Rajagopal. Marketing Dynamics: Theory and Practice

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Marketing Dynamics: Theory and Practice

BRAND CATEGORIES

Strategically the brands are managed separately and independently. On some occasions, the brands

are introduced in the market on adhoc basis. This strategy requires decision making to allocate

appropriately the resources to the identified brands. The brand personality is the core-measuring tool

of the brand management exercise. The brand management broadly consists of the following activities:

• Brand launch

• Brand leverage

• Brand equity and

• Brand loyalty

A strong brand is a valuable asset and its management should include proper positioning along

with visual presentation of the brand image through the trade mark and trade dress. A trade dress of

the brand is its nomenclature symbol style and colours put together on the product package. The

trade dress of the brand need to be registered to protect imitations. The brand management strategy

consists of five major constituents as exhibited in figure 3.4. The brand equity consists of the strength

of the brand along with the brand presentation strategy and its association with the user groups. The

brand equity is largely reflected in the market behaviour comprising market share, price, perceived

quality, distribution efficiency, and consumer loyalty and promotion strategy. The brand leveraging

may be defined as an exercise using an existing brand name to enter a new product category. Brand

leveraging is potentially very attractive. It makes use of the existing consumer awareness, good will

and loyalty. Such exercise of brand positioning is cost effective and reflects greater emphasis on

brand. The Procter and Gamble adopted a brand leveraging strategy in the introduction of its sanitary

hygiene product Always. The P&G adopted similar strategy for introducing the liquid detergent Tide

as a new category of product. In order to implement an effective brand strategy, it is necessary to

identify an appropriate category of branding. Multinational companies in a competitive environment

adopt the following brand strategies.

• Specific product branding

• Product line branding

• Corporate branding

• Combination branding

• Private branding

Brand leveraging strategy by a company may be adapted through extending the product line

category. The new product line can be formed by stretching it to cater the mass or class market

consumers. Sometimes the companies prefer to form a new product line instead of stretching the

existing product line vertically or horizontally. The co-banding or brand hiring strategies also provide

the brand leverage which may give opportunities for more franchising and better sales promotion

of the products and services. Whenever a new product line of the company is developed, it should

be decided whether a new brand name has to be given the products thereof or use an existing

names. The example may be cited of Coca-Cola Company when it first developed the diet cola

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drink; it chose to use a new name tag instead of

capitalizing on its existing consumer brand to promote

franchise by using the Diet Coke. However, later in

competition to Diet Pepsi the Coca-Cola Company

countered its rival by using Diet Coke which is one of

the best seller products now in the market. On the other

extreme the company could have introduced a new brand

in a new category, and presented it in the market as a

solely new product. The family brands are group of

products sold under one label by a single company. Heinz,

Del Monte and General Electric (GE) endorse a wide

array of products with their own corporate name while

the consumer goods companies like Proctor and Gamble

(P&G) and Nestle prefer to use separate brand names

for each product. The P&G has eleven brands in the heavy-duty detergent category in the United

States of which two brands Tide and Ariel are best sellers in India. The US brands of P&G in this

category are Cheer, Bold, Gain, Era, Dash, Oxydol, Solo, Dreft and Ivory Snow including Tide and

Ariel. The family brands have the advantage that advertising for one brand promotes the sales of

all products carrying that particular label or attributes. The family brands also make it easier to

introduce new products to the distribution channels and consumers. However, the family brands

offer a narrow distinction among the products of the same category and it is difficult for the

product manager to create and maintain an identity for each product and then tie them together

with a unifying trade name. This strategy is used by the General Motors as their cars are promoted

under their own names and the GM symbol is used as common point of reference in marketing the

products.

A brand may help in gaining competitive advantage but need to be carefully architected.

Wal-Mart has emerged as a strong retail brand with emphasis on everyday low prices. The

strategy could be difficult to pull off, since the stronger, lower-price retailers are expanding in

a long-term effort to take a bigger share of the retail pie. Having less inventory can certainly

help profits, but it’s no sure bet. While too much can hurt gross margins, due to added

markdowns, too little can limit selection and hurt overall sales. Because expenses are being

spread over less revenue, retailers risk hurting operating margins. Of course, the discount

retailers that are expanding aggressively could easily overplay their hand. But retailing is

much like a zero-sum game, with one player taking share at the expense of another. With

consumers running out of steam, they’re more likely to choose lower-price formats, to save

money. Retailing was once a stay-at-home sector. Most of the companies including Wal-

Mart were content to grow at home. Universally appealing product assortments are difficult

to create, and far-flung, people-intensive retail operations are tricky to run. Since the mid-

1990s, however, retailers have come under intense pressure from their shareholders to grow

farther and faster, expressed in high share prices. How brand can be used a strategic tool to

gain competitive advantage, the question remains for a secured growth?

National brands are identified as long standing in the competitive markets and wide spread

distribution over the spatial and temporal market segments. The national brands are not very sensitive

Figure 3.4 Strategic brand

management

Major Constituents

mana

emen t

Brand

launch

Brand

leverage

Brand

equity

Brand

stem

Brand

alt

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Marketing Dynamics: Theory and Practice

to the price gaps and the private labels. When a firm markets another brand in the existing category

and protects its market positioning, the product is defined as flanker brand. The flanker brand is also

known as fighting brand. Such brand has low investment on advertising and the product is offered on

cost price. The American Express sells its premium priced products as green, gold and platinum

credit cards and the card named as Optima was brought to the market by the company as a fighting

brand. Such brands outwit the competing brands in a cost effective way. The private brands are

more sensitive to the personal income and most of the retail stores set such brands for selling their

grocery and consumer goods. The store based private labels or brand offer a number of advantages

with high margins.

BRAND DRIVERS IN INTERNATIONAL MARKETS

Brand Timing

This refers to the creation of a marketing opportunity. Equally it can be the ability to recognise

and exploit a shift of some kind. Shifts may result from a number of factors such as technology,

consumer changes, etc. International brands look to implement central developments very quickly.

As a result of the acceleration of the product development cycle, marketers must maintain competitive

advantage for their brands with a rapid roll-out of new developments. The importance of strategic

innovation is highlighted. Examples of this strategy are McDonald’s vegetable burger, Adidas’ Feet

You Wear communications or Levi’s Dockers. The use of global communications media facilitates

the rapid roll-out of initiatives across countries.

Positioning

Consistency of positioning appears to be an essential criterion for success in this area. Some of

the more successful brands are able to translate and adapt a central guiding theme such as Just Do

It or Always Coca-Cola. The central theme allows the brand values to be maintained and updated or

refreshed regularly. In this way, they act as a guide for the brand. Nevertheless, there is still the

possibility to express the positioning locally but within the framework of a central strategy. A brand

such as Levi’s or Nike is able to set the tone for the category. A challenger brand will either have to

accept this vocabulary or compete in a new field. An example of the latter is Diesel, a brand that is

defining itself rather than mimicking the brand leader. However, even leader brands have to be

refreshed and updated. Both Nike and Adidas have been in this position in recent years. In both

cases, they were revived by a return, not just to the core sporting values but with a premier sports

positioning.

Localization

In the past, brands were often global through a central strategy or they were very decentralised.

The former was more efficient but insensitive to local conditions, the latter far more sensitive but less

able to take advantage of economies of scale. In the 1990s, we can observe a greater degree of

localisation whereby a brand conforms to a central strategy but one that can be adapted locally. This

tends to be more efficient and responds to local market opportunities and needs. Brand consumption

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tends to be local. This strategy is particularly evident for Coca-Cola, MTV and McDonald’s. In these

cases, the principal offer remains the same but is more tailored to local tastes. McDonald’s, for

example, may offer different menu items, Coca-Cola’s advertising will be more appropriate to the

market or it will offer different ranges of soft drinks according to country. For example, Coca-Cola

recently launched Smart, the first carbonated soft drink from an international company specifically

designed for the Chinese market. MTV offers local or regional programming that will appeal more to

viewers. Sports brands such as Nike and Adidas are in a strong position to market locally. This is

most visible through the sponsorship of local athletes and events. Adidas’ Street-ball events are very

much targeted and developed at a local level. This behaviour can be enhanced through its adoption in

regional or global communications. In this way a local initiative can become magnified.

Communications and Distribution Channel Diversity

Brands analysed in international markets tend to use a wide spectrum of communications channels.

Aside from above-the-line advertising, this may include event marketing, on-line presence, database

marketing, institutional marketing, etc. This varied media mix is a result of the greater media

fragmentation. Furthermore, it also enables the brand values to be communicated to a more diverse

audience with appropriate messages. A halo effect will be integrated with specific, narrow initiatives.

The best practices in the area of communication may be describes as below:

• Target audience understanding,

• Segmentation,

• Communications programmes direct to the consumer developing retail presence exploiting

opportunistic shifts consistency of positioning,

• Utilising local expression more holistic use of varied communications channels

There are also indications of brands looking to develop additional distribution channels. Diesel,

Nike and Levi’s have a retail presence. This acts as not only a distribution channel but also a way in

which the brand values can be enhanced. McDonald’s has looked to develop specific types of stores

such as drive-through and on ferries or in hospitals.

The Shortening of the Product & Brand Life Cycle

There is considerable evidence of the shortening of the product and brand life cycle. To some

extent this is a factor of the intense competition in the marketplace which means that new products

have to prove themselves very quickly or be deleted. We are already seeing the launch of products

that are promoted as limited editions and are designed for a short shelf life. This is particularly

important in the impulse market where new product development and associated promotional activity

are crucial in driving visibility at point-of-sale. Short life-cycle products will also require quick payback.

Successful brands of this sort will make profits and then disappear or be quickly updated and reinvented.

Hyper-Segmentation

As we move from mass marketing to mass customisation we move through hyper-segmentation.

This refers to many brand variants, each targeted at small, distinct groups of consumers. The brand

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remains constant representing an endorsement of the product through its associated values. This

goes beyond straight demographics. Which variant of the product is right for your lifestyle, occasion

or mood at the time? Brand extension will enable the brand equity to be leveraged within the product

category. The brand provides the frame of reference for the consumer. However, it should not be at

the expense of true innovation and cross-category opportunism. Developing genuinely innovative

products and services where the innovation can be sustained will become increasingly important.

The Brand Experience

A brand represents an experience for consumers and, as such, becomes less associated with an

individual product or service than the brand values. Under this scenario, a company’s manufacturing

competencies become less relevant than its ability to understand consumers and to manage a brand.

Production can always be outsourced. In practice, it means that a brand can be extended across

seemingly unrelated product and service categories, if it maintains its core brand values. The most

obvious example of this is the Virgin brand that started with retailing music and gradually moved into

the associated areas like films and videos before the launch of Virgin Atlantic aviation service. Since

then, the brand has been extended into soft drinks, vodka, television and radio, financial services, rail

travel, clothing and cosmetics. One of the pioneers in the development of the cross-category brand is

Disney where the brand has been moved from films into theme parks, video, retail, television and,

through partnerships and merchandising agreements, food and drink, toys, etc.

Consumers are becoming increasingly obsessed with personal appearance and well-being.

People are now prepared to invest significant amounts of money in order to improve the way

they look and extend their lives, and this is having a growing impact on the health and beauty

industries. Seeing an opportunity, cosmetics and toiletries companies have tapped into this

growth by extending their brands into the beauty supplements niche, with vitamin and

mineral cocktails that are said to promote healthy eyes, teeth, skin and nails. Beauty

supplements are marketed mainly to women in their 20s and 30s – a group that previously

rarely took multivitamins. They differ from regular multivitamins only in that they tend to

have particularly large amounts of vitamins A, C and E, omega-3 and omega-6 fatty acids and

copper. The vitamins are believed to help prevent oxidative damage to skin cells, while the

fatty acids are said to help support blood flow to the skin. L’Oréal, Procter & Gamble,

Kanebo, Shiseido and Avon have all made moves into the dietary supplements environment,

some in conjunction with celebrity doctors such as Howard Murad and Nicholas Perricone.

In July 2005, Japanese-based Kanebo developed skin-whitening supplements, capitalising

on continued demand for products that help lighten skin tone in countries where a pale

complexion is desirable.

Within the media market there has been a sustained shift away from media owners working

within individual channels towards the development of such brands that can run across the different

forms of communications or product and service categories. This is a clear response to the fragmentation

of media channels and allows the brand owner to develop a brand or brands for these different

channels as well as develop products and services that can exploit the brand values. The experience

1 Loenie Tait: Aesthetics drive health and beauty, Euromonitor, November 8, 2006

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brand becomes more important than the

channel. One feature of this development is

that a media brand may be extended into

channels which are not traditional or “new”

media, e.g. events, cafés, etc. This will

provide new opportunities for advertisers to

have their brand displayed within a new

environment but with a familiar media brand

name. Within products and services,

Cosmopolitan in the UK, for example, has

extended its brand beyond the printed page

and the Web site into clothing retailing,

confectionery and soft drinks. In the UK this

development was aided by a relaxation in

laws covering cross-media ownership.

Marketers now have to question their own

brand values to see, if they are applicable to

other categories. Brand equity should be

carefully measured and managed to evaluate

current positioning as well as identify and

leverage new opportunities.

Alternative Distribution and Communica-

tions Channels

There is a development of a number of

products and brands that are choosing to

avoid traditional retail and promotional

channels in favour of a new approach. This

is due to the increasing difficulty of selling

through traditional channels in the mass-

market where competition is intense and, in

some markets the retailers push certain low

profile brands in the market to gain high

profit. At the same time, marketers are

looking for greater efficiency and

accountability in their communications and

so are moving towards communications

channels, where effectiveness can be more

accurately demonstrated. Hence, the new

generation of brands do not rely on channels

of mass distribution or heavy weight

advertising campaigns.. More recently,

Strategy Focus 3.2 Cadbury’s Chocolates-

Brand Positioning Strategy

Over 500 Million rupees Cadbury India company has

launched a premium range of chocolates, Temptations,

in Roast Almond Coffee, Old Jamaica, Honey Apricot,

Mint Crunch and Black Forest flavours, in the Indian

market. As a part of the product strategy of he company

to launch one major brand every year, the new product

range aims to offer the consumer an ‘exotic and

international chocolate experience. Temptations are

being retailed through Cadbury’s existing distribution

network, reaching out to 250,000 retailers, with the

emphasis on larger retail stores.

Cadbury’s already claims a 70-percent share in value terms

of the Indian chocolates market, pegged at around Rs 500

crore (22,000 tonnes per annum in volume terms), of which

5 percent is the premium segment. Why launch in the

midst of an FMCG slowdown? The management of the

company feels that one way to beat the slowdown is to

keep track of evolving consumer needs and bring out a

product to meet those needs. What market research showed

was a definite need for a premium chocolate. The taste

profile needed was adult and it needed to be an indulgence

product.” The research apparently also revealed that the

consumer seeks variety from indulgence products and has

been buying imported chocolates (such as Ferrero Rocher,

Lindt et al). In the larger metro markets in India, it has

been noticed that while our current premium range (Fruit

& Nut and Roast Almond) was doing well, our presence in

this top-end segment had reduced in favour of imported

chocolates, which offered greater variety to the consumer.

Research further revealed two sets of chocolate consumers

in India- those who are exposed to international chocolates

and are active consumers of the same, and those who

would love to have the ‘Differentiated Chocolate Taste’

but find international chocolate prices prohibitive.

European chocolates tend to melt at 18°C, Temptations

claims to have been specially formulated to stay solid in

tropical temperatures up to 26°C.

The advertising, handled by Contract, revolves around the

brand proposition, ‘Too Good to Share’. The TVC shows

a mischievous 30-something modern, urban couple playing

pranks on each other to avoid sharing their Temptations,

which is a shift from the usual ‘chocolate is for sharing’

proposition. Cadbury is also working with self-vending

kiosk doors, Crosswords bookstores, sampling at premium

restaurants in metros, playing advertisements during

movies, all aimed at targeting the consumer in privacy.

Source: Rajagopal: Marketing: Strategy, Implementation

and Control, Rawat, New Delhi, 2004

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Christian Dior promoted a perfume called Dune with a Web site which allows it to capture consumer

data. There are number of brands, for example Durex, where the Web represents the lead

communication channel as a part of the global strategy of the company. Consumers’ acceptance of

home shopping offers the potential for many manufacturers to offer a direct service avoiding retail

outlets altogether. This is witnessed by the pioneering brands First Direct and Direct Line Insurance.

These two brands have provided a model for future customer relationships in the financial services

sector. The Internet is a global communications and distribution medium and has the potential to have

a substantial impact not just on communications but also on the distribution of many goods and

services.

The Differentiated Brand

Different brands will need to use different forms of differentiation and for different consumers.

There will also be a trade-off between short-term competitive advantage and long-term differentiation.

Service aspects will be the key to securing brand differentiation in the future. The commodity nature

of the petrol retailing market, for example, clearly needs an initiative that makes one brand stand

apart from the rest. This could be checking the oil or washing the car windows or employing a

customer representative to help drivers with directions, avoiding road works and other traffic problems

that day. Branding is about providing a means of differentiation. This wills become increasingly vital

as the market and, in particular, the competitive situation evolves. Sustained differentiation will also

enable a strong defence against me-too products. Information about pricing will be more easily

available, even automated through intelligent agents. A low price policy contradicts brand building.

Companies that opt for a low price strategy will find that short-term volume gains will be at the

expense of longer-term profitability. Furthermore, not only will there be fewer funds available for

investment but the brand will be devalued in the longer term. For a market leader this is especially so.

Negative marketing will have an adverse impact on the brand.

However, this does not mean that pricing is not important. A company must continually review

its pricing and evaluate the price/value equation. If a brand is charging a price premium over own

label, the “value” of this must be justified. Sudden and deep changes are less advisable than continuous

evaluation and adjustment. Nevertheless, pricing can be still used to differentiate. For example, there

may be tiered pricing for different consumers or for different service levels. This may be a subscription

TV channel where the cost of the subscription is dependent on the amount of advertising received.

The Consumer-Focused Brand

Marketing has always been about focusing on consumers. However, while marketing has previously

only been able to use mass-marketing techniques to reach large groups of consumers, the current

and evolving market scenario requires reaching individual consumers. Their different needs and

aspirations must be recognised. The brand that is most successful will be the one that is most accurately

able to satisfy the needs of individual consumers, meet and even surpass consumers’ expectations.

This will enable it to rise above those brands that do not have a genuine consumer orientation.

Amul ( Anand Milk Union Limited) has certainly come a long way since, its first product,

Amul Butter, was launched in 1945. But it was only in the mid-1960s that the brand started

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gaining prominence, after the introduction of the ‘Utterly Butterly Delicious’ Amul girl with

the catchy lines. The concept was an instant hit and Amul was able to counter Polson

Butter’s position in the market. There has been no looking back since then. This has ensured

that Amul re-mains amongst the top brands in India over the years. In 1992, Amul entered to

an all-time high rank among the dairy products brands in India. Diversification of the product

and brand portfolios has contributed to greater success of Amul. He range of diversified

product range to include food stuffs such as Ketchup, Jam, Ice-cream, Mithai Mate (brand of

condensed milk), Cheese, Shrikhand (a type of flavour yoghurt with dressing of fruits and

nuts) and much more. Such brand extensions have been very successful in Indian markets as

well in the markets of south and middle-eastern countries. Amul launched its own range of

Ice-creams in 1997 after Hindustan Lever’s acquisition of Kwality, Milkfood and Dollop’s.

The product was positioned as the ‘Real Ice-cream’.

Consumer has become marketing-literate. The role of mass media advertising is changing but

will still exist alongside evolving communications channels. Under this scenario, consumers will respond

to a company which is genuinely interested in them and will take part in a dialogue. A company and

brand’s response to the consumer must be instant and appropriate. Companies will need to develop

systems that enable them to learn about individual consumers and communications tools that allow

them to communicate on an individual basis. A retailer should understand a consumer’s shopping

habits and then tailor its offer. A manufacturer may wish to open a direct consumer dialogue rather

than relying on the retailer as the consumer point of contact. We are moving from the four Ps of

mass marketing to the one C, the consumer, of relationship marketing.

More Local Marketing

While there has clearly been a desire by many companies to market their products and services

globally, we are experiencing a paradox whereby many marketers have moved towards a strategy

which is still global but which has increasingly a local execution. Examples of such companies include

Coca-Cola, MTV and McDonald’s, all well-known for their global presence. While MTV has launched

more localised versions of its channel, other satellite broadcasters have taken advantage of technology

to offer country-specific windows for their advertisers. This will be accentuated even more with the

introduction of digital television technology. Even the world-wide web is seeing a more localised

approach by companies. Many of the Web search engines, for example, have launched local versions.

This is intended to benefit both users and attract advertisers.

Branding is currently at a crucial phase. The core principles of branding will remain the same but

the actual execution of brand strategy will evolve to suit the changing consumer and the changing

marketplace. This may involve re-evaluating the brand across all its different aspects. A brand will

have to be benchmarked against the needs of the consumer within the framework of the marketplace.

Brands will continue to add value, expanding the offer well beyond products and services. They will

need to be managed more closely than before. Brand equity, its limitations and opportunities, will

have to be fully understood. The value proposition will become all the more important at a time of

immense retail own label pressure. Most of all, brands will have to focus on consumer needs and

desires. Consistent quality, understood value and closeness to the consumer are the key attributes for

the successful brand.

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BRAND ARCHITECTURE

Brand architecture is an organizing structure of the brand portfolio that specifies brand roles and the

nature of relationships between brands. The brand architecture schemes have been referred to

brand equity charter, leverages, brand profitability and the new rules of brand management leading to

efficacy of the attributes, derived advantages and brand system emerging in relation to the buying

power of the customers. The first step in establishing a brand equity management system may be

focused towards finalizing brand equity into a document, the brand charter that provides relevant

guidelines to the marketing managers. Such documentation strategy requires defining the firm’s view

on the significance of the equity concept, describing key brands in terms of associated products or

names and the manner by which they have been branded and marketed the second step in establishing

a successful brand equity management is to integrate the results of the brand track survey performed

periodically. Mapping of the market information on the critical indicators of the key brands would

also be a guiding tool for the brand architecture and developing the brand value chain. While architecting

the brand strategy, it is important to understand that the preliminary definition of the brand equity is

Strategy Focus 3.3 ACER-Building Consumer Centric Brand

The computer industry is one of the most competitive in the world, having always been dominated by the giants

such as IBM. So, how has a Taiwanese company become the third largest manufacturer of personal computers in

the world, creating a respected, and sometimes feared, brand? How has the company managed to break away from

the “Made in Taiwan” image, which like many countries in Asia has been associated with sub-standard products?

The answer is, of course, the careful construction of a strong brand positioned his products more at the higher end

of the market than any other Taiwanese products had been previously. For example, when entering the Japanese

market, he priced his products the same as theirs to avoid the poor-quality image associated with lower-priced

products. This was an important signal emitted by the brand which Acer-branded products were not to be

classified as commodities.

Acer Computer has always spent huge sums of money on research and development, and in this respect, tends to

follow the Japanese technology companies. The company believes in “innovative value” by using innovation to

create value in the design and production of cutting-edge products-and leading the industry. Company has

positioned personal computers as an aesthetically pleasing home appliance, and this philosophy is summed up in

the new corporate mission statement Fresh Technology Enjoyed by Everyone, Everywhere. Acer Computer has

a long history of innovation, and continues to add to this brand strength at every opportunity.

Acer Computer’s aim is to become more consumer-oriented, as it believes that PCs will become consumer-

electronic products with a wider range of uses and applications in the areas of communications, entertainment, and

education. Acer Computer, therefore, has to become an expert in consumer electronics as well as personal

computing. Shih refers to this as a shift from being ‘technology-centric” to “consumer-centric.” The computer

industry has always been the former-emphasizing products more than people. Acer Computer is, thus, repositioning

itself to become a customer-centric intellectual-property and service company, as signified by its new slogan Acer,

Bringing People and Technology Together. Acer adds value by enhancing consumer perceptions of the benefit or

value of a product, based on know-how, packaging, design, accessibility, comfort, user-friendliness, and niche

solutions-the tangible qualities of its products. This is how Acer Computer is building on its already strong

international brand, into a global brand.

Source: Rajagopal: Marketing: Strategy, Implementation and Control, Rawat, New Delhi, 2004

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not the same for the firm named brands that have their own names. In case of firm owned brands,

the brand becomes the principal spokesperson for the firm and often that works as the pivot of the

brand architecture process in the domestic and internationally segmented markets.

David Aaker

constructed an innovating framework for illustrating brand systems and

characterized brand roles as drivers, endorsers and fighter brands and silver bullets. In pursuit of

further improving the concept of brand architecture, the concept of brand portfolio strategies has

been discussed. It is believed that the brand portfolio strategies will help in searching for the efficient

frontier for the brand set, the boundary where brand managers can maximize their returns for any

level of portfolio risk. However, the scope of brand portfolio does not restrict membership to the

brands owned by the firm. The brand portfolio on the contrary, includes every brand that plays in the

consumers’ decision to buy. Such distinction is necessary to make in the brand architecture approach

for overcoming any conflicts in defining the role and level of the brands. The categories of brands

play significant role in the process of brand architecture for a firm in the following ways:

• Creating coherence and effectiveness

• Allowing brands to stretch across the products and markets

• To stimulate the purchase decisions by brand drivers, and

• Targeting market niches and benefit positioning

BRAND HIERARCHY

Sub-brands and endorsed brands can play a key role in creating coherent and effective brand

architecture. The sub-brands and endorsed brands allow brands to stretch across products and

markets, address conflicting brand strategy needs, conserve brand-building resources in part by

leveraging existing brand equity, protect brands from being diluted by over- stretching, and signal

that an offering is new and different. The brand relationship is related to the driver role that brands

play. The driver role reflects the degree to which a brand drives the purchase decision and use

experience. A branded house uses a single master brand to span a set of offerings that operate

with only descriptive sub-brands. On the contrary, the house of brands strategy, in contrast, involves

an independent set of stand-alone brands, each maximizing the impact on a market. The house of

brands strategy, however, clearly positions brands on functional benefits and to dominate niche

segments. Targeting niche markets with functional benefit positions is the main reason for using a

house of brands strategy.

After extensive research, it was determined that the Danone, a French brand captured the

three best attributes. Danone is a French dairy company and leader in dairy products.

Among many, the yogurt brand enjoyed brand equity in over 30 countries and contributed to

one-quarter of the company’s total revenue. The name also tied into company history in that

7 Keller, L Kevin: Strategic Brand Management – Building, Measuring and Managing Brand Equity, New

Jersey: Prentice Hall, 2003, 409-411

8 David Aaker (1996). Building Strong Brands, New York, The Free Press