separate thoughts to be related to each other in a new and fresh way
Insight will generally be enduring
Often the process will lead to several insights
The one to use is the one that offers to be the source of greatest competitive advantage More on Key Insight… : 185 More on Key Insight… No need for insight to change if you have identified the higher-order needs of consumers
Keep asking ‘why’ to find the real need behind the obvious insight
Remember, the insight is always the basis for a brand’s positioning Proper Positioning : 186 Proper Positioning Proper positioning
Clarifies what the Brand is all about
How it is both unique and similar to competitive brands
Why customers should purchase and use the Brand In order to Position a Brand… : 187 In order to Position a Brand… …you must decide :-
Who the Target Consumer is
Who your main competitors are
How the Brand is similar to your competitors
How the Brand is different from your competitors
Where do you get this information?
Your BRAND INVENTORY!! How do I begin to Position my Brand? : 188 Communicate category membership
This is the “frame of reference”, where customers can activate what they know about the category and how apply it.
Communicate category benefits
Compare your product to exemplars
Rely on product descriptor How do I begin to Position my Brand? The 3C’s of Positioning : 189 The 3C’s of Positioning Be Crystal clear
Be relevant and credible to the consumer
Write in consumer language and from consumer’s view point
Focus on building brand elements into powerful discriminator
Be sustainable And then… : 190 And then… The brand name!
The name is the first point of contact between the message and the mind
‘The brand name is a knife that cuts the mind to let the brand message inside’
– Ries & Trout FOCUS OF POSITIONING : 191 FOCUS OF POSITIONING Attributes and benefits of the product
Product use or application
Cultural symbols STEPS IN POSITIONING : 192 Identify Competitors.
Determine most important attributes consumers use in choosing a brand.
Determine consumers’ perceptions of competitors.
Determine perceptions of your brand
What is the ideal brand for your market segments?
Assess best positioning strategy
Track image of brand over time STEPS IN POSITIONING Brand Positioning : 193 Brand Positioning Brand Positioning
Brand positioning is all about identifying the optimal location in our customers’ minds for our Brand and our competitors.
Proper positioning makes it easier to facilitate understanding of our Brand.
Taken to its’ logical conclusion, you might think of the Principle as an indicator of a brand’s position. First Steps…. : 194 First Steps…. The first step is to identify and establish Brand positioning and brand values (Keller)
Positioning is the foundation for creating and fostering the desired knowledge and perceptions of your customers
remember our 3 types of associations in memory?
We can really only manage one (positive), can respond to a second (negative), and have no control over the third (idiosyncratic) Identifying and establishing Brand Positioning : 195 Identifying and establishing Brand Positioning The Integrated Brand Model
Six elements that define a brand
Leverage each other
Brand Drivers a function of Organization Drivers
These six elements serve as a “roadmap” to our Brand Equity model
At every step, we can figure out what to do from our Brand and Organization Drivers Brand Positioning Guiding Principles…. : 196 Brand Positioning Guiding Principles…. 1. A brand's positioning should be updated every three to five years, or as often as needed to update the company's overall growth strategy.
2. Positioning should drive all of an organization's brand strategies, as well as revenue and profit streams.
3. Senior management has to lead the charge in implementing a brand's positioning.
4. Employees, not advertising agencies, bring a brand positioning to life.
5. A strong brand positioning is customer driven and fits with customer perceptions of the brand. Points of Parity?The frame in which we are competing!E.g. Subways Dove : 197 Points of Parity?The frame in which we are competing!E.g. Subways Dove Positioning - The Process…. POP and POD : 198 POP and POD Points-of-difference –unique brand values
Points-of-parity–shared brand values
Competitive Nuts and Bolts : 199 Nuts and Bolts How do I decide on my PODs and POPs?
Analysis of category
What attributes do all of my competitors have? I probably need to have those, or my competitors automatically have a POD
POPs get you included in category
PODs are more difficult
Don’t use PODs that are product centric (dominate competition) but customer centric (uniquely address need of customer) POP and POD : 200 POP and POD POD (Point of Difference)
Strong, favorable, unique brand associations
May be any kind of attribute or benefit
Two types of PODs
Functional, performance related differences
Affective, experiential, brand image related differences POP and POD : 201 POP and POD POP (Point of Parity)
Associations that are shared with other brands
Category: attributes that are required to include your product as a member of that category
Competitive: POP that negate your competitors PODs
POPs can be “good enough”, but PODs should be “superior POP AND POD: BMW over the years : 202 POP AND POD: BMW over the years 1971 1975 1985 1991 International
Desirability Fun to drive
Economical Affluence, exclusivity
Fun to drive Affluence, exclusivity
Fun to drive Establish POP and POD in marketplace : 203 Establish POP and POD in marketplace Difficulty: Many attributes that make up POP and PODs are negatively opposed
Low price vs. High quality
Tastes Great vs. Less filling
Separate the attributes
Leverage equity in another entity
Redefine the relationship Slide 204: 204 Slide 205: 205 Brand Positioning Statement For women ages 25-55, Loreal Revitalift Anti-wrinkle and firming cream reduces facial wrinkles and firms your skin. NO REASON WHY! Positioning Strategies : 206 Positioning Strategies Product Attribute or Benefit approach
Product category approach
Competitor approach Product Attribute or Benefit approach : 207 Product Attribute or Benefit approach Volvo stands for ‘safety’
BMW for ‘performance’
Mercedes for ‘luxury’
Dermi Cool (prickly heat powder that cools) Positioning Strategies : 208 Positioning Strategies USER APPROACH
Loreal with Aishwarya Rai, Revlon with Cindy Crawford etc.
The Marlboro Man, Thums up is also trying to reinforce its ‘for grown ups’ image by using a ‘macho’ celebrity route (Akshay Kumar). PRICE_QUALITY APROACH
“Value-for-money, for years”.
“MNC quality, Indian price.” Positioning Strategies : 209 Positioning Strategies PRODUCT CATEGORY APPROACH
Diet beers (from kingfisher) and ice beers (from United Breweries) as against the regular beer. COMPETITOR APPROACH
Captain Cook (free flow vs. Tata Salt)
Savlon (does not sting vs. Dettol) The 22 Immutable laws of Branding : 210 The 22 Immutable laws of Branding 1. The law of Expansion : 211 1. The law of Expansion The power of a brand is inversely proportional to its scope
Marketers constantly run branding programs in conflict with people’s perception of their brands. Customers want brands that are narrow in scope and are distinguishable by a single word, the shorter the better." Slide 212: 212 Chevrolet used to be the largest selling brand in the US with 1,718,839 cars sold in 1986. But trying to be all things to everyone undermined the brand and today Chevy sells less than a million cars and is no longer the market leader. 2. The law of Contraction : 213 2. The law of Contraction A brand becomes stronger when you narrow its focus Slide 214: 214 In a few short years Starbucks has become one of US’s best known and most popular brands. Narrowing one’s focus is not same as carrying a limited line. Starbucks offers thirty different types of coffees. 3. The law of Publicity : 215 3. The law of Publicity The birth of a brand is achieved with publicity, not advertising
Advertising is best used to maintain a brand, but it is very difficult and expensive to launch a new brand through advertising alone
The best way is to be first in a new product or service category, and reap the attendant publicity Slide 216: 216 Anita Roddick created the concept of Body Shop in 1976 around the concept of natural cosmetics made of pure ingredients, no animal testing and kind to environment and indigenous people. With no advertising but massive amounts of publicity, it is today a powerful global brand. 4. The law of Advertising : 217 4. The law of Advertising Once born, a brand needs advertising to stay healthy Slide 218: 218 A consistent theme of Goodyear advertising over the years has been #1 in tires. So who makes the best tires? It must be Goodyear thinks the customer. It’s the leader. 5. The law of the Word : 219 5. The law of the Word A brand should strive to own a word in the mind of the consumer
If you want to build a brand, you must focus your branding efforts on owning a word in the prospect's mind. A word that nobody else owns.
Examples: Mercedes = prestige; Volvo = safety; Kleenex = tissue; Xerox = copier; . Slide 220: 220 Federal Express became successful by becoming the first air cargo carrier to narrow its focus on overnight delivery thereby owning the word overnight in customers minds. FedEx has become synonymous with overnight delivery. 6. The law of Credentials : 221 6. The law of Credentials The crucial ingredient in the success of any brand is its claim to authenticity. The best claim is being the leading product or service in your category, because consumers assume that if it is a leading seller, it must be good
Never forget leadership. No matter how small the market, don't get duped into simply selling the benefits of the category
There are also the long-term benefits of leadership. Once you get on top, its hard to lose your spot. Slide 222: 222 In 1942, Coca Cola launched an Ad Campaign “ The only things that tastes like Coca Cola is Coca Cola Itself. It’s the real thing.” It has used the real thing slogan over the years to claim its authenticity. 7. The law of Quality : 223 7. The law of Quality Quality is important, but brands are not built by quality alone
In fact, most people have no idea as to the "real" quality of a product or service.
Is a Rolex really better at keeping time than a Timex? How do you know? Slide 224: 224 Rolex has become the world’s best known and best selling brand of luxury watches. Does quality have anything to do with its success? Probably not. Does Rolex make high quality watches? Probably. Does it matter? Probably Not. 8. The law of the Category : 225 8. The law of the Category A leading brand should promote the product or service category, not the brand.
This may seen counter-intuitive, but the best way for the brand leader to build sales is to promote the category, not their specific brand. Slide 226: 226 Eatzi’s is the first brand in the new category it calls the meal market. Jointly owned by Brinker international and Phil Romano, Eatzi’s focuses on restaurant quality food primarily for take out consumption. 9. The law of the Name : 227 9. The law of the Name In the long run, a brand is nothing more than a name Slide 228: 228 One of the world’ most powerful brands, Xerox demonstrates many of the important laws of branding, including being the first in its category with a short unique name , so much to become generic for copying. How ever when it put its name to computers the result was huge losses 10. The law of Extensions : 229 10. The law of Extensions The easiest way to destroy a brand is to put its name on everything Slide 230: 230 With a powerful marketing program, Miller high Life was rapidly gaining on market leader Budweiser. ( It got within 20% of King of Beers) Then it introduced a bevy of line extensions and stopped Miller High Life cold. 11. The law of Fellowship : 231 11. The law of Fellowship In order to build the category, a brand should welcome other brands Slide 232: 232 One of the best locations for a number two brand is across the street from the leader. The best place for a Planet Hollywood is right across the street from its biggest competitor, Hard Rock Café. Both brands will benefit. 12. The law of the Generic : 233 12. The law of the Generic One of the fastest routes to failure is giving a brand a generic name
Generic names (i.e. names describing the product or service category, such as "Wine Coolerz"), do not strongly position the product or service within the category, and are thus liable to confuse potential customers. Slide 234: 234 Blockbuster Video is a good brand name for a video rental store while General Video Rental is not. Brands should Avoid generic names like the plague. Yet you see a large number of such generic names especially in the retail area. 13. The law of the Company : 235 13. The law of the Company Brands are brands. Companies are companies. There is a difference.
Brand names should always take precedence over company names. Consumers buy brands, they don't buy companies. So when a company name is used alone as a brand name like GE, Xerox, Intel customers see these names as brands. Slide 236: 236 Does Tide need the corporate endorsement of company name Procter & Gamble? Probably Not. Will the endorsement hurt the brand? Probably not. But Corporate endorsements are for the trade , not for customer’s enlightenment. 14. The law of Sub brands : 237 14. The law of Sub brands What branding builds, sub branding (i.e. brand extensions) can destroy. Slide 238: 238 Holiday Inn has become a mega brand with the launch of sub brands like Holiday Inn Express, Holiday Inn Select, Holiday Inn Garden Court etc. This sub branding is eroding the power of core brand. 15. The law of Siblings : 239 15. The law of Siblings There is a time and a place to launch a second brand.
The key to a family approach is to make each sibling a unique individual brand with its own identity.
Resist the urge to give the brands a family look or identity. You want to make each brand a different and distinct as possible. Slide 240: 240 When Honda wanted to introduce an expensive car, it didn’t call the brand Honda Plus or Honda Ultra. It developed a new brand called Acura which became a huge success. As a matter of fact , it became the largest selling imported luxury car in US. 16. The law of Shape : 241 16. The law of Shape A brand's logotype should be designed to fit both the eye.
The ideal shape for a logotype or brand symbol is two and a quarter units wide and one unit high. Slide 242: 242 A customer sees the world through 2 eyes peering out of his head like looking out windshield of an automobile. For Maximum Visual Impact a logotype should be same shape as a windshield. Avis is almost perfect while Arby’s is too vertical. 17. The law of Color : 243 17. The law of Color A brand should use a color that is the opposite of its major competitor's. Slide 244: 244 What color is a Tiffany’s box . It’s a distinctive Robin’s egg blue. All tiffany boxes are blue. If Tiffany had used a variety of colors for its boxes ,it would have lost a marvelous opportunity for brand name reinforcement with a distinctive color. 18. The law of Borders : 245 18. The law of Borders There are no barriers to global branding. A brand should know no borders. Slide 246: 246 Heineken exports it beer to some 170 different countries. In most of these countries, it is the largest selling high priced beer. It locally brews its beer in 50 countries. 19. The law of Consistency : 247 19. The law of Consistency A brand is not built overnight. Success is measured in decades, not years Slide 248: 248 BMW has been ultimate driving machine for 25 years. What's more remarkable is the fact that it retained its strategy even while changing 3 advertising agencies. Change of agencies usually signals end of a brand’s consistency. 20. The law of Change : 249 20. The law of Change Brands can be changed, but only infrequently and very carefully. Slide 250: 250 Citibank changed from a corporate bank to a consumer bank with plans of becoming the first global consumer bank. It took a while but was done. But a merger with Travelers Group threatened the entire branding process. 21. The law of Mortality : 251 21. The law of Mortality No brand will live forever. Euthanasia is often the best solution. Slide 252: 252 Film Photography is slowly being replaced by digital photography. But Kodak refuses to face that reality. Instead it is trying to save its brand by using Kodak name on its Digital products. 22. The law of Singularity : 253 22. The law of Singularity The most important aspect of a brand is its single-mindedness. Slide 254: 254 Volvo has been selling safety for over 35 years. In the process it has become the largest selling European luxury car. In the past decade, it has sold 849,348 cars in the US, outselling BMW and Mercedes Benz. Brand Equity : Brand Equity Definitions : Definitions Measurable financial value that accrues to a product/service from successful programs & activities – Walker & Yankelovich
A set of brands assets & liabilities linked to the brand’s name, symbol that add or subtract from the value it provides – David Aaker Definitions : Definitions The differential effect of
brand knowledge on consumer response to the marketing of the brand Brand Equity- Advantages : Brand Equity- Advantages Brand equity as a bridge
Reflection of the Past
Direction for the future
Focus and Guidance Sources of Brand Equity : Sources of Brand Equity Brand Awareness- recognition & recall
Brands become part of the consideration set
Affects Choices of consumers Sources of Brand Equity : Sources of Brand Equity Brand Image & Association- link strong favorable unique associations to the brand
Strength of brand association- attributes (descriptive features of product) & benefits (personal value & meaning attached to product)
Favorability – relevant, distinct, belief
Uniqueness – points of parity & points of difference Consumer Based Brand Equity : Consumer Based Brand Equity CBBE – differential effect that brand knowledge has on the consumers response to the marketing of that brand.
3 key elements
Consumer response to marketing
Power of the brand lies in the mind of the consumers. Slide 262: CBBE Pyramid Brand Salience Consumer-
Imagery 4 Bond – Strong relationship 1 Broad Awareness 2 Differentiators 3 Emotional and Intellectual influence Slide 263: Sub-dimensions of brand building blocks Salience Resonance Judgments Feelings Performance Imagery Loyalty
Superiority Warmth, Fun
Self-Respect 4 Brand Relationships (WHAT About You AND ME?) 1 Brand Identity (WHO Are You?) 2 Brand Meaning (WHAT Are You?) 3 Brand Response (WHAT About You?) User Profiles
Purchase and Usage
Personality & Values
History, Heritage, & Experiences Brand Characteristics
& Secondary Features
Durability & Serviceability
Service Effectiveness, Efficiency,
Style and Design; Price Category Identification
Needs Satisfied 4 Steps to Brand building : 4 Steps to Brand building Identify the brand with customers based on need or product class
Brand Meaning in the minds of customers by linking tangible &intangible to the brand
Relationship Brand Pyramid : Brand Pyramid Identity Salience -
Need Satisfaction Brand Pyramid : Brand Pyramid Meaning Performance –
Product Reliability, durability, serviceability
Service effectiveness, efficiently, empathy
Style & design
Price Brand Pyramid : Brand Pyramid Meaning Imagery-
Personality & Values
History & experiences Brand Pyramid : Brand Pyramid 3. Response Judgments-
Social Approval Brand Pyramid : Brand Pyramid 4. Relationships Resonance-
Community- Apple, Harley Davidson
Engagement – clubs-Gang of Girls, MTV, WOM by customers themselves Building Customer-Based Brand Equity : Building Customer-Based Brand Equity Brand building tools and objectives 2. Consumer knowledge effects 3. Branding Benefits Slide 271: 1. Brand building tools and objectives Choose Brand Elements Brand name
Protectability Slide 272: Brand building tools and objectives Developing Marketing Programs Product
Communications Tangible and intangible
Integrate “Push” & “ Pull”
Mix and match options Ref: Strategic Brand Mgmt. – Kevin Kelly Slide 273: Brand building tools and objectives Leverage on secondary associations Company
Country of origin
Channels of Dist.
Transferability Consumer Knowledge Effects : Consumer Knowledge Effects Brand Awareness
Consumption Brand Associations
Points of parity
Points of difference Possible outcomes : Possible outcomes Greater Loyalty
Less vulnerability to competitive marketing actions and crises
More elastic response to price decreases
More inelastic response to price increases
Greater trade cooperation and support
Increased marketing communication efficiency and effectiveness
Possible Licensing opportunities
More favorable brand extension evaluations Managing Customer Brand Equity : Managing Customer Brand Equity Define Brand hierarchy
Define Brand- Product mix
Enhance Brand Equity over time
Establish B.E. over market segments Managing Customer Brand Equity : Managing Customer Brand Equity Define Brand hierarchy Principle of Simplicity
Principle of relevance
Principle of differentiation
Principle of prominence
Principle of commonality Managing Customer Brand Equity : Managing Customer Brand Equity Define Brand- Product mix Brand extensions
Brand Portfolio Managing Customer Brand Equity : Managing Customer Brand Equity Enhance Brand Equity over time Brand Reinforcements
Brand revitalization Managing Customer Brand Equity : Managing Customer Brand Equity Establish B.E. over market segments Identify differences in consumer behavior
Adjust Branding program Module V: Pricing Strategies : Module V: Pricing Strategies Setting the price, adapting the price, initiating and responding the price changes. Price : Price The Importance of Price to Marketers
Most readily changeable characteristic of a product.
Depicts revenues and quantities sold.
Firm’s profitability & symbolic value to customers—prestige pricing. Importance due to:
1.) Product differentiation getting blunted
2.) Inter-firm rivalry
3.) Mature products and markets
4.) Customers’ value perception
5.) Inflation in the economy Slide 283: Price Competition
Emphasizing price and matching or beating competitors’
An effective strategy in markets with standardized
Lowest-cost competitor (seller) will be most profitable.
Allows marketers to respond quickly to competitors
Price wars can weaken competing organizations.
Distinctive product features: Service, Product quality
When a product or service’s features are difficult to imitate
by competitors and customers perceive their value Builds
customer loyalty by focusing on non price features. Stages for Establishing Prices : Stages for Establishing Prices Development of Pricing Objectives : Development of Pricing Objectives Cash Flow Survival Profit Return onInvestment PricingObjectives ProductQuality Status Quo Market Share Slide 287: FIGURE 20.8 Factors affecting pricing decisions Slide 288: Buyers may respond to price
1. Value consciousness
Concern about price and quality
2. Price consciousness
Striving to pay low prices
3. Prestige sensitivity
Being drawn to products signify prominence & status Price - Quality Strategies : Price - Quality Strategies Premium
Higher Lower Higher Lower Quality Selection of a Basis for Pricing : Selection of a Basis for Pricing Dimensions of Pricing
Cost, demand, and competition
Bases for Pricing
Type of product
Market structure of the industry
Brand’s market share relative to competing brands
Customer characteristics Selection of a Basis for Pricing : Selection of a Basis for Pricing Cost-Based Pricing
Adding a rupee amount or percentage to the cost of the product
Cost-Plus Pricing : Adding a specified rupee amount or percentage to the seller’s cost
Markup Pricing: Adding to the cost of the product a predetermined percentage of that cost
2. Demand-Based Pricing
Customers pay a higher price when demand for a product
is strong and a lower price when demand is weak.
3. Competition-Based Pricing
Frequent price adjustments competitors’ prices Slide 293: Pricing Strategies
1. Penetration pricing: Where the organization sets a low price to increase sales and market share. Demand is elastic.
2. Skimming pricing: The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer. Demand is in elastic.
3. Competition pricing: Setting a price in comparison with competitors.
4. Product Line Pricing: Pricing different products within the same product range at different price points. The greater the features and the benefit obtained the greater the consumer will pay. Maximizes turnover and profits. Slide 294: 5. Bundle Pricing: The organization bundles a group of products at a reduced price.
6. Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place. Example : Rs. 199 instead of Rs.200
7. Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, porsche etc.
8. Optional pricing: The organization sells optional extras along with the product to maximize its turnover. This strategy is used commonly within the car industry. Pricing Strategy : Pricing Strategy Differential Pricing
Charging different prices to different buyers for the same quality and quantity of product Slide 296: Price Skimming Penetration Pricing
3. Product Line Pricing
Establishing and adjusting prices of multiple products within a
product line. 2.New Product Pricing Price Lining : Price Lining FIGURE 21.2 Slide 298: 4. Psychological Pricing Slide 299: 5. Professional Pricing
Fees set by people with great skill or experience in a particular field
6. Promotional Pricing :
a) Price leaders
Products priced below the usual markup, near cost, or below cost
b) Special-event pricing
Advertised sales or price cutting linked to a holiday, season, or event
c) Comparison discounting
Setting a price at a specific level and comparing it with a higher price.
d) Cash Rebate
e) Low- Interest Financing
f) Longer Payment terms
g) Warranties & service contracts
h) Psychological discounting Pricing Tactics : Pricing Tactics Hi
Threat from Competition
Lo Lo Hi Pricing Moves in a Competitive Market : Pricing Moves in a Competitive Market Hi
Relative Market Share
Lo Lo Relative Cost Structure Hi PRICE WAR : PRICE WAR Price wars are frequent in industries:
A) Intense competitive rivalry .
B) Multilateral services of price-reductions.
To dominate market through lower costs.
Exploring more opportunities.
Capital is intensive and products are homogeneous
Examples: Airfares, Internet, Petrol, & Loans.
To utilize excess plant capacity.
Bankruptcy & survey.
Response to a competitive attack Slide 303: CUSTOMER TRAP
Low-Quality Fragile-market Shallow-Pocket
Trap Trap Trap PRICE INCREASE
Over demand Cost Inflation
4 Techniques to increase price:
Delayed quotation pricing
Reduction of discounts Slide 304: COMPETITOR’S RESPONSE TO Price Change
Maintain price & add value
Increase price & add value
Launch a low –price fighter line. Slide 305: Pricing Decisions & Strategies Slide 306: Marketing Mix : 4 P’s
Pricing is a very important strategic issue, as it is directly related to product positioning.
Pricing affects other marketing mix elements such as product features, Channel decisions and promotion. Steps to Price a Product (Not always same) : Steps to Price a Product (Not always same) Develop Marketing Strategy
Market Analysis, Segmentation, Targeting and Positioning
Marketing Mix Decision
Define the Product, Distribution and Promotional strategies
Manage Demand curve
Demand Price relation Slide 308: Cost
All fixed and variable cost is calculated
Set Pricing Objective
Profit maximization, Revenue maximization, Price stabilization
Determination of Price
Use one or combination of the above factors and make a pricing structure, give discounts etc. Pricing Objectives : Pricing Objectives Current Profit Maximization
This stresses on Current profits, taking into account revenue and costs
Current Revenue Maximization
Stresses on increasing the Current revenue, and not profits. The motive is to maximize market share and gain profits in long term. Slide 310: Maximize Quantity
This stresses to maximize the number units sold to decrease long-term costs as the experience curve predicts
Maximize Profit Margin
Stresses to increase the profit margin per unit, as, number of unit being sold may be low.
Use price to signal high quality, to position the product as quality leaders. Slide 311: Partial Cost Recovery
Organization which has other revenue sources may seek partial cost recovery.
Incase of market decline or overcapacity, the emphasis may be on to the survival in the market only and to cover the costs.
Price Stabilization to avoid price wars and maintain stable level of profits Skim Pricing : Skim Pricing Skimming is the strategy used to pursue the objective of Profit Margin Maximization. Skimming is most Appropriate .. : Skimming is most Appropriate .. Demand is expected to be relatively inelastic, ie. The customers targeted are not highly price sensitive
Large cost savings are not expected at high volumes or it is difficult to predict the cost savings that can be achieved at high volumes
The company does not have the resources to finance the last capital expenditure for high volume production with initial low profit margins. Penetration Pricing, most appropriate … : Penetration Pricing, most appropriate … Objective is to maximize the quantity by lowering the prices.
Demand highly elastic, ie. Customers are price sensitive, the demand increases as the price decreases.
Economies of scale
The product should be of mass appeal.
Major threat by competition. Pricing Methods : Pricing Methods Cost Plus Pricing
Set the price at the production cost adding a certain profit margin.
Target Return Pricing
Set the price to achieve a target return on investment.
Value Based Pricing
Base the price on the effective value to the customers which is relative to the alternative product.
Base the price on psychological factors of the consumer. Price Discounts : Price Discounts Quantity Discounts
Offer to customers who purchase is large quantities.
Cumulative Quantity Discount
A discount that increase as the cumulative quantity increases.
Based on the time when the purchase is made. Slide 317: Cash Discount
Extended to customer who pay there bill before a specified date.
A functional discount offered to channel members for performing there roles.
A short term discounted price, offered to stimulate sales. LINE & BRAND EXTENSIONS : LINE & BRAND EXTENSIONS Leveraging Brand Equity : Leveraging Brand Equity One of the most important changes in the market is the proliferation of extensions. Managerial Questions : Managerial Questions When considering entering a new product category, two important questions:
1. Should the firm use a brand extension strategy or a new brand strategy?
2. If the firm chooses to use a brand extension strategy, under what conditions will extensions be successful in capturing sufficient market share? Why Extensions? : Why Extensions? Managers use extension strategies under the assumption that brand associations (e.g., quality, reliability, status) and affect (attitudes) will transfer to the extension. Line Extension Strategy : Line Extension Strategy When a brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand.
Colgate for Kids
Watt´s pear juice Example : Example Bisleri is the pioneering brand in the mineral water category.
Originally, Bisleri used to come in a one litre bottle.
But recently, Bisleri has exhibited a spate of innovations.
The brand launched bottles of different sizes and quantities.
The Bisleri portfolio now includes one litre, 1.2 litre, 1.5 litre and 5 litre bottles. Line Extension strategies : Line Extension strategies Product Sizes Bisleri
1.1 ltr Bisleri
5 ltr Bisleri
1.5 ltr Bisleri
1.2 ltr Bisleri
.5 ltr Slide 325: Colour Etc., Pantene
White Flavours Ingredient Rasna
Mango Rasa Rose ,
Salt etc., Slide 326: Form Vim
Bar Slide 327: According to Gautam Singhania, Chairman and Managing Director, Raymond India: "Raymond aims to acquire a dominant position in the apparel sector in the country.
We believe that venturing into exclusive stores for our apparel brands will make our brands stronger and give the right impetus to our growth plans.
We have enhanced our offerings under all our apparel brands to provide a complete wardrobe solution." Slide 328: "Men today want different solutions for different occasions - formalwear, relaxed work wear, evening wear, club wear, traditional wear, travel wear as well as sportswear.
Our brands Park Avenue, Parx and Manzoni, have different categories to cater to this need.
Thus, all our brands offer a solution to changing men's fashion needs at different price points," says Shreyas Joshi, President, Raymond Apparel. Why Line Extensions? : Why Line Extensions? In most of the product categories including fast moving consumer goods, consumer durables and services, line extension has been the name of the game.
It is an expansionist move.
The firms seem to seek growth more vigorously. Nine prominent reasons……… : Nine prominent reasons……… Customer Segmentation
Customer need for variety
Image Benefits Line Extension Risks : Line Extension Risks There are several dangers associated with line extensions.
Line Confusion - Marketers sometimes add products to their line without sound logic and reasoning, without any clear role and goal. This may confuse the customers and the retailers and will affect the brand’s owner company in the long run. Line Extension Risks… : Line Extension Risks… Encourage Variety seeking – Brand loyalty is every marketers dream. By line extension, customers practice and become the habitant of variety seeking. Hence it influence brand switching behaviours. The loyalty is thus weakened. Line Extension Risks… : Line Extension Risks… Success Myopia – An idea may be a grand enough to be converted into a full-fledged independent brand. But the lure of extension seems to be so strong that the ideas are brought into the market as line extensions. This implies loss of a winning asset in the long-term. Line Extension Risks… : Line Extension Risks… Strained relations - When the lines expand, marketers tend to pressurize their trade partners such as wholesalers and retailers to carry the complete line in accordance with their wishes. The pressure appears to be applied more intensely at the retail level. The marketers seek adequate shelf space, promotion and information. But at the retailers end, it brings confusion and chaos.
The result is the strained relations between the marketer and the retailer. Brand Category Extension Strategy : Effort to use a successful brand name to introduce a new product into a different product category.
Nike MP4 player
Sony digital camera Brand Category Extension Strategy BRAND EXTENSIONS : BRAND EXTENSIONS Using an existing brand name to promote a product in a different category, is Brand Extension.
The key difference between line and brand extension is the product category.
In line extension the pdt. Category remains constant whereas in brand extensions product category is a variable. EXAMPLE : EXAMPLE Ponds - Cold cream, Toilet soap Shampoo, Tooth paste, Moisturising lotion, Talc & Face wash.
LG – Television, Refridgerators, Computer monitors, Microwaves, Air Conditioners, Washing Machines & Mobile phones.
Park Avenue – Shirts, Shaving cream, Jeans, Belts, Perfumes, Soap & Razar. Sub-Branding Strategy : Sub-Branding Strategy Using a new brand name in conjunction with a family brand name to introduce new products.
Courtyard by Marriott
Technics by Panasonic
Milo de Nestle Co-Branding/Brand Alliance Strategies : Co-Branding/Brand Alliance Strategies When two or more brand names are attached to a product.
Compaq - Intel (“Intel inside”)
Lan Chile-Mastercard-Banco Stgo Example of Strategies : Example of Strategies Parent Brand: Salomon (ski-equipment)
Line Extension: New type of skis
Brand (Category) Extension: Salomon tennis racquet
Sub-Brand: Avenger by Salomon
Co-Brand: ingredient brand for grip, frame, or strings (Wilson and Goodyear rubber on soles of ProStaff Classic tennis shoes) Why Brand Extension? : Why Brand Extension? Cost of New launches
Returns Types of Extensions : Types of Extensions Product form extension – A product launched in a different form usually means line extension, but if a different product form constitutes an entirely different product category.
Amul milk Amul Condensed milk
Real Juices Real Juice Concentrate Types of Extensions : Types of Extensions Companion Product – The idea here is to capitalise 0n product complementarity. The consumer may view both the products jointly.
Example : Colgate Dental
Tooth Brush Gillette
Shave forms Gillette
After Shave Customer Franchise : Customer Franchise A marketer may extend a product range in order to meet the needs of a specific customer group. J & J
Talc J & J
Oil J & J
Cream J & J
Shampoo J & J
Diapers Company Expertise : Company Expertise Brand Extensions often come in the forms of different product category introductions using a common name but emanating from a common expertise pool. This strategy is particularly seen in Japanese companies. Honda
scooters Brand Distinction : Brand Distinction Many brands achieve distinction in the form of a unique attribute, benefit or feature which gets uniquely associated with the brand.
For instance, Parachute may have expertise of ‘coconut nourishment’ in customers’ minds over time. This would give Marico Industries, the brand owner, the opportunity to launch a variety of products exploiting this distinction.
Oil Shampoo Cream Cooking
Oil Brand Image or Prestige : Brand Image or Prestige A brand extension may involve a foray into unrelated product categories based on a brand’s exclusive image or prestige value. Steel, Automobile, Heavy Vehicles, Watches, S/W devpt. Training etc., Distinctive Taste, Ingredient or Component : Distinctive Taste, Ingredient or Component A brand may develop equity based on any and / or combination of taste, ingredient or component. Then the marketers can make entries into unrelated product categories capitalising on these properties. Nescafe
Coffee Brand Extentability : Brand Extentability Slide 350: Extensions involve transfer of associations from the parent brand to the extension.
The brand extendability depends on its character.
The brands can be classified into 5 types through extendability. Five forms of brands : Five forms of brands The Product Brand - it is a situation where there is very little difference between the brand and the product.
The brand is used as an identity of the product.
Example : vicks, Form 2 – Formula Brand : Form 2 – Formula Brand Formula means a set procedure
A brand which comes in the formula category simply implies that a standard procedure has been used to make the product.
Example : cooking oil, pickles etc., Form 3 – Know – how brand : Form 3 – Know – how brand Know – how is an expertise that a firm develops in a specialized area of activity.
Example : nokia is known for user friendly.
Amul has developed its brand as an expertise in milk processing. Form 4 – Interest brand : Form 4 – Interest brand A brand may be defined by its centre of interest. It may reflect its core spirit.
Example – Gillette maintains its focus on men’s grooming in all its brands.
Logo is ‘the best a man can get’ which creates the interest among the target audience.
Whirlpool – home maker
Nike – winning – to be on the cutting edge. Form 5 - Philosophy : Form 5 - Philosophy The brand at this level acquires more intangible character and orientation.
The philosophy transforms its products in a realm altogether different from its physical reality.
Example : Parker pen, De beers diamond Forms of brand extendability : Product
mixed Know –how
mixers etc., Interest
movies, etc Philosophy
Bags, pens Forms of brand extendability Extensions………………. : Extensions………………. Extensions are not simple as they appear to a layman.
Consumers reject extensions when they do not make sense.
Brand extension is not a physical act of merging two products.
It is a tough process involving marrying two cognitive or perceptual concepts in order to create a consistent entity.
Therefore, it must begin with exploring the brand in a prospect’s mind. Exploring the brand involves seeking answers to the following questions……. : Exploring the brand involves seeking answers to the following questions……. What is a brand’s awareness level?
What are its recall and recognition levels?
What are different attributes associated with a brand?
What benefit associations are connected with a brand?
What are a brand’s personality associations?
What are the symbols associated with the brand?
What are a brand’s user associations?
What is the perceived essence of the brand?
What is a brand’s philosophy? Strength of Associations - Ponds : Strength of Associations - Ponds PONDS Talc Feminine Floral Body
care Cream Body Talc
creams Beauty cream,
cream, etc Making an Extension successful : Making an Extension successful Aaker & Keller proposed certain assumptions about consumer behaviour which are fundamentally responsible for the success of a brand extension.
The parent brand enjoys positive beliefs and favourable attitude in customers memory.
It is these pre-existing beliefs and attitudes which help in the formation of positive beliefs and favourable attitude toward the brand extension.
The negative associations are not transferred to the brand extensions, also these are not created by the brand extension. Hypothetical Brand Extensions : Hypothetical Brand Extensions Nikon film
Disney daycare centers
Haagen-Dazs chocolate syrup
Milo sports clothes
Colgate chewing gum
Fisher-Price baby shampoo
Bacardi chocolates Slide 362: Possible Extensions for the Lubriderm Brand Nivea
Cream BRAND DEFINITIONS RELATED CATEGORIES moisturizer
fragrance Soap - face cream - skin cream
sunburn - after-shave - baby
antiseptic - first-aid - hemorrhoid cream
cotton - gauze - sterile pads
emery boards - muscle toner - cotton swabs
liquid hair net - mustard - glass cleaner
perfume - room deodorizer - deodorant Category Extension Strategies : Category Extension Strategies 1. Introduce the same product in a different form
examples: Jello Pudding Pops, Starbucks coffee ice-cream 2. Introduce products containing the brand’s distinctive taste, etc.
examples: Haagen-Dazs Cream liqueur, Philadelphia Cream Cheese salad dressing 3. Introduce companion products for the brand
examples: Nikon Film, Duracell Durabeam flashlights, Colgate toothbrush 4. Introduce products relevant to customer franchise of the brand
examples: Visa Traveler’s Checks, Gerber baby bottles Category Extension Strategies : Category Extension Strategies 5. Introduce products capitalizing on the firm’s perceived expertise
examples: Honda motorcycles, Canon photocopy machines, Canon Scanner 6. Introduce products that reflect the brand’s distinctive benefit,
attribute or feature owned: examples: Nestle chocolates, Nestle chocolate milk
Dove cream, Dove deodorant (Mild and Pure) 7. Introduce products capitalizing on image or prestige of the brand
examples: Calvin Klein clothes, Porsche sunglasses Expanding Brand Meaning Through Extensions : Expanding Brand Meaning Through Extensions Nesquik Flavoring Cereals, yogurt, Fun Food
for milk chocolate sauce, for Kids
(children) postre de leche. Crayola Crayons Markers, pens Colorful Crafts
paints, pencils for Kids
clay, etc. Nestlé Condensed Baby food, Nutritious and
and powered cereales, choco- High Quality
milk lates, ice-cream, etc. Food. Gillette Razor Blades Shaving Set, Personal Care
deodorant. For Men and
Women Brand Original
Products New Brand
Meaning Questions for Assignment : Questions for Assignment Highlight atleast five brands of various product category and find out the extension opportunities of those brands.
Find out which brand can be extended far from its present product, and which can move just above the extension boundary.