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Chapter 01 - Brands and Brand Management

This chapter discusses brands and brand management. It defines what a brand is, how it differs from a product, and what brand equity means. Brands are important for both consumers and companies. For consumers, brands reduce risk, search costs, and act as promises from companies. For companies, brands are a means of identification, source of competitive advantage, and can be a major source of financial returns. The chapter outlines the strategic brand management process and emphasizes that while companies may lose physical assets, forgetting a brand could put a company out of business.

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Mahdia Binta Kabir
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101 views41 pages

Chapter 01 - Brands and Brand Management

This chapter discusses brands and brand management. It defines what a brand is, how it differs from a product, and what brand equity means. Brands are important for both consumers and companies. For consumers, brands reduce risk, search costs, and act as promises from companies. For companies, brands are a means of identification, source of competitive advantage, and can be a major source of financial returns. The chapter outlines the strategic brand management process and emphasizes that while companies may lose physical assets, forgetting a brand could put a company out of business.

Uploaded by

Mahdia Binta Kabir
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 1

Brands
and
Brand Management
After reading this chapter, you should be able to:

1. Define “brand,” state how brand differs from a product.


2. Explain what brand equity is.
3. Summarize why brands are important.
4. Explain how branding applies to virtually everything.
5. Describe the main branding challenges and opportunities.
6. Identify the steps in the strategic brand management process.
MANAGEMENT
Why do companies such as Coca-Cola,
Microsoft, IBM and Disney seem to achieve
global marketing success so easily?
Why does it seem such an effort for others?

?
Why do we, as consumers, feel loyal to such
brands that just seeing their logo has us reaching
into our pockets to buy their products?
The Meaning of Brands
Brands are a means of
differentiating a
company’s products and
services from those of its
competitors

Evidence proves that customers will pay a


price premium for a good brand and
remain loyal to that brand. It is
important, therefore, to understand what
brands are and why they are important
To Consumers:
1. Identification of source of product

2. Assignment of responsibility to
product maker

3. Risk reducer

4. Search cost reducer

5. Promise or pact with Company

6. Symbolic device

7. Signal of quality
To Companies:
1. Means of identification to simplify
handling or tracing

2. Means of legally protecting unique


features

3. Signal of quality level to satisfied


customers

4. Means of giving products unique


associations

5. Source of competitive advantage

6. Source of financial returns


Top 10 Companies in the World 2016
NAME ORIGIN INDUSTRY REVENUES ($M) LOGO

Walmart USA Retail 482,130

State Grid China Energy 329,601

China National Petroleum China Oil 299,271

4Sinopec Group China Oil 294,344

Royal Dutch Shell Netherlands Oil 272,156

Exxon Mobil USA Oil 246,204

Volkswagen Germany Automobile 236,600

Toyota Motor Japan Automobile 236,592

Apple USA Computer 233,715

BP England Oil 225,982


Top 10 Brands in the World 2016
REVENUES BRAND
NAME ORIGIN INDUSTRY ($M) VALUE ($M) LOGO

Apple USA Technology 233,715 154,1

Google USA Technology 68.5 82.5

Microsoft USA Technology 87.6 75.2

Coca-Cola USA Beverages 21.9 58.5

Facebook USA Technology 17.4 52.6

Toyota Motor Japan Automobile 236,592 42.1

IBM USA Technology 81.7 41.4

Disney USA Leisure 28 39.5

McDonald’s USA Restaurants 82.7 39.1

GE USA Diversified 92.3 36.7


The Importance of Brands
“…it is not factories that make
profits, but relationships with
customers, and it is company
and brand names which secure
those relationships”

Businesses that invest in and sustain


leading brands prosper whereas those
that fail are left to fight for the lower
profits available in commodity markets
“If Coca-Cola were to lose all of its
production-related assets in a
disaster, the company would survive.
X
BUT, if all consumers were to have a
sudden loss of memory and forget
everything related to Coca-Cola the
company would go out of business.”
Coca-Cola Executive
When Tata Motors of India
bought Jaguar and Range Rover
from Ford, what did they buy?

(Tata paid
$2.56 billion)
When Kraft bought
Cadbury for $19.5 Billion,
what did they buy?
The chocolate?

The factories?

The recipes?

The candy makers?


“A name, term, sign, symbol or “A mixture of tangible and
design, or a combination of these, intangible attributes symbolized in a
that is intended to identify the goods trademark, which, if properly
and services of one business or group managed, creates influence and
of businesses and to differentiate generates value”
them from competitors” Interbrand
“A brand is not an icon, a slogan, or a mission statement. It is a
promise – a promise your company can keep…This is the promise
you make and keep in every marketing activity, every action,
every corporate decision, every customer interaction.”
Kristin Zhivago,
“Business Marketing”
Where do you go
if…………………..

you want to party


all day long?
Where do you go
if…………………..

you want to have


some family
holidays?
Which
one is the
most
romantic
city in the
world?
Who is the most
famous football
player you know?
In his first year of
retirement, Beckham
posted the highest
earnings of his career
with $75 million in 2014
Singapore billionaire
Peter Lim’s Mint Media
purchased Ronaldo’s image
rights in an estimated
$40 million, 6-year deal
 Physical Goods  People & Organizations

 Services  Geographic Locations

 Retailers & Distributors  Ideas & Causes

 Online Products & Services  Sports, Arts & Entertainment

So….
How much would
you pay for a glove?

A glove Michael Jackson


wore on a tour, sold for
$330,000 in 2010
How about a
dog collar?

A dog collar owned


by Charles Dickens,
sold for nearly
$12,000 in 2009
PRODUCT
A product is anything
we can offer to a market
for acquisition, use, or
VS BRAND
consumption that might Toyota
satisfy a need or want.
Emirates
A product may be:
Walmart
a physical good (cereal, tennis racquet, car)
a service (airline, bank, insurance company) Ronaldo
a retail outlet (department store, supermarket) Paris
a person (politician, entertainer, athlete)
a place (city, state, or country)
PRODUCT VS BRAND
Product is: Brand is:

What companies What consumers


produce buy
Is the commercial value that comes
from consumer perception of the
brand name of a particular product
or service, rather than from the
product or service itself.

“The value of a brand. From a consumer perspective, brand


equity is based on consumer attitudes about positive brand
attributes and favorable consequences of brand use.”
American Marketing Association
Brand Equity Concept
Brand Equity is the value, both
The concept of brand equity tangible and intangible, that a brand
is measured in two terms: adds to a product/service; the
Brand added value a brand name identity
brings to a product or service
Equity beyond the functional benefits
provided.

Customer - Market
based - based The market – based brand
The customer – based brand equity aims at producing
equity focuses on the relationship measures in dollars, euros,
customers have with the brand yen, yuan, or ___________
What is Brand Management?
Now, that you have learnt
about ‘brands’, let us see what
is brand management.

Brand management is the


process of building, managing
and improving a brand.
It begins by having a thorough knowledge of
the term “brand”.
Hence, brand management includes developing a promise,
making that promise and maintaining it.
It means defining the brand, positioning the
brand, and delivering the brand. It is an art of
creating and sustaining the brand.
Strategic Brand Management Process
The Strategic Brand Management
Process consists of the following four
steps:

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