Contents

Chapter 1

1) Introduction of Brand

2) Meaning of Brand

3) Principle of Branding

4) Brand Positioning

5) Brand Development

Chapter 2

1) Types of Brands

Chapter 3

1) Importance of Branding

Chapter 4

1) Strategies of Branding
Chapter 5
Few Examples & Images of some
Popular brands

Chapter 6

Conclusion

Bibliography
 CHAPTER 1

BRAND

Business has only two functions- Marketing & Innovation

(Peter F. Drucker)

Take a look at the list below that shows the world top 10 brands.

1) BMW
2) AMUL
3) McDonalds
4) XEROX
5) SONY
6) HEINZ
7) DISNEY
8) IBM
9) WAL-MART
10) ROLEX

Why do companies such as IBM, BMW, AMUL, SONY & ROLEX

seems to achieve global marketing success so easily? Why does it seem
such an effort for others?

Why do we as consumer feel loyal to such brands that the

mere sight of their logo has us reaching into our pocket to buy their
products?

The Meaning of Brand

Brands are means of differentiating a compound product & services from
those of its competitor. There is plenty of evidences to prove that
customers will pay a substantial price premium for a good brand &
remain loyal to that brand. It is important, therefore to understand what
brands are & why they are important.

“It is not factories that make profits, but relationship with customers and
it is company and brand names which secure those relationships”.
(McDonalds)

What is Brand?
“A Name, term, sign ,symbol or design or combination of these, that is
intended to identity the goods and services of one business or group of
business & to differentiate them from those of competitors.

Principle Of Branding

Your Brand Is Your Promise! (What are you promising?)

By Phillip Davis President of Tungsten Brilliant Brand Marketing

When people mention the word "brand" they usually mean a well-known,
well-defined company. That's why consumers frequently mention names
like Target, Rolex, Apple, BMW and others who have done an excellent
job in crafting an image and sticking with it. Buyers know what to expect
from these companies, and as long as these companies meet that
expectation, they will continue to imprint their brand in the minds of their
audience. It's pretty simple really; if you just keep in mind these two
principals.

Principal One: Know Your Promise

As amazing as this may seem, most companies don't really know what it
is they are promising their clients. That's why they have weak brands.
They may have mission statements, and can spout off why everyone
should use their product or service, but really it's just a rambling list. Out
of fear of losing audience, most companies will try to compete on price,
quality and service... and that's a recipe for disaster. Who wants to buy a
watch from the Discount Overnight Rolex store? If you try to go after all
three areas you end up muddied in the mind of the consumer who is
trying to put you in a box. And in this case... that's a good thing!
A mental "box" is not that different from a set of mailroom boxes. The
customer gets all these incoming "messages" and has to sort them all day.
The easier you make it for them to sort your company, and put it in a
category, the easier it will be for them to recall it when needed. Try this...
think of a fast place to eat. How about the best tasting food? And finally,
the place you go if you really want to impress someone? You can
probably think of each of these categories rather quickly. And chances are
these companies are more than happy to fill that niche without trying to
become much more.

Take a moment and write out in two or three sentences (more if you're
feeling inspired) exactly what your brand promises. It will usually fall
under three main categories... quality, service or price. But there are
nuances. Ben & Jerry's image contains both a quality message and a
social message... one of commitment to the community and environment.

Principal Two: Never Violate Principal One

Once you have firmly established your promise in the minds of
consumers, make sure every move you make conforms to that promise.
Coke was fine to come out with Diet Coke, Cherry Coke and a host of
other flavor variations (brand extension), but they completely missed the
mark when they introduced NEW Coke. People believed in Coke,
identified with Coke, and it was a part of their history. New Coke was
seen as a betrayal of the brand itself, a vote of no confidence in their core
product. "What's wrong with the original Coke?" was the immediate
question that popped up in most minds.

That's why it is so important to know what it is, and why it is, that people
buy from you and believe in you.

Know your promise and keep your promise. Pretty simple? Yet it will go
a long way toward making your company resonate with your customer on
a deep and lasting level. And that's a promise.
Today, brand-building is often less about commercialization tactics, and
more about building corporate and brand reputation and organizational
integrity.

The Theory of Branding

1. Create an identity that stands for a set of values.

2. Emblazon your product(s) or service(s) with it.

3. Communicate it consistently.

4. Grow and change with the marketplace and the consumer.

5. Become a way of life for a loyal franchise of customers and

consumers.

6. Attract new users and grow unendingly.

Brand Positioning
The Principle author of the book Differentiate or Die, Jack Trout, together
with Al Ries, earlier wrote in the landmark Marketing Classic
Positioning: The Battle for Your Mind:
To Succeed, the First Step is to Position or ‘Situate’ The
Brand in the target consumer’s mind in such a way, that in his or her
perception or the brand, it is distinctive and offers a persuasive customer
value better than its competitors. This is called Competitive Advantage.
All forward-looking companies now regard positioning as the heart of
competitive strategy. As the ultimate aim of any business strategy is to
satisfy the customer, gaining a valued position in the minds of customers
is essential. Some people argue that branding is really positioning, stating
that unless a brand has a position, it has no unique value in the minds of
consumers. You can establish a brand personality, and through precise
market segmentation identify and reach your target audience, but what
links them together is positioning the brand in the minds of that audience.
But, what is a position and how do you arrive at a good strategy for
achieving one?
The branding process seeks to create a unique identity, for a company,
product or service, which differentiates it from the competition. And
every brand has to have a strategic platform. One half of that platform is
created by carefully formulating a distinct brand personality, which
makes the identity of the brand unique. The other half of the strategic
brand platform is positioning. Positioning is critical to brand building
because it is responsible for projecting the brand identity and creating the
perception and image of the brand in people's minds. In other words,
positioning is the process of offering the brand to the consumer. It is
positioning that makes the brand appear to be different and better than all
competing brands. The key points to note about positioning are:

 it is a strategic, not a tactical, activity

 it is aimed at developing a strategic, sustainable competitive
advantage
 it is concerned with managing perceptions
 brand image and reputation are the result of the positioning process

Positioning is normally carried out using brand communications, but

sometimes it is tempting for companies to try and step away from the
brand position in an attempt to reach a different target audience. So can a
brand only position itself in one way? How many positions can a brand
have?

Positioning is the outward expression of a brand, and the reality,

therefore, is that a brand can only have one true position. As positioning
presents the identity and personality of the brand to the outside world, a
multiple personality would seem odd at the very least, and at worst,
schizophrenic. Consumers make brands famous for many reasons, of
which the most important is that they come to trust brands as friends.
That is why deciding on the brand-positioning strategy is such an
important part of brand strategy. However, there are ways in which the
brand may be presented differently to various target audiences. The
success of this depends on an accurate judgment of the segments that
exist in the market, and the segments' precise needs and wants.

For example, a chocolate-based drink may have a central positioning of

nutrition. This could be presented as an energy-giving drink for active
people, a dietary supplement for the elderly who have trouble eating
many solid foods, an essential growth supplement for youngsters, and a
relaxing drink for tired people before they go to bed. By appealing to
these various segments, we have not stepped away from the central
positioning.

Brand Development
Smaller companies, with local and regional markets, often accept the
dominance of large, national brands in their marketplace. All too often
they assume that good branding and targeted marketing is either too
complex or too expensive to be within their reach.

It is easy to conclude that only a big company can build a cogent Brand.
But this is not true. Every enterprise has a Brand under which it conducts
its business, and thus, existing brand equities and competencies. These
assets can be leveraged to build Brand Equity, steal share from big
players, prevent the encroachment of new entrants, and achieve
marketplace success.

Wise brand managers, those who do not reduce their competitive strategy
to price driven approaches, can obtain the necessary elements of Strategic
Brand Management and thus equip their Brand for long-term marketplace
success. This is most successfully accomplished by positioning the Brand
for sustainable competitive advantage, and by developing an intelligent
Brand Strategy that guides ongoing marketing activities and expenditures.

It is through this kind of strategic thinking, and the formalization that

emerges from it, that a small player gains competitive strength and
succeeds against large branded players.
 CHAPTER 2

Types Of Branding
1) Innovation Brands
a) Adidas: the performance brand
b) Sony: the pioneer brand
c) Xerox: the research brand
d) Mercedes-Benz: the prestige brand
e) Durex: the safe brand

2) Pioneer Brands
a) Heinz: the trust brand
b) Colgate: the total brand
c) Gillette: the shaving brand
d) Ford: the volume brand

3) Muscle Brands
a) IBM: the solution brand
b) Wal-Mart: the scale brand
c) Nike: the sport brand
d) Starbucks: the postmodern brand

4) Distinction Brands
a) Pepsi: the differentiation brand
b) Timex: the durability brand
c) Duracell: the longer lasting brand

5) Status Brands
a) Rolex: the superior brand
b) Gucci: the exclusive brand
c) BMW: the defining brand
d) Louis Vuitton: the desirable brand

6) People Brands
a) David Beckham: the icon brand
b) Jennifer Lopez: the superstar brand
7) Responsibility Brands
a) Johnson & Johnson: the crisis management brand
b) Hewlett-Packard: the employees brand
c) Cafedirect: the fair-trade brand

8) Broad Brands
a) Yamaha: the ignored brand
b) Caterpillar: the rugged brand
c) Virgin: the elastic brand

9) Design Brands
a) Volkswagen: the longevity brand
b) Audi: the advancement brand

10) Consistent Brands

a) Budweiser: the targeted brand
b) Coca-Cola: the ultimate brand
c) Nivea: the continuity brand

11) Advertiser Brands

a) Calvin Klein: the sex brand
b) Absolut Vodka: the advertising brand
c) Benetton: the colour brand
d) Diesel: the ironic brand

12) Distribution Brands

a) Avon: the resilient brand
b) Dell: the direct sales brand
c) Amazon: the e-shopping brand
d) Domino’s Pizza: the home delivery brand

13) Speed Brands

a) FedEx: the ‘first’ brand
b) Google: the search brand
c) CNN: the information brand
d) Hotmail: the viral brand

14) Evolution Brands

a) Bacardi: the carribbean brand
b) HSBC: the acquisition brand
c) Intel: the educating brand
d) Samsung: the rising brand
 Chapter 3

Importance of brands:

A global brand is one which is perceived to reflect the same set

of values around the world. In the example of the children's
toothpaste, the "pat on the head" is only an execution device to
express the parent's appreciation for the child's action, and
corresponds to a set of brand values such as: "Likes children and
helps them to be more self-reliant in taking care of their
hygiene; Is appreciative of the concern parents have for their
children's hygiene," etc. If, in a particular market, a
communication device does not work as well as in other markets, it
can (and should) be replaced with one that communicates the
intended set of values or "brand character" which form the
backbone of a global brand strategy.

Branding, be it global or domestic, can be explained with the

following metaphor: Long term brand loyalty is akin to getting the
consumer to marry a brand and requires that the marketer provide
the same set of information one needs to decide upon marrying a
person, i.e. information about the physical attributes, the style
and the character of the brand.(See footnote)

Physical attributes (e.g. how well does the product perform, how
competitive is its price, etc.) may require some adaptation to
local market conditions and culture: A US laundry detergent (which
does not contain perborate) may not satisfy a European housewife,
used to washing her laundry at near-boiling temperatures; Green
monochrome computer monitors may not satisfy the German hacker,
who prefers an amber screen. Physical attraction is in great part
determined by culture: Beauty-enhancing tribal markings might not
make you more attractive in Peoria...

Style (i.e., how the physical-attributes message is delivered) is

even more rooted in culture. Germans, whose ad culture grew from
magazines, want hard facts. Latin cultures are inclined to imagery
and may resist hard sell. Asians are sensitive to symbolism,
Britons to humor, etc. There is some truth to these generalities,
even though the rules are often successfully broken.
Character communication is the key element of branding and the
backbone of a global branding strategy. It requires an absolute
consistency of purpose which one can only achieve by having, at
the onset of the communication planning, a very clear idea of the
set of values to be linked to the brand. A McDonald's commercial
from the US, Germany, Brazil or Japan is readily recognized as a
McDonald's commercial, even though it may have been produced
locally, and by a different ad agency. It will consistently convey
some or all of the values (service, friendliness, understanding of
family life etc.) which are attached to the company.

Global marketers need to first write a thorough and sustainable

Brand Strategy which lists the character traits intended for the
brand. Then they should set up an organization which can tactfully
direct, teach and evaluate the brand's communication to ensure
consistency while at the same time preserving the autonomy (and
thereby the quality) of local management.

After this they may give them selves a big pat on the back.
Except, of course, for the back of the British manager who might
be offended by this excessive familiarity...

The Power of Brands

Paul Temporal

The Economist magazine called 1988 "The year of the brand". It was the
year Phillip Morris took over Kraft in the US and Nestle bought
Rowntree in Europe. Phillip Morris paid four times the value of the target
company's tangible assets and Nestle over five times.

In 1988 just four brands were sold for US$50billion. Such incredible
payments for "names" were a reflection of the value placed on the brands
in terms of long term profit expectancy.

Since then the trend has continued and the power of brands to command
colossal prices has become much more noticeable.
The question is, how is it that brands can deliver such spectacular
rewards? The answer - it's all in the mind!

How brands influence people

The first thing to recognise when we talk about brands is that they are not
just names, terms, symbols, designs or combinations of these, although it
is true to say that such things can and o differentiate certain products and
companies from others.

The additional ingredient that makes a successful brand is personality.

Today's leading brands are personalities in their own right and are well
known in all societies and cultures as film heroes, cartoon characters,
sports stars or great leaders.

In Asia, Coca Cola, Sean Connery, Nestle, Sony, Batman, Mercedes and
Michael Jackson are equally well known. Thousands of people relate to
brand personalities in the same way as they do to human personalities.

There is, of course, a psychological basis to this, and the psychology

behind brands really stems from Carl Jung's work where he described the
four functions of the mind - thinking, sensation, feeling and intuition.

The secret to successful branding is to influence the way in which people

perceive the company or product, and brands can affect the minds of
customers by appealing to those four mind functions, or combinations of
them. This is how it happens.Some brands appeal to the rational part of a
person, to the elements of logic and good sense (the thinking dimension)
such as toothpaste which prevents decay and cholesterol-free foods.
Others appeal to the senses of smell, taste, sight and sound such as
fashion and cosmetic products.Some brands attract the emotional part of
people appealing to the feelings' dimension to which consumers react
with feelings of warmth, affection and belonging. Products such as
Harley-Davidson motorcycles and companies like Benetton with its
global village branding exemplify these.

Then there is the strange phenomenon of intuition. Some companies and

products are attractive to people who intuitively feel comfortable with
them, because they see these brands as an extension of themselves, a
good fit to their personality, lifestyle, aspirations and behviour --
companies like the Body Shop, with its environmental approach.
Brands influence consumer decisions to buy in any of the above ways, or
through combinations of them, sometimes with tremendous persuasive
appeal.

The Marlboro brand personality is a good example of how a company

understands and combines the physical and emotional elements that
appeal to certain customers who live or would love to live a certain
lifestyle. Products such as gold credit cards, watches or prestige items
help people to express themselves to others by demonstrating that they
are different and have achieved something. They act as extensions of the
personality, so it really is "all in the mind", and the key to brand
management and development is a clear understanding of what benefits
the customer is looking for.

Ask consumers what comes to mind when they hear the name of a big
brand such as BMW or Gucci and they will reply with a list of attributes
which go far beyond the physical tangible aspects of product and
delivery, but if there is one word which brings all these things together in
people's mind, it is value.

Time and again, research shows that the real driving force behind market
leadership is perceived value - not price or inherent product attributes. As
long as a brand to offer customers superior perceived value, then good
market performance will follow, which makes consistency a highly
important feature of brand behaviour.

People prefer to buy brands

Brands are also successful because people prefer them to ordinary
products. In addition to the psychological factors already mentioned,
brands give consumers the means whereby they can make choices and
judgements. Bases on these experiences, customers can then rely on
chosen brands to guarantee standards of quality and service, which
reduces the risk of failure in purchase.

Today's world is characterised by more complex technology, and this can

be extremely confusing to people who are not technology minded. Brands
can play an important role here by providing simplicity and reassurance
to the uninitiated, offering a quick, clear guide to a variety of competitive
products and helping consumers reach better, quicker decisions.
Product or corporate branding?
This is the question that most companies have to consider sooner or later,
and there is no obvious answer, as success can be achieved by adopting
either route, or a mixture of the two.

With product branding, the company gives each product a brand name
and there is little or no attachment of the company relationship. Each
brand has to compete on its own merit, such as Pizza Hut which normally
operates without any endorsement from parent company Pepsico.

The trend nowadays seems to be going in the opposite direction, however,

with many companies opting for either pure corporate branding or house
branding. With corporate branding the company uses one brand - usually
the company name - for all its products and services, as in the case of
IBM. If a company uses what is often referred to as house branding, the
individual products are separate identifiable brands but the overall
company brand is used as an endorsement of origin and quality. This is
often the preference for motor car manufacturers, the hospitality sector
and financial institutions.

Corporate branding encompasses image and identity building, an activity

now being pursued by many Asian companies.

Trying to build organisations with an inspirational mission to acquire and

keep customers is currently a major objective for the new, successful
organisations here. If done well, it certainly helps give consumers in
many market segments consistent, controlled messages. It can also be
beneficial in helping companies defend themselves against acquisition -
or the reverse!

Brand values - hub of the corporate wheel

A company's advertising, promotion, changes in name, new logo design

or other activities will not successfully build a brand unless there are
certain well-defined values which are consistently communicated and
demonstrated by the company which are recognised and appreciated by
customers.
Once brand values have been identified, they should drive all other
activities impacting on customers and be used to achieve consistency,
which is so meaningful to consumers. All aspects of marketing and
communications should reflect the brand values, as should company
employees in demonstrating those values in their behaviour to customers.

The rewards of brand

Building a brand is a corporate strategic issue and not a short-term
tactical activity.

For companies wanting to satisfy the needs of consumers and beat the
competition, then building a brand provides an opportunity which, if
realised, could do not only this but also defy the test of time - for brands
have no limit to their life expectancy.

Many brands established in the 1930s are still the top brands in the late
'90s. From Coca-Cola to Colgate, Kelloggs to Kodak, we see many
examples of the big brands successfully having defended their number
one position in their chosen markets and they, along with other famous
names, have become synonymous with their industries.

Brand loyalty also means that companies achieve a greater consistency of

demand through customer retention. Over time, good brand strategies
generate the production volume which gives the economies of scale
necessary to have a favourable impact in unit costs. In turn, this allows
companies to achieve higher margins, putting them in a winning situation.

Brand resilience can help companies ride out stormy weather, as with
Mercedes in 1982, when other car manufacturers around the world
suffered disastrous sales, apart from Mercedes which continued to sell
well: often up to 50 per cent more than other European competitors. And,
because of the magnetic influence they have over purchasing behaviour,
successful brands allow companies to charge premium prices for their
products and services, which of course generate higher profits. Surveys
indicate that brand leaders can return a margin four to six times that of the
closest competitors.

Brands can even assist moves across industries to penetrate new markets.
Dunhill is an excellent example of this. Formerly based in the declining-
image industry of tobacco, Dunhill is now firmly established
internationally in upmarket clothing, toiletries and fashion accessories.
Shorter Life Cycles
Another factor that has awoken technology companies to the fact that
branding is important is the relentless decline of product life cycles,
which have now reduced to a matter of weeks from what used to be years.
In fact, some Japanese companies are now working on product life cycles
of 6-8 weeks. Faced with such frightening product change, and with
competitors continuously bringing new products to market and enhancing
others, brands are literally the only thing that represent stability to both
companies and consumers. In fact, there is a dawning realization now
amongst technology companies that brands need not have life cycles -
that they can last indefinitely. This is a massive attraction.

Return on Investment
Pouring money into technology can be the wrong move unless you have a
brand that really stands for something in the minds of consumers, and
technology investment demands high returns. The powerful brands
provide both consumer trust and high returns. Consumers will not buy
from companies that do not have a good brand image, particularly in
technology markets where the products are relatively complex and often
not fully understood. They will only buy trusted brands. Developing a
brand is not cheap, but the returns can be spectacular. Strong brands can
command premium prices wherever they choose to go, and can often be
worth more than the net asset value of the business enterprise.

Branding is more important for hi-tech companies

The accelerating and turbulent nature of technological change poses
problems for those trying to establish, develop and manage their brands.
Technology-based companies are faced with perpetual change, and this
seemingly goes against the whole basis of branding, which is consistency.
So one of the dilemmas for hi-tech companies is how to balance the two.
An additional problem is product parity. In a world where anything
physical can be copied with amazing speed, there is little room for the
traditional unique selling proposition. Launch a new product on the
shelves, and your competitors will have a similar one, possibly improved,
in a relatively short space of time.
Lastly, the cautious nature of consumer decision-making with regard to
technology products makes life more difficult when trying to persuade
them to buy. In these circumstances, which appear to be intensifying,
branding becomes even more important. A good brand will help
overcome all of these problems, whilst poor branding will only make
things worse.

So it is time for technology companies to venture into branding in a

significant way. With a strong brand comes market power. It is all very
well to have a good quality product or service (in fact it is essential to
survival), but it is your brand that will make your company stand out
from the crowd in what are now very congested markets. It is as well to
remember that quality can be copied to, and that, whilst you will never
develop a powerful brand without the quality element, this alone will
never be enough to differentiate your company, product or service from
the competition.

As far as the Internet is concerned, with 50 to 60 software companies

starting up each month in Silicon Valley alone, and over 10 million web-
sites out there in cyberspace, the hi-tech marketplace is becoming like a
busy main road in the rush hour. Not only does branding matter in the
new hi-tech world, it is even more important than in the traditional
consumer products markets. For the Internet and software businesses,
branding is an essential pre-requisite for market entry; gone are the days
when a company could take its time to develop a brand. Only a strong
brand will help hi-tech companies to survive through immediate and
lasting differentiation.

It is becoming increasingly common to see brands from different

companies appearing together in the same campaign or specific
communications. A catalyst for this has been the recent recession, because
by embarking on joint advertising and promotion campaigns, there is an
obvious cost-saving element. However, there can be other advantages as
well, such as gaining access to the customer base of the co-branding
partner or partners, and building value-added packages for consumers.
For example, Coca-Cola, music company Capital Artists, and Henderson
Land Development launched a HK$100-million campaign called Red
Passion in the hope of getting consumers to buy more soft drinks, music,
and hopefully residential properties. Coca-Cola has also teamed up with
some book publishers to package books with its diet products. Visa
International has a marketing agreement in the Asia Pacific with Yahoo!
Inc. to offer on-line shopping.
McDonald's teamed up with the owners of Snoopy, the famous cartoon
character, where the purchase of a McDonald's Extra Value Meal allowed
people to obtain a Snoopy toy in the costume of that country or a U.S.
state.

Many more examples can be seen worldwide, but the key question for
brand management is whether being associated with other brands
represents a good brand fit or not. In other words, a company has to be
very sure that the symbiotic relationship will not devalue its brand.
Associating with a brand that has different brand values could certainly
do this. There is also the question of whether there is a good fit with the
respective customer bases. Coca-Cola's association with Henderson Land
Development might have addressed totally different customer bases, but
the company associated itself with a declining property market. On the
other hand, Coca-Cola's research shows 30% of Diet Coke drinkers read
books, so the tie-up with the book publisher might make sense. Visa
International and Yahoo! have a good overlap of customer bases, while
McDonald's and Snoopy are both providing value for money and fun for
families.

The secret to successful co-branding is to stay true to the brand

personality and values, and to choose partners carefully-partners who not
only share some of those values, but target similar consumer segments to
which value added packages will appeal. Finally, when co-branding
insure that the brand does not get eclipsed in advertising and promotions
by the brand or brands with which it is being associated. Ensure that the
brand gets a good share of mind!

All forward-looking companies now regard positioning as the heart of

competitive strategy. As the ultimate aim of any business strategy is to
satisfy the customer, gaining a valued position in the minds of customers
is essential. Some people argue that branding is really positioning, stating
that unless a brand has a position, it has no unique value in the minds of
consumers. You can establish a brand personality, and through precise
market segmentation identify and reach your target audience, but what
links them together is positioning the brand in the minds of that audience.
But, what is a position and how do you arrive at a good strategy for
achieving one?
The branding process seeks to create a unique identity, for a company,
product or service, which differentiates it from the competition. And
every brand has to have a strategic platform. One half of that platform is
created by carefully formulating a distinct brand personality, which
makes the identity of the brand unique. The other half of the strategic
brand platform is positioning. Positioning is critical to brand building
because it is responsible for projecting the brand identity and creating the
perception and image of the brand in people's minds. In other words,
positioning is the process of offering the brand to the consumer. It is
positioning that makes the brand appear to be different and better than all
competing brands. The key points to note about positioning are:

 it is a strategic, not a tactical, activity

 it is aimed at developing a strategic, sustainable competitive
advantage
 it is concerned with managing perceptions
 brand image and reputation are the result of the positioning process

Positioning is normally carried out using brand communications, but

sometimes it is tempting for companies to try and step away from the
brand position in an attempt to reach a different target audience. So can a
brand only position itself in one way? How many positions can a brand
have?

Positioning is the outward expression of a brand, and the reality,

therefore, is that a brand can only have one true position. As positioning
presents the identity and personality of the brand to the outside world, a
multiple personality would seem odd at the very least, and at worst,
schizophrenic. Consumers make brands famous for many reasons, of
which the most important is that they come to trust brands as friends.
That is why deciding on the brand-positioning strategy is such an
important part of brand strategy. However, there are ways in which the
brand may be presented differently to various target audiences. The
success of this depends on an accurate judgment of the segments that
exist in the market, and the segments' precise needs and wants.

For example, a chocolate-based drink may have a central positioning of

nutrition. This could be presented as an energy-giving drink for active
people, a dietary supplement for the elderly who have trouble eating
many solid foods, an essential growth supplement for youngsters, and a
relaxing drink for tired people before they go to bed. By appealing to
these various segments, we have not stepped away from the central
positioning.
Many of the world's most powerful brands spend a great deal of time
putting personality into their brands. It is the personality of a brand that
can appeal to the four functions of a person's mind. For example, people
make judgments about products and companies in personality terms.
They might say, "I don't think that company is very friendly," "I feel
uneasy when I go into that branch," "I just know that salesmen is not
telling the truth about that product," or "That offer doesn't smell right to
me." Their minds work in a personality driven way. Given that this is
true, then how can a company create a personality for its product or for
itself? The answer lies in the choice and application of personality values
and characteristics.

Imagine a person as a brand. She may be around 28 years of age, have

fair features, a small build and be pleasant-looking. These would be
similar to a product's features. When you get to know her a little better,
your relationship may deepen, and you will be able to trust her, enjoy her
company, and even miss her a lot when she is not around. She is fun to be
with and you are strongly attracted to her values and concerns. These are
emotions similar to the associations which people develop with brand
personalities. People, generally, like people. So, if a personality can be
created for a brand, it will be easier to attract consumers to the brand. As
brands grow, as do human relationships, it is the emotional dimension
that tends to become dominant in loyalty. Personality grows brands by
providing the emotional difference and experience.
 CHAPTER 4

Brand Strategy:

Branding and culture - The strategic winning

combination

One of the biggest implications of globalization for companies seeking to

expand to foreign shores is the task of balancing standardization with
customization. From a branding perspective, this issue assumes even
more significance. When some of the world’s biggest brands expand
beyond their home markets, they are tempted to repeat their tried and
tested formula in the new market as well. In fact this has been the path
followed by many brands. The assumption in such a case is that
customers would be too eager to consume the great brand because of its
authenticity, heritage and associations.

Brands as channels of self expression:

Brands in the current globalized world signify more than just products
with recognizable logos. Brands have transcended the commodity trap
and have seeped into peoples’ lives in many aspects. Brands have come to
signify avenues through which people tend to express their personalities,
attitudes, likes and dislikes, association to groups/ communities and so
on. As such, brands succeed if they offer customers opportunities to
express. Being global brands with entrenched identities and personalities
and still be able to adapt to local demands is a Herculean task. The
following steps would facilitate brands to make a smoother transition:

1. Understand the local market:

Companies would do themselves a huge favor if they do not generalize
the markets based on some superficial parameter. Each market has its
own subtleties, unique characteristics and customer preferences. Many of
these unique characteristics are deeply inspired by the cultural
underpinnings of the society. To understand these underlying parameters
would allow companies to effectively target the customers.
2. Finer segmentation for faster adaptation:
Markets by nature are known for their multiple segments. Segmentation
though a very basic exercise in marketing, is indeed one of the
fundamental tools that can equip a company to effectively channel its
resources. With emerging economies integrating into the global market,
the diversity is bound to multiply. This not only offers companies a huge
increase in potential customers but also an opportunity to segment finer
and leverage the market situation. Based on the product category, the
product line, the brand strategy and the availability of channels,
companies must decide on the segment that they wish to target.

3. Channels:
A strategic brand component: In many markets, reaching the customer at
the right place at the right time differentiates success from failure. In
China and India, channel management is the key to success. Many global
brands that are used to huge supermarket chains such as Wal-Mart, Sears,
K-Mart and others tend to think in similar terms in foreign and
developing markets as well. In many Asian markets unorganized retail
still dominates. In such scenarios, global brands would succeed if they
recognize the criticality of building strong channels and adapting their
model to ground realities in the market they are present.

4. Bottom of the pyramid customers:

In spite of the growing economy and increasing spending power,
emerging markets and still developing countries are characterized by a
sizeable bottom of the pyramid segment. This segment mainly consists of
customers who are gradually aspiring to integrate into the main stream.
They are low on resources but high on aspirations and ambitions. This
segment also shows the promise of being a very lucrative segment in the
long run. But majority of this segment are not ready to pay high prices.
Customers always look for a proper quality-price balance. Customers in
this segment seek products that offer considerably good quality at an
affordable price. This poses new challenges for global brands that are
used to offering customers either a highly priced high quality products or
low priced goods with an average quality.
Further, with many local brands in many countries already offering
products with quality comparable to global brands but with half or even
one third the price, the success of global brands depends on their ability
to adapt to the local conditions and respond to the local demands.

5. Global brands’ local act:

Developing countries are finally seeing light at the end of the tunnel.
Countries especially in Asia are in a boom phase. The economies are
booming, global trade has increased, technical and knowledge
outsourcing has given birth to millions of jobs, disposable income is on
the rise and governments have taken the lead to integrate many such
countries with the global economy. These factors have led to the
emergence of customers who no longer look to the West to build an
identity. These customers are confident and satisfied with many local
brands. Though these customers do like and purchase many global
brands, they also have a strong preference for many local brands that
have managed to provide high quality products with a distinct local feel.
This once again compels the established global brands to balance the
global identities with local subtleties. This balance will allow global
brands to be successful.
These guidelines will facilitate a smoother transition for global brands
into localizing part of their experience to suit the local subtleties in order
to attract and retain the local customer. Further, these guidelines will also
offer global companies reason to think about the possible challenges that
a complete lack of localization will bring to the fore. Unilever and Nokia,
two global giants have also proved the point discussed in this article by
glocalizing and winning in their game.
Unilever is a classic example of a global brand which has pioneered
serving the locals with products that address the local sensitivities.
Unilever’s Indian subsidiary Hindustan Level Limited (HLL) has been
the leader in recognizing the tremendous opportunity lying at the bottom
of the pyramid. The customer base that aspires to consume products but
in smaller quantities and at lesser prices. HLL literally invented the
shampoo sachets – small plastic packets of shampoo for as less as INR 1
(USD0.022). This became such a rage among the rural consumers that
many other brands started offering products such as detergent, coffee and
tea powder, coconut oil and tooth paste in sachets. Even though the unit
price was higher, rural consumers were able to afford to purchase the
smaller quantity at their convenience.
Another example is of the leading mobile brand Nokia. Nokia also
recognized the growing importance of rural customers in the Indian
mobile telephone market which grew from a mere 300,000 subscribers in
1996 to a whopping 55 million subscribers in 2004. Nokia introduced its
dust-resistant keypad, anti-slip grip and an inbuilt flash light. These
features, albeit small, appealed to a specific target of truck drivers
initially and then to a broader segment of rural consumers. These features
endeared Nokia to the Indian consumer as Nokia displayed a genuine
commitment in responding to local customer needs.

Creating Brand Personality

Whether a brand is a product or a company, the company has to decide
what personality traits the brand is to have. There are various ways of
creating brand personality. One way is to match the brand personality as
closely as possible to that of the consumers or to a personality that they
like. The process will be

 define the target audience

 find out what they need, want and like
 build a consumer personality profile
 create the product personality to match that profile

This type of approach is favored by companies such as Levi Strauss, who

research their target audience fastidiously. For Levis the result is a master-
brand personality that is:

 original
 masculine
 sexy
 youthful
 rebellious
 individual
 free
 American
A related product brand personality (for a specific customer group) such
as Levi's 501 jeans is:

 romantic
 sexually attractive
 rebellious
 physical prowess
 resourceful
 independent
 likes being admired

Both profiles appeal mostly to the emotional side of people's minds - to

their feelings and sensory function. This profiling approach aims to
reinforce the self-concept of the consumers and their aspirations. The
approach is ideal for brands that adopt a market-niche strategy, and can
be extremely successful if a market segment has a high degree of global
homogeneity, as is the case with Levis.

Asian companies need to work harder at managing the personality aspect

of branding. One example of how an Asian company is doing this well,
and linking Asian values to personality is Asia Home Gourmet, shown as
this month's case study.

Adding personality is even more important if the task is to create a

corporate as opposed to a product brand, as every encounter with the
customer gives the opportunity to put across the brand personality.

The CEO drives the brand

In the next five years, we will see a rapid changing landscape across the
globe, where the opportunities for businesses to benefit from corporate
and product branding efforts will be larger than ever before.

The growing emphasis on branding will move up the boardroom agenda

and VentureRepublic strongly believes that branding will become one of
the most prominent drivers of value across the globe in the next two
decades. Businesses with a sustainable business model and with a
visionary and passionate CEO with branding talent will benefit from the
rising opportunities for competing in the modern market place and
potentially taking on the global scene.
It needs to be no less than the CEO who embodies the branding efforts
and serves as the company's and thereby the brand's primary advocate and
nurturer. The approach is particularly well suited to companies whose top
executives have a passion and talent for brand strategy, but in tomorrow's
tough environment all top-executives must be able to represent and lead
the brand. World-class companies like Sony, Virgin, Starbucks, Microsoft,
Nokia, Giorgio Armani, Singapore Airlines, LVMH, L'Oreal and Nestle
all meet that description. Their top executives are directly involved in
leading the branding vision, strategy and implementation, and spend a
significant amount of their work hours to drive their brands forward and
to achieve even better results.

Tomorrow's CEO must be a brand champion who leads corporate and

product branding strategies, all strategic brand-portfolio decisions and
constantly monitors the implementation of the brand locally, regionally
and globally. A strong CEO has credibility and respect not only because
of business talent and organizational power but also because of the depth
of experience, knowledge, and insight. A suggestion from a visionary
CEO with branding talent and managerial experience in branding and
marketing is the key driver of the branding efforts and results in any
successful organisation - internally and externally.

But having the branding know-how and sophisticated marketing

technology is no longer adequate. The modern business leader needs to be
a complete player, who covers a broad range of managerial capabilities
and experiences, and have the vision to constantly monitor and improve.
Being a marketing wizard is no longer enough. One also has to be an
excellent business leader and a passionate brand marketer with a truly
international edge.
10 steps to successful Corporate Branding

Corporate branding is a potentially strong tool for re-aligning a corporate

strategy and ensures that the corporation - big or small - is leveraging
adequately on the un-tapped internal and external resources.
VentureRepublic believes - and our experience across clients shows - that
a strong CEO and a dedicated management team are always seeking to
raise their own bars and be change agents for their corporations backed
by a strong corporate branding strategy. A well-drafted and professionally
managed corporate branding strategy and implementation plan can be a
powerful component of the board room work.
VentureRepublic has identified 10 crucial steps on the way to a successful
corporate branding strategy, and they can serve as a useful guide for any
corporate branding project.

1. The CEO needs to lead the brand strategy work

The starting point for corporate branding must be the board room, which
is also serving as the most important check-point during the project. The
CEO must be personally involved in the brand strategy work, and he/she
must be passionate and fully buy into the idea of branding. To ensure
success despite the daily and stressful routine with many duties at the
same time, the CEO must be backed by a strong brand management team
of senior contributors, who can facilitate a continuous development and
integration of the new strategy.

2. Build your own model as not every model suits all

All companies have their own specific requirements, own sets of business
values and a unique way of doing things. Therefore, even the best and
most comprehensive branding models have to be tailored to these needs
and requirements. Often, only a few but important adjustments are needed
to align them with other similar business models and strategies in the
company to create a simplified toolbox. Remember that branding is the
face of a business strategy so these two areas must go hand in hand.

3. Involve your stakeholders including the customers

Who knows more about your company than the customers, the employees
and many other stakeholders? This is common sense, but many
companies forget these simple and easily accessible sources of valuable
information for the branding strategy. A simple rule is to use 5% of the
marketing budget on research and at least obtain a fair picture of the
current business landscape including the current brand image among
stakeholders, brand positioning and also any critical paths ahead. Simply
do not forget the valuable voice of your customers in this process.

4. Advance the corporate vision

The corporate branding strategy is an excellent channel for advancing the

corporate vision throughout the company. It allows the management to
involve, educate and align everyone around the corporate objectives,
values and future pathway. It provides a guiding star and leads everyone
in the same direction. The internal efforts are at least 50% of making a
corporate branding strategy successful.
5. Exploit new technology

Modern technology should play a part of a successful corporate branding

strategy. Technology helps to gain effectiveness and improve the
competitive edge of the corporation. A well-designed and fully updated
Intranet is a must in today's working environment which has become
increasingly virtual with employees working from home, from other
locations and traveling across the globe to name only a few factors. An
Extranet can facilitate a much more seem less integration with strategic
partners, suppliers and customers, avoid time consuming paper work and
manual handling of many issues. A company website is not only a must,
but rather a crucial channel for any modern corporation regardless of size.
If the corporation is not accessible on the Internet, it does not exist! The
more professional the website, the better the perception among the
Internet savvy modern customer. Gone are the days where corporations
could get along with a business card portrayed on the Internet.

6. Empower people to become brand ambassadors

The most important asset in a corporation is its people. They do interact

every day with colleagues, customers, suppliers, competitors and industry
experts to name a few. But they also interact with an impressive number
of people totally disconnected to the corporation in form of family
members, friends, former colleagues and many others. Hence they serve
as the corporations most important brand ambassadors as the word-of-
mouth can be extremely valuable and have great impact on the overall
image of the corporate brand image. The most effective way to turn
employees into brand ambassadors is to train everyone adequately in the
corporate brand strategy (vision, values and personality etc.) and making
sure they fully understand - and believe! - what exactly the corporation
aims at being in the minds of its customers and stakeholders. Nike is a
brand which is known for their efforts into educating and empowering
everyone employed by the company to be strong brand ambassadors.

7. Create the right delivery system

The corporate brand is the face of the business strategy and basically it
promises what all stakeholders should expect from the corporation.
Therefore, the delivery of the right products and services with all the
implications this entail should be carefully scrutinized and evaluated on
performance before any corporation starts a corporate branding project.
Think of the cradle to grave concept of a lifelong customer and the value
he/she will provide in such a time span.
Make sure he/she is handled with outstanding care according to internal
specifications and outside expectations. The moment of truth is when the
corporate brand promise is delivered well - and it does not hurt if the
corporation exceeds the customer expectation. Singapore Airlines runs a
very rigid, detailed and in-depth description of any customer touch points
with the corporation, and several resources are spend on making sure it
actually does happen every time to every customer. All employees
regardless of title and rank from Singapore Airlines spend a not
insignificant amount of workdays being trained every year.

8. Communicate!

Bring the corporate brand to life through a range of well-planned, well-

executed marketing activities, and make sure the overall messages are
consistent, clear and relevant to the target audiences. Make sure the
various messages are concise and easy to comprehend. Do not try to
communicate every single point from the corporate branding strategy.
Instead, a selective approach will make much more impact using the same
resources.

9. Measure the brand performance

A brand is accountable and so should a corporate brand be. How much

value does it provide to the corporation and how instrumental is the brand
in securing competitiveness? These are some of the questions which need
to be answered and which the CEO will automatically seek as part of
his/her commitment to run the strategy successfully. The brand equity
consists of various individually tailor-made key performance indicators
(including the financial brand value) and needs to be tracked regularly. A
brand score card can help facilitating an overview of the brand equity and
the progression as the strategy is implemented.

10. Adjust relentlessly and be ready to raise your own bar all the times

The business landscape is changing almost every day in every industry.

Hence the corporation needs to evaluate and possibly adjust the corporate
branding strategy on a regular basis. Obviously, a corporate brand should
stay relevant, differentiated and consistent throughout time, so it is a
crucial balance. The basic parts of the corporate branding strategy like
vision, identity, personality and values are not to be changed often as they
are the basic components. The changes are rather small and involve the
thousands of daily actions and interpersonal behaviors, which the
corporations employ as part of the brand marketing efforts.
 But make sure complacency does not take root in the organisation and
affects the goal setting. The strong brands are the ones which are driven
forward by owners whom never get tired of raising their own bars. They
become their own change agents - and brand champions for great brands.

Brand Flexibility
Do you know how flexible your brand is?
Many marketers face, at one time or another, a decision involving brand
flexibility: Should a new product be placed under an existing brand's
umbrella, or should it develop its own stand-alone brand? For example,
should Coca-Cola be used to brand a pair of jeans? Would Nike be a good
brand name for a sports drink? In fact, I can't think of another kind of
branding issue that arises as frequently as that one.

A few weeks ago, I visited a medium-sized food company. I'll call it

"Company X" to preserve its anonymity. Company X's sales are centered
around one product line and include several preparations of the same
ingredient. It uses the company name as its brand name. The Company is
successful and appears very profitable and has ambitious growth plans
based on the introduction of several new products. It has even hired smart
and experienced marketing people to formulate and position those
products. So far, so good.

But Company X isn't sure about whether it should market its new
products under its current brand name or a new one, yet to be created.

Using the current brand name has some advantages. The brand enjoys a
good level of awareness and a positive image. Its product distribution is
good. Using the existing brand name would reinforce shelf impact for the
entire line, etc. On the other hand, the current brand's equity may not
translate to new products not based on the ingredient for which the brand
is known. Some fear that using the brand name as an umbrella covering
an expanded product line could "dilute the brand."

Both sides have a well-rationalized set of arguments. Those with a

restrictive interpretation say that because the brand's equity has been built
over 50 years around products based on the one ingredient, using the
same brand name for products made without the ingredient would only
confuse the consumer about what the brand stands for.
This confusion could weaken the established brand. Furthermore, the
brand equity may not translate well to products without the ingredient so
that there could be little benefit to using it. An illustration of the new
product strategy that they promote is the Arm & Hammer product line.
The company is known as a brand of baking soda. It now markets a great
variety of products in many categories, from laundry detergent and
toothpaste, to pet deodorant and air freshener. All of its entries contain
baking soda as key ingredient.

Those with a flexible view of brand equity find comfort in consumer

research where they see proof of their brand's flexibility. They point out
that consumers, when presented with new product concepts and told the
brand name, readily accept their more liberal interpretation of the brand.
They see this as permission to explore new product development in a
broad range of categories, with and without the ingredient. The kind of
strategy they promote resembles that of Green Giant. That brand,
originally named after a green pea hybrid, is now used for products that
are neither peas nor green...

The issue isn't new. It is faced by all those who have to introduce new
products and by those who have acquired a company with branded
products. Does the new product need a new brand name or should it be
placed under the umbrella of an existing product? Should the acquired
product line stand on its own brand or should it be using an endorsement
from the new corporate parent? One of the many complications is that the
issue should not be viewed in the sole context of the new brand or new
product but also in the context of the existing brand. How will it be
affected? Will it suffer "dilution"?

When faced with this situation it may help to keep in mind the following:

1. Brands are associated with a set of values, seldom with a specific

ingredient. There are a few exceptions like Arm & Hammer and
NutraSweet. But, generally, values is what defines a brand. A brand like
Starbucks for instance is associated with coffee. But, more than just the
ingredient, it stands for expertise in bean selection and roasting, high
quality, competent staff, young professional crowd, a pause during a busy
day, etc. If there was another product that could benefit from the same
values, it could fit right in. Cigars or cognac could come close but have
their own set of problems.
2. Umbrella branding is a very efficient brand scheme. A paper published
in McKinsey Quarterly (1999 #2) under the title "Brand Leverage"
concludes that strong brands that are used across product categories
produce shareholder return on equity that is 5% above the average for
their industry (vs. only 1% above for un-leveraged strong brands). A
strong umbrella brand can help a new product generate faster distribution
and trial. On the other hand, umbrella brands are weakened when they are
used for sub-par products or products that fail - an unavoidable risk with
new product introductions. They also make consumer research more
difficult, in part because of the high level of false awareness they
generate. The effect of advertising copy on consumer behavior is thus
more difficult to evaluate because it tends to benefit the entire brand as
opposed to the one new product that is advertised. In our experience,
these are but minor inconveniences well made up for by the higher trial
and advertising efficiencies that result from a well-conceived umbrella
brand.

The best and possibly the only tool you need is a very clear idea of what
values the brands involved stand for. In fact, if this is the only thing you
do, you should write a brand strategy for your own brands and for the
brands you wish to acquire before you make any branding decision and
preferably before an acquisition takes place. Why?

Just imagine you are a manager at Unilever, in charge of managing the

recently acquired line of Ben & Jerry premium ice cream. You notice that
the B&J product line doesn't include plain chocolate or strawberry ice
cream even though these flavors rank two and three in the ice cream
market! Quick, reach for your Ben & Jerry Brand Strategy! Up until a
few months ago, the B&J brand strategy seemed to mandate that all its
products must "contain something unexpected and original." The brand
opted for the creative product formulations that this edict imposed and it
did quite well. In that context, your plan to introduce plain chocolate or
strawberry flavors, a plan which may make marketing sense, doesn't
make branding sense.

But, as is the case with many other marketers, the B&J brand strategy
was never formalized and existed mostly in the minds of its founders. As
they became less involved with day-to-day management of their brand,
the informal edict faded.

The company has already introduced a vanilla flavor (vanilla ice cream
accounts for 30% of the market) and began to abandon the brand strategy
that made them so successful.
It is very possible that the Unilever managers will decide to launch new
chocolate and strawberry flavors to address the bulk of the market. But, in
doing so, they will change the brand's unique character forever.

A brand strategy would have made that clear. No amount of plain vanilla
consumer research could have told them that.

Understand the Professional Services Buyer

Sophisticated buyers of professional services don't usually care what your
brochure, your advertisement, or your logo look like. It simply doesn't
matter to them that much. Sure, your marketing materials need to reflect
the nature of your firm's work, and the level of quality of your services,
but in general they simply need to be good enough, reflect well on you,
and facilitate the buying process.

What most buyers of professional services want to know that will make a
difference in their decision to buy or not is:

 How good are you at your expertise? If you're a CPA firm, are you
a really good one? Are you technically competent and, at the same
time, knowledgeable about my business and passionate about my
success?

 Can I depend on you? If you say you are going to do something,

what will lead me to believe that you will actually do it?
Conversely, will you do something that will reflect poorly on me to
my colleagues and clients?
 Does your firm offer services that fit my needs? If you're an
architectural firm and I am a school department, do you have deep
and current knowledge about building schools?
 How easy and convenient is it to work with your firm? If you're a
technology consulting firm, can I get a hold of you when I need
you? Is your accounts receivable department easy to work with?
Do you have a local office to work with me if I need you?
  Do I like you? If you're a law firm, do I feel comfortable having
conversations with your legal staff? Does your firm's culture and
personality fit mine? If I have to spend a lot of time with you, will
it be enjoyable (or at least bearable)?

If, indeed, these are the major buying influences for professional
services, why do so many so-called marketing strategy discussions
focus on what your logo should look like? From a will-it-generate-
revenue perspective, does it really matter how many people see your
ad? It might matter to the egos of the people at the firm, but not very
often to its long-term revenue generation success.

Branding and Marketing - A Neglected Driving

Factor
While the development of broadband in a country is a combination of
multiple factors, many governments and industry players are still ignorant
about the importance of branding and marketing in this process. The
competition between countries is increasing and achieving a unique
position and competitive advantage becomes progressively difficult and
expensive.

Creating and implementing brand-marketing strategies are inevitable for

governments and the industry to support the adoption of broadband.
Strong branding enhances the competitive position of the countries and
helps attract IT investment from multi-national corporations, boosting the
viability of high-speed related services in the country.

Malaysia recently emerged the winner in a hard-fought race to host the

prestigious World Congress Information Technology (WCIT) in 2008.
WCIT is the IT equivalent of the Olympics.

Beyond the significance of winning the right to host a major technology

event, 2008 should now become the milestone to realise all ambitious
technology initiatives in the country.
The government of Malaysia should view this as a super-branding
exercise for the country. For an international technology congress to be
held in Malaysia, it is necessary to give the right impression of the
country and its strategy for the future. Branding and marketing are critical
elements in this process.

For India, it achieved international acknowledgement as a country with a

large pool of knowledge workers through the efforts of Nasscomm [The
National Association of Software Companies] and its government. This
success should serve as a reference case for governments all over.

Conclusion
Much of the broadband growth in the region has come from more
advanced countries such as Korea, Japan, Singapore, Hong Kong and
Taiwan. These markets have the basic infrastructure in place and
competition drives down prices. Narrowband dial-up users are also
migrating to broadband. In many markets, there are also multiple
broadband operators. As such, prices will continue to be driven down.

Despite the initial enthusiasm among early adopters, there remains the
problem that no killer application and content have emerged that will
encourage users to switch to broadband other than lure of the additional
speed of access.

Operators in general are still hesitant about investing on the broadband

network because of a certain number of issues that they need to carefully
think about, such as when and how to get the payback, how to set the
price range and what kind of broadband technologies they should deploy.
While traditional factors hindering broadband will continue to exist until
there are sweeping changes on infrastructural, cost and anti-competitive
issues across the region.
New factors such as international marketing and branding cannot take a
backseat. An enhanced brand name - for a country, leading trade
associations or business entities - create inroads for foreign investments,
thereby promoting a more conducive environment for broadband
adoption/growth.
As Asian countries continue to develop its broadband competitiveness -
albeit at different pace and success - governments and industry should
take a more concerted effort to consider and leverage differing factors to
help them achieve their eventual economic goals.
Factors to consider before M&A
When brands such as Adidas and Reebok decide to join hands, the stakes
are very high. Both brands have been built around unique personalities –
personalities so strong that the very identity of the brand is based on the
underlying brand personality. Further, being competitors till the merger,
such brands will have carved out unique niches in the market place. As
such, the challenge for such M&A is post-merger integration. But before
analyzing the post merger, companies need to fully understand the critical
factors that they need to consider before merging their brand with another
brand. The following section of the article discusses such critical factors.

1. Does the M&A enhance shareholder value? This is the most

important question any brand/company has to ask itself before
taking the mergers and acquisitions route. As the primary goal of
any business entity is the enhancement of shareholder value, it is
only fair that the factor that determines a company’s growth
strategy be measured in terms of that dominant variable. Further,
this issue gets complicated as the measurement of shareholder
value is a much debated but yet a gray area. Many M&As result in
an instant boost in stock price of individual brands. The value
generated by such M&A should also be analyzed in the long term
to ensure that the increase in stock price was not a market
aberration but indeed a reflection of the potential of the newly
formed entity.
2. Does the M&A allow the new entity market dominance? There are
usually a plethora of reasons why companies choose the mergers
and acquisitions route. One of the main results of a merger and
acquisition activity should be market domination and leadership.
This goal is very much inline with the goals of enhancing
shareholder value. If two brands come together, then it is assumed
that the combined resources of the two brands would enable the
new entity to command enough market power that will be greater
than the sum of their individual might. But this does not happen all
the time.
3. Does the M&A maximize synergies between brands in culture,
organizational capabilities and market reach? It has been well
recorded in the annals of business literature that one of the main
reasons for the failure of any merger and acquisition is the resulting
conflict between the combined entities. An M&A can be a great
example to demonstrate the innate power of organizational culture.
 It is often wrongly assumed by companies that the overarching
goal of market domination, profitability and growth would tame
the hidden dragons of either company. As such, this is one of the
most crucial questions that any brand must ask itself before joining
hands with another brand. Can the two brands attain synergies in
terms of their culture? Can the M&A maximize the organizational
capabilities in terms of brand portfolios, market share, financial,
managerial and technological resources? Can the M&A guide the
new entity towards achieving market reach and growth without
hindering the established brands?
4. Does the M&A allow for brand compatibility? Brand compatibility
is a broad term that refers to the level of synergies attained by
brands of both companies that are parties to an M&A. Any brand is
distinguished by its all powerful identity, unique personality and
the underlying brand culture/philosophy. In the brand world, these
three aspects are explosive and ready for conflict when they are
forced to adjust to a new situation. In this context, brand
compatibility refers to the level to which the identity, personality
and philosophy of brands of the two companies match or show a
possibility of peaceful existence. If the main objectives any M&A
activity – shareholder value enhancement and market domination –
has to be achieved, a very high level of brand compatibility
becomes critical.

Post-merger brand strategies

Post merger period is the real acid test for the new combined entity. Most
often the combined company is so overwhelmed with the complexities of
integration that majority of the actions tend to be reactive to the ensuing
flow of events than proactive whereby the management channels the
combined synergies in line with the pre merger objectives. One of the key
success factors for brands in the post merger scenario is to have a two
pronged brand strategy – one part engaged in managing the marketplace
perceptions given the strategic blueprint of the combined entity and the
second part engaged with ensuring that all internal stakeholders are
motivated and are in line with the overall brand vision. An essential
prerequisite for either of these is clear cut system of brand management.
Defining brand strategies under multiple scenarios and establishing
guidelines to monitor integration are very important before any corporate
level strategy is designed and implemented.

1. Brand Strategy: Brand strategy in a post merger scenario assumes

high significance given the high percentage of M&A failures. As
discussed earlier, brands of the two merged companies usually
have their own unique identities, personalities and philosophies. As
such the fundamental question of brand strategy would be – how to
treat these brands – one brand, joint brand, flexible brand or a new
brand. Depending on the market power, brand equity and the
product line of the brand, a company can decide to one of the
following three strategies:
1. Acquirer corporate brand: More often than not, the acquirer
corporate brand replaces the acquired corporate brand. In
such a case the acquirer corporate brand becomes the brand
of the combined entity. This is the case when the acquirer
brand is the market leader and the acquisition would have
been done primarily to consolidate its position ra>ther than
to leverage the equity of the acquired brand either for market
reach or growth.
2. Joint brand: This is a case where the combined brand will be
a combination of the acquired and the acquirer brand. This
strategy is resorted to when M&A happens between equals.
Further, both brands enjoy an equal or similar market
standing, market reach and brand equity. Daimler-Chrysler
and AOL-Time Warner serve as cases in point.
3. Flexible brand: This strategy is based on geographical
separation. When two well known brands have come
together and each of these brands are big brands in different
geographical regions, then the resulting brand, though a
combination of both brands, tend to reflect the dominant
brand in the relevant geographical region. The Renault-
Nissan is a good example. Nissan is a highly known brand in
Asia and also in the US. Renault similarly is a well known
brand in Europe. These dominant markets are geographically
separated. In line with the flexible strategy, Nissan is the
preferred brand name in the US and Renault is the preferred
name in Europe. This strategy serves well when each brand
is highly regarded in its primary region and letting go of the
name will be detrimental to the brand.
 4. Brand Integration: Integration is probably the most challenging of
all issues after a merger. Integration, like branding, encompasses all
functions of the company. Especially when two companies have come
together either through a merger or an acquisition, integration of
organizational capabilities becomes quintessential for the merged
entities’ survival and success. Management should establish clear
internal organizational expectations and guidelines for the interaction
of employees, resources and brands to ensure that all activities are
channeled towards the objective of a smoother transition. A branding
platform must be set up whereby brand managers of both companies
can discuss the possibilities and future paths of individual brands. This
would ensure that brand managers would work in tandem with each
other.

The Strategic Significance of Brands

The Brand has risen to occupy a place of paramount importance on the
pages of such stalwart business publications as Financial World, Business
Week, and Fortune magazine. In the 90’s, when these reputable
magazines first started reporting financial valuations for brands, much to
everyone’s surprise, these valuations were often greatly in excess of the
annual revenues of the companies surveyed. As the reality and
significance of these numbers sunk into the corporate world, the concept
of “the Brand” quickly rose to a new level of strategic significance.

Still many start-ups, technology driven companies, and others in

business-to-business and non-consumer markets fail to recognize that this
Brand phenomenon applies to all organizations. These individuals have
been accustomed to thinking of brands as a “marketing concern,” or as
only of interest to those who provide consumer goods or services.
However, the Brand, in virtue of its significant financial value, and
enormous potential to drive economic markets, has become a major
strategic factor in the corporate world providing competitive advantage,
delivering shareholder value, creating wealth, and ensuring social
prosperity.
The Emergence of the Brand

Fifteen years ago “the Brand” wasn’t even on the radar screen for senior
corporate executives. At best, “the brand,” was limited to the marketing
department of consumer packaged goods enterprises as a tool of
marketing.

But then, during the early 1990s, a new corporate strategy, “growth
through acquisitions,” emerged and initiated a now famous wave of
merger and acquisition activity that has lasted until our present day.
However, as visionary corporate executives began to acquire companies,
they encountered an unforeseen obstacle in setting the value of their
acquisition targets. In days past, book value and some multiple of
revenues had been adequate to strike an acquisition deal. But suddenly,
attractive companies, with enhanced market capitalizations, weren’t to be
had at book value driven prices because of their “intangible assets.” As
accommodations were reached and increasingly pricey deals were struck,
a whole new concept emerged that has since found its way into the top
ranks of corporate management. It was the concept of “intellectual
capital,” and it came to refer to a range of intangible intellectual assets,
but most primarily, as so many of these early and astounding deals
revolved around famous brands, to “the Brand.”

As we look back today, we can see that the beginning of the decade of the
1990s was the beginning of a tremendous increase in economic activity
worldwide. Mergers, acquisitions, new financial vehicles, and complex
business arrangements emerged to radically change the economic
landscape and companies of every shape and size for the better. During
this time, mergers and acquisitions were revealing that what made a
company attractive to an acquirer often wasn’t captured on its balance
sheet, be it a famous brand or patented technology or the promise of a
totally revolutionary business concept.
 CHAPTER 5

Giorgio Armani - the ultimate fashion brand

The Giorgio Armani brand owned and run by the founder designer
Giorgio Armani has earned the much hallowed space in the fashion
industry through its superior design, relevant themes and trends. It
maintains the aura of a real luxury brand. Not only has Giorgio Armani
become one of the most respected and known brand names in the fashion
and luxury brand industry, it is also one of the most highly valued fashion
companies in the world with a value of nearly 3 billion Euros.

The Giorgio Armani brand strategy

The mention of the Annual Academy Awards ceremony brings to mind
the glittering ritual, the red carpet, and the galaxy of Hollywood stars.
The Academy awards have become as much an event about films and
awards as it has about the celebrities and their fashion statements. One
of the regulars at the Annual Academy Awards event along with the
stars and the glamour has been the ultra premium and exclusive
fashion wear from the Giorgio Armani stable - the Armani suits
donned by the leading Hollywood men and the Armani evening gowns
and other haute couture dresses worn by the celestial Hollywood
beauties.
The Giorgio Armani company owned and run by the founder designer
Giorgio Armani has earned the much hallowed space in the fashion
industry through its superior design, relevant themes and trends
appealing to the current crop of customers and by maintaining the aura
of a real luxury brand.
Introduction
Giorgio Armani started the company of his namesake back in 1975.
Being a designer himself, he made apparel with his sense of aesthetics,
beauty and luxury, a sense that appealed to the elite of the society that
today includes the royalty of Belgium, the royal families of many
Asian countries and even the opulent women from the Middle East
and the high and mighty stars from Hollywood among many other
prominent customers. For almost 30 years now, Armani has been a
privately held company with the founder Giorgio Armani being the
sole shareholder.

With many sub-brands designed under the parent umbrella brand of

Giorgio Armani to cater to the specific needs of different market
segments, it has become one of the strongest fashion and luxury
brands in the world.
Not only has Giorgio Armani become one of the most respected and
known brand names in the fashion industry, it is also one of the most
highly valued fashion companies in the world with a value of nearly 3
billion Euros.
Giorgio Armani is also very expansive in Asia Pacific with its multiple
future growth markets for luxury brands. For example, China is
embracing premium fashion and luxury goods at an increasing pace,
and Giorgio Armani has been one of the forerunners to exploit the
market potential. There are approximately around 10-13 million
Chinese luxury brand customers. Giorgio Armani opened its Emporio
Armani store next to Shanghai's historic "The Bund" in 2004 and
plans on opening nearly 30 stores by the end of 2008.
The Brand Philosophy
Unlike the usual practices of branding that are normally seen in the
consumer goods industry, the branding philosophy in the fashion and
luxury goods industry is quite unique and personality based. Most of
the famous fashion houses like Christian Dior, Yves Saint-Laurent,
Gucci, Versace, Giorgio Armani and many others were built on the
personality of the founders. As design is the most important ingredient
of fashion and luxury apparel, the individual style of these designers
becomes crucial to creating and sustaining the fashion brand strategy.
It is these unique designs and patterns that reflect the personality of
their creator that gives an identity to the brand and helps to
differentiate it from the crowd.
The Giorgio Armani fashion house, like many other fashion houses,
has been built primarily on the unique personality and identity of
Giorgio Armani himself. The brand takes on the identity of the
founder through the designs created.
 Though this aspect of the fashion industry provides fashion houses
with a strong sense of differentiation that can be conveyed in a
tangible and visual form, it also poses a serious threat. When an entire
brand and fashion house are built on the basis of the founders'
personality and identity, it becomes a major challenge to keep the
brand going after the demise of the founder, something many of the
fashion houses have realized in the recent past.

The Giorgio Armani Brand Architecture

Whenever a brand gains popularity and acceptance from its target
customers in its core business, the next obvious step for the brand is to
charter a new course by venturing into different product lines,
different segments, and ever different markets. This phenomenon
seems common across industry sectors.
Giorgio Armani with its iconic popularity amongst the elite of the
society and the fashion literate segment of the market has followed
similar steps by extending the brand. Today the Armani brand
architecture encompasses one corporate brand and five sub-brands,
each catering to different sets of target customers and at different price
levels.
The signature Giorgio Armani line: This is the main collection of
apparel that consists of the signature Armani suits, Oscar gowns and
so on, which are of the ultra-premium price points and essentially
targeting consumers in the 35-50 year old age group.
Armani Collezioni: This is Armani's venture into a slightly lower
market segment. This basically caters to the segment of people who
aspire to wear Armani apparel but cannot afford the ultimate signature
line, or to those who crave to add extra products to their existing
portfolios. The Armani Collezioni brand, with a price point of almost
20% lower than the main line, provides an excellent line of affordable
fashion.
Emporio Armani: Targeted especially at the young professional
segment in the 25-35 year old age group, the Emporio Armani brand
provides contemporary designs that are relevant to the target
customers.
Armani Jeans: This is the lowest range of Armani apparel. This is to
the value segment what the signature line is to the premium segment.
Catering necessarily to the young adults in the 18 to 30 year old age
group, the Armani Jeans collection provides a trendy yet fashionable
and luxurious line of apparel.
A/X Armani Exchange: This is the licensed brand of chain of retail
outlets of Armani fashion house.
 This serves as the ultimate testimony to the power of the brand. By
providing the entire range of its apparels and accessories, Armani
Exchange provides customers with the complete feel of the luxurious
fashion of Giorgio Armani.
However, the Giorgio Armani brand architecture can be misinterpreted
by the prospect. For instance, the differences between Emporio
Armani and Armani Collezioni are often quite insignificant.
Furthermore, in January 2005 the Armani group launched Armani
Prive to stands for its haute couture collection.
Giorgio Armani and Armani Prive can cross borders creating
confusion in the mind of the buyer.
These sub-brands help Giorgio Armani to operate in many segments of
the fashion apparel market. But this is not all. Not only does Armani
straddle many segments of the same product category, but also many
different product categories.
Leveraging its strong brand equity in the fashion apparel market,
Giorgio Armani has ventured into other related categories like eye
wear, watches and cosmetics. These are made available in each of the
above-mentioned brand categories to ensure that it is available to the
different segments of the market. It is usually argued that eye wear,
perfumes, watches and cosmetics are strongly related to fashion and
luxury and thus it is natural for fashion houses to extend their brands
into these categories. Giorgio Armani is a very strong example for this
argument. By leveraging its expert knowledge of the fashion and
luxury industry, Armani has been able to come up with winning
concepts in the other product lines of cosmetics, watches, jewelry and
eye wear.
But Armani has not stopped at just these product categories: Armani
has extended the brand into multiple other categories such as Armani
Casa (up-market furniture), Armani-branded Dolci (confectionary),
and Armani-branded Fiori (Flowers). And to add to this wide portfolio
of brands, Armani very recently struck a deal with a Dubai-based
property group Emaar to come up with a chain of 14 Armani branded
hotels and resorts by 2011.
As is the trend in the fashion industry to operate in the entire spectrum
from apparel, jewellery, cosmetics, watches, perfumes and luxury
hotels, Armani has been able to leverage its brand equity to be present
in most of these lucrative sectors.
Today, Armani group has a retail network of 60 Giorgio Armani
boutiques, 11 Collezioni, 122 Emporio Armani, 94 A/X Armani
exchange, 13 Armani Junior , 1 Giorgio Armani Accessori and 16
Armani casa spread over 37 different countries.
With so many things going on in the Armani stable, it might seem a
pretty picture at the outset. But this huge portfolio of brands and
product lines creates a much bigger set of challenges to the Giorgio
Armani brand strategy in the future.
Giorgio Armani's future brand challenges
The founders' dilemma: This phenomenon is classic and occurs for
any company that is built on the basis of a strong and charismatic
founder and leader. As the main competitive advantage for the
company is the founder/leader himself, neither the founder nor the
company would think of life after the founder.
Moreover, whenever the companies' success and survival depends
very heavily on the existence of a single person, such companies and
its leaders should take proper action from an early stage so that proper
leaders can be nurtured within the organization.
The Giorgio Armani company is a classic case of founders' dilemma:
Giorgio Armani, the CEO and owner of the Armani brand is in his
early 70s. However, the company seems not to have made any plans
for life after Giorgio Armani. In a recent interview, Giorgio Armani
was quoted as saying that the search for a corporate partner and a
successor was "not for the today, not for tomorrow but perhaps for
after tomorrow". Though there have been cases where companies after
much effort have been able to stand up and live after the demise of
their founders, those are the rarities. Armani should formulate a
structure in his company along with his key management people to put
in place a definite structure that identifies and nurtures future and
upcoming leaders who can carry on the business even after the demise
of any single individual. This aspect gains a bit more importance in
the fashion industry as the personality, concept and ideas of individual
designers prove to be real competitive advantages. Keeping this in
mind, Giorgio Armani should tackle this challenge when there is still a
considerable amount of leeway to play with.

Brand dilution due to over-stretch:

The primary objectives of businesses are to earn profits and to

enhance shareholder value by maximizing ROI. One of the main
reasons that businesses invest in branding and brand management is
for the same reasons. Strong brands, as is well known, provide
companies with a very powerful tool to enter newer markets with
limited investments by leveraging their strong brand equity. It gives
companies numerous revenue streams.
Given this simple but strong fact, it is not a surprise that most of the
strong brands in the world have leveraged their brand equity and
extended their brands into newer product categories, newer markets
and even newer market segments.
Armani, when analyzed in this light, has extended its strong brand
equity a bit too far. Though the core business of Armani is in fashion
apparel business, it has extended its brand into categories as different
as luxury hotels and even confectionaries. The examples that
immediately come to mind are those of Calvin Klein and Pierre
Cardin.
One of the many reasons that these brands diluted their brand equity
was because they used their brand names on a very wide range of
products. One of the main factors that make fashion houses and their
products premium are their exclusivity. By franchising their brand
names to literally everything, these brands lost a significant portion of
their strong brand equity.
Though Armani might have extended its brand to hotels because
luxury travel is catching up fast as a fad with elite travelers, managing
the brand along these different dimensions could be a massive
challenge.

Managing brand architecture:

Given Armani's portfolio of brands within the fashion segment, as in

many of the other markets that it operates in, effectively managing this
portfolio of brands will prove to be the biggest challenge in the future.
As the brand moves into different territories, interacts with different
sets of customers, and represents different personalities, it becomes
quite a task for maintaining consistency across all of its marketing
communications and other activities. Though Armani has been using
the corporate brand name in all its sub-brands, and across all its
offerings, it is indeed a double-edged sword. On one hand, this gives
Armani a great opportunity to build a very strong corporate brand but
on the other, it gives rise to a huge risk of diluting the brand equity.
Given this strategic dilemma, Armani has to tread carefully in the
future. Armani should also realize that its existence is mainly due to its
strength in the fashion apparel business. As the brand extends through
different landscapes, Armani should not lose focus as new pressures
on resources build up.
Maintaining financial independence: Armani is a rarity from a
financial perspective as well. Giorgio Armani has been the only
shareholder of the company from its inception till now.
Armani has not taken any bank loans either. It has been one of those
rare companies which has managed to have very healthy operating
profits and ploughed back almost 700 million Euros into the business
since 1999. Having this financial independence has helped Armani
immensely as the company tests newer territories. With no pressures
from shareholders and without having to bother about meeting
quarterly targets, Armani has been able to operate quite successfully.
As is commonly known in the fashion industry, it takes a considerable
time for the concept and products to take root in the market.
For any company to sustain this gestation period, it needs to operate in
an environment where there are no day-to-day financial pressures.
Having this kind of financial independence to operate in has been one
of the key success factors for Armani.
But to continue as a one man company in the future could be quite
difficult. With consolidation happening in many industries, it might
just be a matter of time that it catches up with the fashion industry as
well. When such a thing happens, it could pose a big challenge to the
working style of Armani and its continued success. In this light,
Armani might want to think of other options when it has a choice and
before something is thrust upon it.
Sustaining consistent brand personality: One of the main aspects of a
fashion brand is its personality and its identity in the marketplace.
Building and sustaining a personality that is relevant and one that
resonates with the customer base is one of the most difficult aspects of
building a strong brand. Armani, with its presence in diverse markets,
a very wide brand portfolio, and interacting with diverse set of
customers, faces this huge challenge of building a relevant and
resonant personality. With the ever growing competition in the fashion
industry and ever growing brand portfolio, building and nurturing this
personality will prove to be a very big challenge for Armani in the
future.
Other Examples:

When Mercedes Benz decided to build its new M Class off-road vehicle,
it decided to build it and launch it in the USA. The head of Mercedes
USA knew that at its launch, it would be entering a crowded market, and
that the mere fact that it was a Mercedes would not guarantee sales. They
had to try something different.

In the USA it is still possible to obtain free access to data and they
obtained details of all current owners of off-road vehicles and Mercedes
cars. Mercedes then undertook a series of mail-outs to the names on the
database.

It began with a personally addressed letter from the head of Mercedes

USA. It said something along the lines of - "...we at Mercedes are in the
process of designing a brand new off-road car and I would like to know if
you would be prepared to help us..."

Now America is the land in which you receive probably more direct mail
than any other country in the world, but it is not every day that the head
of Mercedes writes and asks for your help. There was a significant,
positive response. Those people who responded received a series of
questionnaires that asked for guidance on design issues such as whether
the spare wheel should be outside or inside the vehicle, desired engine
sizes, exterior colours and interior designs.
What is interesting is that, along with the questionnaires, Mercedes began
to also receive advance orders. What these customers were feeling was
that Mercedes was custom building a car just for them. No other
manufacturer had ever involved them in the design and build process in
quite the same way.

As a result, Mercedes pre-sold its first year sales target of 35,000

vehicles. It was expecting to spend some $70 million US marketing the
car, but by using this CRM one to one approach, it only needed to spend
$48 million saving $22 million. We have heard that this program was so
successful that Mercedes is looking to use the same approach in the future
with other model launches.

This case is taken from Romancing the Customer: maximizing brand

value through powerful relationship management by Paul Temporal and
Martin Trott (Wiley, 2001).

Philips is a hi-tech global company with a traditionally low profile. Until

recently, if you asked anyone if he knew the Philips brand name, the
likehood was that he would say yes. However, he might not have know
what Philips provides in the way of its total product range, and might
have associated the brand name and company with traditional technology.
The "Let's Make Things Better" global brand campaign has raised the
Philips profile, and provided it with a more focused and distinctive
personality.

Royal Philips Electronics - its proper name - is a giant company.

Established in 1891 is a lamp factory, it now has over 100 different
business, over 200 production sites, and carries out research and
development in more than 40 countries. Its sales and service outlets cover
150 countries, and it has a total workforce upwards of 230,000
employees. It has a strong technology base, spending over 5% of sales on
research and development, and owning some 10,000 patents. Its portfolio
covers a wide variety of product categories, including:

 semiconductors
 TV
 video
 audio
 PC peripherals
 digital networks
  lighting
 medical systems
 mobile phones
 domestic appliances
 personal care products

The "Lets Make Things Better" campaign is still part of a global

corporate branding initiative aimed at motivating both consumers and
employees. It was, to use Intel's own words, a brand "renaissance."

The company's slogan is all about emphasizing what technology, Philips

products in particular, can do for people - it is essentially about the
benefits they can bring to people and the world in general. A keystone of
the campaign was the premise that, if you can convince people that you
can help improve their lives, they will more likely believe that you can
help improve the world. The campaign thus had to appear credible, real,
and experiential. It had to be human as opposed to philosophical and
philanthropic, and not just another typical corporate overclaim.

In an effort to address its rather unexciting corporate brand image and

show people that it is really a part of the modern hi-tech world, Merryl
Lynch has re-engineered its icon - the bull - and embarked on a major
advertising campaign that coincides with its entry into online trading.

The company has introduced low-cost online investing for customers, and
has had to break away from its traditional brokerage image, especially as
it has lost out to the successful online brokerages such as Charles Schwab
Corp. and E*Trade Group Inc. Some of the new commercials show real
life customers telling how profitable their relationship with the company
has been, and other advertisements show the Merryl Lynch bull icon in a
digitalized wired-up format.

Whilst the bull remains as a symbol of the power and durability of the
Merryl Lynch brand, the new hi-tech bull signifies readiness to fight in
the e-commerce market place. One two-page newspaper advertisement in
the early stages of the campaign showed the new bull with copy beside it
that read...

Be quick
Be smart
Be ready
Be prudent
Be daring
Be conventional
Be contrarian
Be global
Be local
Be backward-looking
Be forward-looking
Be strategic
Be wired
Be unwired
Be thoughtful
Be spontaneous
Be wise
Be bullish

The contradictions give the impression of a very schizophrenic brand

personality, and the 'everything to everyone' nature of this copy may well
suggest that the company does not know what it really wants to be seen
as. Reported reaction to the campaigns has tended to polarize like the
copy, with dissenters and enthusiasts. The commercials have also been
subject to criticism, some saying that the customers profiled do not look
confident about the firm's new offerings, with some clearly not
understanding and others confused. As usual time will tell whether
perceptions have changed regarding the brand image, but it does appear
that Merryl Lynch may not have done enough to convince the public that
it has what it takes to be a major player in the digital world.

By contrast, advertisements run a few months earlier were much stronger

and more focused, and carried much clearer emotional messages, for
example:

IF YOU WANT TO SEE SOMETHING

Done, just tell some human beings
It can't be done. Make it known that
It's impossible to fly to the moon,
Or run a hundred metres in nine-
Point-nine seconds, or solve Fermat's
Last Theorem. Remind the world that
No one has ever hit sixty-two home
Runs in a season. Stuffed eighteen
People into a Volkswagen Bug. Set
half the world free. Or cloned a sheep.
Dangle the undoable in front of
the world. Then, consider it done

The tag line was "HUMAN ACHIEVEMENT" with the Merryl Lynch
name and the original bull icon.

Whether agencies are changed or not, companies should really think very
hard before making radical changes to their presentation of the brand. As
a case study, ask yourself what you would have done to give the brand a
new look without losing the equity from the past.

Perhaps the most successful technology company to balance the dual

requirements of innovation and reliability in its branding is Intel.

Because of the fears consumers have, when things go wrong with

technology products they react disproportionately. Take the well
documented example of Intel, when initial faults discovered by customers
after the launch of the Pentium chip by Intel were potentially
devastating,and the company was receiving up to 10,000 calls a day from
dissatisfied or unhappy customers. Good crisis management saved the
day, and Intel regained their position of trust and high quality
performance in the minds of consumers.
Intel is a model of good technology branding and positioning, and had it
not already had a strong position crisis management may not have been
enough to save the day. The company really survived and prospered
because of this, and has shown how a power positioning approach can
solve the problems of consumer technophobia, with its now famous Intel
Inside campaign. As a component that is not visible to consumers who
buy personal computers, and OEM producers offering price advantages to
manufacturers, this was no easy task.

The Intel position has always been based on authenticity, quality and
performance, supported strongly by consistent global campaigns. The
Intel Inside logo is placed on all print advertising, print and point-of-sale
merchandising, shipping cartons, packaging, and is used by world brand
and OEM computer manufacturers. Supported by explanatory
communication material, it has to a large extent succeeded in calming the
fears of consumers who are doubtful of the performance of critical and
complicated product elements they do not understand. The introduction of
the Intel 'Bunny people' in astronaut-type attire in an attempt to humanise
and add personality to product has not been so successful, being
perceived by many as cold and impersonal.

Interestingly, Intel has now developed individual product brands, as is the

case with the Pentium and Pentium II range. The rationale for this is that
a name like Pentium ( derived from the Greek word pent meaning five
and alluding to the fifth generation of X86 computer chips ) provides a
kind of shorthand which is more meaningful to the consumer,
summarising the benefits more easily. Pentium II is positioned as a high
performance product aimed at business and consumer users. More
recently the Intel equivalent of a 'no frills' product range called Celeron
has been introduced, still endorsed by the parental name, but meant for a
different target audience. This is positioned around value, compatibility
and quality, but the Celeron initial offering has not had a brilliant start.

It remains to be seen whether Intel has really understood the needs of

different market segments, and whether or not the cheaper product can
hold true to the position and associations that Intel has so single-mindedly
projected over the last several years. Also, if consumers will perceive the
move as a more risky alternative, and even if it will devalue the position
of the higher price existing products. In the worst scenario, the different
products might cannibalise each others sales, and generate customer
confusion. Intel intends to introduce more branded chips, and careful
education of the consumer in this highly complex market will be essential
to negate customer confusion and achieve successful brand positioning.

Brand strengths: humanization, personality, brand name, positioning

Stan Shih is a national hero in Taiwan; Acer is a successful international

brand.

The computer industry is one of the most competitive in the world,

having always been dominated by the giants such as IBM. So, how has a
Taiwanese company become the third largest manufacturer of personal
computers (PCs) in the world, creating a respected, and sometimes
feared, brand? How has the company managed to break away from the
"Made in Taiwan" image, which like many countries in Asia has been
associated with sub-standard products?

The answer is, of course, the careful construction of a strong brand

image. From the very beginning, Shih realized that this was the great
challenge, and he positioned his products more at the higher end of the
market than any other Taiwanese products had been previously. For
example, when entering the Japanese market, he priced his products the
same as theirs to avoid the poor-quality image associated with lower-
priced products. This was an important signal emitted by the brand-that
Acer-branded products were not to be classified as commodities.

Acer Computer has always spent huge sums of money on research and
development, and in this respect, tends to follow the Japanese technology
companies. Shih believes in "innovalue"-using innovation to create value
in the design and production of cutting-edge products-and leading the
industry.

It is Shih's company that has actually positioned the PC as an

aesthetically pleasing home appliance, and this philosophy is summed up
in the new corporate mission statement: "Fresh Technology Enjoyed by
Everyone, Everywhere." Fresh does not imply new but the best, namely,
proven high-value, low-risk technology that is affordable to everyone,
and has a long lifespan. Fresh also refers to innovation based on mature
technology that is user-friendly, reasonably priced, and enjoyed by
everyone, everywhere. Acer Computer has a long history of innovation,
and continues to add to this brand strength at every opportunity.
Acer Computer's aim is to become more consumer-oriented, as it believes
that PCs will become consumer-electronic products with a wider range of
uses and applications in the areas of communications, entertainment, and
education. Acer Computer, therefore, has to become an expert in
consumer electronics as well as personal computing. Shih refers to this as
a shift from being 'technology-centric" to "consumer-centric." The
computer industry has always been the former-emphasizing products
more than people. Acer Computer is, thus, repositioning itself to become
a customer-centric intellectual-property and service company, as signified
by its new slogan: "Acer, Bringing People and Technology Together." To
Shih, intellectual property is the value added to the product. Acer adds
value by enhancing consumer perceptions of the benefit or value of a
product, based on know-how, packaging, design, accessibility, comfort,
user-friendliness, niche solutions-the tangible qualities of its products.
This is how Acer Computer is building on its already strong international
brand, into a global brand. It wants to help people to enjoy their work and
their lives.

One way in which Acer Computer is trying to manage the perceptions of

its audience and getting them to think of the company as a major player is
through more international exposure, such as its US$10-million
sponsorship of the 1998 Asian Games. It succeeded in bringing the
company greater international exposure. Another way Acer Computer is
managing customers' perception of the company is by partnering overseas
companies. By doing this, Acer Computer achieves its overall philosophy
of "global brand, local touch," and also hopes to further the perception of
being a global brand.

However, Acer still has to make the leap from being a regional brand to a
global one. Although the company manufactures computers for IBM and
other major companies, it does not get due credit. In 1998, it was ranked
third in the world as a PC manufacturer, but occupied only eighth spot in
brand sales.

Since then it has moved to seventh place, according to the company. In

the largest single market in the world-the United States-Acer's market
share in 1998 was less than 5%.

Acer has to cross the bridge , from world-class manufacturer and

regional-market leader to global player. If the result depends solely on
Stan Shih's enthusiasm, energy, and ambition, then there will be no doubt
about the outcome. But consumers, both corporate and individual, make
global brands happen, and therein lies the challenge of changing and
managing their perceptions.

Brand strengths: Founder/CEO's vision, cost leadership, quality products,

consumer focus, innovation

Volkswagen (VW) is a famous international brand name that has

traditionally been associated with the mass market, its most famous
model being the Beetle. Indeed, it is currently exploiting nostalgia with
the new Beetle retro-model.

However, not content with sticking to the categories where it enjoys

success, the company is also attempting to move into the prestige- and
luxury-car segments dominated by established brands like Mercedes and
BMW.

Its first venture into this market segment is with the new Passat V6
Syncro, which is out of the price range of the typical VW buyer.
Evidently, other models are planned at higher level segments and prices.
Even though VW owns Audi, Bentley, and Lamborghini, amongst other
brands, many people are skeptical that it can stretch its own brand
upwards, when consumer perceptions still associate the VW-branded cars
with smaller and less prestigious vehicles.

Its "badge value" (brand associations) would not appeal to customers of

BMW, Mercedes, or even Audi. Additional problems arise when
consideration is given to the fact that other brands such as Volvo and
Toyota's Lexus are also shifting their position to target the prestige
market that demands performance, luxury, and marque. VW
acknowledges the issues but says it will give customers more product.

But is product what the luxury car owners are really buying? More likely,
according to research, it is status, prestige and self-expression that
determines their decision, and VW will need to do a considerable amount
of consumer perception management and distributor education to
successfully bring any of its VW branded models into that league.
Images of popular brands
 CHAPTER 6

CONCLUSION

1) Brand loyalty also means that companies achieve a greater

consistency of demand through customer retention. Over time, good
brand strategies generate the production volume which gives the
economies of scale necessary to have a favourable impact in unit costs. In
turn, this allows companies to achieve higher margins, putting them in a
winning situation.

2) Pouring money into technology can be the wrong move unless you
have a brand that really stands for something in the minds of consumers,
and technology investment demands high returns. The powerful brands
provide both consumer trust and high returns.

Consumers will not buy from companies that do not have a

good brand image, particularly in technology markets where the products
are relatively complex and often not fully understood. They will only buy
trusted brands. Developing a brand is not cheap, but the returns can be
spectacular. Strong brands can command premium prices wherever they
choose to go, and can often be worth more than the net asset value of the
business enterprise

3) Brands are also successful because people prefer them to ordinary

products. In addition to the psychological factors already mentioned,
brands give consumers the means whereby they can make choices and
judgements. Bases on these experiences, customers can then rely on
chosen brands to guarantee standards of quality and service, which
reduces the risk of failure in purchase.

Today's world is characterised by more complex technology, and this can

be extremely confusing to people who are not technology minded. Brands
can play an important role here by providing simplicity and reassurance
to the uninitiated, offering a quick, clear guide to a variety of competitive
products and helping consumers reach better, quicker decisions.

BIBLIOGRAPHY

Brand ROYALTY - Matt Haig

Brand Positioning - Subroto Sengupta (Late)

Romancing the Customer: maximizing brand value
through powerful relationship management by Paul
Temporal and Martin Trott (Wiley, 2001).
www.brandinginasia.com

www.orientpacific.com