chapter 18: branding

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Chapter 18:Branding

Brand

A name, term, symbol, design, or combination thereof that

identifies a seller’s products and differentiates them from competitors’ products.

Value Proposition of Brands

Value Proposition: Set of benefits or values the brand promises to deliver to consumers to satisfy their needs.

Why should I buy your brand rather than your competitors’ brand?

Value Proposition

OnlineApple Store Fifth Avenue NYC

Onlinehttp://www.mallofamerica.com

Mall of America

Brands

Represents Ownership

Distinguishes from Competitors

Adds Value

Delivers a Promise

OffersConsistency

For the manufacturer

For the consumer

Brand Equity

Brand Equity is the power of a brand, through creation of a distinct image, to influence customer behavior.

Croft & Barrow$20.00

Cutter & Buck$62.00

Ralph Lauren $150.00

BW Top 100 Brands2008Rank

2007 Rank Company Brand Value

1 1 Coca-Cola $66.7

2 3 IBM $59.0

3 2 Microsoft $59.0

4 4 GE $53.1

5 5 Nokia $35.9

6 6 Toyota $34.0

7 7 Intel $31.3

8 8 McDonald’s $31.0

9 9 Disney $29.3

10 20 Google $25.6

Source: Business Week / Interbrand study

Why is Brand Important

Product identification Repeat sales (brand loyalty) Generate new product sales Quality or image association Product differentiation

Building Strong Brands

Starts with positioning

High Quality

Low Quality

High Price

LowPrice

Perceptual Map

Connecting to the Consumer

Values

Benefits

Attributes

Increasing Difficult for

Competitors to copy Positioning

Higher

Emoti

onal

Conn

ection

with

Cons

umer

s

Brand Constellations and Positioning

BrandingBrand Name

BrandMark

Brand Equity

MasterBrand

That part of a brand that can be spoken, including letters, words, and numbers.

The elements of a brand that cannot be spoken.

The value of company and brand names.

A brand so dominant that it comes to mind immediately when a product category,

use, attribute, or benefit is mentioned.

Master BrandsBaking Soda Adhesive Bandages

Rum

Gelatin

Soup

Cream Cheese

Crayons

Petroleum Jelly

Arm & Hammer Band-Aid

Bacardi

Jell-O

Campbell’s

Philadelphia

Crayola

Vaseline

An Effective Brand Name

Is easy to pronounce Is easy to recognize and remember Is short, distinctive, and unique Describes the product, use, and benefits Has a positive connotation Reinforces the product image Is legally protectable

OnlineLevesque Design(Portfolio, Logo Design)

Brand Names and Cars

Phonetic Symbolism: small units of sound and the meanings they convey

Used two fictitious words to test what sounds consumers prefer (e.g. “gimmel” and “gommel”)– (Short) “i” or “ee” sounds for products that are fast or

sharp (convertible, knife)– (Short) “a” or “oo” sounds for large, slow or dull

products (SUV, hammer) – “yoo” or “un” sounds are negative

“You may be buying a vowel”, Philadelphia Inquirer, 10/1/2007, Colleen Dunn

Branding Strategies

Brand No Brand

Manufacturer’s Brand Private Brand

IndividualBrand

Family Brand

Combi-nation

IndividualBrand

Family Brand

Combi-nation

Private Brand

GenericBrand

The brand name of a manufacturere.g. Ford Mustang, Starbuck’s Coffee

A no-frills, no-brand-name, low-cost product that is simply identified by

its product category.

Manufacturers’ Brands VersusPrivate Brands

Manufacturers’ Brand

The brand name of a manufacturere.g. Ford Mustang, Maxwell House

Coffee, Shredded WheatA brand name owned by a wholesaler

or a retailere.g. Sam’s American Choice

(Wal-Mart)

Advantages of Private Brand

Earn higher profits Less pressure to mark down prices Manufacturer may drop a brand or

become a direct competitor to dealers Ties customer to wholesaler or retailer No control over distribution of

manufacturers’ brands

Advantages of Manufacturers Brand

Develop customer loyalty Attract new customers Enhance prestige Offer rapid delivery, can carry less

inventory Ensure dealer loyalty

Branding Strategies

Brand No Brand

Manufacturer’s Brand Private Brand

IndividualBrand

Family Brand

Combi-nation

IndividualBrand

Family Brand

Combi-nation

Individual Brands VersusFamily Brands

Individual Brand

Family Brand

Using different brand names for different products

e.g. Procter and Gamble products

Marketing several different products under the same

brand namee.g. Sony products

Examples

P&G Brands (Individual)– www.pandg.com

Sony Brands (Family)– www.sony.com

Kellogg’s Brands (Individual and Family)– www.kelloggs.com

Pepsico’s Brands (Individual and Family)– www.pepsico.com

Individual Branding at P & G

Cobranding

Placing two or more brand names on a product or its package– Ingredient branding: part of the product

(Intel Inside)– Cooperative branding: brands get equal

treatment and borrow brand equity (Coach version of Lexus)

– Complimentary branding: marketed together, with a suggested usage (Bacardi and Coke)

Works best when two brands are equal in strength and target same customers

Onlinehttp://www.bose.com (Automotive Section)

Hampton Inn and Steak and Ale and

Bennigan’s

Cooperative Branding