LEVERAGING SECONDARY BRANDLEVERAGING SECONDARY BRANDKNOWLEDGE TO BUILD BRAND EQUITYKNOWLEDGE TO BUILD BRAND EQUITY
7.2Figure 2-9 Building Customer-Based Brand EquityBRAND BUILDING TOOLS AND OBJECTIVES CONSUMER KNOWLEDGE EFFECTS BRANDING BENEFITSChoosing Brand ElementsBrand name MemorabilityLogo MeaningfulnessSymbol AppealCharacter TransferabilityPackaging AdaptabilitySlogan ProtectabilityDeveloping Marketing ProgramsProduct Tangible and intangible benefitsPrice Value perceptionsDistribution channels Integrate”push” and “pull”Communications Mix and match optionsLeverage of Secondary AssociationsCompanyCountry of originChannel of distributionOther brandsEndorsorEventAwarenessMeaningfulnessTransferabilityPossible OutcomesGreater loyaltyLess vulnerability to competitivemarketing actions and crisesLarger marginsMore elastic response to pricedecreasesMore inelastic response to priceincreasesGreater trade cooperation andsupportIncreased marketing communicationefficiency and effectivenessPossible licensing opportunitiesMore favorable brand extensionevaluationsBrand AwarenessDepthBreadthRecallRecognitionPurchaseConsumptionBrand AssociationsStrongFavorableUniqueRelevanceConsistencyDesirableDeliverablePoint-of-parityPoint-of-difference
7.3Leveraging Secondary AssociationsLeveraging Secondary Associations Creation of new brand associationsCreation of new brand associations Effects on existing brand knowledgeEffects on existing brand knowledge Awareness and knowledge of the entityAwareness and knowledge of the entity Meaningfulness of the knowledge of the entityMeaningfulness of the knowledge of the entity Transferability of the knowledge of the entityTransferability of the knowledge of the entity
7.4Leveraging Secondary AssociationsLeveraging Secondary Associations Brand associations may themselves be linked to otherBrand associations may themselves be linked to otherentities, creating secondary associations:entities, creating secondary associations: Company (through branding strategies)Company (through branding strategies) Country of origin (through identification of product origin)Country of origin (through identification of product origin) Channels of distribution (through channels strategy)Channels of distribution (through channels strategy) Other brands (through co-branding)Other brands (through co-branding) Special case of co-branding isSpecial case of co-branding is ingredient brandingingredient branding Characters (through licensing)Characters (through licensing) Celebrity spokesperson (through endorsement advertising)Celebrity spokesperson (through endorsement advertising) Events (through sponsorship)Events (through sponsorship) Other third-party sources (through awards and reviews)Other third-party sources (through awards and reviews)
7.5Co-BrandingCo-Branding Occurs when two or more existing brands areOccurs when two or more existing brands arecombined into a joint product or are marketedcombined into a joint product or are marketedtogether in some fashiontogether in some fashion Examples:Examples: Sony EricssonSony Ericsson
7.6Ingredient BrandingIngredient Branding A special case of co-branding that involvesA special case of co-branding that involvescreating brand equity for materials,creating brand equity for materials,components, or parts that are necessarilycomponents, or parts that are necessarilycontained within other branded productscontained within other branded products Examples:Examples: Intel insideIntel inside Carl Zeiss LensCarl Zeiss Lens
7.7LicensingLicensing Involves contractual arrangements wherebyInvolves contractual arrangements wherebyfirms can use the names, logos, characters, andfirms can use the names, logos, characters, andso forth of other brands for some fixed feeso forth of other brands for some fixed fee Examples:Examples: Entertainment (Star Wars, Jurassic Park, etc.)Entertainment (Star Wars, Jurassic Park, etc.) Television and cartoon characters (The Simpsons)Television and cartoon characters (The Simpsons) Designer apparel and accessories (Calvin Klein,Designer apparel and accessories (Calvin Klein,Pierre Cardin, etc.)Pierre Cardin, etc.)
7.8Celebrity EndorsementCelebrity Endorsement Draws attention to the brandDraws attention to the brand Shapes the perceptions of the brandShapes the perceptions of the brand Celebrity should have a high level of visibilityCelebrity should have a high level of visibilityand a rich set of useful associations, judgments,and a rich set of useful associations, judgments,and feelingsand feelings Q-Ratings to evaluate celebritiesQ-Ratings to evaluate celebrities
7.9Sporting, Cultural, or Other EventsSporting, Cultural, or Other Events Sponsored events can contribute to brand equitySponsored events can contribute to brand equityby becoming associated to the brand andby becoming associated to the brand andimproving brand awareness, adding newimproving brand awareness, adding newassociations, or improving the strength,associations, or improving the strength,favorability, and uniqueness of existingfavorability, and uniqueness of existingassociations.associations. The main means by which an event can transferThe main means by which an event can transferassociations is credibility.associations is credibility.
8.10DEVELOPING A BRAND EQUITYDEVELOPING A BRAND EQUITYMEASUREMENT AND MANAGEMENT SYSTEMMEASUREMENT AND MANAGEMENT SYSTEM
8.11The New AccountabilityThe New Accountability Virtually every marketing dollar spent todayVirtually every marketing dollar spent todaymust be justified as both effective and efficientmust be justified as both effective and efficientin terms of “return of marketing investment”in terms of “return of marketing investment”(ROMI).(ROMI). Some observers believe that up to 70% (or evenSome observers believe that up to 70% (or evenmore) of marketing expenditures may bemore) of marketing expenditures may bedevoted to programs and activities that cannotdevoted to programs and activities that cannotbe linked to short-term incremental profits, butbe linked to short-term incremental profits, butyet can be seen as improving brand equity.yet can be seen as improving brand equity.
8.12The Brand Value ChainThe Brand Value Chain Broader perspective than just the CBBE modelBroader perspective than just the CBBE model The brand value chain is a structured approachThe brand value chain is a structured approachto assessing the sources and outcomes of brandto assessing the sources and outcomes of brandequity and the manner by which marketingequity and the manner by which marketingactivities create brand value.activities create brand value.
8.14Brand Equity Measurement SystemBrand Equity Measurement System A set of research procedures that is designedA set of research procedures that is designedto provide timely, accurate, and actionableto provide timely, accurate, and actionableinformation for marketers so that they can makeinformation for marketers so that they can makethe best possible tactical decisions in the shortthe best possible tactical decisions in the shortrun and strategic decisions in the long runrun and strategic decisions in the long run
8.15Brand Equity Measurement SystemBrand Equity Measurement System Conducting brand auditsConducting brand audits Developing tracking proceduresDeveloping tracking procedures Designing a brand equity management systemDesigning a brand equity management system
8.16Designing Brand Tracking StudiesDesigning Brand Tracking Studies Tracking studies involve information collectedTracking studies involve information collectedfrom consumers on a routine basis over timefrom consumers on a routine basis over time Often done on a “continuous” basisOften done on a “continuous” basis Provide descriptive and diagnostic informationProvide descriptive and diagnostic information
8.17What to TrackWhat to Track Customize tracking surveys to address theCustomize tracking surveys to address thespecific issues faced by the brandspecific issues faced by the brand Product-brand trackingProduct-brand tracking Corporate or family brand trackingCorporate or family brand tracking Global trackingGlobal tracking
8.18How to Conduct Tracking StudiesHow to Conduct Tracking Studies Who to track (target market)Who to track (target market) When and where to track (how frequently)When and where to track (how frequently) How to interpret brand trackingHow to interpret brand tracking
8.19Brand Equity Management SystemBrand Equity Management System AA brand equity management systembrand equity management system is a set ofis a set oforganizational processes designed to improveorganizational processes designed to improvethe understanding and use of the brand equitythe understanding and use of the brand equityconcept within a firm:concept within a firm: Brand equity charterBrand equity charter Brand equity reportBrand equity report Brand equity responsibilitiesBrand equity responsibilities
8.20Brand Equity CharterBrand Equity Charter Provides general guidelines to marketingProvides general guidelines to marketingmanagers within the company as well as keymanagers within the company as well as keymarketing partners outside the companymarketing partners outside the company Should be updated annuallyShould be updated annually
8.21Brand Equity Charter ComponentsBrand Equity Charter Components Define the firm’s view of the brand equityDefine the firm’s view of the brand equity Describe the scope of the key brandsDescribe the scope of the key brands Specify actual and desired equity for the brandSpecify actual and desired equity for the brand Explain how brand equity is measuredExplain how brand equity is measured Suggest how brand equity should be measuredSuggest how brand equity should be measured Outline how marketing programs should be devisedOutline how marketing programs should be devised Specify the proper treatment for the brand in terms ofSpecify the proper treatment for the brand in terms oftrademark usage, packaging, and communicationtrademark usage, packaging, and communication
8.22Brand Equity ReportBrand Equity Report Assembles the results of the tracking survey andAssembles the results of the tracking survey andother relevant performance measuresother relevant performance measures To be developed monthly, quarterly, or annuallyTo be developed monthly, quarterly, or annually Provides descriptive information as to what isProvides descriptive information as to what ishappening with the brand as well as diagnostichappening with the brand as well as diagnosticinformation on why it is happeninginformation on why it is happening
8.23Brand Equity ResponsibilitiesBrand Equity Responsibilities Organizational responsibilities and processesOrganizational responsibilities and processesthat aim to maximize long-term brand equitythat aim to maximize long-term brand equity Establish position of VP or Director of EquityEstablish position of VP or Director of EquityManagement to oversee implementation of BrandManagement to oversee implementation of BrandEquity Charter and ReportsEquity Charter and Reports Ensure that, as much as possible, marketing ofEnsure that, as much as possible, marketing ofthe brand is done in a way that reflects the spiritthe brand is done in a way that reflects the spiritof the charter and the substance of the reportof the charter and the substance of the report
9.24MEASURING SOURCES OF BRAND EQUITY:MEASURING SOURCES OF BRAND EQUITY:CAPURING CUSTOMER MINDSETCAPURING CUSTOMER MINDSET
9.25Qualitative Research TechniquesQualitative Research Techniques Free associationFree association What do you like best about the brand? What are itsWhat do you like best about the brand? What are itspositive aspects?positive aspects? What do you dislike? What are its disadvantages?What do you dislike? What are its disadvantages? What do you find unique about the brand? How is itWhat do you find unique about the brand? How is itdifferent from other brands? In what ways is it thedifferent from other brands? In what ways is it thesame?same?
9.26Free AssociationsFree AssociationsLEVI’S501High quality, long lasting,and durableBlue denim, shrink-to-fitcotton fabric, button-fly,two-horse patch,and small red pocket tagFeelings of self-confidenceand self-assuranceComfortable fittingand relaxing to wearHonest, classic,Contemporary, approachable,independent, and universalAppropriate for outdoorwork and casual socialsituationsWestern, American,blue collar, hard-working,traditional, strong,rugged, and masculineBENEFITSATTRIBUTESSymbolicUsage ImageryUser ImageryBrand PersonalityFunctionalProduct-RelatedExperiential
9.27Qualitative Research TechniquesQualitative Research Techniques Projective techniquesProjective techniques Diagnostic tools to uncover the true opinions andDiagnostic tools to uncover the true opinions andfeelings of consumers when they are unwilling orfeelings of consumers when they are unwilling orotherwise unable to express themselves on theseotherwise unable to express themselves on thesemattersmatters
9.28Projective TechniquesProjective Techniques Consumers might feel that it would be sociallyConsumers might feel that it would be sociallyunacceptable to express their true feelingsunacceptable to express their true feelings Projective techniques are diagnostic tools toProjective techniques are diagnostic tools touncover the true opinions and feelings ofuncover the true opinions and feelings ofconsumersconsumers Examples:Examples: Completion and interpretation tasksCompletion and interpretation tasks Comparison tasksComparison tasks
9.29Brand Personality and ValuesBrand Personality and Values Brand personalityBrand personality refers to the human characteristicsrefers to the human characteristicsor traits that can be attributed to a brand.or traits that can be attributed to a brand. The Big FiveThe Big Five Sincerity (down-to-earth, wholesome, and cheerful)Sincerity (down-to-earth, wholesome, and cheerful) Excitement (daring, spirited, imaginative, and up-to-Excitement (daring, spirited, imaginative, and up-to-date)date) Competence (reliable, intelligent, and successful)Competence (reliable, intelligent, and successful) Sophistication (upper class and charming)Sophistication (upper class and charming) Ruggedness (outdoorsy and tough)Ruggedness (outdoorsy and tough)Jennifer Aaker, 1997Jennifer Aaker, 1997
9.30Experiential MethodsExperiential Methods By tapping more directly into their actual home, work,By tapping more directly into their actual home, work,or shopping behaviors, researchers might be able toor shopping behaviors, researchers might be able toelicit more meaningful responses from consumers.elicit more meaningful responses from consumers. Advocates of the experiential approach have sentAdvocates of the experiential approach have sentresearchers to consumers’ homes in the morning to seeresearchers to consumers’ homes in the morning to seehow they approach their days, given business travelershow they approach their days, given business travelersPolaroid cameras and diaries to capture their feelingsPolaroid cameras and diaries to capture their feelingswhen in hotel rooms, and conducted “beeper studies”when in hotel rooms, and conducted “beeper studies”in which participants are instructed to write down whatin which participants are instructed to write down whatthey’re doing when they are paged.they’re doing when they are paged.
9.31Quantitative Research TechniquesQuantitative Research Techniques AwarenessAwareness ImageImage Brand responsesBrand responses Brand relationshipsBrand relationships
9.32AwarenessAwareness RecognitionRecognition Ability of consumers to identify the brand (and itsAbility of consumers to identify the brand (and itselements) under various circumstanceselements) under various circumstances RecallRecall Ability of consumers to retrieve the actual brandAbility of consumers to retrieve the actual brandelements from memoryelements from memory Unaided vs. aided recallUnaided vs. aided recall
9.33AwarenessAwareness Corrections for guessingCorrections for guessing Any research measure must consider the issue of consumersAny research measure must consider the issue of consumersmaking up responses or guessing.making up responses or guessing. Strategic implicationsStrategic implications The advantage of aided recall measures is that they yieldThe advantage of aided recall measures is that they yieldinsight into how brand knowledge is organized in memoryinsight into how brand knowledge is organized in memoryand what kind of cues or reminders may be necessary forand what kind of cues or reminders may be necessary forconsumers to be able to retrieve the brand from memory.consumers to be able to retrieve the brand from memory. The important point to note is that the category structure thatThe important point to note is that the category structure thatexists in consumers’ minds—as reflected by brand recallexists in consumers’ minds—as reflected by brand recallperformance—can have profound implications for consumerperformance—can have profound implications for consumerchoice and marketing strategy.choice and marketing strategy.
9.34ImageImage Ask open-ended questions to tap into theAsk open-ended questions to tap into thestrength, favorability, and uniqueness of brandstrength, favorability, and uniqueness of brandassociations.associations. These associations should be rated on scales forThese associations should be rated on scales forquantitative analysis.quantitative analysis.
9.35Brand ResponsesBrand Responses Research in psychology suggests that purchaseResearch in psychology suggests that purchaseintentions are most likely to be predictive of actualintentions are most likely to be predictive of actualpurchase when there is correspondence between thepurchase when there is correspondence between thetwo in the following categories:two in the following categories: Purchase IntentionsPurchase Intentions Action (buying for own use or to give as a gift)Action (buying for own use or to give as a gift) Target (specific type of product and brand)Target (specific type of product and brand) Context (in what type of store based on what prices andContext (in what type of store based on what prices andother conditions)other conditions) Time (within a week, month, or year)Time (within a week, month, or year)
9.37Brand DynamicsBrand Dynamics The Brand Dynamics model adopts aThe Brand Dynamics model adopts ahierarchical approach to determine the strengthhierarchical approach to determine the strengthof relationship a consumer has with a brand.of relationship a consumer has with a brand. The five levels of the model are:The five levels of the model are: PresencePresence RelevanceRelevance PerformancePerformance AdvantageAdvantage BondingBonding
9.38Equity EnginesEquity Engines This model delineates three key dimensions of brandThis model delineates three key dimensions of brandaffinityaffinity——the emotional and intangible benefits of athe emotional and intangible benefits of abrandbrand——as follows:as follows: Authority:Authority: The reputation of a brand, whether as a long-The reputation of a brand, whether as a long-standing leader or as a pioneer in innovationstanding leader or as a pioneer in innovation Identification:Identification: The closeness customers feel for a brand andThe closeness customers feel for a brand andhow well they feel the brand matches their personal needshow well they feel the brand matches their personal needs Approval:Approval: The way a brand fits into the wider social matrixThe way a brand fits into the wider social matrixand the intangible status it holds for experts and friendsand the intangible status it holds for experts and friends
9.39Four Primary AspectsFour Primary AspectsHow Brands Are BuiltHow Brands Are BuiltKnowledge• The culmination of brand building efforts;acquisition of consumer experienceEsteem • Consumer respect, regard, reputation; afulfillment of perceived consumer promiseRelevance • Relates to usage and subsumes the five Ps ofmarketing; relates to saleDifferentiation • The basis for consumer choice; the essence ofthe brand, source of margin
9.40Room to grow...Brand has power to build relevance.D > R0102030405060708090100Differentiation RelevanceHealthy Brands Have GreaterHealthy Brands Have GreaterDifferentiation than RelevanceDifferentiation than RelevanceExamples:Harley DavidsonYahoo!AOLWilliams-SonomaIkeaBloomberg Business News
9.41R > D0102030405060708090100Differentiation RelevanceUniqueness has faded; price becomesdominant reason to buy.Brands with greater Relevance than DifferentiationBrands with greater Relevance than DifferentiationAre in Danger of Becoming CommoditiesAre in Danger of Becoming CommoditiesExamples:ExxonMott’sMcDonald’sCrestMinute MaidFruit of the LoomPeter Pan (peanut butter)
9.42E > K0102030405060708090100Esteem KnowledgeBrand is better liked than known.More Esteem than Knowledge Means, “I’dMore Esteem than Knowledge Means, “I’dlike to get to know you better”like to get to know you better”Examples:Coach leatherwearTag HeuerCalphalonMovadoBlaupunktPella WindowsPalm PilotTechnics
9.43K > E0102030405060708090100Esteem KnowledgeBrand is better known than liked.Too Much Knowledge Can Be Dangerous:Too Much Knowledge Can Be Dangerous:“I know you and you’re nothing special”“I know you and you’re nothing special”Examples:PlymouthTV GuideSpamWoolworthsChryslerMaxwell HouseNationalEnquirerSanka
11.44DESIGNING AND IMPLEMENTINGDESIGNING AND IMPLEMENTINGBRANDING STRATEGIESBRANDING STRATEGIES
11.45Branding strategyBranding strategy Branding strategy is critical because it is theBranding strategy is critical because it is themeans by which the firm can help consumersmeans by which the firm can help consumersunderstand its products and services andunderstand its products and services andorganize them in their minds.organize them in their minds. Two important strategic tools: TheTwo important strategic tools: The brand-productbrand-productmatrixmatrix and theand the brand hierarchybrand hierarchy help to characterizehelp to characterizeand formulate branding strategies by definingand formulate branding strategies by definingvarious relationships among brands andvarious relationships among brands andproducts.products.
11.46The role of Brand ArchitectureThe role of Brand Architecture Clarify: brand awarenessClarify: brand awareness Improve consumer understanding and communicateImprove consumer understanding and communicatesimilarity and differences between individualsimilarity and differences between individualproductsproducts Motivate: brand imageMotivate: brand image Maximize transfer of equity to/from the brand toMaximize transfer of equity to/from the brand toindividual products to improve trial and repeatindividual products to improve trial and repeatpurchasepurchase
11.47Brand-Product MatrixBrand-Product Matrix Must define:Must define: Brand-Product relationships (rows)Brand-Product relationships (rows) Line and category extensionsLine and category extensions Product-Brand relationships (columns)Product-Brand relationships (columns) Brand portfolioBrand portfolio1 2 3 4ABCProductsBrands
11.48Important DefinitionsImportant Definitions Product lineProduct line A group pf products within a product category thatA group pf products within a product category thatare closely relatedare closely related Product mix (product assortment)Product mix (product assortment) The set of all product lines and items that aThe set of all product lines and items that aparticular seller makes available to buyersparticular seller makes available to buyers Brand mix (brand assortment)Brand mix (brand assortment) The set of all brand lines that a particular sellerThe set of all brand lines that a particular sellermakes available to buyersmakes available to buyers
11.49Depth of a Branding StrategyDepth of a Branding Strategy The number and nature of different brandsThe number and nature of different brandsmarketed in the product class sold by a firmmarketed in the product class sold by a firm Referred to asReferred to as brand portfoliobrand portfolio The reason is to pursue different marketThe reason is to pursue different marketsegments, different channels of distribution, orsegments, different channels of distribution, ordifferent geographic boundariesdifferent geographic boundaries Maximize market coverage and minimize brandMaximize market coverage and minimize brandoverlapoverlap
11.50Designing a Brand PortfolioDesigning a Brand Portfolio Basic principles:Basic principles: Maximize market coverageMaximize market coverage so that no potentialso that no potentialcustomers are being ignoredcustomers are being ignored Minimize brand overlapMinimize brand overlap so that brands aren’tso that brands aren’tcompeting among themselves to gain the samecompeting among themselves to gain the samecustomer’s approvalcustomer’s approval
11.51Brand Roles in the PortfolioBrand Roles in the Portfolio FlankersFlankers Cash cowsCash cows Low-end entry-levelLow-end entry-level High-end prestige brandsHigh-end prestige brands
11.52Brand HierarchyBrand Hierarchy A means of summarizing the branding strategyA means of summarizing the branding strategyby displaying the number and nature ofby displaying the number and nature ofcommon and distinctive brand elements acrosscommon and distinctive brand elements acrossthe firm’s products, revealing the explicitthe firm’s products, revealing the explicitordering of brand elementsordering of brand elements A useful means of graphically portraying aA useful means of graphically portraying afirm’s branding strategyfirm’s branding strategy
11.54Number of Hierarchy LevelsNumber of Hierarchy Levels Principle of simplicityPrinciple of simplicity Employ as few levels as possibleEmploy as few levels as possible Principle of clarityPrinciple of clarity Logic and relationship of all brand elementsLogic and relationship of all brand elementsemployed must be obvious and transparentemployed must be obvious and transparent
11.55Corporate Brand CampaignCorporate Brand Campaign Different objectives are possible:Different objectives are possible: Build awareness of the company and the nature of itsBuild awareness of the company and the nature of itsbusinessbusiness Create favorable attitudes and perceptions of companyCreate favorable attitudes and perceptions of companycredibilitycredibility Link beliefs that can be leveraged by product-specificLink beliefs that can be leveraged by product-specificmarketingmarketing Make a favorable impression on the financial communityMake a favorable impression on the financial community Motivate present employees and attract better recruitsMotivate present employees and attract better recruits Influence public opinion on issuesInfluence public opinion on issues
12.56INTRODUCING AND NAMING NEW PRODUCTSINTRODUCING AND NAMING NEW PRODUCTSAND BRAND EXTENSIONSAND BRAND EXTENSIONS
12.57Leverage the BrandLeverage the Brand Firms are seeking to build “power” or “mega”Firms are seeking to build “power” or “mega”brands that establish a broad market footprint,brands that establish a broad market footprint,appealing to multiple customer segments withappealing to multiple customer segments withmultiple products all underneath the brandmultiple products all underneath the brandumbrella.umbrella.
12.59Brand ExtensionsBrand Extensions When a firm uses an established brand name toWhen a firm uses an established brand name tointroduce a new productintroduce a new product Brand extension classificationBrand extension classification Line extensionLine extension Using a sub-brand to target a new market segment withinUsing a sub-brand to target a new market segment withinthe same product categorythe same product category Category extensionCategory extension Using the parent brand in a different product categoryUsing the parent brand in a different product category
12.60Advantages of ExtensionsAdvantages of Extensions Facilitate new product acceptanceFacilitate new product acceptance Improve brand imageImprove brand image Reduce risk perceived by customersReduce risk perceived by customers Increase the probability of gaining distribution and trialIncrease the probability of gaining distribution and trial Increase efficiency of promotional expendituresIncrease efficiency of promotional expenditures Reduce costs of introductory and follow-up marketingReduce costs of introductory and follow-up marketingprogramsprograms Avoid cost of developing a new brandAvoid cost of developing a new brand Allow for packaging and labeling efficienciesAllow for packaging and labeling efficiencies Permit consumer variety seekingPermit consumer variety seeking
12.61Advantages of Extensions (Cont.)Advantages of Extensions (Cont.) Provide feedback benefits to parent brandProvide feedback benefits to parent brand Clarify brand meaningClarify brand meaning Enhance the parent brand imageEnhance the parent brand image Bring new customers into brand franchise andBring new customers into brand franchise andincrease market coverageincrease market coverage Revitalize the brandRevitalize the brand Permit subsequent extensionsPermit subsequent extensions
12.62Disadvantages of ExtensionsDisadvantages of Extensions Can confuse or frustrate consumersCan confuse or frustrate consumers Can encounter retailer resistanceCan encounter retailer resistance Can fail and hurt parent brand imageCan fail and hurt parent brand image Can succeed but cannibalize sales of parent brandCan succeed but cannibalize sales of parent brand Can succeed but diminish identification with any oneCan succeed but diminish identification with any onecategorycategory Can succeed but hurt the image of the parent brandCan succeed but hurt the image of the parent brand Can dilute brand meaningCan dilute brand meaning Can cause the company to forgo the chance to develop aCan cause the company to forgo the chance to develop anew brandnew brand
12.63Successful ExtensionsSuccessful Extensions Must create points-of-parity and points-of-Must create points-of-parity and points-of-difference in extension categorydifference in extension category Must recognize competitive reactionsMust recognize competitive reactions Must enhance points-of-parity and points-of-Must enhance points-of-parity and points-of-difference of parent branddifference of parent brand Must maximize the advantages and minimizeMust maximize the advantages and minimizethe disadvantages of brand extensionsthe disadvantages of brand extensions
12.64When are brand extensions appropriate?When are brand extensions appropriate? If they see some basis of “fit” or similarityIf they see some basis of “fit” or similaritybetween the proposed extension and parentbetween the proposed extension and parentbrandbrand The major mistake in evaluating extensionThe major mistake in evaluating extensionopportunities is failing to take all of consumers’opportunities is failing to take all of consumers’brand knowledge structures into account.brand knowledge structures into account. Often, marketers mistakenly focus on only oneOften, marketers mistakenly focus on only onebrand association and ignore other potentiallybrand association and ignore other potentiallyimportant brand associations in the process.important brand associations in the process.
13.65MANAGING BRANDS OVER TIMEMANAGING BRANDS OVER TIME
13.66Reinforcing BrandsReinforcing Brands Generally, we reinforce brand equity byGenerally, we reinforce brand equity bymarketing actions that consistently convey themarketing actions that consistently convey themeaning of the brand to consumers in terms ofmeaning of the brand to consumers in terms ofbrand awareness and brand image.brand awareness and brand image.
13.67Managing Brands over TimeManaging Brands over Time Effective brand management requires taking aEffective brand management requires taking along-term view of marketing decisionslong-term view of marketing decisions Any action that a firm takes as part of its marketingAny action that a firm takes as part of its marketingprogram has the potential to change consumerprogram has the potential to change consumerknowledge about the brand.knowledge about the brand. These changes in consumer brand knowledge fromThese changes in consumer brand knowledge fromcurrent marketing activity also will have an indirectcurrent marketing activity also will have an indirecteffect on the success ofeffect on the success of futurefuture marketing activities.marketing activities.
13.69Entering New MarketsEntering New Markets One strategic option for revitalizing a fadingOne strategic option for revitalizing a fadingbrand is simply to more or less abandon thebrand is simply to more or less abandon theconsumer group that supported the brand inconsumer group that supported the brand inthe past to target a completely new marketthe past to target a completely new marketsegment.segment.
13.70Adjustments to Brand PortfolioAdjustments to Brand Portfolio Migration strategiesMigration strategies A corporate or family branding strategy in which brands areA corporate or family branding strategy in which brands areordered in a logical manner could provide the hierarchicalordered in a logical manner could provide the hierarchicalstructure in consumers’ minds to facilitate brand migration.structure in consumers’ minds to facilitate brand migration. Example: BMW with its 3-, 5-, and 7-series numbering systemsExample: BMW with its 3-, 5-, and 7-series numbering systems Acquiring new customersAcquiring new customers Tradeoffs in their marketing efforts between attracting newTradeoffs in their marketing efforts between attracting newcustomers and retaining existing onescustomers and retaining existing ones Firms must proactively develop strategies to attract newFirms must proactively develop strategies to attract newcustomers, especially younger ones.customers, especially younger ones. Retiring brandsRetiring brands
14.71MANAGING BRANDS OVER GEOGRAPHICMANAGING BRANDS OVER GEOGRAPHICBOUNDARIES AND MARKET SEGMENTSBOUNDARIES AND MARKET SEGMENTS
14.72Regional Market SegmentsRegional Market Segments Regionalization is an important recent trend that,Regionalization is an important recent trend that,perhaps on the surface, seems to run counter toperhaps on the surface, seems to run counter toglobalization.globalization. Reasons for regional marketingReasons for regional marketing Need for more focused targetingNeed for more focused targeting The shift from national advertising to sales promotionsThe shift from national advertising to sales promotions DrawbacksDrawbacks Production headachesProduction headaches Marketing efficiency may suffer and costs may riseMarketing efficiency may suffer and costs may rise
14.73Rationale for Going InternationalRationale for Going International Perception of slow growth and increasedPerception of slow growth and increasedcompetition in domestic marketscompetition in domestic markets Belief in enhanced overseas growth and profitBelief in enhanced overseas growth and profitopportunitiesopportunities Desire to reduce costs from economies of scaleDesire to reduce costs from economies of scale Need to diversify riskNeed to diversify risk Recognition of global mobility of customersRecognition of global mobility of customers
14.74Advantages ofAdvantages ofGlobal Marketing ProgramsGlobal Marketing Programs Economies of scale in production and distributionEconomies of scale in production and distribution Lower marketing costsLower marketing costs Power and scopePower and scope Consistency in brand imageConsistency in brand image Ability to leverage good ideas quickly andAbility to leverage good ideas quickly andefficientlyefficiently Uniformity of marketing practicesUniformity of marketing practices
14.75Disadvantages ofDisadvantages ofGlobal Marketing ProgramsGlobal Marketing Programs Differences in consumer needs, wants, and usageDifferences in consumer needs, wants, and usagepatterns for productspatterns for products Differences in brand and product developmentDifferences in brand and product developmentand the competitive environmentand the competitive environment Differences in the legal environmentDifferences in the legal environment Differences in marketing institutionsDifferences in marketing institutions Differences in administrative proceduresDifferences in administrative procedures
14.76Standardization vs. CustomizationStandardization vs. Customization According to Levitt, because the world is shrinkingAccording to Levitt, because the world is shrinking—due to leaps in technology, communication, and—due to leaps in technology, communication, andso forth—well-managed companies should shiftso forth—well-managed companies should shifttheir emphasis from customizing items to offeringtheir emphasis from customizing items to offeringglobally standardized products that are advanced,globally standardized products that are advanced,functional, reliable, and low priced for all.functional, reliable, and low priced for all.
14.77Standardization vs. CustomizationStandardization vs. Customization Blending global objectives with local or regionalBlending global objectives with local or regionalconcernsconcerns ““Think global. Act local.”Think global. Act local.” A global brand has a clear consistent equity acrossA global brand has a clear consistent equity acrossgeographies: same positioning, same benefits plusgeographies: same positioning, same benefits pluslocal tailoring if neededlocal tailoring if needed
14.78Global Brand StrategyGlobal Brand StrategyTo build brand equity, it is often necessary to createTo build brand equity, it is often necessary to createdifferent marketing programs to address different marketdifferent marketing programs to address different marketsegments.segments. Identify differences in consumer behaviorIdentify differences in consumer behavior How they purchase and use productsHow they purchase and use products What they know and feel about brandsWhat they know and feel about brands Adjust branding programAdjust branding program Choice of brand elementsChoice of brand elements Nature of supporting marketing programNature of supporting marketing program Leverage of secondary associationsLeverage of secondary associations
14.79Building a Global BrandBuilding a Global Brand How valid is the mental map in the newHow valid is the mental map in the newmarket?market? What is the level of awareness?What is the level of awareness? How valuable are the associations?How valuable are the associations? What changes need to be made to the mentalWhat changes need to be made to the mentalmap?map? By what means should this new mental map beBy what means should this new mental map becreated?created?
14.80Global Customer-Based BrandGlobal Customer-Based BrandEquityEquity To build customer-based brand equity,To build customer-based brand equity,marketers must:marketers must:1.1. Establish breadth and depth of brand awarenessEstablish breadth and depth of brand awareness2.2. Create points-of-parity and points-of-differenceCreate points-of-parity and points-of-difference3.3. Elicit positive, accessible brand responsesElicit positive, accessible brand responses4.4. Forge intense, active brand relationshipsForge intense, active brand relationships Achieving these four steps, in turn, requiresAchieving these four steps, in turn, requiresestablishing six core brand building blocks.establishing six core brand building blocks.
14.82Questions for Global BrandingQuestions for Global BrandingPositioningPositioning How valid is the mental map in the new market? HowHow valid is the mental map in the new market? Howappropriate is the positioning? What is the existing levelappropriate is the positioning? What is the existing levelof awareness? How valuable are the core brandof awareness? How valuable are the core brandassociations, points-of-parity, and points-of-difference?associations, points-of-parity, and points-of-difference? What changes should we make to the positioning? DoWhat changes should we make to the positioning? Dowe need to create any new associations? Should wewe need to create any new associations? Should we notnotre-create any existing associations? Should we modifyre-create any existing associations? Should we modifyany existing associations?any existing associations? How should we create this new mental map? Can weHow should we create this new mental map? Can westill use the same marketing activities? What changesstill use the same marketing activities? What changesshould we make? What new marketing activities areshould we make? What new marketing activities arenecessary?necessary?
14.83Building Global Customer-BasedBuilding Global Customer-BasedBrand EquityBrand Equity In designing and implementing a marketingIn designing and implementing a marketingprogram to create a strong global brand,program to create a strong global brand,marketers want to realize the advantages of amarketers want to realize the advantages of aglobal marketing program while suffering as fewglobal marketing program while suffering as fewof its disadvantages as possibleof its disadvantages as possible
14.84Ten Commandments of Global BrandingTen Commandments of Global Branding1.1. Understand similarities and differences in the globalUnderstand similarities and differences in the globalbranding landscapebranding landscape2.2. Don’t take shortcuts in brand buildingDon’t take shortcuts in brand building3.3. Establish marketing infrastructureEstablish marketing infrastructure4.4. Embrace integrated marketing communicationsEmbrace integrated marketing communications5.5. Cultivate brand partnershipsCultivate brand partnerships6.6. Balance standardization and customizationBalance standardization and customization7.7. Balance global and local controlBalance global and local control8.8. Define operable guidelinesDefine operable guidelines9.9. Implement a global brand equity measurement systemImplement a global brand equity measurement system10.10. Leverage brand elementsLeverage brand elements
15.87Summary of Customer-Based BrandSummary of Customer-Based BrandEquity FrameworkEquity Framework Sources of brand equitySources of brand equity StrengthStrength FavorabilityFavorability UniquenessUniqueness Outcomes of brand equityOutcomes of brand equity Greater loyaltyGreater loyalty Less vulnerability to competitive marketing actionsLess vulnerability to competitive marketing actions Less vulnerability to marketing crisesLess vulnerability to marketing crises Larger marginsLarger margins More inelastic consumer response to price increasesMore inelastic consumer response to price increases More elastic consumer response to price decreasesMore elastic consumer response to price decreases Greater trade cooperation and supportGreater trade cooperation and support Increased marketing communication effectivenessIncreased marketing communication effectiveness Possible licensing opportunitiesPossible licensing opportunities Additional brand extension opportunitiesAdditional brand extension opportunities
15.88Tactical GuidelinesTactical Guidelines Building brand equityBuilding brand equity1.1. Through the initial choice of the brand elementsThrough the initial choice of the brand elementsmaking up the brandmaking up the brand2.2. Through marketing activities and the design of theThrough marketing activities and the design of themarketing programmarketing program3.3. Through the leverage of secondary associationsThrough the leverage of secondary associationsthat link the brand to other entitiesthat link the brand to other entities
15.89Guidelines for Building Brand EquityGuidelines for Building Brand Equity Mix and match brand elements Create a rich brand image and high perceivedquality Adopt value-based pricing strategy Consider a range of distribution options Mix marketing communication options Leverage secondary associations
15.90Importance of Complementarity andImportance of Complementarity andConsistencyConsistency CComplementarityomplementarity means choosing different brandmeans choosing different brandelements and supporting marketing activities so thatelements and supporting marketing activities so thatthe potential contribution to brand equity of onethe potential contribution to brand equity of onecompensates for the shortcomings of others.compensates for the shortcomings of others. A high degree ofA high degree of consistencyconsistency across these elements helpsacross these elements helpsto create the highest level of awareness and theto create the highest level of awareness and thestrongest and most favorable associations possible.strongest and most favorable associations possible.
15.91Guidelines for Measuring Brand EquityGuidelines for Measuring Brand Equity Formalize the firm’s view of brand equity Conduct brand inventories Conduct consumer tracking studies Assemble results of outcome measures Establish a department to oversee theimplementation
15.92Guidelines for Managing Brand EquityGuidelines for Managing Brand Equity Define brand hierarchy Create global associations Introduce brand extensions Clearly establish the roles of brands in theportfolio Reinforce brand equity over time Enhance brand equity over time Identify differences in consumer behavior indifferent market segments
15.93Characteristics of Strong BrandsCharacteristics of Strong BrandsManagersManagers Understand brand meaning and market appropriate products in anUnderstand brand meaning and market appropriate products in anappropriate mannerappropriate manner Properly position the brandProperly position the brand Provide superior delivery of desired benefitsProvide superior delivery of desired benefits Employ a full range of complementary brand elements andEmploy a full range of complementary brand elements andsupporting marketing activitiessupporting marketing activities Embrace integrated marketing communications and communicateEmbrace integrated marketing communications and communicatewith a consistent voicewith a consistent voice Measure consumer perceptions of value and develop a pricingMeasure consumer perceptions of value and develop a pricingstrategy accordinglystrategy accordingly Establish credibility and appropriate brand personality and imageryEstablish credibility and appropriate brand personality and imagery Maintain innovation and relevance for the brandMaintain innovation and relevance for the brand Strategically design and implement a brand hierarchy and brandStrategically design and implement a brand hierarchy and brandportfolioportfolio Implement a brand equity management system to ensure thatImplement a brand equity management system to ensure thatmarketing actions properly reflect the brand equity conceptmarketing actions properly reflect the brand equity concept
15.94Seven Deadly Sins of Brand ManagementSeven Deadly Sins of Brand Management1.1. Failure to understand the full meaning of theFailure to understand the full meaning of thebrandbrand2.2. Failure to live up to the brand promiseFailure to live up to the brand promise3.3. Failure to adequately support the brandFailure to adequately support the brand4.4. Failure to be patient with the brandFailure to be patient with the brand5.5. Failure to adequately control the brandFailure to adequately control the brand6.6. Failure to properly balance consistency andFailure to properly balance consistency andchange with the brandchange with the brand7.7. Failure to understand complexity of brandFailure to understand complexity of brandequity measurement and managementequity measurement and management
15.95Industrial and B2B BrandingIndustrial and B2B Branding Adopt a corporate or family branding strategyAdopt a corporate or family branding strategy Link non-product-related imagery associationsLink non-product-related imagery associations Employ full range of marketing communicationEmploy full range of marketing communicationoptionsoptions Leverage equity of other companies that areLeverage equity of other companies that arecustomerscustomers Segment markets carefully and develop tailoredSegment markets carefully and develop tailoredbranding and marketing programsbranding and marketing programs
15.96Guidelines for High-Tech BrandingGuidelines for High-Tech Branding Establish brand awareness and rich brand imageEstablish brand awareness and rich brand image Create corporate credibility associationsCreate corporate credibility associations Leverage secondary associations of qualityLeverage secondary associations of quality Avoid overbranding productsAvoid overbranding products Selectively introduce new products as newSelectively introduce new products as newbrands and clearly identify the nature of brandbrands and clearly identify the nature of brandextensionsextensions
15.97Guidelines for Service BrandingGuidelines for Service Branding Maximize service qualityMaximize service quality Employ a full range of brand elements to enhanceEmploy a full range of brand elements to enhancebrand recallbrand recall Create and communicate strong organizationalCreate and communicate strong organizationalassociationsassociations Design corporate communication programs thatDesign corporate communication programs thataugment consumers’ service encounters andaugment consumers’ service encounters andexperiencesexperiences Establish a brand hierarchy using distinct family orEstablish a brand hierarchy using distinct family orindividual brands as well as meaningful ingredientindividual brands as well as meaningful ingredientbrandsbrands
15.98Guidelines for Branding RetailersGuidelines for Branding Retailers Create a brand hierarchy consisting of the storeCreate a brand hierarchy consisting of the storeas a whole as well as individual departmentsas a whole as well as individual departments Enhance the manufacturer’s brand equity byEnhance the manufacturer’s brand equity bycommunicating PODscommunicating PODs Establish brand equity at all levels of the brandEstablish brand equity at all levels of the brandhierarchyhierarchy Create multichannel shopping experienceCreate multichannel shopping experience Avoid overbrandingAvoid overbranding
15.99Guidelines for Small Business BrandingGuidelines for Small Business Branding Emphasize building one or two strong brandsEmphasize building one or two strong brands Focus the marketing program on one or two keyFocus the marketing program on one or two keyassociationsassociations Employ a well-integrated set of brand elements thatEmploy a well-integrated set of brand elements thatenhances both brand awareness and imageenhances both brand awareness and image Design creative brand-building push campaignsDesign creative brand-building push campaigns Leverage as many secondary associations asLeverage as many secondary associations aspossiblepossible
15.100Guidelines for Online BrandingGuidelines for Online Branding Don’t forget the brand building basicsDon’t forget the brand building basics Create strong brand identityCreate strong brand identity Generate strong consumer pullGenerate strong consumer pull Selectively choose brand partnershipsSelectively choose brand partnerships Maximize relationship marketingMaximize relationship marketing
15.101Future Brand PrioritiesFuture Brand Priorities How will branding change in the coming years?How will branding change in the coming years?What are the biggest branding challenges? WhatWhat are the biggest branding challenges? Whatwill make a successful “twenty-first-centurywill make a successful “twenty-first-centurybrand”?brand”?
15.102Building Brand EquityBuilding Brand Equity Brand elementsBrand elements In a cluttered, competitive marketplace, the brandIn a cluttered, competitive marketplace, the brandelements that make up the brand will have to doelements that make up the brand will have to domore and more of the selling job.more and more of the selling job. Marketing programsMarketing programs Strong brands in the twenty-first century also willStrong brands in the twenty-first century also willrise above others by better understanding the needs,rise above others by better understanding the needs,wants, and desires of consumers and creatingwants, and desires of consumers and creatingmarketing programs that fulfill and even surpassmarketing programs that fulfill and even surpassconsumer expectations.consumer expectations.
15.103Measuring Brand EquityMeasuring Brand Equity Marketers of successful twenty-first-centuryMarketers of successful twenty-first-centurybrands will create formalized measurementbrands will create formalized measurementapproaches and processes that ensure theyapproaches and processes that ensure theycontinually monitor their sources of brandcontinually monitor their sources of brandequity and those of competitors.equity and those of competitors.
15.104Managing Brand EquityManaging Brand Equity It will be essential in building strong twenty-first-It will be essential in building strong twenty-first-century brands to align internal and external brandcentury brands to align internal and external brandmanagement.management. Internal brand managementInternal brand management ensures that employees andensures that employees andmarketing partners appreciate and understand basic brandingmarketing partners appreciate and understand basic brandingnotions and how they can affect the equity of brands.notions and how they can affect the equity of brands. External brand managementExternal brand management requires understanding the needs,requires understanding the needs,wants, and desires of consumers and creating brandwants, and desires of consumers and creating brandmarketing programs that fulfill and even surpass consumermarketing programs that fulfill and even surpass consumerexpectations.expectations. Companies must also align bottom-up and top-downCompanies must also align bottom-up and top-downmarketing management .marketing management .
15.105Achieving Marketing BalanceAchieving Marketing Balance The most fundamental challenge of marketingThe most fundamental challenge of marketingand brand management is reconciling the manyand brand management is reconciling the manypotential trade-offs in marketing decisionspotential trade-offs in marketing decisions There are three means or levels of achievingThere are three means or levels of achievingmarketing balance, in increasing order ofmarketing balance, in increasing order ofpotential effectiveness:potential effectiveness: AlternateAlternate DivideDivide FinesseFinesse