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Brand Management

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Brand Management (MKT624)
VU
Lesson 7
BRAND VISION
Purpose of brand vision
To earn the right level of profitability, you have to leverage your brand rightly. It is here that
we start treating brand as an asset and manage that asset by having a vision.
Vision fulfills three basic purposes1
·  Consensus among management
·  Commits company to research
·  Mandates telling all stakeholders
Consensus among management: A bottom-up approach, it extracts understanding and
consensus from management about brand's contribution. All concerned with the brand give
their input regarding brand's potential and an effort is made to have all of them committed
to the respective tasks they are to perform toward brand's contribution.
Brand vision brings management to a platform from where they all have to agree what level
of growth the brand will generate to fulfill company's objectives. It is not a function limited
to the boundaries of marketing management; it is an objective for total management to
agree on one point ­ brand's reason for being (why it exists?) and its potential toward
profitability.
The question of why the brand exists entails detailed discussion on many exciting areas of
marketing, which will be touched upon from time to time in their proper perspective
throughout the course. What it essentially means is the "fulfillment of a particular need" of
customers. Identifying the right need and then committing yourselves to fulfill that with the
right product takes you on the journey of starting with a vision to complete development of
the brand.
Commits Company to research: Consensus leads management to initiate research on so
many vital research projects. Because of the commitment, no one wants to make decisions
without any solid basis. The tendency to make assumptions on the ground that we know the
market well and therefore there is no need for research should be avoided. Only research
provides the company with grounds like:
o Customer attitudes and usage
o Brand attributes to maintain and change
o Segmental changes; multi-segment brands
o Geographical changes; new categories etc.
The list is not exhaustive. It can be much longer depending on the needs of the company at
any given point in time.
Knowing customers' attitudes offers insights into product build-up, service requirements,
and any other fulfillment of customers' requirements. Maintaining or changing product
attributes relate responding to changing needs, preferences, and competitive pressures that
exist and the ones that are anticipated.
You can also determine the differences among different offerings of the brand as perceived
by your consumers in different segments of the market. You can make decisions about
which segments are more attractive and which are less attractive. That may also take you
into what geographic areas to be emphasized more in relation to strength of different
offerings. Brand strength may lead the management to start considering introducing its
brand across categories. What is it that took Nestle from milk to yogurt to juices to
chocolates? This is a good example of going across categories.
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Brand Management (MKT624)
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Management can either stick to its vision and plans or change it according to the findings of
market research. As you go along the learning path you will realize that almost at every step
you can undertake a research project. Research does not have to be tedious, cumbersome,
and expensive. Small and simple research designs can lead you to verify your hypotheses as
the need emerges.
Mandates telling all stakeholders: Since vision is well thought-through and shared by all
in the company, it mandates that management tell all stakeholders to know and share it as
well. Sharing the vision means that stakeholders will also know the objectives that are a
reflection of the vision.
The present day's competitive pressures have made the day-to-day management very fast
paced and, hence, prone to dynamic changes and adjustments. Information on past
performance, recent trends, and research findings present a strong case for the brand plan
and vision. Having support from all stakeholders toward your brand objectives makes the
job of management less difficult. It also keeps the blame game and finger pointing from
taking place if things go wrong. Going right strengthens management's confidence.
Let us now try to develop hypothetical vision and mission statements of a fast food
company that is planning to enter the category of fast food. The exercise is intended to take
you through a case that offers an opportunity of developing a practical understanding of the
concepts.
After you feel comfortable with the learning process, you may like to develop similar
statements of any business you may envision yourself handling or heading.
Vision Statement of a Fast Food Company
"The company will enter the fast food category by introducing a range of quality
sandwiches with brand name XYZ; the sandwiches will have health-food-appeal for lunch
time in particular and anytime later in general. It will price the entries within the consumer
friendly range to optimize the number of customers, who are professionals within the age
bracket of 20-50 years. It will attempt to reach its potential customers at their door step and
always stay close to where they are".
As is clear from the statement, the company's business model will be based on three
fundamental factors of
·  High quality
·  Affordability
·  Accessibility
The basic objective of this statement is to emphasize the point that vision relates the future.
The statement talks about the nature of the product and how it envisions entering the
category with consumer-friendly pricing within the target market. (The statement is a little
longer than the usual vision statements. It is designed to basically enhance your ability to
develop one independently).
We shall be referring to the implications of this statement frequently to see that every thing
said in the statement has a meaning in terms of brand management. The figures 10 - 12
exhibit the translation of consumer-friendly pricing as it fits into the market gap that will
allow the company to optimize its sales.
We can sum up the components of this statement into the following:
o It explains the overall goal of the brand
o It defines the target market
o It underlines the need to have differentiated sandwiches
o It makes it easy to translate the above three components into financial goals
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Brand Management (MKT624)
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If you think that XYZ has to create more than one sandwich with different taste profiles in
order for its customers to have choice, then your thinking is practical. If you think that XYZ
should deliver sandwiches at the doorstep of its customers, then your understanding is
correct. And, if you think that XYZ by saying "close to where its customers are" should
also create its own restaurants, then your vision is comprehensive about the future business
make-up. Should you also think that the statement will have implications in terms of
specialist personnel to operate restaurants; your vision is then absolute and totally inclusive
about the nature of business.
Mission being the business at hand, the statement will look like the following:
Mission statement of XYZ
"XYZ's mission is to develop a team of delivery personnel conversant with the job of
delivering food with high efficiency and low operational costs. Part of its mission is also to
simultaneously develop fast food outlets with appealing but economy-driven architectural
features, from where it can serve its customers through highly-trained and motivated crew."
We are assuming that XYZ has in place all requirements fulfilled for the right human
resource for sandwich making and purchasing on daily basis of the requisite supplies.
Sustaining the operations through excellent systems and procedures are part of the
development process.
Brand Value Statement
"XYZ professes integrity of character, conscientiousness of work ethics, quality
consciousness, and mastery of skills as its basic values."
To have the quality of sandwiches as envisioned by XYZ, it is important to have the staff
inculcate the declared values. It should take special training sessions and periodic refresher
meetings to renew company's commitment to the professed values.
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Brand Management (MKT624)
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Figure 10 above
Figure 11 below
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Brand Management (MKT624)
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Figure 12
The three figures show a grid representing on the x-axis five segments of price and on y-axis
three levels of quality. The intersection of the price line and the quality line represents one
particular price-quality index that basically defines one particular segment. You can have as
many price lines as you may deem representing the actual market situation.
XYZ makes an entry in "mid-high market segment 4" (figure 10) and later plans to enter with
different offerings into "mid-market segment 3" (figure 11) and "high-market segment 5"
(figure 12) later on. The strategic moves are a translation of the vision the company developed
for itself. Workings on the moves as are evident from the figures are all about company's
mission and strategies that flow out of the vision and mission.
Key point
Vision generally represents a time frame of 5 to 10 years. Once translated into mission, it stays
intact for a couple of years or more. It is said that a mission statement should not be changed
before two to three years approximately.
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Brand Management (MKT624)
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Glossary of terms:
Contribution: Contribution margin is the gross proceeds after deducting the direct variable
costs a company incurs on making a product. The higher the contribution, the greater the
potential the brand has to lift the business toward the breakeven point.
Brand attributes: Features of the brand that characterizes brand's personality.
Offerings: An introduction of a product, or a product; generally, it is used owing to brand
extensions. If a brand has more than one extension, for example regular yogurt and the one
with higher calcium, then the brand has two offerings.
Stakeholders: All those individuals and entities that have stakes in the business. They may not
be shareholders, but they are affected by the performance of the company in one way or the
other, for example banks and suppliers of raw materials.
Business model: The strategic frame work on which rests business' strategic moves.
Bibliography:
1. Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through Your
Brands"; Jossey-Bass, A Wiley Imprint (38-39)
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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