BRAND – THE CONCEPT1

“Branding is so powerful that it takes years of neglect and bad management to kill off a brand, not
an act of god.”
O’ Malley

The use of brands has been central to marketing for more than a century. The dominant logic has
been “Build a brand, and the world will beat a path to its door.” Brand names are a source of
differentiation (name leads to fame). Consumers are willing to buy brand names and pay premium
for them. The pace of technology change has made product differentiation difficult and therefore ,
need for a strong and distinctive image to compete in the market place. At the same time new
technologies and emerging market trends, including a shift in power to retailers, are converging to
alter traditional branding and brand management. In spite of these changes, to understand brand
and branding, one needs to begin with the simple question – What does a brand do?

FUNCTIONS OF A BRAND
The quintessential function of branding is to create a distinction among entities that may satisfy a
customer’s need. This primary distinction is the origin of a series of benefits for both the buyer and
the seller (Fig.1).

For buyers, brands effectively perform the function of reduction: brands help buyers identify
specific products, thereby reducing search costs and assuring a buyer of a level of quality that
subsequently may extend to new products. This induces the buyer’s perceived risk of purchasing
the product. In addition, the buyer receives certain psychological rewards by purchasing brands that
symbolize status and prestige, thereby reducing the social and psychological risks associated with
owning and using the “wrong” product.

For sellers, brands perform the function of facilitation – i.e., they ease some of the seller’s tasks,
because they enable the customer to identify products – all things being equal, this should facilitate
repeat purchases on which the seller relies to enhance corporate financial performance.

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Prepared by Prof. L.K. Vaswani from various sources for classroom discussion only.
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 Buyer

Assurance of quality
reduces perceived risk
Identification Status and prestige reduces
reduces search costs psychological risk

Symbol around Symbol around

which a relationship which a relationship
Functions of a Brand
is built is built

Product identi-
fication facilitates Familiarity Ability to identify Identification
repeat purchase facilitates new facilitates facilitates loyalty in
product promotional efforts purchasing categories

Product differentiation Coherent message

facilitates premium facilitates market
pricing segmentation

Seller
Fig.1. Functions of a Brand for the Buyer and Seller

Source: Berthon et.al (1999 )Brand Management Prognostications Sloan Management Review Winter 99 pp 53-65

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 Brands also facilitate the introduction of new products. If existing products carry familiar
brands, customers will generally be more willing to try a new, seemingly appropriate product if
it carries the same familiar brand.
 Brands facilitate promotional efforts by giving the firm something to identify and a name on
which to focus.
 Brands facilitate premium pricing by creating a basic level of differentiation that should
prevent the product from becoming a commodity.
 Brands facilitate market segmentation by enabling the marketer to communicate a coherent
message to a target customer group – effectively conveying for whom the brand is intended and,
just as importantly, for whom it is not intended.
 Finally, brands facilitate brand loyalty, particularly important in product categories in which
repeated purchasing is a feature of buying behaviour. (this is a facilitative function distinct from
that of identification, which permits ease of repurchase for the buyer but does not ensure it.)

Overall, brands have brought buyers and sellers together by serving as symbols around which both
parties can establish a relationship, thereby creating a focus of identify. However, pressures to
change branding and the brand management system – despite their venerable roles in business – are
rising, as we now explore.

NEED FOR BRAND ORIENTATION

The current market trends, which are compelling firms to move towards brand orientation, are
- decreasing product divergence - increasing media cost - integration of market

Table 1: Trends Compelling Companies to Incorporate Brands into Company Strategy

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 Threat Trend Opportunity

Levelling Decreasing Differentiation

Product divergence

Anonymisation Increasing Positioning

Media costs

Marginalisation Integration of Internationalisation

Market

Shocker, et.al (1994) identified by directional pressures for change affecting brands and the brands
management system. These forces as systematic process are depicted in Fig.2.

Information Brand Extension

Technology or Dilution

Changing consumer Brand Proliferation

values

Brands

Brand Management

Influence of Trade Alternative Modes of

Customers Organisation
(Functional/Geographic/
Market segment/Cross
Rewards Based on functional teams)
“Short-Termism”

Fig.2 Bi-directional Forces Driving the Evolution of brands and

Brand Management
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 Source: Berthon et.al (1999 )Brand Management Prognostications Sloan Management Review Winter 99 pp 53-65

Sen (2001) in the paper titled “Can ‘Made in India’ become a brand.?” gave a multi-dimensional
view of brand importance, i.e., the points of view of - the market, the consumer and the company
(Table 2).In continuum to his argument, Mr.Paul Temporal, Managing Director of Marketing
Initiatives Group-Malaysia attempted to clarify - Why has Asia so few powerful brands? during his
address at CII conclave on “Marketing in the New Millennium”. He said that only powerful brands
could shake off the image of Asian products being seen as commodities. “The market power of
brands can help you to ride out adverse conditions, and moving from commodity to value status.
And, the value status can even prevent your company from hostile takeovers,” said Mr. Temporal.

TABLE 2: CAN ‘MADE IN INDIA’ BECOME A BRAND.?

The Market The Consumer The Company

Create preference between Remove uncertainty Increase profit
similar products

Provide protection against Enable ‘badging’ of self- Protect revenue

new entrants image

Sustain premiums and Concentrate information Create new segments/growth

margins (i.e., values, beliefs, etc.)
Guide brand activity
Simplify choice in a Motivate staff
complex world Manage emergencies

Target group
Why has Asia so few powerful brands? “That’s because of their pre-occupation with short-term
profits and lack of long-term brand investment,”One of the most important reasons why Asia
doesn’t boast of powerful brands is also because of Asian companies’ desperate pursuit of
operational efficiency, and not differentiation.

BASIC CONDITIONS FOR BRANDING

The brand pyramid describes the basic conditions for establishing a brand. Marketing of branded
Positioning
products can be said to derive from a common structure as illustrated in Fig.3.

Trademark Product

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Figure 3: The Brand Pyramid Illustrates the Basic Conditions
for Establishing a Brand
The trademark plays a crucial role as it identifies the product. The first bond emerges between
target group and product, the second between product and trademark and the third between target
group and trademark. Frequently, brand names are selected using the product as a basis, and
positioning is made on the basis of the product and the trademark.

‘Brand names are imprinted on brain’

A brand is not just a name. The brain reacts to brands by conjuring up a

whole range of associations and ideas, which are primarily emotional, says a
new study.

The study conducted by researchers at the University of California, Los

Angeles claimed that consumers reading a brand name do not treat it like any
other word – instead they activate parts of the brain normally used to process
emotions.

His study suggests that brands were identified more quickly on the computer
screen when displayed on the right hand side. However, the reverse was true
when they were displayed on the left. This probably means that the right
hand side of the brain – more commonly associated with the processing of
emotions – was more heavily involved.
TOI, 15-08-02

Impact of Brand on Consumer Behavior

The brand is the factor which has an impact on consumer purchase decision-making process. Brands
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provide information about products and create associations that affect the mind of the consumer in
purchase process. Suitable forms of marketing activities as a whole can create a positive brand
associations and start a purchase action of positively seen brands. Brand represents a certain value
in the mind of consumer. Without the psychological linkage would be a product or a service
indistinguishable from each other. Our survey was aimed on impact of a
many studies have shown that brand management helps enterprises to protect their image and that a
strong brand has a high market share. The actual or prospective purchaser of products or services
( - customer- is an important category in brand management. A brand can be successful if the brand
management system is competent and as a result of relevant marketing activities can be seen loyal
and satisfied customer/consumer/Consumer behavior is influenced by a variety of factors
interacting in complex ways. With better understanding of customer’s perceptions; companies can
determine the actions required to meet the customer’s need Due to the current global conditions,
the marketplace is becoming a place of a super-saturation of products resulting in brand loyalty
disappearance. These conditions can be avoided when companies create loyalty relationships with
their customers. Therefore it is necessary that the value proposition of the offered brands meet
consumers' values and desires.

Customer Based Brand Equity

Since the term “brand equity” emerged in the 1980s, there has been a growing interest in the subject
among marketing academicians and practitioners . The meaning of the term brand equity has been
debated in a number of different ways and for a number of different purposes . Brand equity is the
added value endowed by the brand name it is the difference between overall brand preference and
multi-attributed preference based on objectively measured attribute levels ; and overall quality and
choice intention.

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 Fig. 4 :A conceptual framework for brand equity ( Aaker, 1991)

Based on the value of brand equity, Aaker (1991) defines it as a set of assets (and liabilities) linked
to a brand's name and symbol that add to (or subtract from) the value provided by a product or
service to a firm and/or that firm's customers.

A thorough understanding of brand equity from the customer’s point of view is essential for
successful brand management A thorough understanding of brand equity from the customer’s point
of view is essential for successful brand management. Aaker (1991, 1996) grouped it into five
categories: perceived quality, brand loyalty, brand awareness, brand association, and other
proprietary brand assets such as patents, trademarks, and channel relationships (Fig.4) . Among
these five brand equity dimensions, the first four represent customers’ evaluations and reactions to
the brand that can be readily understood by consumers, so they have been widely adopted to
measure customer-based brand equity in previous studies. In summary, strong brand equity means
that customers have high brand-name awareness, maintain a favourable brand image, perceive that
the brand is of high quality, and are loyal to the brand.

The marketing/brand managers should consider the inter-correlations among the four dimensions of
brand equity, especially the relationship of perceived quality to brand association and brand loyalty,
and the relationship of brand awareness to brand association and brand loyalty. While brand
awareness serves as a foundation for brand image and brand loyalty, high quality enables consumers
to recognize a brand’s distinctiveness and superiority and leads to consumer satisfaction and loyalty
(Aaker, 1991; Oliver, 1997). As a result, we suggest that when concentrating on creating brand

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association and brand loyalty, managers should not undervalue the effects of perceived quality and
brand awareness.

Brands for the Ages

In a rapidly changing world, how has a handful of doughty FMCG brands
managed to achieve enduring market leadership in their categories?
G Seetharaman May 19,2019

It is lunchtime on a weekday and there’s a hubbub of hungry customers around the counter at
Cannon food stall, opposite south Mumbai’s iconic Chhatrapati Shivaji Terminus railway station.
Employees at the 46-year-old establishment are doing double-speed, rush-hour duty, against the
clang of steel plates and swirl of shouted orders, to serve its most popular dish — pav bhaji.

It is definitely not for the calorie-conscious. The pav (bread) glistens with golden butter and a
generous slab of butter, the size of a small soap bar, slowly melts into the hot bhaji. That only seems
to boost the demand for “Amul Pav Bhaji”, advertised prominently on the menu board for ₹100.

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Appa Dandekar, who runs Cannon, says the stall has always used Amul and there is no question of
using any other butter brand. “People can tell the difference between Amul and others.”

This kind of devotion to Amul Butter is what makes it the undisputed market leader, accounting for
around 85% of the ₹3,500 crore butter market in India, according to industry sources. More than six
decades after it was launched, Amul Butter has managed to hold onto its dominance.

In the hyper competitive world of fast-moving consumer goods (FMCG) — a low-margin,

distribution and marketing-focused universe where customer loyalties tend to be fickle — a handful
of legacy brands such as Amul Butter has managed to retain their market leadership over decades,
fending off rivals, rapidly changing tastes and shifting market structures. In some cases, the
dominance is such that the category is defined by the brand. Instant noodles brand Maggi, Dabur
Chyawanprash, Parle G, Rooh Afza and Diary Milk among food and drinks and Pidilite’s Fevicol,
an adhesive, are among these logic-defying brands. All of them have been around for a while,
making it clear that customer loyalty is earned slowly, but surely. But apart from longevity and the
consistent nurturing of the brand itself, there is little that’s discernibly common among them. Each
product has had its own journey and challenges. So what lessons in success and leadership can be
gleaned from the journey of these powerhouse brands?

Recall Value

For one, being a strong brand does not guarantee safety. Amul, for example, has to fight for market
share with Parag Milk Foods and Britannia in cheese, and Nestle and Mother Dairy battle Amul in
the packaged milk category. Amul’s market share in the cheese and milk segments are pegged at
40-50% and 30%, respectively. Research firms such as Nielsen and Euromonitor do not share
market share figures with the media, and some market segments, such as butter, are not extensively
tracked. ET Magazine has relied on data from industry sources, including figures from syndicated
reports by market research firms.

But why do people invariably think of Amul while buying butter? Shirish Upadhyay, a dairy
industry veteran who has worked in the private sector and with the Gujarat Cooperative Milk
Marketing Federation (GCMMF), which owns the brand Amul, says Amul had a head start in
butter. The dairy sector was delicensed in 1991 but the brand had been launched in the 1950s and its
famous “Utterly Butterly” slogan and the Amul girl created in 1966. “And it is very competitively
priced so it doesn’t make sense for others to take on Amul.”

Another reason is the distinct salty taste that Amul Butter had developed to take on then-market
leader, Polson’s Butter, in the 1950s.

Butter, which helped Amul build a national distribution network, has the highest cross-country
penetration among all its products, says RS Sodhi, managing director of GCMMF. The company
also sells ghee, buttermilk, ice cream and chocolates. GCMMF earned a revenue of ₹33,150 crore
in 2018-19. “People have blind faith in the Amul Butter brand, like they have on their religion.”

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Rahul da Cunha, one of the brains behind the Amul girl advertisements, says one of the reasons for
the endurance of the brand is its attempt to talk to younger people. “We are commenting not just on
topics of national importance but also on topics of internet importance.”

Riding on Nostalgia

Another popular brand that also used a little girl for branding is Parle-G biscuits. The packaging of
the product launched in 1939 uses a picture of a little girl. Owned by Parle Products, the biscuit is a
daily fixture in the lives of many Indians who like dunking it in their tea. “You might try different
biscuits. But when you want to have something every day, it is Parle-G,” says Mayank Shah,
category head at Parle Products. The biscuit accounts for fourfifths of the ₹8,750 crore glucose
biscuit market and operates at staggering scale. Available at 10 different price points from ₹2 (with
eight biscuits) to ₹65 (with 160 biscuits), Parle-G is sold through 6.5 million outlets. A billion
packets are sold every month. In 2011, Nieslen called it the world’s largest-selling biscuit. The
brand’s chief competitors are Britannia’s Tiger and ITC’s Sunfeast Glucose, which account for a
tenth of the market. To take on the competition, Parle-G reinvented the brand and termed the “G” in
the name “genius”. Shah says Tiger and Sunfeast only ate into the market share of the smaller
players. Parle-G’s share has grown from 68% to 80% in the past two decades, he adds.

Britannia declined to comment for the story and ITC did not respond to queries. These two
companies are no less aggressive when it comes to pricing and distribution, but Tiger and Sunfeast
Glucose, launched in 1997 and 2003, respectively, do not — at least not yet — have Parle-G’s
biggest selling point — a multi-generational connection with the brand.

Nostalgia certainly helps a brand, says Siddharth Shekhar Singh, associate professor of marketing at
the Indian School of Business. “But if customers don’t find value in it, then (future) generations
may remember the brand but not use it.”

Anil Viswanathan, director of marketing (chocolates), Mondelez India, concurs. “Nostalgia is a

dangerous thing. The moment you are rooted in the past, there is only one direction you are going to
go.”

Mondelez accounts for twothirds of the ₹10,430 crore chocolate market in India, according to
Nielsen data shared by industry insiders. Their flagship brand Cadbury Dairy Milk, launched in
India in 1948, alone has a 41% market share.

There was a time most Indians did not have access to have premium chocolates and made do with
whatever was available. But, Viswanathan says, that started changing around a decade ago when
people realised there were no good premium chocolates in India. That was when the company
launched Dairy Milk Silk, which starts at ₹70. The company’s premium range of chocolates like
Silk and Bournville necessitated an increase in the number of coolers in stores.

Dairy Milk has also been helped in no small measure by some of India’s most memorable
commercials and taglines since the 1990s, created by Ogilvy & Mather (O&M), including “Asli
swad zindagi ka (The real taste of life)” and “Kuchh meetha ho jaaye (Let’s have something
sweet)”.
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Smart advertising, also by O&M, has also built Fevicol and its associate brands like Fevikwik and
M-Seal. Owned by Pidilite Industries, the brands are said to control around 70% of the adhesives
market. In a largely unorganised industry, Fevicol has the stickiness its competitors would kill for.
A June 2017 research report by Credit Suisse on Pidilite says the incentive for carpenters to switch
to another brand was low, as adhesives make up only 1-2% of the cost of making furniture.

One of the secrets to the brand’s success was that unlike its competitors, it did not go just to
distributors, but also engaged the end-users, in this case carpenters, masons and plumbers. In 2002,
it even started a club for carpenters, the first of its kind, through which it conducts training
programmes and cultural events for carpenters’ families.

This club, which now has 1 lakh members in 600 towns, allows them to showcase new products to
carpenters, a luxury Pidilite’s competitors do not have.

Just like Fevicol is used to refer to adhesives in general, rose-flavoured sherbets are in some
quarters referred to as Rooh Afza. The Hamdard Laboratories’ brand, which reportedly accounts for
nearly half of the ₹1,000 crore syrup and concentrate market, was in the news recently because
there was a shortage of the product during Ramzan. A large section of people break their iftar fast
with Rooh Afza.

The market leader faces no real competition in some product categories. But there are also segments
where newer players have given the top brand a serious scare. One such segment is chyawanprash.
The product was long synonymous with Dabur, which has a nearly 60% share in the ₹540 crore
market.

Baba Ramdev’s Patanjali has within a few years of its launch become the third largest player in the
market, after Dabur and Baidyanath. But the sheen has started wearing off Patanjali due to
increasing competition and distribution woes.

While Dabur and Baidyanath saw their market shares by volume rise in 2018-19 from 2017-18,
Patanjali’s declined. Prashant Agarwal, marketing head-health supplements, Dabur, says Patanjali
had a short-term impact and Dabur has made up for the loss in market share. “While people
associate chyawanprash with winters, we are trying to get them to also buy it during other seasons,
like monsoons.”

Dabur Chyawanprash, launched in 1949, for a long time enjoyed the benefits of being India’s first
branded chyawanprash. But with increasing competition, the company has made a concerted
attempt to reach out to a younger consumer base through brand ambassadors like cricketer MS
Dhoni and Bhojpuri film star Ravi Kishan, who is quite popular in Uttar Pradesh and Bihar, and
make chyawanprash more palatable to kids by launching it in flavors like mango and chocolate.
Unlike in chyawanprash, it was not competition that posed a threat to Nestle in instant noodles.
Maggi was synonymous instant noodles. But the Food Safety and Standards Authority of India’s
decision in June 2015 to recall Maggi noodles over the presence of lead beyond the permissible
limit and due to misleading labelling related to monosodium glutamate gave the brand a severe

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beating. Six months later, Maggi was back on the shelves, though the market share had nearly
halved from 80% in 2014, according to Nestle data.

However, the power of the brand and the company’s outreach saw Maggi through those trying
times. The product’s market share is now almost 60%, according to Nestle. “It was quite telling who
consumers were willing to trust, the government or Maggi,” says Alpana Parida, MD of DY Works,
a brand consultancy.

Brand Trap

Nestle India did not respond to ET Magazine’s specific questions, except to say Maggi has a strong
resonance among consumers. Maggi’s competitors include Sunfeast Yippee, Wai Wai and Top
Ramen. Yippee, launched in 2010, has become the second largest brand, with a fifth of the market,
riding ITC’s distribution muscle, but it still does not immediately bring to mind noodles the way
Maggi does.

Being a well-known brand of a big company can be a trap in itself. “These companies are usually
large-sized and due to their sheer size, it is challenging for them to be agile and provide a quick
response to innovations and changing consumer needs,” says Ina Dawer, research manager at
Euromonitor International.

Staying relevant is a constant battle. The numerous onceubiquitous brands that have fallen by the
wayside stand testimony to this brutal market truth.

ganesan.seetharaman@timesgroup.com

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“There is a conscious effort to talk to younger people through Amul ads”

Rahul da Cunha,

ad man behind Amul Butter campaigns

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“While people associate chyawanprash with winters, we are trying to get them to also buy it during other
seasons, like monsoons”

Prashant Agarwal

marketing head, health supplements, Dabur

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“Nostalgia is a dangerous thing for brands. The moment you are rooted in the past, there is only one
direction you are going to go”

Anil Viswanathan,

director of marketing (chocolates), Mondelez India

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