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?
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 A product can be quickly outdated; a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 Brand?

l
bo
Te

m
r m

Sy
Identifies
product/service
Name of seller and Design
differentiates from
competitors

Co
m
bi
na
tio
gn

n
Si

Keller, Kevin Lane. Strategic Brand Management:

Building, Measuring, and Managing Brand Equity. 1998.
 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.)
 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
Organizational
associations
Brand Symbols

Country of Scope Brand

origin Personality
Attributes
Uses
Product Brand/customer
Quality/value
relationships
Functional
User benefits Self-
Imagery
expressive
benefits
Emotional
benefits
 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
Industry Brand Equity
Apparel 61
Tobacco 46
Food Products 37
Chemicals 34
Electric machinery 22
Transportation 20
Primary metals 01
 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?

Sales Assets Profits

General Motors $166B $229B $7B
Coca-Cola $19B $17B $4B
What is Brand Equity?
Perceived
Brand
Brand Quality
Associations
Brand • Personality
• Benefits
Awareness • Attitudes
• Brand Name
• Symbols

Other
Brand Brand Equity Proprietary
Loyalty Brand Assets
•Patents
•Trademarks
•Channel relationships

Provides Value to Customer Provides Value to Firm by Enhancing:

by Enhancing: • Efficiency and Effectiveness of Marketing Programs
• Interpretation/processing of information • Brand Loyalty
• Confidence in the Purchase Decision • Prices/margins
• Use Satisfaction • Brand extensions
• Trade Leverage
• Competitive Advantage
Source: Aaker (1991) “Managing Brand Equity”
Dimensions of 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 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
 Sources of Brand Knowledge
 Brand Awareness
 Brand Image
 Strength of Brand Associations
 Favorability of Brand Associations
 Uniqueness of Brand Associations
Why Extend a Brand?
 Immediate brand awareness
 Transfer existing associations
 Faster trial
 Reinforce core brand
Why Not Extend a Brand?
 “Boomerang” potential
 Dilution
 Bad “fit”
 Questions and Guidelines in
Brand Name Selection
Question
What is the brand's role or purpose?
Will this product be a bridgehead to a line of
products?
Do you expect a long-term position in the market?
Is the name irritating or insulting to any market
segment?
Figure 17.8
Guideline
If the brand is to aid in positioning, choose a brand
name with meaning (DieHard, Holiday Inn). If
purely for identification, a neologism (made-up
word) such as Kodak or Exxon will work.
If so, choose carefully so as not to be a limitation in
the future (Western Hotels changed name to
Western International, then finally to Westin.)
If not, a dramatic, novelty name might be useful
(such as Screaming Yellow Zonkers).
Women found Bic's Fannyhose to be objectionable.
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
Barf Iranian laundry detergent
 How Brand Equity Provides Value

High High High More/Better

Other Brand
Brand Brand Perceived Brand
Assets
Loyalty Awareness Quality Associations

Reduced Easier to Supports Creates Patents or

marketing make quality positive trademarks
costs brand positioning image
associations
Increased Supports Helps Strong
trade Increased higher-price customer channel
leverage liking and strategy process relationships
familiarity information

Provides value to customer: Provides value to firm:

Assists in customer information processing Increases effectiveness of marketing programs
Increases confidence in purchase Increases customer loyalty and trade leverage
Increases satisfaction in product use Facilitates brand extensions
Is a source of competitive advantage
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