Perspectives on Brand Management

1. Perspectives on Brand Management - Prof. Hitesh A. Patel

2. “Don’t criticize someone unless you have walked in their shoes for a day”.

3. Remember… • Branding is not rocket science. In fact, it is an art and a science. • In a practical sense, brand equity is the added value a product accrues as a result of past investments in the marketing activity for the brand. • One of the most valuable assets is the brand names associated with the products/services. • A strong brand simplifies consumer decision making, reduce risk and set expectations. • For a typical FMCG company, net tangible assets may be as little as 10% of the total value. Most of the value lies in intangible assets/goodwill, and as much as 70% of intangible assets can be supplied by brands.

4. Objectives.. • To explore the important issues in planning, implementing and evaluating brand strategies. • To provide appropriate concepts, theories, models and other tools to make better branding decisions.

5. What is a brand? • American Marketing Association defines brand as “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” • Many practicing managers refer to a brand as more than that – as something that has actually created amount of awareness, reputation, prominence in the market place. • Brand name strategies: use one name for all products or individual brand names • Brand names comes in many forms: names based on people, places, animals/birds, words with inherent product meanings, scientific connotations

6. Brands Vs. Products • A product is anything we can offer to a market for attention, acquisition, use/ consumption that might satisfy a need or want. • A brand is more than a product, because it can have dimensions that differentiate it in some way from other products. The difference can be rational/tangible or emotional/intangible.

7. Why do brands matter? • Consumers: • Identification of sources of product • Assigns responsibility to product maker • Reduces risks • Reduces search cost • Bond with maker of the product • Symbolic device • Signal of quality • Manufacturers: • Means of identification to simplify handling/tracing • Legal protection • Signal of quality level to satisfied customers • Creates unique associations • Source of competitive advantage • Sources of financial returns Products are classified based on their associated attributes/benefits into 3 categories: • Search goods: consumers can evaluate product attributes by visual inspection. • Experience goods: experience is necessary for product evaluation. • Credence goods: product attributes are generally not learned by the consumer.

8. Can everything be branded? • Ultimately a brand is something that resides in the minds of consumers. • To brand a product it is necessary to teach consumers ‘who’ the product is – by giving it a name and using other brand elements to help identify it – as well as what the product does and why consumers should care. • The key to branding is that consumers perceive differences among brands in a product category. • A commodity is a product so basic that it can not be physically differentiated in the minds of consumers. Strong brands have emerged in this category, like; coffee, salt, water, bath soap • Virtually anything can be branded: physical goods, services, retail stores, online businesses, people, organizations, places and ideas • It is critical to create unique aspects of the brand on some dimension important to consumers, such as convenience, price, variety, and so on. At the same time, the brand needs to perform satisfactorily in other areas, such as customer service, credibility and personality.

9. Branding challenges and opportunities • Any brand – no matter how strong at one point of time – is vulnerable and susceptible to poor brand management. • Consulting firm Brand Keys has found that consumer expectations of what they want from brands are on average 13% higher than what they think brands will deliver for them, and the gap is growing. • Brand proliferation • Media fragmentation, cost, clutter, technology • Increased competition: demand side competition has increased because of many products/services reaching maturity/decline stage of PLC and supply side competition has increased because of globalization, low-priced competitors, brand extensions and deregulation • Increased costs: By 2000, an estimated 30,000 new consume products were introduced in the US market, at a failure rate estimated at 93%. Given the enormous money spent on developing and marketing a new product, the total failure cost is estimated to exceed $20 billion. • Greater accountability: ambitious short-term profit targets because of financial market pressures • Rapid job turnover, as one study founds the average tenure of a CMO is only 23 months.

10. Factors determining enduring brand leadership • Vision of the mass market • Managerial persistence • Financial commitment • Relentless innovation • Asset leverage

11. The brand equity concept • One of the most popular and potentially important marketing concepts to arise in the 1980s was brand equity. • Fundamentally, the brand equity concept reinforces how important the brand is in marketing strategies. • Branding is all about differences from value-addition to a product as a result of past marketing activity • Value can be created for a brand in many different ways • Brand equity provides a common denominator for interpreting marketing strategies

12. Strategic brand management process • Involves the design and implementation of marketing programs and activities to build, measure, and manage brand equity. • Four main steps: • Identifying and establishing brand positioning • Planning and implementing brand marketing programs • Measuring and interpreting brand performance • Growing and sustaining brand equity • Brand positioning can be defined as the ‘act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s mind. • Building brand equity requires creating a brand that consumers are sufficiently aware of and with which they have strong, favorable and unique brand associations.

13. 96% of dissatisfied customers don’t complain. • On an average, a customer tells 9-10 people about a problem. • 65% of customers leave because of poor service and inattention. • A 5% increase in customer retention can increase your profits significantly. • It is 4 times more expensive to acquire a new customer than to retain an existing one. Source: Market Research from Business Today, 2007

14. Five deadly sins for a brand • Arrogance • Greed • Complacency • Inconsistency • Myopia

15. 12 brand mantras for the mind • To build a big brand, adopt a short brand name • Don’t let jazzy research replace common sense • Use benefit segmentation to build brands • Sample to sell ample • Don’t hesitate to communicate. Communication mix: personal selling/ public relations/ direct marketing/ event management/ relationship marketing/ perception management/ sales promotions/ advertisement • Like salt, use advertisement in the right proportions • Jo dikhta hai, who bikta hai • Brand images are fragile, handle with care • Your consumer’s needs come first. It is important to identify the specific needs of the customer. • Identify the specific needs of the customer. • It is important to develop and design an appropriate product/ service to meet that demand. • Ensure customer satisfaction. • Look for making profits

16. 10. Don’t under-price yourself. 11. Brands must make profits, not only noise. brand accountability module (six elements) • Awareness • Trials • Repeats • Volume growth • Market share growth • Profits growth 12. Focus on consumption rather than purchase. Look at the long-term benefits of marketing and let not your vision be clouded by short-term sales goals

17. Brand mantras for the heart • Be humble or you will tumble • Build relationships to build brands • Respect your retailers • Avoid generality to give your brand a personality • Nurture your brand as you would a child • Service is the first step to a great brand. For higher volume growth, more profit and greater market share, you must first win over the customer to your side. • Remember, consumers look for perceived value in brands • Don’t sell the right product to the wrong audience • Pay need to consumer emotions • Don’t prejudge your consumer • Respect the local consumer • Be honest, don’t con. In brand building, honesty means being able to put forward the facts in a pleasant manner.

18. Principles of Successful Brand Experience • Reduce uncertainty • Make it easy for the customers • Make the customer feel special

19. Thank you!!