Sem 9-Brand Marketing Module 4_2019

LJIMS 5 Year Integrated MBA (IMBA) program

Semester 9: Brand Marketing
Subject Code: 4190503

Module 4:

 Designing and Implementing Branding Strategies

 Managing Brands over Geographic Boundaries and
 Market Segments.

Brand Architecture:

Brand Architecture is an important part of any company and can be referred to as a building
plan. The main factor that helps in making a strong and durable brand is its brand
architecture.

 It is the responsibility of brand architecture to make sure that every chunk fits its
required place in the greater picture.
 The brand architecture makes the structural plans, assures that the work is seamless,
and adheres to a definite time-period.
 It’s responsibility is to create guidelines and make sure that those are being followed.
 If a company is planning on a new launch of products or is extending its
current product line, then a competent brand architecture will prove to be a boon for the
company.
 It is the bridge between the employees of a company and the customers used to
maintain a perfect and harmonious balance between them.

Brand architectures have become an integrated part of any company and they have proved
their worth to the company repeatedly. They are a direct link between the main brands and
the sub brands. For example, Procter & Gamble or P&G is the main brand and has many sub
brands like Oral B,  Olay, and Tideetc. under its umbrella. It is here the efficiency of a good
architecture comes into force as it maintains a direct link between all these brands. It is his
responsibility to see that all the brands are continuing to grow and move forward.

The brand architecture is also accountable for maintaining the loyalty of its consumers. For
this purpose, they invent new ideas to attract their customer base. For example, companies
like  Tide regularly provide added incentives. Sometimes they reduce the price of the products
at other times they increase the quantity of the products. Big brands
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like Maruti and Bajaj like to give discounts on their actual prices at special occasions

like Diwali, as they are aware that the consumers generally go on a shopping spree during
festival times. The brand architecture is also accountable for maintaining the loyalty of its
consumers. For this purpose, they invent new ideas to attract their customer base. For
example, companies like Tide regularly provide added incentives. Sometimes they reduce the
price of the products at other times they increase the quantity of the products. Big brands
like Maruti and Bajaj like to give discounts on their actual prices at special occasions
like Diwali, as they are aware that the consumers generally go on a shopping spree during
festival times.

Advantages of Brand Architecture

Good and efficient brand architecture is necessary to any company and the many positives to
be gained by employing brand architecture are as follows-

 The brand architecture ensures the smooth running of an organization.

 It keeps a constant vigil on the market and its current trends.
 Documenting the numerous strategies and helping in decision making
 The main difference between a successful and unsuccessful company is often brand
architecture.
 One of the main duties of the brand architecture is to maintain a balance between the
main brand and its sub brands.
 It is the brand architecture which determines when and where to launch new products
so that the consumers readily accept it.

One the downside, bad brand architecture will lead to negative consequences such as:

 If a company has disorganized brand architecture then it will lead to chaos within the
organization.
 This will result in a decline in the value of the brand.
 Ultimately, the sales figures will be affected and it will have serious repercussions on
the profit and loss scenario.
 In such cases, the bottom line usually is the slow and steady disintegration of the
brand.
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In order to target consumers who follow different brands, the brand architecture has to make
an in-depth market study and after analyzing every aspect, they come up with plans to target
these customers. For example, Motorola launched its new product Moto-G and was able to
snip a large part of Samsung’s customer base, as the compared prices were different although
the features were same.

Ansoff matrix

This model is essential for strategic marketing planning where it can be applied to look at
opportunities to grow revenue for a business through developing new products and services
or "tapping into" new markets. So it's sometimes known as the ‘Product-Market Matrix’
instead of the ‘Ansoff Matrix’. This focus on growth means that it's one of the most widely
used marketing models. It is used to evaluate opportunities for  companies to increase their
sales through showing alternative combinations for new markets (i.e. customer segments and
geographical locations) against products and services offering four strategies as shown.
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How to use the Ansoff Matrix

Strategic questions that can be answered using the matrix include:

 Market Penetration: How to sell more of your existing products or services to your

existing customer base?

 Market Development: How to enter new markets?

 Product and Development: How to develop existing products or services.

 Diversification: How to move into new markets with new products or services,

increase your sales with your existing customer base as well as acquisition.

You may be executing more than one of these strategies depending on the stage in your
business,
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My best practice tip is to use Ansoff at least once a year in strategic planning for your
business to identify potential new markets, new products as well as product development
opportunities.

To evaluate the suitability of these strategies, issues to consider for each of these:

1. Market Penetration: change your opening hours of your store, reduce order

processing times, showcase entire product portfolio etc.

2. Market Development: Does your research on your market share in your existing

sectors back up potential demand for you to  ?  Can your company support this with
existing resources?

3. Product and Development: cheaper manufacturers, improve quality, review

packaging, ask customers and influencers for feedback etc.

4. Diversification:  Assess expertise, technical know-how. Can you move into a new

market with a new product offer using the skills in your business? Do you have a strong
management team to support it.

 Examples of how the Ansoff Matrix can be applied to digital marketing strategy

The Ansoff matrix is useful for developing online strategies too, for example...

 For Market Development strategy. a supplier of a range of MRO (maintenance,

repair and operations) items, found a new online market when they launcher their site,
with 10% of their web-based sales to individual consumers rather than traditional business
customers. It also uses the website to offer additional facilities for customers placing large
orders online.The UK retailer Argos found the opposite was true with 10% of website
sales being from businesses when their traditional market was consumer-based. EasyJet
also has a section of its website to serve business customers.

 Product development: – e.g. online trade magazine  diversified to a B2B portal

Construction Plus which had new revenue streams. Similarly, music and book publishing
companies have found new ways to deliver products through a new development and
usage model such as subscription and pay-per-use. Retailers can extend their product
range and provide new bundling options online also.

 Diversification: Ryanair offers it customers discounts if they book car hire with Hertz
car rentals.  

To find out more how to review these strategies, which explains how to use the strategies for
some of the following objectives.

 1. Market Penetration: market share growth, customer loyalty improvement and

customer value improvement.

 2. Market Development: use of online channels to sell into new markets at low cost.
Sell existing products to new market segments and different types of customers.
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 3. Product development: Use the web to add value to or extend existing products or

services.

 4. Diversification: into related business, unrelated business, upstream integration

with suppliers, downstream integration with intermediaries.

BCG Matrix

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed
by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic
representation for an organization to examine different businesses in it’s portfolio on the
basis of their related market share and industry growth rates. It is a two dimensional analysis
on management of SBU’s (Strategic Business Units). In other words, it is a comparative
analysis of business potential and the evaluation of environment.

According to this matrix, business could be classified as high or low according to their
industry growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

The analysis requires that both measures be calculated for each SBU. The dimension of
business strength, relative market share, will measure comparative advantage indicated by
market dominance. The key theory underlying this is existence of an experience curve and
that market share is achieved due to overall cost leadership.

BCG matrix has four cells, with the horizontal axis representing relative market share and the
vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0.
if all the SBU’s are in same industry, the average growth rate of the industry is used. While,
if all the SBU’s are located in different industries, then the mid-point is set at the growth rate
for the economy.

Resources are allocated to the business units according to their situation on the grid. The four
cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of
these cells represents a particular type of business.
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                10 x                                  1 x                                  0.1 x

1. Stars- Stars represent business units having large market share in a fast growing
industry. They may generate cash but because of fast growing market, stars require
huge investments to maintain their lead. Net cash flow is usually modest. SBU’s
located in this cell are attractive as they are located in a robust industry and these
business units are highly competitive in the industry. If successful, a star will become
a cash cow when the industry matures.
2. Cash Cows- Cash Cows represents business units having a large market share in a
mature, slow growing industry. Cash cows require little investment and generate cash
that can be utilized for investment in other business units. These SBU’s are the
corporation’s key source of cash, and are specifically the core business. They are the
base of an organization. These businesses usually follow stability strategies. When
cash cows loose their appeal and move towards deterioration, then a retrenchment
policy may be pursued.
3. Question Marks- Question marks represent business units having low relative market
share and located in a high growth industry. They require huge amount of cash to
maintain or gain market share. They require attention to determine if the venture can
be viable. Question marks are generally new goods and services which have a good
commercial prospective. There is no specific strategy which can be adopted. If the
firm thinks it has dominant market share, then it can adopt expansion strategy, else
retrenchment strategy can be adopted. Most businesses start as question marks as the
company tries to enter a high growth market in which there is already a market-share.
If ignored, then question marks may become dogs, while if huge investment is made,
then they have potential of becoming stars.
4. Dogs- Dogs represent businesses having weak market shares in low-growth markets.
They neither generate cash nor require huge amount of cash. Due to low market share,
these business units face cost disadvantages. Generally retrenchment strategies are
adopted because these firms can gain market share only at the expense of
competitor’s/rival firms. These business firms have weak market share because of
high costs, poor quality, ineffective marketing, etc. Unless a dog has some other
strategic aim, it should be liquidated if there is fewer prospects for it to gain market
share. Number of dogs should be avoided and minimized in an organization.

Limitations of BCG Matrix

The BCG Matrix produces a framework for allocating resources among different business
units and makes it possible to compare many business units at a glance. But BCG Matrix is
not free from limitations, such as-

1. BCG matrix classifies businesses as low and high, but generally businesses can be
medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in this model.
3. High market share does not always leads to high profits. There are high costs also
involved with high market share.
4. Growth rate and relative market share are not the only indicators of profitability. This
model ignores and overlooks other indicators of profitability.
5. At times, dogs may help other businesses in gaining competitive advantage. They can
earn even more than cash cows sometimes.
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6. This four-celled approach is considered as to be too simplistic.

Brand Hierarchy

BRAND HIERARCHIES
 A brand hierarchy is a useful means of graphically portraying a firm’s branding
strategy by displaying the number and nature of common and distinctive brand
elements across the firm’s products, revealing their explicit ordering.
 It’s based on the realization that we can brand a product in different ways depending
on how many new and existing brand elements we use and how we combine them for
any one product.
 We can construct a hierarchy to represent how (if at all) products are nested with
other products because of their common brand elements. Figure 11-5displays a simple
characterization of ESPN’s brand hierarchy. Note that ESPN is owned by Walt
Disney Company and functions as a distinct family brand in that company’s brand
portfolio. As the figure shows, a brand hierarchy can include multiple levels.

 There are different ways to define brand elements and levels of the hierarchy. Perhaps
the simplest representation from top to bottom might be:

o Corporate or company brand (General Motors)

o Family brand (Buick)
o Individual brand (Regal)
o Modifier (designating item or model) (GS)
o Product description (midsize luxury sport sedan automobile)

Levels of a Brand Hierarchy

Different levels of the hierarchy have different issues, as we review in turn.

 Corporate or Company Brand Level. The highest level of the hierarchy technically

always consists of one brand—the corporate or company brand. For simplicity, we
refer to corporate and company brands interchangeably, recognizing that consumers
may not necessarily draw a distinction between the two or know that corporations
may subsume multiple companies.

 Family Brand Level. At the next-lowerl evel, a family brand, also called a range
brand or umbrella brand, is used in more than one product category but is not
necessarily the name of the company or corporation. For example, ConAgra’s Healthy
Choice family brand appears on a wide spectrum of food products, including
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packaged meats, soups, pasta sauces, breads, popcorn, and ice cream. Some other
notable family brands for companies that generate more than $1 billion in sales
include Purina and Kit Kat (Nestlé); Mountain Dew, Doritos, and Quaker Foods
(PepsiCo); and Oreo, Cadbury, and Maxwell House (Kraft).

 Family brands thus can be an efficient means to link common associations to multiple
but distinct products. The cost of introducing a related new product can be lower and
the likelihood of acceptance higher when marketers apply an existing family brand to
a new product.

 On the other hand, if the products linked to the family brand and their supporting
marketing programs are not carefully considered and designed, the associations to the
family brand may become weaker and less favorable. Moreover, the failure of one
product may hurt other products sold under the same brand.

 Individual Brand Level. Individual brands are restricted to essentially one product

category, although multiple product types may differ on the basis of model, package
size, flavor, and so forth. For example, in the “salty snack” product class,Frito-
Layoffers Fritos corn chips, Doritos tortilla chips, Lays and Ruffles potato chips, and
Rold Gold pretzels. Each brand has a dominant position in its respective product
category within the broader salty snack product class.
 The main advantage of creating individual brands is that we can customize the brand
and all its supporting marketing activity to meet the needs of a specific customer
group. Thus, the name, logo, and other brand elements, as well as product design,
marketing communication programs, and pricing and distribution strategies, can all
focus on a certain target market. Moreover, if the brand runs into difficulty or fails,
the risk to other brands and the company itself is minimal. The disadvantages of
creating individual brands, however, are the difficulty, complexity, and expense of
developing separate marketing programs to build sufficient levels of brand equity.

 Modifier Level. Regardless of whether marketers choose corporate, family, or

individual brands, they must often further distinguish brands according to the different
types of items or models. A modifier is a means to designate a specific item or model
type or a particular version or configuration of the product. Land O’Lakes offers
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“whipped,” “unsalted,” and “regular” versions of its butter. Yoplait yogurt comes as
“light,” “custard style,” and “original” flavours.
 Product Descriptor. Although not considered a brand element per se, the product
descriptor for the branded product may be an important ingredient of branding
strategy. The product descriptor helps consumers understand what the product is and
does and also helps define the relevant competition in consumers’ minds.
Cause Related marketing:

 Cause-related marketing (CRM) is a mutually beneficial collaboration between a

corporation and a nonprofit designed to promote the former's sales and the latter's
cause.
 Nonprofits can potentially benefit from the increased fundraising and exposure that
CRM offers. Such partnerships, however, must be carefully considered as they can
pose risks to both parties' reputations. For example, a worthy cause could be
cheapened if consumers see the CRM as crass commercialism. Look instead to some
examples of successful partnerships at CauseGood and Selfish Giving.  Another good
resource is the book Designing for the greater good : the best in cause-related
marketing and nonprofit design , which has numerous examples from cause-related
campaigns plus 24 case studies and insights into great nonprofit branding campaigns.

 To find and develop CRM opportunities, nonprofit organizations should expand their
research efforts beyond the traditional corporate giving divisions (such as corporate
foundations or corporate giving programs)and instead try contacting a company's
marketing department. A company may partner with a small, unknown charity simply
because it's a worthy cause, but most look for charities that are well-known with a
large supporter base and, increasingly, marketing know-how.

Managing Brands over Geographic Boundaries and Market Segments.

Reinforcing brand
 The advantage of creating a brand with a high level of awareness and a positive brand
image is that many benefits may accrue to the firm in terms of cost savings and
revenue opportunities.
 The more that there is an attempt to realize or capitalize on brand equity benefits.
 Important factors for Reinforcing is based on:
1) Product-related performance
2) Non-product-related imagery associations
1) Product Related Performance
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For example, after Timex watched brands such as Casio and Swatch gain significant market
share by emphasizing digital technology and fashion.
2) Non Product Related Imagery Usage:
Example: Soft Drink Ads depicting the adventure
II. Revitalising brands
 Changes in consumer tastes and preferences, the emergence of new competitors or
new technology, or any new development in the marketing environment can
potentially affect the fortunes of a brand.
Example: Amul, Bata have seen the Revolutionary success in past years.
Most revitalizable brands suffer from one of three problems: Low awareness, shifting
consumer needs, or heavy competition
Encouraging Consumers To Choose A Brand
1. Strengthening Purchase Attitudes
2. Product and Package Modifications
3. Brand Uniqueness & Equity
4. Increase Purchase Salience (Point of Purchase Awareness & top of the mind)
Adjustments To The Brand Portfolio
 Migration Strategies
 Brand Extension and Sub-branding
 Retiring Brands
 A host of successful brands have had remarkable history of a consistent
identity/execution.
 Brand consistency is critical to maintaining the strength and favorability of brand
associations.
 Benefits of Consistency
1. Ownership of a Position
2. Ownership of Identity Symbol
3. Cost Efficiencies
Difficulties faced in Maintaining Consistency over Time.
 Mindset of Managers
 Problem Solver/Action Orientation
 High Aspirations
 Owned by Predecessor Identity/Execution.
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 Strategic Misconceptions
 A New Paradigm Requires a New Identity/Execution
 The New Identity/Execution is Ineffective
 A Superior Identity/Execution Can Be Found
 Customers Are Bored with a Tired or Stodgy Identity/Execution
 Rebranding is the process by which a product, service is developed with one brand,
company or product line affiliation is marketed or distributed with different identity.
 For example Shopper’s Stop Logo changed from rounded to Flat
 A Brand can enter new markets in two ways:
o They may enter the existing market with a new brand.
 Example: Tata with NANO.
o They may enter a new market.
 For example:Mc-Donalds entering Indian market with products matching Indian taste.

Standardization vs Customization
 Standardisation is an approach that can adapt to work across different cultures and
countries in order to promote products. Markets are becoming more similar and more
internationally based making standardisation a key for survival. It is believed that
standardisation of the marketing mix elements and creating one strategy for the global
market can achieve consistency with customers and lower costs for the organisation.
 As standardisation does not promote marketing strategies for different countries or
regions, this means an organisation can save time and money in its marketing efforts.
Standardisation in international markets generally means that the level of quality can
be expected wherever you are in the world. This marketing strategy also enhances
brand loyalty amongst consumers. As discussed, cost reduction is one of the key
benefits for standardisation.
 The cost per unit can be reduced by selling large quantities of the same, non-adapted
product(s) as well as buying products in bulk. Other advantages related to economies
of scale are an improvement in research and development, lower costs of investments
and operational costs associated with marketing.
 Standardisation also helps organisations to focus on a marketing mix that is
uniformed, which means there is often room for product quality improvement.
Despite the many benefits of standardisation, the marketing strategy also has its
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drawbacks. Selling a unified product in different international markets means there is

no uniqueness and different markets generally have different preferences.
 This means competition can take advantage and customise their product to meet the
needs of the market, ultimately affecting sales. Another disadvantage results from
global manufacturing in various countries, which can pose as a threat as some
countries implement trade barriers meaning an organisation’s products may not be
able to be reached in some countries again affecting sales.
In terms of marketing to Saudi Arabia, a standardised marketing approach may cause
some problems as merino sold in New Zealand is marketed as clothing for colder
climates, as a fashion statement or for adventure sports. Saudi Arabia has a
completely different geographic layout and climate to NZ so this approach will not be
beneficial.
 Customisation is an international marketing strategy based on the idea that due to
culture and other differences within countries, marketing should be tailored
specifically to a country. This means the marketing mix of a product will vary from
country to country. The benefits of customisation mean customers are getting exactly
what they want essentially meaning sales for an organisation will increase. Customer
satisfaction is a key aspect for most organisations. Like any strategy, customisation
also has its drawbacks which are the costs associated with this strategy. More research
is needed to explore various countries markets and because of this continuous
adaption to a product can ensure many expenses.
 Customisation will be the recommended approach when entering into the Saudi
Arabian market. This is because Saudi Arabia has an entirely different culture to NZ,
which means the marketing of merino clothing needs to be tailored to suit the
different cultural circumstances. As I will be targeting workers in the oil industry, it is
important that features of merino wool are displayed to appeal to oil workers. For
example, the durability and acclimatising features of the fabric would be necessary to
market for those working in the oil industry. This is compared to the warmth of the
wool that is heavily marketed in NZ. Although this method of marketing can be
costly, I believe it will be the most beneficial in a foreign market.