COURSE TITLE : STRATEGIC BRAND MANAGEMENT Ashesi University COURSE TITLE : STRATEGIC BRAND MANAGEMENT SEMESTER : SECOND, 2010/2011 MODULE 9: Designing and Implementing a Branding Strategy I: Brand Architecture, Brand-Product Matrix, Brand Hierarchy Lecturer: Ebow Spio

Learning Outcomes Explain how to maximize brand equity across all the different brands and products of the firm Appreciate how a firm determines which brand elements to choose to apply across the products it offers for sale (Branding Strategy or brand architecture) Explain brand terminologies and concepts such as brand architecture, brand-product matrix, brand portfolio, brand hierachy, Explain how cause marketing can build brand equity Branding Strategy is important as a means of enabling consumers to understand and connect with the brand, since it can help consumers organize a company’s products and services in their minds.

Branding strategy Branding strategy is critical because it is the means by which the firm can help consumers understand its products and services and organize them in their minds. Two important strategic tools: The brand-product matrix and the brand hierarchy help to characterize and formulate branding strategies by defining various relationships among brands and products.

Branding Strategy or Brand Architecture The branding strategy for a firm reflects the number and nature of common or distinctive brand elements applied to the different products sold by the firm. Which brand elements can be applied to which products and the nature of new and existing brand elements to be applied to new products The branding strategy or brand architecture, for a firm tells marketers which brand names, logos, symbols and so forth to apply to which new and existing products. We often distinguish branding strategies by whether a firm is or should be employing an umbrella corporate or family brand for its products (as a branded house) or collection of individual brands all which different names (as a “house of brands) . The Brand architecture defines both brand boundaries and brand complexity

The role of Brand Architecture Clarify: brand awareness Improve consumer understanding and communicate similarity and differences between individual products Motivate: brand image Maximize transfer of equity to/from the brand to individual products to improve trial and repeat purchase

Brand-Product Matrix Must define: 1 2 3 4 A B C Products Brands Brand-Product relationships (rows) Line and category extensions Product-Brand relationships (columns) Brand portfolio The brand-product matrix is a graphical representation of all the products sold by a firm. Each row of the matrix is labeled with a brand name, while each column represents a product. Thus, the rows of the matrix correspond to brand lines (all the products sold under a particular brand name) while the columns correspond to product lines, a.k.a. brand portfolios, (all the brands marketed in particular product categories) 71

Important Definitions Product line A group pf products within a product category that are closely related Product mix (product assortment) The set of all product lines and items that a particular seller makes available to buyers Brand mix (brand assortment) The set of all brand lines that a particular seller makes available to buyers 66

Breadth of a Branding Strategy Breadth of product mix Aggregate market factors Category factors Environmental factors Depth of product mix Examining the percentage of sales and profits contributed by each item in the product line Deciding to increase the length of the product line by adding new variants or items typically expands market coverage and therefore market share but also increases costs A firm’s branding strategy can be characterized according to its breadth, which refers to the number and nature of products that bear the same brand name, and its depth, which refers to the number and nature of brands in the same product category. Marketers can use the brand-product matrix to determine whether and where to make connections across products and brands. 66

Depth of a Branding Strategy The number and nature of different brands marketed in the product class sold by a firm Referred to as brand portfolio The reason is to pursue different market segments, different channels of distribution, or different geographic boundaries Maximize market coverage and minimize brand overlap The choice of branding strategy depends upon a number of different factors, including corporate objectives and capabilities, consumer behavior, and competitive approaches. 66

Ford Brand Portfolio 66

Designing a Brand Portfolio Basic principles: Maximize market coverage so that no potential customers are being ignored Minimize brand overlap so that brands aren’t competing among themselves to gain the same customer’s approval Brand Portfolio is the set of all brands and brand lines that a particular firm offers for sales to buyers in a particular category.

Brand Roles in the Portfolio Flankers Cash cows Low-end entry-level High-end prestige brands 66

Brand Hierarchy A means of summarizing the branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products, revealing the explicit ordering of brand elements A useful means of graphically portraying a firm’s branding strategy A brand hierarchy visually illustrates the possible relationships that can be formed among the firm’s products through the selection of common and distinctive brand elements. The levels of the hierarchy might include the corporate or company brand at the top, followed by a family brand used in more than one product category, an individual brand that typically is restricted to one product category, and a modifier that designates a specific item or model. 66

Brand Hierarchy Tree: Toyota Corporation Toyota (SUV/vans) Toyota (Cars) Toyota Financial Services Toyota (Trucks) Lexus MR2 Spyder Corolla Camry Avalon Celica ECHO Matrix Prius Because a company’s marketing activity may result in different types of associations becoming linked to the brand names at various levels of the hierarchy, each name has the potential to impact the equity of brands at levels above and below it. In addition to designating the optimal hierarchy, a company must also design marketing support programs that create the desired awareness and associations at each level.   In general, associations for a higher-level brand should be relevant to as many brands below it as possible, while brands at the same level should be as differentiated as possible. Platinum Edition XL XLS CE S LE SE LE XLE SE SLE

Brand Hierarchy Levels Corporate Brand (General Motors) Family Brand (Buick) Individual Brand (Park Avenue) Modifier: Item or Model (Ultra) 65

Corporate Brand Equity Occurs when relevant constituents hold strong, favorable, and unique associations about the corporate brand in memory Encompasses a much wider range of associations than a product brand 66

Family Brands Brands applied across a range of product categories An efficient means to link common associations to multiple but distinct products Becomes necessary to create a family brand besides the Corporate brand when products become dissimilar. Cost of introducing a related new product can be lower and the likelihood of acceptance can be higher when marketers apply an existing family brand to a new product. The failure of one product may have adverse ramifications on other products sold by the firm under the same brand by virtue of the common bran identification. 66

Individual Brands Restricted to essentially one product category There may be multiple product types offered on the basis of different models, package sizes, flavors, etc. 66

Modifiers Signals refinements or differences in the brand related to factors such as quality levels, attributes, functions, etc. Plays an important organizing role in communicating how different products within a category that share the same brand name are 66

Corporate Image Dimensions Corporate product attributes, benefits or attitudes Quality Innovativeness People and relationships Customer orientation Values and programs Concern with the environment Social responsibility Corporate credibility Expertise Trustworthiness Likability 66

Brand Hierarchy Decisions The number of levels of the hierarchy to use in general How brand elements from different levels of the hierarchy are combined, if at all, for any one particular product How any one brand element is linked, if at all, to multiple products Desired brand awareness and image at each level 66

Number of Hierarchy 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

Levels of Awareness and Associations Principle of relevance Create global associations that are relevant across as many individual items as possible Principle of differentiation Differentiate individual items and brands

Linking Brands at Different Levels Principle of prominence The relative prominence of brand elements affects perceptions of product distance and the type of image created for new products

Linking Brands Across Products Principle of commonality The more common elements shared by products, the stronger the linkages

Brand Architecture Guidelines Adopt a strong customer focus Avoid over-branding Establish rules and conventions and be disciplined Create broad, robust brand platforms Selectively employ sub-brands as means of complementing and strengthening brands Selectively extend brands to establish new brand equity and enhance existing brand equity

Corporate Brand Campaign Different objectives are possible: Build awareness of the company and the nature of its business Create favorable attitudes and perceptions of company credibility Link beliefs that can be leveraged by product-specific marketing Make a favorable impression on the financial community Motivate present employees and attract better recruits Influence public opinion on issues

Using Cause Marketing to Build Brand Equity The process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives 66

Advantages of Cause Marketing Building brand awareness Enhancing brand image Establishing brand credibility Evoking brand feelings Creating a sense of brand community Eliciting brand engagement 66

Green Marketing A special case of cause marketing that is particularly concerned with the environment Explosion of environmentally friendly products and marketing programs 66

Crisis Marketing Guidelines The two keys to effectively managing a crisis are that the firm’s response should be swift and that it should be sincere.

Key Points Branding strategy is important as a means of enabling consumers to understand and connect with the brand, since it can help consumers organize a company’s products and services in their minds. 2. Designing a brand strategy involves decisions regarding the number of levels to use, how brand elements at different levels will be combined for a given product, and how brand elements will be linked to multiple products. 3. Each successive level in a brand hierarchy allows the firm to communicate additional, specific information about products. 4. In general, associations for a higher-level brand should be relevant to as many brands below it as possible, while brands at the same level should be as differentiated as possible.

Tutorial Assign students the task of identifying pairs of competing brands with different branding strategies Contrast the branding strategies and brand portfolios of market leaders in two different industries