10/7/2014

Brand Management
MK542E
Brand Building and Business Building

Dr. Dildar Hussain

Assistant Professor
ESC Rennes School of Business
Office No. 327
dildar.hussain@esc-rennes.fr

Chapter Overview
Overview
Relationship between building a brand and building
a business
Business management methods (strategies and
philosophies) in relation to brand building
Corporate-based view of branding

Learning Objectives
Able to examine business environments
Examine different business management methods
Discuss the components of successful business building
Identify the critical components of successful brand building

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Business Success and Brands

Brands from small businesses to public services

Brand = success in business
Success in business without brands?
What is success?
Depends on company's objectives
Resources required to create and sustain brands

Building Brands 1

Resources/requirements for building brands

Financial resources
Personnel resources
A clear differentiation or a USP
Quality and an innovative product
Advertising and promotional resources
Distribution network
Legal infrastructure

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Building Brands 2

What makes building brands difficult?

Pressure to compete on price
Proliferation of competitors
Fragmenting markets or media
Complex branding strategies and brand relationships
The temptation to change identity
Organizational bias against innovation
Pressure to invest elsewhere
Pressure for short-term results

Classic Business Model -1

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Classic Business Model 2

Value proposition
Description of customer need, and the solution that addresses
the needs

Market segment
The group to target, different market segments have different needs, the firms position and
activities in the value chain and how firm will capture part of the value that it creates in the
chain

Value chain structure

Firm is seen as a chain of value-creating activities

Classic Business Model -3

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Classic Business Model 4

Revenue creation and margins

How revenue is generated (sales, leasing, subscription, support, etc. )
The cost structure and target profit margins

Position in value network

Identification of competitors and complementary organizations
Any network effects that can be utilized to deliver more value to the customer

Competitive strategy
How the company attempts to develop a sustainable competitive advantage
Use it to improve its competitive position in the market

Revenue Model

Revenue
Not to be confused with profits
Also called turnover
Accumulated over all goods and services
Accounted for a period of time unlike balance sheet

Revenue model lays out process by which a company actually makes money, by
specifying how it is going to charge for services provided
Revenue growth as the base of organizational and income growth
Earnings may be negative, price/ sales can be used as alternative for price/earning
Models/methods to reduce upfront investments, increase cash inflow, reduce investment risk
have higher probably of success
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Modern Business Model - 1

Old business model less likely to work due to

Speed required for decision making
Complex business environment

Modern business models

Resource oriented
Visionary growth strategies
Winning organization and people
Relentless innovation

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Modern Business Model - 2

Thinking fast
Anticipating the future
Spotting trends before others
Challenging assumptions
Creating environment that encourages ideas

Making quick decisions

Being flexible
No bureaucratic structures
Shuffling portfolios
Matching decision to the consequences
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Modern Business Model - 2

Get the production to the market fast

Removing in-built speed breakers
Abandoning traditional visions and missions
Getting network partners operating on your timetable
https://www.youtube.com/watch?v=5Z0kT8P6XDE

Sustaining speed:
Maintaining velocity
Persisting with growth
Being ruthless with resources
Institutionalizing innovation
Staying close to customers
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https://www.youtube.com/watch?v=6_yswOLlKtw

Applying Business Management Models to Building Brands

Basic rules in business management can be applied to

build and manage brands, these include
Value propositions
Market segment
Position in the value network
Competitive strategy

Cross functional teams

Brand management guided by principals of business success
Proactive
Leading
Innovative and venturing
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Brand Building Based on Sound Business Strategy

A brand can not be built without sound business

Building brands through higher revenues and
profits
Clear business strategy and rigorous
implementation of 5Ps
More value added (MVA)
Company must provide more than customers expectations
Either in concrete or abstract terms

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Innovation and Branding

Innovation
More than new product
Reinventing business process
Building entirely new markets to meet
untapped customer needs
Selecting and executing the right ideas

Understanding value of the target market

Not all clients are alike
Different brands co-exist in the same sector and address the values of
different segments
Thats why companies maintain portfolios of brands (sometimes competing each other)

Apple example
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Innovation BCG Survey 2012

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Innovation BCG Survey 2013

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Innovation BCG Survey 2010

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Case Study

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End of Topic Questions

Do leading brands make the best products?

In which sector do you think brands are most important?

https://www.youtube.com/watch?v=sQLlPC_alT8

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"Well-managed brands live on - only bad brand managers die."

George Bull

dildar.hussain@esc-rennes.fr

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