mmexam2lecture2

8/6/2019 MMexam2Lecture2

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Marketing Management

Exam TwoLecture Two


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Presentation Themes

Brands

Brand Equity

Brand Elements

Devising A Brand Strategy

Brand Extensions


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Brands

The American Marketing Association defines a brand asa name, term, sign, symbol, or design, or acombination of them, intended to identify the goods orservices of one seller or group of sellers and todifferentiate them from those of competitors.

A brand is a product or service that addsdimensions that differentiate it in some way fromother products or services designed to satisfy thesame need.

These differences may be functional, rational, or

tangible-related to the product performance of thebrand.

They may also be more symbolic, emotional, orintangible-related to what the brand represents.


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The Role of Brands

Brands identify the source or maker of a product and allowconsumers to assign responsibility to a particular manufactureror 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 satisfiedbuyers can easily choose the product again.

Brand loyalty provides predictability and security of demandfor the firm and creates barriers to entry for other firms.

Branding can be seen as a powerful means to secure acompetitive advantage


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Marketing Advantages of Strong Brands

Improved perceptions of

product performance

Greater loyalty

Less vulnerable tocompetition

Less vulnerable to crises

Larger margins

Inelastic consumerresponse to price increases

Elastic consumer response

to price decreases

Greater trade cooperation

Increase in effectiveness ofIMC

Licensing opportunities

Brand extension

opportunities


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The Scope Of Branding

A brand is a perceptual entity that is rooted in reality but reflectsthe perceptions and perhaps even the idiosyncrasies ofconsumers.

Brandingis endowing products and services with the power ofa brand.

To brand a product, it is necessary to teach consumers whothe product is, what the product does, and whyconsumers should care.

For branding strategies to be successful and brand value to becreated, consumers must be convinced that there are

meaningful differences among brands in the product orservice category.

The key to branding is that consumer must not think that allbrands in the category are the same.

Brand differences often are related to attributes or benefits of

the product itself.


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Defining Brand Equity

Brand equity is the added value endowed to products andservices.

This value may be reflected in how consumers, think, feel, and

act with respect to the brand as well as the prices, marketshare, and profitability that the brand commands for the firm.

Brand equity is an important intangible asset to the firm thathas psychological and financial value.

Customer-based brand equity can be defined as the differential

effect that brand knowledge has on consumer response to themarketing of that brand.

A brand is said to have positive customer-based brand equitywhen consumers react more favorable to a product and theway it is marketed when the brand is identified as comparedto when it is not.


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BUILDING BRAND EQUITY

Marketers build brand equity by creatingthe right brand knowledge structures withthe 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 marketingprograms.

Other associations indirectly transferred to

the brand by linking it to some other entity.


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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.


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Brand Elements

Brand names

Slogans

Characters

URLs

Logos

Symbols


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Brand Element Choice Criteria

There are six criteria in choosing brandelements. The first three (memorable,meaningful, and likeable) can be characterizedas brand building in terms of how brandequity can be built through the judicious choiceof a brand element.

The latter three (transferable, adaptable, andprotectable) are more defensive and areconcerned with how the brand equity containedin a brand element can be leverage andpreserved in the face of different opportunitiesand constraints.


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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.


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Personalization

Get the consumer more actively involved

with a brand by creating an intense,

active relationship.Personalizing marketingis about making

sure that the brand and its marketing is

as relevant as possible to as manycustomers as possible.


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Integration

Marketers need a variety of different marketing activitiesthat reinforce the brand promise.

Integration is especially critical with marketingcommunications.

Each communication should be judged in terms of theeffectiveness and efficiency that it affects brandawareness, and whether it creates, maintains, orstrengthens brand image.

Brand awareness is the consumers ability to identify thebrand under different conditions, as reflected by theirbrand recognition or recall performance.

Brand image is the perceptions and beliefs held byconsumers, as reflected in the associations held inconsumer memory.


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Internalization

Marketers must adopt an internal perspective toconsider what steps to take to be sure employees andmarketing partners appreciate and understand howthey can helpor hurt brand equity.

Internal brandingis activities and processes that helpto inform and inspire employees.

Brand bondingoccurs when customers experiencethe company as delivering on its brand promise. Thebrand 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 withcompany personnel.


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Leveraging Secondary Associations

The brand may be linked to certain source factors:

The companythrough branding strategies.

Countries or other geographical regions

identification of product originChannels of distributionchannel strategy.

Other brandsingredient or co-branding.

Characterslicensing.

Spokespeopleendorsements.

Sporting or cultural eventssponsorships.

Other third party sourcesawards or reviews.


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Brand Reinforcement

As the companys major enduring asset, a brand needs tobe carefully managed so that is value does notdepreciate.

Brand equity is reinforced by marketing actions that

consistently convey the meaning of the brand toconsumers 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 brandassociations should exist in the minds of consumers?


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DEVISING A BRANDING STRATEGY

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 threemain 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.


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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 existingbrand, the brand extension can also be called a

sub-brand.

An existing brand that gives birth to a brand

extension is referred to as theparent brand. If the parent brand is already associated with

multiple products through brand extensions,

then it may also be called afamily brand.


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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 newmarket segment within a product category

currently served by the parent brand.

In a category extension, the parent brand isused to enter a different product category

from that currently served by the parent

brand.


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Brand Lines and Variants

A brand line consists of all productsoriginal aswell as line and category extensions sold under aparticular brand.

A brand mix(or brand assortment) is the set of all

brand lines that a particular seller makesavailable to buyers.

Many companies are now introducing brandedvariants that are specific brand lines supplied to

specific retailers or distribution channels. A licensed productis one whose brand name has

been licensed to other manufacturers who actuallymake the product.


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To Brand or Not to Brand?

The first branding strategy is whether to develop a brandname for a product. Today, branding is such a strong forcethat hardly anything goes unbranded.

A commodity is a product presumably so basic that it cannotbe physically differentiated in the minds of consumers.

Assuming a firm decides to brand its products or services, itmust then choose which brand names to use. Four generalstrategies are often used:

Individual names

Blanket family namesSeparate family names for all products

Corporate name combined with individual productnames


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Advantages of Brand Extensions

Recognizing that one of the most valuableassets is a firms brands, many have decided toleverage that asset by introducing a host of

new products under some of its strongestbrand names.

Brand extensions have two main advantages:

Facilitate new product acceptance.

Provide positive feedback to the parentbrand and company.


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New Product Success

Brand extensions improve the odds of new productsuccess in a number of ways:

Consumers can make inferences and formexpectations as to the likely composition and

performance of a new product based on what theyalready know about the parent brand itself.

Extensions reduce risk.

Extension can result in reduced costs of theintroductory launch campaign.

They can avoid the difficulty of coming up with a newname.

Extensions allow for packaging and labelingefficiencies.


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Disadvantage of Brand Extensions

Line extensions may cause the brand name to not be as stronglyidentified with any one product.

Brand dilution occurs when consumers no longer associate abrand with a specific product or highly similar products and

start thinking less of the brand. Different varieties of lineextensions may confuse and perhaps even frustrate consumers.

The worst possible scenario with an extension is that it harmsthe 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 consumersswitching to the extension from existing product offerings of theparent brand- called cannibalizingthe parent brand.

Intra-brand shifts in sales may not necessarily be soundesirable, as they can be thought of as a form ofpre-emptivecannibalization.

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