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CHAPTER SEVENTEEN. Strategic Launch Planning 1 Branding March 13, 2007. The Value of a Strong Brand. “ Brand equity has just as much effect on stock price as do earnings. ” — David Aaker Professor of Marketing, Emeritus University of California, Berkeley. What is a Brand?.

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Chapter seventeen

CHAPTER SEVENTEEN

Strategic Launch Planning 1

Branding

March 13, 2007


The value of a strong brand

The Value of a Strong Brand

“Brand equity has just as much effect on stock price as do earnings.”

—David Aaker

Professor of Marketing, Emeritus

University of California, Berkeley


What is a brand

What is a Brand?

A brand is a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.”

Source: American Marketing Association

A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly outdated; a successful brand is timeless.

Source: Stephen King, WPP Group, London

A brand is something that resides in the minds of consumer.


What is a brand1

What is a Brand?

Symbol

Term

Identifies

product/service

of seller and

differentiates from

competitors

Design

Name

Combination

Sign

Keller, Kevin Lane. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. 1998.


Benefits of brands

Benefits of Brands

  • Consumers

    • Identification of the source of product

    • Assignment of responsibility to product maker

    • Risk reducer

    • Search cost reducer

    • Promise, bond, or pact with maker of product

    • Symbolic device

    • Signal of quality


Benefits of brands cont

Benefits of Brands (cont.)

  • Manufacturers

    • Means of identification to simplify handling or tracing

    • Means of legally protecting unique features

    • Signal of quality level to satisfied customers

    • Means of endowing products with unique associations

    • Source of competitive advantage

    • Source of financial returns


A brand is more than a product

A Brand is More Than a Product

Organizational associations

Brand

Symbols

Brand

Personality

Country of origin

Scope

Attributes

Uses

Quality/value

Functional benefits

Product

Brand/customer relationships

User Imagery

Self-expressive benefits

Emotional benefits


What is brand equity

What is Brand Equity?

What distinguishes a brand from its unbranded commodity counterpart and gives it equity is the sum total of consumers’ perceptions and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, and about the company associated with the brand.

Source: Alvin A. Achenbaum, “The Mismanagement of Brand Equity, 1993


Brand equity as a percent of firm tangible assets

Brand Equity as a Percent of Firm Tangible Assets

IndustryBrand Equity

Apparel61

Tobacco46

Food Products37

Chemicals 34

Electric machinery22

Transportation20

Primary metals01


Picking stocks

Picking Stocks

Suppose that you will be given 0.1 percent of the stock on one of the following companies. Which firm’s stock would you prefer, given the following information?

SalesAssetsProfits

General Motors$166B$229B$7B

Coca-Cola$19B$17B$4B


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What is Brand Equity?

Perceived

Brand Quality

Brand

Associations

• Personality

• Benefits

• Attitudes

  • Brand

  • Awareness

  • Brand Name

  • Symbols

  • Other

  • Proprietary

  • Brand Assets

  • Patents

  • Trademarks

  • Channel relationships

Brand Equity

Brand

Loyalty

  • Provides Value to Firm by Enhancing:

  • • Efficiency and Effectiveness of Marketing Programs

  • • Brand Loyalty

  • • Prices/margins

  • Brand extensions

  • • Trade Leverage

  • • Competitive Advantage

Provides Value to Customer

by Enhancing:

• Interpretation/processing of information

• Confidence in the Purchase Decision

• Use Satisfaction

Source: Aaker (1991) “Managing Brand Equity”


Dimensions of brand personality

Dimensions of Brand Personality


Brand personality

Brand personality

Describe the personality of the following:

  • Arizona Iced Tea

  • Intel

  • Blockbuster Video

  • Wal-Mart

  • Toyota

  • Dr. Pepper

  • Aquafina

  • Seiko

  • Texas Instruments

  • Nordstroms


Brand personality1

Brand personality

What personality characteristics come to mind for the following:

  • Brand is repositioned several times or changes its slogan repeatedly

  • Brand uses continuing character in its advertising

  • Brand charges a high price and uses exclusive distribution

  • Brand frequently available on deal

  • Brand offers many line extensions

  • Brand sponsors show on PBS or uses recycled materials

  • Brand features easy-to-use packaging or speaks at consumer’s level in advertising

  • Brand offers seasonal clearance sale

  • Brand offers five-year warranty or free customer hot line


Brand equity

Brand Equity

  • Sources of Brand Knowledge

    • Brand Awareness

    • Brand Image

      • Strength of Brand Associations

      • Favorability of Brand Associations

      • Uniqueness of Brand Associations


Why extend a brand

Why Extend a Brand?

  • Immediate brand awareness

  • Transfer existing associations

  • Faster trial

  • Reinforce core brand


Why not extend a brand

Why Not Extend a Brand?

  • “Boomerang” potential

  • Dilution

  • Bad “fit”


Questions and guidelines in brand name selection

Questions and Guidelines in Brand Name Selection

Figure 17.8


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Some Brand Names That Didn’t Work

Figure 17-9

Crapsy Fruit French cereal

Fduhy Sesane China Airlines snack food

Mukk Italian yogurt

Pschitt French lemonade

Atum Bom Portuguese tuna

Happy End German toilet paper

Pocari Sweat Japanese sport drink

Zit German lemonade

Creap Japanese coffee creamer

I'm Dripper Japanese instant coffee

Polio Czech laundry detergent

Sit & Smile Thai toilet paper

BarfIranian laundry detergent


Chapter seventeen 1230405

High

Brand

Loyalty

High

Brand

Awareness

High

Perceived

Quality

More/Better

Brand

Associations

Other Brand

Assets

Reduced

marketing

costs

Increased

trade

leverage

Easier to

make

brand

associations

Increased

liking and

familiarity

Supports

quality

positioning

Supports

higher-price

strategy

Creates

positive

image

Helps

customer

process

information

Patents or

trademarks

Strong

channel

relationships

Provides value to customer:

Assists in customer information processing

Increases confidence in purchase

Increases satisfaction in product use

Provides value to firm:

Increases effectiveness of marketing programs

Increases customer loyalty and trade leverage

Facilitates brand extensions

Is a source of competitive advantage

How Brand Equity Provides Value


Building brand equity

Building Brand Equity

  • Getting awareness of the brand and the meaning.

  • Making brand associations -- even the factory location in Saturn’s case.

  • Building perceived quality

  • Loyalty in repurchase -- locking them in

  • Getting reseller support


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