Macdonalds Brand Equity

8/10/2019 Macdonalds Brand Equity

1/57

Student ID: 282826 Supervisor: Jan Friis

Bachelor Thesis

Effective Brand Building

A Case Study of McDonalds Corporation

Jaroslaw Sliwka

Aarhus School of BusinessAarhus niversit!

2"#"

"


2/57

Abstract

The chan$in$ world has encoura$ed %i$ co&panies to create &ore personal connection with

custo&ers' In addition( the constant sustainin$ of this relationship is re)uired' The concept

which is used %! the co&panies and prove to %e successful is %rand %uildin$' *ven thou$h

co&panies esta%lish the %rand( not all of the& are usin$ it properl! and &ake a $ood use of it'

+a,i&u& utilit! and usin$ all aspects of the %rand is the ke! to success' In order to do that(

the knowled$e a%out the %rand is necessar!' Thesis will present how to effectivel! %uild

a stron$ %rand %! takin$ theoretical and practical perspective' At the %e$innin$ reader will %e

provided with various concepts in the field of %randin$' After that( the case of +cDonald-s

.orporation will %e studied' Anal!sis of +cDonald-s %rand %uildin$ process will help

in understandin$ how this e,traordinar! %rand was created'

In the theoretical part there will %e five &ain issues %rou$ht up' First various concepts of what

a %rand is and what are the function of the %rand will %e descri%ed ' After $ainin$ knowled$e

what a %rand is( different approaches how to %uild a %rand are presented' After that the idea

of %rand e)uit! and valua%le functions it perfor& of the %rand is e,plained' The process

of creation of %rand e)uit! is possi%le thanks to %rand e)uit! drivers' Different kind of drivers

and function the! carr! out for %rand e)uit! are descri%ed' At the end of this chapter( afterknowin$ the %asic ele&ent of the %rand( all is su&&ari/ed %! showin$ various &odels useful

in assessin$ %rand and its e)uit!' All theories are useful in assessin$ and descri%in$ effective

%rand %uildin$ process'

The second part of the thesis focuses on +cDonald-s' Anal!sis starts with %rief presentation

of so&e essential to the case facts' After that %rand e)uit! drivers of +cDonald-s

are descri%ed one %! one( to$ether with the function the! perfor& for %rand e)uit!' Then the

overview of +cDonald-s stru$$le with the %rand is presented in chronolo$ical order' Both

of this sections show( that +cDonald-s is a successful co&pan! thanks to proper %rand

&ana$e&ent and constant control over its i&a$e' B! i&ple&entin$ various ele&ents

co&pan! can %e safe that even if one of the& fail( there are others to co&pensate for it'

0ast section of practical use of %randin$ knowled$e present +cDonald-s on Brand

Asset 1aluator +odel and the financial value of the %rand' *ven thou$h +cDonald-s has

a &inor loss of %rand e)uit! values it stand for towards co&petition( the financial result are

&an! ti&es %etter then the ones of co&petitors' After this su&&ar! the future of +cDonald-s

is speculated'

#


3/57

Thesis shows it is i&portant for co&panies to have a well thou$ht our %randin$ strate$!

and knowled$e of %rand %uildin$ processes' nowin$ role the %rand perfor&s and the process

of %rand %uildin$ allow the co&pan! to control how it is assessed in consu&ers- &inds'

.areful stud!in$ +cDonald-s %rand %uildin$ process shows that the co&pan! knows how

to deal with its %rand and proper %rand &ana$e&ent is their co&petitive advanta$e'

2


4/57

Table of Contents

#' Introduction'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''3

2' Theoretical %ack$round of %rand %uildin$''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''4

2'#' The Brand''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''42'#'#' 5hat is the %rand''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''8

2'#'2' ole of the %rand'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''8

2'#'7' *,tend of %randin$''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''#"

2'2' Brand %uildin$'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''##

2'2'#' Brand Buildin$ Theories'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''##

2'2'2' 5hat is %rand %uildin$ for''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''#6

2'7' Brand *)uit!'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''#6

2'7'#' 5hat is %rand e)uit!'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''#4

2'7'2' Brand e)uit! theor! 9ele&ents of %rand e)uit! and their function''''''''''''''''''''''''''#8

2'7'7' Brand e)uit! drivers 9%uildin$ %rand e)uit!''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''2"

2'3' Brand life c!cle( e,pansion and position on the &arket'''''''''''''''''''''''''''''''''''''''''''''''24

2'3'#' ;roduct

2'3'7' Brand Asset 1aluator'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''7#

7' +cDonald-s strate$! for %uildin$ a successful %rand'''''''''''''''''''''''''''''''''''''''''''''''''''''''73

7'#' ?istorical %ack$round of +cDonald-s .orporation'''''''''''''''''''''''''''''''''''''''''''''''''''''7@

7'2' +cDonald-s Brand *)uit! drivers''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''76

7'2'#' +cDonald-s Brand *le&ents''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''74

7'2'2' +cDonald-s &arketin$ activities related to %rand %uildin$''''''''''''''''''''''''''''''''''''''7>

7'7' ?istorical develop&ents in +cDonald-s %rand %uildin$''''''''''''''''''''''''''''''''''''''''''''''33

7'3' ;erspectives for +cDonald-s''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''34

3' .onclusion''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''@2

Bi%lio$raph!'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''@3

7


5/57

1. Introduction.

The world has chan$ed thorou$hl! in last few decades( especiall! %ecause of the

i&pact of $lo%ali/ation' Fre)uent &i$ration of individuals( the tre&endous acceleration

of infor&ation e,chan$es as well as the enhanced $eo$raphical e,pansion and trade of $oods

and services( have transfor&ed the econo&ic and social environ&ent in &an! wa!s' Doin$

%usiness is not the sa&e as fort!( fift! !ears a$o' .o&panies have to adapt to the chan$in$

world in order to survive or keep the position on the &arket' These chan$es are especiall!

profound for fastfood sector' 0ookin$ at the &arket leader provides $ood understandin$ of

this process' And where should we look for this leader if not in the nited States( the &arket

where fastfood %eco&e part of national culture' There are &an! outstandin$ fastfood

providers in the SA( %ut one of the& is %e!ond the co&petition( +cDonald-s .orporation

9+cDonald-s' It is difficult to find a person who will not know %asic infor&ation a%out the

=olden Arches' But how it is possi%le 5hat happened( that children when hear this &a$ic

word( instantl! know what stands %ehind it The interestin$ pro%le& of +cDonald-s %rand

will %e researched at in this thesis'

roble! State!ent

The &ain $oals of the thesis are to e,plain what is a %rand( and %! appl!in$ this

knowled$e to +cDonald-s .orporation( the answer to the )uestion wh! has +cDonald-s %een

a successful %rand( will ne $iven' The $oal is also to descri%e %rand %uildin$ strate$! in order

to $et understandin$ wh! havin$ a stron$ %rand is i&portant for the co&pan!' The paper is

written fro& &arketin$ perspective' +arket of fastfood is chan$in$ to$ether with the world(

and despite &an! attacks +cDonald-s was a%le to co&e out of the various situations

unhar&ed' This was possi%le %ecause of the stron$ %rand it has' sin$ the case of

+cDonald-s the thesis descri%es what a stron$ %rand is' 5hat is the role of the %rand ?ow

does the process of %rand %uildin$ looks like 5hat is %rand e)uit! and what are %rand e)uit!

ele&ents The thesis focuses on $ettin$ fair view of how to %uild and keep the stron$ %rand

alive( and how to create( &aintain and defend its position in consu&er &inds'

3


6/57

Content

The thesis is divided into two chapters' The first one contains the theoretical

%ack$round a%out %rand %uildin$' At the %e$innin$ the $eneral idea is presented( and as te,t

proceeds( &ore details a%out %rand %uildin$ are introduced' The first chapter starts %!

e,plainin$ the idea of the %rand and its role' e,t part in a%out the process of %uildin$ the

%rand' Different theories are presented in order to show there are &an! wa!s of descri%in$

%rand %uildin$ process' After that so&e theories a%out %rand e)uit!( which differ in cate$ories

are descri%ed' Brand e)uit! drivers to$ether with their role and how to &ana$e the& properl!

is the the&e of another su%section' The last part of the chapter shows different &odels which

are helpful in assessin$ sta$e the %rand is currentl! in( and position it occupies in consu&er

&inds' Second chapter is a%out %rand %uildin$ done %! +cDonald-s' First su%section is a %rief

histor! and essential fact which help is further anal!sis of the %rand' Anal!sis of the %rand

starts with description of +cDonald-s %rand e)uit! drivers and functions the! perfor&' After

that the process of %uildin$ +cDonald-s %rand is e,plained %! focusin$ on pro%le&s the

=olden Arches faced throu$hout the !ears of e,istence' Appl!in$ knowled$e $ained in

previous sections and co&parin$ it with the &odels used in descri%in$ the %rand is the the&e

of ne,t part' .urrent position of +cDonald-s %rand and it-s perfor&ance is esti&ated' At the

end of the practical part of the thesis future of the %rand( +cDonald-s has %uild throu$hout the

!ears( is %riefl! assessed'

Met"od

0iterature a%out the %rand and process of %uildin$ it is ver! %road' There are &an!

theories in this field' Theories presented in this paper and wa! of doin$ anal!sis are %elieved

to provide a fair view on the process of %uildin$ successful %rand' The thesis does not use

all possi%le theories( that is wh! conclusion &a! %e concentrated onl! around approaches

presented' ?owever the ai& of the thesis was to provide theoretical %ack$round for further

studies( which will collectivel! supple&ent each other and &ake up whole entit!' Althou$h

there are nu&erous sources on %rand %uildin$ theor!( the case studies for specific co&panies

are rather rare' There are not &an! articles discussin$ +cDonald-s as a %rand' *ven those

articles focus &ainl! on financial aspect of the %rand' This situation encoura$ed &ore detailed

research related to %rand %uildin$ theor! and its application to +cDonald-s .orporation'

@


7/57

Deli!itations and Assu!ptions

Theories that are used for the discussion of +cDonald-s case are co&&onl! used and

&entioned in literature when the concept of the %rand is %rou$ht up' *ven thou$h the! have

so&e flaws and the! so&eti&es are critici/ed( the! provide a $ood understandin$ of how to

%uild a successful %rand' The thesis will not focus on critici/in$ individual theories( %ut on

co&%inin$ the& in one entit! in order to o%tain a fair &ethod for description and anal!sis of

the chosen %rand( which in case of this paper is +cDonald-s' Throu$hout the thesis so&e

theories are li&ited %! focusin$ on case relevant approach' Since the &arketer approach was

chosen in writin$ the thesis( the financial aspect of the %rand is li&ited to the &ini&u&' The

practical part( which is appl!in$ the theor! to the case( is li&ited onl! to the +cDonald-s in

the nited States' If +cDonald-s international activities were taken into consideration the

conclusion &i$ht %e sli$htl! different( however since this su%Cect is too %road( it is li&ited to

the national &arket of the co&pan!' *ven thou$h the $eneral idea of +cDonald-s %rand is the

sa&e throu$hout the world( %rand operations in specific countries differ accordin$ to the

consu&ers' That is wh!( in order to provide a fair understandin$ of %uildin$ a %rand( the deep

anal!sis of national &arket is done' 5hat is &ore( since %uildin$ a successful %rand is &ore

a%out developin$ relationship with custo&ers %! usin$ %rand %uildin$ &ethods %! the

co&pan!( the influence of co&petition on this process is o&itted'

6


8/57

#. T"eoretical bac$ground of brand building.

The process of %uildin$ a stron$ %rand and $ainin$ co&petitive advanta$e is not

an invention( that at so&e point of ti&e was &ade' It was the process that throu$hout the !ears

was $rowin$ in i&portance and alon$ with the scope of %randin$' owada!s %rand %uildin$ is

the process that ever! co&pan! has to take into consideration' 5hen lookin$ at &arket

leaders like =oo$le( ike or .oca.ola we notice not onl! the na&e of the co&pan! %ut also

the whole idea %ehind it' This chapter will focus on a %rand as crucial ele&ent of connectin$ a

co&pan! with its custo&ers' At the %e$innin$ the concept of the %rand will %e e,plained(

to$ether with its role and i&plications' Then the idea of %rand %uildin$ and functions it

perfor&s will %e e,plained to$ether with steps vital to the creation of si$nificant %rand e)uit!'

After that the $reat focus will %e placed on %rand e)uit!' First different theories will %epresented( secondl! three &ain sets of drivers that help in creatin$ %rand e)uit! will %e

descri%ed and at the end factors that influence those drivers' The ne,t thin$ that chapter will

focus on is the life c!cle of the %rand'

#.1.T"e Brand.

There are &an! definitions of what a %rand is' There are as well &an! ori$ins of the

word %rand' But when did it $et the &eanin$ it has now ri$inall! %rand was Ea &ark%urned on the hide of an ani&al to identif! its owner( or on the person of a convicted cri&inal

to warn the pu%lic of theirs character9Black 2""7: 78' +ark itson writes that Ethe ori$in of

the ter& %rand co&es fro& brandr( the orse word for fire' It &eans to %urn the &ark of the

producer onto the product that the! &ade' 9itson 2""6: #4 It is not the ti&e to discuss

which &eanin$ was the first and wonder which one is &ore i&portant' The fact is that %oth

interpretations are relevant' *ven these da!s( in the era of $lo%ali/ation( there are different

definitions of a %rand' *ver!thin$ depends on the perspective we are lookin$ fro&' In the past

the owners of ani&als used the word %rand which &eant for the& clai&in$ their propert! and

in case of theft( eas! identification' For producers of tools the sa&e word &eant &arkin$ the

products with lo$o of the producer so if there was a need to co&plain( repair or su$$est

%u!in$ the product to third part! the &anufacturer could %e easil! traced' For the Cudiciar!

%ranch word %rand &eant to &ark a cri&inal and infor& societ! of his past and what

%ehaviour could %e e,pected' There were &an! functions which %rand had in the past( and so

it is nowada!s' The first chapter includes a %rief discussion of %rand %uildin$ theor!' After

e,planation of the idea of the %rand( theories of %rand e)uit! and %rand e)uit! drivers are

4


9/57

introduced' The chapter includes also an assess&ent of the position of the %rand in consu&er

&inds and life c!cle the %rand follows'

#.1.1. %"at is t"e brand

The definition of what a %rand is depends on how deep and fro& what perspective it is

descri%ed' The ,ford Dictionar! of *cono&ics descri%es %rand as Ea na&e used to identif!

the &aker or distri%utor of a $ood' For the econo&ists this si&plified e,planation is enou$h

to understand what a %rand is and it is sufficient for the perspective the! look at a co&pan!'

The A&erican +arketin$ Association defines %rand as Ea na&e( ter&( si$n( s!&%ol( or desi$n(

or a co&%ination of the&( intended to identif! the $oods or services of one seller or $roup of

sellers and to differentiate the& fro& those of co&petitors9otler 2""6: 246' Fro& the

&arketin$ perspective %rand consists of so&e specific ele&ents and carries out so&e function'

Fro& the perspective of the %randin$ consultanc! Inter%rand G %rand is Ea &i,ture of

tan$i%le and intan$i%le attri%utes s!&%olised in a trade&ark( which( if properl! &ana$ed(

creates influence and $enerates value 9Inter%rand 2""4: 3' As it could %e e,pected(

consultanc! fir& is focused &ore on output( when e,plainin$ what a %rand is'

A %rand is thus a di&ension that differentiates products or services fro& products and

services of the co&petition which are desi$ned to satisf! the sa&e needs' This di&ension &a!

contain differences that co&&unicate what %rand represents or &a! %e related to the product

or service perfor&ance' This is the definition that will %e used in the thesis'

#.1.#. &ole of t"e brand

In the past the idea of %randin$ was used &ostl! in ter&s of &arkin$ propert!

or people' The function was to infor& a%out the ownership( assi$n work&anship to the

producer or si$nal the reputation of the individual' In toda!-s world &an! diversified products

or services are %randed' But wh! do co&panies decide to %rand the& Is it %ecause of the

pressure the co&petitors put on %randin$ and %ecause ever!%od! do it 5hat is the reason of

%randin$ and what is the purpose 5e si&pl! &a! sa! %ecause there are valua%le functions

which %rand perfor&s for a co&pan! as well as for custo&ers' This chapter will e,plain &ain

functions of %randin$ %! dividin$ it into two destination $roups' For contractors the three

i&portant roles will %e presented( and after that the i&plications for the consu&ers and

%enefits of %randin$ will %e e,plained'

8


10/57

The %rand pla!s si$nificant role in a perfor&ance of a co&pan!' Fro& the &arketer

perspective the &ain advanta$es of %randin$ are le$al protection( identit! and lo!alt!'

The first role is le$al protection' ?avin$ a %rand helps in protectin$ the uni)ue

features or )ualit! of the product( process or an! other aspect of the co&pan!' otler

and eller e,plain how each t!pe of intellectual propert! ri$hts can %e used( %! distin$uishin$

into parts( Ethe %rand na&e can %e protected throu$h re$istered trade&arksH &anufacturin$

process can %e protected throu$h patentsH and packa$in$ can %e protected throu$h cop!ri$hts

and proprietar! desi$ns9otler 2""6: 244' 0e$al protection has &an! i&plications'

It ensures that no one %eside the co&pan! will have the %enefits and it $uarantees that &one!

can %e safel! invested in %rand %uildin$ process' 0ar$e a&ounts of &one! spend on

advertisin$ ca&pai$ns prove a success onl! if the co&pan! can reap %enefits fro& the&'

Identit! is the second vital role the individual %rand perfor&s for a co&pan!' The i&portant

feature of havin$ a %rand is %ein$ identified %! consu&ers' ?avin$ identit! allows custo&ers

to differentiate the co&pan! fro& the co&petition' It helps the& assi$n past e,periences( like

the conse)uences of usin$ the product( to specific &anufacturer or distri%utor' 5hat is &ore(

%! usin$ %rand %uildin$ the consu&er evaluation process of identical ite&s &a! %e

influenced %! %rand awareness' For a co&pan! havin$ identit! &eans havin$ i&a$e which

can %e &ana$ed' *ven thou$h once it is esta%lished it is difficult to chan$e( it is worth an

effort since consu&ers often perceive i&a$e as representation of )ualit! and perfor&ance'

I&a$e to$ether with reputation are i&portant issue in %rand %uildin$ process'

Another function that %rand perfor&s is lo!alt!' Brands si$nal a certain level of )ualit! so that

satisfied %u!ers can easil! choose the product a$ain'9*rde& #>>8 The certain level

of satisfaction that is si$nalled %! a %rand like )ualit! has &aCor i&pact on lo!alt!' epeata%le

choosin$ of the sa&e product has advanta$es for %oth a seller and a %u!er' Brand lo!alt!

assures also Ethe tendenc! for consu&ers to prefer fa&iliar na&es9Black 2""7: 78' ?avin$

certain nu&%er of custo&ers helps sellers to plan the invest&ent and develop&ent of the

co&pan!' It is a predisposition that ever! &arketer wishes to achieve' In other words havin$

lo!al custo&ers results in %etter earnin$s( which allow to invest &one! in %rand %uildin$ and

in result havin$ a stron$ %rand and %etter product %ehind it'

n the other hand %rand perfor&s valua%le functions also for consu&ers' Accordin$ to

apferer there are ei$ht functions that create value in the e!es of consu&ers' 9Ta%le #

>


11/57

These ei$ht functions could %e divided into three $roups: reco$nition( reduction of the

perceived risk and the pleasure side of the %rand' Identification and practicalit!

are &echanical and concern the essence of the %rand' Accordin$ to apferer their role

is Eto function as a reco$nised s!&%ol in order to facilitate choice and to $ain

value9apferer( #>>4' =uarantee( opti&isation and %ad$e are responsi%le for reducin$

perceived risk' Findin$ the sa&e )ualit! ever! ti&e when &akin$ purchase( %ein$ sure

of %u!in$ the %est product in its cate$or! and knowled$e a%out the i&a$e the product presents

pla! an i&portant role in the decision &akin$ process' .ontinuit!( hedonistic and ethical

functions have Ea &ore pleasura%le side9apferer( #>>4' .ontinuous satisfaction with the

%rand which &a! lead even to enchant&ent is the $oal of ever! &arketer' owada!s &ore and

&ore e&phasis is placed on the ethical function of the %rand since custo&ers feel &ore

connected to the %rand and e,pect responsi%le %ehaviour in e,chan$e of &akin$ the purchase'

?owever( all these functions are not achieved auto&aticall!( and not ever! co&pan! perfor&s

all this functions'

#.1.'. E(tend of branding.

*ver! co&pan! strives to esta%lish a %rand as stron$ as possi%le( since it &akes doin$

%usiness easier and s&oother' For custo&ers %rand offers easiness of product choice' There

is no need to test( challen$e or classif! to a $reat depth %ecause of fa&iliar %rand( whichif properl! &ana$ed( leaves the hints what this %rand stands for and what could %e e,pected

#"


12/57

9eisen%eck( 2""4' The $ood e,a&ple is Apple %rand' It is possi%le due to successful

%randin$ which is Eendowin$ products and services with the power of a %rand 9otler( 2""6:

248' It is the &arketers role to teach consu&ers a%out the product( what it does and wh!

consu&ers should care %! creatin$ E&ental structures that help consu&ers or$ani/e their

knowled$e a%out products and services in a wa! that clarifies their decision &akin$ process

9otler( 2""6: 248' .rucial role of the %rand is to convince custo&ers there are si$nificant

differences a&on$ %rands offerin$ the product' But how to create a %rand that will perfor&

such functions It could %e done throu$h %rand %uildin$'

#.#.Brand building.

In order to %uild a successful %rand a lot of effort has to %e devoted to %rand %uildin$

process' There are &an! &odels and each of the& focuses on different aspects of the %rand'

There will %e presented four different theories' BAD and Brand esonance +odel

consider %rand %uildin$ as a series of steps( whether Brand rientation and Brand 0eadership

are focused on %uildin$ interconnected &odels'

#.#.1. Brand Building T"eories.

+illward Brown( the &arketin$ research consultant( is the one who developed the

&odel of %rand stren$th called BAD' The &ain idea is the BrandD!na&ics p!ra&id

presented in Fi$ure #' which ar$ues that %rand %uildin$ is the process'

##


13/57

As otler captures it E%rand %uildin$ follows a se)uential series of steps( each

contin$ent upon successfull! acco&plishin$ the precedin$ one 9otler 2""6: 287' The &ain

point is the distri%ution of the consu&ers' The &ost consu&ers could %e found on lower levels

and it is the Co% for &arketers to increase the nu&%er of pro$ra&s and activities that will help

consu&ers &ove to hi$her levels'

There is assi$ned en)uir! to each level of the p!ra&id' The weakest relationship and

low share of cate$or! e,penditure is at ;resence level EDo I know a%out it' At elevance

level consu&er is aware of the product and answers )uestion EDoes it offer &e so&ethin$'

The ne,t level is ;erfor&ace( E.an it deliver' After that is the Advanta$e level which

considers reaction to the )uestion EDoes it offer so&ethin$ %etter then others' The last level

at which is the stron$est relationship and the hi$hest share of cate$or! e,penditure is

Bondin$' It is the %est and the &ost awaited level of %ond with the consu&er' The! &ake a

choice to %u! the preferred %rand auto&aticall! without considerin$ products of co&petitors'

Another theor! which ponder the %rand %uildin$ process as a series of steps is Brand

esonance +odel' otler had distin$uished si, E%rand %uildin$ %locks which to$ether for&

a four steps p!ra&id presented in Fi$ure 2' ?e differentiated two sides of the p!ra&id:

rational and e&otional' otler ar$ues that in order to create si$nificant %rand it re)uires

Ereachin$ the top or pinnacle of the %rand p!ra&id( which occurs onl! if the ri$ht %uildin$

%locks are put into place9otler( 2""6: 28@'

#2


14/57

The first step( Brand Salience( considers how often and how easil! do custo&ers think of

the %rand under various situations like purchase or consu&ption' The o%Cective of this step

is to ensure that %rand and its associations are identified in consu&ers- &inds with a specific

product class of custo&er need' The second step consists of two %locks: Brand ;erfor&ance

which considers if the custo&ers- functional needs are &et %! the product or service and

Brand I&a$er! which descri%es the properties( includin$ the wa!s in which custo&ers-

ps!cholo$ical and social needs are atte&pted to &et %! the %rand' The purpose of the second

step is to Eesta%lish the %rand &eanin$ in the &inds of custo&ers %! strate$icall! linkin$

a host of tan$i%le and intan$i%le %rand associations9otler( 2""6' The role of advertisin$

is crucial at this step since it shapes the i&a$e of the %rand' .raftin$ association with the

%rand that are stron$( uni)ue and favoura%le are necessar! to keep %rand co&petitive' For the

third tier of the p!ra&id otler proposes two %locks: Brand Jud$e&ents and Brand Feelin$s'

Jud$e&ents e&er$e fro& ;erfor&ance and I&a$er! associations and are focused on personal

opinions and evaluations like perceived )ualit! of the %rand( credi%ilit!( consideration and

superiorit!' Feelin$s( on the other hand( are the e&otional responses and reactions to the %rand

like social approval( selfrespect( e,cite&ent( fun' It is i&portant to o%tain a proper positive

response in the consu&er &ind in ter&s of Cud$e&ent and feelin$s' The last %lock of the

p!ra&id is Brand esonance which refers to nature of the relationship and ps!cholo$ical %ond

that custo&ers have with the %rand and their level of en$a$e&ent'

The other wa! of %uildin$ a %rand is throu$h %uildin$ an interconnected structure'

Brand %uildin$ &odel presented %! rde is Brand rientation' EBrand rientation is

an approach in which the process of the or$ani/ation revolve around the criterion(

develop&ent and protection of the %rand identit! in an on$oin$ interaction with tar$et

custo&ers with the ai& of achievin$ lastin$ co&petitive advanta$es in the for& of

%rands9rde( #>>>' Basicall! the &odel focuses on the %rand %! considerin$ it as strate$ic

resources' rde ar$ues that when %uildin$ the %rand one should Efirst create a clear

understandin$ of the internal %rand identit!' The %rand %eco&es strate$ic platfor& that

provides the fra&ework for the satisfaction of custo&ers- wants and needs9rde( #>>>'

The develop&ent of the %rand focuses on &ore deli%erate and active &anner( startin$ with the

strate$ic platfor& which core point is %rand identit!' +oreover the response of custo&ers

is what partiall! drives and directs the develop&ent' E5hat is de&anded %! custo&ers at an!

$iven &o&ent is not necessaril! the sa&e as that which will stren$then the %rand as

a strate$ic resource( Ethe wants and needs of custo&ers are not i$nored( %ut the! are not

#7


15/57

allowed unilaterall! steer the develop&ent of the %rand and deter&ine its identit!9rde(

#>>>' Fi$ure 7 presents the theoretical illustration of the &odel'

Fi$ure 7' Brand ?e,a$on' 9Source: rde #>>>

It can %e clearl! seen that inte$ration and interconnection of the factors have i&portant role

in this &odel' The core process of creatin$ %rand &eanin$( which consists of positionin$ the

core values lies at the central point of the &odel' The e&otional functions 9.orporate na&e

and Brand na&e are reflected in the left side of the &odel' The rational view 9;roduct

.ate$or! and ;roduct is presented at the ri$ht side of the &odel' The wa! in which tar$et

consu&ers interpret the %rand 9Tar$et Audience is at the upper side( while intensions of the

%rand 91ision and +ission are situated at the lower part of the &odel'

The last %rand %uildin$ theor! presented is Brand 0eadership &odel' This &odel

differs fro& traditional %randin$ &odels %! e&phasi/in$ not onl! strate$! %ut also tactics'

Aaker and Joachi&sthaler understood that %uildin$ the %rand is one of crucial functionsof doin$ %usiness and ar$ued that %rand &ana$er should E%e hi$her in the or$ani/ation with

a lon$erter& Co% hori/on9Aaker( 2""": 7@"' The! e,pect the %rand &ana$er to %e the top

&arketin$ professional in the or$ani/ation' EThe %rand &ana$er in the %rand leadership

paradi$& is strate$ic and visionar! rather than tactical and reactive' ?e or she takes control of

the %rand strate$icall!( settin$ forth what it should stand for in the e!es of the custo&er and

others relevant parties and co&&unicatin$ that identit! consistentl!( efficientl! and

effectivel!9Aaker( 2""": 7@"' Brand leadership &odel-s &ain concept is that the %rand

strate$! should %e influenced %! the %usiness strate$! and should reflect the sa&e strate$ic

#3


16/57

vision and corporate culture' r$ani/ational challen$e considers the creation of %rand

%uildin$ or$ani/ation' The second challen$e is the develop&ent of %rand architecture that will

%e providin$ co&pan! with strate$ic direction' The third challen$e is the develop&ent

of %rand strate$! that differentiates the %rand includin$ &otivatin$ %rand identit! and

reco$nition a&on$ consu&ers' The last challen$e for co&pan! is refinin$ %rand %uildin$

pro$ra&s to %e efficient and effective so custo&er perceptions( attitudes and lo!alt! could %e

shaped' In order to achieve %rand leadership there are four challen$es presented in Fi$ure 3'

Fi$ure 3' Brand 0eadership Tasks' 9Source: Adapted fro& Aaker 2""": 7@"

The first challen$e co&pan! encounters is the creation of or$ani/ational structure and

processes of co&pan! that will lead to stron$ %rands' Authors clai& that %rands should not %e

Eat the &erc! of ad hoc decisions &ade %! those with no lon$ter& vested interest in the

%rand9Aaaker( 2"""' Additionall!( there should %e a %rand leader for ever! product( &arket

or countr!' There should %e %randnurturin$ structure( tools and culture which will allow the

co&&unication and &ana$e&ent process to share e,perience( infor&ation( insi$hts and

initiatives'

Another challen$e of Brand 0eadership approach concerns %rand architecture' It is a%out

identification of the %rands( su%%rands that will %e supported( their relationships and

respective roles' If &ana$ed properl!( the effect will include clarit! of custo&er offerin$s(

s!ner$ies in co&&unication pro$ra&s and a%ilit! to levera$e %rand assets' Another ke!

function of %rand architecture are decisions a%out e,tendin$ %rands: should co&pan! use su%

%rand( endorse %rand or create a new one' EThe relative role of each %rand in the portfolio

#@


17/57

should %e deter&ined9Aaker 2""" in order to &ake proper decision a%out assi$nin$

ade)uate resources'

ne &ore challen$e( the co&pan! faces( is %rand identit! and position' Brand position helps

in prioriti/in$ and focusin$ the %rand identit! %! settin$ co&&unicatin$ o%Cectives' The %rand

identit! G Ea vision of how that %rand should %e perceived %! its tar$et audience9Aaker(

2""" is the ke! ele&ent in %rand leadership &odel' It $uides and inspires the %rand%uildin$

pro$ra&' ?owever if there is a&%i$uit! and confusion in %rand identit!( the chances of

effective %rand %uildin$ are stron$l! reduced'

The last challen$e co&pan! faces are %rand %uildin$ pro$ra&&es and co&&unication

activities which are necessar! to develop the %rand identit!' The! are useful not onl! in the

i&ple&entation of %rand identit! %ut also in %rand definin$ process' Accessin$ &ultiple &edia

helps %ein$ noticed and re&e&%ered( helps in chan$in$ custo&er perceptions( reinforcin$

attitudes and creatin$ lo!alt!'

#.#.#. %"at is brand building for)

*ven thou$h the four &odels of %rand %uildin$( presented in previous section( differ in

approach( the! all have the sa&e $oal: lead the %rand to a point where o&nipotence andreco$nisa%ilit! allow %eco&in$ the leader of the &arket and reapin$ all possi%le %enefits fro&

it' Buildin$ the %rand is not si&ple and there are &an! different aspects that has to %e taken

into consideration' Buildin$ successful %rand re)uires puttin$ a lot of effort into this process

and constant &onitorin$ of the situation' If the %rand %uildin$ process is without supervision

and left on their own there is little chance it will create desired lo!alt!( associations and

attitudes toward co&pan! and its products' But what e,actl! are those differences created in

consu&ers- &inds that %rand %uildin$ tries to achieve e,t section will focus on findin$ out

what are the differentiators of a %rand in the sa&e product or service cate$or!'

#.'.Brand E*uity

The &ain role of %randin$ is to create differences in &inds of consu&ers' But what

influences the wa! the product or service is perceived 5hat processes can %e influenced and

endowed with the %rand This section will focus on %rand e)uit! theor!' First( definitionof %rand e)uit! and approaches of &easurin$ it will %e presented' After that different theories

#6


18/57

a%out fro& which ele&ents of %rand e)uit! will %e descri%ed' Then the discussion will focus

on co&ponents creatin$ %rand e)uit!( called %rand e)uit! drivers' The final part of the chapter

will focus on choosin$ and desi$nin$ %rand e)uit! drivers'

#.'.1. %"at is brand e*uity)

The concept of %rand e)uit! is widel! accepted' ?owever dependin$ on perspective

there are different definitions of %rand e)uit!' nowles in his article 1ar!in$Perspectives on

Brand Equitydistin$uished three definitions: financial( accountin$ and &arketin$ approach'

In the financial concept the %rand e)uit! &eans Ethe incre&ental cash flow that accrues to the

co&pan! as a result of owin$ a %rand9nowles 2""8: 27' Such a definition resulted fro&

the financial attitude towards e)uit!' There is also accountin$ concept( which as author writes

would use the ter& Etrade&ark and associated $oodwill9nowles 2""8: 27' This definition

results fro& the perspective that accountants perceive assets' The &arketin$ concept( on the

other hand does not descri%e %rand e)uit! in ter&s of &one!' nowles- definition of a %rand

e)uit! fro& &arketin$ perspective is si&ilar to otler-s which descri%es it as Ethe added value

endowed on products and services9otler 2""6: 28"( since that is the Co% of &arketers' But

what are those values and where are the! added 5hat aspect of co&pan! are influenced %!the %rand %uildin$

Stud!in$ and &easurin$ the %rand e)uit! can also %e done %! usin$ three perspectives'

The fir& or &ana$erial level approach assesses the %rand as financial asset' The intan$i%le

value of the %rand is calculated' 5illia& eal and on Strauss92""8 wrote A Framework for

Measuring and ManagingBrandEquity which e,plains the wa! of &easurin$ it' The $oal

of their paper is helpin$ in a %etter fra&ework develop&ent for addressin$ %rand e)uit!'

+easure&ent of %rand e)uit! can also %e conducted on product level' At this level the e)uit!

is calculated %! co&parin$ the price of a $eneric product to the price of the e)uivalent

%randed product' The re&ainder is due to the perception of the %rand in the &arketplace'

The last &easure&ent &ethod is not a%out calculatin$ the financial value of e)uit!' It is a%out

findin$ what are the associations in consu&er &ind connected to the %rand' The &arketin$

definition of the %rand e)uit! and custo&er%ased %rand e)uit! &easure&ent &ethod will

%e used in the thesis'

#4


19/57

#.'.#. Brand e*uity t"eory +ele!ents of brand e*uity and t"eir

function,

This section will use consu&er%ased %rand e)uit! approach( since it will provide the

%est insi$ht into the process of %rand %uildin$' There are &an! researches and &an! &odels(

which conclude that various di&ensions of %rand e)uit! are relia%le' The! will %e %riefl!

e,plained to$ether with included para&eters'

The first and &ost co&&onl! cited author is evin 0ane eller' ?e defines custo&er

%ased %rand as Edifferential effect that %rand knowled$e has on consu&er response to the

&arketin$ of that %rand' A %rand is said to have positive custo&er%ased %rand e)uit! when

consu&ers react &ore favoura%l! to a product and the wa! it is &arketed when the %rand

is identified than when it is not identified9eller 2""3: 6" eller identifies three ke!

in$redients that constitute %rand e)uit!:

%rand knowled$e: consists of all the thou$hts( feelin$s( i&a$es( attri%utes( awareness(

e,periences( %eliefs( attitudes and %enefits that %eco&e associated with the

%rand9eller 2""3: 6"' Brands should create associations with custo&ers which will

%e stron$( favoura%le and uni)ueH

consu&er response to advertisin$: if there is no difference( the %rand na&e product is

a co&&odit! and co&petition will pro%a%l! %e %ased on priceH

differential effect: the perception( preferences and %ehaviour related to all aspects

of the &arketin$ of the %rand'

The second author( David Aaker( initiall! $rouped %rand e)uit! &easures into five

di&ensions' ?is ori$inal idea of %rand e)uit! consisted of four di&ensions which were %ased

on the custo&er perceptions of the %rand' ?e decided to add fifth di&ension which Eincludes

two sets of &arket %ehavior &easures that represent infor&ation o%tained fro& &arket%asedinfor&ation rather than directl! fro& custo&ers' *ach di&ension defined %! Aaker consists

of &easures and there are ten &easures totall! which are $rouped into cate$ories: lo!alt!

&easures( perceived )ualit!( associations( awareness( &arket %ehaviour' The Brand *)uit!

Ten 9Aaker #>>6: #"@ include:

lo!alt! &easures:

price pre&iu& G Ethe a&ount a custo&er will pa! for the %rand in co&parison with

another %rand9Aaker #>>6: #"6( willin$ness to pa! price that is different fro&

co¶%le product (

#8


20/57

satisfaction: ##@ The new di&ension discovered 9trust see&s to suit ver! well

when talkin$ a%out the %rand in the present ti&e( especiall! when ver! little a%out the

perfor&ance of the %rand could %e hidden fro& the &edia'

#>


21/57

;erceived )ualit! ;roduct )ualit! di&ensions 9perfor&ance and features( service )ualit!

di&ensions 9relia%ilit!( responsiveness and tan$i%les

Brand lo!alt! Behavioral lo!alt! 9repeat purchases( how often and how &uch(

attitudinal lo!alt! 9attitude towards the %rand co&pared to other

%rands offerin$ si&ilar %enefits'

Brand associations An!thin$ linked in &e&or! to a %rand9product attri%utes( %rand na&e(

%enefits and attitudes associated with %rand'

Brand trust .onsistenc! and credi%ilit! of the %rand'

Ta%le 2' *le&ents of %rand e)uit! accordin$ to Atil$an &odel'

The authors decided to take this di&ension into consideration since as the! sa!( Ethere are

stron$ references &ade( i&plicitl! and e,plicitl!( to the e,istence and i&portance of trust not

onl! in the %rand e)uit! literature %ut also in $lo%al %randin$ and $lo%al consu&ption

studies9Atil$an( 2"">: #24' The financial crisis forced stron$ %rands or %i$ co&panies

to &ake tou$h decisions considerin$ wa! of doin$ %usiness' It encoura$ed the custo&ers to

start thinkin$ a%out e,pertise and trustworthiness when deliverin$ what has %een pro&ised %!

the co&pan!'

The theories of %rand e)uit! presented in this section differ in para&eter &i, which

the! consist of and $roups the! are assi$ned to' ?owever( there are si&ilarities %etween the&

and issues the! cover overlap in &an! conte,ts'

#.'.'. Brand e*uity drivers +building brand e*uity,.

In order to create %rand e)uit! &arketers have to %uild Ethe ri$ht %rand knowled$e

structures with the ri$ht consu&ers9otler 2""6: 2@8' This process is possi%le onl! if there

are drivers which would initiate this process' otler in his %ook Marketing Management

distin$uishes %rand e)uit! drivers into three &ain $roups: %rand ele&ents( &arketin$

activities and indirect associations' *ach $roup of %rand e)uit! drivers consist of various

ele&ents which re)uire specialist techni)ues in order to %e successful'

The first $roup are %rand ele&ents( Ethose trade&arka%le devices that identif! and

differentiate the %rand9otler 2""6: 286' It is worth &entionin$ that &ultiple %rand

ele&ents contri%ute to the develop&ent of stron$ %rand &uch faster then the sa&e ele&ents

2"


22/57

individuall!' otler descri%es the& as Ethe initial choices for the %rand ele&ents or identities

&akin$ up the %rand 9%rand na&es( 0s( lo$os( s!&%ols( characters( spokespeople( slo$ans(

Cin$les( packa$es( and si$na$e' *ach ele&ent can pla! a nu&%er of %rand%uildin$ roles(

however it is i&portant to understand that each sin$le ele&ent provides a positive contri%ution

to %rand e)uit!' otler ar$ues that wa! to do it is Ethe test of the %rand%uildin$ a%ilit! of

these ele&ents is what consu&ers would think or feel a%out the product if the %rand ele&ent

were all the! knew' Basicall!( %rand ele&ents should %e eas! to reco$ni/e and recall(

likea%le( persuasive and as descriptive as possi%le' The! should also( if it is possi%le( capture

intan$i%le characteristics' This can %e done in &an! wa!s( for e,a&ple %! adaptin$ s!&%ols

or inventin$ slo$ans which would help consu&ers( as otler phrase it( E$rasp what the %rand

is and what &akes it special( su&&ari/in$ and translatin$ the intent of a &arketin$ pro$ra&'

otler distin$uishes si, &ain criteria for choosin$ %rand ele&ents:

+e&ora%ilit! G How easily is the brand element recalled and recognied!

The intrinsic nature of na&es( s!&%ols( etc' &i$ht $ain &ore attention and &ake

it easier to recall or reco$ni/e when &akin$ purchase decision or consu&ption'

+eanin$fulness "s the brand element credible and suggestive of the

corresponding category!It could su$$est the t!pe of person who &i$ht use the

%rand or so&ethin$ a%out product in$redient' Basicall! it takes on different

&eanin$s which var! in persuasive and descriptive content'

0ika%le GHow aesthetically appealing is the brand element!ichness in visuals(

ver%al i&a$er! or &a!%e so&e other wa! in which ele&ent is inherentl! likea%le'

Transfera%ilit! G #an the brand element be used to introduce new products in the

same or different categories!$oes it add to brand equity across geographic

boundaries and market segments!It is the usefulness of %rand ele&ent not onl!

in product or line e,tensions %ut also in &arket e,pansion'

Adapta%ilit! GHow adaptable and updateable is the brand element!Since there

are chan$es in consu&ers opinions and values so&eti&es there is a need for %rand

ele&ents to %e fle,i%le and eas! updatea%le( so consu&ers will still see it relevant'

;rotecta%ilit! G How legally protectable is the brand element! It is i&portant

to re&e&%er a%out the future of the %rand( so the ele&ent should %e a%le to %e

le$all! re$istered and protected internationall!'

The criteria presented %! otler could %e distin$uished into two functions the! provide' The

first three criteria: &e&ora%ilit!( &eanin$fulness and likea%ilit! characteri/e and descri%e

2#


23/57

choice of well thou$ht out ele&ents when %uildin$ the %rand e)uit!' ?owever( the nature

of the latter three is &ore defensive and concern %rand ele&ent to$ether with %rand e)uit!

it creates and which could %e preserved and levera$ed when facin$ different constraints and

opportunities'

The second $roup of %rand e)uit! drivers are Eproduct and service and all

acco&pan!in$ &arketin$ activities and supportin$ &arketin$ pro$ra&s9otler 2""6: 28@'

otler-s view on these drivers is rather holistic' ?e e,plains the $eneral ideas %ehind the&(

rather than e,plainin$ specific &arketin$ activities' This approach suits the purpose of this

paper since &arketin$ is a %road concept( and custo&ers discover the %rand thou$h the ran$e

of %rand contacts( Ean! infor&ation %earin$ e,perience( whether positive or ne$ative( a

custo&er or prospect has with the %rand( the product cate$or!( or the &arket that relates to the

&arketer-s product or service9Schult/ 2""7' The contacts and touch points like: pa!&ent

transaction( telephone or online e,perience( word of &outh( interaction with personnel or

si&pl! personal use and o%servations show that strate$! and tactics %ehind &arketin$ are no

lon$er as si&ple as the! were in the past' The stud! of interconnection and interdependence of

various factors e&phasi/e there are three i&portant the&es when desi$nin$ &arketin$

pro$ra&s of %rand %uildin$' The three ideas are: personali/ation( inte$ration and

internali/ation'

E;ersonali/in$ &arketin$ is a%out &akin$ sure the %rand and its &arketin$ are

as relevant to as &an! custo&ers as possi%le9otler 2""6: 288' In the world where ever!

custo&er is treated individuall! custo&ers desire &ore attention' In order to adapt to this

re)uire&ent &arketers have e&%raced different &ethods: e,periential &arketin$( onetoone

&arketin$ and per&ission &arketin$'

*,periential &arketin$ was the concept developed %! Sch&itt in #>>>' The &ain idea was

that Eif !ou want to win and keep custo&ers( !ou &ust offer the& an e,perience that is tied to

the purchase of !our $oods and services9inni #>>>: #72' Sch&itt in his &odel used five

strate$ic e,periential &odels: sense( feel( think( act and relate as a strate$ic %asis

of &arketin$' ?e ar$ues that it is necessar! to en$a$e as &an! senses as possi%le' In his %ook

E%periential Marketing How to &et #ustomers to 'ense( Feel( )hink( Act and *elate to +our

#ompany and BrandsSch&itt writes ETraditional &arketin$ was developed in response to the

industrial a$e( not the infor&ation( %randin$ and co&&unications revolution we are facin$

toda!9Sch&itt #>>>: #2'

The en$a$e&ent and interaction with the %rand( products andservices create e,periences which drive sales( create i&a$e and awareness of the %rand'

22


24/57

The ai& of personali/ed &arketin$ is to esta%lish the connection with the consu&er which

will %e not onl! rational %ut also e&otional'

The second idea is( onetoone &arketin$ which is e,plained as E%ein$ willin$ and a%le

to chan$e !our %ehavior toward an individual custo&er %ased on what the custo&er tells !ou

and what else !ou know a%out that custo&er9;eppers #>>>: #@#' ;eppers and o$ers

outlined a fourstep fra&ework that can %e used in onetoone &arketin$:

,- "dentify you prospects and customers

.- $ifferentiate customers in terms of /,- their needs and /.- their value to your company

0- "nteract with individual customers to improve your knowledge about their individual

needs and to build stronger relationships

1- #ustomie products( services( and messages to each customer

This concept( however( re)uires a lot of invest&ents in infor&ation collection process( and

proves to %e successful onl! for co&panies that collect plent! of infor&ation a%out individual

custo&ers'

The third &ethod &arketers use is per&ission &arketin$' This concept is a%out &arketin$

to consu&ers onl! after $ettin$ per&ission to do it' In this t!pe of &arketin$ it is the

custo&er( who decides whether he or she wants to receive or not &arketin$ infor&ation and

under which for&' As =odin wrote in his %ook E&arketers can develop stron$er consu&er

relationships %! respectin$ consu&ers- wishes and sendin$ &essa$es onl! when the! e,press

willin$ness to %eco&e &ore involved in a %rand9=odin #>>>' 0eavin$ decision to the

potential custo&er &akes the decision &ore personal and &akes hi& or her feel &ore relevant

thus creatin$ deeper and stron$er relationship with the %rand'

The second &ain the&e in desi$nin$ &arketin$ pro$ra&s is inte$ration &arketin$'

otler e,plains it sa!in$ it is Ea%out &i,in$ and &atchin$ &arketin$ activities to &a,i&i/e

their individual and collective effects' In order to achieve it( variet! of diverse &arketin$

activities is needed that will reinforce the %rand pro&ise' This kind of approach co&es fro&

the holistic view on &arketin$ which assu&es that( E+arketin$ pro$ra&s should %e put

to$ether so that the whole is $rater than su& of the parts9otler 2""6: 28>' Su& of the

individual &arketin$ activities in not e)ual to the total outco&e of &arketin$ pro$ra&' All

inte$rated &arketin$ actions can %e evaluated %! lookin$ at their effectiveness( efficienc!( and

effect the! have on %rand awareness or creatin$ and &aintainin$ %rand i&a$e' The two

i&portant &arketin$ concepts in inte$rated &arketin$ are %rand identit! and %rand i&a$e'

The! are closel! related to each other' Accordin$ to otler92""6 EIdentit! is the wa! aco&pan! ai&s to identif! or position itself or its product' The ai& of %rand identit! strate$!

27


25/57

is creation of a Eset of processes that include the coordinated efforts of the %rand strate$ists in

9# developin$( evaluatin$( and &aintainin$ the %rand identit!


26/57

7' Brin$ the Brand Alive for *&plo!ees G It is a%out i&provin$ &orale' The $oal is

Eto create an e&otional connection to !our co&pan! that transcends an! one particular

e,perience9+itchell 2""2' The ener$i/in$ and infor&ative co&&unication should

fill e&plo!ees- &inds with %rand vision and &ake the& feel that ever! decision the!

&ade is supportin$ the %rand' .o&pan! should $ive e&plo!ees the reason to care'

All three concepts applied to the second $roup of drivers and supportin$ &arketin$

activities acco&pan!in$ the& are crucial for %uildin$ %rand e)uit!' +ana$in$ %rand e)uit!

is &ore effective and efficient if necessar! &arketin$ operations are i&ple&ented' In addition

to that( %! &akin$ drivers and supportin$ &arketin$ activities interdependent and

interconnected the outco&e in &an! cases is astonishin$'

The last $roup of %rand e)uit! drivers are indirect associations( also called

Esecondar! associations' This idea is a%out creatin$ E%rand e)uit! %! linkin$ the %rand

to other infor&ation in &e&or! that conve!s &eanin$ to consu&ers9otler 2""6: 2>"'

+akin$ consu&ers associate the %rand with the entit! in direct or indirect wa! affects %rand

knowled$e' If the si&ilarities %etween the entit! and the %rand are su%stantial( consu&ers

would transfer the knowled$e of entit! %ack to the %rand &ore fre)uentl!' The Co% of the

secondar! association is( as eller e,plains( Eto affect consu&ers- evaluations of a product

when the! lack the &otivation or a%ilit! to Cud$e it on a deeper level' 5hen consu&ers don-t

care a%out choosin$ a particular %rand or the! feel that the! don-t possess the knowled$e to

choose the appropriate %rand( the! &ake decisions %ased on secondar! considerations

9eller( 2""@' Such an approach see&s to %e a ver! topical issue' .onsu&ers are %o&%arded

with infor&ation and ver! little of it is re&e&%ered' eller identified three factors which

affect secondar! associations:

#onsumers2 knowledge of the entity G fa&iliarit! with the entit!' Stron$(

favoura%le( and uni)ue Cud$e&ents and feelin$s a%out the entit! are desired'

Meaningfulness of consumers2 knowledge of the entity G relevanc! of the

knowled$e of the identit! to the %rand' So&e associations have little connection

while on the other hand( other see& valua%le for the %rand'

)ransferability of consumers2 knowledge of the entityG e,tent to which consu&ers

link the knowled$e to the %rand' .reatin$ eas! transfera%le %rand associations

is desired'

2@


27/57

Brand associations could %e linked to the %rand %! four different entities presented in Fi$ure

@'

*ven thou$h there are &an! possi%ilities of levera$in$ secondar! associations of the %rand(

this techni)ue has also downsides' =ivin$ up control of the %rand i&a$e to so&e other entit!

is risk!' The transfer process &a! %e difficult to &ana$e since irrelevant secondar!

associations to the %rand could %e &ade( and relevant associations &a! not %e taken into

consideration' Beside that( the knowled$e which custo&ers o%tained and linked in their

&e&or! &a! chan$e over ti&e' The co&%ination of connections %etween entit! and the %rand

&a! alter if the new knowled$e $ained a%out entit! is unfavoura%le( thus %ein$

disadvanta$eous to the %rand' Because of that choosin$ secondar! associations has to %e well

thou$ht out decision'

All three kinds of %rand e)uit! drivers pla! i&portant role in enhancin$ %rand e)uit!'

.reation of advanta$eous %rand knowled$e structures is not an eas! task' EAs &arketers tr!

to s)uee/e &ore value out of fewer dollars in their %ud$ets( the! &ust closel! e,a&ine their

activities and pro$ra&s for effectiveness and efficienc!9eller 2""@' +arketers have

to choose carefull! %rand ele&ents( &arketin$ strate$ies and %rand associations in order to $et

the hi$hest %enefit possi%le' It is their task to find a proper &i, of attri%utes and techni)ues

that will &a,i&i/e the %rand e)uit! of the %rand( and &ake %rand %uildin$ process &ore

s&ooth' The opti&i/ation of results and $ettin$ as &uch profits as possi%le fro& appropriate

selection of %rand e)uit! drivers &ake %rand stron$er( helps achieve favoura%le &arket

26


28/57

position and leads to the $rowth and e,pansion of the %rand' But how can this %e &easured

At which state is the %rand currentl!( what position on the &arket it has e,t section will

focus on answerin$ these )uestions'

#.-. Brand life cycle e(pansion and position on t"e !ar$et.

5ith the ti&e ever! %rand is facin$ so&e chan$es' Techni)ues presented in previous

sections help co&pan! in achievin$ $oals and followin$ specific strate$ies the! have'

*ver! one of the& prove to %e useful at so&e point of ti&e' But how e,actl! looks

the develop&ent of the %rand Does it follow so&e c!cle 5hat are the strate$ies %rands are

followin$ ?ow can the e)uit! of the %rand %e &easured and how it is perceived %! the

potential custo&ers The answer to these )uestions will %e $iven in this section' First life

c!cle of the %rand will %e presented' e,t section will focus on %rand e,pansion strate$ies

and i&plications to %rand life c!cle' After that Brand Asset 1aluator &odel will %e presented

which focuses on &easurin$ %rand e)uit! and assessin$ %rand position on the &arket in e!es

of consu&ers' All &odels presented will help the reader in understandin$ how %rands evolve'

#.-.1. roduct/Brand life cycle

+odel that will %e presented as the first one is ;roduct 0ife .!cle' All products that

are an o%Cect of e,chan$e sta! on a &arket for so&e ti&e which is difficult to esti&ate' This

ti&e is divided into few phases( which to$ether &ake up product life c!cle' Accordin$ to

otler life c!cle &odel can %e also used Eto anal!/e a product cate$or!( a product for&( a

product( or a %rand9otler 2""6: 7#8' This paper will present onl! a %ellshaped pattern of

the %rand' Brands( in a co¶%le &anner to people are %orn( capture the &arket( live

and die'

?owever %rand life c!cle acts different fro& hu&an life( since %rand-s life see&s

to shorten to$ether with technolo$ical pro$ress( econo&ic and civili/ation develop&ent'

*cono&ic a$ein$ of %rand results fro& develop&ent of science and technolo$!( international

e,chan$e( societ!-s wealth and increased infor&ation flow' Brand life c!cle for &aCorit!

of the products consist of four sta$es:

Introduction

24


29/57

=rowth

+aturit!

Decline

The introduction phase of %rand life c!cle is ver! i&portant' This phase ver! often takes

a lot of ti&e and is ver! e,pensive' It covers the period fro& the &o&ent of havin$ an idea

of the %rand to the &o&ent of its reali/ation' The &ost i&portant thin$ for introduction of

new %rand is the positive assess&ent of utilit! %! the consu&ers'

The phase of $rowth characterises )uick increase in turnover' The nu&%er of %u!ers

increase( the profits are risin$ and at the sa&e ti&e the nu&%er of additional %enefits fro&

%rand pro&otion are risin$ while spendin$ less on it' The co&pan! should ai& at prolon$in$

this life c!cle phase( since it is the period of $ainin$ hi$h %enefits' It is i&portant to i&prove%rand %! i&ple&entin$ new( additional features or new versions of the product to &o%ili/e

successivel! ne,t &arket se$&ents influencin$ further $rowth of sales'

In the phase of %rand &aturit!( the scale of sales reaches cul&ination point after which

there is ne$ative $rowth( what causes decrease in profit' ?i$h %rand awareness encoura$es the

co&pan! to e,tend this still %eneficial phase' The strate$ies useful in &akin$ &odifications

&a! include %oth &odification of the &arket and product' In &odification of the &arket the

co&pan! should aspire to increase )uantit! of ite&s sold' In order to increase this )uantit!(

the nu&%er of &arketin$ activities &ust %e increased' In &odification of the product the ai&

is to increase the nu&%er of %u!ers' There are different strate$ies involved' 5ith the

increasin$ e,penditure on pro&otion( the chan$es of )ualit! which were introduced are

si$nalled to the custo&ers'

At sta$e of decline rapid decline in sales and profits takes place' The %rand ends its

life c!cle on the &arket alon$ with profits for the co&pan!' In this phase &an! co&panies

withdraw fro& the &arket' Those ones that re&ain on the &arket could li&it their offer(

reduce distri%ution channels( lower &arketin$ %ud$et and withdraw fro& so&e se$&ents of

the &arket' There are &an! factors that cause decline and ulti&atel! Edeath of the product'

The! &a! include the conse)uences of technolo$ical pro$ress and switches in technolo$!(

intensification of international co&petition and chan$es in consu&er tastes'

All sta$es of %rand life c!cle $enerate pro%le&s( which &a! occur durin$ introduction

followed %! $rowth of sales and &aturit!( endin$ with decline' The pro%le&s encountered at

each sta$e re)uire various &ethods and tools that will help in findin$ solution' The phase( in

28


30/57

which actuall! %rand is can %e deter&ined %! followin$ throu$h sales and profit d!na&ics and

structure of the co&petitors'

#.-.#. Brand 0rot" Direction Matri(.

Another &odel presented focuses on e,pansion of the %rand( which should rather

%e used to descri%e situation of the %rand' Do!le in his article criticises product life c!cle

approach and appl!in$ it to the %rand life c!cle' ?e ar$ues that EThere is no reason wh!

a %rand cannot adapt to new technolo$ies and &ove fro& &ature into new $rowth

&arkets9Do!le( #>>"' Instead he proposes &atri, which presents the &ain $rowth

opportunities availa%le 9Fi$ure 6'

Fi$ure 6' Brand =rowth Direction +atri,' 9Source: Adapted fro& Do!le #>>"

Accordin$ to Do!le %rand share is the initial strate$ic focus' ;lent! of co&panies that were

successful in this area chan$ed their strate$! %! incorporatin$ new technolo$ies' ?owever

there were also co&panies that decided to &ove into new &arket se$&ents' There is no

distinction what should %e done first' The last $rowth direction is shiftin$ to $lo%al %rands'

Accordin$ to Do!le( this is rather the wa! of presentin$ %rand-s life'

Another e,pansion related &odel is presented %! ;and!a' ?e differentiates four

%randin$ strate$ies that co&panies can choose when thinkin$ a%out e,pansion of the %rand

9Fi$ure 4'

2>


31/57

Fi$ure 4' Four Brandin$ Strate$ies' 9Source: ;and!a 2"">: 7

This &odel( focuses rather on &arket and technolo$! for developin$ strate$! of the %rand(

concentrates on product and %rand cate$ories' The first strate$! proposed is 0ine *,tension'

The &ain idea of it is enhancin$ e,istin$ product cate$ories with new for&ulas( repacka$in$

the&( and usin$ alread! esta%lished %rand reputation for pro&otion' Brand *,tension involves

e,tension of the e,istin$ %rand with the new product cate$ories' The strate$! of +ulti

%randin$ attracts new custo&ers %! relaunchin$ e,istin$ products under new na&es' The last

strate$! is applied when the e,istin$ %rand is no lon$er suita%le for the introduction of the

new product cate$or!' It is however i&portant to &ention( that e,pansion of the %rand could

%e done si&ultaneousl! in different directions'

5hatever the perspective of descri%in$ %rand life c!cle or e,pansion of the %rand

used( there will %e disa$ree&ents %etween e,perts( since ever! theor! considers different

relevant factors' The &odel that %est su&&ari/es the si&ilarities %etween these three &odels

is i&proved %rand life c!cle &odel presented on =raph #'

7"


32/57

=raph #' Brand 0ife .!cle' 9Source: Adapted fro& Sapna 2"#": >

+odel presented here shows the approach( which incorporates product life c!cle and %rand

e,pansion strate$!' The value of the %rand rises with the ti&e %ut at so&e point it will start

declinin$' Because products have theoreticall! )uicker ti&efra&e then the %rand( and their

lifeti&e is &ore o%vious since it is easier to o%serve( %rand lifec!cle is presented as the su&

of different product lifec!cles' B! usin$ e,pansion techni)ues( the products do not disappear

fro& the &arket( %ut the! are rather e,panded to new &arkets( i&proved( or e,tended'This kind of continuation &akes sense( since at so&e point there would %e nothin$ that could

%e done to keep product alive and value of the %rand will start fallin$ if none of the techni)ues

are incorporated to save it'

#.-.'. Brand Asset 2aluator.

The last &odel presented focuses on how the co&pan! is perceived %! the custo&ers(

and then assi$n &arket position to these data' Brand Asset 1aluator &odel was developed

%! Loun$ and u%ica& 9LM %! investin$( since #>>7( Eover N#7" &illion in collectin$ and

interpretin$ data on consu&ers- perceptions of so&e 33(""" product and service %rands

in over @" countries9=er/e&a( 2"">' The co&parative &easures of the %rand e)uit!

identified four pillars assessin$ four distinctive co&ponents:

*ner$i/ed Differentiation(

elevance(

7#


33/57

*stee&(

nowled$e'

*ner$i/ed Differentiation co&poses of five %rand attri%utes: uni)ueness( offerin$(

pricin$ power( innovation and d!na&is&' It &easures the level of differentiation fro& others'9So&eti&es this di&ension is divided into *ner$! and Differentiation( however stron$

correlation %etween the& induced the creators of the &odel to co&%ine it into one'

elevance used in Brand Asset 1aluator is stron$l! related to &arket penetration( since

it captures the appropriateness of a %rand to consu&ers and %readth of the appeal' *stee& is

an evaluation usin$ relia%ilit!( perceived )ualit! and &easures of respect' It &easures the

prere)uisite for %uildin$ lo!alt!'nowled$e pla!s i&portant role in BA1 &odel as it reflects

depth of e,perience consu&ers have with the %rand' +easures level of fa&iliarit! and

inti&ac! with it'

First two co&ponents cover the aspects co&%ined into one cate$or!( called Brand Stren$th' It

is the assess&ent of %rand-s future value' The latter two pillars deter&ine second cate$or!(

Brand Stature' This cate$or! is a%out the recent perfor&ance of the %rand' Two cate$ories

co&%ined to$ether for& ;ower =rid' Different arran$e&ents of the pillars depict different

sta$es of %rand develop&ent shown in =raph 2'

=raph 2' Brand Asset 1aluator ;ower =rid' 9Source: Adapter fro& =er/e&a 2"#"

?i$h level of onl! *ner$i/ed Differentiation characteri/es stron$ new %rands with the

develop&ent potential' 0eaders score hi$h on all pillars' Declinin$ %rands score ver! hi$h on

72


34/57

nowled$e and *stee&( while su%stantiall! lower on the other two' .o&pan!-s %rand e)uit!

follow the c!cle %! $oin$ throu$h respective sta$es one after another'

All &odels presented in this section are useful in understandin$ the position of the

%rand( and possi%ilities for the future' Brand life c!cle shows( that in order to keep the

position on the &arket and in consu&ers &inds( co&pan! has to e&plo! %randin$ strate$ies(

which are ade)uate to the current sta$e of %rand life c!cle' The $rowth of the %rand can %e

focused either on new &arkets( new technolo$! or %oth' The direction of e,pansion of the

%rand can %e towards not onl! e,istin$ and new product cate$ories( %ut also e,istin$ and new

%rand cate$ories' 5hen co&pan! is havin$ hard ti&e doin$ %usiness( the %rand representin$ it

will &ostl! have the sa&e pro%le&( since there is a stron$ connection %etween the&'

?owever these difficulties have s&aller i&pact on the %rand( since it consists of &an!

ele&ents' The te&porar! pro%le&s with one of the& not necessaril! &ean serious pro%le&s

with how the %rand is perceived' Brand Asset 1aluator &odel is useful in assessin$ &arket

position of the %rand since it focuses on how custo&ers perceive it' This kind of knowled$e

helps in understandin$ how the %rand is different fro& co&petitors and what could %e

i&proved' All &odels are useful in choosin$ specific %rand strate$ies and deter&ine $oals'

As could %e seen in the chapter( %uildin$ a %rand is a co&ple, activit!' *ven thou$h

the process is la%orious( it $ives &an! %enefits' ole the %rand pla!s for %oth co&pan! and

custo&ers is undenia%le' *asier identification( increased practicalit! and lo!alt! are few fro&

&an! functions which help in creatin$ si$nificant differences %etween %rands' In order

to achieve that co&pan! has to focus on %rand %uildin$ process' *ven thou$h there are &an!

&odels to follow( the %enefits at the end are the sa&e' 0eadin$ the %rand to o&nipresence and

hi$h reco$nisa%ilit! is what will create differences in consu&er &inds' These differences are

for&in$ %rand e)uit!' There is also diver$ence in the theories( however the end results are

si&ilar' In order to create %rand e)uit! it is necessar! to have drivers which will take part

in identif!in$( $ivin$ the &eanin$( creatin$ positive response and esta%lishin$ relationship

with the %rand' The! &a! %e divided into few $roups( dependin$ on their nature' *ach of

the& have $roup specific strate$ies which help in creatin$ %rand knowled$e structures' sin$

all ele&ents is not necessar!( however to %e successful &an! of the& have to %e taken into

consideration' 0ast part of the chapter su&s up the results of %rand %uildin$ %! presentin$

&odels concernin$ sta$e the %rand is currentl! in and position the %rand has co&paredto other co&panies'

77


35/57

'. McDonalds strategy for building a successful brand.

The fast food &arket has %een with the nited States for $ood and for worse and was

$rowin$ in power to$ether with the S' It is a drea& of ever! fast food provider in the nites

States to %eco&e a part of national culture like %i$ corporations' But havin$ drea&s and

&akin$ the& co&e true are two different thin$s' In order to &ake the& real we have to look at

the co&pan!( which operations are outstandin$' In the S Fast Food &arket( when !ou think

a%out the leader( !ou alwa!s think of +cDonald-s' The co&pan! that started in #>3" with Cust

one restaurant in San Bernardino( .alifornia hase now over #7>8" restaurants servin$ the

sa&e %ur$ers( fries and offerin$ the sa&e e,perience in the whole nited States' *ven thou$h

the &enu in +cDonald-s have %een chan$in$( there are ite&s like FiletFish introduced in

#>67( Bi$ +ac9#>68( ?app! +eal9#>4>( +c.hicken9#>8"( .hicken +cu$$ets9#>8" that

are still sold( and are the core of the &enu' Despite the fact that recipes have %een chan$in$

with ti&e( the na&es still re&ained' ?ow it is possi%le to sell the sa&e products for 3"@"

!ears and still keep custo&ers e,cited a%out eatin$ and co&in$ to +cDonald-s outlet It is

done %! successful %rand %uildin$' +cDonald-s fro& the ver! %e$innin$ had a clear idea howthe! want to e,pand their %usiness to other locations: unifor& restaurants( with unified &enu'

But havin$ si&ilar restaurants was not enou$h to %eco&e a leader' a! roc( the owner of

+cDonald-s( had to think of so&ethin$ that will differentiate his restaurants fro& the

restaurants of co&petitors' ?e had to put the na&e of his co&pan! in the hearts and &inds of

&illions' The onl! wa! to achieve that was throu$h successful %rand %uildin$' ineteen !ears

after the openin$ of the first restaurant( +cDonald-s started first %ill%oard advertisin$

ca&pai$n' The period fro& #>6" to #>67 was the intensified %rand %uildin$ period' Startin$

national ca&pai$n and introducin$ lo$o that re&ains to this da! are onl! few fro& &an! other

%rand %uildin$ techni)ues used %! +cDonald-s'

B! anal!/in$ the %rand %uildin$ process of +cDonald-s .orporation( an i&portant

lesson a%out doin$ %usiness can %e learnt' 5hen !ou $o to an! of its outlet !ou %u! not onl!

food %ut also an unfor$etta%le e,perience' But how to create this e,perience( that custo&er

would want over and over a$ain ?ow to keep custo&ers satisfied and ea$er ever! ti&e

the! enter the door 0ookin$ at the %rand e)uit! drivers( anal!/in$ its %rand e)uit! and

73


36/57

positionin$ on the &arket will help to understand the pheno&enon of the =olden Arches'

Is successful %rand %uildin$ a ke! to success in toda!-s world First few facts and histor!

of +cDonald-s will %e presented' After that +cDonald-s %rand e)uit! to$ether with %rand

e)uit! drivers will %e descri%ed to $reat depth' The ne,t thin$ done will %e presentin$ current

situation of +cDonald-s %rand %! appl!in$ different &odels' At the end of the chapter future

issues concernin$ the %rand will %e discussed'

'.1. 3istorical bac$ground of McDonalds Corporation.

To full! understand the co&ple,it! of +cDonald-s corporation histor!so&e %asic facts

need to %e presented' +cDonald-s .orporation was founded in #>@@ %! a! roc( who

throu$hout the !ears &ade co&pan! flourish' ?owever( the ori$inal idea dates %ack to #>3"'

That is when two %rothers ichard and +aurice +cDonald opened +cDonald-s BarBOue

restaurant offerin$ 2@ ite&s' *ven thou$h &aCorit! of the ite&s were %ar%ecue( &ost of the

profits ca&e fro& sellin$ ha&%ur$ers' In #>38 +cDonald %rothers decide to rearran$e their

%usiness' 5hat the! then offered was a selfservice drivein restaurant' B! introducin$

ESpeedee Service S!ste& and reduced &enu to onl! > ite&s the! soon started to franchise

their restaurant' In #>@3 a! roc visited +cDonald-s and %e %eca&e fascinated with the ideaof strea&lined asse&%l! line for %ur$ers' Since %rothers were lookin$ for nationwide

franchisin$ a$ent( a !ear later the three &en &ade an a$ree&ent' Fro& that &o&ent the

co&pan! started its e,pansion on a $rand scale and %! #>6@ there were over 4"" +cDonald-s

restaurants in nited States' In the &eanti&e a! roc %ou$ht the ri$hts fro& +cDonald

%rother for N2(4 &illion and %eca&e the onl! owner of +cDonald-s .orporation' ?e had

a $reat vision of the co&pan! and he knew that advertisin$ would pla! a ke! role

in co&pan!-s develop&ent' +cDonald-s %e$an advertisin$ and started %uildin$ a %rand'

roc-s decision was to advertise +cDonald-s products to fa&ilies and children' Advertisin$

started fro& %ill%oards in #>@>( national &a$a/ines9#>62( introduction of =olden Arches

lo$o9#>62( &ascot onald +cDonald9#>67( national television9#>66 and since that ti&e

the co&pan! has %een known fro& the catch! advertise&ents and slo$ans' But +cDonald-s

was not successful onl! %ecause it advertised a lot' The &otto( introduced %! a! roc(

OS.M1 9Oualit!( Service( .leanliness and 1alue has acco&panied the co&pan! al&ost fro&

the ver! %e$innin$' 0on$ %efore trainin$ centres started to %e re$ular parts of %i$

corporations( +cDonald-s alread! had it' The ai& of ?a&%ur$er niversit!( created in #>6#(

7@


37/57

was Eto train +cDonald-s franchisees %ut with the ti&e it %eca&e( Cust like co&pan!

Ea $lo%al pheno&enon( now trainin$ restaurants &ana$ers( &iddle &ana$ers and e,ecutives'

*ver!thin$ what +cDonald-s did led to success and position of the leader in national fast food

&arket' At the earl! sta$e of e,pansion +cDonald-s was franchisin$ and %uildin$ own

restaurants all over the nited States' The ai& of e,pansion was to cover as &an! locations as

possi%le' *ver! !ear new restaurants were %ein$ opened( %ut nowada!s( ever! location is

%ein$ carefull! studied pa!in$ special attention to proCected sales( co&pati%ilit! with other

+cDonald-s restaurants and co&petition' *ver! few !ears +cDonald-s had to acco&&odate

tactics to the &arket' For e,a&ple in #>8"s the co&petition %etween Bur$er in$( 5end!-s

and +cDonald-s started intensif!in$' The earl! #>8"s %eca&e known as EBur$er 5ars

%ecause of fierce %attle for &arket share which included price slashin$ and a$$ressive

advertisin$ ca&pai$ns' ?owever +cDonald-s sales were still $rowin$ &ostl! due to

advertisin$ ca&pai$ns that were i&ple&ented earlier' But &arket of fast food is chan$in$ all

the ti&e( and co&petition is not sleepin$' In order to keep up with the risin$ e,pectations

fro& the custo&ers +cDonald-s had to evolve' 5ith the ti&e( the &enu $rew fro& > ite&s to

over >" positions divided in specific sections like sandwiches( %reakfast or salads' But

chan$in$ &enu is not enou$h for a fast chan$in$ world' *ven thou$h +cDonald-s has &an!

custo&ers( the! constantl! need to adCust' In 2""> +cDonald-s introduced the concept of

+c.afe( the e,tension of coffees offered and in 2"#" free 5iFi was &ade availa%le in

selected restaurants' In order to sta! co&petitive and cover new niches +cDonald-s has

alwa!s looked into the future' ?ow &arket can chan$e and what needs will have custo&ers

discovered Cust in ti&e( so custo&ers felt that co&pan! understood their needs' 5ith such a

$ood %ond with custo&ers and proper understandin$ of their need +cDonald-s revenue in

2""> was around N4(>@ 9N3(7 %illion franchised revenues and N7(6@ %illion co&pan! activit!'

As the !ears are passin$ %!( +cDonald-s strate$! is chan$in$ and adCustin$ to the custo&ers'

It is not an eas! wa! to %eco&e a national leader fro& the local $rill %ar' In order to do so(

%rand e)uit! drivers that will allow doin$ it are needed' e,t section will present these drivers

and their e&plo!&ent %! +cDonald-s'

'.#.McDonalds Brand E*uity drivers.

*sta%lishin$ a %rand is not an eas! task that can %e done overni$ht' A lot of thou$ht

into desi$nin$ the attri%utes is necessar! to &ake sure that the future $rowth and e,pansion

76


38/57

are painless' At this section the drivers( that help +cDonald-s achieve the position it has now(

will %e presented' The! will %e presented in three $roups: %rand ele&ents( &arketin$ activities

and indirect associations'

'.#.1. McDonalds Brand Ele!ents.

The first $roup presented are %rand ele&ents' There are &an! ele&ents +cDonald-s

uses and each of the& ver! often perfor&s &ore then one function' 5hat is &ore(

+cDonald-s uses &ultiple ele&ents for the sa&e function so the influence the! have on

potential %u!ers is &uch &ore faster' *ver! one of %rand ele&ents provides positive

contri%ution to the %rand e)uit!'

Brand na&e is the &ost i&portant ele&ent when desi$nin$ a %rand' The na&e

+cDonald-s is fa&ous( reco$ni/a%le and cannot %e &istaken with an! other co&pan!' Fro&

the ver! first &o&ent it is spotted we know what it stands for' The %i$ !ellow na&e is alwa!s

easil! noticea%le and its %ri$ht colors attracts our attention instantl!' Such a well thou$ht out

na&e allows introduction of new ite&s to the &enu ver! easil!( %! si&pl! addin$ E+c as a

prefi, to the product offered' Such an eas! operation allows +cDonald-s to feel safe( since its

products cannot %e &istaken %! an! other product on a &arket'The lo$o +cDonald-s use is stron$l! connected to the %rand na&e' The capital E+(

so&eti&es called =olden Arches( with the distinctive s&ooth shape looks the sa&e as the one

in the na&e' This kind of s&art connotation increases &e&ora%ilit! and reco$nition of the

%rand' The direct connection %etween those two leaves no roo& for a &istake' *asiness

on puttin$ it on an! product offered or in an! for& of advertise&ent invented( is an i&portant

%rand %uildin$ ele&ent' ?avin$ such a si&ple( and on the other hand( so distinctive in shape

and color lo$o allow le$al protection that does not need ant other special effort'

Another %rand %uildin$ ele&ent which +cDonald-s has invented is character onald

+cDonald' A sli& clown( with t!picall! %i$ red clown shoes( !ellow clothes( red hair and %i$

s&ile is a character no child( after seein$ it once( can for$et' .haracteristic friendl!

appearance &akes it ver! easil! to like hi&' evertheless it &i$ht see& that it is $eared

towards children( +cDonald-s present hi& as a friend of children and adults' The neutral

appearance allows to place hi& in ever! restaurant' The s&ile on his face su$$ests that after

eatin$ at +cDonald-s !ou will feel rela,ed and happ!'

74


39/57

The ele&ent of the %rand that is difficult to descri%e is a Cin$le( which in case

of +cDonald-s was alwa!s used with a slo$an' +cDonald-s has used &an! Cin$les in process

of %rand %uildin$( however it was alwa!s one at a ti&e' Since #>4@ to 2""7 the co&pan! has

chan$ed it > ti&es( what $ives avera$e of around 7 !ears per Cin$le' The current characteristic

for +cDonald-s slo$an( EI-& lovin it is unchan$ed since its introduction in 2""7' It is eas! to

&e&ori/e( nice to hear and lika%le' sin$ EI as a su%Cect su$$est that it applies to ever!%od!'

The word Elovin concerns the feelin$ connected to the last part of the slo$an Eit' It is not

e,plained what Eit &eans( is it the food( is it the restaurant( is it the e,perience( or is it the

%rand' B! usin$ such an universal word( the slo$an allows for ever! consu&er to put in his

&ind a word that suits %est for hi& or her' Slo$an which in advertise&ents is acco&panied

with five characteristic tones etch in &e&or! so deep that one can recall it instantl!' The

adapta%ilit! of this ele&ent is rather low( however chan$es do not re)uire as hi$h costs as

chan$es in previous %rand ele&ents'

Another %rand ele&ent of +cDonald-s is packa$in$' Alwa!s with the lo$o and slo$an(

specific for different ite&s' 5hen havin$ product in hands it cannot %e &istaken with an! the

product of the co&petitor' B! havin$ packa$es with colors( lo$o and %rand specific

appearance we feel that after &akin$ the purchase we are still connected with the restaurant'

?owever the packa$in$ is chan$in$ to$ether with %rand sponsorin$ or associations' The

ele&ents of the cups are different( so does the card%oards( nonetheless the chan$es are alwa!s

&inor and product %ou$ht at +cDonald-s cannot %e &istaken with an! other'

ne &ore %rand ele&ent that increases re&e&%rance of +cDonald-s is si$na$e' *asil!

noticea%le( attractin$ !ellow neon +cDonald-s is alwa!s eas! to notice' The attention is

instantl! directed on this si$n' Situatin$ it on the roof of ever! +cDonald-s restaurant(

re$ardless the $eo$raphic location it is alwa!s unchan$ed( and so does the si$n itself' Also the

lo$o of +cDonald-s( =olden Arches( when placed on su%stantial hei$ht is noticea%le fro&

lon$ distances easil!( thus function it perfor& for& the %rand is e,ceptional' To$ether with

specific colors and shape of the %uildin$ there is no chance for a &istake' *ven if so&e

ele&ent is not &e&ori/ed entirel!( there are other which will &ake custo&er aware of the

%rand'

The last %rand %uildin$ ele&ent presented are we% pa$es' In the era of internet contact

with ever! co&pan! and findin$ infor&ation a%out it( if it cannot %e perfor&ed personall!(

is &ost likel! to happen %! usin$ internet' +cDonald-s offers ver! e,tended we%site( where

all infor&ation needed can %e found( and if not( there is a place to ask the&' +cDonald-swe%site pro&otes the %rand ver! well' The appearance su$$ests( that +cDonald-s know how

78


40/57

to &ake ever!thin$ s&ooth and well connected' The do&ain &cdonalds'co& is easil! recalled

since it is no different fro& %rand na&e' *ven thou$h &akin$ a t!po can result in $oin$

to different we%site( +cDonald-s is &onitorin$ carefull! the we% for unauthori/ed use of their

%rand'

All %rand ele&ents presented are useful in %rand %uildin$ and help in creatin$

+cDonald-s %rand e)uit!' *ach of the& pla!s specific role in esta%lishin$ and supportin$ the

%rand' Because +cDonald-s uses all possi%le ele&ents( the %rand reco$nition and awareness

level are so hi$h' The ele&ents used %! +cDonald-s are not different fro& other

conte&porar! %rand %uildin$ strate$ies' This diversit! of %rand ele&ents and s!ner$ies

%etween the& are t!pical for co&panies which have esta%lished a stron$ %rand' The cohesion

of strate$! and for& of co&&unication( to$ether with len$th! duration is +cDonald-s ke! to

success'

'.#.#. McDonalds !ar$eting activities related to brand building.

+arketin$ activities of +cDonald-s are those that pro%a%l! influence the &ost how the

%rand is perceived' In this section different activities and strate$ies will %e presented' The

anal!sis will focus on personali/ation &ethod 9onl! e,periential &arketin$( inte$ration andinternali/ation'

ne of the &ethods that +cDonald-s uses is e,periential &arketin$ which is part

of personali/ation of the %rand' +cDonald-s is fa&ous of offerin$ not onl! food( %ut also

e,perience and feelin$s attached to the whole purchase process' Due to the chan$in$ &arket

+cDonald-s had to adapt these e,periences in order to &aintain its position' The first

e,perience is Sense' +cDonald-s definitel! knows how to affect these sensual and tan$i%le

aspects' 5hen enterin$ the restaurant one notices nice lookin$ interior with s&ilin$

e&plo!ees standin$ %ehind the counter' The scent of the food is in the air encoura$in$

custo&ers to &ake a purchase' 5hile eatin$ delicious food one can seat in a nice lookin$

restaurant' Another e,perience +cDonald-s is $ood at is creation of &oods and e&otions(

called Feel' B! inducin$ affect =olden Arches create %rand associations and %rand awareness'

ice colors( friendl! at&osphere and &ultitude of advertise&ents sendin$ positive

Documents

Macdonalds Brand Equity