GEA COLLEGE OF ENTREPRENEURSHIP
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.
. a place where there are no boundaries. It has created a world where innovation and creativity are the basics for a successful performance and sustainable growth. by going deeper into the processes of creating and establishing. CEO Disney). the backbone of each and every flourishing company. 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. the aorta of the heart of one successful organization and the engine of the exquisite machine for profitability in today’s competitive market. as well as maintaining the brand as strong as possible. even though they might contain the same ingredients. some compare it to onion with its layers and core content (Edwin Artzt). Since its appearance from 1200 AD up until today its impact on society is immense.SUMMARY/ABSTRACT Brand… What does it mean? Some define it as the “f” word of marketing (Mark Di Soma. I am going to explore the reasons behind this phenomenon and provide facts for why is this happening. mutual relationship. emotional bonding and several different elements. I’ve always been intrigued by the phenomenon of the brands and how they are managing to capture attention from its audience. establish the criteria for the choice of the brand elements. This tremendous impact is composed of loyalty. as well as the methods of its achievement. travel a bit throughout its history. identify the marketing communication options that might help in strengthening the brand. 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. This huge impact is also the reason behind the choice of my topic for thesis. just simple relationships between the customers and companies. etc. 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. Audacity Group). while others consider it as a product of a thousand small gestures (Michael Eisner. In order to demonstrate that this is right I will try to explain the complexity that the brand incorporates. I define it as the very beginning and the very end of the golden era of corporations. or have equivalent tastes. innovativeness. or even possess same odor. but most important to how they determine the value of the product.
brand equity. strongest brands. brand perception
. branding.Keywords: brand.
vendar je o tej temi na voljo vsak dan več informacij. bom skušala opredeliti izraz tržna znamka. v katerem ni mej. da sem si za diplomsko delo izbrala prav to temo. da bom s tem dokazala svojo edino tezo naloge. pa je veda. in sicer s podrobnim raziskovanjem tako procesov ustvarjanja in uveljavljanja kot tudi ohranjanja blagovne znamke močne. se nekoliko spustila v njeno preteklost. da je kot čebula. kot tudi na internetu. Čeprav so blagovne znamke stare že nekaj stoletij. prepoznala možnosti tržnega komuniciranja. kako jim uspe pridobiti pozornost svojega občinstva in kako vplivajo na vrednost izdelka. Tržne znamke so ustvarile svet. določila kriterije za izbiro elementov tržne znamke. CEO Disney).POVEZETEK Blagovna znamka … Kaj ta izraz sploh pomeni? Nekateri blagovno znamko definirajo kot »besedo na f v marketingu« (Mark Di Soma. ki jih preučuje. To je sicer lahko ovira. ki se glasi: TRŽNA ZNAMKA VPLIVA NA VREDNOST IZDELKA. Audacity Group). aorto do srca vsake uspešne organizacije in motor dovršenega stroja za doseganje donosnosti na sodobnih konkurenčnih trgih. spet tretji jo označujejo kot izdelek s tisočerimi majhnimi potezami (Michael Eisner. Druga možna ovira bi lahko bila moja neizkušenost na področju
. saj je jedro z vsebino obdano z mnogimi plastmi (Edwin Artzt). še razmeroma mlada. nekateri pravijo. V svoje delo bom vključila veliko študij primerov v svetu najbolj znanih blagovnih znamk. svet. vzajemnih odnosov. kot se le da. Sama jo definiram kot začetek in konec zlate dobe korporacij. Da bi dokazala. Prav ogromen vpliv blagovnih znamk je razlog. čustvenih povezav in številnih drugih elementov. ampak le preprosti odnosi med potrošniki in podjetji. tako v objavljenih publikacijah ter študijah primerov prihajajočih in uveljavljenih znamk. bom skušala pojasniti kompleksnost blagovne znamke. hrbtenico čisto vsakega cvetočega podjetja. ki lahko pomagajo pri krepitvi znamke itd. Vse od pojava znamk okoli leta 1200 je njihov vpliv na družbo ogromen. Da bi dokazala pravilnost te trditve. v katerem sta inovativnost in kreativnost osnovi za uspešno poslovanje in trajnostno rast. inovativnosti. da ima blagovna znamka ogromen vpliv na vrednost izdelka. Ta izreden vpliv je skupek lojalnosti. Že dalj časa me navdihuje pojem blagovnih znamk in to.
po katerih sem to ugotovila. čeprav lahko vsebujejo enake sestavine. S pregledom zgodovine teh podjetij bom skušala najti elemente. telefonski intervjuji v moji nalogi ne pridejo v poštev. kako tržna znamka vpliva na določen izdelek in zakaj imajo enaki izdelki na tržišču različno ceno. bom to naredila predvsem s pomočjo informacij na spletnih straneh in v objavljenih publikacijah. da bi lahko učinkoviteje izdelala dokaz svoje teze in dobila bolj trdne rezultate. Za tak način namesto klasičnega. Glavni cilj in namen te diplomske naloge je analizirati.
Ključne besede: blagovna znamka. bo v diplomsko delo vključeno veliko število primerov in študij primerov. ki jim zagotavljajo vodilni položaj na trgu in jih razlikujejo od ostalih podjetij. ki so ustvarili in ohranili močno tržno znamko. ker želim v raziskavo vključiti širši spekter podjetji. Kot rečeno. Kot sem že omenila. do sedaj še nisem delala za kakšno blagovno znamko ali sodelovala pri projektu znamčenja. Ker bom pisala o največjih svetovnih podjetjih. Čeprav sem prebrala veliko število knjig na to temo. pri katerem bi raziskavo delala samo na primeru enega podjetja. in seveda metode. znamčenje. najmočnejše znamke. zakaj se to dogaja. percepcija blagovne znamke
. vrednost blagovne znamke. Za predvidene raziskovalne metode sem izbrala iskanje po internetu s pomočjo iskalnikov ter raziskovanje bogate knjižnične literature in strokovnih del. imajo enake okuse ali celo enak vonj. V nalogi bom poiskala vzroke za tak pojav in navedla dejstva. sem se odločila.marketinga.
49 6..56 7. BIBLIOGRAPHY…………………………………………………. Pricing strategy…………………………………………………41 5. Strongest brands……………………………………………….TABLE OF CONTENTS 1. Brand mantras and brand audits……………………………….. CONCLUSION…………………………………………………….1.4..1.2.2. BRAND ELEMENTS 4. MAKING STRONG BRAND 3.1.43 5.15 3.1. Channel strategy……………………………………………….5. Four steps of brand building……………………………………26 3. INTRODUCTION………………………………………………….. Product strategy……………………………………………….3.3. HOW BRAND AFFECTS THE VALUE OF THE PRODUCT 5.4 2..58 8. WHAT IS BRAND? 2. Brand positioning………………………………………………32 4... Brand elements which affect the human perception…………. Market communication options……………………………….35 4.2.7 2. How do consumers perceive and choose brands………………. Definition and different opinions………………………………. APPENDIXES …………………………………………………….61
..2. Brand brief history………………………………………………9 2. Benefits of a strong brand………………………………………31 4..3...36 5..3. Brand equity……………………………………………………22 3.45 5.39 5.
45 3..49 4..55 6.29 3. Table 1: Calculating the brand value (The 100 most powerful brands: BrandZ top100 brand ranking)……………………………………………………………28 2.LIST OF TABLES 1. Table 3: Top 10 brands with highest brand contribution (The 100 most powerful brands: BrandZ top100 brand ranking)……………………………... Graph 4: Brand positioning…………………………………………………….. Graph 3: Keller’s model for Calvin Klein’s brand……………………………. Table 5: Projective technique……………………………………………………84 LIST OF GRAPHS 1.53 5. Table 2: The 30 most powerful brands in 2008 according to their brand….30 4..42 2...63
. Table 4: Top 10 brands with highest brand momentum (The 100 most powerful brands: BrandZ top100 brand ranking)……………………………. Graph 1: “BLAKE PROJECT”……………………………………………….31 5. Graph 2: Keller’s customers’ based brand equity model…………………….. Graph 5: The basic perceptual map…………………………………………….. Graph 6: Porter’s value chain…………………………………………………..
emotional bonding and several different elements. or even possess same odor. It has created a world where innovation and creativity are the basics for a successful performance and sustainable growth. This huge impact is also the reason behind the choice of my topic for thesis. the backbone of each and every flourishing company. a place where there are no boundaries. I am going to explore the reasons behind this phenomenon and provide facts for why is this happening. In order to demonstrate that this is right I will try to explain the
. even though they might contain the same ingredients. Since its appearance from 1200 AD up until today its impact on society is immense. 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. 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. INTRODUCTION Brand… What does it mean? Some define it as the “f” word of marketing (Mark Di Soma. I define it as the very beginning and the very end of the golden era of corporations. while others consider it as a product of a thousand small gestures (Michael Eisner. the aorta of the heart of one successful organization and the engine of the exquisite machine for profitability in today’s competitive market. innovativeness. or have equivalent tastes. some compare it to onion with its layers and core content (Edwin Artzt). just simple relationships between the customers and companies.1. etc. Audacity Group). but most important to how they determine the value of the product. establish the criteria for the choice of the brand elements. This tremendous impact is composed of loyalty. mutual relationship. CEO Disney). identify the marketing communication options that might help in strengthening the brand. I’ve always been intrigued by the phenomenon of the brands and how they are managing to capture attention from its audience. as well as the methods of its achievement. travel a bit throughout its history.
complexity that the brand incorporates. brand perception
. Keywords: brand. branding. by going deeper into the processes of creating and establishing. brand equity. strongest brands. as well as maintaining the brand as strong as possible.
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. but it takes genius. CEO Disney 2000). the backbone of each and every flourishing company.” A huge name in the fashion industry.Definition and different opinions Brand… Some define it as the “f” word of marketing (Mark Di Soma 2006). I define it as the very beginning and the very end of the golden era of corporations. This definitions offer an insight to the overall perception of the word brand. a notable advertising executive. while others consider it as a product of a thousand small gestures (Michael Eisner. I design dreams. some compare it to the onion with its layers and core content (Edwin Artzt 2004). faith and perseverance to create a brand. skills that include faith and obstinacy. The truth about branding lies in those dreams and how one interprets them in the society.1. Ralph Lauren defines the term brand by this sentence only.
. WHAT IS BRAND? 1.
“Any damn fool can put on a deal.” Here is how David Ogilvy. but it also requires lethal skills to package it. how they are shape to constitute the reality. “The father of advertising” defined the term brand.
“I don’t design clothes. who has often been called.1. the aorta of the heart of one successful organization and the engine of the exquisite machine for profitability in today’s competitive market. It is clearly seen from the definition that to create a brand does not only require good product.
“A brand is a name. but it must be something which the people will actually need. it must capture not only the minds of the people who purchase it. elements of the brand. This means that the idea of the definition of brand and branding can always change due to the subjectivity of the people. the same ones which are incorporated in the decisive process of the complexity infused in the consumers’ purchasing procedure. symbol. The emphasis here is put on that exceptional difference that distinguishes the products and services offered from the ones of the competition. Even though I strongly agree with this definition. or a combination of them. There are a lot of opinions regarding this topic. or any combination of the three in order to provide mental associations that get stirred up when one thinks about a particular item. As. Those bonds within time can either strengthen or weaken due to the higher or lower quality of the product or service offered. there is something that is lacking. For this reason. It clearly states that in order for one to run a successful business.” It basically says that in order for the brand to be a success story. by creating words. or images. I think that brand is something that lives in the mind of each and every one who consumes it. great attention must be paid to the uniqueness of the products and services he or she offers. or emotions. so called. but the hearts as well. 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. except for lowered quality and unsuccessful deliverance of the promise that a brand creator makes. This difference which is the essential is not just something that might contribute for the brand to become the next big thing. Allen P. or design. term. Adamson puts it “a brand is a promise that links a product or a service to a consumer.” This definition actually explains the set of the. since brand is more psychological item and therefore relies a lot on the people’s perception. as well as more or less engagement of the people’s needs and wants. Above are just a few of the definitions for brand. intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. person or even a country. Once that emotional bond is formed. sign. there is nothing and no one strong enough to break it. 14
. This difference is of an extreme importance if one wishes to establish a strong brand and maintain it for a long period of time.
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. Having a well known established brand can help in the process of reducing the risk involved in the buying decisions (Roselius 1971. the magic of its success will vanish and will only stay the product itself. since the consumers don’t have time to check all the options that they might find on the marketplace. However. People’s perception dominates their decision for purchasing certain product or service. A simple answer would be provided by Geoffrey Randall.Another eminent question that cripples here is. but if you take out the packing and the design of its bottle. for better understanding of the word brand and the process branding. who in his book “Branding. is a brand. In today’s fast moving society. a guaranteed safety is a big plus for one product or service.” For instance Coca Cola. because it rules the world and helps people to make up their minds faster. 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. how to distinguish between what’s a brand and what’s just a product. instead they go with the one which name is familiar and clearly associated with quality.56-61). I will provide a brief journey throughout the centuries. the beverage inside the bottle.
. but can also carry its values and identity into new product areas. you see the brand is the king today. So. so that it can be clear from where the term was derived and how long ago it was established. in this thesis.
according to the UCLA Indianologist Stanley Wolpert.C. the one and only. As I said before the tale takes place in the Ancient times. Aside from a number of seals found from the excavation written in as yet encrypted script. somehow it has a very awkward start. That is what makes this story different from all the others. elephants. the home of the Sumerians and Akkadians. At these times there were no 16
. the Brahma bulls. infused with sparkles of faith and obstinacy started a long time ago.com/archives/brief-history-of-branding. promote a different story. in the Indus valley. Even though it has a happy ending like almost every fairytale before it. This is where the bad start initiates. The Indus Valley. 28. 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”. and other Indian animals “were probably made from merchants who used them to ‘brand’ their wares”. This fairytale of innovation and creativity.. in Babylon. However a lot of textbooks. Some claim it to be way back in 3000 B. I am talking about the king that rules the world. 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. THE BRAND.2 Brief history of the brand PICTURE1: START OF BRANDING
Source:http://experiencecurve. or the so called Harappan civilization. Yes. there is no other facts found that can testimony otherwise.2009. He believes that the magnificent seals of tigers. which primary topic is the theme of branding.2. with the first trading among the nations. and the clues provided by the overlap of the Indian and Sumerian artifacts. probably due to the fact that there are no written records found that this Harappan society ever existed. and the difference the very first root of the tale itself.C. This same place was the cradle of the earliest example of branding. where the evidence of the first advertising was found.03.
so the Vikings took advantage of this fact and started to brand their animals in order to identify them. so that they appeared to be very familiar or some even the same as we know of them nowadays. as well as boost the actual performance of the product or the service offered in the market place (P. and Rome branded the porcelain. They were even convicted if they used false marks and therefore harshly punished (Lane Keller 2008. followed by the whiskey producers. you’ve read correctly. In the eighteenth centaury. Goldsmiths. there were also other countries which started with this tradition.30). China. On the other side not only animals were branded. The packaging. Adamson 2006. I guess there is no limit to how far the people’s cruelty would go. I wonder what “PETA” will think if this happens nowadays. the dawn of advertising was born (P. Countries such as ancient Greece. By the nineteenth century. This tradition followed throughout the centuries. the posters. but people as well. increase sales volumes. The branding concept for promoting the product or service offered was brought in the United States of America by the Europeans. It started by patenting the medicines and tobacco. the pottery jars and goods such was the bread (P. Anyway. Yes. It is here where the process of promotion and publicity first appears. Probably they would end up being slaughtered or crucified.29).Adamson 2006. silversmiths were up next. It started by patenting the medicines and the tobacco by promoting them in various ways. 29). as well as slaves in England back in the 1200s. up until the sixteenth centaury when the brand names started to develop further. 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. They were required to mark their goods with a signature or personal symbol and with the sign of the quality of the metal. the brand names were commonly used to improve the perception of a product.
. For instance. the ads and a lot of other techniques developed and the new dawn.43). All those criminals who were committing crimes were marked. with no significant change. Adamson 2006.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.
jpg . PICTURE2: BASS & COMPANY LOGO
SOURCE:http://www. the availability of the products advanced to the point of being reachable nationwide.
.sportingcollectibles.With the railroads being the primary mode of transportation and distribution. by creating emotional bonding with customers and developing designs which can attract them and maintain them for longer period of time. This marked the beginning of the mass production. For instance. the two most important pillars of the brand.03. as well as the rise of the newspapers and magazines as communication channels.34). the promise of security. It showed that it can contribute to the successfulness and enhancement of the core business. 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”. They had based their product on simple promise which everybody needed to hear. Being the voice of authority he provided strong images in the consumer’s minds accentuating the idea of protection and security. The creativity and the innovation gave another side to the business. Adamson 2006. creating again another concept of the media buyer (P. He provided the American Express with an excellent communication tool of safety associated with carrying the American Express Travelers Cheques. They are coexisting and together they make the competition more entertaining and fun to watch. and the laying down of the foundations of advertising. He was used as a branding signal because he created powerful associations of security in people’s minds. in 1970 the America Express developed a product which putted an emphasis on the emotions of their core target customers. Nowadays. it has reached the point to which the business can not exist without the assistance of the two. Adamson 2006.2008.28.com/adagdt/ad9924bass. The slogan which helped this idea being widely accepted was “Don’t leave home without it” (P.30).
Brands.jpg . PICTURE3: COCA COLA LOGO
SOURCE:http://weblogs. achieved their success through production innovations and spectacular promotions. advertising.Among the first trademarks in the world was one named Bass & company. 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.
. the phrases “brand identity” and “brand personality” were introduced and more and more attention was put into their building. the British brewery which claims that their red triangle brand. Heinz and Coca Cola. personal selling. From 1940s on manufacturer started recognizing just how big of an impact the consumers had in determining their volume sales.newsday. A lot of other companies. among which the Campbell soups. as well as increased and improved legal protection.J. 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. H. the Coca Cola and Quaker Oats.2009. This was the beginning that marked the so called era of the new phrases. They managed to do this through aggressive promotion. specialized marketing techniques. as well as successful development of the distribution channel. As the mass production developed further so did these brands. followed the lead of the Bass and company. Therefore.28. was actually the first trademark in the history of branding. enhanced design. such were Procter & Gamble. Pepsi and Coca Cola for instance.com/entertainment/tv/blog/coca-cola-logo.03.
The products and services offered at that time started to take another side.natureterch. 29. point to one thing only and that was just how much the word “brand” started to contribute to the business value. Phrases.me/wp-content/uploads/2008/12/pepsilogos.03. PICTURE5: PHILIPS LOGO
SOURCE: http://cln. besides the creating of the emotional bond. It evolved in a way that it became the only thing that mattered in establishing the brand. As a consequence the corporation standing behind the brand became the brand. such were brand value and brand equity were established and elaborated. This emotional relationship led to consumers overtaking the ownerships of the brands.03.jpg.2008. 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.fleka. This period was an important milestone in the following history of the brand and the branding process. Anything that was designed out 20
. They were tailor made and designed to satisfy the customers’ needs and wants. A decade later during the 1990s the brand is stronger than the physical dimension of the product.PICTURE4: PEPSI LOGO
SOURCE:http://blog.com/products/phone/philips/philips_logo. Everything has changed and so did the creativity. 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.2008.jpg. 28.
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. And those are some of the core components that built brand. Having a loyal customer base means to have established a great relationship and find a way to satisfy the needs and wants. There was still one thing more that they should develop.2009.transport. 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. Once established this base all one has to do is maintain it and nurture it. by capturing their attention with quality. they buy trust. In order to have the kind of deep bonding with their loyal customers the only thing that was lacking was 21
. However this difference was not the only thing that the companies should focus on in order to be successful.scrapetv.04.com/News/News%20Pages/Business/images/mcdonalds%20lo go. 6). friendship. Adamson 2006. However. PICTURE6: McDONALDS LOGO
SOURCE:http://www. reliability and any number of other intangibles which have value.of this pattern was doomed to failure. Philips failed to see that the people don’t actually need this TV. These loyal customers buy more than products.02. although this was cool.jpg .polymtl. 04.0l. that will be exactly what they want and deliver exactly the same expectation they had.ca/civ1120/etud_h08/EL_KAOUSSI/playboy_logo_s ex.2009.jpg . PICTURE7: PLAYBOY LOGO
California and was named after the Greek Goddess of victory. “the golden arches” (McDonalds). 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. This was where the highest level of achievement in the world of branding was established. In this time the only most important thing was to learn how to emboss a personality in what one sells. Its famous tagline was created in 1988 for an ad campaign by Dan Wieden.the creating and developing of some phrase which will be instantly recognizable. 12). Soon afterwards signs such were “the swoosh” (Nike). 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. by creating awareness in the human mind. 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.2009. PICTURE8: DeBEERS LOGO
SOURCE: http://edevangelista.01.04. The company Nike was established in 1964 in Santa Monica. generating more than $25 billion per year in the United States only (Kevin Lane Keller 2008. We all know the phrase “Diamonds are forever”.jpg . not burdening the consumers with facts and figures. with its tagline “Just do it”. in the simplest way possible which was focusing on the simplicity of the brand idea and thus bringing it into effectiveness.com/debeers/debeers_logo. Another example of successful slogans is Nike. when the De Beers Group wanted to add more emotion and symbolic meaning to the purchase of the diamond jewelry. This 22
. This slogan remains one of the most successful and the most used one in the history of branding. It’s a company that operates in the field of sportswear and sports equipment. creating associations and linkages which strengthened the perception constituted towards the product or services. It was invented in the 1948. “the bunny” began to emboss in people’s minds. It is the most suitable example that provides an insight of the tremendous impact that the phrases or words have on their customers.
(Erwin 2008) PICTURE10: OBAMA AS BRAND
SOURCE: http://www. he was voted and according to researchers today his name is one of the best known brand names.jpg .04.03. The timing. The hope and faith that Obama brought to the world. A lot of people identify with him.com/blog/wp-content/uploads/2008/11/nikelogo. 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. long gone. the promises made. than to the tales of political Gods. Because of him being different and unique.2009.04. Once broken. The disappointment incurred is just too much to
.com/brandcurve/files/2007/07/logos.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. the speeches delivered. it made people optimistic in a time when everything seemed to fall. gave the people something to believe in. infused in people something long forgotten.cellphonemessagesender. something that reminded them what faith really means. or can they actually find their way back to the top? The answer is simple.02. the emotional pack cannot be rebind. These mental associations that he created in the people’s minds made him the most powerful man in the world today. since his story is closer to mortals.gif .2009. PICTURE9: NIKE LOGO
SOURCE:http://www. Similar to this “Yes we can” phrase embroidered in the Obama’s speech became something that the people recognize and use daily.bizzia.
bear.02.Strongest brands PICTURE11: STRONGEST BRANDS (P. The promise which they delivered was that this lemonade had a taste of an old fashioned one. The previously elaborated brief history of branding emphasizes the needs from which the branding originated. The trust was broken and the people felt that they had been betrayed.42). to hold producers responsible. so the customers move on with the new hottest promise on the market. Wyler’s was made from the juice of two lemons and Country Time was made from the juice of no lemons.bizzia. This marked the end of the production of the old-fashioned lemonade 2006.3.jpg . Everything was going smooth up until the moment when new lemonade emerged with a shocking statistics. 2. hoping that this time their feeling will not be hurt. This campaign formed strong relationships with the customers. Each and every one of them is eligible for creating on added value to the core product or service. This statement ruined the relationship between the customers and the company which produced the lemonade. sitting on a porch on a summer day with ice-cold lemonade in hands. This happened with the Country Time lemonade. They developed an ad campaign that featured a white-haired grandfather.04. to insure honesty. or to create emotional bonding. to differentiate.com/brandcurve/files/2007/07/logos.2009. The Minute Maid lemonade campaign was an ad which stated that the Minute Maid was made from the juice of twenty lemons. Whether they are to identify the source or ownership. Adamson
SOURCE: http://www. to provide quality assurance.
. bringing back the memories once tasted. each and every one contributes equally to the complicated process of branding.
hopes. emotionality. something that made them so powerful. These brands offer the customers benefits of great magnitude. 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. Something which is same for everyone and yet different to the extent that makes them unique and lifts them on the pedestal as winners. They are developing a dream. experience. yet there are so many outstanding examples which prove just about the opposite. If this becomes permanent practice than the brand developer has a winner.
. Their existence is merely based on deeply fulfilling the human needs in unique and superior ways (VanAuken 2006). and successful companies have in common? The answer is lying hidden under the layers of their own success. So I couldn’t help but wonder what do all the celebrities. and have embedded integrity. which are different in each case. By adding emotions in the mix it makes it extremely seductive and addictive. The strong brands are unique and always stand behind the promises which they make. Yes.They say dreaming can get you nowhere. fears and the different emotions clouding the people’s minds. a fantasy world in which every human wants to take part. and self expressiveness. However what they do have in common is the core they all share. the conclusion is quite different of what people claim to be. by creating images that will capture the costumers’ attention. In that way the creators of the brands are developing something more than a product. the pillar of their own existence and triumph. so the buyers will develop loyalty and will never want to leave or relinquish. They are authentic. by creating something that can relate to the values. which means that they are internally and externally consistent. Starting with Martin Luther King and ending with Bill Gates. according to me are the components which are contributing to the constitution of a strong brand. It all starts with developing the vision. by bringing back the lovable memories. They create magical place in which the consumers are active participants. They create pieces of art which are not only beautiful but can relate to the needs and wants of the purchasers. best brands. a vision that made them the most powerful and well-known people in the history of the world. benefits such as functionality. And these. They had a dream. because the emotional bonding is too strong and won’t let them.
1). defined as the sum of all earnings that a brand is expected to generate.com
. 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. They have been evaluated according to their brand value.An example of strong brand is the Heinz Ketchup. brand contribution and brand momentum.
The brand value represents the financial value of the brand. According to this. Its ingredients for success include the sweet tasting product. Its calculation is shown in Table1. product development and promotional efforts.heinzketchup. It is measured on a scale from 1 to 5. a carefully monitored price gap with competitors and aggressive packaging.
The brand momentum represents the expected growth of the brand in short term period. 5 being the strongest brand contribution. It’s an index from 1 to 10 where 10 indicate the brands with the highest short term growth potential. BrandZ which is the largest repository of brand equity data has done a research of the top 100 most powerful brands in 2008.
The brand contribution is the degree to which brand equity plays a role in generating earnings.
there are the results of the research of the first thirty
. In the following table.Table 1: Calculating the brand value (The 100 most powerful brands: BrandZ top100 brand ranking)
SOURCE: Brown 2009.
I will also include the table which positions the brands regarding their brand contribution and brand momentum.Table 2: The 30 most powerful brands in 2008 according to their brand
SOURCE: Brown 2009. Since the research was done according to three components.
the degree to which the equity plays a role in generating earnings. a French brand operating on the fashion market. but with the same brand contribution as Louis Vuitton. The fact that I love this fashion brand is due to the design of their clothes and a great part to their commercials. but they create pieces of art which are worth every single euro spent on them. 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.
. Although they are both a part of the fashion industry. still my preferences are directed towards Chanel. They don’t just make clothes. The first place belongs to Louis Vuitton.Table 3: Top 10 brands with highest brand contribution (The 100 most powerful brands: BrandZ top100 brand ranking)
SOURCE: Brown 2009. which is number 7. This applies to all of the other brands listed in the table. My personal favorite is Chanel. This table shows the rankings according to the brand contribution. This means that Louis Vuitton’s outcomes of its marketing effects are very high. There is something within it that makes it so special in my eyes.
but will enhance their personal satisfaction and the overall happiness and fulfillment of their customers. but they are fulfilling one’s dream of contentment. a lot of brands that have great expected growth of the brand in short term are a part of the fashion industry. It seems like the people’s awareness of the fashion has increased significantly throughout the years. but a way of expression of the personality which one holds. Clothes are not only seen as things which are covering you body. simply due to the fact that they deliver the promises made. Another interesting brand division is that of the division among the 10 country brands:
. As presented in the table above. In this way they are not just designing items of clothing. which will not only bring them higher revenues and profit margins.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.
com/globalnews/article?article_id=132398 . culture. gastronomy.PICTURE12: AUSTRALIA AS A BRAND
SOURCE: http://adage. business infrastructure. 1. relaxation. entertainment." PICTURE13: CANADA AS A BRAND
SOURCE: http://adage.04.2009. Tourists can access a wide range of offerings: adventure. stability and openness."
.2009. Australia "Australia has strong branding.04.02. quality of life. diversity. 2.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. pure scenery and mouthwatering gastronomy.02.
com/globalnews/article?article_id=132398 .02.04. 3. the romance of Venice."
"Italy is a country that markets the best of itself: the cradle of gourmet cuisine and art.com/globalnews/article?article_id=132398 . 4.PICTURE14: USA AS A BRAND
SOURCE:http://adage.2009.2009. delivering a large variety of rich and diverse experiences. the history of Rome and even the beauty of its men and women. USA
"The US continues to be a tourist magnet for its fun spirit and because it is the giant of entertainment and business." PICTURE15: ITALY AS A BRAND
02.com/globalnews/article?article_id=132398 . France
"France has a strong local identity (wine.com/globalnews/article?article_id=132398 . Switzerland
"Switzerland is established. has successfully developed a clear attractive profile and is consistent in its brand promise and delivery.04.2009. tradition and culture) and the ability to load its brand with emotion: beauty. quality of life. language. music. romance. 5."
.02.04.2009." PICTURE17: FRANCE AS A BRAND
SOURCE:http://adage.PICTURE16: SWITZERLAND AS A BRAND
SOURCE:http://adage. 6. fashion.
02.PICTURE18: NEW ZEALAND AS A BRAND
SOURCE:http://adage.2009.04.com/globalnews/article?article_id=132398 . safe operation.02. well-being.”
“The UK is a well thought out and executed brand that effectively utilizes all of the natural and cultural resources of the country.” PICTURE19: UK AS A BRAND
SOURCE:http://adage. cultural interaction and pristine and pure scenery. 7. 8.2009.04.com/globalnews/article?article_id=132398 . New Zealand
“New Zealand delivers what it promises. Its destination branding has used strong emotional effects: quality.
The diversity.2009.com/globalnews/article?article_id=132398 . Japan
"Japan already has a high brand profile. culture and quirkiness of Japan — and the lower yen — are a powerful combination."
." PICTURE21: SWEDEN AS A BRAND
SOURCE:http://adage. but we've found that traveller expectations are always exceeded by the country. Sweden
"Sweden has the charm of Europe but an intriguing sense of mystery and otherness about it.02.04.04.PICTURE20: JAPAN AS A BRAND
SOURCE:http://adage.2009. 10. 9. It offers the traveler a variety of adventures and is proving to be a strong destination.02.com/globalnews/article?article_id=132398 .
“The term Brand equity is used to describe both the value of the brand and the brand's component values. 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”. However simple it may seems to be it still represents enigma for most of the observers.”
“Brand Equity is the accumulated value of the brand image or identity in the consumer's mind. As a conclusion to the previously said.”
“A brand is a name or symbol used to identify the source of a product. This concept is referred to as brand equity. Each of these marketing effects contributes something to the brand. branding is an important decision. mostly due to the fact that there are a lot of different opinions surrounding the concept. When developing a new product. “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. and ever since than it has become one of the most popular and paramount conceptions in marketing.”
“Brand equity is an intangible asset that depends on associations made by the consumer. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer.1. MAKING STRONG BRAND
3. What they all have in common is the fact that this concept is composed of marketing effects.3. Brand Equity The “brand equity” as a concept arose in 1980s. the “brand equity” is a kind of an explanation for why different outcomes 36
trademarks. However it can be also used as a definition for brand. since it doesn’t contain any measure for the brand equity. This definition is helpful because it puts an emphasis on the key aspects of consumers. 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”. its name and symbol that add value or subtract from the value provided by a product or service to that firm’s customers.” (Aaeker 1991. Some have developed measurements such was the Millward Brown measure. Another attempt has been done by Aaker. There is still one issue that remains up until today. The research was done among 400 British adult grocery buyers and was intended for the examination of the top 9 U. name awareness. channel relationships etc. This measurement of the added value spawned for the observers represents the equity of the brand.K. therefore emphasizing the difference between the variety of similar products and services that appear on the marketplace. This cognizance enables the products and services to command the higher prices on the market. brand associations to perceived quality and other proprietary brand assets such as patents. There is still no common viewpoint to how to measure this added value that the brands give to an ordinary product or services. who tried to define the brand equity as “a set of assets and liabilities linked to a brand. future purchasing and profits. A series of unsuccessful attempts have been made. thus generating significant amounts of profits for those who make them. This measure was based upon five indicators:
. Nowadays. 51) According to his opinion this set is grouped under five categories which include brand loyalty. supermarkets and grocery stores.result from marketing a branded product or service compared to those products and services which are not branded (Lane Keller 2008). yet helpful. 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. brands are considered to add value to the products and services. There’s absolutely no evidence that these categories are related systematically to the brand equity. perceived quality.
It reflects the risk profile. market leadership.0 was considered strong and therefore regarded as an indicator of future behavior. stability and the global reach of the brand.
Admiration for a brand Affinity to a brand Perceptions of the brand innovation Popularity Price
A result of 3. This aspect measures the brand equity regarding how much the brand is worth as an intangible asset. taking the “ceteris paribus” into consideration. Among the ones who had this kind of result and even bigger were Tesco and Sainsbury. The discounted rate is a subjective rate determined by the Wall Street journal equity specialists. PRICE OF NO NAME PRODUCT – PRICE OF THE BRANDED PRODUCT (equivalent) =
The article regarding this you will find attached in the appendix http://en. 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. 2 Others say that the brand equity is measured according to the level it operates on.org/wiki/Brand_equity
. the product level and the consumer level.wikipedia. The product level consists of comparing the price of a no name or private label product to an “equivalent” branded product. According to this claim there are three levels and those are the firm level. 3 The firm level is measuring the brand regarding the financial aspect.
jpg . Starbucks. Harley Davidson. It was also noticeable because of the distinctive package design and also somewhere along the way someone thought of a mix with a lime. and the brand recall which is the simple. this beer was one of the cheapest beers to be found in Mexico.BRAND EQUITY The consumer level is measured by mapping the mind of consumers to find out what associations are created with the brand.com/images/beers/corona_20logo. The popularity of the beer increased when the students returned to the colleges. PICTURE22: CORONA LOGO
SOURCE: http://www. immediate recognition and memory of a brand. During this time the idea of riotous spring-break vacations was developed around the colleges in the U. dirty dancing.2009. In the 1980s.04. It measures the BRAND AWARENESS and the BRAND IMAGE.03. The BRAND AWARNESS is the realization by a consumer of the existence and availability of a particular product. wet T-shirt contests. The stories told usually included 39
. Chanel. The striking point for the Corona Beer was its cheapest price due to which it was the most appealing for the students.stirnyc. Corona beer. and all the time aired in the media. 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. Disney. motorbikes. coffee. Let’s take as an example the Corona beer. or entertainment. When one thinks about drinks. All of these have discovered a way to make their name more appealing and therefore always recognizable. as well as sexual escapades. Among the brands which have established this kind of level of brand equity are Coca Cola. they always pop up in the minds.S. high fashion. This vacations were major gatherings which usually tended to grow into excesses such were the 24/7 drinking.
Their success story was delivered completely by the word of mouth.com/2007/02/exploring_brand.html. and it was only thanks to the students with whom a strong emotional bond was made (Holt 2004. value. all with one goal in mind: TO ENHANCE THE INTENSITY IN THE CONSUMERS’ DECISION. 03. This was one story where a strong brand recognition and brand recall were created.2009. According to it the consumers’ attention is directed towards five components (awareness. accessibility and emotional connection) which are working with joined forces in order to create that added value within the brand. relevant differentiation. Although later on the Corona producers had some difficulties due to their lack of advertising and promotion.brandingstrategyinsider.
. but it became the drink of choice among young professionals as well (Holt 2004). 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. Another measurement is the so called “Blake project”.4 In continuation there is a picture of the “Blake project” graph Graph 1: “BLAKE PROJECT”
SOURCE:http://www.16). still the fact remains that they had established huge brand recognition and brand recall in very short period of time.04.the mentioning of the Corona as well.
These were the elements which the brand equity is composed of. However the experts stay optimist thinking that all of this systematic collections and analysis may at the end bring enlightenment. Except for the marketing activities they can also be formed as a result of prior experience. good luck with that one is all I can add. 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). public relations and promotion. Still the fact remains that there is such thing which creates value for a given product or service. These linkages can be developed in number of ways. for someone who is allergic to them a brand specialized for peanuts will always produce depressing memories and emotions. constructive associations.
. We all know that a positive brand is a result of effective marketing through advertising. Or let’s take peanuts for example. Some used “hard” measures such were the market share and the relative price and others used “soft” measures such as liking and perceived quality. Whether the perception of the brand is superior or just average depends on how strong these linkages are. For someone who loves peanuts. to a Republican this brand will be always associated with negativity and therefore generate negative brand equity. as well as the assumptions consumers make when looking at the logo. Well. the slogan. because in this case is both yes and no. Ever since the appearance of this phenomenon people whose domain was in the branding field started to develop the concept of the brand equity. The answer is not that simple as it may seem.The other brand source is the creation of the brand image. they will always generate strong. the country of production. 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. word of mouth (which tends to work the best). the people involved in the company. However. there still remains one question that hasn’t been answered up until now and that is whether there is such thing as negative equity. On the other side. However. The brand image represents the sum of all the unique associations constructed in the minds of the consumers. if we take as an example the “Democrat” brand in the politics.
jpg. 05. In continuation you will find enclosed the pyramid for the customers’ based brand equity model. The model is called THE CUSTOMER BASED BRAND EQUITY MODEL (CBBE).67).3. What Kevin Keller did was create and develop a model which determined what exactly makes a brand strong and how one should build it. According to him the CBBE occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong.2009.2. because it approaches the brand equity from the customer’s perspective. Graph 2: Keller’s customers’ based brand equity model
SOURCE: http://buildingstrongbrands.com/14121980/images/006/004. favorable and unique brand associations in his/her memory (Keller 2003. 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.04. The four steps of brand building A significant step forward in the building and measuring of the brand equity is the Keller model. 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
In this section there are two brand building blocks. Let’s take as an example the brand Disney. Although the salience of the brand is the essential rule for creating the successfulness of the brand still it isn’t sufficient. 2001). 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. 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. People know this brand very well because of the fact that they have established a perfect. enjoyment. By creating. the brand performance and the brand imagery. this model represents a “branding ladder” with each step dependent on achieving the previous one (Keller 2001). The first step is answering the question “Who are you”. 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. 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. The key elements on which this step is build upon are the category identification and which needs are satisfied. relaxation). 2003). marketers need to convince consumers that there are differences between brands and thus create brand equity. Consequently. 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. That’s why the second step is created which answers the question “What are you”. unmistakable category identification (entertainment park) and recognition of which needs are satisfied (the need for having fun. 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.
Starting with these steps.
the personality and values and the history. 2003). It creates dimensions which inflict prominent difference to the brand. to be more precise it states the responses which are coming from the customers’ identification with a certain brand.67). These dimensions are the actual attributes and benefits which contribute to the significance of the brand. with a ribbon which conveys a message that screams out loud about leaving all the worries outside the park. consideration. aesthetic and economic customer needs and wants in the product or service category. by making it something that stands out in the human minds. This step is the result of the people’s opinion.The brand performance basically points out that the product itself is in the heart of the brand equity. The types of judgment made by the consumers are dependent on the brand quality. Disney has established perfect brand performance and brand imagery. The third step emphasizes the proper customer responses to the brand identification and meaning (Keller. The brand imagery refers to the way people think about a brand abstractly. heritage and experiences. The other component which inflicts the responses of the people is the brand feeling. According to this the brand imagery reflects the extrinsic properties of the product or service. As far as the brand imagery goes. credibility. Disney has managed to create suitable history enriched by the customers’ personal experiences all of these wrapped in a package that says entertainment only. and thus evoke personal satisfaction. It describes how well the product or the service meets the customers’ more functional needs. derived from the strength of the brand as well as the relationships incorporated in its essential 44
. 2008). as well as superiority (Keller. It satisfies the customers’ functional needs for relaxing by offering variety of amusing ways to increase the level of their enjoyment and entertainment. making the scenery more appealing and concentrated towards the intangible aspects of the brand such as the user profiles. as well as putting an emphasis on the extent of the brand which satisfies utilitarian. It is divided among two dimensions: the brand judgment and the brand feelings. as well as increasing the strength of the product or service offered (Keller 2008. the purchase and usage situations. 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.
The creating of a deeper attitudinal attachment through marketing programs can contribute to the actual enhancement of the brand loyalty. In order for it to be established it requires strong personal attachment. 2008). Here relationships between the customers themselves are formed. as well as fierce intensity (the depth of the psychological bond) and high level of activity engendered by the loyalty (the repeat purchase rates). taking participations in chat rooms etc. visiting brand-related web sites. (Keller. The forth one is the active engagement where the strongest affirmation of the brand is established. A stronger sense of community among loyal users can engender favorable brand attitudes and intentions. The second one is the attitudinal attachment which is the customer’ going beyond viewing the brand as something special. The forth step in the CBBE is asking the question “What about you and me”. 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). receiving updates. 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. This term illuminates the type of relationships formed.
. The brand feelings evoked can be mild or tense and positive or negative. the brand creators always work on changing them into positive ones.being. The third category is the sense of community. 2008). thus making statements such as “love” or “little pleasure”. Here the relationships formed with the consumers are all that is relevant. Examples of this category are joining clubs which focus is the brand itself. Whenever there are negative feelings generated. Here brand resonance is all that matters. This is done through the transformational advertising which is designed to change consumers’ perceptions of the actual usage experience with the product. At the end all that matters is how positive the brands are (Keller . The focus is the level of identification that the customer has with the brand and the extent to which the relationships are evolved. so they can act as brand evangelist and ambassadors. There are four categories all of which are extremely important for the establishment of this step. and the extent to which they had been developed.
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. Strong brands have clarity which is derived from both the head and the mind.Graph 3: Keller’s model for Calvin Klein’s brand
SOURCE: www. so emotional concerns are developed in order to fulfill these needs.05. 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.com . Accordingly.2009.
. 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. After all they shaped the marketing activities accordingly to what people need and want.04. rational concerns can only satisfy what one calls utilitarian needs. rather than he wants that something. the ultimate value of the brand depends on the customers decisions only. The answer is that they can not. which means that the loyalty and the resonance are build on the foundation of the “emotional route” and “rational route” of the CBBE pyramid. even though usually they create an illusion where the customer often thinks that he needs something. In conclusion.pvh. but the question is whether they can satisfy the emotional or psychological needs as well.
because deep inside they know that they make them better persons. 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. 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. and people want to believe in those created myths. which bring with them higher profit and greater legal protection.3. as well as ease the decisions making processes they are faced with every single day.3.
. but they are complex things which make the world an interesting place to operate in. 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. The benefits of a strong brand There are a lot of advantages that can arise from having and maintaining a strong brand. simply to make their lives a little bit less stressful. These benefits are essentials not just for creating stronger brand but for the overall performance of the company as a whole. The loyalty developed towards the brand enhances the likelihood for the increased demand for the company’s products or services. 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.
and brand confidence are beneath the surface. It makes the companies to try and think before they react.4.2009. ensuring that the meaning of the brand and brand building concept is properly understood and enforced. BRAND ELEMENTS PICTURE23: BRAND AS ICEBERG
SOURCE: qualisysindia. 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. The brand loyalty.04. the brand was perceived as and compared to the iceberg. As presented in the picture above. communication. This metaphor is still alive today. content. These components determine whether the brand will establish positive associations or negative ones.gif. and appeal.com/images/srs1. uniqueness. likeability. Long time ago. 05. the components beneath the surface are the ones who actually build the foundation of the brand. and above it are elements such as size. vividness. since it has components which are extremely important. but somehow hidden and not seen by the wider audience.
There are two types of brand: the ones which are recognized by the consumer and the ones that are not. 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.si/eng/2_3_brand_pos.php .05. The position that each brand takes will depend on the knowledge gathered by the marketers on four most important topics. the most important step. the first being the determinacy of the target customers. According to the graph shown above the brands are positioned due to whether the customers have heard of them or not.gfk. creating and describing the difference which makes the brand a unique item worthy of possession. that is the ones that have established brand unawareness and those that have established brand awareness.4.04. Robertson The brand positioning is the essential issue which arises when creating a strong and recognizable brand. which leads to the next issue of establishing the core competitors. Brand positioning
“Brand positioning is the heart of marketing strategy. to describing the similarity of the brand with those of the competitors and last.2009. Graph 4: brand positioning
SOURCE: http://www. On the other 49
.1. The ones that have failed to create any kind of associations in the consumers mind are doomed to collapse.
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. Prada. Dolce&Gabanna.php .2009 ). 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.04.gfk. followed by the bargain brands which have high quality and low price. GRAPH 5: THE BASIC PERCEPTUAL MAP
SOURCE: http://tutor2u. they are called the economy brands. and at the end there are the premium brands with both high quality and high price.04. the accepted brands. It divides the brands according to the quality they possess and the prices they have. According to me it’s a very amusing one. There is another interesting division of the brand positioning.si/eng/2_3_brand_pos. Than there are the ones with the low quality and high price. Bershka and Zara are considered to be bargain brands. The fashion brands. 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. Gucci.hand the ones that have managed to develop certain images in the consumers’ minds are divided further on recalled brands and recognized brands. Louis Vuitton are considered to be premium brands.
. The map shows the types of brands created when dividing them among their price and quality.2009. like Chanel. Among both of the groups there are three sub-groups.net/business/images/perceptual%20map.05.05. Let’s start with the basic ones which have both low quality and low price.gif .
Disappointment of the customers is one of the outcomes. The brand function describes the purpose of the brand. and believe it or not it’s the one which is avoided by all means. as well as external partners.2.” As it is can be seen in the picture above the pillar of the brand is the brand mantra. with a crystal clear picture of what the essential meaning of the brand is. otherwise there are unlikable outcomes to be faced. The general purpose of the phrase is to provide the employees. Consequently. It is the core for the essence of the brand. The word “mantra” originates from a Sanskrit word.4. the emotional modifier and the descriptive modifier. which means a chant in a form of a tip that would lead to the fulfillment of what is desired. It is consisted of three dimensions: the brand function. a short three to five phrase that captures the irrefutable essence or spirit of the brand positioning. as well as the later stages of its development. this part should never change. Brand mantras and audits
The brand mantra The brand audit 1 The brand audit 2 DNA
SOURCE: Formitas BBDO Pleon 2008. the promise can not be broken. and for some of them the price to be paid is just too costly. The descriptive modifier clarifies the purpose of the 51
. one should not try to alter it. for Nike the purpose of the brand is the performance. Once made. It is the promise made by those who nurture the very beginning of the simple product. Since it is extremely important. In marketing terms this word is defined as “an articulation of the ‘heart and soul’ of the brand. For instance.
or a high level of perceived quality. 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.
The brand audit represents a comprehensive examination of a brand to discover its sources of brand equity. For Nike. the package. the core is nothing without its attributes. They can be altered based on the preferences of the consumers. It is consisted out of two parts the brand inventory and the brand exploratory.brand. as well as the quality and pricing.
. Therefore. They are established so that they can create a clarity and deeper knowledge of what the brand is all about. 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 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. meaning when the mantra (the promise) of the brand is determined than the marketers can elaborate the brand attributes. as well as create and educe positive associations in the humans’ minds. However. It is created so that both the company and the consumer understand the sources of the brand equity. which can develop further and strengthen the brand image. Whether it is the design. that is authentic (Keller 2008). elaborates the sources of brand equity. This part is called the brand exploratory (Keller 2008). The brand audit is a customer based practice which contributes to the increase of the health of the brand. When the foundation is firmly set. as well as improves the equity. And the third is the emotional modifier which puts an emphasis on the benefits provided by the brand. The brand inventory provides an insight of how the products and the services sold are marketed and branded. 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. This is achieved through the brand audits. it makes no difference. a successful marketing tool and strategy. For Nike that is athletic.
The first dimension is composed out of the first three memorability. PICTURE24: CHANEL LOGO
SOURCE:http://1. It is consisted out of transferability.04. For instance the “Code Red” name for one of the Pepsi drinks contributed a lot to its recognition and recall. The memorability incorporates elements that are extremely helpful in establishing clarity and attracting attention. This category inflicts the brand to be fun and interesting. Therefore. named after the designer Coco Chanel is a name which bristles with perfection due to the fashion icon’s persuasive and impeccable image. Brand elements which affect the human perceptions According to Kevin Keller. An easy recognizable brand name. jingle. controversial ad.07.jpg . It became so recognizable and easy to remember that even a computer virus that infected more than 700 000 computers was named after it. The second dimension focuses on the defensive strategy of the marketers for leveraging and maintaining brand equity. there are six criteria for brand elements which are divided among two dimensions. slogan.bp. poster or even a mascot can aid in the process of creating the memorability in the minds of the consumers.4.com/_KF833Bz_TNk/ScME2GV_QRI/AAAAAAAAAGA/bx Wzqad3-Tg/s320/chanel-logo. Let’s say the fashion luxury brand Chanel. The meaningfulness must contain elements such as descriptive and persuasive.4. 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. The last category in this first dimension is the likeability. Each of these three is representing the marketer’s offensive strategy and brand equity and puts essential emphasis on the brand awareness and salience. adaptability and protectability which are significant determinants of the brand image and positioning. with well developed visual and verbal imagery and all of this 53
.blogspot. meaningfulness and likeability.
. 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. Let’s say Hallmark for instance. It meant “Pepsi Bring Your Ancestors Back from the Grave”. The other set of brand elements as Keller explained are relevant when the company is facing with competitors. Clariol introduced the “Mist Stick” a curling hair iron in Germany. The term transferability relates to brand extensions as well as enlarging the brand on global level. so they are extremely helpful when dealing with the maintenance of the brand equity.jpg .wrapped with aesthetically pleased design. The vaguer the name is the more transferable it is on foreign markets. so the creativity must take its place instead.org.au/content/upload/images/corp/partners/hallmark/Hallmarkplum-and-gold-logo. The likability helps each and every time when the possible benefits of the future are a little bit blurred. These names don’t put boundaries for the companies. or Amazon brand. Whenever in this situation. And my personal favorite is when a hair product company.nbcf. The word mist was a German slang for manure. For instance. PICTURE25: HALLMARK LOGO
SOURCE:http://www. 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. imagine putting that on your hair. so that they can enlarge in every category they want. Pretty funny. isn’t it? Another example of such hilarious brand mishap is when Pepsi translated its slogan in Chinese market “Pepsi Brings Back To Life”. There are a lot of funny examples of transferability mistakes. Now.04. when Coors translated its slogan “Turn it loose” into Spanish it sounded like “Suffer from diarrhea”.
08. Accordingly. The adaptability targets the issues that arise regarding the flexibility over time as well as the updating process. The logos and the characters on the posters.gif . endured in those times when the company started to operate. Let’s take for example the Louis Vuitton brand. a value which doesn’t correspond to the perfection they are creating. the package. it is becoming more and more difficult because it has taken a great swing and strives for globalization. bringing back the memories.2009. It refers to the legally protected brand elements on an international level. or any other attribute of the brand should be developed so that it can not be easily copied. 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.watsonwyatt. because than the uniqueness which the brand possesses will vanish completely. the name. The third component of the second dimension is the protectability.PICTURE26: AMAZON LOGO
SOURCE:http://www. 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.
. registering them with the appropriate legal bodies and defending them against any competitive intruders. which is one of the most important segments when building and maintaining strong brand equity.04.com/images/database_uploads/13027/figure1_porters.
its heart and its impulse. There are few segments which help in the enhancement of the perceived quality and value. such as the speed. accuracy. If the performance of the product is increased. in marketing terms the God is the product. Therefore. consumers usually combine the quality performance with the cost perception.5. the performance level of the product doesn’t necessarily always depend only on the product quality. 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. the promptness etc. the features are better shaped. in order for a brand to be victorious. However. which doesn’t necessarily refer to monetary cost but also include opportunity costs such as time and energy spent. According to the consumers the perceived quality is how they see the brand regarding the quality and superiority surrounding it. HOW THE BRAND AFFECTS THE VALUE OF THE PRODUCT? This chapter is the most important. which stands as a pillar for the value. Therefore. the durability and serviceability are all upgraded. the reliability. the conformance quality is improved. 5. by improving the functional benefits.1. Thus. 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. Michael Porter developed a model called the value chain according to which the level of the customers’ 56
. since here I will prove my thesis by examining different brand strategies which have great effects on the value of the product. the process benefits and the relationship benefits. In order for a value of a brand to be established. and if the style and the design are enhanced than one can brag about its brand having high perceived quality and value. From the customers perspective the perceived quality and value of the product are what shape their opinion about the brand. a brand can easily find its way one step higher on the latter of success. It has other dimensions as well. Product strategy As the Bible says and first there was God. What makes the brand successful is the product. It is the very core of the brand. The improvements through the years made on certain products have made it difficult to surpass the customers’ expectations. After that I will show how the customers perceive and choose brands.
watsonwyatt.04.04.2009. If the costs are reduced and the performance improved in any of these activities. outbound logistics.2009. as well as on the four support activities which occur through the primary activities (firm infrastructure. operations. marketing and sales.gif .jacksonmshog. than the brand has created a substantial value.com/chapter2496/Images/HarleyDavidsonLogo.10.com/images/database_uploads/13027/figure1_porters. and services) . Graph 6: Porter’s value chain
SOURCE:http://www.gif . human resources management. technology development. and procurement).perceived value depends on the primary value creating activities (inbound logistics. 57
PICTURE27: HARLEY DAVIDSON LOGO
it is natural for one to think that the concept is applied to products only. An instance of this mass customization is that of Dell Company which is creating built-to-order computers. According to this they can add to the product they purchase their personality and this is what they are appreciating the most. All of this being said. To them it feels like they are treated specially. and hosting special customer events or programs. “Loyalty programs reduce defection rates and increase retention. “Customization addresses the need for individuality” By an unknown analyst Creating this process the customers can clearly distinguish themselves from others. However. 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. One of the segments here is the mass customization which is based on the customers’ preferences assembled in a product. Another example is that of Harley Davidson which customizes its motorcycles according to its customers’ wants. formulating and managing communication programs. These preferences nurture the dreams that customers’ have and according to that it increases the level of the perceived quality of the brand. You can win more of a customer’s purchasing rate. It is based on the premise that current customers are the key to log term success. 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. Among some of these aftermarketing activities are the conducted customer surveys.From the marketers’ point of view creating relationship marketing is what creates the value. The after-marketing activities are just as important as the marketing activities. usually in the banks or travel agencies. They can tailor their services accordingly to what people want.”
. the concept can be applied to services as well.
PICTURE28: VICTORIA’S SECRET LOGO
SOURCE:http://callitout. In order for consumers to buy the offered product or service the performances and advantages attached must exceed their expectations.com/quotes/wp-content/uploads/2008/03/victorias-secret-logo. That being said.2. They must listen to their loyal customers’ suggestions and complaints. due to the fact that the customer is the member of the club. marketers must find a way to learn about the consumers’ perceptions regarding 59
. since they can not stay static. They recognize a really good value when they see one and the really appreciate transparent prices. Another thing which affects the value is how frequently the brand is discounted. For instance Victoria’s secret offers discounts to each customer that has made a prior purchase on a regular basis. so that it can operate with a profit. The perceptions of the consumers are shaped according to the price of the brand.” By one GM executive The range of the acceptable prices is called the price bands. than the people’s perception of it is that the brand conveys a massage which says that it contains a great quality. These programs are often created through the establishment of different mixture of newsletters. Another segment which relates to the marketers is the creating of the loyalty or frequency programs. discounts. as well as engage people in the programs.10.gif . For both terms to be satisfied. If the brand is tagged with a price label that says expensive. It also gives a card which enables the customer to purchase more and more.04. it is only natural that the consumers’ perception of value must exceed the cost of the company of making and selling the product. 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.2009. They are obliged to change the performances. 5. “The customer is smart.
so that the companies can establish a certain price level. The first one is the value pricing.10. as well as the profit goals of the company are being met. PICTURE30: NIVEA LOGO
SOURCE: http://www.2009. PICTURE29: TACO BELL LOGO
SOURCE:http://statenislandnyhomes.cosmetico.04. but if they go too far than they may loose the loyalty developed with their customers. in order to gain competitive advantage. 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.com/Taco_Bell_logo2%5B1%5D.png . As a conclusion. there are two pricing strategies which are the most relevant to this issue. product costs and the product prices so that the customers’ needs and wants are put on the first place.04.the price.2009. If they underestimate the power of the customers. Marlboro.gif. Accordingly. 10. 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. This kind of consequence experienced the gigantic company Philip Morris with its cigarette brand. The most important determinants while setting the price of the product are the costs derived from making and selling them. as well as the prices verified by the competitors.ro/images/800px-Nivea_logo. the strong brands can command price premiums. and for the market leaders to even establish price premiums (Keller 2008). and may find a pretty damaging consequence as a result. The price strategy may also be enforced as a result of the reduced operating costs. there is a price to be paid at the end. Its objectives refer to establishing the right mix of product excellence. 60
This can be done by directly asking the customers to propose their insight in the determination of the prices (Keller 2008). since the products are fresh. 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. A great starting point in determining the price is to estimate the perceived value adjusted by cost and competitive prices. As said before. However this reduction cannot be on the basis of lower quality. The company always strives for introducing new or improved added value products. the consumers are willing to pay premium prices when they are a hundred percent sure that they really are worth it. It’s that easy for them. since they are the only things for which the customer is ready to pay more. 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. just like they turn off the light in their homes they can also turn off the light future of the product. As a conclusion. This enables the people to be more comfortable with the higher prices. so it is only natural that it increases the prices. An example of this can be Nivea. That is why this is the most important part for the marketers when launching a product. as well as product costs and product prices.This strategy incorporates in it the product design and the product delivery segment. Accordingly. the perceptions of the consumers are shaped according to the benefits offered by the promoted product. effectiveness or efficiency.3. The worth is due to the added value which the product must possess so that it can conduct the price on the marketplace. having in mind that they pay for something which is fresh and advanced cosmetically. 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
. The other part of the value-pricing strategy is the lowering of the costs as much as possible. 5.
the most used form is the retail form. They all make the same product with small alterations which can be of great importance. The pull strategy on the other hand is employed by the manufacturers who are obliged by the customers’ demand or preferences towards some brand. The creators of the brand may run on thin ice. The push strategy refers to pushing the product through the distribution channel due to the fact that the manufacturer wants to reach the customer. (Keller 2008). Examples of this are Sony. there is a disadvantage. but what remains unaltered is the fact that they are selling directly from the company to the prospective customers. The first one is the push and pull strategy. There are many types of indirect channels and here are some of them. The companies are usually using these options of personal selling when dealing with either high information need or high product customatization. the channel strategies have embedded in themselves the design and the management of the intermediaries. style. e mail. Panasonic. due to the fact that the store might get more attention than the brand itself.
. The other one is the retail segmentation. There are two most important channel strategies: the direct channels and the indirect channels. and on the other side Acer and Hewlet Packard. They are conducted either by mail. Here the greatest part is played by the branded variants which are items created by the manufacturers for entering changes in color. 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. features etc.Accordingly. which help to conduct a business. However. Here a portion of the advertising is paid by the manufacturer due to the retailers’ efforts for promotion. design. However. The direct channels offer variety of selling alternatives. The indirect channels are consisted out of a number of different types of intermediaries. In this way they have greater chance in affecting the value of the brand equity. but all of them have the personal contacts as their core. The third part is the cooperative advertising. since they have established the most direct contact with the potential customers and existing ones. phone. as almost everywhere. in person visits.
merchantcircle. as well as Hallmark and Nike.passporter.jpeg . However there are still limitations and consequences surrounding this form.04.2009. such as the potential conflict with existing retail channels and distributors (Keller 2008).22. as well as resources and contacts so that they can effectively and efficiently operate as “intermediaries”.04. The second way of enforcing this direct channel strategy is by creating shops within major department stores.
. The primary reason behind these shops is to emphasize the depth and the breadth of the brand.PICTURE31: DISNEY STORE
SOURCE:http://www. For instance Victoria’s secret company owns each and every one of its shops.22.jpg .com/28039404/20logo_medium. so at the end their shops were sold to The Children’s Place. 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. One of them is that the retailers lack skills.2009. From another point of view another issue may arise. As for the indirect channels here too the possibility of various mutant forms exists. PICTURE32: HALLMARK STORE
SOURCE:http://media. The first one is creating company owned stores.com/articles/Hilton/HiltonDisneyStore. As was the case with Disney shops when they struggled to find the right retail formula.
04.2009. the people need something that will lessen the burden of the spent time in the stores searching for the right and perfect merchandise.merchantcircle. Some of the examples are Oriflame and Avon. videos.am/t/oriflame. This is done by selling the products through catalogs. Due to the fact that we live in a world where no one has time for anything.png .com/28039404/avon%20logo_medium. There are companies which are conducting their business for years in this way. Such companies are Amazon.Com.04. anymore.22. Faced with the age of the Internet.2009. First of all they are practical and less time consuming that the actual physical purchase in the stores. as well as Victoria Secret and Women’s Secret and in the past few years their number is constantly increasing. PICTURE34: AVON LOGO
SOURCE:http://media. 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.jpeg . 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.designer.22. Therefore the number of consumers buying online is drastically increasing. or physical sites in order for the customers to feel appreciated and closer to the company’s agenda of creating an excellence and perfection.PICTURE33: ORIFLAME LOGO
. the web strategies of selling the goods are becoming more and more attractive for all the people around the world.
It represents the creative way of conducting a business based on customers’ preferences and tastes in certain category.4. due to the fact that having too many channels can lead to conflict between the channel members. with just one look at the TV. the advertising.larocavillage. It plays with their heads by projecting beautiful promises. There are many communication options. among which is my personal favorite. This is the venue where the magic of the business is conducted. 5.com/common/graphics/logos/Womensecret. retailers must be careful when mixing the strategies. Therefore.
“Advertising is the art of convincing people to spend money they don't have for something they don't need.
. to avoid facing a chaos. or one eavesdrop to the radio.” By William Rogers The essence of the advertising is exactly this maneuvering the people. there is often a risk involved in this mixture.PICTURE35: WOMEN’S SECRET LOGO
SOURCE:http://www. 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.23. Companies do not limit themselves to only one channel.2009. They often enforce some kind of mixture of the previously elaborated channel strategies. or by just one glance on a billboard.gif . and than again having too few can result with missing the market opportunities. painted by the most skillful people in the industry and wrapped up with a dose of reality. That’s why they say that “Advertising is the art of making whole lies out of half truths”. This is a powerful tool which helps marketers to play a little bit with the customers’ minds. However.04.
for the brands such were Bud Light beer and L’Oreal. as everything in life. Since.04. The other issue arising is the proliferation of new TV channels.24.Various researches have shown that the advertising boosts the sales of a company. On the other hand. and Desperate Housewives.
. from 19 until 22. If the ad is something which is not connected to the product. the print media. due to the fact that it vividly demonstrates the ingredients of the product and emphasizes their consumers’ benefits. the TV advertising has its downsides as well. For instance a 30-second spot on a popular television show.com . the most popular television. Ever since the TV was invented the advertising began.absolute. whenever there is some commercial. In Slovenia. it is all about grasping the thoughts of the human mind and the mysticism surrounding it. I can say that the pioneer in the advertising industry is the television set. which is the prime time (Formitas BBDO Pleon 2008). as well. Consequently. is quite difficult to establish some detailed managerial guidelines.2009. than the consumers will have trouble with grasping the concept of the ad. Among them are the television. (How to turn junk mail into goldmine – or perhaps not. So. Examples of this boosting are the advertising done in the period of 1989-1991 recession. 1995) Their finding claim that advertising does not just boost the sales. thus making the companies more profitable. place advertising. With the help of the advertising the volume of the sales has increased. PICTURE36: ABSOLUTE AD
SOURCE: www. as well as enhancing the brand awareness. the TV advertising has a tremendous impact on the brand equity. but it helps facing the difficult economic times. There are several options where advertising as a process can be conducted. However. during the 2007-2008 cost as much as $400 000 for shows such as Gossip Girl. 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. The economist. however. the radio. the cost of TV ads is very high. which enables them to switch the program. and the interactive advertising.
consistency and branding.24. The sales for this two brand skyrocketed when they were shown.04. since the consumers only glance through the ad. This means that if the print is not packaged in this way than the ad will not be noticed at all.com/watch?v=yTO4FHf8MBs (Chanel TV ad) www. and all of the information must be presented in a eye5 6 7
http://www. as well as it transfers the intended message.2009. Despite that they offer high range of customization. the “1984” Apple commercial and the Catherine Zeta Jones’ Visa commercial5. 7 The print medium is a marketing communication option which provides more passive approach. Even though there are disadvantages to this concept. Designing a web site is not as easy as it seems.absolute.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. As shown on the left side the most famous print ad is the Absolute’s print campaign.youtube. In order for a brand to have a successful print ad it is necessary for it to create a clarity. There must be information relevant to customers’ needs and wants. 6 The art within them just bristles out and captures the consumers’ attention. by figuring out how to break the clutter to attract the attention of the consumers and at the same time deliver the wanted message.com
. (Keller. The two main print media are the newspapers and the magazines. 2008) PICTURE37: THE MOST FAMOUS ABSOLUTE AD
SOURCE: www.youtube. Web sites are seen as low cost marketing options. still the fact remains that well designed and well executed TV ads can affect sales and profits. they also don’t are not molesting the customers with unnecessary information.5 2005 perfume ad with Nicole Kidman.absolute.com .
That’s why there are some options according to which this category is conducted. such as billboards and media. An excellent example of how to create a successful webpage is the Victoriasecret.com/_rsjhJ_kZsI/R1SxdBAWOTI/AAAAAAAACe8/0Ddebm7cI4Y/s1600-R/VS. elevators. which is defined as advertising outside the traditional media.com. advertisers can buy spots on garbage cans.8
More funny and creative billboards. fonts and effective deliverance of the corporate message.bp.04. 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. and work. The picture is representing a billboard for the Gillette razors campaign. gasoline pumps. restaurants and shopping centers. This is the challenge they must overcome in order for the consumers to visit the page. play. and nowadays they even appear to be on busses. airlines. Billboards are all over the places.2009) The last.catching pages with suitable colors. airlines. movies.gilette.jpg (24. subways and trains.blogspot. you will find enclosed in the appendix. To make this whole situations a little bit more bizarre.com
. but not least category of advertising is the so called place advertising. 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. This category focuses on targeting the people in the places where they shop. eat. www. PICTURE38: THE WEBPAGE OF VICTORIA’S SECRET
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
more and more companies are convinced in the contrary. Cheerios. Ford. Pepsi. design. They are a valuable asset to the enterprise and the brand as well. That’s why giant companies such as Coca Cola. The most helpful tools in the process are these marketing options. Philip Morris and others are creating their strategies on the principles of these options.
. the value of the product can and will be effectively increased. A lot of companies enforce them and not just one. but to the company’s health as well. as well. On the other hand. since the advantages they offer are of great magnitude and carry with them a lot of success and power.5. This means that aspects such as quality. but a mixture of all of them. Each one of us is an individual with their own thoughts and feelings. 5.These were the marketing options which can contribute to increased and improved overall performance not just to the brand. By successfully understanding the customers’ needs and tailoring the products based on them. 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. once you get that competitive advantage of having a successfully established brand name. There still remain some commonly believed facts regarding this issues which can be summarized as follows (Randall 1997). promotional efforts are all taken into consideration. which means that every
single segment is being analyzed. Therefore there is no generality when talking about the reflections which are coming out of the human’s mind. than you have to work hard on maintaining the loyalty and the image. the human mind is a complex place where confusion is always present. Being as mystical as it could be. price. They believe that they can influence the people’s behavior by understanding how they make the decisions. However. so that consumers can make their final decision.
First of all the people perceive the brand as a whole. and not just when it is established but for creating of the brand name. This is how the created brand can affect the value of the product.
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
jpg . Opel. As an example I will only mention four of them.in/images/fiat-logo. out fashioned design. The driver image
sums to younger population which
have limited income abilities.24. high frequency of troubles. therefore limited choices when picking the brand of the car.04.uniquebuilders. As a result of these negative generated connections to the brand. Negative feeling have been generated by the attributes connected to this brand. They have shown that when it comes to the ascribed attributes and values the brands Peugeot. Renault and Toyota were the ones which elicit the most positive associations.jpg .24. based on their attributes. attributes such as outthrust. as well as weak technological combination. This means that the brands are strong and stable. Those that tend to generate negative associations are Ford. This brand has the worst reputation among all of them. The first one is the Fiat brand.2009.04.2009. PICTURE45: FIAT LOGO
SOURCES: http://www. values and which drivers generation tends to purchase them. therefore no bright future on the Slovene market. each one of the brands had its profile done.perception. Fiat has no perspective.biz/ceo/wp-content/uploads/2009/02/ford-logo-big. high fuel consumption. PICTURE46: FORD LOGO
SOURCE:http://ceoworld. Skoda and Fiat.
According to the analysis made for the car brand perception.
blogcdn.com/MotorCity/5866/citroen_logo3. However. not enough developed dealers’ network.24. stability and excellence are just a few of them.autoblog.The second one is the Ford brand.gif . The only positive attribute which have been improved throughout the years was the low fuel consumption. Here the rule of the “bad reputation follows” is applied. Comparing to the previous years this brand had lost in perception due to its high price and traditionalism.24. However. and traditional contribute only more to the fact that this brand must work on its brand image. PICTURE47: VOLKSWAGEN LOGO
. Durability.com/www. reliability. due to the perception that it is mainly man car.jpg . Strong attributes have been generated by the brand.2009.2009.geocities. PICTURE48: CITROEN LOGO
SOURCE:http://www.04. the fact still remains that VW is strong and recognizable brand on the Slovene market. old. The drivers’ imagery is one proof more that they need to do something n order to reach the younger population. and more convenient for older people than younger ones. if it wants to be successful on the Slovene market. The attributes such as high fuel consumption. as well as expensive car maintenance.04. This brand has a bad image. safety. The third one is the Volkswagen brand. judging by the drivers’ imagery they are mostly preferred by the men and older people.com/media/2007/08/vw-logo-jpeg.
UK. Germany. as putted by one department store pioneer. romantic. and good advertising. This is the reason for the wide recognition and recall of the brand. In continuation. in the research there are perception maps which are based on different criteria. Similarly. fun. Citroen is more family brand. educated. youth. Trouble is. in reality things are a little bit shabbier. frequent brand recall. According to this. and cute car. which is the most stable part of population. and Renault. He started doing the research concentrated on the people’s “buyology”. For instance. due to attributes such as comfortable. Ford and Opel are considered to be out of date. as well as its strong brand image and awareness on the Slovene market. The perception of the car refers to its comfort and frolic. Citroen and Peugeot are considered to have great shape. and active people. however. good looking and comfortable. values. It divides the car brands among four different segments.
. This brand is perceived to be mainly a female brand. gentle. VW and Toyota are considered to be technologically advanced. Skoda and Fiat are considered to be cheap. According to the perception map of values. and personality. since it can offer variety of designs targeting the youth people raging from 18 – 40 young. I don’t know which half”. appropriate price. 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. Citroen is and I quote above all pleasant. The first map is the perception map of attributes. In theory these practices work. you’ll never know whether the responses you get by people will tell you everything you need to know about the potential market. likable. all of which were smokers. sympathetic and young. followed by Opel and Ford. Japan. It was conducted among 2000 volunteers from five countries. USA.The last one is the Citroen brand. John Wanamaker “Half of my advertising budget is wasted. As far as the perception of personality goes. such as attributes. and China. the VW and Toyota are the strongest positioned ones. This testifies for the fact that the human brain is a mystery to the marketers. a Danish advertiser and researcher.
the portion of the brain being used lights up like a red-hot flash. a research discipline which is still in its infancy. yet Coca Cola was still keeping the throne. Before this study was conducted. What the study of 2003 showed was the reason for this divergence (Lindstrom 2008). and I quote “cigarettes companies seem to come up with innovative ways to kill us” . For the purposes of conducting brain. and yet the results of the research were pretty shocking as they reveled the truth hidden in the subconscious level of the human mind. And that is how the lethal marketing skills began to develop in the world of the cigarettes’ corporations. the people who were surveyed answered confirming this statement. regarding whether or not the warning labels putted on the cigarettes have effect on them. It represents a functional magnetic resonance imaging. By tracking this. Accordingly. each one of the participants were asked several questions. presentations and phone calls. which are small.The research was based upon the neuromarketing. scan technique such as fMRI was used. but instead they activated the “craving spot” which persuaded the smokers to light up. During the fMRI. According to this. Further on. The results showed that not only the warnings failed to have any affect whatsoever on smokers. 2008). Pepsi should have been the market leader in the industry. 79
. by revising the famous “sip” test for Coca Cola and Pepsi. by the name “the Pepsi Challenge”. which can be consumed during brief moments between meetings. with no deviations whatsoever. The “sip” test was a study performed in the 1975. As putted in his book. which is symbiosis of science and marketing. the most advanced brain-scanning technique. More than 50% of them claimed that they liked the taste of Pepsi better. there have been similar ones from the previous years. He says. The first part of the study was the simple question “What do you prefer Coke. nowadays. high tar cigarettes. Pepsi or no preferences?” The results were the same as the one in 1975. a machine worth around $4million. the neuroscientists can determine which areas are working at a given point of time. this study helps find out how our unconscious minds control our behavior. branding and advertising (Lindstrom. by revealing the hidden truths behind our purchasing habits. Majority of the answers were not surprising. Martin Lindstrom putted an emphasis on just how insignificant the warnings on the cigarettes are. as he offers the example of the Marlboro intense cigarettes. One of them was performed in 2003. The people were trying the both beverages and were asked for their preferences.
The strong. based on this technique. 11 Although it was very hard and exhausting process. the taste and the sight. as he thinks that by the end of 2012. which says “I’ll have what he/she has” . positive associations connected to the Coke brand made it to overrule the Pepsi brand. 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. the marketers will
The article is concluded in the appendix
. 2008). As Lindstrom put it “Emotions are the way in which our brains encode things of value. many of the rituals habitually performed are actually manufactured by companies and marketers to attract the consumers to purchase their brands and products. the touch. the subliminal massaging is still taking place today. Among some of the shocking results found were that the product placement doesn’t work. The results were 75% of the subjects claimed to prefer Coke. and that is that sex doesn’t sell. and the article “Orwellian” in the New York Times Magazine. As every successful researcher before him. The study performed by Martin Lindstrom differentiated from the previous ones due to the unlimited range of brands. since it compared the technique with “kind of super mind reading device” that messes up with the citizens’ privacy and “mental freedom”. Yes you’ve read correctly it DOESN”T (Lindstrom. even though it was banned in the 1957. He had to find 8 multinational corporations and 2081 volunteers which will support his project. and eventually claim triumph. still he managed to find them and conduct the research at the end. as well as the smell. There were other studies conducted as well.The second part was to let the test subjects know whether they were sampling Pepsi or Coke before they taste it. there is a mirror neuron. in order to grasp the meaning of the brand in consumers’ minds. faith and religion have enormous impact on the purchasing decision making process. Than. Lindstrom had too troubles with the financial part. according to Lindstrom is pretty clear. however they were also based on one particular brand too. Another disturbing common myth dragged through years was seriously shaken with the findings. the sight. what is next helpful tool for marketing? The answer. In continuation. was not of any substantial help. So the question remains. and a brand that engages us emotionally will win every single time”.
completely abandon the quantitative and qualitative research and concentrate on the fMRI instead. All I can add to that is that we’ll see how it plays out.
6. the security which one lacks can be provided by the simple deliverance of a promise made by product or service. screaming on the top of the lungs. In this blurred world of values and principles. I have created a clear mosaic of history. through determining variety of strategies. As I said before. and not robbed and deprived from the necessities which you eagerly must have. you’ve never been before. people are in love with the promise of security and safety. The recognition and recall of that promise gives immortality to that product or service. there’s no one to rely on. as well as the perceived quality incorporated in the core of the brand. people want to use the sentence “Dreaming can get you nowhere”. Nowadays. but somehow in the branding world is the vision that can take you places. recommendation from experts. which strives for endless perfection and enhanced satisfaction. infusing power that can convince the customers to believe in those values. and you can achieve heights that are only within the Gods range. 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 that’s why they make their purchase based on the confirmation from other people. all the way to establishing tools for achieving increased value of the product.
. so that you can feel safe. marketing activities or strategies. I have provided a clear image of how the value and the fate of the product depend on the excellence of the brand. enriched with marketing activities. COCLUSION As I said before. Leading you through the centuries. Whether these strong associations are made based on merits. They adore avoiding the risk involved in the decision making process at all costs. embezzled with the brilliance and unique entities of a product or service. From exploring the consumers’ minds. this thesis captures the essence of the brand and its importance for the future performance of a company. Having a well established and simple vision is something which builds the core of the brand and something which stands out in the crowd.
The emphasis of the importance of the marketing communication tools (such as
advertising. 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. Nike. Corona beer. This is the reason why the branding process infuses added values in the product. The proofs are as follows:
Success stories of the world’s first brands that emerged. Chanel.In this thesis I have provided fresh and new information. Louis Vuiton. as well as the ones which
appeared later on (Bass and company. The various evidences provided in my thesis are as firm facts which can only contribute to the acknowledgement that the thesis cannot be shattered. public relations and publicity. as well as create emotional bonding with their customers. the fMRI technique which results are published in 2008
. Coca Cola. which shattered the way we feel about brands. All of these segments give the product and service power to elicit suitable associations. The revolutionary part was the fMRI technique. placement. promotions. pricing. Apple. thus making it more desirable and preferable than an ordinary product with no labels attached. and how our subconscious minds are far more important in the process of deciding what and why we buy. DeBeers. 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.
Roselius. Keller. Randall. England: Milward Brown optimor. Citroen research 2000. 2008. Brand Simple. 2000. 2nd edition.
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.. Article 5: Orwellian Dream Come True: A Badge That Pinpoints You……….4 4.LIST OF APPENDIXES 1.. Article 1: Tesco losing brand loyalty………………………………………………1 2.3 3.. Article 3: THE SMOKE CLEARS AT MARLBORO………………………….11 6. Article6: The Porter’s value chain model…………………………………………14 7.... Article 4: Parade Magazine: How Subliminal Advertising Works…………….8 5. Article 2: The Virgin brand : LETTERS TO THE EDITOR…………………..
Sainsbury's marketing campaign had laid a solid foundation for long-term success.0 is considered strong and the reading is regarded as an indicator of future behaviour.7. "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. Waitrose rose from 3. while Sainsbury's rose to 2. according to new research. "Sainsbury's is beginning to turn the corner. They have got to be confident and humble at the same time if they can possibly do that. A "brand voltage" measure of 3. the global brand director of Millward Brown. brand voltage figures for both Waitrose and Sainsbury's have risen above Tesco's in the past couple of years. Peter Walshe.7 in 2003 to just 1.4 in 2004 to 4. carried out by brand market research consultancy Millward Brown. The attitude of consumers to Tesco was "you are big and powerful and we don't necessarily like you". In contrast.its ability to convert customer awareness into bonding and loyalty . said Tesco was experiencing "the first signs of the downside of dominance"." The WPP-owned research agency found the supermarket giant's "brand voltage" . Mr Walshe said. Sainsbury's strategy to build brand equity will help it battle with Asda for the spot as second leading grocery store brand. it is not keeping customers loyal. with declining brand loyalty among shoppers.2 last year.9 last year."
. he said.ARTICLE 1 Tesco losing brand loyalty Signs of a consumer backlash against the dominance of Tesco are growing. A study of consumer attitudes to the top nine UK supermarkets and food retail chains.fell sharply from 5. found that while Tesco remains the most popular brand in its sector.
perceptions of brand innovation. popularity and price. The research. it's easier for people to slip off and bond with someone else. part of the Millward Brown BrandZ brand equity study." Mr Walshe said. The study examines five indicators: admiration for a brand. fell from 3. which relies primarily on price to bond with consumers.Asda.4 in 2003 to 0. "If the quality of that brand is in decline.
. affinity to a brand. monitored the opinions of 400 British adult grocery buyers.7 last year on the Millward Brown measure. Millward Brown's brand voltage study measures consumer awareness of a brand and how that awareness converts into loyalty or bonding to a brand.
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. Virgin has evolved into a unique organization. Interbrand Corporation's recent survey of brands with the most impact in 2001 put us at No.to 30-year-olds and the No. but instead what we call a "branded venture capital" organization. Since we started the business in the early 1970s. 3 brand across the whole population. chairman of the Virgin Group
ARTICLE 3 90
. 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. such as Virgin Records. 1 brand in Britain for 20. lazy or oligopolistic and do not serve consumers well. London. By anyone's standards this model of doing business has led to some remarkable successes. Our new businesses are ring-fenced from each other and raise their own capital from myself and various partners. Virgin Mobile. Sir Richard Branson. JUNE 13. We have had and will continue to have some failures. London. but Virgin has achieved a huge amount to popularize business acumen in a country that is traditionally anti-business. We have a No. Virgin Atlantic. Not bad for a business that has grown from an empty loft space above a shoe shop in Oxford Street. I was saddened to read about the achievements of all of our people at Virgin in tones surprisingly negative. Virgin Radio and Virgin Megastores.ARTICLE 2 The Virgin brand : LETTERS TO THE EDITO Published: THURSDAY. 11 across the whole world. It is not a faceless corporation or conglomerate.
for time-pressed smokers. it's clear that as a market-share gambit. distributors. By yearend. But nine months later. including a shorter cigarette. Philip Morris executives declined to comment.BusinessWeek: January 31. has rebounded to 25%--higher than it has been since 1989 (chart). belt buckles. Then. consultants. discreetly stenciled with the Marlboro brand logo. there. It is stepping up consumer promotions such as Marlboro Country Store. 91
.84 billion. denim shirts. Sometime this spring. Philip Morris announced it was slashing the price of Marlboros by 40 per pack to stanch the brand's market-share deterioration.S. The campaign is expected to build the company's data base of smokers and turn millions of Americans into walking Marlboro ads. 2. value-minded '90s. But tobacco analysts. Philip Morris is embarking on Phase Two. and leather jackets. Philip Morris Cos. which fell to 20% before Marlboro Friday. right? But it's even better for Philip Morris. It is working on a series of new products. Philip Morris USA. will roll out the Marlboro Country Store.3 billion. which raised its cigarette prices by 4 per pack in November. the strategy had cut Philip Morris' domestic tobacco unit's earnings by $2. cigarette market. the price-cutting maneuver worked. It became the biggest marketing story of 1993--a symbol of the vulnerability of big brands in the price-conscious. Marlboro's share of the $47 billion U. is staking a claim for Marlboro in the urbancowboy fashion landscape. Whoa. Philip Morris' stock sank 14 points and pulled down the stocks of other consumer-goods companies. cowboy hats. Now. the company's $12 billion tobacco division. has crept back up to around 57. to continue nudging up prices. The stock. dubbed the Marlboro Express. And observers also expect Philip Morris. watch out. Some deal. Aren't brands supposed to be dead? That was the conventional wisdom in the wake of "Marlboro Friday" last Apr. analysts estimate. a mail-order promotion that will enable smokers to exchange their empty Marlboro packs for Western wear such as boots. and sources familiar with the company say that Philip Morris is preparing a methodical offensive to secure the competitive gains it has made. which cratered at 45. to $2. 1994 THE SMOKE CLEARS AT MARLBORO Ralph Lauren.
Morgan's $1. Philip Morris has considered roll-your-own cigarettes in the U. a tobacco analyst at Sanford C. In November.000 people--close 40 plants. A strong performance could catapult Morgan into position to succeed William I." says Gary Black. ROLL 'EM. because he's fighting with less ammo. "Philip Morris raised prices on Marlboro twice a year for 10 years.S. and take a $457 million charge against earnings. president of the Strategy Workshop." says Marc Cohen. Largely because of Marlboro Friday. Sachs & Co. And the pain isn't over: Domestic tobacco's operating income may fall 31% in the first quarter of 1994. a tobacco analyst at Goldman. Philip Morris Cos. and he expects earnings to start to recover in the second quarter. Thanks to the earnings drop. "But I think we're at a stage where Philip Morris can begin to build its brands again.If Philip Morris can pull it off.3 billion in 1993 from $11 billion in 1992. a New York consulting firm. Black says. It's a marked change from the 1980s. In anticipation of the Clinton Administration's plans to raise excise taxes by up to 75 per pack in 1995.1 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. 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." The architect of the plan is James J. 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. Campbell as chief executive of Philip Morris USA. when price hikes funded seemingly bottomless marketing war chests. "I would not want to gloss over the degree of pain that it has taken to get here." says Murray Hillman. The $400 million advertising budget is flat. says Black. The brand accounted for 60% of Philip Morris USA's sales and 75% of its operating income in 1993. But unit volume should be up 10%. A lot is riding on Marlboro's ability to do more with less. announced plans to eliminate 8% of its work force--roughly 14. Black estimates. Morgan. Jim Morgan is really calling the shots over there. He'll have to make those shots count. "From what we hear.--because loose tobacco and rolling 92
. Bernstein & Co. and those easy profits were able to mask their marketing inefficiencies. analysts estimate the parent company's worldwide operating income slipped to $9.
and ends in February. would be about 15 millimeters shorter than a conventional 85-millimeter-long cigarette. smokers could get a Weber charcoal grill." says Rob Huberman. One ad depicts a horse running across the plains.90 per pack. Marlboro isn't the only smoke to benefit from Philip Morris' faith in premium brands. "the advertising means it's a high priority. the shorter smoke. Consultants believe smokers would be receptive. Still. Adventure Team. Will Express make it to market? It's not a sure thing.35. which began in October.paper are taxed at a lower rate than cigarettes. N. Conn. but an executive familiar with the project says advertising for Express has been created. Launching a new product could interfere with the existing Marlboro line's momentum.J. Marlboro Express. are three times as profitable as discount smokes. which start at $1. and received free merchandise from a Marlboro catalog. More advertising and promotions are also expected for Virginia Slims at the expense of Basic. The idea is to reduce the size of the cigarette but deliver the same amount of nicotine and tar. a $200 million direct-mail and ad effort. Philip Morris won't comment on the status of Express. Philip Morris' high-riding discount cigarette. For 130 packs.
. sent them to Philip Morris. It also has studied selling cigarettes loose in a carton. "Express is supposed to be a fast smoke so you can get a quick fix. says one insider." says the executive. Philip Morris already markets such a product in Germany. 1992. for instance. Much of Basic's $10 million ad budget will be shifted to Virginia Slims. The reasoning: Premium-priced cigarettes. Marlboro's brand managers are viewing promotions as a way to get more bang from a smaller marketing budget. a managing director at Meridian Consulting Group in Westport. general manager at Starkman Distributors in Atlantic City. at around $1. worked much like a catalog: Smokers saved up empty Marlboro packs. The program gave Philip Morris a data base of more than 2 million smokers. Country Store is slated to replace the Marlboro 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. which could cut the price of a carton by roughly 60 . 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. Just as Express would offer smokers the same nicotine fix in a smaller package.
Step Two: The company is expected to nudge prices back up quietly this spring. Philip Morris and R. Philip Morris' somber CEO. That would bolster Philip Morris' earnings.J. and squeezed rivals. premiumpriced cigarettes accounted for 61% of the domestic market. narrowed the gap with discount brands. this month cut in half the 60 per carton they give tobacco wholesalers to push discount brands. Michael H. milled around. "He's normally not very personable. 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. "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. NEW PRODUCTS The shorter Express. Miles. REIGNITING MARLBORO PRICING Philip Morris uses price as an aggressive marketing tactic. is being considered. Last spring's 40 -perpack cut grabbed consumers' attention. At Philip Morris' Dec. he's watching tobacco. aimed at the time-pressed and price-conscious. Black expects that figure to stand at 66% by the end of the first quarter. It was his way of saying that even though he's a food guy. Other options: cartons of loose cigarettes and roll-your-own smokes. ARTICLE 4 Parade Magazine: How Subliminal Advertising Works 94
." It's a good bet Miles is watching Morgan pretty carefully. PROMOTION Relying less on broadbrush image ads. Analysts and tobacco distributors believe another price hike is imminent. chatting amiably about the company's tobacco business. telling people how happy he was with Marlboro's increased share in convenience stores." says one partygoer.CAREER MOVES. "But he was very congenial. 16 holiday party at New York's Metropolitan Museum of Art. And smokers barely seemed to notice when Philip Morris and its rivals raised prices by 4 per pack in November. In another move to shift smokers into premium-priced cigarettes. A year ago. Reynolds Tobacco Co. too. Morgan's career could depend on the outcome.
By Martin Lindstrom Publication Date: 4th of January. the size and placement of a product's logo has been the holiest grail of branding. it seemed only fitting to target the human brain. For as long as I can remember. perversely--admiring these companies' tricks and strategies." the executive suggested as I scrambled to sign off on an ad on behalf of a major fashion brand. a windswept desert. global consumers continue to inhale 5.6 billion by 2025. My question was this: Can the desire to smoke be triggered by images merely associated with a brand: images of a camel. pray tell.4 billion smokers to roughly 1.765 billion cigarettes a year--and that's not even including the huge dutyfree or international black market trades. so why. while viewing various cigarette-marketing related imagery. admittedly. The World Bank projects that the number of tobacco users is only going to shoot up further-from a current level of 1. 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. 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). For ethical reasons. enlisted roughly 2. has the logo overstayed its welcome? In a multimillion-dollar global neuro-marketing study dubbed Project Buyology. a rugged-looking cowboy or Marlboro's well95
. Over the years. I've always said no. Four-year-old kids know about the health dangers of smoking. who agreed to submit themselves to functional magnetic resonance imaging (fMRI). the largest project of its kind. Over the years I've been perplexed by the fact that despite worldwide tobacco-advertising bans and astronomical government investment in anti-smoking initiatives.000 volunteers worldwide. 2009 "Make it bigger. Project Buyology. But that hasn't kept me from distantly--and. I've turned down numerous entreaties from tobacco companies to work for their cause (if you want to call killing people a cause). I decided to peer inside consumers' brains to find out. a type of brain scan. I wasn't the slightest bit surprised.
the iconic imagery merely associated with Camels and Marlboros. our guards go up. 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. brought on a higher craving activation than either the logos or the actual pictures on the cigarette packs themselves. Not surprisingly. as well as the Marlboro and Camel logos. and we'll do anything in our power to prevent that logo from winning. sunsets. 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. But wait a second--why? Well. they were shown explicit cigarette advertising images including the Marlboro Man and Joe Camel hunched over his motorcycle. and to this day it works. Company executives wanted him to develop a bottle so distinctive that if you smashed it against a wall. increased media sophistication or consumers' by-now cast-iron defense mechanisms. a small region in the brain associated with reward. both groups were shown subliminal images that had no overt connection to cigarette brands--those he-man cowboys. as well as non-smokers. In other words. the designer received his marching orders. what does our research experiment portend? Think about this: Nearly a century ago. Next. We know we're being manipulated. So in practical terms. First. when we're exposed to logos.known sponsorship of the European Formula One racing circuit. The designer did what he was told. the MRI scans revealed a pronounced response in our smokers' nucleus accumbens. Project Buyology exposed both social and long-time smokers. to a raft of suggestive images as the fMRI painstakingly scanned their brains. 96
. 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. 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. whether it's due to brand boredom. craving and addiction. as they viewed the actual cigarette packs. camels and deserts. such as the Ferrari and the Western sunset. when the first-ever Coca-Cola bottle was in the planning stages.
a fragrance. a design or any other indirect signal that tells a subtle. Wall-E? Did the white. that robin's-egg-blue box--are you thinking. No. The ultimate decision-making process of whether we buy something will happen at the deepest levels in the human brain. 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. on its front. Coke's aim was to replace its logo with a "smashable" component. See that new iPod Touch over there? Where. Today. we're beginning to understand the secrets of our own human Buyology. But thanks to the unlikely pairing of neuroscience and marketing. as I am. is the word "Apple" spelled out? Nowhere. a sound.
ARTICLE 5 Orwellian Dream Come True: A Badge That Pinpoints You By LEONARD SLOANE Published: Saturday. a shape." Even back in 1915. I call this philosophy "Smash Your Brand. 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. September 12. suggestive and logo-free story. these places were out of reach. "smashable" could mean anything from a color.For obvious reasons. of McDonald's and Tiffany? Instead of flashing another logo. but it's on life support. 1992
Is Big Brother your boss?
. Did you happen to catch Disney's Pixar's latest flick. the logo isn't dead yet. My prediction? That the battle for consumer loyalty and cash will no longer take place in our conscious minds. Until recently.
And they compare the badges with the already widely used electronic monitoring devices that can quantify the number of keystrokes on a terminal.is on the way. "This technology makes snooping easy. As long as you wear the badge. The target market includes not only office workers who are away from their desks. Especially intrusive technology should be under the control of the person using it. Norman. that transmits signals to a central system." Mr." For many people. Calif. lawyers and laboratory scientists. a research engineer at the Olivetti lab. not of management.where we are and with whom we are -. "George Orwell would have been pleased. "It's in your interest as a professional to stay in touch with your colleagues. to track their progress. It has the potential of changing the modern office into an electronic sweatshop. however. card. a small clip-on microcomputer. "When different people need to be found. about the size of an employee I. who invented the active badge while at the Olivetti Research Laboratory in Cambridge. badges can be attached to objects. I can ring directly to where they are. said: "There's a lot of surveillance in the workplace these days. the system can track your movements around an office building or even a larger area. chairman of the cognitive science department at the University of California at San Diego." said Roy Want. editor of the Privacy Times newsletter.D. like luggage in airports or raw materials in factories. 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.Another tool that lets "them" check up on "us" -. And it's all completely hands-free." Evan Hendricks. but also doctors and patients in hospitals or nursing homes." said Donald A. privacy issues overwhelm any technological virtues of active badges. peek at voice and computer mail messages or listen to employees transact business on the phone. eroding workplace privacy." Andy Harter. In addition to being worn by people. They see the badges as an intrusion into the lives of employees. Harter of Olivetti said that although active badges were still being tested. It is the active badge.
. there were plans to make them available commercially starting next year. added: "I get my communications so much faster when I carry the badge. England. and who is now a member of the research staff at the Xerox Research Center in Palo Alto.
called the authenticated badge. information about the location of the person wearing it could be constantly updated. It allows the acquisition of dynamic location information. The data from the badges can also be displayed on a screen showing a model of an entire office floor. Falcao. Anyone with access to the computer screen can then quickly get in touch with the badge wearer by telephone or electronically. This version. people are not always in their offices. however." said Gary Chapman. the number of other badge-wearing people in the room and the approximate length of time the badge wearer has been at that location.. Mass. office of the Computer Professionals for Social Responsibility." Other computer experts see active badges in a far different light. is designed to assure that the signal is authentic. 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. said: "I view this technology as interesting in itself. the room where the person is. to prevent tampering with the system. The second generation of active badges is now being tested. "We're saying that they are a form of computer monitoring. The badge functions the same way that a remote control device does in transmitting a code to a television set. "In the environment in which we work." Murray Mazer. which helps to finance the Olivetti laboratory in England." said Veronica G. the telephone extension nearest the present position. director of the Cambridge."
.in the form of an infrared beam --to a network of wall-mounted sensors around a building. to go out to lunch or celebrate someone's birthday. with researchers in England and the United States wearing them for the purpose. a member of the research staff at the Digital Equipment Corporation. "They can keep a diary of how long you've been talking to Joe Blow. Currently. "Active badges are the most useful thing to round people up for a meeting. thus visually indicating where each badge-wearer is in relation to everyone else. who helped to develop active badge software while employed by Olivetti in the United States.Olivetti officials say active badges were initially developed about four years ago as a means of making telephone communication more effective. Scientists at the laboratory found that with a badge emitting an identification code every 15 seconds -. an organization that has studied electronic monitoring.
assembly. This technology makes snooping easy. and what technology makes easy." 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. who is writing a book called "Things That Make Us Smart. equipment maintenance. packaging. inventory control. 100
. Professor Norman. Operations Includes machining.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. testing and all other value-creating activities that transform the inputs into the final product. transportation scheduling. Inbound Logistics Includes receiving. we tend to do." summed up that view succinctly: "Active badges are a really excellent example of the horrible trade-off technology gives us.
Service The activities that maintain and enhance the product's value. public affairs. Technology Development Includes technology development to support the value chain activities.Outbound Logistics The activities required to get the finished product to the customers: warehousing. finance. training. order fulfillment. Procurement Procurement of raw materials. upgrading.
. pricing. Value Chain model of Michael Porter: Marketing and Sales The activities associated with getting buyers to purchase the product including channel selection. spare parts. machines. servicing. Process automation. including customer support. Value Chain model of Michael Porter: Human Resource Management The activities associated with recruiting. planning management. etc. etc. etc. distribution management. buildings. installation. accounting. spare parts management. Firm Infrastructure Includes general management. selling. design. redesign. retail management. repair services. promotion. legal. such as Research and Development. advertising. quality management. etc. retention and compensation of employees and managers. development (education). transportation.
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)
.” Location and date: 22. under the guidance of my mentor.05.