Understanding the Brand

▪ The practice of branding, in one form or another, has been around for a long time.
Marks have been found on pottery from
▪ ancient Greek and Rome,
▪ on early Chinese porcelain,
▪ and on Indian artifacts dating back to about 1300 B.C.
▪ The period from 1840 to 1899 set the foundation for the beginning of modern
branding concepts.
▪ Due to improvements in production processes, it became possible to manufacture
large quantities of consistent quality and at lower costs.
▪ Advances in communication and transportation facilitated the distribution of
products in larger areas.
▪ By the end of the 19th century, most countries had included trademark acts in their
legislation in order to legally protect brands.
▪ brand management exclusively referred to the mere marking of products.
▪ manufacturer name and reputation were the key factors to ensure business success,
brands were created for and defined by their function of indicating origin.
▪ In this period from the beginning of the 20th century until the mid-1960s, a brand
had been officially defined, and certain product attributes were required from a
good in order to be named a brand.
▪ Manufacturers’ focus was subsequently on the product. Customer needs and wants
were of secondary importance.
▪ The brand concept of this time was a very static one. Companies did not react to
changing outside conditions, and they did not adapt their brands to new
requirements resulting from them.
▪ From the mid 1960s on, companies had to face a range of important changes that
seriously affected their profitability and business future. A continuously advancing
technology paired with economic recession had lead to more intense competition,
causing a shifting from a seller’s to a buyer’s market.
▪ Customers had more choices than ever before. They could compare a range of
products and buy the one that best fulfilled their needs.
▪ Management started to consider the effect that brands have on patrons. It now
became a dynamic, customer-oriented process. Marketing activities such as market
research, product development, pricing and distribution strategies were included
in the management process.
▪ With organizations now considering the effects of brands on customer behavior, a
new approach to managing them emerged in the mid 1970s. Companies began to
regard brand image as the central component of a brand’s success.
▪ Research had led to the conclusion that all marketing parameters have an influence
on brand image. As a result, brand management was considered equal to
marketing, and brands were thus managed exclusively by the marketing
department.
▪ The importance of brands within an organization increased considerably, and so
did the amount of attention that was being granted to managing them.
▪ The strategy-orientation developed parallel to the image-orientation approach,
trying to compensate some of its major deficits. Instead of reacting to short-term
changes in customer preferences, this epoch is characterized by a strongly
strategic approach to brand management.
▪ Brands were now considered an organization’s most important asset, and managing
them thus became the responsibility of general management instead of the
marketing department alone.
▪ This change allowed for prompt reactions to occurring problems but also this
approach has disadvantages.
▪ Managers now developed the idea that it was possible to create a unique and
consistent brand personality and therefore a complete entity similar to a human
being.
▪ Products had become increasingly similar without showing noticeable differences
in quality. Competition was high. Globalization added numerous products to the
already highly competitive market.
▪ Brand identity now became the basis of strategic brand management.
▪ A name, term, symbol, design
▪ A brand is a product enriched with a unique identity in order to create a

meaningful point of differentiation from competing products that are

designed to satisfy the same need.

▪ It mirrors the company’s values, mission, and vision, and uses verbal and

graphic tools for representation and facilitation of identification.

◼ Tangible attributes
◼ Intangible attributes
Eg.
◼ Product
◼ Packaging
◼ Labelling
◼ Attributes
◼ Functional benefits
Eg.
◼ Quality
◼ Emotional benefits
◼ Values
◼ Culture
◼ Image
▪ Branding, as derived from the verb “to brand,” describes the process of marking a
product.
▪ It comprises all measures that are necessary for establishing a brand, including the
development of a “mark (logo), symbol, set of words, or combination of these to
differentiate ... (a product, the author) from others
 Branding

Brand That part of a brand that can be spoken,

Name including letters, words, and numbers.

Brand The elements of a brand that

Mark cannot be spoken.

The value of company and brand names.

Brand
Awareness, quality, loyalty, patent and
Equity trademark.
▪ The purpose of branding is “to teach consumers ‘who’ the product is ... as well as
what the product does and why customers should care.”
▪ Provides consumers with better knowledge of the product and consequently
facilitates their decision making process.
▪ It equips a good with important differentiating qualities judged from a customer-
perspective.
 Benefits of Branding
◼ Powerful asset/tool in establishing
◼ competitive advantage-
▪translates into brand equity ( the value of the company and
brand names)
◼ Product identification!
▪Consumers familiar with brand
▪Often equates to quality
◼ Global brand
▪= 20% of product sold outside home country
▪Acts as an ambassador
 Advantages of Branding
◼ Consumer’s viewpoint
1. Product quality and consistency
2. Increased shopper efficiency/identification
3. Calls attention to new products
4. Reduces psychological risk
◼ Seller’s viewpoint
1. Handling orders, tracking down problems
2. Trademark – legal protection and unique product feature.
3. Brand equity and brand loyalty
4. Reduces need for in-store contact
5. Facilitates segmentation, promotion, and pricing
BRAND EQUITY
▪ Brands, if managed well, add value to the product
▪ The value, as perceived by the customers is important as it impacts the customer’s
evaluation of the brand
▪ (Keller 2004) defines brand equity from the customer’s perspective as ‘the
differential effect the brand knowledge has on consumer response to the
marketing of that brand’
▪ The Brand awareness is the 1 st critical condition for achieving brand success
▪ It includes:
Brand recognition - it is the ability to confirm to prior exposures (Yes, I have seen it
earlier)
Brand recall – it is the ability to remember the brand when the product category is
thought about
▪ Top of the mind recall
Dominant in the mind
(

Top of the mind

(

Brand Recall
( , )

Brand Recognition
( , )

Unaware of the brand

( )
▪ It is at the bottom level of the pyramid
▪ When a person is able to confirm the prior exposure, the brand is said to have
been recognized
▪ It is particularly important under low involvement buying situations, especially
when decision is taken stores or at the point of purchase
▪ Recognition means some sense of familiarity which sometimes is sufficient in
choice decision
▪ In brand recognition test, ability of the consumers to identify the brand elements is
tested
▪ That is, upon seeing the brand elements like- name, packaging, symbol, etc
▪ A more rigorous test of brand awareness is brand recall
▪ Recall related to the ability of the customer or prospect to retrieve the brand from
memory
▪ Brand recall may be tested in two forms:
✓ Aided recall
✓ Unaided recall
▪ A higher level of awareness is Top of the mind recall
▪ It indicates the relative superiority a brand enjoys over others
▪ Sometimes a brand is able to achieve such a dominant position that it becomes the
only recalled brand in the product category
▪ According to Aaker (1991), the quality of the brand as perceived by the customers
also leads to brand equity
▪ If the perceived quality is high, it will lead to ‘price premium, price elasticity, and
brand usage’ and it will be available across the product classes though the
importance may vary
▪ “Perceived quality can be defined as the customer’s perception of the overall
quality or superiority of a product or service with respect to its intended
purpose, relative to alternatives. Perceived quality is, first, a perception by
customers”
▪ Brand association is anything which is deeply seated in the customer’s mind about
the brand
▪ Brand should be associated with something positive so that the customer relate
your brand to being positive
▪ Brand associations are the attributes of a brand which comes into the consumers
mind when the brand is talked about
▪ Brand association can also be defined as the degree to which a specific
product/service is recognized within its class or category
▪ Customers contact with the organization and its employees
▪ Advertisements
▪ Word of mouth publicity
▪ Price at which brand is sold
▪ Celebrity/big entity association
▪ Quality of the product
▪ Products and schemes offered by competitors
▪ Product class/category to which the brand belongs
▪ POP (point of purchase), display, etc
▪ Brand associations are not benefits, but are images and symbols associated with a
brand or a brand benefit
▪ Associations are not “reasons –to – buy” but provide acquaintance and
differentiation that’s not replicable. For example:
▪ Hyatt hotel – luxury and comfort
▪ BMW – sophistication, fun driving, superior engineering Most popular brand
associations are with the owners of the brand
Positive brand associations are developed if the product which the brand depicts is
durable, marketable, and desirable
▪ The customer must be persuaded that the brand possess the features and
attributes satisfying their needs
▪ A positive brand association helps an organization to gain goodwill, and obstruct
the competitors entry into the market
▪ The importance of the brand loyalty as a construct of brand equity has been
delineated by Aaker (1991), who treated it as a behavioral dimension
▪ However, brand loyalty as an attitudinal dimension has also been identified and
defined
▪ As ‘the tendency to be loyal to a focal brand , which is demonstrated by the
intention to buy the brand as the primary choice’
▪ Thus, if the consumer has the tendency to buy the brand again and again it will
lead to brand equity