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Strategic Launch Planning 1 Branding March 13, 2007
CHAPTER SEVENTEEN Strategic Launch Planning 1 Branding March 13, 2007
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The Value of a Strong Brand
“Brand equity has just as much effect on stock price as do earnings.” —David Aaker Professor of Marketing, Emeritus University of California, Berkeley
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What is a Brand? 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.” Source: American Marketing Association A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly outdated; a successful brand is timeless. Source: Stephen King, WPP Group, London A brand is something that resides in the minds of consumer.
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What is a Brand? Identifies product/service of seller and
Symbol Term Identifies product/service of seller and differentiates from competitors Design Name Combination Sign Keller, Kevin Lane. Strategic Brand Management: Building, Measuring, and Managing Brand Equity
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Benefits of Brands Consumers Identification of the source of product
Assignment of responsibility to product maker Risk reducer Search cost reducer Promise, bond, or pact with maker of product Symbolic device Signal of quality
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Benefits of Brands (cont.)
Manufacturers 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
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A Brand is More Than a Product
Organizational associations Brand Symbols Brand Personality Country of origin Scope Attributes Uses Quality/value Functional benefits Product Brand/customer relationships User Imagery Self-expressive benefits Emotional benefits
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What is Brand Equity? What distinguishes a brand from its unbranded commodity counterpart and gives it equity is the sum total of consumers’ perceptions and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, and about the company associated with the brand. Source: Alvin A. Achenbaum, “The Mismanagement of Brand Equity, 1993
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Brand Equity as a Percent of Firm Tangible Assets
Industry Brand Equity Apparel 61 Tobacco 46 Food Products 37 Chemicals Electric machinery 22 Transportation 20 Primary metals 01
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Picking Stocks Sales Assets Profits General Motors $166B $229B $7B
Suppose that you will be given 0.1 percent of the stock on one of the following companies. Which firm’s stock would you prefer, given the following information? Sales Assets Profits General Motors $166B $229B $7B Coca-Cola $19B $17B $4B Coke name worth $39BB, Kodak $11BB (Brand Valuation Reading)
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What is Brand Equity? Brand Equity Provides Value to Customer
Perceived Brand Quality Brand Associations • Personality • Benefits • Attitudes Brand Awareness Brand Name Symbols Other Proprietary Brand Assets Patents Trademarks Channel relationships Brand Equity Brand Loyalty Measurement: For awareness: Recall Recognition Do examples in class Personality Provides Value to Customer by Enhancing: • Interpretation/processing of information • Confidence in the Purchase Decision • Use Satisfaction Provides Value to Firm by Enhancing: • Efficiency and Effectiveness of Marketing Programs • Brand Loyalty • Prices/margins Brand extensions • Trade Leverage • Competitive Advantage Source: Aaker (1991) “Managing Brand Equity”
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Dimensions of Brand Personality
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Brand personality Describe the personality of the following:
Arizona Iced Tea Intel Blockbuster Video Wal-Mart Toyota Dr. Pepper Aquafina Seiko Texas Instruments Nordstroms
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Brand personality What personality characteristics come to mind for the following: Brand is repositioned several times or changes its slogan repeatedly Brand uses continuing character in its advertising Brand charges a high price and uses exclusive distribution Brand frequently available on deal Brand offers many line extensions Brand sponsors show on PBS or uses recycled materials Brand features easy-to-use packaging or speaks at consumer’s level in advertising Brand offers seasonal clearance sale Brand offers five-year warranty or free customer hot line
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Brand Equity Sources of Brand Knowledge Brand Awareness Brand Image
Strength of Brand Associations Favorability of Brand Associations Uniqueness of Brand Associations
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Why Extend a Brand? Immediate brand awareness
Transfer existing associations Faster trial Reinforce core brand
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Why Not Extend a Brand? “Boomerang” potential Dilution Bad “fit”
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Questions and Guidelines in Brand Name Selection
Figure 17.8
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Some Brand Names That Didn’t Work
Figure 17-9 Crapsy Fruit French cereal Fduhy Sesane China Airlines snack food Mukk Italian yogurt Pschitt French lemonade Atum Bom Portuguese tuna Happy End German toilet paper Pocari Sweat Japanese sport drink Zit German lemonade Creap Japanese coffee creamer I'm Dripper Japanese instant coffee Polio Czech laundry detergent Sit & Smile Thai toilet paper Barf Iranian laundry detergent
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How Brand Equity Provides Value
High Brand Loyalty Other Brand Assets More/Better Associations Perceived Quality Awareness Reduced marketing costs Increased trade leverage Patents or trademarks Strong channel relationships Creates positive image Helps customer process information Supports quality positioning higher-price strategy Easier to make brand associations liking and familiarity Provides value to customer: Assists in customer information processing Increases confidence in purchase Increases satisfaction in product use Provides value to firm: Increases effectiveness of marketing programs Increases customer loyalty and trade leverage Facilitates brand extensions Is a source of competitive advantage
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Building Brand Equity Getting awareness of the brand and the meaning.
Making brand associations -- even the factory location in Saturn’s case. Building perceived quality Loyalty in repurchase -- locking them in Getting reseller support
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