Strategic Brand

STRATEGIC BRAND MANAGEMENT - CHAPTER ONE Kevin Lane Keller

What is a Brand? • American Marketing Association’s definition: A brand is a name, term, sign, symbol, or design which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Practicing managers defines brands as more than that What distinguishes a brand froma commodity gives it equity - the sum total of consumer perceptions and feelings about how it performs (3M, Sony, Gillette) Brand Elements are attributes that identify the brand

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Brand versus Product • Product is anything that can be offered to a market for attention, acquisition, use or consumption that may satisfy a need or a want (goods, services, retail store, person, organization,idea) 5 levels of a product 1. Core benefit level fundamental need or want that is satisfied 2. Generic product level basic version attributes necessary for functioning (stripped down level) 3. Expected product level what customer s normally expect 4. Augmented product level additional attributes, benefits that distinguish it from competition 5. Potential product level all transformation that itmight undergo in the future • A Brand is therefore a Product that also has dimensions that differentiates it from other products designed to satisfy the same need (competition)

• Differences may be: - Rational and tangible related to product performance (3M, Sony, Gillette) - Symbolic, emotional, intangible related to what the brand represents (Coca Cola, Calvin Kline, Marlboro)www.notesolution.com

New Concept of Brand Equity (BE) • • BE relates to marketing effects that are uniquely attributable to the brand BE relates to the fact that different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name.

• BE concept in marketing: stresses the importance of the brand in marketingstrategies. • Branding is about creating differences: - in outcome - arise from added value endowed to a product as a result of past marketing activities for the brand - This value can be created for a brand in many ways - Brand value can be exploited to benefit of the firm in many different ways - provides the common denominator for interpreting marketing strategies and assessing the value of thebrand

Why Brands Matters? • Brand Value created translates to financial profits for the firm as: - Creates perceived differences through branding - Develops a loyal consumer franchise - The brand is an intangible valued asset that needs to be handled carefully. • Customers: - Risk reducer - Search cost reducer - Signal of quality - Symbolic device for self expression - Promise, bond, pact, withmaker of the product - Means of identification of source of product for assignment of responsibility to product maker Manufacturer: - Means of identification for handling, tracing - Signal of quality level to satisfied customers - Competitive advantage - Financial return - Legal protection of unique features

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Brands take on a special meaning and change the experience and perception ofa product that leads to greater satisfaction - Customers with past experience learn more about the brand

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The advantages: Lowers search cost internally and externally The value may not be only functional in nature They are symbolic devices allowing them to project their self image Extremely important with credence goods to signal quality Brands reduce riskparticularly in BtoB settings

Benefits of Customer-Based Brand Equity • • • • • • • • • • Branding is a powerful means of securing a competitive advantage Brand experience can last for years and cannot be duplicated Enjoy greater brand loyalty, usage, and affinity Predictability and security of demand Command larger price premiums on a regular basis, also during A&Ms Creates entry barriers for others...