Marketing Management

Exam Two Lecture Two

4-1

Presentation Themes
‡ Brands ‡ Brand Equity Brand Elements ‡ Devising A Brand Strategy ‡ Brand Extensions

4-2

4-3 .´  A brand is a product or service that adds dimensions that differentiate it in some way from other products or services designed to satisfy the same need. sign. rational. or design. or intangible-related to what the brand represents.  These differences may be functional. or tangible-related to the product performance of the brand.Brands  The American Marketing Association defines a brand as ³a name.  They may also be more symbolic. intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. or a combination of them. emotional. term. symbol.

 Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again.The Role of Brands  Brands identify the source or maker of a product and allow consumers to assign responsibility to a particular manufacturer or distributor.  Brand loyalty provides predictability and security of demand for the firm and creates barriers to entry for other firms.  Brands perform valuable functions for the firm.  Branding can be seen as a powerful means to secure a competitive advantage 4-4 .  Consumers learn about brands through past experiences with the product and its marketing program.

Marketing Advantages of Strong Brands  Improved perceptions of product performance  Greater loyalty  Less vulnerable to competition  Less vulnerable to crises  Larger margins  Inelastic consumer response to price increases  Elastic consumer response to price decreases  Greater trade cooperation  Increase in effectiveness of IMC  Licensing opportunities  Brand extension opportunities 4-5 .

 Branding is endowing products and services with the power of a brand. consumers must be convinced that there are meaningful differences among brands in the product or service category. it is necessary to teach consumers ³who´ the product is. ³what´ the product does.The Scope Of Branding ‡ A brand is a perceptual entity that is rooted in reality but reflects the perceptions and perhaps even the idiosyncrasies of consumers.  For branding strategies to be successful and brand value to be created. 4-6 .  Brand differences often are related to attributes or benefits of the product itself.  To brand a product.  The key to branding is that consumer must not think that all brands in the category are the same. and ³why´ consumers should care.

and act with respect to the brand as well as the prices. feel.  A brand is said to have positive customer-based brand equity when consumers react more favorable to a product and the way it is marketed when the brand is identified as compared to when it is not. think.  This value may be reflected in how consumers.Defining Brand Equity ‡ Brand equity is the added value endowed to products and services.  Customer-based brand equity can be defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand. market share. and profitability that the brand commands for the firm.  Brand equity is an important intangible asset to the firm that has psychological and financial value. 4-7 .

and all accompanying marketing activities and supporting marketing programs. There are three main sets of brand equity drivers:  The initial choice for the brand elements or identities comprising the brand.  The product. service.  Other associations indirectly transferred to the brand by linking it to some other entity.BUILDING BRAND EQUITY  Marketers build brand equity by creating the right brand knowledge structures with the right consumers. 4-8 .

 Brand elements can be chosen to build as much brand equity as possible.Choosing Brand Elements  Brand elements are those trademarkable devices that serve to identify and differentiate the brand. 4-9 .  The test of the brand-building ability of these elements is what consumers would think or feel about the product if they only knew about the brand element.

Brand Elements Brand names Slogans Characters URLs Logos Symbols 4-10 .

adaptable. and protectable) are more ³defensive´ and are concerned with how the brand equity contained in a brand element can be leverage and preserved in the face of different opportunities and constraints. meaningful. 4-11 . The first three (memorable.  The latter three (transferable. and likeable) can be characterized as ³brand building´ in terms of how brand equity can be built through the judicious choice of a brand element.Brand Element Choice Criteria  There are six criteria in choosing brand elements.

 Brand elements should be easily recognized. 4-12 . recalled. and persuasive.Brand Elements  Brand elements can play a number of brand-building roles.  The different associations that arise from the likeability and appeal of brand elements may also play a critical role in the equity of the brand.  Memorable or meaningful brand elements can reduce the burden on marketing communications to build awareness and link brand associations. inherently descriptive.

active relationship. 4-13 .Personalization Get the consumer more actively involved with a brand by creating an intense. Personalizing marketing is about making sure that the brand and its marketing is as relevant as possible to as many customers as possible.

and whether it creates. as reflected by their brand recognition or recall performance. 4-14 . maintains.  Brand awareness is the consumers¶ ability to identify the brand under different conditions.  Brand image is the perceptions and beliefs held by consumers. as reflected in the associations held in consumer memory.  Integration is especially critical with marketing communications. or strengthens brand image.  Each communication should be judged in terms of the effectiveness and efficiency that it affects brand awareness.Integration  Marketers need a variety of different marketing activities that reinforce the brand promise.

4-15 .  Internal branding is activities and processes that help to inform and inspire employees.  One of the most potent influences on brand perception is the experience customers have with company personnel.Internalization  Marketers must adopt an internal perspective to consider what steps to take to be sure employees and marketing partners appreciate and understand how they can help²or hurt brand equity.  Brand bonding occurs when customers experience the company as delivering on its brand promise. The brand promise will not be delivered unless everyone in the company lives the brand.

 Sporting or cultural events²sponsorships.  Other brands²ingredient or co-branding.  Characters²licensing.  Other third party sources²awards or reviews.Leveraging Secondary Associations The brand may be linked to certain source factors:  The company²through branding strategies.  Countries or other geographical regions² identification of product origin  Channels of distribution²channel strategy.  Spokespeople²endorsements. 4-16 .

Brand Reinforcement  As the company¶s major enduring asset.  Brand equity is reinforced by marketing actions that consistently convey the meaning of the brand to consumers in terms of:  What products the brand represents?  What core benefits it supplies?  What needs it satisfies?  How the brand makes those products superior?  Which strong. favorable. a brand needs to be carefully managed so that is value does not depreciate. and unique brand associations should exist in the minds of consumers? 4-17 .

4-18 . It can apply some of its existing brand elements. it has three main choices: It can develop new brand elements for the new product.DEVISING A BRANDING STRATEGY  The branding strategy for a firm reflects the number and nature of common and distinctive brand elements applied to the different products sold by the firm.  When a firm introduces a new product. It can use a combination of new and existing brand elements.

 If the parent brand is already associated with multiple products through brand extensions. 4-19 . then it may also be called a family brand. the brand extension can also be called a sub-brand. it is called a brand extension.  When a new brand is combined with an existing brand.  An existing brand that gives birth to a brand extension is referred to as the parent brand.Brand Extensions and Family Brands  When a firm uses an established brand to introduce a new product.

the parent brand is used to enter a different product category from that currently served by the parent brand. 4-20 .Line and Category Extensions  Brand extensions can be broadly classified into two general categories:  In a line extension.  In a category extension. the parent brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand.

 Many companies are now introducing branded variants that are specific brand lines supplied to specific retailers or distribution channels. 4-21 .  A licensed product is one whose brand name has been licensed to other manufacturers who actually make the product.  A brand mix (or brand assortment) is the set of all brand lines that a particular seller makes available to buyers.Brand Lines and Variants  A brand line consists of all products²original as well as line and category extensions sold under a particular brand.

Today. branding is such a strong force that hardly anything goes unbranded.To Brand or Not to Brand?  The first branding strategy is whether to develop a brand name for a product. Four general strategies are often used:  Individual names  Blanket family names  Separate family names for all products  Corporate name combined with individual product names 4-22 .  A commodity is a product presumably so basic that it cannot be physically differentiated in the minds of consumers.  Assuming a firm decides to brand its products or services. it must then choose which brand names to use.

 Brand extensions have two main advantages: Facilitate new product acceptance. many have decided to leverage that asset by introducing a host of new products under some of its strongest brand names.Advantages of Brand Extensions  Recognizing that one of the most valuable assets is a firm¶s brands. 4-23 . Provide positive feedback to the parent brand and company.

 Extension can result in reduced costs of the introductory launch campaign. 4-24 .  They can avoid the difficulty of coming up with a new name.  Extensions allow for packaging and labeling efficiencies.  Extensions reduce risk.New Product Success  Brand extensions improve the odds of new product success in a number of ways:  Consumers can make inferences and form expectations as to the likely composition and performance of a new product based on what they already know about the parent brand itself.

 The worst possible scenario with an extension is that it harms the parent brand image in the process. Different varieties of line extensions may confuse and perhaps even frustrate consumers.  Even if sales of a brand extension are high and meet targets. it is possible that this revenue will have resulted from consumers switching to the extension from existing product offerings of the parent brand.Disadvantage of Brand Extensions  Line extensions may cause the brand name to not be as strongly identified with any one product.  Intra-brand shifts in sales may not necessarily be so undesirable. as they can be thought of as a form of pre-emptive cannibalization. 4-25 .  Brand dilution occurs when consumers no longer associate a brand with a specific product or highly similar products and start thinking less of the brand.called cannibalizing the parent brand.

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