Oxford Learning Lab - Brand Management: Principles of Brand Management

Principles of Brand Management

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This session is concerned with the foundations of brand management. It will open by considering some of the issues involved in nurturing brands. To manage brands effectively there needs to be consensus about the nature of the brand in question. As brands are intangible assets a framework will be presented to characterise the nature of a brand. One of the problems is that an inconsistent approach to supporting the brand may result, so a framework to manage this will be discussed. Ways of building more emotion into a brand will be explored.

Course expert

Leslie de Chernatony

Professor - Brand Management

This video outlines the definition of brand as a mix of functional and emotional values which enables the company to offer consumers a unique personal experience, creating ways in which these consumers buy and use brand products to make a statement about themselves, to express symbolically their self- identity. Further on, we analyze how company culture and country culture interact and support each other through brands, strengthening a key element in brand management which is the trust relationship they build between the organization and the customer.

Nurturing brands is a core process in brand management, starting with the definition of brands, the analysis of the balance between reason and emotions involved in perception of brands and further on describing their tangible and intangible aspects. Brand's structure is compared to an iceberg with tangible elements such as symbol, name, package, advertising situated at the surface and the bottom being represented by intangible elements derived as a result of core competence, positioning, culture and personality. This video will provide examples on how these elements combined nurture the brand, turning it into a cluster of functional and emotional values which enables the company to make a promise to its customers regarding the delivery of a high quality experience which they will encounter every time they interact with the organization.

This material explores the question why brands matter starting from a research which was done on two groups of companies: companies that were at some point in top 100 brands over a period of 6 years and others that were not. Results clearly validate the idea of value that a brand brings by comparing the impact of investing in companies from the two different groups. Furthermore, the presentation emphasizes the fact that brands matter as much in the B2B sector as in the consumer sector, due to their strong emotional component.

This material explores the question why brands matter starting from a research which was done on two groups of companies: companies that were at some point in top 100 brands over a period of 6 years and others that were not. Results clearly validate the idea of value that a brand brings by comparing the impact of investing in companies from the two different groups. Furthermore, the presentation emphasizes the fact that brands matter as much in the B2B sector as in the consumer sector, due to their strong emotional component.

What is the most important thing that powerful brands such as Harley Davidson, Disney and Nike have in common? They all deliver a promise which is not necessarily linked to the product or service itself in terms of features and benefits but rather to the emotional needs which are triggered and fulfilled whenever customers use that product or service. However there is a fragile balance between over promise and under deliver and there are some recommended strategies when it comes to designing a promise that will meet customers’ expectations and strengthen the brand identity. Examples provided in the material highlight the fact that the promised experience should be a new, differentiated one; it should have a personal value in order to create an emotional bond and should be consistently delivered and kept at the same standards over time. In this way, a mutual promise between the customer and the organization is created.

A more detailed approach of brand promises is offered, starting with the description of their pyramid structure. Promise must have a rational and functional base but it is the second level represented by the emotional values that really differentiate organizations and create sustainability. In order to invest more emotions in brands we can a take a look at the four component model called Brand pleasures which explores the ideological, individual, group and cultural dimensions of pleasure. Therefore, ideological pleasure relates the brand to a certain system of beliefs and ideas, individual pleasure associates the brand to a personal achievement whereas the group dimension refers to the emotion of group belonging, expression of status and the feeling of bonding between individuals facilitated by the brand promised experience. Finally we have the cultural pleasure which can give the brand an iconic dimension.

360 Brand experience is an important tool in brand management which basically ensures that the customer will live the experience promised by the organization at the same level in all his contacts with the brand. 360 Brand experience has as psychological background the fact that people are sensitive to the product or service itself but also to the environment through which the brand is displayed and sold. Also, another important element is the behavior of staff and here we have the notion of empowerment presented-if the brand is powerful, the promise is understood and believed and will be therefore enacted by employees. Finally, the last instrument used to enact this promise in a 360 manner is communication. In order to make sure that the brand represents a 360 enactment of promise it is necessary to analyze the journey of customers starting with their pre-purchase behavior, the purchase touch points and the post purchase factors that influence satisfaction. Thus, the brand experience should be consistent at every point of customer interaction.

Memorable experience comes from combining functional and emotional values to obtain an experiential promise. Designing memorable experience consists firstly in choosing a theme for the experience itself, then positive cues are added to harmonize impression and negative cues are eliminated. Finally an important element is represented by memorabilia, a set of things that usually stimulate all senses and make the experience remarkable and worthy of remembrance.

This material explains brands’ development in time and also presents their main stages of evolution. The surface elements of the brand: the logo, the name, the symbol are important but they must be linked to a core promise so differentiation is created. Then comes positioning expressed through competence. Further exploitation of the emotional level brings in personality, integrated by visionary components. In the end, the final product/service gains value, thus people become loyal to a brand and are ready to pay more for it.

What do we need to do for our brand to succeed on the market place? This presentation tries to offer the best answer to this question relying in the results of a research done by Kevin Keller from Dartmouth College using multiple examples of successful but also of not so wise brand decisions during time. In terms of characteristics of successfulness, brands must have a very powerful functional base which represents a guaranty of quality and excellent benefits. Secondly, the brand has to remain relevant in terms of what it stands for: the category of individuals it addresses to, the type of situations in which the brand is used and generally all those factors which outline the personality of the brand. Thirdly, the pricing strategy is based on the perception of brand value that both customers and other companies perceive. Other characteristics relate to the efficient positioning and consistency of the brand.

Continuing the list of characteristics mentioned in the previous material, we move further to brand architecture which implies the idea that the brand portfolio and hierarchy make sense because many companies have different brands for different customer segments. Next we have coordinated support which includes research and development, selling activity, distribution channels, all these activities being linked through the core central brand promise assuring in this way the 360 Brand experience. This links to another important characteristic which is understanding customers’ needs and delivering the benefits they innermost desire. The list continues with long term support because the brand develops in time and needs to be sustained especially during difficult moments such as recession. Lastly, the company should monitor continuously the source of brand equity by studying brand drivers such as awareness, beliefs, relationships and intentions to repurchase.

The world as we see is oriented to norms and conformity so what the brand needs to do is stand out as a unique entity based on distinctive attributes. How can we better differentiate our brand? Two models are used to answer this question. One is David Archer’s model which states that there are 3 potential ways to achieve this. The brand can be differentiated due to the impact that the organization’s activities have upon the customer through the brand in terms of design, logo and package. The model improves when the organization is differentiating the brand taking into account the minds of customers who buy and use the brand. Basically, in this case it is the user who makes the differentiation not the organization and he does that in a personal way which reflects who he really is. Furthermore the model can expand to component number three which states that the brand could differentiate in terms of the way the user of the product or service interacts with his peer group because his interactions could reinforce some aspects of the brand.

The second model brought into discussion was designed by Jean Noel Kapferer and proposes a new concept of brand identity which could also be used as a creative tool for a better brand differentiation. Companies use constructs like physique referring to function, form and personality which represent the basis for differentiation. As the brand identity develops, the internal culture of the company results in an external interaction between staff and customers which eventually will evolve into a relationship, a very important element of differentiation. The final two components are the internal and external reflection which show what we infer about ourselves and what others infer about us by using a certain brand.

  14.  Added value

An essential element in brand management is added value. This represents the resources that the company invests in the brand but which on a long term bring back profit. Added value means that finished goods can command a higher price than the cost of their component parts. Creativity plays a crucial role meaning new benefits should be discovered in order to add value to the basic form of the product/service. However these benefits can be real or not, sometimes unexpected pleasant perceptions induced by creative use of added value devices can be regarded by the customer as benefits. Another perspective on added value relates it to more satisfied customers and a price lower than the price premium. This follows the idea that if a company develops a service or a product it gains knowledge and experience and this learning process associates with higher sales finally leading to a smaller cost which does not reduce profit nevertheless.

Environment in brand management is also related to added value and it is estimated to represent 20 % of the total cost of the product but yet it holds about 80% of customer impact, therefore we can clearly notice the importance of surround. This material presents a series of examples which reflect how surround supports the brand, sometimes in a very creative unexpected way. Basic strategies involved include lower prices, tilting quality price balance and analyzing the benefits-sacrifice balance from the customer’s perspective.

Service mapping is also strongly correlated with added value and with the ways an organization can deliver the brand through its partners. It emphasizes the need to map the consumer’s experience of receiving service in order to monitor the problems he might possibly encounter at each step of interaction. New strategies of adding value to brands are provided such as using experience to find creative ways to please the customer, product or service bundling to increase benefits and using time as a psychological benefit.

This chapter further develops the idea of added value as a dynamic and complex concept and starts with another important strategy of adding value which is co-creation. This basically means that the customer is involved in the process and tailors it for his needs. Other examples of how the organizations have added value through brands refer to rituals and events to which the brand is attached to, symbols of brands which create the feeling of familiarity in foreign environments, desire generated by the aloofness of certain brands, especially luxury ones. What we need to keep in mind though is the fact that added value must be reinvented continuously because in time it becomes something taken for granted and it no longer creates the idea of a benefit.

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