WHAT ARE BRANDS GOOD FOR?BASED ON NIRAJ DAWAR’S MANAGEMENT REVIEW, MIT SLOAN

A presentation by Shalvi Rathi,MNNIT Allahabad

Marketing internship 2015 under Prof. Sameer Mathur,IIM Lucknow

www.IIMinternship.com

The power of BRAND Over time, as consumers come to associate a brand with a specific benefit, the brand acts like a stake in the ground, claiming territorial rights over its value proposition.

Over the years, brands have made an impact on our minds so strong,that we unconsciously prefer branded over unbranded.

Brands have become a part of us. We associate ourselves with them.

Aggregating customersReaching large number of people with a promise to deliver a clearly stated benefit that sets it apart from competitors.This is the source of brand power.

But a new trend has been observed over the years..

Consumer DisaggregationUnder the influence of the information rich environment, the companies are disintegrating the consumers on various levels and are interacting with them at the segment or even individually.

Many of the strategic and tactical tasks entrusted to brands can now be performedbetter, less expensively and more profitably at the level of consumer segments.

But how is disaggregation doing it better?

For that we need to examine the following core areas of

BRAND MANAGEMENT:

Brand Management

Consumer Relationship

Channel Relationship

Brand management Organisation

1.Consumer Relationship

STRATEGIC TACTICAL

1.1Strategic Consumer Relationship

1.1.1 Building a Relationship: Earning trust and credibility

1.1.2 Communicating a Key Benefit: Staking a Position

Company Consumers

1.1.3 Charging a Price Premium

1.2 Tactical Consumer Relationship

1.2.1 Driving Trial and Traffic andIncreasing Sales Volume

1.2.2 Building the Likelihood ofRepurchase

1.2.3 Responding to CompetitiveMoves

2.Channel Relationship A dramatic change has been in the remarkable rise ofthe retailer. The source of retailers’ power today is not just theirincreasingly large size and concentration; it is in the way theynow define their business.

Retailers argue that the economics of disaggregation favor them and that they have greater credibility in assembling an assortment of brands that makes sense for the consumer.

Manufacturers VS Retailers

Retailers’ understanding of brands has always been

differentfrom that of the

manufacturer. Retailers used to view well-known brands such as Coca-Cola and Tide

as magnets to attract consumers to the store

3. Brand Management OrganizationBrand management systems were designed for an era of mass marketing and are not well suited to making good use of the tidal wave of valuable consumer information.

Brand-management organizations areproving to be an impediment to the adoption of consumer-level disaggregation initiatives.

Disaggregation impact on Brand management:

1. Organization Structureand Leadership

Brand Management

Managers or teams are assigned to product

categories or brands.

The quarterback who brings company resources together to focus on the market is the product or brand manager.

Disaggregate Marketing

Managers or teams are assigned to segmentsof similar consumers.

The quarterback whobrings company resources together to focuson the market is the segment manager.

2. Key Business Measures

Brand Management

Success is measured by volume of sales, dollar sales, market share and brand or product profitability.

Disaggregate Marketing

Success is measured by customer-level or segment-level profitability and depth of relationship(share of wallet).

3. New Product Developmentand Innovation

Brand Management

Developing and testing of products based on product-related competencies.

Disaggregate Marketing

Developing and testing products on the basisof segment needs.

4.Key Brand ManagementActivities

Brand Management

Brand-led copy development; brand-level promotional activities to boost volume or market share; trade marketing support; coordination with advertising agency.

Disaggregate Marketing

Segment-driven cross-promotional opportunities;coordination of communication of multiplebrands

Take aways:

Aggregating consumers-The traditional environment

Disintegrated consumer-The new environment

3 core areas of brand management:

Consumer relationship

Channel Relationship

Brand Management Organisation

Thank you !