M1 PRODUCT AND BRAND MANAGEMENT

UNIT -3

BRAND ARCHITECTURE
Brand architecture is the structure of a brand, often illustrated with a diagram, that helps to
explain the relationships between a company’s master brand, sub-brands, products, and service
lines.
Establishing brand architecture helps brands to manage the perception of their business, their
growth potential, and their relationships within their business. Building a house of brands is an
effective way to expand – but without a solid brand architecture and a deep understanding of
the relationships therein, it can be difficult to make the right choices.
Why is brand architecture important?
 Clarify your brand identity: What does your master brand stand for, and how does that
affect your brand extensions?
 Solidify corporate hierarchy: How does the parent company relate to its brands? What
priorities do separate brands have?
 Enable accurate customer perception: How do your customers see your master brand
and sub-brands? How are the audiences different? How will your master brand provide
validity to brand extensions?
 Expand product or service lines effectively: Which product or service lines are more
appropriate for which corporate brand?
key components of brand architecture
 There are several components to brand architecture. Outlined below are the key features
of each component, and their relationship to one another.

Image from brandmarketingblog.com

 Master brand
  This is the main brand for your business and is likely the most recognisable of the
brands for customers. It might be the original brand, or it might be from a parent
company that took over a brand. It is usually visible as a logo on all products and
services being provided to customers, and it will usually be the name of the company.
The sub-brands it has will likely be able to cross-sell between their audiences.
 Master brand example: Apple
 Apple is the master brand for several sub-brands: Apple Music, Apple TV, iPhone, and
more.
 Sub brands
 These are the brands that sit beneath the master brand in the brand architecture. They
usually contain the master brand’s name but will show their distinction with their full
title. They typically share values with the master brand.
 Sub-brand example: Toyota Prius
 Toyota, the master brand, has a sub-brand named Toyota Prius, recognisable on its own
but always within the context of its parent company.
 Parent brand
 This type of brand is at the top of the hierarchy in the brand architecture, but its sub-
brands and the products they sell do not have to be within the same category.
 Parent brand example: Mondelēz International (formerly Kraft Foods)
 This parent brand owns several FMCG brands, such as confectionery brand Cadbury,
cookie company Belvita, cough drop brand Trident and powdered drink brand Tang.
 Umbrella brand
 This brand is the overarching brand, but it doesn’t necessarily share its identity with the
brands beneath it. It does share the type of product theme, however. This might mean
that there is competition between the brands beneath it.
 Umbrella brand example: Coca-Cola
 The Coca-Cola umbrella brand has many brands beneath it: Sprite, Fanta, Schweppes,
and many more. It also has the Coca-Cola, Coke Zero, and Diet Coke sub-brands as
well. The brands underneath the umbrella brand are all beverages of some kind.


Types of brand architecture
There are multiple types of brand architecture approaches, each with its own benefits and drawbacks.
Depending on the brand strategy, the approach taken will differ.
A branded house
Within a branded house, all the brands in the portfolio share values with the master brand and share
their name. It’s also likely that the sub-brands don’t work independently of one another. This style
means all brands within the house are consistent in terms of look and feel, marketing messaging,
and more.
Branded house example: FedEx
FedEx, the parent brand, has several sub-brands within its house. FedEx Express, FedEx Freight,
and FedEx Ground are just some of them.

Endorsed brands
An endorsed brand architecture model involves the parent or umbrella brand giving their
endorsement to other brands that fall beneath them in the structure. Their brand identity lends the
endorsed brands legitimacy and authority, often indicating that the other brands are of the same
quality. All the brands will likely be within the same sector but have different audiences, offerings,
and identities.
Endorsed brand example: Marriott
Hotel brand Marriott offers its customers a range of brands for different tastes and price points, such
as Residence Inn by Marriott and Courtyard by Marriott.

A house of brands
Under a house of brands, there are multiple brands that work independently of one another, are likely
in different sectors, with varying audiences, products, and identities.
House of brands example: Unilever

Unilever’s house of brands contains several different brands, including personal care brand Dove,
food company Ben & Jerry’s, and drinks brand Lipton.

Brand architecture strategies

Each of the above structure types requires different strategies for sales, marketing, legal and more.
Deciding on which one will be most effective for your brand or brands will require a thorough
understanding of your reputation and growth potential.
Branded house strategy
This type of brand architecture approach can easily solve cost problems for brands looking to
consolidate their resources. With one brand identity offering multiple sub-brands, you’re able to
market one set of values across all products, with competition remaining minimal for the audiences
you’re targeting. Customers are much more willing to try your other sub-brands’ products and
services with the knowledge that the master brand offers quality and reliability.
However, should that master brand’s public perception become negative, all the sub-brands are
likely to be affected. If the parent brand loses its appeal or doesn’t perform as well, this will likely
have a detrimental effect on the sub-brands as well.
There’s also the question of what the master brand is. Google, for example, started off as a search
engine, became a master brand for a suite of tools (Google Drive, Gmail, etc.) and then branched off
under a parent company (Alphabet) that also looks into areas such as human health (Calico) and
drug discovery (Isomorphic Labs). Though Google’s parent company rebranded to Alphabet in
2015, most customers still see it as “Google” – and its forays into different sectors can confuse the
messaging.
Endorsed brand strategy
One advantage of utilising an endorsed brand strategy is that it can provide brand equity to an
independent brand. This strategy allows for the endorsed brands to innovate and be distinctive,
without the added difficulty of marketing a completely unknown brand to customers.
However, there are downsides to taking this approach. It might be an overly costly approach for a
smaller brand portfolio, given that each endorsed brand will need distinct products, marketing, sales,
and more to function.
There is also the question of whether the endorsing brand and the endorsed brands marry well
together. If there is little connection, customers will find it harder to believe the endorsement is
genuine or useful to them.
The main issue with having one endorsing brand is that all the brands are at risk of reputational
damage if there is a PR crisis, financial issue, or other public problem.

House of brands strategy

The benefits of choosing a house of brands strategy are that it allows you greater distinction between
brands and flexibility in how each brand within the house develops. The parent or umbrella brand is
able to maintain a distinct identity, while also being able to create a roster of products and services
that reach a wider demographic under its other brands. The ability to develop new offerings or
weather reputational storms without being concerned about the effect on the other brands is also
another advantage.
However, brand management across these varying businesses means it can be difficult to maintain
a consistent brand architecture. It is likely to be more costly to provide different services and
products under each brand, and the parent or umbrella brand doesn’t offer assistance in terms of
brand equity. There can also be consumer confusion over the role of the umbrella or parent company
in the other brands, both internally and externally.

Hybrid brand strategy

Often, very large corporations maintain a hybrid brand architecture to balance the needs of all the
brands they manage and perform with maximum efficiency. It is more than likely that this type of
corporate brand is the result of the expansion of an existing brand over time. Coca-Cola, as
mentioned, has several sub-brands but also has stand-alone brands under its umbrella.
Brands are more frequently considering hybrid brand strategies as hierarchical models prove limiting
when flexibility is needed. An approach that uses multiple strategies allows for brands to more easily
build brands, undergo a brand extension, or protect existing brand equity by divesting brands.

BRAND DIFFERENTIATION AND POSITIONING DECISIONS

Differentiation:
Meaning: Differentiation is giving something unique and meaningful to the customers in
comparison to the competitor’s product.
There can be five types of differentiation:
1. Product differentiation: A company can use product differentiation in order to differentiate itself
from the competitor. The product can be different in form, features, performance quality,
conformance quality, durability, reliability and reparability. Forms: The product can be
differentiated based on tangible and intangible attributes or additional features. For example Red
Label Natural tea claims to differentiate having five ayurvedic natural ingredients as additional
feature. Features: The product can have completely different feature than the competitor. Harley
Davidson has completely different features. Durability: the marketers differentiate their products
taking durability in to consideration for example Ambuja cement gives guarantee of strength.
Reliability: Consumers can be attracted if the product is reliable. Reliability can be used by the
company in order to differentiate the product. For example Volvo makes most safe and reliable
vehicles in the world. Reparability: If the company manufactures the products which has standard
spare parts and which is easily repairable and replicable. Then it can use reparability as a tool to
differentiate its product.
2. Service differentiation: The Company can gain competitive advantage by providing distinguished
services to the customers. The main service differentiators are: Ordering ease: It means how easy it
is for the customers to place an order in comparison to the competitors. Delivery: The services or
products can be differentiated through delivery. It includes speed accuracy and care in attending the
customers. For example Dominos Pizza delivers pizza within one hour. Installation: Installation
means work done by the company to make the product operational. If the installation process is fast
and accurate the company can get competitive advantage. Customer training: Some companies also
provides training to the customers so that customers can use companies product efficiently. Maruti
Driving school provides training of driving to the customers. Customer counseling: Those
companies which provide continuous support and consultancy to the customers can be different from
the competitors. Maintenance and repair: Customers always likes companies that provide
maintenance and repair services. For example Eureka Forbes provides good maintenance service to
the customers. Miscellaneous services: when the company provides miscellaneous services better
than the competitors then also it can be differentiated in the market. It includes product warranty
annual maintenance contract etc.
3. Personnel differentiation: Employees and company’s personnel helps the companies to gain
competitive advantage. For example Singapore airlines is known for its employees. Better trained
employees include six characteristics: • Competence • Courtesy • Reliability • Credibility •
Responsiveness • Communication
4. Channel Differentiation: Company can gain competitive through the way through the way they
design their distribution channel, coverage expertise and performance. For example Avon cosmetics
or oriflamme cosmetics have gained advantage by efficient marketing channel.
5. Image differentiation: Company’s image and identity creates a special impact on consumers’ mind
set this helps companies in differentiation. Identity is created by the company and image is created
by public. Image differentiation can be achieved through, Symbols and special attributes and
physical plants for example Samsung smart phones have touch screens. The physical plants creates
powerful image for example Marriot Hotel differentiates itself base on physical structure. Events
and sponsorship: If the company sponsors an event it creates image differentiation for example Pepsi
IPL. Pepsi co differentiates itself by sponsoring Indian premier League cricket match.

Positioning
Positioning means placing the products in the minds of the customers. Positioning has nothing to do
with product but it is related to the minds of the customers. For example when Indian customer eats
Cadbury chocolate he always says he is eating Cadbury and he will not say he is eating chocolate.
This shows how Cadbury has placed the product in the minds of customer. According to All rise and
Jack Trout some companies positions the product very well in the minds of the customers they hold
distinctive place in consumers mind but the competitors cannot take that place. In order to position
the product,
there are three strategic alternatives.
1. To strengthen company’s own current position in customers mind
2. The second strategy is to find out unoccupied position in the market.
3. The third strategy is disposition or reposition the competition in consumer’s mindset. For example
Rin or Surf Ultra adopts deposition strategy.
Positioning Errors: The company must avoid four major positioning errors:
1. Under positioning: When the company is positioning the product the buyers must not have vauge
idea of the brand
2. Over positioning: Buyers must not have narrow image of the brand. For example middle class
customer feels tanisq jewelry is expensive
3. Confused positioning: The Company must not keep on changing its positioning strategies.
4. Doubtful positioning: when the company positions its product the buyers must not feel it is hard
to believe. For example if the features of Maruti cars are compared to Mercedes car buyers would
find it hard to believe.
Positioning strategies:
There are several strategies based on which a company can position its product.
1. Attribute positioning: A company can position itself based on size and number for example Disney
land positions itself as largest theme park.
2. Benefit positioning: The company can highlight the benefits and position the product for example
Pepsodent promotes Germicheck or Disprin promotes itself as Dard ka Anth turant.
3. Use of application positioning: The company can position itself as the best for some application
or use. For example Mobile phones that gives importance to touch screen.
4. User positioning: It can be positioned based on the characteristics of user.
5. Competitors positioning: the company can position itself by highlighting their product or service
better than the competitor’s product.
6. Product category: Product is positioned as a leader. For example Colgate tooth paste is positioned
as world leader in oral care.
7. Quality or price: The product is positioned as offering the best value for example Big Bazaar has
positioned itself as “Sabse sasta sabse Accha”.
Which positioning to promote?
The Company has to decide which positioning strategy to promote for example company has four
positioning platforms technology, cost, quality and service, the company has to select one strategy
for positioning. The company can compare itself with the competitors and select the strategy in
which the company is better than the competitor. The one in which the company has competitive
advantage. Communicating the company’s positioning: To communicate the positioning to the
customer the company must first prepare positioning statement. A positioning statement starts with
concise description of your target market as well as compelling picture of how you want that target
market to perceive that brand and the point of difference with the competitor’s brand. The
positioning statement includes 1. Target group need 2. Frame of reference: segment or category in
which company competes. 3. Point of difference with the competitors

STRATEGIC BRAND MANAGEMENT PROCESS

What is Strategic Brand Management?
Strategic brand management involves designing and implementing marketing programs and
activities to develop, measure, and manage brand equity. It involves developing a comprehensive
strategy to build and sustain a strong, positive perception of a brand among consumers.
It aims to establish a strong emotional connection between a company and its customers by
developing a unique brand identity.
Strategic Brand Management Process?
The strategic brand management process refers to the activities and steps involved in creating,
developing, and maintaining a brand’s identity and reputation in the marketplace. It comprises the
following four steps:

1. Identifying and developing brand plans

2. Designing and implementing brand marketing programs

3. Measuring and interpreting brand performance

4. Growing and sustaining brand Equity

1. Identifying and Developing Brand Plans

The strategic brand management process begins with clearly understanding what the brand
showcases and how it should be positioned with its competitors. This is achieved through brand
planning, which involves using three interlocking models.

Brand Positioning Model

It guides how to market the brand effectively to maximize its competitive advantages. This involves
identifying the brand's unique features, benefits, target audience, and needs and preferences.

Brand Resonance Model

This involves creating a sense of loyalty and emotional connection between the customer and the
brand. It promotes repeat purchases and positive word-of-mouth recommendations. It describes
creating intense, active customer loyalty relationships.

Brand Value Chain

It is used to track the brand's value creation process. This allows companies to understand better the
financial impact of their brand marketing expenditures and investments and identify areas for
potential improvement.

2. Designing and Implementing Brand Marketing Programs

It is essential to establish a strong brand position in customers’ minds. It is essential to develop brand
equity and foster deep customer loyalty. This process involves three critical factors:

Brand Element
The initial choices of the brand’s visual, verbal, and sensory elements, including the brand name,
logo, slogan, packaging, and overall design, should be combined to reinforce the brand’s unique
identity and value proposition.

Marketing Activities
The marketing mix and supporting programs that promote the brand and create a distinctive brand
image. The brand should be integrated into marketing campaigns. Moreover, communications create
a consistent message reinforcing the brand’s values and benefits.
Other Associations
Other indirect associations, such as the company, country of origin, distribution channel, or other
brands, may be linked to the brand. These associations can be leveraged to enhance the brand’s
reputation, value, and customer appeal.

3. Measuring and Interpreting Brand Performance

An effective brand equity measurement system is essential for managers to manage their brands
profitably. Implementing such a system involves three key steps: conducting brand audits, designing
brand tracking studies, and establishing a brand equity management system.

Determining or evaluating a brand’s positioning often benefits from a brand audit. Once marketers
have determined the brand positioning strategy, they can implement marketing programs to create,
strengthen, or maintain brand associations. Brand tracking studies collect information from
consumers on a routine basis.

Experts do it through quantitative brand performance measures on several key dimensions, which
marketers can identify in the brand audit or other means.

4. Growing and Sustaining Brand Equity

Maintaining and expanding brand equity can be quite challenging. Brand equity management
activities take a broader and more diverse perspective of the brand’s equity understanding. For
instance- how branding strategies should reflect corporate concerns and adjust them. Also, if at all,
over time, geographical boundaries, multiple market segments, etc.

BRAND HIERARCHY?
Brand hierarchy is a strategic framework essential for effective brand management, providing a
structured organizational roadmap. Serving as the backbone of a brand's architecture, it guides the
articulation of the brand's identity, values, and product offerings to its audience. This structured
hierarchy can be likened to an organizational chart, where different tiers represent distinct elements
within the brand portfolio. Typically, these levels encompass the corporate brand, family brand, and
individual product or service brands. Each level plays a pivotal role in crafting a unified and easily
recognizable brand identity.
A meticulously crafted brand hierarchy functions as a compass for consistent communication. It
ensures that each product or service seamlessly aligns with the overarching brand message, fostering
a cohesive and memorable brand experience for consumers. By establishing clear relationships
between different offerings, brand hierarchy aids consumers in navigating the brand landscape,
nurturing recognition, and ultimately fostering brand loyalty.
How to Create a Brand Hierarchy?
1. Define Brand Elements: Articulate the core elements of your brand, including vision, mission,
values, and unique selling propositions. Brand values serve as the moral compass guiding the brand's
actions and decisions. They embody the core principles and beliefs that underpin the brand's identity,
culture, and relationships with stakeholders. The vision statement encapsulates the brand's long-term
aspirations and goals, painting a picture of its desired future state and inspiring stakeholders towards
a common purpose.
2. Identify Product or Service Categories: Categorize products or services into distinct groups based
on similarities or target markets. Products or services can be segmented into distinct groups based
on diverse criteria such as functionality, target demographics, usage occasions, or geographical
regions. Segmentation aids in coherently organizing the brand offerings, facilitating better
understanding and management of the product portfolio. Categories may range from broad
classifications like apparel or electronics to more specific delineations such as running shoes or
smartphones, tailored to meet the brand's strategic objectives and consumer needs.

3. Establish Hierarchy Levels: Determine the hierarchical structure by defining relationships

between the corporate brand, family brand, and individual product or service brands. Representing
specific offerings within the brand portfolio, each brand possesses its distinct identity, attributes,
and positioning in the market landscape.

4. Design Visual Representations: Create visual representations, such as organizational charts or

diagrams, to illustrate the brand hierarchy for internal and external stakeholders. Visual
representations, including organizational charts, diagrams, or matrices, offer a visual depiction of
the hierarchical structure of the brand portfolio. These tools facilitate the communication of complex
information about the brand hierarchy to both internal and external stakeholders in a lucid and
accessible manner.

5. Understand Market Segmentation: Analyzing the target market is imperative for effective brand
hierarchy creation. By segmenting the market based on demographics, psychographics, and
behavioral factors, businesses gain valuable insights into the diverse needs and preferences of their
audience. This segmentation facilitates the categorization of products or services within the brand
hierarchy, ensuring that offerings are tailored to specific customer segments.

6. Evaluate Competitive Landscape: Conducting a thorough analysis of the competitive landscape

provides valuable insights into how other brands in the industry structure their hierarchies. By
identifying successful strategies and areas for differentiation, businesses can inform their brand
hierarchy creation process. Understanding competitors' approaches helps in identifying unique
selling points and opportunities for positioning the brand effectively in the market.

7. Consider Brand Extensions: Anticipating potential brand extensions or new product/service

offerings is essential for developing a flexible brand hierarchy. Businesses must ensure that their
hierarchy can accommodate future expansions while maintaining consistency and coherence across
all offerings. This foresight allows for seamless integration of new products or services into the
existing hierarchy, enhancing the brand's overall portfolio and market presence.

8. Align with Brand Positioning: Brand hierarchy should align closely with the overall positioning
strategy of the brand. Each level of the hierarchy should reinforce the brand's positioning and
messaging, creating a cohesive brand experience for customers. By ensuring alignment with brand
positioning, businesses can effectively communicate their unique value proposition and differentiate
themselves from competitors in the market.

9. Seek Stakeholder Input: Involving key stakeholders such as employees, executives, and customers
in the brand hierarchy creation process is essential for gaining valuable insights and ensuring
alignment with organizational goals and customer expectations. Stakeholder input provides diverse
perspectives and helps identify potential challenges and opportunities in the brand hierarchy. By
incorporating stakeholder feedback, businesses can develop a hierarchy that resonates with their
target audience and drives long-term success.

Advantages of Brand Hierarchy

1. Increased Brand Equity: A meticulously managed brand hierarchy enhances brand equity by
forging a strong, unified brand image that resonates with consumers.

2. Efficient Resource Allocation: Brand hierarchy enables efficient resource allocation, directing
marketing efforts and investments strategically based on the hierarchy priorities.

3. Facilitates Brand Extensions: The structured brand hierarchy provides a foundation for successful
brand extensions, as consumers are more likely to accept new products or services under a trusted
brand umbrella.

4. Consistent Brand Communication: Brand hierarchy serves as the framework for maintaining
consistent messaging and communication across all levels of the brand portfolio. This consistency
is paramount in building trust and credibility among consumers, as they expect a certain level of
quality and reliability from the brand, regardless of the specific product or service they engage with.

5. Clear Brand Positioning: A well-defined brand hierarchy enables clear positioning of each product
or service within the market landscape. Consumers can easily discern the unique value propositions
and differences between various offerings, allowing them to make informed purchasing decisions
based on their individual needs and preferences.

6. Streamlined Marketing Efforts: By implementing a structured brand hierarchy, marketers can

streamline and optimize their efforts more effectively. With a clear understanding of the brand's
hierarchy and priorities, resources can be allocated efficiently, focusing on promoting key products
or services that best align with the brand's overarching strategic objectives.

7. Brand Consistency across Channels: Brand hierarchy ensures consistency in messaging, visual
identity, and brand experience across different channels and touchpoints. This uniformity reinforces
brand recognition and strengthens the brand's presence in the minds of consumers, fostering a
cohesive and memorable brand experience.

8. Enhanced Customer Loyalty: A well-managed brand hierarchy contributes to enhanced customer

loyalty by cultivating a sense of familiarity and trust. Consumers are more likely to remain loyal to
a brand that consistently delivers high-quality products and experiences across its entire portfolio,
building lasting relationships and driving repeat purchases.

Brand Hierarchy Levels

1. Corporate Brand: It is the highest level of brand hierarchy. This level encapsulates the overall
identity of the company, laying the foundation with its values, vision, and mission that serve as
guiding principles for all brand-related activities.
2. Family Brand: The next tier is the family brand, grouping related products or services under a
common brand name. This level fosters brand recognition and synergy, creating a cohesive identity
among various offerings within a specific category.

3. Individual Product/Service Brand: The foundation of the hierarchy comprises individual product
or service brands. These brands carry the unique attributes and features of a specific offering, often
distinguished by sub-brands or variants, allowing for a nuanced representation.

Models of Brand Hierarchy

1. Branded House: In the Branded House model, the corporate brand takes the spotlight, creating a
strong association between the corporate brand and its offerings. This enhances overall brand
visibility and strengthens the connection with consumers.

2. House of Brands: Contrastingly, the House of Brands model emphasizes individual product
brands that operate independently. Each product or service has its distinct brand identity, offering
flexibility and targeted marketing approaches.

3. Endorsed Brands: The Endorsed Brands model strikes a balance between the Branded House and
House of Brands. Here, the corporate brand endorses individual product brands, providing a sense
of unity while allowing each product to maintain its unique identity.

Examples of Brand Hierarchy

1. The Coca-Cola Company: Coca-Cola stands as the corporate identity of the company, embodying
its overarching values and vision. Within the Coca-Cola brand umbrella, various family brands such
as Diet Coke, Coca-Cola Zero Sugar, Sprite, and Fanta thrive. These brands uphold the core values
and heritage of Coca-Cola while catering to diverse consumer preferences.

2. Nike: Nike serves as the embodiment of the company's core principles of innovation,
performance, and inspiration. Nike encompasses several family brands like Nike Air, Nike Free, and
Nike React, each representing different technological platforms and design philosophies. Products
like Nike Air Max, Nike Air Force 1, and Nike Free Run possess unique identities and are marketed
accordingly to resonate with specific consumer segments.

3. Unilever: Unilever serves as the overarching corporate brand, encompassing a diverse portfolio
of products and brands. Unilever adopts the House of Brands model, where individual product
brands like Dove, Lipton, Axe, and Ben & Jerry's operate independently with their distinct brand
identities. Some brands under Unilever, such as Dove Men+Care and Lipton Ice Tea, receive
endorsement from the corporate brand, signifying alignment with Unilever's values while
maintaining unique market positions.

4. Procter & Gamble: P&G serves as a prime example of the Branded House model. The corporate
brand is prominently visible, with products like Tide, Pampers, and Gillette falling under the P&G
umbrella, sharing a cohesive brand identity.
5. Unilever: Unilever exemplifies the House of Brands model, where each product maintains its
distinct brand identity. Brands like Dove, Knorr, and Axe operate independently, catering to specific
consumer segments.

Importance of Brand Hierarchy

1. Clarity & Consistency: One of the paramount roles of brand hierarchy is to provide a clear and
consistent framework for presenting brand elements. This ensures that consumers can effortlessly
decipher the relationships between different products or services, fostering a seamless brand
experience.

2. Consumer Recognition: A well-crafted brand hierarchy aids in consumer recognition, creating a

mental map that allows individuals to recall a brand's diverse offerings. This recognition becomes
the bedrock for trust and loyalty, as consumers confidently associate products or services with the
overarching brand.

3. Effective Communication: Brand hierarchy becomes a channel for effective communication.

Organizing information logically, facilitates the seamless transmission of brand messages,
encompassing the brand positioning, values, and unique selling propositions across various
touchpoints.

4. Strategic Positioning: Within a brand portfolio, brand hierarchy plays a pivotal role in strategic
positioning. It enables brands to target specific market segments, address diverse consumer needs,
and maintain a competitive edge by understanding the distinct roles of each offering.

How to Manage Brand Hierarchy?

1. Consistent Branding Guidelines: Develop and enforce consistent branding guidelines to ensure
adherence to the established hierarchy across all communication channels. Establishing and
enforcing consistent branding guidelines stands as a cornerstone for preserving the integrity of the
brand hierarchy. These guidelines constitute a comprehensive framework of regulations and
standards dictating how the brand is portrayed across diverse communication channels. They
encompass crucial elements such as brand voice, visual identity, logo utilization, color palettes, and
typography.

2. Regular Audits and Updates: Conduct regular audits to assess the relevance and effectiveness of
the brand hierarchy. Update it as needed to align with changing business strategies or market
dynamics. Regularly auditing the brand hierarchy is imperative to gauge its relevance and efficacy
amidst the ever-changing market dynamics. These audits entail thorough evaluations of how well
the brand hierarchy aligns with prevailing business strategies, market trends, and consumer
preferences. Potential updates to the hierarchy might involve restructuring hierarchical levels,
refining brand relationships, or introducing novel elements to better encapsulate the organization's
objectives and aspirations.

3. Cross-functional collaboration: Foster collaboration between different departments to maintain

alignment with the brand hierarchy, ensuring cohesive efforts across marketing, product
development, and other teams. Through the promotion of open communication and collaboration,
organizations guarantee that every facet of their operations resonates with the brand hierarchy. This
collaborative ethos empowers teams to leverage their expertise and insights, fortifying the brand's
identity and delivering cohesive experiences to consumers across all touch points.

4. Clear Communication Channels: Establishing transparent communication channels within an

organization is pivotal for disseminating information regarding the brand hierarchy's structure,
updates, and guidelines. It ensures that all stakeholders comprehend their roles and responsibilities
in upholding the brand hierarchy's integrity.

5. Employee Training and Education: Regular training sessions and educational initiatives are
essential to familiarize employees with the brand hierarchy's significance. These programs elucidate
how the brand hierarchy aligns with the organization's overarching objectives, encouraging
employees to embody the brand's values consistently throughout their work.

6. Centralized Brand Asset Management: Implementing a centralized system for managing brand
assets, such as logos, guidelines, and marketing materials, streamlines accessibility and ensures
compliance with the established brand hierarchy. This centralized approach guarantees that all assets
remain current and aligned with the brand's overarching vision.

7. Feedback Mechanism: Establishing a robust feedback mechanism enables the collection of

insights from employees, customers, and stakeholders regarding the effectiveness of the brand
hierarchy. Encouraging open communication fosters an environment conducive to constructive
feedback, facilitating the identification of areas for enhancement and refinement.

8. Brand Monitoring and Tracking: Leveraging tools and metrics for monitoring and tracking brand
performance across various touchpoints is imperative. Analyzing data regularly enables
organizations to identify deviations from the brand hierarchy and promptly address any
inconsistencies, ensuring alignment with strategic objectives.

9. Adaptability and Flexibility: Maintaining a balance between consistency and adaptability within
the brand hierarchy is crucial. While adhering to established guidelines is paramount, organizations
must remain open to evolution and adjustments based on emerging trends, consumer preferences,
and market dynamics.

CONCEPT TESTING OF NEW PRODUCT DEVELOPMENT

A concept is a precursor to every great product. It’s a detailed outline of what you’re going to
produce, who it’s for, the problems it will solve, how it will work, how much it will cost, and
much more.

To ensure your concept is ready to go to market, it’s essential to test it properly with real
customers. This process is called concept testing, and in the rest of this article, we’ll talk about
why this is so important and how to do it methodically.

The benefits of concept testing

Concept testing is the process of testing your concept before launch, so you can confidently
put it into the market with a pretty good understanding of how your customers will feel and
how they will respond.

There are several different methods spanning both qualitative and quantitative approaches
(which we’ll dive into shortly). Still, they all involve presenting concepts to consumers and
getting feedback about different attributes.

(Check out our detailed guide to concept testing for more information.)

There are multiple reasons to do concept testing, such as:

 You get real feedback from users. Designers and product teams are often too close to
the product to make clear-headed decisions, and they might overlook some crucial
things. Concept testing allows you to access honest feedback from your target
customers, which you can’t replicate with your internal team.
 It helps you notice flaws. No concept has ever been perfect. Testing your product with
real users enables you to detect problems that flew under the radar in the design phase,
giving you many new pairs of eyes.
 It allows you to refine your concept. Before testing, your product is a rough prototype
with all the major pieces in place, but it probably needs some extra work. By shedding
light on what consumers think, testing gives you some direction for refining and
improving your product so that it’s more likely to gain traction when it hits the shelves.

The importance of concept testing

The above benefits are essential for many reasons. Here are some of the reasons why you
should consider concept testing in new product development:

 It’s easier to get backing for your product. Testing gives concrete data about how
customers feel about your brand’s products. You can then use this data to make a
compelling case to others in the organization about why you are making certain
decisions. With this data, it’s no longer a matter of personal opinion, and it will be much
easier to convince others.
 It helps you find out what your customers like the most about the product. Concept
testing is beneficial not just for that specific product and how to market it but also allows
you to make better decisions in the future by focusing on the things that people like
most and targeting popular pain points with different products.
 Testing can help you segment your customer base. Who should you target with your
product? If specific demographics love the product and others are less enthusiastic, this
is extremely helpful when focusing your marketing and distribution efforts.
 It helps you estimate how many sales you’ll make and the ROI you’ll generate with
the product when it goes to market. This is helpful when setting budgets, making
plans, and getting financial backing from others in your company.
 It allows you to identify a reasonable price point. It’s common to ask users how
much they would expect to pay for a product during testing. This helps inform your
decisions about how much to price your product.

Different approaches for testing concepts

There are four main approaches for concept testing a new product, each with its pros and cons.
It’s best to consider your specific situation and then pick one which works best for concept
testing your product.

Monadic testing

Monadic testing is where the audience is divided into groups, and each group is given one
concept in isolation and asked to evaluate it via a series of questions.

For example, they might be asked to rate the design, evaluate the price, or give feedback on the
packaging.

The pros of monadic testing are:

There is less room for order bias since the concepts are shown and evaluated in isolation.

It’s easier for users — they only have one product to focus on, and all the questions apply to
that product.

It encourages more profound feedback as users dive deeply into one concept instead of
skimming over several different ones.

On the other hand, the main drawback to monadic testing is that it requires a larger sample size
to get enough reliable data. It can be costly to gather all the necessary participants and
challenging to find enough people to assess niche concepts.

Sequential monadic testing

In sequential monadic testing, multiple concepts are evaluated one after the other. Each
participant sees two or more concepts presented in random order. Participants answer questions
about each one in turn.

The main benefit is that fewer people are needed, so this results in the following:

Being cheaper to gather enough people and set up the testing

Taking less time to collect a sufficient amount of data

It also works well with niche markets where there might not be many potential customers

The main downside is that it takes longer to carry out each test since participants evaluate
multiple concepts instead of just one.

Comparative

In comparative testing, concepts are shown next to each other, and participants evaluate all of
them at the same time. It’s an effective way to find out how one concept compares directly
against another in the eyes of your customers.

The main advantage of comparative testing is that it’s suitable for measuring small differences
and drilling down into the specific advantages and drawbacks of each product. The main
downside is that its comparative nature means it’s not very effective when both products are
flawed.

Comparative testing is often used as a follow-up for monadic testing to gain deeper insights
into a specific product.

Proto monadic

Proto monadic concept testing is a blend of monadic and comparative testing. Customers
evaluate a product via monadic testing and then are shown the same product compared to
another.

It’s done to confirm the initial monadic results to gain a more sturdy overall conclusion about
a product’s strengths and weaknesses.

What to measure

Once you have settled on a testing method, it’s time to consider what you want tomeasure.
There’s a long list of possible factors to analyze with concept testing, and these might vary
based on your chosen method.

Here are some common examples of things to measure:

 Overall reaction to the product – this measures how customers feel about the product overall
and can be measured with a Likert scale (a series of options from “strongly agree” to “strongly
disagree”).

Reaction to different elements of the product – you can also use the Likert scale to rate specific
aspects of the product, for example, the packaging, ease of use, battery life, and more.

Need for the product compared to the current market – how much demand does your participant
think there is for the product? Is there an urgent need for it, or is the market already saturated
with similar products?

Comparison with other products on the market – how does your product compare with what’s
already out there in the market? Is it a significant improvement on what exists, worse, or just
more of the same?

Likes and dislikes – what are the individual things people like and dislike about the product?

Purchase likelihood – this is where you ask your respondents to rate their likelihood of buying
your product. You can use a Likert scale for this (“very unlikely” to “very likely”).

Pricing analysis – how much would your participants be willing to pay for the product?

Likelihood of use – how much of a need does your participant have for the product, and what
kind of role would it play in their lives?

BRANDING DECISIONS

BRANDING DECISIONS Branding consists of a set of complex branding decisions. Major brand
strategy decisions involve brand positioning, brand name selection, brand sponsorship and brand
development. Before going into the four branding decisions, also called brand strategy decisions,
we should clarify what a brand actually is. A brand is a company’s promise to deliver a specific set
of features, benefits, services and experiences consistently to buyers. However, a brand should rather
be understood as a set of perceptions a consumer has about the products of a particular firm.
Therefore, all branding decisions focus on the consumer.
Branding Decisions – Brand Positioning, Brand Name Selection, Brand Sponsorship and
Brand Development

Brand Positioning – Branding Decisions

A brand must be positioned clearly in target customers’ minds. Brand positioning can be done at
any of three levels:
▪ on product attributes
▪ on benefits
▪ on beliefs and values.
At the lowest level, marketers can position a brand on product attributes. Marketing for a car brand
may focus on attributes such as large engines, fancy colours and sportive design. However, attributes
are generally the least desirable level for brand positioning. The reason is that competitors can easily
copy these attributes, taking away the uniqueness of the brand. Also, customers are not interested in
attributes as such. Rather, they are interested in what these attributes will do for them. That leads us
to the next level: Benefits. A brand can be better positioned on basis of a desirable benefit. The car
brand could go beyond the technical product attributes and promote the resulting benefits for the
customer: quick transportation, lifestyle and so further. Yet, the strongest brands go beyond product
attributes and benefits. They are positioned on beliefs and values. Successful brands engage
customers on a deep, emotional level. Examples include brands such as Mini and Aston Martin.
These brands rely less on products’ tangible attributes, but more on creating passion, surprise and
excitement surrounding the brand. They have become “cool” brands. Brand positioning lays the
foundation for the three other branding decisions. Therefore, brand positioning should also involve
establishing a mission for the brand and a vision of what the brand should be and do. The brand’s
promise must be simple and honest.

Brand Name Selection – Branding Decisions When talking about branding decisions, the brand
name decision may be the most obvious one. The name of the brand is maybe what you think of first
when imagining a brand – it is the base of the brand. Therefore, the brand name selection belongs to
the most important branding decisions. However, it is also quite a difficult task. We have to start
with a careful review of the product and its benefits, the target market and proposed marketing
strategies. Having that in mind, we have to find a brand name matching these things. Naming a brand
is part science, part art, and certainly a measure of instinct Although finding the right name for a
brand can be a challenging task, there are some guidelines to make it easier.
Desirable qualities for a brand name include:
▪ It should suggest something about a product’s benefits and qualities. Think of the wadding polish
“Nevr Dull”. The brand name indicates the benefit of using this product: the treated metal will never
be dull.
▪ It should be easy to pronounce, recognise, and remember. iPod and Nike are certainly better than
“Troglodyte Homonculus” – a clothing brand.
▪ The brand name should be distinctive, so that consumers don’t confuse it with other brands. Rolex
and Bugatti are good examples.
▪ It should also be extendable. Think of Amazon.com, which began as an online bookseller but chose
a name that would allow expansion into other categories. If Amazon.com had chosen a different
name, such as books.com, it could not have extended its business that easily.
▪ The brand name should translate easily into foreign languages. The Ford Pinto line had some
struggles in Brazil, seeing as it translated into “tiny male genitals”. Or the Mitsubishi Pajero, which
means in Spanish “man who plays with himself and enjoys it a bit too much”. More famous: Coca-
Cola reads in Chinese as “female horse stuffed with wax”.
▪ It should be capable of registration and legal protection. In other words, it must not infringe on
existing brand names. Worthy of note is the fact that brand name preferences are changing
continuously. After a decade of choosing quirky names (such as Yahoo!, Google) or fictional names,
today’s style is to build brands around names that carry real meaning. For instance, names such as
Blackboard, a school software, make sense. However, with more and more brand names and
trademark applications, available new names can be hard to find. Choosing a brand name is not
enough. It also needs to be protected. Many firms attempt to build a brand name that will eventually
become identified with a product category. Examples for these names include Kleenex, Tip-ex and
Jeep. However, their success can also quickly threaten the company’s rights to the name. Once a
trademark becomes part of the normal language (called “genericization”), it is not protected
anymore. For that reason many originally protected brand names, such as aspirin, Walkman (by
Sony) and many other names are not protected anymore.
Brand Sponsorship – Branding Decisions Branding decisions go beyond deciding upon brand
positioning and brand name. The third of our four branding decisions is the brand sponsorship. A
manufacturer has four brand sponsorship options.

Brand Sponsorship – Branding Decisions Branding decisions go beyond deciding upon brand
positioning and brand name. The third of our four branding decisions is the brand sponsorship. A
manufacturer has four brand sponsorship options.
A product may be launched as a manufacturer’s brand. This is also called national brand. Examples
include Kellogg selling its output under the own brand name (Kellog’s Frosties, for instance) or
Sony (Sony Bravia HDTV). The manufacturer could also sell to resellers who give the product a
private brand. This is also called a store brand, a distributor brand or an own-label. Recent tougher
economic times have created a real store-brand boom. As consumers become more price-conscious,
they also become less brand-conscious, and are willing to choose private brands instead of
established and often more expensive manufacturer’s brands.

Also, manufacturers can choose licensed brands. Instead of spending millions to create own brand
names, some companies license names or symbols previously created by other manufacturers. This
can also involve names of well-known celebrities or characters from popular movies and books. For
a fee, they can provide an instant and proven brand name. For example, sellers of children’s products
often attach character names to clothing, toys and so on. These licensed character names include
Disney, Star Wars, Hello Kitty and many more. Finally, two companies can join forces and co-brand
a product. Co-branding is the practice of using the established brand names of two different
companies on the same product. This can offer many advantages, such as the fact that the combined
brands create broader consumer appeal and larger brand equity. For instance, Nestlé uses co-
branding for its Nespresso coffee machines, which carry the brand names of well-known kitchen
equipment manufacturers such as Krups, DeLonghi and Siemens.

Brand Development – Branding Decisions Branding decisions finally include brand development.
For developing brands, a company has four choices: line extensions, brand extensions, multibrands
or new brands.
Line extension refers to extending an existing brand name to new forms, sizes, colours, ingredients
or flavours of an existing product category. This is a low-cost, low-risk way to introduce new
products. However, there are the risks that the brand name becomes overextended and loses its
specific meaning. This may confuse consumers. An example forline extension is when Coca-Cola
introduces a new flavour, such as diet cola with vanilla, under the existing brand name. Brand
extension also assumes an existing brand name, but combines it with a new product category. Thus,
an existing brand name is extended to a new product category. This gives the new product instant
recognition and faster acceptance and can save substantial advertising costs for establishing a new
brand. However, the risk that the extension may confuse the image of the main brand should be kept
in mind. Also, if the extension fails, it may harm consumer attitudes toward other products carrying
the same brand name. For this reason, a brand extension such as Heinz pet food cannot survive. But
other brand extensions work well. For instance, Kellog’s has extended its Special K healthy
breakfast cereal brand into a complete line of cereals plus a line of biscuits, snacks and nutrition
bars.
Multibrands means marketing many different brands in a given product category. P&G (Procter &
Gamble) and Unilever are the best examples for this. In the USA, P&G sells six brands of laundry
detergent, five brands of shampoo and four brands of dishwashing detergent. Why? Multibranding
offers a way to establish distinct features that appeal to different customer segments. Thereby, the
company can capture a larger market share. However, each brand might obtain only a very small
market share and none may be very profitable. New brands are needed when the power of existing
brand names is waning. Also, a new brand name is appropriate when the company enters a new
product category for which none of its current brand names are appropriate. As you might have
recognised, these four branding decisions are all interrelated. In order to build strong brands, brand
positioning, brand name, brand sponsorship and brand development have to be in line with each
other.

CO-BRANDING

Co-branding is a marketing strategy that utilizes multiple brand names on a good or service as part
of a strategic alliance. Also known as a brand partnership, co-branding (or "cobranding")
encompasses several different types of branding collaborations, typically involving the brands of at
least two companies. Each brand in such a strategic alliance contributes its own identity to create a
melded brand with the help of unique logos, brand identifiers, and color schemes.

The point of co-branding is to combine the market strength, brand awareness, positive associations,
and cachet of two or more brands to compel consumers to pay a greater premium for them. It can
also make a product less susceptible to copying by private-label competition.

Co-Branding Strategies
According to branding and marketing experts, there are four distinct co-branding strategies:
 Market penetration strategy: A conservative strategy that seeks to preserve the existing
market share and brand names of two partnered or merged firms.
 Global brand strategy: Seeks to serve all customers with a single, existing global co-brand.
 Brand reinforcement strategy: Exemplified by the use of a new brand name.
 Brand extension strategy: The creation of a new co-branded name to be used only in a new
market.

Co-Branding Examples

Co-branding is all around you. Consider these examples:

Taco Bell's Doritos Locos Tacos: Specialty food item co-developed by Yum! Brands, Inc. and
PepsiCo subsidiary Frito-Lay, Inc.
"Your favorite music, one tap away": An Uber and Pandora Media collaboration that lets Uber
riders create Pandora playlists to use during trips
Citi AAdvantage cards: Citi credit cards that earn American Airlines miles with qualifying
purchases
Supermarket foods: Pillsbury baking mixes with Hershey's chocolate; Kellogg's cereal with
Smucker's Jif peanut butter
Nike+: A Nike Inc and Apple Inc partnership that has connected activity tracking technology in
athletic gear with iPhone apps and the Apple Watch.