Brand Management Handout

8/6/2019 Brand Management Handout

1/56

Brand Management Notes by Bilal Mustafa Khan

Brands: The important distinction is between a product and a brand. A product is

something with a functional purpose. A brand offers something in addition to its

functional purpose. All brands are products (including brand as Citibank and Air India

that are technically services) in that they serve a functional purpose.

But not all products are brands. In fact a brand and can be defined as, A brand is a

product that provides functional benefits plus added values that some consumer valueenough to buy. Added values form the most important part of the definition of a brand.

We've all heard the story of the blind men and the elephant. Different men

examine different parts of an elephant. One examines the trunk and concludes that "an

elephant is like a vine". Another examines a leg and concludes that "an elephant is like a

pillar". A third examines the tail and concludes "an elephant is like a rope". A fourth runs

his hand across the elephant's side and concludes "an elephant is like a wall'. All of them

are correct. All of them miss the essential truth. An elephant is much more than the sum

of its anatomical parts. It is a living, breathing being.

Consumer taste differs so widely that no brand can be all things to all people.

Moreover any manufacturer who strives to cover too vide a filed will produce a brand

that is number two or number three over a wide range of attributes, rather than number

one over a Limited range of attributes (which might enable it to become first choice to a

Limited group of consumers, the normal route to success.

The strongest brands are often the most distinctive. But in their distinctiveness they are

also generally well balanced between motivating benefits those (generally functional)

benefits that prompt the consumer to use any brand in the product field and

discriminating benefits - those prompting the consumer to buy one brand rather them

another. All brands are different from each other in the obvious sense that the names andpackaging are different. But distinctiveness over and beyond this is highly desirable,

although distinctiveness based so much on discriminators that it neglects motivators is a

recipe for a weak brand..

Bilal Mustafa Khan 2010. Department of Business Administration. Only for

internal distribution and class discussion. The material may not be reproduced in

any form without prior permission either in parts or whole.

EmotionalBenefits

FunctionalBenefits

DiscriminatorsPro

duc

Br

an

Motivators


2/56


Event brands (periodic experiences, usually within the worlds of sports, entertainment, or

fine arts) achieve their promoters' goals by making the most of the traditional approaches

to brand building. While it can be argued that professional golf's Master's tournament

(and the other three "majors", as well) has been a brand of sorts for many years, it is only

with the coming of enormous television contracts that the financial value of the brand has

been realized. The same can be said of dozens of other athletic events. Geographicalbrands (cities, countries, resorts) have become common because businesses in particular

areas have also recognized the value of selling their locales using some traditional, and

non-traditional, brand building methods. Tourism directors from Orlando to Las Vegas,

from Alabama to Bangkok, have created brands to help sell their part of the planet.

The word "brand", when used as a noun, can refer to a company name, a product name,

or a unique identifier such as a logo or trademark.

In a time before fences were used in ranching to keep one's cattle separate from other

people's cattle, ranch owners branded, or marked, their cattle so they could later identify

their herd as their own. .

The concept of branding also developed through the practices of craftsmen who wanted

to place a mark or identifier on their work without detracting from the beauty of the

piece. These craftsmen used their initials, a symbol, or another unique mark to identify

their work

Not too long afterwards, high quality cattle and art became identifiable in the consumer's

mind by particular symbols and marks. Consumers would actually seek out certain marks

because they had associated those marks in their minds with tastier beef, higher quality

pottery or furniture, sophisticated artwork, and overall better products. If the producer

differentiated their product as superior in the mind of the consumer, then that producer's

mark or brand came to represent superiority.

Today's modern concept of branding grew out of the consumer packaged goods industry

and the process of branding has come to include much, much more than just creating a

way to identify a product or company.

Branding today is used to create emotional attachment to products and companies.

Branding efforts create a feeling of involvement, a sense of higher quality, and an aura of

intangible qualities that surround the brand name, mark, or symbol.

So what exactly is the definition of "brand"? Let's cover some definitions first before we

get too far into the branding process.





3/56


"If a product is something that is produced to function and exist in reality," says Philip

Durbrow of Frankfurt Balkind, an international design firm based in San Francisco, "then

a brand has meaning beyond functionality and exists in people's minds." Part art, part

science, brand is the difference between a bottle of soda and a bottle of Coke, the

intangible yet visceral impact of a person's subjective experience with the product the

personal memories and cultural associations that orbit around it.The goal of branding is to convince the public that a brand is trustworthy and thus worth

paying a premium for. The buyer is assured that the branded product will perform as

expected. But that is not the only reason why people are willing to pay a premium for

some brands.

Consider the differences that exist between a Rolex watch and one made by Timex. Trust

in their respective abilities to accurately keep track of time is not what justifies that one

can cost 100 to 500 times more than the other. Sure, the Rolex watch is well made and is

truly waterproof, whereas the Timex may only be "water-resistant," a lower standard of

water-tightness. A few SCUBA divers may wear Rolex watches but I am ready to bet that

the majority of Rolex wearers have never seen a decompression table...

People are willing to pay a premium price for brands that help define their self-image and

their social image.

Successful brand marketers can convince you that their brands are worth paying a little

more for because "you are worth it," and because there are brands that someone with your

standing in society should prefer over others. This effect of branding can be felt in every

category of product or service, from automobiles to floor cleaners. It is more likely to be

apparent where the product is worn or used for all to see, but it exists everywhere.

A brief history of branding

The phenomenon of branding has roots running deep into economic history. Stone Age

toolmakers undoubtedly had trademark styles that signaled potentially greater success in

the hunt. Particularly accomplished Viking shipbuilders may have had valuable brands

of vessels. Certainly silversmiths over the centuries, including Paul Revere, the American

colonial patriot, included marks on their wares to indicate both the purity of the metal

and the craftsmanship embodied in the product.

The English word brand is derived from burning, a reference, in the word's

business sense, to the embers once used to burn the mark of the owner onto livestock,

casks, timber, metal, or other goods.

Indeed, brandingthe use of symbols to concisely convey information about a product or

servicecan be seen as a quintessential human activity. It is also a fundamental building

block of commerce: Without information about a producers or a sellers reputation, trade

would grind to a halt. (The seller ratings on the eBay Internet auction site represent just





4/56


one conspicuous contemporary example.) The real power of brands, however, dates to the

time when this indicator of reputation was transferred from the individual to a larger

business enterprise. The shift magnified brands impact, extended their geographic reach,

and resulted in wealth creation for numerous employees.

Josiah Wedgwood is often cited as the father of the modern brand. Beginning in the

1760s, Wedgwood placed his name on his pottery and china to indicate their sourcehisstate-of-the art factoriesand therefore their quality. But the Wedgwood name came to

stand for something more. Nearly two hundred years before the advent of mass media,

and without using conventional advertising, Wedgwood used royal endorsements and

other marketing devices to create an aura around the name of his company that gave the

brand a value far beyond the attributes of the product itself. His business design of mass

production and distribution enabled him to capture the value created by his calculated

association of his product with a rich and famous lifestyle and his exploitation of

customers social aspirations.

In many ways, branding has stepped away from Wedgwoods precepts during the latter

part of this century. With the development of new media, particularly television, and the

huge post- World War II boom in consumption and birthrates, a mass market was born.

Rising demand and standards of living created an era where market share was king: The

player with the leading share would have the lowest cost and the highest profitability.

Quite simply, a brand is a promise to the customer a mirror in which the customer sees

a reflection of him or herself and identifies with, or rejects, the promise he or she sees.

Likewise, a brand is also a reflection of your organization. Your brand serves to define

your organization and influences every aspect of your operation, right down to corporateculture. Whether measured in SKU per second shopping, margins or shareholder value,

the power of your brand has far-reaching impact. On stock valuation. On marketing costs.

Even on employee retention rates.

For customers, branding plays two important roles:

In a world with lots of choices, it tells them which choice is right. It serves as a

customers compass out of the chaos of competing choices. Whats best for me?

In a world full of change and confusion, it helps them define who they are it gives

them a badge. Good Mother, Dedicated Athlete, Hip Teenager.

Branding

Brands are all about how consumers position themselves. Powerful brands succeed by

establishing a relationship, a connection, with their customers. To establish that





5/56


connection to earn a place in their world a brand must know its customers and

become a part of how customers want to see themselves.

Quite simply, a brand is a promise to the customer a mirror in which the customer sees

a reflection of him or herself and identifies with, or rejects, the promise he or she sees.

Likewise, a brand is also a reflection of your organization. A brand serves to define the

organization and influences every aspect of its operation, right down to corporate culture.

Whether measured in SKU per second shopping, margins or shareholder value, the power

of your brand has far-reaching impact. On stock valuation. On marketing costs. Even on

employee retention rates.

Moreover a brand is the proprietary visual, emotional, rational, and cultural image that

one associates with a company or a product. When you think Volvo, you might think

safety. When you think Nike, you might think of Andre Agassi or "Just Do It." When you

think IBM, you might think "Big Blue." The fact that you remember the brand name and

have positive associations with that brand makes your product selection easier and

enhances the value and satisfaction you get from the product.While Brand X cola or even Pepsi-Cola may win blind taste tests over Coca Cola, the fact

is that more people buy Coke than any other cola and, most importantly, they enjoy the

experience of buying and drinking Coca Cola. The fond memories of childhood and

refreshment that people have when they drink Coke is often more important than a little

bit better cola taste. It is this emotional relationship with brands that make them so

powerful.





6/56


For customers, branding plays two important roles:

1. In a world with lots of choices, it tells them which choice is right. It serves

as a customers compass out of the chaos of competing choices. Whats best

for me?

2. In a world full of change and confusion, it helps them define who they are it gives them a badge. Good Mother, Dedicated Athlete, Hip Teenager.

Brand Types

Parent Brands

IBM, Microsoft, Disney, Wipro

Parent brands serve as our basis for identification they provide recognition and quality

reassurance. They say safe, reliable, trustworthy. We associate parent brands with a set

of values and imagery, and they evoke certain expectations about what our experience

will be using that brand.

Line Brands

Citicorp Securities, Surf Excel, Disneyland, Lay s

Line brands bring texture and tangible relevance to the parent brand, while adding the

distinctive appeal of their own unique identity. Line brands code a product/service for a

specific usage experience a particular situation or occasion and provide information

about the intended user. They serve as a telegraphic communicator of attributes as well as

functional and emotional benefits.

The Job of PositioningWhen we interact with a brand, we experience it through a variety of attributes. All of

these attributes tell us how to feel about a particular brand:

What is it (cognitive)

What does it look like (visual)

How does it feel (emotional)

What does it stand for (symbolic)

How does it sound (auditory)

Brand positioning builds a bridge between the larger self of the consumer (How I want

to see myself) with a larger idea about a product or service (Kodak = immortality). It

constantly seeks to build the relevance and equity of your brand. Proper positioning

allows your customer to say, This is the right choice for me.

Effective Positioning

Is intrusive, it cuts through the clutter.





7/56


Is relevant, it constantly asks, how can we join consumers rather than asking

consumers to join you.

Differentiates, it demonstrates whats really different about your brand compared

to everyone else.

Strengthens margin, it establishes ownership of the category, not just squatter's

rights, by focusing on increasing brand equity. Creates demand, it links the consumer back to the category via the brand.

Is consistent, it demands loyalty to consumers rather than requesting their loyalty

to you. It requires you to be faithful to your brand and leverage it fully.

Is customer-focused, it speaks in todays consumer currencies: time, energy,

money, quality and self-esteem.

What makes up a brand identity?

Brand identity includes brand names, logos, positioning, brand associations, and brand

personality. A good brand name gives a good first impression and evokes positive

associations with the brand. A positioning statement tells, in one sentence, what business

the company is in, what benefits it provides and why it is better than the competition.

Imagine you're in an elevator and you have 30 seconds to answer the question, "What

business are you in?" Brand personality adds emotion, culture and myth to the brand

identity by the use of a famous spokesperson (Palmolive Kapil Dev), a character (the

Pink Panther), an animal (the Ceat Rhino) or an image (There is a bit of steel in

everybodys life)

Brand associations are the attributes that customers think of when they hear or see the

brand name. McDonalds television commercials are a series of one brand association

after another, starting with the yellow arches in the lower right corner of the screen and

following with associations of Big Mac, Ronald Mcdonald, kids, Happy Meal, consistent

food quality, etc.

The Brand Benefit Hierarchy

Powerful brands allow us to join and connect to something larger than ourselves. We

associate a brand with a whole bundle of increasingly meaningful benefits a hierarchy

of needs. Brands help us define who we are. Great brands recognize that they play an

important role in how people position themselves in the world, which is the true focus of

positioning.





8/56


Brand Essence: Signing Up for Something Bigger

Great brands are unambiguously anted on quality, deeply felt emotional benefits,

identified fundamental beliefs and values. They have a ubiquitous presence and,importantly, sell to diverse segments of consumers. But the best brands have all gone

beyond attributes, functional benefits and emotional benefits to articulate their brand

essence they have signed up for something bigger by finding not what separates

different segments of consumers but what unites them. Thus, powerful brands badge both

the product and the user simultaneously. Brand soul the emotional end benefit

drives everything about that brand and defines brand personality.

BRANDS AND ADDED VALUES

The important distinction is between a product and a brand. A product is

something with a functional purpose. A brand offers something in addition to its

functional purpose. All brands are products (including brand as Citibank and Air India

that are technically services) in that they serve a functional purpose.

But not all products are brands. In fact a brand and can be defined as, A brand is

a product that provides functional benefits plus added values that some consumer value

enough to buy.

Added values form the most important part of the definition of a brand. Before we

discuss added values two general points must be discussed briefly.

First, the strongest brands are often the most distinctive. But in their

distinctiveness they are also generally well balanced between motivating benefits those

(generally functional) benefits that prompt the consumer to use any brand in the product

filled and discriminating benefits - those prompting the consumer to buy one brand

rather them another. All brands are different from each other in the obvious sense that the

names and packaging are different. But distinctiveness over and beyond this is highly





9/56


desirable, although distinctiveness based so much on discriminators that it neglects

motivators is a recipe for a weak brand.

Second, consumer taste differs so widely that no brand can be all things to all

people. Moreover any manufacturer who strives to cover too vide a filed will produce a

brand that is number two or number three over a wide range of attributes, rather than

number one over a Limited range of attributes (which might enable it to become first

choice to a Limited group of consumers, the normal route to success).

Most brand have a known and restricted range functions and added values are

non-functional the manufactures benefits over and beyond these.

The major sources of added values can be listed as:

1. Added Values that come from Experience of the Brand :-

These include familiarity, known reliability and reduction of risks. A brand becomes

an old friend. This includes the important notion of brand personality the personality

of the brand itself its functional and non-functional features as they might be

described in quasi human terms.

2. Added Value that come from the sort of people who use the brands:-

Rich and snobbish, young or glamorous or masculine or feminine. There are

enormous examples of brands which have these user association, most of which are

fostered by advertising. Association can be with our individual or an entity or it can

be user groups also.

3. Added values that come from the belief that the brand is effective:-

This is related to the way in which some brands work on peoples belief and there is

sufficient evidence to prove that branding in such product affects the minds influence

over body processes. Belief in effectiveness also plays an important role with

cosmetics with their ability to make their users feel more beautiful with generally

beneficial results.

4. Added value which come from the apperance of the brand:-

This is the prime role packaging two identical products with different packaging may

not be equally attractive to consumers. There is strong evidence which points out that

in many product categories the physical appearance of the brand plays a major in

purchase decision (e.g. white goods). If a consumer if offered a choice between two

products having similar features and attributes, but different styling: e.g. one is

extremely sleek and the other is just a basic covering than the consumer would prefer

the first alternative.

5. Added values that come from the manufacturers name and reputation:-

This is another source of added value which results from an established and reputed

manufacture quality of product and service quality. But in certain situations these

may not make an impact and they are:





10/56


a) When the consumers do not known who the manufacturer of a particular brand they

use, then obviously there are no role of added value which result from reputation etc.

b) A familiar brand name is no longer needed as a guarantee of new products

homogeneity and quality. Branded goods are known to be homogenous and to

perform their function well. Yet there have been instance where brands spell different

(e.g. Philips produced average quality as well as high quality goods) hence there no

guarantee that a new product by Philips would be of average or high quality.

The contribution of added values to consumer choice is easily demonstrated by the

commonly used technique of matched product tests. In these tests, a sample of

consumer use and judge brands in coded but unnamed package and a second and

similar sample of consumers uses and judges those same brand in their normal

containers. The invariable pattern is that the preferences among identified brands are

quite different from preferences among those same brands in coded but unidentified

containers.

The subject of added values is quite alluring by in conclusion, added values in abrand arise from peoples use and familiarity from the advertising and associations

and from packaging. If follows that added values are not immediately available to

manufacture of new brand but are built over time and therefore initially a brand must

solely survive on its superior functional performance.

FACTORS THAT SHAPE A BRAND DURING ITS CONCEPTION & BIRTH

Five influences on a new brand: The following are the five major forces, which

shape a brand: -

1. FUNCTIONAL PERFORMANCE:

A new brand is like a newborn child, which comes naked in this world. Without superior

competitive functional performance in at least some respect it has little chance of

succeeding; it will not persuade a person who buys it on a trial basis or who receive a free

sample to buy it again. One of the key roles of the pack design, the introductory

promotions and the advertising is to communicate this functional performance clearly and

forcefully.

The pack as an advertising medium and the advertising itself should also begin to build

those added values that are vital to protect the brands often rather fragile franchise, oncecompetitors have moved towards functional parity with it. That is the new brands need

the edge of added values to maintain its position when as often happens, it loses within

months the advantage of its initial functional lead.

If when enters the market, the brand is to be bought more than once, the decision

is essentially based on its functional properties.





11/56


Evidence points out that the functional superiority of a potentially successful

brand also provides under pining and support for the other factors contributing to success,

notably the effort of sales force. So, if the first and most important thing, its functional

performance, is recognized, synergy will lend a hand to boost its effect. But when a brand

is not going to succeed efforts of the sales force alone are not enough to compensate for it

functional weaknesses.

Competitive functional performance is not something that is important to new

brands and unimportant to mature brands, because the added values that these brands

have acquired over the years cannot provide a permanent bulwark against functionally

superior newcomers.

The first question for the manufacturer of a new brand to ask is from which

brands do we want to take business once this question has been answered, the firm can

direct R&D efforts to the specific functional performance with the new brand

characteristics (i.e. the new brand that is being developed should be superior

functionally/or in terms of functional performance). Once the competing brands are knowbetter and superior functional product/brand can be developed.

2. POSITIONING:

This is another major variable which influence the eventual outcome (failure & success)

of a brand. Positioning should be in tune with the brand objective and target market.

The positioning strategies can be classified into two brand groups. Price based

and non-price strategy. Price based implies that the product is positioned in terms of high

price/premium, value priced or economically priced/low priced. Non-price strategies

refer to Nemours positioning strategies like positioning by user, by symbol, competitor

etc.The key to successful positioning lies in identifying a key USP, which the firm

should focus on and hammer away on it trying to become no. one brand for a Ltd. no. of

consumers (e.g. Mercedes Engineered like no other car).

3. NAME:

Many marketing gurus feel that choice of brand name is a less substantial matter when

viewed in comparison to making sure that the brand is functionally effective and is

properly positioned in the market. Many marketers feel that the added values of a brand

are embodied with name, that there values can be transferred to another product by using

the brand as a common property this is the rational for the strategy of using and umbrella brand name for number of different products (a strategy often described as range

extensions or line extensions).

The most obvious point is that the danger of cannibalization is likely to be greater

where the products with the umbrella name are in competition with each other (e.g. Rin

bar & Rin Powder) than when they are not (Gillette Blades and Gillette after shave).





12/56


The only major advantage of using umbrella naming is within the same segments

((e.g. segments using one product like Denim After Shave can easily try Denim soap),

that is people who use one product under a brand name can, presumably easily be

persuaded to sample a second perhaps different category of product using that same

brand name. Usually the advantage is in term of reduced promotional and advertising

costs and efforts.

In fact market research data indicates that basically the success of a brand in a

new product category depends primarily on functional performance. The economic

advantage of umbrella naming are substantially illusory in the short and medium term.

Umbrella names are in general no worse on better than new names. As general rules the

level of success of a new brand is much more dependent on support levels than on name.

It is possible that umbrella names provide greater staying power, by enabling greater

addition to added values, which is essentially a long-term process.

In the long-term, an umbrella naming is really a part of a manufacturers corporate

policy an act of faith, and one of the basic elements on which his business is based and onwhich the firm might be included to attribute its long-term success in the marketplace.

4. PRICE:

In perhaps two-third of all cases, a new brand enters an existing market at a

premium price. The firm justifies this high price on the basis of innovation and functional

superiority of the brand over its competitors. In reality, the premium prices are charged to

fund the high cost of achieving sampling. The costs are usually at a high level to

compensate for the established position of existing brands with their stock of added

values, which have been acquired over the years and while a new brand only rarely

makes a profit during its first two years or so, deficit budgeting puts an automatic upward

pressure on the consumer price. There is also a good deal of evidence that, although new

and different brands will normally command a significant price premium, this premium

tends to narrow during the first few years of a brands life.

There are also facts to support the contention that premium prices are reasonably

well accepted as justification for functional improvement, although consumers are

heartening skeptical about manufacturer attempts to charge a premium price for no

obvious functional advantage at all.

Stephen king (developing new brands) suggests a useful investigative and

pragmatic approach to the question of initial pricing. The technique recommended is

research into consumer attitude based on direct and indirect questions, which will provide

guidance to the feasibility of skimming or penetration pricing.

On the other hand basing prices on derivation of production costs will tell the

manufacturer whether he will cover costs at a given level of output, it will give little

about whether the company will in fact be able to sell that output.

5. DISTRIBUTION:





13/56


One key factor influencing the immediate success (failure) of a new brand is the

ability of the manufacturers sales force to get it into distribution.

Expanded distribution is a result of success. If the brand goes well in the early

stages, the public demands it, retail branches hear from the head office. The word gets

around and more retailers want to stock it.

But a functional performance is not important to the consumer alone. Retailers

themselves, and even more importantly the sales force, are conscious of functional

superiority and its contribution to a brands success. Functional superiority will provide

conviction to the salesman and draw commitment from the retailer.

BRAND AWARENESS

Brand awareness refers to the strength of a brands presence in the consumers mind. It is

a measure of the percentage of the target market that is aware of a brand name. Marketers

can create awareness among their target audience through repetitive advertising and

publicity (Strydom et al., 2000:388). Brand awareness can provide a host of competitive

advantages for the marketer. These include the following Brand awareness provides the brand with a sense of familiarity.

Name awareness can be a signal of presence, commitment and substance.

The salience of a brand will determine if it is recalled at a key time in the

purchasing process.

Brand awareness is an asset that can be remarkably durable and thus sustainable.

It may be extremely difficult to dislodge a brand that has achieved a dominant

awareness level.

Organisations can create brand awareness by, firstly, having a broad sales base, andsecondly, becoming skilled at operating outside the normal media channels. A brand with

high brand awareness and with positively distinguishing associations will have a high

added value for consumer.

Brand awareness is measured according to the different ways in which consumers

remember a brand, which may include brand recognition, brand recall, top of the mind

brand and dominant brand

Brand recognition. Brand recognition relates to consumers ability to confirm

prior exposure to that brand when given the brand as a cue. It requires that

consumers can correctly discriminate the brand as having been previously seen or

heard. Brand recall. Brand recall relates to consumers ability to retrieve the brand from

memory given the product category, the needs fulfilled by the category or a

purchase or usage situation as a cue. It requires consumers to correctly generate

the brand from memory when given a relevant cue.





14/56


Top-of-mind brand. This is the brand name that first comes to mind when a

consumer is confronted with the name of a product classification.

Dominant brand. The ultimate awareness level is brand name dominance, where

in a recall task, most customers can only provide the name of a single brand.

Customers need information to be able to choose between alternative brands. However,

consumers are bombarded with increasingly more marketing messages. The challenge

therefore facing marketers is to build awareness and presence both economically and

efficiently.

BRAND ASSOCIATIONS - A brand association is anything mentally linked to the

brand. An association can affect recall, provide a point of differentiation, provide a

reason to buy, create positive attitudes and feelings, and serve as the basis for trial.

Overall quality ratings, technological leadership, newness and associations with customer

benefits are the strongest. The combination of all associations supports the price whichcan be charged. The relative price position often is central. Whether the brand is in the

luxury, mid-price or budget, being at or near the top or bottom of the selected category is

often most advantageous.

Volvo is Safety.

Importance to marketers and consumers.

Brand associations are the category of a brand's assets and liabilities that include anything

"linked" in memory to a brand .Brand associations can also be defined as informational

nodes linked to the brand node in memory that contain the meaning of the brand for

consumers. Brand associations are important to marketers and to consumers. Marketers

use brand associations to differentiate, position, and extend brands, to create positive

attitudes and feelings toward brands, and to suggest attributes or benefits of purchasing or

using a specific brand. Consumers use brand associations to help process, organize, and

retrieve information in memory and to aid them in making purchase decisions.

High brand equity provides a company with many competitive advantages. A powerful

brand does not only enjoy a high level of consumer brand loyalty and awareness but also




This safety-pin print ad for Volvo,created in Japan, positions the carso perfectly. So simply and quickly.


15/56


has positive associations in consumer minds. Brand associations are perceptions and

images that people link with particular brands. A positive brand image is created by

marketing programmes that link strong, favourable, unique and admirable associations to

the brand in the consumers memory.

The associations attached to a company and its brands can therefore be key enduring

business assets. A brand association is anything that is directly or indirectly linked in theconsumers memory to a brand.

A brand represents the key to a products personality. It also says something about the

image of a company and its products. For marketers to create the right brand identity,

brand meaning, brand responses and brand relationship can be a complicated and difficult

process.

When marketers focus on creating positive brand awareness in the minds of consumers,

they should keep in mind that, although product-attribute associations can be powerful

(especially if a brand has a key attribute), the associations can fail to differentiate because

there is a tendency for all brands to position according to the most important product

attributes. Furthermore, an advantage on a product attribute is an easy target that is likely

to be copied or eventually surpassed. Finally, a strong product-attribute association limits

brand extension options and thus the strategic flexibility of the brand.

It is thus true that building strong brands and establishing brand equity is becoming

increasingly challenging . Strong brands therefore go beyond product attributes and

differentiate on brand associations, such as the following:

o Company associations. Focus on attributes of the organization rather than

attributes of the product or service.

o Brand personality. Uses the brand-as-person metaphor to help communicate a

brand and its relationships to customers.o Symbols. Provide cohesion and structure to a brand and make it much easier to

gain recognition and recall.

o Emotional benefits. Relate to the ability of a brand to make the buyer or user

feel something during the purchase process or use experience.

o Self-expressive benefits. Reflect the ability of the purchase and use of a brand to

provide a product for a persons personal expression.

Marketers should keep in mind that brand associations can also be negative and thus

detract from a brands equity.

A key step in creating and managing a brand asset is to determine the brands identity

in other words, the associations that the brand aspires to represent.The process of creating a brand identity overlaps significantly with the development of a

business strategy because future investments and points of differentiation for the

companies will drive the perceptions of the brand.

Conversely, it is self-defeating to aspire to a brand image if the company is unwilling

and/or unable to back up the vision with a plan and funds.





16/56


The brand, and its image and equity all allow the customer to perceive a promise of value

(Webster, 2003:1). Marketers should therefore build strong brands to ensure that the right

message is conveyed to the consumer. In so doing, marketers can accomplish the

following:

ensure identification of the brand with customers and an association of the brand

in the customers minds with a specific product class or customer need

establish the totality of brand meaning in the minds of customers by strategically

linking a host of tangible and intangible brand associations with certain properties

elicit the proper customer response to this brand identification and brand meaning

convert brand response to create an intense, active loyalty relationship between

customers and the brand.

Although print and broadcast media have played a huge role in building strong brands,

other forces are now coming into play. Factors such as customer service, and the

relationship that the organisation has with its customers are all part of the brand. This is

why many industries have started to focus on branding and brand equity.Some organisations have actually appointed other entirely different companies to focus

on brand management to ensure that the right message is communicated to consumers

through all communication mediums. Other companies manage their brands themselves,

by means of effective brand management.

PERCEIVED QUALITY

Brand equity creates and consistently delivers quality and value brands to consumers .

Perceived quality is a brand association that is elevated to the status of a brand asset for

various reasons, such as the following:

Perceived quality drives financial performance.

Perceived quality is often a major strategic thrust of products.

Perceived quality is linked to and often drives other aspects of how a

brand is perceived.

Part of a consumers image of a brand is based on actual facts and experiences. However,

another part of that image is based on perceptions born out of a products reputation,

media coverage and other indirect sources of information. A successful brand has a

recognizable name which signals specific attributes to the consumer

Marketers can create perceived quality, by firstly, having an understanding of what

quality means to customer segments; secondly, by having a supportive culture; andfinally, having a quality improvement process that will enable an organisation to deliver

quality products .

BRAND IMAGE

Simply put, brand image is how your customers, potential customers, suppliers, and the

general public sees you. Its how you are positioned in their minds. Large enterprises





17/56


spend a great deal of time and money on making sure that their brand projects exactly

what they want about the company. When theyre successful in branding themselves, the

payoff can be huge.

Take the global brandsHonda, MacDonalds, Nike, Cokethey all have very strong

brand franchises. Now pay attention here. Their brand franchises dont focus on productfeatures. Products can change. Features can change. Brands, if successful, can last

decades because they center on more enduring values. Think Honda and you think

reliability. You dont think power steering or antilock brakes. MacDonalds? You dont

think cheeseburger or shakes. MacDonalds is the place to take your family. Just do it

with Nike and youll be a winner. High-performance plastic is the furthest thing from

your mind. Do people buy Coke because it tastes sweet? No, they buy Coke because it

brings the world together. The key to having a good brand image is to have a consistent

perception of your company as it relates to important customer values. Once you strike

the right chord, customers will keep coming back. Ask two-time Honda owners what car

theyll buy next. Try to get a Coke drinker to switch to Pepsi. Whats more customers

will pay for brands. Just check out your local supermarket. Look at the price of the no-

name cereal compared to one put out by Kellogs. Brands always cost more. They

command a premium.

Having a good brand image is important to small businesses as well. Customers look for

the same things from large or small companies. They want to deal with a reputable and

trustworthy business. They want good value. They want quality. They'll choose a

company that projects that over one that doesn't any time any where.

Difference Between Corporate Identity, Brand Identity And Brand ImageIt is important to distinguish between corporate identity, brand identity, and brand

image. Corporate identity is concerned with the visual aspects of a company's presence.

When companies undertake corporate identity exercises, they are usually modernizing

their visual image in terms of logo, design, and collaterals. Such efforts do not normally

entail a change in brand values so that the heart of the brand remains the same - what it

stands for, or its personality. Unfortunately, many companies do not realize this fallacy,

as they are sometimes led to believe by agencies and consultancy companies that the

visual changes will change the brand image. But changes to logos, signage, and even

outlet design do not always change consumer perceptions of quality, service, and the

intangible associations that come to the fore when the brand name is seen or heard.The best that such changes can do is to reassure consumers that the company is

concerned about how it looks. Brands do have to maintain a modern look, and the visual

identity needs to change over time. But the key to successfully effecting a new look is

evolution, not revolution. Totally changing the brand visuals can give rise to consumer

concerns about changes of ownership, or possible changes in brand values, or even





18/56


unjustified extravagance. If there is a strong brand personality to which consumers are

attracted, then substantial changes may destroy emotional attachments to the brand.

People do not expect or like wild swings in the personality behavior of other people, and

they are just as concerned when the brands to which they have grown used exhibit similar

"schizophrenic" changes.

On the other hand, if the intention is to substantially improve the standing of thebrand, then corporate identity changes can be accompanied by widespread changes to

organizational culture, quality, and service standards. If done well, and if consumers

experience a great new or improved experience, then the changes will, over the longer

term, have a corresponding positive effect on brand image.

Brand identity is the total proposition that a company makes to consumers - the

promise it makes. It may consist of features and attributes, benefits, performance, quality,

service support, and the values that the brand possesses. The brand can be viewed as a

product, a personality, a set of values, and a position it occupies in people's minds. Brand

identity is everything the company wants the brand to be seen as.

Brand image, on the other hand, is the totality of consumer perceptions about the

brand, or how they see it, which may not coincide with the brand identity. Companies

have to work hard on the consumer experience to make sure that what customers see and

think is what they want them to.

THE BRAND IMAGE TRAP

Knowledge of the brand image (how customers and others perceive the brand)

provides useful and even necessary background information when developing a brand

identity. In the brand image trap, however, the patience, resources, or expertise to gobeyond the brand image is lacking, and the brand image becomes the brand identity rather

than just one input to be considered.

The brand image trap does not tend to occur when a brand image is obviously

negative or inappropriate. When there are only subtle image inadequacies caused by

customers' past brand experiences or by changes in their needs, however, the use of the

brand image as an identity statement often goes unchallenged.

While brand image is usually passive and looks to the past, brand identity should

be active and look to the future, reflecting the associations that are aspired for the brand.

While brand image tends to be tactical, brand identity should be strategic, reflecting a

business strategy that will lead to a sustainable advantage. The brand identity should alsoreflect the brand's enduring qualities, even if they are not salient in the brand image. Like

any identity, it represents the basic characteristics that will persist over time.

A brand identity is to brand strategy what "strategic intent" is to a business

strategy. Strategic intent involves an obsession with winning, real innovation, stretching

the current strategy, and a forward-looking, dynamic perspective; it is very different from





19/56


accepting or even refining past strategy. Similarly, a brand identity should not accept

existing perceptions, but instead should be willing to consider creating changes.

THE BRAND POSITION TRAP

A brand position is the part of the brand identity and value proposition that is to

be actively communicated to the target audience and that demonstrates an advantageover competing brands.

Thus the brand position guides the current communication programs and is

distinct from the more general brand identity construct. Some elements of brand identity

(such as cleanliness for a restaurant) may not be actively communicated, and other

elements (such as a product class association) will recede in visibility as the brand

matures. Thus there is a distinction between three related constructs:

BRAND

IMAGEBRAND IDENTITY BRAND POSITION

How the brandis now

perceived

How strategists wantthe brand to be

perceived

The part of the brand identity and valueproposition to be actively communicated to a

target audience

The brand position trap occurs when the search for a brand identity becomes a

search for a brand position, stimulated by a practical need to provide objectives to those

developing the communication programs. The goal then becomes an advertising tag line

rather than a brand identity.

This trap inhibits the evolution of a full-fledged brand identity, because strategists

continuously weed out those aspects that they feel are not worth communicating. The

tendency to focus on product attributes is intensified, and there is often no room toconsider brand personality, organizational associations, or brand symbols because they

simply do not make the cut when developing a three-word phrase.

Further, a compact phrase is unlikely to provide much guidance to brand-building

activities. A brand position does not usually have the texture and depth needed to guide

the brand-building effort which event to sponsor, which package is superior, or what

store display supports the brand. There is a need for a richer, more complete

understanding of what the brand stands for.

BRAND LOYALTY

Loyalty is an important concept in strategic marketing. Loyalty provides fewer reasons

for consumers to engage in extended information search among alternatives. Researches

also indicates that purchase decisions based on loyalty may become simplified and even

habitual in nature and this may be a result of satisfaction with the current brand(s). A

base of loyal customers will be advantageous for an organisation as it reduces the

marketing cost of doing business. In addition, loyalty can be capitalised on through





20/56


strategies such as brand extension and market penetration. Finally a large number of loyal

customers is an asset for a brand, and has been identified as major determinant of brand

equity .

Brand Loyalty is a crucial goal and result of successful marketing programs, salesinitiatives and product development efforts. At the core of every successful brand is a

nucleus of loyal customers. These "true believers" understand the brand better, purchase

more often and recommend the brand to others. Loyal customers can be and should be the

foundation for marketing strategy. Beyond the profit they generate, loyal customers

provide the basis for brand development and improvement. The brand that loses sight of

its loyal customers has lost its direction, and is vulnerable to losing market share.

As a brand's percentage of loyal customers goes up, market share increases and the brand

becomes more profitable. Share rises because those customers who become repeat

purchasers are no longer lost to the competition. In addition, repeat customers are more

profitable than new customers - attracting new customers involves investing far more

marketing and promotional funds. To some extent, brand loyalty is being developed and

managed by all successful brands. But in many cases loyalty itself is considered simply

the result of well executed marketing programs. The best way to achieve greater brand

loyalty is by managing the brand loyalty process. This involves measuring the drivers of

brand loyalty, selecting high impact loyalty improvement projects, and quickly carrying

them out.

Brand loyalty has been a major focus of strategic marketing planning (Kotler,

1984) and offers an important basis for developing a sustainable competitive advantage -

an advantage that can be realized through marketing efforts (Dick and Basu, 1994).

Many studies on the topic of brand loyalty have been measured by the behavioral

aspect of brand loyalty (e.g., repeat purchases) without considering cognitive aspects of

brand loyalty. For example, Fader and Schmittlein (1993) conducted a research

investigating the advantage of high share brands in brand loyalty, suggesting that high

share brands have significantly higher brand loyalty than low share brands. They

measured brand loyalty only by the behavioral aspect of repeat purchase, not considering

cognitive aspects of brand loyalty. Bayus (1992) also operationalised brand loyalty by a

behavioral measurement of probability of purchasing the same appliance brand as the onepreviously owned in his study on brand switching analysis of home appliances.

Kahn et al. (1986) report that academic research on loyalty has largely focused on

measurement issues and correlates of loyalty with consumer characteristics in a

segmentation context (e.g., Frank, 1967).

A few brand loyalty studies found price promotions as the antecedents of brand

switching behavior (Bawa and Shoemaker, 1987; Rothschild and Gaidis, 1981; Winer,





21/56


1986). They agree that price promotions increase sales in the short term. Some

researchers have proposed and found empirically that if consumers have been satisfied

with the promoted brand, their satisfaction is reinforcing and leads to an increase in the

probability of choosing the brand again after the promotion is withdrawn, particularly for

previous non-users of the brand (Kahn and Louie, 1990; Rothschild and Gaidis, 1981).

Other researchers found that lineage is an antecedent of brand loyalty (Miller,1975; Moore-Shay and Lutz, 1988). For example, Moore-Shay and Lutz (1988) reported

that mother and daughter had shown same brand preference and shopping strategy

congruence.

However, brand loyalty is not a simple uni-dimensional concept, but a very

complex multi-dimensional concept. Wilkie (1994) defines brand loyalty as "a favorable

attitude toward, and consistent purchase of, a particular brand". However, such a

definition is too simple to understand brand loyalty in the context of consumer behavior.

The definition implies that consumers are brand loyal when both attitude and behavior

are favorable. However, it does not clarify the intensity of brand loyalty, because it

precludes the possibility that a consumer's attitude is unfavorable, while he/she repeats

the purchases. In such case, the consumer's brand loyalty would be superficial and

shallow-rooted.

Oliver (1997) has presented a conceptual framework of brand loyalty that

includes the full spectrum of brand loyalty based on a hierarchy of effects model with

cognitive, affective, conative (behavioral intent), and action (repeat purchase behavior)

dimensions. A definition integrating this multidimensional construct has been given

(Oliver, 1999) as:

"a deeply held commitment to rebuy or repatronize a preferred product/serviceconsistently in the future, thereby causing repetitive same-brand or same brand-set

purchasing, despite situational influences and marketing efforts having the potential

to cause switching behavior."

Implications for Brand Management:

Several things are clear from the above discussion on Brand Loyalty. The first

thing is that Brand Loyalty consists of at least two dimensions viz. behavioral and

attitudinal apart from other dimensions like situation and propensity to be loyal which are

unique to an individual. The different types or categories of brand loyalty exhibited can

be visualized in the form of a brand loyalty map.





22/56

High

Spurious

Loyalty

True

Loyalty

NoLoyalty

LatentLoyalty


Repeat Patronage: High

Low

Relative Attitudes

Figure 1: The Brand Loyalty Map

Categorizing Loyalty Types

No loyalty: Consumers falling in this category have a low attitude towards a

particular product and willingly or unwillingly they try to avoid the product purchase.

Spurious loyalty is very similar to the concept of inertia; where despite

perceptions that choices are relatively undifferentiated behavioral data suggest loyalty. In

such cases repeat purchase may be based on the availability of deals, special offers,

convenience or the influence of other people. As a result consumer may only be

temporarily display such loyalty, and is likely to be very open to competing offers. That

is if another product comes along that is for some reason easier to buy (e.g. it is cheaper

or the original product is out of stock), the consumer will not hesitate to do so.

Sometimes the loyalty is circumstantial: repeat buying comes from lack of

reasonable alternatives e.g. monopoly. Circumstantial loyalty includes what are called

propriety assets such as patents, copyrights and trademarks that give a firm at least atemporary monopoly position ( the impact of generic drugs when an ethical drug comes

off patent suggests that much of the advantage is circumstantial and hence temporary).

In other situations loyalty reflects an efficiency motive: the brand is good, so we

automatically select it to minimize effort. An important efficiency case of loyalty occurs

when a customer relies on an expert such as a dealer or shopkeeper to make a choice for

him or her. This usually occurs in situation when the product infrequently bought and is




Low


23/56


inexpensive and the customer does not what to spend time searching for information

about the various alternatives. Another good example would be that of a patient diligently

buying the specific brand prescribed by the doctor. In this case the loyalty is really

channel created loyalty.

Latent loyalty occurs when consumer has a high relative attitude towards the

company or brand, but this is not evident in terms of their purchase behavior. This isprobably as a result of situational influences including inconvenient store locations,

out-of-stock situations, and/or the influence of other people.

Sustainable loyalty exists when the customer exhibits high repeat purchase, and

does so because they have a strong preference (high relative attitude) manifested in repeat

buying, word of mouth it engenders among it customers. Sustainable loyalty is therefore

achieved when the company has developed and communicated a proposition that clearly

has long-term benefits for the customer, and where the customer modifies his or her

behavior to remain loyal over time. Thus sustainable loyalty occurs where repeat

patronage is accompanied by a favorable attitude i.e. where purchase is as a result of a

conscious decision by the consumer. As such, this clearly the most preferred of the four

categories, and may be what we intuitively mean by loyalty.

This strong form of loyalty is due to attachment. In this case the customer

doggedly seeks out the product, often out of deference to its role in a previous situation

(e.g. they were there when I needed them) and sometimes in an almost ritualistic

manner (e.g. stopping at a certain Caf as a rite of the summer). This level of loyalty

insulates a brand from competitive pressures such as advertising and price promotions

and leads to high margins and profits.

Further there are several other marketing implications. The first question, of

course, for the marketer attempting to attract more brand-loyal customers is the feasibilityof segmenting this group. That is, are those consumers identifiable? Customers generally

do not appear to differ significantly from other customers on most segmentation basis.

The marketer may be more successful, however, in discerning unique characteristics of

custom-ers loyal to his particular brand or product. Such an analysis will be quite fruitful

as the analyses may provide him with useful insights for developing attractive marketing

strategies including focused loyalty programs.

Wind (1977) has proposed a matrix, as shown in figure below,

incorporating attitudes and behavior by which the marketer may assess the brands

vulnerability. It provides some indication of the magnitude of the exposure. In the first

two rows, the more the brand is disliked, the greater is the vulnerability. In the third row,the greater the brand is liked, the more vulnerable are customers to competitive brands.

Of course, the marketer would need to identify the relevant reasons for consumers

liking or disliking the brand. With such information, the insights may be gained into not

only the size of the loyal and vulnerable segments but also the magnitude and nature of





24/56


customers vulnerability. Loyalty/marketing plans may then be developed aimed at

reducing buyers vulnerability while attracting customers of competing brands.

These various goals of the marketers may necessitate different marketing

strategies. For instance, increasing brand loyalty of present customers may necessitate

better after sales service, while attracting new customers to become steady users may

require certain inducements such as price discounts. Thus, the varying ranges of brandloyalty that the marketer faces point to different competitive actions. For less highly

committed consumers, a catchy advertising message, coupled with coupon offers, free

samples, p-o-p displays, or attractive package could cause to switch over to the

marketers brand, especially in certain product group such as foods, soaps, detergents etc.

the packaged goods field may be considered highly dynamic in this regard.

Like itIndifferent

to

it and others

Dislike it

Buy it regularly

Loyal to it

1

Customers of this brand who are

vulnerable to competitors

2 3

Buy it

occasionally

Customers of this brand who are


4 5 6

Do not buy it

Customers of this brand who

are


7 8

Unlikely target

for this brand

9

Vulnerability Matrix




Attitude toward this BrandAttitude toward this Brand

Purchase

Pattern

with

respect to

this brand

Purchase

Pattern

with

respect to

this brand


25/56


In order to induce brand switching among customers who are more loyal, the

marketer is more likely to require more fundamental changes in consumer perceptions

and attitudes. Therefore, significant revisions in product image are often necessary,

frequently manifested in revamped promotional programs.

Advertising decisions are usually geared to the loyalty situation that confronts thebrand. It is suggested that if brand loyalty is high, the advertiser has a good case for

investment expenditures where large amounts are expended over short periods of time

to attract new users, because continued purchases after the advertising has been curtailed

will amortize the advertising investment. Where a low degree of brand loyalty exists in

the product class, advertising expenditures should be made at a fairly steady rate on a

pay-as-you-go basis, with demonstrated returns in extra sales equal to or greater than the

extra advertising costs.

Frequency marketing approaches seek to increase the yield from the organizations

best customers by developing a long-term, interactive, value-added relationship. By

concentrating on loyal customers, treating them as individuals, and providing them with

discounts, free products or services, or simply information, their relationship with the

firm and its brand can be solidified.

The traditional conceptualization of attitudinal brand loyalty includes cognitive,

affective, and behavioral intent dimensions. Conventional brand loyalty development

efforts have relied substantially on brand image building through mass media

communications

BRAND PERSONALITY

Based on the premise that brands can have personalities in much the same way as humans,

Brand Personality describes brands in terms of human characteristics. Brand personality is

seen as a valuable factor in increasing brand engagement and brand attachment, in much the

same way as people relate and bind to other people. Much of the work in the area of brand

personality is based on translated theories of human personality and using similar measures

of personality attributes and factors.

Why Brand Personality?

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





26/56


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 smallbuild 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.

Values and characteristics of brand personality:

People's personalities are determined largely through the values and beliefs they have, and

other personality characteristics they develop. An example of a value or belief is honesty.

Many people believe in being honest in everything they do and say. An example of a

characteristic is confidence. This is not a belief, but more of a behavior. There are, of

course, many values/beliefs and characteristics that a person may have, but there are some

that are particularly likeable. It is to these likeable values and characteristics that people are

inevitably attracted. Examples of these include dependability, trustworthiness, honesty,

reliability, friendliness, caring, andfun-loving.

There are about two hundred words that describe personality characteristics, and these can

be used for putting personality into brands. To illustrate how people think in personality

terms when making judgments about brands, here are the results of consumer research into

how people feel about two companies. When asked the question: "If these two companies

were people, how would you describe them?"their replies were:

Company A Company B

Sophisticated Easy goingArrogant ModestEfficient HelpfulSelf-centered CaringDistant ApproachableDisinterested Interested





27/56


These two companies are actually competitors in a service industry. If you were asked

which of these two companies you would like to be your friend, you would probably choose

Company B, as did 95% of other respondents. It is not surprising that the service level of

Company B can be a better experience for customers than that of Company A. It is also easy

to conclude that if consumers consistently experience these differences between the two

companies, then the brand image of Company B will be much better than that of CompanyA.

A further point of interest arising out of this research is that people tend to prefer brands that

fit in with their self-concept. Everyone has views about themselves and how they would like

to be seen by others. And they tend to like personalities that are similar to theirs, or to those

whom they admire. Thus, creating brands with personalities similar to those of a certain

group of consumers will be an effective strategy. The closer the brand personality is to the

consumer personality (or one which they admire or aspire to), the greater will be the

willingness to buy the brand and the deeper the brand loyalty.

LEVERAGING BRAND EQUITY: BRAND EXTENSIONS

Traditionally the Indian market has seen extensions which are merely line extensions by

using the same brand name to launch new forms, flavors, variants or colors of the

existing product. Santro and Santro Zip Drive, Close-Up Red and Green, Colgate Gel and

Colgate toothpaste, Surf & Surf Ultra, are not brand extensions in the true sense, but

merely line extensions. Barring a handful of real extensions, like Denim soap & talcum

powder, Dettol antiseptic & floor cleaner, Anchor switches and toothpaste, most of the

marketing giants like HLL, P&G and Reckitt Coleman use multi-branding strategy.

It is only recently that the Indian marketers have realized the full potential of brand

extensions. And going by number of companies adopting the brand extension concept it

looks like the idea has taken root in the mind of brand strategists as a viable growth

strategy in the Indian market.

Why Brand Extensions:

Introduction of a new product with an established brand name can dramatically

reduce the investment required and improve the likelihood of its success. It is therefore

not surprising that brand extensions have been the strategy of growth for many firms

during the past decades. Brand extensions provide a vehicle to exploit brand name

recognition and brand image. A strong brand name can provide consumers with the

familiarity and knowledge of a reputable brand. Additionally, brand extensions can

decrease the cost of accessing distribution channels and make promotional efforts more

efficient. One researcher defines brand extension as "using a brand in one category to

introduce products in a totally different category."





28/56


Brands are basically a promise to the consumers underlying the trust, familiarity,

risk reduction and provide emotional benefits. Strong brands are therefore enormously

attractive to senior managers, whose interest is fed by any number of books and articles

on how to get and keep them. But anyone who thinks seriously about branding soon

realizes that there are basically two kinds of strong brands: those that are focused and

those that are diversified.

Focused like IBM concentrating on personal computers and accessories or

diversified like Wipro which includes vanaspati, lighting, soaps, healthcare, computers,

and baby diapers. On one hand, IBM has maintained a focused link between its brand and

its core product line: personal computers. At the other end is Wipro. IBM has decided to

remain focused for now, while Wipro elected and managed to diversify. The

crucial question for confronting strategists is whether to extend the brand or stay focused.

As these examples show, a strong company can do well in either.

Benefits of Brand Extensions

At least four factors appear to be driving the brand extensions. First, leveraging a

brand widely tends to lower brand management support costs. Second, the tendency to

leverage the franchise with existing consumers is another major attraction. Third,

relationship benefits seem to have growing importance for customers; relationship

building (through loyalty programs, better service, and a better understanding of

customers) may now count for more than functional benefits. As relationships outstrip

products in importance, leveraging brands makes more and more sense. Fourth the

prospects of extending the brand in a new and growing market imply supernormal profitsand opportunities for growth.

Acritical assumption underlying the use of brand extensions is that strong brands

offer greater leverage for extension than weaker brands. Brand strength has been

implicitly defined in terms of consumer predispositions towards the brand. Established

brands tend to be used as quality cues. A recognizable brand is often relied upon by

consumers as a strategy for dealing with perceived risk.

Placing a trusted brand name in a new category is less expensive and risky than

creating a new brand, particularly with new products failure rates exceeding 90%;

entering a new category generates increased exposure for the brand across the store, and

therefore may serve to strengthen the base brand.Extensions across venues are less likely than traditional line extensions (i.e. new

flavors, varieties, models, etc.) to cannibalize sales of the original brand; and Most

importantly, extensions (particularly licensing) can provide an additional revenue stream

with little extra effort or expense.





29/56


Core brand associations are conveyed to extensions

Consumer evaluation of a brand extension is frequently described by a transfer

process in which core brand associations are conveyed to the extension. As we have seen,

brand associations can vary among consumers, across usage situations, and in different

competitive environments. Potentially, the core brand may provide a group of salient,

positively evaluated, relevant associations which are valid within or across product

categories. Ideally, a core brands associations can contribute a complex, yet well-defined

image to an extension. A well-established brand usually has a well-defined brand image.

A great benefit of brand extension is the instant communication of a salient image.

In addition to brand associations, extension can convey quality associations. To

avoid advertising battles based on product specifications, one can compete on the basis of

perceived high quality. Hewlett-Packard has used this strategy by extending its name to

numerous products and thereby has extended its umbrella of quality to them. When

quality is perceived to be high it is valuable to share the benefits of a core product with an

extension. Without perceived high quality, however, the task is impossible.Another benefit of extension is the cross fertilization which advertising the core brand

can bring. That familiarity also provides consumers with another benefit in the form of

reduced risk with a new product. Consumers confronting Diet Coke for the first time

would know that it was a Coca-Cola product of assumed high quality. In reported tests of

new products, most support the fact that an established brand name enhances initial

consumer reaction, interest, and trial.

Enhancing the core product

The final benefit of extension is enhancing the core product. Like a successful

offspring, an extension may reinforce the core product's brand image instead of

weakening it. Diet Coke is clearly positioned as a tasty, low-calorie soda and reinforcesCoke's association with cola and good taste.

Brand Extension Dilemmas:

Brand extensions can be accomplished in a variety of ways. One of the most

obvious differences is whether the extension is in the same or different product category.

Thus they can be classified as either vertical or horizontal extensions.

Extend a current brand name to a new product

Horizontal extensions

Typically, horizontal brand extensions either apply or extend an existing product's

name to a new product in the same product class or to a product category new to the

company. There are two varieties of horizontal brand extensions which differ in terms of

their focus. They are termed line extensions and franchise extensions. Line extensions

involve a current brand name which is used to enter a new market segment in its product





30/56


class. Diet Coke and Diet Pepsi are examples of line extensions since they focus on the

diet conscious segment for colas not served by their parent products. In contrast,

franchise extensions use a current brand name to enter a product category new to the

company. Denim after shave and Denim shaving cream are examples of franchise

extension.

Extension distance

One brand extension variable studied recently is the distance of the extension

from the core product. Close extensions may be in the same product category and share

the same feature set as the parent product. Distant extensions may be in unrelated product

categories and rely on overall quality associations from the parent for success.

Horizontal extensions lend themselves to natural distancing. Distancing is the

purposive increase in the perceptual distance of the extension from the core product.

Unsuccessful horizontal extensions are less likely to damage the core brand than vertical

extensions since horiz

Date post:	07-Apr-2018
Category:	Documents
Upload:	deepti-abhinav-gupta
View:	216 times
Download:	0 times

Brand Management Handout

Documents