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Brand Equity

H.R. COLLEGE OF COMMERCE AND ECONOMICS, CHURCHGATE, MUMBAI - 20.

PROJECT TITLE: BRAND EQUTIY

SUBMITTED BY: MR. KARAN DEEPAK GANDHI ROLL NO. : 81

ACADEMIC YEAR 2005 - 2006 SEMESTER – V

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Brand Equity

DECLARATION
I, Karan Gandhi, of HR College of commerce and economics of T.Y.BMS (SEM - V) hereby declare that I have completed this project on Brand Equity in the academic year 2005-2006.

The information submitted is true and the original to the best of our knowledge.

Signature of the student

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Brand Equity

CERTIFICATE
I, Mr.J.Venuraj , hereby certify that Karan Gandhi of HR College of commerce and economics of T.Y.BMS (SEM-V) has completed this project on Brand Equity in the academic year 2005-2006.

The information submitted is true and the original to the best of my knowledge.

Signature of the project coordinator

Signature of the principal of the College/institutions

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Brand Equity

TABLE OF CONTENTS
Executive Summary Introduction
What is a Brand? What can be branded? Brand Power

What is Brand Equity? Brand Equity & Market Share Brand Equity V/s In Market Performance (Case Studies) Measuring Brand Equity Increasing Brand Equity Building Brand Equity Managing Brand Equity Brand Image Importance of Brand Equity Laws of Brand Equity Benefits of Brand Equity Do’s & Don’ts of Brand Equity Conclusion Indian Brand Equity Foundation ( IBEF ) CASE STUDIES McDonalds Case Study Colgate – Palmolive (India) Case Study TATA Case Study

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Brand Equity

Executive Summary
The brand equity of a product cannot be known until & unless the product is branded & has become known in the market. Brand Equity follows branding. Brand equity can be defined in many different ways. For a brand to be strong it must accomplish two things over time: retain current customers and attract new ones. To the extent a brand does these things well, it grows stronger versus competition, and delivers more profits to its owners. Further, the importance of brand equity is that, by understanding how brand equity drives market share, it is then possible to make use of this knowledge in order to grow the market share of a brand. Brand equity does not exist in nature, to be assayed like gold ore in rock. It’s measurement depends on how you define it. The measurement can be in terms of customers by way of quality , by financial perspectives to help the financiers. A brand equity is comprised of its loyalty rate & relative price as per our definition thus using the measures given we can determine our brand equity of the product & thus eventually it will help us in getting solutions for increasing brand equity. It is very essential to adopt the correct method to build a brand & managing brand equity . a company who is unsuccessful to do will have to bare losses. There are many great marketers who have helped in giving a guideline to managing brand equity which can be of a great help if the company uses them diligently. Brand Equity is important for three major reasons: 1. Brand Equity creates shareholder value 2. Brand Equity Building is a competency that can be mastered to create competitive advantage 3. Brand Equity management creates an array of growth opportunities for the business thus it helps in increasing the overall profits of the firm . There are lots of benefits of brand equity if a company can manage & build its brand equity well & realize the importance of doing so. There are laws of brand equity which are involved; if a company follows the law sincerely it will always be in a surplus state. It jus has to take care of the ‘do’s and don’ts of brand equity ‘

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Brand Equity India too have realized the importance of Brand Equity & thus have established the Indian Brand equity Foundation. (IBEF) In conclusion, brands must be carefully and constantly nurtured over time. This is not a one shot deal; this is something that we have to be in for the long run.

Introduction
The concept of brand is integral to the success of any given product. But what measures a strong brand or the success of a brand? Is it high market share, popular advertising, effective point of sale, or the ability to command a price premium? But before we get deeper into the subject of brand equity it is necessary for us to know a few things like • • • What is a brand? How is a product branded? & what products can be branded? What is the power of a brand?

Thus we will move along the subject after a brief description on the above mentioned questions. WHAT IS A BRAND? Brands are an integral part of today's marketplace. Everywhere one looks there are brands, and strong brands are the most successful products across a wide variety of product categories. The quote `An orange is an orange, is an orange, unless, of course, that orange happens to be a Sunkist', a name 80 per cent of consumers know and trust, gives an indication of what a successful brand does. The two concepts- consumer knowledge and trust - sum up what brands and brand equity develop; those are the issues that are at the heart of the brand and of building a brand that has a good relationship with the customer.

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Brand Equity The American Marketing Association defines a brand as: 'a name, term, sign, symbol or design, or a combination of these, that identifies the goods or services of one seller or group of sellers and differentiates them from those of the competition.' The notion that a brand is something that identifies the goods from one person, as separate from the goods of another person, is a `historically-based' look at brands. It is the notion of a 'mark' placed on a product to separate it from the rest. A brand however, is much more than this. A brand is a promise a company makes to the customer, of what this product is going to deliver. That is,how the brand is going to fit into the business of the customer. The brand promise is a commitment by the organisation, as making a promise to the customer is something that has to be followed through. It is important that the organisation understands that by making this brand promise, they have to live up to it. The creation of a strong brand is something the company is going to have to commit to, in order to make it work. WHAT CAN BE BRANDED? Many people ask whether everything can be branded, or if there are types of products that cannot be branded. People say, `Oh sure, you know, consumer goods products; it makes a lot of sense to brand those. But what about if I'm in hi-tech? What if I'm in medical marketing? What if I have rational customers? Does the brand matter in this situation as well?' The research that has been done on this shows that, yes, branding does matter in these circumstances. Brands have been found to give an important competitive advantage across a wide variety of industries. In commodities, for example, Morton Salt is the most successful brand of 7

Brand Equity salt with the most successful sales. It is however, mined from the same mine as other brands of salt. Novar is a high technology business-to -business company that builds climate controls for large buildings. In the 1990s they were doing well, but not outstandingly so. In 1999, they began a branding campaign that involved a variety of strategies. They specifically rationalised names, by choosing names that had meaning. They started to concentrate on branding the sub-product as well as the Novar brand itself They found that within the first seven months of their campaign, they had a 26 per cent increase in profitability, which they attributed to their branding. What about medical products? Brands clearly have power in this industry, with over-the-counter products. For example, people know and trust certain headache brands. Prescriptions have also clearly seen a big change, where brands that are being built, are aimed at the consumer, i.e. the end-user, rather than just at the intermediary level.. This is also true for devices: Perclose and HP Ultrasound Monitors are examples of brands that have been built in these areas and which haveadded to the power of those products. This is the basic idea of what a brand is, and an indication that brands are important and relevant in different domains. But what is the basis of this importance, and where is the brand's power within the marktplace? BRAND POWER There are two real sources of power: One derives from the customers' perspective and whether customers perceive that the brand provides value and meaning. If they do believe it does, then the brand reduces search costs, and this is important to consumers who lead busy lives, and have too many choices to make. Brands help customers by reducing the effort required to choose a good product. Once the initial

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Brand Equity search is completed by the consumer, and the consumer has built trust and understanding in the brand, this may be carried through to an extended product, which then cuts down the search process in the extended category. Trust in the brand also mitigates perceived risks. For example, if a parent has to go out in the middle of the night to buy a pain-killer for his child, then the name, eg Tylenol, is going to be very helpful in that purchase. They understand what they are getting, and they believe that it is a less risky choice because it is a brand they know. Thus, the brand also helps with interpretation, with processing and the confidence that people have in the choices that they make. The brand also gives other benefits of self-expression. These tend to apply more in the consumer goods, and business-to-business realms. In business-to-business, branding can be of great importance: for example, there is a professional food mixer called the 'Hobart' brand, which is the 'Mercedes' of professional mixers. There is also the issue of providing user satisfaction. The idea that `by using this particular brand I am benefiting, because I know that I'm using the best. I know that I'm using something that has quality and in which I have faith'. From the marketer perspective, it can be seen that brands are very important, because they are an effective way to secure a sustainable, competitive advantage. The brand allows improved identification of the product, and the likelihood of a repeat purchase. Brands are a real way to build customer loyalty. They increase the ability to differentiate products, within a line and apart from competitors. They allow for segmentation, and enable a company to produce different brands for different groups of customers. Brands provide a means for legal protection - and this is an added protection for the particular bundle of attributes on offer. A very important part of branding is the facilitation of new product introduction; the notion of 'extending'. The thing that allows you to extend to a new territory, into a new country, is very often the brand and the faith that people have in that. Finally, the brand offers a source of financial return. The research on the benefits of strong brands, looking across companies, shows that companies gain greater loyalty because of brands. A strong brand 9

Brand Equity makes people purchase it more often. It creates resistance to competitive marketing action. This means that when the competitor comes up with a new campaign, lowers the price, etc, a strong brand will help the customer to stay with you. Larger margins can stem from strong brands. Strong brands gain the ultimate in pricing.Strong brands are able to raise their prices without having as many people switch, but when a strong brand lowers the price, more consumers come in than in the case of the less strong brand. When a strong brand makes a mistake, people treat it with more leniency and with more kindness than they do if it is a mistake from a weaker brand. Thus it is important for a company to realize what product is important for what kind of customer & in what kind of regions thus the brand preference will differ from person to person, place to place & time to time .Brand Equity determines the value & importance of the product once the product produced is correctly branded & executed.

What is Brand Equity?
In lay terms, brand equity is the value that a consumer attaches to a certain brand. Although brand equity can be measured tangibly by way of certain indicators, a large component of the concept is intangible, i.e. what perceptions and associations people have of a certain brand, 10

Brand Equity and the familiarity of those brands in the mind of the consumer. The diagram below illustrates how brand equity is made up:

From the diagram, it is evident that the sources that drive brand equity (brand awareness, consideration and the factors associated with it) will lead to certain outcomes. And the more powerful the sources are, the more significant these outcomes will be. Thus, a strong brand loyalty and ability to command a price premium will lead to resilience against any negative short-term market factors. And this is why brand equity is essential in assessing the performance of a brand: it has the potential to secure the success of the brand against many variable in-market factors.

Brand Equity is defined as follows:
 Brand equity represents the value (to a consumer) of a product, above that which would result for an otherwise identical product without the brand's name. In other words, brand equity represents the degree to which a brand's name alone contributes value to the offering (again, from the perspective of the consumer)."

Brand equity can be defined as three distinct elements:

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Brand Equity • • • The total value of a brand as a separable asset -- when it is sold or included on a balance sheet. (Brand Valuation) A measure of the strength of consumers' attachment to a brand. (Brand Loyalty) A description of the associations and beliefs the consumer has about the brand. (Brand Description)

Brand Equity as Brand Value
Brand value involves actually placing a dollar or rupee value on a brand name. The reasons for doing this are usually to set a price when the brand is sold and also to include the brand as an intangible asset on a balance sheet (a practice which is not used in some countries). It is important to note that there is a significant difference between an "objective" valuation created for balance sheet purposes, and the actual price that a brand may get when sold. A brand is likely to have a much greater value to one purchaser than another depending on the synergy that exists. For acquisitions, the value of a brand to a certain purchaser is often estimated through scenario planning. This involves determining what future cash flows the company could achieve if it owned and took advantage of the brand.

Brand Equity as Brand Loyalty
Loyalty is a core dimension of brand equity and is a way to gauge the strength of a brand. It represents a barrier to entry, a basis for a price premium, and time to respond to competitive innovations. The variety of measures used for brand loyalty usually is a combination of one or more of the following: • • • • Price/demand measures--focus on a brand's ability to command a higher price or make consumers less sensitive to price increases than price increases for competing brands. Behavioral measures--focus on consumers' behavior. Attitudinal measures--focus on general evaluative measures such as 'liking' or 'disliking.' Awareness measures--focus on identifying a brand as being associated with a product category.

Brand Loyalty and Equity refer to the notion that some brands are "stronger" or better than others.

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Brand Equity

Brand Equity as Brand Description
Brand description, the final component of brand equity, concerns the actual attributes of the brand. These attributes or associations are major creators of brand loyalty. A wide variety of techniques exist for matching consumer associations with perceptions of a brand. These techniques can be both qualitative and quantitative. They work by getting the respondent to link each brand with pictures or words. These attributes then can be measured with multi-dimensional scaling to position the attributes relative to one another.

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Brand Equity

Brand equity and market share
Further, the importance of brand equity is that, by understanding how brand equity drives market share, it is then possible to make use of this knowledge in order to grow the market share of a brand. Understanding the link between brand equity and market share will thus assist marketers in which strategies are required to grow market share. The concept of brand is integral to the success of any given product. But what measures a strong brand or the success of a brand? Is it high market share, popular advertising, effective point of sale, or the ability to command a price premium? Very often only the market share of a brand is looked at as a means of determining how successful the brand is. Although market share is of importance in assessing the performance of a brand, its relationship with brand equity is of great significance, as this relationship can be an indication of the potential success of a brand, or alternatively can direct strategy on how to attain such success. The following diagram illustrates the relationship between brand equity and market share:

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Brand Equity

Brand equity and market share are not always proportionate. As can be seen from the diagram, the ideal place for a brand to be situated is in the top-right quadrant. This shows that the brand is successful in that it has a strong brand equity and high market share. However, this may not always be the case. It is possible that a brand may have high brand equity, but may not have an accordingly high market share (topleft quadrant). In order to improve the market share of a brand in cases such as this, regard must then be had to in-store issues such as display, shelf space, distribution etc. Thus, understanding brand equity plays an important role in that it gives an indication of how a brand's performance can be improved. Where there is low brand equity and a strong market share (such as the bottom right-hand quadrant), the situation is extremely tenuous. Although the picture may look good owing to the strong market share, the reality is that, with weak brand equity, the product is vulnerable to competitor or other in-market activity. Therefore, measuring only the strong market share does not give the complete picture - brand equity must also be considered, and by improving this, the full potential of the brand can be secured.

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Brand Equity

Brand Equity v/s In-Market Performance: Strategies for Growth
A comparison of Brand Equity Indices – from ACNielsen | Winning Brands – with in-market performance data reveals that Brand Equity valuation can be a tangible and accountable measure for understanding the extent to which Brand Equity drives market share. Marketers can therefore develop strategies to build market share based on strengthening the sources driving brand equity or other marketing variables – such as distribution, pricing or targeting – that may be impeding the brand’s in-market performance. A comparison of the Brand Equity Indices of FMCG brands, as well as a few in other industries, reveals that for most, their BEIs relative to the competition are in proportion to the market shares for the category. This demonstrates that brand equity is a strong driver of market share, and the sources of brand equity – familiarity and brand associations – should be examined to determine how share can be built. However, in some cases, BEIs do not correlate with the brand’s inmarket performance, indicating there are factors other than Brand Equity, eg distribution, pricing or targeting, that must be addressed to build share. Strengthen Sources of Brand Equity to Drive Market Share Case Study 1: Food Brand A should increase its distribution

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Brand Equity

In the absence of brand equity valuation it could be concluded that Brand A’s equity must be strengthened to increase market shares. However, Brand A has stronger equity than Brand B, but lower distribution, resulting in weaker market performance. Brand A should maintain its familiarity levels and current positioning but increase its distribution coverage. Case Study 2: Multinational Personal Care Brand Brand A should strengthen its brand image in Country X & familiarity in Country Y

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Brand Equity

All key brands in the category across two countries are multinational with relative brand equity indices in proportion to market shares. In both countries, Brand A must strengthen its equity to drive market share. The relative importance of the sources of brand equity for the category in both countries is fairly similar. In Country X, Brand A and B are level on familiarity but A has negative 'old-fashioned' brand associations. Brand A must focus on becoming more contemporary and create a distinct positioning on associations that are strong drivers of brand equity. In Country Y, however, Brand A has very low familiarity and must focus on strengthening its awareness and brand consideration. Case Study 3: Baby Food Brand A should leverage its equity and launch a low price line extension

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Brand Equity

Equity for Brand A is significantly stronger than for Brand C, but their market shares are comparable. Brand A is priced at a 151% premium over C, which results in a lower brand equity to market share ratio for Brand A. Brand A has strong brand awareness and a distinctive image on attributes that are important in the category, which drive its strong brand equity. However, due to its price premium, its brand equity does not translate into an equitable market share. Brand A can leverage its equity and launch a lower price line extension to compete with Brand C and increase overall brand share. Thus the above three case study examples clearly shows the relevance of brand equity in the market & its relationship with the market factors in accordance with its in market performance affecting its overall market share & company’s profits.

Measuring Brand Equity
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Brand Equity

Brand equity does not exist in nature, to be assayed like gold ore in rock. It’s measurement depends on how you define it. Brand equity is a concept. It does not exist in nature in the manner that the specific gravity of elements exists as a physical entity. It cannot be assayed like the gold content in a piece of ore. Those who argue that brand equity cannot be measured miss the essential point. Its measurement depends on how it is defined. That definition must have pragmatic value to a marketer of consumer products or services. It should help improve marketing effectiveness and efficiency by providing a yardstick with which to evaluate these things. Also, the definition should reflect the role of the brand in the dynamics of consumer choice in a competitive environment.

To its buyers, a brand is a promise
A brand is a symbol carrying with it certain associations and images. In customer terms, a brand represents a promise. Its value to consumers is that it reduces risk, saves time and provides reassurance. Predictable results are the promise of a brand. As long as a product or service meets a customer’s expectations with no unexpected negative results, a buyer is likely to continue to buy the brand. It is the customer-oriented definition of a brand that is at the heart of the concept of brand equity. Thus it is a promise expressed in the form of providing quality to its customers

Qualitative Measures: The Brand Equity Ten
The Brand Equity Ten are ten sets of measures grouped into five categories, which attempt to gauge the strength of a brand. The first four categories represent customer perceptions of the brand along the four dimensions of brand equity- loyalty, perceived quality, associations and awareness. The fifth includes two sets of market behavior measures. Loyalty 1. Price Premium: A basic indicator of loyalty is the amount a customer will pay for a product in comparison to other comparable products. A price premium can be determined by simply asking consumers how much more they would be willing to pay for the brand.

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Brand Equity 2. Customer Satisfaction: A direct measure of customer satisfaction can be applied to existing customers. The focus can be the last use experience or simply the use experience from the customer's view. Perceived Quality and Leadership Measures 3. Perceived Quality is one of the key dimensions of brand equity and has been shown to be associated with price premiums, price elasticity’s, brand usage and stock return. It can be calculated by asking consumers to directly compare similar brands. 4. Leadership/Popularity has three dimensions. First, if enough consumers are buying into the brand concept it must have merit. Second, leadership often taps innovation within a product class. Third, leadership taps the dynamics of consumer acceptance. Namely, people are uneasy swimming against the tide are a likely to buy a popular product. This can be measured by asking consumers about the product's leadership position, its popularity and its innovative qualities. Associations/ Differentiation Measures 5. Perceived Value: This dimension simply involves determining whether the product provides good value for the money and whether there are reasons to buy this brand over competitive brands. 6. Brand Personality: This element is based on the brand-asperson perspective. For some brands, the brand personality can provide links to the brands emotional and self-expressive benefits. 7. Organizational Associations: This dimension considers the type of organization that lies behind the brand. Awareness Measures 8. Brand awareness reflects the salience of the product in the consumer's mind and involves various levels including recognition, recall, brand dominance, and brand knowledge and brand opinion. Market Behavior Measures

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Brand Equity 9. Market Share: The performance of a brand as measured by market share often provides a valid and dynamic reflection of the brand's standing with customers. 10. Price and Distribution indices: Market share can prove deceptive when it increases as a result of reduced prices or promotions. Calculating market price and distribution coverage can provide more accurate picture of the product's true strength. Relative market price can be calculated by dividing the average price at which the product was sold during the month by the average price at which all the brands were sold.

To Financiers, brand equity = retained earnings.
There are several possible ways to measure brand equity in financial terms. Brand Equity Index Model Under this model brand equity is calculated by multiplying the relative price of the product by market share in units. The product is then multiplied by a measure of loyalty or durability representing the staying power of the brand. Book or Replacement Values Brand equity is estimated as the replacement cost of the brand over a generic equivalent. A generic equivalent is a product that is sold only on the basis of product attributes. Alternatively, replacement value can be estimated as book value. The challenge with this latter method is that marketing expenditures do not appear on the balance sheet. For either method, replacement cost is difficult to estimate accurately. Market Transactions Brand equity is estimated by identifying comparable mergers or acquisitions. The premiums paid for those companies are associated

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Brand Equity with the equity in their brands. Data is scarce for comparable M&A's, however, and buyers could have paid more or less than the true value of brands. Incremental Cash Flow from Branding Determining the cash flows of a brand and subtracting the cash flows from unbranded product estimate brand equity. The estimation challenge becomes more difficult as the product of interest belongs to an increasingly differentiated category. For example, it is harder to find a generic equivalent for cars than for cigarettes.

Discounted Value Of Future Earnings Projections Brand Equity is evaluated by discounting the value of future earnings projections and adding to the value the cost competitors would incur if they duplicated the brand. Price/Earnings Multiple Multiplying current earnings by an estimate for P/E multiple yields an equity price. The critical step is estimating the P/E multiplier. One approach that has been taken is to measure brand strength by a weighted average of seven factors. (Penrose, 1989) Next, the P/E multiplier is estimated using and S-shaped relationship between brand strength and the P/E multiple that is based on similarities to risk free rates, industry rates, and other factors. Value of Avoided Advertising Advertising is a key tool for developing brand strength that management can leverage into equity. Advertising can affect how readily a consumer associates attributes with a brand, what brands

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Brand Equity consumers include in their evoked set, and other behavioral and perceptual factors. The effect of advertising builds up over time and leads to extending brands with greater ease and less cost. An estimate of Brand Equity is the value of advertising avoided to achieve the current level of performance.

To marketers, brand equity = retained customers
To a marketer, creating and maintaining brand equity can provide for increased profitability, reduced vulnerability to competition, the ability to charge premium prices, and a platform for introducing new to market products carrying the brand name. There is general agreement among marketing theorists that brand equity is a composite of a brand’s image, its awareness level, and its level of consumer preference. However, there is no generally agreedupon definition nor is there an accepted method for calculating the value of brand equity. In the financial community, equity = retained earnings. In the marketing community, a more relevant definition would be: equity = retained customers

A brand’s equity is comprised of its loyalty rate and its relative price
The proposed definition of brand equity is the aggregate value of the purchases of customers who buy the brand repetitively. Its magnitude is a function of their frequency of purchase, the extent of repetition and the relative price they pay for the brand. Relative price reflects the perceived value of a brand. A high relative price (over 1.00) indicates that a brand’s buyers value it more than the others in the category. Conversely, a low relative price reflects weak brand “pull”. By using relative price in the calculation of brand equity, we introduce the element of perceived value for the money. This approach to equity will “credit” brands that are capable of commanding premium prices among minority sized segments. Relative price is expressed as the ratio of the average retail selling 24

Brand Equity price of the brand to the category average. For example, for the Canadian whiskey category, a leading brand’s relative price based on 1992 averages is 1.0; while that of a leading “super-premium” brand is 1.75. In the Gin category, a major import’s relative price is 1.26, a leading domestic brand’s is .64 and another popular import’s is 1.23. Loyalty rate is defined as the percent of category purchases of the brand by people who buy the brand. For example, if Cognac brand “A” buyers report that 65% of their cognac purchases are of brand “A”, its loyalty rate would be .65. If people who buy scotch brand “C” report that in the course of the past year, 40% of their scotch purchases were of brand “C”, its loyalty rate would be .40. Taking these two dimensions--loyalty rate and relative price--we propose the equation: EQ = L x Prel where EQ = Brand Equity, L = loyalty rate and Prel =relative price. By giving equal weight to each of the variables, the formula allows for the use of the equation as a barometer of marketing effectiveness, in that increases in loyalty rate or relative price can be produced by improvements in marketing effectiveness or efficiency

INCREASING BRAND EQUITY
We believe this approach to defining and measuring brand equity helps to focus marketing strategy and make it easier to choose among alternatives. If, for example, a major goal is to increase brand equity, the marketing strategies and tactics to be used must either increase brand loyalty or pave the way for a price increase while not losing a significant number of customers. Experience shows that brand loyalty can be strengthened in one of several ways: increasing continuity of purchase via such techniques as “frequent flier” or “frequent buyer” programs, “members clubs”, “continuity promotions” that reward cumulative purchases; affinity programs, that create identification between the users of a brand and some recognizable organization, cause, lifestyle or movement. Marlboro uses such programs prominently in its brand promotions; brand differentiation, that creates real or perceived differences between the brand and its competitors; presence marketing, that increases the visibility of the brand as well as its salience, so that 25

Brand Equity customers have less opportunity to even consider alternative brands when they are in the marketplace for the product. Anheuser-Busch has used this strategy effectively to keep its Budweiser brand at the top of the category for years. Increasing price can be an effective strategy if a large enough number of the brand’s customers believe it will deliver value at the higher price. We’ve known cases where increasing price has actually help to build business. In one case, the managers of a small little known spirits brand raised its price as a way of committing “brand suicide”. They were amazed and delighted to see the brand’s sales increase shortly thereafter. Thus emboldened, they raised the price again and saw sales continue to rise. Today this brand is reported to be the biggest profit contributor to the company’s stable and research shows its user base to be very loyal. Grey Poupon was successfully positioned atop the seemingly mundane mustard category by a combination of premium pricing and adroit advertising. Its equity is likely to be much greater (on a per case basis) than its larger selling rivals. Trading up can be an effective way to increase price while protecting a brand’s original user base. This is accomplished by introducing a justifiably more expensive line extension while continuing to offer the “parent” product at the same price. The key word is “justifiably”, so that the new entry does not denigrate the quality of the parent. In sum, we believe that a brand is a promise made to its customers and to its owners. Promises kept yield loyal customers and will produce a steady stream of profits for years to come. Brand equity is at its root the aggregate value of the future purchases of its customers. And that is what brand marketing must maintain and grow.

BUILDING BRAND EQUITY
The basis of brand equity lies in the relationship that develops between a consumer and the company selling the products or services under the brand name. A consumer who prefers a particular brand basically agrees to select that brand over others based primarily on his or her perception of the brand and its value. The consumer will reward the brand owner with dollars, almost assuring future cash flows to the company, as long as his or her brand preference remains intact. The buyer may even pay a higher price for the company's goods or services because of his commitment, or passive agreement, to buy the

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Brand Equity brand. In return for the buyer's brand loyalty, the company essentially assures the buyer that the product will confer the benefits associated with, and expected from, the brand. In order to benefit from the consumer relationship allowed by branding, a company must painstakingly strive to earn and maintain brand loyalty. Building a brand requires the company to gain name recognition for its product, get the consumer to actually try its brand, and then convince the buyer that the brand is acceptable. Only after those triumphs can the company hope to secure some degree of preference for its brand. Name awareness is a critical factor in achieving brand success. Companies may spend vast sums of money and effort just to attain recognition of a new brand. But getting consumers to recognize a brand name is only half the battle in building brand equity. It is also important for the company to establish strong, positive associations with the brand and its use in the minds of consumers. The first step in building brand equity is for the company to define itself and what it hopes to represent for consumers. The next step is to make sure that all aspects of the company's operations support this image, from its product and service offerings to its marketing programs to its customer service policies. When all of these elements support a distinctive image of the company and its products in the minds of consumers, the company has established brand equity.

Managing Brand Equity
Consistency is the key to successfully building and managing brand equity. Having a long-term outlook and projecting a consistent image of your brand to the customer will maximize the results of building 27

Brand Equity brand equity. It is critical for managers to realize that brand equity can have positive as well as negative effects on a product or company. In the end, it is the customer that truly defines what brand equity means. If management feels it is necessary to change the direction of a brand or change a product it must be careful not to change too quickly. There are many examples of companies that have changed a product or brand too much or too quickly. On these occasions, consumers met changes with adverse reactions. The most famous example is CocaCola. They changed the formula of their flagship product Coke, and consumers reacted so poorly to the new product that the old formula was reintroduced and the new formula eventually was discontinued. The consumer through the product experiences brand equity. The product has certain attributes or characteristics that deliver the equity to the consumer. If any of these attributes are changed or eliminated, the equity delivered to the consumer is also changed. Managing brand equity is a continual process with long-term implications. Unfortunately, many brand managers are forced to focus on short-term goals such as market share and profits. Many programs that are implemented to boost short-term sales or market share may be detrimental to the long-term viability of the brand. For example, Proctor & Gamble has started to test market a program to move away from using coupons to a system of every day low prices. This is, in part, because consumers may become loyal to the coupon or promotion and not to the product itself. Constant promotional programs erode margins and eventually brand loyalty. Ultimately, brand equity is damaged. In 1988, Graham Phillips, Chairman of Ogilvy and Mather Worldwide, said, "I doubt that many would welcome a commodity marketplace in which one competed solely on price, promotion and trade deals, all of which can be easily duplicated by competition. This would lead to ever decreasing profits, decay, and eventual bankruptcy. About the only 28

Brand Equity aspect of the marketing mix that cannot be duplicated is a strong brand image." This quote clearly demonstrates the importance of managing brand equity. In many categories, brand equity is the only point of differentiation between products. Many people may think that building and maintaining brand equity is solely the responsibility of brand managers, but it is actually a crossfunctional team effort. Financial managers are important because they can fully analyze the costs of maintaining and building brand equity. For example, launching a new brand is extremely consuming in terms of money and time. It may be more cost effective to extend a current brand than introduce a new brand. Marketing research is critical for many obvious reasons. It develops most, if not all, of the research and data that companies will use for deciding strategic issues. Marketing research can also help determine how brand equity is actually measured. Once a definition of brand equity is established, the responsibility of tracking According to Keller, to maximize long-term brand equity, managers must take 10 key steps: 1) Understand brand meaning and market appropriate products in an appropriate manner. 2) Properly position the brand. 3) Provide superior delivery of desired benefits. 4) Employ a full range of complementary brand elements and supporting marketing activities. 5) Embrace integrated marketing communications and communicate with a consistent voice. 6) Measure consumer perceptions of value and develop a pricing strategy accordingly. 7) Establish credibility and appropriate brand personality and imagery. 8) Maintain innovation and relevance for the brand. 9) Strategically design and implement a brand hierarchy and brand portfolio.

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Brand Equity

10) Implement a brand equity measurement system to ensure that
marketing actions properly reflect the brand equity concept.

Brand Image
Images evoked by exposure to a named brand like brand personality, brand image is not something you have or you don't! A brand is unlikely to have one brand image, but several, though one or two may predominate. The key in brand image research is to identify or develop the most powerful images and reinforce them through subsequent brand communications. The term "brand image" gained popularity as evidence began to grow that the feelings and images associated with a brand were powerful purchase influencers, though brand recognition, recall and brand identity. It is based on the proposition that consumers buy not only a product (commodity), but also the image associations of the product, such as power, wealth, sophistication, and most importantly identification and association with other users of the brand. In a consumer led world, people tend to define themselves and their Jungian "persona" by their possessions. According to Sigmund Freud, the ego and superego control to a large extent the image and personality that people would like others to have of them. Good brand images are instantly evoked, are positive, and are almost always unique among competitive brands. Brand image can be reinforced by brand communications such as packaging, advertising, promotion, customer service, word-of-mouth and other aspects of the brand experience. Brand images are usually evoked by asking consumers the first words/images that come to their mind when a certain brand is 30

Brand Equity mentioned (sometimes called "top of mind"). When responses are highly variable, non-forthcoming, or refer to non-image attributes such as cost, it is an indicator of a weak brand image.

Importance of Brand Equity
Brand Equity is important for three major reasons:

1. Brand Equity creates shareholder value
Building Brand Equity establishes a bond with consumers. • • • Identifying, rationalizing, and taking steps to own the Brand Promise can ensure that the brand is emotionally connected with consumers. This establishes loyalty and commitment and therefore the ability to command a premium price. Examples of Brands that have understood this include:
Brand Brand Promise

Pantene Dove Volvo Nike

Healthy Hair Enhanced self-image through skin care Fun, family and entertainment Self realization through athletic activity

Heinz Ketchup (2001+) Ability to protect loved ones

These brands have created long-term, consumer-preferred franchises that deliver reliable streams of revenue and profit to their brand owners.

2. Brand Equity Building is a competency that can be mastered to create competitive advantage
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Brand Equity

• • • •

Few brands manage their Equity consistently and at every consumer touchpoint. Even fewer link their Brand Equity to marketplace and financial performance indicators. Brand Equity often becomes a facet of the brand that is misunderstood and under-used. Developing a process to consistently measure, plan and develop Brand Equity is the true path to strong brands and sustainable competitive advantage.

3. Brand Equity management creates an array of growth

opportunities for the business
• The process of defining the Brand Vision requires intense consumer interaction. The very action itself reveals the opportunities for the brand – both within the current business category and in new categories and businesses. For example, Dove’s Equity of enhanced self-image through skin care enabled the brand to extend from soap into moisturizer and other beauty care categories (where growth and margins are higher).



Virgin's Equity of a “Good deal for consumers” enabled the brand to extend to categories as diverse as insurance, phones, airlines, and even wedding

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Brand Equity

Laws of Brand Equity


The Law of Contraction: A brand becomes stronger when its

focus is narrowed. This does not imply carrying a limited product line, but rather limiting and focusing a brand on only one type of core product, which in Titan's case happens to be watches. Titan, though possessed of a wide product line, has stuck to its focus. It hasn't launched other types of products and stuck them with the Titan name, which would have only gone on to cannibalize the value of the core brand. As a result of this, Titan has developed for itself an image of being "time-keeping experts" in the minds of the consumers.



The Law of Advertising: Once born, a brand needs to actively
advertise in order to stay healthy and maintain market share. If done right, advertising is more of an investment than an expense. Titan has implemented this by always maintaining a high degree of visibility when it comes to its advertising. In addition, it possesses one of the most recognizable ad-jingles in the history of Indian advertising.



The Law of the Word: Any brand worth its salt should strive to
"own" a word or words in the mind of the consumer. Examples of such brands are Volvo, who owns the word "safety", Mercedes, who own the word "prestige" and Coca-Cola, who own the word

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Brand Equity "cola". Titan, at least when viewed in the context of the Indian watch market, seems to own the word "quality". Though unsubstantiated by any formal market research, in an informal survey we conducted among a sample of 30 people we know (including friends, family, neighbors and acquaintances), 19 of them, when asked what one word came to mind when they heard 'Titan Watches' answered "quality". A further 8 answered "Indian", another word that would do Titan absolutely no harm to own in the minds of their prospects. •

The Law of Quality: Though quality is essential to the survival
and growth of any brand, the fact remains that brands are not built by quality alone. The perception of the brand is as, if not more significant than mere quality. It is here that Titan "scores". As mentioned previously Titan more or less owns the word "quality" in the minds of the consumers, thereby implying that it is perceived as a quality product. Thus, it's actual quality, as well as it's perception of being a quality product combine to work towards building the strength of the Titan brand.

more than a name. The difference between products is thus not so much between the products, as it is between their names, or perceptions of the names. Seeing as how its name is perhaps the most important element of a brand, we feel that this point warrants a slightly more in-depth discussion. Joe Marconi identifies 4 major factors to be kept in mind while naming a brand: 1) It should suggest stability and integrity. 2) It should avoid negative imagery. 3) It should avoid acronyms, the use of which Ries and Trout call "the no-name trap". (Perhaps the sole exceptions to this are BMW & IBM). 4) It should avoid anything-generic sounding (General, National, Standard, etc), as this would not help in defining a brand's personality. Let us see to what extent Titan satisfies these conditions. First of all, the name 'Titan' itself comes from Greek mythology, and symbolizes greatness, grandeur and power. Remember the Titanic? It is easy to pronounce, as well as to remember. One only has to compare its name to that of its biggest competitor, HMT to see how well thought out the name Titan is. HMT, while being an acronym, expands out to 'Hindustan Machine Tools', a generic name if we ever heard one. Asides from all these differences, the question of perception arises. A



The Law of the Name: In the long run, a brand is nothing

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Brand Equity watch is a product, the purchase of which is perhaps driven more by perception than anything else. What sounds more classy and sophisticated? Titan or Hindustan Machine Tools? •

The Law of the Company: Brands are brands, and companies
are companies. There is a difference. Titan is owned by the Tata Group, who though highly regarded in Indian industry are associated more with heavy industries such as steel and truck building, than with watch making. Chances are that no one would buy a Tata watch (its name invoking the same, if not greater reaction than an HMT). People would, however buy a Titan.



The Law of Siblings: There is always a time and a place to
launch a second brand, but when this is done it should be ensured that both brands have separate and distinct identities. Each brand should be kept unique and special. When Titan decided to diversify into the jewellery segment, they did not call their new brand 'Titan Jewellery', inspite of the high standing of the Titan name in the minds of the Indian consumers. To do so would be to undermine the power of the Titan brand; this is that of being “watch experts”. Hence, the jewellery was called Tanishq.



The Law of Shape: A brand's logotype should be well
designed, in order to fit the eyes. Visual symbols (again with the possible exceptions of Nike's "swoosh" or Mercedes' 3-pointed star) are highly overrated. The meaning lies in the words, not the symbol. The Titan logo, though well recognizable (please refer to the cover page in the rare event that you do, in fact actually NOT recognize it) is always accompanied by the words "TITAN" in a clear, crisp typeface-denoting power (through the use of capital letters) and class at the same time.



The Law of Color: A brand should use a colour and typeface
that is the opposite of its major competitor. For example, while Coca-Cola stands for red and appears in running handwriting, Pepsi stands for blue and appears in capital, modern looking letters. Similarly, while HMT appears in small silver lettering, Titan appears in capital letters, and is usually in black.



The Law of Borders: Finally, a brand should know no borders
or boundaries. With a name that stands for Hindustan Machine Tools, HMT would be hard-pressed to sell a single watch outside Indian Territory. Such is not the case with the more globally 35

Brand Equity oriented name, Titan. As mentioned previously, Titan is sold in over 40 countries through marketing subsidiaries in London, Singapore and Dubai. Thus far, we have restricted ourselves to issues exclusively concerned with the role of the brand in building brand equity. The fact however remains that brand building is an exercise that requires effort in a number of ways, many of them unrelated to the actual "brand" as such. These could be related to the product's image, the company's image, public perception of the parent company, and efficiency of promotional measures, to name but a few.

The Benefits of Brand Equity
What are the benefits of strong brand equity? Well, strong brand equity leads to, strong market share, customer loyalty, more favorable response to price increases, less vulnerability to competitor activity, brand extension opportunities, and communication messages which reach the consumer. In attaining these benefits, strong brand equity will ensure that a product is of an enduring nature. Ultimately, strong brand equity will improve profitability. To build a winning brand, therefore, is to understand the relationship between brand equity and market share, and to leverage both to their full potential. In so doing, a brand will be successful and sustainable in the long term. It must be kept in mind that increasing market share does not increase brand equity, whereas increasing brand equity invariably leads to increased market share.

Do’s & Don’ts in Brand Equity
Define the core brand's position and value clearly:

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Brand Equity A product should be properly positioned and its value (which includes price, quality and image) should be properly defined. As mentioned in the section regarding the law of the word, the two words most highly identified with Titan are “quality" and "Indian". These should thus be emphasized upon. This is exactly what Titan has done, positioning it's watches as high quality, Indian made watches, and emphasizing upon it's value for money as well as it's classy image.

Don't neglect Public Relations:
Public Relations, or PR, are vital to the success and survival of any brand. Unfortunately, its value as a brand building tool has more often than not, been undervalued. Newsletters, event and entertainment sponsorships, and other forms of PR help to define the personality of a company or brand, positioning it as a good corporate citizen, and someone nice to do business with. In keeping with India's obsession with cricket, Titan has often sponsored cricket tournaments, including the now legendary 1997 Titan Cup. Titan also sponsors a number of popular television programmes, a prime example of which is Star World's "The Practice".

Realize that promotions can be tricky:
Promotions ought to be used to create recognition and build brand loyalty. Needless and irrelevant contests tend to shift the customer's attention from the product being promoted to the prize being offered (be it a trip to the US or a new car). A better (and far less expensive) way to promote a brand would be to allow it to be used by other companies in their promotional offers. Titan is currently being offered by both Outlook magazine and Welcome Award (the privileged customer programme of the Welcome Group chain of hotels) in their various promotional offers. The most sensible and effective forms of promotions are measures such as establishing a privileged customer club offering customer points redeemable for discounts and rebates. Titan has their own privileged customer club, Titan Signet, which has an impressive 1.6 lakh members.

Always remember the USP:
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Brand Equity

A USP (Unique Selling Proposition) is not only what gives the customer a reason to buy the brand, but is also what helps him distinguish the brand from its competitors. Titan's USP is two fold, and can perhaps best be described in six words. "An Indian company offering international quality". This works for Titan in two ways. First of all, it's emphasis on 'international quality' successfully negates it's major Indian competitor, HMT, who is still perceived as a company offering solid and reliable, yet singularly unstylish and staid looking watches. Secondly, with the plethora of foreign brands available in the country today, Titan emphasis on being Indian enables it to effectively meet their threat. Interestingly, while Titan has never actively promoted the fact that its parent company is the Tata Group, at the same time it has never really done much to hide the fact. Thus while capitalizing on the Tata name; it has built its own identity as an Indian brand offering high quality watches at prices significantly below those of comparable foreign brands.

If you can't be first, be better:
Being the first entrant in any category earns pioneer status for a brand and gives it the advantage of being the probable market leader. Such was the case with HMT. However with its emphasis on its USP and aggressive advertising, Titan convinced the market that it produced the better product and thus destroyed HMT's near monopoly of the Indian watch market.

Expand sensibly:
Extensions should always be logical and market driven and not mere "product explosions". As the market environment changes with the addition of say, greater competition, or changing customer wants and perceptions, brand extension should be undertaken. It should not, however be undertaken arbitrarily. When Titan entered the market in 1987, its main competitor was HMT, a company offering reliable and economically priced watches. Titan thus started out being a company offering a wide variety of models, most of which were priced economically, with the added USP of being a more stylish alternative to HMT. As times changed, however, so did Titan. With the growing entry of foreign brands into the market, Titan continued to introduce sub brand after sub brand to meet every new challenge. With the entry of the "high performance" sports watch brands in the form of Tag Hauer, Omega and Breitling, Titan introduced it's own line of chronographs 38

Brand Equity priced significantly lower than the competition at a mere Rs. 50006000. Similarly, to counter the entry of foreign, youth oriented "style" brands such as Esprit and Swatch, Titan introduced the 'Fast Track' sub brand, again priced extremely competitively.

Conclusion
Strong brands provide value and have a variety of benefits. To customers, brands provide direction, they provide reassurance. Brands reduce risks and they provide a way to self-express. To marketers, brands provide a competitive advantage. They provide the means and the way of differentiation. Brands provide a means for segmentation for different markets, and a point of entry into new categories that are going to bring greater financial return. Strong brands are based on a relevant differentiated position. Without that, you cannot build a strong brand. A variety of associations are linked to a strong brand. Sometimes we can get carried away, saying This is the most important thing to customers; this is what we should link', and we forget there needs to be more than any one single association. If you look at strong brands, they have a couple of very good sources of strength and a bigger picture of what the brand means and how it is relevant to the customer. The associations that are built for the brand need to be based on careful and thorough analyses of the customers, of the competitors and of the company. It must be emphasised that the organisation must be committed to the brand, both philosophically and financially. Only a small portion of brand efforts will have a payoff in the short run. In fact, much of the process of brand building will cost the organisation in the short run. Branding is a long-run proposition that the organisation must be committed to in order to live up to the brand promise that is made. Strong brands arise from the thorough integration of the brand throughout the entire marketing mix. The three Cs of branding, are Consistency, Clarity and Convergence. Everything has to work together to build identified brand content. Companies work hard building the strength of their brands - it is critical to the ongoing brand management process to have meaningful and actionable data-driven measures of these efforts.

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Brand Equity Building a brand, cultivating its strengths, pruning its weaknesses, and making it more valuable to its owners is the bottom line job of marketing. Everything marketing does should ultimately work in concert to make a firm's brands more valuable. There are many different tactics and strategies that go into strengthening a brand name: advertising, promotions, public relations, and research and development, to name a few. While companies use these and many other methods to strengthen their brands' positions in increasingly competitive markets, how can they measure the return on this work? More precisely, how can a company determine the worth of one or any its brands? Putting the brand to a true test, the company can better judge how much that brand is worth and how much opportunity for improvement might exist. Thus it is essential to determine the brand equity of the product in order to acquire solutions to the above mentioned questions.In conclusion, brands must be carefully and constantly nurtured over time. This is not a one shot deal; this is something that we have to be in for the long run.

One and a half decades into the process of economic liberalization and global integration, India, today, is well established as a credible business partner, preferred investment destination, rapidly growing market, provider of quality services and manufactured products; and, stands on the threshold of years of unprecedented growth. Achievements. Successes. Growing consuming class driving demand. Vibrant democracy. People who dare to dream. Indians and India have a story to tell. IBEF collects, collates and disseminates accurate, comprehensive and current information on India. In the overall nation branding campaign for India, IBEF plays three well defined roles:
• • •

Forum for brand vision development Co-ordinator of strategic marketing initiatives India Resource Centre

Board of Trustees

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Brand Equity
Mr. S N Menon Commerce Secretary Ministry of Commerce & Industry Mr. Rajiv Sikri Secretary (East) Ministry of External Affairs Smt. Kavita Bhartia Director Ogaan India Pvt Ltd Ms Gitanjali Kirloskar Chairperson India Japan Initiative Kirloskar Group Mr. Suhel Seth Chief Executive Officer Equus Redcell Advertising Co Ltd Mr. Darshan Singh Managing Director Pan India Consultants Pvt Limited Mr. Tarun Das Confederation of Indian Industry Mr. Ashok Kumar Mishra Secretary Ministry of Tourism Ms Simran Bedi Director - Corporate Affairs Media Transasia India Limited Mr. Salil Chaturvedi Managing Director Provogue India Limited Mr. Krishna Kumar Vice Chairman Tata Tea Limited

Mr. Chetan Seth Managing Director Raas Intratech (P) Ltd Dr. Naresh Trehan Executive Director Escorts Heart Institute & Research Centre Mr. Arun Maira Boston Consulting Group, India

Brand Development
Working with stakeholders from across a wide spectrum of business and academia, IBEF follows a consultative and inclusive process in developing contemporary global business brands for India Inc. India fastest growing free market democracy is representative of the emergent realities in business and industry. At the same time, it also conveys a cohesive and unifying message about India's competitive advantage, one that most people easily identify with. The brand portrays the distinctive qualities of all things Indian and has the dynamism to build an enduring reputation in the competitive global arena. This is India in the 21st century... Rapid all round growth… Globalization… Leading on the Strength of Intellectual Capital and the unbridled Spirit of Entrepreneurship...Democracy… the Permission and

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Brand Equity Right to be Different… the Synthesis of Structure and Non-linearity… that together fuel the Quest for Knowledge and provide the Impetus to Growth.
• • • • • •

8.2% GDP growth in fiscal 2004 Foreign exchange reserves of over US$ 120 billion Fastest growing population of workers and consumers Fastest growing telecom market Huge investments in infrastructure development Leadership in knowledge based industries

Served from India
Services exports from India - growing at more than twice the global average presented a great opportunity to IBEF to leverage Indian talent to build a lasting legacy in overseas markets. IBEF is set to launch a global communication campaign to establish the Served From India brand in target markets; highlighting the cost and quality advantages of sourcing a variety of services from India. Leadership in knowledge sectors has begun paying huge dividends as India moves centrestage to claim a larger share of both technology enabled and traditional services.

Brand Ambassadors
IBEF has set up a global network of Brand Ambassadors. Successful individuals with the desire, ability and commitment to work with IBEF, Brand Ambassadors, typically:
• • • •

Disseminate success stories in their communities Host and participate in occasional events Advise IBEF on communication strategies for particular markets Act as an outreach arm of IBEF, focusing on building the right economic perceptions amongst media and business

Strategic Initiatives
IBEF sponsors and promotes mega events of strategic importance that have the potential of contributing significantly to India's brand equity.

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Brand Equity One such event has been the 1st ASEAN-INDIA CAR RALLY 2004, which IBEF partnered as Premium Sponsor. Concurrently with the Rally, IBEF launched an extensive print media campaign in the ASEAN countries under the theme 'Opportunity India'.

IBEF also partners public and private organisations alike in projects that help take the India message to different markets. Co-operative arrangements are in place for the promotion of investment and trade through effective communication of investment and success drivers to the target audience. As part of its overall campaign to build positive economic perceptions, IBEF also undertakes the following activities:
• • •

Builds an identity for Indian business as a unique blend of tradition and modernity, rooted in values and ethics Forges links with opinion makers to keep India 'top of the mind' in key industry segments Manages both domestic and international media effectively through prompt and accurate information programmes to ensure that the target business audience always gets the right message.

India Information Pack
A ready reckoner on India, the Pack is a quick look through best that India has to offer, supported by facts, figures and images.Perfect for those seeking to make an India 'pitch' or access current and accurate information on India, the Pack contains:
• • • • •

India Brochure India Presentations India Posters India Film Articles & Images

IBEF frequently facilitates and manages India Information Pavilions at Trade Fairs and Exhibitions across the globe. IBEF regularly partners organisers of India-related events to improve the quality of information

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Brand Equity available for delegates and media on a range of business-related and economic issues; the Foundation also lends support to individuals and institutions to prepare presentations, reports and talking points on India.Past resources and the India Information Pack can be found online at www.ibef.org/brandindia.

Experience India Programme
To provide a better understanding of the change and transformation in India, IBEF, in co-operation with CII, facilitates visits by policy makers,venture capitalists, journalists, business delegations and business school students.These visits typically include:
• • • • •

Meetings with business leaders and policy makers Interactions with opinion leaders and news makers Visits to company sites, factories and BPO facilities Special events to expose the group to diverse aspects of the society and culture of both urban and rural India Special visits to heritage sites like the Taj Mahal in Agra and tourist destinations such as Goa and Rajasthan

Among others, IBEF has had the privilege of playing host to:
• • • •

Student groups from the Harvard Business School, Wharton School of Business and MIT Sloan Senior Business Editors from overseas media groups Business Delegations from Fortune 500 companies A group of journalists from Germany supported by the German Marshall Fund

Partners

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Brand Equity

CASE STUDIES
CASE STUDY 1: McDonalds

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Brand Equity

 What is McDonald’s?
McDonald’s is the world’s largest and best-known global leaders in food service retailing, with more than 27,000 restaurants serving more than 43 million customers a day in 119 countries. Approximately 80 percent of McDonald’s global restaurants are owned and operated by independent franchisees. Yet on any day, even as the market leader, McDonald’s serves less than one percent of the world’s population. McDonald’s out-standing brand recognition, experienced management, high-quality food, site development expertise, advanced operational systems and unique global infrastructure position it to capitalize on global opportunities.

 How it all started:
Dick and Mac founded the first McDonald’s restaurant in 1937 in a parking lot in California. It did not serve burgers, had no happy meals or a playground. The most popular item on the menu was the hotdog and people ate either on outdoor stools or in their cherished new autos while being served by teenage carhops. MR. RAY KROC (1954) first franchisee appointed by Mac and Dick McDonald in San Bernardino, California. The first McDonald’s built in 1940 by the McDonald brothers (Dick and Mac). Ray Kroc was the founder of the McDonald’s Corporation. First day’s revenues-$366.12 and the McDonald’s Corporation was created. Quality, Service, Cleanliness and Value (Q.S.C. & V.) became the company motto. The 100th McDonald’s opened in Chicago. Ray Kroc bought all rights to the McDonald’s concept from the McDonald’s brothers for $2.7 million. McDonald’s now has over 20,000 stores in 90 countries. The company claims it serves 29 million people a day and that a new store opens some- where in the world every seven hours.

History Of McDonald’s Brand
Mac and Dick McDonald established McDonalds brand in 1940 by using their surname. In 1962, When Dick McDonald sent Kroc an illustration of the McDonald family crest, Kroc had it added to the sign as a symbol of quality, replacing Speedee, the boyish chef character that the McDonald brothers had developed to designate the Speedee Service System. When others insisted that the crest was gaudy, the search was on for a more stylish corporate symbol. Turner fiddled with the logo, based on the Cdl in the Cadillac insignia, and Schindler used that to sketch a logo that pictured the slanted roofline of the store piercing a 46

Brand Equity line drawing of the golden arches in the form, as it is seen world over. In 1968, the roofline image was dropped and the McDonald’s name was added to derive the current logo. Since then logo has not undergone any major changes. The introduction of the Ronald McDonald character later developed a human element in the McDonald’s brand, and provided an instant link with children.

 Offering
A brand is an offering from a known source. McDonald’s carries many associations in the minds of people: hamburgers, fun, children, fast food, Golden Arches. These associations make up the brand image.

 Attribute
A Clean Fast Food Brand which tastes the same any where you eat in the World.

 Benefits
You don’t have to stay hungry for a long time. McDonalds ready to eat available

 Values
The World leader in Fast Food Restaurants.

 Culture
The brand represents culture of social gathering for families and groups.

 Personality
The World leader, A giant M.

 User
All kinds of consumers buy McDonald’s products irrespective of age, sex all over the world. One can see all types of personalities in the McDonalds restaurant.

Strategy Of The Management In The Whole Brand Life Cycle

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Brand Equity Our observation of McDonald’s Brand tell us that McDonalds as a Brand is in its growth stage whereas, in countries like America and West Europe it is on its way towards maturity. Following is the stage wise development and growth of McDonalds Brand.  1940’s (Introduction Stage) Despite being a time when there was a hamburger store or a food franchise on every corner in America’s cities, the business that Ray was so fascinated with had customers lining up to buy hamburgers, fries and milkshakes. McDonald brothers in their operation of business found that they had developed a crude but effective method of processing food in seconds. This fast food production, combined with low prices and a limited menu was a run away success.  1950’s (Development of McDonalds as a Brand) McDonald’s success was stage on an illusive dream, which Mr. Ray Kroc had. Despite being a time when there was a hamburger store or a food franchise on every corner in America's cities, the business that Ray was so fascinated with customers lining up to buy hamburgers, fries and milkshakes. This fast food production, combined with low prices and a limited menu could be duplicated across the country, and he wanted to be the one to do it. Mr. Ray Kroc felt that the operations of McDonalds could be replicated in every franchise. He began developing exact specifications for the ingredients so that the taste and cooking times would be consistent. He then went on to develop precise systems that could be documented to cover every aspect of how the business should be run from cooking a burger and serving a customer, to washing the floor and emptying the bins. Ray also knew that his systems needed to extend beyond the internal operations of the business, and into the external design of the buildings and how they were presented and maintained. This cloned and consistent style would maximise the value of the McDonalds brand through the buildings appearance. Ray was so committed to perfection, that he set up his own laboratory to develop the perfect fries. This was a revolutionary experience for the hamburger industry, and was not seen by many as being particularly necessary, including his business associates. This was the success in selling franchises (McDonald’s early establishment as a Brand)

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Brand Equity

 1960’s (The real growth of McDonald’s Brand took off from here) Ray Kroc bought all rights to the McDonald's concept from the McDonald's brothers for $2.7million in 1961.Ronald McDonald made his debut (used as an Advertising tool) in 1963 which saw a new image on McDonald’s brand building in the consumers mind in the form of a human element in the McDonalds brand, and provided an instant link with children. The rest as they say is history. There would be barely a man women or child in the developed world who has not tasted a McDonald’s product. Ray Kroc’s systems were so highly developed and repeatable that a customer could eat a McDonald’s product, regardless of which country they were in, and still experience the same taste and service in a restaurant that was identical to any other in the world. The growth of this brand has led to McDonalds becoming a global brand example of that is in 1996; McDonald’s overtook Coca-Cola as the best known brand in the world McDonalds has 48 percent of the globally branded quick service restaurants and 63 percent of sales.  List of acquisitions by McDonald’s that helped further growth in the market. • • • • • Owns Donatos Pizza with 148 outlets from Michigan to Georgia 23 units of coffee bars in London called Aroma Cafe™ Chipotle Mexican Grill, a fast growing chain of 56 burrito shops 859 Boston Markets Equity stake in food.com

Figures to support growth of McDonalds:
World Wide Restaurants: 2002 2000 U.S. 12,380 Europe 3,886 49 4,943 4,421 12,629 12,472 2001

Brand Equity Asia/Pacific 4,456 Latin America 1,091 Other 1,319 Total 24,818 23,132 26,806 1,790 1,465 1,789 1,405 5,655 5,055

Another proof of that is our Indian market, which has provided a good boost to McDonald’s advent into India.

 Future Growth:
The opportunities for McDonalds are truly global with a policy of continuous innovation of product and service spreading the enormous depth and breadth of the McDonalds brand, which is being well received around the world.

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Brand Equity

Brand Equity of McDonald’s
• • In terms of corporate valuations McDonalds is valued at approx. US$39 billion. In Marketing terms:

Brand Awareness
The American awareness of McDonalds as a brand is very high. Today McDonalds is a Global name, famous for its delicious burgers and mouth watering French fries. The customer’s awareness of the brand goes back to the earlier days when the McDonalds brothers had decided to start off with the restaurant. The consistent taste of the Mac meals is one of the reasons for uniformity in the product. Today the brand is well known for its affordability and high quality standards. Over the years the company has managed to live upto its image by providing prompt service unfailingly, constantly improving the standards of its burgers and providing entertainment to its target customers mainly children who are always in the lookout for a fun filled hour with Ronald McDonald the McDonald’s mascot. These critical improvements have helped the brand to be popular among the millions who visit the joint for a quick bite. One of the major recallers of the brand is the golden arch of the McDonalds logo. The red sign with the golden

M

is a symbol synonymous with burgers.

In a market like India, the brand is still in its infant stage. Launched in 1996, the company has done quite well for an initial beginning. Catering to a customer base which is used to eating the many delicacies offered by the Indian cuisine which is spicy unlike the McDonalds burgers, the company has definitely faced a few rejections from the consumer, but it was not long before the brand took over the hearts of the younger customers, mostly the average urban teenagers who found the place very happening and ideal for an evening with friends.

Perceived Quality
In a recent survey conducted by a leading agency, it was found that in India, although most of the McDonalds found the pricing of the product quite high, but the perceived quality of the products were rated as high as 4 or 5 out of a scale of 5. This shows that the company has been able to live upto its high quality standards set through operational excellence.

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Brand Equity

Brand Loyalty
From a recent survey it has been found that an average American has visited at least one of the many outlets in a city at least once in the last year. This can be directly related to the brand loyalty of the customer. An average McDonald’s consumer visits the store at least once a week.

CASE STUDY 2: COLGATE-PALMOLIVE (INDIA)

Colgate-Palmolive is the World Leader in Oral Care with operations in over 200 countries. Colgate – Palmolive (India) Limited is India's leading provider of scientifically proven oral care products with multiple benefits at various price points. The range includes toothpastes, toothpowder and toothbrushes under the "Colgate" brand, as well as a specialised range of dental therapies under the banner of Colgate Oral Pharmaceuticals. These have become an essential part of daily oral hygiene and therapeutic oral care in India. The Company also provides a range of personal care products under the "Palmolive" brand name. Being ranked as India's # 1 brand across all categories by the A&M-MODE annual survey of India's Top Brands, it is always trying to maintain its quality and aims at maximum customer satisfaction. Colgate people working around the world share a commitment to three core corporate values: Caring, Global Teamwork and continuous improvement Colgate has been rated the #1 brand across all categories in A&M's annual survey of India's Top Brands conducted by Taylor Nelson SofreshMODE. Powered by a rise in its brand 'POWER Score' from 53.91 in the last annual survey to 56.2 in 2001, Colgate has been ranked the country's #1 brand since the survey was introduced in 1992. Eight out of nine times COLGATE has emerged as India's Top Brand. The survey shows a very strong rural presence underlining the success of Colgate's distribution and marketing Program.

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Brand Equity

A Brief History Of Colgate
A Legend Is Born The Colgate Story: 1806: William Colgate, sets up a starch, soap and candle business in New York city. 1807: The company become Colgate 7 Smith with Francis Smith as partner 1813: The company name changed to William Colgate & Co. with brother Bowles Colgate as partner. 1857: The founder William Colgate dies and the company became Colgate & Co. 1937: Colgate Palmolive incorporated in India, launches Colgate Dental Cream and became the company dedicated to the oral health of the nation. A commitment rewarded with satisfaction, trust and goodwill of millions. Today Colgate is India’s most trusted brand. 1937: Colgate-Palmolive (India) Pvt. Ltd. Was incorporated in 1937. Introduced products that became market legends. 1937: Colgate Dental Cream was introduced. 1949: Colgate toothpowder and toothbrushes were launched. 1950: Palmolive shaving cream was launched. 1951: Halo shampoo was launched. 1952: Charmis cream was launched. 53

Brand Equity 1967: Manufacturing operations commenced at Sewri, Mumbai. 1972: Colgate introduced a truly refreshing product – Palmolive After Shave Lotion. 1976: Colgate launched the “Young India Program”… bright smiles become brighter. 1978: The Indian public was offered 60% equity in the company, with shares being listed on the Bombay Stock Exchange. Colgate Palmolive became a blue chip company on the Indian bourses. 1988: Colgate relocated its toothpowder plant to Waluj, Aurangabad. 1989: Colgate invests in a state-of-the-art manufacturing plant for fatty acids and soaps at the same location. Also, Palmolive Extra Care soap was launched. 1990: Colgate Gel was launched & brighter smiles followed. Also, Palmolive Shave Foam was introduced. 1992: Colgate was rated as India’s No. 1 brand across all categories. 1993: Colgate Total – the most technologically advanced toothpaste was launched. Colgate Palmolive USA reaffirms its commitment, by raising its equity from 40% to 51%. Colgate was once again rated India’s No. 1 brand. 1994: Colgate Calciguard was launched. Once again the Annual Board Power Survey ranked Colgate No. 1 across all categories for the 3rd succession year. 1995: Again No. 1 Brand for the 4th year. 1996: Colgate Oral Pharmaceutical products were launched in AsiaPacific region. This year, an ISO 9002 certification was awarded to Aurangabad fatty acid, toilet soap and toothpowder plants. Again ranked No.1 brand for 5th time. 1996: Colgate Palmolive entered a new category – household care, with the launch of Axion dishwashing paste. 1997: Colgate Calciguard & Colgate Plus toothbrushes became the first to receive the Indian Dental Association’s Seal of Acceptance. 54

Brand Equity 1998: Colgate ranked No.1 brand for the 6th time. 1999: Colgate was rated “India’s Premier Brand” by A&M Magazine’s annual survey of India’s Top Brands. This was a decade in which Colgate-Palmolive introduced the best of its products in India. The Indian consumer was offered top-of-the-line products.

Brand Loyalty
How did it win consumers?
The success lies in the satisfaction, trust and goodwill of their consumers. They believe, that they can best serve the needs of consumers through a consistent, fair and sensitive consumers communication program. For that reason, Colgate has established Consumer Affairs in 31 locations around the world - many of them with toll-free 800#s. The mission of Consumer Affairs representatives who answer these phones is to:  Listen and learn about consumers in a professional, consistent and caring manner that exceeds their expectations so that they experience satisfaction with their products, in all respects.  Bring consumer feedback to the decision-making process at Colgate to help improve existing products and develop new products that will meet consumer needs. The Consumer Affairs Department in India is staffed with professional representatives who are knowledgeable about Colgate-Palmolive products and welcome the opportunity to hear from

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Brand Equity consumers. To benefit the consumer they have in place a Toll-free number and helpline.

Environment
The protection of the environment and the health and safety of our customers, our people and the communities in which we live and operate is an integral part of Colgate-Palmolive's mission to become the best truly global consumer products company. We are committed to conducting ourselves in a socially responsible manner and to keeping our business operations environmentally sound. It is our worldwide policy to manufacture and market our products and operate our facilities so that we comply with or exceed applicable environmental rules and regulations. The health and safety of our customers, our employees, and the communities in which we operate must be paramount in all we do.

These

concerns

have been

translated

into

the following

guiding principles: Products Colgate-Palmolive will provide the public with safe and effective products and will strive to produce products that have the lowest practical Packaging To reduce the impact of our product packaging on the environment, we will work to improve the environmental compatibility of all our packaging materials. Colgate endorses the worldwide hierarchy of solid waste management: source reduction; recycling (including reuse); incineration; and landfilling. impact on the environment.

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Brand Equity

Facilities Colgate-Palmolive is committed to the health and safety of our employees and the communities in which we operate, as well as the protection of the environment. We will establish and maintain programs for the operation and design of our facilities that meet or exceed applicable environmental, health and safety laws and regulations. Business Colgate-Palmolive will consider environmental, health and safety issues in all significant business transactions, including acquisitions, divestitures, discontinuance of operations, and entry into joint ventures. We will also act in a responsible manner with respect to the environmental protection of the lands under our management and ownership.

Brand Equity
ATTRIBUTE A very generic brand. The word Colgate has taken place of the word toothpaste. Example: In Gujarat, people call Close-Up as Lal Colgate (red toothpaste) and they call Colgate Dental Cream as White Colgate (white toothpaste) BENEFITS

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Brand Equity You don’t have to search for any other toothpaste. VALUES The three core values of Caring, Global Teamwork and Continuous Improvement are put into action at work as well as in communities. The results are better products and a better quality of life throughout the Colgate world. CULTURE The Code of Conduct reinforces and enhances their corporate culture and addresses issues of law, ethics and fairness in all their daily business relationships. PERSONALITY Ranked 8 times as No. 1 Brand USER A 6 year young boy to 60 year old men in the family uses the brand. LOGO The face with a Colgate smile is the logo of the brand. The face is shown as the globe with a Colgate smile over it, this represents that the whole world should smile using Colgate. This indicates a personal feeling in the mind of the consumer and he is motivated to buy the product.

COLOUR Colgate has its logo colour combination of red, blue and white colours. They have not changed the colour combination from the beginning as these 3 colours have left a mark (impression) in the mind of the people.

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Brand Equity

Code Of Conduct
Colgate people around the world have built a reputation as a successful company with the highest ethical standards. Through living our values of Caring, Global Teamwork, and Continuous Improvement, and adhering to the highest principles of integrity, honor, and concern for the environment and others, they seek to:  Provide safe and quality products of value to consumers  Increase shareholder value  Offer opportunities for personal and professional growth to all Colgate people  Fulfill our corporate social responsibilities as a member of the global community

CASE STUDY 3: TATA MOTORS

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Brand Equity

Profile Of TATA Motors
Established in 1945, Tata Motors is India's largest and only fully integrated automobile company. Tata Motors began manufacturing commercial vehicles in 1954 with a 15-year collaboration agreement with Daimler Benz of Germany. Since 1969, the company's products have come out of its own design and development efforts. Today Tata Motors is India's largest commercial vehicle manufacturer with a 59-per cent market share and ranks among the top six manufacturers of medium and heavy commercial vehicles in the world.

Area of Business
Tata Motors' product range covers passenger cars, multi-utility vehicles and light, medium and heavy commercial vehicles for goods and passenger transport. Seven out of 10 medium and heavy commercial vehicles in India bear the trusted Tata mark.

Commercial vehicle business unit
The company has over 130 models of light, medium and heavy commercial vehicles ranging from two tonnes to 40 tonnes, buses ranging from 12-seaters to 60 seaters, tippers, special purpose vehicles, off-road vehicles and defence vehicles.

Passenger car business unit
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Brand Equity The company's passenger car range comprises the hatchback Indica and the Indigo sedan in petrol and diesel versions. The Tata Sumo, its rural variant, the Spacio and the Tata Safari (the country's first sports utility vehicle) are the company's multi-utility offerings. The Tata Indica, India's first indigenously designed and manufactured car, was launched by Tata Motors in 1999 as part of its ongoing effort towards giving India transport solutions that were designed for Indian conditions. Currently, the company's passenger cars and multi-utility vehicles have a 16-per cent market share. In addition to the growth opportunities in the buoyant domestic market, the company is pursuing growth through acquisitions (it acquired Daewoo Commercial Vehicles, Korea, in 2003) and alliances (it has entered into a tie-up with MG Rover, UK, to supply 1,00,000 Indica’s to be badged as City Rover) in other geographies.

Environmental Responsibility
Tata Motors has led the Indian automobile industry's anti-pollution efforts through a series of initiatives in effluence and emission control. The company introduced emission control engines in its vehicles in India before the norm was made statutory. All its products meet required emission standards in the relevant geographies. Modern effluent treatment facilities, soil and water conservation programmes and tree plantation drives on a large scale at its plant locations contribute to the protection of the environment and the creation of green belts.

Exports
Tata Motors' vehicles are exported to over 70 countries in Europe, Africa, South America, Middle East, Asia and Australia. The company

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Brand Equity also has assembly operations in Malaysia, Bangladesh, Kenya, South Africa and Egypt.

Brief History of Tata Motors
It has been a long and accelerated journey for Tata Motors, India's leading automobile manufacturer. Some significant milestones in the company's journey towards excellence and leadership are given below: 1945 – 1966 Tata Engineering and Locomotive Co. Ltd. was established to manufacture locomotives and other engineering products. Steam road roller introduced in collaboration with Marshall Sons (UK). Collaboration with Daimler Benz AG, West Germany, for manufacture of medium commercial vehicles. Research and Development Centre set up at Jamshedpur. Exports begin with the first truck being shipped to Ceylon, now Sri Lanka.. 1971 – 1989 Introduction of DI engines. First commercial vehicle manufactured in Pune. Manufacture of Heavy Commercial Vehicle commences. First hydraulic excavator produced with Hitachi collaboration. Production of first light commercial vehicle, Tata 407, indigenously designed, followed by Tata 608 &Tatamobile 206 - 3rd LCV model. 1991 – 1995 Launch of the 1st indigenous passenger car Tata Sierra. TAC 20 crane produced. One millionth vehicle rolled out. Launch of the Tata Estate.. Launch of Tata Sumo - the multi utility vehicle. Launch of LPT 709 - a full forward control, light commercial vehicle. Joint venture agreement signed with M/s Daimler - Benz / Mercedes - Benz for manufacture of Mercedes Benz passenger cars in India. Mercedes Benz car E220 launched. 1996 – 2004 Tata Sumo deluxe launched. Tata Sierra Turbo launched. Tata Safari India's first sports utility vehicle launched. Indica, India's first fully indigenous passenger car launched. 115,000 bookings for Indica registered against full payment within a week. Commercial production of Indica commences in full swing. Launch of CNG buses.Indica V2 launched - 2nd generation Indica. 100,000th Indica wheeled out. Launch of CNG Indica. Launch of the Tata Safari EX Indica V2 becomes India's number one car in its segment. Exits joint venture with Daimler Chrysler. Unveiling of the Tata Sedan at Auto Expo 2002. Launch of the

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Brand Equity Tata Indigo. Tata Engineering signed a product agreement with MG Rover of the UK. Launch of the Tata Safari Limited Edition. The Tata Indigo Station Wagon unveiled at the Geneva Motor Show. On 29th July, J. R. D. Tata's birth anniversary, Tata Engineering becomes Tata Motors Limited. Tata Motors unveils new product range at Auto Expo '04.Tata Motors and Daewoo Commercial Vehicle Co. Ltd. sign investment agreement. Indigo Advent unveiled at Geneva Motor Show. Tata Motors completes acquisition of Daewoo Commercial Vehicle Company. Sumo Victa launched. Indigo Marina launched. Tata Motors lists on the NYSE.

Leveraging the Tata brand
The Tata Finance controversy notwithstanding, Tata Sons is making a concerted attempt to shift focus from a commodity-oriented conglomerate to a brand-oriented corporate group. It is an image that has stuck to the Tata Sons conglomerate all these years. But now the image is in for a makeover. Put differently, the winds of change are blowing within the organisation's formidable corridors. The corporate's portfolio is changing from 40-50 per cent commodity orientation to an equal percentage of brand orientation. The ambitious branding exercise being undertaken by the Tata Sons group would include primarily steel, salt and trucks. The perception of Tata Chemicals, for example, is hardly that of a marketing company. But Tata Salt, marketed by Tata Chemicals, ranks upfront as a leading FMCG brand in most consumer surveys, besides, of course, being the market leader among branded salts. The marketing makeover exercise is on in full swing. The moment of reckoning for Brand Tata may have just arrived. About four years back, some amount of the Tata brand value was estimated at Rs 3,800 crore. The company has extrapolated that to arrive at the Rs 10,000 crore figure - and that a couple of years back.

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Brand Equity

Consumer perception
Tata’s set to unleash global branding drive The $11.2 billion Tata Group is planning to unleash a major global branding initiative. Tata Sons, the group has selected some key foreign markets to introduce a brand building drive to give effect to the group’s vision of becoming a major global brand. Tata Motors has forayed into the UK markets, TCS has a presence in US and south-east Asian countries. The Tata group has fared well on the twin brand values of ‘emotionality and relevance.’ The perception that Tata group companies are not as aggressive as competitors is gradually changing. It is now also perceived as a more youthful brand, despite being a 100-year old brand. Tata Motors is known as a low-cost manufacturer, not necessarily a high-quality one. The company is looking to provide value for money— or more car per car. In fact, Indica has never been rated highly by JD Power, which conducts consumer-based surveys. In its latest 'initial quality study' in December '03, Indica was placed fifth, second from the bottom, among the premium compact cars with 237 problems per 100 vehicles. Wagon R topped the list with 118. A caveat though: this survey takes into account actual problems as well as perceptions. Another indicator: for the UK market, the City Rover has been spruced up quite a bit. Apart from cosmetic changes like a new bumper and grille, it has different engine diagnostics and comes with airbags and anti-lock brakes. In

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Brand Equity addition, the City Rovers are petrol-driven, unlike the diesel models that form an overwhelming share of Tata Motors' India sales. But even the diesel models of Tata Motors are in for fresh competition. Hyundai has launched the diesel version of Accent, which it claims is superior as it has the latest microprocessors-based common rail direct injection (CRDi) technology that supposedly increases fuel efficiency and reduces pollution. It also plans to have diesel options for its forthcoming compact model, Getz, as well as Santro. Maruti, which imports the engines for its diesel Zen and therefore doesn't find it viable to make more than 500-900 vehicles a month, is also thinking of tying up with a global manufacturer for diesel technology.

Revitalizing Brand Tata
The Tata group has launched a deliberate and comprehensive effort to re-energise its 124-year-old brand equity, and to connect with youth. Catalyst takes a look at how this is being done. For the Rs 49,000-crore Tata group, Tata Open tournament T2 held at Chennai which is sponsored by the TATA is just one visible face of a deliberate and comprehensive effort to re-energise the 124-year-old Tata brand. With 80 group companies and its share of controversy and failures in recent years, the group is still among the most respected and trusted brands in the country. But it is only recently the group began a concerted effort to protect and enhance its brand, which it acknowledges as its "most important asset," and which was valued at over Rs 10,000 crore four years ago. "The Tata brand represents assurance, reliability, a sense of nationalism (and) value for money, irrespective of the product whether it is a wrist watch, tea, salt, a piece of software or a car," said R. Gopalakrishnan, Executive Director, Tata Sons Ltd. "When you have an asset that size, you have to ensure that whatever you do enhances the asset's value, and also make it more relevant and contemporary on a continuous basis," adds Romit Chaterjee, Vice-President - Corporate Affairs, Tata Services. In recent years, the group has designed a common logo, centralised its media buying and PR operations, devised a system for group companies to pay a fee for using the Tata name, and has aligned itself

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Brand Equity with vehicles that contemporarise the brand and connect with the youth. The group has committed Rs 300 crore over the next five years to target the younger demographic. Towards this end, the Brand Equity Business Promotion Fund was created about four years ago; a Tata-name company, like Tata Steel, pays 2.5 per cent of its revenues to the fund, and a non-Tata name company, like Voltas, pays 0.01 per cent. The money is used to consistently enhance the brand image. The group also undertook extensive research a few years ago; every six months, a brand track study, by Pathfinders, tracks brand perception vis-à-vis five other major corporate brands, among 5,000 respondents in 13 cities. The study plots the Tata brand against the others on two metrics, affinity (how close the brand is to the consumer, and how warmly it is perceived) and relevance (how relevant the brand is to the consumer's life). On both parameters, the Tata brand has risen steadily in value since December 2000, when the study was first commissioned, and continues to be ahead of the other brands. Two of the primary findings of the research were that the Tata brand is not perceived as youthful, and that it is not into technology in a big way. So there is a concerted effort to connect with the youth, and to communicate its involvement with technology. According to TATA’s young people are the "consumers, stakeholders and employees of tomorrow," and to connect with them, the group uses contemporary media such as the Internet and SMS, and events and personalities.Its stake in the Barista chain, for example, provides a popular venue to connect with the desired demographic, and the group has done interactive sessions with ace driver Narain Karthikeyan, a brand endorser, at sports bars and pubs in some cities. Their research indicated that the three most effective vehicles to reach the youth are movies, music and entertainment, and sports. Movies were ruled out - although Marg, a Tata group company makes documentary films - but the group has associated with select music and entertainment events: it has sponsored a Shakti concert and one dedicated to Bob Dylan, and considers them big successes. The group also signed a three-year title sponsorship deal for India's only ATP tournament, beginning 2002.It also signed on India's F-1 aspirant, Karthikeyan, to endorse some of its brands, including Titan's Fastrack. The $400,000 Tata Open provides a platform for a host of Tata products and services, including Titan, the Taj group of hotels, Tata Indicom and Trent's Westside.They are trying to exemplify the 66

Brand Equity `Tata One World' concept more and more, so any marketing activity is thus an integrated effort. A combination of Tata and MTV is undertaken in order to make themselves relevant to the younger generation.The two have a deal to do some programmes on the Tata Open tournament. In tennis and motor racing, the group has found very strong personality matches according to TATA. Formula Motor racing is about speed, energy, aggression, and fighting against tough international competition; tennis, too, is about speed, dynamism, aggression, and slugging it out against international competition in the tournament. Another focus is B-school campuses, where the group is emphasising greater interactivity with students, and raising its profile as an employer. It sponsors the annual inter-collegiate event, Confluence, in IIM-A, and the Business Leadership Award; its senior managers also go on lecture tours and present case studies of group companies as this is where they are going to get our future employees thus ensuring the Tatas are in the consideration set, along with the consultancy firms and foreign banks. In ORG-MARG's recent `Campustrack' survey of most preferred employers on B-school campuses, Hindustan Lever, Infosys and McKinsey headed the list of 48 corporates; Titan, Tata Engineering and Tata Steel were among the companies at the other end. However the Campus Recruiter Index for the Tata group has improved since the last time, particularly for TCS, Tata Administrative Services and Tata Engineering, according to ORG-MARG. The Tata group was rated highly on the parameters of "good standing in the market" and "large-sized company," and found to lag in the aspects of compensation/salary package, and international postings and overseas travel. "By all accounts, the image of a youthful, techie corporate seems to belong to TCS and, to some extent, to Tata Administrative Services. There is still some way to go before we can say this about the group as a whole," says ORG-MARG. Internally, too, there has been a concerted effort to create a sense of synergy and belonging among the group companies. On the group's Intranet, there are forums for secretaries, HR managers, CFOs and others to share knowledge and best practices across companies and regions. The flip side of the coming together of the companies is that a negative fallout, like the Tata Finance debacle, can impact the image of the other group companies.

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Brand Equity On the communications front, the group has integrated its activities: Media Edge is the group's AOR for media buying, and Vaishnavi Communications handles PR for the largest group companies. Brand experts say the Tata group is on the right track: today, the brand stands for trust and integrity, optimism and a dogged spirit to move ahead. Although the group has been seen as an ageing patriarch, or a fuddyduddy one But, with its increasing consumer focus, its realisation of the value of the Tata brand name, and its new product and service initiatives, there is "a sea-change from the `we also make steel' days: this is the new energy that is driving the group forward. Indeed, the company's Web site informs: "The Tata name is a unique asset representing leadership with trust. Leveraging this asset to enhance group synergy and becoming globally competitive is the route to sustained growth and long-term success."

Bibliography
While working on this project I visited some of the companies and they gave me some information. However to support the same I have done some of the research work from the following: Text Books:

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Brand Equity    Managing Brand Equity – David A Aaker Strategic Brand Management- by Jean-Noel Kapferer Brand Equity & Advertising - edited by David A. Aaker, Alexander L. Biel Newspapers and Magazines. Times of India Supplement – Brand Equity    Economics Times Business Standard Brand Equity ( magazine )



Various websites were also visited such as, • • • • • • • www.brand-equity.com www.businessweek.com/innovate/brandequity/ www.netmba.com/marketing/brand/equity/ www.ibef.org www.economictimes.indiatimes.com www.biz-community.com www.biz360.com

Also visited websites of McDonald’s, Colgate – Palmolive & Tata for case study research.

Acknowledgements
Working on the project on Brand Equity has been an incredible experience for me. For this very wonderful experience i would like to thank a lot of people without whose co-

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Brand Equity operation and support working on this marketing project would not have been so pleasurable and interesting.

Firstly, I would sincerely like to thank Mr.J.Venuraj General Manager - Marketing of ASKRaymond James, for taking out some of his valuable time from his busy schedule to answer my queries regarding the project.He was extremely supportive and patient. Thus, he was a great help and enlightened me due to his depth of knowledge on the topic and goldmine of information.

And last but not least our Head Co-ordinator of BMS in our college Prof. Gehna Hingorani for her guidance and help in this field whenever required. If it was not for their encouragement and support, this project would never have been possible and I would have been deprived of a vast treasure of knowledge.

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