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Brand Management

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Brand Management (MKT624)
VU
Lesson 40
BRAND DYNAMICS
Introduction
With the understanding of measures on the first two dimensions, that is, differentiation and
relevance, this lecture continues with the discussion on measures of variants of the remaining
two dimensions, esteem and knowledge1.
On the dimension of esteem
Customer loyalty: This shows how consistent customers are in buying your brand, how long
they have been buying and how long they may buy? This measure should tell you the number
of customers that you would have lost had you not had the branding strategies. This also tells
you that the customers who did not leave your brand are loyal customers.
You ask your customers what other brands they considered before finally deciding to stick to
your brand. You can find out the competitive brands that entered your customers' decision-set.
The next question should clarify why they stuck to your brand after considering competition
and then discarding it.
You will get yet another testimony to your product's quality and branding strategies.
Price premium/Financial brand value: This shows you why your customers are willing to pay
you a premium over your competitors or a price that offers you good, attractive margin. This
also is an important measure in determining the right price premium for your brand.
You compare the price of your brand with your immediate competition and determine to what
extent you can further go up in price, thus following the market-based pricing mechanism.
The measure gives you insights into
·  Going for the right premium
·  Adjusting your pricing upwards, even if you do not charge a premium, to ensure you
have the right margins.
·  Cutting your costs wherever you can to improve your margins
Lifetime value of a customer: It lets you have your loyal customer's lifetime worth in terms of
your brand's purchasing.
On the dimension of knowledge
Positioning understanding: This measure tells you to what extent customers understand the
way you have positioned your brand. Any gaps between your message and understanding of the
target market will raise questions for correction.
A similarity of message and reception of it by the market is a testimony to the right positioning
and, hence, leveraging of the brand.
It is one of the most important measures for the simple reason that differentiation and
segmentation come to life if a position is rightly occupied in the minds of your consumers. To
what extent customers understand your positioning and own it tells you the level of success that
you have achieved from your branding effort.
If you positioned your brand from the taste and quality platform, then it has to be perceived so
in the market.
Conversely, if it is perceived more as a price-friendly brand, then the perception needs to be
changed. This perception may hinder your efforts to go for a price increase; for customers may
take it for granted that your price will never be out of their perception range. That will be a big
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Brand Management (MKT624)
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constraint for you. If, however, the right positioning is taking hold, then you will be free of that
constraint and can charge a premium or a price that offers a high level of margin.
There is a straight line relationship between quality perception and premium pricing.
Perception of high quality and taste will also enable you to make your customers stick to your
brand and attract new customers through referrals.
In short, a complete understanding on part of the customers about your brand's inner core and
character testifies that your position is well understood by them.
Referral index: It pinpoints the potential to create new business/customers owing to referrals by
satisfied and loyal customers on the basis of their knowledge of the brand.
The importance of measures
The importance of such measures comes to the surface under two sets of circumstances:
·  In adversity, when sales start slipping, market share eroding and management having no
choice but making desperate decisions as quick fixes.
·  In less difficult conditions, where brand's potential is not being fully harnessed, leaving
much to be desired. You realize this mostly in hindsight.
According to experts, these measures along with financial measures create a balanced method
of measuring a brand's performance. The challenge therefore is to use these measures to
supplement the financial measures. However, it is not important to go for all the measures that
are discussed. You can pick a few that are relevant to your strategic situation and then see with
confidence that your brand is moving the way it was planned. If not, then make relevant
changes before damage is done.
Such an approach ensures that brand building efforts are not compromised and you can:
1. Maintain your brand position ­ an extremely important dimension that drives all
marketing strategies.
2. Preempt most of the damages that could be caused by not addressing the strategic
factors.
3. Further consolidate your brand position by ensuring that all brand strategies are taking
hold.
4. Stay focused in maintaining your brand picture. It helps you eliminate any gaps between
the picture you have created and the actual image.
5. Determine the impact of your strategies on retaining loyal customers. Loyal customers
give referrals of your brand to others and create more customers.
6. Use the result of your branding efforts toward creating new customers, creating new
extensions.
7. Achieve an overall picture of the qualitative returns you are getting on the money you
are investing into brand-building.
Summary
Measuring performance of your brand means you are managing your brand right. Measurement
comes in the form of your monthly, quarterly, and annual returns on investments and revenues,
but it has to be supplemented with measurements of your strategies.
Strategies cause financial results and therefore must be measured to see if there are any changes
required toward tactical adjustments. The need for tactical adjustments keeps you alert and
timely action ensures that the financial results that you are posting continue improving.
A time may come when financial results take a turn for the negative if strategies are left to
chance and you lose control of their implications. The strategic implications are demonstrated
in four different macro dimensions, that is, differentiation, relevance, esteem, and knowledge.
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These dimensions translate themselves into so many different variants (offshoot) that allow us
an opportunity to measure them and see whether or not we are on the right path. If we are not,
then we make adjustments and the process goes on.
There could be so many different measures. You should not always follow a rigid checklist of
measures. Be sensitive to variables that affect your results and strategies under a particular set
of circumstances. Relating those variables with your circumstances, you should decide which
measures to go for ­ market share, loyalty, pricing, brand image recognition, positioning or any
other?
Bibliography:
1. David Aaker: "Building Strong Brands", The Free Press ( )
Suggested readings:
1. Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through Your
Brand"; Jossey-Bass, a Wiley Imprint (220-226)
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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