Marketing Management

Brand Management

Contents
Presentation Objective From Products to Brands

Brand Attributes
Brand Management Brand Architecture Brand positioning Pricing strategy Brand Equity Line Extension

What is Brand?

A name becomes a brand when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or service
It is the sellers promise to deliver the same bundle of benefits/services consistently to buyers

Brand Power

Customer will change brands for price reasons Customer is satisfied. No reason to change Customer is satisfied and would take pains to get the brand Customer values the brand and sees it as a friend Customer is devoted to the brand

Presentation Objective

To understand the aspects / issues involved in branding To develop a framework for building a brand

From Products to Brands

From Products to Brands

From Products to Brands

Brand v/s. Product

A brand is more distinctive than a product It is first of all a name, a means of identification Secondly it s a set of added values offering both functional and psychological benefits

Above all a brand is a promise

From Products to Brands

A Brand is a Promise

A sellers promise to deliver consistently a specific set of features, benefits and services to buyers.

Fevicol Case
Year
92-93 93-94 94-95 95-96 96-97 97-98 98-99

Sales Value ( Rs. Crores)

46.02 77.12 102.16 138 156.19 151.68 191.75

AdSpend ( Rs. Crores)

0.55 1.7 2.3 3.28 5 5.51 6

Adspend as % of Sales 1.2% 2.2% 2.3% 2.4% 3.2% 3.6% 3.1%

Fevicol's Market Share

of Synthetic Adhesive Category
45% 40% 35% 30% 25% 20% 15%

42%

31.43%

10%
10% 5% 0%

1991

1994

1999

Fevicol's Growth Rate

vs. Category Growth Rate

60% 50% 40% 30% 20%

55%

16%

10%
10% 0%

8%

1992-95

1995-99

Category

Fevicol

Attributes

Brand Name

Short
Kodak, Fuji
CNN an AOL Time Warner Company

Distinctive
Toyotas Lexus is distinctive. Toyotas Luxury

commonplace
Orange was a striking name in a world of telecoms

Brand Name

Avoid generic / line extended names

Xerox (Copier) is powerful. Xerox Computer is not

Brand Logo

Simple logo, designed to fit both eyes

Mercedes three star

Logos with a horizontal bias

Logo with a horizontal bias is esp. useful for retail

brands

Logo font has to be clear and legible

A housewife does not buy Ariel because it is written in a

specific font

Brand Colours

Colours have meanings

Purple means royalty
Red is energetic Blue is peaceful

Opposite colours can differentiate

Coke is red, Pepsi is blue Kodak is yellow, Fuji is green

Brand Colours

Colours can help you stand out

FedExs orange and purple packet stands out in

corporate blue

Logo and colours help, but the power of the brand

Essentially in the meaning of the brand name in

consumers mind, its essence

Brand Essence

A brand must leverage a compelling truth

Linux stands for freedom as opposed to Microsofts

monopoly.

A brand should mean a single powerful thing: the essence

Essence of Volvo is Safety Essence of Tata is trust Essence of Fevicol is bonding

The 6 Immutable laws of Branding

1.The law of the Word

A brand should strive to own a word in the mind of the consumer If you want to build a brand, you must focus your branding efforts on owning a word in the prospect's mind. A word that nobody else owns. Examples: Mercedes = prestige; Volvo = safety; Kleenex = tissue; Xerox = copier; .

Federal Express became successful by becoming the first air cargo carrier to narrow its focus on overnight delivery thereby owning the word overnight in customers minds. FedEx has become synonymous with overnight delivery.

2. The law of Credentials

The crucial ingredient in the success of any brand is its claim to authenticity. The best claim is being the leading product or service in your category, because consumers assume that if it is a leading seller, it must be good Never forget leadership. No matter how small the market, don't get duped into simply selling the benefits of the category There are also the long-term benefits of leadership. Once you get on top, its hard to lose your spot.

 In 1942, Coca Cola launched an Ad Campaign The only things that tastes like Coca Cola is Coca Cola Itself. Its the real thing. It has used the real thing slogan over the years to claim its authenticity.

3. The law of Quality

Quality is important, but brands are not built by quality alone In fact, most people have no idea as to the "real quality of a product or service. Is a Rolex really better at keeping time than a Timex? How do you know?

Rolex has become the worlds best known and best selling brand of luxury watches. Does quality have anything to do with its success? Probably not. Does Rolex make high quality watches? Probably. Does it matter? Probably Not.

4. The law of Consistency

A brand is not built overnight. Success is measured in decades, not years

BMW has been ultimate driving machine for 25 years. What's more remarkable is the fact that it retained its strategy even while changing 3 advertising agencies. Change of agencies usually signals end of a brands consistency.

5. The law of Mortality

No brand will live forever. Euthanasia is often the best solution.

Film Photography is slowly being replaced by digital photography. But Kodak refuses to face that reality. Instead it is trying to save its brand by using Kodak name on its Digital products.

6. The law of Singularity

The most important aspect of a brand is its singlemindedness

Volvo has been selling safety for over 35 years. In the process it has become the largest selling European luxury car. In the past decade, it has sold 849,348 cars in the US, outselling BMW and Mercedes Benz.

Management

Management
Co-Brand Fighting Brand
Stealth Brand

Multi Brand

Co-Brand

Brands need to address a similar need segment

Kellogg's Pop-tarts with Smuckers Jam

Brands with complementary strengths: Seen often on the Net

NY Times gives Amazon credibility Amazon makes NY Times look modern.

Stealth Brand

Brand building that attracts customer attention but not of rivals

Home-to-home, word of mouth / PR, internet community

building
Krispy Kreme relies only on PR

Good option when unsure of a new medium/market

Little promotion for Maytag website as opposed to a buy.com.

Maytag sold 1000s of Neptune washers on web

Fighting Brand

Pricing led branding option. Works as a competitive response.

Smirnov (Heublein) Case
Smirnov attacked by Wschmidt @ $1 less Heublein raised the price of Smirnov

Heublein introduced Reiska(fighting brand) at the same price point as

Wschmidt

Heublein added Popov lower than both

Built as new, independent brand

Prevents dilution of the leading brand HLL introduced Wheel to fight Nirma

Management
Immutable Law of Siblings

There is a time and place to launch a second brand

Possibly even a third or a fourth brand..

Architecture

Architecture

House of Brand Sub Brand

Endorsed Brand Branded House

House of Brands

Often dictated by corporate strategy. Core competence of the firm is marketing / branding
P&G is the prime example. Its big with the channel

Multiple independent brands allows company to fill each niche

Helps brand focus

Gives an opportunity for the company to focus on each brand and contract its scope.

Endorsed Brand

Endorsement used as a device to transfer brand assets from one brand(corporate) to another
Titan from TATA, transferring trust

Danger of diluting the equity of endorsing brand Best as a transitional strategy

Gain, from makers of Ariel

Architecture
Immutable Law of Expansion

Brands power inversely proportional to scope.

The Volkswagen bus ad, talked only about plenty of room

Sub Brand

Inside out branding. Company pushes core brand in different directions Sub-branding can destroy what branding builds
Donna Karan menswear, DKNY, DKNY menswear, DKNY kids

Architecture
Immutable Law of Company

Brands are brands, companies are companies. There is a difference.

Branded house

Consumers buy brands, not companies Danger of branded house, being many things to one group of people
Virgin? Does Virgin trains work?

May motivate trade, so might be useful for PR purposes with trade/other stakeholders
P& G way

POSITIONING : The Battle for Your Mind

A concept so simple, people have difficulty in understanding how powerful it is!

What is Positioning ?

Positioning is owning a piece of consumers mind Positioning is not what you do to a product Its what you do to the mind of the prospect You position the product in the prospects mind Its incorrect to call it Product Positioning Ries &
Trout

Examples
Colgate Is Protection Gillette Is Quality

LUX Is Glamour

Ponds DFT Is Confidence

AXE Is Sexual Attraction

Positioning

To position a product/service in the minds of

consumers relative to competitors Ries and Trout

A reason to be
The brand has to be distinctive, relevant and appealing to its target audience

Positioning

Positioning refers to how organizations want their consumers to see their product
Positioning = Segmentation + Differentiation Slotting your product in the consumers mind.

Who am I? Why buy me?

Positioning starts with the product.But Positioning is not what you do to the product. Positioning is what you do to the mind of the prospect - Ries and Trout

Why is Positioning Required ?

The assault on our mind The media explosion The product explosion The advertising explosion

So little message gets through that you ignore the sender and concentrate on the receiver Consumers only accept what is consistent with prior knowledge or experience Very difficult to change the perception once formed

How it is done

The easy way to get into a persons mind is to be first Xerox, Kodak, Polaroid, Sun TV, The Hindu If you didnt get into the mind of your prospect first, then you have a positioning problem Better to be first than be best Even if you are not first, be the first to claim a unique position in the mind of the consumer Miller Lite first lite beer and Becks Beer first beer popular in Germany In the positioning era, you must, however, be first to get into the prospects mind

How it is done

The basic approach is not to create something new or different, but manipulate whats already in the mind To find a unique position, you must ignore conventional logic Conventional logic says you find concept inside product Not true; look inside prospects mind You wont find an uncola idea inside 7-up; you find it inside cola drinkers head

The 3Cs of Positioning

Be Crystal clear Be Consumer-based Be relevant and credible to the consumer Write in consumer language and from consumers view point Be Competitive Be distinctive Focus on building brand elements into powerful discriminator Be persuasive Be sustainable

Focus of Positioning

Attributes and benefits of the product Competition Product user Product use or application Product class Cultural symbols

Positioning Strategies

Product Attribute or Benefit approach Price-Quality approach

User approach
Product category approach Competitor approach

Product Attribute or Benefit approach

Volvo stands for safety

BMW for performance

Mercedes for luxury Dermi Cool (prickly heat powder that cools)

Positioning Strategies
USER APPROACH

PRICE QUALITY APROACH

Loreal with Aishwarya Rai, Revlon with Cindy Crawford etc.

The Marlboro Man, Thums up is also trying to reinforce its for grown ups image by using a macho celebrity route (Akshay Kumar).

Baja Auto: Value-for-money, for years Zenith Computers: MNC quality, Indian price

Positioning Strategies

Diet beers (from kingfisher) and ice beers (from United Breweries) as against the regular beer.

Captain Cook (free flow vs. Tata Salt) Savlon (does not sting vs. Dettol)

PRODUCT CATEGORY APPROACH

COMPETITOR APPROACH

Pricing Decisions & Strategies

Marketing Mix : 4 Ps

Product Price Place Promotion

Pricing is a very important strategic issue, as it is directly related to product positioning.

Pricing affects other marketing mix elements such as product features, Channel decisions and promotion.

Steps to Price a Product (Not always same)

Develop Marketing Strategy

Market Analysis, Segmentation, Targeting and Positioning

Marketing Mix Decision

Define the Product, Distribution and Promotional strategies

Manage Demand curve

Demand Price relation

Cost
All fixed and variable cost is calculated

Environmental Factors
PEST

Set Pricing Objective

Profit maximization, Revenue maximization, Price stabilization

Determination of Price
Use one or combination of the above factors and make a pricing structure, give discounts etc.

Pricing Objectives

Current Profit Maximization

This stresses on Current profits, taking into account revenue and costs

Current Revenue Maximization

Stresses on increasing the Current revenue, and not profits. The motive is to maximize market share and gain profits in long term.

Maximize Quantity
This stresses to maximize the number units sold to decrease long-term costs as the experience curve predicts

Maximize Profit Margin

Stresses to increase the profit margin per unit, as, number of unit being sold may be low.

Quality Leadership
Use price to signal high quality, to position the product as quality leaders.

Partial Cost Recovery

Organization which has other revenue sources may seek partial cost recovery.

Survival
Incase of market decline or overcapacity, the emphasis may be on to the survival in the market only and to cover the costs.

Status Quo
Price Stabilization to avoid price wars and maintain stable level of profits

Skim Pricing

Skimming is the strategy used to pursue the objective of Profit Margin Maximization.

Skimming is most Appropriate ..

Demand is expected to be relatively inelastic, ie. The customers targeted are not highly price sensitive. Large cost savings are not expected at high volumes or it is difficult to predict the cost savings that can be achieved at high volumes. The company does not have the resources to finance the last capital expenditure for high volume production with initial low profit margins.

Penetration Pricing, most appropriate

Objective is to maximize the quantity by lowering the prices.

Demand highly elastic, ie. Customers are price sensitive, the demand increases as the price decreases. Economies of scale The product should be of mass appeal. Major threat by competition.

Pricing Methods

Cost Plus Pricing

Set the price at the production cost adding a certain profit margin.

Target Return Pricing

Set the price to achieve a target return on investment.

Value Based Pricing

Base the price on the effective value to the customers which is relative to the alternative product.

Psychological Pricing
Base the price on psychological factors of the consumer.

Price Discounts

Quantity Discounts
Offer to customers who purchase is large quantities.

Cumulative Quantity Discount

A discount that increase as the cumulative quantity increases.

Seasonal Discount
Based on the time when the purchase is made.

Cash Discount
Extended to customer who pay there bill before a specified date.

Trade Discount
A functional discount offered to channel members for performing there roles.

Promotional Discount
A short term discounted price, offered to stimulate sales.

Brand Extensions

Using an existing brand name to promote a product in a different category, is Brand Extension The key difference between line and brand extension is the product category.
In line extension the product Category remains constant whereas in brand extensions product category is a variable.

Example

Ponds - Cold cream, Toilet soap Shampoo, Tooth paste, Moisturizing lotion, Talc & Face wash. LG Television, Refrigerators, Computer monitors, Microwaves, Air Conditioners, Washing Machines & Mobile phones. Park Avenue Shirts, Shaving cream, Jeans, Belts, Perfumes, Soap & Razor.

Sub-Branding Strategy

Using a new brand name in conjunction with a family brand name to introduce new products.

Examples: Panasonic Viera , Samsung LED TV

Co-Branding/Brand Alliance Strategies

When two or more brand names are attached to a product.

Example: Compaq - Intel (Intel inside)

Why Brand Extension?

Cost of New launches

Promotional Efficiency Consumer Benefits Feedback effects Returns

Types of Extensions

Product form extension A product launched in a different form usually means line extension, but if a different product form constitutes an entirely different product category.

Example:
Amul Milk

Amul Condensed Milk

Real Juices

Real Juice Concentrate

Types of Extensions
Companion Product The idea here is to capitalize on product complementarily. The consumer may view both the products jointly. Example :

Colgate Dental Cream Colgate Tooth Brush

Gillette Razors

Gillette Shave forms

Gillette After Shave

Brand Image or Prestige

A brand extension may involve a foray into unrelated product categories based on a brands exclusive image or prestige value. Example

Tata steel , Watches, Software development(TCS), Tata power

Brand Extensions is not an easy task

Extensions are not simple as they appear to a layman.

Consumers reject extensions when they do not make sense. Therefore, it must begin with exploring the brand in a prospects mind. Brand extension is not a physical act of merging two products.