What does branding mean?

Transforming the product

category

Cont.

What does brand inject into a product & how is

latter transformed?

1. 2. 3. 4.

What What What What

attributes materialize? advantages are created? benefits emerge? obsessions does it represent?

Cont.

Brand is a long-term vision

1. 2. 3. 4. 5.
Brand vision & purpose Brand values Brand tone codes & personality Strategic image features (positioning) Products within decided segments

Cont.

Brand is a living memory Brand is a genetic program Brands endow products with meaning Brand is a contract between product &
market

Brand Contract

Closely monitor needs/expectations of potential

buyers React to technical & technological progress Provide both product volume & quality Control supply quantity & quality Deliver products to distributors etc. consistently & according to requirement Give meaning to brand & communicate it to target market

Service Brands

Europcar, Hertz, Visa Another example Banking Service brands are invisible so they depend on
image of service provider

Luxury Brands & Griffes

Griffe is a French term which means the fixed

image of a signature to be used as a trademark e.g. Yves St. Laurent or any designer line signed by the designer. If it is produced without the trademark signature, it becomes a luxury brand. So Dunhill, Boss etc. are not griffes, they are luxury brands. Nina Ricci has moved from griffe to luxury brand.

Brand Pyramid

The griffe The luxury brand The upper-range brand The brand

Brand Awareness & Desire

1. The buyers who still dream of a brand are

2.

3.
4.

addicts. They should be rewarded. The buyers who no longer dream are saturated. Their desire must be revived. Non-buyers who dream but do not buy must be encouraged Finally non-buyers who do not dream & are indifferent, fall outside the target segment.

Co-branding

New product launches clearly identify the brands

that cooperated to create & market them. Compaq & Mattel brought out a line of hitech/interactive toys.

Many line extensions capitalize on the partners

brand equity. Haagen Dazs launched a Baileys flavored ice-cream.

Cont.

To maximize their brand extension success rate,

many companies seek help from other companies brands whose established reputation helps. Kellogg co-branded its cereals with Healthy Choice.

Co-branding may help usage extension. In

Europe, Bacardi & Coke advertise together

Cont.

Ingredient co-branding has become

commonplace. Intel with Compaq is a common example. Image reinforcement may also be a co-branding objective. Ariel & Whirlpool tied up to benefit from each others equity & synergy. Capitalizing on synergies among a no. of brands is another co-branding objective. Nestle showcases all products to take on competition.

Cont.

Co-branding appears in sales promotions too.

Companies find that Club Med vacations work better than cash for consumer contests. Loyalty programs increasingly use co-branding arrangements. Jet Airways tying up with Stanchart is a good example. Co-branding may signal a trade marketing operation. Danone created a special yogurt for Quick (competitor to Big Mac).

Cont.

Even though co-branding is fashionable, not all

1.
alliances should be visible. In the xerox market, many products sold by Canon are made by Ricoh. Mercedes & Swatch will jointly launch a car Smart, w/o the Mercedes insignia. Nestea is a Nestle product, distributed by Coke, but there is just a small mention of Coke on the back.

2.
3.

Brand identity

1. 2. 3. 4. 5. 6.

What is the brands particular vision & aim? What makes it different? What need is the brand fulfilling? What is its permanent nature? What are its values? What are the signs which make it recognizable?

Identity & Image

Image is on the receivers side, while identity is

on the senders side. Image refers to the way the target groups decode the signals emanating from the brand. The purpose of identity is to specify the brands meaning & aim. In Brand Management, identity precedes image; before projecting an image to the public, you must know exactly what you want to project.

Positioning & its limitations

Evaluation & choice of positioning: 1. Are products current looks & ingredients
2. 3. 4. 5.

compatible with the positioning? How strong is assumed consumer motivation behind the positioning? What size of market is involved? Is this positioning credible? Does it capitalize on a competitors actual or latent weakness?

Cont.
6. What financial means are required by such positioning? 7. Is this positioning specific & distinctive? 8. Is it sustainable vs. competition? 9. Does it provide some alternative solution, in case of failure? 10. Does it justify a price premium?

Limitations of positioning

1. Focuses more on product & less on brand. 2. Does not reveal all the brands richness of 3.
4.

meaning or reflect all its potential. Allows communication to be entirely dictated by creative whims & current fads. Brand identity serves to offset the limitations of positioning.

Brand Identity Prism

1. Physical qualities or physique, which is both

2.

the brands backbone & its tangible added value. First step in developing a brand is to define its physical aspect. E.g. Coke bottle is a distinctive part of the Coke brand. So is the dark liquid (no crystal Coke, though there is a crystal Pepsi). Personality, or character. The way it speaks of the product shows what kind of person it would be if it were human.

Cont.
3. Culture, from which every product derives. It means the set of values feeding the brands inspiration. Product is concrete representation of this culture & means of communication. Major brands are driven by a culture & in turn convey this culture. In focusing too heavily on personality, advertising has ignored this vital facet. E.g. Mercedes embodies German values, Coke stands for US & Sony for Japan.

Cont.
Culture links brand to firm esp. when the 2 bear the same name. Nestle is not a fun & enjoyable food brand; it is considered austere & puritan, because the degree of freedom of the brand is often reduced by the corporate culture of which it is the most visible outward sign. Brand culture is vital in launching new alcohol brands, since one needs to implicitly reassure consumers (excitement-cum-fear factor). Banks too.

Cont.
4. Relationship, since brands are at the crux of transactions/exchanges between people (esp. the service sector). Nike bears a Greek name that relates it to specific cultural values like the Olympic Games. IBM symbolizes orderliness & Apple friendliness. The relationship aspect is crucial for banks etc.

Cont.
5. Reflection, because its communication & most striking products build up over time. So brand will always tend to build a reflection or an image of the buyer or user which it seems to be addressing. 6. Finally, brand speaks to our self-image. Through our attitude towards certain brands, we develop a certain inner relationship with ourselves. Porsche try racing against yourself

Power of brand names

In deciding to call it Apple, the founders wanted

to emphasize the unconventional nature of the brand; in refusing to idolize computer science, Apple was completely overturning the humanmachine relationship. Machine was intended to become something to enjoy, rather than revere or fear. The brand name had in itself all the ingredients to establish a new norm (which seems obvious now).

Cont.

Nomen est omen

A name is an omen. Examining a brand name thus amounts to decoding this omen, i.e. the brands program, its area of legitimacy & knowhow; as well as its scope of competence. Strong brand names give words their own meaning e.g. Mercedes is a Spanish Christian name, but now symbolizes German efficiency.

Brand characters/emblems

Emblem is a brands capital equity. Emblem

serves to symbolize brand identity through a visual figure other than brand name to: Help identify & recognize brand Guarantee the brand Give brand durability Help differentiate & personalize

1. 2. 3. 4.

Examples:

Mercedes insignia Renaults diamond Nikes dash Adidass 3 stripes Nestles nest Red grouse for Famous grouse whisky Lotus for India

Brand Creator

YSL designer wear Paloma Picassos perfumes Coco Chanel designer wear Shahnaz Husseins cosmetics Lacoste sportswear Pierre Cardins accessories

Brand potential

Not all the facets of brand identity are

equally patent. Some are TOM, while others are latent, concealed in certain underlying signs of the brand.

Launching new brands

If new brand does not convey its values from

the very start, it is unlikely to become a major brand. Choosing symbolic reference is as important as deciding product reference. Successful launch requires that new brand be treated as real brand from very start not as mere product name presented in advertising.

Defining brand platform

Brand identity is not the same for the company-

named brands, as for brands that have their own name. Dupont, Philips, IBM are both company & brand. But Tide is a P&G brand. For company-named brands, the brand becomes the major spokesperson for company. So there must be a relationship between brand & corporate identity. That is why company-named brands have same culture as company.

Cont.

The identity of strong brands is so strong that

companies often change their corporate name to take on the name of their star brand (Sony was earlier known as Tokyo Tsuhin Kogyo).

Fena Ltd. was earlier called Syndet & Chemicals

Ltd.

Determining products typical of brand

Not all products of a brand equally represent it.

Only those which truly epitomize the brands identity should be used as support in a launch campaign. Product features should also support the brands ideology. Compaq is expected to have the latest gizmos, Mercedes cannot look like Ambassador!

Cont.

For service brands, this task is tougher. So

choose the services which best exemplify the brand. The tone communicated & the benefits conveyed should not be chosen in isolation, but because they are the strategic traits of the brand you are building.

Brand Campaign or Product Campaign?

Whenever a brand is created, there are 2

alternative strategies to communicate the brands meaning either directly or by focusing on a particular product. VW focused on Beetle, because it was an original piece of work totally different from the normal car culture. Tata however focuses on the Tata corporate brand name, because of the tremendous clout it commands.

Cont.

1. 2. 3. 4. 5.

5 universal brand identity conditions: Is it specific Is it well-founded Is it motivating Does it capitalize on competitor weakness Is it supported internally by all

Brand Language

Allows brands to freely express their ideology.

1. 2. 3. 4.

Serves as a means of decentralizing decisions. So it should specify: Dominant features of style Audio-visual characteristics e.g. a popular jingle or piece of music (Maggi/Airtel) Graphic layout & brands color codes Principles determining how brand & its signature (if any) can be used

Choosing strong brand name

To make a strong brand, any name can be used

(or almost any), provided there is consistent effort over time to give it meaning. Brand name must be chosen with a view to the brands future & destiny & not in relation to the specific market & product situation at the time of its birth. Think internationally too. Brand name should not describe what the product does but reveal/suggest a difference.

Brand awareness

TOM: whether brand is first to come to mind in

the product category Unaided awareness: brand impact or the extent to which it is spontaneously associated with given product category Aided awareness: specifically asking people whether they have heard the brand name

Sustaining a brand long term

Brand is a name product progress takes to

access the market e.g. inclusion of enzymes in detergents is called Ariel & the progress in convenience coffee is called Nescafe. Before long, DOBs start copying these innovations, so no brand can afford to get complacent e.g. Nescafe is generic with the coffee category because it never stopped innovating from 1945! Same for Gillette.

DOB

Concept of DOB: Distributor Own Brands

1. Guilbert in France sells office stationery bought from 3M under its own store name! 2. DOBs are everywhere automobiles, electrical equipment, FMCG etc.

How to fight DOB

One way to renew product regularly is to

upgrade it to current level of expectation e.g. detergent manufacturers making minor changes every 2-3 years. Second is to integrate new/emerging needs while holding onto same positioning e.g. Volvo Third is to constantly confirm ones superiority on one particular axis e.g. shampoos extending into creams, lotions etc. on the hair loss platform

Cont.

Fourth way lies in constantly strengthening the

brands reputation in terms of WOM reports from experts & opinion leaders. Finally, in multi-brand companies, one must prioritize i.e. accord the stronger brands more in terms of innovativeness etc.

Invest in communication

Communication is a powerful weapon to fight

the confusion that DOBs seek to create in the minds of the brands target audience. Sustained advertising creates a barrier to entry. But you also need constant product innovation, since advertising alone cannot help.

Remain within mainstream price

ELDP:
Every Day Low Price Instead of myriad promos, you stick to a consistent & constant low price all year round. Used by P&G to lure back customers lost due to perceived high premiums. Brand has to stay within the core of the market, if it wants to continue. Loyalty is not price insensitive.

Dominate to invest

Behind every strong brand, there is a strong

company.

Become an unchallenged leader of niche

markets, which competitors will then hesitate to enter.

Control the distribution system

1. 2. 3.
4. 5.

The Levis criteria for retailers: Must stock well known brands High quality ambience Product range affecting Levis image must not be found nearby Service must be in tune with brand Shop must be fixed construction with adequate space for jeans for target audience

Create entry barriers

1. 2. 3. 4. 5.

DOBs sprout when: There is high volume in market Offer hardly changes Brands are expensive Customers perceive little risk Technology is accessible at low cost

Main sources of entry barriers

Cost of production Mastering technology & quality Domination through image & communication Line extension Branding immediately Controlling relationships with opinion leaders Controlling distribution Legal recourse

Adapting to market

3 layers of brand:
1. Kernel Top of the pyramid & source of its identity. Invisible, but imparts coherence & consistency 2. Codes How the brand talks & which image it uses (middle level) 3. Promises Positioning platform (bottom)

LOreal Error

Their perfume Fidji was amongst the top 5 when

it was launched. After years of communicating a woman is an island, her perfume is Fidji, LOreal tried to modernize the message by running a campaign featuring a woman with a snake, with the slogan the perfume of rediscovered paradise. Sales dropped drastically, because this interfered with the brand essence which was the basic nature of women.

Range Extension

Multiplication of sizes Multiplication of flavors Multiplication of ingredients (Diet Pepsi) Multiplication of generic forms (medicines) Multiplication of physical forms (liquid/powder) Multiplication of product add-ons (shaving cream, foam, gel) Multiplication of versions having specific application (shampoos)

Brand Architecture

Product brand Line brand Range brand Umbrella brand Source brand Endorsing brand

Product brand strategy

Involves the assignment of a particular name to

1 & only1 product as well as one exclusive positioning. As a result each new product receives its own brand name that belongs only to it. E.g. P&G Ariel, Vizir, Dash (all detergents), Camay, Zest (soaps). Each product has a precise, well-defined positioning & occupies a particular segment of the market.

Line brand strategy

The line responds to the concern of offering one

coherent product under a single name by proposing many complementary products. That these products are completely different for the producer makes no difference for the consumer who perceives them as related. E.g. a shampoo maker offering an oil & then a gel, all under the same brand name (Clinic).

Cont.

Advantages: 1. Reinforces selling power of brand & creates a 2. 3.

strong brand image Leads to ease of distribution for line extensions Reduces launch costs *Warning! Extensions should be closely linked to existing product concept.

Range brand strategy

Range brands bestow a single brand name &

promote through a single promise a range of products belonging to the same area of competence. Nestle is the best example of this category. Such names throw light on the products & help structure the range in such a way that it creates a criteria for segmentation even on shop shelves.

Umbrella brand strategy

Main advantage of umbrella brand strategy is

capitalization on 1 single name & economies of scale on an international level. Even the occasional setback can add to public awareness of brand. Best example is Tata, which stretches across countless categories & can withstand failures like TOMCO with elan.

Source brand strategy

Identical to umbrella brand, except that the

products are directly named. Best example is Dabur, which is the trusted source for a host of products, but names them distinctly e.g. Vatika, Hajmola, Real etc. The corporate brand is endorsing the quality of merchandise & acts as the guarantor.

Endorsing brand strategy

One of the least expensive ways of giving

substance to a company name & allowing it to achieve a minimal brand status. High quality of these brands is guaranteed by the names of major organizations. E.g. GM for cars, J&J for baby products etc.

Choosing the appropriate branding strategy

Choice of brand policy is not a stylistic exercise

but more a strategic decision aimed at promoting individual products & ranges as well as capitalizing the brand in the long term. Criteria include: Product/service in question Consumer behavior Firms competitive position

1. 2. 3.

Cont.

Decision stems from recognition of the brands

role as expected by the customer, compared with function & meaning of possible product, range & line specific names & that of other quality indicators such as packaging, catalogue, advertising & the retailers own recommendation & advice.

3M Strategy

Each innovation has to answer the following 4

1. 2. 3. 4.

questions: Is the product a radical innovation? Is there a usable primary brand? Does the product justify a new primary brand? Does it justify a new secondary brand?

Product names
1. Lacoste strategy: Brand transform everything it embraces, turning an article of everyday use into a product of distinction. 2. Mercedes strategy: A, B, E class denote different models with the image of Mercedes reflected in every model. 3. Nestle strategy: Source brand naming.

Cont.
4. Lancome strategy: Uses a suffix ome after every brand name to establish the link between brand & product. 5. Clarins strategy: Uses multi as a prefix to all its products because it is part of the core identity of the Clarins brand & not just an afterthought. 6. Dior strategy: Allows extension w/o destabilizing heart of brand.

Cont.
7. P&G strategy: Brands are fully autonomous & exist w/o any reference to source or company. Examples would be Ariel, Dash, Tide etc.
* HLL uses the same strategy. Nestle & Cadbury use exactly the reverse strategy.

Some failures in brand-product relationship

1. Brand simply disappears behind 1 of the

2. 3.

products & ceases to have an identity of its own e.g. Nina Ricci & L Air du Temps (its bestselling perfume). Brand product disconnection e.g. Corning does not gain from Pyrex (which is not perceived as a Corning brand). Breakdown due to individual financial accountability of brands, leading to their demise due to minimal resource allocation.

Brand extension

1. Innovation allows companies to monitor &

2.

3.
4. 5.

surpass customer expectations. Extension allows economies of scale in advertising. It is also the only way of defending the brand at risk in the home market (esp. from DOBs) It gives access to accumulated image capital, esp. during M&A. It fuels image capital of brand.

Some paradoxes of extension

Consumer distinguishes rather well the brand

from the product e.g. Mars realized this when their ice cream bar clicked, though they felt they stood only for chocolates. Nielsen study proved the fallacy of mistakenly assuming that it is more cost effective to extend, since new products launched under new names end up with twice the market share of extensions ( except for health & beauty).

Conclusion

Many managers confident in the productivity of

brand extension, under assess the media advertising budget. The golden rule is not to do so, since ceterus paribus, the extension will always enjoy a slight advantage over totally new launches.

Influence of extensions on brand capital

1. Some extensions take advantage of brand 2.

3.

capital. Product sells thanks to what it receives from brand. Other extensions destroy the brand capital esp. if the extension is downwards. Some extensions have a neutral effect on the brand capital. The product is not out of place but in tune with what is expected from the brand.

Cont.
4. Some extensions influence the meaning of the brand. When Tefal (home appliances) endorsed telephones it modernized itself through these extensions & acquired the tag of a brand that brings together technology & aesthetics in the service of the home. 5. Some extensions are regenerating. They revive the brand & its core & re-express its base values in a new, stronger manner (Lacoste green blazer, Marlboro classic).

Cont.

Some extensions, though not desired by the

brand are necessary to defend the brand capital. Their purpose is to prevent the brand name from being used by others in another category. So Cartier has diversified from watches to other related products to defend its brand capital.

Extension errors

Restricted vision of brand:

Brand extension program is limited to few variations of main product, with no significant innovation. Locking up the brand: Nestle thought Maggi was old & stopped using it for extensions, thus making it really old & outdated in the mind of the consumer (identity jeopardized image).

Cont.

Harmful extensions:
In general, extension into lower quality segments is destructive. So Lycra, does not have a sub brand, since it may imply different quality levels. Opportunism & identity incoherence: China & cutlery in a Nina Ricci boutique does not make sense, since these items do not fit into the parent brand image.

Cont.

Prototypical brands:
In some markets, one brand may represent the entire product category e.g. Coke for colas & Levis for jeans. So it becomes a prototype brand. Such a brand should not venture into territories where other prototypes exist. Lacoste lost out when it tried to venture into jeans territory (dominated by Levis).

Cont.

Trap of mundane products:

Attaching the brand to a mundane product renders the brand artificial & only an act of communication. Thomson did not benefit from the image of Thomson Industry when it tried to sell home appliances. That is why Videocon sells appliances under a different set-up.

Cont.

Case of luxury goods:

When a brand proliferates into uninspiring products such as cigarettes, handkerchiefs, ties etc., its capital asset is drained. Cardin is the best example of this foolishness. Complementarity is not guarantee: Products do not determine extension possibilities, adherence to brands core identity does so. Lacoste cannot enter jeans market.

Marketing Mix of brand extensions

Foreseeing risks for brand:

Fisher price did not enter the child-care product segment, despite the obvious opportunity. Anticipating risks for extension: 3 psychological assumptions: 1. +ves of brand will be transferred to new item 2. -ves will not be transferred 3. +ve of brand will not become ve of new item 1 & 2 verified by research, comm. ensures 3.

Cont.

Names?
When extension is close to core, it should not receive specific brand name, when it is remote, it should. Co-branding: Helps make extensions more credible. Compaq & Mattel makes Compaqs extension credible.

Cont.

Reinstating brand values:

Sales of standard product will decline if we get carries away by extensions, so it is vital to remind customers of your founding values. Coherence of marketing mix: Extension should not be limited to merely bestowing names. It should be accompanied by a mktg. mix different from previous products. Pernod failed with peanuts due to perishability. Should have changed the place P.

Cont.

When brand hides new product:

In national launches of extensions, target clientele might not even know that they are dealing with new products. Ad is well seen, but not the product. Celebrity endorsement compounds the confusion & announcements may be treated as simple reinforcements. Dabur, Hajmola & AB.