BRAND -

David Ogilvy defines brands as “the intangible sum of a product’s attributes: its name,
packaging, and price, its history, its reputation, and the way it’s advertised.”

Kotler defines brands as “A brand is a name, term, sign, symbol, or design or a

combination of them, intended to identify the goods and services of one seller or group
of sellers and to differentiate them from those of the competitor.”

There are different ways to look at the meaning of brand and branding in simple terms:

¾ A brand is a collection of perceptions in the mind of the consumer.

¾ Brand is everything what you want to communicate to consumers and what you
communicate. By definition, “brand” is whatever the consumer thinks of when he
or she hears your company’s name.
¾ A brand is a promise. By identifying and authenticating a product or service it
delivers a pledge of satisfaction and quality.
¾ It’s a bundle of functional and emotional benefits
¾ A name with a reputation
¾ A mark of pride
¾ A simplifier of choice
¾ A product or service with an attitude
Role of Brands

¾ A brand identifies the seller or maker.

¾ A brand protects both the consumer and the producer from competitors who
would attempt to provide products that appear to be identical.
¾ A brand reduces the primacy of price upon the purchase decision.
¾ It accentuates the bases of differentiation.
¾ A brand is essentially a sellers promise to consistently deliver a specific set of
features, benefits and services to the buyers.
¾ A brand gives the seller the opportunity to attract a loyal and profitable set of
customers. Brand loyalty gives sellers some protection from competition and
greater control in planning their marketing programs.
¾ Strong brands help build the corporate image, making it easier to launch and
gain acceptance by distributors and customers.
 ¾ Managing a positive brand image creates opportunities to introduce new
products that build on brand equity. It helps to attract and retain good employees
and it improves the stockholders’ perceived value of your company.

The Dimensions in Brand:

™ Building
™ Brand identity
™ Brand awareness
™ Familiarity and knowledge of the brand
™ Consideration to evaluate the brand
™ Purchase
™ Brand loyalty (or brand equity)

Strategic Brand Management:

• Strategic brand management involves the design and implementation of marketing

programs and activities to build, measure, and manage brand equity.

• The strategic brand management process is defined as involving four main steps:
1) Identifying and establishing brand positioning and values
2) Planning and implementing brand marketing programs
3) Measuring and interpreting brand performance
4) Growing and sustaining brand equity

Brand Building Process

•Differentiation – Way in which Co. is viewed as unique in the market, what makes you
different?
•Relevance – the level to which a brand is personally important to customers.
•Esteem – that characteristic of a product or service that measures how highly
customers regard it.
•Knowledge – customer's belief that there is an understanding of what the brand
stands for. This drives the purchase decision.
Brand Valuation Models:

Cost-based Approaches

Brand Equity Based on Accumulated Costs

The basis of this approach is that it aggregates all the historical marketing costs as the
value (Keller 1998).

The real difficulty here is determining the correct classification as to what constitutes a
marketing cost and what does not.

The only advantage of the approach is that the brand manager knows the actual
amount that has been spent.

An alternative approach that has been suggested is to adjust the actual cost of
launching the brand by inflation every year. This inflation adjusted launch cost would
be the brand’s value.
Market-based Approaches

Comparable Approach

This approach takes the premium (or some other measure) that has been paid for
similar brands and applies this to brands that the company owns, e.g., a company pays
two times sales for a similar brand.

This multiple is then applied to brands that the company owns (Reilly and Schweihs,
1999).

The advantage of this approach is that it is based on what third parties are actually
willing to pay and it is easy to calculate. The shortcomings are that there is a lack of
detailed information on the purchase price of brands and those two brands are seldom
alike.

The Residual Method

Keller (1998) has proposed that the residual value, when the market capitalization is
subtracted from the net asset value, is equal to the value of the “intangibles” one of
which is the brand.

Furthermore this is the upper limit that certain procedures will value a brand at (e.g.,
Interbrand).

There are two assumptions inherent in this approach.

The first is that the market is efficient in the strong state (ie that ALL information is
included into the share price) and

The second is that the assets are being used to their full potential.

Brand Equity Ten

Aaker’s “Brand Equity Ten” utilizes five categories of measures to assess brand equity
(Aaker, 1996a):
ƒ Loyalty Measures
1. Price premium
2. Customer satisfaction or loyalty
ƒ Perceived Quality or Leadership Measures
3. Perceived quality
4. Leadership or popularity
ƒ Other customer-oriented associations or differentiation measures
 5. Perceived value
6. Brand personality
7. Organizational associations
ƒ Awareness measures
8. Brand awareness
ƒ Market behavior measures
9. Market share
10. Market price and distribution coverage

These measures represent the customer loyalty dimension of brand equity.