Unit-IV: Brand Management

1. Importance and definition of Brand,

2. Brand success and failure,
3. meaning and Importance of Brand equity,
4. Methods and procedures of measuring
Brand equity
 Importance and definition of Brand
 According to American Marketing Association,

A brand is a name, term symbol or design, or a combination

of them which is intended to identify the goods or services of
one seller or group of sellers and to differentiate items from
those of competitors.
 definition of Brand
The famous advertising copywriter and ad agency founder
David Ogilvy's definition of a brand is -
‘It is the intangible sum of a product's attributes: its name,
packaging, and price, its history, its reputation, and the
way it's advertised.’
Types and Classification of Brands

1-Individual brand: They are the separate brands used for

different items or products lines sold by the firm.
For example ITC has different brand names of its different
cigarettes like Wills, Capstan, Gold Flake, India King etc.
These brands have distinct images and appeals and are
marketed differently.
2-Family Brand: Here one name is used for two or
more individual products; example Amul is using the
name Amul for all of its dairy products.

Family branding is most effective for specialized firms

or those with specialized product lines.
3-Manufacturers Brand: Manufacturer brand contains the
names of manufacturers and obtain the vast sales for most
product categories.
4-Dealer and Private Brand: It contains the names
designed by middleman.

Manufacturer and dealer brand names depend on

whether the product is owned by producers or by
intermediaries.

If the brand is owned by manufacturer, the brand is

classified as manufacturer brand otherwise it is
regarded as the dealer brand.
5-Generic Brand: A brand names becomes generic
when the buyer refers the type of product he wants by
the producer’s brand name.

For example Dalda (Vegetable Ghee), Jeep

(Automobile).
Different Categories of brand

1. Premium Brand: A "premium brand" typically costs

more than other products in the same category.

2. Economy Brands: An "economy brand" is a brand

targeted to a high price elasticity market segment.

3. Fighting Brand: A "fighting brand" is a brand created

specifically to counter a competitive threat.
 Importance of Brand
The importance of brand can be summarized as follows:-
1. It is easy to make the product identification with the use of
brand name.

2. The firm is also identified by the brand name.

3. Customers are assured of the same product with the same

quality level, if the same brand is recorded.

4. Price comparisons are reduced when customers perceive

distinct brands.
5--It helps the customer to form a brand image. Brand
image is the perception a person has to a particular
brand.

6--Consumers feel less risk when purchasing a brand

with which they are familiar and toward which they
have the favorable attitude.
Essentials and Characteristics of
a Good Brand name
1-It should not be used as a general or common name for all
products of the same category.
Examples of brand names which have become general
names are Dalda, Jeep, Aspirin etc.
These were originally brand names but now they have
become public names for the products.

2-It should be unique, attractive and distinctive.

3--It should be capable of being registered and protected
legally under the legislation.

4--A brand should suggest some thing about a product’s

benefits- its use, quality, purpose, performance and action etc.

5--It should have a stable life and be unaffected by time. It

should not depend upon fashions and styles and have a short
life.

6--The brand name should be simple, short, and easy to

pronounce so that the customer can remember and identify it
easily.
 Functions of Branding
Branding is a powerful instrument of promotion which
performs the following functions:-
1--Ensures better quality of goods: Branding ensures
products of better quality to the buyers. Branded goods can
also be sold on the basis of description only.
2--Leads to consumer protection: The prices of branded
products are fixed by the manufacturers and are printed on
the packages. This protects the interests of the consumers
because retailers can not charge more than the printed
prices.
3--It is an advertisement: If brand name attains goodwill,
it will serve as a useful medium of advertisement.
A registered brand name and mark is a protection from
imitation of the product by other manufacturers.

Brand name is highly used for advertising product and

maintaining individuality.
4--It serves as a bridge between seller and buyer: Brand is
an effective bridge between seller and buyer in the market
place.
It has become an indispensable tool of any business or
corporate strategy.

5--Leads to product differentiation: Branding is essential

particularly for big upcoming manufacturing enterprises.
Branding helps in distinguishing a product from other
similar products in the market.
6--Protection of goods: Generally the branded products are
packed in suitable containers or wrappers which afford
protection to the goods against heat and moisture and facilitate
convenient handling.

The consumers derive many other benefits from the branded

products. They are assured of the quality of the branded
products.
Brand failure
 Brand failure
Why brands fail?

Brands have to establish ‘emotional ties’ with their

customers. Once a brand has created that necessary
bond, it has to handle it with care. One step out of line
and the customer may not be willing to forgive. This is
ultimately why all brands fail. Something happens to
break the bond between the customer and the brand.
 This is not always the fault of the company, as some things really are beyond their
immediate control (global recession, technological advances, international
disasters etc).

 However, more often than not, when brand struggle or fail it is usually down to a
distorted perception of either the brand, the competition or the market.

 This altered view is a result of one of the following seven deadly sins of branding:

1--Brand amnesia- For old brands, as for old people,

memory becomes an increasing issue.

 When a brand forgets what it is supposed to stand for, it runs into trouble.

 The most obvious case of brand amnesia occurs when a venerable, long-standing
brand tries to create a radical new identity, such as when Coca-Cola tried to
replace its original formula with New Coke. The results were disastrous.
2--Brand ego- Brands sometimes develop a tendency
for over-estimating their own importance, and their own
capability. This is evident when a brand believes it can
support a market single-handedly, as Polaroid did with the
instant photography market.
It is also apparent when a brand enters a new market for
which it is clearly ill-suited, such as Harley Davidson trying
to sell perfume.

3--Brand megalomania (delusions of grandeur)-

Egotism can lead to megalomania. When this happens, brands
want to take over the world by expanding into every product
category imaginable. Some, such as Virgin, get away with it.
Most Lesser brands, however, do not.

4-Brand deception(misleading )- ‘Human

kind cannot bear very much reality,’ wrote T S Eliot.
Neither can brands. Indeed, some brands see the whole
marketing process as an act of covering up the reality
of their product.

In extreme cases, the trend towards brand fiction can

lead to downright lies. For example, in an attempt to
promote the film A Knight’s Tale one Sony
 marketing executive invented a critic, and a suitable quote, to put
onto the promotional poster. In an age where markets are
increasingly connected, via the Internet and other technologies,
consumers can no longer be deceived.

5-Brand fatigue - Some companies get bored with

their own brands. You can see this happening to products which
have been on the shelves for many years, collecting dust. When
brand fatigue sets in creativity suffers, and so do sales.
6-Brand paranoia- (complicated
conspiracy is frequently imagined)This is the
opposite of brand ego and is most likely to occur when a
brand faces increased competition. Typical symptoms
include: a tendency to file lawsuits against rival
companies, a willingness to reinvent the brand every six
months, and a longing to imitate competitors.

7-Brand irrelevance- When a market radically

evolves, the brands associated with it risk becoming
irrelevant and obsolete. Brand managers must strive to
maintain relevance by staying ahead of the category, as
Kodak is trying to do with digital photography.
 BRAND
SUCCESS
1--Understanding your market and your
customer.

Brands should be customer-driven.

 What does the customer want or need?

 What kind of experience does the customer want to have
with my brand?
 How does my product/service make the customer feel?

 You cannot affect brand perceptions of your business

without understanding your customers.
2-Ensuring that brand is reinforced within the corporation
as well as externally.

A strong brand is represented in every customer touch point

including customer service, direct sales, call center interactions,
product/service delivery and all other direct and indirect contact
with your customers and/or the media.

Marketing alone cannot carry a brand. Moreover, your brand is

built on customer experience and perception.

The best marketing and advertising means nothing if the

promises don’t ring true.
 3-Reflecting your business values and goals through your brand.
 
 It is one thing to imply that your brand reflects these philosophies or values;
however, it is quite another to back up those assertions with specific
actions.

 In doing so, you will strengthen your brand as well as customer loyalty.

 Disney presents a great example.

 The company has a worldwide outreach program, which supports public

service initiatives, community outreach and volunteer programs helping
families, children and the arts, as well as a program that supports
environmental efforts.
 Disney’s environmental beliefs have led the company to create The Disney
Wildlife Conservation Fund.
The fund has distributed more than $6 million among 200
environmental conservation projects in more than two
dozen countries.
Their worldwide outreach program has donated more than
$190 million in cash, public service announcements and
volunteerism globally.
Disney employees volunteer their time and talents in their
communities, contributing more than 402,000 hours of
service to outreach projects.
These actions are deliberate and help project a community-
focused and environmentally conscious image.
In turn, this concept drives customers’ perceptions of the
Disney brand as a magical kingdom where all is good.
4--Crafting external communications, both oral and
written, to properly represent your brand.
The message and tone in these communications should align
with your brand.
Every opportunity in front of your customer is an opportunity
to reinforce brand.
A visit to any of the Disney properties reinforces the
importance of consistently representing your brand.

Cast members (as they call their employees) adhere to strict

brand guidelines—from meticulous detail about their
appearance to how they communicate with park guests.
Park cast members and characters are warm, friendly and
helpful.
5-Representing your brand through your products
and services.
McDonald’s golden arches represent more than
hamburgers. They reflect the company’s commitment
to quality across the board—quality in its food products
as well as quality in its employees, franchises and
community outreach programs.

To reinforce their brand, the company maintains high

standards throughout the organization.

Franchise operations are held to rigorous quality

assurance requirements.
 “ Brand Equity

Simon & Sullivan (1993), summarizes that:

“Brand equity is the capitalized value of the
profits that result from associating the
brand’s name with particular products or
services.”
 Brand Equity
No common viewpoint on how it should be conceptualized
and measured
It stresses the importance of brand role in marketing
strategies.
Brand equity is defined in terms of the marketing effects
uniquely attributable to the brand.
Brand equity relates to the fact that different outcomes result
in the marketing of a product or service because of its brand
name, as compared to if the same product or service did not
have that name.
meaning and Importance of Brand
equity,
 What return the branding gives to a marketer?
 How much of the sales can be attributed to the branding
exercise?
 Is there a way to measure a return on investment?
These questions form the basis of brand equity.
Brand equity can be considered as the incremental value added
to the product due to the existence of a brand name.
Brand equity is the positive differential effect that knowing the
brand name has on customers’ response to the product or
service.
Broadly brand equity can be viewed as the value added to a
product by a brand name.
 Brand value and brand equity
Brand value is the total financial value
of the brand. Brand value measurement
is different form equity measurement.

The aim of brand value measurement is mainly to

determine the price at which a brand could be
traded . Whereas brad equity is measured to
improve brand building/ marketing efforts for that
brand.
Importance of Brand Equity

Greater loyalty
Less vulnerability to competitive marketing actions
Less vulnerability to marketing crises
Larger margins
More inelastic consumer response to price increases
More elastic consumer response to price decreases
Greater trade cooperation and support
Increased marketing communication effectiveness
Possible licensing opportunities
Additional brand extension opportunities.
Guidelines for Measuring Brand
Equity 

1.Formalize the firm’s view of brand

equity
2.Conduct brand inventories
3.Conduct consumer tracking studies
4.Assemble results of outcome measures
5.Establish a department to oversee the
implementation
Measurement of brand equity
1. Aaker's Ten components of Brand
Equity
2. Customer based Brand Equity
3. Price Premium methods
4. Conjoint Analysis
5. Brand Iceberg Model
6. The inter brand approach
7. Copernican approach
8. The network approach
1-Aaker's Ten components of Brand
Equity-

The measure of each of the five components are obtained

by measuring the subcomponents.

(1)-1-Price premium could be measured by asking the

customer how much price premium they are willing
to pay the brand.

2- for measuring satisfaction data can be obtained

on a suitable rating scale and it can then be analyzed.
      

  Price premium
Loyalty  
  Satisfaction
   
  Perceived Quality
Perceived Quality / leadership  
  Leadership
   
  Perceived value
Association/ Differentiation  
  Brand personality
 
  Associations
   
Levels of awareness
Awareness
   
  Market Share
 Market Behavior  
    Distribution Issues
(2) 3-perceived quality can also be obtained on an interval scale.
4- leadership refers to leadership in sales or innovation or in customer
acceptance of the brand .it could be also captured using rating scale.

(3)-5,6,7-The association is seen as a sum of value which indicates

functional benefit of the product ,Brand personality and image of the
organization associated with the brand.

(4)-8- there are five levels of awareness / recognition – 1-recall, 2-top-of –

mind, 3-brand dominance, 4-brand knowledge , and 5-brand opinion

(5)-9,10—the fifth components which is obtained from the market ,

compris3s of market share and distribution coverage, which hardly
requires a survey .
It is practically not possible to consider all
components .

Hence managers need to identify a set of relevant

components and they need to allot appropriate weight for
them.

 A suitable combination mechanism needs to be evolved

to consolidate the data across dimensions into one that
represents brand equity
2-Customer Based brand equity

According to Keller brand equity can be measured by

brand knowledge, which consists of two components-
brand awareness and brand image.

 The subcomponents of each of these are shown in

diagram:
 BRAND KNOWLEDGE

BRAND AWARENESS
BRAND IMAGE
RECOGNITIO
RECALL
N
TYPES FAVORABI STRENGT UNIQUEN
OF LITY OF H OF ESS OF
BRAND KNOWLEDGE
ASSOCIA ASSOCIATI ASSOCIATI ASSOCIA
TION ON ON TION

o BRAND KNOWLEDGESSSSSSSSS
ATTRIBUTES BENEFITS ATTITUDES

NON PRODUCT PRODUCT EXPERIENTI SYMBOLS

FUNCTIONAL
RELATED RELATED AL

USER USAGE
PRICE PACKAGE
IMAGERY IMAGERY

The subcomponents brand awareness and brand image

The measurement of equity can be done in two methods.
All the components could be captured from the customer
using a 10 point rating scale and the brand knowledge
gives the brand equity.

In the other method the response of consumers are

recorded when the marketing mix (4 Ps) of a known brand
is replicated to an unknown brand/unbranded product.

 for example we can measure the brand equity of “Maggi’

using the second approach .
The recall and recognition of ‘Maggi’ is noted on a rating scale.
Then we proceed from the last blocks of the above chart that is
from the bottom .
The price , packaging, and product related attributes of the
product are copied and the product is given a name
‘Boogy’.’Boogy’ which carries the same functional ,
experiential, and symbolic benefits as that of ‘Maggi’.

This is stated to the consumers. The response of consumers to

‘Maggi’ and ‘Boogy’ are tested and recorded .

The measurement are appropriately quantified and the value

gives brand image .

This combined with awareness would give the equity of ‘Maggi’

 3-Price premium methods
These methods are based on the principle that the brand equity
of a product is given by the extra amount that the consumers
are willing to pay to purchase a brand.

One way is to measure the difference in price between the

unbranded product and the branded one. Multiplying this with
the total number of quality sold gives the brand equity.
Subtracting the branding costs from the value obtained gives
the profits due to branding.
 Cummins approach is one such method of brand equity measurement,
wherein the amount added by the brand per unit of products is found out
by increasing or decreasing the price of the brand until the preference
for the brand and the reference brand becomes equal. The difference in
price is multiplied with that of the number of units sold to obtain the
equity.

 For instance
 The price of brand H is Rs. 104 and that of brand C is Rs 125. Assume
brand H is preferred by 10 customers and Brand C by 30. now price of
C is further raised. At some point Brand C customers would shift to H
and the price at which the preference becomes equal for the brand is
noted.
 Assume at Rs 130 of C brand , users of H and C become equal to 15.
Now the difference between 130 and 104 (=Rs. 26) multiplied numbers
of units of C gives the equity of C.
 4-Conjoint analysis ( Consisting of two or more
associated entities)

In this analysis , overall utility of a product is taken as an

input and the utility of each of the components is the
output . Branding is considered as one of the
characteristics of the product and its utility is obtained as
one of the outputs.
5-Brand Iceberg Model
In this the internal brand value is measured as the sun of
internal brand image and brand assists.
The brand value is represented in the form of a iceberg with
the brand assets situated at the lower portion of the iceberg
and brand image constituting the upper part.

Brand image is influenced by the brand assets. Which are

invisible to the consumers.
This could be understood on knowing the components of
brand image and brand assets .
A brand image is seen as the image obta8ned due to product
and packaging design, advertising , promotions events, etc.
As seen these are essentially short term measures.
 Brand awareness , clarity and appeal of internal brand image ,
distinctiveness of brand identity and lasting impact of
advertising and advertising pressure as subjectively perceived
shape the perceived brand image.

 The brand assets represents longer-term changes in consumer

attitudes, earlier investments in the brand , brand appeal and
brand loyalty.

 The diagram visualizes the same concept.

 Brand Image
1. Brand awareness
2. Subjective
perception of
advertising
pressure
Brand Image 3. Memorability of
advertising
4. Brand
uniqueness
5. Clarity of internal
image

Brand Assets 6. Attractiveness of

internal image
Brand assets
1. Brand appeal
2. Brand loyalty
3. Consumer
attitudes
4. Brand
investment's
The value of each of the individual components
are measured and compared with the reference
values in the icon’s’ database, which contains
values for each sector or product category. The
final value is obtained by combining all the values
of the individuals components after they have been
suitably indexed with the corresponding reference
values in the database . This method has the
disadvantage of being too dependent of the
reference value.