Brand Management Midterm StudyCOMMUNICATE a DISTINCT ADVANTAGE January 28, Guide January 23, 2013 * Inter Brand’s Valuation Approach * The increasing recognition of the value of intangibles came with the continuous increase in the gap between companies’ book values and their stock markeCOMMUNICATE a DISTINCT ADVANTAGE January 28,t valuations, as well as sharp increases in premiums above the stock market value that were paid in mergers and acquisitions in the late 1980s. * The brand is a special intangible that in many businesses is the most impoCOMMUNICATE a DISTINCT ADVANTAGE January 28,rtant asset. This is because of the economic impact that brands have.
They influence the choices of customers, employees, investors and government authorities. In a world of abundant choices, such influence is crucial for commercial success and creation of shareholder value. * How much the brand is likely to earn for the company in the future? * Inter Brand Uses * Analyst’s projections * COMMUNICATE a DISTINCT ADVANTAGE January 28,Company financials * Quantitative/ qualitative * To capture value of a brand * Market Segmentation * Financial Analysis * Demand Analysis * Competitive Benchmarking * Brand Value Calculation * 10 Principles of Brand COMMUNICATE a DISTINCT ADVANTAGE January 28,Strength * Commitment – organization’s support Protection – legal & proprietary * Clarity – articulation * Responsiveness – evolve & renew * Authenticity – heritage, consistency * Relevance – target alignment * Understanding – 24/6 x 365 * Consistency * Presence – consumer “buzz” * Differentiation – distinct/ unique * Brand Strength * Gainers * Innovation * Emotional Connection * Investment * Value Proposition * Losers * Not In Tune * Unclear Brand Identity/ CVP * Lack of InvestmentCOMMUNICATE a DISTINCT ADVANTAGE January 28,
* Lack of focus on core * Conjoint Analysis * What features a brand should have and how should it be priced? * Steps * Collecting Tradeoffs Estimated buyer value systems * Making choice predictions * End Result = Quantitative Analysis of what consumers really want with each attribute evaluated in the context of the others; incorporating the trade offs * Brands make a CONNECTION with people and COMMUNICATE a DISTINCT ADVANTAGE January 28, 2013 * Decision Support Systems * A brand’s core is TRUST * Why is brand building hard? * Price Pressure * Abundance of Competition * Fragmented markets and media * Complex brand strategies * Bias toward changing strategies * Branding against innovation * Sin COMMUNICATE a DISTINCT ADVANTAGE January 28,of complacency Short term pressure * Analyzing Customer Perceptions and Preferences * Favorite Brand demonstrates power of emotional elements and benefits that contribute to the strength of a brand in addition to the functional benefits Dolan Notes * Consumer Perceptions * Consumer insights tools business decisions * * Perception: “think” “see” * Preference: what they actually “buy” * Perceive Volvo as a safe car but don’t want to buy (preference) * Analyze how consumers “see” brand vs. competitors COMMUNICATE a DISTINCT ADVANTAGE January 28,* Set product positioning * New business opportunities Evaluate brand against competition * Is value prop and message clear? * Perceptual Research * + understanding of current position, visualizes gaps, guestimate perceptions, directs R&D * – static, no cost provision, not substitute for management judgment * Profile Analysis
* Snake plots/ spider maps * Effective with limited brands * Rate product/ brand on a scale * Compute average of responses & plot * Compare against other brands * Perceptual Mapping * Attribute space depicting pictoral rep of market data * Based on attributes or similarities Shows similarities or differences in relation of attributes according to consumer perception: Attribute Rating Method * Factor analysis * Hard attributes * Positioned on multi axis * Closeby – related * 90 degrees – largely unrelated * 180 degrees – trade off, little or no brand connection * Overall Simplicity method * When Quantitatively scaling attributes is difficult * MDS based on similarity inputs * Relative product positioning * Soft attributes * Consumer Preferences * What features? What price? * Concept testing * Reaction based, cost effective Positioning concept * Shows actual purchase choice * Core idea * Verbalizes theme of concept * How likely are you to buy this product? * Definitely, probably, maybe, doubtful, no * Frequency also evaluated * Conjoint Analysis * Insight based, complex, time consuming * Measures trade-offs and or options to a given concept * Product = bundle of attributes * What if situations to demonstrate what motivates consumers buying decisions * Collect data based on “intent to buy” and what attributes are important to consumer * Based on value system, products can be rated Consumers prefer to buy at the highest utility * Models * Diagnostic tools to aid measurement/ allow for deductive estimates of market performance * Different models may lead to different results for same issue * Can help define/ predict success of future marketing plan * Models of Sales Formation * Three Main Models * Taking overall sales and breaking it down into various categories of customers, categories that help brand manager develop focused marketing strategies * Trial Repeat Model: Market Share = Trial * Repeat
* Awareness * Distribution * Unaware Aware Trial Repeat Loyalty * Geoffrey Moore’s Diffusion of Innovation: * Production market position cycles vary in momentum and market share levels as marketers and consumers move across a formation curve * Each segment will require a different value proposition – growth stage for example will not be motivated by same factors that influence early adopters or innovators * Innovators, early adopters, early majority, late majority, laggards * Consumer Learning Models Qualitative interpretation of extensive consumer data * Attitudinal/ behavioral phases that impact consumer buying patterns/ gauge market performance * Learn (awareness & knowledge), feel (attitude & preference) & do (behavioral) * SOV = SOM (Shroer) * Greater level of ad spend = larger market share * Requires $$ commitment and LT spending * Variants: * Defensive/Offensive Tactic (Shroer Model) * Niche (david vs. Goliath) * Extraordinary Event (Superbowl)
January 30, 2013 DSS Marketing Impact Summary L’Oreal of Paris * Global Brand Extensions * Can L’Oreal bring “class to mass” in the US? * HQ in France, quality, innovation and geographic expansion * Technological innovation drives sales * Heavy commitment to build brand equity, consumer awareness and + impact on trade partners * Multichannel Strategy – Lancome and biotherm @ department & specialty stores and Plentitude @ mass market outlets * Star product and trickle down strategy Advertising strategy * Feature star product * Communicate technological superiority * USA tactics * Technological advanced products key * Introduce entire line at once 14 SKUs * Lever brand, distribution and placement from hair color group * Department store format, self-service outlet * Force full line purchase and eye level positioning next to oil of Olay * French ads translated directly to English * L’Oreal has lost money in all 8 years of opearyion * Market share has leveled off Plentitude “offers little” low market share in most product areas and not leading product * Hamilton realizes that it retails at premium price * Goals: top line growth, bottom line improvement, us market repositioning and maintain brand culture/ technology portfolio * Technologically advanced was exactly opposite to some of the essential attributes of skincare resultant skin feel and reasonable pricing (essential for a mass market product) * Low awareness to trial ratio compared to Olay and low repeat * Success/ failure * Share – less than half of Olay Pricing – premium to competitors
* Image – French communications translated to english! * Category Penetration – ignores the largest $$ segment of cleansers, focused on tech products * SOV = SOM: outspend the market per share point * Profit & loss – loss all years! * Problem Areas * Name * Product & packaging, price, age perceptions, shelf presentations * Analysis of Problem * Customer surveys – qualitative and quantitative (perceptual maps, brand awareness) * L’oreal brand name worked well for most people. Maybe expensive but good quality * Names should be less confusing Too many products – streamline portfolio * Packaging – expensive looking, too wordy * Target market unclear – older women? * L’oreal has an expensive brand association to it * Solution * Revitalift technology realted, age care product * Line scaled back their SKUs * L’Oreal name more prominent * Brand issues are not solved through $$$ discounts, new products, prmotions February 4, 2013 * Strong brands make a connection with people and communicate a distinct advantage * Brand identity: What you want your brand to stand for in the mind of the consumer * Aaker Brand needs to expand to remain relevant and lasting * Strategic planning – long term instead of ST tactical planning * Internal and external focus * Reis * Narrow fous to build strong brand * Periodic brand audit, new product branding choices * 12 dimensions grouped under 4 themes: product, person, organization and symbol * Core and extended identities * Help establish CVP with functional, emotional and/or self-expressive benefits Strategic Brand Analysis Brand Identity system Strategic Brand Analysis * Customer analysis (segmentation etc. * Competitor analysis * Self-analysis (existing image, heritage, strengths, abilities, values) Brand Identity system * Product – high recall when brand cued, quality, use * Person * Organization * Symbol Brand Image Traps * Brand Image Trap * Brand image becomes identity, consumer perception becomes primary * Brand Position trap * Brand identity becomes confused with singular promotional effort – functional benefits * External perspective trap * What company stands for becomes unclear internally * Product attribute fixation trap * Most common Product (attribute) becomes synonymous with brand
* Limits future potential * Non differentiated products, key attributes become competitive targets, limits change response * Use BRAND IDENTITY tool to break out of traps * Broad vs. narrow * Strategic vs. tactical * Internal vs. external February 6, 2013 * Aaker * Elements that make a brand differentiate, clarify and enrich its identity * Functional, emotional and self-expressive benefits delivered by the brand to deliver value to the consumers and creates brand – customer relationships * Functional benefit Product attributes functional utility to customer * Can be copies/ beat on price/ limit extensions * Expand the brand beyond the product * Include other types of benefits * Emotional benefit * Positive feelings * Richness and depth * Self – Expressive * Person to communicate their self-image * Strong connection with users * Kopp Notes on CVP * Price may imbalance CVP equation * Too high or too low skews emotional/ self-expressive benefits * Kop: value for the money? * Money spent on purchase, maintenance of products * Value = Benefit – cost OR Benefit/Cost Tools * Perceptual maps * Conjoint analysis * Value maps * * * Luxury for the Masses * Accessible super premium brands, old luxury brand extensions, masstige (b/wmass and class) * Masstige – b/w mass marketed products and niche luxury products * Bains Study * Organic Growth * Smart Cost Structure * Improved customer targeting February 11, 2013 * Brand Personality * Human characteristics associated with given brand * Associations that reflect consumer usage * Blends emotional and self-expressive benefits into a CVP * Aaker * The Big 5 * Sincerity Ruggedness * Competence * Sophistication * Excitement * Brand personality impacts BE * Self-Expression Model * Relationship basis model * Functional benefits representation model * Building Brand Personality – Kopp * Cultural relevance & image * Image and celebrity * Emotional ladder
* Values * Benefits * Attributes * Net of thinking and feeling associations * Gestalt concept (unified concept of brand personality) * Thinking based thoughts * Feelings based thoughts * Unique differentiator from competition February 13, 2013 Ducati Case * Case facts 95% male * Japanese cos, BMW – lagged in share leadership in ALL segments * Transportation 500cc * Premium price strategy * Few executive dealers, sales/dealer substandard in all markets * + designers, technology, product design, racing persona, loyal customer base with repeat * – no cash to pay, idle factories, unhappy employees, long lead time * Problems * CVP out of balance * Poor cash flow management * No marketing Plan * Bad channel strategy * Lack of management focus and solidarity * Brand Identity traps * Product attribute (desmo is a brand) External perspective (employees lost) * Brand image (quality?? ) * Solutions * Bring together F + E + SE * BP entertainment company * Internally/externally new BP * Build employee morale – no external perspective trap * Reposition to broaden market – escape brand image * Maintain and enhance r&d identity innovation driven escape attribute trap 1) Build BE a. Identify positioning and clarify diffrentiators b. Include BP in brand architecture 2) Optimize manufacturing c. Kaizen, JIT 3) Refocus R&D drive innovation February 19, 2013 Brand Equity – Kopp *
* Drivers and outcomes * CVP product performance/ features at a price = value * Value/ delivery = promotion & place * Authenticity reputation, longevity etc. * Brand Personality = gestalt of thinking + feeling * Brand Assets – trademarks etc. * Aaker * Types of consumer needs: functional, emotional, self-expressive * Set of assets linked to a brand’s name/ symbol that adds the value provided by a product or service to a consumer – awareness, association, quality, loyalty, “other” * Awareness is recall + recognition Graveyard model (high recognition, low recall) * Ultimate awareness (generic brands) * Association positive attitude/ feelings * Quality real vs. perceived * Loyalty = awareness + associations + quality * Other Assets – color, logo etc. February 20, 2013 * Rediscovering Market Segmentation * Black & Decker Case February 25, 2013 * The Brand Relationship Spectrum * Aaker * Alternatives in New Product Brand February 27, 2013 * Diesel Case March 4, 2013 * Diesel Recap * Big Idea in a Big Category? New Brand?
* Strategies to up market: * Low end premium range Differentiate, build in major different increments * Silver Bullet = upscale entry’s is to enliven old brand and give it cachet * Ad Spending: Growth Market Share * Your Brand’s Best Strategy FUZZY MATH 1. Market Share = Awareness x Trial x Repeat x Distribution 2. SOV = SOM 3. BI = Person + Organization + Symbol + Product 4. CVP = F + E + SE 5. Purchase Decision [PD] = Value + Consumer Relationships 6. Value = Benefits [functional + emotional + self-expressive] – Costs 7. Value = Benefits / Costs 8. Brand Essence (Brand Equity) = BI + CVP + BP 9. Brand position = BI + CVP+ BP 0. SOV = SOM [Shroer] 11. MS = BV + CP [Shroer] a. Brand value + consumer preference drives market share 12. Brand Profitability = MS + nature of the category b. MS increases = Profitability increases [Vishwanath] * Brand identity traps: * Brand image * Brand position * External perspective * Productive attribute Brand identity = personal + symbol + org + product Brand identity = core + extended CVP = functional + emotional + self-Expressive Kopp CVP = benefit – cost DSS BP’s effect on brand equity Aaker’s big 5 brand personality Excitement Ruggedness Sincereity Competence Sophistication