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Brand ManagementTopic 1: Brand Management
Brand management: The past
Once upon a time, there were commodities…
• Undifferentiable by seller/manufacturer
• Often sold loose
• Quality highly variable
• In competitive markets we have many manufacturers/sellers for the same commodity
How do I get a buyer to prefer and buy my ‘commodity’?
Brand management is derived from the old Norse word ‘brandr’, meaning ‘to burn’. This comes
back in different things: quality marks were branded on Chinese porcelain, pottery jars from
Grecian, Roman and Indian artifacts dating from 1300 BC. These marks were used to prove quality.
Cattle ranchers also branded their cattle. Bakers did so to mark their bread (English law in 1266).
Think about the moon & the stars (P&G brand, see Figure 1). Uneeda biscuits – 1898; first
nationally branded biscuit.
Brand: “A name, term, sign, symbol or design, or a combination of them, intended to identify the Figure 1
goods and services of one seller or group of sellers and to differentiate them from those of
competition” (AMA).
In practice, a brand creates a certain amount of meaning, reputation, preference and so on in the eyes of the customer.
Brand management: The present
Letting the customer in: “It’s no longer 100% what the companies tell you about the brand – that has stain fighting power or
what have you – but it’s really about word of mouth, ratings and reviews”- Michelle Aleti, founder of thinkwell marketing
“A brand used to be what you said it was, and you were able to communicate that very efficiently. Today, brands are the sum
total of what others say that you are”.
4 Levels (Levitt)
Changing perspectives: (see Figure 2)
1. Core product (gas = gas, table = table)
• From the organization’s point of view: 2. Tangible product (extra’s, like more
o Physical product (e.g., a Cross pen). colours)
• To the customers’ point of view: 3. Augmented product (e.g., guarantees)
o Psychological product 4. Total product
Figure 2
Also, think about the Diet Coke vs. Diet Pepsi blind taste test
• Prefer Pepsi sample: 51%, prefer Coke 44%, no preference 5%.
Then, Diet Coke vs. Diet Pepsi in identified taste test (brand names revealed)
• Prefer Pepsi sample: 23%, prefer Coke 65%, no preference 12%.
,Brand = a product, but one that adds other dimensions that differentiate it in some way from other products designed to
satisfy (the same) needs.
These valued differences can be:
• Rational and tangible, but are often (perfect cut, fines cotton,
premium packed).
• Intangible, emotional and symbolic (such as stylish, comfort,
status)
Brands are more and more intangibles that have become the key
source of corporate value. (see fig 3.)
The present: product vs. brand: Figure 3
Product = “anything that can be offered to a market for attention,
acquisition, use or consumption”
Branded product = “a product that has been given a name for identification purposes”
Brand = “a product, but one that adds other dimensions that differentiate it in some way from other products designed to
satisfy (the same) needs.”
Product → Branded product Branded product → Brand
(Physical product perspective) (Psychological product perspective)
• Tangible: can be touched by customer • Intangible: lives in customer’s mind
• Can be copied • Unique
• Can be outdated • Potentially timeless
• Involves transactions • Forms basis of connections
• Differentiation • Relevance
• Attributes • Personality
• Promise • Relationship
• Static • Dynamic
• Mass • Individual
• Awareness • Meaningfulness
From identification, to identity.
Why are brands important for …?
1. Consumers
- Identification of source of product
- Assignment of responsibility to product maker
- Risk reducer (different kinds of risk)
- Search cost reducer (e.g., heuristic)
- Bond/pact with maker of product
- Symbolic device
- Signal of quality (think about Porsche, who made shoes; people think they must be good quality because their
cars are)
2. Producers
- Means of identification to simplify handling or tracing
- Means of legally protecting unique features
- Signal of quality level (e.g., “made by Samsonite)
- Means of endowing products with unique associations
- Source of competitive advantage (barriers of entry)
- Source of financial returns
- E.g., Uber, Facebook, Amazon
,CBBE (Customer Based Brand Equity) = (1) Differential effect that (2) brand knowledge has on (3) consumer response to
the marketing of that brand
A brand has 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 is not (e.g., when it is attributed to a fictitiously named or unnamed
version of the product).
Brand equity… 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
• This value can be created in many ways
• Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a
brand
• Value can be manifested in different ways e.g., greater proceeds (gains) as opposed to lower costs (pains)
Brand management goals:
• Consumer-Based Brand Equity (CBBE)
o Build, sustain, and leverage positive, strong, active, unique meanings of the brand (think of Chiquita
banana ad).
• Financial-based brand equity (FBBE)
o To enable the brand to earn more in the short and long run
The key to branding is that consumers perceive differences among brands in a product category/ the brand resides in the
minds of consumers, so…
• Give a label (how to identify), and
• Provide meaning (what it does for you)
→ Can everything be branded?
→ Commodity (e.g., milk, cheese)
1. Physical goods
- Fast moving packaged consumer goods: almost 100% of all products are “branded”
- Business-to-business products: creating a positive image and reputation for a company as a whole (e.g.,
Boeing)
- High-tech products: financial success no longer driven by product innovation or latest product specifications
and features alone (e.g., Intel)
2. Services
- Address potential intangibility and variability problems
- Brand symbols to make abstract nature more concrete
3. Retailers and distributers
- Generate consumer interest, patronage and loyalty in a store and
- Learn consumers to expect certain brands and products from a store
- Private label brands (such as Albert Heijn, Tesco)
4. Online products and services
- Improving customer associations because unique product attributes of the brand (convenience, price, etc.) are
not enough (e.g. Google vs. Googol)
5. People and organizations
6. Sports, Arts and Entertainment (experience goods; such as Walt Disney, Pixar)
7. Geographic locations (Fly Istanbul)
8. Ideas and causes
Brand management: The future
Why do some brands fail?
Some marketers failed to take into account the changing market conditions and continued to operate with a “business as
usual” attitude or were inappropriate int heir response (e.g. Xerox and also Olivetti, or Nokia and also Blackberry).
, The future: challenges and opportunities
1. Savvy customers
- It’s difficult to persuade the more experiences consumers with traditional communications… and to be
“respected” is not enough
2. Brand proliferation
- More complex brand families and portfolios, few “mono” products brands (think about Nestle, basked full of
different brands. OR: Kitkat, which also has ice creams, drinks, chocolate bars etc..)
3. Media fragmentation (what are causes?)
- Firms spend more on nontraditional and new forms of communication, e.g. interactive, social media
- Increase expenditures on promotion, decrease expenditures on advertising
4. Increased costs
- NP-intro
- Existing product support
5. Increased competition
→ more difficult to differentiate
- Demand side: mature markets
- Supply side: brand-extensions/deregulation/globalization low priced competitors (growth of private labels
and increasing trade power)
6. Greater accountability
- Short-term performance orientation
- Increasing job turnover
Business Value Chain
What firms do → what customers think, feel, do → what firms get
Marketing
Customer Market Shareholder
program
mindset performance value
investment
• Product • Awareness • Price premiums • Stock price
• Communication • Associations • Price elasticities • P/E ratio
• Trade • Attitudes • Market Share • Market capitalization
• Employee • Attachment • Expansion success
• Other • Activity • Cost structures
• Profitability
Brand management: the process
Topic 1: Brand management
Brand management = the design and implementation of marketing programs and activities to build, measure and manage
brand equity
Key topics:
2. Brand Identity (and brand positioning)
Brand Identity = it’s how the company wants to be perceived by the consumers (the company’s side of the story),
directing various strategies (e.g., developing its brand positioning, personality and design) to make the brand
identify itself uniquely in the crowd of competitors
Brand positioning = the act of designing the company’s offer and identify so that it occupies a distinct and valued
place in the target customer’s mind (often determined from a brand audit)
Key issues:
• Brand values and heritage
• Competitive frame of reference
• Points of parity and points of difference
• Brand positioning statement
• etc.
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