Why Brand Management is a core course in the MSc Marketing Management
- Understand
How Brand Management has evolved over time: the past, the present and the future
- Illustrate
What are the essential learnings in Brand Management and where to find them in the course
- Convince
Brand Management
The design and implementation of marketing programs and activities to build, measure and manage
brand equity
History
Brand
A name, term, sign, symbol, or 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
Present: Product vs. Brand
Product
Anything that can be offered to a market for attention, acquisition, use or consumption that might
satisfy a need or want (Kotler)
4 levels of a product (Levitt)
1. Core product
The fundamental need or want that consumers satisfy by consuming the product or service.
2. Tangible product
The physical product
3. Augmented product
The inclusion of additional features, benefits, attributes or related services that serve to differentiate the
product from its competitors.
4. Total product
The total product was Levitt’s vision of how intangible elements could be added to a physical product,
transforming it into an offering that was often more valuable than the physical attributes alone.
Brands have become increasingly important in modern day consumption. Intangible brands have become
the key source of corporate value. (If Coca-Cola sells al it’s tangibles it will not be half of their net worth
that is created by their brand)
Product
- Tangible: can be touched by customer
- Can be copied
- Can be outdated
- Involves transactions
Brand
- Intangible: lives in customer’s mind
, - Unique
- Potentially timeless
- Forms basis of connections
A brand can be seen as a product, but one that adds other dimensions that differentiate it in some
way from other products designed to satisfy the same need. The differences can be:
- Rational and tangible, symbolic, emotional and intangible
Present: Organization vs. Customer
Customer Value (Customer)
- Engagement
- Convenience
- Fitness for use
- Status
- Authenticity
The difference between what a customers has to give for a product and what he or she receives from
the product.
All benefits received minus cost, time and effort equals perceived customer value.
A value proposition is a promise of value to be delivered and acknowledged, and a belief from the
customer that value will be appealed and experienced.
A value proposition can apply to an entire organization, or parts thereof, customer accounts,
products/services or brands.
,Value proposition and Customer Value of AirBNB
Segway Example
This evolutionary/disruptive transportation device with serious “cool factor” never reached its
expected potential. What went wrong:
It’s value proposition didn’t resonate:
- Failure to properly segment the market: they targeted basically everyone
- The problem they were solving was vague: “need” was missing
- The product couldn’t change behavior: We are hooked on cars
- At $5,000 it may be priced too high for most
Present: Importance
Why are brands important for 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
Why are brands important for Producers?
- Means of identification to simplify handling or tracing
- Means of legally protecting unique features
- Signal of quality level (e.g., “made by)
- Means of endowing products with unique associations
- Source of competitive advantage (barriers of entry)
- Source of financial returns
, CBBE (Customer Based Brand Equity)
Differential effect that brand knowledge has on consumer response to the marketing of that brand
A brand has positive customer-based brand equity when customers react more favorably to a
product and the way it is marketed when the brand is identified than when it is not
Brand Management Goals:
- Consumer-based brand equity (CBBE)
o Build, sustain and leverage positive, strong, active, unique meanings of the brand …
- Financial-based brand equity (FBBE)
o to enable the brand to earn more in the short and long run
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 in their response.
The future: challenges and opportunities
Challenges
1. Savvy customers
o It’s difficult to persuade the more experienced consumers with traditional
communications
2. Brand proliferation
o More complex brand families and portfolios, lesser ‘mono’ product brands
3. Media fragmentation
o Firms spend more on nontraditional and new forms of communication
o Increase expenditures on promotion, decrease expenditures on advertising
4. Increased competition
o Mature markets
o More difficult to differentiate
o Low prized competitors (growth of private labels)
5. Greater accountability
o Increasing job turnover
o Short term performance orientation
The process
Business Value Chain
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