Brand management

From ArticleWorld

Brand management enhances brand equity. Profit is generated for the manufacturer by increased sales performance. Brand rationalization reduces the range of brands in a portfolio by means of economies of scale. Repositioning a brand loses the momentum of brand equity built up, partly by confusing the target market.

Contents 1 Brand name quality 2 Brand types 3 Branding types 4 Problems

Brand name quality

Brand name should be selected according to these guiding principles:

• should be protectable under commercial law
• should be easily pronounced, recognizable and come to mind readily
• should reflect customary usage and project a specific image
• should be attention grabbing

Brand types

Brand types are:

1. premium brand typically more expensive than most products in the range.
2. economy brand complements high price elasticity of demand in the market segment.
3. fighting brand created specially to respond to a competitive threat.

Branding types

The types of branding:

1. corporate branding refers to the company's name as the branding image.
2. family branding refers to a single brand name covering several associated products.
3. individual branding refers to the exclusive brand name for each product.
4. private branding refers to the name of the product being changed by retailers.

Problems

Problems in brand management are:

• A number of brand managers limit their horizons to setting financial targets, ignoring important strategic objectives as they feel this is the realm of senior managers.
• Many product level and brand managers restrict their sights to short-term objectives because their remuneration packages reward short-term behavior. Such short-term objectives should instead be stepping-stones toward more long-term objectives.

Quite often product level managers do not get useful information to formulate any strategic objectives.

• Sometimes it is difficult to correlate corporate level objectives with single brand or product level objectives. Changes in shareholders' equity are simple for a company to quantify but it is not as easy to quantify how a change in shareholders' equity can be attributed to the performance of a product or category. More complex matrixes like changes in the net present value of shareholders' equity are even more difficult for the product manager to ascertain (if this is even relevant to their position).
• In a widely diversified company, the aims of some product branding may conflict with other brands. Even more pertinent, corporate aims may clash with the specific needs of your individual brand. This is clearly true in regard to a compromise between stability and risk. Corporate objectives should be sufficiently broad so that brands with high risk products are not unduly constrained by targets set with ‘cash is king’ in mind.
• Unrealistic brand managers set objectives designed to optimize the performance of their own unit rather than considering total corporate performance. This is evident where remuneration is based largely on unit performance, leading to a tendency to ignore valuable synergy with inter-unit joint collaboration.