BRAND STRATEGY

Module code: MBA516SV01

MBA Class
Lectured by : Dr. Nguyen Huu Hao (William)
hao.nguyenhuu@hoasen.edu.vn
Strategic Brand Management: Building,
Measuring, and Managing Brand Equity
Chapter 1

Brands & Brand Management

Fifth Edition, Global Edition
Copyright © 2020 Pearson Education Ltd. All Rights Reserved

2
 Learning Objectives
❑ Define “brand,” state how brand differs from a product, and explain
what brand equity is
❑ Summarize why brands are important
❑ Explain how branding applies to virtually everything
❑ Describe the main branding challenges and opportunities
❑ Identify the steps in the strategic brand management process
What do you think?
History of building brand

❑The ancient Egyptians used

paper plants (papyrus) to make
sales announcements and apply
advertising
 History of building brand

❑More than 4000 years B.C. rock art can be considered one of
the oldest advertising
History of building brand

❑ Modern advertising appeared in

Europe in the 17th century (1630s)
and publicized in America in the 18th
century (1700s).
What is a Brand?
What is a Brand?

Brands
Brand
versus
Elements
Products
 Brand Elements

The key to creating a brand:

• Able to choose a name, logo, symbol, package design, or other
characteristic that identifies a product
• Distinguishes it from other products

Components that identify and differentiate a brand

are brand elements
Five levels of meaning for a product:
• Core benefit level
• Generic product level
• Expected product level
• Augmented product level
• Potential product level

Brands Versus Products

(1 of 3)
❑ A product is anything we can offer to
a market for attention, acquisition, use,
or consumption:
• That might satisfy a need or want
• Physical good like a cereal, tennis
racquet, or car
❑ A brand is more than a product since
it can have dimensions that
differentiate it from other products

Brands Versus Products

(2 of 3)
❑ Differences between a product and
a brand may be:
o Rational and tangible:
• Related to product performance
of the brand
o Or may be more symbolic,
emotional, and intangible:
• Related to what the brand
represents

Brands Versus Products

(3 of 3)
Figure 1-2: Ten Firms Rated Highly in Innovation
Apple
Netflix
Square
Tencent
Amazon
Patagonia
C V S Health
The Washington Post
Spotify Source: Based on Fast Company’s 2018 List of Most Innovative Companies.

NBA
Why Do Consumers
Brands
Matter? Firms
Functions provided by brands to
consumers:
• Identify the source or maker of the
product
• Simplify product decisions
• Lower the search costs for products
internally and externally
• Helps set reasonable expectations
about what consumers may not know
about the brand

Consumers (1 of 3)
Brand can signal product
characteristics and attributes:
• On the basis of attributes
products can be classified as:
• Search goods
• Experience goods
• Credence goods

Consumers (2 of 3)
Brands can reduce risks in product
decision:
o These risk can be categorised as:
• Functional, physical, financial,
social psychological, and time

Consumers (3 of 3)
 Firms
• Brands provide valuable functions to a firm:
• Simplify product handling and tracing
• Help organizing inventory and accounting
records
• Offer the firm legal protection for unique
features or aspects of the product
• Provide predictability and security of demand
for the firm and creates barriers of entry for
competitors
• Provide a powerful means to secure
competitive advantage
 ROLES
That Brands Play
 Consumers
• Identification of source of product
• Assignment of responsibility to product maker
• Risk reducer
• Search cost reducer
• Promise, bond, or pact with maker of product
Figure 1-3: • Symbolic device
Roles That • Signal of quality
Manufacturers
Brands • Means of identification to simplify handling or
Play tracing
• Means of legally protecting unique features
• Signal of quality level to satisfied customers
• Means of endowing products with unique
associations
• Source of competitive advantage
• Source of financial returns
Figure 1-4: Brand Value as a Percentage of Market
Capitalization
Sources: Based on Inter-brand, “Best Global Brands 2010.” Yahoo! Finance, February 11.

Company Brand Value (in Total Value (in Brand Value as a

$ billions) $ billions) Percentage of
Overall Value

Apple 184.1 868.88 21%

Google 141.7 729.1 19%
Microsoft 79.9 659.9 12%
Coca-Cola 69.7 195.5 36%
Amazon 64.7 563.5 11%
Samsung 56.2 300 19%
Toyota 50.3 188.2 27%
Facebook 48.2 420.8 11%
Mercedes 47.8 79.3 60%
IBM 46.8 142 33%
Can Anything Be
Branded?
Can Anything Be Branded? (1 of 2)

Physical
Services
Goods
Can Anything Be Branded?
(2 of 2)
❑ To brand a product, it is necessary to teach
consumers “who” the product is:
• Giving it a name and using other brand
elements to help identify it
• What the product does and why consumers
should care
❑ Marketers must give consumers a label for
the product and provide meaning for the
brand
❑ Marketers can benefit from branding
whenever consumers are in a choice situation
Physical Goods

Physical goods are what are

traditionally associated with brands:
• Mercedes-Benz
• Nescafé
• Sony

Branding has been adopted in a

variety of industries:
• Industrial business-to-business (B2B) products
• Technologically intensive “high-tech” products
Services

❑ Branding a service can be an effective way to signal to

consumers that a firm has designed a particular service
offering that is special and deserving of its name:
• American Express
• British Airways
• Ritz-Carlton
• Merrill Lynch
• Federal Express
 Retailers and
Distributors (1 of 2)
❑ For retailers and other channel members,
brands provide important functions:
• Can generate consumer interest,
patronage, and loyalty
• Create an image and establish positioning
within an industry
• Yield higher price margins, increased
sales volumes, and greater profits
 Retailers and
Distributors (2 of 2)
❑ Retailers can introduce their own brands by:
• Using their store name
• Creating new names
• Some combination of the two
❑ Many distributors, especially in Europe, have
introduced their own brands
❑ Products bearing these store brands or
private label brands offer another way for
retailers to increase customer loyalty and
generate higher margins and profits
Digital Brands
Some of the strongest brands in recent
years have been born online:

• Amazon
• Google
• Facebook
• Twitter

Brand building has become more

important in recent years to online
marketers:
• It is critical to create unique aspects of the brand
• Brand needs to perform satisfactorily as well
 People and Organizations

❑ A product category can be a person or an organization:

o Naming of this branding is usually straightforward
o Usually is accompanied by well-defined images that are easily understood
by consumers
o The key to a person or organization as a brand is that people outside your
industry know who you are and recognize your skills, talents, and attitude:
• Lady Gaga
• The American Red Cross
• Amnesty International
• Sierra Club
 Sports, Arts, and
Entertainment
❑ A special case of marketing people and
organizations as brands exists in the sports,
arts, and entertainment industries:
o Sports marketing has become highly
sophisticated
o Branding plays, for example, has become
an especially valuable function in the arts
o Movies have become famous for their
marketing and branding:
• For years, some of the most valuable
movie franchises have featured recurring
characters and ongoing stories—a classic
application of branding
Geographic Locations

What has contributed to the rise in

place marketing?

• Increased mobility of people

• Increased mobility of businesses
• Growth in tourism

Cities, states, regions, and countries

actively promote through advertising,
direct mail, and other tools
 Numerous ideas and
causes have been
branded:
Ideas and • Especially by nonprofit
organizations
Causes May be captured in a
phrase or slogan or
represented by a symbol:
• Such as AIDS ribbons
 Brands that are the
“strongest” are the brands
What are that are:
the • Best known
• Most highly regarded
Strongest
Maintaining brand relevance
Brands? and differentiation are
important to the success of a
brand
Figure 1-5: Twenty-Five Most
Valuable Global Brands (1 of 2)
2017 Brand Sector Brand Value Change in
Rank Brand Value
1 Apple Technology 184,154$m +3%
2 Google Technology 141,703$m +6%
3 Microsoft Technology 79,999$m +10%
4 Coca-Cola Beverages 69,733$m −5%
5 Amazon Retail 64,796$m +29%
6 Samsung Technology 56,249$m +9%
7 Toyota Automotive 50,291$m −6%
8 Facebook Technology 48,188$m +48%
9 Mercedes Automotive 47,829$m +10%
10 IBM Business Services 46,829$m −11%
11 GE Diversified 44,208$m +3%
12 McDonald’s Restaurants 41,533$m +5%
13 BMW Automotive 41,521$m 0%
14 Disney Media 40,772$m +5%
 Figure 1-5: Twenty-Five Most Sources: Based on Inter-brand, “The
100 Most Valuable Global Brands,”
Valuable Global Brands (2 of 2) 2017.

2017 Brand Sector Brand Value Change in

Rank Brand Value
15 Intel Technology 39,459$m +7%
16 Cisco Technology 31,930$m +3%
17 Oracle Technology 27,466$m +3%
18 Nike Sporting Goods 27,021$m +8%
19 Louis Vuitton Luxury 22,919$m −4%
20 Honda Automotive 22,696$m +3%
21 SAP Technology 22,635$m +6%
22 Pepsi Beverages 20,491$m +1%
23 H&M Apparel 20,488$m −10%
24 Zara Apparel 18,573$m +11%
25 Ikea Retail 18,472$m +4%
 Branding Challenges
and Opportunities
• Unparalleled access to information and new
technologies
• Downward pressure on prices
• Ubiquitous connectivity and the consumer
backlash
• Sharing information and goods
• Unexpected sources of competition
• Disintermediation and reintermediation
• Alternative sources of information about
product quality
• Winner-takes-all markets
• Media transformation
• The importance of customer-centricity
 Technology has created vast
Unparalleled amounts of information
Access to
Information Over time, as technology
becomes more standard, brand
and New marketers may find opportunities:
Technologies • Utilizing innovative features in designing
better brand experiences for their
customers
 ❑

Downward •
Pressure
•
on Prices
•
 ❑

Ubiquitous
Connectivity •
and the
Consumer
Backlash
•
Sharing Information and Goods
❑ Technology has offered two phenomena related to branding:
o Social media platforms:
• While they offer a way for consumer to connect and
communicate their preferences for goods or services,
the platforms face increased scrutiny by regulatory
agencies
• Many of the platforms have traditionally not had to
obtain permissions for use of customer data
o Peer-to-peer sharing:
• Napster, Airbnb, Zipcar
Unexpected ❑

Sources of
•
Competition
•
 Disintermediation and Reintermediation

❑ Disintermediation:
• Reduction or elimination of intermediaries
• The travel industry, for example, has experienced significant
decline in the need for travel agencies:
• Once offered advisory services and helped make bookings in
return for a small fee or commission
❑ Reintermediation:
• Introduction of new intermediaries that perform some of the same
functions or have additional roles in the channel of distribution
• Yelp, online consumer guides (Consumer Reports.com), and
influential bloggers
❑ The Internet offers consumers new
ways to learn about new products and
product quality:
o This has reduced the reliance on
brands as signals on quality
o Brands now have to do more:
• Have to be translators of trends,
acting on information about
changing customer tastes and
desires almost instantaneously

Alternative Sources of
Information about Product
Quality
Winner-Takes-All
Markets
❑ A winner-take-all market is likely to
permeate other industries and
categories outside of sports and
entertainment:
• Brands which are market leaders
within categories are likely to be
chosen at an even greater rate
Media Transformation
The erosion and fragmentation of
traditional advertising media has
coincided with:
• The emergence of interactive and nontraditional
media, promotion, and other communication
alternatives

Marketers are spending more on

nontraditional forms of communication:
• On new and emerging forms of communication
• Social media
• Paid influencers
• Sponsored bloggers
The Importance of
Customer-Centricity
❑ Brand equity can be vulnerable to
destruction if product and service
claims are not verified by actual
experience:
• Review forums
• Reviews from peers
• Online word-of-mouth
❑ Principles of branding and brand equity:
• Differences in outcomes arise from
the “added value” endowed to a
product
• The added value can be created for a
brand in many different ways The Brand
• Brand equity provides a common Equity
denominator for interpreting
marketing strategies and assessing Concept
the value of a brand
• There are many different ways in
which the value of a brand can be
exploited to benefit the firm
 Identifying and Developing Brand Plans

Strategic Designing and Implementing Brand

Marketing Programs
Brand
Management Measuring and Interpreting Brand
Process Performance

Growing and Sustaining Brand Equity

Figure 1-10:
Strategic
Brand
Management
Process
 Choosing Integrating Leveraging

Designing and Choosing Integrating Leveraging

Implementing Brand the Brand Secondary
Brand Elements into Associations
Marketing Marketing
Activities and
Programs the
Supporting
Marketing
Program
Measuring and Interpreting
Brand Performance

•
•
•
Growing and Sustaining
Brand Equity
•
•
•
Strategic Brand Management: Building,
Measuring, and Managing Brand Equity
Lesson 2
Customer-Based Brand Equity
and Brand Positioning
Fifth Edition, Global Edition
Copyright © 2020 Pearson Education Ltd. All Rights Reserved

55
 Learning Objectives
❑ Define customer-based brand equity
❑ Outline the sources and outcomes of customer based brand equity
❑ Identify the four components of brand positioning
❑ Describe the guidelines in developing a good brand positioning
❑ Explain brand mantras and how they should be developed
BRAND EQUITY?
BRAND EQUITY VS FRAUDS
 Customer-Based
Brand Equity
1.Defining Customer-Based Brand Equity
2.Brand Equity as a Bridge

Two questions often arise in brand marketing:

• What makes a brand strong?
• How do you build a strong brand?
 Approaches brand equity from the
perspective of the consumer

Defining
Customer- Stresses that the power of a brand
Based Brand lies in what resides in the minds
and hearts of customers
Equity

Differential effect that brand

knowledge has on consumer
response to the marketing of that
brand
 Improved perceptions of product performance
Greater loyalty
Less vulnerability to competitive marketing actions
Figure 2-1: Less vulnerability to marketing crises
Marketing Larger margins
Advantages More inelastic consumer response to price increases
of Strong More elastic consumer response to price decreases
Brands
Greater trade cooperation and support
Increased marketing communication effectiveness
Possible licensing opportunities
Additional brand extension opportunities
 Brand Equity as a Bridge
❑ Customer knowledge drives the
differences that manifest themselves in
terms of brand equity:
• Provides marketers with a vital
strategic bridge from their past to
their future
• The brand knowledge that marketers
create over time dictates appropriate
and inappropriate future directions for
the brand
❑ From the perspective of the C B B
E concept, brand knowledge is the
key to creating brand equity:
o It creates the differential effect
that drives brand equity
❑ Marketers need an insightful way to
represent how brand knowledge
exists in consumer memory

Making a Brand Strong:

Brand Knowledge (1 of 3)
Making a Brand Strong: Brand Knowledge (2 of 3)

Views memory as a network of

nodes and connecting links:
The associative network memory • Nodes—Represent stored
information or concepts
model:
• Links—Represent the strength
of association between the
nodes

Brand associations are informational nodes linked to the brand

node in memory
Making a Brand Strong: Brand
Knowledge (3 of 3)
❑ Brand knowledge has two components:
o Brand awareness:
• Related to the strength of the brand node or trace in
memory
• Often a step in building brand equity
• Often come into play
o Brand image:
• Consumers’ perceptions about a brand, as reflected by
the brand associations held in consumer memory
Figure 2-2:
Possible
Associations
with the
Apple Brand
Name
Sources of Brand Equity

BRAND AWARENESS BRAND IMAGE

 Brand Awareness (1 of 3)
❑ Brand awareness consists of brand recognition
and brand recall performance:
o Brand recognition:
• Consumer’s ability to confirm prior
exposure to the brand when given the
brand as a cue
o Brand recall:
• Consumers’ ability to retrieve the brand
from memory when given:
• The product category
• The needs fulfilled by the category, or
• A purchase or usage situation as a cue
 Brand Awareness (2 of 3)

❑ Advantages of brand awareness:

o Learning advantages
o Consideration advantages
o Choice advantages:
• Consumer purchase motivation
• Consumer purchase ability
• Consumer purchase opportunity
 Brand Awareness (3 of 3)

❑ Anything that causes consumers to experience

one of a brand’s element can increase familiarity
and awareness of that brand element:
• Name, symbol, logo, character, packaging, or
slogan, including advertising and promotion,
sponsorship and event marketing, publicity and
public relations, and outdoor advertising
❑ Repetition increases recognizability:
• But improving brand recall also requires
linkages in memory to product aspects
 Once a sufficient level of brand
awareness is created:
• Marketers can put more emphasis on
crafting a brand image
Brand Image
Creating a positive brand image:
(1 of 2)
• Takes marketing programs that link
strong, favorable, and unique
associations to the brand in memory

Brand associations may be either

brand attributes or benefits
 Strength of Brand Associations
• More deeply a person thinks about product
information and relates it to existing brand
knowledge, stronger is the resulting brand
association

Brand Image Favorability of Brand Associations

• Is higher when a brand possesses relevant
(2 of 2) attributes and benefits that satisfy
consumer needs and wants
Uniqueness of Brand Associations
• “Unique selling proposition” of the product
• Provides brands with sustainable
competitive advantage
 Basic Concepts

Target Market
Identifying and
Establishing
Brand Positioning
Nature of Competition

Points-of-Parity and Points-

of-Difference
Basic Concepts

❑ Brand positioning:
• Act of designing the company’s
offer and image so that it occupies
a distinct and valued place in the
target customers’ minds
• Finding the proper “location” in the
minds of consumers or market
segment
• Allows consumers to think about a
product or service in the “right”
perspective
Target Market
❑ Market segmentation: Divides the market
into distinct groups of homogeneous
consumers who have similar needs and
consumer behavior
❑ Involves identifying segmentation bases
and criteria:
o Criteria:
• Identifiability
• Size
• Accessibility
• Responsiveness
 Figure 2-3: Consumer Segmentation Bases

Behavioral Demographic Psychographic Geographic

User status Income Values, opinions, and International
Usage rate Age attitudes Regional
Usage occasion Sex Activities and lifestyle

Brand loyalty Race

Benefits sought Family
Figure 2-4: Business-to-Business Segmentation Bases
Nature of Buying Condition Demographic
Good Purchase location S I C code
Kind Who buys Number of employees
Where used Type of buy Number of production workers
Type of buy Annual sales volume
Number of establishments
Figure 2-5: Hypothetical Examples
of Funnel Stages and Transitions
 A competitive analysis
considers an array of factors:
• Resources, capabilities, and likely
intentions of various other firms
• This competitive analysis helps
marketers to choose markets for
Nature of their own products or services
Competition
When choosing a market,
marketers must consider:
• Indirect competition
• Multiple frames reference
 ❑ A marketer must arrive at the proper
positioning:
o This requires establishing the
correct points-of-difference and
points-of-parity associations:
Points of ✓ Points-of-difference (P O Ds):
Parity and • Formally defined as attributes
Points of or benefits that consumers
Difference strongly associate with a brand
✓ Points-of-parity associations:
• Not necessarily unique to the
brand but may be shared with
other brands
 Low price versus high quality

Taste versus low calories

Nutritious versus good tasting

Figure 2-6:
Examples of Efficacious versus mild
Negatively
Correlated Powerful versus safe
Attributes and
Benefits Strong versus refined

Ubiquitous versus exclusive

Varied versus simple

 Defining and Communicating the
Competitive Frame of Reference

Choosing Points-of-Difference

Establishing Points-of-Parity and Points-

of-Difference
Positioning
Guidelines Straddle Positions

Updating Position Overtime

Developing a Good Positioning

 Communicating category
benefits:
• Marketers use product benefits to
announce category membership

Exemplars:
Defining and
Communicating • Well-known, noteworthy brands in a
category can also be used as
the Competitive exemplars to specify a brand’s
Frame of category membership
Reference
Product descriptor:

• Product descriptor that follows a brand

name is often a very compact means
of conveying category origin
 ❑ A brand must offer a compelling and
credible reason for choosing it over
the other options:

Choosing o What attribute or benefit can serve

Points-of- as point-of-difference?
Difference
• Desirability criteria

• Deliverability criteria

• Differentiation criteria
 The key to branding success is
to establish both points-of-parity
and points-of-difference

Establishing At times, an inverse relationship

Points-of-Parity between P O P and P O D may
and Points-of- exist in the minds of consumers:
Difference ❑Approaches to address the problem of
negatively correlated PO Ps and PO Ds
include:
• Separating the attributes
• Leveraging equity of another entity
• Redefining the relationship
 Straddle Positions
❑ Type of positioning where a company is
able to straddle two frames of reference:
• With one set of points-of-difference
and points-of-parity
• The points-of-difference in one
category:
• Become points-of-parity in the other
• And vice-versa for points-of-parity
Example of Straddle Positions
 Generally, positioning should be
fundamentally changed very
infrequently:
Updating • And only when circumstances significantly
reduce the effectiveness of existing P O Ps
Positions and P O Ds

Yet, positioning will evolve to better

over Time reflect market opportunities or
challenges
(1 of 2) P O D or P O P may be refined,
added, or dropped as situations
dictate
 Laddering:

• Deepening the meaning of a brand

to permit further expansion
• Often useful to explore underlying
Updating consumer motivations

Positions Reacting:

over Time • Responding to competitive actions

that threaten an existing positioning
(2 of 2) • Competitive actions are often
directed at eliminating points-of-
difference to make them points-of-
parity:
• Or to strengthen or establish new
points-of-difference
 ❑ A good positioning:
o Has a foot in the present and a foot in the future:
• Needs to be somewhat aspirational so that
the brand has room to grow and improve
o Is careful to identify all relevant points-of-parity:
Developing • Don’t overlook or ignore crucial areas where
a Good the brand is potentially disadvantaged
o Should reflect a consumer point of view in terms
Positioning of the benefits that consumers derive from the
brand
o Recognizes that a duality exists in the
positioning of a brand:
• Rational and emotional components
 Brands may span multiple
product categories and may have
multiple distinct—yet related—
positionings
Defining
a Brand As brands evolve and expand
Mantra across categories:

• Marketers will want to craft a brand

mantra that reflects the essential heart
and soul of the brand
 Short, three-to five-word
Brand phrase:

Mantra • Captures the irrefutable essence

or spirit of the brand positioning

Provides guidance about:

• What products to introduce under

the brand
• What ad campaigns to run
• Where and how the brand should
be sold