Exam

Brand: Differentiates the products,

Brand is all about creating differences - As soon as you have differentiation, you have a brand

• Rational and tangible - e.g. related to product performance

• Symbolic, emotional and intangible - e.g. related to what the brand represents

Products: Answer to consumers needs

• Brand Equity

• Brand Image

• Brand Identity

• Brand Positioning

• Brand Purpose

Value that the brand will bring to the product (compared to same product without brand)

• Can be positive or negative

• Extremely fragile due to personal opinions

Two main paradigms:

1. Financial value of brands

2. Consumer base brand equity (CBBE)

   • From consumer perspective, many different methods

   • “Brand Equity is the added value endowed by the brand to products and services: The power of a brand lies in what consumer have seen, read, heard, earned, thought and felt about the brand over time (=brand knowledge) according to Keller

   • According to Keller: 2 components (Brand Awareness, Brand Image)

   • Aware that brand management mean for other authors different variable

What brand managers would like the brand to be

• #Step 1

• Internal, shaped by the managers

• Aspirational

• Unique: One brand = One Brand identity

• Needs to be as stable/enduring as possible, long term approach of the brand

Framework: Brand Identity Prism (Kapferer)

Externalisation: Physical, Relationship, Customer Reflection

Internalisation: Peronsality, Culture, Self-Image

1. Physical

   • Most salient brand features (what the managers would the most salient brand features to be)

     • tangible & non-tangible

   • Start with category

   • Example: Lacoste

     • Cult brand of polo shirts and other sport items

     • Frech tennis legend René Lacoste, nickname: crocodile became an universal logo und symbol of elegence

2. Relationship

   • Counterpart given by the brand to its consumers (what the managers want it to be)

   • Examples:

     • Nike: Bring inspiration and innovation to athletes of every level (“Challenge yourself”, It’s about you”, “Just do it”)

3. Customer Reflection

   • Brand’s “projected/desired” consumer type (what the managers want it to be")

   • Projecting the consumer is not describing the target!

   • Examples:

     • Coca-Cola (until 2005): 15-18 years old Teens playing football, basketball, rugby

     • Volvo (2010) People who think that there is more to life than a Volvo

4. Personality

   • If the brand was a person, what kind of person would it be? Characteristics (what the managers would like the personality of the brand to be)

   • Examples:

     • McDonald’s: Before 2003: Family-oriented, popular, americal, After 2003: Young, fun, dynamic, global

     • TAP Air: Before 2005: Simple, Popular, Portuguese, Traditional, After 2005: Simple, Portuguese speaking, Reliable

5. Culture (most important facette)

   • Set of values feeding the brand’s inspiration, Core of the brand, bilds the unicity of the brand (what the managers want it to be)

   • Can be connected to roots (origin), techniques, style

   • Example:

     • Apple: Radical project proposed to companies: Think differently to create best IT products; ethical and social responsibility, inclusiveness, diversity

6. Self Image

   • Aspired target’s internal feelings: What Managers expect consumers to feel when purchasing / using the brand

   • Usually starts with “I”

   • Example:

     • Porsche: Prove to myself that I can buy and drive such a car; To push beyond my limits “Try racing against yourself, it’s the only race that will never have an end”

What makes the brand different from its competitors and appealing to the consumers

• #Step 2

• Aspirational

• Internal, Shaped by the manager

• Not unique, need as many positionings as you have targets

• More flexible than Brand Identity, can be adjusted when competitors change their strategy

Keller approach: Customer-based brand Equity model for positioning:

1. Who the target consumers should be

   • Consumer-oriented segmentation

     • Demographic, Geographic, Psychographic

   • Behavioral segmentation

     • Usage rate, Purchasing condition, Benefits sought (Following example)

     • Example toothpaste:

       • Sensory segment (Seeking flavor and sensory experience)

       • Sociables (Seeking brightness of teeth)W

       • Worriers (Seeking decay prevention)

       • Independent Segment (Seeking low price)

2. Who the main competitors should be

   • Nature of competition: Who should the competitors be?

     • Thos who “target” the same segments of consumer?

     • Those who compete in the same distribution channels?

     • Do consumsers in these segments consider those competitors for their purchase options?

     • Should we consider direct & indirect competitors?

   • Several levels(going from upper to lower level) - with ZARA example:

     1. Product type level: Skirts

     2. Product category level: Mass Fashion (H&M, Uniqlo, Mango)

     3. Product class level: Fashion (Designer, Premium, Value&Discount)

     4. Benefit level: Indulgence purchase

3. How the brand should be different from these competitors

   • Points of Difference Associations

     • Attributes/benefits that consumers strongly associate with a brand

     • positively evaluate

     • believe they could not find to the same extent with a competitive brand

     • Example: Low cost provider, Best quality/value, Unique product features

   • Example: IKEA: “Prices so low that as many people as possible will be able to afford them)

   • Desirability criteria (needs to be fulfilled)

     • Relevance (important)

     • Distinctiveness (superior)

     • Believability (credible reasons) —> Reason to believe

4. How the brand should be similar to them

   • Points of Parity Associations

     • Attributes/benefits that are not unique tot he brand but may be shared by other brands

     • If brand does not have PoP with main competitors consumers might feel lost

     • 2 types:

       • Category PoP (to reassure the consumer)

         • Necessary but not sufficient conditions for choosing the brand

           • Gentle for shampoo

           • Safe for a toy

           • Natural for mineal water

       • Competitive PoP

         • Associations designed to “negate” competitors’ PoD

Positioning Statement

For (target) Brand A is (PoP) which gives the most (PoD) because of (Reasons to believe).

How the brand is perceived by stakeholders // What the brand is

Kapferer: “Consumers’ perceptions about a brand, as reflected by the brand associations held in consumer memory”

• #Step 4

• Multiple brand images

• External, is defined by the receivers (consumers)

• Goal: Achieve an image that is close to identity and positioning

• Needs to be monitored so we can make changes in identity and positioning

Stakeholders can develop a brand image in a variety of ways:

• From Brand’s marketing activities

• From direct experience

• Through their communities’ opinion, influencers, reviews, SoMe

Associations may include:

• Product attributes (Coca-Cola: Bottle, red or black color)

• Person (Nespresso: George Clooney)

• Particular symbol

• Particular country/region (Ikea: Sweden, Port wine: Portugal)

Two approaches:

1. Dynamic: Influenced by consumer experience with the brand

2. Static: Grounded on memory: How the brand has been memorized

Example Nestlé Image Portugal vs. German Millennials

Middle of:

• What the world needs

• What the brand is passionate about

• What the brand is good at

  • Must be connected to the brand

  • Must be incorperated in Brand Identity & Positioning

Long-term central aim is a predominent component of its identity

Purpose:

• Active process

• Relates to the core of who you are

• Relates to outside world

Sustainability: People, Planet & Profit

Different brand purposes in different countries

• In Portugal: Local brand purpose works best

Brand say <— Brand do <— Brand know

Brand say (Mostly Brand Image, Bit of Positioning)

Brand do (Mostly Positioning, Bit of Identity)

Brand know (Identity)

Consumers’ ability to identify the brand under different conditions, as reflected by their brand recognition and recall performance

Related to:

• Strength of the brand trace in the memory (Keller)

• Stregth of a brand’s presence in consumer’s mind (Aaker)

Measured according to the different ways in which consumers remember a brand:

1. Recognition: From the list that I am going to read/show, would you mind telling me which brand do you know at least the name?

   —> Consumers instinctively prefer a brand that they have previously been exposed to

2. Recall: Which brands from this product category do you know at least the name? (Spontaneous awareness)

3. Top of mind: The first brand recalled/referred

4. Brand Name Dominance: Most respondents can only provide the name of a single brand (e.g. Nutella, Kleenex, Tempo)

—> Je weiter unten in der Liste desto besser

—> Je weiter oben desto öfter kommt es vor (Recognition immer höher als Recall)

Graveyard Model:

“High recognition is not necessarily the mark of a strong brand”

X-Achse: Recall

Y-Achse: Recognition

Niche brands: Recalled by most consumers who recognize them

Old brands: High recognition, low recall, e.g. Nokia, Blackberry

Graveyard: Deadly position (oben links): High Recognition, low Recall

1. Consider

   • Consumers consider an initial set of brands, based on brand perceptions and exposure to recent touch points

2. Evaluate

   • Consumers add and drop brands as they evaluate)

3. Buy

   • Consumers select a brand at the moment of the purchase

4. Bond

   • Loyality Loop: If consumers’ bond with a brand is strong enough, they repurchase it without cycling through the earlier decision-journey stages

Brand Awareness: Quantitative

Brand Image: Qualitative (+++) & Quantitative (+)

Consumer Decision Journey: Start with Qualitative (+++), then Quantitative (++ Store observations)

Core Identity:

• Timeless essence of the brand

• What makes the brand unique and valuable

• Dimensions that are most likely to remain constant as the brand travels to new markets and products

• Should not be changes

Extended Identity:

• Elements that help portray what the brand stands for

• Provides all the elements “to complete the picture”

• Dimensions that have a role to play as a driver of the Brand Identity, but are less timless, less central than the core Identity dimensions

• More Flexible

Example McDonalds:

Core Identity:

• Value & quality: Value offering

• Product attributes: Food quality, Healthy and authentic ingredients, Service, Cleanliness

• User: Families and kids, Teens “I am lovin’ it”, women

Extended Identity:

• Organization attributes

  • Worldwide/global consistency

• Product scope

  • Healthy burgers and fries, premium salads, Convenience

• Personality

  • Young, fun dynamic

• Brand-Customer Relationships

  • Good time, energy

• Visual imagery

  • Logo, McDonald’s toys

New Marketing Paradigm

• When “the link (with others) is more important than the thing (brand, product)

• Initially, there was a connection between Company & Consumer (stronger from company side), yesterday: connection between Company & Consumer (same strength), today: 3rd section communities is new driver, most important: diversity! (strongest bond between consumer and communities)

  • Company - Communities: Participation, Inputs & Feedback, Co-Creation of Value

  • Company - Consumer: Information, Customized Services

  • Consumer —— Communities: Social Networks, Online Forums, Blogs

    • Important: What are the communities you want to check?

Reshaped Consumer Priorities (1), (2), (3)

• New consumption values and new perception of Performance

  • Natural & Authenticity and their implications on the perception of “performance”

• Resistance to consumption vs. Cult of consumption

• Polarization of consumption

Distribution Challenges

New consumption values

• Significant changes in consumer behavior

• Key concern: Health

• Nature as active ingredient that can substitute chemicals

• Food as first way to be healthy

• Sustainability

  • In me, On me, Around me (In me has the highest concern)

  • Less

    • Consuming less is a synonym of status

    • Valuing the essential, frugality

    • Waste

New perception of performance

• ‘The Real’ as ‘The new norm’ —> Real implies imperfections —> imperfections become the new norm

• Consumers tend to accept less efficiency for products that are + natural & authentic

• Examples:

  • Japanese concept Wabi-sabi (way of living that focuses on finding beauty within the imperfections of life and accepting peavully the natural cycle of growth and decay

  • Ugly apples

  • Real women. Real beauty campaign by Dove

Resistance to consumption:

• Soft resistance to consumption

  • Bourgeois-bohemians

    • Bourgeois: Believe it is possible to “do well” (have & spend money)

    • Bohemians: “Do good” (right for society & planet) at the same time

    • Represent 50% of consumers in developed countires

    • Example: Interior, Want to be authentic, timeless

      • + Kitchen, Gourmet food, Vintage furniture

      • - Luxury Cars, Huge TVs, Gadgets

    • Subgroup: Hipster

• Hard resistance to consumption

  • No Logo Trend

    • Criticizes

      • The society dominated by multinational brands

      • Uniformization of consumption which kills local cultures

      • Reject opulence and excessive consumerism

    • Also directed towards brand communications

      • “Ad-Evasion” to avoid contact with advertising

      • Interruption marketing is the enemy

        • Alternative is permission marketing which offers the consumer an opportunity to volunteer to be marketed to

      • Why?

        • Low trust world (example Tesco and the farm brands); Age of mass scepticism

        • Are brand lying?

Cult of consumption

• Way to show to others their social status

Trading Up

• For high involvement product categories

• Decisions based on emotions

• Example: Renova coloured toilet paper

Trading Down

• For low involvement product categories

• Decision based on price

• Example Kellogg’s USA

—> Middle market disappears (either premium or cheap)

Premium: Offer better quality compared to competitors of same category for a higher price

In moment of crises, people trade up for small pleasures

For consumers, line between retailer brands & manufacturer brands is becoming blurred

Retailer brands are just like another choice among many brands

Margins Manufacturer Brands

• 1/3 sourcing, 1/3 retailer, 1/3 manufacturer

  —> Retailer makes more money due to higher margins of manufacturers

Margins Retailer Brands

• 2/3 Sourcing, 1/3 Retailer

  —> Retailers make less money due to lower margins

Consumer Perception

• Price gap (between Manufacturer and discounters) is perceived higher than quality gap

• How to increase differentiation (increase quality of manufacturer brands)?

  • Innovation (change formula, packaging)

    • The more you innovate, the more you can differentiate from private labels

      • Private labels/retailer brands don’t innovate, they just copy

      • Discounter brands copy Retailer brands ( same at lower price)

        —> Gap between discounter & retailer brands are becoming smaller

  • If Retailer Brands are becoming too big —> manufacturer brands loose revenues —> manufacturer brands can’t do innovation —> Retailer brands can’t copy the manufacturer brands and will also die

    —> Manufacturer brands can’t die

• Manufacturer pricing strategy: Very high level of promotions - so that they match Retailer prices

  • Everything is always (somewhere) in Propmotion in Portugal - Average discount: Almost 50% for manufacturer brands

1. Home

   • Home Nesting (Shift of time and money to home)

     • Overall consumption has declined, at-home categories has increased

     • Increase of DIY products at home (colour hair at home, cooking)

2. Sustainability

   • Opposing consumer behaviors —> Polarization

   • Lower class becomes more poor: Sustainability is no priority

   • Higher Class has more time: Sustainability becomes more important (only 5-8% in Portugal)

     • Main purchase drivers: Sustainability (1/4), Price&Promotion (3/4)

     • EU&US: Covid 19 as wake up call // Budget constrains; China, India, Brazil: Hygiene, safety and economics over sustainability

3. Increased e-commerce & use of digital services

   • But: Unequal growth across developed countries

   • Persistence depends on consumer satisfaction with experience!

   • Increase omnichannel practices (consumers plan their purchases online, check promotions in the retailer’s websites)

   • Portugal: penetration did not increase as much as in other EU contries (7-14%) due to low-developed delivery infrastructure

     
     

Widening polarization of consumer segments

Price? Income? Sustainability? —> Always explorative question because these are new consumer insights

• Price

  • Portuguese feel product’s price increase; 64% change their purchase behavior —> Inflation average 10%, Groceries almost 20%

  • Hygiene & Beauty: Only category that is increasing in volume (Don’t check value, check volume)

  • Result of price increase (10% Euro Zone, 9,3% Portugal)

    • Consumers purchase less quantities?

    • Opt for more private labels?

    • Look for more promotions?

    • Trade down?

  • Private labels: Consumers were already switching to less expensive products & private labels before the crises in the Ukraine

• Income

  • Increasing polarization between low- and high- income consumers

  • Low-income consumers are trading down, look for more ways to save money

  • High-income consumers buy premium products & sustainability

• Sustainability

  • Healthy and sustainable products remain a priority for European consumers

  • Gap between intention and action got even bigger during crises

  • Main purchase drivers:

    • (Low) price: Low-income consumers

    • Sustainability: High-income consumers and younger generations

Widening polarization of consumer priorities

• Main purchase drivers

  • (Low) price

  • Sustainability

  • Premium for high-involvement categories

  • (Community influences)

—> Many consumer decision journeys for every segment

Before: Many people in between, future: Widening of plarization

Set of all brands & brand lines that a particular firm offers in one (or several) particular categories

1. Strategy: Maximize market coverage; minimize brand overlap

   • Example: Unilever Deo brands: Rexona, Dove, Axe

1. Strategy: Commercial Brands compete among themselves, competition will inspire the Marketing teams

   • Example: L’Oréal Paris & Maybelline New York

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6 main models of Brand strategy (according to Kapferer)

Hidden Corporate Brand:

• Product Brand Strategy

  • One product associated to the brands (not lines)

    + Advantages:

    • Allows firm to take risks (Name of company remains unknown to public)

    • Independent brands, failure of one has no impact on others

    - Disadvantages:

    • Super expenisve to manage new brands for all new products

  • Example: Masterfood (before it became Mars): Mars, Uncle Ben’s, M&M’s

  • Corporate Brand on top of everything but hidden

    —> This model doesn’t exist anymore and got substituted by:

• Line Brand Strategy

  • Same as Product Brand Strategy but product lines associated to brands

  • Company: Ferrero; Brand A: Kinder; Line A: Kinderbon & Line B: Kinder Bueno

  • Dominant strategy in FMCG sector

    + Advantages:

    • Reduces Launch costs

    • Strong impact on shelves

  • Example: Kinder (Kinderriegel, Kinderbueno, Kinderbon)

• Range Brand Strategy

  • Products do not serve the same consumer needs

  • Products/ Product lines follow a concept (Dove = Real beauty)

  • Many brands in F&B and cosmetic sector

  • One concept with many products

  • Example: Maggi, Knorr, La Roche Posay, Vichy

    + Advantages:

    • Lower launch costs

    • Communication / advertising /generic manner, focus on most representative new products)

    - Disadvantages:

    • Higher risk than strategy 1 & 2

Discreet Corporate Logo / Prominence of Commercial Brand:

• Endorsing Brand Strategy

  • Commercial brand takes the lead and is more visible on the packaging and in communication

  • Most of the brands in the healthcare market

    + Advantages:

    • Division of roles at each stage of branding hierarchy

      • Endorsing brand is the guarantor of the endorsed brands quality and security

      • Other brands functions (pleasure, distinction) are assumbed by endorsed brands

      • Greater freedom of movement: Corporate brand has a back seat position

    - Disadvantage:

    • Higher risk: Failure impacts other brands, constraints to what you can do

  • Example: Most of Nestlé brands

Strong Corporate Brand:

• Source Brand Strategy

  • One source brand with different daughter brands with different positionings

    + Advantages:

    • Parent brand offers its significance & identity, enriched by daughter brand in order to attract specific customer segment

    - Disadvantages:

    • Incongruence between daughter & parent brand

  • Dominant Strategy in L’Oréal Group and Automotive Industry

  • Weight to both brands (commercial and corporate brand) is the same, also same power in communication

  • Example: Garnier Fructis, Garnier Ultra suave, Garnier Movida OR Renault Clio, Renault Twingo, Renault Scenic; VW

• Umbrelly Brand Strategy

  • Launching a new product or even a product line under a famous brand name

    + Advantages:

    • Capitalization on one name = economics of scare

    • Useful to penetrate new sectors thanks to high brand awareness

    - Disadvantages:

    • Patchwork brand

  • Exmpale: Toshiba: Laptops, Projectors, Printers, Motors

Mixed Approach

• Example: Danone

  • Umbrella Brand for “Le Yaourt Nature”

  • Source Brand for Activia

  • Endorsing Brand for Evian

Rise of “Branded Houses” vs. “House of Brands”

Because:

• Demand for responsibility and transparency

  • Consumers want to know who is behind the brand

• Need for attractiveness

  • Students and employment market

• Need for visibility

  • Stock exchange

Risks:

• Generate internal resistance because “sub-brands” autonomy is affected

• Increases all activities/products exposure if problem or crisis (Danone / Lu in France —> Je boycotte Danone)

Peripheral Trend: Acquisition of local brands

• Example (Pure Leaf, seventh generation, grom)

Brand Extension occurs when a firm uses an established brand name to introduct a new product

3 Approaches for branding a new product:

1. Develop a new brand, individually chosen for the new product

2. Apply one of the firm’s existing brand

3. Use a combination of a new and an existing brand (could also be a sub-brand)

80-90% of new products launched every year are Line Extensions

Guidelines (to be successful):

• Parent brand has favourable associations

• Consumer perceive a fit between parent brand and brand extension

• Many bases of fit:

  • Product related attributes & benefits (Example: Dunhill smoking accessoires)

  • Usage situations (Example: Colgate’s etension from toothpastes to toothbrushes)

—> Fit with the brand identity!

Before developing Brand Marketing & Communication Strategy:

• Where is brand currently regarding consumer behavior?

Objectives

Have this in mind before building the strategy:

Start investing from top to bottom (first brand awareness, then brand image, then…)

Before deciding in which tool to invest, check the stage/objective of New Consumer Decision Journey

1. Consider

   • Brand Awareness +++

   • Brand Image ++

2. Evaluate

   • Brand Awareness +

   • Brand Image +++

   • Brand Interest +++

3. Buy

   • Brand Preference

   • Brand Purchase

4. Bond

   • Brand Loyalty

Criteria for choosing brand elements:

• Memorable, meaningful, likable, transferable, adaptable, protectable

Main issue when choosing brand elements:

Most of the desirable brand names and solgans are already legally registered

Trademarks

3 levels of protection

1. National trademark

2. Community trademark

3. International trademark

4. 
   

Performance =

Financial Performance +

Social performance

Sthical performance

Environmental Performance