MKT624 Handouts Set 2 by VUBuddy

Lesson 1 UNDERSTANDING BRANDS – INTRODUCTION

Brand management as one of the marketing functions has been around for as long as we have known professional marketing. But, it has been a part of the traditional marketing approach in which many functions of today’s brand management were performed in a spread out fashion by the marketing manager and a combination of his team members like the sales manager, the advertising and communications manager, and the marketing administration manager to name a few. The terminology of brand management was not used. Brand management, in its present integrated form, has come into limelight and focus over the last 20 years. The functional execution has undergone transformation in terms of its description as a substantive job under one head. This implies that the overall functions of brand management are full of substance and therefore are described specifically under the head - brand management and not as disparate parts of the overall marketing functions. In other words, brand management has not lost its primary roots that are well-entrenched in marketing; it only has acquired explicitly defined dimensions within which the function operates. To further elucidate the point, there have been functional adjustments within the overall marketing functions only to bring into clear and sharp focus the specific functions and job of brand management. Brand management now presents itself as a distinct part of an integrated marketing approach in which it connects with all the touch points within and outside of the marketing department. The whole concept can be exemplified by seeking your attention toward two fruit baskets; one full of mixed fruits and the other having compartments carrying different fruits of each type in each compartment. Each type comes into a sharper focus! So do the touch points. This course is going to give you a clear understanding of what a brand is, why and how it is managed, and what are the dynamics involved in managing brands in the present day competitive market.

What is a Brand and Brand Management?

We all know from our study of the basic marketing course and also as consumers that a brand is “a name, term, sign, symbol, design, or a combination of them intended to differentiate one product from those of the competitors”. Perhaps, the most distinctive professional skills of marketing persons are their abilities to create, maintain, and protect a brand in a hostile market. These abilities call for a collective input on part of all within the marketing department and other departments. Brand creation, therefore, is the end product of a team of professionals and not just one person. It is a team effort. If the art of conceptualizing the brand rests with marketing, then the actual creation of it is the cornerstone of the overall company team.

How Brand Management Came into Being?

We also know that brands have been around for as long as we can look back into the modern business management. However, we need to have a distinct understanding of how brand management came into being in its present form. Over the decades as businesses and competition grew, in case of multinational corporations in particular, the growth of brands exploded. With economic growth and the technological advances of the later half of the 20th century in particular, various industries ranging from the areas of foods to pharmaceuticals to textiles to cars to electronics and many other registered impressive growth. Growth of industries attracted more players, who along with the existing ones felt the need to make their presence felt by way of differentiating their products from each other. Hence, the drive toward brand management got progressive impetus. The more competitive the markets became, the more they tried to get into the areas of distinction and differentiation and created conditions worthy of sophisticated management techniques. Hence, the emphasis on brand management became increasingly evident. The stronger the brands emerged, the higher the value they created for the company and led businesses into diversified areas, and hence, brand management became ever more obvious and sophisticated. Growth, however, is not something that takes place overnight. A tremendous effort in terms of time and money is required. Despite the effort, results do not stand guaranteed. To cope with that possibility, companies tried to acquire brands from each other instead of creating their own. The practice is still on. Also, growth took place not only within the same category, but also across categories. Growth across categories owed to strength of brands. This implies that a strong brand with high loyalty offers its company the temptation to get into another category (for example, from milk to juices) with higher chances of success. Whether it was only one product category or diversified product categories, the amount of activities dictated that all product categories be managed separately. Various areas or markets in which different corporations were dealing (for example, a company could be producing or trading products ranging from detergents to foods to personal care) made it imperative for those corporations to bring every single category in the first place and brand/s in the second under acute scrutiny for better management. It became clear to corporations that to bring the marketing effort relating different brands into a sharp focus, they needed to have different people (brand managers) looking after different brands. Empirical evidence has it that professionals working across product categories tend to lose focus, make less-than-highly qualitative decisions, and in the end hurt the products and brands, making the whole process either less profitable or even a loss-bearing-proposition. Conversely, especially designated managers, who have the sole responsibility of managing their designated brands, can concentrate on developing a cost-effective marketing-mix for the brands they are responsible for. The attached figures 1 and 2 illustrate the evolution of the layer of product and brand management, with the passage of time. First, the product(s) was brought into focus and put under the charge of a product manager. As an example, one product manager dealt with all the brands of biscuits. Competitive pressures demanded more sophistication and gradually paved the way for management of each brand by a separate manager. Each manager took the role of a brand manager. This is how brand management took shape. And, this is the way it drives brands of today. The figures clarify that product and brand management is practical when a company is dealing in more than one product category or more than one brand within one category. It is also obvious that product and brand management does not replace the traditional functional structure. It merely adds more layers to the organization for the purpose of improving functionality. Brand management, therefore, is a function of the marketing effort and not a substitute to it. Refer to figure 3.

Marketing Manager · Marketing · Communications · Manager · Sales Manager · Marketing · Administration · Manager · Traditional Functional · Structure · Marketing Manager · Marketing · Communications · Manager · Sales Manager · Marketing · Administration · Manager · Product Manager · Product B · Personal Care · Product Manager · Product A · Detergents · Brand Manager · Brand A · Brand Manager · Brand A · Brand Manager · Brand B · Brand Manager Brand B · Sales Manager · Functional Structure · With Product and Brand

Figure 1

Figure 2