Professional Documents
Culture Documents
Chap 009
Chap 009
PIERCY
8/e
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
9-2
Chapter Nine
Strategic Brand
Management
STRATEGIC BRAND
MANAGEMENT
Challenges in Building
Strong Brands
Strategic Brand Analysis
Managing
Products/Brands
Managing the Brand
Portfolio
9-4
CHALLENGES IN
BUILDING STRONG
BRANDS
A product is anything
that is potentially valued
by a target market for
the benefits or
satisfaction it provides,
including objects,
services, organizations,
places, people, and
ideas
9-5
Strategic Role of
A strategicBrands
brand perspective
requires managers to be clear
about what role brands play for
the company in creating customer
value and share-holder value.
FOR BUYERS, BRANDS CAN:
• reduce customer search costs by
identifying products quickly and
accurately,
• reduce the buyer’s perceived risk by
providing an assurance of quality and
consistency (which may then be
transferred to new products),
• reduce the social and psychological
risks associated with owning and
using
the “wrong” product by providing
psychological rewards for purchasing
brands that symbolize status and
prestige.
9-7
FOR SELLERS, BRANDS CAN
FACILITATE:
• repeat purchases that enhance the
company’s financial performance
because
the brand enables the customer to
identify
and re-identify the product compared to
alternatives,
• the introduction of new products,
because
the customer is familiar with the brand
from previous buying experience,
• promotional effectiveness by providing
a
point of focus,
• premium pricing by creating a basic
level of
differentiation compared to
competitors,
• market segmentation by
communicating
Source: a No. 97422, 1997
Marketing Science Institute Report
Brand Management
Challenges*
Internal and external forces
create hurdles for product brand
managers in their brand building
initiatives:
Intense Price and Other
Competitive Pressures
Short-Term Pressures
*David A. Aaker, Building Strong Brands, 1996, 26-35.
Res ponsi bil ity for 9-9
Managi ng
Products
Product/Brand Management
Planning, managing, and
coordinating the strategy for a
specific product or brand
Product Group/Marketing
Management
Product director, group
manager, or marketing manager
Product Portfolio
Management
Chief executive at SBU
Team of top executives
9-10
Marketing’s Role in
Product Strategy
1.Market sensing
2.Identifying the
characteristics and
performance features of
products
3.Guiding target market
and program-
positioning strategies
Strategic brand management
decisions are relevant to all
businesses, including
suppliers, producers,
wholesalers, distributors,
and retailers.
9-11
Strategic Brand
Management
Brand
Identity
Brand
Identity Equity
Implementation
Brand
Strategy
Over Time
Strategi
c Brand
Analysis Managing the
Brand Portfolio
Leveraging the
Brand
9-12
Strategic Brand
Analysis
□ Market and
Customer
□ Competition
□ Brand(s)
9-13
Tr ack in g Pr od uct
Perfor ma nce
Set Performance
Objectives
Identify
Problem
Products
Decide How to
Eliminate the
Problems
9-14
Financial Product
analysis grid analysis
Analyzing
Brand
Performanc
e
Brand
Research Positioning
studies maps
Standardized
information
services
9-15
Prod uct L if e
Cy cle An alys is
Relevant issues in PLC
analysis include:
Determining the length and
rate of change of the PLC
Identifying the current PLC
stage and selecting the
product strategy that
corresponds to that stage
Anticipating threats and
finding opportunities for
altering and extending the
PLC
9-16
Brand Equity
Effective strategic brand management requires
that we understand brand equity and evaluate
its impact when making brand management
decisions:
“Brand equity is a set of brand assets
and liability linked to a brand, its name,
and symbol, that add to or subtract
from the value provided by a product or
service to a firm and/or to that firm’s
customers.*
Measuring Brand Equity. Several measures
are needed to capture all relevant aspects of
brand equity.**
• loyalty (price premium, satisfaction/loyalty),
• perceived quality/leadership measures
(perceived
quality, leadership/popularity),
• associations/differentiation (perceived value,
brand
personality, organizational associations),
• awareness (brand awareness), and
• market behavior (market share, price and
distribution
* David indices).
A. Aaker, Managing Brand Equity, The Free Press, 1991, 15.
**Ibid, 102-120.
These components provide the basis for
9-18
BRAND IDENTITY
STRATEGIES
Brand identity is a unique set
of brand associations that the
brand strategist aspires to
create or maintain. These
associations represent what
the brand stands for and imply
a promise to customers from
the organization members.*
Specific
Product
Line
Private of
Branding Products
Basis
of
Identification
Combination Company
Basis Name
9-20
MANAGING
PRODUCTS/BRANDS
Building the
Product/Brand Over
Time
Product Line
Strategies
Product/Brand
Portfolio Strategies
St rat eg ies for
9-21
Strategi es for
Brand Str ength
Brand-Building Strategies
– Developing the brand identification
strategy
– Coordinate identity across the
organization
Brand Revitalization
– Find new uses for mature brands
– Add products related to heritage
Strategic Brand Vulnerabilities
– Brand equity can be negative
– Retailer private brands compete with
manufacturer brands
– Major shifts in consumer tastes
– Competitive actions
– Unexpected events
9-23
Produ ct Mix
Modif ica tio ns
Motivation for changing the
product mix:
Increase the growth rate of the
business
Offer a more complete range of
economies in distribution,
advertising, and personal
selling
Leverage an existing brand
position
Avoid dependence on one
Brand Leveraging
Strategy
BRAND Extensions of
the brand
EXTENSIO name to other
N product
categories
--Similar
--Dissimilar
9-25
Leveraging
Alternatives
LINE BRAND
EXTENSIONS EXTENSIONS
BRAND LEVERAGING
EVALUATION
CRITERIA
Brand
Relevance/Differentiation
Capabilities/Perceived Value
Match
Market/Segment Opportunity
Cannibalization Risks
Potential for Core Brand
Damage
Clarity of Product Offerings
Estimated Financial
Performance
9-27
GLOBA L
BRAN DS
International markets:
strategic branding
challenges
Global brands supported by
increasingly cosmopolitan
consumers in many
countries
Don’t build global brands but
strive for global brand
leadership
Challenge for MNCs:
managing brand systems
containing global, regional,
and local brands
9-30
HOW MANY
BRANDS?
1. Is it different
enough to merit a
new name?
2. Will the brand
identity add value?
3. Are there risks in
using an existing
brand name?
4. Is the new brand a
viable business
venture?