Developing Brands

Overcoming Brand Parity

Problems – Different Brands
 To help establish strong

brand equity, the brand

parity problem should be
resolved.
Brand parity occurs when there
are few tangible distinctions
between competing brands in
mature markets. Brand parity indicates that only minor
product differences exist.
• Brand equity on the other hand represents a set of
characteristics that are unique to a brand.
 Benefits of brand
equity
1. Brand equity allows the firms to charge
premium prices.
2. Because of the differentiated image, brand equity may
enable the firm to retain higher market share.
3. It is a source of channel power for dealing with retailers
and leads to an improved position in terms of shelf
space and displays.
4. It influences the wholesalers to stock more of these
brands and encourage their customers to purchase.
5. Brand equity may dissuade customers to look for
cheaper products and special deals or incentives to
buy another brand
Brand equity and
domination
• “Domination” is a strongly held view
that the brand is number one in its
product category.
• Domination can happen in a geographic
region, smaller product category, or
market niche.
To dominate, the brand must be seen
as No.1 in some way by the consumers.
• Colgate may be seen as the No. 1 in
fighting cavity; Volvo in terms of “safety”,
and SBI as the “largest” bank in India
 Global Branding
Branding particularly in international
markets, is a complex affair.
• Firms can follow an adaptation strategy or
standardization strategy in promoting brands.
• Standardization means the use of same brand
name in all countries.
• In Adaptation, the brand is different in each
country or region
• Using a standardized global brand reduces costs
– instead of advertising for each local brand with
a separate communication strategy –
• Standardized global brands allow the transfer of
best practices from one country to another.
• The global brand may seem to have a higher
perceived quality
• As the world seems to shrink through advances
in telecommunications, consumers are
becoming more similar displaying similar
consumer characteristics and purchase
behaviors.
• But the global brands have failed in many
instances due to local idiosyncrasies,
sensitivities, or traditions.
• Global brands generally do well in high-
profile, high-involvement product
categories.
• Local brands perform best in low-
involvement everyday products
• In a globally integrated marketing
communication (GIMC) strategy, the wise thing
to do is to “think globally, but act locally”. This is
very much applicable in all branding strategies.
• Though the approach should be to develop
global brands, marketers will be well advised to
understand the unique features of local brands
and provide support to them
• Brands develop histories
• Brands have personalities
• Brands have strengths, weaknesses, and flaws
• Brands have families – a brand family is one in
which a company offers a series or groups of
products under one brand name
• The goal of branding is to set a product apart
from its competitors.
• After brand recognition is achieved, the next
step is to prolong its life by sticking to one
unique selling point
 Measuring Brand Equity – Brand
Metrics
• Brand metrics measure returns on
branding investments. Attitudinal
measures associated with branding may
be used to track:
Awareness
Recall
Recognition
Types of brands
• Family brands – A group of related
products sold under one name
• Brand extension – The use of an
established brand name on products
or services not related to the core
brand
• Flanker brand – The development of
a new brand sold in the same category
as another product
• Co-branding – The offering of two
or more brands in a single marketing
offer
• Ingredient branding –
The placement of one brand within another brand
• Cooperative branding –
The joint venture of two or more brands into a new
product or service
• Complementary branding –
The marketing of two brands
together for co-consumption
• Private brands – Proprietary
brands marketed by an
organization and sold within
its own outlets
 Private Brands
• Private brands, also known as Private Labels, are
proprietary brands marketed by an organization
normally distributed exclusively within the organization’s
outlets.
• To many individuals, private brands mean lower prices
and inferior quality. That is because historically primary
targets for private labels are price-sensitive buyers. But
this is no longer true because retailers are these days
investing a lot of money for developing private labels. In
the US and Canada private label sales are around 13%
and 20% respectively. In India too this trend is gaining
more momentum.
 Changes in private brands
• Improved quality
• Priced 25 percent below manufacturer’s
brands
• Loyalty toward retail outlets increased
while loyalty toward specific brands
decreased
• Increase in advertising of private brands
• Increase in quality of in-store displays of
private brands
 Positioning
• Final element in corporate and image management is
product positioning.
• Positioning is the process of creating a perception in
the customer’s mind regarding the nature of a
company and its products relative to competitors.
• Positioning is created by variables such as quality of
products, prices charged, methods of distribution,
image, and other factors.
• A product’s positioning is based on two elements: (1)
the product’s standing relative to the competition and
(2) how the product is perceived by consumers.
• The end result of positioning is the successful creation of a
customer-focused
Value proposition, a cogent reason
why the target market should buy
the product.
Example of a value proposition:
• Company and product :
Volvo – Station Wagon
• Target customer: Safety
conscious “upscale” families
• Benefits: Durability and safety
• Price: 20% premium
• Value proposition: The safest, most durable wagon in which your
family can ride
Another example
• Company and Product: Domino’s – Pizza
• Target customers: Convenience-minded Pizza
lovers
• Benefits: Delivery speed and good quality
• Price: 15% premium
• Value proposition: A good hot pizza, delivered to
your door within 30 minutes of ordering, at a
moderate price
• Consumers ultimately determine the
position a product/brand holds. Marketing
programs are designed to position
effectively. To do so, marketing
communications must either reinforce
what consumers already believe about the
product and its brand name or shift
consumer views toward a more desirable
position.
 Effective Positioning
• Effective positioning can be achieved in seven
ways:
1. Attributes
2. Competitors
3. Use or application
4. Price-quality relationship
5. Product user
6. Product class
7. Cultural symbol