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Branding Strategy: Building Strong Brand

Chapter outline

Define brand and brand equity.


Identify the criteria for choosing the brand elements.
Explain the brand strategy decisions with example.
Understand the brand name strategies decisions.
Understand the brand positioning decisions.

Branding is essential for a company to become successful in the marketplace. Today, it is very
difficult to build strong brand only through advertising, but now, we have to build strong brand
through performance and integrated marketing communication. In this chapter, we will discuss
the branding strategy to occupy a strong brand in the minds of target customers. But it is not
possible within a short period of time. The value of a brand is worth than its physical structures
of the company.

What is Branding and how will it increase sales or profit?


Branding is the process by which people understand and develop a relationship with your
companys personality, services and/or products. Branding is about your identity as a company.
What you stand for. How you work. What you sell. Whether you keep your promises and fulfill
the expectations you create. When people know, understand and like your brands personality,
they choose your brand over another brand. That competitive edge is what builds sales and
profitability.
Branding is not the sizzle on your companys steak. It is the source, cut, quality, freshness,
color, aroma, price, preparation and presentation of your steak.

Brand
Brand is a name; sign, symbol, number or combination of them intended to identify a companys
products from competitors offerings. Strong brand power is a great asset for a company. It is
very easy for salespeople to sell strong branded product. For example; the brand of Unilever,
such as Lux, Sunsilk and Clear shampoo.
Some analysts see brands as the major enduring asset of a company, outlasting the companys
specific products and facilities. Thus, brands are powerful assets that must be carefully
developed and managed.

The top 100 brands in the world are shown in table;


Ford
Merrill Lynch
Kodak

Coca Cola
Microsoft
IBM
GE
Intel
Nokia
Toyota
Disney
McDonald's
MercedesBenz
Citi
Marlboro
HewlettPackard
American
Express
BMW
Gillette
Louis
Vuitton
Cisco
Honda
Burberry

Nike
UPS
JPMorgan
SAP
Canon
Morgan Stanley
Goldman Sachs
Pfizer
Apple
Kellogg's
IKEA
UBS
Novartis
Siemens
Harley-Davidson
Gucci
eBay
Philips
Samsung
Levi's

Pepsi
Nescafe
Google
Dell
Sony
Budweiser
HSBC
Oracle
Shell
Nissan
Starbucks
Lexus
Smirnof
LG
Bulgari
Prada
Armani

Accenture
Nivea

Adidas
Rolex
Zara
Audi
Hyundai
BP
Panasonic
Reuters
Kraft
Porsche
Hermes
Tiffany &
Co.
Hennessy
Duracell
ING
Cartier
Moet &
Chandon
Johnson &
Johnson
MTV

Branding has been around for centuries as a means to distinguish the goods of one producer from
those of another. In fact, the word brand is derived 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 their animals in their firms.
Firms could not succeed in developing and managing products without effectively identifying
their products and services. Organizations identify their offerings by branding.
According to 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 one seller or group of sellers and to differentiate them from those of
competition. A brand carries different meaning for customers.
A brand is a complex symbol that can convey up to six level of meaning.
Attributes:
A brand brings to mind certain attributes. Mercedes suggest expensive,
well-built, well-engineered, durable, high-prestige automobiles etc.

Beliefs: Attributes must be translated into functional and emotional benefits. The attribute
durable could translate into the functional benefits, I would not have to buy another car for
several years, and the expensive translate into the emotional benefits. The car makes me feel
important and admired.

Values:
The brand also says something about the producers values. Mercedes stands for
high performance, safety and prestige.

Culture:
The brand may represent a certain culture. The Mercedes represents German
culture, organized efficient and high quality.
Personality:
The brand can project a certain personality. Mercedes may suggest nononsense boss (person).

User:
The brand suggests the kind of users or consumer who buys or uses the brand. We
would expect to see a 55 years old top executive behind the wheel of a Mercedes, not a 20
years old secretary.

There are four types of brand designations such as are;


i) A brand name:
It is a word, letter (number), group of words or letters that can be spoken.
For example, windows 2000, Lipton tea etc
ii) A brand mark: A brand mark is a symbol, design or distinctive coloring or lettering that
cannot be spoken. For example, Lexus stylized L crest.
iii) Trademark:
Firms usually want exclusive use of their brands and take steps to prevent
others from using them. A brand registered with the patent and trademark office is called a
trademark. A trademark legally protected can be used only by its owner. Brand names, brand
mark or trade characters do not offer legal protection against use by competitors unless registered
as trademarks. When used a registered trademark is followed by . Such as Scotch Brand
Tape.
iv) A trade character:
A trade character is a brand mark that is personified. For example,
McDonalds Ronald McDonald.
The key to creating a brand, according to AMA is to be able to choose a name, logo, symbol,
package design or other attribute that identifies a product and distinguish it from others.

Brands versus Products


It is important to contrast a brand and a product.
Product
According to Philip Kotler, a product is anything that can be offered to a market for attention,
acquisition, use or consumption that might satisfy a need or want.
Thus a product may be a physical good ( a cereal, tennis racquet or automobile), service ( an
airline, bank or insurance company), retail store ( a department store, specialty store or
supermarket) person ( a political figure, entertainer or professional athlete) organization ( nonprofit organization, trade organization or arts group) place ( a city, state or country) or idea ( a
political or social cause).
Brand

A brand is therefore a product but one that adds other dimensions that differentiate it in some
way from other products designed to satisfy the same need. These differences may be rational
and tangible. Related to product performance of the brand or more symbolic, emotional and
intangible-related to what brand represents.
A branded product may be a physical good (Kelloggs Corn flakes cereal, prince tennis racquet) a
service (United airlines, Bank of American,) a store (Safeway supermarket) a person (Bill
Clinton, Michael Jordan)
A Place (the city of London, State of California), an organization (Red Cross, American
Automobile Association)
Some brands create competitive advantage with product performance. For example, brands such
as Gillette, Sony have been leaders in their product categories due to continual innovation. Other
brands create competitive advantages through non-product related means. For example, CocaCola, Pepsi, Marlboros have become leaders in their product categories by understanding
consumer motivations and desires and creating relevant and appealing images surrounding their
products and services.
Brand Equity
Brand equity represents a great asset for the future of the company. Brands are more than just
names and symbols. Brands represent consumers perceptions and feelings about a product and
its performance-everything that the product or service means to consumers. Ultimately, brands
reside in the minds of consumers. The real value of a strong brand is its power to capture
consumer preference and loyalty.
Brand equity is the positive differential effect that knowing the brand name has on customer
response to the product or service. A measure of a brands equity is the extent to which customers
are willing to pay more for the brand.
A brand with strong brand equity is a very valuable asset. Brand valuation is the process of
estimating the total financial value of a brand. Measuring such value is difficult.
High brand equity provides a company with many competitive advantages. A powerful brand
enjoys a high level of consumer brand awareness and loyalty.
A powerful brand offers the company some defense against fierce price competition.
Therefore the fundamental asset underlying brand equity is customer equity. Thus the proper
focus of marketing is building customer equity, with brand management serving as a major
marketing tool.

Major Brand Strategy Decisions


As a brand manager, he or she has to take some major decisions in building brand equity in the
minds of target customers. Branding poses challenging decisions to the marketer. The major
brand strategy decisions involve;

i)
Brand positioning
ii) Brand name selection
iii) Brand sponsorship
iv) Brand development

Brand Positioning
Marketers need to position their brands clearly in the minds of target customers. Organize a
strong position of a brand in the minds of target customers is called brand positioning. Which
positioning to promote is a difficult task for a brand manager?
A company must decide how many ideas to convey in its positioning to its target customers.
Many marketers advocate promoting only one central benefit. Rosser believes a company should
develop a unique selling proposition for each brand and stick to it. Crest toothpaste consistently
promotes its anti-cavity protection, and Mercedes promotes its great engineering. Ries and Trout
favor one consistent positioning message. This makes for easier communication to the target
market; it results in employees being clearer about what counts; and it makes it easier to align the
whole organization with the central positioning.
The brand should tout itself as number one on the benefit it selects. Number one positioning
includes best quality, best performance, best service, best styling, best value, lowest price,
safest, most customized, most convenient, most technological, most reliable or most prestigious.
If a company hammers away at one positioning and delivers on it, it will probably be best known
and recalled for this benefit. For example, Home depot has gained a reputation for best service
among home-improvement product retailers.

Brand Name selection


A good name can add greatly to a products success. Finding the best brand name is a difficult
task. It begins with a careful review of the products and its benefits, target market and proposed
marketing strategies. Desirable qualities for a brand name include the following:
i) It should suggest something about the products benefits and qualities. Examples, Craftsman,
Beautyrest, Merrie Maids etc.
ii) It should be easy to pronounce, recognize and remember, short name. Examples: Tide, Crest,
Puffs, But longer ones are sometimes effective.
iii) The brand name should be distinctive. For example, Taurus, Kodak, Oracle etc.
iv) It should be extendable. Amazon.com. began as an online bookseller but chose a name that
would allow expansion into other categories.
v) The name should translate easily into foreign languages. Before spending $ 100 million to
change its name to Exxon, Standard oil of New Jersey tested several names in 54 languages in
pronounced in Japanese.
vi) It should be capable of registration and legal protection. A brand name cannot be registered if
it infringes on existing brand names.
Once chosen, the brand name must be protected. Many firms try to build a brand name that will
eventually become identified with the product category. Brand names such as Kleenex, Levis,
Jell-O, Scot Tape, Formica, Ziploc and Fiberglas have succeeded in this way.

However, their very success may threaten the companys rights to the name. Many originally
protected brand names-such as cellophane, aspirin, kerosene, Linoleum, Yo-Yo, trampoline,
escalator, thermos and shredded wheat-are now generic names that any seller can use.
There are several potential sources when a firm chooses brand names:
There are varieties of brand name strategies that exist in the world. In some cases.
Company name is used essentially for all products. Such as General electric, Hewlett Packard
(HP).
In other cases, manufacturers assign individual brand names to new products that are
unrelated to the company name such as P&G, their Tide, Pampers, Pantene and Head &
Shoulders etc.
Retailers create their own brands based on their store name or some other means. For
example, Wal-Mart, Sears, Agora and Nandan etc.
There are many names based on people (Estee Lauder Cosmetic, Porshe Automobiles and
Orville Redenbacher popcorn.
Brand based on places ( British Airways, Chryslers New Yorker automobiles)
Brand based on animals or birds ( Dove soap, Mustang Automobiles )
Brand based on things or objects ( Apple computer, shell gasoline)
Use words with inherent product meaning ( lean cuisine, Just juice and Ticketron)
Important benefits or attributes ( Beatyrest mattresses, Diehard auto batteries)
Scientific natural or prestigious ( Intel microprocessors, Lexus Automobiles or Compaq
Computers)
In sum, in creating a brand, marketers have many choices over the member and nature of the
brand elements they choose to identify their products.
i) Under brand extension, an existing name is used with a new product. (Sports illustrated for
kids, www.sikids.com)
ii) For a private brand, the reseller specifies the name ( St. Johns Bay-an apparel brand of J. C.
Penney, www.jcpenney.com)
iii) If a new name is sought, these alternatives are available:
a) Initials ( HBO, www.hbo.com)
b) Invented name ( Kleenex, www.kleenex.com)
c) Numbers ( Century 21, www.century21.com)
d) Mythological character ( Samsonite luggage, www.samsonite.com)
e) Personal name (Neieken, www. Heineken.com)
f) Geographical name ( Air force, www.airforce.com)
g) Dictionary word ( Scope mouthwash, www.scope-mouthwash.com)
h) Foreign word ( Nestle, www.nestle.com)
i) Combination of words, initials, numbers etc( Head and shoulders, shampoo,
www.headandshoulders.com
The key to creating a brand, according to the AMA definition, is to be able to choose a name,
logo, symbol, package design or other attribute that identifies a product and distinguish it from
other others. These different components of a brand that identifies and differentiate it can be
called brand elements.

Criteria for choosing brand elements

In general, there are six criteria in choosing brand elements. Marketers need to consider the
following criteria before selecting the brand elements.

Memorability
Meaningfulness
Likability
iv)Transferability
Adaptability
Protectability

i) Memorability.
Brand elements can be chosen that are inherently memorable and
therefore facilitate recall or recognition in purchase or consumption settings. In other other
words, the intrinsic nature of certain names, symbols, logos and the like-their semantic content,
visual properties and so on may make them more attention getting and easy to remember and
therefore contribute to brand equity.
ii) Meaningfulness.
Brand name must have a meaning. Brand elements can also be chosen
whose inherent meaning enhances the formation of brand associations. Two particularly
important dimensions or aspects of the meaning of a brand element are the extent to which it
conveys the following:
a) General information about the nature of product category
b) Specific information about particular attributes and benefits of the brand.
iii) Likability.
Brand elements can be chosen that are rich in visual and verbal imagery and
inherently fun and interesting.
iv) Transferability.
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 add to the brand equity of new products sharing the brand elements introduced either
within the product class or across product classes? Second, to what extent does the brand element
add to brand equity across geographic boundaries and market segments?
v) Adaptability. The fifth consideration concerns the adaptability of the brand elements over
time. Because of changes in consumer values and opinions or simply because of a need to remain
contemporary, brand elements often must be updated over time. For example, Logos and
characters can be given a new looking or a new design to make them appear more modern and
relevant.
vi) Protectability. The sixth and final general consideration concerns the extent to which the
brand element is protectable-both in a legal and competitive sense. In terms of legal
considerations, it is important to a) choose brand elements that can be legally protected on an
international basis b) formally register them with the appropriate legal bodies and c) vigorously
defend trademarks from unauthorized competitive infringement.

Brand Development
A company has four choices when it comes to developing brands. It can introduce

Line extension.

Line extension occurs when a company introduces additional


items in a given product category under the same brand name, such as new flavors, forms, colors,
ingredients or package sizes. Under this concept, existing brand names extended to new forms,
sizes and flavors of an existing product category. A company might introduce line extensions as a
low cost, low risk way to introduce new products. Or it might want to meet consumer desires for
variety, to utilize excess capacity or simply to command more shelf space from resellers.
Line extensions involve some risks. An overextended brand name might lose its specific meaning
or heavily extended brands can cause consumer confusion or frustration.
Another risk is that sales of an extension may come at the expense of other items in the line.

Brand extensions.

A brand extension involves the use of a successful brand name to


launch new or modified products in a new category. Mattel has extended its enduring Barbie Doll
brand into new categories ranging from Barbie home furnishings, Barbie cosmetics and Barbie
electronics to Barbie books, Barbie sporting goods and even a Barbie band-Beyond Pink Honda
uses its company name to cover different products such as its automobiles, motorcycles, snowblowers, lawn mowers, marine engines and snowmobiles.

Multi-brands.

Companies often introduce additional brands in the same category.


Thus P&G markets many different brands in each of its product categories. Multi-branding offers
a way to establish different features and appeal to different buying movies. It also allows a
company to lock up more reseller shelf space. Seiko uses different brand names for its higherpriced watches (Seiko Lasalle) and lower priced watches (Pulsar) to protect the flanks of its
mainstream Seiko brand.

New Brands.

A company may create a new brand name when it enters a new product
category for which none of the companys current brand names is appropriate. For example,
Honda created the Lexus brand to differentiate its Luxury car from the established Honda line.
Japans Matsushita uses separate names for its different families of products. Techniques,
Panasonic, National and Quasar etc.

Brand Sponsorship
A manufacturer has sponsorship options. Such as, In preparing a brand strategy, a firm needs to
determine its branding philosophy. This outlines the use of

i)
ii)
iii)
iv)
v)
vi)
vii)

Manufacturers brand
Private brand
Generic brand
Family brand
Individual brand
Licensing
Co-branding etc.

Manufacturers brand. The product may be launched as a manufacturers brand as when


Kellogg and IBM sell their output under their own manufacturers brand names. Manufacturer

brands use the names of their makers. Such brands identify who makes the products and provide
the consumer with a nationally known, uniform and widely available product such as Butternut
bread, Lee Jeans or Chevrolet trucks etc.

Private brand.

A private brand is owned by a wholesaler or retailer. For example, Sears


has created several names-Diehard batteries, Craftsman tools, Kenmore appliances,
Weatherbeater paints. For example, Whirlpool makes the refrigerators, Sears sells under its
Kenmore brand.

Generic brand.

Generic brands emphasize the names of the products themselves and not
manufacturer or reseller at all. These products have no brand name at all. These are usually sold
in simple, no-frill packages that identify only the contents. Many grocery items such as canned
vegetables, cereals, crackers, and paper goods are available as generics. Generics are seldom
advertised and receive poor shelf locations; consumers must search out these brands.

Family brands.

With family branding, a firm uses the same brand for most or all of its
products. Many companies adopt this strategy to develop a product mix with a recognized brand
name. Fran for example employs family branding for all of its products and services. In family
branding, one name is used for two or more individual products. Family branding is best for
specialized firms or ones with narrow product lines. Companies capitalize on a uniform, wellknown image and promote a name regularly keeping promotion costs down.

Individual branding.

Individual branding requires creating a different brand for every


product. It establishes separate identities for different products and thus helps target products to
different market segments. Also, with individual branding, problems with one product seldom
influence the success of other products in the line. For example, in Procter and Gambles wide
and deep North American product mix are eight brands of laundry detergent: Bold, Cheer, Dreft,
Era, Tide, Ivory and Gain etc. Individual branding enables a firm to create multiple product
positions, attract various market segments, increase sales and marketing control and offer both
premium and low priced brands.
Product categories: Under this strategy, companies try to develop the concept of the brand. They
try to make a link of a brand with a product. For example, Motorcycle means Honda, Coke
means coca cola. Etc.

Licensing.

Some companies license names or symbols previously created by other


manufacturers names of well-known celebrities or characters from popular movies and books.
For a fee, any of these can provide an instant and proven brand name. the fastest-growing
licensing category is corporate brand licensing as more and more for profit and not for profit
organizations are licensing their names to generate additional revenues and brand recognition.
Coca-Cola for has some 320 licensees in 57 countries producing more than 10,000 products,
ranging from baby clothes and boxer shorts to earnings, a coca cola Barbie doll and even a
fishing lure shaped like a tiny Coke can. Last year, Licensees sold more than $ 1 billion worth of
licensed Coca-Cola products.

Co-branding.

In co-branding, two or more brand names are used with the same product
to gain from the brand images of each. Typically, a company uses of its own brand names in
conjunction with another firms often, via a licensing agreement. Co-branding occurs when two
established brand names of different companies are used on the same product. Ford and Eddie
Bauer co-branded a sport utility vehicle- the Ford Explorer. Co-branding offers many
advantages. Because each brand dominates in a different category, the combined brands create
broader consumer appeal and greater brand equity. Co-branding allows a company to expand its
existing brand into a category it might otherwise have difficulty entering alone.