Brands – underlying logic

1. Brands – underlying logic

2. Brands – underlying logic • Differentiation • Introduction of a meaningful relevant (to customer) differences in the offering • Set offering your offering apart from competitors’ • Differentiation=Physical & Image=Brand

3. Differentiation - Physical • Vary design dimensions • Performance – enhancing or limiting, better working • Features & technology – options and functions ; technology advances; over engineering • Reliability & Durability – works over time, repeated use, dependability; stands up to hard use • Conformance – does what it is supposed to do (incidence of defects); fit and finish • Serviceability/repairability – ease and speed of maintenance and repair • Appearance – aesthetic appeal; visual presentation, etc. • Safety – in use, protection of user, etc. • Service • Reliability – dependability • Assurance – knowledgeability, expertise • Performance – doing what customers need; relative to competitors • Responsiveness- speed, responsibility, sensitivity • Other • “Value” position- cost versus benefits/attributes/features • Transaction costs – convenience and ease • Revolves around quality to no small extent

4. Differentiation - Image • Brand concept & positioning concept • What the product will “mean” to customers • Unified frameworks for developing product’s identity in the market • Set up, establish, and link expectations and positive affect • Brand architectures - organization of firm’s brands; where and how brands fit in the firm’s portfolio • Articulation of physical differences simultaneously with construction and vigorous articulation of associated psychological differences • Brand Mantra may be useful – 3-5 word phrase that captures the brand spirit, essence, core brand promise (“heart and soul” “what would Tommy do?”) • Branding and positioning • Relative to competitor - head-to-head or stand alone • Implemented via the marketing mix • Product attributes and presentation, communication, pricing, distribution • Consistency - Communication main mechanism; distribution and pricing must be consistent – strong supporting role in implementation of position • Brand Integrity – how solid and crystalized; focused the brand image • Brand is behaved – externally and internally • Reliability and trust • Where you go and what you do with it in the future – how you compromise it, build it, leverage it • The association with your firm – feedback effects – good or not so good

5. Brand: Function & Role from the Customer’s perspective • Informs – core and peripheral benefits and value • Evokes and establishes associations – positive expectations, affect, trust • Identifies maker or source – associations and feedback effects • Because of information and associations – risk reduction, shopping and search tasks reduction, quality signaled • Heuristic for the customer - Brand is a short-cut, powerful processing and decision-making aid the customer • Customer comes to rely on it • Automatic default in purchase situation

6. Strategic Issues in Branding • Selecting a brand • Some rules may be helpful: memorable, meaningful, etc • Important issue – adaptable (e.g., Betty Crocker; Aunt Jemima; Coke) • Important issue – must be able to protect it (carve out distinct ownership in consumer psyche, also legal protection) • Important issue – versatility to facilitate growth opportunities; should be transferable to different product items, lines, etc. • There really are no rules. Often a matter of luck and how it is done. • Approaches: functional, invented, experiential, evocative, emotional, nostalgic, amusement • Consistency with brand & positioning concept is the main issue here

7. Strategic Issues in Branding • Selecting a brand • Some rules may be helpful: memorable, meaningful, etc. • Important issue – adaptability (e.g., Betty Crocker; Aunt Jemima; Coke) • Important issue – must be able to protect it (carve out distinct ownership in consumer psyche, also legal protection) • Important issue – versatility to facilitate growth opportunities; should be transferable to different product items, lines, etc. • There really are no rules. Often a matter of luck and how it is done. • Approaches: functional, invented, experiential, evocative, emotional, nostalgic, amusement • Consistency with brand & positioning concept is the main issue here

8. Adaptability of Brand Iconography

9. Strategic Issues in Branding – Brand Architectures • The structure or organization of Brands in a firm’s portfolio • Are they all connected/associated? • Some associated? • None associated? • Can break out hierarchically • Monolithic approach – Company name used on all products (Hershey candy) • Endorsed approach • Sub-brand – linked to firm with some visual or verbal cue (Kodak and Kodachrome ) • Modifier (Letters, Numbers, Benefits) but some elements linked back to firm (BMW330IE) • Family brands – not identified with the firm but grouped by/with associated products with consistent positioning - Healthy Choice by ConAgra • Freestanding – stand alone brands - Multi branding strategies (Proctor and Gamble) • Brand architectures may be “uninterpretable” at firm level • Spin off and acquisition of brands • Decisions on when and how to associate brands made on more fine grained level (for product line, for new products vs existing, by geographic market)

10. Strategic Issues in Branding -Brands for growth & Feedback Effects • Established brands provide platform for growth; provide platform for introducing other additional brands • Where can you take this brand? Where should you let this brand go? • Leveraging brands • Product line extension • Different product classes (how different?) • Brand extension (within product class) • Vertical-within product class, new item configurations • Horizontal-within product class but complementary • Flanker brands • Following later, low cost, penetration focus • Co-branding: brand-alliances, ingredient branding • Customized brands – usually involve a brand configuration for a specific intermediary • Feedback - Dilution, positive feedback, negative feedback

11. Strategic issues in branding • Developing a brand vs managing a brand • Brand Development • Expectations & Associations not in place • Blank slate • Relevance and execution • The relevance of the concept – Understand what you are saying to customers and what resonates with them • Stay in touch with customer response to make sure brand representation and communication is happening as you intend • Check and back check with research) • Brand Management • Expectations & Associations – in place • Maintenance – Strong healthy brands need resource injection intermittently • Changes • Strengthen or build • Correct associations - pretty tough to change once in place

12. Other Strategic Issues • Brand loyalty • Highly desired outcome of Branding and positioning • Brand loyalty – customers will choose you over others • Brand loyalty = customer loyalty (?) • Customer equity, customer retention, CLV directly related • Brand communities – users and patrons start developing a subculture associated with brand usage

13. Brand Equity… What is it? Firm perspective (customer perspective later) • Financial valuation of brand • Acknowledgement and treatments of brands as ON balance sheet asset • Assets and liabilities connected to the brand/product • Value beyond same unbranded product • Calculate by Comparing net present value of future cash flows for branded product with net present value of future cash flows over same time with equivalent but unbranded product • Value to the firm resulting from successful effective branding/positioning of products • Successfully purveying of differential effects as reflected in customer's response to the brand establishes the brand as a financial asset • Valuation not resolved but that is the case for other things as well

14. Advantages of Brand Equity • Less vulnerability to competitive actions • Less vulnerable to marketing crises • Commands a premium price - higher margins • Demand elasticity less of a problem • Trade cooperation & support - control & leverage • Increased marketing effectiveness • Actual marketing costs decrease over time • Possible licensing opportunities • Platform for extension and new product launches