Master

BRAND MANAGEMENT
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THE ORIGIN OF BRANDS
Brand- n. particular make of goods.

Identifying trademark, label, etc.
- The Oxford Dictionary
Derived from old english – means
BURNING STICK
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THE ORIGIN OF BRANDS
Livestock branding by Egyptians in 2700 BC to

identify stolen animals
IDENTIFY POSSESSION
10th century – used by illiterate merchants to
track and route goods
SUPPLY CHAIN MANAGEMENT
Used by craftsmen to identify good from
defectives
MARK OF QUALITY
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WHAT IS A BRAND ?
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WHAT IS A BRAND
 A brand is a name that influences

buyers
 No one ever got fired for buying IBM !
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WHAT IS A BRAND
 A brand is the symbolic embodiment of all the
information connected with a product or service
 A brand typically includes a name, logo, and other
visual elements such as images or symbols.
 It also encompasses the set of expectations
associated with a product or service which typically
arises in the minds of people. Such people include
employees of the brand owner, people involved with
distribution, sale or supply of the product or service,
and ultimately consumers.
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WHAT IS A BRAND
The set of expectations has two aspects
 The experiential aspect which consists of the sum
of all points of contact with the brand and is known

as the BRAND EXPERIENCE
 The psychological aspect, which is a symbolic
construct created within the minds of people and

consists of all the information and expectations
associated with a product or service and referred to
as the BRAND IMAGE
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WHAT IS A BRAND
 Marketers seek to develop or align the expectations comprising
the brand experience through branding, so that a brand carries
the promise that a product or service has a certain quality or
characteristic which make it special or unique.
 A brand image may be developed by attributing a personality to
or associating an image with a product or service, whereby the
personality or image is branded into the consciousness of
consumers. 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.
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WHY BRANDING ?
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WHY BRANDING ?
A Brand is a name that influences buyers
A Brand provides benefits that are

 Salient
 Differentiated
 Trusted
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WHY BRANDING ?
Brands reduce risk
 Functional Risk : will the brand perform to
expectations ?
 Physical Risk : does it pose a hazard
to health ?
 Financial Risk : is it worth the price ?
 Social Risk : will it result in embarrassment ?
 Time Risk : what is the opportunity cost of
failure ?
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WHY BRANDING ?
Brands create uneven playing ground for
competitors
Positive Brand experience leads to brand
preference and emotional attachment
thereby inducing long term relationships
with the product or service
Consumer Preference and Brand Loyalty
enable pricing flexibility and margins
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WHY BRANDING ?
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WHY BRANDING ?
BRANDS ARE THEREFORE

BUSINESS ASSETS
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The Brand System
Brand Concept
( value proposition )
Brand Name & Symbols Product or service
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Brand Dimensions
Functions Image
Essence
Differences Source
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ANATOMY OF BRANDS
 Identity the brand must idenify itself clearly
and unambiguously; name, legal protection
and design elements are important
 Shorthand summary the brand says it all
 Security reassurance and guarantee of
benefits
 Differentiation show uniqueness
 Added Value offer more than competition
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ANATOMY OF BRANDS
A good brand name should :
 be legally protectable
 be easy to pronounce
 be easy to remember
 be easy to recognize
 attract attention
 suggest product benefits or usage
 distinguish the product's positioning relative to the
competition.
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TYPES OF BRANDS
 Premium Brand : typically costs more than other products.
 Economy Brand : a brand targeted to a high price elastic market segment .
 Fighting Brand : a brand created specifically to counter a competitive threat.
 Corporate Brand :When a company's name is used as a product brand name
 Family Branding :When one brand name is used for several related products
 Individual Branding :When all a company's products are given different brand
names
 Private Brand : When large retailers buy products in bulk from manufacturers
and put their own brand name
 Co Branding : When two or more brands work together to market their products
 Brand Licensing : When a company sells the rights to use a brand name to
another company for use on a non-competing product or in
another geographical area
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BRANDS - TERMS
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BRAND RECOGNITION
 A brand which is widely known in the

marketplace acquires brand recognition
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BRAND FRANCHISE
 Where brand recognition builds up to a

point where a brand enjoys a mass of
positive sentiment in the marketplace, it
is said to have achieved brand
franchise
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BRAND MANAGEMENT
 The art of creating and maintaining a brand is
called brand management.
 Brand management is the application of
marketing techniques to a specific
product,product line or brand. It seeks to
increase the product's perceived value to the
customer and thereby increase brand
franchise and brand equity.
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STRATEGIC BRAND MANAGEMENT - definition
 Involves the design and implementation of

marketing programmes to BUILD, MEASURE
& MANAGE Brand Equity
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STRATEGIC BRAND MANAGEMENT - process
 Identifying and establishing brand positioning

and values
 Planning and implementing brand marketing
programmes
 Measuring and interpreting brand
performance
 Growing and sustaining brand equity
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STRATEGIC BRAND MANAGEMENT - process
STEPS KEY CONCEPTS

Identify & establish brand mental maps
competitive frame of reference
positioning & values points of parity
points of difference
core brand values & brand mantra
Plan & implement brand mixing & matching of brand elements

integrating brand marketing activities
marketing programmes leverage of secondary associations
Brand value chain

Measure & interpret brand Brand audits
performance Brand tracking
Brand equity management system
Grow & sustain brand equity Brand

Brand
– product matrix
portfolios & hierarchies
Brand expansion strategies
Brand reinforcement & revitalisation
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STRATEGIC BRAND MANAGEMENT
Identifying & Establishing Brand

Positioning & Values
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Identifying & Establishing Brand Positioning & Values
 Brand Positioning is the act of designing

the company’s offer and image so that
it occupies a distinct and valued place in
the target customer’s mind
- Kotler
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Identifying & Establishing Brand Positioning & Values
BRAND EQUITY
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BRAND EQUITY
 Brand equity measures the total value of the brand to the

brand owner, and reflects the extent of brand franchise and is
the value built up in a brand. It can be calculated by comparing
the expected future revenue from the branded product with the
expected future revenue from an equivalent non-branded
product.This calculation is at best an approximation.
 This value can comprise both tangible, functional attributes

(eg. TWICE the cleaning power or HALF the fat) and
intangible, emotional attributes (eg. The brand for people
with style and good taste).
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BRAND EQUITY
 The set of associations and behaviour on the part of a brand’s

customers, channel members and parent corporation that
permits the brand to earn greater volume or greater margins
than it could without the brand name
- Leuthesser, 1988
 A brand that does not make it possible to

create a profitable business has no value
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BRAND EQUITY
Brand equity can be POSITIVE or NEGATIVE
 Positive brand equity is created by a history of effective promotion and

consistently meeting or exceeding customer expectations.
Negative brand equity is usually the result of bad management.
 Positive brand equity can be a significant barrier to entry for prospective
competitors.
 The greater a company's brand equity, the greater the probability that the
company will use a family branding strategy rather than an individual branding
strategy. This is because family branding allows them to leverage off the equity
accumulated in the core brand. This makes New Product Development / new
product introductions less risky and less expensive.
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BRAND EQUITY
Brand equity arises from
 Differential effect differences in customer response to

the brand
 Brand Knowledge different customer response arises
out of brand knowledge built over time
 Consumer response to marketing
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Aaker’s model of Brand Equity
perceived quality
Name awareness brand assocns.
Brand loyalty brand assets

BRAND
EQUITY
COMPANY VALUE
CUSTOMER VALUE
information processing/interpretation efficiency & effectiveness of
mktg
confidence in buying brand loyalty
margins
use satisfaction brand extensions
trade leverage
competitive advantage
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BRAND EQUITY
from awareness to financial value
Brand Assets Brand Strength Brand Value
awareness Market share Net discounted cash
flows after capital ,
reputation leadership production and
running costs
personality penetration
values loyalty
imagery Growth rate
preference Price premium
Patents & rights
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SOURCES OF BRAND EQUITY
BRAND AWARENESS
 Brand Recognition – ability to confirm
prior exposure when given the brand as
a cue. Customer is able to discriminate
the brand from others
 Brand Recall – ability to generate the
brand from memory when given the
product category or usage situation as a
cue
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BRAND AWARENESS - CONSEQUENCES
 Learning Advantage - register the brand

in customer memory
 Consideration Advantage – include the
brand in the set being considered
 Choice Advantage - affects choice
amongst brands in the consideration set
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ESTABLISHING BRAND AWARENESS
 Repeated Exposure
 Increased consumer experiences
 Visual and verbal reinforcement of

brand name
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BRAND BUILDING
1. Ensure brand identification with customers and
brand association with specific product class or
customer need
2. Firmly establish brand meaning in customer’s mind
by linking tangible and intangible brand associations
with certain properties
3. Elicit proper customer response to brand
identification and brand meaning
4. Convert brand association to brand loyalty
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BRAND BUILDING
1. Who are you brand identity
2. What are you brand meaning
3. What do I think and feel about you brand

response
4. What kind of relationship would I like to

have with you brand relationship
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BRAND BUILDING
RESONANCE 4. Relationships
JUDGEMENTS FEELINGS 3. Response
PERFORMANCE IMAGERY 2. Meaning
SALIENCE 1. Identity
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BRAND BUILDING - IDENTITY
Achieving Identity involves creating Brand Salience
- the first step to building Brand Equity
Brand Salience arises out of DEPTH and BREADTH of

Brand Awareness
DEPTH – likelihood of brand coming to mind and the
ease with which it does so
BREADTH – the range of purchase and usage situations

when the brand comes to mind
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BRAND BUILDING - MEANING
Meaning devolves from Brand Performance & Brand
Imagery - the second step to building Brand Equity
 Brand Performance relates to how well the product

or service meets customer’s functional needs PLUS
DIFFERENTIATION. Deals with intrinsic
properties
 Brand Imagery concerns how the brand meets
psychological or social needs. Deals with extrinsic
properties
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BRAND BUILDING - RESPONSE
Judgements – customer’s personal opinions and evaluations of the
brand
Key judgements that influence brand building :
1. Brand Quality – specific considerations concerning the
attributes and benefits of the brand
2. Brand Credibility – perceived expertise, trustworthiness,
likeability
3. Brand Consideration – how relevant ? Will I consider it ?
4. Brand Superiority – unique/differentiated/ advantages
Feelings – emotional response and reaction
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BRAND BUILDING - RESONANCE
The ULTIMATE relationship characterised by
1. Behavioural Loyalty – rrepeat purchase/brand share

with customer
2. Attitudanal Attachment – something speacial in a
larger context, “love the brand”, favourite
possession, etc.
3. Sense of Community – kinship /assocn. With other
brand users
4. Active Engagement – spend time with the brand
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BRAND BUILDING
RESONANCE 4. Relationships
intense, active loyalty
JUDGEMENTS FEELINGS 3. Response

positive reactions
PERFORMANCE IMAGERY 2. Meaning

points of parity & difference
SALIENCE 1. Identity
deep, broad awareness
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STRONG BRANDS - ADVANTAGES
1. Greater Loyalty
2. Less Competitive Vulnerability
3. Larger margins
4. Higher Distribution Support
5. Accelerated Communication Effectiveness
6. Licensing Opportunities
7. Brand Extensions
INCREASED SHAREHOLDER VALUE
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BRAND POSITIONING
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BRAND POSITIONING
 The act of designing the company’s offer and image

so that it occupies a distinct and valued place in the
customer’s mind
- Kotler
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BRAND POSITIONING
 Who is the target consumer
 Who are the main competitors
 How is the brand similar to competitor’s
 How is the brand different from competitor’s
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BRAND POSITIONING
Market Segmentation
 Market : set of all actual and potential
buyers who have interest in, income for
and access to the product
 Market Segmentation : divide the target
market into distinct groups of
homogeneous consumers with similar
needs and consumer behaviour
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BRAND POSITIONING
Market Segmentation
 Descriptive or customer oriented :
related to what kind of person or
organization uses the product
 Behavioural or product oriented :
how the customer thinks or uses the
product
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BRAND POSITIONING
Market Segmentation
 Behavioural : user status, usage rate, usage
occasions, brand loyalty, benefits sought
 Demographic : age, sex, income, family size,
etc.
 Psychographic : values, attitudes,lifestyle,
opinions
 Geographic : national, international, regional,
etc.
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BRAND POSITIONING
Market Segmentation
 Overriding consideration for segmentation is profitability
 Some key criteria for deciding segments
Identifiability can it be easily determined ?
Size is there adequate potential ?
Accessibility can the segment be reached thru distribution &

communication ?
Responsiveness to tailored marketing programmes
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BRAND POSITIONING
Competition
 Factor in competition
who is meeting their need now ?
who is likely to meet their needs in future
how much resources do they have
what are their future business plans
 Likelihood of Brand Switching
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BRAND POSITIONING
Competition – Brand Switching
Users
Convertible on the threshold of change
Shallow not likely to switch but weighing options
Average comfortable now
Entrenched fiercely loyal
Non Users
Strongly unavailable attached to present brand
Weakly Unavailable prefer current brand
Ambivalent fence sitters
Available prefer other brand but have not yet switched
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BRAND POSITIONING
Points of Difference Associations
Points of Difference are STRONG, UNIQUE and

FAVOURABLE associations with a brand.
PODs can be attribute related or benefit related
PODs give sustainable competitve advantage in the long run
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BRAND POSITIONING
Points of Parity Associations
Points of Parity are FAVOURABLE associations that may be

shared with other brands
POPs can be classified under CATEGORY and COMPETITIVE
CATEGORY POPs necessary for the product or service category to

become a LEGITIMATE and CREDIBLE offering; may change
over time
COMPETITIVE POPs designed to negate competitor PODs
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BRAND POSITIONING
Positioning Guidelines
Key issues for optimal brand positioning
 Define & Communicate competitive frame of

reference
 Choose and establish POPs and PODs
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BRAND POSITIONING
Define & Communicate competitive frame of reference
Determine category membership – products or sets of products with which

the brand is likely to compete
Communicate the category membership so that the consumer is aware of

the goals that they might achieve by using the product or service.
- Sometimes new categories may be created.
- Brand can straddle two categories
Reinforce category membership by

repeating benefits
refer to ‘exemplars’ in that category
appropriate product descriptors
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BRAND POSITIONING
Criteria for PODs and POPs
• DESIRABILITY
Relevance
Distinctiveness
Believability
• DELIVERABILITY
Feasibility
Communicatability
Sustainability
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BRAND POSITIONING
Establishing PODs and POPs
POPs and POPs can clash with each other and cause
confusion.How does one trade off ?
• Separate the attributes

• Leverage equity of another entity
• Remove the confusion
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BRAND POSITIONING
Update Positioning over time
• Keep it relevant at all points in time
• Deepen meaning of the brand - LADDERING
• Respond to competitive moves - REACTING
- do nothing
- defensive moves
- offensive moves
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BRAND POSITIONING
Establish Core Brand Values
• Identify set of attributes and benefits that characterise the most

important dimensions of the brand
• Obtain customer brand asociations and categorise them
• Design a brand mantra
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BRAND POSITIONING
Elements of a Brand Mantra
• Brand Functions describes the nature of the product or service

or the type of experience or benefits provided
• Descriptive Modifier further clarifies the functions
• Emotional Modifier further qualifies the benefits on an abstract

plane
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BRAND POSITIONING
Considerations for a Brand Mantra
• Communicate defines the business category, sets brand

boundaries and clarifies what is unique
• Simplify short, crisp and vivid and summaries the whole brand
• Inspire taps into higher level meaning with consumers and

stokes brand values in the subconscious
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BRAND MARKETING PROGRAMMES
BRAND ELEMENTS
• BRAND ELEMENTS ARE THOSE TRADEMARKABLE DEVICES
THAT SERVE TO IDENTIFY & DIFFERENTIATE THE BRAND.
ALSO KNOWN AS BRAND IDENTITIES
• MAIN ELEMENTS ARE LOGOS, SYMBOLS, CHARACTERS,

SLOGANS, JINGLES, ETC.
• BRAND ELEMENTS ARE INDEPENDENT OF THE PRODUCT OR

SERVICE
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BRAND ELEMENTS – CRITERIA FOR CHOICE
• MEMORABLE easily recognized, easily recalled
• MEANINGFUL descriptive, persuasive
• LIKEABLE fun & interesting, rich visual & verbal

imagery, aesthetically pleasing
• TRANSFERABLE within & across product categories,

across geographical boundaries &
cultures
• ADAPTABLE flexible, updateable
• PROTECTABLE legally, competitively
Ultimate objective is to improve brand awareness and brand associations
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BRAND NAME – PROCEDURE
1. Define branding objectives
2. Generate as many names and concepts
3. Eliminate based on brand element criteria and create a

shortlist
4. Test the shortlist and make a final choice
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BRAND LOGOS & CHARACTERS
• Logos & Characters are symbols to reinforce brand meaning
• A valuable way to identify the brand
• Can be changed over time since it is only one element of the

brand
• Strengthens brand associations at the emotional level
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BRAND SLOGANS
• Slogans are short phrases that communicate descriptive and
persuasive information about the brand
• Effective shorthand means to build brand equity
• Summarise the intent of the marketing programme
• Reinforce brand positioning and PODs
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BRAND PACKAGING
• Identifies the brand
• Conveys descriptive and persuasive information
• Facilitates product transportation and protection
• Assists in-house and at-home storage
• Aids product consumption
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BRAND PACKAGING - GUIDELINES
• Know your consumer get inside his head
• Get the big picture look at other packaging in the category
• Aesthetics and function are both critical need to rise above

the clutter
• Know your distribution channels how do dealers view your

package
• Educate senior management get the resources
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BRAND ELEMENTS- SUMMARY
CRITERIA BRAND ELEMENT

Memorability Names
Meaningfulness Logos & Symbols
Likeability
Characters
Transferability
Adaptability
Slogans
Protectability Packaging
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CHANGES IN THE ENVIRONMENT
• Digitilisation & Connectivity internet, intranet, mobile devices
• Disintermediation & Reintermediation new channels &

middlemen
• Customisation & Customerisation tailored products, providing
ingredients to make own products
• Industry convergence blurring of industry boundaries
• New customer & company capabilities
The above lead to …………..
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Consumers Companies
Inc. in consumer power More info & reach on mkts.
Variety of available goods & Easier two way communication
services Customised offerings
More info about almost Direct reach
anything Better communication
Ease of interaction
Ability to compare & evaluate
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• Consumers are becoming more individualistic
• Brands becoming fragmented
• Movement away from mass brands
• High decibel levels intruding privacy and putting

consumers off
Leading to personalised marketing approaches ……..
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PERSONALISED MARKETING APPROACHES
• Experiential Marketing not just about product benefits but
also connecting it with unique & interesting experiences
• One to One Marketing consumers help to add value by
providing info to marketeers; in turn marketeers use the info
to add value by generating rewarding experiences to
consumers
• Permission Marketing seek permission before exposing
consumers to a marketing programme
Any which way, get consumers more actively

involved with the brand !
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PRODUCT STRATEGY
• The product is the core of brand equity since it is

the primary influence on the brand experience
• Designing & delivering a product that satisfies

customer needs is a prerequisite to successful
brand building
• To create brand loyalty, product must surpass

expectations
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PRODUCT STRATEGY
The product strategy is developed on two critical platforms
• Perceived Quality & Value how consumers form opinions

on the quality and value of the product
• Relationship Marketing how the strategy transcends the

actual product to create stronger bonds and maximise brand
resonance
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PRODUCT STRATEGY – PERCEIVED QUALITY & VALUE
Perceived Quality is defined as customers’

perception of the overall quality or
superiority of a product or service relative to
relevant alternatives and with respect to its
intended purpose
- Keller
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PRODUCT STRATEGY – PERCEIVED QUALITY & VALUE
Dimensions of Perceived Quality
• Performance with respect to the primary product characteristics

• Features secondary elements that complement primary
characteristics
• Conformance Quality degree to which product meets specs and is
defect free
• Reliability consistency of performance over time and over purchases
• Durability expected economic life of the product
• Serviceability ease of servicing the product
• Style appearance or feel of quality
• Brand Intangibles broader performance considerations
• Value Chain combination of cost perceptions & quality perceptions –
cost is larger than just money
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PRODUCT STRATEGY – RELATIONSHIP MARKETING
• Relationship Marketing is based on the premise that

current customers are the key to long term business
success
• Relationship Marketing involves three important

marketing issues
Mass Customisation
Aftermarketing
Loyalty Programs
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• Mass Customisation
between mass production and total customisation –

a compromise
supply side benefits – lower inventory
not all products can be mass customised
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• Aftermarketing
addresses both purchase AND consumption issues
enhances consumption experiences
blances marketing funds between CONQUEST &

RETENTION
85
• Aftermarketing activities include
maintaining a data base
identifying points of interaction with customers
analysing customer feedback
conducting customer satisfaction surveys
communication programmes
hosting special customer evens or programs
recovering lost customers
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• Loyalty Programmes reduce defection rate and increase

customer retention
• Building effective loyalty programmes entail
knowing your customer segment
updating programmes to provide variety and attract new

customers
listening to customer complaints and suggestions
making the programme easy to use and rewarding those who

join
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PRICING STRATEGY
• Price is one revenue generating element of the

marketing mix
• Price premiums are one of the most important

benefits of brand equity
• Pricing reinforces brand positioning
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PRICING STRATEGY – CONSUMER PRICE PERCEPTIONS
• Consumers interpret price based on prior purchase

experience, formal and informal communication,
point of purchase info, etc.
• Consumers evaluate prices against internal and

external frames of reference and arrive at a
perceived price
• Difference between perceived price and stated
price can cause pleasant or unpleasant emotions
HENCE THE VALUE PRICING APPROACH
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PRICING STRATEGY – VALUE PRICING
• The objective of value pricing is to find the

right blend of product quality, product costs
and product pices that fully satisfies
consumer needs and wants and company
profit targets
90
PRICING STRATEGY – VALUE PRICING
• Key elements in Value Pricing
Product Design & Delivery making it better
Product Cost making it cheaper
Product Price how much premium will the

customer pay over the cost
91
PRICING STRATEGY – VALUE PRICING PROCESS
Assess what value the consumer places on the product or service
Look for variations in how consumers value the product
How sensitive is the consumer to price
Identify an optimal pricing structure
Factor in competitive response
Monitor prices at the transactional level
Assess consumer emotional response
Are returns worth the cost
92
CHANNEL STRATEGY
• Marketing channels are sets of

interdependent organizations involved in
making the product or service available to
the consumer
• Channel strategy involves the design and

management of marketing channels
93
PRICING STRATEGY
• Price is one revenue generating element of the

marketing mix
• Price premiums are one of the most important

benefits of brand equity
• Pricing reinforces brand positioning
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CHANNEL STRATEGY
• Channels can broadly be classified into Direct

and Indirect channels
• Direct channels involve selling through

personal contact with the consumer – B to C
• Indirect channels involve selling through

intermediaries – B to B
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CHANNEL STRATEGY
Direct Channels Indirect Channels

Product info needs are high Broad assortment essential
High customisation Availability critical
Quality assurance is critical After sales service important
Purchase lot size is important Logistics considerations
Logistics considerations
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CHANNEL STRATEGY- INDIRECT CHANNELS
Channel Support can enhance brand value
Marketing Research Physical Distribution
Communication Financing
Contact Customisation
Risk Taking Negotiations
Service Co-operative Advtg.
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CHANNEL STRATEGY- INDIRECT CHANNELS
• Retailers most important since they can

directly influence Brand Equity
• Retailers create their own brand equity and

interplay between store image and brand
image is often very strong
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CHANNEL STRATEGY- DIRECT CHANNELS
• Company Owned Stores
• Web Strategies
• Direct Marketing moves
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CHANNEL STRATEGY- DIRECT CHANNELS
• Company Owned Stores
• Web Strategies
• Direct Marketing moves
100
COMMUNICATION STRATEGY
• Marketing communications are the

tools to inform, persuade and remind
consumers – directly or indirectly
about the brands they sell
101
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COMMUNICATION STRATEGY
communication
Current Brand Desired Brand
Knowledge Knowledge
102
COMMUNICATION STRATEGY - PROCESS
• Sender who sends the message

• Encoding putting thought in symbolic form
• Message set of symbols that the sender transmits
• Media channels thru which the message moves
• Decoding how does the receiver assign meaning to the
symbols transmitted
• Receiver who receives the message
• Response the set of reactions that the receiver has after
being exposed to the message
• Feedback that part of the response which is communicated
back to the sender
• Noise unplanned distortion during the communication process
that results in the receiver receiving a different message
103
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COMMUNICATION STRATEGY JOHARI WINDOW
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COMMUNICATION STRATEGY- OBJEC TIVES
• Exposure the right people must see or hear it
• Attention people must notice it
• Comprehension people must understand it
• Acceptance people must respond favourably
• Intentions people must plan to act
• Behaviour people must actually act in the desired

manner
105
INTEGRATED MARKETING COMMUNICATIONS
Criteria for integrated mktg communications
• Coverage proportion of audience reached by the option PLUS overlap with

other options
• Contribution inherent ability of the option to create the desired response in

the absence of any other option
• Commonality extent to which different communication options share meaning
• Complementarity extent to which different communication options emphasize

different associations
• Versatility extent to which a communication option is effective across
segments
• Cost effectiveness assessed vis a vis returns
106
COMMUNICATION STRATEGY- OPTIONS
• Advertising tv, radio, print, direct response,

websites, outdoor, POP
• Promotion consumer promotions, trade promotions,
• Event Marketing & sponsorships
• Public Relations & Publicity
• Personal Selling
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COMMUNICATION STRATEGY- ADVERTISING
• Any paid form of non personal presentation

and promotion of ideas
• Advertising gives a reason to buy
• Effect of advertising is long term by nature
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ADVERTISING GUIDELINES - Television
 Message Strategy which defines  Creative Strategy ( how the ad

Positioning ( what the ad conveys ) conveys )
 Competitive frame of reference  Informational- problem & solution,

 Nature of competition demonstration, product comparison,
 Target market testimonials
 POPs- necessary & deliverable
 Transformational or image
potrayal– typical or aspirational
 PODs- desirable & deliverable usage situation or user of the
product, brand personality & values
 Motivational- humour, warmth, sex
appeal, special effects
 POPs- necessary & deliverable
 PODs- desirable & deliverable
COPY TEST THE AD IN VARIOUS SITUATIONS TO ESTABLISH EFFECTIVENESS

109
ADVERTISING GUIDELINES - Print
• Print ads should have CLARITY, CONSISTENCY &

BRANDING
• Is the message clear at a glance ?

• Is the benefit in the headline ?
• Does the illustration support the headline ?
• Does the first line of the copy support the headline
& illustration ?
• Is the ad easy to read & follow ?
• Is the product easily identified ?
• Is the brand or sponsor easily identified ?
110
ADVERTISING GUIDELINES - Outdoor
• Outdoor ads create awareness and reinforce recall

& brand equity
• Is the message clear at a glance ?

• Is the benefit in the headline ?
• Does the illustration support the headline ?
• Is the product easily identified ?
• Is the brand or sponsor easily identified ?
111
COMMUNICATION STRATEGY- PROMOTION
• Short term incentives to encourage trial or

usage of a product or service
• Promotion gives an incentive to buy
• Effect of promotion is short term
112
PROMOTION - GUIDELINES
• Type immediate vs delayed value, price cut vs

added value
• Product Scope models, sizes, multiple or selective,
more or less popular, in line or off line
• Market Scope national, regional, which segment
• Timing when, how long, in season or off season,
when to announce, frequency
• Discount Rate explicit or implicit, deep or shallow
• Terms explicit or implicit, deep or shallow
113
COMMUNICATION STRATEGY- EVENT MKTG &
SPONSORSHIPS
• Public sponsorship of events or activities related to

sports, art, entertainment or social causes
• Identify with a particular target mkt or lifestyle
• Increase awareness of the company or product name
• Create or reinforce consumer perceptions of key brand image
associations
• Enhance corporate image
• Create experiences & evoke feelings
• Express commitment to community or social causes
• Entertain key clients
• Permit merchandising or promotional activities
114
COMMUNICATION STRATEGY- PUBLIC RELATIONS &
PUBLICITY
• Publicity refers to non personal

communication, eg press releases, media
interviews, press conferences, feature
articles, etc.
• Public Relations refers to personal

communication on a mass scale, eg fund
raising, membership drives, etc
115
COMMUNICATION STRATEGY- BUZZ MARKETING
• Word of mouth publicity with little or no

formal communication inputs
• Works well when the message originates
from an independent source instead of the
company
• Messages are simple, says something new,
delivers promise
116
COMMUNICATION STRATEGY- PERSONAL SELLING
• Face to face interaction with one or more

prospective purchasers for the purpose of
marketing and sales
• Detailed CUSTOMISED messages can be
sent and feedback generated, tailored
solutions offered
• However, cost is high and coverage narrow
117
Mix & Match : different communication options that share

common meaning & content but also offer different
complementary advantages
Option B Option A
Option C
118
Designing & Implementing Programmes - Guidelines
• Be Analytical develop well thought out programmes based on data and

frameworks of consumer behaviour
• Be curious use all forms of research to constantly add value to
consumers
• Be single minded keep a sharp focus
• Be creative rise above the clutter
• Be observant how are customers, channels, competition responding
• Be patient take a long term view
• Be realistic don’t bite off more than you can chew
119
LEVERAGING SECONDARY BRAND KNOWLEDGE
TO BUILD BRAND EQUITY
• Brands may be linked to other entities with their

own knowledge structures in the consumer mind
• Thru these linkages consumers may infer that
some of these associations with these other entities
are also true for the brand and these get
transferred to the brand
• Depending on the nature and extent of these
associations, brand equity gets affected
This indirect approach to building brand equity is known

as leveraging secondary associations
120
Secondary associations can be used very effectively to
• Create strong, favourable, unique and positive

responses where none exist
• Reinforce existing associations in a new and

different way
121
Extent of leverage depends on

• Awareness & knowledge of the entity
• Meaningfulness of the knowledge of

the entity
• Transferability of the knowledge of the

entity to the brand
122
Secondary associations are normally created by linking

the brand to one or more of the following :
• Companies thru branding strategies SOURCE
• Countries thru product origin
• Channels
• Other brands thru Co-Branding
RELATED
• Characters thru licensing ENTITIES
• Spokespersons thru endorsements
• Events thru sponsorships
• Other third party sources thru reviews,
awards, etc.
123
Companies
Three main branding options exist with a

corporate brand
• Create a new brand
• Adopt or modify an existing brand
• Combine an existing and new brand
124
Country of Origin
• Leverage country or region brand equity

arising out of beliefs about quality of certain
types of products or the image that these
types of products communicate vis a vis
certain product categories
• Serves to create a strong POD because of

consumers’ identification and beliefs about
the country or region
125
Channels
• Stores have their own association in

consumers’ mind which can have a very
favourable association
• Channel and Brand associations must be in

synch
126
Other Brands – Co-Branding
• Co-Branding occurs when two or more

existing brands are combined into a joint
product or are marketed together in some
way
• An offshoot of Co-Branding is Ingredient

Branding
127
Advantages Disadvantages
 Borrow needed expertise  Loss of control
 Leverage equity you don’t  Risk of brand equity dilution
have  Negative feedback effects
 Reduce product introduction  Lack of brand focus & clarity
costs
 Organizational distraction
 Expand brand meaning into
related categories ( broaden
meaning, increase access
points )
 Generate addl revenue
128
For successful Co-Branding
• Both brands must have adequate awareness

• Each should have strong, favourable and
unique associations
• Positive consumer judgements and feelings
• Each should separately have some brand
equity
• Logical fit between the brands
129
For successful Co-Branding ask yourself
• What capabilities do you not have ?

• What are your resource constraints ?
• What growth or revenue goals do you have ?
• Is it a profitable venture ?
• How does it help to maintain or strengthen brand
equity ?
• What is the risk of diluting brand equity ?
• What other advantages does it offer ?
130
Co-Branding – Ingredient Branding
• Ingredient Branding involves creating brand equity

for materials, components or parts that are
necessarily contained within other branded
products
• Branded ingredients are often seen as a sign of
quality
• Uniformity & predictability of ingredient brands can
reduce risk and reassure customers
131
• Ingredient brands can therefore become industry

standards to consumers to an extent where the
product would not be bought without it
• Ingredient brands can become category points

of parity
• Consumers do not necessarily have to know how

the ingredient works – only that it adds value
132
Guidelines for successful ingredient branding
• Consumers must perceive that the ingredient enhances performance

& adds value. Intrinsic value should be easily visible & experienced
• Consumers must perceive that the ingredient is differentiated.

Ingredient should have some innovation or other substantial
advantage over other alternatives
• Distinctive, simple and versatile logo to credibly communicate quality

and confidence to consumers
• Coordinated push & pull program to ensure that consumers

understand the value of the ingredient
133
Licensing
• Licensing involves contractual arrangements

whereby names, logos, characters, etc of other
brands are used to market another brand for a
fixed fee
• Shortcut to building brand equity
• Lucrative for the licensor
• Danger the licensed brand is a fad with no long
term benefits – be clear about the objective
• Multiple licensing of the same brand can lea to
overexposure and dilution of benefits
134
Endorsements
 Similar to licensing but a celebrity is involved

 Celebrity should have a high awareness level
and a rich set of potentially useful
associations, judgements and feelings
 Expensive, hence the above benefits should
sustain over time
 Endorsement of brands or products which
trigger conflicting associations in consumer
mind can dilute the utility of this endorsement
135
Events & Third Party Sources
• Sponsored events can contribute to brand equity

by adding new associations and improving the
strength, favourability and uniqueness of existing
associations
• Third Party source may be seen as credible sources

with no link to the brand
136
BRAND STRATEGIES
THE BRAND PRODUCT MATRIX
• Graphical representation of all the brands and

products/categories sold by the firm
• Rows represent brand-product relationships and
indicate the brand extension strategy in terms of
number and nature of products/categories.
• Columns represent product-brand relationships and
capture the brand portfolio strategy in terms of the
number and nature of brands to be marketed in
each category
137
BRAND STRATEGIES
• A brand line consists of all products/categories

( incl. Extensions ) sold under a brand. Each row is
therefore a brand line
• The brand portfolio is the set of all brands and
brand lines that are offered for sale in a particular
category. Each column therefore is a brand
portfolio
138
BRAND STRATEGIES
• A product line is a set of products within a category that are

closely related because they are closely related, function
similarly and address same customer groups, marketed
through same outlets or fall in a given price range. A product
line may comprise of different brands, a single family brand
or a single brand that has been line extended
• A product mix is the set of all product lines and/or items on

offer. Product Lines represent different sets of columns in the
matrix that in total make up the product mix
• A brand mix is the set of all brand lines on offer
139
BRAND STRATEGIES
BRANDING STRATEGY
• The branding strategy reflects the number and

nature of distinctive brand elements applied to
different products
• Which brand names, logos, symbols should be

used and on what products ?
• Should there be new elements ?
• Should there be new products ?
140
BRAND STRATEGIES
BRANDING STRATEGY
• Branding strategies can be classified in terms of

BREADTH and DEPTH
• Breadth of the strategy relates to brand-product

relationships and brand extension strategy
• Depth is characterised by product-brand

relationships and the brand portfolio or mix
141
BRAND STRATEGIES
BREADTH OF A BRANDING STRATEGY
Breadth of a branding strategy has two aspects
• Breadth of the product mix in terms of how many

different product lines should be carried
• Depth of the product mix in terms of how many

variants should be there in each product line
142
BRAND STRATEGY - BREADTH
BREADTH OF THE PRODUCT MIX - FACTORS
MARKET CATEGORY ENVIRONMENT
size new entrant threat technological

growth buyer bargaining power political
Stage in product life cycle category rivalry economic
Sales cyclicity substitute pressure regulatory

seasonality Category capacity social
profits
143
BRAND STRATEGY - BREADTH
DEPTH OF THE PRODUCT MIX - FACTORS
• Depth of the product mix concerns decisions on optimal

product line strategies and product line analysis
• Which products should be attached to which brands – the

issue of brand extension
• Which brands should be attached to which product category –

the issue of brand portfolio
144
BRAND STRATEGY – DEPTH
THE BRAND PORTFOLIO
• Depth concerns the number and nature of different brands in
a product class with the main objective of pursuing multiple
market segments – the brand portfolio
• A brand portfolio is too big if profits can be increased by

dropping brands. Conversely, a brand portfolio is too small if
profits can be increased by adding brands
• The basic principle in designing a brand portfolio is to

maximise market coverage so that no potential customers are
ignored BUT to minimise brand overlap so that brands do not
compete with each other. EACH BRAND SHOULD HAVE A
DISTINCT TARGET MARKET AND POSITIONING
145
THE BRAND PORTFOLIO- ROLES
• Attract a segment uncovered by other brands
• Flanker brand to protect flagship brands
• Cash cow to be milked for profits
• Low end entry level product to attract new customers

• High end prestige product to add prestige & credibility
• Increase shelf presence & retailer dependence

• Arrest brand switching by offering variety
• Increase internal competition
• Economies of scale in advertising, merchandising,

distribution, etc
146
THE BRAND PORTFOLIO- SUMMARY
• Brands can play multifarious roles within the portfolio based
on issues related to consumers, competition and the firm
• Brands can expand coverage, provide protection, enhance
and extend image, etc.
• Basic criteria for brand portfolio decisions :
> well defined role as to what the brand is supposed to do
> well defined positioning as to what benefits or promises
it offers
> what associations the brand is to own or represent
147
BRAND STRATEGY
BRAND HIERARCHY
• Brand names may not be restricted to one name
but could consist of a combination of multiple
brand name elements
• Some of these elements could be shared by

multiple products or a range of products
• A brand hierarchy is a means of summarising the

branding strategy by displaying the number and
nature of common and distinctive brand elements
across the firm’s products. It graphically
summarises the firm’s branding strategy
148
BRAND HIERARCHY
• Corporate or company brand ( e.g. HP )
• Family Brand ( e.g. Compaq )
• Individual Brand ( e. g. Pressario )
• Modifier ( e.g. nx9010 )
149
BRAND HIERARCHY
• Corporate or company brand is the highest level and technically

involves only one brand. It may or may not be used on its product
lines. Or it may be used with modifiers only. Or it may appear on the
package as a legal requirement but has no marketing relevance
• Family Brand is defined as a brand which is used in more than one

product category but is not necessarily the name of the company. If
the corporate brand is used on a range of products, it also functions
as a family brand
• Individual Brand is defined as a brand that has been restricted to

essentially one product category though it may be used for different
product types
• Modifier designates a specific item or model type or version or

configuration
150
BRAND HIERARCHY
CORPORATE BRAND
• A corporate image is the set of associations that consumers

have in memory of the products and services of the firm as a
whole
• Corporate brand equity is defined as the differential response

by consumers to using/not using the corporate brand on its
products and services
• The corporate brand can evoke a set of associations

distinctively different from the family or individual brand
151
BRAND HIERARCHY
FAMILY BRAND
• Family brands are applied across a range of product

categories
• Distinctive family brands evoke a specific set of associations

across a group of related but different products
• Family brands make new product introduction easier.

However, on product failure can affect the image of the
family brand and therefore multiple products
152
BRAND HIERARCHY
INDIVIDUAL BRAND
• Restricted To one product category but can have multiple

product types based on models, packaging, flavours, etc
• Main advantage is that it can be customised to meet the

needs of a specific customer group
• Risk is minimised if brand fails – no spillover effect
• Disadvantage is the difficulty, complexity and expense of

creating and sustaining marketing programmes to develop
and sustain brand equity
153
BRAND HIERARCHY
DECISIONS
Number of levels Principle of simplicity

employ as few levels as possible
Levels of awareness and types Principle of relevance

create abstract associations that are
of associations to be created at relevant across as many associations as
each level possible
Principle of differentiation
differentiate individual items and brands
Link brands from different levels Principle of prominence

relative prominence of brand elements
for a product affects perception of product distance
and type of image for new products
Link a brand across products Principle of commonality

the more common elements shared by
products, the stronger the linkages
154
NEW PRODUCTS & BRAND EXTENSIONS
Current New
Products Products
Current Market Product

Markets Penetration Development
New Market Diversification

Markets Development
155
1. Develop a new brand for the new product
2. Apply in some way, an existing brand
3. Use a combination of new and existing brand
• A brand extension is when an established brand is used for a

new product ( 2 & 3 above )
• When a new brand is combined with an existing brand ( 3
above ) the brand extension can also be called a sub brand
• An existing brand that gives rise to a brand extension is
referred to as the parent brand
• If the parent brand is already associated with multiple
products through brand extensions, it may also be called a
family brand
156
Brand extensions can broadly be classsified as under
• Line Extension the parent brand is used to brand a

new product that targets a new market segment
within a product category currently served
by the parent brand
• Category Extension the parent brand is used to

enter a different product category from that
currently served by the parent brand
157
BRAND EXTENSIONS - ADVANTAGES
FACILITATE NEW PRODUCT ACCEPTANCE
• Improve brand image
• Reduce risk perceived by customers
• Increase probability of gaining distribution & trial
• Increase efficiency of promotional measures
• Reduce costs of introductory and follow up marketing programmes
• Avoid cost of developing new brand
• Packaging and labelling efficiencies
• Permit consumer variety seeking
FEEDBACK TO PARENT BRAND & COMPANY

• Clarify brand meaning
• Enhance parent brand image
• Bring new customers into brand franchise & increase market coverage
• Revitalise the brand
• Permit subsequent extensions
158
BRAND EXTENSIONS - DISADVANTAGES
• Can confuse or frustrate customers
• Can encounter retailer resistance
• Can fail and hurt parent brand image
• Can succeed but hurt parent brand image
• Can succeed but cannibalise sales of parent brand
• Can succeed but diminish identification with any
one category
• Can dilute brand meaning
• Can cause company to forego the chance to
develop a new brand
159
BRAND EXTENSIONS
BASIC ASSUMPTIONS
• Positive Associations about parent brand
exist in consumer memory
• The brand extension will evoke some of
these positive associations
• Negative associations of the parent brand
will not be transferred to the extension –
the Cadbury worm example
• The brand extension will not create any
negative associations
160
BRAND EXTENSIONS
THE PROCESS
• Define actual and desired consumer knowledge about the brand
• Identify possible extensions based on parent brand associations and
similarity/fit to parent brand
• Evaluate potential of extension to create brand equity –
salience of parent brand associations
favourability of inferred extension associations
uniqueness of inferred extension associations
• Evaluate feedback of proposed extension based on compelling,
relevant, strong and consistent evidence
• Consider competitive advantages as perceived by customers and
possible consumer reaction
• Design of marketing programmes
• Evaluate extension success and effects on parent brand equity
161
BRAND EXTENSIONS
PROVEN CONCLUSIONS
• Favourable parent brand associations coupled with good fit with
extension
• High quality brands stretch farther than average quality brands
• A brand that becomes protypical of a product category is difficult to
extend
• Concrete attribute associations are more difficult to extend than
abstract associations
• Positive associations about a parent brand can become negative in the
extension context
• Successful extensions contribute to parent brand equity and permit
further extensions
• An unsuccessful extension hurts the parent brand only if there is a good
fit
• Vertical extensions are difficult and require sub branding strategies
• Effective communication strategies for an extension emphasize
information about the extension rather than reminders about the parent
brand
162
BRAND ARCHITECTURE
MANAGING BRAND PRODUCT RELATIONSHIPS
A brand has two basic functions :
Distinguishing products from one another
Certifying a product’s origin
• In multi product situations how should the system of names and symbols be
organized so that the overall offer and structure is easily understood by
prospective buyers
• The system should be logical and follow rules that can be applied internally
• The system should help sales ans product promotions in the short term and
promote brand equity in the long term
• The system should have the flexibility to anticipate future and possible
evolutions in product lines and product range so that it can last over time
Brand Architecture involves positioning alternative branding

strategies of managing brand product relationships so that these
twin objectives are served
163
BRAND ARCHITECTURE
PRODUCT BRAND STRATEGY
• A particular brand name is assigned to one and only one product or
product line. Therefore the brand portfolio and product portfolio fully
correspond to each other.
• Products and brands can be sharply differentiated
• Freedom to move whenever and wherever depending on
opportunities
• Failure of one brand does not affect others
• Permits sharp focus on one market – offensive strategy to capture
the entire market
• In a new segment, it has first mover advantages and has the
potential to become the reference point for all future competing
brands
• Disadvantage is in terms of costs of launching and sustaining
multiple brands
164
BRAND ARCHITECTURE
LINE BRAND STRATEGY
• Involves exploitation of a successful concept by extending it but
staying very close to the initial product
• This extension involves only marginal cost increases linked to
distribution margins, packaging, etc. IT DOES NOT NEED
ADDITIONAL ADVERTISING
• It reinforces the brand image
• Facilitates distribution
• Reduces launch costs
• Disadvantage is in terms of the limits to such extension – only
closely related products can be included
165
BRAND ARCHITECTURE
RANGE BRAND STRATEGY
• Use a single brand name and promote through a single promise, a
range of products belonging to the same area of competence
• The line structures the offer by putting together products which are
heterogeneous but have the same basic function
• Avoids random spread of communication by focussing on a single
entity
• Cost of new launches is low since new products that are added are
consistent with the brand promise and perform the same basic
function
166
BRAND ARCHITECTURE
UMBRELLA BRAND STRATEGY
• Umbrella brands are brands that support several products in
different markets. While each may have different communication
strategies, each product is called by its generic name.
• Main advantage is the capitalisation on one single brand name and
economies of scale on an international level. It also permits
considerable savings when entering new markets
• An umbrella brand strategy allows the core brand to be nurtured by
association with products with which it was not previously associated
• Only companies that can continuously launch new superior products
can use the umbrella brand strategy. In each new market, the
product will have to succeed on its own merits despite the brand
name
167
BRAND ARCHITECTURE
SOURCE BRAND STRATEGY
• Source brands are same as umbrella brands except that each
product has its own brand name.
• The source brand is the driver of the purchase
• This is a two tier branding structure. The core brand provides a set
of associations which are modified and complemented by the second
tier brand values thereby giving a sense of difference and depth yet
a commonality across the second tier brands
• Limitations are in terms of the nature of second tier brands that can
be associated with the core brand; only names that are related with
the core brand’s field of activity can be associated with it and all
products should share the same spirit
168
BRAND ARCHITECTURE
ENDORSING BRAND STRATEGY
• The endorsing brand gives its approval to a wide diversity of brands
grouped under product, line or family brands
• The product or line or family brand is the driver of the purchase
• It is a cost effective way of giving substance to a company name
and allowing it to achieve a minimal brand status without all the
inputs required to build a corporate brand
169
BRAND ARCHITECTURE
CHOOSING THE RIGHT BRAND STRATEGY
• What is the corporate strategy ?
• What is the business model ?
• What is the accepted culture in the market ?
• What is the pace of innovation in the market ?
• What is the added value lever ?
• What is the level of resources available ?
170
BRAND ARCHITECTURE
CHOOSING THE RIGHT BRAND STRATEGY
* Corporate umbrella brand
Indicator of
origin
source effect * corporate source brand
reassurance * corporate Endorsing brand
* Umbrella brand
* Source brand
* Family brand
* Line brand
* Generic brand * Product brand
Product differentiation
personalisation
171
MANAGING BRANDS OVER TIME
• Reinforcing brands
• Revitalising brands
• Adjusting brand portfolios
172
Reinforcing Brands
• Brand equity is reinforced by constantly asking yourself
what products and how are they superior, what benefits does it
offer, what needs does it supply, what are the strong, unique and
favourable associations in the customer mind
• Maintain brand consistency through consistent, adequate and

focussed marketing support to protect the sources of brand equity
• Adequate research and technological development is a key

augmenter to marketing programmes – you can’t win battles with a
tin sword; or with a sword where a rifle is required
• Don’t always milk or leverage the brand; also fortify it. If leveraging
the brand, do so in a manner that also fortifies brand equity
173
Revitalising Brands
• Brands can lose their lustre over time due to a variety of factors.
Changes in customer tastes, competition, technological changes,
changes in culture and values can make the brand less relevant
• Lack of consistent, adequate and focussed support to protect the

sources of brand equity is also a reason for loss in vitality
• Revitalise a brand only if the values are salient
• Brands most likely to respond to successful revitalisation are those

where the desired values existed strongly but have been allowed to
become dormant. Bringing brands back is more like building from
scratch – take the values already existing, energise them and add
more values which are salient – it is the makeover of the brand
174
REINFORCING BRANDS
BRAND Consistent mktg

AWARENESS support
Products Innovation in
benefits design, mfg,
needs packaging
BRAND Continuity in brand

REINFORCEMENT meaning
STRATEGIES changes in tactics
Protect sources of
brand equity
Relevance to user
& user imagery
BRAND IMAGE
Strong Trade off
favourable fortify vs leverage
unique
175
CUSTOMER BASED BRAND EQUITY
MEASURING BRAND EQUITY
• A Brand Equity Measurement System is a

set of research procedures to provide
timely, accurate and actionable information
on brands to enable short and long term
moves
• The Brand Value Chain is a structured
approach to assessing the sources and
outcomes of brand equity
176
CUSTOMER BASED BRAND EQUITY
BRAND VALUE CHAIN
VALUE Mktg Customer Market Shareholder

Performance
STAGES Program
Investment
Mindset Value
Product Price premium Share Price

Awareness Price Elasticity
Communication P/E Multiple
Associations Market Share
Trade Mkt. Cap.
Attitudes Expansion Success
Employees
Attachment Cost & profitability
Others
Activity
Program Marketplace Investor

MULTIPLIERS Quality Conditions Sentiment
Market Dynamics
Clarity Competitive reaction Growth Potential
relevance
Channel support Risk Profile
distinctiveness
consistency Customer size/profile 177
Brand Contribution
FINANCIAL VALUATION OF BRANDS
• Historical Costs
• Replacement Costs
• Market Price
• Royalties
• Future Earnings
• Present Earnings
178
HISTORICAL COST METHOD
• What Period ?
• Which Costs ?
• Discounting Rate to be applied ?
• This method is useful where value is derived

from advtg and mktg CONTINUOUSLY. Stop
the communication and the brand dies.
179
REPLACEMENT COST METHOD
• What will it cost to create another bbrand
with the same equity ?
• Issues are cost, time period, relevance
• This method is useful where market entry is
not a hindrance and brands can be created
quickly; market segment is localised and
well defined
180
MARKET PRICE METHOD
• What is the value of similar brands in the
marketplace ? However there is no ‘stock
exchange’ for brands !
• Subjective decision depending on each
company’s synergies
181
ROYALTIES METHOD
• What annual royalties would be received on
licensing ?
• However while companies license brands to

reach markets, this fee does not include the
cost of know how and services that the
brand owner supplies
182
FUTURE EARNINGS METHOD
• Separate and isolate the net income from
the brand
• Estimate future cash flows
• Apply a proper discounting rate and period
• Issues are uncertainty of forecasts, salience

of the brand, period and discounting rate
183
PRESENT EARNINGS METHOD
• This ratio links the market value of the
brand to the net profits from the brand.
• The higher the multiple the stronger the

valuation
Refer handout for details
184

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BRAND MANAGEMENT

Brand- n. particular make of goods.

Livestock branding by Egyptians in 2700 BC to

 A brand is a name that influences

 No one ever got fired for buying IBM !

of all points of contact with the brand and is known

construct created within the minds of people and

A Brand provides benefits that are

 Social Risk : will it result in embarrassment ?

 Time Risk : what is the opportunity cost of

BRANDS ARE THEREFORE

Brand Name & Symbols Product or service

 suggest product benefits or usage

 distinguish the product's positioning relative to the

 A brand which is widely known in the

 Where brand recognition builds up to a

 Involves the design and implementation of

 Identifying and establishing brand positioning

STEPS KEY CONCEPTS

Plan & implement brand mixing & matching of brand elements

Brand value chain

Grow & sustain brand equity Brand

Identifying & Establishing Brand

 Brand Positioning is the act of designing

 Brand equity measures the total value of the brand to the

 This value can comprise both tangible, functional attributes

 The set of associations and behaviour on the part of a brand’s

 A brand that does not make it possible to

 Positive brand equity is created by a history of effective promotion and

 Differential effect differences in customer response to

Brand loyalty brand assets

imagery Growth rate

preference Price premium

Patents & rights

 Learning Advantage - register the brand

 Increased consumer experiences

 Visual and verbal reinforcement of

2. What are you brand meaning

3. What do I think and feel about you brand

4. What kind of relationship would I like to

JUDGEMENTS FEELINGS 3. Response

PERFORMANCE IMAGERY 2. Meaning

Brand Salience arises out of DEPTH and BREADTH of

BREADTH – the range of purchase and usage situations

 Brand Performance relates to how well the product

Feelings – emotional response and reaction

1. Behavioural Loyalty – rrepeat purchase/brand share

JUDGEMENTS FEELINGS 3. Response

PERFORMANCE IMAGERY 2. Meaning

INCREASED SHAREHOLDER VALUE

 The act of designing the company’s offer and image

 Who is the target consumer

 Who are the main competitors

 How is the brand similar to competitor’s

 How is the brand different from competitor’s

Identifiability can it be easily determined ?

Size is there adequate potential ?

Accessibility can the segment be reached thru distribution &

Responsiveness to tailored marketing programmes

 Likelihood of Brand Switching