Brand and Brand Management

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CHAPTER 1: BRANDS AND BRAND MANAGEMENT

Copyright © 2013 Pearson Education

BRANDS & BRAND MANAGEMENT

Copyright © 2013 Pearson Education

What is a brand? 





Brand emerges from old norse (Scandinavian language) word brandr that means to burn “A brand is a storehouse of trust. That matters more and more as choices multiply. People want to simplify their lives.” In technocrat and colorless times, brands bring warmth, familiarity and trust.

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What is a brand? 



For 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.” These different components of a brand that identify and differentiate it are brand elements.

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What is a brand? 



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

1.5 Copyright © 2013 Pearson Education

What is a Brand?

Brand Elements Brands versus Products

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Brand Elements 

Different components that identifies and differentiates a brand  Name,

logo, symbol, package design, or other characteristic



Can be based on people, places, things, and abstract images

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Brand versus Product Brand

Product

Has dimensions that differentiate it in some way from other products designed to satisfy the same need

Anything available in the market for use or consumption, that may satisfy a need or want

Can be differentiated on the basis of: • Packaging • Services provided • Customer advice • Financing • Delivery arrangements • Warehousing • Other things valued by the customers

Can be categorized into five levels namely: • Core benefit level • Generic product level • Expected product level • Augmented product level • Potential product level

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Five Levels of Meaning for a Product For VCR 









The core benefit (Convenient environment) The generic product level (Record and play back television program) The expected product level ( Channels) Augmented product (HiFi sound) The potential product level (Voice controlled programming) Copyright © 2013 Pearson Education



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

1.10 Copyright © 2013 Pearson Education



According to Kavin Lane Keller “A brand is therefore a product, but one that adds other dimensions that differentiate it in someway from other products designed to satisfy the same need.”



Understanding consumer motivations and desires and creating relevant and appealing images surrounding the products makes a brand leader.

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Brand building tools: 

R&D



Product



Service



Promotion



Retail environment



Advertising



Merchandising



Packaging



CRM



Price

1.12 Copyright © 2013 Pearson Education



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

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To Sum Up .... 

Through branding, organizations:  Create

perceived differences amongst products  Develop loyal customer franchise  Create value that can translate to financial profits

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Why Do Brands Matter?

Consumers

Firms Copyright © 2013 Pearson Education

Consumers 



Encompass all types of customers, including individuals as well as organizations Functions provided by brands to consumers  Identify

the source or maker of the product  Simplify product decisions  Lower the search costs for products internally and externally  Helps set reasonable expectations about what consumers may not know about the brand

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Consumers  Signal  On

product characteristics and attributes

the basis of attributes products can be classified

as:  



Search goods Experience goods Credence goods

 Reduce  These 

risks in product decision risk can be categorised as

Functional ,physical, financial, social psychological, and time

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Firms 

Brands provide valuable functions  Simplify

product handling and tracing  Help organizing inventory and accounting records  Offer the firm legal protection for unique features or aspects of the product  Provide predictability and security of demand for the firm and creates barriers of entry for competitors  Provide a powerful means to secure competitive advantage Copyright © 2013 Pearson Education

Figure 1.3 - Roles that Brands Play

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Can Anything Be Branded

Physical Goods Services

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Physical Goods Business-to-Business Products

High-tech Products

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B2B products •

Example of B2B brand - Caterpillar



Guidelines for marketers of B2B brands • • • •

• •

Ensure that entire organization supports branding and brand management. Adopt a corporate branding strategy if possible and create a well-defined brand hierarchy. Frame value perceptions. Link relevant non-product-related brand associations. Find relevant emotional associations for the brand. Segment customers carefully both within and across companies. Copyright © 2013 Pearson Education

High-tech Products Struggle with branding due to lack of branding strategy. • Have realised that financial success is no longer driven by product innovation alone. • Marketing skills play an important role in the adoption and success of high-tech products. • Guidelines for high-tech branding: •



Understand your brand hierarchy and manage it appropriately over time. Copyright © 2013 Pearson Education

High-tech Products Know who your customer is and build an appropriate brand strategy. • Realize that building brand equity and selling products are two different exercises. • Brands are owned by customers, not engineers. • Brand building on a small budget necessitates leveraging every possible positive association. • Technology categories are created by customers and external forces, not by companies themselves. •

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High-tech Products The rapidly changing environment demands that you stay in tune with your internal and external environment. • Invest the time to understand the technology and value proposition and do not be afraid to ask questions. •

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Services Role of Branding with Services Professional Services

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Role of branding with services •

Challenges in marketing services: Less tangible than products and vary in quality. • Depend on the particular person or people providing them. •

Branding addresses problems related to intangibility and variability. • Brand symbols help make abstract nature of the services more concrete. • Provides competitive edge to the services. •

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Professional services Offer specialized expertise and support to other businesses and organizations. • Combination of B2B and traditional consumer services branding. • Challenges: •

Greater variability • Harder to standardize • Threat from greater equity of employees •

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Can Anything Be Branded

Retailers and Distributors Online Products and Services People and Organizations

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Role of Branding

Sports , Arts, and Entertainment Geographic Locations

Ideas and Causes

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To Sum up.... 







Branding is universal and pervasive in different product categories Applicable to both tangible and intangible offerings of an organization Technological developments have impacted the way firms market their offerings Organizations reap financial benefits from positive brand images

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Strong Brands 



Brands that have been market leaders in their categories for decades Any brand is vulnerable and susceptible to poor brand management

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Factors Responsible for Branding Challenges Savvy customers

Economic downturns Brand proliferation Media transformation Copyright © 2013 Pearson Education

Factors Responsible for Branding Challenges Increased Competition

Increased costs

Greater accountability Copyright © 2013 Pearson Education

Figure 1.9- Challenges to Brand Builders

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Brand Equity 

Principles of branding and brand equity 







Differences in outcomes arise from the “added value” endowed to a product The added value can be created for a brand in many different ways Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a brand There are many different ways in which the value of a brand can be exploited to benefit the firm

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Strategic Brand Management Process Identifying and Developing Brand Plans Designing and Implementing Brand Marketing Programs Measuring and Interpreting Brand Performance Growing and Sustaining Brand Equity

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Identifying and Developing Brand Plans Brand Positioning Model Describes how to guide integrated marketing to maximize competitive advantages.

Brand Resonance Model Describes how to create intense, activity loyalty relationships with customers.

Brand Value Chain Means to trace the value creation process for brands, to better understand the financial impact of brand marketing expenditures and investments.

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Designing and implementing Brand Marketing Program Choosing Brand Elements Integrating the Brand into Marketing Activities and the Supporting Marketing Program Leveraging Secondary Associations

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Measuring and Interpreting Brand Performance 

To manage brands profitably, managers must d implement a brand equity measurement system



Brand equity measurement system involves:  Brand

audits

 Comprehensive

examination of a brand to, assess its health, uncover its sources of equity, and suggest ways to improve and leverage that equity. Copyright © 2013 Pearson Education

Measuring and Interpreting Brand Performance  Brand

tracking studies

 Collect

information from consumers on a routine basis over time, typically through quantitative measures of brand performance on a number of key dimensions marketers can identify in the brand audit or other means.



Brand equity management system Set

of organizational processes designed to improve the understanding and use of the brand equity concept within a firm. Copyright © 2013 Pearson Education

Measuring and Interpreting Brand Performance •

Three steps that help implement a brand equity management system are: creating brand equity charters, assembling brand equity reports, and defining brand equity responsibilities.

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Growing and Sustaining Brand Equity Defining Brand Architecture

Managing Brand Equity over Time Managing Brand Equity over Geographic Boundaries, Cultures, and Market Segments

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Defining brand architecture Provides general guidelines about branding strategy and the brand elements to be applied across all the different products sold by the firm. • Two key concepts in defining brand architecture are: •

Brand portfolio: Set of different brands that a particular firm offers for sale to buyers in a particular category. • Brand hierarchy: Displays the number and nature of common and distinctive brand components across the firm’s set of brands. •

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Over time A long-term perspective of brand management recognizes that any changes in the supporting marketing program for a brand may affect the success of future marketing programs. • Produces proactive strategies designed to enhance customer-based brand equity and reactive strategies to revitalize a brand that encounters problems. •

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Over geographic boundaries, cultures, and market segments •

In expanding a brand overseas, managers need to build equity by relying on specific knowledge about the experience and behaviors of those market segments.

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Figure 1.12 - Strategic Brand Management Process

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