PDF Strategic Brand Management Process - Springer

Strategic Brand Management Process

Kevin Lane Keller and Tim Oliver Brexendorf

Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 Brand Equity as a Bridge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 The Strategic Brand Management Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Abstract Brands with a strong equity are no accident ? they are a result of thoughtful and imaginative planning and a strategic brand management process. Firms launching a new product need to carefully and creatively craft brand strategies and tactics to maximize the probability of success. This article concentrates on four steps that brand marketers must take in branding: 1) Identifying and establishing brand positioning and values, 2) Planning and implementing brand marketing programs, 3) Measuring and interpreting brand performance, and 4) Growing and sustaining brand equity. For each step, we highlight core concepts, illustrative examples, and practical guidelines. Accomplishing the four steps helps to ensure that a brand strategy is put into place that maximizes the potential value of the new product or service.

K.L. Keller (*) Tuck School of Business, Dartmouth College, Hanover, NH, USA E-Mail: kevin.l.keller@dartmouth.edu

T.O. Brexendorf Henkel Center for Consumer Goods (HCCG), WHU ? Otto Beisheim School of Management, Vallendar, Deutschland E-Mail: tim.brexendorf@whu.edu

# Springer Fachmedien Wiesbaden 2016

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F.-R. Esch (Hrsg.), Handbuch Markenf?hrung, Springer Reference Wirtschaft,

DOI 10.1007/978-3-658-13361-0_8-1

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K.L. Keller und T.O. Brexendorf

Keywords Strategic brand management ? Brand planning ? Brand management process ? Brand strategy ? Branding

1 Introduction

Brands are one of the most important assets of the firm. In an increasingly complex world, individuals and businesses are faced with more and more choices, but seemingly have less and less time to make those choices. The ability of a strong brand to simplify consumer decision-making, reduce risk, and set expectations is thus invaluable. Creating strong brands that deliver on that promise and maintaining and enhancing the strength of those brands over time is thus a management imperative. Brands with a strong equity are no accident ? they are a result of thoughtful and imaginative planning and a strategic brand management process.

Brand equity is defined in terms of marketing effects uniquely attributable to a brand. Brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand, as compared to if that same product or service was not identified by that brand. Branding is all about creating differences. Most marketing observers also agree with the following basic principles of branding and brand equity: These differences in outcomes arise from the "added value" endowed to a product as a result of past marketing activity for the brand; there are many different ways that this value can be created for a brand; brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a brand; and there are many different ways as to how the value of a brand can be manifested or exploited to benefit the firm (i.e., in terms of greater proceeds and/or lower costs).

Strategic brand management involves the design and implementation of marketing programs and activities to build, measure, and manage brand equity. The strategic brand management process can be defined as involving four main steps (Fig. 1):

1) Identifying and establishing brand positioning and values, 2) Planning and implementing brand marketing programs, 3) Measuring and interpreting brand performance, and 4) Growing and sustaining brand equity.

Each of these main steps can be further expanded and subdivided. We highlight some core concepts, illustrative examples and practical guidelines.

In this chapter, we first motivate the importance of brand equity before briefly highlighting each of these four steps and core concepts.

Strategic Brand Management Process

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Identify and Establish Brand Positioning and Values

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Plan and Implement Brand Marketing Programs

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(Pre-launch) brand audit Competitive frame of reference Points-of-parity and points-of-difference Brand mantra Internal brand support

Brand elements Brand marketing activities and programs Secondary associations

3

Measure and Interpret Brand Performance

Brand value chain Brand tracking Brand equity management system

4 Grow and Sustain

Brand Equity Fig. 1 The strategic brand management process

Brand-product matrix Brand portfolios and hierarchies Brand reinforcement and revitalization Brand expansion

2 Brand Equity as a Bridge

According to a customer-based perspective of brand equity, the power of a brand lies in the minds of consumers or customers and what they have experienced and learned about the brand over time. Consumer knowledge is what drives the differences that manifest themselves in terms of brand equity. This realization has important managerial implications. In an abstract sense, according to this view, brand equity provides marketers with a vital strategic "bridge" from their past to their future (Keller and Lehmann 2009).

2.1 Brands as a Reflection of the Past

That is, all of the dollars spent each year on manufacturing and marketing products should not so be thought so much as "expenses" but as "investments" ? investments in what consumers learned, felt, experienced, etc. about the brand. If not properly designed and implemented, these expenditures may not be "good" investments, in that the right knowledge structures may not have been created in consumers' minds, but they should be considered investments nonetheless. Thus, the quality of the investment in brand building is the most critical factor, not necessarily the quantity

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K.L. Keller und T.O. Brexendorf

of investment, beyond some minimal threshold amount. In that sense, it is actually possible to "overspend" on brand building if money is not being spent wisely. Conversely, there are examples of brands who are being considerably outspent who amass a great deal of brand equity by judiciously spending on marketing activities that create valuable, enduring memory traces in the minds of consumers.

2.2 Brands as Direction for the Future

At the same time, the brand knowledge that has been created over time by these marketing investments dictates appropriate and inappropriate future directions for the brand. Consumers will decide, based on their brand beliefs, attitudes, etc., where they think the brand should go and grant permission (or not) to any marketing action or program. Thus, at the end of the day, the true value and future prospects of a brand rests with consumers and their knowledge about the brand.

In short, regardless of the particular definition adopted, the value to marketers of brand equity as a concept ultimately depends on how they use it. Brand equity can offer focus and guidance, providing marketers with a means to interpret their past marketing performance and design their future marketing programs. Everything the firm does can help to enhance or detract from brand equity. Those marketers who build strong brands have embraced the concept and use it to its fullest as means of clarifying, communicating, and implementing their marketing actions.

3 The Strategic Brand Management Process

The strategic brand management process comprises four successive steps. For each step, we highlight core concepts, illustrative examples, and practical guidelines. Accomplishing the four steps helps to ensure that brand strategy is put into place that maximizes the potential value of the new product or service. Every strategic brand management process should start with a (pre-launch) brand audit that undertakes an inventory of the current brand status.

3.1 Identifying and Establishing Brand Positioning and Values

The strategic brand management process starts with a clear understanding as to what the brand is to represent and how it should be positioned with respect to consumers and competitors. Kotler and Keller (2015, p. 299) define brand positioning as the "act of designing the company's offer and image so that it occupies a distinct and valued place in the target customer's mind." The goal is to locate the brand in the minds of consumers such that the potential benefit to the firm is maximized. Competitive brand positioning is all about creating brand superiority in the minds of consumers.

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3.1.1 Conducting a (Pre-Launch) Brand Audit Marketers must learn and understand what consumers know about the brand. To implement a brand positioning, firms often conduct a brand audit. It provides crucial input for brand positioning. Whereas a pre-launch brand audit is used to set strategic focus and direction for the brand, a brand audit is a consumer-focused exercise that involves a series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity (Keller 2015).

The brand audit consists of research 1) within the company (brand inventory) and 2) outside the company with consumers and intermediaries, (e.g., retailers) (brand exploratory). The purpose of the brand inventory is to provide a complete, up-to-date profile of how all the products and services sold by a company are marketed and branded. Profiling each product or service requires that the associated brand elements must be identified as well as the supporting marketing program. The brand exploratory is research activity directed to understand what consumers think and feel about the brand to identify sources of brand equity.

3.1.2 Key Components of Brand Positioning Determining the desired brand knowledge structures thus involves positioning a brand in the minds of consumers. Fundamentally, positioning should convince consumers of the advantages of a brand vis-?-vis competitors, while at the same time alleviating concerns about any possible disadvantages. Four key components to a superior competitive brand positioning are

1) A competitive frame of reference (CFR) in terms of the target market and nature of competition;

2) points-of-difference (POD) in terms of strong, favorable, and unique brand associations;

3) points-of-parity (POP) in terms of brand associations that negate any potential weaknesses of the brand or potential points-of-difference by competitors; and

4) A brand mantra that summarizes the essence of the brand and key points-ofdifference in 3?5 words (Keller 2015).

The competitive frame of reference (CFR) specifies which other brands a brand competes with and therefore which brands should be the focus of analysis and study. Determining the proper competitive frame of reference depends on understanding consumer behavior and the consideration sets consumers adopt in making brand choices. A good starting point in defining a competitive frame of reference for brand positioning is to determine the products or sets of products with which a brand competes and which function as close substitutes. For a brand with explicit growth intentions to enter new markets, a broader or maybe even more aspirational competitive frame may be necessary to reflect possible future competitors. It's not uncommon for a brand to identify more than one possible frame of reference as a result of broader category competition or the intended growth of a brand (for further elaboration see Keller 2012). The appropriate frame of reference typically emerges from a

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