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GEA COLLEGE OF ENTREPRENEURSHIP
HOW THE BRAND AFFECTS THE VALUE OF THE PRODUCT diploma thesis
MENTOR: Andrej Pompe
AUTHOR: Daniela Milosheska
Ljubljana, April 2009
“Sometimes our light goes out but is blown into flame by another human being. Each of us owes deepest thanks to those who have rekindled this light.”
By unknown author Someone far cleverer than I am spoke these words a long time before. I use them now to show to all of those who have really rekindled this light that my gratitude goes far beyond these words. I would like to show special thanks to those who have brought me to this stage, supporting each and every step along the way, no matter how wrong or right it might had been. My parents, who had offered their help unconditionally and unselfishly whenever I found myself in the abyss, the same ones who have stood beside me each and every step along the way deserve more than my words of appreciation. Unfortunately these words are only thing I can offer, for now. Thank you for being there whenever I needed you. My sister who is the most important thing in my life, for showing me such love and support that one could only dream of. I am lucky to have her. I want to thank you from the bottom of my heart, but for you my heart has no bottom. Another thank you goes to Rinalda Klemencic, who was my mentor during the internship. Thank you for showing me the basics. Finally, my special thanks go to my mentor Andrej Pompe, who has widely opened the doors of his company so that I can gain some experience. Not a lot of people are willing to do that. Thank you.
as well as maintaining the brand as strong as possible. emotional bonding and several different elements. some compare it to onion with its layers and core content (Edwin Artzt). the aorta of the heart of one successful organization and the engine of the exquisite machine for profitability in today’s competitive market. Audacity Group). innovativeness. This huge impact is also the reason behind the choice of my topic for thesis. just simple relationships between the customers and companies. The main objective and purpose for doing this thesis is to analyze how the brands affect a particular product and why completely same products have different values on the market. In order to prove that the brand has a tremendous impact on the value of the product I will try to define the word brand. In order to demonstrate that this is right I will try to explain the complexity that the brand incorporates.SUMMARY/ABSTRACT Brand… What does it mean? Some define it as the “f” word of marketing (Mark Di Soma. as well as the methods of its achievement. This tremendous impact is composed of loyalty. while others consider it as a product of a thousand small gestures (Michael Eisner. establish the criteria for the choice of the brand elements. travel a bit throughout its history. identify the marketing communication options that might help in strengthening the brand. or have equivalent tastes. even though they might contain the same ingredients. a place where there are no boundaries. In this thesis I will provide a lot of case studies and examples about world’s well known brand names so that I can prove my one and only objective which is THE BRAND AFFECTS THE VALUE OF THE PRODUCT. It has created a world where innovation and creativity are the basics for a successful performance and sustainable growth. but most important to how they determine the value of the product. or even possess same odor. I define it as the very beginning and the very end of the golden era of corporations. Since its appearance from 1200 AD up until today its impact on society is immense. I’ve always been intrigued by the phenomenon of the brands and how they are managing to capture attention from its audience. mutual relationship. 5 . etc. by going deeper into the processes of creating and establishing. I am going to explore the reasons behind this phenomenon and provide facts for why is this happening. CEO Disney). the backbone of each and every flourishing company.
brand equity. brand perception 6 .Keywords: brand. branding. strongest brands.
ki se glasi: TRŽNA ZNAMKA VPLIVA NA VREDNOST IZDELKA. v katerem sta inovativnost in kreativnost osnovi za uspešno poslovanje in trajnostno rast. še razmeroma mlada. ki jih preučuje. tako v objavljenih publikacijah ter študijah primerov prihajajočih in uveljavljenih znamk. da ima blagovna znamka ogromen vpliv na vrednost izdelka. kot tudi na internetu. Tržne znamke so ustvarile svet. določila kriterije za izbiro elementov tržne znamke. Ta izreden vpliv je skupek lojalnosti. spet tretji jo označujejo kot izdelek s tisočerimi majhnimi potezami (Michael Eisner. kot se le da. Čeprav so blagovne znamke stare že nekaj stoletij. pa je veda. vendar je o tej temi na voljo vsak dan več informacij. v katerem ni mej. bom skušala pojasniti kompleksnost blagovne znamke. aorto do srca vsake uspešne organizacije in motor dovršenega stroja za doseganje donosnosti na sodobnih konkurenčnih trgih. bom skušala opredeliti izraz tržna znamka. ki lahko pomagajo pri krepitvi znamke itd. hrbtenico čisto vsakega cvetočega podjetja. da sem si za diplomsko delo izbrala prav to temo. V svoje delo bom vključila veliko študij primerov v svetu najbolj znanih blagovnih znamk. da je kot čebula. inovativnosti. saj je jedro z vsebino obdano z mnogimi plastmi (Edwin Artzt). Da bi dokazala. Da bi dokazala pravilnost te trditve. Vse od pojava znamk okoli leta 1200 je njihov vpliv na družbo ogromen. Audacity Group).POVEZETEK Blagovna znamka … Kaj ta izraz sploh pomeni? Nekateri blagovno znamko definirajo kot »besedo na f v marketingu« (Mark Di Soma. Že dalj časa me navdihuje pojem blagovnih znamk in to. vzajemnih odnosov. nekateri pravijo. čustvenih povezav in številnih drugih elementov. prepoznala možnosti tržnega komuniciranja. in sicer s podrobnim raziskovanjem tako procesov ustvarjanja in uveljavljanja kot tudi ohranjanja blagovne znamke močne. ampak le preprosti odnosi med potrošniki in podjetji. Druga možna ovira bi lahko bila moja neizkušenost na področju 7 . kako jim uspe pridobiti pozornost svojega občinstva in kako vplivajo na vrednost izdelka. To je sicer lahko ovira. se nekoliko spustila v njeno preteklost. Prav ogromen vpliv blagovnih znamk je razlog. svet. da bom s tem dokazala svojo edino tezo naloge. CEO Disney). Sama jo definiram kot začetek in konec zlate dobe korporacij.
ker želim v raziskavo vključiti širši spekter podjetji. do sedaj še nisem delala za kakšno blagovno znamko ali sodelovala pri projektu znamčenja. S pregledom zgodovine teh podjetij bom skušala najti elemente. vrednost blagovne znamke. sem se odločila. in seveda metode. bo v diplomsko delo vključeno veliko število primerov in študij primerov.marketinga. Ključne besede: blagovna znamka. Ker bom pisala o največjih svetovnih podjetjih. Za tak način namesto klasičnega. pri katerem bi raziskavo delala samo na primeru enega podjetja. kako tržna znamka vpliva na določen izdelek in zakaj imajo enaki izdelki na tržišču različno ceno. V nalogi bom poiskala vzroke za tak pojav in navedla dejstva. najmočnejše znamke. telefonski intervjuji v moji nalogi ne pridejo v poštev. percepcija blagovne znamke 8 . Za predvidene raziskovalne metode sem izbrala iskanje po internetu s pomočjo iskalnikov ter raziskovanje bogate knjižnične literature in strokovnih del. ki so ustvarili in ohranili močno tržno znamko. čeprav lahko vsebujejo enake sestavine. Čeprav sem prebrala veliko število knjig na to temo. Glavni cilj in namen te diplomske naloge je analizirati. znamčenje. da bi lahko učinkoviteje izdelala dokaz svoje teze in dobila bolj trdne rezultate. imajo enake okuse ali celo enak vonj. bom to naredila predvsem s pomočjo informacij na spletnih straneh in v objavljenih publikacijah. po katerih sem to ugotovila. Kot sem že omenila. zakaj se to dogaja. ki jim zagotavljajo vodilni položaj na trgu in jih razlikujejo od ostalih podjetij. Kot rečeno.
2.35 4.45 5.4 2.43 5.3. INTRODUCTION………………………………………………….1..56 7.58 8.49 6. Brand positioning………………………………………………32 4.. Brand elements which affect the human perception………….4. Product strategy………………………………………………. Market communication options……………………………….5.36 5. Brand brief history………………………………………………9 2..2.. Channel strategy………………………………………………. Definition and different opinions……………………………….. Pricing strategy…………………………………………………41 5.TABLE OF CONTENTS 1. Four steps of brand building……………………………………26 3.2.. CONCLUSION……………………………………………………. APPENDIXES …………………………………………………….. Brand mantras and brand audits……………………………….. BIBLIOGRAPHY…………………………………………………. MAKING STRONG BRAND 3.15 126.96.36.199..1..3. Strongest brands………………………………………………. WHAT IS BRAND? 2. Brand equity……………………………………………………22 3. HOW BRAND AFFECTS THE VALUE OF THE PRODUCT 5.3.61 9 .2. How do consumers perceive and choose brands……………….7 2..39 5. BRAND ELEMENTS 4. Benefits of a strong brand………………………………………31 4..
.42 2.....30 4. Graph 3: Keller’s model for Calvin Klein’s brand……………………………... Graph 6: Porter’s value chain………………………………………………….53 5.31 5.. Table 3: Top 10 brands with highest brand contribution (The 100 most powerful brands: BrandZ top100 brand ranking)……………………………. Graph 5: The basic perceptual map……………………………………………. Table 1: Calculating the brand value (The 100 most powerful brands: BrandZ top100 brand ranking)……………………………………………………………28 2. Table 2: The 30 most powerful brands in 2008 according to their brand….45 3.63 10 . Graph 1: “BLAKE PROJECT”……………………………………………….29 3. Table 5: Projective technique……………………………………………………84 LIST OF GRAPHS 1. Graph 2: Keller’s customers’ based brand equity model……………………. Graph 4: Brand positioning…………………………………………………….LIST OF TABLES 1..55 6.49 4.. Table 4: Top 10 brands with highest brand momentum (The 100 most powerful brands: BrandZ top100 brand ranking)……………………………..
travel a bit throughout its history. In this thesis I will provide a lot of case studies and examples about world’s well known brand names so that I can prove my one and only objective which is THE BRAND AFFECTS THE VALUE OF THE PRODUCT. establish the criteria for the choice of the brand elements. identify the marketing communication options that might help in strengthening the brand. just simple relationships between the customers and companies. This huge impact is also the reason behind the choice of my topic for thesis. mutual relationship. This tremendous impact is composed of loyalty. In order to prove that the brand has a tremendous impact on the value of the product I will try to define the word brand. etc. as well as the methods of its achievement. or even possess same odor. while others consider it as a product of a thousand small gestures (Michael Eisner. It has created a world where innovation and creativity are the basics for a successful performance and sustainable growth. some compare it to onion with its layers and core content (Edwin Artzt). even though they might contain the same ingredients. CEO Disney). innovativeness.1. In order to demonstrate that this is right I will try to explain the 11 . the backbone of each and every flourishing company. Audacity Group). a place where there are no boundaries. but most important to how they determine the value of the product. or have equivalent tastes. I define it as the very beginning and the very end of the golden era of corporations. emotional bonding and several different elements. The main objective and purpose for doing this thesis is to analyze how the brands affect a particular product and why completely same products have different values on the market. I am going to explore the reasons behind this phenomenon and provide facts for why is this happening. I’ve always been intrigued by the phenomenon of the brands and how they are managing to capture attention from its audience. Since its appearance from 1200 AD up until today its impact on society is immense. the aorta of the heart of one successful organization and the engine of the exquisite machine for profitability in today’s competitive market. INTRODUCTION Brand… What does it mean? Some define it as the “f” word of marketing (Mark Di Soma.
complexity that the brand incorporates. strongest brands. brand equity. branding. as well as maintaining the brand as strong as possible. by going deeper into the processes of creating and establishing. brand perception 12 . Keywords: brand.
Definition and different opinions Brand… Some define it as the “f” word of marketing (Mark Di Soma 2006). Ralph Lauren defines the term brand by this sentence only. a notable advertising executive. “I don’t design clothes.1.” A huge name in the fashion industry. I design dreams. I define it as the very beginning and the very end of the golden era of corporations. the backbone of each and every flourishing company.1. It is clearly seen from the definition that to create a brand does not only require good product.” Here is how David Ogilvy. CEO Disney 2000). skills that include faith and obstinacy. “Any damn fool can put on a deal. This definitions offer an insight to the overall perception of the word brand. WHAT IS BRAND? 1. who has often been called. “The father of advertising” defined the term brand. 13 . the aorta of the heart of one successful organization and the engine of the exquisite machine for profitability in today’s competitive market. The truth about branding lies in those dreams and how one interprets them in the society. But what about those definitions which are commonly known? What exactly represents the word branding and how this word is defined by the marketing associations around the globe? I have found out how the American Marketing Association (AMA) and the European Marketing Confederation (EMC) perceive the world of brand. faith and perseverance to create a brand. some compare it to the onion with its layers and core content (Edwin Artzt 2004). while others consider it as a product of a thousand small gestures (Michael Eisner. how they are shape to constitute the reality. but it takes genius. but it also requires lethal skills to package it.
by creating words. or any combination of the three in order to provide mental associations that get stirred up when one thinks about a particular item. term. This difference is of an extreme importance if one wishes to establish a strong brand and maintain it for a long period of time. since brand is more psychological item and therefore relies a lot on the people’s perception. person or even a country. This means that the idea of the definition of brand and branding can always change due to the subjectivity of the people. it must capture not only the minds of the people who purchase it. This mental associations created in the minds of the people who purchase them can cause very significant bonds or pacts between the brand and the consumers. I think that brand is something that lives in the mind of each and every one who consumes it. Even though I strongly agree with this definition. Above are just a few of the definitions for brand. great attention must be paid to the uniqueness of the products and services he or she offers. It clearly states that in order for one to run a successful business. there is something that is lacking. or design. so called. For this reason. Adamson puts it “a brand is a promise that links a product or a service to a consumer. There are a lot of opinions regarding this topic. As. or a combination of them. Once that emotional bond is formed. sign. but it must be something which the people will actually need. This difference which is the essential is not just something that might contribute for the brand to become the next big thing. symbol.” It basically says that in order for the brand to be a success story. 14 . or images. as well as more or less engagement of the people’s needs and wants.” This definition actually explains the set of the.“A brand is a name. except for lowered quality and unsuccessful deliverance of the promise that a brand creator makes. or emotions. Those bonds within time can either strengthen or weaken due to the higher or lower quality of the product or service offered. The emphasis here is put on that exceptional difference that distinguishes the products and services offered from the ones of the competition. Allen P. there is nothing and no one strong enough to break it. but the hearts as well. intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. the same ones which are incorporated in the decisive process of the complexity infused in the consumers’ purchasing procedure. elements of the brand.
However. a guaranteed safety is a big plus for one product or service. the beverage inside the bottle. In today’s fast moving society. a practical guide to planning your strategy” differs them in the following way: “A brand has an existence that is more than an actual product or service: it has a life of its own that feeds on the original product. but can also carry its values and identity into new product areas. you see the brand is the king today. because it rules the world and helps people to make up their minds faster. so that it can be clear from where the term was derived and how long ago it was established. how to distinguish between what’s a brand and what’s just a product. is a brand. as the oldest example of all. therefore the quality provided by a branded product or service positions it much higher and makes it safer for a lot of consumers. in this thesis.Another eminent question that cripples here is. who in his book “Branding. People’s perception dominates their decision for purchasing certain product or service. since the consumers don’t have time to check all the options that they might find on the marketplace. 15 . A simple answer would be provided by Geoffrey Randall. the magic of its success will vanish and will only stay the product itself. So.” For instance Coca Cola. I will provide a brief journey throughout the centuries. Having a well known established brand can help in the process of reducing the risk involved in the buying decisions (Roselius 1971.56-61). but if you take out the packing and the design of its bottle. for better understanding of the word brand and the process branding. instead they go with the one which name is familiar and clearly associated with quality.
C. That is what makes this story different from all the others. Some claim it to be way back in 3000 B. there is no other facts found that can testimony otherwise. As I said before the tale takes place in the Ancient times. according to the UCLA Indianologist Stanley Wolpert. the Brahma bulls. 28.C. elephants.com/archives/brief-history-of-branding.2 Brief history of the brand PICTURE1: START OF BRANDING Source:http://experiencecurve. Aside from a number of seals found from the excavation written in as yet encrypted script.03. in Babylon. This is where the bad start initiates. Even though it has a happy ending like almost every fairytale before it. where the evidence of the first advertising was found. which primary topic is the theme of branding. This same place was the cradle of the earliest example of branding.2009. and other Indian animals “were probably made from merchants who used them to ‘brand’ their wares”. infused with sparkles of faith and obstinacy started a long time ago. and the clues provided by the overlap of the Indian and Sumerian artifacts. or the so called Harappan civilization. However a lot of textbooks. and the difference the very first root of the tale itself.. with the first trading among the nations. He believes that the magnificent seals of tigers. was a place where the foundations of the first economy had been laid in the 2250BC. It is commonly believed that the word “brand” comes from an Old Norse word “brandr” which means “to burn”. the home of the Sumerians and Akkadians. probably due to the fact that there are no written records found that this Harappan society ever existed.2. I am thinking that this is the main reason why a lot of textbooks claim that the actual start of the brand was around 1300 B. Yes. THE BRAND. I am talking about the king that rules the world. in the Indus valley. the one and only. At these times there were no 16 . promote a different story. The Indus Valley. somehow it has a very awkward start. This fairytale of innovation and creativity.
I guess there is no limit to how far the people’s cruelty would go. It started by patenting the medicines and the tobacco by promoting them in various ways. China. Probably they would end up being slaughtered or crucified.29). In the eighteenth centaury. there were also other countries which started with this tradition. Adamson 2006. silversmiths were up next. as well as boost the actual performance of the product or the service offered in the market place (P. up until the sixteenth centaury when the brand names started to develop further. the brand names were commonly used to improve the perception of a product. the posters.Adamson 2006. Adamson 2006. so the Vikings took advantage of this fact and started to brand their animals in order to identify them. On the other side not only animals were branded. Countries such as ancient Greece. The branding concept for promoting the product or service offered was brought in the United States of America by the Europeans. They were required to mark their goods with a signature or personal symbol and with the sign of the quality of the metal. Yes. This tradition followed throughout the centuries. increase sales volumes. Anyway. 17 . with no significant change. in England the criminal would get S on his or her cheek and in France they would be “honored” with the fleur de lis on their shoulder. It started by patenting the medicines and tobacco. Goldsmiths. By the nineteenth century. the pottery jars and goods such was the bread (P. For instance. All those criminals who were committing crimes were marked. you’ve read correctly. the dawn of advertising was born (P. The packaging.43).organizations such as “PETA” to protect the animal’s rights. the brand names were used to actually make the products easier to remember and put an emphasis on the differences that they posses. followed by the whiskey producers.30). the ads and a lot of other techniques developed and the new dawn. and Rome branded the porcelain. but people as well. I wonder what “PETA” will think if this happens nowadays. They were even convicted if they used false marks and therefore harshly punished (Lane Keller 2008. so that they appeared to be very familiar or some even the same as we know of them nowadays. 29). as well as slaves in England back in the 1200s. It is here where the process of promotion and publicity first appears.
and the laying down of the foundations of advertising.com/adagdt/ad9924bass.30).34). by creating emotional bonding with customers and developing designs which can attract them and maintain them for longer period of time. PICTURE2: BASS & COMPANY LOGO SOURCE:http://www. Adamson 2006. This marked the beginning of the mass production. Adamson 2006. the two most important pillars of the brand. Nowadays. 18 .sportingcollectibles.03. For instance. the availability of the products advanced to the point of being reachable nationwide. The creativity and the innovation gave another side to the business. They are coexisting and together they make the competition more entertaining and fun to watch. the promise of security. in 1970 the America Express developed a product which putted an emphasis on the emotions of their core target customers. They had based their product on simple promise which everybody needed to hear. He provided the American Express with an excellent communication tool of safety associated with carrying the American Express Travelers Cheques. creating again another concept of the media buyer (P.With the railroads being the primary mode of transportation and distribution. He was used as a branding signal because he created powerful associations of security in people’s minds.jpg . They had used notable and respective person such was the actor Karl Malden who played a detective on a show called “The Streets of San Francisco”. The slogan which helped this idea being widely accepted was “Don’t leave home without it” (P. It showed that it can contribute to the successfulness and enhancement of the core business.28. Being the voice of authority he provided strong images in the consumer’s minds accentuating the idea of protection and security. as well as the rise of the newspapers and magazines as communication channels. it has reached the point to which the business can not exist without the assistance of the two.2008.
Heinz and Coca Cola.28. specialized marketing techniques.Among the first trademarks in the world was one named Bass & company. Therefore. was actually the first trademark in the history of branding. As the mass production developed further so did these brands. the British brewery which claims that their red triangle brand. as well as successful development of the distribution channel. A lot of other companies. achieved their success through production innovations and spectacular promotions. H. 19 .2009.newsday.com/entertainment/tv/blog/coca-cola-logo. In 1960 once the emotional bonding was created and together with it similar brands were perceived as different due to the emotions attached to their image. This was the beginning that marked the so called era of the new phrases. They managed to do this through aggressive promotion. the phrases “brand identity” and “brand personality” were introduced and more and more attention was put into their building.J. such were Procter & Gamble.jpg . the Coca Cola and Quaker Oats. enhanced design. Pepsi and Coca Cola for instance. PICTURE3: COCA COLA LOGO SOURCE:http://weblogs. personal selling. followed the lead of the Bass and company. advertising. From 1940s on manufacturer started recognizing just how big of an impact the consumers had in determining their volume sales. by investing into developing something that can testify and stand for the quality which they represent and the impeccable promise for infallibility they were and still are delivering. as well as increased and improved legal protection. Brands.03. among which the Campbell soups.
me/wp-content/uploads/2008/12/pepsilogos.03. The products and services offered at that time started to take another side.2008. They were tailor made and designed to satisfy the customers’ needs and wants. The fact the Philip Morris purchased Kraft for six times what the company was worth on paper in 1988. In 1980s focus was directed upon the trend of buying the brand instead of the product. As a consequence the corporation standing behind the brand became the brand. point to one thing only and that was just how much the word “brand” started to contribute to the business value. besides the creating of the emotional bond. 29.com/products/phone/philips/philips_logo. Anything that was designed out 20 .03. This emotional relationship led to consumers overtaking the ownerships of the brands. such were brand value and brand equity were established and elaborated.natureterch.fleka. This period was an important milestone in the following history of the brand and the branding process. 28. It evolved in a way that it became the only thing that mattered in establishing the brand.PICTURE4: PEPSI LOGO SOURCE:http://blog.2008. PICTURE5: PHILIPS LOGO SOURCE: http://cln. A decade later during the 1990s the brand is stronger than the physical dimension of the product.jpg. Phrases. Everything has changed and so did the creativity. This tremendous impact started to take a huge swing and all the companies should do was learn how to differentiate and maintain that difference by shaping their products or services according to people’s needs and wants.jpg.
2009.transport.ca/civ1120/etud_h08/EL_KAOUSSI/playboy_logo_s ex.jpg . reliability and any number of other intangibles which have value. by capturing their attention with quality. Philips failed to see that the people don’t actually need this TV. Adamson 2006. friendship. although this was cool. they buy trust.02.04. There was still one thing more that they should develop. 04.scrapetv.2009. And those are some of the core components that built brand. PICTURE6: McDONALDS LOGO SOURCE:http://www. What was most important was that Philips failed to recognize the huge power that the customers began to hold in the decision making process of purchasing something. 6).of this pattern was doomed to failure. Example for this was the Philips flat screen TV with a special light source that projected various colors of ambient light onto the wall behind the TV to add depth to a specific scene (Allen P. These loyal customers buy more than products. In order to have the kind of deep bonding with their loyal customers the only thing that was lacking was 21 . Having a loyal customer base means to have established a great relationship and find a way to satisfy the needs and wants.polymtl.com/News/News%20Pages/Business/images/mcdonalds%20lo go. However this difference was not the only thing that the companies should focus on in order to be successful.jpg . that will be exactly what they want and deliver exactly the same expectation they had.0l. PICTURE7: PLAYBOY LOGO SOURCE:http://www. However. Once established this base all one has to do is maintain it and nurture it.
This creation of signs and names or even phrases continues to capture the attention of hundreds of people who are searching for the best offer in the marketplace. PICTURE8: DeBEERS LOGO SOURCE: http://edevangelista. In this time the only most important thing was to learn how to emboss a personality in what one sells.com/debeers/debeers_logo. California and was named after the Greek Goddess of victory. 12). The idea behind each and every one of them was to find a way how to communicate the right branding signals and with their help to develop competitive advantage. It was invented in the 1948.2009. It is the most suitable example that provides an insight of the tremendous impact that the phrases or words have on their customers. “the bunny” began to emboss in people’s minds. by creating awareness in the human mind. We all know the phrase “Diamonds are forever”. in the simplest way possible which was focusing on the simplicity of the brand idea and thus bringing it into effectiveness. Another example of successful slogans is Nike. This 22 . “the golden arches” (McDonalds). This slogan remains one of the most successful and the most used one in the history of branding. when the De Beers Group wanted to add more emotion and symbolic meaning to the purchase of the diamond jewelry. not burdening the consumers with facts and figures. Soon afterwards signs such were “the swoosh” (Nike). generating more than $25 billion per year in the United States only (Kevin Lane Keller 2008. This was where the highest level of achievement in the world of branding was established. This slogan was so powerful that it soon became one of the most recognized slogans in advertising and helped the further development of the diamond industry.the creating and developing of some phrase which will be instantly recognizable. creating associations and linkages which strengthened the perception constituted towards the product or services. with its tagline “Just do it”.01.04. It’s a company that operates in the field of sportswear and sports equipment. Its famous tagline was created in 1988 for an ad campaign by Dan Wieden.jpg . The company Nike was established in 1964 in Santa Monica.
he was voted and according to researchers today his name is one of the best known brand names.04.cellphonemessagesender.04. than to the tales of political Gods.2009. something that reminded them what faith really means. The timing.2009.com/blog/wp-content/uploads/2008/11/nikelogo. the emotional pack cannot be rebind.slogan was chosen to be one of the top five slogans in the 20th century and helped Nike to expand in more countries by putting out more and more products.02. PICTURE9: NIKE LOGO SOURCE:http://www. Because of him being different and unique. or can they actually find their way back to the top? The answer is simple.com/brandcurve/files/2007/07/logos. The disappointment incurred is just too much to 23 . These mental associations that he created in the people’s minds made him the most powerful man in the world today. the promises made.03. (Erwin 2008) PICTURE10: OBAMA AS BRAND SOURCE: http://www. The hope and faith that Obama brought to the world. infused in people something long forgotten.jpg . gave the people something to believe in. But what happens to those brands which can not deliver the promise they had made? Do they simply fail in the attempt to bring more customers to the table and are doomed forever.gif . since his story is closer to mortals. Similar to this “Yes we can” phrase embroidered in the Obama’s speech became something that the people recognize and use daily. Once broken. the speeches delivered. long gone. it made people optimistic in a time when everything seemed to fall.bizzia. A lot of people identify with him.
The trust was broken and the people felt that they had been betrayed. They developed an ad campaign that featured a white-haired grandfather.04.bizzia. This happened with the Country Time lemonade.02. The previously elaborated brief history of branding emphasizes the needs from which the branding originated. The Minute Maid lemonade campaign was an ad which stated that the Minute Maid was made from the juice of twenty lemons.Strongest brands PICTURE11: STRONGEST BRANDS (P. This marked the end of the production of the old-fashioned lemonade 2006. hoping that this time their feeling will not be hurt. Whether they are to identify the source or ownership. Adamson SOURCE: http://www.jpg .42). 2.com/brandcurve/files/2007/07/logos. This statement ruined the relationship between the customers and the company which produced the lemonade. Each and every one of them is eligible for creating on added value to the core product or service. Everything was going smooth up until the moment when new lemonade emerged with a shocking statistics. 24 .bear. This campaign formed strong relationships with the customers. to insure honesty.2009. to hold producers responsible. each and every one contributes equally to the complicated process of branding. The promise which they delivered was that this lemonade had a taste of an old fashioned one. to provide quality assurance.3. Wyler’s was made from the juice of two lemons and Country Time was made from the juice of no lemons. sitting on a porch on a summer day with ice-cold lemonade in hands. or to create emotional bonding. to differentiate. so the customers move on with the new hottest promise on the market. bringing back the memories once tasted.
They had a dream. By adding emotions in the mix it makes it extremely seductive and addictive. the conclusion is quite different of what people claim to be. These brands offer the customers benefits of great magnitude. And these. However what they do have in common is the core they all share. the vision and the dream in various forms infused in the heart of the one who builds their system of added values and core competences. They are developing a dream. emotionality. So I couldn’t help but wonder what do all the celebrities. fears and the different emotions clouding the people’s minds. according to me are the components which are contributing to the constitution of a strong brand. something that made them so powerful. Something which is same for everyone and yet different to the extent that makes them unique and lifts them on the pedestal as winners. a fantasy world in which every human wants to take part. They create magical place in which the consumers are active participants. The strong brands are unique and always stand behind the promises which they make. which means that they are internally and externally consistent. If this becomes permanent practice than the brand developer has a winner. Yes. hopes. because the emotional bonding is too strong and won’t let them. best brands. and have embedded integrity. which are different in each case. so the buyers will develop loyalty and will never want to leave or relinquish.They say dreaming can get you nowhere. Starting with Martin Luther King and ending with Bill Gates. yet there are so many outstanding examples which prove just about the opposite. the pillar of their own existence and triumph. It all starts with developing the vision. by creating images that will capture the costumers’ attention. In that way the creators of the brands are developing something more than a product. Their existence is merely based on deeply fulfilling the human needs in unique and superior ways (VanAuken 2006). They create pieces of art which are not only beautiful but can relate to the needs and wants of the purchasers. 25 . and successful companies have in common? The answer is lying hidden under the layers of their own success. a vision that made them the most powerful and well-known people in the history of the world. by bringing back the lovable memories. benefits such as functionality. and self expressiveness. by creating something that can relate to the values. They are authentic. experience.
It’s an index from 1 to 10 where 10 indicate the brands with the highest short term growth potential. 1 www. The brand momentum represents the expected growth of the brand in short term period. BrandZ which is the largest repository of brand equity data has done a research of the top 100 most powerful brands in 2008. product development and promotional efforts. defined as the sum of all earnings that a brand is expected to generate. They have been evaluated according to their brand value. a carefully monitored price gap with competitors and aggressive packaging. Its ingredients for success include the sweet tasting product.com 26 . 1).An example of strong brand is the Heinz Ketchup. The brand value represents the financial value of the brand. brand contribution and brand momentum. Its calculation is shown in Table1. According to this. It is measured on a scale from 1 to 5. 5 being the strongest brand contribution.heinzketchup. 1 The strength of the brand is valued upon two things: consumer sentiment and the company’s ability to translate that sentiment into shareholder value (Seddon 2008. The brand contribution is the degree to which brand equity plays a role in generating earnings.
Table 1: Calculating the brand value (The 100 most powerful brands: BrandZ top100 brand ranking) SOURCE: Brown 2009. there are the results of the research of the first thirty 27 . In the following table.
Since the research was done according to three components. 28 .Table 2: The 30 most powerful brands in 2008 according to their brand SOURCE: Brown 2009. I will also include the table which positions the brands regarding their brand contribution and brand momentum.
but with the same brand contribution as Louis Vuitton. The marketing team knows exactly how to portrait an image of the products they have and attach to it a dose of emotions to make it immortal in people’s minds. This applies to all of the other brands listed in the table. the degree to which the equity plays a role in generating earnings. Although they are both a part of the fashion industry.Table 3: Top 10 brands with highest brand contribution (The 100 most powerful brands: BrandZ top100 brand ranking) SOURCE: Brown 2009. still my preferences are directed towards Chanel. The fact that I love this fashion brand is due to the design of their clothes and a great part to their commercials. This table shows the rankings according to the brand contribution. They don’t just make clothes. The first place belongs to Louis Vuitton. My personal favorite is Chanel. This means that Louis Vuitton’s outcomes of its marketing effects are very high. a French brand operating on the fashion market. 29 . but they create pieces of art which are worth every single euro spent on them. which is number 7. There is something within it that makes it so special in my eyes.
but they are fulfilling one’s dream of contentment. but will enhance their personal satisfaction and the overall happiness and fulfillment of their customers. which will not only bring them higher revenues and profit margins. Clothes are not only seen as things which are covering you body. It seems like the people’s awareness of the fashion has increased significantly throughout the years. In this way they are not just designing items of clothing.Table 4: Top 10 brands with highest brand momentum (The 100 most powerful brands: BrandZ top100 brand ranking) SOURCE: Brown 2009. These great brand names know this and thus use it as their incentive to keep making dreams. Another interesting brand division is that of the division among the 10 country brands: 30 . As presented in the table above. but a way of expression of the personality which one holds. simply due to the fact that they deliver the promises made. a lot of brands that have great expected growth of the brand in short term are a part of the fashion industry.
2009. stability and openness. gastronomy.PICTURE12: AUSTRALIA AS A BRAND SOURCE: http://adage. pure scenery and mouthwatering gastronomy. Tourists can access a wide range of offerings: adventure. quality of life." 31 .2009.02. business infrastructure.com/globalnews/article?article_id=132398 . Australia "Australia has strong branding. diversity.04. relaxation.04.02. entertainment.com/globalnews/article?article_id=132398 .Canada "Canada is an exceptional country and has all of the assets to be a great brand: natural and urban beauty. 2." PICTURE13: CANADA AS A BRAND SOURCE: http://adage. 1. culture.
com/globalnews/article?article_id=132398 . delivering a large variety of rich and diverse experiences. 3.com/globalnews/article?article_id=132398 . 4.2009.04. the romance of Venice." PICTURE15: ITALY AS A BRAND SOURCE:http://adage.2009. USA "The US continues to be a tourist magnet for its fun spirit and because it is the giant of entertainment and business. Italy "Italy is a country that markets the best of itself: the cradle of gourmet cuisine and art.02." 32 .04. the history of Rome and even the beauty of its men and women.PICTURE14: USA AS A BRAND SOURCE:http://adage.02.
02. Switzerland "Switzerland is established. language.2009.04.com/globalnews/article?article_id=132398 . tradition and culture) and the ability to load its brand with emotion: beauty." 33 . fashion. has successfully developed a clear attractive profile and is consistent in its brand promise and delivery.com/globalnews/article?article_id=132398 . 6. music. 5.PICTURE16: SWITZERLAND AS A BRAND SOURCE:http://adage. France "France has a strong local identity (wine." PICTURE17: FRANCE AS A BRAND SOURCE:http://adage.04.2009.02. quality of life. romance.
com/globalnews/article?article_id=132398 . New Zealand “New Zealand delivers what it promises.04.” 34 . cultural interaction and pristine and pure scenery. safe operation.02. well-being.02.04.2009.UK “The UK is a well thought out and executed brand that effectively utilizes all of the natural and cultural resources of the country.PICTURE18: NEW ZEALAND AS A BRAND SOURCE:http://adage. 7. 8.” PICTURE19: UK AS A BRAND SOURCE:http://adage.com/globalnews/article?article_id=132398 .2009. Its destination branding has used strong emotional effects: quality.
02." PICTURE21: SWEDEN AS A BRAND SOURCE:http://adage.02. 10.PICTURE20: JAPAN AS A BRAND SOURCE:http://adage.com/globalnews/article?article_id=132398 .2009. The diversity. Sweden "Sweden has the charm of Europe but an intriguing sense of mystery and otherness about it. It offers the traveler a variety of adventures and is proving to be a strong destination. culture and quirkiness of Japan — and the lower yen — are a powerful combination.04." 35 .2009. but we've found that traveller expectations are always exceeded by the country. Japan "Japan already has a high brand profile.com/globalnews/article?article_id=132398 .04. 9.
Brand Equity The “brand equity” as a concept arose in 1980s. and ever since than it has become one of the most popular and paramount conceptions in marketing.” “A brand is a name or symbol used to identify the source of a product.” “Brand equity is an intangible asset that depends on associations made by the consumer. MAKING STRONG BRAND 3. However simple it may seems to be it still represents enigma for most of the observers. “Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. Here is how the opinions vary and even though all of them agree about the definition of the “brand equity” yet they disagree when it comes to its measurement.” All of the definitions above are providing different aspects of the term “brand equity”.3. This concept is referred to as brand equity. When developing a new product. Each of these marketing effects contributes something to the brand. What they all have in common is the fact that this concept is composed of marketing effects. the “brand equity” is a kind of an explanation for why different outcomes 36 .” “The term Brand equity is used to describe both the value of the brand and the brand's component values. mostly due to the fact that there are a lot of different opinions surrounding the concept. As a conclusion to the previously said.1. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer.” “Brand Equity is the accumulated value of the brand image or identity in the consumer's mind. branding is an important decision.
channel relationships etc. brand associations to perceived quality and other proprietary brand assets such as patents. trademarks. future purchasing and profits. A series of unsuccessful attempts have been made. name awareness. 51) According to his opinion this set is grouped under five categories which include brand loyalty. therefore emphasizing the difference between the variety of similar products and services that appear on the marketplace. supermarkets and grocery stores. yet helpful. The research was done among 400 British adult grocery buyers and was intended for the examination of the top 9 U. This cognizance enables the products and services to command the higher prices on the market. The “brand voltage” as it was called was actually a measure used to detect the ability to convert the customer awareness into bonding and loyalty. This measurement of the added value spawned for the observers represents the equity of the brand. There’s absolutely no evidence that these categories are related systematically to the brand equity. In 1998 Ambler and Barwise defined the brand equity as “the marketing asset that exists in the customer’s mind and is of continuing value to the brand owner because it influences future purchases by the buyer and the buyer’s social network through word of mouth”. Another attempt has been done by Aaker.K. There is still no common viewpoint to how to measure this added value that the brands give to an ordinary product or services. However it can be also used as a definition for brand. This measure was based upon five indicators: 37 . Some have developed measurements such was the Millward Brown measure. This definition is helpful because it puts an emphasis on the key aspects of consumers. perceived quality. brands are considered to add value to the products and services. who tried to define the brand equity as “a set of assets and liabilities linked to a brand.” (Aaeker 1991. since it doesn’t contain any measure for the brand equity. thus generating significant amounts of profits for those who make them.result from marketing a branded product or service compared to those products and services which are not branded (Lane Keller 2008). Nowadays. There is still one issue that remains up until today. its name and symbol that add value or subtract from the value provided by a product or service to that firm’s customers.
This aspect measures the brand equity regarding how much the brand is worth as an intangible asset. The product level consists of comparing the price of a no name or private label product to an “equivalent” branded product. 3 The firm level is measuring the brand regarding the financial aspect.0 was considered strong and therefore regarded as an indicator of future behavior.wikipedia. Admiration for a brand Affinity to a brand Perceptions of the brand innovation Popularity Price A result of 3.org/wiki/Brand_equity 38 . market leadership. stability and the global reach of the brand. VALUE OF THE FIRM (by the market capitalization) – TANGIBLE ASSETS AND “MEASURABLE” INTANGIBLE ASSETS = RESIDUAL VALUE OF THE FIRM (BRAND EQUITY) According to this calculation one private company measures its brand equity by discounting the projected profits to a present value. the product level and the consumer level. According to this claim there are three levels and those are the firm level. PRICE OF NO NAME PRODUCT – PRICE OF THE BRANDED PRODUCT (equivalent) = 2 3 The article regarding this you will find attached in the appendix http://en. taking the “ceteris paribus” into consideration. 2 Others say that the brand equity is measured according to the level it operates on. It reflects the risk profile. The discounted rate is a subjective rate determined by the Wall Street journal equity specialists. Among the ones who had this kind of result and even bigger were Tesco and Sainsbury.
In the 1980s. immediate recognition and memory of a brand. coffee. Let’s take as an example the Corona beer. high fashion. When one thinks about drinks. During this time the idea of riotous spring-break vacations was developed around the colleges in the U. The popularity of the beer increased when the students returned to the colleges. motorbikes. All of these have discovered a way to make their name more appealing and therefore always recognizable. It measures the BRAND AWARENESS and the BRAND IMAGE. Starbucks. as well as sexual escapades. dirty dancing.04. Harley Davidson. this beer was one of the cheapest beers to be found in Mexico. The stories told usually included 39 .03. wet T-shirt contests. and all the time aired in the media. and the brand recall which is the simple. It was also noticeable because of the distinctive package design and also somewhere along the way someone thought of a mix with a lime. Among the brands which have established this kind of level of brand equity are Coca Cola.S. PICTURE22: CORONA LOGO SOURCE: http://www. This vacations were major gatherings which usually tended to grow into excesses such were the 24/7 drinking. Corona beer. they always pop up in the minds. Disney. Chanel. or entertainment. The striking point for the Corona Beer was its cheapest price due to which it was the most appealing for the students.2009.com/images/beers/corona_20logo.stirnyc. It is consisted out of to parts: the brand recognition which is the consumers' ability to recognize and make associations with a firm's brand image. The BRAND AWARNESS is the realization by a consumer of the existence and availability of a particular product.jpg .BRAND EQUITY The consumer level is measured by mapping the mind of consumers to find out what associations are created with the brand.
04.html. accessibility and emotional connection) which are working with joined forces in order to create that added value within the brand. value. still the fact remains that they had established huge brand recognition and brand recall in very short period of time.2009.brandingstrategyinsider.the mentioning of the Corona as well. Although later on the Corona producers had some difficulties due to their lack of advertising and promotion. Another measurement is the so called “Blake project”. and it was only thanks to the students with whom a strong emotional bond was made (Holt 2004. Their success story was delivered completely by the word of mouth. relevant differentiation.com/2007/02/exploring_brand. This was one story where a strong brand recognition and brand recall were created.16). all with one goal in mind: TO ENHANCE THE INTENSITY IN THE CONSUMERS’ DECISION. 40 . Distributions followed the students as they entered into their professional lives and soon the Corona Beer wasn’t just a beverage that was associated with students’ holidays.4 In continuation there is a picture of the “Blake project” graph Graph 1: “BLAKE PROJECT” SOURCE:http://www. but it became the drink of choice among young professionals as well (Holt 2004). According to it the consumers’ attention is directed towards five components (awareness. 03.
41 .The other brand source is the creation of the brand image. word of mouth (which tends to work the best). Or let’s take peanuts for example. These linkages can be developed in number of ways. However the experts stay optimist thinking that all of this systematic collections and analysis may at the end bring enlightenment. However. the people involved in the company. as well as the assumptions consumers make when looking at the logo. Some used “hard” measures such were the market share and the relative price and others used “soft” measures such as liking and perceived quality. for someone who is allergic to them a brand specialized for peanuts will always produce depressing memories and emotions. For someone who loves peanuts. there still remains one question that hasn’t been answered up until now and that is whether there is such thing as negative equity. if we take as an example the “Democrat” brand in the politics. the country of production. We all know that a positive brand is a result of effective marketing through advertising. Except for the marketing activities they can also be formed as a result of prior experience. and a lot of other different things that can contribute significantly to the establishment of positive or negative thoughts surrounding the brand image (Keller 2008). because in this case is both yes and no. Whether the perception of the brand is superior or just average depends on how strong these linkages are. Ever since the appearance of this phenomenon people whose domain was in the branding field started to develop the concept of the brand equity. to a Republican this brand will be always associated with negativity and therefore generate negative brand equity. These were the elements which the brand equity is composed of. On the other side. constructive associations. However. public relations and promotion. good luck with that one is all I can add. All these people have failed in the attempt to explain this term and find a suitable measurement formula which will incorporate all of the necessary elements. The brand image represents the sum of all the unique associations constructed in the minds of the consumers. Well. The answer is not that simple as it may seem. they will always generate strong. Still the fact remains that there is such thing which creates value for a given product or service. the slogan.
According to him the CBBE occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong. The four steps of brand building A significant step forward in the building and measuring of the brand equity is the Keller model. 05. In continuation you will find enclosed the pyramid for the customers’ based brand equity model. It was made by Kevin Keller in 1993 and ever since than has been used as a trustworthy and highly appreciated concept in the branding theory mainly due to its power to define and structure the steps for achieving elevated position for the brand within a company.com/14121980/images/006/004.04.2. favorable and unique brand associations in his/her memory (Keller 2003. Graph 2: Keller’s customers’ based brand equity model SOURCE: http://buildingstrongbrands. because it approaches the brand equity from the customer’s perspective.2009. If one takes the “rational route” than the steps leading the brand creator towards the peak will be: Brand identity Brand meaning Brand response 42 .jpg. What Kevin Keller did was create and develop a model which determined what exactly makes a brand strong and how one should build it.67).3. The model is called THE CUSTOMER BASED BRAND EQUITY MODEL (CBBE).
Although the salience of the brand is the essential rule for creating the successfulness of the brand still it isn’t sufficient. relaxation). People know this brand very well because of the fact that they have established a perfect. 2003). In order for this question to be answered the “brand meaning” must be established by creating strong linkages of brand associations with certain properties (Keller. Its name is the first that pops up in the minds of the people who seek this kind of amusement and all of those who want to find a place where the level of entertainment is derived to maximum. The first step is answering the question “Who are you”. Brand relationships Starting with these steps. 43 . By creating. This step is called the brand salience due to the fact that its pillars are founded on the basis of the outstanding elements that are distinguishing one brand from another. unmistakable category identification (entertainment park) and recognition of which needs are satisfied (the need for having fun. which is the most basic in determining and identifying the brand and the associations made with a specific product or service class or need (Keller. developing and nurturing the brand depth (influences the likelihood that a brand comes to mind) and brand breadth (describes the different types of situations in which the brand might come to mind) the brand creators find a successful way to establish a highly salient brand. In this section there are two brand building blocks. These four steps consist of six brand building blocks and in order for the brand to be highly successful it needs to reach the pinnacle of the pyramid where the relationships with the customers are already built with mutual respect and common language. That’s why the second step is created which answers the question “What are you”. enjoyment. Let’s take as an example the brand Disney. The key elements on which this step is build upon are the category identification and which needs are satisfied. Consequently. 2001). this model represents a “branding ladder” with each step dependent on achieving the previous one (Keller 2001). the brand performance and the brand imagery. marketers need to convince consumers that there are differences between brands and thus create brand equity.
as well as increasing the strength of the product or service offered (Keller 2008. heritage and experiences. as well as putting an emphasis on the extent of the brand which satisfies utilitarian. The third step emphasizes the proper customer responses to the brand identification and meaning (Keller. the personality and values and the history. The other component which inflicts the responses of the people is the brand feeling. to be more precise it states the responses which are coming from the customers’ identification with a certain brand. The types of judgment made by the consumers are dependent on the brand quality. by making it something that stands out in the human minds. derived from the strength of the brand as well as the relationships incorporated in its essential 44 . According to this the brand imagery reflects the extrinsic properties of the product or service. As far as the brand imagery goes. and thus evoke personal satisfaction. credibility. It satisfies the customers’ functional needs for relaxing by offering variety of amusing ways to increase the level of their enjoyment and entertainment. Disney has managed to create suitable history enriched by the customers’ personal experiences all of these wrapped in a package that says entertainment only. aesthetic and economic customer needs and wants in the product or service category. The brand judgment is the sum of all the customer’s personal opinions and evaluations derived from the symbiosis of different brand performances and imagery associations.67). It is divided among two dimensions: the brand judgment and the brand feelings. Disney has established perfect brand performance and brand imagery. with a ribbon which conveys a message that screams out loud about leaving all the worries outside the park.The brand performance basically points out that the product itself is in the heart of the brand equity. 2008). This step is the result of the people’s opinion. consideration. It describes how well the product or the service meets the customers’ more functional needs. These dimensions are the actual attributes and benefits which contribute to the significance of the brand. It creates dimensions which inflict prominent difference to the brand. the purchase and usage situations. making the scenery more appealing and concentrated towards the intangible aspects of the brand such as the user profiles. 2003). The brand imagery refers to the way people think about a brand abstractly. as well as superiority (Keller.
At the end all that matters is how positive the brands are (Keller . In order for it to be established it requires strong personal attachment. The forth step in the CBBE is asking the question “What about you and me”. as well as fierce intensity (the depth of the psychological bond) and high level of activity engendered by the loyalty (the repeat purchase rates). When combined together these categories are shaping the intensity (measures the strength of the attitudinal attachment and sense of community) and the activity of the brand (behavioral loyalty and active engagement). thus making statements such as “love” or “little pleasure”. Here relationships between the customers themselves are formed. The creating of a deeper attitudinal attachment through marketing programs can contribute to the actual enhancement of the brand loyalty. The forth one is the active engagement where the strongest affirmation of the brand is established. The focus is the level of identification that the customer has with the brand and the extent to which the relationships are evolved. Here brand resonance is all that matters. The third category is the sense of community. A stronger sense of community among loyal users can engender favorable brand attitudes and intentions. 2008). There are four categories all of which are extremely important for the establishment of this step. The first one is the behavioral loyalty which clarifies questions such as how often the customers are making their purchase and how much do they often purchase. (Keller. Examples of this category are joining clubs which focus is the brand itself. the brand creators always work on changing them into positive ones. taking participations in chat rooms etc. so they can act as brand evangelist and ambassadors. visiting brand-related web sites. The second one is the attitudinal attachment which is the customer’ going beyond viewing the brand as something special. The brand feelings evoked can be mild or tense and positive or negative. and the extent to which they had been developed. This term illuminates the type of relationships formed. This is done through the transformational advertising which is designed to change consumers’ perceptions of the actual usage experience with the product. 2008). receiving updates. Here the relationships formed with the consumers are all that is relevant. 45 .being. Whenever there are negative feelings generated.
Strong brands have clarity which is derived from both the head and the mind.com . The answer is that they can not. so emotional concerns are developed in order to fulfill these needs. After all they shaped the marketing activities accordingly to what people need and want. Accordingly. Therefore it is usually said that the length of time to build a brand is directly proportional to the amount of time it takes to create sufficient awareness and understanding. Thus it may not come as a surprise that firmly held and felt beliefs and attitudes about a certain brand are the foundation to brand equity. even though usually they create an illusion where the customer often thinks that he needs something. which means that the loyalty and the resonance are build on the foundation of the “emotional route” and “rational route” of the CBBE pyramid.Graph 3: Keller’s model for Calvin Klein’s brand SOURCE: www.2009. In conclusion. the ultimate value of the brand depends on the customers decisions only. rather than he wants that something. but the question is whether they can satisfy the emotional or psychological needs as well. 46 .pvh.05. Even though the marketers are often seen as the ones who are responsible for the value still they have to oblige the terms imposed by the customers under which they create the power of the brand. rational concerns can only satisfy what one calls utilitarian needs.04.
The fruits from the harvest amount to: Those creating a financial value for the company (both for the growth and for profitability performance of the company) Less vulnerability to competitive marketing activities Creating greater customer loyalty Enhanced the effectiveness of the marketing communications Greater licensing opportunities. but they are complex things which make the world an interesting place to operate in. These benefits are essentials not just for creating stronger brand but for the overall performance of the company as a whole. which bring with them higher profit and greater legal protection. as well as improvement in the image and awareness of the brand Increased number of new customers Contribute to the increase of the brand equity of the company All of these above contain equal importance in expanding of the company and the brand. simply to make their lives a little bit less stressful. That’s why they rely on the experiences of their friends and they believe in the power of the brand. knowing that having something to rely on is extremely helpful in the ever moving fast society. and people want to believe in those created myths. The benefits of a strong brand There are a lot of advantages that can arise from having and maintaining a strong brand.3. So the advantages provided by strengthening the brand are not only ordinary things that can contribute to the company’s performance. at the same time making it difficult for new companies to penetrate the market It’s funny how a little bit of innovation can create a world in which everything is possible. 47 . as well as ease the decisions making processes they are faced with every single day. The loyalty developed towards the brand enhances the likelihood for the increased demand for the company’s products or services.3. because deep inside they know that they make them better persons.
uniqueness. These components determine whether the brand will establish positive associations or negative ones. likeability. 48 . and brand confidence are beneath the surface. communication. the brand was perceived as and compared to the iceberg. As presented in the picture above. and above it are elements such as size. and appeal.4.2009. BRAND ELEMENTS PICTURE23: BRAND AS ICEBERG SOURCE: qualisysindia. Long time ago.com/images/srs1. but somehow hidden and not seen by the wider audience. content. It makes the companies to try and think before they react.gif. It makes them understand that building a strong brand is of great importance when trying to gain power and increase the volume of the sales. ensuring that the meaning of the brand and brand building concept is properly understood and enforced.04. since it has components which are extremely important. The brand loyalty. vividness. 05. This metaphor is still alive today. the components beneath the surface are the ones who actually build the foundation of the brand.
2009. to describing the similarity of the brand with those of the competitors and last.1. There are two types of brand: the ones which are recognized by the consumer and the ones that are not. which leads to the next issue of establishing the core competitors.php . the most important step. Robertson The brand positioning is the essential issue which arises when creating a strong and recognizable brand. the first being the determinacy of the target customers. Graph 4: brand positioning SOURCE: http://www. that is the ones that have established brand unawareness and those that have established brand awareness.4. On the other 49 .si/eng/2_3_brand_pos. Brand positioning “Brand positioning is the heart of marketing strategy.05. It is the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds” Kim R. According to the graph shown above the brands are positioned due to whether the customers have heard of them or not. creating and describing the difference which makes the brand a unique item worthy of possession. The ones that have failed to create any kind of associations in the consumers mind are doomed to collapse. The position that each brand takes will depend on the knowledge gathered by the marketers on four most important topics.04.gfk.
which are the ones who failed to develop a relationship with the customers and therefore are claimed to be irrelevant and not taken into consideration while making the consumption decision (http://www. The map shows the types of brands created when dividing them among their price and quality. The fashion brands.net/business/images/perceptual%20map.04. Bershka and Zara are considered to be bargain brands. Dolce&Gabanna. It divides the brands according to the quality they possess and the prices they have. Than there are the ones with the low quality and high price. Among both of the groups there are three sub-groups. the accepted brands. Louis Vuitton are considered to be premium brands.gfk. GRAPH 5: THE BASIC PERCEPTUAL MAP SOURCE: http://tutor2u.2009 ).gif . In this way the brands are compared to the competing ones on a perceptual map. which are brands commonly used and widely accepted from the consumption crowd. like Chanel.hand the ones that have managed to develop certain images in the consumers’ minds are divided further on recalled brands and recognized brands.2009. 50 . There is another interesting division of the brand positioning.05. and at the end there are the premium brands with both high quality and high price. than neutral brand which are known but don’t have any importance whatsoever in the consumers’ daily life decisions and there are the rejected ones.05.php . According to me it’s a very amusing one.04. they are called the economy brands. followed by the bargain brands which have high quality and low price. Let’s start with the basic ones which have both low quality and low price.si/eng/2_3_brand_pos. Prada. Gucci.
and for some of them the price to be paid is just too costly. Consequently. the emotional modifier and the descriptive modifier. as well as external partners. the promise can not be broken. Disappointment of the customers is one of the outcomes. one should not try to alter it. The brand function describes the purpose of the brand. It is consisted of three dimensions: the brand function.” As it is can be seen in the picture above the pillar of the brand is the brand mantra. which means a chant in a form of a tip that would lead to the fulfillment of what is desired. Once made. Since it is extremely important. for Nike the purpose of the brand is the performance. It is the promise made by those who nurture the very beginning of the simple product.4.2. with a crystal clear picture of what the essential meaning of the brand is. as well as the later stages of its development. and believe it or not it’s the one which is avoided by all means. The general purpose of the phrase is to provide the employees. The descriptive modifier clarifies the purpose of the 51 . The word “mantra” originates from a Sanskrit word. this part should never change. For instance. otherwise there are unlikable outcomes to be faced. Brand mantras and audits The brand mantra The brand audit 1 The brand audit 2 DNA SOURCE: Formitas BBDO Pleon 2008. a short three to five phrase that captures the irrefutable essence or spirit of the brand positioning. It is the core for the essence of the brand. In marketing terms this word is defined as “an articulation of the ‘heart and soul’ of the brand.
This part is called the brand exploratory (Keller 2008). This segment is very important because it summarizes all the essential and significant marketing activities as well as clearly develops the unique approaches towards establishing a strong and different brand from ones already developed on the market. or a high level of perceived quality. When the foundation is firmly set. They are established so that they can create a clarity and deeper knowledge of what the brand is all about. The brand audit is a customer based practice which contributes to the increase of the health of the brand. It is created so that both the company and the consumer understand the sources of the brand equity. This is achieved through the brand audits. the package. as well as the quality and pricing.brand. that is authentic (Keller 2008). For Nike. it makes no difference. For Nike that is athletic. Therefore. as well as create and educe positive associations in the humans’ minds. elaborates the sources of brand equity. And the third is the emotional modifier which puts an emphasis on the benefits provided by the brand. the core is nothing without its attributes. It is consisted out of two parts the brand inventory and the brand exploratory. a successful marketing tool and strategy. The brand inventory provides an insight of how the products and the services sold are marketed and branded. as well as improves the equity. However. The brand audit represents a comprehensive examination of a brand to discover its sources of brand equity. which can develop further and strengthen the brand image. These phrases are important because they are targeting the benefits provided by the brands and the uniqueness derived from the performance of the brand. They can be altered based on the preferences of the consumers. meaning when the mantra (the promise) of the brand is determined than the marketers can elaborate the brand attributes. The other part focuses on the results of the research done in order to better understand the consumers’ sentiment and their thoughts regarding the performance. 52 . Whether it is the design. they are extremely helpful in constructing vivid pictures in the minds of the employees so that they can continue the legacy of the company and enhance the performance.
adaptability and protectability which are significant determinants of the brand image and positioning. This category inflicts the brand to be fun and interesting. The second dimension focuses on the defensive strategy of the marketers for leveraging and maintaining brand equity. For instance the “Code Red” name for one of the Pepsi drinks contributed a lot to its recognition and recall.4. jingle.04. it must contain something that incorporates the general information about the product category as well as its content and specific information about the attributes and the benefits it brings to the table.2009.com/_KF833Bz_TNk/ScME2GV_QRI/AAAAAAAAAGA/bx Wzqad3-Tg/s320/chanel-logo. Brand elements which affect the human perceptions According to Kevin Keller. PICTURE24: CHANEL LOGO SOURCE:http://1. controversial ad. Each of these three is representing the marketer’s offensive strategy and brand equity and puts essential emphasis on the brand awareness and salience.blogspot.bp. poster or even a mascot can aid in the process of creating the memorability in the minds of the consumers. Let’s say the fashion luxury brand Chanel. meaningfulness and likeability. The first dimension is composed out of the first three memorability. It became so recognizable and easy to remember that even a computer virus that infected more than 700 000 computers was named after it. there are six criteria for brand elements which are divided among two dimensions. The meaningfulness must contain elements such as descriptive and persuasive. named after the designer Coco Chanel is a name which bristles with perfection due to the fashion icon’s persuasive and impeccable image. Therefore. The memorability incorporates elements that are extremely helpful in establishing clarity and attracting attention. with well developed visual and verbal imagery and all of this 53 . The last category in this first dimension is the likeability.jpg . slogan. An easy recognizable brand name. It is consisted out of transferability.4.07.
The likability helps each and every time when the possible benefits of the future are a little bit blurred. Now. Pretty funny.jpg . It meant “Pepsi Bring Your Ancestors Back from the Grave”. or Amazon brand.04.wrapped with aesthetically pleased design.org. The term transferability relates to brand extensions as well as enlarging the brand on global level. so the creativity must take its place instead. These names don’t put boundaries for the companies. so that they can enlarge in every category they want. The vaguer the name is the more transferable it is on foreign markets. There are a lot of funny examples of transferability mistakes. Whenever in this situation. so they are extremely helpful when dealing with the maintenance of the brand equity. The other set of brand elements as Keller explained are relevant when the company is facing with competitors. imagine putting that on your hair. 54 . And my personal favorite is when a hair product company. the brand creators must concentrate on developing the intangible characteristics of the brand so that they can increase the awareness and improve the overall performance of the brand.nbcf.07. The first one is the transferability which measures the extent to which the brand elements add to the brand equity of new products for the brand.2009. Clariol introduced the “Mist Stick” a curling hair iron in Germany. For instance. when Coors translated its slogan “Turn it loose” into Spanish it sounded like “Suffer from diarrhea”.au/content/upload/images/corp/partners/hallmark/Hallmarkplum-and-gold-logo. isn’t it? Another example of such hilarious brand mishap is when Pepsi translated its slogan in Chinese market “Pepsi Brings Back To Life”. The word mist was a German slang for manure. PICTURE25: HALLMARK LOGO SOURCE:http://www. Let’s say Hallmark for instance.
endured in those times when the company started to operate. The third component of the second dimension is the protectability. because than the uniqueness which the brand possesses will vanish completely.04. registering them with the appropriate legal bodies and defending them against any competitive intruders. bringing back the memories. which is one of the most important segments when building and maintaining strong brand equity. 55 . or ads are usually updated so that they can relate to the current times with a little flick that reminds of the old times as well. Accordingly. It refers to the legally protected brand elements on an international level.PICTURE26: AMAZON LOGO SOURCE:http://www. Let’s take for example the Louis Vuitton brand.watsonwyatt. the package. Its purses are copied everywhere in the world and sold for insignificant price. Although it might sound as an easy solution to the problems connected to creating counterfeits. the name. or any other attribute of the brand should be developed so that it can not be easily copied. it is becoming more and more difficult because it has taken a great swing and strives for globalization.2009.gif .08. The logos and the characters on the posters.com/images/database_uploads/13027/figure1_porters. a value which doesn’t correspond to the perfection they are creating. The adaptability targets the issues that arise regarding the flexibility over time as well as the updating process.
the product must at least meet the customers’ expectations and if the brand tends to develop strength further on than it must surpass those expectations. After that I will show how the customers perceive and choose brands. the process benefits and the relationship benefits. It is the very core of the brand. In order for a value of a brand to be established. by improving the functional benefits. Michael Porter developed a model called the value chain according to which the level of the customers’ 56 . According to the consumers the perceived quality is how they see the brand regarding the quality and superiority surrounding it. 5. From the customers perspective the perceived quality and value of the product are what shape their opinion about the brand. What makes the brand successful is the product.5. consumers usually combine the quality performance with the cost perception. its heart and its impulse. Thus. Product strategy As the Bible says and first there was God. which doesn’t necessarily refer to monetary cost but also include opportunity costs such as time and energy spent. in order for a brand to be victorious. As the core of my thesis this part will be filled with creative solutions which all bring with them a dose of value to the products and services. in marketing terms the God is the product. Therefore. Therefore. The improvements through the years made on certain products have made it difficult to surpass the customers’ expectations. HOW THE BRAND AFFECTS THE VALUE OF THE PRODUCT? This chapter is the most important. such as the speed. the durability and serviceability are all upgraded. If the performance of the product is increased. There are few segments which help in the enhancement of the perceived quality and value. which stands as a pillar for the value. the conformance quality is improved. the promptness etc. the reliability. since here I will prove my thesis by examining different brand strategies which have great effects on the value of the product. However. accuracy. and if the style and the design are enhanced than one can brag about its brand having high perceived quality and value. a brand can easily find its way one step higher on the latter of success. the features are better shaped. It has other dimensions as well. the performance level of the product doesn’t necessarily always depend only on the product quality.1.
human resources management. and services) . marketing and sales.2009.04.jacksonmshog. 57 .gif .com/images/database_uploads/13027/figure1_porters. operations.com/chapter2496/Images/HarleyDavidsonLogo. as well as on the four support activities which occur through the primary activities (firm infrastructure.gif .08. Graph 6: Porter’s value chain SOURCE:http://www.perceived value depends on the primary value creating activities (inbound logistics.10. PICTURE27: HARLEY DAVIDSON LOGO SOURCE:http://www.04.watsonwyatt. outbound logistics. than the brand has created a substantial value.2009. and procurement). technology development. If the costs are reduced and the performance improved in any of these activities.
it is natural for one to think that the concept is applied to products only.From the marketers’ point of view creating relationship marketing is what creates the value. “Customization addresses the need for individuality” By an unknown analyst Creating this process the customers can clearly distinguish themselves from others. You can win more of a customer’s purchasing rate. the concept can be applied to services as well. “Loyalty programs reduce defection rates and increase retention. It is based on the premise that current customers are the key to log term success. All of this being said. formulating and managing communication programs. However. Another example is that of Harley Davidson which customizes its motorcycles according to its customers’ wants.” 58 . and hosting special customer events or programs. They are reminding the businesses of the importance of building relationships with customers and points out to the crucial need to balance the advertising activities. These preferences nurture the dreams that customers’ have and according to that it increases the level of the perceived quality of the brand. usually in the banks or travel agencies. According to this they can add to the product they purchase their personality and this is what they are appreciating the most. The after-marketing activities are just as important as the marketing activities. One of the segments here is the mass customization which is based on the customers’ preferences assembled in a product. They can tailor their services accordingly to what people want. An instance of this mass customization is that of Dell Company which is creating built-to-order computers. To them it feels like they are treated specially. Among some of these aftermarketing activities are the conducted customer surveys. The “second moment of truth” as it is called the result from the actual experience is the most powerful and strongest association that a brand can make with its customers.
2. so that it can operate with a profit.gif . discounts. it is only natural that the consumers’ perception of value must exceed the cost of the company of making and selling the product. since they can not stay static. It also gives a card which enables the customer to purchase more and more.PICTURE28: VICTORIA’S SECRET LOGO SOURCE:http://callitout. These programs are often created through the establishment of different mixture of newsletters. For instance Victoria’s secret offers discounts to each customer that has made a prior purchase on a regular basis.10. For both terms to be satisfied. Another segment which relates to the marketers is the creating of the loyalty or frequency programs.” By one GM executive The range of the acceptable prices is called the price bands. They must listen to their loyal customers’ suggestions and complaints. That being said. They are obliged to change the performances.04.com/quotes/wp-content/uploads/2008/03/victorias-secret-logo. than the people’s perception of it is that the brand conveys a massage which says that it contains a great quality. Pricing strategy These strategies relate to the price perception of the people regarding the value of the product and the different pricing strategies which might be used to create brand equity. They recognize a really good value when they see one and the really appreciate transparent prices. In order for consumers to buy the offered product or service the performances and advantages attached must exceed their expectations. The perceptions of the consumers are shaped according to the price of the brand.2009. 5. marketers must find a way to learn about the consumers’ perceptions regarding 59 . If the brand is tagged with a price label that says expensive. due to the fact that the customer is the member of the club. “The customer is smart. as well as engage people in the programs. Another thing which affects the value is how frequently the brand is discounted.
gif.2009. Accordingly. If they underestimate the power of the customers. there are two pricing strategies which are the most relevant to this issue.cosmetico. The first one is the value pricing. PICTURE29: TACO BELL LOGO SOURCE:http://statenislandnyhomes. Marlboro. 60 . but if they go too far than they may loose the loyalty developed with their customers.ro/images/800px-Nivea_logo.2009. This kind of consequence experienced the gigantic company Philip Morris with its cigarette brand. and may find a pretty damaging consequence as a result. Its objectives refer to establishing the right mix of product excellence. the strong brands can command price premiums.the price. 10. in order to gain competitive advantage. as well as the prices verified by the competitors. The chain of Mexican restaurants “Taco Bell” did this so that it can lower prices for many items which appeared on their menu to under $1. and for the market leaders to even establish price premiums (Keller 2008). As a conclusion. The most important determinants while setting the price of the product are the costs derived from making and selling them.04. product costs and the product prices so that the customers’ needs and wants are put on the first place. as well as the profit goals of the company are being met.04. there is a price to be paid at the end.png .com/Taco_Bell_logo2%5B1%5D. so that the companies can establish a certain price level. PICTURE30: NIVEA LOGO SOURCE: http://www. The price strategy may also be enforced as a result of the reduced operating costs. So in order for the companies to make profits they must make the right product in the right way and sell it at a right price.10.
5. so it is only natural that it increases the prices. having in mind that they pay for something which is fresh and advanced cosmetically. in order for the companies to manage to generate higher profits. The last key to successful performance of the value pricing strategy is to understand how much value consumers perceive in the brand and to what extent they will pay a premium. effectiveness or efficiency. as well as product costs and product prices. just like they turn off the light in their homes they can also turn off the light future of the product. That is why this is the most important part for the marketers when launching a product. the perceptions of the consumers are shaped according to the benefits offered by the promoted product. An example of this can be Nivea. However this reduction cannot be on the basis of lower quality. the consumers are very cunning people and if there is something wrong with a certain product it doesn’t take them much so that they can exchange it with other. This can be done by directly asking the customers to propose their insight in the determination of the prices (Keller 2008). This enables the people to be more comfortable with the higher prices.This strategy incorporates in it the product design and the product delivery segment. The other part of the value-pricing strategy is the lowering of the costs as much as possible. As said before. As a conclusion. Channel strategy “Marketing strategy is the sets of interdependent organizations involved in the process of making a product or service available for use or consumption” By Kotler and Keller in Marketing Management 61 . Accordingly. The company always strives for introducing new or improved added value products.3. A great starting point in determining the price is to estimate the perceived value adjusted by cost and competitive prices. The worth is due to the added value which the product must possess so that it can conduct the price on the marketplace. It’s that easy for them. the consumers are willing to pay premium prices when they are a hundred percent sure that they really are worth it. since the products are fresh. since they are the only things for which the customer is ready to pay more.
style. and on the other side Acer and Hewlet Packard. but what remains unaltered is the fact that they are selling directly from the company to the prospective customers. since they have established the most direct contact with the potential customers and existing ones. the channel strategies have embedded in themselves the design and the management of the intermediaries. design. there is a disadvantage. There are many types of indirect channels and here are some of them. The direct channels offer variety of selling alternatives. The third part is the cooperative advertising. However. due to the fact that the store might get more attention than the brand itself. The pull strategy on the other hand is employed by the manufacturers who are obliged by the customers’ demand or preferences towards some brand. They all make the same product with small alterations which can be of great importance. which help to conduct a business. phone. features etc. 62 . as almost everywhere. The image intended to be shown may alter and at the end the result may be completely opposite to the one wanted to be achieved. Panasonic. In this way they have greater chance in affecting the value of the brand equity. However.Accordingly. The push strategy refers to pushing the product through the distribution channel due to the fact that the manufacturer wants to reach the customer. Examples of this are Sony. Here the greatest part is played by the branded variants which are items created by the manufacturers for entering changes in color. The companies are usually using these options of personal selling when dealing with either high information need or high product customatization. (Keller 2008). the most used form is the retail form. The first one is the push and pull strategy. The indirect channels are consisted out of a number of different types of intermediaries. but all of them have the personal contacts as their core. The other one is the retail segmentation. Here a portion of the advertising is paid by the manufacturer due to the retailers’ efforts for promotion. The creators of the brand may run on thin ice. in person visits. They are conducted either by mail. There are two most important channel strategies: the direct channels and the indirect channels. e mail.
2009. The first one is creating company owned stores. as well as Hallmark and Nike.jpeg . One of them is that the retailers lack skills. so at the end their shops were sold to The Children’s Place. As for the indirect channels here too the possibility of various mutant forms exists. The primary reason behind these shops is to emphasize the depth and the breadth of the brand. 63 .22.PICTURE31: DISNEY STORE SOURCE:http://www.22. The advantage lays in the dual benefits provided by gaining brand loyalty due to the retailer’s well known brand image and at the same time the company has a control over the design and implementation of the product presentation. For instance Victoria’s secret company owns each and every one of its shops. From another point of view another issue may arise. As was the case with Disney shops when they struggled to find the right retail formula. such as the potential conflict with existing retail channels and distributors (Keller 2008). The second way of enforcing this direct channel strategy is by creating shops within major department stores. as well as resources and contacts so that they can effectively and efficiently operate as “intermediaries”.com/articles/Hilton/HiltonDisneyStore.04.jpg .com/28039404/20logo_medium. However there are still limitations and consequences surrounding this form.passporter.04.merchantcircle. PICTURE32: HALLMARK STORE SOURCE:http://media.2009.
am/t/oriflame. PICTURE34: AVON LOGO SOURCE:http://media.merchantcircle. anymore. That’s why the companies have found how to make the customers unleashed from that burden by offering to sell and ship their goods wherever they are required.04.PICTURE33: ORIFLAME LOGO SOURCE: http://logotypes. or physical sites in order for the customers to feel appreciated and closer to the company’s agenda of creating an excellence and perfection.22. Some of the examples are Oriflame and Avon. 64 . This is done by selling the products through catalogs. There are companies which are conducting their business for years in this way.png . the web strategies of selling the goods are becoming more and more attractive for all the people around the world.com/28039404/avon%20logo_medium. videos.04. Due to the fact that we live in a world where no one has time for anything.Com.designer. Such companies are Amazon. as well as Victoria Secret and Women’s Secret and in the past few years their number is constantly increasing. The final way is the channel option which arises from the necessity to create greater and more efficient bond with the customers by nurturing their needs to feel special and by incorporating vigorous emotions in their products.2009. First of all they are practical and less time consuming that the actual physical purchase in the stores.jpeg .2009.22. Faced with the age of the Internet. Therefore the number of consumers buying online is drastically increasing. the people need something that will lessen the burden of the spent time in the stores searching for the right and perfect merchandise.
and than again having too few can result with missing the market opportunities. with just one look at the TV. painted by the most skillful people in the industry and wrapped up with a dose of reality. Therefore.4. This is the venue where the magic of the business is conducted. It represents the creative way of conducting a business based on customers’ preferences and tastes in certain category. There are many communication options. Marketing communication options In this craft like any other craft there are artistic strategies which dazzle the customers by completely changing the views of a particular brand. the advertising.PICTURE35: WOMEN’S SECRET LOGO SOURCE:http://www. or one eavesdrop to the radio. among which is my personal favorite. or by just one glance on a billboard. This is a powerful tool which helps marketers to play a little bit with the customers’ minds. 65 .2009.23. due to the fact that having too many channels can lead to conflict between the channel members. Companies do not limit themselves to only one channel. It plays with their heads by projecting beautiful promises.04.larocavillage.com/common/graphics/logos/Womensecret. 5.gif . However. “Advertising is the art of convincing people to spend money they don't have for something they don't need.” By William Rogers The essence of the advertising is exactly this maneuvering the people. retailers must be careful when mixing the strategies. That’s why they say that “Advertising is the art of making whole lies out of half truths”. there is often a risk involved in this mixture. to avoid facing a chaos. They often enforce some kind of mixture of the previously elaborated channel strategies.
the cost of TV ads is very high. the print media. 66 . which enables them to switch the program. PICTURE36: ABSOLUTE AD SOURCE: www. however.2009. and Desperate Housewives. Consequently. and the interactive advertising. Examples of this boosting are the advertising done in the period of 1989-1991 recession.absolute.Various researches have shown that the advertising boosts the sales of a company. With the help of the advertising the volume of the sales has increased. The other issue arising is the proliferation of new TV channels. whenever there is some commercial. There are several options where advertising as a process can be conducted. Since. which is the prime time (Formitas BBDO Pleon 2008).com . as well. from 19 until 22. I can say that the pioneer in the advertising industry is the television set. it is all about grasping the thoughts of the human mind and the mysticism surrounding it. than the consumers will have trouble with grasping the concept of the ad. place advertising. So. during the 2007-2008 cost as much as $400 000 for shows such as Gossip Girl. 1995) Their finding claim that advertising does not just boost the sales. the TV advertising has a tremendous impact on the brand equity. In Slovenia. the most popular television. for the brands such were Bud Light beer and L’Oreal. If the ad is something which is not connected to the product. For instance a 30-second spot on a popular television show. Among them are the television.04. as everything in life. as well as enhancing the brand awareness. On the other hand. is quite difficult to establish some detailed managerial guidelines. (How to turn junk mail into goldmine – or perhaps not. However. the radio. Ever since the TV was invented the advertising began. thus making the companies more profitable. these rates are significantly lower and they vary from 3 500 € to 4500 € for 30-second spot during a hit Slovenian show or during the news (24ur) on Pop TV. due to the fact that it vividly demonstrates the ingredients of the product and emphasizes their consumers’ benefits. but it helps facing the difficult economic times. The economist. the TV advertising has its downsides as well.24.
2009.com 67 .youtube.youtube. by figuring out how to break the clutter to attract the attention of the consumers and at the same time deliver the wanted message. (Keller. The two main print media are the newspapers and the magazines. and all of the information must be presented in a eye5 6 7 http://www. they also don’t are not molesting the customers with unnecessary information.absolute. Despite that they offer high range of customization. since the consumers only glance through the ad. the “1984” Apple commercial and the Catherine Zeta Jones’ Visa commercial5. 6 The art within them just bristles out and captures the consumers’ attention. 2008) PICTURE37: THE MOST FAMOUS ABSOLUTE AD SOURCE: www. The sales for this two brand skyrocketed when they were shown. As shown on the left side the most famous print ad is the Absolute’s print campaign. Web sites are seen as low cost marketing options. consistency and branding. There must be information relevant to customers’ needs and wants.04.com/watch?v=rFs7j5X1Ljs (VISA TV ad) http://www. As was the case with the Chanel No.The challenge in the advertising is arriving at the best creative strategy.5 2005 perfume ad with Nicole Kidman. This means that if the print is not packaged in this way than the ad will not be noticed at all. Designing a web site is not as easy as it seems. still the fact remains that well designed and well executed TV ads can affect sales and profits.com/watch?v=yTO4FHf8MBs (Chanel TV ad) www. as well as it transfers the intended message. Even though there are disadvantages to this concept.com . In order for a brand to have a successful print ad it is necessary for it to create a clarity.24. 7 The print medium is a marketing communication option which provides more passive approach.absolute.
elevators. advertisers can buy spots on garbage cans.8 8 More funny and creative billboards. subways and trains. That’s why there are some options according to which this category is conducted. The purpose of each and every one of them is to capture the consumers’ attention in the most unexpected ways and on the most unexpected places. To make this whole situations a little bit more bizarre. An excellent example of how to create a successful webpage is the Victoriasecret. movies. This category focuses on targeting the people in the places where they shop.2009) The last.gilette. but not least category of advertising is the so called place advertising.blogspot. PICTURE38: THE WEBPAGE OF VICTORIA’S SECRET SOURCE:http://1. restaurants and shopping centers. Billboards are all over the places. airlines. such as billboards and media. airlines. eat. and nowadays they even appear to be on busses. fonts and effective deliverance of the corporate message. The fact that this category is enlarging is due to the common belief of the advertisers that creating such ads in unconventional places can better meet the consumers’ expectation.jpg (24. play. The picture is representing a billboard for the Gillette razors campaign. which is defined as advertising outside the traditional media.bp. www. This is the challenge they must overcome in order for the consumers to visit the page. and work.com/_rsjhJ_kZsI/R1SxdBAWOTI/AAAAAAAACe8/0Ddebm7cI4Y/s1600-R/VS. gasoline pumps.com.catching pages with suitable colors.04. you will find enclosed in the appendix.com 68 .
PICTURE39: GILLETE BILLBOARD
SOURCE: www.gillette.com ,24.04.2009. A recent common practice has emerged and changed completely the movie industry. This practice is called the product placements. Here the companies pay in order for their brands to be used by the people in the movie. An example of such effective product placement is the BMW in the James Bond film “Goldeneye”. This however is not limited only to the big companies, but to the small ones as well, at least those ones who can pay the enormous amount of the product placement. This kind of approach helped them significantly to increase the sales, thus profits as well, and enhance the brand awareness. With other words those who were not known after revealed in successful shows such as Sex and the City, Gossip Girl and Prison Break soon became well known brands, and achieved overnight success. PICTURE40: APPLE COMPUTER
SOURCE: http://www.butterboom.com/wp-content/uploads/jul08/mikimoto2.jpg, 24.4.2009. As shown above, nowadays ads can be present everywhere, and this increases the effect that they have among the people. The fact that the people have little time to notice them contributes to the notion that the marketers must convey certain messages in simple and direct way. Consequently, this outdoor advertising is also called “15 – second sell”. The point of all this is that there will always be ways for creative presenting of the brands in front of the consumers. 69
The other successful marketing option is the sale promotions. It differs from the advertising in a way that it offers incentive to buy, rather than a reason. Carefully designed promotions can help in increasing the brand equity, by providing more information, as well as product experience in that way creating unique and constructive associations. However, these promotions can also decrease the brand equity, by deducting from the brand loyalty and quality perceptions. Therefore for achieving success in the brand building the promotion strategy must reflect the attitudes and behaviors of the consumers. Another form of promotion is the trade promotion, which gives discounts to retailers, distributors and other members included in the sale process. PICTURE41: NASCAR COMPETITION
SOURCE:http://www.biggameexperiences.com/nascar/images/nascar2.jpg ,25.04.2009. Next is the event marketing and sponsorship. The event marketing represents public sponsorship of events or activities related to sports, art, entertainment, or social causes. It has become one of the most used forms of marketing. The industries which are the most involved in the sponsorship are cigarette producers, beer industry, and auto companies, even though nowadays there are companies from different backgrounds. This particular marketing option has become one of the most attractive ones due to the fact that marketers want to identify with the particular target market and lifestyle, as well as to increase the awareness of the company or product name, improve the corporate image, establish experiences and evoke feelings, etc. As for every single option above, this too has its disadvantages which are ranging from the unpredictability of the event to the fact that this unpredictability can not be under the sponsor’s control. On the picture there is shown an example of sponsorship. The floor is painted with the American Airlines logo, which is the sponsor of the NBA league. The other 70
picture is showing a NASCAR competition where all the cars are painted with the sponsor’s logo. PICTURE42: NBA COMPETITION
SOURCE:https://www.ibmilw.com/images/items/AVTSN13896_1_1.JPG ,25.04.2009. Public relations and publicity had gained a lot of attention during the 1983 when the Johnson & Johnson’s product has been successfully handled, after losing most of the brand loyalty, due to the lethal consequences.
The publicity represents a non personal
communications such as press releases, media interviews, press conferences, feature articles, newsletters, photographs, films and tapes, whereas the public relations except for these things may also include annual reports, fund-raising, and membership drives, lobbying, special event management and public affairs. The public relations are the essential part of every enforced brand strategy. Although they are especially handy in times of crises, still in order to contribute to the successfulness they need to be performed on daily basis. PICTURE43: CHEERIOS LOGO
Brand Focus 11, Strategic brand management by Kevin Lane Keller
but to the company’s health as well. Being as mystical as it could be. Philip Morris and others are creating their strategies on the principles of these options. Cheerios. 72 . This is how the created brand can affect the value of the product. They are a valuable asset to the enterprise and the brand as well.These were the marketing options which can contribute to increased and improved overall performance not just to the brand. This means that aspects such as quality. Each one of us is an individual with their own thoughts and feelings. There still remain some commonly believed facts regarding this issues which can be summarized as follows (Randall 1997). as well. promotional efforts are all taken into consideration. However. Pepsi. First of all the people perceive the brand as a whole. On the other hand. That’s why giant companies such as Coca Cola. the human mind is a complex place where confusion is always present. How do consumers perceive and choose brands The truth is that there is no common applicable formula to how the consumers perceive and form opinions about certain brands. which means that every single segment is being analyzed. but a mixture of all of them. since the advantages they offer are of great magnitude and carry with them a lot of success and power. design. and not just when it is established but for creating of the brand name. more and more companies are convinced in the contrary. By successfully understanding the customers’ needs and tailoring the products based on them. The most helpful tools in the process are these marketing options. Ford. A lot of companies enforce them and not just one. They believe that they can influence the people’s behavior by understanding how they make the decisions. once you get that competitive advantage of having a successfully established brand name. Therefore there is no generality when talking about the reflections which are coming out of the human’s mind. price. the value of the product can and will be effectively increased. than you have to work hard on maintaining the loyalty and the image.5. 5. so that consumers can make their final decision.
The second thing is that the perception is based upon selection, which is
determined by information filtered through experiences, beliefs an attitudes formed.
The third segment is that no mater how illogical and stupid based upon no
rationality whatsoever, the consumers’ perception might seem, it is meaningless to argue with it. Usually the reasons for consumers’ perception are not correspondent to suppliers’ expectations.
The forth one, and the most true, according to me is the claim that processes
may not be conscious. The fact that the consumers can produce rational explanations of their thinking does not assure that these justifications can accurately reflect reality. A common example is the research done by De Chernatony and McDonald in 1992 based on beers’ labels (DeChernatony, McDonald 1993). When the labels were removed from the bottle, the consumers’ could not tell which beer they were drinking. However, when the labels were putted back to the bottles the same people that could not tell apart the beers, at this point bragged about the differences that each beer had in taste. As said in the study, when brands showed, the people used the brand names to recall brand images, as well as their perspectives about how the brands tastes.
The last one is that the brand has a personality. This means that the consumers
can actually associate the brand with the characteristics which they can describe. As I said before, there are no valid models for calculation of how the consumers will react to given marketing actions such as particular campaign. Although, most of the marketing experts will say that the conducted researches show a lot about the consumers’ perceptions, there are allot which will tell you that the researches will force answers, but those generated answers may or may not represent consumer’s reality. And here is the catch, there is no way of telling whether they are or they are not. This conducted techniques, can also bring with them issues, one among which is that we as a people believe the results, just because we don’t understand them. We believe in them because they look impressive.
“One wonders how many marketing pipe dreams and wasted resources are generated each year on the basis of such endorsements as, ‘It was gangbusters in the focused group sessions.’” By Weilbacher, 1993 PICTURE44: VIRGIN LOGO
SOURCE:http://www.virginlifecare.co.za/assets/images/AboutVirginLogo.jpg ,24.04.2009. This being said, the market research is reactive, meaning that it only measures past responses and what is hypothetically asked from the respondents. Consequently, some entrepreneurs with power of great magnitude don’t believe in doing market research, but instead rely completely on their instincts and gut feelings. One of them is Richard Branson, the CEO of the Virgin Records and the 236th richest man in the world, according to Forbes magazine. These feelings are what make people like him so successful and powerful. There are still some techniques which might help in determining how the people respond and they are based on psychological practices. The first one is the conducting of the qualitative research which explores how consumers talk about the product field, what concepts and words they use and how they feel about certain product. This is usually done in Japan where the companies are sending their senior executives with a local consultant to spend couple of hours in consumer’s homes in order to ask questions and observe the responses. This kind of research offers a variety of results embellished with suggestions which can help a lot in forming the branding process of the company. Another really helpful technique is the projective technique in which there are exercises that project the consumers’ unconscious feelings about products and brands (Randall 1997). In continuation there are several examples to how they are conducted.
TABLE 5: PROJECTIVE TECHNIQUE
You are at a party, and the brands come through the door. Describe the person each brand would be. If the brand were an animal, what would it be? If this brand were a car, what would it be? Draw a picture (or tell a story) about the brand SOURCE: Randall, 1997. The third technique which might be helpful is the preparatory grid where people are asked to sort the brand into groups and explain what characteristic sets them apart (Randall 1997). After the qualitative research is done the quantitative follows so that one can be confident about what the target market thinks and feels about the brand. Accordingly, marketers can influence the penetration and the frequency of the brand, by persuading the people to buy the product more often than the other competitive products. Therefore the distinguishing brand attributes should be established amongst the core buyers and not the whole market. As an example of these researches is the analysis of car brand perception on Slovene market in 2004, conducted by the advertising agency Formitas BBDO Pleon. They have performed a small sample quality research with determining a clear and accurately defined target group, which covered ten drivers of nine chosen brands plus ten other drivers. It lasted 21 days, with 105 correspondents out of 200. The brands were chosen on the basis of reached market shares in period from 2002 to 2004. There were nine brands, as following, Citroen, Fiat, Ford, Opel, Toyota, Skoda, Peugeot, Volkswagen, and Renault. The perception of these brands is divided among three segments, the first one being the distinctive attributes, the second one represents different values, and the third one portraying the drivers with their pictures accompanied. The test subjects were asked to unite the attributes, values and drivers with suitable car brand. The results should have included the positioning of the brand and individual brand 75
Opel.jpg . The first one is the Fiat brand.2009.uniquebuilders.24.24. high fuel consumption. This means that the brands are strong and stable. The driver image 10 sums to younger population which have limited income abilities. They have shown that when it comes to the ascribed attributes and values the brands Peugeot. PICTURE45: FIAT LOGO SOURCES: http://www. therefore no bright future on the Slovene market. Fiat has no perspective. This brand has the worst reputation among all of them.jpg . based on their attributes. high frequency of troubles. Negative feeling have been generated by the attributes connected to this brand.04. PICTURE46: FORD LOGO SOURCE:http://ceoworld.biz/ceo/wp-content/uploads/2009/02/ford-logo-big. as well as weak technological combination.in/images/fiat-logo. According to the analysis made for the car brand perception. out fashioned design. attributes such as outthrust. values and which drivers generation tends to purchase them. Skoda and Fiat. Renault and Toyota were the ones which elicit the most positive associations.04. Those that tend to generate negative associations are Ford.perception. therefore limited choices when picking the brand of the car. As a result of these negative generated connections to the brand.2009. 76 . each one of the brands had its profile done. As an example I will only mention four of them.
if it wants to be successful on the Slovene market. safety. Comparing to the previous years this brand had lost in perception due to its high price and traditionalism.24. This brand has a bad image. and more convenient for older people than younger ones.2009.2009. Durability. and traditional contribute only more to the fact that this brand must work on its brand image.com/media/2007/08/vw-logo-jpeg. The attributes such as high fuel consumption.04. not enough developed dealers’ network. However.geocities.com/www. Here the rule of the “bad reputation follows” is applied. However.04. PICTURE48: CITROEN LOGO SOURCE:http://www. PICTURE47: VOLKSWAGEN LOGO SOURCE:http://www. The third one is the Volkswagen brand. 77 . due to the perception that it is mainly man car. Strong attributes have been generated by the brand. The drivers’ imagery is one proof more that they need to do something n order to reach the younger population. old.com/MotorCity/5866/citroen_logo3. stability and excellence are just a few of them. as well as expensive car maintenance.24.blogcdn.autoblog. The only positive attribute which have been improved throughout the years was the low fuel consumption. judging by the drivers’ imagery they are mostly preferred by the men and older people. the fact still remains that VW is strong and recognizable brand on the Slovene market. reliability.jpg .The second one is the Ford brand.gif .
Skoda and Fiat are considered to be cheap. and China. in reality things are a little bit shabbier. gentle. due to attributes such as comfortable. as putted by one department store pioneer. a Danish advertiser and researcher. the VW and Toyota are the strongest positioned ones. According to this. you’ll never know whether the responses you get by people will tell you everything you need to know about the potential market. Citroen is and I quote above all pleasant. all of which were smokers. The first map is the perception map of attributes. As far as the perception of personality goes. According to the perception map of values. 78 . followed by Opel and Ford. values.The last one is the Citroen brand. in the research there are perception maps which are based on different criteria. however. The perception of the car refers to its comfort and frolic. In continuation. Germany. He started doing the research concentrated on the people’s “buyology”. For instance. likable. which is the most stable part of population. since it can offer variety of designs targeting the youth people raging from 18 – 40 young. frequent brand recall. romantic. youth. appropriate price. educated. This testifies for the fact that the human brain is a mystery to the marketers. Similarly. and active people. as well as its strong brand image and awareness on the Slovene market. good looking and comfortable. fun. Ford and Opel are considered to be out of date. It was conducted among 2000 volunteers from five countries. UK. I don’t know which half”. sympathetic and young. Citroen and Peugeot are considered to have great shape. VW and Toyota are considered to be technologically advanced. John Wanamaker “Half of my advertising budget is wasted. such as attributes. and good advertising. USA. and Renault. Trouble is. and cute car. This is the reason for the wide recognition and recall of the brand. Japan. This brand is perceived to be mainly a female brand. It divides the car brands among four different segments. In theory these practices work. One of the most advanced and largest neuromarketing (referred to as a marriage between neuroscience and marketing) studies ever made is that by Martin Lindstrom. and personality. Citroen is more family brand.
The “sip” test was a study performed in the 1975. regarding whether or not the warning labels putted on the cigarettes have effect on them. a research discipline which is still in its infancy. Further on. which are small. the neuroscientists can determine which areas are working at a given point of time. and I quote “cigarettes companies seem to come up with innovative ways to kill us” . yet Coca Cola was still keeping the throne. which is symbiosis of science and marketing. According to this. He says. branding and advertising (Lindstrom. but instead they activated the “craving spot” which persuaded the smokers to light up. Pepsi should have been the market leader in the industry. by revealing the hidden truths behind our purchasing habits. as he offers the example of the Marlboro intense cigarettes. Pepsi or no preferences?” The results were the same as the one in 1975. During the fMRI. a machine worth around $4million. As putted in his book. The first part of the study was the simple question “What do you prefer Coke. nowadays. The results showed that not only the warnings failed to have any affect whatsoever on smokers. this study helps find out how our unconscious minds control our behavior. 2008). the most advanced brain-scanning technique. Accordingly.The research was based upon the neuromarketing. What the study of 2003 showed was the reason for this divergence (Lindstrom 2008). Majority of the answers were not surprising. More than 50% of them claimed that they liked the taste of Pepsi better. For the purposes of conducting brain. By tracking this. Before this study was conducted. each one of the participants were asked several questions. The people were trying the both beverages and were asked for their preferences. there have been similar ones from the previous years. the people who were surveyed answered confirming this statement. which can be consumed during brief moments between meetings. high tar cigarettes. One of them was performed in 2003. 79 . and yet the results of the research were pretty shocking as they reveled the truth hidden in the subconscious level of the human mind. scan technique such as fMRI was used. with no deviations whatsoever. by the name “the Pepsi Challenge”. by revising the famous “sip” test for Coca Cola and Pepsi. And that is how the lethal marketing skills began to develop in the world of the cigarettes’ corporations. Martin Lindstrom putted an emphasis on just how insignificant the warnings on the cigarettes are. presentations and phone calls. the portion of the brain being used lights up like a red-hot flash. It represents a functional magnetic resonance imaging.
2008). The reason for this was that during the study two areas of the brain were engaged in a fight between the rational thinking and the emotional one. positive associations connected to the Coke brand made it to overrule the Pepsi brand. there is a mirror neuron. There were other studies conducted as well. So the question remains. and eventually claim triumph. 11 Although it was very hard and exhausting process. The strong. Lindstrom had too troubles with the financial part. according to Lindstrom is pretty clear. faith and religion have enormous impact on the purchasing decision making process. As every successful researcher before him. the subliminal massaging is still taking place today. based on this technique. Yes you’ve read correctly it DOESN”T (Lindstrom. many of the rituals habitually performed are actually manufactured by companies and marketers to attract the consumers to purchase their brands and products. Than. since it compared the technique with “kind of super mind reading device” that messes up with the citizens’ privacy and “mental freedom”. The study performed by Martin Lindstrom differentiated from the previous ones due to the unlimited range of brands. as well as the smell. even though it was banned in the 1957. The results were 75% of the subjects claimed to prefer Coke. as he thinks that by the end of 2012. and that is that sex doesn’t sell. what is next helpful tool for marketing? The answer. Among some of the shocking results found were that the product placement doesn’t work. and the article “Orwellian” in the New York Times Magazine. the touch. which says “I’ll have what he/she has” . He had to find 8 multinational corporations and 2081 volunteers which will support his project. the sight. Another disturbing common myth dragged through years was seriously shaken with the findings. in order to grasp the meaning of the brand in consumers’ minds. the marketers will 11 The article is concluded in the appendix 80 . was not of any substantial help. however they were also based on one particular brand too. still he managed to find them and conduct the research at the end. In continuation. As Lindstrom put it “Emotions are the way in which our brains encode things of value. the taste and the sight. and a brand that engages us emotionally will win every single time”.The second part was to let the test subjects know whether they were sampling Pepsi or Coke before they taste it.
All I can add to that is that we’ll see how it plays out. 81 .completely abandon the quantitative and qualitative research and concentrate on the fMRI instead.
The recognition and recall of that promise gives immortality to that product or service. In this blurred world of values and principles. I have provided a clear image of how the value and the fate of the product depend on the excellence of the brand. infusing power that can convince the customers to believe in those values. so that you can feel safe. Having a well established and simple vision is something which builds the core of the brand and something which stands out in the crowd. Nowadays. but somehow in the branding world is the vision that can take you places. this thesis captures the essence of the brand and its importance for the future performance of a company.6. there’s no one to rely on. I have created a clear mosaic of history. the fact still remains that the successfulness of their execution is what makes them special and at the same time is what shapes the value of the simple brand. and you can achieve heights that are only within the Gods range. 82 . through determining variety of strategies. all the way to establishing tools for achieving increased value of the product. as well as the perceived quality incorporated in the core of the brand. people want to use the sentence “Dreaming can get you nowhere”. From exploring the consumers’ minds. embezzled with the brilliance and unique entities of a product or service. and that’s why they make their purchase based on the confirmation from other people. As I said before. marketing activities or strategies. COCLUSION As I said before. enriched with marketing activities. and not robbed and deprived from the necessities which you eagerly must have. which strives for endless perfection and enhanced satisfaction. the security which one lacks can be provided by the simple deliverance of a promise made by product or service. Whether these strong associations are made based on merits. screaming on the top of the lungs. people are in love with the promise of security and safety. They adore avoiding the risk involved in the decision making process at all costs. recommendation from experts. you’ve never been before. Leading you through the centuries.
the fMRI technique which results are published in 2008 83 . and how our subconscious minds are far more important in the process of deciding what and why we buy. All of these segments give the product and service power to elicit suitable associations. etc) The provided analysis about the brands from Formitas BBDO Pleaon’s archive The introduction of the most effective and efficient way of capturing the human thoughts. recall appropriate images. placement. thus making it more desirable and preferable than an ordinary product with no labels attached. which shattered the way we feel about brands. The proofs are as follows: Success stories of the world’s first brands that emerged. Chanel. Apple. The various evidences provided in my thesis are as firm facts which can only contribute to the acknowledgement that the thesis cannot be shattered. as well as the ones which appeared later on (Bass and company. and variety of others) The explanation of the various models for measuring the brand equity (the Customer Based Brand Equity model and the Blake’s model) The introduction of various strategies for how the value of the product depends on the brand (product. pricing. The revolutionary part was the fMRI technique. as well as create emotional bonding with their customers. Coca Cola. Louis Vuiton.In this thesis I have provided fresh and new information. promotions. Nike. Corona beer. public relations and publicity. DeBeers. channel) The emphasis of the importance of the marketing communication tools (such as advertising. This is the reason why the branding process infuses added values in the product.
Truth and Lies about why we buy. Strategic brand management 3rd International Edition. Keller. Darthmouth: Pearson Education. Brand Simple. 4. 5. Ljubljana: Formitas. Consumers Ranking of Risk Reduction Methods. England: Kogan Page. Branding. Allen P. Buyology. 1971.. 6. 84 . Citroen research 2000. Lindstrom. The 100 most powerful brands: BrandZ top 100 brand ranking.Holt. 3.1.B. Roselius. 2nd edition. Geoffrey. BIBLIOGRAPHY (LITERATURE) 1. England: Palgrave Macmillan. How the brands become icons. England: Broadway Business. Adamson. 8. 2004. USA: Harvard Business School Press. Martin. Journal of Marketing 1971 (35): 17. 2008. Randall. D. 2007. 2. Kevin. Ted. 7. 2000. . England: Milward Brown optimor.7. 2008.
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Article 4: Parade Magazine: How Subliminal Advertising Works……………. Article 1: Tesco losing brand loyalty………………………………………………1 2.. Article6: The Porter’s value chain model…………………………………………14 7.LIST OF APPENDIXES 1.. Article 3: THE SMOKE CLEARS AT MARLBORO…………………………... Article 5: Orwellian Dream Come True: A Badge That Pinpoints You………..3 3..8 5.. Interesting billboards………………………………………………………………16 87 .11 6.4 4. Article 2: The Virgin brand : LETTERS TO THE EDITOR………………….
while Sainsbury's rose to 2. with declining brand loyalty among shoppers. he said.4 in 2004 to 4. They have got to be confident and humble at the same time if they can possibly do that.7 in 2003 to just 1. the global brand director of Millward Brown. Mr Walshe said." 88 .9 last year. A study of consumer attitudes to the top nine UK supermarkets and food retail chains.7. Sainsbury's strategy to build brand equity will help it battle with Asda for the spot as second leading grocery store brand. according to new research. said Tesco was experiencing "the first signs of the downside of dominance". Sainsbury's marketing campaign had laid a solid foundation for long-term success.2 last year. Peter Walshe.0 is considered strong and the reading is regarded as an indicator of future behaviour. it is not keeping customers loyal. In contrast. brand voltage figures for both Waitrose and Sainsbury's have risen above Tesco's in the past couple of years. carried out by brand market research consultancy Millward Brown. "The whole issue of about being dominant and taking over corner shops and being a one-stop-shop is slowly getting into people's conscience.fell sharply from 5.ARTICLE 1 Tesco losing brand loyalty Signs of a consumer backlash against the dominance of Tesco are growing.its ability to convert customer awareness into bonding and loyalty . "Sainsbury's is beginning to turn the corner. A "brand voltage" measure of 3. found that while Tesco remains the most popular brand in its sector. Waitrose rose from 3." The WPP-owned research agency found the supermarket giant's "brand voltage" . The attitude of consumers to Tesco was "you are big and powerful and we don't necessarily like you".
perceptions of brand innovation. monitored the opinions of 400 British adult grocery buyers. it's easier for people to slip off and bond with someone else.4 in 2003 to 0. The study examines five indicators: admiration for a brand. Millward Brown's brand voltage study measures consumer awareness of a brand and how that awareness converts into loyalty or bonding to a brand. which relies primarily on price to bond with consumers. fell from 3.7 last year on the Millward Brown measure. The research. "If the quality of that brand is in decline." Mr Walshe said. part of the Millward Brown BrandZ brand equity study. 89 .Asda. affinity to a brand. popularity and price.
3 brand across the whole population. but Virgin has achieved a huge amount to popularize business acumen in a country that is traditionally anti-business. JUNE 13. Not bad for a business that has grown from an empty loft space above a shoe shop in Oxford Street. London. Our new businesses are ring-fenced from each other and raise their own capital from myself and various partners. Virgin Radio and Virgin Megastores. Interbrand Corporation's recent survey of brands with the most impact in 2001 put us at No. 2002 Regarding the report "Branson ready to tread the IPO path again" (May 27): Having spent my working life building Virgin into a global brand name. 11 across the whole world. I was saddened to read about the achievements of all of our people at Virgin in tones surprisingly negative. lazy or oligopolistic and do not serve consumers well. but instead what we call a "branded venture capital" organization.to 30-year-olds and the No. We have a No. Virgin has evolved into a unique organization.ARTICLE 2 The Virgin brand : LETTERS TO THE EDITO Published: THURSDAY. chairman of the Virgin Group ARTICLE 3 90 . Virgin Atlantic. 1 brand in Britain for 20. Since we started the business in the early 1970s. Virgin Mobile. It is not a faceless corporation or conglomerate. By anyone's standards this model of doing business has led to some remarkable successes. Sir Richard Branson. London. We have had and will continue to have some failures. We look at business sectors around the world and apply the strength of the brand name developed by Virgin Records to sectors that are fat. such as Virgin Records.
It became the biggest marketing story of 1993--a symbol of the vulnerability of big brands in the price-conscious. including a shorter cigarette. And observers also expect Philip Morris. Now. cigarette market. the strategy had cut Philip Morris' domestic tobacco unit's earnings by $2. Marlboro's share of the $47 billion U. value-minded '90s. and sources familiar with the company say that Philip Morris is preparing a methodical offensive to secure the competitive gains it has made. 2. 1994 THE SMOKE CLEARS AT MARLBORO Ralph Lauren. belt buckles. there. Aren't brands supposed to be dead? That was the conventional wisdom in the wake of "Marlboro Friday" last Apr. is staking a claim for Marlboro in the urbancowboy fashion landscape. which cratered at 45. Philip Morris announced it was slashing the price of Marlboros by 40 per pack to stanch the brand's market-share deterioration. dubbed the Marlboro Express. analysts estimate. discreetly stenciled with the Marlboro brand logo. It is working on a series of new products. Sometime this spring. which fell to 20% before Marlboro Friday. But tobacco analysts. Philip Morris USA.S. The campaign is expected to build the company's data base of smokers and turn millions of Americans into walking Marlboro ads. Philip Morris' stock sank 14 points and pulled down the stocks of other consumer-goods companies. Philip Morris executives declined to comment. cowboy hats.3 billion. consultants. But nine months later. Then. which raised its cigarette prices by 4 per pack in November. for time-pressed smokers. will roll out the Marlboro Country Store. 91 . By yearend. it's clear that as a market-share gambit. right? But it's even better for Philip Morris. Whoa. Philip Morris Cos. and leather jackets. Some deal. watch out. a mail-order promotion that will enable smokers to exchange their empty Marlboro packs for Western wear such as boots. the company's $12 billion tobacco division. has crept back up to around 57. The stock. has rebounded to 25%--higher than it has been since 1989 (chart). to continue nudging up prices. the price-cutting maneuver worked. distributors. It is stepping up consumer promotions such as Marlboro Country Store.84 billion. to $2. Philip Morris is embarking on Phase Two. denim shirts.BusinessWeek: January 31.
because he's fighting with less ammo. Philip Morris has considered roll-your-own cigarettes in the U. "Philip Morris raised prices on Marlboro twice a year for 10 years.S.--because loose tobacco and rolling 92 . and take a $457 million charge against earnings. says Black. Largely because of Marlboro Friday. and he expects earnings to start to recover in the second quarter. The $400 million advertising budget is flat. In anticipation of the Clinton Administration's plans to raise excise taxes by up to 75 per pack in 1995." says Marc Cohen. a tobacco analyst at Goldman." says Murray Hillman. In November. president of the Strategy Workshop. Black estimates. a New York consulting firm. and those easy profits were able to mask their marketing inefficiencies. announced plans to eliminate 8% of its work force--roughly 14.1 billion 1994 promotional budget is $500 million lower than last year's total. Marlboro's managers will have proven that they can keep their brand strong--and begin to command premium prices once again--even in an era when consumer loyalty is waning. Campbell as chief executive of Philip Morris USA.If Philip Morris can pull it off. The brand accounted for 60% of Philip Morris USA's sales and 75% of its operating income in 1993. Bernstein & Co. A lot is riding on Marlboro's ability to do more with less. Sachs & Co. Thanks to the earnings drop.000 people--close 40 plants. Morgan's strategy is to win consumers' loyalty with promotions such as Country Store while using new products to respond to the industry's new challenges. ROLL 'EM. He'll have to make those shots count. when price hikes funded seemingly bottomless marketing war chests. Jim Morgan is really calling the shots over there. It's a marked change from the 1980s.3 billion in 1993 from $11 billion in 1992. analysts estimate the parent company's worldwide operating income slipped to $9. But unit volume should be up 10%." says Gary Black. And the pain isn't over: Domestic tobacco's operating income may fall 31% in the first quarter of 1994. Morgan's $1. A strong performance could catapult Morgan into position to succeed William I. Morgan." The architect of the plan is James J. Philip Morris Cos. "But I think we're at a stage where Philip Morris can begin to build its brands again. who took over as senior vice-president for marketing at Philip Morris USA in April after a three-year stint as vice-president for marketing planning at the parent company. a tobacco analyst at Sanford C. "I would not want to gloss over the degree of pain that it has taken to get here. Black says. "From what we hear.
Philip Morris won't comment on the status of Express. general manager at Starkman Distributors in Atlantic City. and ends in February.35. One ad depicts a horse running across the plains. 93 . which began in October. smokers could get a Weber charcoal grill." says the executive. More advertising and promotions are also expected for Virginia Slims at the expense of Basic. says one insider. sent them to Philip Morris. It also has studied selling cigarettes loose in a carton. 1992. for instance. Marlboro isn't the only smoke to benefit from Philip Morris' faith in premium brands. a $200 million direct-mail and ad effort. but an executive familiar with the project says advertising for Express has been created. Adventure Team. conjuring up the Pony Express. "How many times have I seen people in their office lobbies exhausting their cardiovascular systems trying to down a cigarette between breaks?" asks Jeffrey Hill. The reasoning: Premium-priced cigarettes. which start at $1. at around $1. Philip Morris already markets such a product in Germany. Much of Basic's $10 million ad budget will be shifted to Virginia Slims. The idea is to reduce the size of the cigarette but deliver the same amount of nicotine and tar. Just as Express would offer smokers the same nicotine fix in a smaller package. Marlboro Express. "the advertising means it's a high priority. Country Store is slated to replace the Marlboro Adventure Team. N." says Rob Huberman. which could cut the price of a carton by roughly 60 . worked much like a catalog: Smokers saved up empty Marlboro packs. a managing director at Meridian Consulting Group in Westport.paper are taxed at a lower rate than cigarettes. For 130 packs. "Express is supposed to be a fast smoke so you can get a quick fix. Still. the shorter smoke.J.90 per pack. The program gave Philip Morris a data base of more than 2 million smokers. are three times as profitable as discount smokes. Philip Morris' high-riding discount cigarette. Marlboro's brand managers are viewing promotions as a way to get more bang from a smaller marketing budget. Consultants believe smokers would be receptive. A Philip Morris insider says the company has been considering this demi-cigarette as an option for people who must take quick smoking breaks while at work. Launching a new product could interfere with the existing Marlboro line's momentum. and received free merchandise from a Marlboro catalog. Conn. Will Express make it to market? It's not a sure thing. would be about 15 millimeters shorter than a conventional 85-millimeter-long cigarette.
Morgan's career could depend on the outcome. "Continuity" programs such as the Marlboro Adventure Team and the upcoming Country Store campaign--with their offers of Marlboro merchandise--build consumer loyalty and data bases. Other options: cartons of loose cigarettes and roll-your-own smokes.CAREER MOVES. this month cut in half the 60 per carton they give tobacco wholesalers to push discount brands. chatting amiably about the company's tobacco business. Step Two: The company is expected to nudge prices back up quietly this spring. That would bolster Philip Morris' earnings. At Philip Morris' Dec. too. narrowed the gap with discount brands. PROMOTION Relying less on broadbrush image ads. is being considered." It's a good bet Miles is watching Morgan pretty carefully. 16 holiday party at New York's Metropolitan Museum of Art. It was his way of saying that even though he's a food guy. Analysts and tobacco distributors believe another price hike is imminent. Reynolds Tobacco Co. Michael H. aimed at the time-pressed and price-conscious. NEW PRODUCTS The shorter Express. ARTICLE 4 Parade Magazine: How Subliminal Advertising Works 94 . Last spring's 40 -perpack cut grabbed consumers' attention. milled around.J. and squeezed rivals. premiumpriced cigarettes accounted for 61% of the domestic market. And smokers barely seemed to notice when Philip Morris and its rivals raised prices by 4 per pack in November. Miles. Black expects that figure to stand at 66% by the end of the first quarter. "He's normally not very personable. he's watching tobacco. "But he was very congenial. In another move to shift smokers into premium-priced cigarettes. The trick is to raise prices without undermining the company's efforts to position its cigarettes as good value--and without triggering a price war. telling people how happy he was with Marlboro's increased share in convenience stores. Philip Morris' somber CEO." says one partygoer. REIGNITING MARLBORO PRICING Philip Morris uses price as an aggressive marketing tactic. Philip Morris and R. A year ago.
My question was this: Can the desire to smoke be triggered by images merely associated with a brand: images of a camel. But that hasn't kept me from distantly--and. a type of brain scan. while viewing various cigarette-marketing related imagery. Over the years. the size and placement of a product's logo has been the holiest grail of branding. Four-year-old kids know about the health dangers of smoking.765 billion cigarettes a year--and that's not even including the huge dutyfree or international black market trades. who agreed to submit themselves to functional magnetic resonance imaging (fMRI). it seemed only fitting to target the human brain.000 volunteers worldwide.6 billion by 2025. For ethical reasons. I've always said no.By Martin Lindstrom Publication Date: 4th of January. But considering that by retirement age the average American has watched roughly 2 million TV commercials (and no doubt been exposed to an equivalent number of billboard ads). pray tell. Project Buyology. so why.4 billion smokers to roughly 1. The World Bank projects that the number of tobacco users is only going to shoot up further-from a current level of 1. I've turned down numerous entreaties from tobacco companies to work for their cause (if you want to call killing people a cause). 2009 "Make it bigger. Over the years I've been perplexed by the fact that despite worldwide tobacco-advertising bans and astronomical government investment in anti-smoking initiatives. a windswept desert. a rugged-looking cowboy or Marlboro's well95 . perversely--admiring these companies' tricks and strategies. global consumers continue to inhale 5. admittedly. enlisted roughly 2." the executive suggested as I scrambled to sign off on an ad on behalf of a major fashion brand. I wasn't the slightest bit surprised. I decided to peer inside consumers' brains to find out. do brands like Marlboro and Camel still rank as among the most powerful in the world? If experts generally agree that 85% of everything we do takes place in our subconscious minds. For as long as I can remember. has the logo overstayed its welcome? In a multimillion-dollar global neuro-marketing study dubbed Project Buyology. the largest project of its kind.
brought on a higher craving activation than either the logos or the actual pictures on the cigarette packs themselves. what does our research experiment portend? Think about this: Nearly a century ago. Our goal was to determine if the subliminal images would generate similar cravings to those generated both by the logos and by the clearly marked Marlboro and Camel packs. Project Buyology exposed both social and long-time smokers. sunsets.known sponsorship of the European Formula One racing circuit. they were shown explicit cigarette advertising images including the Marlboro Man and Joe Camel hunched over his motorcycle. increased media sophistication or consumers' by-now cast-iron defense mechanisms. We know we're being manipulated. as well as the Marlboro and Camel logos. But wait a second--why? Well. which has forged an inextricable link between smoking and the company's bright red Ferraris? Do smokers even need to process the logos "Marlboro" or "Camel" for the craving spots in their brains to become activated? Over a two-month period. our guards go up. their nucleus accumbens lit up even more pronouncedly in the same regions they had when they viewed the explicit images of the packs and logos. In other words. craving and addiction. Company executives wanted him to develop a bottle so distinctive that if you smashed it against a wall. you'd still be able to recognize the pieces as part of a Coke bottle. Far more intriguing was that when the smokers were briefly exposed to the subliminal imagery. the MRI scans revealed a pronounced response in our smokers' nucleus accumbens. when the first-ever Coca-Cola bottle was in the planning stages. and to this day it works. the designer received his marching orders. Not surprisingly. whether it's due to brand boredom. as they viewed the actual cigarette packs. when we're exposed to logos. to a raft of suggestive images as the fMRI painstakingly scanned their brains. the iconic imagery merely associated with Camels and Marlboros. such as the Ferrari and the Western sunset. as well as non-smokers. 96 . Next. a small region in the brain associated with reward. and we'll do anything in our power to prevent that logo from winning. The designer did what he was told. camels and deserts. First. So in practical terms. both groups were shown subliminal images that had no overt connection to cigarette brands--those he-man cowboys.
" Even back in 1915. a sound. The ultimate decision-making process of whether we buy something will happen at the deepest levels in the human brain. on its front. gleaming female robot heroine put you in mind of anything in particular (such as any one of several Apple products)? That familiar sloping roof. at the same time engaging their subconscious minds. these places were out of reach. or bringing out yet another forgettable movie product placement--all of which will only induce consumers to respond defensively and critically--in the future the simple power of suggestion will entice customers to accompany advertisers on a journey. a shape. of McDonald's and Tiffany? Instead of flashing another logo. but it's on life support. Today.For obvious reasons. ARTICLE 5 Orwellian Dream Come True: A Badge That Pinpoints You By LEONARD SLOANE Published: Saturday. Coke's aim was to replace its logo with a "smashable" component. a design or any other indirect signal that tells a subtle. But thanks to the unlikely pairing of neuroscience and marketing. the logo isn't dead yet. Until recently. September 12. See that new iPod Touch over there? Where. No. Did you happen to catch Disney's Pixar's latest flick. Wall-E? Did the white. as I am. a fragrance. I call this philosophy "Smash Your Brand. that robin's-egg-blue box--are you thinking. My prediction? That the battle for consumer loyalty and cash will no longer take place in our conscious minds. we're beginning to understand the secrets of our own human Buyology. is the word "Apple" spelled out? Nowhere. "smashable" could mean anything from a color. suggestive and logo-free story. 1992 Is Big Brother your boss? 97 .
" said Donald A. however.Another tool that lets "them" check up on "us" -. peek at voice and computer mail messages or listen to employees transact business on the phone. about the size of an employee I. eroding workplace privacy.where we are and with whom we are -.is on the way. a research engineer at the Olivetti lab. like luggage in airports or raw materials in factories. In addition to being worn by people. "George Orwell would have been pleased. said: "There's a lot of surveillance in the workplace these days. England. added: "I get my communications so much faster when I carry the badge. "It's in your interest as a professional to stay in touch with your colleagues. Especially intrusive technology should be under the control of the person using it. "This technology makes snooping easy. there were plans to make them available commercially starting next year. It is the active badge. card. They see the badges as an intrusion into the lives of employees. Norman. They could say you were in the men's room or the cafeteria too long or that you were sitting in so-and-so's office too long. and who is now a member of the research staff at the Xerox Research Center in Palo Alto. "When different people need to be found. Calif. And it's all completely hands-free. the system can track your movements around an office building or even a larger area. that transmits signals to a central system." Mr. privacy issues overwhelm any technological virtues of active badges.D. to track their progress." said Roy Want. As long as you wear the badge. lawyers and laboratory scientists. chairman of the cognitive science department at the University of California at San Diego. not of management." Andy Harter. Harter of Olivetti said that although active badges were still being tested. but also doctors and patients in hospitals or nursing homes." Evan Hendricks. who invented the active badge while at the Olivetti Research Laboratory in Cambridge. a small clip-on microcomputer. And they compare the badges with the already widely used electronic monitoring devices that can quantify the number of keystrokes on a terminal." For many people. editor of the Privacy Times newsletter. I can ring directly to where they are. badges can be attached to objects. It has the potential of changing the modern office into an electronic sweatshop. The target market includes not only office workers who are away from their desks. 98 .
Mass. the number of other badge-wearing people in the room and the approximate length of time the badge wearer has been at that location. a member of the research staff at the Digital Equipment Corporation." 99 ." Other computer experts see active badges in a far different light. The second generation of active badges is now being tested.Olivetti officials say active badges were initially developed about four years ago as a means of making telephone communication more effective. called the authenticated badge. to prevent tampering with the system. is designed to assure that the signal is authentic. which helps to finance the Olivetti laboratory in England. information about the location of the person wearing it could be constantly updated." said Gary Chapman.. Anyone with access to the computer screen can then quickly get in touch with the badge wearer by telephone or electronically. with researchers in England and the United States wearing them for the purpose. It allows the acquisition of dynamic location information. Scientists at the laboratory found that with a badge emitting an identification code every 15 seconds -. said: "I view this technology as interesting in itself. "They can keep a diary of how long you've been talking to Joe Blow.in the form of an infrared beam --to a network of wall-mounted sensors around a building. "In the environment in which we work. to go out to lunch or celebrate someone's birthday. thus visually indicating where each badge-wearer is in relation to everyone else. office of the Computer Professionals for Social Responsibility." said Veronica G. an organization that has studied electronic monitoring. however. Currently." Murray Mazer. Falcao. the telephone extension nearest the present position. director of the Cambridge. the room where the person is. "We're saying that they are a form of computer monitoring. the information provided by active badges worn at a particular site is shown on a central computer screen in the form of five columns in a table: the badge wearer's name. who helped to develop active badge software while employed by Olivetti in the United States. "Active badges are the most useful thing to round people up for a meeting. This version. The data from the badges can also be displayed on a screen showing a model of an entire office floor. people are not always in their offices. The badge functions the same way that a remote control device does in transmitting a code to a television set.
Operations Includes machining. Professor Norman. inventory control. 100 . packaging. Inbound Logistics Includes receiving. transportation scheduling. who is writing a book called "Things That Make Us Smart. This technology makes snooping easy. equipment maintenance." summed up that view succinctly: "Active badges are a really excellent example of the horrible trade-off technology gives us. assembly. testing and all other value-creating activities that transform the inputs into the final product.And legislation pending in both houses of Congress would require that employees be given notice of the forms and frequency of monitoring being used by an employer. "There's such a strong potential for abuse because employers are allowed to spy at will on their employees." said one Congressional staff member who requested anonymity. storing." ARTICLE 6 The Porter’s value chain model The Value Chain framework of Michael Porter is a model that helps to analyze specific activities through which firms can create value and competitive advantage. we tend to do. and what technology makes easy.
etc. finance. retention and compensation of employees and managers. quality management.Outbound Logistics The activities required to get the finished product to the customers: warehousing. installation. distribution management. servicing. training. public affairs. etc. planning management. such as Research and Development. transportation. machines. upgrading. Process automation. redesign. design. Technology Development Includes technology development to support the value chain activities. spare parts management. repair services. Procurement Procurement of raw materials. promotion. accounting. Firm Infrastructure Includes general management. Service The activities that maintain and enhance the product's value. Value Chain model of Michael Porter: Human Resource Management The activities associated with recruiting. etc. 101 . selling. advertising. etc. spare parts. legal. order fulfillment. including customer support. retail management. Value Chain model of Michael Porter: Marketing and Sales The activities associated with getting buyers to purchase the product including channel selection. development (education). pricing. buildings.
INTERESTING BILLBOARDS 102 .
AUTHORSHIP STATEMENT “I truthfully declare that the entire content of this diploma paper is my own copyrighted work which I produced independently with the aid of listed/cited bibliography and sources.2009 Daniela Milosheska (Signature) 104 . under the guidance of my mentor.05.” Location and date: 22.