Brand and Brand Management
Content
Brand and Brand Management
1
Brand : Definition According to the American Marketing Association (AMA), a brand is 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. It should be recognized that many practicing managers, however, refer to a brand as more than that - defining a brand in terms of having actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace.
2
Brand elements : Definition Different components of a brand that identify and differentiate it can be called brand elements.
Brand elements come in many different forms. For example, consider the variety of brand name strategies that exist. In some cases, the company name is essentially used for all products (e.g., as with General Electric and Hewlett-Packard).
In other cases, manufacturers assign individual brand names to new products that are unrelated to the company name (e.g., as with Procter & Gamble and their Tide, Pampers, and so on.) Retailers create their own brands based on their store name or some other means for example Wal-Mart. There are brand names that are made up and include prefixes and suffixes that sound scientific, natural, or prestigious (e.g., Intel microprocessors, Lexus automobiles, or Compaq computers).
3
Brands Vs Products According to Phillip Kotler, a product is anything that can be offered to a market for attention, acquisition, use of consumption that might satisfy a need or want. Thus, a product may be a physical good, service, retail store, person, organization, place or idea.
4
Kotler defines five levels to a product:
1. The core benefit level is the fundamental need or want that consumers satisfy by consuming the product or service. 2. 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. 3. The expected product level is a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. 4. The augmented product level includes additional product attributes, benefits. or related services that distinguish the product from competitors.
5. The potential product level includes all of the augmentations and transformations that a product might ultimately undergo in the future.
5
Differentiation:
A brand is therefore a product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need. These differences may be
Rational and tangible related to product performance of the brand Emotional and intangible related to what the brand represents.
6
Why do brands matter? Brands can also play a significant role in signaling certain product characteristics to consumers and manufacturers.
Consumers: Identification of source of product Assignment of responsibility to product maker Risk reducer (5 R’s) Search cost reducer Promise, bond or pact with maker of product Symbolic device Signal of quality Manufacturers: Means of identification to simplify handling or tracing Means of legally protecting unique features Signal of quality level Means of endowing products with unique associations Source of competitive advantage Source of financial returns
7
Things that can be branded
Physical goods are traditionally associated with brands and include many of the best-known and highly regarded consumer products (e.g., Coca-Cola, Kodak, Marlboro. Sony, Mercedes-Benz, and Nescafe). As more and more different kinds of products are being sold or at least promoted directly to consumers, the adoption of modern marketing practices and branding has spread further. Services: The pervasiveness and level of sophistication in branding of services has accelerated in the past decade. Service is an intangible things. Example, KPMG, Emirates.
8
Retailer and distributors: Here brand can generate consumer interest, patronage and loyalty for a store. They sometime sell Private brands means brands of their own instead of manufacturer. Walmart, is the best example in this regard.
Online products and services: Internet and web access has revolutionized IT business. Google, Yahoo are now very strong brand.
People and organizations: These elements can also be branded. Politicians, entertainer, professional athletes etc. can create their own images. Sports, arts and entertainment: Sport marketing has become highly popular in recent years and they are promoted through advertising, promotions, sponsorships, direct mail and other forms of communications. Geographic locations: Cities, states, regions and countries are now actively promoted through advertising, direct mail and other communications tools.
9
Branding Challenges and opportunities
The reality is that a although brands may be as important as ever to consumers, brand management is rather a difficult tasks.
Savvy Customers: Increasingly, consumers and business have become more experienced with marketing. Consumer information and support exists in the form of consumer guides (e.g., Consumer Reports), online Web sites (e.g., Epinions.com), and so on, Many believe that it is more difficult to persuade consumers with traditional communications than it was in years gone by.
10
Brand
Another important change in the branding environment is the proliferation of new brands.
Proliferation: Media Fragmentation: An important change in the marketing environment
is the erosion or fragmentation of traditional advertising media and the emergence of interactive and nontraditional media, promotion, and other communication alternatives.
Increased Competition: One reason marketers have been forced to use so
many financial incentives or discounts is that the marketplace has become more competitive. Both demand-side and supply-side factors have contributed to the increase in competitive intensity.
11
Brand extensions : As noted earlier, many companies have taken their existing brands and launched products with the same name into new categories. Many of these brands provide formidable oppositions. Deregulation : Certain industries (e.g. telecommunications, financial services, health care. and transportation) have become deregulated, leading to increased competition from out side traditionally defined product-market boundaries. Globalization : Although firms have embraced globalizations as a means to open new markets and potential sources of revenue. it has also resulted in an increase in the number of competitors in existing markets. Greater Accountability: Finally, marketers often find themselves responsible for meeting ambitious short-term profit targets because of financial market pressures and senior management imperative. As a result, there is dilemma of short-term versus long term strategy.
12
Low-priced competitors: Market penetration of generics, private labels, or lowpriced “clones” imitating product leaders has increased on a worldwide basis. Retailers have gained power and often dictate what happens within the store. Their chief marketing weapon is price. Increased Costs: The cost of introducing a new product or supporting an existing product has increased rapidly, making it difficult to match the investment and level of support that brands were able to receive in previous years.
13
Rank
Company
2001 Brand value ($ billions)
2000 Brand Value ($billions)
Percent Change
Country of Ownership
1.
2. 3. 4. 5. 6. 7. 8.
Coca-Cola
Microsoft IBM GE Nokia Intel Disney Ford AT&T Marlboro Mercedes Citibank Toyota
68.95
65.07 52.75 42.40 35.04 34.67 32.59 30.09 22.83 22.05 21.73 19.01 18.58
72.54
70.20 63.18 38.13 38.53 39.05 33.55 36.37
5
7 1 11 9 11 3 17
U.S.
U.S. U.S. U.S. Finland U.S. U.S. U.S.
9.
10. 11. 12. 13. 14.
McDonald’s 25.29
27.86
25.55 22.11 21.11 18.81 18.82
9
11 0 3 1 1
U.S.
U.S. U.S. Germany U.S. Japan
14
Rank
Company
2001 Brand value ($ billions) 17.98 17.21 16.92
2000 Brand Value ($billions) 20.57 20.07 16.12
Percent Change 13 14 5
Country of Ownership U.S. U.S. U.S.
15. 16. 17.
Hewlett-Packard Cisco Systems American Express
18.
19. 20. 21
Gillette
Merrill Lynch Sony Honda
15.30
15.02 15.01 14.64
17.36
NA 16.41 15.25
12
NA 9 4
U.S.
U.S. Japan Japan
22.
23. 24. 25.
BMW
Nescafe Compaq Oracle
13.86
13.25 12.35 12.22
12.97
13.68 14.60 NA
7
3 15 NA
Germany
Switzerland U.S. U.S.
15
1
Brand : Definition According to the American Marketing Association (AMA), a brand is 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. It should be recognized that many practicing managers, however, refer to a brand as more than that - defining a brand in terms of having actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace.
2
Brand elements : Definition Different components of a brand that identify and differentiate it can be called brand elements.
Brand elements come in many different forms. For example, consider the variety of brand name strategies that exist. In some cases, the company name is essentially used for all products (e.g., as with General Electric and Hewlett-Packard).
In other cases, manufacturers assign individual brand names to new products that are unrelated to the company name (e.g., as with Procter & Gamble and their Tide, Pampers, and so on.) Retailers create their own brands based on their store name or some other means for example Wal-Mart. There are brand names that are made up and include prefixes and suffixes that sound scientific, natural, or prestigious (e.g., Intel microprocessors, Lexus automobiles, or Compaq computers).
3
Brands Vs Products According to Phillip Kotler, a product is anything that can be offered to a market for attention, acquisition, use of consumption that might satisfy a need or want. Thus, a product may be a physical good, service, retail store, person, organization, place or idea.
4
Kotler defines five levels to a product:
1. The core benefit level is the fundamental need or want that consumers satisfy by consuming the product or service. 2. 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. 3. The expected product level is a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. 4. The augmented product level includes additional product attributes, benefits. or related services that distinguish the product from competitors.
5. The potential product level includes all of the augmentations and transformations that a product might ultimately undergo in the future.
5
Differentiation:
A brand is therefore a product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need. These differences may be
Rational and tangible related to product performance of the brand Emotional and intangible related to what the brand represents.
6
Why do brands matter? Brands can also play a significant role in signaling certain product characteristics to consumers and manufacturers.
Consumers: Identification of source of product Assignment of responsibility to product maker Risk reducer (5 R’s) Search cost reducer Promise, bond or pact with maker of product Symbolic device Signal of quality Manufacturers: Means of identification to simplify handling or tracing Means of legally protecting unique features Signal of quality level Means of endowing products with unique associations Source of competitive advantage Source of financial returns
7
Things that can be branded
Physical goods are traditionally associated with brands and include many of the best-known and highly regarded consumer products (e.g., Coca-Cola, Kodak, Marlboro. Sony, Mercedes-Benz, and Nescafe). As more and more different kinds of products are being sold or at least promoted directly to consumers, the adoption of modern marketing practices and branding has spread further. Services: The pervasiveness and level of sophistication in branding of services has accelerated in the past decade. Service is an intangible things. Example, KPMG, Emirates.
8
Retailer and distributors: Here brand can generate consumer interest, patronage and loyalty for a store. They sometime sell Private brands means brands of their own instead of manufacturer. Walmart, is the best example in this regard.
Online products and services: Internet and web access has revolutionized IT business. Google, Yahoo are now very strong brand.
People and organizations: These elements can also be branded. Politicians, entertainer, professional athletes etc. can create their own images. Sports, arts and entertainment: Sport marketing has become highly popular in recent years and they are promoted through advertising, promotions, sponsorships, direct mail and other forms of communications. Geographic locations: Cities, states, regions and countries are now actively promoted through advertising, direct mail and other communications tools.
9
Branding Challenges and opportunities
The reality is that a although brands may be as important as ever to consumers, brand management is rather a difficult tasks.
Savvy Customers: Increasingly, consumers and business have become more experienced with marketing. Consumer information and support exists in the form of consumer guides (e.g., Consumer Reports), online Web sites (e.g., Epinions.com), and so on, Many believe that it is more difficult to persuade consumers with traditional communications than it was in years gone by.
10
Brand
Another important change in the branding environment is the proliferation of new brands.
Proliferation: Media Fragmentation: An important change in the marketing environment
is the erosion or fragmentation of traditional advertising media and the emergence of interactive and nontraditional media, promotion, and other communication alternatives.
Increased Competition: One reason marketers have been forced to use so
many financial incentives or discounts is that the marketplace has become more competitive. Both demand-side and supply-side factors have contributed to the increase in competitive intensity.
11
Brand extensions : As noted earlier, many companies have taken their existing brands and launched products with the same name into new categories. Many of these brands provide formidable oppositions. Deregulation : Certain industries (e.g. telecommunications, financial services, health care. and transportation) have become deregulated, leading to increased competition from out side traditionally defined product-market boundaries. Globalization : Although firms have embraced globalizations as a means to open new markets and potential sources of revenue. it has also resulted in an increase in the number of competitors in existing markets. Greater Accountability: Finally, marketers often find themselves responsible for meeting ambitious short-term profit targets because of financial market pressures and senior management imperative. As a result, there is dilemma of short-term versus long term strategy.
12
Low-priced competitors: Market penetration of generics, private labels, or lowpriced “clones” imitating product leaders has increased on a worldwide basis. Retailers have gained power and often dictate what happens within the store. Their chief marketing weapon is price. Increased Costs: The cost of introducing a new product or supporting an existing product has increased rapidly, making it difficult to match the investment and level of support that brands were able to receive in previous years.
13
Rank
Company
2001 Brand value ($ billions)
2000 Brand Value ($billions)
Percent Change
Country of Ownership
1.
2. 3. 4. 5. 6. 7. 8.
Coca-Cola
Microsoft IBM GE Nokia Intel Disney Ford AT&T Marlboro Mercedes Citibank Toyota
68.95
65.07 52.75 42.40 35.04 34.67 32.59 30.09 22.83 22.05 21.73 19.01 18.58
72.54
70.20 63.18 38.13 38.53 39.05 33.55 36.37
5
7 1 11 9 11 3 17
U.S.
U.S. U.S. U.S. Finland U.S. U.S. U.S.
9.
10. 11. 12. 13. 14.
McDonald’s 25.29
27.86
25.55 22.11 21.11 18.81 18.82
9
11 0 3 1 1
U.S.
U.S. U.S. Germany U.S. Japan
14
Rank
Company
2001 Brand value ($ billions) 17.98 17.21 16.92
2000 Brand Value ($billions) 20.57 20.07 16.12
Percent Change 13 14 5
Country of Ownership U.S. U.S. U.S.
15. 16. 17.
Hewlett-Packard Cisco Systems American Express
18.
19. 20. 21
Gillette
Merrill Lynch Sony Honda
15.30
15.02 15.01 14.64
17.36
NA 16.41 15.25
12
NA 9 4
U.S.
U.S. Japan Japan
22.
23. 24. 25.
BMW
Nescafe Compaq Oracle
13.86
13.25 12.35 12.22
12.97
13.68 14.60 NA
7
3 15 NA
Germany
Switzerland U.S. U.S.
15
