Brand

A Brand is: name, term, sign, symbol, design, or combination of these.Brand: derived from the old Norse word

“brandr” which means “to burn.”

Brand Name Brand mark Trademark Copyright

Vocalized part of

the brand...

Tide, Avon, Chevrolet,

Disneyland,

AMEX

Symbol, design,

color, letters

Pillsbury doughboy,

MGM Lion,

K on Kodak box

Part of the brand

given legal

protection to

brand name

or brand mark

Legal right to

reproduce,

publish and sell the

matter and form of a

literary musical or

artistic work

The process of branding encompasses all elements of the brand...

Brand Introductions and Growth

The level of marketing effort supporting brand introduction depends on ...

Product quality

Growth rate of the

market

Size of the market

Low marketconcentration

Firm familiarity

with the market

Firm’s resources

Findings on Brand introductions

Managers should expect better results in terms of market share in markets where a

limited number of brands hold a large share which renders such market more

attractive to new brands

A new brand should be supported with a larger effort when introduce into a fast

growing market than when the market is mature

The amount of communication effort used to introduce a brand depends

on only one manufacturer characteristic--the availability of resources

1

2

3

Why does branding become critical ?

Complex buying behaviour

Variety seeking buying

behaviour

Dissonance reducing buying

behaviour

Habitual buying behaviour

High

Involvement inpurchase Low

Consumer seesdifferences in

brands

Consumer does notsee differences in

brands

In which of these quadrants is branding most critical? And why?

Branding and its economic sense

‘‘brands are created because buyers crave information. They see a huge range of products that look the same and seem to perform similar . . .

. . . brands offer a route through the confusion.’’ Economist,1994

Branding is manufacturer “signaling” which can create a “separating”equilibrium

Making marketing sense out of branding

Help Process / Retrieve Information

Differentiate

Reason to buy

Basis for brand extensions

Summarize a set of facts/specifications that are difficult for the

customer to process/access, and expensive to communicate

Image differentiation

Generates confidence in the product attributes, customer benefits,

increases credibility & confidence

Generates more opportunities in other product categories through

brand extensions

Strategic question in branding...

What does the consumer see as

the significance of brand?

Who should brand and own the brand?

Salience / strengths of the brand

The reputation of the firm & Buyer image

The risk could be high price , product failure, lack of after sales etc. What risks does the consumer see?

What information does the consumer

needs?

Reputation , past sales, comparative brand price

and service etc

Weber’s law effect on brand awareness and effect of sound brands

JND for brand launch and building consumer acceptance

Weber's Law states that the stimulus change needed to reach the differential threshold(produce a “just noticeable difference”) is a constant proportion of the starting stimulusvalue for any brand to “get noticed”

Assume that through testing we found that; 1 ounce (ABSOLUTE STIMULUS = 1) had to be addedto a 10-ounce container of liquid soap (STARTINGvalue ~ 10)before consumers detected a change in its weight.This would yield a constant of proportionality of

K = 1/10 = 0.1, allowing us to predict that:

(1) consumers will not detect a change in the weightof the larger 50-ounce economy bottle of the soapunless at least 5 ounces are added to or removed fromit or

(2) consumers will be able to detect a 3-poundaddition to a 20-pound portable television

Awarenesslevel

Stimulus weight

1 ounce.5 ounce

Stimulus gets noticed beyond 10%weight of starting value

Sub-optimalstimulus

generation

How does the mechanics of branding work?

Involvementin the

decision

High

Low

Transactionalcompleteness

HighLow

Awareness

Interest

Desire

Action

A typical communication build up

Awareness is an Advertising basedactivity ...

however, branding focuses onbuilding Interest and Desire to try theproduct

Strong brands v/s Weak brands

The level of memory recall

Memory

Top of the

mind

Aided recall for the brand

Unaided recall for thebrand

Memory of the brand drives purchase

How culture values influence purchase decisions

Terminal values

Instrumentalvalues

Productclass choice

criteria

(criticalproduct

attributes)

Brandchoicecriteria

(criticalbrand

attributes)

Beliefs andattitudes aboutproduct class

Beliefs andattitudes aboutbrand class

Product classselection

Brand classselection

Levels of brand exposure

GlobalNationalLocal / Regional

NamesNames

BrandsBrands

Power BrandsPower Brands

Brand power

Sustained effort will create not just names . . . but brands

Market presence

–

–

–

Branding concepts - Identity and Image

- Image is on the receiver’s side.

- The image refers to the manner inwhich the public decodes all thesignals emitted by the brandthrough its products, services andcommunication program

- It is a reception concept.

ImageIdentity

- Identity is on the sender’s side.

- The sender’s duty is to specify themeaning, intention and vocation of thebrand.

- In brand management terms identityprecedes image.

BRANDS - Identity and Image

Brand Identity

Sending

Signals Transmitted

Brand Image

Media Receiving

Competition and

Noise

Brand Types

item characterized by plain label, with no clear differentiation

e.g. Xerox, Bisleri

Genericproduct

brand name owned by a manufacturer or other producer

e.g. Coca Cola

Manufacturers’ brand

brand name placed on products marketed by wholesalers & retailers

e.g. Stop garments from Shoppers Stop

Private brand

brand name that identifies several related products e.g. Kissan Anapurna atta , jams , biscuits etc..

(Food category)

Family brand

unique brand name that identifies a specific offering within a firm’s product line and that is not grouped

under a family brand e.g. Dove soap from HLL

Individual brand

Brand power in degree

Brand recognition stage of brand acceptance at which the consumer knows of a brand but does

not prefer it to competing brands

Brand preference stage of brand acceptance at which the consumer

selects one brand over competing offeringsbased on previous experiences with

that brand

Brand insistence stage of brand where the customer refuses to accept any other brand except

the preferred brand

Target buyers

(Buyers who start preferring

a brand)

Target buyers

(Buyers who start preferring

a brand)Brand

championsBrand

champions

Decreasing size ofthe market

Market universe

(All potential buyers of the product

Brand recognition

Brand preference

Brand insistence

Creating Loyalty for the brand

Fence sitters/ neutrals

Passively loyal

Price switchers

Non-consumers

Committed

Varying degrees of brand loyalty

Frequent-Buyer Programs,

Customer Club, Database

marketing etc

Enhancing Loyalty

The Hierarchy of effects model of advertising

Brand loyalty

Beliefreinforcement

Attitudereinforcement

Unawareness

Awareness

Expectations

Trials

Beliefs Attitudes

Branding realities on loyalty

Managerial Implications Journal of Marketing, Volume 49, Winter 1985

A Brand seeking to improve market position needs to rely heavily on customer retention efforts while increasing share of users.

If only a smaller fraction of customers attracted are retained as loyalcustomers, allocation efforts are likely to be more even between attraction and retention efforts

Branding realities

Managerial Implications

For Brands with smaller user shares the retained fraction of new customers has to be higher, which necessitates more marketing effort in retention

Research show that large market share business have lower advertisingto sales ratio.

It also implies that as number of brands increases, loyalty levels declinesharply at first and then begin to level off

Journal of Marketing, Volume 49, Winter 1985

Brand equity affects buyer behavior

Brand deserter

Brand champion

Non TrierBrand apostle

Targetbuyer

Buys thebrand

Does not buythe brand

Recommends the brand to otherbuyers

YesNo

Strongest branding effects are seen in the “brand apostle” stage

Brand Equity

Brand Equity is a set of assets (& liabilities) linked to the brand name & symbol that adds to

(or subtracts from) the value provided by a product

Brand Equity is a set of assets (& liabilities) linked to the brand name & symbol that adds to

(or subtracts from) the value provided by a product

Brand Equity is a set of assets,

thus management of

brand equity involves investment

to create and enlarge these assets

Brand Equity is a set of assets,

thus management of

brand equity involves investment

to create and enlarge these assets

Brand Equity adds value to the

consumer and the firm

Brand Equity adds value to the

consumer and the firm

Consumer-Based Brand Equity Pyramid

Brand Salience

Consumer-Brand

Resonance

ConsumerJudgement

ConsumerFeelings

BrandPerformance

BrandImagery

4 Intense, Active Loyalty

1 Deep Broad Brand Awareness

2 Points of Difference

3 Positive Accessible Reactions

Co

nsu

mer

Ac c

e pta

nc e

Cyc

le

Consumer-Based Brand Equity Pyramid

Salience

Resonance

Judgement

Feelings

Performance Imagery

LoyaltyAttachmentCommunityEngagement

QualityCredibility

ConsiderationSuperiority

Warmth, FunExcitement,

Security, SocialApproval,

Self-Respect

4 Brand Relationships (WHATAbout You AND ME?)

1 Brand Identity (WHO Are You?)

2 Brand Meaning (WHAT Are You?)

3 Brand Response (WHAT AboutYou?)

User ProfilesPurchase and UsageSituationsPersonality & ValuesHistory, Heritage, &Experiences

Brand Characteristics& Secondary FeaturesProduct Reliability,Durability & ServiceabilityService Effectiveness,Efficiency & EmpathyStyle and Design; Price

Category IdentificationNeeds Satisfied

How does the brand relate to the customer?

Differentiation

Relevance

Esteem

Knowledge

How distinctive is the brand is in the market place?

Is it meaningful to him or her ? Is it personally appropriate ?

Is the brand held in high regard and considered the best inits class?

Does the customer understand as to what a brand stands for?

Brand Power = Differentiation x Relevance X Esteem X Knowledge

Brand Equity elements : Luxury car - McKinsey & Co.

Internal“makes me feel pampered”

External“tells others that I am

successful”

Perceived value ”very expensive, but worth it”

What thebrand offers

Who thebrand is

Origin“European / Japanese”

Evolution“Will become the leader in high-

performance machines””

Reputation“Design and performance”

Emotio

nal B

enef

its

Prese

nce

Activities“Sponsors premier racing

events”

Presentation

“has distinct logo incorporated intoselect design elements

(e.g.Wheels of the car)

Intangible Associations

Rational benefits

Functional “easy in driving”

Process“Dealer network that knows myprofile wherever I go”(Toyota)

Relationship“Has related affinity

programs I like” (MercedesClubs)

Brand

benefits

Brand

identity

The three variables in the brand anatomy (Young and Rubicam model)

Differentiation X Relevance

= Brand Strength.

>> If there is no point of

difference, a brand’s value will

be low.

>> Relevance comes next.

Unless a brand is relevant to a

significant segment, it will not

attract a large customer base.

Esteem X Knowledge

= Brand Stature.

>> Esteem combines perceived

quality with perceptions of a

growth or decline in popularity.

>> Knowledge indicates that

the customer not only is aware

of the brand but also

understands what the brand

stands for.

Comparing Esteem & Knowledge:

>> Some brands rank higher in

esteem than in knowledge. This

means relatively few people

understand what the brand stands for,

but those who do hold it in

high regard.

>> Conversely a brand may have high

knowledge but low esteem.This means

that more people know what the brand

stands for, but relatively few hold it in

high regard.

The Y&R grid

Swatch watchesDisneySony

Starbucks coffeeBayer

Oldsmobile

BrandDifferentiationand relevance

High

Low

Brand Stature (Knowledge andEsteem)

HighLow

Inter brand (UK) valuation of brands

Leadership: A brand that leads its market sector is more stable and powerful than the second, third, & the fourth place brands

Stability: Long lived brands with identities that have become part of fabric of the market and even the culture are particularly powerful and valuable

Market : Brands are more valuable when they are in markets with growing or stable sales levels and a price structure in which successful firms can be profitable

International : Brands that are international are more valuable than national or regional brands, in part because of economies of scale

500 brands were evaluated under these criteria and rated for maximum value underthese criteria . . .

Inter brand (UK) valuation of brands

Trend : The overall long-term trend of the brand in terms of sales can be expected to reflect future prospects

Support : Brands that have received consistent investment and focused support are regarded as stronger than those who have not

Protection : The strength and breadth of a brands legal trademark protection is critical to the brand’s strength.

Aaker’s Brand equity is based on understanding of the following critical areas ...

The amount a customer will

pay for the brand in

comparison with another

brand offering similar

or fewer benefits.

>> The price premium can

be determined by simply

asking customers how

much more they would

be willing to pay for the

brand

(This is called Dollar Metric)

Satisfaction (or liking)

is a direct measure

of how willing

customers are to

stick to a brand.

Price PremiumCustomer Satisfaction

/ Loyalty

Perceived Quality

directly affects both

ROI and Stock Return.

>> Perceived Quality

can be measured with

scales such as

following.a ) High quality v/s Shoddy quality.

b ) Best in category v/s Worst in category.

c ) Consistent quality v/s Inconsistent Quality

Perceived Quality

Aaker’s Brand equity is based on understanding of the following critical areas ...

Leadership / Popularity

People want to be apart of the

bandwagon and are uneasy

against the flow

It reflects in part the

“number one syndrome”.

A brand can move head

technologically

LG leader in Plasma TV

Brand Leadership has three key dimensions ...

Aaker’s Brand equity is based on understanding of the following critical areas ...

Perceived valuePerceived value is mentioned along the following

dimensions ...

Whether the brand proves good value for the money

Whether there is areason to buy thisbrand over others

Comparatively superior brands

Winner brands

Loser brandsNon differentiated

brands

Yes

No

YesNo

Aaker’s Brand equity is based on understanding of the following critical areas ...

Brand Personality provides

links to the brand’s emotional

and self expressive benefits

as well as a basis for

brand-customer relationship

and differentiation

Brand Personality Organizational Associations

This brand is made by an organization I would trust

I admire the brand “X” organization

I would be proud (or pleased) to do business with the brand TATA’s as an organization

Aaker’s Brand equity is based on understanding of the following critical areas ...

Brand Awareness

Awareness reflects the presence of the brand in the mind of Customers

• Recognition: “Have you heard of the Buick Roadmaster”.

• Recall: “ What brands of car can you recall ? ”

• Graveyard statistics: “recall level of those who recognize the brand”.

“How much do you recall?” Fully or Partially.

• Top-of-Mind : “the first named brand in a recall task”.

• Brand dominance : “ the only brand recalled ”.

• Brand Familiarity : “ the brand is familiar ”.

• Brand knowledge or salience: “ you have an opinion about the brand ”.

Aaker’s Brand equity is based on understanding of the following critical areas ...

Major brands in the category

who have large equities

usually tend to have large

market shares

Market Share

Marketshare

Brand Equity

Market share = ƒ (Brand equity)

Market Price And Distribution Coverage:

• Market share can be a particularly deceptive brand equity measure when it increases as a

result of reduced prices or price promotions.

• Thus it is important to measure the relative market price at which the brand is being sold.

Brand Extensions and growth of the portfolio

Brand Extensions

Products

Brands

Product Line extensions

Brand Extensions

Multi brands Single brands

Existing New

Existing

New

The portfolio can leverage itself if it can extend the brand to other categories

Brand extensions are in the following categories...

Brand Extensions

Related category(Brand line extensions)

Pure Brand Extensions

Knorr is staple product from HLL

It is a mother brand in the category that covers

Atta, Soup etc..

Tata’s leveraging their corporate brand equity in Chemicals, Salt, Cars

etc..

Brand extensions represent an opportunity for firms to use the equity built up in thenames of existing brands in order to enhance marketing productivity

Impact of extensions on equity?

Brand extensions can affect the brand and its equity in one of the three different ways:

• Certain brands exploit the brand capital. The product sells thanks to the brand’scontribution. This is the case when the concerned product scarcely differs fromexisting market competition.

• Certain extensions destroy the brand’s equity. If the new product introduced underan existing brand has no relationship with the core values of parent brand then thebrand equity can get eroded.

• Certain extensions have a neutral effect. Here the brand simply falls in line withwhat is expected of the brand.

How does the brand extension logic work ?

Category Based Affect Transfer

• The affect associated with the parent brand is transferred to the brand extension only when

there is a fit between the parent and the extension categories.

• Fit serves as a signal or cue that the consumers use to make inferences about a new product.

• Attitude (Consumer opinion)towards the extension was higher when there was a fit between the

extension and the parent product classes along one of the dimensions

• Transfer / Complementary products.

Category Based Affect Transfer

• The affect associated with the parent brand is transferred to the brand extension only when

there is a fit between the parent and the extension categories.

• Fit serves as a signal or cue that the consumers use to make inferences about a new product.

• Attitude (Consumer opinion)towards the extension was higher when there was a fit between the

extension and the parent product classes along one of the dimensions

• Transfer / Complementary products.

How does the brand extension logic work . . .

Extension evaluation was enhanced only when there was brand

concept consistency and product feature similarity between extension

and parent categories.

The prestige brand concept also seemed to have greater extendibility

to dissimilar product classes than functional brand concepts, when it

offered extensions consistent with its brand concept.

Brand has a positive impact on the success of an extension if the extension is in a similarproduct category.

Brand has a positive impact on the success of an extension if the extension is in a similarproduct category.

Effectivebrand

extensions

There are several factors that can affect the brand extension’s timing of entry decision.

Two reasons for brand extensions to enter late are

4the high-product failure rates in young markets will subject an extension’s parentbrand to risk, and4extensions may have positioning difficulties in young markets.

Two reasons for brand extensions to extend early are

4the possibility of gaining early mover advantages, and4the extension’s known brand name may reduce the new product’s chance of failing.

The results indicate that early-entering brand extensions do not perform as well on average aseither early-entering new-name products or late-entering brand extensions.

Good to be early or better to be late ?

This conclusion is based on four findings.

1) the brand extensions were introduced later on average than the new-name products.

2) the early brand extensions had a lower probability of surviving than either the early-entering

new-name products or late-entering brand extensions.

3) the brand extensions earned higher market shares on average than the new-name products,

4) the extensions obtained smaller market share from entering early than did new-name

products.

Good to be early or better to be late ?

The extensions of brandsMarket based possibilities

Brand

extensions

Related(High Fit)

Unrelated(Low Fit)

Esteem brand

Average brand

Esteem brand

Average brand

Upwardextension

Downwardextension

Upwardextension

Downwardextension

Upwardextension

Downwardextension

Upwardextension

Downwardextension

Extensions are successful

and unsuccessful inall categories

The Effects of Sequential Introduction of Brand Extensions

The use of established brand names to enter new product categories or classes can substantially reduceintroductory marketing expenses and enhance the prospects of success by helping gain retailer andcustomer acceptance.

Dr Aaker & Dr. Keller on sequential entry

Study aimed at finding out : how is the knowledge about the core brand, and any previous extensions and the perceptionsabout the fit between those products and the proposed extensions affect the evaluation of the extensions

Findings:

• High quality brands stretch farther than average quality brands.

• Successful intervening extensions improved evaluations of a proposed extension for an average quality

core brand:

• Unsuccessful intervening extensions decreased evaluations of a proposed extension for a high quality

core brand.

• A successful intervening extension increased evaluations of an average quality core brand, but an

unsuccessful intervening extension did not affect evaluation of the core brand.

Findings:

• High quality brands stretch farther than average quality brands.

• Successful intervening extensions improved evaluations of a proposed extension for an average quality

core brand:

• Unsuccessful intervening extensions decreased evaluations of a proposed extension for a high quality

core brand.

• A successful intervening extension increased evaluations of an average quality core brand, but an

unsuccessful intervening extension did not affect evaluation of the core brand.

The Effects of Sequential Introduction of Brand Extensions

Dr Aaker & Dr. Keller on sequential entry . ..

Findings

• Perceived company credibility and fit appear to mediate the effects of intervening extensions on

evaluations of a proposed extension.

• The relative similarity of intervening extensions had little differential impact on evaluations of a

proposed extension.

• Multiple intervening extensions can have different effects than a single intervening extension.

• Intervening extensions of mixed success have effects more like those of a single failed intervening

extension than those of a single successful intervening extension.

• An unsuccessful extension does not prevent the firm from backtracking.

Findings

• Perceived company credibility and fit appear to mediate the effects of intervening extensions on

evaluations of a proposed extension.

• The relative similarity of intervening extensions had little differential impact on evaluations of a

proposed extension.

• Multiple intervening extensions can have different effects than a single intervening extension.

• Intervening extensions of mixed success have effects more like those of a single failed intervening

extension than those of a single successful intervening extension.

• An unsuccessful extension does not prevent the firm from backtracking.

Brand positioning and advertising thrust for share maintenance

BRANDS - Brand Positioning

Brand Positioning applies to a process of emphasizing the brands distinctiveand motivating attributes in the light of competition.

It refers to what product segment does the brand belong and what is its specificdifference.

It is based on an analysis of response to the following 4 questions

Why?

When? Against Whom?

For Whom?

BRANDS - Brand Positioning

1) Why or for what? What is the specific consumer benefit or exclusive

motivating attribute justifying the brand. e.g. Sony - Innovation

2) For Whom? This indicates a target. e.g.- 7 Up- Teenagers, Canada Dry-

Adults

3)When? Indicates the occasion on which to use the product. e.g. Titan as

gift.

4) Opposed to Whom? Points to the main competition, those brands from

one whom the one aspires to capture the clientele.

e.g.- Pepsi Challenge and the Uncola campaign- 7Up

SOV / SOM effect on branding strategy

Competitors shareof Voice

Your share ofmarket

High

High

Low

Low

Find a defensible nicheand decrease

advertising for the brand

Increase advertising anddefend position for brand

Maintain modestadvertising premium tomaintain brand salience

Attack with large SOVpremium to generate

brand effects

End of Current Deck