Brand Management

Department of Management Sciences

Submitted To: Mr. Amer Salam Submitted By: Haseeb Murtaza FA 06 – 031 MBA

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Chapter No.1 1-What is Brand? A brand is a name, term, sign, symbol 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. For example, Coke, Nestle and Microsoft are well renowned brands. In technical speaking whenever a marketer creates a name logo symbol he or she has created a brand.

2-Why do Brands matters? Brands really matter for both consumer and manufacturer. From consumer’s point of view: ¾ ¾ ¾ ¾ ¾ ¾ ¾

Identification of 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 ™ Brands identify the source or maker of a product and allow consumers to assign responsibility to a particular manufacturer. From an economic perspective, brands allow consumers to lower search costs for products both internally and externally. ™ Consumers offer their trust and loyalty with the implicit understanding that the brand will behave in certain ways and provide them utility through consistent product performance and appropriate pricing, promotion, and distribution programs and actions. Brands can serve as symbolic devices, allowing consumers to project their self-image. ™ Certain brads are associated with being used by certain types of people and thus reflect different values or traits. Researched have classified products and their associated attributes into three major

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categories: search goods, experience goods and credence goods. There is difficulty in assessing and interpreting product attributes and benefits so with experience and credence goods, brands may be particularly important signals of quality. Brands can reduce the risk in product decisions. These risks involve functional, physical, financial, social psychological and time risk. From manufacturer’s point of view: ¾ ¾ ¾ ¾ ¾ ¾

Means of identification to simplify handling 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

Brands help manufacturers to organize inventory and accounting records. A brand also offers the firm legal protection for unique features of the product. A brand can retain intellectual property rights, giving legal title to the brand owner. Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again. This brand loyalty provides predictability and security of demand for the firm and creates barriers of entry that make it difficult for other firms to enter the market. The annual list of the world’s most valuable brands, published by Interbrand and Business Week, indicates that the market value of companies often consists largely of brand equity. Research by McKinsey & Company, a global consulting firm, in 2000 suggested that strong, well-leveraged brands produce higher returns to shareholders than weaker, narrower brands. Taken together, this means that brands seriously impact shareholder value, which ultimately makes branding a CEO responsibility Companies sometimes want to reduce the number of brands that they market. This process is known as "Brand rationalization." Some companies tend to create more brands and product variations within a brand than economies of scale would indicate. Sometimes, they will create a specific service or product brand for each market that they target. In the case of product branding, this may be to gain retail shelf space (and reduce the amount of shelf space allocated to competing brands). A company may decide to rationalize their portfolio of brands from time to time to gain production and marketing efficiency, or to rationalize a brand portfolio as part of corporate restructuring.

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3-What are the strongest Brands? A list of top twenty strongest brands is as follows 2005 Brand Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Name

Coca-Cola Microsoft IBM GE Intel Nokia Disney Mc Donald Toyota Marlboro Mercedes-Benz Citi Hewlett Packard American Express Gillette BMW Cisco Louis Vuitton Honda Samsung

Country of ownership

2005 Brand Value ($million)

U.S U.S U.S U.S U.S Finland U.S U.S Japan U.S Germany U.S U.S U.S

67,525 59,941 53,376 46,996 35,588 26,452 26,441 26,014 24,837 21,189 20,006 19,967 18,866 18,559

U.S Germany U.S France Japan S. Korea

17,534 17,126 16,592 16,077 15,788 14,956

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Chapter No. 2 Customer Based Brand Equity Customer based brand equity model is that the power of a brand lies in what customers have learned, felt, seen, and heard about the brand as a result of their experience over time. Customer-based brand equity is defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand. There are three key ingredients of this definition: (1) “differential effect,” (2) “brand knowledge,” (3) “consumer response to marketing.” Brand Equity as a Bridge The power of a brand lies in the minds of consumers and what they have experienced and learned about the brand over time. Consumer knowledge drives the differences that manifest themselves in terms of brand equity. This realization has important managerial implications. According to this view, brand equity provides marketers with a vital strategic bridge from their past to their future. Brand equity can provide marketers with a means to interpret their past marketing performance and design their future marketing programs. Building a strong Brand There are four steps of building a strong brand. These are as follows: 1. Ensure identification of the brand with customers and as association of the brand in customers’ minds with a specific product class or customer need. 2. Firmly establish the totality of brand meaning in the minds of customers by strategically linking a host of tangible and intangible brand associations with certain properties. 3. Elicit the proper customer responses to this brand identification and brand meaning. 4. Convert brand response to create an intense, active loyalty relationship between customers and the brand. These steps represent fundamental questions that customers can ask about brands as follow: 1. 2. 3. 4.

Who are you? (Brand identity) What are you? (Brand meaning) What about you? (Brand responses) What about you and me? (Brand relationship)

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Brand Building Blocks To provide some structure, it is useful to think of sequentially establishing six brand building blocks with customers. These brand building blocks can be assembled in terms of a brand pyramid. Each brand building block will be examined in the following section. Brand Salience Achieving the right brand identity involves creating brand salience with customers. It relates to the aspects of the awareness of the brand, for example how often and easily the brand is evoked under various situations? Brand awareness refers to customers’ ability to recall and recognize the brand, as reflected by their ability to identify the brand under different conditions. Brand Performance Designing and delivering a product that fully satisfies consumer needs and wants is a prerequisite for successful marketing. To create brand loyalty and resonance consumer experience with the product must at least meet. Brand performance relates to the ways in which the product or service attempts to meet customers more functional needs. Customers can view the performance of products or services in a broad manner. Reliability refers to the consistency of performance over time and from purchase to purchase. Durability refers to the expected economic life of the product. Serviceability refers to the ease of servicing the product. Performance may also depend on sensory aspects such as how a product looks and feels. Brand Imagery Brand imagery deals with the extrinsic properties of the product including the ways in which the brand attempt to meet customer psychological needs. Brand imagery is how people think about a brand abstractly rather than what they think the brand actually does. Thus imagery refers to more intangible aspects of the brand. Brand Judgments Brand judgments focus on customers’ personal opinions and evaluation with regard to the brand. To create a strong brand four types of brand judgments summary are particular important: Quality, Credibility, Consideration and Superiority.

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Brand Feelings Brand feelings are customers’ emotional responses and reaction with respect to brand. Brand feelings also relate to the social currency evoked by the brand. The following are six important types of brand-building feelings 1. Warmth: The brand makes consumers feel a sense of calm. 2. Fun: The brand makes consumers feel amused, playful, and cheerful and so on. 3. Excitement: The brand makes consumers feel energetic and feel that they are experiencing with something special. 4. Security: The brand produces a feeling of safety. 5. Self-respect: The brand makes consumers feel better about themselves. 6. Social approval: The brand results in consumers having positive feeling about the reactions of others. Brand Resonance Brand resonance refers to the nature of the relationship and the extent to which customers feel that they are “in sync” with the brand. Brand resonance can be broken down into four categories ¾ ¾ ¾ ¾

Behavioral Loyalty Attitudinal Attachment Sense of Community Active Engagement

The fist dimension is behavioral loyalty in terms of repeat purchase. How often do customers purchase a brand and how much do they purchase? Behavioral loyalty is necessary but not sufficient for resonance to occur. To create resonance, there are also needs to be a strong personal attachment. Customers should go beyond having a positive attitude to viewing the brand as being something special. Creating greater loyalty requires deeper attitudinal attachment, which can be generated by developing marketing programs and products and services that fully satisfy consumer needs. Identification with a brand community may reflect an important social phenomenon whereby customers feel affiliation with other people associated with the brand. Strong attitudinal attachment or social identity or both are typically necessary, however, for active engagement with the brand to occur.

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Chapter No. 3 Identifying and Establishing Brand Positioning Brand positioning is defined as the “act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds. Positioning is all about identifying the optimal location of a brand and its competitors in the minds of consumers to maximize potential benefit to the firm. According to customer based brand equity model, deciding on a positioning requires determining a frame of reference by identifying the target market and the nature of competition and the ideal points-of-parity and points-of-difference brand association. Target Market A market is the set of all actual and potential buyers who have sufficient motivation, ability and opportunity to buy a product. Market segmentation involves dividing the market into distinct groups of homogeneous consumers who have similar needs and consumer behavior and thus require similar market mixes. All companies never target all of its segments. There is a criterion under which segments are targeted. ¾ Identifiably: Can segment identification be easily determined? ¾ Size: Is there adequate sales potential in the segment? ¾ Accessibility: Are specialized distribution outlets and communication media available to reach the segment? ¾ Responsiveness: How favorably will the segment respond to a tailored marketing program? From manufacturer perspective the model segments users of a brand is divided into four groups based on strength of commitment from low to high, as follows: 1. 2. 3. 4.

Convertible: High likely to switch brands Shallow: Not ready to switch, but may be considering alternatives Average: Comfortable with their choice; unlikely to switch in the future Entrenched: Highly loyal; unlikely to change in the foreseeable future

From customer perspective the model also classifies nonusers of a brand into four groups based on their openness to trying the brand from low to high, as follows: 1. Strongly unavailable: Strongly prefer their current brand 2. Weakly unavailable: Preference lies with their current brand, although not strongly 3. Ambivalent: As attracted to the other brand as to their current choice

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4. Available: Prefer the other brand but have not yet switched Points of Parity Points of parity are those associations that consumers view as being necessary to be a legitimate and credible offering within a certain product category. A point of parity is easier to achieve than points of difference. For example there is a minimal difference between Surf excel and Ariel washing powder. Points of Difference Points of difference are attributes that consumers strongly associate with a brand positively evaluate, and believe that they could not find to the same extent with a competitive brand. For example when Telenor launch first time easy load it created points of difference at that time. Points of difference may involve performance attributes. Many top brands attempt to create a point of difference on overall superior quality.

Defining and Establishing Brand Values Core Brand Values Core brand values are those set of attributes that characterize the five to ten most important aspects of a brand. Core brand values can serve as the basis of brand positioning in terms of how they relate to points of parity and points of difference. Core brand values can be identified through structured process. The first step is to create a detailed mental map of the brand. A mental map accurately portrays in detail all salient brand associations and responses for a particular target market. Mental maps must reflect the reality of how the brand is actually perceived by consumers in terms of their beliefs, attitudes, opinions, feelings, images and experiences. Brand Mantras A brand mantra is highly related to handing concepts such as brand essence used by others. A brand mantra is an articulation of the heart and soul of the brand. Their purpose is to ensure that all employees within the organization and all external marketing partners understand what the brand most fundamentally is to represent with consumers so that they can adjust their actions accordingly. Brand mantras are powerful devices. They can provide guidance what ad campaigns to run, where and how the brand should be sold and so on. Brand mantras can be broken down into three terms brand functions, descriptive modifier and emotional modifier. The brand functions describe the nature of the product. The descriptive modifier is a way to circumscribe the business functions term to further clarify its nature. Finally emotional modifier provides another qualifier in terms of how the brand delivers these benefits. For example Nike

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brand function is performance, descriptive modifier is athletic and emotional modifier is authentic.

Chapter No. 4 Criteria for Choosing Brand Elements There are six criteria in choosing brand elements which are as follows: ¾ ¾ ¾ ¾ ¾ ¾

Memorability Meaningfulness Likeability Transferability Adaptability Protect ability

Memorability A necessary condition for building brand equity is achieving a high level of brand awareness. There are certain names, symbols, logos and visual properties that make a brand more attention getting and easy to remember and thus contribute to brand equity. In other words brand name should be such which is easily recalled and recognized. Meaningfulness Brand elements can also be chosen whose inherent meaning enhances the formation of brand associations. Two particularly important dimension of the meaning of a brand element are the extent to which it conveys the following: General information about the nature of the product category In terms of descriptive meaning, to what extent does the brand element suggest something about the product category? Specific information about particular attributes and benefits of the brand in terms of persuasive meaning, to what extent does the brand element suggest something about the products Likeability Brand elements can be chosen that are rich in visual and verbal imagery and inherently fun and interesting. In terms of first three criteria, a memorable, meaningful, and likable set of brand elements offers many advantages. Because consumers often do not examine much information in making product decisions, it is often desirable that brand elements be easily recognized and recalled and inherently descriptive and persuasive.

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Transferability It is the fourth general criterion concerns the transferability of the brand element in both a product category and geographic sense. First, to what extent can the brand element ad to the brand equity of new products sharing the brand elements introduced either within the product class. Second to what extent does the brand element add to brand equity across geographic boundaries and market segments. Adaptability It is the fifth general criterion concerns the adaptability of the brand element. Due to changes in customer values and opinions brand elements often must be updated over time. The more adaptable and flexible the brand element, the easier it is to update it. Protect ability The final criterion concerns the Protect ability of the brand element both in legal and competitive sense. Because suspicious persons ask sometimes detail about the product before purchase. So manufacturers must legally protect their products by registered their patents. Five B’s from the Customer Perspective: 1. Basic: There are some basic things which are required by customers. 2. Background: Customers have background when they are going to purchase. 3. Beauty: Packaging should be such that attract customers. 4. Belief: Customer should be belief on the brand. 5. Benefit: Customers purchase those things which give them benefit. Five B’s from Brand Manager Perspective: 1. 2. 3. 4.

Brave: He should be bold in respect of taking initiatives. Brilliant: He should be adept in designing better brand strategies. Backing: Company should support him in sensitive situations. Bridge: He is a person that creates a link between customers and company and works as a bridge. 5. Beneficial: He should provide benefit to his company in which he is working.

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Options and Tactics for Brand Elements A good brand name should 9 Be protected (or at least protect able) under trademark law 9 Be easy to pronounce 9 Be easy to remember 9 Be easy to recognize 9 Be easy to translate into all languages in the markets where the brand will be used 9 Attract attention 9 Suggest product benefits (e.g.: Easy-Off) or suggest usage (note the tradeoff with strong trademark protection) 9 Suggest the company or product image 9 Distinguish the product's positioning relative to the competition. 9 Be super attractive 9 Stand out among a group of other brands < like that one compared to the others Brand Names The brand name is fundamentally very much important. It can be a key to success in the market. Sometimes brand name becomes so closely tied to the product in the minds of the consumers, however, it is very much difficult that brand element for marketers to subsequently change. Consequently brand names are often systematically researched before being chosen

Brand Awareness Brand awareness improved the extent to which brand names are chosen that are simple and easy to pronounce. To enhance brand recall, it is desirable for the brand name to be simple and easy to pronounce. Pronunciation also affects the willingness of consumers to order the brand orally. Ideally, the brand name should have a clear, understandable and unambiguous pronunciation and meaning. The way a brand is pronounced can affect its meaning.

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Brand Association It is necessary for the brand to have broader meaning to consumers than just the product category it is in. Because the brand name is a compact form of communication, the explicit and implicit meaning that consumers extract from the name can be critical. The brand name may be chosen to reinforce an important attribute or benefit association that makes up its product positioning. For example Johnson & Johnson baby shampoo was also able to transport its “gentleness” association to a more adult audience when they were forced to reposition in the 1970s when the birth rate declined. URLs URL stands for universal resource locator. It is also commonly referred to as domain names. URL must register and pay for the name with a service such as Register.com. The major issue today facing most of the companies with regard to URLs is protection of their brands from unauthorized use in domain names. For example Nike not approve of its name appearing in the URL of a fictitious fan site www.nikerules.com. Logos and Symbols There are many types of logos ranging from corporate names written in a distinctive form. For example the strong word marks include Coca-Cola, Dunhill, and Kit-Kat. There are some abstract logos which may be completely unrelated to the word mark. These are called non-word mark logos. The non-word marks logos are also often called symbols. Some logos are literal representations of the brand name, enhancing brand awareness such as Apple logos and American Red Cross.

Characters Brand characters typically are introduced through advertising and can play a central role in these and subsequent ad campaigns. Brand characters come in many different forms. Some brand characters are animated where as others are live-action figures. Consequently brand characters can be quite useful for creating brand awareness. Characters often must be updated over time so that their image and personality remains relevant to the target market.

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Slogans Slogans are short phrases that communicate descriptive information about the brand. Slogans often appear in advertising but can play an important role on packaging and in other aspects of the marketing programs. Slogans can play off the brand name in a way to build both awareness and image. Some slogans become so strongly linked to the brand that it becomes difficult to subsequently introduce new ones. For example the slogan of Haleeb milk is “the thickest milk”.

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Chapter No. 5 Product Strategy The product itself is at the heart of brand equity because it is the primary influence on what consumers experience with a brand, what they hear about a brand from others, and what the firms can tell customers about the brand in their communications. To create brand loyalty, consumers’ experiences with the product must at least meet once. Perceived quality has been defined as customers’ perception of the overall quality of a product to relevant alternatives and with respect to its intended purpose. There are some general dimensions of product quality which are as follows: ¾ Performance: Levels at which the primary characteristics of the product operate. ¾ Features: Secondary elements of a product that complement the primary characteristics. ¾ Conformance quality: Degree to which the product meets specifications and is absent of defects. ¾ Reliability: Consistency of performance over time and from purchase to purchase. ¾ Durability: Expected economic life of the product ¾ Serviceability: Ease of servicing the product ¾ Style and design: Appearance or feel of quality Total quality management reflecting the importance of product quality. In total quality management all employees of the organization work in coordination in order to improve the quality of both the organization and the product. Total Quality Management Tenets 1. Quality must be perceived by customers.

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2. Quality must be reflected in every company activity. 3. Quality requires total employee commitment. 4. Quality requires high quality partners. 5. Quality improvement sometimes requires quantum leaps. 6. Quality does not always does not always cost more. 7. Quality is necessary but may not be sufficient. 8. A quality drive cannot save a poor product. Relationship Marketing Relationship marketing attempts to provide a more holistic, personalized brand experience to create stronger consumer ties. Relationship marketing is based on the premise that current customers are the key to long term brand success. The importance of customer retention can be seen by some of the benefits it provides: ¾ Acquire new customers can cost five times more than the costs involved in satisfying and retaining current customers. ¾ The average company loses ten percent of its customers each year. ¾ A five percent reduction in the customer defection rate can increase profits by twenty five percent to eighty five percent, depending on the industry. ¾ The customer profit rate tends to increase over the life of the retained customer. Loyalty Programs Loyalty programs have become one popular means by which marketers can create stronger ties to customers. There are some tips for building effective loyalty programs follow: ¾ Know your audience ¾ Change is good ¾ Listen to your best customers ¾ Engage people

Pricing Strategy

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The pricing strategy can dictate how consumers categorize the price of the brand and how firm set that price. Consumers may infer the quality of a product on the basis of its price. Many marketers have adopted value-based pricing strategies attempting to sell the right product at the right price to better meet consumer wishes. From a branding perspective, it is important to understand all price perceptions that consumers have for a brand. Setting Prices to Build Brand Equity There are many different approaches to setting prices that depend on a number of considerations. Many firms now are employing a value-pricing approach to set prices and an everyday-low pricing approach to determine their discount pricing policy over time. Value Pricing The objective of value pricing is to uncover the right blend of product quality, product costs, and product prices that fully satisfies the needs and wants of consumers and the profit targets of the firm. Several firms have been successfully by adopting a value-pricing strategy. For instance, Wal-Mart’s slogan “we sell for less” describes the pricing strategy that has allowed them to become the world’s largest retailer. In general, an effective value-pricing strategy should strike the proper balance among the following: ¾ Product design and delivery ¾ Product costs ¾ Product prices Product Design and Delivery The first key is the proper design and delivery of the product. Product value can be enhanced through many types of well-conceived and executed marketing programs. The value pricing point out that the concept does not mean selling the product at lower prices. Consumers are willing to pay premium when they perceive added value in products and services. Some companies actually have been able to increase prices in some cases by introducing new products. For instance when Gillette introduced the Mach III, it priced the cartridges at a fifty percent premium over its then-priciest blade, despite the prevailing deflationary climate. The price increase did not deter customers, and Gillette reached its highest market share, seventy one percent in 1962. Product Costs The secondary key to a successful value-pricing strategy is to lower costs as much as possible. Meeting cost targets invariably requires additional cost

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savings through productivity gains, outsourcing, material substitution, product reformulations, process changes and so on. For example, by investing in efficient manufacturing technology, Sara Lee was able to maintain adequate margins for years on its L’ eggs women’s hosiery with minimal price increases. The combination of low prices and the strong L’eggs brand image resulted in an almost fifty percent market share. At the same time, cost reductions cannot sacrifice quality. Product Prices The price suggested by estimating perceived value can often be used as a starting point in determining actual marketplace prices, adjusting by cost and competitive considerations as necessary. For example, General Motor’s Cadillac division has used target pricing to arrive at the price of its luxury cars. GM marketers determined the optimal price based on assumptions about the consumer and then figured out how to make the car at the right cost to ensure the necessary profit. Channel Strategy The manner by which a product is sold can have a profound impact on the resulting equity and ultimate sales success of a brand. Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use. Channel Design A number of possible channel types and arrangements exist. Broadly, they can be classified into direct and indirect channels. Direct channels involve selling through personal contacts from the company to prospective customers by mail, phone, electronic means, in-person visits, and so forth. Indirect channels involve selling through third party intermediaries such as agents, wholesales and retailers. Indirect Channels Indirect channels consist of a number of different types of intermediaries. Retailers tend to have the most visible and direct contact with customers and therefore have the greatest opportunity to affect brand equity. Push and Pull Strategies When manufacturers regain some of their lost power by creating strong brand through some of the brand building tactics, for example, by selling innovative and unique products at properly priced and advertised that consumers demand for it. In this way consumer may ask retailers to stock and promote manufacturers

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products. By devoting marketing efforts to the end consumer, a manufacturer is said to employee a pull strategy. On the other side when marketers devote their selling efforts to the channel members by providing direct incentives for stock to them and sell products to the end customer. This approach is called push strategy. In pull strategy marketers use advertisement and sales promotion but in push strategy they use trade discounts and personal selling. Direct Channels To gain control over the selling process and build stronger relationships with customers, some manufacturers are introducing their own retail outlets, as well as selling their product directly to customers through various means. These channels can take many forms. The most extensive form involves companyowned stores. Hallmark, Goodyear and others have sold their own products in their own stores for years.

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Chapter No. 6 Overview of Marketing Communication Options Marketing communication options includes the following: ¾ Media advertising ¾ Direct response advertising ¾ Online advertising ¾ Place advertising ¾ Point of purchase advertising ¾ Consumer promotions ¾ Event marketing and sponsorship ¾ Publicity and public relations ¾ Personal selling Media Advertising Advertising is any paid form of non personal presentation and promotion of ideas, goods or services by an identified sponsor. Media advertising includes TV, radio, newspaper and magazines. From brand equity perspective television advertising demonstrate product attributes and consumer benefits. There are some benefits and drawbacks of TV, radio, newspaper and magazines which are as under: Medium Television

Advantages Mass coverage, High reach, High prestige, and attention getting

Radio

Local coverage, Low cost, High frequency, flexible and low production cost Newspaper High coverage, Low cost, Short lead time for placing ads, Timely and can be used for coupons Magazines

Segmentation potential, Quality

Disadvantages Low selectivity, Short message life, High absolute cost and clutter Audio only, Clutter, Fleeting message and low attention getting device Short life, Clutter, Low attention getting capabilities, and poor reproduction quality Long lead time for ad

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reproduction and high information content

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placement, visual only and lack of flexibility

Direct Response Advertising Direct response advertising establish relationship with consumers and it helps to explain to consumers new developments with their brands as well as allow consumers to provide feedback to marketers as to their likes and dislikes. Direct marketing is often seeing as a key component of relationship marketing. To implement an effective direct marketing program, three critical ingredients are (1) developing an up-to-date and informative list of current and potential future customers, (2) putting forth the right offer in the right manner, and (3) tracking the effectiveness of the marketing program. Database marketing helps firms to retain existing customers than to attract new ones. Direct response advertising includes, mail, telephone, broadcast media, print media, computer related and media related. Online Advertising Marketers can also promote their products through online advertising by developing their own websites. Websites are low cost and contain much information about products. It should be family friendly. Websites must be updated frequently and offer as much customized information as possible, especially for existing customers. Place Advertising Place advertising also called out of home advertising that captures advertising outside traditional media. Place advertising includes, billboards and posters, product placement and movies, airlines. Billboards are very effective means for advertising. It is showing up everywhere. Many marketers pay fee for their product placement in television programs. Product place can be combined with special promotions to publicize a brand’s entertainment tie-ins. Point of Purchase Advertising In-store advertising includes ads on shopping carts, cart straps, aisles, or shelves, as well as promotion options such as in-store demonstrations, live sampling and instant coupon machines. Consumer Promotions Consumer promotions are designed to change the choices, quantity and consumers’ product purchases. Consumer promotion includes samples,

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coupons, premiums, refunds and rebates, contests and sweepstakes, bonus packs and price-offs. Sampling is seen as a means of creating strong relevant brand associations.

Event Marketing and Sponsorship Event marketing refers to public sponsorship of events. Event sponsorship provides a different kind of communication option for marketers. Marketers report a number of reasons whey they sponsor events •

To identify with a particular target market

•

To increase awareness of the company

•

To create consumer perceptions of key brand image associations

•

To enhance corporate image dimensions

•

To create experiences and evoke feelings

•

To express commitment to the community

•

To entertain key clients

•

To permit merchandising opportunities

Public Relations and Publicity Public relations and publicity relate to a variety of programs and are designed to promote a company‘s image and its products. Publicity refers to non-personal communications such as press releases, media interviews, press conferences, feature articles, newsletters, photographs, films and tapes. Public relations may also involve such things as annual reports, fund-raising and membership drives, lobbying, special event management, and public affairs. There are three steps for designing an ad. It is also known as 3M: 1. Model: A person who works as an ambassador of a product and convey its benefits to target consumers. 2. Message: The objective of an ad which a company is intended to deliver to target customers. 3. Masses: The target customers/market for whom an ad is designed.

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Developing Integrated Marketing Communication Programs Matching Communication Options There are many ways to create integrated marketing communication programs. In assessing the collective impact of an IMC program, the goal is to create the most effective and efficient communication program possible. Toward that goal, six relevant criteria can be identified: 1. Coverage 2. Contribution 3. Commonality 4. Complementary 5. Versatility 6. Cost Coverage Coverage relates to the proportion of the audience that is reached by each communication option employed, as well as how much overlap exists among communication options. The unique aspect of coverage relates to the inherent communication ability of a marketing communication option, as suggested by the second criterion. To what extent that there is some overlap in communication options. Contribution Contribution relates to the inherent ability of a marketing communication to create the desired response and communication effects from consumer in the absence of exposure to any other communication option. In other words, contribution relates to the main effects of marketing communication option on the target audience. Commonality Marketing communication program should be coordinated to create a consistent and cohesive brand image in which brand association share content and

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meaning. Commonality means each and every communication option which a marketers use should convey a common associations about the product.

Complementary Complementary relates to the extent to which different associations and linkages are emphasized across communication options. For instance, research shows that promotion can be more effective when combined with advertising. Versatility Versatility refers to the extent that a marketing communication option is robust and effective for different groups of consumers. There are two types of versatility: communication and consumer. The ability of a marketing communication to work at two levels effectively communicating to consumers who have or have not seen other communications is critically important. Cost Finally evaluating the each communication option is also very much critical for a marketer. The cost of each communication option varies in the market. Now the problem is which communication option should be chosen and which is best. Communication options vary in terms of their breadth and depth of coverage. To select one communication option the marketer has to trade off the other.

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Chapter No. 8 The Brand Value Chain The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value. The brand value chain recognizes that numerous individuals within an organization can potentially affect brand equity and must be cognizant of relevant branding effects. Value Stages Brand value creation begins with marketing activity by the firm that influences customers in a way affecting how the brand performs in the marketplace and thus how it is valued by the financial community. Marketing Program Investment In brand value chain marketer invest in a shape of by introducing new product, means which he use to communicate, trade and employees to make the product best so that it can be differentiated from others. Program Multiplier The ability of marketing program to affect the customer mindset will depend on the quality of that program investment. Four particularly important factors are as follows: 1. Clarity: Do consumers properly interpret and evaluate the meaning conveyed by brand marketing? 2. Relevance: Do consumers feel that the brand is one that should receive serious consideration? 3. Distinctiveness: How unique is the marketing program from those offered by competitors? 4. Consistency: How consistent and well integrated is the marketing program? Do all aspects of the marketing program combine to create the biggest impact with customers? Customer Mindset

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There are five dimensions that have emerged to highlight the CBBE model as particularly important measure of the customer mindset: 1. Brand awareness: The extent and ease with which customers recall and recognize the brand and can identify the products and services with which it is associated. 2. Brand association: The strength, favorability and uniqueness of perceived attributes and benefits for the brand. 3. Brand attitudes: Overall evaluations of the brand in terms of its quality and the satisfaction it generates. 4. Brand attachment: How loyal the customer feels toward the brand. A strong form of attachment, adherence, refers to the consumer’s resistance to change and the ability of a brand to withstand bad news. 5. Brand activity: The extent to which customers use the brand, talk to others about the brand, seek out brand information, promotions and events. Customer Multiplier The extent to which value created in the minds of customers affects market performance depends on various contextual factors external to the customer. Three such factors are as follows: 1. Competitive superiority: How effective are the quantity and quality of the marketing investment of other competing brands. 2. Channel and other intermediary support: How much brand reinforcement and selling effort is being put forth by various marketing partners. 3. Customer size and profile: How many and what types of customers are attracted to the brand. Market Multiplier The extent to which the value engendered by the market performance of a brand is manifested in shareholder value depends on various contextual factors external to the brand itself. These factors are as follows: ¾ Marketing dynamics: What are the dynamics of the financial markets as a whole?

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¾ Growth potential: What are the growth potential for the brand and the industry in which it operates? ¾ Risk profile: what is the risk profile for the brand? How vulnerable is the brand likely to be to those facilitating and inhibiting factors? ¾ Brand contribution: How important is the brand as part of the firm’s brand portfolio and all the brands it has? Shareholder Value Based on all available current and forecasted information about a brand as well as many other considerations, the financial marketplace then formulates opinions and makes various assessments that have direct financial implications for the brand value. Three particularly important indicators are the stock price, the price earnings multiple, and overall market capitalization for the firm.

Designing Brand Tracking Studies Tracking studies involve collection of information from customers on a routine basis over time. Tracking studies are a means of applying the brand value chain to understand where, how much, and in what ways brand value is being created, thus offering invaluable information about how well a positioning has been achieved. Tracking studies play an important function for managers to facilitate their day to day decision making. Tracking studies provide valuable diagnostic insights into the collective effects of a host of marketing activities on the customer mindset, marketing outcomes, and perhaps even shareholder value. What to Track This section provides some general guidelines for tracking. The tracking study is necessary to customize tracking surveys to address the specific issues faced by the brand. Product Brand Tracking Tracking an individual branded product involves measuring brand awareness and image for the particular brand. Awareness measures should move from more general to more specific questions. A range o more general to more specific measures be employed in brand tracking surveys to measure brand image, especially in terms of specific perceptions and evaluations. It is also important to measure all association that may distinguish competing brands. Brand associations should include all potential sources of brand equity. At the same time it is also important to track more general, higher level judgments, feelings, and other outcome related measures. When and Where to Track

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Tracking studies in general depends upon the frequency of product purchase and on consumer behavior and marketing activity in the product category. One useful tracking approach for monitoring brand associations involves continuous tracking studies in which information is collected on continuous basis over time. When the brand has more stable associations, tracking can be conducted on a less frequent basis. How to Interpret Tracking Studies Tracking measures must be reliable and sensitive as possible. One problem with many traditional measures is that they do not change much over time. In this way they reflect the fact. Marketers must identify the real value drivers for a brand that is, those tangible and intangible points of difference that influence and determine consumers’ product and brand choices.

Establishing a Brand Equity Management System A brand equity management system is a set of organizational processes designed to improve the understanding and use of the brand equity concept within a firm. Three major steps an organization should take to implement a brand equity management system: creating brand equity charters, assembling brand equity reports, and defining brand equity responsibilities. Brand Equity Charter The brand equity charter provides relevant guidelines to marketing managers within the company as well as key marketing partners outside the company. This document should do the following: ¾ Define the firm’s view of the brand equity concept and explain why it is important ¾ Describe the scope of key brands in terms of associated products and the manner by which they have branded and marketed. ¾ Specify what the actual and desired equity is for brand at all relevant levels of the brand hierarchy at both the corporate level and at the individual product level. ¾ Explain how brand equity is measured in terms of the tracking study and the resulting brand equity report. ¾ Suggest how brand equity should be managed in terms of some general strategic guidelines. ¾ Specify the proper treatment of the brand in terms of trademark usage, packaging and communication. ¾ Outline how marketing programs should be devised in terms of some specific tactical guidelines.

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Brand equity charter may not change from year to year. As new products are introduced, brand programs are changed, and other marketing initiatives take place.

Brand Equity Reports Brand equity report is distributed to management on a regular basis. The brand equity report should provide descriptive information as to what is happening with a brand as well as diagnostic why it is happening. One section of the report should summarize consumers’ perceptions of key attributes, preferences and reported behavior as revealed by the tracking study. Another section of the report should include more descriptive market level information such as the following: ¾ ¾ ¾ ¾ ¾

Product shipments and movement through channels of distribution Relevant cost breakdowns Price and discount schedules where appropriate Sales and market share information broken down by relevant factors. Profit assessments

Brand equity is an intangible asset that depends on associations made by the consumer. There are at least three perspectives from which to view brand equity Financial - One way to measure brand equity is to determine the price premium that a brand commands over a generic product. For example, if consumers are willing to pay $100 more for a branded television over the same unbranded television, this premium provides important information about the value of the brand. However, expenses such as promotional costs must be taken into account when using this method to measure brand equity. Brand extensions - A successful brand can be used as a platform to launch related products. The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures, and a lower risk from the perspective of the consumer. Furthermore, appropriate brand extensions can enhance the core brand. However, the value of brand extensions is more difficult to quantify than are direct financial measures of brand equity. Consumer-based - A strong brand increases the consumer's attitude strength toward the product associated with the brand. Attitude strength is built by experience with a product. This importance of actual experience by the customer implies that trial samples are more effective than advertising in the early stages of building a strong brand. The consumer's awareness and associations lead to perceived quality, inferred attributes, and eventually, brand loyalty Brand Equity Responsibilities

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To develop a brand equity management system that will maximize long term brand equity organizational responsibilities and process with respect to the brand must be clearly defined. This section considers internal issues related to assigning responsibilities and duties for properly managing brand equity. There must be a chief brand officer in every organization who reports directly to the chief executive officer of the company and who protect the brand –the way it looks and feels. The chief brand officer recognizes that the brand is the sum total of everything a company does. He should not only help to build the brand but also plans, anticipates, researches, probes, listens, and informs.

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Chapter No. 10 Comparative Methods Comparative methods involve experiments that examine consumer attitudes and behaviors toward a brand directly estimate the benefits arising from having a high level of awareness and strong, favorable, and unique brand associations. There are two types of comparative methods. ¾ Brand-based Comparative Approach ¾ Marketing-based Comparative Approach Brand-based Comparative Approach Brand-based comparative approaches examine consumer response based on changes in brand identification. These measurement approaches typically employ experiments in which one group of consumers responds to questions about the product in its marketing program when it is attributed to the brand and other groups respond to question asked about the same brand. Comparing the responses of the two groups provide some useful insights into the equity of the brand. Consumer responses may be based on beliefs, attitudes, intentions, and actual behavior. Marketing-based Comparative Approach Marketing-based comparative approaches hold the brand fixed and examine consumer response based on changes in the marketing program. Marketingbased comparative approaches can be applied in other ways. Consumer responds to different advertising strategies and executions.

Holistic Methods Holistic methods attempt to place an overall value on the brand in either abstract utility term. Thus holistic methods attempt to net out various considerations to determine the unique contribution of the brand. The residual approach attempts to examine the value of the brand by subtracting consumer’s preferences for the brand based on physical product attributes alone from their overall brand preferences. The valuation approach attempts to place a financial value on brand equity for accounting purposes, mergers and acquisitions.

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Chapter No. 11 The Brand Product Matrix The brand product matrix is a geographical representation of all the brands and products sold by the firm. The rows of the matrix represent brand product relationships and capture the brand extension strategy of the firm in terms of the number and nature of products sold under the firm’s brands. A brand line consists of all products original as well as line and category extensions sold under a particular brand. The columns of the matrix represent product brand relationships and capture the brand portfolio strategy in terms of the number and nature o brands to be marketed in each category. The brand portfolio is the set of all brands and brand lines that a particular firm offers for sale to buyers in a particular category. Breadth of a Branding Strategy The breadth of a branding strategy concerns the number and nature of different products linked to the brands sold by a firm. There are some steps which can be used to measure include aggregate market factors, category factors, and environmental factors. Aggregate Market Factors Aggregate market factors include the market size, market growth, stage in product life cycle, sales cycle, seasonality and profits. Category Factors Category factor is considered attractive if it is the case that the threat of new entrants is low due to the barriers of entry from economies of scale, bargaining power of buyers is low e.g. when the product bought is a small percentage of buyers costs, current category rivalry is low when there are few competitors in fast growing markets and few close product substitutes exist in the eyes of consumers and the market is operating at near capacity. Environmental Factors External forces unrelated to the product’s customers and competitors that affect marketing strategies. A host of technological, political, economic, regulatory, and social factors will affect the future prospects of a category and should be forecasted.

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Depth of a Branding Strategy The depth of a branding strategy concerns the number and nature of different brands marketed in the product class sold by a firm. For example Procter & Gamble is widely recognized as popularizing the practice. P&G became proponents of multiple brands after recognizing that introducing its new detergent brand as an alternative to its already successful tide detergent resulted in higher combined product category sales.

Brand Hierarchy A brand hierarchy is a means of summarizing the branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products. A brand hierarchy is a useful means of graphically portraying a firm’s branding strategy. The highest level of the hierarchy technically always involves one brand the corporate brand. For some firms the corporate brand is virtually the only brand used e.g. as with General Motors and Hewlett-Packard. At the next lower level, a family brand is defined as a brand that is used in more than one product category but is not necessarily the name of the company itself. An individual brand is defined as a brand that has been restricted to essentially one product category, although it may be used for several different product types within the category. For example General Motor is a corporate brand, under General Motor Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac and GMC are family brands. Under these brands there are an individual brands like Alero, regal, cutlass, sun fire etc. Corporate brand equity is the differential response by consumers, customers, employees, other firms or any relevant constituency to the words, actions, communications, products or services provided by an identified corporate brand entity.

Corporate Image Corporate image plays very much important role in any brand strategy. There are some important corporate image associations which are as follows: Common Product Attributes, Benefits A high quality corporate image association involves the creation of consumer perceptions that a company makes products of the highest quality. A number of different organizations rate products and companies on the basis of quality. An innovative corporate image association involves the creation of consumer perceptions of a company as developing new and unique marketing programs, especially with respect to product introductions. Being innovative is seen in part as being modern and up to date investing in research and developing employing the most advanced manufacturing capabilities and introducing the newest

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product features. Perceived innovativeness is also a key competitive weapon and priority for firms in other countries. People and Relationships Corporate image associations may reflect characteristics of the employees of the company. Thus a customer focused corporate image association involves the creation of consumer perceptions of a company as being responsive to and caring about its customers. A company seen as customer focused is likely to be described as listening to customers and having their best interests in mind. Values and Programs Corporate image associations may reflect values and programs of the company that do not always directly relate to the products they sell. Firms can run corporate image ad campaign as a means to describe to consumers, employees, and others the philosophy and actions of the company with respect to organizational, social and political issues. Corporate Credibility Corporate credibility depends upon three factors: 1. Corporate expertise: The extent to which a company is seen as able to competently make and sell its products or services. 2. Corporate trustworthiness: The extent to which a company is seen as motivated to be honest, dependable and sensitive to customer needs. 3. Corporate likeability: The extent to which a company is seen as likable, attractive, prestigious, dynamic and so forth.

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Designing a Branding Strategy Before designing a branding strategy if a firm does not identify its weaknesses in the research, might be it has negative effect on customers. When a firm’s product cannot satisfy the needs of the consumers they never purchase it again and as a result they have negative relationship with the product and in future might be they never purchase of any product of that company on the basis of previous experience. Combining Brand Elements from Different Levels If multiple brand elements from different levels of the brand hierarchy are combined to brand new products, it is necessary to decide how much emphasis

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should be given to each brand element. For example if a sub-brand strategy is adopted, how much prominence should individual brands be given at the expense of the corporate brand? There are many different ways to connect a brand element to multiple products. The principle of commonality states that the more common brand elements shared by products, the stronger the linkages between the products. The simplest way to link products is to use the brand element as is across the different products involved. For example, a common prefix of a brand name may be adapted to different products. Hewlett-Packard capitalized on its highly successful Laser Jet computer printers to introduce a number of new products using the “Jet” prefix, for example, the DeskJet, Paint Jet, Think Jet, and Office Jet printers. Corporate Image Campaigns To maximize the probability of success, however, the objective of a corporate image campaigns must be clearly defined and results must be carefully measured against these objectives. A number of different objectives are possible in a corporate brand campaigns. ¾ Build awareness of the company and the nature of its business ¾ Create favorable attitude and perception of company credibility ¾ Link beliefs that can be leveraged by product specific marketing ¾ Make a favorable impression on the financial community ¾ Motivate present employees and attract better recruits ¾ Influence public opinion on issues

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Chapter No. 12 New Products and Brand Extensions For any company new products and brand extensions are vital and play very much important role in the growth of the company. It entirely depends on the situation and the time where they should be induction of a new brand or to extent the existing brand. When a company introduces a new product, it has three main choices as to how to brand it: 1. It can develop a new brand, individually chosen for the new product. 2. It can apply, in some way, one of its existing brands. 3. It can use a combination of a new brand with an existing brand. Managing Multiple Brands ™ Different companies have opted for different brand strategies for multiple products. These strategies are: ™ Single brand identity - a separate brand for each product. For example, in laundry detergents Procter & Gamble offers uniquely positioned brands such as Tide, Cheer, Bold, etc. ™ Umbrella - all products under the same brand. For example, Sony offers many different product categories under its brand. ™ Multi-brand categories - Different brands for different product categories. Campbell Soup Company uses Campbell's for soups, Pepperidge Farm for baked goods, and V8 for juices. ™ Family of names - Different brands having a common name stem. Nestle uses Nescafe, Nesquik, and Nestea for beverages. A brand extension is when a firm uses an established brand name to introduce a new product. An existing brand that gives birth to a brand extension is referred to as the parent brand. There are seven general strategies for establishing a category extension: 1. Introduce the same product in a different for. For example, Haleeb Dairy Queen 2. Introduce products that contain the brand’s distinctive taste, ingredient, or component. For example, Cornetto Ice Cream 3. Introduce companion products for the brand. For example, McDonald offers free Pepsi with its fast food. 4. Introduce product that relevant to the customer franchise of the brand. For example, Mobilink Black berry. 5. Introduce products that capitalize on the firm’s perceived expertise. For example, Sony TV

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6. Introduce products that reflect the brand’s distinctive benefit, attribute. For example, Safeguard. 7. Introduce products that capitalize on the distinctive image or prestige of the brand. For example, Coca Cola

Advantages of Brand Extensions There are different advantages of brand extension for a company. Some of them are as follows: What is a brand extension? It’s simply a manner of leveraging the success and popularity of an existing brand name to support the launch of a new product. For example, Nike started out selling shoes and later extended the brand into different types of shoes (i.e., line extensions) and different product categories like clothing (i.e., category extensions). As a businessperson and marketer, it’s important to understand the reasons why extending your brand can help your company. Kellogg on Branding includes a great chapter about brand extensions from which I extracted the following top 5 reasons to extend brand: 1) Brand extensions can reduce the costs and risks associated with launching a new product. Since the brand name is already known and (hopefully) popular, using that brand name on a new product (particularly when it’s in the same line as the original product) immediately communicates the same level of awareness and perception. 2) Brand extensions typically garner more shelf space than unknown new product brands. Simply stated, retailers are more likely to stock a new product with a known brand name on it. Again, it’s less risky, and a familiar brand comes with ready-made awareness and perceptions. 3) Brand extensions may require a lower advertising investment. Consumers are already aware of the brand name, so advertising to create brand awareness and recognition is not necessary. Instead, advertising dollars can be invested in more targeted messaging. 4) Brand extensions can boost the parent brand by creating increased interest in the brand as a whole and possibly growing the brand’s customer base across the board. 5) Brand extensions reduce a company’s dependency on one product which could become less popular in the future Facilitate New Product Acceptance ¾ Improve brand image

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Reduce risk perceived by customers Increase the probability of gaining distribution and trial Increase efficiency of promotional expenditures Reduce cost of introductory and follow up marketing programs Avoid cost of developing a new brand Allow for packaging and labeling efficiencies Permit consumer variety seeking

Provide Feedback Benefits to the Parent Brand and Company ¾ ¾ ¾ ¾ ¾

Clarify brand meaning Enhance the parent brand image Bring new customers into brand franchise and increase market coverage Revitalize the brand Permit subsequent extensions

Disadvantages of Brand Extensions ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾

Can confuse customers Can encounter retailer resistance Can fail and hurt parent brand image Can succeed but cannibalize sales of parent brand Can succeed but diminish identification with any one category Can succeed but hurt the image of parent brand Can dilute brand meaning Can cause the company to forgo the chance to develop a new brand.

Evaluating Brand Extension Opportunities 1. Define actual and desired consumer knowledge about the brand. 2. Identify possible extension of brand on the basis of parent brand associations and overall similarity. 3. Evaluate the potential of extension brand to create equity according to the three factor model: ¾ Salience of parent brand associations ¾ Favorability of inferred extension associations ¾ Uniqueness of inferred extension associations 4. Evaluate extension feedback effects according to the four factor model: ¾ How compelling the extension evidence is ¾ How relevant the extension evidence is ¾ How consistent the extension evidence is ¾ How strong the extension evidence is

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5. Consider possible competitive advantages as perceived by consumers and possible reactions initiated by consumers. 6. Design marketing campaign to launch extension 7. Evaluate extension success and effects on parent brand equity

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