Chapter 1

Introduction

1.1 Introduction

Brand equity has become a very strong part for every product. Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name and, at the root of these marketing effects is consumers' knowledge. In other words, consumers' knowledge about a brand makes manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand. Brand equity helps a product to stay strong than other competing brands. Brand equity is the positive effect of the brand on the difference between the prices that the consumer accepts to pay when the brand known compared to the value of the benefit received.

1.2 origin of the project and thesis work:

As bachelor of business administration (BBA) degree requires an attachment of a report assigned and endorsed by the faculty advisor (supervisor of the report). This report has been originated to make a study on the “Brand Equity- The ultimate destination of a Brand” thesis report also required for the completion of BBA program of Stamford University.

As a part of my study and completion of the BBA degree, the thesis work was assigned by “Ms. Sara Sarwari” Assistant professor of Marketing, Department of business administration; Stamford University Bangladesh. She also approved the topic and authorized me to prepare this report as a part for the fulfillment of the said requirement.

1.3 objective of the report:

Each report has some objectives. The main objective of this thesis report is to fulfill the academic requirement of BBA and gather some particular experience. But it is not only the foremost objective of this report; the following are other objectives of the heading of the report:

Branding has become a very important part in business. To have a strong foot hold in the market a product must be branded. Better brand equity helps a product to stay ahead than its competitors.The more brand equity a product has the more will be the profit of the product.

The objectives are summarized as follows:

To know about brands and branding. To have a better understanding of brand equity. To get a better idea about how to improve brand equity. To have better orientation on brand , brand equity, and in brand management To be familiar with the different approaches of building and measuring brand equity.

1.4 Scope of the study:

This study would focus on the following areas of the brand equity:

To discuss the definition of brand and brand equity

Building brand equity

Measuring, managing, and protecting brand equity

Each of the above areas would be critically analyzed in order to have a clear view of the total concept of brand equity

1.5 Methodology:

Report work requires adherence to some rules and methodologies. Rules were followed to relieve the data collection procedure. Completeness and accuracy of study depends on the information and data analysis. Methodology is a set of method in a particular area of activity or research activity.

a) Study design: The report is fully comprehensive in nature. Information has been acquired from both primary and secondary source. In addition to these, other necessary information has been accumulated from the daily news paper, relative journal and so on.

b) data sources: Data is one of the most important elements to prepare a study effectively. To make the report factual and reliable of data and information have been collected using different ways. The various sources of data are used widely in this program, which are discussed below:

Source of primary data:

The primary data are those, which are collected as fresh and for the first time and thus happen to be original in character. This report has been prepared though extensive use of primary data. I have used various sources to collect primary data in this study program. They are as follows:

Informal discussion with professional

Observation while working in different sides Source of secondary data:

The secondary data are those which have already been collected by someoneElse and which have already been passed through the statistical process the necessaryQualitative and quantities information has been obtained from the secondary source.The sources are as follows:

Different sites of internet

Miscellaneous books

Some international articles

Stamford library & reference

1.6 Limitations of the Study

I, the student of “Department of Business Administration (Marketing)”, just have completed my formal education stage. This is the first thesis for me. My first thesis, so my knowledge field is not enough. So my tasks are not mistake free.But I have tried my level best.Besides above, have to face some other limitations,they are:

The main constraint of this term paper is insufficiency of information which was required for study.

Limitation of time was one of the most important factors that shortened the present study. Due to time constraints, the sample had to be restricted.

Another drawback is lack of knowledge about this topic, which could be very much useful.

Confidential of data was another important barrier that was faced during the conduct of this study.

Unavailability of data. Sufficient publications, facts and figures and records are not available. These makes

narrowed the scope of the real analysis.

Chapter 2 Brand – An overview

Brand

A brand is the identity of a specific product, service, or business. A brand can take many forms, including a name, sign, symbol, color combination or slogan. The word brand began simply as a way to tell one person's cattle from another by means of a hot iron stamp. A legally protected brand name is called a trademark. The word brand has continued to evolve to encompass identity - it affects the personality of a product, company or service.

2.1 Brand definition:

American marketing association (AMA) says brand a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller.

Philip kotler: A seller’s promise to deliver a specific set of feature, benefits and service consistent to the buyers.

2.2 Brand Concepts:

A brand is the personality that identifies a product, service or company (name, term, sign, symbol, or design, or combination of them) and how it relates to key constituencies: Customers, Staff, Partners, and Investors etc.

Some people distinguish the psychological aspect, brand associations like thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand, of a brand from the experiential aspect.

The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service.

People engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. Orientation of the whole organization towards its brand is called brand orientation.

Careful brand management seeks to make the product or services relevant to the target audience. Brands should be seen as more than the difference between the actual cost of a product and its selling price - they represent the sum of all valuable qualities of a product to the consumer. There

are many intangibles involved in business, intangibles left wholly from the income statement and balance sheet which determine how a business is perceived. The learned skill of a knowledge worker, the type of mental working, the type of stitch: all may be without an 'accounting cost' but for those who truly know the product, for it is these people the company should wish to find and keep, the difference is incomparable.

A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at branding with their particular script font (originally created for Walt Disney's "signature" logo), which it used in the logo for go.com.

Consumers may look on branding as an important value added aspect of products or services, as it often serves to denote a certain attractive quality or characteristic (see also brand promise). From the perspective of brand owners, branded products or services also command higher prices. Where two products resemble each other, but one of the products has no associated branding (such as a generic, store-branded product), people may often select the more expensive branded product on the basis of the quality of the brand or the reputation of the brand owner.

2.3 What makes up a brand?

A brand is the combination of certain things to represent itself. There are certain elements behind every brand to describe itself. Such elements are given below

Logo Colors Posters, Warranty Voicemail

Messages Offices Salespeople Signage Reputation

Sponsorships Landscaping Design Packaging Community service

Customer manuals

Community involvement

Product development

Advertising Response to crises

2.4 Features of a good brand.

A good brand should be composed of some specific features. They are given below-

Suggest the products benefits and qualities, Be easy to pronounce, recognize and remember, Be distinctive, e.g. Kodak, Exxon and Oracle; Be extendable, e.g. Amazon.com expanded from a bookseller into other

Categories; Not carry poor meanings in other countries and languages, e.g. Nova means

“doesn’t go” in Spanish.

2.5 Why should an organization define Brand?

An organization may define its brand for certain purposes. Such as-

1. to ensure that you have a fresh, compelling and competitive proposition 2. to ensure that your brand works strongly at an emotional as well as at a rational level 3. to ensure that your brand can be delivered consistently and in full by all its stakeholders

There are various dimensions based on which a product or service can be branded. Some of these dimensions are given below-

1. Its central organizing thought – defining it for internal & stakeholder use in one sentence 2. Its slogan - defining it for use with customers in one sentence 3. Its personality – what would it be like if it were a human being? 4. Its values – what does it stand for/against? 5. Its tastes/appearance - what does it look like? What does it sound like? What does it like

and dislike?6. Its stories - what are the stories you tell about how it all came about/what sort of brand it

is?7. Its emotional benefits – how it avoids/reduces pain or increases pleasure 8. Its hard benefits – the “pencil sell”

2.6 Brand variables

Global Brand:

A global brand is one which is perceived to reflect the same set of values around the world. Global brands transcend their origins and creates strong, enduring relationships with consumers across countries and cultures.

Global brands are brands sold to international markets. Examples of global brands include Coca-Cola, McDonald's, Marlboro, Levi's, Shell etc.. These brands are used to sell the same product across multiple markets, and could be considered successful to the extent that the associated products are easily recognizable by the diverse set of consumers.

Local Brand:

A brand that is sold and marketed (distributed and promoted) in a relatively small and restricted geographical area. A local brand is a brand that can be found in only one country or region. It may be called a regional brand if the area encompasses more than one metropolitan market. It may also be a brand that is developed for a specific national market, however an interesting thing about local brand is that the local branding is mostly done by consumers then by the producers. Examples of Local Brands in Dhaka are Otobi, square etc.

Ambient Brand:

An Ambient Brand is a movement, where the brand is organized around values and social needs instead of promoting a specific product. It is a virtual space, defined by values and occupied by a community of like minded people. Whereas a traditional brand is entirely independent of products and their parent corporations, an ambient brand is an independent social movement that companies can participate in. They are not selling products, they are allowing their company to participate in a social movement and allow their brand to be identified with this. It exists as a shared values space where consumers gather, converse and ultimately transact with organizations that are in alignment with the values associated with that community. Corporations do not create ambient brands. They must qualify for inclusion within them by demonstrating that they share the values and will service the interests of their associated communities. The brands develop organically as a result of emerging social and cultural codes and are materialized through peoples ability to organize around them through the use of mainly virtual communities on the web.

2.7 Types of brand names:

Brand names come in many styles. A few include:Acronym: A name made of initials such as UPS or IBMDescriptive: Names that describe a product benefit or function like Whole Foods or AirbusAlliteration and rhyme: Names that are fun to say and stick in the mind like Reese's Pieces or Dunkin' DonutsEvocative: Names that evoke a relevant vivid image like Amazon or CrestNeologisms: Completely made-up words like Wii or KodakForeign word: Adoption of a word from another language like Volvo or SamsungFounders' names: Using the names of real people like Hewlett-Packard or DisneyGeography: Many brands are named for regions and landmarks like Cisco and Fuji FilmPersonification: Many brands take their names from myth like Nike or from the minds of ad execs like Betty Crocker

The act of associating a product or service with a brand has become part of pop culture. Most products have some kind of brand identity, from common table salt to designer jeans. A brandnomer is a brand name that has colloquially become a generic term for a product or service,

such as Band-Aid or Kleenex, which are often used to describe any kind of adhesive bandage or any kind of facial tissue respectively.

2.8 Brand identity:

A product identity, or brand image are typically the attributes one associates with a brand, how the brand owner wants the consumer to perceive the brand - and by extension the branded company, organization, product or service. The brand owner will seek to bridge the gap between the brand image and the brand identity. Effective brand names build a connection between the brand personality as it is perceived by the target audience and the actual product/service. The brand name should be conceptually on target with the product/service (what the company stands for). Furthermore, the brand name should be on target with the brand demographic.[6] Typically, sustainable brand names are easy to remember, transcend trends and have positive connotations. Brand identity is fundamental to consumer recognition and symbolizes the brand's differentiation from competitors.

Brand identity is what the owner wants to communicate to its potential consumers. However, over time, a product's brand identity may acquire (evolve), gaining new attributes from consumer perspective but not necessarily from the marketing communications an owner percolates to targeted consumers. Therefore, brand associations become handy to check the consumer's perception of the brand.[7]

Brand identity needs to focus on authentic qualities - real characteristics of the value and brand promise being provided and sustained by organisational and/or production characteristics.

Visual Brand Identity:

The visual brand identity manual for Mobil Oil (developed by Chermayeff & Geismar), one of the first visual identities to integrate logotype, icon, alphabet, color palette, and station architecture to create a comprehensive consumer brand experience.

The recognition and perception of a brand is highly influenced by its visual presentation. A brand’s visual identity is the overall look of its communications. Effective visual brand identity is achieved by the consistent use of particular visual elements to create distinction, such as specific fonts, colors, and graphic elements. At the core of every brand identity is a brand mark, or logo. In the United States, brand identity and logo design naturally grew out of the Modernist movement in the 1950s and greatly drew on the principles of that movement – simplicity (Mies van der Rohe’s principle of "Less is more") and geometric abstraction. These principles can be observed in the work of the pioneers of the practice of visual brand identity design, such as Paul Rand, Chermayeff & Geismar and Saul Bass.

Brand parity:

Brand parity is the perception of the customers that all brands are equivalent.

2.9 Branding approaches

2.9.1Company name:

Often, especially IN the industrial sector, it is just the company's name which is promoted (leading to one of the most powerful statements of "branding"; the saying, before the company's downgrading, "No one ever got fired for buying IBM").

In this case a very strong brand name (or company name) is made the vehicle for a range of products (for example, Mercedes-Benz or Black & Decker) or even a range of subsidiary brands (such as Cadbury Dairy Milk, Cadbury Flake or Cadbury Fingers in the United States).

2.9.2 Individual branding:

Each brand has a separate name (such as Seven-Up, Kool-Aid or Nivea Sun (Beiersdorf)), which may even compete against other brands from the same company (for example, Persil, Omo, Surf and Lynx are all owned by Unilever).

2.9.3 Attitude branding and Iconic brands:

Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude branding include that of Nike, Starbucks, The Body Shop, Safeway, and Apple Inc.. In the 2000 book No Logo,[11] Naomi Klein describes attitude branding as a "fetish strategy".

"A great brand raises the bar -- it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you're drinking really matters." - Howard Schultz (president, CEO, and chairman of Starbucks)

The color, letter font and style of the Coca-Cola and Diet Coca-Cola logos in English were copied into matching Hebrew logos to maintain brand identity in Israel.

Iconic brands are defined as having aspects that contribute to consumer's self-expression and personal identity. Brands whose value to consumers comes primarily from having identity value comes are said to be "identity brands". Some of these brands have such a strong identity that they become more or less "cultural icons" which makes them iconic brands. Examples of iconic brands are: Apple Inc., Nike and Harley Davidson. Many iconic brands include almost ritual-like behaviour when buying and consuming the products.

There are four key elements to creating iconic brands (Holt 2004):

1. "Necessary conditions" - The performance of the product must at least be ok preferably with a reputation of having good quality.

2. "Myth-making" - A meaningful story-telling fabricated by cultural "insiders". These must be seen as legitimate and respected by consumers for stories to be accepted (See Brand anthropology).

3. "Cultural contradictions" - Some kind of mismatch between prevailing ideology and emergent undercurrents in society. In other words a difference with the way consumers are and how they some times wish they were.

4. "The cultural brand management process" - Actively engaging in the myth-making process making sure the brand maintains its position as an icon.

2.9.4 "No-brand" branding:

Recently a number of companies have successfully pursued "No-Brand" strategies by creating packaging that imitates generic brand simplicity. Examples include the Japanese company Muji, which means "No label" in English (from 無印良品 – "Mujirushi Ryohin" – literally, "No brand quality goods"), and the Florida company No-Ad Sunscreen. Although there is a distinct Muji brand, Muji products are not branded. This no-brand strategy means that little is spent on advertisement or classical marketing and Muji's success is attributed to the word-of-mouth, a simple shopping experience and the anti-brand movement.[12][13][14] "No brand" branding may be construed as a type of branding as the product is made conspicuous through the absence of a brand name. "Tapa Amarilla" or "Yellow Cap" in Venezuela during the 80´s is another good example of no-brand strategy. It was simple recognized by the color of the cap of this cleaning products company.

2.9.5 Derived brands:

In this case the supplier of a key component, used by a number of suppliers of the end-product, may wish to guarantee its own position by promoting that component as a brand in its own right. The most frequently quoted example is Intel, which secures its position in the PC market with the slogan "Intel Inside".

2.9.6 Brand extension:

The existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, (sun-) glasses, furniture, hotels, etc.

Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene. Dunlop extended its brand from tires to other rubber products such as shoes, golf balls, tennis racquets and adhesives.

There is a difference between brand extension and line extension. A line extension is when a current brand name is used to enter a new market segment in the existing product class, with new varieties or flavors or sizes. When Coca-Cola launched "Diet Coke" and "Cherry Coke" they stayed within the originating product category: non-alcoholic carbonated beverages. Procter & Gamble (P&G) did likewise extending its strong lines (such as Fairy Soap) into neighboring products (Fairy Liquid and Fairy Automatic) within the same category, dish washing detergents.

2.9.7 Multi-brands:

Alternatively, in a market that is fragmented amongst a number of brands a supplier can choose deliberately to launch totally new brands in apparent competition with its own existing strong

brand (and often with identical product characteristics); simply to soak up some of the share of the market which will in any case go to minor brands. The rationale is that having 3 out of 12 brands in such a market will give a greater overall share than having 1 out of 10 (even if much of the share of these new brands is taken from the existing one). In its most extreme manifestation, a supplier pioneering a new market which it believes will be particularly attractive may choose immediately to launch a second brand in competition with its first, in order to pre-empt others entering the market.

Individual brand names naturally allow greater flexibility by permitting a variety of different products, of differing quality, to be sold without confusing the consumer's perception of what business the company is in or diluting higher quality products.

Once again, Procter & Gamble is a leading exponent of this philosophy, running as many as ten detergent brands in the US market. This also increases the total number of "facings" it receives on supermarket shelves. Sara Lee, on the other hand, uses it to keep the very different parts of the business separate — from Sara Lee cakes through Kiwi polishes to L'Eggs pantyhose. In the hotel business, Marriott uses the name Fairfield Inns for its budget chain (and Ramada uses Rodeway for its own cheaper hotels).

Cannibalization is a particular problem of a "multibrand" approach, in which the new brand takes business away from an established one which the organization also owns. This may be acceptable (indeed to be expected) if there is a net gain overall. Alternatively, it may be the price the organization is willing to pay for shifting its position in the market; the new product being one stage in this process.

2.9.8 Private labels:

With the emergence of strong retailers, private label brands, also called own brands, or store brands, also emerged as a major factor in the marketplace. Where the retailer has a particularly strong identity (such as Marks & Spencer in the UK clothing sector) this "own brand" may be able to compete against even the strongest brand leaders, and may outperform those products that are not otherwise strongly branded.

2.9.9 Individual and Organizational Brands:

There are kinds of branding that treat individuals and organizations as the "products" to be branded. Personal branding treats persons and their careers as brands. The term is thought to have been first used in a 1997 article by Tom Peters.[15] Faith branding treats religious figures and organizations as brands. Religious media expert Phil Cooke has written that faith branding handles the question of how to express faith in a media-dominated culture. Nation branding works with the perception and reputation of countries as brands.

Chapter 3 Brand Equity

3.1 Definition of Brand equity:

Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. And, at the root of these marketing effects is consumers' knowledge. In other words, consumers' knowledge about a brand makes manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand. The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets that a company has. Brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one. Elements that can be included in the valuation of brand equity include (but not limited to): changing market share,

profit margins, consumer recognition of logos and other visual elements, brand language associations made by consumers, consumers' perceptions of quality and other relevant brand values

3.2 Branding Elements to Create a High Equity Brand

You create these associations in everything you do – advertising messages, logos, names used, segments served, etc. If you use a statement in your advertising that you are the “Team to Trust” – you hope that “trust” will become a brand association. If you serve a specific segment, then that segment is likely to become associated with your brand. Everything you do in terms of marketing and actions creates brand associations.

Basic Branding Elements:

Brand Name

Slogans

Logo

Symbols/Pictures

Marketing Messages

Markets Served

Traditionally, your branding elements are the most noticeable features associated with the brand itself – the brand name, slogans, logo, and symbols or pictures used on product offerings and contained in any marketing messages. But, it is important to know that branding elements extend to the content of the marketing message itself and even your positioning within the marketplace. Every aspect of these elements creates your brand image. It is important that this image is relevant to your customer, clear in what it stands for, and offers some point of differentiation from your competition.

3. 3 Customer Based Brand Equity

The customer based brand equity model approaches equity from the perspective of the consumer. Understanding the needs and wants of consumer and devising products and programs to satisfy them are at the heart of successful marketing. The basic premises of the CBBE model is that the power of a brand lies in what customer have learned, felt, seen, and heard as a result of their experience over time.

In other words, the power of a brand lies in what resides in the customers mind.

The basic premise pf the CBBE model is that the power of a brand lies in what customers have learned, felt, and heard about the brand as a result of there experience over tie. In other words, the power of a brand lies in what resides in the mind of customer.

Customer based brand equity is formally defined as the differential effect that brand knowledge has on consumer response to the marketing of the brand. There are three ingredients to this definition:

Differential effect Differences in consumer response

Brand knowledge A result of consumers’ knowledge about the brand

Consumer response to marketing Choice of a brand Recall of copy points from an ad Response to a sales promotionEvaluations of a proposed brand extension

A brand is said to have positive customer based brand equity when consumers react more favorably to a product.

3.4 Sources of brand equity:

Customer based brand equity occurs when the consumers has a high level of awareness and familiarity with the brand and holds some strong favorable, and unique association in memory. So the two sources of brand equity are Brand Awareness and Brand image.

3.4.1 Brand Awareness

Brand awareness is the first step in creating brand image. Brand awareness is strength of node in memory. It consists of brand recognition and brand recall performance. Awareness can be created through increasing the familiarity of the brand through repeated exposure (for brand

recognition). Forging strong associations with the appropriate product category or other relevant purchase or consumption cues (for brand recall).Awareness is created not only through advertising but also through other devices such as logos, packaging and associations (such as community sponsorship).

Consequences f brand awareness marketer can get three advantages in consumer decision making:

Learning advantageso Register the brand in the minds of consumers

Consideration advantageso Likelihood that the brand will be a member of the consideration set

Choice advantages o Affect choices among brands in the consideration set

3.4.2 Brand Image

Positive brand image is created through favorable brand associations. There are three considerations here.

First, the brand associations should be salient: they should be aimed at increasing the probability of buying, repeat buying or recommending the brand to others.

Second, the brand associations should be strong. Do the associations come to mind readily? It is not enough if positive associations exist in customers' mind. They should be strong enough. Customers do not choose a brand from a set of all known brands. Rather, they choose a brand from a small set of brands that come to their mind unprompted when they think of a brand. This set, known as the 'evoked set', is considerably smaller than the'Elicited set' of brands, like brands that customers know about and can rate when prompted to by the researcher. The evoked set generally consists of brands with strong associations.

Third, at least some of the brand associations should be unique. For instance, reliability may be a good association for a computer. But if most brands are considered sufficiently reliable, then this association does not benefit one brand over another. It provides no rationale for choosing one product over another. Therefore,Associations should not only be strong, but at least some of them should be unique if we are to create brand equity.

The image of your brand must embody the character of the company, the characteristics of the product itself (or service), and the image of the user. Brand image then becomes the sum total of knowledge, experience and feelings a person carries in connection with your brand name. At each and every contact point from the website design to the receptionist that answers the phone, the brand image is either reinforced or diminished. This response depends on how well you are

delivering the brand promise and whether your customer can move your brand to the stage three-- brand preference.

3.5 Benefits of Brand Equity:

Strong brand equity provides the following benefits:

Facilitates a more predictable income stream.

Increases cash flow by increasing market share, reducing promotional costs, and allowing premium pricing.

Brand equity is an asset that can be sold or leased.

Brand Equity improvement increases business value and provides many strategic advantages to your company:

Positive brand equity allows you to charge a price premium relative to competitors with less brand equity.

Strong brand names simplify the decision process for low-cost and non-essential products.

Brand names can give comfort to buyers unsure of their decision by reducing their perceived risk.

Brand names are used to maintain higher awareness of your products, and they provide for continuity when company’s are acquired or reorganized.

Company’s use brand equity to gain leverage when introducing new products.

The brand name is often interpreted as an indicator of quality.

Strong brand equity insures that your products are considered by most buyers..

Your brand can be linked to a quality image that buyers want to be associated with.

Higher brand name equity leads to greater loyalty from customers.

Strong brand equity is the best defense against new products and new competitors.

Improvements in brand equity lead to higher rates of product trial and repeat purchasing due to buyers' awareness of your brand, approval of its image/reputation and trust in its quality.

Brands have many of the same implications as capital assets (like equipment and plant purchases) on a company's bottom line, including the ability to be bought and sold and the ability to provide strategic advantages.

Strong brand names simplify the decision process for low-cost and non-essential products.

Brand name can give comfort to buyers unsure of their decision by reducing their perceived risk.

High brand equity makes sure your products are included in most consumers consideration set.

Allow you to charge a price premium compared to competitors with less brand equity.

Brand names are company assets that must be invested in, protected and nurtured to maximize their long-term value to your company.

Maintain higher awareness of your products.

Use as leverage when introducing new products.

Brand names represent real assets that must be invested in, protected and nurtured to maximize their long-term value to your company. Brands have many of the same implications as capital assets (like equipment and plant purchases) on a company's bottom line. Brand names increase business value, including the ability to be bought and sold and the ability to provide strategic advantages.

3.6 Does brand equity vary across customers?

Brand equity does vary across individuals, as we would expect, and we can measure these differences. The data collected in brand equity studies can also be used to segment the market into various groups based on the benefits they seek. Using the utility estimates from the conjoint models, we can identify benefit segments in your market. These segments can then be compared to each other to highlight differences in brand equity between various types of product users, different levels of price-sensitivity, and different levels of feature importance. Demographic and psychographic profiles of these benefit segments can ultimately be used to target specific advertising messages to groups of potential purchasers based on the desires of those groups. Coupons might be sent to those in the most price-sensitive segments, while detailed product literature might be sent to those who place more value on specific features of your products.

3.7 Brand Equity as a Corporate Value.

Both brand and equity are two complex terms and concepts, so you might wonder whether they cause a problem in the corporate value statement. But there are valuable reasons to include this value in the corporate values statement.

According to a study done by Kevin Lane Keller and Keith Richey "A successful 21st century firm must carefully manage its corporate brand personality... three core dimensions of corporate brand personality ... are crucial for marketplace success are outlined as Heart, Mind and Body. These traits have an interactive effect".

In this way it is possible to see your company as a private person. But then the next step is to project the company's behavior to individual traits. Keller and Richey do this by attributes as discipline and creativity for the mental dimension. But then it becomes hard to find out when you need one or (more of) the other.

Yet the idea of defining and building up a brand is quite important. Companies who tend to such a direction are those where representation is very important.

As a single corporate value I wouldn't recommend to use it. It is hard to match other values. As a corporate concept it is very valuable, but for internal use only.

Chapter 4

Building Brand Equity

4.1 Approaches to build Brand Equity:

Brand equity is the sustained value that customers placed on a brand over others. Brand equity is built through a consistent and sustained delivery of promise. This suggests that brand equity is built over time. Equity is not built in a day. Merely understanding the equity markets is enough should tell an individual something vital about equity building. Brand equity is value is viewed in terms of trust, dependability, security and more importantperception.

When a brand has gained equity, it guarantees the fact that less amount of money will be spent on marketing activities without much concern for what the implications will be. When brand equity is built, efforts need to put in place to ensure it sustainability. Like every structure, it takes time to build something but within hours, days, a permanent damage can be made that can make the structure goes under.

Having established that, let us look at some components that can assist the brand equity to build properly:

1. Superior customer service:

Many brands often forget what bring them to the top. Because they now have more customers, they treat their old customers as nobody. So the brand should be focused to retain the existing customers as well as creating new customers. If do so the perception of the brand will remain positive among the people.

2. Unreliable product/service quality:

Many brands start to cut corners to make more profit. This will erode brand equity. The brand should always symbolize its core components and unique attributes based on which it is built. It shouldn’t compromise with the quality in terms of price. If the customer thinks the brand worth the price then the brand can charge high price premiums.

3. Changes that reduce perceived values:

Some brands just make some internal changes that are not called for just to show off. When such changes are made particularly those that affect point of contact with the brand, the brand image suffers immediately. That is why people who hold the baton in every brand must be keen observers so they can have accurate assessment of the changes that need to be made.

4.2 Building and Managing Brand Equity:

In his 1989 paper, Managing Brand Equity, Peter H. Farquhar outlined the following three stages that are required in order to build a strong brand:

1. Introduction - introduce a quality product with the strategy of using the brand as a platform from which to launch future products. A positive evaluation by the consumer is important.

2. Elaboration - make the brand easy to remember and develop repeat usage. There should be accessible brand attitude, that is, the consumer should easily remember his or her positive evaluation of the brand.

3. Fortification - the brand should carry a consistent image over time to reinforce its place in the consumer's mind and develop a special relationship with the consumer. Brand

extensions can further fortify the brand, but only with related products having a perceived fit in the mind of the consumer.

4.3 Alternative Means to Brand Equity:

Building brand equity requires a significant effort, and some companies use alternative means of achieving the benefits of a strong brand. For example, brand equity can be borrowed by extending the brand name to a line of products in the same product category or even to other categories. In some cases, especially when there is a perceptual connection between the products, such extensions are successful. In other cases, the extensions are unsuccessful and can dilute the original brand equity.

Brand equity also can be "bought" by licensing the use of a strong brand for a new product. As in line extensions by the same company, the success of brand licensing is not guaranteed and must be analyzed carefully for appropriateness.

4.4 How to Use Brand Equity Information for building brand equity:

Market simulations and scenarios can be performed. Using estimated utilities, we can simulate market preferences for our products and those of the competition. Various scenarios can be created which involve the introduction of new products or modifications to existing products to determine the effects of these changes on preferences. This information can be used to:

Evaluate product line extensions with and without the use of an existing brand name.

Introduce new products with and without brand name affiliation.

Estimate the premium your brand carries relative to competition for the same features/benefits.

Determine the effects of improving Brand Equity or reducing your investment in a high-equity Brand.

Estimate the impact of moving into new geographic areas where your brand name is unknown or has negative perceptions.

Understand the effects of co-branding with a company who has more or less Brand Equity than does your brand.

Monitor Brand Equity over time for your company and your competitors in order to make timely decisions to counteract changes in competitors' Brand Equity.

Measure the effectiveness of your advertising and marketing campaigns in building your brand image.

Clearly, brand equity varies across individuals, but we can measure these differences and segment the market into various groups based on perceived benefits. Using the utility estimates from the conjoint models, we can identify benefit segments in your market. These segments can then be compared to each other to highlight differences in Brand Equity between various types of product users, different levels of price-sensitivity, different levels of feature importance. Demographic and psychographic profiles of these benefit segments can ultimately be used to target groups with specific messages.

 

Chapter 5

Measuring, Managing, and protecting Brand Equity

5.1 Managing and measuring brand equity

To understand how to implement a brand equity measurement and managing system, it is important to take a perspective of the brand value chain.

5.1.1 The brand value chain:

The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value.

In the brand value chain there are four value stages:

1. Marketing program investment.2. Customer mind set.3. Market performance.4. Shareholder value.

And three program multiplier:

1. program quality2. Market place condition.3. Investor sentiment.

The brand value chain has several basic premises. Fundamentally, it assumes that the value of ultimate resides with customers. Based on this insight, the model net assumes that the brand value creation process begins when the firm invests in a marketing program targeting actual or potential customers. The marketing activities associated which the program then affects the customer mindset with respect to the brand-what customers, then results in certain outcomes for the brand in terms of how it performs in the marketplace-the impact of individual customer actions regarding how much and when they purchase, the price that they pay, and so forth. Finally, the investment community considers this market performance and other factors such as replacement cost and purchase price in acquisitions to arrive at assessment of shareholder value in general and a value of the brand in particular.

Figure : The Brand Value Chain

Marketing Program Investment.

Customer Mindset

Market Performance

Program Quality Marketplace Condition Investor Sentiment

VALUE STAGESShareholderValue

ProductCommunicationTradeEmployeeOther

AwarenessAssociationsAttitudeAttachmentActivity

Price premiumsPrice elasticitiesMarket shareExpansion successCost structureProfitability

Stock priceP/E ratioMarket capitalization

MULTIPLIER

ClarityRelevanceDistinctiveness

Competitive reactionChannel supportCustomer & profile

Market dynamicsGrowth potentialRisk profileBrand contribution

The model also assumes that a number of linking factors intervene between these stages. These linking factors determine the extent to which value created at one stage transfers or “multiplies” to the next stage. Three sets of multipliers moderate the transfer between the marketing program and the subsequent three value stags: the program multiplier, the customer multiplier, and the market multiplier.

5.2 Brand Tracking Studies

Tracking studies involve information collected from consumers on a routine basis over time. Such studies typically employ quantities to provide marketers with current information as to how their brands and marketing programs are performing on a number of key dimensions identified by the brand audit or other means.

A number of issues must be addressed in implementing a brand equity tracking system. These issues include:

1. what to track2. how to track3. how to interpret marketing studies

5.2.1 What to track.

Brand tracking studies are basically concerned with the measurement of the sources of brand equity and the elements of brand building blocks. To a greater extent, each brand faces a unique situation that must be reflected I different types of questions in its tacking survey.

5.2.1 Product-Brand Tracking:

Tracking an individual branded product involves measuring brand awareness and image for the brand as well as measuring the level of achievement on the brand building blocks. Given that brands often complete at the augmented product level, it is important to measure all associations that may distinguish competing brands. It is also important to track more general, “higher-level” judgments, lickings, and other outcome-related measures.

5.2.2 Corporate or Family Brand Tracking Studies

In the case of a family or corporate bran, some additional questions may be warranted. Besides the measures of corporate credibility, other specific measures of corporate brand associations are possible, including some of the following (illus tread with GE corporate brand):

1. How well managed is GE?2. How easy is it to do business with GE?3. How concerned is GE with its customers?4. How approachable is GE?5. How accessible is GE? 6. How much do you like doing business with GE?

A number of firms track corporate image. When a brand is identified with multiple products, as with a corporate or family branding strategy, one important issue is which particular products the brand reminds consumer of.

5.2.3 Global Tracking

If tracking involves diverse geographic markets then it may be necessary to have a broader set of background measures to put the brand development in those markets in the right perspective.

5.3 How to Conduct Tracking Studies

Here the key focus is concentrated on the brand element(s) to be used in the studies. Concluding tracking studies also requires deletions in trams of

1. Whom to track

2. When and where to track

5.4 How to Interpret Tracking Studies

To develop sensitive tracking measures, it may be necessarily to phrase questions in a comparative or temporal manner. One of the most important tasks in conducting brand tracking studies is to identify the determinates of brand equity. The impact of the different multipliers the brand value chain must not be overlooked.

5.5 Measuring Brand Equity

After building the brand equity, the prime concern that the organization has to do is to measure the position or the market acceptance of the brand. This measuring can be done based on two approaches. They are-

1. Firm, product, and consumer level approach.2. Utility estimation approach.

5.5.1 Firm, product, and consumer level approach.

There are many ways to measure a brand. Some measurements approaches are at the firm level, some at the product level, and still others are at the consumer level.

Firm Level: Firm level approaches measure the brand as a financial asset. In short, a calculation is made regarding how much the brand is worth as an intangible asset. For example, if you were to take the value of the firm, as derived by its market capitalization - and then subtract tangible assets and "measurable" intangible assets- the residual would be the brand equity. One high profile firm level approach is by the consulting firm Interbrand. To do its calculation, Interbrand estimates brand value on the basis of projected profits discounted to a present value. The discount rate is a subjective rate determined by Interbrand and Wall Street equity specialists and reflects the risk profile, market leadership, stability and global reach of the brand.

Product Level: The classic product level brand measurement example is to compare the price of a no-name or private label product to an "equivalent" branded product. The difference in price, assuming all things equal, is due to the brand. More recently a revenue premium approach has been advocated.

Consumer Level: This approach seeks to map the mind of the consumer to find out what associations with the brand that the consumer has. This approach seeks to measure the awareness (recall and recognition) and brand image (the overall associations that the brand has). Free association tests and projective techniques are commonly used to uncover the tangible and intangible attributes, attitudes, and intentions about a brand. Brands with high levels of awareness and strong, favorable and unique associations are high equity brands.

All of these calculations are, at best, approximations. A more complete understanding of the brand can occur if multiple measures are used. However, brand equity is not always positive in value. Some brands acquire a bad reputation that results in negative brand equity. Negative brand equity can be measured by surveys in which consumers indicate that a discount is needed to purchase the brand over a generic product.

5.5.2 Utility estimation approach.

How to Measure Brand Equity?

Most evaluations of Brand Equity involve utility estimation. In essence, the value (utility) of a brand name product's features/benefits and price level versus unbranded measures. The difference between total branded utility and total unbranded utility of the product features/benefits is the value of brand equity. Another approach is to measure the price premium for the branded product over the unbranded product. In other situations, the utility of the brand is measured directly and added to the feature utilities to produce an overall utility for the product.

Besides utilities, there are other important determinants of brand equity. These contributing factors include: awareness (aided, unaided), associations with various attributes, as well as overall perceptions. Generally, recognized brands should be measured. It is also useful to obtain estimates of marketing, advertising and promotional expenses for the major brands in the market. Armed with utility estimates, key performance measures (awareness, association scores,

preference) and expenditure levels, we can develop a complete picture of the relative value of each brand. This information allows you to understand the major forces driving brand equity and purchase decisions that lead to superior brand equity strategies.

How to Estimate Utilities (Value)

We use trade off analysis (e.g., conjoint analysis, discrete choice modeling) to estimate utilities. These are very powerful and proven techniques for measuring the value people place on product features, prices and brand names. The most effective research designs for measuring Brand Equity use a two-stage conjoint model:

First, we measure the utilities of all key features of the product, including price and brand name, and in total. Respondents are also asked how they make tradeoffs, and what criteria drive their decision making. From this data we are able to derive utilities for each product feature (often combining and re-defining terms to arrive at the real underlying buying factors) and calculate an estimate of brand equity. This demands careful analysis because experience has shown that price utility is usually understated when it is included with many other product features. And without an accurate estimate of price utility, we can not measure the true monetary value of Brand Equity.

Second. Additionally information is collected to correct the understated price utility. This step uses choice-based conjoint task or discrete choice modeling to evaluate just two attributes: price and brand name. Several Brands are shown at different price levels and respondents are asked to choose which one they would purchase. By isolating price with Brand name, we are able to accurately measure price utility. Brand equity (stage 2) is linked back to the first stage conjoint model. Together these approaches yield brand equity, price sensitivity and feature utilities.

Managing Multiple Brands:

Different companies have opted for different brand strategies for multiple products. These strategies are:

Single brand identity - a separate brand for each product. For example, in laundry detergents Procter & Gamble offers uniquely positioned brands such as Tide, Cheer, Bold, etc.

Umbrella - all products under the same brand. For example, Sony offers many different product categories under its brand.

Multi-brand categories - Different brands for different product categories. Campbell Soup Company uses Campbell's for soups, Pepperidge Farm for baked goods, and V8 for juices.

Family of names - Different brands having a common name stem. Nestle uses Nescafe, Nesquik, and Nestea for beverages.

Brand equity is an important factor in multi-product branding strategies.

5.6 Managing Brand Equity in Rapidly Changing Markets:

Several years ago, brand equity received the ultimate accolade in a capitalist society: a dollar value- sometimes listed with other intangible assets in the annual report. The highest valued brand today is Coca Cola. Its value according to Financial World is $39 billion. That's the extra margin people will pay to get the real thing over a generic brand. On the other hand, IBM's brand, though third in value this year, was by one estimate actually negative last year. In other words, if you put the IBM logo on the product, it actually reduced the value of that product versus an unknown brand.

Both of these companies, Coca Cola and IBM, have gone through enormous change, yet one managed to build its equity and one lost it. Though each company's management decisions and style had something to do with the outcomes, they also faced different types of rapid change, one far more challenging than the other.

Coca Cola was taking its core product, Coke, and expanding the product in new form factors and new overseas markets. The brand promise stayed the same whether it was sold in a Coke store in New York or a road side stand in Mongolia - refreshment, good times, and pure Americana. While maintaining a brand's strength through all this continuous change is certainly not a no-brainer - witness the New Coke debacle and the Pepsi Challenge - a brand encountering this kind of rapid change is easier to manage than the kind of change IBM faced: disruptive change.

Disruptive change occurs when a stable market encounters a new technology or social phenomenon that totally alters the solutions customers will demand. The digitization of video is a perfect example: it will alter the way we consume cable and broadcast programming, the way we rent movies, the way we use our computers - and companies in these industries will have to change rapidly and radically. Another example: The social phenomenon of "the new temperance" has led to whole new beverage categories as "alcohol free beers" as well as the spectacular growth of coffee bars. Bars that survived have espresso machines installed. Our public libraries are going through this kind of brand redefinition: once the repository of books, their focus on book acquisition dropped while the focus on electronic access and community activities went up, and now they are public media and Internet access centers as much or more than they are lenders of books.

Managing a brand through disruptive change requires guarding the historical brand promise - in IBM's case, a single source supplier for all computing needs, safety, security - while expanding the brand promise (and product line) to incorporate the new disruptive technology, in IBM's case, client server networking between disparate types of equipment.

Looking at some of the world's strongest brands, they have each distinguished themselves from all competitors in the market. And each has been managed through periods of rapid change which have actually strengthened the brand. Despite morphing of markets and products, we immediately recognize each brand's promise, just by looking at a name and symbol - both in terms of product category and in emotional benefit.

Think of the technology names with which we are familiar. Intel makes the world's fastest processors. Branding through a period of continuous change has so strongly associated this symbol with attributes of speed and power that people buying 286 computers are still looking for Intel Inside. It gives buyers the emotional benefit of feeling smart, like they know what they're doing when they buy a PC, and secure that they're buying the best. That brand has so much equity that even the Pentium scandal where headlines screamed that Pentium doesn't calculate accurately didn't slow Intel sales.

So one of the benefits of branding is protection from customer wrath in times of trouble. I've talked about the case for higher margins - certainly true for Intel. A strong brand also yields higher repurchase rates, because buyers tend to be risk averse, and why try something new if you already know and like the brand you've bought before.

Continuing with the Intel brand example: Intel gets better productivity from its marketing efforts because it doesn't have to spend any time or money explaining what Intel is. You see a banner for Intel at a trade show and all it has to say is Intel. An ad for Intel products can really focus on the products and benefits and doesn't have to explain Intel. Best of all, every headline, every claim has more power and credibility because it comes from Intel.

5.7 Managerial Implications of Brand Equity:

We address three topics in this section (brand and brand equity management, the equity of store brands and brand equity on the Internet) and mention a number of research needs that were indentured in the workshop.

5.7.1 Brand Equity Management.

Senior executives responsible for managing corporate brands are also often in charge ofadvertising. This may react an assumption that management of corporate communications will also result in proper brand management because ®rms' primary brand management goal is often thought to be increased market awareness of the brand, associated with strong brand identity. The broader de®nition of brand equity that we have adopted in this report implies, however, that a successful management of the brand assets must involve more than just advertising and consider all the aspects of product strategy and marketingmix. This implies, among other things, that communications between ®rm and consumers must be designed to enhance brand equity by improving consumers' perceptions of the®rm's credibility to deliver what is promised (Erdem and Swait 1998).

Further research is needed on the issue of consumer learning in the presence of brandsto guide brand managers through the process of de®ning long-term brand managementStrategies. Existing research makes us realize that knowledge of consumer dynamic choice processes are integral to creating a strong brand. Brand extension research suggests thatbrands

should extend to product categories where the brand's unique association is relevant(Broniarczyk and Alba 1994b). Co-branding research suggests that one mechanism for brand to maintain a consistent positioning and broaden its appeal is to partner with another that possesses associations on which the ®rst brand fares poorly (Park, Jun, and Shocker1996). Many of the same issues that affect the transfer of brand bene®ts to line extensions and brand associations (e.g. co-branding) also affect the branding decisions of merging institutions. ``Which brand do we go with?'' is a question often heard in ®rms going through mergers. Everyone realizes this is an essential question, but there is little theoretical or empirical research to guide decision making in this area.

Approaches to brand equity measurement that are choice-based (see Section 4) have shown the feasibility and usefulness of measuring consumer-based brand equity in monetary terms. However, they do beg the question of calculating the dollar value of umbrella brands or of multiple products under a portfolio of brands. Research is needed into the mechanisms that govern the aggregation of brand equity across products and/orbrands.

5.7.2 The Equity of Store Brands.

In many markets, private labels or store brands have become a dominant feature. For adiscussion of factors behind the emergence and success of store brands in Western markets see Quelch and Harding (1996) and Steenkamp and Dekimpe (1997). In spite of the emergence and growing importance of store brands, academic research has largely concentrated on the equity of national brands. However, a number of important differences between national brands and store brands require that further and separate attention be given to the latter.

First, apart from being a source of pro®tability, carrying a store brand in a particular category also strengthens the retailer's negotiating position vis-aÁ-vis manufacturers.

Second, store brands can be used to encourage consumer loyalty to the chain rather than to national brands. Third, the marketing of store brands has been done differently than that of national brands (e.g. advertising for store brands, although substantial and increasing, is still much less than for national brands).

Below, we identify a number of key issues which we believe require future research.1) How does store brand positioning (e.g., reasonable quality/low price, high quality/reasonable price, premium quality/premium pricing) impact the ability of a retail chain touse the store brand as a means to differentiate itself from other chains and thus build store equity?

2) Should a consistent positioning be used for all product categories? If so, is this desirable as the competitive context differs across categories? What are the implications of the consistency of the positioning (or lack of it) across different product categories forstore credibility and store equity?

3) Several studies have documented the asymmetry ineffects of price promotions: price cuts by national brands hurt store brand sales more than vice versa (Allenby and Rossi 1991, Blattberg and Wisniewski 1989, Sethuraman 1995). Since a key competitive weapon of many store brands is its price, price promotions may even strengthen their value positioning. Research is needed on the long-term effectsof price promotions on the equity of store brands and national brands.

4) To what extentare ®ndings of research on store brands generalizable across countries? Much of existing research has been conducted in the US. However, the position of store brands is much stronger in other Western countries. Known differences between these markets indicate that ®ndings of research conducted in the US may be less applicable to other Western countries. Indeed, we believe that the relative success of store brands in Europe vis aÁ vis their counter parts in U.S. can at least be partially explained by answering some of the questions we raised above. For example, it can be said that ``store brands'' as a category delivers more clear and credible information (similarly, it evokes more favorable and unique associations) in Europe than it does in U.S.

5.8 Protecting Brand equity:

The marketing mix should focus on building and protecting brand equity. For example, if the brand is positioned as a premium product, the product quality should be consistent with what consumers expect of the brand, low sale prices should not be used compete, the distribution channels should be consistent with what is expected of a premium brand, and the promotional campaign should build consistent associations.

Finally, potentially dilutive extensions that are inconsistent with the consumer's perception of the brand should be avoided. Extensions also should be avoided if the core brand is not yet sufficiently strong.

5.9.1 How to Protect Your Business's Brand Equity?

For as long as you own your business's brand, you must protect that brand's equity (meaning its

value). While your business builds the equity of your brand, always monitor these four strategic

areas to be sure that all decisions related to your brand are consistent with your brand position,

promise, and image:

Product: If you adopt new product lines or make product adjustments, be sure they match your

brand image and market position.

Pricing: Be sure that all pricing decisions align with your brand’s market position and image.

Discounting is a popular way to win quick sales in today’s cost-conscious market environment,

but if your market position is that of the high-end, elite brand, a discounting strategy may be the

equivalent of shooting your brand in the foot.

Promotion: Be sure all promotions are consistent with your brand identity. As brands mature, too often they experience a costly, brand-eroding diversion from the original brand image and promise.

Place: While you enhance your distribution — the way you get your product to your market — be sure that you select only those channels that support your brand identity. Too many high-end brands have suffered by cutting distribution deals with warehouse outlets only to later receive the cold shoulder from the boutique retailers with whom they’d built their reputations and clientele.

5.9.2 Protecting Your Brand from Brand Equity Landmines:

You need to protect your brand from image-destroying events. Otherwise, your brand can actually negatively impact your business's image. Most brand-damaging events fall into one of these categories

A lapse in social responsibility. A lapse in corporate behavior. A lapse in personal behavior of a high-profile executive, spokesperson, or leading brand

representative. Death or sudden departure of a high-profile business leader. Product failures, malfunctions, or dangers.

Whether real or perceived, these problems may be the result of human errors, inadequate or overlooked quality procedures and controls, violations of procedures, circulation of misinformation, consumer misunderstandings, or out-and-out product sabotage.

Chapter 6

A study on Otobi furniture’s

Otobi furniture’s

6.16.1 About Otobi About Otobi::

Otobi Furniture a part of Otobi Group is one of the market leaders of furniture market of Bangladesh. They started their business in Bangladesh in the year 1975 with the slogan “Trusted across the World”. And now they crossed the boundary and operating business also in India. They are assuming themselves as the market leader for last 10 years. Though their price is a bit higher but as they provide the best quality furniture people are ready to get that with any cost. Not only that they have the biggest brand image in our country. They have already earned the first place in the office furniture. That is why now a day corporate office means, furniture from Otobi. Otobi furniture a part of Otobi limited which is a combination of four different types of business. They are as follows,

Otobi Furniture: Combination of office and furniture.

Home appliances: Washing Machine, air conditioner Carpet: under: Appolo Limited. Decorative Light: Also under Apolo Limited.

Otobi furniture has the biggest collection of furniture like world class chair, world class computer furniture, world class home furniture, world class table, world class swivel chair and file cabinet and plastic furniture. Otobi furniture was given the award of enterprise of the year 2001. Beside their corporate office in Dilkhusha, Dhaka, they have 16 sales and display center in Dhaka and Chittagong city and around 200 dealers in the whole country. They have about 32 outlets outside the country.

Otobi Furniture stared its journey in the year 1975. They have a huge past records to tell. They are the market leader in the furniture industry for the whole last decade. We know that otobi furniture is a part of Otobi limited which was the creator of SAARC Foara of Karwanbazar, Sculpture of Rajshahi University, and Sampan of Chittagong Airport. All this are the biggest symbolic assets of our country. In fact the architect of these sculptures was Mr. Nitun Kundu who was the father of Mr. Onimesh Kundu, the Managing Director of Otobi Limited.

6.2 Sales VolumeSales Volume::

Otobi Furniture has an unbelievable sales amount in the prospect of Bangladesh. They have a sales volume of Tk. 30 crore per month that means, they have a sales of about three hundred and forty crore taka per month which is bigger than any other furniture company of Bangladesh. Among the sales after deducting all the expenses they have about 20% profit per year. That means they have a profit of Tk. 92 crore per year which is unbelievable in the prospect of Bangladesh. Not only as they are planning to increase the business in Bangladesh and outside Bangladesh we expect that the amount will be bigger in the future.

6.3 6.3 CompetitorsCompetitors::

The competition in the furniture market is increasing day by day as so many new firms are coming in the market. As a result, Otobi Furniture is facing a huge competition now a day. Their main competitors are,

Navana Furniture Partex Studio 45 Hatil Tanin Legacy

6.4 The SWOT analysis of Otobi furniture’s:

Strengths:

Strong national brand image

High quality products and services

High quality customer support

Medium price but product performance high

Industry leader in furniture’s in Bangladesh

Top class and fashionable furniture provider

Becoming a global company and brand

Achieving double sales growth for the last three years

Weakness:

The price is high for most of the customers

The particle boards doesn’t last for long time(Most of the furniture’s of Otobi are made with particle boards)

Most of the people fear the particle boards

It doesn’t have sufficient stores in Dhaka and in the country

Opportunities:

Otobi can increase its store number and market share and thus profits

Otobi can increase its product lines

Otobi can be an international brand by exporting its products in more countries

to expand more aggressively into new segment of the market and introduce new furnitures

Otobi should make more solid wood products

Continue global expansion – especially in the emerging markets e.g. china and India where population and demand is accelerating.

Threats:

More competitors are coming day by day. Ex.Partex, Hatil, High Fasion etc.

Sometimes competitors are introducing new products than Otobi

Chinese furniture’s are becoming popular for there style, price and quality

People still believe in solid wood products.

6.5 Brand equity of Otobi:

The brand equity of Otobi furniture’s is very good. They are the market leader for last 14 years. They have the biggest brand image in our country. They have already earned the first place in the office furniture. That is why now a day corporate office means, furniture from Otobi. Almost everyone knows about Otobi furniture’s. They provide fashionable and elegant furniture’s.

6.5.1 Brand awareness of Otobi:

The brand awareness of Otobi furniture’s is very good. People can easily recognize the Otobi brand and they also can easily recall the performance of Otobi. When the urban people wants to buy furniture they think about the Otobi furniture’s. They keep the Otobi furniture’s in their considerations and they try to buy the Otobi furniture’s.

6.5.2 Brand image of Otobi:

Otobi has positive brand image among its customers. Customers think that Otobi furniture’s are fashionable and long lasting. Otobi furniture’s have become the symbol of status. Customers also buy Otobi products because they provide warranty and a very good after sales service. They care about there customers.

Chapter 8

Conclusion

Conclusion

In a market where products are similar, branding can have a large effect on the price that

customers will pay. Brands therefore add value to a basic product or service by enabling the

product or service to command a higher price, or higher market share than an unbranded

equivalent. Brand equity helps a product to stay ahead in the market. Brand equity helps a

product to have a positive image on customers mind. Customers will buy that product which has

higher brand equity and higher brand knowledge. Brand equity helps to change the market share,

profit margins, consumer recognition of logos and other visual elements, brand language

associations made by consumers, consumers' perceptions of quality and other relevant brand

values. Brands with high levels of awareness and strong, favorable and unique associations are

high equity brands. The more brand equity a product has the more powerful would be the brand..

That is why everyone says that brand equity is the ultimate destination of a brand..

Bibliography

Books:

Strategic Brand management-Kevin Lane Keller.

Principles of Marketing-Philip Kotler.

Web Site:

www.google.com

www.wikipedia.com

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Appendix

Worlds top ten Brands 2010

1.Coca-cola:

Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines internationally. The Coca-Cola Company claims that the beverage is sold in more than 200 countries. It is produced by The Coca-Cola Company in Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century.

2010:

Coca-Cola gets almost everything right. Its brand promise of fun, freedom, spirit and refreshment resonates the world over and it excels at keeping the brand fresh and always evolving – all this, while also maintaining the nostalgia that reinforces customers’ deep connection to the brand. For such a large brand, it operates quickly, flexibly and innovatively, tailoring itself to local markets without tarnishing its legacy. This includes different flavor profiles in each country and shrewd distribution models in fast-developing world markets (for example, carts in India). It has adapted quickly to social media, with 11 million fans on Facebook and 96,385 followers on Twitter as of August 2010. And while its brand may not be perceived as the best corporate citizen, in reality it leads in this area as well, providing US $305 million through the Coca- Cola Foundation. The brand is likely to face challenges as customers grow more health conscious in the coming years, and soda is increasingly taxed in the U.S. However, it is already thinking ahead with aggressive targeting of fast developing markets and programs like Healthy Active Living which address this criticism head-on.

Brand value: 70,452 (million dollar)

2.IBM:

International Business Machines (IBM) is an American multinational computer, technology and IT consulting corporation headquartered in Armonk, New York, United States. IBM is the world's fourth largest technology company and the second most valuable global brand (after Coca-Cola). IBM is one of the few information technology companies with a continuous history dating back to the 19th century. IBM manufactures and sells computer hardware and software (with a focus on the latter), and offers infrastructure services, hosting services, and consulting services in areas ranging from mainframe computers to nanotechnology. At the end of May 2010, IBM bought the Sterling Commerce Unit from AT&T for about $1.4 billion. This is the second largest acquisition by IBM.

IBM has been well known through most of its recent history as the world's largest computer company and systems integrator. With almost 400,000 employees worldwide, IBM is second largest (by market capitalisation) and the second most profitable information technology and services employer in the world according to the Forbes 2000 list with sales of greater than 100 billion US dollars.

2010:

IBM made 108 strategic acquisitions over the past nine years to strengthen its portfolio and continue its seamless evolution from hardware to service to knowledge economy to innovation. Through this journey the company has more than once reinvented itself, doing a great job of anticipating areas of growth, high profitability and value creation. Today, IBM helps clients achieve flexibility and competitive advantage to succeed in the networked economy. Its focus on emerging economies allows the company to tap into double digit growth by providing the infrastructure its clients require. This year, IBM displayed its innovation through a host of social media initiatives, which you can read more about in our brand strength component section on page 7. IBM also leads its category when it comes to corporate citizenship.

Brand value: 64,727 (million dollar)

3.Microsoft:

Microsoft Corporation is a public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions. Established on April 4, 1975 to develop and sell BASIC interpreters for the Altair 8800, Microsoft rose to dominate the home computer operating system (OS) market with MS-DOS in the mid-1980s, followed by the Microsoft Windows line of OSs. The ensuing rise of stock in the company's 1986 initial public offering (IPO) made an estimated four billionaires and 12,000 millionaires from Microsoft employees. Microsoft would come to dominate other markets as well, notably the office suite market with Microsoft Office.

2010:

With the global recession, Microsoft saw its first drop in annual revenue – a three percent decrease from US $60.4 billion in fiscal 2008 to US $58.4 billion in fiscal 2009. Operating income and earnings per share also dropped. In recent years, Microsoft has spent more time creating defensive products rather than innovating – for example, launches of the Xbox to compete with Sony Playstation, Bing to compete with Google, the quickly abandoned Windows Kin Phone to compete with Apple iPhone, Windows 7 to compete with Linux, and updated other software such as Visual Studio, Microsoft Office and Microsoft DirectX. Still, despite the many rivals close on its tail, Microsoft maintains its position as the number one operating system on the market. This year, it proved it is still capable of innovation with the introduction of its Xbox Kinect, which uses original technology.

Brand value: 60,895 (million dollar)

4.Google:

Google Inc. is a multinational public cloud computing, Internet search, and advertising technologies corporation. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program. The company was founded by Larry Page and Sergey Brin, often dubbed the "Google Guys", while the two were attending Stanford University as Ph.D. candidates. It was first incorporated as a privately held company on September 4, 1998, and its initial public offering followed on August 19, 2004. The company's stated mission from the outset was "to organize the world's information and make it universally accessible and useful",and the company's unofficial slogan – coined by Google engineer Paul Buchheit – is Don't be evil. In 2006, the company moved to their current headquarters in Mountain View, California.

Google runs over one million servers in data centers around the world, and processes over one billion search requests and twenty petabytes of user-generated data every day. Google's rapid growth since its incorporation has triggered a chain of products, acquisitions and partnerships beyond the company's core search engine. The company offers online productivity software, such as its Gmail e-mail software, and social networking tools, including Orkut and, more recently, Google Buzz.

2010:

As Google continues its upward path, it increasingly finds it difficult to reconcile its brand promise, “Don’t be evil,” with the realities of a powerful global brand. Although it continues to leverage this messaging through investments in Google.org (its not-for-profit philanthropic arm) and a number of other initiatives, its access to user information and what it is doing with it is increasingly being scrutinized. Recently, it compromised a key value – trust – when it violated 176 million users’ privacy with Google Buzz. And though its effort to pull out of China, which was censoring the search engine, and realign with its message demonstrated its commitment to its promise, only a few months later, it was quietly persuaded to work with the regime again. Still, Google’s reach and record for innovation is undisputed. Expect the brand to continue to diversify and expand, even as it experiences increasing backlash.

Brand value: 43,557 (million dollar)

5.GE:

By 1890, Thomas Edison had brought together several of his business interests under one corporation to form Edison General Electric. At about the same time, Thomson-Houston Company, under the leadership of Charles A. Coffin, gained access to a number of key patents through the acquisition of a number of competitors. Subsequently, General Electric was formed by the 1892 merger of Edison General Electric of Schenectady, New York and Thomson-Houston Company of Lynn, Massachusetts, and both plants remain in operation under the GE banner to this day.[7] The company was incorporated in New York, with the Schenectady plant as headquarters for many years thereafter.

The General Electric Company, or GE, is an American multinational conglomerate corporation incorporated in the State of New York. In 2010, Forbes ranked GE as the world's second largest company, based on a formula that compared the total sales, profits, assets, and market value of several multinational companies. The company has 304,000 employees around the world.

2010:

GE continues its two-year decline in brand value. Whereas last year it was the ongoing problems at its consumer finance division that plagued the brand, this year it is GE’s lack of focus as it moves from ecomagination to its healthymagination initiative. While it continues to lead in terms of sustainability, this year the importance of green has decreased. Instead, efficiency has become the new watchword. GE has also been focusing on introducing more new products at more price points. The idea is to drive management practices to capture new opportunities – essentially taking a low-cost, fast-developing market business model and translating it to the developed world. While this may prove an opportunity, the brand’s current lack of direction due to the transition is driving down its value.

Brand value: 42,808 (million dollar)

6.McDonald’s:

The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant.McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving more than 58 million customers daily.

A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.[7]

McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, shakes, and desserts. In response to obesity trends in Western nations and in the face of criticism over the healthiness of its products, the company has modified its menu to include alternatives considered healthier such as salads, wraps and fruit.

2010:

The market leader in its category, McDonald’s remains globally versatile, approachable, value-driven and reliable in a year when Burger King fell off the table. Already a strong brand with deep roots, the recession reminded people once again of its great value. McDonald’s seized the opportunity to capture a new audience and drive sales even further by upgrading its coffee to make it more premium and introducing healthier menu options – a move that should help it in the long-term. This, along with constant rollouts of new café concepts and contemporized environments, put McDonald’s in more consideration sets for more occasions. The brand wins A’s all around for its corporate citizenship efforts, as well as its social media endeavors (particularly “Voice of McDonald’s”).

Brand value: 33,578 (million dollar)

7.Intel:

Intel Corporation is an American technology company, and the world's largest semiconductor chip maker, based on revenue. It is the inventor of the x86 series of microprocessors, the processors found in most personal computers. Intel was founded on July 18, 1968, as Integrated Electronics Corporation (though a common misconception is that "Intel" is from the word intelligence) and is based in Santa Clara, California, USA. Intel also makes motherboard chipsets, network interface controllers and integrated circuits, flash memory, graphic chips, embedded processors, and other devices related to communications and computing. Founded by semiconductor pioneers Robert Noyce and Gordon Moore, and widely associated with the executive leadership and vision of Andrew Grove, Intel combines advanced chip design capability with a leading-edge manufacturing capability. Originally known primarily to engineers and technologists, Intel's "Intel Inside" advertising campaign of the 1990s made it and its Pentium processor household names.

2010:

In a year that saw many companies pull back, Intel stayed the course, committing billions of dollars to new and updated manufacturing facilities, which accelerated the rollout of new processors. It looked for ways to expand the business in two directions: moving beyond the PC and server market, launching chips for everything from mobile phones to smart TVs; and creating ways to help its partners improve their businesses via an app store and the creation of an applications developer program. It has also addressed the issue of security by recently acquiring McAfee. The brand itself has been on a kick, simplifying things to help consumers navigate, but now must balance the strength of its heritage as a PC-centric firm with the clear need to become a brand for the future of computing, where phones, TVs, cars and everything else are themselves smart. Only time will tell whether the brand that acted as the engine of computing for the past 20 years will continue to play that role for the next 20.

Brand value: 32,015 (million dollar)

8.Nokia:

Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with over 123,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 41 billion and operating profit of €1.2 billion as of 2009. It is the world's largest manufacturer of mobile telephones: its global device market share was about 33% in Q2 2010, down from 35% in Q2 2009 and unchanged from Q1 2010 (beginning in 2010 Nokia revised its definition of the industry mobile device market that it use to estimate industry volumes). Nokia's converged device market share was about 41% in Q2, unchanged from Q1 2010. Nokia produces mobile devices for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia is also engaged in providing free digital map information and navigation services through its wholly-owned subsidiary Navteq.

2010:

For years, Nokia has been perceived as a company that is committed to enhancing of communications by offering affordable, accessible, functional and creative mobile phone devices and applications. However, while Nokia certainly maintains leadership in global market share of handsets, the brand has fallen behind where the most profitable sectors of the market have developed – most notably, smartphones. The brand was late in coming to market with a compelling product and it is in this new category that growth, relevance and emotional connection with the brand is built. Nokia was also caught unprepared for the follow-on explosion of apps and the OS they run on, making it difficult for the brand to build an effective ecosystem for its products. With these challenges and the weakening of the role of hardware over carriers, Nokia is seeing clear challenges ahead that may be hard to overcome in the short-term.

Brand value: 29,495 (million dollar)

9.Disney:

The Walt Disney Company is the largest media and entertainment conglomerate in the world in terms of revenue. Founded on October 16, 1923 by brothers Walt Disney and Roy Disney as the Disney Brothers Cartoon Studio, the company was reincorporated as Walt Disney Productions in 1929. Walt Disney Productions established itself as a leader in the American animation industry before diversifying into live-action film production, television, and travel. Taking on its current name in 1986, The Walt Disney Company expanded its existing operations and also started divisions focused upon theatre, radio, publishing, and online media. In addition, it has created new divisions of the company in order to market more mature content than it typically associates with its flagship family-oriented brands.

The company is best known for the products of its film studio, the Walt Disney Motion Pictures Group, today one of the largest and best-known studios in Hollywood. Disney also owns and operates the ABC broadcast television network; cable television networks such as Disney Channel, ESPN, and ABC Family; publishing, merchandising, and theatre divisions; and owns and licenses 11 theme parks around the world. The company has been a component of the Dow Jones Industrial Average since May 6, 1991. An early and well-known cartoon creation of the company, Mickey Mouse, is the official mascot of The Walt Disney Company.

2010:

Disney again leveraged its history of quality, family-fun experiences through clean, well-managed parks and kid-oriented movies and merchandise. This year, the youth-oriented brand continued to cultivate a strong social media presence, and announced that it would be rebranding its stores to make them more theme-park-like and multisensory. Despite the hits to the amusement park industry due to a decline in tourism, incentives like free tickets for volunteer work as well as a variety of discounts on park admission and hotel stays have kept the parks in demand. While the brand continues to expand, it could be more innovative about adapting to the needs of customers in different parts of the world, rather than just duplicating what it has done in the past.

Brand value: 28,731 (million dollar)

10.HP:

Hewlett-Packard Company, commonly referred to as HP, is an American multinational information technology corporation headquartered in Palo Alto, California, USA. The company was founded in a one-car garage in Palo Alto by Bill Hewlett and Dave Packard, and is now one of the world's largest information technology companies, operating in nearly every country. HP specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise servers, related storage devices, as well as a diverse range of printers and other imaging products. HP markets its products to households, small- to medium-sized businesses and enterprises directly as well as via online distribution, consumer-electronics and office-supply retailers, software partners and major technology vendors.

HP's posted net revenue in 2009 was $115 billion, with approximately $40 billion coming from services. HP the first IT company in history to report revenues exceeding $100 billion. In 2008 HP retained its global leadership position in inkjet, laser, large format and multi-function printers market, and its leadership position in the hardware industry. Also HP became #2 globally in IT services as reported by IDC & Gartner.

2010:

HP continues to expand its product portfolio since the acquisition of EDS in 2008 expanded the HP brand into the services category. The highly diversified business with its wide audience reach creates unique challenges. As it evolves into more of a services and software provider, HP needs to show that the innovation it is known for in hardware will be replicated in its newer, less tangible offers. The diversity of its competitors and geographies continues to put pressure on the brand, as it must play to both local and global considerations. The company is working to unify all businesses under one HP brand platform: “Let’s Do Amazing.” The recent launch of the brand campaign aims to highlight the breadth of the portfolio and infuse consistency across segments. Continued success hinges on the commitment of all business units and an effective engagement of its 300,000-person workforce.

Brand value: 26,867 (million dollar)