NEW STRATEGIC BRAND MANAGEMENT By Jean Leon Kapferer

1. 1
NEW STRATEGIC BRAND
MANAGEMENT
By
Jean Leon Kapferer
CHAPTER-10
SUSTAINING A BRAND LONG TERM
Dr.Sanjit Kumar Dash

2. 2
Introduction
• Many apparently modern and up-to –date brands
have actually been with us for a long time
• Coca –Cola – 20May 1887
• American Express -1850
• Whirlpool -1911
• Camel-1913
• Danone-1919
• Marlboro-1937
• Calvin Klein-1968
These are the brands that have survived –others
have disappeared from the market even if their
names do ring a bell
Brand can escape the effect of time!

3. 3
Is there a brand life cycle?
• 2002 LVMH, the world leading group for luxury
brands and goods, sued the famous consulting group
Morgan Stanley for having expressed the opinion that
the Louis Vuitton brand (born in 1854) was now a
‘mature brand’, a judgement that carried implicit and
explicit consequences for financial analysts and their
clients, stock investors.
• Maturity is a typical phase of the product life cycle,
the third after launch and growth, and just before
decline. To describe a brand as in its maturity does
indeed imply it is not far from decline, and so could
hurt its reputation and the LVMH stock valuation.

4. 4
PLC
• Types

5. 5
The routes of product growth
recovery
• through line extensions to capture the short-term new
tendencies of the market and increase brand visibility;
• through distribution extensions to make the brand
more available wherever customers are;
• through a reduction in the price differential from
cheaper potential substitutes;
• through permanent ‘facelifts’ or innovations to deliver
more value to customers and recreate perceived
differentiation;
• through repositioning, and renewed advertising or
communication in order to adapt the value proposition
to the present competitive conditions.

6. 6
Cont…
• A brand is not a product. Certainly it is based
on a product or service: Nike started as a pair of
sneakers, Lacoste as a shirt, l’Oréal as a hair
dye. But as theses examples imply ,brands start
from one product then continue to grow .
• Brands that are not managed in this way, but
remain attached to a single product or even a
single version of a product are subjected to the
product life cycle. Ex Xerox, Polaroid

7. 7
Nurturing a perceived difference

8. 8
Young & Rubicam’s Brand Asset Valuator
(BAV)
• There are 4 key components of BAV
• Each pillar is derived from various measures that relate
to different aspects of consumers’ brand perceptions
and that together trace the progression of a brand’s
development.
– Differentiation
– Relevance
– Esteem
– Knowledge

9. 9
Cont…
• ‘Brand Strength’ (Differentiation + Relevance)
provides the potential for brand equity growth
• ‘Brand Stature’ (Self Esteem + Familiarity)
measure the brand’s current strength

10. 10
Cont…

11. 11
Room to grow...
Brand has power to build relevance.
D > R
0
10
20
30
40
50
60
70
80
90
100
Differentiation Relevance
Healthy Brands Have Greater
Differentiation than Relevance
Examples:
Harley Davidson

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R > D
0
10
20
30
40
50
60
70
80
90
100
Differentiation Relevance
Uniqueness has faded; price becomes
dominant reason to buy.
Brands with greater Relevance than Differentiation
Are in Danger of Becoming Commodities
Examples:
Minute Maid

13. 13
E > K
0
10
20
30
40
50
60
70
80
90
100
Esteem Knowledge
Brand is better liked than
known.
More Esteem than Knowledge Means, “I’d like
to get to know you better”
Examples:
TAG Heuer

14. 14
K > E
0
10
20
30
40
50
60
70
80
90
100
Esteem Knowledge
Brand is better known than liked.
Too Much Knowledge Can Be Dangerous:
“I know you and you’re nothing special”
Examples:
Chrysler

15. 15
Power Leaders
New
Niche/
Unrealized Potential
Declining
Leaders
Unfocused
BRANDSTRENGTH
(Differentiationand
Relevance)
BRAND STATURE
Eroded
Brand Health Is Captured on the
PowerGrid
Base: USA Total Adults BAV 2000

16. 16
The Brand Asset Valuator® for Biscuits
from Rediffusion-Y&R offers insights into
the brand preferences of over 1,600
housewives in India. The tool sheds light on
not only the perception of individual biscuit
brands but also on their mother brands.

17. 17
Brand Asset Valuation (BAV) for
breakfast brands in India.
Source: Rediffusion Y&R

18. 18
Ways to preserve the superior image
• Renew the Product regularly-Ex-Detergent
• Integrate new and emerging needs while
holding onto the same positioning Ex-Car
• Constantly confirm one’s superiority by
extending lines Ex-Sampoo
• Adapting to one’s own customers

19. 19
Investing in Communication
• Communication is the brand’s weapon
• It can only reveal the basic differences hidden
by the packaging which often looks the same
among competitors, especially when this
similarity is precisely sought by DOBs to creat
confusion.
• Advertising is a barrier to entry
• Innovation and Advertising produces added
value

20. 20
No one is free from price
comparision
Even if innovation and advertising do increase
added value, loyalty at all costs does not exist.
Customers can be both sensitive to the brand but
disloyal to it, estimating that the price of the
brand goes beyond the price span that they are
willing to pay for the product category, and
beyond the brand premium that seems reasonable
to them given the added satisfaction which is
expected. Distributors also have the same attitude.

21. 21
Creating entry barriers
Why are there hardly any DOBs in the drilling
machine market? Because Black & Decker makes it
economically impossible for them to enter the market.
DOBs sprout up when one or more of the following
conditions are fulfilled:
•there is a high volume in the market;
•there is little product innovation;
•brands are expensive;
•customers perceive little risk;
•customers make their choice essentially according to the
visible characteristics of the product;
•technology is accessible at low cost.

22. 22
Main Sources of entry Barriers
• The cost of the factors of production is the most
important, which leads to a long-lasting competitive
advantage. Ex-Dell&Decathlon
• Mastering technology and quality Ex-Procter &
Gamble, Gillette, l’Oréal and 3M.
• Domination through image and communication -Ex
Coca-Cola, Nike, Reebok and Adidas.
• Quickly using up all the aspects of a promising
concept through range extension is a method that
hinders the entry of competitors

23. 23
Cont…
• Putting a name on a product in itself yields a
uniqueness of offer and an added value that
competitors will lack
• Controlling the relationship with opinion
leaders is one of the key success factors for a
brand looking to the future
• Controlling distribution is also a major
handicap for new entrants
• The last barrier to entry is based on legality

24. 24
Defending against brand
counterfeiting
• As soon as a brand starts to enjoy success, it is
imitated: copies appear and multiply.

25. 25
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