Understanding Brands and Brand Equity

• A brand is a name, term, sign, symbol, or design intended to identify goods or services of a seller and differentiate them from competitors.

The Role of Brands

• Brands identify the maker.
• Brands simplify product handling or tracing.
• Brands organize accounting.
• Brands offer legal protection.
• Brands signify quality.
• Brands create barriers to entry.
• Brands serve as a competitive advantage.
• Brands secure price premium.

Branding

• Branding is endowing products/services with brand power by creating differences between products.
• Consumers must be convinced there are meaningful difference among brands for branding strategies to be successful.
• Brand differences often relate to attributes or benefits of the product itself.
  • Gillette and Toshiba’s continual innovation.
  • Gucci, Chanel, and Louis Vuitton, are brands that understand consumer motivations and desires around their products.

What is Brand Equity?

• Brand equity is the added value endowed on products and services reflected in the consumer's thoughts, feelings, and actions.
• Customer-based brand equity is the differential effect that brand knowledge has on a consumer's response to the marketing of that brand.
• A brand with positive customer-based brand equity occurs when consumers react more favorably toward the product, and the way it is marketed, when the brand is identified.
• A brand has negative customer-based brand equity if consumers react less favorably to marketing activity for the brand under the same circumstances.

Advantages of Strong Brands

• Strong brands leads to improved perceptions of product performance and creates greater loyalty, and increases marketing communications effectiveness.
• Strong brands have less vulnerability to competitive marketing actions and crises and creates larger margins, and possibilities for more inelastic consumer response.
• Strong brands create greater trade cooperation and potential licensing opportunities which increases success and profits.

What is a Brand Promise?

• A brand promise is the marketer's vision of what the brand must be and do for consumers.
• The future prospects of a brand rest with the consumer and their knowledge which creates a likely response to marketing.
• Understanding consumer brand knowledge (brand associations) is the foundation of brand equity.

Building Brand Equity / Drivers of Brand Equity

• Brand elements.
• Marketing activities.
• Meaning transference.

Brand Elements

• Consist of brand names and URLs.
• Also include slogans and logos.
• Includes Characters and symbols.
• Brand elements are trademarkable devices that identify and differentiate the brand.
• Most strong brands employ multiple brand elements, like Nike’s “swoosh” and “Just Do It” slogan.
• Marketers must choose brand elements to build as much brand equity as possible.

Brand Element Choice Criteria

• These elements are devices, which can be trademarked, that identify and differentiate the brand.
• Memorable: Easily recalled and recognized by consumers at purchase and consumption (e.g. Tide, Crest, Bing).
• Meaningful: Credible and suggestive to its corresponding category, suggests a product ingredient or the type of user.
  • Names such as DieHard auto batteries, Mop & Glo floor wax, and Lean Cuisine suggest an idea of their product.
• Likable: Aesthetically appealing visually, verbally, and in other ways.
  • Concrete brand names such as Sunkist and Thunderbird evoke imagery.
• Transferable: Can be used to introduce new products in the same or different categories.
  • Amazon.com was initially an online bookseller, and the name suggests the variety of products that could be shipped by the company.
• Adaptable: How updatable and adaptable the brand element is.
  • The Betty Crocker face has been updated over 8 times in 75 years.
• Protectable: How legally and competitively protectable the brand element is.
  • Names such as Kleenex, Kitty Litter, Jell-O, Scotch Tape, Xerox, and Fiberglass have trademark right and not become generic.

Designing Holistic Marketing Activities

• Brands are not built by advertising alone.
• Customers come to know the brand through direct observation and use and word of mouth.
• Also, customers learn brands through interactions with company personal, online, telephone experiences, and payment transactions.
• Holistic marketers emphasize personalization, integration, and internalization in designing brand-building marketing programs.
• Personalizing marketing ensures that brand and marketing are as relevant as possible to customers.

Consumer Desire

• Concepts such as experiential marketing, one-to-one marketing, and permission marketing help meet the desire for personalization.
• Integration marketing mixes and matches marketing activities to maximize their effects in efficiency and effectiveness.
• The integration should affect brand awareness, and create, maintain, or strengthen brand image.
• A brand’s identity refers the way a company aims to position itself or its product.
• A brand's “image” refers to the way the public actually perceives them.
• To establish the right image, marketers communicate brand identity through communication vehicles and brand contact.
• Internal branding includes activities and processes that inform and inspire employees to be advocates for the brand.
• Customer-service companies and retailers must have employees who understand and know the brand and its promise.
• Holistic marketers train and encourage distributors/dealers to serve their customers well.

Measuring Brand Equity

• Brand audits.
• Brand tracking.
• Brand valuation.
• A brand audit is a consumer-focused series of procedures, performed annually, to assess health of the brand.
• Brand-tracking studies collect quantitative data from consumers over time to provide consistent information about brand.
• Brand valuation helps markets distinguish brand and equity to estimate total financial value of the brand.
• In 2009 the number one most valuable brand in the world was Coca-Cola at $68.7 billion.

Managing Brand Equity

• Includes brand reinforcement and brand revitalization.
• Brand equity is reinforced by marketing actions that convey the meaning of the brand which:
  • What products the brand represents, what core benefits it supplies, and what needs it satisfies.
  • How the brand makes products superior, and brand associations should exist in consumer's mind.
• Brand Revitalization often starts with understanding the sources of brand equity and discovering if positive associations are losing strength and linking with negative ones.
• Then, whether or not a brand retains its positioning or creates a new one can be decided.

Devising a Branding Strategy

• A firm's branding strategy (aka, “brand architecture”) reflects the number and nature of both common and distinctive brand elements it applies.
• When introducing a new product, a firm can develop new brand elements, apply existing ones, or use a combination.
• When a firm uses established brand to introduce a new product, the product is called a brand extension.
• When marketers combine new brand with an existing brand, the brand extension can also be called a subbrand.

Brand Strategy

• The existing brand that gives birth to a brand extension or subbrand is the parent brand.
• A parent brand associated with multiple products through brand extensions can be called a master brand or family brand.
• Brand extensions fall into line extensions (parent brand covers a new product within a product category it currently serves)or category extensions (parent brand is used to enter a different product category).
• A brand line consists of all products (original, line, and category extensions) sold under a particular brand.
• A brand mix (or brand assortment) is the set of all brand lines that a particular seller makes available to buyers.

Brand Mix

• A licensed product is one whose brand name has been licensed to other manufacturers that actually make the product.
• Branding Decisions/Brand Naming can consist of individual or separate family brand names, like General Mills:
  • Bisquick, Gold Medal Flour, Nature Valley, Old El Paso, Pop Secret, Wheaties, and Yoplait.

Brand Naming

• Corporate umbrella or company brand name (Blanket family names): Heinz, General Electric, and Campbell's use their corporate brand across their products.
• Sub-brand name (Corporate name combined with individual names).
• Example is Kellogg's Rice Krispies, Raisin Bran, and Corn Flakes.

Advantages of Brand Extensions

• Improved odds of new product success.
• Consumers inferences can be made which increases brand awareness
• Extensions can reduce both reduce risk and campaign costs.
• Positive feedback effects clarify brand meaning and can improve consumer loyalty, renew interest in the liking of a brand, and expand market coverage that may serve as a basis for subsequent extensions.

Disadvantages of Brand Extensions

• Line extensions may cause the brand name to be less strongly identified with one product.
• Brand dilution: consumers no longer associate a brand with a product and think less of the brand.
• Extensions may fail and harm the parent brand image.
• There is also a danger of cannibalization.

Explore the role of brands in identifying products, simplifying handling, and offering legal protection. Learn how branding creates differentiation and builds brand equity by adding value to products and services. Understand the attributes, benefits, and consumer motivations behind successful brands.