Managing Brands and Their Roles

The Role of Brands

• Brands identify the maker of a product, simplifying handling and organizing accounting.
• Legal protection is offered to brands through registered trademarks, patents, copyrights, and proprietary designs.
• Brands signify quality, leading to consumer loyalty, predictability in demand, and creating barriers to entry in the market.
• Loyalty to brands enables companies to secure price premiums of 20%-25% more than unbranded alternatives.

Brand as a Strategic Asset

• Brands are significant assets, earning substantial revenue for companies, with names such as Surf Excel (HUL) generating ₹3000 Cr annually.
• Brand loyalty leads to predictable revenue streams, contributing significantly to a company’s total income.
• A strong brand image cannot be easily replicated, providing a competitive advantage.

Brand Value and Categories

• Brands deliver value and distinction to customers, influencing purchasing decisions and loyalty.
• Brands are categorized based on the value they provide:
  • Functional brands (e.g., Gillette, Maruti) focus on product efficiency.
  • Image brands (e.g., Coca-Cola, Pepsi) create value through perceived image.
  • Experience brands (e.g., Singapore Airlines, Starbucks) emphasize unique customer experiences.

Brand Equity and Power

• Brand equity represents the monetary value of a brand, encompassing all intangible assets.
• Positive customer-based brand equity (CBBE) occurs when consumers respond favorably to branding, while negative CBBE reflects unfavorable reactions.
• Brand power refers to the additional value contributed by brand recognition and its influence on consumer behavior.

Measuring Brand Equity

• Three approaches to measure brand equity include:
  • Cost approach examines expenses related to brand development.
  • Market approach estimates equity based on the difference in sales of branded vs. generic products.
  • Financial approach evaluates brand equity's present value based on future earnings.

Brand Design and Elements

• Effective branding involves creating a memorable, meaningful, and likable brand mantra that communicates uniqueness.
• Brand elements should be adaptable, protectable, and transfer to multiple markets.
• Brand characters distinguish brands and enhance engagement by adding human traits.

Managing Brand Portfolios

• A brand portfolio encompasses all brands a company offers in a particular market, often necessary to target diverse segments.
• Strategies for managing brand portfolios include:
  • House-of-brands strategy with individual family brand names.
  • Branded-house strategy that utilizes a corporate umbrella name.
  • Sub-brand strategy combining family or individual brand names.
• Different approaches include individual brand names, family brand names, company name branding, umbrella branding, and private labels.

Cobranding

• Cobranding involves partnering two or more brands for mutual marketing benefits, which can include ingredient branding or joint ventures.

Brand Dynamics

• Brand repositioning strategies include back-to-basics or reinvention approaches to refresh a brand image.
• Brand extensions can lead to advantages but also downside risks like dilution of brand identity.

Brand Extension Types

• Line extension involves adding variations within the same product line (e.g., Surf Excel variations).
• Category extension pertains to extending a brand into related product lines (e.g., Maggi expanding from noodles to sauces).
• Unrelated line extension stretches a brand into entirely different categories (e.g., Wipro moving from computers to talcum powder).

Brand Rejuvenation and Relaunch

• Brand rejuvenation aims to revive interest in a brand showing decline, maintaining relevance in consumer perception.
• Relaunching incorporates improvements or changes to brands that have struggled, often supported by new marketing strategies.

Luxury Branding

• Luxury brands are characterized by their quality and uniqueness.
• Effective management balances the exclusivity and broad appeal of luxury brands to sustain their desirability.