Brand Management Report

This report examines the various aspects of brand management, focusing on Nestle UK as a case study. It analyzes the importance of branding as a marketing tool, key components of a successful brand strategy, portfolio management strategies, brand hierarchy, and brand equity management. The report also evaluates collaborative and partnership brand management at both domestic and global levels, and discusses techniques for measuring and managing brand value.

Brand Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Importance of branding as a marketing tool...........................................................................1
P2 Analysis of the key components of a successful brand strategy for building an managing
brand equity.................................................................................................................................3
TASK 2............................................................................................................................................5
P3 Analysis of the different strategies of portfolio management, brand hierarchy and brand
equity management......................................................................................................................5
TASK 3............................................................................................................................................8
P4 Evaluation of the way in which brands are managed collaboratively and in partnership both
at a domestic and global level......................................................................................................8
TASK 4............................................................................................................................................9
P5 Evaluation of different types of techniques for measuring and managing brand value using
specific organisational examples.................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Brand management can be defined as the process of analysing and planning they way in
which specific products of brands are going to be launched in market. Main requirement for it, is
to establish good relations with target market so that clients can be retained for along period in
future. Elements that are included in it are products, its looks, quality, quantity, price, packaging
etc. It is mainly used by business entities to enhance perceived value of product line (Cavender
and H. Kincade, 2014). Main aim of this project is to analyse various elements of brand
management for the purpose of knowledge enhancement. The organisation which is selected for
this report is Nestle UK which is multinational food and drink company. It was founded in year
1866 and its CEO is Fiona Kendrick.
This report covers various topics such as demonstration of the understanding of the way
in which brand is built and managed over time, analyse of organisation of brand portfolio and
process of building brand hierarchy. Evaluation of the way in which brands are leveraged or
extended overtime domestically and internationally, different types of techniques for measuring
and managing brand value etc. are also discussed under this report.
TASK 1
P1 Importance of branding as a marketing tool
Branding: The process which is involved in creating an attractive image and name for
the products is known as branding. Main purpose of this procedure is to capture large market
area by attracting large number of customers with the help of unique marketing campaign. It
aims at the establishment of differentiated and significant presence in the market which helps to
retain existing clients and attract prospects (Branding, 2019). In Nestle UK managers and
marketers build effective strategies that helps to describe all the products and services that are
offered by the company. For this purpose they continuously update website of entity and design
attractive campaigns that helps to aware large number of customers about items sold by Nestle. It
effective branding strategies helps the company to be competitive in the market. It is a marketing
tool which is very important for all organisations such as Nestle. Significance of branding as a
marketing tool are discussed below:
Significance of branding as a marketing tool
1

 Branding is very beneficial for the company as it helps to create consumer preference for
the product or service behind the brand.
 It is very important for Nestle because attractive branding strategies helps to generate
higher revenues and capture large area of market because it attracts large number of
consumers (Batey, 2012).
 Branding create a brand image in the market which helps Nestle to deal with competition,
hence to overcome such type of challenges branding is vital for organisation.
 As it results in well known company where everyone wants to work which helps
company to hire skilled and talented employees who can work productively and enhance
productivity of whole organisation.
 It is required to strengthen negotiation power with suppliers because when company is
the biggest customer of them then they can't afford to loose it.
 Branding helps to reduce employee turnover because when enterprise is having good
image then workers do not prefer to leave the organisation.
 It is mainly important for the purpose of attract investors when a company has captured
large market area and generating higher profits then investors get attracted as they always
invest in such entity which can provide them higher returns on their money.
Branding has been emerged in business practice because it is considered as a major
element for business. In Nestle it is highly focused by managers as it helps to attain competitive
advantage, attract customers and generate high profits. All type of organisations whether it is
small or large are emerging branding in business practices because it helps to reach business
objectives (Cox, Gyrd-Jones and Gardiner, 2014).
It has been emerged by analysing its requirement because top executives think that it is
not possible for company to accomplish its goals without proper branding. It increases value of
company, helps to provide motivation and right direction to staff members which helps to attain
long term sustainability. It creates trust, improves recognition of brand, support marketing
efforts, inspire staff members, generate revenues, create message that illustrate value of company
and use emptions. By monitoring all these aspects business entities such as Nestle have emerged
branding in business practices because it is also a main part of activities that results in attainment
of long as well as short term goals.
2

P2 Analysis of the key components of a successful brand strategy for building an managing
brand equity
Brand strategy: It is plan which encompasses specific and long term goals or business
entities that could be achieved with the evolution of a successful brand. Managers in Nestle
focuses on development on brand strategy in order to establish a good image of company in the
mind of its customers. It is very important for the business entities to have attractive branding
strategy so that appropriate solution for the competitive issues can be figured out and
implemented for the betterment of company. All of them are imposed by brand manager of a
marketing team of enterprise and they make sure that they are delivering consistent and effective
brand message to the audience or not (Eggers and et.al., 2013).
Brand equity: It described brand value of a company and it is determined with the help
of customer's perception and experience with the products. When clients think highly of a brand
then it is considered as a favourable brand equity. If an organisation fails to deliver products
according to requirements of consumers or not able to fulfil their aspirations then it results
negative brand equity which is not good for company. In order to establish it in positive manner
marketers of Nestle focus of needs and demand of clients so that they can fulfil it and try to
retain them for a long period. It is a value premium which is generated by Nestle from its
products with an attractive and unique name as compared to other companies in sector. It creates
brand equity for the products by making the memorable, recognisable, superior etc. in
comparison of other items. As Nestle is having a positive brand equity so its clients does not
focus on price they pay high amount for its products as it serves good quality items to them.
Main objective of business entity for setting up a favourable equity is to generate higher profits
and revenues (Erdoğmuş and Cicek, 2012). There are various types of components of brand
strategy that helps to build and manage brand equity. All the elements are as follows:
Components of brand strategy:
 Vision: In order to establish a brand equity it is very important to formulate attractive
brand strategies and also create a vision which is going to be achieved with the help of
the strategy. It is very important to be focused by managers of Nestle in order to manage
and build brand equity because it is vital for organisation to analyse reason behind
operating business activities.
3

 Consistency: After creating a vision managers of Nestle have to analyse that they are
delivering all the messages of marketing campaign appropriately or not. Under this head
they make sure that purpose of business is being communicated with target segment so
that a brand value can be established and managed in appropriate manner. They are
responsible to assure that that message from advertisements to social media posts are
aligned with brand as it results in good market image which is required to built brand
value (Components of successful brand strategy, 2014).
 Flexibility: While working on brand strategy its is vital to focus on flexibility in order to
extend brand throughout the company. In Nestle managers are not afraid of trying new
means of communication with the audience which helps to provide them detailed
information regarding products and build and manage brand value. It also establish a
good image in the mind of them as organisation is preferred to be innovative due to its
flexibility (Gundala and Khawaja, 2014).
 Emotional connection: Branding strategies are mainly considered to appeal to the
emotional side of the customers rather than rational. Nestle uses attractive advertisements
that helps to establish emotional connection with the clients that results in positive brand
value. With the help of this type of relation it can be managed appropriately because
clients can be retained by company it there are good relationships between customers and
organisation (Kuikka and Laukkanen, 2012).
 Nurturing loyalty: Main objective behind the formulation of brand strategy is to attain
loyalty of customers and it has been seen that most of the part of revenues is generated
from brand loyal clients. Nestle has large number of such type of customers and
organisation thank them and tell them they are special for company by providing them
special gifts, loyal rewards and discounts. This element helps to build and manage brand
value because when there are end number of loyal consumers of products then it results
in higher profitability.
 Employee involvement: When managers formulate brand strategy then they focus on
employee involvement as they are willing to attain all the business objectives. For this
purpose they provide them appropriate compensation that helps to enhance their work
quality (Loureiro, Ruediger and Demetris, 2012). It also helps to build and manage brand
4

value because when a company is having high productivity then it help to enhance its
value in market and attract investment for future operations.
 Competitive awareness: A brand strategy cannot attain success without knowing about
the competitors in the market. Managers of Nestle focus on the identification of them so
that they can attain competitive advantage to sustain in market. When it is able to deal
with its other companies in same sector then it can help to build and manage brand value
which is required for successful execution of business objectives (Nair, 2013).
All the above described elements of successful brand strategy helps to build and manage
brand value because it results in enhanced profitability, loyal customers, high revenues, good
market image etc. All these positive aspects of successful strategy helps to establish favourable
value for brand and it also helps to attract prospects customers towards the company.
TASK 2
P3 Analysis of the different strategies of portfolio management, brand hierarchy and brand
equity management
Brand portfolio: It is collection of various brands under a company. Large and
multinational organisations such as Nestle have various brands under its control and this set is
known as portfolio. This entity is having almost 8500 brands under its bodily function. All of
them are monitored and managed by the enterprise and all the decision regarding their
development are also taken by Nestle (Richard, Percy and Pervan, 2015). It is very beneficial for
organisation because it can provide detailed information of all the products that are offered by it
to the clients. It is an umbrella which covers all the brands that are sold by company and all of
them are sold according to requirements of targeted segment. A brand portfolio of Nestle is as
follows:
Brand portfolio of Nestle:
5

The above portfolio shows that there are various types of products that are sold by Nestle.
These are bottled water, milk, juices, health and nutrition, baby food, chocolates, coffee and
food. The brands that are sold by Nestle are Every day, Nido, Nesvits, Nan. Kit Kat, Polo, Role,
Milo, Active plus etc. There are two main types of portfolio management strategies that are used
by business entities. Both of them are described below in detail:
Portfolio management strategies:
 Branded house strategy: Under this type of strategy an organisation expose its own
name as the brand and all the products that are sold under it are known as sub brands. It
helps to create easy recognition for clients. It can be adopted by Nestle to be highly
recognised brand for all the customers by selling different variants of products to them
(Ruzzier and De Chernatony, 2013).
 Hybrid strategy: It is another brand portfolio management strategy which is used by
such companies which are selling their products from its own name. For example, Pepsi,
Coca Cola and Fanta are the companies that are offering products to clients by their own
name. It can be applied by Nestle in that situation when it produces a single products.
 House of brand: Under this type of brand portfolio management strategy sub brands are
promoted by company rather then its own name. It is totally opposite from the branded
house strategy as sub brands are recognised more than the actual organisation. P &G,
Unilever etc. companies are using this strategy. It can be used by Nestle but when it will
6

be implemented the organisation have to sale the products from the name of its sub
brands.
From all the above described strategies Nestle is using branded house strategy as all the
products that are sold by the company are offered from the name of Nestle rather than sub
brands.
Brand hierarchy: It is a means of summarizing the branding strategies that were
formulated by managers earlier for the purpose of executing business in appropriate manner. It is
the structure of brand in which different types of products are segregated in a hierarchy. It is
useful technique for managers of Nestle because it helps to portray all the products of
organisation in a graphical format (Schallehn, Burmann and Riley, 2014). Brand Hierarchy of
Nestle is as follows:
The above image displays brand hierarchy of Nestle in which company brand level
comes then family brand level, afterwards individuals and modifiers levels are established and at
the end product descriptor are added in the hierarchy.
Brand equity management: Brand equity is the value premium which is created by a
company from its various types of products. In order to generate brand equity managers of Nestle
try to make all the items more recognisable, superior and memorable for consumers so that large
7

market share can be captured by it. For Nestle it is very important to manage it because if it is
not managed then company may have to face issues in future that can result in losses, bad image
and lower market share. In order to manage it managers formulates strategies in which they
design plans to provide accurate, transparent, timely and appropriate information to the
customers (Urde, 2013).
TASK 3
P4 Evaluation of the way in which brands are managed collaboratively and in partnership both at
a domestic and global level
There are various types of organisations that are managing their brands collaboratively
and in partnership at domestic as well as global level. These are the agreements that are made
between two or more companies to sale their products in different locations. Collaborative
companies add various clauses to the agreement regarding the activities that are performed by all
of the. Such type of organisations take part in all the tasks and their results.
Nestle is in a collaboration agreement with Starbucks in order to sale the products. At
domestic level brand is managed by both the companies in appropriate manner by gaining
expertise in the brands. At global level brand is managed by taking current trends in to
consideration in order to make sure that business is operated in effective manner or not.
Agreement of both the companies includes various provisions related to payments, incomes,
revenues and losses (Urde, M., Baumgarth, C. and Merrilees, B., 2013).
In partnership brands are managed by all the companies that are involved in a agreement.
Nike and Apple are two companies that are become partners for the purpose of enhancement in
sales and revenues. At domestic level brand is managed by both companies by formulating
strategic decisions for organisation. Both of them make sure that within the country business
should be operated appropriately and they also assure that contribution in expenses should be
same from both sides. At international level companies conduct promotional activities by their
own and in partnership also in order to enhance awareness of clients regarding the products that
are offered by them. These companies are selling their products all around the world so it is very
important for both of them to manage brand effectively and appropriately in order to attain
objectives that were formulated previously.
8

TASK 4
P5 Evaluation of different types of techniques for measuring and managing brand value using
specific organisational examples
Brand value is not just a financial number rather it is a measure of several factors like
loyalty of customers, the ability of brand to keep offering new products and technology and the
connect with consumers.
For becoming most popular brand Nestle has used some techniques which are discussed below :
 The cost approach : The fundamental premises of a potential buyer is to get services as
per the cost paid by them. This is further classified into historical cost method and
replacement cost method. Nestle has used historical cost method at the initial stages of
brand creation but it has certain shortfall as sometimes it is difficult to recapture all the
historical development costs. Replacement cost method, the cost of launching a brand is
divided by its probability of success. This method was easy in terms of calculation but
this method neglect the success of an established brand.
 The market approach :The market approach is further classified into three approach
namely : brand sale comparison method, equity evaluation method and residual method.
In comparable approach a comparison is made in the market involving similar brand in
the same industry. The advantage of this approach to nestle is that it looks at the third
party view what the party is willing to pay and is easy to calculate but the disadvantage is
that the data for comparable brands is rare. In equity valuation method, the value of brand
is estimated by using financial market value and the advantage of it is that it is based on
falsifiable evidence but the disadvantage is that the approach information is included in
share price. Residual method is used to calculate the actual value of life extensions but
the disadvantage is that this approach is not suitable for practical applications.
For example, Tesco Plc has used market approach for the valuation its brand valuation as
it is a straightforward method which involves easy calculations and moreover it uses the data
which is real and does not depend on personal prediction (Zenker and Braun, 2017).
 The income approach : This method is very effective as it shows the future potential of
brand that owner currently enjoys and the value is useful when compared to open market
valuation as the owner can find the benefit foregone by following the actual course of act.
9

For example HSBC has used income approach for its brand valuation because it is
flexible in addressing firms assets that are in different stages of life cycle.
Among all the approach discussed above it is clear that brands and the process of valuing
them is essential for marketing purposes. Nestle being a big brand has used this approaches for
its value. Despite all the approach the best approach suits is was the market approach as it is the
simplest way to calculate the value and data used here is always real and public.
CONCLUSION
From the above project report it has been concluded that brand management is the
process of conducting different activities for the purpose of managing market performance and
image of company. There are various types of strategies that are used by business entities in
order to manage brand portfolio. These are house of brand, branded house and hybrid. Key
components of brand strategy such as flexibility, loyalty, consistency, vision etc. helps to build
and manage brand value. It is also beneficial for effective execution of business operations.
10

REFERENCES
Books and Journals:
Batey, M., 2012. Brand meaning. Psychology Press.
Cavender, R. and H. Kincade, D., 2014. Management of a luxury brand: dimensions and sub-
variables from a case study of LVMH. Journal of Fashion Marketing and Management.
18(2). pp.231-248.
Cox, N., Gyrd-Jones, R. and Gardiner, S., 2014. Internal brand management of destination
brands: Exploring the roles of destination management organisations and
operators. Journal of Destination Marketing & Management. 3(2). pp.85-95.
Eggers, F., and et.al., 2013. The impact of brand authenticity on brand trust and SME growth: A
CEO perspective. Journal of World Business. 48(3). pp.340-348.
Erdoğmuş, İ. E. and Cicek, M., 2012. The impact of social media marketing on brand
loyalty. Procedia-Social and Behavioral Sciences. 58. pp.1353-1360.
Gundala, R. R. and Khawaja, H., 2014. Brand management in small and medium enterprise:
Evidence from Dubai, UAE. Global journal of business research. 8(1). pp.27-38.
Kuikka, A. and Laukkanen, T., 2012. Brand loyalty and the role of hedonic value. Journal of
Product & Brand Management. 21(7). pp.529-537.
Loureiro, S. M. C., Ruediger, K. H. and Demetris, V., 2012. Brand emotional connection and
loyalty. Journal of Brand Management. 20(1). pp.13-27.
Nair, V., 2013. Brand Management. SCMS Journal of Indian Management. 10(1). p.123.
Richard, R. E., Percy, L. and Pervan, S., 2015. Strategic brand management. Oxford University
Press.
Ruzzier, M. K. and De Chernatony, L., 2013. Developing and applying a place brand identity
model: The case of Slovenia. Journal of Business Research. 66(1). pp.45-52.
Schallehn, M., Burmann, C. and Riley, N., 2014. Brand authenticity: model development and
empirical testing. Journal of Product & Brand Management. 23(3). pp.192-199.
Urde, M., 2013. The corporate brand identity matrix. Journal of Brand Management. 20(9).
pp.742-761.
Urde, M., Baumgarth, C. and Merrilees, B., 2013. Brand orientation and market orientation—
From alternatives to synergy. Journal of Business Research. 66(1). pp.13-20.
Zenker, S. and Braun, E., 2017. Questioning a “one size fits all” city brand: Developing a
branded house strategy for place brand management. Journal of Place Management and
Development. 10(3). pp.270-287.
Online
Branding. 2019. [Online]. Available through:
<https://www.shopify.co.uk/encyclopedia/branding>
Components of successful brand strategy. 2014. [Online]. Available through:
<http://blog.maxwellandmiller.com/blog/seven-components-of-a-successful-brand-
strategy>
11