Unit 7: Brand Strategy PDF

Unit 7 Brand Strategy  Brand Strategy “A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.” - Seth Godin  Unit 7...

Unit 7 Brand Strategy  Brand Strategy “A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.” - Seth Godin  Unit 7 - Contents 1. The role of the Brand in Marketing Strategy 2. Brand Positioning 3. Identity and Brand Differentiation 4. Brand Management 5. Brand Equity 6. Conclusion Market-Based Management Copyright 2022 Evolution of Starbucks’ Logo and Brand Vision When is it a bad idea for companies to have a logo without their name? When is it a good idea? What can be the benefits of this strategy? Market-Based Management Copyright 2022 Intel vs AMD Low-Price Processors Can you name other companies that created products for a different segment just to compete with a new product from a competitor to keep market share? Market-Based Management Copyright 2022 Procter & Gamble’s Brand Portfolio Market-Based Management Copyright 2022  Unit 7 The role of the Brand in Marketing Strategy Market-Based Management Copyright 2022 1. The role of the Brand in Marketing Strategy From a legal perspective “An EU trade mark may consist of any signs, in particular words, including personal names, or designs, letters, numerals, colors, the shape of goods or of the packaging of goods, or sounds, provided that such signs are capable of: distinguishing the goods or services of one undertaking from those of other undertakings; and being represented on the Register of European Union trade marks (‘the Register’), in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor”. Source: REGULATION (EU) 2017/1001 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 June 2017 on the European Union trademark 1. The role of the Brand in Marketing Strategy From a marketing perspective A brand is “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”. Source: AMA-American Marketing Association They also represent consumers’ perceptions and feelings, emotions or intangibles. 1. The role of the Brand in Marketing Strategy 1. Differentiation 2. Positioning 3. Customer loyalty Source: Interbrand 4. Recognition 5. Perceived value 6. Brand extension 7. Emotional identity 8. Credibility and trust Source: Kantar-Branz 1. The role of the Brand in Marketing Strategy Legal Options and Business Strategies Registration and Protection: The owner of a Sale: Trademarks can be bought and sold, like any other asset. registered trademark has exclusive rights to it. Assignment: The assignment of a trademark implies that the owner Mortgage and Security: A trademark may be subject transfers all rights over the trademark to another person or entity. to a mortgage or used as security in commercial transactions. This implies that the owner can use it as License: The owner of a trademark may grant third parties licenses to use collateral to obtain financing while still retaining the trademark under certain conditions. These licenses may be exclusive or ownership of the trademark. non-exclusive and allow the licensee to use the mark without transferring ownership of the mark. Opposition and legal defense: A trademark owner may take legal action against those who infringe its Franchising: Trademarks can be part of a franchise agreement, where the rights, either by unauthorized use of the trademark or franchisor allows the franchisee to use its trademark, business model, and by registering a similar trademark that may confuse know-how to operate under the brand name. consumers. Cobranding is when two or more brands collaborate on a product or service, Abandonment or Forfeiture: The trademark owner joining forces to leverage their values, reputations, and audiences. Legally, may voluntarily abandon it, meaning he gives up his cobranding requires clear agreements between the parties to regulate the rights. This action can be done explicitly through a shared use of the brands and each brand's rights and obligations. declaration before the SPTO (Spanish Patent and Trademark Office) or implicitly if the trademark is not used for a prolonged period (usually five years), which may lead to its cancellation.  Unit 7 Brand Positioning 2. Brand Positioning Strategy A brand strategy is a roadmap that outlines target customers’ needs, the benefits they seek, and the prices they are willing to pay for the benefits relative to competitive offerings. Brand positioning guides a company’s product offerings, service strategy, communication plan, pricing strategy, and distribution plan in a way that meets target customers’ needs Market-Based Management Copyright 2022 2. Loctite – Quick Metal Brand Positioning Data makes an argument more credible. Should we always show customers all the data about our product to convince them it’s the best fit for them? Could this hurt the image more than help it, depending on the segment? Market-Based Management Copyright 2022 2. Loctite’s Expanded Brand Positioning Strategy The company can adjust elements such as its target customer definition, brand name, advertising and communication, pricing, and packaging. Each element works together to communicate customer value, a synergy only possible with a clear understanding of target customers and their most important needs. Market-Based Management Copyright 2022 2. Loctite’s Brand Positioning Strategy Evolution Market-Based Management Copyright 2022 2. Brand Positioning Strategy, Marketing Efforts, and Financial Performance Market-Based Management Copyright 2022 2. Sales Increased Based on Strong Brand Recognition Marriot – Fairfield Hitachi TV Inn Kellogg’s – Corn Flakes Decades of research covering hundreds of companies and brands show a strong connection between brand positioning strategy and financial performance. Market-Based Management Copyright 2022  Unit 7 Identity and Brand Differentiation Market-Based Management Copyright 2022 3. Brand Encoding Strategies Market-Based Management Copyright 2022 3. Coca-Cola Brand Differentiation Why did Coke decide to not use their logo on Powerade? Strong brands elicit positive product evaluations, exhibit product awareness, and project a consistent image or personality. Market-Based Management Copyright 2022 3. Eliminating Confusing Options Brand differentiation helps companies appeal to target customers. Differentiating goes beyond simply offering added benefits. It involves enhancing the benefits consumers desire and eliminating those they do not. Additional benefits need to be clarified for customers, who may want simple rather than complex products and services. Have you ever been so overwhelmed by the options of a business you end up getting nothing? Market-Based Management Copyright 2022  Unit 7 Brand Management Market-Based Management Copyright 2022 4.1 Decisions on use and ownership Decisions on use Decisions on ownership With brand Mixed decisions Intermediary Part of the production Without Part of the production with intermediary’s brand Manufacturer with own brands brand Source: Loyola University Marketing Management Teaching Team 4.1 Ownership: advantages of manufacturing own brands For the distributor For the manufacturer Buying price could be lower Better relationship with the since there are no promotion distributor. Better mutual knowledge. expenses. More exchange of information. Selling price could also be Common strategies. lower. Takes advantage of the economies of Guaranteed consumer loyalty scale by increasing production. as they can’t find the brand in Useful to enter new markets and other distributors. enables opening new international Allows the possibility of markets, under the control of big changing the supplier distributors. without affecting the Tool to fight against competitors by consumer. approaching the distributors and decreasing the volume of other manufacturers. 4.2 Decisions on number of brands and brands by category (Brand Architecture) Brand architecture is the structure that organizes, hierarchizes and relates the different brands that a company has in its portfolio. Main Mixed Strategies Strategies Branded Endorsed House brand House of Asymmetrical Brands or mixed 4.2 Brand Architecture Branded It consists of the use of a single trademark at a corporate and commercial level in all products, House services and lines of business. 4.2 Brand Architecture It is the opposite model of the previous one. In this House of case, different and independent brands coexist for Brands different lines of business and at the corporate level 4.2 Brand Architecture It combines the corporate brand and the product or company Endorsed brands, through the explicit support of the former to the latter. This model makes it possible to combine the equity of the Brand corporate brand with that of the companies or products. In this way, the feedback of meanings is facilitated: the corporate brand provides vision, confidence, capacity and ability and is nourished by the territory and specific attributes of each brand it endorses.  4.2Brand 4.2 Brand Architecture Architecture This approach is based on different architecture models Asymmetrical for different lines of business. This diversity is often the result of a historical process or the result of acquisitions. or mixed In other cases, it comes from a monolithic system that has expanded beyond its core activities into new segments or market areas. In such cases, separate brands are managed for the new markets, but at the same time the monolithic brand is maintained for the group's historical and core activities. 4.3 Decisions on the number of brands in a category Strategies Explanation Examples PepsiCo: In Spain, offers several brands in the same price range in the One or more brands in the same category Essential Brands salty snacks category, such as Lay's and Doritos. Both are core brands, with similar prices. but each appeals to different preferences within a similar price range. The company introduces second brands Telefónica offers Movistar as its main brand in the Spanish that coexist with more recognized or telecommunications sector, and O2 acts as a second brand, offering Second Brands premium brands, usually to offer more similar services, but with a simpler and cheaper proposition, coexisting affordable options or for different market in the same telecommunications market. segments. Brand extensions are based on leveraging Tous is mainly known for its jewelry offering, but has made brand Brand Name Extensions the prestige or identity of a core brand to extensions into handbags and accessories, colognes and baby items. expand into new product categories. Source: Loyola University Marketing Management Faculty 4.3. Decisions on the number of brands in a category: Extensions Market-Based Management Copyright 2022 4.3. Decisions on the number of brands in a category: Second Brand Market-Based Management Copyright 2022  Unit 7 Brand Equity Market-Based Management Copyright 2022 Interbrand 2024: World’s Most Valuable Brands How did the companies achieve their value? What are their brand assets? What are their brand liabilities? 5. Brand Assets What are other examples of Brand Assets? BMW– Emotion Coca Cola – Awareness Apple – Brand Loyalty Rolex – Price Premium Market-Based Management Copyright 2022 5. Brand Liabilities What are other examples of Brand Liabilities? Volkswagen (Dieselgate): In 2015, it Primark (Rana Plaza collapse): In H&M(greenwashing): labels on their was discovered that Volkswagen had 2013, the collapse of the Rana Plaza environmental impact include false manipulated the emissions tests of its building in Bangladesh, which housed information. Of the 600 garments with diesel engines to meet environmental textile factories working for several such labels that appeared on H&M's UK standards. The company installed fashion brands, including Primark, left website last week, 100 included software that made the cars pass more than a thousand dead. The misrepresented information that led laboratory tests but emitted much more tragedy revealed the appalling working people to believe they were more nitrogen oxide in actual conditions than conditions in factories supplying many sustainable but were barely allowed. low-cost clothing brands. distinguishable from Conscious" items. Source: Loyola University Marketing Management Faculty 5. Liabilities “It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.” -Warren Buffet, CEO of Berkshire Hathaway Market-Based Management Copyright 2022 5. Brand Assets Scorecards Market-Based Management Copyright 2022 5. Brand Liabilities Scorecards Market-Based Management Copyright 2022 5. Brand Scorecard Market-Based Management Copyright 2022  Unit 7 Conclusion Market-Based Management Copyright 2022 6. Segmentation and Scarce Resources “If people believe they share values with a company, they will stay loyal to the brand.” - Howard Schultz, former CEO of Starbucks Are there companies you are loyal to because of your shared values? Are there companies that have products/services that appeal to you, but you prefer not to buy them because the company's values don’t align with yours? Market-Based Management Copyright 2022 6. Conclusion A firm’s brand strategy is a roadmap that outlines target customers’ needs, the benefits they seek, and the prices they are willing to pay for the benefits relative to competitive offerings. Brand positioning guides a company’s product offerings, service strategy, communication plan, pricing strategy, and distribution plan in a way that meets target customers’ needs. Brand differentiation is a critical force for competitive positioning. It involves enhancing the benefits consumers desire and eliminating those they do not. Brand equity is the value a brand adds beyond that of a generic product or service. It is measured as the premium customers will pay for a branded versus unbranded offering. A critical lever for brand positioning is the benefits consumers perceive (product quality, service quality, relationship quality, and brand equity) relative to the costs they incur (perceived price, transaction cost & production cost, financial & social risk, and self-concept alignment). Companies with brand assets (brand awareness, emotional connection, brand loyalty, product line extension and price premiums) outweighing their liabilities (customer dissatisfaction, product or service failure, questionable practices, poor record on social issues, negative associations) produce greater sales growth and customer commitment than their competitors. Ways to your brand name and intellectual property: Copyrights, trademarks, U.S. patents, licensing and assignment. Market-Based Management Copyright 2022