THREE MODELS FOR DEVELOPING AND IMPLEMENTING BRAND PLANS Professor Kevin Lane Keller Tuck School of Business

Dartmouth College

BUILDING STRONG BRANDS

The Concept of Customer-Based Brand Equity

Customer-based brand equity

Differential effect Customer brand knowledge Customer response to brand marketing

Building Customer-Based Brand Equity

The initial choices for the brand elements

Brand name, logo, symbol, character, slogan.

Marketing and other activities and supporting marketing programs

Products, services, communications, channels .

Other associations indirectly transferred to the brand by linking it to some other entities

Other companies, brands, places, people .

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Benefits of Customer-Based Brand Equity

Enjoy greater brand loyalty & be less vulnerable to competitive marketing actions Command larger margins & have more inelastic responses to price increases and elastic responses to price decreases Receive greater trade cooperation & support Increase marketing communication effectiveness Yield licensing opportunities Support brand extensions
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Customer-Based Brand Equity as a Bridge

Customer-based brand equity represents the added value endowed to a product as a result of past investments in the marketing of a brand. Customer-based brand equity provides direction and focus for planning future marketing activities
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Three Tools to Facilitate Brand Planning

Holistic marketing requires careful planning and implementation. To help guide these efforts, three models of increasing scope are presented:
1) brand positioning model describes how to guide integrated
marketing to maximize competitive advantages; 2) brand resonance model describes how to create intense, activity loyalty relationships with customers; and 3) brand value chain model describes how to trace the value creation process to better understand the financial impact of marketing expenditures and investments.

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1. Brand Positioning Model

Kevin Lane Keller, Brian Sternthal, and Alice Tybout (2002), Three Questions You Need to Ask About Your Brand, Harvard Business Review, September, 80 (9), 80-89.

Brand Positioning

Brand positioning is about how we want target

customers to think about a brand with respect to competitors A strong brand positioning helps guide organizational activities by clarifying the brands essence, what the brand helps the customer achieve, and how it is unique in doing so

Everyone in the organization should understand the brand positioning and use it as context for making decisions

Classic Brand Positioning Statement

To ___________________________________________________________________,

(Target Group/Need)
_______________is the brand of __________________________________________.

(Brand)

Frame of Reference (Perceptual)

Competing Mainly With ___________________________________________________

Frame of Reference (Competitive)

that ___________________________________________________________________,

(Relevant Differentiating Benefit)

because ______________________________________________________________.

(Reason To Believe)

The Brand Character is: ___________________________________________________

Amazon.com Positioning
For the young at heart who value an infinite amount of choices, Amazon.com is the virtual cookie jar, competing mainly with all brick and mortar stores, that gives youre the perfect combination of convenience, service, selection and price, because Amazon.com offers a truly global selection of products.

Brand Character: Simple, Friendly, Empowering

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Problems with Classical Positioning Statement

Ignores possibility of multiple points-of-difference

Assumes only 1 key point-of-difference

Ignores need for points-of-parity Doesnt provide forward-looking growth platform

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The Four Components of a Superior Competitive Positioning

Competitive frames of reference

Nature of competition Target market Desirable to consumer Deliverable by the brand Differentiating from competitors Negate competitor points-of-difference Demonstrate category credentials Short 3-to-5 word phrases that capture key PODs & the irrefutable essence or spirit of the brand.
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Develop unique brand points-of-difference (PODs)

Establish shared brand points-of-parity (POPs)

Brand mantras

Coca-Cola Positioning

Competitive frame of reference

Colas? CSD? Non-alcoholic? Distinctive taste profile Optimistic view of life Classic, iconic symbolism & imagery Contemporary, up-to-date Refreshing flavor Coke Side of Life
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Points-of-difference

Points-of-parity

Brand slogan

Identifying & Choosing POPs & PODs

Desirable? (consumer perspective)

Deliverable? (firm perspective)

Personally relevant Believable & credible

Differentiating? (competitive perspective)

Feasible Profitable Pre-emptive, defensible & difficult to attack Distinctive & superior Sustainable

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Identifying & Choosing POPs & PODs

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Principles Reinforced By Miller Lite Launch

Both points-of-parity and points-of-difference are needed to be well-positioned Points-of-parity and points-of-difference are often negatively correlated Points-of-parity are NOT points-of-equality there is a zone or range of indifference or tolerance Points-of-parity may even need to be the focus of marketing communications as the points-of-difference may be a given
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Miller Lite Update

Miller Lite had experienced flagging sales, falling behind both Bud Lite and Coors Lite Management decides to create a powerful new position

Reaffirm core duality and functional benefit of less filling & great tasting Reinforce strong user imagery and emotional appeal as to

uncompromising character

By addressing inherent product trade-offs and linking performance & emotional equities

Sales rise 10% during 2004-2005

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Goal: Attack American Express & Marginalize MasterCard Strategy: Neutralize & Differentiate

Point-of-Difference: Acceptability & Convenience Point-of-Parity: Status, Prestige, & Cachet

Larger merchant network Gold and platinum cards Its Everywhere You Want to Be

Tactics

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Accenture Straddle Positioning Strategy

Accenture is the company that combines:

Strategic insight, vision, and thought leadership Information technology expertise in developing client solutions Points-of parity with its two main competitors, McKinsey & IBM While simultaneously achieving points-of-difference

This strategy permits:

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Strategy & Vision

Accenture Straddle Positioning (WHAT they do)

Technology & Execution

Accenture Straddle Positioning

McKinsey IBM

Strategy & Vision Technology & Execution

POP

POD

POD

POP

Proactive, Agile, & Passionate

Accenture Straddle Positioning (HOW they do it)

Approachable & Collaborative

Accenture Straddle Positioning

McKinsey Proactive, Agile, & Passionate IBM

POP

POD

Approachable & Collaborative

POD

POP

Accenture High Performance. Delivered.

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Accenture High Performance. Delivered.

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Communicating & Establishing POPs & PODs

Create POPs and PODs in the face of attribute & benefit trade-offs

Price & quality Convenience & quality Taste & low calories Efficacy & mildness Power & safety Ubiquity & prestige Comprehensiveness (variety) & simplicity Strength & refinement
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Brand Mantras

Short 3-to-5 word phrases that capture the irrefutable essence or spirit of the brand.
Brand mantra must clearly delineate what the brand is supposed to represent and therefore, at least implicitly, what it is not Brand mantras typically are designed to capture the brands points-of-difference, i.e., what is unique about the brand.

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Brand Mantra Examples

Nike

Authentic Athletic Performance Fun Family Entertainment

Disney

American Express

Worldclass Service, Personal Recognition

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Brand Mantra Criteria

Communicate

A good brand mantra should define the category (or categories) of business for the brand and set the brand boundaries. It should also clarify what is unique about the brand.

Simplify

An effective brand mantra should be memorable. As a result, it should be short, crisp, and vivid in meaning.
Ideally, the brand mantra would also stake out ground that is personally meaningful and relevant to as many employees as possible.
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Inspire

Starbucks Mental Map

sophisticated Seattle wholesome earth colors coffee relaxing consistent convenient/everywhere predatory faddish/trendy snobbish/pretentious

comfortable
treat/reward fresh quality exotic

variety customized expensive

confusing

Starbucks Competitive Positioning

Competitor Fast food chains/ convenience shops POP Convenience Value POD Quality Image Experience Variety Quality Image Experience Variety Freshness Convenience
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Supermarket brands (for home) Local cafe

Convenience Value

Quality Experience Price Community

Starbucks Brand Mantra

Rich, rewarding coffee experience

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STARBUCKS BRAND POSITIONING WORKSHEET

Consumer Target
Discerning Coffee Drinker
Contemporary

Consumer Insight
Coffee and the drinking experience is often unsatisfying

Caring

Thoughtful

Consumer Takeaway
Starbucks gives me the richest possible sensory experience drinking coffee

24 hour training of baristas

Responsible, locally involved

Fairly Priced

Triple Filtrated water

Consumer Need State

Desire for better coffee and a better consumption experience

Relaxing, rewarding moments

Brand Mantra
Rich, Rewarding Coffee Experience Fresh high quality coffee Varied, exotic Convenient, coffee drinks friendly service

Totally integrated system

Rich sensory consumption experience

Green & Earth Colors

Siren logo

Competitive Product Set

Local cafes Fast food & convenience shops

Some Positioning Guidelines

1. A good positioning has
A foot in the present & A foot in the future

2.

Evaluate POP & PODs according to:

Desirable (consumer) Deliverable (company) Differentiating (competition)

3.

Identify crucial POPs

Role play competitors positioning Surface & resolve potential consumer trade-offs

4.

Ensure duality

Assess negative correlations & decision-making styles

Rational (Head) Emotional (Heart)

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2. Brand Resonance Model

Kevin Lane Keller (2001), Building Customer-Based Brand Equity: A Blueprint for Creating Strong Brands, Marketing Management, July/August, 15-19.

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Create Brand Resonance with Customers

Challenge is to ensure customers have the right types of experiences to create the right brand knowledge Building a strong brand involves a series of steps as part of a branding ladder A strong brand is also characterized by a logically constructed set of brand building blocks.

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BRAND RESONANCE PYRAMID

Stages of Brand Development Building Blocks Branding Objective at Each Stage
Intense, Active Loyalty

RELATIONSHIPS: What about you & me?

Resonance

RESPONSE: What about you?

Judgments

Feelings

Positive, Accessible Reactions

MEANING: What are you? Performance

Points-of-Parity & Difference

Imagery

IDENTITY: Who are you?

Salience

Deep, Broad Brand Awareness

Brand Resonance Pyramid Terminology

Salience

Depth and breadth of brand awareness

Recognition and recall at purchase and consumption

Performance

What the brand does to meet customers' more functional needs.

Brand performance refers to the intrinsic properties of the brand in terms of inherent product benefits.

Imagery

How people think about a brand abstractly rather than what they think the brand actually physically does.

Brand imagery is thus more extrinsic properties of the brand.

Four important intangible dimensions are:

Type of user Brand personality History & heritage Experiences

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Brand Resonance Pyramid Terminology

Judgments

Customers overall brand evaluations

How customers combine performance and imagery associations to form different kinds of brand opinions

Feelings

Customers emotional responses and reactions to the brand

Can be mild or intense; positive or negative; or experiential or enduring in nature. Can also relate to the social currency evoked by the brand.
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Dimensions of Brand Feelings

Brand feelings can be divided into two broad categories: Experiential immediate, short-lived during purchase/consumption Enduring private, possibly part of day-to-day life Brands should have one, or ideally both, types of feelings

Experiential Feelings Warm

Increasing level of intensity

Enduring Feelings Sense of Security (Inner-directed)

Fun
Exciting

Social Approval (Outer-directed)

Self-Respect (Actualization)
Self-Respect Sense of Security Social Approval Inner-Directed Outer-Directed
Higher level of values & needs

Brand Resonance Pyramid Terminology

Resonance

The extent to which customers feel that they are in synch with the brand

Intensity or depth of the psychological bond that customers have with the brand Level of activity engendered by this loyalty

Repeat purchase rates The extent to which customers seek out brand information, events, or other loyal customers Etc.

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Sub-Dimensions of Brand Resonance Pyramid

RESONANCE LOYALTY ATTACHMENT COMMUNITY ENGAGEMENT

JUDGMENTS QUALITY CREDIBILITY CONSIDERATION SUPERIORITY

FEELINGS WARMTH FUN EXCITEMENT SECURITY SOCIAL APPROVAL SELF-RESPECT

PERFORMANCE PRIMARY CHARACTERISTICS & SECONDARY FEATURES PRODUCT RELIABILITY, DURABILITY & SERVICEABILITY SERVICE EFFECTIVENESS, EFFICIENCY, & EMPATHY STYLE AND DESIGN PRICE

IMAGERY USER PROFILES PURCHASE & USAGE SITUATIONS PERSONALITY & VALUES HISTORY, HERITAGE, & EXPERIENCES

SALIENCE CATEGORY IDENTIFICATION NEEDS SATISFIED

Brand Resonance Model: Brand Building Implications

1. Customers own brands 2. Dont take shortcuts with brands 3. Brands should have a duality
Performance & imagery Judgments & feelings

4. Brand should have a richness 5. Brand resonance provides important focus

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3. Brand Value Chain Model

Kevin Lane Keller and Don Lehmann (2003), How Do Brands Create Value, Marketing Management, May/June, 26-31.

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Brand Value Chain

Marketing Program Investment

- Product - Communications - Trade - Employees - Other

Customer Mindset

Market Performance

Shareholder Value

- Awareness - Associations - Attitudes - Attachment - Activity

- Price premiums - Price elasticities - Cost savings - Expansion success - Market share - Profitability

- Stock price - P/E ratio - Enterprise value - Market capitalization

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Brand Value Chain

Marketing VALUE Program STAGES Investment
- Product - Communications - Trade - Employee - Other

Customer Mindset
- Awareness - Associations - Attitudes - Attachment - Activity

Market Performance
- Price premiums - Price elasticities - Market share - Expansion success - Cost savings - Profitability

Shareholder Value
- Stock price - P/E ratio - Market capitalization

MULTIPLIERS

Program Quality
- Relevance - Distinctiveness - Consistency - Cohesiveness

Marketplace Conditions

Investor Sentiment

- Competitive reactions - Market dynamics - Channel support - Growth potential - Customer size and profile - Risk profile - Brand contribution

Conclusions

Three helpful brand planning models are:

Competitive brand positioning model

Brand resonance model

Points-of-parity & points-of-difference

Brand Value Chain

Six building blocks: Salience, Performance, Imagery, Judgments, Feelings, & Resonance Value stages & multipliers

These models can be used

Qualitatively to guide & interpret possible marketing actions Quantitatively to measure marketing effects
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Thank You!

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