3_BrandBuilding

“ Brand Management”MK542EBrand Building and Business BuildingDr. Dildar HussainAssistant ProfessorESC Rennes School of BusinessOffice No. 327dildar.hussain@esc-rennes.frChapter OverviewOverviewRelationship between building a brand and buildinga businessBusiness management methods (strategies andphilosophies) in relation to brand buildingCorporate-based view of brandingLearning ObjectivesAble to examine business environmentsExamine different business management methodsDiscuss the components of successful business buildingIdentify the critical components of successful brand building2Business Success and BrandsBrands from small businesses to public servicesBrand = success in businessSuccess in business without brands?What is success?Depends on company's objectivesResources required to create and sustain brands3Building Brands –1Resources/requirements for building brandsFinancial resourcesPersonnel resourcesA clear differentiation or a USPQuality and an innovative productAdvertising and promotional resourcesDistribution networkLegal infrastructure4Building Brands –2What makes building brands difficult?Pressure to compete on priceProliferation of competitorsFragmenting markets or mediaComplex branding strategies and brand relationshipsThe temptation to change identityOrganizational bias against innovationPressure to invest elsewherePressure for short-term results5Classic Business Model -166Value propositionDescription of customer need, and the solution that addresses the needsMarket segmentThe group to target, different market segments have different needs, the firm’s position and activities in the value chain and how firm will capture part of the value that it creates in the chainValue chain structureFirm is seen as a chain of value-creating activitiesClassic Business Model –278Classic Business Model -38Classic Business Model –4Revenue creation and marginsHow revenue is generated (sales, leasing, subscription, support, etc. )The cost structure and target profit marginsPosition in value networkIdentification of competitors and complementary organizationsAny network effects that can be utilized to deliver more value to the customerCompetitive strategyHow the company attempts to develop a sustainable competitive advantageUse it to improve its competitive position in the market9Revenue ModelRevenueNot to be confused with profitsAlso called turnoverAccumulated over all goods and servicesAccounted for a period of time unlike balance sheetRevenue model lays out process by which a company actually makes money, by specifying how it is going to charge for services providedRevenue growth as the base of organizational and income growthEarnings may be negative, price/ sales can be used as alternative for price/earningModels/methods to reduce upfront investments, increase cash inflow, reduce investment risk have higher probably of success10Modern Business Model -1Old business model less likely to work due toSpeed required for decision makingComplex business environmentModern business modelsResource orientedVisionary growth strategiesWinning organization and peopleRelentless innovation11Modern Business Model -2Thinking fastAnticipating the futureSpotting trends before othersChallenging assumptionsCreating environment that encourages ideasMaking quick decisionsBeing flexibleNo bureaucratic structuresShuffling portfoliosMatching decision to the consequences12Get the production to the market fastRemoving in-built speed breakersAbandoning traditional visions and missionsGetting network partners operating on your timetable https:///watch?v=5Z0kT8P6XDESustaining speed:Maintaining velocity Persisting with growth Being ruthless with resources Institutionalizing innovation Staying close to customershttps:///watch?v=6_yswOLlKtwModern Business Model -213Basic rules in business management can be applied to build and manage brands, these includeValue propositions Market segmentPosition in the value network Competitive strategyCross functional teamsBrand management guided by principals of business successProactive LeadingInnovative and venturingApplying Business Management Models to Building Brands14Brand Building Based on Sound Business StrategyA brand can not be built without sound businessBuilding brands through higher revenues andprofitsClear business strategy and rigorousimplementation of 5PsMore value added (MVA)Company must provide more than customer’s expectationsEither in concrete or abstract terms15Innovation and BrandingInnovationMore than “new product”Reinventing business processBuilding entirely new markets to meetuntapped customer needsSelecting and executing the right ideasUnderstanding value of the target marketNot all clients are alikeDifferent brands co-exist in the same sector and address the values ofdifferent segmentsThat’s why companies maintain portfolios of brands (sometimes competing each other) Apple example16Innovation –BCG Survey 201217 Innovation –BCG Survey 201318Innovation –BCG Survey 201019 Case Study20End of Topic QuestionsDo leading brands make the best products?In which sector do you think brands are most important?https:///watch?v=sQLlPC_alT821 "Well-managed brands live on -only bad brand managers die."George Bulldildar.hussain@esc-rennes.fr22。