2012-Branding Strategies and Brand Extension UPLOAD

Branding Strategies and Brand Extension
Dr.Sanjay Patro
April 26, 2012
Sanjay Patro
Kapferers Brand Identity Prism

Physique Personality
Relationship
Culture
Reflection
(Perceived April 26, 2012Client Type) Sanjay Patro
Self Image
2
De Chernatony-McWilliam Matrix
High Functionality L o w Low
April 26, 2012
High
3
Sanjay Patro Representationality
April 26, 2012
Sanjay Patro
Customer-Based Brand Equity Model
ConsumerBrand Resonance
INTENSE, ACTIVE INTENSE, ACTIVE LOYALTY LOYALTY
Consumer Judgments
Consumer Feelings
RATIONAL & RATIONAL & EMOTIONAL EMOTIONAL REACTIONS REACTIONS
Brand Performance
Brand Imagery
POINTS-OFPOINTS-OFPARITY & PARITY & POINTS-OFPOINTS-OFDIFFERENCE DIFFERENCE
April 26, 2012
Brand Salience
Sanjay Patro
DEEP, BROAD DEEP, BROAD BRAND BRAND AWARENESS 5 AWARENESS
The Brand Iceberg
April 26, 2012
Sanjay Patro
MANAGING THE BRAND PORTFOLIO

Objectives:

Leverage commonalities to generate synergy Reduce damage to brand identity Obtain clarity of product offering Enable change and adaptation Guide resource allocations among brands
Sanjay Patro 7
April Aaker, Building Strong Brands, 1996. Source: 26, 2012
Branding Strategies
Monolithic Approach Endorsement Approach Simple/Individual Approach
April 26, 2012
Sanjay Patro
Sony 2008 Rank: 25 2008 Brand Value (Millions): $13,583
April 26, 2012
Sanjay Patro
April 26, 2012
Sanjay Patro
10
In 2008 the Fusion razor hit $1 billion in sales faster than any other P&G brand. Gillette is expanding its mens care dominance with new hair and body-wash products
April 26, 2012
Sanjay Patro
11
April 26, 2012
Sanjay Patro
12
Major Branding Strategies
April 26, 2012
Sanjay Patro
13
April 26, 2012
Sanjay Patro
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Leveraging of Brands and Brand Extension Management

Dr.Sanjay Patro
April 26, 2012
Sanjay Patro
15
Classic conception of Branding

It does not differentiate the history of the brand from the reality of the brand
Al Ries and Jack Trout on Branding
April 26, 2012
Sanjay Patro
16
Brand Name Strategy

AMAZON Toys R Us
Kodak Free Standing

April 26, 2012 Sanjay Patro
Speed-post
Associative
17
Developing a Brand Extension Strategy

1. Line Extension Strategy
Maximise coverage across offerings Evaluate vertical price tier opportunities
2. Category Extension Strategy

Uncover new products that fulfill brand promise Ensure positive feedback effects Allows to break from the mono-product
Sanjay Patro 18
April 26, 2012
Outcomes of Brand Extensions

Brand Name aids the extension Extension enhances the brand name
Effects of brand extensions Brand Name fails to help extension New brand name is foregone
Sanjay Patro
Brand Name is damaged
April 26, 2012
19
Factors Affecting Brand Extensions

Strength of Parent Brand Brand Loyalty Age of the Brand Brand Knowledge and Awareness Perceived Quality Brand Breadth Intervening Extensions Market Characteristics
Sanjay Patro 20
April 26, 2012
Life cycle of Brands

Brands originate as a new product or service
April 26, 2012
Sanjay Patro
21
Extendability of a Brand
Type of brand
Values Interests
Know-how Formula Product

April 26, 2012 Sanjay Patro 22 Degree of product dissimilarity
Brand DNA
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Sanjay Patro
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April 26, 2012
Sanjay Patro
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Brand Product Matrix Brand Hierarchy

Corporate Brand Range Brand/Family Brand Product-line Brand Product Brand Sub-Brands Modifier Brand
Sanjay Patro 25
April 26, 2012
A strategic brand perspective requires managers to be clear about what role brands play for the company in creating customer value and share-holder value.
April 26, 2012
Sanjay Patro
26
Brand Relationship Spectrum

Four options to brand an acquired or developed offering: 1. A house of brands 2. Endorsed brands 3. Sub brands 4. A Branded house
April 26, 2012 Sanjay Patro 27
Brand Hierarchy Decisions

In creating the hierarchy, it is important to decide:
The number of levels of the hierarchy to use in general How brand elements from different levels of the hierarchy are combined, if at all, for any one particular product How any one brand element is linked, if at all, to multiple products Desired brand awareness and image at each level
Brand Roles
Driver Endorser Flanker Brands Branded Energizers Low end entry or high end prestige Silver Bullets Cash cows
Kissan Annapurna
April 26, 2012
Kissan Annapurna
Sanjay Patro
Annapurna
29
Basic principle of brand portfolios

Maximize coverage Minimize overlap
April 26, 2012
Sanjay Patro
30
April 26, 2012
Sanjay Patro
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April 26, 2012
Sanjay Patro
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Brand Value Chain

BVC is a structured approach to assess the sources and outcomes of brand equity and the manner by which marketing activities create brand value.
April 26, 2012
Sanjay Patro
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Brand Value Chain

Value stages Marketing Program Investment Customer Mindset Market Performance Price Premium Price Elasticity Cost savings Market share Stock Price P/E Ratio Market Capitalization
34
Shareholder Value
Product Communicn Trade Employee.

April 26, 2012
Awareness Associations Attitudes Attachment
Expansion Sanjay Patro Success
Brand Value Chain

Marketing Program Investment
Product Communicn Trade Employee.
Customer Mindset
Market Performance
Price Premium Price Elasticity Cost savings Market share Expansion Success
Shareholder Value
Awareness Associations Attitudes Attachment Activity
Stock Price P/E Ratio Market Capitalization
Multiplier Program Quality

April 26, 2012
Market Conditions
Sanjay Patro
Investor Sentiment
35
Key Role of Line Extensions

To meet the needs of each consumption segmentformat extensions To trade consumers up-vertical consumer extns To increase volume per capita-big foramt vs.small sizes To suppress barriers to consumption among specific targets To extend the share of choices through new varieties
How are brands intersected with the daily life of customers
April 26, 2012
Sanjay Patro
37
What innovations bring to brands

They become the content for communication They become drivers of perceived quality Create new segments to dominate Demonstrate the brands permanent relevance They stimulate behavioural loyalty
Innovation is the life blood of the brand
April 26, 2012
Sanjay Patro
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What brands bring to innovations

They induce trials because they are reassuring They reduce perceived newness They bring their resources, trust ,power and goodwill among distributors They indicate in what directions the innovations to be looked for
What innovations for the brand?

Values Territory Personality Knowhow Attributes
April 26, 2012
Sanjay Patro
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Thank You
April 26, 2012
Sanjay Patro
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Strategic Brand Management

Brand Identity Identity Implementation Brand Strategy Over Time Strategic Brand Analysis Managing the Brand Portfolio
Leveraging the Brand
Brand Equity
Value Chain of a Brand Brands energy must be focused downstream at contact points with customers
April 26, 2012
Sanjay Patro
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Brands and the Time Challenge Changing to survive
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Sanjay Patro
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Innovations should not be in terms of only product features but for better customer experiences Apple stores have become hangout places for young customers Kingfisher benchmarking against Singapore airlines
Measurement of Brand Equity

Dr.Sanjay Patro
April 26, 2012
Sanjay Patro
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Measures of Brand Equity
April 26, 2012
Sanjay Patro
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Nestles acquisition of Rowntree Reckitt & Colemans acquisition of Airwick Rank Hovis Mc Dougal Rupert Murdoch Arvind Garments Will Cadbury acquire Hershey ???
Brands on the balance sheet ??????? A new conception of Brand
April 26, 2012
Sanjay Patro
50
Far better an approximate answer to the right question,which is often vague,than an exact answer to the wrong question, which can always be made precise.
John Tukey,Statistician
April 26, 2012
Sanjay Patro
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Coca-Cola 2008 Rank: 1 2008 Brand Value (Millions): $66,667
April 26, 2012
Sanjay Patro
52
Olympic sponsorship boosted Coca-Colas profile in Asia, where sales are surging. But Coke continued to record sluggish sales in its home market.
April 26, 2012
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Rank- Name 2008 1 Coca Cola 2 IBM 3 Microsoft 4 GE 5 Nokia 6 Toyota 7 Intel 8 McDonalds 9 Disney 10 April 26, 2012 Google
Country US US US US Finland Japan US US US Sanjay Patro US
2008 Brand value in $bn
66.66 59.03 59.00 53.08 35.94 34.05 31.26 31.04 29.25 25.59
54
Samsung 2008 Rank: 21 2008 Brand Value (Millions): $17,689
April 26, 2012
Sanjay Patro
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All Definitions Available on Brand Equity can be Divided into Three Categories Cost Based Methods Price Based Consumer Based
Cost Based Approaches

Valuation by Historical cost Valuation by Replacement Cost Valuation by Market Price Method Discounted Cash Flow Method
Brand Asset Valuator

Differentiation Relevance Esteem Knowledge Brand Strength and Brand Stature
A Two Dimensional Framework for Diagnosing Brands: The Power Grid

BrandAsset Valuator
Brand Strength
Brand Stature
Differentiation
Relevance
Esteem
Knowledge
Leading
Lagging
April 26, 2012
Sanjay Patro
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Brand Equity Ten : David Aaker

Loyalty Measures
Price Premium Satisfaction/loyalty
Perceived Quality/Leadership Measures Associations/Differentiation Measures

Perceived Value Brand Personality 2012 Organizational Associations April 26, Sanjay Patro
60
Awareness Measures
Brand Awareness
Market Behavior Measures

Market Share Price and Distribution Indices
April 26, 2012
Sanjay Patro
61
Brand Equity=Weighted Av. Of Brand Profits*P/E of Industry*Brand Strength
April 26, 2012
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Method of Valuing Brand Strength

FACTORS
Interbrands Approach
MAXM. SCORE
Leadership Stability Market International Trend Support April 26, 2012 Protection
Sanjay Patro
25 15 10 25 10 10 5
63
Multiple measures and methods should be used to assess the multiple outcomes of brand equity.
Brand power in India

CDM
Bonding Advantage Performance Relevance Presence
Source: IMRB U&A Study
Munch
2% 45% 65% 75% 89%
Kit Kat
8% 64% 77% 84% 99%
68% 84% 85% 89% 100%
April 26, 2012
Sanjay Patro
65
Strategic Brand Management Process
STEPS
Identify and Establish Brand Positioning and Values
KEY CONCEPTS
Mental maps Competitive frame of reference Points-of-parity and points-of-difference Core brand values Brand mantra Mixing and matching of brand elements Integrating brand marketing activities Leveraging of secondary associations Brand Value Chain Brand audits Brand tracking Brand equity management system Brand-product matrix Brand portfolios and hierarchies Brand expansion strategies Brand reinforcement and revitalization Sanjay Patro
Plan and Implement Brand Marketing Programs
Measure and Interpret Brand Performance
Grow and Sustain Brand Equity

April 26, 2012
66
Brand Management Challenges*

Internal and external forces create hurdles for product brand managers in their brand building initiatives:
Fragmentation of Markets and Media Complex Brand Strategies and Relationships Bias Against Innovation Pressure to Invest Elsewhere
*David A. Aaker, 2012 Strong Brands, 1996, 26-35. April 26, Building
Intense Price and Other Competitive Pressures
Short-Term Pressures Patro Sanjay
67
Responsibility for Managing Products

Product/Brand Management
Planning, managing, and coordinating the strategy for a specific product or brand
Product Group/Marketing Management

Product director, group manager, or marketing manager
Product Portfolio Management

Chief executive at SBU Team of top executives
1. Market sensing
Marketings Role in Product Strategy
2. Identifying the characteristics and performance features of products 3. Guiding target market and programpositioning strategies
Strategic brand management decisions are relevant to all businesses, including suppliers, producers, wholesalers, distributors, and retailers. April 26, 2012 Sanjay Patro 69
Strategic Brand Analysis

Analyses Product Product Line Portfolio of Product Lines
Market and Customer Competition
Brand(s)
Tracking Product Performance

Set Performance Objectives Select Method(s) for Product Evaluation Identify Problem Products
April 26, 2012
Sanjay Patro
Decide How to Eliminate the Problems
71
Brand Equity
Effective strategic brand management requires that we understand brand equity and evaluate its impact when making brand management decisions: Brand equity is a set of brand assets and liability linked to a brand, its name, and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firms customers.*
April Aaker, Managing Brand Equity, The Free Press, 1991, 15. Sanjay * David A.26, 2012 **Ibid, 102-120. Patro 72
Measuring Brand Equity

. Several measures are needed to capture all relevant aspects of brand equity. loyalty (price premium, satisfaction/loyalty), perceived quality/leadership measures (perceived quality, leadership/popularity), associations/differentiation (perceived value, brand personality, organizational associations), awareness (brand awareness), and market behavior (market share, price and distribution indices). These components provide the basis for developing operational measures of brand equity.
April 26, 2012
Sanjay Patro
73
Strategies for Improving Product Performance

Cost reduction Add new product(s) Product improvement Product line Strategy Alter marketing strategy Eliminate specific product(s)
Product mix strategy
Delete product April 26, 2012 line(s)
Change Sanjay line productPatro priorities
Add new product line(s)
74
Strategies for Brand Strength

Brand-Building Strategies
Developing the brand identification strategy Coordinate identity across the organization
Brand Revitalization
Find new uses for mature brands Add products related to heritage
Strategic Brand Vulnerabilities

Brand equity can be negative Retailer private brands compete with manufacturer brands Major shifts in consumer tastes Competitive actions Sanjay Patro April 26, 2012 75
Product Mix Modifications
Motivation for changing the product mix: Increase the growth rate of the business Offer a more complete range of products to wholesalers and retailers Gain marketing strength and economies in distribution, advertising, and personal selling Leverage an existing brand position Avoid dependence on one product line or April 26, 2012 Sanjay Patro 76 category
Brand Leveraging Strategy

LINE EXTENSION BRAND EXTENSION
Minor variants of a single product are marketed under the same brand name
Extensions of the brand name to other product categories --Similar --Dissimilar
April 26, 2012
Sanjay Patro
77
BRAND LEVERAGING EVALUATION CRITERIA

Brand Relevance/Differentiation Capabilities/Perceived Value Match Market/Segment Opportunity Cannibalization Risks Potential for Core Brand Damage Clarity of Product Offerings Estimated Financial Performance Brand Equity Impact April 26, 2012
Sanjay Patro 78
Failure to fully understand the meaning of the brand. Failure to live up to the brand promise. Failure to adequately support the brand. Failure to be patient with the brand. Failure to adequately control the brand. Failure to properly balance consistency and change with the brand. Failure to understand the complexity of brand equity measurement and management.
*Kevin Lane Keller, Strategic Brand Management, Prentice Hall, 2003, 736.
SEVEN DEADLY SINS OF BRAND MANAGEMENT*
April 26, 2012
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Current Products
New Products
Current Markets
Market Penetration Strategy
Product Development Strategy
New Markets
Market Development Strategy
Diversification Strategy
Ansoffs Product Market Grid

Double Jeopardy Effect

Strong brands grow by penetration and loyalty Major brands have high penetration higher per capita usagehigher loyalty Double Jeopardy effect
April 26, 2012
Sanjay Patro
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Brand image is not equal to brand usage Adoring your brand wont lead to increased brand usage
April 26, 2012
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Segmenting markets by situations to grow the brand

Products are always consumed in specific situations and contexts Here we segment the battlefield not the consumers who move through different situations during the same day
April 26, 2012
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When A Firm Introduces A New Product

1. It can develop a new brand 2. It can use one of its existing brands 3. It can use a combination of a new brand with an existing brand 4. It can join hands with an outsider to take the product forward to the market
We were successful because our goal was to get more people to buy more stuff , more often so that the company can make more money
Sergio Zyman,VP of Cocacola during New Coke launch in 1984
April 26, 2012
Sanjay Patro
85

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Branding Strategies and Brand Extension

April 26, 2012

Kapferers Brand Identity Prism

Sanjay Patro Representationality

April 26, 2012

Customer-Based Brand Equity Model

INTENSE, ACTIVE INTENSE, ACTIVE LOYALTY LOYALTY

RATIONAL & RATIONAL & EMOTIONAL EMOTIONAL REACTIONS REACTIONS

POINTS-OFPOINTS-OFPARITY & PARITY & POINTS-OFPOINTS-OFDIFFERENCE DIFFERENCE

April 26, 2012

DEEP, BROAD DEEP, BROAD BRAND BRAND AWARENESS 5 AWARENESS

The Brand Iceberg

April 26, 2012

MANAGING THE BRAND PORTFOLIO

April Aaker, Building Strong Brands, 1996. Source: 26, 2012

Monolithic Approach Endorsement Approach Simple/Individual Approach

April 26, 2012

Sony 2008 Rank: 25 2008 Brand Value (Millions): $13,583

April 26, 2012

April 26, 2012

April 26, 2012

April 26, 2012

Major Branding Strategies

April 26, 2012

April 26, 2012

Leveraging of Brands and Brand Extension Management

April 26, 2012

Classic conception of Branding

Al Ries and Jack Trout on Branding

April 26, 2012

Brand Name Strategy

Kodak Free Standing

Developing a Brand Extension Strategy

2. Category Extension Strategy

April 26, 2012

Outcomes of Brand Extensions

Brand Name is damaged

April 26, 2012

Factors Affecting Brand Extensions

April 26, 2012

Life cycle of Brands

April 26, 2012

Know-how Formula Product

April 26, 2012

April 26, 2012

Brand Product Matrix Brand Hierarchy

April 26, 2012

April 26, 2012

Brand Relationship Spectrum

Brand Hierarchy Decisions

Basic principle of brand portfolios

April 26, 2012

April 26, 2012

April 26, 2012

Brand Value Chain

April 26, 2012

Brand Value Chain

Product Communicn Trade Employee.

Awareness Associations Attitudes Attachment

Expansion Sanjay Patro Success

Brand Value Chain

Awareness Associations Attitudes Attachment Activity

Stock Price P/E Ratio Market Capitalization

Brand Equity=Weighted Av. Of Brand ProfitsP/E of IndustryBrand Strength