Vivek Chaturvedi, MAHM, Sep 2007

“Strategic Brand Management” for the module

Strategic Brand Management.

Contents –

1. Brand

2. History of Brand

3. Why Branding

4. Brand Overview

5. Dilemma of Branding

6. Aspects of Brand

6.1 As per Consumer Appeal

6.2 As per Consumer Needs

7. Evolution of Brand

8. Market development in terms of Brand

9. Brand: consumer perception

10. Brand Positioning

11. Nature and Characteristics of the Service Brand

12. The Underlying principals in Hospitality

13. Types of Brand in the Hospitality

14. Brand Image

15. Brand Equity

16. Factors for the success of a Brand

17. Challenges for the Brand

18. Positioning brand right

19. Functional Brand

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20. Emotional Brand

21. Symbolic Brand

22. Brands have evolved

23. Brand in the new world

24. Thoughts for the future

25. References

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Brand –

The word brand has originated from the old norse word brandr, which means “to burn” as

brands were and still are the means by which owners of livestock mark their animals to

identify them. The word brand creates an image which itself gives an impression that

what brand is all about. Brand is something which is in the mind of consumer and other

stakeholders; it is the how they perceive a product or service.

• A mixture of tangible and intangible attributes symbolized in a tradematrk, which,

if properly managed, creates influence and generates value. – Interband (2007)

• According AMA (American marketing association) a brand is a “name, term,

sign, symbol, or design, or a combination of them, intended to identify the goods

and services of the seller or group of sellers and differentiate them from those of

competition.” Technically speaking, then, whenever a marketer creates a new

name, logo, or symbol for new product, he or she has created a brand. (Keller,

2003)

The brand has different definitions as one definition can be very limiting to its meaning.

The brand definitions are even categorized under six headings by some experts. (Randall

G., 1998):

• Visual

• Perceptual

• Positioning

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• Added value

• Image

• Personality (Hankinson and Cowking, 1993) – some examples of the same are

McDonalds, K.F.C., Celebrity endorsements

History of Brand –

Brands were originally meant to commercially communicate, craftsman and farmers used

to mark their product before selling them in the market so that people could identify the

source of the product. Tobacco and patent medicine companies along with some other

businesses started first mass-market brands in the early 19th century with the help of

uniform packing and advertising campaigns. National brands started developing in USA

and Europe towards the end of 19th century. Advertising started on the large scale along

with the increase in the literacy rate. The immigrants in the USA helped large open

markets which lead to mass merchandising. Brands like American Express, Coca-Cola,

Heinz and Kodak were already established in the 1890s however all the big brands

suffered because of the Great Depression in the 1930s. This was the time when brand

management came into effect.

Why Branding –

An obvious question comes to the mind is that why do we need a brand. As mentioned

earlier that brand remains in the mind of the consumer and that is difficult to control and

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all the individuals have different relationships with the brands then why do we need to

create an image or positioning in the minds of these individuals. While the consensus is

that every organization needs to develop strong brands as an essential part of their

business strategy, the precise means for bringing this about are fraught with both

conceptual ambiguities, many of these are noted by Balmer (2001) and practical

difficulties. The branding literature seems to suggest that developing strong brands is a

worthy independent marketing goal, autonomous from others concerns of the

organization. The brands are very potent and sometimes more powerful than the product

or the service itself which they represent. Brand “strength” certainly impresses. Coca-

Cola brand is an example; the brand has more value than the entire organization which

owns it. According to the Business Week list of the top brands, the Coke brand is worth a

value of about $70 billion.

Brand Overview –

• According to David Ogilvy (Macrae et al, 1996), ‘Brands are a part of the fabric

of life’ and same is supported here by an example. (Randall G.,1998). ‘No-one

ever got fired for buying IBM’, this saying takes a whole new meaning to the

word brand and its power. IBM dominated the world market of IT solutions like

no other company in any other field. IBM till late nineties was having 60% of the

sales and 80% of world profits with the support of the strong brand value.

(Randall G.,1998).

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• According to Thomas Gad brands strike cords, however striking the right cord is

very difficult and most of the time a costly. (Gad T., 2001) The brands have so

much of value in today’s world that John Stuart who was chairman of the Quaker

oats ltd said that ‘if this business were to be split up, I would be glad to take the

brands, trademarks and goodwill and you could have all the bricks and mortar and

I would fare better than you’. (Chernatony L., 2007)

• According to Joel Desgrippes, Branding is not only about ubiquity, visibility, and

functions; it is about bonding emotionally with people in their daily life. Only

when a product or a service kindles an emotional dialogue with the consumer, can

this product or service qualify to be a brand. (Gobe M., 2001) This definition

surrounds the emotional side of the brand value. The brand has to have some kind

of emotional bonding with the consumer then only it can work as a brand and

sustain its value for a longer period of time.

Dilemma of branding –

In the branding process, the brand's strength is built on a definite logic for each brand. In

this sense, branding appears to have rules, but the branding literature provides elusive

advice to managers. Anecdotal discussions of strong and powerful brands dominate the

marketing literature, and this is where the problems arise, different strong brands suggest

different courses of action, different brand management principles. While Coke had

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problems changing its formula, there have been innumerable cases of new and improved

revisions of product ingredients. (Mark J. Kay, 2006)

Aspects of Brand –

• As per consumer appeal - While the notion of brand concept management is

intuitively appealing, the proposition that brands can be either symbolic or

functional in their appeal to consumers raises a number of interesting issues. In its

general form, a brand concept can be either symbolic or functional, and thus

comprises one aspect of a brand’s image.

• As per consumer needs - The existence of different types of motivations

among individuals suggests that within most product categories, consumers’

needs could be either functional or symbolic in nature, and brands could be

positioned to satisfy either of these two types of needs. Thus, functional or

utilitarian needs of consumers could be exploited with a “functional” brand, i.e.

one positioned with a functional brand concept or meaning. Similarly, a brand

could be positioned as a “symbolic” brand to tap the needs of those who wish to

enhance their self-image or their social image.

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Evolution of Brand –

The branding is evolving with the times. The time is the most important factor for today’s

generation. People around the globe are having less and less time for them and spending

more and more time to make themselves successful or sometimes just to earn enough.

The brands have to provide something to someone and not everything to everyone. It is

time of mass customization. The people spend more n services than products. Two polls

conducted by the founder of America Research Group found that Americans are spending

more of their gift allowances on presents that enhance family life and personal well

being. (Gobe M, 2001) The time to provide services that enhance the quality of people’s

lives, services which provide an experience.

In the contemporary context, there are three essentials to manage a successful brand –

• Brands have life cycle – The brands have to be relevant to survive in the long run,

as brands have life cycle and they have to protect their value to make it great.

• Brands are elected everyday – It is important for a brand to remain emotionally

attached to their customers and committed to quality. Overexposure of any brand

can kill it.

• Real brands are about meaning and truth – As earlier said that brands need to have

emotional connection with the consumers however at the same time they need to

be sincere and quality driven.

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Market development in terms of brand –

As per Mary Goodyear (1996), market development can be explained in terms of band of

consumerization which shows the degree of dialogue between marketers and consumers.

Following figure explains the chronological order of this concept.

Unbranded Brand as reference  Brand as personality  Brand as icon  Brand as

company  Brand as policy

Brand: consumer perception –

Brands are best understood in terms of a particular logical structure that directs consumer

perceptions. Brands are names that are associated with experiences; brands can be

considered logical structures that are similar to metaphors, symbols or other

representations. The function of a brand is to create meaning for the customer.

Brand Positioning –

Positioning a brand through a clear and consistent image-building campaign has been a

cornerstone of brand marketing practice. Marketers spend millions of dollars each year to

create and support brand images. Their efforts seem to have paid off, as evidenced by the

enduring, well-defined, and strong images of some of the world’s popular brands (e.g.

Hilton, British Airways, and Marriot). In line with this evidence, theorists and

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practitioners (Gardner and Levy, 1955; Park et al., 1986; Ries and Trout, 1986) have

recommended that developing, communicating, and maintaining a brand’s image is

crucial to its long-term success.

Nature and Characteristics of the Service Brand –

The main parts of the branding for the service industry are following. (Lecture Note 1)

• Intangibility – The service is of intangible nature which can not be seen or felt.

• Variability – Service quality depends on the person who provides it and when,

where and how it is delivered.

• Inseparability – The service is part of the service provider, it can not separated

from same.

• Perishability – The service has to be consumed at the generated, it can not be

stored for the future use.

The Underlying principals in Hospitality –

In the hospitality industry, the intangible factures such as relaxation, education and

entertainment must be emphasized. The process involved for the same is following.

(Lecture Note 1)

• Pre-consumption

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• The stay itself

• Post Consumption

The hospitality brands have to take a decision that at which level they would want their

brand to be positioned. Organizations like Ritz Carlton build brands at all three levels.

The Branding for the Hospitality industry is based on following points: (Lecture Note 1)

• The hospitality industry is more supply-centric than other industries of the service

sector.

• The product of the hospitality industry is present at multiple levels.

• Branding for the hospitality required high degree of involvement and risk.

Types of Brand in the Hospitality –

The hospitality industry has different types of brand and one has to take care of same

while talking about the brand image. The types of hospitality brands are following.

(Lecture Note 1)

• Corporate Brands – like McDonalds, Disney etc

• Retail Brands – like Pizza Express, Pret a Manger etc

• Person Brands – like Jamie Oliver, Harry Ramsden etc

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Brand Image –

The importance of a brand’s image in its long-term success necessitates having a

framework for strategically managing the image over the long term (Park et al., 1986).

Brand managers have had very little direction for setting up such a conceptual

framework. One notable exception is brand concept management (BCM) proposed by

Park et al. (1986). BCM proposes that every brand image should be based on a brand

concept or a brand-specific abstract meaning.

Brand Equity –

Marketers always had this idea that brand names have and add value to a product or a

service; however it was considered part of the actual asset value of a company in 1980s

only. This activity generated the term brand equity.

As per to one expert brand equity is the difference between the value of the brand to the

consumer and the value of the product without that branding (Josh McQueen, 1991)

According to Aaker brand equity is ‘a set of assets and liabilities linked to a brand, its

name and symbol that add value or subtract the value provided by a product or service to

a firm and/or to that firm’s customers.’ (Aaker, 1991) As per Aaker these assets and

liabilities can be grouped in following five categories. (Randall G, 1997)

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• Brand Loyalty

• Name Awareness

• Perceived quality

• Brand association in addition to perceived quality

• Other proprietary brand assets – patents, trademarks, channel relationships etc

Factors for the success of a Brand –

Following factors are important for the success of any brand. According to Morgan and

Pritchard (2004) those factors are following. (Lecture Note 2)

• The Brand should be credible. The consumer’s trust in a brand is important for the

brand’s success.

• The Brand should be deliverable, if it can not be deliver the promised service or

product, it would fail.

• The Brand should differ from the other services or product. It should have a

distinctive quality of itself.

• Another important factor is the resonance of the Brand with the consumer.

Challenges for the Brand -

There are certain challenges for the development of Brand and the same are following. It

important for the managers to be aware of these challenges, and make their way through

them. (Lecture Note 2)

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• Savvy Customers – The customers are well informed today and needs to be given

due attention.

• Brand Proliferation

• Media Fragmentation

• Increased Competition

• Increased Costs

• Greater Accountability

Positioning Brand right –

• The existence of different types of motivations among individuals suggests

that within most product categories, consumers’ needs could be either

functional or symbolic in nature, and brands could be positioned to satisfy

either of these two types of needs. Thus, functional or utilitarian needs of

consumers could be exploited with a “functional” brand, i.e. one positioned

with a functional brand concept or meaning. Similarly, a brand could be

positioned as a “symbolic” brand to tap the needs of those who wish to

enhance their self-image or their social image. Park et al. further argued that

brands should be positioned to appeal to either one of these types of needs, but

not both, for a number of reasons.

• As practice of positioning became more sophisticated, marketers of all types

began to 'position' their brands competitively by associating them with

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perceptual space inside the target's head. The argument went that to create

brand equity, brands needed to be defined by own able ideas (a unique selling

proposition or positioning) rather than features or price, which competitors

could easily copy. Positionings were often based as much on what perceptual

space marketers believed was open in targets' minds as on what a product or

service actually did. Over the years, identical cold medicines squared off to

own cough vs. sneezing as a point of difference. Identical toothpastes stood

for whitening vs. gum health.

• Park et al. (1986) further argued that brands should be positioned to appeal to

either one of these types of needs, but not both, for a number of reasons. A

brand concept that is both functional and symbolic poses problems for

consumers because they cannot clearly relate the brand to either their

functional or their symbolic needs. In addition, it increases the number of

competing brands and makes brand image management difficult.

• As per Park, Jaworski and Mclnnis (1986) there are three types of brands

images (functional, Emotional-Symbolic and experiential). Here, first two

have been discussed as brands in the service industry are gradually changing

from function brands to symbolic brands. The demand for association with the

experience and feeling of the service is becoming more essential than ever.

Functional Brand –

• Functional brands satisfy immediate and practical needs. For example, in the

category of airline, the brand Air Deccan in India would be considered a

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functional brand since its usefulness lies primarily in its ability to transport

people from one place to another at comparatively cheaper fares.

• Functional brand relates to an image of performance and practicality. A

functional brand is often derived from a concrete attribute of a brand and

comes from externally generated needs. Functional brands have no links to the

personality. Product classes such as microwaves and hotels like Formula 1 are

examples of functional brands. These brands basically solve the problems of

the consumer and satisfy consumer needs

Emotional Branding –

• The foundation for the change from branding to emotional branding is a shift

from production based economy to consumer based economy. The brands

have become more of objects of desire than just being objects of functionality.

The computers have become lifestyle entertainment items rather than just

technology equipment. The airlines and hotels are no longer means of

transportation and place to stay respectively, they have become your part of

personality, the airline one flies and hotel you associate with, let others know

what class of society one belongs to. The important words in the world of

brand are now ‘sensory experience’ and ‘ultra chic’ etc. (Gobe M, 2001) The

four pillars of emotional branding are Relationship, Sensorial Experience,

Imagination and Vision. They give direction to the brand managers to plan

their work strategically and reap the results.

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• According to the Gobe Mark there is major shift in the economies from

factory based to consumer based economy. The same is explained here with

the following illustration. (Gobe M, 2001)

Old Economy – New Economy -

Factory Based: Consumer Based:

Capabilities-driven: rely on existing equipment Outsource Production

Slow developer to market Fast to Market

Manufacture product Create Brands

Production- Focused Consumer-focused

Symbolic Brand –

• Symbolic brands satisfy symbolic needs such as those for self-expression and

prestige, and their practical usage is only incidental. For example, in the

category of wrist watches, the brand Casio would be considered a functional

brand since its usefulness lies primarily in its ability to tell the time correctly.

The brand Movado, on the other hand, would be considered a symbolic brand

since it is used primarily for its status appeal, and its ability to tell the time is

only an incidental reason for its usage. Once a concept is selected for a brand,

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Park et al. (1986) advise that it should be maintained over the brand’s life for

sake of consistency.

• Symbolic Brand concepts emphasize the brand’s relationship with group

members of self. The symbolic brand concept is tied to the reference group or

ego enhancing association to the brand. Symbolic brand concepts are

characterized by an abstract and holistic image. For example, the Airline

brand Kingfisher, can be considered a symbolic brand since it is used

primarily for its status appeal, and its ability to provide experience to its

customers with very modern and ultra-chic services however at a price. Once

a concept is selected for a brand, Park et al. (1986) advise that it should be

maintained over the brand’s life for sake of consistency.

Brands have evolved –

According to the Maslow’s Hierachy of needs and branding. (lecture note 3)

• The Brands about a decade ago were meant to satisfy the Physiological needs of

the consumers. The example of this level is budget operators in the field and

aviation and hotels. E.g. Ryan Air

• The next level of the evolving was for the Safety Needs of the consumers. E.g.

Ikeas, Roosters

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• The brands evolved to next level where social needs of the consumers were more

important. E.g. Pizza Hut

• Esteem needs of the consumers are important at this level. E.g. Marriot, Four

Seasons

• Self-Actualization – This is where a consumer needs the service or product for the

self actualization. The hotels like Burj-al-Arab are good examples at this level.

Brand in the new world –

The brand in the today’s world connects people with the companies sublimely. For

example, JetBlue is not a typical airline, it does not just provide mean of transport to

travel from one place to another. It is an airline which sells very chic, well coordinated

experience to its customers; the fares are very inexpensive however they have very

stylish urbane planes with cushy seats and DIRECTV channels. Their brand is known for

its ‘coolness’.

Thoughts for the future –

Many of the assumptions underlying the notion of branding as perception management no

longer hold. Choice proliferation and media fragmentation have made brain real estate in

consumers heads scarcer, and perceptions harder to manage. Consumers seem to have

become savvier, better informed, and less trusting of marketers, making it harder to shape

brand perceptions. Further, products and services have begun to create direct

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relationships with customers, rather than being inter-mediated by retailers, which leads to

the need to brand customer interactions before, during and after the sale.

References –

1. Keller, 2003, strategic brand management

2. Randall G., 1998, A practical Guide to branding, page 4-5

3. Gad T., 2001, 4-D Branding, Cracking the corporate code of the network

economy, page 23

4. Randall G., 1998, A practical Guide to branding, page 3

5. Randall G., 1998, A practical Guide to branding), page 1

6. Chernatony L., 2007, From brand vision to brand evaluation, page 3

7. Gobe M., 2001, Emotional Branding, the new paradigm for connecting brands to

people, page xiii

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8. Balmer, J.M.T. (2001), Corporate identity, corporate branding and corporate

marketing: seeing through the fog, European Journal of Marketing, page 248-91.

Dennis L. Duffy, 2003, Internal and external factors which affect customer loyalty,

Journal of Consumer Marketing

9. Mark J. Kay, 2006, Strong brands and corporate brands, European Journal of

Marketing

10. Gobe M., 2001, Emotional Branding, the new paradigm for connecting brands to

people, page xiii

11. Gobe M., 2001, Emotional Branding, the new paradigm for connecting brands to

people, page xiv

12. Gobe M., 2001, Emotional Branding, the new paradigm for connecting brands to

people, page 285-286

13. Gardner, B.B. and Levy, S.J., 1955, The product and the brand, Harvard Business

Review, March-April, page 33-40.

14. Park, C.W., Jaworski, B.J. and MacInnis, D.J., 1986, Strategic brand concept

image management, Journal of Marketing, October, pp. 135-45.

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15. Aaker, D.A. 1991, Managing Brand Equity, page 15

16. Randall G., 1998, Branding, page 29

17. McQueen J., 1991, Leveraging the power of emotion in building brand equity,

ARF Brand Equity Workshop, 5th Feb

18. Park, C.W., Jaworski B.J. and Maclnnis D.J. (1986), Strategic brand concept

image management, journal of marketing page 135-145

19. Dilshad Sheikh, Interband (2007), Lecture Notes 1, Page 2

20. Dilshad Sheikh, Lecture Note 1, Page 3-4

21. Dilshad Sheikh, Lecture Note 1, Page 6

22. Dilshad Sheikh, Lecture Note 1, Page 10

23. Jeff Parry, Lecture Note 2, Page 3

24. Dilshad Sheikh, Lecture Note 3, Page 3

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