CHAPTER 10

 The American Marketing Association defines

a brand as “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.”
Identify the maker

Simplify product
handling

Organize accounting

Offer legal
protection
Signify quality

Create barriers to entry

Serve as a competitive
advantage

Secure price
premium
 Brands identify the source or maker of a
product and allow consumers to assign
responsibility to a particular manufacturer
or distributor.
A. Consumers learn about brands through
experiences with the product and its marketing
program.
B. Brands perform valuable functions for the
company.
C. Brands can signal a certain level of quality so
that satisfied buyers can easily choose the
product again.
D. Brand loyalty provides predictability and
security of demand for the firm and
creates barriers for other firms.
E. Branding can be seen as a powerful means
to secure a competitive advantage
F. To firms, brands thus represent
enormously valuable pieces of legal
property that can influence consumer
behavior, be bought and sold, and provide
the security of sustained future revenues
to their owner.
1. Branding is endowing products and services with
the power of a brand.
2. Branding is all about creating differences between
products.
3. To brand a product, it is necessary to teach
consumers “who” the product is, “what” the
product does, and “why” consumers should care.
4. Branding involves creating mental structures and
helping consumers organize their knowledge
about products and services in a way that clarifies
their decision-making and provides value to the
firm.
5. For branding strategies to be successful
and brand value to be created, consumers
must be convinced that there are
meaningful differences among brands in
the product or service category.
6. The key to branding is that the consumer
must not think that all brands in the
category are the same.
7. Brand differences are often related to
attributes or benefits of the product itself.
8. Branding can be applied virtually anywhere
where the consumer has a choice.
 It may be reflected in how consumers, think,
feel and act with respect to the brand as well
as the prices, market share and profitability
that the brand commands for the firm.
 Brand equity is an important intangible asset
to the firm that has psychological and
financial value.
 Customer-based brand equity can be defined
as the differential effect that brand
knowledge has on consumer response
towards the marketing of that brand.
 A brand is said to have positive customer-
based brand equity when consumers react
more favorably to a product and the way it
is marketed when the brand is identified
as compared to when it is not.
 A brand is said to have negative
customer-based equity if consumers react
less favorably to marketing activity for the
brand under the same circumstances.
 Marketing dollars spent each year on
products and services should be thought of
as investments in consumer brand
knowledge.
 It is actually possible to “overspend” on
brand building if money is not spent wisely.
 A brand is essentially a marketer’s promise
to deliver predictable product or service
performance. A brand promise is the
marketer’s vision of what the brand must
be and what it can do for consumers.
 Brand Equity can be build by creating the right
brand knowledge with right consumers

 3 brand equity drivers:

1. Initial choices for elements that makes up the
brand
2. Product, marketing activities & programs
3. Other associations passed to the brand when
linked to other entity
 Brand elements are those trade-markable
devices that identify and differentiate the
brand.
◦ Choose brand elements to build as
much brand equity as possible.
◦ Test and see what consumers would
think or feel about the product if
they only knew about that particular
brand element.
 Brand
names URLs

Slogans
Elements
Logos

Characters
Symbols
1.Memorable
2.Meaningful First three characterized as
“brand building” in terms of
how brand equity can be built
3.Likeability through the judicious choice of
a brand element
4.Transferable
5.Adaptable The latter three are more
“defensive” and are concerned

6.Protectible
with how the brand equity
contained in a brand element
can be leveraged and
preserved in the face of
different opportunities and
constraints.
 Memorable
◦ Brand - easily recalled, recognized?
◦ Name - look distinctive – memorable
 Meaningful
 Values consumers seek
 Asia Pacific - probe taboos, religious
connotations - colors, numbers
 Likeability
◦ Is it likable visually, verbally?
 Transferable
◦ Can be used to introduce new
products in other categories?
 Adaptable
 How adaptable & updatable is brand?
 Asian brands - retain traditional values as
they modernize
 Protectible
 How legally protectible is it?
 Unique brand name can be intimately
identified with product category
◦ Eg: Scotch Tape & Post-it notes
 Like a good  We try harder
neighbor, State  We’ll pick you up
Farm is there  Nextel – Done
 Just do it  Zoom Zoom
 Nothing runs like a  I’m lovin’ it
Deere  Innovation at work
 Save 15% or more  This Bud’s for you
in 15 minutes or
 Always low prices
less
 A firm’s branding strategy reflects the
number and nature of both common and
distinctive brand elements it applies to the
products it sells. Deciding how to brand
new products is especially critical.
 When a firm introduces a new product, it has
three main choices:
1. It can develop new brand elements for the new
product.
2. It can apply some of its existing brand elements.
3. It can use a combination of new and existing
brand elements.
◦ When a firm uses an established brand to introduce a
new product, it is called a brand extension.
◦ When a new brand is combined with an existing brand,
the brand extension can also be called a sub-brand.
Hershey’s Kisses candy, Toyota Camry
◦ An existing brand that gives birth to a brand extension
is referred to as the parent brand.
◦ If the parent brand is already associated with multiple
products through brand extensions, then it may also be
called a family brand.
 2 categories of Brand extensions
1. Line
extension - parent brand - brands new
product – within current product category - new
market segment. Example: Colgate Gel, Colgate
Sensitive, Colgate Tartar Control, Colgate
Whitening
2. Category
extension - parent brand -enters new
product category. Example: Honda automobiles,
motorbikes, lawnmowers, snow mobiles,
snowblowers, marine engines
 Brand line – all products (both line and category
extension) sold under a brand name
 Brand mix – all brand lines that a particular seller
makes
 Branded variants - specific brand lines supplied to
specific retailers or channels
 Licensed product - brand name licensed to other
manufacturers who make product
 eg: Hello Kitty: Hello Kitty licensed to many products - credit
cards, toasters, purses, confectionery & UNO card games
 If a company has high standards and always takes quality into
account, family branding can be a wonderful way to market the
products.
 Family branding is a group effort, where each product has the
important job of supporting and helping the other products.
 Rather than having to exert unnecessary effort on several
different advertising campaigns, family branding allows the use
of harmony, where each product's job is to compliment the
others. One single advertisement or campaign unites the group.
 In family branding, each product gives the others strength, and
when one product succeeds, they all benefit.
 This being the case, the drawbacks of family marketing occur
even if one product's standards drop or are not maintained, as
this reflects negatively on the group as a whole.
 Under this branding approach new products are assigned
new names with no obvious connection to existing brands
offered by the company. Individual branding works best
when a company has several unrelated products they want
to promote.
 While selling shirts, beer, and magazines, a company will
probably want each product to have its own unique image,
as these items have very little to do with one another.
 In individual branding, each product has its own unique
position, and in marketing is allowed to go off in whatever
direction it chooses.
 Drawbacks to individual branding include: split markets,
split efforts, and the possibility of imbalance within the
company.
 With co-branding a marketer seeks to partner with another
firm, which has an established brand
 synergy of two brands on a product is even more powerful
than a single brand. The partnership often has both firms
sharing costs but also sharing the gains.
 For instance, major credit card companies, such as Visa and
MasterCard, offer co-branding options to companies and
organizations. The cards carry the name of a co-branded
organization (e.g., University name) along with the name of
the issuing bank (e.g., Citibank) and the name of the credit
card company.
 Besides tapping into awareness for multiple brands, the co-
branding strategy is also designed to appeal to a larger
target market, especially if each brand, when viewed
separately, does not have extensive overlapping target
markets with the other brand.
 co-branding allows both firms to tap into market segments
where they did not previously have a strong position.
1. New Product Success:
◦ New product expectations: The new product will attract quicker
customer awareness and willingness to trial or sample the
product due to association with parent brand
◦ Reduce risk: Distributors may perceive there is less risk with a
new product if it carries a familiar brand name. If a new food
product carries the Heinz brand, it is likely that customers will
buy it
◦ Reduced costs of launch: Promotional launch costs (particularly
advertising) are likely to be substantially lower
2. Positive Feedback Effects
◦ Clarify brand meaning & core values: Customers will associate
the quality of the established brand name with the new product.
They will be more likely to trust the new product
◦ Renew interest - benefit parent brand - expand market
coverage
◦ Nikon alliance with Essilor: extended expertise in camera to
eyewear lenses in the hope that consumers infer eyewear
lenses as being as reliable as its camera lenses
 Brand dilution –consumers no longer associate a
brand with a specific product and start thinking
less of the brand
 If inappropriate, integrity will be questioned
(Lego)
 Worst scenario - Failure will harm the parent
brand
 Switch from parent brand - cannibalize parent
brand sales
 Forgo the chance of creating an entirely new
brand