Managing Brands.pdf

Managing Brands The Role of Brands Identify the maker Simplify product handling Organize accounting Offer legal protection Name-> Reg. Trade Mark Manufacturing Process-> Patents...

Managing Brands The Role of Brands Identify the maker Simplify product handling Organize accounting Offer legal protection Name-> Reg. Trade Mark Manufacturing Process-> Patents Packaging->Copy Rights & Proprietary Design The Role of Brands Signify quality Brand-> loyalty-> Predictability and security of demand-> Create barriers to entry Loyalty->Secure price premium(20%-25%More) Competitive advantage (Brand Image in customer’s mind cannot be duplicated) Role and Significance of Brands It is brands who earn for their company ▪ A major asset of the firm Brand Company Annual Sales Surf Excel HUL 3000 Cr. Brooke Bond, Wheel, HUL 2000 Cr. Each 50% of total Lifebouy, Rin, and Fair & income of HUL Lovely Aashirwad, Sunfeast, ITC 1000 Cr. Each Classmate, Bingo Amul GCMMF 27000 Cr. Horlicks GSK 5000 Cr. Maggi Nestle 2500 Cr. Nirma 5000 Cr.  American Marketing Association 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”  Brand signifies the ‘value’ delivered to customers ▪ Gives value and wins loyalty ▪ Lends distinction Brands offer strategic leverage to the firm ▪ A brand’s importance as a strategic asset increases when brand extensions take place and different products move under the same brand name  Categorisation of Brands Based on the Value They Offer Functional brands ▪ Highlight the efficiency of their product features/functions— Gillette, Maruti, Nirma and Wheel Image brands ▪ Offer image value to the user—Parker, Coca-Cola and Pepsi Experience brands ▪ Emphasise the unique experience the user gets by interacting with the brand—Singapore Airlines, Starbucks, Café Coffee Day and PVR Cinema Image Differentiation Experience differentiation The Essence of Branding Branding The process of endowing products and services with the power of a brand Brand Equity Brand equity The monetary value of a brand Goodwill The monetary value of all intangible assets of a company Brand Equity Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand. Brand Power Brand power The ancillary value contributed by the brand to a product or a service Customer-based brand equity Customer based Brand Equity (CBBE) It is the differential effect that brand knowledge has on consumer response to the marketing of that brand. Positive CBBE when consumer reacts more favourably to the product and the way it is marketed when the brand is identified, than when it is not identified. Negative CBBE if consumer reacts less favourably to the marketing activity for the brand under the same circumstances Measuring Brand Equity Market Financial Cost approach approach approach calculates brand estimates brand equity by examining equity by measuring evaluates the costs of the difference brand equity developing the brand, between the sales as the net such as marketing revenues from a research, brand branded offering present value design, against those of an (NPV) of a communication, identical unbranded management, and offering, adjusted for brand’s future legal costs. the expense of earnings building the brand Measuring Brand Power Brand audit Focused series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity Brand tracking Brand audit is used as input to collect quantitative data from consumers over time, providing consistent, baseline information Designing the Brand (1 of 3) Brand mantra A three- to five-word articulation of the heart and soul of the brand Communicate brand’s uniqueness Simplify brand essence Inspire Designing the Brand (2 of 3) Choosing brand elements: Memorable Meaningful Likable Transferable Adaptable Protectable Designing the Brand (3 of 3) Brand characters A special type of brand symbol—one with human characteristics that both enhance likability and tag the brand as interesting and fun Choosing Secondary Associations Brand personality The specific mix of human traits that we can attribute to a particular brand Secondary Sources of Brand Knowledge Brand Hierarchy Brand hierarchy Reflects the way in which a company’s brands are related to a company’s products and services, as well as to one another Developing a meaningful brand hierarchy is particularly important for companies that are managing diverse brand portfolios. Managing Brand Portfolios (1 of 2) Brand portfolio The set of all brands and brand lines a particular firm offers for sale in a particular category or market segment Marketers often need multiple brands in order to pursue these multiple segments. Managing Brand Portfolios (2 of 2) Three strategies: House-of-brands strategy involves individual or separate family brand names. Branded-house strategy involves a corporate umbrella or company brand name Flagship product Branded variants Sub-brand strategy combines two or more corporate, family, or individual product brand names. Options in branding o Individual brand names o Each product of company is given an independent brand name o HUL gives separate brand for most of its products (Dove, Lux, Pears. Surf, Rin, Wheel, etc) o Family brand name (several related products are marketed under one brand name) o Kissan of HUL developed as family brand for its food line consisting of jam, squash, sauces etc. o Nestle’s Maggi o Company name as brand name o Tata, Godrej, Patanjali, LG, Sony, Philips, GE, Samsung o Umbrella brand o Different products – even unrelated ones under one brand name o Tata (ranging from salt to automobile, to steel to power etc) o Middlemen’s brand/store brand/private label Cobranding Cobranding aka dual branding Two or more brands marketed together Same company cobranding Joint venture cobranding Ingredient cobranding to allow its users to store their credit and debit cards on Apple Pay Brand Dynamics (1 of 2) Brand repositioning Back to basics strategy Reinvention strategy Brand Dynamics (2 of 2) Brand extension Advantages Disadvantages Brand dilution Brand extension Extending an ongoing brand name to more products. Apple: from personal computers into MP3 players. Starbucks: coffee-based beverages into energy drinks. Google: from search and extended into a hosted email service. Cosmopolitan: from magazines into yogurt. Types of Brand Extension Extended to other items in the same product line (line extension) Sunrise extended to other offers of coffee Sunrise Premium and Sunrise Extra, catering to different taste requirements) Simplest form of brand extension Idea is to add more items to a given product line, under an existing brand name and cater to different segments of the product. Surf, Surf Ultra, Surf Excel, Surf Excel Matic, Surf Excel Gentle Wash. Lifebuoy → Lifebuoy Personal, Lifebuoy Plus, Lifebuoy Gold, Liquid Lifebuoy Extending a brand name to products in a related line (within the category extension) Maggi (initially was a brand of noodles) Later extended to other related product lines in the same category of Food Maggi Soup, Ketchup, Sauce etc In category extension, brands belong to the same category Nivea (Skin care brand cream) Extended to shampoos, after shave lotions, bath foam Dettol (anti-septic lotion) Dettol soap, Dettol plaster (antiseptic bandage), Dettol Handwash All are from same category – Antiseptic formulation Extending a brand name to products in an unrelated line (outside the category extension) HMT (brand of machine tools) Extended to bulb and watches Wipro (brand of computers) Extended to little known brand of talcum powder – Wipro Babysoft Here the brand name is extended to completely new and unrelated products Brand Rejuvenation To breathe some new life into a brand that may be showing signs of staleness/dip in demand Even healthy, successful brands may need an occasional boost It helps the brand remain in the active gaze of its customers Ongoing brands appear as ‘new’, ‘super’, ‘special’, ‘plus’, ‘premium’, ‘deluxe’, ‘extra strong’ and ‘fresh’—Cadbury’s and Dabur Brand Relaunch Some brands fail to take off; some other decline; some brands rate of growth is not enough Improvements/changes are incorporated and the brands are relaunched with support of new marketing strategy Nokia and Close-up Luxury Branding (1 of 2) Characteristics: Quality Uniqueness Luxury Branding (2 of 2) Managing luxury brands Finding the right balance