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I.
Introduction
Brand
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Perceived risk
Brands
They are two types of risks. When you buy a certain brand, you buy a guarantee. Its not easy
to create brand.
Brand or not brand?
-
Consumers
Identification
Origin, traceability
Reduced risk
Guarantee
Constant quality
Value of sign/part of a community
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o Creation by innovations
o Rejuvenated by products, not by advertising
7. Addressing diversity
o Fragmentation of markets
o Many sub-segments
o Customization needed
8. Challenge of ethics
o New stakeholders: non-governmental organizations
o Pension funds interested
o Difficulty in the virtual world, info spread very fast
9. Brands do not belong to marketing anymore
o CEOs responsibility
o Need for continuity
o Need for brand management across business unit
The enlarged scope of brand management
1. From transactions to relationship
o Focus on keeping clients, on building long lasting relationship
o Relationship marketing: financially driven concept => banking world is an
example
o Long relationship with the consumer, loyalty group. Be close to ours
consumers
2. Bonding through aspirational values
o Aspirational brands. Concept of CEO Saatchi&Saatchi
o Non product related values of the brand
o You inspire your consumers
3. Importance of communities
o Before, consumers: individuals, eventually market segments
o Now, consumers belong to groups, tribes or communities
o Need to build brand communities
4. Activation the brand at contact
o Too much media fragmentation
o All brands must think of their activation plan
Acting within communities
Acting on premises, at the point of consumption
Acting with prescribers
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Brand legal definition: a sign or set of signs certifying the origin of a product or service and
differentiating it from the competition.
II.
What is brand equity? Is a new concept and you have different way to define this concept
Customer brand equity: from the consumer point of view
Financial brand equity: from the financial point of view
Customer brand equity (Keller)
= Differential effect that brand knowledge has on consumer response to the marketing of that
brand.
If the brand is much known, you have two different reactions:
1. Brand knowledge
Brand awareness:
- brand recognition
- Brand recall
Brand image:
- Brand benefits
- Brand attributes
2. Strong customer brand equity
-
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Brand loyalty :
a. Price premium
b. Satisfaction/loyalty
Brand awareness
c. Brand awareness
Brand associations
d. Perceived value
e. Brand personality
f. Organizational associations
Perceived quality
g. Perceived quality
h. Leadership
2. Keller (1992)
-
Indirect approach
o Brand awareness
o Brand image
Brand equity
Direct approach
o Mix marketing
Perceived quality
Brand image
Perceived value
Trust
Commitment
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Performance
Social image
Perceived value
Trust
Commitment
5. Thomas (1993)
Brand equity: leadership, brand awareness, satisfaction, brand loyalty, price premium, brand
extension, brand image
6. Landor Associates
Image Power:
Brand equity: Awareness and esteem
7. Feldwick (1996)
Sources of brand strengths:
-
Brand awareness
Brand image
Perceived quality
Perceived value
Brand personality
Organizational associations
Brand strength:
Leadership
Price premium
Brand loyalty
Market share and distribution
Brand value
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Brand positioning: The firm identifies the advantages or benefits that will differentiate the
brand versus other brand.
No integration of the personality
Brand identity: It gives information on what the brand is, its personality, its history, its values.
There are more intangible values integrated.
More complete concept. You give more
info about the brand.
Kapferers 6 Facets Brand identity prism
Send
Physiqu
e
Personalit
y
Relations
hip
Reflection
(prototypic
val buyers
Culture
(values)
Consum
Self-image
(of actual
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Physique: The key physical qualities, product and brand attributes that make the brand
recognizable
Example (Lacoste): shirt, croco, outstanding quality, comfortable
Personality: The way in which the brand speaks of its products. The kind of person it
would be if it were human
Example (Lacoste): optimistic, without excess, touch of class
Culture: a brand has its own set of values
Example (Lacoste): French elegance, individualist, aristocratic
Relationship: A brand is often at the crux of transactions and exchanges between
people.
Example (Lacoste): social conformity
Reflection: The desired image of the brand user, the consumers outward mirror
Example (Lacoste): neither hyper-masculine, neither hyper-feminine, trans-generation
Self-Image: The consumers internal mirror, how people see themselves when
consuming the brand.
Example (Lacoste): be a member of a chic club.
Brand essence
Brand essence is the summary of the brand positioning and/or identity
Example: in 1 or 2 words, try to define the brand essence
o Dove: feminity restored
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III.
Example: Netium used by a company of micro-computer (versus Pentium). Deep Valley for
clothes versus Sun Valley
o Testing the name
Can last several months and be very costly
Some companies are specialized (Nomen)
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Existing customers:
o Building volume per capita
o Building volume by addressing the barriers to consumption
o Growth through new uses and situations
IV.
Brand extensions:
= Transfer the name and the image of a brand to gain a competitive advantage in a new
category
-
Most firms exploit today brand extension: when they can to extend the brand they try
to do it.
Industrial and luxury brands have traditionally extended their brands (Siemens,
Philips, Accessories, jewelry and watch)
Systematically used by Japanese brands (Mitsubishi: shipyards, nuclear plants, cars,
high fidelity, banks)
Example of brand extension: - Virgin (in different categories), Mars (to ice-cream business),
Vitalinea (to biscuits and drinks), HP (to digital photo), Mercedes ( to vertically with class A),
Salomon (to surfboards).
Key reasons for brand extension
-
Example:
- Bic launched a perfume and it didnt not work
o Bic: practical, cheap, disposable
o Perfume: dream, feminity, pleasure
- Bic phone
- Pierre Cardin had dilute his brand image
- Fit: Evian : water and cream=> same benefit, Salomon: involved the brand => same
target group and same technology
Different classification of brand extension
1. Brand or line extension
Line extension: Launch of products under the same name in the same category
Brand extension: Launch of products under the same name in other category
2. Horizontal or vertical extension
Horizontal: we keep the same price bracket
Vertical: upward or downward extension
Specifities of vertical brand extensions:
-
New research
An extension is considered acceptable if it fits the idea that consumers have of the parent
brand:
- High perceived similarity with the parent brand
- High coherence between the extension and the brand concept
Key to successful brand extension
-
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V.
Find the right name for the different products that you have in your portfolio.
Key questions
- What is the branding strategy?
- What brand name and symbols should we give to different products (corporate name,
product name??)
- How many levels of branding do we need to give?
Brand architecture
-
Degree of visibility
What is the degree of visibility of different brand name?
- Corporate name? (Samsung, Sony, Toshiba)
- Business units?
- Divisions? (Accor travels, Accor Hotels, Accor casinos)
- Product lines? (Laguna or Vel Satis by Renault)
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Risks
Brand dilution
Does not allow different identities when
targeting different segments
Risk of endangering the whole portfolio
2. Endorsed brand
Examples: Lycra only by DuPont, Nesquik by Nestl, Novotel Accor hotels, KitKat by Nestl,
Hello by LU, Polo Ralph Laurens, Fjord by Danone
= Brands are still independent but they are endorsed by another brand (usually a corporate
brand = an umbrella brand)
Advantages
Create credibility
Benefits from the awareness and image
of the mother brand
Endorsed brand keeps its identity
Risks
Might dilute the mother brand in case of
problem
Might dilute the identity of each separate
brand
3. Sub-brands
Examples: Microsoft Office, Gillette Fusion, Gillette Mach3
= Brands connected to a master brand or parent brand that augment or modify the associations
of that master brand
The link between the sub-brand and the master brand is stronger than for the endorsed brand
Advantages
Use of awareness
Use of the existing image
Less costly
Risks
Can affect the associations of the master
brand
Less freedom to create distinct brand
image
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4. House of brands
Examples: Volkswagen Group: VW, Bentley, Audi, Skoda, Seat, Bugatti, and Lamborghini.
P&G, Unilever
= A group of brands that have no link one with each other. They are all independent from the
corporate brand
Advantages
Risks
Each brand can maximize its impact on
More costly to support
the market
No synergies between markets
Selection of the ideal brand name
Selection of the ideal positioning for
each brand
Ability to cover different segments
No channel conflict
Signal of real breakthrough innovation
Brand relationship analysis
Branded house
Does the master brand provides:
Associations enhancing the value
proposition
Credibility with organizational
associations
Communication efficiencies
House of brand
Is there a need for a separate brands:
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VI.
Power of consumers
More brands should mean more value for the clients rather than costs for the company
Link portfolio to segmentation to better meet demand of segmented markets
Linking the portfolio to segmentation
The organization of the brand portfolio reflects the type of market segmentation chose by the
firm.
1. Socio-demographic segmentation
Kinder have develop his portfolio based on the age of consumers (kinder eggs
to snack for teenagers)
2. Benefit segmentation
Evian, Volvic, Taillefine, Tallans, source water
3. Channel segmentation
Mass channels
LOral, Garnier, Maybelline
Pharmacies
La Roche-Posay, Vichy
Professional brands
LOral professionnel, Redken, Matrix, Kerastase
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VII.
Its not easy to name change. Risk changing the name? When you change the name what do
you have to do?
Check the attachment of the consumer to the name, make sure that the associations
that you have move with the new name.
Quite risky
Sometimes, we will change the name and we wont to move the associations, why?
When there is a problem, a scandal (ex: BP).
Its cost a lot of money to change the name. Be pretty sure thats necessary. Need to
create the awareness, the brand image.
Names changes and brans transfers
Ex: Yves Saint Laurent wanted to launch a perfume named "Champagne". But it was forced
to change name because the naming "champagne" is controlled and protected. He thus named
perfume "ivresse".
Advantage of brand transfers
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Objectives of the name change: increase the market share, established a global
brand, economies of scale
Raider was very strong in Europe (n2)
Plan was: On the pack, one year before: Globally known as Twix. Six month
after: The new name of Raider.
Key of success: Quick change, Key event out of this, Strong promotional
advertising. All the company has concentrated his effort to make the change a
success.
Keys learning of this success: No other marketing mix changes, Rapidity, focus
on sales forces, Focus on media. The total company has behind. Inform the
consumers.
No market research
Lack of originality
Traditions
Complexity
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VIII.
Revitalization of brands
1. Factors of brands decline
Internal disinterest
Missing of new trends
Mono-product
Poor clients follow up
Neglect the quality of the product
Decline of the distribution network
Excess of daughter brands
2. Way to revitalize
Even if a brand is eliminated in the market, many years after, the consumers think that brand
is still in the market. The brand is an asset even if its eliminated. You can re-launch brand
many years after and have a great success.
Ex: Le coq sportif
3. Strategies of revitalization
Innovation
New business model
Change of target
Change of distribution network
Focus on new opinion leaders
New communication
Brands remain in the mind of consumers. The challenge is to identify them and to re-launch
them. There is certain nostalgia among consumers.
IX.
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Type of brands:
Local brands
International and global brands
o Different options:
Brand name
Positioning
Product
4
Yes
No
No
Persil
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No
Yes
Yes
Unilver
ice
cream
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No
No
Yes
Tide
and
Ariel
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No
Yes
No
Unilever
margarine
8
No
No
No
Ricor
X.
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XI.
Be able to evaluate the brand if you want to sell the brand or have some licensees.
How could you evaluate the financial value of a brand?
o Market survey to see brand preference
o Higher price you accept
o Customers base
o Global brand or not?
o Brand awareness
Financial value of brands
Brand value is not included in balance sheets
Ni inclusion of these intangible assets
The value of brands is different depending on the objectives to achieve
o Value of liquidity in case of a forced sale
o Book value for company account
o Value in case of licenses etc.
Interbands method for valuing the best global brands
Criteria for consideration:
Evaluation of current and future revenue specifically attributable to the branded products
Branded operating profit = revenue- operating costs
Economic earnings = branded operating profit charge for capital employed
b. Second step: Role of brand analysis
A measure of how the brand influences customer demand at the point of purchase
Industry benchmark analysis derived from Interbrands database
c. Thirst step: Brand strength
A benchmark of the brands ability to secure ongoing customer demand (loyalty, repurchase,
retention)
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Comparison between the brand and common factors of brand strength: market position,
customer franchise, image and support
Brand valuation methods
All the costs needed to build the brands (development, marketing, advertising, )
Valuation by royalties
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