Brand Management: Meaning and Strategy

Overview of Brand Management

• Firms realize brand names are valuable assets
• Strong brands simplify decisions, reduce risk, and set expectations
• Brand management is integral to marketing, connecting all marketing touchpoints
• Brand managers build and enhance brands over time
• This chapter explores brand meaning, management, and market dynamics

Definition of a Brand

• The term "brand" comes from the Old Norse word "brandr," meaning "to burn"
• Livestock owners used brands to mark animals for identification
• Branding has distinguished goods from different producers for centuries
• The AMA defines a brand as a name, term, sign, symbol, or design to identify and differentiate goods/services
• Creating a new name, logo, or symbol technically creates a brand
• Managers view a brand as something that has created awareness, reputation, and prominence
• Brand elements help differentiate brands from products

Brand Elements

• Creating a brand involves choosing a name, logo, symbol, package design, or another identifier
• Brand elements identify and differentiate a product
• These elements are explained in detail in chapter five
• Brand names include letters, words, and alphanumeric characters that can be spoken
• Brand names simplify shopping, ensure quality and allow self-expression
• Brand marks are non-verbal elements
• Trade characters or logos such as Ronald McDonald or the Pillsbury Doughboy exemplify this
• Trademarks legally designate exclusive rights to a brand
• Packaging includes containers or wrappers

Brands versus Products

• A product is anything offered to satisfy a need or want
• Products can be physical goods, services, retail outlets, people, organizations, places, or ideas
• A product has five levels of meaning
• The core benefit level satisfies fundamental consumer needs
• The generic product level includes basic functioning attributes without distinguishing features
• The expected product level includes attributes buyers expect
• The augmented product level includes additional attributes that distinguish a product from competitors
• The potential product level includes possible augmentations and transformations
• Competition occurs at the product augmentation level
• A brand has a dimension that differentiates it from products satisfying the same need
• Differentiation can be rational/tangible (performance-related) or symbolic/emotional/intangible (brand representation)

Type of Brand Name

• Brands can be private, manufacturer/national, family, or individual
• Firms consider pros and cons when making branding decisions
• Generic products are unbranded and have plain labels with minimal advertising
• Food and household staples are common generic produtcs
• Consumers sometimes want generic substitutes for brand-name prescriptions
• Manufacturers' brands, also called national brands, shape most people's image of a brand
• These brands are owned by a manufacturer such as Hewlett-Packard, Sony, Pepsi-Cola, or Dell
• Private brands are brands retailers market themselves
• Wholesalers and retailers offer these brands
• Some manufacturers view private-label production as a way to reach more segments
• Family brands identify several related products, like Kitchen Aid appliances or Johnson & Johnson baby products
• Individual brands uniquely identify items
• Unilever markets Slim-Fast, Pond's, Sunsilk, Lifebuoy, and Dove separately

Why Do Brands Matter?

• Brands are important because of the value they bring for marketers, consumers, and firms
• Brands identify the product's source so consumers know who to hold accountable
• Brands reduce consumer search costs both internally and externally
• Brands create a promise, bond, or pact with the product maker
• Brands serve as symbolic devices, letting consumers project self-image
• Certain brands are associated with types of people
• Brands signal product characteristics
• Search goods have attributes like sturdiness and design that consumers can evaluate visually
• Experience goods like automobile tires require product trial
• Credence goods have attributes consumers can rarely learn like insurance coverage
• Brands are a signal of quality, especially for experience and credence goods
• Brands reduce consumer risk
• Functional risk refers to product performance not meeting expectations
• Physical risk refers to products that threaten the well-being of the user
• Financial risk refers to products not worth the price paid
• Social risk refers to products that cause embarrassment
• Psychological risk refers to products that affect the mental well-being of the user
• Time risk refers to products in which failure results in opportunity cost
• Brands help identify and simplify handling or tracing
• Brands legally protect unique features, like brand names, processes, and packaging

Importance of Legal Protection

• Trademarks protect brand names
• Patents protect manufacturing processes
• Copyrights and designs protect packaging
• Protecting brands insures firms can safely invest in brands and use valuable assets
• Branding endows products with unique, differentiating associations
• Brands signal quality to satisfied customers helping buyers choose again
• Loyalty provides demand security and barriers that make market entry difficult for other firms
• Brands offer competitive advantage and can't easily be copied
• Brands generate financial returns by influencing consumer behavior

What Can Be Branded?

• Brands reside in consumer's minds
• Branding is key to consumer perceptions of differences
• Beverages (Maxwell House Coffee and Perrier Water) and bath soap (Ivory) is branded
• Physical goods can be branded (Coca-Cola, BMW, and Nescafe),
• Services can be branded (Ethiopian airlines, British Airways and FedEx)
• Retailers and distributors can be branded (Tesco, Wal-Mart and Agora)
• Online products and services can be branded (Google and Amazon)
• People and organizations can be branded (Haile G/Selassie and National Geographic)
• Sports and entertainment can be branded (Star Wars, ESPN and Real Madrid)
• Geographic locations can be branded (Semen Mountains and Tiss Abay Falls)
• Ideas and causes can be branded (World Wildlife Fund)

A Brief History of Brand Management

• Brands predate industrialization, rooting in ancient history
• Historians say brands came to exist in ancient Rome
• Clay pots were made and sold in markets in Rome
• Crafted initials were carved into pots, becoming recognizable
• Consumers sought out specific craftsmens products
• Brands originated as pottery marks in ancient Rome
• Brand management has significantly evolved
• Companies started investing in intangible assets beginning in the 1870s when trademark laws changed
• Laws legally protected brands
• Companies invested in patents and trademarks
• Business and competition increased over time
• Industries needed to differentiate products leading to brand management
• Competition led to sophisticated management techniques
• Strong brands created value and businesses diversified
• Growth requires significant time and money and has no guarantee
• Companies acquire brands instead of building them
• Loyalty offers opportunities in other categories
• Product categories had to be managed separately
• Brand management made firms bring every category to better management

Key point of Brand Management

• Corporations needed brand managers to focus different brands
• Professionals across product categories tend to lose focus
• Brand management as we know it took shape and drives brands
• Brand management does not replace traditional functional structure
• Brand management has challenges and opportunities for brand managers
• Customers are increasingly experienced in marketing
• New brand names are being identified with different product similarities
• Media fragmentation has caused new interactive media to emerge
• Brand extensions provide a formidabble opposition for brands

Deregulation effects

• Globalization increases competition
• Low priced competitor is market penetration
• Some industries have become deregulated

Greater Accountability

• Stock analysts value strong earnings reports
• Marketing managers have to make short term vs long term decisions
• Quick job turn overs are common

The Brand Equity Concept

• Brand equity is the difference between assets and liabilities
• Liabilities increase cost and liabilities
• Brand Equity Brand Equity = Brand Assets – Brand Liabilities
• Creates value
• Creates common denominator
• Can manifest or be exploited

Strategic Brand Management

• Strategic brand management builds, measures and manages brand equity
• Process consists of four main steps -Identifies brand positioning and values -Plans brand implementing market programs -Measures interpreting brand performance -Growing sustaining brand equity

Strategic brand management process steps

• Understands brand
• Uses interlocking models -Brand positioning model -Brand resonance model -Brand value chain

Building Brand Equity Factors

• How brand elements are mixed and matched
• How marketing activities and program are integrated
• Indirectly transferred associations by linking to other entities

Considerations in building brand equity factors

• Choosing Brand Elements- Uses brand names and logo
• Integrating the Brand- contributes through marketing
• Leveraging Secondary Associations- third and final way to build brand equity is to leverage secondary associations

Managing Brands

• Managers need equity measurement systems
• It is important to measure to determine how to evaluate a brand's position
• Have equity from both firm and consumer to maintain the brand associations

A brand equity management system

• Improves brand equity
• Implement the brand equity to improve use -Brand equity charters, assembling equity reports and defining responsibilites

Maintaining and Expanding Brand Equity

• Brand Architecture -Should be for corporate concerns and adjust to geographical locations

• Understand key concepts.

• Brand portfolios

• Brand hierarchy

• Manage Time and Market -Requires long term in the market