CHAPTER 1: BRANDS & BRAND MANAGEMENT

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What is a brand?
The American Marketing Association (1960) proposed the following company- oriented Definition of a brand as: a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. These different components of a brand that identify and differentiate it are brand elements. This definition has been criticised for being too product-oriented, with emphasis on visual features as differentiating mechanisms (Arnold, 1992; Crainer, 1995). Despite these criticisms, the definition has endured to contemporary literature, albeit in modified form. Watkins (1986), Aaker (1991), Stanton et al. (1991), Doyle (1994) and Kotler et al. (1996) adopt this definition. Dibb et al. (1997) use the Bennett (1988) variant of the definition which is:
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What is a brand?
A brand is a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers.
The key change to the original definition are the words ``any other feature'' as this allows for intangibles, such as image, to be the point of differentiation. The particular value of this definition is that it focuses on a fundamental brand purpose, which is differentiation. It should not be forgotten that brands operate in a market environment where differentiation is crucially important (Wood Lisa , 2000)

What is a brand?
Many practicing managers refer to a brand as more than that as something that has actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace. We can make a distinction between the AMA definition of a brand with a small b and the industrys concept of a Brand with a capital b.

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Brands vs. Products

A product is anything we can offer to a market for attention, acquisition, use, or consumption that might satisfy a need or want. A product may be a physical good, a service, a retail outlet, a person, an organization, a place, or even an idea.

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Product What Useful object or service

Brand Feelings and associations which exist in your consumer mind Builds an emotional connection Loyalty Consistent, differentiating, affirming

Consumer Value Consumer relationship Consumer experience

Serves a need None/commodity Functional

Example

I need a computer to get my work done

Macs are just better designed more productive and more funs

Five Levels of Meaning for a Product

The core benefit level is the fundamental need or want that consumers satisfy by consuming the product or service. The generic product level is a basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features. This is basically a stripped-down, no-frills version of the product that adequately performs the product function. The expected product level is a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. The augmented product level includes additional product attributes, benefits, or related services that distinguish the product from competitors. The potential product level includes all the augmentations and transformations that a product might ultimately undergo in the future. 1.8

 The CORE product is NOT the tangible, physical product. You can't touch it. That's because the core product is the BENEFIT of the product that makes it valuable to you. So with the car example, the benefit is convenience i.e. the ease at which you can go where you like, when you want to. Another core benefit is speed since you can travel around relatively quickly.

Example- Car
Core product : Transportation from one place to another. Actual Product : Brand of the car, looks and design of the car etc. Expected Product : Decent mileage, proper engine, inflated tyres etc. Augmented Product : After-sale services, insurance policy etc. Potential Product : May run more smoothly as it wears off a little.

Example- Hotel
Example of a service: a hotel room Core benefit: the inner urge of customers to sleep and have some privacy and silence. Basic product: a hotel room with a single bed, and basically thats all. Expected product: a hotel room with a bed that is neat and clean, and the room has at least a small bathroom. Augmented product: a hotel room with a bed in a popular hotel; the room has a nice bathroom with hair dryer, is air conditioned and has a TV and a minibar. Potential product: a hotel room with a huge double bed with water mattress, LCD television, a big bathroom with a hydro-massage shower cabin, etc.

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

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

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Why do brands matter?

What functions do brands perform that make them so valuable to marketers?

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Importance of Brands to Consumers

Identification of the source of the product Assignment of responsibility to product maker Risk reducer Search cost reducer Promise, bond, or pact with product maker Symbolic device Signal of quality
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Reducing the Risks in Product Decisions

Consumers may perceive many different types of risks in buying and consuming a product: Functional riskThe product does not perform up to expectations. Physical riskThe product poses a threat to the physical well-being or health of the user or others. Financial riskThe product is not worth the price paid. Social riskThe product results in embarrassment from others. Psychological riskThe product affects the mental well-being of the user. Time riskThe failure of the product results in an opportunity cost of finding another satisfactory product.
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Importance of Brands to Firms

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

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Importance of Brands to Firms

Identification to simplify handling or tracing Legally protecting unique features Signal of quality level Endowing products with unique associations Source of competitive advantage Source of financial returns

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Can everything be branded?

Ultimately a brand is something that resides in the minds of consumers. The key to branding is that consumers perceive differences among brands in a product category. Even commodities can be branded:
Coffee (Maxwell House), bath soap (Ivory), flour (Gold Medal), beer (Budweiser), salt (Morton), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), chickens (Perdue), pineapples (Dole), and even water (Perrier)
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Define Commodity
1. The basic idea is that there is little differentiation between a commodity coming from one producer and the same commodity from another producer - a barrel of oil is basically the same product, regardless of the producer. Compare this to, say, electronics, where the quality and features of a given product will be completely different depending on the producer. Some traditional examples of commodities include grains, gold, beef, oil and natural gas. More recently, the definition has expanded to include financial products such as foreign currencies and indexes. Technological advances have also led to new types of commodities being exchanged in the marketplace: for example, cell phone minutes and bandwidth.

Branding is Universal (anything can be branded)

Commodity Chicken, Coffee, salt, fruits, vegetables, water,

etc.

Physical good - Consumer products; Business to Business;

High-tech products.

Services Jet Airlines, United Airlines, AB Bank , Qubee etc Retailers and distributors Agora, Swopno, Mina Bazar etc
On-line product and services google, e-bay, etc, Cell Bazar, People and Organizations Paul Newman. Sports, Arts, and Entertainment Cowboys?
Geographic Locations Coxbazar, Kolkata. Ideas and Causes Red

An Example of Branding a Commodity

De Beers Group added the phrase A Diamond Is Forever

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 The real causes of enduring market leadership are vision and will. Enduring market leaders have a revolutionary and inspiring vision of the mass market, and they exhibit an indomitable will to realize that vision. They persist under adversity, innovate relentlessly, commit financial resources, and leverage assets to realize their vision.
Gerald J. Tellis and Peter N. Golder, First to Market, First to Fail? Real Causes of Enduring Market Leadership, MIT Sloan Management Review, 1 January 1.23 1996

Source of Brands Strength

Importance of Brand Management

The bottom line is that any brandno matter how strong at one point in timeis vulnerable, and susceptible to poor brand management.

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Brand Rating Definitions

Rating
AAA
AA A BBB BB

Definition
Extremely strong
Very strong Strong Average Underperforming

Rating
AAA AA A BBB -B CCC-C

Definition
Extremely strong Very strong Strong Average Very weak

B
CCC CC C

Weak
Very weak Extremely Weak Failing

DDD-D

Failing

Source:

http://brandirectory.com/methodology

Source: Sri Lankans most valuable brands. LMD the voice of business. Vol. 13(8), March 2007, p. 102.

Best Global Brand

Indian Best Brand

Branding Challenges and Opportunities

Savvy customers (It means they are very knowledgeable about the
differences in price and quality between the various brands (considered)

Brand proliferation (brand proliferation is when a company puts on the

market a product and variants of a product under different names.)

Media fragmentation (Describes a trend to increasing choice and

consumption of a range of media in terms of different channels such as web and mobile and also within channels, for example more TV channels, radio stations, magazines, more websites. Media fragmentation implies increased difficulty in reaching target audiences.)

Increased competition Increased costs Greater accountability

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Problems Brand Proliferation

First, the larger the number of brands in the company's portfolio,
the greater the overlap of brands on target segments, positioning, price, distribution channels, and product lines. The overlapping results in cannibalization of sales and duplication of effort. If managed poorly, many of the brands in the portfolio may end up competing with each other rather than with the brands of competitors. Second, a larger brand portfolio means lower sales volumes for the individual brands as the total market divides among them. Without scale economies in product development, supply chain, and marketing, firms cannot support each brand at competitive levels. Third, the rise of powerful mass merchants such as B&Q, Carrefour, and Wal-Mart has triggered brand consolidation perhaps more than anything else. Retailers' tremendous negotiating power, especially against weaker brands, forces manufacturers to critically evaluate their brand portfolios. Finally, marginal brands end up consuming a disproportionate amount of a company's time and resources, and exacerbate tensions between the narrowly focused brand and country managers.

Examples Brand Proliferation

Colgate Dental Cream: The mega brand,
the category volume driver.

Colgate Gel: Positioned

as giving long-lasting fresh breath

Colgate Cibaca Top:

Positioned on economy

Colgate Total: With

therapeutic, multi-benefits positioning

Ponds dreamflower talc Ponds dreamflower talc magic Ponds sandal talc Ponds cold wash Ponds face wash Ponds cold cream Ponds moisturising lotion Ponds dreamflower moisturising bodylotion

The Brand Equity Concept

No common viewpoint on how it should be conceptualized and measured It stresses the importance of brand role in marketing strategies. Brand equity is defined in terms of the marketing effects uniquely attributable to the brand.
Brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name.

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Brand Equity Define

The value of a brand. From a consumer perspective, brand equity is based on consumer attitudes about positive brand attributes and favorable consequences of brand use. American Marketing Association

A set of assets and liabilities linked to a brand, its name and symbol, that adds to or subtracts from the value provided by a product or service to a firm and/or to that

 The tangible and intangible value that a brand provides positively or negatively to an organization, its products, its services, and its bottom-line derived from consumer knowledge, perceptions, and experiences with the brand. Susan Gunelius

This definition hits the three main points that define brand equity:
Tangible and intangible value: This can be tangible value such as revenues and price premiums or intangible value such as awareness and goodwill. Positive or negative effects: The organization, products, services, and bottom line can benefit or suffer from brand equity. Consumer catalysts: Brands are built by consumers, not companies. Therefore, brand equity is built by consumers too.

Brand Equity
The additional money that consumers are willing to spend to buy Coca Cola rather than the store brand of soda is an example of brand equity.
One situation when brand equity is important is when a company wants to expand its product line. If the brand's equity is positive, the company can increase the likelihood that customers will buy its new product by associating the new product with an existing, successful brand. For example, if Campbell's releases a new soup, it would likely keep it under the same brand name, rather than inventing a new brand. The positive associations customers already have with Campbell's would make the new product more enticing than if the soup had an unfamiliar brand name.

Brand Equity Benefits

Positive brand equity can help a company in a variety of ways. The most common is the financial benefit which enables a company to charge a price premium for that brand. For example, the Tiffanys brand has enough equity that a price premium isnt just accepted, its expected. Positive brand equity can also help to expand a company through successful brand extensions and expansions. And not only can brand equity help increase sales and revenues, but it can also help reduce costs. For example, there is little need for awareness promotions for a brand that has deep, positive equity. Marketing budgets can be more strategically invested in initiatives that will drive short-term results. A company with strong brand equity is also positioned for long-term success because consumers are more likely to forgive bumps in the road when they have deep emotional connections and loyalties to a brand. Positive brand equity helps a company navigate through macroenvironmental challenges far more easily than brands with little or negative brand equity can.

Strategic Brand Management

It involves the design and implementation of marketing programs and activities to build, measure, and manage brand equity. The Strategic Brand Management Process is defined as involving four main steps:
1. Identifying and establishing brand positioning and values 2. Planning and implementing brand marketing programs 3. Measuring and interpreting brand performance 4. Growing and sustaining brand equity
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Strategic Brand Management Process

Steps
Identify and establish brand positioning and values

Key Concepts
Mental maps Competitive frame of reference Points-of-parity and points-of-difference Core brand values Brand mantra Mixing and matching of brand elements Integrating brand marketing activities Leveraging of secondary associations Brand value chain Brand audits Brand tracking Brand equity management system Brand-product matrix Brand portfolios and hierarchies Brand expansion strategies Brand reinforcement and revitalization

Plan and implement brand marketing programs

Measure and interpret brand performance

Grow and sustain brand equity

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