SBWL Consumer

Research & Marketing

Communication

Course 2: Consumer Touchpoint Management

 Course content & schedule

Date Content

October, 11th Course Organization + Introductions

October, 18th Customer Journey & Touchpoint Management

October, 25th Brand Identity & Image

November, 08th Presentation 1

November, 15th Brand positioning

November, 22nd Brand architecture + Extensions

Guest lecture: Anita Kroiss (Wien Energie)

November, 29th Intro to communications

Guest Lecture: Christina Zagorschak (Brandig)

December, 6th Communication channels

Evaluation

December, 13th Presentation 2

2
Brand strategies

Brand architecture and brand extensions

Managing mulitple brands

1. Brand‘s potential
1. Identity
2. Boundaries
2. Extensions opportunities
1. Line vs. Category extensions
3. Architecture
Accor

What brands from Accor do you know?

( Source: www.accor.com)
 Brand portfolio

Brand portfolio is a structured set of all brands that a

company owns (Keller, 2013)

Maximizes market coverage with

different segments served
Brand
portfolio Reduces brand
(well-managed) overlap

Helps to track added value

of every brand in portfolio
 Brand portfolio

Brands in a portfolio can take over different roles

 Bastion brand
 Most profitable brand
Prestige
brand  High performance & psych-social meaning
 Flanker, prestige or fighter brands can
protect Bastion
 Flanker
 Serving different segments
Flanker Bastion Flanker  Prestige
brand brand brand
 For small segments looking for status
 General status
 Fighter
 Price between Bastion and discount labels
 Serves prices sensitive segment
Fighter
 Possible entry segment
brand

(Source: Riezebos, 2003)

 Brand portfolio

Brands in a portfolio can take over different roles

 Bastion brand
 Most profitable brand
Prestige
brand  High performance & psych-social meaning
 Flanker, prestige or fighter brands can
protect Bastion
 Flanker
 Serving different segments
Flanker Bastion Flanker  Prestige
brand brand brand
 For small segments looking for status
 General status
 Fighter
 Price between Bastion and discount labels
 Serves prices sensitive segment
Fighter
 Possible entry segment
brand

(Source: Riezebos, 2003)

Think back to the portfolios

What is particular to each of them?

 Strategic branding: Brand
architecture
Brand architecture is an organizing structure of the brand
portfolio that specifies brand roles and the nature of relationships
between brands. It denotes the driver (or purchase decision) role a
brand plays (Aaker and Joachimsthaler, 2000, p.8).

Brand
relationship

House of Endorsed Branded

Subbrands
brands brands house
Brand independence Master-brand dependence

(Source: Aaker and Joachimsthaler, 2000)

Strategic branding: Brand
architecture
• Each brand has its own role - limited
connection to corporate brand

Weakness:
• synergies and economies of scales
from other brands can’t be exploited

Strengths:
• For targeting niche markets with
functional benefit propositions
• Help to avoid incompatible brand
associations
• Brand names could reflects key
benefit of the product e.g. Kleenex

(Source: Aaker and Joachimsthaler, 2000 p.11)

Playlists

Sony Warner Universal

Strategic branding: Brand
architecture
• The product brand is used with
endorsement, usually corporate brand
• Product brand is independent
• Endorser brand usually plays a relatively
minor driver role

Weakness
• In a case of one brand crisis all brands in
a hierarchy could suffer

Strengths
• An endorsement by an established brand
provides credibility and transfers
emotional benefits
• Endorser brand could also benefit from
associations transferred from product
brand
(Source: Aaker and Joachimsthaler, 2000, p. 12)
Strategic branding: Brand
architecture

• Subbrands are brands connected to a

master brand and hold augmented or
modified associations from master brand
• The driver role is shared by both master
and subbrand
• The master brand is the primary frame of
reference, which is stretched by
subbrands

Strengths
• Allows master brand extension into a
relevant new segment
• The close link between master and
subbrand have a strong association
transfer potential. Thus, it is a threat and
opportunity for a master brand.
(Source: Aaker and Joachimsthaler, 2000, p. 14)
Strategic branding: Brand
architecture
• The master brand is used to span a set of
offerings that operate with only descriptive
sub-brands
• The sub-brand can have a very small, just
descriptive or no driver role at all

Weakness
• Difficult to maintain consistent image
across offerings
• Limited opportunity to serve different
targets

Strenghts
• Provides clarity, synergy of brand image
• One offering can enhance another
• Increased brand awareness for all brands

(Source: Aaker and Joachimsthaler, 2000, p. 15)

Strategic branding: Brand
architecture
• The master brand is used to span a set of
offerings that operate with only descriptive
sub-brands
• The sub-brand can have a very small, just
descriptive or no driver role at all

Weakness
• Difficult to maintain consistent image
across offerings
• Limited opportunity to serve different
targets

Strenghts
• Provides clarity, synergy of brand image
• One offering can enhance another
• Increased brand awareness for all brands

(Source: Aaker and Joachimsthaler, 2000, p. 15)

Strategic branding: Brand
architecture
• The master brand is used to span a set of
offerings that operate with only descriptive
sub-brands
• The sub-brand can have a very small, just
descriptive or no driver role at all

Weakness
• Difficult to maintain consistent image
across offerings
• Limited opportunity to serve different
targets

Strenghts
• Provides clarity, synergy of brand image
• One offering can enhance another
• Increased brand awareness for all brands

(Source: Aaker and Joachimsthaler, 2000, p. 15)

Strategic branding: Brand
architecture

Which strategy to choose?

(Source: Aaker and Joachimsthaler, 2000, p. 17)

 Strategic branding: Brand
architecture

 Different brand strategies can be often merged,

resulting in complex, multi-layered brand
structures

Meta builds technologies that help people

connect, find communities and grow
businesses.
Brand strategies

Brand Extensions

Icon: Nikita Golubev

When a company introduces a
new product it has 3 options:

Use existing brand in

New brand Use existing brand combination with the new one

Which brand architecture strategy does each option represent?

 Transferring brand to new
products

Companies use a brand extension strategy when the

developed brands are used for branding other
products or product categories

Approx. 80% of new products are brand

extensions
 Brand extension:
Line extension & category
extension

Line Extension Catgeory Extension

(Stretching)

Core (initial) brand Core (initial) brand

 Line extension & category
extension

In a line extension strategy the (strong) brand is

used for a new product introduced in the same
product line. Usually, it targets a new consumer segment

In a category extension (stretching) strategy, an

existing brand is used for branding new products in a
different product category.

(Source: Schweiger and Schrattenecker, 2012)

Category and line extensions
 Advantages of brand
extensions

• The positive associations of core brand getting

transferred to an extended brand
• E.g. Dove – softness, moisture

• E.g. Redbull – energy, power, masculinity

• Quality associations are getting transferred

• Increased awareness and presence
• Trial purchase is encouraged
• In the ideal case, brand extension enhances the
core brand, and thus increase brand value
Source: (Aaker, 1990)
Category extension strategies

• Same product in a different form

• Distinctive taste/ingredient in the new product

• Companion products for the brand.

• Products relevant for the same customer base

• Benefit/ attribute / feature

( e.g. softness /mildness)

• Expertise

• Prestige - Status

Source: Tauber, 1988

 Brand extension:
Line extension & Category extension

What are brand extension success factors?

• Strength of the core brand

• Previous brand extensions (How many / How different?)
• Product category characteristics (e.g. Risk, consumer innovativeness)
• The congruence between core brand and extension values
• Brand elasticity
• Brands with more abstract brand associations are more
elastic than brands with functional associations

VS.
Brand Extension: examples

Hipp baby food vs. baby care products

-The highest quality products for babies-
Brand Extension: examples

Bic Pen vs. lighter vs. razor

-Cheap, quick and disposable-
Brand extensions: examples

Michelin tyres vs restaurant guide

- Travel-
Brand extensions: examples

Samsung TV‘s vs Phones vs Home appliances

- „smart“-
 Risk of brand extensions

.. But all types of brand extensions also involve risk

 The brand extension might not be successful if core

brand does not add value (e.g. no congruence)
 Undesirable associations could be created and
transferred to a core brand
 Existing associations of a core brand could be
weakened
 Brand extension could cannibalize core brand and
thus, lower the core brand value

(Source: Aaker, 1990)

Extension can bring negative
associations
Core brand cannibalization
Possibilities of Brand
Extensions: Ansoff Matrix

Current products New products

Market Product
Current markets penetration development
strategy strategy

Market
Diversification
New markets development
strategy
strategy
 Possibilities of Brand
Extensions: Ansoff Matrix
Current products New products

Market penetration Product development

strategy strategy
• Advertise WU in • New
Current markets Austrian schools SBWLs
• Offer more slots in
existing SBWL

Market development Diversification strategy

strategy
• Advertise WU
New markets abroad
• Partnerships
Possibilities of Brand
Extensions: Ansoff Matrix

Current products New products

Market penetration Product development

strategy strategy

Current markets

Market development Diversification strategy

strategy

New markets