LEVERAGING SECONDARY BRAND ASSOCIATIONS TO BUILD EQUITY Chapter 7

LEVERAGING “Borrowing” some brand knowledge and depending on the nature of associations or responses, some brand equity Unlike brand elements and communication strategies, this is an indirect approach to build brand equity.

Creation of New Brand Associations By making a connection between and other entities, consumers form a mental association This secondary knowledge is most likely to affect the evaluations of a new product when consumers lack the motivation or the ability to judge product related attributes

Examples Events: create experiences People: create feelings Media: knowledge about attributes Cause-related marketing: Enhance brand image Evoke feelings of social approval/esteem Brand attitudes such as trustworthy & Likeable

Associations Commonality: when consumers have associations to another entity that are congruent with desired brand associations Complementarity: when there is not the level of congruence required, how much can associations add to the brand

Extensions Frito Lay™ foods and dips. An introduction of Frito Lay™ lemonade did not succeed because the fruity, sweet drink had little connection to other Frito Lay™ products. Other examples that did not work in the consumer market include Ben-Gay™ aspirin, Fruit of the Loom™ laundry detergent. However, M&M™ ice cream, Reese’s™ peanut butter, and Minute Maid™ orange soda experienced success because the brands held direct and logical connections to their new categories.

An Exception Bic™ is a strong brand name with years of experience in marketing low-cost disposable plastic products such as the Bic™ pen. Thus, Bic™ is positioned well to introduce products that capitalize on these same basic strengths – products such as disposable razors and cigarette lighters.

Pros More products mean greater shelf space for the brand and more opportunities to make a sale. The cost of introducing a brand leveraged product is less than introducing an independently new product due to a much smaller investment in brand development and advertising designed to gain brand recognition. A full line permits coordination of product offerings, such as bagels and cream cheese, potato chips and ranch dip, peanut butter and jelly, etc. A greater number of products increase efficiency of manufacturing facilities and raw materials.

Cons Brand leveraging does present challenges. Brand dilution Potential exists for damaging the reputation of the parent product if new products fail. Manufacturing and inventory costs may be higher as a result of product diversification.

Corporate Marketing Umbrella (Philosophy) Corporate Reputation Corporate Identity Corporate Image Corporate Communications Corporate Branding

Country of Origin Is Land Rover British, German or American?

Country of Origin

Cultural Bazaar Origins of the brand are more important than who the owner becomes latter in life. Lamborghini is owned by German-VW, yet it keeps this Italian identity. Rolls-Royce is now owned by German BMW, it still is associated with English luxury. It is like a child, the first years are the most important for his identity.

Problems Strong associations may hinder migration Favourability of the country of origin Domestic Perspective Foreign Perspective Individualistic vs collectivist societies Patriotic Appeal Lack uniqueness Overused

Channels of Distribution Associations with Product Price Credit Policy Quality of Service Results in associations of brands by retailers “If its sold in Nordstrom, it must be of good quality” In Bangladesh context?????

Intensive distribution Exclusive Vs. Intensive distribution

Co-Branding Occurs when two or more existing brands are combined into a joint product or are marketed together in some fashion

Nike and Apple brought music and exercise together when they developed the Sports Kit, a wireless system that allows shoes to talk to an iPod. By this strategy, Apple was able to target Nike consumers and vice versa. So both the participants benefit from this tie-up.

Advantages of Co-Branding Borrow needed expertise Leverage equity you don’t have Reduce cost of product introduction Expand brand meaning into related categories Broaden meaning Increase access points Source of additional revenue

Disadvantages of Co-Branding Loss of control Risk of brand equity dilution Negative feedback effects Lack of brand focus and clarity Organizational distractions

Ingredient Branding A special case of co-branding that involves creating brand equity for materials, components, or parts that are necessarily contained within other branded products Examples: Betty Crocker baking mixes with Hershey’s chocolate syrup Intel inside

Licensing Involves contractual arrangements whereby firms can use the names, logos, characters, and so forth of other brands for some fixed fee Examples: Entertainment (Star Wars, Jurassic Park, etc.) Television and cartoon characters (The Simpsons) Designer apparel and accessories (Calvin Klein, Pierre Cardin, etc.)

Celebrity Endorsement Draws attention to the brand Shapes the perceptions of the brand Celebrity should have a high level of visibility and a rich set of useful associations, judgments, and feelings

Celebrity Endorsement: Potential Problems Celebrity endorsers can be overused by endorsing many products that are too varied. There must be a reasonable match between the celebrity and the product. Celebrity endorsers can get in trouble or lose popularity. Many consumers feel that celebrities are doing the endorsement for money and do not necessarily believe in the endorsed brand. Celebrities may distract attention from the brand.

Employees: The Singapore Girl-a strong brand element for Singapore Airlines

Sporting, Cultural, or Other Events Sponsored events can contribute to brand equity by becoming associated to the brand and improving brand awareness The main means by which an event can transfer associations is credibility.

Sponsoring Causes