CHAPTER THREE

MANAGING BRANDS
Chapter objectives
After reading this chapter, you should be able to:
 Introduction
 Define brand, branding
 Identifying stakeholders of branding
 Describe the types of brand
 Identify the advantage/benefits of brand (for consumer and producers)
 Comparing brand vis-à-vis product
 Identifying and choosing brand elements
 Managing brands over time

3.1. INTRODUCTION
Brand plays a vital part in enhancing marketing and corporate performance through building
reputation of a firm. Ever more firms and other organizations have come to the realization
that one of their most valuable assets is the brand associated with their products or
services. In our increasingly complex world, all of us, as individuals and as business
managers, face more choices with less time to make them. Thus a strong brand’s ability to
simplify decision making, reduce risk, and set expectations is invaluable. Thus, creating
strong brands that deliver on that promise, and maintaining and enhancing the strength of
those brands over time, is a management imperative.

The word brand dates back to Old Norse, the ancient North Germanic language from which
modern Scandinavian languages derived. Brand originally referred to a piece of burning
wood. It wasn't used as a verb until late Middle English, when it came to mean "mark
permanently with a hot iron." By the seventeenth century, it referred to a mark of
ownership made by branding.

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The practice of branding livestock is much older than the word. Cave paintings from the Stone
Age suggest that early man might have marked cattle with symbols drawn in paint and tar.
By 2000 BC, livestock owners switched to a more permanent method: burning. Egyptian
funeral monuments, approximately 4,000 years old, depict branded cattle.

During this time, brands were also used to identify goods. Pottery makers from China, India,
Greece, Rome, and Mesopotamia (now Iraq) used different engravings to identify not only
who made ceramic goods but also what types of materials were used and where the goods
were produced. Some of the earliest known marked Chinese pottery dates back 4,000 to
5,000 years. Archaeologists have also identified roughly 1,000 unique potters' marks in use
during the first three centuries of the Roman Empire.

Potters weren't the only artisans to brand their work. In Ancient Egypt, masons engraved
symbols-called stonecutters' signs-on the bricks they produced for the pyramids and other
Pharaoh-led construction projects. This helped distinguish their work from that of other
masons and ensured they were fairly paid. Bricks often included quarry marks, which
indicated where the stones came from. The oldest materials with these symbols are around
6,000 years old. Similar markings were used by masons in Greece, Israel, Turkey, Syria, and
later in Medieval Germany.

Watermarks also emerged in the medieval period as a way for paper makers, printing
houses, and other guilds to distinguish their products and property. Later, during the
Renaissance period, artists like Michelangelo introduced a new type of personal branding:
They began actually signing their names to their work, rather than using symbols.

A couple of centuries later, during the Industrial Revolution, another type of branding was
born-mass branding-this time to solve a new business challenge. Consumers were
accustomed to buying local products from local merchants. Generic products created en
masse didn't have the same appeal. So factories borrowed a tactic from winemakers and
began branding logos onto the barrels used to transport their goods. Soon, they also began

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marking individual products, giving birth to such popular American brands as Campbell's
Soup, Coca-Cola, Juicy Fruit, and Aunt Jemima.

By the late nineteenth century, companies had invested so much in branding that they
needed a way to protect those investments from competitors. In 1875, they got it with the
passing of the Trade Marks Registration Act. Now branding wasn't just something
companies did; it was something they could own. And that changed everything.

3.2. MEANING OF BRAND, BRANDING

What is Brand?
The brand is and has been defined in many different ways over the years, depending on the
perspective from which the brand is perceived. Often that depends on the academic
background of the author/originator of the different definitions. In the classical definition,
the brand is linked to the identification of a product and the differentiation from its
competitors, through the use of a certain name, logo, design or other visual signs and
symbols.
 “A brand is name, term, sign, symbol, or design, or a combination of them, intended to
identify the goods or services of one seller or group of sellers and to differentiate them
from those of competition.” American Marketing Association (AMA).
 “A brand is a complex symbol; it is the intangible sum of a product attributes its name,
packaging, and price, its history, reputation, and the way it is advertised. A brand is also
defined by consumers’ impression of the people who use it, as well as their own
experience.” Advertising guru David Ogilvy, 1955
 A brand occupies space in the perception of the consumer, and is what results from the
totality of what the consumer takes into consideration before making a purchase decision
(Pickton and Broderick 2001).
 A brand is a set of assets & liabilities links to a name/symbol that adds to or subtracts
from the value provided by that product (David Aaker).
 A set of mental association, held by the consumer, which add to the perceived value of a
product (Keller, 1998).

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What is Branding?
Branding involves an organization using a name, phrase, design, symbols, or combination of
these to identify its products and distinguish them from those of competitors.
Branding refers to the tools and strategies used to influence the way people see and think
about a brand. Branding is both visual (brand identity, logo, colors, graphics, etc.) and
emotional (brand). Branding is the entire process of creating and managing a name and
image that helps to set a business apart from its competition. Making business cards,
posting to social media, and running an advertising campaign are all examples of branding in
action. Branding helps you stand out from your competition. No matter what type of
business you have, you’re going to have competition. Effective branding will help you to
stand out and show your audience why they should buy your products or services. Branding
makes customers to discriminate among marketers’ offers in a way it creates value to the
product.

3.3. TYPE/ CLASSIFICATION OF BRAND

Brands may be classified into the following three kinds: manufacturer brand,
private/dealer brand and mixed brand.
1. Manufacturer brands: A brand which is owned by a manufacturer and/or registered
as a trade mark under the manufacturer’s name is referred to as manufacturer’s
brand. Such as Ford, are owned by the producer or service provider. Those brands
typically are held by large corporations that sell multiple products or services affiliated
with the brand. Initiated and owned by producers.
 Advantages of Manufacturer's Brands to retailers or wholesalers
 Can enhance retailer's image
 can carry lower inventory
 manufacture gets the blame for problems
 Disadvantages (risks) of Manufacturer Brands retailers or wholesalers
 Lower margins

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2. Distributors or Private Brand: A brand which is owned by a distributor and/or
registered under a distributor’s name is referred to as a distributor’s or private
brand. It is private because the manufacturer is not identified or the product is not
recognized because of him. The manufacturer simply manufactures the product and
brands it as per specifications of the distributor. It’s like Die-Hard batteries, are usually
owned by a middleman, such as a wholesaler or retailer. They often are applied to the
products of smaller manufacturers.
Advantages of Private Brands to retailers or wholesalers
 Higher gross margin  Ties salespeople to dealer
 Manufacturer cannot discontinue  Dealer controls marketing mix
 Ties consumer to dealer
Disadvantages (risks) of Private brands to retailers or wholesalers
 Higher marketing costs  Risk of lower perceived quality
 Must buy in large quantities
 Dealer gets the blame for
problems
3. Mixed Brands: A company may opt for both its own and its distributors’ brands in
respect of its products. It may sell some products in its own brand name and the rest
may be sold to dealers under their own brand names.

3.3. STAKEHOLDERS OF BRANDING

Branding is the business process of managing your trademark portfolio so as to maximize
the value of the experiences associated with it, to the benefit of your key stakeholders,
especially current and prospective:
 Employees: The more employees value your brands and understand what to do to build
them, the more your customers, suppliers, local communities and opinion leaders will
value them. The more attractive your brands are to potential employees, the more they
are likely to want to work for you.

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 Customers: the more your customers value your brand, the more they will buy your
products and recommend them to other people. They will also pay a premium for them
and make the lives of your employees easier. This, in turn, will enhance the value of your
brands to prospective purchasers and licensees. Research has shown that strong brands
are more resistant to crises of reputation.
 Stock/shareholders: Strong brands multiply the asset value of your company (90% of the
asset value of some major corporations lies in their intellectual property), and Assure
them that your company has a profitable future. Allow you to afford to give competitive
dividends to your current stock/share holders.
 Opinion leaders: The media, politicians and non-government organizations are more
respectful of strong brands
 Suppliers: Suppliers like to be associated with strong brands as this benefits their own
reputation in the eyes of other current or potential customers. You are therefore likely to
get better service at a lower total acquisition cost.
 Intermediaries: Retailers, distributors and wholesalers value strong brands as they
improve their own profit margins. They are likely to give you more “air time” and shelf
space, thus enhancing further the value of your brands in the eyes of your current and
prospective customers.
 Local communities: Supportive local authorities can make your life easier in many ways,
and offer you better deals, if you have prestigious brands. Your local communities
provide you with your work force and can be highly disruptive if they perceive you as
damaging their environment
 Purchasers and licensees: The question prospective purchasers and licensees ask is “how
much more profit can I get for my products and services sold under this brand than
under any brand I might build?” Strong brands can be spectacularly valuable.

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3.4. BENEFITS OF BRAND FOR CONSUMES AND MANUFACTURER
An obvious question is why are brands important? What functions do they perform that
make them so valuable to marketers? We can take a couple of perspectives to uncover the
value of brands to both customers and firms themselves. The next table provides an
overview of the different roles that brands play for these two parties. We’ll talk about
consumers first.
For Consumers For Manufacturers

 Identification of source of product  Means of identification to simplify

 Assignment of responsibility to product handling or tracing
maker  Means of legally protecting unique
 Risk reducer features
 Search cost reducer  Signal of quality level to satisfied
 Promise, bond, or pact with maker of customers
product  Means of endowing products with unique
 Symbolic device associations
 Signal of quality  Source of competitive advantage
 Source of financial returns

3.5. PRODUCT VS. BRAND

3.5.1. What is a Brand a product?
A product is anything we can offer to a market for attention, acquisition, use, or
consumption that might satisfy a need or want. Thus, a product may be a physical good like a
cereal, tennis racquet, or automobile; a service such as an airline, bank, or insurance
company; a retail outlet like a department store, specialty store, or supermarket; a person
such as a political figure, entertainer, or professional athlete; an organization like a
nonprofit, trade organization, or arts group; a place including a city, state, or country; or
even an idea like a political or social cause.

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3.5.2. Differences between Brand and Products

Brand Product

Distinguishes a product from other products An item ready for sale in the market

It is what customers want It is what customers need

Cannot be copied Can be copied

Created by consumers in their mind Produced by manufacturers

Cannot be replaced Can easily be replaced

A brand is intangible Product is tangible

A brand offers value Product performs specific functions

Brand remains forever A product can be replaced with time.

3.6. IDENTIFYING AND CHOOSING BRAND ELEMENTS

3.6.1. Elements of a Brand
Brand elements, sometimes called brand identities, are those trade-markable devices that
serve to identify and differentiate the brand. The main ones are brand names, URLs, logos,
symbols, characters, spokespeople, slogans, jingles, packages, and signage.
1. Brand Names
Brand names can be an extremely effective shorthand means of communication. Whereas
an advertisement lasts half a minute and a sales call could run to hours, customers can
notice the brand name and register its meaning or activate it in memory in just a few
seconds. Because it is so closely tied to the product in the minds of consumers, however, the
brand name is also the most difficult element for marketers to change. So they
systematically research them before making a choice. Although that may seem to allow a lot
of choices, each year tens of thousands of new brands are registered as legal trademarks. In
fact, arriving at a satisfactory brand name for a new product can be a painfully difficult and
prolonged process. After realizing that most of the desirable brand names are already legally
registered, many a frustrated executive has lamented that “all the good ones are taken.”

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Naming guidelines for choosing a new brand name for new product:
 Descriptive: describing general function ex. sky bus, Singapore airline
 Suggestive: implying benefits ex. Power horse, Agilent technologies
 Compound: combination of two or more, often unexpected words. eg. Nescafe,
Palmolive, red hat
 Classic: ancient language like Latin, Greek
 Arbitrary: real words with no obvious tie in to the company. know words having no
link ex. Dashen, Apple
 Fanciful : coined words with no meaning ex. Jakaranda agro industry
2. Uniform Resource Locators (URLs)
URLs specify locations of pages on the Web and are also commonly referred to as domain
names. Anyone wishing to own a specific URL must register and pay for the name. As
companies clamored for space on the Web, the number of registered URLs increased
dramatically. Every three-letter combination and virtually all words in a typical English
dictionary have been registered. The sheer volume of registered URLs often makes it
necessary for companies to use coined words for new brands if they wish to have a Web site
for the brand. Another issue facing companies with regard to URLs is protecting their brands
from unauthorized use in other domain names. A company can sue the current owner of the
URL for copyright infringement, buy the name from the current owner, or register all
conceivable variations of its brand as domain names ahead of time. Brand recall is critical for
URLs because it increases the likelihood that consumers easily remember the URL to get to
the site. Typically, for an existing brand, the main URL is a straightforward and maybe even
literal translation of the brand name, like www.shell.com, although there are some
exceptions and variations, such as www.purplepill.com for the Nexium acid-reflux
medication Web site.
3. Logos and Symbols
Although the brand name typically is the central element of the brand, visual elements also
play a critical role in building brand equity and especially brand awareness. Logos have a long
history as a means to indicate origin, ownership, or association. Logos range from corporate

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names or trademarks (word marks with text only) written in a distinctive form, to entirely
abstract designs that may be completely unrelated to the word mark, corporate name, or
corporate activities. Examples of brands with strong word marks and no accompanying
logo separate from the name include Coca-Cola, Dunhill, and Kit Kat. Examples of abstract
logos include the Mercedes star, Rolex crown, CBS eye, Nike swoosh, and Olympic rings.
These non–word mark logos are also often called symbols.

Many logos fall between these two extremes. Some are literal representations of the brand
name, enhancing brand meaning and awareness, such as the Arm and Hammer, American
Red Cross, and Apple logos. Logos can be quite concrete or pictorial in nature like the Ralph
Lauren’s polo player, American Express centurion, and the Land o’ Lakes Native American.
Certain physical elements of the product or company can become a symbol, as did the
McDonald’s golden arches, Goodyear blimp, and the Playboy bunny ears. Like names,
abstract logos can be quite distinctive and thus recognizable. However, because abstract
logos may lack the inherent meaning present with a more concrete logo, one danger is that
consumers may not understand what the logo is intended to represent without a significant
marketing initiative to explain its meaning. Consumers can evaluate even fairly abstract
logos differently depending on the shape.
4. Characters
Characters represent a special type of brand symbol--one that takes on human or real-life
characteristics. Brand characters typically are introduced through advertising and can play a
central role in ad campaigns and package designs. Some are animated characters; others are
live-action figures like Juan Valdez (Colombian coffee) and Ronald McDonald. One character
has been both in its lifetime. Because they are often colorful and rich in imagery, brand
characters tend to be attention getting and quite useful for creating brand awareness.
Brand characters can help brands break through marketplace clutter as well as help
communicate a key product benefit. The human element of brand characters can enhance
likeability and help create perceptions of the brand as fun and interesting. A consumer may
more easily form a relationship with a brand when the brand literally has a human or other

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character presence. Finally, because brand characters do not typically have direct product
meaning, they may also be transferred relatively easily across product categories. Popular
characters also often become valuable licensing properties, providing direct revenue and
additional brand exposure.
5. Slogans
Slogans are short phrases that communicate descriptive or persuasive information about
the brand. They often appear in advertising but can play an important role on packaging and
in other aspects of the marketing program. Slogans are powerful branding devices because,
like brand names, they are an extremely efficient; shorthand means to build brand equity.
They can function as useful “hooks” or “handles” to help consumers grasp the meaning of a
brand—what it is and what makes it special. They are an indispensable means of
summarizing and translating the intent of a marketing program in a few short words or
phrases. For example, Commercial Bank of Ethiopia “The Bank You Always Rely On” has been
used for decades to represent the dependability of the brand.
6. Jingles
Jingles are musical messages written around the brand. Typically composed by professional
songwriters, they often have enough catchy hooks and choruses to become almost
permanently registered in the minds of listeners—sometimes whether they want them to or
not! During the first half of the twentieth century, when broadcast advertising was confined
primarily to radio, jingles were important branding devices. We can think of jingles as
extended musical slogans, and in that sense classify them as a brand element. Because of
their musical nature, however, jingles are not nearly as transferable as other brand
elements. They can communicate brand benefits, but they often convey product meaning in
a non-direct and fairly abstract fashion. Thus the potential associations they might create for
the brand are most likely to relate to feelings and personality and other intangibles. Jingles
are perhaps most valuable in enhancing brand awareness. Often, they repeat the brand
name in clever and amusing ways that allow consumers multiple encoding opportunities.
Consumers are also likely to mentally rehearse or repeat catchy jingles after the ad are over,
providing even more encoding opportunities and increasing memorability. A well-known

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jingle can serve as an advertising foundation for years. The familiar “Give Me a Break” jingle
for Kit Kat candy bars has been sung in ads since 1988 and has helped make the brand the
sixth best-selling chocolate candy bar in the United States.
7. Packaging
Packaging is the activities of designing and producing containers or wrappers for a product.
Like other brand elements, packages have a long history. Early humans used leaves and
animal skin to cover and carry food and water. Glass containers first appeared in Egypt as
early as 2000 B.C. Later, the French emperor Napoleon awarded 12,000 francs to the winner
of a contest to find a better way to preserve food, leading to the first crude method of
vacuum packing. From the perspective of both the firm and consumers, packaging must
achieve a number of objectives:
 Identify the brand.  Assist in at-home storage.
 Convey descriptive and persuasive  Aid product consumption.
information.
 Facilitate product transportation
and protection.
Marketers must choose the aesthetic and functional components of packaging correctly to
achieve marketing objectives and meet consumers’ needs. Aesthetic considerations govern
a package’s size and shape, material, color, text, and graphics. Innovations in printing
processes now permit eye-catching and appealing graphics that convey elaborate and
colorful messages on the package at the “moment of truth”—the point of purchase.
Packaging is one of the strongest associations consumers have with a brand is inspired by
the look of its packaging. The package can become an important means of brand
recognition and convey or imply information to build or reinforce valuable brand
associations. Structural packaging innovations can create a point-of-difference that permits
a higher margin. New packages can also expand a market and capture new market
segments. Packaging changes can have immediate impact on customer shopping behavior
and sales. One of the major packaging trends of recent years is to make both bigger and
smaller packaged versions of products (as well as portions) to appeal to new market
segments.

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3.6.2. Criteria for Choosing Brand Elements
The customer-based brand equity model suggests that marketers should choose brand
elements to enhance brand awareness; facilitate the formation of strong, favorable, and
unique brand associations; or elicit positive brand judgments and feelings. In general, there
are six criteria for brand elements: Memorable, Meaningful, Likable, Transferable, Adaptable
and Protectable.
1. Marketer’s offensive strategy and build brand equity
 Memorability: Brand elements should inherently be memorable and attention-
getting, and therefore facilitate recall or recognition. For example, a brand of
propane gas cylinders named Blue Rhino featuring a powder-blue animal mascot with
a distinctive yellow flame is likely to stick in the minds of consumers.
 Meaningfulness: Brand elements may take on all kinds of meaning, with either
descriptive or persuasive content. Two important criteria of brand meaningfulness
are general information about the nature of the product category and Specific
information about particular attributes and benefits of the brand. The first dimension
is an important determinant of brand awareness and salience; the second, of brand
image and positioning.
 Likability: Do customers find the brand element aesthetically appealing? Descriptive
and persuasive elements reduce the burden on marketing communications to build
awareness.
2. Defensive role for leveraging and maintaining brand equity
 Transferability: How useful is the brand element for line or category extensions? To
what extent does the brand element add to brand equity across geographic
boundaries and market segments?
 Adaptability: The more adaptable and flexible the brand element, the easier it is to
update it to changes in consumer values and opinions. For example, logos and
characters can be given a new looking or a new design to make them appear more
modern and relevant.
 Protect ability: Marketers should:

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  Choose brand elements that can be legally protected internationally.
 Formally register chosen brand elements with the appropriate legal bodies.
 Vigorously defend trademarks from unauthorized competitive infringement.

3.7. MANAGING BRANDS OVER TIME

One of the obvious challenges in managing brands is constant change in the marketing
environment. Shifts in consumer behavior, competitive strategies, government regulations,
technological advances and other areas can profoundly affect the fortunes of a brand.
Besides these external forces, the firm’s own strategic focus may force minor or major
adjustments in the way it markets its brands. Effective brand management thus requires
proactive strategies designed to at least maintain—if not actually enhance—customer-
based brand equity in the face of all these different forces. The main assertion of this section
is that marketers must actively manage brand equity over time by reinforcing the brand
meaning and, if necessary, by making adjustments to the marketing program to identify new
sources of brand equity.
Brand Reinforcement
As a company's major enduring asset, a brand needs to be carefully managed so that its
value does not depreciate. Many brand leaders of 70 years ago remain brand leaders today-
Wrigley, Coca-Cola, Heinz, and Campbell Soup-but only by constantly striving to improve
their products, services, and marketing. Brand equity is reinforced by marketing actions that
consistently convey the meaning of the brand in terms of:
1. What products the brand represents, what core benefits it supplies, and what needs it
satisfies,
2. How the brand makes products superior, and which strong, favorable, and unique
brand associations should exist in the minds of consumers.
Nivea, one of Europe's strongest brands, has expanded its scope from a skin cream brand to
a skin care and personal care brand through carefully designed and implemented brand
extensions reinforcing the Nivea brand promise of "mild," "gentle," and "caring" in a
broader arena.

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Reinforcing brand equity requires innovation and relevance throughout the marketing
program. The brand must always be moving forward-but moving forward in the right
direction, with new and compelling offerings and ways to market them. Brands that fail to
move forward-such as Kmart, Levi Strauss, Montgomery Ward, Oldsmobile, and Polaroid-
find that their market leadership dwindles or even disappears.
An important part of reinforcing brands is providing marketing support that's consistent in
amount and kind. Consistency doesn't mean uniformity with no changes: Many tactical
changes may be necessary to maintain the strategic thrust and direction of the brand.
Unless there is some change in the marketing environment, however, there is little need to
deviate from a successful positioning. When change is necessary, marketers should
vigorously pre· serve and defend sources of brand equity.

In managing brand equity, marketers must recognize the trade-offs between activities that
fortify the brand and reinforce its meaning, such as a well-received new product
improvement or a creatively designed ad campaign, and those that leverage or borrow from
existing brand equity to reap some financial benefit, such as a short-term promotional dis·
count that just emphasizes the lower price. At some point, failure to reinforce the brand will
diminish brand awareness and weaken brand image.

Brand Revitalization
Changes in consumer tastes and preferences, the emergence of new competitors or new
technology, or any new development in the marketing environment can affect the fortunes
of a brand. In virtually every product category, once-prominent and admired brands-such as
Smith Corona, Zenith, and TWA-have fallen on hard times or even disappeared.
Nevertheless, a number of brands have managed to make impressive comebacks in recent
years, as marketers have breathed new life into their customer franchises. Volkswagen, Dr.
Scholl's, and Hyperion Solutions software have all seen their brand fortunes successfully
turned around to varying degrees in recent years. Often, the first thing to do in revitalizing a
brand is to understand what the sources of brand equity were to begin with. Are positive

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associations losing their strength or uniqueness? Have negative associations become linked
to the brand? Then decide whether to retain the same positioning or create a new one, and
if so, which new one. Sometimes the actual marketing program is the source of the problem,
because it fails to deliver on the brand promise. Then a "back to basics" strategy may make
sense, as it did for Harley Davidson.

In other cases, however, the old positioning is just no longer viable and a "reinvention"
strategy is necessary. Mountain Dew completely overhauled its brand image to become a
soft-drink powerhouse. As its history reveals, it is often easier to revive a brand that is alive
but has been more or less forgotten. There is obviously a continuum of revitalization
strategies, with pure "back to basics" at one end, pure "reinvention" at the other and many
combinations in between. Brand revitalizations of almost any kind start with the product.
General Motors' turnaround of its fading Cadillac brand was fueled by new designs that
redefined the Cadillac look and Styling, such as the CTS sedan, XLR roadster, and ESV sport
utility vehicle.

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