Brand Final Exam

Question 1 a)
Brand architecture is the ordered structure of a brand's portfolio that shows the
brand's relationships and various roles. A structured portfolio is beneficial to
Microsoft since it assists customers in organizing the offer in their minds by
understanding its products and services. Microsoft has various names on its
service providers which indicates its strategy as a Branded house. Other resources
state that Microsoft uses a hybrid strategy, combining several architecture
approaches (Source: https://fabrikbrands.com/brand-architecture/). Before
analyzing the hybrid structure statement, this answer will first attempt to detect
the corporations' original strategy.

For a branded house, Rao et al (2004) suggest that the possibility of dilution is a
significant effect of having multiple product categories. Microsoft is known for
having several service providers as Microsoft Word, Excel, and Onenote as well
as services within security systems for computers. However, the probability of
positive effects on the intangible company's value emerges for a corporate
branding strategy (branded house). Microsoft will benefit from increased
efficiency in developing brand equity as a result of spillover effects from the
parent brand, which is Microsoft itself. As previously remarked, Microsoft must
take precautions in adding too many distinct categories, since this may dilute the
already established brand equity.

Microsoft may use a hybrid model for its “product portfolio” due to its prominent
service providers as Excel or PowerPoint, which indicates a strategy of endorsed
brands. These are under the umbrella of Microsoft by using the brand elements in
colors and fonts. These common elements represent a familiarity that can be
associated by the consumers as cues for recalling Microsoft. Through the various
brand elements and product attributes seen in the different providers, they are
made independent but endorsed individually. Benefits following this strategy are
according to Aaker & Joachimsthaler (2000) reassurance and credibility from the
mother brand. Microsoft will have spill-over effects on its various endorsed
brands. Another benefit is that the endorsed brands will have the freedom of using
their own names, indicating their brand relevance in the category (BRiC), despite
using the endorsers name (Microsoft) for all providers. For example, Microsoft
words functionality is distinct from Microsoft Excel that focuses on mathematical
calculations.

The possible consequence Microsoft should take into consideration is if the

consumers are not satisfied with one of the providers, creating negative
associations that can transfer from the endorser to the endorsed brand, and back.
Another positive and crucial effect of this strategy for Microsoft is the trust of
consumers in credibility. For example, by using Microsoft as a security for their
computers, they have already created awareness for the provider, potentially
leading them to place Microsoft in the evoked set of their minds. Again the
credibility of one provider can be used when another need is occurring, making
the customer recall Microsoft based on its credibility from present experiences.

Question 1 b)
Based on the assumptions that Microsoft uses a hybrid model including a branded
house and endorsed brands, it follows several advantages for each of the
strategies. First, this answer will discuss the advantages of following a branded
house approach, before analyzing the pros of following an endorsed brands
approach.

According to Aaker & Joachimsthaler (2000), a branded house strategy opens the
possibility of having different identities for the same brand. Microsoft can use the
same brand across its services, countries, or segments. Following this approach
Microsoft still has different identities and positioning in every context, allowing
them to appeal to their target customer group on a higher level. For example, there
can be different regulations in countries allowing different types of fonts in their
system. For allowing each of the countries to use the Microsoft system ideally,
their systems should adapt to the different regulations. Despite the different
positioning and identities, all service providers share the same name (Microsoft)
and crucial brand elements as in the colors from the logo.

As seen in the Microsoft logo it is used different colors to communicate the

branded house and the connection between all of the service providers. Microsoft
as the master brand includes all of the colors, having the driver role across the
service offerings. The endorsed brands have each of their own colors which is
connected to the master brand, reminding the consumers of Microsoft identity.

The advantage of this approach is that that it enhances clarity among the
consumers, they can easily distinguish between the providers, but the brands’
elements still keep them connected in the consumers’ minds. According to Aaker
& Joachimsthaler (2000), the branded house is a simpler strategy, allowing
Microsoft to maximize the synergy between the brands. Consumers can connect
associations due to the visibility of the product in the various markets. A satisfied
consumer because of positive experiences with Microsoft Excel, will affect their
evaluation of another provider, as Microsoft PowerPoint.

Advantages for the endorsed brands’ strategy follow that Microsoft benefits from
having separate names. The strategy is hybrid due to the same first name
(Microsoft) but a different second name (Excel, Word). Despite having a separate
name on each of the endorsed brands, Microsoft still uses its established name in
the different markets, allowing the consumers to connect with previous
associations by being reminded of the endorser. As previously mentioned,
Microsoft provides credibility and substance by allowing associations transfer
between all of the providers. A satisfied consumer will transfer his positive
association, leading his cognitive evaluations of another provider to affect his or
her behavior.

Question 1 c)
Based on the assumptions that Microsoft uses a hybrid model including a branded
house and endorsed brands, it also follows several disadvantages for each of the
strategies. First, this answer will discuss the disadvantages of following a branded
house approach, before analyzing the cons of following an endorsed brands
approach.

Following that Microsoft has a branded house strategy Aaker & Joachimsthaler
(2000) propose several disadvantages that could be relevant to consider. First, the
representations of the different providers use strong, favorable, and unique
associations allowing the consumers to distinguish Microsoft from its competitors
(PoP and PoD). This affects the company positively, but the downside is having
an unlimited number of identities, making the brand equity dilute and therefore
leading the consumers to confusion. Microsoft shares common visual brand
elements and intangible values with its providers, still, there are different
attributes connected to each of the providers that could lead to confusion in what
the consumers may believe of the brand. The brand could in other words be too
complex for the consumers to recall in a given situation.

Another disadvantage according to Aaker & Joachimsthaler (2000) is that it might

be difficult to serve and maintain the same quality among all the brands. For
Microsoft to maintain its established position in the market, they need a high level
of expertise from all the service providers. If, for example, Microsoft Word lack
in the case of updates in other Microsoft brands, could this lead to negative
associations among the consumers. These negative experiences could affect their
behavior in connection with other brands of Microsoft. Following Microsoft’s
brand promise, it is crucial to maintain the level of quality they communicate, and
the standard of expertise.

Another disadvantage is according to Aaker & Joachimsthaler (2000) the limited

ability to target specific groups. Given the Microsoft product category, it follows a
certain expectation from the consumers in them understanding the products. It is
assumed that the expected expertise for using the service was taken into account
when establishing the brands’ position. As the company keeps adding brands to its
portfolio it is crucial to remember that the level of expertise needed for using the
service remains. Microsoft is to an extent locked with their original target group
of consumers and therefore limited in reaching for new profitable segments.

Assumed that Microsoft follows an endorsed brand strategy, Aaker &

Joachimsthaler (2000) suggests some disadvantages that could be relevant for
Microsoft. As transferring associations between the endorser and the endorsed
brand could be an advantage could also negative associations occur. If the brand
management of Microsoft Word lacks the ability to give feedback to their
employees this affects their performance of the brand. According to Miles and
Mangold (2005), the employees define the brand, and before Microsoft can live in
the mind of the consumers, does it have to live in the mind of the employees. The
point is that if the employees fail in promoting the service, can this lead to
negative experiences and associations among its consumers. Further, negative
associations would potentially transfer to the evaluation of other service providers
as Microsoft PowerPoint, which could make them refuse the offer and choose a
competitor to help them with their needs.

Question 2 a)
For answering this question, there will be taken use of The Brand Resonance
model, excluding the first and second parts due to Microsoft’s positioning in the
market.

This part of the Brand Resonance Model (BRM) is the response of the consumers
as in judgments and feelings. Generally are judgments about attitudes towards the
brand and reputation, where it is assumed that Microsoft has not received any
negative judgments so far. Feelings can be divided into experiential (immediate,
short-lived) like fun and excitement, and enduring (lasting, private) like self-
respect or social approval. According to Microsoft identity among their mother-
and endorsed brands, they appeal to the consumer emotionally with enduring
feelings. Microsoft systems are in some providers private and based on storing
documents and notes leading the consumers to risk their private work. If the
consumers experience experimental feelings in the consumption of a Microsoft
system, this would be because they are testing the software and having an
emotional reaction based on its performance. These reactions/experiences are
crucial to take into account because the consumer base most of their consumption
on feelings. Sometimes it is the only factor that makes the consumers judge the
brand.

In addition, we distinguish between integral and incidental feelings. Consumer

responses that are experienced and intimately linked to the object of judgment or
choice are referred to as integral feelings. Direct exposure or cues that reflect the
object can evoke integral feelings in the consumer, thereby generating
associations to the brand. Incidental feelings, on the other hand, are experiences
that are unrelated to the object under evaluation. Microsoft may dissatisfy its
customers, resulting in incidental feelings that are evoked when the consumer
comes in contact with the brand or its endorsed brands. Consumer feelings are
important to consider since purchasing a brand might have experiential motives,
consumers frequently trust feelings from previous experiences, and consumers
frequently rely on feelings when considering to purchase individually.

Negative emotions toward brands (NEB) are defined as “negative emotional

reactions evoked by the appraisal of brand-related stimuli” Romani et al (2012).
This is stimulation originates from a marketer- and non-marketer-controlled
information sources, and is derived from service- of product-related
functionalities and attributes. Negative responses when the consumer is connected
or is thinking about the brand. Microsoft can dissatisfy its consumers by failing to
deliver its optimal service which would create negative emotions that can be
evoked as negative associations in another situation where the consumers are
reminded of the brand.

The consumer may have negative feelings toward a brand because of its slogans,
or because of an unfavorable image with a symbolic meaning, or even because of
brand alliances. It is assumed that Microsoft is an individual brand and has no
alliances connected to its service. On the other hand, they do have several service
providers which could evoke negative emotions among the consumers due to that
they feel the loss of control. A consumer that feels “in sync” with the brand could
evaluate the multiple extensions of its service as a downside.

It is crucial to pay attention to negative emotions because they play an important

role in consumers’ brand relationships. Negative emotions are evoked differently
and entail anger, embarrassment, sadness, dislike, worry, discontent, and sadness.
According to Romani et al. (2012), their empirical findings suggest the
importance of focusing on specific emotions when interacting with customers,
because emotions have a significant influence on their behavior. Microsoft should
consider the established emotional connections with its consumers before
potentially including more service providers under its umbrella. Failure to pay
attention to emotions raises the likelihood of customers switching to other brands
or engaging in negative WoM by sharing their complaints.

Another crucial part for suggesting to enhance emotional bonds with Microsoft is
resonance. When the brand has reached the degree of resonance, it has reached the
final and optimal stage in the brand resonance model. In Microsoft considering
enhancing its emotional relationship with consumers is resonance relevant for
consideration. It is defined as the degree to which customers feel "in sync" with
the brand. The top level of the pyramid describes the level or depth of the
consumers' psychological relationship with the brand. It is assumed that Microsoft
has an enormous amount of customers using its different offers and that Microsoft
reaches the requirements of brand relationships criteria for resonance by
Fournier´s (1998).

Finally, for Microsoft to enhance its emotional relationship with the consumers
Fournier´s (1998) also suggest that Microsoft marketing activity can be analyzed
by its overall effect on four relevant dimensions of brand resonance:

The first dimension is behavioral loyalty which defines the consumers’

willingness in consuming/purchase the service multiple times. In the case of
Microsoft that uses a membership, loyalty can be seen as the continuance of being
a member of the Microsoft system that allows the consumers to use its services.
Behavioral loyalty strongly suggests that there already is an emotional bond
between Microsoft and the consumers.

The next dimension is the attitudinal attachment which explains consumers’

attitude toward the brand when consuming it or suggesting it for others. Because
Microsoft already has enormous amounts of customers, and there are also
competitors in the market that could steal the consumers, we can assume that the
consumers are satisfied with Microsoft. This indicates that their attitudinal
attachment is strong and that there is a high level of emotional relationship
between the consumers and Microsoft.

Third, active engagement can also be used to determine whether the customers
have an emotional relationship or not. The dimension can be linked to word of
mouth (WoM) which is external and uncontrollable by Microsoft. Assuming that
Microsoft has many customers indicates that the number of customers also
increases. This would be a result of active engagement among the consumers
leading to positive engagement in conversations of forums connected with the
evaluation of the brand. The only way Microsoft can affect the emotional bond in
this manner is by keeping their level of quality high and delivering their promised
brand Mantra and brand image.

The last and final dimension is the sense of community. Assuming that Microsoft
does not have any physical communities indicates a possibility to arrange these in
order to bring consumers that are “in sync” with the brand together. This would
allow the consumers to share their positive experiences physically and possibly
connect customers across various cultures. Pursuing this recommendation would
enchant the emotional connection with Microsoft by creating new strong and
favorable and enchanting the already created association, possibly making them
unique. Further would this aid a lower turnover among customers due to the
unique experiences that distinguish Microsoft from other competitors like Google
Docs.

Question 2 b)
To answer this question, we can refer to the previous question about how to
improve consumers' emotional relationships with Microsoft, as well as the effects
listed throughout the answer, especially Fournier´s (1998) suggested marketing
activity. The expected outcomes can also be presented using the theory of brand
positioning.
The brands positioning of establishing a Microsoft offer an image that has
occupied a distinct and valuable place in the minds of its core customers. Defining
PoP's and PoD's are all part of the positioning guideline. Microsoft has placed
itself in a position where its consumers link strong, favorable, and unique
associations. This and especially unique explains why Microsoft is successful in
enchanting emotional responses among their customers. The frame of reference
aids in determining the membership category, its typicality, and what it is and is
not. It is clear that Microsoft has communicated its awareness among the
consumers, reaching for a higher level of connection, which is the emotional bond
and can be analyzed by having them distinguish themselves in the market.

In addition, PoD´s should distinguish the brand from its competitors, and therefore
should be they be hard to imitate or substitute. Due to Microsoft’s success in
enchanting emotional responses, they have accomplished creating PoD´s that are
desirable. Microsoft is relevant across the categories, allowing the consumers to
recall its offering when the need occurs. This indicates that the emotional bond
has put Microsoft in the consideration set among consumers, which makes the
company preferable when trying to solve their needs. Microsoft has shown that
they are distinctive in their market approach by having customers emotionally
connected with their service. This also entails physical and online communities
where the consumers share favourable associations/experiences about the brand,
potentially leading to active engagement also externally (WoM). Bastra et al
(2012) state in their article that consumers feel a deeper connection to the brand
when they have an emotional connection. These findings can be connected to the
brand resonance model where the consumers feel “in sync” with the brand. A
consequence is that consumers also will increase their purchase rate, potentially
trying other services from Microsoft, or at least considering in their consideration
set before deciding whether to purchase or not.

Microsoft will differentiate itself in the market by having consumers that believe
in their superior service offering.

Question 2 c)
Another aspect of the brand value chain framework is the multipliers for each
stage. In the case of the consumers, mindsets are the program multiplier the
relevant part to consider. According to the framework, distinctiveness, relevance,
integration, value, and excellence are factors that can affect its influence both
directly and indirectly. To answer the question ideally it needs to be discussed
through the lens of the consumers. First of all, branding is about solving the need
of the consumers. This means that the consumers need to see value in the
program, in that way will it appeal to the consumer. Distinctiveness is primarily
about how the brand differentiates itself from its competitors, but it can be a factor
that makes the consumers connect more to the specific brand in the category than
to the competitors. Relevance is one of the most crucial multipliers that define to
what degree the brand is relevant for solving the consumers’ needs. A positive
consequence stands firstly from the relevance of the product/service to solve the
distinct problem. If the brand manages to fill the need of the consumers, then the
consequences of a satisfied consumer are bigger, because the brand has managed
to create value.
For influencing the ultimate success of the brand it should focus on excellence.
The ability to connect with the consumers on another level than just solving their
needs. If the consumer can feel emotionally connected or aligned with the brands’
values, it has reached another level of connection that entails a better degree of
success. The source of value is bigger than just the attributes from the
product/service and will also include a distinctiveness made by the consumer.
This would be beneficial for the brand due to the challenge of other competitors to
match the offer.