Effective Brand Management Techniques: A P&G Perspective

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Brand Management

Table of Contents
Introduction................................................................................................................. 3
LO1............................................................................................................................. 4
LO2............................................................................................................................. 9
LO3........................................................................................................................... 12
LO4........................................................................................................................... 14
Conclusion................................................................................................................ 16
References................................................................................................................17
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Introduction
The assignment will explain ways of brand management by applying proper theories
as well as concepts and models. The chosen organisation is P&G. In the context of
the organisation, proper and justified examples will be provided. With the help of
proper theories as well as frameworks and models, this assignment will critically
analyse brand equity, brand hierarchies and portfolio management. It will critically
evaluate collaborative and partnership brand management on domestic as well as
international platform. Finally, it will critically evaluate examples regarding the
organisation in terms of measurement and management of brand value by applying
techniques.
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LO1
P1 Explain the importance of branding as a marketing tool and why and how it
has emerged in business practice.
Importance of branding as a marketing tool
Branding plays a significant role as a tool in marketing as it builds a solid foundation
for a successful business. Branding includes customer experience as well as
perception, which can be influenced to some extent, company identity, and response
to enquiries as well as employee training. The design along with brand features
distinguishes one company from others. It is legally called trademark. It identifies all
the items that the company produces and sells. The company can incorporate the
level of qualities to make them different and earn recognition. Customers have
expectations in terms of choosing the services. Their selection and payment give any
existing brand its desired value.
Branding also includes attributes, pricing and packaging of products along with
organisational history and its advertisement practices. Through the concept of
branding, organisations can create emotional bonding and belong to their
consumers. This is achieved over a certain period with small steps and gestures
(Wheeler, 2017). Branding is an intangible asset of a company. With branding,
products of a company are merely commodities. Every marketer should invest time
and effort to establish and gradually increase brand value. However, it does not
denote to any name, setting behind corporate identity, representation of graphics
standards, brochures or business cards or the messages that the company spreads
while marketing.
Active promotion of brand products is marketing. Through the tactics of marketing
company reaches out to people and engages them. Marketing answers the question
of how regarding branding. It motivates the unconventional sales process. It creates
familiarity between company products and customers and makes them think of
purchasing. Branding reinforces reputation and enhances strength. Educating
customers about brand value and services will help in content marketing operations.
Communication about the brand mission will defeat the competition. Branding builds
unique marketing. Branding provides meaning to marketing advertisements, and the
company achieves the desired sale, as the target audience is attracted to the
message. Brand promise triggers emotion and installs loyalty within customers
through marketing behaviours, decisions (Baker, 2016).
Emergence of branding in business
Term ‘branding’ has its origin in “Brandr”, Old Norse word meaning burn. Slaves and
cattle were branded or burnt and marked with the owner’s symbol. Therefore,
initially, it used to denote ownership of valuable things. The concept of branding has
appeared into business to stand out as a company in the marketplace among infinite
products available to the customers. Companies try to create an emotional
relationship with customers. Brand perception influences the company’s success as
well as devaluation. A company, which makes an effort to increase its brand value,
performs better regarding competition and marketing. The comparison of products
and beneficial aspects is not helpful anymore. It has occurred because every
company is imitating other’s products and incorporating the features among their
irrespective of quality issues. Therefore, it is important for each company to gain
trust from its consumers (de Noronha et al., 2017).
Theories and models
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Theories and models of branding depend on several factors. The first model of
branding under discussion is a model of Brand Equity by David Aaker. Brand
equity means the rule of the greater valued brand over lesser-valued brands. This
gives brands bigger financial value and the organisation holds the most significant
asset in terms of the brand. Brand equity is how customers are aware of the brand
quality, associated with and loyal to the brand. Customers are capable of interpreting
and processing particulars, gains more confidence about their purchase decision.
Justification of brand budget becomes easier to peove. Among four dimensions of
brand equity, there is loyalty, associations along with proprietary assets, awareness
and quality perception (Tanveer, and Lodhi, 2016).
Each aspect gives organisational value. Proprietary assets include competitive
advantage, which helps brands to outperform other brands. It helps in gaining a
leading position in the market. It refers to either lower costs or differentiation, which
means providing the latest varied products having lower costs. The thoughts about a
brand in customer’s perception are the brand association. It refers to the reasons
behind purchasing which helps consumers to gain brand information. It links with
attitudes and attributes of the brand. The brand must show positivity to be trusted. It
also includes brand positioning. Associations are formed through interactions. It will
help the company set a foundation while launching new products. The commitment
of customers towards brands is brand loyalty. It is gained from new purchasers as
well. It involves value, satisfaction, trust, buying behaviour. It reduces price
premiums and operational costs and increases profitability. Word-of-mouth
marketing is the most effective in this case. 20% customer gives 80% company
purchase. Brand’s effort is needed for long-term customer engagement. The market
is segmenting, customer assessing, ranking, and service delivering can found
loyalty. Customers should be rewarded as well. Their complaints should be handled
(Molinillo et al., 2018).
Perceived quality is the expectations met by the brand. Customers also check the
reliability of services by comparing perceived and real quality. Customer can be
delighted if real is more; satisfied if both are same; dissatisfied if perceived is low.
Brand awareness means the recognition of the brand. It is needed if a new product
is launched. Digital marketing and media advertising can tell existence. A large
budget is needed to instil recognition and recall. Models of brand awareness are
Consumer Adoption, AIDA, Innovation Adoption and Hierarchy of Affects. These are
decision-making models. Buying behaviour is caused by preference, liking and
familiarity.
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Figure 1: Brand Equity Model
(Source: Çifci et al., 2016)
Another remarkable model of brand equity is Customer-Based model by Kevin
Keller. This arrives in his ‘Strategic Brand Management’ book. According to this
model, marketers should administer customers’ perceptions as well as beliefs about
a brand. Four representational steps are brand identity, brand meaning, brand
response and relationships. Brand identity develops salience. Application of STPD
meaning Segmentation, Targeting, Positioning and Differentiation are done here.
Brand Meaning includes brand imagery, user profiles, purchase-usage state, values
and personality, experience, heritage and history, brand performance. The brand
response includes quality, judgements, security, consideration, social approval,
feelings, warmth, fun, excitement, credibility, superiority, self-respect. Relationships
include behavioural loyalty, attitudinal attachment, sense of community, active
engagement. These fall under intense and active relationships (Ahirrao, and Patil,
2017).
P2. Analyse the components of a successful branding strategy for building
and managing brand equity
Brand strategy
Big and even small companies should implement little but significant branding tactics
to develop their business. Increased brand value and recognition will help the
business gain more credibility. Customer’s perception will change, and they will trust
more on that company’s products. Even small ventures will look more established
which eventually leads to the company’s growth. Potential clients will think of the
business as stable. Every company must comply with the expectancy of brand
standards. Otherwise, the risk of the downfallen condition of market share occurs.
Purchasers will find the business complete and appealing if it has all resources and
graphics of branding and marketing (Steenkamp, 2017).
Brand equity
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Brand equity is furnished with product value. It includes responsibilities endowed to a
brand. Brand perception is one of them. The brand is perceived through steps like
exposure, attention, awareness and retention. By these steps, the customer
identifies brands. Brand equity is how awareness of the brand quality, associated
with and loyal to the brand. It is furnished product value. It includes responsibilities
endowed to a brand. It has two distinguished viewpoints based on finance and
customer. First refers to the brand value that establishes the performances. Brand
equity raises discounted cash movement of coming times and open paths. Second,
refers to the customer response to experience about the brand. The financial value
of ventures is increased by brand equity. Companies show on balance sheet their
brand value (Keller, 2016).
Elements of successful branding strategy
With the rapid evolvement of technology and increased involvement of the internet,
branding has reached a completely new level. Consumers nowadays want
participation in everything. New products need the branding approach to settle on
themes for marketing. At first, the company should think of a powerful name to lead
in the industry among competitors, to maintain a corporate culture, to be
remembered, to spread brand exposure, to gain relevance by strategies. A target
audience should be marked. Branding is essential in a time of reinvigoration, and
every stakeholder should understand purpose as well as four Ps of the company.
The branding system should be integrated and pleasing to achieve all operations
and communicated promises. In times of merging, leadership choices are crucial for
the associated brand portfolio. The company can transit brands to the acquisition or
can have dual branding with combined names (Heding et al., 2015). Five key
elements are-
 Vision: The vision of branding means to set a statement of reason. The
company should formalise a vision to state the purpose to the employees and
consumers. It expresses to target audience the strategies and values of the
business.
 Message: After settling the vision, the company should design messages for
clear communication with the target audience. It consistently builds brand
tone and a voice like slogans.
 Extension in the company: employees can do adequate business
communication. The marketing team should have an awareness of the brand
to convey properly.
 Emotional connection: Promotional commercials should arouse sympathy,
belonging sense that the customers will relate to and business will develop
powerfully.
 Loyalty: Loyalty can be gained through gifts and compensations, and the
company will have special customers.
Procter & Gamble largely manufactures branded household products. They initially
managed their brand having Crisco and Ivory Soap along with one executive
(Gabrielli and Baghi, 2016). An employee of P&G, Neil McElroy’s brainchild was the
brand manager. He joined in 1925. Under his leadership, the company competed
with Lever Brothers and Palmolive. The company President Deupree modelled a
reasonable policy regarding corporate management communications. However,
McElroy proposed a system targeting more attention as well as resources. According
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to this plan, each brand had one in-charge. An efficient and dedicated group was
assigned to involve in promotional aspects of every brand particularly. To handle
brands each had an assistant, a manager, and other positions to administer several
activities. These ideas were progressed through the corporate hierarchy. These set a
new latest approach for brand management. The latest strategy was centred on
products. The decision-making was decentralised. The company achieved a discrete
brand portfolio — market segmentation distinguished target consumers. The
products had relations with desired lifestyles. Product differentiation was its focus on
advertising and marketing. The market research was attractive to customers. His
market strategy was imitated globally. He became the head in 1948 and President
later (Steenkamp, 2017).
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LO2
P3 Analyse different strategies of portfolio management, brand hierarchy and
brand equity management.
Portfolio Management
P&G stated it would consolidate, discontinue or divest near about 100 brands. It has
a 180-brand portfolio. It also plans to leave a lot of business altogether. It can
decrease by 60% of the company brand number. It has already decided to leave on
40 brands. It wants to keep attention on 70-80 main brands. These brands bring out
95% profit and 90% sales. These brands lead their segmented markets. These are
Tide, Pampers, Olay skincare brand, Gillette. They share from 8% to almost 70% of
the market. The CEO, A.G. Lafley wants to reinvigorate the company. The strategy
for revitalising the organisation includes maintaining a leading position in the
marketplace with high sales, centring on main portfolios, thinking about making
portfolio vertical, cross vending of services. It divested Duracell and gave it away for
4.7 billion to Warren Buffet’s Berkshire Hathaway. In 2015, Inter Parfums acquired
Rochas. P&g got 108 million. It divested three businesses for 12 billion to Coty. The
brands include hair care, cosmetics and fragrances brands. Beauty segment in 2014
earned 2.7 billion. It was on 19.5 billion sales. The performance was of a peer group.
Therefore, it can be seen through the years the company has tactfully managed its
portfolio and simultaneously had increased sales and profit.
Figure 2: Portfolio Management of P&G
(Source: articles.marketrealist.com, 2015)
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Figure 3: P&G brand hierarchy and equity management
(Source: Created by the learner)
Proctor and Gamble in contrast to the other brands manifest some similar and
different features to those brands in terms of the various products and services. The
variation like the products and services determines the target audience addressed.
This determines the internal business environment of P& G. This determines the
various decisions and strategies made about product design and development.
Based on this particular information the marketing strategy is decided P&G.
P& G produces various products, which are of different. The various products
produced by P&G is beauty, grooming, health care, fabric and home care, baby
feminine and family care. These products consist of various appeals to the
consumers and are wider. Thus, it consists of a wider target market.
Due to the given factors of P&G makes various decisions in the field of the marketing
mix. This involves the strategy of the 4Ps. This depends on the demand and supplies
retail chain of Proctor and Gamble. Due to a wide range of products sold by P&G it
creates a higher demand. Thus, P&G moderately prices its products depending on
the demand. Also, the nature of the product determines its price. P&G also
moderately prices its products due to the average expectations of the people of such
products given the cultural and the value factors about the region, UK.P&G can fulfil
the customers about product satisfaction. P&G has also used various promotional
methods through various channels like broadcasting media, print media and social
media. Through these strategies, P&G had initially high costs, but increasing sales of
the products have recovered the increase in these costs. This has been possible due
to brand awareness caused by social media advertisements especially (Rosenbaum-
Elliott et al., 2015).
The various ways in which P&G makes brand equity are as follows:
 Building amazing Value
Through the process of deriving maximum satisfaction in terms of consumption of
the products of P&, it adds value to the products.
 Continuous Differentiation
Through the process of adding extra features to products, P&G improves the
quality of its products, which discriminates them from others.
 Maintaining the brand image
Through the process of maintaining consistency of the quality of its products,
P&G maintains the brand image. In this way, P&G can fulfil the needs of the
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existing customer. P&G promote the growth and expansion of its market by
also fulfilling the needs of potential customers. This is also done by utilising
the various marketing mix strategies, promotion being the major aspect
(Karpova et al., 2015).
 Understanding the consumer psyche
By understanding the various appeals of the consumer in terms of the product,
P&G designs its products and services. By maintaining the consistency of the
products quality as well as the provision of health and safety assurance P&G has
been able to maintain trust among consumers.
In this way, P&G has established its position in quality with other brands.
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LO3
P4 Evaluate how brands are managed collaboratively and in partnership both
at a domestic and global level.
The brand management policy made by Proctor and Gamble is a success story. This
is due to the wide range provided by the collaborative organisation. This
collaboration has led to innovation about the packaging of the products. This
collaboration has also resulted in addressing a large target market. The organisation
also used various CSR initiatives to produce the products, which had a positive
impact on the products. One such initiative involved avoidance of the use of plastics.
This was followed maintain balance in the environment or the community. This is
because the social costs involved were low. This is due to addressing the sole
problem of climate change. The product of “Head and Shoulders” which provided
solutions for Dandruff was initially produced in the form of plastic bottles. After the
joint venture of Proctor and Gamble instead of plastic bottles, recycled plastics were
used. The aim was to reduce plastic waste. This initiative was aimed at reducing the
number of plastics all over Europe. Some other important partnerships were Adidas
and Parley. Their mission was to evolve the ideas on pollution (Veloutsou et al.,
2017).
The reasons behind partnerships being vital to innovations are:
 They enhance business insights
Before launching a new product, it is important to know the nature of the
target market. It is also important to know the consumer awareness about the
utilization of products and consumer behaviour.
Head and Shoulders with the help of research specialist Harris identified the
problems from French consumers.
The study revealed that 71% of disposable plastics are recycled in the kitchen
while the rest 44% of bathroom follow the same lifecycle. This provided scope
for P&G to leverage its brand of shampoo. This insight of increasing
awareness about plastic pollution and influence consumer behaviour was
followed by profitable strategic innovation (Abrahams, 2016).
 They scale your network
The collaboration involves developing internal relations with organisational
management of each other. This enables in strengthening relations with
customers. This ensures the joint ventures receive adequate support in
meeting the financial objectives through the CSR procedures. In this way,
P&G can achieve an increase in productivity about the efficient utilization of
time.
 They speed up R&D
P&G adopted strategies in transforming raw beach plastics of Head and
Shoulders shampoo through the process of utilising the skills of recycling
experts and sharing the work of research can enable in reducing the amount
of time and money in having to set new objectives and meet them. This is
because it reduces the amount of workload by sharing.
 They open doors for distribution
The consumer sales channels are ongoing publicity through an increase in its
sales in many retail outlets of P&G, which are the third party distributors. In this
way, P&G undergoes many businesses to consumer transactions. The
process of coordinating with distributors for testing its products has helped it to
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