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Brand Management

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Brand Management (MKT624)
Lesson 39
All strategic moves are made according to a game plan that we have learnt through different
stages of the brand management process. From brand picture to positioning to channels to
communication are all strategic formulations that require investment. If these formulations are
put right, the result you get is brand value and profitability. To what extent the strategies in
place are giving return on brand investment should be measured so that you can make
adjustments in your strategic moves whenever and wherever those are required. The lecture
throws light on that!
Return on brand investment ­ ROBI
The basic idea of ROBI is to measure brand's performance. To manage your brand well, you
have got to measure its movement in terms of changing preferences and loyalties. The most
important challenge here is to see that loyalty to the brand does not erode, for it is one basic
measure of keeping your customers, bringing in new ones, and keeping them loyal as well.
There are different measures that are employed to gauge the strategic movement and growth of
your brand. Such measures allow insights into the following factors or formulations that
organizations have in place to ensure growth of their brands:
·  Allow to see that overall strategic movement is according to the strategic plans.
·  Offer insights into any changes that may be required in adjusting brand position or
further strengthening it.
·  Let you adjust or reinforce communication plans for consistent focus.
·  Offer insights into provision of resources in a more effective way.
·  Let you identify brand strength and potential areas of growth within and across
categories, that is, line or brand stretch.
Why measure performance?
It can be argued that in the presence of accounting measures like revenues, margins, and returns
on revenues and investments, why measure brand's performance? The achievement of financial
goals is a requisite of the highest order. What else is needed? These are interesting questions
and should be answered.
Beneath the surface of accounting and other statistical figures are strategic factors that cause
subtle changes to brand's movement as time passes by. It therefore becomes important to track
such changes in order to make right decisions and adjust tactical moves relating those changes.
In other words, we measure, on the one hand, financial results, and, on the other, strategic
factors that cause those results.
Brand dynamics
There is a cause-and-effect relationship between strategic factors and financial measures. The
strategic factors, according to the most relevant brand equity model by Young and Rubicam
(Y&R) are1:
1. Differentiation
2. Relevance
3. Esteem
4. Knowledge
Brand Management (MKT624)
According to this model brands are built sequentially according to the four factors as shown in
the graphic illustration.
Figure 43
Differentiation comes first, as no brand with
Model of Brand Dynamics
ambitions can become strong unless it has a
point of real differentiation. It is the bottom line
characteristic of any brand that seeks to acquire
price premium or a decent price with good
Relevance is next on the model. It means that a
brand must have clear meaning for its users.
Unless it is relevant for the target market, it will
not buy it, despite being much differentiated.
Very expensive professional cameras and
chronograph  wrist  watches  are  much
differentiated, but they have an appeal for a
niche market and not a large target market.
Therefore, they are no good for a common
If a brand has differentiation and is highly
relevant for a big market, it becomes a big seller
and, hence very strong.
Brand  strength,  then,  is  a  function  of
differentiation and relevance.
We can say that
Source: Building Strong Brands by David A. Aaker
Brand strength = Differentiation multiplied
by relevance
We must try for our brands to become strong on both characteristics, which offer one
"construct" of brand strength. The other "construct" comprises of the other two dimensions that
are esteem and knowledge. Esteem multiplied by knowledge is the brand stature construct. See
the graphics on the following page.
Esteem refers to perceived quality and a rise or decline in popularity. Customers loyal to their
brands hold them in high esteem owing to the quality perceptions. Esteem then has a direct
relationship with loyalty.
Knowledge illustrates that customers are not only aware of the brand and its product, but also
understand the reason for this product's existence. They are aware of the positioning of it and
have a true understanding of the brand. That is the height of the brand building process.
The four dimensions have further variants. You study their variants within the two major
constructs and choose which ones are most relevant for measuring performance of your brand.
In other words, the performance and subtle changes that are caused over time stem from these
dimensions. Starting with awareness, recognition, and recall, these dimensions end with referral
As a reminder, these measures are carried out along side routine financial results to complete a
balanced brand-building process. One important beginning about these measures is that they
Brand Management (MKT624)
require researching across a representative sample of your customers. Maintaining a contact
with them leverages your knowledge of the brand in a much more structured way. You can also
improve upon the brand-based customer model that is a composite of brand picture, brand
contract, and positioning.
Let us now take a look at the variants of the dimensions that become important strategic
measures of brand's performance as shown by the graphics on the page after next.
On the differentiation dimension:
Awareness and recognition: Customer's ability to recall and recognize the brand as a distinct
identity is a reflection of brand's strength. The more differentiated it is, the easier the recall and
recognition. Awareness and recognition play a dominant role in building brand equity. Being in
the minds of consumers, it also plays a role in developing outreach for the brand. It is similar to
the measure that ad agencies undertake in establishing the aided and unaided recalls to gauge
the success of their campaigns. Used as a measure of brand performance, recall and recognition
should however go beyond just measuring the level of recall. It must provide relevant data that
you can relate with other variables and gauge strategic implications.
Figure 44
Brand Management (MKT624)
Figure 45
Awareness, recognition, and recall
Persona recognition
Contract fulfillment
Market share
Purchase frequency
Customer satisfaction
Quality perception
Lost and found customers
Customer loyalty
Price premium
Lifetime value of a customer
Positioning understanding
Referral index
While carrying out research, importance should also be given to symbols and imagery. In many
cases, symbols and images cannot be separated from the brand name when it comes to evoking
a recall. Question about what comes to your mind in terms of symbols and images while we
mention this name is important.
Getting people to recall and recognize your brand goes a long way in building brand equity.
The data generated on recall and recognition therefore should be used very strategically in
making decisions about different variables of the marketing mix.
Persona recognition: It measures the extent to which your brand is consistent with its persona.
Are distinct and differentiated features recognized by your customers? Basically, it is a measure
Brand Management (MKT624)
that tells you whether the brand persona developed by you is being received at the customer
end the way it was intended!
This measure should also be drawn on a representative sample of your customers to find out
how they associate themselves with your brand. It should be judged by the degree to which
customers perceive receiving the benefits and developing emotional associations with your
You, therefore, have to devise a questionnaire that is intended to evoke the correct and
objective responses. The next step is obviously for you to compare the results with your
original persona. Any variations that you detect have to be taken care of in relation to their
nature and severity.
If you intended to create a persona of a dependable, friendly, and, informal brand and the
results are contrary to that persona, you must make adjustments where ever those are warranted
­ in quality, packaging, just the visual part, symbols, or maybe your communication.
The chances are that major changes will not be desired, for your persona should not be that
much off the mark to dictate major changes. That will, most probably, bring your focus on to
the imagery, where some adjustments will fix the problem
Contract fulfillment: It measures the extent to which the brand upholds the contract. Are all
promises being delivered? This measure gives a straightforward report on how much your
brand is keeping all the promises it has made with its customers.
Are customers satisfied about whatever they think should be delivered is being delivered? If the
answer is yes, then you are keeping the contract. Any breaches dictate that you must repair the
contract and win over customers' confidence.
You will recall this contract is only emotional and economic in nature. Unavailability or erratic
availability of a successful brand of yours reflects flaws either in distribution system or
company's logistics.
Customers expect regular availability to reap the benefits your brand offers. This is a breach of
the contract and has to be repaired. Not being able to supply or deliver the product through a
direct marketing system is another breach of contract. Compromising quality is yet another.
Conversely, fulfillment of the contract builds trust in your brand. Trust creates loyalty, which in
itself starts off a process of gaining new customers on a continuous basis.
On the relevance dimension
Market share: This measure lets you have a clear picture of the number of customers or usage
of your brand in comparison with competition.
Purchase frequency: This measure lets you have the number of times your customers buy your
brand. Your objective becomes, "how can I have these customers buy more every time they
Customer satisfaction: This provides a rating on the degree of satisfaction with your brand. It
also shows you how much willing customers are to stick to your brand.
Brand-driven penetration: You use this measure on line and brand extensions. It basically tells
you how many of your existing customers have chosen to buy products and services that are an
extension of your existing brand. It confirms or does not confirm the extendibility of your
brand by giving you a proof of to what extent your customers are willing to go with you on
your extensions. In other words, it is a measure of how rational you are in devising your
product strategies.
Brand Management (MKT624)
Quality perception:  It is a measure of satisfaction with your brand; it shows quality
comparisons with competitors on scales such as
·  High quality vs. shoddy quality
·  Best in the category
·  Consistent quality
Brand-driven customer acquisition: This measure reflects the number of customers that you
have gained in comparison with some preceding period. This could be one year. The difference
between two numbers (if positive) is additional, new customers.
To determine the additional customers is not as difficult as it may sound. If you are selling
consumer durables like TVs, it is pretty much straightforward. The findings can be very
interesting from the standpoint of branding strategies that you have employed.
If you are selling consumables in big quantities, it may be a little more challenging but not
outright impossible. Being the brand and sales managers, you people can draw certain bases of
consumption in relation to population served. You can then ascribe increased consumption to
additional customers based on those bases. The basis of consumption can be per person, per
family of a predetermined number of members to it.
The measure does not end at determining new, additional customers. The challenging part of
the measure is to determine, through the questions to respondents, what drives them to make
buying decisions they make and what is it that is making them leave your brand and for what
reasons? Such findings are the most fascinating part of this measure.
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 (215-220)
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