MARKETING MANAGEMENT

8 Creating Brand Equity

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A mini case of GOOGLE

Founded in 1998 by two Stanford PhD students. Google is a play on word googol, meaning 1 followed by 100 zeros, referring to huge online data. It makes money from paid listings (selling words) and technology licensing (search tabs) It has become a generic name for online search. What makes the Google so successful? [Great product; Simplicity, speed and Relevancy]

Discussion Question
What

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is the key ingredient for a strong brand?

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Brand
It

is a name, term, sign, symbol etc. that is intended to identify the goods or services of one seller from the others(competitors). The differences can be functional, rational based on tangibles (product performance) or can be symbolic, emotional based on intangibles (brand beliefs) Brandr represents its historic origins.

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Discussion Question
Why

are brands needed? [Manageable and distinguishable]

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Attributes of Strong Brands

Excels

at delivering desired benefits Stays relevant Priced to meet perceptions of value Positioned properly Communicates consistent brand messages

Well-designed

brand

hierarchy Uses multiple marketing activities Understands consumer-brand relationship Supported by organization Monitors sources of brand equity

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The Role of Brands

Identify

the maker Simplify product handling Organize accounting Offer legal protection

Signify

quality Create barriers to entry Serve as a competitive advantage Secure price premium

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MBA Skills: Rule of Thumb for brand creation

A

brand is a perceptual entity rooted in reality and reflects the perceptions and even idiosyncrasies of consumers. It is useful to answer the following questions before beginning; Who the product is (anthropomorphosis), What the product does, Why consumers should care Branding should eventually establish relevant POPs (Point of Parity) and PODs (Point of Difference)

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Key Learning
Company

Focused Branding (3M; Central) v/s Consumer Understood Branding (Coca Cola; Peripheral)

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Brand Equity
It can be defined as the differential effect in terms of consumer response to marketing messages.

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Customer based Branding

It

can result in positive or negative brand equity. It arises from differences in consumer response (alternate scenario, commodity and price wars) These responses are a result of consumer knowledge regarding the brand The differential responses are created through marketing.

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Discussion Question
Why

is Apple such a successful brand? [Customer; Buzz, Company; Retail]

Advantages of Strong Brands

Improved

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perceptions of product performance Greater loyalty Less vulnerable to competition Less vulnerable to crises Larger margins Inelastic consumer response to price increases

Elastic

consumer response to price decreases Greater trade cooperation Increase in effectiveness of IMC Licensing opportunities Brand extension opportunities

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Brand Promise
The marketers vision of what the brand must be and do for Consumers.

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A mini case of Virgin

Starting

as a music company; it now spans 3 continents and own 200 businesses. Bransons strategy is to attach the Virgin name with all his new ventures. He starts a business through initial investment and lets suppliers put in the rest. Some critics argue that he is diluting the brand and it will hurt the Virgin brand name, do you agree? [No because it is a conglomerate and virgin as a brand stands for nothing]

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Brand Equity Models

Brand

Asset Valuator: differentiation, relevance; Brand Strength, esteem, knowledge; Brand Stature Aaker Model: brand identity (unique brand associations); brand as a product, brand as an organization, brand as a person, brand as a symbol BRANDZ: presence, relevance, performance, advantage, bonding Brand Resonance: Salience; performance & judgments (rational), imagery & feelings (emotional); resonance

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Drivers of Brand Equity

Brand

elements (Name (Nike), slogans(Just do it), symbols (swoosh), endorsers (Tiger Woods), jingles etc) Marketing and support activities (Red Bull; Flug-tag) Meaning transference (Harley Davidson; Power and affiliation)

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Brand Element Choice Criteria

Memorable

(Tide) Meaningful (Burger King) Likeability (Apple)

Transferable

(Virgin) Adaptable (McDonalds) Protectable (Xerox)

Skills for a Brand Manager: Developing Brands Test (What images come to Association
mind); Nokia Learning Test (How easily is the name pronounced); Huawei Memory Test (How well is the name remembered); Detergent Brand? Preference Test (Which names are preferred); HP or Sony

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Marketing activities for strong brands

Personalization:

One to One marketing (YouTube), Customization (Nike ID) Integration: Integrated Channel Strategy (Gap), Integrated Communication Strategy (Ufone) Internalization: Internal or employee marketing (Burj ul Arab)

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Key Learning: Identifying Strong Brands

Share

of Market Share of Mind Share of Heart

Learning from Top Brands

What do top brands have that make them consistent leaders?

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Managing Brand Equity

Brand

reinforcement (requires relevance and innovation in marketing programs; Face book) Brand revitalization (evolutionary versus revolutionary changes; Nivea Skin care to Beauty products) Brand crises (Nokia; Deteriorated image)

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Devising a Branding Strategy

Develop

products Apply existing brand elements Use a combination of old and new

new brand elements for new

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Branding Terms

Brand extension: Using established brand to introduce a new product (Adobe Acrobat Software). Sub-brand: A new brand when combined with an existing brand is also called a sub brand (Adobe Acrobat Software) Parent brand: An existing brand that gives birth to the new brand (Adobe) Family brand: If a parent brand is already associate with multiple product than it is called a family brand (Adobe Flash, Adobe Reader etc.) Line extension: a new product that targets a new segment in the category served by the parent brand (Pepsi, Diet Pepsi etc.)

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Branding Terms
Category

extension: a new product that targets a new segment in the category not served by the parent brand (Virgin Atlantic; Virgin Cola) Brand line: It includes all the products both line and category extension under a brand (Fa; Men and Women) Brand mix: It is the set of all brand lines (Engro; Engro Chemical and Engro Foods) Branded variants: Specific brand lines for specific retailers (McGraw Hill; LPE) Licensed product (Zippo; Cutlery, Clothing)

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Discussion Question
Can

a Commodity such as Apple be branded?

Brand Naming
Individual

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names: A company doesnt tie its reputation with the brand (Unilever: Sunsilk) (House of Brands) Blanket family names: A company is better off in terms of costs (Galaxy note, galaxy y etc) (Branded House) Separate family names: Creating a distinct identity for each product (Lexus; Toyota) (House of Brands) Corporate name/individual name: Creating a sub brand from organizations name (Kelloggs Crunchy Nut, Kelloggs Chocos etc.)

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Brand Roles in a Brand Portfolio

Flankers

(Xperia mini) Cash cows (Mach 3) Low-end entry-level (BMW 3 Series) High-end prestige (Chevrolet Corvette)

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Discussion Question

Is Branding scenario in Pakistan any different from that in India?