Module 10 Flashcards
Branding strategy is critical because it is
the means by which the firm
can help consumers understand its products and services and organize them in their minds
Two important strategic tools that help to characterize and formulate branding strategies by defining various relationships among brands and products:
Brand-Product Matrix
Brand Hierarchy
Brand architecture defines both
brand boundaries and brand complexity.
Which different products should share the same brand name?
How many variations of the brand name should we employ?
Brand Architecture Steps
- Clarify
- –Brand Awareness: Improve customer understanding and communicate similarities and differences between individual products - Motivate
- –Brand Image: Maximize transfer of equity to/from the brand to individual products to improve trial and repeat purchase
The Brand-Product Matrix
Graphical representation of all the brands and products sold by the firm
Breadth of a Branding Strategy
Number and nature of different products linked to the brands sold by a firm
Depth of a Branding Strategy
Optimal product line strategy
The Brand Product Matrix Columns
Columns represent product-brand relationships and capture the brand portfolio strategy in terms of the number and nature of brands to be marketed in each category.
The Brand Product Matrix Rows
Rows of the matrix represent brand-product relationships and capture the brand extension strategy of the firm in terms of the number and nature of products sold under the firm’s different brands.
Product line
A group of products within a product category that are closely related.
Product mix (product assortment)
The set of all product lines and items that a particular seller makes available to buyers.
Brand mix (brand assortment)
The set of all brand lines that a particular seller makes available to buyers.
Breadth of Product Mix
Aggregate market factors
Category factors
Environmental factors
Aggregate market factors
Descriptive characteristics of the market itself.
Category factors
Underlying structural factors affecting the category.
Environmental factors:
External forces unrelated to the product’s customers and competitors that affect marketing strategies
Category Attractiveness Criteria
AGGREGATE MARKET FACTORS
Market size Market growth Stage in product cycle Sales cyclicity Seasonality Profits
Category Attractiveness Criteria
CATEGORY FACTORS
Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivalry Pressures from substitutes Category capacity
Category Attractiveness Criteria
ENVIRONMENTAL FACTORS
Technological Political Economic Regulatory Social
Depth of Product Mix
Once marketers have made their broad decisions concerning product categories and markets in which to compete, they need to choose the optimal product line strategy.
Product line analysis requires a clear understanding of the market and the cost interdependencies between products
Depth of a Branding Strategy Definition
Number and nature of different brands marketed in the product class sold by a firm
Depth of a Branding Strategy Purpose
To pursue different price segments, distribution channels, geographic boundaries, etc.
- Increase shelf presence and retailer dependence in the store
- Attract customers seeking variety who may otherwise switch to another brand
- Increase internal competition within the firm
- Yield economies of scale in advertising, sales, merchandising, and physical distribution
Possible Special Roles of Brands in the Brand Portfolio
- To attract a particular market segment not currently being covered by other brands of the firm
- To serve as a flanker and protect flagship brands
- To serve as a cash cow and be milked for profits
- To serve as a low-end entry-level product to attract new customers to the brand franchise
- To serve as a high-end prestige product to add prestige and credibility to the entire brand portfolio
- To increase shelf presence and retailer dependence in the store
- To attract consumers seeking variety who may otherwise have switched to another brand
- To increase internal competition within the firm
- To yield economies of scale in advertising, sales, merchandising, and physical distribution
Flankers
“Fighter Brands”.
Creates stronger points of parity with competitors’ brands so that more important (and more profitable) flagship brands can retain their positioning (e.g. discount brands).
Cash Cows
Brands kept around despite dwindling sales because they still have enough customers and remain profitable with virtually no marketing support.
Low-End Entry Level or High-End Prestige Brands
Line extension or brand variants in a certain product
category that vary in price and quality.
Low priced brands attract customers to brand franchise. Traffic builders, trade up customers to a higher priced brands.
High priced brand adds prestige and credibility to entire brand portfolio.
Brand Hierarchy
Graphically portrays a firm’s branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products, revealing the explicit ordering of brand elements.
Simplest representation of ‘Brand Elements’ and levels of a “Brand Hierarchy’
- Corporate Brand (General Motors)
- Family Brand (Buick)
- Individual Brand (Park Avenue)
- Modifier: Item or Model (Ultra)
Before considering how the brand hierarchy can help formulate branding strategies, first
examine some of the specific issues in building brand knowledge structures - and thus brand equity - at different levels of the brand hierarchy.
Corporate Image Dimensions
Highlights some of the different types of associations that are likely to be linked to a corporate brand and can potentially affect brand equity
Building Equity at Different Hierarchy Levels
Corporate or Company Brand Level.
Powerful means for firms to express themselves in a way that isn’t tied to their specific products or services. To build this, the company needs to keep a high public profile, especially to influence abstract types of associations.
Building Equity at Different Hierarchy Levels
Family Brand Level
Efficient means to link common associations to multiple, but distinct products.
Building Equity at Different Hierarchy Levels
Individual Brand Level
Restricted to essentially one product category, although multiple product types may differ on the basis of model, package size, flavor, etc.
Building Equity at Different Hierarchy Levels
Modifier Level
Signals refinements or differences in brands related to factors such as quality levels, attributes and functions.
Building Equity at Different Hierarchy Levels
Product Descriptor
Helps consumers understand what the product is and does and also helps to define the relevant competition in consumers’ minds.
An important factor in consumer purchase decision is
the perception of the firm’s role in society. E.g. how a firm treats its employees, shareholders, local neighbor and others.
Corporate brand equity is the differential response by
consumers, customers, employees, other firms or any relevant constituency to the words, actions, communications, products or services provided by an identified brand entity.
A corporate brand is distinct from
a product brand, it can encompass a much wider range of associations.
A corporate brand offers a host of potential marketing advantages, but only if
corporate brand equity is carefully built and nurtured – a challenging task.
Corporate-image associations of innovativeness, expertise & trustworthiness have been shown to
directly influence consumer evaluations.
Family Brand Level
Brands applied across a range of product categories.
An efficient means to link common associations to multiple but distinct products.
Brands applied across a range of product categories.
Family Brand Level is also referred to as
range brands or umbrella brands.
Individual Brand Level
Restricted to essentially one product category.
There may be multiple product types offered on the basis of different models, package sizes, flavors, etc.
Customize the brand for specific customer groups.
If the brand runs into difficulty or fails, the risk to other brands & the company is minimal.
Disadvantages include the difficulty, complexity, and expense of developing separate marketing programs to build sufficient levels of brand equity.
Modifier Level
Signals refinements or differences in the brand related to factors such as quality levels, attributes, functions, etc.
Plays an important organizing role in communicating how different products are within a category that share the same brand name.
A modifier can signal refinements or differences in brands related to
factors such as:
Quality levels
Attributes
Functions
Product Descriptor
Important ingredient for branding strategy.
Helps consumers understands what the product is and also helps to define relevant competition in consumers’ mind.
Corporate Image Dimensions
- Common Product Attributes, Benefits or Attitudes
- People and Relationships
- Values and Programs
- Corporate Credibility
Common Product Attributes, Benefits or Attitudes.
Corporate or company brand may evoke in consumers a strong association to a product attribute, type of user, usage situation, or overall judgment.
People and Relationships.
Corporate image associations may reflect characteristics of the employees of the company. Traits exhibited by employees directly or indirectly have implications for consumers about the products the firm makes or the services it provides.
Values and Programs.
Corporate image associations may reflect values and programs of the company that do not always directly relate to the products it sells.
Corporate Credibility.
Consumers may form more abstract judgments or even feelings about the company, such as perceptions of the personality of a corporate brand.
Corporate Image Dimensions
An Example: L.L. Bean
A brand seen by its customers as highly credible. Outdoors product retailer L.L. Bean attempts to earn consumers’ trust every step of the way – providing prepurchase advice, secure transactions, best-in-class delivery, and easy returns and exchanges.
Founded in 1912, L.L. Bean backs its efforts with a 100-percent satisfaction guarantee as well as its Golden Rule: “Sell good merchandise at a reasonable profit, treat your customers like human beings, and they will always come back for more.”
Now a billion-dollar brand in sales, the company still retains its original image of being passionate about the outdoors with a profound belief in honesty, product quality, and customer service.
There is no uniform agreement on the one type of branding strategy that all firms should adopt for all products…. even within any one firm, marketers may adopt
different branding strategies for different products.
The brand hierarchy may not be symmetric. Corporate objectives, consumer behavior, or competitive activity may sometimes dictate
significant deviations in branding strategy and the way the brand hierarchy is organized for different products or for different markets.
Guidelines For Brand Hierarchy Decisions
- Decide on the number of levels of brand hierarchy
- Decide on the levels of awareness and types of associations to be created at each hierarchy level
- Decide on how to link brand elements from different levels for a product
- Decide on how to link a brand across multiple products
Decide on the number of levels of brand hierarchy
Principle of simplicity: Employ as few levels as possible
Principle of clarity: Logic and relationship of all brand elements employed must be obvious and transparent
Decide on the levels of awareness and types of associations to be created at each hierarchy level
Principle of relevance: Create abstract associations that are relevant across as many individual items as possible
Principle of differentiation: Differentiate individual items and brands
Decide on how to link brand elements from different levels for a product
Principle of prominence: The relative prominence of brand elements affects perceptions of product distance and the type of image created for new products
Decide on how to link a brand across multiple products
Principle of commonality: The more common elements products share, the stronger the linkages
Most firms choose to use more than one level for two main reasons:
Each successive branding level allows the firm to communicate additional, specific information about its products
Developing brands at higher levels of the hierarchy is obviously an economical means of communicating common or shared information and providing synergy across the company’s operations, both internally and externally
The practice of combining an existing brand with a new brand is called
sub-branding because the subordinate brand is a means of modifying the super-ordinate brand.
The principle of simplicity is based on
the need to provide the right amount of branding information to consumers — no more and no less.
Hershey’s Brand Hierarchy Example
Hershey’s chocolate has a traditional, homespun image, as reflected by its 20-plus-year-old advertising slogan, “Hershey’s. The Great American Candy Bar.” The successful Hershey’s Kisses sub-brand led to a further extension, Hershey’s Hugs (a Hershey’s Kiss with an outside layer of white chocolate). Additional flavor extensions included caramel, peanut butter, and dark chocolate fillings.
Achieving the desired level of awareness and strength, favorability, and uniqueness of brand associations may take some time and call for
a considerable change in consumer perceptions.
Two general principles should guide the brand knowledge creation process at each level:
Principle of relevance
Principle of differentiation
Principle of relevance:
Advantages of efficiency and economy. Marketers should create associations that are relevant to as many brands nested at the level below as possible, especially at the corporate or family brand level.
Principle of differentiation:
Disadvantages of redundancy. Marketers should distinguish brands at the same level as much as possible
Although new products and brand extensions are critical to keeping a brand innovative and relevant, marketers must
introduce them thoughtfully.
If we combine multiple brand elements from different levels of the brand hierarchy to brand new products, we must decide
how much emphasis to give each
The prominence of a brand element is its
relative visibility compared with other brand elements
The principle of prominence states that
the relative prominence of the brand elements determines which element becomes the primary one(s) and which becomes the secondary one(s)
A brand endorsement strategy is in operation when
a brand element appears on the package, a signage, or product appearance in some way but is not directly included as part of the brand name.
Gray and Smeltzer define corporate/product relationships as the
approach a firm follows in communicating the relationship of its products to one another and to the corporate entity.
Gray and Smeltzer identified five possible categories:
- Single Entity
- Brand Dominance
- Equal Dominance
- Mixed Dominance
- Corporate Dominance
Single Entity
The company offers one product line or set of services such that the image of the company and the product tend to be one and the same. (Example: FedEx)
Brand Dominance
The company makes a strategic decision not to relate brand and corporate names. (Example: Philip Morris makes little connection to Marlboro)
Equal Dominance
The company maintains separate images for products but also associates each with the corporation. (Example: GM with its different car divisions)
Mixed Dominance
Sometimes the individual product brands are dominant and sometimes the corporate name is dominant, and in some cases, they appear together with equal emphasis. (Example: The German firm Bosch)
Corporate Dominance
The corporate name is supreme and applies across a range of product lines, and communications tend to reinforce the corporate image. (Example: Xerox)
Linking any one brand element to multiple products represents the
“horizontal” aspect of the brand hierarchy.
The principle of commonality states that
the more common brand elements products share, the stronger the linkages between the products.
The simplest way to link products is to use the
brand element “as is” across the different products involve. Adapting the brand, at some
part of it, to make the connection offers additional possibilities.
It’s a good idea to logically order brands in a product line, to
communicate how they are related and to simplify consumer decision
making We can communicate the order though colors (example: American Express).
In developing the optimal brand strategies, marketers must first
define the relevant customer segments.
Marketers must have well-defined brand positioning and equity in terms of
points of parity and points of difference.
Marketers must assess the brand equity implications of the brand architecture in terms of
the transfer (both positive and negative) from the parent brands to individual products, as well as the feedback from the individual products to the parents brands in return.
Brand Architecture Guidelines:
- Adopt a strong customer focus.
- Avoid over-branding.
- Establish rules and conventions and be disciplined.
- Create broad, robust brand platforms.
- Selectively employ sub-brands as a means of complementing and strengthening brands.
- Selectively extend brands to establish new brand equity and enhance existing brand equity.
When a firm moves away for a simple “single brand-single product” branding strategy to adopt more complex branding strategies - perhaps involving
multiple brand extensions, multiple brands, or multiple levels of the hierarchy used to brand any one product — it might need to make certain adjustments in the supporting marketing program.
If the firm is using multiple levels of a branding hierarchy, it may desire different levels of
awareness and image at each level. In particular, in the case of a sub-brand strategy, it may make sense to create a marketing communication campaign at the corporate, company, or family brand levels to complement more product-specific or individual brand marketing communications campaigns.
Corporate image campaigns are designed to create associations to
the corporate brand as a whole, and consequently, tend to ignore or downplay individual products or sub-brands in the process.
A number of different objectives are possible in a corporate brand campaign:
- Build awareness of the company and the nature of its business
- Create favorable attitudes and perceptions of company credibility
- Link beliefs that can be leveraged by product-specific marketing
- Make a favorable impression on the financial community
- Motivate present employees and attract better recruits
- Influence public opinion on issues
Corporate Image Campaigns: Examples of Objectives
- Building Awareness Of the Company And The Nature Of Its Business
- Building Company Trustworthiness And Credibility
- Creating Corporate Image Associations That Can Be Leveraged By Product Specific Marketing
Brand Line Campaigns
Emphasize the breadth of products associated with the brand.
By showing consumers the different uses or benefits of the multiple products offered by a brand, brand line ads may be particularly useful in
building brand awareness, clarifying brand meaning, and suggesting additional usage applications.
Brand line promotions can achieve similar goals.
Brand Line Campaigns Example
Eg: In 2004, General Mills decided to make all its cereals with 100% whole grains and promoted the health benefits of 100% whole-grain cereal on ALL packaging and with an ad campaign. This became a ‘point of difference’ against non-whole grain competitors.
Advantages of Cause Marketing
One reason for the rise in cause marketing is the positive response it elicits from consumers.
Designing Cause Marketing Programs
Although often associated with advertising and promotional activities, it may also be part of product development.
Green Marketing
Concern for the environment is a growing social trend reflected in the attitudes and behavior of both consumers and corporations.
Formally, cause-related (or cause) marketing has been defined as
“the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives”.
Advantages of Cause Marketing
- Building Brand Awareness
- Enhancing Brand Image
- Establishing Brand Credibility
- Evoking Brand Feelings
- Creating A Sense Of Brand Community
- Eliciting Brand Engagement
Advantages of Cause Marketing
Building Brand Awareness
Because of the nature of the brand exposure, corporate societal marketing (CSM) programs can be a means of improving recognition for a brand, although not necessarily recall.
Advantages of Cause Marketing
Enhancing Brand Image
Because most CSM programs do not include much product-related information, we would not expect them to have much impact on more functional, performance-related considerations.
Advantages of Cause Marketing
Establishing Brand Credibility
CSM could affect all three dimensions of credibility, because consumers may think of a firm willing to invest in CSM as caring more about consumers.
Advantages of Cause Marketing
Evoking Brand Feelings
Two categories of brand feelings that seem particularly applicable to CSM are societal approval and self-respect.
Advantages of Cause Marketing
Creating A Sense Of Brand Community
CSM and a well-chosen cause can serve as a rallying point for brand users and a means for them to connect to or share experiences with other consumers or employees of the company itself.
Advantages of Cause Marketing
Eliciting Brand Engagement
Participating in a cause-related activity as part of a CSM program for a brand is certainly a means of eliciting active engagement.
Designing Cause Marketing Programs
Some firms have used cause marketing very strategically
to gain a marketing advantage:
Ben & Jerry’s ‘Rain Forest Crunch’ ice cream and its donation of 7.5% of its pretax profits to various causes.
A danger when designing cause marketing programs is that the
promotional efforts behind a cause marketing program could backfire if cynical consumers question the link between the product and the cause and see the firm as being self-serving and exploitative as a result.
To realize brand equity benefits, firms must
brand their cause marketing efforts in the right manner.
Green Marketing
From a branding perspective, green marketing programs have
not been entirely successful… what obstacles did the green marketing movement encounter?
Issues in Green Marketing
- Overexposure and Lack of Credibility
- Consumer Behavior
- Poor Implementation
- Possible Solutions
Overexposure and Lack of Credibility in Green Marketing
So many companies made environmental claims that the public became skeptical of their validity.
Consumer Behavior in Green Marketing
Like many well-publicized social trends, corporate environmental awareness is often fairly complex in reality and does not always fully match public perceptions.
Poor Implementation in Green Marketing
In jumping on the green marketing bandwagon, many firms did a poor job of implementing their marketing programs.
Possible Solutions in Green Marketing
The environmental movement in Europe and Japan has a longer history and firmer footing than in the United States.
