Keller_SBM3_01 Brand and BM

8/10/2019 Keller_SBM3_01 Brand and BM

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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

Keller_SBM3_01 Brand and BM

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