BRAND MANAGEMENT

Brand management is the application of marketing techniques to a specific

product, product line, or brand. It seeks to increase the product's perceived
value to the customer and thereby increase brand franchise and brand equity.
Marketers see a brand as an implied promise that the level of quality people
have come to expect from a brand will continue with future purchases of the
same product. This may increase sales by making a comparison with
competing products more favorable. It may also enable the manufacturer to
charge more for the product. The value of the brand is determined by the
amount of profit it generates for the manufacturer. This can result from a
combination of increased sales and increased price, and/or reduced COGS
(cost of goods sold), and/or reduced or more efficient marketing investment.
All of these enhancements may improve the profitability of a brand, and
thus, "Brand Managers" often carry line-management accountability for a
brand's P&L (Profit and Loss) profitability, in contrast to marketing staff
manager roles, which are allocated budgets from above, to manage and
execute. In this regard, Brand Management is often viewed in organizations
as a broader and more strategic role than Marketing alone.
The annual list of the world’s most valuable brands, published by Interbrand
and Business Week, indicates that the market value of companies often
consists largely of brand equity. Research by McKinsey & Company, a
global consulting firm, in 2000 suggested that strong, well-leveraged brands
produce higher returns to shareholders than weaker, narrower brands. Taken
together, this means that brands seriously impact shareholder value, which
ultimately makes branding a CEO responsibility.
The discipline of brand management was started at Procter & Gamble PLC
as a result of a famous memo by Neil H. McElroy.
Principles
A good brand name should:
•be protected (or at least protectable) under trademark law.
•be easy to pronounce.
•be easy to remember.
•be easy to recognize.
 •be easy to translate into all languages in the markets where the brand
will be used.
•attract attention.
•suggest product benefits (e.g.: Easy-Off) or suggest usage (note the
tradeoff with strong trademark protection.)
•suggest the company or product image.

•distinguish the product's positioning relative to the competition.

•be attractive.
•stand out among a group of other brands.

Types of brands
A number of different types of brands are recognized. A "premium brand"
typically costs more than other products in the same category. These are
sometimes referred to as 'top-shelf' products. An "economy brand" is a brand
targeted to a high price elasticity market segment. They generally position
themselves as offering all the same benefits as a premium product, for an
'economic' price. A "fighting brand" is a brand created specifically to
counter a competitive threat. When a company's name is used as a product
brand name, this is referred to as corporate branding. When one brand name
is used for several related products, this is referred to as family branding.
When all a company's products are given different brand names, this is
referred to as individual branding. When a company uses the brand equity
associated with an existing brand name to introduce a new product or
product line, this is referred to as "brand extension." When large retailers
buy products in bulk from manufacturers and put their own brand name on
them, this is called private branding, store brand, white labelling, private
label or own brand (UK). Private brands can be differentiated from
"manufacturers' brands" (also referred to as "national brands"). When
different brands work together to market their products, this is referred to as
"co-branding". When a company sells the rights to use a brand name to
another company for use on a non-competing product or in another
geographical area, this is referred to as "brand licensing." An "employment
brand" is created when a company wants to build awareness with potential
candidates. In many cases, such as Google, this brand is an integrated
extension of their customer.
Brand Architecture
The different brands owned by a company are related to each other via brand
architecture. In "product brand architecture", the company supports many
different product brands with each having its own name and style of
expression while the company itself remains invisible to consumers. Procter
& Gamble, considered by many to have created product branding, is a
choice example with its many unrelated consumer brands such as Tide,
Pampers, Ivory and Pantene.
With "endorsed brand architecture", a mother brand is tied to product
brands, such as The Courtyard Hotels (product brand name) by Marriott
(mother brand name). Endorsed brands benefit from the standing of their
mother brand and thus save a company some marketing expense by virtue
promoting all the linked brands whenever the mother brand is advertised.
The third model of brand architecture is most commonly referred to as
"corporate branding". The mother brand is used and all products carry this
name and all advertising speaks with the same voice. A good example of this
brand architecture is the UK-based conglomerate Virgin. Virgin brands all
its businesses with its name (e.g., Virgin Megastore, Virgin Atlantic, Virgin
Brides) and uses one style and logo to support each of them.

Techniques
Companies sometimes want to reduce the number of brands that they
market. This process is known as "Brand rationalization." Some companies
tend to create more brands and product variations within a brand than
economies of scale would indicate. Sometimes, they will create a specific
service or product brand for each market that they target. In the case of
product branding, this may be to gain retail shelf space (and reduce the
amount of shelf space allocated to competing brands). A company may
decide to rationalize their portfolio of brands from time to time to gain
production and marketing efficiency, or to rationalize a brand portfolio as
part of corporate restructuring.
A recurring challenge for brand managers is to build a consistent brand
while keeping its message fresh and relevant. An older brand identity may
be misaligned to a redefined target market, a restated corporate vision
statement, revisited mission statement or values of a company. Brand
identities may also lose resonance with their target market through
demographic evolution. Repositioning a brand (sometimes called
rebranding), may cost some brand equity, and can confuse the target market,
but ideally, a brand can be repositioned while retaining existing brand equity
for leverage.
Brand orientation is a deliberate approach to working with brands, both
internally and externally. The most important driving force behind this
increased interest in strong brands is the accelerating pace of globalization.
This has resulted in an ever-tougher competitive situation on many markets.
A product’s superiority is in itself no longer sufficient to guarantee its
success. The fast pace of technological development and the increased speed
with which imitations turn up on the market have dramatically shortened
product lifecycles. The consequence is that product-related competitive
advantages soon risk being transformed into competitive prerequisites. For
this reason, increasing numbers of companies are looking for other, more
enduring, competitive tools – such as brands. Brand Orientation refers to
"the degree to which the organization values brands and its practices are
oriented towards building brand capabilities” (Bridson & Evans, 2004).

Challenges
There are several challenges associated with setting objectives for a brand or
product category.
•Brand managers sometimes limit themselves to setting financial and
market performance objectives. They may not question strategic
objectives if they feel this is the responsibility of senior management.
•Most product level or brand managers limit themselves to setting short-
term objectives because their compensation packages are designed to
reward short-term behavior. Short-term objectives should be seen as
milestones towards long-term objectives.
•Often product level managers are not given enough information to
construct strategic objectives.
•It is sometimes difficult to translate corporate level objectives into
brand- or product-level objectives. Changes in shareholders' equity are
easy for a company to calculate. It is not so easy to calculate the
 change in shareholders' equity that can be attributed to a product or
category. More complex metrics like changes in the net present value
of shareholders' equity are even more difficult for the product
manager to assess.
•In a diversified company, the objectives of some brands may conflict
with those of other brands. Or worse, corporate objectives may
conflict with the specific needs of your brand. This is particularly true
in regard to the trade-off between stability and riskiness. Corporate
objectives must be broad enough that brands with high-risk products
are not constrained by objectives set with cash cows in mind (see
B.C.G. Analysis). The brand manager also needs to know senior
management's harvesting strategy. If corporate management intends to
invest in brand equity and take a long-term position in the market (i.e.
penetration and growth strategy), it would be a mistake for the product
manager to use short-term cash flow objectives (ie. price skimming
strategy). Only when these conflicts and tradeoffs are made explicit, is
it possible for all levels of objectives to fit together in a coherent and
mutually supportive manner.
•Brand managers sometimes set objectives that optimize the performance
of their unit rather than optimize overall corporate performance. This
is particularly true where compensation is based primarily on unit
performance. Managers tend to ignore potential synergies and inter-
unit joint processes.
•Brands are sometimes criticized within social media web sites and this
must be monitored and managed (if possible)

Online Brand Management

Companies are embracing brand reputation management as a strategic
imperative and are increasingly turning to online monitoring in their efforts
to prevent their public image from becoming tarnished. Online brand
reputation protection can mean monitoring for the misappropriation of a
brand trademark by fraudsters intent on confusing consumers for monetary
gain. It can also mean monitoring for less malicious, although perhaps
equally damaging, infractions, such as the unauthorized use of a brand logo
or even for negative brand information (and misinformation) from online
consumers that appears in online communities and other social media
platforms. The red flag can be something as benign as a blog rant about a
bad hotel experience or an electronic gadget that functions below
expectations.

•30% of Laggards, compared to 65% of Best-in-Class companies, are

satisfied with their current ability to identify and reduce risk to the
brand
•Using online monitoring as an early warning system, Best-in-Class
companies are 12.5-times more likely than Laggards to experience
year-over-year increases in shareholder value

Brand
A brand is a name or trademark connected with a product or producer.
Brands have become increasingly important components of culture and the
economy, now being described as "cultural accessories and personal
philosophies".

Concepts
Some people distinguish the psychological aspect of a brand from the
experiential aspect. The experiential aspect consists of the sum of all points
of contact with the brand and is known as the brand experience. The
psychological aspect, sometimes referred to as the brand image, is a
symbolic construct created within the minds of people and consists of all the
information and expectations associated with a product or service.
People engaged in branding seek to develop or align the expectations behind
the brand experience, creating the impression that a brand associated with a
product or service has certain qualities or characteristics that make it special
or unique. A brand is therefore one of the most valuable elements in an
advertising theme, as it demonstrates what the brand owner is able to offer in
the marketplace. The art of creating and maintaining a brand is called brand
management.
Careful brand management, supported by a cleverly crafted advertising
campaign, can be highly successful in convincing consumers to pay
remarkably high prices for products which are inherently extremely cheap to
make. This concept, known as creating value, essentially consists of
manipulating the projected image of the product so that the consumer sees
the product as being worth the amount that the advertiser wants him/her to
see, rather than a more logical valuation that comprises an aggregate of the
cost of raw materials, plus the cost of manufacture, plus the cost of
distribution. Modern value-creation branding-and-advertising campaigns are
highly successful at inducing consumers to pay, for example, 50 dollars for a
T-shirt that cost a mere 50 cents to make, or 5 dollars for a box of breakfast
cereal that contains a few cents' worth of wheat.
Brands should be seen as more than the difference between the actual cost of
a product and its selling price - they represent the sum of all valuable
qualities of a product to the consumer. There are many intangibles involved
in business, intangibles left wholly from the income statement and balance
sheet which determine how a business is perceived. The learned skill of a
knowledge worker, the type of metal working, the type of stitch: all may be
without an 'accounting cost' but for those who truly know the product, for it
is these people the company should wish to find and keep, the difference is
incomparable. By failing to recognize these assets that a business, any
business, can create and maintain will set an enterprise at a serious
disadvantage.
A brand which is widely known in the marketplace acquires brand
recognition. When brand recognition builds up to a point where a brand
enjoys a critical mass of positive sentiment in the marketplace, it is said to
have achieved brand franchise. One goal in brand recognition is the
identification of a brand without the name of the company present. For
example, Disney has been successful at branding with their particular script
font (originally created for Walt Disney's "signature" logo), which it used in
the logo for go.com.
Consumers may look on branding as an important value added aspect of
products or services, as it often serves to denote a certain attractive quality
or characteristic (see also brand promise). From the perspective of brand
owners, branded products or services also command higher prices. Where
two products resemble each other, but one of the products has no associated
branding (such as a generic, store-branded product), people may often select
the more expensive branded product on the basis of the quality of the brand
or the reputation of the brand owner.

Brand name
The brand name is often used interchangeably within "brand", although it is
more correctly used to specifically denote written or spoken linguistic
elements of any product. In this context a "brand name" constitutes a type of
trademark, if the brand name exclusively identifies the brand owner as the
commercial source of products or services. A brand owner may seek to
protect proprietary rights in relation to a brand name through trademark
registration. Advertising spokespersons have also become part of some
brands, for example: Mr. Whipple of Charmin toilet tissue and Tony the
Tiger of Kellogg's.
Brand names will fall into one of three spectrums of use - Descriptive,
Associative or Freestanding.
Descriptive brand names assist in describing the distinguishable selling
point(s) of the product to the customer (eg Snap Crackle & Pop or Bitter
Lemon).
Associative brand names provide the customer with an associated word for
what the product promises to do or be (e.g. Walkman, Sensodyne or Natrel)
Finally, Freestanding brand names have no links or ties to either
descriptions or associations of use. (eg Mars Bar or Pantene)
The act of associating a product or service with a brand has become part of
pop culture. Most products have some kind of brand identity, from common
table salt to designer jeans. A brandnomer is a brand name that has
colloquially become a generic term for a product or service, such as Band-
Aid or Kleenex, which are often used to describe any kind of adhesive
bandage or any kind of facial tissue respectively.

Brand identity
A product identity, or brand image are typically the attributes one associates
with a brand, how the brand owner wants the consumer to perceive the brand
- and by extension the branded company, organization, product or service.
The brand owner will seek to bridge the gap between the brand image and
the brand identity.[3] Effective brand names build a connection between the
brand personality as it is perceived by the target audience and the actual
product/service. The brand name should be conceptually on target with the
product/service (what the company stands for). Furthermore, the brand name
should be on target with the brand demographic. [4] Typically, sustainable
brand names are easy to remember, transcend trends and have positive
connotations. Brand identity is fundamental to consumer recognition and
symbolizes the brand's differentiation from competitors.
Brand identity is what the owner wants to communicate to its potential
consumers. However, over time, a products brand identity may acquire
(evolve), gaining new attributes from consumer perspective but not
necessarily from the marketing communications an owner percolates to
targeted consumers. Therefore, brand associations become handy to check
the consumer's perception of the brand.
[edit] Branding approaches

[edit] Company name

Often, especially in the industrial sector, it is just the company's name which
is promoted (leading to one of the most powerful statements of "branding";
the saying, before the company's downgrading, "No one ever got fired for
buying IBM").
In this case a very strong brand name (or company name) is made the
vehicle for a range of products (for example, Mercedes-Benz or Black &
Decker) or even a range of subsidiary brands (such as Cadbury Dairy Milk,
Cadbury Flake or Cadbury Fingers in the United States).

[edit] Individual branding

Main article: Individual branding
Each brand has a separate name (such as Seven-Up or Nivea Sun
(Beiersdorf)), which may even compete against other brands from the same
company (for example, Persil, Omo, Surf and Lynx are all owned by
Unilever).

[edit] Attitude branding and Iconic brands

Attitude branding is the choice to represent a larger feeling, which is not
necessarily connected with the product or consumption of the product at all.
Marketing labeled as attitude branding include that of Nike, Starbucks, The
Body Shop, Safeway, and Apple Computer. In the 2000 book , Naomi Klein
describes attitude branding as a "fetish strategy".
"A great brand raises the bar -- it adds a greater sense of purpose to
the experience, whether it's the challenge to do your best in sports
and fitness, or the affirmation that the cup of coffee you're drinking
really matters." - Howard Schultz (president, CEO, and chairman of
Starbucks)
Iconic brands are defined as having aspects that contribute to consumer's
self-expression and personal identity. Brands whose value to consumers
comes primarily from having identity value comes are said to be "identity
brands". Some of these brands have such a strong identity that they become
more or less "cultural icons" which makes them iconic brands. Examples of
iconic brands are: Apple Computer, Nike and Harley Davidson. Many
iconic brands include almost ritual-like behaviour when buying and
consuming the products.
There are four key elements to creating iconic brands (Holt 2004): 1.
"Necessary conditions" - The performance of the product must at least be ok
preferably with a reputation of having good quality. 2. "Myth-making" - A
meaningful story-telling fabricated by cultural "insiders". These must be
seen as legitimate and respected by consumers for stories to be accepted. 3.
"Cultural contradictions" - Some kind of mismatch between prevailing
ideology and emergent undercurrents in society. In other words a difference
with they way consumers are and how they some times wish they were. 4.
"The cultural brand management process" - Actively engaging in the myth-
making process making sure the brand maintains its position as an icon.
[edit] "No-brand" branding
Recently a number of companies have successfully pursued "No-Brand"
strategies, examples include the Japanese company Muji, which means "No
label" in English (from 無印良品 – "Mujirushi Ryohin" – literally, "No
brand quality goods"). Although there is a distinct Muji brand, Muji
products are not branded. This no-brand strategy means that little is spent
on advertisement or classical marketing and Muji's success is attributed to
the word-of-mouth, a simple shopping experience and the anti-brand
movement.

[edit] Derived brands

In this case the supplier of a key component, used by a number of suppliers
of the end-product, may wish to guarantee its own position by promoting
that component as a brand in its own right. The most frequently quoted
example is Intel, which secures its position in the PC market with the slogan
"Intel Inside".

[edit] Brand extension

The existing strong brand name can be used as a vehicle for new or
modified products; for example, many fashion and designer companies
extended brands into fragrances, shoes and accessories, home textile, home
decor, luggage, (sun-) glasses, furniture, hotels, etc.
Mars extended its brand to ice cream, Caterpillar to shoes and watches,
Michelin to a restaurant guide, Adidas and Puma to personal hygiene.
Dunlop extended its brand from tires to other rubber products such as
shoes, golf balls, tennis racquets and adhesives.
There is a difference between brand extension and line extension. When
Coca-Cola launched "Diet Coke" and "Cherry Coke" they stayed within the
originating product category: non-alcoholic carbonated beverages. Procter
& Gamble (P&G) did likewise extending its strong lines (such as Fairy
Soap) into neighboring products (Fairy Liquid and Fairy Automatic) within
the same category, dish washing detergents.
[edit] Multi-brands
Alternatively, in a market that is fragmented amongst a number of brands a
supplier can choose deliberately to launch totally new brands in apparent
competition with its own existing strong brand (and often with identical
product characteristics); simply to soak up some of the share of the market
which will in any case go to minor brands. The rationale is that having 3 out
of 12 brands in such a market will give a greater overall share than having
1 out of 10 (even if much of the share of these new brands is taken from the
existing one). In its most extreme manifestation, a supplier pioneering a new
market which it believes will be particularly attractive may choose
immediately to launch a second brand in competition with its first, in order
to pre-empt others entering the market.
Individual brand names naturally allow greater flexibility by permitting a
variety of different products, of differing quality, to be sold without
confusing the consumer's perception of what business the company is in or
diluting higher quality products.
Once again, Procter & Gamble is a leading exponent of this philosophy,
running as many as ten detergent brands in the US market. This also
increases the total number of "facings" it receives on supermarket shelves.
Sara Lee, on the other hand, uses it to keep the very different parts of the
business separate — from Sara Lee cakes through Kiwi polishes to L'Eggs
pantyhose. In the hotel business, Marriott uses the name Fairfield Inns for
its budget chain (and Ramada uses Rodeway for its own cheaper hotels).
Cannibalization is a particular problem of a "multibrand" approach, in
which the new brand takes business away from an established one which the
organization also owns. This may be acceptable (indeed to be expected) if
there is a net gain overall. Alternatively, it may be the price the organization
is willing to pay for shifting its position in the market; the new product
being one stage in this process.

[edit] Own brands and generics

With the emergence of strong retailers the "own brand", a retailer's own
branded product (or service), also emerged as a major factor in the
marketplace. Where the retailer has a particularly strong identity (such as
Marks & Spencer in the UK clothing sector) this "own brand" may be able
to compete against even the strongest brand leaders, and may outperform
those products that are not otherwise strongly branded.
Concerns were raised that such "own brands" might displace all other
brands (as they have done in Marks & Spencer outlets), but the evidence is
that — at least in supermarkets and department stores — consumers
generally expect to see on display something over 50 percent (and
preferably over 60 percent) of brands other than those of the retailer.
Indeed, even the strongest own brands in the UK rarely achieve better than
third place in the overall market.
This means that strong independent brands (such as Kellogg's and Heinz),
which have maintained their marketing investments, are likely to continue
their strong performance. More than 50 per cent of UK FMCG brand
leaders have held their position for more than two decades, although it is
arguable that those which have switched their budgets to "buy space" in the
retailers may be more exposed.
The strength of the retailers has, perhaps, been seen more in the pressure
they have been able to exert on the owners of even the strongest brands (and
in particular on the owners of the weaker third and fourth brands).
Relationship marketing has been applied most often to meet the wishes of
such large customers (and indeed has been demanded by them as
recognition of their buying power). Some of the more active marketers have
now also switched to 'category marketing' - in which they take into account
all the needs of a retailer in a product category rather than more narrowly
focusing on their own brand.
At the same time, probably as an outgrowth of consumerism, "generic" (that
is, effectively unbranded) goods have also emerged. These made a positive
virtue of saving the cost of almost all marketing activities; emphasizing the
lack of advertising and, especially, the plain packaging (which was,
however, often simply a vehicle for a different kind of image). It would
appear that the penetration of such generic products peaked in the early
1980s, and most consumers still appear to be looking for the qualities that
the conventional brand provides.

[edit] History
Although connected with the history of and including earlier examples
which could be deemed "protobrands" (such as the marketing puns of the
"Vesuvinum" wine jars found at ), brands in the field of mass-marketing
originated in the 19th century with the advent of packaged goods.
Industrialization moved the production of many household items, such as
soap, from local communities to centralized factories. When shipping their
items, the factories would literally brand their logo or insignia on the
barrels used, extending the meaning of "brand" to that of trademark.
Bass & Company, the British brewery, claims their red triangle brand was
the world's first trademark. Lyle’s Golden Syrup makes a similar claim,
having been named as Britain's oldest brand, with its green and gold
packaging having remained almost unchanged since 1885.
Cattle were branded long before this; the term "maverick", originally
meaning an unbranded calf, comes from Texas rancher Samuel Augustus
Maverick who, following the American Civil War, decided that since all
other cattle were branded, his would be identified by having no markings at
all.
Factories established during the Industrial Revolution, generating mass-
produced goods and needed to sell their products to a wider market, to a
customer base familiar only with local goods. It quickly became apparent
that a generic package of soap had difficulty competing with familiar, local
products. The packaged goods manufacturers needed to convince the market
that the public could place just as much trust in the non-local product.
Campbell soup, Coca-Cola, Juicy Fruit gum, Aunt Jemima, and Quaker
Oats were among the first products to be 'branded', in an effort to increase
the consumer's familiarity with their products. Many brands of that era,
such as Uncle Ben's rice and Kellogg's breakfast cereal furnish illustrations
of the problem.
Around 1900, James Walter Thompson published a house ad explaining
trademark advertising. This was an early commercial explanation of what
we now know as branding. Companies soon adopted slogans, mascots, and
jingles which began to appear on radio and early television. By the 1940s,
[11] manufacturers began to recognize the way in which consumers were
developing relationships with their brands in a
social/psychological/anthropological sense.
From there, manufacturers quickly learned to build their brand's identity
and personality (see brand identity and brand personality), such as
youthfulness, fun or luxury. This began the practice we now know as
"branding" today, where the consumers buy "the brand" instead of the
product. This trend continued to the 1980s, and is now quantified in
concepts such as brand value and brand equity. Naomi Klein has described
this development as "brand equity mania".[2] In 1988, for example, Philip
Morris purchased Kraft for six times what the company was worth on
paper; it was felt that what they really purchased was its brand name.
Marlboro Friday: April 2, 1993 - marked by some as the death of the
brand[2] - the day Philip Morris declared that they were to cut the price of
Marlboro cigarettes by 20%, in order to compete with bargain cigarettes.
Marlboro cigarettes were notorious at the time for their heavy advertising
campaigns, and well-nuanced brand image. In response to the
announcement Wall street stocks nose-dived[2] for a large number of
'branded' companies: Heinz, Coca Cola, Quaker Oats, PepsiCo. Many
thought the event signalled the beginning of a trend towards "brand
blindness" (Klein 13), questioning the power of "brand value".