11_Easy_Building Strong Brands

Building Strong Brands

• A brand is a name, term, sign, symbol, or design that identifies one seller's offering and differentiates it from competitors.
• Brands add value beyond functional and service attributes

How brands add value

• Simplifying decisions
• Signaling consistent quality
• Expressing consumer identity

The Roles of Brands

For Consumers

• Promise of Quality: Brands promise reliable benefits.
• Risk Reduction: Strong brands assure safe choices.
• Personal Meaning: Brands help consumers define themselves.

For Firms

• Brand as Competitive Advantage: Differentiation builds loyalty and premium pricing.
• Financial Asset: Established brands are valuable and sellable.
• Greater Marketing Efficiency: Trusted brands reduce costs for new offerings.

Brand Equity

• Brand Equity is the monetary value a brand adds, reflecting its premium on firm valuation and is part of "goodwill" on financial statements.

Brand Equity Measurement Methods

• Cost Approach: Summing brand-building expenditures.
• Market Approach: Comparing branded vs. unbranded revenues.
• Financial Approach: Discounting future brand-related cash flows.

Brand Power

• Brand power is the differential effect of brand knowledge on consumer response, leading to more positive thoughts, feelings, and actions.
• Strong brand power yields larger margins, greater loyalty, resistance to price competition, enthusiastic channel partners, and enhanced market communications.
• Successful branding relies on meaningful and unique advantages.
• Consumer experiences shape a brand through product usage, marketing, and interactions.
• Marketers invest in brand knowledge via communications and experiences to create favorable brand associations.
• Continuous innovation helps brands maintain leadership.

Brand Audits and Tracking

• Brand Audits periodically assess brand "health" and leverage opportunities.
• Brand Tracking quantitatively measures brand perception, performance, and outcomes over time.

Designing Brand Elements and Associations

Brand Mantra

• Articulates a brand's essence in 3-5 words that guide employees and filter decisions.
• It should communicate uniqueness, be concise, and inspire employees.

Brand Elements

• Includes names, logos, symbols, slogans, and packaging.
• The goal is to create memorable, meaningful, and likable designs that are adaptable and protectable.

Secondary Associations

• They leverage associations from other entities like the company, country of origin, distribution channels, other brands, celebrities, or endorsements.
• These associations reinforce brand meaning, provide credibility, are risky if associations become negative.

Brand Personality

• This has human traits attributed to a brand, aligning with consumers' self-concept.
• Traits vary across countries.

Brand Hierarchy Design

Brand Portfolio Concept

• A portfolio is a set of all brands and lines offered in a category, aiming to cover the market while minimizing competition between brands.
• Each target segment should have a tailored offering, avoiding overlap to prevent cannibalization.

Three Main Portfolio Approaches:

• House-of-Brands: Each product has its own brand name which prevents failure from hurting other brands

• Branded House: A single brand for all products to lower costs and create synergy but product failures can damage the brand's image

• Sub-Brand (Hybrid): Combines a corporate and individual name to leverage credibility and allow for distinct positioning.

• Flagship Products: Serve as the "face" of the brand and shape perceptions.

• Branded Variants: Offer distinct lines for different channels to tailor brand presence.

• Optimal Size: Requires brands to appeal to a sufficiently large segment to avoid confusion. If the portfolio can raise profits by dropping a brand, then the portfolio might be too large.

Cobranding

• Cobranding involves marketing two or more brands together.

Cobranding Examples:

• Same-Company: Promoting cereals and yogurt together is an example
• Joint-Venture: Co-developed products by two firms.
• Multiple-Sponsor: Three or more brands partner.
• Retail: Two stores share a location
• Ingredient Branding: Is a specific feature of ingredients that are included and promoted as part of a whole product.

Brand Management Over Time

Brand Repositioning

• Should be done if the market changes, new competition emerges, or customer interest declines.

Repositioning Process

• Assess current brand equity, identify strong associations, and address negative perceptions.

Repositioning Strategies

• "Back to Basics": Return to core values if marketing fails.
• "Reinvention": Completely change the brand image if the old positioning doesn't work.
• Balance Old & New: Attract new segments without alienating loyal customers.

Brand Extensions

• Brand Extensions use an existing brand to launch a new product in a different category or price tier.
• Differs from Line Extensions, which vary flavors or forms within the same category.

Reasons for Brand Extensions

• Leverage Brand Equity: Reduces launch costs through awareness.
• Speed Market Acceptance: Retailers favor known brands.
• Enhance Parent Brand: Successful extensions reinforce brand meaning.

Risks of Brand Extensions

• Fit: Poorly fitting extensions confuse customers and weaken the brand (brand dilution).
• Cannibalization: Sales of new products may replace existing products sales.
• Forfeited New Brand Opportunity: Extensions may prevent creating an entirely new brand

Managing Brand Crises

• Crises are caused by negative publicity, product tampering, consumer backlash, or external events
• These events lead to sales drops, tarnished credibility, or long-term damage.

Crisis Strategies Include

• Swift, sincere Response: The brand must publicly acknowledge the problem and commit to solutions
• Empathy: Brands should aim to understand shifting consumer needs and should address needs authentically.
• Value Focus: Enhancing brand value keeps customers loyal
• Adhere to Brand Promise: Reinforcing the brand mission prevents brands from looking opportunistic.

Key Aspects of Luxury Branding

• Luxury items command significantly higher prices and emphasize craftsmanship, heritage, and authenticity.
• Traditional luxury focused on status; modern luxury combines personal pleasure and exclusivity.
• Luxury means growth in emerging markets and adapting to local preferences.
• They require heritage, uniqueness, and the quality to maintain long-term appeal.
• Luxury brands sell an aspirational dream with product excellence and prestige.
• Consistent Premium Experience brands must reinforce a high-end image through product, pricing, distribution, service, and communications.
• Brands must have a clear aspirational Image.
• Broad Competitive Frame since luxury products often compete across various categories.
• Legal Protection against trademark infringements is necessary.
• Luxury brand elements should exude craftsmanship, heritage, and status. Luxury consumers value personal interactions, VIP access, and brand workshops.
• Luxury brands blend digital and in-store experiences.
• Social media is used to communicate with wealthy customers.
• Luxury e-commerce is used to expand global reach and fight counterfeits.

A brand is a name, term, sign, symbol, or design that identifies one seller's offering and differentiates it from competitors. Brands add value beyond functional and service attributes by simplifying decisions, signaling consistent quality and expressing consumer identity. Brand Equity is the monetary value a brand adds, reflecting its premium on firm valuation.