MANAGING BRAND EQUITY-2

Why is managing brand equity important over time?

Changing marketing environment (external forces)

Shifts in consumer behaviour

Competitive strategies
Govt. regulations

Internal forces
Changes in strategic focus of the company.

STEPS FOR MANAGING BRANDS OVER TIME

a. Reinforcing brands
b. Revitalising brands c. Adjusting brand portfolio

REINFORCING BRANDS

Reinforcing brands
Brand equity is reinforced by marketing actions that consistently convey the MEANING of the brand to consumers in terms of BRAND AWARENESS and BRAND IMAGE. Reinforced marketing actions, along with product development, branding strategies etc. also help in keeping the brand meaning in terms of products, benefits and needs as well as in terms of product differentiation intact.

Reinforcing depends on nature of the brand associations

Product related performance associations Product innovations are critical. Slide 72 Change in product may not be drastic, as brand meaning may be associated with the product characteristics. Slide 73 Non-product related imagery associations Relevance in user and usage imagery is critical. Slide 73 Potentially easier to change through major advertising campaigns (no product innovation may be involved). Slide 74 Too frequent repositioning can blur the image of the brand and confuse or even alienate the consumers.

Reinforcing of brands can be through

1. Maintaining brand consistency
2. Protecting sources of brand equity 3. Fortifying or Leveraging

4. Fine-tuning the marketing support program.

1. Maintaining brand consistency

Consistency of marketing support is essential for maintaining strength and favorability of the brand. Shrinking R&D and communication budgets may risk the brand becoming out-of-date, irrelevant or even forgotten. Consistency to be shown in brand positioning. Consistency doesnt mean no changes at all.
Tactics may change, but strategic positioning of brand should not change. Prices may go up or down, product features may be added or deleted, brand extensions added or withdrawn, ad campaigns may change . Key elements of the marketing program and brand meaning should be retained and preserved

2. Protecting sources of brand equity

While looking at potentially powerful sources of brand equity, preserve and defend the existing sources. Unless there is some change with either consumers, competitors or the company that makes the strategic positioning of the brand less powerful, successful positioning should not be deviated from. Key brand associations should not be altered. E.g. Maggis new introductions.

3. Fortifying versus Leveraging

There is always a trade off between fortifying a brand and leveraging the benefits of the brand to financial gains. Fortifying means ways of increasing brand equity and furthering the brand image through continuous marketing and advertising efforts.

On the other hand, capitalizing on existing brand equity to reap accruing benefits in terms of cost savings (reduced communication expenditure) and revenue opportunities (seeking increasingly higher premium and introducing brand extensions.)

REVITALISING BRANDS

Increase quantity of Consumption

Expand depth/breadth of awareness and usage of Brand

Refresh old sources of BE BRAND REVITALISING STRATEGIS Create new sources of BE Improve strength, favorability, and uniqueness of Brand Associations Bolster fading associations Neutralize negative Increase frequency of Consumption

New opportunities New and different ways of use

Retain vulnerable Customers Recapture lost Customers Identify neglected segments

Create new associations

Attract new Customers

Reverse Fortunes of Brands

Recapture lost sources of Equity

Identify and establish new sources of Brand Equity

Steps to Reverse Fortunes of Brand

Revolutionaryor Evolutionarychanges? Revisit the basic values of the brands Determine current status of sources of Brand Equity Ascertain effectiveness of key brand associations Decisions on repositioning

Repositioning(RI) Marketing Program (B2B)

Back 2 Basics Continuum

Reinvention

Marketing Program Failures Insufficient Consumers Less Damaging Enforce positive Associations

Positioning Failures Sufficient but dissatisfied Consumers Extremely damaging Difficult to overcome negative associations

Approaches to Revitalisation
1. Expanding Brand Awareness

2. Improving Brand Image

3. Entering New Markets

1. Expanding Brand Awareness

Expand Breadth Increased Usage Quantity Difficult to change Function of particular beliefs Exception Impulse Consumption (availability) Frequency New opportunities New Ways

1a. New usage Opportunities

Appropriateness & Advantages of using brands in new situations Reminders to use brands in those situations Improving Top of the mind awareness. Functional Fixedness avoidance in non traditional situations Associated with special occasions only.

1a. New usage opportunities contd

Retain premium brand association Consumer perception of usage differs from the reality of their usage.

Event
Replacement cycles

Performance
Consumers educated about the merits of regular and increased usage.

1b. Identifying new & completely different ways to use the brand

New and different usage application Only new ad campaigns not enough New uses may arise from new packaging Egs Milkmaid, Amul Cheese, McDonalds

Repositioning

2. Improving Brand Image

Changes in Brand Awareness not sufficient A new Marketing Program Old positive associations to bolstered New positive associations to be created Negative associations to be neutralized
Changing Brand Elements

Repositioning
Repositioning

Establishing more compelling points of difference Remind consumers of virtues of brands that have been taken for granted Nostalgia and heritage Establish a point of parity on key image dimension Negative product-related associations due to changes in consumer tastes

Changing brand elements

Modification of Brand name Other Brand Elements Packaging, logos etc. Moderate and evolutionary in nature Preserve salient aspects of Brand elements E.g.: Adidas, Federal Express, GE

3. Entering New Markets

Reach out to new Customer groups
Johnson and Johnson: Baby Soap, Baby Shampoo

Reach out to decision making segment instead of the users

Women as decision makers for mens products Tapping the female segment of the market

New market segments based on cultural dimensions Retaining existing Customers and Regaining Lost Customers

ADJUSTMENTS TO BRAND PORTFOLIO

Approaches adjustment to brand portfolio

1. Migration Strategy

2. Acquiring new customers

3. Retiring Brands

1. Migration Strategy
Entry-Level Brands Critical in bringing new customers Logical ordering Hierarchical structure in consumers mind. E.g. BMW with 3,5,7 Series

2. Acquiring New Customers

To make up for loss of existing customers Important to attract younger customers Challenge Making Brand seem relevant to customers Each generation has a different attitude from its preceding generation Strategies to encompass both new and old customers

a. Multiple Marketing Program

Separate advertising campaigns and communication programs for each segment Blurring of images due to media overlap

b. Brand Extensions and SubBranding

New technology, features and attributes Needs of new customers or changing needs of existing customers Making products more available

c. New Distribution Outlets

3. Retiring Brands
Options 1. Marketing Support (Orphan Brand)
Reduce no. of product types Almost no advertising and promotional expenditure

2.

Consolidation
Stronger Brand HLL POWER BRANDS Cut Costs Focus marketing Efforts

3.

Discontinue product
Spin off Orphan Brands after a cut off of low sales Sell Orphan Brands Fade away or discontinue consciously. E.g. - Citra

Abandonment Decisions for Retiring Brands

Markets prospects
Rate and type of decline Segments of enduring demand Reasons for decline

Competitive intensity
CA of Competitors Willingness to exit Brand Loyalty of Customers and Price pressures

Brand Strength
Strong Associations Market share and position in the market CA w.r.t. key Segments Brands fit in the Strategic Thrust Exit Barriers

MANAGING BRANDS OVER GEOGRAPHIC BOUNDARIES AND MARKET SEGMENTS

Rationale For Going Abroad

1. Slow growth and increased competition in domestic markets 2. Overseas growth and profit 3. Economies of scale 4. Diversify risk 5. Global mobility of customers

Advantages Of Global Marketing

Economies of Scale Lower Marketing Costs Power and Scope Consistency in Brand Image Leverage good ideas quickly and efficiently Uniform marketing practices

Disadvantages
Differences in consumer needs, wants and usage patterns Differences in consumer response to 4 Ps Differences in brand and product development and competitive environment Differences in legal environment Differences in marketing institutions Differences in administrative procedures

Global Branding Decisions

1. 2. 3. 4. Deciding which markets to enter Deciding how to enter the market Deciding on the marketing program Deciding on marketing organisation

Selecting Global Markets

Economic Environment Stage of development Standard of living Per capita income Distribution of wealth Currency stability Exchange rates Cultural Environment Language Lifestyle Values Norms and customs Ethics Taboos

International Marketing and Promotional Decisions

Demographic Environment Size of population Number of households Household size Age distribution Occupation distribution Education level Employment rate Income levels

Political/Legal Environment Government policies Laws and regulations Political stability Nationalism

Global Customer Based Brand Equity

Creating Brand Salience
Crafting Brand Image Eliciting Brand Response Cultivating resonance

Building Global Customer Based Brand Equity

1. Understand similarities and differences in the global branding landscapes 2. No shortcuts 3. Establish Marketing Infrastructure 4. Integrated Marketing Communication 5. Brand Partnership 6. Balance Standardization & Customization 7. Local and global control 8. Establish operable guidelines 9. Global BEMS 10. Brand Elements

1. Understand similarities and differences in the global branding landscapes

Developed & Developing Markets Landscape of Global Brands

2. Sustained activity in Brand Management

Continuous activities Greater focus on R&D Product Life Cycle critical to brands growth

3. Establish Marketing Infrastructure

Blend push and pull strategies to build brand equity Infrastructure constraints. Ex. Nestle in China

4. Integrated Marketing Communication

Establish awareness and key points of parity. Ex. Kelloggs Positioning same but creative strategies may differ. Ex. Dove Easily available media options: cable and satellite; niche magazines

5. Brand Partnership
Alternative ways of entry:
1. 2. 3. Exporting existing brands (geographic extension) Acquiring brands (Brand Acquisition) Brand alliance

Trade off between key criteria: speed, control and investment.

Heinekens Sequential Strategy

Export to build brand awareness License to local brewer to expand volume Take equity stake or forge a joint venture (piggyback sales of high priced Heineken brand with established local brand) Heinekens takeover of DB Breweries in New Zealand successful

6. Balance Standardization & Customization

Standardization versus Customization - Globally standardized items: advanced, functional, reliable and low priced. Ex.: McDonalds: Ronald McDonald appears worldwide but the food and marketing is localized. Standardization and Customization:

Standardized marketing:
LOreal: Because Im Worth It.

Customized marketing:

Tide in Russia positioned as economy brand. (Little specific knowledge in Russia)

Factors favoring standardization

1. 2. 3. 4. 5. 6. Common customer needs Global customers and channels Favorable trade policies and common regulations Compatible technical standards Transferable marketing skills Essential criteria for development of global brand: - positioning and branding applied globally - technology which can be applied globally - capabilities for local implementation Key considerations in implementation - market development and competitive environment at similar stages in both countries - consumer target markets should be alike

7.

Supporting Marketing Programs Product

Only certain products marketed similarly. Ex. Pampers disposable diapers Conduct research in local markets Product differences sometimes not justified. Ex. Palmolive soap Sell both global and local brands. Ex. Coke sells Thums-Up in India

Price
Consumer perceptions of value, willingness to pay, elasticity to price change Pressures for international price alignment: Gray imports Price Corridor takes in account differences in countries and alignment pressures

7. Local & Global Control

Decisions on Centralization or Decentralization Nature of products and its linkage to local culture Strategically easier to define but difficult to implement

8. Operable Guidelines
BRAND MANAGEMENT GUIDELINES

9. Global BEMS
Brand Asset Valuator

Interbrand Method

10. Brand Elements

Geographical Transferability: Verbal (name translation) vs. Non-Verbal (logo, color translation)
Ex.: Mars changed the name of its third largest UK brand Marathon to Snickers which was used in the rest of Europe

 Regional Market Segments

Brand Equity Across Other Market Segments

Ex. Campbell soups- Factors: splintering of mass markets, pockets of sales strengths, focused targeting.

Other Demographic And Cultural Segments (Differences in attitudes

and behavior)

THANK YOU

COURSE RECAP
3 QUIZZES: 20 7 CASES: 20 1 MIDTERM: 30 1 END TERM: 30

INTRODUCTION
BRAND, BRANDING, BRAND MANAGEMENT TYPES OF BRANDS NAMES HISTORICAL ORIGIN OF BRANDING BRAND EQUITY CUSTOMER BASED BRAND EQUITY

BUILDING BRAND EQUITY

CASES: LEVIS DOCKERS INTEL STARBUCKS

CUSTOMER BASED BRAND EQUITY

BRAND KNOWLEDGE DIFFERENTIAL EFFECT CUSTOMER RESPONSE TO MARKETING

BRAND KNOWLEDGE
BRAND AWARENESS
BRAND RECALL BRAND RECOGNITION

BRAND IMAGE
STRENGTH
RELEVANCE CONSISTENCY

FAVOURABILITY
DESIRABLE DELIVERABLE

UNIQUENESS
POD POP

DIFFERENTIAL EFFECT
PRIMARY BRAND ELEMENTS
BRAND ELEMENT CHOICE CRITERIA
MEMORABILITY MEANINGFULNESS TRANSFERABILITY ADAPTABILITY PROTECTABILITY

SECONDARY BRAND ASSOCIATION MARKETING PROGRAM TO SUPPORT ASSOCIATIONS

MEASURING BRAND EQUITY

CASES: CMPB B&J

BRAND VALUE CHAIN & BEMS

MARKETING PROGRAM INVESTMENT
PROGRAM QUALITY (MULTIPLIER)

CUSTOMER MINDSET
MARKET PLACE CONDITION (MULTIPLIER)

MARKETING ENVIRONMENT
INVESTOR SENTIMENT (MULTIPLIER)

STAKEHOLDERS

METHODS TO MEASURE
PRICE
PRICE PREMIUM PRICE PREMIUM AT EQUALISATION PRICE PREMIUM AT INDIFFERENCE

COST
HISTORICAL COST REPLACEMENT COST DCF METHOD BRAND CONTRIBUTION INTERBRAND METHOD MARKET VALUE METHOD

CUSTOMER
BRAND KNOWLEDGE BLIND TEST ATTRIBUTE BASED

MANAGING BRAND EQUITY

CASES: NIVEA NIKE

BRAND PRODUCT MATRIX

BRAND BREADTH STRATEGY BRAND DEPTH STRATEGY

BRAND HIERARCHY
CORPORATE FAMILY INDIVIDUAL MODIFIER

BRANDING STRATEGY
BRAND HIERARCHY SUB-BRANDING & BRAND EXTENSIONS DECISIONS GRAY & SMELTZER BRAND PRODUCT RELATIONSHIP PRINCIPLES OF BRANDING
SIMPLICITY RELEVANCE PROMINENCE DIFFERENTIATION COMMONALITY

MANAGING BRANDS OVER TIME

REINFORCING BRANDS
Maintaining brand consistency Protecting sources of brand equity Fortifying or Leveraging Fine-tuning the marketing support program. Expanding Brand Awareness Improving Brand Image Entering New Markets

REVITALISING BRANDS

ADJUSTING BRAND PORTFOLIO

Migration Strategy Acquiring new customers Retiring Brands

THANK YOU

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HLL POWER BRANDS

Surf Rin Wheel Vim Lux Pears Breeze Clinic Sunsilk Nihar Fair & Lovely Ponds Lakme Pepsodent Modern Knorr Kwality Walls Brooke Bond Taj Mahal A1 3 Roses

Lifebuoy
Liril Rexona

Closeup
Kissan Annapurna

Lipton Taaza
Bru Dalda
BACK Retiring Brands