Module 10 Flashcards
Branding strategy is critical because it is
the means by which the firm
can help consumers understand its products and services and organize them in their minds
Two important strategic tools that help to characterize and formulate branding strategies by defining various relationships among brands and products:
Brand-Product Matrix
Brand Hierarchy
Brand architecture defines both
brand boundaries and brand complexity.
Which different products should share the same brand name?
How many variations of the brand name should we employ?
Brand Architecture Steps
- Clarify
- –Brand Awareness: Improve customer understanding and communicate similarities and differences between individual products - Motivate
- –Brand Image: Maximize transfer of equity to/from the brand to individual products to improve trial and repeat purchase
The Brand-Product Matrix
Graphical representation of all the brands and products sold by the firm
Breadth of a Branding Strategy
Number and nature of different products linked to the brands sold by a firm
Depth of a Branding Strategy
Optimal product line strategy
The Brand Product Matrix Columns
Columns represent product-brand relationships and capture the brand portfolio strategy in terms of the number and nature of brands to be marketed in each category.
The Brand Product Matrix Rows
Rows of the matrix represent brand-product relationships and capture the brand extension strategy of the firm in terms of the number and nature of products sold under the firm’s different brands.
Product line
A group of products within a product category that are closely related.
Product mix (product assortment)
The set of all product lines and items that a particular seller makes available to buyers.
Brand mix (brand assortment)
The set of all brand lines that a particular seller makes available to buyers.
Breadth of Product Mix
Aggregate market factors
Category factors
Environmental factors
Aggregate market factors
Descriptive characteristics of the market itself.
Category factors
Underlying structural factors affecting the category.
Environmental factors:
External forces unrelated to the product’s customers and competitors that affect marketing strategies
Category Attractiveness Criteria
AGGREGATE MARKET FACTORS
Market size Market growth Stage in product cycle Sales cyclicity Seasonality Profits
Category Attractiveness Criteria
CATEGORY FACTORS
Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivalry Pressures from substitutes Category capacity
Category Attractiveness Criteria
ENVIRONMENTAL FACTORS
Technological Political Economic Regulatory Social
Depth of Product Mix
Once marketers have made their broad decisions concerning product categories and markets in which to compete, they need to choose the optimal product line strategy.
Product line analysis requires a clear understanding of the market and the cost interdependencies between products
Depth of a Branding Strategy Definition
Number and nature of different brands marketed in the product class sold by a firm
Depth of a Branding Strategy Purpose
To pursue different price segments, distribution channels, geographic boundaries, etc.
- Increase shelf presence and retailer dependence in the store
- Attract customers seeking variety who may otherwise switch to another brand
- Increase internal competition within the firm
- Yield economies of scale in advertising, sales, merchandising, and physical distribution
Possible Special Roles of Brands in the Brand Portfolio
- To attract a particular market segment not currently being covered by other brands of the firm
- To serve as a flanker and protect flagship brands
- To serve as a cash cow and be milked for profits
- To serve as a low-end entry-level product to attract new customers to the brand franchise
- To serve as a high-end prestige product to add prestige and credibility to the entire brand portfolio
- To increase shelf presence and retailer dependence in the store
- To attract consumers seeking variety who may otherwise have switched to another brand
- To increase internal competition within the firm
- To yield economies of scale in advertising, sales, merchandising, and physical distribution
Flankers
“Fighter Brands”.
Creates stronger points of parity with competitors’ brands so that more important (and more profitable) flagship brands can retain their positioning (e.g. discount brands).
Cash Cows
Brands kept around despite dwindling sales because they still have enough customers and remain profitable with virtually no marketing support.
Low-End Entry Level or High-End Prestige Brands
Line extension or brand variants in a certain product
category that vary in price and quality.
Low priced brands attract customers to brand franchise. Traffic builders, trade up customers to a higher priced brands.
High priced brand adds prestige and credibility to entire brand portfolio.
Brand Hierarchy
Graphically portrays a firm’s branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products, revealing the explicit ordering of brand elements.
Simplest representation of ‘Brand Elements’ and levels of a “Brand Hierarchy’
- Corporate Brand (General Motors)
- Family Brand (Buick)
- Individual Brand (Park Avenue)
- Modifier: Item or Model (Ultra)
Before considering how the brand hierarchy can help formulate branding strategies, first
examine some of the specific issues in building brand knowledge structures - and thus brand equity - at different levels of the brand hierarchy.
Corporate Image Dimensions
Highlights some of the different types of associations that are likely to be linked to a corporate brand and can potentially affect brand equity
Building Equity at Different Hierarchy Levels
Corporate or Company Brand Level.
Powerful means for firms to express themselves in a way that isn’t tied to their specific products or services. To build this, the company needs to keep a high public profile, especially to influence abstract types of associations.
Building Equity at Different Hierarchy Levels
Family Brand Level
Efficient means to link common associations to multiple, but distinct products.
Building Equity at Different Hierarchy Levels
Individual Brand Level
Restricted to essentially one product category, although multiple product types may differ on the basis of model, package size, flavor, etc.
Building Equity at Different Hierarchy Levels
Modifier Level
Signals refinements or differences in brands related to factors such as quality levels, attributes and functions.
Building Equity at Different Hierarchy Levels
Product Descriptor
Helps consumers understand what the product is and does and also helps to define the relevant competition in consumers’ minds.
An important factor in consumer purchase decision is
the perception of the firm’s role in society. E.g. how a firm treats its employees, shareholders, local neighbor and others.
Corporate brand equity is the differential response by
consumers, customers, employees, other firms or any relevant constituency to the words, actions, communications, products or services provided by an identified brand entity.
A corporate brand is distinct from
a product brand, it can encompass a much wider range of associations.
A corporate brand offers a host of potential marketing advantages, but only if
corporate brand equity is carefully built and nurtured – a challenging task.
Corporate-image associations of innovativeness, expertise & trustworthiness have been shown to
directly influence consumer evaluations.
Family Brand Level
Brands applied across a range of product categories.
An efficient means to link common associations to multiple but distinct products.
Brands applied across a range of product categories.
Family Brand Level is also referred to as
range brands or umbrella brands.
Individual Brand Level
Restricted to essentially one product category.
There may be multiple product types offered on the basis of different models, package sizes, flavors, etc.
Customize the brand for specific customer groups.
If the brand runs into difficulty or fails, the risk to other brands & the company is minimal.
Disadvantages include the difficulty, complexity, and expense of developing separate marketing programs to build sufficient levels of brand equity.
Modifier Level
Signals refinements or differences in the brand related to factors such as quality levels, attributes, functions, etc.
Plays an important organizing role in communicating how different products are within a category that share the same brand name.
A modifier can signal refinements or differences in brands related to
factors such as:
Quality levels
Attributes
Functions
Product Descriptor
Important ingredient for branding strategy.
Helps consumers understands what the product is and also helps to define relevant competition in consumers’ mind.
