Republic of the Philippines

Davao Oriental State College of Science and Technology

Business and Management Department

Marketing Management MGT31

*Building Strong Brands

BRAND EQUITY

Brand - 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 competitors.
*ROLE OF BRANDS
1. Identify the source or maker of a product and allow consumers to assign responsibility
for its performance to a particular manufacturer or distributor. Consumers identify
identical products differently depending on how they are branded.
2. Perform valuable functions for firms: first, they simplify product handling or tracing
thru inventory and accounting records; second, a brand name is protected thru
registered trademarks, manufacturing processes thru patents, and packaging thru
copyrights and proprietary design.
3. Signal a certain level of quality so that satisfied buyers can easily choose product
again. Although competitors may duplicate processes and designs but they cannot easily
match lasting impressions.
Branding is endowing products and services with the power of a brand. It's all about
creating differences between products. Marketers need to teach the consumers "who"
the product is - by giving it a name and other elements to identify it -as well as what the
product does and why consumers should care.

*5 PILLARS OF BRAND EQUITY

1. Differentiation measures the degree
ENERGIZED
to which a brand
is seen as different
from others.
BRAND
2. Energy measures the brand's sense of
STRENGTH
momentum.
how well
3. Relevance measures4.theEsteem
breadth measures
of a
the brand is regarded and
brand's appeal.
respected.
5. Knowledge measures how
familiar and intimate consumers
are with the brand.

BRAND
STATURE

Brand elements are those trademarkable devices that identify and differentiate the
brand. (ex: Nike has the distinctive "swoosh" logo, "Just Do It" slogan, and the "Nike"
name based on the winged goddess of victory. 2. Colorstay Lipstick is expected to last
long and SnackWell to be a healthy food)
*Brand Element Choice Criteria
1. Memorable - How easily is the brand element recalled and recognized?
2. Meaningful - Is the brand element credible and suggestive of the corresponding
category? (Eveready Batteries, Shine Wax floor wax)
3. Likable - How aesthetically appealing is the brand element? (Sunkist, Thunderbird
evoke much imagery)
4. Transferable - Can the brand element be used to introduce new products in the
same or different categories? (Amazon.com : originally an online book seller, but now
ships a wide variety of goods around the globe.)
5. Adaptable - How adaptable and updatable is the brand element? (logos)
6. Protectable - How legally protectable is the brand element? How competitively
protectable? (Names that become synonymous with product categories: Kleenex, Scotch
Tape, Xerox, Colgate, Maggi - should retain their trademark rights and not become
generic)

MEASURING BRAND EQUITY

*TWO APPROACHES IN MEASURING BRAND EQUITY
1. Indirect Approach assesses potential sources of brand equity by identifying and
tracking consumer brand knowledge structures. (Brand Audit)
2. Direct Approach assesses the actual impact of brand knowledge on consumer
response to different aspects of the marketing. (Brand Tracking)
Brand Audit - is s consumer-focused series of procedures to assess the health of the brand,
uncover its sources of brand equity, and suggest ways to improve and leverage its equity.
Brand-tracking Studies - collect quantitative data from consumers on a routine basis over
time to provide marketers with consistent, baseline information about how their brands and
marketing programs are performing on key dimensions. (Where, how much, and in what ways
brand value is being created to facilitate day-to-day decision making.)

Brand Valuation is the job of estimating the total financial value of the brand. Companies
which belong to the world's most valuable brands, brand value is typically over half of their total
market capitalization.
MANAGING BRAND EQUITY
Brand Reinforcement: (1) What products the brand represents, what core benefits it supplies,
and what needs it satisfies, as well as, (2) how the brand makes products superior, and which
strong, favorable, and unique brand associations should exist in the minds of consumers.
Brand Revitalization - (1) understand what the sources of brand equity to begin with (2) - back
to basics; reinvention.
DEVISING BRAND EQUITY
Branding strategy - reflects the number and nature of both common and distinctive brand
elements it applies to the products it sells. It has three main choices:
1. It can develop new brand elements for the new product.
2. It can apply some of its existing brand elements.
3. It can use a combination of new and existing brand elements.
Brand extension - refers on products where an established brand is used by firms to introduce
it.
Subbrand - a combination of a new brand and an existing brand elements
Parent brand - refers to the existing brand that gives birth to a brand extension or
subbrand.
2 Categories of Brand Extension
Line extension - the parent brand covers a new product within a product category it currently
serves such as with new flavors, colors, ingredients, and package sizes.
Category extension - the parent brand is used to enter a different product category from one it
currently serves.
Brand line consists of all products sold under a particular brand.
Brand mix - is the set of all brand lines that a particular seller makes available to buyers.
Branded variants - specific brand lines supplied to specific retailers or distribution channels.

*DELIVERING VALUE
Retailing includes all the activities involved in selling goods or services directly to final
consumers for personal, nonbusiness use.
Like products, retail-store types pass through stages of growth and decline. As
existing stores offer more services to remain competitive, costs and prices go up,
which opens the door to new retail forms that offer a mix of merchandise and
services at lower prices. The major types of retail stores are specialty stores,

department stores, supermarkets, convenience stores, discount stores,

off-price retailers (factory outlets, independent off-price retailers, and warehouse
clubs), superstores (combination stores and supermarkets), and catalog
showrooms.
Although most goods and services are sold through stores, nonstore retailing has been
growing. The major types of nonstore retailing are direct selling (one-to-one selling,
one-to-many party selling, and multilevel network marketing), direct marketing (which
includes e-commerce and Internet retailing), automatic vending, and buying
services.
While many retail stores are independently owned, an increasing number are falling
under some form of corporate retailing. Retail organizations achieve many economies
of scale, such as greater purchasing power, wider brand recognition, and better-trained
employees. The major types of corporate retailing are corporate chain stores,
voluntary chains, retailer cooperatives, consumer cooperatives, franchise
organizations, and merchandising conglomerates.
Like all marketers, retailers must prepare marketing plans that include decisions on
target markets, product assortment and procurement, services and store
atmosphere, price, promotion, and place. These decisions must take into account
major trends, such as the growth of private labels, new retail forms and
combinations, growth of intertype retail competition, competition between
store-based and non-store-based retailing, growth of giant retailers, decline of
middle-market retailers, growing investment in technology, and global
presence of major retailers.

Wholesaling includes all the activities involved in selling goods or services to those who
buy for resale or business use. Wholesalers can perform functions better and more costeffectively than the manufacturer can. These functions include selling and
promoting, buying and assortment building, bulk breaking, warehousing,
transportation, financing, risk bearing, dissemination of market information,
and provision of management services and consulting.
There are four types of wholesalers: merchant wholesalers; brokers and
agents; manufacturers' and retailers' sales branches, sales offices, and
purchasing offices; and miscellaneous wholesalers such as agricultural
assemblers and auction companies.
Like retailers, wholesalers must decide on target markets, product assortment and
services, price, promotion, and place. The most successful wholesalers are those who
adapt their services to meet suppliers' and target customers' needs.
Producers of physical products and services must decide on market logistics-the best
way to store and move goods and services to market destinations; to coordinate the

activities of suppliers, purchasing agents, manufacturers, marketers, channel members,

and customers. Major gains in logistical efficiency have come from advances in
information technology.

*COMMUNICATING VALUE
Modern marketing calls for more than developing a good product, pricing it
attractively, and making it accessible to target customers. Companies must also
communicate with present and potential stakeholders and with the general public.
The marketing communications mix major modes of communication:
advertising, sales pro consists of eight motion, public relations and
publicity, events and experiences, direct marketing, interactive
marketing, word-of-mouth marketing, and personal selling.
The communications process consists of nine elements: sender, receiver,
message, media, encoding, decoding, response, feedback, and noise. To get
their messages through, marketers must encode their messages in a way that takes into
account how the target audience usually decodes messages. They must also transmit
the message through efficient media that reach the target audience and develop
feedback channels to monitor response to the message.
Developing effective communications involves eight steps: (1) Identify the
target audience, (2) determine the communications objectives, (3) design
the communications, (4) select the communications channels, (5)
establish the total communications budget, (6) decide on the
communications mix, (7) measure the communications results, and (8)
manage the integrated marketing communications process.
In identifying the target audience, the marketer needs to close any gap that exists
between current public perception and the image sought. Communications objectives
may involve category need, brand awareness, brand attitude, or brand purchase
intention. Formulating the communication requires solving three problems: what
to say (message strategy), how to say it (creative strategy), and who should
say it (message source). Communications channels maybe personal (advocate,
expert, and social channels) or nonpersonal (media, atmospheres, and events). The
objective and-task method of setting the promotion budget, which calls upon marketers
to develop their budgets by defining specific objectives, is the most desirable.
In deciding on the marketing communications mix, marketers must examine the distinct
advantages and costs of each communication tool and the company's market rank. They
must also consider the type of product market in which they are selling, how ready
consumers are to make a purchase, and the product's stage in the product life cycle.
Measuring the effectiveness of the marketing communications mix involves asking
members of the target audience whether they recognize or recall the communication,

how many times they saw it, what points they recall, how they felt about the
communication, and their previous and current attitudes toward the product and the
company.
Managing and coordinating the entire communications process calls for integrated
marketing communications (lMC): marketing communications planning that
recognizes the added value of a comprehensive plan that evaluates the
strategic roles of a variety of communications disciplines and combines these
disciplines to provide clarity, consistency, and maximum impact through the
seamless integration of discrete messages.

*CREATING LONGTERM GROWTH

Despite the many challenges in the international arena (shifting borders,
unstable
governments,
foreign-exchange
problems,
corruption,
and
technological pirating), companies selling in global industries need to internationalize
their operations. Companies cannot simply stay domestic and expect to maintain their
markets.
In deciding to go abroad, a company needs to define its international marketing
objectives and policies. The company must determine whether to market in a few
countries or many countries. It must decide which countries to consider. In general, the
candidate countries should be rated on three criteria: market attractiveness,
risk, and competitive advantage. Developing countries offer a unique set of
opportunities and risks.
Once a company decides on a particular country, it must determine the best mode of
entry: indirect exporting, direct exporting, licensing, joint ventures, and direct
investment. Each succeeding strategy involves more commitment, risk, control, and
profit potential.
In deciding on the marketing program, a company must decide how much to adapt
its marketing program. At the product level, firms can pursue a strategy of straight
extension, product adaptation, or product invention. At the communication level,
firms may choose communication adaptation or dual adaptation. At the price level,
firms may encounter price escalation, dumping, gray markets, and discounted
counterfeit products. At the distribution level, firms need to take a whole-channel
view of the challenge of distributing products to the final users. In creating all
elements of the marketing program, firms must be aware of the cultural, social,
political, technological, environmental, and legal limitations they face in other
countries.
Country-of-origin perceptions can affect consumers and businesses alike. Managing
those perceptions in the most advantageous way possible is an important marketing
priority.

Depending on the level of international involvement, companies manage their

international marketing activity in three ways: through export departments,
international divisions, or a global organization.

Finalexaminationcoverage
FatimaQBagay
MarketingManagement