Brand Management – M1 Session 5 PDF

Brand Management – M1 Session 5 Séance 1 Isabelle Ulrich [email protected] 1 Sessions overview S1. Introduction: what’s a brand? S2. Build strong brands S3. Evaluate a brand : key analytical tools S4. Key analytical (ctd). Create a new brand S5. Growing the brand: management strategies S6....

Brand Management – M1 Session 5 Séance 1 Isabelle Ulrich [email protected] 1 Sessions overview S1. Introduction: what’s a brand? S2. Build strong brands S3. Evaluate a brand : key analytical tools S4. Key analytical (ctd). Create a new brand S5. Growing the brand: management strategies S6. Group-Work on case-study S7. Presentation of case-study & debrief S8. Brand portfolio strategic management S9. Company conference S10. Project ‘Brand-audit’ presentation 2 Outline S5 : Growing the brand 1. 2. 3. 4. 5. Brand life-cycle: defying time Modifying and improving brand image Brand stretching: line vs brand extension Focus on line extension Focus on brand extension 3 1. Brand life-cycle: defying time Brands can grow, grow… and not die ! 1854 1898 1743 4 Brand vs product life-cycle Product life-cycle 9 times out of 10, brands die because they are killed (by firms) 5 3 phases in brand life-cycle Source : Lewi, L’Odyssée des marques. 1. Time of héroism 2. Time of wisdom 3. Time of myth DIFFERENCE MESURE CONSCIENCE 0-20 years 21-50 years 51 years + 6 6 Brand as a myth By growing, expanding and maturing, brands acquire mythic dimensions – Myths are universal – Myths imply aims, missions – Myths are stories => develop brand content Ex: Coca Factory ad , Cartier l’Odyssée ad www.youtube.com/watch?v=yaBNjTtCxd4a 7 Brand as « Sleeping beauty » Brands can ressuscite But sometimes failures…. 8 2. Modifying and improving brand image Different ways (non exclusive) to grow the brand: 1. Modify and improve brand positioning 2. Modify reference product of the brand 3. Improve product packagings 4. Extend the consumer target 5. Renew brand communication 9 2.1.Modify and improve brand positioning Improve positioning of functional brands via innovation on their existing POD: new ingredient claim, improve the benefit thanks to technology Improve positioning via adding new POD responding to consumers insights, coherent vs previous POD, and following consuming trends: – New unique freshness perfume – Fashionable city sport shoes (Mostro, Speed Cat) Reposition with new POD 10 2.2. Modify reference product of the brand Change reference product formulation or design without changing the positioning – Dim up – BN in 1989 change product design to better attract kids 11 2.2. Modify reference product of the brand Product modifications are small-scale changes to existing parent product, aiming at serving the same target market better by increasing the distinctiveness of the offering (within the current product range). Typically new: – Flavors, colors, looks.. – Ingredients (e.g.added fibre, C-vitamin) or functionalities (bio, eco-friendly) 12 2.3. Improve products packagings 13 2.4. Extend the consumer target Conquest of lost consumers – Direct marketing plans Extend to new targets – New age target Mercedes and 30/45 with 4x4 – Extend to adults / kids 14 2.4. Extend the consumer target (ctd) Extend to the opposite sex – To men – To women 15 2.5. Renew brand communication 16 3. Brand stretching: line vs brand extension To grow the brand by launching new products, 3 possible options : 1. Develop a new brand 2. Launch under an existing brand 3. Use a combination of a new brand and an existing brand Cases 2 & 3: Brand stretching=Brand extension 2 types of extension: – Line extension – Brand extension 17 Line extension definition Line extension: 65% of launches Using an existing brand to launch a new product in a product category where the brand is already present (Definition: Tauber, 1988) Source: Research International, 2004) 18 Brand extension definition Brand extension: 17% of launches Using an existing brand to launch a product in a different product category from those where the brand is already present 1964 : Yogurth 0% 1997 : Light Biscuits (Definition: Tauber, 1988) (Source: Research International, 2004) 2000 : Mineral water 0 sodium 19 Overview of extensions Academics distinguish between: Different Similar The nature of the product Different Similar Complement to product line Line extension New formats, varieties Line extension Brand extension Source: Cegarra & Merunka (1993) 20 4. Line extension 2 types of line extension: horizontal, vertical Horizontal extension Definition Examples Use of an existing brand to launch a product of similar quality and price to those of the existing brand in the same product category New formats New varieties Same function, different nature Same nature, different function Vertical extension Downward: Use of an existing brand to launch a product with lower price levels/quality Upward: Use of an existing brand to launch a product with higher price levels/quality Gap Warehouse: Price < 30% Logan by Renault (€7,600) Price < 50% 1664: Price > 42% vs Kronenbourg Carte d’Or Lenôtre Velsatis model > 25% Laguna 21 Vertical extension can be two-way Upward and downward stretch: Price Quality 22 Horizontal line extension: pros and cons Pros – – – – – – – Can expand target (market share increase) Consolidates market share More opportunities for brand contact and purchase Anchors the brand in its category, clearer positioning Helps build name recognition and image of parent brand Facilitates product launch with distributor & consumers Increased shelf space and visibility Cons – – – – a few risks Creates confusion among consumers (if too much choice) Major risk of cannibalisation Costly strategy Distributor resistance (proliferation of references) 23 Horizontal line extension: keys to success Strong parent brand: awareness and image (strong, positive and unique associations) Consistency between - new product - parent brand => Which horizontal extensions possible here? 1 2 3 Respond to actual consumer needs and wants Marketing support (advertising, promotions) Field support 24 Upward vertical extension: pros and cons Pros: – Broader target: reach consumers in higher-margin segments – Enhances brand image: positive “halo” effect – Can strengthen brand equity – A way of gaining loyalty of current buyers (they will evaluate it more favourably than non-buyers) Cons some important risks – Possible dilution of parent brand image – Lower evaluation of parent brand after the upward extension – For functional brands with low price, upward extension will be judged unfavourably 25 Upward extensions: keys to success Parent brand: strong awareness and image Parent brand at medium price (not low) Consistency between extension/parent brand Distancing and differentiating line extension from parent brand: – With characteristics, application and use – Use endorser to legitimate: Carte d’or & Lenôtre recipe – Linguistic distancing Name of sub-brand + parent brand name as endorser – Distancing through different distribution network Capitalise on current consumers of the brand (who evaluate upward extensions more positively) 26 Downward extensions: pros and cons Pros: – Broader target: reach consumers in more affordable segments with large volumes – Democratization of the brand: more accessible image – Avoid cost of launching a new brand to reach that target Cons: many risks – Parent brand image is harmed, weakened brand equity – Devaluation of parent-brand products if extension has similar characteristics – Prestige brand: downward extension evaluated negatively by its consumers 27 5. Brand extension Is brand extension the key to success for firms? 28 Brand extension: pros… and cons 1/ Facilitate acceptance of new products – Enhance perceived image (transfer of positive associations of parent brand) – Lower risks for consumers – Facilitate distribution acceptance – Lower introduction & follow-up costs – Less costly in communication/promotion 29 Brand extension: pros… (ctd) 2/ Positive repercussions for parent brand – Clarify its positioning – Enhance parent brand image: strengthen existing associations, add new ones – Increase brand awareness – Help recruit new consumers to the franchise and increase market coverage 30 Brand extension: ….cons Can fail and hurt motherbrand image ? Can succeed but harm motherbrand image Cadbury with Smashed potatoes Can dilute brand image Between 500-800 brand licensing (mineral water.…) Not any more a high fashion luxury brand… 31 Brand extensions: keys to success Start with a strong brand – Awareness – Strong image: strong, positive, unique associations Satisfy a double objective – Coherence (fit) between extension and brand – Relevance of the extension in the category 32 Coherence and relevance can be measured via consumer research Coherence or Fit : 7-pt Likert scale Aaker & Keller, 1992 [Extended brand] corresponds to [brand] [Extended brand] seems logical for [brand] I feel that [extended brand] is very appropriate for [brand] Relevance of extension to the category 7-pt Likert scale Michel, 2005 [Product+brand] is well appropriates in the [products ] market Compared with what exists in the market, [product+ brand] corresponds most closely to my expectations Taking into account the other brands of [product], [product+brand] represents the most worthwhile offer Compared with what exists in the market, [product+brand] offers something new Compared with other [products] that I know, [product+ brand] offers something better 33 Brand extensions: keys to success (ctd) Start with a strong brand Satisfy a double objective – Coherence (fit) – Relevance Provide an innovation in the extension category Substantial marketing support 34 Developing a brand extension: process 1. Analysis of brand image 2. Identify possible extension categories – Internal definition of possible categories Benchmarking vs competition Identify extension limits and forbidden zone: Davidson target – Identify potential categories with consumer research Open questions on possible categories + Work on Davidson-type target 3. Evaluate potential of extension categories – – – Salience of favourable and unique associations of the brand in the categories Qualitative consumer study (establish hierarchy) Analysis of category potential (size, growth, mark-ups, etc.) and competitor analysis 35 The Davidson target: brand extension limits 36 Developing a brand extension: process (ctd) 4. Developing the brand extension concept in identified market(s) – Concept test: check relevance of the brand in the category and fit between extension and motherbrand 5. Define and develop brand extension mix – Positioning, product mix, price, distribution, promotion – Brand elements to maintain and to modify 6. Evaluate the brand extension mix Mix test: check attractiveness of mix, consistency and contribution in relation to parent brand, relevance to new category 7. Develop the launch marketing program and launch brand extension 37 Illustration: Bourjois extension in shower foams & deodorants in 1995 2 year project… product-range still exists in 2015 ! 38