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Brand Management

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Brand Management (MKT624)
VU
Lesson 12
BRAND CONTRACT
The concept of brand contract revolves around brand's ability to always stay up to the
expectations of consumers. Owing to the associations developed with the brands of their
choice, consumers do not want to see those brands deviate from the strong impressions and
image they have about those brands.
What consumers expect of brands is a positive change and development in relation to changing
technologies, environment, and any other factors that may have a bearing on consumer
behavior. To continually remain in favor of consumers, brands uphold consumers' franchise by
remaining up-to-date. This is the only way for brands to remain relevant.
For brands staying contemporary means bringing about innovations and living up to
consumers' likes and expectations. This further means engaging into a "contract". In other
words, brands must respect the contract, attract customers and assume all implications, which
they do through fulfilling the promises.
Brands make promises with the customers by providing benefits and developing associations.
Any deviations ­ lowering of quality, non-availability of brands at the point of customers'
choice, or not keeping pace with changing technologies ­ amount to not keeping the promise
and hence in customers' perception breaching the "contract". The contract, as such, is not legal;
it is purely economic and emotional in nature.
The need to stay contemporary
Because of the fact that we use brands day in and day out, brands are a part of our memories.
These memories are developed over time through a series of brand experiences. The image of a
brand, as such, grows out of cumulative memory, which basically is formed by brand's
associations and persona.
Whereas consumers expect to reap the same benefits always, the expectations they have must
carry an element of contemporariness. To keep brands contemporary, that is keeping them
belong to the present, we have to understand the memory part and the future part as a program.
The memories deal with the past and future is managed through a well guided program that
deals with the present and sets the ground for future evolution. Brand managers must define the
ground where the brand belongs and carve out the territory from where it will grow in future.
Memory is central to understanding how brands function and should be managed1.
The underlying program indicates the purpose and meaning of both former and future products.
We should study brand's history from production and marketing points of view and make them
a basis of our moves for the future. The historical perspective enables us to maintain
consistencies for our future moves.
Consistencies offer smooth transition from one era to another as part of the same program that
continues on a perpetual basis. You never stop working on what is past and what exists as
present. Understanding of the present on the basis of the past gets us into the future free of any
distortions. The result is a strong brand character, which is contemporary in nature.
Through consistency and persistence over time, brands create loyal customers. Brand keeps the
promise and in return customers buy the brand and the contract goes on.
Brand contract requirements
Maintenance of the brand contract is subject to certain requirement. It is not always easy. You
may make a wrong move in trying to improve packaging and the outer looks of the brand that
may fall out of consumers' favor. You may introduce certain features in a consumer durable
product that customers may see out of your brand's character. You may adjust ingredients of
your brand to achieve cost efficiencies, disappointing your customers in the process. Or, you
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Brand Management (MKT624)
VU
may just not have the requisite resources to catch up with the latest technologies, thereby
frustrating your customers of your inability to stay contemporary. In other words, there are
constraints in seeing the contract go through at all times.
The brand concept, as a whole, assumes that branding requires internal as well as external
marketing.2 Since brands set their own ever-increasing standards to stay "contemporary" they
need company-wide support ­ internal marketing in addition to external marketing.
External marketing is subject to the quality of internal marketing that is in practice for any
brand within a company. Conviction or lack of it among all employees of the company about
maintaining brand's promise can make or break a brand.
All functions of the organization must converge on one point to lend support to the brand. Only
upon getting that kind of support, the brand contract can be maintained. Following are some of
the requirements:
1. Closely monitor the needs and expectations of the buyer. Carry out market research both
to optimize the existing products and to discover needs that have yet to be fulfilled. This
effort falls within the realm of marketing.
2. React to technological progress as soon as it can create a competitive advantage for the
brand. This signifies that operations department stays abreast of all developments and
plays its role toward maintaining brand's promise. Promise is delivered by keeping the
brand contemporary through research and development in the operations department.
3. Provide both volumes and quality. This requirement again is to be fulfilled by the
operations department to make sure that repeat purchases take place. Insufficient volumes
can undermine loyalty due to non-availability at certain points of sale and quality
problems can jeopardize reputation of the brand and its loyalty.
4. Deliver products to intermediaries (trade members) consistently over time for them to
optimize the role they play in selling the brand. This responsibility belongs to shipping
and sales. Both departments play significant roles in maintaining the vital supply chain.
5. Give meaning to the brand and communicate its meaning to the target market through
advertising, a function that is a hallmark of marketing department.
6. Make sure that finances are available according to the budget and there are no
disturbances in the cash flow of the company. This is a responsibility of the finance
department and also sales that helps the finance department in getting receivable amounts.
Internal mobilization of resources with timely actions lays the foundation for promises to be
fulfilled. All departments and employees have to be an active part of the exercise with a sense
of ownership. A brand belongs to all and is the glory of all.
We can sum it up in the words of Scot Davis, "Brand contract is a set of promises that the
brand makes to customers. It is created internally but defined and validated externally by the
marketplace3."
Summary
Companies should be very careful and honest in understanding their target market first, the
need they are going to satisfy, and the promises they are going to make. Good promises reflect
good features of the product and benefits to customers.
Once used to good benefits, customers expect brands to continually offer those benefits and
address values they endear. Not only that, brands must also stay contemporary to stay relevant
on the scale. It is the contemporariness that upholds the contract a brand offers to its customers.
Upholding the contract is the ultimate win-win situation for a brand. There are certain
requirements that need to be fulfilled for the contract to stay valid in the marketplace. Toward
that, internal marketing and mobilization takes the driver's seat. Rest follows.
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Brand Management (MKT624)
VU
Bibliography:
1. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (52-56)
2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (58-59)
3. Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through Your
Brands"; Jossey-Bass, A Wiley Imprint (75)
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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