CH-6-8 Integrating Marketing Communications to Build Brand Equity – Strategic Brand Management: Building, Measuring, and Managing Brand Equity : Chapter Notes

This Document Contains Chapters 6 to 8 Chapter 6 Integrating Marketing Communications to Build Brand Equity Chapter Objectives 1. Describe some of the changes in the new media environment. 2. Outline the major marketing communication options. 3. Describe some of the key tactical issues in evaluating different communication options. 4. Identify the choice criteria in developing an integrated marketing communication program. 5. Explain the rationale for mixing and matching communication options. Overview This chapter describes the new media environment and role of marketing communications in building brand equity. Advertising, promotions, direct marketing, event sponsorship, personal selling, publicity, public relations, and other forms of marketing communications are the means by which firms stay in touch with consumers and form relationships with them. They can help build customer-based brand equity by affecting brand awareness; by creating, reinforcing or strengthening favorable and unique band associations; by eliciting positive brand judgements or feelings; and facilitating brand resonance. A communication campaign should contain a mix of options, each selected based on its ability to achieve specific objectives and to integrate with other options to maximize brand equity. The options included in a mix should, through their complementarity, produce results that are greater than the sum of their individual effects. Whenever possible, options should be linked to one another through the use of common visual or verbal information. Such links, or cues, enhance consumer motivation, ability, and opportunity to process and retrieve brand-related information. Hence, they facilitate the formation of strong, favorable, and unique associations. Components of a communication strategy can be judged for their ability to achieve the desired brand knowledge structures and elicit the differential response from consumers that creates brand equity. Six success factors for advertising are identified: consumer targeting, ad creative, consumer understanding, brand positioning, consumer motivation, and ad memorability. A flexible marketing program is one that contributes to brand equity in a number of different ways. Each type of marketing communication tool is evaluated in the chapter. These include all advertising, in the form of television, radio, print, direct response, online, place (billboard, poster, movie, airport, product placement). Also included are promotions – sales promotions, consumer promotions, and trade promotions; event marketing and sponsorship; public relations and publicity; and personal selling. The chapter discusses the importance of integrated marketing communication for maximizing the contribution to brand equity of a brand’s marketing program. An integrated marketing communication program must be judged on six criteria: coverage, contribution, commonality, complementarity, versatility, and cost. Brand Focus 6.0 discusses how to coordinate media buys in order to maximize brand equity. Strategies for coordination include the implementation of brand signatures and ad retrieval cues, designing complementary media schedules across media, and developing television campaigns over time. Science of Branding THE SCIENCE OF BRANDING 6-1 THE IMPORTANCE OF DATABASE MARKETING Regardless of the particular means of direct marketing, database marketing can help create targeted communication and marketing programs tailored to the needs and wants of specific consumers. Database marketing is generally more effective at helping firms retain existing customers than in attracting new ones. Many marketers believe it makes more sense the higher the price of the product and the more often consumers buy it. Database marketing pioneers include a number of financial services firms and airlines. Even packaged-goods companies are exploring the possible benefits of database marketing. Database management tools will become a priority to marketers as they attempt to track the lifetime value (LTV) of customers. THE SCIENCE OF BRANDING 6-2 COORDINATING MEDIA TO BUILD BRAND EQUITY For brand equity to be built, it is critical that communication effects created by advertising be linked to the brand. There are a number of reasons why TV ads in particular do not “brand” well: • Competing ads in the product category can create interference and consumer confusion. • “Borrowed interest” creative strategies and techniques may grab consumers’ attention, but result in the brand being overlooked in the process. • Delaying brand identification or providing few brand mentions directs attention away from the brand. • Limited brand exposure time in the ad allows little opportunity for elaboration of existing brand knowledge. • Consumers may not have any inherent interest in the product or service category, or may lack knowledge of the specific brand. • A change in advertising strategy may make it difficult for consumers to easily relate new information to existing brand knowledge. Strategies to Strengthen Communication Effects One common tactic marketers employ is to make the brand name and package information prominent in the advertisement. Although consumers are better able to recall the advertised brand, there is less other information about the brand to actually recall. Three potentially more effective strategies are brand signatures, and retrieval cues, and media interactions. Brand Signatures The brand signature is the manner by which the brand is identified in a TV or radio ad or displayed within a print ad. An effective brand signature often dynamically and stylistically provides a seamless connection to the ad as a whole. Ad Retrieval Cues These cues are visual or verbal information uniquely identified with an ad that is evident when consumers are making a product or service decision. The purpose is to maximize the probability that consumers who have seen or heard the cued ad will retrieve the communication effects stored in long-term memory. Ad retrieval cues may consist of a key visual, a catchy slogan, or any unique advertising element that serves as an effective reminder to consumers. Media Interactions Cueing a TV ad with an explicitly linked radio or print ad can create similar or even enhanced processing outcomes that can substitute for additional TV ad exposures. Moreover, a potentially useful, although rarely employed, media strategy is to run explicitly linked print or radio ads prior to the accompanying TV ad. The print and radio ads in this case function as teasers and increase consumer motivation to process the more complete TV ad consisting of both audio and video components. Branding Briefs BRANDING BRIEF 6-1 BRAND BUILDING VIA THE X GAMES Although the action sports industry contains a variety of high-energy and sometimes potentially high-risk sports, it is largely defined by various forms of skateboarding, snowboarding, surfing, and BMX biking. ESPN’s X Games, begun as a biannual event in 1995, remain at the forefront of the industry. They are ESPN’s largest owned and operated property and are regarded as the gold standard in the action sports world. X Games quickly grew into a franchise that has staged more than 65 events attended by more than 2.5 million fans. It has successfully launched a variety of brand extensions in consumer products and home entertainment and touches all seven continents. ESPN believes the evolution and growth of all elements of the X Games have positioned it well for continued successes—in brand perception and relevance, live event attendance, record-setting broadcast viewership and ratings, increased sponsor investment, and overall popularity and incorporation into the mainstream. Partners for X Games 17 in the summer of 2011 were chosen based on their ability to meet the various needs of the sponsors, the X Games franchise, and ESPN as a whole. Brand Focus BRAND FOCUS 6.0 EMPIRICAL GENERALIZATIONS IN ADVERTISING Empirical generalizations emerge from careful, thoughtful research. Empirical generalizations are not formal laws themselves and there may be important exceptions and boundary conditions as to when they operate. Nevertheless, they suggest three possible benefits to having some empirical generalizations: 1) as a starting point in the development of an advertising strategy; 2) as an initial set of tentative rules that management can follow; and 3) as a benchmark, giving management some sense of how much change to expect when advertising is launched or something changes in the advertising environment. The empirical generalizations can be grouped into four broad topics: ROI; 360-degree media planning; value of TV; and creative quality. Discussion questions 1. Pick a brand and gather all its marketing communication materials. How effectively have they “mixed and matched” marketing communications? Have they capitalized on the strengths of different media and compensated for their weaknesses at the same time? How explicitly have they integrated their communication program? Answer: Answers will vary. Students may assess the four vital ingredients to the best brand-building communication programs (advertising and promotion, interactive marketing, events and experiences, and mobile marketing). Brand: Coca-Cola Effectiveness of Mixing and Matching Communications: Coca-Cola effectively utilizes various channels like TV, social media, sponsorships, in-store promotions, and billboards. They leverage the emotional appeal of TV and digital ads, engage audiences through interactive social media, and maintain constant visibility with outdoor ads. Capitalizing on Media Strengths and Compensating for Weaknesses: They use TV and digital media for broad reach and emotional storytelling, while social media compensates for traditional media's lack of interactivity by fostering engagement. Integration of Communication Program: Coca-Cola integrates its communications with consistent messaging, iconic imagery, and a unified theme of happiness, ensuring a cohesive brand image across all platforms. 2. What do you see as the role of the Internet for building brands? How would you evaluate a Web site for a major brand, e.g., Nike, Disney, or Levi’s? How about one of your favorite brands? Answer: Good corporate Web sites combine information about the brand and its products or services with interesting and often entertaining features. Disney Online includes a corporate website with detailed financial and business information, a site for families planning vacations, a site for kids seeking fun on the Web, and an e-commerce shopping site. Ultimately, each page on a company’s website must contribute to brand equity by being useful, involving, and relevant to the targeted consumers. Role of the Internet in Building Brands: The Internet plays a crucial role in building brands by providing platforms for direct consumer engagement, real-time feedback, and content distribution. It allows brands to tell their stories, showcase products, and create a cohesive brand experience through websites, social media, and digital advertising. Evaluating a Website for a Major Brand (e.g., Nike, Disney, Levi's): 1. User Experience (UX): Easy navigation, quick load times, and mobile responsiveness. 2. Visual Design: Consistency with brand identity, appealing aesthetics, and high-quality visuals. 3. Content Quality: Engaging, informative, and regularly updated content that reflects the brand's values and offerings. 4. Functionality: Efficient e-commerce features, seamless checkout process, and customer support options. 5. Interactivity: Features that encourage user interaction, such as product customization, reviews, and social media integration. Evaluation of a Website for a Favorite Brand: For my favorite brand, I would look for the same criteria: a strong, consistent visual identity, an intuitive user interface, engaging content, efficient functionality, and interactive elements that enhance user engagement and brand loyalty. 3. Pick up a current issue of a popular magazine. Which print ad you feel is the best, and which ad you feel is the worst based on the criteria described in the chapter? Answer: Answers will vary. Magazines may be distributed to groups of students and they may choose the best and worst ads and assess the same on the visible elements contained in the ad and the directness of the message communicated through the ad. Best Print Ad: Ad: Apple iPhone Criteria: • Visual Appeal: Clean, minimalist design with high-quality imagery that aligns with Apple's brand aesthetics. • Clear Messaging: Simple, impactful tagline highlighting a key feature (e.g., camera quality). • Brand Consistency: Consistent with Apple's brand identity and previous marketing materials, reinforcing brand values of innovation and elegance. • Call to Action: Directs readers to learn more on the website or visit an Apple Store. Worst Print Ad: Ad: Local Furniture Store Criteria: • Visual Appeal: Cluttered design with too many images and text, making it hard to focus. • Messaging: Overwhelming amount of information, lacking a clear, concise message. • Brand Consistency: Inconsistent color scheme and fonts, making the brand identity unclear. • Call to Action: Weak or missing, providing little incentive for readers to take action. The Apple ad excels in clarity and brand alignment, while the local furniture store ad falls short due to poor design and messaging coherence. 4. Look at the coupon supplements in a Sunday newspaper. How are they building brand equity, if at all? Try to find a good example and a poor example of brand-building promotions. Answer: For coupons to build brand equity, it is important for them to offer the consumer more than just a price break. Other incentives and promotions such as cash back, prizes, merchandise tie-ins, and free services are more effective means of building brand equity through coupons than simple percentage-off discounts. Good Example: Brand: Tide Coupon: "Save $5 on any two Tide products" Brand Equity Building: Offers value, reinforces brand quality, and maintains consistent branding. Poor Example: Brand: Generic Grocery Store Coupon: "10% off store brand canned goods" Brand Equity Building: Fails to differentiate, has minimal branding, and offers a weak incentive. 5. Choose a popular event. Who sponsors it? How are they building brand equity with their sponsorship? Are they integrating the sponsorship with other marketing communications? Answer: Typically, event sponsors are borrowing equity from the event and its participants and seeking to establish connections between the event and the brand in the minds of consumers. Alternately, a sponsor can help develop the event and build equity for the brand and the event simultaneously. Event sponsors integrate the sponsorship with other marketing communications by buying commercial airtime during the event broadcast, creating tie-in advertising and promotions, and using the event logo in marketing materials. Event: Super Bowl Sponsors: Pepsi, Budweiser, Verizon Building Brand Equity: • Visibility and Exposure: Sponsorship of a high-profile event like the Super Bowl offers massive exposure to a broad audience, enhancing brand awareness. • Brand Association: Tying the brand to the excitement and prestige of the Super Bowl creates positive associations, enhancing brand image and consumer perception. • Engagement: Sponsors often create exclusive ads and content specifically for the event, engaging viewers and reinforcing brand messages. Integration with Other Marketing Communications: • Pepsi: Integrates sponsorship with digital and social media campaigns, such as the Pepsi Halftime Show promotions, leveraging TV ads, social media engagement, and special packaging. • Budweiser: Uses Super Bowl commercials to tell compelling brand stories, extended through social media and in-store promotions. • Verizon: Runs ads during the event, combined with social media campaigns, and in-store offers, emphasizing network reliability tied to the Super Bowl's broad coverage. These sponsors effectively integrate their Super Bowl sponsorship with broader marketing communications, ensuring consistent and cohesive brand messaging across all platforms. Exercises and assignments 1. Have students divide into groups and ask each group to develop a marketing communications strategy for the same brand. Once they have finished, discuss the various plans and the groups’ rationales for them. Compare and contrast the plans on their reliance on pull vs. push, mass vs. direct media, advertising vs. consumer promotions, traditional vs. non-traditional options, and broadcast vs. print. Answer: Each group develops a marketing communications strategy for the same brand, focusing on: 1. Pull vs. Push: Pull to attract consumers vs. push to promote to intermediaries. 2. Mass vs. Direct Media: Broad reach (TV, print) vs. targeted (email, digital ads). 3. Advertising vs. Consumer Promotions: Long-term brand building vs. short-term incentives. 4. Traditional vs. Non-Traditional: TV, radio vs. social media, influencer marketing. 5. Broadcast vs. Print: TV/radio vs. newspapers/magazines. Afterward, compare and contrast the strategies based on these aspects, discussing the rationale and impact on brand equity. 2. Assign students the task of identifying brands that have appeared in movies or television shows. Discuss why the particular movies or shows were chosen and what the likely effect of the placement was on consumers. Answer: Assign students to identify brands featured in movies or TV shows. Discuss the reasons for selecting those movies or shows and analyze the potential impact of the product placements on consumer perceptions and brand recall. Focus on how the placement may enhance brand visibility and credibility through association with popular or influential media content. 3. Compare the communications strategies for two competing brands on the factors delineated in #1 above. What are the reasons for the differences? And for the similarities? Which brand’s strategy do you think is more effective? Why? Answer: Compare the communication strategies of two competing brands based on: 1. Pull vs. Push: How each brand attracts consumers versus promotes to intermediaries. 2. Mass vs. Direct Media: Use of broad reach versus targeted media. 3. Advertising vs. Consumer Promotions: Focus on long-term branding versus short-term incentives. 4. Traditional vs. Non-Traditional: Use of conventional media versus modern channels. 5. Broadcast vs. Print: Preference for TV/radio versus print media. Identify reasons for differences and similarities, such as target audience, brand positioning, and market strategy. Determine which brand’s strategy is more effective based on alignment with brand goals, audience engagement, and overall impact on brand equity. 4. Identify brands that have received publicity, favorable or unfavorable, as the result of action taken by the brand’s management. Analyze the press coverage, its positive and negative effects, and the company’s efforts to capitalize on or downplay the attention. Recent examples include Philip Morris changing its name to Altria, the television advertisement for Nuveen that featured digitally-enhanced images of Christopher Reeves rising from his wheelchair and walking, and ads for Cingular and Alcatel featuring famous speeches by Martin Luther King, Jr. Answer: Identify brands that have gained publicity due to management actions, such as: 1. Philip Morris (renamed to Altria): Analyzed press coverage for rebranding impact, addressing negative perceptions and efforts to reposition the company. 2. Nuveen: Evaluated the backlash from using digitally-enhanced images of Christopher Reeve and the company's response to the controversy. 3. Cingular and Alcatel: Reviewed the use of Martin Luther King Jr.’s speeches in ads, assessing both positive and negative reactions and the brands' strategies to manage them. Analyze how each brand managed the publicity—leveraging positive attention or mitigating negative impact—and the overall effect on brand equity. Key take-away points 1. It is through marketing communications that brands build relationships with consumers. 2. According to the customer-based brand equity model, marketing communications can contribute to brand equity by creating awareness of the brand; linking points-of-parity and points-of-difference associations to the brand in consumers’ memory; eliciting positive brand judgments or feelings; and facilitating a stronger consumer–brand connection and brand resonance. 3. Four vital ingredients to the best brand-building communication programs: 1) advertising and promotion, 2) interactive marketing, 3) events and experiences, and 4) mobile marketing. 4. Development of an integrated marketing communications campaign entails “mixing and matching” options based on their ability to produce a whole that is greater than the sum of its parts. 5. Creating a dialogue with consumers requires thinking beyond traditional advertising and promotion strategies. 6. Consistency is the key to creating brand awareness and strong brand associations. Chapter 7 Leveraging Secondary Brand Associations to Build Brand Equity Chapter Objectives 1. Outline the eight main ways to leverage secondary associations. 2. Explain the process by which a brand can leverage secondary associations. 3. Describe some of the key tactical issues in leveraging secondary associations from different entities. Overview This chapter addresses the way in which secondary associations can be leveraged to build brand equity. Secondary associations are those related to other entities to which a brand is linked, such as the parent company, country of origin, channels of distribution, spokespeople, events, characters, other brands, and third-party sources. The link may lead consumers to assume or infer that beliefs, attitudes, and perceptions they have for the external source also hold for the brand. This ability to “borrow” equity from the people, places, or things associated with the brand creates additional leverage for marketers beyond that generated by brand elements and marketing programs. Leverage can only occur when consumers are familiar with the external source and associations for the sources are relevant to the brand. The leveraged associations are most likely to be considered in brand choice decisions when consumers have low interest or knowledge levels. Three criteria for evaluating the extent of leverage resulting from brand linkage to another entity: awareness of knowledge of entity, meaningfulness of the entity’s knowledge, transferability of the entity’s knowledge. Eight different ways to leverage secondary associations to build brand equity are linking the brand to: (1) the company making the product; (2) the country or some other geographic location in which the product originates; (3) retailers or other channel members that sell the product; (4) other brands, including ingredient brands; (5) licensed characters; (6) famous spokespeople or endorsers; (7) events; and (8) third-party sources. The chapter notes that attempts to leverage secondary associations require the company to relinquish some control over the branding process. In particular, managing the transfer process so that only the relevant secondary associations become linked to the brand may be difficult. Unwanted secondary associations may also become linked to the brand. For example, if one of two brands in a co-branding agreement becomes a target for negative publicity, the other brand may find its brand equity negatively affected as well. Brand Focus 7.0 discusses one of the biggest events for corporate sponsorship, the Olympic Games. Companies spend up to $50 to be lead sponsors for the Games, and then spend as much as $100 million on related marketing activities; however, not everyone thinks the Games provide good value since the increasing commercialization of the competition makes it harder to break through the clutter. Science of Branding THE SCIENCE OF BRANDING 7-1 UNDERSTANDING RETAILERS’ BRAND IMAGES Academics have identified the following five dimensions of a retailer’s brand image: • Access—The location of a store and the distance that consumers must travel to shop are basic criteria in their store choice decisions. • Store Atmosphere— Different elements of a retailer’s in-store environment, like color, music, and crowding, can influence consumers’ perceptions of its atmosphere, whether or not they visit a store, how much time they spend in it, and how much money they spend there. • Price and Promotion— Consumers are more likely to develop a favorable price image when retailers offer frequent discounts on a large number of products than when they offer less frequent, but steeper discounts. • Cross-Category Assortment— Consumers’ perception of the breadth of different products and services offered by a retailer under one roof significantly influences store image. • Within-Category Assortment— As the perceived assortment of brands, flavors, and sizes increases, variety-seeking consumers will perceive greater utility, consumers with uncertain future preferences will believe they have more flexibility in their choices, and, in general, consumers are more likely to find the item they desire. THE SCIENCE OF BRANDING 7-2 UNDERSTANDING BRAND ALLIANCES Academic research has explored the effects of co-branding and ingredient branding strategies: • Co-Branding— Park, Jun, and Shocker compare co-brands to the notion of “conceptual combinations” in psychology. The findings show how carefully selected brands can be combined to overcome the potential problems of negatively correlated attributes (here, rich taste and low calories). Simonin and Ruth found that consumers’ attitudes toward a brand alliance could influence subsequent impressions of each partner’s brands. Brands less familiar than their partners contributed less to an alliance but experienced stronger spillover effects than their more familiar partners. Voss and Tansuhaj found that consumer evaluations of an unknown brand from another country were more positive when it was allied with a well-known domestic brand. Kumar found that introducing a co-branded extension into a new product category made it less likely that a brand from the new category could turn around and introduce a counter-extension into the original product category. LeBar and colleagues found that joint branding helped to increase a brand’s perceived differentiation, but also sometimes decreased consumers’ perceived esteem for the brand and knowledge about the brand. • Ingredient Branding— Desai and Keller conducted a laboratory experiment to consider how ingredient branding affected consumer acceptance of an initial line extension, as well as the ability of the brand to introduce future category extensions. The results indicated that with slot filler expansions, although a co-branded ingredient eased initial acceptance of the expansion, a self-branded ingredient led to more favorable later extension evaluations. With more dissimilar new attribute expansions, however, a co-branded ingredient led to more favorable evaluations of both the initial expansion and the subsequent extension. Branding Briefs BRANDING BRIEF 7-1 IBM PROMOTES A SMARTER PLANET IBM decided it needed to radically transform itself from a product-focused company to a value-added, services-oriented company. IBM Chairman and CEO Sam Palmisano spun off the company’s famous PC division and began to invest heavily in software and business consulting. Another critical aspect of the transformation was aligning the public perception of IBM with this new vision. “Smarter Planet” became the slogan for the corporate campaign, which had its roots in some of IBM’s recent accomplishments. The initial goal of the “Smarter Planet” campaign was to position IBM as a leader in solving the world’s most pressing problems. One of the first campaign activities was an op-ad series, “Building a Smarter Planet,” targeting forward-thinking leaders. The campaign also included TV ads and targeted ads to three groups: business and government leaders in large organizations, IT professionals, and the mid-market. It included a strong digital component, with an expanded IBM Web site and a Smarter Planet blog. Videos were created and distributed across eight of the largest video-sharing sites. IBM also launched a “Smarter Cities” global tour to bring key policy and decision makers together to discuss the topical issues they faced, such as transportation, energy, health care, education, and public safety. IBM analysts estimated that the Smarter Planet strategy expanded its market potential by as much as 40 percent globally, or by an additional $2.3 billion in revenue. IBM’s brand tracking revealed increases across the board on a variety of image measures and overall judgments related to consideration, preference, and likelihood of doing business. IBM’s stock price increased by 64 percent during the campaign. BRANDING BRIEF 7-2 SELLING BRANDS THE NEW ZEALAND WAY In November 2010, New Zealand was ranked as the third-strongest country brand in the world, a credit to the country’s remarkable qualities, but also to its concerted marketing program through the years. In 1991, New Zealand began a branding initiative called “The New Zealand Way.” The key objectives of the New Zealand Way brand campaign were to reposition New Zealand to reflect its contemporary positioning and undertake a sustained campaign that could be a powerful force to benefit trade and tourism in the global marketplace. The New Zealand Way brand campaign promoted the country, its tourism and trade products and services, and its famous people, known as “Brand Ambassadors.” In 1999, a decision was made to develop a more focused campaign for tourism and Tourism New Zealand sharpened its destination global marketing with its campaign: “100% Pure New Zealand.” The campaign focused on building awareness of New Zealand as a unique holiday destination due its spectacular natural landscapes and fascinating culture and people. Buoyed also by publicity from the highly popular Lord of the Rings film trilogy, which was filmed there, plus the profile from the America’s Cup which Tourism New Zealand cleverly used for promotion, the number of visitors to the country increased by 50% during this time. NZTE chose to focus its branding efforts on international business development reflecting emerging and relevant values for enterprise such as innovation, creativity, and integrity. In 2011, the tag line for the tourism campaign was changed to “100% Pure You” with the subline, “It’s About Time.” The intent was to build on the prior campaign to target people who were actively considering New Zealand for a holiday vacation and to encourage them to travel soon. BRANDING BRIEF 7-3 INGREDIENT BRANDING THE DUPONT WAY DuPont introduced a number of innovative products for use in markets ranging from apparel to aerospace. Many of the company’s innovations became household names as ingredient brands in consumer products manufactured by many other companies. DuPont learned an important branding lesson the hard way. Because the company did not protect the name of its first organic chemical fiber, nylon, it was not trademarkable and became generic. A key question that DuPont constantly confronts is whether to brand a product as an ingredient brand. To address this question, the firm has traditionally applied several criteria: • On the quantitative side, DuPont has a model that estimates the return on investment of promoting a product as an ingredient brand. The goal of the model is to determine whether branding an ingredient can be financially justified, especially in industrial markets. • On the qualitative side, DuPont assesses how an ingredient brand can help a product’s positioning. If competitive and consumer analyses reveal that conveying certain associations would boost sales, DuPont is more likely to brand the ingredient. DuPont maintains that an appropriate, effective ingredient branding strategy leads to a number of competitive advantages, such as higher price premiums, enhanced brand loyalty, and increased bargaining power with other members of the value chain. DuPont employs both push and pull strategies to create its ingredient brands. BRANDING BRIEF 7-4 MANAGING A PERSON BRAND Guidelines for managing a person brand: • A person brand must manage brand elements. • A person brand is built by the words and actions of that person. • A person brand can borrow brand equity through secondary associations and employ strategic partnerships with other people to enhance brand equity. • Credibility is key for a person brand. • Person brands can use multiple media channels. • A person brand must stay fresh and relevant and properly innovate and invest in key person traits. • A person brand should consider optimal positioning in terms of brand potential and associated points-of-parity and points-of-difference. • Brand architecture is simpler for a person brand but brand extensions can occur, for instance when a person adds to his or her perceived capabilities. • A person brand must live up to the brand promise at all times. • A person brand must be a self-advocate and help to shape impressions. Brand Focus BRAND FOCUS 7.0 GOING FOR CORPORATE GOLD AT THE OLYMPICS Corporate sponsorship is a significant part of the business side of the Olympics and countries themselves vie for the rights to host the Games. Corporate Sponsorship Corporate sponsorship of the Olympics exploded with the commercial success of the 1984 Summer Games in Los Angeles. At that time, many international sponsors, like Fuji, achieved positive image building and increased market share. Besides direct expenditures, firms spent hundreds of millions more on related marketing efforts. Sponsorship ROI Although several firms have long-term relationships and commitments with the Olympics, in recent years other long-time sponsors have cut their ties. Although many factors affect the decision to engage in or renew an Olympic sponsorship, its marketing impact is certainly widely debated. Ambush Marketing In some cases, sponsorship confusion may be due to ambush marketing, in which advertisers attempt to give consumers the false impression they are Olympic sponsors without paying for the right to do so. No sponsoring companies attempt to attach themselves to the Games by, for instance, running Olympic-themed ads that publicize other forms of sponsorship like sponsoring a national team, by identifying the brand as an official supplier, or by using current or former Olympians as endorsers. Containing ambush marketing requires much diligence. Beijing 2008 Summer Games The 2008 Summer Games in Beijing held special appeal for some advertisers because the Games represented a connection to the burgeoning Chinese market. General Electric began its first global campaign revolving around the Beijing Games in 2005. UPS also chose the Beijing games to strengthen its brand presence in China. London 2012 Summer Games Recognizing the important financial contribution of sponsorship, the London Games were supported by the British government’s introduction of extensive anti-ambush legislation. Banned were activities such as sky-writing, flyers, posters, billboards, and projected advertising within 200 meters of any Olympic venue. Organizers of the London Games also embarked on a multimillion dollar advertising campaign, “The Greatest Tickets on Earth,” in hope of raising £500 million from ticket sales. Outside the country, the government also embarked on a “Visit Britain” and “Visit London” promotional campaign to attract tourists. City and Country Effects A number of benefits may be evident for a host country that can be hard to quantify. One important psychological benefit is civic pride and patriotism for serving as host to such an iconic global sporting event. Another often-overlooked benefit is the investment in improving infrastructure that often leads up to hosting the Games. Summary Many corporate sponsors continue to believe that their Olympic sponsorship yields many significant benefits, creating an image of goodwill for their brand, serving as a platform to enhance awareness and communicate messages, and affording numerous opportunities to reward employees and entertain clients. Other view the Games as overly commercialized, despite the measures undertaken by the IOC and USOC to portray the Olympics as wholesome. In any case, the success of Olympic sponsorship depends in large part on how well it is executed and incorporated into the entire marketing plan. Discussion questions 1. The Boeing Company makes a number of different types of aircraft for the commercial airline industry, e.g., the 727, 747, 757, 767, and 777 jet models. Is there any way for Boeing to adopt an ingredient branding strategy with their jets? How? What would be the pros and cons? Answer: Boeing could develop an ingredient branding strategy by leveraging its corporate name more for use on the interior and exterior of planes, on literature issued inside the plane, on ticketing information, and in airline advertising. Boeing could also develop an advertising campaign featuring its different jet models. Pros: more business, more recognition, and greater equity. Cons: greater accountability (particularly in the event of a crash) and competitors can adopt similar strategy. Yes, Boeing can adopt an ingredient branding strategy with their jets by incorporating specific high-profile technologies or components that are developed by partner companies. For example, they could highlight advanced avionics systems or engines from well-known suppliers as part of their branding. Pros: 1. Enhanced Perception: Associating with prestigious suppliers can boost the overall perception of Boeing’s aircraft. 2. Differentiation: It helps differentiate Boeing's models from competitors by emphasizing advanced or unique features. 3. Credibility: Leveraging trusted technologies can enhance the credibility and perceived quality of Boeing's jets. Cons: 1. Dependency Risks: Relying on suppliers' brands could make Boeing vulnerable to any negative issues associated with those partners. 2. Cost Implications: Ingredient branding might lead to higher costs due to premium components or technology licensing fees. 3. Brand Dilution: Overemphasizing suppliers' brands could overshadow Boeing’s own brand identity and value. 2. After winning major championships, star players often complain about their lack of endorsement offers. Similarly, after every Olympics, a number of medal-winning athletes lament their lack of commercial recognition. From a branding perspective, how would you respond to the complaints of these athletes? Answer: Athletes are brands unto themselves, and sponsorship and endorsement opportunities exist because the sponsoring company wishes to borrow some of the athletes’ brand equity. Just like commercial brands, athletes vary in the strength, favorability, and uniqueness of consumers’ associations to them. In team sports, strong and favorable associations typically exist among the fan base for the entire team, but it is difficult for more than a few individual players to attain unique associations. Many Olympic sports do not engender strong associations, and those athletes that do manage to develop strong and favorable associations often encounter difficulty setting themselves apart from other medal-winners. Developing unique personalities, abilities, and stories would be a recommended course of action for athletes looking to capitalize on their achievements. From a branding perspective, athletes' lack of endorsement offers or commercial recognition after major achievements might stem from several factors: 1. Marketability: Endorsements are often influenced by the athlete’s marketability, which includes factors such as personality, media presence, and alignment with brand values. Athletes should focus on building a strong personal brand and engaging with media to increase visibility. 2. Brand Fit: Companies seek endorsements that align with their brand values and target audiences. Athletes might need to better demonstrate how their personal brand fits with potential sponsors' objectives. 3. Timing and Strategy: Endorsement deals can be complex and competitive. Athletes should work with experienced agents and marketing professionals to strategize their approach and maximize their visibility in the commercial space. 4. Long-Term Effort: Building a successful endorsement portfolio often requires ongoing effort and relationship-building over time, beyond immediate achievements. 3. Think of the country in which you live. What image might it have with consumers in other countries? Are there certain brands or products that are highly effective in leveraging that image in global markets? Answer: Answers will vary. Because it’s typically a legal necessity for the country of origin to appear somewhere on the product or package, associations to the country of origin almost always have the potential to be created at the point of purchase and to affect brand decisions there. Students may be asked to assess how certain products leverage the image of their country in other markets. The image of a country can vary widely based on factors such as culture, economy, and global perceptions. For example, if you live in the United States, it might be seen as a hub of innovation and quality, influencing perceptions of products and brands. Brands or Products Leveraging This Image Globally: 1. Apple: Represents American innovation and high technology. 2. Nike: Embodies athletic excellence and American culture. 3. Coca-Cola: Capitalizes on the global appeal of American lifestyle and refreshment. These brands effectively use their country's image to enhance their global appeal and connect with international consumers by aligning with perceptions of quality, innovation, and cultural values. 4. Which retailers have the strongest image and equity in your mind? Think about the brands they sell. Do they help to contribute to the equity of the retailer? Conversely, how does that retailer’s image help the image of the brands it sells? Answer: Answers will vary. Because of associations to product assortment, pricing and credit policy, quality of service, and so on, retailers have their own brand images in consumers’ minds. Retailers create these associations through the products and brands they stock and the means by which they sell them. To more directly shape their images, many retailers aggressively advertise and promote directly to customers. Retailers with Strong Image and Equity: 1. Nordstrom: Known for exceptional customer service and high-quality merchandise. The brands they sell, like designer clothing and luxury goods, benefit from Nordstrom's reputation for excellence. This association enhances both the retailer's and the brands' prestige. 2. Apple Store: The sleek, modern image of Apple Stores reinforces the brand’s high-tech and innovative image. The retailer’s environment and customer experience help to elevate the perception of Apple’s products as cutting-edge and premium. Contributions: • Retailer to Brand: Retailers with strong images can enhance the perceived value and desirability of the brands they carry. • Brand to Retailer: High-quality or prestigious brands sold by a retailer can reinforce the retailer’s image as a destination for premium or desirable products. 5. Pick a brand. Evaluate how it leverages secondary associations. Can you think of any ways in which the brand could more effectively leverage secondary brand knowledge? Answer: Answers will vary. Students may be divided into groups of four and may be asked to choose a brand and assess its secondary associations. Brand: Tesla Current Secondary Associations: • Innovation and Technology: Tesla leverages associations with cutting-edge technology and sustainability, partly due to its association with Elon Musk and Silicon Valley. • Environmental Responsibility: Tesla's electric vehicles are linked to green energy and reducing carbon footprints. Ways to More Effectively Leverage Secondary Brand Knowledge: 1. Partnerships: Collaborate with well-known environmental organizations to further emphasize its commitment to sustainability. 2. Global Expansion: Highlight international collaborations or endorsements to strengthen its global image and reach. 3. Technology Leadership: Emphasize breakthroughs and partnerships in AI and autonomous driving to reinforce its tech-savvy reputation. By enhancing these associations, Tesla can strengthen its brand equity and appeal to a broader audience. Exercises and assignments 1. Ask students to poll consumers regarding their associations for different countries. What products or services fit with and could benefit from being linked to the countries? Are the associations consistent with the way in which products and services from those countries are being marketed? (Can be related to Branding Brief 7-2: Selling Brands the New Zealand Way) Answer: Exercise Response: 1. Poll Findings: • Japan: Known for technology and precision (e.g., Sony, Toyota). Products related to high-tech innovation and reliability fit well. • Italy: Associated with fashion and luxury (e.g., Gucci, Ferrari). Products like high-end fashion and premium automobiles align with Italy’s image. • Switzerland: Linked to quality and precision (e.g., Rolex, Swiss watches). High-quality, durable products are consistent with Switzerland’s branding. 2. Consistency with Marketing: • Japan: Marketing often emphasizes technological innovation and quality, which aligns with consumer associations. • Italy: Brands market luxury and style, reflecting Italy’s fashion and automotive reputation. • Switzerland: Swiss brands promote precision and excellence, consistent with the country's image. By ensuring that product marketing aligns with national associations, brands can enhance their appeal and effectiveness in global markets. 2. Tell students to suggest celebrity endorsers for brands currently without one, and to explain their recommendations. For example, does Dennis Rodman’s fiery personality make him a good spokesperson for Tabasco? Does Sean “P. Diddy” Combs’ ever-present cell phone make him a perfect candidate to endorse Nokia phones? Would Rosie O’Donnell be a made-in-heaven match with Nickelodeon because of her love for and knowledge of classic TV shows? Answer: Celebrity Endorser Suggestions: 1. Brand: Peloton • Celebrity: Serena Williams • Reason: Williams’ fitness and athleticism align with Peloton’s focus on high-performance workouts and health. Her broad appeal and dedication to fitness make her a strong ambassador for motivating users. 2. Brand: Tesla • Celebrity: Elon Musk • Reason: Musk’s association with innovation and technology aligns perfectly with Tesla’s brand image. His involvement can enhance the perception of Tesla as a leader in technological advancement. 3. Brand: Patagonia • Celebrity: Leonardo DiCaprio • Reason: DiCaprio’s environmental activism and focus on climate change align with Patagonia’s commitment to sustainability. His endorsement could strengthen the brand’s environmental credentials and appeal. By choosing celebrities whose personal brand and public persona align with the brand’s values and image, companies can create more authentic and impactful endorsements. 3. Assign students the task of finding co-branding opportunities in various product categories. For example: Facial tissue Puffs and Vaseline Intensive Care lotion? Spaghetti sauce Ragu and Gallo wine? Hotel Red Roof Inn and Serta mattresses? Answer: Co-Branding Opportunities: 1. Product Category: Food & Beverage • Opportunity: Ben & Jerry’s & Oreo • Concept: A limited-edition ice cream flavor featuring Oreo cookies could capitalize on both brands' strong customer loyalty and create a unique, desirable product. 2. Product Category: Technology • Opportunity: Apple & Nike • Concept: A special edition of the Apple Watch with exclusive Nike fitness apps and features, appealing to fitness enthusiasts and tech-savvy consumers. 3. Product Category: Fashion • Opportunity: Gucci & The North Face • Concept: A high-end collection of outdoor gear and apparel combining Gucci’s luxury with The North Face’s rugged functionality, attracting fashion-forward adventurers. 4. Product Category: Automotive • Opportunity: Tesla & Spotify • Concept: Integration of Spotify’s music service into Tesla’s infotainment system, enhancing the driving experience with seamless access to music. These co-branding partnerships can leverage the strengths of each brand to create innovative products that appeal to a broader audience. 4. Have students identify a brand with an active licensing strategy and evaluate the fit of the licensed products with the brand’s image. What changes should be made in the brand’s licensing policy? Examples of brands with products in numerous categories outside the original include Jell-O, Looney Tunes, Ralph Lauren and Star Wars. Answer: Brand: Ralph Lauren Evaluation of Licensed Products: • Current Fit: Ralph Lauren licenses products across categories like home goods, fragrances, and accessories. The classic, preppy image of Ralph Lauren is generally well-maintained across these licensed products. • Examples: Ralph Lauren’s bedding and home décor products align with the brand’s elegant, sophisticated aesthetic. Suggested Changes in Licensing Policy: 1. Enhanced Quality Control: Ensure that all licensed products uphold the brand’s high standards of quality and craftsmanship to maintain a consistent image. 2. Selective Licensing: Focus on licensing products that align more closely with the core lifestyle and fashion segments, avoiding categories that may dilute the brand’s premium perception. 3. Exclusive Partnerships: Partner with high-end retailers or designers for licensed products to enhance the brand’s exclusivity and appeal. These adjustments can help preserve Ralph Lauren’s brand equity and ensure that licensed products consistently reflect the brand’s prestigious image. Key take-away points 1. Linking the brand to some other entity—some source factor or related person, place, or thing—may create a new set of associations from the brand to the entity, as well as affecting existing brand associations. 2. Brands can “borrow” equity from their association with people, places, programs, and other non-product-based sources. 3. Leveraging secondary associations can be problematic because it requires marketers to give up some degree of control over the branding process. 4. Secondary associations are strongest when consumers have awareness and strong, favorable, and unique perceptions of the external source. 5. Secondary associations are most likely to affect evaluations when consumers lack the ability or motivation to judge product attributes. 6. Because of associations to product assortment, pricing and credit policy, quality of service, and so on, retailers have their own brand images in consumers’ minds. 7. An existing brand can also leverage associations by linking itself to other brands from the same or different company. 8. Licensing creates contractual arrangements whereby firms can use the names, logos, characters, and so forth of other brands to market their own brands for some fixed fee. 9. A famous person can draw attention to a brand and shape the perceptions of the brand, by virtue of the inferences that consumers make based on the knowledge they have about the famous person. 10. Sponsored events can contribute to brand equity by becoming associated to the brand and improving brand awareness, adding new associations, or improving the strength, favorability, and uniqueness of existing associations. 11. Marketers can create secondary associations in a number of different ways by linking the brand to various third-party sources. Chapter 8 Developing a Brand Equity Measurement & Management System Chapter Objectives 1. Describe the new accountability in terms of ROMI. 2. Outline the two steps in conducting a brand audit. 3. Describe how to design, conduct, and interpret a tracking study. 4. Identify the steps in implementing a brand equity management system. Overview If managers are to develop programs designed to build, maintain, or leverage a brand’s equity, they must first understand consumer knowledge structures for the brand. Marketers need new tools and procedures that justify the value of their expenditures beyond “Return on Marketing Investment” (ROMI) measures tied to short-term changes in sales. This chapter describes various ways to measure those knowledge structures, which represent sources of brand equity. The concept of a brand equity measurement system is introduced. Implementing a brand equity measurement system involves three steps: conducting brand audits, designing brand tracking studies, and establishing a brand equity management system. A brand audit is a consumer-focused exercise to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity. The brand audit consists of two steps: the brand inventory and the brand exploratory. Tracking studies measure consumer attitudes toward the brand on a consistent basis over time and provide a contemporary picture of the state of the brand. Five key measures can be used to capture the consumer mindset: brand awareness, brand associations, brand attitudes, brand attachment, and brand activity or experience. Brand equity management systems consist of three components: a Brand Equity Charter, a Brand Equity Report, and the creation of senior-level executive positions charged with overseeing the implementation of the Brand Equity Charter and Brand Equity Report. The Brand Equity Charter should accomplish the following: define the firm’s view of the brand equity concept and why it is important; describe the scope of key brands; specify the actual and desired brand equity for all brands in the brand hierarchy; explain how brand equity is measured by tracking studies and the Brand Equity Report; provide strategic guidelines for brand equity management; provide specific tactical guidelines for marketing programs; specify proper treatment of brands in terms of trademark usage, packaging, and communications. The Brand Equity Report should provide description as to what is happening with a brand as well as to why it is happening. It should also include all relevant internal and external measures of brand performance as well as sources and outcomes of brand equity. To provide adequate management, it is important for companies to establish a position of Vice President or Director of Strategic Brand Management to oversee the implementation of the Charter and Report and provide central coordination for all branding activities. Brand Focus 8.0 illustrates a sample brand audit using the Rolex brand as an example. Science of Branding THE SCIENCE OF BRANDING 8-1 THE ROLE OF BRAND PERSONAS Personas are detailed profiles of one, or perhaps a few, target market consumers. They are often defined in terms of demographic, psychographic, geographic, or other descriptive attitudinal or behavioral information. The rationale behind personas is to provide exemplars or archetypes of how the target customer looks, acts, and feels that are as true-to-life as possible, to ensure marketers within the organization fully understand and appreciate their target market and therefore incorporate a nuanced target customer point of view in all their marketing decision-making. Personas are fundamentally designed to bring the target consumer to life. A good brand persona can guide all marketing activities. Although personas can provide a very detailed and accessible perspective on the target market, it can come at a cost. The more heterogeneity in the target market, the more problematic the use of personas can be. To overcome the potential problem of overgeneralization, some firms are creating multiple personas to provide a richer tapestry of the target market. There can also be varying levels of personas, such as primary (target consumer), secondary (target consumer with differing needs, targets, goals), and negative (false stereotypes of users). THE SCIENCE OF BRANDING 8-2 MAXIMIZING INTERNAL BRANDING Internal branding creates a positive and more productive work environment. It can also be a platform for change and help foster an organization’s identity. According to branding expert Scott Davis, for employees to become passionate brand advocates, they must understand what a brand is, how it is built, what their organization’s brand stands for, and what their role is in delivering on the brand promise. Formally, he sees the process of helping an organization’s employees assimilate the brand as three stages: • Hear It: How do we best get it into their hands? • Believe It: How do we best get it into their heads? • Live It: How do we best get it into their hearts? Davis also argues that six key principles should guide the brand assimilation process within an organization: • Make the brand relevant—Each employee must understand and embrace the brand meaning. • Make the brand accessible—Employees must know where they can get brand knowledge and answers to their brand-related questions. • Reinforce the brand continuously—Management must reinforce the brand meaning with employees beyond the initial rollout of an internal branding program. • Make brand education an ongoing program—Provide new employees with inspiring and informative training. • Reward on-brand behaviors—An incentive system to reward employees for exceptional support of the brand strategy should coincide with the roll-out of an internal branding program. • Align hiring practices—HR and marketing must work together to develop criteria and screening procedures to ensure that new hires are good fits for the company’s brand culture. Davis also emphasizes the role of senior management in driving internal branding, noting that the CEO ultimately sets the tone and compliance with a brand-based culture and determines whether proper resources and procedures are put into place. Branding Briefs BRANDING BRIEF 8-1 SAMPLE BRAND TRACKING SURVEY Introduction: We’re conducting a short online survey to gather consumer opinions about quick-service or “fast-food” restaurant chains. Brand Awareness and Usage a. What brands of quick-service restaurant chains are you aware of? b. At which brands of quick-service restaurant chains would you consider eating? c. Have you eaten in a quick-service restaurant chain in the last week? Which ones? d. If you were to eat in a quick-service restaurant tomorrow for lunch, which one would you go to? e. What if you were eating dinner? Where would you go? f. Finally, what if you were eating breakfast? Where would you go? g. What are your favorite quick-service restaurant chains? We want to ask you some general questions about a particular quick-service restaurant chain, McDonald’s. Have you heard of this restaurant? [Establish familiarity.] Have you eaten at this restaurant? [Establish trial.] When I say McDonald’s, what are the first associations that come to your mind? Anything else? [List all.] Brand Judgments We’re interested in your overall opinion of McDonald’s. a. How favorable is your attitude toward McDonald’s? b. How well does McDonald’s satisfy your needs? c. How likely would you be to recommend McDonald’s to others? d. How good a value is McDonald’s? e. Is McDonald’s worth a premium price? f. What do you like best about McDonald’s? Least? g. What is most unique about McDonald’s? h. To what extent does McDonald’s offer advantages that other similar types of quick-service restaurants cannot? i. To what extent is McDonald’s superior to other brands in the quick-service restaurant category? j. Compared to other brands in the quick-service restaurant category, how well does McDonald’s satisfy your basic needs? We now want to ask you some questions about McDonald’s as a company. Please indicate your agreement with the following statements. McDonald’s is . . . a. Innovative b. Knowledgeable c. Trustworthy d. Likable e. Concerned about their customers f. Concerned about society as a whole g. Likable h. Admirable Brand Performance We now would like to ask some specific questions about McDonald’s. Please indicate your agreement with the following statements. McDonald’s . . . a. Is convenient to eat at b. Provides quick, efficient service c. Has clean facilities d. Is ideal for the whole family e. Has delicious food f. Has healthy food g. Has a varied menu h. Has friendly, courteous staff i. Offers fun promotions j. Has a stylish and attractive look and design k. Has high-quality food Brand Imagery a. To what extent do people you admire and respect eat at McDonald’s? b. How much do you like people who eat at McDonald’s? c. How well do each of the following words describe McDonald’s? Down-to-earth, honest, daring, up-to-date, reliable, successful, upper class, charming, outdoorsy d. Is McDonald’s a restaurant that you can use in a lot of different meal situations? e. To what extent does thinking of McDonald’s bring back pleasant memories? f. To what extent do you feel that you grew up with McDonald’s? Brand Feelings Does McDonald’s give you a feeling of . . . a. Warmth? b. Fun? c. Excitement? d. Sense of security or confidence? e. Social approval? f. Self-respect? Brand Resonance a. I consider myself loyal to McDonald’s. b. I buy McDonald’s whenever I can. c. I would go out of my way to eat at McDonald’s. d. I really love McDonald’s. e. I would really miss McDonald’s if it went away. f. McDonald’s is special to me. g. McDonald’s is more than a product to me. h. I really identify with people who eat at McDonald’s. i. I feel a deep connection with others who eat at McDonald’s. j. I really like to talk about McDonald’s to others. k. I am always interested in learning more about McDonald’s. l. I would be interested in merchandise with the McDonald’s name on it. m. I am proud to have others know I eat at McDonald’s. n. I like to visit the McDonald’s Web site. o. Compared to other people, I follow news about McDonald’s closely. BRANDING BRIEF 8-2 UNDERSTANDING AND MANAGING THE MAYO CLINIC BRAND Mayo Clinic grew to be a worldwide leader in patient care, research, and education and became renowned for its world-class specialty care and medical research. In 1996, Mayo undertook its first brand equity study and since then has conducted regular, national qualitative and quantitative studies. Mayo’s research identifies seven key brand attributes or values, including (1) integration, (2) integrity, (3) longevity, (4) exclusivity, (5) leadership, (6) wisdom, and (7) dedication. In terms of integration, respondents described Mayo as bringing together a wealth of resources to provide the best possible care. For integrity, respondents placed great value on the fact that Mayo is noncommercial and committed to health and healing over profit. In a more recent quantitative study, overall awareness of Mayo Clinic in the United States was 90.2 percent, and a remarkable one-third knew at least one Mayo patient. From its research, Mayo Clinic understands that its brand “is precious and powerful.” Mayo realized that while it had an overwhelmingly positive image, it was vital to develop guidelines to protect the brand. In 1999, the clinic created a brand management infrastructure to be the “institutional clearinghouse for ongoing knowledge about external perceptions of Mayo Clinic and its related activities.” Mayo Clinic also established guidelines for applying the brand to products and services. Its brand management measures work to ensure that the clinic preserves its brand equity. BRANDING BRIEF 8-3 HOW GOOD IS YOUR MARKETING? RATING A FIRM’S MARKETING ASSESSMENT SYSTEM To help companies evaluate if their marketing assessment system is good enough, Tim Ambler suggests that they ask the following 10 questions—the higher the score, the better the assessment system. 1. Does the senior executive team regularly and formally assess marketing performance? a. Yearly—10 b. Six-monthly—10 c. Quarterly—5 d. More often—0 e. Rarely—0 f. Never—0 2. What does the senior executive team understand by “customer value”? a. Don’t know. We are not clear about this—0 b. Value of the customer to the business (as in “customer lifetime value”)—5 c. Value of what the company provides from the customers’ point of view—10 d. Sometimes one, sometimes the other—10 3. How much time does the senior executive team give to marketing issues? a. >30%—10 b. 20–30%—6 c. 10–20%—4; d. <10%—0 4. Does the business/marketing plan show the nonfinancial corporate goals and link them to market goals? a. No/no plan—0 b. Corporate no, market yes—5 c. Yes to both—10 5. Does the plan show the comparison of your marketing performance with competitors or the market as a whole? a. No/no plan—0 b. Yes, clearly—10 c. In between—5 6. What is your main marketing asset called? a. Brand equity—10 b. Reputation—10 c. Other term—5 d. We have no term—0 7. Does the senior executive team’s performance review involve a quantified view of the main marketing asset and how it has changed? a. Yes to both—10 b. Yes but only financially (brand valuation)—5 c. Not really—0 8. Has the senior executive team quantified what “success” would look like 5 or 10 years from now? a. No—0 b. Yes—10 c. Don’t know—0 9. Does your strategy have quantified milestones to indicate progress toward that success? a. No—0 b. Yes—10 c. What strategy?—0 10. Are the marketing performance indicators seen by the senior executive team aligned with these milestones? a. No—0 b. Yes, external (customers and competitors)—7 c. Yes, internal (employees and innovativeness)—5 d. Yes, both—10 Brand Focus BRAND FOCUS 8.0 ROLEX BRAND AUDIT Rolex has remained one of the most recognized and sought-after luxury brands in the world. A thorough audit can help pinpoint opportunities and challenges for Rolex, whose brand equity has been historically strong, as much is at stake. Background History—Rolex was founded in 1905 by a German named Hans Wilsdorf and his brother-in-law, William Davis, as a watch-making company, Wilsdorf & Davis, with headquarters in London, England. In 1912, Rolex moved its headquarters to Geneva, Switzerland, and started working on improving the reliability of its watches. Twelve years later, Wilsdorf developed and patented the now famous Oyster waterproof case and screw crown. Over the years, Rolex has pushed innovation in watches to new levels. For decades, Swiss-made watches owned the middle and high-end markets, remaining virtually unrivaled until the invention of the quartz watch in 1969. In order to survive, Rolex was forced to move into the high-end market exclusively—leaving the middle to the quartz people—and create a strategy to defend and build its position there. Private Ownership—Rolex is a privately owned company and has been controlled by only three people in its 100-year history. By staying an independent entity, Rolex has remained focused on its core business. Brand Portfolio—Rolex includes three family brands of wristwatches, called “collections”; the Oyster Perpetual Collection, the Professional Collection, and the Cellini Collection. Rolex owns a separate “fighter” brand called Tudor, developed in 1946 to stave off competition from mid-range watches such as TAG Heuer, Citizen, and Rado. Brand Inventory Rolex not only produces extremely high-quality timepieces, but also tightly controls how its watches are sold, ensuring high demand and premium prices. Its sophisticated marketing strategy has created an exclusive and premium brand that many aspire to own. Brand Elements—Rolex’s most distinguishable brand element is its Crown logo. Many Rolex watches also have a distinct look, including a big round face and wide wrist band. Product—Throughout the years, Rolex timepieces have maintained the high quality, durability, and prestige on which the company built its name. The company does not license its brand or produce any other product besides watches. Its product portfolio is clear, concise, and focused. Pricing—By limiting production to approximately 2,000 watches a day, Rolex keeps consumer demand high and prices at a premium. Scarcity also helps positively influence the resale value of Rolex watches. Distribution—Rolex carefully monitors how its timepieces are sold, distributing them only through its approximately 60,000 “Official Rolex Dealers” worldwide. In addition, a large secondary market exists for Rolex, both through online auction sites and at live auctions. Communications—Rolex associates itself with “ambassadors”—established artists, top athletes, rugged adventurers, and daring explorers—to help create its imagery. Rolex also sponsors various sports and cultural events as well as philanthropy programs to help align with targeted demographics as well as create positive associations in consumers’ minds. Advertising—One of the company’s largest expenditures is for magazine advertising. Rolex’s print ads are often simple and austere, usually featuring one of its many brand ambassadors or a close-up photo of one of its watches with the tagline “Rolex. A Crown for Every Achievement.” Rolex does not advertise extensively on television, but does sponsor some events that are televised. Ambassadors—Rolex’s celebrity endorsers are continuously added and dropped depending on their performance. These ambassadors fall into four categories: athletes, artists, explorers, and yachtsmen. Sports and Culture—Rolex sponsors a variety of elite athletic and cultural events to reinforce the same messages, values, and associations as it does through its ambassador endorsements. These include a quest for excellence, pursuit of perfection, teamwork, and ruggedness. Philanthropy—Rolex gives back through three established philanthropic programs, viz. the Awards for Enterprise program, the Young Laureates Programme, and the Rolex Mentor and Protégé Arts Initiative. Brand Exploratory Consumer Knowledge—Rolex has successfully leveraged its history and tradition of excellence along with innovation to become the most powerful and recognized watchmaker in the world. Some positive consumer brand associations for Rolex might be “sophisticated,” “prestigious,” “exclusive,” “powerful,” “elegant,” “high quality.” Some negative brand associations that some consumers may link to the brand, however, could include “flashy” or “snobby.” While the brand and product line seem to resonate well with older, wealthy individuals, Rolex struggles somewhat to connect with younger consumers. Brand Resonance Pyramid—The functional and emotional benefits Rolex strives to deliver are in harmony with consumers’ imagery and feelings about the brand. Rolex also enjoys the highest brand awareness of any luxury brand as well as high repeat purchase rates and high customer loyalty. Rolex has successfully focused on both the superior product attributes and the imagery associated with owning and wearing a Rolex. Competitive Analysis—Through its pricing and distribution strategies, Rolex has positioned itself as a high-end luxury watch brand. On the lower end of the spectrum it competes with companies such as TAG Heuer and OMEGA, and on the higher end with brands such as Patek Philippe, maker of the world’s most expensive wristwatch. TAG Heuer—A leader in the luxury watch industry, the Swiss firm TAG Heuer distinguishes itself by focusing on extreme chronograph precision in its watches, and on sports and auto-racing sponsorship in its advertising. TAG ’s image and positioning is inextricably connected to chronograph precision. TAG Heuer uses officially licensed retailers to sell its watches both in stores and online. The watchmaker generates brand awareness through brand ambassadors and sponsoring sporting events and advertises extensively in magazines. OMEGA—OMEGA has long prided itself on the precision of its watches and timing devices. OMEGA was the time equipment selected for the 1936 Winter Olympics, which saw the first use of synchronized chronographs. OMEGA employs ambassadors to generate brand awareness, including athletes Michael Phelps, Alexander Popov, Ernie Els, and race car driver Michael Schumacher as well as Hollywood stars Nicole Kidman and Cindy Crawford. OMEGA watches are offered in both women’s and men’s styles in four different collections: Constellation, Seamaster, Speed master, and De Ville. Prices vary greatly even within individual collections. Patek Philippe— The innovator of many technologies found in today’s high-end watch, Patek Philippe represents the absolute pinnacle of luxury timepieces. In particular, the firm prides itself on creating many of the world’s most complicated watches through innovations with split-second chronograph and perpetual date technology. Patek Philippe does not rely on event sponsorship or brand ambassadors to generate name recognition. Patek Philippe evaluates every authorized dealer’s storefront to ensure that it meets the watchmaker’s quality standards. It also separates itself from other watchmakers on price, with its least expensive no customized watch retailing. Strategic Recommendations Positioning Points-of-Parity—Rolex is similar to other watchmakers in the high-end luxury watch market on several levels. All pride themselves on their attention to detail and ongoing innovation in the watch industry. Points-of-Difference—Rolex separates itself from the competition in several ways. Through careful selection of event sponsorships and brand ambassadors, Rolex has cut through the clutter, resonated with consumers around the world, and maintained an air of prestige. Brand Mantra—Rolex has been extremely successful in building a global name through clever marketing and communications, without compromising the integrity of the brand. Tactical Recommendations The Rolex brand audit proved that Rolex is a very strong brand with significant brand equity. It also identified a few opportunities and challenges: Leverage the Company’s Independent, Continuous Heritage and Focus • Rolex is the largest and most successful watch company in the world. As a result, many consumers don’t realize it is privately owned and competes against major conglomerates. While being privately owned is a good thing for many reasons, it also brings up several challenges. • Rolex may want to leverage and promote the fact that in some ways it has to work harder to succeed. Leverage the Company’s Elite Craftsmanship and Innovation • Research from the Luxury Institute group suggested that consumers do not consider Rolex the top brand in quality and exclusivity. Connect with the Female Consumer • Women are more and more interested in purchasing unisex mechanical watches rather than feminine-styled watches. This is a great opportunity for Rolex, whose watches are primarily masculine in design. • Rolex may want to tweak its female ambassador list to coincide with a more unisex product line. Attack the Online Counterfeit Industry • To maintain its limited distribution, Rolex does not authorize any of its watches to be sold on the Internet. In order to combat the online sale of counterfeits, however, Rolex might consider building an exclusive online store, or an exclusive distribution site to which all official e-retailers must link. In fact, Rolex dedicates extensive resources to fight the illegal use of the brand, including sponsoring the International Anti-Counterfeiting Coalition and suing companies that allow the sale of counterfeit Rolexes. Use Marketing to Reach Younger Consumers • Research has shown that younger consumers do not value watches the same way older generations did. Communicate Long-Term Value • Rolex competes for a share of the luxury buyer’s wallet with a host of other types of goods, such as clothes, shoes, and handbags. Many are less durable over time than a Rolex watch and are susceptible to falling out of fashion. • Swiss luxury watch competitor Patek Philippe used print advertising to communicate the heirloom quality of its watches. Rolex could pursue a similar approach. Discussion questions 1. What do you see as the biggest challenges in conducting a brand audit? What steps would you take to overcome them? Answers will vary. A brand audit is a comprehensive examination of a brand to discover its sources of brand equity. It is a more externally, consumer-focused exercise to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity. A brand audit requires understanding the sources of brand equity from the perspective of both the firm and the consumer. Students may be divided into groups to discuss ways of overcoming challenges faced while conducting a brand audit. The biggest challenges in conducting a brand audit include: 1. Data Collection and Accuracy: Gathering accurate and comprehensive data on brand performance and consumer perceptions can be difficult. Solution: Use multiple data sources such as surveys, interviews, and market analysis to ensure a well-rounded view. Employ data triangulation to cross-verify findings. 2. Consistency and Comparability: Ensuring consistency in data over time and across different markets can be challenging. Solution: Develop standardized metrics and frameworks for evaluation. Regularly review and update methodologies to maintain consistency. 3. Subjectivity in Analysis: Interpreting brand perceptions and market data can be subjective. Solution: Incorporate quantitative measures alongside qualitative insights. Use statistical methods to minimize bias and ensure objective analysis. 4. Stakeholder Alignment: Different stakeholders may have varying perspectives on the brand's performance and value. Solution: Engage stakeholders throughout the audit process to align expectations and gather diverse viewpoints. Facilitate workshops or meetings to build consensus. By addressing these challenges with structured approaches, the effectiveness of a brand audit can be significantly improved. 2. Pick a brand. See if you can assemble a brand inventory for it. Answer: Answers will vary depending on current brand performance. The purpose of the brand inventory is to provide a current, comprehensive profile of how all the products and services sold by a company are marketed and branded. For Nike: 1. Brand Elements: • Name: Nike • Logo: Swoosh • Tagline: "Just Do It" 2. Product Lines: • Footwear, Apparel, Equipment 3. Positioning: • Target: Athletes and fitness enthusiasts • Promise: High-performance, innovative products 4. Marketing: • Channels: TV, social media • Endorsements: Athletes like LeBron James 5. Associations: • Values: Innovation, performance 3. Consider the McDonald’s tracking survey presented in Branding Brief 8-1. What might you do differently? What questions would you change or drop? What questions might you add? How might this tracking survey differ from those used for other products? Answer: Answers will vary. Students may be divided into groups of 3-4 to weigh and assess the tracking survey provided in the branding brief. They may then be asked to opine on the survey and differentiate it from a survey for another product such as Wal-Mart. To improve the McDonald’s tracking survey: 1. Change/Drop Questions: • Remove: Generic questions that don't provide actionable insights (e.g., questions about general food preferences that don’t relate to McDonald’s). • Add: Questions focusing on recent menu changes, promotional effectiveness, and customer satisfaction with specific items or services. 2. Add Questions: • Include: Questions on the impact of digital ordering, satisfaction with delivery services, and perceptions of sustainability efforts. 3. Differences from Other Products: • Frequency: McDonald’s surveys may focus on daily/weekly visit habits, while other products might track less frequently. • Brand Experience: Emphasize aspects unique to fast food, like service speed and menu variety, compared to other product categories. 4. Can you develop a tracking survey for the Mayo Clinic? How might it differ from the McDonald’s tracking survey? Answer: A tracking study for the Mayo Clinic would probably need to be designed for two different groups of consumers, those who had received care at the Mayo Clinic and those who had not. Those who had received care at the Mayo Clinic would be much more informed about the type and quality of care available, and would be able to give more detailed responses to more specific questions. The sample set that had not received care from the Mayo Clinic would be equally valuable, because it would provide insight into public perception of the brand. The questions on the Mayo Clinic tracking survey would differ dramatically from the McDonald’s survey, but would still cover the six elements of the customer-based brand equity pyramid. Mayo Clinic Tracking Survey: 1. Patient Care: Satisfaction with medical care and appointment scheduling. 2. Service Quality: Professionalism of staff and communication. 3. Overall Experience: Facility environment and follow-up care. 4. Improvements: Feedback on areas needing improvement. Differences from McDonald’s Survey: • Focus: Mayo Clinic on patient care; McDonald’s on food and service. • Frequency: Mayo Clinic surveys are less frequent and more detailed. • Metrics: Mayo Clinic measures clinical service, McDonald’s measures product satisfaction. 5. Critique the Rolex brand audit in Brand Focus 8.0. How do you think it could be improved? Answer: Answers will vary. A brand audit is a comprehensive examination of a brand to discover its sources of brand equity. Students may be asked to assess whether the Rolex brand audit was consumer-focused. They may be asked to discuss whether the sources of brand equity from the perspective of both the firm and the consumer was clearly understood and taken into consideration. Students may be asked to suggest ways to improve the audit and leverage the brand equity. Critique of Rolex Brand Audit: 1. Depth of Analysis: The audit might lack depth in exploring customer perceptions beyond luxury and prestige. 2. Competitive Benchmarking: It could benefit from a more detailed comparison with competitors in the luxury watch market. 3. Consumer Insights: Incorporating more diverse consumer feedback and behavioral insights could provide a fuller picture of brand equity. 4. Digital Presence: Assessing Rolex’s digital strategy and online customer engagement could be improved. Improvements: • Enhance Depth: Include in-depth analysis of brand perception and customer loyalty. • Broaden Benchmarking: Compare Rolex more thoroughly with direct competitors. • Expand Consumer Feedback: Use varied sources for a comprehensive view of consumer attitudes. • Evaluate Digital Strategy: Assess online presence and digital engagement more critically. Exercises and assignments 1. Have students discuss how they would go about conducting a brand audit for a brand of their choice. This activity will help them understand better the concepts of brand inventory and brand exploratory. Answer: To conduct a brand audit for a chosen brand, follow these steps: 1. Brand Inventory: • Collect Data: Gather information on brand elements (name, logo, tagline), product lines, and marketing materials. • Analyze Touchpoints: Review how the brand is presented across various channels (advertising, social media, packaging). 2. Brand Exploratory: • Consumer Insights: Conduct surveys, focus groups, and interviews to understand consumer perceptions and brand associations. • Evaluate Performance: Analyze brand performance metrics such as market share, customer loyalty, and sales data. 3. Comparison and Benchmarking: • Competitive Analysis: Compare findings with competitors to identify strengths and weaknesses. 4. Recommendations: • Strategic Insights: Develop actionable insights and recommendations based on the audit findings to enhance brand equity. 2. Have groups of students design a brand tracking survey for the same brand. The groups may then assess the similarities and differences between the surveys. Answer: To design a brand tracking survey for a chosen brand: 1. Survey Design: • Core Areas: Include questions on brand awareness, brand perceptions, purchase behavior, and customer satisfaction. • Metrics: Use both quantitative (ratings, scales) and qualitative (open-ended) questions to gather comprehensive feedback. • Frequency: Determine how often the survey will be conducted (e.g., quarterly, annually). 2. Assessment of Surveys: • Similarities: Compare common questions about brand awareness and customer satisfaction. • Differences: Note variations in focus areas, question formats, and specific metrics used. By comparing these aspects, students can understand different approaches to tracking brand performance and measuring brand equity. 3. Have students choose a well-known brand and develop a Brand Equity Charter. Students may then identify current branding issues facing the chosen company and use the Brand Equity Charter to develop responses to these issues. Answer: Brand Equity Charter for a Chosen Brand: 1. Brand Mission: Define the brand’s core purpose and values. 2. Brand Vision: Outline the long-term goals and aspirations. 3. Brand Promise: Specify the key benefits and experiences the brand delivers. 4. Brand Positioning: Identify target audience, market position, and unique selling propositions. 5. Brand Equity Objectives: Set measurable goals for brand equity, such as improving brand awareness or customer loyalty. Addressing Branding Issues: 1. Identify Issues: Analyze current challenges (e.g., declining market share, negative perceptions). 2. Develop Responses: Use the Brand Equity Charter to align strategies with the brand’s mission, vision, and promise. For instance, if facing negative perceptions, focus on reinforcing the brand promise and improving customer experience. By aligning responses with the Brand Equity Charter, students can create targeted and coherent strategies to address branding issues. 4. Have several different groups of students create a Brand Equity Report for the same brand. Have them evaluate the differences and similarities in the reports’ designs and their findings. Answer: Brand Equity Report Creation: 1. Report Design: • Key Sections: Include brand inventory, brand exploratory, consumer insights, performance metrics, and strategic recommendations. • Data Sources: Utilize surveys, focus groups, market analysis, and competitive benchmarking. 2. Evaluation: • Similarities: Compare common elements such as brand performance metrics, consumer perceptions, and core findings. • Differences: Note variations in data interpretation, focus areas, and recommended strategies. By analyzing these similarities and differences, students can gain insights into diverse approaches to assessing and managing brand equity. Key take-away points 1. Understanding what consumers believe, think, know and infer about a brand is critical to building and managing brand equity. 2. The purpose of a brand equity measurement system is to provide timely, accurate and actionable information that marketers can use in their tactical and strategic decision-making. 3. To learn how consumers think, feel, and act toward brands and products so the company can make informed strategic positioning decisions, marketers should first conduct a brand audit. 4. The purpose of the brand inventory is to provide a current, comprehensive profile of how all the products and services sold by a company are marketed and branded. 5. The brand exploratory is research directed to understanding what consumers think and feel about the brand and act toward it in order to better understand sources of brand equity as well as any possible barriers. 6. Brand tracking studies collect information from consumers on a routine basis over time, usually through quantitative measures of brand performance on a number of key dimensions that marketers can identify in the brand audit or other means. 7. Brand equity management systems involve the creation of a Brand Equity Charter and Brand Equity Report, plus the development of senior management to oversee the implementation of these tools. Instructor Manual for Strategic Brand Management: Building, Measuring, and Managing Brand Equity Kevin Lane Keller 9780132664257, 9780273779414