Module 5Module 5

BrandsBrands

Objective for Module 5Objective for Module 5Define brand equity and understand the issues that Define brand equity and understand the issues that relate to brand management. relate to brand management. Define brand in the technical sense as well as by Define brand in the technical sense as well as by various abstract conceptualizations. various abstract conceptualizations. In relation to the Brand Report Card, the Brand In relation to the Brand Report Card, the Brand Pyramid, and the Brand Space, know: Pyramid, and the Brand Space, know: The problems/issues that led to the proposal of each.The problems/issues that led to the proposal of each. How to identify the components of each How to identify the components of each How to evaluate a brand according to each.How to evaluate a brand according to each. Any cautions of suggestions given in applying each.Any cautions of suggestions given in applying each.

Differentiate between branding issues for traditional Differentiate between branding issues for traditional good versus high-tech products. good versus high-tech products.

The added value a given brand name gives to a The added value a given brand name gives to a product beyond the functional benefits provided.product beyond the functional benefits provided.

The amount that a customer is willing to pay for a The amount that a customer is willing to pay for a given brand over and above a generic version given brand over and above a generic version of the same product. of the same product.

WHAT IS BRAND EQUITY?

2006 2006 RankRank

2005 2005 RankRank NameName

2006 2006 Value Value

2005 2005 ValueValue

Change Change in Valuein Value

11 11 Coca-ColaCoca-Cola 67,00067,000 67,52567,525 -1%-1%

22 22 MicrosoftMicrosoft 56,92656,926 59,94159,941 -5%-5%

33 33 IBMIBM 56,20156,201 53,37653,376 5%5%

44 44 GEGE 48,90748,907 46,99646,996 4%4%

55 55 IntelIntel 32,31932,319 35,58835,588 -9%-9%

66 66 NokiaNokia 30,13130,131 26,45226,452 14%14%

77 99 ToyotaToyota 27,94127,941 24,83724,837 12%12%

88 77 DisneyDisney 27,84827,848 26,44126,441 5%5%

99 88 McDonald’sMcDonald’s 27,50427,504 26,01426,014 6%6%

1010 1111 MercedesMercedes 21,79521,795 20,00620,006 9%9%

Problems With Brand EquityProblems With Brand Equity

Few managers can assess their brand’s Few managers can assess their brand’s specific strengths and weaknesses.specific strengths and weaknesses.

Most have a good sense of one or two Most have a good sense of one or two areas. areas.

Most also have a hard time seeing all Most also have a hard time seeing all factors that affect the whole. factors that affect the whole.

How can managers build brand equity?How can managers build brand equity?

What factors should be considered?What factors should be considered?

A systematic way for managers to assess the strengths and weaknesses of a brandBased on ten characteristics displayed by the worlds strongest brandsEach characteristic is given a rating, 1-10. This same tool can be used to assess competitive brands

THE BRAND REPORT CARD

The Brand Report Card 10 TraitsThe Brand Report Card 10 Traits

1.) The Brand Excels at the Benefits Customers 1.) The Brand Excels at the Benefits Customers Truly DesireTruly Desire Put together the Put together the rightright bundle of attributes bundle of attributes

that lead to benefits. that lead to benefits.

2.) The Brand Stays Relevant2.) The Brand Stays Relevant Brand equity is tied to objective aspects of quality as Brand equity is tied to objective aspects of quality as

well as various intangible subjective elements: well as various intangible subjective elements: User and usage imageryUser and usage imagery

PersonalityPersonality

Feelings elicitedFeelings elicited

Type of RelationshipType of Relationship

Role of brand in societyRole of brand in society

The Brand Report Card 10 TraitsThe Brand Report Card 10 Traits

3.) Pricing Strategy is Based on Consumers’ 3.) Pricing Strategy is Based on Consumers’ Perceptions of ValuePerceptions of Value Product Quality, Design, Product Quality, Design,

Features, Costs, and PriceFeatures, Costs, and Price

4.) The Brand is Properly Positioned4.) The Brand is Properly Positioned Well positioned brands occupy a Well positioned brands occupy a nicheniche in consumers’ in consumers’

mindsminds Points of parityPoints of parity Points of differencePoints of difference

The Brand Report Card 10 TraitsThe Brand Report Card 10 Traits5.) The Brand is Consistent5.) The Brand is Consistent Does the meaning/image of the brand remain consistent Does the meaning/image of the brand remain consistent

over time? over time? Balance of Balance of continuitycontinuity in marketing activities with in marketing activities with

change needed to stay change needed to stay relevantrelevant

““Where you’re going, it’s Michelob” Where you’re going, it’s Michelob”

““Weekends were made for Michelob” Weekends were made for Michelob”

““Put a little weekend in your week.” Put a little weekend in your week.”

““The night belongs to Michelob” The night belongs to Michelob”

““Some days are better than others” Some days are better than others”

““A special day requires a special beer”A special day requires a special beer”

““Some days were made for Michelob” Some days were made for Michelob”

6.) The Brand Portfolio and Hierarchy Make Sense6.) The Brand Portfolio and Hierarchy Make Sense Main Brand and Sub Brands Main Brand and Sub Brands

should complement each othershould complement each other Each brand should have boundariesEach brand should have boundaries

7.) The Brand Makes Use of and Coordinates a Full 7.) The Brand Makes Use of and Coordinates a Full Repertoire of Marketing ActivitiesRepertoire of Marketing Activities Logos, symbols, slogans, jingles, signage, packaging.Logos, symbols, slogans, jingles, signage, packaging. Integrated Marketing CommunicationsIntegrated Marketing Communications

8.) The Brand’s Managers Understand what the Brand 8.) The Brand’s Managers Understand what the Brand Means to ConsumersMeans to Consumers

The Brand Report Card 10 TraitsThe Brand Report Card 10 Traits

The Brand Report Card 10 TraitsThe Brand Report Card 10 Traits

9.) The Brand is Given Proper Support, and that 9.) The Brand is Given Proper Support, and that Support is Sustained Over the Long RunSupport is Sustained Over the Long Run Build a solid foundation so consumers have proper Build a solid foundation so consumers have proper

awareness and association with itawareness and association with it Keep supporting the brandKeep supporting the brand

10.) The Company Monitors Sources of Brand 10.) The Company Monitors Sources of Brand EquityEquity Conduct Brand Audits Conduct Brand Audits

and Brand-Tracking Studiesand Brand-Tracking Studies Formal brand-equity-management systemsFormal brand-equity-management systems

Balancing the Brand Report Balancing the Brand Report Card CriteriaCard Criteria

Maximize all 10 is the ideal objectiveMaximize all 10 is the ideal objective

Focus on one may impact others, Focus on one may impact others, positively or negativelypositively or negatively

Requires systematic planRequires systematic plan

Requires commitment, not just going Requires commitment, not just going through the motionsthrough the motions

Practice - Get one down, others become Practice - Get one down, others become easiereasier

What High-Tech Managers What High-Tech Managers Need to Know About BrandsNeed to Know About Brands

Ward, Light, and GoldstineWard, Light, and Goldstine

The High-Tech TrapThe High-Tech Trap

Focus on the price-performance ratio as a Focus on the price-performance ratio as a means of achieving success.means of achieving success.

Strategy is based on a product-centric model.Strategy is based on a product-centric model.

Brands and brand images are only relevant for Brands and brand images are only relevant for irrational or emotional purchases. irrational or emotional purchases.

Brand management is for the marketing Brand management is for the marketing department. department.

Getting Free From the TrapGetting Free From the Trap

A critical factor for high-tech success is A critical factor for high-tech success is brand management. brand management.

From product-centric to promise-centric From product-centric to promise-centric business model.business model.

Brand = promise of valueBrand = promise of value

Beyond making the promise, must Beyond making the promise, must deliver the promise. deliver the promise.

What is a Brand?What is a Brand?

AMA definition = any name, sign, symbol, AMA definition = any name, sign, symbol, design, trademark, or combination thereof. design, trademark, or combination thereof.

Authors’ definition = a distinctive identity that Authors’ definition = a distinctive identity that differentiates a relevant, enduring, and differentiates a relevant, enduring, and credible promise of value associated with a credible promise of value associated with a product, service, or organization and indicates product, service, or organization and indicates the source of that promise. the source of that promise.

All associations consumers have for the brand.All associations consumers have for the brand.

Why is creating the promise of value more Why is creating the promise of value more challenging for high-tech products than challenging for high-tech products than for other types of products such as for other types of products such as consumer packaged goods?consumer packaged goods?

What does “value” mean for the typical loyal customer?

What is the essential nature and character of the brand?

What are the tangible, verifiable, objective, measurable characteristics of products, services, ingredients, or components that carry this brand name?

What benefits to the customer or solutions result from the brand’s features?

What psychological rewards or emotional benefits do customers receive? How does the customer feel?

Level 1

Level 2

Level 3

Level 4

Level 5

A Brand PyramidA Brand Pyramid

Understanding and Understanding and Managing the Brand SpaceManaging the Brand Space

Berthon, Holbrook, and HulbertBerthon, Holbrook, and Hulbert

The Brand The Brand SpaceSpace

Enacted(focus on what it

means rather than what it can do)

Functional(focus on what it

can do rather than what it means)

Reified(brand closely identified with

product)

Abstract(brand almost product-independent)

Enacted(focus on what it

means rather than what it can do)

Functional(focus on what it

can do rather than what it means)

Reified(brand closely identified with

product)

Abstract(brand almost product-independent)

The Reified-Enacted Brand

(brand is strongly linked to the material product/service and is used to generate meaning and identity)

The Abstract-Enacted Brand

(brand is independent of product, or even groups of products, and is used to generate meaning and identity)

The Reified-Functional Brand

(brand is strongly linked to the material product/service and is primarily utilized for its functionality)

The Abstract-Functional Brand

(brand is relatively independent of product, or even groups of products, and is primarily utilized for its functionality)

Applying the Brand SpaceApplying the Brand Space

Brainstorm at least one brand in each quadrant (not Brainstorm at least one brand in each quadrant (not suggested by the article). suggested by the article).

““Companies cannot so much manage a stable brand Companies cannot so much manage a stable brand image as negotiate an evolving one.”image as negotiate an evolving one.”

Consider the possible evolution/repositioning of each Consider the possible evolution/repositioning of each brand. What issues need to be considered? brand. What issues need to be considered?

Given the cautions and generalizations given by the Given the cautions and generalizations given by the authors, which directional migration makes the most authors, which directional migration makes the most sense? Is there a “best” quadrant?sense? Is there a “best” quadrant?