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what is a brand

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  • New offering
    Nimble competitors
    Demanding customers
    Pressure on price & margin
    Pressure on sales & market share
    A brand provides security for customers: they get what they expect
  • Nestle pay 5x the value because they paid for the expected future sales.
  • Perceived quality, good or bad, its about the customer’s expectations.
    Future sales come mostly from loyalty – expecting customers to keep buying your product
    The brand is owned by the customers through the way they perceive it.
  • The easiest one is to create recognition. It’s about being present when the need arises (being in the right place)
    The costly and important one is creating re-call.
    Re-call implies associating products with the brand.
  • What customers add to the product
  • Everything you do, starting with employee behaviour, helps with building the brand
  • Everybody plays a role in the brand: product developers, sales men, logistics, marketeers, production line, quality assurance, receptionist etc.
    Everybody in the company has his/her own responsibility
    …no chain stronger than the weakest part ...
  • Bases its brand identity and strategy on its product attributes: high quality, durability, reliability, and a premium price. In reality, however, the brand also delivers the feeling of buying and using the best
  • Transcript

    • 1. Lecture 1 – WHAT IS A BRAND?
    • 2. A history of branding Cattle branding Greek Civilization Pottery Roman Civilization Products Flags & Standards Medieval Sales Porcelain Appearance of to-be global brands 17th Century Product marketing Industrial Revolution WWW Media proliferation Transportation 20th Century Corporate branding
    • 3. What is brand equity? • A set of assets (and liabilities) linked to a brand’s name and symbol – The value that a brand adds to a product or service – Much like the concept of goodwill • Future expectations; money Aaker chap. 1
    • 4. Value of a Brand Rowntree (KitKat, After Eight & Polo Mint) • Nestlé paid 45 bill.; 5x asset value Kraft General Foods • Philip Morris paid 129 bill; 4x asset value
    • 5. Strong Brands - Something striking??
    • 6. Asset factors - building a brand strong 1. Commitment to quality – perceived (delivered) quality = fastest route to consumer satisfaction 2. Awareness – promotions, ads, logo (increase customer familiarity) 3. Fostering loyalty – even in troubled times 4. Strong and clear brand identity build upon associations Aaker chap. 1
    • 7. 1. Perceived quality • The only brand association which can drive financial performance – Influences total perception of the brand • Price ↔ Quality position – Quality is a key strategic factor for most companies (TQM) • Often found in mission statements • But then what is quality?? Aaker chap. 1
    • 8. 2. Brand awareness • The strength of the brand’s presence in the consumer’s mind • Measured according to ways in which consumers remember the brand – recognition – re-call – recognition v recall? – the ultimate awareness level = brand name dominance Aaker chap. 1
    • 9. 3. Brand loyalty • Brand value is largely created by customer loyalty – A brand without loyalty is vulnerable • Loyalty has great impact on marketing costs Aaker chap. 1
    • 10. 4. Brand associations • Brand equity strongly supported by associations made by consumers – Associations might include product attributes, celebrity spokesperson or particular symbol • Brand associations driven by brand identity THUS, a key to building strong brands is to develop and implement a brand identity Aaker chap. 1
    • 11. Building strong brands is doable! Key is to: • develop brand identity – know what the brand stands for • express the identity – effectively and consistently • manage internal forces Aaker chap. 1
    • 12. Brand Identity Brand identity is the driver of one of the four principal dimensions of brand equity • Brand associations. Brand identity: • A unique set of brand associations that the brand strategist aspires to create or maintain. – what the brand stands for and imply a promise to customers from the organisation members. Aaker chap. 3
    • 13. Brand Identity Traps Limits the identity leading to ineffective and often dysfunctional brand strategies. 1. The brand image trap Customer > Company 2. Brand Positioning Trap Part of Identity but not instead of 3. External perspective Trap Identity < Why customers buy 4. Product-Attribute Fixation Trap Most common trap Limitations: » Fail to differentiate » Are easy to copy » Assume a rational customer » Limit brand extension strategies » Reduce strategic flexibility - Relevance + Aaker chap. 3
    • 14. Brand image trap • Brand image trap: lack of efforts to go beyond the brand image • Brand image becomes brand identity • Solution: provide useful and necessary background information when developing brand identity to improve the customer perception 14
    • 15. Brand image vs Brand identity Brand image Brand identity Is passive and looks to the past Should be active and look to the future, reflecting associations aspired for brand Tends to be tactical Should be strategic, should reflect the business strategy to lead to sustainable advantage Might not be silent Should reflect brand brand’s enduring qualities 15
    • 16. Brand position trap • Part of brand identity and value proposition that is to be communicated and demonstrates an advantage over competitive brands • The trap occurs when the search for a brand identity becomes a search for a brand position 16
    • 17. The external perspective trap • The company fails to realize the role that brand identity plays in helping the organization understanding its basic value and purpose Eg: it is hard to expect the employees to make a vision happen if they do not understand and buy into the same vision of the company 17
    • 18. Product-attribute fixation trap • Trap- the strategic and tactic management of the brand is focusing only on the product attributes Wrong • attributes are not the only relevant basis for customer decision and competitive dynamics A brand is more than a product • Product attributes as the basis for brand identity have important limitations: Fail to differentiate Easy to copy Assume a rational consumer Reduce the strategic flexibility 18
    • 19. Avoiding the traps • To help ensure that the brand has texture and depth (and are not caught in the identity traps), the firm should consider its brand as: – – – – a product an organisation a person a symbol ALL BRANDS ARE A PRODUCT BUT NOT ALL PRODUCTS ARE A BRAND! Aaker chap. 3
    • 20. The brand as a product - Product related associations Product related associations will almost always be an important part of brand identity • Linked to brand choice decisions and use experience The brand-as-product • • • • • • Product scope Product attributes Quality/value Uses Users Country of origin Aaker chap. 3
    • 21. The Brand as organisation This perspective focuses on attributes of the organisation rather than those of the product or service. • Organisational attributes are more enduring and more resistant to competitive claims than product attributes. Organisational attributes can contribute to a value proposition. The brand-as-organisation • Organisational attributes • Local versus global Aaker chap. 3
    • 22. The brand as person • This perspective suggests a richer and more interesting brand identity than one based on product attributes. • It can help create a self-expressive benefit. • Brand personality can be the basis of a relationship between the customer and the brand The brand-as-person • Brand personality • Brand-customer relationships Aaker chap. 3
    • 23. The brand as symbol A strong symbol can provide cohesion and structure to an identity and make it much easier to gain recognition and recall. A strong symbol can be the cornerstone of a brand strategy. Sometimes it can also represent the essence of the brand. The brand-as-symbol • Visual imagery/metaphors • Brand heritage Aaker chap. 3
    • 24. The identity structure Consists of core identity and extended identity Core identity - The central, timeless essence of the brand • Contains the associations that are most likely to remain constant as the brand travels to new markets and products. • • Mc Donald’s: value offering, quality, service, cleanliness, user Nike: product trust, user, performance, enhancing lives Aaker chap. 3
    • 25. The identity structure Extended identity • Includes brand identity elements, organised into cohesive and meaningful groupings that provide texture and completeness (the mental network, figure 3.9). – E.g. brand personality is often part of the extended identity. – Mc’ Donalds sub brands(Mc Cofee), logo , characters , convenience – Nike personality, logo, sub brands, slogans(?) endorsers Aaker chap. 3
    • 26. Working with multiple brand identities • In some cases a brand identity is so persuasive and universal that it will work in all markets (Coca Cola) – In most cases a brand identity will need to be adapted to different market or product contexts • When multiple identities are needed, the goal is to have a common set of associations, some of which will be the core identity. Different elements can be emphasised in each market. Aaker chap. 3
    • 27. Formulating a value proposition There are 3 elements to consider in the statement: • Functional benefits Product attributes • Emotional benefits Gives the customer a positive feeling ? • Self-expressive benefits communicate his or her Gives the customer a way to own self-image The role of price is ALWAYS important.
    • 28. Providing a value proposition The brand identity needs to provide a value proposition to the customer. • Leading to a brand-customer relationship and drive purchase decisions. Luxury Food Auto Services Brand Intangibles Financial Tangibles IT Pharma Cemicals 0% 20% Interbrand 2006 40% 60% 80% 100% Aaker chap. 3
    • 29. A Brand-customer relationship A brand-customer relationship can be based on: 1. The value proposition 2. The brand identity – many brand-customer relationships emerge when the brand is considered as an organisation or person rather than a product. Aaker chap. 3
    • 30. First impressions count How long time.. To… 500 millisec. Conscious reaction will be remembered 110 100 m sprinters reaction to start pistol 50 Notice visual signal and decide fight, flee or stay
    • 31. • Brand image= how the brand is now percived • Brand identity=how strategists want the brand to be perceived • Brand position=that part of the brand identity and value proposition that needs to be actively communicated to the targeted audiences 31
    • 32. The brand has to be lived
    • 33. … so the brand perception is not just good products or clever marketing: It’s everything we say, everything we do!
    • 34. Why is it hard to build strong brands? Pressure to compete on price Short-term pressures Proliferation of competitors Pressure to invest elsewhere Fragmenting markets and media Complexity Bias against innovation Complex brand strategies and relationships Bias towards changing strategies Aaker chap. 1
    • 35. Creating awareness • Establishing recall and recognition is vital • The challenge is to break through the clutter and create awareness (recall and recognition) Aaker chap. 1
    • 36. Creating perceptions of quality • A claim of quality must always be based on substance and knowledge  Creating quality is not enough – the company must create perceptions of quality ↔  Companies must work to maintain/deliver quality Present perception based on previous experience (good and bad)  Aaker chap. 1
    • 37. Brand loyalty • Brand value is largely created by customer loyalty • A brand without loyalty is vulnerable • Loyalty has great impact on marketing costs 37
    • 38. Enhancing loyalty • Develop or strengthen customers’ relations with the brand • Segmentation – Non-customers, price switchers, passively loyal, fence sitters and committed – Ladder • Brand awareness, perceived quality and clear brand identity can help enhance loyalty, but also loyalty programmes (increasingly popular) Aaker chap. 1
    • 39. Today, brands are abundant and we live in an over-communicated noisy world
    • 40. Brand identity TRAPS 2. The brand position trap – A brand position is the part of the brand identity and value proposition that is to be actively communicated to the target audiences and that demonstrates an advantage over competing brands. – The brand position trap occurs when the search for a brand identity becomes a search for a brand position. • Broad < Narrow = less activity guidance 3. The external perspective trap – The firms fail to realize the role that a brand identity can play in helping an organisation understand its basic values and purpose. – Identity < Why customer buy the product 40
    • 41. 4. The product-attribute fixation trap • • • The most common trap. The trap occurs when the strategic and tactical management of the brand is focused solely on product attributes A brand is more than a product. The failure to distinguish between a product and a brand creates the product-attribute fixation trap. 41
    • 42. Dove Real Beauty Sketches • http://www.youtube.com/watch? v=litXW91UauE women • http://www.youtube.com/watch? v=ChY9DoEtE-4 men 42