Branding

Brands are names generally assigned to

an individual good or service or to a
group of complementary products
 Procter & Gamble carries many brands
including Tide, Cheer, Bold, Crest, Old Spice
etc.
 One primary feature that keeps a brand strong
is that it contains something that has salience
(A pronounced feature or part; a highlight).
Salience occurs when customers are aware of
the brand and the brand has attributes.
What is a brand?

“An orange is an orange…is an orange. unless, …….., that

orange happens to be Sunkist, a name eighty percent of
consumers in the U.S.A. know and trust.”
 Well-known brands command a premium
price.
 Sony and Toyota are famous Japanese
brands that have built a huge brand-loyal
market.
 In India, we have great brands like:
 Lux
 Amul
 Nirma
 Maruti
 Jet Airways
Places have become brands:
 ‘Kerala, God’s own country’
 ‘Malaysia Truly Asia’
Many famous brands
United States Of America
 American Express (credit card)
 Apple (computer)
 Citi (banking)
 Coca-Cola (soft drink)
 Disney (entertainment)
 Ford Motor Company (automobiles)
 GE (household appliances)
 Gillette (shaving accessories)
 Google (internet)
 Heinz (food)
 IBM (computer)
 Intel (computer)
 KFC (fast food restaurant)
 Levi's (clothing retailer)
 Marlboro (tobacco)
 McDonald's (fast food restaurant)
 Microsoft (software)
 Nike (footwear)
 Pepsi (soft drink)
 Starbucks (coffee)
 Harley Davidson (motorcycles)

 Europe
 BMW (carmaker—Germany)
 BP (petrol—UK)
 Chanel (luxury apparel—France)
 Gucci (luxury apparel—Italy)
 HSBC (banking—UK)
IKEA (furniture—Sweden)
Louis Vuitton (leather goods and luxury apparel—
France)
MMA (insurance France)
Mercedes-Benz (automobile line—Germany)
Nestlé (food—Switzerland)
Nokia (mobile phones—Finland)
Philips (electronics—Netherlands)
SAP (software—Germany)
UBS (banking—Switzerland)
Volkswagen (carmaker—Germany)
Japan
Canon (photography)
Honda (automobiles)
Matsushita (electronics)
Nintendo (video games)
Nissan (automobiles)
Sony (electronics)
Toyota (automobiles)
South Korea
Hyundai (automobiles)
LG (electronics)
Samsung (electronics and mobile phones)
Brand is a friend!
 Imagine you are having lunch with a long-time and very
good friend. Several times throughout the lunch, she
makes disparaging and sarcastic remarks that make
you feel bad. You think to yourself, “This just isn’t like
her. She must be having a bad day”. You meet with her
again a week or two later, and again she acts in a
negative and bad tempered way. You think to yourself,
“Something must be going on in her life that she’s
struggling with. May be she is having difficulties with her
job or her health or her marriage or her children.” You
may even ask if everything is all right. She snaps back,
“of course it is”.
 Your interaction with her continues in this vein
over the next couple of months. You continue to
try to be supportive, but she is definitely getting
on your nerves. After many meetings and much
interaction, you finally decide that she is a
changed person and someone with whom you
prefer to spend less and less time. You may get
to this point after a few months, or perhaps even
after a year or more. She does not change, and
eventually the relationship peters out.
 Now consider a moment that the person you first had
lunch with you was the same person before, with one
exception: she was a total stranger to you. You had
not met her previously and she was not your dear
friend. I would guess that after enduring many caustic
moments and being insulted a few times at that lunch,
your first impression would not be very positive. In fact
you would probably be inclined to not to get together
with that person again. You would probably walk away
from that lunch thinking “What a miserable person. I
hope I don’t run into her again.”
 In both of theses scenarios, it is the same person behaving
the same way in the name situation. Yet in the first scenario,
you are very quick to forgive the behavior. In fact, you feel a
lot of concern towards her. In the second scenario, you
cannot wait for the lunch to be over and you hope never to
meet her again.
In the first scenario, the person
was a long-time good friend. She had a lot of equity with you.
In the second scenario, she had no equity at all. You see, if
people or brands have a lot of equity – that is, if you know,
like and trust them – you will ‘cut them a lot of slack’ even if
they repeatedly fail to meet your expectations.
 If a person, product, service or organization
has no equity with you, no emotional
connection and no trust, then you are much
less inclined to forgive unmet expectations.
Brand equity creates a relationship and a
strong bond, which grows over time.
Developing a strong brand name

 What are the brand’s most compelling

benefits?
 What emotions are elicited by the brand
either during or after purchase?
 What one word best describes the
brand?
 What is important to consumers in the
purchase of the product?
Brand name associations
 Brand name should be associated with the product or service’s
most prominent characteristic.
 Brands have:
 Attributes – Mercedes suggest expensive, well-built,
etc
 Benefits – Mercedes is durable – I do not have to buy
another car for several years
 Values – Mercedes stand for high performance,
safety, and prestige
 Culture – represents German culture of organized,
efficient, high quality
 Personality – a no nonsense boss, a reigning lion, etc.
 User – 55 year old top executive of a company
 Five levels of customer attitude toward a
brand, from lowest to highest:
 Customer changing brands due to price
reasons – no brand loyalty
 Satisfied customer – no reason to change
brands
 Customer is satisfied and would incur costs by
changing brand
 Customer sees the brand and sees it as a
friend
 Customer is devoted to the brand
Value of brand equity
 Brand equity is an asset. Brand equity can be
defined as the positive differential effect that
knowing the brand name has on customer
response to the product or service. Brand
equity results in customer’s showing a
preference for one product over another when
they are basically identical. The extent to
which customers are willing to pay more for
the particular brand is a measure of brand
equity.
To brand or not to brand?
 When branding costs, why should sellers brand their
products?
 Brand names help sellers to process orders and track
down problems
 Brand name and trade marks provide legal protection
from competition
 Gives opportunities to attract loyal and profitable
segment of customers
 Helps to segment markets
 Strong brands help to build corporate image, making it
easier to launch newer brands and gain acceptance by
customers and distributors
What is brand Equity?
 As brand equity is a set of assets,
investments are hence required to create
and enhance these assets.
Major asset categories are:
 Brand name awareness
 Brand loyalty
 Perceived quality
 Brand associations
 The assets and liabilities of the brand equity
must also be pretty well linked to the name
and symbol of the brand. Therefore a change
in the name or symbol of the brand can lead to
degradation or even loss of assets and
liabilities.
 Brand equity creates value for the customer as
well as the firm.
 The word customer refers to the end users
and channel members.
 For a hotel, both the customers and travel
agents are equally important.
Brand awareness

 Awareness refers to the strength of a

brand’s presence in the consumer’s
mind.
 Awareness can be measured in several
ways:
Brand recall
 A brand is said to have recall if it comes to
consumer’s minds when its product class is
mentioned.
 Example: Product class:
Tooth paste; brand recalled
“CloseUp”
 If the brand possesses recall, then it figures in
the shopping list or receives a chance to bid in
a contract.
Brand name dominance

Ultimate awareness level is brand name dominance,

when only one name is remembered in a recall task.

Examples: A-1 Steak Sauce, Kleenex, Xerox, Aspirin,

Cellophane, Escalator, etc. But it is difficult to save
such great names as there are no ways to legally
protect them!
Perceived Quality

Perceived quality is a brand association

that is credited to drive financial
performance. It may provide a strategic
thrust for the business and also it is
linked to other aspects of how a brand is
perceived
 Companies mention quality aspects in mission
statement
 Perceived quality is the key positioning for
corporation brands such as IBM,
Toshiba, and Ford.
 Some brands are price brands while others are treated
as prestige or premium brands.
 Perceived quality is usually at the heart of what
customers are buying and is therefore a bottom-line
measure of “goodness” spread through all elements
that constitute a brand.
Brand Loyalty

 A brand’s value to a firm is largely created by the

customer loyalty it commands.
 Highly loyal customer base can be expected to
generate very predictable sales and profit stream. It is
much less costly to retain customers than attracting
new ones.
 Generating new customers may be a
good idea; but neglecting the existing
ones will prove to be a costly mistake.
Retaining the clients will raise the
barriers for the competitors to enter the
scene.
Brand associations

 Brand equity has to be supported by

associations that consumers make with
brands.
 Associations may include product attributes, a
celebrity spokesperson, or a particular symbol.
Brand associations are driven by brand
identity. A key to building strong brands is to
develop and implement a brand identity.