Module IV: Nurturing Brand to Grow: Understanding & Developing Brand Architecture Managing Strategic Branding Issues: Brand Extension & Brand Revitalization Corporate & Internal Branding Managing Global Brand

Module IV: Nurturing Brand to Grow

Branding Strategy or Brand Architecture: “The number and nature of common and distinctive brand elements applied to the different products sold by the firm”

Brand-Product matrix Products Brands Soap Talcum Deo Cold cream Lux Liril Ponds Palmolive Brands Columns (Product Line) Brand extension strategy Rows (Brand Line) Brand portfolio strategy

Factors effecting Product category attractiveness Breadth of a Branding Strategy The number and nature of different products linked to the brands sold by a firm Aggregate of market factors Mkt size Mkt growth Stage of PLC Seasonality Profits Breadth of Product Mix: How many product lines a company should carry ? Environmental factors Technological Economic Political Regulatory Social Factors effecting Product category attractiveness Category factors Porter’s five forces Category capacity

Breadth of a Branding Strategy (Contd.) Depth of Product Mix: How many variants should be offered in each product line ? Understanding of the market Cost interdependence between products Length of the product line Issues in deciding no. of Product lines The ability of each item in the product line to Withstand competition Address consumer needs % of sales and profits contributed by each item or member of the product line

Depth of a Branding Strategy Number and nature of different brands marketed in the product class sold by a firm Why multiple brands? To pursue multiple market segments & larger mkt. coverage To increase shelf presence and retailer dependence in the store To attract customers seeking variety To increase internal competition within the firm To yield economies of scale in adv., sales and distribution Maximise market coverage, minimise brand overlap and optimize the product portfolio

Brand hierarchy Means of summarising 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. The simplest representation of a Brand Hierarchy from top to bottom is as follows: Corporate ( or company ) brand. Family Brand eg: Colgate Individual Brand eg:Lux Modifier( designating item or model) eg. Pentium PI, PII, PIII…

Special role of brand in brand portfolio Serve as a high end prestige product Serve as a flanker and protect flagship brands Phillip Morris Mercedes Special role of brands in a brand portfolio Gillette Toyota Serve as a lower end entry level product to attract a new customer to the brand franchisee Serve as a cash cow and Milk for profits

Guidelines for brand hierarchy Decisions Designing a Branding Strategy The no. of levels of the hierarchy to use in general Principle of simplicity: As few levels as poss. Guidelines for brand hierarchy Decisions Desired awareness and associations 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 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 How to link a brand across products? Principle of commonality: The more common elements shared by products, the stronger the linkages

New Products & Brand extensions New Brand: Tide launched by P&G Line Extension: Wills Lifestyle Category extension: Colgate Supershakti

Brand Strategies Product Category Line Extension Brand Extension Existing New Existing Multibrands New Brands Brand Name New

Reinforcing brands… Brand equity is reinforced by marketing actions that consistently convey the MEANING of the brand to consumers in terms of BRAND AWARENESS and BRAND IMAGE. Reinforced marketing actions, along with product development, branding strategies etc. also help in keeping the brand meaning in terms of products, benefits and needs as well as in terms of product differentiation intact.

Reinforcing depends on nature of the brand associations Product related performance associations Product innovations are critical. Change in product may not be drastic, as brand meaning may be associated with the product characteristics. Non-product related imagery associations Relevance in user and usage imagery is critical. Potentially easier to change through major advertising campaigns (no product innovation may be involved). Too frequent repositioning can blur the image of the brand and confuse or even alienate the consumers.

Reverse Fortunes of Brands Recapture lost sources of Equity Identify and establish new sources of Brand Equity

Approaches to Re-vitalization Expanding Brand Awareness Improving Brand Image Entering New Markets

Approaches adjustment to brand portfolio Migration Strategy Acquiring new customers Retiring Brands

Quick Revisit

What is a brand? A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identity the goods or services of one seller or group of sellers and to differentiate them from those of competitors - American Marketing Association 19

A sum of parts + The Brand Functional Product Attributes Symbolic Values & Associations Rational (Head) Emotional (Heart) The Brand 20 20

Four characteristics Difference Clarity Consistency Leadership 21 21

Brand Identity (Kapferer’s Prism) 22 22

Life style Expectation Experience Disposition Differentiation BRAND IMAGE: the way of thinking by a consumer about the brand and the feelings the brand arouses when the consumer thinks about it Life style Expectation Experience Disposition Differentiation 23

Brand Positioning Define competitive frame of reference Target market Nature of competition Define desired brand knowledge structures Points-of-parity necessary competitive Points-of-difference strong, favorable, and unique brand associations 24

Your Brand’s Genetic Code: BRAND DNA Every great brand has substance. a brand’s DNA is timeless. a brand’s blue print is a unique set of values that originally defined them. Great brands can remain relevant through creativity. A brand’s DNA is not strictly about the product, service, the past or even about research -- its about tapping in to an essence or story that defines who you are to the people that matter most, your core customers. What Do You Stand For? 25

- Jingles BRAND_VIDEO CLIPS\Hutch song.mp3 - Packaging - Brand Names Logos and Symbols - Characters: - Benefits - Cautions - Slogans - Designing Slogans - Updating Slogans - Jingles BRAND_VIDEO CLIPS\Hutch song.mp3 - Packaging - Package design - Packaging changes 26

Criteria Memorabiltiy Meaningfulness Likability Transferability Easily recognized Easily recalled Meaningfulness Descriptive Persuasive Likability Fun and interesting Rich visual and verbal imagery Aesthetically pleasing Transferability Within and across product categories Across geographic boundaries and cultures Adaptability Flexible Updateable Protectability Legally Competitively 27

Leveraging Secondary Brand Knowledge to Build Brand Equity Brands may be linked to other entities that have their own knowledge structures in consumer minds Means of reinforcing existing associations in a fresh and different way very important aspect if the existing brand associations is deficient in some way 28

Customer Based Brand Equity (CBBE): Keller 29

Marketing Program Investment Market place Conditions The Brand Value Chain Marketing Program Investment Customer Mindset Market Performance Shareholder Value Value Stages BRAND_VIDEO CLIPS\Lufthansa Brand Movie_vcd0.mpg Price premium Price elasticity Market share Expansion success Cost structure Profitability Product Communication Trade Employee Other Awareness Associations Attitudes Attachment Activity Stock prices P/E ratio Market capitalization BRAND_VIDEO CLIPS\Recap - Intel's Shareholder Meeting - Bloomberg.flv BRAND_VIDEO CLIPS\Performance Review IKEA 2009.flv Program Quality Market place Conditions Investor Sentiment Multiplier Clarity Relevance Distinctiveness Consistency Market dynamics Growth potential Risk Profile Brand contribution BRAND_VIDEO CLIPS\Global Brands Lose Value as Economy Suffers.flv Competitive reactions Channel support Customer size and profile 30

Key Metrics: Consumer Based Brand Persuasion =Ratio of Intention to Purchase Brand/ Spontaneous Brand Recall Brand Pull =Ratio of Likely Switch-ins to the Brand / Likely Switch-outs from the Brand Brand Loyalty = Ratio of Likely to Continue Buying the Brand / Total Current Users of the Brand Secondary Brand Share = Total Current Users of the Brand / Total Current Users of the Category Primary Brand Share =Preferred Current Users of the Brand / Total Current Users of the Category 31

Discounted Cash Flows Method: Value of Brand = Where = Anticipated Revenue in year t attributable to the brand r = Discounting rate or WACC (Weighted average cost of capital) = Residual Value after n (year) For Example: Brand A had revenues of Rs 600 crores ( 2009). The Brand A is expected to grow at around 10% per annum for the next five years. The Discounting rate is taken at 12 %. The period when the brand is expected to operate status quo is assumed to be the next five years 32

The Interbrand method for valuing brands: 33

A Two Dimensional Framework for Diagnosing Brands: The Power Grid BrandAsset® Valuator Leading Brand Strength Differentiation Relevance Lagging Brand Stature Esteem Knowledge OK, so here’s the cheat sheet. I’m Miss Lonelyhearts and I’m checking out what you’re telling me about the brands. I want to know about Brand Strength and Brand Stature and what they tell me about pursuing the relationship further. 34 11

Brand-Product matrix Products Brands Soap Talcum Deo Cold cream Lux Liril Ponds Palmolive Brands Columns (Product Line) Brand extension strategy Rows (Brand Line) Brand portfolio strategy 35

Brand hierarchy Means of summarising 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. The simplest representation of a Brand Hierarchy from top to bottom is as follows: Corporate ( or company ) brand. Family Brand eg: Colgate Individual Brand eg:Lux Modifier( designating item or model) eg. Pentium PI, PII, PIII… 36

New Products & Brand extensions New Brand: Tide launched by P&G Line Extension: Wills Lifestyle Category extension: Colgate Supershakti 37

Reverse Fortunes of Brands Recapture lost sources of Equity Identify and establish new sources of Brand Equity

Approaches adjustment to brand portfolio Migration Strategy Acquiring new customers Retiring Brands

Thank you