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Strategic Brand Management by Keller summary
- Instelling
- Haagse Hogeschool (HHS)
ISBN: 978-0-13--7 by Kevin Lane Keller
[Meer zien]Voorbeeld 4 van de 47 pagina's
Voorbeeld 4 van de 47 pagina's
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Keller - strategic brand management summaryChapter 1. Brands and brand management
Learning objectives:
1. Define “brand,” state how brand differs from a product, and explain what brand equity is.
2. Summarize why brands are important.
3. Explain how branding applies to virtually everything.
4. Describe the main branding challenges and opportunities.
5. Identify the steps in the strategic brand management process.
What is a brand?
A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one
seller/group of sellers and to differentiate them from those of competition.
Brand elements
It is important to choose a name, logo, symbol, package design or another characteristic that identifies a product and
distinguishes it from others. These differentiating components are brand elements.
Brands versus products
A product is anything we can offer to a market for attention, acquisition, use, or consumption that might satisfy a want or
need. We can define 5 levels of meaning for a product:
1. Core benefit: the fundamental need or want that consumers satisfy by consuming the product.
2. Generic product level: a basic version of the product containing only those attributes absolutely necessary for its
functioning with no distinguishing features.
3. Expected product level: set of attributes that buyers normally expect when they agree to purchase.
4. Augmented product level: includes distinguishing attributes
5. Potential product level: includes all augmentations/transformations that a product might ultimately undergo in the
future.
A brand is more than a product, because it can have dimensions that differentiate it in some way from other products
designed to satisfy the same need. These differences can be rational or tangible (related to product performance of the brand)
or more symbolic, emotional and intangible (related to what the brand represents).
Strong brands carry a number of different types of associations. By creating perceived differences among products through
branding and by developing a loyal customer franchise, marketers create value that can translate to financial profits for the
firm.
Why do brands matter?
Consumers
Brands identify the source or maker of a product and allow consumers to assign responsibility to a particular manufacturer or
distributor. Past experiences and marketing programs help consumers find out which brands satisfy their needs and which
don’t. If consumers recognize a brand or have knowledge about it, they do not have to engage in a lot of additional thought or
processing of info to make a product decision. Brands thus allow consumers to lower the search costs for products both
internally (having to think about it) and externally (having to search).
Brands can play a significant role in signaling certain product characteristics to consumers. Products have been divided into 3
major categories:
1. Search goods: consumers can evaluate product attributes like size, color, design by visual inspection.
2. Experience goods: consumers cannot assess product attributes like durability by inspection and actual product trial
and experience is necessary.
3. Credence goods: consumers may rarely learn product attributes (insurance company)
Brands can reduce the risks in product decisions. Consumers may perceive risks in buying a product:
1. Functional risk: product does not perform up to expectations
2. Physical risk: product poses a threat to physical well-being or health
3. Financial risk: product is not worth the price
4. Psychological risk: product affects the mental well-being
5. Time risk: failure of the product results in opportunity cost of finding another product
Firms
Fundamentally, brands serve an identification purpose, to simplify product handling or tracing. Operationally, brands help to
organize inventory and accounting records. A brand also offers the firm legal protection for unique features or aspects of the
product. Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again. This brand
loyalty provides predictability and security of demand for the firm and creates barriers of entry that make it difficult for other
firms to enter the market. To firms, brands represent valuable pieces of legal property, capable of influencing consumer
behavior, being bought and sold, and providing the security of sustained future revenues.
,Keller - strategic brand management summary
Can anything be branded?
A brand is something that resides in the minds of consumers. To brand a product, marketers must give consumers a label for
the product (how to identify it) and provide meaning for the brand (what it does for you and why it is special). Branding
creates mental structures and helps consumers organize their knowledge about products in a way that clarifies their decision
making and provides value to the firm. The key in branding is that consumers perceive differences among brands in a product
category. Accordingly, marketers can benefit from branding whenever consumers are in a choice situation.
Physical goods
1. B2B products: B2B branding creates a positive image and reputation for the company as a whole. Creating
goodwill with business customers is thought to lead to greater selling opportunities and more profitable
relationships. A strong brand can provide valuable reassurance and clarity to business customers who may be
putting their company’s fate on the line. Strong B2B can thus provide great competitive advantage.
2. High-tech products: these firms often lack any kind of band strategy and sometimes see branding simply as naming
their products. In many of their markets, however, financial success is no longer driven by product innovation
alone. Marketing skills are playing an important role in the adoption and success of high-tech products. The speed
and brevity of technology product life cycles create unique branding challenges. Trust is essential and customers
often buy into companies as much as products.
Services
1. Role of branding: brands can help identify and provide meaning to the different services provided by a firm.
Branding a service can be an effective way to signal to consumers that the firm has designed a particular service
offering that is special. It is a competitive weapon.
2. Professional services: corporate credibility is key in terms of expertise, trustworthiness, and likability. Variability is
more of an issue with professional services because it is harder to standardize the services of a consulting firm than
those of a typical consumer services firm. Long-term relationships are crucial. One big difference in professional
services is that individual employees have a lot more than their own equity in the firm and are often brands
themselves. The challenge is thus to ensure that their words and actions help build the corporate brand and not just
their own.
Retailers and distributors
Brands can generate consumer interest, patronage, and loyalty in a store, as consumers learn to expect certain brands and
products. Brands help retailers create an image and establishing positioning. Retailers can also create their own brand image
by attaching unique associations to the quality of their service/product assortment/pricing. The appeal and attraction of brands
can yield higher price margins, increased sales volumes, and greater profits.
Retailers can introduce their own brands by using their store name, creating new names, or combining them. products bearing
these store brands or private label brands offer another way for retailers to increase customer loyalty and generate higher
margins and profits.
Online products and services
Some of the strongest brands in recent years have been born online. Online marketers now realize the realities of brand
building. It is critical to create unique aspects of the brand on some dimension that is important for consumers. The brand
also needs to perform satisfactorily in areas such as customer service and credibility.
People and organizations
When the product is people or organizations, the naming aspect is generally straightforward. These often have well-defined
images that are easily understood and liked (or disliked) by others.
Sports, arts, and entertainment
Sports marketing has become highly sophisticated in recent years, employing traditional packaged-goods techniques. Many
sports teams are marketing themselves through a combination of advertising, promotions, sponsorship etc. Branding plays a
valuable function in the arts and entertainment industries that bring movies, television, music and books. These offers are
good examples of experience goods.
A strong brand is valuable in the entertainment industry because of the fervent feelings that names generate as a result of
pleasurable past experiences.
Geographic locations
Cities, states, regions and countries are being promoted. These campaigns aim to create awareness and favorable image of a
location that will entice temporary visits or permanent moves from individuals and businesses.
Ideas and causes
Ideas have been branded. They may be captured in a phrase or slogan, and even be represented by symbols. By making ideas
and causes more visible and concrete, branding can provide more value.
,Keller - strategic brand management summary
What are the strongest brands?
Tellis and Golder identify 5 factors and rationale as keys to enduring brand leadership:
1. Vision of the mass market: companies with a keen eye for mass market tastes are more likely to build a broad and
sustainable customer base.
2. Managerial persistence: the breakthrough that can drive market leadership often requires the commitment of
company resources over long periods of time.
3. Financial commitment: the cost of maintaining leadership is high because of the demands for R&D and
marketing. Companies that aim for short-term profitability rather than long-term leadership are unlikely to enjoy
enduring leadership.
4. Relentless innovation: due to changes in consumer tastes and competition, companies must continually innovate.
5. Asset leverage: companies can become leaders in some categories if they hold a leadership position in a related
company.
Branding challenges and opportunities
Savvy customers: Consumers and businesses have become more experienced with marketing, more
knowledgeable and more demanding. One of the key challenges is the vast number of sources of info consumers
may consult. It is more difficult to persuade consumers with traditional communications than it used to be.
Economic downturns
Brand proliferation: the proliferation of new brands and products, spurred by the rise in line and brand
extensions. A brand name may now be identified with a number of different products with varying degrees of
similarity.
Media transformation: the percentage of the communication budget devoted to advertising has shrunk over the
years. Marketers are now spending more on nontraditional forms of communication and on new and emerging
forms of communication such as interactive digital media, sports and event sponsorship etc.
Increased competition: on the supply-side, new competitors have emerged due to a number of factors such as:
o Globalization
o Low-prized competitors
o Brand extensions
o Deregulation
Increased costs: the cost of introducing a new product or supporting an existing product has increased, making it
difficult to match the investment and level of support that brands were able to previously.
Greater accountability: marketers find themselves responsible for meeting ambitious short-term profit targets
because of financial market pressures and senior management imperatives. As a result, marketing managers may
find themselves in a dilemma to make decisions with short-term benefits but long-term costs.
The brand equity concept
Brand equity explains why different outcomes result from the marketing of a branded product or service than if it were not
branded. Branding is all about creating differences. The basic principles of branding/band equity are:
Differences in outcomes arise from the added value endowed to a product as a result of past marketing activity
from the brand
This value can be created for a brand in many ways
Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a
brand
There are many different ways in which the value for a brand can be manifested or exploited to benefit the firm (in
terms of greater proceeds or lower costs or both).
Strategic brand management process
Strategic brand management involves the design and implementation of marketing programs and activities to build, measure,
and manage brand equity. We define the strategic brand management process as having 4 steps:
1. Identify and developing brand plans: the strategic brand management process starts with understanding what the
brand is to represent and how it should be positioned with respect to competitors. Brand planning uses these 3
interlocking models:
a. Brand positioning model: describes how to guide integrated marketing to maximize competitive
advantages
b. Brand resonance model: describes how to create intense, activity loyalty relationships with customers
c. Brand value chain: a means to trace the value creation process for brands to better understand the
financial impact of brand marketing expenditures and investments
2. Designing and implementing brand marketing programs: building brand equity requires properly positioning
the brand in the minds of customer and achieving as much brand resonance as possible. This knowledge building
process will depend on 3 factors:
, Keller - strategic brand management summary
a. Choosing brand elements: the best test of the brand-building contribution of a brand element is what
consumers would think about the product if they only knew its brand name or associated logo/another
element. Because different brand elements have different advantages, marketing managers often use a
subset of all the possible brand elements or all of them.
b. Integrating the brand into marketing activities and the supporting marketing program: the biggest
contribution comes from marketing activities related to the brand.
c. Leveraging secondary associations: brand associations may themselves be linked to other entities that
have their own associations, creating these secondary associations. Because the brand becomes identified
with another entity, even though this entity may not directly relate to the product or service performance,
consumers may infer that the brand shares associations with that entity, thus producing indirect or
secondary associations for the brand. In essence the marketer is borrowing or leveraging some other
associations for the brand to create some associations of the brand’s own and thus help build its brand
equity.
3. Measuring and interpreting brand performance: managers must successfully design and implement a brand
equity measurement system. This is a set of research procedures designed to provide timely, accurate, and
actionable information for marketers so that they can make the best possible tactical decisions in the short run and
the best strategic decisions in the long run. Implementing such a system involves 3 steps:
a. A task of determining or evaluating a brand’s positioning often benefits from a brand audit. This is a
comprehensive examination of a brand to assess its health, uncover its sources of equity, and suggest
ways to improve and leverage that equity. A brand audit requires understanding sources of brand equity
from the perspective of both the firm and consumer.
b. Now marketers are ready to put into place the actual marketing program to create, strengthen, or maintain
brand associations. Brand tracking studies collect information from consumers on a routine basis over
time – typically through quantitative measures of brand performance.
c. A brand equity management system is a set of organizational processes designed to improve the
understanding and use of the brand equity concept within a firm. 3 steps help implement a brand equity
management system: creating brand equity charters, assembling brand equity reports, and defining brand
equity responsibilities.
4. Growing and sustaining brand equity: brand equity management activities take a broader and more diverse
perspective of the brand’s equity.
a. Defining brand architecture: the firm’s brand architecture provides general guidelines about its
branding strategy and which brand elements to apply across all the different products sold by the firm.
Two key concepts in defining brand architecture are:
i. Brand portfolio: set of different brands that a firm offers for sale to buyers in a particular
category.
ii. Brand hierarchy: displays the number and nature of common and distinctive brand
components across the firm’s set of brands.
b. Managing brand equity over time: a long-term perspective of brand management recognizes that any
changes in the supporting marketing program for a brand may affect the success of future marketing
programs. A long-term view also produces proactive strategies designed to maintain and enhance
customer-based brand equity over time and reactive strategies to revitalize a brand that encounters some
difficulties or problems.
c. Managing brand equity over geographic boundaries, cultures and market segments: Important in
considering managing brand equity is recognizing and accounting for different types of consumers in
developing branding and marketing programs. International factors and global branding strategies are
very important in these decisions.
Chapter 2. Customer-based brand equity and brand positioning
Learning objectives
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