Chapter 1
Brands & Brand Management
Chapter Objectives
1. Define “brand,” state how brand differs from a product, and explain what brand equity is.
2. Summarize why brands are important.
3. Explain how branding applies to virtually everything.
4. Describe the main branding challenges and opportunities.
5. Identify the steps in the strategic brand management process.
This chapter sets up the rationale for the book. Because brands are so valuable to the firms that manufacture them and the consumers who purchase them, and because the marketplace has become increasingly complex and competitive, brand management is more important and challenging now than it ever has been. Brand managers face a seemingly unlimited number of options and opportunities with respect to product, price, place, and promotion strategies. But they also face increased risk as they strive to deal with sea changes in the marketing environment, including the rise of private labels, media fragmentation, pressure for short-term results, shifting consumer preferences, and technological advancements that level the product feature playing field, to name just a few.
Despite these pressures, many brands continue to grow and flourish, as evidenced by the global successes of such mega-names as Nike, Disney, Mercedes, and others. Moreover, even categories that heretofore had been thought of as consisting of mundane commodity products now contain brands, including Campbell’s mushrooms, Blue Rhino propane gas, and Perdue chickens.
Chapter 1 also indicates that by focusing specifically on brands, this book enables students to gain valuable knowledge, broader perspectives, and more strategic insights than in a more general marketing text. The chapter introduces the concept of a brand as an identifiable and differentiated good or service. Brands offer tangible and intangible benefits to the companies who manufacture them, the retailers who sell them, and the consumers who buy them. Examples of strong brands given in the text include not only products and services, but also people, places, and sports, art, and entertainment industries. The chapter describes some of the past and present challenges faced by brands (such as those noted above), and states that the purpose of the book is to set forth principles, models and frameworks that will help guide managers through these challenges as they plan and execute brand strategies.
The chapter details the three main factors that contribute to brand equity: the initial choices for the brand elements or identities making up the brand; the way the brand is integrated into the supporting marketing program; and the associations indirectly transferred to the brand by linking the brand to some other entity (e.g., the company, country of origin, channel of distribution, or another brand). Several strategic imperatives for effective brand equity management are introduced in the chapter.
In this chapter, the strategic brand management process is described. The strategic brand management process involves four main steps: identifying and establishing brand positioning and values, planning and implementing brand marketing programs, measuring and interpreting brand performance, and growing and sustaining brand equity.
Brand Focus 1.0 discusses the history of branding. It traces the development of brands from marks of identification on stone age pottery to national manufacturer brands in the Industrial Revolution to mass marketed brands.
THE SCIENCE OF BRANDING 1-1
UNDERSTANDING BUSINESS-TO-BUSINESS BRANDING
Due to the complexity and high risk involved in business-to-business purchase decisions, branding plays an important role in B2B markets. Six specific guidelines are defined for marketers of B2B brands:
Brands & Brand Management
Chapter Objectives
1. Define “brand,” state how brand differs from a product, and explain what brand equity is.
2. Summarize why brands are important.
3. Explain how branding applies to virtually everything.
4. Describe the main branding challenges and opportunities.
5. Identify the steps in the strategic brand management process.
Overview
This chapter sets up the rationale for the book. Because brands are so valuable to the firms that manufacture them and the consumers who purchase them, and because the marketplace has become increasingly complex and competitive, brand management is more important and challenging now than it ever has been. Brand managers face a seemingly unlimited number of options and opportunities with respect to product, price, place, and promotion strategies. But they also face increased risk as they strive to deal with sea changes in the marketing environment, including the rise of private labels, media fragmentation, pressure for short-term results, shifting consumer preferences, and technological advancements that level the product feature playing field, to name just a few.
Despite these pressures, many brands continue to grow and flourish, as evidenced by the global successes of such mega-names as Nike, Disney, Mercedes, and others. Moreover, even categories that heretofore had been thought of as consisting of mundane commodity products now contain brands, including Campbell’s mushrooms, Blue Rhino propane gas, and Perdue chickens.
Chapter 1 also indicates that by focusing specifically on brands, this book enables students to gain valuable knowledge, broader perspectives, and more strategic insights than in a more general marketing text. The chapter introduces the concept of a brand as an identifiable and differentiated good or service. Brands offer tangible and intangible benefits to the companies who manufacture them, the retailers who sell them, and the consumers who buy them. Examples of strong brands given in the text include not only products and services, but also people, places, and sports, art, and entertainment industries. The chapter describes some of the past and present challenges faced by brands (such as those noted above), and states that the purpose of the book is to set forth principles, models and frameworks that will help guide managers through these challenges as they plan and execute brand strategies.
The chapter details the three main factors that contribute to brand equity: the initial choices for the brand elements or identities making up the brand; the way the brand is integrated into the supporting marketing program; and the associations indirectly transferred to the brand by linking the brand to some other entity (e.g., the company, country of origin, channel of distribution, or another brand). Several strategic imperatives for effective brand equity management are introduced in the chapter.
In this chapter, the strategic brand management process is described. The strategic brand management process involves four main steps: identifying and establishing brand positioning and values, planning and implementing brand marketing programs, measuring and interpreting brand performance, and growing and sustaining brand equity.
Brand Focus 1.0 discusses the history of branding. It traces the development of brands from marks of identification on stone age pottery to national manufacturer brands in the Industrial Revolution to mass marketed brands.
Science of Branding
THE SCIENCE OF BRANDING 1-1
UNDERSTANDING BUSINESS-TO-BUSINESS BRANDING
Due to the complexity and high risk involved in business-to-business purchase decisions, branding plays an important role in B2B markets. Six specific guidelines are defined for marketers of B2B brands:
- Ensure the entire organization understands and supports branding and brand management—Employees at all levels and in all departments must have a complete, up-to-date understanding of the vision for the brand and their role in supporting it. A particularly crucial area is the sales force, where personal selling is often the profit driver of a business-to-business organization.
- Adopt a corporate branding strategy if possible and create a well-defined brand hierarchy—Because of the breadth and complexity of the product or service mix, companies selling business-to-business are more likely to emphasize corporate brands. Ideally, they will also create straightforward sub-brands that combine the corporate brand name with descriptive product modifiers.