3 - Developing & Managing Brands SPRING 2013 UPDATED COPY (1)

7/27/2019 3 - Developing & Managing Brands SPRING 2013 UPDATED COPY (1)

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ADOPT ABRAND!BRAND MANAGEMENT [ELECTIVE]

HAVE YOU FORMED

YOUR GROUP &

SELECTED YOUR

BRAND?


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DEVELOPING &

MANAGINGBRANDS

BRAND MANAGEMENT [ELECTIVE]BOOK CH.6


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Developing & Managing Brands

Since the1990s companies

have been well aware thatbrands are an asset [to] bereinforced and nurtured by

tangible innovations andintangible added values.


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The Rules of Brand Management

1.

Act as leader, be passionateabout raising category standards.

2. Sustain brands through

innovations in line with theirpositioning.

3. Create direct ties with end

customers, especially in marketswhere the trade pushes itsbrands.

4. Deliver ersonalized services.


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The Rules of Brand Management

5. Reward customers whobecome active promoters ofyour brand.

6. Encourage communities thatshare your values.

7. Quickly globalize the brand andits products.

8. Be ethical: big is not beautiful

any more.


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NEW Rules of Brand Managementneeded

WHY?

The traditional modelfor

managing brands, developed &practiced by successful globalFMCG companies like P&G and

Unilever, is now outdated &obsolete.

WHY?


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The New Rules of Brand Management:The Traditional Model

The Traditional Model was basedon the belief that:

1. A SUPERIOR PRODUCT was awinner as it responded betterto acustomers expressed need.

2. Linear thinking works:Promotions Trial Repurchase

Loyalty


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The New Rules of Brand ManagementFOUR Stumbling Blocks

1. [Superior product?] Absence of

durable, meaningful differences

between products.

2. Shortage of shelf space, superstores/

wholesalers pushing own products.

3. Split audiences who are also out ofthe range ofmass media.

4. Depleted loyalty - promotions making

customers even more sensitive to


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The New Rules of Brand Management:There are Cheaper Alternatives!

Cheaper alternatives to major brandsnow hold significant market shares in

most sectors: from FMCG sector toElectronics.

Chinese/ Korean imports replacing

many B2B/ B2C brands.


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The New Rules of Brand Management:Surge in Private Labels

In Carrefour outlets (UK):

Danone yogurts had replaced Nestle.

Now, Carrefouryogurts havereplaced Danone.

Tropicana was the leading juicebrand at Tescos.

Now Tesco Finest is replacing

Tropicana.


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The New Rules of Brand Management:The Market is Changing

1. Cheaper imports demonstrate that

traditional brand = universalbrand i.e. the response to all

customers needs.

3. Ability of brands to be present &

visible in every segment is A BIG

CHALLENGE.

2. Markets are now more & more

segmented by price - different brands

excel in different price segments.


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How P&G Has Been Managingits Brands!

At P&G every one of its brands has

to be the superior product.

P&G only launched mass-consumptionproducts that spoke for themselves &

made the difference in use.

Pampers: keeps the baby must bedrier;

Ariel washes better, & the difference

must be visible to the naked eye


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The New Rules of Brand Management:Is A Great Product = A Great Brand?

Maybe!

Continued ad infinitum it may lead the

brand to deliver diminishing returns.WHY? Investing for ever & ever in making a

Michelin tyre safer would result in

prohibitively higherprice & affect sales.


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One Dimensional Marketing

One-dimensional marketing is based on

a single, linear idea: BEST

PRODUCTBUY!

A One-Dimensional figure is A LINE, aline segments, a ray etc.

WHAT IS:ONE-DIMENSIONAL MARKETING?


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Limits to one dimensionalmarketing

2. Cost of marginal improvements isbecoming higher & higher.

1. A superior product is hard to CREATE,MAINTAIN & SUSTAIN.

3. Customers notice the higher price

easily, but the benefit increment goes

unnoticed.

One-dimensional marketing strategyhas reached its limits!

WHY?


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Limits to one dimensionalmarketing

EXCEPTION:

Gillettes one-dimensional model

still works. the art of planned obsolescence.

Over 3 decades, it has increased prices

significantly & out-run competition,through continuous innovation:GII Contour Sensor SensorExcel Mach3 Fusion/ FusionPower Proglide.


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New Brand Realities!

The NEW APPROACH TO BRAND

MANAGEMENT is the outcome ofthe adaptation of companies tothe new business environment.

HOW HAS THE BUSINESSENVIRONMENT CHANGED?


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A.THE RISE OF THE SHOPPER:

i. Shopping a favorite past-time: malls,

arcades, shopping centers, factoryoutlets draw shoppers.

ii. Shopping is no longer a race it iseither a chore or a leisure activity.Shoppers & consumers are often notthe same person.

iii. Service and variety have becomeimportant considerations.


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Nutella, Mars, M&M, Orangina, Boursin aresingle product specialty brands- Is theirfuture secure?

iii. Retailer brands dominating in

superstores: Retailers, Super- &

Hyper-markets investing in brands &match Mass brands.

WHAT IS THE FUTURE OF BRANDS

LIKE


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C. FRAGMENTING MEDIA: CHALLENGEOR OPPORTUNITY:

i. More TV programs & hours to choosefrom.

ii. TiVo in 32% households in the UScreating TV without advertising.

iii. Internet a major rival of network TV: InEurope 50% of media consumption isnow interactive.


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Google bought MySpace in 2006 &

YouTube.com some months later.

Google has launched Google TV: a

totally a la carte service. IS FRAGMENTATION A CHALLENGE

OR OPPORTUNITY?


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iv. New media is growing rapidly, but it is

unlikely to completely dislodge major

traditional media such as TV or Print.

v. Print media: going online!



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vi. TV is reasserting itself as anAUDIENCE AGGREGATOR

with redesigned Talk Shows, News

formats, iReporters, news/ videoson Websites, news on Twitter etc



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D. CONSUMER EMPOWERMENT

Technology rewriting rules of

engagement:i. More mobile phones sold than TV sets;

ii. Nearly 20% internet users visit sites

dedicated for comment on products.

iii. Traditional media pick upconversations from blogs.


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D. CONSUMER EMPOWERMENT

Internet is no longer a vision it iseasy, practical, offering a variety ofservices, information & games;

Blogs = the truth of the market;

Brand websites have become theofficial consumer magazines.


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E. THE BIRTH OF THE CHOICEECONOMY

Growing demand for:

Product personalization, Services & image-based social

differentiation.

iPod & iTunes users create own

ro rammin .

Brands have lost their leverage [no

quality differential between brands;

minimal between branded & unbranded

products.


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F. THE POWER OF COMMUNITIES:

Community marketing has a special

status in the US: Hispanics, African-Americans, Chinese Americans, affect

brand creation & communication.

Internet: a major facilitator of

interconnected marketing

communities.


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Danone & Nestle websites areespecially designed to advise youngmothers;

Nikes involvement at street levelwith rappers & sports enthusiasts iscommunity marketing.

THE POWER OF COMMUNITIES: Phone companies offerservices to

sports fans by providing updates on

matches;


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G.THE LIMITS OF MONO-DISTRIBUTION

Coca-Colas strength is its multipledistribution channels Virgin Cola unable

to compete in distribution

Danone is weak. WHY?

Over-dependent on big supermarkets. LOral successful as a brand for self-

service stores. NOW, more & more self-

service stores are promoting THEIR OWNbrand.


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in Reverse!

Building the Brand


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The Traditional Way of Building theBrand

Unfortunately, the traditional model isnow being openly questioned! WHY?

It has become too predictable!

STEPS:

1. Develop Product/ Brand

2.Achieve optimal distribution3. Launch marketing communication.


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Experts suggest an alternativeapproach

Building the Brand

in Reverse

starting much early

.with communication.


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Building the Brand in Reverse

Idea popularized by a French expert asthe Concept of Brand In Reverse.

HOW DOES IT WORK?

1. Rearrange sequence of brandintroduction.

2. Convert a brands first set of customersinto brand ambassadors GET A

CONVERSATION STARTED.

B ildi h B d i R


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Building the Brand in Reverse:So, What Comes First?

It is at the moment of conception ofthe

product or service (of choosing thename,

packaging etc.) that it is necessary toinject

the power ofcontagion not at theend,

when it is too late.

B ildi h B d i R


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Nike launched its Converse brand of

shoes using a community approach

by creating the CONVERSEGALLERY involving customers.

Advertising is not used for Converse..

UPDATE: On Sep. 12, 2013, Converse &Maison Martin Margiela celebrate the launch

of a new collection: Sep 12, 2013.

B ildi h B d i R


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BMWbefore launching the 3-, 5-, 7-

Series in the US, uploaded long-duration(4-5 min) films on the net, for viewers tosee at their leisure and experience theperformance of the car. The responsewas simply outstanding!


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From Brand Power to Brand Passion

Entrepreneurs like to change the worldwith their ideas. They succeed, becausethey turn their idea into a source ofpassion for others!

For LOreal: a womans happiness canonly be found in science and its ability to

turn back the years.


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From Brand Power to Brand Passion

For Nissan low supplier prices lead toLOWER PRICED CARS.

For Toyota QUALITY is the obsession.

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