study guide (mid-term 1)

8/2/2019 Study Guide (Mid-term 1)

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Strong brands make a connection with people and communicate a distinct advantage Demonstrates the power of emotional elements and benefits that contribute to the strength of

a brand

Why is building a brand hard? Price pressure Abundance of competition Fragmented markets and media consistency hard to maintain and achieve Complex brand strategies sub brands, brand extensions etc Bias towards changing strategies not looking long term Bias against innovation Complacency Short term pressure

What is a brand? TRUST

Interbrand:

Calculates the value of the brand based on what it is likely to earn the company in the future,similar to any other corporate asset

Brand remains a far less volatile asset than other business assets —intangible or tangible Gainers: Innovation, Making an emotional connection, Investing in marketing to launch new

products, Strong value proposition Losers: Not in tune with consumer attitudes/lack of creativity, unclear brand identity/value

proposition, lack of investment and straying from the core

Sales formation models:

Trial repeat (behavioral): predictive and diagnostic tool of sales (marketing mix issues)o Diagnostic and predictive to set marketing prioritieso Market share= Awareness*Trial*Repeat *Distribution (100%)

Diffusion-of-innovations (new products ): theoretical phasing framework to product adoptiono Product market position cycles vary in momentum and market share levels as marketers

and consumers move across a formation curve o Each segment group mandates a change in value proposition early majority not

influenced by same factors as early adopterso Most brands spend most amount of money in trying to jump across the chasm from

early adopters to early majority



Hierarchy-of-effects (attitudinal ): understand how consumers learn to buy your product;diagnostic for share/sales issues

o Diagnostic interpretation of extensive consumer data. Consumers move through a seriesof attitudinal and behavioral phases that impact consumer buying patterns and helpgauge market performance

o Learn (awareness and knowledge)o Feel (attitude and preference)o Do (behavioral)

SOV=SOMo Greater the level of ad and promo spend, the larger the market share o Requires $$$ commitment and long term spend program o Multiple variants: defensive and offensive; niche; extraordinary event; risk level

Marketing models:

Diagnostic tools to aid measurement and/or allow for deductive estimates of marketperformance

o Quantitative and Qualitative No model is 100% definitive, needs human interaction

o Different models may result in different results for the same issue Can help define and/or predict the success or failure of a marketing plan Go much deeper than sales and market share Can result in a predictive model Are indicative of marketing tools needed to improve brand weaknesses Allow for what if analysis

Perception vs. preference

Perception: what a respondent thinks or sees about a product or brand Preference: not only what they think but also what they will actually buy

Consumer perceptions:

Analyze how consumers “see” the bran d relative to competitorso Product positioningo Find new business opportunities

o Evaluate your brand vs. competitiono Is value prop. And positioning benefits clear?

Perceptual Analysis o Profile analysis: Snake plots and Spider maps/image profile

Simple designs: rates brands (averages) by attributes Effective with limited number of brands Rate product/brand by attribute on scale; assumes respondents have uniformity



o Perceptual analysis: Attribute rating method Overall similarity method Pictorial representation of statistical data; software selects attributes that best

differentiates brands

Two types: Attributes: best for examining “hard” attributes not subject to

qualitative bias Similarities: best for examining “soft” attribute products

Better understanding of current position and market structure Test or guess how a new product would be perceived Direct r&d to satisfy needs of consumer as “gaps” in the market appear Limitations: static view; no cost provision for achieving desired position

Does not substitute for management judgment o Lead brand managers in tactical planning and understanding consumer attitudes and

beliefs towards the product (or brand)

The Gold Standard of Marketing o What features at what price

Concept testing: Reaction based, cost effective Data interpretation that meets a norm lies at the heart of the concept-

test technique (intent-to-purchase scale) 80% =definitely +probably

Conjoint analysis Insight based; complex, time consuming (greater predictive reliability)

Measures values of trade-offs and/or options to a given concept Doesn’t just examine reactions to a group of attributes but delves into

what may lie behind a consumer’s response to a concept or set of concepts

Based upon hierarchy of effects modelo Examines a product as a bundle of attributes; acknowledges

that individuals place different levels of value to individualattributes



L’Oreal

Star system; 14 Skus; Plentitude Department store atmosphere in a self-service outlet French ads in English

o Brand positioning reduces agingo No market share in cleansers

Pricing: CVP not communicated clearly technological benefits Think global…act local Consumer Research:

o quantitative survey (perceptualmaps and brand awareness)

o qualitative research(acceptor/rejector focus groups)

o Trial repeat modelo SOV=SOMo Store study group



Brand Identity

What you want your brand to stand for in the minds of consumerso Strong brands make a connection with people and communicate a distinct advantage

Aaker believes that brands need to constantly expand

o Requires internal and external focus Unique set of associations that imply a promise to the consumer Flows from strategic brand analysis

o Organizes around the 12 dimensions grouped under 4 themes: product, person,organization and symbol

o Core and extended identitieso Should establish a CVP: including functional, emotional and self-expressive benefits

Allow for a multi-dimensional brand that can differentiate from its competitors and provide abasis for long term strategic thinking

Uses: direction, purpose and meaning of the brand. Drives the brands overall equity. New products andBrand audits.

Product: associations that describe the brand. Quality. Implies both a use and a user. Country of origin to foster credibility.

Organization: Culture and values. Enduring and resistant to competitive claims.

Person: Brand Personality. Create a relationship between the customer and the brand. Communicate.

Symbol: cohesion and structure. Powerful and memorable. Major strategy factor.

Core:

Timeless essence of the brando Associations that flow with the brand as it matures and expands

Should be change resistant and constant Elements of the core make the brand unique and valuable Frequently aligns with the values of the organization

Extended:

Elements that provide texture and completeness to the brand Helps cement image

o Usually includes brand personality Can be flexible and adaptive



Brand Identity Traps:

Brand Image Trap:o Brand image becomes the brand identity

Occurs as consumers perceptions take primary role within a brand strategy

Tactical focus rather than strategic focus Brand Position Trap:

o The search for an identity becomes the search for a brand positiono POPS. Functional benefits take too large a role and personality, organization and symbol

are pushed aside.o Creative communication overtakes long term message of the brand

External Perspective Trap: o what does the company stand for gets lost internally.o Sell the core values of the company/brand within the organization

Product-Attribute Fixation Trap: o Brand focused solely on product attributes and lack of understanding that often a

product and brand may not be one and the sameo A strong well managed brand encompasses far more than functional attributeso Easy to copy, doesn’t differentiate, and assumes a rational consumer

Function not fashion Confines a brands meaning to a single attribute Limits the ability to respond to change



• What you want your brand to stand for in the minds of consumers.

• Aaker insists there is value in expanding the concept of a brand.

• Aaker’s Brand Identity Planning Model helps ensure the brand identity has texture and depth.

– Core Identity

– Extended Identity

• Brand Identity traps are result in brands being too narrow and conflict with brand identity best practices.

• Brand Identity is a critical link in the Brand Equity chain – aiding brand managers indeveloping the value proposition and personality of the brand.

Customer Value Proposition

A brand’s value proposition is a statement of the functional, emotional, and self-expressivebenefits delivered by the brand that provide value to the customers and creates brand customerrelationships that drive purchase decisions

o Functional: benefit based on product attribute Beware of product attribute trap Ignores non-rational buying motives Price; limits options; Expand the brand as an organization, personality, and symbol

o Emotional: when the brand gives a consumer a positive feeling Adds richness and depth to the brand

o Self-expressive: brand provides a way for a person to communicate his or her self-image

Self-expressive benefits allow a brand to cement a strong consumer connection Closely related to emotional benefits

Aspirational and future oriented are felt by the act of using the product Kopp says: Value is the benefits for the money

o Delivering an unmatchable CVP is the basis for marketing success and brand franchisegrowth. Customers buy brands because of the real value they deliver

o Value=benefits minus cost Benefits build value Costs include both the money spent on the purchase and maintenance, and the

time spent on delays, errors and effort



3 key tools for tracking/auditing CVP o Perceptual Mapso Conjoint Analysis

What a consumer “sees” What are consumer attitudes and trade-offs

o Value maps Preference measure Benefits vs. Price Allows for a clear pictorial based on relative value amongst competitive brands

MS = Awareness * Trial * Repeat * Distribution

SOV = SOM

BI = Brands as: Person + Organization + Symbol + Product

CVP = F + E + SE

Purchase Decision [PD] = Value + Consumer Relationships

Value = Benefits [functional + emotional + self-expressive] – Costs

Value = Benefits / Costs

Brand Essence (Brand Equity) = BI + CVP + BP

Luxury goods: key on emotional response to a better life

Accessible super premium brands: priced near the top, but are “affordable” owning to their relative lowprice category

Old-luxury brand extensions: affordable priced versions of traditional luxury brands which werepreviously only reserved for the rich

Masstige: priced between the gap between mass and class (niche)

Buyers trade up to important categories and down to those that are less important. Death in the middle.

(CVP is out of balance) Mid-priced products/brands yield little or no emotional or self-expressive benefitconnection

Trade up marketing- symbol of the mobile society



Old view:

Only for the very rich where money was not an object; no need to worry about CVP, buyingprimarily for prestige/status

New view:

Entrepreneurs find holes in value map Strong understanding of CVP Propensity to spend Brand power spreads to masses

New luxury leaders:

Never underestimate the consumer Acknowledge the complete benefit ladder- technical, functional and emotional Drive innovation and quality Do not let your product become obsolete Emphasize the few Focus on the core customers and make them a part of the development process Extend the brand- price range and positioning with distinct attribute differences

Enhance the brand at the high end while avoiding diluting at the low end

Bain three “golden rules” to capturing additional growth during industry upswing

Push for organic growth Build a smart cost culture Improve consumer targeting

Brand personality:

A set of human characteristics associated with a given brando Makes the brand memorable

o Method used to blend emotional and self-expressive benefits into CVPo Solidifies brand equity

Sincerity, ruggedness, sophistication, excitement, competence Kopp argues that human like characteristics are too limiting

o Context/cultural relevance meets needs of target consumer o Laddering emotional ladder o User imagery Hierachial value map



o Brand personality is the net of thinking and feeling associations surrounding a brand It is a gestalt=unified concept which is greater than the sum of its parts Thinking based and feeling based= brand personality=mutually supportive and

consistent Attributes benefits values

Self expression model: o For some consumers brands are pathways to express their actual or aspirational

personal identity Brand-Relationship model:

o Brand becomes a friend, can speak to consumer. Brands actions impact a consumersview of that brand.

Functional benefit o The brand image or symbol can cue the products personality which reinforces the

brands benefits o Brand personality insulates the functional benefit from a direct attack; reduces me-too

impact Identity CVP Personality Brand Position Communication (advertising)

Brand Associations:

Product attributes, intangibles, customer benefits, relative price, use/application, user/customer,celebrity, lifestyle/personality, product class, competitors, geography

Ducati Case:

• Pay suppliers & mitigate other operational issues

• Passion of its employees was the “glue”

– Loaner bikes, parking spaces, discounts on products, motorbike school

• Escape the external perspective trap

• Reposition to broaden market

– Women, sport touring segment, older customer (30+), lifestyle product

• Escape the brand image trap

•

Maintain and enhance R & D identity – Hired “new” head of department to lead the on -site team

– Product development cycle time reduced by 58%

– Innovation drove product process

• Desmosedici MotoGP engine



• Escape the Product-Attribute Trap

• Establish a marketing department and strategic plan

Become customer centric

Brand Equity Models Provide measures of a brands current strengths and weaknesses and in some cases is a

predictive tool for future potential an “audit” tool “Big picture” Consumer centric: research driven Long-term focus Embraces non-rational buying motives in decoding how the consumer thinks and behaves



• Performance – market share, share rank, share volatility [Interbrand]

• Consumer Learning – awareness, relevance, associations; considers emotional benefits andimagery along with functional benefits [All models save Interbrand]

• Loyalty – attitudes and predictability [Aaker, Copernicus, Millward-Brown]

• Brand Assets – logo, color, jingle; [Aaker, St. James, Interbrand]

• Authenticity – true to purpose, i.e. is it real , legacy [St. James]

Brand equity:Aaker set of assets and liabilities linked to a brand’s name/symbol that adds the value provided by aproduct or service to a consumer

Brand loyaltyo Combination of awareness, quality, and associationso Reduce marketing costs: cheaper to retain than get new customers

brand awarenesso strategic awareness as opposed to general awarenesso recall (when category or product class is cued) vs. recongnition (keys on past

exposure) graveyard model

brand recongnition is high but recall is low Ultimate awareness

o If not legally protectable it is not an asset and becomes a common label perceived quality



brand associationso driven by brand identity what the brand for in the consumers mind

other brand assetso triggers both recall and recongnition

colour, tagline, logo, packaging

Kopp Model:

Emotional ladder: Features benefits value

B&D: Perceptual map; value map; BE audit Kopp and Aaker; DSS;

A powerful brand position should be believable, unique, clear and compelling; hard to copy,extendable, and have a strong emotional benefit component

Brand Position:

Advantage over competing brands. Followed by execution. Tracking.

BrandPosition

TargetAudience

CreateAdvantag

e

Subset of Identity/Value

Proposition

ActivelyCommunic

ate



Subset of CVPo Should compliment the core identity

Target a specific audience Actively communicate

o Aspirational (but attainable) destination of brand vs perceptions of the brand

Illustrate an advantage Alternatives

o Creative approacheso Symbols and metaphorso Testingo Tracking

Major disconnect between identity and image means you need to focus on positioning

Reasons to reposition a brand:

• Bad, confusing, or nonexistent image (B & D)

• Differentiating benefit has evolved to a cost-of-entry benefit

• New competitor with a better CVP enters your category

• Your organization has acquired a very powerful proprietary advantage that must be workedinto the positioning

Provides ExtensionOptions Improves BrandMemorability

Provides Focus toOrganization

Guides Brand Strategy

Identity andPosition



Strategic Brand analysis:

– Customer Analysis – trends, consumer motivations, segmentation, unmet needs

– Competitor Analysis – relevant strengths and attackable weaknesses

– Self-Analysis – are my brand associations strong or weak; and where

Aaker and Joachimsthaler: provide a brand architecture model that acknowledges that the needs of the business mandates that brands need expand.

Branded house:

Does the MB contribute to the offering by addingo Associations that enhance CVPo Credibility with organizationo Visibilityo Communication

Is The MB strengthened

House of brands:

Is there a compelling need for a separate brand because it willo Create and own an associationo Represent a new offeringo Avoid confusiono Capture a brand bondo Simplify channels

Will the business support a new brand

Creates impact, clarity, synergy, & leverage

House of Brands; each brand has its own driver

Endorsed Brand; endorser plays a minor role

Subbrands; master brand shares the driver role*

Branded House; master brand has the primary driver role

o . Branded House – single master brand w/ descriptive sub-brands where MB is thedriver; e.g. Virgin, Nike, Sony

Driver Role: linked to and reflects the value propositioncommunicated to a consumer

o sub-brand has no true driver role



o If the product speaks to a “ new category” , a new brand is the likely choice

New Brands scream of innovation

Aligns with product breakthroughs – creates stronger associations

Seen as an “offensive strategy”

Brand innovation (must) fills a gap in function or benefit (needed orperceived) from existing brand or product

Requires a “big idea” in a “big category”; or, a “big idea” in a small categorywhere marketing costs can be held down by niche or guerilla marketing

Short leash from retailers – perform or perish; high failure rate

Ample $$$ investment over a lengthy horizon, where patience is required

when viewing ROI 3x more expensive to launch – big bang needed

Brand Extension “+’s” and “ -’s”

o Brand Extensions offer quick, relatively, low-cost options to cover a value/perceptualmap

o Can generate incremental (short term) volume

o Participate in emerging markets

o Offers the Brand Manager a chance to CYA

o Less costly, less risk

o Increase SKU’s

o Confuse consumers

o Frustrate retailers

o May translate to a “me -too” product

o Clouds the CVP of the base product or dilute the base brand

o Forego an opportunity to create a beachhead

o Dilute the image of the base brand

study guide (mid-term 1)

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