CHAPTER # 1 Brands and Brand Management

BRAND is a “name, term, sign, symbol, or design, or a combination of them, intended to

identify the goods and services of one seller or group of sellers and to differentiate them from
those of competition.”
A brand is something that resides in the minds of consumers.
consider the variety of brand name strategies.
1. Some companies, like General Electric and Samsung, use their names for essentially all their
products.
2. Other manufacturers assign new products individual brand names that are unrelated to the
company name, like Procter & Gamble’s Tide, Pampers, and Pantene product brands.
3. Retailers create their own brands based on their store name or some other means.
Brand names themselves come in many different forms.
1. There are brand names based on people’s names,
2. Names based on places like British Airways
3. names based on animals or birds like Dove soap
4. Some brand names use words with inherent product meaning, like Lean Cuisine, Ocean
Spray 100% Juice Blends, or suggesting important attributes or benefits, like Mop & Glo
floor cleaner, and Beauty rest mattresses.
5. Other names are made up and include prefixes and suffixes that sound scientific, natural, or
prestigious, like Lexus automobiles, Pentium microprocessors.

PRODUCT is anything we can offer to a market for attention, acquisition, use, or consumption
that might satisfy a need or want. Thus, a product may be a physical good or service.

LEVELS OF A PRODUCT:
1. The core benefit level is the fundamental need or want that consumers satisfy by consuming
the product or service.
2. The generic product level is a basic version of the product containing only those attributes or
characteristics absolutely necessary for its functioning but with no distinguishing features.
3. The expected product level is a set of attributes or characteristics that buyers normally
expect and agree to when they purchase a product.
4. The augmented product level includes additional product attributes, benefits, or related
services that distinguish the product from competitors.
5. The potential product level includes all the augmentations and transformations that a
product might ultimately undergo in the future.
WHY DO BRANDS MATTER?
Role that brand plays at the Consumers side:
1. Identification of source of product
2. Assignment of responsibility to product maker
3. Risk reducer
4. Search cost reducer
5. Promise, bond, or pact with maker of product
6. Symbolic device
7. Signal of quality
Role that brand plays at the Manufacturers side:
1. Means of identification to simplify handling or tracing
2. Means of legally protecting unique features
3. Signal of quality level to satisfied customers
4. Means of endowing products with unique associations
5. Source of competitive advantage
6. Source of financial returns
Researchers have classified products and their associated attributes or benefits into three
major categories: search goods, experience goods, and credence goods.
• For search goods like grocery produce, consumers can evaluate product attributes like
sturdiness, size, color, style, design, weight, and ingredient composition by visual inspection.
• For experience goods like automobile tires, consumers cannot assess product attributes like
durability, service quality, safety, and ease of handling or use so easily by inspection, and actual
product trial and experience is necessary.
• For credence goods like insurance coverage, consumers may rarely learn product attributes.
Credence goods are goods whose qualities cannot be ascertained by consumers even after
purchase.

TYPES OF RISKS AT THE CONSUMER SIDE:

Consumers may perceive many different types of risks in buying and consuming a product
1. Functional risk: The product does not perform up to expectations.
2. Physical risk: The product poses a threat to the physical well-being or health of the user or
others.
3. Financial risk: The product is not worth the price paid.
4. Social risk: The product results in embarrassment from others.
5. Psychological risk: The product affects the mental well-being of the user.
6. Time risk: The failure of the product results in an opportunity cost of finding another
satisfactory product.

CAN ANYTHING BE BRANDED?

1. Physical Goods
 Physical goods are what are traditionally associated with brands and include many of the
best-known and highly regarded consumer products, like Mercedes-Benz, Nescafé, and
Sony.
 Let us consider the role of branding in industrial “business-to-business” products and
technologically intensive “high-tech” products.
a) Business-to-business products. The business-to-business (B2B) market makes up a huge
percentage of the global economy. Some of the world’s most accomplished and
respected brands belong to business marketers, such as ABB, Caterpillar, DuPont, FedEx,
GE, Hewlett-Packard, IBM, Intel, Microsoft, Oracle, SAP, and Siemens.
b) High-tech Products.
 Oppo. LG, Dawlence
2. Services
 Although strong service brands like American Express, British Airways, Ritz-Carlton, Merrill
Lynch, and Federal Express have existed for years, the pervasiveness of service branding
and its sophistication have accelerated in the past decade.
3. Retailers and Distributors
 Like Imtiaz, Chase and Bin Hashim have introduce ed certain products with their names.
4. Online Products and Services
 Some of the strongest brands in recent years have been born online. Google, Facebook, and
Twitter are three notable examples.
5. People and Organizations
 Edhi, Starbucks, google,
6. Sports, Arts, and Entertainment
 Harry potter, Jehangir Khan, Shahid Afridi etc.
Follow-up research by Golder and his colleagues of brand leaders in 126 categories over a span
from 1921 to 2005 found the following:
 Leading brands are more likely to persist during economic slowdowns and when inflation is
high, and less likely to persist during economic expansion and when inflation is low.
 Half the leading brands in the sample lost their leadership over periods ranging from 12 to
39 years.
 The rate of brand leadership persistence has been substantially lowering in recent eras
than in earlier eras.
 Once brand leadership is lost, it is rarely regained.
 Category types with above-average rates of brand leadership persistence are food and
household supplies; category types with below-average rates of brand leadership
persistence are durables and clothing.

BRANDING CHALLENGES AND OPPORTUNITIES

1. Savvy Customers
A category of media-literate consumers who are knowledgeable about marketing and targeting,
cynical about advertising, and who can see through traditional sales pitches.
2. vast number of sources of information
One of the key challenges in today’s marketing environment is the vast number of sources of
information consumers may consult.
3. Economic Downturns
A severe recession that commenced in 2008 threatened the fortunes of many brands. One
research study of consumers at the end of 2009 found the following sobering facts.
 18 percent of consumers reported that they had bought lower-priced brands of consumer-
packaged goods in the past two years.
 46 percent of the switchers to less expensive products said “they found better performance
than they expected,” with the vast majority saying performance was actually much better
than expected.
 34 percent of the switchers said “they no longer preferred higher-priced products.”
4. Brand Proliferation
Another important change in the branding environment is the proliferation of new brands and
products, in part spurred by the rise in line and brand extensions. As a result, a brand name
may now be identified with a number of different products with varying degrees of similarity.
Marketers of brands such as Coke, Nivea, Dove, and Virgin have added a host of new products
under their brand umbrellas in recent years.
5. Media Transformation
Another important change in the marketing environment is the erosion or fragmentation of
traditional advertising media and the emergence of interactive and nontraditional media,
promotion, and other communication alternatives.
Thus, the percentage of the communication budget devoted to advertising has shrunk over the
years. In its place, marketers are spending more on nontraditional forms of communication and
on new and emerging forms of communication such as interactive digital media; sports and
event sponsorship; in-store advertising; mini-billboards in transit vehicles, parking meters, and
other locations; and product placement in movies.
6. Increased Competition
 Globalization: Although firms have embraced globalization as a means to open new
markets and potential sources of revenue, it has also increased the number of competitors
in existing markets, threatening current sources of revenue.
 Low-priced competitors: Market penetration by generics, private labels, and low-priced
“clones” imitating product leaders has increased on a worldwide-basis. Retailers have
gained power and often dictate what happens within the store. Their chief marketing
weapons is price, and they have introduced and pushed their own brands and demanded
greater compensation from trade promotions to stock and display national brands.
 Brand extensions: We’ve noted that many companies have taken their existing brands and
launched products with the same name into new categories. Many of these brands provide
formidable opposition to market leaders.
 Deregulation: Certain industries like telecommunications, financial services, health care,
and transportation have become deregulated, leading to increased competition from
outside traditionally defined product-market boundaries.
7. Increased Costs
At the same time that competition is increasing, the cost of introducing a new product or
supporting an existing product has increased rapidly, making it difficult to match the investment
and level of support that brands were able to receive in previous years.
8. Greater Accountability
Finally, marketers often find themselves responsible for meeting ambitious short-term profit
targets because of financial market pressures and senior management imperatives. Stock
analysts value strong and consistent earnings reports as an indication of the long-term financial
health of a firm. As a result, marketing managers may find themselves in the dilemma of having
to make decisions with short-term benefits but long-term costs (such as cutting advertising
expenditures).

basic principles of branding and brand equity:

Branding is all about creating differences. Most marketing observers also agree with the
following basic principles of branding and brand equity:
 Differences in outcomes arise from the “added value” endowed to a product as a result of
past marketing activity for the brand.
 This value can be created for a brand in many different ways.
 Brand equity provides a common denominator for interpreting marketing strategies and
assessing the value of a brand.
 There are many different ways in which the value of a brand can be manifested or
exploited to benefit the firm (in terms of greater proceeds or lower costs or both).

STRATEGIC BRAND MANAGEMENT PROCESS

Strategic brand management involves the design and implementation of marketing programs
activities to build, measure, and manage brand equity
1. Identifying and developing brand plans
2. Designing and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity

1. Identifying and developing brand plans uses the following three interlocking models.
 The brand positioning model describes how to guide integrated marketing to maximize
competitive advantages.
 The brand resonance model describes how to create intense, activity loyalty relationships
with customers.
 The brand value chain is a means to trace the value creation process for brands, to better
understand the financial impact of brand marketing expenditures and investments.
2. Designing and implementing brand marketing programs
Choosing Brand Elements. The most common brand elements are brand names, URLs,
logos, symbols, characters, packaging, and slogans. The best test of the brand-building
contribution of a brand element is what consumers would think about the product or service if
they knew only its brand name or its associated logo or other element.
Integrating the Brand into Marketing Activities and the Supporting Marketing Program.
Although the judicious choice of brand elements can make some contribution to building brand
equity, the biggest contribution comes from marketing activities related to the brand.
Leveraging Secondary Associations. The third and final way to build brand equity is to leverage
secondary associations. Brand associations may themselves be linked to other entities that have
their own associations, creating these secondary associations. For example, the brand may be
linked to certain source factors, such as the company (through branding strategies), countries
or other geographical regions (through identification of product origin), and channels of
distribution (through channel strategy), as well as to other brands (through ingredients or co-
branding), characters (through licensing), spokespeople (through endorsements), sporting or
cultural events (through sponsorship), or some other third-party sources (through awards or
reviews).