Microsoft PowerPoint - Day 4.2 Brand Management.pptStrategic Brand ManagementStrategic Brand Management
Exeter MBA and MSc Exeter MBA and MSc –– Day 4Day 4
Lecture 1Lecture 1
Brand ManagementBrand Management
Corporate brandsCorporate brands
Brand extensionsBrand extensions
Some definitionsSome definitions
Most brands are part of a wider organizationMost brands are part of a wider organization
Brand architecture Brand architecture –– the structure and the structure and
organization of brandsorganization of brands
Brand hierarchy Brand hierarchy –– the different the different
organizational levels within a brand systemorganizational levels within a brand system
SubSub--brand brand –– an identified division (other of an identified division (other of
products) within a brandproducts) within a brand
Jack Buckner
BRANDBRAND
HPHPNestleNestleGeneral MotorsGeneral MotorsCORPORATE CORPORATE
Product Range Brand Product Range Brand
Umbrella BrandUmbrella Brand
Endorser BrandEndorser Brand
Company
Allows multiple market entry and flexibilityAllows multiple market entry and flexibility
Consumer oriented branding not corporate Consumer oriented branding not corporate brandingbranding
Encourages innovation and risk taking (failure will Encourages innovation and risk taking (failure will reflect less on corporate brand)reflect less on corporate brand)
Possible to control greater shelf space with strong Possible to control greater shelf space with strong brandsbrands
BUT expensive and requires sophisticated BUT expensive and requires sophisticated organization organization
Example Example –– P & G (Ariel, Tide, Crest, Pampers, P & G (Ariel, Tide, Crest, Pampers, Pringle)Pringle)
Jack Buckner
BRAND
Umbrella Brand StrategyUmbrella Brand Strategy
Builds brand equity at the corporate levelBuilds brand equity at the corporate level
Corporate brand strength is criticalCorporate brand strength is critical
Reduces marketing investment in new categoriesReduces marketing investment in new categories
Allows fastAllows fast--follower strategies in innovative follower strategies in innovative
companiescompanies
Easier for horizontal rather than vertical extension Easier for horizontal rather than vertical extension
(in some categories)(in some categories)
Risk of overRisk of over--stretchingstretching
Examples Examples –– Sony, Canon, SchweppesSony, Canon, Schweppes
Jack Buckner
Endorsing Brand
Brand A
Product or
range A
Promise A
Brand B
Product or
range B
Promise B
Brand N
Product or
range N
Promise N
Endorser Brand StrategyEndorser Brand Strategy
Allows dual brand equity to developAllows dual brand equity to develop
Quality seal of approvalQuality seal of approval
Cheaper method of building brand equity in Cheaper method of building brand equity in
company namecompany name
Use product brands to express different aspects of Use product brands to express different aspects of
personalitypersonality
valuesvalues
Jack Buckner
Brand architecture debate Brand architecture debate –– 3M3M
In 1981 created 244 new brandsIn 1981 created 244 new brands
Over 1500 trademarksOver 1500 trademarks
Established branding committeeEstablished branding committee
–– 3M to be sign off on all products (except 3M to be sign off on all products (except cosmetics)cosmetics)
–– Ban the use of more than 2 names on one Ban the use of more than 2 names on one productproduct
–– Clear guidelines for branding to all subsidiariesClear guidelines for branding to all subsidiaries
–– Brand decision treeBrand decision tree
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industryindustry
FordFord
GMGM
Critical issue is clear structure and Critical issue is clear structure and understandingunderstanding
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Facilitate new product acceptanceFacilitate new product acceptance
Increase profitsIncrease profits
Avoid cost of developing a new brandAvoid cost of developing a new brand
Appeal to new consumersAppeal to new consumers
Revitalize the brandRevitalize the brand
Prevent marketing myopiaPrevent marketing myopia
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Hurt parent brand imageHurt parent brand image
Dilute brand image (diluted investment)Dilute brand image (diluted investment)
Confuse consumersConfuse consumers
Retailer resistanceRetailer resistance
Some brand extension researchSome brand extension research
Successful brand extensions have a Successful brand extensions have a perceived fit (the basis for fit may vary)perceived fit (the basis for fit may vary)
High quality brands stretch further than High quality brands stretch further than average quality brandsaverage quality brands
A prototype brand can have difficulty A prototype brand can have difficulty extendingextending
Vertical extensions can be difficultVertical extensions can be difficult
Most effective advertising focuses on the Most effective advertising focuses on the extension (not the parent)extension (not the parent)
Keller – Strategic Brand Management
Skateboarding – fast expanding sport
Traditional sports brands struggled –
separate division
approach
number one sports company”
Recognised brand extension not
Extend profits, not product linesExtend profits, not product lines
Why do companies extend their brands?Why do companies extend their brands? –– Customer segmentationCustomer segmentation
–– Consumer desiresConsumer desires
–– Pricing breadthPricing breadth
–– Excess capacityExcess capacity
–– ShortShort--term gainterm gain
–– Competitive intensityCompetitive intensity
–– Trade pressureTrade pressure
–– Lower brand loyaltyLower brand loyalty
–– Under exploited ideasUnder exploited ideas
–– Stagnant category demandStagnant category demand
–– Poorer trade relationsPoorer trade relations
–– Increased costIncreased cost
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RecommendationsRecommendations –– Improve cost accountingImprove cost accounting
–– Allocate resources to winnersAllocate resources to winners
–– Research consumer behaviourResearch consumer behaviour
–– Manage deletionsManage deletions
–– CoCo--ordinate marketingordinate marketing
Findings debatedFindings debated –– Energizing a brand?Energizing a brand?
–– Manage a dynamic environment?Manage a dynamic environment?
–– Consumers are forgivingConsumers are forgiving
–– Marketers as biologistsMarketers as biologists
HBR on Brand Management
Vertical extensionVertical extension
–– Upwards (The silver bullet concept Upwards (The silver bullet concept –– Audi TT)Audi TT)
–– Downwards (Levis signature range) Downwards (Levis signature range)
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Guess the Brand?Guess the Brand?
““I believe there is no limit to what a brand I believe there is no limit to what a brand
can do. You can ignore those who go on can do. You can ignore those who go on
about brand stretching.about brand stretching.””
“…“…attitude is, weattitude is, we’’ll just get ll just get …….to do a .to do a
personal appearance and it will help the personal appearance and it will help the
brand.brand.””
““There are times a brand has to say There are times a brand has to say ‘‘nono’’ to a to a
brand extension.brand extension.””
The Virgin EmpireThe Virgin Empire
Richard Branson founded in 1972 Richard Branson founded in 1972 –– record shoprecord shop
Virgin airlines Virgin airlines –– 19841984
1986 went public, 1988 private1986 went public, 1988 private
midmid--19901990’’s s –– over 100 companiesover 100 companies
1997 1997 –– railwaysrailways
Virgin.com and telecommunications late 1990Virgin.com and telecommunications late 1990’’ss
1999 1999 –– sold 49% airlines to Singapore Airlinessold 49% airlines to Singapore Airlines
2000 2000 –– withdraws from clothingwithdraws from clothing
2002 2002 –– appoints first Brand Marketing directorappoints first Brand Marketing director
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Richard BransonRichard Branson
Quality, fun, challenge, innovation, Quality, fun, challenge, innovation,
provocativeprovocative
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Failures Failures –– clothing, computersclothing, computers
““For every Virgin Atlantic or Virgin music group For every Virgin Atlantic or Virgin music group there have been numerous failures.there have been numerous failures.””
““For a company so diversified, it is vulnerably For a company so diversified, it is vulnerably dependent on a single brand.dependent on a single brand.””
““I can do what I want.I can do what I want.””
Virgin Direct Virgin Direct –– ““we are going to exist for 200 we are going to exist for 200 years and clearly Richard is not.years and clearly Richard is not.””
““Well, we would not launch a cigarette.Well, we would not launch a cigarette.””
Jack Buckner
Brandstretch Brandstretch (David Taylor)(David Taylor)
““Why 1 in 2 extensions fail, and how to beat the Why 1 in 2 extensions fail, and how to beat the
odds.odds.””
Virgin: the biggest ever brand ego trip?Virgin: the biggest ever brand ego trip?
Strengthen the coreStrengthen the core
Vision, ideas, focus, deliveryVision, ideas, focus, delivery
Brand architectureBrand architecture
Heroes Heroes –– Gillette Mach 3, Gillette Mach 3, Bacardi BreezerBacardi Breezer, ,
Blockbuster, PampersBlockbuster, Pampers
Villains Villains –– Tango Tropical, LeviTango Tropical, Levi’’s suits, s suits, easyGroupeasyGroup
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IntelIntel
Jack Buckner
Global brands Global brands
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adidas / Cocaadidas / Coca--ColaCola
A global adidas branded sports drinkA global adidas branded sports drink
adidas providesadidas provides
–– Sports credibilitySports credibility
CocaCoca--Cola providesCola provides
–– Product expertiseProduct expertise
–– Global distributionGlobal distribution
Income potential for adidasIncome potential for adidas
But risk of brand dilution greater for adidasBut risk of brand dilution greater for adidas
CocaCoca--Cola brand equity and marketing Cola brand equity and marketing
capacity significantly greater than adidascapacity significantly greater than adidas
Budgets would dwarf adidas brandBudgets would dwarf adidas brand’’s effortss efforts
Distribution issuesDistribution issues