CH 09 Brand Equity

8/8/2019 CH 09 Brand Equity

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MarketingManagement 1

Marketing Management

Chapter-09

Creating Brand Equity

Part : 04

Building Strong

Brands


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MARKETING MANAGEMENT12thedition

9Creating

Brand Equity

Kotler Keller


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Chapter Questions

What is a brand and how does branding work?

What is brand equity?

How is brand equity built, measured, and managed?

What are the important decisions in developing a brandingstrategy?


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Branding Brand :A name, term, sign, symbol, design or a combination

of them, intended to identify the goods or services of oneseller or group of sellers and to differentiate them from thoseof competitors.

The Role of Brands :Brands perform several functions.

a) They simplify product handling and tracing.b) They help to organize inventory and accounting records.c) A brand also offers the firm legal protection for unique

features or aspects of the product.d) Brands can signal a certain level of quality so that satisfied

buyers can easily choose the product again.


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Branding The Scope of Branding : Branding is endowing products and

services with the power of a brand. Branding can be appliedvirtually anywhere a consumer has a choice; like branding

physical good/service, a store, a place, an organization or anidea.


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Branding

Google - 2002 Brand of the Year
http://www.google.com/


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Brand Knowledge and Brand Promise

Brand Knowledge : Consists of all the thoughts, feelings,images, experiences, beliefs that become associated with thebrand.

Brand Promise : A brand promise is the marketers vision ofwhat the brand must be and do for consumers.


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Brand Elements Brand Elements : Trademarkable devices that serve to identify

and differentiate the brand. (A trademark is a brand that hasbeen adopted by a seller and given legal protection)

Most strong brands employ multiple brand elements.


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Brand Elements

ElementsSlogans

Brand

Names URLs

Logos

SymbolsCharacters


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Brand Elements

Choice Criteria Brand Element Choice Criteria : There are six criteria in

choosing brand elements.

a. Memorable

b. Meaningfulc. Likeability

d. Transferable

e. Adaptable

f. Protectible


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Brand Elements

Choice Criteria

Protectible

Adaptable

Transferable

Likeability

Meaningful

Memorable

BrandElementChoiceCriteria


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Brand Equity Brand Equity : It is the added value endowed to products and

services. It is an important intangible asset that haspsychological and financial value to the firm.

The power of a brand lies in the minds of the existing or

potential customers and what they have experienced directlyand indirectly about the brand.

Consumer-Based Brand Equity : The differential effect thatbrand knowledge has on consumer response to the marketingof that brand. A brand is said to have positive customer-based brand equity when customers react more favourably toa product when the brand is identified as compared to whenit is not. A brand is said to have negative customer-basedbrand equity if consumers react less favourably to a product.


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Measuring Brand Equity

Brand Valuation Brand Valuation : Brand Equity needs to be distinguished from

Brand Valuation, which is the job of estimating the totalfinancial value of the brand.


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Measuring Brand Equity

Brand Valuation The worlds 10 most valuable brands include the followings.

1) Coca Cola

2)

Microsoft3) IBM

4) GE

5) Intel

6) Disney

7) McDonalds

8) Nokia

9) Toyota

10) Marlboro


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Devising a Branding Strategy

Develop new brand

elements

Apply existing brand

elements

Use a combination ofold and new


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Devising a Branding Strategy Devising brand strategy involves deciding the nature of new

and existing brand elements to be applied to new and existingproducts.

The decision of how to brand new products in especiallycritical. When a firm introduces a new product, it has threemain choices :

a. It can develop new brand elements of the new product.

b.

It can apply some of its existing brand elements.c. It can use a combination of new and existing brand elements.


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Sub-Brand & Parent Brand

Sub-Brand (When a new brand is combined with an existingbrand, then brand extension can also be called Sub-Brand,e.g. in Toyota Corolla, Corolla is a Sub-Brand)

Parent Brand (An existing brand that gives birth to a brandextension is referred to as the Parent Brand, e.g. Toyota)

Example : Honda Civic (Honda is Parent Brand, Civic is Sub-Brand)


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Components of Branding Strategy Two key components of any branding strategy are

A. Brand Extensions

B. Brand Portfolios


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Components of Branding Strategy

A)Brand Extension Brand Extension : When a firm uses an established brand to

introduce a new product, it is called Brand Extension.

Brand Extension can be broadly classified into two general

categories

a. Line Extension

b. Category Extension


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Brand Extensions Classification

Brand ExtensionClassification

LineExtension

CategoryExtension


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Brand Extensions Classification Brand Extensions can be broadly classified into two general

categories,LineExtensionandCategoryExtension.

a. Line Extension

(When a parent brand is used to brand a new

product that targets a new market segment within a productcategory currently served by the parent brand, e.g. newfavours, forms, colours, package sizes : e.g. new colour orsize of Dettol Soaps)

b. Category Extension(When a parent brand is used to enter adifferent product category from that currently servedby theparent brand : e.g. Dettol Prickly Heat Powder)


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Brand Extensions- Disadvantagesa. Brand Dilution : It occurs when consumers no longer associate a

brand with a specific product or highly similar products and startthinking less of a brand.

b. If a firm launches extensions, customers may deem inappropriateas the different varieties of line extensions may confuse and evenfrustrate customers.

c. The worst possible scenario with an extension is that not onlydoes it fail, but it harms the parent brand image in the process.

d. Cannibalization : Even if the sales of a brand extension are highand meet targets, it is possible that this revenue may haveresulted from customers switching from existing product offeringsof the parent brand-this is called cannibalizing the parent brand.

e. By introducing a new product as a brand extension, the firm losesthe chance to create a new brand with its own unique image and

quality.


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Brand Line, Mix & Variants Brand Line : Brand Line consists of all products-original as

well as line and category extensions-sold under a particularbrand.

Brand Mix : Brand Mix or Brand Assortment is the set of allbrand lines that a particular seller makes available to buyers.

Branded Variants : Many companies are introducing BrandVariants, which are specific brand lines supplied to specific

retailers or distribution channels. They result from thepressure retailers put on manufacturers to distinctiveofferings.


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Branding Decision: To Brand or Not to Brand ? The first branding strategy decision is whether to develop a

brand name for a product.

Today, the branding is such a strong force that hardly

anything goes unbranded; so commodities/generics do nothave to remain commodities/generic products.

ACommodity or Generic Product is a product presumably sobasic that it cannot be physically differentiated as a brand inthe minds of consumers. These are unbranded, plainly

packaged, less expensive versions of common householdproducts.

Over the years, a number of products that at one time wereseen as essentially commodities have become strong brands,such as coffee, tea, flour, sugar, salt, pineapple etc.


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No Brand Branding No-Brand" Branding :Recently a number of companies have

successfully pursued "No-Brand" strategies.

Examples include the Japanese company Muji, which means"No label, quality goods" in English. Although there is a

distinct Muji brand, Muji products are not branded. This no-brand strategy means that little is spent on advertisement orclassical marketing and Muji's success is attributed to theword-of-mouth, a simple shopping experience and the anti-brand movement.

Other brands which are thought to follow a no-brand strategy

are American Apparel, which like Muji, does not brand itsproducts. Once a firm decides to brand its products orservices, it must then choose which brand names to use.
http://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/American_Apparelhttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/American_Apparelhttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/American_Apparelhttp://en.wikipedia.org/wiki/American_Apparelhttp://en.wikipedia.org/wiki/American_Apparelhttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Mujihttp://en.wikipedia.org/wiki/Japan


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National vs Private Label Brands

National Brand or Manufacturers Brand : It is the onedeveloped by the manufacturer of a product (e.g. Pepsi, Cokeetc.)

Private Label Brand : It is the one developed by the middle-men, like wholesaler or retailer etc. (e.g. Gourmet Milk,Gourmet Ice cream etc.)


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Branding Decision: To Brand or Not to Brand ? Once a firm decides to brand its products or services, it must

then choose which brand names to use. Four generalstrategies are often used.

a. Individual Names (To use different brand names for different

products, e.g. as done by Unilever, P&G etc.)b. Blanket Family Names (To use the same brand name for all

products, e.g. as done by Sufi)

c. Separate Family Names for all products (e.g. done by Sears,i.e. Kenmore for appliances, Craftsman for tools, and Homartfor major home installations) (If a company produces quite adifferent products, it is not desirable to use one blanketfamily name)

d. Corporate Name combined with individual product names(e.g. done by Honda, as Honda Accord, Honda Civic, HondaCity etc.)


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B)Brand Portfolios Brand Portfolio : Set of all brands and brand lines a particular

firm offers for sale to buyers in a particular category.

Any one brand is not viewed equally favourable by all the

different market segments that the firm would like to target,therefore Multiple Brands are often necessary to pursuemultiple market segments.


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Brand of the Year Awards

CEO of Warid receives Brand of the Year Award 2008

for the Best Cellular Company in Pakistan


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MarketingM t 31

Activity

Creating Brand Elements

Muji Stores : No Brand, BrandingStrategy

CH 09 Brand Equity

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