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Marketing Management

Exam Two Lecture Two


Presentation Themes
Brands Brand Equity Brand Elements Devising A Brand Strategy Brand Extensions



The American Marketing Association defines a brand as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.  A brand is a product or service that adds dimensions that differentiate it in some way from other products or services designed to satisfy the same need.  These differences may be functional, rational, or tangible-related to the product performance of the brand.  They may also be more symbolic, emotional, or intangible-related to what the brand represents.

The Role of Brands

 Brands identify the source or maker of a product and allow consumers to assign responsibility to a particular manufacturer or distributor.  Consumers learn about brands through past experiences with the product and its marketing program.  Brands perform valuable functions for the firm.  Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again.  Brand loyalty provides predictability and security of demand for the firm and creates barriers to entry for other firms.  Branding can be seen as a powerful means to secure a competitive advantage

Marketing Advantages of Strong Brands

 Improved perceptions of product performance  Greater loyalty  Less vulnerable to competition  Less vulnerable to crises  Larger margins  Inelastic consumer response to price increases  Elastic consumer response to price decreases  Greater trade cooperation  Increase in effectiveness of IMC  Licensing opportunities  Brand extension opportunities


The Scope Of Branding

A brand is a perceptual entity that is rooted in reality but reflects the perceptions and perhaps even the idiosyncrasies of consumers.  Branding is endowing products and services with the power of a brand.  To brand a product, it is necessary to teach consumers who the product is, what the product does, and why consumers should care.  For branding strategies to be successful and brand value to be created, consumers must be convinced that there are meaningful differences among brands in the product or service category.  The key to branding is that consumer must not think that all brands in the category are the same.  Brand differences often are related to attributes or benefits of the product itself.

Defining Brand Equity

Brand equity is the added value endowed to products and services.
 This value may be reflected in how consumers, think, feel, and act with respect to the brand as well as the prices, market share, and profitability that the brand commands for the firm.  Brand equity is an important intangible asset to the firm that has psychological and financial value.  Customer-based brand equity can be defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand.  A brand is said to have positive customer-based brand equity when consumers react more favorable to a product and the way it is marketed when the brand is identified as compared to when it is not.


 Marketers build brand equity by creating the right brand knowledge structures with the right consumers. There are three main sets of brand equity drivers:  The initial choice for the brand elements or identities comprising the brand.  The product, service, and all accompanying marketing activities and supporting marketing programs.  Other associations indirectly transferred to the brand by linking it to some other entity.

Choosing Brand Elements

 Brand elements are those trademarkable devices that serve to identify and differentiate the brand.  Brand elements can be chosen to build as much brand equity as possible.  The test of the brand-building ability of these elements is what consumers would think or feel about the product if they only knew about the brand element.

Brand Elements
Brand names Slogans Characters URLs Logos Symbols


Brand Element Choice Criteria

 There are six criteria in choosing brand elements. The first three (memorable, meaningful, and likeable) can be characterized as brand building in terms of how brand equity can be built through the judicious choice of a brand element.  The latter three (transferable, adaptable, and protectable) are more defensive and are concerned with how the brand equity contained in a brand element can be leverage and preserved in the face of different opportunities and constraints.

Brand Elements
 Brand elements can play a number of brand-building roles.  Brand elements should be easily recognized, recalled, inherently descriptive, and persuasive.  Memorable or meaningful brand elements can reduce the burden on marketing communications to build awareness and link brand associations.  The different associations that arise from the likeability and appeal of brand elements may also play a critical role in the equity of the brand.

Get the consumer more actively involved with a brand by creating an intense, active relationship. Personalizing marketing is about making sure that the brand and its marketing is as relevant as possible to as many customers as possible.

 Marketers need a variety of different marketing activities that reinforce the brand promise.  Integration is especially critical with marketing communications.  Each communication should be judged in terms of the effectiveness and efficiency that it affects brand awareness, and whether it creates, maintains, or strengthens brand image.  Brand awareness is the consumers ability to identify the brand under different conditions, as reflected by their brand recognition or recall performance.  Brand image is the perceptions and beliefs held by consumers, as reflected in the associations held in consumer memory.

 Marketers must adopt an internal perspective to consider what steps to take to be sure employees and marketing partners appreciate and understand how they can helpor hurt brand equity.  Internal branding is activities and processes that help to inform and inspire employees.  Brand bonding occurs when customers experience the company as delivering on its brand promise. The brand promise will not be delivered unless everyone in the company lives the brand.  One of the most potent influences on brand perception is the experience customers have with company personnel.

Leveraging Secondary Associations

The brand may be linked to certain source factors:  The companythrough branding strategies.  Countries or other geographical regions identification of product origin  Channels of distributionchannel strategy.  Other brandsingredient or co-branding.  Characterslicensing.  Spokespeopleendorsements.  Sporting or cultural eventssponsorships.  Other third party sourcesawards or reviews.

Brand Reinforcement
 As the companys major enduring asset, a brand needs to be carefully managed so that is value does not depreciate.  Brand equity is reinforced by marketing actions that consistently convey the meaning of the brand to consumers in terms of:  What products the brand represents?  What core benefits it supplies?  What needs it satisfies?  How the brand makes those products superior?  Which strong, favorable, and unique brand associations should exist in the minds of consumers?


 The branding strategy for a firm reflects the number and nature of common and distinctive brand elements applied to the different products sold by the firm.  When a firm introduces a new product, it has three main choices: It can develop new brand elements for the new product. It can apply some of its existing brand elements. It can use a combination of new and existing brand elements.

Brand Extensions and Family Brands

 When a firm uses an established brand to introduce a new product, it is called a brand extension.  When a new brand is combined with an existing brand, the brand extension can also be called a sub-brand.  An existing brand that gives birth to a brand extension is referred to as the parent brand.  If the parent brand is already associated with multiple products through brand extensions, then it may also be called a family brand.

Line and Category Extensions

 Brand extensions can be broadly classified into two general categories:  In a line extension, the parent brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand.  In a category extension, the parent brand is used to enter a different product category from that currently served by the parent brand.

Brand Lines and Variants

 A brand line consists of all productsoriginal as well as line and category extensions sold under a particular brand.  A brand mix (or brand assortment) is the set of all brand lines that a particular seller makes available to buyers.  Many companies are now introducing branded variants that are specific brand lines supplied to specific retailers or distribution channels.  A licensed product is one whose brand name has been licensed to other manufacturers who actually make the product.

To Brand or Not to Brand?

 The first branding strategy is whether to develop a brand name for a product. Today, branding is such a strong force that hardly anything goes unbranded.  A commodity is a product presumably so basic that it cannot be physically differentiated in the minds of consumers.  Assuming a firm decides to brand its products or services, it must then choose which brand names to use. Four general strategies are often used:  Individual names  Blanket family names  Separate family names for all products  Corporate name combined with individual product names

Advantages of Brand Extensions

 Recognizing that one of the most valuable assets is a firms brands, many have decided to leverage that asset by introducing a host of new products under some of its strongest brand names.  Brand extensions have two main advantages: Facilitate new product acceptance. Provide positive feedback to the parent brand and company.

New Product Success

 Brand extensions improve the odds of new product success in a number of ways:  Consumers can make inferences and form expectations as to the likely composition and performance of a new product based on what they already know about the parent brand itself.  Extensions reduce risk.  Extension can result in reduced costs of the introductory launch campaign.  They can avoid the difficulty of coming up with a new name.  Extensions allow for packaging and labeling efficiencies.

Disadvantage of Brand Extensions

 Line extensions may cause the brand name to not be as strongly identified with any one product.  Brand dilution occurs when consumers no longer associate a brand with a specific product or highly similar products and start thinking less of the brand. Different varieties of line extensions may confuse and perhaps even frustrate consumers.  The worst possible scenario with an extension is that it harms the parent brand image in the process.  Even if sales of a brand extension are high and meet targets, it is possible that this revenue will have resulted from consumers switching to the extension from existing product offerings of the parent brand- called cannibalizing the parent brand.  Intra-brand shifts in sales may not necessarily be so undesirable, as they can be thought of as a form of pre-emptive cannibalization.