mba svu brand managemtn

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Brand Management Notes by Bilal Mustafa Khan

Brands:The important distinction is between a product and a brand. A product issomething with a functional purpose. A brand offers something in addition to its

functional purpose. All brands are products (including brand as Citibank and AirIndia that are technically services) in that they serve a functional purpose.But not all products are brands. In fact a brand and can be defined as !A brandis a product that provides functional benefits plus added values that someconsumer value enough to buy". Added values form the most important part ofthe definition of a brand.

#e$ve all heard the story of the blind men and the elephant. %ifferentmen e&amine different parts of an elephant. 'ne e&amines the trunk and

concludes that an elephant is like a vine. Another e&amines a leg andconcludes that an elephant is like a pillar. A third e&amines the tail andconcludes an elephant is like a rope. A fourth runs his hand across theelephant$s side and concludes an elephant is like a wall$. All of them are correct.

All of them miss the essential truth. An elephant is much more than the sum of itsanatomical parts. It is a living breathing being.

Consumer taste differs so widely that no brand can be all things to all

people. oreover any manufacturer who strives to cover too vide a filed willproduce a brand that is number two or number three over a wide range ofattributes rather than number one over a *imited range of attributes (whichmight enable it to become first choice to a *imited group of consumers thenormal route to success.

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has been a brand of sorts for many years it is only with the coming of enormoustelevision contracts that the financial value of the brand has been reali/ed. The

same can be said of do/ens of other athletic events. 0eographical brands (citiescountries resorts) have become common because businesses in particularareas have also recogni/ed the value of selling their locales using sometraditional and non,traditional brand building methods. Tourismdirectors from 'rlando to *as 1egas from Alabama to Bangkok have createdbrands to help sell their part of the planet.

The word brand when used as a noun can refer to a company name a

product name or a uni2ue identifier such as a logo or trademark.

In a time before fences were used in ranching to keep one$s cattle separate fromother people$s cattle ranch owners branded or marked their cattle so they couldlater identify their herd as their own.

The concept of branding also developed through the practices of craftsmen whowanted to place a mark or identifier on their work without detracting from the

beauty of the piece. These craftsmen used their initials a symbol or anotheruni2ue mark to identify their work.

3ot too long afterwards high 2uality cattle and art became identifiable in theconsumer$s mind by particular symbols and marks. Consumers would actuallyseek out certain marks because they had associated those marks in their mindswith tastier beef higher 2uality pottery or furniture sophisticated artwork andoverall better products. If the producer differentiated their product as superior inthe mind of the consumer then that producer$s mark or brand came to representsuperiority.

Today$s modern concept of branding grew out of the consumer packaged goods


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e&perience with the product 8 the personal memories and cultural associationsthat orbit around it.

The goal of branding is to convince the public that a brand is trustworthy and thusworth paying a premium for. The buyer is assured that the branded product willperform as e&pected. But that is not the only reason why people are willing to paya premium for some brands.Consider the differences that e&ist between a 9ole& watch and one made byTime&. Trust in their respective abilities to accurately keep track of time is notwhat ustifies that one can cost :;; to


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source8his state,of,the art factories8and therefore their 2uality. But the#edgwood name came to stand for something more. 3early two hundred years

before the advent of mass media and without using conventional advertising#edgwood used royal endorsements and other marketing devices to create anaura around the name of his company that gave the brand a value far beyond theattributes of the product itself. is business design of mass production anddistribution enabled him to capture the value created by his calculatedassociation of his product with a rich and famous lifestyle and his e&ploitation ofcustomers? social aspirations.

In many ways branding has stepped away from #edgwood?s precepts duringthe latter part of this century. #ith the development of new media particularlytelevision and the huge post, #orld #ar II boom in consumption and birthratesa mass market was born. 9ising demand and standards of living created an erawhere market share was king> The player with the leading share would have thelowest cost and the highest profitability.

Duite simply a brand is a promise to the customer 8 a mirror in which the

customer sees a reflection of him or herself and identifies with or reects thepromise he or she sees. *ikewise a brand is also a reflection of yourorgani/ation. Eour brand serves to define your organi/ation and influences everyaspect of your operation right down to corporate culture. #hether measured in4F= per second shopping margins or shareholder value the power of yourbrand has far,reaching impact. 'n stock valuation. 'n marketing costs. -ven onemployee retention rates.

7or customers branding plays two important roles>

In a world with lots of choices it tells them which choice is right. It serves as acustomer?s compass out of the chaos of competing choices Whats best for


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Added values form the most important part of the definition of a brand.Before we discuss added values two general points must be discussed briefly.

7irst the strongest brands are often the most distinctive. But in theirdistinctiveness they are also generally well balanced between motivating benefits+ those (generally functional) benefits that prompt the consumer to use anybrand in the product filled + and discriminating benefits , those prompting theconsumer to buy one brand rather them another. All brands are different fromeach other in the obvious sense that the names and packaging are different. Butdistinctiveness over and beyond this is highly desirable although distinctivenessbased so much on discriminators that it neglects motivators is a recipe for a weak

brand.4econd consumer taste differs so widely that no brand can be all things to

all people. oreover any manufacturer who strives to cover too vide a filed willproduce a brand that is number two or number three over a wide range ofattributes rather than number one over a *imited range of attributes (whichmight enable it to become first choice to a *imited group of consumers thenormal route to success).

ost brand have a known and restricted range functions and addedvalues are non,functional the manufactures benefits over and beyond these.

The maor sources of added values can be listed as>

1. Added Vales that come from "#perience of the Brand !$

These include familiarity known reliability and reduction of risks. A brandbecomes an old friend. This includes the important notion of brand personalitythe personality of the brand itself + its functional and non,functional features

as they might be described in 2uasi + human terms.2. Added Vale that come from the sort of people %ho se the brands!,

9ich and snobbish young or glamorous or masculine or feminine. There areenormous e&amples of brands which have these user association most of


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The pack as an advertising medium and the advertising itself should also beginto build those added values that are vital to protect the brands often rather fragile

franchise once competitors have moved towards functional parity with it. That isthe new brands need the edge of added values to maintain its position when asoften happens it loses within months the advantage of its initial functional lead.

If when enters the market the brand is to be bought more than once thedecision is essentially based on its functional properties.

-vidence points out that the functional superiority of a potentiallysuccessful brand also provides under pining and support for the other factorscontributing to success notably the effort of sales force. 4o if the first and most

important thing its functional performance is recogni/ed synergy will lend ahand to boost its effect. But when a brand is not going to succeed efforts of thesales force alone are not enough to compensate for it functional weaknesses.

Competitive functional performance is not something that is important tonew brands and unimportant to mature brands because the added values thatthese brands have ac2uired over the years cannot provide a permanent bulwarkagainst functionally superior newcomers.

The first 2uestion for the manufacturer of a new brand to ask is !fromwhich brands do we want to take business ! once this 2uestion has beenanswered the firm can direct 9H% efforts to the specific functional performancewith the new brand characteristics (i.e. the new brand that is being developedshould be superior functionallyor in terms of functional performance). 'nce thecompeting brands are know better and superior functional productbrand can bedeveloped.

45 +*S-)-*N-NG!

This is another maor variable which influence the eventual outcome (failure Hsuccess) of a brand. 6ositioning should be in tune with the brand obective andtarget market.


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The most obvious point is that the danger of cannibali/ation is likely to begreater where the products with the umbrella name are in competition with each

other (e.g. 9in bar H 9in 6owder) than when they are not (0illette Blades and0illette after shave).

The only maor advantage of using umbrella naming is within the samesegments ((e.g. segments using one product like %enim After 4have can easilytry %enim soap) that is people who use one product under a brand name canpresumably easily be persuaded to sample a second perhaps different categoryof product using that same brand name. =sually the advantage is in term ofreduced promotional and advertising costs and efforts.

In fact market research data indicates that basically the success of abrand in a new product category depends primarily on functional performance.The economic advantage of umbrella naming are substantially illusory in theshort and medium term. =mbrella names are in general no worse on better thannew names. As general rules the level of success of a new brand is much moredependent on support levels than on name. It is possible that umbrella namesprovide greater staying power by enabling greater addition to added valueswhich is essentially a long,term process.

In the long,term an umbrella naming is really a part of a manufacturerscorporate policy an act of faith and one of the basic elements on which hisbusiness is based and on which the firm might be included to attribute its long,term success in the marketplace.

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In perhaps two,third of all cases a new brand enters an e&isting market ata premium price. The firm ustifies this high price on the basis of innovation and

functional superiority of the brand over its competitors. In reality the premiumprices are charged to fund the high cost of achieving sampling. The costs areusually at a high level to compensate for the established position of e&istingb d ith th i t k f dd d l hi h h b i d th


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'n the other hand basing prices on derivation of production costs will tellthe manufacturer whether he will cover costs at a given level of output it will give

little about whether the company will in fact be able to sell that output.85 D-S)R-B,)-*N!

'ne key factor influencing the immediate success (failure) of a new brandis the ability of the manufacturers sales force to get it into distribution.

-&panded distribution is a result of success. If the brand goes well in theearly stages the public demands it retail branches hear from the head office.The word gets around and more retailers want to stock it.

But a functional performance is not important to the consumer alone.9etailers themselves and even more importantly the sales force are consciousof functional superiority and its contribution to a brands success. 7unctionalsuperiority will provide conviction to the salesman and draw commitment from theretailer.

Brand Associations , A brand association is anything mentally linked to thebrand. An association can affect recall provide a point of differentiation providea reason to buy create positive attitudes and feelings and serve as the basis fortrial.'verall 2uality ratings technological leadership newness and associations withcustomer benefits are the strongest. The combination of all associations supportsthe price which can be charged. The relative price position often is central.#hether the brand is in the lu&ury mid,price or budget being at or near the top

or bottom of the selected category is often most advantageous.

This safety pin print ad for 1olvo


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brand. Consumers use brand associations to help process organi/e andretrieve information in memory and to aid them in making purchase decisions.

Brand -ma/e4imply put brand image is how your customers potential customers suppliersand the general public sees you. It?s how you are positionedin their minds. *argeenterprises spend a great deal of time and money on making sure that theirbrand proects e&actly what they want about the company. #hen they?re

successful in branding themselves the payoff can be huge.Take the global brands8onda ac%onald?s 3ike Coke8they all have verystrong brand franchises 3ow pay attention here Their brand franchises don?t


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aving a good brand image is important to small businesses as well. Customerslook for the same things from large or small companies. They want to deal with a

reputable and trustworthy business. They want good value. They want 2uality.They$ll choose a company that proects that over one that doesn$t any time anywhere.

Brand 2o9alt9*oyalty is an important concept in strategic marketing. *oyalty provides fewerreasons for consumers to engage in e&tended information search amongalternatives. 9esearches also indicates that purchase decisions based on loyalty

may become simplified and even habitual in nature and this may be a result ofsatisfaction with the current brand(s). A base of loyal customers will beadvantageous for an organisation as it reduces the marketing cost of doingbusiness. In addition loyalty can be capitalised on through strategies such asbrand e&tension and market penetration. 7inally a large number of loyalcustomers is an asset for a brand and has been identified as maor determinantof brand e2uity .

9epeat 6atronage> igh

9elative ighAttitudes> *ow

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and improvement. The brand that loses sight of its loyal customers has lost itsdirection and is vulnerable to losing market share.

As a brand$s percentage of loyal customers goes up market share increases andthe brand becomes more profitable. 4hare rises because those customers whobecome repeat purchasers are no longer lost to the competition. In additionrepeat customers are more profitable than new customers , attracting newcustomers involves investing far more marketing and promotional funds. Tosome e&tent brand loyalty is being developed and managed by all successfulbrands. But in many cases loyalty itself is considered simply the result of well

e&ecuted marketing programs. The best way to achieve greater brand loyalty isby managing the brand loyalty process. This involves measuring the drivers ofbrand loyalty selecting high impact loyalty improvement proects and 2uicklycarrying them out.

Brand "#tensions

Traditionally the Indian market has seen e&tensions which are merely line

e&tensions by using the same brand name to launch new forms flavors variantsor colors of the e&isting product. 4antro and 4antro Jip %rive Close,=p 9ed and0reen Colgate 0el and Colgate toothpaste 4urf H 4urf =ltra are not brande&tensions in the true sense but merely line e&tensions. Barring a handful of reale&tensions like %enim soap H talcum powder %ettol antiseptic H floor cleaner

Anchor switches and toothpaste most of the marketing giants like ** 6H0 and9eckitt Coleman use multi,branding strategy.It is only recently that the Indian marketers have reali/ed the full potential of

brand e&tensions. And going by number of companies adopting the brande&tension concept it looks like the idea has taken root in the mind of brandstrategists as a viable growth strategy in the Indian market.


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can contribute a comple& yet well,defined image to an e&tension. A well,established brand usually has a well,defined brand image. A great benefit ofbrand e&tension is the instant communication of a salient image.

In addition to brand associations e&tension can convey 2ualityassociations. To avoid advertising battles based on product specifications onecan compete on the basis of perceived high 2uality. ewlett,6ackard has usedthis strategy by e&tending its name to numerous products and thereby hase&tended its umbrella of 2uality to them. #hen 2uality is perceived to be high it isvaluable to share the benefits of a core product with an e&tension. #ithoutperceived high 2uality however the task is impossible.

Another benefit of e&tension is the cross fertili/ation which advertising the corebrand can bring. That familiarity also provides consumers with another benefit inthe form of reduced risk with a new product. Consumers confronting %iet Cokefor the first time would know that it was a Coca,Cola product of assumed high2uality. In reported tests of new products most support the fact that anestablished brand name enhances initial consumer reaction interest and trial.Enhancing the core product

The final benefit of e&tension is enhancing the core product. *ike a

successful offspring an e&tension may reinforce the core product$s brand imageinstead of weakening it. %iet Coke is clearly positioned as a tasty low,caloriesoda and reinforces Coke$s association with cola and good taste.Brand "#tension Strate/ies!

Fit and Similarity

4everal authors have suggested that an effective brand e&tension must be

perceived as a fit with the original. 7it has been defined as the e&tent to which aconsumer accepts the new product as a logical and e&pected e&tension of thebrand. A poor fit between the original brand and the e&tension may diminish theappeal of the new product 6ositive attributes may not transfer from the brand to


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3either complementarity nor substitutability had significant main effects in ratingthe brand e&tensions. 9ather the complementarity and substitutability measuresinteracted with the perceived 2uality of the original brand to predict brande&tension evaluation. Transferability (i.e. perceived e&pertise of themanufacturer to make the e&tension product) had a direct impact on theevaluation of brand e&tensions. 7or e&ample c%onald$s photo processingcaused some subects to comment that c%onald$s should remain in the foodbusiness and had no credibility as a photo,processor.

6ositive ratings of a brand seem to transfer to brand e&tensions. 7urther

there seems to be greater transfer of affect from the brand to the brand e&tensionwhen the brand e&tension was very similar to the original brand product.Correlations between attitude toward the original brand and attitude towarde&tensions decreased as the degree of similarity decreased. The process ofaffect generali/ation from the brand to the brand e&tension may not take placewhen the e&tension is insufficiently similar to the original brand.

4uccessful brand e&tension depends on consumer perceptions of how it fits

both in terms of similarity and consistency with the brand concept. Take two wellknown brand names Time& and 9ole&. Both brands are in the watch categorybut convey very different meanings to consumers. 9ole& is associated with theconcept of lu&ury and prestige while Time& $is associated with productperformance. Both product feature similarity and brand concept consistency werefound to be important predictors of favorable reactions to brand e&tensions.7urther the authors suggest that concept consistency may have a greater effecton the prestige brand than on the functional brand.

"#tensions Shold Spport Brand +ositionin/

-&tensions are even more powerful when linked back to the customer


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brand whose strengths are recogni/ed beyond its current targetmarket and current definition of the positioning. This can be riskybut done right it allows a company to diversify its range of brandedproducts and take a true portfolio approach to managing its brand.

Creating a category

This may be one of the ways in which brand e&tension can be successful.A brand that is moved into an e&isting product or service category may end up asa me,too unless it is able to achieve significant differentiation from the

competitors. The new variant must be able to promise something different suchas simplicity or sustained added value compared with e&isting brands in thesector. 3okia?s development of a fashion element within the mobile phone sectormoves the brand into a potentially lucrative area.

Extending to revitalize

Brand e&tensions can be one way in which the brand is kept modern and

alive. 3escafP is an e&ample of a strong parent brand that has used brande&tension to develop a series of variants that are able to target different coffeedrinking occasions consumer types and price sectors. In turn these are able tostrengthen the 3escafP parent brand. The addition of a service or e&perientialelement such as CafP 3escafP can also strengthen the brand by moving itbeyond mere imagery to the provision of genuine consumer engagement.3escafP can thus be e2ually an established and modern up,to,date brand."#tensions Shold Spport Brand +ositionin/

-&tensions are even more powerful when linked back to the customerrelationship and how it has been used as a basis for brand positioning. Thismeans ensuring that the e&tension builds off one or more of the following


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but done right it allows a company to diversify its range of brandedproducts and take a true portfolio approach to managing its brand.

Creating a category

This may be one of the ways in which brand e&tension can be successful.A brand that is moved into an e&isting product or service category may end up asa me,too unless it is able to achieve significant differentiation from thecompetitors. The new variant must be able to promise something different suchas simplicity or sustained added value compared with e&isting brands in the

sector. 3okia?s development of a fashion element within the mobile phone sectormoves the brand into a potentially lucrative area.

Brand ":it9 and Brand Valation

Brand e2uity has received considerable attention in the marketing literature inrecent years. uch of this attention has focused on developing alternativetheoretical definitions of brand e2uityG as a result some confusion surrounds the

implications of brand e2uity issues in marketing research applications. Theauthors discuss the role of brand names in consumer purchase decision,makingprocesses and provide a framework within which brand e2uity issues can bee&amined by marketing researchers.

In :KQQ *ance *euthesser concluded that there was no precise definition ofbrand e2uity nor even common agreement on what it is. ore recently howeverseveral definitions of brand e2uity have been published including>

Broadly stated brand e2uity refers to the residual assets resulting fromthe effects of past marketing activities associated with a brand.(9 t l :KK;)


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significant value when it is well recogni/ed and has positive associations in themind of the consumer. This concept is referred to as brand e:it9.

What is Brand ":it9?

Brand e2uity is an intangible asset that depends on associations made by theconsumer. There are at least three perspectives from which to view brand e2uity>

'inancial, 'ne way to measure brand e2uity is to determine the pricepremium that a brand commands over a generic product. 7or e&ample if

consumers are willing to pay R:;; more for a branded television over thesame unbranded television this premium provides important informationabout the value of the brand. owever e&penses such as promotionalcosts must be taken into account when using this method to measurebrand e2uity.

Brand e#tensions , A successful brand can be used as a platform tolaunch related products. The benefits of brand e&tensions are theleveraging of e&isting brand awareness thus reducing advertising

e&penditures and a lower risk from the perspective of the consumer.7urthermore appropriate brand e&tensions can enhance the core brand.owever the value of brand e&tensions is more difficult to 2uantify thanare direct financial measures of brand e2uity.

(onsmer$based , A strong brand increases the consumer$s attitudestrength toward the product associated with the brand. Attitude strength isbuilt by e&perience with a product. This importance of actual e&perienceby the customer implies that trial samples are more effective than

advertising in the early stages of building a strong brand. The consumer$sawareness and associations lead to perceived 2uality inferred attributesand eventually brand loyalty.


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decision,making. The second perspective is financially based and views brande2uity in terms of incremental discounted future cash flows that would result froma branded product revenue in comparison with the revenue that would occur ifthe same product did not have the brand name (4imon H 4ullivan :KKN).

3AR;")-NG +"RS+"()-V"

Aaker (:KK:) has provided the most comprehensive definition of brande2uity to date> !A set of brand assets and liabilities linked to a brand its nameand symbol that adds to or detracts from the value provided by a product or

service to a firm andor to the firm$s customers."

Aaker has also synthesi/ed some contemporary thinking about marketingand depicted a comprehensive yet parsimonious set of factors that contribute tothe development of brand e2uity (Aaker :KKb). e has contemplated that to agreater e&tent the e2uity of a brand depends on the number of people whopurchase it regularly. ence the concept of brand loyalty is established as a vitalcomponent of brand e2uity. 4trong effects of brand recognition on choice and

market share are discussed and documented e&tensively in marketing literature.That is why Aaker regards the concept of brand awareness as a secondcomponent of brand e2uity. Considering the 6I4 findings (Bu//ell and 0ate:KQ) perceived 2uality is included as another significant component. 'therproprietary brand assets , such as patents trademarks and established channelrelationships , constitute the final component.

2o9alt9

Price Premium


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of this approach is its reference to a competitor or set of competitors. It isnecessary to arrive at several sets of price premiums when there are a number ofbrands in the market. -ven then an emerging competitor might be missed.

Customer Satisfaction( 4atisfaction or preference for a brand shows how loyalthe consumer is likely to be to a brand. A direct measure of customer satisfactioncan be applied to e&isting customers. The focus can be the last use e&perienceor simply the use e&perience from the customer$s view.

Consumers are asked about their e&perience with the brand and whetherthe brand met their e&pectations. 6reference is measured by asking them

whether they assessed whether the usage of the brand caused someinconvenience. There can be direct 2uestions about loyalty to the brand e.g. areyou loyal to this brand5 4atisfaction model is very useful in service industry likeairlines and banks. 'ne drawback of this model is that it can be applied only tothe users and customers.

+ercei&ed


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-rganiational Associations(This dimension considers the type of organi/ationthat lies behind the brand.

A%areness 3easres

rand aarenessreflects the salience of the product in the consumer$s mind andinvolves various levels including recognition recall brand dominance brandknowledge and brand opinion.

Alternati&e 3eans to Brand ":it9

Building brand e2uity re2uires a significant effort and some companies usealternative means of achieving the benefits of a strong brand. 7or e&amplebrand e2uity can be borrowed by e&tending the brand name to a line of productsin the same product category or even to other categories. In some casesespecially when there is a perceptual connection between the products suche&tensions are successful. In other cases the e&tensions are unsuccessful andcan dilute the original brand e2uity.

Brand e2uity also can be bought by licensing the use of a strong brand for anew product. As in line e&tensions by the same company the success of brandlicensing is not guaranteed and must be analy/ed carefully for appropriateness.

Brand "#perience

Brand e&perience is the process of taking the values of a brand and e&trapolating

them to create an environment where the consumer becomes immersedsurrounded by colours shapes sounds and sensations which embody what thebrand is all about.


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Brand -&perience is a wide concept that runs close to event marketing at oneend and relationship marketing at the other e&treme. It looks beyond the brand toidentify and develop values that have a greater degree of relevance for theconsumer. In doing this it moves much close to the consumer in terms ofimmersion engagement or individual relationships.


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This is where brands can start to develop a competitive edge. Brand e&perience enables marketers to provide genuine andsustainable differentiation which in turn provides a strong defence against me,toos and other competitive threats. eanwhile it

enables products and services to be transferred into unrelated categories.

Important B

Bilal Mustafa Khan

2008. Department of Business Administration. Only for internal distribution and lass disussion. !he material maynot be reprodued in any form "ithout prior permission either in parts or "hole.


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Bilal Mustafa Khan

2008. Department of Business Administration. Only for internal distribution and lass disussion. !he material maynot be reprodued in any form "ithout prior permission either in parts or "hole.

mba svu brand managemtn

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