BRANDING

Originally branding meant anything that was hot or burning; by the European
Middle Ages it was commonly used to identify the process of burning a mark
into a stock animal so as to identify ownership. Today a brand is an identifying
mark, image, name or concept, which distinguishes a product or service. A brand
name that has been given legal protection is referred to as a trademark.

Brands are the personality attributed to products and/or services. Without the
brand, Coca-Cola is little more than sugared water; Domestos is just another
detergent, and Chiquita is a banana just like another.

Brands were born with the 19th century advent of packaged goods.
Industrialization moved the production of many household items, such as soap,
from local communities to centralized factories. These factories needed to sell
their products nationwide, to a customer base that was only familiar with local
goods. It quickly became apparent that their soap was a hard sell next to the
familiar, local product. The packaged goods manufacturers needed to convince
the public that their product was just as trustworthy.

This is illustrated by many brands of that era, such as Uncle Ben's rice and
Kellogg's breakfast cereal. The manufacturers wanted their products to appear
and feel as familiar as the local farmers' produce. From there, with the help of
advertising, manufacturers quickly learned to associate other kinds of brand
values, such as youthfulness, fun or luxury, with their products. This kick-
started the practice we now know as branding.

Examples of prominent brand names

The 2001 ranking of the 100 most valuable brands worldwide by Business Week
magazine contained 62 American, 30 European, and 6 Japanese brands.
Brands (United States):

Apple Boeing Coca-Cola Columbia Records

Ford Motor Company Hershey's McDonald's Microsoft
The Gap BP Cadbury Honda
Nestlé Nokia Orangina Canon
Sony Toyota Nintendo Brio
Ferrari Ikea Lego Mercedes-Benz

Higher BM – Marketing – Branding M. McGowan

 A good brand name should be:

• legally protectable
• easy to pronounce, remember and recognise
• attract attention
• suggest product benefits (eg.:Easy off) or suggest usage
• suggest the company or product image
• distinguish the product's positioning relative to the competition

Brand Equity is the value built-up in a brand. It can be positive or negative.

Positive brand equity is created by a history of effective promotion and
consistently meeting or exceeding customer expectations. Negative brand
equity is usually the result of bad management. The value of a company's brand
equity can be calculated by comparing the expected future revenue from the
branded product with the expected future revenue from an equivalent non-
branded product. This calculation is at best an approximation. Positive brand
equity can allow family branding, which makes new product introductions less
risky and less expensive.

Corporate Branding refers to the practice of using your company's name as a

product brand name. Disney, for example, includes the word 'Disney' in the
name of many of its products. So do IBM, Pepsi, and Coca-Cola. One advertising
campaign can be used for several products. It also helps new products being
introduced because customers are already familiar with the name. A corporate
branding strategy should only be used if the company is already well known by
the target market and also has a very positive image in their minds. If
corporate branding is done well, the corporate name can become synonymous
with a product category (e.g.: Kleenex, Tampax). Even purchasers of Charmin will
refer to the product as Kleenex. The main disadvantage with corporate branding
is the products are not treated as individuals; hence there is not adequate focus
on the products' unique characteristics.
Questions

1. Explain the origin of the word branding.

2. Define what a brand is.
3. In your own words, describe how brands were born.
4. Which brand do you remember most? Why?
5. What is brand equity?
6. Explain the difference between positive and negative brand equity.
7. Choose an example of a brand with either positive or negative brand equity. Explain your answer.
8. How is brand equity calculated?
9. Explain what corporate branding is.
10. Give an advantage and a disadvantage of corporate branding.

Higher BM – Marketing – Branding M. McGowan