| Marketing |
|---|
| Key concepts |
|
Product / Pricing / Promotion |
| Promotional content |
|
Advertising / Branding |
| Promotional media |
|
Printing / Publication / Broadcasting |
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 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.[1]
Contents |
A good brand name should:
A number of different types of brands are recognized. A "premium brand" typically costs more than other products in the same category. An "economy brand" is a brand targeted to a high price elasticity market segment. 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 leveraging." 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 two or more 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.
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 each having its own name and style of expression but 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. In the third model only 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, most often known as corporate branding, 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.
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).
There are several challenges associated with setting objectives for a brand or product category.