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Chapter 7
The power of branding
TEACHING RESOURCES QUICK REFERENCE GUIDE
Resource Location
Purpose and Perspective Instructor’s Manual
Lecture Outline Instructor’s Manual
Discussion Starters Instructor’s Manual
Class Exercises Instructor’s Manual
Chapter Quiz Instructor’s Manual
Answers to Issues for Discussion and Review Instructor’s Manual
Suggested Answers to Marketing Applications Instructor’s Manual
Answers to Developing Your Marketing Plan Instructor’s Manual
Written Case Study Instructor’s Manual
Video Case Instructor’s Manual
Interactive Marketing Plan Companion website
Examination Questions: Essay Companion website
Examination Questions: Multiple-Choice Companion website
Examination Questions: True–False Companion website
PowerPoint Slides Companion website
Chapter-specific video segment Companion website
Note: Web resources may be found on the accompanying student and instructor websites at
http://login.cengage.com.
LECTURE OUTLINE
I. THE STRATEGIC POWER OF BRANDING
A. Definitions of Branding Terms
1. A brand is a name, term, symbol, design, or other feature that identifies one
marketer’s product as distinct from those of other marketers.
2. A brand name is that part of a brand that can be spoken, including letters,
words, and numbers.
3. A brand mark is an element of a brand that cannot be spoken, often a
symbol or design.
4. A trademark is a legal designation indicating that the owner has exclusive
use of the brand or part of that brand and that others are prohibited by law
from using it.
5. A trade name is the full legal name of an organisation rather than the name
of a specific product.
B. Value of Branding
1. To Buyers
a) Brands help buyers identify specific products that they like and do not
like, which facilitates the purchase of those items that satisfy
individual needs.
b) A brand helps especially when a customer lacks the ability to judge a
product’s quality; that is, a brand may symbolise a certain quality level
to a purchaser, and the person in turn lets that perception of quality
represent the quality of the item.
c) A brand helps reduce a buyer’s perceived risk of purchase.
d) A brand can give buyers the psychological reward that comes from
owning a brand that symbolises status.
2. To Sellers
a) Brands identify each product for the sellers, which makes repeat
purchasing easier for consumers.
b) To the extent that buyers become loyal to a specific brand, the firm’s
market share for that product achieves a certain level of stability,
which allows the firm to use its resources more efficiently.
c) When a firm develops some degree of customer loyalty to a brand, it
can maintain a fairly consistent price for the product instead of having
to cut the price repeatedly to attract customers.
3. There is a cultural dimension to branding.
a) Brand experience is an individual experience and each consumer
confers his or her own social meaning onto brands. A brand’s appeal is
largely at an emotional level based on symbolic image and key
associations of the brand.
b) The term ‘cultural branding’ has been used to explain how a brand
conveys a powerful meaning that consumers find useful in cementing
their identities.
c) It is also important to recognise that because a brand exists
independently in the consumer’s mind, it is not directly controlled by
the marketer.
C. Brand Equity
1. Brand equity is the marketing and financial value associated with a brand’s
market strength.
G. Brand Resourcing
Strong brands demand resources and investment. However, investing in any
organisational effort requires justification, which might include internal debates
as to what constitutes justification. For this reason, evidence needs to be
gathered in making the argument for investment.
H. Brand Evaluation
Necessarily, brand evaluation is a continuous process where brand performance
is measured against key performance indicators (KPIs). Continuous monitoring
enables an organisation to identify whether or not a brand is on track to achieve
set objectives or not. Early identification that a brand is off track enables the
brand manager/marketer to ensure the brand marketing is promptly and
appropriately adjusted in order to bring it back on track.
People don’t buy products, they buy brands. Products are a cluster of
functional aspects whereas brands have meanings and emotional content
for consumers. For this reason, astute marketers need to investigate what
and how products are consumed in the consumer’s world in order to
identify what the brand means to consumers.
DISCUSSION STARTERS
Discussion Starter 1: Cigarette branding and demarketing
Watch the following video: http://www.abc.net.au/news/2014-01-30/the-consumer-
quarter/5228428
Discussion Starter 1: Brand Equity
ASK: What brands do you think are the top global brands and what brands do you think may
be on the way out?
Apple has experienced massive growth in recent years and is a top of the mind brand for
many consumers in several product categories such as smartphones, tablets, and user-
friendly computing. However, the following clip presents Interbrand CEO talking about the
fact that Apple may have reached the top of the game. Similarly for Blackberry, their grip on
the business market is not as strong as in previous years.
http://www.interbrand.com/en/knowledge/iq/2013/best-asian-brands/best-asian-brands-
2013.aspx
ASK: What do you think contributes to Apple’s ability to remain as a top of the mind brand?
Apple’s global presence is clearly the most important factor. Consumers are using and
consuming the Apple brand on the street, in the workplace and at home and therefore the
Apple brand has established a place in our everyday lives and routines. Other elements are a
globally recognised brand name, brand symbol, colours, logos, and a host of brand images
(polar bears, etc.) all uniquely associated with Apple. From the beginning, the Apple brand
has symbolically positioned as a brand of difference as is evident in the original 1984 launch
ad for Macintosh.
The following link provides the original 1984 ad and discusses how and why the ad was so
controversial.
http://mentalfloss.com/article/29867/how-apples-1984-ad-was-almost-canceled
Discussion Starter 3:
ASK: How do marketers build and sustain a brand?
Refer to Figure 7.2 and discuss the steps associated with the continuous process of brand
evaluation.
Discussion Starter 4:
ASK: How does branding fit as part of the marketing mix?
Branding is a powerful tool that is a fundamental element of the expanded marketing mix.
The brand is like the face of a product that holds a certain personality and positioning within
the marketplace and this is what consumers come to know and trust. Hence branding is a
fundamental element in the expanded marketing mix.
CLASS EXERCISES
Class Exercise 1: Brand equity
In this chapter you were introduced to the concept of brand equity. In this exercise you will
explore what contributes to, and devalues, brand equity.
Step One: Choose five brands (include one undesirable brand) that all members of your
group are familiar with.
Step Two: List all positive brand associations that group members have with each brand.
Now list all negative associations that group members have with each brand.
Step Three: Rank the chosen brands in order from most preferable to least preferable. How
often do members of the group consume the most preferable brand? Do any members of
the group consider themselves brand loyal consumers? If so, why? What benefit do they
receive from the brand?
Step Four: Does any member of the group possess negative feelings for any of the named
brands? What is this negative evaluation based on? How does this negativity influence
purchase and use decisions? What, if anything, could the brand do to overcome this
negativity?
Suggestion: Have the students work in groups to complete this task. Necessarily there will be
negotiation within the group to decide on the chosen brands. Once each group has chosen
their five brands and to begin therefore, instructors can ask the groups to now observe the
group’s criteria to identify chosen brands. This is then extended in Step 3 when students are
asked to rank the brands in terms of preference. Ask the groups to identify the criteria used
to rank their preferences.
Step 1.
Australia Zoo
Jimmy Choo
YouTube
Golden Circle
Winfield Blue
Step 2
Australia Zoo Jimmy Choo YouTube Golden Circle Winfield Blue
+ve -ve +ve -ve +ve -ve +ve -ve +ve -ve
Steve Steve Iconic Expensive Open source Uncensored Iconic Owned by Iconic Nicotine is
Irwin the Irwin now luxury option network Australian Heinz Australian addictive
legend passed on and brand brand
fabulous
shoes
Wildern Capital Available Lack of Consumer Not all Efficient Processed Consumer is If product
ess focus online customer participation consumer mass and indicative of used as
Warriors service generates participation production canned the directed, it
orientation the brand is positive process food is not Australian will KILL
culture and nor ethical the male
success healthiest machismo
option
Sunshine Location Men’s Positioned Global Cross Highly Aluminium Traditionally, Gillard
Coast somewhat and as female brand cultural visible link to highly visible government
location isolated women’s brand sensitivities packaging dementia packaging introduced
lines may be plain
violated packaging
regulations
Step 3
Students are asked to rank their brands in terms of preference. Either before or after ask the
groups to identify criteria used to rank preferred brands.
Step 4.
Again ask the students to observe their process of arriving at a negotiated outcome. Look at
the group decision-making process and consider the role adopted by each participant. Any
dominant or passive members? How does the group arrive at a decision? Are there
alternative ways of negotiation and/or arriving at a consensus?
Class Exercise 2: How do consumers become producers of the brand? Use an
applied example.
The emergence of social media has amplified the role of consumers as producers in the
generation of brands and brand culture. Brands such as Twitter and Facebook are
constructed via consumer participation, and without this high level of participation the
brand does not exist. Similarly, brands such as eBay and YouTube are produced via consumer
participation. The high level of consumer participation simply makes the brand successful.
More than that, offline brands are produced by consumers through the act of consumption.
When consumers buy a pair of Jimmy Choo shoes, for example, the consumer proudly walks
out of the boutique carrying a large chic carry bag with ‘Jimmy Choo’ in highly visible print.
Carrying this shopping bag down the street announces that this consumer has just
purchased a very expensive luxury pair of designer shoes. Every aspect of this consumer
announces a chic style and demonstrates who the consumer is that chooses the Jimmy Choo
brand and, in this way, the consumer produces the brand. Similarly, a skater boy heading off
to the skate park must necessarily announce his brand alliances via the Vans cap strategically
worn backwards on his head, with matching Vans skater shoes. Everything about this boy
demonstrates and effectively produces the Vans brand. While this is an exciting and
powerful realisation for consumers, for organisations this means releasing control of
constructing the brand which to some organisations may seem a high risk strategy but one
that also might deliver much reward.
Class Exercise 3: Daily grooming
Have the students work individually and write a paragraph or two about their daily grooming
routine and the brands that feature in that daily ritual.
Then group the students and have them compare the brands within the group that each
individual consumes on a daily basis. Ask the students to discuss what each of these brands
mean to them.
Sample daily grooming brands include:
– Colgate Total toothpaste
– Listerine mouthwash
– Garnier shampoo and conditioner
– Nivea face wash and moisturiser
– Gillette razor and shave cream
– Bonds underwear
– Panasonic plasma TV
– Ch9 Today Show
– Breville toaster
– Kellogg’s cereal
– Devondale milk
– Courier Mail newspaper.
Class Exercise 4: Conduct a quick brand audit. Choose one of your favourite brands
and the positioning of that brand. Then identify how that positioning is achieved.
For example, favourite brand = Harley-Davidson motorcycles.
The Harley-Davidson brand is positioned as an iconic American brand and legendary
brand of heavyweight motorcycles. This positioning is achieved with the extended
marketing mix as follows:
The product – The bike as a primary artefact (evidence) is a powerful machine (twin cam
engine), unique engine rumble and nostalgic design. The bike on the road demonstrates
a presence, especially in large groups. Part of the product is the HOGs (Harley Owners
Group) culture (refer end-of-chapter case). Product lines within the range are regularly
discontinued to ensure the value of the bikes are upheld. For example, The Dyna Sports
model is no longer available and therefore those in circulation are now a sought -after
and valuable model.
Promotion – Every bike on the road is a promotional vehicle for Harley-Davidson. Every
promotional message reinforces the mystical and adventurous journey of riding a Harley.
Online and offline promotional efforts are consistent. Take a look at the HD witty
billboards on your local highway (or search the Internet). For example, one HD ad
headline reads: ‘May wind be the only product in your hair’.
Price – Harley-Davidson is an expensive option which reinforces the premium positioning
of the bike and brand. The price of acquiring a Harley-Davidson bike also incurred by the
consumer is the price of the accessories such as safety gear and the price of the lifestyle,
including time commitment required.
Place – Harley-Davidson is an iconic American brand that has achieved global status via
the HOG movement.
People – Harley-Davidson has successfully shifted from a fringe outlaw product to
mainstream consumption. The people that consume Harley-Davidson are everyday
mums and dads, truck drivers, taxi drivers, nurses, accountants, local business owners
and even members of the police force and lawyers.
Process – Part of the deal when you buy a new Harley-Davidson is that consumers
receive one-year free membership to the HOGs. HOGs membership opens a lifestyle and
access to people of a similar mindset.
Physical evidence – Harley-Davidson offers a range of black leather accessories, HD
jewellery and after-market bike customisations.
CHAPTER QUIZ
1. The Nike swoosh that is prominent on all of the firm’s packaging, products,
and advertising is a
a. trade character
b. brand
c. trade name
d. brand mark
e. brand design
Answers are: 1. d; 2. e; 3. e; 4. a
that the brand exists and views it as an alternative to purchase. Brand preference, a
stronger degree of brand loyalty, exists when a customer definitely prefers one brand
over competitive offerings; however, if the brand is not available, the customer will
accept a substitute. Brand insistence, the strongest degree of brand loyalty, exists
when a customer not only strongly prefers a specific brand, but will not accept a
substitute.
5. Compare and contrast manufacturer brands and generic brands.
Manufacturer brands are initiated by producers and ensure that producers are
identified with their products at the point of sale. These brands usually require a
producer to become involved in distribution, promotion and, to some extent, pricing
decisions. Manufacturer brands include Golden Circle, Apple Computer, and Levi’s
jeans. A home brand, also known as a generic brand, indicates only the category of the
product (such as aluminium foil, tissue, or peanut butter) and does not include the
company name or manufacturer. Home brands are usually sold at lower prices than are
comparable brand names.
6. Identify the factors a marketer should consider when selecting a brand name.
When selecting a brand, marketers must consider a number of factors. The brand
name should be easy to say, spell, and remember. To avoid consumer confusion,
brands should be compatible with those of other products in the product line.
Choosing a name that suggests the product’s uses and special characteristics as well as
indicating the product’s major benefits is important. Marketers try to select a brand
that is distinctive enough to set it apart from competitors but avoids negative or
offensive implications. Finally, marketers strive to choose a brand that can be used and
recognised in all types of media. Because service brands are usually the same as the
company name, service marketers do not always have the flexibility to choose a brand
that meets all of the above criteria.
7. What is brand vision? What are the three key elements of brand vision?
Brand vision is about identifying a strategic future for the brand.
The three elements of the brand vision are:
• a strategic future for the brand
o here the brand is deliberately making a statement about
positioning in the marketplace and specific points differentiation
• the purpose of the brand
o the purpose of the brand takes a broad perspective and is
beyond profit alone
• the brand values
o need to reflect organisational values
interest in the brand may have been encouraged with intermittent price promotions
that enable the consumer to buy a quality brand of bread at a competitive price.
Loyalty develops over time, facilitated via the consumption of a quality product. There
comes a time when the consumer is not willing to consume any other brand of bread.
Sofitel is a global chain of hotels. In being available throughout the world and offering a
consistent product regardless of the city or country, the brand becomes a trusted
element in the world of the business traveller. Staying at any other brand of hotel
entails risk that the time-poor business traveller chooses against.
2. Mercedes Benz introduced the sub-compact and fuel efficient A-class series. Invent a
brand name for a line of luxury sports cars that would also appeal to an international
market. Suggest a name that implies quality, luxury and value.
In naming a luxury sports car, the marketer must consider the competition. Current
luxury sports cars include Lamborghini, Maserati and Ferrari. High-performance sports
cars might also include Honda and Lotus, whereas luxury cars might also include
Bentley and Aston Martin. Coupe or Spider are standard sports car brand suffixes.
Therefore, selecting a brand name for a luxury sports car means finding a niche within
these clusters of positioning that infers quality, luxury and value. Notably many luxury
car brands begin with A, such as Acura, Alfa Romeo, Audi, Alpina, Aston Martin, Ascari
and Avanti. Following this lead, the selected name could be Amenity. Releasing the
high performance Amenity Spyder means a two-door luxury sports car.
3. For each of the following product categories, choose an existing brand. Then, for each
selected brand, suggest a co-brand and explain why the co-brand would be effective.
a. Ice-cream
An existing brand in the product category of biscuits is Peter’s ice cream. The suggested
co-brand is Anzac biscuits. Co-branding is very much the trend in the ice-cream
confectionary product category. This suggestion puts a popular ice cream brand with a
popular biscuit brand. As well, the RSL could co-brand with this effort. As a
promotional platform, Peters could launch this co-branding effort with
ANZAC Biscuits on ANZAC Day.
b. Pizza
An existing brand in the product category of pizza is Eagle Boys Pizza. Given the primary
target market for Eagle Boys Pizza might be the 19–25 year market. Within this market,
beer and cola might also be high consumption items as might telecommunications, for
example, texting. Co-branding with any alcohol brand might not be considered
appropriate given underage consumption might be inadvertently encouraged. Co-
branding with Coke might overshadow the Eagle Boys brand. Hence co-branding with a
telecommunications brand by offering free sim cards or a phone card from Vodafone,
for example, would be appropriate. Currently as a cause related marketing effort, Eagle
Boys Pizza (https://www.eagleboys.com.au/) is co-branding with the Cerebral Palsy
Alliance.
c. Telecommunications
An existing brand within the telecommunications product category is Telstra. Telstra is
a large Australian organisation that began life as a government-owned monopoly. In
1997, the telecommunications industry was deregulated and now there are hundreds
of brands offering telecommunication services. Moving from operating as a monopoly
to a fiercely competitive market has meant Telstra has had to change from being highly
bureaucratic to a market orientation where customer service is the priority. However,
Telstra continues to struggle in this regard. Therefore co-branding with a brand that
ONLINE EXERCISE
4. The evolution of technology is changing the way we consume and the way marketing is
conducted. A daily routine for many consumers online today is a visit to Facebook and
Twitter. The implication for marketers is the need to join this online conversation. The
following questions address the consumer perspective and the business perspective.
a. For consumers, what do brands such as Facebook and Twitter mean to people?
How have these brands become part of our daily routine? How do consumers
access these brands as part of their daily routine?
Begin this exercise by asking students what does Facebook and Twitter mean to
them and ask whether or not visiting these sites are part of their daily routine.
Continue the discussion by asking why or why not. Seek to probe.
b. For businesses, how might brands such as Facebook and Twitter become part of
the organisational mode of operation? How have these brands become part of
the business and marketing world? What do marketers need to monitor in terms
of online consumer action and behaviour? Explain how this behaviour can be
monitored.
Given that consumers are incorporating Facebook and other social media sites such
as Twitter as part of their daily online routine, organisations too must seek to
incorporate this online routine as part of their normal mode of operating. Engaging
with consumers in this virtual world enables the organisation a perspective on the
conversations and interactions and transactions that take place within and
between consumers and other organisations. This is a window on the consumers’
world that has not been available prior and therefore must not be dismissed but
action taken immediately and comprehensively on a daily basis.
4 Check all elements of the extended marketing mix are reinforcing a consistent
message.
Does all brand communication reinforce the brand’s core values?
What is the essence of your brand and what is the central message of your brand. This
central message must be consistent in every marketing message and communication the
brand is associated with. In other words, every promotional message needs to consistently
reinforce the positioning and values of the brand.
5 What role do people and technology play in communicating your branded offer?
Do the people and technology involved support the brand’s core values?
People who consume the brand demonstrate how the brand is part of their life. People who
work for the brand perform what that brand is both formally while in uniform as well as
informally in their everyday lives. Employers can even monitor via social media sites the off-
duty antics of their employees and decide if this behaviour is in line with what the brand
represents or not. Technology also enables these roles and brand meaning to be
communicated between consumer-to-consumer as well as consumer-to-
employee/organisation.
6 What mechanisms are in place to reinforce the brand’s value after the
exchange?
What mechanisms need to be put in place to reinforce the brand’s values after an initial
exchange?
Keeping in touch with customers beyond the initial exchange is a significant part of the
consumption process and aides to ensure the customer has a favourable experience. By
explaining what and how the organisation will continue to communicate with customers,
students are detailing intended after-sales service.
logos, colours or fonts. Legislation has now effectively removed all marketing and
branding devices available to tobacco companies.
Incorporating the brand’s previous packaging characteristics into the brand name helps
consumers to identify the brand despite the uniform packaging. Cigarette manufacturers
are also competing in terms of product innovation. For example, new cigarette blends
have been introduced that allow users to change the flavour from normal to menthol by
simply pressing on the filter. Winfield have introduced the Optimum Crush, Peter
Jackson have released a new hybrid range, and Dunhill have released the Dunhill Switch.
Another effort in retaining brand loyalty, as well as encouraging brand switching
behaviour, is by altering the packaging content.
Lorien Latimer
There are various perspectives to take into consideration with regards to the
relationship between ethics and tobacco advertising. One argument may be that
advertising, and consequently the encouragement to purchase a proven potentially
harmful product, is an unethical practice. With knowledge of the adverse health effects
of smoking, tobacco companies are not acting ethically if they continue to market the
product to consumers.
At the time of writing, e-cigarettes containing liquid nicotine can only be purchased over
the internet, and cannot be sold over the counter in Australia. Only e-cigarettes that
contain no nicotine component may be retailed in Australia. E-cigarette branding and
advertising efforts are argued by e-cig manufacturers (which are typically tobacco
companies) as not unethical, as the product is a valuable and effective tool for
consumers trying to quit smoking. On the other hand, e-cigarettes look, taste, and feel
the same as cigarettes, therefore they promote the action of smoking which may be
viewed as unethical. If regulatory bodies were to allow e-cigarette branding, this may
underlie anti-smoking campaign efforts, and communicate that smoking is ok.
The government has a responsibility to put in place rules and regulations that reflect
what is in the best interests of the people whom they govern. In the discussion of
cigarette consumption, government may argue that they have a social responsibility to
protect the general public from the products harmful effects on the health. This is put
into action by strategies in reducing cigarette smoking adoption through anti-branding
efforts, as well as reducing second hand smoking by regulating where product
consumption can take place. The degree of control a government should have over a
private company branding efforts is highly debatable, and needs to take into
consideration economic, cultural and social implications.
3 Apart from diversifying into the e-cigarettes market, describe another strategy
cigarette manufacturers could implement in order to increase brand loyalty?
Avenues for visual cigarette brand differentiation have been tightly restricted. Tobacco
companies are being forced to turn to alternative product attributes in an attempt to
differentiate their brand from a competing brand. One possible approach may be a
pricing strategy. The tobacco products price can act as an intangible clue as to the
brands perceived characteristics. Positioning your brand as low price may foster notions
of value, and in turn lead to brand switching behaviors'. Alternatively, a premium price
strategy may indicate brand characteristics such as class and quality.
VIDEO CASE
New Belgium Brews up strong Brand Equity
Summary
New Belgium Brewing Company started on a bike trip through Belgium and has become
one of the most successful craft breweries in the United States. New Belgium has built
its remarkable success on great products, a fun brand image, and a strong commitment
to sustainability and quality. This case should help students recognise that even
relatively small businesses can build strong brands by staying focused on the firm’s
values and philosophies.
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