About brands

Everyone is familiar with brands, if nothing else just from looking at adverts and everyday
shopping.
From a marketing perspective the brand is more complex than it might at first seem. The brand
works at a different levels conveying information about what is on offer, who the product is
meant for and what the product says about the buyer.

" I have been very impressed by the overall management of the project from the brief, through the
fieldwork, the analysis conducted to the presentation of results. The communication between yourselves and
us has also been clear and prompt.

The presentation gave the audience a clear understanding of a complicated study. Our Circulation &
Marketing Director, was also impressed."
Research Manager Northcliffe Newspapers 2005

Brands encapsulate a whole range of communication, learning, history, feeling about a product
or company within a simple name and logo. But although the name may be simple, the ideas
underpinning brands and the different ways in which brands are used are both complex and
multi-faceted.

The brand pyramid

The concept of a brand can be thought of as a pyramid consisting of different layers of meaning
and involvement.

At its lowest level a brand is simply an identifying mark to distinguish the product from
alternatives. Normally, at this simple level, there is an implicit statement of specification. A4
paper consists of paper of a certain size. Low fat yoghurt consists of yoghurt with a maximum
level of fat content.
At the next level, the brand becomes more than a mark of specification, it becomes a mark
of assurance. Food marked Nestlé will achieve a minimum standard of quality. Cars made by
Ford will have a certain level of reliability.
Moving in up another step, the brand starts to represent moments of choice. Drink Coke when
you are thirsty. Eat Mars when you need energy. If the brand becomes associated with a choice
(in the consideration set), then it is more likely to be purchased. But successful brands can
position themselves to become the only choice. Achooo - pass me a Kleenex.
At the next step, the brand provides a mark of association, a badge of a club that the
individual wants to be associated with. Here the purchaser is starting to make some form of
emotional connection with the brand and to use the brand to establish a self-image to other
people. I am in the Apple user club. I wear Nike. I read the Financial Times.
If you then increase this association with the brand to a point ofemotional involvement, then
the brand starts to represent who the individual wants to be. "The brand is me. This is my
brand". One person may say I drink Gordon's Gin, wear Burberry. I am that type of person.
Another, I shop in Bodyshop, buy organic food. I am that type of person.

Brands as relationships

We can also view the brand as a relationship. Ultimately the brand reflects a relationship
between the buyer and the product bought (and so indirectly with the supplier). This relationship
like all others is based on trust, the fulfilment of promises and common values. This brand will
deliver these features and these emotional benefits to you.

Over time the brand relationship changes as needs change. Buyers can become promiscuous,
change interests, become bored with their habits. Brands on the other hand can stagnate and
wither, or become focused on new customers, or change in their essence.

The brand relationship is fragile. A single event, such as contamination (eg Perrier) or a
misplaced word (eg Ratners) can irreparably damage this trust. However, brands can also suffer
chronic damage over time - constant failure to deliver on promises, failure to be reliable, failure
to deliver on specification diminish and destroy brand value. As an example, the under-
performance of Virgin Trains threatens the entire perceptions of the Virgin brand.

There are cases where companies have focused purely on the brand's imagery and completely
overlooked the implicit specification and assurance aspects of a brand which rely on basic quality
and meeting the implicit service promises (Boo.com is an example). This means that companies
should also see the way they deal with distribution channels as part of brand management to
ensure that the brand is not compromised on its journey to the customer.
Not surprisingly, brand-focused companies spend a great deal of effort nurturing and developing
their brands to maintain their status, value and relevance to the relevant target audience over
the long term. In these days of constant innovation and constant newness searching for a better
product, it's worth recognising that the strongest brands have been selling the same
product for more than one hundred years (Coke, Kelloggs Corn Flakes, Guinness, Wrigleys, ...)
through marketing, rather than product innovation.

rands were not complex enough to decode, understand and manage, using and manipulating
several brands at once is tougher still.

Brand families

Brands are often not used in isolation. Companies use parent brands, daughter brands, sub-
brands and all manner of tricks to imbue a product and a range of products with particular
associations and meanings, leveraging investment in old brands into newer products.

Different ways of using brand families are used by different companies. Japanese electronic
companies tend to favour strong corporate brands (Panasonic). Leading consumer goods
companies (eg Procter and Gamble) tend to favour strong product-level brands. Others (eg
Nestle) take a combination approach.

There are no hard and fast rules, but for companies with products that innovate rapidly, family
brand names are popular (eg Walkman, ThinkPad). Where products are more stable and form
part of a portfolio of similar products segmenting and targeting different consumers, product
level brands are commonly used (eg Ariel, Bounce, Dreft and Tide from Procter and Gamble).
These may in turn be split into sub-brands (eg Ford Focus LX, Ghia, Zetec).

Where a brand is strong, it becomes possible to extend the brand into other categories and
product types - brand-stretch. For instance Fairy (P&G) was stretched from a washing up liquid
to become a washing powder brand too. Immense care is needed for brand stretching so as to
maintain existing brand values and to avoid diluting or harming the existing brand franchise.

On the one hand, consumers are continually having to decode this hierarchy of brands and what
might be thought of as short hand and simplicity, might in fact be a recipe for confusion and
bewilderment to customers. On the other hand, producers have to develop and maintain
positioning, communications and messages consistently for each of the brand elements on offer
which can add a significant cost and organisational overhead.
Because brands are more than just a name and a logo, getting to precisely what people
understand by a brand can be difficult, particularly once you are into the emotional content of
the brand on the Brand Pyramid.
One very common technique for assessing a brand is known as personification - imagining the
brand is a person and then trying to describe that person.

Brand content

Because brands are multi-faceted, there is a wide range of different strategies as to how a
brand, and brand family, can be used. A single brand may work at all levels of the Brand
Pyramid, or just focus on a lower level. At one extreme we have manufacturers like Panasonic,
which has very few sub-brands. The name Panasonic is used as a mark of assurance and
Panasonic does not go out of its way to develop a particular brand personality. At the other
extreme are fashion labels such as Dior which although it has to satisfy the more basic
requirements of specification and assurance, works predominantly at the emotional involvement
and association levels.

We can determine brand as encompassing at least two distinct areas.

Firstly there is the brand as a purveyor of functional benefit. Hewlett Packard is reliable. Kodak
delivers great pictures. We would claim that at some level, brands have to deliver some form of
functional value to the purchaser, and that to be successful the brand has to be competitive
functionally to survive in the long run.

Secondly, the brand has emotional benefit. Sony is sexy. Rolls Royce is luxurious. Haagen Daas
is adult. To capture this emotional benefit in words, the brand can be described as having a
personality. So Bacardi is young, female, looking for a good time whereas Chivas Regal is
upmarket, older, traditional and more refined.

To convey emotional content, the right symbols and imagery is needed. Humans are very
sensitive to subconscious cues in what we see to interpret the world around us. For example if
we look at the following words,. ostensibly, each font is just another way of displaying letters
and words, but the way the word is displayed affects the way in which we interpret it.
It is possible to make a study of a market purely looking at the symbols and imagery that exists
in the market and interpreting the hidden meanings and cues that are being used - for instance
to make a product appear sexy. This type of analysis is called Semiotics.

Historically, American style advertising has tended to focus on functional benefits, often in a
competitive situation against alternative products, or the brand as a mark of assurance using
celebrity endorsement (this also adds to the emotional value of the brand). European advertising
on the other hand has tended to focus on the emotional content and building the brand
personality and values. This can be seen in extremis in the advertising of perfumes such as
Chanel where the product is almost invisible.

Brand personification

For many people a brand is such an ethereal concept it can be hard to pin down the defining
make-up of the brand. The most common technique for eliciting the composition of the brand is
personification. "If the brand were a person, what type of person would it be...?"

This is known as a projection. It is often far easier to talk about something we have words and
images for, such as people or cars, so by describing the brand as a person, it is easier to
articulate what the brand is about. Projection techniques are used frequently in qualitative brand
research to get at the essence of brand make-up.

Although personification is very effective at describing what the brand is, it is far more difficult to
say this is what the brand should be, or whether one particular brand personality will be more
successful than an alternative. It is possible to try and match personality with the target
audience (eg Budweiser), to make the personality one that buyers aspire to in some way (eg
Gucci), or to use a completely different personality (Werthers). Most common is a building a
matching or aspiring personality type for a brand.

An alternative to personification is to describe the brand as a story or a scene. "Give me a story

or scene that captures the essence of...?" This can be harder to do and similar types of
information will come out, but sometimes the imagery is more vivid and you can ask people if
they want to be part of the scene or story they are describing. This inclusion reflects how an
individual responds to the brand.
Connected with the ideas of brand personality and personification, a brand has and represents a
certain set of values. Orange, one of the most successful brands of the 1990s, was started with a
brand that was set up to encapsulate a set of values. By contrast its main competitor Vodafone
was set up as a brand that represented a certain set of functional benefits.

In a market where products are similar, branding can have a large effect on the price that
customers will pay. Brands therefore add value to a basic product or service by enabling the
product or service to command a higher price, or higher market share than an unbranded
equivalent. The term Brand equity is used to describe both the value of the brand and the
brand's component values. It's value may be a monetary value (which may be discounted to a
net present value), an increase in a rate of return or any number of softer market research
measures such as awarenss or consideration.
A common question is how much does the brand add and consequently, what is the value of the
brand? There are a number of methods for calculating brand value and so inferring brand equity.

Brand Price Trade-Offs (BPTO)

A Brand-Price-Trade-Off (see example below) is a market researchapproach and the simplest

method for assessing the relative value of the brand. In a research study several brands or
products in a category are shown at once and the customer chooses their preferred option. Then
prices are adjusted and the customer chooses again from the same list. The result is that a
ranking of preference can be inferred relating brand to price that individuals are willing to pay.
This allows models to be built across a market as a whole showing likely take up of different
brands at different prices, together with estimates of revenue and profitability. Strong brands
command premium prices or premium market share over the competition and these models can
isolate the brand equity as the extra revenue achievable in a market compared to competitors.
This BPTO or brand price trade off not just only identifies individual brand value, but also enables
a range of brands in a family to be positioned optimally in a category at appropriate price points
(eg high, mid and low brands each positioned to maximise market revenue or market share
across the brand family.
BPTO is of most use in consumer type markets where there is little to choose functionally
between the products - essentially the products are substitutes for one another. For services,
industrial and technical type products there can be feature distinctions between the brands and
more sophisticated techniques are needed (see below).
BPTO interactive example

Imagine you are choosing a bottle (2 litres) of soft drink from a shop. If the drinks were priced
as follows which would you choose?

Choose a product then click on 'Select'. The prices will change and then you can choose again

Top of Form
Brand Price Choose...

7 Up 1.20

Coca Cola 1.20

Fanta 1.20

Pepsi 1.20

Sprite 1.20

None of these

Bottom of Form
This example presents a relatively simple illustration of the way in which BPTO works. Its aim is
to assess the relative value of the brand (eg Coca Cola is worth a 5% premium over Pepsi). Care
is needed to choose the start point and the way in which the prices change. In some markets (eg
hair-care) branded goods can command a hefty premium over their non-branded equivalents.

Brand versus functional value

In markets with more complex products where differences in value can be accounted for both by
functional differences and the impact of the brand, getting at the value of the brand alone is
more complex than for simple products. The brand consists of a functional element and also an
emotional or associative element.

To identify the value of the functional parts of the product such as what premium does a bigger
engine, or better fuel economy command, unbranded research is carried out. Conjoint
analysis is the most powerful and effective tool for understanding how functions drive value.
The second part of the emotional or associative value is to look at brand in addition to these
functions. Knowing how different functional combinations are valued, by introducing brand you
can measure changes that the brand makes on selection compared to to the unbranded. By
careful calibration, it is possible to uncover the value of the brand over and above the functional
differences.

For product development and pricing purposes, this allows managers to determine whether
resources should be focused on strengthening the brand and perceived value, or on
strengthening the underlying product offer.

Of course what is also of interest is what it is about the brand that is driving this emotional or
associative link. Our techniques such as sensory-emotional studies and brand association studies
enable companies to understand how and what elements are driving this additional emotion
values.

Researched value versus accountant's value

Some companies measure brand equity completely differently, relying on financial measures of
brand performance. Because strong brands have extra value to customers, the brands
themselves are able to command a higher price in the market, not just to end users, but also
through the distribution channel in the form of reduced margins compared to other similar
products.

An alternative to making a research-based evaluation of brand equity is therefore to look at the

premium, or value-add from the brand financially in comparison to equivalent products. This can
be carried out either in terms of gross margin, or in wider measures such as EVA (economic
value added). Put simply, good brands should be more effective at bringing long term profits and
returns because of their ability to command higher prices or achieve greater market share for
the equivalent product. This will be reflected in a stronger balance sheet with a higher level of
profitability for a given cost of sales.

One point to note is that it is also important to have a complete understanding of the brand
values and perceptions before a company takes steps to try and increase Brand Equity. For
instance, for some brands part of their cachet is exclusivity. However, this exclusivity can be
jeopardised if steps are taken to broaden distribution and so attempt to maximise the return on
the brand. Therefore the brand needs to be understood not just in terms of it's value, but also
how this value is made up. It can be very dangerous to try to match a brand with a reputation
for reliability with innovative products as the innovations may fail and damage the brand's
perception as reliable for instance. This has particular relevance where a brand.

In a market where products are similar, branding can have a large effect on the price that
customers will pay. Brands therefore add value to a basic product or service by enabling the
product or service to command a higher price, or higher market share than an unbranded
equivalent. The term Brand equity is used to describe both the value of the brand and the
brand's component values. It's value may be a monetary value (which may be discounted to a
net present value), an increase in a rate of return or any number of softer market research
measures such as awarenss or consideration.
A common question is how much does the brand add and consequently, what is the value of the
brand? There are a number of methods for calculating brand value and so inferring brand equity.

Brand Price Trade-Offs (BPTO)

A Brand-Price-Trade-Off (see example below) is a market researchapproach and the simplest

method for assessing the relative value of the brand. In a research study several brands or
products in a category are shown at once and the customer chooses their preferred option. Then
prices are adjusted and the customer chooses again from the same list. The result is that a
ranking of preference can be inferred relating brand to price that individuals are willing to pay.
This allows models to be built across a market as a whole showing likely take up of different
brands at different prices, together with estimates of revenue and profitability. Strong brands
command premium prices or premium market share over the competition and these models can
isolate the brand equity as the extra revenue achievable in a market compared to competitors.
This BPTO or brand price trade off not just only identifies individual brand value, but also enables
a range of brands in a family to be positioned optimally in a category at appropriate price points
(eg high, mid and low brands each positioned to maximise market revenue or market share
across the brand family.
BPTO is of most use in consumer type markets where there is little to choose functionally
between the products - essentially the products are substitutes for one another. For services,
industrial and technical type products there can be feature distinctions between the brands and
more sophisticated techniques are needed (see below).

BPTO interactive example

Imagine you are choosing a bottle (2 litres) of soft drink from a shop. If the drinks were priced
as follows which would you choose?

Choose a product then click on 'Select'. The prices will change and then you can choose again

Top of Form
Brand Price Choose...

7 Up 1.20

Coca Cola 1.20

Fanta 1.20
 Pepsi 1.20

Sprite 1.20

None of these

Bottom of Form
This example presents a relatively simple illustration of the way in which BPTO works. Its aim is
to assess the relative value of the brand (eg Coca Cola is worth a 5% premium over Pepsi). Care
is needed to choose the start point and the way in which the prices change. In some markets (eg
hair-care) branded goods can command a hefty premium over their non-branded equivalents.

Brand versus functional value

In markets with more complex products where differences in value can be accounted for both by
functional differences and the impact of the brand, getting at the value of the brand alone is
more complex than for simple products. The brand consists of a functional element and also an
emotional or associative element.

To identify the value of the functional parts of the product such as what premium does a bigger
engine, or better fuel economy command, unbranded research is carried out. Conjoint
analysis is the most powerful and effective tool for understanding how functions drive value.
The second part of the emotional or associative value is to look at brand in addition to these
functions. Knowing how different functional combinations are valued, by introducing brand you
can measure changes that the brand makes on selection compared to to the unbranded. By
careful calibration, it is possible to uncover the value of the brand over and above the functional
differences.

For product development and pricing purposes, this allows managers to determine whether
resources should be focused on strengthening the brand and perceived value, or on
strengthening the underlying product offer.

Of course what is also of interest is what it is about the brand that is driving this emotional or
associative link. Our techniques such as sensory-emotional studies and brand association studies
enable companies to understand how and what elements are driving this additional emotion
values.

Researched value versus accountant's value

Some companies measure brand equity completely differently, relying on financial measures of
brand performance. Because strong brands have extra value to customers, the brands
themselves are able to command a higher price in the market, not just to end users, but also
through the distribution channel in the form of reduced margins compared to other similar
products.

An alternative to making a research-based evaluation of brand equity is therefore to look at the

premium, or value-add from the brand financially in comparison to equivalent products. This can
be carried out either in terms of gross margin, or in wider measures such as EVA (economic
value added). Put simply, good brands should be more effective at bringing long term profits and
returns because of their ability to command higher prices or achieve greater market share for
the equivalent product. This will be reflected in a stronger balance sheet with a higher level of
profitability for a given cost of sales.

One point to note is that it is also important to have a complete understanding of the brand
values and perceptions before a company takes steps to try and increase Brand Equity. For
instance, for some brands part of their cachet is exclusivity. However, this exclusivity can be
jeopardised if steps are taken to broaden distribution and so attempt to maximise the return on
the brand. Therefore the brand needs to be understood not just in terms of it's value, but also
how this value is made up. It can be very dangerous to try to match a brand with a reputation
for reliability with innovative products as the innovations may fail and damage the brand's
perception as reliable for instance. This has particular relevance where a brand.