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Brand Management

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Brand Management (MKT624)
VU
Lesson 44
BRAND PLANNING PROCESS
Introduction
This lecture is a continuation of the remaining part of the second step of brand planning
process, market analysis. This step will make way for the third one, brand analysis, which sets
the stage for the actual brand plan.
Driver for change (continued)
Product innovation: This aspect can be a major driving force if manufacturers undertake
innovations very frequently and make the market and industry grow faster. A faster growth
generally is a function of a wider degree of differentiation. This reforms customers' perception
about a reformed category. Japanese electronics industry has been demonstrating this
phenomenon for decades and still continues to do that. Mobile phones industry is another
example.
Market innovations: This driver can again change the market landscape owing to new methods
of product delivery and hence cause cost efficiencies, customer-friendly pricing, and efficient
deliveries. Growth of courier services in Pakistan is an example. This driver has the potential to
drastically change the way products could be distributed.
Entry or exit of firms: At times an entry of a foreign firm into the local market drives the
industrial change and dictates competitive adjustment. Their entry may bring the costs down or
offer something highly innovative and thus change the landscape.
An eruption can also be staged by a major local enterprise from a different category ­ a
company that may like to extend its brand power into the area you are playing in. That may
change the rules of the game if the new player is very resourceful and impacts production and
marketing cost structures. You will have to consider making adjustments. It is a challenging
situation in which you must be very pragmatic in exploiting your strengths.
Changing lifestyles and attitudes: These are at times real major drivers of a change. You may
think of the anti-smoking sentiment almost every where and its impact on the smoke market's
strategic thinking and moves.
Growing sensitivities about salt, sugar, and chemical additives have changed manufacturers'
way of processing food items. Their communication campaigns essentially talk about what they
are not ­ the positioning concept ­ for example, they do not contain chemical additives; they
are sugar-free; they are low-salt etc.
Increased interest in physical fitness has given rise to a whole new industry and market of
exercising machines, mountain bikes, recreation areas and gyms. A whole new market of
vitamins and nutrition supplements has come up.
What is important is that shifting social concerns should make marketers more sensitive about
changing trends and quick to respond to those trends. Quick responders always seem to take
advantage, for they sense the drivers more quickly than others.
Link between driving forces and strategy: There is a very close link between the two. Sound
analysis of industry's driving forces is a prerequisite to company's strategy. Unless managers
can assess the changes the major drivers will cause in company's business in the foreseeable
future ­ one to three years ­ they will not be able to craft the right strategy. Therefore, it is a
must that managers first can rightly identify the drivers and then their implications for their
business to be able to cope with changes.
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Brand Management (MKT624)
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Key success factors: Key success factors (KSF) are those abilities that a company can identify
and then capitalize on to prosper in the market place. They are also known as critical success
factors.
It is those strategic elements like ­ product attributes, financial and human resources,
competencies, competitive capabilities and other business outcomes that spell the difference
between profit and loss1.
Businesses must pay so much attention to those strategic elements that they succeed financially
and competitively. If a business can answer three questions it can easily identify what the key
success factors are for its industry:
1. On what basis customers choose between brands of different sellers?
2. What should a seller do to be competitively successful ­ what resources and
competitive capabilities does it need?
3. What does it take a seller to achieve a sustainable competitive advantage?
KSFs are industry-related. As such, understanding and then capitalizing on them to gain
competitive advantage is what is required of good managers. As an example, if one of the KSFs
in an industry is to utilize full capacity of the plant to achieve scale economies and sell high
volumes, you cannot have a marketing strategy that works best for niche marketing of
specialized items. Cigarettes, safety matches, biscuits, and other high volume consumer items
are examples of such a market situation.
If you are an apparel manufacturer of fashion garments, your marketing or brand strategy
tailored for mass volume garments like T-shirts is going to be at odds with something special
that you are doing.
The typical KSF in that case is the ability of the company to have specialist staff good at color
selection at the start of every season and designer staff to create fashions. Another KSF will be
channels of distribution that can enhance the appeal for you garments. Maybe you would like to
have your own stores for that line of garments to create a very coherent strategy that takes care
of fashion design, a compatible shop décor, and display of those garments.
Since competition follows fast, you may not be the only one in that line and therefore a
manufacturer who follows one or more of the KSFs faster than the others is generally the
winner.
KSFs are different for different industries and also keep changing with changes in driving
forces and competitive conditions. For example, global economic changes as drivers bring into
existence new KSFs that are related to those drivers. If global supply chain brings an industry
to Pakistan, then firms within that industry have to be quick in having the right quality of
management and labor. Those who happen to be within the industry and can capitalize on those
KSFs (good management and labor force) are winners.
Every industry generally has just a few ­ 2 to 4 ­ major KSFs. And, mostly just about 1 or 2
outrank the others. There are a whole lot of KSFs in different functional areas of business, let
us just talk about a few that will put our understanding in a proper perspective.
·  Low-cost production efficiency
·  Quality of production
·  Access to adequate supply of labor
·  Access to quality management and technical expertise
·  Strong network of dealers/distributors/wholesalers
·  Company-owned stores
·  Fast delivery
·  Fast customer service
·  Attractive styling/packaging
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·  Perpetual advertising
·  Superior information systems
Think of all the above factors, one by one, as something without which success of your
business venture cannot be guaranteed. You will start appreciating the importance of key
success factors.
Brand analysis
The point of departure for this stage is the model that we discussed earlier.
The brand model: Whether we are dealing with a new brand or an existing one, we must make
sure that we are considering all the dimensions of the brand correctly.
We must be clear about the brand essence and values. The core meaning of the brand has to be
expressed internally and externally. The personality should be such that imagery works
instantaneously for customers to recognize the brand identity. To achieve that, we have to make
sure that communication media is integrated, working for the same end with a coherent
message and campaign.
You must be clear about the place of the brand as part of the architecture. There should be no
inconsistencies. What is extremely essential at this point is that all these factors are consistent
with the market analysis.
Positioning: The definition of the model automatically should take you to the areas of
segmentation and differentiation. You cannot consider brand's essence, core values, identity
and personality, and the imagery without taking into consideration the segment you are going
to target and the point of difference you are going to offer. These two elements of segmentation
and differentiation lay the ground for positioning.
In the context of brand planning, you come up with a statement that describes the brand from
the point of view of differentiation. The concept is that you position your brand in the mind of
the consumer relative to competition in a way that it points out key differences. You create a
position that is not yet occupied in the consumer's mind, a position the consumer will own
immediately. Positioning in a way is redefinition of the brand.
Objectives: It is here that you start working with numbers in terms of sales volume, revenues,
margins, and other financial returns on the brand. This necessitates coming up with sales
forecasts as the backbone of all projections and extrapolations that you make.
You rationalize your projections by taking into account competition and hence the total market
size to objectively arrive at a level that you think your brand can attain. Existing or a new
brand, in both cases you work with pragmatic parameters.
One of the strategic aims here is to project the share of the market that you envisage achieving
during the plan period.
Brand picture: This part deals with the creative elements like brand vision, brand's promise,
and brand's contract. The most important task here is to see that all the elements look as
coherent part of the focused whole. They should be so closely and consistently related at every
point that they must look like one organic body, with no foreign part.
To elaborate further, all these strategic elements should revolve around the essence and
positioning of the brand. Delivery of promises and upholding of the contract will first
legitimize and then strengthen brand's position.
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Products and its variants: You must consider all the range items and sizes by flavors,
ingredients, recipes or whatever way the product is ranged. You must consider all that is learnt
about range and brand extension. You must keep into consideration utility of different sizes
meant for who, when, what, and where aspects.
The considerations must center on the strategic elements of promise and contract. Any
distancing between the two is going to make the plan incoherent, disjointed, and illogical.
Name: Despite having different and divergent opinions on the importance of name or the lack
of it, you should opt for a name that expresses brand's position and enhances its identity. It
preferably should not be too general unable to evoke right imagery, and at the same time not
too narrow unable to offer you the opportunity of extension in future.
Packaging: This should highlight brand's personality and leave a mark on the consumer. The
utility and usefulness of it should be fully considered; it should "not be overdone" and nor
should it give the impression of "much is left to be desired".
Pricing: After having learnt the strategic side of pricing, it is our decision to go for either cost-
plus pricing or market-based pricing. As the logic goes, market-based pricing makes a lot more
sense, but then you must know both your customers and competition well. Any pricing
strategy, therefore, should be the cornerstone of margins that the company wants to make.
Equally important is to maintain the balance between the margins and the "value for money"
proposition to consumers. Any undue effort to make profits will attract competition.
Last, but not the least, pricing should be linked to the positioning of the product.
Advertising and promotions: To keep your brand into limelight and worthy of recall and
recognition, it is important to advertise according to a well thought-through plan. Advertising is
an investment and not an expense. It therefore should receive top level support toward brand
building. Media selection for the optimal impact is a very delicate and strategic decision. You
should work very closely with the agency.
Nonetheless, it also is important for the brand to show the potential of generating a healthy
return on that investment. Promotions and other tools of communication should also be
integrated into the campaign sensibly.
Channel partners: For the simple reason that you are out to not only sell, but also to leverage
your brand to the maximum, your decision about what channels to use should be very practical.
One way is to follow the market norm; the other is to think improvements by getting into
combinations of different members of the channel. Another way is to get you directly involved
into distribution.
The objective is to maximize the outreach and hence availability of your brand by keeping the
distribution cost-effective, customer-friendly, and result-optimizing.
Suggested readings:
1. Thompson and Strickland: "Strategic Management" (95)
2. Geoffrey Randall: "Branding ­ A Practical Guide to Planning Your Strategy", Kogan
Page (92-100)
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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