Case study and analysis: Portugal TVI media / broadcasting company

Chapter_4_A_Primer_in_Brand_Management_for_Media_Firms.pdf

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Chapter 4

A Primer in Brand Management for Media Firms

Moving from strategic management to “brands,” this chapter reviews major brand management concepts and theoretical frameworks such as brand knowledge and brand equity, discusses how these concepts and frameworks might apply to media products in the context of a changing marketplace, and provides examples of brand management practices in media industries. By now we know that business activities such as stra- tegic planning are essential for gaining competitive advantages, but why is brand management important? What has changed in our media environment that makes a traditional consumer goods management tool and construct applicable to media products?

In principle, the most essential driver for a branding strategy is the ele- ment of “competition” in a market. When consumers are faced with choices in products, they need a way to identify the one that will best sat- isfy their needs, so suppliers must create identities for their offerings to avoid confusion and reach the target consumers in the marketplace. The tremendous proliferation of media outlets and the continuous fragmen- tation of audiences during the last two decades have created an increas- ingly competitive media marketplace. The same element of “competition” that propelled the introduction of branding practices in consumer goods industries is now facilitating the application of brand management in many media industries as media firms race to establish clear and memo- rable brand images in a growingly complicated marketplace filled with infinite content offered by broadcasters, cablecasters, Internet, telcos, and DBS. In fact, the branding process is consistent with the “experience good” characteristic of media products: It is difficult for consumers to es- timate the quality of a new media product such as movies or television se- ries before they actually experience it. In order to avoid risks (e.g., money

57Chan-Olmsted, S. M. (2005). Competitive strategy for media firms : Strategic and brand management in changing media markets. Retrieved from http://ebookcentral.proquest.com Created from ashford-ebooks on 2019-03-01 14:48:43.

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and time) related to purchasing and consuming these products, consum- ers may depend on brands and their associated images and expectations as one of the initial decision factors (Chang, 2004).

WHAT IS BRANDING?

Fundamentally, a brand is a name, term, sign, symbol, package design, or combination of these elements intended to identify and distinguish a product or service from its competitors. A “brand” is different from a “product” because, although it is designed to satisfy the same basic need as an unbranded product, it also adds certain rational, tangible and/or emotional, intangible attributes to a product so it is perceived to be dif- ferent from an unbranded product in its expected performance and ben- efits. In essence, these brand-related elements are supposed to communicate thoughts and feelings that enhance the value of a product beyond its product category and basic functional value. For instance, the brand New York Times represents a certain level of news reporting and editorial quality that distinguishes it from its competitors.

Why are brands valuable? Keller (1998) succinctly listed a number of reasons why brands matter to both consumers and producers. He sug- gested that brands help consumers identify the source of a product, as- sign responsibility to product makers, reduce risk and search cost, signal quality, form relationships between consumers and product makers, and serve as a symbolic device. Brands also provide producers a means of identification to simplify handling or tracing, a way to legally protect unique features, a tool to signal “quality” levels, a means to endow prod- ucts with special associations, and a source of competitive advantages and thus the final financial returns. All of these benefits are applicable in the context of media products. For example, the brand name “PBS” is strongly associated with the images of “trust” and “quality” in the mind of television audiences (Chan-Olmsted & Y. Kim, 2002). The brand name “Discovery” has been used by its corporate owner in the introduction of various new cable channels and even retail learning products.

There are various strategic aspects that a firm can pursue to engage competitors: marketing, production, financial, technological, and man- agerial. Whereas the topics in strategic management discussed in earlier chapters mainly dealt with managerial competition strategies, the de- velopment and maintenance of brands are traditionally a part of a mar- keting program. Because a brand is built over time, branding is also a continuous process of marketing activities that should be designed to reflect the changing life cycle of a product and its environment. Various marketing researchers have tried to explain the nature of brands and branding activities. Donahue (1995) suggested that a valuable brand has to be relevant and distinctive and brand-building activities may in- clude demonstrations, seminars, shows, effective service material, pub- lic relations, advertising, direct marketing, and promotions that extend

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Chan-Olmsted, S. M. (2005). Competitive strategy for media firms : Strategic and brand management in changing media markets. Retrieved from http://ebookcentral.proquest.com Created from ashford-ebooks on 2019-03-01 14:48:43.

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positioning. Murphy (1987) indicated that branding consists of the de- velopment and maintenance of sets of product attributes and values that are coherent, appropriate, distinctive, protectable, and appealing to consumers. Cowley (1991) also stated that sources of added value in branding include a guarantee of authenticity, the promise of perfor- mance, the value of reassurance, and the transformation of experience (the subjective experience of using a brand, and differentiation or brand personality). The value of authenticity and promise of positive experi- ence seem to be especially important for media content providers in an increasingly crowded marketplace. In fact, Davis (1995) suggested that brand management should be viewed as a strategic management pro- cess to maximize the long-term value of a brand. The role of branding is often misunderstood by companies that have not had a traditional mar- keting focus. Many companies hire senior-level packaged goods mar- keters and expect quick fixes (Bissell, 1998). Branding is seen simply as a new “design and control” function to quickly clean up corporate iden- tity and wrap an existing product or service into a nice, neat package. Bissell reiterated the importance of management commitment in treat- ing branding as part of a firm’s fundamental strategic process and daily tactical operations.

On the surface, the branding and brand management notions ap- pear to be less applicable to media industries due to many media prod- ucts’ intangible, nonpreservable nature, the possibility of group consumption, the selection of a content product based on the merits of individual units (e.g., movies), the lack of actual purchasing action (and risk) for advertising-supported content products, and the absence of easily identifiable product logos. In addition, prior to the 1990s, most media markets were relatively uncompetitive; media products were based on distinct technologies consumed in separate markets with distinctive consumer behaviors (McDowell, 2006). Nevertheless, the landscape of media industries has changed dramatically. We now have a converging media marketplace enabled by digital technologies and new network conduits such as the Internet; the potential for pro- viding additional new media services; and a fragmented, multitasking audience. These environmental developments present an unprece- dented need for differentiation using all possible means. With varying degrees, branding or brand management can enhance a media con- sumer ’s association, perception, and expectation of a media product. For example, a radio station that has established a family-friendly brand may increase its chance of being selected by a certain segment of the audience. And a signature local news program can easily become a proprietary brand asset for a TV station.

Although branding offers media firms opportunities for differentia- tion, the aforementioned media characteristics still present some chal- lenges in this process. In addition, there are general obstacles associated with the branding approach. For example, the essence of branding as de- veloping something of value often conflicts with the current accounting

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system, which treats a brand as an expense rather than asset. The neces- sary long-term orientation of brand building also conflicts with the gen- erally high personnel turnover in businesses. Finally, the integrated nature of brand building (i.e., the involvement of production, sales, mar- keting, etc.) often conflicts with the reality of a segmented organizational structure and single-dimension advertising focuses (Kapferer, 1992).

BRAND MANAGEMENT CONCEPTS

Brand management has become a major subfield within the marketing discipline over the years, infusing it with various theoretical constructs and analytical frameworks. Many of these conceptual building blocks are useful for analyzing media products and thus are reviewed next.

Brand Identity

Brand identity encompasses two dimensions: one that indicates the out- ward expression of a brand, including the tangible elements such as names, symbols, logos, slogans, and packaging that can be used to rec- ognize a brand; and the other that symbolizes the brand’s differentiated characteristics, including the unique set of associations that represent what the brand stands for and would do for customers. The process is the linking of differentiated features and attributes of a product or ser- vice to anticipated perceived benefits based on customers’ values and be- liefs. In a way, brand identity is like clothing to a product in that it can set one apart in a crowd as well as say something about the person who chooses the brand. It is important to note that brand identity is some- thing that is formulated and worked on by the firm, whereas another relevant concept, brand image, is based on consumer perception (i.e., formulated by the consumer). In other words, image is the result of how consumers interpret the brand identity put forth by a firm, amid noises and personal circumstances. Time can also change the identity of a brand as it gradually acquires other meanings from associations with things that are both intended and unintended by its firm.

So how does a firm successfully develop a brand identity for a prod- uct? Kapferer (1992) suggested that brand identities should be formu- lated on the basis of three qualities: durability, coherence, and realism (as opposed to idealism or opportunism). Keller (1998) listed five criteria in choosing brand elements to form a brand identity: memorability, meaningfulness, transferability (both culturally and geographically), adaptability, and protectability (both legally and competitively). Cable networks offer some excellent examples of establishing and modifying a media brand over time. For example, Discovery Communications Inc.’s TLC channel began as an education network that offered foreign-lan- guage instruction, an SAT review course, and other adult personal-en- richment series with the name of “The Learning Channel” (Eastman, 1993). With the success of its reality-based series such as Trading Spaces

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and its continuous programming transformation to this particular genre, it is now renamed as “TLC” with a “Life Unscripted” slogan and logo. Finally, a firm may look to various sources to define a brand’s identity. Kapferer also suggested some sources of identities: (a) the ac- tual product or service through which the brand may display its uniqueness (e.g., NASA Television), (b) a brand name through which the brand may convey its characteristics (e.g., The Cartoon Network), (c) brand characters and symbols through which the brand may represent its traits and features in the etymological sense (e.g., PBS and its logo), (d) trademarks and logos through which a brand may reflect its person- ality and value (e.g., Playboy TV Networks), (e) geographical and his- torical roots through which a brand may paint its individuality and competence (e.g., BBC America cable channel), and (f) advertising through which a brand may develop or reinvent identities as conceived by its firm (e.g., TLC cable channel).

Brand Knowledge: Awareness, Association, and Image

Although a brand identity may be the strategic goal for a brand, the re- sultant brand image of what actually resides in the minds of consumers about the brand could be very different from that goal. According to Keller (1998), such a discrepancy is due to the differential brand knowl- edge structures of individual consumers as reflected by the levels of brand awareness and brand image (i.e., the strength, favorability, and uniqueness of brand associations) of that product.

Creating “brand awareness” is often considered the first step of branding. Brand awareness can be defined as the degree to which a tar- get audience is able to identify a brand among others and even recall its promise. As a typical measure of marketing communications effective- ness, awareness may be assessed unaidedly or aidedly (i.e., when a brand name is recognized among others that are listed or identified). Conceptually, brand awareness is hierarchical. Keller (1993) suggested that brand awareness consists of brand recognition, which communi- cates consumers’ ability to verify prior exposure to the brand when given the brand as a cue, and brand recall, which relates consumers’ ability to retrieve the brand from memory when given cues such as ben- efits, usage/purchase situations, or product categories. Another related concept is “top-of-the-mind” awareness, which denotes the highest level of brand awareness for a brand because the brand is the first to come to mind when consumers recall a brand relating to a certain qual- ity. It is evident that brand awareness is fundamental to a brand’s suc- cess. For example, by increasing the brand awareness of HBO On Demand (a video-on-demand programming service offered by HBO), HBO raises the potential that an audience might include this service in his or her viewing consideration list. By increasing the brand awareness of Movielink.Com (a broadband movie download service), Movielink

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raises the probability that an audience might choose this service because it is perceived to be more established and familiar. This power of aware- ness is especially significant for new media products that consumers have not experienced or have no prior knowledge to relate to. Finally, by increasing the brand awareness of Bravo Cable Network, its owner, NBC, would have an easier time cultivating the associations that make up Bravo’s brand image.

As indicated previously, brand image rests in the consumers’ minds and is developed through brand associations. Consequently, brand im- age may be defined as a unique set of associations within the target cus- tomers’ minds that characterizes what the brand stands for and implies the brand’s promise to them. For users of the brand, the image is also in- fluenced by their experience with the brand. For nonusers, the image is largely shaped by their impressions of the brand amid personal beliefs and attitudes. Keller (1998) identified three main types of brand associa- tions with increasing abstraction: attributes (product related or nonproduct related such as price and usage imagery), benefits (func- tional, symbolic, or experiential), and attitudes formed on the basis of beliefs about a product’s attributes and benefits. Note that a brand im- age is influenced not only by the types of associations but also by the strength, uniqueness, and favorability of the associations (Keller, 1998). For instance, Fox News has established relatively strong and unique brand associations based on certain attributes and benefits (e.g., conser- vative commentaries such as the O’Reilly Factor program). The value of its brand image, however, is largely dependent on an audience seg- ment’s favorability or desirability toward those associations.

Brand Attitudes

Another consumer-based concept, brand attitudes, is an important sub- ject in traditional consumer behavior, marketing, and advertising disci- plines (Gardner, 1985; Mitchell & Olsen, 1981). Many studies in advertising effectiveness have focused on investigating the relationships between brand attitudes, attitudes toward advertising, and purchase intention (Heath & Gaeth, 1994; Kalwani & Silk, 1982; MacKenzie & Lutz, 1989). Brand attitudes can be defined as consumers’ overall evalu- ations of a brand, which can be influenced by experience as well as marketing programs (Wilkie, 1990). Ajzen and Fishbein (1980) exam- ined brand attitudes as a predisposition to respond in a consistently favorable or unfavorable manner to a particular brand.

Understandably, such a definition implies significant consequences for both consumers’ formation of brand image and purchasing behav- ior. Katz (1960) proposed that consumers actually form brand attitudes based on what the brands can do to help them achieve what they desire. He listed four major functions that consumers often seek from a prod- uct: to satisfy their needs, to allow them to express themselves, to sim-

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plify decision making, or to eliminate threats or insecurity. Here we are dealing with the multiplicative result of both the functions that are per- ceived to be embedded in a product and personal beliefs of the impor- tance of these functions. To capture the meaning of these abstract attitudinal concepts in a marketing context, Fishbein and Ajzen (1975) proposed a famous expectancy-value model to assess brand attitudes. They stated that brand attitudes are a function of (a) salient beliefs about the attitude object, defined as the subjective probability that the attitude object has each attribute (i.e., strength of association between the brand and the salient attributes or benefits), and (b) the evaluative aspect of these beliefs, defined as the evaluation of each attribute (i.e., the favorability of the salient attributes or benefits). It was also sug- gested that brand attitudes that were formed based on direct behavior or experience are often more influential in the purchasing decision process (Farquhar, 1989).

How does the concept of brand attitudes work in the context of media products? The functional theory of attitudes proposed by Katz (1960) is useful to explain the dynamics of consumption choices for media prod- ucts. In fact, it is similar to the utility notions as suggested by the uses and gratification theory in mass communication. A media brand may seek to create associations with certain product-related attributes such as the extensive amount of information offered (e.g., Discovery), non-product-related attributes such as a user (audience) imagery of be- ing young and hip (e.g., MTV), functional benefits such as knowledge obtainment (e.g., PBS), symbolic benefits such as being socially visible and accepted (e.g., ESPN), and experiential benefits such as high sensory entertainment (e.g., a digital cable service). By investigating the func- tions desired by a target audience and how the product delivers that function as perceived by the group, a media firm can assess the effective- ness of its product offering and marketing programs in associating the attributes and benefits with its brand.

Brand Extension, Hierarchy, and Portfolio

When a brand has acquired a strong, favorable brand image, it is logical that its firm will want to extend the brand’s value to its other busi- nesses. Brand extension is defined as the use of an established brand name for a new product to capitalize on the equity of the existing brand name. Successful brand extensions require marketing strategies that reasonably establish a connection between the new and the old product and transfer the perceived benefit from the old to the new in a meaning- ful continuation of brand identity. Note that established brands are most valuable in those extensions where the perceptions of brand iden- tity are relevant to the potential consumer of the new product. For in- stance, NBC’s extensions to the cable network business, MSNBC and CNBC, seem to provide the consistent content images (upscale and ur-

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ban) that appeal to the core audience of NBC. Nevertheless, overextensions or wrong extensions of a successful brand can also dam- age the existing brand. Research has shown that a brand extension strategy may lead to cannibalization or dilution of the parent brand (Chakravarti, MacInnis, & Nakamoto, 1990; John, Loken, & Joiner, 1998; Loken & John, 1993).

Brand extensions can be grouped into two different categories: line ex- tensions, which extend a brand name vertically by introducing a new product of modifying features (e.g., different attributes, pricing points, or qualities) into the same product category as the parent brand, and cate- gory extensions, which extend a brand name horizontally by introducing a new product into a product category different from that of the parent brand (Kirmani, Sood, & Bridges, 1999). For example, it is a line extension when the Discovery Channel set up another cable network, Discovery Health, whereas it is a category extension when Discovery entered the magazine-publishing business by introducing its Discovery magazine.

Several factors have been suggested to motivate line extension strate- gies: customer segmentation, consumer desires, pricing breadth and flexibility (e.g., encouraging customers to trade up to premium prod- ucts), excess capacity, competitive intensity, trade pressure, and short-term sales gain. Kapferer (1992) suggested that the high cost of advertising, a main-brand building tool, has prevented many firms from launching new brands and to opt for brand maintenance instead. In general, a firm may adopt a brand extension strategy to facilitate new-product acceptance and/or provide feedback benefits to the parent brand (Quelch & Kenny, 1999). Specifically, brand extensions may re- duce risk perceived by customers, increase the probability of gaining distribution and trial, increase promotional efficiency, reduce costs of marketing programs, avoid cost of developing a new brand, allow for packaging and labeling efficiencies, and permit consumer variety seek- ing. From the perspective of the parent brand, brand extensions can clar- ify brand meaning, enhance the parent brand image, revitalize the brand, bring new customers into the brand franchise and increase mar- ket coverage, and permit subsequent extensions (Keller, 1998).

There are various problems that might be associated with line exten- sions, including lower brand loyalty, oversegmentation (i.e., weaker lines), underexploited product ideas (i.e., the product might warrant a new brand), stagnant category demand, more opportunities for com- petitors, increased costs, and poorer trade relations (Quelch & Kenny, 1999). Keller (1998) also suggested that brand extensions can confuse or frustrate consumers, encounter retailer resistance, hurt the parent brand image, cannibalize sales of the parent brand, diminish identifica- tion with any one product category, dilute brand meaning, or cause the firm to forgo the chance to develop a new, profitable brand.

Many studies in this area have focused on finding the factors contrib- uting to successful brand extensions (e.g., Aaker & Keller, 1990; Barwise, 1993; Keller & Aaker, 1992; Rangaswamy, Burke, & Oliva, 1993; Shocker,

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Srivastava, & Ruekert, 1994; Sunde & Brodie, 1993; Uncles, 1996). Gen- erally, past research related to the role of the parent brand seems to indi- cate that the number of products associated to a brand, the variability among product types represented by a brand name (brand breadth), and the quality variance of products associated to a brand are major explana- tory variables regarding brand extension evaluations (Chang, 2005). There are also studies that emphasize the aspect of the parent-extended brand relationship. It was found that the more common and fewer dis- tinctive associations that exist, the greater the perception of overall simi- larity between the parent and extended brands. Although these similarity judgments could be based on product-related attributes or benefits as well as non-product-related attributes or benefits, they also provide the foundation for value transfer from the parent brand to the extended brand (MacInnis & Nakamoto, 1990).

Brand extension is an increasingly popular branding strategy in me- dia industries. Beginning with the practices of movie sequels (e.g., Home Alone 2, the Star Wars trilogy), it is also widely applied in television pro- gramming development and cable network expansions. For example, the success of the program Law and Order prompted the introductions of Law and Order: Special Victims Unit and Law and Order: Criminal Intent. HBO, the Discovery Channel, CNN, and ESPN all have adopted both line and category brand extension strategies. In fact, studies have shown that in 2004, among the 312 cable television networks, approximately 37% of them were brand extensions. In addition, it was found that the use of the brand extension strategy has become very popular since the mid-1990s (Chang, 2005). In essence, the deregulatory environment as well as technological advances have enabled the growth of multiple me- dia outlets (both content and distribution), which offers the opportu- nity of additional brand development. As advertising costs continue to escalate and consumers are bombarded by proliferated media choices, brand extensions seem to be an effective strategy of expansion for many media firms.

Brand hierarchy refers to the graphical ordering of brands to examine the number and nature of common and distinctive brand components across a firm’s products, thus identifying the branding relationships and corporate brand portfolios. A brand hierarchy may be composed of a corporate brand (e.g., Time Warner), family brand (e.g., Turner Broad- casting), individual brand (CNN), and modifier (individual item or model; e.g., CNNfn). A number of factors need to be contemplated while designing a brand hierarchy. A firm has to find the best combination of hierarchy levels, the similarities and distinctions between brands, and how these brands should be related so a new brand might leverage the associations with more established brands in the hierarchy while also creating its own meanings (Keller, 1998).

Another relevant concept to brand extension is brand portfolio. Simi- lar to corporate strategies, a brand portfolio is a set of brands that a firm offers to consumers in a product category or in the overall market.

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Brand portfolio strategy is closely related to the type and size of con- sumer segments available in a market. The management of a brand portfolio encompasses the development and monitoring of a firm’s brand holdings over time along a conceptual matrix to achieve the best overall profitability for its stakeholders. Matrix analytical frameworks utilizing aspects such as market share, sales volume, and brand images to map the trends of an individual brand’s positions and thus its subse- quent resource commitments are often adopted in this process. Aaker (2004) stated that a brand portfolio strategy should create relevance, clarity, differentiation, energy, and leverage. Nevertheless, Kumar (2003) argued that companies can often achieve greater economies of scale, corporate growth, and profitability by reducing the number of brands in their portfolios because once any unprofitable brands have been killed off, companies are left with more freedom to invest in the growth of their remaining brands. In the context of media products, the brand portfolio concept is another valuable tool for analyzing the strat- egies of media conglomerates because digitization increasingly offers more expansion opportunities for these media firms.

THE VALUE OF BRANDING

Brand Equity

The goal of branding is to create something of value that would other- wise be unattainable. Brand equity is typically the “value” that a firm aims to generate with its marketing programs for a brand. Brand equity is therefore defined as the accrued marketing and financial value, both tangible and intangible, that a brand adds to a product or service as a re- sult of a combination of factors such as the awareness, loyalty, per- ceived quality, images, and emotions that consumers associate with the brand name. Keller (1991) provided a conceptual framework of what brands mean to consumers and what this implies for marketing strate- gies. He conceptualized brand equity from the perspective of the individ- ual consumer. This customer-based brand equity occurs when the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in memory. Keller proposed that brand equity is closely related to two dimensions of a brand: brand awareness or familiarity, which includes brand recall and brand recognition; and brand image, which is a combination of the types of brand association and favorability, strength, and uniqueness of brand associations. To clarify the nature of branding, Aaker (1991) also stressed that brand eq- uity can go both ways because it is a set of brand assets and liabilities linked to a brand and its name and symbol that adds to or subtracts from the value provided by a product or service to a customer. The assets and liabilities can be classified into five categories: brand loyalty, name awareness, perceived quality, brand associations, and other proprietary brand assets such as patents and trademarks.

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Brand equity brings forth a variety of values. First of all, it allows a brand to charge a premium price compared to competitors with less brand equity, thus contributing to profitability. Brand equity also maintains higher awareness of the product, reduces perceived risk, sim- plifies the decision process for low-involvement products, helps brand extension efforts, increases the probability of being included in a con- sumer ’s set of brand considerations, and offers a strong defense against new products and new competitors. For example, the strong brand eq- uity of the Wall Street Journal has contributed to its financial perfor- mance, subscription rates, and defense against new financial news competitors. The fact that the Discovery Channel was ranked as the top brand for overall quality by the EquiTrend brand study for eight consec- utive years since 1997 may explain some of Discovery’s expansions into retailing and additional cable networks.

Brand equity has been the focus of marketing research and advertis- ing research since the early 1990s (Aaker, 1991; Aaker & Biel, 1992; Aaker & Jacobson, 1994; Cobb-Walgren, Ruble, & Donthu, 1995). In general, the topic of brand equity is investigated from either a customer- or firm-based perspective. Whereas customer-based brand equity stud- ies examine the theories and practices that address how consumers de- velop their brand awareness and knowledge, how different marketing programs impact these consumer mindsets, and the relationship be- tween brand awareness/image and behavior, firm-based equity studies emphasize the relationship between marketing programs and equity, the management of brand portfolios or hierarchy, and the evaluation of brand equity with financial valuation such as return on investment (ROI). As discussed earlier, the financial evaluation of brands is a diffi- cult subject because of the current accounting practices that regard brands as expenses rather than assets. The typical financial reporting principle is also inconsistent with the sometimes subjective evaluations of brand value, which are inherently rooted in brand concepts such as identities and images. Nevertheless, Kapferer (1992) suggested that fi- nancial evaluations of brands can be based on costs, comparable market value, or potential earnings. Specifically, a brand’s value may be deter- mined by (a) historical costs, which include all developments, market- ing, advertising, and other communication costs, and (b) replacement costs, which are the estimated costs of re-creating the brand of focus. As we can see, there are a lot of assumptions that would have to be made on the sources of brand value and performance with such an approach. The market value method, on the other hand, determines the value of a brand in reference to the value of similar brands up for purchase. Al- though it might be a useful way of gauging a media brand’s value given that there are many mergers and acquisitions of media properties now- adays, it is important to note that the purchase value is not really the current value of the brand but the anticipated value of the brand when the purchaser uses it. In terms of valuating by potential earnings, Kapferer explained that a firm would have to first isolate the net revenue

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brought in by the brand and then predict its future cash flows. Because of the difficulties of evaluating brand equity using these firm-based ap- proaches, the value of most media brands are assessed from a cus- tomer-based perspective such as the evaluation of brand knowledge (brand awareness and/or image)(e.g., radio stations’ perceptual/posi- tioning studies), brand attitude (e.g., focus group assessment of atti- tudes), or even the resultant brand behavior (e.g., ratings).

THE PROCESS OF BRAND MANAGEMENT

Now that the essential characteristics of branding and the value a firm may garner from branding have been laid out, how does a media firm actually put these abstract concepts in action? How can we study the process and outcome of such practices to understand the dynamics of these concepts? This section discusses the various approaches of devel- oping and monitoring brands in a market context, including how a firm may attach meanings to brands, nurture the brands’ images, formulate a program to manage brands, and adapt its brand strategies to respond to changes.

Branding Through Associations

A firm can develop a brand’s identity through three basic procedures: (a) the selection of a brand’s tangible elements such as its brand name, logo, packaging, and slogan; (b) the association of certain intangible, desirable qualities to the brand; and (c) the execution of a marketing program that presents to target consumers the brand elements and in- tended associations. Although the selected brand elements may di- rectly produce certain primary associations to the product (e.g., the explicit brand name Animal Planet quickly associates itself with the identity of the animal-related programming cable channel), a firm may also utilize the so-called secondary associations to transfer and thus leverage certain benefits from other entities of the brand, given an effective marketing communication program to deliver the association messages. In other words, the process of brand associations is funda- mental to a firm’s efforts to establish brand identities.

Direct, primary associations typically link a brand to product, pricing, distribution, or other marketing communications–related elements. In the context of media products, primary associations may take the forms of content approach (e.g., The Weather Channel), brand name (e.g., Netzero.com), logo (e.g., Disney), delivery system (e.g., DISH Network), and marketing communication campaigns (e.g., AOL—You’ve Got Mail). In addition to or in place of such direct associations based on “own” prod- uct-related elements, a firm may attempt to indirectly link its brand to certain entities with established equities. Keller (1998) suggested eight different means of secondary brand associations: companies (e.g., via

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branding strategies), countries or other geographical areas (e.g., via iden- tification of product origin), channels of distribution (e.g., via channels strategy), other brands (e.g., via cobranding or ingredient branding), characters (e.g., via licensing), spokesperson (e.g., via endorsements), events (e.g., via sponsorship), and other third-party sources (e.g., via awards or reviews). For instance, all Pixar’s theatrical products are stra- tegically associated with the Pixar corporate name, the cable channel BBC America is linked to its product origin, celebrity casts or contributors (i.e., an ingredient in a content product) are often used to give a content prod- uct an identity (e.g., Bill O’Reilly of the Fox News Channel), and awards such as the Emmy’s are now being associated with HBO’s image of qual- ity original programming. Note that there are certain premises for the ef- fective transfer of equity through association with entities other than the product itself. First, the target consumers must have a certain degree of familiarity with or knowledge of the entity. It would be fruitless to asso- ciate a new children’s magazine with an educator that the target segment (children) has never heard of. Second, there must be some meaningful connection between the brand and the associated entity. The secondary association of a basketball player with a sports cable channel would make much more sense than with a business news channel. Finally, the associa- tions must be transferable in the context of the associated brand because certain meanings may not remain strong, favorable, and unique when supplanted from one entity to another. The corporate image of Disney may not be as effective when associated with broadband access services as with a children’s cable network.

Brand Management Programs

The formulation and implementation of brand elements, associations, and marketing communications strategies are an ongoing process that needs the commitment of institutional resources. Brand management also involves various marketing activities in a larger context. In fact, the traditional marketing mix of product, price, distribution, and promo- tion shapes the equity potential of a brand. Thus, marketing programs can be designed to build the desirable brand image. For example, product strategies directly impact brand identity development and the con- sumption experience, which also shape a brand’s image. Pricing and channel strategies again influence consumers’ perception of a brand’s quality and the associated status. Finally, marketing communications programs that utilize advertising, public relations, sales promotion, personal selling, and/or event sponsorship to communicate with target consumers provide the key to leverage both primary and secondary as- sociations for a brand.

In essence, brand management programs involve organizing, plan- ning, monitoring, and evaluating the tangible and intangible aspects of a brand. Specifically, brand managers create and communicate to the

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target consumers about a brand, direct and structure the brand, man- age the brand organization, audit the strength of the brand, develop re- lationships with customers, configure brand portfolios and hierarchy, assess the financial value of the brand, and leverage the equity of estab- lished brands through brand extensions.

Unfortunately, in many media industries, brand management often materializes as tactical sales promotional programs. Chan-Olmsted and Y. Kim (2002) found that most broadcast television managers consid- ered branding a promotional, tactical function (promoting a station and/or its news), rather than a strategic managerial process or asset management. The reason that media brand management is simplified as a tangible identity-building tactic may be attributed to the fact that the concept of media as brands was first introduced only in 1993 (Bender, 1993). In addition, there are some significant differences between branding conventional consumer goods and media products (McDowell, 2006). The first dissimilarity is related to the marketing ele- ment of pricing. Most media brands are not price sensitive because many of them are distributed via an advertising-based business model, wherein the only real “cost” is consumers’ time and attention. The pric- ing issue also means that the consumption process lacks risk. In other words, consumers are less likely to depend on familiar brands to reduce the risk of bad purchases, thus reducing the utility of media brands. An- other distinction is the accessibility of competing brands. For most con- sumer goods, brand trials require time and effort. On the contrary, consumers can sample competitive media brands easily, with a remote control in some cases. McDowell again suggested that the most signifi- cant disparities between consumer goods and media product branding perhaps lies in two characteristics of media brands: (a) essentially all benefits from media brands are intangible associations ranging from at- tributes to attitudinal evaluations and (b) media products are them- selves communication tools capable of self-branding.

The distinctions made thus far point to a few considerations when de- signing a brand management program for media products. First, pric- ing is not an important association entity for most media products. Second, the relevancy of channel strategies varies because of the diver- sity of media products. For most print media, distribution and access methods do not add value to a brand. For electronic media, packager (e.g., CBS or Lifetime) and retailer-exhibitor (e.g., Cox Cable or a local television station) brands might sometimes contribute to or inhibit the building of brand identities or even limit the access to certain brands. Note that the development of digital media distribution systems also in- creasingly enables a direct channel of content distribution to consum- ers, which may require adjustments in some existing branding strategies. Third, product strategies are the core of building media brands. Special attention should be directed to creating intangible pri- mary and secondary associations as well as designing coherent brand hierarchy and corporate portfolios that leverage the equity of successful

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content brands (e.g., Time magazine brand). Finally, media firms should utilize their own marketing communications channels to efficiently carry out self-branding activities.

MEDIA BRAND RESEARCH

Although brand management has been a staple marketing concept in the consumer goods industries for a long time, it has become a term that media firms refer to only in recent years. It was argued that, as a newly introduced business concept (or a newly revised concept that ap- proaches existing marketing practices differently), the branding em- phasis in media industries is expected to be at the level of tactical application in its early stage (Gordon, 1991). That is, media firms would tend to invest their marketing energy and financial resources in more visible, tangible differentiation efforts such as logo designs and brand slogans, which are more comparable with their historical promotional practices but represent a more short-term design and control function than long-term strategic managerial commitment.

Although media firms have initially regarded branding activities as more tangible promotional tactics, they have in fact long practiced a con- cept relevant to branding—positioning. As Ries and Trout (1993, 1997) proposed in their popular positioning series, the objective of positioning was to place products, companies, services, or institutions in the minds of potential customers in a way that differentiated them from the clutter and confusion of the marketplace. Moving from advertising superlatives to marketing comparatives, positioning actually accented ideas that al- ready existed in the prospect’s mind because it is easier and more cost-ef- fective to promote product benefits consumers already believe and accept in a noisy, overcommunicating marketplace. In comparison, brand- ing—which involves multiple components such as brand awareness, brand association, brand position, brand assets, perceived quality, and the name, symbol, and slogan in which the brand is marketed—is closely related to but broader and more strategic in nature than positioning as it is historically defined. Specifically, positioning resembles two areas of branding discussed in brand-marketing literature, brand position and brand association, which refer to anything mentally linked to the brand that affects recall, establishes a point of differentiation, creates positive attitudes and feelings, and provides a reason to buy (Nykiel, 1997). As for differences, whereas the goal of branding is to eventually build brand eq- uity, positioning is relatively a more short-term strategic means to build differential competitive advantages. In addition, positioning focuses on what a marketer does to the “mind” of the prospect rather than to the product itself, which comes under the territory of branding. In reality, a packaged goods brand manager may restage a faltering brand by adding an ingredient or changing the package, while maintaining or refining the product’s position.

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The early studies of media brands did not really investigate the char- acteristics of media brands but simply identified media as “brands” among other products. Owen (1993) noted that NBC was one of the top brands among adults. Based on Young & Rubicon’s brand equity study, Aaker (1996) showed that CNN ranked second and PBS ranked eighth in brand strength compared to all measured brands. Later on, media schol- ars began to contemplate the effects of strong brands on programming practices in electronic media industries. McDowell and Sutherland (2000) found that television program brand equity is revealed in the dif- ferential rating response of a program to its direct competitors and to its lead-in programming. Adopting a more macro approach, the next phase of media brand research turns to the strategic value of branding. Chan-Olmsted and Jung (2001) discussed how television networks use the Internet in order to strengthen their brand images. McGovern (2001) stressed the uniqueness of online branding with an information and logic emphasis. Chan-Olmsted and Y. Kim (2001, 2002) investi- gated the perceptions of branding among television station managers and later compared the PBS brand with cable brands. J. Kim, Sharma, and Setzekorn (2002) provided a conceptual framework for building brand equity on the Internet using a consumer-based model. There are also a growing number of studies exploring the applicability of brand extensions in programming and in the cable network market (Chang, 2005; Ha & Chan-Olmsted, 2001; Landers, 2004).

FINAL THOUGHTS

Brand management concepts provide a fertile ground for theory develop- ment in and analyses of media firms’ market practices. As competition heats up among media firms in an increasingly fragmented and converg- ing marketplace, the nourishing of brand equity, sensible extension of successful brands, and thoughtful management of brand portfolio pres- ent excellent strategic avenues for media firms to create competitive ad- vantages and eventually superior financial returns. Also considering the gradual changes in audience behaviors (e.g., time shifting, active, asynchronized, and multitasking media consumption) and access tech- nologies (e.g., wireless and digital access), media firms need a marketing system that enables them to connect with target consumers so to antici- pate perceptual and behavior changes continuously. However, the brand- ing of media products are challenging because of their diversity, intangibility, and sometimes individuality (e.g., individual programming products). Consequently, many brand constructs may need to be modi- fied conceptually for applications in media industries or measured cre- atively in empirical studies of media products. The development of a media product taxonomy in a brand context may be the first step of tack- ling these challenges. For instance, using a firm-based approach, an anal- ysis of typical marketing programs by types of media products would

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shed light in branding applicability by media characteristics. From the perspective of consumers, investigations of the brand knowledge struc- tures of different media products may provide more realistic parameters for selecting media brand elements and associations. In summary, while there is an urgency to practice branding in today’s media marketplace, there are also ample research opportunities to study the branding of me- dia products as a subfield of media management and economics.

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