1 cbm added value %26 brand architecture

8/2/2019 1 CBM Added Value %26 Brand Architecture

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Lecture 1: Added Value and BrandArchitecture Strategies

Dr. Vish [email protected]


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Understand the difference between a brand, a product

and a commodity.

Analyse the term added value and appreciate the

added value provided by a brand for both

organisations and consumers.

Evaluate differing forms of brand architecture

strategies employed by companies.


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Commodity level:

milk, coffee beans, potatoes

Product level:instant coffee, roast coffee, potato crisps

Brand level:

Nescafe, Kenco, Maxwell House, Lavazza, etc.

Costa, Starbucks, Caf Nero, etc.


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Product (includes a service):has functional/tangible benefits

Brand:has emotional/intangible benefits that help to create

differential meaning added to the functional/tangible

benefits


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Branding differentiates one named product from another:

So a brand has an identity and an image that transcends its

product dimensions.

This happens because a brand provides

added valueover and above the actual product.

ImageIdentity

Name, Logo,

Packaging, Colour

Meaning, Perception,

Reassurance


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A brand enhances the overall value of a product in theconsumers mind well beyond its merely functionalpurpose.

(Rosenbaum-Elliott, et.al. 2011)

Added value is a relative concept that enables customers tomake a purchase on the basis ofsuperiority over competingbrands.

(de Chernatony 2006)

A brand (can) addto consumers beneficial experience of aproduct, creating a value for which people are prepared topay.

(Feldwick 2002)


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identification

Practicality

Guarantee

Badge Hedonistic

Optimization

Ethical

Continuity

Kapferer, (2004)


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Elliot & Percy, (2007)

Brand loyalty

Value

Sustainablehigh prices

Competitiveadvantage

Low priceelasticity

Barriers tonew entrants

Less risky product and line

extensions


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Kapferer, (2004) identifies 6 models in the management

of brand-product relationships.

Brand ArchitectureStrategy

Product

Line

Range Endorsing

Umbrella

Source

Mixed


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The assignment of a particular name to one, and only

one, product (or product line) as well as one exclusive

positioning (Kapferer, 2004).

Offensive strategy - aim is to be market leader.

Helps customers perceive a difference between products.

Costly in terms of investment.

Reduces both negative and positive spillover.

Accor Group (hotels): Sofitel, Novotel, Ibis, All Season, etc.

Proctor & Gamble (beauty & grooming): Olay, Head &

Shoulders, Hugo Boss, Herbal Essences, etc.


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Offering one coherent response under a single name by

proposing many complimentary products (Kapferer, 2004).

Allows extending a concept beyond initial product.

Allows for creation of strong brand image.

Reduces distribution and new product costs.

Lynx: male fragrance and grooming products.

Dettol: antibacterial home care products.


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Bestows a single brand name and promotes through a

single promise a range of products belonging to the same

area of competence (Kapferer, 2004).

Communications can focus on a single brand name and

be generic rather than product specific.

New products can be readily incorporated into the brand

structure.

Brand name can be spread too thinly.

Birds Eye: frozen foods.

Green Giant: foods containing sweetcorn.


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The same brand supports several products in different

markets (Kapferer, 2004).

Each product has its own product name but is usually

referred by its brand name.

Allows capitalisation of a single brand name and

economies of scale on a global level.

Awareness and reputation used to enter new markets.

Brand image and value extension.

Canon: printers, cameras, photocopying machines.

Virgin: airline, railway, broadband, cosmetics, etc.


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Identical to the umbrella brand strategy except the

products have their own brand name (Kapferer, 2004).

Products have a brand name instead of a generic product

name, creating a double-brand structure.

Different to endorsement strategy in that the first name is

the strongest.

Appreciation and respect for the second brand name

comes first.

LOreal: Revitalift, Diesel, Giorgio Armani, Garnier, etc.

Kelloggs: All-Bran, Special K, Coco Pops, etc.


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The endorsing brand supports and assumes a secondary

position to the product brand (Kapferer, 2004).

Endorsing brand acts as a guarantor to the product brand.

Allows greater freedom of movement than a source brand.

Each product has its own image and personality.

Less expensive way of raising company profile.

Ford: Fiesta, Focus, Ka, Mondeo, etc.

Apple: iMac, iPod, iPhone.


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The six strategies are models

There are other models: see further reading.

In reality companies adopt mixed approaches.

Examples:

LOreal is a range brand for most cosmetics, a source

brand for most skin care products, and an endorsing brand

for most hair care products.

3M is an umbrella brand for medical adhesives, a source

brand for Post-It and an endorsing brand for Scotch, which

in turn is an umbrella brand for video tapes, glue-sticks

and sellotape.


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Parameters to take into account:

Corporate strategy

The business model

Cultural factors

Pace of innovation

Added value leverage

Resources

The brand vision

(Kapferer, 2004)


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Use recommended textbooks to read about the

concepts discussed in this lecture.

Reading for next weeks seminar:

- Rajagopal and Sanchez, R. (2004). Conceptualanalysis of brand architecture and relationshipswithin product categories. Brand Management, Vol.11, No. 3, pp223-247.


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de Chernatony, L. (2006). From brand vision to brandevaluation: strategically building and sustaining brands.London: Butterworth-Heinemann.

Elliott, R. and Percy, L. (2007). Strategic brand management.Oxford: Oxford University Press.

Feldwick, P. (2002). What is a brand? WARC Monograph,available from www.warc.com [accessed August 2009].

Kapferer, J. (2004). The new strategic brand management.London: Kogan-Page.

Rosenbaum-Elliot, R., Percy, L. and Pervan, S. (2011). StrategicBrand Management, 2nd ed., Oxford, Oxford University Press

1 cbm added value %26 brand architecture

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