11 New Strategic Brand Management by Philip Kotler   4th Edition
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11 New Strategic Brand Management by Philip Kotler 4th Edition


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advantage) it
is important to incorporate from the start
the higher levels of meaning that are
intended to attach to the brand in the longer
term. The brand should not simply acquire
them, by accumulation or sedimentation;
they should be planned from the start and
incorporated at birth. Incorporating this
perspective from the start accelerates the
process by which products become brands.
This is why product launch and brand
launch are not the same.
This is also why brand names should never
be descriptive of the product. The first reason
is that what is descriptive soon becomes
generic, when competitors come into the
market with the same product. Second, clients
will soon learn what the business is about.
Names should better aim at telling an intan-
gible story. Amazon speaks of newness, force
and abundance (like the River Amazon), and
Orange says \u2018definitely non-technical\u2019, just as
Apple Computers did 25 years earlier.
56 WHY IS BRANDING SO STRATEGIC?
Figure 3.1 The two models of brand building through time
Intangible added values
Values, mission
Personality
Benefits
Attributes
Ingredients
Tangible added values
Time
Finally, as is illustrated by the two dotted
arrows of the graph, brand management
consists of a permanent coming and going
between tangible and intangible values.
Brands are two-legged value producing
systems. This means that having an excellent
product is not enough in modern compe-
tition. (See for instance the Toshiba case, page
47). However, neither luxury nor image
brands can afford to forget the functional real-
ities of products.
Are leading brands the best
products or the best value?
To create a brand is much more than simply
marking a product or service, the necessary
first step of brand differentiation. It is about
owning a value.
It is often held to be a paradox that the
number one brands are not the best products.
Was the original IBM PC the best PC available
at the time? No. Is Pentium the best chip?
Who knows? Are Dell computers the best
computers?
The paradox stems from the word \u2018best\u2019: best
for whom, and at what? Let\u2019s take the analogy
of a school class. Academic gradings are deter-
mined according to well-understood criteria:
students who do well display qualities such as
excellent memory, the ability to solve
problems fast, to work accurately and to
present their work well. These are the values of
the schoolroom; and similarly, each market
has values. To become number one in any
market it is necessary to understand what the
market values are. Of course, one cannot
succeed without a good product or service.
Those who try the product must like it enough
to make repeat purchases, to refer others to it;
the product must build brand loyalty. In the
truck tyre market, Michelin is certainly the
number one: it holds 66 per cent of the
original tyre market (that is, the tyres the
manufacturer supplies with the truck). But in
the replacement market, the so-called \u2018after-
market\u2019, although Michelin is still the market
leader, its share falls to 29 per cent. It looks as if
Michelin is not as well oriented to the values of
the buyers in this aftermarket, fleet owners
and those who maintain their trucks.
In the spirits market, Bacardi is world
number one; is it the best spirit? One could
certainly argue that it is nothing of the kind: it
has no taste, and in all blind testings it fares
very poorly. So why does it sell in such
volume? The source of its business is not
experts deliberating over its taste, but casual
drinkers and partygoers. They generally want
a spirit that will blend well in a cocktail, and
an ideal mixer should have a very neutral
taste. This is exactly what Carta Blanca
delivers; it provides 90 per cent of Bacardi\u2019s
sales.
Branding starts from the customer, and
asks, what does he or she value? Bacardi is
certainly not the \u2018better\u2019, but it could be called
the \u2018batter\u2019. One of its key intangible added
values is its personality, epitomised by its
symbol: a bat. The first Bacardi factory in
Cuba was full of bats. This became the brand\u2019s
symbol, adding an enduring halo of mystery
to it.
Another example can be found in the
educational market. The Master\u2019s degree in
Business Administration (MBA) is a passport
to success. It was first introduced in US
universities. To get their MBA, students at US
universities need two years of intense work:
one year to learn the fundamentals, and one
year to specialise in a major field.
Insead is now a respected brand in the MBA
market, and Europe\u2019s best-known MBA.
However its MBA course lasts less than a year.
This is the power of branding: a strong brand
awareness acts as a quality cue. Because it
created the MBA category in Europe, Insead
soon benefited from the pioneer advantage:
its name effectively became the local
standard, because of the lack of competition.
The French management school HEC created
its MBA in 1969, while Insead had started in
1957. HEC and some other late entrants made
BRAND AND BUS INESS BUILDING 57
another mistake: they delivered a genuine
American-type MBA. The HEC MBA, which
lasted two years, was arguably of too high
quality for European corporate recruiters, and
too long for European students.
Understanding the value curve
of the target
Insead became Europe\u2019s best-known MBA by
understanding the value curve of European
human resources directors who hire young
executives. In delivering an MBA based on the
US model, premium schools such as HEC
showed that they did not understand the
local value curve. In Europe, recruiters do not
really care how much time students have
spent on campus: the extra salary one gets
after having spent two years at Harvard,
Stanford or Northwestern instead of less than
a year at Insead is very small. One thing
recruiters do value, however, is an intensive
immersion in a truly international
programme, in which students learn to work
with 10 different nationalities. This mirrors
the working context for which they are being
hired. European companies tend to consider
that they will really teach their recruits how to
do business in-house, and that a fast
academic introduction lasting less than one
year will suffice. Finally, companies prefer to
rely on continuing education, providing a
regular stream of specialised company
seminars, throughout their managers\u2019
working lives.
Since not all clients are alike, different
brands can coexist in the same sector, because
they address the value curve of different
segments. This is why groups build brand
portfolios. GM has a portfolio of car marques,
as does the Volkswagen Group.
Breaking the rule and acting fast
The MBA example also illustrates another
issue: to build a brand one must quickly reach
the critical size to create barriers to entry (such
as top-of-mind awareness). By breaking the
two-year rule, Insead was able to produce
twice as many graduates as a US school of the
same size, and so to reach the critical size of
alumni who act as its referees within
companies in half the time. Recently it made a
strategic move by doubling the number of
graduates produced per year, thus accentu-
ating its market share and increasing its
productivity (the number of students per
professor). It also decided to capitalise on its
now well-known brand to open a branch in
Asia. 
Many lessons should be drawn from the
above examples:
l The first is that all brands start by being
non-brands, with zero awareness and
image. However, they were based on an
innovation that succeeded. Starting a
brand means finding a disrupting inno-
vation.
l Second, creating a market is the best way to
lead it. This is the well-known pioneer
advantage. However, to be able to create a
market, one must break free from the
conventions and codes that create herdism
in the marketplace.
l Third, time is an essential ingredient of
success.