CHAPTER 1: BRANDS & BRAND MANAGEMENT

What is a brand?

For the American Marketing Association (AMA), …..a brand is a “name, term, sign, symbol, or

design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.”

Brands vs. Products

A product is anything we can offer to a market for attention, acquisition, use, or consumption that might satisfy a need or want.

Five Levels of Meaning for a Product The core benefit level is the fundamental need or want

The generic product level is a basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning

The expected product level is a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product.

The augmented product level includes additional product attributes, benefits, or related services

The potential product level includes all the augmentations and transformations that a product might ultimately undergo in the future.

Why do brands matter?

Importance of Brands to Consumers

Identification of the source of the product

Assignment of responsibility to product maker

Risk reducer

Search cost reducer

Promise, bond, or pact with product maker

Symbolic device

Signal of quality

Reducing the Risks in Product Decisions

Functional risk—The product does not perform up to expectations.

Physical risk—The product poses a threat to the physical well-being or health of the user or others.

Financial risk—The product is not worth the price paid.

Social risk—The product results in embarrassment from others.

Psychological risk—The product affects the mental well-being of the user.

Time risk—The failure of the product results in an opportunity cost of finding another satisfactory product.

Importance of Brands to Firms

Identification to simplify handling or tracing

Legally protecting unique features

Signal of quality level

Endowing products with unique associations

Source of competitive advantage

Source of financial returns

Can everything be branded?

Physical goods

Services

Retailers and distributors

Online products and services

People and organizations

Sports, arts, and entertainment

Geographic locations

Ideas and causes

What are the strongest brands?

Top Ten Global Brands

Brand 2006 ($Billion)

2005 ($ Billion)

1. Coca-Cola2. Microsoft3. IBM4. GE5. Intel6. Nokia7. Toyota8. Disney9. McDonald’s10. Mercedes-Benz

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Branding Challenges & opportunities

Savvy customers

Brand proliferation

Media fragmentation

Increased competition

Increased costs

Greater accountability

The Brand Equity Concept

Differential effect

Brand knowledge

Consumer response to marketing

Strategic Brand Management ProcessStrategic Brand Management Process

Mental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantra

Mixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associations

Brand value chainBrand auditsBrand trackingBrand equity management system

Brand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalization

Key ConceptsSteps

Grow and sustainbrand equity

Identify and establishbrand positioning and values

Plan and implement brand marketing programs

Measure and interpretbrand performance

1. Identify and establish brand positioning and values

Mental maps: Visual depiction of different type of

associations linked to the brand in the mind of customer

Competitive frame of reference: Creating brand superiority in the mind of customer.

Points-of-parity and points-of-difference: POD …..is not available in other brand, POP….is similar to other brand

Core brand values: Attributes and benefits of brand.

Brand mantra: Core brand promise.

2.Plan and implement brand marketing programs

Mixing and matching of brand elements: Name.logos symbols characters,packaging and

slogans.

Integrating brand marketing activities: Marketing programs can create strong,favorable and unique brand association.

Leveraging of secondary associations: Brand may be linked to

*Company *Character *Spokepeople *Country *Sonsorship *Awards

3.Measure & interpret brand performance

Brand value chain: Value creation Process

Brand Audit: A comprehensive examination of a brand to discover its sources of brand equity.

Brand Tracking: Collecting continuous information from customer.

Brand equity management system: *Brand equity charter *Brand equity report

*Brand equity responsibility

4.Grow and sustain brand equity

Defining the Branding Strategy

Managing Brand Equity Over Time

Managing Brand Equity Over Geographic Boundaries, Cultures, and Market Segments.