1 - understanding brands copy

8/13/2019 1 - Understanding Brands COPY

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UNDERSTANDINGBRANDS*

*Based on HBR Article :UnderstandingBrands.

BRAND MANAGEMENT (ELECTIVE)


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What is a Brand?

American Marketing Association definition

of a brand:

Name, term, sign, symbol or design, ora combinationof them intended toidentify the goods & servicesof one

seller or a group of sellersand to differentiate them from those ofcompetition.


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What is a Brand?

An alternative simpler

definition:A brand is the source of apromise to the consumer

a promise of benefits that arerelevant and differentiated.


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What do Brands do?

1. Inform.

2. Add value, well beyond functionalutility.

3. Lower the perception of risk,4. Reduce time& effort neededto

choose a product (or service, or).

Research finding:Consumers buy branded goods

based on their reputation &/or past experience

reducing uncertainty & assuring consistency!


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Brands & brand-owners

For business, brands that areassociated with their products and/orservices are their most valuable

assets -

a great deal ofmanagement attention is given todesigning, communicating, nurturing,

& protecting them.
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Brands : The Contemporary View

"Products are made in the factory,but brands are created in themind.

Walter Landor - Branding Consultant

So, what are brands seen as today?

Neuroscientists confirm that knowingthe brand impacts parts of the brain

known to affect feelings such asenjoyment & experience.


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Branding: The Contemporary

View

Brands today are seen as a web ofassociationsin the consumers mind that

impact the way consumers identify,classify, interpret, experience, & valuebrands.

What can this gecko be associated with?

GEICOa top rated insurance company inthe US.


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Branding: The Contemporary

View

Associations form the building blocksof consumers brand knowledge:

Tangible associations are related toproducts actual performance &functionality;

Intangible associationsstressextrinsic values of product, based onimagery & abstract ideas.


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a ang e n ang eassociations does this image bringto mind?


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Role of brand management today

Protect brandmeaning:Brand

decisionsaffect brandmeaning.Radical

changes canresult inconsumerswitch & loss

of profits.

Know thebrand:Understand

how it iscurrentlyperceivedby

consumers.

Managethebrands

authors:Influencethempositively

to deliverthedesiredbrand

message.

Find the

right

balance

betweenmaintainingconsistencyin brand

image &updatingassociations.


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Brands as identity markers

Thatwe are what we have, is

perhaps the most basic andpowerful fact of consumer

behavior.

Russell Belk, Consumer Behavior

Researcher


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Brands are identity markers!

Brands serve as identity markers - helpconsumers in presenting their self to

others. Brands expresspersonality, status,

lifestyle, social class, ideologies, &

other social identities. Brands carry culturally shared stories,

images, & associations.


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Where does Brand identity &meaning come from?

2. Instilling brands with humanpersonality characteristics.(Nikeand Michael Jordan).

1. Identifying people/ groups who mostuse itTHE PEPSI GENERATION

3. Usingadvertising & other forms ofmarketingcommunication.


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How consumers look at brands?

For customers brands fall into 5 types:

1. Sincere brands (Hallmark),

2. Exciting brands (Axe),

3. Sophisticated brands (Suzlon),

4. Competent brands (Burberry),

5. Rugged brands (Levis).


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How Brand Managers must respondto the market

1. Uncover targets identity needs design brand

to convey that identity meaning.

2. Create symbolic values for brands - symbolicvalues outweigh functional or utilitarian values.

3. Create compelling brand personalities that

consumers yearn to identify with.

4. Be careful about changing identity meanings

or extending brand to target new markets.


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Creating symbolic value at HarleyDavidson: Outlaw Freedom

Harley Davidson claims it provides whitecollar professionals an escape from

their routine work life.

The concept is based on the brandsmyth of outlaw freedom, for

members of their biker club HOG.


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Brand Communities?

Consumers form communities that cometogether tocelebrate brands or on occasionsprotest against them:

Apple devotees line up in advance to be thefirst ones to enter a newApple store.

Anti-brand communities also exist. They are

powerful enough to shake BIG brands:

Starbucks, Nike.WHY?

Financial exploitation of workforce.

Working conditions in suppliers factories.


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The role of Brand Communities

YET, Brands today are like SOCIALGLUEtheir consumption bringsabout social integration.

HOW?

Consumers choose brands to conformto a dominant group,they want to be

associated with.

Any examples.?


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How members benefit frombrand communities

1. Members achieve a collective sense ofbelonging to a group.

2. Members offer each other help & ideason how to purchase & use brand.

3. Brand communities develop special

rituals & traditions allowing members tocelebrate their brand in a public way.


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How/ why brands must work withcommunities

Brands participation in community activities

enhances connection with consumers.

Need to build strong positive relationships.

Both positive & negative information spreads

rapidly.

Organic brand communities (created by

consumers) are more powerful than those

created or managed by BMs.

Why?


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Valuing the Brand:Brand Equitysome initial thoughts!

Is Brand Equity (BE) a measure of thebrands value?

On a micro-level: BE is the differentialresponse of consumers to products e.g.what will they will pay more for a brand...

On a macro-level: BE is measured as theincremental profits that accrue fromthe sale of a branded product.


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Brand Equityenhances companyvalue!

EXAMPLES:

KKR,a global investment firm purchasedRJR Nabisco in 1989 (a leveraged buyout)

for $29 Billion, the BIGGEST EVER DEAL!! Bestfoodsbought for us$20Billion, 26 times

its book value, in 2000 by Unilever.

Ralston Purina sold for 24 times its bookvalue in 2001.

Why do brands sell for HIGHER THAN THEIREXPECTED VALUE?


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a division of Omnicom,among the world's largest brand

consultancies, specializing in brandservices

including brand strategy, brand

analytics, brand valuation, corporatedesign, digital brand management,packaging design and naming42

offices in 28 countries.


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How Interbrand calculates BrandEquity (BE)

A three-step process:

1. Estimating future cash flows.

2. Subtractingfrom it the tangible &intangible asset valuesof product;

3. Discounting cash flows forassociated risks to arrive at a netfigure.


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How Interbrand calculates BE

Risk calculation: Interbrandsseven

factors for calculating risk include: how favorableis the brands market,

its ability to shape the market,

how stableis the brand, &

its ability to crossgeographical &cultural borders.


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How TNS calculates BE

TNS (global research company)measures BE based on certainindicators/factors such as:

1. Brand recognition/ awareness,

2. Brand evocative power (images,

memories, & feelings it generates),3. Perceived quality,

4. Desire to buy


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How TNS calculates BE

EVOLUTION OF BRAND INDICATORS OVER 10 YEARS

BRANDAWARENE

SS

EVOCATION

SUPERIOR

QUALITY

DECLARED USE

DECLARED RE-USE*

2005 88 61 52 22 11

2002 89 66 58 27 15

1997 86 61 56 28 18Source: TNS Study based on 300 brands conducted in France

Clear erosion in quality perception ofbrands;

Declared use (expression of loyalty) weaker;

Declared re-use (commitment and convictiontowards brands) much lower.


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Branding as Competitive Advantage

Branding a key tool for creating/maintaining competitive advantagetoday, as product differentiation is

becoming increasingly harder to achieve.

In the 21st century, branding will

ultimately be the only uniquedifferentiator between companies.

FortuneMagazine


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Kellers Brand Resonance Pyramid:another way to assess brand value!

1. High awareness/ resonant brandssuggest better functionalperformance & imagery for consumer.

Resonance

Judgments Feelings

Performance Imagery

Salience

2. Consumers canrespond rationally& emotionally.

3. Loyalty is highwhen brands formstrongrelationships with

customers

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