Brand Management Strategies: A Case Study of Johnson & Johnson

Desklib provides past papers and solved assignments for students. This report analyzes Johnson & Johnson's brand management strategies.

BRAND MANAGEMENT

Table of Contents
INTRODUCTION........................................................................................................................3
TASK 1- (LO1)............................................................................................................................4
P1 & P2 EXPLAINING BRANDING AS A MARKETING TOOL AND KEY COMPONENT OF
BRAND STRATEGY.................................................................................................................4
TASK 2- (LO2)............................................................................................................................7
P3 ANALYZING VARIOUS STRATEGIES OF PORTFOLIO MANAGEMENT, BRAND HIERARCHY,
AND EQUITY MANAGEMENT................................................................................................7
TASK 3- (LO4)..........................................................................................................................10
P4 EVALUATING HOW BRANDS ARE MANAGED COLLABORATIVELY AND IN PARTNERSHIP
BOTH AT A DOMESTIC AND GLOBAL LEVEL........................................................................10
TASK 4- (LO4)..........................................................................................................................16
P5 EVALUATING DIFFERENT TYPES OF TECHNIQUES FOR MEASURING AND MANAGING
BRAND VALUE.................................................................................................................... 16
CONCLUSION.......................................................................................................................... 20
REFERENCES........................................................................................................................... 21
1

LIST OF FIGURES
Figure 1: Keller’s Customer- based Equity Pyramid................................................................5
Figure 2: Johnson & Johnson Logo..........................................................................................7
Figure 3: Johnson’s Baby shampoo.......................................................................................11
Figure 4: Johnson’s Baby lotion.............................................................................................11
Figure 5: Brand extension in Johnson’s baby products.........................................................12
Figure 6: Johnson’s Baby products........................................................................................13
2

INTRODUCTION
The project defines a brand as an important tool of marketing management by
demonstrating a comprehensive understanding of branding within an organizational
context. Branding is an essential task for marketing the products of an enterprise which help
in building awareness and provides identity to the product. In this project, the relevance of
brand management and the use of appropriate theories and models are demonstrated
clearly. Further, the portfolio management of the brand is analysed with the help of
different theories and models. Brand leveraging and brand extension are explained
collaboratively both domestically and internationally in the report. Lastly, different
techniques for the measurement of brand value are identified and applied for the chosen
brand.
3

TASK 1- (LO1)
P1 & P2 EXPLAINING BRANDING AS A MARKETING TOOL
AND KEY COMPONENT OF BRAND STRATEGY
Brand is power
A brand is a combination of various elements which provide identity to a product that
cannot be separated from the product. A brand is product, service or concept that
distinguishes the company from other company in public. Brands are protected by
trademarks or service marks by the authorized agency which is usually a government
agency.
Branding is a technique of providing the product a unique identity with the use of name,
symbols, designs or marks (Handlin, 2018). This is an effective marketing tool which helps in
building a corporate image in the marketplace. Company image can be increased with the
help of a good branding strategy by the marketers. This will ultimately help in increasing the
profitability of the company as a whole (Lauren, 2018).
Brand equity is an extra value that a company earns over and above its normal profit due to
its recognizable brand name in the market. A company develops its brand name over the
period and then a stage comes when its products and brand become memorable in the eyes
of customers which produces extra premium to the company which is known as brand
equity (Kenton, 2018). Keller’s brand equity model or customer-based brand equity model
defines the method to build and develop brand equity over time by understanding
customers and make strategies to keep them loyal towards the company. This model has
four main parts which are brand identity, brand meaning, brand response, and resonance.
Brand equity tells about the image of the brand in the eyes of customers and what is the
thing which distinguishes it from other brands. Brand meaning defines ’what are you’
position of a brand of the company. It defines that once the customer becomes aware of the
brand, more interest he takes about the brand of the company. By analysing the
performance of the company, brand image is build up by customers. A brand response is a
positive or negative response given by the customers after generating an experience with
the brand by using the products over time. A positive response is given when their
4

experiences were the good and negative response when they experienced bad from the
product. Brand resonance is the final level of Keller’s brand equity model. This stage has
four main factors such as behaviour, values and attitude, engagement of customers, and
connections and feelings (Farjam and Hongyi, 2015).
Figure 1: Keller’s Customer- based Equity Pyramid
[Source: Farjam and Hongyi, 2015]
This model is tough for start-ups brand to establish its identity in the market between its
customers. It is even tougher to move towards the upward direction in the pyramid in order
to reach the level of brand resonance which might take several years to reach that level.
Although Keller's brand equity model is not easy but can prove to be very helpful if starts
holistically. The common goal should be achieved by working in connection with each other
will result in high performance and increased stability and profitability.
Brand extension is a technique used by the company for introducing its new products by
using the goodwill established by its old brand image in the market. An existing brand with a
well-defined brand image is known as a parent brand of the company which helps the new
brand or product to set itself in the market and combine itself with parent brand. After the
combination of the new brand with an old established brand, the brand extension is known
as sub-brand. And when the parent brand is linked with more than one new brand through
many brand extension, then it is called a family brand. Line extension, product extension, an
extension of customer franchise, an extension of company expertise and extension of brand
5

distinction are some of the types of brand extension strategies used by the company
(Kenton, 2018).
There are many examples where companies successfully extended their brand in the market
and took advantage of their old established brand image. Apple first extended its brand of
personal computers into mp3 players and then further extended into smartphones. Ferrari
which is an established exotic sports car making company now extended their business into
theme parks. Cosmopolitan an international magazine printing company is now trying to
extend their brand by making yogurts (Finkle, 2018).
Brand reinforcement is the strategy used by the companies for maintaining brand equity of
products by keeping the image of the brand established in the minds of customers both new
and old. Brand reinforcement is a continuous process which starts after attaining the level of
brand equity by the company. It includes two main parts of the brand image and brand
awareness by continuously monitoring the changes in the tastes and preferences of
customers. Brand reinforcement can be done in the following ways by the company:
 Advertisement through newspapers, TV, bulletins, billboards, radios, internet, etc.
which is the most common and easy way to reinforce the brand.
 Promotion is another frequently used tools of brand reinforcement which can be
done with the help of gift packs, coupons, discounts, special offers, etc. in order to
attract new customers and to remain in the competition.
 Innovation is considered as one of the greatest tools for brand reinforcement which
increase brand preference and loyalty.
 Event and sponsorship create a positive image of the company by sponsoring big
events and programmes such as sports, education, award functions, etc.
When the venues of brand equity are lost, the company make a strategy which involves
approaches to regain these avenues which is known as a brand revitalization strategy. A
brand is developed by examining changes in the environment, establishing new brand
sources, identifying competitor's strategies, an evolution of cultures, analyzing customer
behavior and marketing environment. Brand partnership or co-branding is also an effective
tool of brand management which utilizes various brand names on new goods and services as
a part of the company's strategic alliance (Kenton, 2018).
6

TASK 2- (LO2)
INTRODUCTION
Johnson and Johnson is an international product selling company of America which was
founded by Robert Wood Johnson I, James Wood Johnson and Edward Mead Johnson in the
year 1886. J&J has its headquarters at One Johnson & Johnson Plaza in New Brunswick, New
Jersey. The company offers various products which are very famous multinational company
and known for the medical devices, pharmaceutical and consumer packaged goods
manufacturing company.
Figure 2: Johnson & Johnson Logo
P3 ANALYZING VARIOUS STRATEGIES OF PORTFOLIO
MANAGEMENT, BRAND HIERARCHY, AND EQUITY
MANAGEMENT
In order to serve different segments of the market, an umbrella of the various brand of the
same firm is established by the company which is known as brand portfolio strategy. This
strategy is made with the reason that all the segments of the market cannot be served by a
single brand as every brand has its own boundary and so in order to fulfil all the different
needs of the market brand portfolio is made (Robertson, 2018).
Brand portfolio strategy of Johnson and Johnson
Johnson and Johnson have been focusing on expanding their pharmaceuticals business
which is growing rapidly with an estimated rate of 6% in the year 2011. This sector of the
company generates approximately 36% of the total company's revenue. J & J is planning to
invest more and more of its capital in its pharmaceuticals business which will continue
addressing customer’s medical needs in five main areas of Neuroscience; Cardiovascular and
Metabolism; Immunology; Oncology and Infectious Diseases/Vaccines which will help the
7

company in building market leadership. J & J believed in maintaining a strong relationship
with its customers as well as its suppliers and collaborated with many of its suppliers in
order to supply quality goods and products (J&J, 2019).
J & J offers a wide range of consumer products which include baby care, skin care, oral care,
wound care, over-the-counter and women’s health products. The company makes continues
innovation in its product range by analyzing customer's demand and preference. Johnson &
Johnson Medical Devices has made significant contributions to surgery in order to reach
more and more patients and restore as many lives as possible (J&J, 2019).
BRAND MANAGEMENT HIERARCHY WITHIN JOHNSON & JOHNSON’S PORTFOLIO
Brand architect models are made by the company in order to go market with their
respective brand strategy to work effectively in the market. There are mainly here types of
brand architect models which are a house of brands, branded house, and a hybrid model.
Hybrid Model
Johnson & Johnson use a hybrid model of brand management which is a combination of the
house of the brand and branded house model. House of the brand is a model where a
company markets its product under a brand name separate from that of its own brand
name. J & J uses such a model in its brands such as Tylenol, Aveeno, Neutrogena, and
Listerine. The branded house is a model used by the company under which it introduces
new products and service of the company under a single and common brand of the
company itself. J & J used such a model in its products range such as Johnson's baby lotion,
Johnson's baby shampoo, Johnson’s baby powder, Johnson’s baby oil, Johnson’s baby soap,
etc.
BRAND EQUITY MANAGEMENT
Johnson & Johnson is a very familiar company which has worldwide approach through its
headquarters. The greatest example of brand equity of J & J is that it is the 79th highest
ranked brand in the world in 2016. In the U.S., J & J has ranked 4 times s in the "Fortune Top
10" list of the most admired companies.
8

Brand equity is the extra value or premium gained by the company by serving its customers
over the years by establishing its brand name in the market (Kokemuller, 2019). Brand
equity can be established by the company by making its brand recognizable and memorable
in the minds of its customers. Brand equity helps in increasing profitability and help in
attaining brand loyalty of customers by providing superior quality products according to
their preferences and needs. In this generation of the health-conscious world, Johnson &
Johnson brings quality products for these customers who strive to improve access and
affordability, create healthier communities. J & J has positioned its market in the U.S. in its
baby care products by focusing on their innovation and marketing its natural ingredients
based products.
STRATEGIES USED FOR MANAGING THE EQUITY OF THE BRANDS
Brand equity should be maintained and improved continuously after establishing one by the
company which can be done through various strategies. J & J adopted a business strategy of
global standardization in order to maximize its growth and profit to its stakeholders. The
company is focusing on lowering the cost of its products and making changes in its
packaging of products. J & J is planning for making strategies for innovation in its products
range which make new innovation every year. Around 11.4% of its net sales is spent by the
company in research and development and so is considered as one of the world’s top
companies spending in R&D and topmost in its industry. The company made a three-year
plan for implementing successfully its growth strategy by analysing the internal and external
factors of the environment.
CONCLUSION
The report focuses on various models of brand portfolio used by the company in the brand
management hierarchy of J & J. Further, brand equity management is overviewed with
reference to changes and innovations made by the company. At last, the report discussed
various strategies used by J & J for the maintenance of brand equity of the company.
9

TASK 3- (LO4)
INTRODUCTION
Johnson's baby is baby care products of Johnson & Johnson Company includes a wide
variety of products which are made of natural ingredients. Johnson’s baby was introduced
by an American brand of baby cosmetics and skin care products owned by Johnson &
Johnson in the year 1893. The report focused on analysed the strengths and weaknesses of
Johnson's baby and its partnership agreements with relevance to its brand value.
P4 EVALUATING HOW BRANDS ARE MANAGED
COLLABORATIVELY AND IN PARTNERSHIP BOTH AT A
DOMESTIC AND GLOBAL LEVEL
Line extension and brand extension are two different strategies used by the company as an
important marketing tool for expansion of its inventory in the market. Following is the line
extension and brand extension strategy used by J & J Company:
Line extension
Line extension is considered as an effective marketing tool used by many companies for
taking advantage of their already established brand name. New products are introduced
under the brand name and image set by an old brand which gives the advantage of its
goodwill to new products of the company by making changes in flavors, size, color,
packaging, and form (Business Dictionary, 2018). Line extension is done in three main ways:
downmarket stretch, upmarket stretch, and two-way stretch. Downmarket stretch is done
by an upper positioned company to lower down the prices of its products to meet the needs
of the market at the lower end. For example, Gillette Vector was introduced by Gillette
Company in order to cater to the needs of its customers who prefer low priced products as
they cannot afford high-cost products of the company. Up-Market stretch is used by the
company when it wants to join the upper-end market segment to increase its profits and
growth. For example, Bisleri Vedica was introduced by the company Bisleri which contain
special minerals in it and hence priced higher than its other products. Two-way stretch is
used by the companies who are working in the middle price segment of the market and the
10

company try to stretch its marketing strategy for pricing in both upward and downward
direction. For example, Titan stretched its products in both high price range and low price
range.
Line extension strategy of Johnson & Johnson through its baby care products known as
Johnson’s baby is shown a below where new products are launched under the same brand
of the old established brand name of the company.
Line extension in Johnson’s Baby shampoo:
Figure 3: Johnson’s Baby shampoo
[Source: Tirrell, 2018]
Line extension in Johnson's Baby Lotion:
Figure 4: Johnson’s Baby lotion
[Source: Jackson, 2015]
Brand extension
11