Lecture 1 – WHAT IS A BRAND?

A history of branding

Products Sales Product marketing Corporate branding

Greek Civilization

Cattle branding

RomanCivilization

Pottery

Medieval

Flags & Standards

17th Century

Porcelain

Industrial Revolution

Appearance of to-be global brands

20th Century

WWWMedia proliferation

Transportation

What is brand equity?

• A set of assets (and liabilities) linked to a brand’s name and symbol– The value that a brand adds to a product or service

– Much like the concept of goodwill

• Future expectations; money

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Value of a BrandRowntree (KitKat, After Eight & Polo Mint)• Nestlé paid 45 bill.; 5x asset value

Kraft General Foods• Philip Morris paid 129 bill; 4x asset value

Strong Brands- Something striking??

Asset factors - building a brand strong

1. Commitment to quality – perceived (delivered) quality = fastest route to consumer satisfaction

2. Awareness – promotions, ads, logo (increase customer familiarity)

3. Fostering loyalty – even in troubled times

4. Strong and clear brand identity build upon associations

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1. Perceived quality

• The only brand association which can drive financial performance– Influences total perception of the brand

• Price ↔ Quality position

– Quality is a key strategic factor for most companies (TQM)• Often found in mission statements• But then what is quality??

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2. Brand awareness

• The strength of the brand’s presence in the consumer’s mind

• Measured according to ways in which consumers remember the brand – recognition– re-call

– recognition v recall?

– the ultimate awareness level = brand name dominance

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3. Brand loyalty

• Brand value is largely created by customer loyalty

– A brand without loyalty is vulnerable

• Loyalty has great impact on marketing costs

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4. Brand associations

• Brand equity strongly supported by associations made by consumers – Associations might include product attributes,

celebrity spokesperson or particular symbol

• Brand associations driven by brand identity

THUS, a key to building strong brands is to develop and implement a brand identity

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Building strong brands is doable!

Key is to:

• develop brand identity– know what the brand stands for

• express the identity – effectively and consistently

• manage internal forces

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Brand Identity

Brand identity is the driver of one of the four principal dimensions of brand equity

• Brand associations.

Brand identity:

• A unique set of brand associations that the brand strategist aspires to create or maintain.

– what the brand stands for and imply a promise to customers from the organisation members.

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Brand Identity Traps

Limits the identity leading to ineffective and often dysfunctional brand strategies.

1. The brand image trap Customer > Company

2. Brand Positioning Trap Part of Identity but not instead of

3. External perspective Trap Identity < Why customers buy

4. Product-Attribute Fixation Trap Most common trap

Limitations:» Fail to differentiate» Are easy to copy» Assume a rational customer» Limit brand extension strategies» Reduce strategic flexibility

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- + Relevance

Brand image trap

• Brand image trap: lack of efforts to go beyond the brand image

• Brand image becomes brand identity• Solution: provide useful and necessary

background information when developing brand identity to improve the customer perception

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Brand image vs Brand identity

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Brand image Brand identity

Is passive and looks to the past Should be active and look to the future, reflecting associations aspired for brand

Tends to be tactical Should be strategic, should reflect the business strategy to lead to sustainable advantage

Might not be silent Should reflect brand brand’s enduring qualities

Brand position trap

• Part of brand identity and value proposition that is to be communicated and demonstrates an advantage over competitive brands

• The trap occurs when the search for a brand identity becomes a search for a brand position

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The external perspective trap

• The company fails to realize the role that brand identity plays in helping the organization understanding its basic value and purpose

Eg: it is hard to expect the employees to make a vision happen if they do not understand and buy into the same vision of the company

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Product-attribute fixation trap

• Trap- the strategic and tactic management of the brand is focusing only on the product attributes Wrong

• attributes are not the only relevant basis for customer decision and competitive dynamics

A brand is more than a product

• Product attributes as the basis for brand identity have important limitations: Fail to differentiate

Easy to copy

Assume a rational consumer

Reduce the strategic flexibility

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Avoiding the traps

• To help ensure that the brand has texture and depth (and are not caught in the identity traps), the firm should consider its brand as:

– a product– an organisation– a person– a symbol

ALL BRANDS ARE A PRODUCT BUT NOT ALL PRODUCTS ARE A BRAND!

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The brand as a product- Product related associations

Product related associations will almost always be animportant part of brand identity

• Linked to brand choice decisions and use experience

The brand-as-product

• Product scope• Product attributes• Quality/value• Uses• Users• Country of origin

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The Brand as organisation

This perspective focuses on attributes of theorganisation rather than those of the product or service.

• Organisational attributes are more enduring and more resistant to competitive claims than product attributes.

Organisational attributes can contribute to a value proposition.

The brand-as-organisation• Organisational attributes• Local versus global

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The brand as person

• This perspective suggests a richer and more interesting brand identity than one based on product attributes.

• It can help create a self-expressive benefit.

• Brand personality can be the basis of a relationship between the customer and the brand

The brand-as-person• Brand personality• Brand-customer relationships

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The brand as symbol

A strong symbol can provide cohesion and structure toan identity and make it much easier to gain recognitionand recall.

A strong symbol can be the cornerstone of a brandstrategy. Sometimes it can also represent the essenceof the brand.

The brand-as-symbol• Visual

imagery/metaphors• Brand heritage

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The identity structure

Consists of core identity and extended identity

Core identity - The central, timeless essence of the brand

• Contains the associations that are most likely to remain constant as the brand travels to new markets and products.

• Mc Donald’s: value offering, quality, service, cleanliness, user• Nike: product trust, user, performance, enhancing lives

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The identity structure

Extended identity

• Includes brand identity elements, organised into cohesive and meaningful groupings that provide texture and completeness (the mental network, figure 3.9).

– E.g. brand personality is often part of the extended identity.

– Mc’ Donalds sub brands(Mc Cofee), logo , characters , convenience

– Nike personality, logo, sub brands, slogans(?) endorsers

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Working with multiple brand identities

• In some cases a brand identity is so persuasive and universal that it will work in all markets (Coca Cola)

– In most cases a brand identity will need to be adapted to different market or product contexts

• When multiple identities are needed, the goal is to have a common set of associations, some of which will be the core identity. Different elements can be emphasised in each market.

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Formulating a value propositionThere are 3 elements to consider in the statement:

• Functional benefits Product attributes

• Emotional benefits Gives the customer a positive feeling

• Self-expressive benefits Gives the customer a way to communicate his or her own self-image

The role of price is ALWAYS important.

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Providing a value proposition

The brand identity needs to provide a value proposition to the customer.

• Leading to a brand-customer relationship and drive purchase decisions.

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0% 20% 40% 60% 80% 100%

Cemicals

Pharma

IT

Financial

Services

Auto

Food

Luxury

Brand

Intangibles

Tangibles

Interbrand 2006

A Brand-customer relationship

A brand-customer relationship can be based on:

1. The value proposition

2. The brand identity

– many brand-customer relationships emerge when the brand is considered as

an organisation or person rather than a product.

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First impressions count

How long time.. To…

500 millisec. Conscious reaction will be remembered

110 - 100 m sprinters reaction to start pistol

50 - Notice visual signal and decide fight, flee or stay

• Brand image= how the brand is now percived• Brand identity=how strategists want the

brand to be perceived • Brand position=that part of the brand identity

and value proposition that needs to be actively communicated to the targeted audiences

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The brand has to be lived

… so the brand perception is not justgood products or clever marketing:

It’s everything we say, everything we do!

Why is it hard to build strong brands?

Pressure to compete on price

Proliferation of competitors

Fragmenting markets and media

Complex brand strategies and relationships

Bias towards changing strategies

Bias against innovation

Pressure to invest elsewhere

Short-term pressures

Complexity

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Creating awareness

• Establishing recall and recognition is vital

• The challenge is to break through the clutter and create awareness (recall and recognition)

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Creating perceptions of quality

• A claim of quality must always be based on substance and knowledge

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↔

Creating quality is not enough – the company must create perceptions of quality

Companies must work to maintain/deliver quality Present perception based on previous experience (good and bad)

Brand loyalty

• Brand value is largely created by customer loyalty

• A brand without loyalty is vulnerable

• Loyalty has great impact on marketing costs

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Enhancing loyalty• Develop or strengthen customers’ relations with the brand

• Segmentation– Non-customers, price switchers, passively loyal, fence sitters and committed– Ladder

• Brand awareness, perceived quality and clear brand identity can help enhance loyalty, but also loyalty programmes (increasingly popular)

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Today, brands are abundant and we live in an over-communicated noisy world

Brand identity TRAPS

2. The brand position trap

– A brand position is the part of the brand identity and value proposition that is to be actively communicated to the target audiences and that demonstrates an advantage over competing brands.

– The brand position trap occurs when the search for a brand identity becomes a search for a brand position.• Broad < Narrow = less activity guidance

3. The external perspective trap

– The firms fail to realize the role that a brand identity can play in helping an organisation understand its basic values and purpose.

– Identity < Why customer buy the product40

4. The product-attribute fixation trap• The most common trap.• The trap occurs when the strategic and tactical management of the brand

is focused solely on product attributes• A brand is more than a product. The failure to distinguish between a

product and a brand creates the product-attribute fixation trap.

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Dove Real Beauty Sketches

• http://www.youtube.com/watch?v=litXW91UauE women

• http://www.youtube.com/watch?v=ChY9DoEtE-4 men

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