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Strategic Branding: Functional Branding

In the previous session

• Introduction to branding

• Commodity -> brand • Brand (trademark)

not the same as branding

• Brand equity

Branding strategy

A branding plan establishes the goals, strategies and tactics to position the brand in customers’ mind. The plan allocates resources and provides guidelines for measuring success.

1. Leads to a differential advantages over competitors

2. Sustain over time 3. Enhance firm performance 4. Customer centrality 5. Guides decisions and actions

Brand strategy

Strategy

Strategy is the intelligent allocation of resources

through a system of activities to achieve a

goal.

Inspired by military strategy

The idea derives from the military principle of force concentration. The practice of focusing a military force so as to bring to bear such overwhelming force against a portion of an enemy force.

Gain competitive advantage By concentrating marketing efforts on the category, the firm gains a competitive advantage. Concentration of marketing efforts is the goal; segmentation is the tool.

Common missteps of strategic planning

1. Confusing Strategy with Tactics: A strategic plan outlines sustainable competitive goals, while the tactical plan details day-to-day actions. The successful marketing plan needs both.

2. Unrealistic: strategic planning is useful only if it realistically addresses the capabilities of the firm.

3. Too much analysis leads to paralysis: Planning is valuable, but time is also valuable.

4. Assumptions about consumers: Market research can help for adjusting to the evolving tastes of consumers.

Eisenhower on strategy

“In preparing for battle I have always found that plans are useless, but planning is indispensable.”

“In battles, however, the other fellow interferes all the time and keeps up-setting things, and the best generals are those who arrive at the results of planning without being tied to plans.”

Dwight Eisenhower

Firms divide the market into homogeneous segments to better understand the needs and wants of each one. The logic is that firms can design products and services that meet those needs and facilitate reaching the target segments.

• No product or service appeals to all consumers • Firms have limited resources

Effective allocation of resources Dr. Carlos DIAZ RUIZ.

Brand Positioning

Once the company has identified the segments and chosen which segment or segments to target the final step is to decide on, what position it wants to occupy in those segments.

Positioning means creating differentiated offers including persuasive reason why the target market should buy the product or products (Kotler and Keller, 2009: 308).

1. Understand what the target customers believe to be most important when purchasing.

2. Develop an offer catering specifically to the customers’ preferences.

3. Evaluate images perceived of the competing products in the category

4. Create a credible image that differentiates from competing brands on the basis of the preferences of the target customers.

5. Communicate the offering to consumers, often through media.

( Dibb and Simkin, 1996: 18)

A single offering regardless of differences between the segments and targets. The company focuses on the similar needs of the customers rather than the differences.

The firm targets several market segments with offers specially designed for each. Arguably, the company may have stronger position within each market segment.

The company chooses one segment. Involves going after a larger share of one or a few segments

Targeting

Concentrated

Undifferentiated

Differentiated

The idea in short

Differentiation, targeting, and positioning allow for a focused offer and persuasive communication.

Differentiation

The marketer produces two or more products that display different features, styles, quality, sizes

Targeting The marketer distinguishes among a variety of market segments, chooses one or more of the segments and then develops products customized to each segment

Functional branding

Four types of strategic branding 2. Emotional “relationship” branding

Anthropomorphic relationships that

“connect” with the consumers’ hearts. The point is to forge durable relationships between brands and consumers.

Associations of the functions of the product in the mind of consumers. This elevates the product or service from commodity to differentiated offering.

1. Functional branding

Formation of trends. Formation of preferences by surges of popularity. Consumers advocate the brand.

3. Viral “cool” branding

Formation of cultural icons. Performing a myth that addresses an acute cultural contradiction.

4. Cultural branding

Functional branding

The ‘relative competitive comparison’ as perceived by the target audience, e.g., Colgate = White teeth.

Commodity: toothpaste

Branded product

Function: whiten teeth

Brand knowledge

• What is the competitive environment?

Benchmarks • Who are the main competitors? Positioning maps • How are the brands similar? Point of parity • How are the brands different?

Point of difference

Brand knowledge

Brand knowledge

Brand awareness

Brand image

Brand recall

Brand recognition

Brand associations

Association types

Association features

Attributes

Benefits

Attitudes

Favorability

Strength

Uniqueness Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of marketing , 57 (1) , 1-22.

Brand knowledge

Brand awareness

Brand image

Brand recall

Brand recognition

Brand associations

Association types

Association features

Attributes

Benefits

Attitudes

Favorability

Strength

Uniqueness Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of marketing , 57 (1) , 1-22.

Brand knowledge • Awareness is the likelihood of

identifying a brand under multiple conditions

• We create awareness by linking brand elements

Brand knowledge

Brand awareness

Brand image

Brand recall

Brand recognition

Brand associations

Association types

Association features

Attributes

Benefits

Attitudes

Favorability

Strength

Uniqueness Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of marketing , 57 (1) , 1-22.

Brand knowledge

• Benefit = “Designed for Driving Pleasure” • Attributes: I3 driving assistant, connectivity,

Differentials, Adaptive suspensions, Teptronic transmission, etc.

https://www.youtube.com/watch?v=TBFUk5EvfA c

Keller, K. L. (2009). Building strong brands in a modern marketing communications environment. Journal of marketing communications, 15(2-3), 139-

Brand resonance pyramid

155.

Functional branding process

Functional branding process Objectives

Generate long-lasting barriers to competitors

Position the brand in the mind of consumers by reinforcing associations 3

Define the brand’s competitive advantages: Benefits and attributes

Create associations to its points of parity and difference 2

Provide an anchor point for linking meaning

Build brand awareness 1

https://www.youtube.com/watch?v=vQXvyV0zIP 4

https://www.youtube.com/watch?v=xWsn6-m03C c

Limitations to functional branding?