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Brand Management

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Brand Management (MKT624)
Lesson 9
Answers to filling the growth gap
The answers could be best obtained with the help of the following figure 13.
Figure 13
Source: Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through Your Brands"; Jossey-
Bass, A Wiley Imprint (46)
The company plans to register sales revenue of RS.170 million by the end of 2010. The
existing revenue level of year 2006 is RS.100 million. The plan, in other words, envisages a
growth of 70 percent, which translates into a yearly average growth rate of 17.5 percent. (This
is a hypothetical situation and does not represent a real life company case; in real life a growth
rate of 17.5 percent is very high and is witnessed only in high growth industries).
The challenging part is how to achieve what is envisaged. The senior management is convinced
that additional revenue of RS.70 million will come from a combination of the following
strategic moves:
·  Strengthening of existing brand(s)
·  Introduction of new products, and
·  Acquisitions
The questions of brand managers regarding how to fill the contribution gap stand answered.
What the above reveals is that no single move can bring the company the desired level of
growth; rather, it needs to move into three strategic directions to achieve the objective.
The brand and marketing management know what they need to plan to strengthen the existing
brand(s), to introduce new brands, and to formulate moves for brands that are planned to be
The intended targets of acquisitions may not be revealed to brand management immediately at
the time the top management envisions to do so. But, the fact remains that acquired brands will
also bring their part of contribution. Generally, acquisitions bring with them staff members at
the level of brand managers, who get immersed into company's management and continue
performing their functions to maintain consistency.
Brand Management (MKT624)
With the questions answered, brand managers find themselves a step further in building the
brand vision toward a clear picture of the brand.
3. Collect industry data and create a brand vision starter
Translation of visionary thinking into financial and strategic goals must have a base. Nothing
could provide a better base than analyzing the industry the company is a part of. Industry
analysis comprises the following:
·  Defining the industry
·  Determining industry growth and size
·  Key growth factors
·  Seasonality
·  Industry lifecycle
Defining the industry: Defining the industry is the first step toward the analysis. You must
consider the following:
A description of the economic sector that the industry occupies ­ manufacturing,
services, distribution, or any other
The range of products and services offered by the industry
A description of the geographic scope of the industry ­ whether local, regional,
national, or international
The industry definition may also include a listing of major market segments. For example, a
computer manufacturer may divide its market into desk top computers, laptops and
notebooks, and servers for web hosting.
The idea is to find a definition that is broad enough to include all of the company's major
competitors but narrow enough to permit useful comparisons. However, it is better to be a
little broad than being too narrow.
Market Share
Industry size and growth: You have
Figure 14
Years 2006 - 2008
to determine the current size of the
industry for the company's products
or services. You can determine this
through published data or informal
means and arrive at numbers for total
units sold and revenue generated by
all the players in the industry.
You can then go on to determining
the  annual  growth  rate  of
yesteryears, project for the next few
years and compare that with your
company's. That will show you how
you seem to be growing ­ as much as
the industry, faster, or slower. Such
analysis will also enable you to
compare your company's growth
with other major competitors.
Figure 14 exhibits market shares
enjoyed by three different companies
ABC, MNP, and XYZ as projections
for a three-year period.
Brand Management (MKT624)
Company XYZ shows a consistent rise in its market share at the expense of the other
two companies. Company MNP is losing over the three-year period, while company
ABC is barely maintaining the marginal growth it is projecting to register in year 2007.
This kind of a comparison helps managers develop a realistic picture of the industry
and, hence, the standing of their own company while they are in the process of
developing a vision for their brand.
Another factor that brand managers should
Industry Growth
Figure 15
consider while analyzing market is the
Years 2006-2008
growth of the category or market. The rise or
drop of market shares as projected for the
three companies can be interpreted in yet
another way giving the managers better
insights into the movements of different
It is evident from figure 15 that company
XYZ has a market position stronger than it
may look from the preceding figure 14. This
company is gaining market share in a fast
growing category, which is different from
having the same level of shares in a category
that is growing slower or is static.
Company MNP is dropping its share fast over
the three-year period, but may not be losing
the volume as fast. The volume may still be
the same as it is in the year 2006. Although a
consolation  by  way  of  utilizing  the
production capacity, the company definitely
is not growing and is on the declining path.
Company ABC may be static in terms of the
market share, but it is gaining volume on
yearly basis. The situation, however, is not as
rosy as that of XYZ and company ABC is not
reaping optimal benefits of the category
growth. Refer to the advantages that number
one brand enjoys as per the PIMS findings in lecture 2.
Such analyses arm the brand managers with analytical insights into realistic
comparisons and solid basis for developing the right vision for their brands.
Key growth factors: Growth factors are trends and conditions beyond the control of the
industry or firms within it. Such factors significantly affect market growth and the level
of demand, hence having impact on all.
The car and electronic industries in Pakistan have undergone a tremendous growth
phase owing basically to bank financing, which is easily available. The access to bank
financing is the key growth factor, which has given a new shape to the whole supply
chain of the two industries. The level of demand on part of those who are into
manufacturing of car accessories and electronic parts for TVs, for example, has
witnessed a growth rate unprecedented in the past.
Cyclical Influences
Cyclical industries are those that are directly affected by the rise and fall of external
economic cycles, usually the national business cycle. Cyclical industries generally do
Brand Management (MKT624)
well during strong periods of growth and do poorly during recessions. Typical cyclical
industries are manufacturing (consumer durables) and construction (cement and other
building materials), to name a couple.
Cyclical patterns should be identified to know the strengths and weakness of such
industries, if those affect your business.
Seasonality: It refers to the distribution of business activity during the year. If an
industry is subject to seasonality, then its sales in one part of the year are
disproportionate to the other part of the year. For example ice cream and cold drinks
have a higher level of demand in the typical season of summer. Brand managers must
consider such seasonal variations while they are in the process of developing the brand
Industry life cycle: It is important to know the level of maturity of an industry. There
are four stages that characterize maturity:
o Embryonic
o Growth
o Mature
o Aging
You, as brand managers, have to see what stage the industry is in and how you relate to
that cycle (one of the above four stages) in terms of growth rate, market share, product
line planning, investment in technology etc.
4. Meeting with top management to create the vision
Equipped with all the relevant details and information, you are now in a position to make a
presentation to the top management. In all chances, the findings should be acceptable to all
since many vital factors in the report owe their inclusion to information from the top
management. It can still be debatable, but you have a chance to defend the bases that have led
to the conclusion. It offers a good opportunity to iron out any differences that brand and
marketing management may have with other departments for the good of the brand.
A consensus on the report puts the company on the course to developing a clear brand picture,
which is the next strategic step in the brand management process.
The second step of the strategic brand management process is development of brand picture.
Toward creating the right picture, you have to do everything possible to create the right image.
The whole exercise of creating the right picture is to create meaningful parallels between the
brand's identity and its image. We know by now that more the image coincides with identity
the more brand managers are successful in communicating the right identity and creating the
right image.
Creating the right identity is of paramount importance, for it means that the product has been
given the right meaning that will be rightly received at the consumer's end. Creating a brand,
therefore, is the end of the process that is the sum total of all company resources deployed to
create the point of difference that highlights brand's identity.
Brands therefore are born out of the marketing strategies of differentiation and segmentation, as
is already clear from the discussion on all preceding concepts in general and the example of
company XYZ's vision statement in particular.
Brand Management (MKT624)
The soul of branding
Branding is not just putting a name on top of a product. Branding is that you do inside of the
product, that is, give it meaning through creating the point of difference in a way that its
identity is taken at the receiving end the way it is intended. It is because of such an identity of
powerful brands that you look at them as relevant and genuine even in the absence of a label2.
You do not give the same treatment to a fake brand even if it carries the label that may look
genuine. Why? Because the actual brand (the inner soul) is not there! The brand name is
visible, yet the brand is absent. The image, in other words, that consumers have of the two
products is different. In case of the original, it has the top of the mind image; in case of the fake
one, it has the bottom of the mind image.
How to develop the right picture?
The question is how do you create a brand that injects into the product what gives it the right
image? The first task toward doing that is to envision3:
·  What attributes materialize?
·  What advantages are created?
·  What benefits emerge?
·  What obsessions does the brand represent?
A brand picture has to answer all the
Brand Picture Process Starter
questions. A simple question that embodies
all the above-mentioned four questions is,
"what would the market lack if our brand
Right Segment
was not there?" If the answer is nothing, then
the brand managers may not go ahead with
the brand development.
If the answer is substantive, then the
substance will be found systematically
through the above four questions in knowing
the features, advantages, benefits, and the
Figure 16
obsessions the brand offers. Therefore, once
brand managers are gone ahead with the right
vision and the purpose, the right image will
Figure  16  illustrates  the  process  of
Right Product
developing the brand picture - right segment,
right differentiation, right product, right
identity, the right image!
The right picture gives you the right basis for
the brand strategies that will leverage the
brand the way it is envisioned. An important
thing to keep in mind is that brand picture is
Right Identity
externally driven with customers as the focal
point3. It takes into account customer needs
and  the  competition.  The  competitive
environment gives you the right customer
perspective regarding your product vis-ŕ-vis
Right Image
Brand Management (MKT624)
Summary - lectures 8 and 9
Building brand vision is the first step of the strategic brand management process. To leverage
your brand, you should build up the brand vision by considering all possible strategic factors
like growth the company envisages, the ability to reach strategic goals, introduction of products
and then sustaining those products.
Brand managers must start the process by seeking top management's input on matters of
strategic moves before they develop the right vision, which leads to developing the right brand
picture. The whole process is very strategic and therefore must take into account why a
particular segment should be served and how the company offering will best serve that segment
of the market.
Identification of the right segment will enable the brand managers to develop the right product.
Identity of the product, if created right, will lead to the right image that lays the foundation for
the right brand picture.
1. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (47)
2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (47)
3. Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through Your
Brands"; Jossey-Bass, A Wiley Imprint (53)
Suggested readings:
1. Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through Your
Brands"; Jossey-Bass, A Wiley Imprint (37-48)
2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (46-59)
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