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Strategic Brand Management

Building, Measuring, and Managing Brand Equity Global Edition

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Strategic Brand Management

Building, Measuring, and Managing Brand Equity Global Edition

Kevin Lane Keller Tuck School of Business

Dartmouth College

4e

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PART I Opening Perspectives 29 Chapter 1 Brands and Brand Management 29

PART II Developing a Brand Strategy 67 Chapter 2 Customer-Based Brand Equity and Brand Positioning 67 Chapter 3 Brand Resonance and the Brand Value Chain 106

PART III Designing and Implementing Brand Marketing Programs 141 Chapter 4 Choosing Brand Elements to Build Brand Equity 141 Chapter 5 Designing Marketing Programs to Build Brand Equity 177 Chapter 6 Integrating Marketing Communications to Build Brand Equity 217 Chapter 7 Leveraging Secondary Brand Associations to Build Brand Equity 259

PART IV Measuring and Interpreting Brand Performance 291 Chapter 8 Developing a Brand Equity Measurement and Management System 291 Chapter 9 Measuring Sources of Brand Equity: Capturing Customer Mind-Set 324 Chapter 10 Measuring Outcomes of Brand Equity: Capturing Market Performance 362

PART V Growing and Sustaining Brand Equity 385 Chapter 11 Designing and Implementing Branding Architecture Strategies 385 Chapter 12 Introducing and Naming New Products and Brand Extensions 431 Chapter 13 Managing Brands Over Time 477 Chapter 14 Managing Brands Over Geographic Boundaries and Market Segments 509

PART VI Closing Perspectives 547 Chapter 15 Closing Observations 547

Brief Contents

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Contents

Prologue: Branding Is Not Rocket Science 19 Preface 21 Acknowledgments 26 About the Author 28

PART I Opening Perspectives 29 Chapter 1 Brands and Brand Management 29

Preview 30 What Is a Brand? 30

Brand Elements 30 Brands versus Products 31

BRANDING BRIEF 1-1: Coca-Cola’s Branding Lesson 32 Why Do Brands Matter? 34

Consumers 34 Firms 35

Can Anything Be Branded? 36 Physical Goods 37

BRANDING BRIEF 1-2: Branding Commodities 38 THE SCIENCE OF BRANDING 1-1: Understanding Business-to-Business Branding 40 THE SCIENCE OF BRANDING 1-2: Understanding High-Tech Branding 41 Services 42 Retailers and Distributors 43 Online Products and Services 43 People and Organizations 45 Sports, Arts, and Entertainment 46

BRANDING BRIEF 1-3: Place Branding 48 Geographic Locations 48 Ideas and Causes 48

What Are the Strongest Brands? 48 THE SCIENCE OF BRANDING 1-3: Understanding Market Leadership 50

Branding Challenges and Opportunities 52 Savvy Customers 52 Economic Downturns 54 Brand Proliferation 54

THE SCIENCE OF BRANDING 1-4: Marketing Brands in a Recession 55 Media Transformation 55 Increased Competition 56 Increased Costs 56 Greater Accountability 56

The Brand Equity Concept 57

9

10 CONTENTS

Strategic Brand Management Process 58 Identifying and Developing Brand Plans 58 Designing and Implementing Brand Marketing Programs 58 Measuring and Interpreting Brand Performance 60 Growing and Sustaining Brand Equity 60

Review 61 Discussion Questions 61 BRAND FOCUS 1.0: History of Branding 61 Notes 64

PART II Developing a Brand Strategy 67 Chapter 2 Customer-Based Brand Equity and Brand Positioning 67

Preview 68 Customer-Based Brand Equity 68

Defining Customer-Based Brand Equity 68 Brand Equity as a Bridge 70

Making a Brand Strong: Brand Knowledge 71 THE SCIENCE OF BRANDING 2-1: Brand Critics 72

Sources of Brand Equity 73 Brand Awareness 73 Brand Image 76

Identifying and Establishing Brand Positioning 79 Basic Concepts 79 Target Market 79 Nature of Competition 81 Points-of-Parity and Points-of-Difference 82

Positioning Guidelines 85 Defining and Communicating the Competitive Frame of Reference 85 Choosing Points-of-Difference 87 Establishing Points-of-Parity and Points-of-Difference 88

BRANDING BRIEF 2-1: Positioning Politicians 89 Straddle Positions 90 Updating Positioning over Time 91 Developing a Good Positioning 93

Defining a Brand Mantra 93 Brand Mantras 93

BRANDING BRIEF 2-2: Nike Brand Mantra 94 BRANDING BRIEF 2-3: Disney Brand Mantra 95 THE SCIENCE OF BRANDING 2-2: Branding Inside the Organization 97

Review 97 Discussion Questions 98 BRAND FOCUS 2.0: The Marketing Advantages of Strong Brands 98 Notes 100

Chapter 3 Brand Resonance and the Brand Value Chain 106 Preview 107 Building a Strong Brand: The Four Steps of Brand Building 107

Brand Salience 107 Brand Performance 111 Brand Imagery 113

CONTENTS 11

THE SCIENCE OF BRANDING 3-1: Luxury Branding 114 Brand Judgments 117 Brand Feelings 118 Brand Resonance 120 BRANDING BRIEF 3-1: Building Brand Communities 122 Brand-Building Implications 122

THE SCIENCE OF BRANDING 3-2: Putting Customers First 126 The Brand Value Chain 128

Value Stages 129 Implications 131

Review 132 Discussion Questions 134 BRAND FOCUS 3.0: Creating Customer Value 134

Customer Equity 134

Notes 138

PART III Designing and Implementing Brand Marketing Programs 141 Chapter 4 Choosing Brand Elements to Build Brand Equity 141

Preview 142 Criteria for Choosing Brand Elements 142

Memorability 143 Meaningfulness 143 Likability 143 Transferability 144 Adaptability 144

THE SCIENCE OF BRANDING 4-1: Counterfeit Business Is Booming 146 Protectability 147

Options and Tactics for Brand Elements 147 Brand Names 147 URLs 155 Logos and Symbols 155 Characters 156 Slogans 158

BRANDING BRIEF 4-1: Updating the Disneyland Castle 159 THE SCIENCE OF BRANDING 4-2: Balance Creative and Strategic Thinking to Create Great Characters 160 BRANDING BRIEF 4-2: Benetton’s Brand Equity Management 162 Jingles 164 Packaging 164

Putting It All Together 167 BRANDING BRIEF 4-3: Do-Overs with Brand Makeovers 168 THE SCIENCE OF BRANDING 4-3: The Psychology of Packaging 169

Review 170 Discussion Questions 171 BRAND FOCUS 4.0: Legal Branding Considerations 171 Notes 173

Chapter 5 Designing Marketing Programs to Build Brand Equity 177 Preview 178 New Perspectives on Marketing 178

12 CONTENTS

Integrating Marketing 179 Personalizing Marketing 181

THE SCIENCE OF BRANDING 5-1: Making Sense Out of Brand Scents 183 Reconciling the Different Marketing Approaches 186

Product Strategy 187 Perceived Quality 187 Aftermarketing 187 Summary 190

Pricing Strategy 191 Consumer Price Perceptions 191

THE SCIENCE OF BRANDING 5-2: Understanding Consumer Price Perceptions 192 Setting Prices to Build Brand Equity 193

BRANDING BRIEF 5-1: Marlboro’s Price Drop 193 Summary 199

Channel Strategy 199 Channel Design 199 Indirect Channels 201 Direct Channels 205

BRANDING BRIEF 5-2: Goodyear’s Partnering Lessons 206 Online Strategies 208 Summary 208

Review 209 Discussion Questions 209 BRAND FOCUS 5.0: Private-Label Strategies and Responses 210 Notes 212

Chapter 6 Integrating Marketing Communications to Build Brand Equity 217 Preview 218 The New Media Environment 219

Challenges in Designing Brand-Building Communications 219 Role of Multiple Communications 221

Four Major Marketing Communication Options 221 Advertising 221

THE SCIENCE OF BRANDING 6-1: The Importance of Database Marketing 229 Promotion 232 Online Marketing Communications 236 Events and Experiences 239

BRANDING BRIEF 6-1: Tough Mudder: The Toughest Event on the Planet 242 Mobile Marketing 244

Brand Amplifiers 246 Public Relations and Publicity 246 Word-of-Mouth 246

Developing Integrated Marketing Communication Programs 247 Criteria for IMC Programs 248 Using IMC Choice Criteria 250

THE SCIENCE OF BRANDING 6-2: Coordinating Media to Build Brand Equity 251 Review 252 Discussion Questions 253 BRAND FOCUS 6.0: Empirical Generalizations in Advertising 254 Notes 255

CONTENTS 13

Chapter 7 Leveraging Secondary Brand Associations to Build Brand Equity 259 Preview 260 Conceptualizing the Leveraging Process 261

Creation of New Brand Associations 261 Effects on Existing Brand Knowledge 261 Guidelines 262

Company 263 BRANDING BRIEF 7-1: IBM Promotes a Smarter Planet 264

Country of Origin and Other Geographic Areas 266 BRANDING BRIEF 7-2: Selling Brands the New Zealand Way 268

Channels of Distribution 269 Co-Branding 269

THE SCIENCE OF BRANDING 7-1: Understanding Retailers’ Brand Images 270 Guidelines 271 Ingredient Branding 272

THE SCIENCE OF BRANDING 7-2: Understanding Brand Alliances 273 Licensing 275

BRANDING BRIEF 7-3: Ingredient Branding the DuPont Way 276 Guidelines 278

Celebrity Endorsement 278 Potential Problems 279 Guidelines 281

Sporting, Cultural, or Other Events 282 BRANDING BRIEF 7-4: Managing a Person Brand 283

Third-Party Sources 284 Review 285 Discussion Questions 286 BRAND FOCUS 7.0: Going for Corporate Gold at the Olympics 286 Notes 288

PART IV Measuring and Interpreting Brand Performance 291 Chapter 8 Developing a Brand Equity Measurement and

Management System 291 Preview 292 The New Accountability 292 Conducting Brand Audits 293

Brand Inventory 294 Brand Exploratory 295 Brand Positioning and the Supporting Marketing Program 298

THE SCIENCE OF BRANDING 8-1: The Role of Brand Personas 299 Designing Brand Tracking Studies 300

What to Track 300

BRANDING BRIEF 8-1: Sample Brand Tracking Survey 301 How to Conduct Tracking Studies 303 How to Interpret Tracking Studies 305

14 CONTENTS

Establishing a Brand Equity Management System 305 BRANDING BRIEF 8-2: Understanding and Managing the Mayo Clinic Brand 306 Brand Charter 307 Brand Equity Report 308 Brand Equity Responsibilities 309

THE SCIENCE OF BRANDING 8-2: Maximizing Internal Branding 310 BRANDING BRIEF 8-3: How Good Is Your Marketing? Rating a Firm’s Marketing Assessment System 312

Review 314 Discussion Questions 315 BRAND FOCUS 8.0: Rolex Brand Audit 315 Notes 322

Chapter 9 Measuring Sources of Brand Equity: Capturing Customer Mind-Set 324 Preview 325 Qualitative Research Techniques 325

BRANDING BRIEF 9-1: Digging Beneath the Surface to Understand Consumer Behavior 326 Free Association 326 Projective Techniques 328

BRANDING BRIEF 9-2: Once Upon a Time . . . You Were What You Cooked 329 Zaltman Metaphor Elicitation Technique 330

BRANDING BRIEF 9-3: Gordon Ramsay 331 Neural Research Methods 332 Brand Personality and Values 333 Ethnographic and Experiential Methods 334

BRANDING BRIEF 9-4: Making the Most of Consumer Insights 335 Summary 338

Quantitative Research Techniques 338 Brand Awareness 339 Brand Image 342

THE SCIENCE OF BRANDING 9-1: Understanding Categorical Brand Recall 343 Brand Responses 344 Brand Relationships 346

THE SCIENCE OF BRANDING 9-2: Understanding Brand Engagement 349 Comprehensive Models of Consumer-Based Brand Equity 351

BrandDynamics 351 Relationship to the CBBE Model 352

Review 352 Discussion Questions 353 BRAND FOCUS 9.0: Young & Rubicam’s BrandAsset Valuator 353 Notes 359

Chapter 10 Measuring Outcomes of Brand Equity: Capturing Market Performance 362 Preview 363 Comparative Methods 364

Brand-Based Comparative Approaches 364

CONTENTS 15

Marketing-Based Comparative Approaches 365 Conjoint Analysis 367

Holistic Methods 368 Residual Approaches 369 Valuation Approaches 371

THE SCIENCE OF BRANDING 10-1: The Prophet Brand Valuation Methodology 375 BRANDING BRIEF 10-1: Beauty Is in the Eye of the Beholder 378

Review 379 Discussion Questions 380 BRAND FOCUS 10.0: Branding and Finance 380 Notes 382

PART V Growing and Sustaining Brand Equity 385 Chapter 11 Designing and Implementing Brand Architecture Strategies 385

Preview 386 Developing a Brand Architecture Strategy 386

Step 1: Defining Brand Potential 386

THE SCIENCE OF BRANDING 11-1: The Brand–Product Matrix 387 THE SCIENCE OF BRANDING 11-2: Capitalizing on Brand Potential 390 Step 2: Identifying Brand Extension Opportunities 392 Step 3: Branding New Products and Services 392 Summary 393

Brand Portfolios 393 BRANDING BRIEF 11-1: Expanding the Marriott Brand 396

Brand Hierarchies 398 Levels of a Brand Hierarchy 398 Designing a Brand Hierarchy 400

BRANDING BRIEF 11-2: Netflix Branding Stumbles 401 Corporate Branding 408

THE SCIENCE OF BRANDING 11-3: Corporate Brand Personality 409 Corporate Image Dimensions 409

BRANDING BRIEF 11-3: Corporate Reputations: The Most Admired U.S. Companies 410 BRANDING BRIEF 11-4: Corporate Innovation at 31M 412 Managing the Corporate Brand 414

Brand Architecture Guidelines 421 Review 422 Discussion Questions 423 BRAND FOCUS 11.0: Cause Marketing 423 Notes 426

Chapter 12 Introducing and Naming New Products and Brand Extensions 431 Preview 432 New Products and Brand Extensions 432

BRANDING BRIEF 12-1: Growing the McDonald’s Brand 434 Advantages of Extensions 435

Facilitate New-Product Acceptance 436 Provide Feedback Benefits to the Parent Brand 438

16 CONTENTS

Disadvantages of Brand Extensions 441 Can Confuse or Frustrate Consumers 441 Can Encounter Retailer Resistance 442 Can Fail and Hurt Parent Brand Image 442

THE SCIENCE OF BRANDING 12-1: When Is Variety a Bad Thing? 443 Can Succeed but Cannibalize Sales of Parent Brand 444 Can Succeed but Diminish Identification with Any One Category 444

BRANDING BRIEF 12-2: Are There Any Boundaries to the Virgin Brand Name? 445 Can Succeed but Hurt the Image of the Parent Brand 446 Can Dilute Brand Meaning 446 Can Cause the Company to Forgo the Chance to Develop a New Brand 446

Understanding How Consumers Evaluate Brand Extensions 447 Managerial Assumptions 448 Brand Extensions and Brand Equity 448 Vertical Brand Extensions 451

Evaluating Brand Extension Opportunities 452 Define Actual and Desired Consumer Knowledge about the Brand 452

BRANDING BRIEF 12-3: Mambo Extends Its Brand 453 Identify Possible Extension Candidates 454 Evaluate the Potential of the Extension Candidate 454 Design Marketing Programs to Launch Extension 457 Evaluate Extension Success and Effects on Parent Brand Equity 458

Extension Guidelines Based on Academic Research 459 Review 469 Discussion Questions 469 BRAND FOCUS 12.0: Scoring Brand Extensions 470 Notes 471

Chapter 13 Managing Brands Over Time 477 Preview 478 Reinforcing Brands 479

Maintaining Brand Consistency 480

THE SCIENCE OF BRANDING 13-1: Brand Flashbacks 482 Protecting Sources of Brand Equity 482 Fortifying versus Leveraging 484 Fine-Tuning the Supporting Marketing Program 484

BRANDING BRIEF 13-1: Razor-Sharp Branding at Gillette 487 Revitalizing Brands 490

BRANDING BRIEF 13-2: Remaking Burberry’s Image 492 BRANDING BRIEF 13-3: Harley-Davidson Motor Company 493 BRANDING BRIEF 13-4: A New Morning for Mountain Dew 494 Expanding Brand Awareness 495 Improving Brand Image 497

Adjustments to the Brand Portfolio 499 Migration Strategies 499 Acquiring New Customers 499 Retiring Brands 500

Review 502 Discussion Questions 504 BRAND FOCUS 13.0: Responding to a Brand Crisis 504 Notes 507

CONTENTS 17

Chapter 14 Managing Brands Over Geographic Boundaries and Market Segments 509 Preview 510 Regional Market Segments 510 Other Demographic and Cultural Segments 511 Rationale for Going International 512

BRANDING BRIEF 14-1: Marketing to African Americans 513 Advantages of Global Marketing Programs 514

Economies of Scale in Production and Distribution 514 Lower Marketing Costs 515 Power and Scope 515 Consistency in Brand Image 515 Ability to Leverage Good Ideas Quickly and Efficiently 515 Uniformity of Marketing Practices 515

Disadvantages of Global Marketing Programs 516 Differences in Consumer Needs, Wants, and Usage Patterns for Products 516 Differences in Consumer Response to Branding Elements 516 Differences in Consumer Responses to Marketing Mix Elements 517 Differences in Brand and Product Development and the Competitive Environment 518 Differences in the Legal Environment 518 Differences in Marketing Institutions 518 Differences in Administrative Procedures 518

Global Brand Strategy 519 Global Brand Equity 519 Global Brand Positioning 520

Standardization versus Customization 521 Standardization and Customization 521

BRANDING BRIEF 14-2: Coca-Cola Becomes the Quintessential Global Brand 522 BRANDING BRIEF 14-3: UPS’s European Express 524

Developing versus Developed Markets 528 Building Global Customer-Based Brand Equity 529

1. Understand Similarities and Differences in the Global Branding Landscape 529 2. Don’t Take Shortcuts in Brand Building 530 3. Establish Marketing Infrastructure 531 4. Embrace Integrated Marketing Communications 532 5. Cultivate Brand Partnerships 532 6. Balance Standardization and Customization 533

BRANDING BRIEF 14-4: Managing Global Nestlé Brands 534 7. Balance Global and Local Control 535 8. Establish Operable Guidelines 536 8. Implement a Global Brand Equity Measurement System 537

10. Leverage Brand Elements 537

THE SCIENCE OF BRANDING 14-1: Brand Recall and Language 538 Review 539 Discussion Questions 541 BRAND FOCUS 14.0: China Global Brand Ambitions 541 Notes 543

PART VI Closing Perspectives 547 Chapter 15 Closing Observations 547

Preview 548 Strategic Brand Management Guidelines 548

Summary of Customer-Based Brand Equity Framework 548 Tactical Guidelines 550

What Makes a Strong Brand? 554 BRANDING BRIEF 15-1: The Brand Report Card 555

Future Brand Priorities 556 1. Fully and Accurately Factor the Consumer into the Branding Equation 556

BRANDING BRIEF 15-2: Reinvigorating Branding at Procter & Gamble 558 2. Go Beyond Product Performance and Rational Benefits 560 3. Make the Whole of the Marketing Program Greater Than the Sum of the Parts 561 4. Understand Where You Can Take a Brand (and How) 563 5. Do the “Right Thing” with Brands 565 6. Take a Big Picture View of Branding Effects. Know What Is Working (and Why) 566 Finding the Branding Sweet Spot 566

Review 567 Discussion Questions 568 BRAND FOCUS 15.0: Special Applications 568 Notes 573

Epilogue 575 Index 577

18 CONTENTS

Prologue: Branding Is Not Rocket Science

Although the challenges in branding can be immense and difficult, branding is not necessarily rocket science. I should know. I am not a rocket scientist—but my dad was. He was a physicist in the Air Force for 20 years, working on various rocket fuels. Always interested in what I did, he once asked what the book was all about. I explained the concept of brand equity and how the book addressed how to build, measure, and manage it. He listened, paused, and remarked, “That’s very interesting but, uh, that’s not exactly rocket science.”

He’s right. Branding is not rocket science. In fact, it is an art and a science. There’s always a creativity and originality component involved with marketing. Even if someone were to fol- low all the guidelines in this book—and all the guidelines were properly specified—the success or failure of a brand strategy would still depend largely on how, exactly, this strategy would be implemented.

Nevertheless, good marketing is all about improving the odds for success. My hope is that this book adds to the scientific aspect of branding, illuminating the subject and providing guid- ance to those who make brand-related decisions.

19

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Preface

Let me answer a few questions as to what this book is about, how it’s different from other books about branding, what’s new with this fourth edition, who should read it, how it’s organized, and how you can get the most out of it.

WHAT IS THE BOOK ABOUT? This book deals with brands—why they are important, what they represent to consumers, and what firms should do to manage them properly. As many business executives correctly recog- nize, perhaps one of the most valuable assets a firm has are the brands it has invested in and developed over time. Although competitors can often duplicate manufacturing processes and factory designs, it’s not so easy to reproduce strongly held beliefs and attitudes established in the minds of consumers. The difficulty and expense of introducing new products, however, puts more pressure than ever on firms to skillfully launch their new products as well as manage their existing brands.

Although brands may represent invaluable intangible assets, creating and nurturing a strong brand poses considerable challenges. Fortunately, the concept of brand equity—the main focus of this book—can provide marketers with valuable perspective and a common denominator to interpret the potential effects and trade-offs of various strategies and tactics for their brands. Think of brand equity as the marketing effects uniquely attributable to the brand. In a practical sense, brand equity is the added value a product accrues as a result of past investments in the marketing activity for the brand. It’s the bridge between what happened to the brand in the past and what should happen to it in the future.

The chief purpose of this book is to provide a comprehensive and up-to-date treatment of the subjects of brands, brand equity, and strategic brand management—the design and implementa- tion of marketing programs and activities to build, measure, and manage brand equity. One of the book’s important goals is to provide managers with concepts and techniques to improve the long- term profitability of their brand strategies. We’ll incorporate current thinking and developments on these topics from both academics and industry participants, and combine a comprehensive theoretical foundation with enough practical insights to assist managers in their day-to-day and long-term brand decisions. And we’ll draw on illustrative examples and case studies of brands marketed in the United States and all over the world.

Specifically, we’ll provide insights into how to create profitable brand strategies by building, measuring, and managing brand equity. We address three important questions:

1. How can we create brand equity? 2. How can we measure brand equity? 3. How can we sustain brand equity to expand business opportunities?

Readers will learn:

• The role of brands, the concept of brand equity, and the advantages of creating strong brands • The three main ways to build brand equity by properly choosing brand elements, designing

marketing programs and activities, and leveraging secondary associations • Different approaches to measuring brand equity, and how to implement a brand equity mea-

surement system • Alternative branding strategies and how to design a brand architecture strategy and devise

brand hierarchies and brand portfolios

21

22 PREFACE

• The role of corporate brands, family brands, individual brands, modifiers, and how to combine them into sub-brands

• How to adjust branding strategies over time and across geographic boundaries to maximize brand equity

WHAT’S DIFFERENT ABOUT THIS BOOK? My objective in writing this book was to satisfy three key criteria by which any marketing text should be judged:

• Depth: The material in the book had to be presented in the context of conceptual frameworks that were comprehensive, internally consistent and cohesive, and well grounded in the aca- demic and practitioner literature.

• Breadth: The book had to cover all those topics that practicing managers and students of brand management found intriguing and/or important.

• Relevance: Finally, the book had to be well grounded in practice and easily related to past and present marketing activities, events, and case studies.

Although a number of excellent books have been written about brands, no book has really maxi- mized those three dimensions to the greatest possible extent. This book sets out to fill that gap by accomplishing three things.

First, we develop our main framework that provides a definition of brand equity, identifies sources and outcomes of brand equity, and provides tactical guidelines about how to build, mea- sure, and manage brand equity. Recognizing the general importance of consumers and customers to marketing—understanding and satisfying their needs and wants—this broad framework approaches branding from the perspective of the consumer; it is called customer-based brand equity. We then introduce a number of more specific frameworks to provide more detailed guidance.

Second, besides these broad, fundamentally important branding topics, for completeness, numerous Science of Branding boxes provide in-depth treatment of cutting-edge ideas and concepts, and each chapter contains a Brand Focus appendix that delves into detail on specific, related branding topics, such as brand audits, legal issues, brand crises, and private labels.

Finally, to maximize relevance, numerous in-text examples illuminate the discussion of virtually every topic, and a series of Branding Brief boxes provide more in-depth examinations of selected topics or brands.

Thus, this book can help readers understand the important issues in planning and evaluat- ing brand strategies, as well as providing appropriate concepts, theories, and other tools to make better branding decisions. We identify successful and unsuccessful brand marketers—and why they have been so—to offer readers a greater appreciation of the range of issues in branding, as well as a means to organize their own thoughts about those issues.

WHO SHOULD READ THE BOOK? A wide range of people can benefit from reading this book:

• Students interested in increasing both their understanding of basic branding principles and their exposure to classic and contemporary branding applications and case studies

• Managers and analysts concerned with the effects of their day-to-day marketing decisions on brand performance

• Senior executives concerned with the longer-term prosperity of their brand franchises and product or service portfolios

• All marketers interested in new ideas with implications for marketing strategies and tactics

The perspective we adopt is relevant to any type of organization (public or private, large or small), and the examples cover a wide range of industries and geographies. To illuminate brand- ing concepts across different settings, we review specific applications to online, industrial, high-tech, service, retailer, and small business in Chapters 1 and 15.

PREFACE 23

HOW IS THE BOOK ORGANIZED? The book is divided into six major parts, adhering to the “three-exposure opportunity” approach to learning new material. Part I introduces branding concepts; Parts II, III, IV, and V provide all the specific details of those concepts; and Part VI summarizes and applies the concepts in various contexts. The specific chapters for each part and their contents are as follows.

Part I sets the stage by providing the “big picture” of what strategic brand management is all about and provides a blueprint for the rest of the book. The goal is to provide a sense for the content and context of strategic brand management by identifying key branding decisions and suggesting some of the important considerations for those decisions. Specifically, Chapter 1 introduces some basic notions about brands, and the role they’ve played and continue to play in marketing strategies. It defines what a brand is, why brands matter, and how anything can be branded, and provides an overview of the strategic brand management process.

Part II addresses the topic of brand equity and introduces three models critical for brand planning. Chapter 2 introduces the concept of customer-based brand equity, outlines the customer-based brand equity framework, and provides detailed guidelines for the critically important topic of brand positioning. Chapter 3 describes the brand resonance and brand value chain models that assist marketers in developing profitable marketing programs for their brand and creating much customer loyalty.

Part III examines the three major ways to build customer-based brand equity, taking a sin- gle product–single brand perspective. Chapter 4 addresses the first way to build customer-based brand equity and how to choose brand elements (brand names, logos, symbols, slogans), and the role they play in contributing to brand equity. Chapters 5 and 6 outline the second way to build brand equity and how to optimize the marketing mix to create customer-based brand equity. Chapter 5 covers product, pricing, and distribution strategies; Chapter 6 is devoted to creating integrated marketing communication programs to build brand equity. Although most readers are probably familiar with these “4 P’s” of marketing, it’s illuminating to consider them from the standpoint of brand equity and the effects of brand knowledge on consumer response to market- ing mix activity and vice versa. Finally, Chapter 7 examines the third major way to build brand equity—by leveraging secondary associations from other entities like a company, geographical region, person, or other brand.

Part IV looks at how to measure customer-based brand equity. These chapters take a detailed look at what consumers know about brands, what marketers want them to know, and how market- ers can develop measurement procedures to assess how well they’re doing. Chapter 8 provides a big-picture perspective of these topics, specifically examining how to develop and implement an efficient and effective brand equity measurement system. Chapter 9 examines approaches to measuring customers’ brand knowledge structures, in order to identify and quantify potential sources of brand equity. Chapter 10 looks at measuring potential outcomes of brand equity in terms of the major benefits a firm accrues from these sources of brand equity as well as how to measure the overall value of a brand.

Part V addresses how to manage brand equity, taking a broader, multiple product–multiple brand perspective as well as a longer-term, multiple-market view of brands. Chapter 11 consid- ers issues related to brand architecture strategies—which brand elements a firm chooses to apply across its various products—and how to maximize brand equity across all the different brands and products that a firm might sell. It also describes two important tools to help formulate brand- ing strategies—brand portfolios and the brand hierarchies. Chapter 12 outlines the pros and cons of brand extensions and develops guidelines for introducing and naming new products and brand extensions. Chapter 13 considers how to reinforce, revitalize, and retire brands, examining a number of specific topics in managing brands over time. Chapter 14 examines the implications of differences in consumer behavior and different types of market segments for managing brand equity. We pay particular attention to international issues and global branding strategies.

Finally, Part VI considers some implications and applications of the customer-based brand equity framework. Chapter 15 highlights managerial guidelines and key themes that emerged in earlier chapters of the book. This chapter also summarizes success factors for branding and applies the customer-based brand equity framework to address specific strategic brand manage- ment issues for different types of products (online, industrial goods, high-tech products, services, retailers, and small businesses).

24 PREFACE

REVISION STRATEGY FOR FOURTH EDITION The overarching goal of the revision of Strategic Brand Management was to preserve the aspects of the text that worked well, but to improve it as much as possible by updating and adding new material as needed. We deliberately avoided change for change’s sake. Our driving concern was to create the best possible textbook for readers willing to invest their time and energy at mastering the subject of branding.

We retained the customer-based brand equity framework that was the centerpiece of the third edition, and the three dimensions of depth, breadth, and relevance. Given all the academic research progress that has been made in recent years, however, as well as all the new market developments and events, the book required—and got—some important updates.

1. New and updated Branding Briefs and in-text examples: Many new Branding Briefs and numerous in-text examples have been added. The goal was to blend classic and contempo- rary examples, so many still-relevant and illuminating examples remain.

2. Additional academic references: As noted, the branding area continues to receive concerted academic research attention. Accordingly, each chapter incorporates new references and sources for additional study.

3. Tighter chapters: Chapters have been trimmed and large boxed material carefully screened to provide a snappier, more concise read.

4. Stronger visuals: The text includes numerous engaging photos and graphics. These visuals highlight many of the important and interesting concepts and examples from the chapters.

5. Updated and new original cases: To provide broader, more relevant coverage, new cases have been added to the Best Practices in Branding casebook including PRODUCT (RED), King Arthur Flour, and Target. Each of the remaining cases has been significantly updated. All of the cases are considerably shorter and tighter. Collectively, these cases provide insights into the thinking and activities of some of the world’s best marketers while also highlighting the many challenges they still face.

In terms of content, the book continues to incorporate material to address the changing techno- logical, cultural, global, and economic environment that brands face. Some of the specific new topics reviewed in depth in the fourth edition include:

• Marketing in a recession • Brand communities

• Luxury branding • Brand characters

• Brand personas • Brand makeovers

• Shopper marketing • Person branding

• Social currency • Brand potential

• Brand extension scorecard • Culture and branding

• Brand flashbacks • Future brand priorities

Some of the many brands and companies receiving greater attention include:

• Converse • L’Oréal • Tough Mudder

• Etisalat • Michelin • Liz Claiborne

• W Hotels • MTV • Prada

• HBO • Macy’s • TOMS

• Tupperware • Johnnie Walker • Chobani

• Groupon • Lions Gate • Kindle

• Louis Vuitton • Gannett • Coldplay

• Netflix • Subway • Febreze

• Uniqlo • M&M’s • Oreo

• Boloco • Hyundai • DHL

PREFACE 25

Some of the more major chapter changes from the third edition include the following:

• Chapters 2 and 3 have been reorganized and updated to show how the brand positioning, brand resonance, and brand value chain models are linked, providing a comprehensive set of tools to help readers understand how brand equity can be created and tracked.

• Chapter 6 has been reorganized and updated around four major marketing communication options: (1) Advertising and promotion; (2) Interactive marketing; (3) Events and experi- ences; and (4) Mobile marketing. Guidelines and examples are provided for each of the four options. Special attention is paid to the role of social media.

• Chapters 9 and 10 have been updated to include much new material on industry models of brand equity and financial and valuation perspectives on branding.

• Chapters 11 and 12 have been reorganized and updated to provide an in-depth three-step model of how to develop a brand architecture strategy. As part of these changes, a detailed brand extension scorecard is presented.

• Chapter 14 has been updated to include much new material on developing markets. • Chapter 15 has been updated to include much new material on future brand priorities.

HOW CAN YOU GET THE MOST OUT OF THE BOOK? Branding is a fascinating topic that receives much attention in the popular press. The ideas pre- sented in the book will help you interpret current branding developments. One good way to better understand branding and the customer-based brand equity framework is to apply the con- cepts and ideas presented in the book to current events, or to any of the more detailed branding issues or case studies presented in the Branding Briefs. The Discussion Questions at the end of the chapters often ask you to pick a brand and apply one or more concepts from that chapter. Focusing on one brand across all the questions—perhaps as part of a class project—permits some cumulative and integrated learning and is an excellent way to become more comfortable with and fluent in the material in the book.

This book truly belongs to you, the reader. Like most marketing, branding doesn’t offer “right” or “wrong” answers, and you should question things you don’t understand or don’t be- lieve. The book is designed to facilitate your understanding of strategic brand management and present some “best practice” guidelines. At the end of the day, however, what you get out of it will be what you put into it, and how you blend the ideas contained in these pages with what you already know or believe.

FACULTY RESOURCES Instructors can access a variety of print, media, and presentation resources through www .pearsonglobaleditions.com/keller.

Acknowledgments

I have been gratified by the acceptance of the first three editions of Strategic Brand Management. It has been translated and adapted in numerous languages and countries, adopted by many top universities, and used by scores of marketing executives around the world. The success of the text is in large part due to the help and support of others whom I would like to acknowledge and thank.

The Pearson team on the fourth edition was a huge help in the revision—many thanks to Stephanie Wall, Erin Gardner, Kierra Bloom, Ann Pulido, and Stacy Greene. Elisa Adams superbly edited the text with a very keen and helpful eye. Keri Miksza tracked down permissions and pro- vided an impressive array of ads and photos from which to choose. Katie Dougherty, Duncan Hall, and Alex Tarnoff offered much research assistance and support for the text. Lowey Sichol has joined me as co-author of the Best Practices in Branding casebook and has applied her marketing experience and wisdom to craft a set of informative, intriguing cases. John Lin has been a steady long-time contributor about what is happening in the tech world. Alison Pearson provided her usual superb administrative assistance in a number of areas.

I have learned much about branding in my work with industry participants, who have unique perspectives on what is working and not working (and why) in the marketplace. Our discussions have enriched my appreciation for the challenges in building, measuring, and managing brand equity and the factors affecting the success and failure of brand strategies.

I have benefited from the wisdom of my colleagues at the institutions where I have held aca- demic positions: Dartmouth College, Duke University, the University of California at Berkeley, Stanford University, the Australian Graduate School of Management, and the University of North Carolina at Chapel Hill.

Over the years, the doctoral students I advised have helped in my branding pursuits in a vari- ety of useful ways, including Sheri Bridges, Christie Brown, Jennifer Aaker, Meg Campbell, and Sanjay Sood. I have also learned much from my research partners and from the marketing field as a whole that has recognized the importance of branding in their research studies and programs. Their work provides much insight and inspiration.

Finally, special thanks go to my wife, Punam Anand Keller, and two daughters, Carolyn and Allison, for their never-ending patience, understanding, and support.

Pearson would like to thank and acknowledge the following people for their work on the Global Edition:

Contributors

Dr. Chris Baumann, Department of Marketing & Management, Macquarie University, Australia. Visiting Professor, Seoul National University, South Korea, and Aarhus University, Denmark.

Dr. Colin Campbell, Department of Marketing, Kent State University, USA.

Dr. Mike Cheong, School of Business Management, Nanyang Polytechnic, Singapore.

Prof. Wujin Chu, Associate Dean MBA Programs and Professor of Marketing, Seoul National University, South Korea.

Dr. Noha El-Bassiouny, Department of Marketing, the German University in Cairo, Egypt.   Dr. Noor Hasmini Abd Ghani, School of Business Management, College of Business, Universiti Utara Malaysia, Malaysia.

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Prof. Dr. Michael A. Grund, Head of Center for Marketing, HWZ University of Applied Sciences in Business Administration Zurich, Switzerland.

Phillip Morgan, UTS Business School, University of Technology, Sydney, Australia.   Arabella Pasquette, Freelance Lecturer and Consultant, Singapore and UK.

Alicia Perkins, Department of Marketing, University of Newcastle, Australia.

Professor Michael Jay Polonsky, School of Management and Marketing, Deakin University, Australia.

Reviewers

Dr. Nalia Aaijaz, PhD, University Malaysia Kelantan, Malaysia.

Dr. Yoosuf A Cader, Zayed University, Abu Dhabi, United Arab Emirates.

Dr. E. Constantinides, School of Management and Governance, University of Twente, The Netherlands.

Dr. Dalia Abdelrahman Farrag, The Arab Academy for Science, Technology & Maritime Transport, Egypt.

Susan Scoffield, Senior Lecturer in Marketing, Department of Business & Management, Manchester Metropolitan University, UK.

Dr. Margaret NF Tang, The School of Business, Macao Polytechnic Institute, China.

Venkata Yanamandram, School of Management & Marketing, University of Wollongong, Australia.

Graham Robert Young, University of Southern Queensland, Australia.

ACKNOWLEDGMENTS 27

About the Author

Kevin Lane Keller is the E. B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College. Professor Keller has degrees from Cornell, Carnegie-Mellon, and Duke uni- versities. At Dartmouth, he teaches MBA courses on marketing management and strategic brand management and lectures in executive programs on those topics.

Previously, Professor Keller was on the faculty at Stanford University, where he also served as the head of the marketing group. Additionally, he has been on the faculty at the University of California at Berkeley and the University of North Carolina at Chapel Hill, been a visiting profes- sor at Duke University and the Australian Graduate School of Management, and has two years of industry experience as Marketing Consultant for Bank of America.

Professor Keller’s general area of expertise lies in marketing strategy and planning, and branding. His specific research interest is in how understanding theories and concepts related to consumer behavior can improve marketing and branding strategies. His research has been published in three of the major marketing journals—the Journal of Marketing, the Journal of Marketing Research, and the Journal of Consumer Research. He also has served on the Editorial Review Boards of those journals. With over 90 published papers, his research has been widely cited and has received numerous awards.

Actively involved with industry, he has worked on a host of different types of marketing projects. He has served as a consultant and advisor to marketers for some of the world’s most successful brands, including Accenture, American Express, Disney, Ford, Intel, Levi Strauss, Procter & Gamble, and Samsung. Additional brand consulting activities have been with other top companies such as Allstate, Beiersdorf (Nivea), BlueCross BlueShield, Campbell, Colgate, Eli Lilly, ExxonMobil, General Mills, GfK, Goodyear, Hasbro, Intuit, Johnson & Johnson, Kodak, L.L. Bean, Mayo Clinic, MTV, Nordstrom, Ocean Spray, Red Hat, SAB Miller, Shell Oil,  Starbucks, Unilever, and Young & Rubicam. He has also served as an academic trustee for the Marketing Science Institute.

A popular and highly sought-after speaker, he has made speeches and conducted marketing seminars to top executives in a variety of forums. Some of his senior management and market- ing training clients include such diverse business organizations as Cisco, Coca-Cola, Deutsche Telekom, GE, Google, IBM, Macy’s, Microsoft, Nestlé, Novartis, Pepsico, and Wyeth. He has lectured all over the world, from Seoul to Johannesburg, from Sydney to Stockholm, and from Sao Paulo to Mumbai. He has served as keynote speaker at conferences with hundreds to thousands of participants.

Professor Keller is currently conducting a variety of studies that address strategies to build, measure, and manage brand equity. In addition to Strategic Brand Management, in its 3rd edition, which has been heralded as the “bible of branding,” he is also the co-author with Philip Kotler of the all-time best-selling introductory marketing textbook, Marketing Management, now in its 14th edition.

An avid sports, music, and film enthusiast, in his so-called spare time, he has helped to manage and market, as well as serve as executive producer, for one of Australia’s great rock and roll treasures, The Church, as well as American power-pop legends Tommy Keene and Dwight Twilley. Additionally, he is the Principal Investor and Marketing Advisor for Second Motion Records. He also serves on the Board of Directors for The Doug Flutie, Jr. Foundation for Autism and the Montshire Museum of Science. Professor Keller lives in Etna, NH with his wife, Punam (also a Tuck marketing professor), and his two daughters, Carolyn and Allison.

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