9/24/2018

“ Brand Management”
MK542E

Brands as Strategic Assets

Dr. Dildar Hussain

Associate Professor
Rennes School of Business

Office No. 327

[email protected]

Chapter Overview
 Overview

 Strategic importance of brands

 Brands as value assets when buying or selling businesses

 Brands in SMEs

 Learning Objectives

 Have an overview of literature

 Understand corporate-based view of branding

 Discuss role of senior management / CEO as brand custodians

 Discuss brand development in SMES

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Brands as Strategic Assets: A Review of the Literature – 2

 Brands express the company’s core values

 Thus it becomes corporate brand

 Powerful resource for creating shareholder and

long term value

 Companies should shift from brand strategy to

brand-based strategy

 Branding develops a strong bond between the company

and customers which may lead to

 Change to completely different products

 For instance consumers need banking services not banks

 Retailers in the financial services market

Brands as Strategic Assets: An Industry Perspective – 1

 Branding is no longer being a sole responsibility of

marketers

“Brands are the core of our business. We would, if we so

wished sub-contract all the production, sales and service functions and,
provided we retained ownership of our brands, we would continue to be successful and
profitable. It is our brands that provide the profits for today and guarantee the profits
for the future” (Sir Allen Sheppard, CEO of Grand Metropolitan)

 Traditionally, brand played important role in FMCGs

 Difficult to differentiate through product development and

innovation

 Imitable products

 Tough competition

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Brands as Strategic Assets: An Industry Perspective – 2

 Brand management becomes even more important
board room issue in case of when badly publicized

 Single incident can damage brand significantly and

it may take time to recover

 Martha Stewart – insider trading

 Enron – falsification of financial information (90-1)

 Enron’s accountant s Anderson Arthur also went bankrupt

 Nike - sweatshops in Asia

 Coca Cola - contaminated Coke in Belgium

 VW – CO2 emission scandal

 Chrysler – Australia

https://www.youtube.com/watch?v=yVM3QX2GPjQ 4_1_Jeep.mp4

 Reputation risk is the single biggest business hazard according to a survey in the USA
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Brands as Strategic Assets: An Industry Perspective – 6

 Some industries have been slow to adopt branding/brand management than others

 Branding often becomes critical when competitors come in the picture

 Early adopters

 FMCGs

 Luxury ???

 Late adopters

 Non-profit organizations

 High-tech industry

 professional services

 Public services

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Brands as Strategic Assets: An Industry Perspective – 7

 Branding is more critical for services than goods

 Intangibility

 Inseparability

 Perishability

 Variability

 Branding in financial services

 Difficult to differentiate

 Catering specialized needs of customers

Brands as Strategic Assets: Small vs Large Company Perspectives

 SMEs branding is a new field in branding research

 Still at exploratory stage

 SMEs’ business behavior differs from LSEs

 SMEs are characterized by

 Resource limitations

 Strong influence of owner on decision making

 SMEs often craft their marketing strategies through networks

 Firm values are communicated through business and social interactions, which are part of
SMEs’ daily routines

 In contrast to LSEs, branding and brand management is not much institutionalized

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Benefits of and Barriers to Brand Development in SMEs

 Benefits

 Product differentiation

 Customers loyalty, better performance

 Enhancing value to customers

 Survive for a longer period of time

 Barriers

 Limited resources to conduct branding activities

 Lack of vision/ strategic orientation

 Informal decision process

 Investments seen as costs

SMEs’ Approach to Decision-Making, Marketing and Branding

 Decision making

 Flexibility

 Speed of reaction

 Eye for market opportunities

 Marketing and Branding

 Position in networks

 Direct communication with clients, suppliers and various stakeholders to build trust and swap
favors

 Creating passion for brand throughout the company is important and has to be done by the
entrepreneur him/herself

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Brand Development in SMEs - 1

 Communicating a brand is not difficult for SMEs

 Establishing a clear positioning is difficult

 Four types of or phases in SME brand development

 Beginning and underlying brands

 Brands/ companies just established

 Awareness of branding in management needs to grow

 Companies failing to do so or lacking resources to implement plans may stay at the same
position

 Emerging brands

 Everyone in the organization is aware of need for branding

 The firm makes resources available for creating a strong brand (although it may be difficult)
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Brand Development in SMEs - 2

 Established brands

 The owner and the organization are determined

to build up a strong brand

 They are able to achieve this objective

 A high degree of brand awareness has been attained

 They can maintain and enhance their position

 Historical brands

 The brands that have achieved a reasonable of recognition despite of little organizational
dedication

 Mostly they are exceptions owing to the events in the past

 Generally middle-sized companies having paid little attention to branding but having built
enormous brand strength due to a striking product or historical background

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Brand Development in SMEs – 3

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Brand Management and Country-of-Origin (COO) Effects

 Given limited knowledge and know-how in branding

SMEs would benefit from COO

 SMEs can use the COO effect to support their brand

building efforts

 This could provide a multiplier effect especially in

foreign markets

 Imports from developed countries are generally

seen as better off in terms of design, technology,
skills, and product quality

 Consumer animosity???

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Internal Branding

 Brands are about products and services

 People behind those products and services are

an important element

 Employees bring brand to life; they are its

ultimate custodians

 Communicating brands values to staff is

equally important

 Leadership by example is one of best forms

 HR policies should reflect the brand value

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Case Study

BRANDING NOT-FOR PROFITS

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http://www.youtube.com/watch?v=JtiHOeOqVqQ

4_2_SmallBusiness.mp4

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[email protected]

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