A Study on Brand Management: An Analysis of Nike and KFC

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A STUDY ON BRAND MANAGEMENT
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A STUDY ON BRAND MANAGEMENT
Table of Contents
Introduction......................................................................................................................................4
Task 1...........................................................................................................................................4
Introduction..................................................................................................................................4
Brand is Power.............................................................................................................................4
Conclusion...................................................................................................................................6
Task 2...............................................................................................................................................7
Introduction..................................................................................................................................7
Brand Portfolio Strategy of KFC.................................................................................................7
Brand Hierarchy Management.....................................................................................................8
Brand Equity Management within KFC's Portfolio...................................................................10
Conclusion.................................................................................................................................11
Task 3.............................................................................................................................................11
Brand Extension versus Line Extension....................................................................................11
KFC Strengths and Weaknesses as a Brand..............................................................................12
Resolving Techniques................................................................................................................13
Collaboration.............................................................................................................................15
Task 4.............................................................................................................................................15
Brand Value...............................................................................................................................15
Brand Awareness.......................................................................................................................16
Market Share..............................................................................................................................17
Consumer Attitude.....................................................................................................................18
Purchase Intent...........................................................................................................................18
Conclusion.....................................................................................................................................18
References......................................................................................................................................19
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Introduction
In an organization, brand management is an essential part of the organizational function. The
popularization of the products or services of the organization heavily depends on the proper
branding of the organization. This study would highlight the various aspects of brand
management in different companies like Nike Inc. and KFC while discussing their brand
portfolio, brand extension, brand hierarchy and brand equity management systems.
Task 1
Introduction
In the modern industry, brand image is a very important asset for any large business
organization, since this is what helps them the most in drawing potential customers towards
them. The brand of a company is basically an identification of their products. The brand equity,
on the other hand, is defined as the monetary value of the goodwill that their brand has among
the customer segments. A successful brand cannot arise overnight. It has to go through a lot of
stages like brand formation, brand marketing and brand strengthening. The marketing
department, in particular, handles the stages of brand formation and brand marketing. Making
that brand popular is mostly their responsibility, which they doo with advertising and sponsoring
social or sports events, spreading the name of the brand. This report discusses the various aspects
of brand management in Nike Inc.
Brand is Power
Nike as a brand has been synonymous with footwear for decades now, and its value as a brand
has only risen and it has now established reliable brand equity. Nike has also adopted several
strategies to sustain its equity as a brand, and keep itself established as a major brand that works
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in its field. The methods adopted by Nike to enhance its brand equity has been under the lens of
researchers for long and many have come to a myriad of conclusions from their research work
and in this unit we will shine some light on the same matter, while citing some empirical
evidence to support my statements as the manager of an advertising firm this unit shall focus
more on this matter from a marketing perspective. Zoyia (2016) has stated that brand equity is an
indispensible asset when it comes to creating a strong link between its brand and its consumers.
Zoyia further goes on to quote Keller (2003), that power that a brand possess lay in what the
customer has experienced from the brand with their senses over time and that is of crucial
importance to sustaining the brand and building brand equity over time. According to Forbes,
Nike controls 62% of the athletic footwear industry. This also includes the Nike Jordan brand
which itself is a mammoth brand. Such reputable brand equity comes from using strategies to
enhance its equity, such as bringing in innovation to the industry and patenting them, curbing
waste during manufacturing and advertising the same to create social awareness of waste
management when it faced issues related to child labor in 1997, and thereby increased its CSR
initiatives (Delaney et al.,2016). The main source of their brand equity could to given to the way
to gives its slogan an emotional touch thereby encouraging cohesion amongst its customers. A
research by Su (2015), used Aaker’s personality of a brand model to identify traits that can
encourage growth of brand equity in a brand and it was concluded that brands have seven
dimensions and have 53 personality traits which can be categorized under competence,
emotional encouragement, sincerity and so on.
Extension of a brand is the method a brand uses to grow its area of service to a wider range by
using the same brand name and logo, that is, it uses the same power from its brand equity to
grow its now subsidiary operations. Advertising using the idea of brand extension is unique since
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it needs to keep in mind the values that the parent brand had originally possessed and work on it
further with the new services or products the brand wishes to launch. Nikes which aims to
become a $50 billion brand is making moves, that suggests step towards brand extension on the
21st century consumer as analyzed well by Donovan, (2016). A few key factors that play a major
role in giving a brand the proclivity to go through brand extension as opined by Sichtmann
(2015) are strength of the original brand, experience of the consumers with the parent brand, the
relationship between parent brand and the extension brand and so on.
According to Yuan, Cui and Lai (2016), overcoming the brand crisis is also an integral part of
brand management. The crisis of a brand can occur in many different ways, such as the sudden
fall in popularity of a particular person related with that brand. The degradation of teh product
quality also causes a brand crisis. For instance, Nike terminated the contract with Lance
Armstrong, the famous US cyclist, due to allegations against him for taking illegal doping drugs.
Nike decided to cancel his sponsorship as well. This is a prime example of defending against
brand crisis, and sticking around him would have damaged the brand image of Nike.
Conclusion
The brand of a company can be described as the impression among the general public about that
company and its products. Proper branding helps an organization to establish a positive image in
the market, and increases the number of loyal customers. Branding also increases the trust of the
customers on the company, which helps the company to easily popularize their newer and
relatively unknown products by bringing them under the popular brand. This is the primary
method of using brand image as a marketing tool. The newer products of a company can be
advertised in a way which emphasizes the brand image of that company. This potentially
increases the chances of customers getting attracted to that product due to the popular brand
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name associated with it. These results in the customers quickly trust that new and unknown
product. These are all marketing functions, and it can clearly be seen that brand name plays an
important role in it.
Task 2
Introduction
The brand portfolio of an organization is defined as the set of brands owned by that organization,
and the organizationneeds to employ effective strategies to manage all of their brands in
emphasizing ways. This section of the report will highlight the brand portfolio management
system of KFC in light of the various brand portfolio models.
Brand Portfolio Strategy of KFC
According to Wang and Chung (2015), the brand portfolio strategies of an organization are the
deciding factors of the brand appearances of the organization. The main two portfolio strategies
are the branded house and the house of brands strategy. The branded house gathers all products
under the same brand name, while the house of brands includes different products with different
brand names. In case of KFC, they have been strictly following the branded house strategy. Since
KFC is a multinational restaurant chain, it becomes easier for them to build recognition among
their customers if they label all of their food products under the same brand name of KFC. The
various strategies KFC take while managing their brand portfolio across the globe are:
The composition of KFC's food menu is the same throughout all the countries in which they
operate. KFC ensure that the ingredients are the same in all of their branch restaurants, which
allows their customers to enjoy the same taste and environment throughout all their branches.
According to Wallina and Spry (2016), this effectively allows KFC to project a uniform brand
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image to their customers, and combine all of their products and restaurant services under that
brand.
KFC has identified people with western culture as their primary target customers. This is because
food items like burgers are the most popular among the western culture people. However, due to
globalization, these foods are also becoming popular among the Asian and African culture,
particularly the South Asia. According to Uggla (2015), this has allowed KFC to build a western
restaurant brand image among the Asian and African customers, which potentially attracts them.
KFC carry on constant research about the optimization of their food menu. The popularity of a
food product can be easily judged by calculating the amount sold, and KFC uses this policy to
gradually increase the popularity of their food menu. For example, the 'chicken wings' item of
KFC has quickly become popular, and thus it became a permanent part of KFC's food menu and
their brand.
Brand Hierarchy Management
The brand hierarchy of a business market is basically a method of combining the branding
strategies by presenting the number and type of same and different brand elements throughout
the products of the firm. This is important, since according to Keller and Brexendorf (2016), the
various branding terms of a business company like KFC can be used in different levels of their
products. The number of branding terms usually increases while moving from top to bottom of
the brand hierarchy.
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Figure: Brand Hierarchy Model
(Source: Keller and Brexendorf, 2016)
According to Rosenbaum-Elliott, Percy and Pervan (2015), since KFC is a family restaurant
chain, it falls under the family branding category. The products of KFC are nearly all food items,
such as KFC chicken popcorn, KFC rice bowl, KFC chicken bucket etc. These are all individual
brands, while specific menu items such as KFC 5-in-1 bucket are modifiers. Their brand
management hierarchy is:
1. Managing Director
2. Marketing Head
3. Brand Manager
4. Brand Analyst
5. Assistant Brand Manager, Brand Equity
6. Customer Analytics Head
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7. Research and Development Manager
8. Brand Evaluation Manager
9. Chief of Creative & Design Input
10. Market Research Analyst
The executive officers are:
1. Brand Executive
2. Executive Associate of Brand Communications
3. Market Research Executive
4. Brand Auditor
5. Public Relations Executive
6. Brand Promotion Executive
Brand Equity Management within KFC's Portfolio
The brand equity of a brand name is considered to be the brand value of a particular brand
irrespective of the products or services it covers. According toKeller and Brexendorf (2017),
brand equity is basically the monetary value of the goodwill that the brand has acquired.
Since KFC has become famous across the countries especially for their special recipe of fried
chicken, they have managed to build quite a considerable amount of brand equity for their KFC
brand. Hence, according toÇifci et al. (2016),KFC is also adopting effective management
strategies for their brand equity. One of the best ways to do it is by sponsoring famous and
popular events. KFC has sponsored many sports events such as NBA, and they have also been
sponsoring various charitable events to project and enhance their brand value. Not only that,
KFC has also built their own sports stadium named KFC Yum Center, which hosts popular sport
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events, such as baseball and basketball in both the national and university level. According
toHeding, Knudtzen and Bjerre (2015), this allows the brand of KFC to be known even more,
and increases their brand popularity and equity. Moreover, through catchy caption lines like
'Finger Lickin' Good', they have been able to popularize their KFC brand among the public,
increasing their brand equity.
The corporate social marketing or CSM is also a strategy used by KFC. KFC has been involved
in the various sanitary programs in the developing countries, which has allowed them to
advertise their active participation in charity works. According to Lin (2015), this has created a
brand personality of KFC which is projected as a socially responsible brand. The corporate
Social responsibility of KFC is very well-defined, and the brand management of KFC has laid
clear guidelines about their social responsibilities like maintaining hygiene in their restaurants,
not compromising with the quality of their food, not using any harmful ingredient in their recipe,
not using polythene packets and many others.
Conclusion
The above section has concentrated on the various aspects of the management of brand portfolio
of KFC. It has been seen that KFC follows the branding house model, and promotes the KFC
brand by utilizing different marketing strategies and promotional tactics. They have also
managed to gain high brand equity by popularizing their food among customers.
Task 3
Brand Extension versus Line Extension
In the modern world of business, there are many business organizations that are constantly facing
challenges in terms of competition in their particular markets. However, to get over these issues,
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business firms are looking for ways to gather as much as consumers as possible. The consumers
are attracted by variation and in this case Brand Extension is a very good option for
organizations to make sure that new products and services are created. These new entries can
pull consumers to the business even more if they are created by incorporating consumer
demands. In the case of Brand Extension, it is imperative that the process of creating new
products is followed by maintaining the company policies or values (Heding, 2015). Quality is
another aspect that needs to be maintained in case of creating such products as the main goal is to
create a market for certain products by leveraging the goodwill of the company.
Line Extension is a different concept than Brand Extension, although, it surrounds the basic
principles of creating new products. In this case, it can be argued that both the theories related to
an extension are the same. However, Line Extension is a process where new products are
developed by keeping the base and idea of the product similar to the previous one (Williams,
2017). In the case of KFC, it can be said that Chicken Buckets is regarded as popular items on
the menu. To extend the business from this line, KFC introduced different varieties of Chicken
such as Smoky Grilled, Mingles Bucket, Friendship Bucket, Smoky Duo Bucket Meal etc. Thus,
it can be seen that these products are the extension of the Bucket range of KFC.
KFC Strengths and Weaknesses as a Brand
In the process of leveraging a certain brand, the brand managers need to aware of the strengths
and weaknesses that it has. The main objective must be to avoid using the weak aspects and
make sure that they are resolved by proper steps (Prevan, 2015). The strengths must be used
more often, and supporting activities must be conducted to make the organizational goals more
achievable. There are certain strengths and weaknesses of different brands, and for KFC, the
strengths are as follows –
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 Kentucky Fried Chicken, popularly known as KFC was opened in 1952 and as per latest
information, the franchise owns over 21,000 outlets across the world. The organization
has the presence in nearly 125 countries, and thus it can be said that global presence of
KFC give it an added advantage as it has access to the markets to different countries
(Kfc.com, 2019).
 The products and the features of KFC are also a strength for their brand as the taste of
KFC items has dedicated fan base across the world. The original recipe of Colonel
Sanders gives the KFC brand an option to leverage their brand and produce different
food items under the same roof.
Disadvantages are also present in some brand franchises and in the case of KFC the brand has
been facing a backlash from its consumer base. The reasons behind this backlash are also
justified as reports claimed that suppliers of KFC were using medication for their poultry
animals. This issue hampered the brand badly as it came under several investigations from
different healthcare organizations. Another disadvantage that KFC has is the pressure of
competition from fast food franchises across the world (Kfc.com, 2019). Organizations like
Burger King, McDonalds etc. are constantly reinforcing their operations in terms of capturing
large chunks of the fast food industry. The organizations are revamping their consumer service
techniques as well as product lists. As a renowned Brand in the industry, KFC is constantly
under pressure from the competitors.
Resolving Techniques
The situation of any disadvantage that business organization face must be accounted for with
immediate effect as it is the likely way in which the organizational goals can be secured. In case
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