Marketing Management Unit 7

Unit 7 Introduction to Branding

Structure:
7.1 Introduction
Objectives
7.2 Definition of a Brand
7.3 Development of a Brand
7.4 Types of Brands
7.5 Importance of Brands and Branding
7.6 Merits and Demerits of Branding
7.7 Brand Equity – Definition and Benefits
Definition
Benefits
7.8 Summary
7.9 Glossary
7.10 Terminal Questions
7.11 Answers

7.1 Introduction
In the previous unit, we have learnt about the product and the decisions
made in the product’s marketing strategy. In this unit you will study the
definition of a brand and its relevance in the marketing of the products of an
organisation.
Product refers to the offer made by the company to the consumers.
Branding is a part of the marketing strategy. It has several components
associated with it such as the logo, brand name, packaging, labelling and
additional features. A product can be identified by the unique name, attribute
or symbol which is associated with it. This unique identifier of the product is
termed as the ‘brand’. The brand is a symbol of the product and its nature
has to be preserved for the benefit of product marketing. In this unit, we will
first define the meaning of branding and understand its importance in the
marketing strategy of a product. Then, we will recognize the advantages and
disadvantages of branding for a product and also identify the benefits of
brand equity.

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Objectives:
After studying this unit, you should be able to:
 define brand and state its importance
 describe the merits and demerits of branding
 recall benefits of brand equity

7.2 Definition of a Brand

In earlier times, people bought products and as the demand was greater
than supply, companies had a virtual monopoly of the market. It was not
necessary to have a brand, as people purchased the product based on their
needs. However, when supply became greater than demand, it became
necessary for companies to acquire and retain customers. In order to create
consumer loyalty, it became necessary to ensure that there was a corporate
personality for the company. Such a personality or image created for the
company came to be known as its Brand.
The term brand has a broad meaning and is applied to all visible
identification such as trademarks, symbols, pictures, package designs and
signage with distinctive lettering. The brand ensures that the product has
higher recall in the minds of the customers and that there is a guarantee on
quality and standards as per the advertising for the brand.
Branding provides a specific name to the product or group of products in an
organisation. By using a specific name, the product can be defined uniquely
and can be distinguished from those of competition. A brand that is well
promoted earns a name in the market place and becomes difficult to
compete with.
A brand is a symbol of ownership and quality. It cannot be equated to the
product as it is a more comprehensive term which conveys positioning of the
product in the market place. The consumer relates the brand name to the
product.
Often, the brand is used synonymously with trademark. However, there are
certain differences between the brand and the trade mark of the company.
Trade mark of a company is the brand name of the company which has
been registered under Trade Marks Act. The trade mark is a type of brand
which has legal status and is the exclusive property of the company. Other

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organisations cannot use the registered trademark of a company. The

registered trade mark is represented by the letter R within a circle, i.e.®.
The brand is the best tool which helps to attract the consumer’s attention to
the product. It serves to create an image for the product in the market.
Branding cannot be undertaken as a superficial exercise, as brand is the
unique signature of the product and is a symbol of the creative process of
product development. While the company makes the product, the brand is
the value of the expectations or service perceived by the consumer, for
which the customer buys the product.
A good brand helps to motivate the buyer to purchase a particular item and
helps to strengthen user loyalty. Equate the brand of a company with a
person. Just like a person, the brand has a unique personality. It has traits
and characteristics similar to an individual. It also has a story and a visual
image such as the colors, fonts and visual elements which make up the
brand. The brand is a live component of the company and has as much life
as its employees. In the following sections, we will discuss the development
of brands as well as the importance of brands in marketing strategy of the
company.
Self Assessment Questions
1. The personality or image created for the company is called as its
________________.
2. ___________________ is the brand name of the company which has
been registered under Trade Marks Act.
3. The visual image of the brand consists of __________________,
________________ and _____________________.

7.3 Development of a Brand

The brand is the symbol of the product’s personality. It is developed though
diligent market research and is based on the customer’s needs and wants.
The various steps which are undertaken in the formation of a brand name
and logo are as follows –
a) Selection of brand name – The brand needs to convey a particular
meaning to consumers. The first step in the creation of the brand is to
select the elements such as brand name and logo. It is important to
choose a good brand name which is easy to remember, recall and

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pronounce. The brand name should also be precise and appealing to

the consumer and must communicate what the product stands for in the
market place.
A few famous examples are –
 Aqua guard – Guards water
 Ford Ikon – Indicates that the car is an icon or landmark image
 IBM – Acronym for the company’s name (International Business
Machines)
 Coca Cola – Use of the company’s name as brand name can also
create strong value
b) Selection of logo – A logo is the symbol of the brand represented as a
picture. Along with the brand name, the logo helps to identify the brand.
It is a creative symbol which reinforces the visual imagery of the brand in
the minds of the consumer. It becomes inseparable from the brand over
time. The logo must increase the brand’s relevance and staying power in
the market.
A few examples are –
 Girl with butter and sandwiches – Amul Butter

Fig. 7.1: Brand ‘Amul’

 Swoosh – Nike

Fig. 7.2: Logo of ‘Nike’

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 Dog listening to gramophone – HMV (His Master’s Voice)

Fig. 7.3: Logo of ‘HMV’

 Gattu (Little boy with paint brush and dripping can of paint) –
Asian Paints

Fig. 7.4: Logo of ‘Asian Paints’

c) Legal rights – The brand name and logo should be chosen so that it
can be registered and protected legally under the laws of the land.
d) Characteristics of the brand – The brand name should be unique,
have pleasant associations and should be appealing. A few examples
are Good Knight, Milkmaid, Maggi, Boost and Fair & Lovely. The brand
name or logo should not be used generically or commonly, as this leads
to the dilution of the brand value. A few examples of brand names which
are being used commonly are Xerox, Band-Aid, Aspirin, Kodak and
Eveready.
e) Permanence – The brand name and logo should be stable and should
not be affected by time. The brand should not be named after some item
which is in fashion or is chic at the moment as these may lose value
after some time. Some examples of enduring brands are Eicher, Singer
and Vicco Vajradanti.

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f) Positioning – The brand should project the value of the product in the
consumers’ minds. It is important to develop the right positioning
platform for the brand so that this value proposition reaches the
customer.
g) Brand portfolio – The brand portfolio of the company must be
strengthened by activities such as the right type of acquisitions,
monitoring through the various cycles of the product, correct distribution
and visibility, maintaining the product quality and analysing the
performance as well as the market perception of the brand.
The above factors must be reviewed and improved upon from time to time,
so as to build the brand equity of the organization’s flagship products.
Self Assessment Questions
4. A ____________ is the symbol of the brand represented as a picture
State True or False:
5. The brand name or logo should not be used generically or commonly,
as this leads to the dilution of the brand value.
6. The brand name and logo should be chosen so that it cannot be
registered and protected legally.

Activity 1:
The names of famous brands and their logos are not just mere words or
pictures. They have to be creative for the brand to have recall value in
the minds of the consumer. Let us look at some examples of famous
brands and logos –
a) Motorola decided to provide names such as Moto RAZR, ROKR,
PEBL and SLVR for its mobile handset models, instead of numbers.
b) BlackBerry was the name of choice from a list of 75 names, which
included Badge, Banjo, Outrigger, Vion & Waterfall!!
c) Google gave itself the name GuGe in China, as it wanted to have a
localised name to tap the Chinese market
Find out the story behind the brand logos of Air India (Maharaja),
Kelvinator (Penguin) and Onida (Devil)
(Hint: Please refer text book – Ramaswamy V. S. & Namakumari S.
(2009). Marketing Management – Global Perspective, Indian Context,
4th Edition. New Delhi: Macmillan.)

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7.4 Types of Brands

Companies spend considerable time and research on the development of
the brand. When the company is faced with increase in the number and
varieties of products, it becomes more difficult to establish unique brand
identity for each product. In order to overcome this issue, companies can
choose the type of brand that they wish to adopt for their products.
The various types of brands which can be adopted by a company are –
a) Individual brand names – In this type, each product of the company
has a unique or individual brand name. Here, there is no relationship
between the brands as each brand is promoted differently and
independently. Examples of companies which have opted for individual
brand names are:
 Nestlé - Nescafe, Maggi, Kitkat, Milo, Cerelac, Milkmaid are all part
of Nestlé & are individual brands for different products such as
coffee, noodles, chocolate, beverage, baby food and condensed milk
respectively.
 HUL – Dove, Lux, Pears, Lifebuoy, Liril & Hamam are bathing soaps,
Surf, Rin & Wheel are detergents, Close-up & Pepsodent are
toothpaste brands of HUL.
b) Family brand names – Here, different products of the same company
are marketed together under the same family name. Normally, this
method is followed for related products. This type of branding is
convenient for introducing new products in an existing line up. It helps to
reduce the cost of promotion of individual products. However, the
company has to ensure that all products are maintained at the same
quality so that failure of one product does not lead to the failure of
others. Some examples of family branding are –
 Airtel – Bharti Enterprises has integrated nine different businesses
such as mobile services, wireless, landline, data & broadband
services under the flagship brand of Airtel. This has made Airtel a
billion dollar brand.
 Amul – This is the brand for all dairy products such as butter, ghee,
cheese, paneer, chocolate and milk products manufactured by
National Dairy Development Board.

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c) Company name – The Company’s reputation is used as a brand so as

to enhance the image of the product. This is done only when the product
is in line with the corporate image. Examples of company name
branding are –
 Tata – Tata uses its corporate name for several products such as
salt, automobiles and trucks.
 GE – GE has diverse businesses ranging from industrial technology,
aviation, oil, insurance and financial services. All the businesses are
promoted under the GE flagship.
d) Umbrella brand – This denotes the grouping of different products under
a single brand. Also, the same product might have different name in
various markets. For example , Toyota calls its hybrid vehicles as Harrier
in Japan but as Prius in North America
e) Middlemen’s brand / Private label – In certain instances, the
manufacturer chooses not to brand the product and delegates this task
to the retailers or distributors. Such brands are called as store brands or
private label brands. This is used by small and medium businesses
which do not have a distribution network. Some examples of store
brands are private labels sold in retail chains such as Big Bazaar &
More.
We have now looked at the various types of branding which can be adopted
by companies for promoting their products. These types are used
individually by most companies. Some companies also use a combination of
the above types in order to evolve the branding strategy for their products.
Self Assessment Questions
7. In an _______________ brand type, there is no relationship between
the brands of a company, as each brand is promoted differently and
independently.
8. ______________________ denotes the grouping of different products
under a single brand.
9. The type of branding used for introducing new products in an existing
line up, is called as _________________________ (Choose the
correct answer)
a. Individual brand
b. Umbrella brand
c. Private Label
d. Family brand
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7.5 Importance of Brands and Branding

For the business, the brand enhances the value for the shareholders of the
company. It is a financial asset for the organization and can be bought or
sold like other assets. The brand is a lasting asset which can be traded
during crisis situations.
The brand is thus, invaluable because it helps to build customer trust and
customer preference. Brands ensure higher loyalty, as the consumers are
able to relate to the concept and values of the brand. Moreover, customers
become loyal to the brand due to frequent usage and this enhances the
product-customer relationship. The company can perform well in the
markets on the strength of a strong brand.
Brands also drive the price of products, as consumers are willing to pay
premium price for a better brand. If the company is able to deliver the value
proposition of the brand to the customers, then it can succeed in increasing
profits as the value of the product increases many times in the markets
based upon the strength of the brand.
The importance of branding is highlighted in the following points –
a. Corporate image – Branding helps in providing a positive corporate
image of the organization, if the product is promoted positively.
b. Market control – Branding helps the firm to establish control at the
market place as it aids in repeat sales and creates the market for the
product.
c. Fixing of prices – The company is able to fix a premium price for its
products if the brand does well at the market place. The price fixed due
to branding cannot be compared with competition easily as there would
be differentiation due to the brand value.
d. Addition of new products – It becomes easy for the corporate to add
more products to the existing line up so as to make promotions easier.
e. Identification / serving of new customer segments – Branding helps
in identifying and serving of new customer segments.
Hence, branding is one of the key strategies to be adopted by the firm as a
part of its overall marketing strategy. It helps to promote the product and
build value at the market place.

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7.6 Merits and Demerits of Branding

Branding is the most powerful tool of promoting the sales of the product.
The merits of branding are –
i. Advertising – Branding is the cornerstone of advertising and helps the
organization to address the needs of advertising and publicity.
ii. Product recognition and recall – Branding establishes a unique
identity for the product. This in turn helps to create customer
preference and demand for the product. It is the base of creation of
demand.
iii. USP (Unique Selling Proposition) – Branding provides the product
with its USP and establishes the competitive advantage of the product.
This competitive edge can be leveraged for further marketing of the
product.
iv. Quality – Branded goods and services tend to have uniform or
standard quality. The consumer will be satisfied that the purchase of
the branded item is conforming to the laid down quality standards.
v. Fresh stock – Due to brand awareness, the item tends to be fast
moving and the consumer is assured of fresh availability of the
product.
vi. Better service – As brands need to maintain a particular profile,
companies have to train its employees on providing better service to
the customers. The quality of service can enhance the overall brand
experience of the customer.
Thus, brands bring profits, protect from rivals, support new products and
provide new avenues of revenue. So, brands are treated as assets of the
firm. However, it cannot be claimed that branding is always beneficial to
customers. There are several instances in which branding goes against the
interest of the consumer.
The major demerits of branding are –
a) Lack of standardisation – Sometimes, vendors try to push inferior
items under a superior brand name as customers associate higher price
with higher quality. However, high pricing alone is not necessarily a
measure of quality, as sub-standard goods may be sold for higher
prices.
b) Burden of extra cost – Branding is a capital intensive activity as it
involves heavy investment in advertising, packaging and promotions.

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This cost is in turn borne by the customer as the retail pricing for
branded goods may be higher by 20% to 25%.
c) No product differentiation – Goods sold under different brand names
may all correspond to the same ingredients. There may not be many
differences between products. The brand experience can be misleading
and can lead people to believe that the brand is more valuable than it
actually is.
d) Price rigidity – With the increase in brand value of the product in the
market, the price may also increase substantially. The increase in prices
may only be due to branding and this leads to price rigidity.
However, the advantages outweigh the disadvantages and hence, branding
is an integral part of a successful marketing strategy.
Self Assessment Questions
10. Branding helps the firm to establish ________________, as it aids in
repeat sales and creates the market for the product.
11. USP stands for ____________ and is an important advantage of
branding (Choose the correct answer)
a. Unique Selling Proposition
b. Unequal Selling Pitch
c. Unidentified Shuttle Position
d. Unmanned Space Probe
12. The cost of advertising and promotions can increase the retail price of
products by _______ to ________%.

7.7 Brand Equity – Definition and Benefits

The brand must be positioned in a manner that it occupies a particular
space in the consumer’s mind forever. This concept is called as “Renting
mind space”. The positioning of the brand helps to answer questions such
as “What is the brand?” and “What is in it for the consumer?” By providing
the answer to these questions, the brand can differentiate its product from
that of competition. This perceived value of the product in the customer’s
mind is called as Brand Equity.
7.7.1 Definition
The brand equity is one of the important components of the brand. There
are several definitions of brand equity. As the brand is a mixture of physical

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and abstract concepts, brand equity can also be defined in the physical and
abstract planes.
Brand equity can be defined as the intrinsic value of the brand, expressed in
the value of money that the customer is willing to pay for choosing the brand
over its competition. It can also be defined as the set of customer behaviour
that allows the brand to earn better profits. Martin Roll, a well-known
author, defines brand equity on the basis of three components – customer
knowledge (awareness about the brand), customer preference (choice of
the brand over other brands) and financial potential (the result of the first
two factors on the brand).
7.7.2 Benefits
The market value of the brand shoots up due to its brand equity. Some
examples are 'Heinz’s takeover of ‘Glaxo’ food brands for Rs. 110 crores.
Godrej acquired the brands ‘Good Knight’ and ‘Hit’ for Rs. 80 crores from
Trans Elektra, and ‘Coco cola’ paid ‘Parle’ Rs. 40 crores for its soft drink
brands such as Gold spot, Thumb up and Limca. In the above instances,
most of the value has been paid for the brand equity and not for the tangible
assets.
Brand equity is a product of the effort in building the brand, over a period of
time. If the company has good brand equity, it means that there are material
benefits for the organisation. Brand equity enhances the bottom line of the
company. High brand equity indicates that the consumers are willing to pay
more for the brand. It contributes to the future efforts of the organisation in
building the brand. The brand equity is an important component which
measures the monetary heath of the company.
Thus, we have seen the importance of branding and its role in the
organisation’s marketing strategy. In today’s business environment, the
brand manager has to perform a more active role for value creation for the
brand, preventing the loss of identity and dilution of the brand and has to
engage in effective damage control, when necessary.
Self Assessment Questions
13. The concept that the brand must be positioned in a manner that it
occupies a particular space in the consumer’s mind continuously is
called as __________________.

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14. According to Martin Roll, the three components of brand equity are
________________, ________________ and _________________.
15. _____________ can be defined as the intrinsic value of the brand,
expressed in the value of money that the customer is willing to pay for
choosing the brand over its competition.

7.8 Summary
Let us recall the important concepts discussed in this unit –
 The brand is the image or personality of the company and can be
defined in physical and abstract aspects.
 The brand is developed by choosing the brand name and logo,
characteristics, permanence and positioning of the brand.
 Branding is important to enhance the corporate image of the
organization as well as in fixing price, controlling the markets and for
managing the brand portfolio.
 Branding has several merits and demerits.
 The brand value can be quantified in measurable financial terms which
correspond to the brand equity.

7.9 Glossary
Brand – A personality or image created for the company.
Brand Equity – Defined as the intrinsic value of the brand, expressed in the
value of money that the customer is willing to pay for choosing the brand
over its competition or the set of customer behaviour that allows the brand
to earn better profits.
Family brand name – Different products of the same company marketed
together under the same family name.
Individual brand name – An unique or individual brand name for each
product of the company.
Middlemen’s brand / Store brand / Private label – Here, the manufacturer
chooses not to brand the product and delegates this task to the retailers or
distributors. Used by small and medium businesses which do not have a
distribution network.

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Trade mark – Brand name of the company which has been registered
under Trade Marks Act
Umbrella brand – Grouping of different products under a single brand
USP – Unique Selling Proposition which provides the competitive advantage

7.10 Terminal Questions

1. What is the definition of a brand? How does a brand differ from a trade
mark?
2. What are the various stages in the development of the brand?
3. Discuss the importance of branding.
4. What are the important merits of branding?
5. Define Brand equity. What are the three components of Martin Roll’s
definition of brand equity?

7.11 Answers
Self Assessment Questions
1. Brand
2. Trade mark
3. Colors, fonts and visual elements
4. Logo
5. True
6. False
7. Individual
8. Umbrella brand
9. (d) Family brand
10. Market control
11. (a) Unique Selling Proposition
12. 20 to 25%
13. Renting mind space
14. Customer knowledge, customer preference and financial potential
15. Brand equity

Terminal Questions
1. A personality or image created for the company is known as its brand.
The term brand has a broad meaning and is applied to all visible
identification such as trade marks, symbols, pictures, package designs
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and signage with distinctive lettering. Trade mark of a company is the

brand name of the company which has been registered under Trade
Marks Act. The trade mark is a type of brand which has legal status and
is the exclusive property of the company. Other organisations cannot
use the registered trademark of a company. The registered trade mark is
represented by the letter R within a circle, i.e.®. For more details, refer
section 7.2.
2. Selection of brand name, selection of logo, legal rights, characteristics of
the brand, permanence, positioning and brand portfolio. For more
details, refer section 7.3.
3. The importance of branding is highlighted in the following points –
corporate image, market control, fixing of prices and addition of new
products. For more details, refer section 7.5.
4. The important merits of branding are – advertising, product recognition
and recall, USP, quality, fresh stock and better service. For more details,
refer section 7.6.
5. Brand equity can be defined as the intrinsic value of the brand,
expressed in the value of money that the customer is willing to pay for
choosing the brand over its competition. It can also be defined as the set
of customer behaviour that allows the brand to earn better profits. Martin
Roll- a well-known author defines brand equity on the basis of 3
components – customer knowledge (awareness about the brand),
customer preference (choice of the brand over other brands) and
financial potential (the result of the first 2 factors on the brand). For more
details, refer section 7.7.

References:
 Ramaswamy V. S. & Namakumari S. (2009). Marketing Management –
Global Perspective, Indian Context, 4th Edition. New Delhi: Macmillan.
 BIBLIOGRAPHY Sherlekar S. (2000), Marketing Management. Mumbai:
Himalaya Publishing House.

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