Strategic Brand Management 1
Strategic Brand Management 1
Strategic Brand Management 1
MANAGEMENT
Prepared By
BRAND MANAGEMENT
LESSON 1
THE MARKET AND BRAND BASICS 03
LESSON 2
BRAND EVOLUTION AND VALUE OF BRANDS 37
LESSON 3
THE BRAND AND THE CONSUMER 65
PART 1 : BASICS OF BRAND
MANAGEMENT
Introduction
The study of brand can never be underestimated .The study of brand should
always be given priority as this will help us in improving the product and will build
a better brand image of the product in the market.
In this part the whole content has been divided into three chapters/Lessons.
Chapter 1 discusses about the market and brand basics, Chapter 2 discusses about
brand evolution and value of brands whereas Chapter 3 discusses about the brand
and the consumer. In Chapter 1 the topics covered are various competitive forces in
market, the competitive strategies for Market Leaders, Basics of Branding,
Definitions of Brands, the characteristics of a Brand, Brands and Products,
Establishing a Brand, Benefits of a Strong Brand, The 3 Cs of Branding, Important
factors about Branding. In Chapter 2 the sub topics covered are understanding of
brand evolution, understanding of the branding process, Value of Brands, The
Importance of Brand Planning, Issues Influencing Brand Potential, Eight
Dimensions of Brands. In Unit 3 the sub topics covered are, Why it is Important to
create Powerful Brands, The Nature of Relationships with Customers, The
Organization's Marketing Assets, The Importance of a Brand, The Brand –
Customer Relationship, The Consumer Mindset.
This part is going to be of great help for the readers of management who wish
to build their career in this field and want to be an entrepreneur of future.
Objective
After learning this part, you will be able to understand:
Market Environment
Benefits of a Brand.
1
Basics of 3 Cs of Branding
Brand
Process and planning of branding.
Management
Structure
LESSON 1: The Market and Brand Basics
LESSON 2: Brand Evolution and Value of
LESSON 3: The Brand & the Consumer
2
LESSON 1: THE MARKET AND BRAND BASICS
Structure
1.0 Learning Objectives
1.1 Introduction
1.15 Glossary
1.16 Assignment
1.17 Activities
3
Basics of What are the basics of Brands?
Brand
What are the definitions of Brands?
Management
Introduction to Brands
1.1 Introduction
It has never been clearer that in this shrinking world, countries and regions
and cities have to compete with each other – for tourism, for inward investment, for
aid, for membership of the supranational groups, for buyers of their products and
services, for talent. So there‘s hardly a place left that isn‘t thinking hard about its
brand image, and most are in need of clear, realistic strategies for communicating
and promoting themselves, their culture, their exports, their acts of policy and their
contribution to the global community.
Which consultants or agencies will ultimately lead the field in managing and
promoting these hugely complex and often contradictory mega brands. Is promoting
a country more about policy, management consultancy, public relations, marketing,
CRM, advertising or brand strategy? Or is it a combination of everything that
working with companies has taught us in the last fifty years?
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The Market
How do we manage this? and Brand
Basics
What are the tools and techniques to use?
Here you can read about successful brand management and what worked for
other brands in different situations. You can learn the principles and practices of
successful brand management – and you can unlock the potential of your brand and
apply proven tools and techniques. Here you are provided with proven tools and
techniques - and a complete brand management process - to help you unlock the
value of your brand.
Levi Strauss saw its US sales drop from a peak of $7.1 billion in 1996 to
around $4 billion in 2003 largely due to fierce competition. Its jeans brands,
exemplified by the classic 501, were being hit from all sides: above from trendy,
high-end designer lines such as Calvin Klein, Tommy Hilfiger and GAP; below
from popular, lower-priced private labels such as J C Penny‘s Arizona, and Sears‘
Canyon River Blues; from one side by traditional, entrenched brands such as
Wranglers and urban Lee‘s; and from the other side by hip, youthful lines such as
American Eagle, Bugle Boy, JNCO, Lucky and Diesel. To better compete, Levi‘s
introduced the Signature line to be sold at discount stores such as Wal-Mart and the
more expensive Premium Red Tab line to be sold at upscale department stores such
as Nordstorm and Neiman Marcus. Many marketing experts wondered, however, if
it was too little too late and if the brand would ever reclaim its lofty position. In
India, however, the brand Levi‘s is on the upswing, having reached its number one
position as the most admired jeanwear brand at the Lycra Images fashion Awards
in 2006.
To effectively devise and implement the best possible brand positioning
strategies, companies must pay keen attention to their competitors. Markets have
become too competitive to just focus on customer alone.
Competitive Forces
Michael Porter has identified 5 forces that determine the intrinsic log-run
attractiveness of a market or market segment:
5
Basics of Threat of intense segment rivalry: A segment is unattractive if it already
Brand contains numerous, strong or aggressive competitors. It is even more
Management unattractive if it is stable or declining, if plant capacity additions are done in
large increments, if fixed costs are high, if exit barriers are high, or if
competitors have high stakes in staying in the segment. These conditions will
lead to frequent price wars, advertising battles and new- product introductions
and will make it expensive to compete. The cellular phone market has seen
fierce competition due to segment rivalry.
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The Market
have the least power to negotiate or switch suppliers. A better defense consists and Brand
of developing superior offers that strong buyers cannot refuse. Basics
Identifying Competitors
A simplistic way of identifying competition is that Unilever competes with
Procter & Gamble, Sony in India with LG, Onida, BPL and so on. However the
range of a company‘s actual and potential competitors in reality is much broader. A
soft drink company competes with other liquids and thirst-drink quenchers for
customers‘ throat-share; a TV company competes with ideas like vacation for the
family or other gifts for loved ones for a share of customers‘ discretionary income.
Also a company is more likely to be hurt by emerging competitors‘ or new
technologies than by current competitors.
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Basics of The market concept of competition reveals a broader set of actual and
Brand potential competitors.
Management
Analyzing Competitors
Once accompany identifies its primary competitors, it must ascertain their
strategies, objectives, strengths and weaknesses.
b. fragment
Many industries contain one firm that is the acknowledged market leader, that
has the largest market share in the relevant product market, and usually leads the
firms in price changes, new-product introductions, distribution coverage and
promotional intensity. Some well-known market leaders are Microsoft (computer
software), Intel (microprocessors), Gillette (razor blades), LG (consumer
electronics in India) and Visa (credit cards).
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The Market
Expanding the total market and Brand
The dominant firm gains the most when the total market expands. For Basics
expanding the total market, the market leader should look for new users, uses and
usage of its products.
9
Basics of Jeff Bezos, founder of Amazon.com, strongly favors a customer-
Brand centeredorientation: ―Amazon.com‘s mantra has been that we are going to obsess
Management over our customers and not our competitors. We watch our competitors, learn from
them, see the things that they (were doing for customers) and copy those things as
much as we can. But we are never going to obsess over them‖.
a. leader
b. bankrupt
2. What can the market leader do to defend its terrain? The most constructive
response is continuous _
a. Efforts
b. innovation
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The Market
than just creating a way to identify a product or company. So we can say that and Brand
branding today is used to create emotional attachment to products and companies. Basics
Branding efforts create a feeling of involvement, a sense of higher quality, and an
aura of intangible qualities that surround the brand name, mark, or symbol.
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Basics of
Brand Check your progress 3
Management
1. We can say that today is used to create emotional attachment to
products and companies.
a. Competition
b. Branding
a. intangible
b. tangible
A product, but one that adds other dimensions that differentiate it in some
way from other products designed to satisfy the same need.
-Rational and tangible
-Symbolic, emotional and intangible.
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The Market
―A name, term, sign, symbol or design, or a combination of these, that is and Brand
intended to identify the goods and services of one business or group of Basics
businesses and to differentiate them from those of competitors‖.
There is plenty of evidence to prove that customers will pay a substantial price
premium for a good brand and remain loyal to that brand. It is important, therefore,
to understand what brands are and why they are important. McDonald sums this up
nicely in the following quote emphasizing the importance of brands:
―…it is not factories that make profits, but relationships with customers, and
it is company and brand names which secure those relationships‖
Businesses that invest in and sustain leading brands prosper whereas those
that fail are left to fight for the lower profits available in commodity markets.
Three other important terms relating to brands should be defined at this
stage:
Brands are rarely developed in isolation. They normally fall within a business‘
product line or product group.
A product line is a group of brands that are closely related in terms of their
functions and the benefits they provide. A good example would be the range of
desktop and laptop computers manufactured by Dell.
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Basics of Brand image is defined as consumers‘ perceptions as reflected by the
Brand associations they hold in their minds when they think of your brand.
Management
Brand awareness is when people recognize your brand as yours.
This does not necessarily mean they prefer your brand (brand preference),
attach a high value to, or associate any superior attributes to your brand, it just
means they recognize your brand and can identify it under different conditions.
Brand awareness consists of both brand recognition, which is the ability of
consumers to confirm that they have previously been exposed to your brand, and
brand recall, which reflects the ability of consumers to name your brand when given
the product category, category need, or some other similar cue. Aided awareness
occurs when you show or read a list of brands and the person expresses familiarity
with your brand only after they hear or see it. Top-of-mind awareness occurs when
you ask a person to name brands within a product category and your brand pops up
first on the list.
When you think about fast foods and Luxury cars, Mc Donald‘s and Mercedes
Benz come to mind? These brands enjoy strong top-of-mind awareness in their
respective categories.
b. Products
b. Isolation.
Employees
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The Market
Customers and Brand
Basics
Stock/Share Holders
Suppliers
Intermediaries
Opinion Leaders
Local Communities
Employees - the more your employees value your brands and understand
what to do to build them, the more your customers, suppliers, local
communities and opinion leaders will value them. The more attractive your
brands are to potential employees, the more they are likely to want to work
for you.
Customers - the more your customers value your brand, the more they will
buy your products and services, and recommend them to other people. They
will also pay a premium for them and make the lives of your employees easier.
This, in turn, will enhance the value of your brands to prospective purchasers
and licensees. Research has shown that strong brands are more resistant to
crises of reputation.
Stock/share holders- strong brands multiply the asset value of your company
(90% of the asset value of some major corporations lies in their intellectual
property), and assure them that your company has a profitable future. They
also allow you to afford to give competitive dividends to your current
stock/share holders.
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Basics of Opinion leaders - the media, politicians and non-government organizations
Brand are more respectful of strong brands.
Management
Local communities - supportive local authorities can make your life easier
in many ways, and offer you better deals, if you have prestigious brands. Your
local communities provide you with your work force and can be highly
disruptive if they perceive you as damaging their environment.
2. The your customers value your brand, the more they will buy your
products and services.
a. more
b. less
Generic
Expected
Augmented
Potential
The generic level is the commodity form that meets the buyer, or user‘s basic
needs, for example the car satisfying transportation need. This is the easiest
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The Market
aspect for competitors to copy and consequently successful brands have added
and Brand
values over and above this at the expected level. Basics
Within the expected level, the commodity is value engineered to satisfy a
specific target‘s minimum purchase conditions, such as functional capabilities,
availability, pricing, etc. As more buyers enter the market and as repeat buying
occurs, the brand would evolve through a better matching of resources to meet
customers‘ needs (e.g; enhanced‘ customer service).
With even more experience of the brand, and therefore with a greater
tendency to be more critical, it is only creativity that limits the extent to which the
brand can mature to the potential level. For example, grocery retail buyers once
regarded the Nestle confectionery brands as having reached the zenith of the
augmented stage. To counter the threat of their brands slipping back to the expected
brand, level, and therefore‘ having to fight on price, Nestle shifted their brands to
the potential level by developing software for retailers to manage confectionery
shelf space to maximize profitability.
Experienced consumers recognize that competing items are often similar in
terms of product formulation and that brand owners are no longer focusing only on
rational functional issues, but are addressing the potential level of brands.
We can define Brands according to the following dimensions:
1. Its central organizing thought - defining it for internal & stakeholder use in
one sentence
2. Its slogan - defining it for use with customers in one sentence
3. Its personality - what would it be like if it were a human being?
5. Its tastes/appearance - what does it look like? What does it sound like? What
does it like and dislike?
6. Its heritage - what are the stories you tell about how it all came about/what
sort of brand it is?
7. Its emotional benefits – how it avoids/reduces pain or increases pleasure
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Basics of 8. Its hard benefits - the ―pencil sell‖
Brand
Brands need to provide customers with a consistent, compelling experience
Management
in order not to confuse them, as confusion leads to doubt. Everyone associated with
the brand must understand its key dimensions in order to deliver this consistent
experience, and it helps if customers can be given a short slogan, which
encapsulates the essence of the brand.
2. Slogan
How are you going to describe the essence of the brand to your customers in
one short, memorable, and motivating sentence?
This should hint at the central organizing thought, without necessarily
stating it.
As an example, the central organizing thought of the BMW brand is
―competitive achievement‖, but the slogan is ―the ultimate driving machine‖.
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The Market
5. Tastes/Appearance and Brand
What does the brand like? What does it look like? What does it wear? How Basics
does it speak?
This will include the iconography of the brand - the icons, the symbols, the
trade dress, the typeface, and the look and feel.
6. Heritage
All great brands have stories about them. Some are favorable, some are less
favorable, but all of them work to explain what the brand is all about. Telling stories
about the brand is one of the strongest ways of communicating the essence of your
brand.
7. Emotional Benefits
What does the brand do for its customers?
These can usually be classified into:
Avoids pain
Reduces pain
Gives pleasure
8. Hard Benefits
What does the brand offer its customers in tangible, quantifiable terms?
These are the benefits as in ―Features, Advantages and Benefits‖.
Strategic awareness occurs when not only does the person recognize your
brand, but they also understand the distinctive qualities that make it better than the
competition. Strategic awareness occurs when you have differentiated your brand
in the mind of your market. This distinction as to why your brand is unique in your
category is also referred to as your Unique Selling Proposition or USP. Your USP
tells your target market what you do and stand for that is different from all of your
competitors.
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Basics of unique about your brand, connecting emotionally with your brand, making a
Brand decision that your brand is superior to others for some reason or combination of
Management reasons, and choosing it over competing brands.
You cannot build a strong brand solely through advertising.
Branding is also more than a logo, a color scheme, and a catchy tag line. While
these all are important components in branding, they are simply tactical tools that
help establish and build the brand.
Three other important terms relating to brands should be defined at this stage:
Brand equity
―Brand equity‖ refers to the value of a brand. Brand equity is based on the
extent to which the brand has high brand loyalty, name awareness, perceived quality
and strong product associations. Brand equity also includes other
―intangible‖ assets such as patents, trademarks and channel relationships.
Brand Equity is the sum total of all the different values people attach to the
brand, or the holistic value of the brand to its owner as a corporate asset.
Brand equity can include: the monetary value or the amount of additional
income expected from a branded product over and above what might be expected
from an identical, but unbranded product; the intangible value associated with the
product that can not be accounted for by price or features; and the perceived quality
attributed to the product independent of its physical features.
A brand is nearly worthless unless it enjoys some equity in the marketplace.
Without brand equity, you simply have a commodity product.
Brand image
―Brand image‖ refers to the set of beliefs that customers hold about a
particular brand. These are important to develop well since a negative brand image
cans be very difficult to shake off.
Brand extension
―Brand extension‖ refers to the use of a successful brand name to launch anew
or modified product in a new market. Virgin is perhaps the best example of how
brand extension can be applied into quite diverse and distinct markets.
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The Market
Check your progress 6 and Brand
Basics
1. With increased experience, buyers and users become more .
a. Sophisticated
b. Confusing
b. Products
b. Oftenly
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Basics of
Brand 1.9 Establishing a Brand
Management
Public relations are the way a strong brand is truly established and advertising
is how the brand is maintained. If a brand is successful in making a connection with
people and communicating its distinct advantage, people will want to tell others
about it and word-of-mouth advertising will develop naturally- not to mention
writers in the press will want to write about the brand. Once that type of
differentiation is established in the market‘s mind, advertising can help maintain
and shape the brand.
So, branding is all about creating singular distinction, strategic awareness, and
differentiation in the mind of the target market-not just awareness. When you have
been successful, you will start building equity for your brand.
Building a brand
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The Market
Points of Parity and Brand
Discussion of strategic awareness, points of singular distinction, and brand Basics
equity would not be complete without discussion of brand points of parity. Points
of parity are those associations that are often shared by competing brands.
Consumers view these associations as being necessary to be considered a legitimate
product offering within a given category. Points of parity are necessary for your
brand but are not sufficient conditions for brand choice.
For example, Maruti might produce a wonderful new automobile that uses
advanced global positioning and sensor technologies that render a driver obsolete
by automatically routing the car, adjusting speed for traffic conditions, recognizing
and complying with all traffic laws, and delivering passengers and cargo to the
proper destination without the need for operator intervention. They have invented
the first car with functional autopilot. This is a strong position and unique selling
proposition.
However, unless they have fully considered their brand‘s points of parity with
other products in the category, they probably will not meet with success. Consumers
might expect that at minimum Maruti‘s automobile have four wheels with rubber,
inflatable tires, be street legal, run on a widely-available fuel source, be able to
operate during both night and day in most weather conditions, seat at least two
people comfortably with luggage, be able to operate on existing roads and
highways, and provide a fair level of personal safely to occupants. If their
automobile does not possess these points of parity with competing brands, then it
might be too different and might not be seen as a viable choice or a strong brand.
The lesson here is that differentiation and singular distinction are necessary
for strong brands, but they do not solely make for a strong brand. Your brand must
also measure up well against the competition on expected criteria so as to neutralize
those attributes.
Once you have met the points of parity requirement and then you provide a
unique selling proposition and hold a strong, defensible position, then you have the
makings of a very strong brand.
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Basics of about quality, image, lifestyle, and status. It is precisely because brands represent
Brand intangible qualities that the term is often hard to define.
Management
Intangible qualities, perceptions, and feelings are often hard to grasp and
clearly describe. Brands create a perception in the mind of the customer that there
is no other product or service on the market that is quite like yours. A brand
promises to deliver value upon which consumers and prospective purchasers can
rely to be consistent over long periods of time.
You as a Brand
First of all, you must understand that you are a brand. Your name and who
you are is your personal brand. The brand called ―you‖. The issue then is not
whether you have a brand; the issue is how well your brand is managed.
Brand Management
If a brand is not effectively managed then a perception can be created in the
mind of your market that you do not necessarily desire. Branding is all about
perception. Brand management recognizes that your market‘s perceptions may be
different from what you desire while it attempts to shape those perceptions and
adjust the branding strategy to ensure the market‘s perceptions are exactly what you
intend.
So, you may now have a better understanding of what a brand is and why
awareness about your brand does not necessarily mean your brand enjoys high
brand equity in the marketplace. Brand management is all about shaping and
managing perceptions.
b. Six
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The Market
1.10 Benefits of a Strong Brand and Brand
Basics
Here are just a few benefits you will enjoy when you create a strong brand:
A strong brand influences the buying decision and shapes the ownership
experience.
A strong brand can command a premium price and maximize the number of
units that can be sold at that premium.
Branding will help you ―fence off‖ your customers from the competition
and protect your market share while building mind share. Once you have mind
share, your customers will automatically think of you first when they think of
your product category.
Competitors may be able to copy your products, your patents will someday
expire, trade secrets will leak to the competition, your proprietary manufacturing
plant will eventually become obsolete, but your brand will live on and continue to
be uniquely yours. In fact, a strong brand name may be your most valuable asset.
Brands help people connect with one another.
Have you ever witnessed the obvious bond between people using the same
brand of product? If a person wearing a Benetton T-shirt finds another person
wearing a Benetton product, she will have instant rapport with her and
immediately begin talking about their experiences with the brand. How is it
that we can feel such a connection with complete strangers? The answer lies
in the psychological connection people have with a particular brand.
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Basics of value of your company. A strong brand helps you sell value and the
Brand intangibles that surround your products.
Management
A strong brand signals that you want to build customer loyalty, not just sell
product. A strong branding campaign will also signal that you are serious
about marketing and that you intend to be around for a while. A brand
impresses your firm‘s identity upon potential customers, not necessarily to
capture an immediate sale but rather to build a lasting impression of you and
your products.
A brand will help you articulate your company‘s values and explain why you
are competing in your market.
b. Weak
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The Market
Clarity and Brand
Basics
Strong brands are clear about what they are and what they are not. They
understand their unique promise of value. And this promise of value sets them apart
from their competitors.
It differentiates them and allows them to attract and build loyalty among a
desirable set of consumers. Volvo, for example, is clear about their commitment to
safety and security. They are not about speedy sports cars, or about small economy
cars, or about luxury cars.
They build cars for families. Cars those are safe. And they clearly focus their
communication activities on this differentiation.
There are several retailers who will sell you a black Armani suit; but only
Nordstrom will turn it into an experience you will talk about with friends and
colleagues.
This clarity guides Nordstrom as they build on their current business. When
they developed their on-line store, they did so in a way to ensure that customers
would experience the same level of service they have come to expect from the
Nordstrom brand.
Consistency
In addition to being clear about who they are, strong brands are also
consistent. They are always what they say they are.
For Volvo, they are always about safety. They don‘t change their focus from
model to model. When new editions come out each year, they are safe too. And
Volvo consistently communicates that.
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Basics of Constancy
Brand
It is not enough to be clear and consistent if you are not always visible to your
Management
target audience. Strong brands are constant; they are always there for their
customers and prospects. They don‘t go into hiding.
For Coke, the world is the target market. That is why you can‘t make it
through a day without being exposed to their bright red color or familiar script logo.
Vending machines, people carrying a coke as they walk down the street, restaurant
menus, product placement in TV shows and movies, billboards and print and TV
advertisements all scream COKE. Coke is a constant in our lives. And Coke is the
world‘s strongest brand. In building and nurturing a strong brand, you have a lot
more to think about than these three C‘s.
But no brand is truly a strong brand if it doesn‘t pass the Three C Test.
a. Unmatched
b. Low
2. For , they are always about safety. They don‘t change their focus
from model to model.
a. Suzuki
b. Volvo
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The Market
Positioning and Brand
Basics
Positioning is about the position a brand occupies in a market in the minds of
consumers. Strong brands have a clear, often unique position in the target market.
Repositioning
Repositioning occurs when a brand tries to change its market position to
reflect a change in consumer‘s tastes. This is often required when a brand has
become tired, perhaps because its original market has matured or has gone into
decline.
The repositioning of the Lucozade brand from a sweet drink for children to a
leading sports drink is one example. Take Liril as another example.
Communications
Communications also play a key role in building a successful brand. We
suggested that brand positioning is essentially about customer perceptions – with
the objective to build a clearly defined position in the minds of the target audience.
All elements of the promotional mix need to be used to develop and sustain
customer perceptions. Initially, the challenge is to build awareness, then to develop
the brand personality and reinforce the perception.
First-mover advantage
Business strategists often talk about first-mover advantage. In terms of brand
development, by ―first-mover‖ they mean that it is possible for the first successful
brand in a market to create a clear positioning in the minds of target customers
before the competition enters the market. There is plenty of evidence to support
this.
Think of some leading consumer product brands like Gillette, Coca Cola and
Sellotape that, in many ways, defined the markets they operate in and continue to
lead. However, being first into a market does not necessarily guarantee long-term
success. Competitors – drawn to the high growth and profit potential demonstrated
by the ―market-mover‖ – will enter the market and copy the best elements of
the leader‘s brand (a good example is the way that Body Shop
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Basics of developed the ―ethical‖ personal care market but were soon facing stiff
Brand competition from the major high street cosmetics retailers.
Management
Long-term perspective
This leads onto another important factor in brand-building: the need to invest
in the brand over the long-term. Building customer awareness, communicating the
brand‘s message and creating customer loyalty takes time. This means that
management must ―invest‖ in a brand, perhaps at the expense of short-term
profitability.
Internal marketing
Finally, management should ensure that the brand is marketed ―internally‖
as well as externally. By this we mean that the whole business should understand
the brand values and positioning. This is particularly important in service businesses
where a critical part of the brand value is the type and quality of service that a
customer receives.
Think of the brands that you value in the restaurant, hotel and retail sectors.
It is likely that your favorite brands invest heavily in staff training so that the face-
to-face contact that you have with the brand helps secure your loyalty.
The two options for doing this are usually called ―brand extension‖ and
―brand stretching‖.
Brand extension
Brand extension refers to the use of a successful brand name to launch a
new or modified product in a same broad market.
A successful brand helps a company enter new product categories more
easily.
For example, Fairy (owned by Unilever) was extended from a washing up
liquid brand to become a washing powder brand too.
The Lucozade brand has undergone a very successful brand extension from
children‘s health drink to an energy drink and sports drink.
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The Market
Brand stretching and Brand
Brand stretching refers to the use of an established brand name for products Basics
in unrelated markets.
o Customers will associate the quality of the established brand name with
the new product. They will be more likely to trust the new product.
o The new product will attract quicker customer awareness and
willingness to trial or sample the product.
Brand positioning
As we have argued in our other revision notes on branding, it is the ―added
value‖ or augmented elements that determine a brand‘s positioning in the market
place.
Positioning can be defined as follows:
A perceptual map defines the market in terms of the way buyers perceive
key characteristics of competing products.
The basic perceptual map that buyers use maps products in terms of their
price and quality, as illustrated below:
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Basics of
Brand
Management
Types of brand
There are two main types of brand – manufacturer brands and own-label
brands.
Manufacturer brands
Manufacturer brands are created by producers and bear their chosen brand
name. The producer is responsible for marketing the brand. The brand is owned by
the producer.
By building their brand names, manufacturers can gain widespread
distribution (for example by retailers who want to sell the brand) and build customer
loyalty (think about the manufacturer brands that you feel ―loyal‖ to).
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The Market
distributor with additional bargaining power when it comes to negotiating prices and Brand
and terms with manufacturer brands. Basics
b. Repositioning
b. positioning
Today‘s modern concept of branding grew out of the consumer packaged goods
industry and the process of branding has come to include much, much more than just
creating a way to identify a product or company. So branding today is used to create
emotional attachment to products and companies. Branding efforts create a feeling of
33
Basics of involvement, a sense of higher quality, and an aura of intangible qualities that surround
Brand the brand name, mark, or symbol.
Management
So in this part we have discussed in very detail about branding hoping it is
going to be of great help for the students.
Answers: (1-a)
Answers: (1-a)
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The Market
Check your progress 10 and Brand
Basics
Answers: (1-a), (2-b)
1.15 Glossary
1. Image - overall consumer perceptions or end user feelings toward a
company along with its products and services.
2. Corporate logo - the symbol used to identify a company and its brands,
helping to convey the overall corporate image.
3. Stimulus codability - items that easily evoke consensually held meanings
within a culture or subculture.
1.16 Assignment
1. What are the difference between a product and a brand? Give examples.
2. What are the competitive forces that are at work in the market?
1.17 Activities
1. Why are brands important? What relationship does a brand share with a
consumer?
2. List five brands and the emotional benefits they give.
3. Trace the history of ONE old brand and ONE modern brand. Point out the
differences.
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Basics of
Brand 1.19 Further Readings
Management
1. Marketing Management (Twelfth Edition) – Philip Kotler.
36
LESSON 2: BRAND EVOLUTION AND VALUE OF
BRANDS
Structure
2.0 Learning Objectives
2.1 Introduction
2.12 Activities
Brand Evolution
37
Basics of
Brand 2.1 Introduction
Management
Now at this point, it is worth appreciating how brands evolved.
This historical review shows how different types of brands evolved. There
were examples of brands being used in Greek and Roman times. With a high level
of illiteracy, shops indicating the types of goods they sold. Symbols were developed
to provide an indication for the retailer‘s specialty and thus the brand logo as a short
hand device signaling the brand‘s capability was born. Use is still made of this
aspect of branding, as in the case, for example, of the poised jaguar indicating the
power developed by the Jaguar brand.
The next landmark in the evolution of brands was associated with the growth
of cattle farming in the New World of North America. Cattle Owners wanted to
make it clear to other potentially interested parties which animals they owned. By
using a red hot iron, with a they left a clear imprint on the skin of each of each of
their animals. This process appears to have been taken by many as the basis for the
meaning of the term brand, defined by the Oxford English dictionary as ‗to mark
indelibly as proof of ownership, as a sign of quality, or for any other purpose‘. This
view of the purpose of brands as being identifying (differentiating) devices has
remained with us until today. What is surprising is that in an enlightened era aware
of the much broader strategic interpretation of brands, many of today‘s leading
marketing textbooks still adhere to the brand solely as a differentiating device, for
example, ‗a name, term, sign, symbol, or a combination of them, which is intended
to identify the goods or services of one seller or group of sellers and to differentiate
them from those of the competitors‘. Towards the end of the nineteenth such a view
was justified, as the next few paragraphs clarify.
38
Brand
Having to meet wholesalers‘ demands for low prices; Evolution and
Value of
Spending minimal amounts on advertising; Brands
39
Basics of the 1950s and collaborated with specific wholesalers in symbol/voluntary groups
Brand (e.g. Mace-Wavey Line, Spar). With a significant element of their purchasing
Management channeled through a central wholesaler, they were able to achieve more favorable
terms from manufacturers. A further consequence of this allegiance was the
introduction of symbol/voluntary brands, designed to compete against the multiple
brands. It should also be recognized that the once powerful retailing force of the
Co-op, with its not-insignificant farming and processing plants, also has a long
history of marketing its Co-op brands (albeit with a variety of brand names).
Unfortunately, due to the Co-op‘s inability to adapt to the changing retailing
environment, this sector‘s.importance has fallen. With only an II per cent share of
the packaged grocery sector in 1988 the overall importance of the Co-op brands has
declined.
Whilst distributor brands have their origin in the grocery sector, however,
where in 1988 they accounted for 28 per cent of packaged grocery sales, it should
not be thought that this is their sole domain.
For example, it is estimated that in 1989, over 50 per cent of footwear sales
and almost half of all men swear sales are accounted for by distributor brands. In
the DIY goods sector, approximately a quarter of sales are from distributor brands
and a fifth of furniture and floor covering sales are distributor brands. In the retail
banking sector, where the service ‗manufacturer‘ is also the distributor, distributor
brands are common (e.g. Midland‘s Meridian Multi service Account). In the
industrial sector, it is less common to see distributor brands. Due to the considerable
investment in production, the need to appreciate the technology and the greater
reliance upon direct delivery, with less reliance on distributors.
In the packaged grocery sector, where the first alternative tier to manufacturer
brands appeared, innovative marketing in the late 1970s also led to a further
alternative - generics. In fact, the term ‗generics‘ may be a misnomer since it
implies a return to the days when retailers sold commodities rather than brands. This
trend was originally started by CARREFOUR in 1976, when they launched fifty
‗produitslibres‘ in France, promoted as brand-free products. Some UK grocery
retailers noted the initial success of these lines and thought the time was right to
follow in the UK. At the time there was growing consumer skepticism about the
price premium being paid for branding and with consumer‘s becoming more
confident about selecting what in many cases were better quality distributor brands.
It was thought that in a harsh economic environment, generics would be a popular
alternative to manufacturer brands, further increasing distributors‘ control of their
product mix.
40
Brand
The trust behind generics were that of cutting out any superfluous frills Evolution and
surrounding the product. They were distinguishable by their plain packaging, with Value of
Brands
the marketing emphasis placed on the content, rather than on the promotional or
pack features. On average, generics were priced 40 per cent lower than the brand
leader and approximately 20 per cent lower that the equivalent distributor brands.
Whilst the quality level varied by retailer, they were none the less generally inferior
to manufacturer‘s brands.
An advertising perspective
This brief historical review has shown how brands evolved and has also
briefly introduced the idea of the different types of brands. One of the weaknesses
41
Basics of with the current views on branding is that the term is used to encompass a very
Brand broad range of issues encouraging the possibility of confusion.
Management
Two well-known researchers recently pointed out that the problem with
branding is the surprising number of creative directors, planners, account handlers
and clients who have kindergarten knowledge of branding processes and
mechanisms. They are rightly critical of those who regard branding merely as a
process to ensure that the name on a product or service is highly visible. Based on
a consideration of advertisements, they classified brands into nine categories
representing a role in advertising, varying from simple through to complex branding
For example, at the simple end of the scale there are those brands which operate
through straightforward association with the advertising slogan (e.g. the classic
Schweppes). By contrast, at the most complex end of the spectrum, they identify
structural branding, in which for example, objects (scissors, hedge trimmers, etc.).
The figure below shows these researchers‘ (Langmaid and Gordon) interpretation
of brand types.
Simple
42
Brand
Evolution and
Check your progress 1 Value of
Brands
1. brands have their origin in the grocery sector.
a. retailer
b. Distributor
b. decreasing
Purchasers of a prudential insurance policy are not just buying the security of
knowing that damage to their home through unforeseen events can rapidly and
inexpensively be rectified. They are also buying the ‗corporate symbol‘ of the face
of Prudence reminding them of the added values of heritage, size and public
awareness, inspiring confidence and sustained credibility.
Likewise buying an IBM computer is not just buying a device that rapidly
computes data into a format that is more managerially useful, but is also buying the
security of a back-up facility and commitment to customer satisfaction signified by
the three letters of IBM.
While these purchasers in the consumer, service and industrial markets have
bought solutions to their individual problems, they have also paid a price premium
for the added value provided by buying brands. In addition to satisfy their core
purchase requirements, they have bought an augmented solution to their problem,
for which they perceive sufficient added value to warrant paying a premium over
other alternatives that have satisfied their buying needs.
The added values that they sought, however, were not just those provided
through the presence of a brand name as a differentiating device, or through the
presence of brand names to recall powerful advert. Instead, they perceived a total
43
Basics of entity, the brand which is the result of a coherent marketing approach which uses
Brand all elements of the marketing-mix. A man does not give a woman a box of branded
Management chocolates because she is hungry. Instead, he selects a brand that communicates
something about his relationship with her. This, he hopes, will be recognized
through - the pack-design,"her recall" of a relevant advertising message, the quality
of the contents, her chiding of him for the price he paid and her appreciation of the
effort he took to find a retailer specializing in stocking such an exclusive brand. The
same goes for a woman buying a man a special box of cigars.
These examples show that thinking of branding as being ‗to do with naming
products‘, or ‗about getting the right promotion with the name prominently
displayed‘ of getting the design right ‗, is too myopic. In the mid 19805, we came
across Scottowels when we were doing some work in the kitchen towels market.
Managers in the company thought that this was a branded kitchen towel, but
consumers perceived this as little more than another kitchen towel with a name
added - one stage removed from being a commodity. It had a brand name, but
because the rest of the marketing mix was neglected, it had to fight for shelf space
on the basis of price and was ultimately doomed because of the vicious circle driven
by minimum value leading to low price.
There are hundreds of examples of well-known brand names that have failed
commercially. There are even some which are reviled by the public. Such
unsuccessful brands are examples of failure to integrate all the elements of
marketing in a coherent way. Thus, branding is a powerful marketing concept that
does not just focus on one element of the marketing mix but represents the result of
a carefully conceived array of marketing across the spectrum of marketing mix,
directed towards making the buyer recognize relevant added values that are unique
when compared with competing products and services and which are difficult for
competitors to emulate. The purpose of branding is to facilitate the organization‘s
task of getting and maintaining a loyal customer base in a cost effective manner to
achieve the highest possible return on investment. In other words, branding should
not be regarded as a tactical tool directed towards one element of the marketing
mix; but rather should be seen as the result of strategic thinking, integrating a
marketing programmed across the complete marketing mix.
44
Brand
services. Were this not so, organizations such as IBM would be unable to charge Evolution and
significantly higher prices for their computers, which compete so successfully with Value of
technically more advanced machines selling at lower prices. Brands
Successful Brands
Successful brands, that is, those which are the focus of a coherent blending of
marketing resources, represent valuable marketing assets. During the 1980s the
value of brands was ironically brought to the attention of marketers by the financial
community: For example, in 1985 Reckitt and Colman acquired Airwick Industries
and put on itsbalance sheet £ 127 million as the financial value resulting from the
intangible benefits of goodwill, heritage and loyalty conveyed by the newly
acquired brand names. While this may have been one of the opening shots to make
organizations aware of the financial value of brands, it was Rank Hovis McDougal
who really brought the brand debate to life. They announced in 1988 that they had
put £678 million on their balance sheet as the valuation of their brand names. In the
same year Jacobs Suchard and Nestle fought for the ownership of Rowntree. At the
time of the takeover battle it was estimated that Rowntree‘s tangible net assets were
worth around £300 m, yet Nestle won control by paying £2.5 bn. This difference of
£2.2 bn represented the value that Nestle saw in the potential earnings of strong
brands such as Kit Kat, Polo, Quality Street and After Eight Mints, etc.
Thus, because consumers recognize and appreciate the added values of
successful brands, they are able to sustain a higher price premium over equivalent
commodity items and generally generate healthy profits.
The ultimate assessor of the real value of a brand, however, is not the
manufacturer or the distributor, but the buyer or the user. Marketers are able to
develop strategies to convey added values to purchasers, but because of what is
called the ‗perceptual process‘ the target audience may well focus on only a part of
the available information and ‗twist‘ some of the messages to make them congruent
with their prior beliefs. For example-should a wallpaper paste
45
Basics of manufacturer show an apparently incompetent DIY householder mixing paste in a
Brand television commercial in an attempt to communicate the smoothness and ease of
Management application of their brand of wallpaper paste, they run the risk of some consumers
interpreting the brand as being ‗suitable for idiots‘. This is one example of the
perceptual process.
46
Brand
brand selection process. For example, some office services managers do not just
Evolution and
consider the rational aspects of office furniture brands they are about to buy, but Value of
also seek emotional reassurance that the correct brand decision might reaffirm their Brands
continual career development or that they have not lost credibility amongst
colleagues through the wrong brand choice.
b. branding
47
Basics of offered better margins than the equivalent manufacturer‘s brand, with estimates
Brand indicating the extra profit margin to be about 5 percent more than the equivalent
Management manufacturer‘s brand.
It may be the only way of dealing with some important distributors (e.g. marks
& spencer);
b. Consumers
48
Brand
Evolution and
2.5 The Importance of Brand Planning Value of
Brands
As the previous sections of this chapter have shown, brands play a variety of
roles and for a number of reasons satisfies many different needs. They are the end
result of much effort and by implication represents a considerable investment by
the organization. With the recent interest in the balance sheet value of brands
companies are beginning to question whether their financially valuable assets in the
form of brands are being effectively used to achieve high returns on investment.
To gain the best return from their brands, firms must adopt a broad vision
about their brands and not just focus in isolation on tactical issues of design and
promotion. Instead, they need to audit the capabilities of their firm to evaluate the
external issues influencing their brand.
Brand planning is an important but time-consuming activity, which if
undertaken in a thorough manner involving company-wide discussion, will result
in a clear vision about how resources can be employed to sustain the brand‘s
differential advantage. Unfortunately, it is only a minority of organizations who
undertake thorough brand planning. Without well-structured brand plans there is
the danger of what we call brand ‗vandalism‘.
Junior brand managers are given ‗training‘ by making them responsible for
specific brands. Their planning horizons tend to be in terms of a couple of years
(i.e. the period before they move on) and their focus tends to be on the tactical issues
of advertising. Pack design and tailor-made brand promotions for the trade. At best,
these results in ‗fire fighting‘ and a defensive rather than offensive brand plan. The
core values of the brand are in danger of being diluted through excessive brand
extensions. For example, one of the key core values of the Ribena brand is vitamin
C yet by extending the brand into other fruits (e.g. Strawberry) this is weakening
the brand‘s proposition and potentially weakening the brand‘s strength.
Internally, organizations may be oblivious to the fact that they are hindering
brand development. Clearly, by not preparing well documented strategic brand
plans firms are creating their own obstacles to success. Some of the characteristics
that internally hinder any chance of brand success are:
Brand planning is based on little more than extrapolations from the previous
few years.
49
Basics of When it doesn‘t look as if the annual budget is going to be reached
Brand quarter 4 sees brand investment being cut (i.e. advertising. Market
Management research, etc.)
Brand managers see their current positions as good training grounds for no
more than two years.
Strategic thinking consists of a retreat once a year, with the advertising agency
and sales managers, to a one-day meeting concerned with next year‘s brand
plans.
New product activity consists of different pack sizes and rapidly developing
‗me- too‘ offers.
For example, the simple operation of taking a few seats out of an aircraft can
be done with confidence, as engineering are consulted about safety implications,
finance work out the long-term revenue implication, scheduling explore capacity
implications and the cabin crew adjust their in-flight service routines.
50
Brand
Check your progress 4 Evolution and
Value of
1. To gain the best return from their brands, firms must adopt a about Brands
their brands and not just focus in isolation on tactical issues of design and
promotion.
a. broad vision
b. broad mission
b. Plans
The manufacturer
It is not unusual for an organization to be underutilizing its brand assets
through an inability to recognize what is occurring inside the organization? Have
realistic, quantified. Objectives been set for each of the brands, and have they
51
Basics of been widely disseminated? Aims such as ‗to be the brand leader‘ give some
Brand indication of the threshold target, but do little in terms of stretching the use of
Management resources to achieve their full potential. Further more, they show every sign of the
executive shying away from accepting brand responsibility. Brand leadership may
result before the end of the planning horizon, but this may be because of factors that
the organization did not incorporate into their marketing audit. But luck also has a
habit of working against the player as much as working for the player.
Has the organization made full use of its internal auditing to identify what its
distinctive brand competences are, and to what extent these match the factors that
are critical for brand success? For example, Swatch recognized that amongst
fashion-conscious watch owners, its distinctive competences of design and
production could satisfy changing consumer demands for novelty watches.
Is the organization plagued by a continual desire to cut costs, without fully
appreciating why it is following this route? Has the market reached the maturity
stage, with the organization‘s brand having to compete against competitors‘ brands
on the basis of matching performance, but at a reduced price? If this is so, all aspects
of the organization‘s value chain should be geared towards cost minimization (e.g.
eliminating production inefficiencies, avoiding marginal customer accounts, having
a narrow product mix, working with long production runs, etc.). Alternatively, is
the firm‘s brand unique in some way that competitors find difficult to emulate and
for which the firm can charge a price premium (e.g. unique source of high quality
raw materials, innovative production, process, unparalleled customer service
training. acclaimed advertising, etc.). Where consumers demand a brand which has
clear benefits, the manufacturer should ensure all departments work towards
maintaining these benefits and signal this to‘ the market (e.g. by the cleanliness of
the lorries, the politeness of the telephonists, the promptness of answering a
customer enquiry, etc.) In some instances, particularly in services, the brand
planning document can overlook a link in the value chain. Resulting in some
inherent added value being diminished (e.g. an insurance broker selling reputable
quality insurance from a shabby office).
Distributors
The brand strategy of the manufacturer cannot be formulated without regard
for the distributor. Both parties rely on each other for their success and even in an
era of increasing retailer concentration, notwithstanding all the trade press hype,
there is still a recognition amongst manufacturers and distributors that long-term
brand profitability evolves through mutual support.
52
Brand
Manufacturers need to identify retailer‘s objectives and align their brands Evolution and
with those retailers whose aims most closely match their own. With the opening of Value of
Brands
European markets in 1992, some of the major multiple grocery retailers have
already set their sights on growth through market development. Involving
discussions about pan European alliances with other retailers. Brand manufacturers
who have not fully considered the implications of distributors‘ longer-term
objective are deluding themselves about the long-term viability of their own brands.
In the UK, there are numerous instances of growing retailer power, with a few
major operators controlling a significant proportion of retail sales (e.g. groceries,
DIY, jewellery, footwear). The danger of increasing retailer power is that weaker
brand manufacturers acquiesce to demands for better discounts, without fully
appreciating that the long term well-being of their brands is being undermined. It is
crucial for brand manufacturers to analyze regularly what proportion of their brand
sales go through each distributor and then for each individual distributor to assess
how important a particular manufacturer‘s brand is to them.
If this hypothetical example were for a HLL brand, it is clear that the
particular HLL brand is more reliant upon Foodworld than Foodworld is on the
particular HLL brand. Such an analysis better enables manufacturers to appreciate
which retailers are more able to exert pressure on their brand. It indicates that, if the
brand manufacturer wants to escape from a position of retailer power, they need to
consider ways of growing business for their brands in those sectors other than
Foodworld at a faster rate than is envisaged within this distributor.
When working with a distributor the brand manufacturer should take into
account whether the distributor is striving to offer a good value proposition to the
consumer (e.g. Kwik, Save, Aldi) or a value-added proposition (e.g. high quality
names at Harrods). In view of the loss of control once the manufacturer‘s brand is
in the distributor‘s domain, the brand manufacturer must annually evaluate the
degree of synergy through each particular route and be prepared to consider
changes.
What are the ideal characteristics for distributors of its brands and how well
do the actual distributors used match these criteria?
How do distributors plan to use brands to meet their objectives?
53
Basics of The brand manufacturer must have a clear idea of the importance of specific
Brand distributors for each brand.
Management
Finally manufacturers must recognize that when developing new brands,
distributors have a finite shelf space and market research must not solely address
consumer issues, but must also take into account the reaction of the trade. One
company found that a pyramid pack design researched well amongst consumers,
but on trying to sell this into the trade it failed - due to what the trade saw as
ineffective use of shelf space.
Consumers
To consumers buying is a process of problem solving. They become aware of
a problem (e.g. not yet arranged summer holidays), seek information (e.g. go to
travel agent and skim brochures), evaluate the information and then make a decision
(e.g. select three possible holidays, then try to book one through the travel agent).
The extent of this buying process varies according to purchasers‘ characteristics,
experience and the products being bought. None the less, clearly consumers have
to ‗work‘ to make a brand selection.
Brands offer consumers a means of minimizing information search and
evaluation. Through seeing a brand name which has been supported by continual
marketing activity, consumers can use this as a rapid means of interrogating
memory and if sufficient relevant information can be recalled, only minimal effort
is needed to make a purchase decision. As a consequence of this, brand strategists
should question whether they are presenting consumers with a few high quality
pieces of information, or whether they are bombarding consumers with large
quantities of information and ironically causing confusion. Likewise in business to
business markets, it is important to consider how firms make brand selections.
Not only should strategists look at the stages consumers go through in the
process of choosing brands but they also need to consider the role that brands
actually play in this process. For example, a businessperson going to an important
business presentation may feel social risk in the type of clothes he/she wears and
select a respected brand mainly as a risk-reducer. By contrast, in a different
situation, they may decide to wear a Gucci watch, because of a need to use the brand
as a device to communicate a message (e.g. success, lifestyle) to their peer group.
Likewise, one purchasing manager may buy a particular brand, since experience
has taught him that delivery is reliable, even though there is a price premium to pay.
By contrast, another purchasing manager may be more concerned about rapid career
advancement and may choose to order a different brand on the basis that he is
rewarded for minimizing unnecessary expenditure on raw
54
Brand
materials. Success depends on understanding the way purchasers interact with Evolution and
brands and employing company resources to match these needs. Value of
Brands
Competitors
Research has shown that return on investment (ROI) is related to a product‘s
share of the market. In other words products with a bigger market share yield better
returns than those with a smaller market share. Organizations with strong brands
fare better in gaining market share than those without strong brands. Thus, firms
who are brand leaders will become particularly aggressive if they see their position
being eroded by other brands. Furthermore, as larger firms are likely to have a range
of brands, backed by large resources, it is always possible for them to use one of
their brands as a loss leader to under price the smaller competitor, and once the
smaller brand falls out of the market, the brand leader can then increase prices.
Several years ago, Laker took on the major airlines when he launched his Sky train
on the lucrative trans-Atlantic route. The major players recognized the potential
danger from this ‗no-frills‘ operation and because they had a wide range of
products, they were able to compete at equally low prices, while using their other
routes to subsidize this. Without a range of brands, Laker was unable to compete
and his brand died. Comapare ―no-frills‖ Airlines Air Deccan and the market
competition when it launched.
55
Basics of
Brand Check your progress 5
Management
1 .The of the manufacturer cannot be formulated without regard for the
distributor.
a. brand strategy
b. brand development
b. Marketers
56
Brand
experienced consumers, brands succeed not only by conveying differentiation, but
Evolution and
also by being associated with added values. For example, the brand Cadbury‘s Value of
Dairy Milk not only differentiates this from other confectionery lines, but is a Brands
successful brand since it has been backed by a coherent use of resources that deliver
the added value of high quality offering with a well defined image. By contrast the
one man operation, ‗Tom‘s-taxi Service‘, is based upon branding as a
differentiating device, with little thought to communicating added values.
Small firms seem to be particularly prone to the belief that putting a name on
their product or service is all that is needed to set them apart from competitors. They
erroneously believe that branding is about having a prominent name, more often
than not based around the owner‘s name.Yet there is ample evidence that brands
fail if organizations concentrate primarily on developing a symbol or a name as a
differentiating device.
Brands will succeed if they offer unique benefits, satisfying real consumer
needs. Where an organization has reason to believe that their competitors are
marketing brands primarily as differentiating devices, there is an opportunity to
develop a strategy which gets buyers to associate relevant added values with their
brand name and hence gain a competitive advantage.
As consumers began to take for granted the fact that brands represented
consistent quality, marketers strove to establish their brands as being associated
with specific unique functional benefits.
A brief scan of advertisements today shows the different functional attributes
marketers, are trying to associate with their brand, for example: VAX, emphasizing
the –carpet -cleaning features or-its less-than-aesthetic vacuum cleaner; SEAT,
striving to convey a good value-for-money proposition; Polycell, seeking the
association of DIY simplicity; and Castrol GTX, representing ‗high technology‘
engine protection. Firms adopting the view that they are employing brands as
functional communicators; have the virtue of being customer driven, (rational)
element of the customer choice, as all products and services also have some degree
of emotional content in the buying process. For e.g. A Post Office
57
Basics of campaign run in 1990 for a predominantly functional brand, advertised the
Brand emotional dimension using the slogan ‗If you don‘t want your burning passion to
Management arrive lukewarm, send it in a Swiftpack‘.
Where consumers perceive the brand‘s value to lie more in terms of the- non
verbal communication facility (through the logo or name).they, spend time and
effort choosing brands, almost with the same care as if choosing a friend .It is now
accepted that consumers personify brands and when looking at the symbol values
of brands, they seek brands which have very clear personalities and select brands s
that best match their actual or desired self concept.
For example, in the beer market, there are only marginal product differences
between brands.
Through being a member of social groups, people learn the symbolic meaning
of brands. As they interpret the actions of their peer group, they then respond. using
brands as non-verbal communication devices (e.g. feelings, status). To capitalize on
symbolic brands, therefore, marketers must use promotional activity to
communicate the brand‘s personality and signal how consumers can use it in their
daily relationships with others. None the less, whilst there are many product fields
where this perspective of brands is useful. It must also be realized that consumers
rarely consider just the symbolic aspect of brands. Research across a wide variety
of product fields ranging from chipboard to watches, showed that
58
Brand
consumers often evaluated brands in terms of both a symbolic (emotional) and a
Evolution and
functional (rational) dimension. Marketers should, therefore, be wary of subscribing Value of
to the belief that a brand acts solely as a symbolic device. Brands
59
Basics of chunks. By continuing to increase the size of these few chunks in memory, buyers
Brand in consumer, industrial and service sectors can process information more
Management effectively. At the point of purchase, they are able to recall numerous attributes by
interrogating their memory.
There is, none the less, the danger of concentrating too heavily on the
quantity, rather than the quality of information directed at purchasers. It also ignores
the perceptual process which is used by buyers to twist information until it becomes
consistent with their prior beliefs - an error fatally overlooked by the short-lived
Strand cigarette brand.
60
Brand
tactical issues and so do not gain the best possible returns from their brands. All the
Evolution and
strategic issues associated with capitalizing on strategic branding are covered. Value of
Brands
A good example of successful branding through majoring upon a differential
advantage and ensuring the: sustainability of such an advantage was seen in a color
supplement advertisement by Sharp in 1990. This organization evaluated the forces
that could impede their electronic organizer and developed a unique position for
their brand that is difficult for competitors to copy. The technology of the IC card
gave the brand a competitive edge. In a true strategic style, the firm had developed
a brand which it had differentiated from its competitors and had used its corporate
strengths to satisfy customer need better than competitors.
b. Fail
b. Marketers
We have studied that brands succeed when marketers regard them as the end result
of a well-integrated marketing process. To view branding as naming, design or advertising,
is too myopic and such a perspective will shorten the brand‘s life expectancy. Branding is
about the communication of relevant added values for which buyers are prepared to pay a
price premium and which competitors find difficult to emulate. We even studied about the
value of brands in which we discussed the historical evolution of brands has shown that
brands initially served the roles of differentiating between competing items, representing
consistency of quality and providing legal protection from copying. With the advent of
distributors' brands, more experienced buyers and increasingly sophisticated marketing
techniques, eight different types of brands were
61
Basics of identified: a sign of ownership of the branding process; a differentiating device; a
Brand communicator of functional capability; a device which enables buyers to express something
Management about themselves; a risk-reducing device; a shorthand communication device; a legal
device; and a strategic device. To capitalize upon the asset represented by their brand, firms
need to adopt strategic brand planning as a way of life. The model shows the five main
factors that influence brand potential was reviewed. We even discussed about the brand
planning and we have know that brand planning is an important but time- consuming
activity, which, if undertaken in a thorough manner involving company-wide discussion,
will result in a clear vision about how resources can be employed to sustain the brand's
differential advantage. Unfortunately, it is only a minority of organizations who undertake
thorough brand planning. Without well-structured brand plans there is the danger of what
we call brand 'vandalism'.There are different categories of brands and has also highlighted
the inherent weaknesses of each type of brand it also talks about the typology of brands and
the importance of brands in the present day context.
So after going through this detailed discussion the readers would have got a detailed
insight of branding which is going to be of great help for them not only for them curriculum
but also in their career.
62
Brand
Check your progress 6 Evolution and
Value of
Answers: (1-a), (2-b) Brands
2.10 Glossary
1. Brands - names generally assigned to a product or service or a group of
complementary products.
2. Salient - when consumers are aware of the brand, have it in their
consideration sets (things they consider when making purchases), regard the
product and brand as a good value, buy it or use it on a regular basis, and
recommend it to other consumers.
3. Family brand - when a company offers a series or group of products under
one brand name.
4. Brand equity - a set of brand assets that add to the value assigned to a
product.
5. Market penetration - the number of households within an area that
purchased a product as a percentage of total households that bought in that
product's category.
6. Brand metrics - measures of returns on brand investments.
63
Basics of
Brand 2.11 Assignment
Management
1. How did the concept of branding evolve? Answer this referring to the
international scenario and India too.
2. What are the different types of brands? Discuss with reference to examples.
2.12 Activities
1. What is the importance of brands from a distributor and consumer
perspective?
2. Discuss the eight dimensions of brands.
3. Taking an Indian brand into consideration how many of the typologies does
the brand fit?
64
LESSON 3: THE BRAND AND THE CONSUMER
Structure
3.0 Learning Objectives
3.1 Introduction
3.11 Glossary
3.12 Assignment
3.13 Activities
65
Basics of
Brand 3.1 Introduction
Management
The relationship between a customer and a brand is an exchange relationship.
Consumers enter into a relationship on the basis of expected equity and the
desire to increase the predictability of exchange outcomes (Peterson, 1995).
The length and strength of the customer relationship is a result of the relative
value the customer perceives in the brand; in other words, the implied utility
associated with the product features, the tangible value of these features, and the
intangible value the consumer assigns to the brand name. The utility is a function
of the capacity of the brand to consistently deliver an experience in alignment with
the customer‘s expected equity.
Consequently, it reflects the convergences of the customer‘s perceptions and
expectations.
Higher prices
Better distribution
Customer loyalty
Businesses that operate successful brands are also much more likely to
enjoy higher profits.
A brand is created by augmenting a core product with distinctive values that
distinguish it from the competition. This is the process of creating brand value.
All products have a series of ―core benefits‖ – benefits that are delivered to
all consumers. For example:
66
The Brand
Garages dispense petrol and The
Consumer
Consumers are rarely prepared to pay a premium for products or services that
simply deliver core benefits – they are the expected elements of that justify a core
price. Successful brands are those that deliver added value in addition to the core
benefits. These added values enable the brand to differentiate itself from the
competition. When done well, the customer recognizes the added value in an
augmented product and chooses that brand in preference.
Alternatively, the consumer may be looking for the brand to add meaning to
his or her life in terms of lifestyle or personal image. Brands such as Nike, Porsche
or Timberland do this.
67
Basics of
Brand Check your progress 1
Management
1. Businesses that operate successful brands are also much more likely to enjoy
profits.
a. Higher
b. Lower
b. Product
Let‘s take a look at the important ways a strong brand impacts your business:
68
The Brand
advertising focus, and a company risks being ―pigeon holed‖ and losing their and The
ability to expand into new markets. Too broad a focus and the company fail to create Consumer
a definable impression of the company in the minds of would be customers.
b. Represents
a. Minor
b. Major
69
Basics of
Brand 3.4 The Nature of Relationship with Customers
Management
1. Confusion with the product management. The belief that all, a company has
to do to succeed is to produce a good product still abounds and neither
Concorde, the EMI Scanner, nor the many thousands of brilliant products that
have seen their owners or inventors go bankrupt during the past twenty years
will convince such people otherwise.
2. Confusion with advertising this is another popular misconception and the
annals of business are replete with examples such as Dunlop, Woolworths and
British Airways who, before they got professional management in, won
awards with their brilliant advertising campaigns, while failing to deliver the
goods. Throwing advertising expenditure at the problem is still a very popular
way of tackling deep-rooted marketing problems.
3. Confusion with customer service The ‗Have a nice day‘ syndrome is currently
having its hey-day in many countries of the world, popularized by Peters and
Waterman in ―In Search of Excellence‖. The banks are amongst those who
have spent millions training their staff to be charming to
70
The Brand
customers while still getting the basic offer fundamentally wrong - for and The
example. Many banks are still closed when the public most needs them open! Consumer
b. marketing
b. Selling
71
Basics of needs will generally be limited to very specific areas. More particularly, what we
Brand find is that an organization‘s skills and resources are the limiting factor determining
Management its ability to meet the market place needs. The example of a slide rule manufacture
being unable to compete in the age of electronic calculators underlines this point.
The strengths and skills of such a company, whatever they may have been, were
quite definitely not in the manufacture of electronic calculators, whereas they may
well have had a strength in marketing and distribution in specialized markets - thus
possibly providing an opportunity to distribute other manufacturers‘ products aimed
at those markets.
What we are in effect saying is that marketing should really be seen as the
process of achieving the most effective deployment of the firm‘s assets to achieve
overall corporate objectives. By assets in this context, we refer specifically to those
assets that might best be described as ‗marketing assets‘.
What are marketing assets? Typically when we talk about assets, we think
first of financial assets, or more precisely those assets that are recognized in the
balance sheet of the business. So, fixed assets, such as plant and machinery, and
current assets, such as inventory or cash, would be typical of this view of assets.
In fact, the marketing assets of the business are of far greater importance to
the long-run health of the business and yet paradoxically rarely appear in the
balance sheet. Ultimately, the only assets that have values, those are that contribute
directly or indirectly to profitable sales, now or in the future. Included in our
categorization of marketing assets would be such things as:
Market ‗franchise‘. Are there certain parts of the market that we can call our
own? The loyalty of customers and distributors will be a factor here.
Distribution network: Do we have established channels of distribution which
enable us to bring products or services to the market in a cost-effective way?
Market share the ‗experience effect‘ and economics of scale mean that for
many companies there are substantial advantages to being big. For example, costs
will be lower and visibility in the market place will be higher.
Supplier relationships: The ability to have success to raw materials, low-cost
components, and so on, can be of substantial advantage. Additionally, close
cooperation with suppliers can frequently lead to innovative product developments.
Customer reactions: ‗Close to the customer‘ has become the motto of the 1990s,
and many organizations can testify to the advantage of strong bonds between the
company and its customers.
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The Brand
Technology base: Does the company have any unique skills, processes or know-
and The
how strengths that can provide a basis for product/market exploitation? Consumer
It is only through the effective use of these and any other marketing assets
that the company can build successful marketing strategies. There still, of course,
remains the crucial task of seeking market-place opportunities for the exploitation
of this asset base; however, this is an issue which needs to be dealt with in a very
different light.
a. Complex
b. simple
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Basics of
Brand 3.6 The Importance of a Brand
Management
The importance of the brand
Perceptive readers will already have observed that, so far, we have
deliberately chosen not to make any reference to brands as assets. It will also be
clear by now that depicts brands not just a physical product, but a relationship with
the customer. This relationship is personified either by the organization‘s name, or
by the brand name on the product itself. ICI; IBM, BMW, Kodak and Cadburys are
excellent examples of company brand names. Persil, Nescafe, Fosters, Dulux and
Castrol GTX are excellent examples of product brand names.
First, when we refer to the term ‗brand‘, we use it to encompass not only
consumer products, but a whole host of offerings, which include people (such as
politicians and pop stars), places (such as Bangkok), ships (such as the Queen
Elizabeth II), companies, industrial products, service products, and so on.
Second, a distinction should be drawn between a ‗brand‘ and a
‗commodity‘. Commodity markets typically are characterized by the lack of
perceived differentiation by customer‘s between competing offerings. In other
words, one product offering in a particular category is much like another. Products
like milk or potatoes come to mind or tin and iron ore. Whilst there may be quality
differences the suggestion is that, within a given specification, this bottle of milk is
just the same as that bottle of milk.
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The Brand
In situations such as these, one finds that purchase decisions tend to be taken and The
Consumer
on the basis of price or availability, and not on the basis of the brand or the
manufacturer‘s name. Thus one could argue that the purchase of petrol falls into the
commodity category, and whilst the petrol companies do try and promote
‗image‘, they inevitably end up relying upon‘ promotions such as wine glasses and
games to try to generate purchase.
Conversely, one can also find examples of once-strong brands which have
been allowed to decay and in effect become commodities. This process is often
brought about because the marketing asset base has been allowed to erode - perhaps
through price cutting or through a lack of attention to product improvement in the
face of competition. One market where this has happened in the UK is in the fruit-
squash drink market. Fifteen or twenty years ago, there were a number of very
strong brands – Sun crush, Kiaora, Jaffa Juice, to name a few. In this market, the
quality of the brand had traditionally been stressed, but a switch in promotional
emphasis occurred towards promotional offers of one sort or another. Price cutting
became prevalent and resources were switched out of advertising which promoted
the values of the brand and into so-called ‗below the line‘ promotional activities.
The main effect of this, twenty years later, has been to reduce the bottle of orange
squash to the level of a commodity to such an extent that the major brands now
retailers‘ own label products:
The figure below depicts the process of decay from brand to commodity as,
over time, the distinctive values of the brand become less clear and thus the
opportunity to demand a premium price reduces. So, today, we find a bottle of
Perrier Water selling at a premium over a bottle of orange squash!
75
Basics of
Brand
Management
When the same two drinks were given to a matched sample in an open test
(the true identity of the brands was revealed), the following results were produced:
Prefer Pepsi 23 per cent
76
The Brand
How can this be explained if not in terms of the added values that are aroused
znd The
in the minds of consumers when they see the familiar Coke logo and pack? Consumer
Basic features
20%impact, 80%cost
Added Value
Image, service, styling, support
77
Basics of however, the less likelihood that a customer will accept a substitute. In commodity
Brand markets, competing products, because they are undifferentiated, are seen by the
Management customer as occupying virtually identical positions and thus to all intents and
purposes are substitutable.
It is thus the case that the most effective dimensions of competition are the
relative added values of competing brands. The core product is purely the tangible
features of the offering usually easy to imitate. The added values that augment the
product and where distinctive differences can be created are to be found in the
product surround, summarized in the figure above. The larger the
‗surround‘ in relation to the core product, the more likely it is that the offering will
be strongly differentiated from the competition.
The Coca-Cola example is one of the best indications of the value of what we
have called the ‗product surround‘. That it is a major determinant of commercial
success, there can be little doubt. When one company buys another, as in the case
of Nestle and Rowntrees, it is abundantly clear that the purpose of the acquisition
is not to buy the tangible assets that appear on the balance sheet, such as factories,
plants, vehicles and so on but the brand name owned by the company to be acquired.
This is because it is not that factories that make the profit but relationship with
customers and it is the brand that secures that relationship.
It might be argued, therefore, that if it is possible to value a company for sale.
Then surely it should be possible to do so on an on-going basis and specifically‘ to
recognize the worth of marketing assets as represented by brands.
78
The Brand
Buying a major brand nowadays often makes more sense to and The
organizations than launching a new brand with all the uncertainty that this entails. Consumer
This is just one of the reasons why brand valuation has emerged as a major issue in
recent times and why brands are increasingly sought after as assets.
Some of the more spectacular examples f the value of brands as assets can be
seen in acquisitions in which colossal premiums were paid above the balance sheet
asset value. AT&T paid a massive premium for the NCR brand. RHM, taking its
cue from this trend, more than triple its asset value when it voluntarily valued its
own brands and incorporated them on the balance sheet.
b. Similarity
b. limca
The Indian scenario provides challenges of all kinds to brand managers who
have to conceptually figure out how they ‗can place and sustain‘ their brands in
79
Basics of the minds of consumers. It is simply not warfare between mega-brands. For
Brand established brands, it is a question of enhancing their equity. For others it is a matter
Management of building up the brand image and these will have to be done in a country which is
replete with regional, social, cultural and linguistic variations where the governing
marketing parameters for a given product/market situation cannot always be
predicted.
Time Frame
Each of the above factors is not mutually exclusive from this viewpoint of the
‗brand-pull‘. There are traditional product categories like toothpastes, footwear,
audio products, balms, cigarettes and scooters, which have been in the Indian
market (as compared to products like pagers, personal computers and shampoo in a
sachet, electric shavers and credit cards).
Now just think of five very old brands in any of the segment like FMCG or
Electronics.
There have been brands which have carefully built up their brand equity for a
number of years – Colgate, Bata, Vicks, Philips, Bajaj and these brands are likely
to enjoy a higher consciousness in the consumer‘s mind in the respective product
categories. This has a ‗rub-off‘ effect on their relatively recent brand extensions.
There may be a number of brands, which have not built up their equity despite of
their long presence in the market. These brands have gone out of the
‗mind-set‘ of consumers.
Again think of five such old brands that exist since last 20-30 years but have
not been able to create impression in consumers mind?
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The Brand
What follows are the various aspects of nature of relationship of brand with and The
customers: Consumer
a. Product Category
In a new product or service categories, which could be associated with
liberalization, global brands may create a higher level of brand consciousness
among consumers? This may be because of ‗perceived premium‘ associated
traditionally with foreign brand names.
Examples could be Motorola in cellular phones, McDonald‘s in food chains
and Citibank in credit cards or you can name many more in the list.
b. Social Value
In product categories which are relatively old like ready-made garments (this
category has been in existence for a long time but has exploded in the recent years),
an audio products and household appliances, global brand names may make a
greater impact on the customers. In this context, the social signalling value of
products (the visibility a product ahs in the eye of the other customers- consumer
durables are placed generally in the room where visitors are received at homes and
cars which are bought for personal use have more of signalling value than the
geyser, water purifier or contact lens) provides the symbolic association which
consumers look for in attempting to give a spur to their ego. Even in the case of
non-durables (like cigarettes and pens), consumers look for brands which reflect
their lifestyles to the society in general (examples could be 555 cigarettes, Parker
pens, Arrow shirts and Pepsi. Brand building is extremely important in product
categories where the signalling value is high. These are products, which are in the
premiums/ super –premium category and hence the personality of these brands
makes a significant impact on the brand consciousness of the respective segment of
customers.
A good example of the application of mega-marketing (advocated by Philip
Kotler) in the Indian context is the case of Japanese brands. Mega-marketing helps
a brand to overcome marketing barriers when they attempt to enter international
markets. Sony, Sharp, Akai and National brands started advertising in India and
built their brands even before the liberalization process was formulated .As a result
initially, they enjoy a better level of consciousness than brands like Goldstar,
Samsung and Electrolux which are also international brands. Today it‘s the
Samsung, LG, and so on, which are prominent.
Apart from the quality, brand building ensures the emotional linkage and this
plays an important part in consumer decision-making. India, with its markets
81
Basics of fragmented in most product categories, has offered enough scope for brand building
Brand in the respective segments if marketers have had the inclination to build brands.
Management
Vicks very carefully built up it brand from the fifties and carved a niche for
itself as a cold remedy in a balm market where segmentation was totally absent.
This enabled the brand extension over a period of time (to adults and headaches).
Bajaj strongly built a ‗value for money‘ image and this could be very stressful for
the brand if it starts scanning the lower –end of its passenger car market which has
been left untapped. (Maruti was successful and now it is building up-market
brands).
Philips has an interesting brand development history in India and it has been
around for sixty-five years and in a closed economy (not much of specific brand
personality was required). During recent times, its brand development has been in
tune with its product development introduction of a spate of TV models for the
upmarket and entering into household appliances and pagers, to reinforce the
technological prowess that the brand has in global markets in the minds of
consumers. This is a brand which is already on the ‗top of the mind‘ consciousness
level and its trying to create a position even at this level as there are a number of
competitive brands which have an equally good equity.
In this era of brand personality, brand extensions and brand equity, marketers
are attempting to raise the emotional level of consumers not only with regard to
brands but also with regard to product categories which were tilled recently
perceived as commodities. Imagery, positioning styles and a host of behavioral
concepts are being attempted. The conflux of branded products in the market
overwhelms the consumers and makes the buying choice difficult.
Each brand is trying to outdo the other by attempting to create different
images for it.
82
The Brand
Yesterday‘s consumer went to the shop and asked for a new tyre for and The
replacement purposes. Today, the same consumer is faced with a ‗long Consumer
playing radicals, anti – skids and wider ones as choices, thanks to the elevated
levels of association with the product category of tyres.
The routine change of oil as Lubricants for two and fourwheelers has become
an area of consumer‘s decision – making with consumers asking for specific
brands.
Bathrooms have become glamour rooms; pepper and salts are ‗Catching‘ up
with customers; ‗Thirty plus‘ citizens are becoming fitness-conscious!
Consumers’ Involvement
It is involvement everywhere with anything from morning tea to air-
conditioners. The concept of involvement assumes significance against the current
marketing scenario. With the battle of brands and minds in any product category,
the consumer spends more time and effort in the purchase of product category,
products, which have been inspiring to him all these years.
Some Examples
1. Catch introduced branded salt and pepper and followed it by communication
to create involvement.
2. In a country where traditional herbs and pastes have been consumed for ages,
Kotmatsu has targeted its herbal products to the ‗back –to-nature‘ urban
segments.
83
Basics of 3. Apollo packaged its tyres and tubes in reusable tamper proof packs apart from
Brand creating Black Cat, Anti Skid brands – an effort to raise the involvement level
Management of consumers.
MRF‘s Tyredromes and Dunlop‘s spectra wide have also raised the
involvement required for the brand differentiation plane.
Finally, after the formation of attitude, behavior takes place in the form of
buying the brand.
With all brands offering an acceptable level of quality, marketers can ensure
that consumers perceive the differentiation on the service count. It is not only
important to have good service but also important to communicate the service
arrangements through a variety of ways. Apart from using the popular media, the
point-of-purchase material at he dealers‘ showrooms will raise the level of
84
The Brand
involvement of consumer. Service can also assume other dimensions like the and The
dealer‘s sales personnel ascertaining the proper needs of the consumer and Consumer
proposing a match which will suit the consumer.
A consumer wanting to buy a gift for his son (a TV) may also be user of the
brand in which he is showing interest. The involvement here may shape the attitude
of the consumer towards the brand. He feels happy the brand /store is interested in
finding out how he feels about his association with the respective brand. Even if the
consumer has been having a negative belief about a brand, he may try to give a
‗second chance‘ for the brand because of the involvement created. If he has been
having any wrong perceptions about the brand, they can be corrected.
The consumer, after the awareness stage, tries the product. Unlike the
previous category, attitude about the brand is formed after the product trial
(consumables). If the consumer is satisfied, he buys it again and this pattern could
trigger off brand loyalty.
85
Basics of (Whenever a need is felt – whenever tea is required, a particular brand of
Brand packaged tea may be bought). Even in case of durables, marketers may attempt to
Management raise the low-involvement product to the high-involvement plane.
The black box of the consumer‘s mind has several dimensions, which can be
explored by marketers by a judicious mix of concepts and down to earth marketing
practices.
Liquid detergents: Ezee has been in the market for a decade but hasn‘t taken
off as have other detergent forms.
Electric cars which never really caught on in advanced markets (during the
last 25 years) have just been launched in India – Rewa being the first.
Cornflakes which have been in the market for the last three decades, could
never really penetrate Indian Homes. But with the entry of Kellogg‘s some
awareness seems to have been created.
For the new products to make an impact on the consumer‘s mind, you have to keep
in mind the following factors:
86
The Brand
Does the innovation (or the new product) bring in discontinuity in the habits and The
of the consumer? Consumer
What kind of enhanced value does the product offer to upgrade the
consumer if functional utility is the unique selling proposing?
b. Local
b. brand-pull‘
Discontinuity in Habits
As habits are strongly associated with behavior, there are two dimensions to
them physical and psychological.
The growth of the two-wheeler category is an interesting example. Till the
mid-eighties, the category grew at a slow pace. One reason was that consumers were
comfortable with cycles or whatever mode of transport they were used to. Hence
the people were neither motivated nor readily amenable to the idea of using an
engine-based two-wheeler for personal transport. Getting used to the two- wheeler
would have meant getting used to the acceleration, the controls and of course
periodical maintenance and running expenses.
87
Basics of However, consumers exhibit a mindset to accept discontinuity of their learned
Brand habits (physical dimensions).
Management
When life-styles change, there is increased pressure on time and consumers
become mentally prepared to accept new product concepts though it may involve a
change in habits. The assumption is that the new product is not prohibitively
expensive.
This product is a sleek version of the traditional stone grinder. The working
of the machine is such that it convinces the consumer of a standardized taste (applies
to traditional food items of South India).
While changes in the environment and life style could bring changes in the
physical dimension, changes in psychological dimensions are relatively more
difficult to achieve. Instant coffee (pure and chicory mixed) has been in the market
for a long time but hasn‘t penetrated phenomenally inspite of being convenient to
use. Marketing communication can build in lifestyle aspects (apart from
highlighting product attribute - taste it the case of instant coffee) to create an impact
in the minds of consumers. Bru, after hammering down the stereotype of South
Indian coffee, is currently associating itself with contemporary life style.
88
The Brand
The concept of get toothpaste is another example. The communication based and The
on the ‗smile for me…. Close-Up smile‘ ad film did not seem to have any impact Consumer
on the teenage young adults segment it the mid-seventies when the brand was
launched. However the variation of the same theme is widely accepted today and
gel as a category makes up for more than 20 percent of the toothpaste category.
Soya based foods and milk drinks is a new category. Brands have vigorously
attempted to ‗push‘ these products in recent time‘s but without much success. The
reason is the lack of awareness about the ‗soya protein - good health‘ assocition
(though awareness about health in general has improved.
Cultural Factors
These factors can also be associated with the psychological aspects of
discontinuity. Food habits are strongly entrenched in the culture and hence are
extremely difficult to change. Except for Maggi (noodles have a Chinese origin),
there does not seem to be any other food brand, which has succeeded in a similar
manner. Microwave ovens, which have been around for many years now, have a
dismal penetration level. Even you may be apprehensive about using the product
for Indian foods.
Functional Value
New product categories will have a better chance of getting accepted if they
offer a better functional value, which can upgrade existing consumers rather than
create consumers.
When the target segment (upper strata) employs a number of staff for
domestic help at home, what could be the functional value addition from a
dishwasher? Additionally, there is also need to train people hired for domestic
89
Basics of help. Pressure cookers, gas stove, fully automatic washing machines and mixies
Brand have provided functional utility with disrupting the domestic routine much.
Management
Trialability
Cielo opened up a new dimension with its promotional strategy of offering
the car for a test ride for 18 months (for 200 customers). These prospective
customers had the option of returning the car after the test drive period. This
promotional method is suitable from product categories like durables .The
modalities of offering this kind of trialability depends on the product, type of
prospective customers and the launch budget of the company. In certain product
categories where a niche is targeted, this may be more effective than advertising.
This method not only builds credibility of the new product but also helps in word-
of –mouth publicity.
As more and more products appear in the Indian market, breaking the barriers
in the consumer mindset will be as important as the product offering.
Principles of Perception
In simple terms, perception is an important psychological process in which
you can add meaning to what has been sensed by your sensory organ. This is
precisely the reason why two individuals have different kinds of perception about
products, brands ideas, places and people. In the marketing context the conditioning
of the consumer‘s psyche over a period of time because of the individual ‗s
exposure to products, brands trends, etc gets associated with the incoming
marketing stimuli, which could be a brand, advertising message, product or a
company‘s name, to complete the process of perception. The conditioning aspect is
the relevant information which is already stored in the memory of the individual.
90
The Brand
Mechanism of Perceptions and The
Consumer
You have to keep in mind that the mechanism of perception, adding meaning
to whatever has been sensed, is not just restricted to the marketing context alone.
Individuals perceive information in a perceptual manner. Perception is not just
limited to visual aspects such as seeing the product or the brand in a retail outlet. It
could get extended to any of the inputs to sensory organs.
For example, just the audio part without the visual of Titan‘s TV commercial
(the background music used in the brand‘s commercial) could trigger of visual
images of the brand‘s commercial in a consumer who has viewed the commercials
many times over a period of several years. This act of completion, which takes place
in a consumer‘s mind, is called ‗completion‘ and this is one of the very useful
principles of perception. A brand of soap, which has been advertising widely in
television and cinema halls for years, attempted this principle a few years back. In
certain markets, it used only the radio medium, and advertised the brand with the
popular jingle (background music tune with the brand name). The brand registered
a high recall rate, and consumers were able to recall the visual images associated
with the popular commercial.
Principles of Proximity
The principle of proximity could be used as a part of a brand image
development. This involves associating visuals which are appropriate to the
positioning of the brand with the brand name. ITC‘s Classic brand of cigarette, a
brand positioned to the upper strata of smoker, is associated with the game polo,
which has an upmarket image. The logic is to associate a visual, which could elicit
perception that will be favorable to the development of the brand image. Peter
England, the value for money brand, has used the proximity principle in its retailing
decisions. It has not followed the exclusive showroom arrangement. In tune with its
value proposition, it has entered into small retail showrooms where the brand is
displayed along with a number of other brands. This enables a consumer to compare
the value aspect of the brand with other brands. It is interesting to note that this
usage of the proximity principle has taken into consideration the other aspects of
the value proposition ‗the honest shirt‘ and a wide range of colors offered.
91
Basics of sachets in millions of small outlets (including rural areas) have radically altered the
Brand perception of consumers of the product category. It is well within the reach of
Management millions of middle –class consumers, and about sixty five per cent of the shampoo
volume is realized through sachets. The proximity in this context is simply the
association of the product/brands with small retail outlets. Currently even premium
brands are launched in sachets, probably to upgrade consumers from value brands.
The compact detergent sub-category (Ariel, Surf Excel) presents another example
where the visuals have used the principle of proximity. Ever since the launch of this
category, both brands have projected the ‗common man‘ visuals, using the candid
camera technique in which middle-class housewives are interviewed at common
place retail outlets.
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The Brand
their needs more effectively, and increase profits. Brand equity can be increased by and The
successfully implementing and managing an ongoing relationship marketing effort Consumer
by offering value to the customer, and listening to their needs. Disregarding the
edge that the Brand-Customer Relationship offers in the market place and not
utilizing the benefits and goodwill that the relationship creates will surely lead to
failure in the long run.
The central brand idea may be static among the entire customer and prospect
bases, but the total sum of the brand idea or perception is rooted in the customer‘s
experiences with the brand itself, and all its messages, interactions, and so on. In
light of this, customer service and the entire marketing effort has a great deal to do
with the strength of a brand. The fundamental strength and success of a brand lies
in its ability - via marketing - to create and cultivate a strong and lasting relationship
with its customers.
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Basics of To create a successful brand-customer relationship, you must develop a
Brand compelling brand identity and customer value proposition, rely on customer
Management perspective, and have the ability to listen and respond appropriately to evolve your
company‘s offerings to meet customers‘ needs and desires.
A strategy is not enough either. The organization must be aligned in ways that
anticipate and fulfill customers‘ emotional expectations at every touch point to
create meaningful relationships and lasting competitive advantage.
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The Brand
You should always base the brand-customer relationship on an outside-in and The
perspective, creating a customer-centric experience. Consumer
b. liquid market
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Basics of
Brand 3.9 Let Us Sum Up
Management
In this part we have studied much in detail about how to build the brands. The lessons
discussed that relationship between a customer and a brand is an exchange relationship.
Businesses that operate successful brands are also much more likely to enjoy higher
profits. A brand is created by augmenting a core product with distinctive values that
distinguish it from the competition. This is the process of creating brand value.The
important point is that a company which fails to think of its business in terms of customer
benefits rather than in terms physical products is in danger of losing its competitive position
in the market. When a customer buys a product, even if he is an industrial buyer purchasing
a piece of equipment for his company, he is still buying a particular bundle of benefits
which he perceives as satisfying his own particular needs and wants. When we refer to the
term 'brand', we use it to encompass not only consumer products, but a whole host of
offerings, which include people (such as politicians and pop stars), places (such as
Bangkok), ships (such as the Queen Elizabeth), companies, industrial products, service
products, and so on.
So after such a long and detailed discussion we have come to know much about the
importance of brand and why should one build brand of his product.
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The Brand
and The
Check your progress 6 Consumer
Answers: (1-a)
3.11 Glossary
1. Complementary Branding - a form of co-branding in which the marketing
of two brands together encourages co-consumption or co-purchases.
3.12 Assignment
1. What is difference between a commodity and product?
3.13 Activities
1. Define : i) core values and ii) added value
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Basics of
Brand 3.14 Case Study
Management
List out 10 brands, which are known for good customer care service, and 10 Brands
for bad service. Collect all their advertising and comment on their relationship with their
customers. What are the perceived benefits the customer is getting?
4. Positioning: The Battle for Your Mind - Al Ries and Laura Ries.
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Summary
Almost every aspect about brand was made very clear to us. In this part the
whole content was divided in three Lessons/Chapters. Chapter 1 discusses about the
market and brand basics, Chapter 2 discusses about brand evolution and value of
brands whereas Chapter 3 discusses about the brand and the consumer.
This lesson was totally focused on brand and that was the only reason why it
has been able to discuss the brand in such a detailed manner. In lesson 1 we learnt
about the market and about the very basics of brand. The second lesson discusses
about how this brand came into existence i.e. there is a detailed discussion on brand
and its evolution. Where as the 3rd and final topic discusses about the brand and its
consumer.
This topic is really going to be very helpful for the students and readers of
this subject.
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Basics of
Brand Assignment
Management
Short Answer Questions
1. Explain brand.
2. What is brand potential?
3. High involvement and low involvement brands.
9. List five brands of different product categories and list down their i) core
values and ii) functional values.
10. List five ―low involvement‖ brands and five ―high involvement‖ brands.
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