Concepts
Some marketers distinguish the
psychological aspect of a brand from
the experiential aspect. The
experiential aspect consists of the
sum of all points of contact with
the brand and is known as the
brand experience. The
psychological aspect, sometimes
referred to as the brand image,
is a symbolic construct created
within the minds of people and
consists of all the information and
expectations associated with a
product or service.
Marketers engaged in branding
seek to develop or align the
expectations behind the brand
experience, creating the impression
that a brand associated with a
product or service has certain
qualities or characteristics that
make it special or unique. A brand
image may be developed by
attributing a "personality" to or
associating an "image" with a
product or service, whereby the
personality or image is "branded"
into the consciousness of consumers.
A brand is therefore one of the most
valuable elements in an advertising
theme, as it demonstrates what the
brand owner is able to offer in the
marketplace. The art of creating and
maintaining a brand is called brand
management. This approach works not
only for consumer goods B2C
(Business-to-Consumer), but also for
B2B (Business-to-Business), see
Philip Kotler & Waldemar Pfoertsch.
A brand which is widely known in
the marketplace acquires brand
recognition. When brand
recognition builds up to a point
where a brand enjoys a critical mass
of positive sentiment in the
marketplace, it is said to have
achieved brand franchise. One
goal in brand recognition is the
identification of a brand without
the name of the company present. For
example, Disney has been successful
at branding with their particular
script font (originally created for
Walt Disney's "signature" logo),
which it used in the logo for go.com.
Brand equity or brand
value measures the total value of
the brand to the brand owner, and
reflects the extent of brand
franchise. The term brand name
is often used interchangeably with
"brand", although it is more
correctly used to specifically
denote written or spoken linguistic
elements of a brand. In this context
a "brand name" constitutes a type of
trademark, if the brand name
exclusively identifies the brand
owner as the commercial source of
products or services. A brand owner
may seek to protect proprietary
rights in relation to a brand name
through trademark registration.
The act of associating a product
or service with a brand has become
part of pop culture. Most products
have some kind of brand identity,
from common table salt to designer
clothes. In non-commercial contexts,
the marketing of entities which
supply ideas or promises rather than
product and services (e.g. political
parties or religious organizations)
may also be known as "branding".
Consumers may look on branding as
an important value added aspect of
products or services, as it often
serves to denote a certain
attractive quality or
characteristic. From the perspective
of brand owners, branded products or
services also command higher prices.
Where two products resemble each
other, but one of the products has
no associated branding (such as a
generic, store-branded product),
people may often select the more
expensive branded product on the
basis of the quality of the brand or
the reputation of the brand owner.
Advertising spokespersons have
also become part of some brands, for
example: Mr. Whipple of Charmin
toilet tissue and Tony the Tiger of
Kellogg’s.
Brand identity - How you
want the consumer to perceive your
product or your brand.
Brand promise - What the
company says it will do for the
customer. What customers perceive
they can expect from the company.
Brand
value
A brand can be an intangible
asset, used by analysts to
rationalize the difference between a
company's "book value" and market
value. For example, the market value
of a company can far exceed its
tangible assets (physical assets
owned by the company, such as stock
or machinery), and its brand value
can account for some of the
difference. Up to 85 percent of a
company’s market value might be
intangible (e.g know-how, existing
client relationships), and
Interbrand, a brand consultancy,
states that tangible assets may
account for less than five percent
of a company’s market value, for
example in the case of Coca-Cola or
Microsoft.
Brand value, especially in the
case of consumer product brands, may
arise out of customer loyalty. Brand
value may also arise in terms of
staff retention benefits (e.g. the
ability of the company to attract
and retain skilled and/or talented
employees offering competitive
salaries).
Brand value can be negatively
influenced. For example, in 1999
Nike's brand value was estimated at
8 billion US$. Facing media exposure
and consumer boycotts over supply
chain issues, Nike's brand value
declined in following two years to
7.6 billion US$, and rose back to
9.26 billion US$ in 2004 after Nike
addressed its supply chain issues.
Campaigning groups may
deliberately target a company’s
brand value to force a company into
adopting a certain position or
practices. Some campaign groups have
thought to do this by deliberately
subverting a brand’s image, logo or
message, creating a negative
association among consumers. This
attack may be visual, as pioneered
by groups such as the Adbusters, or
focusing on the message. For
example, BP’s “Beyond Petroleum”
branding is subverted by campaigners
into headline such as “BP: Beyond
Petroleum or Beyond Preposterous?”
or “BP must move beyond petroleum as
profits soar“.
Brand
monopoly
In economic terms the "brand" is,
in effect, a device to create a
"monopoly" — or at least some form
of "imperfect competition" — so that
the brand owner can obtain some of
the benefits which accrue to a
monopoly or unique point of sale,
particularly those related to
decreased price competition. In this
context, most "branding" is
established by promotional means.
However, there is also a legal
dimension, for it is essential that
the brand names and trademarks are
protected by all means available.
The monopoly may also be extended,
or even created, by patent,
copyright, trade secret (e.g. secret
recipe), and other sui generis
intellectual property regimes (e.g.:
Plant Varieties Act, Design Act).
In all these contexts, retailers'
"own label" brands can be just as
powerful. The "brand", whatever its
derivation, is a very important
investment for any organization. RHM
(Rank Hovis McDougall), for example,
have valued their international
brands at anything up to twenty
times their annual earnings.
Branding policies
There are a number of possible
policies:
Company name
Often, especially in the
industrial sector, it is just the
company's name which is promoted
(leading to one of the most powerful
statements of "branding"; the
saying, before the company's
downgrading, "No-one ever got fired
for buying IBM").
In this case a very strong brand
name (or company name) is made the
vehicle for a range of products (for
example, [[Mercedes-Benz}} or Black
& Decker) or even a range of
subsidiary brands (such as Cadbury
Dairy Milk, Cadbury Flake or Cadbury
Fingers in the United States).
Individual branding
-
Each brand has a separate name
(such as Seven-Up or Nivea Sun (Beiersdorf)),
which may even compete against other
brands from the same company (for
example, Persil, Omo, Surf and Lynx
are all owned by Unilever).
Attitude branding
Attitude branding is the
choice to represent a larger
feeling, which is not necessarily
connected with the product or
consumption of the product at all.
Marketing labeled as attitude
branding include that of Nike,
Starbucks, The Body Shop, Safeway,
and Apple Computer. In the 2000
book, No Logo, attitude branding is
described by Naomi Klein as a
"fetish strategy".
"A great brand raises the bar
-- it adds a greater sense of
purpose to the experience,
whether it's the challenge to do
your best in sports and fitness,
or the affirmation that the cup
of coffee you're drinking really
matters." - Howard Schultz
(president, ceo and chairman of
Starbucks]]
"No-brand" branding
Recently a number of companies
have successfully pursued "No-Brand"
strategies, examples include the
Japanese company Muji, which means
"No label, quality goods" in
English. Although there is a
distinct Muji brand, Muji products
are not branded. This no-brand
strategy means that little is spent
on advertisement or classical
marketing and Muji's success is
attributed to the word-of-mouth, a
simple shopping experience and the
anti-brand movement. Other brands
which are thought to follow a
no-brand strategy are American
Apparel, which like Muji, does not
brand its products.
Derived brands
In this case the supplier of a
key component, used by a number of
suppliers of the end-product, may
wish to guarantee its own position
by promoting that component as a
brand in its own right. The most
frequently quoted example is Intel,
which secures its position in the PC
market with the slogan "Intel
Inside".
Brand
development
In terms of existing products,
brands may be developed in a number
of ways:
Brand
extension
The existing strong brand name
can be used as a vehicle for new or
modified products; for example, many
fashion and designer companies
extended brands into fragrances,
shoes and accessories, home textile,
home decor, luggage, (sun-) glasses,
furniture, hotels, etc.
Mars extended its brand to ice
cream, Caterpillar to shoes and
watches, Michelin to a restaurant
guide, Adidas and Puma to personal
hygiene.
There is a difference between
brand extension and line extension.
When Coca-Cola launched "Diet Coke"
and "Cherry Coke" they stayed within
the originating product category:
non-alcoholic carbonated beverages.
Procter & Gamble (P&G) did likewise
extending its strong lines (such as
Fairy Soap) into neighboring
products (Fairy Liquid and Fairy
Automatic) within the same category,
dish washing detergents.
Multi-brands
Alternatively, in a market that
is fragmented amongst a number of
brands a supplier can choose
deliberately to launch totally new
brands in apparent competition with
its own existing strong brand (and
often with identical product
characteristics); simply to soak up
some of the share of the market
which will in any case go to minor
brands. The rationale is that having
3 out of 12 brands in such a market
will give a greater overall share
than having 1 out of 10 (even if
much of the share of these new
brands is taken from the existing
one). In its most extreme
manifestation, a supplier pioneering
a new market which it believes will
be particularly attractive may
choose immediately to launch a
second brand in competition with its
first, in order to pre-empt others
entering the market.
Individual brand names naturally
allow greater flexibility by
permitting a variety of different
products, of differing quality, to
be sold without confusing the
consumer's perception of what
business the company is in or
diluting higher quality products.
Once again, Procter & Gamble is a
leading exponent of this philosophy,
running as many as ten detergent
brands in the US market. This also
increases the total number of
"facings" it receives on supermarket
shelves. Sara Lee, on the other
hand, uses it to keep the very
different parts of the business
separate — from Sara Lee cakes
through Kiwi polishes to L'Eggs
pantyhose. In the hotel business,
Marriott uses the name Fairfield
Inns for its budget chain (and
Ramada uses Rodeway for its own
cheaper hotels).
Cannibalization is a particular
problem of a "multibrand" approach,
in which the new brand takes
business away from an established
one which the organization also
owns. This may be acceptable (indeed
to be expected) if there is a net
gain overall. Alternatively, it may
be the price the organization is
willing to pay for shifting its
position in the market; the new
product being one stage in this
process.
Small
business brands
Branding a small or medium sized
business (SME) follows essentially
the same principle a branding larger
corporation. The main differences
being that small businesses usually
have a smaller market and have less
reach than larger brands. Some
people argue that it is not possible
to brand a small business, however
there are many examples of small
businesses that became very
successful due to branding.
Starbucks initially used almost no
advertising and over a period of ten
years developed such a strong brand
that the company went from one shop
to hundreds.
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