Strategic Brand Management Keller summary 2021 latest update

Chapter 1: Brands and brand management What is a brand? -­‐ Brand is derived from the old Norse word brandr, which means `to burn` -­‐ According to the American Marketing Association, a brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition -­‐ Components that identify and differentiate a brand can be called brand elements Brands vs. Products -­‐ A product is anything that can be offered to a market for attention, acquisition, use -­‐ Product might be a physical item, service, and a shop. Person, organization, place or idea -­‐ 5 levels can be defined: 1. The core benefit – fundamental need or want that consumers satisfy by consuming the product or service 2. The generic product – basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning 3. The expected product: set of attributes or characteristics that buyers normally expect and agree to when they purchase a product 4. The augmented product: incl. additional attributes, benefits or related services 5. The potential product: incl. all of the augmentations and transformations that a product could ultimately undergo  A brand is a product but one that adds other dimensions that differentiate it in some way from other product designed to satisfy the same need; these differences may be rational and tangible – related to product performance of the brand -­‐ or more symbolic, emotional and intangible – related to what the brand represents -­‐ Some brands create competitive advantage with product performance, others through non-­‐product related means by understanding consumer’s motivations and desires and creating relevant and appealing images surrounding their products Consumers -­‐ Brands identify the source or maker of a product and allow consumers to assign responsibility to a particular manufacturer or distributor  From an economic perspective, brands allow consumers to lower search costs for products both internally (in terms of how my much they have to think) and externally (in terms of how much they have to look around) -­‐ Relationship between a brand and the consumer can be seen as a `bond` or pact  Consumers offer their trust and loyal with the implicit understanding that the brand will behave in certain ways and provide them utility through consistent product performance and appropriate pricing, promotion, and distribution and actions -­‐ Brands can serve as symbolic devices, allowing consumers to project their self-­‐image -­‐ Researchers have classified products and their associated attributes or benefits into 3 categories: 1. Search goods – product attributes can be evaluated by visual inspection 2. Experience goods – product attributes – potentially equally important – cannot be assessed so easily by inspection and actual product trial and experience is necessary 3. Credence goods -­‐ product attributes may be rarely learned -­‐ Consumers perceive many different types of risks in buying and consuming a product: -­‐ Functional risk: the product does not perform up to expectations -­‐ Physical risk: the product poses a threat to the physical well-­‐being or health of the user or others -­‐ Financial risk: the product is not worth the price paid -­‐ Social risk: the product results in embarrassment -­‐ Psychological risk: the product affects the mental well-­‐being of the user -­‐ Time risk: the failure of the product results in an opportunity cost of finding another satisfactory product Companies -­‐ Brand offers the firm legal protection for unique features or aspects of the product intellectual property rights  This brand loyalty provides predictability and security of demand for the maker and creates barriers that make it difficult for other firms to enter the market -­‐ Branding can be seen as a powerful means of securing a competitive advantage -­‐ Belief that strong brands resulted in better earnings and profit performance for firms, which, in turn, created greater value for shareholders Can anything be branded? -­‐ Brand is something that resides in the minds of consumers -­‐ To brand a product or service, it is necessary to give consumers a label for the product and to provide meaning for the brand -­‐ The key to branding is that consumers perceive differences between brands in a product category -­‐ A commodity is a product so basic that it cannot be differentiated in the minds of consumers Business-­‐to-­‐business products -­‐ B2B branding involves creating a positive image and reputation for the company as a whole; creating such goodwill with business customers is thought to lead to greater selling opportunities and more profitable relationships Services -­‐ Branding can be particularly important to service firms to address potential intangibility and variability problems -­‐ Brand symbols may also be especially important because they help to make the abstract nature of services more concrete Retailers and distributors -­‐ Retailers can create a brand image by attaching unique associations to the quality of a service, their product assortment and merchandising and their pricing and credit policy; finally the appeal and attraction of brands can permit higher price margins, increased sales volumes and greater profits Online products and services -­‐ As with any brand, it is critical to create unique aspects that is important to consumers – such as convenience, price and variety; at the same time, the brand needs to perform satisfactorily in other areas, such as customer service, credibility and personality -­‐ Customer began to demand higher levels of service both during and after their website visit  consequence: many firms have to Improve their web service by making customer service agents available in real time; shipping products promptly and providing tracking updates; and adopting liberal return policies People and organizations -­‐ I.e. public figures such as politicians, entertainers and professional athletes Sports, arts and entertainment -­‐ E.g. films, television, music and books  these offerings are good examples of experience goods: prospective buyers cannot judge quality by inspection and must use cues such as the particular people involved, the concept or rationale behind the project, word-­‐of-­‐mouth and critical reviews Strong brands  the bottom line is that any brand – no matter how strong – is vulnerable to poor brand management Savvy customers -­‐ Consumer’s expectations are growing two-­‐and-­‐a-­‐half times faster than brands are able to keep up -­‐ Many believe that it is difficult to persuade consumers with traditional communications -­‐ Others believe that what consumers want from products and services has changed  Companies must transcend brands to create `trustmarks`-­‐ a name or symbol that emotionally binds a company with the desires and aspirations of its customers – and ultimately `lovemarks`; it is not enough for a brand to be just respected Changes: -­‐ Brand proliferation -­‐ Media fragmentation (Cost, clutter, fragmentation, technology) -­‐ Increased competition (globalization, low-­‐priced competitors, brand extensions, deregulation) -­‐ Increased costs -­‐ Greater accountability (managers may find themselves having to make decisions with short-­‐term benefits but long-­‐term costs; might encourage quick-­‐fix solutions with perhaps adverse long-­‐term consequences) Strategic brand management process -­‐ Strategic brand management involves the design and implementation of marketing activities to build, measure and manage brand equity Identify and establish brand positioning and values • mental maps; competitve frame of references • points of parity and points of difference; core brand associations; brand mantra Plan and implement brand marketing campaigns • mixing and matching of brand elements; integrating brand marketing activities • exploiting secondary association Measure and interpret brand performance • brand value chain; brand audits; brand tracking • brand equity management system Increase and sustain brand equity • brand-­‐product matrix; brand portfolios and hierarchies; brand expansion strategies • brand reinforcement and revitalization Step 1: brand positioning can be defined as the `act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s mind`  Goal is to locate the brand in the minds of consumers  Competitive brand positioning is about creating brand superiority in the minds of consumers; convincing consumers of the advantages (or points of difference), while alleviating concerns about any possible disadvantages (establishing points of parity)  A mental map is a visual depiction of the different types of associations that are linked to the brand in the minds of consumers  A brand mantra is a short three-­‐to-­‐five-­‐word expression of the most important aspects of a brand and its core brand values; can be seen as the enduring `brand DNA` Step 2: Step 3: 1. The initial choices for the brand elements or identities making up the brand and how they are mixed and matched 2. The marketing activities and supporting marketing campaign and the manner by which the brand is integrated into them 3. Other associations indirectly transferred to or exploited by the brand as a result of linking it to some other entity  Choosing brand elements: brand elements can be chosen to enhance brand awareness or facilitate the formation of strong, favourable and unique brand associations  Integrating the brand into marketing activities:  Exploiting secondary associations: brand associations may themselves be linked to other entities that have their own associations, creating secondary brand associations  linking the brand to a memory that conveys meaning to consumers  A brand audit: a comprehensive examination of a brand involving activities to assess the health of the brand, uncover its sources of equity and suggest ways to improve and exploit that equity; requires understanding sources of brand equity from the perspective of both the firm and the consumer  Brand value chain: a means of tracing the value-­‐creation process for brands to understand better the financial effect of brand marketing expenditures and investments  Brand equity measurement system: a set of research procedures designed to provide timely, accurate and actionable info for marketers so that they can make the best possible tactical decisions in the short round and the best strategic decisions in the long run Step 4: Managing brand equity involves managing brands within the context of other brands, as well as managing brands over many categories, over time and across market segments  Defining the branding strategy: the brand-­‐product matrix is a graphical representation of all the brands and products sold by the firm; the brand hierarchy reveals an explicit ordering of brands by displaying the number and nature of common and distinctive brand components across the firm’s products; a brand portfolio is the set of brands and brand lines that a firm offers for sale to buyers in a particular category  Managing brand equity over time: consumers responses to marketing activity depend on what they know and remember about a brand  therefore short-­‐ term mix actions, by changing brand knowledge, necessarily increase or decrease the success of future actions  Geographic boundaries, cultures and market segments: recognizing and accounting for different types of consumers; international issues and global branding strategies are particularly important in these decisions Chapt. 2: Customer-­‐based brand equity -­‐ The CBBE model approaches brand equity from the perspective of the consumer – whether this be an individual or an organization -­‐ Understanding the needs and wants of consumers and organizations and devising products and campaigns to satisfy them are at the heart of successful marketing -­‐ The power of a brand lies in what resides in the minds of customers -­‐ The challenge for marketers in building a strong brand is ensuring that customers have the right type of experiences with products and services and their accompanying marketing campaigns so that the desired thoughts, feelings, images, beliefs, perceptions and opinions become linked to the brand -­‐ Customer-­‐based brand equity is defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand -­‐ A brand is said to have positive CBBE when customers react more favourably to a product; consumers being more accepting of a brand extension, less sensitive to price increases and withdrawal of advertising support or more willing to seek the brand in a new distribution channel -­‐ A product or service has 3 ingredients: 1. Differential effect 2. Brand knowledge 3. Consumer response to marketing  Consumers perceptions of the performance of a product depend on their impressions of the brand