Brand Management Chapters 12-25 (Product and Brand Management, Anandan)

Authorized for use only in PGPBM elective 'Product and brand management' of
Prof. Suresh Paul Antony, Indian Institute of Management Tiruchirappalli from September 2019 to November 2019
114 Product Management
an implied meaning (e.g. FairEver), which may be tougher to trademark, are often easier to remember
and require fewer promotional expenditure to establish in the marketplace. Real word names
(e.g Vision opticals.) are the most descriptive but they often pose great difficulty to trademark. In
many cases, the name might be already in use by some company or it may be too generic to protect.
12.2.3 Other Forms of Names

Acronyms offer the advantage of a short name combined with a longer descriptor (e.g. AMUL—
Anand Milk Union Limited). Acronyms that don’t expand into anything meaningful and those that
are difficult to remember may not yield desired results for the brand (e.g. CDZ, PGYB). Another way
of naming is naming brands on their place of origin. This is also referred to as destination branding.
For instance, Kancheepuram silks, Kashmiri shawls, French perfumes, etc. These have the advantage
of leveraging the equity of the place.
12.3 PROBLEMS FACED DUE TO LINGUISTIC DIFFERENCES
Coke was launched in China with the name ‘Ke-kou-ke-la’ with the advantage that the name sounds
similar to ‘Coca-Cola’. It faced huge problems because the name ‘Ke-kou-ke-la’ meant, “bite the wax
tadpole” or “female horse stuffed with wax” depending on the Chinese dialect. Hence, it went for a
second brand naming attempt using a different set of characters to present “ko-kou-ko-le,” which
loosely means “happiness in the mouth”. Another example of a fatal brand naming is that of General
Motors when it introduced the Chevy Nova brand in South America. The brand when translated in
the local language meant, “it won’t go/stationary”. These are not exceptional cases. These are only few
instances to indicate the importance of brand names.4
12.4 BRAND NAMING STRATEGIES
There are four brand naming strategies broadly. The following section would describe the pros and
cons of each of these strategies.
12.4.1 Individual Names

Each of the company’s offerings has a name. This policy is followed by Hindustan Lever Limited
(HLL). Its beauty soap is branded ‘Lux’ while the soap catering to the lime segment is called ‘Liril’.
A major advantage of this method is that the company’s image does not get affected by the reputation
of the products. For example, ‘LESANCY’ was launched by HLL. Though the product failed, it did
not have an effect on the image of HLL. This strategy also permits the firm to search for a new name
for each of its product.
12.4.2 Blanket Family Names/Umbrella Branding

This policy is followed by ‘AMUL’. A blanket family name has several advantages. Development cost
is less because there is no need for a separate “name” research or heavy advertising expenditure every
time a product is launched. Further, more sales of the new product are likely to be strong if the
manufacturer has a good image. AMUL is in a spree to extend its name to food products from
established dairy products. According to Al Ries and Jack Trout, the strategy of umbrella branding
Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Naming Strategies 115
should be advocated only when there is high competition.5 The umbrella branding strategy also
needs to take into consideration the similarity of the original brand with the new brand, which carries
the same brand name. This phenomenon could be observed with Bennett, Coleman & Co. Ltd. (The
Times of India) when it extended to FM radio with a new brand name ‘Radio Mirchi’. The mother
brand name should not be carried for new products if it has a negative image associated with the new
product.6
12.4.3 Separate Family Names for all Products 5

This policy is followed by Nestle. Their snack varieties like noodles, soup, sauce come with the name
‘Maggi’, while the instant coffee comes with the name ‘Nescafe’, bar chocolates come with different
names, and food items like curd, butter, etc. carry the name ‘Nestle’. Another example is that of
Living media group. Its ‘news’ magazines come with the tag ‘Today’(‘India Today’, ‘Business Today’)
whereas its magazine on information technology comes with a new name ‘Smart Inc’. As seen in this
example, when a company produces an entirely different product it is not desirable for it to use a
single blanket family name.
12.4.4 Corporate Name Combined with Individual Product Names 5

This policy is followed by the Tata group. Most of its products, barring a few (like ‘Westside’) bear its
identity—Tata Indica, Tata Tea, Tata Salt, Tata Chemicals, etc. These names convey that these brands
are from the house of TATAs whose image stands for trust, confidence and comfort, and their individual
name brings out the uniqueness of the new product.
12.5 THE NAMING PROCESS
After choosing a strategy, names need to be arrived at following a structured process or the brand
might face problems including those quoted in Section 12.3. There are various approaches for naming
a brand. Some of them are listed below.
12.5.1 Approach 11
The following process is suggested based on the study of the naming process done by Chiranjeev Kohli
and Douglas W. Labhan. Brand naming is a five-stage process, which comprises of the following stages.
Figure 12.1 Five-stage process of choosing a brand name

12.5.1.1 Decide the objectives of branding Decide the branding strategy that may follow
any one of the four branding strategies. If the brand name carries an individual product name then it
is necessary that the brand name states something about the product and its differentiation aspects
clearly. The discussion for the rest of the process proceeds with the assumption that the strategy
involves an individual name either with or without a corporate name.
12.5.1.2 Create a pool of brand names Some of the methods/sources that could be used for
generating a pool of suitable brand names are individual creative thinking, brainstorming, existing
names of other products marketed by the company, existing bank of names within the company,
specialized naming firms, market research companies, ad agencies, employees suggestion, customers
suggestion, and running contests which would award the person coming up with the most suitable
name for the company.
12.5.1.3 Evaluate the generated names The parameters which could be used to evaluate the
brand names are relevant to the product category, connotations and images that are possible, overall
appeal, ease of remembering the name, ease of recognition, ability to create a uniqueness, ease of
trademark registration, versatility for extension with other products (e.g. can AMUL brand be extended
to biscuits), most importantly the ease in which it carries over to other languages, and strike an
emotional chord since most of the buying decisions are made on emotional basis.
12.5.1.4 Choose the final brand name Applying the above set of measures and also taking
into account the local language of the place in which the product is going to be launched, a set of
probable brand names are chosen for the product. Brand name/names so obtained by a survey are
subjected to association techniques, which is used to test the relevance of the name to the product.7
12.5.1.5 Register the trademark The set of names are prioritized and submitted for a trademark
search. At the end of the process, the product is allocated a suitable brand name and the trademark is
registered.
12.5.2 Approach 2
This approach of naming is suggested by Namestorm Company specializing in brand naming
consulting works. This approach follows a customer centric approach unlike the previous one. The
steps involved in this process are gathering of required information, ideation process-team and
individual creativity, iterative process of feedback and evaluation, and registration process. In the
information gathering stage, in-depth interviews are conducted with the management, distributors
and few of the potential customers regarding issues such as overall branding strategy, the naming
strategy, the communication aspect of the brand name, key differentiators, the target market, competitors’
brand names, how the brand name would be used in future, the current positioning platform, brand
personality and strategy, and other related issues. The ideation process is the same as in the previous
approach except that it is carried out by individuals (comprising of people from senior management)
separately and as a team. The set of generated name lists are evaluated and corrections, if necessary,
are incorporated through feedback. The feedback could be from a team comprising management
personnel, distributors, and customers. The names are then checked against legal or registration
issues. A final feasible name is then chosen and registered.8

12.5.3 Approach 3
This approach consists of the following stages for generation of names. The evaluation and selection
of final name is the same as in the above mentioned approaches.
12.5.3.1 Begin from the selling proposition Write down an advertising headline, or a
positioning statement, or a theme line for your product. Then work towards a name that reflects the
same. For instance, consider a chain of coffee pubs, which pitches on refreshment. The chain could
be named ‘Refreshingly Yours’.
12.5.3.2 Spell it differently Try a different spelling for the name like ‘Refreshingly Yours’
could be spelled as ‘Refreshingly Urs’. In the same way, the entertainment channel ‘Before You’ spells
as ‘B4U’.
12.5.3.3 Go against the competitors Take an opposite stand from that of the competitors. For
instance, if the competitors’ brand names sound masculine try feminine.
12.5.3.4 First generate, then judge Generate as many names as possible before evaluating
them. Try random ideas like opening a dictionary to some random page, say 23 and try working with
a word in the fifth line. Consider the possibility of Acronyms. They can be a huge success provided
they are appropriate as in the case of CRY (Child Relief and You).
12.5.3.5 Create a visual impact How would you visually represent your product and how
would it signify the name? For example ‘Liril ICY BLUE’ package and the color of the soap convey
the coolness of the ‘ICE’ the product is positioned to provide. This needs to be thought over during
the generation stage itself to create the required impact or whichever name could be generated visually
would be given a higher priority in the evaluation stage.9
12.6 THE DOS AND DON’T S WHILE NAMING BRANDS

1. Avoid being carried over by something that is ear catching or eye catching. Lot of companies
during the dot com boom fell for the fancy of ear catching names such as Fatbrain, Foofoo,
Quokka, etc.
2. Avoid names that would obviously cause trademark or copyright infringements.
3. Sometimes personal names like the name of the promoter might portray a boring image. There are
exceptional cases like that of the products from the TATA Company.10
4. Names should be as short as possible within reason or availability. It is easier to retain and recall
a name that is shorter. Examples could be brands like IBM, Nike, Ford, Lux, Sony, etc. But it
should be borne in mind that the converse is not necessarily true that the brand names that are
long and difficult to pronounce would fail to make an impact.
Examples of this case would be Ernst & Young, Price Waterhouse Coopers, and Larsen & Toubro.
But all these companies have shortened their names to E&Y, PWC and L&T respectively.11
5. It should be easily pronounceable and pleasing to ears.
6. It is better to build a short story around the name to aid its popularity.6

12.7 BRAND NAMES— WHAT THE RESEARCHES HAVE GOT TO SAY?
A study conducted to measure the impact of brand names on brand preference resulted in the
following table.
Table 12.1 Impact of brand names on brand preferences
Product Type Meaningful Fitting Indian Non-Indian Perception Image of the Users
Type A Yes Yes Yes High priced Young, modern and
good quality wealthy
Type B Yes Yes Yes Low priced Modern, older and
medium belongs to lower
quality income groups
Type C Yes Yes Yes Yes Medium priced Middle-aged
medium quality Middle-income
group, moderately
modern
Type D No No Low priced low Less modern, older
quality and belongs to lower
income groups
Products can be divided into four categories based on their names. The columns named
‘meaningful’, ‘fitting’, ‘Indian/Non-Indian’ indicate the properties possessed by the names of the
products under consideration. The ‘perception’ column indicates how consumers perceive the products
with such names and the ‘image’ column refers how the users of such products are perceived.12
Zinkhan and Martin (1987) found that the consumers prefer products with ‘typical’ brand names to
those with ‘atypical’ for that product category. For instance, ‘Mishu’ which was found to be more
typical for cameras, was preferred over the name “Pilot” which was uncommon.1 A study on relation
between brand name linguistic characteristics and brand name memory found that three linguistic
variables were positively related to brand name memory which are semantic appositeness, paronomasia
(puns or word plays), and initial plosives but only for less familiar brands. Two linguistic variables
showed main effects for brand name memory—unusual spelling (positive) and blending (negative).
Semantic appositeness is the fit between the brand name and product attributes or function. Initial
plosives are hard initial consonants with which the word starts. In a study that looked at the top 200
brands over a five-year period, it was found that the brand names beginning with the letter k (an
initial plosive) were more prevalent than brand names beginning with other letters. There are evidences
which suggest that phonetic symbolism may affect beliefs about brand attributes and evaluations.
Yorkston and Menon (2001) showed that the attributes (e.g. leg room, trunk space) of a fictitious
automobile brand were rated as larger when the brand name used the phonetic /ä/ sound
(e.g. Dromlie) than when it used the phonetic /i/ sound (e.g. Drimlie). Also, Heath, Chatterjee, and
France (1990) found that harder sounds led to increased beliefs that specific attributes of a given
product would also be harder and/or harsher. Alpha-numeric brand names (e.g. Nokia 3315) have a
positive impact for technical products and for those that are chemically formulated.13

12.7.1 Genericization
It is the process by which a brand name undergoes a series of grammatical and semantic changes to
become a common class-noun representative of the entire semantic class to which that product belongs.
The Indian example of this would be the case of ‘Dalda’. ‘Dalda’ which is a vanaspati brand represents
the whole product class. Xerox photocopier is another example of genericization. Research shows that
genericization will occur in novel semantic classes and is more pronounced with shorter brand names.
Also research supports the hypothesis that for a brand name to become generic, there must be an
association to a single product.14 When two or more brands are present in the same category, it
generally doesn’t happen. However, if a company comes up with an innovation and if it’s the only
brand in that product category, like Sony’s ‘Walkman’, the chances of it becoming a generic are more.
12.8 ISSUES IN MAINTENANCE OF BRAND NAMES—

FIGHTING THE FAKES 15,16
A study conducted by AC Neilson reveals that 80% of the consumers realize that they have brought
a counterfeit or a fake product only after they have consumed it. This leads to a possibility that there
may be a large number of those who never realize the same even after consumption. Almost all
product categories have a reputation for carrying counterfeit products in a country like India. It is
found that the problem of fake products is more prevalent in the North especially in the states of
Delhi, Punjab, Haryana, and UP. Procter & Gamble found out that 54 strips in every 100 strips of
Action 500 being sold in the market were counterfeits. Counterfeits and pass-off products reportedly
affect the sales of several brands to the extent of 20–30%. Counterfeit products contribute to 28%(
Rs.17 billion) of sales of the Rs.60 billion FMCG market and government loses almost Rs.6 billion in
revenues every year that would have been generated on excise, octroi, sales, and income taxes if these
sales went to the original brands. Companies, besides loss of revenues, loose customer loyalty due to
poor quality of the fake brands. This problem is not just confined to FMCG. It is rampant with any
other product. For instance, five out of every six Yamaha bikes sold in the world are fake brands.
Federation of Indian Chambers of Commerce and Industry (FICCI) has formed a brand protection
committee to prevent this problem. The committee has come out with similar findings—Counterfeit
FMCG brands account for 5–15 percent of the original brand sales volumes, with as many as 20 lakh
dealers involved in the marketing of these products. The members of the committee are directors of
leading consumer non-durable companies such as P&G, HLL, Marico, Smithkline Consumer, Britannia,
Indian Shaving, and research agencies such as AC Neilson and CERC. The committee works in
close conjunction with industries, consumer associations, trade associations, and regulatory authorities
to achieve its objective of eliminating counterfeit and pass-off sales in the country. Enforcement of
applicable laws, publicizing negative economic impact of counterfeits and creation of consumer
awareness, and taking action against errant manufacturers, wholesalers, distributors, and retailers
with the help of regulatory authorities are the proposed action plans of the committee.
The brand name is just a reflection of the company’s perspective of the brand. A brand manager
needs to go much deeper to understand the purpose of the brand’s existence. He/She before taking
strategic decision needs to know the reason behind the birth of the brand. The next chapter is
dedicated to this topic of ‘Brand Identity’.

REVIEW QUESTIONS
1. Explain the conventional classification of naming.
2. What do you mean by “Destination Branding”? Give examples.
3. What is the major advantage of having individual names for brands? Validate your answer with
examples.
4. Define umbrella branding.
5. When will you go for separate family names for all products?
6. Find out the naming strategies used in following brands:
a) TATA salt b) TATA Indica
7. Explain the five stages of naming process.
8. Explain the customer centric brand naming process.
9. How will visual presentation signify the brand name?
10. Explain the concept of genericization with examples.
11. Explain the relationship between customer preference and brand names.
REFERENCES
1
http://www.mediatreks.com/name.htm
2
http://www.ipmall.fplc.edu/hosted_resources/bp98/watanabe.htm
3
http://www.namewave.com
4
http://www.ecomhelp.com/KB/Branding/kb_brand-naming.htm
5
Kotler, Philip., Marketing Management, PHI Publication, 11th edition, 2003, p.425.
6
Sehagal, Gaurav., and Karthik Nagabhushan, What’s in a Name?, IMT Ghaziabad, can be accessed
at www.indiainfoline.com/bisc/imtart20.html
7
http://www.cross-tab.com/clients/search.asp
8
http://www.namestormers.com/creating.html
9
http://www.namingnewsletter.com/33Tips.htm
10
http://www.manxweb.com/resources/naming.pdf
11
“Keeping the abbreviations” can be accessed at www.icfai.org
12
Sharma,Vivekanand., A Brand is More than a Product, N ITI E, can be accessed at
www.indiainfoline.com
13
http://www.ameritest.net/images/upload/raimg 2003714184228344.pdf
14
Clankie, Shawn., On Brand Name Change: A Theory of Genericization, can be accessed at
http://saussure.linguistlist.org/cfdocs/new-website/LL-WorkingDirs/pubs/diss/browse-diss-
action.cfm?DissID=118
15
Modi, Toral., “Fighting the Fakes”, can be accessed at http://www.indiainfoline.com/fmcg/feat/fith.html
16
Mitra, Amit., Fakes of Big FMCG Brands Make Fast Buck, can be accessed at http://www.blonnet.com/
2003/08/06/stories/2003080600150600.htm

Positioning is about placing the brand in the mind of the customer and communicating the
relevant values to the consumers with respect to other brands that operate in the market, making it
distinguishable from competing brands. Identity is much more comprehensive that it is more than a
positioning statement. It does not necessarily compete with other brands. Positioning can be changed
even in a short span of six months to one year whereas brand identity remains for quite a long time.
Changing identity is not as easy as changing a positioning statement. A brand does not exist
representing, just as a set of physical attributes but has intangible attributes and values also, which are
represented by personality, symbolism, organizational aspects, product, etc.
Figure 13.1 Physical attributes of brand identity
13.3 DIMENSIONS AND IDENTITY 2
Aaker defines brand identity as the sum of the brand expressed in terms of product, organization,
person, and symbol. Brand identity structurally has two dimensions, the inner core identity and the
outer identity containing all the above dimensions. A product, which may be an object, service,
person, place, organization, event, etc., is to satisfy a need or a want. Any product would only have
physical attributes, whereas a brand is more than a product that includes the country of origin,
perception, the organizational attributes and associations, brand users, emotional benefits, and symbols
among other things. A comprehensive view of the brand identity according to David Aaker’s framework
is shown in Fig. 13.2.3

Brand Identity 123
Figure 13.2 David Aaker’s framework of brand identity
13.3.1 Brand as a Product

Here, we see a part of identity in terms of product and its attributes. These include the impact of
product class association, various attributes of the product, the perceived quality of the product from
the consumers, the occasion for the usage of the product, the type of users using the product, and the
country of origin issues.
13.3.2 Brand as an Organization

The corporate identity, the organizational values and associations as well as the general organizational
attributes also form a part of identity.
13.3.3 Brand as a Person

If the brand were to come alive as a person or an animal or anything, what would it be is what we are
trying to define as personification. Personification, in the literal sense, means making a non-living
thing as a living thing and viewing it as a person. Here, the brand, a non-living thing is visualized as
a person or an animal, and the attributes and qualities associated with that person or animal are
supposed to form part of the brand’s identity too.

13.3.4 Brand as a Symbol

The visual descriptions that come to the mind when you think of a brand is called visual imagery, the
metaphor and the heritage that depicts any classical or former associations with the brand all form part
of the symbolism. Visual imagery is that aspect of visual association when we think of a brand like
coca cola’s classic bottle.
Brand identity of Pond’s Let us take the example of Pond’s brand and analyse the brand identity
with the above parameters.
1. Country of origin Though Pond’s originated from the USA, it was always thought of to be an
Indian brand and its preindependence launch was yet another factor apart from its indigenous
adaptation.
2. Corporate association Pond’s make cosmetics and skin care products are the corporate association.
It is also a quality product from HLL.
3. Brand users Feminine gender.
4. Emotional benefits Skincare, freshness, fragrance, etc.
5. Self-expressive benefit Self-confident woman.
6. Symbols Flowers, Pink and Lavender colors, advertisement or the new style of packaging.
Rarely the three petals also come into the mind of the consumers.
Brand identity has two dimensions—core identity and extended identity. Both of these have
product, organizational, personality, and symbolic perspectives. It does not mean that a brand
should reflect all these perspectives.

Brand Identity 125
Table 13.1 Brand identity
Perspective Dimension Remarks

Product class Brand name evokes the name of
Brand as a Product association product class skincare and
cosmetics.
Attributes Pond’s protects the skin, nourishes

and is sensitive.
Quality Quality products at an affordable

price.
Users Young vivacious women and

matured girls.
Country of origin Supposed to be India

Organization Organizational HLL stands for quality. Largest
attributes packaged mass consumption goods
company.
Brand Personality Brand as a person Self-confident and achiever.
Matured, assertive but not
aggressive woman.
Symbol Metaphor Pink and lavender colors.
Heritage A 50 years cosmetic brand in India.
13.4 INNER AND OUTER IDENTITY 1

A brand will have many layers, just like the onion. We need to do the onion peeling and find out the
core identity of the brand. At the superficial level, the layers of onion represent the extended identity
of the brand. Core identity represents the fundamental values and beliefs that it stands for. It is the
essence of the brand—the heart and soul of it. It may be drawn from the organizational values also.
Though core identity may be reduced to a few words, a statement or slogan does not make an effective
identity representation. Thus, Lux soap is for complexion and beauty is the core identity. However,
core identity also does not convey the brand completely and hence, the extended identity elements
convey the brand’s identity in totality. All those elements in marketing that have an impact on the
brand identity are included in extended identity. Let us take the example of Pepsodent toothpaste.
The core identity would be germ fighting ability, with extended identity being a quality product from
HLL, and 24 hours protection. The functionality would be some of those things conveyed through
the product, packaging, and advertisements like light pink color paste, makes young ones eat whatever
they want, etc. Value proposition talks about the functional, emotional, and symbolic benefits. Let us
take the example of Pond’s again and it works out this way.
Core Identity It is the essence of a brand. Ponds is essentially a feminine skincare product and
makes you feel as an achiever and self-confident person. All the advertisements of Ponds show only
women as the users and reflect the ‘beauty in you’ concept by making them confident.

Brand Identity 127
13.5.3 Culture
The country of origin of the brand that is seen as a product attribute forms the culture. Japan and
Taiwan are known for the electronic products and hence any brand from these countries carries these
values apart from its own values. Likewise, France is known for wine and perfumes and any brand
that fall into these categories carry the image associated with France.
13.5.4 Relationship
It is the understanding between the consumer and the organization. For instance, the relationship of
the consumers with Maruti is that of serviceability.
13.5.5 Reflection
This is the consumer’s perception of the brand and its values. For example, Bata stands for a long
lasting shoe or chappal.
13.5.6 Self-image
This is about what the consumer thinks about himself or herself. One who uses Nirma is aware that
he/she is conscious of price and value. One who uses Ariel washing powder, essentially is telling
oneself that he/she is quality conscious and not that much particular about price.
Figure 13.4 Jean–Noel–Kapferer’s six-sided prism for brand identity
13.6 HOW TO FIND IDENTITY?
Now, how do we find out the brand identity of any brand? In reality, it is very difficult to find out the
brand identity of any brand. Only those product or brand managers who have created the brand can
tell us about the actual identity of the brand. However, for heritage brands, the values and identity are

mostly reflected in the advertisements, the brand extensions, and the communication aspects of the
brand. The brand managers who might have created the brand with some values and beliefs might
not be there. In fact, for brands with some 100 years, identity might have changed over time. The
only way is to qualitatively try to identify by way of advertisements, assessing brand extensions, etc.
When one launches a new product, the identity need not be based on the physical attributes but has
to stand for some values, emotions, and beliefs.
13.7 MULTIPLE IDENTITIES
Now, we have defined identity mostly as the reason for the brand coming into the market. We also
stated that identities can change over a period of time. Now, there is yet another possibility that the
brand has multiple identities. Worldwide, Tide detergent brand is perceived as a premium brand and
Ariel brand as a middle-class brand, whereas in India, Ariel is a premium brand and Tide happens to
be perceived as a middle-class brand. Several multinational firms use a core identity of their products
in different nations. Though not all, foreign brands in India want the Indian customers to consider
them as being Indian brands. Thus, the brand identity is adapted to the local conditions in most
transnational brands. But multiple identities cannot be completely different from each other. They
should reflect some common associations, some common values or some reflections of the other
identity. The uncommon features of multiple identities should not be inconsistent. Different elements
of identity can be highlighted in different identities without clashing with the other identity.
13.8 CONCLUSION
Brand identity plays a significant role in making decisions on brand extensions, brand image, etc.
The value that a brand stands for, should be reflected in the brand communications and hence,
knowing the identity is very essential. It also forms an essential part of building up the brand equity.
Having known the essence of the brand, the brand manager now needs to understand what the
market perceives about the brand. The next chapter throws light on this issue.
REVIEW QUESTIONS
1. Differentiate between brand image and brand identity.
2. Define brand image.
3. Explain the framework of David Aaker for brand identity.
4. What are the two dimensions of brand identity? Explain with examples.
5. Explain the Kapferer’s prism on brand identity.
6. It will be difficult to find out the brand identity of any brand—Comment.
7. Will brands have multiple identities across the countries? Justify your answer with examples.
8. Define symbolism.
9. Analyze the brand identity of the following brands: a) Lux b) Ariel c) Economic Times.

Brand Identity 129
REFERENCES
1
Crispell, D., and B. Kathleen “What is in a brand?” American Demographics, May 1993,Vol. 31–32,
pp.26–29.
2
Aaker, David, Building Strong Brands, Free Press, 1996.
3
Moorthi, Y.L.R., Brand Management—The Indian Context, Vikas Publishing House, 1999, p.130.
4
Ibid 3, pp.130–131.

the legendary brand TATA. Ponds is pitching on the user-driven image. It focuses on the ‘Self-
confident and achievement-oriented’ women to build the image of their product. An herbal product
like Medimix has predominantly a product-driven image. It pitches on the ‘18 herbs’ used in the
product and its 60% coconut base. According to Sengupta, brand image, can also be viewed as the
totality of physical, psychological, and functional aspects of the brand. For instance, the brand image
of Lakme, is expressed in three dimensions as follows:
Physical aspect : Variety of shades/colors
Functional aspect : Beautification
Psychological aspect : Youthfulness and Confidence.
Brand image can also be examined by the framework given by Meryl Paule Gardner. For instance,
the brand image of Amul as explained by this framework is given below.
Brand feature : Quality and purity
Brand information : Availability
Brand user : Consumer who wants Indian taste
Brand evaluation : Reliable
Company statements : GCMMF dairy is closely associated with the benefit of farmers.
Imagery is the consumer seen from the perspective of the product. For instance, the imagery of
the user of Ponds is an Indian woman who is an achiever and is confident to step out and take the
world on. She is a matured person and is assertive not aggressive. Thus, Ponds has a secular imagery
since it goes against the tradition and gives a new dimension to beauty and womanhood. Sacred
imagery can be seen with ‘Woodward’s Gripe Water’ where the tradition of using the product for
generations together is pitched on. The act of consumption is seen as a ritual being followed across
generations.
A mediating image mediates between the sacred and secular imagery as is the case with ‘Hindustan
Petroleum’. The club HP advertisement encompasses both the sacred image of showing pure and
accurate volume of petrol coupled with the secular image of the family and service levels in the petrol
station.
14.3 TECHNIQUES USED FOR IDENTIFYING THE BRAND IMAGE
Before any discussion on any of the techniques involved it must be borne in mind that different
consumers hold different images about the same brand depending on their respective experiences
with the brand. What we are trying to identify here is the most common image/images of the brand.
14.3.1 Brand Networking Technique3
Here the consumers are asked to think about the brand and draw a network diagram based on their
experiences with the brand. The name of the brand is written in a circle at the centre and is connected
with the other circles by lines which carry a ‘+’ or ‘’, sign indicating their favorable or unfavorable
experience with the brand. Apart from the circle at the center, all the other circles represent the flow
of thoughts in minds of the consumer when they think about the brand. The brand image is derived
from circles, which are closer to the center and that which are common to all consumers. For instance,
consider Fig. 14.1. This is a brand network drawn for the brand ‘AMUL’ by one respondent. The
closer circles which represent ‘GCMMF’, ‘Milk’, ‘AMUL Girl’, ‘Cheap’, are used to interpret the
Brand Image 133
brand image. Strictly speaking the brand image of ‘AMUL’ perceived by that person should be
interpreted taking the whole network diagram into consideration. Since we would like to arrive at a
commonality between number of respondents, we stop with the closer circles.
Figure 14.1 Brand networking technique

The associative strength4 is measured by percentage of people who held the same association.
For instance, if AMUL–milk pair was associated by 30 people out of 100 then associative strength of
AMUL and milk is 3. Similarly, the associative strengths of the other pairs can be obtained and is
indicated in Fig. 14.2. As mentioned earlier, the associative strengths of only the closest circles are
considered. The pairs with highest associative strengths give a description of the brand image.

Figure 14.2 Brand networking showing associative strength

Thus, the brand image of ‘Amul’ can be considered to be ‘as the little girl who delivers value for
many products which are mainly milk based’.
14.3.2 Focus Groups
A focus group discussion could be effectively used to identify images perceived by the consumers for
the brand in focus. The typical focus group discussion can be followed by photo sort, wherein customers
are asked to choose photos that best represents the products/brands. The mind mapping technique
could also be used in conjunction with the photo sort in a focus group discussion.5
14.3.3 Constructive Techniques 6
Constructive techniques such as word association, sentence completion, and scenario projection can
be used for identification of brand images. In case of word association, the brand name or advertisement
slogan is given and consumers are asked to state the things that come to their mind. Sentence completion
is a slight modification where consumers are given an open-ended statement like “I use Nokia mobile
because…”. In scenario projection, respondents are shown some scenarios and asked to state their
responses. For instance, respondents may be shown a scene where a group of youngsters are chatting
and sharing ‘Ruffles’ potato wafers. They may then be asked to imagine themselves to be a part of the
crowd and asked questions relating to the experience of having ‘Ruffles’ in that situation.
14.3.4 Factor Analysis
A set of variables is listed and the consumers’ opinions are captured on them on a suitable scale.
Factor analysis is then used to identify the primary factors, which influence the image of the brand. It
should be noted that factor analysis is a data reduction technique and hence the initial set of variables
in the questionnaire would be grouped into appropriate factors. The factors which explain the maximum
Brand Image 135
variability of the sample could be considered as those explaining the image of the brand. For instance,
Table 14.1 is a hypothetical table, which indicates the perception of patients towards H-World, the
chain of hospitals. A sample list of 16 variables along with the response of a single respondent is listed
out here.
Please write the appropriate rating for the statements given in the table below for the hospital
chain ‘H-World’. The ratings need to be given on a scale of 1–5 (1– Partially Agree, 5–Completely
Agree).
Table 14.1 Statement on the hospital chain H-World
Variables Rating
Satisfactory timings for outpatients 5
Satisfactory case handling of the doctors for outpatients 4
Prescribed medicines are satisfactory 3
Hygiene is maintained good in the hospital 4
The fee charged by the doctors for outpatients is 2
justifiable
Surgery charges and bed charges are justified 3
Patients are treated properly by nurses and other 5
attendants
Doctors come on time. 3
Medicines at medical shop in the hospital are available at 2
nominal charges
Consulting after surgery is done satisfactorily 1
Canteen facilities are proper 4
Hospital is in a noise-free zone 5
Commuting to hospital is not an issue 5
Visiting hours are comfortable 5
Hospitals have all the latest equipments needed 2
Lab facilities seem to be satisfactory 4
On obtaining the data from all the respondents in the sample, the data is input for factor analysis.
There are two important things to be observed in the factor analysis output. One is the ‘Eigen values’
obtained along with ‘Percentage of variance’ explained by each of the factors and rotated factor matrix.
The Eigen values would give the variation explained by that factor. The factors with Eigen values
greater than one would explain maximum variation. This could be verified with the ‘percentage of
variance’ column. The rotated factor matrix would give an indication of those variables, which have
a high loading on the factor. In an unrotated factor matrix, some variables may have high loading on
both the factors and hence to avoid this, matrix is rotated. For the example quoted in Table 14.1,, the
Eigen values of the extracted factors are given below.

Table14.2 Factor analysis of eigen values
Factor Eigen Percentage of Cumulative

Value Variance Percent
1 3.2 45.71 40
2 2.8 40 85.71
3 .6 8.57 94.28
4 .3 3.57 97.85
5 .08 1.14 98.99
6 .06 .85 99.84
7 .012 .16 100
We can consider the first two factors since they explain most of the variance and their eigen
values are also greater than 1. The rotated factor matrixes for these two factors are given in Table 14.2.
The initial factor analysis resulted in variables, which had low loadings on either of the factors. So
such variables were removed and factor analysis is done and Table 14.2 is thus obtained with reduced
number of variables.
Table 14.3 Factor analysis with reduced number of variables
Factor 1 Factor 2
V1 .83 .25
V2 .73 .10
V3 .02 .53
V4 .05 .56
V7 .25 .85
V8 .52 .2
V10 .56 .31
V11 .31 .62
V12 .41 .75
V13 .12 .86
V14 .41 .92
V15 .3 .51
From the above Table 14.3, it can be interpreted that the hospital has two important factors
influencing its brand image—Service quality for outpatients and Service quality for inpatients. This is
because the variables V1, V2, V8, V10 which are related to service level for outpatients have a higher
loading on factor 1 and V3, V4, V7, V11, V12, V13, V14, and V15 which are related to service level
of inpatients have a high loading on factor 2. In other words, consumers prefer the hospital because
the service for both inpatients and outpatients are satisfactory. Another noteworthy feature is the
removal of variables V5, V6, and V9, which spoke about the charges, charged by the hospital for its
services. This indicates there is no impact made by the charges on the consumers. Hence, the brand
image of the hospital is its service quality.
Brand Image 137
Identifying brand image is a complex task since it deals with the abstract attributes of a brand.
Sampling errors are prone to occur in such researches, since the consumers may not be able to easily
express their perceptions on the brand. This problem can be easily tackled by giving a more concrete
form for their expression. This is achieved by the concept of brand personality. The next chapter
details on the same.
REVIEW QUESTIONS
1. Brand identity is the cause and brand image is the effect—Explain.
2. Branding = Brand Image + Error. In this equation, what do you mean by error?
3. Define brand image.
4. Give any two examples of brands which are having provider-driven image.
5. Explain the concept of user-driven image with examples.
6. Analyze the brand “AMUL” by using the framework developed by Meryl Paule.
7. Explain the brand networking techniques for identifying the brand image with examples.
8. What are the constructive techniques used to identify the brand image?
9. Explain the application of factor analysis in identifying the brand image.
REFERENCES
1
Sengupta, Subroto., Brand Positioning Strategies for Competitive Advantage, Tata McGraw-Hill, 1990, p.114.
2
Moorthy, Y.L.R., Brand Management—The Indian Context, Vikas Publishing House, 1999, pp.122–126.
3
Ibid.2, pp.50–52.
4
Schultz, Don E., and Beth E. Barnes, Strategic Brand Communication Campaigns, McGraw-Hill,
5th edition, 1999, p.262.
5
http://www.sageresearch.com/ResearchGlossary.htm
6
Aaker, David., Rajeev Batra, John G. Myer, Advertising Management, Prentice-Hall of India,
4th edition, pp.261–262.

Figure 15.1 Brand anatomy of coke
From the above diagram, the interpretation of the personality of coke can be done as ‘A youthful
person in a joyous environment’. The fizzy drink stands as a main attribute to indicate the personality.
The other way of looking at a brand personality is looking into its emotional, sensory, and rational
aspects. For instance, Table 15.1 shows the sensory, emotional, and rational aspects of the Santro car.
Table 15.1 Brand personality analysis
Sensory Emotional Rational
Small Light-hearted Manoeuvrable

Light Convenient Quick
Fresh Youthful
Bubbly Dependable
Fun car

Brand Personality 141
15.3 WHEN IS IT NECESSARY TO HAVE A BRAND PERSONALITY? 1
Building a brand personality takes a lot of resources both monetary and non-monetary. Hence, it is
important to know whether it is essential or not to develop a personality for a brand. Brand personality
is important when the product is socially conspicuous (products like automobile, clothing) or when the
availability is scarce (as in the case of luxury goods) or when it is a complex product (in case of hi-tech
products, consumers rely on image rather on the features of the product which is a bit difficult to
comprehend) or when the target audience is highly ‘self-conscious’. Self-conscious individuals would
like to seek others recognition for all their actions. Hence, if the target market comprises of ‘self-conscious’
people it is better to build a personality that would suit their needs. It is also essential to note that there
are three levels2 of brand personality building—the sleeping brands, brands where personalities are
cued, and the mascots. In sleeping brands, no concerted efforts are taken to build a personality. They
generally belong to product categories, which experience very less competition or the players are
unorganized. In the second level of brand building, some of the personality traits are cued and the rest
is left to the imagination of the consumers. For instance, in case of Dove, the image of mildness is
brought to the customer but other traits of the personality are not indicated. In case of the mascots, a
definite personality is shown and personality building efforts are borne maximum by the marketer. Air-
India ‘Maharaja’, ‘AMUL girl’, and Onida ‘Devil’ are some of the popular mascots. The only disadvantage
is that after it is built it is very difficult to change it. On the positive side, it makes brand communications
much easier.
15.4 TOOLS TO BUILD/UNDERSTAND BRAND PERSONALITY
15.4.1 Brand Personality Scale 2

A study of 1000 respondents with 60 brands consisting of a total of 114 distinct traits revealed that
brand personality falls under five different factors. Each factor is explained by subfactors. A company
could build a personality based on any one of these traits. The five main personality factors as identified
by Aaker are sincerity, excitement, competence, sophistication, and ruggedness. Table 15.2 shows the
variables that explain each of these factors.

Table 15.2 Analysis using brand personality scale
Sincerity: Characteristics
Down-to-earth Family oriented, Small town, Blue collar,
All American, Conventional
Honest Sincere, Real, Ethical, Thoughtful, Caring
Wholesome Original, Ageless, Classic, Genuine, Old-fashioned
Cheerful Sentimental, Friendly, Warm, Happy
Excitement
Daring Trendy, Exciting, Offbeat, Flashy, Provocative
Spirited Cool, Young, Lively, Adventurous, Outgoing
Imaginative Unique, Humorous, Surprising, Artistic, Fun
Up-to-date Independent, Contemporary, Innovative, Aggressive
Competence
Reliable Hard-working, Secure, Efficient, Trustworthy,
Careful
Intelligent Technical, Corporate, Serious
Successful Leader, Confident, Influential
Sophistication
Upper Class Glamorous, Good looking, Pretentious, Sophisticated
Charming Feminine, Smooth, Sexy, Gentle
Ruggedness
Outdoorsy Masculine, Western, Active, Athletic
Tough Rugged, Strong, No-nonsense
The above table provides a guideline, which could be used in building a personality. A suitable
personality type could be chosen which closely matches with the personality. For instance, a company
manufacturing sports accessories could go for a personality which matches the ‘rugged’ type. Similarly
a brand after it has had a negative publicity could go for a ‘sincere’ personality type to reassure its
customers. This happened in the case of ‘Diary Milk’ after a wave of negative publicity with regard to
its packaging. ‘Diary Milk’ came up with an advertisement campaign with Amitabh Bhachan the
mega star of Bollywood who stands for sincerity and honesty to assure the customers that they have
improved the quality of packaging.
15.4.2 Three Models to Build Brand Personality 2
Aaker states three models to explain the value delivered through brand personality. The three models
are self-expression model, relationship basis model, and functional benefits representation model.
Self-expression model states that the consumer sees the brand as the kind of person he/she is or wishes
to be. This is the case with Royal Enfield’s Bullet. The rider is considered to be very masculine when
he rides the bike. Bullet’s personality is one that represents a ‘macho’ character. In case of self-
expression model there is a motive of expressing the ‘self’ to others in making the purchase, whereas
in case of relationship basis model the liking to associate with a personality exhibited by the brand
drives the purchase. The consumer wants to establish friendship with the brand and the brand need
not represent their characteristics or their aspirational values. ‘Eureka Forbes’ is seen as a friend for
life and would fit this explanation of brand personality. In functional benefits representation model,

the brand personality is used as a vehicle to state the benefits of the brand. Onida devil is a perfect
example to substantiate this. Neither people want to associate themselves with the devil nor do they
want to express themselves ‘as being with the devil’. However, this devil was very effective since it
portrayed the ‘hi-tech’ nature of the brand. Brand Managers can suitably choose an appropriate model
(one of these three) as dictated by the brand identity or any other factor to project a personality.
15.4.3 Building Brand Personality via the 4 P’s and Packaging 2,3
The 4 P’s of marketing—product, price, place, and promotion along with packaging needs to be
effectively handled to build a personality. For instance, consider a brand of ‘packaged water’ named
‘Neer Ganga’ with an identity of being pure and brought from the ‘Himalayas’. The company wants
to build a personality for its brand—‘a saint (‘Rishi’) meditating peacefully’. This could be effectively
reflected in the product-related features such as the water being a little tastier, very clear, the bottle
having a ‘eye soothing’ color for the wrapper, etc. A ‘Rishi’ is considered to be sacred, pure, etc.
Hence, the price should be matched with that of the competitors. The advertisement should support
this personality. The ‘Himalayas’ or a place similar to Himalayas needs to be shown. The jingle cannot
be a jazzy one. It needs to be soothing. The whole ad should leave a peaceful mark on the consumers’
mind. Other communication aids like the logo or symbol used should be in tandem with that of the
personality ‘Neer Ganga’. In similar lines, the brand cannot sponsor a beauty show but it will be apt
for it to sponsor a medical camp conducted for the public. It needs to involve in a lot of PR activities.
Even sponsoring a trekking event would turn against the ‘Rishi’. The personality would be looked up
to support something like a ‘yatra’ (journey) undertaken to Kailash mountains. The following
Table4 15.3 gives an idea of how consumers relate to brand personalities when a product/brand
related strategy is implemented.
Table 15.3 Relationship between consumers and brand personalities
Brand/Product Related Activity Cues Obtained
Keeps repositioning its brand No stable personality

Same character kept unchanged Consumers get comfortable with the
personality
High price and exclusive distribution Sophisticated
Frequent Promotions Uncultured and Cheap
Sponsors relevant shows Helpful and Supportive
Offers a lot of warranty Reliable and Dependable
Since advertising plays a key role in building the brand personality we now take separate discussion
on advertisements alone though other elements of marketing mix are also equally important.
15.4.3.1 Building brand personality via advertisements 5 The elements of advertisement,
which can be used for building brand personality are user imagery, endorser, execution-related elements,
and consistency. The image of the endorser tends to get transferred to the brand personality. Hence,
endorser needs to be chosen with utmost care. ‘Arokya’, branded milk in Tamilnadu, is endorsed by
the film personality Radhika who later became popular through tele-serials. The brand personality
which was conveyed in the ad was that of a ‘married woman who is concerned about the health of her

family’. The endorser was appropriate to build the intended personality since her image matched
with that of the personality especially during the times when the ads were run. The user imagery is
built through the users portrayed in the ad. For instance in the ‘Neer Ganga’ example, it would be
appropriate to show a ‘hard-working’ person drinking the water after a hectic day’s work rather than
showing a ‘playful’ youngster drinking it. Ponds dreamflower talc shows young women in their
twenties who have an achievement motive. Similarly, elements such as the choice of music, visual
direction, pace nature of editing, color schemes used, and (in print ads) the color, layout, and typography
play a significant role in depicting the brand personality. ‘Mirinda’ advertisements give a lot of
emphasis on the orange color. Orange color is communicated through the setting, people shown in
the ad, their costumes, etc. The elements of the ads so chosen to portray the brand personality needs
to be consistent over a period of time. This would in turn prove the reliability and validity of the
brand personality.
15.4.4 Building Brand Personality Bottom-up 6

This method takes an entirely different route. The personality here is not used to covey the identity,
rather it enacts what the consumers want from a brand of that category. It uses a four-step process—
defining the target audience, finding out what they need, want and like, build a consumer personality
profile, and creating the product personality to match that profile. It needs to be noted that this
method can be used only for an established brand and not for a new brand. The following methods
can be used to build consumer personality profile.
15.4.4.1 Direct elicitation techniques 7 The consumers are given a questionnaire, which
contains statements describing the brand users along with the characteristics of the brand. The
respondents are asked to rate each of these statements on a suitable scale. The data is then analyzed
using factor analysis to obtain the brand personality as perceived by the respondents. Since, this
technique is a direct one consumers might not give their true opinion.
15.4.4.2 Indirect elicitation techniques The drawback of the previous method is overcome
in this method. Techniques such as word association, sentence completion, scenario projection,
psychodrama, photosort4, personification, personality/uniqueness traits, brand marriage, obituary,
collage, and analogies and metaphors are used to find out what kind of personalities are generally
associated with the brands. Word association, sentence completion, and scenario projection are the
same as explained in Chapter 14. The interpretations are done to bring out a brand personality and
not a brand image. In psychodrama, the respondents are asked to play the role of a brand. They are
then asked questions like “Describe yourself”, “How old are you?”, “Do you belong to masculine or
feminine gender?”, “What are your hobbies?”, etc. In personification8 , consumers are asked to relate
brands to characters, animals, etc. The characters might include any human being living or dead or
it could be fictious, one like that of ‘Mowgli’ (the little boy in the jungle who is the main character in
‘Jungle Book’). For instance, consumers may be asked to relate ‘TVS Victor’ to any animal of their
choice. The characteristics of the animals can then be profiled to obtain the brand personality. For
instance, if they relate to ‘Cheetah’ or ‘Tiger’ it could be the speed they are relating to. If it is a ‘rabbit’
then the vehicle might not have given them any pride in riding it. In personality/uniqueness traits

technique, consumers are asked to describe the personality traits of two or more brands. For instance,
when asked to describe the traits of ‘Rejoice’ and ‘Clinic Plus’ shampoos they may describe rejoice as
kind-hearted and clinic plus as ‘bit aggressive’. In case of brand marriage, the consumers are asked to
find a suitable marriage partner for brand X. This technique would reveal the gender and nature of
both the brands involved. In obituary, the consumers are asked to write an obituary for brands. They
write how they would miss the brand on its death. They may write like “He was a good friend of our
family. We used to enjoy the dinner with him. He was a good cook for our family. Now his absence
would be deeply felt by us for a ‘Garam Masala’ brand”. In collage, a set of respondents are asked to
collect pictures of objects, events, people, etc. that best describes the brand. Analogies and metaphors
are generated by the respondents that best describe the brand.
Once the required image of a brand is built, the brand managers can now look into the aspects
of brand positioning. This is very important since brand positioning gives the relative positioning of
the brands vis-à-vis other brands in the same product category. Understanding the image and positioning
aspects would aid companies in building brand loyalty.
REVIEW QUESTIONS
1. Define brand personality.
2. Explain the brand anatomy approach with examples.
3. Brand personality will be significant, if target audiences are highly self-conscious. Evaluate this
statement.
4. What do you mean by sleeping brands?
5. Write short notes on brand personality scale.
6. Expalin the three models to build brand personality.
7. How can you effectively utilize marketing mix tools to build brand personality? Explain with
examples.
8. Advertisements can play a major role in building brand personality—Comment.
9. Explain the direct and indirect elicitation techniques to build brand personality.
REFERENCES
1
Aaker, David., Rajeev Batra, John G. Myer, Advertising Management, Prentice-Hall of India,
4th edition, pp.259–260.
2
http://www.geocities.com/vedbsen/pw-brandpersonality.htm
3
Chunnawala, S.A., Product Management, Himalaya Publishing House, 1st edition, 1998, p.176.
4
http://www.bus.iastate.edu/mbarone/MKT%20447/2
5
Ibid.1, pp.264–266.
6
http://www.brandingasia.com/columns/temporalthree.htm
7
Ibid.1, pp.261–262.
8
Sengupta, Subroto., Brand Positioning Strategies for Competitive Advantage, Tata McGraw-Hill,
11th reprint, 1997, pp.272–276.

3. Essentially abstract attributes may include prestige of a car, the care taken by a TV, the enthusiasm
given by a soft drink, etc. For example, Maruti pitches on being one with life, having the widest
service network and the trust that it builds. This is reflected in the “Count on us” advertisement
campaign.
16.2.1 Positioning Statement
Positioning statement gives a concrete form of communication and is needed to be included in any
marketing plan. It should be of the form –“To (target group/satisfy the need), our (brand) is, concept
that possess (the point of difference)1” . For instance, a sports shoes manufacturer’s positioning statement
may be –“To health-conscious customers who need relaxing foot wear, ‘Comfort’ range of shoes offers
moisture sucking and feather weight features at affordable prices”. The positioning so developed must
be well communicated to the market. Advertisements are one of the primary ways of communicating
the brand positioning to the target consumers. In an advertising context, positioning signifies a
motivating message communicated convincingly that gives the target customers a reason why they
should think of, act, and remember the advertised product as exclusively able to deliver meaningful
benefits. Consider the case of HDFC bank whose positioning statement is “to offer financial services
across the globe, understanding the different local culture and local ethos”. Hence, their advertisement
communication translates into a line that says—‘The world’s local bank’. Another example would be
that of McDonald’s advertising and marketing campaign in India. It is primarily directed at children,
with a view to them pressuring or pestering their parents to take them to a McDonald’s outlet. The
advertisement slogan, “McDonald’s main hai kuch baat” strikes an emotional note not only to kids
but also to teens and adults. McDonald’s used the kids’ route to get to the whole family. This caption
makes kids recognize it to be a place filled with fun and frolic. Many children now think of burgers
and chips every time they see a clown with an orange hair.2 The “Boom, Boom, Boomer” campaign
of Boomer bubble gum whose brand is synonymous with its super hero Boomerman is another
success story, wherein the advertisement communicated the intended positioning. Yet another example
is the “The Complete Man” caption of Raymond suiting. The ‘power of image’ and ‘value of dressing’
is successfully projected through the advertisement campaigns.
16.3 DETERMINING THE POSITIONING
Brand managers can use multivariate techniques like MultiDimensional Scaling to construct perceptual
maps that show the positioning of the brand. MultiDimensional Scaling(MDS) is a class of procedures
that represents perceptions and preferences of respondents spatially by means of a visual display.
Perceived or psychological relationships among various stimuli are symbolized as geometric relationships
among points in a multidimensional space.3 These geometric representations are often called spatial
maps. MDS aims to visualize the dimensions on which the customers perceive the brand and the
other brands in those product categories. MultiDimensional Scaling (MDS) is a data analysis method
which is widely used in marketing and psychometrics. The aim of the method is to build a mapping
of a series of individuals from a proximities matrix (similarities or dissimilarities) between these
individuals. In the ideal case where we have a matrix giving the distances between some points on a
surface (for example the cities of a country), the MDS allows to rebuild the exact map points (within
about a symmetry and/or rotation). To build an optimal representation, the MDS algorithm minimizes
a criterion called “Stress”. The closer the stress is to zero, the better is the representation.
Brand Positioning and Repositioning 149
The input for MDS can be taken in the form of perceptions or preferences for brands. Both
direct and derived approaches serve the purpose and have their own limitations and advantages. In
direct approach, the similarity judgments are taken and in derived approach, the attribute ratings are
taken as input for MDS. In case, preference ranking is taken as input, then one needs to convert this
data into a proximities matrix and then construct MDS. For all these purposes, statistical packages like
SPSS, SAS or XLSTAT are necessary. In case of similarity judgments, the brands are given and the
dimensions have to be determined by the respondents. The respondents are asked to judge the similarity
or the dissimilarity between brands.4 This has been explained in previous chapters. The input data
for similarity ratings and attribute ratings would be taken in the form as follows:
Table 16.1 Similarity/Dissimilarity matrix
Hamam Pears Lux Rexona
Hamam
Pears
Lux
Rexona
Please rate the following brands on similarity (1 = very similar and 7 = very dissimilar):
Please rate the following brands on the given attributes.1 = Hamam, 2 = Pears, 3 = Lux, and 4 = Rexona.
Cleans effectively__ __ __ __ __ __ Does not clean effectively
Good fragrance__ __ __ __ __ __ Bad fragrance
Good color__ __ __ __ __ __ __ Bad color
More lather__ __ __ __ __ __ __ Less lather
16.4 THE MDS WAY
Here is a real-life5 example of how preference rankings can be used to analyze the brand positioning.
The present aim of using MDS is to obtain the positioning of the current generator set brands on
certain pre-determined attributes/dimensions. These attributes can be obtained either through factor
analysis or through other means. Respondents are required to rank the brands from the most preferred
to the least preferred based on the given set of attributes. The brands are ranked on the basis of the
following attributes:
1. Product Range
2. Fuel Consumption
3. Maintenance
4. Operational Cost
5. Price and
6. After Sales Service

Please compare and rank your preferences on the following brands with respect to the attributes
given below. (1 = most preferred and 5 = least preferred):
Table 16.2 Comparison of brand preferences
Makes XYZ Caterpillar Greaves Cummins KOEL Local

Product Range
Fuel
Consumption
Maintenance
Operational
Cost
Price
After Sales
Service
A proximity matrix is needed to perform a MDS analysis, but here we have a customers X
brands table. Therefore, we first need to compute the dissimilarities between products, which was
done by using the “Similarity/ Dissimilarity matrix” tool of XLSTAT software package.
Table 16.3 Similarity/Dissimilarity matrix
XYZ KOEL Greaves Cummins Caterpillar Local
XYZ 0 0.457 0.410 0.394 0.871 0.685
KOEL 0.457 0 0.530 0.418 0.768 0.784
Greaves 0.410 0.530 0 0.731 0.602 0.560
Cummins 0.394 0.418 0.731 0 0.537 0.805
Caterpillar 0.871 0.768 0.602 0.537 0 0.340
Local 0.685 0.784 0.560 0.805 0.340 0
The stress value was found to be 0.061. The closer the stress value to zero, the better it is for the
MDS procedure. Now, the perceptual map is obtained and interpreted as follows:

0.4
0.3 XYZ
KOEL
0.2
Greaves Cummins
0.1
Price 0
-0.1
-0.2
-0.3
Local
-0.4
Caterpillar
-0.5
-0.4 -0.3 -0.2 -0.1 0 01 0.2 0.3 0.4 0.5
Engine Performance
Figure 16.1 Configuration in two-dimensional space engineering performance X price (Stress: 0.061)
The foremost factor to be noted is that six attributes have been merged and a holistic view of the
brands across these parameters is obtained as above across two dimensions, namely price and engine
performance. Hence, the dimensions represent more than one attribute. The spatial map may be
interpreted by examining the coordinates and relative positions of the brands. The spatial maps can be
even constructed in three and more dimensions also. Here, only a two-dimensional perceptual map is
given. Interpreting more dimensions would also be a difficult job.
16.5 IMAGE PROFILE ANALYSIS 6

Image profile analysis is yet another tool used for brand positioning. The attributes of the brands are
listed and the respondents are asked to rate the attributes of all the brands. The input data can be
captured using similar type of tables as Table 16.2. Then a visual illustration across attributes will
show us the positioning.

Figure 16.3 Correspondence chart of PC magazines
16.6.2 Interpretation
Those points that are in the same part of the chart (more so in the broader sense) are quite closely
associated. The examples shown here of associations are highlighted by the ovals. In the right upper
quadrant, the points relating to the attributes ‘Distribution’ (i.e. availability on time) and ‘Worthy
CD’ and magazines PC Quest, and EFY are shown. Thus the other attributes and the magazines
relating to them can also be seen on the correspondence chart. This would suggest that Dataquest is
appropriate for people who want good editorial content, and voice and data, and its magazines are
more niche magazines known for their special issues. Thus, correspondence analysis reveals the
brand’s positioning platform and also informs the manager of what other potential areas are left to
reposition it.
16.7 BY FACTOR ANALYSIS6

The brand ratings may be collected on all variables, which could be relevant to the positioning of the
brand. The main aim of factor analysis is to reduce the initial set of variables so as to express them as
a linear combination of a small set of independent factor or dimensions. The input data in all factor
analysis procedures are the correlation coefficient between the entire pairs of original variables. An
ideal solution should yield the minimum number of ‘Factors’ that conveys all the essential information
contained in the original set of variables. To have the minimum variation and to have the best possible
factor integration is the aim of reducing the factors. The factors thus derived will not correlate to each

other and are independent. Since all variables can be expressed as linear combinations of extracted
factors, the coefficients of various factors are called “factor loadings”. The weights associated with
each factor are also determined. Thus, the ‘factor axes’ with relative weightage corresponds to the
positions of individual brands.
Example9 Here is the factor loading and the importance attached to snacks.
Mean
S.No. Characteristics Factor I Factor II Importance
Rating
1 Filling/not filling 0.317 0.073 2.9
2 Fattening/not fattening 0.424 -0.009 2.64
3 Juicy/dry 0.301 0.125 3.28
4 Bad/good for complexion 0.645 0.104 2.19
5 Messy/not messy to eat 0.204 0.664 2.67
6 Expensive/inexpensive 0.244 0.347 2.43
7 Good/bad for teeth 0.762 0.056 1.53
8 Oily/not oily 0.516 0.24 2.65
9 Gives/doesn't give energy 0.541 0.165 2.221
10 Easy/hard to eat out of hand -0.069 0.796 2.83
11 Nourishing/not nourishing 0.565 0.116 1.7
12 Stains/does not stain clothing, furniture 0.25 0.664 2.55
13 Easy/hard to serve 0.046 0.747 2.87
14 My children like it/dislike it 0.071 0.243 2.86
scale : 1 = extremely important, 2 = very important, 3 = fairly important, 4 = of little
importance
Figure 16.4 Factors loading of the attributes
Then a map can be drawn using two dimensions namely, nutrition and taste, and the snack
brands can be plotted against these dimensions taking the factor analysis results into account. This
may be represented as shown in Fig. 16.5. (Please note that this is not an actual representation, it is
only for illustration purpose).

Figure 16.5 Positioning map by two-dimension
16.8 POSITIONING ANALYSIS BY DISCRIMINANT MAPPING 8
Positioning analysis can also be carried out using discriminant analysis. Consider six hotels evaluated
on 13 attributes on a 10-point scale. The attributes/facilities being nearness to sea, room space, travel/
other arrangements, loyalty programs, personal interest in customers, size of the hotel, lobby facilities,
quality food, fast service, friendly service, atmospherics, reliability, and courteous employees. Multiple
discriminant analysis can be performed and the group centroids on the two functions are illustrated
below (Fig. 16.6).
Figure 16.6 Multiple discriminant analysis based on two functions

However, this mapping does not reveal how the hotels differ in terms of the original attributes.
We have to impose attribute vectors on this map such that the projections of the group mean reflect the
relative ratings of the attribute for that group. The length of the vector will be representing the ability
to discriminate among the groups. This process can be done using the following procedure.8
1. The first step is to obtain the correlation between the original attribute scores and the discriminant
scores on each discriminant function.
2. Use the mean as the origin for all groups on the two discriminant functions i.e. those taken as
dimensions.
3. Multiply correlations by the respective F-ratio for the particular attribute.
The larger the F-ratio the more discriminating that attribute will be. Hence, it would be represented
by a longer vector on the map. The vector’s relative position is determined by the correlation with
each of the discriminant function.
Figure 16.7 Positioning map by discriminant analysis
16.9 REPOSITIONING
Brand repositioning is not very uncommon in the market and is supposed to be a dynamic process, the
time frame being different for different brands. Brand repositioning is not very different from brand
launching per se. Only difference being that there are several other issues involved in re-launch situations
that are quite unique. There are several reasons why companies reposition brands. There are several
advantages and disadvantages of doing so but the company has to ensure that the platform on which it
is repositioning has to be successful.10 Brands loose their position relevance and positioning platform
has to be changed over some time. This may be because of social, economic, technology or cultural
changes. Other brands come out with better features, new packaging or other benefits and hence the
situation makes the brand go for an appropriate repositioning. Repositioning involves changes in the
marketing mix of the product with the objective of altering the perception of the brand in the mind of the
consumers.11 There might be many reasons for a product to reposition itself. Some of the most commonly
known platforms are as follows12

1. Increasing relevance to the consumer

2. Increasing occasions for use
3. Search for a viable position
4. Making the brand serious
5. Falling sales
6. Bringing in new customers
7. Making the brand contemporary
8. Differentiate from other brands
9. Changed market conditions
These nine categories do not form the exhaustive list and they are not mutually exclusive either.
Often one reason leads to the other and a brand is repositioned sometimes for many a reason. It is to
be noted that other factors like correlation with product life cycle, obsolescence of technology and the
consumption pattern may also sometimes add up to the reasons stated above.
16.9.1 Repositioning a Thai Beer Brand 13
Boon Rawd Brewery is a household name in Thailand, the most famous brand being the Singha beer.
The company initiated a research study to elicit the positions of certain brands of beer in the minds of
consumers. Respondents were asked to consider six brands of beer predominant in the Thailand beer
market. Heineken, a global premium brand, originating from Holland, which has seen good growth
in market share in previous years; Carlsberg, another global brand and originating from Denmark;
Singha, the traditional Thai beer, which had seen some image-development work in previous years to
increase its acceptability to younger, affluent groups; Kloster, a beer made in Thailand, but branded
and positioned as a European beer; Leo, a lower-priced beer, which was marketed primarily on a low
price/lower quality strategy; Chang, a recent entrant, brought in on a low-cost strategy to take the
lower-end rural market. First, a focus group discussion was conducted and certain attributes that
influence the perception of the beer were obtained. These attributes were also used in performing a
positioning analysis using a multi dimensional scaling technique. A brand personality exercise was
also carried out during the same time frame. The positioning and the brand personality of the six
brands were superimposed on each other to obtain a clear picture of personality and positioning.
The global brands were clustered towards the ‘Head’ dimension, and Kloster was also perceived
similarly thanks to its’ marketer’s efforts. Now, it was obvious that ‘Singha’ got lost in the crowd and
so, had to reposition itself fighting with the others.
Thus, by performing this exercise, it was evident that there are certain other possibilities to
reposition the brand. The brand had got the option of positioning towards ‘heart’ and ‘contemporary’
slot, which was not addressed by the existing brands.
The above case study makes it clear that, when positioning tools are used with a combination of
other tools or in tandem with relative parameters, they would yield better results and help companies
to make good decisions. Positioning and repositioning are very important aspects of branding and
have strategic relevance in reorganizing a brand to suit the market. Brands need change and customers
may also get bored with the same positioning platform. As said earlier, external factors also play a role
in making the brand search for a repositioning platform. Repositioning should be done taking into
consideration, the identity, image and other relevant aspects. Once the brand is suitably positioned it
may induce repeat purchase and pave the way for building loyalty. The next chapter focuses on brand
loyalty.
REVIEW QUESTIONS
1. Define positioning and brand positioning.
2. What are the dimensions on which customers perceive competitive offerings?
3. Explain the significance of positioning statement with examples.
4. Define multi dimensional scaling.
5. What do you understand by “similarity/dissimilarity matrix”?
6. Explain the application of image profile analysis for brand positioning.
7. How can you use correspondence analysis for positioning? Explain with examples.
8. Explain the positioning analysis by discriminant mapping.
9. List down the factors influencing repositioning.
REFERENCES
1
Kotler, Philip., Marketing Management, Prentice-Hall Publication, 11th edition, 2003, p.313.
2
http://www.agencyfaqs.com/interactive/cartoon_network/positioning _and_ kids.html
3
www.xlstat.com/techniques/multidimensionalscaling.htm
4
Malhotra, Naresh K., Marketing Research—An Applied Orientation, Pearson Education, 4th edition,
2004.
5
Satish, M., Summer Project Work (done during II-M.B.A)., Department of Management Studies,
N.I.T.(REC),Tiruchirappalli, 2004.
6
Sengupta, Subroto., Brand Positioning—Strategies for Competitive Advantage, Tata McGraw-Hill,
11th reprint, 1997.
7
www.mori.com/sampling/bim.html
8
MathangiSri, R., Summer Project Work, Department of Management Studies, N.I.T. (REC),
Tiruchirappalli, 2004.
9
http://pluto.huji.ac.il/~msgolden/home_page/ppt/453,78,Discriminant Mapping
10
http://www.indiainfoline.com/bisc/mdmk02.html
11
http://www.ignoumeids.ac.in/ignou/erl/articles/Mkt/5459.html
12
Moorthi, Y.L.R., Brand Management—The Indian Context, Vikas Publishing House, 1999.
13
www.BoonRawdBrewery/Branding,Asia.Com/CaseStudy.htm.

17.3 BRAND LOYALTY MEASUREMENT MODELS

This chapter discusses the following models for measuring brand loyalty.
1. Preference Behavior Model
2. Purchase Probability Model
3. Markov Chain Analysis Model
17.3.1 Preference Behavior Model 2
Based on the Colombo–Morrison model3 and the above definition of brand loyalty, the following
model measures the preference and switching behavior of the customer on a single brand. The
behavioral and attitudinal approaches to brand loyalty are covered in this model. A simple matrix is
the input for this model. The brand last purchased is taken on the vertical axis and the brand the
consumer prefers is taken on the horizontal axis of the matrix. Different brands in that category can be
taken for this exercise on both the axis. This matrix is illustrated in Table 17.1.
Table 17.1 Preferred brand by last brand purchased matrix
Last Brand
Purchased Brand 1 Brand 2 Brand 3 Brand 4 Total
Preferred Brand
Brand 1 X 1 2 3 X+1+2+3
Brand 2 X X
Brand 3 Y X X+Y
Brand 4 Z X X+Z
Total A B C D E
X: Hard core loyals who bought the brand they preferred.

Y: Switcher who prefers Brand 3 but last bought Brand 1.
Z: Switcher who prefers Brand 4 but last bought Brand 2.
A matrix of the two measures can be analyzed in terms of each brand’s gravity, or power to
convert brand preference into sales. The diagonal entries are the number of consumers who last
bought their preferred brands. If we compare those to the total number of consumers who preferred
the brand, we get the proportion of the preferences that were converted into sales. Thus, Gravity for
brand X = X / (X+1+2+3).
A different perspective on the market is revealed by comparing the diagonals with the total of
last purchased. This ratio represents the proportion of sales that come from consumers who identify
the brand as most preferred and is termed as focus. Focus for brand X= X/A where A = X+Y
vertically, i.e. the total purchases of Brand X. A high gravity ratio, signifies that consumers feel that
the brand is desirable, available, and has a good value. A high gravity brand indicates that it is
relatively not much affected by competitor’s lower prices or promotional offers. A brand with high
focus score gets sales mostly from consumers who prefer it. The range of the scores should be between
zero and one.

Brand Loyalty 161
17.3.1.1 Preference behavior illustration Let us take an example of this calculation. The
following table was obtained from a sample of 420 people who smoke on a regular basis of at least three
cigarettes a day. We use preference behavior model to calculate loyalty.
Table 17.2 Preference behavior of smokers
Last Brand Purchased

G F Kings Wills Lights Others Total
Preferred Brand
G F Kings 120 20 5 5 150
Wills 17 175 2 6 200
Lights 2 0 18 0 20
Others 4 24 0 22 50
Total 143 219 25 33 420
Thus, by calculating the gravity and focus for each brand, we arrive at Table 17.3 :
Table 17.3 Preference behavior matrix
Brands Gravity Focus

G F Kings 0.80 0.83
Wills 0.87 0.79
Lights 0.72 0.90
Others 0.66 0.44
One of the shortfalls of the analysis of the preference behavior matrix in most cases will be the
uneven sales level across brands. To overcome the problem and to examine loyalty from a slightly
different perspective, maximum likelihood estimations of the parameters of the Colombo and Morrison
equations can be calculated.3
Brand loyalty = i  i i
The parameter estimates, ai and i , are direct estimates of the extent of hard core loyalty and ability
to attract potential switchers. (Recall that ai is the likelihood of a brand’s retaining customers who prefer
that brand and i is the likelihood of attracting customers who prefer other brands). These estimates are
similar but not the same as the gravity and focus ratios defined above. Gravity is the proportion of
preferred sales that are converted to sales. Preferred sales can be decomposed into those who will always
buy that brand (HCLs) and those who prefer the brand but might have switched (PSs).
Using the above formula it can be seen that the brand loyalty of Gold Flake Kings cigarette
smokers is 58.5%.
17.3.2 Purchase Probability Model 4

In this model, called the Scaled Probability of Purchase, the purchase probability estimate of a
household’s choice of various brands is taken as a starting point. It is focused on the brands that are
frequently bought and is solely based on the behavior of the consumers and not on the attitudes. Let

us have ‘N’ brands with purchase probabilities of P1, P2…Pn, then the household’s loyalty towards
the mth brand in the set is defined by:
Lm = N (Pm–1/N)
= N Pm–1
The Scaled Probability Of Purchase (SPOP) is the linear transformation of the household’s
purchase probabilities for various brands. The household that buys a brand with probability exceeding
1/N is buying more of this brand than the other brands. This should not be confused with the
frequency of purchase of a brand. Thus, it shows some degree of loyalty and receives a positive SPOP
score and brands with probabilities less than 1/N get a negative score. Therefore, SPOP measure
subtracts 1/N from all purchase probabilities to give a meaningful origin to the measure. The maximum
value of (Pm –1/N) is (N–1)/N and minimum value is –1/N. In case a household does not buy a brand
at all, than the maximum disloyalty cannot be less than this. Multiplying (Pm–1/N) with N gives a
maximum disloyalty score of –1 and, regardless the number of brands and the origin remains
unchanged. However, the maximum loyalty measure changes to N–1 when multiplied (Pm –1/N)
with N giving N–1. Thus, maximum attainable loyalty is increased when the number of brands is
increased. This can be viewed from the following example. Let us say, a household’s purchase
probabilities of three brands are 0.5, 0.3, and 0.2. The SPOP scores would then be, 0.5, –0.1, –0.4
making inference that the household is loyal to the first brand and disloyal to the other two brands. If
we add another brand to this choice set which has an average probability of purchase, SPOP score of
zero, the SPOP scores for the three brands remain unchanged. When the fourth brand is added, the
purchase probabilities are changed, as 0.375, 0.225, 0.150, and 0.250 but the SPOP scores are the
same as 0.5, –0.1, –0.4, and 0.0. Two things to remember here are that the average SPOP brand
loyalty score over all other brands is always zero and SPOP gives a separate measure of loyalty towards
each of the brands in the choice set.
However, for this purpose of SPOP measure, observed purchase frequency should not be taken
as this changes over long-term and is almost irrelevant in short periods. We may use a Bayes estimate
of a household’s purchase probability for each brand. The distribution of purchase probability of
brand m, for households observed to buy, Ym times on Y purchase occasions is beta with parameters
(am + ym, Aam + Yy1), where am is the parameter of the Dirichlet distribution corresponding to brand
m and A = a1+…+am. The mean of this distribution is the Bayes estimate of purchase probability and
is given by:
PBm = (am + ym) / (A+Y).

17.3.2.1 SPOP illustration Here, we give a case that depicts the use of SPOP even in an
extreme case. Consider a hypothetical market that has only two brands—brand 1 and brand 2. Everyone
in the market will buy whichever brand is on sale that week and there is also a situation that each
brand is cheaper half of the time. Therefore, no buyer is brand loyal and the probability of purchase
of each brand is 0.5. If large samples of buyers were observed for two such occasions, then the buying
behavior would be as:

Brand Loyalty 163
Table 17.4 SPOP illustration
Observed Purchasing Fraction of Population
Brand 1 Loyalists 0.25

Brand 2 Loyalists 0.25
Neither Loyal to 1 or 2 0.50
Fitting the beta-binomial to this data gives us a1=a2= infinity. However, substituting these parameter
estimates into the formula for PB1 yields true purchase probabilities of 0.5 of all households without
taking the observed values. Thus, even in extreme cases, SPOP is not very much deviant in predicting
the loyalty behavior provided Bayes estimates are used.
17.3.3 Brand Loyalty Analysis with Markov Chains 5
Generally, Markov Chains are used to forecast long term market shares in oligopolistic markets,
extensively used in game theory problems. The finite market chains are applied to evaluate brand
loyalty assuming the time and place viewpoints to be discrete. Since, a workable solution needs
sophisticated computer programs or packages, we only state the method of conducting the exercise to
find out brand loyalty.
The stochastic process is defined as a set of random variables {Xt} where the unit time parameter
t is taken in a given set of time period T. Every special value the random variables take on is called a
state. The whole set that contains each Xt random variable is called an “example space” or a “state
space”. Xt being in the t   – ,   interval would be classified as a real valued stochastic process.
Thus, the stochastic process of Markov Chain is
P(Xt+1 = x/ X0 = x0, X1 = x1,…, Xt = xt) = P(Xt+1 = x/ Xt=xt )

Here, the conditional probability of the next state is independent of the preceding state. Hence,
P(Xt+1 = xt+1 / Xt = xt) are conditional probabilities and called as transitional probabilities. The one -
step transitional probabilities usually shown as Pij and named as stationary do not change in time and
the relationship making the following equation valid—
P(Xt+1 = xt+1 / Xt = xt) = P(Xn = xt+1 / X0 = xt); t = 0, 1, 2, …; n = 0,1,2 ... The conditional
probabilities are called n-step transitional probabilities represent as Pij( n ) . Pij( n ) explaining the process
that is in the i state, and these would be in the j state n-steps later.
m
 Pij
n
1; i =1, 2,..., n  0,1,...
j 0
The n-step transitional probabilities matrix that forms the basis of our analysis,
S = {Sn, S1,…,Sm} state space may be shown as:

Transitional Probability Matrix

S0 S1  Sm
( n) ( n)
S0 P00 P01  P0(mn)
P    S0
n ( n) ( n)
P10 P11  P1(mn)
    
Sm Pm( n0) Pm( n1) ( n)
 Pmm
( n)
When n  1, the Pij n - stepped transitional probabilities change from i state to j state. Here, the
Chapman—Kolmogorov equations,
m
Pij( n)   Pik Pki(n1)  i, j and 0  m  n
k 0
are used in forming a method for calculating the a-step transitional probabilities. Therefore, the n-step
probabilities matrix may be calculated from the relationship:
P n  P*  P n 1  P n 1*  P
17.3.3.1 Illustration of the model The model is complex in calculations and the use of a
software package is essential. Thus, here the process of obtaining data and the possible output are
illustrated.
1. Ask about the demographic profiles of the consumers.
2. Get details of the present brand of the product they own.
3. Decide on a certain number of brands for that product.
4. Ask the consumers to rank-order the brand preferences among your selected brands for their next
purchase of that product.
5. Get to know what variables influence consumer’s brand selection on a rating scale. This would
be somewhat like:
Table 17.5 Rating scale for consumers brand selection
Rating Scale
1 2 3 4 5
Attributes
Brand Image
Service at Store
Extended Warranty
Advertising
Quality
Availability
Responses should be 1 to 5 [1 being lowest and 5 being the highest].

Brand Loyalty 165
6. The Markov analysis is performed on those brands using the stated formulae. The transition
matrices are to be formed. The existing brand purchase preference and the next brand purchase
preference should be transformed into a Markov Matrix which would be roughly in the form of
Table 17.6. This matrix only shows the present preference of the consumers and the next brand
preference.
Table 17.6 Markov matrix
Brand 1 Brand 2 Brand 3 Brand 4

Brand 1
Brand 2
Brand 3
Brand 4
7. In order to show the time parameter, T, that would measure the switching behavior between
brands, we use a balance vector to get the desired matrix. This balance vector has to be analyzed
using a computer program.
Thus, brand loyalty can be measured by the above methods and also a few other complex
mathematical models. There are also certain syndicated market research methods like Burke Secure
Customer Satisfaction Index®, which measures more or less the loyalty aspect of a brand. It has to be
noted that there is no single acceptable method of measuring loyalty for all types of products. For
durables mostly, repeat purchase may not be the criteria and the word of mouth plays a significant role
in measuring loyalty. Thus, one has to think over and measure loyalty as and what is relevant to them.
Measuring loyalty would tell us about the state of customers and the emotional attachment towards the
brand. This would further enhance to build efficient marketing programs specifically targeted at them.
17.4 STRATEGIES TO BUILD BRAND LOYALTY
Many a times, people make purchasing decisions based on the emotional aspects of the brand rather
than on the quality or other objective evaluations. Brand loyalty, purely dependent on emotional
attachment towards the brand; may be carefully cultivated to an extent by marketers reflecting the
aspirations of the customers. Repeat advertising and promotional offers can create awareness and
build brand recognition among customers. Published information in print and electronic media
enhances the brand awareness and increases business equity. Brand names are equally important.
Hence, communication through any media should be consistent and persistent, and should always
convey the name of the brand and a vivid message to the target audience. Companies with lasting
values are built around a persona, and a name that captures the idea better than anything else,6 would
result in a better brand equity. Loyalty may also be carefully built by offering specialized programs,
encouraging customers to be a part of that programme as is the case with airlines, retail stores, hotels,
etc. Airlines offer certain extra benefits like tele-check in, usage of airport lounge, redeemable mileage
points, etc. for the frequent flyer club members, who are brand loyals. Jet Airways offers complimentary
upgrade, dedicated customer service centre, priority stand-by, personalized web access, etc. to members

of its loyalty club ‘Jet Privilege’. The automobile manufacturer Maruti Udyog Limited offers a host of
additional benefits for its loyal customers like maintenance planner, insurance and service reminder,
city/highway maps, chat with auto experts, Do-It-Yourself tips, etc. Similar is the case with retail stores
like Globus, Pantaloon, Lifestyle, Westside etc. However, there isn’t any framework or any laid-down
strategies for building brand loyalty except that all the elements of identity, image, personality, and
positioning have to be established according to the brand manager’s/company’s desire i.e. building a
brand correctly can create loyalty.
17.4.1 Building Loyalty through Strategic Differentiation 7

Companies like Procter & Gamble believe in strategic distinctions though fundamentally, making a
good product is absolute necessity. These areas of strategic distinctiveness, when done over a period
of time, enhance the brand’s equity. These strategic distinctions are of the following types:
1. Benefits of products The benefits derived from products by the consumer should be unique
from other products, i.e. the consumer should tend to feel that there is an exceptional value
derived from this product by him.
2. Emotional benefit Delivering a product benefit by itself may not create brand loyalists. There
should be some emotional benefit of the brand apart from the product benefit. The coffee chain
Café Coffee day’s slogan says ‘a lot can happen over a cup of coffee’ which suggests the emotional
benefit to the customers.
3. Brand personification This forms the customer’s perception about the brand’s personality. To the
customer, what form does the brand take is what matters. This is already explained in the previous
chapter.
Brand Managers/Companies are always sharp enough to calculate what the return is for every
action. Hence, they tend to leverage the amount spent in branding. The measures to calculate brand
equity and the leveraging are explained in the following chapter.
REVIEW QUESTIONS
1. Brand loyalty is the ultimate objective of Customer Relationship Management—Comment.
2. Define brand loyalty.
3. Define gravity and focus.
4. Interpret the following data :
Brands Gravity Focus

Brand X 0.66 0.44
Brand Y 0.80 0.83
5. Explain the preference behavior model with illustration.

6. Explain the brand loyalty analysis by using Markov analysis.
7. Explain the purchase probability model with illustration.

Brand Loyalty 167
8. If you are a brand manager of an airlines operating from India, what will be your strategies for
building brand loyalty.
9. Emotional benefit will be mandatory to develop the brand loyalty—Evaluate with examples.
REFERENCES
1
Jacoby, J., and R.W. Chestnut, Brand Loyalty: Measurement and Management, John Wiley and Sons,
New York, 1978, p.80.
2
Obermiller, Carl., “Brand Loyalty Measurement Made Easy: A Preference-Behavior Model”,
Journal of Small Business Strategy, Vol.13, No.1, Spring/Summer 2002, pp.32–44.
3
Colombo, R.A., and D.G. Morrison, “A Brand Switching Model with Implications for Marketing
Strategies”, Marketing Science, Vol.8, No.1, 1989, pp.89–106.
4
Elrod, Terry., “A Management Science Assessment of a Behavioral Measure of Brand Loyalty”,
Advances in Consumer Research, 15, Association of Consumer Research, Ann Arbor, 1988, pp.481–6.
5
Uslu, Aypar., and Tuncay Cam, Analysis of Brand Loyalty with Markov Chains, can be accessed at
http://www.opf.slu.cz/vvr/akce/turecko/pdf/uslu.pdf
6
http://www.nysscpa.org/cpajournal/2003/0803/nv/nv4htm.
7
http://www/pg.com/jobs/consumer_is_boss/building-brand.jhtml.

Figure 18.1 Aaker’s ten components of equity

The measure of each of the five components—loyalty, perceived quality/leadership, association,
awareness, and market behavior are obtained by measuring the subcomponents. Price premium could
be measured by asking the customer how much price premium they are willing to pay the brand or by
using the conjoint technique. For measuring satisfaction data can be obtained on a suitable rating
scale and it can then be analyzed. Perceived quality can also be obtained on an interval scale. Leadership
refers to leadership in sales or innovation or in customer acceptance of the brand. It could be also
captured using rating scale. The association is seen as a sum of value which indicates functional
benefit of the product, brand personality, (positives and negatives of the personality), and image of the
organization associated with the brand. There are five levels of awareness/recognition—recall, top-of-
mind, brand dominance, brand knowledge, and brand opinion. Scores can be generated for different
levels of awareness. The fifth component, which is obtained from the market, comprises of market
share and distribution coverage, which hardly requires a survey. It is practically not possible to
consider all components. Hence, managers need to identify a set of relevant components and they
need to allot appropriate weights for them. A suitable combination mechanism needs to be evolved to
consolidate the data across dimensions into one that represents brand equity. To measure any of the
first four components a questionnaire needs to be constructed appropriately.

Brand Equity 171
18.2.2 Customer Based Brand Equity 2

According to Keller brand equity can be measured by brand knowledge, which consists of two
components—brand awareness and brand image. The subcomponents of each of these are shown in
the Fig. 18.2.
Figure 18.2 Sub-components of brand equity
The measurement of equity can be done in two methods. All the components could be captured
from the customer using a 10-point rating scale and the brand knowledge gives the brand equity. In the
other method, the response of consumers are recorded when the marketing mix (combination of product,
price, place, and promotion) of a known brand is replicated to an unknown brand/unbranded product.
For instance, let us measure the brand equity of ‘Maggi’ using the second approach. The recall and
recognition of Maggi is noted on a rating scale. Then we proceed from the last blocks of the above chart
that is from the bottom. The price, packaging, and product related attributes of the product are copied
and the product is given a name ‘Boogy’. ‘Boogy’ which carries the same functional, experiential, and
symbolic benefits as that of ‘Maggi’. This is stated to the consumers. The response of consumers to
‘Maggi’ and ‘Boogy’ are tested and recorded. The measurements are appropriately quantified and the
value gives brand image. This combined with awareness would give the equity of ‘Maggi’.
18.2.3 Price Premium Methods 3

These methods are based on the principle that the brand equity of a product is given by the extra
amount that the consumers are willing to pay to purchase a brand. One way is to measure the difference
in price between the unbranded product and the branded one. Multiplying this with the total number
of quantity sold gives the brand equity. Subtracting the branding costs from the value obtained gives
the profits due to branding. Cummins approach is one such method of brand equity measurement,
wherein the ‘amount’ added by the brand per unit of product is found out by increasing or decreasing

Brand Equity 173
Brand Image
 Brand awareness
Brand  Subjective perception of
Image advertising pressure
 Memorability of
advertising
 Brand uniqueness
 Clarity of internal image
 Attractiveness of internal
Brand Assets image
Brand Assets
 Brand appeal
 Brand loyalty
 Consumer attitudes
 Brand investments
Figure 18.3 Brand iceberg model

The value of each of the individual components are measured and compared with the reference
values in the ‘icon’s’ database, which contains values for each sector or product category. The final
value is obtained by combining all the values of the individual components after they have been
suitably indexed with the corresponding reference values in the database. This method has the
disadvantage of being too dependent of the reference value.
18.2.6 The Interbrand Approach 3

In interbrand approach, brand equity is obtained by multiplying brand strength with profit values of
the past three years. Brand strength is calculated as a weighted average of the number of variables.
The following Table 18.1 gives the set of variables and their corresponding weightage. The rightmost
column describes the operational factors involved in measuring the variables. Once the standardized
brand strength score (between 0–100) is arrived it is transformed using transformation function,
which follows a curve. The transformed score is the brand multiplier and has a score between 0–20
which is then multiplied with the average of last three years profits after taxes to obtain the brand
equity.

Table 18.1 Variables and their weightage for obtaining brand equity
Variables Weightage Operational Factors
Brand leadership Market share (ms), market position,

25 relative ms, market segment, structure,
future aspects, etc.
Brand stability History, current position, future
15 development
Market Overview, (structure of competition,
10 value, volume, etc.), trend (market
dynamism, etc.), prospects
International reach of Past (export history, etc.), present
brand 25 (presence on foreign markets), future
Brand trend Development (sales volume, ms), status

10 (competitive trend), planning
(development plans)
Marketing support Quality and continuity (advertising
10 activities, sales promotions, etc.),
future strategy
Legal protection of brand 5 Rights to name, registration, etc.
18.2.7 Copernican Approach 4

In this approach, variables and their weightage for obtaining brand equity is found to consist of seven
main factors. These factors are combined using the weighted average technique and standardized in the
range of 0–100 to represent a brand equity score. The seven factors are brand permeation, brand
distinctiveness, brand quality, brand value, brand personality, brand potential, and competitive
inoculation. Brand permeation refers to a weighted score of the items such as advertising awareness and
availability. Brand distinctiveness is obtained as a weighted combination of measures that indicate
differentiation, uniqueness, and superiority of the brand. Brand quality is given by an overall assessment
of the brand as a whole along with its line extensions in terms of its overall reputation for quality of
product or service. Brand value is a weighted score of measures that reflect the extent to which the
brand keeps up the “price-value” equation. Brand personality is the extent to which the brand’s image
is similar with who the buyer is or wants to be. Whereas, brand potential is the amount to which
consumers will pay more for, go out of their way for, or are willing to try this brand’s new products,
services, or line extensions. Competitive inoculation refers to the extent to which the consumer
would stick with the brand in times of heavy competitiveness.
18.2.8 The Network Approach 5

In this approach, brand equity is related as the sum total of all the strengths of various relationships
that the brand/business holds with its stakeholders. The stakeholders could be suppliers, customers,
distributors, and retailers. To measure brand equity in this method, first the key relationships need to
be identified for the business or the brand. In the next step, the factors affecting each of the relationships
are determined. Determination of factors could be done once the stage of each of the relationships is

Brand Equity 175
identified. Any relationship follows five stages, which are awareness, initial interaction, expansion,
commitment, and dissolution. Awareness can be identified as recall, recognition. Similarly, other
stages can also be identified—initial interaction via trial/repurchase, expansion via trust and satisfaction,
commitment via loyalty, and dissolution via switching. Indicators for each of the relationship are then
identified and tracked over a period of time. The indicators could include measures like cash flow,
lead time maintained by suppliers, etc. These indicators are tracked over a period of time and it gives
brand equity across a period of time. According to this theory, brand equity needs to be mentioned as
a function of time and cannot exist independently.
18.3 BRAND VALUATION METHODS
18.3.1 Cost Based Approaches 6

In this approach, historical cost of building the brand is considered as the value of the brand. The
sum total of research and development costs for concept development, market testing costs, promotional
expenditures, and product improvement costs are calculated to find the brand value. This way is
relatively simpler in terms of data collection. But this method is not effective since it does not in
anyway reflect the future cash flows. The other form of cost based approach is to obtain the replacement
cost. This method calculates the total amount that would be spent if the brand is built again (after
destroying). It is better than the previous method in reflecting the brand value.
18.3.2 Market Based Approaches 6

In this method, the brand value is defined as the value given by the highest price that is/would be
paid willingly to purchase the brand. The other approach7 of looking at market based approach is to
relate the acquisition price of a brand in a recent merger/acquisition to the brand whose value is to be
found out. For instance, Brand X has been acquired say for Rs.1000 cr. If we have to calculate the
value of Y which has 20% higher sales than X then its value is calculated as 1.2  1000 = 1200 cr.
18.3.3 Earning Capacity Based Approaches 6
The main idea here is to discount the expected future cash flows and calculate the net present value
of the brand. Kern’s earning capacity model calculates brand value as a function of revenues expected
for ‘n’ number of years. The assumption in this model is that the revenues follow an upward decelerating
curve over the years. The following equation 18.2 gives the value of the brand.
Value = R
2/3

*L* Q n –1/Q n * Q –1  (18.2)
Where R = Average expected annual revenues
L = Normal license fee rate in the industry
N = Number of years or duration for the expected revenue
stream (the brand’s useful life)
Q = 1 + p / 100 (annuity present value factor)
p = Normal imputed interest rate for the country
concerned

18.3.4 Brand Equity Based on Equity Evaluation 6

This method is based on efficient market hypothesis that all information about the company is reflected
in the share price. The following Fig. 18.4 establishes the calculation of equity.
Market Capitalization
(–)Replaced Tangible Assets
Intangible Assets
Non Brand Factors Brand Equity Industry Factors
Demand Enhancing (Market Share) Brand Expenditures
Brand Factors Non Brand Factors
Order of Entry Advertising R&D,

Share Patents
Figure 18.4 Brand valuation based on brand equity

As the flow diagram shows, the value of tangible assets when replaced is subtracted from the
market and the resultant value is intangible assets. This consists of three components namely brand
equity, non brand factors that reduce the firms’ costs like R&D costs and patents, and finally key
industrial factors such as regulation. The equity component may be due to market share, which is
further divided to brand and nonbrand factors. The share due to non-brand factors comprises the
company’s share of patents and research and development (R&D) share. Market share is divided into
advertising share of the brand with respect to its competitors and the order of entry of the brand into
the market.
18.3.5 Royalty Relief Method 6

Here the value is ascertained by the royalty that the company would be paying if it was using the
trademark. First it has to determine an appropriate base for royalty payment. It can be based on
turnover or production value or number of units or any other base. The rate for royalty is the next to
be determined. Then appropriate growth rate, expected life, and discount rate are determined for the

Brand Equity 177
brand. There are two approaches—25% approach and the 5% approach. In 25% approach, 25% of net
profit is taken as royalty payment. In the 5% approach, 5% of turnover is taken as royalty payment.
The equity that is so gained by the brands must be leveraged. This leverage is achieved through
two major strategies of branding—line extensions and brand extensions. The following two chapters
deal in detail with these strategies.
REVIEW QUESTIONS
1. Define brand equity.
2. Differentiate between brand value and brand equity.
3. Explain the ten components of brand equity according to Aaker.
4. Draw the chart of components of brand equity based on Keller’s ideology.
5. How will you measure the brand equity by using conjoint analysis?
6. Explain the application of price premium method to measure brand equity with illustration.
7. Describe the brand iceberg model and explain its implications to brand managers.
8. Define the following terms:
a) Brand Potential
b) Brand Strength
c) Competitive Inoculation
9. Explain the Kern’s earning capacity model.
10. Explain the following techniques to measure brand equity:
a) Market based approach
b) Royalty relief method.
REFERENCES
1
Kotler, Philip., Marketing Management, Pearson Education, 11th edition, 2003, p.422.
2
http://info.lut.fi/kati/courses/kv-markkinointi/090246000/Reports/Report_BrandEquity.pdf
3
http://www.bbdo-interone.de/de/home studien.Par.0009.Link Download.tmp Brand_ Equity_
Review_e.pdf.
4
http://www.copernicusmarketing.com/univers/docs/brand_equity.pdf.
5
http://130.195.95.71:8081/www/Styles.pdf.
6
http://www.huizenga.nova.edu/jame/valuing.htm.
7
Murthy Y.L.R., Brand Management—The Indian Context, Vikas Publishing House, 1999.

Some companies introduce line extensions simply to command more shelf space from resellers. However,
line extensions involve few risks too. An overextended brand name might lose its specific meaning. A
line extension works best when it takes sales expenses of other items in the line. A line extension is
supposed to be working best when it takes sales away from the competing brands, not when it
“cannibalizes” the company’s other items. This chapter examines the line extension strategy in depth.
19.2 WHY LINE EXTENSION IS SO HARD TO RESIST?
Instead of launching a second brand (Multi-brand strategy) of the same product category, most companies
take the vanity route. They tend to think that there is nothing wrong in using their own name, which
might be famous, rather than launching a new brand altogether. Microsoft is a very good example of
launching successful line extensions. However, this may not turn out to be the same case in other
companies as they do not replicate Microsoft’s market share or technology leadership. So, now whether
a multi-brand strategy or a line extension is good for a company is hard to answer. Let us now, look
at the line extension as a strategy.
19.3 A GOOD MARKETING STRATEGY3
Line extensions of strong brands, symbolic brands, brands which are given strong advertising and
promotion support, and those entering earlier into a project sub-category are more successful than
other brands. The size of the company and its marketing competence also play a role. There are
various factors that explain why so many companies have their marketing strategies to extend their
product lines. The most important reasons a company would go for a line extension are as follows:
19.3.1 Segmenting the Customers

As said earlier, product managers have the notion that line extensions are less costly and less risky
than other new products that would cater to the needs of various customer segments. Identifying and
targeting the finer segments can be done effectively using low cost market research and direct marketing.
This type of segmentation is easily implemented through effective media fragmentation. Such strategies
are seen in the Indian convenience foods market (‘Ready to Eat’ product category) wherein the
marketer launches various line extensions to cater to the food habits of different segments of consumers.
MTR Foods Limited, one of the industry majors in the packaged foods business recently announced
the launch of soup concentrates in four different varieties— ‘Simply Tomato Soup’, ‘Spicy Tomato
Soup’, ‘Mulligatawny Soup’, and ‘Spinach and Carrot Soup’. These variants have been launched after
an extensive market research to cater to different consumer segments. The spinach and carrot soup is
targeted at children and the other varieties target the higher age group of people.
19.3.2 Variety Fulfillment

This is done to satisfy the Law of Diminishing Marginal Utility principle so that something slightly
different can be offered to the customer. Customers are always willing to try new products and switch
brands, which they have never even heard of. The Gujarat Milk Marketing Federation launched a
host of milk-based products under the brand name AMUL. Similarly, SmithKline Beecham made an
entry in to the faster growing brown beverages segment with its Chocolate Horlicks brand to counter

Line Extension 181
the established Cadbury’s brand Bournvita. This also helps to increase the shelf space occupancy at
the retailer end, which is essentially important for impulse goods like chocolates,
soaps, etc. Marketers also try to create a billboard effect by occupying the shelf space of the retailer.
19.3.3 Price Latitude

Marketing Managers generally try to move the customers up the value chain by introducing line
extensions with additional features/benefits that are priced higher. This concept is also known as up
market stretching. This increases the profitability per customer and the brand also gains a premium
image. This is evident in the introduction of cars in the higher segment category by Maruti Udyog
Ltd. Viz. Maruti 800 being a base, and then introducing line extensions of Maruti Alto and Maruti
Zen. In a similar way, some line extensions are priced lower than the original products. This is called
down market stretching. Rin Shakti is a low-priced line extension of Rin Supreme detergent bar.
19.3.4 Capacity Utilization

Much of Pond’s talcum powders are line extensions due to under utilization of capacity. Companies
add new product lines to make use of their complete capacity or excess capacity by making slight
modifications to the existing product lines.
19.3.5 Short-term Gain

Next to sales promotions, line extensions offer the fastest and most cost efficient way to increase sales
quickly due to very less developmental costs. Here the costs of creating a new brand are saved and to
an extent, the promotional costs would also be reduced. In the hair-care segment, to cater to the rural
market, companies introduce their existing product in sachets instead of specially building a new
brand for rural India.
19.3.6 Competitive Inhibition

As the competition sets the pace for the line extensions and occupies the shelf space of the retailer,
companies have to respond in the same manner. The more the shelf space is controlled, the greater is
the advantage for marketers. Consider the case of ‘Colgate’ Toothpaste, with its variants—Colgate
Herbal White, Colgate Kids Toothpaste, Colgate Dental Cream, Colgate Fresh Energy Gel, Colgate
Herbal, Colgate Total, Colgate Cibaca Top, Colgate Whitening, the brand is able to garner a huge
shelf space.
19.3.7 Trade Pressures

The proliferation of different retail channels for consumer products, from club stores to hypermarkets,
pressures manufacturers to offer broad and varied product lines. Retailers would not be happy with an
undifferentiated product line and would definitely demand their size of packaging too. Hence, companies
are left with no option but to go in for a line extension.

19.4 A BAD MARKETING STRATEGY3
Unfortunately, many line extensions do not succeed. On the downside, line extensions may lead to
the brand name losing its specific meaning—Ries and Trout call this Line Extension Trap. 4 This
happens mainly due to the following reasons.
19.4.1 Feeble Line Logic

If there is no perceptible difference between the line variants, then it results in over segmentation and
confusion. This happened to Surf. Surf’s launch of line extensions such as Surf Excel, Surf Ultra,
Surf International, Surf Magic, and Surf Wash Boosters had no noticeable difference between the
extensions and failed to explain the differences between each of the extensions.
19.4.2 Cannibalization
The line extension may often turn out to be a thorn in the flesh for the original brand itself. It may
cannibalize the sales of the parent brand and thus disrupting the brand loyalty also. Maruti introduced
Maruti Alto to counter Hyundai Santro. But ‘Alto’ cannibalized the sales of the flagship ‘Maruti 800’
brand.
19.4.3 Falling Prey

Falling prey to the costs of new brands and promotional efforts, certain new ideas and products may
be launched as extensions when they actually warrant a new brand itself. In the case of sports channel
‘DD Sports’, the poor brand image of its parent brand ‘Doordarshan’ is preventing the channel from
gaining good viewership among ‘sports-lovers’5 . Among the Cable and Satellite homes there would
be only a few people who watch DD Sports as much as they watch Starsports or ESPN, even if they
have the same programme being aired with the same set up (commentary team, transmission quality,
etc.). This is because of the image of Doordarshan as an old, boring lethargic channel that is entrenched
in the mind of the viewer (C&S homes). If the sports channel could be launched under a new brand
name, it may gain good amount of viewership for the quality it commands.
19.4.4 Stepped-up Cost

Among other things, the costs of marketing research, market segmentation, new line extension
development, packaging, promotion, etc. may all add no value at all. They may lead to the parent
brand’s image dilution also. Apart from this, there may be many disadvantages of line extensions like
the product itself being in a mature or declining market, fragmentation of the market, disruption of
trade relations, etc. With the slowing down of deodorants market in India, HLL wants to phase out
the line extensions of the ‘Rexona’ brand completely.
19.5 BRAND LINE EXTENSION
A company introduces a brand line extension by using an established product’s brand name to
launch a new, and slightly different item in the same product category. The company supplies
specific branded variants, let us say, premium end shirts to certain retailers or a specific type of

Line Extension 183
distribution channel and low-priced shirts to certain other retailers of some other distribution partners1.
For instance, ‘Charagdin Premium’ shirts are available only in specific charagdin stores and not in
other multi-brand stores.
In general, firms with broader product lines have more potential customers, better opportunity
to sell more to each customer and can put in greater marketing efficiency. They can also be benefited
by having great production efficiency. There is also the other side of potential intra-firm competition
between the parent brand and the line extension or in between two line extensions.
19.6 MEASURING THE LINE EXTENSION SUCCESS
Now, as in other chapters, we shall see in what ways we can measure the success of any line extension.
There are specific models or mathematical equations to measure the factors or the success that are
questionable and may vary from company to company. Here, we will see what measures can a brand
manager make use to determine the success of line extensions. We have various analysis to measure
the success of the line extensions, line pruning, and other decisions regarding line extensions. Here
are a few of them:
19.6.1 Discrete Choice Analysis 6

It guides, the decisions on line extension, product features, promotions, packaging, labeling, and
pricing. This mathematical based software helps the supply information on source-of-volume and
cannibalization for new product launch decisions. This software also provides for installing a competitors
(computer simulated) “war-game” and “consumers” responses to various marketplace scenarios. This
uses highly regarded hierarchical Bayesian disaggregate choice model.
19.6.2 Dynamic Segmentation 7

This tool helps to track the fast-moving category so that the brand manager can observe changes in
segments’ sizes, behaviors, and attitudes over time. This technique uses the Bayesian latent class
model.
19.6.3 Sort-based Screening

This technique uses a Q-sort, similarity sort, and TURF-based methodologies to screen a large number
of new product concepts into a promising few. This is also used in product-line optimization decisions
and line-pruning decisions.
19.6.4 Structural Equation Modeling

This software tends to identify the underlying drivers of customer satisfaction based on attributes and
their relative success weightage.
19.6.5 Retail Reid8

This software technique measures and/or predicts consumers’ in-store behavior. It uses an information
accelerator (a technique to accelerate consumers’ exposure to marketing efforts in the category) and
simulated shopping in a virtual reality configuration, all conducted via a computerized interview. By
using this, product managers, can determine what drives consumer choice while measuring the
impact of changes to marketing variables and the relative importance of marketing techniques to line
variants.
19.6.6 Forecast Reid 7

This tool can measure the share or volumetric impact of a new brand, line extension, or re-stage
against a competitive context as well as the impact of a range of marketing elements on market share/
volume potential. This delivers the share/volume forecasts for the line extension based on the parent
brand. It also includes buyer profiles, and a custom designed simulator profiling the forecast results
under varying conditions, downloaded onto PCs.
Line extensions are a temporary way of reacting to changing market conditions and attacking
the competition. The fundamental way of responding to the changes demanded by the market is
through extending the brands to stand for products in unrelated categories. The next chapter discusses
this strategy.
REVIEW QUESTIONS
1. Differentiate between brand extension and line extension.
2. Line extensions are very hard to resist in this competitive market environment—Comment.
3. Explain the factors that influence the companies to go for line extension.
4. Define line extension trap with examples.
5. What do you mean by cannibalization? Explain with suitable examples.
6. Explain the various techniques used to measure the success of line extension.
REFERENCES
1
Kotler, Philip., Marketing Management, Prentice-Hall Publication, 11th edition, 2003, p.431.
2
http://www.ipsos-reid.com/ca/sectors/products/dsp_anal.cfm
3
Quelch, John A., and David Kenny, “Extend Profits-Not Product Lines”, Harvard Business Review
on Point Enhanced Edition, Dol: 10.1225/94509
4
www.ries.com.
5
http://www.indiainfoline.com/bisc/imtart20.html
6
http://www.extension.iastate.edu/agdm/articles/others/GidJune02.html
7
http://www.msa.com/analysis/cda.html
8
www.retailreid.com

brand extension. Taking these factors for success of an extension, into account, the brand manager
can launch the brand extension by measuring his own brands against these parameters. We shall see
what parameters would be important when viewed from the customer’s angle and from the company’s
viewpoint.
20.2 AAKER AND KELLER’S SUCCESS FACTORS 3
The research conducted by these eminent academicians gave insight into the possible success factors
for a brand extension from the customer’s point of view. The main findings state that the attribute
associations towards the brand, the attitude of consumers with respect to the parent brand, and the
similarity between the parent and extended product classes as well as the perceived quality influence
the success of a brand extension to a great extent.
20.2.1 Attributes Associations of Brand
The customers strong associations towards the attributes of the brand will act as a major force in
extensions. Lux stands for beauty, Neem is related to herbal quality, Dettol with antiseptic are all
strong associations with the brand, the consumers have. They may have associations like Burnol
should be used during burns or band-aid used on cuts—type of situational associations also. We
associate electronic goods with Japan and cheap goods with China and Taiwan. Similarly, consumers
also have strong associations such as Sony with Japan, Nike with America, Kingfisher beer with party
times and celebration, and so on. Thus, brand attribute associations may be for a specific quality, or a
useful occasion or a user type or a place or a product class.4 It has been stressed that the original brand
attribute association would serve as a motivational rationale for the extension also. However, the
influence of original brand attributes to the extension may always, need not be positive. Taking the
above example, if Dettol is used for a fairness cream extension or Lux for a shirt extension, it may not
work at all due to the strong associations consumers have. Thus, the brand attributes, which are
valued in the original brand may not be even acting as a positive insight into the extension.
20.2.2 Brand Attitude
The overall brand attitude i.e. the way a person perceives or believes about a brand in addition to the
specific attributes of the brand, will also play a role in the extension. This overall attitude may be
based on reliability, durability, service orientation, or some other features. This perception of the
consumer on the overall brand attitude should be acting positive on the extension if the original
brand attitude is positive. Let us say, Tata is perceived to be of quality in any product class, and then
an extension of the Tata brand would definitely add value for the extension as a quality product.
Similarly, if it is associated with inferior quality, then the extension would also suffer the same perception.
20.2.3 Fit and its Dimensions

Yet another factor affecting the consumer evaluations of brand extensions is the similarity between the
product classes of the original brand and its extension. A good fit would boost the positive image of
the brand on its extension, whereas a poor fit may throw in some undesirable effects on the extension.
This fit has several dimensions to it namely—‘Complement’, ‘Substitute’, ‘Transfer’, and ‘Difficult’.
‘Complement’ means the perception of the consumers that the two product classes of the original
brand and its extension would go together or consumed together. There would be a complement or a

Brand Extension 187
positive connotation if the original product is a shaving cream and the extension is an after-shave
lotion. ‘Substitute’ is the extent to which consumers perceive the two product classes as being alternate
to each other, or replacements serving the same purpose. Vicks inhaler would be viewed as a Vicks
Vaporub substitute as they both serve the same purpose. ‘Transfer’ relates to the consumers viewpoint
of assessing the product manufacturing. If high technology and efficient human resources are associated
with one firm, then the extension of this firm will automatically carry these two positive perceptions
or transfer of efficient human resources and high technology. Infosys has been acknowledged as an
IT service provider with efficient human resources and infrastructure. Then its consulting arm,
Infosys consulting would also have these transferred positive connotations. If a company makes high
technology oriented products and then the extension happens to be a very low technology oriented
product, then the ‘Difficult’ would be low, i.e., the perception of the consumers that Tata Steel can
make high quality products of steel, would result in a negative connotation, if Tata Steel makes a
stainless steel safety pin owing to the ‘Difficult’ to be low. It is the perception of the difficulty of
making the extension as compared to the original product class.
As compared to the customer-based evaluation, we shall now see what factors affect the success
of brand extension when viewed from the company’s perspective. Certain factors definitely overlap in
various models; nevertheless, one has to take them on his own judgment and should rather try to
understand the holistic picture of the success factors.
20.3 INTERNAL AND EXTERNAL FACTORS AFFECTING A FIRM

In this company’s perspective, we shall see the influence of market characteristics on the timing of
brand extensions and the role of company reputation in making the extension a success.
20.3.1 Market Characteristics
The timing of introduction of an extension in a particular market is of utmost importance. Should an
organization introduce extensions in young and growing markets or should it rather wait until market
saturation and maturity? Research studies have shown that extension timing in the consumer non-durable
sector highlight the fact that extensions are not a very profitable strategy in the emerging market conditions.
However, in mature markets, the converse seems to be true. The probability of the brand extension-success
is low in new markets because the competing brands would not be sufficiently established in the market.
Thus, an unsuccessful extension may erode the equity of the parent brand also. In case of new markets, the
lack of high brand awareness also seems to be a limiting factor.
20.3.2 Company Reputation and Stock Market Reactions
The financial markets also need to voice out their opinion on the possible brand extension. The
impact of brand extension announcement on the parent firm’s stock market value is generally noted to
be under the influence of two variables—consumer brand familiarity, and general attitude towards the
brand. It has been proved that the marketplace has the most favorable reactions to the extension
announcements of firms having brands that are either very familiar and appreciated by consumers or
very unfamiliar and unfavorably perceived. This happens due to the fact that the original brand has
succeeded in the market and so the market expects the extension also to succeed similarly. The
converse also seems true here, which is why the less-known brands and their extensions do not add
positively to the marketplace, as the equity is not high.

20.4 INTERBRAND SUCCESS FACTORS5

In this approach, we will see that the success of any brand extension would depend on both the
organization’s capability and the customer’s acceptance. Some of the essential features of brand extension
in a competitive situation of the Interbrand approach are as follows:
20.4.1 Characteristics of the Parent Brand 6
The distinct characteristics of the parent brand are associated to the new extension also by the consumers.
Mostly, it so happens that the extension turns out to be a success if the same brand image of the
original brand is replicated in the extension also. The characteristics of the parent brand are expressed
in terms of its brand strength, brand uniqueness, and its history of previous brand extensions, if any.
The success story of Goodknight, in India, which earlier produced only mats and the heater but later
ventured into mosquito coils and liquidifiers acts as an example here. It was a huge success for
Goodknight, as the consumer finds the reflection of Goodknight mat image in these products. On
the other hand, Dettol’s fragrant bath soap was a failure. The consumer associated Dettol and its
‘antiseptic’ smell with cleanliness and being germ-free and when this was missing from the newly
launched soap, they did not accept it. Here the strong brand strength worked against its extension.
20.4.2 Experience with the Parent Brand 6

It has been found that, most of the time the consumer evaluates the extension of a brand with respect
to the past experience he/she had with the parent brand. In the case of Nescafe, the earlier experience
with the brand causes the purchase of its new extension Nescafe Sunrise with relatively less skepticism.
However, it may work otherwise also. During the launch of the new Tata Indica cars in India, there
was a lot of trepidation as the old product of Tata Estate and Tata Sierra had problems with their
gearboxes and it was feared that the same was true in Indica’s case, which was later overcome.
20.4.3 Characteristics of Extension Product 5,6

In spite of the influence of the characteristics of the parent brand, the characteristics of the extension
product also influence the success factors. The extension itself should be unique in nature. In the case
of experience of goods, it is relatively easier for the extensions to build on their core brand’s success
as we see in the example of the success of Lux bath gel drawing from the success of Lux soaps and
Ponds face-wash drawing from the success of Ponds moisturizers. There are many failures also such as
failure of the Ariel washing soap though the Ariel detergent does well. In the case of search goods,
the consumer only gives the product a fair trial wing to its brand name. The brand that have made
good use of this opportunity are Usha Sriram who used their brand goodwill from the fans that they
sold, to their sewing machines. The brand that has not been able to capitalize is Onida, which was
very successful in the television market but could not extend it to other electronic goods and failed in
its attempt at washing machines.
20.4.4 Characteristics of the Firm 5,6

Brand extension success also depends on an organization’s capability in terms of its size and marketing
competency. For instance, it is relatively easier and safer for high-equity brands to go for brand
extension, because of its large market presence and demonstrated marketing skills. The crux is that
any brand should measure its risk taking capability before venturing into an extension.
Brand Extension 189
20.5 SEQUENTIAL INTRODUCTION OF BRAND EXTENSIONS 7
Sequential brand extensions refer to the concept of introducing intermediate extensions between the
original product and the targeted extension, then slowly upgrade to the desired brand extension. Let
us say, Lays chips wants to extend to Lay’s ice-cream, it first introduces Lays biscuits, and then slowly
Lays chocolates, and finally Lays ice-creams. Research has shown that intermediate extensions are
appropriate for medium-quality brands with medium-equity whereas a high-quality brand with high-
equity does not need to adapt this strategy. In case, this intermediate extension is a failure, then it
does not affect the medium-quality brands so much but has a serious negative impact on the high-
quality and high-equity brands.
20.6 PROCESS OF BRAND EXTENSION 8

Though there is no set process, following which every brand extension that has the successful factors
required, would be a mega success, yet there needs to be a understanding of some sort of procedure
for making the extension. Here, we give a five stage process model for making brand extensions, more
or less falling in line with the factors suggested by Aaker and Keller.3
20.6.1 Initial Research
Research and match the parent brand’s core attributes by talking to the target customers of the parent
brand. Obtaining the constructs and attributes of the parent brand is the major objective. One can use
projective techniques, factor analysis, etc., to gain an insight into these attributes and find the most
distinguishing attributes. It is necessary to analyze and get the overall attitude of the consumer towards
the parent brand.
20.6.2 Utilize Initial Research
Using this initial brand research, one has to do a lot of brainstorming and develop brand extension
ideas, which the brand manger and others, think may or may not fit with the parent brand based on
the constructs of brand extension fit suggested above. It is important to weigh these factors relatively
and seek objective data with important criteria.
20.6.3 Investigate Fit
Here, we research between the original brand and its extension. The four dimensions of the fit—
‘Complement’, ‘Substitute’, ‘Transfer’ and ‘Difficult’ can be analyzed using various qualitative and
quantitative techniques. Apart from these dimensions, certain other dimensions can also be probed
further like the relevance which is the extent to which the core brand attributes are relevant or
significant to the extension category or the recognition which is the understanding of the reason
behind the extension by the consumers.
20.6.4 Select Brand Extension
If a few extensions are supposed to be viable based on the parent brand and the research conducted,
then select the brand extension which the research indicates has the highest level of fit with the core
brand and as such is most likely to be successful. If one wants to conduct a brand extension which has

a lesser degree of fit with the core brand, identify which fit construct is lacking and then seek to alter
the consumer’s evaluations of the brand via advertising or marketing to increase the degree to which
the brand extension fits in.
20.6.5 Conduct Brand Extension

Ensure that the above steps have been carefully performed and see to it that there are no core changes
in the brand perceptions or brand beliefs in the parent brand due to the extension.
20.7 SUCCESSFUL STRATEGIES FOR BRAND EXTENSION 9
Once the brand extension has been decided upon, the next job is to find out the elements of marketing
mix for the brand extension and then think of the most successful strategies to be adopted for brand
extension. Some of the principles adopted and tested in making an extension a success, have been
quoted below.
20.7.1 Anticipating the Risks for the Extension

As discussed earlier, brand extensions are based on the following three assumptions:
1. The positive connotations associated with the parent brand will be transferred to the new extension.
2. The negative associations will not be transferred to the extension.
3. The positive attributes of the parent brand should not become negative when associated with the
extension’s product class.
Hence, proper market research has to be carried out to verify these hypotheses. At the same time,
proper brand communication has to be done to be sure of the second and the third hypothesis
holding true.
20.7.2 Naming of the Brand Extensions

There is a thumb rule of branding that states that the more a parent brand expands, the greater is the
need to add sub-brands to these extensions. This will lead to a multi level brand structure. It may also
be noted that when the extension is close to the core brand, then it should not receive a specific brand
name. However, when it is remote, the extension can be assisted by surname or a sub-brand name.
Most of the brand naming strategies that have been discussed in the earlier chapters should be adopted
while naming the extension.
20.7.3 Co-branding
When two different companies pair their respective brands in an effort to synergize, such collaborative
marketing effort is called as co-branding. It helps in enhancing the competitiveness of the two companies
and also adds a communication dimension by means of the image of the alliance. Each brand brings
part of its equity to the other, reduces the total marketing cost and makes the extension more credible.
More information is given in the subsequent chapters.

Brand Extension 191
20.7.4 Temptation to Under Invest

Advertising costs will increase enormously if a company has to support too many brands. Hence,
companies make a trade-off and since a brand is already well known, it seems sensible to under invest
on communication for an extension as compared to the launch costs for a new brand which has to be
avoided.
20.7.5 Reinstating Brand Values

Things may happen otherwise in certain companies the more the brand extends, the more the company
concentrates on its communication strategy on the extensions rather than the parent brand. This may
lead to the erosion of the parent brand’s values and beliefs of the consumer. In order to get out of this
trap, companies need to provide communication support to the extension, while reinforcing the parent
brand’s image and core attributes.
20.7.6 Coherence of the Marketing Mix

Brand extension does not mean applying the parent brand name to the new extension but is also
accompanied by the development of marketing mix for both the original brand and its extension. The
failure to master the marketing mix in either of the parent brand or for the extensions would fail the
expectations of the company.
20.8 CHECKLIST FOR BRAND EXTENSION 10
Brands may exist even without the products they have originated from. Brands and their extensions
have to be viewed from the company’s long-term point of sustenance. Brands can live for hundreds of
years if they are well-managed. Extensions offer the potential to leverage the parent brand’s equity but
at times, may even dilute the original brand’s equity or cannibalize sales of the parent brand. Hence,
too many extensions are also harmful to the company. Thus, companies need to analyze the reason,
feasibility as well as profitability for the extension. This can be done with the help of the following
checklist on extension strategy.
20.8.1 Analyzing Reason Behind the Extension

The primary success factor for any brand extension is the analysis of the reason behind the extension
of the brand. Sometimes brands are extended for inappropriate reasons such as technology enabling
new forms of product delivery or even to vie for market attention and create clutter. Any successful
extension should address genuine consumer needs developed from the consumer demand side and
not from the supply side.
20.8.2 Rationalizing the Extended Brand Portfolio

The broader sense of brand portfolio including all the factors and brands that a consumer keeps in
mind when he is in a buying decision mode, have to be justified from the company’s and the consumer’s
perspectives. Any company having a portfolio of brands and its extensions should frame strategies
that are based on both the internal organization and the perception of the external marketplace.

20.8.3 Relevance to Customers

The company going for extensions should have knowledge of the consumer’s frame of reference of
these brands, and should be able to understand the blend of customer’s attitudes and the situations in
which the brand is used in order to obtain customer’s perception. The general tendency of the
marketers is to look at the opportunity of products and not at the needs of the consumers. This will
lead to a failure of the product.
20.8.4 Positioning through Customer Perception

It is important to obtain the perception of the consumers before deciding on the positioning, as it
helps bridge the gap between what customers perceive the brand today and where they want to look
into the future. This is possible by leveraging not only the brand’s equity but also on its emotional
values and benefits that are relevant to the customers.
20.8.5 Deliver the New Promise

After extending the brand, it is imperative that the brand has to fulfill the promises it has made to the
customers. Once it fails, the company suffers because of its extension as well as from the parent brand
itself. The failure to deliver the necessary promise of the extension would also affect the parent
brand’s image and sales. To regain its lost status, considerable amount of money and effort is needed.
This happens mostly in service industries and in industries that require long lead times for bringing
about the change in the organization or in the infrastructure.
20.8.6 New Opportunities and Benefits

The extension of any brand has to support its parent brand i.e., strengthen the parent brand’s benefits
and emotions associated with it. Thus, new opportunities and benefits found for the consumers for
the extension should not jeopardize the attributes and benefits associated with the parent brand.
20.8.7 Countering Brand Dilution

One of the major challenges of any brand extension is that the parent brand equity may get diluted. If
there happens to be a misrepresentation of consumers’ perception of the brand, it could be termed by
the consumers as an inappropriate extension to the original brand. This could dilute the parent brand
itself. Proper care has to be taken for so as this does not happen.
20.8.8 Frame a Category

This can be a way in which a brand extension can be successful. Significant differentiation from the
competitors and framing a separate category or an altogether new category for the new variant may
add value to the extension.
Companies have to constantly fight and win competition. Product managers and brand managers
have to foresee various attacks from the competition as and when they launch/build their products/
brands. All marketing and brand building efforts go in vain without adequate strategies to tackle the
competition. The following chapter focuses on this key issue of marketing strategies to fight competition.

Brand Extension 193
REVIEW QUESTIONS
1. What do you mean by brand extension?
2. Explain the possible success factors for brand extension from the customer point of view.
3. Explain the role of company reputation in brand extensions.
4. The probability of brand extension success is low in new markets. Validate this statement with
examples.
5. Explain the features of brand extensions in a competitive situation of the Interbrand approach.
6. Explain the sequential introduction of brand extension with examples.
7. Develop the five-stage process model for making successful brand extension.
8. What are the assumptions to be made before going for brand extension?
9. What is the role of marketing mix for successful brand extension?
10. Prepare a checklist to go for successful brand extension.
REFERENCES
1
http://www.pg.com.pk/pgbg.shtml.
2
Kotler, Philip., Marketing Management, Prentice-Hall, 11th edition, 2002, p.437.
3
Aaker, David A., and Kevin, L. Keller, “Consumer Evaluations of Brand Extensions”, Journal of
Marketing, Vol.54, January 1990, pp.27–41.
4
Aaker, David., “Managing Brand Equity—Capitalising on the Value of the Brand Name”, Free
Press, 1991.
5
http://www.brandchannel.com/images/papers/classic_brand_concept.pdf
6
http://www.brandweek.com/brandweek/index.jsp.
7
Keller., Kevin, L. and David A. Aaker, The Effects of Sequential Introduction of Brand Extensions,
Journal of Marketing Research, 1992, Vol.29, No.1, pp.35–50.
8
http://www.handmadepublishing.com/brandext/brand% 20extension% 20intro.pdf.
9
Kapferer, Jean Noel., Strategic Brand Management, Global Business Press, 1994, p.269.
10
http://www.ubmail.ubalt.edu/~dpitta/BE.pdf.

new entrepreneurs who have reached positions of prominence in the markets they have entered.
Rapid changes are taking place at the bottom of the pyramid (as coined by C.K. Prahlad) which the
top companies are yet to notice strongly. May be people are still spending, but aren’t buying the
bigger, better known brands. And maybe the companies truly catering to the bottom of the economic
structure are smaller, unknown companies and not the multinational companies. This problem persists
in both consumer goods (durables and non-durables) and in industrial products. There is always a
niche market for certain unbranded products like color televisions, industrial generators, and apparels
which the local players manufacture. The local players always dominated commodities. In the recent
times, in about five years, the competition is very much more pronounced in the fast moving consumer
goods industry. Local players are giving a tough competition to national and international brands. In
this rapidly changing and competitive scenario, both local players and established brands of the Fast
Moving Consumer Goods industry (FMCG) are struggling to keep their market shares. Keeping in
view of the strengths and constraints of the established and local players, certain strategies are dealt
with in this chapter.
21.2 FACTS FOR CONSIDERATION

Several of the myths surrounding the FMCG business, once considered a heaven for defensive
investors, have been shattered over the past couple of years. Regional and local FMCG brands have
proliferated lately, some managing to have a significant market share of the large players, by focusing
on regional pockets. As competition hoots up in a slowing market, the players have to cope with a
hitherto unknown variable—pricing pressure. In quite a few categories, the players are using price cuts
to woo consumers. The turmoil seems to be increasingly reflected in the financials of the major listed
companies. Sales growth has hovered at single digits for at least two years now. 2 A recent
Goldman Sachs report cited several instances where the small, but nimble competitors, have gnawed
away the market-shares of multinationals. Whether it is oil, biscuits, packaged tea, salt, detergent, or
even hosiery small players are giving the large manufacturing companies a stiff competition by selling
quality products at significantly lower prices, albeit to niche regional markets. These are not companies
that are producing fakes, counterfeits, or look-alike products. They are confident enough to create
their own identity. In several product categories the threat is not from China, but right here from
local brands. In this purview, before knowing about the successfully demonstrated strategies of both
local and established brands, we shall examine the various facts relating to both established players
and local players, which support the perception of this scenario. The following section gives us an
insight into the recent trends and happenings with the reasons thereof for both local brands and
national/multinational brands.
21.2.1 Anchor
A switch maker—Anchor Electronics and Electricals—turned consumer products upstart. In the six
years that it has been in existence, Anchor toothpaste with its 100 per cent vegetarian proposition has
picked up a 10 per cent market share according to the retail audit house, AC Nielsen–ORG Marg,
and has an annualized monthly revenue equal to 40 per cent of Hindustan Lever Limited’s oral care
portfolio. This, in just five years of making toothpastes. With Anchor confectionery already in the
market, soap, talcum powder, shampoo and a host of skin care products are being unfurled by them.3

Competitive Strategies for Local and Multinational Brands 197
21.2.2 Cavincare
Cavincare’s Chik shampoo trails market-leader Clinic by only about 2 per cent in market-share by
volume. Chik’s share has climbed to 21.6 per cent from 7 per cent in 1998 and its other brand Nyle
has a 4.6 per cent share. It has a 9 per cent share in the Rs. 750 crore (Rs. 7.50 billion) fairness cream
market with the Fairever brand.2
21.2.3 Ghadi Detergent

Ghadi, a regional detergent brand, has achieved sales equal to 28 per cent of HLL’s detergent portfolio.
Much of the progress came in the past three–five years2 .
21.2.4 Shapers
Jayesh Choksi’s ‘Shaper’s’, a sanitary product, had already made inroads into the market shares of
multinationals like Johnson & Johnson, Procter & Gamble. Today, Shapers has a 6 per cent market
share and it’s growing at a significant pace to touch 15 per cent in the next two years.2
21.2.5 Paras Pharma

Ahmedabad-based Paras Pharmaceuticals is in the expansion mode. Its ‘Moov’ pain relief ointment
which is a major competitor for Reckitt Benckiser’s Iodex brand, cold reliever ‘D’Cold’ and anti-
fungal creams ‘Itch Guard’ and ‘Ring Guard’ are growing at a rapid pace and have commanded
noteworthy market shares.2
21.2.6 Other Brands

North-based Surya Foods, the maker of Priya Gold biscuits, has been rapidly gaining market share
and is a Rs. 100 crore brand. There is, also Hasmukhrai & Co’s ‘Society Tea’ which is well established
in Mumbai and Maharashtra. Products from Jyothi Labs, like ‘Jeeva’ herbal soap and ‘Ujala’ brightener
are fast becoming important players in their categories. Ujala is now a stiff competitor for Reckitt
Benckiser’s Robin Blue.2
21.2.7 Report of A.C.Nielsen 4

According to a survey of the major FMCG players in India, the market shares of the top FMCG
companies in terms of turnover have declined by 9 per cent. The only listed company to make it to the
growth chart is Marico, followed by Cadbury India. According to AC Nielsen, in the past two years
three things have emerged: 1) foods as a business is growing and an opportunity for branding is there;
2) there has been a continued pressure on the top players of the market with new players coming in;
and 3) the emergence of new entrepreneurs in categories like edible oils and packaged foods has
increased.
21.2.8 HLL
The Wheel vs. Fena detergent war began in October last year when HLL reportedly objected to
Fena’s new advertisement which said lemon power was an obsolete claim and showcased the “latest”
cleaning technology in its ad.5 This openly expresses the importance given by HLL to a local brand.
To react to the competition Hindustan Lever had decided to cut prices of some of its premium Power
Brands by 10–15 per cent. Among the premium products that have gone cheap are Surf Excel, which
has seen its price tag slashed almost 15 per cent; a host of shampoo and toothpaste brands that have
seen a degree of saturation will also see prices fall. However, Wheel, a detergent competing with the
likes of Nirma and Ghadi, will come at the same price. Clinic Plus, Sunsilk, Pepsodent and Close-up
are the other top brands under the price scalpel.6
21.2.9 Tata Salt
While HLL has reacted by price cuts, TATA has reacted more strategically. Tata Chemicals had
initiated new efforts to involve and engage its business associates in marketing and strategy processes
to enhance the brand muscle of Tata Salt. Tata Chemicals had recently conducted customized training
programmes for its channel partners—distributors and their field force—with the aim of making Tata
Salt’s position even stronger in the Indian market.7
21.2.10 Colgate
Despite technology support from the global leader in oral care, a strong brand equity and distribution
network, Colgate has been facing the threat of losing its market dominance. The company has adopted
an aggressive strategy of new launches and a significant hike in marketing expenditure. The company
has been targeting schools to create oral awareness among children. Rural reach and penetration is
sought to be increased by conversion of non-users through various sales promotion measures such as
small volume low priced sachets, distributing free toothbrushes, rural van program, etc. The company
has been embarking on heavy advertising in the wake of stiff competition.8
21.2.11 P&G
In the detergents market, P&G has dropped prices of its brand ‘Tide’ by about 53% for a 500gm
packet. P&G for instance, claimed a 200 per cent expansion in Tide volumes after the price cut1 .
Pitfalls of MNCs Most of the local firms have fairly capitalized on the pitfalls of the multinational
firms in various respects and devised their own strategies based on the competitors’ weaknesses. Some
of them are as follows:
a) Lethargy The multinationals that have mostly lost out to these local players have done so
because of their complacent—‘nobody can beat us’ attitude.
b) Ignorance A relative lack of local product information and product design has made MNCs sit
on the backseat as compared to local players.
c) Bureaucracy An increasing distance between the consumers and the market in the lifestyle of
executives results in their picking up products off the well-stocked shelves of the overseas principals/
associates.
d) Adaptation A tendency to concentrate on the elitist ends of the market in which product
attributes which are required in overseas developed markets were offered to the Indian consumer
without proper redesign or research for the Indian wants or adaptation of the product.
e) Traditional approach A traditional approach to marketing—e.g. that advertising should always
follow distribution; that distribution should always be supervised by your own sales force; that
you use exotic and sophisticated models in advertising and keep away from ‘ethnics’ is all proving
to be an advantage for the local players.
Thus it can be seen from the above facts that the proliferation of local players in the Indian
market has caused considerable threat to the national players and they are focusing on retaining their
market share with a number of counter strategies. If we analyze the success story of many local brands,
it will be self evident that their marketing strategy is not a jargon filled new model of marketing. It is
more of common sense marketing. We further dwell into the successful strategies adopted by the small
enterprises and also give an insight into the counter strategies adopted by the national players.
21.3 PRODUCT STRATEGY–INNOVATIVE APPROACH
In terms of the product strategy, both the local and the established players have resorted to innovativeness
and the strategy is as follows:
21.3.1 Local Brands

The small players have an innovative approach to marketing which is not constrained by the book of
rules written by professors, market tradition and experiences of other manufacturers. Opportunities to
innovate are plentiful in the Indian market place. Local brands, through a better understanding of the
consumer in that area/region can improve or defend their position by innovating. Constant innovation
can keep the local and regional players ahead of the game as they cater to a very small segment and
allow them to define the rules of the market there. A good example could be the case of Velvette
shampoo. The makers of Velvette shampoo, a local Indian brand, observed that a large number of
consumers, especially rural consumers, did not buy shampoo as they could not afford the high outlay
called for by the available pack sizes in the market. They launched Velvette shampoo in sachets and
gained a strong foothold in the hair care market dominated until then by HLL and Colgate. Later on,
Velvette could evolve to almost a national brand status also. Chik shampoo, promoted by Cavincare
started initially in the rural areas by campaigning of shampoo. They demonstrated to the rural consumers
on how to use the shampoo and what benefits it would accrue. Hence, they could easily penetrate the
rural mindset and overcome yet another barrier.
21.3.2 Established Brands

Innovation is not limited to local or regional players. Big brands need to first learn the requirements
of the market and then adapt their product to that regional requirement. For instance, a company like
ITC in cigarettes (Wills, Gold Flake, etc) along with the packaging of tens and twenties may also
promote another option consisting a bulk of say, hundred pack or fifty pack thereby reducing the
packaging cost, yet maintaining the same product. This may be adopted in some areas or regions
where the sale of loose cigarettes is phenomenal.
21.4 DISTRIBUTION STRATEGY
The distribution strategy adopted by the local firms and the established firms tends to defer from each
other.

21.4.1 Local Players—Trade Relations

Lower prices apart, a key attribute that seems to have helped sustain the local players is their willingness
to offer much larger dealer margins. This appears to have generated some dealer—push for the brands
at a time when distributors have also been bearing the brunt of the slowdown. Lower prices coupled
with higher dealer margins have meant operating profit margins of less than 10 per cent for the local
and regional players. But most of them appear to be content with playing the volume game. Most of
the regional players give high trade margins and in turn go for a push strategy where the dealer or the
retailer will push the products for the extra amount they earn on these brand sales. The local players
are thus giving a tough fight for the MNCs money and are slowly garnering market share.
21.4.2 Established Brands—Defending Trade Relations of Local Brands

Market research could be given more importance to get a better knowledge of the markets. Consumer
forums might be effectively built with loyal customers. Retail outlets could be networked to track the
purchase of the customer. Companies like TVS-e have come out with a software that could be run in
the retail outlets for the purchase tracking of customers. In case where the variants of the products are
sold in the kirana shops, a forum could be formed comprising of the shopkeepers that might be used
to extract information about the consumers. A recent trend is the technological advantage for the
MNC/National brands. RFID (Radio Frequency Identification) is a technology used by any established
brands such as Wal–Mart to track consumer purchases, their buying habits, etc. RFID also helps
companies to know about the performance of their various products in particular geographical areas/
retail chains, etc. Also stock-outs may be prevented and distribution channel strengthened with the
help of this technology. Hence, allocation of resources, insight into consumer behavior, and purchasing
habits becomes easier for these big brands. This might help them to counter the local players in terms
of making use of the valuable information provided. Smaller companies cannot afford to utilize this
technology owing to its high-cost factor.
21.5 PRICING STRATEGIES
Both pricing and costing elements are being used by the companies in a way that favors them and out
beats the competition. Some of the common strategies are as follows:
21.5.1 Local Brands—Aggressive Pricing

The ultimate arrow in the local players’ quiver is by offering comparable products, at much lower
prices. Lower prices appear to have appealed to value-conscious consumers, thereby increasing the
market shares of the local players in a very short time. But there seems to be some uncertainties about
the ability of the regional players to replicate their successes on a larger scale. In the edible oils market,
as national players were forced to hike their selling prices in response to rising commodity prices, both
‘Gemini’ and ‘Gold Winner’ brands have used aggressive pricing to persuade consumers to use these
brands instead of the well-known national brands. Packed tea too, has seen similar trends. A good
example is Wagh Bakri Tea in the state of Gujarat. It had challenged the competition posed by HLL
and Tata Tea with a severe price competition and at a comparable quality. It appears to have saved
much on packaging by using a low quality packaging material. 9 The limited differentiation in

grocery and the flexibility offered by a restricted area of operations have stood these local brands in a
good stead. Anchor White, among the few debutants in the toothpaste market to garner a significant
share, came into the market with a penetration strategy offering very low prices to lure consumers into
trying the product.
21.5.2 Local Brands—Leveraging Lower Costs

Typically, local brands may have the advantage of lower costs of production and therefore can compete
on price. However, they might not be comparable on quality with their international competitors.
Today, small manufacturers can have all the information they need; they can access global suppliers of
raw material, key ingredients and source their packaging and labels from anywhere at competitive
prices. A good learning example would be MTR packet foods. Since the market size was not big in
packet foods, MTR started as a reasonable equivalence to homemade products, and production
techniques were implemented on a smaller scale. It was labor intensive both in manufacturing and
packaging, and MTR took advantage of cheap, simple, attractive packaging material. MTR also had
low overheads and was able to operate at low levels of production. Distribution was managed by using
well-located distributors who earn good margins and these local players have no sales force to manage.
In contrast, this market was too small for the likes of Levers and other big players and would have
taken years to develop. The overheads allocated were more than the sales. The selling was handed
over to high pressure salesmen who overloaded the distribution system, resulting in damage to the
goods, which many times reached consumers with insects infected packets having got into the package.
Low volumes also meant high production costs for such big companies. Hence, the low scale of
production has benefited MTR Foods. Smaller companies may try to implement this strategy.
21.5.3 MNC/National Brands—Fighting the Price War

A price cut may not be the best way for an established player to fight a price war. According to Rao &
Bergen (2000), slashing prices would decrease industry profitability placing everyone in a worse
position than before. Price leadership on the other hand, is one way to reduce industry wide price
competition. Price leaders are likely to be reliable enforces of price structures responding quickly and
decisively to price cuts by the competition without cutting prices. However, companies tend to be
careful of this approach in order not to get accused of price fixing. As there are industry price leaders
as well as price followers, these behaviors are acceptable. The price leader is determined based on
demand forecasts and target pricing objectives (Roy, Hanssens, & Rajud, 1994).10 The following table
gives a clear idea of how established brands should fight local brands on the pricing aspects.
11
Table 21.1 Way to fight price war
Non-price Responses Price Responses

Compete on quality Use complex price actions
Reveal strategic intentions and Introduce new products
capabilities.
Co-opt contributors Deploy simple price actions

21.5.4 MNC/National Brands—Countering Low Cost Advantage

The lower cost advantage may be countered by a high price quality equation. With the sophisticated
equipments that the national players would have acquired so far in improving on the quality aspects,
may be utilized effectively against local players. Considerable market research needs to be done before
any quality improvement is done. Various tools like QFD (Quality Function Deployment) could
come in handy in industries, which are ‘quality sensitive’. The MNCs have, of late, made a few
attempts at persuading consumers to try out higher-end products in certain categories. Henkel, SPIC’s
Pril liquid dish-wash, compact detergent powders, and the Lux liquid body-wash range are such
attempts.1
21.6 PROMOTIONAL STRATEGY— MEDIA FRAGMENTATION
Companies both small and large may use media and advertising to their relative advantage in addition
to sales promotion strategies. One such effective strategy, which has been used extensively, is media
fragmentation.
21.6.1 Regional Players

Pursuit of regional strategy has become even more viable with explosive growth of the electronic
media. It has been now possible to harness the power of television and reach the target audience cost
effectively. Local companies may harness the power of regional and local advertising which would be
more appealing to the specified consumers rather than the national advertising strategies. The key
difference is the efficiency of the reach. ‘DOTS’ Appalam, a regional player in TamilNadu puts up a
very effective media fragmentation by advertising on billboards locally in TamilNadu and advertising
in local Tamil TV channels taking up the prime slots. In contrast, Shri Mahila Gruha Udyog’s ‘Lijjat’
papad, a national player (which incidentally also started as a local player) is unable to exercise the
advantage of the effective reach in media. Another such example would be the case of ‘Ambica
Durbar Bathi’ incense sticks of Andhra Pradesh. The TV advertisement was not that interesting as it
did not have any glitz. However, it was able to connect to its target customers because it was in the
language of its target customers. These brands send a powerful message to their target customers that
they are made for each other. Dandi namak, Ujala, Ghadi detergent, and Chik, projected that they
belonged to the lower middle class and this worked wonders. 12 Though most of these regional
companies may not be able to match the market leaders in ad spent, they have used focused regional
and local advertising to draw consumers’ attention to their brands. The mushrooming of local and
regional media has also undoubtedly helped the local players in optimizing their ad budgets.
21.6.2 National/MNC Brands

It would also be possible that national brands copy the local flavor of advertising. They tend to take
more care in choosing the ad agencies and proper interaction needs to be done before the media
schedule is arrived at. It may be better for either the agency or the company to have its own research
team for deciding the media schedule in a particular geographical area, instead of completely relying
on TRP ratings or NRS, IRS surveys, etc. Established players may make effective use of local consumer
forums in deciding the ad strategy. Companies may also try building relations with publishers of such

magazines where TV serials/programs are reviewed. Many large players have also started conceiving
different advertisements for different regions of the market.
21.7 OTHER STRATEGIES
There might be other strategies that big and small companies use to increase their market shares.
21.7.1 Local Brands—Thorough Knowledge of Local Market

Local brands may have an advantage of understanding the local consumer and this enables them to
identify a neglected market opportunity. Also small players may have the advantage of maintaining a
very effective relationship with the distributors and retailers. This seems not practical for MNC/
National players who cannot afford to survey each and every corner of the country to identify the
demand or the niche market. Despite the capacity of big brands to learn and adapt to the local market,
the fact remains that the local player has a highly leverageable advantage, i.e. time. Local firms may
try to exploit this lead time to consolidate their positions and erect up barricades to limit the potential
damage. A good example would be Ghadi detergent in Kanpur. It had been far too significant player
to ignore the competition for the established brands like Nirma, Wheel, etc. Ghadi could achieve this
by understanding the local consumer psyche and leveraging on the relationship with local distributors
and retailers by offering them better margins and credit facilities.
21.7.2 Established Players—Acquisition and Political Lobbying

One of easiest strategy for big companies seems to be acquiring local players in buyout deals or use
pre-emptive tactics or guerilla tactics to overcome their resistance. They may also try to influence
through politics and other means or reward the substantial smaller companies to move out of the
business.
As we have seen, the emergence of local players has become an issue of importance to the
established players. Local players may be considered as a serious threat by the well-known brands.
Both the regional players and the MNC/National players need to take corrective steps and may
implement one or a combination of the above stated strategies to keep their position and market share
intact. Another area of serious competition for the bigger brands apart from the local players is from
private labels that are discussed in the following chapter.
REVIEW QUESTIONS
1. Briefly sketch the brandscape in the Indian environment with examples.
2. Explian the success stories of Indian regional/local players in the following segments:
a) Dental care
b) Women care
c) Health care
3. What are the strategies followed by MultiNational Corporations to defend their positions against
local players with examples?
4. What are the pitfalls of MNCs in devising the strategies against regional/local brands?

5. Local brands mostly rely on aggressive pricing strategies—Comment on this statement.

6. Compare the distribution strategies followed by both MNCs and regional brands.
7. Suggest the ways for MNCs to face the price war of local brands.
8. As a media consultant, devise the media fragmentation strategies for both MNCs and regional
brands.
REFERENCES
1
Dawar, Niraj., and J. Ramachandran, “Defending Indian Brands: Strategies Against the Foreign
Invasion”, 1999.
2
Krishnan, Aarati., “FMCGs: Being Pushed to Add Value”, Hindu Business Line, June 29, 2003.
3
Lakshman, Nandini., “The Big Small Brands go for Gold”, can be accessed at www.rediff.com/
money/2003/july19spee.htm.
4
Das, Nisha., “MNCs, National Players Lose out in FMCG Sector”, AC Nielsen, can be accessed at
www.domain-b.com/marketing/market_research/20030417_fmcg.htm.
5
No Lemon in “Wheel”, Admits HLL, The Financial Express, December 23, 1998.
6
John, Satish., Cutting Edge to Lever Strategy, can be accessed at www.telegraphindia.com/1030428/
asp/business/story_1917151.asp
7
Tatas Lead Branded Salt Market with 37% Share in Asian Age can be accessed at
http://www.tata.com/tata_chemicals/media/20020806.htm.
8
http://www.indiainfoline.com/comp/colg/mr02.html.
9
Krishnan, Aarati., “Regional Brands Keep FMCG Giants on their Toes”, Hindu Bussiness Line,
December 30, 2002.
10
Sturges, David., Mary Hanssen, Roy.A., Jainke Liu, Alicia Rios, A. Rao, M. Bergen, and
D. Scott, “Strategic Analysis in Different Market Structures”, www.backlass.panam.edu/
hush3690.htm.
11
Roy, A., Harvard Business Review, 2000.
12
“The Changing Face of FMCG Marketing”, www.indiainfoline.com/fmcg/feat/thch.html.

22.2.1 Brand Equity Investments

The seemingly most important assets for all FMCG and consumer durable goods companies’ are the
brand names they own. Brand equity—the positive differential effect of knowing the brand name has
on the consumer (Chapter 18)—has to be carefully nurtured by each successive brand manager. Brand
managers need to continually monitor the consumer perception of the brand. Brand positioning
ought to be consistent and clear, supported by periodic product improvements that are essential to
keep the brand contemporary without distorting its fundamental promise. There needs to be an
investment continuously in product improvement that would enhance the brand’s perceived superiority
and provide for informative and provocative advertising strategy. This might be able to sustain the
brand’s price premium over competition, which would raise the private label’s cost as they try to
constantly imitate and play-up with the brand.
22.2.2 Wise Innovation

As we have already seen in the earlier chapters, line extensions may confuse consumers, the trade,
and sales force, and reduce the manufacturer’s credibility with the trade as an expert on that category.
If there is too many line extensions, they would fragment the business and the average retail sales per
item will then decline. That in turn, might be the opportunity for a private label program that focuses
just on the brand’s best sellers and therefore can deliver attractive average sales and profits per item.
Hence, manufacturers should have genuine line extensions so that their major products are not
cannibalized.
22.2.3 Use of Flanker Brands

Brand managers may need to take precautions while launching flanker brands. Most of these brands
should be used very sparingly if they operate in the price range in between a private label and a
national brand. If a national brand cuts prices and competes with private labels, a huge contribution
loss would occur to the national brand. It may result in brand identity being confused with and also
equity erosion. Hence, extensive usage of flankers may not always be beneficial.
22.2.4 Building Trade Relations

Generally, private label manufacturers tend to know less about the goods, customers and their categories
than the other consumer goods manufacturer or their brands as the goods manufacturer would do a
lot of market research and consumer behavior study armed with a superior knowledge of production
process. The problem of private labels arises mainly due to the retailers wanting to maximize their
profits per se and the manufacturer may need to address this. However, it is possible for retailers and
brand producers to maximize their profits, jointly/together. This happens when a manufacturer
encourages private label rather than fight it directly for certain products in which the firm has no
presence or other constraints to enter. In such a case, manufacturers may also loan retailers and
accountants to educate them about private label profitability. Some value added services like offering
to examine retailers purchase data, conducting in-store experiments and doing some market research
work for the retailers can be offered by the manufacturer for some return of his interest. However, this
has to be taken cautiously, as learning about the private label profitability may adversely affect the
manufacturer if the retailer strikes deals with other manufacturers, which would have an impact for

Strategies Against Private Labels 207
the previous manufacturing partner. The manufacturer may offer the retailer to try his product for a
private label in a category he is not present. This way, both of them can be benefited.
22.2.5 Managing Price Spread

Market skimming pricing is one of the old tactics used by marketers but they no longer seem attractive,
as consumer’s knowledge base has widened over a period of time. The sales promotion and advertising
costs have increased subsequently over the years and these communication costs would perceptibly
have an impact on the profit margins. It is optional to maintain the level and frequency of promotions,
advertisements, and also the list prices. If there are several crests and troughs in the list prices, then
the consumer may not trust the manufacturer and this would further erode the value of the brand.
Thus, managing a price spread may seem essential for the manufacturer to counter the customer’s
perception about his brands.
22.2.6 Examining the Price Differences

National brand manufacturers are supposed to have a check on the price gap between the price offered
to the distributor and the end consumer’s price. This can also be compared between each of the other
brands, including private labels, in every market he/she wishes to operate. This would make them
understand how elastic the price is for each national brand as well as for the private label. The benefits
of understanding the price elasticity effect are explained herewith.
22.2.7 Brand Price Elasticity Curve

Knowing the brand’s price elasticity curve is of utmost importance when any pricing change or
promotion is aimed at. It is essentially useful to smart price and to maximize the profitability of a
brand. While aiming to compete with store brands, national brands may tend to reduce their prices,
which would have an influence on the profit contribution to the company. However, a price reduction
on a private label is twice as sensitive as a price reduction on a national brand. This means that the
volatility associated with sales and price is high for a private label than for a national brand. A
reduction in price of a national brand would swing twice as many sales from private labels to national
brands as a corresponding increase would equally swing sales to private labels from national brands.
Hence, understanding this equation may give a long-term perspective to the pricing and sales promotion
aspects of national brands.
22.2.8 Capitalizing on Sales Promotion

National/MNC brand manufacturers have a problem when retailers display copycat private label
products alongside their brands highlighting the price gap between them. Companies like Nestle,
HLL, P&G, and Britannia come up with advertisements, which highlight these look-alikes and warn
consumers. They may not prevent this type of onslaught from store brands. However, they will
possibly make the most of sales promotion tactics to promote the merchandising of their brands.
Manufacturers may perhaps counter this by promoting special in-store displays and stressing on
performance based merchandising allowances. Retailers may be rewarded for increased volume of
sales or the manufacturer can possibly take up category management for the retailer, with a view to
help the retailer increase his margins. However, what works for one category may not work for the

other. Categories differ widely in private label penetration—high or low private label penetration, due
to production, distribution or other problems. Manufacturers need to devise separate strategies for
separate categories based mainly on the price quality gap between private labels and national brands,
the relative profitability, and the potential cannibalization cost of any private label or value brand. In
categories where the private label penetration is low, manufacturers may strengthen the entry barriers
and take preemptive actions. In categories where the private label penetration is to a medium extent,
manufacturers can probably consider value-added packaging changes or think of competing on quality
aspects. When private labels have cannibalized the sales of national/MNC brands, the emphasis may
be laid on lowering the costs in supply chain-through minimum orders, truck load and direct shipment
discounts, more efficient trade deals, etc.
22.2.9 Fighting Seriously

The biggest problem for many national/MNC brands is that they may not take private-label competition
seriously until it hits them severely. They ought to consider strategizing for competing with store
brands, as much as they do for their other national competitors, in their annual marketing plans ahead
of the year. The steady growth of premium private labels and nation-wide retailer chains could make
this oversight more hazardous. The encroachment of private labels may probably be limited by national-
brand marketing plans. National brand manufacturers may tend to resort to legal action against copycat
private labelers who use similar packaging shapes and colors as national brands. This may help the
national brand manufacturers in arresting competition from private labels.
22.2.10 Winning Jointly

As much as a thought of supplying to private labels by national brands has been dealt with earlier,
manufacturers can possibly consider winning in cooperation with each other against private labels.
Manufacturers of all national brands may form a coalition or an association that takes active steps in
legal battles as well as in promotion against private labels. This consortium may take active steps for all
the national brands combined together against threatening private labels.
MNC/National brands manufacturers might use some or all of the strategies outlined above to
win the battle against private-label producers.
22.3 WINNERS AND LOSERS—THE BCG MODEL 3
Even though the growth of private label’s share can differ dramatically from one category to another
and also from one region to another, private-label growth is predictable to a degree. Manufacturers
wishing to counter store brands adopt the following strategies, according to this model.
22.3.1 Investing in Brand Equity

As stated in the earlier model, this model also suggests in building a brand with a strong customer
loyalty as one of the best defenses against private label encroachment. There are many instances where
manufacturers spent millions in advertising over years and have regained a good share from the
private label versions of their products.

22.3.2 Innovation in a Stream

Most of the private labels eat away the share of manufacturers of national brands by imitating their
products. Continuous innovation by companies makes it difficult for private labels to copy national
brand products. Innovations such as Colgate Herbal and Close-Up Oxyfresh are examples that have
held private labels at bay by innovating in accordance with the market needs.
22.3.3 Supporting Merchandising and Promotion
National brands are likely to guard themselves from private labels through various merchandising
and promotional support specially, in consumption—elastic categories like chocolates, cookies, snacks,
etc. Wherever there is a high cost of advertising and promotion involved to promote products, the
private labels may be kept out from encroaching through well-strategized advertisement and promotional
campaigns.
22.3.4 Logistics and Distribution
Most of the private labels possibly would not be able to match the distribution strength of national
and MNC brands, as majority of them are confined to particular retail chains. Giant soft-drink
companies like Coca-Cola and Pepsi have successfully competed against private labels by leveraging
on their distribution strength and logistics support. In cases of food products and products that have
shorter shelf life, national brands might try to ensure superior merchandizing, reach and lift to
overcome store brands.
22.3.5 Low Prices and Line Extensions
Maintaining a smaller gap between branded and private label products appears to be a key profit
driver and a survival strategy for national brands, especially in categories where the price is more
elastic. In case, the brand is a premium brand then manufacturers might consider alternate lines to fill
the price gaps between the private labels and their own brands.
22.4 HITTING HARD—THE STANLEY MODEL 4

Apart from reasons cited in the above models, the Stanley model throws light in the following directions
about the competition from private labels.
22.4.1 Coercive Power
The Stanley model takes a different view that it focuses on coercive power being used on the retailer.
The retailers could be inclined to believe that there would be a negative backlash of the private label
image affecting his own retail business. Also financial control concerns like lack of financial support
and coercing that the customer would never compromise on quality if the private label fails are some
of the tactics that are generally used by the manufacturers.
22.4.2 Inventory and Carrying Costs
Private labels would have, most often than not, high inventory and carrying costs. Sales of these
would be affected by stoppage of products even for a few days. Blocking the private labels at the
retailer level and the distributor level may be considered by the national brands. Certain big companies

adopt mega-marketing strategies to disrupt the distribution channel of the private label for a certain
period, which would hamper the overall sales.
22.4.3 Fighting Brands

Widening the price–quality gap between the manufacturer’s brand and the private label along with a
‘fighting brand’ to displace private labels on retailers shelves is yet another effective combination
strategy. However, manufacturers launch a fighting brand clearly aiming to fight the private labels,
and cannibalization of the original brand happens most of the time due to improper market research
and positioning. Launching of a fighting brand may not be taken instantly to counter the store label
but careful market research about the necessity and the market acceptance level might be taken care
before the launch of a fighting brand. Also while choosing the fighting brand, one tends to be careful
not to erode the original brand and if needed, launch with some new brand name.
22.5 MANUFACTURERS FIGHTING PRIVATE LABELS 5

Hence, from whatever we know from the above strategies, one can sum up the message that manufacturers
react in the following ways: Manufacturers seriously consider category management or at least, develop
a revitalization plan in advance to counter the store brands. Manufacturers may also try to learn from
the stories and strategies of companies fighting private labels in other countries. If the situation so
demands, they are likely to consider a strategic alliance with those companies in other countries or
regions that have demonstrated success in fighting private labels.
If the product in question is not an important brand for the manufacturer, then serious
consideration is given by him to fight private labels by developing another private label for the category.
This would influence price improvements and may not affect the original brand in any way. If all
these strategies do not give results, then the manufacturer ensures that the category becomes as
inhospitable as possible for private labels. This may be achieved by keeping costs and prices as low as
possible to keep store brands out.
To sum it up, all manufacturers possibly would invest heavily in brand equity with advertising,
promotion, and also in merchandising. Continuous innovation and new product introduction form
a definite strength of the manufacturers to keep private labels away as we know already. The
manufacturers might give real consideration to key brands and may not bother about brands that do
not have a major impact on their sales or profitability. Managing the price gaps and understanding the
elasiticities of price and demand are likely to give a clearer picture for the national brands on how and
where to complete effectively. The most important lesson seems to be developing differential strategies
that vary from category to category and business to business to the national brands and their companies.

REVIEW QUESTIONS
1. What is a private label and why should a company consider them seriously?
2. How do you, being a private label, effectively use Quelch and Harding model if you happen to
compete with an established brand in a ‘potato chips’ market? What strategies do you use to
refute the strategies adopted to fight private labels?
3. Suggest examples from your perspective, where established brands make use of flanker brands
and preempting competition by building trade relations?
4. ‘Xigo’ is a MNC brand in the ‘toothpaste’ market. All the gel/mint based toothpaste brands
promote on ‘freshness’ aspect whereas ‘Xigo’ has established itself as the herbal toothpaste pitching
on oral care. A private label toothpaste brand, ‘Orayur’, based on herbal and ayurvedic platform is
slowly establishing itself as a competitor to ‘Xigo’. As a brand manager of ‘Xigo’, how do you
effectively use the following data to fight ‘Orayur’? Note that this is the only data available to
interpret.
Factor/s Xigo Orayur
Market Share 21% 8%
No. of Exclusive Distributors 250 80
Price of a 100gm SKU Rs.42 Rs.35

No. Line extensions 0 0
Retailer Margin 2% 6%
Inventory Carrying Costs 4% 12%
REFERENCES
1
http://ideas.repec.org/a/oup/erevae/v26y1999i2p125-45.html, Oxford University Press, 1999.
2
Quelch, John A., and David Harding, “Brands vs. Private Labels: Fighting to Win”, Harvard
Business Review, January/February 1999.
3
Brady, Lucy., Aaron Brown, and Barabara Hulit, Private Label: Threat to Manufacturers, Opportunity
for Retailers, The Boston Consulting Group, Information Resources, Chicago, June 2003.
4
Stanley, John., “Brand versus Private labels: Who is Winning?”, John Stanley Associates, can be
accessed at http://www.jstanley.com.au/pdf/ Brands%20Versus%20Private%20Labels.pdf
5
http://www.georgemorris.org/PDF%20Files/Revitalizing Grocery CategoriesKG0202.pdf.

23.3 THE BCG MATRIX2
There are two dimensions in this model—relative market share and market growth rate. The relative
market share gives an indication of the company’s strength in the industry and market growth rate
indicates the attractiveness of the industry. Relative market share is obtained using the following
formula.
No. of units sold or revenues earned by the company in that category
Relative Market Share =
No. of units sold or revenues earned by the market leader
This value will be less than 1 and it will be plotted to the right side of the median as shown in Fig. 23.1.
If the company is a market-leader, then relative market share is calculated as shown below:
No. of units sold or revenues earned by the company in
that category
Relative Market Share =
No. of units sold or revenues earned by the no.2 player or
the average of the next 3 players
This value will be greater than 1 and it would be plotted on the left side of the median as shown in
Fig. 23.1. If the company shares its leadership with its competitor, relative share will be 1. The
horizontal line (market growth rate) in Fig. 23.1 is drawn at 10%. This varies from company to
company and this is their expected growth rate. The size of the circles states the profitability of the
brands or business entities. The greater the size the more profitable it is. The size of the circle is
proportional to the relative profits obtained by dividing the profits by the total profits of the company.
Figure 23.1 BCG matrix

Portfolio Models to Analyze Brands and Business Entities 215
23.3.1 Strategies to be Followed for the Various Elements in BCG Matrix

As the Fig. 23.1 indicates, cash cows are in a mature market with a highly dominated leadership
position. They are the primary cash suppliers to the rest of the business. This is also because the
brands or business entities would have attained economies of scale and the learning effect would also
be high. Hence, they consume less cash and supply more cash. Stars are in a growth market and are
the market-leaders. They may consume cash or supply cash since the industries are relatively new to
the company and economies of scale might not have attained. Question marks are major consumers
of cash. They are not the leaders in a relatively growing business. The company has to spend a lot to
establish the leadership position. Sometimes if it is found as ‘not profitable’ they might be divested
also. The dogs exist in a market, which is no more going to grow and have a relatively lesser share in
the market. They then divest or harvest cash supply to the company. The following Table 23.13
shows the strategies and tactics that could be followed for cash cows, stars, dogs, cash dogs, and
question marks.

Table 23.1 Strategies for various elements in BCG matrix

Aspects Star Cash Cow Cash Dogs Dogs Question Marks
Focus Investment to tap Maintain share for Maintain selective Divest or harvest Invest heavily to
the growth survival. segments. for profit. With become a ‘star’ or get
opportunities. draw from the out of the business.
business.
Market Share Maintain the Maintain the share Maintain Loose the existing
Invest to build share
dominant position or start harvesting selectively. share for profit.
or some cases loose
or build still. for cash supply. share when you
cannot build to
generate earnings.
Product Extend the line and Differentiation done Differentiation done Prune aggressively. If it is a build strategy
maintain the for key segments. for key segments. show differentiation
differentiation. Prune the and go for line
unsuccessful ones. extensions.
Price Aggressive pricing Stabilize or raise the Maintain or increase Increase pricing. Aggressive pricing.
and be a price price. pricing.
leader.
Place/ Widen distribution. Maintain Maintain selectively. Withdraw Limited coverage.
Distribution distribution. distribution.
Promotion High promotion Control the Selectively control. Minimize Maximize when share
expenditure. expenditure. is intended to be
built.
Cost Heavy cost Focus on cost Strict control of cost. Aggressively During a build
Reduction reduction and go for reduction. reduce the input strategy try to
economies of scale. costs. minimize the cost not
at the expense of
losing the share.
Production Increase through Maximize existing Increase Free up existing Invest in building
Capacity joint venture or capacity. productivity through capacity. capacity.
acquisition or any specialization or
other mode. automation.
R&D Invest heavily. Focus on specific Selectively invest. No such activity. Invest in R&D.
projects.
Human Promote Introduce incentive Allocate key Cut jobs. Invest in HR.
Resources management in key schemes and tighten segments under key
functional areas. the organization. management staff.
Capital Increase capital Limit the funds. Invest selectively. Divest and reap Fund growth.
Expenditures expenditure. money.
Working Extend credit terms Tighten credit terms Decrease. Aggressively Increase credit terms.
Capital to buyers. and increase decrease.
Requirement inventory turnover.

In the above Fig. 23.2 the unshaded circles indicate the present position of the brands and the
shaded ones about the expected future positions if strategies are adopted with the guidelines given by
the BCG model. The following points are to be noted about the above figure.
1. Money is invested in star 3 hence its revenue grows. But since it is in the growth stage and many
competitors are anticipated to enter into the market the share falls down. The same can be said
about star 4.
2. In case of cash cows 1 and 2 the current strategies are maintained to maintain the market share but
since they are in maturity stage their growth rate falls.
3. Question mark 5 is built to obtain question mark 6 with increased revenues and market share.
4. In case of the dogs, the dotted lines represent the partition for cash dogs. Cash dog 7 on harvesting
becomes cash dog 8 losing further market shares and gaining revenue.
5. Cash 9 is divested to generate revenues.
23.3.3 Criticisms of the BCG Model 4
The following are the inherent limitations of BCG.
1. Market growth rate is not a proper indicator of industry attractiveness. High growth industries
might attract huge competition due to low entry barriers and make the industry totally unprofitable.
2. BCG matrix is based on the assumption that high market share has an advantage of being at a
better point in the learning curve and achieving economies of scale. This may not hold good
when the product is a low value item, when products within the same business has different
production or marketing activities, when different competitors operate at different capacities or
some have a supplier advantage than others. Market share is more a indicator of past performance
than a future guideline.
3. Market share and growth rate are subjective measures. Defining the served market is highly
debatable. To measure the market share of ayurvedic soap like medimix, should we take into
account only the ayurvedic segment or soap market as a whole?
4. It just indicates the possible strategy to be taken by the firm without any guidelines on the
implementation strategies. Merely indicating the firm to increase a ‘question mark’s’ share does
not give any clue to implement it? Does the firm have any relevant asset that could be exploited
in building its share?
5. According to this, all SBUs/ Brands are independent of each other. Any company hardly faces
such a situation. For instance, if a dog brand shares its production plant with that of a cash cow,
then divesting or harvesting the dog might cause some problem to the cash cow. This is not
accounted in the model.
6. There are no methods3 in this model to test whether the suggested strategies are consistent with
company’s financial objectives or corporate objectives.
23.4 THE DIRECTIONAL POLICY MATRIX3
This matrix is also called GE matrix, overcomes some of the limitations of the BCG. It has two
dimensions—market attractiveness and business position. The constituent factors for each of the

dimensions for each of the company’s product are determined subjectively. The following points list
the process for making a GE matrix.
1. Consider one business entity or brand of the company.
2. Identify the factors that make up the market attractiveness dimension for its market.
3. On similar lines obtain business position factors.
4. Form a priority list and give a weightage for each of the factor.
5. Measure each factor by market research, internal discussion or secondary information.
6. Arrive at a total by applying weightage to the measurements.
7. Plot in the matrix.
8. Discuss on the strategies indicated.
23.4.1 The Components of the Matrix 4
Fig. 23.3 explains about an empty GE matrix.
Medium a a b
Business Position
Low a b c
High
b c c
High Medium Low
Industry Attractiveness
Figure 23.3 GE matrix
Business entities in the boxes ‘a’ are candidates for further investment and they have to be built.
Products in boxes ‘b’ have to be selectively invested with an objective of maintaining the current
position and candidates in the boxes ‘c’ are worth considering for harvesting or divesting. As in the
BCG matrix,the size of the circles2 representing the brands or business entities does matter in this
matrix also. Here the size of the circle represents the market size and the sector in the circle represents
the products market share. Also arrow marks are drawn from the circles to indicate the direction in
which the circles are expected to move in the future. The length of the arrow shows the extent to
which the circles would move in the direction indicated. This is indicated in the figure below.

5.00
Business Position 4
2 1
1.00 1.00
5.00
Industry Attrativeness
Figure 23.4 Components of a GE matrix
Thus in the Fig. 23.4, business entity 3 is moving strong in business position than to the extent
moved by business entity 1. Also market share of entity 2 is greater than all others. Consider the case
of a ‘Dhakshin Construction Company’ situated in Chennai. The company specializes in Industrial
Building (IB), Office Building (OB), Retail Buildings (RB), Leisure Buildings (LB), and Residential
Buildings (RLB). The following Table 23.3 shows the revenues of each of the building divisions
along with their corresponding market share.
Table 23.3 Revenues of building divisions and their market share
for Dhakshin Construction Company
S.No. Income Share in Crores Market Share in %

1 24.00 25
2 23.00 19
3 17.85 16
4 15.60 7
5 8.5 24
We demonstrate this example for one of their products namely industrial building. The same could
be done for other businesses also.
Step 1 Identifying Critical Success Factors (CSF) for the industry. This is done to find out the
business strength relation to competitors.
CSF1: To complete project on time.
CSF2: Complete project within budget.
CSF3: Produce high quality constructions.
CSF4: Maintain good relation with customers.
CSF5: ‘One stop shop’ for all project related services.

Step 2 Now evaluate the company and its competitors on the identified parameters for industrial
building construction market. The following Table 23.4 shows this.
Table 23.4 Parameters for industrial building construction market
CSF Weightage Dakshin Competitor 1 Competitor 2 Competitor 3
1 25 10 10 10 5
2 25 10 10 6 10
3 20 10 10 9 3
4 15 8 6 8 10
5 15 7 7 10 8
100 925 895 850 705
Business strength in relation to competitor = 925/895 = 1.03.

Business strength obtained separately for each of the units are as follows:
I B : 1.2
OB : 1.4
RB : 1.00
LB : 0.6
RLB : 0.75
Step 3 Determine the market attractiveness of each of the market. For simplicity, all the factors are
assumed to be the same for all the business entities. In actual practice it is different. The
following Table 23.5 illustrates this. The working for weightage calculation for each business
is not shown explicitly.
Table 23.5 Factors influencing market attractiveness
Factor Scoring Weightage Total

0-3 points 4-6 points 7-10 points
Market Size Low Medium High 15 IB: 670
Market Negative Nil Positive 20 OB:590
Growth
Sensitivity High Medium Low 25 RB: 440
to Price
Competitive High Medium Low 15 LB: 600
Activity
Profitability <10% 10-15% >15% 25 RLB: 375

The business position and the industry attractiveness are combined and plotted in a GE Matrix to
obtain a plot as in Fig. 23.5.
Figure 23.5 GE matrix showing market attractiveness for industrial building
23.4.2 Strategies Suggested for Directional Policy Matrix 2

The following blocks show the possible strategies that could be followed by a company with the help
of a GE matrix.
Table 23.6 Strategies for directional policy matrix
Protect your position Build your position Build your share selectively
Specialize in some selected
Invest more and maintain your Build your strengths
High strengths. Try overcoming
position. selectively. Challenge the
weakness. Withdraw if
leader. Reinforce weak
sustenance is an issue.
areas.
Build your share selectively Manage your earnings Harvest or Expand with
Business Position
Raise productivity to increase limit

Concentrate on low risk and
profits. Focus on attractive Expand with low risk
Medium highly profitable segments.
segments by building up otherwise limit your
Maintain the existing
resources to counter competition. investments.
programs.
Protect your share and refocus Manage your earnings Divest

Try to maintain your current
Protect your position in Sell off the business and
earnings by defending your
Low most profitable segments by meanwhile limit your
strengths and focus only on
upgrading product line with investments
profitable segments.
minimal investment.
High Medium Low

Industry Attractiveness

GE Matrix overcomes almost all the limitations4 of BCG. But still this model is not free from
errors. This model becomes too subjective and the decisions about the constituent factors are left to
the mercy of the top management people. Also, like BCG this model also gives no clear guidelines to
distinguish and define the served market.
REVIEW QUESTIONS
1. List the objectives of product portfolio.
2. How will you calculate the relative market share for a company that is challenging the market
leader?
3. Explain the BCG matrix elements with the help of an illustration.
4. Briefly explain the relationship between the BCG matrix divisions and PLC stages.
5. Explain the strategies to be followed in each division of BCG matrix.
6. What are the limitations of BCG model?
7. Explain the components of GE matrix with the help of an illustration.
8. How will you calculate the industry attractiveness in GE matrix?
9. Explain the strategies to be followed in all divisions of directional policy matrix.
REFERENCES
1
Day, S., “Diagnosing the Product Portfolio”, Journal of Marketing, Vol.41, No.2, April 1977, pp.29–38.
2
Kotler, Philip., Marketing Management, Pearson Education, 11th edition, 2003, pp.94–95.
3
Barclay, Ian, “New Product Development—A Practical Workbook for Improving Performance”,
Butterworth Heinman, Nov. 2000, pp.37–38.
4
Larreche, Boyd Walker., Marketing Management, McGraw-Hill, 3rd edition, 1998, pp.43–44.

According to another view point, there are two other strategies, which could be on par with a harvesting
strategy. The strategies are listed in Table 24.2.2
Table 24.2 Comparison of strategies for assisting a brand’s decline.
Variables Harvesting Strategy Profitable Niche Strategy

Survivor Strategy
Objective Maximize short-term Concentration is on The investment is
cash flow with a future profits and increased in fewer
minimal investment. sustenance is made markets and the
difficult for weaker marketing focus is only
competitors. on those markets.
Characteristics of the Decline is likely to be Decline is likely to Here all overall market
market at a slow rate in be at a slow rate in demand declines
future. future but quickly but substantial
substantial demand is certain to
demand is certain exist in certain pockets.
to exist in certain
pockets.
Characteristics of the Number of stronger Number of stronger Strong competitors

competitors competitors is few, competitors is few, exist in the mass market
low exit barriers, low exit barriers. but not in the target
future rivalry is not segment.
expected to be
intense.
Characteristics of the Market leader with A leadership Could exert a
firm high brand loyalty. position that could leadership position only
make competitors in the niche segment.
exit from the
market.
24.3 HARVESTING STRATEGY—WHEN TO USE?

1. The brand is in a business, which has lower growth prospects. The industry is in mature or
decline stage. Weak cash cows of BCG matrix would be the ideal candidates to harvest.
2. The shrinking or stable market becomes too costly to maintain.
3. The business is making losses or even if it makes profits it is not substantial. The above two
conditions should be observed for a justifiably longer period of time to adopt harvesting strategy.
4. Reduced investments does not proportionately affect sales.
5. There are other opportunities for the company’s resources.
6. The brand no more forms a major portion of the business. The business could sustain as well
without the brand.
7. The market decline is predicted to occur at a slow rate.2
The meeting of all the above the conditions is essential for harvesting, otherwise the decision
should be taken with caution. Care must be made to check absolute profits, not profits relative to
Brand Harvesting 227
investments. Before taking a harvesting decision it is necessary to evaluate and make an approximate
estimate of the decline of the customer base and the effects on sales resulting from it. Based on this
estimate the option of harvesting could be debated.
24.4 TYPES OF HARVESTING 3
We can classify harvesting based on the rates of doing the harvesting or the rate of withdrawal. In
slow harvesting, the product/brand is withdrawn gradually and it appears like the company is adopting
a maintenance strategy. In case of fast harvesting, the product is withdrawn very fast with heavy
budget cuts that it almost appears like divesting strategy. Based on a company’s activities they can be
classified into three types—invisible strategy, visible strategy, and highly visible strategy. In invisible
strategy, care is taken not to indicate the strategy to the consumers and competitors. Cutting R&D and
plant expenditures would help companies accomplish this. Reducing sales effort, advertising and
promotional expenditure would increase the visibility of the strategy. In the third type, strategies like
raising the price of the product, cutting down the quality of the product, and reduction of product
lines are adopted to make the strategy prominent. If the company is financially strong it can try out
various options else care must be taken to choose the harvesting options.
24.5 ACTIVITIES ADOPTED DURING HARVESTING STRATEGY3
If the company follows a slow harvesting strategy, it would follow all strategies listed for an invisible
action strategy briefed above. Apart from those, it can splash occasionally some advertisements so as to
reassure the customers and keep their loyalty for an extended period of time. It can also give trade
promotions to dealers sometimes just to keep the game going. Even a small change in packaging is
advisable. In case of a harvest, the company needs to adopt the tactics listed for invisible, visible, and
highly visible action strategies at a fast pace. The price can be slightly raised initially followed by
trimming a product and service quality for a fast harvesting strategy.
24.6 PLANNING THE HARVESTING STRATEGY IMPLEMENTATION
The main concern for a harvesting strategy implementation in a company is the negative feeling it
creates among internal and external employees. Customers’ loyalty will get affected immediately if
they know that the company is going for harvesting. Employee morale would also be down if the
decision is made known to them. Also if the competitors come to know of the decision to harvest they
can push the company’s sales still down. This they would be able to do by imparting prices in their
products and increasing their promotional expenditure which would force the harvesting company to
go for divestment strategy. Hence, it becomes very important for the management not to reveal the
decision especially during slow harvesting. Management can adopt three routes to implementing the
harvesting strategy plan.
Method 1 In the first method, the business entity manager or the brand manager is not informed of
harvesting. Instead he/she is told only about a temporary budget cut. This would also demoralize
him/her but to a lesser extent. From this way, when the unit manager or the brand manager comes to
know of the real decision he/she would lose confidence in the corporate management.
Method 2 In the second method a new unit manager or brand manager is appointed for harvesting.
This person is known for his/her capabilities in the industry. This same reputation can bring doubts

in the minds of the employees. In that case, the person is used as a backdoor consultant.
Method 3 In this case, the harvesting strategy is openly declared to the unit manager/brand manager.
He/She may ask for a chance to revive the business. After rounds of discussions, the team comprising
of top management and unit manager might again arrive at the decision of harvesting. This method
has the biggest disadvantage of demoralizing the employee morale. If the company is big enough to
accommodate the possible high job turnover of the employees then this method could work well.
24.7 WILL THE HARVESTING STRATEGY BE REVISED? 3
The decision to harvest is a risky decision. There are reasons to this. Since decline in sales is the main
driver of this decision, the time period becomes a crucial factor. How long should the sales reduce?
How to determine there is no revival possibility? How to determine the industry growth rate is not
prospective? What if the industry could recover in the next few years? What if a new product application
is found for the product? All these considerations need to be thought out before taking the decision.
Once taken the company should stick to it. It will be too costly for the company to vacillate between
a maintenance strategy and a harvesting decision. But if there are some drastic external unpredictable
changes then the company should be flexible enough to change its decision. Such changes could be
brought by any of the following two decisions.
1. The data about current situation and predictions about the future might prove to be erroneous or
an expected technology might not occur or competitive reactions might get deviated from the
expected ones.
2. All the predictions might go right but still the environmental factors like inflation, interest rates,
exchange rates, oil prices, or some anticipated regulation changes might favor a maintenance
strategy.
In conclusion, it can be said that harvesting strategy needs to be applied to appropriate products
at appropriate conditions. The harvesting plan and the implementation should be so developed that it
doesn’t cause erratic reaction from customers or competitors.
REVIEW QUESTIONS
1. How do you think ‘Brand Harvesting’ is a better strategy than divesting?
2. Elucidate the differences of harvesting, profitable survivor and niche survivor with appropriate
examples.
3. A company manufactures wax shoe polishes in two shades—dark tan and black. The market for
dark tan polish is growing at 1% p.a. whereas the market for black polish is growing at 2% p.a.
The company is hardly able to pay its employees by the earnings generated by these two products.
However, the company realizes by way of market study that neutral liquid polish is growing at
10% p.a. and it can successfully close down the wax polish divisions to enter into this segment.
However, the wax polishes have a strong brand loyalty. What should the company do and why?
REFERENCES
1
Kotler, Philip., Marketing Management, Pearson Education, 11th edition, 2003, p.338.
2
Larreche, Boyd Walker., “Marketing Management—A Strategic Approach with a Global
Orientation”, 3rd edition, 1998 McGraw-Hill, p.457.
3
Kotler, Philip., “Harvesting Strategies for Weak Products”, Business Horizons, August 1978.
As seen from the above list, the cult brands are not essentially the biggest and most well known
brands, but they are companies with the most fanatical and most loyal customer base. These are the
brands that consistently communicate with the customers at the very highest levels of Maslow’s
‘Hierarchy of Needs’ and form the base of there self-actualization. According to James Best, chief
strategic officer of DDB Needham Worldwide, “cult brands break the rules.”4
25.1.1 Various Frameworks for Cult Brands
Let us look at the various frameworks for cult brands from different perspectives, which would enable
us to understand the strategies and guidelines necessary for brands to a mass hordes of loyal supporters.
25.1.1.1 Framework 13 Mathew Ragas in his book “The Power of Cult Banding” has suggested
the following framework, which he termed as the ‘Seven Golden Rules’ of cult branding.
a) Micro-targeting brands.
b) Smart brands are inclusive.
c) Cult brands are universal.
d) Cult brands are ‘sharing’ and ‘collaborative’.
e) Cult brands abolish ‘command-and-control’ thinking.
f) Use advertising to convey openness and inclusiveness.
g) Cult brand create customers’ communities.
25.1.1.2 The Not’s A cult brand could be destroyed by the company bringing it into the mass-
market. When Ford redesigned the ‘Mustang’ to have a broader market appeal, it lost many loyal
Mustang fans. Also it is not advisable to alter the emotional and sensory experiences as well as the
relative differentiation of the cult brand.
25.1.1.3 Framework 25 Mark Di Somma has suggested about ten guidelines for cult branding.
The essence of his work is based on the premise that—‘small is precious, unknown is uncorrupted’.
When a small segment of customers are identified, targeted and essentially prevented from outside
disturbance or in marketing parlance the niche status of the cult is maintained. A cult could be built
for the brand. He suggests nine ideas for starters.
1. Understanding is everything
2. Plan to be spontaneous
3. Stuck for an approach? Option 1: battle the mainstream.
4. Option 2: make an old idea new—Human loves idiosyncrasy BYO attitude
5. Nothing to do with size, everything to do with mindset
6. Limit your ambitions
7. Get the right media play
8. Consider all the media possibilities
9. Don’t try to be popular
25.1.1.4 Empirical studies by HBS conference 6 The student-run Harvard Business School
Marketing Conference held sometime back, suggested some guidelines for building ‘cult brands’.
The following is a listing of the same.

Recent Developments in Brand Management 231
a) To master cult branding, it is important to know what the brand is and what it isn’t. A cult brand
distinguishes itself from other brands by forging a human connection with the customer in a way
that a normal (the brands that are not cults) toothpaste or cereal can’t.
b) Customers should find a sense of belonging within that product category and consider it as a
badge of honor.
c) Cult brand companies should keep evolving in a way that doesn’t intimidate core followers.
d) Cult brands trigger great passion in their followers, which can lead marketers into a non-stop
balancing act.
e) Companies which regard their cult brands to be assets never stop evolving.
f) A cult brand cuts across demographics and psychographics.
g) A cult brand cannot be created overnight.
h) Word of mouth plays a key role in the creation of cult brands.
25.1.2 Cult Brands in India
The brands and the branding principles that have worked in other countries may not strictly work in
India, as India has some perceptible differences from the western countries. The chief among these
differences is the fact that India has still very much an aural culture and traditions go along with
style. The prevalence and power of rumours is further evidence to the existence of aural communication.
But then the distinct Indian brand ‘Amitabh Bachchan’ might have more followers in India than
Oprah Winfrey. In India, things that could be said to have acquired a cult status are the religion, the
caste system, the family unit, and the language system. Bullet, Ambassador, AMUL, and Khadi are
some of the commonly referred cult brands in India.7 The following section illustrates how and to
what extent, these brands fit the framework for cultism and what they did not do as suggested.
25.1.2.1 AMUL—The taste of India The name AMUL has transcended the physical form of the
product and has entrenched itself into the lives of the people of India, through the length and breadth
of the country. A child even in the remotest village of India would be able to tell one, what AMUL
stands for. Such is the success of brand AMUL, which was launched in 1946 and positioned as “The
Taste of India”. The word AMUL, derived from the Sanskrit word “Amoolya” means “priceless”.
Today, the brand is one of the most successful brands in the history of India with an annual turnover
of Rs.2500 crore.8 The brand today gives sleepless nights to its MNC competitors’ like Nestlé and
Britannia.
a) Key attributes of ‘cultism’ in AMUL
1. GCMMF history This is one of the primary evidence of cultism in ‘AMUL’. The way the
‘AMUL’ brand was created is one of the main reasons for the existing emotional attachment of its
users with the brand. The following story would illustrate the same.
In 1946, inspired by Sardar Vallabhbhai Patel, a local farmer, freedom fighter, and social worker,
named Tribhuvandas Patel, organized the farmers of the district of Kaira in the state of Gujarat into
cooperatives, which would procure milk from the farmers, process the milk and sell it in Bombay to
customers including the Bombay Milk Scheme with the idea of saving the farmers from the monopoly
of Polson dairy company. Purely by chance, in 1949, a mechanical engineer named Verghese Kurien,
was posted by the Government of India to a job at the Dairy Research Institute at Anand met
Tribhuvandas Patel, that changed his life and changed India’s dairy industry.
The most important feature of these cooperatives is that they are run purely as farmers’ cooperatives,
with all the major decisions being taken by the farmers themselves. The cooperatives are not ‘run’ by
a separate bureaucracy with vested interests of its own; the farmers are truly in charge of their own
decisions. Any farmer can become a member by committing to supply a certain quantity of milk for a
certain number of days in a year and shall continue to be a member only if he keeps up this commitment.
The quality of milk was checked openly and cash paid for on the same day for the milk received. This
experiment of organizing farmers into cooperatives was one of the most successful interventions in
India. A very loyal clientele was built up who experienced prosperity on a scale they could not have
dreamt of ten years earlier. AMUL went on to manufacture milk powder, butter, cheese, and baby
food over the years. Starting from a daily procurement of 250 litres in 1946, AMUL had become a
milk giant with a large procurement base and a product mix that had evolved by challenging the
conventional technology.
With the punch line of “Utterly, Butterly, Delicious”, the AMUL little girl, the moppet, the
icon, stands for all that is a “Taste of India”. She’s a girl who symbolizes India’s white revolution, all
about milk and its products. Thus what started as a social cult of AMUL began to transform itself into
a brand bult.9
2. AMUL’ girl The round-eyed, chubby-cheeked AMUL “moppet” has for 30 years been a wildly
popular advertising fixture, with its punchy one-liners amusing Indian viewers from bus stands, lamp
kiosks, and billboards. Created in 1966 by an advertising team headed by Sylvester daCunha, the
topical, news-event-oriented ads are reportedly ready to enter the Guinness Book of World Records as
the longest running advertising campaign ever. Most of these cult billboards are also published on the
AMUL website. There are stories about the butter that people like to relate over cups of tea. “For over
ten years I have been collecting AMUL ads. I especially like the ads on the backs of the butter
packets,” says Sumona Varma. What does she do with these ads? “I have made an album of them to
amuse my grandchildren,” she laughs. “They are almost part of our culture, aren’t they? My
grandchildren are already beginning to realize that these ads are not just a source of amusement.
They make them aware of what is happening around them.” (Asian Age, March 3, 1996) 8. Over the
decades, themes for the AMUL topicals have ranged from the “Hare Rama Hare Krishna” craze of the
late 1960s, and the Naxalite movement in Calcutta to the Ganpati festivals in Maharashtra, and the
frequent Indian Airlines strikes. Reaching a global audience means that AMUL has also had to come
up with international themes for its topical ads: hence the smarting one-liners about Britain’s mad
cow disease, the Hong Kong handover, and Mike and Tyson big bite (“Union Jacked by Mad Cows”;
“Hong Gone”; “Ear Today”, “Gone Tomorrow”).
3. Evolving without detours A focused group discussion conducted by Jamnalal Bajaj Institute of
Management Studies10 gave an insightful picture of how the relationship with the brand is perceived.
The following statements are the result of the discussion, which tells the exceptionally emotional
bonding the brand evokes among the users. Not surprisingly, almost every respondent stressed on a
long-term relationship with AMUL evolving in a way that doesn’t alienate core followers.
• “AMUL is like a guardian who asks me to stay healthy.”
• “AMUL is committed to me.”
• “AMUL is a part of my family.”

• “I have a long-term relationship with AMUL (like with a pen or an old watch).”
• “AMUL is fatherly figure I trust, and he’s always been good to me.”
4. Co-operative and collaborating Price may be AMUL’s most obvious differentiator—but the
fountainhead of its strategy is its commitment to the co-operative movement and the anti-MNC
feeling that fuels its management.11
b) Does AMUL follow the frameworks suggested?—The contradictions
1. Micro-targeting is absent From the above description of the ‘AMUL’ brand, it is evident that
the brand belongs to the masses across age, demographics etc. AMUL is thus ‘open’, ‘inclusive’,
‘universal’ but the fact remains that ‘AMUL’ does not belong to an exclusive group. This exclusivity
is exhibited with the other ‘cult’ brands world over and this forms as an important part of all frameworks
suggested so far.
2. AMUL does not sell life style but fulfills the contract of quality12 AMUL does not sell a life
style as suggested by framework 1 but only fulfills its contract of quality, value for money, and service.
It is a mass market product and gives only the basic product with quality but still it stands in the
minds of the consumers because of the relationship it has built with the consumers.
3. Lack of customer communities AMUL did not create any customer communities to interact
with each other, which is the most important feature of cultism. There are no customer clubs (AMUL
Clubs) or get-togethers. It has to evolve over time by word of mouth on the ‘experience’ created by the
brand. However, AMUL did not do anything that would facilitate sharing the customer experience
with the brand.
4. Popular AMUL defies Mark Di Somma’s advice of trying not to be popular and happens to be
a popular brand. Brand popularity may be due to its phenomenal billboard advertising or due to its
product superiority.
25.1.2.2 BULLET—Let the boys have their toys The Indian road experience has been typified
by no other motorbike than the ‘Bullet’. Ever since the time it roared into the market, it has remained
a cult symbol. It was originally intended for the defense and police forces but its appeal went beyond
them. Today, the Bullet has shifted gears and has entered a market that is driven by the young and the
enthusiastic generation of India. It is now positioned as a ‘rider’s bike’ rather than a mere utility
vehicle. Yet, the Bullet legend is perpetuated by a diehard tribe of loyalists who would swear by it, any
day.13
a) Key attributes of ‘cultism’ in Bullet
1. Bullet club A market survey held in 1995 revealed that both the brand loyalty and brand equity
for the Bullet is high. However, the type of customers varied. The survey revealed that some customers
looked at the Bullet as a heavy utility two-wheeler and some just indulged in a passion for it. This
information was enough for Bullet guys to kick start the first ‘Bullet Club’ on December 29, 1995 in
Bangalore. It seemed a good platform to bring together all those who shared a similar passion for the
Bullet. Any aspiration for membership into this club would mean that one owns a Bullet. Most of the
members aged between 22–35 years, although everyone with a Bullet and a license is welcome. The
initial membership fee happened to be Rs. 500/-. But the most needed qualification to be a member of
the club is the true spirit of adventure. The Bullet club started as a ‘riders club’ and it still continues

to nurture the same passion for Bullet bikes. It is meant for those who seek adventure from their
Bullets. Members undertake various adventure and pleasure rides that are organized by the club
exclusively for its members. Apart from this, the club works towards social causes that relate to road
safety rules and other road regulations. The club also helps members who wish to travel in clarifying
their enquires about the route and making other enroute arrangements. Each member here has his
own role to play like the club, to help highlight the Bullet not only as a functional bike but as a two-
wheeler that is way ahead of the other available models. A contingent of 40 bikes headed towards
Khardungla called ‘The Khardungla Trip’ in 1997, which was an adventure ride to the highest
motorable road in India. It was a record and has been featured in the Limca Book of Records. The
major event of 1997 is a trip planned out from Chennai to Kargil. The bullet riders are doing the
Trans-Himalaya route and coming back to Chennai. The Club and Eicher Group are pitching in to
make this event happen. The management of ‘Bullet’ strongly feels that the integrity and the purpose
of the club will be lost if they begin to organize events for the non-members.
2. Parking space14 This is the primary interaction facility through which the vibrant Royal Enfield
on-line community interacts. Apart from informing about the latest Royal Enfield news, product
launches and offers, members of the community share their most exciting ride stories. The members
debate on ‘Technical Stuff ’, ‘Model Matters’, ‘Used Bikes’, ‘Riding Clubs/Groups’, ‘Accessories/
Spares/Modifications’, and ‘Miscellaneous’
3. Difference in product—Micro targeting Royal Enfield today is the oldest motorcycle company
in the world. It has been around as a brand since 1930 and it has been in India since 1955. The
company’s products are well differentiated through their distinctive styles, power, and riding comfort.
The range of new products is increasingly more relevant to the upgraders from the economy segment.
After years of riding economical and relatively boring motorcycles these consumers are now earning
more and want a more holistic and involving motorcycling experience. The unique features in the
Bullet makes micro targeting possible, for instance, Bullet gear shifts on the right.
4. Royal Enfield branded store15 The Royal Enfield branded store serves any biking enthusiast’s
ultimate dream destination. The concept is new in India and has been set up as a part of Royal
Enfields efforts to enhance the riding experience of biking enthusiasts in the country. The brand
stores’ ambience, transcends the visitors to a biking world. The store has on display all the models of
Royal Enfield including the latest model–The 2004 Bullet Electra. The store is a one-stop store for
sales, service, and spares. It also serves as the information center for future rides planned, REDs
(Royal Enfield Discoverers), and other options which excite to a biker. The thumpers are displayed
under never-seen-before spotlights in the Royal Enfield store in Bandra.16
5. Unique combination and power Royal Enfield has the unique combination of gears on the
right side of the bike, and brake on the left side unlike the conventional bikes. Also all the extensions
of Royal Enfield are in the heavy power range of 346 cc to 500 cc.
6. Customer preferences An active in-house Research and Development wing is constantly at work
to meet changing customer preferences and the challenges of Indian and International environment
standards. When introducing a new product, this team undertakes all related planning, which includes
a rigorous customer contact program, design, concurrent engineering, and testing processes.17

b) Does Bullet follow the frameworks suggested?—The contradictions

Bullet follows the guidelines suggested for a cult brand. It depends on word-of-mouth for its
advertisement mostly like most other cult brands do. As these guidelines warn, it has struck to its
‘cult’ image and has failed to evolve with the consumer needs. This has led to the fall in sales. The
company, of-late, has realized this and started taking steps to get in-tune with the consumer. For
instance, Bullet Electra has a feature, which makes the starting much easier. The bike is now made
available in several colors to make it look interesting and relatable to new users. The new look also
draws people into the showroom and they also get to sample the other new products on offer. Earlier,
this kind of product sampling was simply not happening. Since the bike was coming only in black,
there was no reason for them to go to the showroom. Now, since there is a change in the product
design and it pulls them into the showroom, where they are able to check out the price, the
maneuverability of the product, and thus forced to change the perception about the company. The
second big area that the company is working on is to streamline distributors and financing schemes.
This is done to free people from the hassles of buying. The company has figured that the youth today
want different and interesting looks, bikes that look powerful and cool, but are easy to handle and
maintain.18 The muted thump of a long-stroke engine, the raw power and ruggedness to take on any
terrain, effortless cruising at three-digit speeds and above all, the macho feel of riding a brawny iron
horse—these are the attributes that have endeared Royal Enfield bikes to many a two-wheeler buffs.
25.1.2.3 Ambassador—The first among Indian cars Ever since its inception in 1948, the
Ambassador—the first car to be manufactured in India, has been ruling the Indian roads. Originally
based on Morris Oxford (United Kingdom, 1948), the Ambassador has of late been evolving with a
series of changes in its ‘make-up’ to match the customer expectations. Ambassador, the only automobile
to ply Indian roads for more than five decades now, has carved a special niche for itself in the
passenger car segment. Dependability, spaciousness and comfort are some of the reasons for it being
the most preferred car for generations of Indians. The Amby’s time-tested, tough, accommodating
and practical characteristics make it a truly Indianized car.19
a) Key attributes of ‘cultism’ in Ambassador

1. The car of the bureaucrats and eminent personalities The Ambassador, termed the Raaja
Gaadi, especially since it has such liberal seating room, was especially chosen for its reliability and
comfort. The delightfully retro-looking sedan, based on the British-built Morris Oxford of the 1905,
is the Prime Minister’s official car as it has been for virtually every Prime Minister since independence
in 1947. The Prime Ministerial motorcade consists of a string of cream Ambassadors. Dr. Abdul
Kalam, President of India, prefers to travel in old ambassador car without a beacon light and VIP cap.
One of India’s best-known cartoonists R.K. Laxman, has driven an Ambassador for years. Oscar-
winning Indian director Satyajit Ray immortalized the car in many of his films. “It’s a car identified
with the masses and the ruling class. It gained access into parliament because of its symbolic value
and the power it connotes,” says Soni Shrivastav, a spokeswoman for the group that makes the
Ambassador. The government has a fleet of more than 5,000 Ambassadors, whose rounded contours,
big bonnet and bulging headlights have remained virtually unchanged since it first rolled off the
production line in 1957. In some ways, the Ambassador is to India what the Chevrolet is to the United
States. In many ways, the clatter and bang of the simple Ambassador, which is built by one of the
country’s oldest carmakers, Hindustan Motors, is the heartbeat of India. For years, you could buy any
car in India, as long as it was an Ambassador. While khadi-clad politicos rush in and out of government
offices, it is this modest emissary who lies in wait. While the old, stodgy but hardy vehicle has
changed shapes over the years, it continues to retain much of its original appeal. It largely remains the
“official” car of India, ferrying babus and netas alike.20 The next time you come across a minister’s
cavalcade, count the number of Ambassadors crossing the yellow line with impunity.
2. Landmarks achieved This would also give us a picture on the cult status of the ‘Amby’.
• 1957: The first Ambassador, modelled on the Morris Oxford, takes to the roads.
• 1963: Buoyed by popularity, the second version—Mark II—appears.
• 1975: First exports—seven cars to South America and Mauritius. And the Mark III is launched.
• 1993: Hindustan Motors fires up the Old Lady with a powerful 1800 cc Isuzu engine.
• 1999: Hindustan Motors pumps in Rs. 70 crore to give a facelift to the dowdy old lady. Result:
Ambassador Classic.
• 2002: London businessman Tobias Moss runs a fleet of customised ‘Ambys’ at Euro 40 an hour,
the most expensive cabs in UK.21
3. Mechanics’ delight Every neighborhood mechanic knows how to repair it and most of the
problems can be fixed with a hammer and wrench. Spare parts are widely available, even in the
remotest village.22
4. Exhibitions for the well-rounded lady The iconic Ambassador car is now on show at Washington’s
Smithsonian gallery—for six months. A Retro Ambassador prototype is showcased at the Auto Expo,
and 20,000 visitors are asked about the car’s greatest attribute. 90 percent say as “the emotional
connect.”21
5. Waiting time The Ambassador, even today is sold at a premium price than any other foreign car
in that segment could demand and that too with a waiting list time of three months!23
b) Does the Ambassador follow the frameworks suggested?—The contradictions
1. Not universal or inclusive The ‘cult’ followers of the ‘Amby’ are mainly the ‘VIP’s. The
frameworks suggest that the brand should not restrict to one set of people. The differentiation should
have been in the ‘attitude’. The ‘Amby’ even today belongs to the ‘ruling’ class and not to the people
who have a passion for ‘victory’ and ‘power’ (in their own sense). A businessman would not come
under the ‘Amby’ cult though his attitude would be the same as that of any other ‘Neta’ in the
country. Hence ‘Amby’ deviates from the major ‘rule’ that cult brand should be inclusive and universal.
2. Not being spontaneous The ‘amby’ has remained the same for ages together. With the competition
posed by foreign luxury cars, it’s time for ‘Amby’ to change! For instance, India’s former Prime
Minister Atal Behari Vajpayee has put aside the white Ambassador limousine that has been the trademark
of Indian leaders since Pandit Nehru’s time, and for the past few months or so has been letting
himself be driven around in a black BMW. But the changes that ‘Ambassador’ has brought in the
recent past are noteworthy.
The Ambassador Grand had 137 improvements brought into it with features such as power
steering, power brakes and remote shift gear. Another new variant of HM’s old workhorse, ‘Retro
Ambassador’ is being positioned as the car for ‘people with attitude’ and targeted at the government
‘babus’, private sector employees and the younger generation.24

25.1.3 Inferences and Guidelines for the Indian ‘Brand Cults’

1. The first noteworthy things that could be inferred from these examples are that all are ‘first
movers’ in their own category. They have sustained competition for a long time. So the message
is very clear that if you are a first mover in your category and have a set of dedicated loyal
customers for your brand then that will itself carry you for a long time. People will respect the
brand and stay attached to it even if the brand becomes a bit slow in catching up with the latest
developments.
2. All these brands pitch on the ‘Indian’ sentiment. All these brands are made or modified to suit
conditions and all came into existence around the independence period. Major influence with a
‘Mega event’ seems to influence. Also the ‘Swadeshi’ feeling still plays a role. Even if the product
is not a truly ‘Desi’ product as in case of ‘Bullet’—it was tailored for Indian conditions.
3. The cultism is not specific to any product category. Be it an FMCG product or a luxury car it
works out perfectly well in the landmass.
4. Similarly ‘premium’ image also does not play a role as seen from the example of ‘AMUL’.
5. Clubs or a ‘Mass gathering’ to prove ‘cultism’ is not essential. The HOGS club of HD or the
gathering of ‘Apple’ is not essential to prove or bring about ‘cultism’. People remain attached to
the brands emotionally even without all these clubs, gatherings, etc., as seen from ‘Amby’ and
‘AMUL’.
6. Understanding the customer needs and evolving in a way that the core loyals are not affected is
yet another important factor.
7. Advertising and media need not have a good amount of contribution in building the cult status.
25.2 BRAND MERGERS
Consumers’ need for choices and variety is evident in India. The success of a brand lies in its ability
to break this clutter. Each brand has a distinct image, which indirectly relates to its utility. To get a
strong base of loyal customers, a brand must mean something more than what others mean. This
arises to the concept of coming together of two or more brands to provide ‘more’ meaning and value
to consumers. Brand mergers are one way of doing this. Here two brands come together and leverage
each others strengths. In a brand merger, the two brands are from the same product category. This
factor plays a crucial role in adding to the success or failure of the merged entity. The two products
when they are from the same business have the positives and negatives of carrying an existing customer
base. Thus, the company/companies, which are leveraging from the brand merger needs to ensure
that the new brand does not cause dissonance to the customers of the older brands. This chapter
focuses on the reasons behind brand mergers, their classification, risks, and benefits associated with
them.
25.2.1 Reasons Behind Brand Mergers

The prime reasons for brand mergers are as stated below and each of them have been examined later:
1. Increase of market share by the combination of two or more challengers.
2. Effective combination of the core competencies of the parties involved.
3. Improvement of brand recall by merging related products.
4. Way to maintain market shares.
25.2.1.1 Increase of market share by the combination of two or more challengers25

In certain sectors, there is a distinct market leader and distinct challengers. Such a scenario exists in
the case of insurance sector where LIC is the dominant market leader. The private players in the
sector are the distant challengers. The same could be said of SBI in the retail banking sector. A brand
merger between some of the big global companies could provide a strong position for fighting the
giants. For instance, the Standard Chartered Bank acquired the Grindlay to attack a few of the
domestic banks, which are known for their strong infrastructure and an enviable base of customers.
Though the Indian customers viewed Standard Chartered Bank and Grindlays Bank as the ones,
which provide high quality of service, people preferred to deposit their money in a more domestic
bank, which offered similar services with the nationalistic security arising from the brand. Both
Grindlays Bank and Standard Chartered Bank enjoyed high brand equity in the country particularly
in their respective target segments. Their limited customer base prevented from providing the services
as wide and deep as the domestic retail banks. This was the driving force behind the merger of the
brands. Standard Charted still exists as a separate entity. In some prime branches, the bank maintains
its branding as the Standard Chartered Grindlays Bank. The merger had yet another perspective.
Standard Charted wanted to use the equity that Grindlays gained in New Delhi by running some
promotion schemes of local financing for artisans and workers. After the brand merger, the merged
identity had a permanent Dastkar in the bank, which sold craft items, made by local artisans.
25.2.1.2 Effective combination of the core competencies of the parties involved 26
GE SBI cards is such a brand merger in which the core competencies of each of the brands were
mutually used to complement the other. For instance, GE is known for its high dependability. Owing
to its international image it is held in good esteem in the minds of the Indian people. But the problem
is with the reach aspect. GE also had a problem of understanding the customers who were spread
across the length and breadth of the country with diversified tastes and preferences. SBI had a good
reach and was looked as a conventional retail bank, which would be efficient in providing routine/
regular banking. Hence, this merger was made since each brand could complement the other brand
and could produce a synergetic effect with their strong areas.
25.2.1.3 Improvement of brand recall and brand image In case an established company
acquires a new brand, the company could improve the recall of the new brand by merging it with
established existing brands. This happened in the case of HLL after it acquired Brook Bond. All its
existing brands were merged with Brook Bond (‘Brook Bond Three Roses’). Also after HLL acquired
‘Ponds’ though an explicit merger was not carried out, Ponds name was always mentioned with HLL
so as to transfer the corporate image of HLL to that of Ponds. An international example27 of the same
would be the case of Stellar Physics, an internationally acclaimed optical instruments company. All of
Stellar Physics newly acquired subsidiary companies’ products have been merged into the Stellar
Physics brand. Hence, the new products have both the original model name and the Stellar Physics
brand name. Such brand mergers need to be taken with lot of care. If a company is going to acquire
a completely unrelated unit then it does not make any sense to merge with any of the existing brands.
If Baygon is going to acquire a health drink company say ‘Horlicks’ it doesn’t make any sense to call
the brand ‘Baygon Horlicks’. Hence, the amount of cohesion between the brands needs to be analyzed
before the merger.

25.2.1.4 Way to maintain market shares 28 Maintaining leadership is as tough as attaining a

leadership position. This is mainly due to the constant changes in the macroenvironment. Either
some technological breakthroughs can happen or a new international player may enter the market or
some other changes might happen which makes it hard to sustain the leadership position. For instance,
the major players in the agriculture industry in India merged their brands to counter the deep pocket
foreign invasions from the likes of Monsanto. Consider the brand merger of Lowe Lintas. Lintas is a
big ad agency whose major client is HLL. This merger had the benefit of creative pool of Lowe
(which plays a major role in the international market) and professionalism of Lintas. This helped
Lowe to pull HLL’s premier accounts like Axe deodorant. This helped Lowe get international accounts.
The HP—Compaq merger in which both the brands are giants in the hardware helped the sales to
further shoot up.
25.2.2 Classification of Brand Mergers
This classification is an extension of the shared value classification that has been taken from a study
of co-branding. The basic difference between brand merger and co-branding is the duration of the
merger. The brand merger is considered relatively more permanent than co-branding which is a
short-term phenomenon of coming together of brands. This classification is based on shared value
creation that comes out of a brand merger. Not all the shared value concepts from the co-branding
study can be applied but those that have been extended to the current study. They are value endorsement
mergers, ingredient mergers and complementary competence mergers.
25.2.2.1 Value endorsement mergers 29 Here, one brand endorses the value of the other. This
helps in building the equity of the other and results in an alignment of brand values in the consumers
mind. As a hypothetical example, if an American company wants to start a restaurant in India, which
specializes in Indian dishes then it would be better for it to have a merger with an established Indian
restaurant like the ‘Taj’. Taj endorses the American brand with its Indianess.
25.2.2.2 Ingredient mergers29 A lot of importance has grown among consumers today about the
accessories that come along with the core products. A car with an excellent financing facility would
be rated higher than the car, which does not talk about the financing part. Services have become key
differentiators for many products. If a brand like ‘Sunsilk’ could merge with a service brand like ‘Taj’
restaurants, it could improve the brand image of sunsilk. Here ‘Sunsilk’ and ‘Taj’ would come together
and offer a hair massage or hair care service for ‘Taj’ residents. This would become a co-branding
strategy if it is for a temporary period; it would be a brand merger if the merger is for a sufficiently
longer period. Brand mergers because of their longevity increases the mergers credibility unlike that
of co-branding. The following points are to be borne in mind while going for a brand merger.
a) The company should be able to get into a single service, which has a specific demand.
b) The demand should be such that it cannot be catered on its own and necessarily has to merge with
a local entity.
c) The strategy could be very useful if a company with an international reputation for quality
products enters a market like India, which needs avid distribution. This logic holds true for the
formation of GE, SBI cards which has been explained earlier in this article.
d) The additional ingredient should be fulfilling a major gap in terms of the current services.

e) Preferably the parent companies should be one i.e. producing a single product or providing a
single service. If this is not the case and the parent companies produce more than one products it
could lead to brand dilution.
25.2.2.3 Complementary competence mergers 29 Here two big brands with strong core
competencies those are complementary, merge together. The effect of ‘synergy’ is created by the
merger, i.e. the combined product is more than the sum of the parts. This merger has the highest level
of value creation, with consequentially the smallest potential pool of participants. The success of such
a merger lies on the core competencies of the brands coming together and the operational issues of the
merger and not in just designing and launching the concept. In the service sector this is a common
phenomenon. The merger between Kuoni travels and Sita travels was a complementary competence
merger. Kuoni travels is a leading international travel solution provider while Sita travels is a leading
Indian travel house and is a popular travel destination. The merger has led to a increase in the sales
of life memberships for both these travel houses. The same holds true for time share companies like
Mahindra Holidays and RCI. Mahindra Holidays has a merged entity with RCI in Europe, in order
to sell Indian times shares to European travelers. Similarly, the company can also sell holidays in
Europe to Indian tourists. Especially in the case of a time share scenario where the customer decides
on the basis of the destination portfolios such brand mergers can prove to be extremely useful.
25.2.3 Risks of a Brand Merger
The greatest risk in brand mergers is brand dilution. Brand mergers are viable to be formed only by
the big brands. However, the big brands take a long time to be built. Enormous amount of time, cost,
and manpower goes in to build brand equity. A brand merger can lead to a major degradation of the
brand equity if the merger is not handled properly. Immaterial of the reason of the merger the
communication has to be sound. The consumer in recent times has had shorter attention spans and
the loyalty to products has been seen to be sharply decreasing. In such a scenario, it is an important
strategic decision on the part of a company. Most importantly a brand merger leads to the responsibility
of multiple brands in effect. If any of the brands are associated with any negative notion in the minds
of the customer it is passed on to the merged brand. The brand equity of the merged brands need not
be the sum of the comprising brands. It could be far higher or far less depending on how the brand is
managed.
25.2.4 Benefits of Brand Mergers

Brand mergers can be highly profitable in the longer run. In spite of the fact that a large amount of
money goes into the brand building of the merged brand initially, at a later stage the merged brand
can yield high returns. Especially when it comes to situations when the brand is entering a new
market, which is too diversified to capture, the formation of a merged brand can help reduce the time
lapse. Brand mergers can also lead to the formation of a stronger challenger than many small challengers
in the case of a newly de-regulated market. Brand mergers tend to increase the life of the brand and
in case a known brand is in a phase where it is difficult for it to rejuvenate itself, a brand merger could
prove to be useful.

25.3 CO-BRANDING
As said in earlier chapters, the brand strategy options available before a company are namely line
extensions, brand extensions, Multi brands, New brands, and Co-branding.30 Let us look at how
co-branding has gained significant importance in brand strategy as a whole and the various intricacies
of co-branding.
25.3.1 Co-branding Definitions

Philip Kotler, defines co-branding as “two or more well-known brands are combined in an offer” and
each brand sponsorer expects that the other brand name will strengthen the preference or purchase
intention and hopes to reach a new audience. Co-branding is also termed as Dual branding and it
takes a variety of forms that are listed below31.
25.3.1.1 Same company co-branding In this co-branding exercise, the company advertises
their own brands together. For example, General Mills advertises Trix and Yoplait yogurt together.
25.3.1.2 Joint venture co-branding It is defined as two or more companies going for strategic
alliance in making an offer to the target. For example, WIPRO (Indian company) and ACER (Taiwan
company) had joined hands in offering laptop in the Indian market. Similarly, Bharat Petroleum
Corporation Ltd. has formed an alliance with the Bank of Baroda to launch the co-branded credit
card namely Bharat Bobcard. The card holders may buy the BPCL’s product namely petrol, diesel,
lubricants, etc. Diners club, British Airways, and Citibank had joined hands in offering a credit card
where the card owner will automatically become a member of the British Airway’s Executive Club.
25.3.1.3 Multiple sponsor co-branding In multiple sponsor co-branding, two or more companies
go for strategic alliance in technology, distribution, promotion etc. For example, Taligent is a
technological alliance between Apple, IBM, and Motorola.
25.3.1.4 Ingredient or component co-branding Manufacturers, who make components that

is entering into final products, go for promoting their brand with an eye on the replacement market.
For example, Intel inside campaign with the branded computers is a very successful case in component
co-branding. Indian Oil Corporation had gone for co-branding for its 2T oil with Bajaj and Kinetic
Honda. MRF had gone for co-branding with Maruti, Opel Astra, Cielo, and Fiat Uno.
25.3.2 Other Definitions
However, there are other definitions of co-branding also. Blackett and Nick Russel had classified
co-branding activities in yet another method that is given below: 32
25.3.2.1 Level 1—Reach/awareness co-branding In this type of co-branding, one of the

partners will try to get the mileage in terms of exposure through the other partner. Co-branding in
this case facilitate a partner to have access to the other partner’s customer base. This type of
co-branding will be very successful if the customer sees identifiable incremental benefit because of the
association.
25.3.2.2 Level 2—Values endorsement co-branding In this second level, one of the brands
occupies the endorser role. The brand values and positioning of the brands determine the roles. The
partner selection becomes very critical in this level.
value addition, maximizing the gains, matching of investments, and cultural integration, which
decide the success of the alliance and JV.
3. Co-branding is left to fall in the middle of the matrix, with moderate duration level and moderate
shared value creation. Synergy being the new mantra for the marketers to succeed in the liberalized
economy, co-branding will be taking a lead role to play in the future period. It is estimated that it
will grow at a rapid pace of 40% annually.
25.3.4 Classification of Ingredient Co-branding
Component co-branding is widely being practiced in India. The classification may be done in terms
of whether the component parts as well as the final product are branded or unbranded. Here unbranded
is defined as the marketer who is not actively involved in promoting the product by offering proper
visibility among the target markets.34
COMPONENT PART
FINAL PRODUCT
Branded Unbranded
Branded Category1 Category2
Unbranded Category3 Category4
Figure 25.2 Classification of component co-branding practices
25.3.4.1 Category 1 Both the component part and the final products are branded. Examples are
Indian Oil (Servo) with their car partners and MRF with their car partners. Since both, the final
product and the component part are branded and well known among the target market, both the
brands will enjoy the benefit of co-branding.
25.3.4.2 Category 2 The final product is branded depicts it and the component part is unbranded.
For example, companies like ‘Roots’, ‘Premier’ ‘Horns’ may go for component co-branding with their
automobiles partners. The chances for a positive rub off effect on the component parts by the final
product are more.
25.3.4.3 Category 3 The component part is branded while the final product is unbranded. The
classic example is ‘Intel Inside’ campaign. Co-branding will facilitate the component part manufacturer
to gain control over the final product manufacturer in the OEM market. The final product manufacturer
may enjoy the purchase preference for this brand in the end market because of his association with the
component part manufacturer.
A study carried out by the American Marketing Association investigated the consumers’ approach
to co-branding, which came out with an observation that the IT consultants look out for the ‘Intel
Inside’ blue and white logo in advertisements before suggesting a particular brand of computer to
their clients.35

25.3.4.4 Category 4 Where both are unbranded, the probability of success is very low. But the
combination may explore the value for money or lower end of the market.
25.3.5 Benefits of Co-branding
In this new marketing era, companies prefer their brands to collaborate with other brands to achieve
the following benefits:36
1. Line extensions succeed by capitalizing on a partner’s brand equity.
2. Brand extension success rates are maximized in the new market when co-branded with the reputed
brand that has established in that market.
3. Usage extension may happen due to component co-branding.
4. Image reinforcement may take place due to co-branding.
5. The corporations are sharing the cost of loyalty programs; hence, the promotional costs to the
companies are coming down.
6. Co-branding signals a trade marketing operation.
7. Capitalizing on the synergies among a number of brands is yet another advantage of co-branding.
The companies gain in terms of purchase preference, price premium and enhanced brand image
by co-branding practices. Especially in component co-branding (Ingredient co-branding), the above-
mentioned benefits are experienced by the component part manufacturers. The final product
manufacturers do gain little from the component co-branding practices.37
Entry of brands into foreign markets presents an information asymmetry. A co-branding alliance
with the local brand may provide many benefits like reduced effort for building awareness, reduced
effort for building brand image, and enhanced ability to penetrate channels.38
25.3.6 Strategic Areas for Consideration in Co-branding

Owing to the benefits stated above, one may think that co-branding is the best strategy for certain
situation and falling into the trap without looking for particular factors to be considered may cause
more harm than benefit. Hence, the strategic areas that require a closer look in co-branding activities
are discussed below:34
25.3.6.1 Choice of partner In component co-branding, choice of the partner becomes the
critical issue. The component manufacturer should necessarily consider the strategic implications
and the long-term effects of such interaction. The final product manufacturer may look out for the
price premiums, profits, market expansions etc., from the alliance while the component manufacturer
depends upon the consumer evaluation of the branded component, and its implication of the future
sales. Both partners have to take into account the post alliance attitude of the consumer. Any mismatch
could lead to damage of equity to both or any of the brands.
25.3.6.2 Product pricing Pricing of the product is another major decision to be made. One of
the reasons behind price bundling is to claim price premium; but the tricky question is—What is the
amount of premium that can be actually charged?
Evaluations have to be made to identify the ideal price level where the consumer actually
derives value due to the addition of the branded component. Before this, a study has to be made on

whether the pay-off to the consumer is high enough to justify a price premium with the branded
component. Other issues further complicate this decision like what are the price premiums when the
partnering is between a branded component and an unbranded one and what are the price premiums
when both are branded?
25.3.6.3 Promotion Deciding the promotion mix and the ratio of exposure and spending by
both the brands is the next level of decision that has to be made. This would flow from the level of
involvement of the branded component in the alliance. It also derives from the equity that would
flow to both the partners from exercise. A strong branded component might result in the other
partner undertaking all promotional expenditure, just to be associated with the brand. Intel is a case
in point.
However, when the benefits derived are mutual, a ratio of sharing expenditure has to be worked
out, as in the case of Diet Coke containing Nutrasweet. At the other end, the manufacturers of the
branded component themselves undertake promotional expenditure on their own—where MRF tyres
advertises that it is the OEM for MRF, Open Astra, Fiat Uno, etc.
25.3.6.4 Asymmetry in gains and losses Offering a product with branded components may
not be equally beneficial. The dominant role of one branded component will affect the value of the
partner; this would result in unequal gains and losses brought about by the interaction, as assessment
of this will have direct implications on the choice of partners and the pricing issue.
25.3.6.5 Consumer preferences and co-branding This brings us to the issue of how relevant
component branding is to customer choice and preference. For a customer to make his purchase
decision based on the branded component, the latter should be an important part of the final product
as in the case of microprocessors or even car tyres. This is when the seller can get away with charging
price premiums, but at times the branded component is so important that the consumer is willing to
consider other final products with the same branded components. This is a case of asymmetry in gains
and losses when the component becomes more important than the product.
Another danger is that of bundling two brands of which the customer likes and prefers one
brand but has negative feelings over the other. As a result, the equity could get eroded significantly.
The question is, can a strong brand help to tide over the negative attitude, and may be result in a
change of attitude over the other. Hence, the following questions are becoming very critical to decide
the issue:39
a) When does a consumer actually prefer branded components?
b) What are the optimal pricing methods (including premium)?
c) Post alliance attitude towards both the brands.
25.3.7 Conclusion
The classification of co-branding from its close counter parts will pave the way for identifying the
differential feature of the concept. In addition, the classification of component co-branding helps us
to understand the likely gains for the component part manufacturer if he is going to associate with
the final product manufacturer. Till date many of the co-branding deals have been marriage of
convenience thinking that this exercise will deliver short-term often-tactical advantages. In future, a
more strategic approach will be adopted with greater thought given to who will be the right marketing
partner. The co-branding practices may also be looked upon as an early stage of courtship, which
could ultimately result in a merger or takeover in the lines of vertical integration.
REVIEW QUESTIONS
1. What do you mean by ‘Brand Cult’? What is the difference, if at all, between Brand Cult and
Brand Loyalty?
2. What are the ‘Seven Golden Rules’ of cult branding? Explain in detail their application with an
industry example.
3. Take an existing product/service and apply the guidelines suggested by Mark Di Somma as well
as the HBS conference suggestions to make it a cult brand over a period of time.
4. Justify your agreement or disagreement that ‘AMUL’ is a cult brand.
5 Suggest some changes that Royal Enfield ‘Bullet’ has to do to upkeep its status as a cult brand.
6. What do you understand by ‘Brand Mergers’ and how many ways are they classified into?
7. Suggest two recent examples in the Indian domain for the following type of brand mergers
a) Ingredient mergers
b) Complementary competence mergers
8. Give one Indian example each for the following types of co-branding:
a) Complementary competence co-branding
b) Classifications of component co-branding
9. How do you distinguish between co-branding, alliances, joint venture, and joint promotion?
10. How far do you think ‘promotion’ and ‘pricing’ have an impact in a co-branding exercise?
11. Take two products/services in any industry and apply the principles and strategies of co-branding to
them. Hence, by this create successful co-branding partners.
REFERENCES
1
Kotler, Philip., Marketing Management, Prentice-Hall India, 11th edition, 2003, p.418.
2
http://www.danherman.com/5d.html.
3
Ragas, Matthew W., and Bolivar J.Bueno, “The Power of Cult Branding”, Prima Lifestyles,
1st edition, September 24, 2002.
4
http://www.timesofindia.indiatimes.com/cms.dll/articleshow?art_id=9403563.
5
http://www.allaboutbranding.com/click.lasso?article=262.
6
http://hbswk.hbs.edu/pubitem.jhtml?id=3228&t=marketing.
7
http://agencyfaqs.com/news/stories/2003/02/20/5702.html.
8
Dr. Gogula, Ratnaja, “Brand Biography-AMUL’s”, Advertising Express, June, 2003.
9
Vyas, B.M., “Institutional Structure to Sustain Smallholder Dairy Marketing—The AMUL Model”,
can be accessed at http://www.ssdairy.org/Programme/html/theme4_2.htm.
10
www.jbims.edu/publications/visristi.htm.
11
Chadha, Radhika., “Dance to a Different Drummer”, Catalyst, June 06, 2002, can be accessed at
http://www.blonnet.com/catalyst/2002/06/06/stories/2002060600140400.htm.
12
Kurien, Veghese., AMUL Saga, can be accessed at
http://www.india-seminar.com/2001/498/498%20verghese%20kurien.htm
13
http://www.automeet.com/interface22.html.
14
http://royalenfield.com/login.asp?pageno=78.
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The Royal Enfield Brand Store, The Times of India, January 8, 2004.
16
http://royalenfield.com/NewsDetails.asp?Newsid=91&Mode=currentnews &rightnav=undefined.
17
www.royalenfield.com.
18
Interview of Siddartha Lal, can be accessed at http://www.agencyfaqs.com/news/interviews/
lal_2810_2002.html.
19
http://www.hmambassador.com/history.asp.
20
http://www.hindustantimes.com/news/specials/iday2003/10brand.shtml
21
http://www.hindmotor.com/bharatsamby.asp.
22
http://www.hmambassador.com/reasons.asp.
23
http://www.hindu.org/publications/fgautier/rih9_12.html.
24
http://www.hindmotor.com/retroamby.asp
25
http://standard chartered.com/global/news/2000/press-20000801.htm
26
http://www.sbicard.com/sbi/aboutus.jsp
27
www.stellar-physics.com
28
Brand Equity, The Economic Times, September 13, 2003
29
Mehta, Sachin., “Co-branding as a New Competitive Weapon”, JBIMS, can be accessed at
http://www.indiainfoline.com/bisc/art4250101.html
30
Schmalensee, Richard., “Commodity Bundling by Single Product Monopolies”, Journal of Law
and Economics, 25, 1982, pp.67–72.
31
Kotler, Philip., Marketing Management—The Millennium Edition, Prentice-Hall India, New Delhi,
1999, p.417.
32
Blackett, Tom., and Nick Russell, “Co-branding: The Science of Alliance,” Journal of Brand
Management, 2000.
33
Ibid. 32.
34
Venkatesh, R., and Vijay Mahajan, “Products with Branded Components: An Approach for
Premium Pricing and Partner Selection”, Marketing Science, 16, 1997, pp.146–165.
35
Jackson, Tim., “The Inside Story of a Chip Giant”, The Strategist, Business Standard, December 9,
1997, p.3.
36
Kapferer, Jean-Noel, Strategic Brand Management, Kogan Page India Limited, New Delhi, 2000,
pp.87–88.
37
Anandan, C., and S. Kaliyamoorthy, “A Study of Component Co-branding Practices in India”,
XXIII Indian Social Science Congress, Coimbatore, 1999.
38
http://www.bus.okstate.edu/mktg/vossk/product/tsld016.htm
39
Simonin, Bernard L., and Julie A. Ruth., “Is a Company Known by the Company it Keeps?
Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes”, Journal of
Marketing Research, XXXV, 1998, pp.30—42.

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114 Product Management

12.2.3 Other Forms of Names

12.3 PROBLEMS FACED DUE TO LINGUISTIC DIFFERENCES

12.4 BRAND NAMING STRATEGIES

12.4.1 Individual Names

12.4.2 Blanket Family Names/Umbrella Branding

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Naming Strategies 115

12.4.3 Separate Family Names for all Products 5

12.4.4 Corporate Name Combined with Individual Product Names 5

12.5 THE NAMING PROCESS

Figure 12.1 Five-stage process of choosing a brand name

116 Product Management

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Naming Strategies 117

12.6 THE DOS AND DON’T S WHILE NAMING BRANDS

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

118 Product Management

12.7 BRAND NAMES— WHAT THE RESEARCHES HAVE GOT TO SAY?

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Naming Strategies 119

12.8 ISSUES IN MAINTENANCE OF BRAND NAMES—

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

120 Product Management

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

122 Product Management

Figure 13.1 Physical attributes of brand identity

13.3 DIMENSIONS AND IDENTITY 2

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Identity 123

Figure 13.2 David Aaker’s framework of brand identity

13.3.1 Brand as a Product

13.3.2 Brand as an Organization

13.3.3 Brand as a Person

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

124 Product Management

13.3.4 Brand as a Symbol

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Identity 125

Table 13.1 Brand identity

Perspective Dimension Remarks

Attributes Pond’s protects the skin, nourishes

Quality Quality products at an affordable

Users Young vivacious women and

Country of origin Supposed to be India

Heritage A 50 years cosmetic brand in India.

13.4 INNER AND OUTER IDENTITY 1

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Identity 127

Figure 13.4 Jean–Noel–Kapferer’s six-sided prism for brand identity

13.6 HOW TO FIND IDENTITY?

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

128 Product Management

13.7 MULTIPLE IDENTITIES

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

Brand Identity 129

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

132 Product Management

Brand Image 133

Figure 14.1 Brand networking technique

Extracted from Chapters 12-25 of ‘Product and brand management’, Anandan

134 Product Management

Figure 14.2 Brand networking showing associative strength