Post on 02-Jun-2018
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CHAPTER 1:BRANDS & BRAND MANAGEMENT
Kevin Lane Keller
Tuck School of Business
Dartmouth College
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What is a brand?
Norse word brandr to burn
For the American Marketing Association (AMA), a brand is aname, term, sign, symbol, or design, or a combination of them,
intended to identifythe goods and services of one seller or groupof sellers and to differentiatethem from those of competition.
These different components of a brand that identify anddifferentiate it are brand elements.
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MARKETING
Create Value to Capture Value
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What is a brand?
Many practicing managers refer to a brand as more than thatas something that has actually created a certain amount ofawareness, reputation, prominence,and so on in the marketplace.
We can make a distinction between the AMA definition of abrand with a small b and the industrys concept of a Brand
with a capital B.
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Brands vs. Products
Aproductis anything we can offer to a market forattention, acquisition, use, or consumption that mightsatisfy a need or want.
Aproductmay be a physical good, a service, a retailoutlet, a person, an organization, a place, or even anidea.
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Five Levels of Meaning for a Product
The core benefit levelis the fundamental need or want thatconsumers satisfy by consuming the product or service. (Food)
Thegeneric product levelis a basic version of the product containingonly those attributes or characteristics absolutely necessary for itsfunctioning but with no distinguishing features. This is basically astripped-down, no-frills version of the product that adequatelyperforms the product function. (Burger)
The expected product levelis a set of attributes or characteristics thatbuyers normally expect and agree to when they purchase aproduct. (Double Cheese)
The augmented product levelincludes additional product attributes,benefits, or related services that distinguish the product fromcompetitors. (fresh, sauces)
Thepotential product levelincludes all the augmentations andtransformations that a product might ultimately undergo in the
future. (Home made)
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Ted Levitt The new competition is not aboutwhat companies produce in their factories butabout what they add in terms of packaging,
services, advertising, customer advice, financing,delivery etc.
A brand is therefore more than a product, as itcan have dimensions that differentiate it in someway from other products designed to satisfy thesame need.
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Some brands create competitive advantages with
product performance; other brands create competitive
advantages through non-product-related means.
John Stuart, CEO of Quaker Oats 1922-56, If this
company were to split up, I would give you the
property, plant and equipment and I would take the
brands and trademarks and I would fare better than
you
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Why do brands matter?
What functions do brands perform that make
them so valuable to marketers?
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Reducing the Risks in Product Decisions
Consumers may perceive many different types of risks in buyingand consuming a product:
Functional riskThe product does not perform up toexpectations.
Physical risk
The product poses a threat to the physical well-being or health of the user or others.
Financial riskThe product is not worth the price paid.
Social riskThe product results in embarrassment from others.
Psychological risk
The product affects the mental well-being ofthe user.
Time riskThe failure of the product results in an opportunitycost of finding another satisfactory product.
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Importance of Brands to Firms
To firms, brands represent enormously valuable
pieces of legal property, capable of influencing
consumer behavior, being bought and sold, and
providing the security of sustained future
revenues.
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Can everything be branded?
Ultimately a brand is something that resides inthe minds of consumers.
The key to branding is that consumers perceive
differences among brands in a product category. Even commodities can be branded:
Coffee (Maxwell House), bath soap (Lux), flour
(Ashraf), beer (Murree Brewery), salt (National),oatmeal (Fauji), pickles (Ahmed), bananas (Chiquita),chickens (K&N), pineapples (Dole), and even water(Nestle)
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An Example of Branding a Commodity
De Beers Group added the phrase A Diamond
Is Forever
Gold ??
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Source of Brands Strength
The real causes of enduring market leadership
are vision and will.Enduring market leaders have a
revolutionary and inspiring vision of the mass
market, and they exhibit an indomitable will torealize that vision. They persist under adversity,
innovate relentlessly, commit financial resources,
and leverage assets to realize their vision.Gerald J. Tellis and Peter N. Golder, First to Market, First to
Fail? Real Causes of Enduring Market Leadership,MIT Sloan
Management Review,1 January 1996
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Importance of Brand Management
The bottom line is that any brandno matter
how strong at one point in timeis vulnerable,
and susceptible to poor brand management.
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Top Ten Global Brands
Brand 2006 ($Billion) 2005 ($ Billion)
1. Coca-Cola
2. Microsoft
3. IBM
4. GE
5. Intel
6. Nokia
7. Toyota
8. Disney
9. McDonalds
10. Mercedes-Benz
67.00
56.93
56.20
48.91
32.32
30.13
27.94
27.85
27.50
21.80
67.53
59.94
53.38
47.00
35.59
26.45
24.84
26.44
26.01
20.00
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The Brand Equity Concept
No common viewpoint on how it should beconceptualized and measured
It stresses the importance of brand role inmarketing strategies.
Brand equity is defined in terms of the marketingeffects uniquely attributable to the brand.
Brand equity relates to the fact that different outcomes result
in the marketing of a product or service because of its brandname, as compared to if the same product or service did not
have that name.Joshua Bell
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Strategic Brand Management
It involves the design and implementation ofmarketing programs and activities to build,
measure, and manage brand equity.
The Strategic Brand Management Processis defined asinvolving four main steps:
1. Identifying and establishing brand positioning and values
2. Planning and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity
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Strategic Brand Management Process
Mental maps
Competitive frame of reference
Points-of-parity and points-of-difference
Core brand values
Brand mantra
Mixing and matching of brand elements
Integrating brand marketing activities
Leveraging of secondary associations
Brand value chain
Brand auditsBrand tracking
Brand equity management system
Brand-product matrix
Brand portfolios and hierarchies
Brand expansion strategies
Brand reinforcement and revitalization
Key ConceptsSteps
Grow and sustain
brand equity
Identify and establish
brand positioning and values
Plan and implement
brand marketing programs
Measure and interpretbrand performance