GROWING AND

SUSTAINING BRAND
EQUITY
Pengembangan Produk dan Manajemen Merek

Almira Farahita Tabina - 2206134603

Giannisa Umara - 2206134931
Salsabil Dwi Kusuma Prasetyo - 2206135373
Table of contents

·Chapter 12· ·Chapter 13·

Designing and implementing Introducing and naming new
brand architecture products and brand
strategies extensions
Developing a Brand Architecture Strategy New Products and Brand Extensions
Brand Portfolios Advantage of Extensions
Brand Hierarchies Disadvantages of Brand Extensions
Corporate Branding Understanding How Consumers Evaluate
Brand Architecture Guidelines Brand Extensions
Evaluating Brand Extension Opportunities
Extension Guidelines Based on Academic
Research
·CHAPTER 12·
Designing and implementing
brand architecture
strategies
Developing A Brand
Architecture Strategy
To help marketers determine which
products and services to introduce, and
which brand names, logos, or symbols to
apply to new and existing products

Role of Brand Architecture :

● To clarify brand awareness by improving consumer
understanding and communicate similarity and differences
between individual products and services
● To improve brand image by maximizing transfer of equity
between the brand and individual products and services to
improve trial and repeat purchase.
STEP 1 : DEFINING BRAND POTENTIAL Puts some specificity
into a brand vision

ARTICULATING BRAND DEFINING BRAND CRAFTING THE BRAND

VISION BOUNDARIES POSITIONING
Management’s view of the brand’s Identifying the products or services KEY INGREDIENTS :
long-term potential, which is the brand should offer, the benefits
influenced by how well the firm is it should supply, and the needs it ● Competitive frame of
able to recognize the current and should satisfy. reference
possible future brand equity. ● Points of difference
Points of parity
Just because you can,
●
Without a clear understanding of its ● Brand mantra
current equity, it is difficult to doesn’t mean you should!
understand what a brand could be
built on.
STEP 2 : IDENTIFYING BRAND EXTENSION
OPPORTUNITIES DEFINED IN STEP 1

Identify new products and services to achieve the potential through a

well-designed and implemented brand extension strategy

BRAND EXTENSION
A new product introduced under an existing brand name

LINE EXTENSION CATEGORY EXTENSION

New product introductions within existing categories New product introductions outside existing categories
STEP 3 : SPECIFYING BRAND ELEMENTS FOR
BRANDING NEW PRODUCTS & SERVICES
What names, looks, and other branding elements are to be applied to the new
and existing products for any one brand?
One way we can distinguish brand architecture
strategies is by looking at whether a firm is :

A Branded House OR A House of Brands

Employing an umbrella corporate or family brand for all A collection of individual brands all with different names
its products
Firms employing this strategy include consumer
Firms employing this strategy include many product companies
business-to-business industrial firms

Sub-brands are a popular form of brand extension in which the new

product carries both the parent brand name and a new name (Apple Ipad)
Brand Portfolios
Includes all brands sold by a company in a
product category, where we judge a brand
portfolio by its ability to maximize brand equity
LE!
PRINCIP

MAXIMIZE MARKET MINIMIZE BRAND

COVERAGE
& OVERLAP

Why might a firm have multiple brands in the

same product category?
1. To increase shelf presence and retailer dependence in
the store.
2. To attract consumers seeking variety who may
otherwise switch to another brand
3. To increase internal competition within the firm
4. To yield economies of scale in advertising, sales,
merchandising, and physical distribution
SERVE AS A FLANKER & PROTECT
FLAGSHIP BRANDS
FLANKER BRANDS serve as protective or "fighter" brands, creating
points-of-parity with competitors to safeguard more important flagship
brands. This strategy is often employed to compete with lower-priced
competitors or store brands.

"Indomie Kari Ayam" served as a successful flanker, defending Indomie's market share and positioning
against competitors in the flavored instant noodle segment.
SERVE AS A CASH COW & BE MILKED
FOR PROFITS
CASH COWS are brands with dwindling sales but maintained profitability,
often without significant marketing support. Marketers capitalize on existing
brand equity to sustain profitability.

Sari Roti continues to offer its classic white bread despite changes in consumer preferences. The
classic white bread, acting as a cash cow, capitalizes on existing brand loyalty and maintains
profitability without extensive marketing support.
SERVE AS A low-end entry level
product to attract new customers
It involves introducing a product at the lower end of the price range or
quality spectrum to attract new customers who may be price-sensitive or
seeking a more accessible entry point to the brand.

Toyota introduced the Agya, a low-priced compact car, to attract entry-level customers and broaden
its market reach. The Agya serves as an entry point, bringing new customers into Toyota's brand
franchise with the potential for upselling to higher-priced models.
SERVE AS A HIGH-END PRESTIGE product
to aDD PRESTIGE & CREDIBILITY
It involves introducing a high-end product or a premium offering within the
brand portfolio with a goal to enhance the overall brand image, add prestige,
and elevate the perceived quality of the entire brand.

Batik Keris introduced a limited edition collection using premium materials and intricate designs,
positioning it as a high-end offering. While the majority of consumers may purchase standard batik
products, the high-end collection contributes to the brand's reputation for craftsmanship and quality.
Brand Hierarchies
A useful means of graphically portraying a firm’s
branding strategy by displaying the number and nature
of common and distinctive brand elements across the
firm’s products, revealing their ordering.

* We can brand a product in different ways depending on how many new &
existing brand elements we use and how we combine them.

Levels of A Brand Hierarchy :

1. Corporate or Company Brand
2. Family Brand
3. Individual Brand
4. Modifier
5. Product Description
Ex : Apple brand hierarchy
Able to customize

LEVELS OF A BRAND HIERARCHY

brand and all
supporting marketing
activity to meet the
needs of a specific
Also called as range brand / umbrella brand customer group.

CORPORATE OR INDIVIDUAL BRAND

COMPANY BRAND LEVEL FAMILY BRAND LEVEL LEVEL
Referring to corporate and company Used in more than one product Restricted to essentially one
brands interchangeably, recognizing category but is not necessarily the product category, although multiple
that consumers may not necessarily name of the company or product types may differ on the
draw a distinction between the two corporation. basis of model, package size, flavor,
or know that corporations may etc.
Corporate
subsume multiple companies. The cost of introducing a related
Image
new product can be lower and the
The company or corporate brand is likelihood of acceptance higher
almost always present somewhere when marketers apply an existing
on the product or package. family brand to a new product.
LEVELS OF A BRAND HIERARCHY
MODIFIER LEVEL PRODUCT DESCRIPTOR
Adding a modifier can signal Helps consumers understand what
refinements or differences between the product is and does and also
brands related to factors such as helps define the relevant
quality levels, attributes, or function. competition in consumers’ minds.

Additional product
The function is to show how one
description Specific product
brand variation relates to others in
Nike Air Max Men’s category
the same brand family.
Family brand Running Shoes
Individual
BMW M Series brand

Modifier
DESIGNING A BRAND HIERARCHY
Brand elements at each level of the hierarchy may contribute to brand equity through their ability to create awareness, brand
associations and positive responses. The challenge in setting up a brand hierarchy is to decide :

SPECIFIC PRODUCTS TO INTRODUCE

● Principle of Growth
Invest in market penetration or expansion vs. product development according to ROI opportunities.
PEPSICO introduce new products ; Tropicana (fruit juice) and Quaker Oats (healthy food products), investing in
expanding their portfolio to achieve growth in the healthier food and beverage segment.
● Principle of Survival
Brand extensions must achieve brand equity in their categories.
Brand extensions like Tropicana must attain brand equity in the fruit juice category, demonstrating the success of the
brand beyond the carbonated beverage category.
● Principle of Synergy
Brand extensions should enhance the equity of the parent brand.
DESIGNING A BRAND HIERARCHY
Brand elements at each level of the hierarchy may contribute to brand equity through their ability to create awareness, brand
associations and positive responses. The challenge in setting up a brand hierarchy is to decide :

NUMBER OF LEVELS OF THE BRAND HIERARCHY

● Principle of Simplicity
Employ as few levels as possible.
Unilever employs a few levels in their brand hierarchy, with the corporate brand "Unilever" and several family
brands like "Dove" and "Lipton", followed by their individual brands like “Dove Shampoo” and “Lipton Green
Tea”, creating a simple hierarchy.
● Principle of Clarity
Logic and relationship of all brand elements employed must be obvious and transparent.
DESIGNING A BRAND HIERARCHY
Brand elements at each level of the hierarchy may contribute to brand equity through their ability to create awareness, brand
associations and positive responses. The challenge in setting up a brand hierarchy is to decide :

DESIRED AWARENESS & IMAGE AT EACH LEVEL

● Principle of Relevance
Create abstract associations that are relevant across as many individual items as possible.
Apple creates associations at the corporate brand level with innovation and sophisticated design. At the
product level, such as iPhone or MacBook, they establish associations with high performance and unique
style.
● Principle of Differentiation
Differentiate individual items and brands
Each Apple product appear unique and distinct from competitors, establishing strong differentiation
DESIGNING A BRAND HIERARCHY
Brand elements at each level of the hierarchy may contribute to brand equity through their ability to create awareness, brand
associations and positive responses. The challenge in setting up a brand hierarchy is to decide :

LINKING BRAND ELEMENTS TO MULTIPLE PRODUCTS

Principle of Commonality
The more common elements products share, the stronger the linkages.
McDonalds creates commonality through shared elements like logo, corporate
values, or name (‘Mc’) across their portfolio, reinforcing linkages among various
product categories.
DESIGNING A BRAND HIERARCHY
Brand elements at each level of the hierarchy may contribute to brand equity through their ability to create awareness, brand
associations and positive responses. The challenge in setting up a brand hierarchy is to decide :

COMBINING BRAND ELEMENT FROM DIFFERENT LEVELS

Principle of Prominence
The relative prominence of brand elements affects perceptions of product distance and the
type of image created for new products.
Samsung uses the corporate brand "Samsung" and adds the modifier "Galaxy" for their
smartphones. This creates a connection between the corporate brand and the specific
product, reflecting the principle of prominence and the desired image.
Corporate Branding
Corporate branding is the process of creating
and strengthening the identity, image and
reputation of a company as an entity.
Corporate branding is different from product or
service branding, because its scope is broader.
Corporate branding does not only focus on the
products or services the company offers, but also
on the company's values, vision and mission.
Corporate image dimensions

● Common Product Attributes, Benefits, or Attitudes

● People and Relationships
● Values and Programs
● Corporate Credibility
Common Product Attributes, benefits, or attitudes

Like individual brands, a corporate or company brand may evoke in

consumers a strong association to a product attribute (Hershey with
chocolate), type of user (BMW with yuppies), usage situation (Timezone
with fun times), or overall judgment (3M with innovation).

Two specific product-related corporate image associations deserve special

attention:
● A high-quality corporate image association
● An innovative corporate image association
People and relationships

Corporate image associations may reflect characteristics

of the employees of the company.
Values and programs
Corporate image associations may reflect company values and
programs that do not always directly relate to the products.
Firms can run corporate-image ad campaigns to describe to
consumers, employees, and others their philosophy and actions
with respect to organizational, social, political, or economic issues.
Corporate credibility
● Corporate expertise: The extent to which consumers see the
company as able to competently make and sell its products or
conduct its services.
● Corporate trustworthiness: The extent to which consumers believe
the company is motivated to be honest, dependable, and sensitive to
customer needs.
● Corporate likability: The extent to which consumers see the
company as likable, attractive, prestigious, dynamic, and so forth
Managing corporate brand

● Corporate Social Responsibility

● Corporate Image Campaigns
● Corporate Name Changes
Corporate social responsibility
● Increase brand awareness
● Create stronger relationships with customers
● Support social activities
● Protecting the environment and empowering communities
Corporate image campaigns
Corporate image campaigns are designed to create associations to the
corporate brand as a whole; consequently, they tend to ignore or downplay
individual products or sub-brands.
objectives in a corporate brand
campaign:
● Build awareness of the company and the nature of its business
● Create favorable attitudes and perceptions of company credibility
● Link beliefs that can be leveraged by product-specific marketing
● Make a favorable impression on the financial community
● Motivate present employees and attract better recruits
● Influence public opinion on issues
Corporate name changes
Corporate names may have to change for many reasons, but they
should be the right reasons pursued in the right way.
Rationale. A merger or acquisition is often the impetus to reevaluate naming strategies and weigh the existing
and potential equity of each brand in its new context
● A new corporate name arising from a merger or acquisition may be based on some combination of two
existing names, if they are strong. For example, when FedEx and Kinko’s merged into a single entity, they
created a joint FedExKinko’s brand. J.P. Morgan & Co. and Chase Manhattan Corporation became JPMorgan
Chase after their merger.
● If there is an imbalance in brand equity, the firm typically chooses the name with more inherent brand equity
and relegates the other to a sub-brand role or eliminates it altogether. When Citicorp merged with Travelers, the
latter’s name was dropped, although its familiar red umbrella symbol was retained as part of the new Citigroup
brand look. Similarly, United’s name was combined with Continental’s globe logo when those two air carriers
merged.
● Finally, if neither name has the desired brand equity, a completely new name can signal new capabilities.
Brand architecture guidelines
Brand architecture is a classic example of the art and science of
marketing. It is important to establish rules and conventions and be
disciplined and consistent. At the same time, it is also important to
be flexible and creative.

In evaluating a brand architecture strategy, we should ask a number of questions, such as:
• For the brand portfolio, do all brands have defined roles? Do brands collectively maximize coverage and
minimize overlap?
• For the brand hierarchy, does the brand have extension potential? Within the category? Outside the
category? Is the brand overextended?
• What positive and negative brand equity implications will transfer from the parent brand to individual
products? What feedback exists from the individual products to the parent brands in turn?
• What profit streams result from different branding arrangements? How much revenue does each brand
generate? At what cost? What other cross-selling opportunities exist between brands?
guidelines for brand architecture
1. Adopt a strong customer focus→Recognize what customers know and want, and how they will
behave.
2. Create broad, robust brand platforms→Strong umbrella brands are highly desirable. Maximize
synergies and flow.
3. Avoid over branding and having too many brands→For example, high-tech products are often
criticized for branding every ingredient, so the overall effect is like a NASCAR race car with logos
and decals everywhere.
4. Selectively employ sub-brands→Sub-brands can communicate relatedness and distinctiveness
and are a means of complementing and strengthening brands.
5. Selectively extend brands→Brand extensions should establish new brand equity and enhance
existing brand equity.
6. Ensure brand acquisitions mesh well with current brand architecture→Sudden efforts to
rebrand an acquisition could have negative consequences which may result in loss of customers.
·CHAPTER 13·
Introducing and naming
new products and brand
extensions
New Products and
Brand Extensions
When a firm introduces a new product, it has three
approaches for branding it:
● It can develop a new brand, individually chosen for
the new product.
● It can apply one of its existing brands.
● It can use a combination of a new brand and an
existing brand.
brand extension
A brand extension occurs when a firm uses an established brand name to introduce a new
product. When a new brand is combined with an existing brand the brand extension can
also be a sub-brand. An existing brand that gives birth to a brand extension is the parent
brand. If the parent brand is already associated with multiple products through brand
extensions, then it may also be called a family brand.

Brand extensions fall into two general categories:

• Line extension
• Category extension
Advantages of
Extensions
advantages of brand extensions
(Facilitate new-product acceptance)
Reduce Risk Perceived by Increase the Probability of
Improve Brand Image
Customers Gaining Distribution and Trial

Reduce Costs of Introductory

Increase Efficiency of Avoid Cost of Developing a
and Follow-Up Marketing
Promotional Expenditures New Brand
Programs

Allow for Packaging and Permit Consumer

Labeling Efficiencies Variety-Seeking
advantages of brand extensions
(provide feedback benefits to the parent brand)

Bring New Customers into the

Enhance the Parent Brand
Clarify Brand Meaning Brand Franchise and Increase
Image
Market Coverage

Revitalize the Brand Permit Subsequent Extensions

Disadvantages of Brand
Extensions
Disadvantages of brand extensions
Can Confuse or Frustrate Can Encounter Retail Can Fail and Hurt Parent
Consumer Resistance Brand Image

Different varieties of line The number of consumer The worst possible scenario
extensions may confuse and packaged-goods SKUs for an extension is not only to
perhaps even frustrate outpaces the growth of retail fail, but to harm the parent
consumers about which space in year-on-year brand image in the process.
version of the product is the percentage growth. As a Unfortunately, these negative
right one for them. result, it has become feedback effects can
impossible for retailers to sometimes happen. Even if an
offer all the different varieties extension initially succeeds,
available across all the various by linking the brand to
brands in any one product multiple products, the firm
category. Moreover, retailers increases the risk that an
often feel that many line unexpected problem or even
extensions are merely a tragedy with one product in
“me-too” products that the brand family can tarnish
duplicate existing brands in a the image of some or all the
product category and should remaining products.
not be stocked even if there is
space.
Disadvantages of brand extensions
Can Succeed, but Diminish
Can Succeed but Cannibalize Can Succeed, but Hurt the
Identification with Any One
Sales of Parent Brand Image of Parent Brand
Category
Even if sales of a brand One risk of linking multiple If customers see the brand
extension are high and meet products to a single brand is extension’s attribute or
targets, success may result that the brand may not be benefit associations as
merely from consumers identified enough with any inconsistent or even
switching from existing one product. Thus, brand conflicting with the
offerings of the parent extensions may obscure the corresponding associations
brand—in effect cannibalizing brand’s identification with its for the parent brand, they
it. Line extensions designed to original categories, reducing may change their perceptions
establish points-of-parity brand awareness. of the parent brand as a
with current offerings in the result.
parent brand category
particularly may result in
cannibalization.
Disadvantages of brand extensions
Can Cause the Company
Can Dilute Brand Meaning Forego the Chance to
Develop a New Brand
The potential drawbacks of a By introducing a new product
brand extension’s lack of as a brand extension, the
identification with any one company forgoes the chance
category and a weakened to create a new brand, with its
image may be especially own unique image and equity.
evident with high-quality or
prestige brands.
Understanding How
Consumers Evaluate
Brand Extensions
Managerial assumptions
To analyze potential consumer response to a brand extension, let’s start with a baseline case in which
consumers are evaluating the brand extension based only on what they already know about the parent
brand and the extension category.

Under these baseline conditions, we can expect consumers to use their existing brand knowledge, as well
as what they know about the extension category, to try to infer what the extension product might be like.
For these inferences to result in favorable evaluations of an extension, four basic conditions must generally
hold true:

Consumers have
At least some of Negative
some awareness of Negative
these positive associations are
and positive associations are
associations will be not transferred
associations about not created by the
evoked by the from the parent
the parent brand in brand extension
brand extension brand
memory
Brand extensions and brand equity
Creating Extension Equity Must have a sufficiently high level of awareness

Creating a positive image for an extension will depend

on three consumer-related factors:

How salient parent brand

How favorable any How unique any inferred
associations are in the
inferred associations are associations are in the
minds of consumers in
in the extension context extension category
the extension context
Brand extensions and brand equity
Must strengthen or add favorable
and unique associations to the
Contributing to Parent Brand Equity parent brand and not diminish the
strength, favorability, or uniqueness
of any existing associations

The effects of an extension on consumer brand

knowledge will depend on:

How compelling the How relevant or How consistent the How strongly existing
evidence is about the diagnostic the extension extension evidence is attribute or benefit
corresponding attribute evidence is for the with the corresponding associations are held in
or benefit association in attribute or benefit for parent brand consumer memory for
the extension context the parent brand associations the parent brand
Vertical Brand extensions
Extend the brand up into
more premium market
segments or down into more
Vertical Brand Extensions value-conscious segments

Attracting new groups of

consumers

Pros Cons

- Improve brand image - New price point can confuse or frustrate

- Offer consumers variety consumer
- Revitalize the parent brand - Parent brand may suffer in comparison
- Permit further extensions in a given - Parent brand’s image will suffer
direction
Vertical Brand extensions
Examples of Succeed Vertical Brand
Extensions

1. Crowne Plaza
2. Holiday Inn
3. Holiday Inn 1. Tesla Model S
Express 2. Tesla Model X
4. Holiday Inn 3. Tesla Model 3
Select
5. Holiday Inn
Hotel & Suites
Vertical Brand extensions
Naming Strategies

Adopt sub-branding strategies to Use certain brand modifiers to

distinguish their lower-priced signal a noticeable quality Use new and different brand
entries differences names to expand vertically
Evaluating Brand
Extension
Opportunities
Define Actual and Desired Consumer Knowledge
about the Brand
It is critical for marketers to fully understand the depth and breadth of awareness of the
parent brand, and the strength, favorability, and uniqueness of its associations

Marketers must know what is to be the basis of positioning and core benefits satisfied by
the brand.

Profiling actual and desired brand knowledge structures helps identify possible brand
extensions as well as guide decisions that contribute to their success

In evaluating an extension, a company must understand where it would like to take the
brand in the long run. Because the introduction of an extension can change brand meaning,
it can affect consumer response to all subsequent marketing activity as well
Identify Possible Extension Candidates
With respect to consumer factors, marketers should consider parent brand associations,
especially as they relate to brand positioning and core benefits, and product categories that
might seem to fit with that brand image in the minds of consumers

It may be instructive to ask consumers what products the brand should consider offering if it
were to introduce a new product

Brainstorming is another way to generate category extension candidates, along with consumer
research.
Evaluate the Potential of the Extension Candidate
In forecasting the success of a proposed brand extension, marketers should assess through
judgment and research the likelihood that the extension will realize the advantages and avoid the
disadvantages of brand extensions

Consumer Factors Corporate and Competitive Factors Category Factors

● How well does the ● How effectively are the ● Need a clear
proposed corporate assets leveraged in understanding of the
extension fit with the extension setting? market and the cost
the parent brand? ● How relevant are existing interdependencies
● Would you expect marketing programs, perceived between products
such a new benefits, and target customers ● Examining the percentage
product from the to the extension? of sales and profits
parent brand? ● What are the competitive contributed by each item
● What products you advantages to the extension as in the product line and its
believe are consumers perceive them, and ability to withstand
currently attached possible reactions initiated by competition and address
to the brand? competitors as a result? consumer needs
Design Marketing Programs to Launch Extension
Choosing Brand Designing an Optimal Marketing Leveraging Secondary Brand
Elements Program Associations

- Brand extensions - The marketing program for a - Brand extensions will often
retain one or more brand extension must consider leverage the same
elements from the same guidelines in building secondary associations as
parent brand brand equity the parent brand
- In creating new - For positioning, the more - The more common the
brand elements for important it typically is to brand elements and the
an extension, establish necessary and more prominence they
marketers should competitive points-of-parity receive, the more likely it is
follow the same - Marketers have to create a new that parent brand
guidelines of association that can serve as an associations will transfer.
memorability, additional point-of-difference
meaningfulness, and help distinguish the
likeability, extension from the parent brand
protectability, too
adaptability, and
transferability
Evaluate Extension Success and Effects on Parent
Brand Equity
Assess the extent to which an extension is able to achieve its own equity as well as contribute to
the equity of the parent brand

To help measure its success, we can use brand tracking based on the customer-based brand
equity model or other key measures of consumer response centered on both the extension and
the parent brand as a whole
EXTENSION
GUIDELINES BASED
ON ACADEMIC
RESEARCH
Thanks!