Commodity and Branding

Commodity and Brand Marketing

Brand Equity• What is a brand?• Differences:- Functional- Rational- Symbolic - Emotional- Tangible• Example (Fine Arts)

The Role of brands• Consumers evaluate identical products

differently• Consumers Learning process:- Through past experience- Through marketing Program

• To protect brand:• Brand name : Protected with registered

trademark• Manufacturing process: Patent• Packaging : Copyright and designs

• Brand loyalty: - Predictability & securing demand- Barriers to entry for competitors- Premium prices • The Scope of branding:- Brand Differences: Example: Gillette, Sony- Applied virtually:

Brand equity• how consumers feel, think & act• Prices• Market share• Profitability• Psychological and financial value

Customer based brand equity

• Responses:- Positive- Negative• Brand Knowledge- Feelings, images, experiences,

beliefs• Perception, Preferences

Marketing advantages of strong brand

• Improved Performance• Greater Loyalty• Larger margins• Increased marketing

communication• Additional brand extension

Brand Equity Models• Differentiation• Relevance• Esteem• Knowledge(Diff + Relevance) = Brand strength(Esteem + Knowledge) = Brand stature

Brand Life Cycle• New Brands (Low on all valuators)• Example ( Yebhi.com) • Strong Brands ( High diff, High

Relevance) ( Low esteem and Knowledge)• Leadership Brand ( High on all valuators)• Example (Nike,

disney,subway,mc’d,godrej)• Declining Brands: (Relatively lower on

each valuators)(Kingfisher)

Aaker model• Brand Identity: (unique set of brand

association)- Brand as product: (Country of origin,

user, quality, uses)- Brand as Organization:( Local vs. global)- Brand as person:( Brand personality)- Brand as a symbol: ( Visual imagery,

brand heritage)

Brandz Model• Presence (Awareness of customers)• Relevance (Does it offer me something

?)• Performance (Can it deliver the same?)• Advantage (Can it offer something

better than others?)• Bonding (Nobody else will beat it)

Brand Resonance• Brand Salience ( Brand identity)• Brand Performance (How brand will

satisfy functional need)• Brand Imagery (Customer's

psychological or social needs)• Brand judgments ( Customer’s opinions

& evaluations)• Brand feelings:( emotional response)• Brand resonance:( In sync ) ( Apple,

eBay)

Brand element choice criteria

• Memorable (Lux, LG, Taj)• Meaningful (Fair and lovely)• likeability ( Scorpio, splendor)• Transferable (HUL)• Adaptable (Lifebuoy)• Protectible (xerox)

Developing Brand Element

• Select list of possible names.• Debating their merits.• Elimination of a few names.• Testing them with target

consumers.• Final selection.

Hire market research firm for Brand name selection

• Association Tests (What images come to your mind?)

• Learning Tests ( How easily is the name pronounced)

• Memory Tests ( How well is the name remembered)

• Preference Tests (Which names are prefered)

Examples:• Names:• Ambuja cement shows body muscles.• Aditya birla group shows water, air

and fire three main things to live life.• Slogans:• The complete man.• God’s own country. (Kerala tourism)

Holistic Marketing • Personalization:- Experiential marketing- One to one marketing- Permission marketing• Integration: • Internalization: - Employees and marketing partner- Brand bonding- B 2 E ( Business to employee programme)

Leveraging Secondary Associations Of Brand

• People:- Endorsers- Employees• Things: - Events- Causes- Third Party endorsement• Places: - Country of origin- Channels• Other Brands: - Alliances- Ingredients- Company- Extensions

Measuring Brand Equity

• Indirect approach ( Brand knowledge)

• Direct approaches ( Actual marketing impact on consumers)

Brand Audit• Brand Inventory:- How companies products and

services are branded in the market.- Visual and verbal form.• Brand exploratory: - Brand research- Build hypothesis

Brand tracking• Collecting consumer information

on daily basis.• Brand Valuation:

Managing brand equity• Brand reinforcement1) What Products & services represent2) How the brand makes those products

superior,favourable and uniqe brand association

Example: Coca cola,volvo.

• Brand revitalization1) Once admired and prominent brands (Brand

ambassador)2) Again you make impressive comback (Onida)3) More revolutionary changes than evolutionary.

• Brand crisis

Devising a branding strategy

• New brand element for the new products

• Use either existing brand elements

• Combination of both

Branding Decision:• Individual Brand names:Example: HUL: Dove, Lakme, lux, hamam,

lifebuoy• Blanket Family names• Separate family names for all products.Example: Aditya Birla Group. (Hindalco

aluminium, ultra tech cement, grasim)• Corporate names combined with individual

product names: (H.P, Honda, Sony)

Branding strategy• Brand extensions: (Merits)1)New product success 2)Feedback(Demerits):1)Brand Dilution• Brand Portfolio:1)Increase self presence in sales chain2)It provides variety3)Internal competition4)Economies of scale

• Brand flankers• Brand fighters must be in

comparison with the competitors.• Cash Cow:• Low End Entry-Level: (Traffic

builders) • High end prestige Brand

The Brand value chain• Marketing Program Investment:1) Product: - Product research- Product development- Product design2) Communication:3) Trade support:4) Employee:

Program Quality• Clarity: • Relevance:• Distinctiveness:• Consistency:

Customer Mindset• Brand awareness• Brand associations• Brand attitudes• Brand attachment• Brand activity

Customer Multiplier• Competitive superiority:

( Marketing investment)• Channel and other intermediary

support:( Sales volume)• Customer size and profile:

Market Performance• Price premiums• Price elasticities• Market share ( Total revenue)• Expansion success• Cost structure• Profitability

Market Multiplier• Market dynamics (Interest rates,

investor sentiments, Supply of capital)• Growth potential( Same industry,

External factors)• Risk profile( Facilitating and inhibiting

factors)• Brand contribution( Main brand

Comparing with brand portfolio)

Shareholder Value• Stock prices• P/E ratio• Market capitalization

Brand Tracking Studies• Product-Brand Tracking:- Brand awareness- Brand image• Corporate Or Family Brand Tracking:- Which products are most influential in affecting about

the consumer perception about the brand.- Most closely linked products to the brand.• Global Tracking:- Brand Context measures:1) Economic Indicators:- GDP- Interest Rates- Unemployment- Average Wage- Disposable Income- Exchange Rates, Share markets.

2) Retail:- Total spent in supermarkets- Growth in house brand3)Technology:- Advance technology or outdated?4) Personal Attitudes and Values:- Confidence- Security- Family- Environment- Traditional values- Foreigners Vs.Sovereignty

4) Media Indicators:- Media Consumption- Total time spent watching T.V.- Consuming other Media Advertisement

expenditure.5)Demographic Profile:- Population profile- Geographic distribution- Ethics and cultural profile.6) Other Products and services:7) Attitude to brands and shopping:

Establishing A Brand Equity Management

System• Brand Equity Charter:- All internal activities of the

company- A key marketing partners.• Brand Equity Report- Assessment of brand tracking

results on regular basis • Brand Equity Responsibilities.

Designing and Implementing Branding

Strategies.

The Brand Product Matrix

• Brand-Product Relationship (Rows)

- Line and category extension.• Product-Brand Relationship

(Columns)- Brand Portfolio

Managing Brand Portfolio

• Multiple brands are often in the category of market coverage

- Target different market segment• Basic principles: - Maximize coverage - Minimize overlap

Branding stategy• The branding strategy on the basis

of its breath.( Brand product relationship)

• On the basis of its depth (Product brand relationship)

Breath of a branding strategy

• Aggregate Market Factors - Market Size - Market Growth - Growth stage in product life cycle - Seasonality - Profits

Category Factors• Threat of new entrant• Bargaining power of buyers• Bargaining power of supplier• Current category rivalry• Pressures from substitute• Category capacity

Environmental Factors• Technological• Political• Economic• Regulatory• Social

Depth of the Branding Strategy

• To increase shelf presence and retailer dependence

• To attract consumers seeking variety

• To increase internal competition within the firm

• Economies of scale

Brand depth Strategies• Maximize market coverage• Minimize brand overlap• Distinct target market and positioning• Introduce fighter brands (Flankers)• Cash cows (Gillette mach3 & HUL’s Lux)• Low End entry level Or high end

prestige brands ( BMW 3 series cars, Mercedes' A-class)

Brand Hierarchy

Representation • Corporate brand ( General motor)• Family brand (Buick)• Individual Brand (Park Avenue)• Modifier(Designing item) (Refer case from textbook)

Designing A Branding Strategy

• The number of levels of the hierarchy to use in general

• Desired brand awareness and image at each level.

• How brand elements would be combined in each level.

• How any one brand linked to multiple products.

Guidelines For Brand Hierarchy Decision

• Deciding on number of levels (Principle of simplicity)• Decide on level of awareness and type of

associations to be created at each level. (Principle of relevance) - Example: Integration of marketing activities. (Principle of differentiation) - Example: Tropicana pure premium brand

(Several flavours) and Grovestand (The taste of fresh squeezed)

• Decide on how to link brands from different levels of a product.

(Principle of Prominence)• How to link a brand across

Products. (Principle of commonality)

Combining Brand Elements From Different

Levels • Single Entity ( Federal Express, Bluedart)• Brand dominance (Dove, Lux, Marlboro,

Thumpsup)• Equal dominance( Tata nano, Hyundai

i10,i20)• Mixed dominance (Bosch)• Corporate dominance( Xerox)

Linking Brand Elements To Multiple Products

• Vertical aspects of the brand Hierarchy

• Horizontal aspects of the brand Hierarchy

- Example: HP introduced computer printer

with suffix “jet” .1) HP Deskjet, Printjet,Thinkjet and Office jet)

- Sony has given Suffix “MAN” to Walkman personal stereos and Discman portable CD players.

- Mcdonald used prefix “Mc” to introduce number of products.

McAaloo tikki, McPuff, McNuggets etc.

Adjustment To The Marketing Program

• Family Brand strategies (Corporate)• Example: - GE, IBM,HP,Microsoft • Brand awareness of the company• Create favourable attributes• Leverage product specific marketing• Motivate employees and attract

better recruits• Influence public opinion on issues.

• Individual Brand Strategies • Brand line campaign

Managing Brand Over Geographical Boundaries

and Market Segments

Rationale For Going International

• Perception of slow growth and increased competition in domestic market

• Belief in enhanced overseas growth and profit opportunities

• Desire to reduce costs from economies of scale

• Need to diversify risk• Recognition of global mobility of

customers

Advantages of global marketing programs

• Economies of scale in production and distribution

• Lower marketing costs ( Uniformity in packaging, advertising, promotion and other marketing communication)

Example: Exxon Mobil ad campaign( The ad had the same look and feel in more than 100 countries)

• Power and Scope (Customer credibility)

• Consistency in brand image Example: Gillette March3 sells

“function superiority” and “ an appreciation of human character and aspiration” worldwide.

• Ability to leverage good ideas quickly and efficiently

• Uniformity of marketing practices Example: Colgate Total

Disadvantages of global marketing

programs• Difference in consumer needs,

wants and usage patterns for products

Example: The British consumed 8 times more chocolate than the Italians.

Americans drank 11 times more soft drinks than consumer abroad.

• Difference in consumer response to marketing mix elements

Example: Americans, in general, tend to more cynical toward advertising, whereas Japanese view it much more positively.

• Difference in brand and product development and the competitive environment

• Difference in legal environment• Difference in marketing

institutions Example: Retail practices, Media

availability and media costs vary significantly country to country.

• Difference in administrative procedure (Local/country of origin)

Standardisation Versus Customisation

• Example : Coca cola’s new marketing mantra “ Think Local. Act Local”

Old mantra “ Think Global. Act Local”• P&G also does the same practices.• Mcdonald ‘s ( You can have it your way)

Ad campaign. It servers beer in Germany, wine in France and coconut, Mango and tropical mint shakes in Hong Kong.

• Domino’s also provide customized delivery services.

Global Branding Strategies

1) Identify differences in consumer behaviour.

2) Adjust the branding program accordingly.

Global Customer Based Brand Equity

• Establish breath and depth of brand awareness

• Create strong, favourable and unique brand association

• Elicit positive, accessible brand responses

• Forge intense, active brand relationship.

• Steps:• Creating brand Salience• Crafting brand image• Eliciting brand responses• Cultivating resonance

Global Brand Positioning

• How valid is the mental map in the new market? How appropriate is the positioning?

• What changes need to be made?• By what means should be this new

mental map be created?

Building Global Customer Based Equity• Understanding similarities and differences

in the global branding landscape.• Don’t take shortcuts in brand building Example: Kellogg corn flakes in Brazilian

market• Establishing marketing infrastructure• Embrace integrated marketing

communication

• Cultivate Brand Partnership• Balance standardization and

customization• Balance global and local control• Establish operable guidelines• Implement a global brand equity

measurement system• Leverage brand elements