LEVERAGING SECONDARY BRAND ASSOCIATIONS TO

BUILD EQUITYChapter 7

LEVERAGING

• “Borrowing” some brand knowledge and depending on the nature of associations or responses, some brand equity

• Unlike brand elements and communication strategies, this is an indirect approach to build brand equity.

Sources of Brand Knowledge

Things

Places

People

Other Brands

Brand

Alliances

Ingredients Company

Extensions

ChannelsCountry of Origin

Events

Causes

3rd Party Endorsements

Endorsers

Employees

Creation of New Brand Associations

• By making a connection between and other entities, consumers form a mental association

• This secondary knowledge is most likely to affect the evaluations of a new product when consumers lack the motivation or the ability to judge product related attributes

Effects of Existing Knowledge

• Awareness and knowledge of the entity– DO they have the knowledge– Do they hold unique associations

• Meaningfulness of the knowledge– Is the knowledge relevant and meaningful for the

brand– Does it have connection to the brand

• Transferability– How strongly will this impact the choice of the new

brand

Examples

• Events: create experiences

• People: create feelings

• Media: knowledge about attributes

• Cause-related marketing: – Enhance brand image– Evoke feelings of social approval/esteem– Brand attitudes such as trustworthy &

Likeable

Will Brand Leveraging Work for you?

• Does the new product fit into the established product family?

• Does the brand have attributes or features that easily and effectively carry into new categories?

• Is the brand name strengthened or diluted by representing two (or more) differentiated products?

• Does your company have facilities necessary to manufacture and distribute a new and differentiated product?

• Will sales of the new product cover the cost of product development and marketing?

• A brand leveraging strategy can be extremely successful and profitable if it is correctly implemented and provides new products with the right image.

Associations

• Commonality: when consumers have associations to another entity that are congruent with desired brand associations

• Complementarity: when there is not the level of congruence required, how much can associations add to the brand

Frito Lay™ name is extended from potato chips into other types of snack foods and dips. An introduction of Frito Lay™ lemonade did not succeed because the fruity, sweet drink had little connection to other Frito Lay™ products.

• Other examples that did not work in the consumer market include – Ben-Gay™ aspirin, – Fruit of the Loom™ laundry detergent.

• However, M&M™ ice cream, Reese’s™ peanut butter, and Minute Maid™ orange soda experienced success because the brands held direct and logical connections to their new categories.

An Exception

• Bic™ is a strong brand name with years of experience in marketing low-cost disposable plastic products such as the Bic™ pen. Thus, Bic™ is positioned well to introduce products that capitalize on these same basic strengths – products such as disposable razors and cigarette lighters.

Pros• More products mean greater shelf space for the

brand and more opportunities to make a sale. • The cost of introducing a brand leveraged product is

less than introducing an independently new product due to a much smaller investment in brand development and advertising designed to gain brand recognition.

• A full line permits coordination of product offerings, such as bagels and cream cheese, potato chips and ranch dip, peanut butter and jelly, etc.

• A greater number of products increase efficiency of manufacturing facilities and raw materials.

Cons

• Brand leveraging does present challenges.– Brand dilution

– Potential exists for damaging the reputation of the parent product if new products fail.

– Manufacturing and inventory costs may be higher as a result of product diversification.

Company

• Create a new brand

• Adopt or modify an existing brand

• Combine an existing or a new brand

Corporate Marketing Umbrella (Philosophy)

Corporate Brand vs. Product Brand

Importance of Corporate Branding

Country of Origin

• Is Land Rover British, German or American?

Cultural Bazaar

• Origins of the brand are more important than who the owner becomes latter in life.

• Lamborghini is owned by German-VW, yet it keeps this Italian identity.

• Rolls-Royce is now owned by German BMW, it still is associated with English luxury.

• It is like a child, the first years are the most important for his identity.

Other Geographic Associations

• States: Idaho Potatoes

• Regions: Irish Spring Soap

• Cities: Impulse London Vibe

Problems

• Strong associations may hinder migration

• Favourability of the country of origin – Domestic Perspective– Foreign Perspective– Individualistic vs collectivist societies

• Patriotic Appeal– Lack uniqueness– Overused

Channels of Distribution

• Associations with – Product– Price– Credit Policy– Quality of Service– Results in associations of brands by retailers“If its sold in Nordstrom, it must be of good

quality”

In Bangladesh context?????

• Exclusive

Vs.

• Intensive distribution

A small story….• He was the little tan bear millions of kids grew up with. He tagged

along with Christopher Robin, stuck his hand in the honey pot, and figured out new ways to cause harmless mischief. And no matter where children came from or what their parents did for a living, the name Winnie-the-Pooh conjured up a single image gleaned from the classic books by A.A. Milne.

• Today's kids, however, won't have that common touchstone. These days, their image of Pooh depends a lot on where they live and how much money their parents make. That's because the Walt Disney Co., which owns the rights to Milne's make-believe menagerie, is carefully marketing two distinct Poohs. The original line-drawn figure appears on fine china, pewter spoons, and pricey kids' stationery found in upscale specialty and department stores such as Nordstrom and Bloomingdale's. The plump, cartoonlike Pooh, clad in a red T-shirt and a goofy smile, adorns plastic key chains, polyester bedsheets, and animated videos. It sells in Wal-Mart stores and five-and-dime shops. Except for at Disney's own stores, the two Poohs do not share the same retail shelf.

Co-Branding

• Occurs when two or more existing brands are combined into a joint product or are marketed together in some fashion

Examples:• Sony Ericsson• Yoplait Trix Yogurt• Nestle’s Cheerios Cookie Bars

• Co-branding is nothing new, and it's something that we as consumers take somewhat for granted. Visit a grocery store and you'll see dozens of examples, from the ice cream aisle (Breyer's (UL) and Hershey to the snack aisle (Lay's and KC Masterpiece (CLX)) to the cereal aisle (Kellogg's (K) and Healthy Choice) to the dessert aisle (Cinnabon and Mrs. Smith's). You can also find co-branding examples in the automotive world (Coach (COH) and Lexus (TM)), the hospitality industry (Bulgari and Ritz-Carlton), the footwear business (Disney (DIS) and Crocs (CROX), the franchising world (Tim Hortons (THI) and Cold Stone, the airline industry (Southwest (LUV) and SeaWorld), and even in product catalogs stuffed into airplane seat pockets ("Order your Braun Oral-B Plaque Remover today").

• For example, a restaurant could co-brand with a local packaged-foods maker to create a new menu item, an accounting firm could co-brand with an information-technology provider to create a new consulting offering, or a physician might co-brand with a hospital on a new service line. A good place to start generating ideas is by thinking about other types of companies that do a good job serving your target market. You might even ask your customers to identify other companies with which they do business and see if you come across any patterns.

Advantages of Co-Branding

• Borrow needed expertise• Leverage equity you don’t have• Reduce cost of product introduction• Expand brand meaning into related

categories• Broaden meaning• Increase access points• Source of additional revenue

Disadvantages of Co-Branding

• Loss of control

• Risk of brand equity dilution

• Negative feedback effects

• Lack of brand focus and clarity

• Organizational distractions

Ingredient Branding

• A special case of co-branding that involves

creating brand equity for materials, components,

or parts that are necessarily contained within

other branded products• Examples:• Betty Crocker baking

mixes with Hershey’s• chocolate syrup• Intel inside

Licensing

• Involves contractual arrangements wherebyfirms can use the names, logos, characters, andso forth of other brands for some fixed feeExamples:• Entertainment (Star Wars, Jurassic Park, etc.)• Television and cartoon characters (The

Simpsons)• Designer apparel and accessories (Calvin Klein,• Pierre Cardin, etc.)

Celebrity Endorsement

• Draws attention to the brand

• Shapes the perceptions of the brand

• Celebrity should have a high level of visibility and a rich set of useful associations, judgments, and feelings

Celebrity Endorsement: Potential Problems

• Celebrity endorsers can be overused by endorsing many products that are too varied.

• There must be a reasonable match between the celebrity and the product.

• Celebrity endorsers can get in trouble or lose popularity.

• Many consumers feel that celebrities are doing the endorsement for money and do not necessarily believe in the endorsed brand.

• Celebrities may distract attention from the brand.

Sporting, Cultural, or Other Events

• Sponsored events can contribute to brand equity

by becoming associated to the brand and

improving brand awareness, adding new

associations, or improving the strength,

favorability, and uniqueness of existing

associations.• The main means by which an event can transfer

associations is credibility.