Brands and Stakeholder Relationships 13 For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

How are brands created and maintained? Chapter Outline What does “brand” mean? How are brands created and maintained? How are brand relationships created and maintained? What is brand equity and how is it created?

Chapter Perspective: Changing World Traditional Product Focus Brand-Focus Create Customers Create Customers Building Brand Relationships With Customers Building Brand Relationships With Customers Reward: Sales Reward: Sales Reward: More Sales and Profits

Opening Case: Siegel & Gale

Opening Case: Siegel & Gale Challenge: Answer: Results: Repositioning Caterpillar Repositioning Caterpillar IMC program developed by Siegel & Gale featuring: New focus on benefits to customers in: Advertising Brochures and newsletters Sale presentations IMC program developed by Siegel & Gale featuring: New focus on benefits to customers in: Advertising Brochures and newsletters Sale presentations Caterpillar sales stabilized and grew Company culture began to change to fit new identity

What is a Brand? A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

What is a Brand?

What Does “Brand” Mean? Brand: A perception resulting from experiences with, and information about, a company or line of products Branding: The process of creating a brand image that engages the hearts and minds of customers

Simplify product handling Organize accounting Offer legal protection 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

Advantages of Strong Brands Improved perceptions of product performance Greater loyalty Less vulnerability to competitive marketing actions Less vulnerability to crises Larger margins More inelastic consumer response Greater trade cooperation Increased marketing communications effectiveness Possible licensing opportunities

What is a Brand Promise? A brand promise is the marketer’s vision of what the brand must be and do for consumers.

Brand Elements These are those trademarkable devices that identify & differentiate the brand.

Types of Brand Elements Brand Names URLs Logos and Symbols Characters Slogans Jingles Packaging

Brand Element Choice Criteria

Most difficult element for marketers to change Brand Names Captures the central theme or key associations of a product in a very compact and economical fashion Most difficult element for marketers to change Closely tied to the product in the minds of consumers

Brand Names (Examples)

Naming guidelines Naming procedures Brand Names Simplicity and ease of pronunciation and spelling. Familiarity and meaningfulness. Differentiated, distinctive, and unique. Naming procedures Define objectives Generate names Screen initial selection Study selected names Research the final name Select the final name

Uniform Resource Locators (URLs) Specify locations of pages on the Web Known as domain names Protect the brands from unauthorized use in other domain names Cybersquatting- Registering, trafficking in, or using a domain name with bad-faith to profit from: The goodwill of a trademark belonging to someone else.

Indicate origin, ownership, or association Logos and Symbols Indicate origin, ownership, or association Range from corporate names or trademarks written in a distinctive form, to abstract designs that may: Be completely unrelated to the corporate name or activities

Brands are often represented by logos Logos: Distinctive graphic designs used to communicate a product, company, or organization identity

Brand Symbols

Special type of brand symbol Brand Characters Special type of brand symbol One that takes on human or real-life characteristics Introduced through advertising and can play a central role in ad campaigns and package designs

Brand Characters

Slogans Short phrases that communicate descriptive or persuasive information about the brand Function as useful “hooks” or “handles” to help consumers grasp the meaning of a brand Indispensable means of summarizing and translating the intent of a marketing program

Like a good neighbor, State Farm is there Slogans (Examples) Like a good neighbor, State Farm is there Just do it Nothing runs like a Deere I’m lovin’ it We try harder Always low prices

Musical messages written around the brand Jingles Musical messages written around the brand Have catchy hooks and choruses that become permanently registered in the minds of listeners Enhance brand awareness by repeating the brand name in clever and amusing ways

Activity of designing and producing containers or wrappers Packaging Activity of designing and producing containers or wrappers From the perspective of both the firm and consumers, packaging must: Identify the brand Convey descriptive and persuasive information Facilitate product transportation and protection Assist in at-home storage Aid product consumption

Packaging (Examples)

What Does “Brand” Mean? What a Brand Does Differentiates a Product From Its Competitors Differentiates a Product From Its Competitors What a Brand Does Makes a Promise to Consumers Makes a Promise to Consumers Serves As the Driving, Unifying Force Directing All Functional Areas, Including IMC

Tales From the Real World There is an tendency to think of most brands in terms of tangible product categories like soft drinks or breakfast cereal. However, in the real world, there are many intangible brands. One example is the fact that every four years professionals from major MC agencies are enlisted in the U.S. presidential election campaigns—to help “brand” one of the candidates.

Each of These Universities Represents a Brand Image

The Power of a Brand Identical cereals tasted by consumers: Vs. 59% Chose Kellogg’s 41% Chose No Brand Identical TV sets examined by consumers: Vs. Consumers willing to pay $75 more for Hitachi than GE

Retailers are creating their own brands Store Brands (a.k.a. house brand or private label): A brand used exclusively by one chain of stores for a line of products made to a store’s specification

How Are Brands Created? 3 Key Steps Determining the Desired Brand Position Determining the Desired Brand Position 3 Key Steps Developing Brand Identification Developing Brand Identification Creating Brand Image

Figure 3-1: Determining the Desired Brand Position

IMC In Action: Dr. Scholl’s

IMC In Action: Dr. Scholl’s Challenge: Answer: Results: Revitalize Dr. Scholl’s brand Revitalize Dr. Scholl’s brand An IMC program featuring: Revamped, more fashionable product line Product placement on Television New distribution in shoe stores An IMC program featuring: Revamped, more fashionable product line Product placement on Television New distribution in shoe stores Some Dr. Scholl’s shoes now sell for $169

Insight: Stakeholder Overlap Organizations must assume that multiple stakeholder groups may be exposed to brand messages. In other words, stakeholders overlap. For example an IMC audit for a bank found that 95 percent of the bank’s employees were also bank customers and that 75 percent owned shares of the bank’s stock. Marketers must make sure that brand messages are acceptable to all stakeholders and that the presentation of the brand image and position is consistent for all of these groups.

Aspects Fostered by the Company Consistency Consistency Accessibility Accessibility Relationship Aspects Commitment Responsive-ness Responsive-ness

Aspects Arising from the Consumer Relationship Aspects Trust Liking Satisfaction Trust Liking

Maintaining Relationships Is Critical Existing Brands Account for Most of the Brand Communication With Consumers Existing Brands Account for Most of the Brand Communication With Consumers Selling to Existing Customers Is Much Less Costly Than Attracting New Customers Selling to Existing Customers Is Much Less Costly Than Attracting New Customers Current Heavy Users Typically Account for Most of a Brand’s Revenue Current Heavy Users Typically Account for Most of a Brand’s Revenue Loyal Word of Mouth Advocates Can Be Highly Persuasive With Other Consumers

Maintaining relationships is critical Customer Relationship Management (CRM): The optimization of all customer contacts through the distribution and application of customer information. Simply stated, it is your promise, that no matter how your customers interact with you, you will always recognize who they are

Figure 3-5: Relative Importance of Different Stakeholder Groups +

What Is Brand Equity and How Is It Created? Brand equity: The intangible value of a company beyond its physical net assets Broadening distribution Broadening distribution 4 Ways of Leveraging Brand extensions Brand extensions Brand licensing Co-branding Co-branding

Final Note: One of IMC’s most important contributions: Helping to build trust in brands… …therefore enhancing consumer relationships Reason: An organization’s communication with its stakeholders influences everything else it does

Bibliography Principles of Advertising & IMC by Tom Duncan 2nd Edition, Published by McGraw-Hill Irwin. Event Management For Tourism, Cultural, Business and Sporting Events by Lynn Van Der Wagen Brenda R. Carlos Published by Pearson Prentice Hall. Advertising Principles and Practice by W. Wells, S. Moriarty and J. Burnett, Published by Prentice Hall International. Integrated Marketing Communications by David Pickton & Amanda Broderick Published by Prentice Hall.

The End: "The man who removes a mountain Begins! by carrying away small stones." - Chinese Proverb