Professional Documents
Culture Documents
Chapter No.1
1-What is Brand?
The annual list of the world’s most valuable brands, published by Interbrand and
Business Week, indicates that the market value of companies often consists
largely of brand equity. Research by McKinsey & Company, a global consulting
firm, in 2000 suggested that strong, well-leveraged brands produce higher
returns to shareholders than weaker, narrower brands. Taken together, this
means that brands seriously impact shareholder value, which ultimately makes
branding a CEO responsibility
Companies sometimes want to reduce the number of brands that they market.
This process is known as "Brand rationalization." Some companies tend to create
more brands and product variations within a brand than economies of scale
would indicate. Sometimes, they will create a specific service or product brand
for each market that they target. In the case of product branding, this may be to
gain retail shelf space (and reduce the amount of shelf space allocated to
competing brands). A company may decide to rationalize their portfolio of brands
from time to time to gain production and marketing efficiency, or to rationalize a
brand portfolio as part of corporate restructuring.
Chapter No. 2
Customer based brand equity model is that the power of a brand lies in what
customers have learned, felt, seen, and heard about the brand as a result of their
experience over time. Customer-based brand equity is defined as the differential
effect that brand knowledge has on consumer response to the marketing of that
brand. There are three key ingredients of this definition: (1) “differential effect,”
(2) “brand knowledge,” (3) “consumer response to marketing.”
The power of a brand lies in the minds of consumers and what they have
experienced and learned about the brand over time. Consumer knowledge drives
the differences that manifest themselves in terms of brand equity. This realization
has important managerial implications. According to this view, brand equity
provides marketers with a vital strategic bridge from their past to their future.
Brand equity can provide marketers with a means to interpret their past
marketing performance and design their future marketing programs.
There are four steps of building a strong brand. These are as follows:
These steps represent fundamental questions that customers can ask about
brands as follow:
Brand Salience
Achieving the right brand identity involves creating brand salience with
customers. It relates to the aspects of the awareness of the brand, for example
how often and easily the brand is evoked under various situations? Brand
awareness refers to customers’ ability to recall and recognize the brand, as
reflected by their ability to identify the brand under different conditions.
Brand Performance
Designing and delivering a product that fully satisfies consumer needs and wants
is a prerequisite for successful marketing. To create brand loyalty and resonance
consumer experience with the product must at least meet. Brand performance
relates to the ways in which the product or service attempts to meet customers
more functional needs. Customers can view the performance of products or
services in a broad manner. Reliability refers to the consistency of performance
over time and from purchase to purchase. Durability refers to the expected
economic life of the product. Serviceability refers to the ease of servicing the
product. Performance may also depend on sensory aspects such as how a
product looks and feels.
Brand Imagery
Brand imagery deals with the extrinsic properties of the product including the
ways in which the brand attempt to meet customer psychological needs. Brand
imagery is how people think about a brand abstractly rather than what they think
the brand actually does. Thus imagery refers to more intangible aspects of the
brand.
Brand Judgments
Brand Feelings
Brand feelings are customers’ emotional responses and reaction with respect to
brand. Brand feelings also relate to the social currency evoked by the brand. The
following are six important types of brand-building feelings
Brand Resonance
Brand resonance refers to the nature of the relationship and the extent to which
customers feel that they are “in sync” with the brand. Brand resonance can be
broken down into four categories
¾ Behavioral Loyalty
¾ Attitudinal Attachment
¾ Sense of Community
¾ Active Engagement
The fist dimension is behavioral loyalty in terms of repeat purchase. How often
do customers purchase a brand and how much do they purchase? Behavioral
loyalty is necessary but not sufficient for resonance to occur. To create
resonance, there are also needs to be a strong personal attachment. Customers
should go beyond having a positive attitude to viewing the brand as being
something special. Creating greater loyalty requires deeper attitudinal
attachment, which can be generated by developing marketing programs and
products and services that fully satisfy consumer needs.
Identification with a brand community may reflect an important social
phenomenon whereby customers feel affiliation with other people associated with
the brand. Strong attitudinal attachment or social identity or both are typically
necessary, however, for active engagement with the brand to occur.
Chapter No. 3
Brand positioning is defined as the “act of designing the company’s offer and
image so that it occupies a distinct and valued place in the target customer’s
minds. Positioning is all about identifying the optimal location of a brand and its
competitors in the minds of consumers to maximize potential benefit to the firm.
According to customer based brand equity model, deciding on a positioning
requires determining a frame of reference by identifying the target market and the
nature of competition and the ideal points-of-parity and points-of-difference brand
association.
Target Market
A market is the set of all actual and potential buyers who have sufficient
motivation, ability and opportunity to buy a product. Market segmentation
involves dividing the market into distinct groups of homogeneous consumers who
have similar needs and consumer behavior and thus require similar market
mixes. All companies never target all of its segments. There is a criterion under
which segments are targeted.
From customer perspective the model also classifies nonusers of a brand into
four groups based on their openness to trying the brand from low to high, as
follows:
1. Strongly unavailable: Strongly prefer their current brand
2. Weakly unavailable: Preference lies with their current brand, although not
strongly
3. Ambivalent: As attracted to the other brand as to their current choice
4. Available: Prefer the other brand but have not yet switched
Points of Parity
Points of parity are those associations that consumers view as being necessary
to be a legitimate and credible offering within a certain product category. A point
of parity is easier to achieve than points of difference. For example there is a
minimal difference between Surf excel and Ariel washing powder.
Points of Difference
Points of difference are attributes that consumers strongly associate with a brand
positively evaluate, and believe that they could not find to the same extent with a
competitive brand. For example when Telenor launch first time easy load it
created points of difference at that time. Points of difference may involve
performance attributes. Many top brands attempt to create a point of difference
on overall superior quality.
Core brand values are those set of attributes that characterize the five to ten
most important aspects of a brand. Core brand values can serve as the basis of
brand positioning in terms of how they relate to points of parity and points of
difference. Core brand values can be identified through structured process. The
first step is to create a detailed mental map of the brand. A mental map
accurately portrays in detail all salient brand associations and responses for a
particular target market. Mental maps must reflect the reality of how the brand is
actually perceived by consumers in terms of their beliefs, attitudes, opinions,
feelings, images and experiences.
Brand Mantras
¾ Memorability
¾ Meaningfulness
¾ Likeability
¾ Transferability
¾ Adaptability
¾ Protect ability
Memorability
A necessary condition for building brand equity is achieving a high level of brand
awareness. There are certain names, symbols, logos and visual properties that
make a brand more attention getting and easy to remember and thus contribute
to brand equity. In other words brand name should be such which is easily
recalled and recognized.
Meaningfulness
Brand elements can also be chosen whose inherent meaning enhances the
formation of brand associations. Two particularly important dimension of the
meaning of a brand element are the extent to which it conveys the following:
General information about the nature of the product category In terms of
descriptive meaning, to what extent does the brand element suggest something
about the product category?
Specific information about particular attributes and benefits of the brand in terms
of persuasive meaning, to what extent does the brand element suggest
something about the products
Likeability
Brand elements can be chosen that are rich in visual and verbal imagery and
inherently fun and interesting. In terms of first three criteria, a memorable,
meaningful, and likable set of brand elements offers many advantages. Because
consumers often do not examine much information in making product decisions,
it is often desirable that brand elements be easily recognized and recalled and
inherently descriptive and persuasive.
Transferability
It is the fourth general criterion concerns the transferability of the brand element
in both a product category and geographic sense. First, to what extent can the
brand element ad to the brand equity of new products sharing the brand
elements introduced either within the product class. Second to what extent does
the brand element add to brand equity across geographic boundaries and market
segments.
Adaptability
It is the fifth general criterion concerns the adaptability of the brand element. Due
to changes in customer values and opinions brand elements often must be
updated over time. The more adaptable and flexible the brand element, the
easier it is to update it.
Protect ability
The final criterion concerns the Protect ability of the brand element both in legal
and competitive sense. Because suspicious persons ask sometimes detail about
the product before purchase. So manufacturers must legally protect their
products by registered their patents.
1. Basic: There are some basic things which are required by customers.
2. Background: Customers have background when they are going to
purchase.
3. Beauty: Packaging should be such that attract customers.
4. Belief: Customer should be belief on the brand.
5. Benefit: Customers purchase those things which give them benefit.
Brand Awareness
Brand awareness improved the extent to which brand names are chosen that are
simple and easy to pronounce. To enhance brand recall, it is desirable for the
brand name to be simple and easy to pronounce. Pronunciation also affects the
willingness of consumers to order the brand orally. Ideally, the brand name
should have a clear, understandable and unambiguous pronunciation and
meaning. The way a brand is pronounced can affect its meaning.
Brand Association
It is necessary for the brand to have broader meaning to consumers than just the
product category it is in. Because the brand name is a compact form of
communication, the explicit and implicit meaning that consumers extract from the
name can be critical. The brand name may be chosen to reinforce an important
attribute or benefit association that makes up its product positioning. For example
Johnson & Johnson baby shampoo was also able to transport its “gentleness”
association to a more adult audience when they were forced to reposition in the
1970s when the birth rate declined.
URLs
There are many types of logos ranging from corporate names written in a
distinctive form. For example the strong word marks include Coca-Cola, Dunhill,
and Kit-Kat. There are some abstract logos which may be completely unrelated
to the word mark. These are called non-word mark logos. The non-word marks
logos are also often called symbols. Some logos are literal representations of the
brand name, enhancing brand awareness such as Apple logos and American
Red Cross.
Characters
Brand characters typically are introduced through advertising and can play a
central role in these and subsequent ad campaigns. Brand characters come in
many different forms. Some brand characters are animated where as others are
live-action figures. Consequently brand characters can be quite useful for
creating brand awareness. Characters often must be updated over time so that
their image and personality remains relevant to the target market.
Slogans
Slogans are short phrases that communicate descriptive information about the
brand. Slogans often appear in advertising but can play an important role on
packaging and in other aspects of the marketing programs. Slogans can play off
the brand name in a way to build both awareness and image. Some slogans
become so strongly linked to the brand that it becomes difficult to subsequently
introduce new ones. For example the slogan of Haleeb milk is “the thickest
milk”.
Chapter No. 5
Product Strategy
The product itself is at the heart of brand equity because it is the primary
influence on what consumers experience with a brand, what they hear about a
brand from others, and what the firms can tell customers about the brand in their
communications. To create brand loyalty, consumers’ experiences with the
product must at least meet once.
Perceived quality has been defined as customers’ perception of the overall
quality of a product to relevant alternatives and with respect to its intended
purpose. There are some general dimensions of product quality which are as
follows:
Relationship Marketing
¾ Acquire new customers can cost five times more than the costs involved in
satisfying and retaining current customers.
¾ The average company loses ten percent of its customers each year.
¾ A five percent reduction in the customer defection rate can increase profits
by twenty five percent to eighty five percent, depending on the industry.
¾ The customer profit rate tends to increase over the life of the retained
customer.
Loyalty Programs
Loyalty programs have become one popular means by which marketers can
create stronger ties to customers. There are some tips for building effective
loyalty programs follow:
Pricing Strategy
The pricing strategy can dictate how consumers categorize the price of the brand
and how firm set that price. Consumers may infer the quality of a product on the
basis of its price. Many marketers have adopted value-based pricing strategies
attempting to sell the right product at the right price to better meet consumer
wishes. From a branding perspective, it is important to understand all price
perceptions that consumers have for a brand.
Setting Prices to Build Brand Equity
There are many different approaches to setting prices that depend on a number
of considerations. Many firms now are employing a value-pricing approach to set
prices and an everyday-low pricing approach to determine their discount pricing
policy over time.
Value Pricing
The objective of value pricing is to uncover the right blend of product quality,
product costs, and product prices that fully satisfies the needs and wants of
consumers and the profit targets of the firm. Several firms have been
successfully by adopting a value-pricing strategy. For instance, Wal-Mart’s
slogan “we sell for less” describes the pricing strategy that has allowed them to
become the world’s largest retailer. In general, an effective value-pricing strategy
should strike the proper balance among the following:
The first key is the proper design and delivery of the product. Product value can
be enhanced through many types of well-conceived and executed marketing
programs. The value pricing point out that the concept does not mean selling the
product at lower prices. Consumers are willing to pay premium when they
perceive added value in products and services. Some companies actually have
been able to increase prices in some cases by introducing new products. For
instance when Gillette introduced the Mach III, it priced the cartridges at a fifty
percent premium over its then-priciest blade, despite the prevailing deflationary
climate. The price increase did not deter customers, and Gillette reached its
highest market share, seventy one percent in 1962.
Product Costs
Product Prices
Channel Strategy
The manner by which a product is sold can have a profound impact on the
resulting equity and ultimate sales success of a brand. Marketing channels are
sets of interdependent organizations involved in the process of making a product
or service available for use.
Channel Design
A number of possible channel types and arrangements exist. Broadly, they can
be classified into direct and indirect channels. Direct channels involve selling
through personal contacts from the company to prospective customers by mail,
phone, electronic means, in-person visits, and so forth. Indirect channels involve
selling through third party intermediaries such as agents, wholesales and
retailers.
Indirect Channels
When manufacturers regain some of their lost power by creating strong brand
through some of the brand building tactics, for example, by selling innovative and
unique products at properly priced and advertised that consumers demand for it.
In this way consumer may ask retailers to stock and promote manufacturers
Direct Channels
To gain control over the selling process and build stronger relationships with
customers, some manufacturers are introducing their own retail outlets, as well
as selling their product directly to customers through various means. These
channels can take many forms. The most extensive form involves company-
owned stores. Hallmark, Goodyear and others have sold their own products in
their own stores for years.
Chapter No. 6
¾ Media advertising
¾ Direct response advertising
¾ Online advertising
¾ Place advertising
¾ Point of purchase advertising
¾ Consumer promotions
¾ Event marketing and sponsorship
¾ Publicity and public relations
¾ Personal selling
Media Advertising
Advertising is any paid form of non personal presentation and promotion of ideas,
goods or services by an identified sponsor. Media advertising includes TV, radio,
newspaper and magazines. From brand equity perspective television advertising
demonstrate product attributes and consumer benefits. There are some benefits
and drawbacks of TV, radio, newspaper and magazines which are as under:
Online Advertising
Place Advertising
Place advertising also called out of home advertising that captures advertising
outside traditional media. Place advertising includes, billboards and posters,
product placement and movies, airlines. Billboards are very effective means for
advertising. It is showing up everywhere. Many marketers pay fee for their
product placement in television programs. Product place can be combined with
special promotions to publicize a brand’s entertainment tie-ins.
Consumer Promotions
Public relations and publicity relate to a variety of programs and are designed to
promote a company‘s image and its products. Publicity refers to non-personal
communications such as press releases, media interviews, press conferences,
feature articles, newsletters, photographs, films and tapes. Public relations may
also involve such things as annual reports, fund-raising and membership drives,
lobbying, special event management, and public affairs.
There are three steps for designing an ad. It is also known as 3M:
1. Coverage
2. Contribution
3. Commonality
4. Complementary
5. Versatility
6. Cost
Coverage
Contribution
Commonality
Complementary
Versatility
Cost
Finally evaluating the each communication option is also very much critical for a
marketer. The cost of each communication option varies in the market. Now the
problem is which communication option should be chosen and which is best.
Communication options vary in terms of their breadth and depth of coverage. To
select one communication option the marketer has to trade off the other.
Chapter No. 8
Value Stages
Brand value creation begins with marketing activity by the firm that influences
customers in a way affecting how the brand performs in the marketplace and
thus how it is valued by the financial community.
Program Multiplier
The ability of marketing program to affect the customer mindset will depend on
the quality of that program investment. Four particularly important factors are as
follows:
Customer Mindset
There are five dimensions that have emerged to highlight the CBBE model as
particularly important measure of the customer mindset:
1. Brand awareness: The extent and ease with which customers recall and
recognize the brand and can identify the products and services with which
it is associated.
2. Brand association: The strength, favorability and uniqueness of
perceived attributes and benefits for the brand.
3. Brand attitudes: Overall evaluations of the brand in terms of its quality
and the satisfaction it generates.
4. Brand attachment: How loyal the customer feels toward the brand. A
strong form of attachment, adherence, refers to the consumer’s resistance
to change and the ability of a brand to withstand bad news.
5. Brand activity: The extent to which customers use the brand, talk to
others about the brand, seek out brand information, promotions and
events.
Customer Multiplier
The extent to which value created in the minds of customers affects market
performance depends on various contextual factors external to the customer.
Three such factors are as follows:
1. Competitive superiority: How effective are the quantity and quality of the
marketing investment of other competing brands.
2. Channel and other intermediary support: How much brand
reinforcement and selling effort is being put forth by various marketing
partners.
3. Customer size and profile: How many and what types of customers are
attracted to the brand.
Market Multiplier
The extent to which the value engendered by the market performance of a brand
is manifested in shareholder value depends on various contextual factors
external to the brand itself. These factors are as follows:
¾ Growth potential: What are the growth potential for the brand and the
industry in which it operates?
¾ Risk profile: what is the risk profile for the brand? How vulnerable is the
brand likely to be to those facilitating and inhibiting factors?
¾ Brand contribution: How important is the brand as part of the firm’s
brand portfolio and all the brands it has?
Shareholder Value
Based on all available current and forecasted information about a brand as well
as many other considerations, the financial marketplace then formulates opinions
and makes various assessments that have direct financial implications for the
brand value. Three particularly important indicators are the stock price, the price
earnings multiple, and overall market capitalization for the firm.
What to Track
This section provides some general guidelines for tracking. The tracking study is
necessary to customize tracking surveys to address the specific issues faced by
the brand.
Tracking studies in general depends upon the frequency of product purchase and
on consumer behavior and marketing activity in the product category. One useful
tracking approach for monitoring brand associations involves continuous tracking
studies in which information is collected on continuous basis over time. When the
brand has more stable associations, tracking can be conducted on a less
frequent basis.
Tracking measures must be reliable and sensitive as possible. One problem with
many traditional measures is that they do not change much over time. In this way
they reflect the fact. Marketers must identify the real value drivers for a brand that
is, those tangible and intangible points of difference that influence and determine
consumers’ product and brand choices.
¾ Define the firm’s view of the brand equity concept and explain why it is
important
¾ Describe the scope of key brands in terms of associated products and the
manner by which they have branded and marketed.
¾ Specify what the actual and desired equity is for brand at all relevant
levels of the brand hierarchy at both the corporate level and at the
individual product level.
¾ Explain how brand equity is measured in terms of the tracking study and
the resulting brand equity report.
¾ Suggest how brand equity should be managed in terms of some general
strategic guidelines.
¾ Specify the proper treatment of the brand in terms of trademark usage,
packaging and communication.
¾ Outline how marketing programs should be devised in terms of some
specific tactical guidelines.
Brand equity charter may not change from year to year. As new products are
introduced, brand programs are changed, and other marketing initiatives take
place.
Financial - One way to measure brand equity is to determine the price premium
that a brand commands over a generic product. For example, if consumers are
willing to pay $100 more for a branded television over the same unbranded
television, this premium provides important information about the value of the
brand. However, expenses such as promotional costs must be taken into account
when using this method to measure brand equity.
To develop a brand equity management system that will maximize long term
brand equity organizational responsibilities and process with respect to the brand
must be clearly defined. This section considers internal issues related to
assigning responsibilities and duties for properly managing brand equity. There
must be a chief brand officer in every organization who reports directly to the
chief executive officer of the company and who protect the brand –the way it
looks and feels. The chief brand officer recognizes that the brand is the sum total
of everything a company does. He should not only help to build the brand but
also plans, anticipates, researches, probes, listens, and informs.
Chapter No. 10
Comparative Methods
Comparative methods involve experiments that examine consumer attitudes and
behaviors toward a brand directly estimate the benefits arising from having a high
level of awareness and strong, favorable, and unique brand associations. There
are two types of comparative methods.
Holistic Methods
Holistic methods attempt to place an overall value on the brand in either abstract
utility term. Thus holistic methods attempt to net out various considerations to
determine the unique contribution of the brand. The residual approach attempts
to examine the value of the brand by subtracting consumer’s preferences for the
brand based on physical product attributes alone from their overall brand
preferences. The valuation approach attempts to place a financial value on brand
equity for accounting purposes, mergers and acquisitions.
Chapter No. 11
The breadth of a branding strategy concerns the number and nature of different
products linked to the brands sold by a firm. There are some steps which can be
used to measure include aggregate market factors, category factors, and
environmental factors.
Aggregate market factors include the market size, market growth, stage in
product life cycle, sales cycle, seasonality and profits.
Category Factors
Category factor is considered attractive if it is the case that the threat of new
entrants is low due to the barriers of entry from economies of scale, bargaining
power of buyers is low e.g. when the product bought is a small percentage of
buyers costs, current category rivalry is low when there are few competitors in
fast growing markets and few close product substitutes exist in the eyes of
consumers and the market is operating at near capacity.
Environmental Factors
External forces unrelated to the product’s customers and competitors that affect
marketing strategies. A host of technological, political, economic, regulatory, and
social factors will affect the future prospects of a category and should be
forecasted.
The depth of a branding strategy concerns the number and nature of different
brands marketed in the product class sold by a firm. For example Procter &
Gamble is widely recognized as popularizing the practice. P&G became
proponents of multiple brands after recognizing that introducing its new detergent
brand as an alternative to its already successful tide detergent resulted in higher
combined product category sales.
Brand Hierarchy
A brand hierarchy is a means of summarizing the branding strategy by displaying
the number and nature of common and distinctive brand elements across the
firm’s products. A brand hierarchy is a useful means of graphically portraying a
firm’s branding strategy. The highest level of the hierarchy technically always
involves one brand the corporate brand. For some firms the corporate brand is
virtually the only brand used e.g. as with General Motors and Hewlett-Packard.
At the next lower level, a family brand is defined as a brand that is used in more
than one product category but is not necessarily the name of the company itself.
An individual brand is defined as a brand that has been restricted to essentially
one product category, although it may be used for several different product types
within the category. For example General Motor is a corporate brand, under
General Motor Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac and GMC are
family brands. Under these brands there are an individual brands like Alero,
regal, cutlass, sun fire etc.
Corporate brand equity is the differential response by consumers, customers,
employees, other firms or any relevant constituency to the words, actions,
communications, products or services provided by an identified corporate brand
entity.
Corporate Image
Corporate image plays very much important role in any brand strategy. There are
some important corporate image associations which are as follows:
Corporate image associations may reflect values and programs of the company
that do not always directly relate to the products they sell. Firms can run
corporate image ad campaign as a means to describe to consumers, employees,
and others the philosophy and actions of the company with respect to
organizational, social and political issues.
Corporate Credibility
If multiple brand elements from different levels of the brand hierarchy are
combined to brand new products, it is necessary to decide how much emphasis
Chapter No. 12
1. It can develop a new brand, individually chosen for the new product.
2. It can apply, in some way, one of its existing brands.
3. It can use a combination of a new brand with an existing brand.
1. Introduce the same product in a different for. For example, Haleeb Dairy
Queen
2. Introduce products that contain the brand’s distinctive taste, ingredient, or
component. For example, Cornetto Ice Cream
3. Introduce companion products for the brand. For example, McDonald
offers free Pepsi with its fast food.
4. Introduce product that relevant to the customer franchise of the brand. For
example, Mobilink Black berry.
5. Introduce products that capitalize on the firm’s perceived expertise. For
example, Sony TV
6. Introduce products that reflect the brand’s distinctive benefit, attribute. For
example, Safeguard.
7. Introduce products that capitalize on the distinctive image or prestige of
the brand. For example, Coca Cola
There are different advantages of brand extension for a company. Some of them
are as follows:
1) Brand extensions can reduce the costs and risks associated with
launching a new product. Since the brand name is already known and
(hopefully) popular, using that brand name on a new product (particularly
when it’s in the same line as the original product) immediately
communicates the same level of awareness and perception.
2) Brand extensions typically garner more shelf space than unknown new
product brands. Simply stated, retailers are more likely to stock a new
product with a known brand name on it. Again, it’s less risky, and a
familiar brand comes with ready-made awareness and perceptions.
3) Brand extensions may require a lower advertising investment.
Consumers are already aware of the brand name, so advertising to create
brand awareness and recognition is not necessary. Instead, advertising
dollars can be invested in more targeted messaging.
4) Brand extensions can boost the parent brand by creating increased
interest in the brand as a whole and possibly growing the brand’s
customer base across the board.
5) Brand extensions reduce a company’s dependency on one product
which could become less popular in the future