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Brand Management

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Brand Management (MKT624)
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Lesson 27
BRAND ARCHITECTURE
Introduction
We have seen that all brands regardless of what circumstances gave them birth appear as
independent brands and play a significant role through their existence. We have also seen that
circumstances can lead to creation of a stand-alone brand, a line extension, or a diversification.
Corporate strategies also lead to a collection of different brands that are managed as a portfolio
or a set of portfolios in case of large corporations.
What can be concluded from our discussions so far is that brands belonging to one business do
not work in isolation of each other for the reason that one set of circumstances give rise to the
existence of another brand ­ whether extension or stand-alone under a different name.
Such developments are not without links and hence drawing a hard and fast line between and
among the boundaries of various brands is difficult. Their relationships go across each other's
boundaries and make those brands appear in hybrid forms, at times. If a brand is an extension,
it could well be part of a portfolio of a few other brands that may be a mixed bag of stand-
alones and extensions of some mother brand. The stand-alone(s) could be an acquired brand
making a good combination with other stand-alones or extensions introduced by the company
at different occasions for different segments. How do you manage such apparent complexity?
The lecture attempts to answer that.
Brand architecture
To understand brand architecture, we must know that there is a close relationship between
brands and products; brands distinguish one product from the other and they also indicate
products' origin. Given that, there has to be a system followed by different companies to name
and then organize their products as brands in production and marketing terms. The system must
also make it easy for the customers to understand those products in terms of buying different
brands. Such a system is driven by the branding policies a company follows and is known as
brand architecture.
Branding strategies
This system of naming brands and organizing them in marketing terms can be understood by
looking into how different companies develop brand-product relationship by offering every
brand a separate role. A study has revealed six different strategies followed by companies1. All
the strategies facilitate branding distinctions or serve as indicators of products' origin.
1. The product brand strategy ­ PBS
It involves one particular name assigned to one particular product. This name reflects
just one positioning and hence is restricted to that positioning. In other words, for each
new positioning there is a new brand name and hence different names correspond to
different positions.
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Brand Management (MKT624)
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Figure 32
P&G has adopted this as
The Product-Brand Strategy
brand
management
philosophy. In almost all
fields they are a part of,
they have different brands
Brand A
Brand B
Brand C
for different positions ­
detergents and soaps. Each
of  the  products  has  a
precise
and
exclusive
position to itself.
As an example, one soap
Product A
Product B
Product C
could be for skin enhancing
properties,  another  for
energy, another for family
use, and yet another as a
medicated one.
As  another  example,  a
Positioning A
Positioning B
Positioning C
detergent
could
be
positioned as the best for
taking the stains out, the
Source: Strategic Brand Management by Jean-Noel Kapferer
other for overall neatness,
and yet another as the best value for money etc. Each brand has an identity of its own
and hence a complete chain of application of all marketing practices. The
accompanying figure graphically explains the concept.
The benefits are:
·  Resourceful companies opt for this strategy; they like to create that multiplication-
of-supplier-effect to energize the category with multiple brand entries. It is the
collective effort on part of all players to do their bit in talking about points of
difference, educate the customer and as an aggregate effect bring the category to full
bloom, you will recall from discussion on multi brands.
·  One big manufacturer like (P&G) likes to occupy and dominate all the functional
segments of the category, and by meeting different needs it consolidates its market
share.
·  Different products help customers identify those differences better than extensions
that have external similarities. It is because of these factors that one starts
appreciating how the differences among various offerings of detergents are
optimized through their precise positioning that define ­ stain removing properties,
a neat wash, or something that's ideal for hand wash etc.
·  The product brand strategy is good for companies that enter a segment to preempt a
position and then acquire the role of the market leader. The name of the company
may not be highlighted with the result that each brand is independent of each other
and the failure of one does not really affect the other.
Drawbacks of the product brand strategy
·  Each brand launch is a new launch. It is expensive considering the costs of
communication in different sectors of company's choice.
·  Retailers are skeptical of new product's chances of success and hence resist
stocking.
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Brand Management (MKT624)
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·
Multiplication of product brands in narrowly defined segments demands quick
return on investment. It is possible only in new and emerging markets in which
even smaller volumes can bring about high returns due to premium pricing.
·
Unlike extensions, a new brand cannot benefit from the success of another one
within the portfolio.
·
Distributors give the brand hardly any patronage despite company having a high
level of awareness and reputation.
2. The line brand strategy ­ LBS
This strategy deals basically with
extensions. Meaningful success of a
Line Brand Strategy
brand can motivate a company into
extending the line. The advantages
are known to you. This sets the
stage for finding meaningful "fits"
Figure 33
and "complimentary" products. The
objective  is  to  offer  coherent
Lipstick
products under the same brand
name.
Upon success of a brand of lipstick,
Mascara
the manufacturer should get into
complementing products that may
have an emotional appeal across the
Cleansing Cream
same clientele. It, in other words,
exploits the success of the concept
by  extending  the  brand  while
staying very close to the central
theme.
The benefits are:
·  The eventual extension involves only marginal costs linked to distribution and
packaging etc.
·  It reinforces the selling
power of the brand and
the image.
·  It  leads  to  ease  of
distribution.
·  It reduces launch costs.
The drawback is:
·  That you have to stay
very close to the existing
product.
3. Range brand strategy
Figure 34
This strategy offers one brand
name through a single promise
for  a  range  of  products
belonging to the same area of
competence. Range brands are
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common among food items ­ soups, sauces etc., and luggage industry; suitcases, brief
cases, and attaches.
Communication takes place in one name for promotion to all the product subjects.
Brand, in other words, communicates in a generic manner by developing a unique
concept.
4. The umbrella brand strategy
When the same brand supports several products in different markets, it is known as the
umbrella brand.
Umbrella Brand Strategy
Yamaha in bikes, pianos, and
guitars; Philips in electrical
Figure 35
Umbrella
bulbs and lighting, electric
Brand
shavers,
and
televisions;
Mitsubishi  in  banks,  ship
building, cars, and foods etc
are all examples of umbrellas.
The main benefits are:
Concept A
Concept B
Concept C
Concept D
·  One can capitalize on
the strength of one
product and gain the
benefit
of
scale
Product A
Product B
Product C
Product D
economies  in  other
markets.
·  The
almost
instantaneous goodwill
can be generated only if
Specific
Specific
Specific
Specific
communications
communications
communications
communications
the brand is well known
by product
by product
by product
by product
and
enjoys
great
Market A
Market B
Market C
Market D
reputation  like  the
brands mentioned above.
·  Firms of great reputation can save a lot of money on communications if they
enter markets where they were not present before.
·  In present day's over-communicated era, this is a tremendous advantage given
the fact that the cost of achieving awareness is out of reach of so many
companies.
·  Umbrella brand strategy allows the core brand to gain strength from the
associations in the areas it was not present before. Umbrella attracts new entries
for the image capital, but in the process gets more strength from the new entries
and reinforces the image capital
The drawbacks are:
·  The main constraint toward creating the umbrella is the fact that each division
has to come up against a specialist brand in its segment convincing the
customers that they not only match, but excel in quality. In most of the cases, it
is not evident except the Japanese companies! Toshiba in different segments!
From computers to TVs to musical instruments to kitchen appliances and more
areas are rightly perceived as Toshiba's strength.
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·
They have to prove the relevance of each product they produce (Toshiba's
example) otherwise it becomes difficult to become a dominant force. It is
because of this quality factor that only companies with good reputation can be
successful in creating such a strategy. Mere awareness doesn't work.
Since umbrella strategy is a stretch into categories not charted and navigated before,
there should be a limit to the temptation. It is like stretching a rubber band; beyond a
certain point it breaks. It is called the rubber effect2. The more categories a brand
covers, the more it weakens like a rubber and hence loses its force.
Bibliography:
1. Jean-Noel Kapferer: "Strategic Brand Management ­ Creating and Sustaining Brand
Equity Long Term"; Kogan Page (188)
2. Jean-Noel Kapferer: "Strategic Brand Management ­ Creating and Sustaining Brand
Equity Long Term"; Kogan Page (199)
Suggested readings:
1. Jean-Noel Kapferer: "Strategic Brand Management ­ Creating and Sustaining Brand
Equity Long Term"; Kogan Page (187-210)
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Table of Contents:
  1. UNDERSTANDING BRANDS – INTRODUCTION:Functions of Brand Management, Sales forecast, Brand plan
  2. INTRODUCTION:Brand Value and Power, Generate Profits and Build Brand Equity
  3. BRAND MANIFESTATIONS/ FUNDAMENTALS:Brand identity, Communication, Differentiation
  4. BRAND MANIFESTATIONS/ FUNDAMENTALS:Layers/levels of brands, Commitment of top management
  5. BRAND CHALLENGES:Consumer Revolt, Media Cost and Fragmentation, Vision
  6. STRATEGIC BRAND MANAGEMENT:Setting Objectives, Crafting a Strategy, The Brand Mission
  7. BRAND VISION:Consensus among management, Vision Statement of a Fast Food Company, Glossary of terms
  8. BUILDING BRAND VISION:Seek senior management’s input, Determine the financial contribution gap
  9. BUILDING BRAND VISION:Collect industry data and create a brand vision starter, BRAND PICTURE,
  10. BRAND PICTURE:Brand Value Pyramid, Importance of being at pinnacle, From pinnacle to bottom
  11. BRAND PERSONA:Need-based segmentation research, Personality traits through research
  12. BRAND CONTRACT:The need to stay contemporary, Summary
  13. BRAND CONTRACT:How to create a brand contract?, Brand contract principles, Understand customers’ perspective
  14. BRAND CONTRACT:Translate into standards, Fulfill Good Promises, Uncover Bad Promises
  15. BRAND BASED CUSTOMER MODEL:Identify your competitors, Compare your brand with competition
  16. BRAND BASED CUSTOMER MODEL:POSITIONING, Product era, Image Era, An important factor
  17. POSITIONING:Strong Positioning, Understanding of components through an example
  18. POSITIONING:Clarity about target market, Clarity about point of difference
  19. POSITIONING – GUIDING PRINCIPLES:Uniqueness, Credibility, Fit
  20. POSITIONING – GUIDING PRINCIPLES:Communicating the actual positioning, Evaluation criteria, Coining the message
  21. BRAND EXTENSION:Leveraging, Leveraging, Line Extension in detail, Positive side of line extension
  22. LINE EXTENSION:Reaction to negative side of extensions, Immediate actions for better managing line extensions
  23. BRAND EXTENSION/ DIVERSIFICATION:Why extend/diversify the brand,
  24. POSITIONING – THE BASE OF EXTENSION:Extending your target market, Consistency with brand vision
  25. DEVELOPING THE MODEL OF BRAND EXTENSION:Limitations, Multi-brand portfolio, The question of portfolio size
  26. BRAND PORTFOLIO:Segment variance, Constraints, Developing the model – multi-brand portfolio
  27. BRAND ARCHITECTURE:Branding strategies, Drawbacks of the product brand strategy, The umbrella brand strategy
  28. BRAND ARCHITECTURE:Source brand strategy, Endorsing brand strategy, What strategy to choose?
  29. CHANNELS OF DISTRIBUTION:Components of channel performance, Value thru product benefits
  30. CREATING VALUE:Value thru cost-efficiency, Members’ relationship with brand, Power defined
  31. CO BRANDING:Bundling, Forms of communications, Advertising and Promotions
  32. CUSTOMER RESPONSE HIERARCHY:Brand-based strategy, Methods of appropriations
  33. ADVERTISING:Developing advertising, Major responsibilities
  34. ADVERTISING:Message Frequency and Customer Awareness, Message Reinforcement
  35. SALES PROMOTIONS:Involvement of sales staff, Effects of promotions, Duration should be short
  36. OTHER COMMUNICATION TOOLS:Public relations, Event marketing, Foundations of one-to-one relationship
  37. PRICING:Strong umbrella lets you charge premium, Factors that drive loyalty
  38. PRICING:Market-based pricing, Cost-based pricing
  39. RETURN ON BRAND INVESTMENT – ROBI:Brand dynamics, On the relevance dimension
  40. BRAND DYNAMICS:On the dimension of knowledge, The importance of measures
  41. BRAND – BASED ORGANIZATION:Benefits, Not just marketing but whole culture, Tools to effective communication
  42. SERVICE BRANDS:The difference, Hard side of service selling, Solutions
  43. BRAND PLANNING:Corporate strategy and brands, Brand chartering, Brand planning process
  44. BRAND PLANNING PROCESS:Driver for change (continued), Brand analysis
  45. BRAND PLAN:Objectives, Need, Source of volume, Media strategy, Management strategy