Brand and Brand Management

Prepared By: Divya Gadaria

What is a brand?

• For the American Marketing Association (AMA), a brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” • These different components of a brand that identify and

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OriginOrigin Branding has been around for centuries as a means to distinguish the Branding has been around for centuries as a means to distinguish the

goods of one producer from those of another. In fact, the word "brand" goods of one producer from those of another. In fact, the word "brand" is derived from the Old Norse brandr meaning "to burn." It refers to the is derived from the Old Norse brandr meaning "to burn." It refers to the practice of producers burning their mark (or brand) onto their products.practice of producers burning their mark (or brand) onto their products.

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“A successful brand is an identifiable product, service, place or person, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in face of competition.”

According to David Aaker, “A Brand is a distinguishing name and/or symbol

(such as a logo, trade mark, or package design) intended to identify the goods or services of either one seller or a group of sellers and to differentiate those goods or services from those of competitors”

“Strategic Brand Management involves the design and implementation of marketing programs and activities to build, measure, and manage brand equity.”

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Brands vs. ProductsBrands vs. Products

A A productproduct is anything we can offer to a market is anything we can offer to a market for attention, acquisition, use, or consumption for attention, acquisition, use, or consumption that might satisfy a need or want. that might satisfy a need or want.

A A productproduct may be a physical good, a service, a may be a physical good, a service, a retail outlet, a person, an organization, a place, retail outlet, a person, an organization, a place, or even an idea.or even an idea.

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Five Levels of Meaning for a Five Levels of Meaning for a ProductProduct

The The core benefit levelcore benefit level is the fundamental need or want that is the fundamental need or want that consumers satisfy by consuming the product or service. consumers satisfy by consuming the product or service.

The The generic product levelgeneric product level is a basic version of the product is a basic version of the product containing only those attributes or characteristics containing only those attributes or characteristics absolutely necessary for its functioning but with no absolutely necessary for its functioning but with no distinguishing features. This is basically a stripped-down, distinguishing features. This is basically a stripped-down, no-frills version of the product that adequately performs the no-frills version of the product that adequately performs the product function.product function.

The The expected product levelexpected product level is a set of attributes or is a set of attributes or characteristics that buyers normally expect and agree to characteristics that buyers normally expect and agree to when they purchase a product. when they purchase a product.

The The augmented product levelaugmented product level includes additional product includes additional product attributes, benefits, or related services that distinguish the attributes, benefits, or related services that distinguish the product from competitors. product from competitors.

The The potential product levelpotential product level includes all the augmentations includes all the augmentations and transformations that a product might ultimately and transformations that a product might ultimately undergo in the future.undergo in the future.

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A brand is therefore more than a A brand is therefore more than a product, as it can have dimensions product, as it can have dimensions that differentiate it in some way that differentiate it in some way from other products designed to from other products designed to satisfy the same need. satisfy the same need.

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Some brands create competitive Some brands create competitive advantages with product advantages with product performance; other brands create performance; other brands create competitive advantages through competitive advantages through non-product-related means. non-product-related means.

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Why do brands matter?Why do brands matter? What functions do brands perform What functions do brands perform

that make them so valuable to that make them so valuable to marketers?marketers?

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Importance of Brands to Importance of Brands to ConsumersConsumers

Identification of the source of the productIdentification of the source of the product Assignment of responsibility to product Assignment of responsibility to product

makermaker Risk reducerRisk reducer Search cost reducerSearch cost reducer Promise, bond, or pact with product makerPromise, bond, or pact with product maker Symbolic deviceSymbolic device Signal of qualitySignal of quality

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Reducing the Risks in Product Reducing the Risks in Product DecisionsDecisions

Consumers may perceive many different types of risks in Consumers may perceive many different types of risks in buying and consuming a product:buying and consuming a product:

Functional riskFunctional risk——The product does not perform up to The product does not perform up to expectations.expectations.

Physical riskPhysical risk——The product poses a threat to the The product poses a threat to the physical well-being or health of the user or others. physical well-being or health of the user or others.

Financial riskFinancial risk——The product is not worth the price paid.The product is not worth the price paid. Social riskSocial risk——The product results in embarrassment The product results in embarrassment

from others.from others. Psychological riskPsychological risk——The product affects the mental The product affects the mental

well-being of the user.well-being of the user. Time riskTime risk——The failure of the product results in an The failure of the product results in an

opportunity cost of finding another satisfactory product.opportunity cost of finding another satisfactory product.

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Importance of Brands to Importance of Brands to FirmsFirms

To firms, brands represent To firms, brands represent enormously valuable pieces of legal enormously valuable pieces of legal property, capable of influencing property, capable of influencing consumer behavior, being bought consumer behavior, being bought and sold, and providing the security and sold, and providing the security of sustained future revenues. of sustained future revenues.

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Importance of Brands to Importance of Brands to FirmsFirms

Identification to simplify handling or Identification to simplify handling or tracingtracing

Legally protecting unique featuresLegally protecting unique features Signal of quality levelSignal of quality level Endowing products with unique Endowing products with unique

associationsassociations Source of competitive advantageSource of competitive advantage Source of financial returnsSource of financial returns

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Can everything be Can everything be branded?branded?

Ultimately a brand is something that Ultimately a brand is something that resides in the minds of consumers. resides in the minds of consumers.

The key to branding is that consumers The key to branding is that consumers perceive differences among brands in a perceive differences among brands in a product category. product category.

Even commodities can be branded:Even commodities can be branded: Coffee (Maxwell House), bath soap (Ivory), Coffee (Maxwell House), bath soap (Ivory),

flour (Gold Medal), beer (Budweiser), salt flour (Gold Medal), beer (Budweiser), salt (Morton), oatmeal (Quaker), pickles (Vlasic), (Morton), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), chickens (Perdue), bananas (Chiquita), chickens (Perdue), pineapples (Dole), and even water (Perrier) pineapples (Dole), and even water (Perrier)

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What is branded?What is branded? Physical goodsPhysical goods ServicesServices Retailers and distributorsRetailers and distributors Online products and servicesOnline products and services People and organizationsPeople and organizations Sports, arts, and entertainmentSports, arts, and entertainment Geographic locationsGeographic locations Ideas and causesIdeas and causes

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Source of Brands Source of Brands StrengthStrength

“The real causes of enduring market leadership are vision and will. Enduring market leaders have a revolutionary and inspiring vision of the mass market, and they exhibit an indomitable will to realize that vision. They persist under adversity, innovate relentlessly, commit financial resources, and leverage assets to realize their vision.”

Gerald J. Tellis and Peter N. Golder, “First to Market, First to Fail? Real Causes of Enduring Market Leadership,” MIT Sloan Management Review, 1 January 1996

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Importance of Brand Importance of Brand ManagementManagement

The bottom line is that any brandThe bottom line is that any brand——no matter how strong at one point in no matter how strong at one point in timetime——is vulnerable, and susceptible is vulnerable, and susceptible to poor brand management. to poor brand management.

What are the strongest What are the strongest brands?brands?

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Top Ten Global BrandsTop Ten Global BrandsBrandBrand 2006 2006

($Billion)($Billion)2005 ($ 2005 ($ Billion)Billion)

1.1. Coca-ColaCoca-Cola2.2. MicrosoftMicrosoft3.3. IBMIBM4.4. GEGE5.5. IntelIntel6.6. NokiaNokia7.7. ToyotaToyota8.8. DisneyDisney9.9. McDonald’sMcDonald’s10.10. Mercedes-Mercedes-

BenzBenz

67.0067.0056.9356.9356.2056.2048.9148.9132.3232.3230.1330.1327.9427.9427.8527.8527.5027.5021.8021.80

67.5367.5359.9459.9453.3853.3847.0047.0035.5935.5926.4526.4524.8424.8426.4426.4426.0126.0120.0020.00

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Branding Challenges and Branding Challenges and OpportunitiesOpportunities

Savvy customersSavvy customers Brand proliferationBrand proliferation Media fragmentationMedia fragmentation Increased competitionIncreased competition

Globalization

Low-priced competitors

Brand extension

Deregulation

Increased costsIncreased costs Greater accountability Greater accountability

Brand ProliferationBrand Proliferation

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The Brand Equity ConceptThe Brand Equity Concept No common viewpoint on how it should No common viewpoint on how it should

be conceptualized and measuredbe conceptualized and measured It stresses the importance of brand role It stresses the importance of brand role

in marketing strategies.in marketing strategies. Brand equity is defined in terms of the Brand equity is defined in terms of the

marketing effects uniquely attributable to marketing effects uniquely attributable to the brand.the brand. Brand equity relates to the fact that different Brand equity relates to the fact that different

outcomes result in the marketing of a product or outcomes result in the marketing of a product or service because of its brand name, as compared to if service because of its brand name, as compared to if the same product or service did not have that name.the same product or service did not have that name.

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Strategic Brand Strategic Brand ManagementManagement

It involves the design and implementation of It involves the design and implementation of marketing programs and activities to build, measure, marketing programs and activities to build, measure, and manage brand equity. and manage brand equity.

The The Strategic Brand Management ProcessStrategic Brand Management Process is defined is defined as involving four main steps:as involving four main steps:1. Identifying and establishing brand positioning and values1. Identifying and establishing brand positioning and values

2. Planning and implementing brand marketing programs2. Planning and implementing brand marketing programs

3. Measuring and interpreting brand performance3. Measuring and interpreting brand performance

4. Growing and sustaining brand equity4. Growing and sustaining brand equity

Strategic Brand Management Process

The Strategic Brand Management Process consists of the following four steps:

Strategic Brand

Management Process

Identifying and

Establishing

Brand Position

Planning and

Implementing B

rand

Marketing P

rogra

ms

Measuring and

Interpreting Brand

Performance

Growing and

Susta

ining Brand

EquityStep 1

Step 2Ste

p 4Ste

p 3

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Strategic Brand Management Strategic Brand Management ProcessProcess

Mental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantra

Mixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associations

Brand value chainBrand auditsBrand trackingBrand equity management system

Brand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalization

Key ConceptsSteps

Grow and sustainbrand equity

Identify and establishbrand positioning and values

Plan and implement brand marketing programs

Measure and interpretbrand performance

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Brand positioning define 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 mind”

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A Mental map is a visual depiction of the different types of associations linked to the brand in the minds of consumers. Core Brand associations are that subset of association (attributes and benefits) that best characterized a brand. A Brand mantra (also known as brand essence or core brand promise) is a short three to five word expression of the most important aspect of the brand. For examples; Nike-Authentic athletic performance. Disney- Fun Family Entertainment.

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A Mental map is a visual depiction of the different types of associations linked to the brand in the minds of consumers

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A Brand mantra (also known as brand essence or core brand promise) is a short three to five word expression of the most important aspect of the brand

Step 2: Planning & Implementing Brand Step 2: Planning & Implementing Brand Marketing ProgramsMarketing Programs

A Brand that consumers are sufficiently aware of A Brand that consumers are sufficiently aware of and with which they have strong, favorable, and and with which they have strong, favorable, and unique associations. In general, this knowledge-unique associations. In general, this knowledge-building process will depend on three factors:building process will depend on three factors:A.A.The initial choices of the brand elements or identities The initial choices of the brand elements or identities making up the brand and how they are mixed and making up the brand and how they are mixed and matched.matched.B.B.The marketing activities and supporting marketing The marketing activities and supporting marketing program and the way the brand is integrated into them.program and the way the brand is integrated into them.C.C.Other associations indirectly transferred to or Other associations indirectly transferred to or leveraged by the brand as a result of linking it to some leveraged by the brand as a result of linking it to some other entity (such as a company, country of origin or other entity (such as a company, country of origin or other brand).other brand).

Choosing brand elements: The most common brand elements are brand names, URLs, logos, symbols, characters, packaging, and slogans. A number of option and criteria are relevant for choosing them to enhance brand awareness or facilitate the formation of strong, favorable, and unique brand associations.

Integrating the Brand into Marketing Activities and the Supporting Marketing Program: Choice of brand elements can make some contribution to building brand equity, the biggest contribution comes from marketing activities related to the brand. Marketing programs can creates strong, favorable, and unique brand association in variety of ways.

Leveraging Secondary Association: The third and final way to build brand equity is to leverage secondary associations. Brand associations may themselves be linked to other entities. For example; the company (through branding strategies), country (identification of product origin), channel of distribution, co-branding, celebrity endorsement, sponsorship or awards or reviews.

Choosing Brand Elements to Build Brand Equity - Options and Tactics for Brand ElementsBrand Elements

Options and Tactics for Brand Elements:

The following are few options and tactics for Brand Elements:

Jingles: These are musical slogans that help in reminding by repetition.

Examples: The axe song and O Fortuna, the Old Spice Theme Song.

Characters: Characters can also be used as brand elements.

Slogans: Slogans are short phrases that are descriptive or persuasive in nature and provide more info about the brands.

Packaging: Packaging is an important brand element. It helps to identify the brand, convey descriptive and persuasive information through labelling, allows protection, transportation, storage and consumption of product .

Choosing Brand Elements to Build Brand Equity - Options and Tactics for Brand ElementsBrand Elements

Options and Tactics for Brand Elements:

The following are few options and tactics for Brand Elements:

Brand Names:Descriptive brand names in which the function is described literally in brand name.

Suggestive brand names in which the name is suggestive of a benefit provided by the brand to the customer.

URLs:• Keep the URLs as simple as possible, • Avoid clichés, • Use a new term for the real word• Use catchy phrases

Logos and Symbols:Various kinds that can be used are:• Family Shields

• Fonts

• Symbols

• Abstract – shapes and image

Step 3: Measuring & Interpreting Brand Performance

The task of determining or evaluating a brand’s positioning often benefits from a brand audit. A Brand Audit is a comprehensive examination of a brand to assess its health, uncover its source of equity, and suggest ways to improve and leverage that equity. A brand audit requires understanding sources of brand equity from the perspective of both the firm and the consumer. To understand the effects of these brands marketing program, marketers should measure and interpret brand performance through marketing research. The useful tool for the task is the Brand value chain. The brand value chain is means to trace the value creation process for brands, to better understand the financial impact of brand marketing expenditures and investment. . It can also be used as a model to take a critical look at the way resources are being spent. It helps to reallocate the company’s resources so that more is spent in the customer system and less in the product and distribution system.

To manage their brands profitably, managers must successfully design and implement a brand equity measurement system. A Brand Equity Measurement system is a set of research procedures designed to provide timely, accurate, and actionable information for marketers so that they can make the best possible tactical decisions in the short run and the best strategic decisions in the long run.

For implementing such a system involves two key steps—conducting Brand tracking (Tracking studies involve information collected from consumers on a routine basis over time. Tracking studies help to understand, where, how much and in what ways brand value is being created) and implementing Brand Equity Measurement

Step 4: Growing and Sustaining Brand EquityMaintaining and expanding on brand equity can be quit

challenging. Managing Brand equity can mean managing brands within the context of other brands, as well as over multiple categories, overtime, and across multiple market segments.

Defining the branding strategy: The firm’s branding strategy provides general guidelines about which brand elements to apply across its products. Two main tools in defining the corporate branding strategy are the brand—product matrix and the brand hierarchy. Brand-product matrix—is a graphical representation of all the brands and products sold by the firm. The brand hierarchy displays the number and nature of common and distinctive brand components across the firm’s product.

Managing brand equity over time: effective brand management also requires taking a long-term view of marketing decisions. Because consumers’ responses to marketing activity depend on what they know and remember about brand, short-term marketing mix actions, by changing brand knowledge, necessarily increase or decrease the success of future marketing actions.

Managing Brand Equity over Geographic Boundaries, cultures, and market segments: another important consideration in managing brand equity is recognizing and accounting for different types of consumers in developing branding and marketing programs. International factors and global branding strategies are particularly important in these decisions.