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    • Contents Using this guide Introduction Checklist Case studies 5. MANAGING AND DEVELOPING BRANDS “Surely every brand has to die sometime!” Use bookmarks in the left-hand panel to navigate this guide – click on the bookmarks tab on the left of your screen or [F5]. Search for specific words by using: Ctrl + F (PC) or Apple = F (Mac). To Branding website © The Chartered Institute of Marketing 2003
    • 5. MANAGING AND DEVELOPING BRANDS HOME eGUIDE 1 Defining brands Contents > Using this guide eGUIDE 2 Types of brands eGUIDE 3 How brands work eGUIDE 4 Brand strategy eGUIDE 5 Managing and developing brands eGUIDE 6 Brand portfolio and architecture eGUIDE 7 > Introduction > What is brand management? > Brand management or brand strategy – what comes first? > Brand management – top-down or bottom-up approach? > The brand plan > Some brand management scenarios > Checklist > Case studies Measuring brands and their performance The above ‘offline’ links require all the eGuide pdfs to have been downloaded from the Branding website and placed in the same single folder on your hard disk. To Branding website © The Chartered Institute of Marketing 2003 2
    • 5. MANAGING AND DEVELOPING BRANDS HOME Using this guide Navigation There are a number of ways to make your way round this guide: >Bookmarks Gives a topic overview of the guide – first select the bookmarks tab on the left of the screen (alternatively use [F5] key), then click on to a topic to link to the relevant page. >Next/previous page Clicking on the left or right of this icon, at the bottom right of each page, will enable you to move forward or back, page by page. >Tool bar The tool bar at the bottom of the screen is another way to skip through pages, by clicking on the arrows. >Margin icons These icons, in the margins to the left of the main text, link to various types of information. See next page for a complete list of these margin icons. >Links Click on a highlighted word to navigate to a related page – either in the guide or on the World Wide Web. >Search You can also search the guides using [Ctrl] + F for PC (or [Apple] = F for Mac) to bring up the ‘find’ dialogue box and then simply type in your search term and click the ‘find’ button. HOME >To home page Clicking on this icon, in the top right of every page, will take you to the home page of this eGuide. >To other eGuides eGUIDE 2 Clicking on these icons, to be found on the contents page and sometimes as a margin icon, will take you to the home page of that particular eGuide – if you have downloaded the relevant pdf and stored it in the same folder. BACK >Back to main text Clicking the ‘back’ button will return you to the point in the main text you were directed from. To Branding website © The Chartered Institute of Marketing 2003 3
    • 5. MANAGING AND DEVELOPING BRANDS HOME >To Branding website Clicking on the ‘@’ icon at the bottom left of each page will take you to the home page of the Branding website. This link will only work when you are online. Margin icons We’ve added icons in the margins of the text to highlight particular types of information: >Further details Indicates additional material on the same subject. This information may be located within the same eGuide; in one of the other six eGuides (in which case the link will only work if the pdfs of the other eGuides have been downloaded into the same folder); or on a separate website (in which case the link will only work if the pdf is being viewed online). >Case study This signals a story that will illustrate theory applied in practice. Click on the icon to view the example and, once you have finished, select ‘back’ to return to where you were originally. >Checklist Points to a summary page. >Resources Links through to the online Brand Store section where you will find further resources on the topic being discussed. >FAQs Gives answers to frequently asked questions. To Branding website © The Chartered Institute of Marketing 2003 4
    • 5. MANAGING AND DEVELOPING BRANDS HOME Introduction “Surely every brand has to die sometime! ” If left to their own devices, most brands inevitably find themselves in a state of decline as they lose relevance or competitors steal market share. Imagine if the Levi's brand had been left as it started and Levi's were still marketed as hard wearing trousers for miners – would the brand still be as successful as it is today? There is no defined life cycle for a brand and they can, in theory, live forever. But brands don't have to die. Unlike products, there is no defined life cycle for a brand and they can, in theory, live forever. Brands are precious – they are often a company's most valuable asset – and by carefully controlling and tweaking them, in line with the brand strategy, they can be protected from decline and nurtured into growth. That is the ultimate purpose of brand management and development. To Branding website © The Chartered Institute of Marketing 2003 5
    • 5. MANAGING AND DEVELOPING BRANDS HOME Brand management What is brand management? stands at the junction of company and customer > Brand management is a process that takes control over everything the brand does and and must integrate the says, managing the way in which it is totally different perceived by others. This involves identifying perspectives of the two clearly what the brand stands for, and how to position it so that it appears different and worlds. better than competing brands. It requires constant tracking of the brand and its competitors, the integration of all communications, and the management of each contact point a consumer may have with the brand. The overall aim of this process is to increase the value of the brand over time. [Temporal, 2002] > Brand management stands at the junction of company and customer and must integrate the totally different perspectives of the two worlds. Balances have to be struck between the external market and internal capabilities of the company, between the company’s inputs into the products and the influences on consumer perception, and between shortterm satisfaction for various stakeholders and the long-term growth of the brand. [Arnold, 1992] > Products might be mortal and governed by a lifecycle, but successful brands can escape the effects of time. That only happens with constant investment and innovation to keep the brand relevant, and the delivery of brand consistency over time. Continuity is essential to the brand’s formation and longevity. [Kapferer, 1992] To Branding website © The Chartered Institute of Marketing 2003 6
    • 5. MANAGING AND DEVELOPING BRANDS HOME Brand management or brand strategy – what comes first? which the brand promise is delivered to customers in a more holistic way. [CIM/Maritz, 2002] eGuide 4: Brand strategy > Every aspect of brand management should be driven by the overall brand strategy. Other-wise it is easy to end up with confused images and perceptions of the brand. Strategy gives focus and direction to brand management and provides the platform that enables brand managers to gain consistency in all their brand-related activities. [Temporal, 2002] The traditional organisational model simply does not fit with world-class branding today. The new model of brand management represents this shift, where consumer insight drives the overall vision and mission of a brand and this in turn translates to business strategy and all related activities (see Figure 5.1). > Traditionally, business objectives and corporate vision were developed in the boardroom, with little insight into consumer wants and needs, and branding was just a support activity responsible for advertising and promotion. The traditional organisational model, which has a department as custodian of the brand and a different department as custodian of the people, simply does not fit with world-class branding today. The most progressive companies increasingly work in a networked or cross-functional way. This enables the company to look at the way in To Branding website © The Chartered Institute of Marketing 2003 7
    • 5. MANAGING AND DEVELOPING BRANDS HOME Figure 5.1: Brand link to corporate strategy in the 21st century BRAND VISION AND MISSION BUSINESS STRATEGY CUSTOMER RELATIONSHIP STRATEGY Top-level management support is obviously essential if a brand-led business approach is to have any chance of success. MARKETING Source: Temporal (2002) Brand management – top-down or bottom-up approach? Winning teams use ‘the brand’ as an organisational blueprint for the growth that is led from the very top of the company. The full potential of branding to drive growth is only realised when it is used to engage and align the resources of the company in delivering value for consumers and shareholders alike. To truly lead the business, brand strategy needs to influence all day-to-day activities, whether a high profile advertising campaign or the ways in which helpline teams answer the phone. Top-level management support is obviously essential if a brand-led business approach is to have any chance of success. Managers need to view key business decisions against financial criteria, but also against the brand promise. [Taylor, 2003] “The successful European companies we’ve studied share one critical characteristic – senior managers drive the brand... and as a result integrate brand building into the overall concept. In contrast, many US companies delegate the development of the brand to someone who lacks the clout and incentives to think strategically. Or they pass the task to To Branding website © The Chartered Institute of Marketing 2003 8
    • 5. MANAGING AND DEVELOPING BRANDS HOME their agency. Relying upon their agency leads to two problems. First, in most cases it creates a dissonance between senior managers and their key asset, the brand, the driver of future growth opportunities. That distance can make the co-ordination of efforts difficult, a situation that can result in consumer confusion, loss of synergy and ultimately performance that falls short of potential.” [Aaker, 1994] Powerful brands are characterised by enthusiastic leaders who have a passionate belief in a few values. enabling the brand to have a clear attitude. [de Chernatony, L., 2001] Staff look to strong leaders for guidance and powerful brands are characterised by enthusiastic leaders who have a passionate belief in a few values. By not just talking about these values, but rather living them, employees appreciate how genuine these values are and are more likely to be committed to delivering them. Placing more emphasis on internal brand management through aligning staff values with brand values minimises the often-cited problem of variable quality between employees. It facilitates unified behaviour and minimises surprises as customers encounter variants on the brand promise from different employees. A further advantage of having a focus on brand management and looking more inside the organisation is that it gives rise to a corporate persona with a deeply felt set of values To Branding website © The Chartered Institute of Marketing 2003 9
    • 5. MANAGING AND DEVELOPING BRANDS HOME [Brand positioning] inspires and guides the team, giving a clear picture of both the ‘job’ the brand needs to do and the ‘human side’ to be reflected in tone and feel. The brand plan “The most effective way to determine and communicate the value of your brands to others is to create a brand plan that includes objectives, strategies, tactics and measurements.” [LePla and Parker, 2002] Defining the brand and its market position eGuide 3: How Brands work: Brand positioning, image and identity “Positioning is a process of ensuring that a brand can fight through the noise in the market and enables the brand to occupy a distinct, meaningful and valued place in the target customers’ minds.” [de Chernatony, L., 2001] Brand positioning plays a vital role in keeping a brand on track towards its destination. It pinpoints what makes the brand motivating, different and true for target customers. In doing so it should inspire and guide the team to help them develop a competitive and coherent brand. When positioning is clearly defined, it can be a central tool for helping boost return on brand investment. It inspires and guides the team, giving a clear picture of both the ‘job’ the brand needs to do and the ‘human side’ to be reflected in tone and feel. The choice of tool for defining a brand’s position is of little importance. What is important is that within a company everyone uses the same tool definition and format. Speaking the same language is crucial to facilitate effective communication. [Taylor, 2002] The different elements of positioning (essence, values, personality, promise, benefits, brand truths, consumer insight, market definition, target consumer) should come together as a coherent whole. In the case of most strong brands, positioning is underpinned by brand truths, providing real substance and content that can be the starting point for a compelling and unique story. [Taylor, 2002] Case study: Barr’s Irn-Bru When managing a brand, the external or internal circumstances may call for some changes in the execution of brand strategy, brand refreshment or rejuvenation, but the values underpinning positioning should remain constant. [Taylor, 2002] To Branding website © The Chartered Institute of Marketing 2003 10
    • MANAGING AND DEVELOPING BRANDS HOME Figure 5.2 Example positioning tool (pick your own shape) 4. Rallying calls Essence Shorthand distillation Brand Values of the brand’s truths Fundamental, Features, attributes reason to guiding principles exist and properties that and beliefs help underpin the promise Benefits Personality The key motivations Human characteristics Brand for buying the guiding tone, feel promise brand and style Summary of what the brand offers and why it is better than alternatives 3. Human side of the brand 2. Job of the brand 5. Core insight Human truth that opens door to opportunity for your brand to improve everyday life Consumer target Positioning: person the brand must excite and involve. Consumption: broader group of buyers Source: Taylor, D. (2002) The Brand Gym. London, John Wiley & Sons Market definition The product and service areas in which the brand wants to operate. Who will lose if we win? 1. Insight foundation To Branding website © The Chartered Institute of Marketing 2003 11
    • MANAGING AND DEVELOPING BRANDS HOME Figure 5.3a: Positioning tips and tricks Inspires and guides Full view of real competition Ideas for stretch Tips and tricks Who wins when we lose? Use benefits not just product terms Bad examples Videotapes Blockbuster Good examples Rentable home entertainment Blockbuster Positioning target Empathy with the core consumer, understand their life Capture attitudes, values, colour AB women aged 25-45 Knorr Food enthusiasts who enjoy good food but are pressed for time Knorr Core insight Open the door to an opportunity to improve everyday life Describe a human truth and how this opens a door for the brand Add colour and emotion Parents worry about nappy rash Pampers People who are concerned about their baby having a wet bottom and getting nappy rash as this makes them worry about not being a perfect parent Pampers Brand truths (limit to 2-3) Development of product features and attributes Be specific and concrete Good service Blockbuster Blockbuster promise: ‘Get the film you want or hire it for free next time’ Benefits (limit to 2-3) Product development, communication emphasis Specific reasons for purchase, not reasons to believe Pro-vitamin B5; doesn’t dry hair Pantene ‘Hair so healthy it shines’ Pantene Insight foundation Market definition Job of brand 5. continued/… To Branding website © The Chartered Institute of Marketing 2003 12
    • MANAGING AND DEVELOPING BRANDS HOME Human side Figure 5.3b: Positioning tips and tricks Rally calls 5. Inspires and guides Issues to campaign on, brand behaviours with customers Tips and tricks Make them provocative and polarising Bad examples Quality, teamwork Prêt à Manger Good examples Setting the bar high, one for all, all for one Prêt à Manger Guide tone, feel and style of communication and front-line staff Make them colourful not bland Reliable, honest, friendly Clearasil Solid as a rock, straight as an arrow, best mate Clearasil Promise Key summary input (limit to 15-20 words) for briefs Focused on what it is and why it is better. Inject colour, emotion and edge Affordable short-break holiday offering best combination of activities for all the family DLP Magical place where everyone can live out adventures they have dreamt off DLP Essence (limit to 2-4 words) Capture emotion not just function, inspire future growth Best shave Gillette, male attractiveness Lynx Ultimate performance Gillette, pulling power Lynx Values (limit to 2-3) Personality (limit to 3-4) Shorthand check for reviewing the brand mix Source: Taylor, D. (2002) The Brand Gym. London, John Wiley & Sons. To Branding website © The Chartered Institute of Marketing 2003 13
    • 5. MANAGING AND DEVELOPING BRANDS HOME Figure 5.4: Facilitating an integrated brand through addressing four key brand communicators (adapted from Wolff Olins, 1995) Performance of the product/service in relation to the brand promise “Customers experience brand behaviour not brand plans.” [Stagliano, A. and O’Malley, D., 2002] PRODUCT/ SERVICE STAFF BEHAVIOUR BRAND VALUES COMMUNICATIONS ENVIRONMENT Source: de Chernatony, L. (2001) From Brand Vision to Brand Evaluation. London, Butterworth-Heinemann. At the heart of the brand is the promise that it makes to its customers. Companies keep their promises by understanding their brands and acting on that understanding in every endeavour. That promise is carried out by people at all levels of the company – from CEO to the line worker – so that integrated branding is much more than communications strategy or a set of messages. When brand promise meets customers in an integrated way, through products, services, communications and culture, it produces unique and valuable customer relationships. [LePla and Parker, 2002] “Successful branding is not just about communicating a unique personality or brand identity. It is about delivering the promise made to customers, and that makes it a responsibility of everyone in the company. These brand promises are no longer just empty advertising slogans. They are the heart To Branding website © The Chartered Institute of Marketing 2003 14
    • 5. MANAGING AND DEVELOPING BRANDS HOME Figure 5.5: Brand engagement INTELLECTUAL I understand our brand I know what we stand for I know how we are different I know where we are going And how we will get there Lack of commitment, energy and passion BEHAVIOURAL My role is clear I know how to treat customers The key messages I need to communicate are clear Lack of action BRAND ENGAGEMENT Lack of discretion and consistency EMOTIONAL The brand fits my values I belong here I live the spirit of this company Source: Poundsford, M. (2001) Engaging your workforce. Brand Strategy, Feb, p.12. and soul of the brand. They are the things that everyone in the organisation is charged with delivering. Thus branding is no longer just sending the messages, it’s living the brand every day in every way.” [Schultz & Schultz, 2001] Internal alignment behind the brand promise Mobilising the people in the organisation behind the brand is the key to achieving growth. This requires taking people on a journey of commitment from rational understanding through emotional engagement to alignment of behaviour. [Taylor, 2002] No matter how strong the insight, vision and strategy are, without motivating and directing the people in the organisation it is impossible to deliver the brand promise consistently. More and more people are using internal communication to try to encourage people to ‘live the brand’. Many of those are falling into the trap of talking about the vision without any effect on the way a business is run, which amounts to a cosmetic cover-up of problems within the organisation. In the same way that consumers are disappointed when a product To Branding website © The Chartered Institute of Marketing 2003 15
    • 5. MANAGING AND DEVELOPING BRANDS HOME fails to live up to the promise made in communication, the same goes for the employees and the company they work for. In reality, such internal communication has a limited role to play in engaging and aligning people with the brand. Figure 5.6: Integrated marketing communication and the brand SALES PROMOTION DIRECT RESPONSE DIRECT MARKETING BRAND VALUES MEDIA ADVERTISING PUBLICITY AND PR PACKAGING AND DESIGN POINTOF-SALE EVENT MARKETING Source: Macrae, Ch. (1996) The Brand Chartering Handbook. Essex, Addison Wesley, p. 377. “You don’t create a culture, you catch it like a virus. People see new behaviours and copy them until they become the way we do things here” [Phil McManus, head of internal communication at Vodafone] Integrated brand communications Central to modern marketing management is the concept of ‘integrated marketing communications’; the planning and execution of all types of communication to meet a common set of objectives for the brand. The aim is to support a single positioning through advertising, PR, or co-branding. A holistic view of the brand should be pursued. This is not to say that there must be one rigid, omnipotent message, rather it suggests that the messages conveyed by different media need to interconnect. They all need to tell broadly the same story. There is nothing to be gained from promising one thing in your advertising and not being able to deliver at the point of sale. In fact, there is nothing worse for a brand than empty promises. Another reason for adopting integrated brand communications is that messages aimed at one audience are increasingly seeping out into To Branding website © The Chartered Institute of Marketing 2003 16
    • 5. MANAGING AND DEVELOPING BRANDS HOME Employees are the most direct link between the brand and its customers. the spheres of other audiences. It would be misleading to think of different stakeholder groups (eg, employees, consumers, shareholders) as isolated and mutually exclusive groups. Arguably, as much attention should be given to ‘managing the employee brand’ as to the consumer brand, as employees are the most direct link between the brand and its customers. [Uncles, 1996] Five points to remember when implementing integrated marketing communications: > Audiences will attempt to interpret the messages you send, but not necessarily in ways that were originally intended. > It is the task of management to maximise the interpretation of intentional messages and minimise the interpretation of unintentional messages. > To do this effectively the process needs to be managed from the centre. The brand needs to embody a vision or mission. > All audiences should be informed and involve employees and shareholders, as well as customers and consumers. > All audiences interact and interconnect; indeed, because the same person often has different roles, brand communications ought to be broadly consistent across these audiences. [Uncles, 1996] Maintaining brand integrity across touch points “The way we interpret the body language of brands means that the apparently trivial can be greatly significant.” [Bullmore, 2001] Advertising, packaging, price and promotions have this in common: they are all within the control of the marketing company. To be rather more accurate: the transmission of these brand stimuli is within the control of the marketing company. The reception however, is not. [Bullmore, 2001] However, there are other factors which lie outside the brand’s control, but their effect on the public can be significant. Because they are impossible to foresee or orchestrate, they tend to be totally ignored. Examples of these include: a story in the press about racial discrimination or unethical employment practices at a brand’s factory, an anti-brand crusading website, a product recall for safety To Branding website © The Chartered Institute of Marketing 2003 17
    • 5. MANAGING AND DEVELOPING BRANDS HOME reasons, dangerous driving by a clearly branded truck, or two cars of the same make broken down at the roadside within a mile of each other. Most chance encounters are negative in impact; and every single one of them will have some lasting effect on the people’s aggregate belief in the brand – and therefore on its success and profitability. Because so much depends on having a product in the right place at the right time, it is necessary for manufacturers to take the retailers’ reaction to Future prizes will go not just to those who products into account. make the fewest errors, but also to those who recover, apologise and take corrective action. Intelligent, informed and trusted staff can turn even a catastrophic brand encounter into a reinforcement of brand loyalty. [Bullmore, 1999] Distribution In the field of consumer goods that do not require much consumer involvement, it is no longer the consumer who is solely responsible for the success and failure of a brand, but distributors. In deciding whether or not to give room to a new brand, they are the ones who can cause it to fail. They are also the ones who can cause the premature decline of a new brand if they judge its turnover to be too sluggish. Manufacturers’ brands now also need to compete with distributors’ own brands which offer higher margins to retailers. Because so much depends on having a product in the right place at the right time, it is necessary for manufacturers to take the retailers’ reaction to products into account and develop a mutually beneficial relationship. Brand protection Intellectual property – what is it? > Intellectual property (IP) rights provide legal protection for some of the most important aspects of a brand. They protect, for example, the name, logo, label designs, packaging shapes, advertising, slogans, domain names and sometimes the product itself. Even sounds and smell can be protected if they are distinctive. Case study: Remington vs Phillips > These rights are essentially preventative in effect: they prevent a third party doing something they would otherwise be able to do. the purpose is to encourage investment and innovation and to discourage copying. To Branding website © The Chartered Institute of Marketing 2003 18
    • 5. MANAGING AND DEVELOPING BRANDS HOME > IP may be bought, sold, mortgaged or leased just like tangible property such as land. This is usually called ‘assigning’ or ‘licensing’ and can be an important business opportunity and source of income. Best practice > Rights tend to be national with every country having its own laws (with exceptions like the Community Trade Mark in the EU). Owning a right in one country does not necessarily mean the right is held in another country. > Make sure they aren’t being used by others. > The main rights associated with brands are: > Trademarks (registered or common law) > Copyright and database rights > Designs > Patents > Unfair competition/passing off > Trade secrets/confidentiality. > Control their use when licensing. > Although not an intellectual property right, domain names on the Internet provide important signposts to the brand, requiring careful management. Trademarks > Choose new trademarks carefully. > Register the trademark. > Make sure you use them correctly. > Take action against misuse immediately. Copyright > Ensure that with any creative work from an outside supplier the copyright is transferred to you. > When merchandising copyright material, control and monitor usage. > Where possible find ways to incorporate small but deliberate mistakes to prove copying has taken place. To Branding website © The Chartered Institute of Marketing 2003 19
    • 5. MANAGING AND DEVELOPING BRANDS HOME > Take action on copying immediately. Designs > If you commission work that includes an invention, try to get all patent rights outright. > Apply for design registration as soon as possible – certainly within 12 months of ‘publicly’ disclosing the design. > Be vigilant. > For Unregistered Design Right, record the design in a design document or make a prototype to obtain protection. > Watch out for anyone who suggests there is a connection with you where none exists. Take action quickly. > Ensure your rights are acknowledged and protected in any merchandising agreement. > Laws vary widely from country to country. Unfair competition/passing off > Preserve any evidence of confusion. > Look out for copies and take action if you find any. Patents > Keep ideas confidential until filing a patent application. > Mark everything involved as confidential. > Before filing only make any disclosures to those under an obligation of confidence. Domain names > Establish a centralised policy for clearing and tracking your domain names(s). Trade secrets/confidentiality > Treat it with great care and on a ‘need to know’ basis. > Take action quickly against any leaks. To Branding website © The Chartered Institute of Marketing 2003 20
    • 5. MANAGING AND DEVELOPING BRANDS HOME Some brand management scenarios Developing a new brand New brand launches are risky, involved and lengthy commercial propositions. Dot com companies spent millions in the late ’90s building awareness but failing to build brands. A brand is not built overnight but by continued use of a product or service over time. Consistent experience of the benefits builds relevance, preference, confidence and trust in the minds of users, and builds the brand. Being the first to market with a new brand establishes a reputation for being the original, with greater market knowledge, and potentially greater economies of scale. The starting point is the recognition that – for existing companies, products and services – a brand already exists, although it may not have been consciously identified or managed. People, including users, will have a perception; those perceptions, however, may not necessarily be positive and may not evoke any strong beliefs at all. They may have no opinion of the value delivered over competitors. Such perceptions form the brand although, in this scenario, a particularly weak one. Building a brand from scratch is not the easy option. It requires a proposition that delivers a genuine functional advantage over competitors. The delivery of that proposition must be consistent, reinforced where possible by a guarantee. The whole organisation needs to be culturally aligned to deliver that proposition with passion. Users have to experience the functional advantage to the extent that they depend on it, confident that it really delivers superior performance every time. It involves significant investment, in creating the superior functional performance, building the team and culture to deliver it, communicating it and supporting it. With the significant investment comes commercial risk although a deep understanding of users, built from marketing research studies undertaken prior to launch, reduces the chances of failure. Being the first to market with a new brand, however, establishes perceptions specific to your brand, a reputation for being the original, with greater market knowledge, and potentially greater economies of scale. Customers become loyal and ask for a brand which has come to define the product field (eg, Amazon.com for buying books on-line). Brands that are pioneers have the opportunity to gain greater understanding of the technology by moving up the learning curve faster than competitors. [de Chernatony, L. and McDonald, M., 1998] To Branding website © The Chartered Institute of Marketing 2003 21
    • 5. MANAGING AND DEVELOPING BRANDS HOME Case study: Amazon Failure rate for new brands is much higher than for new products using an existing brand name. Entering new geographic markets Failure rate for new brands is much higher than for new products using an existing brand name. This is due to the added costs of gaining consumer awareness and trial, and therefore the additional revenue necessary to achieve acceptable profits. According to Davidson [1997] new brands should be launched only where some or all of these conditions apply: Read more about this topic in eguide 2: Types of brand – Global brands > No existing company masterbrand or individual brands can be stretched far enough to capitalise on the new opportunity > The new brand is capable of achieving superior customer value, relevant distinctiveness, low-cost operation, marketing and sales support, acceptable economics > The opportunity can only be exploited fully with a new brand > The proposition and economics of a new brand have been thoroughly pre-tested. Maintaining/re-building brand relevance “Being clear about what a brand does and, equally importantly, does not stand for, managers can sustain their brand’s competitive advantage through the way its activities fit and reinforce each other.” [de Chernatony, L. and McDonald, M., 1998] The natural state for brands, if left alone, is one of decline. As competitors deliver better performance, or the same performance for less cost, consumers’ needs change, cultures evolve and existing users grow older, brands can quickly lose their relevance. The first stage in maintaining and revitalising brand relevance is to investigate what consumers think and feel about the brand. It is important to consider the relationship the brand has with consumers and whether this is still relevant. Changes in consumers’ lifestyles, pressures and needs must be understood so To Branding website © The Chartered Institute of Marketing 2003 22
    • 5. MANAGING AND DEVELOPING BRANDS HOME that the solutions delivered by the brand remain relevant and effective. It is also necessary to understand the gap between the performance of current solutions on the market and consumers’ ideal, as any gap risks being filled first by a competitor. Solutions to maintaining and revitalising brand relevance will depend on the nature of the problem. If any changes are required to brand performance, personality or communication, marketers need to consider how these would affect what the brand has always stood for – its core values. Relevance can be reestablished by adjusting delivery of the product or service, the distribution channels used, pricing or communication. Where brand performance is weakened, or a gap exists between current performance and consumers’ ideal, performance-related innovation is likely to be the primary driver for maintaining brand relevance. If a brand fails to perform because it has been leapfrogged by a competitor, that brand will be damaged and must re-assert its leadership position if it is to continue to thrive. Changing the brand’s performance may not always be the right answer. If a brand is losing its relevance, can the brand be re-positioned to meet different or new needs? Relevance can be re-established by adjusting any of a range of elements in the marketing mix, including delivery of the product or service, the distribution channels used, pricing or communication. Budweiser added an idiosyncratic element to its brand personality through its ‘Whassa?’ advertising campaign, while Stella Artois succeeded by adopting very different positioning in the UK market (‘reassuringly expensive’) compared to its native Belgian market. Case study: Lucozade There needs to be mechanism in place whereby any activity that affects the brand is carefully considered against the statement of core values to ensure that none of the core values would be adversely affected. This type of system emphasises a long-term view of the brand and the brand equity gained over time as opposed to short term measures. A further advantage of having a statement of brand values is that it enables managers to check their interpretation of the brand against the agreed view. [de Chernatony, L. and mcDonald, M., 1998] Finally, all changes must be carefully coordinated to ensure that each element of the marketing mix supports the new proposition. To Branding website © The Chartered Institute of Marketing 2003 23
    • 5. MANAGING AND DEVELOPING BRANDS HOME This proposition needs to be communicated to all stakeholders in the brand. [de Chernatony, L., 1998] The task of revitalising old brands is less difficult when the core values of the brand have been protected and consistently presented to consumers. The task of revitalising old brands is less difficult when the core values of the brand have been protected and consistently presented to consumers. It can be less expensive and less risky to revitalise an established brand, when it is possible, than to develop and launch a new one. What is clear about brands with a long history is that they have been subtly adjusted to keep them relevant to changing market conditions. Stretching the brand into new product areas Brand extensions can be one of the best sources of profitable growth for a brand. They also have the potential to rejuvenate the brand’s imagery. Too many extensions, however, may eat up money and resources without delivering any real difference in performance over existing products, posing the risk of damaging rather than enhancing the core brand. The primary motivation behind brand stretch should always be to deliver profitable business growth whilst maintaining, and preferably increasing, brand equity. This is done through attracting new users, creating new usage occasions, superior performance and premium pricing. [Taylor, D., 2002] When evaluating brand stretch, it is important to consider two dimensions: > Functional stretch: this dimension concerns the delivery of different benefits that require different product features and functionality. > Emotional stretch: this dimension relates to the emotional associations and personality of a market or segment. Brands that are based on functional value may be more difficult to stretch. In contrast, brands that are rich in emotional values are less associated with specific functional benefits and so are easier to stretch across many product areas. [Taylor, D., 2002] Case study: Wedgwood A useful tool for mapping out the extension areas is the brand circle [Davidson, 1997] (see figure 5.7). To Branding website © The Chartered Institute of Marketing 2003 24
    • 5. MANAGING AND DEVELOPING BRANDS HOME Figure 5.7: Example of a brand circle NO-GO AREAS NO-GO AREAS Involvement would seriously damage and compromise clarity of brand proposition EXTENSION AREAS Areas to which brand franchise can be widened without damage EXTENSION AREAS Average Enhanced taste health Out of home Glass INNER bottles CORE > Great taste > Premium priced Mothers Sugar No > Health benefits with free artificial children flavouring Non foods Blackcurrant OUTER CORE Optional attributes INNER CORE Critical elements in brand identity OUTER CORE Male positioning Ready to drink Plastic bottles Ribena UK sales increased by 1000% in 1980-95 Concentrated drink Low price Flavours Carbonated Medical positioning Mainstream soft drink Source: Davidson (1997), Even More Offensive Marketing To Branding website © The Chartered Institute of Marketing 2003 25
    • 5. MANAGING AND DEVELOPING BRANDS HOME Extension can be beneficial to a brand, however it can also be dangerous. Bullmore compares brand extension to the second law of thermodynamics, which states that ‘when two objects touch, and their temperatures are different, heat will flow from the warmer to the cooler until their temperatures are equalised’. When existing strong brands are used to foster new brands, the master brand will add warmth and vitality to the sub-brand but it will be unwittingly drained of heat itself. [Bullmore, 1997] > Benefit established brands – whether purchasing IBM computers with ‘Intel Inside’ or clothes with Lycra® ingredient, consumers have demonstrated a strong preference for co-branded offers. Co-branding provides an opportunity to create a new income stream, boost flagging consumer interest and increase financial returns. another product class or market, not by a brand extension but by band partnerships. Brand owners in both service and product fields are increasingly realising the significant advantages to be derived from co-branding. It can: > Assist brand development – a co-branded range can be developed using the distribution channel of one of the brands. When existing strong brands are used to foster new brands, the master brand will add warmth and vitality to the sub brand but it will Co-branding be unwittingly drained of heat itself. A brand can also be leveraged by entering > Boost new brands – for new brands an alliance with a famous partner may bring immediate credibility. Co-branding has fuelled the growth of some of the most powerful new brands of recent times, such as Intel, NutraSweet and Cisco. Co-branding is not without risks however. As with traditional brands, extensions to new sectors may stretch brand equity too far. A careful match of both brands’ values, a similar focus on long-term brand development, and a careful choice of target market, however, should ensure the success of such union. Co-branding To Branding website © The Chartered Institute of Marketing 2003 26
    • 5. MANAGING AND DEVELOPING BRANDS HOME Franchising The trouble comes when the answer to the thorny question of who actually runs the [franchise] business is not clear. Turning a brand into a franchise has a number of key attractions. It can allow the brand to become national (or international) in its coverage quickly and at minimal cost. However, some franchises have fallen down, simply because the franchiser and the franchisee could not agree on how a business should be run, or insufficient attention is devoted to the consistency and quality of the customer experience. The trouble comes when the answer to the thorny question of who actually runs the business is not clear. While a franchise company believes it has a winning formula, the franchisees will want to do things their own way, as they claim to know the local market better. [Crainer, 1995] “A Benetton shop owner agrees to sell Benetton products, we agree to take care of the image and promotion of the Benetton trademarks and guarantee speed and timeliness in the supply of our merchandise.” [Crainer, 1995] Benetton is an interesting example. Its shops are franchises. The company advises on shop decor, location, advertising and product purchases but it does not receive royalties on sales or give exclusive rights for a particular area. Luciano Benetton describes the process as follows: To Branding website © The Chartered Institute of Marketing 2003 27
    • 5. MANAGING AND DEVELOPING BRANDS HOME Checklist > The promise that the brand represents should be based in reality. > Do you keep the brand fresh though updating it as the market changes? > Are your brand extensions consistent with core brand values? > What are the core values of your brand? > Are they conveyed in every consumer-brand encounter – through employees, communication, and direct experience? > What are the idiosyncratic elements of your brand? > The active brand, not the passive brand, will succeed. > Are you guilty of making empty promises? > Do you measure your brand equity regularly? > Brand differentiation should be more than skin-deep. > Is your brand a leader or a follower in the market? > How high up is innovation on your brand’s agenda? > How is your brand different to competitors? > Are those differentiating aspects relevant, meaningful and valued by the various stakeholders? > Can a coherent value system be inferred from everything your brand does? > Get the right balance between consistency and change. To Branding website © The Chartered Institute of Marketing 2003 28
    • 5. MANAGING AND DEVELOPING BRANDS HOME CASE STUDIES 1. Wedgwood: stretching the brand 2. Barr’s Irn Bru: one hundred years young 3. Lucozade: in sickness and in health 4. Remington vs Phillips: a close shave To Branding website © The Chartered Institute of Marketing 2003 29
    • 5. MANAGING AND DEVELOPING BRANDS HOME 1. Wedgwood: stretching the brand The Wedgwood brand is one of the oldest and most prestigious found in the world today. The quintessentially English brand was founded in 1759 by Josiah Wedgwood, renowned as the ‘Father of English Potters’, and has a long and proud history of delivering fine pottery to affluent, upmarket customers; both to be used as purchased and to be handed down as family heirlooms. By applying the emotional associations of the brand to a variety of new products, Wedgwood have diversified and expanded into new categories over the past two decades. In 1986 the company merged with Irish crystal manufacturers Waterford and the two have since pursued product developments outside of their core ceramics and crystal ranges as they sought to expand into the luxury goods market as a whole. Whilst Waterford have developed ranges of writing instruments, table linen and lamps, the Wedgwood brand has grown to encompass products such as jewellery, leather goods and even gourmet foods. The brand has expanded into new territories and taken market share from its competitors, particularly in Japan where the Wedgwood name has come to symbolise gifts of good taste and also in the UK where long standing relationships with designers such as Jasper Conran have given the brand an association with high fashion. As Wedgwood diversified, however, so consumers perceptions of the brand altered – to the extent that research undertaken in 1997 showed that whilst the brand name held a good reputation and suggested quality to consumers, they no longer associated it with it’s core product range of china tableware. The brand was achieving double digit growth and sales had risen to a record high of £417million but the research was still disconcerting for Wedgwood. Determined not to lose brand focus, they launched a major new advertising campaign to bring attention back to the premium china range and to market the brand as more contemporary and ‘younger’ than ever before. As a result Wedgwood have been able to continue their diversification and growth in the luxury gifts market whilst maintaining their core values of tradition and association with fine pottery which provide the brand with its integrity. To Branding website © The Chartered Institute of Marketing 2003 30
    • 5. MANAGING AND DEVELOPING BRANDS HOME Wedgwood’s most recent developments have included sponsoring the London Fashion Week and decentralising operations so that more individual attention can be paid to each territory. By concentrating on their strengths in individual markets, eg gifts in Japan, fashion in the UK and tradition in the US, Wedgwood now aim to break the brand into even more markets such as home furnishings and toiletries as brand managers seek to carefully expand the portfolio further. Recent problems such as the slowing of the global economy and the impact of September 11th have hurt Wedgwood as a luxury producer, yet sales in Asia and market share in the US have both shown dramatic growth and the company is now looking to double sales across the brand over the next five years. BACK 2. Barr’s Irn-Bru: one hundred years young [The Leith Agency for Barr Soft Drinks, in British Brands, Issue 14, Summer 2001] 2001 marks the hundredth birthday of Irn-Bru, ‘Scotland’s other national drink’. More than this, the year sees standard Irn-Bru in pole position as the biggest selling grocery brand in Scotland – ahead of such international grocery giants as Walkers Crisps, Persil, and Nescafé. There are very few countries in the world in which the leading cola is outsold by another soft drink brand, but Scotland is one of them. Clearly the distinctive flavour of Irn-Bru appeals to the Scottish palate, but the scale of the brand’s success is out of all proportion to the levels of sales a non-mainstream soft drink flavour can normally expect. So how does IrnBru manage to punch so far above its weight? Firstly the product itself is unique. There is literally nothing else like Irn-Bru. Nothing else tastes like it, or even looks like it. The recipe remains a closely guarded secret. For Scots of all ages, it is a reminder of their childhood; for those abroad, it is the taste of home. To Branding website © The Chartered Institute of Marketing 2003 31
    • 5. MANAGING AND DEVELOPING BRANDS HOME But it is easy for brands with such a strong heritage to lose contemporary relevance. Latent brand affinity isn’t always transferred into sales. The brand ends up very much loved but not very often purchased. Shrewd marketing has helped Irn-Bru to avoid this fate. produced a notably more dynamic set of responses. By the middle of the nineties, Barr’s wished to grow the brand in England. Research showed that the ‘Made in Scotland from Girders’ campaign was extremely successful in Scotland, but this success didn’t transfer to the English market. We had to recreate the advertising so that the English consumer, who had not grown up with the brand for the past 90 years, could also relate to it. Since Irn-Bru itself tastes like nothing else in the world, the marketing of the brand had to do justice to it. But in talking to its biggest fans, we realised that no two kids described Irn-Bru in the same way. The marketing of the brand would have to enhance, not deny this indescribable character. The best description we found was ‘likeable maverick’ – a selfconfident, unconventional and independent character who wouldn’t think or behave in quite the same way as other people. As a character-type this description of the brand has a great deal in common with the way our teenage audience likes to be perceived itself. And maverick is also a very apt description of what we sought the marketing to achieve. Competing against some brands with much bigger budgets, Irn-Bru has to shout to be heard. And the best way to do that is to constantly surprise people. The key was to adopt the right personality for Irn-Bru. The Barr’s brand team began visiting schools to find out what teenagers were talking about, and in particular what really made them laugh. This had advantages over traditional research methods. Whereas in a research group teenagers can easily turn surly and uncommunicative, in school they are expected to contribute their own ideas and opinions. Consequently, exploring strategic and creative marketing ideas in the classroom This kind of initiative helped to get under the skin of Irn-Bru. As a result a uniquely compelling personality for the brand has been developed over time. To Branding website © The Chartered Institute of Marketing 2003 32
    • 5. MANAGING AND DEVELOPING BRANDS HOME These insights have been used to inspire the creativity of Irn-Bru’s marketing activity at all levels, from website design to carefully tailored sponsorships, to above-the-line advertising. The maverick tone of voice has proven flexible enough to produce award-winning advertising on radio, posters and TV. On TV, from the ‘See What Irn-Bru Can Do For You’ campaign to the current award-winning work, Irn-Bru’s advertising has been consistently amongst the most popular and talked about for its teenage target audience. Because Irn-Bru’s marketing is based on genuine consumer insight, not nostalgia, it works just as well south of the border too. Scots have always loved Irn-Bru – now the gap is closing as English teenagers increasingly adopt a brand that speaks to them too. IrnBru sales in England now account for almost a quarter of total volume. And Irn-Bru’s brand image has improved dramatically in England wherever the campaign has been seen. So long as marketing continues to keep the brand young, there is every reason to suppose that Irn-Bru can enjoy another hundred years of healthy growth. BACK 3. Lucozade: in sickness and in health [Ann-Marie Salmon, Director, Consumer Healthcare Communication, Smithkline Beecham, in British Brands, Issue 4, Summer 1997] It is not without irony that a 50 year old brand aimed at ‘aiding recovery’ was itself not in good health at the end of the 1970s. Lower levels of sickness, less frequent ‘flu epidemics and price increases all contributed to a decline in consumer consumption of Lucozade and between 1974 and 1978 alone, sales had fallen by 30%. Drastic steps needed to be taken or half a century of brand heritage would be lost with little chance of recovery. Lucozade was first developed in 1927 by a Newcastle chemist for his son recovering from jaundice. It was bought by Beecham in 1938 and launched in its classic yellow cellophane wrapped bottle with the strapline ‘Lucozade aids recovery’. The glucose in Lucozade is in a form that can be easily assimilated into the body so that in illness, when there is appetite loss or food is difficult to keep down, a drink of Lucozade can To Branding website © The Chartered Institute of Marketing 2003 33
    • 5. MANAGING AND DEVELOPING BRANDS HOME help provide the energy the body needs to recuperate. The brand was consistently promoted on this basis through the 50s and 60s, during which time it became Beecham’s biggest selling brand. However during the 70s, the brand started its steady decline. To address this problem, new advertising was developed aimed at extending usage by positioning it as an in-health pick-me-up for housewives. This campaign increased sales by 11% and although the prior decline was arrested, growth was not maintained for long and by the end of 1979 sales had levelled out. This campaign was only part of the company’s effort to get in-health usage, however. In 1980, a new 250ml wide-mouth bottle was introduced in the ‘one-shot’ market which carried the new brand positioning ‘Lucozade replaces lost energy’. But whatever short term benefits accrued from the advertising and packaging initiatives, it was clear from a usage and attitude study conducted in 1982 that the underlying character of the brand had not changed dramatically from its historical norms. Housewives and children were still the predominant users and illness and recovery the main reasons for consumption. As a result it was decided that the best growth opportunity for the brand was in the carbonated soft drinks (CSD) market, the rationale being the brand’s excellent in-store positioning and distribution strength in both grocery and ‘corner-shop’ markets and the volume potential in the CSD market. However, these positive aspects were balanced by a number of other factors, not least was the total domination of this market by Coke and Pepsi. In addition, Lucozade would be expensive and the brand had a lot of negative baggage with the younger target audience as something their mums had given them when they were ill. It was felt that these problems could be addressed via advertising which would do two things - justify a price premium via a unique selling proposition and in execution use imagery which the new young target audiences would find motivating. The unique selling proposition to justify the price premium was based on the brand’s particular benefit claim - ‘Lucozade is not only delicious and refreshing, but can quickly replace lost energy’. The creative solution was to be found in sport which simultaneously addressed both the target audience and the product claim. To Branding website © The Chartered Institute of Marketing 2003 34
    • 5. MANAGING AND DEVELOPING BRANDS HOME At that time, Daley Thompson was signed as the spokesman for Lucozade and in July 1983 he featured in a Lucozade ad for the first time. Results were mixed and extensive analysis of the advertising showed that consumers liked Daley but didn’t connect him totally with the brand. From this assessment came the ‘Traffic Lights’ TV commercial which sought to ‘portray’ the energy of Lucozade rather than ‘explain’ it. The combination of Daley Thompson in slow motion with the heavy metal Iron Maiden music chosen for its wind down and slow build to thunderous crescendo embodied the before and after promise of dynamic energy, at the same time branding the advertising unmistakably. Since then, the brand has gone from strength to strength with the introduction of new flavour variants, the 1988 launch of the Lucozade Sport isotonic drink and the 1995 launch of the NRG teen drink. Many of these concepts have been successfully transferred to markets outside the UK in Ireland, Asia and Australasia. All of these introductions have included innovative new packaging elements, developed new loyal consumer groups and yet have remained true to the core character of the brand as an energy drink. Even more graphically, in the ten years between 1985 and 1995, global sales of the brand increased from £12 million to £125 million, a true illustration of a brand fulfilling a promise made 70 years ago... ‘Lucozade aids recovery’ In the first year of the new advertising, with no significant gains in distribution or changes in pricing, volume sales increased by 40% and were accompanied by sales increase in the original bottle of 4%. Quantitative and qualitative research showed that the energy message was getting through to both existing users and the new, younger target audience. BACK To Branding website © The Chartered Institute of Marketing 2003 35
    • 5. MANAGING AND DEVELOPING BRANDS HOME 4. Remington vs Phillips: a close shave Both the Remington and Phillips brands have long and proud histories in the electronic grooming market. In 1937 Remington produced the worlds first electric razor, a true innovation which still forms the core of their business today. Two years later, Phillips entered the market with their own shaver and they have since gone on to produce over 400 million electric razors under the Philishave brand, including the revolutionary triangular three-headed electric shaver in 1966. The two companies pitched their designs against one another for some 55 years as market leaders in electronic grooming products with Phillips claiming superiority for their three-headed Philishave product. Apparently accepting the finer design of the product to the traditional twin headed shavers they produced; Remington launched a similar triangular threeheaded electric razor in 1995. Phillips immediately sued, claiming that the product infringed on their intellectual property and trademark of the design. A Phillips press releases stated: ‘Since its first introduction some thirty years ago we have invested continuously in the quality and the design of one of the icons of Phillips, the Philishave. Consumers recognise the form of our three headed Philishave as Philips and we would like to avoid confusion in the market’. Under the 1994 Trademarks act, which allowed companies to register tunes colours and three dimensional shapes, Phillips had registered the design of the product but Remington challenged the action on the basis that registering a design such as the Philishave gave Phillips a monopoly and prevented competitors from producing products based on similar technology. The case went through the courts for some seven years before the European Court of Justice ruled against Philips last June. The verdict was that Philips own advertising had emphasised the superiority of the design over that of their competitors and in doing so they had established that the design was fundamental to the way the product works, undermining their right to trademark it as a brand feature. The ruling was a landmark as it was the first time the principle of design trademarks had been tested and emphasises to what extent a product design can be protected. The courts To Branding website © The Chartered Institute of Marketing 2003 36
    • 5. MANAGING AND DEVELOPING BRANDS HOME judged that, whilst a particular design can be protected if it is widely associated with the brand, the shape of a Coca-Cola bottle for example, this is not the case if that design is fundamental to its operation. Intellectual property is protected if a rival is attempting to ‘pass off’ a product and confuse consumers but as Remington were employing the same technology but clearly marketing it under their own brand, and as Philips themselves had declared the design technologically rather than aesthetically superior, the design was not protected. Philips have appealed against the verdict and the interpretation could yet be heard in domestic courts in individual territories. Remington, however, have claiming the judgement as a victory that will clear the way for them to market their triple headed electric shavers throughout the UK and Europe. BACK To Branding website © The Chartered Institute of Marketing 2003 37