Leveraging Secondary Brand Knowledge

Brand Equity
BE is built through 1. Brand elements 2. Marketing programs and communication strategies 3. Leveraging secondary brand associations

Building Customer-Based Brand Equity

BRAND BUILDING TOOLS AND OBJECTIVES
Choosing Brand Elements Brand name Logo Symbol Character Packaging Slogan Memorability Meaningfulness Appeal Transferability Adaptability Protectability Brand Awareness Depth Recall Recognition Purchase Consumption Possible Outcomes Greater loyalty Less vulnerability to competitive marketing actions and crises Larger margins More elastic response to price decreases More inelastic response to price increases Brand Associations Strong Favorable Awareness Meaningfulness Transferability Unique Relevance Consistency Desirable Deliverable Point-of-parity Point-of-difference Greater trade cooperation and support Increased marketing communication efficiency and effectiveness Possible licensing opportunities More favorable brand extension evaluations

CONSUMER KNOWLEDGE EFFECTS

BRANDING BENEFITS

Breadth Developing Marketing Programs Product Price Distribution channels Communications Tangible and intangible benefits Value perceptions Integratepush and pull Mix and match options

Leverage of Secondary Associations Company Country of origin Channel of distribution Other brands Endorsor Event

Secondary Brand Knowledge

BE can be built through leverage of secondary brand associations

By linking brand to other entities that have their own knowledge structure Through these linkages, consumers infer that the associations that characterize the other entity are also true of the brand, and these get transferred to the brand (brand garners BE from other entities)

Leveraging Secondary Associations

Brand associations may be linked to other entities, creating secondary associations:
Source factors

Company (through branding strategies) Country of Origin (identification of products origin) Channels of Distribution (through channels strategy) Other Brands (through co-branding) Celebrity Spokesperson (endorsement advertising) Characters, name, logos, etc. (through licensing) Events (through sponsorship) Other third party sources (awards & reviews)

Conceptualizing the Leveraging Process Linking brand to another entity creates 2 effects
Creation of new brand associations 1. Affects the valuation of the brand brand judgment, feelings, etc., as consumers form mental associations of the brand linked to the other entity 2. Affects existing brand knowledge - Consumers have knowledge about the entity. When it is linked, consumers infer that some of the associations that characterize the entity also characterize the brand -Cognitive consistency

Conceptualizing the Leveraging Process Creation of new brand associations 1.

Affects the valuation of the brand New brand associations (secondary associations) become the basis of choice country of origin, store, etc.
This is important when

Brands equity is inadequate to create strong, favorable, unique associations, and responses Consumers lack motivation dont care much about the brand they choose Or lack ability feel they do not have adequate knowledge to choose the brand

Affects existing brand knowledge

Reinforcement of existing associations in a different way

Conceptualizing the Leveraging Process Predicting leverage of secondary sources based

on 3 factors
1.

Awareness and knowledge of entity if there is no awareness, nothing can be transferred.

(what do they know about entity?)

Consumers should be familiar, have favorable, and unique associations about the entity and positive judgments and feelings
2.

Meaningfulness of the knowledge of the entity the extent to which associations of the entity are relevant / meaningful to the brand. Some knowledge may have relevance, other knowledge may not

Conceptualizing the Leveraging Process 3 factors are important in predicting leverage 3.

Transferability of knowledge to the entity to what extent will relevant knowledge become linked to the brand and become positive in the brand context (Do associations get linked?) More similar the associations, more strongly they are linked Judgments and feelings are more likely to be linked, than specific associations (that are seen as irrelevant / too strongly linked to entity to be transferred) Adequate exposure - repetition

Conceptualizing the Leveraging Process Guidelines for choosing source factors or any

other entity used to create a POP or a POD

Check secondary associations for - awareness, judgment, feeling and type of associations of entity Commonality leveraging strategy - select entities that have similarity / congruent associations with the brand Complementary branding strategies - choose entity that is a departure from the brand for the desired positioning Means of transferability must deliver the less congruent knowledge of the entity to have a direct or indirect impact on brand knowledge Skillfully designed marketing activity is needed to ensure that there is no confusion or skepticism

Conceptualizing the Leveraging Process Guidelines for choosing source factors or any

other entity used to create a POP or a POD

Leveraging secondary brand knowledge may be risky Some control over brand image is given up Managing the transfer process may be difficult This knowledge may change over time which may or may not be advantageous for the brand

Ways of Linking Secondary Knowledge to the Brand Company branding strategies are important

for companies that offer products or service. It is an important determinant of strength of association from the brand to the company (3 branding options for a product 1. Create a new brand 2. Adopt or modify an existing brand 3. Combine an existing and new brand)

Ways of Linking Secondary Knowledge to the Brandbrand related to Corporate Brand (Nike) Existing
Or a specific Product Brand (Nokia 8290 digital phone)

By sharing names, symbols, etc. Corporate / family brand becomes a source of BE with its associations and corporate credibility
But this may not always be useful depending on awareness and image involved.

New brands are sometimes launched to create a smaller image Star Bazzar from Tatas
Brands, Companies are unavoidably linked to the category and the industry in which they compete (not always an advantage oil co)

Ways of Linking Secondary Knowledge to the Country of origin and other geographic areas Brand

Consumers pick products originating in different countries to communicate self-image based on beliefs
about quality of certain types of products from certain countries Italian suits, Japanese disc player, German cars About the image they communicate

Other associations - state, region, city Darjeeling tea PODs can be created on this basis Levis US Extent of importance of the country of origin (mentioned on the label) depends on marketing activity It can also have a negative effect
It must be considered from a domestic and foreign perspective (patriotism lacks uniqueness if over used)

Ways of Linking Secondary Knowledge to the Channels Brand of distribution

Retail stores indirectly affect BE through the image transfer process These associations impact brand associations prestigious, for bargain shoppers, etc.

Retailer image created by the product assortment, credit policy, pricing, service, etc. Retailer advertising directly shapes its image

Store image associations can be negative or positive Levis at Big Bazaar??

Ways of Linking Secondary Knowledge to the Brand Co-Branding / brand bundling

2 or more existing brands (from the same or different company) combined into a joint product or marketed together Particularly important in poorly differentiated categories as it can create more PODs and POPs Incidence of Co-branding has increased in recent years

Ways of Linking Secondary Knowledge to the Brand Co-Branding / brand bundling

Advantages

Borrow needed expertise Leverage equity you do not have Reduce cost of product introduction Accelerate adoption Expand brand meaning into related categories Broaden meaning Increase access points Source of additional revenue

Ways of Linking Secondary Knowledge to the Brand / brand bundling Co-Branding

Disadvantages

Loss of control Lack of brand clarity and focus Customer expectations are likely to be high involvement and commitment Risk of brand equity dilution Organizational distraction and lack of focus Too many co-branding arrangements - risk of over exposure, and dilution of transfer of associations

Ways of Linking Secondary Knowledge to the Brand Co-Branding Guidelines

Both brands must have their own BE - adequate awareness, strong, unique and favorable associations, positive judgments and feelings A logical fit - maximizes advantages and minimize disadvantages in values, capabilities, goals and balance of BE (Swatchmobile Smart Car) Executionally - detailed plans, legalize contracts, financial agreements, coordinated marketing effort (licensing fees, royalty if a brand is more involved) are necessary

Ways of Linking Secondary Knowledge to the Co-Branding Brand Guidelines

Involves a number of decision factors What capabilities do you not have? What resource constraints are you faced with? What growth goals or revenue needs do you have? Assessing a joint branding opportunity consider Is it a profitable business venture? How does it help to maintain or strengthen BE? Is there any possible risk of dilution of BE? Does it offer any extrinsic advantages? (learning opportunities)

Ways of Linking Secondary Knowledge to the Brand Branding a case of co-branding Ingredient

Creating BE for components, materials, parts that are contained in within the branded product Intel Consumers see the branded ingredient as a signal of quality and become industry standards Hence they end up becoming POPs Mature brands can cost effectively differentiate themselves by using many of them

Ways of Linking Secondary Knowledge to the Brand Branding a case of co-branding Ingredient

Advantages and disadvantages are similar to cobranding Leveraging the Ingredient brands BE to enhance its own B Intel Inside Access to new product categories, different market segments, more distribution channels Share some costs (development and production) with the ingredient supplier

Ways of Linking Secondary Knowledge to the Ingredient Brand Branding

Advantages Creates a pull - greater sales and higher margins than would otherwise be possible More stable and broader consumer demand Better long-term supplier-buyer relationship Enhanced revenue from 2 revenue streams

Direct revenue from cost of supplied ingredient Royalty rights paid to display the ingredient brand

Ways of Linking Secondary Knowledge to the Ingredient Brand Branding

Disadvantages ingredient branding is not without risks

Cost of supporting a communication program (high advertising to sales ratio, inexperience in branding) Loss of control as marketing objectives of supplier may be different and end up in inappropriate messages Consumers may get confused about the real brand which could be resented Sustainability of competitive advantage is questionable when consumers understand the role of the ingredient and follower brands follow at a lower price Loss of accounts - some manufacturers may decide not to be dependent and believe that the IB does not add value

Ways of Linking Secondary Knowledge to the Ingredient Branding Guidelines Brand Requirements for a successful IB - BE is built in the
1.

2.

3.

same way as conventional branding programs Consumers must perceive that the IB matters to the performance and success of the end product. Ideally the value should be visible Consumers should be convinced that all IB are not the same. Ideally there should be a innovation or some other substantial advantage over the other brands A distinctive symbol or logo should be designed to clearly signal that the host product contains the IB, which should be simple and versatile to be used every where

Ways of Linking Secondary Knowledge to the Ingredient Branding Guidelines Brand 4. A coordinated push and pull program should be

put in place Pull - consumer advertising and promotion in collaboration with manufacturers, retail merchandise Push communication to gain cooperation and support of manufacturers or channel partners

Ways of Linking Secondary Knowledge to the Licensing Brand a shortcut means to building BE

Contractual arrangements whereby firms can use names, logos, characters, of other brands to market their own for a fixed fee Entertainment licensing movie titles, logos, comic strip actors, TV characters, athletes Licensing is lucrative for the licensor designer apparels and accessories Ralph Lauren

Ways of Linking Secondary Knowledge to the Brand Guidelines Licensing

Licensee may be caught up in licensing a fad and short-lived popularity Because of multiple licensing arrangements the Brand can become over exposed and wear-out quickly Firms are taking a number of steps to protect themselves in licensing arrangements

Diversifying risks by obtaining rights to a broad range of licensed entities some of which are relatively enduring Developing new unique products and marketing approaches so that their sales are not merely a function of popularity of other brands Research is conducted to ensure that proper match of product and licensed entity

Ways of Linking Secondary Knowledge to the Licensing Brand Guidelines

Corporate trade mark licensing company name, logo, brands is one of the fastest growing licensing segments Harley Davidson with Poloshirts The motivations may be different

increasing brand exposure, enhancing brand image Profit motive (as there is no inventory, manufacturing expenses etc)

Risks Product may not live up to the brand reputation Inappropriate licensing can dilute brand image

Ways of Linking Secondary Knowledge to the Brand Celebrity endorsements admired people to

promote the brand actors, sportsmen, etc.

They draw attention to the brand Shape the perception of the brand by the inferences made on the basis of knowledge of the celebrity

Celebrity should be well known enough to create improved awareness, image, response

High level of visibility Rich set of potentially useful associations, judgments and feelings Credibility in terms of expertise, trustworthiness, likeability, attractiveness, and specific associations that carry potential product relevance

Ways of Linking Secondary Knowledge to the Celebrity Brand endorsements Potential problems
1. 2.

3.

4.

5. 6.

7.

Celebrity may be overused and lack specific product meaning, or are seen as opportunistic and insincere There must be a reasonable match between celeb and product Dhoni for Mysore Sandal Soap?? Celebrity can get into trouble or lose popularity, and diminished market value- Tiger Woods Many consumers feel celebrities are doing it for money and do not believe in the cause / brand endorsed Adds to the product cost of the brand They are expensive, may be difficult to work with, endorsing other brands that run counter to brand image Celebs may distract attention from the brand and consumers have difficulty remembering the brand

Ways of Linking Secondary Knowledge to the Celebrity endorsements Guidelines Brand

To overcome these problems 1. Have a logical fit between the brand and the celebrity
Celebrities must be evaluated, selected and used strategically Choose well known and, whose associations are relevant to the brand and likely to be transferable Ideally not be linked to a number of other brands, or over exposed, as it may cause confusion and dilution of image

1.

2.

Use celebrities in advertising and other marketing programs to highlight the relevant associations and encourage their transfer Marketing research must be used to

identify potential candidate, and facilitate the development of proper marketing programs Track their effectiveness

Ways of Linking Secondary Knowledge to the Sporting, Cultural or other events Brand

Events can transfer associations on various dimensions of credibility A brand may be seem more likeable, trustworthy, or an expert by becoming linked to an event Sponsored events contribute to brand equity by

Improving brand awareness Adding new associations Improving strength, favorability, uniqueness of existing associations

Extent to which transfer takes place depends on the event selected, how the program is designed and integrated into marketing programs to build BE

Ways of Linking Secondary Knowledge to the Third Party Sources can be seen as credible Brand
sources and often featured in ad campaigns

Dental association, experts, improve associations and attitude towards the brand It can also affect at the local level type of bars for cigarette / alcohols Satisfaction indexes, awards