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chapter

12

Branding
McGraw-Hill/Irwin

2004 The McGraw-Hill Companies, Inc., All Rights Reser

Branding Todays Objectives

Objectives will be to:

Understand what a brand is and how the 2Is affect branding

Understand what brand equity is and how it is measured

Discuss how marketing programs build brand equity

Examine the seven-step branding process

Review two case studies in online branding

Discuss the effects of brand on the four customer relationship stages

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Some Internet Brands Have Become


Major Players

Source: www.brandinstitute.com/bi_site/news_release_megabrands1098.htm

Exhibit 12.1: Examples of Internet


Brands

Exhibit 12.2: Case Studies of


Successful Online Branding Efforts
Established as Traditional
Brand

Established as Online
Brand

Branding
Online

Branding and
Selling Online

Intermediary/
Vertical Portal

e-Commerce

BusinesstoConsumer

Ragu

American
Airlines

Yahoo!

CDNow

BusinesstoBusiness

Boeing

Cisco Systems

Avnet

NexPrise

Source: PricewaterhouseCoopers Moneytree Report 2000.

Exhibit 12.3: The 2Is and Branding


Individualization
Individualization

Interactivity creates
value because the
brand is tailored to the
individual

Customers gain a
sense of control with
respect to the nature
and timing of their
interactions with the
brand

There is a danger that


the brand will stray from
its core personality

Interactivity
Interactivity

Responsiveness becomes
a key brand attribute as
customers recognize that
their concerns are heard
and responded to across
multiple channels

The frequency of
interaction is increased
leading to the need to
freshen content and target
messages to specific
usage occasions

Customers expect the


brand to evolve in
response to their needs
and desires

Community
Community

Should Offline Firms Create New


Online Brands?
Point-Counterpoint
Keep the Same Brand
It takes an enormous amount
of time and money to build a
strong brand name
Customers who purchase
online are assured that
services are available offline
It is difficult to uncover
interesting new brand names
The online brand and the
offline brand can have a
synergistic effect
Target customers will not be
confused by brand offerings
appearing online

Build a New Brand


Using an existing brand limits
the growth of the user base
Existing offline brands dont
get the Net
It is possible to sign up more
partners when a third-party
name is used

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Quotes on Online Branding

E-branding is more important [than e-commerce]. And it must come


first. Because few people will buy your stuff online or off unless you
are top-of-mind. Annette Hamilton, Executive Producer, ZDNet

Brand is the price of entry [to the Internet], not the winning strategy.
Dylan Tweney, infoNet

By the time your potential customers log on, they already know what
theyre looking for, and they often know from whom they want to buy it.
Theyre just not listening to branding messages anymore. Michael
Fischler, Principal, The Pubs Group

Quotes on Online Branding (cont.)

Brands stand as comfort anchors in the sea of confusion, fear, and


doubt. In dynamic markets, strong brands have more value than ever,
precisely because of the speed with which these markets move.
Chuck Pettis, Technobranding

It took more than 50 years for Coca-Cola to become a worldwide market


leader, but only five years for online search engine Yahoo to gain market
dominance. The role of the brand has changed dramatically and has
created a vacuum between offline and online brands. Mark Lindstrom,
Executive Director, ZIVO

A companys website is the brand. Its the hub of consumer experience,


the place where all aspects of a company, from its annual report to its
products to its support, intersect. Its the company in a nutshell, all there
in a way that just is not possible in the analog world. Sean Carton,
Carton Donofrio Interactive

Exhibit 12.4: A Simple Conceptual


Model of Brand Equity
A good brand . . .
Product, Price, Community, Communication
and Distribution Programs

Wraparounds

. . . provides positive
consumer responses . . .

. . . and benefits both


target customers and firm

Brand Awareness

Customer Benefits

Depth

Confidence

Breadth

Loyalty

Satisfaction

Brand Associations
Core Product/
Service

Strength
Relevant
Consistent

Firm Benefits

Reduced
marketing costs

Valence

Uniqueness
Memorable
Distinctive

Increased
margins

Opportunity for
brand extensions

Source: Keller (1996), Aaker (1996), Strategic Market Research Group, Marketspace Analysis

Exhibit 12.5: A Model of FogDog


Branding
Fogdog Brand Perceptions
Product, Price, Community, Communication
and Distribution Programs

Wraparounds

Core Product /
Service

Emphasize prices and selection


benefits
Selective distribution
Competitive pricing
Gift shopping service
MyFogdog discounts and
benefits
How to buy help
Discussion groups by sport
Fogdog Fetch helps you find
the right product
Low prices
Selection breadth and depth

Do Strong Online Brands Matter?


Point-Counterpoint
Strength of Brand
Is Not That Important

A Strong Brand Essential


A strong brand name provides
a clear presence in the market
Strong brands attract
customers
Strong brands carry positive
associations with consumers
Clear brands are associated
with higher conversion rates
All current online winners
have strong brands

Alliances not strong brands


are the key to winning in
the marketplace
Readily available third-party
evaluators will increasingly
influence online consumption
Speed to market is more
important than branding
The trend toward
customization is leading to an
environment where the
meaning of a mega-brand is
no longer relevant
Current online winners may
have strong brands, but so do
a number of big losers

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Exhibit 12.7: Marketing Programs to


Build Brand Equity
Product
Product

Pricing
Pricing

Communication
Communication

Promotional
Promotional
Program
Program

Distribution
Distribution

Brand
Brand Equity
Equity

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Exhibit 12.8: A Seven-Step Branding


Process
Step 1

Clearly
ClearlyDefine
Definethe
theTarget
TargetAudience
Audience

Step 2

Understand
Understandthe
theTarget
TargetCustomer
Customer

Step 3

Understand
Understandthe
theCompetition
Competition

Step 4

Design
DesignCompelling
CompellingBrand
BrandIntent
Intent

Step 5

Identify
IdentifyKey
KeyLeverage
LeveragePoints
Pointsinin
Customer
CustomerExperience
Experience

Step 6

Execute
Executethe
theBranding
BrandingStrategy
Strategy

Step 7

Establish
EstablishFeedback
FeedbackSystems
Systems

Exhibit 12.9: Similarities & Differences


in Offline vs. Online Branding
Branding
Element

Offline

Online

1. Clearly Define the


Brand Audience

Limited to manageable number of segments to


prevent inconsistent messaging

Could include larger number of segments based on values or


interests rather than demographics

2. Understand the
Customer

Requires thorough understanding of environment,


desired purchase and usage experience

Requires thorough understanding of desired purchase and


usage experience in both the offline and online environment

3. Understand the
Competition

Requires monitoring of competitor advertisements and


activities

Competitor advertisements and some activities can be directly


observed online

4. Design Compelling
Brand Intent

Brand intent (desired positioning) designed to address


the needs and beliefs of target segments

Greater opportunity for customization of key messages

Buying process tends to be more dynamic and flexible

Online interactions bring in added concerns of security and


privacy

Limited familiarity with online brands makes fostering trust more


difficult

With the ability to customize, one customers brand image may


be different from another customers brand image

5. Identify Key
Leverage Points in
Customer
Experience
6. Execute the
Branding Strategy

Strong, positive brands are built up over time

Image reinforced through variety of offline media

7. Establish
Feedback Systems

Buying process is typically a simplified representation


of customer segment behavior with static leverage
points

Marketing strategy includes plan for sequenced


growth and adjustment of brand based on changing
customer needs
Building brand awareness requires significant
investment
Building brand loyalty takes time offline, especially
because early customer receptivity to brands is
difficult to assess (and usually involves market
research)

Collecting and analyzing customer feedback is more


time-consuming

Customization for multiple segments and opportunity for early


recognition of the changing customer requires a corresponding
tailoring of brand intent
Building brand awareness requires significant investment,
especially for those competitors who are not first in their
category online

Brands have the potential to generate loyalty more quickly,


especially if customers are targeted effectively

Sophisticated tools exist for tracking online; allow for


anonymous, interactive, quick feedback

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Exhibit 12.10: Citibank Online

Exhibit 12.11: Citibank Vs. Chase:


Assessment of Key Branding Elements

Exhibit 12.12: Citibank Vs. Chase


Assessment of Key Brand Attributes

Exhibit 12.13: CBS MarketWatch.com

Exhibit 12.14: CBS Marketwatch.com Vs.


Bloomberg.com: Key Branding Elements

Exhibit 12.15: CBS Marketwatch.com Vs.


Bloomberg.com: Key Brand Attributes

Exhibit 12.16: Brand as a Moderating


Variable
Brand
Brand

Enhances or Detracts

Marketing
Marketing
Levers
Levers

Relationship
Relationship
Stages
Stages

For advertising, brand can enhance awareness

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Branding and Four Key Stages of


Customer Relationships
Exploration/
Exploration/
Expansion
Expansion

Awareness
Awareness

Offline
advertising
Web price
discount
Increased
number of
channel
intermediaries
Online
billboards

Commitment
Commitment

Dissolution
Dissolution

Direct mail

Targeted price
promotions

Volume
discounts

Discontinue
pricing discounts

Efficient site
structure

Personalized
pages

Loyalty programs

Reduce
advertising
expenditures

Identify
departing
friends

Reduce customer
care

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Exhibit 12.17: EBay Vs. Amazon.com


Auctions: Key Branding Elements

Exhibit 12.17: EBay Vs. Amazon.com


Auctions: Key Branding Elements

Exhibit 12.18: EBay and


Amazon.com Auctions: Key Attributes

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Branding Conclusion

Branding is fundamentally different from the other marketing activities


product, pricing, communication, community and distribution in three ways:

Brands are reflections or outcomes of the firms marketing activities

Unlike the other activities, branding is an integral part of every


marketing activity and strategy

Strong brands can be used to enhance the effectiveness of all other marketing
activities

The branding process includes seven steps: 1) clearly define the target
audience, 2) understand the target customer, 3) understand the competition, 4)
design compelling BrandIntent, 5) identify key leverage points in customer
experience, 6) execute the branding strategy and 7) establish feedback
systems.

The presence of a strong brand enhances positive marketing activities such


that awareness, exploration and commitment are more effectively established.