Strategic brand management is a process of
combining the design and implementation of marketing activities and programs to
build, measure, and manage brands to maximize their value and strengthen
customer loyalty. It involves: identifying and establishing brand
positioning, planning and implementing brand marketing, measuring and
interpreting brand performance, and growing and sustaining brand value.
A brand is a name, term, sign, symbol, or
design, or a combination of them, intended to identify the goods or services of
one seller or group of sellers and to differentiate them from those of
competitors. It adds dimensions that
differentiate offerings from other offerings, which are designed to satisfy the
same need. These differences may be
related to the product performance of the brand (functional rational, or
tangible) or to what the brand represents (symbolic, emotional, or intangible).
Brands have several roles. They identify the source or maker of a
product and allow consumers to assign responsibility for its performance to a
particular manufacturer or distributor.
They perform valuable functions for firms, such as simplifying product
handling or tracing, assisting in organizing inventory and accounting records,
and offering the firm legal protection for unique features of the product. They also show brand loyalty because
satisfied buyers will choose that product over and over.
Branding is providing products and services
with the power of a brand. It creates
mental structures that help consumers organize their knowledge about the
offering in a way that clarifies their decision-making and provides value to
the firm. In order for branding
strategies to be successful and brand value to be created, consumers must be
convinced there are meaningful differences between a company’s brands. A brand may be a physical good, a service, a
store, a person, a place, an organization, or an idea.
Brand equity is defined as the added value placed
on products and services. It may be
reflected in the way consumers think, feel, and act with respect to the brand,
as well as in the prices, market share, and profitability the brand
commands. Customer-based brand equity is
the differential effect brand knowledge has on consumer response to that
brand’s marketing. Three key ingredients
of customer-based brand equity exist: (1)
Brand equity arises from differences in consumer response, and if no
differences occur, the brand-name product is essentially a commodity and
competition will probably be based on price.
(2) Differences in response are a result of consumer’s brand knowledge
(all the thoughts, feelings, images, experiences, and beliefs associated with
the brand) and this dictates appropriate future directions for the brand. Brands must create strong and favorable brand
associations with customers. (3) Brand
equity is reflected in perceptions, preferences, and behavior related to all
aspects of the brand’s marketing. Different
perspectives on branding are shown by various brand equity models. These include the BrandAsset Valuator, the
BrandZ, and the Brand Resonance Model.
Building brand equity by marketers is creating
the right brand knowledge structures with the right consumers. From a marketing management perspective,
there are three main sets of brand equity drivers. One driver to build brand equity is the
initial choices for the brand elements or identities making up the brand, such
as brand names, URLs, logo, symbols, characters, spokespeople, slogans,
jingles, packages, and signage. Brand
elements are the trademarkable devices that identify and differentiate the
brand. Six criteria for choosing brand
elements are that it is memorable, meaningful, and likable (for building the
brand) and transferable, adaptable, and protectable (for defending the brand). Another driver for building brand equity is
the product and service and all accompanying marketing activities and
supporting marketing programs. This
includes advertising, personal observation and use, word of mouth interactions
with employees online or telephone experiences, and payment transactions. A third driver for building brand equity are
the secondary associations which are indirectly transferred to the brand by
linking it to some other entity (a person, place, or thing).
Marketers must adopt an internal perspective to
be sure employees and marketing partners appreciate and understand basic
branding notions and how they can help or hurt brand equity. Internal branding are the activities and
processes that help inform and inspire employees. Brand communities are a specialized community
of consumers and employees whose identification and activities focus around the
brand.
Brand equity can be measured with an indirect
approach or a direct approach. An
indirect approach assesses potential sources of brand equity by identifying and
tracking consumer brand knowledge structures.
A direct approach assesses the actual impact of brand knowledge on
consumer response to different marketing aspects. Brand auditing is a consumer-focused series
of procedures to assess the health of the brand, uncover its sources of brand
equity, and suggest ways to improve and leverage its equity. Brand tracking shows where, how much, and in
what ways brand value is being created to facilitate marketing decision-making. Brand valuation is the job of estimating the
total financial value of the brand.
A firm’s short-term marketing action (changing
brand knowledge) can increase or decrease the long-term success of future
marketing actions. By constantly
conveying the brand’s meaning marketers can reinforce brand equity. Also, any new development in the marketing
environment can affect a brand’s fortunes.
Brand revitalization of almost any kind starts with the product.
A branding strategy reflects the number and
nature of both common and distinctive brand elements. A firm has three main choices when deciding
how to brand new products: develop new
brand elements for the new product, apply some of its existing brand elements,
or use a combination of new and existing brand elements. A firm must choose which brand names to use
if they decide to brand their offerings.
Three approaches are used when a firm decides to brand its offerings. One approach is should it be individual or
separate family brand names. This is
referred to as a “house of brands” strategy.
Another is should it be a corporate umbrella or a company brand
name. This has been referred to as a
“branded house” strategy. A third
approach is should it be a sub-brand name.
This falls somewhere between the other two strategies depending on which
component of the sub-brand receives more emphasis.
A brand portfolio is a set of all brands and
brand lines a particular firm offers for sale in a particular category or
market segment. The main idea is to
maximize market coverage so no potential customers are being ignored, but
minimize brand overlap so brands are not competing for customer approval. Brands play specific roles as part of a
portfolio. These include flankers, which
are positioned with respect to competitors’ brands so that more important and
profitable flagship brands can retain their desired positioning; cash cows,
which are brands that can be retained despite dwindling sales because they
remain profitable with virtually no marketing support; low-end entry level,
which are used to attract customers to the brand franchise then they are able
to “trade up” to a higher-priced brand; and high-end prestige, which is a
relatively high-priced brand that can add prestige and credibility to the entire
portfolio.
Brand extension is using an established brand to
launch a new product. It has advantages,
such as improving the odds of new-product success and providing feedback
benefits. Disadvantages of brand
extensions include brand dilution, which occurs when consumers no longer
associate a brand with a specific product or highly similar set of products and
start thinking less of the brand; failure and harm to the parent brand of an
extension; and consumers switching brands if the extension had not been
introduced. Marketers must take all
consumers’ brand knowledge structures into account and not focus on one or a
few brand associations as a potential basis of fit.
Customer equity is an important marketing
concept of brand equity. Both perspectives
share many common themes, such as emphasizing the importance of customer
loyalty and the concept that value is created by having as many customers as
possible pay as high a price as possible.
Brands serve as the “bait” that firms use to attract customers from whom
they extract value.
Example:
Zumba, a Latin-inspired dance-fitness class, was introduced in the
United States in 2001 by Alberto “Beto” Perez.
It has grown by leaps and bounds.
It started off with a few instructors teaching it in the Florida area
and now is all over the world. A few
years back they decided to introduce their own line of fitness clothing and for
instructors to wear. Not only was it
fashionable, but it was functional as well.
Now that Zumba is so popular in the fitness world, not only are
instructors wearing their line, but the students are as well. These instructors and students are loyal to
the program and to the clothing. As
proof is in the numbers (more than 12 million people regularly take Zumba
classes) this craze shows it is definitely a strong brand.
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