Marketing Lecture 6 PDF

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Marketing lecture 6 summary and notes: brand management

1. What is a brand?

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“generally, a brand is understood as a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers” “the brand is the only sustainable source of competitive advantage” B2B brands (e.g., Hilti)  own Hilti stores, brand assets (colour red), touchpoints (online) “brands are mental images in the heads of the stakeholder groups that take on an identification and differentiation function and shape choice behaviour”

What happens to brands in a more abundant society?

2. Brand equity 

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What is brand equity (1/2)?  Example Renault: does it stop to exist …  When all employees are fired  When all factories and offices are destroyed  When all of their products are destroyed, and they stop producing cars “brand equity exists in consumers’ minds and is the differences in consumer responses to a specific brand’s marketing mix (4Ps) vs. no brand or another brand”

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Benefits of brand equity:  Be perceived and produce different interpretations of product performance  Enjoy greater loyalty and be less vulnerable to competitive marketing actions  Command larger margins and have more inelastic responses to price increases  Receive greater trade cooperation and support  Increase marketing communication effectiveness  Yield licensing opportunities

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Example with white non-branded white t-shirt vs. branded white t-shirt

How to define brand equity?

Case study: Nivea Brand Equity Tracking USA  Despite strong sales growth (short and mid-term performance), Nivea lacks behind on brand awareness in the US  Olay, Dove and Neutrogena US heritage brands Brand association: Electric cars  Party on beach  Fantasy and family  Diesel scandal  Sustainability  Performance athletic shoes  

Tesla Tulum Disney VW Patagonia Asics, Nike, On Running

Brands are intangible assets  can show up on balance sheets

3. Brand identity  

Brand identity and brand image are not always aligned Brand identity (self-perception of the internal target group) vs. brand image (external image of the external target group)

The brand identity prism

Example: brand identity prism for Nike:

4. Brand portfolio and brand architecture 

How to organize different brands within one company?

Overview: brand architecture:

Umbrella brand / Branded house:    

Single master brand One name – one visual system Features / benefits of product or service are less important than brand promise Consumers trust the brand

Sub-brands:  

Sub-brands are brands connected to a master brand that argument or modify the associations of the master brand The link between sub-brands and the master brand is closer than between endorsers and endorsed brands

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Sub-brands use certain elements of the parent brand Example Gillette  Gillette Mach 3, Gillette Venus, Gillette Sensor Excel Example Migros  SportXX, Micasa, Melectronics, OBI, Do It Garden

Endorsed brands:     

Brands are independent. However, they are endorsed by another brand, usually by the corporate brand Although these sub-brands are obviously distinctly different, the each retain an association with the endorser parent brand through visual reference (i.e., the parent brand mark) This architecture strategy leverages the brand equity, reputation, and credibility of the parent brand while enjoying independent positioning, visual identity, personality and messaging 3 different forms: strong endorsement, token endorsement, linked name Example: 3M  Post-It, Scotch

Competing goals of the brand architecture design:

Branded house: advantages vs. disadvantages:

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Advantages Efficiency: one marketing strategy and one brand code for every offering Ease: confusion and competition are avoided by keeping every offering under one brand Evolution: a strong brand can lead to greater success for future offerings and new products, as consumers are more willing to accept change from brands they already trust

House of brands: advantages vs. disadvantages:

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Disadvantages Reputation: products and services are tied to your brand’s public perception, leading some consumers to take and all or nothing approach Limitations: a great product does not mean great success if the parent brand is weak or underperforming Ambiguity: confusion over what your brand does (e.g., Apple: is it a computer company? A music store? A phone manufacturer?)

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Advantages Shield: in the case of bad press, the  individual brand can take the heat while keeping the company’s reputation secure Safety net: companies can take more risks with new offerings, knowing they  have strong and reliable brands to fall back on if necessary Reach: a greater ability to define unique target audiences and create products that  broaden a brand’s demographic reach (segmentation)

Disadvantages Overwhelming: creating and implementing multiple marketing strategies and operating many individual service lines is difficult and costly Isolation: there is not as much power behind the parent company, so it cannot be relied upon to bolster the reputation of individual brands Image: various sub-brands might cause confusion over the brand image of the parent brand

Why do some brands launch new offerings as own brands and others don’t?   

Rügenwalder Mühle uses the same brand for vegan and non-vegan products. Philipp Morris created a new brand for electric cigarettes. Zürcher Kantonalbank created a new Brand for its investment app....