Brand Management: Building Brand Equity & Measuring Brand Value

This report provides a comprehensive analysis of brand management, focusing on building and managing brand equity over time. It explores the importance of branding as a marketing tool and analyzes key components of a successful brand strategy, referencing Keller's Brand Equity Model. The report also examines how brands are organized in portfolios, brand hierarchies, and strategies for portfolio management, using Apple Inc. and Nike as examples. Furthermore, it evaluates how brands are leveraged domestically and internationally, managed collaboratively, and techniques for measuring and managing brand value, highlighting the significance of brand resonance and customer relationships. The study concludes by emphasizing the critical role of brand management in ensuring organizational longevity in a competitive environment. Desklib offers a range of study tools and solved assignments for students.

Brand Management
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Table of contents
Introduction......................................................................................................................................3
Section 1..........................................................................................................................................4
LO1 Demonstrate an understanding of how a brand is built and managed over time.....................4
P1 Explain the importance of branding as a marketing tool and why and how it has emerged in
business practice..............................................................................................................................4
P2 Analyze the key components of a successful brand strategy for building and managing brand
equity...............................................................................................................................................7
Section 2..........................................................................................................................................9
LO2 Analyze how brands are organized in portfolios; how brand hierarchies are built and
managed...........................................................................................................................................9
P3 Analyze different strategies of portfolio management, brand hierarchy and brand equity
management.....................................................................................................................................9
LO3 Evaluate how brands are leveraged/extended over time domestically and internationally...15
P4 Evaluate how brands are managed collaboratively and in partnership both at a domestic and
global level.....................................................................................................................................15
LO4 Evaluate techniques for measuring and managing brand value over time............................18
P5 Evaluate different types of techniques for measuring and managing brand value using specific
organizational examples................................................................................................................18
Conclusion.....................................................................................................................................20
Reference List................................................................................................................................21
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Introduction
As industries continue to expand and focus more on their sales growth, there has been a huge
uproar in various fields regarding making one’s organization futureproof. Although such an idea
prompts companies to undertake aggressive measures, from a business point of view it seems
absolutely critical. With the increase in industry rivalry at almost all levels of businesses,
companies now look to manage their brands with the ulterior objective of protecting it from
disarray. In doing so, they make use of various theoretical as well as practical methods so that
they can ensure the company’s longevity.
In a highly competitive environment, brand management has become increasingly important. It is
defined as the process of maintaining and upholding one’s brand so that consumers are always
confident of the various products and services that an organization might be offering. There are a
number of important factors to keep in mind when managing a brand. Aspects such as cost,
customer satisfaction, etc., come into play with proper brand management. This study will look
at the various factors related to proper implementation of various brand management techniques
and theories.The two brands that have been selected for use as reference are Apple Inc. and Nike.
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Section 1
LO1 Demonstrate an understanding of how a brand is built and managed over time
P1 Explain the importance of branding as a marketing tool and why and how it has
emerged in business practice.
Branding has emerged as one of the most essential aspects of the business strategy. This
marketing process is often considered to be merely a promotional function. Managers involved
within a successful marketing firm should understand branding is about publicity of products’
image, a supplementary process, which could be isolated from the core business of product
management. In this case, branding strategies and management of Dove will be analyzed. All the
specifications are analyzed in detail below,
Importance of branding as a marketing tool
According to McDonald and Wilson(2016), various marketing strategies commence with the
value proposition, the different kinds as well as amounts of value that an organization wants
consumers to receive form the market offering. This value proposition also addresses vale as
considered by the organization as well as seeking to create into the service they offer
(testconso.typepad.com, 2018). With development in branding concept, it becomes an important
tool for organizations to convey their core messages and motives. Through the brand dynamics
pyramid importance of branding as a marketing technology could be assumed. The brand
dynamics pyramid is listed below,
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Figure 1: The brand dynamics pyramid
(Source: Vasileva, 2016)
According to this above-mentioned pyramid, it could be perceived that customers are the integral
part of branding as a marketing tool. In the first phrase an emotional and rational attachments to
one brand becomes prominent with the consumers in exclusion of other competitive brands. In
the advantage phrase, customers felt to have a rational bonding with a particular brand.
Performance stage indicates to the fact that acceptable service or product performance is
appropriate to achieve customer attentions (Vasileva, 2016). Relevance indicates that all the
services and efforts are projecting customers’ needs. Presence stage indicates to the fact that
there is an active familiarity regarding their upcoming brand and product established by the
organization. All the levels involved in the brand dynamics pyramid reflects that branding as a
marketing tool is important for establishing customer relationship from weak relationship to the
level of strong relationship.
Emergence of branding concept in business practices
Emergence of branding concept along with strategies in business practices has two major part
namely, past and contemporary situation in branding. Details of each stage is attached below,
Formatting and past stage of branding
Batey (2015) has mentioned the fact that Branding, as any type of concept, has developed over
time: from the time when a sheep of one group initiated to be branded to differentiate them from
other group in order to enter in the contemporary era, when each thing from food to flower, is
branded. The formatting stage is concisely divided in to stage namely “Branding before the
1970s”,“Branding in the 1970s and 1980s”, and “Branding in the 1990s”. In the first stage,
three core branding concepts and theories has evolved despite the resistance of consumer
movement as well as Clayton Act. These theories are segmentation strategy, brand loyalty and
lifestyle concept of branding. According to Moriarty et al., (2014), segmentation concept reveals
that in a particular area there are different types of customers with their various demands over
products. On the other hand, brand loyalty though a debatable issue reflects the fact that
consumers are loyal to the brands related to household products around 90%. The lifestyle
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branding concept is reflective of customers’ lifestyle in services and products (Hampf and
Lindberg-Repo, 2011).
Next stage in emergence of branding states that against the topical issue of branding in the prior
era, this time branding correspondences immaterial value of services and products in comparison
of market competitors’ products. The macro marketing concept has become prominent in this
stage, which involves product positioning concept in branding. The last stage in this era unfolds
mathematically representation of brand equity(Hampf and Lindberg-Repo, 2011).
Current branding situation within business practices
The current era in branding states concepts of brand identity, corporate social responsibility and
Country-of-Origin (COO). The brand identity, Wheeler(2017) stated by provides guidelines to
what parts of a particular brand must be kept the same and which elements should be modified to
better. On the other hand, Powers and Greenwell (2017) have states that celebrity endorsement is
one of the remarkable concept of branding in this era. The above-mentioned organization (Dove)
also involves this kind of celebrity endorsement in their product branding strategy. The other two
strategies are reflecting the sustainability as well as consumer protection policies in
organizations.
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P2 Analyze the key components of a successful brand strategy for building and managing
brand equity.
According to Keller's Brand Equity Model, there are four key elements of a successful brand
strategy for managing and building effective brand equity. These elements are listed below,
 Brand identity
In this stage, organizations are need to set goal regarding creating “brand salience” or
awareness. On the other hand, the marketing team in this stage requires ensuring that the
nominated brand stands out as well as that their consumers identify it and are fully aware of
all the specifications (Keller, 2016). The perceptions about products are correct at the main
stages of purchasing process.
 Brand meaning
In the second stage of successful branding strategy, the organizational management requires
to recognize and communicate what the individual brand means as well as what it stands for.
Two key building blocks in this stage are imagery and performance. The former criteria
suggest efforts of organizations to meet with consumer requirements in a psychological and
social level (Keller, 2016). On the other hand, performance of a product has five distinctive
categories such as durability, service effectiveness, product reliability, style, design and price
and others.
 Brand responses
Brand responses indicate to customers’ responses as well as judgements regarding the brands
they are trying to purchase. Customers’ judgements fall under four categories namely quality,
credibility, consideration and superiority. Keller(2016) has identified the fact that consumers’
also respond to the brand according to how brands makes them feel. According to (), there is
six effective feelings that is connected to customers’ responses namely warmth, excitement,
security, fun, self-respect and social approval.
 Brand relationships
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According to Smilansky(2017), brand “resonance” positioned at the top of the pyramid of brand
equity as this is one of the most difficult and significant part of creating a successful brand
equality. The brand resonance is divided in to four sub-sections, which are listed below,
Behavioral loyalty:This category unfolds a regular practice and repeat purchase.
Active engagement:The organizational management needs to engage their consumers in a
strategic and innovative way.
Attitudinal attachment: This section reflects attachment of the customers with the brand and
organization also needs to formulate strategies for retaining this (Keller, 2016).
Sense of community:The organizational management needs to create an environment which will
reflect a sense of communication and relationship of customers with organizational
representatives and other consumers (Keller, 2016).
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Section 2
LO2 Analyze how brands are organized in portfolios; how brand hierarchies are built and
managed
P3 Analyze different strategies of portfolio management, brand hierarchy and brand
equity management.
Portfolio Management: For decades now,
portfolio management has been defined in
various ways. However, in basic terms
managing a portfolio encompasses various
operational functions such as making
decisions about investments, aligning
investments with objectives as well as
looking after allocation of resources for
individuals as well as departments. In the
words of Kaiser et al., (2015), Portfolio
management is an art as well as a science.
This study will now focus on how portfolio
management is done at the two different
brands that have been chosen. Initially the
study shall focus on Apple Inc. and then
move onto Nike. This approach shall help
the readers understand the aspect of
portfolio management better because it will
also act as a comparison between the chosen
brands.
Apple Inc.
Apple Inc is one of the strongest and most
valued brands in the world. With a great
barnd awareness and image, there are many
things that new companies can learn from
them. In the world of technology, Apple Inc.
is one of the few companies which not only
focuses on meeting cutomer requiremnets
but hasa very strong marketing department
as well. According to Apple, good protfolio
management is only possible if a company
has products at all stages of the product life
cycle; Risk, Revenue and Maximization
being the most important (Klingebiel and
Rammer, 2014). However, the way Apple
places its products in Revenue Smoothing
and Competition blocking is also very
commendable.
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Figure 1: Apple Company Reports
(Source: AboveAvalon.com, 2017)
However, over the past few years, iPad and
iPhone sales have been decreasing (Stettina
and Hörz, 2015). At the same time, the
shrinking in sales of the MacBook has also
become quite visible. Therefore, the
company has sought to make a few changes
in their portfolio management. The two
strategies that Apple has made use of to
increase their efforts in the sector of
Portfolio management are:
 The design and implementation of a
multiple product line: This has been
done after extensive SWOT analyses
and the company has focused to
predetermine any market risks that
might arise in the future. Apple Inc.,
through this strategy, has looked to
minimize their chances of failure in
an extremely competitive market
(Kocket al., 2015). Backup plans for
all of their product lines have been
formulated so that all situations of
crisis can be averted.
 Interrelating products in different
product lines: Apple Inc. have
highly integrated all their products so
that sales of one can enhance sales of
the other as well. However, this
strategy will only be implemented
once the products in one product line
reach saturation in terms of sales.
The problem with Apple’s existing
strategies however, is the fact that it
somewhat contradicts the very notions that it
had functioned on for so long. Apple Inc.
was initially known to implement a
contingency form of approach to their
portfolio management which enabled them
to meet changes as and when they occurred.
Following a pre-determined path might
cause problems in the company’s longevity
because the needs of this particular market is
always changing (Picard, 2014). Adapting to
such changes might be a challenge with
these new portfolio management strategies.
Nike
Whilst most people think of the “swoosh”
when talking about Nike, global managers
from a worldwide basis have always
speculated the different strategies that Nike
makes use of to manage their portfolio with
such excellence. Nike’s portfolio
management has somewhat been simple and
easy to implement. The factor that has made
it easy to implement is Nike’s worldwide
presence. The three most used strategies by
Nike regarding management of their
portfolio are:
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 Subsidiaries: Nike has never been
shy of acquiring domestic and
international companies to extend
their reach (Routledge.Keller,
2014). By doing so, Nike have
offered these companies to function
independently but under the
implementation of Nike strategies.
Experts see this move as
revolutionary because most
acquisitions kill the innovative
approaches of the host companies
(Brexendorfet al., 2017).
 Designing product lines in
alignment to a particular set of
consumers: Nike have been known
to design their products with a
particular set of consumers in mind.
They have products for the average
person as well as sports celebrities.
Such an approach enables the
company to cater to a variety of
consumers and thus make sure that
the organization never runs out of
business (Huang and Sarigöllü,
2014.).
 Correct allocation of resources to
the most immediate aspects of
business: Nike has expertly
determined which departments need
funding and have always come up
with a way to provide the same.
Having such an approach has
enabled the company to focus on the
issues that require their immediate
intervention.
However, Nike’s approach to portfolio
management is more of a monetary process
which sees a lot of capital being spent so
that successful implementation of all the
above strategies take place (Wheeler, 2017).
Based on how Nike fare in the years to
come, their portfolio management could see
huge changes.
Brand Hierarchy:This term is basically
used to summarize the branding strategy
developed by organizations. It displays the
number and nature of distinctive and
common brand elements which helps the
consumer in identifying the ordering of the
brand elements (Keller, 2016). As in the
case of any hierarchy, there are more entries
in a structure as and when it moves down
from a top-down hierarchal structure. Whilst
many companies use a corporate brand
hierarchy, some companies have been
known to use a mix of various other factors
as well.
Apple Inc.
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Apple Inc. is generally recognized by the by
their parent brand name- Apple. Be it their
consumer electronics or their ventures into
the music world, Apple Inc. has always
worked towards adopting a “monolithic”
branding architecture (Vomberget al., 2015).
Along with its iTunes, Apple sought to
create a market for its brand, irrespective of
whether or not the music industry gained
from it.
In terms of brand hierarchy, Apple Inc. is
defined as a strict corporate brand that
promotes its parent organization through all
of their products. Since Apple Inc. were able
to develop their own operating system to go
along with their electronics, they have not
had to use the brand hierarchies such as
family or endorsed sub brands (Luo et al.,
2015). However, many experts are of the
view that since Apple Inc. is most well
known for their cell phone devices under the
name of iPhone; Apple Inc. might also be
implementing a product hierarchal branding
structure without letting their consumers
know about the same.
Nike
As has been mentioned above, Nike have
never been shy of promoting the many
acquisitions of different companies. Nike
lets them function independently whilst
maintaining knowledge of their functioning.
The various brands that Nike owns under
their brand name are allowed individual
recognition. Such a strategy, although
difficult to handle, works wonders for a
brand’s image in a highly competitive
market.
Nike caters to the fashion needs of both the
ordinary as well as the athletes. Since the
products made by them severely fall under
the “athlete” name, Nike makes use of their
owned brands to cater to the needs of the
general public. In terms of brand hierarchy
therefore, Nike is a mix of corporate, family
and sub endorsed brands. Nike promotes the
brands it owns not under their parent name
but with the brand’s original identity itself.
Their connection to Converse, Cole Haan,
Umbro Ltd. etc. is well known although
Nike does not promote the said brands as
their subsidiaries. Therefore, there is also a
pertinent case of shadow endorsing in
Nike’s brand hierarchy.
Brand Equity Management:Brand equity
management is the process that enables a
company to generate revenues from a
product with a well-known and easily
recognizable name. It also enables a
company to compare their revenues along
with a similar brand (Wang et al., 2017). To
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