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BRANDS & BRAND MANAGEMENT

Learning objectives
• • • • Importance of brands Branding challenges and opportunities Brand Equity Strategic brand management

symbol. term. .What is a brand? • For the American Marketing Association (AMA). intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. or design. or a combination of them. a brand is a “name. competition ” • These different components of a brand that identify and differentiate it are brand elements. sign. name.

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

a retail outlet. acquisition. a place. or even an idea. or consumption that might satisfy a need or want. . an organization. use. a service. • Ap product may y be a physical p y g good. Products • A product is anything we can offer to a market for attention.Brands vs vs. a person.

or related services that distinguish the product from competitors. no-frills version of the product that adequately performs the product function. The expected product level is a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product.Five Levels of Meaning for a Product • • The core benefit level is the fundamental need or want that consumers satisfy by consuming the product or service. This is basically a stripped-down. The generic product level is a basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features. • • • . The potential product level includes all the augmentations and transformations that a product might ultimately undergo in the future. Th augmented The t d product d t level l l includes i l d additional dditi l product d t attributes. tt ib t benefits.

other brands create competitive advantages through non-product-related means. d • Some brands create competitive p advantages with product performance. means .• A brand is therefore more than a product. as it can have dimensions that differentiate it in some way from other products d i designed dt to satisfy ti f th the same need.

bond. or pact with product maker • Symbolic device • Signal of quality .Importance of Brands to Consumers • Identification of the source of the product • Assignment of responsibility to product maker • Risk reducer • Search cost reducer • Promise.

• Social S i l risk— i k The Th product d results l i in embarrassment b from others. • Physical y risk—The p product p poses a threat to the physical well-being or health of the user or others. product results in an • Time risk—The failure of the p opportunity cost of finding another satisfactory product. . • Financial risk—The product is not worth the price paid. • Psychological risk risk—The product affects the mental well-being of the user.Reducing the Risks in Product Decisions • C Consumers may perceive i many diff different tt types of f risks i k i in buying and consuming a product: • Functional risk— risk The product does not perform up to expectations.

Importance of Brands to Firms • To firms. capable p valuable p of influencing consumer behavior. . being bought and sold. brands represent enormously pieces of legal g p property. sold and providing the security of sustained future revenues. p y.

Importance of Brands to Firms • • • • Identification to simplify handling or tracing Legally protecting unique features Signal of quality level Endo ing prod Endowing products cts with ith unique niq e associations • Source of competitive advantage • Source of financial returns .

and even water (Perrier) . pineapples (Dole). bath soap (Ivory). salt (Morton). pickles (Vlasic). • The key to branding is that consumers perceive differences among p g brands in a product category. flour (Gold Medal) Medal). oatmeal (Quaker).Can everything be branded? • Ulti Ultimately t l ab brand di is something thi th that t resides in the minds of consumers. chickens (Perdue). beer (Budweiser) (Budweiser). • Even commodities can be branded: – Coffee (Maxwell House). bananas (Chiquita).

An Example of Branding a Commodity • De Beers Group added the phrase “A Diamond Is Forever” .

and entertainment G Geographic hi l locations ti Ideas and causes . arts.What is branded? • • • • • • • • Physical goods Services Retailers and distributors Online prod products cts and ser services ices People p and organizations g Sports.

“First to Market. innovate relentlessly.” Gerald J. and leverage assets to realize their vision.” MIT Sloan Management Review. Golder. First to Fail? Real Causes of Enduring Market Leadership. They persist under adversity. and they exhibit an indomitable will to realize that vision. Tellis and Peter N.Source of a Brands’ Brands Strength • “The real causes of enduring market leadership are vision and will. commit financial resources. 1 January 1996 . Enduring market leaders have a revolutionary and inspiring vision of the mass market.

management . and susceptible to poor brand management.Importance of Brand Management • The bottom line is that any brand—no g at one p point in time—is matter how strong vulnerable.

What are the strongest brands? .

84 26. 9. 7.91 32.93 56.50 21 80 21.59 26. 6.38 47. 2.80 67. 5.85 27.94 53.44 26.Top p Ten Global Brands Brand 1.32 30.00 .94 27.45 24.01 20 00 20.00 56. 8.13 27. Coca-Cola Microsoft IBM GE Intel Nokia Toyota Disney McDonald’s MercedesMercedes Benz 2006 ($Billion) 2005 ($ Billion) 67. 10 10. 4. 3.00 35.53 59.20 48.

Branding Challenges and Opportunities • • • • • • Savvy customers Brand proliferation Media fragmentation Increased competition Increased costs Greater accountability .

. which translates into higher sales volume and higher profit margins against competing brands.BRAND EQUITY • A brand's power derived from the goodwill and name recognition g that it has earned over time.

• Brand equity is defined in terms of the marketing effects uniquely attributable to the brand brand.The Brand Equity q y Concept p • No common viewpoint on how it should be conceptualized and measured • It stresses the importance of brand role in marketing strategies. . – Brand equity relates to the fact that different outcomes res lt in the marketing of a prod result product ct or ser service ice beca because se of its brand name. as compared to if the same product or service did not have that name.

Strategic Brand Management • It involves the design and implementation of marketing programs and activities to build. G i and d sustaining t i i b brand d equity it . 2. Measuring and interpreting brand performance 4 Growing 4. . q y measure. • The Strategic Brand Management Process is defined as involving four main steps: 1 Identifying and establishing brand positioning and values 1. and manage g brand equity. Planning and implementing brand marketing programs 3.

Strategic g Brand Management g Process Steps Identify and establish brand positioning and values Key Concepts Mental maps Competitive frame of reference P i t f Points-of-parity it and d points-of-difference i t f diff Core brand values Brand mantra Mixing and matching of brand elements Integrating brand marketing activities Leveraging of secondary associations Brand value chain Brand audits Brand tracking Brand equity management system Brand-product matrix B Brand d portfolios tf li and d hierarchies hi hi Brand expansion strategies Brand reinforcement and revitalization Plan and implement brand marketing programs Measure and interpret brand p performance Grow and sustain brand equity .

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