Case Teaching Notes General Introduction to the Cases in Best Practice Cases in Branding There are fifteen in-depth

case studies in the Best Practice Cases in Branding supplementary text, each of which can support one or even parts of two class sessions. Moreover, many of these fifteen written cases are supplemented by a 10-20 minute video that contains additional information and interviews with key company sources for the case. In general, the written cases are fairly easy to teach and can provoke much student involvement. They can be a valuable addition to your course. The written cases are somewhat different, however, from the typical HBS cases and therefore work best with a slightly different teaching approach. This introductory note describes the recommended general approach to teaching these cases. Detailed specific case notes are provided for each of the fifteen cases. Additional information on the video cases can be found on the Prentice-Hall web site. Some PowerPoint slides with graphics that may be useful in teaching the case can also be found on the web site. The main difference between these cases and traditional HBS cases is that HBS cases often have a strong decision focus a certain set of actions that must be evaluated and enacted. The text cases here have a different approach. They concentrate on major brands with which students are generally familiar, review much historical background, and provide detailed information on one particular branding issue, event, or strategy. By and large, the marketers of these brands have done much right and, as such, the cases have much more of a best practice flavor than may be found in other types of cases. For that reason, student learning from reading the cases alone can often be quite rich and beneficial, and students appreciate the opportunity to learn about high profile brands and companies. Nevertheless, the in-class experience can add extra dimensions as specific topics can be expanded on and additional learning can occur. Thus, discussion with these cases does not aim towards resolution of a marketing problem or opportunity as much as with the HBS cases but instead covers a lot of ground to make a series of important points about branding in general and one particular brand in the process. The video cases can also help in this regard. The basic breakdown of the cases is 1/3 review of case material, 1/3 lessons about branding in general; and 1/3 about next steps and new development for the brand. The videos can be shown in their entirety at the beginning or end of class or shown in segments at different times during the case discussion. These written cases can, of course, be supplemented by HBS cases, which deal with more specific branding topics (some of which will be highlighted below). The purpose of these teaching notes is to provide you with useful background to organize your teaching of the cases. 87

Given the high profile nature of the brands that are the focus of these cases, it will make sense to update the case with current events and developments that students will find of interest. These cases represent best practices from a variety of industries, from fast-moving consumer goods to high-tech and online brands to service brands. The cases often include information about global branding issues faced by the companies, with two cases (Nivea and Red Bull) focusing primarily on Europe. The brand management topics covered in the cases will help the reader understand how to: 1) 2) 3) 4) 5) 6) 7) 8) Brand a new product (even if it is a commodity or ingredient) Employ new marketing approaches to build brand equity and brand loyalty Expand a brand into new geographical markets and channels Establish a brand hierarchy and introduce brand extensions Manage a corporate brand Keep a brand strong over time Revitalize a brand that gets into trouble Change a brand name or reposition a brand

Collectively, these cases provide a comprehensive overview of the strategic brand management process and corresponding best practice guidelines. Each of the fifteen cases also yields valuable specific lessons on how to build and manage brand equity.

88

Intel: Building a Technology Brand Teaching Notes Summary This case concerns the marketing efforts by Intel to build brand equity in the face of a lawsuit preventing trademark protection for their X86 microprocessor series. Intel had to determine how to name its new generation of microprocessors, as well as how to establish competitive advantages and consumer preference for its microprocessor lines. A number of issues are raised concerning the development of an effective branding strategy. The case also addresses Intels expansion of its business beyond PC microprocessors and the various branding strategies the company employed. After being criticized for a lack of focus, Intel decided clean-up its product line and limit its focus on microprocessors, servers, mobile devices, and networking equipment. As a result, the company deployed a platform strategy and introduced a bundle of products, including its new Centrino processor along with other chips designed for wireless communication. Despite its success in the microprocessor business, Intel recognized that the PC market growth is slow and competition from AMD is becoming fiercer. As a result, Intels stock price declined significantly and required immediate action. The new management decided to launch a new brand strategy that attempts to reposition Intel as a warm and fizzy consumer company. The new campaign is based on a new logo, and new slogan (Leap Ahead), and new platform (Intel Viiv) and four specific target markets. Will this campaign help the brand achieve renewed success? Class discussion can revolve around the following questions that students should consider before class: 1. What were the strengths and weaknesses of the Intel Inside campaign? 2. Evaluate Intels continued use of the Pentium family of processors. Did Intel make the right decision by extending the name through the Pentium 4 processor? 3. Suppose you were the Chief Marketing Officer for AMD. How would you propose the company position itself to better compete with Intel? Would you propose that AMD institute an Inside-like ad campaign? 4. Evaluate Intels segmentation strategy. Is having a good/better/best product line (Celeron, Pentium, Xeon) the best

89

positioning for Intel? Should it discontinue a line(s) and focus on the other(s)? 5. In light of Intels move into the digital home, did the companys executives make the right decision in launching an entirely new brand identity? Did it make the right decision in changing a 37year-old Intel logo and dropping the Intel Inside campaign for Leap Ahead? What other marketing strategies might the company employ? 6. Intel moved into consumer-electronics products, such as digital cameras in 2000, only to withdraw after receiving complaints from OEMs such as Dell. Does Intel face a similar issue with its move into the digital home? Does this move too far outside Intels core competency of producing microprocessors? Teaching Strategy This case can generate and support discussion on a number of topics, e.g., high-tech marketing, ingredient branding, corporate branding strategies, brand name choice criteria, brand hierarchy, brand migration, etc. The case also can be supplemented in a number of ways to incorporate current developments. Specifically, this is an excellent case for demonstrating, among other things, the following: 1) Added-value that a brand can provide over and above that offered by a generic product less than five years after the ingredient branding program began, Intel was ranked the third most valuable brand in the world 2) Challenges of marketing generations of products and brands 3) Critical importance of implementation 4) Complementarity of push and pull marketing 5) Challenges of combining an ingredient brand strategy with a corporate umbrella brand strategy and a sub-brand strategy 6) Role of branding in a highly competitive, constantly changing environment It is useful to begin the case discussion with a quick review of Intels history to provide some perspective and a few quick lessons. Intels shift from memory to microprocessors was a fortuitous one as their microprocessors became the industry standard. It is worthwhile for students to understand Intels broader business model and how they invested in research and development to create a competitive advantage for their products during this time. Their marketing strategies, however, were not as strong and they faced a number of challenges. In terms of naming, internally, a proliferation of numbers and letters created an alphabet soup of brand; externally, competitors could copy more or less but still use the same name. Moreover, 90

greater competition was emerging period. As a result, there was much consumer confusion as to who made a particular generation microprocessor and also what level of performance to expect from a particular product. Losing the court case in March 1991 and Cyrixs introduction of the 486 SLC chip in March 1992 brought Intels branding issues to the forefront. It is also important for students to understand how Intels target market strategy moved from a push to a pull strategy, with the mass market, non-technical business and home PC users in mind (e.g., the Circuit City or Best Buy shopper). At this point, the Intel Inside campaign can be analyzed. To provide some focus, it is useful to put the Intel brand hierarchy on the board. Intel Inside was an attempt to brand microprocessors as a whole. The word Intel established an umbrella brand for the company, while Inside established the company as an ingredient brand. The logic of such a strategy can be explored in terms of pros (e.g., efficiency of marketing expenses, simplicity of message, ability to transfer equity to new product categories) and cons (e.g., lack of product specificity). The implementation of the strategy also can be reviewed, combining pull marketing programs directed to consumers (in the form of media advertising) with push marketing programs directed to OEMs (in the form of co-op advertising). It is worth noting how consumer advertising nd rd st and cooperation from 2 and 3 tier OEMs put pressure on 1 tier OEMs to get with the program. The logic of the whole campaign must be spelled out: to create brand (and category) awareness for Intel as a microprocessor and a key ingredient to the computer, as well as linking two key brand associations (safety or upgradability and power or performance). This marketing program designing state-of-the art chips and communicating to consumers through a highly integrated push and pull program was remarkably effective in achieving those goals. Intel gained credibility in the process as a standard-bearer worthy of consumer trust, and, due to the high-tech fantasy look of their ads, gained some brand personality. It is instructive to ask students whether any other companies have adopted similar marketing strategies. In some ways, Gillette, Nike, and others play a similar game by pouring money into R&D to achieve technological advantages, adopting sub-branding strategies where the corporate brand is combined as a family brand with an individual brand that designates a particular type of technology. Minor improvements, on the other hand, are designated with a modifier as yet another brand element (e.g., Gillette Sensor Excel, Pentium II). It is also instructive at this point to broaden the discussion to have students identify success factors for ingredient branding in general. The 91

text reviews the concept of ingredient branding in Chapter 7 and offers several guidelines that can serve as a backdrop for this discussion (e.g., ingredients must matter and be instrumental to product performance in some way; ingredients must add value and be differentiated; ingredients must be noticeable or visible or there must be some means to identify and signal its presence; and there must be OEM or producer cooperation). The pros and cons for the host brand and the ingredient brand should also be considered. For example, in terms of the ingredient brand maker, there are many potential downsides: the promotional cost of the pull and push programs; the potential loss of control; the challenge to secure OEM acceptance and the possible power struggle and conflict that may ensue; the difficulty of managing the brand meaning; and so on. If desired and if time permits, the evolution of Intels ad campaign over the years and some of the lessons that they learned along the way can be reviewed. For example, the company learned how advertising can create personality and build a brand even with a technology product (e.g., with the graffiti ad campaign). It learned how focus on the brand in an ad could enhance brand awareness (e.g., with the measles ad campaign). Intels initial Intel Inside ads had very high consumer attribution scores, which meant if consumers remembered the ad, they also remembered the brand associated with the ad. It learned how television can be more effective at the brand level and how print can be more effective at the product level (e.g., with the Room for the Future ad campaign). In terms of this latter point, it is worth noting how tightly integrated this campaign was the visual of the print ad literally contains a key scene from the TV ad. Such coordination made sense given their dual brand and product communication needs (Chapter 6 of the text addresses issues with coordinated media). The discussion could also touch on the launch of the Pentium II chip and the bunny people spots to support their MMX sub-brand. MMX seemed like a logical way to communicate the new multi-media capabilities of their chip. The bunny people spots were consistent with the technological focus of Intel advertising, but they got the brand out of the inside of the computer and added desired personality. Once the characters got a life of their own, and began taking road trips in advertising, they distracted consumers from the desired message. Intels subsequent ads for the Pentium III, involving the performance-art collective Blue Man Group, can be critiqued, as can the Pentium IV ads with the group and later ads with alien spacecraft. The Blue Man Group ads were artistic and abstract and may have been able to create brand awareness, but were not technological or concrete. The alien ads focused solely on technology, but also contained personality. Students can debate the merits of these approaches. 92

After thoroughly reviewing the rationale for ingredient branding in general and Intels program in particular, the discussion can turn to Intels branding strategy. Intels criteria for choosing a name can be enumerated and critiqued. The pros and cons of the three candidate names can also be considered. At this point in time, given the length of time since the introduction, most students will feel quite comfortable with the Pentium name so it is important to bring them back into the case and the fairly negative reaction that the name initially received. It is important to remind students how almost any new name sounds bad at first. The thoroughness of the marketing plan to transition to the new name should be spelled out. The name certainly had merit and made sense as a lateral but not unrelated move in the numbering sequence that Intel had established. Some fruitful discussion can focus on Intels long-term branding strategy. What should the branding guidelines for successive generations of products be? Intels subsequent introductions of the Pentium Pro, MMX technology, Pentium II, III, and IV, Xeon, Celeron, and Itanium microprocessors can be discussed. Intels investment in Pentium as a brand has undoubtedly made them want to hang on to the name as long as possible to maximize their return on its equity. Where should they draw the line? The potential risks of using the Pentium name too long include losing the interest of consumers in subsequent Pentium line extensions, lack of technological differentiation from competitors, and building too much equity in the Pentium name instead of in the Intel umbrella brand. It would be interesting to discuss and evaluate the new brand strategy deployed in 2006, which received mixed reviews. Do they really need to go that far and abandon the existing branding? Is the company offering the optimal product portfolio? Will the new strategy turnaround the business? Depending on the technical sophistication of the students in the class, there can also be interesting discussion of where Intel can go as a corporate brand. Just what boundaries exist for the Intel brand? The mental map of Intel has a lot of abstract associations, which should enable brand movement beyond microprocessors. Yet Intel encountered difficulty expanding its brand, as detailed in the case. Students can discuss reasons for this difficulty and offer potential solutions. Finally, the case can serve as a backdrop for a discussion of high-tech marketing and branding. Some specific guidelines for high-tech products are included in Chapter 15 and may provide a useful starting point.

93

Key Lessons Success factors for ingredient branding strategy o Must convince consumers that ingredient matters o Must convince consumers that branded ingredient is better o Must create brand logo and means of identification o Must support strong pull program o Must enlist trade and retail cooperation Value of brand hierarchy as planning tool Rationale for umbrella branding in high-tech brand setting Rationale, challenge, and synergy of push and pull strategies Role of different advertising media to build brand equity o TV o Brand o Print o Product Importance of creating strong brand links in advertising Advantages of employing multiple brand elements

Discussion Questions 1. Was the Intel Inside campaign worth it? What were the factors that led to its success? Superior products Commitment to innovation Technological leader: eat your own children theory Little initial competition IBMs choice of Intels microprocessor architecture Clear, simple benefit positioning strategy Engagement of OEM support Play-to-win attitude Recognition of importance of end consumer: emphasis on push and pull Heavy marketing spending 2. Evaluate the Pentium family of processors. Did Intel make the right decision by extending the name through the Pentium 4 processor? Should the company consider changing the name of the next processor in the Pentium line? o Pentium family has clearly ordered hierarchy Initially, provided consumers with an incentive to upgrade 94

o o o o o

Consumers now see less difference between Pentium III and Pentium IV Lots of equity in Pentium name Reason to keep it for five generations But, potential hazard if name is changed New name would signal biggest leap in technology Once again provide incentives for customers to upgrade But, new name would not leverage Pentium equity

95

3. Suppose you were the Chief Marketing Officer for AMD. How would you propose the company position itself to better compete with Intel? Would you propose that AMD institute an Inside-like ad campaign? AMD management does not believe in Inside campaigns. Besides, it is not recommended to imitate Intel to avoid a follower image. AMD should focus on its core competencies, excel in the commodity-like memory business, and try to be ahead in cuttingedge technology and support its brands Athlon 64 and Opteron. As the director of worldwide consumer marketing said: you will probably never see us do a mass-marketing carpet-bombing approach.

4. Evaluate Intels segmentation strategy. Is having a good/better/best product line (Celeron, Pentium, Xeon) the best positioning for Intel? Should it discontinue a line(s) and focus on the other(s)? The best product line (Xeon) is designed for servers and powerful networks, which is a separate market with specific needs. The nature of the market, especially the American market, forces Intel to consider the low-end market. The fear of losing the high-end market drove Intel to focus on the low-end market as well. There is no room to allow for competition to gain ground.

5. In light of Intels move into the digital home, did the companys executives make the right decision in launching an entirely new brand identity? Did it make the right decision in changing a 37-year-old Intel logo and dropping the Intel Inside campaign for Leap Ahead? What other marketing strategies might the company employ? This is an excellent discussion point with students, especially that the new brand strategy received mixed reviews. Other marketing strategies include keeping the same brand name and logo and focus on a new positioning strategy without abandoning the existing branding.

6. Intel moved into consumer-electronics products, such as digital cameras in 2000, only to withdraw after receiving complaints from OEMs such as Dell. Does Intel face a similar issue with its move into the digital home? Does this move too far outside Intels core competency of producing microprocessors? This is a good point for discussion and answers will vary. 96

One point to consider is that Intel needs to diversify to grow the business and drive the stock price, and this wont happen without diversifying its business.

97

Got Milk?: Branding a Commodity Teaching Notes Summary This case concerns the marketing efforts of the California Fluid Milk Processor Board (CMPB) to stop a prolonged drop in milk consumption. The case describes the various groups involved in dairy promotion in California and the history and charter of the CMPB. The case also profiles the beverage market and consumer perceptions of milk, providing much background research in the process. A number of issues are raised concerning the development of an effective branding strategy for a commodity. Class discussion can revolve around the following sets of questions that students should consider before class: 1. What associations do consumers have for milk? What are the implications of these associations in terms of building brand equity for and increasing the consumption of milk? 2. Evaluate the CMPB marketing program. What do you see as its strengths and weaknesses? What changes would you make? 3. Evaluate their Hispanic marketing initiatives. Does the CMPB risk alienating its current consumer base? 4. There are several areas of growth that lay ahead of the CMPBhealth, cheese, Hispanic, and new channels of distribution. Given the trends, what should they do and how should they do it? 5. How long can the CMPB keep running the got milk? campaign? What can they do to keep the message and strategy fresh in the consumers minds? Are there other examples of other successful campaigns that ran this long? Teaching Objectives To examine the issues in branding o a commodity o a mature brand o a small share brand To examine issues in revitalizing product sales To consider the difficulty in changing consumer behavior To illustrate principles of effective brand-building advertising To demonstrate the design and implementation of an integrated marketing communication program

98

Teaching Strategy The CMPB case is one that students will find highly relevant and challenging. The marketing problem is clear Class 1 fluid milk consumption in gallons has declined 18% in California during the time period from 1980 to 1993. A good way to start the case is to ask students what associations they have to milk. Students will have little difficulty generating a whole list of associations some bad and some good. Students then can be probed as to what the implications of these associations have for marketing strategy. Many of the possible strategies that CMPB is considering follow naturally from these associations. At this point, it is also useful to review a little as to why milk experienced such a dramatic decline. Students should appreciate that a whole host of forces contributed to the decline, including changes in consumer lifestyles, changes in consumer attitudes toward milk, competition, and lack of marketing. The interesting question, of course, is: what could the CMPB do? Students can discuss what the CMPB target was and what its objectives were. The topic of market segmentation can be brought up relating to the CMPBs decision to concentrate on existing heavy users of milk, instead of new users or light drinkers. The arguments for and against the various segment options should be considered. Basically, the argument for concentrating on the current users was the immediate need to halt the sales slide and the latent potential that existed with that group. The objectives for that target market to increase their behavior should be contrasted to the traditional health messages that have been used for years. Consumers knew the health benefits a new tack was necessary. That is, a new and compelling point-of-difference was needed. Next, the logic of the relative deprivation strategy with got milk should be examined. The key point that students must realize is the power and meaningfulness of turning around milk with food to food without milk. The cleverness of this positioning strategy is matched by the brilliance of the creative strategy of the ad executions. The concept is brought to life by placing ordinary people in amusing situations where the consequences and pain of not having milk at the right time is made abundantly clear. In other words, the campaign demonstrates the hallmark of a great ad campaign a great message strategy (i.e., what you say) combined with a great creative strategy (i.e., how you say it). Moreover, the tag line and slogan, got milk, is a powerful two-word expression of what the campaign is all about. Its simple and includes a 99

call for action. As such, it represents a wonderful hook to the ad campaign and helps to lay the foundation for an integrated marketing communication program. Thus, one final take-away point about the campaign is that it represents a highly integrated marketing communication program. The ad message is cleverly reinforced at the point of purchase not at the milk section so much as the cereal, cookie, cake sections etc. where the got milk reminder can have the greatest impact. The CMPBs use of joint promotions with packaged-foods companies, shelf talker advertising in supermarket aisles, branded checkout dividers, and strategically placed billboard ads all served as further reminders for purchase. During this time, it is useful to bring up the challenges of being a small share, limited resources brand competing with the big boys in a competitive marketplace. Push the students as to what general guidelines make sense (Chapter 15 of the text has some relevant material on branding for small business). For example, marketers of small share brands, such as with the CMPB must be 1) more creative and 2) more focused than the major brands. Greater focus can occur in terms of products, markets, and media. The point is that small share brands cannot afford to apply the broad brush and make the mistakes that major brands do they just do not have the marketing muscle to bail them out. Another useful way to wrap up the discussion is to compare this campaign to the milk mustache print ad campaign. While retaining a health message, the milk mustache ad campaign has evolved executionally over the years from models and the tag line What a Surprise to a wide variety of celebrities from all walks of fame and the tag line, Where is Your Mustache? The newer tag line clearly was a stronger call for action but the campaign would not seem to have the strong behavioral focus of got milk. On the plus side, however, it would seem to be a means to update the image of milk and make it more relevant and contemporary. Comparisons to the California raisins campaign can be made along those lines. Furthermore, a discussion on the different ethnic groups in the United States would lead to the Hispanic buying habits and milk consumption. Students are encouraged to propose ideas to expand the campaign idea to other products (example: Got Cheese?). Finally, students can explore new ways to expand the distribution of milk, leading to a discussion on vending machines, McDonalds, etc At this point, discussion can address next steps for the got milk campaign as it went national. The got milk tagline was licensed for use in the milk mustache ads, which added another layer to the integrated 100

marketing strategy. Got milk became a bona-fide cult phenomenon, and the dangers of overexposure could be discussed here. Students can discuss the difficulty of evolving a highly creative campaign over time without straying too far from the core qualities that made the campaign successful or using too much repetition. The CMPB attempted to update the milk deprivation formula by creating Drysville, a town without milk. Reasons for the failure of this campaign should be discussed, and students can make suggestions of how to move the got milk campaign forward. Discussion Questions 1. What associations do consumers have for milk? What are the implications of these associations in terms of building brand equity for and increasing the consumption of milk? Consumer Associations Healthy Consumed at home Goes well with certain other foods Commodity product Virtually no image component Implications for increasing consumption Target consumers in the home Tie consumption occasions with other food Awareness already high, and image not likely to improve o Needed to develop a unique and unexpected marketing campaign

o o o o o o o o

101

2. Evaluate the CMPB marketing program. What do you see as its strengths and weaknesses? What changes would you make? o o Strengths Clever Effective (stopped decline) o Strong tagline can be leveraged across multiple communication platforms Weaknesses Ad execution eventually repetitive Stopped decline, but did not lead to increased sales 3. Evaluate their Hispanic marketing initiatives. Does the CMPB risk alienating its current consumer base? Large Hispanic population Heavy milk drinkers Deprivation concept was not funny for them Sacred ingredient: family, love & milk Campaign was very successful Risk of alienating current consumer base is low (2 different cultures; 2 different languages) 4. There are several areas of growth that lay ahead of the CMPB health, cheese, Hispanic, and new channels of distribution. Given the trends, what should they do and how should they do it? Health: trend that should be pursued Cheese: an opportunity among Hispanics New channels: sources of growth 5. How long can the CMPB keep running the got milk? campaign? What can they do to keep the message and strategy fresh in the consumers minds? Are there other examples of other successful campaigns that ran this long? Problems relate to the weaknesses described above Difficult to increase consumption for reasons described above Possible Remedies: o Expand flavors (Greater variety; Milk becomes less a commodity, more a beverage) Expand usage occasions (Portability leads to greater usage) Push strategy (Milk is highly profitable in retail)

o o

o o

102

o Expand through other channels (Half of meal occasions outside home)

103

General Electric: Branding in Business to Business Teaching Notes Summary This case focuses on the marketing and advertising efforts that have been done by General Electric throughout the years to build a corporate brand and establish a personal brand identity. Immelt- General Electric ninth CEO- has to decide on the direction of General Electric within the coming years. Immelt who has officially held the position of General Electrics CEO few days before September 11, 2001 has been faced with a lot of challenges since day one. These challenges are mainly a struggling economy, rising fuel costs and global warming. The main issue at the current time is what other extensions or modifications to General Electrics brand strategy could be done in order to maintain its position within the global market. Class discussion can revolve around the following questions that students should consider before class: 1. Discuss the importance of B2B marketing and a strong B2B brand. How does it differ from consumer marketing? 2. Did Jeff Immelt and Beth Comstock do the right thing by dropping We Bring Good Things to Life for Imagination at Work? Why or why not? 3. Has Imagination at Work, Ecomagination, and Healthcare ReImagined changed GEs brand? If so, how? Is it a good change or not? 4. Can Immelt transform GEs approach of innovation (risky, unknown areas like fuel cells, solar energy, hydrogen storage, and nanotechnology) versus past strategies of improvements of current technologies? 5. What should Henson do next for GEs brand strategy? Teaching Strategy This case can generate and support discussion on a number of topics, e.g., B2B marketing, Building a corporate brand, establishing a brand identity, role of marketing campaigns in reflecting the companys vision, etc. Specifically this is an excellent case for demonstrating, among other things: 1) The importance of having a recognizable brand 2) The benefits of having a diverse portfolio of products unified under one corporate brand 3) The importance of having a personal brand identity

104

4) The necessity of adapting to the changing environment by continuous marketing and advertising campaigns that reflect the direction of the company at a certain stage It is useful to begin the case discussion with a quick summary of the performance of General Electric from its early start up till the current time. It would also be useful to discuss General Electrics different divisions in order to make sure that the students have a correct picture of the size and level of General Electric and its position within the global market. The importance of marketing and advertising efforts should be focused upon. General Electric had given attention to marketing efforts since its early start up. The focus at the early stages was on the consumers and providing them with good products. General Electric kept focusing on consumer advertising for a long while till its slogan became a household slogan for a number of years. It is useful to discuss the slogans of the campaigns that were developed in order to build a consumer brand in order to give an insight of the goals that were intended to be delivered and what kind of brand General Electric wanted to build through these campaigns. It would be helpful if these campaigns were briefly discussed in order to provide the students with the evolution in the branding strategy. Furthermore, analysis of the slogan of each campaign would give an insight that a certain extension was made to the overall corporate brand in order to serve the circumstances of the time. The first of these campaigns was the one that had the slogan of The Initials of a Friend GE while the last of these campaigns was the one with the slogan Progress for People. After discussing the different campaigns that were developed with the focus of building a consumer brand then the shift towards B2B marketing and building a strong B2B brand is to be discussed. Additionally a discussion of how this shift marked a new era of growth and expansion for General Electric would help in highlighting the differences between consumer marketing and B2B marketing. This shift was adopted by General Electrics top management. This could be used to reflect the benefits that a company could reap when its top management realizes the importance of branding and how it helps to set the tone for the overall organization. It is also instructive at this point to direct the attention of the students to the positives of building a campaign on the success of those that preceded. Meaning that each campaign did not cancel what the previous campaigns slogan was developed to convey. On the contrary, a new Tagline for a new campaign was a kind of an extension to the brand. 105

After discussing the characteristics of B2B marketing it would be useful if the discussion touched upon the specific case of developing the campaign Imagination at Work. The importance of engaging the employees before the launch of the campaign is a very important point that has to be tackled. Adoption of a new campaigns slogan has to come internally first before it could be conveyed to the public. It is fruitful to discuss the role of marketing research and getting validated and verified statistics in order to judge the success or failure of a campaign. No judgment is to be made only based on reviews and assumptions instead, accurate data should be the basis for judgment. As sometimes, the reviews tend to dislike a campaign and make it seem a failure while actually consumer surveys reflect the opposite and assure that the desired outcomes were achieved. Key Lessons Importance of having a corporate brand Importance of B2B marketing Effect of marketing campaigns taglines on a brand Advantages of employing an extension strategy for a brand Value of building a new campaign over the success of those preceding it Importance of internal branding Discussion Questions 1. Discuss the importance of B2B marketing and a strong B2B brand. How does it differ from consumer marketing? Fewer customers Impress home buyers not home builders 2. Did Jeff Immelt and Beth Comstock do the right thing by dropping We Bring Good Things to Life for Imagination at Work? Why or why not? Mixed reviews Resonated well with customers More contemporary Risk of abandoning a successful campaign that required heavy investment

106

3. Has Imagination at Work, Ecomagination, and Healthcare Re-Imagined changed GEs brand? If so, how? Is it a good change or not? Yes, from a consumer-oriented to a stockholder-oriented approach From an emotional to an innovative & responsible image Students are encouraged to discuss the effects of each of these strategies. 4. Can Immelt transform GEs approach of innovation (risky, unknown areas like fuel cells, solar energy, hydrogen storage, and nanotechnology) versus past strategies of improvements of current technologies? It is possible if there is enough consistency in the strategies deployed. However, it is quite challenging because the past strategies have been utilized for a long period of time. 5. What should Henson do next for GEs brand strategy? Apply the innovation approach and use extensive marketing research to validate the success of the campaign. Extend the brand to areas that reinforce the new approach. Students are encouraged to discuss and argue with the suggestions raised.

107

Red Bull Building Brand Equity in Non-Traditional Ways Teaching Notes Summary The Red Bull case is unique because it deals with a single product that found new ways to build a brand in a very competitive category. It is a good case to supplement students learning about non-traditional marketing methods. Red Bulls founder, Dietrich Mateschitz, was an experienced marketing professional and approached the creation of Red Bull from a branding perspective. Red Bull essentially invented a new category energy drinks in Western markets, and marketed its product without much above-the-line advertising. The product was the primary marketing tool, and as a private company Red Bull exercised control over the distribution of its product. The company expanded very selectively into new markets, yet still achieved exponential growth. Red Bull became one of the major success stories in the highly competitive beverage market in the 1990s. Students should consider the following questions as a basis for discussion: 1) Describe Red Bulls sources of brand equity. Do these sources change depending on the market or country? 2) Analyze Red Bulls marketing program in terms of how it contributes to the brands equity. Discuss strengths and weaknesses. 3) How can Red Bull maintain its marketing momentum? Would you recommend that Red Bull develops any brand extensions? If so, what would they be? Would you use the same marketing strategy? 4) Evaluate Red Bulls move into herbal teas, fast-food chains, and magazines. Does it make sense for the company to expand into these areas? What are the potential benefits and dangers? 5) Because product usage was not marketed as being limited to one or even a few occasions, Red Bull users could continue to use the product even as their priorities shifted. The case states that, a Red Bull consumer first attracted to the product as a nightlife enhancer in his or her early twenties might later use the drink as a morning pick-me-up or a revitalizer during a long day of meetings. How effective is Red Bull at advertising to these varied groups? Teaching Objectives

108

1) To discuss how to build awareness and image using nontraditional marketing methods 2) To analyze channel and distribution strategies 3) To analyze the implementation of a global marketing program 4) To examine the task of dealing with competition

109

Teaching Strategy The Red Bull case can be used in tandem with the Starbucks case, since it reinforces many of the same points. Red Bull is a good case to discuss selection of brand elements, implementation of a marketing program, building a brand using non-traditional marketing means, and outlasting competition. Since the product is the star for the brand, the case goes into much detail about the history and design of Red Bull. Students can be asked to describe the product, since many will be familiar with the beverage, and analyze the brand elements. They should come up with something along the following lines: Flavor o Medicinal taste reinforces efficacy o Carbonation gives refreshment, energy, and mixer associations Packaging o New size & unusual shape creates interest o Single-serve cans, no multi-can packs, reinforced premium positioning o Visually appealing silver-and-blue Ingredients o Caffeine, taurine, other energy ingredients allow Red Bull to make claims about health benefits o Sugar for flavor Positioning o Revitalizes body and mind o Broad positioning, drink suitable for any occasion when consumer needs a lift o Early adopters: athletes, clubbers, hipsters, gives drink cachet/exclusivity Price o At least 10 percent greater than nearest competitor o Stakes out premium price point o High price makes health claims plausible in minds of consumers

Students can be asked to analyze these brand elements in terms of their establishing points-of-parity and points-of-difference with other beverage brands. Points-of-parity and points-of-difference can be expressed in relation to usage occasions as well, as depicted in Figure 1 of the case. Red Bull relied on a word-of-mouth strategy to build awareness for the product in the early stages of its launch in Austria. The company made 110

Red Bull available in convenience stores, bars, and clubs, giving access to the groups of consumers who began drinking the product ravers, clubbers, young people and formed the user imagery. As more people began drinking Red Bull, word of the products benefits spread throughout the country and beyond its borders. Because the product was not available for sale outside Austria for five years, a mystique developed around Red Bull and demand for it led to its appearance on black markets in other countries. Here the discussion can touch on topics from Chapter 6, such as buzz marketing and mixing and matching communications. Students can be asked what moves Red Bull made and what factors were unintentional that led to a buzz marketing effect. Students can also be probed as to what other companies can learn from the brand and how it is being marketed. As Red Bull began to expand into other European countries, its marketing program became more sophisticated. Many of the lessons from Chapter 14: Managing Brands Over Geographical Boundaries and Market Segments will be useful in this part of the discussion. Students can be asked to enumerate the aspects of the marketing program: television advertising, point-of-purchase marketing, sports marketing, sampling, event marketing, and college marketing. Each aspect can be analyzed for its contribution to brand equity. Red Bull also exercised control over the distribution of the product, limiting the number of locations and the type of locations in which the drink was to be sold upon entry into a market. In the U.S., Red Bull adopted a cell approach to break the country down into manageable geographic segments. This limited launch strategy contributed to a buzz marketing effect because it was designed to reach the early adopters most likely to influence the general public. The Red Bull refrigerated units that appeared in bars, clubs, and convenience stores, as well as the van teams that distributed exclusively Red Bull, served as push strategy. Students can compare Red Bulls push strategy with its pull strategy. As Red Bull became more widely known, a variety of competitors emerged. These competitors pitched consumers with a number of positioning options, ranging from energy-focused to party-focused, but none had the broad positioning of Red Bull. Students can discuss how the competitors limited positioning options in terms of usage occasion could effect Red Bulls positioning, as discussed in Chapter 3. Students can also examine Red Bulls strategies for dealing with competition, which include pre-marketing, price premiums, and adhering to its marketing program. Here it may also be useful to discuss other alternatives, such as a lower-priced fighter brand extension or an extension with a narrower positioning. This can lead to the broader question of how Red Bull can continue its exponential growth as its markets near maturity. In its first market of Austria, Red Bull achieved 111

per-capita-consumption increases every year except one since its debut, but the question remains if the company can replicate this success in other markets. Lessons from Chapter 13: Managing Brands over Time, can be applied here. Key Lessons Red Bull was created from a strong strategic branding foundation Red Bulls ability to support health benefit claims with product efficacy helped to create a successful marketing program By targeting specific consumer segments and employing clever push strategies, Red Bull built awareness and image with little initial marketing expenditures Integrated marketing communications and much buzz marketing helped to maximize the benefits of Red Bulls marketing campaigns

112

Discussion Questions 1) Describe Red Bulls sources of brand equity. Do these sources change depending on the market or country? Sources of equity Product efficacy Hip image Limited availability Association with athletes/sports Multiple consumption occasions Sleek packaging Changes depending on market or country o Red Bull employs the same marketing strategy in every new market, so many sources of equity remain consistent across markets Major consumption occasions may vary by market Importance of sports association varies by market 2) Analyze Red Bulls marketing program in terms of how it contributes to the brands equity. Discuss strengths and weaknesses. Highly integrated, all marketing efforts consistent with fundamental promise of efficacy Limited availability at time of launch builds buzz awareness, also highly targeted in terms of user imagery Advertising mainly awareness, but some image component in terms of conveying consumption occasion and humor Sports marketing primarily image Point-of-purchase/on-premise mostly awareness, also image in terms of placement Sampling program builds awareness, product dispensed when consumers most likely to appreciate its affects 3) How can Red Bull maintain its marketing momentum? Would you recommend that Red Bull develops any brand extensions? If so, what would they be? Would you use the same marketing strategy? Red Bull should continue expanding in other countries using its successful positioning strategy based on occasions. Brand extensions could be considered, but marketing research needs to be conducted to assess the effect of such extensions on the image of the brand. Lower-priced extensions as well as extensions to new product categories are possible options.

o o o o o o

o o

113

 Consistency in the marketing strategy deployed is highly recommended unless marketing research proves otherwise. Discussions of different examples would be very useful in this case. 4) Evaluate Red Bulls move into herbal teas, fast-food chains, and magazines. Does it make sense for the company to expand into these areas? What are the potential benefits and dangers? o o o o o Evaluation is subject to class discussions and arguments Benefits Diversify and grow the business Capitalize on the diverse target markets Herbal tea would be consistent with the healthy image A magazine could generate good publicity to the brand Dangers Fast-food chains could be risky to the healthy image 5) Because product usage was not marketed as being limited to one or even a few occasions, Red Bull users could continue to use the product even as their priorities shifted. The case states that, a Red Bull consumer first attracted to the product as a nightlife enhancer in his or her early twenties might later use the drink as a morning pick-me-up or a revitalizer during a long day of meetings. How effective is Red Bull at advertising to these varied groups? Successful among several age ranges (14-19; 20-29; and 29-39: See Exhibit 2) Students are encouraged to evaluate some examples and advertisements, and compare the effectiveness of this strategy to the performance of the brand in the market.

114

MTV Building Brand Resonance Teaching Notes Summary MTV was established in 1981 as a maverick pioneer in the burgeoning cable television industry. Over the next 20 years, MTV moved from the fringe of television culture in America to the core of pop culture in countries all over the world. The key to MTVs success in each market was its ability to connect with the young consumer. As young consumers grew older, the challenge for MTV was to establish connections with new groups of young consumers. This led to a constant cycle of reinvention. With a few exceptions, at each crossroads MTV was able to find the right mix of music and culture to capture the viewership of successive generations of young people, both domestically and internationally. This case examines the key decisions and factors that enabled MTV to accomplish its rise as a global media network from its humble origins. The following questions will be useful as a guide for class discussion: 1. What is the MTV brand image? How valuable are the MTV brand associations? What should its core values be? 2. Describe the current sources of MTVs brand equity. How have they changed over time? How have they remained constant? 3. What is the role of music within MTV? 4. Technology is changing the way viewers watch television and interact with programs. Discuss the role of the Internet and technology within MTV. What has MTV done well to date to integrate technology with the brand and what else should MTV do? 5. MTV Networks includes many sister channels such as Nickelodeon and Spike TV. How has MTV been positioned within this network versus the other channels? Is this the right strategy? What else would you do to optimize the MTV Network brand portfolio? 6. Over the years, MTV has evolved from a channel about music to a channel about the culture of music to a channel about culture. What does the future hold for MTVglobally and domestically? Teaching Objectives 1) To analyze the components and key issues of building a media entertainment brand 2) To examine the value of awareness-building advertising 3) To review the process of building brand resonance 4) To overview establishing points-of-parity and points-ofdifference 115

5) To examine corporate branding strategies vs. product branding strategies 6) To analyze managing a brand portfolio

Teaching Strategy The MTV case, as the title indicates, details the process by which MTV built brand resonance with consumers. The case includes a lot of historical detail that students may or may not be familiar with. The case also addresses many contemporary issues that may not be familiar to older students. Yet, most everyone will have heard of and watched MTV and will therefore be able to participate in the discussion. This is a good case to use in the beginning of the term, since it reinforces many of the points about building brand equity from Chapter 1 and Chapter 2. The case begins by recounting the early history of MTV. At the time of its launch, the concept of music videos was relatively novel and certainly the idea of an all-music video channel had not been seriously considered by many television executives. Students can be asked to list the elements of the brand, including the music videos, the VJs, the logo, the studio from which broadcasts were taped, and so forth. According to company employees, the name itself was selected for lack of better alternatives, but the visual look of the channel, from the videos themselves to the VJ loft to the moon landing logo, were carefully designed and/or selected to reflect the core values and key associations of the channel. Students can be asked to enumerate these values and associations, which include music, youth culture, subverting established culture, fun, no rules, no parents, creativity, excitement, and so forth. A mental map is a fruitful way to capture this input. Then students can identify how each element of the MTV brand reinforced these values and associations. This discussion can be tied in with lessons from Chapter 4: Choosing Elements to Build Brand Equity. The other two main ways to build brand equity can also be reviewed along the same lines. MTVs decision to make the channel the star over the individual artists was key. It enabled the channel to reinvent itself numerous times over the next 20 years without sacrificing equity built up in artists or genres. While MTV did have strong associations with certain genres such as 80s pop, 90s gansta rap and grunge that hurt the image of the brand when these genres fell out of favor, the channel was able to capitalize on the next trend. This is analogous to pursuing a corporate brand strategy over a product branding strategy. Students can discuss the advantages and drawbacks of a corporate brand, as detailed in Chapter 11. The videos and the stars MTV broadcast can be thought of entities 116

that provided secondary associations for the channel to leverage in order to build brand equity. Students can consider what associations this channel content provided and what contributions to equity it made. MTVs initial marketing program was an integral part of its success nationally. Students can be asked whether MTV needed to concentrate on image or awareness in the early stages of brand building. The answer, as the customer-based brand equity model indicates, is that awareness should always be the first step. MTV knew from initial results in its first markets that the target audience would respond favorably to the channel, the hard part was getting cable providers across the nation to carry the channel. So the marketing strategy was designed to elicit customer demands from the cable companies that they carry MTV. Class discussion can evaluate the strategy of using celebrity endorsers in the advertising as well as the media buy schedule that attacked key markets for a few weeks at a time until demand was high enough that cable providers adopted the channel. The large part of the discussion can center on how MTV achieved brand resonance in its first era of growth in the early 1980s. Students can apply each of the six brand building blocks to understand how MTV viewers took the steps from brand salience to brand resonance. In terms of the first step, brand salience, MTV was able to establish deep awareness in its category because of the lack of competitors and broad awareness because of the richness of the programming available to viewers of the channel. With the second step, brand performance, MTVs stylish and artistic videos and design features, as well as the programming of hot videos its viewers wanted to hear, led to a high perception of brand performance among consumers. The next step, brand imagery, is one area where MTV excelled above most other cable networks. The television medium consists of images, which made it easy for MTV to convey a variety of imagery components and personality traits. Students can be asked to list MTV imagery associations and personality traits, both historically and currently. Next, consumers brand judgments of MTV were typically positive based on the following four components: brand quality, brand credibility, brand consideration, and brand superiority. Students can discuss how MTV achieved each of these four components. The quality production values of the videos and other programs led to consumer perceptions of quality. The down-to-earth VJs lent credibility to the brand, as did the exclusive world premier videos and studio visits from the major stars. MTV had high levels of brand consideration due to the high awareness and the uniqueness of the product. For similar reasons, and for the favorable consumer response to the brand, MTV also achieved brand superiority. As a result, MTV attained brand resonance. 117

The discussion can now move on to the four components of brand resonance: behavioral loyalty, attitudinal attachment, sense of community, and active engagement. Again, the instructor can solicit examples of how MTV achieved each component. In the early years, MTV built loyalty and attitudinal attachment primarily with the music videos and the general look and feel of the channel. To build a sense of community and active engagement, MTV used VJs, held contests, hosted award shows, and ran some long-form programming. MTV improved the sense of community and active engagement of its viewers in the early 1990s by developing long-form programming such as the Real World, Road Rules, and Beavis & Butthead. Further developments in the 1990s included the live call-in show Total Request Live (TRL), the Tom Green Show, and Undressed. With the exception of TRL, none of the long-form programs mentioned above were explicitly music-based. Instead, they were musically-infused. This can lead to discussion of where MTV is headed and how it can maintain resonance as it added new long-form programming such as The Osbournes and MTV Cribs that did not expressly focus on music. Among the many other topics of discussion include the numerous MTV brand extensions. This can lead to a discussion of brand hierarchy and the brand portfolio, and can be tied in with concepts from Chapter 12: Introducing and Naming New Products and Brand Extensions. MTVs growth on the Internet, as well as competition from Internet music sources, is another area for discussion. Another topic is MTVs global expansion, which can be related to the ideas from Chapter 14: Managing Brands over Geographical Boundaries and Market Segments. Finally, the class can conclude with discussion of MTVs longevity and the future challenges of remaining relevant and reinventing the brand repeatedly. This topic can be tied in with Chapter 13: Managing Brands over Time. Key Lessons MTV used an innovative idea combined with brand management to build a strong brand Building awareness is the vital first step in the customer-based brand equity model MTV designed its brand to be more powerful than the stars featured in the content MTV found new ways to build brand resonance, including long-form programming and interactive viewing MTV used constant reinvention and changed the tastes of its viewers to establish long-term brand resonance

118

Discussion Questions 1) What is the MTV brand image? How valuable are the MTV brand associations? What should its core values be? Youth Global + Local Channels Relevant Trendy

2) Describe the current sources of MTVs brand equity. How have they changed over time? How have they remained constant? Sources of equity o Leading cable music channel, high availability o Numerous image associations, multiple genres of music represented o Sustainable long-form programming attracts repeated viewership o High ratings among key teenage demographic, particularly among females Changes over time o Represented fewer genres originally, but audience wasnt as fragmented then o Viewership not as heavily weighted toward young teenagers in past o Significantly less long-form programming in past, significantly more videos, less lifestyle element to channel early on

3) What is the role of music within MTV? The channel is the brand not the individual stars Music is the original core of the business Culture of music and everything around it MTV is evolving into a network about culture

4) Technology is changing the way viewers watch television and interact with programs. Discuss the role of the Internet and technology within MTV. What has MTV done well to date to integrate technology with the brand and what else should MTV do? 119

Internet builds for sense of community, active engagement for MTV brand resonance Used in viewer votes, scrolling chat boxes, links for more information Not as integrated into non-interactive content programs on MTV Not a high-traffic destination for music and info online

5) MTV Networks includes many sister channels such as Nickelodeon and Spike TV. How has MTV been positioned within this network versus the other channels? Is this the right strategy? What else would you do to optimize the MTV Network brand portfolio? VH1 adopted older positioning, in turn made MTVs positioning younger, generally positive affect on equity MTV2 played more music, made many viewers nostalgic for the way MTV used to be, potentially negative affect on equity Various genre-specific offshoots reflective of audience fragmentation, could lead to lower ratings for parent network but only available on satellite and digital cable networks at the time 6) Over the years, MTV has evolved from a channel about music to a channel about the culture of music to a channel about culture. What does the future hold for MTVglobally and domestically? After developing a successful model, global and local competition is expected to be fierce. Students are encouraged to discuss the emerging competitors in this area. It is possible for MTV in the future to consider extending the brand to different products that are consistent with the culture theme. MTV might consider using the internet and the new technological channels to reinforce the strength of the brand.

120

Nike: Building a Global Brand Teaching Notes Summary This case concerns the development of Nike's international marketing program. Although Nike met with great success in thwarting Reebok's competitive thrust in the U.S., overseas markets posed many challenges. The case concentrates on the European and Asian markets and provides some historical marketing perspectives. The issue faced by Nike is how to best build global brand equity. The case focuses on some key marketing decisions in 1992 and 1993 and then focuses on the subsequent challenges Nike faced, including an image crisis as well as intensified competition. Further, a discussion on expanding Nikes brand portfolio is presented. Class discussion can revolve around the following sets of questions that students should consider before class: 1. How would you characterize Nikes brand image and sources of brand equity in the United States? 2. How have Nikes efforts to become a global corporation affect its sources of brand equity and brand image in the United States, Europe, and Asia? 3. Are sponsorships and endorsements vital to Nikes business? For instance, what effect would Nike becoming an official sponsor for the Olympics have on the companys relationship with consumers? 4. Why did Nike become a target for critics of globalization? Do you think Nikes response to allegations of unfair global labor practices was appropriate and/or effective? Is Nike truly concerned about these issues? 5. Evaluate Nikes acquisitions and the brands now under its control. Do these acquisitions make sense for Nike? What, if any, brands should Nike try to acquire next? 6. How important is fashion to Nike? Are they a performance apparel company, or a fashion company? What is more important for Nike when they enter a new market like China? Fashion or performance? 7. Should Nike do anything different to defend its position now that Adidas and Reebok have joined forces? Teaching Objectives 1) 2) 3) 4) To examine issues in global branding To demonstrate the value of integrated marketing To consider how to manage a strong brand To explore PR issues for established brands 121

Teaching Strategy The Nike case is similar to the Levis Dockers case in that it is a brand with which every student will no doubt have experiences and opinions. The value to the case discussion is that students can still learn some valuable lessons about Nike and their marketing expertise. A good place to start the case discussion, after a quick summary of the historical origins of the brand, is in 1988, a time when Reebok held a sizable market share lead (30% to Nikes 18%). In fact, some students may have already been exposed to the HBR case that deals with Reeboks integrated marketing communication program from that time. Students can be asked to identify Reeboks and Nikes brand image at that time. Essentially, Reebok has concentrated on creating associations to comfortable, fashionable, and for women. If students seem to be struggling, just remind them that Reeboks growth was driven by aerobics shoes and then ask them what associations might that suggest. Prior to 1988, Reebok was also seen as a hip, cool brand but, by this time, they were seen as a much more mainstream brand. The Nike brand image should be easier for students to elicit. Key brand associations were created to performance, high tech, top athletes (e.g., Michael Jordan), and sports. It should be pointed out how consistent, cohesive, and reinforcing this brand image was (and still is). It is important to ask students how this brand image was created to provide a point of reference for the discussion about Europe and other areas of international expansion. Basically, the brand was built from the ground up in a grass roots effort. It is worthwhile to note the duality of the brand image and how this characterizes strong brands. Nike has strong product performance associations (remind students what an innovation air technology was) as well as user and usage imagery. Nikes advertising in general, and the Just Do It campaign in particular, can be analyzed some in terms of its contribution to brand equity. The power of the slogan a three word summary of the self-empowerment that the brand represents can be emphasized. After analyzing the Reebok and Nike brand images, their respective positionings can be considered, time permitting. Nikes point-ofdifference is clearly performance. Reeboks point-of-difference was style. Their respective points-of-parity follow from there. Students can be asked to judge the two positionings in terms of desirability and deliverability. The former is a question of how strongly the pyramid of influence operates in this market. At the top of the pyramid is the competitive athlete, which makes up roughly 5 percent of shoe buyers. Next, the weekend warrior or casual athlete makes up the next 15 122

percent. Since the vast majority of athletic shoes are never used for anything more athletic than walking, the base of the pyramid 80 percent of the total is the non-user. Some students might argue for Nikes high-end trickle down approach of using top athletes to represent the brand, while others will endorse Reeboks mass-market approach. Deliverability is less controversial however as Reeboks UBU is a huge misstep as compared to the focused, well-executed Just Do It campaign. The depth of the analysis of the U.S. experience will depend on the time available. To address the challenge of building a global brand, students must appreciate how the brand was built in the U.S. In particular, it is important to point out Nikes internal brand mantra, authentic athletic performance, and how it helped to guide brand-building efforts. Once the American experience has been covered to the degree desired, discussion can switch to the European market. A good opening question here is to ask students how brands should be built in a different geographical market. The answer, of course, is that they must be built from the bottom up just as had been the case in the original domestic market. The actual means by which they will built, however, may differ. In other words, the strategy will be the same awareness first and image next but the actual tactics in terms of the three main ways to build brand equity may differ. With this backdrop, students can then be asked what challenges existed for building brand equity in the European market in 1992. Perhaps the most important challenges were that: 1) the brand did not have the history nor heritage in the market and was starting more from scratch and 2) European consumers may vary in significant ways from Americans in terms of their sports experience. Students can be probed as to the severity of these challenges. Students from Europe may want to be asked to comment on attitudes towards sports over there. Next, students can be asked how Nike changed its formula from the U.S. market. As the case points out, they over-relied on their current U.S. marketing program, mainly for budget reasons. A key lesson for students is that just because an ad campaign or some other aspect of the marketing program seems to work in an overseas market doesnt mean that it the right thing to do to build brand equity. Europeans may have liked and been entertained by Nikes advertising but not reached the level of understanding about the brand that Nike would have desired. In particular, the mantra of authentic athletic performance needs to be translated in a meaningful way. Nike had to change its sponsorship approach, making soccer a big part of this shift. Nike also had to change its advertising, making it less aggressive and more representative of consumer tastes in Europe. It also had to become more involved on a grassroots level with club sports, school teams, and local events. Students should be probed as to what building the brand 123

from the bottom up or with a grassroots approach entails. Nikes approach in Asia was similar, with similar results. The case discussion can be extended with a look at Nikes image problems in the late 1990s. Students can identify the various contributors to these problems, such as labor relations, swoosh ubiquity, endorsement proliferation, and aggressive marketing. Nike became a lighting rod for criticism from various citizens groups, both domestically and abroad. Here, a discussion of the challenges of becoming a global brand in the 21st century can be useful. A global economy enables brands to vastly expand their reach geographically, yet at the same time accountability increases as well. Students can discuss Nikes steps to remedy its various image problems, evaluating them for their effectiveness. Also, the topic of global marketing can be addressed here. Students can enumerate the pros (e.g., economies of scale in production and distribution, lower marketing costs, consistency in brand image, scope, etc.) and cons (e.g., differences in: consumer behavior, consumer response to marketing, brand and product development, competitive environment, legal environment, etc.) of global marketing. Nikes marketing activities can be evaluated in terms of how they dealt with these benefits and drawbacks. Chapter 14 contains much information on managing international brands. Complicating Nikes ability to grow its brand was a global economic downturn in the late 1990s. Regardless of the prevailing economic conditions, Nike faced many challenges achieving growth with its brand. In many markets, demand for its footwear was not as high as it had historically been. Nike made successful moves into apparel, but its equipment business was still a small piece of the business. Students can discuss the benefits and hazards of leveraging Nikes brand equity over a wide range of non-footwear products. International growth continued to be strong, however, particularly in Europe and Asia. Discussion can include an evaluation of Nikes future prospects for growth in international markets. Latin America, Africa, and Asia, especially China, could be thoroughly analyzed. Also, Nikes brand portfolio expansion through acquisitions is an interesting issue to debate and analyze.. As a high profile brand, Nike is always in the news, and students always like to talk about the brand. The key to guiding this discussion is to make sure students are applying course concepts to do so. Key Lessons Importance of creating a strong foundation for brand equity o Depth/breadth, rich, cohesive brand image 124

Advantages of brand mantra for brand focus Importance of proper positioning Value of strong corporate brand Dangers in taking short-cuts in building a strong global brand

Discussion Questions 1) How would you characterize Nikes brand image and sources of brand equity in the United States? Brand image o Elite athletes o High technology o Expensive/premium o Running o Irreverent o Aggressive o Cool Sources of equity o Heritage as an athletics-focused brand o Emphasis on technological advancement o Association with top athletes o Premium price positioning o Attitude as conveyed in marketing program Transferability o Image and equity would work for most sports o For some newer action sports, associations not as transferable o Sport is a constant in society, associations could transfer across geographical boundaries o Not as transferable for non-athletics products

125

2) How have Nikes efforts to become a global corporation affect its sources of brand equity and brand image in the United States, Europe, and Asia? Requires a diversified portfolio of athletes, covering all popular sports globally. Consider the bottom-up approach in each market, while maintaining the original strategy of building awareness first, and then image later. Students are encouraged to compare Nikes image and performance in different countries. 3) Are sponsorships and endorsements vital to Nikes business? For instance, what effect would Nike becoming an official sponsor for the Olympics have on the companys relationship with consumers? Sponsorship and endorsement played a key role in Nikes U.S. success Sponsorship and endorsement also important for establishing positive image abroad Image of Nike in U.S. tied to elite athletes, Nike actually began reducing number of endorsers because associations sufficiently high High-profile sponsorship probably more important in regions where Nike image not as high in terms of performance 4) Why did Nike become a target for critics of globalization? Do you think Nikes response to allegations of unfair global labor practices was appropriate and/or effective? Is Nike truly concerned about these issues? Nike very recognizable global brand Labor ethics very hot topic High cost of shoes & high image component of brand resentment 5) Evaluate Nikes acquisitions and the brands now under its control. Do these acquisitions make sense for Nike? What, if any, brands should Nike try to acquire next? Evaluation is subject to class discussion arguments Brand diversity might lead to additional growth 126 and

Consider brand image issues

6) How important is fashion to Nike? Are they a performance apparel company, or a fashion company? What is more important for Nike when they enter a new market like China? Fashion or performance? Primarily performance, but fashion is crucial to the longevity of the brand Consider Beijing 2008 Olympics Open for class discussions and arguments 7) Should Nike do anything different to defend its position now that Adidas and Reebok have joined forces? Nike should acknowledge that global competition is becoming fiercer. The brand strategy should be maintained, so the company should continue pursuing successful global athletes. It is possible to consider acquiring other brands to diversify the companys portfolio.

127

iPod: Creating an Iconic Brand Teaching Notes Summary This case is about the evolution of the iPod that appears as a cultural phenomenon in the streets, schools, universities and even in the workplace. The growth of iPod all over the world made it the walkman of the twenty-first century. Apple had dominated the digital music market with its iPod but it is now faced with the challenge of how to defend its market share and prevent iPod killers. Apple is currently facing fierce competition from strong players such as SanDisk and the software giant Microsoft that developed its Zune to compete with the iPod. The challenge is not only about the competition faced but it also involves the lobbying and legislative pressures being put on Apple to open up its system and allow songs of any format to be played on the iPod. This could represent a significant threat on Apples dominant market share. Class discussion can revolve around the following questions that students should consider before class: 1. What is the most important feature of the iPod? Why? 2. Apple continues to operate a closed system (i.e. music downloaded from iTMS can only be played on iPods). Do you recommend Apple continue this strategy, or should it open its systems to users of any type of digital music player? 3. Has Apple done a good job of marketing the iPod, or have they relied too heavily on word of mouth and buzz to grow the brand? 4. Apple has extended its distribution network to include large retailers such as Circuit City and Best Buy. How important are these outlets to Apple? Should they be concerned with not having full control over the customer retail experience control that they have in the Apple Stores? 5. What should Apple do next to sustain iPod sales? Create a new ad campaign? Introduce a new version of the iPod that plays videogames? Teaching Strategy This case can generate and support discussion on a number of topics, e.g. high- tech marketing, creation of an iconic brand, continuous product development, etc. The case can also be supplemented in a number of ways to incorporate current developments. Specifically, this is an excellent case for demonstrating, among other things, the: 1. Bundled products 2. Importance of continuous product innovations 128

3. Necessity of having strong and wide distribution network 4. Strength of a brand (iPod) to the extent of creating new processes (Podcasting) It is successful to begin the case with a quick review of Apples history to provide some perspective and a few quick lessons. Apples early start in the home computers, developing the Mac computers and the iMac then launching the iPod. Here it would be useful if the reasons of decline of the products preceding iPod were discussed in order to identify the areas of weaknesses for Apple and how these could be avoided in order to prevent the iPod from facing the same destiny. It is also important to pinpoint the differentiation strategy that was employed by Apple in its iPod and highlight its most important features. Furthermore, the role of a flexible marketing department that quickly responds to the market needs is to be presented and how it provides an advantage. Having discussed this, the importance of continuous product innovations has to be stressed upon. R&D is of extreme importance in order to always stay ahead of competitors and is even of more importance in high tech sectors and in gadgets marketing as this area is characterized with an extremely dynamic nature. Having discussed the above points, it would be instructive if the discussion moves further to include the distribution system of the iPod. Also, it would be of benefit if iPods closed system is thoroughly analyzed with the identification of its main advantages and disadvantages. The economics of the iPod and its use of a reversed razor model is also a subject that could be tackled to provide the students of an understanding of the different models employed for the sales of bundles products. This would reflect that there is no one and only way of doing things. On the contrary, even an opposite of what has been the norm might be a used model that yields profits. The importance of having a strong distribution channel and its role in the success of a product could be then discussed. Different ways of distribution channels expansion along with its pros and cons would be useful if discussed with the students and their input on the best ways for distributing such an electronic innovation would be constructive. Competitors stepping in into successful markets is always an issue. Here, the light is to be shed on the fact that no product always stays on the top without facing competition from its rivals. What are the various ways in which a leader could defend its position and maintain its market share? What role could be played marketing? Finally the discussion is to

129

be wrapped up with the actions Apple has to take in order to defend its iPod? Key Lessons Success factors for a new product How to create an iconic brand Continuous product innovations Advantages of employing differentiated strategies Advantages of having a strong and wide distribution network Importance of having continuous strong marketing efforts

Discussion Questions 1. What is the most important feature of the iPod? Why? Its high storage capacity. Enabled users to carry thousand of songs in their pockets. 2. Apple continues to operate a closed system (i.e. music downloaded from iTMS can only be played on iPods). Do you recommend Apple continue this strategy, or should it open its systems to users of any type of digital music player? It is recommended that Apple should open up its systems voluntarily before it becomes a must. It is evident that sooner or later the closed system would be opened up due to lobbying and legislative pressures. Such a closed system would not sustain for a long time in the global world we are living in nowadays. Apple should start looking for other ways to keep its leading position in the iPOd market. 3. Has Apple done a good job of marketing the iPod, or have they relied too heavily on word of mouth and buzz to grow the brand? Apple relied too heavily on word of mouth and buzz to grow the brand iPod now has 78% market share which is very high percentage but if more marketing efforts are done the overall market base would increase leading to higher number of users of the iPod. Creative marketing campaigns could be done leveraging on the success of the iPod A creative cartoon character might be developed as an iPod character

130

More marketing efforts are needed specially after the iSheep attack ads developed by SanDisk.

4. Apple has extended its distribution network to include large retailers such as Circuit City and Best Buy. How important are these outlets to Apple? Should they be concerned with not having full control over the customer retail experience control that they have in the Apple Stores? These outlets has extreme importance for Apple Made the iPod available to a wider audience This extension in Apples distribution network led to the halo effect No real worry could stem from this distribution extension as it had been mentioned that the consumer experience at Apples own stores was not that satisfactory but still Apple could maintain some sort of control by o Having its own salespeople within the big electronic retail chains to sell its products o Provide the sales people of the retail chains (RadioShack, Circuit City,..etc.) with extensive sales and customer service training. 5. What should Apple do next to sustain iPod sales? Create a new ad campaign? Introduce a new version of the iPod that plays videogames? Product Improvements Support product improvements with strong marketing campaigns More joint efforts with cellular phones companies Strong Public Relations activities to publicize for Apples new ideas and improvements Various creative ideas are expected form the students

131

DuPont: Managing a Corporate Brand Teaching Notes Summary This case reviews the history of the DuPont brand and details the key factors in the brands rise among the elite science companies in the world. The companys emphasis on developing consumer applications for scientific breakthroughs, combined with its strong corporate brand and the ingredient branding program, have made DuPont a household name in a variety of consumer and business-to-business markets. As the company continued to pursue growth at the turn of the 21st century, it expanded into the biotechnology industry. To reflect its growing business, DuPont replaced its long-standing tagline Better Things for Better Living with the new Miracles of Science tagline. The question remained, however, how this latest reinvention of DuPont would affect the corporate brand. Discussion can involve the following questions that students should consider before class: 1) How would you characterize DuPonts brand equity? What factors contribute to the companys equity? How can DuPont best preserve that equity? 2) Compare the benefits and drawbacks of a corporate brand strategy with that of an ingredient brand strategy. Do you think DuPont should emphasize one strategy more in the future? 3) Evaluate the Miracles of Science tagline. Do you think this effectively communicates DuPonts positioning as the worlds premier science company? Does it support DuPonts ingredient branding strategy? Do you think it has potential to last as long as the Better Things for Better Living tagline? 4) DuPont does not make many finished goods, instead supplying ingredient components to manufacturers through licensing agreements. What are the risks in a business model such as this? Can DuPont mitigate these risks? Teaching Objectives 1) To examine corporate branding strategies 2) To examine ingredient branding strategies 3) To review issues in managing a brand hierarchy and brand portfolio

132

4) To evaluate communication strategies for ingredient and corporate brands and consider how to update them 5) To consider how to preserve brand equity as the focus of a business changes over time Teaching Strategy The DuPont video case covers a variety of topics and can be used at almost any point in the course. The three main topics corporate branding, ingredient branding, and business-to-business branding are broad and important and support much discussion. First, the brand hierarchy can be placed on the board to illustrate DuPonts sub-branding approach to ingredient branding. The DuPont name is at the top of the hierarchy, and each of the ingredient sub-brands, such as Stainmaster carpets or Lycra fabrics, can be grouped underneath according to product category. Some sub-brands, such as DuPont Automotive Finishes and DuPont Flooring Systems, do not carry their own coined name but instead leverage the DuPont corporate name. It might be useful to first analyze DuPonts ingredient branding strategy, and follow this with a discussion of the corporate brand and how it relates to the ingredient brands. If the Intel case has already been used, then the topic of ingredient brands will be familiar to students. The text reviews the concept of ingredient branding in Chapter 7 and offers several guidelines that can serve as a backdrop for this discussion (e.g., ingredients must matter and be instrumental to product performance in some way; ingredients must add value and be differentiated; ingredients must be noticeable or visible or there must be some means to identify and signal its presence; and there must be OEM or producer cooperation). The case provides an overview of three well-known DuPont ingredient brands (Teflon, Stainmaster, and Lycra), plus a fourth emerging ingredient brand, Solae. Students can discuss how these ingredient brands were marketed in terms of ingredient brand strategies and guidelines in Chapter 7. DuPont sought to build awareness for its ingredient brands using both push and pull strategies. The push strategies developed from manufacturing or retail partnerships, where the ingredient brand was promoted on the product packaging or with in-store promotion. The advertising campaigns directed at consumers comprised the pull strategy. Chapter 5 contains discussion of using push and pull in marketing. It may also be useful to discuss how ingredient brands benefit retailers and manufacturers. Manufacturers who make products containing DuPont ingredients enjoy the positive associations consumers have with the ingredient name and/or the DuPont name. DuPont also 133

shares some of the production, development, and promotion costs with its manufacturers. Retailers can attain larger operating margins because of the price premiums commanded by products containing DuPont ingredients. Retailers also receive additional promotional support from DuPont. A number of issues can then be covered concerning corporate branding (see Chapter 11). A good place to start is by asking students to describe DuPonts corporate brand image and then examining how it achieved that image. A useful guide for the discussion of DuPonts image is the four corporate image dimensions outline in Figure 11-11 of the text. The DuPont corporate marketing program, described in the case, is a rich area for discussion. It started in 1907 with the development of the DuPont logo. In 1909, the DuPont name was formally established as the corporate umbrella brand to appear on all products. The marketing of DuPonts science image began in earnest with the 1939 introduction of its Better things for better living through chemistry slogan. Students can discuss the various activities used to supplement this image over the five-decade span of the taglines usage. The corporate image of DuPont also affects the image of its ingredient brands. Chapter 11 refers to a study in which consumers with positive attitudes toward the DuPont corporate brand were more likely to respond favorably to advertising claims from Stainmaster and were therefore more likely to buy the product. Inversely, negative attitudes toward DuPont might lead consumers to not buy products containing its ingredient sub-brands. Sub-brands can also influence consumers image of parent brands, especially if there exists strong linkage, as is the case with DuPont. Students can discuss the degree to which DuPont leverages its corporate name in its sub-brands and determine which category DuPont falls into of the five corporate/product relationship categories as defined by Gray and Smeltzer. Another topic to cover is business-to-business marketing and branding. Most of DuPonts 2000 brand and trademark registrations were for products that targeted industry and business customers, rather than mass-market consumers. Students can discuss the various marketing methods used to reach these industry and business consumers, such as public relations, advertising in industry periodicals and journals, and client relationships. DuPont wants companies who buy its products to consider its corporate name and its ingredient brands added-value that can provide a number of positive associations for the finished product, such as quality, safety, and reliability. To conclude the discussion, the new tagline The miracles of science should be considered. Students can discuss the tagline as it relates to 134

DuPonts traditional chemicals business and its recent expansion into biotechnologies. They can be asked if it supports both aspects of DuPonts business, and if it leaves room for further expansion. Students can also consider the question: How will DuPonts broader focus on biotechnology affect the equity the company established as a result of its traditional chemicals business? Key Lessons o o o o o Success factors for ingredient branding strategy Must convince consumer that ingredient matters Must convince consumer that branded ingredient is better Must create brand logo and means of identification Must support strong pull program Must enlist trade and retail cooperation Value of push and pull marketing programs Rationale for umbrella branding Role of branding in a business-to-business setting Need for reinvention in high-tech business environment

Discussion Questions 1) How would you characterize DuPonts brand equity? What factors contribute to the companys equity? How can DuPont best preserve that equity? DuPonts equity Science & technology leader Innovation o Ingredient brands in numerous industries, high awareness and positive image to consumers and businesses Strong corporate brand, high awareness and image Biotechnology not yet a big contributor to equity Preserve equity o Answers will vary 2) Compare the benefits and drawbacks of a corporate brand strategy with that of an ingredient brand strategy. Do you think DuPont should emphasize one strategy more in the future? Corporate Brand Benefits:

o o

o o

135

Strong corporate brands influence consumer behavior, can be leveraged across entire brand hierarchy, extendible and transferable to brand extensions Corporate Brand Drawbacks: o Difficult to logically build an umbrella brand over disparate product categories; corporate brand can suffer if one sub-brand develops negative associations Ingredient Brand Benefits: o Equity built at product level is easy to transfer to brand extensions, can leverage many secondary associations from partners, can be an ingredient in many disparate markets Ingredient Brand Drawbacks: o Equity built at product level is difficult to transfer to new products, brand susceptible to negative secondary associations from partners, some loss of control over brand, challenge of developing consistent marketing message if ingredient used in many different markets o 3) Evaluate the Miracles of Science tagline. Do you think this effectively communicates DuPonts positioning as the worlds premier science company? Does it support DuPonts ingredient branding strategy? Do you think it has potential to last as long as the Better Things for Better Living tagline? Tagline is memorable and aspirational Strong link to science heritage Conveys that DuPont finds applications for its scientific discovery, which is consistent with former tagline Supports ingredient branding, each ingredient brand can be thought of as an individual miracle 4) DuPont does not make many finished goods, instead supplying ingredient components to manufacturers through licensing agreements. What are the risks in a business model such as this? Can DuPont mitigate these risks? Consider issues like misuse of the ingredients by manufacturers, counterfeiting, and brand equity dilution. class discussions and arguments are encouraged to analyze both options.

136

Dockers: Creating a Sub-brand Teaching Notes Summary This case concerns Levi-Strauss' introduction of the Dockers line of pants. Although the case may be taught to emphasize a number of different points, perhaps the most interesting issues relate to the brand image and brand equity of Levi's and how they affect and are affected by the introduction of new products. Class discussion can center on the following three questions that students should consider before class: 1) How would you characterize Levis branding strategy in general? What are the positive aspects? Are there any negative aspects? 2) Analyze Dockers communication strategy at the time of the launch. How did it fit in with past Levis advertising efforts? How did it contribute to brand equity? 3) How would you characterize the Dockers brand image? What makes up its brand equity? Evaluate the move to expand the line into the bedding, bath, and luggage markets. 4) Describe some of the changes in the Dockers marketing strategy from its debut. Has LS&Co. maintained a consistent enough marketing message? Is it well-positioned strategically and tactically to maintain its strong leadership status in the coming years? 5) Dockers missed out on the wrinkle free trend when it first surfaced. Not incorporating this technology into pants hurt the company. Years later, Dockers embraced technology in its products, creating the Thermal Adapt Kahki and Perspiration Guard shirt. Was adding this technology to their products the right move, or did Dockers go too far in adding these features to their clothes? 6) Evaluate Dockers decision to stop selling products directly to consumers on its website. Dockers main competitors (e.g., Gap, J.Crew, and Abercrombie & Fitch) are heavily involved in online retailing. Should Dockers reconsider their decision? 7) Imagine that you are John Goodman and have just been named as the head of the Dockers brand. What are your priorities? What do you do first? Teaching Objectives 1) To introduce the scope of branding decisions and the value of the customer-based brand equity framework.

137

2) To demonstrate the value of multiple brand elements and subbrands. 3) To illustrate the importance of blending push and pull in marketing a brand. 4) To examine the effects of changing demographics on marketing strategies. 5) To show how strategies and tactics change over the product (and brand) life cycle. Teaching Strategy This is a highly relevant case to students as virtually every student will have worn a pair of Levis at one time or another and generally will be aware of the brands marketing efforts over the years. It is a good case to teach in one of the first classes as it generates discussion and covers a lot of ground. The history of the brand is an interesting one with several important lessons. A good place to start is by noting the brands historical roots as the first brand of tough, rugged jeans and its evolution to a standard bearer of the jeans category and a symbol of freedom and independence. Levis mistake of over-diversification is worth noting, especially if students have had the opportunity to see the out-of-print but still available at many schools! half hour Not by Jeans Alone video on their failed line of mens Tailored Classics suits. This video can be shown before class to interested students or in-class if the case is taught over two sessions. (It also is interesting to juxtapose this video with the case video on Dockers LS&Co.s since Steve Goldstein appears in both although they are shot 15 years apart!!) Levis attempt to make apparel to suit almost any person and any lifestyle, all under the Levis name, clearly stretched the brand in too many directions in the early 1980s. LS&Co.s back to basics approach to get the brand back on its feet is worth noting. To improve profitability, LS&Co moved in two directions: 1) improved relations with retailers; and 2) re-focused Levis brand name and image with consumers. In other words, LS&Co adopted a classic push and pull strategy as part of their revitalization. Students should appreciate how this was done and why it was done. This back to basics approach is one that many firms need to adopt when their brands encounter troubles. On the demand side, many core businesses were sold and greater emphasis was placed on basic jeans and corduroy lines as a means to preserve the companys values and traditions. Advertising played a critical role in creating the desired brand image with the following associations: 138

- Honest - Approachable - Classic - Universal - Contemporary - Independent - Comfortable Students can be asked how easy it was be to achieve this brand image. The answer is not easy at all several pairs of associations would, on the surface, seem to be contradictory (e.g., classic and contemporary as well as universal and independent). The 501 Blues campaign, described in the case, did a remarkable job targeting 12-24 year olds and having the desired effect. The net result of all these new initiatives was that the brand began to thrive again. All was well until LS&Co. was forced to confront their demographic destiny the baby boomers making up their key audience were aging and were not buying as many jeans. At this point in the discussion, it is important for students to recognize that all brands need to bring in new customers, although some brands need to more than others. Other brands that faced similar demographic challenges, such as Cadillac, can be discussed. Chapter 13 of the text provides some useful background discussion in that regard. The needs of Levis aging baby boom target market and the marketing opportunity that existed there can then be discussed. The bulk of the case discussion can then turn to how LS&Co. branded its New Casuals. Students should be encouraged to apply basic concepts from Chapters 4-7 of the book in terms of how build brand equity. The three main ways to build brand equity should be examined in turn: 1) Choosing brand elements - Name (Dockers) - Logo (Interlocking wings and anchors) - Hangtag (Women lead off ship by formally dressed man but looking at relaxed, casually dressed man) 2) Develop supporting marketing program - Product (Emphasis on style, versatility, and comfort by inclusion of 100% cotton, pleated, washed fabric with reverse silhouette design, and variety of colors) - Price (Moderate/Upper-moderate) - Channels (Dockers in-store shop & unique displays) - Communications (Ad campaign) 3) Leverage secondary associations - Use of sub-branding strategy with Levis brand name Students should consider the logic and consistency of this strategy and the role these different tactics had in building brand equity. For example, in terms of choosing brand elements, some students will be skeptical as to whether or not LS&Co really thought of the brand elements as empty buckets with no inherent associations or 139

meanings. There is a strong nautical theme suggesting that perhaps the initial positioning with the pants was in terms of companions to topsiders or similar products. Nevertheless, the real equity is not being built there but in the supporting marketing program. Here, students should recognize how well-designed and implemented the marketing program was. At the heart of it all was the right product, and students must appreciate how important the right product is to creating brand equity. Some fruitful discussion can address the push and pull aspects of the program. The Dockers in-store shops were truly innovative and trend-setting and should be reviewed. The pull side is more complex and it is worthwhile for students to analyze its likely contribution to building brand equity. Some thoughts along these lines are as follows. The potential contribution of the introductory ads were to both: - Build awareness - Create image - User imagery (e.g., age) - Usage imagery (e.g., versatility) - Product benefits - Comfort - Style Any ad can potentially work at both levels (awareness and image), but it is rare that both can be strongly emphasized. It is hard for any one ad to be able to do so much building brand awareness typically involves much brand and product exposure, which almost necessarily comes at the expense of information that would enhance image. Most likely, the ads worked best at the awareness level: The strong product focus (some critics claimed it was the first use of the buttcam in advertising and well-constructed slogan (If youre not wearing Dockers, youre just wearing pants) helped to get the word out as to what the brand is all about a prerequisite for building brand equity. Note too that the ads actually referred to Levis 100% cotton Dockers. The inclusion of the type of fabric cleverly served as a buffer between Levis (known for jeans) and Dockers (which wanted to be known for pants). It may be useful to have students diagnose the sources of equity that Levis sought to bring to Dockers (e.g., quality, physical comfort, style, heritage) and sources of equity Levis wished to create distinctly for Dockers (e.g., 100% cotton, dress casual, and psychological comfort). Not every response to the introductory Dockers television ads was positive. In reviewing the ads, ADWEEK magazine sniffed, Its like a lot of yuppie crotches talking to one another. Students can be probed as to what is missing in the introductory marketing program, e.g., by contrasting the image of Levis jeans to Dockers. The early ads focused on awareness rather than image, and students can evaluate the relative importance of both components in an introductory ad campaign. After 140

running variations of the introductory campaign for a couple of years, Dockers injected some imagery and personality to the brand with a stylish new ad campaign using the tag line Relax. Youre Among Friends. These ads injected humor and portrayed a relaxed life style by showing Dockers wearers at work and play. These ads could be interpreted as bolstering the user and usage imagery which had been somewhat lacking in the introductory campaign (e.g., who should wear the pants and where). By 1991, Dockers approached $700 million in pants sales (with another $200 million in shirts sales), awareness was sky high (90% in target market, and ownership penetration was at 40% for men 25-44 (owning 2 pairs on average). A new campaign, Nobody Does Colors Like Dockers, targeted current users in an attempt to get them to buy more varieties of pants. Each ad featured a different color. By 1991, however, some cracks emerged in the Dockers image as a younger generation found the pants as lacking in relevance (see video case). The younger generation of consumers felt that while Dockers addressed the needs of their fathers, they felt that the brand did not cater to their fashion needs. This would be a good place in the discussion to observe the difficulty of creating a positioning or positionings of appealing to broad demographic groups. Dockers attempted to improve the image of its pants among younger consumers with the Nice Pants campaign. After the Nice Pants campaign had run for three years, Dockers switched to One Leg at a Time, a slogan that failed to connect with consumers. In mid-1999, after one year of One Leg at a Time, Dockers reinstated the Nice Pants tagline. The discussion at this point could touch back on the task of keeping the brand relevant and attracting new consumers over time. There are a number of ways to wrap up the case. One way is to put the brand hierarchy on the board and consider big picture issues of how LS&Co. should manage their brands. In doing so, it is important to include Slates, LS&Co.s new dress slacks. Questions can be raised as to whether there is or should be a good brand migration strategy. Questions can also be raised about brands below the family brand level. Dockers had many varieties of Dockers, including two sub-brands Dockers Recode and Dockers Exact and a variety of branded pants types, including the Go Khaki and the Mobile Pant. Students can discuss the key challenge of moving a brand forward: deciding what to change and what to preserve. Updating the case, Levis recent struggles in the jeans category can be brought up (their market share dipped considerably during the latter half of the 1990s and the early 2000s).

141

Key Lessons Value of a back to basics brand revitalization strategy Challenge of negatively correlated attributes Great brands seize trends and opportunities Proper design and implementation of sub-brands Necessity of mixing and matching brand elements Value of blending well-designed push and pull strategies Reality of awareness and image tradeoffs in advertising Importance of innovation and relevance

Discussion Questions 1. How would you characterize Levis branding strategy in general? What are the positive aspects? Are there any negative aspects? Two brand names: Levis and Dockers Sub-brands Positive Aspects: o Successful sub-branding strategy o Capitalize on the strengths of the Levis brand o Differentiates between Levis and Dockers Negative Aspects: o Dockers image was not appealing to many consumers o New trends in the market do not support the Dockers brand idea.

2. Analyze the Dockers' communication strategy at the time of the launch. How did it fit in with past Levi's advertising efforts? How did it contribute to brand equity? Communication strategy o At time of launch, product focused o Consistent with some Levis advertising from the 1980s o Other Levis ads very image-oriented o Dockers did not add an image element until later Contribution to brand equity o To build brand equity, both awareness and image are needed o Early ads drove awareness well, they were memorable and conveyed information about the product

142

o In-store shops pushed awareness o Dockers added advertisements that indicated who should be wearing its pants 3. How would you characterize the Dockers brand image? What makes up its brand equity? Evaluate the move to expand the line into the bedding, bath, and luggage markets. Brand image o Casual dress brand, positioned in between jeans and dress clothing o At the time of its launch, the brand image tied almost exclusively to the khakis popular with the suburban set o Dockers updated its communication strategy and its design styles to convey a more sophisticated, urbane image Brand equity o High awareness o High market penetration o Strong channel support o Positive image in numerous demographic segments

4.

Describe some of the changes in the Dockers marketing strategy from its debut. Has LS&Co. maintained a consistent enough marketing message? Are they well-positioned strategically and tactically to maintain their strong leadership status in the coming years? Dockers altered advertising to convey a more sophisticated image Nice Pants offered more edginess, more sexiness, less stuffiness, younger target One Leg at a Time was a departure, confused consumers Returned to Nice Pants, better consistency Dockers is positioned well o Leading brand of casual pants o High awareness levels o Many different lines, broad market coverage o But, is Dockers reaching market saturation in U.S.?

5. Dockers missed out on the wrinkle free trend when it first surfaced. Not incorporating this technology into pants hurt the company. Years later, Dockers embraced technology in its products, creating the Thermal Adapt Khaki and Perspiration 143

Guard shirt. Was adding this technology to their products the right move, or did Dockers go too far in adding these features to their clothes? Challenge of changing the image among young consumers Necessary to target this market Analysis is open to class discussions and arguments

6. Evaluate Dockers decision to stop selling products directly to consumers on its website. Dockers main competitors (e.g., Gap, J.Crew, and Abercrombie & Fitch) are heavily involved in online retailing. Should Dockers reconsider their decision? Early e-commerce try was not successful Maybe a new approach would yield better results Analysis is open to class discussions and arguments

7. Imagine that you are John Goodman and have just been named as the head of the Dockers brand. What are your priorities? What do you do first? Conduct extensive marketing research to assess the image of Dockers among different market segments. Analyze the possibilities of extending the brand, especially using subbrands in order to attract new customers, while keeping the brand relevant.

144

Nivea: Managing a Multi-Category Brand Teaching Notes Summary This case concerns the marketing program for Beiersdorf's flagship Nivea brand. The case addresses the issue of how to manage the brand image for a brand associated with different products. How can Nivea continue to add new customers to their brand franchise without harming their brand equity? Further, how can Nivea maintain its brand equity in its core skin crme product while also leveraging that equity into new product categories? A number of issues are raised concerning the coordination of a branding and communication program across existing and new products. Class discussion can revolve around the following sets of questions that students should consider before class: 1) What is the brand image and sources of equity for the Nivea brand? Does it vary across product classes? How would you characterize their brand hierarchy? 2) What are the pros and cons of the sub-brand strategy? Should Nivea run a corporate brand or umbrella ad for all of their products? What is the role of the Nivea Crme advertising? Should it be changed? 3) Discuss the risks and benefits of Niveas brand extension into new product categories and customers. How have Niveas executives managed this extension? Have they missed opportunities such as perfume or foot care? Are there certain boundaries that Nivea should not cross? 4) Should Nivea pursue a Mens grooming category? Does the company risk alienating its core consumer base of families and women or is this a natural next brand extension? 5) What would you do now? What recommendations would you make to Nivea concerning next steps in their marketing program? Teaching Objectives 1) To examine issues in managing a brand hierarchy and brand portfolio 2) To review possible roles of brands and communication strategies for a brand hierarchy and brand portfolio 3) To consider how to best manage a mature brand over time 4) To analyze brand extension strategies for appropriateness 5) To demonstrate proper communication strategies with a brand extension

145

Teaching Strategy This case is the one with which students may be the least familiar. Nevertheless, it can be an excellent means to examine brand extensions and brand hierarchies. A good way to begin the case is to ask students what the brand image is of Nivea crme, the flagship product, in Europe, e.g., if you were to stop someone in the streets of Paris, London, or Hamburg and asked what came to mind when they thought of Nivea, what would they say? Nivea crme has a rich brand image, so students typically are able to elicit a number of different brand associations, such as: - Care - Protection - Mildness/Gentleness - Reliable/Trustworthy - Natural/Pure/Basic/Simple/Honest - Family/Shared Experiences/Maternal - Multi-Purpose - Classic/Heritage/Timeless - Good Value/Quality - Blue/White A number of specific points can be made about the brand image. The association of care and protection is an important one as it works at both the product-level as well as a more symbolic, non-product level. This duality is one that characterizes strong brands. Mildness and gentleness associations are also critical as they represent a key point-ofdifference. Classic and heritage associations present an opportunity and a threat. In terms of the latter, a worry is that the brand will not be seen as contemporary and up-to-date, a point we will return to. Finally, the blue and white associations are the foundation for brand awareness and can be leveraged in that way. After some discussion of the brand image of Nivea crme, analysis can turn to the sub-brands and brand extensions. As is usually the case, it helps to elicit the brand hierarchy and put it on the board. A few preliminary comments can be made concerning the range and scope of the Nivea brand (e.g., Which associations are most transferable? Relevant? Unique?). It is necessary to individually analyze each major sub-brand, starting with ones under skin care and moving to ones under personal care. A good way to do this is to identify, one by one, the points-of-parity and points-of-difference for each sub-brand. Students may put together a list somewhat like the following: POP POD

146

Crme Body Soft

All-Purpose Application Texture/Application Pleasurable usage experience Pleasurable usage/Texture

Mildness/Gentleness Mildness/Gentleness Mildness/Gentleness/ Lighter crme Scientific With Confidence &

Visage Beauty Technology Vital Baby Sun For Men Bath Care Beauty/Anti-aging Safety/Caring/Mildness Protection/Safety Beach/Fun Sensual image/ Soothing Convenience/ Cleansing

Scientific/Gentleness Heritage Mildness/Gentleness Mildness/Gentleness Mildness/Gentleness Mildness/Gentleness

Deodorant Efficacy Beaut Beauty/Color Mildness/Gentleness Hair Care Cleansing/ Appearance/Hold

Mildness/Gentleness

There are a number of specific issues for each sub-brand that can be considered in the process, time permitting. For example, Visage is a very different type of sub-brand that deserves closer scrutiny. One role it can play is to contribute to the perceptions of the Nivea brand as a whole (e.g., as innovative, contemporary, etc.). Of course, the transfer of associations is not one-way, so a legitimate question is the effects of the Nivea parent brand on Visage. This topic can be used to illustrate the flow of equity, which describes how sources of equity are transferred between a parent brand and a sub-brand, and vice-versa. Although Nivea presumably communicates credibility, quality, and mildness, the transfer may not be all positive. For example, Nivea Deo raises an interesting dilemma faced by many brands: how can a brand be effective and therefore by implication, strong and mild? The challenge of negatively correlated attributes can be addressed in this 147

context. Another example: Niveas positioning as a mass-market, family brand of skin care products complicated its extension into color cosmetics, which is a more sophisticated and image-conscious category. After listing the positionings of the sub-brand, students can be told to step back and critique their extension strategy. Has BDF management done a good job extending the Nivea brand? Most students will admit that the current brand portfolio is generally cohesive and well put together. It is also worth considering whether Niveas leveraging of its brand across an array of diverse brand extensions could have adverse consequences for the image of the umbrella brand. Two important points to emphasize about their sub-brands is that: 1) gentleness and mildness are key points-of-difference in almost every category; and 2) as Nivea moves farther away from their core crme brand, points-ofparity become critical. It is worth noting that these two observations characterize many brand extension strategies. These two observations have important implications for the brand hierarchy as will be developed further. At this point, it makes sense to return back to the brand hierarchy to get the big picture. For the sub-brands to be successful, with the exception of Visage, they all need to create a POD on the basis of mildness and gentleness. BDF management has four basic options to do so: 1) Create mildness and gentleness associations to the Nivea brand as a whole (perhaps reinforced through a family brand ad) and assume they trickle down to the sub-brands 2) Create mildness and gentleness associations to the collection of sub-brands through a product umbrella ad that showcased all the various products and assume that each one would pick up the associations 3) Create mildness and gentleness associations at the skin care and/or personal care level through a family brand/product umbrella ad at that level and assume they trickle down 4) Create mildness and gentleness associations at the Nivea crme level and assume they go up and over to the subbrands

148

Nivea chose the fourth option by implementing the Blue Harmony campaign, which was essentially an image campaign for Nivea Crme. This fourth option was the most cost-effective but, as with the first option, it is not clear that a different type of ad will be necessary. To make this point, the Blue Harmony ad campaign should be analyzed. The campaign certainly modernizes the brand and gives it a more contemporary look. A number of key associations were not, however, being reinforced initially, especially care, protection, mildness, gentleness. These associations are only very implicitly dealt with as the ads are more of a life style variety and lack product exposure. Later Blue Harmony ads focused more on specific attributes of Nivea Crme, while keeping the style of the ads consistent. The discussion can conclude by asking the students what would they do next both short-term and long-term. The key for Nivea is to reinforce equity in the corporate umbrella brand while at the same time using it to support extensions. If the students suggest, based on the analysis described above, changing the ads, they should be asked how. There are many good things about the ad that probably should be preserved. BDFs solution was to add phrases to capture key associations to the ad (e.g., Care, Protection) while essentially keeping the same visual style. Although seemingly small and subtle, such changes may help to provide the proper brand foundation on which the extensions can build. Longer-term, a key question becomes what new product categories should Nivea enter and how. Students can be asked to generate some candidate categories and asked to react to some actual categories in which Nivea entered. Students can also discuss the challenges of the entering the U.S. market. One useful point to consider is whether BDF should attempt to leverage their European (although not necessarily German) heritage in marketing Nivea (e.g., the European skin care leader). They have not done so is that wise? Key Lessons Strong brands have rich, cohesive brand images and wellentrenched brand values An effective brand hierarchy creates relevance, differentiation and the proper awareness and image at each level Properly extending a brand can broaden its meaning & scope

149

Creating a strong family or power brand involves choosing categories that fit and developing consistent, well-positioned marketing programs Sub-brands can create unique identities and enhance the image of the parent brand The role of flagship brands must be carefully managed to balance deposits and withdrawals

150

Discussion Questions 1) What is the brand image and sources of equity for the Nivea brand? Does it vary across product classes? How would you evaluate or rate Niveas brand extension strategy? How would you characterize the brand hierarchy? Brand Image/Equity o Family o Caring o Gentleness/Mildness o Protection o Simple o Multipurpose o Reliable Variation Across Product Classes o In Visage, Vital, and Beaut, image is less simple and more scientific, less multipurpose, and more individual than family o In every product category, core attributes of mildness/gentleness, caring, protection, and reliability hold Brand Extension Strategy o Leverage corporate umbrella brand on every new product o Use familiar logo and look for new brands o Extend into related categories Brand Hierarchy NIVEA Skin Care Nivea Crme Nivea Soft Nivea Visage Nivea Vital Nivea Body Nivea for Men Nivea Sun Nivea Baby Nivea Hand Nivea Lip Personal Care Nivea Deo Nivea Beaut Nivea Bath Care Nivea Hair Care Nivea Intimate Care

2) What are the pros and cons of the sub-brand strategy? Should Nivea run a corporate brand or umbrella ad for all of their

151

products? What is the role of the Nivea Crme advertising? Should it be changed? Pros: o Helps elicit the brand hierarchy o Strengthens the Nivea brand o Utilizes the existing awareness and associations of the brand Cons: o Risk of transferring irrelevant or negative associations o Risk of negatively affecting the original brand It is possible to run brand campaign as long as the ads emphasize common image and associations Nivea Crme is the flagship brand that carries the brands awareness and image as well as the All Purpose association. Nivea Crme ads should emphasize the brands image and they should be general enough to allow for extensions with additional associations.

3) Discuss the risks and benefits of Niveas brand extension into new product categories and customers. How have Niveas executives managed this extension? Have they missed opportunities such as perfume or foot care? Are there certain boundaries that Nivea should not cross? Risks o Can the brand image extend to all these products positively? o Can these extensions dilute the Nivea brand? Benefits o Use Niveas awareness and equity o Save time, effort and money Management of Extensions o Evaluation is open for class discussions and arguments Opportunities in Perfume and Foot Care o Each idea needs to be further researched o Evaluation is open for class discussions and arguments Boundaries o Evaluation is open for class discussions and arguments

152

4) Should Nivea pursue a Mens grooming category? Does the company risk alienating its core consumer base of families and women or is this a natural next brand extension? If the associations transferred are consistent with the brands image and positioning, then an extension to the Mens growing category is possible. Marketing research is required to analyze the effect of this initiative on the current consumer markets.

5) What would you do now? Provide recommendations to Nivea concerning next steps in their marketing program? Analyze the brand portfolio carefully to decide on which subbrands to keep and which ones to divest. Consider different countries where the brand could be introduced. The question is whether to enter these international markets with a full portfolio of products & brands or to apply a gradual entry approach.

153

Yahoo!: Managing an Online Brand Teaching Notes Summary The Yahoo! case details the rise of one of the Internet economys most visible brands. The case focuses on managing an Internet brand, which entails numerous topics such as Internet advertising, branding a technology product, and managing a brand in a highly competitive category. Yahoo! was the poster-child and bellwether of the Internet economy during the second half of the 1990s, and managed to remain independent as many search engine and portal competitors were purchased by media companies. The company encountered obstacles, however, as the economy worsened in the early 2000s. After management changes and strategic business restructuring, Yahoo! looked to capitalize on its position as a leading Internet brand moving forward. Yahoo! deployed a strategy for growth based on new services, acquisitions, and partnerships to face fierce competition. Students can consider the following questions before class: 1) Describe the sources of equity for the Yahoo! brand. Did these sources change during Yahoo!s history? If so, how? 2) How did Yahoo!s marketing program contribute to the companys success? What changes, if any, would you recommend for the future? 3) Evaluate Yahoo!s strategy of selling services. What impact, if any, will it have on consumers perceptions of the brand? How can Yahoo! get more people to pay for more of its services? 4) Should Yahoo! work more on growing its international presence, or should it focus on strengthening its domestic position? 5) What do you think is the biggest risk to Yahoo! at the time of the case? What should the company do about it? Teaching Objectives 1) To examine the selection of brand elements and creation of a marketing program 2) To analyze the decisions and factors involved in starting an Internet brand 3) To observe the branding issues facing technology companies 4) To review new marketing techniques, particularly Internet advertising 154

5) To analyze the process of developing new products and new markets 6) To examine the issues of global branding Teaching Strategy Yahoo! should be a very familiar brand to everyone in the class, and most students should have first-hand experience with the brand. Students should certainly be encouraged, as with most cases, to go online and check out the brand before the class session to increase their familiarity if need be. With this level of familiarity, it should be easy to construct a mental map of the Yahoo! brand at the beginning of class and use this to launch class discussion. An obvious place to start its with the origins of the brand, which can be used to illustrate selecting brand elements and devising marketing strategy. In vintage dot-com style, Yahoo! was conceived by graduate students and started from a trailer. These roots informed the fun and user-friendly image that lay at the core of the brand. The name Yahoo! is an acronym standing for Yet Another Hierarchical Officious Oracle, which is a tongue-in-cheek definition of the search engine in technology jargon. The name was meant to convey the fun and excitement of using the Internet, without any complicated technological associations that would dissuade the casual consumer. Yahoo!s advertising was also designed to make technology novices, termed near surfers because they considered getting on the Internet but hadnt yet, feel comfortable using the brand. By Yahoo!s way of thinking, these near surfers were more loyal and comprised a large segment of the population. Yahoo!s advertising can be analyzed by students for its brand equity building. Yahoo! had the advantage of being one of the first Internet companies to use mainstream media buys, which further contributed to awareness and image. Yahoo! also developed the Yahoo! yodel, the signature audio cue designed to reinforce awareness of the brand and add to its image of fun and excitement. The Do you Yahoo!? slogan was used consistently, which the company felt helped it stand out from competition that was changing their names, taglines, and positionings. Another topic for discussion is the Yahoo! business model, which was initially built almost exclusively on revenue from selling advertising space on its site. The percentage of visitors to an ad-sponsored site who clicked on the advertisement to follow its link was called the clickthrough rate. When Internet advertising first emerged, click-through rates were above 20 percent, but rapidly fell to two or three percent in 1996. Currently, click-through rates are less than one percent. Students 155

can be asked about their Web surfing habits and the frequency with which they click on ads to illustrate this point. The discussion of Internet advertising can include ideas from Chapter 5 on new marketing techniques. Once click-through rates bottomed out in the early 2000s, the business model using online advertising as the primary source of revenue came into question. Yahoo! had been expanding its business in product, market, and geographic terms since it was launched, but the need for further expansion and less reliance on advertising revenue was imperative. Therefore, the next area to consider is Yahoo!s brand expansion. Yahoo!s product expansion is a good place to start, because many students will be familiar with the brands numerous brand extensions. Early on, Yahoo! management noticed that Web surfers typically used Yahoo! to conduct an Internet search and then left the site to visit the non-proprietary sites generated by the search. In order to keep eyeballs glued to Yahoo! sites for longer, the company added homegrown content and vastly expanded onsite offerings, such as Yahoo! Finance, Yahoo! Travel, or the Yahoo!ligans kids directory. These sites attracted new users and kept them on Yahoo! pages. For all its brand extensions, Yahoo! used a sub-branding strategy. Students can compare the benefits of this strategy vs. other types of brand extension strategies from Chapter 12. Yahoo! also made a number of acquisitions, including free e-mail provider Four11 Corp., which became Yahoo! Mail, and Broadcast.com, which enabled Yahoo! to provide streaming media content. Students can weigh the merits of Yahoo!s acquisition strategy, in terms of its product expansion strategy and in terms of valuation methodology from Chapter 10. It might be interesting to have students describe their experience with the brand, to see who uses Yahoo! for a search engine, for a entertainment and streaming-media source, for an information and news source, for a shopping and e-commerce site, and for any of its other numerous product and service offerings. Yahoo! licensing is another product development topic that student may be interested in discussing. This topic can be tied into ideas from Chapter 7. Yahoo!s product expansion strategy paralleled its market expansion strategy, which can be discussed next. From the start, the brand expanded rapidly into new geographical segments. Yahoo! Europe and Yahoo!s first Asian site Yahoo! Japan were developed in 1996. Over the next five years, Yahoo! added more country and regional sites in many languages. Yahoo! was the leading portal in many of the countries in which it established a site, including Japan, Great Britain, and was in the top three in every market it entered. It had established a global brand in a short five years. Students can discuss the advantages and drawbacks of global branding, as detailed in Chapter 14. The fact that it was an Internet company was central to Yahoo!s development of a 156

global brand, because the medium was itself a global network. The fact that Yahoo! surpassed local competition in many markets and always led big players like AOL and MSN indicates that Yahoo!s marketing program was better designed for global marketing. Students can discuss how the companys brand elements, its advertising, its grassroots strategy, and its early geographic expansion all contributed to this effect. As the Internet economy foundered, however, Yahoo!s expansion grew more aggressive, particularly in the product dimension. In 2000, 90 percent of Yahoo!s revenues came from advertising. This figure was reduced to 80 percent in 2001, but advertising revenues decreased by almost 40 percent that year. Yahoo! sought to achieve a 50-50 split between ad revenues and revenues from other sources by 2004. Yahoo!s big initiative was expanding its corporate services by establishing offerings such as Yahoo! Portal Solutions, which specialized in building website portals for corporations such as McDonalds, Pfizer, and the state of North Carolina; Yahoo! Enterprise Solutions (YES), which offered a customized version of the Yahoo! portal for corporate clients; and on-line conference hosting. In another move to boost revenues from non-advertising sources, Yahoo! began charging for services that had traditionally been free, such as e-mail forwarding, responding to personal ads, and Web phone applications. Yahoo! also raised commission rates for sellers on its auction site. Students can discuss the potential affects on brand equity of these moves. For example, most mass-market consumers would not know about Yahoo!s corporate offerings and their perception of the company might not be affected. Mass-market consumers might balk, however, at being asked to pay for traditionally-free services. Corporate clients, on the other hand, would be familiar with Yahoo!s mass-market appeal and might not perceive the company as a powerful corporate solutions provider. The discussion can end by soliciting thoughts on Yahoo!s future strategy. Some industry analysts foresaw a future merger with or acquisition by a large media company. Others recommended that Yahoo! start charging its users a fee for all services. These options can be analyzed for their viability and their consequences for Yahoo!s brand equity. Students may also have different ideas for Yahoo! It should be emphasized that Yahoo! was one of the most recognized and oft-used Internet brands, and possessed a great deal of equity that could be leveraged as the brand sought new sources of revenue.

157

Key Lessons Yahoo! achieved success in the highly competitive Internet portal market with the help of an innovative product and the implementation of branding strategies Yahoo! built awareness and image with a creative and integrated marketing program Over-reliance on the Internet advertising model adversely affected the companys financial fortunes Diversification and brand extensions were and are critical to Yahoo!s past and future success Yahoo! has accumulated significant brand equity in its category, must find new ways to capitalize on it Discussion Questions 1) Describe the sources of equity for the Yahoo! brand. Did these sources change during Yahoo!s history? If so, how? Sources of equity o High awareness o Positive image associations: fun, excitement, ease-ofuse, powerful, global o Credibility o Customizable, for me o Interactive Changes over time o Became more interactive with added media content, chat groups, instant messaging, mobile capabilities o Became more customizable with My Yahoo! o More global over time o Added many more corporate services o Retained fun, excitement, ease-of-use

2) How did Yahoo!s marketing program contribute to the companys success? What changes, if any, would you recommend for the future? Used an innovative and easy-to-use product as foundation for marketing activity Built awareness and image at an early stage, before many competitors were advertising

158

Quirky advertising reinforced key product benefits and image associations Cross-promotion, licensing, grassroots activity reinforced key values of fun, excitement, user-friendly, etc. in unique ways Brand extensions enabled growth

3) Evaluate Yahoo!s strategy of selling services. What impact, if any, will it have on consumers perceptions of the brand? How can Yahoo! get more people to pay for more of its services? Less reliance on advertising as a source of revenue. Therefore, this approach is appropriate and less risky in the long-term. Consumer perceptions should be positive as a result of this approach because the brand offers a variety of valuable services and contents. Students are encouraged to discuss their experiences with the brand and the whether the services offered are wroth paying for.

4) Should Yahoo! work more on growing its international presence, or should it focus on strengthening its domestic position? How to balance the focus on both? Open for class discussions and arguments on: o Coverage should be relevant to all cultures and markets o Coverage should be thorough to appeal to local tastes

5) What do you think is the biggest risk to Yahoo! at the time of the case? What should the company do about it? Competition and market developments are the major risks facing the brand Revenues are unpredicted with technological developments and quick changes in market dynamics and requirements Possible Solutions: o Acquire a media company to expand and further grow & diversify o Search for new sources of revenue

159

American Express: Managing a Financial Services Brand Teaching Note Summary American Express (AMEX) is one of the most recognized and most respected brands in the world. The case concentrates on three periods in the life of the AMEX brand: its early history up through the brands emergence in the 1980s as the largest financial services company in the United States; the companys business struggles in the early 1990s; and the subsequent moves that attempted to return the brand back to prominence. As an enduring financial services brand, AMEX underwent many changes throughout its 152-year history. The companys ability to adapt to market conditions and competitors actions enabled it to remain one the worlds leading corporations, but a number of issues remain unresolved. As with Silicon Graphics, the AMEX could make for an excellent exam case or the basis of class discussion. Regardless, students should consider the following questions in analyzing the case: 1) What elements and characteristics comprised the equity in the American Express brand in the 1960s? In the 1980s? How would you currently characterize the American Express brand? 2) Evaluate American Express in terms of its competitors. How well is it positioned? What are its points-of-parity and points-ofdifference in its different business areas? How has it changed over time? In what segments of its business does American Express face the most competition? 3) Evaluate American Express integration of its various businesses. What recommendations would you make in order to maximize the contribution to equity of all of its businesses units? At the same time, is the corporate brand sufficiently coherent? 4) Was it worth the time and effort to make the webisode with Jerry Seinfeld? The short film by Ellen DeGeneres? What are the advantages and disadvantages of using the Internet to advertise a service-related company? 5) Of the advertising campaigns described in the case, which would you say was the most effective? Why? 6) What is more important for American Expressexpand its product line of new cards (such as the IN:NYC card), or focus on offering new services to its cardholders (such as offering statements in Braille or making its travel website easier to use)? Teaching Objectives 160

1) To understand issues with services branding 2) To address evolutions in positioning and its dynamic nature 3) To analyze the development of marketing communications strategies 4) To examine the concepts of brand portfolio and brand hierarchy 5) To review strategies for dealing with competition

161

Teaching Strategy The areas of discussion that can be derived from this case are many, including topics such as building brand equity, managing brand equity, and revitalizing a brand. Students will be familiar with the brand, but they may not know its history. A brief review from the first part of the case will help students understand how the brand was built and what management decisions contributed to the companys early success. As with many cases, students can apply the CBBE model in terms of the three major ways to build brand equity and the resulting CBBE pyramid that was being constructed strategically. Clearly, AMEX went up the right-hand-side of the pyramid to a greater extent than many brands in terms of creating a brand with strong user imagery and personality and that evoked many feelings of social approval, self respect, etc. It is also worth noting how they did that in part by leveraging secondary associations in terms of celebrities, which permits a discussion of when celebrities are, or are not, useful. Chapter 7 has much useful information in that regard. Turning to the second main period the decline of AMEX an obvious start point is their failure to achieve the two keys to keeping a brand strong innovation and relevance. They failed to develop new products that met changing consumer needs and they failed to recognize that the brands key promise of prestige was no longer as relevant in the 90s as it had been in the 80s. The Chiat/Day ad campaign with the card as an icon was horribly mis-timed in that regard. Compounding problems was the simultaneous launch of Visas brilliant ad campaign Visa. Its Everywhere You Want to Be. That campaign highlighted desirable locations, resorts, events, restaurants, etc. none of which would take American Express. It was able to simultaneously create a point-of-parity (in terms of cachet by showing aspirational travel destinations and promoting their own gold and platinum cards) and a point-of-difference (in terms of convenience). AMEX lacked focus and was not strongly positioned competitivelyand paid the price. A number of the concepts from Chapter 13 are relevant here in terms of brand reinforcement and maintaining a leadership position. The third main period deals with AMEXs attempts to regain their lost share and revitalize the brand. One focus can be on the Do More campaign and the repositioning of the brand in certain markets. For example, it could be argued that with cards the challenge will be to achieve a point-of-parity broadly on performance and to re-assert a point-of-difference on imagery. Stressing the value associated with the card in terms of all the special features can be seen as a means of creating a point-of-parity here. Some of the material in Chapter 13 can be brought into the discussion. Another key issue in this third period is 162

the scope of the corporate brand and how well the different parts fit together. AMEX clearly faces a challenge at establishing itself as a financial services brand and not just a travelers cheque and a card company. Concepts from Chapter 11 can be reviewed here in terms of the brand architecture and strategies to create a strong corporate brand.

163

Key Lessons Brand imagery can be a powerful driver of brand equity. Successful brand leadership requires constant innovation and relevance throughout the marketing program Proper positioning requires creating appropriate points-ofparity and points-of-difference. Brand revitalization often involves a combination of back to basics and renewal. Corporate branding involves establishing the right corporate image and brand architecture.

Discussion Questions 1) What elements and characteristics comprised the equity in the American Express brand in the 1960s? In the 1980s? How would you currently characterize the American Express brand? Equity in 1960s o Travel and entertainment leader o High level of prestige o Associated with leisure o Favored by corporations for expense accounts o Offered security, peace of mind Equity in the 1980s o Travel and entertainment leadership eroded by other cards with greater acceptability o Prestige enhanced by gold and platinum cards o Broad financial offerings contributed to corporate empire image, positive associations resulted, but some distraction from core competencies o Security, peace of mind remained Equity in 2002 o Fierce competition complicated the card market considerably, AMEX prestige no longer as important o Corporate empire no longer intact, limited financial services not as vital a part of the companys vision o Security remained with Travelers Cheques and Blue card

2) Evaluate American Express in terms of its competitors. How well is it positioned? What are its points-of-parity and points-ofdifference in its different business areas? How have they

164

changed over time? In what segments of its business does it face the most competition? Card competition especially strong, Visa and MasterCard gained market share from 1970s onward. AMEX point-of-difference of prestige not perceived by consumers as important and partly negated by Visas brilliant campaign. Developed innovative new products such as Blue to create new points-of-difference Faces entrenched competition in financial services market Its offerings, such as banking and insurance, give it the potential to compete A leader for travel services Faces Internet travel competition, which offer convenience and price comparisons 3) Evaluate American Express integration of its various businesses. What recommendations would you make in order to maximize the contribution to equity of all its businesses units? At the same time, is the corporate brand sufficiently coherent? AMEXs strong corporate identity could apply across diverse categories and markets Different campaigns for different cards not as integrated Addition of select financial services possibly problematic, as in the 1980s Must balance a variety of attributes, some negatively correlated such as prestige and acceptability

4) Was it worth the time and effort to make the webisode with Jerry Seinfeld? The short film by Ellen DeGeneres? What are the advantages and disadvantages of using the Internet to advertise a service-related company? Evaluation is open for class discussions and arguments Advantages of Internet Advertising o Offers interactive tools with customers o Relatively cheaper o More contemporary and appealing o Yielded positive results in 2003 & 2004 Disadvantages of Internet Advertising o New and unconventional to many customers

5) Of the advertising campaigns described in the case, which would you say was the most effective? Why?

165

All advertising campaigns have been effective at their times The Dont Leave Without It campaign in the 1970s built the image of prestige and status The Interesting Livers campaign attempted to target new segments, but was not successful in changing the premium image of the brand. The Cause Marketing campaigns have been useful to build brand credibility. The Helps You Do More campaign attempted to bridge historic strengths with newer initiatives The My Life. My Card campaign kept the momentum of the brand and the link with celebrities along with successful internet marketing.

6) What is more important for American Expressexpand its product line of new cards (such as the IN:NYC card), or focus on offering new services to its cardholders (such as offering statements in Braille or making its travel website easier to use)? Both services and products need to be pursued, following the new trends in the different markets Services help maintain current customers and sustain the image of the brand Introducing new products helps attract new customers and market segments Marketing research is crucial to depict new trends in a changing global environment.

166

Starbucks: Managing a High Growth Brand Teaching Notes Summary The Starbucks case details the rise of the brand from a local gourmet West Coast coffee beanery to global retail giant. The remarkable growth of the brand was accomplished primarily because the product and the service were exceptional enough to warrant significant word-of-mouth response from consumers. As Starbucks grew, the company pursued expansion in the market and product dimensions. New international markets sprang up in Europe, Asia, Latin America, the Middle East, and Australia, while Starbucks moved into airports, grocery stores and convenience stores. Brand extensions from Starbucks included ice cream and iced coffee, and the company purchased a brand of premium tea. The challenge facing Starbucks after more than a decade of rapid growth was, of course, how to maintain the growth without alienating the customers that helped the company achieve it. Class discussion can consider the following questions: 1) What were the keys for success for Starbucks in building the brand? What were its brand values? What were their sources of equity? 2) How would you evaluate Starbucks' growth strategy? Are there things you would do differently? How would you evaluate its partnerships (e.g., with United Airlines)? How do you know whether it is a good or bad partnership? 3) What does it take to make a world class global brand? Can Starbucks become one? What hurdles must it overcome? In terms of the American market, what do you see as Starbucks biggest challenges? 4) Evaluate Starbucks move into non-coffee areas like credit cards, music, and film. Are these natural extensions of the Starbucks brand, or has the company gone too far in creating a lifestyle brand? Where should Starbucks go next? 5) Do you agree with Starbucks international expansion? Should the company continue its aggressive expansion plans? Are there markets where Starbucks cannot expand? 6) Who represents the biggest threat to Starbucks? Direct competitors in the coffee market, such as Dunkin Donuts? Chains like McDonalds that are expanding their coffee quality? Panera Bread and other locations that might be the new third place? 7) How much are customers willing to pay for the Starbucks Experience? Can the company continue to raise prices on its coffees and drinks? Is there a market for $400+ coffee makers? 167

Teaching Objectives 1) To review the marketing imperative of designing brandbuilding, customer-oriented marketing programs 2) To analyze the process of building brand equity and review the CBBE pyramid 3) To consider brand expansion strategies 4) To analyze how to preserve brand equity as the brand grows Teaching Strategy The Starbucks case can easily support a class session on a variety of branding topics. The case will work well early in the term as an introduction to branding issues (e.g., second class) or later in the term as a summary and review of branding concepts. Articles from the popular press can be handed out ahead of time to provide additional background. If interested, reading Howard Schultz Pour Your Heart Into It provides much useful background for class and is an easy read. This is a good case to preview or review key concepts in building and managing brand equity. Students can be asked to apply the customerbased brand equity framework to identify sources of brand equity and the means by which those sources were created and the challenges in managing the brand over time. In doing so, a number of issues can be touched upon. A natural way to kick things off would be to ask students their associations for the brand and have them attempt to construct a mental map for Starbucks. Most likely virtually all the students will have tried or at least know something about Starbucks coffee. Some of the main perceived positive and negatives about the brand will undoubtedly emerge. Positive associations will likely include quality, relaxing, break, sophisticated, convenient, and innovative. Negative associations might include fast food, predatory, pretentious, expensive, and predictable. To uncover how these associations came about, it will be useful to review the historical development of the brand in terms of building brand equity. The initial selection of brand elements is a starting point, and the Starbucks name, logo, and color scheme are all key elements to review. The name, derived from a character in the classic Moby Dick, was intended to convey a mystique and magic while also expressing the products American heritage. The woodcut logo of a siren was designed to be seductive and exotic, while also welcoming and pleasant. The green of its logo and store interior was meant to convey Italian elegance. Each element can be evaluated for its contribution to brand equity. 168

Next, the discussion can turn to the design of a customer-oriented marketing program. The customers experience with the brand was the cornerstone of the Starbucks marketing program. Every aspect of the Starbucks retail experience was designed to provide the customer the romantic feel of stopping at a European espresso bar. From the premium coffee and the trained baristas (servers) to the well-appointed interiors and the hip music, Starbucks sought to become a third place where customers could take a break from both their homes and workplaces. Students can be asked to describe each component of the experience, as elaborated in the following two paragraphs. The product vs. retail nature of the brand should be spelled out by considering the duality of Starbucks selling coffee and the coffeehouse experience. The latter aspect of the Starbucks brand can be used to start a discussion of experiential marketing, as outlined in Chapter 5. Starbucks selection of what product to sell was the most important part of the experience. Only premium coffee would spark the passionate consumer response that drove Starbucks awareness in the early stages of its growth. Starbucks maintained control over the coffee from procurement to roasting to retail, ensuring that the customer was getting the highest quality product available. Initially, the company also did not employ a franchise strategy. It owned and/or leased all Starbucks locations, choosing only the high visibility and high traffic locations that were likely to generate the most business and awareness. Starbucks hub strategy, wherein it clustered stores around a selected urban or suburban region, could also be analyzed. Starbucks relations with employees is another important aspect of its marketing strategy. Each barista is given 24 hours of training at the time of hire, and all employees are eligible for health coverage and Bean Stock company-issued stock options. As a result, turnover among Starbucks employees was lower than for most food chains, and the customer experience was enhanced by the employees ability to educate the consumer about the coffee products. The elements of the rich sensory experience at a Starbucks retail location can be reviewed, covering each of the five senses. After a discussion of the Starbucks marketing program, the discussion can turn to detailing the brands mental map and core brand values and evaluating the points-of-parity and points-of-difference that enabled the brand to stand out from the competition. They are summarized in the following table:

169

Starbucks Positioning
Competitor Fast food chains/ convenience shops POP Convenience Value POD Quality Image Experience Variety Quality Image Experience Variety Freshness Convenience

Supermarket brands (for home)

Convenience Value

Local cafe

Quality Experience Price Community

Class discussion can next touch on Starbucks communication strategy. Starbucks used little in the way of traditional electronic media communications to build its brand, relying instead on word-of-mouth and brand visibility to drive awareness. This grassroots approach allowed for a high degree of integration and enabled Starbucks to develop consumer respect for and attachment to the brand even as it expanded rapidly. This part of the discussion can be tied into Chapter 6 on integrated marketing communication. As Starbucks grew, it expanded into multiple distribution channels in order to reach more consumers. These included mail order, an ecommerce Website, and a variety of retail franchise partnerships. Partners included Host Marriot, United Airlines, Nordstrom, and Barnes & Noble. Here, class discussion could touch on channel strategy, as outlined in Chapter 5. These new channel developments can be contrasted with Starbucks previous strategy of maintaining exclusive control over the distribution and sale of its product. The pros (leverage secondary associations of partner, greater market coverage and penetration, lower cost) and cons (sacrifice some control over brand, possibility of negative associations stemming from partner) of channel partnerships can be discussed. Starbucks licensing of its name to expand its brand in the product dimension can also be reviewed. Its development of the Frappucino blended iced coffee beverage with PepsiCo was a very successful brand extension. So too was its coffee ice cream extension with Dreyers. 170

Starbucks also licensed its name in a joint venture with Kraft to bring packaged ground coffee to grocery stores. Class discussion can evaluate Starbucks licensing strategy and its leveraging of secondary associations as part of its product expansion, using ideas from Chapter 7 as a guide. For example, students can discuss whether the licensed products fit with the Starbucks image and how they contribute to brand equity. Here it might be useful to have students define the Starbucks brand hierarchy and brand portfolio, so that the recent product development can be thoroughly analyzed. Finally, the class can cover the challenges faced by Starbucks as a brand leader in its category. These include overexposure which is partially a result of a clustering strategy that in some cases leads to two Starbucks locations opening across the street from one another and subsequent consumer backlash. Starbucks also faces greater competition, both domestically and abroad. The task of remaining ahead of the competition and retaining the loyalty of its valued customers is one of Starbucks biggest challenges. Key Lessons o Starbucks grew the brand through aggressive: o Product Development Brand Extensions: Key issue: Perceived Fit Product Acquisitions: Key issue: Complementarity Market Development New Channels & Outlets: Key Issue: Relative Strength of Images & Consumer Ability to Compartmentalize New Geographies: Key Issue: Transferability & Relevance of Brand Values & POD Starbucks faces typical brand leader challenges More focused competition Consumer backlash Some possible advice: Beware of over-expansion & over-exposure Dont lose sight of flagship products Develop stronger communications Discussion Questions 1)What were the keys for success for Starbucks in building the brand? What were its brand values? What were their sources of equity? 171

o o o o o

Keys for Success o Product of highest quality, coffee evoked passion from consumers o Caf strategy made customer experience enjoyable o Emphasis on branding from the start o Numerous PODs from retail/grocery Brand Values o Honesty o Authentic experience o Commitment to brand o Customer-focused Sources of Equity o Bringing European-style coffee experience to Americans, then the world o Quality in every aspect point of contact with consumers o Employee/customer satisfaction o Broad reach/convenience

2) How would you evaluate Starbucks' growth strategy? Are there things you would do differently? How would you evaluate its partnerships (e.g., with United Airlines)? How do you know whether it is a good or bad partnership? Evaluate Growth o Market growth, look at measures such as market share and same-store sales o Product growth, evaluate each extension for contribution to equity Evaluate Partnerships o List secondary associations, evaluate for benefits/drawbacks to determine contribution to equity o If equity is enhanced, good o If equity diminished, bad

3) What does it take to make a world class global brand? Can Starbucks become one? What hurdles must they overcome? In terms of the American market, what do you see as Starbucks biggest challenges? World-Class Brand o Positive image across geographical boundaries

172

o Consistency across geographical boundaries o Market leadership in a number of global markets o Strong organizational structure o Mix global strategy with local relevancy Hurdles o Local tastes o Image as multinational/outsider o Entrenched or emerging competition o Finding appropriate licensing/partnership opportunities Challenges in America o Competition o Image as multinational o Over-exposure o Maintaining relevance over time

4) Evaluate Starbucks move into non-coffee areas like credit cards, music, and film. Are these natural extensions of the Starbucks brand, or has the company gone too far in creating a lifestyle brand? Where should Starbucks go next? Evaluation is open for class discussions and arguments Is the brand capable of withstanding these extensions?

5) Do you agree with Starbucks international expansion? Should the company continue its aggressive expansion plans? Are there markets where Starbucks cannot expand? International expansion is crucial to further growing the brand. International locations should be carefully selected though. Possibly there might be countries that would not accept the Starbucks model because of cultural differences or buying power or lifestyles. Students are encouraged to provide examples of countries where Starbucks might struggle.

6) Who represents the biggest threat to Starbucks? Direct competitors in the coffee market, such as Dunkin Donuts? Chains like McDonalds that are expanding their coffee quality? Panera Bread and other locations that might be the new third place?

173

Each competitor might be dangerous in different countries. Starbucks should emphasize its superiority over all competitors through: o The quality of coffee over direct competitors o The Starbucks experience over indirect competitors o Customer service and the quality of employees o The additional products that provide excitement to customers o The intensive distribution and availability.

7) How much are customers willing to pay for the Starbucks Experience? Can the company continue to raise prices on its coffees and drinks? Is there a market for $400+ coffee makers? Marketing research in different countries is required to assess the optimal price beyond which consumers will not value the Starbucks experience. Snapple - Revitalizing a Brand Teaching Notes Summary The Snapple case is essentially a three act play, the first detailing the rise of the brand from humble origins to national prominence. The second deals with Quaker Oats mismanagement of the brand, while the third reviews Snapples revitalization in the hands of Triarc Beverage Group. To turn Snapple around, Triarc employed a back-to-basics approach that sought to capitalize on the core characteristics that had made the brand successful in the first place. Once Snapple had achieved renewed success, Triarc sold the brand to Cadbury Schweppes in 2000. Questions for students to consider before class are as follows: 2) How would you characterize Snapple's brand image and sources of brand equity? What are the strengths and weaknesses of the brand's existing personality and image? 3) Where did Quaker go wrong? What could they or should they have done differently? Is Cadbury in danger of making the same mistakes as Quaker did? 4) How effective and appropriate do you think Triarcs marketing program was? What changes, if any, would you recommend Cadbury make to Snapple marketing? 5) How has Snapples sale to Cadbury affected Snapples equity? Are there dangers of the brands association with a large corporation?

174

6) What do you think Cadburys next moves with Snapple should be? Should the company attempt to expand or reposition Snapple? Should Cadbury spin-off its Americas Beverages group? Teaching Objectives 1) To review the marketing imperative of choosing brand elements 2) To analyze the development of a communication strategy 3) To examine common branding mistakes 4) To review strategies for rebuilding a brand Teaching Strategy The Snapple case lends itself to a multi-part discussion because of the three stages of the brands development. Discussion can start with the building of the brand, next observe some of the pitfalls of branding as illustrated by the Quaker Oats segment of the case, and finally examine the revitalization of the brand with Triarc Beverage Group. Students will likely be familiar with the brand, but might not be familiar with its ownership history or its ups and downs. It might be useful to establish a timeline and chart the growth of the brand at the beginning as a guide for discussion. The first stage of the Snapple brand began in the 1970s and lasted through the early 1990s. To make it easy for students to get involved in discussion, it might be useful to start by enumerating the elements that comprise the Snapple brand. In terms of the framework for building brand equity, each brand element should be evaluated for its contribution to image and awareness based on the six criteria from Chapter 4. First, the Snapple name should be considered. Snapple itself is memorable, meaningful, and fun, which contributes both awareness and image. The name was originally derived from a carbonated apple drink, but clearly was extensible to a variety of juice drinks. The individual names for the flavored beverages, such as Bali Blast, Mango Madness, or Amazing Grape added exotic, fun, and flavorful image elements to the brand. The memorable slogan, Made from the best stuff on Earth, conveyed important associations such as natural and healthy, while the jokingly hyperbolic tone suggested a casual and humorous brand personality. Snapples packaging, with the wide-mouth 16 oz. glass bottle was functional and innovative, while also aesthetically interesting. The quirky package design set Snapple apart from other beverage brands. The brand character, Wendy, had a 175

number of associations, including honesty, relevance, fun, and New York personality. The latter association may not have been a positive for all U.S. consumers, since it suggested regionality for the brand. Wendy also represented consumer involvement and engagement, because of the letter-writing ad campaign she starred in. Students can be asked how Snapple mixed and matched its brand elements to maximize their contribution to brand equity. Snapples marketing program is the next aspect of the brand building that should be discussed. The product is a good place to start. Snapples unique flavor variety positioned it as a more interesting alternative to fruit juices. Students can be asked how a brand should balance product variety over time. Too many varieties can overwhelm consumers and anger retailers, since some varieties wont sell. With too few flavors, consumers get bored and look to other brands for alternatives. Snapples points-of-parity and points-of-difference relative to other beverages can be discussed as well. For example, points-of-parity with soft drinks were refreshment and portability, while points-of-difference were all-natural and fruit juice. Snapples channel strategy, which emphasized up-and-down-thestreet locations in convenience stores, newsstands, and other small shops, also set it apart from other juice drinks. One consequence of this strategy was that the brand became spontaneous and experiential, because it could be consumed directly after a purchase, as opposed to a grocery-store brand that was consumed in the home. Snapples communication strategy was also vital to the development of a cult following. The brands television advertising, with the Wendy character as a brand spokesperson, used a letter-writing formula to support the brands image as quirky, fun, and consumer-focused. The ads used real letters from real Snapple customers, and then responded to the letters by filming segments starring those customers and using them in the commercials. Snapple also sponsored talk-show hosts Rush Limbaugh and Howard Stern, and used a variety of public relations and promotion campaigns. Finally, students can discuss Snapples price point and its image implications. Here a mental map of the Snapple brand will be useful to elucidate consumer attitudes toward the brand and sources of equity. Students should arrive at the conclusion that Snapple was a strong brand with a strong community of users. The Quaker Oats segment of the case can be used to illustrate several key points. First, Quakers $1.7 billion purchase of Snapple is a good point to discuss valuing a brand. Students can be asked the broad question of how to value a brand, and how it relates to customer-based 176

brand equity. Then the discussion can turn to specific valuation methodology, such as the Interbrand method or a price/volume premium method. Using either methodology, the value of the Snapple brand should not exceed $1 billion. Which begs the question, why did Quaker Oats pay such a premium for the brand? For Quaker to justify such a high price for Snapple, it must have assumed that the brand was worth more to them than to any other company. Students can analyze why Quaker might have reason to make that assumption. One possible reason is that Quaker expected to leverage channel strength developed by its Gatorade brand. Next, the discussion can turn to the mistakes Quaker made with the brand. First, Quaker misunderstood Snapples personality. It changed many things about the brand, starting with the distribution system by piggybacking it with Gatorade. Quaker also entered the supermarket category with large size bottles, up to 64 ounces. Quaker changed Snapples marketing, letting Wendy, Rush, and Howard go in favor of a campaign celebrating the brands desire to be the number-three beverage brand titles Threedom is Freedom. Next, Quaker lowered the price on Snapple, expecting increased volume to make up for the lower price. This price affected Snapples premium positioning, however. Quaker also changed the label and packaging for Snapple, moves that did not sit well with loyal consumers. Other mistakes included missing the big summer selling season because it didnt understand the juice market, slowing product innovation, and underestimating competition from the likes of Arizona, Nantucket Nectars, and Lipton. The final piece of the case deals with Triarc Beverage Groups purchase of Snapple and the subsequent turnaround of the brand. Triarc bought Snapple from Quaker for a mere $300 million, which can be tied back in to the topic of valuation. The discussion can focus on Triarcs back to basics approach to revitalizing Snapple. When Triarc took over, it still had the same product and still had high awareness, but was faced with the conventional wisdom that dictated fading beverage brands do not rebuild. Triarc identified the five biggest challenges facing the brand and worked immediately to address them. Students can be asked to identify key areas for improvement. Triarc found the following five remedies for the brand: 1. Bring back product innovation a. Whipper Snapple, Snapple Elements, limited edition bottles 2. Bring personality back to the advertising a. Reinstate Wendy b. More events & promotions c. Revitalize tagline, Best stuff is in here 177

d. Little Fruits ads 3. Fix packaging a. Add new labels, with Snapple employee pictures b. Withdraw oversize bottles 4. Mend distribution a. Repair relationships with independent and local distributors b. Return to focus on up-and-down-the-street distribution 5. Respect Seasonality a. Took over in March, had a big push by the summer selling season Triarcs swift response sent a message to core consumers that Snapple was back, and sales rapidly picked up. Here students can discuss the challenges of keeping a brand fresh and maintaining equity over time through innovation and relevance, as described in Chapter 13. A final piece of the discussion can include Cadbury Schweppes $1.45 billion purchase of Snapple in 2000, and the task of keeping the brand growing. Key Lessons Strong brands have rich, cohesive brand images and wellentrenched brand values. Strong brands create bonds and achieve resonance with consumers by in-depth understanding of what the brand means Building a strong brand is art and science creativity is critical. The value of a brand depends, in part, on what you can and want to do with it. Violating a brand promise leads to adverse consequences Revitalizing a brand starts by first leveling off the sales slide. Keeping a brand fresh over time requires innovation and relevance throughout the marketing program.

Discussion Questions 1) How would you characterize Snapple's brand image and sources of brand equity? What are the strengths and weaknesses of the brand's existing personality and image? Brand Image/Equity

178

o Personality: fun, quirky, customer-friendly o Healthy/all-natural o Innovative juice flavors Strengths and Weaknesses o Strong associations to juice products, enables extensions but limits their breadth o Healthy image, but not 100 % juice like other brands o Juice associations make Snapple vulnerable to tea competitors o Personality is unique, lots of equity

2) Where did Quaker go wrong? What could they or should they have done differently? Is Cadbury in danger of making the same mistakes as Quaker did? Detailed in notes above

3) How effective and appropriate do you think Triarcs marketing program was? What changes, if any, would you recommend Cadbury make to Snapple marketing? Triarc Marketing o Back to Basics approach resonated with consumers o Found a unique use for Wendy as promotion spokesperson, which was not repetition of earlier television advertising o Little Fruits ads award-winning, humorous, and vast improvement on Threedom is Freedom Cadbury changes o Brand image & positioning o Packaging o Distribution

4) How has Snapples sale to Cadbury affected Snapples equity? What are the dangers of the brands association with a large corporation? Brand based on quirky, independent image This image could be adversely affected if links to Cadbury made too overt

5) What do you think Cadburys next moves with Snapple should be? Should the company attempt to expand or reposition Snapple? Should Cadbury spin-off its Americas Beverages group? 179

Back to basics to revive the brand Focus on product innovation Brand personality revival Adjust packaging and get rid of the big sizes Work on distribution Emphasize seasonality Separate the brand from Cadbury

180

Accenture - Rebranding a Global Brand Teaching Notes Summary This case reviews two main topics: how to build a strong professional services brand and how to accomplish a rebranding. The case traces the history of Accenture, formerly called Andersen Consulting, as it grew from a consulting offshoot of an accounting firm to a leading professional services firm. Accenture employed marketing strategies to help it achieve this success, and it was the first consulting firm to develop advertising campaigns targeting senior executives. The second part of the case details the rebranding and relaunch of Accenture, which was global in scope and was achieved in a mere 147 days. In that time, Accenture developed a new name, logo, launch advertising campaign, and positioning. Students may consider the following questions before class discussion: 1) How would you characterize Andersen Consultings brand equity in the late-90s? What factors and decisions contributed to the building of this equity? 2) Compare the characteristics of Accentures brand equity to those of Andersen Consulting. Do you think the rebranding and repositioning of the company successfully transferred the equity from the old name to the new one? 3) How much of a competitive threat is IBM? How should Accenture best compete with them? 4) Evaluate the effectiveness of Tiger Woods as a spokesman for the company. Is Accenture achieving its objectives with a celebrity spokesman? Teaching Objectives 1) To analyze branding in the professional services category 2) To examine marketing techniques in terms of building awareness and developing image 3) To review the design of global marketing programs 4) To discuss legal issues in branding 5) To analyze the process of repositioning a brand 6) To review the issues involved in a rebranding Teaching Strategy

181

The Accenture case has two main parts, the first on building a professional services brand and the second on rebranding and repositioning a company. There is also plenty of information to make a discussion of legal issues in branding worthwhile. Students should be familiar with the story of the rebranding, since it occurred in 2001. The history of the brand may be less familiar, and it will be useful to start with the branding of a professional services firm. The discussion can start with a history of Accenture, starting with its early days as a consulting arm of Arthur Andersen up to the 1987 image initiative that eventually led to the creation of Andersen Consulting as a separate business unit in 1989. Name selection criteria is a good topic to introduce here, especially since it will come up again with respect to the Accenture rebranding. Also, the 1989 renaming was the beginning of a concerted branding effort by Accenture management, which until that time had not been seriously undertaken in the professional services category. Students can be asked what values and characteristics are important to clients of consulting companies and how Accenture communicated its values and characteristics. Students can also be asked to contrast the values and characteristics important for consulting companies with those important for accounting firms. Here, a discussion of Accentures association with Arthur Andersen in terms of how it affected Accentures points-of-parity and points-of-difference in the consulting category may be useful. Accenture was one of the first professional services firms to advertise, and in 1989 it accounted for 50 percent of the media expenditures by consulting firms. Students can discuss the early-mover advantage and whether they think it played a role in Accentures rise. Television advertising was an important component of Accentures early brandbuilding effort, but the company also supplemented its image ads with print ads, public relations, articles in journals and the business press, and by innovating with airport advertising. Accenture also kept tabs on its brand development by employing sophisticated research methods. From the start, Andersen Consulting conducted extensive market research focusing on five factors: (1) awareness, (2) client satisfaction, (3) buyer values, (4) advertising copy, and (5) media portrayal. It also conducted a tracking study to monitor awareness of the brand in the marketplace. Students can discuss the value of a brand equity measurement system, as well as various research techniques, as described in Chapters 8 and 9. Once Accenture became a leader in its field by the mid-1990s, conflicts with parent company Arthur Andersen began. The legal issues involved are complicated, but discussion can refer to legal branding issues from 182

Chapter 4 for some insights. The basic problem was marketplace confusion due to the similar names of Andersen Consulting and Arthur Andersen and the fact that the companies were linked in a corporate structure. Also, Arthur Andersen had begun to compete in the consulting category, further blurring the distinction between the two companies in the minds of consumers. To remedy the situation, Accenture filed for arbitration and won independence from Arthur Andersen. A stipulation of the arbitration decision was for Accenture to give up the Andersen Consulting name, which leads to the last section of the case on rebranding. Here the discussion can touch on the most obvious aspect of a rebranding process, the renaming. Chapter 4 contains much useful information on renaming. It provides naming guidelines, such as brand awareness is improved to the extent that brand names are 1) simple and easy to pronounce or spell, 2) familiar and meaningful, and 3) different, distinctive, and unusual. Accenture can be evaluated in terms of these criteria. The discussion can also include the various types of names, as listed in Figure 4-4: Landors Brand Name Taxonomy. Next, the process of finding a new name can be discussed. This process is outlined in the case and also in Chapter 4. It is important to note the time- and money-consuming aspects of this process, particularly when a global name search is being conducted. The legal aspects of selecting a trademark, which are covered in Brand Focus 4.0: Legal Branding Considerations, should also be discussed. The Accenture name, meant to suggest an accent on the future can be evaluated in terms of its contribution to brand equity. Aside from the name, Accenture also developed a new logo, a new marketing communications strategy, and a new positioning for the firm. The new logo, with its greater-than symbol pointing the way forward, was meant to visually represent an accent on the future. Students also can consider the pre-launch teaser campaign and the initial name launch campaign and subsequent brand campaign themed Now it gets interesting in terms of their building awareness, creating an image, and level of integration. Other aspects of the coordinated launch can be discussed as well. Students can discuss how effectively the brand elements and the marketing campaign conveyed Accentures repositioning, which was begun before the name search. [Note that the new positioning was done before the name search, but it wasnt launched externally until February 2001]. Here, the task of managing a brand over time, as detailed in Chapter 13, can be discussed. The discussion can conclude by considering Accentures I am your idea campaign as an extension of the rebranding campaign. The campaign also coincided with a refined positioning centered around the brand essence Innovation Delivered. Students can analyze this new 183

positioning as it relates to the preceding positioning (Bridging Boundaries to Create the Future) and Accentures growth strategy. Accentures refined personality traits (Innovative, Smart, Collaborative, and Passionate) and positioning statement (From innovation to execution, Accenture helps accelerate your vision) can also be discussed and analyzed. These discussion topics can be tied into the lesson from Chapter 3: Brand Positioning and Values. A fruitful discussion can address how flexible a positioning should be and how often it should change. Accentures clearly evolved over time as their capabilities and clients needs grew. Would they be able to transcend being a consulting company? How? This story is still unfolding and should be of keen interest to students. Key Lessons Professional services brands can be built using the principles of customer-based brand equity model Brand positioning and values can help guide branding decisions Implementing a brand equity measurement and management system is vital to understanding the sources and results of brand equity, as well as to developing means for building additional equity A rebranding is a costly exercise, but if done properly it can preserve or improve the equity of the former brand.

Discussion Questions 1) How would you characterize Andersen Consultings brand equity in the late-1990s? What factors and decisions contributed to the building of this equity? Equity o High awareness in category o High consideration in category o Reputation for technological expertise o Strong reputation for strategy implementation o Network of offices and partners created global network o High mindshare and heartshare o Perceived as a good value Factors and Decisions o Emphasis on IT services beginning in late 1980s 184

o Focus on brand-building o Integrated marketing program, high-profile media buys o Implementation of a brand equity management & measurement system 2) Compare the characteristics of Accentures brand equity to those of Andersen Consulting. Do you think the rebranding and repositioning of the company successfully transferred the equity from the old name to the new one? Accentures Equity o In all but a few countries, Accenture name registered comparable awareness levels o Retained consideration in category o Retained reputation for technology and strategy o Added more global image Effective Transfer? o With few exceptions, students should conclude that the transfer was effective 3) How much of a competitive threat is IBM? How should Accenture best compete with them? Very strong competitor, especially after purchasing PricewaterhouseCoopers Consulting Strong technical skills and research staff Accentures edge lies in its history of solving business problems and its industry knowledge, while IBM has better been known as a technology company Open for class discussions and arguments

4) Evaluate the effectiveness of Tiger Woods as a spokesman for the company. Is Accenture achieving its objectives with a celebrity spokesman? Tigers image of strength, mastery, discipline, and relentless focus on winning resonate with Accentures positioning of high-performance business Evaluation is open for class discussions and arguments

185