8.0 Managing Brands

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Managing Brands

What Constitutes a Brand? Name Term Symbol Sign Design Trademark Logo

Package design Sound Spokesperson Smell Or any other unique

element that identifies a firm’s product

Importance Of Branding – Consumer Viewpoint

Easy means of identification Helps in evaluating quality of products Provides psychological rewards (status,

prestige, etc.)

Importance Of Branding – Marketer’s Viewpoint

Creates brand identity Aid in advertising and display Helps increase control and market share Reduces price comparisons and stabilizes

prices Facilitates expansion of product mix

Basic Branding Concepts Brand associations: meanings product has

for customers. Brand identity: associations firm wants

people to hold. Brand image: associations people actually

hold. Brand personality: enduring and distinct

human characteristics associated with brand. Brand positioning: attempts to align brand

image with brand identity.

Customers’ View of Brand Perceptions and associations about

product, service or company. Embody values that create meaning for

customers. Meanings represent promise of experience

customers expect when use brand.

Brand Associations Can be built on:

Attributes, benefits, values, culture, personality, user

Effective brand associations: Strong – relevant, consistent over time Favorable – desired and delivered by brand Unique

GeneralElectric

reliable

American

kitchen

appliance

vacuumcleaner

electric

powertool

sanderdrill

garage

sawdust

robust

Black &Decker

Customer View: Brand Associations

Levels of Branding

Carrefour CitiGroup

Ragu, Claritin, Chevrolet

Camry, Fiesta, Leaf, MX-5 Miata

Group of Products

Product Line

Individual Product

Brand’s Tangible Impact on Consumers’ Product Experience

Source: de Chernatony and McDonald (1992)

Blind test

…tastesbetter

...tastesbetter

Indifferent

Brand’s Tangible Impact on Consumers’ Product Experience

Source: de Chernatony and McDonald (1992)

Blind test

…tastesbetter

...tastesbetter

Indifferent

Open test

...tastesbetter

Indifferent

Characteristics ofGood Brand Name

Creates positive connotation. Is memorable. Positions product by conveying image or

personality (Ford Mustang) or describing how it works (Drano).

Is easy to say, spell, read, and remember (Tide, Gleem).

Fits target market, product benefits (e.g., Beauty rest, 5 Hour Energy, Minute Rice) , customer’s culture, and legal requirements.

Brand Equity DefinitionsCustomer Brand Equity – brand value to customers

Value received from brand, over and above unbranded version.

Firm Brand Equity – brand value to firm

Brand’s cash flow streams over and above unbranded alternative.

Factors Leading to High Customer Brand Equity

Comparing alternative products is difficult. Customers do not realize value until some

time after purchase Customers inexperienced or unfamiliar with

product class Product quality from some suppliers is

variable Product is socially visible Mental flexibility in portraying brand

Leading U.S. Brands1925 and 2000

Product Leading Brand 1925

Position2011

Product Leading Brand 1925

Position2011

Batteries Eveready Leader Razors Gillette LeaderBreakfast cereal

Kellogg Leader Shortening Crisco Leader

Canned fruit Del Monte Leader Soap Ivory LeaderChewing gum Wrigley Leader Soft drink Coca-Cola LeaderChocolates Hershey Leader Soup Campbell’s LeaderCookies Nabisco Leader Tea Lipton LeaderFlour Gold Medal Leader Tires Goodyear LeaderPaint Sherwin-

WilliamsLeader Toothpaste Colgate Leader

Advantages ofHigh Firm Brand Equity

Higher prices and better margins More easily introduce similarly branded items

in different product classes and markets Use cross-selling to encourage existing

customers to purchase different product classes

Generate leverage in distribution channels Raise entry barriers for competitors Exploit licensing opportunities

Brand Values 2010:Interbrand MethodTop 10

Rank (2010)

Brand Name Country of Origin

Industry Firm Brand Equity ($U.S. billion)

1 Coca-Cola U.S. Beverages $70.52 IBM U.S. Computers $64.73 Microsoft U.S. Software $60.94 Google U.S. Internet $43.65 McDonald’s U.S. Food $33.66 General Electric U.S. Diversified $42.87 Intel U.S. Computers $32.08 Nokia Finland Telecoms $29.59 Disney U.S. Entertainment $28.710 Hewlett-Packard U.S. Computers $26.9

Branding Strategies Individual (Multi) branding – using

different brand names for different products Example: Proctor & Gamble detergents –

Bold, Cheer, Dash, Era, Gain, Ivory Snow, Oxydol, Tide

Pros: “Clear” identity Cons: More expensive to introduce

Branding Strategies (cont’d) Umbrella/family branding – marketing

several different products under the same brand name Examples: Heinz and Del Monte

Pros: Less expensive to introduce Cons: If new product fails, can “pollute”

family name

Branding Strategies (cont’d) Combination branding – combines a

family brand name and an individual brand name Examples: Microsoft XP, Microsoft Office

Corporate branding - practice of using a company's name as a brand name Examples: Intel, Mercedes, IBM

Line and BrandExtension Strategies

Line extension - Use current brand to enter new market segment in product class ( New flavors, forms, color, ingredients, package sizes

etc. Examples: Michelob, Michelob Light

Arrid, Arrid Extra Dry

Brand extension - Use current brand name to enter completely different product class Brand broadening (leveraging) Examples: Honda Cars to Lawnmowers, Swiss Army

Knives to Luggage

Brand Extension Strategy New products that build on brand equity of

existing brand Advantages:

Instant name recognition Establish quality levels Saves on advertising costs

Risks Bad products may damage image of other products Dilution of distinctiveness

Branding Strategies (cont’d)

Licensing: sells right to use brand name for specific purpose and time

Co-branding: combines two brands

Repositioning Brand Target new market segment(s) Change brand associations Alter the competitive target

8.0 Managing Brands

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