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Brand Management

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Brand Management (MKT624)
VU
Lesson 4
BRAND MANIFESTATIONS/ FUNDAMENTALS
The discussion on brand fundamentals continues from the previous lecture.
Brand Characteristics
Brand characteristics fundamentally relate with the value brands offer their customers and
create for their companies. Value being at the heart of brands' characteristics necessitates that
brands be managed accurately.
The level of accuracy in brand management is reflected by the power brands have. A higher
level of power undoubtedly mirrors a higher level of accurate brand management.
Value and power are not a guarantee that brands will not be attacked. Competition will attack
your brand by trying to dislodge it or snatch market share from it. The battle will never stop.
The question arises, "how to bring in accuracy into brand management in a way that brand's
characteristics get enhanced under competitive challenges and threats"? Competitive pressures
threaten brands' success and even existence.
Given all that, brands become so very essential to the survival and success of business firms
that we need to understand them in all their complexities, so that we can manage them
correctly.
A very strong argument put forward by world renowned consultants, McKinsey is that
companies need to win the right to brand their products. This simply means that branding is just
not about wrapping your product into a nice package and selling that in the hope that you have
turned the product into a brand, which is not going to face any pitfalls and rather is going to be
profitable and powerful, straightaway ­ NO! To have the right characteristics, brands have to
be subjected to a certain criteria, the consultants have concluded.
The consultants claim that in order to win the right to brand, a company has to meet the
following vital criteria.1
·  The brand must offer a superior value proposition
·  The brand must deliver the superior value
·  The brand must maintain a relationship with its customers.
If a brand meets the above criteria in all senses, then it can be defined as the one having the
right characteristics. The criteria to create and maintain brands are so well-meaning that any
company operating outside of them does not have the right to do branding.
This can be further elaborated as follows:
·  Brand management is a strategic process and involves complete company effort beyond
the functional boundaries of the marketing department. And, therefore, offering value is
a function and commitment of the whole company.
·  The company must have all its resources at work to deliver superior value, which must
be defined in consumer terms. Exactly how the company delivers value varies from
company to company. It could be superior technology, lower cost, strength in
distribution, history of the brand, and creative advertising. Anything defined in
consumer terms will automatically translate into something valuable for the company as
well.
·  The brand must have a continuing relationship with the customers, and the brand must
adapt to changes in response to fierce competition yet meaning the same to its loyal
customers.
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Brand Management (MKT624)
VU
Brand value at the core of brand characteristics
o Brand characteristics offer us an opportunity to explain what brand value means to
consumers and how a brand creates that value. Bear in mind that brand value is at
the center of brand's characteristics.
o The consumers must feel that they are getting full value for the money spent in
terms of quality. The value has to be more than the generic product. Right branding
adds value to the product. Reconsider the definition of brand management.
o They must feel that the purchase of a certain brand has optimized their decision of
buying the best brand in the category. It is a subjective value, but nonetheless should
be created.
o They must get confirmation of the self-image that they present to others.
o They must get satisfaction out of the attractiveness of the brand.
o They must get satisfaction from the responsible social behavior of the brand in
terms of ecology and other ethical issues.
·
A brand also creates value for the company.
·
A strong brand works in the same way for the company as for the consumers. It assures
the following:
o Good future sales
o Good future earnings
o Good future cash flows
o Source of good future demand and lasting attractiveness
o Strong entry barrier to competition
o Carries its value into other markets - local as well as international
o Carries its value into other business categories i.e., new product areas and, hence,
offers economies of scale in advertising, promotions, and other marketing-mix
variables
Layers/levels of brands
Brands are offered in lines, mixes, stretches, and extensions. Behind every form of a brand are
strategic considerations. Such considerations form brand architecture, which is a topic of
detailed discussions in lectures on brand extension and brand architecture (lectures 21 ­ 28).
It owes to strategic considerations that brand managers decide whether a brand should form a
product line as a stand-alone brand, a company-name brand, designer-name brand, or an
extension/stretch of an existing brand name.
The decision to name a brand into any one of the above-mentioned classifications has one
fundamental common to all ­ the relationship between a product and a brand. An understanding
into developing that product-brand relationship leads you to build up the right branding
strategies. This implies you will then be able to define different layers of brands (lectures 21 ­
28).
Commitment of top management (Brand owners' commitment)
We are clear how brands create value for the consumer and the company. We must also look
into how a brand generates its own value to be able to create value for its two beneficiaries,
namely the consumer and the company.
Actually, a brand does not generate its own value; it is the commitment and quality of brand
management that builds up value of a brand over the years.
Companies that believe in continuously maintaining value of their brands and adding further
value to them are the ones that view brand management as strategic objective and never lose
sight of that goal.
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Brand Management (MKT624)
VU
The concept can be explained graphically with
The Value Interface
the help of a value interface. If you come to
think of it there are brands on the international
market as well as our local one that have been
around since the early last century ­ the
Brand Creates
Brand Creates
examples are from the beverage, tea, smoking,
Value for
Value for
and other industries. You can create a list of
Company
Consumer
your own.
Such brands have their longevity owing not to
accidents. They owe that to commitment of their
managements that have been investing into
Management
manufacturing and marketing areas:
Commitment
·  In manufacturing for the purpose of
-
Creates
innovations and adapting to changing
Figure 8
Brand Value
consumer  tastes,  maintenance  and
improvement of quality ­ and
·  In marketing from the distribution and advertising viewpoints. The whole exercise is
expensive!
That above explains:
·  Why companies invest into brands and manage them prudently over years and years?
·  Why acquiring companies are willing to pay a high price for established brands that are
leaders in their own right?
·  Why is it tempting to buy brands than to build them from scratch?
The answers to all the questions converge on one point ­ create value for the consumer and the
company, which is possible only if management is totally committed.
Summary ­ Lectures 3 and 4
Understanding brand fundamentals is important to develop an understanding into the strategic
process of brand asset management. Fundamentals manifest themselves in four different forms
­ dimensions, characteristics, layers, and commitment of management.
The concept of brand identity and image are central to the dimensions of brands and lays the
very foundation of what we want to create and how we want that creation imagined at the
consumer's end.
We can also say that if brands have consistent dimensions and strong characteristics, then they
offer superior consumer value. Value to consumers get translated into value to company.
What really constitutes superior consumer value is a deep understanding of the consumer.
Managers must put themselves into the shoes of consumers /customers and think how the latter
think and react to different brands and branding decisions.
The whole company has to work as a monolithic whole when it comes to supporting the right
branding decisions. The company must remain committed to good quality. Quality here means
the quality as perceived by consumers.
The company must also provide differentiation. The whole point is to create customers. And,
nothing would work more effectively than having a point of difference as compared with
competition.
The company must support the brands through investment into production processes, research
and development, continuous innovation, advertising, and human resource development. No
brand can survive for long without the active support and total commitment of the
management.
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Brand Management (MKT624)
VU
Bibliography
1. Geoffrey Randall: "Branding ­ A Practical Guide to Planning your Strategy"; Kogan Page
(2)
Suggested readings
1. Geoffrey Randall: "Branding ­ A Practical Guide to Planning your Strategy"; Kogan Page
(chapters 1 and 2)
2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (chapter 1)
19
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