Branding

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BrandingBranding

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What is Brand Equity?What is Brand Equity?

““Brand equity is a set of assets (and Brand equity is a set of assets (and liabilities) linked to a brand’s name that liabilities) linked to a brand’s name that adds to (or subtracts from ) the value adds to (or subtracts from ) the value provided by a product or service to a provided by a product or service to a firm and/or that firms customers.”firm and/or that firms customers.”

– Aaker, Aaker, Building Strong BrandsBuilding Strong Brands

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Asset Categories for Brand Asset Categories for Brand EquityEquity

Brand name awarenessBrand name awareness Brand loyaltyBrand loyalty Perceived qualityPerceived quality Brand associationsBrand associations

– strong, favorable, uniquestrong, favorable, unique

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Brand Name AwarenessBrand Name Awareness

Familiarity leads to likingFamiliarity leads to liking– Colas, peanut butterColas, peanut butter

Dominant presence Dominant presence “everybody is buying “everybody is buying so must be good”so must be good”– Nutrasweet, IntelNutrasweet, Intel

Recall at time of purchaseRecall at time of purchase– Kleenex, Clorox, Band-Aid, CrayolaKleenex, Clorox, Band-Aid, Crayola

DurableDurable– DatsunDatsun

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Brand LoyaltyBrand Loyalty

Results in Lower Marketing CostResults in Lower Marketing Cost– Lexus Lexus does not expend so much bc of does not expend so much bc of

loyaltyloyalty Entry BarrierEntry Barrier

– Dell, Intel, TideDell, Intel, Tide Trade LeverageTrade Leverage

– Cheerios, Kraft CheeseCheerios, Kraft Cheese

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Perceived QualityPerceived Quality

Higher quality leads to Higher price, Higher quality leads to Higher price, higher ROIhigher ROI

Signal qualitySignal quality– Tomato Juice – thicknessTomato Juice – thickness– Lemon scent – strong cleanerLemon scent – strong cleaner– Fit and finish – inference of quality on Fit and finish – inference of quality on

unobserved attributesunobserved attributes Lexus, tolerances Lexus, tolerances are good, so overall quality should be goodare good, so overall quality should be good

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Brand AssociationsBrand Associations– Attribute associations Attribute associations

» Crest, VolvoCrest, Volvo=safety=safety, BMW, BMW=performance=performance, ,

– Emotional BenefitEmotional Benefit» Hallmark =Warmth; Nike = Energetic; Evian= Hallmark =Warmth; Nike = Energetic; Evian=

HealthyHealthy

– Self ExpressiveSelf Expressive» Gap=Hip; Mercedes= Successful; WalMart Gap=Hip; Mercedes= Successful; WalMart

=Unpretentious, but smart=Unpretentious, but smart

– NesCafe problem: positive blind taste, but NesCafe problem: positive blind taste, but no sales, perception of bad taste no sales, perception of bad taste personality research: assoc. w/ lazy buyerspersonality research: assoc. w/ lazy buyers

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Brand Associations (Continued)Brand Associations (Continued)

– Easy Recall and Key AssociationEasy Recall and Key Association» Logos/SymbolsLogos/Symbols

Distinct writing - Coke, Dunhill, Kit-KatDistinct writing - Coke, Dunhill, Kit-Kat Abstract Logos - Nike’s Swoosh, Mercedes StarAbstract Logos - Nike’s Swoosh, Mercedes Star

» Characters Characters Joe Isuzu, Energizer Bunny, Marlboro Cowboy, Maytag Joe Isuzu, Energizer Bunny, Marlboro Cowboy, Maytag

RepairmanRepairman» SlogansSlogans

My Doctor Said MylantaMy Doctor Said Mylanta Nothing Runs Like A DeereNothing Runs Like A Deere A Diamond is ForeverA Diamond is Forever

» JinglesJingles Be All That You Can BeBe All That You Can Be Intel InsideIntel Inside

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Brand Essence or MantraBrand Essence or Mantra

Heart and Soul of the BrandHeart and Soul of the Brand Internal BrandingInternal Branding

– Nike: “Authentic Athletic Performance”Nike: “Authentic Athletic Performance”– Disney: “Fun Family Entertainment”Disney: “Fun Family Entertainment”

two to three wordstwo to three words

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Branding Issues Legal (Keller, 2002)Branding Issues Legal (Keller, 2002)

Trademark:Trademark:– Generics and no longer validGenerics and no longer valid

» Vaseline, Cellophane, Escalator, Thermos, Vaseline, Cellophane, Escalator, Thermos, AspirinAspirin

– Struggling to retain trademarkStruggling to retain trademark» Band Aids, Kleenex, Scotch Tape, Q-Tips, Band Aids, Kleenex, Scotch Tape, Q-Tips,

XeroxXerox

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Trademark Hierarchy (Keller, 2002)Trademark Hierarchy (Keller, 2002)

1.1. Fanciful (Kodak, Yahoo!, Lycos)Fanciful (Kodak, Yahoo!, Lycos)

2.2. Arbitrary (Camel)Arbitrary (Camel)

3.3. Suggestive (Eveready)Suggestive (Eveready)

4.4. Descriptive (Ivory)Descriptive (Ivory)

5.5. Generic (Aspirin)Generic (Aspirin) 5 is more difficult to protect5 is more difficult to protect Trademark – Trademark – AdjectiveAdjective not a noun, verb not a noun, verb

or pluralor plural

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RebrandingRebranding

Acura – Legend, Vigor, Integra Acura – Legend, Vigor, Integra bc were bc were not viewed as premium, acura got lostnot viewed as premium, acura got lost

Sub-brands were less ‘luxurious’Sub-brands were less ‘luxurious’ Switch to TL, RL, NSX, but less Switch to TL, RL, NSX, but less

protectiveprotective Drive Acura not a LegendDrive Acura not a Legend Consistent with Category Leaders: Consistent with Category Leaders:

Mercedes “5-series”=umbrella brand, Mercedes “5-series”=umbrella brand, BMWBMW

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Tylenol ResponseTylenol ResponseExterior factors can damage your brandExterior factors can damage your brand

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Brand Extensions - AdvantagesBrand Extensions - Advantages

Facilitate new product acceptanceFacilitate new product acceptance– reduce perceived risk by customerreduce perceived risk by customer– increase chances of gaining distributionincrease chances of gaining distribution– lower marketing costlower marketing cost

Enhance parent brandEnhance parent brand– improve / revitalize imageimprove / revitalize image– new customers, increased coveragenew customers, increased coverage

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Successful Brand ExtensionsSuccessful Brand Extensions

Vaseline Intensive Care lotionVaseline Intensive Care lotion Jello Pudding PopsJello Pudding Pops Bic lightersBic lighters Aunt Jemima syrupAunt Jemima syrup Colgate toothbrushColgate toothbrush

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Unsuccessful Brand ExtensionsUnsuccessful Brand Extensions

Country time Apple CiderCountry time Apple Cider Kleenex diapersKleenex diapers Clorox detergentClorox detergent Bic PerfumeBic Perfume

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Brand Valuation: Interbarand Brand Valuation: Interbarand 20012001

#1. Coke: $68.9 bn#1. Coke: $68.9 bn

#2. Microsoft: $65.1bn#2. Microsoft: $65.1bn

#3. IBM: $52.7bn#3. IBM: $52.7bn

#4. GE: $42.4bn#4. GE: $42.4bn

#5. Nokia: $40.2bn#5. Nokia: $40.2bn

#6. Intel: $34.7bn#6. Intel: $34.7bn