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

Strategic Brand Management: Building, Measuring, and Managing Brand Equity Fifth Edition, Global Edition Chapter 12 Designing and Implementing Brand...

Strategic Brand Management: Building, Measuring, and Managing Brand Equity Fifth Edition, Global Edition Chapter 12 Designing and Implementing Brand Architecture Strategies Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objectives (1 of 2) 12.1 Define the key components of brand architecture 12.2 Define a brand-product matrix 12.3 Outline the principles of a good brand portfolio 12.4 Assemble a basic brand hierarchy for a brand Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objectives (2 of 2) 12.5 Describe how a corporate brand is different from a product brand 12.6 Explain the role of brand architecture in strengthening a brand’s value and a firm’s performance 12.7 Understand how sustainability initiatives, corporate social responsibility and green marketing can enhance a brand Copyright © 2020 Pearson Education Ltd. All Rights Reserved Developing a Brand Architecture Strategy (1 of 2) Brand architecture strategy – Helps marketers determine which products and services to introduce – Which brand names, logos, symbols, etc. to apply to new and existing products Copyright © 2020 Pearson Education Ltd. All Rights Reserved Developing a Brand Architecture Strategy (2 of 2) Step 1: Defining brand potential Step 2: Identifying brand extension opportunities Step 3: Branding new products and services Copyright © 2020 Pearson Education Ltd. All Rights Reserved Step 1: Defining Brand Potential Three important characteristics: – Brand vision – Brand boundaries – Brand positioning Copyright © 2020 Pearson Education Ltd. All Rights Reserved Step 2: Identifying Brand Extension Opportunities Brand extension is a new product introduced under an existing brand name – Line extension: New product introductions within existing categories – Category extension: New product introductions outside existing categories Equity implications of each extension needs to be understood in terms of: – Points-of-parity – Points-of-difference Copyright © 2020 Pearson Education Ltd. All Rights Reserved Step 3: Specifying Branding New Elements for Branding New Products and Services New products and services must be branded in a way to maximize the brand’s overall clarity – Branded house strategy ▪ Umbrella corporate or family brand for all its products – House of brands strategy ▪ Collection of individual brands all with different names Sub-brands – Brand extension in which the new product carries both the parent brand name and a new name Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Portfolios (1 of 3) Includes all brands sold by a company in a product category – Brand portfolio judged by its ability to maximize brand equity ▪ Any one brand in a portfolio should not harm or decrease the equity of the others ▪ Ideally, each brand maximized equity in combination with all others Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Portfolios (2 of 3) Reasons for introducing multiple brands in a category: Increase shelf presence and retailer dependence in the store Attract consumers seeking variety who may otherwise switch to another brand Increase internal competition within the firm Yield economies of scale in advertising, sales, merchandising, and physical distribution Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 12-3: Possible Special Roles of Brands in the Brand Portfolio 1. To attract a particular market segment not currently being covered by other brands of the firm 2. To serve as a flanker and protect flagship brands 3. To serve as a cash cow and be milked for profits 4. To serve as a low-end entry-level product to attract new customers to the brand franchise 5. To serve as a high-end prestige product to add prestige and credibility to the entire brand portfolio 6. To increase shelf presence and retailer dependence in the store 7. To attract consumers seeking variety who may otherwise have switched to another brand 8. To increase internal competition within the firm 9. To yield economies of scale in advertising, sales, merchandising, and physical distribution Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Portfolios (3 of 3) Flankers Cash Cows Low-End, Entry-Level, or High-End, Prestige Brands Copyright © 2020 Pearson Education Ltd. All Rights Reserved Flankers Protective or “fighter” brands – To create stronger points-of-parity with competitors’ brands Fighter brands must not be so attractive that they take sales away from higher-priced comparison brands – If connected to other brands in the portfolio, must not be designed so cheaply that they reflect poorly on other brands Copyright © 2020 Pearson Education Ltd. All Rights Reserved Cash Cows Despite dwindling sales, some brands are retained – Due to their sustainability with virtually no marketing support Milked by capitalizing on their reservoir of existing brand equity Copyright © 2020 Pearson Education Ltd. All Rights Reserved Low-End, Entry-Level, or High-End, Prestige Brands Sub-brands leverage associations from other brands while distinguishing themselves on price and quality Role of a relatively low-priced brand – To attract customers to the brand franchise Role of a relatively high-priced brand – To add prestige and credibility to the entire portfolio Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Hierarchies Brand hierarchy: – A useful means of graphically portraying a firm’s branding strategy ▪ By displaying the number and nature of common and distinctive brand elements across a firm’s products Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 12-5: Apple Brand Hierarchy Copyright © 2020 Pearson Education Ltd. All Rights Reserved Levels of a Brand Hierarchy Corporate or Company Brand Level Family Brand Level Individual Brand Level Modifier Level Product Descriptor Copyright © 2020 Pearson Education Ltd. All Rights Reserved Corporate or Company Brand Level Highest level of hierarchy Corporate image – Consumer associations to the company or corporation making the product or providing the service – Relevant when the corporate or company brand plays a prominent role in the branding strategy Copyright © 2020 Pearson Education Ltd. All Rights Reserved Family Brand Level Used in more than one product category – But is not necessarily the name of the company or corporation – Also called a range brand or umbrella brand If the corporate brand is applied to a range of products, then it functions as a family brand too If products linked to a family brand are not carefully considered, the associations to the family brand may become weaker Copyright © 2020 Pearson Education Ltd. All Rights Reserved Individual Brand Level Restricted to essentially one product category – Although multiple product types may differ Customization of the brand and all its supporting marketing activity If a brand runs into difficulty or fails, risk to other brands and the company is minimal Disadvantages of difficulty, complexity, and expense of developing separate marketing programs Copyright © 2020 Pearson Education Ltd. All Rights Reserved Modifier Level Must further distinguish brands according to different types of items or models – Modifier ▪ Designate a specific item or model type or a particular version or configuration of the product – Function of modifiers is to show how one brand variation relates to others in the same brand family – Help make products more understandable and relevant to consumers Copyright © 2020 Pearson Education Ltd. All Rights Reserved Product Descriptor Helps consumers understand what the product is and does – Helps define relevant competition in consumers’ minds In the case of a truly new product, introducing it with a familiar product name may facilitate basic familiarity and comprehension Copyright © 2020 Pearson Education Ltd. All Rights Reserved Designing a Brand Hierarchy (1 of 3) The challenge in setting up a brand hierarchy is to decide: – Specific products to be introduced for any one brand – Number of levels of the hierarchy to use – Desired brand awareness and image at each level – Combinations of brand elements from different levels of the hierarchy – Best way to link any one brand element to multiple products Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 12-6: Guidelines for Brand Hierarchy Decisions (1 of 2) 1. Decide on which products are to be introduced. – Principle of growth: Invest in market penetration or expansion v s product development according to R OI opportunities. er us – Principle of survival: Brand extensions must achieve brand equity in their categories. – Principle of synergy: Brand extensions should enhance the equity of the parent brand. 2. Decide on the number of levels. – Principle of simplicity: Employ as few levels as possible. – Principle of clarity: Logic and relationship of all brand elements employed must be obvious and transparent. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 12-6: Guidelines for Brand Hierarchy Decisions (2 of 2) 3. Decide on the levels of awareness and types of associations to be created at each level. – Principle of relevance: Create abstract associations that are relevant across as many individual items as possible. – Principle of differentiation: Differentiate individual items and brands. 4. Decide on how to link brands from different levels for a product. – Principle of prominence: The relative prominence of brand elements affects perceptions of product distance and the type of image created for new products. 5. Decide on how to link a brand across products. – Principle of commonality: The more common elements products share, the stronger the linkages. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Designing a Brand Hierarchy (2 of 3) Specific products to introduce Number of levels of the brand hierarchy Desired awareness and image at each hierarchy level Copyright © 2020 Pearson Education Ltd. All Rights Reserved Designing a Brand Hierarchy (3 of 3) Combining brand elements from different levels Principal of prominence Branding strategy screen Linking brand elements to multiple products Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 12-7: Branding Strategy Screen Copyright © 2020 Pearson Education Ltd. All Rights Reserved Corporate Branding Corporate Image Dimensions Managing the Corporate Brand Copyright © 2020 Pearson Education Ltd. All Rights Reserved Corporate Image Dimensions Common Product Attributes, Benefits, or Attitudes People and Relationships Values and Programs Corporate Credibility Copyright © 2020 Pearson Education Ltd. All Rights Reserved Managing the Corporate Brand Corporate Social Responsibility Corporate Image Campaigns Corporate Name Changes Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Architecture Guidelines Adopt a strong customer focus Create broad, robust brand platforms Avoid overbranding and having too many brands Selectively employ sub-brands Selectively extend brands Copyright © 2020 Pearson Education Ltd. All Rights Reserved