Product and Brand Management

Module 4
 Topics
• Understanding the role of branding: Concept
of Brand
• Types of Brand,
• Brand and Life Cycle,
• Brand Equity, Brand Loyalty, Brand Awareness,
• Brand Evaluation, Perceived Quality,
• Brand Associations, Brand Personality and
Brand Image, Role of Brand Ambassadors.
 Brand
• Derived from the Norse word ‘brandr’ which
means “to burn”.
• Used as a means of marking cattle in order to
identify them.
 Brand Defined…
• 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 competition.
American Marketing Association
 Why Branding…(Importance)
Consumers
• Identification of source product
• Assignment of responsibility to product maker
• Risk reducer (functional, physical, financial, social,
psychological, time)
• Search Cost Reducer
• Promise, bond, or pact with the maker of product.
• Symbolic Device
• Signal of Quality
Promise, Bond or Pact
Symbolic
Signal of Quality
 Why Branding…
Manufacturer
• Means of identification to simplify handling or
tracing.
• Means of legally protecting unique features.
• Signal of quality level to satisfied customers.
• Means of endowing products with unique
associations.
• Source of competitive advantage.
• Source of financial returns.
Legally Protecting Unique Features
Endowing Products with Unique Associations…
Source of Financial Returns
 What can be branded…
• Physical Goods.
• Services.
• Retailers and Distributors.
• Online Products and Services.
• People and Organizations.
• Sports, Arts and Entertainment.
• Geographic Locations.
• Ideas and Causes.
Physical Goods
Services
Retailers
Online Products
People and Organizations
Sports, Arts and Entertainment
Geographic Locations
Ideas and Causes
 Brand Symbol
• It is the visual element of the brand name.
• Play a critical role in building brand equity and
brand awareness.
• Includes text, abstract designs or both.
Example
Examples
Examples
 Benefits
• Makes the brand easily recognizable.
• Versatility (applied to a wide range of
products)
• Adaptable over time
Adaptable over time
 Types of Branding
• Family Brand Name
• Line Branding
• Range Branding
• Umbrella Branding
• Individual Brand Name
• Combination Brand Names
• Source/ Double Branding
• Endorsement Branding
 Types of Branding
Family Brand Names:
• Common Brand Name is used for all products
of the company.
• The goodwill attached to the family brand
name benefits all brands.
• Use of the name in advertisement of one
brand helps in the promotion of all the brands
carrying the family name.
 Types of Branding
• A company using family brand name has to
ensure that the family brand name is
associated with generic characteristics like
quality, reliability.
 Types of Branding
Line Branding:
• The company uses a common brand name for
a particular line of products.
• E.g: Gillette Series Shaving Gel, Foam,
Aftershave, Gillette Fusion, Gillette Mach 3,
Gillette Sensor Excel.
 Types of Branding
Range Branding:
• The company uses a common brand name for
a set of products.
• E.G: Wills cigarettes, Wills Lifestyle Clothing.
 Types of Branding
Umbrella Branding:
• Common Brand Name is used for all products
of the company.
• E.G: Tata, ITC
 Types of Branding
Individual Brand Names:
• The Company uses different brand names for
its products.
• Necessary when each brand requires a
separate unrelated identity.
• E.G: Vertu (Formerly owned by Nokia)
 Types of Branding
Combination Brand Names:
• A combination of family and individual brand
names capitalize on the reputation of the
company while allowing the individual brands
to be distinguished and identified.
• E.G: Microsoft Office, Microsoft Windows,
Microsoft Internet Explorer
 Types of Branding
Source/ Double Branding:
• Combines the name of the company with the
name of the product brand name.
• E.G: Sony Vaio
 Types of Branding
Endorsement Branding:
• This happens when a company name is used as
an endorser name, and the brand must establish
itself as an independent identity.
• E.G: Tanishq (Titan)
• The company’s endorsement is important is
important to carry forth certain positive
associations with these new brands during the
launch phase.
 Brand Valuation - Reasons
• The acquisition of the brand.
• The company’s accounting purposes.
• In order to obtain funds for expanding its operations.
• Assessing the extent of the loss to the value of the
brand.
• For the purpose of selling a brand of the company
because of an acquisition or merger.
• Selling a part of the assets associated with the brand.
• In order to ascertain managerial control.
 Brand Valuation - Methods
• Valuation by Historical Costs
• Valuation by Replacement Costs
• Valuation by Market Price
• Valuation by Royalties
• Valuation by Future Earnings
• Valuation by Present Earnings
 Brand Valuation - Methods
• Valuation by Historical Costs:
• Cost involved in developing and maintaing a
brand include:
• Innovation, marketing, distribution,
advertising and promotion costs.
• These costs can be obtained by scanning then
income statements for the previous years.
 Brand Valuation - Methods
Valuation by Replacement Costs:
• This is done by ascertaining how much it
would take to recreate a similar brand in the
present circumstances.
• Various Characteristics that need to be rebuilt
include:
• Market share, customer loyalty, brand image,
positioning etc.
 Brand Valuation - Methods
Valuation by Market Price:
• This is done by comparing the value of similar
brands in the market.
• While acquiring a brand such a valuation
method may not be feasible.
 Brand Valuation - Methods
Valuation by Royalties:
• The amount of royalties that would be
received by the company if it were to license
the brand can be used as a means of
calculating the financial valuation of the
brand.
• It is usually used in the luxury market.
 Brand Valuation - Methods
Valuation by Future Earnings:
• This is calculated by first ascertaining the
income that accrues only from the potential
from the specific brand under consideration.
• Then the future cash flows are estimated.
• In the third step the discounted rate of future
cash flows and the time period are chosen.
 Brand Valuation - Methods
Valuation by Present Earnings:
• Takes into consideration the revenues from a
particular brand for the last three years, including the
current year.
• Invested capital and tangible assets are deducted from
the revenues of each year to obtain the net revenues.
• This is multiplied by a multiple which is comprised of
weightages and ranks assigned to various variables
that are considered to be important in building a
brand.
 Brand Equity
• Brand Equity is a set of assets (& liabilities)
linked to the brand name & symbol that adds
to (or subtracts from) the value provided by a
product.
• It is the added value endowed to products and
services.
• It is the value and power of the brand that
determines it’s worth.
 Brand Equity
• It is reflected in how customers think, feel and
act with respect to a brand, as well as its
prices, market share and profitability.
• It is intangible asset that has psychological and
financial value to the company.
 Brand Equity - Approaches
• Customer Based Brand Equity (CBBE)
• Market Based
 Customer Based Brand Equity (CBBE)

• Approaches brand equity from the point of

view of the consumer
• Defined as, “the differential effect that the
brand knowledge has on consumer response
to the marketing of the brand.”
 Differential Effect
• Brand equity arises from differences in
consumer response.
• If no differences occur, then it would be a
generic product.
 Brand Knowledge
• Thoughts
• Feelings
• Images
• Experiences
• Beliefs
Customer Response to the Marketing of the
Brand
• Perceptions
• Preferences
• Behaviour
 Customer Based Brand Equity (CBBE)

• Positive CBBE
• Negative CBBE.
 Benefits of Brand Equity
• Improved perceptions of product performance.
• Greater Loyalty.
• Less vulnerability to competitive marketing actions.
• Less vulnerability to marketing crises.
• Larger margins.
• Increased marketing communication effectiveness.
• Possible Licensing Opportunities.
• Additional Brand Extension Opportunities.
 Elements of CBBE
• Brand Awareness

• Brand Associations

• Perceived Quality

• Brand Loyalty

• Brand Image
 Brand Awareness
• Brand Awareness means customer knows
about the existence of the brand and recalls
what categories the brand falls in.

• The highest level of awareness is when the

first brand the customer can recall upon the
mention of the product category is the
company’s brand “Top-of-the-mind” recall.
 Brand Awareness Consists of…
• Brand Recognition
Consumer’s ability to confirm prior exposure
to a brand when given the brand as a cue.
• Brand Recall
Consumer’s ability to retrieve the brand from
memory when given the product category, the
needs fulfilled, or purchase or usage situations
as cue.
 Advantages of Brand Awareness
• Learning Advantages
• Consideration Advantages (Consideration Set)
• Choice Advantages
 Brand Associations
• Anything that is connected to the customer’s
memory about the brand is association.

• Formed on the basis of quality perceptions

their interaction with the employees and the
organization, advertisement of the brand,
price points, product category etc.
 Perceived Quality
• Perception of the customer about the overall
quality of the brand.

• While assessing quality the customers

considers the parameters that are important
to him.
 Brand Loyalty
• Customer makes the choice of purchasing one
brand from among a set of alternatives
consistently over a period of time.

• Reason of loyalty develops post purchase and

indicates a consistent patronage of a customer
over a period of time whereas all other
elements of brand equity may/may not
translate into purchase.
 Brand Image
• Perceptions that consumers have about the brand.

• Brand Image is the sum of physical, functional and emotional

evaluations about the brand.

• Customers evaluate brand image in terms of physical

appearance.

• Evaluate on the basis of performance and emotional experience.

• It is formed by repeated interactions and encounters that

customers have with the brand over a period of time.
Brand Identity versus Brand Image
• Identity stems from the source/company.
• Image is received by the receiver/consumer.

• Brand message is packaged in terms of brand identity.

• Brand message when unpacked we get brand image.

• Identity represents the firm’s reality

• Image represents the perception of the consumer.
 Brand Image Dimensions
Brand image is affected by the following
dimensions:
• User Profiles
• Purchase and Usage Situations.
• Personality and Values.
• History, heritage and experiences
 Brand Image Dimensions
• User Profiles
 Demographic (age, gender, race, income)
 Psychographic (attitudes towards life, careers,
positions)
Demographics - Gender
Demographics - Age
Psychographics – Attitude towards life
 Brand Image Dimensions
• Purchase and Usage Situations
 Channels (Stores, Online etc)
 Time
Purchase and Usage
 Brand Image Dimensions
• Personality and Values
 Sincerity
 Excitement
 Competence
 Sophistication
 Ruggedness
Brand Image - Excitement
Brand Image - Ruggedness
Brand Image - Sincerity
Brand Image - Sincerity
Brand Image - Competence
Brand Image - Sincerity
 Brand Image Dimensions
• History, Heritage and Experiences:
Past experiences, encounters with the brand.
 Models of Brand Equity
• CBBE Pyramid
• Aaker’s Model of CBBE
 CBBE Model
• Basic premise: Power of a brand resides in the
minds of customers
• Challenge is to ensure customers have the right
types of experiences with products & services
and their marketing programs to create the right
brand knowledge structures:
– Thoughts
– Feelings
– Images
– Perceptions
– Attitudes
 Building
Customer-Based Brand Equity
• Building a strong brand involves a series of
steps as part of a “branding ladder”
• A strong brand is also characterized by a
logically constructed set of brand “building
blocks.”
• Identifies areas of strength and weakness
• Provides guidance to marketing activities
Customer Based Brand Equity Pyramid

4.4. RELATIONSHIPS
RELATIONSHIPS ==
RESONANCE What
Whatabout
aboutyou
you&&me?
me?

JUDGMENTS FEELINGS 3.3. RESPONSE

RESPONSE ==
What
Whatabout
aboutyou?
you?

2.2. MEANING
MEANING ==
PERFORMANCE IMAGERY What
Whatare
areyou?
you?

1.1. IDENTITY
IDENTITY ==
SALIENCE
Who
Whoare
areyou?
you?
 Salience Dimensions
• Depth of brand awareness
– Ease of recognition & recall
– Strength & clarity of category membership

• Breadth of brand awareness

– Purchase consideration
– Consumption consideration
 Performance Dimensions
• Primary characteristics & supplementary
features
• Product reliability, durability, and serviceability
• Service effectiveness, efficiency, and empathy
• Style and design
• Price
 Imagery Dimensions
• User profiles
– Demographic & psychographic characteristics
– Actual or aspirational
– Group perceptions -- popularity
• Purchase & usage situations
– Type of channel, specific stores, ease of purchase
– Time (day, week, month, year, etc.), location, and context of usage
• Personality & values
– Sincerity, excitement, competence, sophistication, & ruggedness
• History, heritage, & experiences
– Nostalgia
– Memories
 Judgment Dimensions
• Brand quality
– Value
– Satisfaction
• Brand credibility
– Expertise
– Trustworthiness
– Likability
• Brand consideration
– Relevance
• Brand superiority
– Differentiation
 Feelings Dimensions
• Warmth (Hallmark Greetings Cards)
• Fun (Disney)
• Excitement (Mountain Dew)
• Security (LIC)
• Social approval (Mercedes, BMW)
• Self-respect (Tata Salt)
Feelings – Warmth
Fun
Excitement
Security
Self Respect
Self Respect
 Resonance Dimensions
• Behavioral loyalty
– Frequency and amount of repeat purchases
• Attitudinal attachment
– Love brand (favorite possessions; “a little pleasure”)
– Proud of brand
• Sense of community
– Kinship
– Affiliation
• Active engagement
– Seek information
– Join club
– Visit web site, chat rooms
Customer-Based Brand Equity Model

Consumer- INTENSE,
INTENSE,ACTIVE
ACTIVE
LOYALTY
LOYALTY
Brand
Resonance

RATIONAL
RATIONAL&&
Consumer Consumer EMOTIONAL
EMOTIONAL
Judgments Feelings REACTIONS
REACTIONS

POINTS-OF-
POINTS-OF-
PARITY
PARITY&&
Brand Brand POINTS-OF-
POINTS-OF-
Performance Imagery DIFFERENCE
DIFFERENCE

DEEP,
DEEP,BROAD
BROAD
Brand Salience BRAND
BRAND
AWARENESS
AWARENESS
Sub-Dimensions of CBBE Pyramid

LOYALTY
ATTACHMENT
COMMUNITY
ENGAGEMENT

WARMTH
QUALITY FUN
CREDIBILITY EXCITEMENT
CONSIDERATION SECURITY
SUPERIORITY SOCIAL APPROVAL
SELF-RESPECT

PRIMARY CHARACTERISTICS & USER PROFILES

SECONDARY FEATURES PURCHASE & USAGE
PRODUCT RELIABILITY, DURABILITY SITUATIONS
& SERVICEABILITY PERSONALITY &
SERVICE EFFECTIVENESS, VALUES
EFFICIENCY, & EMPATHY HISTORY, HERITAGE,
STYLE AND DESIGN & EXPERIENCES
PRICE

CATEGORY IDENTIFICATION
NEEDS SATISFIED
Aaker’s Model of Brand Equity
 Managing Brand Equity
• Define Brand Hierarchy:
Principle of Simplicity
Principle of Clarity
Principle of Relevance
Principle of Differentiation
Principle of Growth
Principle of Survival
Principle of Synergy
Principle of Prominence
Principle of Commonality
 Managing Brand Equity
• Define Product Brand Matrix:
 Brand Extensions
 Brand Portfolio
Brand Extensions
Brand Portfolio
 Managing Brand Equity
• Enhance Brand Equity over time:
 Brand Reinforcement
 Brand Revitalization
Brand Reinforcement
Brand Reinforcement
Brand Reinforcement
Brand Reinforcement
 Managing Brand Equity
• Enhance Brand Equity over Market Segments:
 Identify Differences in Consumer
Behaviour
 Adjust Branding Program
 Maximizing Brand Equity
• Understand brand meaning and market
appropriate products and services in an
appropriate manner.
• Properly position the brand.
• Provide superior delivery of desired benefits.
• Employ a full range of complementary brand
elements, supporting marketing activities, and
secondary associations.
 Maximizing Brand Equity
• Embrace integrated marketing
communications.
• Develop pricing strategy according to
measured consumer perceptions of value.
• Establish credibility and appropriate brand
personality and imagery.
• Maintain innovation and relevance for the
brand.
 Maximizing Brand Equity
• Strategically design and implement a brand
hierarchy and brand portfolio.
• Implement a brand equity management
system to ensure marketing actions properly
reflect brand equity concept.