0. Brand Management Prof. Dr. Torsten Tomczak University of St. Gallen
Institute for Marketing and Retail Management
Dr. Hans-Peter Kleebinder
BMW Group

1. Content and Time Table
Brand Management and Brand Equity Plenum
Brand Management at BMW Group Plenum/
Introduction Workgroups
Case
Presentation & Feedback & Discussion Plenum

2. Objectives of the Course
1. To understand the nature of brand equity.
2. To discuss the reasons for brand stretching successes and failures.
3. To study the major tasks of corporate brand management - corporate branding and managing brand architectures (company brands, subbrands, endorsed brands).

3. Estimated brand value 12-20 Billion USD.
BMW
Estimated brand value Billion USD.

4. Brand Management and Brand Equity
Prof. Dr. Torsten Tomczak
University of St. Gallen

5. The Most Valuable Brands in the World 200380
70.5
65.2
Brand Value in Billions US $ 60
51.8
42.3 40
31.1
29.4
28.0
24.7
22.2
21.0
20.8
19.9 20 HP
IBM GE
Intel
Nokia
Disney
Toyota
Microsoft
Marlboro
Coca-Cola
Mercedes
McDonald's
Source: Interbrand 2003

6. Different Brand Values for Volkswagen (in 2000)
Billions € 20 18
Difference: -16% 16
18.431 14
15.486 12
Difference -53% 10 8 6
7.286 4 2
Interbrand
BBDO-Consulting
Semion
Source: Kranz 2002

7. Definition Brand Equity
Contribution to the performance
of existing businesses
Brand Equity = +
Contribution to the performance
of new businesses
Latent Brand Equity
In Accordance to: Smith/Park 2001

8. Assets (or Liabilities) which Determine Brand Equity
Brand Knowledge
Quantity and
Quality
of Customers
(resp. Stakeholders)
Associations
Awareness
Brand
Equity X
Degree
of Uniqueness
Scope
of Competence
Loyalty -
Brand Protection
Source: Tomczak 2002

9. Picture of the Brand The Brand‘s Picture Brand Awareness Brand Image
Type, Intensity, Direction, Number, Relevance, Uniqueness of
Associations
In Accordance to Keller 1993; Esch 1993

10. Degree of Awareness Exclusive Awareness Top of Mind Active Awareness
Passive Awareness
Unknown

11. Degree of Uniqueness Who am I ? The brand’s competence How am I ?
Tonality
of the brand
What do
I offer ?
Benefit of the brand and
reason why
How do I
appear ?
Brand picture
Source: Icon 1999

12. Expanding the Scope of Competence due to Brand Extension
Creme
Skin Care
Body Care
Care
1900
2000 t

13. Sources: Meffert 1994; Esch et al. 2001
Brand Extension
Transfer of Goodwill
Brand
New Product/
New Category
Transfer of Goodwill
Sources: Meffert 1994; Esch et al. 2001

14. „The easiest way to destroy a brand is to put its name on everything.“
Markenerosion
„The easiest way to destroy a brand is
to put its name on everything.“
Ries/Ries 1998, p. 79
The Law of Extension

15. Brand Architectures Independence Trade-off between ... Synergy
House of
Brands
Endorsed
Brands
Sub-Brands
Branded
House
Options:
- Strong Endorsement (e.g. Lotus Notes by IBM)
- Linked Name (e.g. DKNY)
- Token Endorsement (e.g. The world of TUI)
Options:
- Shadow Endorser (e.g. Lexus)
- Not Connetced (Nutrasweet)
Options:
- Master Brand as Driver (e.g. HP Deskjet)
- Co-Drivers (e.g. Gillette Sensor)
Options:
- Same Identity (e.g. Nokia)
- Different Identity
(e.g. GE Capital vs. Ge Appliances)
According to Aaker/Joachimstaler Esch/Bräutigam 2001

16. Different functions of a brand
risk
reduction
non-material
benefits
information
efficiency
Source: MCM/McKinsey/GfK 2003

17. Quantity and Quality of Customer Base Depends on ...
(Potential) Number of Customers
(Potential) Spending Power of Customers
(Potential) Relevance of the Served Needs

18. ... the higher is the brand equity.
The Rules ...
The better the brand is known ...
The more vivid the image ...
The higher the degree of uniqueness ...
The wider the field of competence ....
The stronger the loyalty ....
The bigger the customer base ...
The better the quality of the customer base ...
The better the brand protection ...
... the higher is the brand equity.
Picture
Message
Loyalty
Customer base
Ownership