‘After reading Kapferer’s book, you’ll never again think of a brand as just a name. Several exciting new ideas and perspectives on brand building are offered that have been absent from our literature.’ Philip Kotler, Northwestern University ‘A real thought provoker for marketing and business people. Strategic Brand Management is an essential tool to develop strong marketing strategy.’ P Desaulles, Vice President, Du Pont de Nemours Europe ‘A solid contribution written with depth and insight. I recommend it to all those who desire a further understanding of the various dimensions of brand management.’ David A Aaker, University of California at Berkeley, and author of Managing Brand Equity ‘The best book on brands yet. It is an invaluable reference for designers, marketing and brand managers.’ Design Magazine ‘‘One of the best books on brand management. Kapferer is thought provoking and always able to create new insights on various brand related topics.’ Rik Riezebos, CEO Brand Capital and director of EURIB/European Institute for Brand Management ‘One of the definitive resources on branding for marketing professionals worldwide.’ The Economic Times, India
“New exciting ideas and perspectives on brand building are offered that have been absent from our literature.” Philip Kotler, S C Johnson & Sons Distinguished Professor of International Marketing, Northwestern University, Kellogg School of Management, USA “Kapferer continues to be on the leading edge.” Earl N Powell, President, Design Management Institute, Boston, USA “Managing a brand without reading this book is like driving a car without your license.” Haesun Lee, Senior Vice President of Marketing,AMOREPACIFIC Co, Korea “The best book on brands!” Design Magazine “One of the definitive resources on branding for marketing professionals worldwide.” The Economic Times, India “One of the best books on brand management. Kapferer is thought-provoking and always able to create new insights on various brand-related topics.” Rik Riezebos, CEO Brand Capital and director of the European Institute for Brand Management Adopted by leading international business schools, MBA programmes and marketing practitioners alike, The New Strategic Brand Management is simply the reference source for senior strategists, positioning professionals and postgraduate students. Over the years it has not only established a reputation as one of the leading works on brand strategy but has also become synonymous with the topic itself. This new edition builds on its impressive reputation and keeps the book at the forefront of strategic brand thinking. Revealing and explaining the latest models used by companies worldwide, author Jean-Noël Kapferer covers all the leading issues faced by brand strategists today, supported by an array of international case studies. With both gravitas and intelligent insight, this book reveals new thinking on crucial topics including: Moving beyond marketing, The New Strategic Brand Management addresses the bigger picture, integrating other components such as business models, HR and finance into brand building. It analyses the specifics of brands in B2B, services, distribution, the internet and the luxury sector. It extends the brand concept to celebrities, universities, towns and nations. Jean-Noël Kapferer is one of the very few worldwide experts on brands. His book stands out from others with its unique insights, its style of exhaustive analysis and its original perspectives, stemming from his strategic vision, and his international background and experience. A professor of marketing strategy at HEC Paris, he holds a PhD from Northwestern University (USA) and is an active consultant to many European, US and Asian corporations. He also gives executive seminars in the US, China, Japan, Korea and India. He is the author of six books on branding, advertising and communication, including Reinventing the Brand, also published by Kogan Page. You can contact him at www.kapferer.com. • growth in saturated markets; • decommoditisation; • innovation in emerging markets; • brand rejuvenation and turn around; • managing brand consistency and diversity; • positioning private labels and store brands; • globalisation and market adaptation; • co-branding strategies; • internal branding and corporate branding; • financial evaluation of brands. Kogan Page 120 Pentonville Road London N1 9JN United Kingdom www.kogan-page.co.uk Kogan Page US 525 South 4th Street, #241 Philadelphia PA 19147 USA £35.00 US $70.00 Branding / Business and management THE NEW STRATEGIC BRAND MANAGEMENT Creating and sustaining brand equity long term “New exciting ideas and perspectives on brand building!” Philip Kotler J N KAPFERER KAPFERER THE NEW STRATEGIC BRAND MANAGEMENT 4TH EDITION 4TH EDITION ISBN: 978-0-7494-5085-4 new_strategic_brand_aw:Layout 1 6/12/07 16:25 Page 1 I STRATEGIC BRAND MANAGEMENT THE NEW ii ‘After reading Kapferer’s book, you’ll never again think of a brand as just a name. Several exciting new ideas and perspectives on brand building are offered that have been absent from our literature.’ Philip Kotler, Northwestern University ‘A real thought provoker for marketing and business people. Strategic Brand Management is an essential tool to develop strong marketing strategy.’ P Desaulles, Vice President, Du Pont de Nemours Europe ‘A solid contribution written with depth and insight. I recommend it to all those who desire a further understanding of the various dimensions of brand management.’ David A Aaker, University of California at Berkeley, and author of Managing Brand Equity ‘The best book on brands yet. It is an invaluable reference for designers, marketing and brand managers.’ Design Magazine ‘‘One of the best books on brand management. Kapferer is thought provoking and always able to create new insights on various brand related topics.’ Rik Riezebos, CEO Brand Capital and director of EURIB/European Institute for Brand Management ‘One of the definitive resources on branding for marketing professionals worldwide.’ The Economic Times, India ‘Jean Noel Kapferer’s hierarchy of brands with six levels of brands is an extraordinary insight.’ Sam Hill and Chris Lederer, authors of The Infinite Asset, Harvard Business School Press ‘A fresh perspective on branding that is easy to understand and inspirational. I believe it to be the finest book on the subject in the marketplace today.’ Marsha Lindsay, President and CEO, Lindsay, Stone and Briggs ‘The treatment of brand-product strategies, brand extensions and financial evaluations are also strengths of the book.’ Journal of Marketing ‘A “think book”. It deals with the very essence and culture of branding.’ International Journal of Research in Marketing ‘An authoritative analysis about establishing an identity and exploiting it.’ Daily Telegraph ‘A full and highly informative text… well written and brought to life through numerous appropriate examples.’ Journal of the Market Research Society III JEAN-NOËL KAPFERER STRATEGIC BRAND MANAGEMENT THE NEW Creating and Sustaining Brand Equity Long Term London and Philadelphia Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsi- bility for any errors or omissions, however caused. No responsibility for loss or damage occa- sioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors. First published in France in hardback in 1992 and in paperback in 1995 by Les Editions d’Organisation Second edition published in Great Britain in 1997 by Kogan Page Limited Third edition 2004 Reprinted 2005, 2007 Fourth edition 2008 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 525 South 4th Street, #241 London N1 9JN Philadelphia PA 19147 United Kingdom USA www.kogan-page.co.uk © Les Editions d’Organisation, 1992, 1995, 1997, 2004, 2007, 2008 The right of Jean-Noel Kapferer to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 5085 4 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Kapferer, Jean-Noël. New strategic brand management : creating and sustaining brand equity long term / Jean- Noël Kapferer. – 4th ed. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-7494-5085-4 (alk. paper) 1. Brand name products–Management. I. Title. HD69.B7K37 2008 658.8'343–dc22 2007037849 Typeset by Saxon Graphics Ltd, Derby Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall iv Contents List of figures ix List of tables xii Preface to the fourth edition xiv Introduction: Building the brand when the clients are empowered 1 Part One: Why is branding so strategic? 7 1. Brand equity in question 9 What is a brand? 9; Differentiating between brand assets, strength and value 13; Tracking brand equity 15; Goodwill: the convergence of finance and marketing 18; How brands create value for the customer 19; How brands create value for the company 23; Corporate reputation and the corporate brand 26 2. Strategic implications of branding 31 What does branding really mean? 31; Permanently nurturing the difference 35; Brands act as a genetic programme 36; Respect the brand ‘contract’ 38; The product and the brand 39; Each brand needs a flagship product 41; Advertising products through the brand prism 42; Brands and other signs of quality 44; Obstacles to the implications of branding 45 3. Brand and business building 51 Are brands for all companies? 51; Building a market leader without advertising 52; Brand building: from product to values, and vice versa 55; Are leading brands the best products or the best value? 57; Understanding the value curve of the target 58; Breaking the rule and acting fast 58; Comparing brands and business models: cola drinks 59 V 4. From private labels to store brands 65 Evolution of the distributor’s brand 66; Are they brands like the others? 69; Why have distributors’ brands? 74; The financial equation of the distributor’s brand 75; The three stages of the distributor’s brand 77; The case of Decathlon 79; Factors in the success of distributors’ brands 82; Optimising the DOB marketing mix 84; The real brand issue for distributors 85; Competing against distributors’ brands 87; Facing the low-cost revolution 90; Should manufacturers produce goods for DOBs? 93 5. Brand diversity: the types of brands 95 Luxury, brand and griffe 95; Service brands 103; Brand and nature: fresh produce 106; Pharmaceutical brands 108; The business-to-business brand 113; The internet brand 119; Country brands 123; Thinking of towns as brands 125; Universities and business schools are brands 128; Thinking of celebrities as brands 131; Thinking of television programmes as brands 132 Part Two: The challenges of modern markets 135 6. The new rules of brand management 137 The limits of a certain type of marketing 139; About brand equity 141; The new brand realities 144; We have entered the B to B to C phase 152; Brand or business model power? 153; Building the brand in reverse? 154; The power of passions 155; Beginning with the strong 360° experience 156; Beginning with the shop 158; The company must be more human, more open 158; Experimenting for more efficiency 159; The enlarged scope of brand management 160; Licensing: a strategic lever 164; How co-branding grows the business 166 7. Brand identity and positioning 171 Brand identity: a necessary concept 171; Identity and positioning 175; Why brands need identity and positioning 178; The six facets of brand identity 182; Sources of identity: brand DNA 188; Brand essence 197 Part Three: Creating and sustaining brand equity 201 8. Launching the brand 203 Launching a brand and launching a product are not the same 203; Defining the brand’s platform 204; The process of brand positioning 207; Determining the flagship product 209; Brand campaign or product campaign? 210; Brand language and territory of communication 210; Choosing a name for a strong brand 211; Making creative 360° communications work for the brand 214; Building brand foundations through opinion leaders and communities 215 9. The challenge of growth in mature markets 219 Growth through existing customers 219; Line extensions: necessity and limits 222; Growth through innovation 227; Disrupting markets through value innovation 230; Managing fragmented markets 232; Growth through cross-selling between brands 234; Growth through internationalisation 234 vi CONTENTS 10. Sustaining a brand long term 237 Is there a brand life cycle? 238; Nurturing a perceived difference 240; Investing in communication 243; No one is free from price comparisons 245; Branding is an art at retail 247; Creating entry barriers 248; Defending against brand counterfeiting 250; Brand equity versus customer equity: one needs the other 252; Sustaining proximity with influencers 260; Should all brands follow their customers? 262; Reinventing the brand: Salomon 263 11. Adapting to the market: identity and change 269 Bigger or better brands? 270; From reassurance to stimulation 271; Consistency is not mere repetition 272; Brand and products: integration and differentiation 273; Specialist brands and generalist brands 275; Building the brand through coherence 279; The three layers of a brand: kernel, codes and promises 290; Respecting the brand DNA 292; Managing two levels of branding 293 12. Growth through brand extensions 295 What is new about brand extensions? 296; Brand or line extensions? 298; The limits of the classical conception of a brand 300; Why are brand extensions necessary? 303; Building the brand through systematic extensions: Nivea 306; Extending the brand to internationalise it 309; Identifying potential extensions 310; The economics of brand extension 312; What research tells us about brand extensions 316; What did the research reveal? 324; How extensions impact the brand: a typology 324; Avoiding the risk of dilution 326; Balancing identity and adaptation to the extension market segments 330; Assessing what should not change: the brand kernel 332; Preparing the brand for remote extensions 333; Keys to successful brand extensions 336; Is the market really attractive? 340; An extension-based business model: Virgin 342; How execution kills a good idea: easyCar 345 13. Brand architecture 347 The key questions of brand architecture 347; Type and role of brands 349; The main types of brand architecture 356; Choosing the appropriate branding strategy 372; New trends in branding strategies 376; Internationalising the architecture of the brand 379; Some classic dysfunctions 379; What name for new products? 381; Group and corporate brands 385; Corporate brands and product brands 388 14. Multi-brand portfolios 391 Inherited complex portfolios 392; From single to multiple brands: Michelin 393; The benefits of multiple entries 395; Linking the portfolio to segmentation 396; Global portfolio strategy 401; The case of industrial brand portfolios 402; Linking the brand portfolio to the corporate strategy 405; Key rules to manage a multi-brand portfolio 406; The growing role of design in portfolio management 409; Does the corporate organisation match the brand portfolio? 410; Auditing the portfolio strategically 411; A local and global portfolio – Nestlé 413 CONTENTS vii 15. Handling name changes and brand transfers 415 Brand transfers are more than a name change 415; Reasons for brand transfers 416; The challenge of brand transfers 418; When one should not switch 419; When brand transfer fails 420; Analysing best practices 421; Transferring a service brand 426; How soon after an acquisition should transfer take place? 428; Managing resistance to change 431; Factors of successful brand transfers 433; Changing the corporate brand 435 16. Brand turnaround and rejuvenation 437 The decay of brand equity 438; The factors of decline 439; Distribution factors 442; When the brand becomes generic 443; Preventing the brand from ageing 443; Rejuvenating a brand 445; Growing older but not ageing 450 17. Managing global brands 455 The latest on globalisation 456; Patterns of brand globalisation 459; Why globalise? 461; The benefits of a global image 466; Conditions favouring global brands 468; The excess of globalisation 470; Barriers to globalisation 471; Coping with local diversity 473; Building the brand in emerging countries 478; Naming problems 479; Achieving the delicate local–global balance 480; Being perceived as local: the new ideal of global brands? 483; Local brands can strike back 485; The process of brand globalisation 487; Globalising communications: processes and problems 495; Making local brands converge 498 Part Four: Brand valuation 501 18. Financial valuation and accounting for brands 503 Accounting for brands: the debate 504; What is financial brand equity? 507; Evaluating brand valuation methods 513; The nine steps to brand valuation 525; The evaluation of complex cases 528; What about the brand values published annually in the press? 529 Bibliography 531 Index 545 viii CONTENTS Figures 1.1 The brand system 12 1.2 The levers of brand profitability 25 1.3 Branding and sales 26 2.1 The brand system 34 2.2 The cycle of brand management 36 2.3 The product and the brand 41 2.4 Product line overlap among brands 42 2.5 Brands give innovations meaning and purpose 43 3.1 The two models of brand building through time 56 4.1 Relative positioning of the different distributors’ brands 68 5.1 The pyramid brand and business model in the luxury market 98 5.2 The constellation model of luxury brands 100 5.3 History-based and story-based approaches to luxury 101 5.4 How brands impact on medical prescription 112 6.1 Limits of traditional marketing 140 6.2 From brand values to brand value 143 6.3 Brand equity 144 6.4 The extension of brand management 162 7.1 Identity and image 174 7.2 Positioning a brand 176 7.3 The McDonald’s positioning ladder 180 7.4 Brand identity prism 183 7.5 Sample brand identity prisms 188 7.6 Example of brand platform: Jack Daniel’s 199 8.1 Transfer of company identity to brand identity when company and brand names coincide 206 8.2 From brand platform to activation 210 IX [...]... Type of brand and ability to extend further The process of extension Framework for evaluating extensions The Virgin extension model Positioning alternative branding strategies The six brand architecture strategies The product -brand strategy Range brand formation Range brand structured in lines Endorsing brand strategy Umbrella brand strategy Source brand or parent brand strategy A case of brand proliferation... capital for Coca-Cola and Danone Strategic uses of co-branding How to evaluate and choose a brand positioning Sub -brand and master brand positioning The most typical products of two mega-brands Brand laddering process: the Benetton case Underlying the brand is its programme Comparing positioning scenarios: typical positioning scenarios for a new Cuban rum brand 14 17 19 21 22 23 36 59 72 73 79 84 85 97 110... themselves as brands, the world of brands is moving permanently, looking for new brand and business models, sources of sustainable advantage and added value for clients We shall explore these new models that define the winning brands of today and tomorrow 6 This page is intentionally left blank 7 Part One Why is branding so strategic? 8 This page is intentionally left blank 9 1 Brand equity in question Brands... fragmentation Advertising weight and trade brands’ penetration From risk to desire: the dilemma of modern branding Relating extensions to strategy Brand extension impact on launching costs Success rate of two alternative branding policies Extension strategic evaluation grid ‘House of brands’ or ‘branded house’ Shared roles of the corporate and product brand How brand equity decays over time From global... the creation of megabrands through brand extensions, on the development of competitive advantage and dominant position through an adequate brand portfolio, and on the efficient management of the relationships between the brand, the corporation and the product (the issue of brand architectures) There are many other significant new features in this edition, which reflect the new branding environment:... core skill needed This is why, in this fourth edition of Strategic Brand Management, while we look in depth at branding decisions as such, we also insist on the ‘non-branding’ facets of creating a brand Paradoxically, it takes more than branding to build a brand INTRODUCTION 3 Today clients are empowered as never before It is the end for average brands Only those that maximise satisfaction will survive,... brand is carried by its products Identity and pyramid models The Nivea extensions galaxy Perimeters of brand extension Rate of success of new brands vs brand extensions (OC&C) The impact of brand extension on the consumer adoption process (OC&C) Ayer model: how a family name impacts the sales of a new product Comparative sales performance during the first two years (Nielsen) The brand extension decision... real As such it is a main source of brand evaluation Does it produce high or low satisfaction? Brand management starts with creating products, services and/or places that embody the brand Interestingly, the legal approach to trademarks and brands also insists on their conditional nature One should never use the brand name as a noun, but as an adjective attached to a name, as for instance with a Volvo... legal definition asserts, a brand is not born but made It takes time to create a brand, even though we talk about launching brands In fact this means launching a product or service Eventually it may become a brand, and it can also cease to be one What makes a brand recognisable? When do we know if a name has reached the status of a brand? For us, in essence, a brand is a name that influences buyers,... short, a brand exists when it has acquired power to influence the market This acquisition takes time The time span tends to be short in the case of online brands, fashion brands and brands for teenagers, but longer for, for example, car brands and corporate brands This power can be lost, if the brand has been mismanaged in comparison with the competition Even though the brand will still have brand awareness, . KAPFERER KAPFERER THE NEW STRATEGIC BRAND MANAGEMENT 4TH EDITION 4TH EDITION ISBN: 978-0-7494-5085-4 new_ strategic _brand_ aw:Layout 1 6/12/07 16:25 Page 1 I STRATEGIC BRAND MANAGEMENT THE NEW ii ‘After. 19147 USA £35.00 US $70.00 Branding / Business and management THE NEW STRATEGIC BRAND MANAGEMENT Creating and sustaining brand equity long term New exciting ideas and perspectives on brand building!” Philip. the brand 39; Each brand needs a flagship product 41; Advertising products through the brand prism 42; Brands and other signs of quality 44; Obstacles to the implications of branding 45 3. Brand