Case Studies on Brand Management Vol. I Edited by Nusrath Jahan Maldar Icfai Business School Case Development Centre Icfai Books # 71, Nagarjuna Hills, Punjagutta, Hyderabad 500082
Icfai Books # 71, Nagarjuna Hills, Punjagutta, Hyderabad 500082 Andhra Pradesh, INDIA Phone: 91-40 - 23435387/91, Fax: 91-40 - 23435386 e-mail: icfaibooks@icfai.org, ibscdc@icfai.org Website: www.icfaipress.org/books, www.ibscdc.org 2007 The Institute of Chartered Financial Analysts of India. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means electronic, mechanical, photocopying or otherwise without prior permission in writing from The Institute of Chartered Financial Analysts of India. While every care has been taken to avoid errors and omissions, this book is being sold on the condition and understanding that the information given in the book is merely for reference and must not be taken as having authority of or being binding in any way on the authors, editors, publisher or sellers. Product or corporate names may be registered trademarks. These are used in the book only for the purpose of identification and explanation, without intent to infringe. Case studies are intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. Copies of individual case studies are available for purchase from www.ibscdc.org ISBN: 81-314-0696-2 Editorial Team: Priyanka Srivastava and Uma Ramaswamy Visualiser: Ch. Yugandhar Rao Designer: K. Sree Hari Rao
Case Title Page No. AmorePacific: Creating Global Brands 1 Brand Extensions The Marico Way 13 Branding The Asian Dilemma 23 Branding Service: The McDonald s Way 31 Burger King Revitalizing the Brand 43 Cirque du Soleil: The Making of an Entertainment Brand 59 Corporate Co-Branding: Case of Yum! Brands, Inc. 71 Dainik Bhaskar: The Innovative Marketer 85 Dasani s European Misadventure 93 Destination Dubai: Building a Brand 101 Electrolux in India: Branding Blues 121 Euro Disney: Failed Americanism? 131 GAP and Banana Republic Changing Brand Strategies with Fashion 143 Global Branding Strategies of LG Electronics 159 Haier: Developing A Global Brand 175 Hyundai s Global Branding Strategies 185 Internal Branding: The i-flex Way 193 ITC s Branding Strategies 205 James Bond A Meta Brand? 219 La-Z-Boy: Changing Style 227 Louis Vuitton: The Making of a Star Brand 239 Managing Brand Reputation: The Case of Coke, Pepsi and Cadbury in India 249 Master of Wine: Creating a Unique Brand 257 Mattel Inc. s Barbie: Brand Merchandising Strategies 267 Puma: Reclaiming its Pride 281 Real Madrid: From a Football Club to a Media Brand 295 Roger Deromedi Solving the Brand Portfolio Problems at Kraft Foods Inc. 311 Sam Adams Repositioning Strategies 329 Samsung Electronics: Mr. Yun s Efforts for Upscale Image 341 Taiwan s OEM Industry: Acer s Branding Dilemma 353
OVERVIEW One of the most important aspects of strategy in modern business is Branding. Throughout most of the twentieth century, the Western brands were dominant. The American and European companies were the first to realise the power of strong brands and invested heavily in building them. The Japanese followed suit, with Sony leading the way. The companies in the Eastern world, which, until then, had served as low-cost manufacturing bases for Western companies, were the next to catch on. For instance, Samsung of South Korea, which was once known for low-cost and low-quality products, benchmarked its top rival and invested heavily to reinvent its brand. China s Lenovo took the route of purchasing established brands (Compaq) to strengthen its brand portfolio. Original equipment manufacturer, BenQ of Taiwan, invested the profits from its current business into building its own brand and thereby took the risk of directly competing with its current customers (like Dell, IBM, etc.). Although there are many advantages to owning a powerful brand, not the least of which is the option of premium pricing, building a brand is a costly and consistent affair. As brands have proliferated the marketplace, the risk of failure has grown exponentially and brand managers have been forced to take a re-look at their notion about brands and branding. Branding is often misunderstood as merely being an advertising function and is therefore widely mismanaged. Brand managers often view branding as a supplementary task, involving the management of a product image that can be separated from the main business of product management. However, new-age thinking provides an alternative perspective, stating that, Branding is a strategic point of view, not a select set of activities Branding is central to creating customer value, not just images Branding is a key tool for creating and maintaining competitive advantage Brand strategies must be engineered into the marketing mix. 1 Traditional business thinkers often assumed that product value as experienced by the customers, and product value as measured by the company, were one and the same. That is, if a company builds a better product, the customer will experience an increment in product value, and vice versa. Marketing, however, makes a crucial break from this assumption, emphasising that customer value is always perceptual as it is shaped by the subjective understanding of customers and is, in fact, never objective. A brand is therefore the product as it is experienced and valued in everyday social life, and branding refers to all the activities that shape customer perceptions, particularly the firm s 1 Holt Douglas B., Brands and Branding, Harvard Business School (Note), Harvard Business School Publishing, March 11 th 2003, page 1 [ECCH Ref. No. 9-503-045] i
activities. 2 To be successful, brand managers must realise that although a product consists of a bundle of tangible, functional attributes, a brand s offerings go much beyond that. For instance, Coca-Cola is not just a beverage that customers like. The fact is that Coca-Cola conveys the image of being an optimistic, American product that attracts consumers. The brand can therefore be thought of as the culture of the product. Brand culture is formed when images, stories and associations are created around the product, mostly by the company and customers. To comprehend the value and hence the importance of a brand, a brand manager has only to evaluate the difference between what a customer is willing to pay for a branded product and a generic product. The brand value can be stated to be an assimilation of four dimensions: Reputation Value, Relationship Value, Experiential Value, and Symbolic Value (Exhibit I). Exhibit I What is a Brand? BRAND = STORES, IMAGES, ASSOCIATIONS Reputation Value Stories imply perceived quality of product features. Experiential Value Stories shape experience of the product. THE PRODUCT (objective features, quality standards, augments) Relationship Value Stories imply that firm is a long-term partner that will attend to customer interests. Symbolic Value Stories imbue the product with values and identities. Source: Holt Douglas B., Brands and Branding, Harvard Business School (Note), Harvard Business School Publishing, March 11 th 2003, page 1 [ECCH Ref. No. 9-503-045] 2 Brands and Branding, op.cit. ii
Building strong and sustainable brands requires developing a well-conceived brand strategy. To be successful, all aspects of the brand strategy must deliver a consistent message that is in tune with the overall goals of the business. However, there is no universal rule that governs the designing of brand strategies. In a Harvard Business School note, Brands and Branding, author Douglas B. Holt outlines this four-step process for developing a brand strategy: Step 1: Identify goals that branding can address Not all business goals require or demand a branding solution. Therefore, a brand manager must identify those business goals which are amenable to branding. In the cases, where a business goal can be achieved by enhancing perceived product value, brand strategies are most appropriate. Step 2: Map the existing brand culture Mapping the existing brand culture involves evaluating the brand culture across the four components of brand value described in Exhibit I. This requires collecting information in tune with the four different components of brand culture. In this step, it is important for a marketer to identify the points of divergence between the firm s current brand strategy and brand culture. Step 3: Analyse competition and environment to identify branding opportunities Analysing competition involves mapping the competitors brand culture as done in Step 2. This step must be carried out because achieving competitive superiority in brand value requires benchmarking against competitors brands. Carrying out mapping of competitors brand culture will enable a marketer to improve the firm s brand culture over those of its key competitors, and at the same time, identify and work on any possible weak-points that may enable the competitors to make inroads into the future. The other, and perhaps the more important aspect to be taken into consideration while branding is the shift in environment. Identifying opportunities in the environment consumers, technology, infrastructure, etc. that competitors have failed to identify or react to, is the way to create the most significant brand value. Step 4: Design the strategy The final step involves creating a blueprint of the path that a firm should take to make a transition to the desired brand culture. This design must chart out the firm s existing brand culture, outline the opportunities identified in Step 3 and then, finally detail the desired brand culture (Exhibit II). iii
Exhibit II Brand Strategy Existing Brand Culture Product Reputation Relationship Perceptions Experience Framing Symbolism Strategy Drivers Environment Changes Competitive Benchmarking Brand Culture Goal Product Reputation Relationship Perceptions Experience Framing Symbolism Brand Engineering Product Design Advertising Channel Policy Pricing Service Delivery Personal Selling Retail Design Promotions Service Quality Public Relations Customer Interface Packaging Corporate Comm. Corporate Actions Source: Holt Douglas B., Brands and Branding, Harvard Business School (Note), Harvard Business School Publishing, March 11 th 2003, page 1 [ECCH Ref. No. 9-503-045] The brand strategy should specify which marketing mix elements will be used and how they will be integrated into the overall plan to produce a consistent branding effort. This part of the brand strategy deals with implementation or engineering the desired brand culture across all the relevant aspects of a marketing mix and allocation of the requisite resources for achieving the desired end. Once a brand strategy has been created and implemented, it must be evaluated to assess whether it is working or not. Brand managers can use any one or a combination of the following to evaluate the effectiveness of their branding effort: Behaviours: Behavioural loyalty is one way of measuring the strength of a brand. That is, all other factors being constant, when a brand s value increases, a customer will purchase the brand more frequently and will be less likely to switch over to other brands. Attitudes: This measurement recognises the fact that strong brands share certain consumer attitudes. For instance, the brand may be associated with influential users. Traditional market research and informal feedback methods like websites can be used to gather information and identify attitudinal measures to make comparisons and deduce attitudinal strength. Relationships: Another measure is determining the relationship strength. This works on the principle that when brand value is high, customers will depend more heavily on the brand, and hence develop a deeper relationship with it. iv
Equity: This is the ultimate or the most widely used technique of measuring the brand value. Among several techniques for measuring brand equity, a common one is to determine the selling price of the brand in the current market. 3 The case studies included in this book span a broad range of industries, from fast food, entertainment and sports to automobile and electronics. These case studies are based on the branding efforts undertaken by some of the world s most renowned companies. The case study, Managing Brand Reputation: The Case of Coke, Pepsi and Cadbury in India details the different kinds of strategies, the companies can implement to manage their brands when things go wrong, while Dasani s European Misadventure and Euro Disney: Failed Americanism? highlight the pitfalls of improper brand management. Destination Dubai: Building a Brand details the successful attempt of the royal family of Dubai to brand their country and James Bond A Meta Brand? takes a look at the evolution of a literary character into one of the world s most recognised style icons, all due to careful brand management efforts. The dilemmas encountered during co-branding are highlighted in the case study Corporate Co-branding: Case of Yum! Brands, Inc. and the case studies Branding The Asian Dilemma, Taiwan s OEM Industry: Acer s Branding Dilemma, Samsung Electronics: Mr. Yun s Efforts for Upscale Image and Hyundai s Global Branding Strategies look at the challenges encountered by companies in Asian countries in their attempt to build a global brand. 3 Brands and Branding, op.cit. v