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Jack Buckner

Strategic Brand ManagementStrategic Brand Management

Exeter MBA and MSc Exeter MBA and MSc Day 4Day 4

Lecture 1Lecture 1

Brand ManagementBrand Management

Jack Buckner

Brand ManagementBrand Management

Brand Portfolios / architectureBrand Portfolios / architecture

Corporate brandsCorporate brands

Brand extensionsBrand extensions

SubSub--brandsbrands

Brand alliancesBrand alliances

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Jack Buckner

Some definitionsSome definitions

Most brands are part of a wider organizationMost brands are part of a wider organization

Brand architecture Brand architecture the structure and the structure and

organization of brandsorganization of brands

Brand hierarchy Brand hierarchy the different the different

organizational levels within a brand systemorganizational levels within a brand system

SubSub--brand brand an identified division (other of an identified division (other of

products) within a brandproducts) within a brand

Jack Buckner

Brand HierarchiesBrand Hierarchies

Resolution Resolution

EnhancementEnhancement

NutrasweetNutrasweetMrMr

GoodwrenchGoodwrench

service systemservice system

BRANDED BRANDED

FEATUREFEATURE

LaserjetLaserjet IV IV

SESE

CarnationCarnation

Instant Instant

Breakfast Swiss Breakfast Swiss

ChocolateChocolate

Chevrolet Chevrolet

Lumina Sports Lumina Sports

CoupeCoupe

SUBBRANDSUBBRAND

LaserjetLaserjet IVIVCarnation Carnation

Instant Instant

BreakfastBreakfast

Chevrolet Chevrolet

LuminaLuminaPRODUCT LINE PRODUCT LINE

BRANDBRAND

HP Jet BrandHP Jet BrandCarnationCarnationChevroletChevroletRANGE BRANDRANGE BRAND

HPHPNestleNestleGeneral MotorsGeneral MotorsCORPORATE CORPORATE

BRANDBRAND

Aaker : Building Strong Brands

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Jack Buckner

Brand Architecture alternativesBrand Architecture alternatives

Product Range Brand Product Range Brand

Umbrella BrandUmbrella Brand

Endorser BrandEndorser Brand

Kapferer: Strategic Brand Management

Jack Buckner

Product Range Brand StrategyProduct Range Brand Strategy

Company

Brand A

Product A

Positioning A

Brand B

Product B

Positioning B

Brand N

Product N

Positioning N

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Jack Buckner

Product Range Brand StrategyProduct Range Brand Strategy

Allows multiple market entry and flexibilityAllows multiple market entry and flexibility

Consumer oriented branding not corporate Consumer oriented branding not corporate brandingbranding

Encourages innovation and risk taking (failure will Encourages innovation and risk taking (failure will reflect less on corporate brand)reflect less on corporate brand)

Possible to control greater shelf space with strong Possible to control greater shelf space with strong brandsbrands

BUT expensive and requires sophisticated BUT expensive and requires sophisticated organization organization

Example Example P & G (Ariel, Tide, Crest, Pampers, P & G (Ariel, Tide, Crest, Pampers, Pringle)Pringle)

Jack Buckner

Umbrella Brand StrategyUmbrella Brand Strategy

BRAND

Products or

Services

Specific

communications by

product or service

A

A

B

B

N

N

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Jack Buckner

Umbrella Brand StrategyUmbrella Brand Strategy

Builds brand equity at the corporate levelBuilds brand equity at the corporate level

Corporate brand strength is criticalCorporate brand strength is critical

Reduces marketing investment in new categoriesReduces marketing investment in new categories

Allows fastAllows fast--follower strategies in innovative follower strategies in innovative

companiescompanies

Easier for horizontal rather than vertical extension Easier for horizontal rather than vertical extension

(in some categories)(in some categories)

Risk of overRisk of over--stretchingstretching

Examples Examples Sony, Canon, SchweppesSony, Canon, Schweppes

Jack Buckner

Endorser Brand StrategyEndorser Brand Strategy

Endorsing Brand

Brand A

Product or

range A

Promise A

Brand B

Product or

range B

Promise B

Brand N

Product or

range N

Promise N

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Jack Buckner

Endorser Brand StrategyEndorser Brand Strategy

Allows dual brand equity to developAllows dual brand equity to develop

Quality seal of approvalQuality seal of approval

Cheaper method of building brand equity in Cheaper method of building brand equity in

company namecompany name

Use product brands to express different aspects of Use product brands to express different aspects of

personalitypersonality

Requires comprehensive understanding of brand Requires comprehensive understanding of brand

valuesvalues

Examples Examples GM, ICI, 3M, HSBCGM, ICI, 3M, HSBC

Jack Buckner

Brand architecture debate Brand architecture debate 3M3M

In 1981 created 244 new brandsIn 1981 created 244 new brands

Over 1500 trademarksOver 1500 trademarks

Established branding committeeEstablished branding committee

3M to be sign off on all products (except 3M to be sign off on all products (except cosmetics)cosmetics)

Ban the use of more than 2 names on one Ban the use of more than 2 names on one productproduct

Clear guidelines for branding to all subsidiariesClear guidelines for branding to all subsidiaries

Brand decision treeBrand decision tree

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Jack Buckner

Brand Architecture Brand Architecture the car the car

industryindustry

Toyota / LexusToyota / Lexus

BMW / MiniBMW / Mini

Mercedes / Smart CarMercedes / Smart Car

FordFord

Audi / VolkswagenAudi / Volkswagen

GMGM

Critical issue is clear structure and Critical issue is clear structure and understandingunderstanding

Jack Buckner

Brand Extension Brand Extension -- ProsPros

Facilitate new product acceptanceFacilitate new product acceptance

Increase profitsIncrease profits

Avoid cost of developing a new brandAvoid cost of developing a new brand

Appeal to new consumersAppeal to new consumers

Revitalize the brandRevitalize the brand

Prevent marketing myopiaPrevent marketing myopia

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Jack Buckner

Brand Extension Brand Extension -- ConsCons

Hurt parent brand imageHurt parent brand image

Dilute brand image (diluted investment)Dilute brand image (diluted investment)

Confuse consumersConfuse consumers

Alienate existing consumersAlienate existing consumers

Retailer resistanceRetailer resistance

Jack Buckner

Some brand extension researchSome brand extension research

Successful brand extensions have a Successful brand extensions have a perceived fit (the basis for fit may vary)perceived fit (the basis for fit may vary)

High quality brands stretch further than High quality brands stretch further than average quality brandsaverage quality brands

A prototype brand can have difficulty A prototype brand can have difficulty extendingextending

Vertical extensions can be difficultVertical extensions can be difficult

Most effective advertising focuses on the Most effective advertising focuses on the extension (not the parent)extension (not the parent)

Keller Strategic Brand Management

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Jack Buckner

Nike and the Skate marketNike and the Skate market

Skateboarding fast expanding sport

New brands emerged Etnies, DC

Traditional sports brands struggled

image, distribution

Nike 4 attempts in 1990s ACG

separate division

Orange County office big brand

approach

We were hurt by the fact we were the

number one sports company

Recognised brand extension not

possible

Savier new brand

Hurley acquired - $50 million

Jack Buckner

Extend profits, not product linesExtend profits, not product lines

Why do companies extend their brands?Why do companies extend their brands? Customer segmentationCustomer segmentation

Consumer desiresConsumer desires

Pricing breadthPricing breadth

Excess capacityExcess capacity

ShortShort--term gainterm gain

Competitive intensityCompetitive intensity

Trade pressureTrade pressure

The pitfalls of proliferationThe pitfalls of proliferation Weaker line logicWeaker line logic

Lower brand loyaltyLower brand loyalty

Under exploited ideasUnder exploited ideas

Stagnant category demandStagnant category demand

Poorer trade relationsPoorer trade relations

Increased costIncreased cost

Quelch and Kenny HBR September 94

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Jack Buckner

Extend profits, not product linesExtend profits, not product lines

RecommendationsRecommendations Improve cost accountingImprove cost accounting

Allocate resources to winnersAllocate resources to winners

Research consumer behaviourResearch consumer behaviour

Manage deletionsManage deletions

CoCo--ordinate marketingordinate marketing

Work with channel partnersWork with channel partners

Findings debatedFindings debated Energizing a brand?Energizing a brand?

Manage a dynamic environment?Manage a dynamic environment?

Consumers are forgivingConsumers are forgiving

Marketers as biologistsMarketers as biologists

HBR on Brand Management

Jack Buckner

SubSub--brandsbrands

Vertical extensionVertical extension

Upwards (The silver bullet concept Upwards (The silver bullet concept Audi TT)Audi TT)

Downwards (Levis signature range) Downwards (Levis signature range)

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Jack Buckner

Guess the Brand?Guess the Brand?

I believe there is no limit to what a brand I believe there is no limit to what a brand

can do. You can ignore those who go on can do. You can ignore those who go on

about brand stretching.about brand stretching.

attitude is, weattitude is, well just get ll just get .to do a .to do a

personal appearance and it will help the personal appearance and it will help the

brand.brand.

There are times a brand has to say There are times a brand has to say nono to a to a

brand extension.brand extension.

Jack Buckner

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Jack Buckner

The Virgin EmpireThe Virgin Empire

Richard Branson founded in 1972 Richard Branson founded in 1972 record shoprecord shop

Virgin airlines Virgin airlines 19841984

1986 went public, 1988 private1986 went public, 1988 private

midmid--19901990s s over 100 companiesover 100 companies

1997 1997 railwaysrailways

Virgin.com and telecommunications late 1990Virgin.com and telecommunications late 1990ss

1999 1999 sold 49% airlines to Singapore Airlinessold 49% airlines to Singapore Airlines

2000 2000 withdraws from clothingwithdraws from clothing

2002 2002 appoints first Brand Marketing directorappoints first Brand Marketing director

Jack Buckner

Virgin Brand ValuesVirgin Brand Values

Richard BransonRichard Branson

Have a goHave a go

Quality, fun, challenge, innovation, Quality, fun, challenge, innovation,

provocativeprovocative

Stylish, young, irreverentStylish, young, irreverent

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Jack Buckner

Virgin Virgin

Successes Successes music, travel, hotelsmusic, travel, hotels

Failures Failures clothing, computersclothing, computers

For every Virgin Atlantic or Virgin music group For every Virgin Atlantic or Virgin music group there have been numerous failures.there have been numerous failures.

For a company so diversified, it is vulnerably For a company so diversified, it is vulnerably dependent on a single brand.dependent on a single brand.

I can do what I want.I can do what I want.

Virgin Direct Virgin Direct we are going to exist for 200 we are going to exist for 200 years and clearly Richard is not.years and clearly Richard is not.

Well, we would not launch a cigarette.Well, we would not launch a cigarette.

Jack Buckner

Brandstretch Brandstretch (David Taylor)(David Taylor)

Why 1 in 2 extensions fail, and how to beat the Why 1 in 2 extensions fail, and how to beat the

odds.odds.

Virgin: the biggest ever brand ego trip?Virgin: the biggest ever brand ego trip?

Strengthen the coreStrengthen the core

Vision, ideas, focus, deliveryVision, ideas, focus, delivery

Brand architectureBrand architecture

Heroes Heroes Gillette Mach 3, Gillette Mach 3, Bacardi BreezerBacardi Breezer, ,

Blockbuster, PampersBlockbuster, Pampers

Villains Villains Tango Tropical, LeviTango Tropical, Levis suits, s suits, easyGroupeasyGroup

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Jack Buckner

Brand AlliancesBrand Alliances

Sony Sony SiemensSiemens

Star allianceStar alliance

McDonalds McDonalds Cadburys CrCadburys Crme Eggsme Eggs

IntelIntel

Movies / Video GamesMovies / Video Games

Jack Buckner

adidas / Cocaadidas / Coca--ColaCola

Strategic alliance proposalStrategic alliance proposal

Global brands Global brands

Collective marketing assetsCollective marketing assets

Similar target audiencesSimilar target audiences

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Jack Buckner

adidas / Cocaadidas / Coca--ColaCola

A global adidas branded sports drinkA global adidas branded sports drink

adidas providesadidas provides

Sports credibilitySports credibility

Sports exposure and networkSports exposure and network

CocaCoca--Cola providesCola provides

Product expertiseProduct expertise

Global distributionGlobal distribution

Jack Buckner

adidas / Cocaadidas / Coca--ColaCola

Income potential for adidasIncome potential for adidas

But risk of brand dilution greater for adidasBut risk of brand dilution greater for adidas

CocaCoca--Cola brand equity and marketing Cola brand equity and marketing

capacity significantly greater than adidascapacity significantly greater than adidas

Budgets would dwarf adidas brandBudgets would dwarf adidas brands effortss efforts

Distribution issuesDistribution issues