10

Building Strong Brands

Marketing Management, 16th ed

 Learning Objectives

• Explain the role of brands in creating

market value.
• Describe the key principles in designing
brand elements and associations.
• How is brand equity built, measured,
and managed?
• Discuss how a company should design
the hierarchy of its brands.

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 Learning Objectives Cont.

• Explain how a company should

manage its brands over time.
• Describe the key aspects of luxury
branding.

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 How Does Branding Work?

A brand is a name, term, sign, symbol

or design, or a combination of them,
intended to identify the goods or
services of one seller or group of
sellers and to differentiate them from
those of competitors.

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 THE ESSENCE OF BRANDING

• Branding is the strategic

creation of a unique
identity that differentiates
products, influences
consumer choices, and
adds value to a firm.
Tapal Tea.
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 ESSENCE contd.

• Historical Roots:
Brands have long
signified quality and
origin, from medieval
trademarks to artists’
signatures. Multani
Ceramics,
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 Essence contd.

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 Essence contd.

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 Essence contd.

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 The Role of Brands for
Consumers
• Brand Promise with
consumer and risk reducer.
• Learning advantage & Past
experiences.
• Personal Meaning i.e.
human-like Character.
• Brand relationships

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 The Role of Brands for Firms

• Product Handling,
inventory & Accounting
record.
• Signify quality
• Create barriers to entry
• Serve as a competitive
advantage
• Secure price premium
• Legal property

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 BRAND EQUITY AND BRAND
POWER
The monetary value of a brand is called
brand equity and reflects the premium
that is placed on a company’s valuation
because of its ownership of the brand.
Brand equity encompasses the net
present value of the total financial returns
that the brand will generate over its
lifetime.

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 Measuring Brand Equity

The cost approach calculates brand equity

by examining the costs of developing the
brand, such as marketing research, brand
design, communication, management, and
legal cost.

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 Measuring Brand Equity

The market approach estimates brand

equity by measuring the difference between
the sales revenues from a branded offering
against those of an identical unbranded
offering, adjusted for the expense of building
the brand.

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 Measuring Brand Equity

The financial approach evaluates brand

equity as the net present value (NPV) of a
brand’s future earnings.

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 Brand power

• Brand power reflects the degree to which

the brand influences the way consumers
think, feel, and act concerning the
brand.
• Brand power is thus the differential effect
that brand knowledge has on consumer
response to the marketing of that brand.

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 Measuring Brand Power

• A brand audit is a focused series of procedures

to assess the health of the brand, uncover its
sources of brand equity, and suggest ways to
improve and leverage its equity.
• In brand tracking, the brand audit is used as
input to collect quantitative data from consumers
over time, providing consistent, baseline
information about how brands and marketing
programs are performing.

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 Designing the Brand

• Marketers build brand equity by

creating the right brand
associations in consumers’ minds.
The success of this process
depends on all brand-related
contacts with consumers whether
marketer-initiated or not.
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 DEFINING THE BRAND MANTRA
• A brand mantra is a three- to five-
word articulation of the heart and
soul of the brand and is closely
related to other branding concepts
like “brand essence” and “core
brand promise.”
• The mantra’s purpose is to guide
the actions of all employees within
the organization, and of all external
marketing partners, by ensuring
that they understand what the
brand fundamentally should
represent consumers.

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 Brand Elements

• Brand names • Symbols

• Slogans • Logos
• Characters • URLs

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 Brand Element Choice Criteria

• Memorable
• Meaningful
• Likeability
• Transferable
• Adaptable
• Protectible

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 CHOOSING SECONDARY
ASSOCIATIONS

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 Brand Hierarchy
It reflects how a
company’s brands
are related to a
company’s
products and
services, as well
as to one another.

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 MANAGING BRAND PORTFOLIOS

• The brand portfolio is the set of all

brands and brand lines that a particular
firm offers for sale in a particular
category or market segment.
• Building a good brand portfolio requires
careful thinking and creative execution.

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 house-of-brands strategy

• involves individual
or separate family
brand names.
Consumer
packaged goods
companies have a
long tradition of
branding different
products by
different names.

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 branded-house strategy

• It involves a corporate umbrella or company

brand name. Many firms, such as Heinz and
GE, use their corporate brand as an umbrella
brand across their entire range of products.
• Development costs are lower with umbrella
names because there’s no need to research
a name or spend heavily on advertising to
build recognition.

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 sub-brand strategy

• A sub-brand strategy combines two or

more corporate, family, or individual
product brand names. Toyota and
Lexus, courtyard by marroit

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 COBRANDING

• Marketers often combine their brands

with brands from other companies to
create superior market value.
• Cobranding—also called dual branding
—involves two or more brands
marketed together. Eg Nike and
PlayStation

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 The Essence of Cobranding

• Same-company cobranding.i.e,Betty
Crocker and Hershey’s.
• joint-venture cobranding.
• multiple-sponsor cobranding. HBL PSL
• retail cobranding. McDonald and Coke

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 Brand Dynamics

• Most brands don’t stay the same; they

evolve over time. The two most
common ways in which brands evolve
are through brand repositioning and
brand extensions.

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 BRAND REPOSITIONING

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 BRAND EXTENSIONS

• When a firm uses an established brand

to introduce a new product in a different
category or price tier, the resulting
offering is called a brand extension.
Honda cars and bikes.

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