Page 286 - Marketing Management

CREATING BRAND EQUITY | CHAPTER 9 263

• W. With a brand personality defined as flirty, for the insider, and an escape, W offers guests unique
experiences around the warmth of cool.
• Westin. Westin’s emphasis on “personal, instinctive, and renewal” has led to a new sensory
welcome featuring a white tea scent, signature music and lighting, and refreshing towels. Each
room features Westin’s own “Heavenly Beds,” sold exclusively in the retail market through
Nordstrom, further enhancing the brand’s upscale image.

The hallmark of an optimal brand portfolio is the ability of each brand in it to maximize equity
in combination with all the other brands in it. Marketers generally need to trade off market cover-
age with costs and profitability. If they can increase profits by dropping brands, a portfolio is too
big; if they can increase profits by adding brands, it’s not big enough. The basic principle in design-
ing a brand portfolio is to maximize market coverage so no potential customers are being ignored,
but minimize brand overlap so brands are not competing for customer approval. Each brand
should be clearly differentiated and appealing to a sizable enough marketing segment to justify its
marketing and production costs. 73
Marketers carefully monitor brand portfolios over time to identify weak brands and kill unprof-
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itable ones. Brand lines with poorly differentiated brands are likely to be characterized by much
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cannibalization and require pruning. There are scores of cereals, beverages, and snacks and thou-
sands of mutual funds. Students can choose among hundreds of business schools. For the seller,
this spells hypercompetition. For the buyer, it may mean too much choice.
Brands can also play a number of specific roles as part of a portfolio.

FLANKERS Flanker or “fighter” brands are positioned with respect to competitors’ brands so
that more important (and more profitable) flagship brands can retain their desired positioning.
Busch Bavarian is priced and marketed to protect Anheuser-Busch’s premium Budweiser; and after
a difficult product launch, Celeron helped thwart AMD’s competitive challenge to Intel’s premium
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Pentium microprocessor. Marketers walk a fine line in designing fighter brands, which must be
neither so attractive that they take sales away from their higher-priced comparison brands nor
designed so cheaply that they reflect poorly on them.

CASH COWS Some brands may be kept around despite dwindling sales because they manage
to maintain their profitability with virtually no marketing support. Companies can effectively
“milk” these “cash cow” brands by capitalizing on their reservoir of brand equity. Gillette still sells
the older Trac II, Atra, Sensor, and Mach III brands because withdrawing them may not necessarily
move customers to another Gillette brand.

LOW-END ENTRY LEVEL The role of a relatively low-priced brand in the portfolio often may
be to attract customers to the brand franchise. Retailers like to feature these “traffic builders”
because they are able to “trade up” customers to a higher-priced brand. BMW introduced certain
models in its 3 Series automobiles in part as a means of bringing new customers into the brand
franchise, with the hope of later moving them to higher-priced models when they decided to trade
in their cars.

HIGH-END PRESTIGE The role of a relatively high-priced brand often is to add prestige and
credibility to the entire portfolio. One analyst argued that the real value to Chevrolet of its high-
performance Corvette sports car was “its ability to lure curious customers into showrooms and at
the same time help improve the image of other Chevrolet cars. It does not mean a hell of a lot for
GM profitability, but there is no question that it is a traffic builder.” 77 Corvette’s technological
image and prestige cast a halo over the entire Chevrolet line.

Brand Extensions
Many firms have decided to leverage their most valuable asset by introducing a host of new prod-
ucts under their strongest brand names. Most new products are in fact line extensions—typically
80 percent to 90 percent in any one year. Moreover, many of the most successful new products, as
rated by various sources, are extensions. Among the most successful new product brand extensions
in supermarkets in 2008 were Dunkin’ Donuts coffee, Progresso Light soups, and Hormel