Brand Management

Contents

1. Objectives
2. 1 Historical perspective
3. 2 The concept of a brand
4. 2.2 Positioning approaches
5. 2.3 Brand-image approaches
6. 2.4 Added-value approaches
7. 2.5 Perceptual appeal approaches
8. 2.6 Personality-based approaches
9. 2.7 So what do we mean by a brand?
10. 3 Why are brands so important?
11. 4 Brand loyalty
12. 5 The branding cycle
13. 5.1 Research
14. 5.2 Planning the brand proposition
15. 5.3 Implementation—the marketing mix
16. 5.4 Implementation—the communication mix
17. 5.4.1 The brand name
18. 5.4.2 The strapline or slogan
19. 5.4.3 Packaging
20. 5.5 The consumer
21. PowerGen—building awareness through sponsorship
22. Box 20.1 Daewoo—a driving force
23. Goldfish—a new stand-along brand name
24. Box 20.2 Lucozade—a brand reborn
25. 6 The brand franchise
26. 7 Brand stretching
27. Box 20.3 Nivea-the skincare brand
28. 8 Brands as financial assets
29. 9 Brand Equity
30. 10 The growth in own-label brands
31. 11 Corporate brands
32. 12 Global brands
33. 12.1 The product-adaptive strategy
34. 12.2 The proposition-adaptive strategy
35. 12.3 The fully adaptive strategy
36. 13 Brand management and the future
37. 14 Summary
38. Further reading
39. Discussion questions
40. Mini Case: The Rebirth of Rover Cars
41. Marques and brands
42. The process of Roverization

Section: Issues in Implementing Marketing Strategies Objectives

The objectives of this chapter are:

1. to define what is meant by ‘a brand’;

 2. to consider why brands are so important in marketing strategy;
3. to examine what has been the key to the long-term success of some brands;
4. to discuss why it is that brands and branding are most frequently associated with consumer
goods and services;
5. to explain how to apply the branding process in the context of both consumer and non-
consumer goods and services;
6. to investigate how the international dimensions of branding open up new business
opportunities that transcend national frontiers.

1 Historical perspective
BRANDS have been around for decades but they have been a particular feature of the marketing
landscape during the 1980s and the 1990s. For various reasons, which we will examine later,
brands have become a major focus not only of a company's marketing strategy but also of its
financial strategy, as brands have become recognized as part of the key assets that a company
owns. The process of brand building has, therefore, become a feature of marketing activities not
only in the consumer-goods and services sector but in non-consumer areas as well. Many of the
best-known brands go back a long time. Brands such as Coca-Cola, Mercedes, Colgate, Heinz,
and American Express have been household names since the beginning of the twentieth century,
despite significant changes to the products and a considerable widening in the product mix. But
there are also well-known and well-established brands in non-consumer markets as well. Brands
such as IBM, Rank Xerox, and ICI have also been around for over half a century. However, it was
not until the 1950s that branding became a major marketing activity and the concept of brand
management became established. More will be said about the management of brands later in
this chapter. First we must define our terms.

2 The concept of a brand

THERE is no one accepted definition of a brand, only a set of perspectives that share a significant
degree of agreement. However, each view adds something to our notion of what a brand is and
therefore what the task of brand management needs to focus on. We will first review these
differing perspectives and then formulate our own working definition. The different perspectives
can be grouped into six categories:

• visual/verbal approaches
• positioning approaches
• brand image approaches
• added value approaches
• perceptual appeal approaches
• personality approaches
• 2.1 Visual/verbal approaches

In our examples of well-known brands above we noted that it was the name that lived on and not
the products. Similarly, some brands are instantly recognizable by their packaging—for example,
Silk Cut cigarettes. Others are instantly recognized by their symbol—for example, Mercedes. For
these reasons some writers emphasize the importance of the name and visual presentation. For
example, Aaker (1991) defines a brand as: ‘a distinguishing name and/or symbol (such as a logo,
trademark, or packaging design) intended to identify the goods or services of either one seller or
a group of sellers, and to differentiate those goods or services from those of competitors’.

Clearly, these aspects of a brand are important, particularly for the purposes of recognition. They
are also important for legal purposes, as they can be registered, in most countries, on a
trademark register to prevent copying by other companies. Companies go to great lengths to
protect their brand through registration, taking advantage of trademark legislation wherever it
exists.
2.2 Positioning approaches

Other commentators (e.g. Ries and Trout 1986) focus on the need to establish a unique position
in the consumer's mind that distinguishes a brand from the competition. The essence of this
approach is to use the marketing mix to establish a reputation or position as the number one in a
market. The success of this approach depends upon the identification of a gap in the market that
allows a brand to claim the number one position. This is a more holistic approach, which focuses
the whole marketing mix on the effective communication of the distinctive features of the brand
to an identifiable market segment.

2.3 Brand-image approaches

The building of an image is frequently regarded as the main purpose of branding. In this
approach, it is the symbolic aspects of the brand that come to the fore. To quote one writer, ‘the
effort to differentiate the brand is psychologically rather than physically based’ (Frazer 1983).

The need to build a relationship between the consumer and the brand is at the heart of this
approach. To be successful, the brand's image must be based on a clear understanding of the
thoughts and feelings of the target consumer. In so doing, of course, the brand may alienate
some consumers in the process of winning others. However, this approach can lead to insufficient
attention being paid to the need for a product or service to deliver the functional benefits that
consumers have paid for and have a right to expect.

2.4 Added-value approaches

This neglect of the need to meet consumers' expectations is reflected in the value-added
approach, which is based upon the notion of a brand as ‘an identifiable product, service, person
or place, augmented in such a way that the buyer or user perceives relevant unique added
values which match their needs most closely’ (De Chernatony 1992). Apart from expanding the
idea of branding to include people and places, this approach underlines the importance of value
in what the brand has to offer, value that is represented in the unique relevance of the offer to
the needs of the consumer.

2.5 Perceptual appeal approaches

Other approaches to brands distinguish different aspects or components of a brand, each offering
a different sort of appeal. Proponents of this approach suggest that ‘there are three sorts of
appeal; they are all interrelated and each brand has a different blend of the three—an appeal to
the senses, an appeal to reason and an appeal to the emotion’ (Doyle et al. 1974).

This disaggregated approach allows a more precise examination of a brand's anatomy. If the
constituent parts of a brand's appeal can be identified, then it may be possible to build a brand
that more closely meets the needs of the target consumer.

2.6 Personality-based approaches

Since the 1980s, the concept of image has been replaced by the concept of brand personality.
Just like people, brands are imbued with personalities that go beyond the more simple concept of
an image by taking a multidimensional approach based upon appropriate personality attributes
taken from market-research findings. The brand personality has been described as ‘a shorthand
way of describing the nature and quality of the consumer response to a brand’ (Gordon 1991).
For example, the personality of Coke has been carefully built to represent youth, internationality,
and fun, as well as being a refreshing drink—a personality that appeals to a large, identifiable
global market segment with similar needs and lifestyles, transcending different cultures and
income groups.

2.7 So what do we mean by a brand?

From these different approaches, is it possible to synthesize a definition that embraces the
essence of them all? The following may serve as a working definition for the purposes of this
chapter: ‘A brand is a product or service made distinctive by its positioning relative to the
competition, and by its personality in the context of the target market’ (Hankinson and Cowking
1993).

Note, however, that we will define positioning in relation to the brand's point of reference to the
competition only in respect of price or product usage. This is a more precise (and measurable)
definition of positioning than the definition described above and distinguishes positioning from
the brand personality, which represents a unique combination of functional attributes and
symbolic values. Functional attributes describe extrinsic, tangible properties (in which we include
appeals to both the senses and to reason). They include attributes such as ‘hard wearing’,
‘portability’, and ‘cost effectiveness’. Symbolic values include intrinsic, intangible properties such
as ‘fun’, ‘caring’, and ‘internationality’. Some brands are mainly characterized by functional
attributes—for example, Bold, the ‘all-in-one detergent and fabric softener’—while other brands
are largely characterized by symbolic values—for example, Smirnoff Vodka, ‘Pure thrill’. However,
the brand personality may not be enough to differentiate one brand from another. For example,
Gucci shoes may be described as ‘well made’ (a functional benefit) and ‘stylish’ (a symbolic
value), but the same might be said of Bally shoes. What distinguishes Gucci from Bally is price
positioning, with Gucci at the top and Bally somewhere towards the top end of the medium price
segment. Similarly, Muller yogurt may be described as ‘wholesome’ and ‘delicious tasting’
(functional attributes), and ‘natural’ and ‘portraying a life style’ (symbolic values), but the same
might be said of Ski yogurts. What distinguishes these two brands, however, is positioning by
usage. Muller can be perceived as a breakfast food, in competition with Kelloggs breakfast
cereals, and so on, while Ski can mainly be seen as a dessert for children, in competition with
Wall's ice cream or Rowntree's jelly. Positioning, therefore, is distinct from personality, as we
have defined it.

Fig. 20.1 sets out in diagrammatic form the constituent parts of a brand as we have defined
them. These components, positioning and personality (which includes functional attributes and
symbolic values), together form the brand proposition.

3 Why are brands so important?

MILLIONS of pounds each year are spent on advertising and promoting brands, but why? There is
no doubt that strong brands help a company to maintain market share in the face of a changing
competitive environment. Most markets are dominated by two or three well-known brands. It has
been shown that, in turn, a strong market share is associated with above-average profits.
Research based on studies of over 600 businesses over a long period of time, the well-known
PIMS research (Buzzell and Gale 1987), showed that the percentage return on investment
increases as market share increases. In this study, brands and businesses with only 10 per cent
of the market were likely to have only slightly over 10 per cent return on investment, whereas
those with a 30 per cent share or more were on average likely to yield 25 per cent return.

It is probably for this reason that, for many years, strong brands have been the focus of major
takeover bids by international companies. For example, in 1988 the Swiss company Nestlé
acquired the UK company Rowntree-Mackintosh in order to gain a stronger foothold in the
European confectionery market. It was recognized that there were significant financial
advantages in buying brands such as KitKat, Rolo, and Quality Street as a means of expanding
market share rather than trying to increase Nestlé's market share by expanding the sales of its
existing confectionery brands. In 1997 two large multinational companies, Grand Met and
Guinness, announced plans to merge in order to obtain what was seen as the critical mass
necessary to compete in future international markets. The fundamental reason for this continuing
trend of mergers and acquisitions is the belief that it is more cost effective to grow sales from a
known brand than to develop new brands. Thus modern brands have become assets in their own
right. But what do these assets represent?

First of all, they represent Iow-risk opportunities for the manufacturer or service operator. The
establishment of a successful brand requires sustained investment over a prolonged period of
time if the brand proposition is to be embraced by the consumer. The problem intensifies when
the traditional route to the marketplace is through a distribution chain, as it becomes
increasingly more difficult to obtain distribution for new products without evidence that
considerable promotional muscle will be used to move the products from the distributor's shelf to
the consumer. Furthermore, as we have already observed, many markets are now dominated by
a limited number of major brands, which makes it almost impossible for new entrants to gain a
foothold. This is particularly true in static markets in which there is not a lot of scope for product
innovation. As a result, as we have noted, many European and US companies have sought to
reduce the risks of entering new markets by capitalizing on the reputations of existing brands
wherever possible.

Secondly, established brands represent a reduced risk for the consumer, particularly the first-
time buyer. An established brand, by virtue of its existing level of awareness in the marketplace,
offers the opportunity for new products under the same brand banner to achieve high levels of
awareness more rapidly. The use of an established brand name on a new product helps
recognition, thereby reducing the marketing communication cost by capitalizing on the heavy
level of advertising and promotion devoted to the establishment of the parent brand.

4 Brand loyalty
IT is said that brands offer the opportunity to build consumer loyalty. What do we mean by this?
Brand loyalty is about the propensity of a consumer to purchase a brand again. It is usually
measured, therefore, in terms of repeat purchase. Consumers are said to be relatively loyal if
they tend, on average, to purchase the same brand more frequently than competing brands.
Clearly a brand that inspires loyalty in these terms represents a likely income stream for the
future, which is the essential requirement of an asset. There are several levels of loyalty,
however, which makes the estimation of the value of the future income difficult, a point to which
we will return later. These levels of loyalty are represented in the form of a pyramid in Fig. 20.2.

At the bottom of the pyramid are the consumers who exhibit no loyalty at all, the promiscuous
switchers. For various reasons they regularly switch between a wide range of brands. Perhaps
they purchase solely on the basis of price, choosing the best brand offer at the time, or perhaps
they are convenience shoppers, buying on the basis of availability. The latter could, of course,
look like brand loyalty, if the consumer always buys from the same store. In reality, of course, it
would be store loyalty—the two can be difficult to disentangle, as research has shown (Uncles
and Ellis 1989). The second level of loyalty is represented by the constrained switchers. These
are the consumers who have a limited set of brands from which they will choose depending upon
circumstances and the occasion. For example, the brand(s) chosen for general everyday use may
be different from the brand(s) chosen as a present. The next level up are the consumers who buy
the same brand out of habit and have no reason to change—the habitual buyers. These are, of
course, vulnerable consumers from the company's point of view, as they have no reason for their
loyalty; it is passive rather than active. The fourth level are the active loyalists. These consumers
have a reason to be loyal. The reason may be economic, in so far as they cannot afford the more
expensive brands, or it may be functional, in so far as no other brand offers the same functional
benefit, or it may be emotional, in so far as the brand offers the symbolic values that match the
consumer's own profile. The top level of loyalty is the committed. These consumers will buy no
other brand. They are, if you like, the extreme activists. They are also very rare.

In reality, most consumers choose from a short list of brands, depending upon availability,
promotional offers, the desire to change for the sake of change, and so on. The marketing
implications of this fact are very important. It underlines the need to know what makes up the
competitive sets. In terms of our definition of a brand, it means being clear about: the brand's
positioning and pursuing marketing strategies that firmly establish the brand in the consumer's
choice set, accepting that total commitment to the brand is unachievable.

‘Eventually, external search declines and the consumer becomes loyal to a certain brand, which
she buys regularly.’ (Chapter 6, p. 115)

5 The branding cycle

BRAND building, as the responsibility of brand management, is a continuous cycle of research,
planning, implementation, and control. As Fig. 20.3 illustrates, creating a new brand begins with
research and ends its first cycle with the consumer. Thereafter, the cycle begins again, this time
focusing on monitoring research as part of the control process to ensure that the brand continues
to meet consumers' needs.

5.1 Research

Research is needed to identify the needs of the target market, both physical and psychological,
that are relevant to the product in order to help develop an appropriate brand personality in
terms of the physical attributes and symbolic values that match those physical and psychological
needs. The research will also explore product usage as well as the consumer's perceptions of
competitive brands, their personalities, and positionings in order to define a unique proposition
for the new brand in terms of a combination of these components.

5.2 Planning the brand proposition

Crucial to the establishment of a successful brand is consistency in the planning and execution of
each element of the mix, in terms both of the positioning relative to the rest of the competitive
set, and of the two components of the personality, the functional attributes and the symbolic
values, in the context of the target market. It is necessary, therefore, to define simply and
precisely what these are before the marketing strategy is defined. As one writer has put it, ‘To
stand out, you need to have a simple proposition which is easy to understand … Brand
propositions which are complicated or inconsistent will have no chance’ (Davidson 1972).

It is helpful to express the proposition in terms of statements that encapsulate the brand's
central features. For example, for the Sony brand this may consist of the following brand
proposition statements:

• a brand with technological superiority—a functional attribute;

• a brand that is reliable—a functional benefit;
• a quality brand—a symbolic value;
• a brand that is young and fashionable—a target market parameter;
• a brand at the top end of the medium-priced sector—a positioning parameter.

Once these statements have been set down, they become the common criteria against which all
subsequent strategy is tested. They also become the elements that help to unite the team of
professionals involved in putting the strategy together. Unless there is agreement about the key
elements of the proposition, then the consumer is likely to be given confusing messages.

5.3 Implementation—the marketing mix

Successful branding also depends upon defining the correct combination of all elements of the
marketing mix. These need to work together in order to present the target consumer with a
consistent proposition in terms of the personality and the positioning. Other chapters of this book
focus upon elements of the marketing mix. In this chapter we will focus on communications,
noting, first, that it takes more than the communication mix to build a successful brand, and,
secondly, that successful brands are those that not only communicate consistently but also
consistently deliver the proposition that is offered. Failure to deliver will lead to the demise of the
brand, irrespective of how good the communication is.

5.4 Implementation—the communication mix

An essential part of the implementation stage is the communication of the key features of this
unique proposition, through the elements of the communication mix. Apart from advertising and
sales promotion, successful contributions to brand building and brand maintenance have been
achieved through the use of sponsorship, as illustrated by the example of PowerGen (see Insert).

Direct marketing has also been used to help build a new brand. The Daewoo example (see Box
20.1) provides an excellent example of the use of direct marketing, not only to build a new
brand, but also to break new ground in terms of the product category, in that new car marques
had never hitherto been launched by using direct-marketing methods as a key variable in the
communications mix.

Branding is ultimately about communicating the whole of the brand proposition as economically
as possible. Ideally, this means reducing the message to a series of stimuli or triggers. There are
certain key factors that provide the triggers to the communication process. These are the brand
name itself, the slogan or strapline, and the packaging.

5.4.1 The brand name

The brand name is a shorthand device for all that the brand stands for. Not only does it serve to
identify the brand; it should also trigger the brand proposition in the consumer's mind. There are
three alternative naming strategies. The stand-alone strategy, in which the name bears
absolutely no connection with the product. Examples include Persil and Mercedes. The advantage
is that they are absolutely neutral and therefore can rarely become a limiting factor as the brand
franchise grows. For example, the brand name British Telecom was changed to BT in order to
enable the company to extend its franchise globally and to avoid the parochial associations of the
word British. A more recent example of a stand-alone brand name is Goldfish, the credit card,
launched in the UK in 1996 (see Insert).

The second alternative is an associative strategy, in which the name is chosen because it
contributes in some way to the brand proposition. Examples include Wash and Go the shampoo,
and Readybrek the breakfast cereal. The use of such names can sometimes help to distinguish
the brand in the face of a myriad of competing brands. In both these examples the names help to
establish the usage positioning of the brands.

The third alternative is the completely descriptive name, such as Do It All or Super Glue. It is
interesting to note that there is research (Vanden Bergh et al. 1987) to suggest that it is only
these purely descriptive or so-called semantic-fit names that have any effect on the success of
the brand. The success is largely in terms of their aid in recall through their clear linkage to
product usage.

5.4.2 The strapline or slogan

The power of the strapline is evidenced by the familiarity of the following examples of famous
straplines:

• Duracell, the longer lasting battery;

• A Mars a day helps you work, rest and play;
• Coke is it;
 • Have a break have a Kit Kat;
• Heineken refreshes the parts other beers can't reach.

In their own way each of these straplines or slogans evoked the proposition of the brand and, in
so doing, helped to summarize and reinforce the more extended messages that formed the
overall brand-building or maintenance campaigns.

5.4.3 Packaging

Packaging is also one of the ways in which the brand proposition is kept in the forefront of the
consumer's mind. Examples such as Silk Cut and Benson and Hedges cigarettes show how the
use of a distinctive packaging colour can be so closely identified with a brand that its mere
display on a poster without the brand name triggers instant recognition and recall.

5.5 The consumer

From time to time, particularly because of changes in consumers needs and buying power, it may
be necessary to change elements of the mix in order to ensure that the brand continues to be up
to date in terms of what it delivers to the consumer and also in terms of how it is presented to
the consumer. This requires a programme of research to monitor the changing attitudes to the
brand and its competitors. However, any changes must, first of all, be gradual and, secondly, still
conform to the key elements of the brand proposition. The case of Lucozade (see Box 20.2)
shows what can happen if the communication strategy is neglected for too long. In this case the
brand had totally lost touch with changes in the marketing environment and consumers' attitudes
to the extent that the personality required a complete transformation from its old associations
with illness to a modern, and more positive association with health.

The branding cycle, if rigorously and continuously applied, should lead to the clear recognition by
the consumer that the functional attributes and symbolic values of the brand as communicated
via the marketing mix communication mix continuously match their physical needs and
psychological needs. Building and maintaining this relationship over time is the key to the
brand's acceptance and continued success.

PowerGen—building awareness through sponsorship

In September 1989 PowerGen, the largest electricity generator in the UK, signed a contract for
just under £2 million for a year's sponsorship of ITV's networked weather forecasts. As a soon-to-
be-privatized company, created from the old nationalized Central Electricity Generating Board,
the PowerGen corporate brand was unknown to be general public as well as to many large
prospective industrial and commercial buyers of electricity. By sponsoring the weather forecast,
it not only reached these audiences, but also began to build its personality as a provider of
energy to offset the extremes of weather.

Important also was the establishment of a distinct and professional brand personality for
PowerGen prior to its flotation on the UK stockmarket in February 1991 through its association
with the professionalism of the weather broadcasters.

~~~~~~~~

By March 1990 spontaneous awareness had risen from 3 to 37 per cent and prompted awareness
from 39 to 59 per cent.

Box 20.1 Daewoo—a driving force

Daewoo Cars Ltd is the subsidiary of the huge south Korean Daewoo Group—the world's 30th
biggest industrial corporation. The UK business was established in May 1994, with the task of
bringing a range of Daewoo cars to the UK market in spring 1995. The Marketing Director, Pat
Farrell, proved his mettle from the start and used the company's early anonymity to good effect
—the pre-launch campaign focused on ‘the biggest car company you've never heard of’. Daewoo
thus began to make a major impact long before its UK launch.

The new management team were faced with a number of challenges. One, the company and its
cars were an unknown quantity. Two, there was no service infrastructure. And, three, they had
been set the target of capturing 1 per cent of the UK car market by 1997. But, armed with a
blank sheet of paper (literally—the radical new strategy came out of a four-day brainstorming
with the agencies), they developed a strategy that turned these apparent weaknesses into an
opportunity.

In October 1994 Daewoo took the motor industry by storm with its announcement that it would
take control of the distribution chain and deal direct with customers, eliminating dealers from the
equation. Its unique selling proposition was to be the most customer-focused brand in the car
market. As part of a pre-launch campaign, it launched a major survey into car buyers' attitudes.

More than 200,000 people responded to the survey, 200 of whom got a free car to drive for a
year. The survey not only supported Daewoo's feeling that customers begrudge the traditional
high-pressure showroom environment and pushy salesmen; it also threw up new ideas that the
company could build into its marketing philosophy. In addition to the huge publicity, it created a
massive database of prospective customers.

A further building block in its marketing strategy was the pioneering partnership with Halfords,
the components retailer, which provided an instant national service network.

With a range of two models and a fledgling retail network, Daewoo sold 13,169 cars in nine
months in 1995. By the end of 1996 they had achieved the target 1 per cent market share with
35,000 cars.

The strategy, its execution, and Daewoo's spectacular success earned the company the accolade
‘Brand of the Year’ in the UK, and Farrell the highly coveted ‘Marketer of the Year’ award in 1996
from the Marketing Society. Farrell was also judged ‘UK direct marketer of the year’ by UK-Direct,
and Daewoo scooped the Gold Award in the DMA/Royal Mail Direct Marketing Awards.

Goldfish—a new stand-along brand name

The Goldfish credit card was launched by Goldbrand Developments, a joint-venture company
owned by the unlikely alliance of the British Gas holding company Centrica and the US-based HFC
Bank in October 1996. The distinctive functional attributes of this new credit-card brand included
savings on (you guessed it) gas bills, BT telephone calls, shopping at the super-market, Asda, and
the television licence. Its symbolic values include a fresh image and an absence of the stuffiness
associated with some of its rivals. Twelve months after its launch it had gained 75 per cent
awareness amongst consumers and had become the fastest growing credit card in the UK
market. Like Virgin, which is yet another example of a successful stand-alone brand name in
recent years, Centrica, the owners of Goldfish, plan to stretch the brand outside its current
product field into non-financial services markets.

Box 20.2 Lucozade—a brand reborn

Fifty years ago Lucozade was positioned as a sparkling glucose drink to be taken as an ‘aid to
recovery’. As such, its competitive set was ‘over-the-counter’ tonics and medicines sold through
a chemist. Its personality was sickness related, targeted towards children and by implication for
occasional use only. to halt declining sales, a strategic decision was taken to reposition the brand
as a souce of energy for the more health-conscious consumers of the 1980s, a shift from ‘health’
to ‘healthy’. The competitive set hence changed to include other refreshing drinks. Its point of
distinction, however, was maintained through its personality, which retained the functional
attribute of ‘energy’ provided through its glucose ingredient. The first television commercial
featured a housewife getting through her busy day with Lucozade. Follow-up commercials
featured Daley Thompson, the athlete, as a machismo, a symbol of energy. Then the brand was
‘taken onto the streets’ with the introduction of 330 ml. cans, a range of flavour variants, and a
poster campaign that featured the word ‘energy’ as a set of brain-teasing letters: N R G The next
development was to promote Lucozade as a drink for ‘anyone’, as research indicated that the
Daley Thompson endorsement was projecting a male bias. There followed the ‘Energy for the
Human Race’ campaign featured on posters and in the women's press.

Progressively, advertising was used to communicate a changing brand more in tune with today's
consumer and today's lifestyle, while at the same time retaining the core energy-giving values
that remain at the heart of the Lucozade brand personality. As a result, Lucozade in the 1990s
was perceived as a healthy, energetic, funloving drink which all consumers can enjoy.

Source: Hankinson and Cowking (1993).

6 The brand franchise

ONCE a brand has been established, it becomes the strategic launchpad for growth. This is
frequently referred to as a process of building what is called the brand franchise. A brand's
franchise consists of the markets in which it is sold and the range of products and services that
are sold under its name. It is represented graphically in Fig. 20.4 in the form of a matrix. The
brand franchise matrix is defined by two dimensions, product development (or what we refer to
below as brand stretching) and market development.

Along the product-development dimension, the brand is stretched first to include minor product
variations. For example, in the case of a brand of soup this might mean a new flavour. Beyond
the introduction of a new flavour, product development might also include a new form, such as
Cuppa Soups, which were launched successfully by Batchelor's many years ago. Moving further
along this dimension, a brand may then be stretched to embrace related new products. An
example of this from the 1990s was the launch of a range of ice creams by Mars. This was so
successful that it was soon followed by ice-cream versions of other confectionery brands, such as
Crunchie, Twix, and Snickers.

Along the market-development dimension, the brand is launched, first, into new market
segments and then into entirely new markets either at home or overseas. Brands such as
Bacardi, Smirnoff, and Tia Maria are examples of brands that have increased their franchises
largely, but not exclusively, through entry into new markets rather than product development. As
a result, they are now globally distributed brands. In reality, there are very few single-product
brands, but there does seem to be a concentration of them in the alcoholic drinks industry. In
most cases, however, the widening of the brand franchise is achieved through a combination of
both product and market development, as represented by the diagonal arrow in Fig. 20.4. For
example, Dunhill, one of the world's leading luxury-product brands, gradually extended its
franchise along the market-development dimension while at the same time extending its product
range from cigarettes to other smoking-related products (e.g. lighters) and then completely new
products such as clothing and male accessories and cosmetics. This type of growth is also
characteristic of the growth of Japanese brands. Yamaha, for example, has successfully extended
its brand from motorbikes to musical instruments.

7 Brand stretching
THE process of developing a range of products under the banner of one brand name is called
brand stretching. There are certain advantages in this approach to new product launches. First
and foremost, brand stretching enables a new product to take advantage of the already
established functional attributes and symbolic values that make up the personality of the parent
brand, whether that be product specific or corporate. Clearly, the intended personality of the
parent brand should be appropriate to the new product. Secondly, brand stretching can, if done
successfully, enhance the reputation and sales of the parent brand. An example of this is
provided by the toiletries brand Nivea (see Box 20.3).

Brand stretching is, however, not without its critics. It is sometimes argued that stretching a
brand can adversely affect its health (Aaker 1991). Brand stretching the original brand
proposition can result in cannibalization of the original product's sales by the brand extension(s).
It can also dilute the brand proposition such that consumers are confused by what becomes a
more complex personality. However, there are probably as many examples of brand-stretching
successes as there are failures. The important point is to ensure that the original brand is
nurtured. This means, as we have said, periodic reviews of its saliency and relevance to the
marketplace. Brands can quickly become old-fashioned and lose their sparkle. The case of Nivea
is not all success. In the 1970s this brand had to undergo a radical relaunch aimed at attracting
new, younger users, while not alienating the existing ones. This was a necessary prerequisite to
the subsequent brand-stretching programme.

‘Many of a company's offerings, perhaps even all of them, may benefit from a corporate
reputation or brand.’ (Chapter 15, p. 360)

Box 20.3 Nivea-the skincare brand

Nivea, the largest toiletries brand in the world, began life in Germany as a soap manufacturer in
1906. For a long time, however, its reputation, in the rest of Europe in particular, was based upon
the skin formulation, Nivea Cream. The successful stretching of the brand was based on the
careful selection of new products that matched the brand's original personality both in Germany
and the rest of Europe. This was used to evaluate potential product developments. The essential
attributes and values used as the benchmark were as follows:

• other care and protection;

• be simple and uncomplicated;
• be mild;
• have natural active ingredients;
• have a perfume;
• be of high quality;
• give value for money;
• be blue and white (the colours of the parent brand).

Maintaining this personality enabled Nivea successfully to launch a range of sun-care products
that were number two in the UK market in the late 1990s. Meanwhile, in Germany, Nivea
successfully launched a range of haircare products. This was followed by a range of Nivea
products for men. All these developments were a significant step away from the original product.
With the exception of the UK, the sales of the original soap have benefited from these extensions
to the entrant into an already crowded market and the benefits of these extensions were less
significant.

8 Brands as financial assets

BRANDS are valuable strategic assets representing substantial investment, which, over the years
can yield significant income. However, this does not necessarily mean that they can be treated in
the same way as other corporate assets. There has been considerable debate about how far it is
possible to place an economic value on a company's brands that could then be recorded in
published financial statements. The debate has been a very British affair, but it raises some
interesting issues. We can take the debate in two parts.

The first issue relates to brands acquired through takeover. There is no doubt that the reason for
some takeovers, as we have noted, has been to acquire strategically valuable brands. The cost of
these acquisitions has frequently been substantial. As a result of this, companies have tried to
find ways of placing a value on these brands for balance-sheet purposes in order to ensure that
the full benefits of the acquisition are added to the net worth of the company.

Those companies that have done this (and they include companies such as Reckitt and Coleman
and Grand Met) have claimed brands to be assets, which can be clearly distinguished from the
more general goodwill that has been acquired and which can be given a ‘fair value’ in line with
UK accounting regulations. If this claim had not been made, then the brands could not have been
treated any differently from the acquisition of goodwill and would therefore have had to be
immediately written off to reserves, with a consequent weakening of the post-takeover balance
sheet. Treating the brands as separable assets enabled the cost of the brands to be amortized
against future profits, leaving the balance sheet unaffected.

The second issue relates to home-grown brands. The debate here was set alight by RHM (Rank,
Hovis, McDougall) the leading UK flour and foods company, which in 1988 valued all its brands,
both acquired and home grown, for balance-sheet purposes. This practice was later followed by
Guinness, United Biscuits, and Lonrho. Unlike acquired brands, this was an area in which there
were no definitive accounting regulations, although the principle of separably identifiable assets
still held. A subsequent enquiry into the practice of brand valuations for balance-sheet purposes,
conducted on behalf of the accounting profession by the London Business School, came out
against the practice (Barwise et al. 1989). At the end of the twentieth century this issue had yet
to be resolved.

9 Brand Equity
NEVERTHELESS, the concept of establishing a financial value for a brand, in other words its
equity value, remains an attractive one. Notwithstanding the accounting debate, it is useful for
those responsible for brands to be able to place a value on their brands for several reasons.

• It focuses management's orientation away from short-term financial goals towards the
development of a true sustainable competitive advantage.
• It enables an objective Choice to be made between alternative options for the investment of
limited resources.
• It helps management to place a value on potential licensing and merchandising deals.
• It facilitates the evaluation of the potential return on the investment of strategic options
such as brand extensions.

The value of a brand has been defined as the balance of both the assets and the liabilities that
can be directly associated with it. On the assets side we might include such factors as:

• the extent of brand loyalty;

• the perceived quality of the brand;
• the brand's market share;
• the extent of the brand's leadership compared to the number in the market;
• long-term trends in the market;
• the existence and extent of patents and other legal protection;
• the susceptibility of the brand to competition, technological change, etc.;
• average profitability.

On the liabilities side we might include all the costs of maintaining the brand's competitive
position. These can include:

• average annual advertising and promotional costs;

• legal costs associated with the protection of patents, trade names, etc.;
 • the costs of legislative changes—e.g. on packaging;
• directly attributable staff costs.

The major problem with all these eminently sensible assets and liabilities is, of course, the
problem of measurement. All the variables listed above contain, to varying degrees, an element
of subjectivity in their assessment. The fact remains, however, that, without some form of
systematic approach, decisions on the allocation of funds will be subject to hunch and personal
bias. It is not surprising, therefore, that the topic of brand equity and how to measure it has
become a focus for research, particularly in the USA.

‘It is widely accepted that higher-share brands are less “deal elastic”’ (Chapter 10, p. 236)

10 The growth in own-label brands

WITH some exceptions, such as Boots, Sainsbury, and Marks & Spencer, so-called own-label
brands have been a feature of retail shopping only since about the 1970s. Own-label brands,
however, include not only retail grocery brands such as these but also building societies and
banks like Nationwide and Barclays that sell their own products such as life assurance and
mortgages. The phenomenon of own label is not, however, confined to the retail sector.
Wholesalers such as Nurdin and Peacock and symbol groups such as Mace and Spa also sell their
own brands. Traditionally, own-label brands have focused on the functional attributes of the
brand, offering inferior performance at lower prices. More recently, however, own-label brands
have begun to acquire symbolic values. As such they have, in many cases, become the
‘lookalikes’ of manufacturers' brands or ‘me-too's’. In most European countries, the power of the
grocery retailers has become concentrated among a handful of major players, which has added
to the problems faced by manufacturer's brands. Large and powerful retailers such as Sainsbury
and Carrefour have now acquired brand propositions of their own. No longer are own-label brands
regarded as cheap and cheerful alternatives to manufacturers' brands, but arguably, in many
product sectors—for example, chilled foods and dairy products—own-label brands are regarded in
the same way as manufacturers' brands.

The typical own-label brand, however, does not enjoy the same level of promotional support as
its major manufacturer competitors. The brand personality of the retail product brand has, in
contrast, been built up through the development of the corporate brand. This has been achieved
through massive store redevelopment programmes providing h quality environment matched by
quality service. In a sense it has been a focus on the retailer's core product itself, the shopping
experience, which has built the corporate brands of the retailers and provided the means to
endorse own-label brands with a balanced personality, embracing both symbolic values as well as
functional benefits. Such has been the success of this strategy that, not only are some own-label
brands more expensive than their manufacturer equivalents but, as we have noted, some
retailers have now launched their own product brands. For example, Sainsbury's have launched
their own washing powder, Novon, while Boots, the chemists, has its own very successful range
of Natural Collection toiletries.

The growth in the market shares of the own-label brands is in itself evidence of the commercial
power of branding. In this instance, this has been the result of a focus on the development of the
corporate rather than a product brand, which has enabled the retailers to reap the benefits.

11 Corporate brands
IN the case of the retailers, it is the company that has become the brand. Similarly, companies
such as Bosch, Heinz, IBM, and Christian Dior have focused their brand building on their
corporate name and used it across a wide range of products and services. The promotion of
corporate brands increased in the second half of the 1990s, a trend that seems likely to continue.
This trend has been evidenced in the growth in the amount of money devoted to corporate
advertising rather than product or service advertising. There are two major reasons why
corporate brands have become more prominent. The first is in response to the pressure on
companies to behave in a socially responsible way. The UK company ICI provides an example of a
company trying to present a caring image to the world by adopting a slogan ‘world problems,
world solutions, ICI, world class’. Secondly, there have been pressures from stock markets around
the world that have forced companies with significant brand portfolios to raise their profiles as
the owners of these brands. The UK company Hanson found it prudent to undertake a series of TV
advertising campaigns during the 1980s in order, first, to fend off corporate predators and,
secondly, to raise awareness of its success when bidding for another significant brand owner,
Imperial Group.

There are broadly two approaches to corporate branding. The first is what is referred to as the
monolithic approach, in which the corporate name is used across a range of several different
product sectors or market segments. Thus, Christian Dior covers products ranging from
cosmetics to clothing. In other cases, IBM uses its name on all its products from mainframe
computers to stand-alone desktop machines. The most successful implementers of this strategy
include Japanese companies such as Yamaha and Mitsubishi, which have successfully stretched
their corporate brand names from pianos to motor bikes in the case of the former and TVs to cars
in the case of the latter. The weakness of the monolithic approach, however, is that it can stretch
the credibility of the brand beyond belief, as we have already noted. This, of course, flies in the
face of the experiences of the companies we have just mentioned and must therefore be seen as
a point of view rather than a generalizable conclusion.

The alternative to a monolithic approach is the endorsement approach, which allows a more
market-related approach to branding, while at the same time providing the advantages
associated with the use of an established brand name. This approach has been adopted by
Nestlé, which uses its corporate brand name to endorse all its products. Corporate brand
endorsement is, as we have noted, a form of brand stretching, which is particularly advantageous
in the case of new product or service launches, providing, as it does, a head start in the
establishment of awareness and a consequent saving in launch costs.

12 Global brands
WHAT is a global brand? In brief, it might be said to be a brand with a global reputation.
Certainly, awareness is fundamental to the claim to be a global brand. But that merely addresses
the notion of ‘globalness’ and not necessarily the meaning of branding in a global context. Our
definition of a brand as ‘a product or service made distinctive by its positioning relative to the
competition, and by its personality in the context of the target market’, needs to be transposed
into a global context. To be truly global a brand needs more than just awareness; it needs to offer
consumers across the world a consistent (i.e. standardized) proposition, including the same
product formulation or service characteristics. If we adopt this as a working definition, then we
must recognize that it is an ideal rather than something that can ever be fully implemented. Even
Coca-Cola varies its recipe in some areas of the world, but it nevertheless comes pretty close to
our definition. Other brands that come close are Marlboro, Chanel, Gucci, Smirnoff, and
Bennetton. These companies have adopted a fully global strategy, attempting to provide a
common personality and positioning in every region of the world.

The growth in global brands as a way of developing the brand franchise has been stimulated by
improvements in communications and the growth in international travel, which has resulted in
the emergence of market segments with similar demographic characteristics across the world,
such as business travellers. We have also seen the emergence of market segments with similar
cultural preferences manifested in, for example, the Green movement, fast food, rock music, and
fashion. Not all marketing authorities have supported the trend towards globalization. Some have
argued that the fully global brand is a move back towards product orientation, sacrificing the
marketing philosophy of consumer first for the benefits of standardization that accrue to the
supplier rather than the consumer (Levitt 1983c). There is no doubt that many advantages do
benefit the supplier. Global branding makes it possible to sell the same product in several
countries and this makes it possible for manufacturing economies of scale to be realized. Similar
economies arise from sharing the costs of R&D across a larger sales volume. In particular, there
is evidence to suggest that industrial products, consumer durables, and high-tech products are
more likely to provide benefits from such standardization (Rosen et al. 1989). However, it is, of
course, possible to obtain these economies without the establishment of a global brand. A
standardized product sold under different brand names could achieve the same economies.
There are also economies in marketing costs associated with global branding. As long ago as
1983, British Airways ran the same advertising campaign in four different countries in six
languages. This was followed up by other similar campaigns, which have extended into the late
1990s. Campaigns like this must appeal to demands and desires that extend beyond national
frontiers. Coca-Cola is another example that illustrates this property. It may be said to symbolize
‘youth’, ‘fun’, and ‘refreshment’ through a common communication strategy across the world.
However, in contrast to British Airways, this is not based on a single global advertising campaign,
demonstrating that it is possible for global brands to be established and maintained through a
variety of different media and promotional executions, provided the brand proposition is adhered
to in a consistent way.

The fact remains, however, that most brands do not conform to our ideal of a global brand. Most
brands with significant international awareness pursue alternative strategies to the fully global
one that we have described. Hankinson and Cowking (1996) suggest that there are basically four
strategic alternatives. These alternatives are represented in a matrix in Fig. 20.5. A fully global
strategy would use exactly the same marketing mix throughout the world. There are, in fact, few
if any consumer products that follow this strategy, for there are nearly always at least small
adaptations to local matters. For example, it may be necessary to be sensitive to the religious
culture when considering advertising content. Price is often also adjusted to take account of local
levels of prosperity.

For most companies, the process of ‘going global’ is a gradual one. The three alternative
strategies represent starting points in the process of establishing some form of global brand that
offers an element of consistency to a well-defined international market segment. Note that they
are not discrete categories but rather represent a strategic continuum. As we have said, the ideal
is to offer all consumers the same proposition across the world. In many cases, such a
standardized strategy may not be possible, as has been pointed out.

12.1 The product-adaptive strategy

One solution to this may be to modify the product (or service) formulation that forms part of the
functional benefits of the brand in order to cater for the requirements of different international
regions. Examples of such product-adaptive strategies are oil companies such as Shell that offer
different octanes of petrol to meet local differences in usage. This may be said to be relatively
simple to achieve, particularly with a product like petrol whose consumption is totally invisible. A
more complicated example is the case of the Land Rover Discovery, which is offered in different
specifications in different parts of the world. For example, in the Middle East, the market need for
greater power required the addition of a 3.5 litre V8 engine together with more masculine styling
features such as bull bars and side runners. The fact that the product formulation differences
were visible meant that there was a very self-evident departure from the consistency in product
formulation or functional benefits associated with the ideal of the fully global brand.

12.2 The proposition-adaptive strategy

Alternatively, it may be appropriate to modify other aspects of the brand proposition in order to
meet a different marketing environment while maintaining a standardized product formulation.
For example, in Europe, where there is a relatively short list of branded jeans, Levi jeans occupies
a high price positioning, has a fashionware product-usage positioning, and a ‘sophisticated’
personality. In the USA, however, Levis are positioned as a medium-priced brand with a less well
distinguished personality in a much more crowded market. Nestlé operates a proposition
adaptive strategy as regards its Nescafé brand of instant coffee. It has different products on offer
in different countries as well as different brand propositions. In the UK, for example, it has been
associated with a fast-moving lifestyle (and similarly in France), while in Spain it is associated
with its taste and aroma. The proposition-adaptive strategy is frequently a more significant
deviation from the global brand ideal, as it results in different functional attributes and symbolic
values in different regions of the globe. This inevitably prohibits some of the benefits of
standardization referred to earlier.

12.3 The fully adaptive strategy

The final strategic approach is to adapt any aspect of the brand, be it product or proposition
related. The brand name may, however, be retained. In this case market conditions vary so much
that the benefits of a country-by-country or region-by-region approach outweigh any advantages
from standardization. In other cases, the strategy may reflect historical circumstances.
Companies that have grown by acquisition frequently find themselves with a portfolio of local
brands and choose not to impose a standardized global identity but rather to preserve the
strengths that their local brands have in local markets. An example of this approach is H. J. Heinz,
which, despite being an internationally recognized brand, nevertheless reports that 65 per cent
of its sales come from products that do not carry the Heinz label. Some companies are now
beginning to move away from the fully adaptive strategy. An example is again provided by
Nestlé, which has attempted to establish a global brand through universal endorsement of all its
acquired brands with the Nestlé label.

13 Brand management and the future

AS we said at the outset of this chapter, brands have been around for a very long time. As long
ago as the end of the nineteenth century brands were becoming established as part of the
commercial landscape. At this time brand building was usually the responsibility of the owner
entrepreneurs. Brands such as Coca-Cola, Gillette, Rolls-Royce, Cadbury, and Heinz were being
promoted in this way—the personal influence of the ‘man at the top’. These brands flourished
because of the energy and enthusiasm and status of their owner-entrepreneurs. As the brands
became successful and their companies became more complex, the responsibility for the brands
became more fragmented and ‘slipped a notch’ in the hierarchy. The role of the owner-
entrepreneur was taken over by a team of ‘functional specialists’ occupying middle and upper-
middle management positions (Low and Fullerton 1994). They behaved quite differently from the
one-man ‘brand champions’ of the earlier period, relying more on teamwork than vision and
entrepreneurship. It was not until the late 1950s that the concept of a brand champion returned
and what we now call the brand-management system began to develop. However, even this now
well-established system is coming under attack.

In companies for which brands are a central part of their business, the way in which they are
managed is a crucial issue. What we have said so far about brands and brand building has largely
ignored the managerial dimension, yet people are at the centre of a brand's success or failure.
The way in which they are organized is of crucial importance to the continuing growth in the
brand's franchise and its value as an asset. It is worth spending some time, therefore, on the
issue of brand management.

The perceived advantages of the so-called brand-management system were that it represented a
return to the concept of a brand champion whose role was to lead and coordinate all aspects of
the brand-building strategy. The problem with the management of brands by functional
specialists was that, while specialists gave their attention to a range of brands, no one had
overall responsibility. Moreover, no one had a clear vision of what each brand stood for—that is,
the brand proposition. Under the brand-manager system, the brand manager, in contrast, was
the guardian of the brand proposition and could, therefore, ensure that the advertising agency,
the market-research agency, and all the Other necessary inputs into a successful brand-building
programme worked together to nurture and grow the brand franchise. However, this system also
came under attack in the second half of the 1990s.

Research indicates that in the 1990s the management of brands, at least in the UK, fell short of
the original concept of the brand-manager role as brand champion and the focus of corporate
resources (Hankinson and Cowking 1997). The indications were that the management of brands
had again become a fragmented process involving a range of individual experts rather than
focused around one person. What seemed to be happening was that new areas of marketing
such-as trade marketing and database marketing had developed, and the management of these
functions had been the responsibility of functional specialists who were operating at arm's length
from those responsible for the management of the company's brands.

In future, the nature of brand management is likely to become more fragmented. In order to
ensure the continued success of a brand, it will be necessary for those with brand-management
responsibility to have a greater understanding of the newer areas of marketing and to participate
in teams as guardians of the brand proposition. The way in which brands are managed will
continue to change, but the essence of a brand will not. The centrality of a simple, consistent
brand proposition will remain the key to a brand's continued success.

Brand management is changing in other ways as well. First, as we have noted, there is a trend
towards corporate branding driven by globalization and the need for large corporations to
publicize the extent of their brand portfolios to the financial markets. This will require a greater
cohesion between the various levels in the brand-management hierarchy. The development of
corporate brands will inevitably move the responsibility for brands towards the top of the
organization. Secondly, the continued growth in global brands is likely to increase the need for
greater integration of brand-management responsibilities and greater coordination in order to
secure a consistent execution of an agreed global strategy. This may once again require changes
to the organizational structures to underpin this, as the Smirnoff case study illustrates.

14 Summary
BRANDS are now a central feature of consumer marketing to the extent that they have become
assets in their own right, which has made them the focus of financial takeovers and corporate
growth. In this chapter we have explored what we mean when we talk of a brand. Although
different authors differ in their emphasis, successful brands are perceived by consumers as
distinctive and different from their competitors through their personality (a mixture of functional
benefits and symbolic values) and/or through their positioning in terms of price or usage.
Together these form the brand proposition. In short, brands are about building a long-term
relationship with the consumer, irrespective of the type of market. While much attention has
been given to consumer brands, it is important not to forget that branding is equally important to
the building of reputations in all other markets including services and industrial products. During
the last two decades of the twentieth century the principles of branding were successfully applied
to the transformation of some own labels into retailer brands as well as the development of other
corporate as opposed to product brands. Investing in a brand builds consumer confidence and
loyalty and allows the company to stretch the brand-proposition cost effectively to other products
and services.

Successful brand building requires a consistent and sustained strategy over the long term. The
branding cycle begins with a clear statement of the brand proposition, which can be
communicated through the marketing mix. The brand proposition is also used by successive
members of the brand-management team to maintain and develop the brand franchise by
extending the range of both the products and the services as well as the markets over which the
brand is recognized. Some brands have managed to extend their franchise globally, but this is
not always the most appropriate strategy. Despite the emergence of similar market segments
across the globe, there are very few truly global brands. Clearly the more standardized the
marketing and production of a brand, the greater are the economic benefits. However, most
internationally recognized brands have found it necessary to modify their offering or their
proposition in response to local conditions in order to be successful.

A much-debated aspect of brand management has been the topic of brand equity or the value of
brands. It has not been possible to explore this debate fully in this chapter and the reader is
therefore referred to the list of further reading. Suffice it to say that the debate is not merely
about whether it is appropriate to value brands for balance-sheet purposes; indeed this is to
some extent a very British issue. More important is the value to be placed on brands for
marketing purposes. Which brands should be invested in, which should be divested? How much
do we charge to a company wishing to market the brand under licence? The notion of brand
equity remains an area of marketing controversy.
Finally, what about the future? The marketing environment of the future is likely to become more
international and dominated by large multinational organizations. This is likely to impact upon
the management of brands in two ways. First, we are already seeing the growth in international
brands, both through companies acquiring other companies and their brands, and through the
development of common advertising and promotional campaigns across international frontiers.
Secondly, we are seeing the growth in corporate brands, both as a means of linking different
product brands under a corporate umbrella and as a means of stretching the brand franchise. A
further development has been the impact of new areas of marketing such as trade marketing and
databased marketing, which have grown largely outside the remit of the average brand manager.
These trends are provoking widespread discussion about the way in which brands should be
managed. What is likely to emerge is difficult to predict in detail, but one development is certain
and that is the raising of brand-management responsibility to a more senior level in most
organizations.

Further reading
de Chernatony, L., and McDonald, M. (1998), Creating Powerful Brands (2nd edn; Oxford:
Butterworth-Heinemann).

Ind, R. (1997), The Corporate Brand (London: Macmillan).

Kapferer, J.-N. (1997), Strategic Brand Management (2nd edn; London: Kogan Page).

MacRae, C. (1996), Brand Chartering (Harlow: Addison Wesley Longman).

Pearson, S. (1996), Building Brands Directly (Basingstoke: Macmillan).

Discussion questions
The following questions are intended to help you think through the material in this chapter. To
test your understanding, you might find it helpful to answer the questions in the context of the
Rover case study below. The questions are intended to encourage this.

1. Do you agree with the definition of a brand used in this chapter? Try and analyse the
component parts of the Rover marque/brand proposition in terms of this definition or your
preferred definition.
2. Think of some strong, successful corporate brand. How are its brand propositions
communicated? Is Rover a product or a corporate brand? If you have difficulty with this, have a
look at Ind (1997).
3. Do you agree that there are very few truly global brands? How far can Rover be described
as a global brand?
4. Japanese companies, such as Yamaha, provide some of the best examples of brand
stretching. Why do you think this is? Do you think the Rover brand could be stretched?
5. Can successful brands be developed other than by advertising? What other factors were
instrumental in the successful relaunch of the Rover marque?

Mini Case: The Rebirth of Rover Cars

‘When Austin Rover became Rover Cars on 4 September 1988, it was most definitely not a
cosmetic name change but the culmination of a total marketing strategy.’ So said the then
Marketing Director of the Rover Group in a speech shortly afterwards.

The company's philosophy hitherto had been biased towards producing cars they wanted to
build, that fitted their financial and industrial plans. There was no clear insight into the marketing
opportunities of the company or how to focus all the efforts of the company in the right direction.

All this changed to some extent during the early part of the decade, but took on a major impetus
with the appointment of Sir Graham Day as Chairman of the Rover Group in May 1986. With a
Chairman committed to marketing, the process of moving from a product orientation towards a
consumer orientation took on real meaning. Indeed, one of Sir Graham's favourite expressions
was ‘if you love the consumer to death, you can't go far wrong’. Clearly in a company where the
chief executive officer is not fully committed to marketing, effecting significant change quickly
enough becomes almost impossible.

At Rover, a fundamental change in strategy was developed, known internally as ‘Roverization’.

The key to developing a new strategic approach was to develop a full understanding of how
consumers purchase cars-establishing the complex relationships between marque and model. A
buyer behavioural model was developed that, in its most simplistic form, showed the two crucial
stages in purchasing a car: getting on the short list and final product evaluation. Typically,
consumers shortlist a number of cars by first considering the desirability and imagery of the
marque and then by looking at the car's brand image—what does the car say about the person
who drives it?

Some of the basic information that was used in developing the strategy was obtained through
extensive consumer research, as summarized below.

Marques and brands

The first findings in 1987 related to brands. The company had a confused image—a schizophrenic
blend of Austin and Rover, saying nothing particularly well to consumers individually or together.

Austin was seen as an essentially negative badge and acted in reality as a barrier to purchase.
Consumers saw it as being dull and uninteresting, overtly practical and functional, with the
virtues of space and economy, but unreliable and for older drivers—aged 55 or more. Not a
particularly dynamic base to work from.

Rover, on the other hand, had some genuine qualities. It was seen as prestigious, a quality car,
traditional, and original. However, it was also seen as being unreliable, uneconomic, and for older
drivers, and, of course, its associations with Austin also had an undesirable effect on its own
image. The position was worse when you consider that four of the six models at that time were
badged Austin and accounted for around 90 per cent of sales.

So, at the end of the day, Austin Rover products were less likely to get on the shortlist because of
the poor marque image and poor brand image. No matter how good the product was in reality,
Austin Rover cars were less likely to be chosen than those of the major competitors. For example,
the Montego was, in reality, a superior product to the Cavalier and Sierra: it accelerated faster,
had a better top speed, was better equipped, and had superior handling. But in the consumer's
mind it was just a car from Austin, in the medium price sector, that did not rank alongside the
others.

In general, marques could be divided into two main types: first, those with a strong reputation for
reliability, technology, and, engineering excellence, seen as being quality marques; and
secondly, the higher volume marques, not known for their quality and reliability and seen more
as managerial marques, in a fleet context.

Amongst the quality marques, some offered both emotional and rational reassurances. These
marques were seen as having high status at Iow risk and typically included BMW, Mercedes, and
Saab. If, however, a quality marque was overtly practical and Iow on emotional support, it was
seen as being Iow risk, but this time with lower status. This was best exemplified by Volvo.

Looking at the managerial marques, those that offered practical strengths were seen as lower
status but with Iow risk. These included Ford and, to a lesser extent, Vauxhall.

Marques with high emotional and limited rational appeal were seen as high status, but a high
risk. In 1987 Rover was seen to be in this category, together with the French and Italian
executive cars.
The process of Roverization

The company's first steps were to address the gap between perceptions and reality on the
Montego, introducing changes to the product that were in line with what customers wanted and
communicating this with high-quality, vibrant advertising on TV, in the national press, and at the
dealer level. Next, plans for future products were reviewed to ensure new models in the pipeline
were truly worthy of the Rover name—that they would meet and exceed customers'
expectations. The results became evident in brands such as the Rover 200 and 400, which
commanded the high ground in the medium-car sectors.Image-building niche vehicles were
added to the range-for example, the Rover 220 GTi sports flagship, a Cabriolet (applauded as the
best convertible in this market segment), and, in late 1992, the Rover 200 Coupé.

Other successes followed. The Rover Metro, launched in 1990, achieved the accolade of the ‘best
small car in the world’. Customer research showed that the new Rover 800, launched in 1991 to
complete the portfolio of new Rover brands, raised owner satisfaction to new highs and was a
fundamental step in the next phase of Roverization—to continue to build the Rover marque
values. Reintroduction of the Rover grille, the essence of the company's heritage, played a key
role in establishing the Rover 800 as the flagship for the Rover marque. The Rover 800 Coupé,
yet another new product, not only competed further upmarket than any previous Rover, but also
raised the profile of the whole company. The result was to get customers who would never
previously have considered a Rover of any type to take the marque seriously.

Source: Hankinson and Cowking (1993).

Oxford is a registered trade mark of Oxford University Press in the UK and in certain other
countries

Published in the United States by Oxford University Press, Inc., New York

© Oxford University Press 2000

By Graham Hankinson

Edited by Keith Blois