CHAPTER SEVENTEEN

Strategic Launch Planning 1

BrandingMarch 13, 2007

The Value of a Strong Brand

“Brand equity has just as much effect

on stock price as do earnings.”

—David AakerProfessor of Marketing, EmeritusUniversity of California, Berkeley

What is a Brand?

A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly outdated; a successful brand is timeless.Source: Stephen King, WPP Group, London

A brand is something that resides in the minds of consumer.

A brand is a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” Source: American Marketing Association

What is a Brand?

Name

Term

Sign

Symbo

l

Design

Combination

Identifies product/service

of seller anddifferentiates from

competitors

Keller, Kevin Lane. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. 1998.

Benefits of Brands Consumers

Identification of the source of product Assignment of responsibility to product maker Risk reducer Search cost reducer Promise, bond, or pact with maker of product Symbolic device Signal of quality

Benefits of Brands (cont.) Manufacturers

Means of identification to simplify handling or tracing

Means of legally protecting unique features Signal of quality level to satisfied

customers Means of endowing products with unique

associations Source of competitive advantage Source of financial returns

A Brand is More Than a Product

Product

Scope

Attributes

Uses

Quality/value

Functional benefits

Organizational associations

Brand

Personality

Symbols

Self-expressive

benefitsEmotional benefits

User Imagery

Country of origin

Brand

Brand/customer relationships

What is Brand Equity?

What distinguishes a brand from its unbranded commodity counterpart and gives it equity is the sum total of consumers’ perceptions and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, and about the company associated with the brand.

Source: Alvin A. Achenbaum, “The Mismanagement of Brand Equity, 1993

Brand Equity as a Percent of Firm Tangible Assets

Industry Brand Equity

Apparel 61Tobacco 46Food Products 37

Chemicals 34Electric machinery 22

Transportation 20Primary metals 01

Picking Stocks

Suppose that you will be given 0.1 percent of the stock on one of the following companies. Which firm’s stock would you prefer, given the following information?

General Motors $166B $229B $7B

Coca-Cola $19B $17B $4B

Sales Assets Profits

Brand EquityBrand Equity

Perceived Brand Quality

BrandAwareness• Brand Name• Symbols

BrandLoyalty

OtherProprietaryBrand Assets•Patents•Trademarks•Channel relationships

Brand Associations• Personality• Benefits• Attitudes

Provides Value to Customerby Enhancing:• Interpretation/processing of information• Confidence in the Purchase Decision• Use Satisfaction

Provides Value to Firm by Enhancing:• Efficiency and Effectiveness of Marketing Programs• Brand Loyalty• Prices/margins• Brand extensions • Trade Leverage• Competitive Advantage

What is Brand Equity?

Source: Aaker (1991) “Managing Brand Equity”Source: Aaker (1991) “Managing Brand Equity”

Dimensions of Brand Personality

Brand personality

Describe the personality of the following: Arizona Iced Tea Intel Blockbuster Video Wal-Mart Toyota Dr. Pepper Aquafina Seiko Texas Instruments Nordstroms

Brand personalityWhat personality characteristics come to mind for the

following: Brand is repositioned several times or changes its

slogan repeatedly Brand uses continuing character in its advertising Brand charges a high price and uses exclusive

distribution Brand frequently available on deal Brand offers many line extensions Brand sponsors show on PBS or uses recycled

materials Brand features easy-to-use packaging or speaks at

consumer’s level in advertising Brand offers seasonal clearance sale Brand offers five-year warranty or free customer hot

line

Brand Equity

Sources of Brand Knowledge Brand Awareness Brand Image

Strength of Brand Associations Favorability of Brand Associations Uniqueness of Brand Associations

Why Extend a Brand?

Immediate brand awareness Transfer existing associations Faster trial Reinforce core brand

Why Not Extend a Brand?

“Boomerang” potential Dilution Bad “fit”

Questions and Guidelines in Brand Name Selection

Question GuidelineWhat is the brand's role or purpose? If the brand is to aid in positioning, choose a brand

name with meaning (DieHard, Holiday Inn). Ifpurely for identification, a neologism (made-upword) such as Kodak or Exxon will work.

Will this product be a bridgehead to a line ofproducts?

If so, choose carefully so as not to be a limitation inthe future (Western Hotels changed name toWestern International, then finally to Westin.)

Do you expect a long-term position in the market? If not, a dramatic, novelty name might be useful(such as Screaming Yellow Zonkers).

Is the name irritating or insulting to any marketsegment?

Women found Bic's Fannyhose to be objectionable.

Figure 17.8

Crapsy Fruit French cereal Fduhy Sesane China Airlines snack foodMukk Italian yogurtPschitt French lemonadeAtum Bom Portuguese tunaHappy End German toilet paperPocari Sweat Japanese sport drinkZit German lemonadeCreap Japanese coffee creamerI'm Dripper Japanese instant coffeePolio Czech laundry detergentSit & Smile Thai toilet paperBarf Iranian laundry detergent

Some Brand Names That Didn’t WorkFigure 17-9

How Brand Equity Provides Value

HighBrand

Loyalty

Other BrandAssets

More/BetterBrand

Associations

HighPerceived

Quality

HighBrand

Awareness

Reduced marketing costs

Increased trade leverage

Patents or trademarks

Strong channel relationships

Creates positive image

Helps customer process information

Supports quality positioning

Supports higher-price strategy

Easier to make brand associations

Increased liking and familiarity

Provides value to customer:Assists in customer information processingIncreases confidence in purchaseIncreases satisfaction in product use

Provides value to firm:Increases effectiveness of marketing programsIncreases customer loyalty and trade leverageFacilitates brand extensionsIs a source of competitive advantage

Building Brand Equity

Getting awareness of the brand and the meaning.

Making brand associations -- even the factory location in Saturn’s case.

Building perceived quality Loyalty in repurchase -- locking them

in Getting reseller support