Strategic Brand Management Chapter 1

Strategic Brand Management: Building, Measuring, and Managing Brand Equity

• The book is titled Strategic Brand Management: Building, Measuring, and Managing Brand Equity, Fifth Edition, Global Edition
• The book was published by Pearson in 2020
• The authors are Kevin Lane Keller and Vanitha Swaminathan
• The first chapter is titled "Brands and Brand Management"

Learning Objectives

• Define "brand," how brand differs from a product, and explain brand equity
• Summarize the importance of brands
• Explain how branding applies to various entities
• Describe the main challenges and opportunities in branding
• Identify the steps in the strategic brand management process

What is a Brand?

• Brand elements are crucial for creating a brand
• Brands are differentiated from products
• Brand elements differentiate a brand

Brand Elements

• Brand elements include name, logo, symbol, package design, or other characteristics that identify a product
• Brand elements distinguish a product from other products

Brands Versus Products

• Products offer five levels of meaning: core benefit, generic product, expected product, augmented product, and potential product
• A product is anything offered for market attention, acquisition, use, or consumption
• A brand goes beyond a product, offering differentiating dimensions

Brands Versus Products (continued)

• Differences between a product and a brand may include rationality and tangibility (related to performance) or symbolism and emotion (related to brand representation)

Figure 1-2: Ten Firms Rated Highly in Innovation

• The ten companies are Apple, Netflix, Square, Tencent, Amazon, Patagonia, CVS Health, The Washington Post, Spotify, and NBA
• This list was based on Fast Company's 2018 List of Most Innovative Companies

Why Do Brands Matter?

• Brands are important for both consumers and firms

Consumers (1 of 3)

• Brands help consumers identify the source and maker of a product
• Brands simplify product decisions
• Brands lower search costs
• Brands set reasonable expectations

Consumers (2 of 3)

• Brands can signal product characteristics and attributes
• Product attributes can be categorized as search goods, experience goods, and credence goods

Consumers (3 of 3)

• Brands can reduce product decision risks
• These risks are categorized into functional, physical, financial, social psychological, and time

Firms

• Brands help firms simplify product handling and tracing
• Brands help firms organize inventory and accounting records
• Brands offer legal protection for unique product features
• Brands provide predictability and security of demand
• Brands create barriers to entry for competitors
• Brands provide a means for securing competitive advantage

Figure 1-3: Roles That Brands Play

• Consumers: Identify source, reduce risk, reduce search costs, make a promise
• Manufacturers: Simplify handling, protect unique qualities, signal quality

Figure 1-4: Brand Value as a Percentage of Market Capitalization

• Shows brand values as a percentage of overall company value for several different companies

Can Anything Be Branded? (1 of 2)

• Physical goods
• Services

Can Anything Be Branded? (2 of 2)

• To brand a product, tell consumers who the product is and what it does
• Marketers should give consumers a brand label and a meaning for the brand

Physical Goods

• Physical goods are traditionally associated with brands
• Examples include Mercedes-Benz, Nescafé, and Sony

Services

• Branding a service can signal that the service offering is special

Retailers and Distributors (1 of 2)

• Brands generate consumer interest, patronage, and loyalty
• Brands create an image and positioning in an industry
• Brands yield higher price margins, increased sales volumes, and greater profits

Retailers and Distributors (2 of 2)

• Retailers introduce their own brands through store names, new names, or combinations
• Private label brands increase customer loyalty and generate higher margins

Digital Brands

• Some of the strongest brands are born online (e.g., Amazon, Google, Facebook, Twitter)
• Brand building is critical for online marketers, who need unique brand aspects and satisfactory performance

People and Organizations

• A product category can be a person or organization
• Naming of people or organizations as brands is usually straightforward
• The key is that people outside an industry know the person or organization and their skills

Sports, Arts, and Entertainment

• A special case of marketing people and organizations as brands exists in the sports, arts, and entertainment industries
• Sports marketing is sophisticated, and branding is valuable for arts
• Movies are often branded with recurring characters and stories

Geographic Locations

• Increased mobility of people, businesses, and tourism contribute to the rise of place marketing
• Cities, states, regions, and countries promote themselves through advertising and other tools

Ideas and Causes

• Numerous ideas and causes are branded, especially by nonprofit organizations
• These can be captured in a phrase, slogan, or symbol

What are the Strongest Brands?

• Strongest brands are generally best known and highly regarded
• Brand relevance and differentiation are crucial for success

Figure 1-5: Twenty-Five Most Valuable Global Brands (1 of 2) and (2 of 2)

• Data regarding top 25 most valuable global brands list
• Gives information about ranking, company name, industry, value, and percentage increase or decrease from the previous year

Branding Challenges and Opportunities

• Unparalleled access to information and new technologies
• Downward pressure on prices
• Ubiquitous connectivity and the consumer backlash
• Sharing information and goods
• Unexpected sources of competition
• Disintermediation and reintermediation
• Alternative sources of information about product quality
• Winner-takes-all markets
• Media transformation
• Importance of customer-centricity

Unparalleled Access to Information and New Technologies

• Technology created vast amounts of information
• Brand marketers may use innovative features to design better experiences for customers

Downward Pressure on Prices

• Lower search costs allow consumers to switch more easily to different brands, leading to more product commodification
• This challenges brand marketers

Ubiquitous Connectivity and the Consumer Backlash

• Ubiquitous connectivity makes consumers vulnerable to intrusions
• Backlash from consumers can arise from increased resistance to marketing attempts
• Software may thwart marketing efforts to reach consumers

Sharing Information and Goods

• Social media platforms allow consumers to connect and communicate preferences
• But platforms face scrutiny by regulatory agencies
• Many platforms have not obtained permission for customer data use
• Peer-to-peer sharing (e.g., Napster, Airbnb, Zipcar)

Unexpected Sources of Competition

• The digital world allows easier entry into new markets

Disintermediation and Reintermediation

• Disintermediation is the decline or removal of intermediaries
• Reintermediation introduces new intermediaries performing similar functions or additional roles

Alternative Sources of Information about Product Quality

• The Internet provides alternative ways for consumers to learn about products and their quality
• This reduces reliance on brands as a quality signal
• Brands need to adapt to trends and changing customer desires

Winner-Takes-All Markets

• Winner-take-all markets make it more likely that leading brands in categories will be chosen over other options

Media Transformation

• Traditional advertising media has eroded
• Interactive and nontraditional media has emerged
• Marketers are spending more on new forms of communication (e.g., social media, paid influencers, sponsored bloggers)

The Importance of Customer-Centricity

• Brand equity can be vulnerable if product and service claims aren't verified by actual experience
• Examples of experiences include review forums, reviews from peers, and online word-of-mouth

The Brand Equity Concept

• Differences in outcomes stem from "added value" endowed to a product
• Added value can be created in many ways
• Brand equity provides a framework for interpreting strategies and assessing value
• Value can be exploited to benefit firms

Strategic Brand Management Process

• Identifying and developing brand plans
• Designing and implementing brand marketing programs
• Measuring and interpreting brand performance
• Growing and sustaining brand equity

Figure 1-10: Strategic Brand Management Process (Steps and Key Concepts)

• Flowchart showing steps and key concepts of the brand management process

Designing and Implementing Brand Marketing Programs

• Choosing Brand Elements
• Integrating Brands into Marketing Activities
• Leveraging Secondary Associations

Measuring and Interpreting Brand Performance

• Implementing a brand equity measurement system, including brand audits, brand tracking studies, and brand equity management systems

Growing and Sustaining Brand Equity

• Defining Brand Architecture
• Managing Brand Equity over Time
• Managing Brand Equity across Boundaries, Cultures, and Market Segments

Dive into the essentials of brand management with this quiz based on Chapter 1 of 'Strategic Brand Management: Building, Measuring, and Managing Brand Equity'. Understand key concepts such as brand definitions, brand equity, and the strategic brand management process. Test your knowledge on brand elements and their significance in differentiating a brand from a product.