Branding - Handouts

Table Of Contents

1.Brand:
- The principle of cognitive economy: the brand’s power
How Build a Brand:
Brand Equity:
2.Brand Positioning:
3.Brand Portfolio & Architecture:

1.Brand:

-> DEF: Brand is perceptual entity, rooted in reality (Holt, 2003)

It’s a mark
Different forms: name, logo, symbol, design,or combination of those
Set of associations or known descriptions
Stored in people’s mind
Purpose: to differentiate

-> AMA DEFINITION:

“A brand is a brand name, a term, a symbol, a design or a combination of these, that aims at identifying the products or services of a company, or of a group of companies and at differentiating them from those of competitors”

-> BRAND ROLE:

Identify the product/service;
Quality Image of the product/service;
Quick reference for the customer;
To bring more revenue to the company;
To leverage different products or services;
To reflect personality;
As guarantee for the customers.

The principle of cognitive economy: the brand’s power

PRINCIPLE OF SCARCITY -> Principle of Cognitive Economy:

-> Customers often trade-off accuracy of results and optimal outcomes for efficiency of information storage and processing.

=>In a world of practically infinite choices, consumers gravitate toward a brand or product they trust to deliver on its promises.

-> Hyper-competitive markets

Focus on consumers’ loyalty;
Create a clear and coherent value proposition to be transferred to the market;

-> Effects on the Competitiveness:

“Brand-guided companies outperform their rivals, thus achieving above-industry average results”

(Booz Allen Hamilton, 2005)

“If you are not a brand, you are a commodity. Then prices is everything and the low-cost producers is the only winner”

(Philip Kotler, 2004)

How Build a Brand:

Brand Equity:

-> BENEFITS:

Higher prices, margins: People want Nike => We set higher price. Channel power: Nike is needed by Decathlon! Additional retail shelf space

Reduces customer switching Prevents erosion of market share

-> BRAND MEASURES: Attitudinal Measures

Awareness: the extent to which consumers are familiar with the qualities or image of a particular brand

Recall: tested by asking questions such as “name as many smartphone models as possible”
Recognition: the extent to which a consumer can correctly identify a particular product or service just by viewing the product or service’s logo, tag line, packaging or advertising campaign
Brand Image: the perception of your brand by consumers.

2.Brand Positioning:

-> DEF: Analysis to study the market and communicate a distinctive charachteristics of a mark or product that hilight the advertisement.

-> OBJ:

“Win” through Point Of Difference.
“Even out” the associations in which competitors create a competitive advantage (Point Of Parity);

-> There are two phases:

PHASE 1: Defining a competitive frame:
- Targeting;
- Identify the main competitors;
PHASE 2: Defining points of parity (POP) and points of difference (POD):
- How the company is different to competitors (POD);
- How the company is similar to competitors (POP).

-> Main difference between Burger King & McDonald is on how they cook: Burger king only cook “all piastra”. They cook in a different way.

PHASE 1:

-> Define the competitive frame: playing field and the competition:

Who are your competitors?

Are they the companies that most often pitch for business alongside yours?

Are they the brands that sit beside yours on the shelf?

Are they the offerings that appear near your brand on search-page rank?

=> Instead of asking which brands you consider your competitors, ask which brands the customer considers before making a choice;

=> The list inside the customer’s mind is more relevant and indicative of your true competition than the one prepared by your own analysis.

PHASE 2:

1.Defining points of parity and points of difference: POP

CATEGORY POP	COMPETITIVE POP
-> DEF: Associations and features perceived as necessary for a brand to be an alternative within a category -> E.g.: if a bank does not offer accounts, credit cards, ATM, cheques, etc. it is not considered as a real bank	-> DEF: Associations and features introduced to neutralize competitors’ POD -> E.g.: merchandising in snacks

2.Defining points of parity and points of difference: POD

UPSTREAM POD	DOWNSTREAM POD
-> DEF: Companies seeking a wrinkle to exploit in the upstream tend to home in on advantages such as new products, technologies, features, low-cost sources of supply, and efficient production processes.	-> DEF: Downstream sources of competitive advantages reside in the firm’s knowledge of, and her links with, her customer base and their knowledge of her.

-> E.g. Let’s define POP and POD for a female perfume:

Possible POP	Possible POD
✦ Pleasant flavour ✦ Long lasting flavour ✦ Expression of self personality	✦ Design ✦ Legacy, tradition, myth ✦ Testimonials

-> Building a myth – Chanel n. 5

Coco Chanel asked Ernest Beaux 6 fragrances
These perfumes were labeled No. 1, No. 2, etc. until No. 6
Coco Chanel picked the 5th
“I want to provide women with a synthetic perfume” “I mean synthetic, as a dress, something created. I do not want a rose perfume, I want a composition, a blend” (Gabrielle Chanel)
N°5 was the first perfume to use flower aldehyde top notes

-> POP and POD in 1921:

POP	POD
✦ Pleasant flavour	✦ Revolutionary composition ✦ Long lasting (fixing principles) ✦ Synthetic aldehydes as top note

-> POD & POP in 2010: most 1921 POD have become POP:

Revolutionary composition;
Long lasting (fixing principles);
Synthetic aldehydes as top note.

-> I Chanel N°5 POD in 2012:

Myth
Testimonials
Outstanding artist
Marketing campaigns

3.Brand Portfolio & Architecture:

-> Managing Brand Portfolio.

“Brand portfolio is both owned brands and brands linked through alliances, which are considered as a team of brands working together, each with assigned roles to enable and support business strategies”

(Acker)

-> DEF: Brand architecture is a structure of all brands that a company has. The structure shows relationship between brands and reflects the brand strategy of the company.

-> It defines:

The different “brand groups” within the organization;
The way the corporate brand is related to other brands and how synergies are created among them;

-> MANAGING PORTFOLIO: means

to decide the number of brands
to define each brand role into the portfolio
to define relations among brands

-> Has IMPACT on:

Resources: R&D’s & marketing’s Indentifying the brands to be focused on;
Efficiency: economies of scale & scope;
Growth: defining priorities (markets to be focused on);
Leverage: exploiting the brand extension leverage.

-> Types of brand RELATIONSHIP:

Branded house;
Sub brands;
Endorsed brands;
House of brands.

-> E.g. Armani transforms its brand in a “Lifestyle brand”:

Reinforce image of a lifestyle provider;
Represents designer philosophy in each piece:
- Women’s fashion – Men’s fashion – Children’s fashion – Jewelery – Whatches – Eyewear – Beauty – Home – Services – Others

A)Brand house:

A single identity that encompasses all products (example: Apple, Samsung, Siemens)
Brand strategy implications:
- Advantages: requires fewer resources, minimize misunderstanding, easier alignment;
- Disadvantages: inability to appeal diverse consumer segments, generic brand campaign which might not be memorable, creativity is hindered, consequence of failure is larger.

B)Sub Brands:

-> DEF: a strong brand at a level under the master brand (i.e. a sub brand).

Example: Nike Air Jordan, Lenovo Thinkpad , Fiat 500
Brand strategy implications:
- Advantages: both brands (master and sub brands) give each other recognition and create new associations that can help the market’s understanding of both brands, helps growing market share and shareholder benefits, greater loyalty from distribution partners;
- Disadvantages: complexity and expenses are added to marketing communication, may dilute or confuse master brand, complex distribution strategy, create a single point of attack for competitors.

C)Endorsed Brands:

-> DEF: Independent brand, which is overtly endorsed by a master brand (example: Polo by Ralph Lauren, Novotel by Accor Group, Taillefine by Danon etc)

-> Brand strategy implications:

Advantages: provide credibility for the endorsed brands, endorsed brand benefits from the master brand’s reputation, can break into competitor’s territory;
Disadvantages: can be expensive, too many endorsement may signal weak sub-brands, greater consequences of failure.

D)House of Brands

-> DEF: Multiple strong brands housed in a deemphasized, weak or unknown corporate entity

-> Example: Procter & Gamble, Kao etc