Strategic Brand Management

1. Brands Simplify Decisions and Reduce Risk

As consumers’ lives become more complicated, rushed, and time-starved, the ability of a brand to simplify decision-making and reduce risk is invaluable.

Brands as shortcuts. In a world overwhelmed with choices, brands act as mental shortcuts for consumers. Recognizing a brand and having some knowledge about it reduces the need for extensive information processing, lowering search costs and simplifying product decisions. This is especially valuable for experience goods and credence goods, where quality is difficult to assess beforehand.

Brands build trust. Consumers develop trust in brands based on past experiences and marketing programs. This trust allows them to form reasonable expectations about product performance and value. In return for their loyalty, consumers expect brands to behave in certain ways, providing consistent quality, appropriate pricing, and effective communication.

Brands mitigate risk. Brands reduce the perceived risks associated with product decisions. Consumers may perceive functional, physical, financial, social, psychological, or time risks. Well-known brands, especially those with favorable past experiences, serve as a risk-handling device, providing reassurance and confidence in product choices.

2. Customer-Based Brand Equity: The Consumer's Perspective

The basic premise of the CBBE concept is that the power of a brand lies in what customers have learned, felt, seen, and heard about the brand as a result of their experiences over time.

CBBE defined. Customer-Based Brand Equity (CBBE) is the differential effect that brand knowledge has on customer response to the marketing of that brand. It emphasizes that the power of a brand lies in the minds and hearts of customers, shaped by their experiences over time. Positive CBBE results in more favorable reactions to a product and its marketing when the brand is identified.

Brand knowledge is key. Brand knowledge, consisting of brand awareness and brand image, is the key to creating brand equity. Brand awareness reflects the strength of the brand in memory, while brand image encompasses consumers' perceptions about the brand, as reflected by the associations held in consumer memory.

Building brand equity. Marketers must ensure that customers have the right type of experiences with products and services and their accompanying marketing programs to link desired thoughts, feelings, images, beliefs, perceptions, opinions, and experiences to the brand. This requires a deep understanding of consumer needs and wants and a strategic approach to building brand knowledge.

3. Brand Positioning: Establishing a Competitive Advantage

Positioning means finding the proper location in the minds of a group of consumers or market segment, so that they think about a product or service in the right or desired way to maximize potential benefit to the firm.

Positioning defined. Brand positioning involves designing a company's offering and image to occupy a distinct and valued place in the target customer's mind. It requires defining the target market, identifying the nature of competition, and establishing points-of-parity (POPs) and points-of-difference (PODs).

POPs and PODs. Points-of-parity are associations shared with other brands, while points-of-difference are unique attributes or benefits that consumers strongly associate with a brand. Effective positioning requires establishing both POPs to negate competitors' advantages and PODs to create a competitive edge.

Positioning guidelines. Defining and communicating the competitive frame of reference, choosing points-of-difference, and establishing points-of-parity are essential for effective positioning. A good positioning should be desirable, deliverable, and differentiating, providing a compelling reason for consumers to choose the brand.

4. Brand Resonance: Building Deep Customer Relationships

Brand resonance describes the nature of this relationship and the extent to which customers feel that they are in sync with the brand.

Resonance defined. Brand resonance represents the ultimate relationship and level of identification that a customer has with a brand. It is characterized by intensity (depth of the psychological bond) and activity (level of engagement).

Four dimensions of resonance:

• Behavioral loyalty: Repeat purchases and share of category volume
• Attitudinal attachment: Strong personal connection and positive regard
• Sense of community: Identification with other brand users
• Active engagement: Willingness to invest time, energy, and resources in the brand

Building a strong brand. The brand resonance model outlines a sequence of steps for building a strong brand, from establishing brand identity and meaning to eliciting positive responses and fostering intense loyalty relationships. This requires a holistic approach that considers both rational and emotional aspects of the brand.

5. The Brand Value Chain: Linking Marketing to Financial Performance

The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value.

Value creation process. The brand value chain traces the value creation process for brands, starting with marketing program investments and progressing through customer mindset, market performance, and shareholder value. It recognizes that brand value ultimately resides with customers.

Key stages:

• Marketing program investment
• Customer mindset (awareness, associations, attitudes, attachment, activity)
• Market performance (price premiums, market share, brand expansion, cost structure)
• Shareholder value (stock price, market capitalization)

Multipliers. The model incorporates multipliers that influence the transfer of value between stages, including program quality, marketplace conditions, and investor sentiment. These factors determine the extent to which marketing investments translate into financial benefits.

6. Choosing Brand Elements: Creating a Distinct Identity

The key to creating a brand, according to the AMA definition, is to be able to choose a name, logo, symbol, package design, or other characteristic that identifies a product and distinguishes it from others.

Brand elements defined. Brand elements are trademarkable devices that identify and differentiate a brand. They include brand names, URLs, logos, symbols, characters, slogans, jingles, and packaging.

Criteria for choosing brand elements:

• Memorability: Easily recognized and recalled
• Meaningfulness: Descriptive and persuasive
• Likability: Aesthetically appealing
• Transferability: Useful for extensions and across geographies
• Adaptability: Flexible and updatable
• Protectability: Legally and competitively defensible

Tactical considerations. Marketers must carefully consider the options and tactics for each brand element to maximize its contribution to brand equity. This involves choosing appropriate names, designing effective logos, crafting memorable slogans, and creating visually appealing packaging.

7. Designing Integrated Marketing Programs: A Holistic Approach

The perspective we adopt is relevant to any type of organization (public or private, large or small), and the examples cover a wide range of industries and geographies.

Integrating marketing. Building brand equity requires a holistic approach that integrates all marketing activities. This involves personalizing marketing, reconciling different marketing approaches, and ensuring that all elements of the marketing program contribute to a consistent brand message.

Key elements of marketing programs:

• Product strategy: Perceived quality and post-purchase management
• Pricing strategy: Consumer price perceptions and setting prices
• Channel strategy: Channel design, indirect channels, direct channels, and online strategies

New media environment. The new media environment presents both challenges and opportunities for marketers. It requires a shift from one-to-many to many-to-many communications and an increased focus on customer-centricity.

8. Leveraging Secondary Brand Associations: Borrowing Brand Equity

By creating perceived differences among products through branding and by developing a loyal consumer franchise, marketers create value that can translate to financial profits for the firm.

Leveraging defined. Leveraging secondary brand associations involves linking the brand to other entities that have their own knowledge structures. This allows consumers to infer that the brand shares associations with that entity, creating indirect or secondary associations for the brand.

Key entities for leveraging:

• Companies
• Countries of origin
• Channels of distribution
• Co-branding
• Licensing
• Celebrity endorsement
• Sporting, cultural, or other events
• Third-party sources

Guidelines for leveraging. Marketers must carefully consider the awareness, meaningfulness, and transferability of the knowledge associated with the entity. They must also ensure that the entity is credible and that the associations are relevant to the brand.

9. Measuring Brand Equity: Understanding Consumer Perceptions

To manage their brands profitably, managers must successfully design and implement a brand equity measurement system.

Brand audits. Brand audits are comprehensive examinations of a brand to assess its health, uncover its sources of equity, and suggest ways to improve and leverage that equity. They involve a brand inventory (supply-side perspective) and a brand exploratory (consumer perspective).

Brand tracking studies. Brand tracking studies collect information from consumers on a routine basis over time, typically through quantitative measures of brand performance on a number of key dimensions. They provide valuable insights into brand awareness, image, responses, and relationships.

Brand equity management systems. A brand equity management system is a set of organizational processes designed to improve the understanding and use of the brand equity concept within a firm. It includes brand charters, brand equity reports, and defined brand equity responsibilities.

10. Growing and Sustaining Brand Equity: A Long-Term View

Effective brand management also requires taking a long-term view of marketing decisions.

Reinforcing brands. Maintaining brand consistency and protecting sources of brand equity are essential for long-term success. This involves fortifying the brand by maintaining brand consistency and protecting sources of brand equity.

Revitalizing brands. Revitalizing brands requires expanding brand awareness and improving brand image. This may involve adjustments to the brand portfolio, migration strategies, acquiring new customers, and retiring brands.

Brand adjustments. Adjustments to the brand portfolio may involve migration strategies, acquiring new customers, and retiring brands. Marketers must carefully consider the long-term implications of their decisions on brand equity.

11. Managing Brands Over Geographic Boundaries and Market Segments

Effective brand management also requires taking a long-term view of marketing decisions.

Regional market segments. Marketers must consider regional market segments and other demographic and cultural segments when developing branding and marketing programs. This requires understanding the unique needs and preferences of different groups.

Global branding. Global branding involves creating and managing brands across geographic boundaries and market segments. This requires balancing standardization and customization to maximize brand equity in local markets.

Strategies for global brands. Strategies for creating and managing global brands include creating global brand equity, global brand positioning, and customizing marketing mix elements in local markets. Marketers must also consider the unique challenges of marketing to consumers in developing and developed markets.

12. The Future of Brand Management: Key Priorities

Finding the Branding Sweet Spot

Consumer-centricity. Fully and accurately factor the consumer into the branding equation. Understand their needs, wants, and motivations, and design marketing programs that resonate with them.

Beyond product performance. Go beyond product performance and rational benefits. Tap into emotional and symbolic associations to create a deeper connection with consumers.

Integrated marketing. Make the whole of the marketing program greater than the sum of the parts. Coordinate all marketing activities to create a consistent and cohesive brand message.

Brand potential. Understand where you can take a brand (and how). Develop a clear brand vision and identify opportunities for growth and expansion.

Ethical considerations. Do the "right thing" with brands. Act responsibly and ethically, and consider the social and environmental impact of your marketing activities.

Big picture view. Take a big picture view of branding effects. Know what is working (and why). Track brand performance and make adjustments as needed to ensure long-term success.

Last updated: March 30, 2025