Brand Architecture Mkt 5486 Chapter 11 12 Thomas

Brand Architecture Mkt. 5486 Chapter 11 & 12 Thomas Murphy Marketing Professor GSOM

Which Products Should Be Added to a Brand ? Principle of Growth Compare new product options on the basis of a ROI and future market opportunity that justifies the investment Principle of Survival New products must be able to survive on their own because of unique equity Principle of Synergy Brand extensions must add equity to the brand fit within the brand context Brand Extensions Growth Survival Synergy • ROI • New Markets • Avoid Me Too • Chevy Volt ? • Image • Elements • Mc. Cafe

Brand Hierarchy Levels Corporate Can also be company within a corporation. This level is important in terms of building a strong image as a likeable overarching brand CORPORATE “Disney” FAMILY Family also called umbrella brands since they encompass various sub brands within a family. Family brands stay within a market category of related products, such as foods “Buick” within GMC is a family brand Individual brands typically stay within a single product category “Levi Jeans” but can have multiple products within the brand Theme Parks Walt Disney World ESP N Disneyland INDIVIDUAL Epcot MODIFIER Modifier Level Brands “Levis Stonewashed Jeans” sub product brands that describe a particular use or version.

Team Exercise Build a Brand Corporate • HBO CORPORATE “HBO” FAMILY Individual brands typically stay within a single product category “Levi Jeans” but can have multiple products within the brand Modifier Level Brands “Levis Stonewashed Jeans” sub product brands that describe a particular use or version. INDIVIDUAL MODIFIER

How Many Levels of Sub Brands Should There Be Principle of Clarity More sub brands can add chances to further describe brand advantages in different ways Principle of Simplicity Less complex products require fewer levels of sub branding. In general 3 sub levels are the maximum before brand equity is diluted Principle of Relevance Further levels of a product must have a clear reason to exist and a logical connection back through the brand chain Brand Complexity Clarity Simplicity • Further Definition • Gatorade “G” Series • Perform • Natural • Pro • 3 Level Maximum • Light Bulbs • Batteries Relevanc e • Reason for the level to exist • Acura • TL ? • TL 2. 5 ? • RSX ?

What is the Best Way to Link Products to Brands Brand Linking Principle of Prominence The primary brand element takes center stage and conveys the key difference and brand equity Prominence Endorsement • Droid by Motorola • General Mills • Wheaties A subliminal brand association from the parent brand through packaging or logos • Hilton Garden Suites • Kelloggs • Frosted Flakes Principle of Commonality • Courtyard by Marriott Principle of Endorsement Leveraging brand elements, prefixes and associations across multiple sub brands makes the entire brand its elements stronger Commonality • Mc. Donald • Mc. Cafe • Mc. Nugget • Mc. Rib • BMW • 3 • 5 • 7

What is Brand Architecture ? • Breadth versus Complexity Brand Architecture defines the boundaries {Breadth} and the complexity {Depth} of a brand its offerings to the market The Boundaries of a brand reflect the categories of products, services and benefits that a brand is focused upon in order to maximize its image and success within a market. Essentially it is the product line portfolio The Complexity of a brand determines the number of products, variations, sizes and price ranges that are most effective within each product line. Snacks Beverages Fast Food PEPSI BRAND BOUNDARIES PEPSI BEVERAGE COMPLEXITY Lipton Pepsi Gatorade Tropicana

The Role of Brand Clarify Awareness Architecture • Similarity • Benefits • Differences Strengthen Image • Corporate to Family • Family to Products • Products to Channels

Brand Architecture

Brand Architecture Categories

Brand Architecture Categories

Brand Architecture Decisions Elements of a Brand Architecture Strategy Brand Portfolio Brand Extensions The balance of different brand New Products added under an existing brand name families {Brand Mix}, each with its{Toyota Avalon}. Line extensions are within an existing category {Reese’s Pieces}. Category extensions extend a brand own unique brand name and logo, to cover the breadth of product categories that Brand Extensions encompass the capabilities of a Brand Portfolio company and the needs of a House of Brands broader market opportunity Corporate Brand House of Brands How to leverage uniquely different brands within an overall corporate brand {Swatch Group: Breguet, Blancpain, Glashütte Original, Harry Winston, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Calvin Klein Watches + Jewelry, Balmain, Certina, Mido, Hamilton, Swatch, Corporate Brand Developing and leveraging the image and equity of the corporate brand Branded House} through Corporate Social Responsibility,

Marriott Brands

Brand Portfolios Portfolio Benefits Market Coverage Retain Strength Brand Protection

Campbell’s Soup Brand/ Product Matrix Campbell Soups Beverages Condensed Wolf. Gang Puck Tomato Juice Sauces Other Chilli, Meatballs Prego Pasta Pace Picante, Salasa Verde V 8 Snacks Vegetable, Blends, Splash Pepperidg e Farms Goldfish Crackers Cookies, Bread Arnott’s Biscuits, Cookies Crackers Swanson Brand Portfolio Broths Campbell Food Services

Reasons to Expand a Brand Portfolio • Cover a segment current brands do not reach • Flank and protect flagship brands • Add a higher end prestige product • Attract customers who demand variety • Convince retailers to increase shelf presence • Economies of scale High End Brand Entries Low End Brand Entries

Step 1: Establish a Brand Vision What is The Brand Today ? What Might The Brand Become ? What New Markets Could Be Served ?

Step 2: Understand Set Boundaries Market Points of Parity Market Reach & Growth Uniqueness of Benefits Resources and Channels

Brand Boundaries Limits to Growth Volkswagon has a vision of overtaking Toyota in North America with higher end automobiles They launched a luxury version called “Phaeton” in 2004 at a price of $85, 000 to compete with high end Toyota, Mercedes and BMW. But they could not get beyond the strong image they created in the market as an economy sedan SUV Luxury Sedan Economy Car

Team Challenge: Determine Boundaries and Vision for “Under Armour” Market Points of Parity Segment Reach & Growth Uniqueness of Benefits Resources and Channels

Step 3: Brand Positioning Current Gap Inherent Vision 1. Brand Association Uniqueness 2. Continued Brand Character 3. Marketing Success Over Time Persistence Value Growth 1. Current Customer Spending 2. New Customer Attraction Opportunity Image

Brand Extensions Any new product introduced under an existing brand name Line extensions are brand extensions within the existing product categories Category extensions are extensions to a brand that carry the same brand name but expand to a new product category Sub Brands are extensions that carry both the parent brand the new category brand name Apple IPhone Iphone 5 C IPad 6 Tablet Ipad Air

Types of Brand Extensions Line Category Same product category with a new product form, size or application Parent Brand to enter a New product category Sub Brand Extending a parent brand with a hybrid brand architecture

Advantages of Brand Extensions Credibility Enhanced Parent Image Channel Acceptance Reduced costs of Marketing Customer Variety Protecting Major Products Revitalize a Fading Brand Exposure to New Segments

Positive Brand Extension Associations Weight Watchers • Fitness Centers • Low Calorie Foods Kellogg’s • Cereal • Nutri-Grain Bars Google • Search Engine • Apps

Disadvantages of Brand Extensions Clutter Confusion Stock Drop “Crest” “Campbell Soup” Spread Too Thin Brand Image Diluted “Google” “Gucci” Cheapen Parent Brand “Maybelline” Cannibalize “Pepsi Max”

Vertical Brand Extensions Levi Vintage Collection Premium Value Levi Signature Collection Better Quality Levi d. ENIZEN Collection Original Brand Discount Offer

Vertical Brand Extension Issues New Customers Do not see the Added value Channel partners Begin to discount Premium Value Better Quality Original Brand Lower level cheapens the image Discount Offer

Brand Extension Success Select the Right Opportunity Consumer Readiness Competitive Response Corporate Brand Equity Choose Wisely

Brand Extension Success Have a Brand Element Strategy Borrow from a Strong Corporate Brand Create New Elements In a New Market Packaging & Design Match Elements

Brand Extension Success Match the Strategy to the Market Adapt to New Cultures Maintain Some level of Brand Separation Insure there is Some Fundamental market Need Match the Market

Building Strategic Brands Things to Consider Brand Decisions have both a Left Brain {tactical} and a Right Brain {strategic} path Brand “Vision” is a higher order purpose of a brand to develop strategic loyalty. { “Connecting People”} Brand Mission defines the unique difference a brand brings to meet a critical need of a target market The Brand Portfolio is the set of independent brands that achieve the Mission Barriers can include challenges in terms of shifting markets, customer needs or emerging primary and secondary competition The right channels influence success and build future growth Brand Potential “Vision” Branding Channels Brand Mission Left vs Right Brain Branding Brand Portfolio “Mix” Promote and Position Brand Barriers

Strategic Brand Opportunity is a Combination of the Right Mission, Growth Potential and Management of Barriers Branding Mission • Mantra to describe the key brand benefit to a focus customer segment • Strategic Focus in terms of future target growth area that the brand wishes to take … diversification, expansion etc. Growth Potential • Emerging Global markets and product categories which are likely to shape long term growth potential • Channels that are likely to emerge as strongest vehicles to reach the market Missio n • Mantra • Focus Growth • Global • Channel Barrier • Image • POD Barriers To Success • Brands carry certain associations that prevent moving outside the comfort zone of customer perception • Brands must know the extent of their capability to add unique differentiation in categories and competitive markets

Mc. Donald’s Brand Penetration 2003 -2005 promotional campaign for healthier menu choices, leading to market share turnaround Mc. Donald’s Brand Development Brand Penetration 2001 Mc. Cafe brand extension with Mc. Donald’s Premium Roast Coffee to compete with Starbucks …. Also the globally localized menus in Japan {Teriyaki Burger} and England {Vegetable Nuggets} Price and Promote Existing Brands in Current Markets Mc. Donald’s Market Development Category Extension of existing brand to new markets 2008 expansion of new locations into China and locally customized menus in India Mc. Donald’s Portfolio Diversification None to date Market Development Brand line extensions to current market Brand Portfolio Diversification Launching a new brand family to new markets

Brand Decision Matrix In Class: Team Exercise Select 1 of the Following Brands • • Samsung Bacardi Mercedes Benz St. Regis Hotels Determine Existing Brand Architecture Identify any Barriers to Growth Brand Penetration Price and Promote Existing Brands in Current Markets Market Development Category Extension of existing brand to new markets Brand Development Brand line extensions to current market Brand Portfolio Diversificatio n Launching a new brand family to new markets

Wall Street http: //www. huffingtonpost. com/2011/06/22/brands. Journal disappear-dyingus-2012_n_881911. html#s 296069&title=10_Nokia Brands that Will Disappear in 2012 Gone Blockbuster Sears American Apparel A&W Sony Pictures Saab My Space Nokia Sony Erickson Dollar Thrifty T-Mobile Going by 2015 Kodak Netflix US Post Office Blackberry

P&G From House of Brands to Branded House Dramatic shift away from individual brand families. . Pantene, Crest , Gillette, Tide P&G believes its increased focus on sustainability creates a positive umbrella image They are advertising in the UK to reinforce the P&G corporate brand as healthy, sustainable products Competitors such as Unilever and Heinz already leverage a Branded House strategy http: //manifestedmarketing. com/2010/12/3 1/proctor-and-gamble-corporate-brandingvs-multi-branding/

P&G From House of Brands to Branded House Tide, Pampers, and Crest under pressure from investors over profits forecast downgraded three times this year Over the past 18 months, however, P&G has been changing from that house of brands architecture to one of ‘brand endorsement’ in which the P&G logo now exists alongside each product. The company’s Olympic sponsorship is important not only because it will cost P&G an estimated £ 150 m over the next decade to execute but because it is the first to promote the P&G corporate brand directly to consumers as part of this new endorsement strategy. But the last 15 years have seen a dramatic change in the competitive environment for consumer goods. The biggest brand in almost every grocery category in the UK is now a private label. And aside from all the other manifest advantages enjoyed by private labels, these products also exhibit the most economic and focused approach to brand architecture - a branded house. Tesco, Sainsbury’s and Waitrose all offer multiple product lines within their private label offerings but they do so from the advantageous confines of a single master brand approach.

Top Retail Brands Interbrand Ranking It shines a spotlight on the biggest gainers this year stateside in terms of brand equity (Macy’s, Amazon), chains that are building momentum, marked by newcomers on the list, (Anthropologie, Cabela’s), as well as stores whose brand value has waned (Abercrombie & Fitch), and ones that have fallen off the list entirely (Toys “R” Us). Macy’s • Macy’s zoomed up the list more than any other retailer, increasing its brand value by 62 percent to rank 40, up from 49 last year • The retailer’s decision nearly a decade ago to drop all of its regional department store nameplates — from the Bon Marche in Florida to Marshall Field’s in Chicago – and convert them to the Macy’s brand has paid off, despite ample criticism at the time that the stores would lose their local flavor • “It’s truly validated their commitment to a single brand strategy across markets • the department store has honed a “best-in-class, omni-channel” message via its brick-and-mortar stores, e-commerce and mobile sites, firing on all cylinders with compelling merchandising initiatives and by leveraging a roster of brands that appeal to its diverse shopping base

Unilever Considers Divesting the Food Brands Unilever has major brand families in household products , personal care and Foods Considering divesting its Hellman’s Mayonnaise brand salad dressings due to lagging sales Wants to balance personal care and household products to build a stronger portfolio and brand image http: //www. ft. com/cms/s/2/1 a 038836 -0 bb 8 -11 e 1 -931000144 feabdc 0. html#ixzz 2 Of 8 r 0 o. Cj

Top Retail Brands Interbrand Ranking It shines a spotlight on the biggest gainers this year stateside in terms of brand equity (Macy’s, Amazon), chains that are building momentum, marked by newcomers on the list, (Anthropologie, Cabela’s), as well as stores whose brand value has waned (Abercrombie & Fitch), and ones that have fallen off the list entirely (Toys “R” Us). Walmart Amazon Sams Walgreen Target CVS EBay Home Depot Coach Nordstrom

Pepsi Changes Packaging to Revitalize Brand New shape of 20 -oz. Pepsi bottle has contoured bottom half, easier for holding Wraparound label is shorter so that more of the beverage is visible Soda drink maker wants to revitalize brand after losing market share to Coca-Cola recently Despite Pepsi. Co's stepped up efforts, its beverage volume in North America declined 4% last year. That included a 4% decline in carbonated soft drinks and a 3% drop in non-carbonated drinks Pepsi. Co makes a wide range of products, including Frito-Lay chips, Gatorade and Quaker Oats. . But it has long been defined by its namesake soda and its rivalry with Coca-Cola.

Video Examples Branding Campaigns Audi 4 Rings http: //www. youtube. com/watch? v=au. E d. EYY 3 ao 4 Audi commercial connects the 4 competitive advantages into 1 Audi brand Carlsberg uses theme around “Standing up for a Friend … Calls for a Carlsberg” http: //www. youtube. com/watch? v=vs 1 w. Mp 84_BA

Ranking and Selection Weighted scoring criteria can be applied to reflect both the potential value of an option as well as its chance of success. By separating the total possible value of decision options {YAxis}, from the risks and enablers of success {X-Axis}, the set of possible decision options can be separated into 4 distinct areas Upper Left : highly valuable but with risks that need to be reduced. Second tier options for investment Upper Right: highly valuable and ready to implement. First tier options to invest Lower Left: lacking in potential value and unlikely to be successful. Do not invest Lower Right: likely to be successful but lacking in potential benefit / value. Reshape or reduce scope prior to investing. Third tier of ranked investments.

Sun Tsu • Opportunities multiply as they are seized. • He who knows when he can fight and when he cannot will be victorious. • To know your Enemy, you must become your Enemy • One defends when his strength is inadequate, he attacks when it is abundant • Speed is the essence of war. Take advantage of the enemy's unpreparedness; travel by unexpected routes and strike him where he has taken no precautions. • The best victory is when the opponent surrenders of its own accord before there any actual hostilities. . . It is best to win without fighting • When the enemy is at ease, be able to weary him; when well fed, to starve him; when at rest, to make him move. Appear at places to which he must hasten; move swiftly where he does not expect you. • The quality of decision is like the well-timed swoop of a falcon which enables it to strike and destroy its victim. • The ultimate in disposing one's troops is to be without ascertainable shape. Then the most penetrating spies cannot pry in nor can the wise lay plans against you. • Build your opponent a golden bridge to retreat across. • There is no instance of a nation benefitting from prolonged warfare