Chapter -1

1-What is Brand?

A brand is a name, term, sign, symbol or a combination oI them intended to identiIy the goods
and services oI one seller or group oI sellers and to diIIerentiate them Irom those oI competition.
For example, Coke, Nestle and MicrosoIt are well renowned brands. In technical speaking
whenever a marketer creates a name logo symbol he or she has created a brand.

2-Why do Brands matters?

Brands really matter Ior both consumer and manuIacturer.

From consumer`s point of view


IdentiIication oI source oI product
Assignment oI responsibility to product maker
#isk reducer
$earch cost reducer
!romise, bond, or pact with maker oI product
$ymbolic device
$ignal oI quality


Brands identiIy the source or maker oI a product and allow consumers to assign
responsibility to a particular manuIacturer. From an economic perspective, brands allow
consumers to lower search costs Ior products both internally and externally.

Consumers oIIer their trust and loyalty with the implicit understanding that the brand will
behave in certain ways and provide them utility through consistent product perIormance
and appropriate pricing, promotion, and distribution programs and actions. Brands can
serve as symbolic devices, allowing consumers to project their selI-image.


Certain brads are associated with being used by certain types oI people and thus reIlect
diIIerent values or traits. #esearched have classiIied products and their associated
attributes into three major categories: search goods, experience goods and credence
goods. There is diIIiculty in assessing and interpreting product attributes and beneIits so
with experience and credence goods, brands maybe particularly important signals oI
quality. Brands can reduce the risk in product decisions. These risks involve Iunctional,
physical, Iinancial, social psychological and time risk.
From manufacturer`s point of view:

Means oI identiIication to simpliIy handling
Means oI legally protecting unique Ieatures
$ignal oI quality level to satisIied customers
Means oI endowing products with unique associations
$ource oI competitive advantage
$ource oI Iinancial returns
Brands help manuIacturers to organize inventory and accounting records. A brand also oIIers
the Iirm legal protection Ior unique Ieatures oI the product. A brand can retain intellectual
property rights, giving legal title to the brand owner. Brands can signal a certain level oI quality
so that satisIied buyers can easily choose the product again. This brand loyalty provides
predictability and security oI demand Ior the Iirm and creates barriers oI entry that make it
diIIicult Ior other Iirms to enter the market. The annual list oI the world`s most valuable
brands, published by Interbrand andBusiness Week, indicates that the market value oI
companies oIten consists largely oI brand equity. #esearch by McKinsey & Company, a global
consulting Iirm, in 2000 suggested that strong, well-leveraged brands produce higher returns to
shareholders than weaker, narrower brands. Taken together, this means that brands seriously
impact shareholder value, which ultimately makes branding a CEO responsibility Companies
sometimes want to reduce the number oI brands that they market. This process is known as
"Brand rationalization." $ome companies tend to create more brands and product variations
within a brand than economies oI scale would indicate. $ometimes, they will create a speciIic
service or product brand Ior each market that they target. In the case oI product branding, this
may be to gain retail shelI space (and reduce the amount oI shelI space allocated to competing
brands). A company may decide to rationalize their portIolio oI brands Irom time to time to
gain production and marketing eIIiciency, or to rationalize a brand portIolio as part oI corporate
restructuring.
3-What are the strongest Brands
A list oI top twenty strongest brands is as Iollows
2005Brand#ank Brand Name Country oI ownership 2005 Brand Value ($million)
1 Coca-Cola U.$ 67,525 2 MicrosoIt U.$ 59,941 3 IBM U.$ 53,376 4
GE U.$ 46,996 5 Intel U.$ 35,588 6 Nokia Finland 26,452 7 Disney
U.$ 26,441 8 Mc Donald U.$ 26,014 9 Toyota Japan 24,837 10
Marlboro U.$ 21,189 11 Mercedes-Benz Germany 20,006 12 Citi
U.$ 19,967 13 Hewlett !ackard U.$ 18,866 14
American Express U.$ 18,559 15 Gillette U.$ 17,534 16 BMW
Germany 17,126 17 Cisco U.$ 16,592 18 Louis Vuitton
France 16,077 19 Honda Japan 15,788 20 $amsung $.
Korea 14,956



Chapter 2
ustomer Based Brand Equity
Customer based brand equity model is that the power oI a brand lies in what customers have
learned, Ielt, seen, and heard about the brand as a result oI their experience over time.
Customer-based brand equity is deIined as the diIIerential eIIect that brand knowledge has on
consumer response to the marketing oI that brand. There are three key ingredients oI this
deIinition: (1) 'diIIerential eIIect,(2) 'brand knowledge, (3) 'consumer response to
marketing.
Brand Equity as a Bridge
The power oI a brand lies in the minds oI consumers and what they have experienced and
learned about the brand over time. Consumer knowledge drives the diIIerences that maniIest
themselves in terms oI brand equity. This realization has important managerial implications.
According to this view, brand equity provides marketers with a vital strategic bridge Irom their
past to their Iuture. Brand equity can provide marketers with a means to interpret their past
marketing perIormance and design their Iuture marketing programs.
Building a strong Brand
There are Iour steps oI building a strong brand. These are as Iollows:
1. Ensure identiIication oI the brand with customers and as association oI the brand in
customers` minds with a speciIic product class or customer need.
2. Firmly establish the totality oI brand meaning in the minds oI customers by strategically
linking a host oI tangible and intangible brand associations with certain properties.
3. Elicit the proper customer responses to this brand identiIication and brand meaning.
4. Convert brand response to create an intense, active loyalty relationship between customers
and the brand.
These steps represent Iundamental questions that customers can ask about brands as Iollow:
1. Who are you? (Brand identity)
2. What are you? (Brand meaning)
3. What about you? (Brand responses)
4. What about you and me? (Brand relationship)
Brand Building Blocks
To provide some structure, it is useIul to think oI sequentially establishing six brand building
blocks with customers. These brand building blocks can be assembled in terms oI a brand
pyramid. Each brand building block will be examined in the Iollowing section.
Brand Salience
Achieving the right brand identity involves creating brand salience with customers. It relates to
the aspects oI the awareness oI the brand, Ior example how oIten and easily the brand is evoked
under various situations? Brand awareness reIers to customers` ability to recall and recognize
the brand, as reIlected by their ability to identiIy the brand under diIIerent conditions.
Brand Performance
Designing and delivering a product that Iully satisIies consumer needs and wants is a
prerequisite Ior successIul marketing. To create brand loyalty and resonance consumer
experience with the product must at least meet. Brand perIormance relates to the ways in which
the product or service attempts to meet customers more Iunctional needs. Customers can view
the perIormance oI products or services in a broad manner. #eliability reIers to the consistency
oI perIormance over time and Irom purchase to purchase. Durability reIers to the expected
economic liIe oI the product. $erviceability reIers to the ease oI servicing the product.
!erIormance may also depend on sensory aspects such as how a product looks and Ieels.
Brand Imagery
Brand imagery deals with the extrinsic properties oI the product including the ways in which
the brand attempt to meet customer psychological needs. Brand imagery is how people think
about a brand abstractly rather than what they think the brand actually does. Thus imagery
reIers to more intangible aspects oI the brand.
Brand 1udgments
Brand judgments Iocus on customers` personal opinions and evaluation with regard to the
brand. To create a strong brand Iour types oI brand judgments summary are particular
important: Quality, Credibility, Consideration and $uperiority.
Brand Feelings
Brand Ieelings are customers` emotional responses and reaction with respect to brand. Brand
Ieelings also relate to the social currency evoked by the brand. The Iollowing are six important
types oI brand-building Ieelings1. Warmth: The brand makes consumers Ieel a sense oI calm.2.
Fun: The brand makes consumers Ieel amused, playIul, and cheerIul and so on.3. Excitement:
The brand makes consumers Ieel energetic and Ieel that they are experiencing with something
special.4. $ecurity: The brand produces a Ieeling oI saIety.5. $elI-respect: The brand makes
consumers Ieel better about themselves.6. $ocial approval: The brand results in consumers
having positive Ieeling about the reactions oI others.
Brand #esonance
Brand resonance reIers to the nature oI the relationship and the extent to which customers Ieel
that they are 'in sync with the brand. Brand resonance can be broken down into Iour categories
Behavioral Loyalty
Attitudinal Attachment
$ense oI Community
Active Engagement

The Iist dimension is behavioral loyalty in terms oI repeat purchase. How oIten do customers
purchase a brand and how much do they purchase? Behavioral loyalty is necessary but not
suIIicient Ior resonance to occur. To create resonance, there are also needs to be a strong
personal attachment. Customers should go beyond having a positive attitude to viewing the brand
as being something special. Creating greater loyalty requires deeper attitudinal attachment,
which can be generated by developing marketing programs and products and services that Iully
satisIy consumer needs. IdentiIication with a brand community may reIlect an important social
phenomenon whereby customers Ieel aIIiliation with other people associated with the brand.
$trong attitudinal attachment or social identity or both are typically necessary, however, Ior
active engagement with the brand to occur.


























Chapter-3

Identifying and Establishing Brand Positioning

Brand positioning is deIined as the 'act oI designing the company`s oIIer and image so that it
occupies a distinct and valued place in the target customer`s minds. !ositioning is all about
identiIying the optimal location oI a brand and its competitors in the minds oI consumers to
maximize potential beneIit to the Iirm. According to customer based brand equity model,
deciding on a positioning requires determining a Irame oI reIerence by identiIying the target
market and the nature oI competition and the ideal points-oI-parity and points-oI-diIIerence
brand association.

Target Market

A market is the set oI all actual and potential buyers who have suIIicient motivation, ability and
opportunity to buy a product. Market segmentation involves dividing the market into distinct
groups oI homogeneous consumers who have similar needs and consumer behavior and thus
require similar market mixes. All companies never target all oI its segments. There is a criterion
under which segments are targeted.
IdentiIiably: Can segment identiIication be easily determined?
$ize: Is there adequate sales potential in the segment?
Accessibility: Are specialized distribution outlets and communication media available to
reach the segment?
#esponsiveness: How Iavorably will the segment respond to a tailored marketing
program?

From manuIacturer perspective the model segments users oI a brand is divided into Iour groups
based on strength oI commitment Irom low to high, as Iollows:
1. Convertible: High likely to switch brands
2. $hallow: Not ready to switch, but may be considering alternatives
3. Average: ComIortable with their choice; unlikely to switch in the Iuture
4. Entrenched: Highly loyal; unlikely to change in the Ioreseeable Iuture

From customer perspective the model also classiIies nonusers oI a brand into Iour groups based
on their openness to trying the brand Irom low to high, as Iollows:

1.$trongly unavailable: $trongly preIer their current brand

2.Weakly unavailable: !reIerence lies with their current brand, although not strongly

3.Ambivalent: As attracted to the other brand as to their current choice

4.Available: !reIer the other brand but have not yet switched



Points of Parity

!oints oI parity are those associations that consumers view as being necessary to be a legitimate
and credible oIIering within a certain product category. A point oI parity is easier to achieve than
points oI diIIerence. For example there is a minimal diIIerence between $urI excel and Ariel
washing powder.

Points of Difference

!oints oI diIIerence are attributes that consumers strongly associate with a brand positively
evaluate, and believe that they could not Iind to the same extent with a competitive brand. For
example when Telenor launch Iirst time easy load it created points oI diIIerence at that time.
!oints oI diIIerence may involve perIormance attributes. Many top brands attempt to create a
point oI diIIerence on overall superior quality.


DeIining and Establishing Brand Values


ore Brand Values

Core brand values are those set oI attributes that characterize the Iive to ten most important
aspects oI a brand. Core brand values can serve as the basis oI brand positioning in terms oI how
they relate to points oI parity and points oI diIIerence. Core brand values can be identiIied
through structured process. The Iirst step is to create a detailed mental map oI the brand. A
mental map accurately portrays in detail all salient brand associations and responses Ior a
particular target market. Mental maps must reIlect the reality oI how the brand is actually
perceived by consumers in terms oI their belieIs, attitudes, opinions, Ieelings, images and
experiences.

Brand Mantras

A brand mantra is highly related to handing concepts such as brand essence used by others. A
brand mantra is an articulation oI the heart and soul oI the brand. Their purpose is to ensure that
all employees within the organization and all external marketing partners understand what the
brand most Iundamentally is to represent with consumers so that they can adjust their actions
accordingly. Brand mantras are powerIul devices. They can provide guidance what ad campaigns
to run, where and how the brand should be sold and so on. Brand mantras can be broken down
into three terms brand Iunctions, descriptive modiIier and emotional modiIier. The brand
Iunctions describe the nature oI the product. The descriptive modiIier is a way to circumscribe
the business Iunctions term to Iurther clariIy its nature. Finally emotional modiIier provides
another qualiIier in terms oI how the brand delivers these beneIits. For example Nike
brand Iunction is perIormance, descriptive modiIier is athletic and emotional modiIier is
authentic.










Chapter No. 4

riteria for hoosing Brand Elements

There are six criteria in choosing brand elements which are as Iollows:
Memorability
MeaningIulness
Likeability
TransIerability
Adaptability
!rotect ability

Memorability

A necessary condition Ior building brand equity is achieving a high level oI brand awareness.
There are certain names, symbols, logos and visual properties that make a brand more attention
getting and easy to remember and thus contribute to brand equity. In other words brand name
should be such which is easily recalled and recognized.

Meaningfulness

Brand elements can also be chosen whose inherent meaning enhances the Iormation oI brand
associations. Two particularly important dimension oI the meaning oI a brand element are the
extent to which it conveys the Iollowing: General inIormation about the nature oI the product
category In terms oI descriptive meaning, to what extent does the brand element suggest
something about the product category? $peciIic inIormation about particular attributes and
beneIits oI the brand in terms oI persuasive meaning, to what extent does the brand element
suggest something about the products

Likeability

Brand elements can be chosen that are rich in visual and verbal imagery and inherently Iun and
interesting. In terms oI Iirst three criteria, a memorable, meaningIul, and likable set oI brand
elements oIIers many advantages. Because consumers oIten do not examine much inIormation in
making product decisions, it is oIten desirable that brand elements be easily recognized and
recalled and inherently descriptive and persuasive.
Transferability

It is the Iourth general criterion concerns the transIerability oI the brand element in both a
product category and geographic sense. First, to what extent can the brand element ad to the
brand equity oI new products sharing the brand elements introduced either within the product
class. $econd to what extent does the brand element add to brand equity across geographic
boundaries and market segments.

Adaptability

It is the IiIth general criterion concerns the adaptability oI the brand element. Due to changes in
customer values and opinions brand elements oIten must be updated over time. The more
adaptable and Ilexible the brand element, the easier it is to update it.

Protect ability
The Iinal criterion concerns the !rotect ability oI the brand element both in legal and competitive
sense. Because suspicious persons ask sometimes detail about the product beIore purchase. $o
manuIacturers must legally protect their products by registered their patents.

Five B`s from the ustomer Perspective:

1.Basic:There are some basic things which are required by customers.
2.Background:Customers have background when they are going to purchase.
3.Beauty:!ackaging should be such that attract customers.
4.BelieI:Customer should be belieI on the brand.
5.BeneIit:Customers purchase those things which give them beneIit.

Five B`s from Brand Manager Perspective:
1.Brave:He should be bold in respect oI taking initiatives.
2.Brilliant:He should be adept in designing better brand strategies.
3.Backing:Company should support him in sensitive situations.
4.Bridge:He is a person that creates a link between customers and company and works as a
bridge.
5.BeneIicial:He should provide beneIit to his company in which he is working.

Options and Tactics for Brand Elements

A good brand name should
Be protected (or at least protect able) under trademark law
Be easy to pronounce
Be easy to remember
Be easy to recognize
Be easy to translate into all languages in the markets where the brand will be used
Attract attention
$uggest product beneIits (e.g.: Easy-OII) or suggest usage (note the tradeoII with strong
trademark protection)
$uggest the company or product image
Distinguish the product's positioning relative to the competition.
Be super attractive
$tand out among a group oI other brands like that one compared to the others




Brand Names

The brand name is Iundamentally very much important. It can be a key to success in the market.
$ometimes brand name becomes so closely tied to the product in the minds oI the consumers,
however, it is very much diIIicult that brand element Ior marketers to subsequently change.
Consequently brand names are oIten systematically researched beIore being chosen

Brand Awareness

Brand awareness improved the extent to which brand names are chosen that are simple and easy
to pronounce. To enhance brand recall, it is desirable Ior the brand name to be simple and easy to
pronounce. !ronunciation also aIIects the willingness oI consumers to order the brand orally.
Ideally, the brand name should have a clear, understandable and unambiguous pronunciation and
meaning. The way a brand is pronounced can aIIect its meaning.
Brand Association


It is necessary Ior the brand to have broader meaning to consumers than just the product category
it is in. Because the brand name is a compact Iorm oI communication, the explicit and implicit
meaning that consumers extract Irom the name can be critical. The brand name may be chosen to
reinIorce an important attribute or beneIit association that makes up its product positioning. For
example Johnson & Johnson baby shampoo was also able to transport its 'gentleness
'association to a more adult audience when they were Iorced to reposition in the1970s when the
birth rate declined.


URLs


U#L stands Ior universal resource locator. It is also commonly reIerred to as domain names.
U#L must register and pay Ior the name with a service such as#egister.com. The major issue
today Iacing most oI the companies with regard to U#Ls is protection oI their brands Irom
unauthorized use in domain names. For example Nike not approve oI its name appearing in the
U#L oI a Iictitious Ian site
www.nikerules.com
.
Logos and Symbols


There are many types oI logos ranging Irom corporate names written in a distinctive Iorm. For
example the strong word marks include Coca-Cola, Dunhill,and Kit-Kat. There are some abstract
logos which may be completely unrelated to the word mark. These are called non-word mark
logos. The non-word marks logos are also oIten called symbols. $ome logos are literal
representations oI the brand name, enhancing brand awareness such as Apple logos and
American #ed Cross.
haracters

Brand characters typically are introduced through advertising and can play a central role in these
and subsequent ad campaigns. Brand characters come in many diIIerent Iorms. $ome brand
characters are animated where as others are live-action Iigures. Consequently brand characters
can be quite useIul Ior creating brand awareness. Characters oIten must be updated over time so
that their image and personality remains relevant to the target market.
Slogans

$logans are short phrases that communicate descriptive inIormation about the brand. $logans
oIten appear in advertising but can play an important role on packaging and in other aspects oI
the marketing programs. $logans can play oII the brand name in a way to build both awareness
and image. $ome slogans become so strongly linked to the brand that it becomes diIIicult to
subsequently introduce new ones. For example the slogan oI
Haleeb milk is 'the thickest milk.






























hapter 5

Product Strategy

The product itselI is at the heart oI brand equity because it is the primary inIluence on what
consumers experience with a brand, what they hear about brand Irom others, and what the Iirms
can tell customers about the brand in their communications. To create brand loyalty, consumers`
experiences with the product must at least meet once. !erceived quality has been deIined as
customers` perception oI the overall quality oI a product to relevant alternatives and with respect
to its intended purpose. There are some general dimensions oI product quality which are as
Iollows:
!erIormance: Levels at which the primary characteristics oI the product operate.
Features: $econdary elements oI a product that complement the primary characteristics.
ConIormance quality: Degree to which the product meets speciIications and is absent oI
deIects.
#eliability: Consistency oI perIormance over time and Irom purchase to purchase.
Durability: Expected economic liIe oI the product
$erviceability: Ease oI servicing the product
$tyle and design: Appearance or Ieel oI quality

Total quality management reIlecting the importance oI product quality. In total quality
management all employees oI the organization work in coordination in order to improve the
quality oI both the organization and the product.

Total Quality Management Tenets

1. Quality must be perceived by customers.
2. Quality must be reIlected in every company activity.
3. Quality requires total employee commitment.
4. Quality requires high quality partners.
5. Quality improvement sometimes requires quantum leaps.
6. Quality does not always does not always cost more.
7. Quality is necessary but may not be suIIicient.
8. A quality drive cannot save a poor product.

Relationship Marketing

#elationship marketing attempts to provide a more holistic, personalized brand experience to
create stronger consumer ties. #elationship marketing is based on the premise that current
customers are the key to long term brand success. The importance oI customer retention can be
seen by some oI the beneIits it provides:


Acquire new customers can cost Iive times more than the costs involved in satisIying and
retaining current customers.
The average company loses ten percent oI its customers each year.
A Iive percent reduction in the customer deIection rate can increase proIits by twenty Iive
percent to eighty Iive percent, depending on the industry.
The customer proIit rate tends to increase over the liIe oI the retained customer.


Loyalty Programs

Loyalty programs have become one popular means by which marketers can create stronger ties
to customers. There are some tips Ior building eIIective loyalty programs Iollow:
Know your audience
Change is good
Listen to your best customers
Engage people

Pricing Strategy
The pricing strategy can dictate how consumers categorize the price oI the brand and how Iirm
set that price. Consumers may inIer the quality oI a product on the basis oI its price. Many
marketers have adopted value-based pricing strategies attempting to sell the right product at the
right price to better meet consumer wishes. From a branding perspective, it is important to
understand all price perceptions that consumers have Ior a brand.

Setting Prices to Build Brand Equity

There are many diIIerent approaches to setting prices that depend on a number oI considerations.
Many Iirms now are employing a value-pricing approach to set prices and an everyday-low
pricing approach to determine their discount pricing policy over time.

Value Pricing

The objective oI value pricing is to uncover the right blend oI product quality, product costs, and
product prices that Iully satisIies the needs and wants oI consumers and the proIit targets oI the
Iirm. $everal Iirms have been successIully by adopting a value-pricing strategy. For instance,
Wal-Mart`s slogan 'we sell Ior less describes the pricing strategy that has allowed them to
become the world`s largest retailer. In general, an eIIective value-pricing strategy should strike
the proper balance among the Iollowing:

!roduct design and delivery
!roduct costs
!roduct prices

Product Design and Delivery

The Iirst key is the proper design and delivery oI the product. !roduct value can be enhanced
through many types oI well-conceived and executed marketing programs. The value pricing
point out that the concept does not mean selling the product at lower prices. Consumers are
willing to pay premium when they perceive added value in products and services. $ome
companies actually have been able to increase prices in some cases by introducing new products.
For instance when Gillette introduced the Mach III, it priced the cartridges at a IiIty percent
premium over its then-priciest blade, despite the prevailing deIlationary climate. The price
increase did not deter customers, and Gillette reached its highest market share, seventy one
percent in 1962.


Product osts

The secondary key to a successIul value-pricing strategy is to lower costs as much as possible.
Meeting cost targets invariably requires additional cost savings through productivity gains,
outsourcing, material substitution, product reIormulations, process changes and so on. For
example, by investing in eIIicient manuIacturing technology, $ara Lee was able to maintain
adequate margins Ior years on its L` eggs women`s hosiery with minimal price increases. The
combination oI low prices and the strong L`eggs brand image resulted in an almost IiIty percent
market share. At the same time, cost reductions cannot sacriIice quality.

Product Prices

The price suggested by estimating perceived value can oIten be used as a starting point in
determining actual marketplace prices, adjusting by cost and competitive considerations as
necessary. For example, General Motor`s Cadillac division has used target pricing to arrive at the
price oI its luxury cars. GM marketers determined the optimal price based on assumptions about
the consumer and then Iigured out how to make the car at the right cost to ensure the necessary
proIit.

hannel Strategy


The manner by which a product is sold can have a proIound impact on the resulting equity and
ultimate sales success oI a brand. Marketing channels are sets oI interdependent organizations
involved in the process oI making a product or service available Ior use.
Channel Design
A number oI possible channel types and arrangements exist. Broadly, they can be classiIied into
direct and indirect channels. Direct channels involve selling through personal contacts Irom the
company to prospective customers by mail, phone, electronic means, in-person visits, and so
Iorth. Indirect channels involve selling through third party intermediaries such as agents,
wholesalers and retailers.

Indirect hannels

Indirect channels consist oI a number oI diIIerent types oI intermediaries. #etailers tend to have
the most visible and direct contact with customers and thereIore have the greatest opportunity to
aIIect brand equity.
Push and Pull Strategies

When manuIacturers regain some oI their lost power by creating strong brand through some oI
the brand building tactics, Ior example, by selling innovative and unique products at properly
priced and advertised that consumers demand Ior it. In this way consumer may ask retailers to
stock and promote manuIacturers
products. By devoting marketing eIIorts to the end consumer, a manuIacturer is said to employee
a pull strategy. On the other side when marketers devote their selling eIIorts to the channel
members by providing direct incentives Ior stock to them and sell products to the end customer.
This approach is called push strategy. In pull strategy marketers use advertisement and sales
promotion but in push strategy they use trade discounts and personal selling.

Direct hannels

To gain control over the selling process and build stronger relationships with customers, some
manuIacturers are introducing their own retail outlets, as well as selling their product directly to
customers through various means. These channels can take many Iorms. The most extensive
Iorm involves company-owned stores. Hallmark, Goodyear and others have sold their own
products in their own stores Ior years.



Overview of Marketing ommunication Options

Marketing communication options includes the Iollowing:

Media advertising
Direct response advertising
Online advertising
!lace advertising
!oint oI purchase advertising
Consumer promotions
Event marketing and sponsorship
!ublicity and public relations
!ersonal selling

Media Advertising

Advertising is any paid Iorm oI non personal presentation and promotion oI ideas, goods or
services by an identiIied sponsor. Media advertising includes TV, radio, newspaper and
magazines. From brand equity perspective television advertising demonstrate product attributes
and consumer beneIits. There are some beneIits and drawbacks oI TV, radio, newspaper and
magazines which are as under:
Medium Advantages Disadvantages

Television Mass coverage, High reach,
High prestige, and attention
getting
Low selectivity, $hort
message liIe, High absolute
cost and clutter
#adio Local coverage, Low cost,
High Irequency, Ilexible and
low production cost
Audio only, Clutter, Fleeting
message and low attention
getting device
Newspaper High coverage, Low cost,
$hort lead-time Ior placing
ads, Timely and can be used
Ior coupons
$hort liIe, Clutter, Low
attention getting capabilities,
and poor reproduction quality
Magazines $egmentation potential,
Quality reproduction and high
inIormation content
Long lead time Ior ad
placement, visual only and
lack oI Ilexibility



Direct Response Advertising

Direct response advertising establish relationship with consumers and it helps to explain to
consumers new developments with their brands as well as allow consumers to provide Ieedback
to marketers as to their likes and dislikes. Direct marketing is oIten seeing as a key component oI
relationship marketing. To implement an eIIective direct marketing program, three critical
ingredients are
(1) developing an up-to-date and inIormative list oI current and potential Iuture customers,
(2) putting Iorth the right oIIer in the right manner, and
(3) tracking the eIIectiveness oI the marketing program. Database marketing helps Iirms to retain
existing customers than to attract new ones. Direct response advertising includes, mail,
telephone, broadcast media, print media, computer related and media related.

Online Advertising

Marketers can also promote their products through online advertising by developing their own
websites. Websites are low cost and contain much inIormation about products. It should be
Iamily Iriendly. Websites must be updated Irequently and oIIer as much customized inIormation
as possible, especially Ior existing customers.

Place Advertising

!lace advertising also called out oI home advertising that captures advertising outside traditional
media. !lace advertising includes, billboards and posters, product placement and movies,
airlines. Billboards are very eIIective means Ior advertising. It is showing up everywhere. Many
marketers pay Iee Ior their product placement in television programs. !roduct place can be
combined with special promotions to publicize a brand`s entertainment tie-ins.

Point of Purchase Advertising

In-store advertising includes ads on shopping carts, cart straps, aisles, or shelves, as well as
promotion options such as in-store demonstrations, live sampling and instant coupon machines.

onsumer Promotions

Consumer promotions are designed to change the choices, quantity and consumers` product
purchases. Consumer promotion includes samples,
coupons, premiums, reIunds and rebates, contests and sweepstakes, bonus packs and price-oIIs.
$ampling is seen as a means oI creating strong relevant brand associations.

Event Marketing and Sponsorship

Event marketing reIers to public sponsorship oI events. Event sponsorshipprovides a diIIerent
kind oI communication option Ior marketers. Marketers reporta number oI reasons whey they
sponsor events
To identiIy with a particular target market
To increase awareness oI the company
To create consumer perceptions oI key brand image associations
To enhance corporate image dimensions
To create experiences and evoke Ieelings
To express commitment to the community
To entertain key clients
To permit merchandising opportunities

Public Relations and Publicity

!ublic relations and publicity relate to a variety oI programs and are designed to promote a
companys image and its products. !ublicity reIers to non-personal communications such as
press releases, media interviews, press conIerences, Ieature articles, newsletters, photographs,
Iilms and tapes. !ublic relations may also involve such things as annual reports, Iund-raising and
membership drives, lobbying, special event management, and public aIIairs. There are three
steps Ior designing an ad It is also known as
3M:
1.Model:A person who works as an ambassador oI a product and convey its beneIits to target
consumers.
2.Message:The objective oI an ad which a company is intended to deliver to target customers.
3.Masses:The target customers/market Ior whom an ad is designed.

Developing Integrated Marketing ommunication Programs

Matching ommunication Options

There are many ways to create integrated marketing communication programs. In assessing the
collective impact oI an IMC program, the goal is to create the most eIIective and eIIicient
communication program possible. Toward that goal, six relevant criteria can be identiIied:
1. Coverage
2. Contribution
3. Commonality
4. Complementary
5. Versatility
6. Cost

overage

Coverage relates to the proportion oI the audience that is reached by each communication option
employed, as well as how much overlap exists among communication options. The unique aspect
oI coverage relates to the inherent communication ability oI a marketing communication option,
as suggested by the second criterion. To what extent that there is some overlap in communication
options.

ontribution

Contribution relates to the inherent ability oI a marketing communication to create the desired
response and communication eIIects Irom consumer in the absence oI exposure to any other
communication option. In other words, contribution relates to the main eIIects oI marketing
communication option on the target audience.

ommonality

Marketing communication program should be coordinated to create a consistent and cohesive
brand image in which brand association share content and meaning. Commonality means each
and every communication option which a marketers use should convey a common associations
about the product.
omplementary

Complementary relates to the extent to which diIIerent associations and linkages are emphasized
across communication options. For instance, research shows that promotion can be more
eIIective when combined with advertising.

Versatility

Versatility reIers to the extent that a marketing communication option is robust and eIIective Ior
diIIerent groups oI consumers. There are two types oI versatility: communication and consumer.
The ability oI a marketing communication to work at two levels eIIectively communicating to
consumers who have or have not seen other communications is critically important.

ost

Finally evaluating the each communication option is also very much critical Ior marketer. The
cost oI each communication option varies in the market. Now the problem is which
communication option should be chosen and which is best. Communication options vary in terms
oI their breadth and depth oI coverage. To select one communication option the marketer has to
trade oII the other.










Chapter 8

The Brand Value hain

The brand value chain is a structured approach to assessing the sources and outcomes oI brand
equity and the manner by which marketing activities create brand value. The brand value chain
recognizes that numerous individuals within an organization can potentially aIIect brand equity
and must be cognizant oI relevant branding eIIects.

Value Stages

Brand value creation begins with marketing activity by the Iirm that inIluences customers in a
way aIIecting how the brand perIorms in the marketplace and thus how it is valued by the
Iinancial community.

Marketing Program Investment

In brand value chain marketer invest in a shape oI by introducing new product, means which he
use to communicate, trade and employees to make the product best so that it can be diIIerentiated
Irom others.

!rogram Multiplier

The ability oI marketing program to aIIect the customer mindset will depend on the quality oI
that program investment. Four particularly important Iactors are as Iollows:
1.Clarity: Do consumers properly interpret and evaluate the meaning conveyed by brand
marketing?
2.#elevance: Do consumers Ieel that the brand is one that should receive serious consideration?\
3.Distinctiveness:How unique is the marketing program Irom those oIIered by competitors?
4.Consistency : How consistent and well integrated is the marketing program? Do all aspects oI
the marketing program combine to create the biggest impact with customers?

ustomer Mindset
There are Iive dimensions that have emerged to highlight the CBBE model as particularly
important measure oI the customer mindset:
1Brand awareness: The extent and ease with which customers recall and recognize the brand and
can identiIy the products and services with which it is associated

2.Brand association: The strength, Iavorability and uniqueness oI perceived attributes and
beneIits Ior the brand.

3Brand attitudes: Overall evaluations oI the brand in terms oI its quality and the satisIaction it
generates.
4.Brand attachment: How loyal the customer Ieels toward the brand. A strong Iorm oI
attachment, adherence, reIers to the consumer`s resistance to change and the ability oI a brand to
withstand bad news.

5.Brand activity: The extent to which customers use the brand, talk to others about the brand,
seek out brand inIormation, promotions and events.

ustomer Multiplier

The extent to which value created in the minds oI customers aIIects market perIormance depends
on various contextual Iactors external to the customer. Three such Iactors are as Iollows
1.Competitive superiority: How eIIective are the quantity and quality oI the marketing
investment oI other competing brands.
2.Channel and other intermediary support: How much brand reinIorcement and selling eIIort is
being put Iorth by various marketingpartners.
3.Customer size and proIile: How many and what types oI customers are attracted to the brand.

Market Multiplier

The extent to which the value engendered by the market perIormance oI a brand is maniIested in
shareholder value depends on various contextual Iactors external to the brand itselI. These
Iactors are as Iollows:
Marketing dynamics: What are the dynamics oI the Iinancial markets as a whole?
Growth potential: What are the growth potential Ior the brand and the industry in which
it operates?
#isk proIile: what is the risk proIile Ior the brand? How vulnerable is the brand likely to
be to those Iacilitating and inhibiting Iactors?
Brand contribution: How important is the brand as part oI the Iirm`s brand portIolio and
all the brands it has?


Shareholder Value

Based on all available current and Iorecasted inIormation about a brand as well as many other
considerations, the Iinancial marketplace then Iormulates opinions and makes various
assessments that have direct Iinancial implications Ior the brand value. Three particularly
important indicators are the stock price, the price earnings multiple, and overall market
capitalization Ior the Iirm.

Designing Brand Tracking Studies

Tracking studies involve collection oI inIormation Irom customers on a routine basis over time.
Tracking studies are a means oI applying the brand value chain to understand where, how much,
and in what ways brand value is being created, thus oIIering invaluable inIormation about how
well a positioning has been achieved. Tracking studies play an important Iunction Ior managers
to Iacilitate their day to day decision making. Tracking studies provide valuable diagnostic
insights into the collective eIIects oI a host oI marketing activities on the customer mindset,
marketing outcomes, and perhaps even shareholder value.

What to Track

This section provides some general guidelines Ior tracking. The tracking study is necessary to
customize tracking surveys to address the speciIic issues Iaced by the brand.

Product Brand Tracking

Tracking an individual branded product involves measuring brand awareness and image Ior the
particular brand. Awareness measures should move Irom more general to more speciIic
questions. A range o more general to more speciIic measures be employed in brand tracking
surveys to measure brand image, especially in terms oI speciIic perceptions and evaluations. It is
also important to measure all association that may distinguish competing brands. Brand
associations should include all potential sources oI brand equity. At the sometime it is also
important to track more general, higher level judgments, Ieelings, and other outcome related
measures.

When and Where to Track
Tracking studies in general depends upon the Irequency oI product purchase and on consumer
behavior and marketing activity in the product category. One useIul tracking approach Ior
monitoring brand associations involves continuous tracking studies in which inIormation is
collected on continuous basis over time. When the brand has more stable associations, tracking
can be conducted on a less Irequent basis.

How to Interpret Tracking Studies

Tracking measures must be reliable and sensitive as possible. One problem with many traditional
measures is that they do not change much over time. In this way they reIlect the Iact. Marketers
must identiIy the real value drivers Ior a brand that is, those tangible and intangible points oI
diIIerence that inIluence and determine consumers` product and brand choices.

Establishing a Brand Equity Management System

A brand equity management system is a set oI organizational processes designed to improve the
understanding and use oI the brand equity concept within a Iirm. Three major steps an
organization should take to implement a brand equity management system: creating brand equity
charters, assembling brand equity reports, and deIining brand equity responsibilities.

Brand Equity harter

The brand equity charter provides relevant guidelines to marketing managers within the company
as well as key marketing partners outside the company. This document should do the Iollowing:

DeIine the Iirm`s view oI the brand equity concept and explain why it is important
Describe the scope oI key brands in terms oI associated products and the manner by
which they have branded and marketed.
$peciIy what the actual and desired equity is Ior brand at all relevant levels oI the brand
hierarchy at both the corporate level and at the individual product level.
Explain how brand equity is measured in terms oI the tracking study and the resulting
brand equity report.
$uggest how brand equity should be managed in terms oI some general strategic
guidelines.
$peciIy the proper treatment oI the brand in terms oI trademark usage, packaging and
communication.
Outline how marketing programs should be devised in terms oI some speciIic tactical
guidelines.

Brand equity charter may not change Irom year to year. As new products are introduced, brand
programs are changed, and other marketing initiatives take place.

Brand Equity Reports

Brand equity report is distributed to management on a regular basis. The brand equity report
should provide descriptive inIormation as to what is happening with a brand as well as diagnostic
why it is happening. One section oI the report should summarize consumers` perceptions oI key
attributes, preIerences and reported behavior as revealed by the tracking study. Another section
oI the report should include more descriptive market level inIormation such as the Iollowing:
!roduct shipments and movement through channels oI distribution
#elevant cost breakdowns
!rice and discount schedules where appropriate
$ales and market share inIormation broken down by relevant Iactors.
!roIit assessments

Brand equity is an intangible asset that depends on associations made by the consumer. There
are at least three perspectives Irom which to view brand equity

Financial - One way to measure brand equity is to determine the price premium that a brand
commands over a generic product. For example, iI consumers are willing to pay $100 more Ior a
branded television over the same unbranded television, this premium provides important
inIormation about the value oI the brand. However, expenses such as promotional costs must be
taken into account when using this method to measure brand equity.

Brand extensions - A successIul brand can be used as a platIorm to launch related products. The
beneIits oI brand extensions are the leveraging oI existing brand awareness thus reducing
advertising expenditures, and a lower risk Irom the perspective oI the consumer. Furthermore,
appropriate brand extensions can enhance the core brand. However, the value oI brand
extensions is more diIIicult to quantiIy than are direct Iinancial measures oI brand equity.

onsumer-based - A strong brand increases the consumer's attitude strength toward the product
associated with the brand. Attitude strength is built by experience with a product. This
importance oI actual experience by the customer implies that trial samples are more eIIective
than advertising in the early stages oI building a strong brand. The consumer's awareness and
associations lead to perceived quality, inIerred attributes, and eventually, brand loyalty

Brand Equity Responsibilities
To develop a brand equity management system that will maximize long term brand equity
organizational responsibilities and process with respect to the brand must be clearly deIined. This
section considers internal issues related to assigning responsibilities and duties Ior properly
managing brand equity. There must be a chieI brand oIIicer in every organization who reports
directly to the chieI executive oIIicer oI the company and who protect the brand the way it
looks and Ieels. The chieI brand oIIicer recognizes that the brand is the sum total oI everything a
company does. He should not only help to build the brand but also plans, anticipates, researches,
probes, listens, and inIorms.


















Chapter 10

omparative Methods
Comparative methods involve experiments that examine consumer attitudes and behaviors
toward a brand directly estimate the beneIits arising Irom having a high level oI awareness and
strong, Iavorable, and unique brand associations. There are two types oI comparative methods.

Brand-based Comparative Approach
Marketing-based Comparative Approach

Brand-based omparative Approach

Brand-based comparative approaches examine consumer response based on changes in brand
identiIication. These measurement approaches typically employ experiments in which one group
oI consumers responds to questions about the product in its marketing program when it is
attributed to the brand and other groups respond to question asked about the same brand.
Comparing the responses oI the two groups provide some useIul insights into the equity oI the
brand. Consumer responses may be based on belieIs, attitudes, intentions, and actual behavior.

Marketing-based omparative Approach

Marketing-based comparative approaches hold the brand Iixed and examine consumer response
based on changes in the marketing program. Marketing-based comparative approaches can be
applied in other ways. Consumer responds to diIIerent advertising strategies and executions.

Holistic Methods

Holistic methods attempt to place an overall value on the brand in either abstract utility term.
Thus holistic methods attempt to net out various considerations to determine the unique
contribution oI the brand. The residual approach attempts to examine the value oI the brand by
subtracting consumer`s preIerences Ior the brand based on physical product attributes alone Irom
their overall brand preIerences. The valuation approach attempts to place a Iinancial value on
brand equity Ior accounting purposes, mergers and acquisitions.












hapter 11

The Brand Product Matrix

The brand product matrix is a geographical representation oI all the brands and products sold by
the Iirm. The rows oI the matrix represent brand product relationships and capture the brand
extension strategy oI the Iirm in terms oI the number and nature oI products sold under the Iirm`s
brands. A brand line consists oI all products original as well as line and category extensions sold
under a particular brand. The columns oI the matrix represent product brand relationships and
capture the brand portIolio strategy in terms oI the number and nature o brands to be marketed in
each category. The brand portIolio is the set oI all brands and brand lines that a particular Iirm
oIIers Ior sale to buyers in a particular category.

Breadth of a Branding Strategy

The breadth oI a branding strategy concerns the number and nature oI diIIerent products linked
to the brands sold by a Iirm. There are some steps which can be used to measure include
aggregate market Iactors, category Iactors, and environmental Iactors.

Aggregate Market Factors

Aggregate market Iactors include the market size, market growth, stage in product liIe cycle,
sales cycle, seasonality and proIits.

ategory Factors

Category Iactor is considered attractive iI it is the case that the threat oI new entrants is low due
to the barriers oI entry Irom economies oI scale, bargaining power oI buyers is low e.g. when the
product bought is a small percentage oI buyers costs, current category rivalry is low when there
are Iew competitors in Iast growing markets and Iew close product substitutes exist in the eyes oI
consumers and the market is operating at near capacity.

Environmental Factors

External Iorces unrelated to the product`s customers and competitors that aIIect marketing
strategies. A host oI technological, political, economic, regulatory, and social Iactors will aIIect
the Iuture prospects oI a category and should be Iorecasted.

Depth of a Branding Strategy

The depth oI a branding strategy concerns the number and nature oI diIIerent brands marketed in
the product class sold by a Iirm. For example !rocter &Gamble is widely recognized as
popularizing the practice. !&G became proponents oI multiple brands aIter recognizing that
introducing its new detergent brand as an alternative to its already successIul tide detergent
resulted in higher combined product category sales.
Brand Hierarchy

A brand hierarchy is a means oI summarizing the branding strategy by displaying the number
and nature oI common and distinctive brand elements across the Iirm`s products. A brand
hierarchy is a useIul means oI graphically portraying Iirm`s branding strategy. The highest level
oI the hierarchy technically always involves one brand the corporate brand. For some Iirms the
corporate brand is virtually the only brand used e.g. as with General Motors and Hewlett-
!ackard. At the next lower level, a Iamily brand is deIined as a brand that is used in more than
one product category but is not necessarily the name oI the company itselI. An individual brand
is deIined as a brand that has been restricted to essentially one product category, although it may
be used Ior several diIIerent product types within the category. For example General Motor is a
corporate brand, under General Motor Chevrolet, !ontiac, Oldsmobile, Buick, Cadillac and
GMC are Iamily brands. Under these brands there are an individual brands like Alero, regal,
cutlass, sun Iire etc.
Corporate brand equity is the diIIerential response by consumers, customers, employees, other
Iirms or any relevant constituency to the words, actions, communications, products or services
provided by an identiIied corporate brand entity.


orporate Image

Corporate image plays very much important role in any brand strategy. There are some important
corporate image associations which are as Iollows:


ommon Product Attributes, Benefits

A high quality corporate image association involves the creation oI consumer perceptions that a
company makes products oI the highest quality. A number oI diIIerent organizations rate
products and companies on the basis oI quality. An innovative corporate image association
involves the creation oI consumer perceptions oI a company as developing new and unique
marketing programs, especially with respect to product introductions. Being innovative is seen in
part as being modern and up to date investing in research and developing employing the most
advanced manuIacturing capabilities and introducing the newest product Ieatures. !erceived
innovativeness is also a key competitive weapon and priority Ior Iirms in other countries.
People and Relationships

Corporate image associations may reIlect characteristics oI the employees oI the company. Thus
a customer Iocused corporate image association involves the creation oI consumer perceptions oI
a company as being responsive to and caring about its customers. A company seen as customer
Iocused is likely to be described as listening to customers and having their best interests in mind.

Values and Programs

Corporate image associations may reIlect values and programs oI the company that do not
always directly relate to the products they sell. Firms can run corporate image ad campaign as a
means to describe to consumers, employees, and others the philosophy and actions oI the
company with respect to organizational, social and political issues.

orporate redibility

Corporate credibility depends upon three Iactors:
1. Corporate expertise: The extent to which a company is seen as able to competently make and
sell its products or services.
2. Corporate trustworthiness: The extent to which a company is seen as motivated to be honest,
dependable and sensitive to customer needs.
3. Corporate likeability: The extent to which a company is seen as likable, attractive, prestigious,
dynamic and so Iorth.



Designing a Branding Strategy

BeIore designing a branding strategy iI a Iirm does not identiIy its weaknesses in the research,
might be it has negative eIIect on customers. When a Iirm`s product cannot satisIy the needs oI
the consumers they never purchase it again and as a result they have negative relationship with
the product and in Iuture might be they never purchase oI any product oI that company on the
basis oI previous experience.

ombining Brand Elements from Different Levels
II multiple brand elements Irom diIIerent levels oI the brand hierarchy are combined to brand
new products, it is necessary to decide how much emphasis should be given to each brand
element. For example iI a sub-brand strategy is adopted, how much prominence should
individual brands be given at the expense oI the corporate brand? There are many diIIerent ways
to connect a brand element to multiple products. The principle oI commonality states that the
more common brand elements shared by products, the stronger the linkages between the
products. The simplest way to link products is to use the brand element as is across the diIIerent
products involved. For example, a common preIix oI a brand name may be adapted to diIIerent
products. Hewlett-!ackard capitalized on its highly successIul Laser Jet computer printers to
introduce a number oI new products using the 'Jet preIix, Ior example, the DeskJet, !aint Jet,
Think Jet, and OIIice Jet printers.
Corporate Image Campaigns

To maximize the probability oI success, however, the objective oI a corporate image campaigns
must be clearly deIined and results must be careIully measured against these objectives. A
number oI diIIerent objectives are possible in a corporate brand campaigns.

Build awareness oI the company and the nature oI its business

Create Iavorable attitude and perception oI company credibility
Link belieIs that can be leveraged by product speciIic marketing
Make a Iavorable impression on the Iinancial community
Motivate present employees and attract better recruits
InIluence public opinion on issues













Chapter 12

New Products and Brand Extensions

For any company new products and brand extensions are vital and play very much important role
in the growth oI the company. It entirely depends on the situation and the time where they should
be induction oI a new brand or to extent the existing brand. When a company introduces a new
product, it has three main choices as to how to brand it:
1. It can develop a new brand, individually chosen Ior the new product.
2. It can apply, in some way, one oI its existing brands.
3. It can use a combination oI a new brand with an existing brand.

Managing Multiple Brands
DiIIerent companies have opted Ior diIIerent brand strategies Ior multiple products. These
strategies are:
$ingle brand identity - a separate brand Ior each product. For example, in laundry
detergents !rocter & Gamble oIIers uniquely positioned brands such as Tide, Cheer,
Bold, etc.
Umbrella - all products under the same brand. For example, $ony oIIers many diIIerent
product categories under its brand.
Multi-brand categories - DiIIerent brands Ior diIIerent product categories. Campbell
$oup Company uses Campbell's Ior soups, !epperidge Farm Ior baked goods, and V8 Ior
juices.
Family oI names - DiIIerent brands having a common name stem. Nestle uses NescaIe,
Nesquik, and Nestea Ior beverages.

A brand extension is when a Iirm uses an established brand name to introduce a new product.
An existing brand that gives birth to a brand extension is reIerred to as the parent brand. There
are seven general strategies Ior establishing a category extension:
1. Introduce the same product in a diIIerent Ior. For example, Haleeb DairyQueen
2. Introduce products that contain the brand`s distinctive taste, ingredient, or component. For
example, Cornetto Ice Cream
3. Introduce companion products Ior the brand. For example, McDonald oIIers Iree !epsi with its
Iast Iood.
4. Introduce product that relevant to the customer Iranchise oI the brand. For example, Mobil ink
Black berry.
5. Introduce products that capitalize on the Iirm`s perceived expertise. For example, $ony TV
6. Introduce products that reIlect the brand`s distinctive beneIit, attribute. Forexample,
$aIeguard.
7. Introduce products that capitalize on the distinctive image or prestige oIthe brand. For
example, Coca Cola

Advantages of Brand Extensions

There are diIIerent advantages oI brand extension Ior a company. $ome oI them are as Iollows:
What is a brand extension?

It`s simply a manner oI leveraging the success and popularity oI an existing brand name to
support the launch oI a new product. For example, Nike started outselling shoes and later
extended the brand into diIIerent types oI shoes (i.e., line extensions) and diIIerent product
categories like clothing (i.e., category extensions). As a businessperson and marketer, it`s
important to understand the reasons why extending your brand can help your company.


Kellogg on Branding Includes a great chapter about brand extensions Irom which I extracted the
Iollowing top 5 reasons to extend brand
1)Brand extensions can reduce the costs and risks associated with launching a new product.
$ince the brand name is already known and(hopeIully) popular, using that brand name on a new
product (particularly when it`s in the same line as the original product) immediately
communicates the same level oI awareness and perception

2)Brand extensions typically garner more shelI space than unknown new product brands. $imply
stated, retailers are more likely to stock a new product with a known brand name on it. Again,
it`s less risky, and a Iamiliar brand comes with ready-made awareness and perceptions

3)Brand extensions may require a lower advertising investment. Consumers are already aware oI
the brand name, so advertising to create brand awareness and recognition is not necessary.
Instead, advertising dollars can be invested in more targeted messaging

4)Brand extensions can boost the parent brand by creating increased interest in the brand as a
whole and possibly growing the brand`s customer base across the board

5)Brand extensions reduce a company`s dependency on one product which could become less
popular in the Iuture

Facilitate New Product Acceptance
Improve brand image
#educe risk perceived by customers
Increase the probability oI gaining distribution and trial
Increase eIIiciency oI promotional expenditures
#educe cost oI introductory and Iollow up marketing programs
Avoid cost oI developing a new brand
Allow Ior packaging and labeling eIIiciencies
!ermit consumer variety seeking

Provide Feedback Benefits to the Parent Brand and ompany

ClariIy brand meaning

Enhance the parent brand image
Bring new customers into brand Iranchise and increase market coverage
#evitalize the brand
!ermit subsequent extensions

Disadvantages of Brand Extensions
Can conIuse customers
Can encounter retailer resistance
Can Iail and hurt parent brand image
Can succeed but cannibalize sales oI parent brand
Can succeed but diminish identiIication with any one category
Can succeed but hurt the image oI parent brand
Can dilute brand meaning
Can cause the company to Iorgo the chance to develop a new brand.

Evaluating Brand Extension Opportunities

1. DeIine actual and desired consumer knowledge about the brand.
2. IdentiIy possible extension oI brand on the basis oI parent brand associations and overall
similarity.
3. Evaluate the potential oI extension brand to create equity according to the three Iactor model:
$alience oI parent brand associations
Favorability oI inIerred extension associations
Uniqueness oI inIerred extension associations
4. Evaluate extension Ieedback eIIects according to the Iour Iactor model:
How compelling the extension evidence is
How relevant the extension evidence is
How consistent the extension evidence is
How strong the extension evidence is
5 Consider possible competitive advantages as perceived by consumers and possible reactions
initiated by consumers.
6. Design marketing campaign to launch extension
7. Evaluate extension success and eIIects on parent brand equity