A clear, structured summary of the lectures (PowerPoint + notes) of Brand Management, as part of the MScs Marketing Management/Analytics at Tilburg University. Henk Roest's PowerPoints are somewhat messy and chaotic, but this summary will provide you with the necessary information to ace the exam. ...
,Module 1 – Brand Management
Present
Branding: Used to differentiate it from competition and make it more attractive. In the past, there was no
such thing: every commodity was the same. A brand is a name, term, sign, 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. A brand creates a certain amount of meaning, reputation, preference
etc. in the eyes of the customer. A brand is a product, but one that adds other dimensions that
differentiate it in some way from other products designed to satisfy the same need. Brands can charge a
significant price premium for the same product. There are two perspectives:
• Physical product: Brand from the organizations’ point of view. This is the core, tangible and
augmented product. The product itself defines the product
• Psychological product: Brand from the customers’ point of view. This is the total product. The
people define this product
Product: Anything that can be offered to a market for attention, acquisition, use or consumption that
might satisfy a need or want (Kotler). It differs from a brand, because it is tangible (vs intangible), it can be
copied (vs unique), it can be outdated (vs potentially timeless) and it involves transactions (vs forms basis
of connections). Four levels (Levitt):
• Core product (e.g. a pencil)
• Tangible product (e.g. different types of pencils)
• Augmented product (e.g. a lifetime warranty)
• Total product (e.g. all the other aspects, such as status)
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,Organization vs customer: They both have different ‘lenses’:
• Organization: They have a value proposition, which is a promise of value to be delivered and
acknowledged, and a belief from the customer that value will be appealed and experienced. The
value proposition can apply to an entire organization, or parts thereof, customer accounts,
products/services of brands. Brands are important for them because it is:
o Means of identification to simplify handling or tracing
o Means of legally protecting unique features
o Signal of quality level
o Means of endowing products with unique associations
o Source of competitive advantage (barriers of entry)
o Source of financial returns
• Customer: They look at the customer value, e.g. whatever product has the best service, highest
status, least risk, most convenience etc. They strive for gaining as much as possible, OR having at
least pain as possible. Companies try to understand the customer value with marketing analytics.
Brands are important for them because it is:
o Identification of source of product: This was the main goal of a brand in the past
o Assignment of responsibility to product maker
o Risk reducer
o Search cost reducer (Doesn’t necessarily have to be money, but could also be
behavioural costs, e.g. stress, frustration)
o Bond with maker of product
o Symbolic device
o Signal of quality
Brand management: The design and implementation of marketing programs and activities to build,
measure and manage brand equity. The key to branding is that consumers perceive differences among
brands in a product category. The brand resides in the minds of consumers, so companies should give it a
label (identification) and provide meaning (what it does). It strives for a fit of the value proposition and
customer value. It’s about synchronizing what companies give and what customers find important. Does
brand image match with brand identity? Its goals are to create:
• Consumer-Based Brand Equity (CBBE): The differential effect that brand knowledge has on
consumer response to the marketing of that brand. A brand has a positive customer-based brand
equity when customers react more favourably to a product and the way it is marketed when the
brand is identified than when it’s not (e.g. it’s a fictious brand instead. It stresses the importance
of the role of the brand in marketing strategies. Differences in outcomes arise from ‘added value’
as a result of past marketing activities for the brand. Brand equity provides a common
denominator for interpreting marketing strategies and assessing the value of a brand. These
values can be manifested in different ways, e.g. greater proceeds (gains) and/or lower costs
(pains). CBBE is the most important part in brand management.
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, • Financial-based brand equity (FBBE): It enables the brand to earn more in the short and long run.
It is the incremental cash-flow which accrue to branded products over and above the cash flows
which would result from the sale of the unbranded product. It is the net cash flow attributable to
the brand after paying the cost of capital invested to produce and run the business and the cost
of marketing
Customer complaints: Even though speed of response is the most important thing, the underlying need is
the involvement of the company
Things that can be branded:
1) Physical goods
a. Fast-moving packaged consumer goods: Almost everything is branded
b. Business-to-business products: Creating a positive image and reputation for a company
as a whole
c. High-tech products: Financial success no longer driven by product innovation or latest
product specifications and features alone, but also by brand
2) Services: Branding makes the abstract nature more concrete and addresses potential intangibility
and variability problems
3) Retailers and distributors: Generates consumer interest, patronage and loyalty in store and learn
consumers to expect certain brands and products from a store, but also their own private label
brands
4) Online products and services: Improving customer associations because unique product
attributes of the brand (convenience, price etc.) are not enough
5) People and organizations
6) Sports, arts and entertainment: so-called experience goods
7) Geographic locations
8) Ideas and causes: E.g. the aids ribbon
Future
Future challenges and opportunities of brand management:
1) Savvy customers: It’s difficult to persuade the more experienced consumers with traditional
communications
2) Brand proliferation: More complex brand families and portfolios, few ‘mono’ products brands
3) Media fragmentation:
a. Firms spend more on nontraditional and new forms of communication, e.g. interactive
social media
b. Increasing expenditure on promotion, decreasing expenditures on advertising
4) Increased costs
a. NP-intro (?)
b. Existing product support
5) Increased competition: It’s more difficult to differentiate
a. Demand-side: Mature markets
b. Supply-side: Brand extentions / deregulation / globalization low-priced competitiors
(growth of private labels and increasing trade power)
6) Greater accountability
a. Short-term performance orientation
b. Increasing job turnover: this leads to short-term performance orientation, e.g. with
promotions, so as to keep your job
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