Chapter 11 – Managing Brands

True/False Questions

1. A set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract
from the value provided by a product or service to a firm or that firm’s customers is the definition
of brand awareness.
False (moderate)

2. Customer brand equity is the value that an individual customer receives from a branded product or
service, over and above the value received from an identical unbranded product or service.
True (moderate)

3. Pre-purchase equity reduces customers’ search costs and purchase risks because of what customers
believe before purchase.
True (moderate)

4. Post-purchase equity reduces customers’ search costs and purchase risks because of what customers
believe before purchase
False (moderate)

5. The cash flow method is mentioned in the text as a financial market method that has the advantage
of being congruent with a shareholder value perspective.
False (difficult)

6. The market value method views organizational brand equity as the difference between market value
and balance sheet book value plus non-brand intangibles, such as patents, know-how, and human
resources.
True (difficult)

7. According to the text, a firm pursuing an umbrella branding strategy employs a single brand such as
a corporate brand or a family brand.
True (moderate)

8. In favor of multibranding, the firm may enjoy economies of scale in advertising and promotion for
an individual brand.
False (moderate)

9. According to the text, repositioning is the prime means of brand revitalization.

True (easy)

10. Brand identity, including personality and the brand promise, is what the firm wants the brand to
mean.
True (moderate)

11. The key to sustaining a strong brand is continual assessment of company cash flow.
False (moderate)

12. Brand equity is the firm’s organizing structure for its multiple brands.
False (moderate)

13. Intel introducing CentrinoCeleron to protect Pentium is an example of a flanker brand.

True (moderate)

95
14. In an umbrella strategy, the firm selects an individual brand name or names for each of the various
product categories in which it competes.
False (moderate)

15. According to the text, repositioning is the prime means of brand revitalization.Key options for
brand repositioning include targeting new market segments, changing brand associations, and
altering the competitive target.
True (moderate)

Multiple Choice Questions

16. Which of the following is NOT an example of a brand name that has become synonymous with a
product category?
a.) Band-Aid
b.) Kleenex
c.) Chrysler (easy)
d.) Xerox

17. Which of the following is NOT mentioned in the text as a “new way” to viewing the management
of brands?
a.) Branding is a multisensory memorable experience.
b.) Brand rationalization is common.
c.) Brand proliferation is common. (difficult)
d.) Global brands are becoming increasingly prominent.

1718. According to the text, successful branding leads to all of the following EXCEPT:_____________
captures the idea of enduring and distinct human or emotional characteristics associated with a
brand.
a.) Positive attitudes and intentions to purchaseBrand image
b.) Repeat purchase of individual productsBrand awareness
c.) Purchase of other similarly branded items through cross-sellingBrand positioning
d.) Frequent brand switchingBrand personality (difficultmoderate)

1819. A set of brand assets and liabilities linked to a brand, its name, and symbol that adds to or subtracts
from the value provided by a product or service to a firm or that firm’s customers is the definition
of _______________.
a.) brand awareness
b.) brand equity (moderate)
c.) brand penetration
d.) brand intention

1920. Which of the following DOES NOT describe effective brand associations?
a.) Strong
b.) Expensive (moderate)
c.) Favorable
d.) Unique

2021. _______________ is the value that an individual customer receives from a branded product or
service, over and above the value received from an identical unbranded product or service.
a.) Customer use satisfaction
b.) Organizational use satisfaction
c.) Organizational brand equity
d.) Customer brand equity (moderate)

96
2122. ______________ reduces customers’ search costs and purchase risks because of what customers
believe before purchase.
a.) Post-purchase equity
b.) Pre-purchase equity (moderate)
c.) Pre-purchase dissonance
d.) Post-purchase dissonance

2223. ______________ enhances the customer’s consumption experience.

a.) Pre-purchase equity
b.) Pre-purchase dissonance
c.) Post-purchase equity (moderate)
d.) Post-purchase dissonance

2324. Consumer brand equity, either pre- or post-purchase, is generally greater in all of the following
situations EXCEPT when:
a.) Product quality from some suppliers is variable.
b.) Customers do not realize value until some time after purchase.
c.) Comparing alternative products is difficult.
d.) Customers are experienced or familiar with the product class. (difficult)

2425. All of the following are mentioned in the text as financial market methods that have the advantage
of being congruent with a shareholder value perspective EXCEPT:Which of the following
approaches to accessing firm brand equity’s monetary value at the firm level is most likely the best
for publicly traded companies?
a.) The market value method (moderate)
b.) The replacement cost method
c.) The earnings method
d.) The cash flow method (difficult)

2526. The _______________ views organizational brand equity as the difference between market value
and balance sheet book value, plus non-brand intangibles such as patents, know-how, and human
resources.
a.) market value method. (moderate)
b.) replacement cost method.
c.) earnings method.
d.) cash flow method.

2627. Which of the following financial market methods focuses on the anticipated cost to replace the
brand, factored by the probability of success?
a.) The market value method
b.) The replacement cost method (moderate)
c.) The earnings method
d.) The cash flow method

2728. _______________, including personality and the brand promise, is what the firm wants the brand to
mean.comprises associations the firm wants people to hold of a brand.
a.) Brand awareness
b.) Brand loyaltyimage
c.) Brand identity (moderate)
d.) Brand leveraging

2829. _______________ defines the limits on product quality, price, distribution, service, and
promotional parameters.comprises associations people actually hold of a brand.
a.) Brand awareness
b.) Brand loyaltyimage
c.) Brand identity (moderate)
97
 d.) Brand leveraging

2930. ______________ always suffers when brand identity and brand image are mismatched.
a.) Brand awareness
b.) Brand equity (moderate)
c.) Brand architecture
d.) Brand migration

3031. All of the following are ways in which a firm earns high brand loyalty EXCEPT:
a.) Selecting the right brand identity for its target market and consistently executing on that
identity
b.) Ensuring that the brand identity motivates firm employees and third-party organizations, like
advertising agencies, to deliver on that brand identity
c.) All of the selections represent ways a firm earns high brand loyalty. (moderate)
d.) Continously mMeasuring customer satisfaction with the brand on an ongoing basis and making
the necessary course corrections

3312. The key to sustaining a strong brand is continual assessment of ______________.

a.) cash flow
b.) company profitability
c.) competitor pricing
d.) brand health (moderate)

3233. All of the following are types of measures that are part of a balanced scorecard approach and the
sort of data required EXCEPT:
a.) Purchasing and sales data
b.) Perceptual data
c.) Time series analysis (moderate)
d.) Profitability

3334. All of the following measures are examples of the purchasing and sales brand health check measure
EXCEPT:
a.) Market share
b.) Uniqueness (moderate)
c.) Market depth
d.) Market breadth

3435. Which of the following is NOT a brand health check measure that relates to perception?
a.) Awareness
b.) Brand image
c.) Value
d.) Market breadth (difficult)

3536. All of the following measures are examples of the marketing support that a brand health check
measures EXCEPT:
a.) Advertising
b.) Distribution
c.) Relative price
d.) Brand image (moderate)

3637. _________________ is the firm’s organizing structure for its multiple brands.
a.) Brand health
b.) Brand architecture (moderate)
c.) Brand awareness
d.) Brand equity

98
3738. Which of the following does NOT represent an advantage of using umbrella branding?
a.) Intra-firm competition (moderate)
b.) Positive customer experience
c.) Ability to transfer positive associations
d.) Scale economies

3839. All of the following are advantages for using a multi-branding strategy EXCEPT:
a.) Targeting and positioning
b.) Scale economies (moderate)
c.) Minimizing transfer of negative associations
d.) Intra-firm competition

4039. Which of the following does NOT represent an argument for global brands?_____________
represents the brand’s balance sheet.
a.) CostCustomer brand equity
b.) GrowthUmbrella branding
c.) Heterogeneity of customer tastesFirm brand equity (moderate)
d.) Aspirational valuesBrand personality

4041. The major argument against pursuing a global branding strategy concerns
______________.______________ compare the brand against historical trends and benchmark
competing brands.
a.) costBrand architecture
b.) profitabilityBrand broadening
c.) economies of scaleBrand leveraging
d.) segmentation and positioningBrand health checks (moderate)

4142. _________________ occurs when the firm undertakes a brand extension.

a.) Brand awareness
b.) Brand equity
c.) Brand measuring
d.) Brand leveraging (moderate)

4243. All of the following are reasons that brand extensions tend to fail EXCEPT:
a.) The brand has a unique image and associations that do not transfer.
b.) The new product class has a dominant competitor.
c.) Associations between the brand and product extension are obvious. (difficult)
d.) The positioning is confusing or inconsistent.

4344. A ________________ is a firm adding a new but similar product to its product line and using the
same brand name.
a.) virtual brand
b.) flanker brand
c.) line extension (moderate)
d.) new product

4445. The various colors and flavors of Kwality Walls & Vicks being offered in several sizes, shapes, and
physical forms are examples of _________________.
a.) line extensions (moderate)
b.) virtual brands
c.) flanker brands
d.) new products

4546. A ________________ is a firm adding a new, yet similar, product but developing a new brand or a
distinguishing sub-brand.
a.) virtual brand
99
 b.) flanker brand (moderate)
c.) line extension
d.) new product

4647. Intel introducing Centrino Celeron to protect Pentium is an example of a _________________.

a.) flanker brand (moderate)
b.) virtual brand
c.) line extension
d.) new product

4748. In a(n) _______________ strategy, the firm selects an individual brand name or names for each of
the various product categories in which it competes.
a.) umbrella branding
b.) multibranding (moderate)
c.) skimming
d.) penetration

4849. An example of a company pursuing a multibranding strategy is _______________.

a.) Yamaha
b.) Procter & Gamble (easy)
c.) Microsoft
d.) Dell Computer

4950. According to the text, a firm pursuing a(n) _______________ strategy employs a single brand, such
as a corporate brand or a family brandemphasizes a monolithic brand for several products or
product lines.
a.) umbrella branding (moderate)
b.) multibranding
c.) skimming
d.) penetration

5501. An example of a company pursuing a(n) _______________ strategy is Yamaha, which sells a
variety of electronic instruments, traditional instruments, and even Grand Prix engines under its
company name.
a.) multibranding
b.) skimming
c.) umbrella branding (moderate)
d.) penetration

5152. In favor of _______________, the firm may enjoy economies of scale in advertising and promotion
for an individual brand.
a.) multibranding
b.) skimming
c.) umbrella branding (moderate)
d.) penetration

5253. According to the text, repositioning can be achieved in any of the following three basic ways
EXCEPT:
a.) Reaching new and attractiveTargeting new market segments
b.) Harvesting the business (difficult)
c.) Changing associations or adding new associations
d.) Altering the competitive target

5354. According to the text, _______________ is the prime means of brand revitalization.
a.) concentration
b.) segmentation
100
 c.) repositioning (moderate)
d.) diversification

5455. All of the following are mentioned in the text as arguments in favor of developing global brands
EXCEPT:______________ pre-empts the need to revitalize a brand.
a.) Consumer tastes are becoming more heterogeneous. Continuous innovation
(difficultmoderate)
b.) Efficiency in communication is enhanced.Price penetration
c.) Economies of scale in advertising, promotional materials, and packaging can be
secured.Umbrella branding
d.) The brand may provide important national associations that have global appeal.Price skimming

55. Which of the following is NOT mentioned in the text as a “new way” to viewing the
management of brands?
e.) Branding is a multisensory experience.
f.) Corporate branding is recognized as an important asset.
g.) Brand proliferation is common. (difficult)
h.) Global brands are becoming increasingly prominent.

Essay Questions

56. In a short essay, list and discuss the two types of values a brand gives to customers.

Answer
a.) Pre-purchase equity - the brand provides customers with information leading to either
approaching or avoiding behavior. For example, because of information contained in brand
names or other signifiers, positive or negative attitudes toward brand alternatives reduce search
costs by identifying specific products within a product group. Such identification may lead
directly to approaching or avoiding behavior.
b.) Post-purchase equity - the brand offers psychological benefits, such as status, positive feelings
associated with consumption, and assurance that the product will continue to deliver functional
benefits at expected ownership costs. The brand has long-lasting importance over the buyer’s
ownership span, particularly if its use or possession is evident to others.
(moderate)

57. In a short essay, discuss the concepts of firm brand equity and customer brand equity.

Answer
a.) Firm brand equity is related to the brand’s ability to attract customers, now and in the future;
hence, the firm receives a series of cash flow streams. Firm brand equity is not constrained by
current products, product lines, or by current customers. One of the major contributions of this
equity concept is that it both admits and endorses the notion that the brand may have customer-
attracting properties in its own right, over and above any particular product or set of products to
which it is currently attached.
b.) Customer brand equity is the value that an individual customer receives from a branded product
or service, over and above the value received from an identical, unbranded product or service.
This value may be greater than the price difference between the branded and generic product, as
individual customers may be willing to pay more than the asking price for the branded product.
(moderate)

58. In a short essay, list and discuss the four types of measures that are a part of a balanced scorecard
and the types of measures required.

Answer

101
 a.) Purchasing and sales data the firm secures from its accounting and CRM systems and industry-
focused research suppliers
b.) Perceptual data secured from survey research
c.) Marketing support data secured from the firm’s accounting and business intelligence systems
and industry-focused suppliers
d.) Profitability secured from the firm’s accounting system
(moderate)

59. In a short essay, discuss the difference between a line extension and a flanker brand. Give an
example of each to support your answer.

Answer
a.) Line extension – the firm adds a new but similar product to its product line and uses the same
brand name. Kwality Walls ice cream comes in various colors and flavors, all under the Kwality
Walls brand. Vicks offers products in several sizes, shapes, and physical forms. National
Geographic added National Geographic Little Kids.
b.) Flanker brand – the firm adds a new, yet similar, product but develops a new brand or a
distinguishing sub-brand. Lower-price defender brands often protect premium-priced high-quality
brands from price competition. Hanes introduced No Nonsense pantyhose to protect L’Eggs;
P&G’s Luvs protected Pampers from private-label diapers; Intel introduced Celeron to protect
Pentium.
(moderate)

60. In a short essay, discuss umbrella and multibranding strategies. Include specific examples to
support your answer.

Answer
a.) In a multibranding strategy, the firm selects an individual brand name or names for each of the
various product categories in which it competes. As a result of this strategy, target customers
may have a high recognition of the firm’s various brands, but be relatively unaware of the firm
itself. An example of a firm pursuing a multibranding strategy is Procter & Gamble. Among
P&G’s brands are Sure (underarm deodorant), Crest (toothpaste), Tide (laundry detergent),
Cascade (dishwater detergent), and Pringles (snack food).Bounty, Crest, Duracell, Gillette,
Pampers, Tide and others.
b.) By contrast, a firm pursuing an umbrella branding strategy employs a single brand: either a
corporate brand like IBM and Sony or a family brand like Chevrolet and PlymouthToyota for
its various products. An example of a firm pursuing an umbrella branding strategy is Yamaha.
It sells a variety of electronic musical instruments, such as keyboards and guitars, traditional
instruments such as pianos, motorcycles, and even Grand Prix engines under its company name.
(easy)

102