BRAND MANAGEMENT

22HT-1FE696/1FE706:2
Business Administration II
Integrated Marketing Communication and Brand
Management 7.5 credits

LECTURE 3
Clarinda Rodrigues, Ph.D.

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AGENDA FOR TODAY

1. BRAND PORTEFOLIO AND BRAND ARCHITECTURE

2. BRAND EXTENSIONS
3. MEASURING BRAND PERFORMANCE AND EQUITY
Brand Portfolio
• Mergers and acquisitions of brands and increasing shareholders’
demands also shaped the way brands are currently managed.

• Companies are no longer just looking to create a strong brand, but

rather to invest in a portfolio of brands that can act as a true and
powerful competitive advantage

• Successful and forward looking companies are investing a lot more on

acquiring different brands in order to create a portfolio of diversified or
complementary brands.
Brand Portfolio

“A company’s portfolio includes “all the brands that

factor into a consumer’s decision to buy,
whether or not the company owns them”
(Lederer and Hill, 2001, p. 126).
Brand Portfolio Strategy
Brand Portfolio Strategy
THE BIG CHALLENGE IS TO:
• find a criteria that specifies what brands should be kept, or not, within that
set of brands;
• and how can the portfolio be strengthened by the addition of brands or,
conversely, the deletion of brands (Aaker, 2004).
Brand Architecture (products)
LINE BRAND STRATEGY: complementary products combined to form a complete
whole with a common concept
BENEFITS :
• Enrich the basic promise through diversity (ex:
new tastes, new flavours, etc)
• Finer segmentation of a need (ex: variants of
each shampoo brand according to the type of
hair, age or hair problems)
• Complementary products (ex: from hair loss
shampoo to gel, hair dye, etc)
Brand Architecture (products)
RANGE-BRAND STRATEGY: many products under a single brand concept.
They share a common promise and range of brand’s area of competence.
The brand relationship spectrum
(Aaker and Joachimsthaler, 2000)
Image source: Labbrand
The brand relationship spectrum
Brand Architecture
Brand architecture definition Authors
“Brand architecture is an organizing structure of the brand portfolio that Aaker and Joachimsthaler (2000, p. 8)
specifies brand roles and the nature of relationships between brands.”
“We define brand architecture as the way in which companies organize, manage and go to Petromilli et al. (2002, p. 23)
market with their brands.”
“Brand architecture refers to the relationships among and between corporate, company Balmer and Gray (2003, p. 983)
(subsidiary), and product brands.”
“The term brand architecture refers to an organization’s approach to the design and Devlin (2003, p. 1043)
management of its brand portfolio.”
“Brand architecture may be defined as an integrated process of brand building through Rajagopal and Sanchez (2004, p. 233)
establishing brand relationships among branding options in the competitive environment.”
“Brand architecture refers to the structuring and organization of a company’s product/brand Harish (2008, p. 51)
portfolio (…) it establishes a hierarchical relationship among a company’s brands.”
“A firm’s brand architecture is its collection of brands and their interrelationships.” Muylle et al. (2012, p. 59)
Brand Architecture
• By establishing the roles and interrelationships between the portfolio’s
brands, the brand architecture allows those brands to stretch further and
to build and support each other in new and hopefully more cost-effective
ways.
• A structured brand architecture creates synergies, clarity and leverage
• It increases the value of individual brands and of the overall portfolio
Brand Architecture
Branded House Strategy
BRANDED HOUSE
Master Brand (e.g. the corporate brand)
generally plays the dominant driver role
across multiple offerings.
Sub-brands become descriptors with little
or no driver responsibility. Thus, the
different sub-brands can have different
identities and positionings adapted to
different contexts.
This architecture is the one employed by
Google (see image) and Virgin (Virgin
Airlines, Virgin Hotels, Virgin Mobile, Virgin
Wines, Virgin Galactic and so on).
Branded House Strategy
ADVANTAGES DISADVANTAGES
§ Increased clarity – consumers know § Limited firm’s ability to target
exactly what is being offered. It´s specific groups;
easier to understand and recall than
multiple individual brands; § Diffusion of the brand across a very
wide range of offerings;
§ Higher synergy: increased visibility
and awareness and easier resource § Exposure of the company to the
allocation due to shared failure of one product/service or
associations; neighbouring brands;
§ Leverage opportunities: economies § Need to create a strong brand
of scale; small launch costs on new image and difficult to imitate
offerings and brand extensions; cost- communication style;
effective communication and brand-
building efforts; easiness of § Demand for permanent innovation
distribution for line extensions; and R&D investment
stronger awareness
House of Brands Strategy
Independent set of stand-alone brands, each
with its own driver role and maximizing its
impact on a market.
The House of Brands strategy is the one
employed by Disney (e.g. Mickey Mouse,
Minnie or Snow White) for the shadow
endorser, and by Procter & Gamble (e.g. Tide,
Ariel, Oral-B or Gillette) for the not connected
House of Brands.
House of Brands Strategy
ADVANTAGES DISADVANTAGES
• allows to target market segments with • sacrifice of economies of scale and
functional benefit positions, thus surpassing synergies that come with leveraging a
brand boundaries; brand across multiple businesses;
• avoid brand associations that would be • risk of stagnation and decline when
incompatible with an offering; brands cannot support investment
themselves;
• signal ground-breaking advantages of new
offerings; • increased required investment in brand
building activities;
• own a new product class association by
using a powerful name that reflects a key • loss of association from previous brands
benefit;
Endorsed Brands Strategy
Brands are almost independent on each other and the
endorser (usually the corporate brand) plays a relatively
minor driver role and provides credibility and substance to
the offering.
Three different strategies can be employed within the
Endorsed Brands strategy:
(i) strong endorsement: the endorsement is visually indicated
by a prominent presentation (Ex: Nina by Nina Ricci)
(ii) linked name: a name with common elements creates a
family of brands (Ex: McDonald’s - e.g. McWrap,
McChicken and McNuggets)
(iii) token endorsement: usually indicated by a logo, a
statement or another device, therefore, less prominently
than the strong endorsement (Ex: Betty Crocker’s spoon)
Endorsed Brands Strategy
ADVANTAGES DISADVANTAGES
• provide credibility, reputation and • When the endorser is not well
substance from the corporate or known or well regarded in the
master brand; market, this strategy can
• transfer useful associations and damage the associations or the
energy to the endorser while still benefits
allowing the Endorsed Brands to
create their own associations and • The endorsement is not needed
personality; when the endorsed brand is
• assure ownership and offer already well established in its
differentiation; own
• establish global corporate identity;
• develop customer confidence
Sub-Brands Strategy
SUB-BRANDS are “brands connected to a master or
parent brand and augment or modify the associations
of the master brand” (Aaker and Joachimsthaler, 2000, p. 14).
The sub-brands architecture is closer to a branded
house strategy, since the masterbrand most often acts
as a key driver.
In some cases both the masterbrand and sub-
brands are considered co-drivers, but the sub-brand is
never stronger than the masterbrand
 Sub-Brands Strategy
ADVANTAGES DISADVANTAGES
• halo effect created by the possibility to • potential risk of brand fit and of the
add or change the master brand’s shared associations and values between
associations (such as an attribute, a the master and the sub-brands;
ground-breaking newness or a
personality); • costly and time-consuming exercise
because each sub-brand has to be
• possibility to stretch the master brand developed in close connection with the
across markets and products; master brand;
• opportunity to address conflicting brand • eventual brand overlap and dilution due
strategy needs; to an attempt to over-stretch the master
brand
• capitalization on a well-known single
brand, achieving economies of scale at a
macro-level, while maintaining the
flexibility to market different products
independently
Brand Architecture
Brand Extensions
Perimeters of Brand Extensions
Kapferer (2012)
Successful Brand Extension
Successful Brand Extension
Successful Brand Extension
Successful Brand Extension
Successful Brand Extension
Successful Brand Extension
Successful Brand Extension
Germany's biggest car
manufacturer sold 7.3
million of its spicy sausage
in 2015, nearly one million
more than in 2014.
Successful Brand Extension
Successful Brand Extension
Brand Extensions
Brand Extension Failures
Brand Extension Failures
In the 80s: Colgate produced a line of frozen dinners, encouraging people to eat a
branded dinner before brushing their teeth with Colgate toothpaste. The result was a
pure failure.
Brand Extension Failures
Brand Extension Failures
Managing Brand Performance and Equity
Sustaining the brand long-term
PART III:
Consumer-Based Brand Equity
Keller (2012)
Why should we measure brand equity?
• Need to assess the strength of the brand and to understand its nature
• Brand equity is dynamic
• Brand equity is subject to change
• Brand equity impacts over time (along with other competitive
brands)
Brand Equity Audit
• At least on an annual basis in a written
report
• It should provide a look at the current
state of knowledge about a brand´s
equity as well as a fresh understanding
of the brand
• It´s a tool to look into what measures
of brand equity should be considered.
• How far it should go? It´s determined
specifically for each brand.
Brand Equity Audit
q Qualitative brand equity research
q Quantitative brand equity research
Qualitative brand equity research
Qualitative methods
• Focus groups (8-10 members of a target
population are led by a group moderator
in a discussion of a topic)
• Individual in-depth interviews
• Etnography
• Netnography
Quantitative methods
• Structured questionnaire (conducted
among a larger sample of the target
population – usually 100 to 1000 depending
upon the complexity of the target market
and the degree of reliability desired)
Qualitative brand equity research
KEY QUALITATIVE MEASURES FOR BRAND EQUITY
1. MOTIVATION (gaining an understanding of
the underlying motivation that drives in a
brand´s category)
2. BENEFIT STRUCTURE (determining the benefits
that help to inform our brand image and our
competitors brand image )
Qualitative brand equity research
KEY QUALITATIVE MEASURES FOR BRAND EQUITY – MOTIVATION
Focus Groups / In-Depth Interviews
• How does thinking about a brand makes you feel?
• What is the significance of the product in your life?
• How do you use the brand?
• How do you feel when you use the brand?
• What else makes you feel that way?
• What is your first memory of the product?
• What would your life be like without products like this?
Projective techniques
• Questions such as “Why do your friends buy these products?”
• Use of cartoon characters in various brand purchase/usage situations and ask
people to fill in what they are saying in the balloons over their head
• Ask people to “become the brand” and talk about themselves
Qualitative brand equity research
KEY QUALITATIVE MEASURES FOR BRAND EQUITY
– BENEFIT STRUCTURE
Projective techniques
Ask for cognitive associations and laddering exercise
• What comes to your mind when you think about
saving ? (Answer: Security)
• And does security make you think of?
A careful analysis suggests that at the heart of saving
in people´s mind is the benefit of security
Each of the key benefits initially associated with the
category is likely to stimulate one of the other
benefits.
Quantitative brand equity research
From understanding the nature of a brand equity to quantifying it
ASSESSING BRAND EQUITY STRENGTH
BRAND SALIENCE The strength of a brand´s awareness in relation to the
awareness of other brands in the category
BRAND PREFERENCE The level of consumer preference for a brand versus
others in the category
PRICE ELASTICITY Indication of the extent to which consumers are willing to
pay a higher price without switching brands
CHOICE TRADE-OFFS Identifies what product characteristics consumers are
willing to trade-off before switching brands
Quantitative brand equity research
MEASURES FOR UNDERSTANDING BRAND USERS
CORE LOYALTY Going beyond purchase behavior
to get the attitudes underlying
purchase behavior in the category
USER PROFILES Comparing user images with actual
profiles and gaining an
understanding of how the brand is
used.
Quantitative brand equity research
MEASURES FOR UNDERSTANDING THE NATURE OF BRAND EQUITY
BRAND ATTITUDE Determines those benefits that
drive positive brand attitude
which are components for
building brand equity
IMAGE OWNERSHIP Identifies those benefit claims
uniquely associated with a brand
versus competitors.
Tracking Brand Performance
Tracking Brand Performance (Methodologies)

PANEL TRACKING: interview the same people each time, from the benchmark
prior to a campaign and in each successive “wave” of interviews during the
campaign (ex: 600 people every quarter or so)

Advantages: Allow causality to be established at the individual consumer or

customer level

Disadvantages: Panels are very expensive and difficult to maintain

If the interviews are conducted too frequently there is the potential to
sensitize the participants to be more likely to make purchases in the studied
category
Tracking Brand Performance (Methodologies)

WAVE TRACKING: separate samples are interviewed each time (ex: 600
people every quarter or so)

Advantages: the brand manager can relate steps in the chain of effects
but only at the aggregate level

Disadvantages: does not allow processing to be causally linked to

communication effect over time
Tracking Brand Performance (Methodologies)

CONTINOUS TRACKING: uses small random samples of consumers or

customers drawn from the target audience, and interviews are
conducted daily or weekly (ex: 50 people would be interviewed every
week for 12 weeks)

Advantages:
• Provides a good compromise between a panel and wave tracking
methodologies.
• It is sufficiently causal and reliable
• Enables the brand manager to take quick actions because the results
are available continuously and all but instantly