“New exciting ideas and perspectives on brand building are offered that have been absent from our literature.”
Philip Kotler, S C Johnson & Sons Distinguished Professor of International Marketing, Northwestern University,
Kellogg School of Management, USA
“Kapferer continues to be on the leading edge.”
Earl N Powell, President, Design Management Institute, Boston, USA
“Managing a brand without reading this book is like driving a car without your license.”
Haesun Lee, Senior Vice President of Marketing,AMOREPACIFIC Co, Korea
“The best book on brands!”
Design Magazine
“One of the definitive resources on branding for marketing professionals worldwide.”
The Economic Times, India
“One of the best books on brand management. Kapferer is thought-provoking and always able to create new insights on
various brand-related topics.”
Rik Riezebos, CEO Brand Capital and director of the European Institute for Brand Management
Adopted by leading international business schools, MBA programmes and marketing practitioners alike, The New Strategic
Brand Management is simply the reference source for senior strategists, positioning professionals and postgraduate
students. Over the years it has not only established a reputation as one of the leading works on brand strategy but has
also become synonymous with the topic itself.
This new edition builds on its impressive reputation and keeps the book at the forefront of strategic brand thinking.
Revealing and explaining the latest models used by companies worldwide, author Jean-Noël Kapferer covers all the
leading issues faced by brand strategists today, supported by an array of international case studies. With both gravitas
and intelligent insight, this book reveals new thinking on crucial topics including:
Moving beyond marketing, The New Strategic Brand Management addresses the bigger picture, integrating other
components such as business models, HR and finance into brand building. It analyses the specifics of brands in B2B,
services, distribution, the internet and the luxury sector. It extends the brand concept to celebrities, universities, towns
and nations.
Jean-Noël Kapferer is one of the very few worldwide experts on brands. His book stands out from
others with its unique insights, its style of exhaustive analysis and its original perspectives, stemming from
his strategic vision, and his international background and experience. A professor of marketing strategy at
HEC Paris, he holds a PhD from Northwestern University (USA) and is an active consultant to many
European, US and Asian corporations. He also gives executive seminars in the US, China, Japan, Korea and

Philip Kotler
J N KAPFERER
KAPFERER
THE NEW STRATEGIC
BRAND MANAGEMENT
4TH EDITION
4TH
EDITION
ISBN: 978-0-7494-5085-4
new_strategic_brand_aw:Layout 1 6/12/07 16:25 Page 1
I
STRATEGIC
BRAND
MANAGEMENT
THE NEW
ii
‘After reading Kapferer’s book, you’ll never again think of a brand as just a name. Several exciting
new ideas and perspectives on brand building are offered that have been absent from our literature.’
Philip Kotler, Northwestern University
‘A real thought provoker for marketing and business people. Strategic Brand Management is an
essential tool to develop strong marketing strategy.’
P Desaulles, Vice President, Du Pont de Nemours Europe
‘A solid contribution written with depth and insight. I recommend it to all those who desire a
further understanding of the various dimensions of brand management.’
David A Aaker, University of California at Berkeley, and author of Managing Brand Equity
‘The best book on brands yet. It is an invaluable reference for designers, marketing and brand
managers.’
Design Magazine
‘‘One of the best books on brand management. Kapferer is thought provoking and always able to
create new insights on various brand related topics.’

sioned to any person acting, or refraining from action, as a result of the material in this
publication can be accepted by the editor, the publisher or any of the authors.
First published in France in hardback in 1992 and in paperback in 1995 by Les Editions d’Organisation
Second edition published in Great Britain in 1997 by Kogan Page Limited
Third edition 2004
Reprinted 2005, 2007
Fourth edition 2008
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as
permitted under the Copyright, Designs and Patents Act 1988, this publication may only be
reproduced, stored or transmitted, in any form or by any means, with the prior permission in
writing of the publishers, or in the case of reprographic reproduction in accordance with the
terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms
should be sent to the publishers at the undermentioned addresses:
120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA 19147
United Kingdom USA
www.kogan-page.co.uk
© Les Editions d’Organisation, 1992, 1995, 1997, 2004, 2007, 2008
The right of Jean-Noel Kapferer to be identified as the author of this work has been asserted by
him in accordance with the Copyright, Designs and Patents Act 1988.
ISBN 978 0 7494 5085 4
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Kapferer, Jean-Noël.
New strategic brand management : creating and sustaining brand equity long term / Jean-
Noël Kapferer. – 4th ed.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-7494-5085-4 (alk. paper) 1. Brand name products–Management. I. Title.

V
4. From private labels to store brands 65
Evolution of the distributor’s brand 66; Are they brands like the others? 69;
Why have distributors’ brands? 74; The financial equation of the distributor’s brand 75;
The three stages of the distributor’s brand 77; The case of Decathlon 79;
Factors in the success of distributors’ brands 82; Optimising the DOB marketing mix 84;
The real brand issue for distributors 85; Competing against distributors’ brands 87;
Facing the low-cost revolution 90; Should manufacturers produce goods for DOBs? 93
5. Brand diversity: the types of brands 95
Luxury, brand and griffe 95; Service brands 103; Brand and nature: fresh produce 106;
Pharmaceutical brands 108; The business-to-business brand 113; The internet brand 119;
Country brands 123; Thinking of towns as brands 125;
Universities and business schools are brands 128; Thinking of celebrities as brands 131;
Thinking of television programmes as brands 132
Part Two: The challenges of modern markets 135
6. The new rules of brand management 137
The limits of a certain type of marketing 139; About brand equity 141;
The new brand realities 144; We have entered the B to B to C phase 152;
Brand or business model power? 153; Building the brand in reverse? 154;
The power of passions 155; Beginning with the strong 360° experience 156;
Beginning with the shop 158; The company must be more human, more open 158;
Experimenting for more efficiency 159; The enlarged scope of brand management 160;
Licensing: a strategic lever 164; How co-branding grows the business 166
7. Brand identity and positioning 171
Brand identity: a necessary concept 171; Identity and positioning 175;
Why brands need identity and positioning 178; The six facets of brand identity 182;
Sources of identity: brand DNA 188; Brand essence 197
Part Three: Creating and sustaining brand equity 201
8. Launching the brand 203
Launching a brand and launching a product are not the same 203;

Building the brand through systematic extensions: Nivea 306;
Extending the brand to internationalise it 309; Identifying potential extensions 310;
The economics of brand extension 312; What research tells us about brand
extensions 316; What did the research reveal? 324;
How extensions impact the brand: a typology 324; Avoiding the risk of dilution 326;
Balancing identity and adaptation to the extension market segments 330;
Assessing what should not change: the brand kernel 332;
Preparing the brand for remote extensions 333; Keys to successful brand extensions 336;
Is the market really attractive? 340; An extension-based business model: Virgin 342;
How execution kills a good idea: easyCar 345
13. Brand architecture 347
The key questions of brand architecture 347; Type and role of brands 349;
The main types of brand architecture 356;
Choosing the appropriate branding strategy 372; New trends in branding strategies 376;
Internationalising the architecture of the brand 379; Some classic dysfunctions 379;
What name for new products? 381; Group and corporate brands 385;
Corporate brands and product brands 388
14. Multi-brand portfolios 391
Inherited complex portfolios 392; From single to multiple brands: Michelin 393;
The benefits of multiple entries 395; Linking the portfolio to segmentation 396;
Global portfolio strategy 401; The case of industrial brand portfolios 402;
Linking the brand portfolio to the corporate strategy 405;
Key rules to manage a multi-brand portfolio 406;
The growing role of design in portfolio management 409;
Does the corporate organisation match the brand portfolio? 410;
Auditing the portfolio strategically 411; A local and global portfolio – Nestlé 413
CONTENTS vii
15. Handling name changes and brand transfers 415
Brand transfers are more than a name change 415; Reasons for brand transfers 416;
The challenge of brand transfers 418; When one should not switch 419;

1.2 The levers of brand profitability 25
1.3 Branding and sales 26
2.1 The brand system 34
2.2 The cycle of brand management 36
2.3 The product and the brand 41
2.4 Product line overlap among brands 42
2.5 Brands give innovations meaning and purpose 43
3.1 The two models of brand building through time 56
4.1 Relative positioning of the different distributors’ brands 68
5.1 The pyramid brand and business model in the luxury market 98
5.2 The constellation model of luxury brands 100
5.3 History-based and story-based approaches to luxury 101
5.4 How brands impact on medical prescription 112
6.1 Limits of traditional marketing 140
6.2 From brand values to brand value 143
6.3 Brand equity 144
6.4 The extension of brand management 162
7.1 Identity and image 174
7.2 Positioning a brand 176
7.3 The McDonald’s positioning ladder 180
7.4 Brand identity prism 183
7.5 Sample brand identity prisms 188
7.6 Example of brand platform: Jack Daniel’s 199
8.1 Transfer of company identity to brand identity when company and brand
names coincide 206
8.2 From brand platform to activation 210
IX
8.3 Consumer empowerment 217
9.1 Increasing volume per capita 221
9.2 Segmenting by situation 222

13.2 The six brand architecture strategies 354
13.3 The product-brand strategy 356
13.4 Range brand formation 360
13.5 Range brand structured in lines 362
13.6 Endorsing brand strategy 363
13.7 Umbrella brand strategy 364
13.8 Source brand or parent brand strategy 367
13.9 A case of brand proliferation or dilution of identity 371
13.10 3M branding options review 376
13.11 Which brand architecture is suitable for brand innovation? 382
13.12 Corporate and product branding at ICI 390
14.1 Segmenting the brand portfolio by price spectrum 400
15.1 When rebranding fails: from Fairy to Dawn (P&G) 421
x FIGURES
15.2 A stepwise approach to brand transfers (relating the type of transfer to the
image gap) 431
16.1 Analysing the potential of an old brand 446
16.2 Sustaining brand equity long term : dual management in practice 451
17.1 Managing the globalisation process between headquarters and subsidiaries 498
18.1 What is ‘brand equity’? 504
18.2 The issue of fair valuation of brands 505
18.3 Positioning brand valuation methods 513
18.4 A multi-step approach to brand valuation 518
18.5 The Interbrand S-curve – relation between brand strength and multiple 521
18.6 Stepped graph showing relationship between brand strength and multiple 524
FIGURES xi
Tables
1.1 From awareness to financial value 14
1.2 Result of a brand tracking study 17
1.3 Brand financial valuation, August 2006 19

12.3 Success rate of two alternative branding policies 318
12.4 Extension strategic evaluation grid 341
13.1 ‘House of brands’ or ‘branded house’ 353
13.2 Shared roles of the corporate and product brand 389
16.1 How brand equity decays over time 439
17.1 From global to local: eight alternative patterns of globalisation 459
17.2 Globalisation matrix 461
17.3 How Absolut copes with the grey market: corridor pricing 466
17.4 How global and local brands differ 468
17.5 What differences between countries would compel you to adapt the
marketing mix of the brand? 472
17.6 Which facets of the brand mix are most often globalised? 473
17.7 Barilla’s international and domestic range 489
17.8 How to make local brands converge 499
18.1 A method of valuing brand strength 520
18.2 Another estimate of the financial value of brands (2007) 524
18.3 Assessing brand strength: strategic diagnosis 527
TABLES xiii
xiv
Preface to the fourth edition
Integrating brand and business
This is a book on strategic brand management. It capitalises on the success of the former three
editions. As far as we understand from our readers worldwide (marketers, advertisers, lawyers, MBA
students and so on), this success was based on six attributes which we have of course maintained:
l
Originality. Strategic Brand Management is quite different from all the other books on brand
management. This is due to its comprehensiveness and its unique balance between theory
and cases. It also promotes strong and unique working models.
l
Relevance. The cases and illustrations are new, unusual, and not over-exposed. They often

often hold a dominant market share, they need their own chapter. In addition, in each
chapter we have addressed in depth how the recommendations do or do not apply to distrib-
utors’ brands.
l
Significantly, this edition develops its new section on innovation. Curiously, the topic of
brands and innovation is almost totally absent from most books on branding. This seems at
odds with the fact that innovation and branding has become the number one topic for
companies. In fact, as we shall demonstrate, brands grow out of innovation, and innovation is
the lifeblood of the brand. Furthermore, contrary to what is often said or thought, the issue of
innovation is not merely about creativity. It is about reinventing the brand.
l
This new edition is also sensitive to the fact that many modern markets are saturated. How
can brands grow in such competitive environments? A full chapter on growth is included,
starting with growth from the brand’s existing customers.
l
The issue of corporate brands and their increasing importance is also tackled, as is their rela-
tionship with classic brand management.
l
We also stress much more than previously the implementation side: how to build interesting
brand platforms that are able to stimulate powerful creative advertising that both sells and
builds a salient brand; how to activate the brand; how to energise it at contact points; and how
to create more bonding. We provide new models to help managers.
This book also reflects the evolution of the author’s thought. Our perspective on brands has
changed. We feel that the whole domain of branding is becoming a separate area, perhaps with a
risk of being self-centered and narcissistic. Too often the history of a company’s success or even
failure is seen through the single perspective of the brand, without taking into account all the
conditions of this success or failure. A brand is a tool for growing the business profitably. It has
been created for that purpose, but business cannot be reduced to brands. The interrelationship
between the business strategy and the brand strategy needs to be highlighted, because this is the
way companies operate. As a consequence, we move away from the classic partitioning of brand

or bargain loyalty, even though as a first step it is useful to create behavioural barriers to exit.
Finally, A Ehrenberg (1972) has shown through 40 years of panel data analysis that product
penetration is correlated with purchase frequency. In other words, big brands have both a high
penetration rate and a high purchase frequency per buyer. Growth will necessarily take these two
routes, and not only be triggered by customer loyalty.
1
Introduction:
Building the brand when the
clients are empowered
2 THE NEW STRATEGIC BRAND MANAGEMENT
In our materialistic societies, people want to give meaning to their consumption. Only brands
that add value to the product and tell a story about its buyers, or situate their consumption in a
ladder of immaterial values, can provide this meaning. Hence the cult of luxury brands.
Pro logo?
Today, every organisation wants to have a brand. Beyond the natural brand world of producers
and distributors of fast-moving consumer goods, whose brands are competing head to head,
branding has become a strategic issue in all sectors: high tech, low tech, commodities, utilities,
components, services, business-to-business (B2B), pharmaceutical laboratories, non-govern-
mental organisations (NGOs) and non-profit organisations all see a use for branding.
Amazingly, all types of organisations or even persons now want to be managed like brands:
David Beckham, the English soccer star, is an example. Los Angeles Galaxy paid US$250 million
to acquire this soccer hero. It expects to recoup this sum through the profits from licensed
products using the name, face or signature of David Beckham, which are sold throughout the
world. Everything David Beckham does is aimed at reinforcing his image and identity, and thus
making sales and profits for the ‘Beckham brand’.
Recently, the mayor of Paris decided to define the city as a destination brand and to manage
this brand for profit. Many other towns had already done this. Countries also think of them-
selves in brand terms (Kotler et al, 2002). They are right to do so. Whether they want it or not,
they act de facto as a brand, a summary of unique values and benefits. India had a choice
between allowing uncontrolled news and information to act (perhaps negatively) on world

Companies do not build brands to have authors write books on them, or to make the streets
livelier thanks to billboard advertising. They do it to grow the business still more profitably. One
does not make money by selling products, but brands: that is to say a unique set of values, both
tangible and intangible. Even low-cost operators need to compete on trust.
Our feeling is that, little by little, branding has been constructed as a separate field. There is a
risk however of the branding community falling in love with its own image: looking at the
considerable number of books published on brands, and at the list of most recent brand equity
values, one could think that brands are the one and only issue of importance. Indeed branding
professionals may become infatuated and forget the sources of brand equity: production, serv-
icing, staffing, distributing, innovating, pricing and advertising, all of which help to create value
associations and effects which become embedded in clients’ long-term memory.
Looking at one of the stars of this hit parade, Dell, whose brand is valued so highly, one
question arises: is Dell’s success due to its brand or to its business model? It could be argued that
it was not the Dell brand but Dell activities in a broader sense that allowed the company to
announce more price cuts in 2006, putting Hewlett-Packard in a difficult position between two
‘boa constrictors’, Dell and IBM.
The brand is not all: it captures the fame but it is made possible by the business model. It is
time to recreate a balance in accounting for success and failures. It is the end of fairy tales; let’s
introduce the time of fair accounts.
Throughout this new edition of Strategic Brand Management, we relate the brand to the
business, for both are intimately intertwined. We regularly demonstrate how branding decisions
are determined by the business model and cannot be understood without this perspective. In fact
in a growing number of advanced companies, top managers’ salaries are based on three critical
criteria: sales, profitability and brand equity. They are determined in part by how fast these
managers are building the strategic competitive asset called a brand. The goal of strategy is to
build a sustainable advantage over competition, and brands are one of the very few ways of
achieving this. The business model is another. This is why tracking brands, product or corporate,
is so important.
Looking at brands as strategic assets
The 1980s marked a turning point in the conception of brands. Management came to realise that

knowing how to brew beer; it is that people all over the world want to drink Heineken. The same
logic applies for IBM, Sony, McDonald’s, Barclays Bank or Dior.
By paying very high prices for companies with brands, buyers are actually purchasing posi-
tions in the minds of potential consumers. Brand awareness, image, trust and reputation, all
painstakingly built up over the years, are the best guarantee of future earnings, thus justifying
the prices paid. The value of a brand lies in its capacity to generate such cashflows.
Hardly had this management revolution been born than conflicting arguments arose regarding
the reality and the durability of brand equity. With the systematic rise in distributors’ own brands
it was argued that the capacity of brands had been exaggerated. The fall in the price of Marlboro
cigarettes in the USA in April 1993 created panic on Wall Street, with the share prices of all
consumer goods firms falling. This mini-Pearl Harbor proved healthy. At the height of recession
we realised that it was not the brand – registered trademark – as such that created value, but all the
marketing and communication done by the firm. Consumers don’t just buy the brand name, they
buy branded products that promise tangible and intangible benefits created by the efforts of the
company. Given time, the brand may evoke a number of associations, qualities and differences,
but these alone do not comprise the whole offer. A map alone is not the underlying territory.
In the 1990s, because of recession and saturated markets, the emphasis shifted from brands to
customer equity. New techniques, based on one-to-one targeting, replaced the emphasis on
classic media advertising. They could prove their effectiveness and targeted heavy buyers.
Just as some have exaggerated the overwhelming power of brands, so the opposition to brands
has been short-lived. The value of brands comes from their ability continuously to add value and
4 THE NEW STRATEGIC BRAND MANAGEMENT
deliver profits through corporate focus and cohesiveness. Another question is, who is best placed
to make use of brands? Is it the producer or the distributor?
You must be very wary as regards ideological preferences; for example, there are very few
manufacturers’ brands on the furniture market other than those of Italian designers, yet
everybody talks about Habitat or Ikea, two distributors. They are seen as agents offering strong
value-added style in the first case and competitive prices and youth appeal in the second.
With manufacturers integrating their distribution, and distributors thinking of themselves as
brands, the world of brands is moving permanently, looking for new brand and business models,