Brands and Branding

Branding is a strategy that is used by marketers. Pickton and Broderick (2001) describe branding as Strategy to
differentiate products and companies, and to build economic value for both the consumer and the brand
owner. Brand occupies space in the perception of the consumer, and is what results from the totality of what the
consumer takes into consideration before making a purchase decision(Pickton and Broderick 2001).
So branding is a strategy, and brand is what has meaning to the consumer.
There are some other terms used in branding. Brand Equity is the addition of the brand's attributes including
reputation, symbols, associations and names. Then the financial expression of the elements of brand equity is
called Brand Value.

There are a number of interpretations of the term brand (De Chernatony 2003). They are summarized as follows:
A brand is simply a logo e.g. McDonald's Golden Arches.
A brand is a legal instrument, existing in a similar way to a patent or copyright.
A brand is a company e.g. Coca-Cola.
A brand is shorthand - not as straightforward. Here a brand that is perceived as having benefits in the mind
of the consumer is recognised and acts as a shortcut to circumvent large chunks of information. So when searching
for a product or service in less familiar surroundings you will conduct an information search. A recognised brand will

help you reach a decision more conveniently.

A brand is a risk reducer. The brand reassures you when in unfamiliar territory.
A brand is positioning. It is situated in relation to other brands in the mind of the consumer as better, worse,
quicker, slower, etc.
A brand is a personality, beyond function e.g. Apple's iPod versus just any MP3 player.
A brand is a cluster of values e.g. Google is reliable, ethical, invaluable, innovative and so on.
A brand is a vision. Here managers aspire to see a brand with a cluster of values. In this context vision is

similar to goal or mission.

A brand is added value, where the consumer sees value in a brand over and above its competition e.g. Audi

over Volkswagen, and Volkswagen over Skoda - despite similarities.

A brand is an identity that includes all sorts of components; depending on the brand e.g. Body Shop

International encapsulates ethics, environmentalism and political beliefs.

A brand is an image where the consumer perceives a brand as representing a particular reality e.g. Stella

Artois Reassuring Expensive.

A brand is a relationship where the consumer reflects upon him or herself through the experience of
consuming a product or service.

Four Banding Alternatives

A marcoms tool that a marketer can employ for branding decision-making is the Four Banding Alternatives (Tauber
1981). Four Branding Alternatives is a strategic marketing communications technique. It is a fun and creative
approach that can add value to any class that likes to discuss brands and how they could be innovatively developed.
It is used when an organization considers adding a product to its portfolio and its associated brand name. The two
variables for this matrix are Product Category (Existing or New) andBand Category (Existing or New).

New Product - a new product is developed with a series of new brand ideas and meanings to the consumer.
Flanker Brand - a new brand is introduced into a category where the organization already has established

products.
Line Extension - a current brand name is introduced into a category where the organization already has

established products.
Franchise Extension - a familiar brand is taken to a product category where it is unknown.
Here's an example. Firstly let's recall that Four Branding Alternatives is a strategic tool, so you need to base it upon a
very large organisation which is likely to own a number of brands.
Examples would include car manufacturers, large IT companies, and conglomerates. You get the idea.

An example for the Japanese company, Sony Inc is as follows:

New Product - Sony enters the market for music downloads under a new sub-branding idea and concept.
Flanker Brand - Sony introduces the Sony Vaio laptops (as it indeed has).
Line Extension - Sony enter the market for digital HD TV's (as it has).
Franchise Extension - Sony enters the market for innovative environmentally friendly small cars that run on
solar power.

The Loyalty Ladder (Branding Ladder)

Turning a prospect into an advocate
The loyalty ladder is a tool for marketing communicators. The idea is that consumers can be moved along a
continuum of loyalty using a number of integrated marketing communications techniques (it is also referred to as
a branding ladder). Essentially, consumers become loyal to a brand which has meaning to them in relation to a
product, service, solution or experience.

As with continuums of behaviour such as UACCA - Unawareness, Awareness, Comprehension, Conviction, Action,
or AIDA -Awareness, Interest, Desire, Action, the loyalty ladder begins from a point where the consumer has Not Yet
Purchased, then he or she buys the product for the first time (Trialist), if the trial has been a success he or she
returns to buy again and again (Repeat Purchaser) and finally the consumer buys no other brand (Brand Insistent).
At the Not Yet Purchased Stage the consumer is merely aProspect. As he or she trials they become a Customer.
The Repeat Purchaser is a Client since he or she is becoming loyal. Finally, the consumer becomes
an Advocate (i.e. activist or campaigner) since he or she is Brand Insistent. At this point the brand is difficult to
dislodge since it has so much meaning to the consumer. Great brands such as Nike, BMW, Boss, and iPod are in this
highly desirable position.
The marketing manager needs to decide or select integrated marketing communications that move the consumer
from Not Yet purchased to Brand Insistent (i.e. from Prospect to Advocate). Once at Brand Insistent, the marketing
manager should attempt to keep the level of customer loyalty at this point, again by using integrated marketing
communications.

Brand Strategy
An effective brand strategy gives you a major edge in increasingly competitive markets. But what
exactly does "branding" mean? Simply put, your brand is your promise to your customer. It tells them
what they can expect from your products and services, and it differentiates your offering from that of
your competitors. Your brand is derived from who you are, who you want to be and who people
perceive you to be.
Are you the innovative maverick in your industry? Or the experienced, reliable one? Is your product
the high-cost, high-quality option, or the low-cost, high-value option? You can't be both, and you
can't be all things to all people. Who you are should be based to some extent on who your target
customers want and need you to be.
The foundation of your brand is your logo. Your website, packaging and promotional materials--all of
which should integrate your logo--communicate your brand.

Your brand strategy is how, what, where, when and to whom you plan on communicating and
delivering on your brand messages. Where you advertise is part of your brand strategy. Your
distribution channels are also part of your brand strategy. And what you communicate visually and
verbally is part of your brand strategy, too.
Consistent, strategic branding leads to a strong brand equity, which means the added value brought
to your company's products or services that allows you to charge more for your brand than what
identical, unbranded products command. The most obvious example of this is Coke vs. a generic
soda. Because Coca-Cola has built a powerful brand equity, it can charge more for its product--and
customers will pay that higher price.
The added value intrinsic to brand equity frequently comes in the form of perceived quality or
emotional attachment. For example, Nike associates its products with star athletes, hoping
customers will transfer their emotional attachment from the athlete to the product. For Nike, it's not
just the shoe's features that sell the shoe.
Defining your brand is like a journey of business self-discovery. It can be difficult, time-consuming
and uncomfortable. It requires, at the very least, that you answer the questions below:

What is your company's mission?

What are the benefits and features of your products or services?

What do your customers and prospects already think of your company?

What qualities do you want them to associate with your company?

Do your research. Learn the needs, habits and desires of your current and prospective customers.
And don't rely on what you think they think. Know what they think.
Once you've defined your brand, how do you get the word out? Here are a few simple, time-tested
tips:

Get a great logo. Place it everywhere.

Write down your brand messaging. What are the key messages you want to communicate
about your brand? Every employee should be aware of your brand attributes.

Integrate your brand. Branding extends to every aspect of your business--how you answer
your phones, what you or your salespeople wear on sales calls, your e-mail signature,
everything.

Create a "voice" for your company that reflects your brand. This voice should be applied
to all written communication and incorporated in the visual imagery of all materials, online and
off. Is your brand friendly? Be conversational. Is it ritzy? Be more formal. You get the gist.

Develop a tagline. Write a memorable, meaningful and concise statement that captures the
essence of your brand.

Design templates and create brand standards for your marketing materials. Use the
same color scheme, logo placement, look and feel throughout. You don't need to be fancy, just
consistent.

Be true to your brand. Customers won't return to you--or refer you to someone else--if you
don't deliver on your brand promise.

Be consistent. This tip involves all the above and is the most important tip on this list. If you
can't do this, your attempts at establishing a brand will fail.

4 Brand Valuation Methods

Value has different meanings to different people. The objective of the valuation is determined by its use.
Some of the more common valuation approaches are market based/direct measurement method; brand
communication investments based method; awareness and franchise valuation method; finance
based/indirect measu- rement method; excess-earnings method and relief-from-royalty method.
The simplest direct measurement is to add all the brands communication investments, adjusted
for inflation. An additional adjust- ment is sometimes made to account for and reward the risk taken by
past managers. This adjustment is called the discount rate and it is used to compute the net present value
of the successive investments, that is, what they are worth today. The method is simplistic and overvalues
the brands; but brand buyers use it for that very reason. It also penalises brands that do not advertise
heavily.
Another direct measurement is the awareness and franchise valuation method. Marketing/product
managers, when projecting the volume for a new product, routinely use equations that convert a given
advertising budget into its resulting awareness, awareness into trial, and trial into its resulting consumer
franchise and consumption volume. Valuation just takes the same path but reverses its direction. This
method is easy to use and requires less research than the one previously mentioned.
One of the indirect valuation method is excess-earnings method that tries to assess the increase in
profit (or cash flow) attributable to the brand. Then it projects these cash flows over the useful life of the
brand (usually limited to 10 years) and does a discounted cash flow analysis, where each years projected
cash flow is discounted according to the assumed risk of the investment and how far away it will
materialise. The sum of these cash flows plus the residual value of the brand at the end of the analysis
gives the brand value. The major difficulty with this analysis resides in estimating the incremental effect
of the brand on sales or profits.
Relief-from-royalty is another method used by financial analysts. It is based on the concept that, if the
company did not have the use of its brand name, it would need to license that right in exchange for a
royalty fee. These royalty fees are usually based on a percentage of sales (not profits). The valuation
consists of first estimating the fee as a percentage of sales and then projecting that fee over the useful life
of the brand.

7 elements of brand valuation

The Interbrand model of brand strength is a useful framework to consider the performance of your own
brand. Consider these seven points and you should get a better sense of the strength of your own brand, as
well as some ideas on how to move forward.
Market: 10% of brand strength. Brands in markets where consumer preferences are more enduring
would score higher.

Stability: 15% of brand strength. Long-established brands in any market would normally score
higher, because of the depth of loyalty they command.
Leadership: 25% of brand strength. A market leader is more valuable: being a dominant force and
having strong market share matters.
Profit trend: 10% of brand strength. The long-term profit trend of the brand is an important
measure of its ability to remain contemporary and relevant to consumers.
Support: 10% of brand strength. Brands that receive consistent investmentand focused support
usually have a much stronger franchise, but the quality of this support is as important as the quantity.
Geographic spread: 25% of brand strength. Brands that have proven international acceptance and
appeal are inherently stronger than regional brandsor national brands, as they are less susceptible to
competitive attack.
Protection: 5% of brand strength. Securing full protection for the brand under international
trademark and copyright law is the final component of brand strength in the Interbrand model.
Brand Value: Who
determines it and
how?

Contributor - Scott Fuller

Branding is all about making sure that your people will create a positive
experience, backing them up with quality processes and technology, and then
measuring the results - remembering that whatever gets measured, will be
improved next time. It is easy to understand that this kind of seamless
experience with your brand will produce good results, but you don't decide what
a seamless experience consists of, the market does.
We are not interested in formulating the brand here, what we want to do is state
how you can measure how the market interprets that brand experience. All you
do is put your brand out there, and the market affirms, 'I believe what you tell
me about yourself!' resulting in alignment with your brand. Otherwise, it is
merely hypothesis, and you gain minimal benefit as a result.
We can compare the concept of having a strong or weak relationship between a
person and a brand to Maslow's hierarchy of needs. As we progress up the
pyramid, a stronger relationship is created because of derived preference. That
is, preference for your brand is derived from the experience that person creates
in their mind.
What your brand actually is, is only a small part of the equation. You really need
to understand how your brand is perceived, and address any discrepancies
between the two. If someone expects to receive more value than they actually
do, the chances are good that they will be disappointed in the purchase, and be
left with a negative brand experience. Needless to say, that is an outcome that
is probably not desired by any company.

The lower levels of the needs pyramid let us measure the impact of the message
using typical media measures such as reach and recall. These measures
demonstrate the ability of your agency to achieve the objectives that you set out
for them, and should be used as a platform for moving onto achieve synergy
with the minds of the market. As we try to move further up the pyramid we
have to start paying more attention to what our customers believe, compared to
what non-customers perceive.
Because we are now measuring market attitudes, the main driver of any
marketing communications, or shift in marketing strategy, should be a response
to solid evidence gained from measuring the value that the market is placing on
our brand. Having this information is a necessary springboard for responding to
attitudes. If we can understand and influence attitudes, we can successfully
alter behaviour.
So how does the Customer Value Management theory work?

Every person in the market forms an attitude about every company from
experience or messages from that company. This attitude is based on an
equation that weighs price against quality. It is relatively easy to get a price
evaluation from people's minds; however, quality is based on a number of
product and customer service attributes, and this can prove much more
subjective. The combination of all these factors is what determines the attitude
to every brand in the market.

We need the market to define what attributes are important to them for price
and quality of product & service, and then get them to rate us, and our
competitors on those attributes. Essentially, what we are doing up to this point
is discovering the drivers of customer preference & purchasing behaviour, that
is, attitudes. What we then have is a matrix of scores for every company in the
market from both customers, and non-customers. The real benefit here, is that
only the company that performs the study has this information, and
consequently, can comprehend the spatiality of the market.
By juxtaposing perceived value against actual value, we can determine any
number of effective strategies that will help to address those discrepancies, and
build a strong, loyal relationship with the whole market. We have an approach
that will let us take results of tactical marketing communications, and easily
form a justifiable opinion on how to strategically deal with any perceptive
inconsistencies.
If we need to change anything, we would be modifying one of two things.

If there is a gap between perceived and actual values, we need to

modify our marketing communications.
If the actual and perceived values are close together, but there is a large
gap between them and the fair value line, we need to modify our
marketing mix.

Ultimately, we are able to discover what works, and more importantly what
doesn't work. As a result, we can gain big efficiencies in our marketing budget
by understanding how the market decides what is best value, and responding to
that evaluation alone. This powerful concept of 'Actual Value' lets you actually
measure the impact of brand advertising and lessen any wastage of your
marketing dollar.
Everyone in the market wants to develop a relationship with a company to some
extent, so who's manipulating the market? Think about it this way, a knife can
either be used to take a life, or save a life, it depends on the practitioner. Every
company is in a race with each other for the consumer dollar; where is the harm
in discovering what people really want, and giving it to them profitably?

Paul Temporal's Branding Tips

Why Technology Companies Need Branding
October 2000

Since the late 1980's branding has become one of the

most talked about subjects amongst managers, and it now features

on the boardroom agendas of nearly all the major companies of the
world. Branding has evolved mainly in the fast moving consumer
goods industries, where substantial profits accruing from brands
have attracted a great deal of attention. Brands are now treated as
strategic assets in their own right by many firms, and brand
valuation is a rapidly emerging business.
Slow to catch on to the benefits of branding have been those
companies that are steeped in technology. Even if they have been
producing goods for public as opposed to business consumption,
they have showed some reticence in embarking on brand
investment. Where it is commonplace to spend large amounts of
money on plant and capital equipment in technology-based
industries, investing in brands has been relatively ignored. As a
result, there are few powerful technology brands, and yet they
would seem to be in desperate need of branding as a major tool in
order to differentiate themselves from all their competitors.
The World of Parity
Perhaps one of the reasons why technology companies have not
given branding a high priority, is that technology product and
service markets have not been very cluttered until the last decade of
the twentieth century. Whereas consumer goods markets had by the
beginning of the 1990's in many cases reached the stage of maturity
where they were at bursting point with a proliferation of products,
technology has only recently become so.
But now the world of parity has hit technology markets as well.
And it is technology itself that has hastened this adverse situation.
In the twenty first century, it is so much easier to copy a
competitor's products, services, systems and so on, that the name of
the game has now become how to stand out from the crowd.
Technology is becoming a commodity business, and the relatively
established hi-tech companies that find themselves being sucked in
to the commodity trap, such as Sun Microsystems, are now
realizing the role branding plays in staying out of it.
Shorter Life Cycles

Another factor that has awoken technology companies to the fact

that branding is important is the relentless decline of product life
cycles, which have now reduced to a matter of weeks from what
used to be years. In fact, some Japanese companies are now
working on product life cycles of 6-8 weeks. Faced with such
frightening product change, and with competitors continuously
bringing new products to market and enhancing others, brands are
literally the only thing that represent stability to both companies
and consumers. In fact, there is a dawning realization now amongst
technology companies that brands need not have life cycles - that
they can last indefinitely. This is a massive attraction.
Converging and New Technologies
As if product proliferation and life cycle decompression were not
enough, technology companies now find themselves surrounded by
collapsing market boundaries, driven by the convergence of
technologies. Companies can leap industries by simply acquiring
the necessary technology, and where companies thought they
understood the nature of the competition, they can be astonished by
how quickly things can change. Ten years ago, companies such as
Time Warner would never have envisaged merging with Internetbased companies such as AOL. The Internet was just not in the
public domain then. But it is the powerful brands that always win
the battle for market dominance in this fast changing world.
Return on Investment
Pouring money into technology can be the wrong move unless you
have a brand that really stands for something in the minds of
consumers, and technology investment demands high returns. The
powerful brands provide both consumer trust and high returns.
Consumers will not buy from companies that do not have a good
brand image, particularly in technology markets where the products
are relatively complex and often not fully understood. They will
only buy trusted brands. Developing a brand is not cheap, but the
returns can be spectacular. Strong brands can command premium
prices wherever they choose to go, and can often be worth more
than the net asset value of the business enterprise.

Branding is more important for hi-tech companies

The accelerating and turbulent nature of technological change poses
problems for those trying to establish, develop and manage their
brands. Technology-based companies are faced with perpetual
change, and this seemingly goes against the whole basis of
branding, which is consistency. So one of the dilemmas for hi-tech
companies is how to balance the two. An additional problem is
product parity. In a world where anything physical can be copied
with amazing speed, there is little room for the traditional unique
selling proposition. Launch a new product on the shelves, and your
competitors will have a similar one, possibly improved, in a
relatively short space of time. Lastly, the cautious nature of
consumer decision-making with regard to technology products
makes life more difficult when trying to persuade them to buy. In
these circumstances, which appear to be intensifying, branding
becomes even more important. A good brand will help overcome all
of these problems, whilst poor branding will only make things
worse.
So it is time for technology companies to venture into branding in a
significant way. With a strong brand comes market power. It is all
very well to have a good quality product or service (in fact it is
essential to survival), but it is your brand that will make your
company stand out from the crowd in what are now very congested
markets. It is as well to remember that quality can be copied to, and
that, whilst you will never develop a powerful brand without the
quality element, this alone will never be enough to differentiate
your company, product or service from the competition.
As far as the Internet is concerned, with 50 to 60 software
companies starting up each month in Silicon Valley alone, and over
10 million web-sites out there in cyberspace, the hi-tech
marketplace is becoming like a busy main road in the rush hour.
Not only does branding matter in the new hi-tech world, it is even
more important than in the traditional consumer products markets.
For the Internet and software businesses, branding is an essential
pre-requisite for market entry; gone are the days when a company
could take its time to develop a brand. Only a strong brand will
help hi-tech companies to survive through immediate and lasting

differentiation.

Indian Software companies: Do they need

branding?
by ARUN PRABHUDESAI
An overwhelming yes !
They need it for sure. Infact, I was wondering when are top Indian software firms wake up and make
concentrated efforts in creating their brand.
I am used to seeing huge signboards of Accenture from Bangalore to San Francisco. But none from
Infosys, TCS or Wipro.
Is it that Indian software companies do not need branding? I guess that must have been the case till last
year. However, with every company spreading its wings globally, it has become imperative for these firms
to wake up and aggressively push their brand.
TCS has gone ahead and made a 3 minute TV campaign, which I must say is quite impressive. Actually,
this video has been published nearly a month back, however, I just came across it today.
Have a look at this 3 minute video by Tata consultancy Services.

http://www.youtube.com/watch?v=IrdSAiUDF_4&feature=player_embedded