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Brand equitymod


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Brand equitymod

  1. 1. Difference Between Product and Brand1.Product is made in 1. A brand is bought a factory by the customer .2. A product can be 2. A brand is unique. copied.3. A product can be quickly 3. A successful brand is outdated. timeless
  2. 2. BRAND EQUITYBRAND EQUITY : is a set of brand assets andliabilities linked to a brand , its name and symbol ,that add to or subtract from the value provided bya product or service to a firm and /or to that firm’scustomers.For assets or liabilities to underlie brand equitythey must be linked to the name and/or symbol ofthe brand.
  3. 3. BRAND EQUITYThe assets and liabilities on which brand equity isbased can be grouped into 5 categories 1) Brand Loyalty 2) Name awareness 3) Perceived quality 4)Brand associations in addition to perceived quality 5)other proprietary assets :patents, trademarks,channel relationship etc.
  4. 4. • Reduces marketing costs • Trade Leverage • Attracting new Provides value to consumers customer by enhancing 1) Creates Awareness customer’s: Brand 2) Reassurance • Interpretation/ Loyalty • Time to respond to Processing of competitive threats information • Confidence in purchase • decision Anchor to which other • Use satisfaction associations can be attached Brand • Familiarity-Liking Provides value to firm Awareness • Signal of by enhancing : Substance/Commitment • Brand to be considered • Efficiency and effectiveness of marketingBrand equity programs • Reason – to –buy • Brand loyalty • Prices/Margins • Differentiate/Position • Brand extensions • Price • Trade Leverage Perceived • Channel Member • Competitive quality interest advantage • Extensions • Help process/retrieve information • Differentiate /Position Brand • Reason-to buy • Create positive attitude associations /feelings • Extensions Competitive Other advantage proprietary Brand assets
  5. 5. BRAND EQUITY Name Awareness Perceived quality Brand AssociationsBrand Loyalty Other proprietary brand assets Brand Equity Provides value to firm by enhancing:-Provides value to customer by •Efficiency and effectivenessenhancing customer’s •of marketing programs•Interpretation /Processing of •Prices/Marginsinformation. •Brand Extensions•Confidence in the purchase •Trade Leveragedecision. •Competitive advantage•Use satisfaction/delight
  6. 6. P& G- Believers in Brand Management In 1879 , Harley Procter named his soap “IVORY” The soap was promoted as “99 44/100 % pure” and that it floated. The floatation property was created by production mistake which fed air into the soap mixture. Ivory was a remarkable product in a time when most soaps were yellow or brown , irrated skin. Also during those times the floatation value had practical value for those who were frustrated trying to find their soap in water. Well positioned soap----> pure, mild and floated. The claims of purity and mildness were supported by white color, name Ivory, the twin slogans and association with babies. In 1941 , Lever Brothers launched “Swan “ to challenge “Ivory”, but as there was no product difference , the brand failed.
  7. 7. P& G’S Product Portfolio - launched from1940-1980 Tide- Detergent Prell - Shampoo Joy - dishwashing detergent Crest - Toothpaste Secret - cream deo Jif - peanut spread Ivory - Liquid soap Pampers - disposable diapers Folgers - coffee Scope - Mouthwash Bounty - paper towels Pringles- potato chips Bounce - fabric softeners Duncan Hines - cookies
  8. 8. A striking aspect of P& G has been its willingness todevelop competing brands (multi brand concept) in orderto serve new segments , even if new brands threatenexisting brands.P&G has 10 brands in laundry detergent category whichreach a variety of segment s and has given P&G a 40%+market share .1) Ivory Snow : “ ninety-nine and forty-four one-hundredths percent pure,’, the mild gentle soap for diapersand baby clothes”2) Tide--- For extra-tough family laundry jobs-”Tide’s in ,dirt’s out”
  9. 9. Cheer -works in cold, warm or hot water- “ All temperature Cheer”Gain- detergent with fragrance - “ Bursting with freshness”.Bold 3 - includes fabric softener -” Cleans , softens and controls staticDash- concentrated power, less suds to avoid clogging washingmachinesDreft- with “Borax, nature’s natural sweetener “ for baby’s clothesOxydol:- contains bleach-for sparkling whites -with color safe bleach.Era- concentrated liquid detergent-with proteins to clean stainsSolo- heavy duty with fabric softener
  10. 10. Brand Loyalty Brand Loyalty pyramid Committed buyer Likes the brand, considers brand as a friend Satisfied buyer with switching costs Habitual buyer- no reason to change Switchers /price sensitive- indifferent- no brand loyalty
  11. 11. Measuring Brand Loyalty Behavior Measures: Repurchase rates: What % of Maruti Zen owners purchase Zen on their next purchase % of Purchases: of the last five purchases made by a customer, what % went to each brand purchased? Number of Brands Purchased: What % of coffee buyers bought only a single brand?, two brands? Switching costs: If it is expensive or risky for a firm or consumer to change suppliers, then the brand loyalty is on the higher side. E.g : Investment in computer system or software like SAP
  12. 12. Strategic value of Brand Loyalty Reduced Marketing Costs: It is much less costly to retain customers then to attract new one ( COST RATIO IS 1:4) Trade leverage: Strong pull (brand loyalty) from consumers will ensure preferred shelf space because stores know that customers will have such brands on their shopping list. Attracting new customers: Time to respond to competitive threats:If a competitor develops a superior product , a loyal following will allow the firm time needed for the product improvements to be matched and neutralized.
  13. 13. Creating & Maintaining Brand Loyalty Treat the customer Right Stay close to customer Measure/Manage Customer Satisfaction Create switching cost Provide extras
  14. 14. Creating & Maintaining Brand Loyalty Measure / Manage Customer Satisfaction : Regular surveys of customer satisfaction are useful in understanding how customers feel and it also helps in adjusting product and services. Domino’s Pizza conducts weekly phone surveys of customers measuring dimensions like response time, lumpiness of dough, freshness of pepperoni and attitude of delivery people. A bonus pool is distributed based upon these measures. Create Switching costs: Reward loyalty directly. For e.g The airlines frequent flyers program .
  15. 15. Brand AwarenessAbility of a potential buyer to recognize or recall that abrand is a member of a certain product category. Top of Mind Brand recall Brand Recognition Unaware of brand The awareness Pyramid
  16. 16. Brand awareness creates value in the followingg ways : 1) Anchor to whichother associations can be attached : for e.g McDonalds:-Golden arches, clean/efficient, kids , fun etc. 2) Familiarity/Liking: recognition provides the brandwith familiarity and people like the familiar. 3)Substance /commitment: The firm has been inbusiness for a long time. The firm is widely distributed andthe brand is successful. 4) Brands to consider ----- it enters the evoked orconsideration set.
  17. 17. How to achieve Awareness Be different , Memorable: Involve a slogan or jingle: e.g Lifebuoy hai jahan , tandorosti hai wahan. Symbol exposure: colonel sanders --KFC, golden arches- Mcdonalds---> symbol should closely associate with the brand. Publicity--- advertisement. Event Sponsorship --- Femina Miss India, Manikchand Filmfare awards. Consider brand Extensions : one way to gain brand recall is to put the name on other products.
  18. 18. Recognition v/s Recall- The Graveyard ModelHigh Graveyard Brand Recognition Niche Brands Low Low Recall High
  19. 19. BRAND RECOGNITION Brand Recognition: Familiarity and Liking : Recognition reflects familiarity gained from past exposure . Recognition doesnt necessarily involve remembering where the brand was encountered before, why it differs from other brands , or even what the brand’s product class is. It is simply remembering that there was a past exposure to the brand. When consumers see a brand and remember that they have seen it before (perhaps even several times) , they realize that the company is spending money to support the brand. Since it is generally believed that companies will not spend money on bad products , consumers take their recognition as a “signal” that the brand is good.
  20. 20. Brand Recall A brand (for e.g. HDFC Bank) is said to have recall if it comes to consumers’ minds when its product class (for e.g. , banking companies ) is mentioned. Whether or not a customer recalls your brand can be the deciding factor in getting on a shopping list or receiving a chance to bid on a contract. The graveyard model was developed by Young and Rubicam Europe under the guidance of Jim Williams. In this model , brands in a product class are plotted on a recognition v/s recall graph.
  21. 21. The Graveyard Model For e.g , the recall and recognition of each of the brands in the automobile category could be measured and these measurements could be used to position each brand on the graph. One finding consistent across dozens of product classes is that brands tend to follow the curved line shown in the figure. There are two exceptions , each of which reveals the importance of recall. One exception is healthy niche brands , which fall below the line because they are not known to a substantial group of consumers , and therefore have relatively low overall recognition.
  22. 22. The Graveyard Model But because they do have high recall among their respective loyal customer groups , their low recognition is not necessarily an indication of poor performance. And healthy niche players sometimes have the potential to expand recognition and thus the scope of their customer base. The second exception is the graveyard , an area in the upper left hand corner populated by brands with high recognition but low recall. Being in the graveyard can be deadly. Customers know about the brand , but it will not come to mind when considering a purchase .
  23. 23. The Graveyard Model One point of the graveyard model is that high recognition is not necessarily the mark of a strong brand –it is associated with weak ones as well. Movement towards the graveyard is associated with sliding sales and market share. If however , the brand is moving away from the graveyard , sales and market share can be expected to increase. Thus the graveyard model provides evidence that recall is as important as recognition.
  24. 24. Perceived Quality Defn : customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives.
  25. 25. Perceived Quality Quality dimensions : 1) Performance : How well does a washing machine wash clothes---> primary operating characteristics of service 2) Features: secondary elements like on/off timer in washing machine etc. 3) Conformance with specifications: --- absence of defects----- trouble free . 4) Reliability--- will the vacuum cleaner work the same way each time it is used. 5) Durability: How long will the washing machine last 6) Serviceability: is the service system efficient , competent and convenient. 7) Fit and finish:- does the product look and feel like a quality product.
  26. 26. Perceived Quality Research has shown that in many product classes a key dimension which is visible can be pivotable in affecting perceptions. 1) Stereo Speakers: larger size means better sound 2) Tomato ketchup-- thickness means quality. 3) Supermarkets--- fresh products means overall quality. 4) cars: a solid door-closure sound implies good workmanship and a solid safe body. 5) lawn mover-- noise signals quality
  27. 27. 6) Cleaners: A scent like lemon signals cleaningpower7) Medicine : for adults , bitter means better.In addition to information about a brand’s productfeatures (intrinsic cues) there are a host of otherbrand associations- such as the amount ofadvertising used, the brand name or the price(extrinsic cues) – that can influence perceivedquality.
  28. 28. Extrinsic cues – perceived quality1) Advertising: The amount of advertisingsupporting a brand can signal that the firm isbacking the brand.This logically implies that it must be a superiorproduct.2) Price as a quality cue: Chivas Regal was astruggling brand until it decided to raise its pricehigher than competitors’.Its sales increasedthereafter. Product itself was not changed.
  29. 29. The relevance of price as a quality cue will depend onother cues available, the individual himself and theproduct. When intrinsic cues are available , people will be lesslikely to rely on price.The use of price as a quality cue will differ across productclassesProduct classes which are difficult to evaluate are morelikely to have price as a quality cue.As per research, price tends to signal quality in wine,perfume and durables.
  30. 30. Brand Associations Apple produced a good computer , the Apple 2, but created a great distinction. It made using a computer a “ friendly” , unintimidating process. Everything at Apple, from its logo to its down-to earth founders , underscores its uniqueness – Tom Peters
  31. 31. A brand association is anything ‘linked’ in memory to a brand. Thus McDonald’s could be linked to- A character such as Ronald McDonald- A Consumer segment such as kids- A feeling such as having fun- A symbol such as the Golden arches
  32. 32. There are 11 types of associations. They are- Product attributes- Intangibles- Customer benefits- Relative Price- Use/ Application- User/ Customer
  33. 33. - Celebrity/ Person- Lifestyle / Personality- Product class- Competitors- Country/ Geographic area
  34. 34. Product Attributes Probably the most used positioning strategy is to associate an object with a product attribute or characteristic. E.g- Crest- strong association with cavity control- Volvo – durability and safety- BMW talks of performance with their tag line , “The ultimate driving machine”
  35. 35. Positioning by Product attributes and benefits : Colgate --- white strong teeth Close-Up is positioned on fresh breath Promise--- Gum care. Car ads show technical features like MPFI, Power steering, Delta –V technology etc. Dettol : hygiene
  36. 36. Intangibles An intangible factor is a general attribute , such as perceived quality, technological leadership etc. Customers perceive companies like Sony, IBM as technology leaders without knowing the specs of specific models or exactly in what way they are superior
  37. 37. Customer Benefits As most product attributes provide customer benefits , there usually is a one-to one correspondence between the two. Cavity control is both a product characteristic of Crest and a key customer benefit. BMW is good handling (a product characteristic ) providing the customer driving satisfaction (a customer benefit) Benefits are normally two– rational benefit and psychological benefit.
  38. 38. A rational benefit is closely linked to aproduct attribute and would be part of arational decision processA psychological benefit , often extremelyconsequential in the attitude-formationprocess, relates to what feelings areengendered when buying and /or using thebrand.
  39. 39. Product Feature Rational Psychological Benefit BenefitComputer Bubble Memory Can’t lose your Job safety/ work securitycomputer Touch screen entry Easy to use Feeling professionalShampoo Built-in Full, thick hair Confidence about conditioner looksShampoo Natural protein Safe to use every Exciting/sexy dayFairness cream Neem extracts Better skin shade Confidence about looks
  40. 40. Country or Geographic area A country can be a strong symbol, as it has close connections with products, materials and capabilities E.g Germany- beer and upscale automobiles Italy-shoes and leather goods France- fashion and perfume These associations can be exploited by associating a brand with a country.
  41. 41. Use ,application, Occasion andtime : The idea behind this positioning strategy is to find an occasion or time of use Thus you associate the brand with a use or application Kellogg’s --- breakfast Odomos-- USED AT NIGHT Good Knight ---- to fight mosquitos at night Arm and hammer baking soda--- extended its fresh/clean postiioning as an odour destroying agent in refrigerators. Campbell soup—lunch time product
  42. 42. Price – Quality:Is a powerful approach particularly in adeveloping economy like India.In early 1970’s , Nirma positioned itself as goodquality product that lathered well, cleaned welland the price was nearly 50% lower then Surf.Timex use price quality positioning and succeededin USA.Zenith used Price quality positioning for its HomePCs----- value for money
  43. 43. Positioning by Price – Quality: Another dimension of P-Q positioning is that the product is positioned on high quality and price is kept high to communicate this high quality. For e.g In certain product categories it is not possible to assess quality – Perfumes. Premium products positioned at the high end of the market use this positioning e.g—Rolex, Mercedes, Rolls- Royce, Cartier etc.
  44. 44. Product User/customerThe brand manager can determine a targetaudience for whom the product will be positionede.g --- Farex, Cerelac--- is for small Kids—(0-12Months).Cosmetics industry—A) Noxell’s cover girl- product for wholesome,healthy and blonde womenB) Revlon: associated with more sophisticatedwomen
  45. 45. Positioning By competitor In most positioning strategies, the frame of reference is one or more competitors. e.g—Avis-”We’re number two, we try harder campaign Sabroso a coffee liqueur positioned itself against the well established Kahlua with respect to quality and also with respect to the type of liqueur . Its print ad should two bottles side by side and used the headlines “ Two great imported coffee liqueurs. One with a great price. Subaru
  46. 46. Positioning by cultural symbols Marlboro cigarettes chose the American cowboy as the central focus to help differentiate its brand from competitors and developed the Marlboro man. Pillsbury’s doughboy Air India’s Maharaja
  47. 47. Positioning by Product class Some products need to make critical positioning decisions that involve product-class associations. For e.g--- Maxim freeze –dried coffee , the first one in the market needed to position itself with respect to regular and instant coffee. Dove positioned itself apart form the soap category as a cleansing cream product , for women with dry skin.
  48. 48. Positioning by Product classThe soft drink 7- Up was for long time positioned as abeverage that had a “fresh clean taste” that was “thirstquenching”. Research uncovered the fact that most people did notregard 7-Up as a soft drink but rather as a mixer beverage.The brand tended to attract only light soft-drink users.The positioning strategy was then developed to position 7-Up as a mainline soft drink as a logical alternative to thecolas but with a better taste.The successful “ uncola” campaign was the result.
  49. 49. Celebrity/ Person A celebrity often has strong associations. Linking a celebrity with a brand can transfer those associations to the brand. E.g 1) Rahul Dravid and Castrol: Dravid is dependable. So even Castrol is dependable lubricant. 2) V. Anand and NIIT : Anand plays chess which requires brains and NIIT is into software which also requires brains
  50. 50. In the mid eighties , Nike faced a challenge fromReebok .Reebok had exploited the aerobics craze to takeover first place in the athletic shoe market.Nike responded with Air Jordans, basketball shoesusing air-cushioning technology featuringpatented pressurized gas pockets in the soles(Pump it up)The shoe was a smash success , with first yearsales of over $100 mn. Its key was theendorsement by Michael Jordan, the basketballlegend.
  51. 51. A person attached to the brand need not be acelebrity.The Maytag repair man and the Marlboro manhave strong identities and characteristics that havebecome important brand associations.The person need not even be real. It can be acartoon symbol such as –Gattu of Asian Paintsand utterly butterly girl of Amul.
  52. 52. Amitabh and brands Amitabh– extrovert, legendary, aggressive, larger than life, can do comic characters etc. The brand he endorses or used to endorse are as follows: What do you think– is there a fit between the brand and amitabh in all cases
  53. 53. Category BrandPaints Goodlass NerolacCola PepsiChocolates CadburyDetergent RinBattery EvereadyTelecom/energy RelianceDigestion Dabur - HajmolaOil NavratanTelevision BPLCars Maruti-VersaSuitings Reid and TaylorPens ParkerPain Relief Emami
  54. 54. 25-1.wmvkmhj_pappu.wmv
  55. 55. Lifestyles/personality If your car, your colour TV or your washing machine were suddenly to become a human being, what kind of person would you expect it to be? Every person possesses a personality and a lifestyle that is rich, complex and vivid and distinctive as well. Similarly brands can be thought of as having personality/lifestyle by consumers. E.g Research by Pepsi involving 17 groups of loyal drinkers of either Pepsi or Coke, provided , insights into the personalities of the two brands. Coke projected an image of family, and a solid rural America Pepsi– was considered exciting, innovative, and fast growing.
  56. 56. Other proprietary Brand Assets This includes patents, trademarks and channel relationships Brand assets will be most valuable if they inhibit or prevent competitors from eroding a customer base and loyalty. A trademark will protect brand equity from competitors who might want to confuse customers by using a similar name, symbol or package. A patent can prevent direct competition A distribution channel can be controlled by a brand because of a history of brand preference.
  57. 57. Managing Brand Systems Brand Hierarchies Corporate Brand: G.M,Maruti Range Brand : Chevrolet, Zen Product Line Brand: Chevrolet Lumina, Zen Classic Subbrand: Chevrolet Lumina Sports Coupe, Zen Classic LXI, Surf Excel, Surf Ultra
  58. 58. Understanding Brand Roles Driver Endorser Strategic Brands Subbrand Roles branded Benefits Silver Bullets
  59. 59. Driver roles: A driver brand is a brand that drives thepurchase decision: its identity represents what thecustomer primarily expects to receive from the purchase.For e.g Gillette Sensor razor, customers are primarilypurchasing the technology and performance represented bythe Sensor name.As a result, Sensor is the driver brand and its name andsymbol need to have a strong identity and clear visibilityon the package and in the mind of the user.Similarly for Maruti Zen, Zen is the driver brand as theconsumer is buying Zen and not Maruti.
  60. 60. The endorser Role : In the endorser role, a brand providessupport and credibility to the driver brand’s claims.Because the corporate brand usually represents anorganization with people, culture, values and programs, itis well suited to support a driver brand and thus it oftenplays the endorser role.For e.g for LG Golden Eye, LG is the endorser role.Similarly in case of Gillette Sensor , Gillette is an endorserfor sensor razors.
  61. 61. Subbrand RolesA subbrand is a brand that distinguishes a part of theproduct line within the brand system.For e.g Buick (corporate Brand is G.M) uses the subbrandRoadmaster to distinguish a specific model from anothermodel such as Riviera. Both are Buicks and both enjoy theumbrella of the Buick name but each is a distinct product.Similarly Surf has the following subbrands over the years--Surf excel, Surf Ultra, Surf Super excel, Surf Excel matic.Also Zen has the following subbrandsZen Nova, Zen Classic
  62. 62. Branding Benefits Branding a feature :Oral B brushes: Two key features of it unique design were themselves branded - the power tip bristles at the end of the brush and Action cup shape that conformed to teeth and gum contour. They also have branded the indicator bristles which changes colour when brushes become worn. Godrej PUF: a very important feature was branded Bajaj Discover DTSI: branding a component: many computers give the ad and also say “intel inside” Similarly Maruti cars say with MRF tyres
  63. 63. Branding a service program :A company can brand its services to build brand strengthe.g Hyatt in USA has done the followingHyatt Business Plan- Provides work space, phone, faxmachine in the hotel room, also access to copiers, printersetcTouch and Go : Automatic check in via an 800 toll freenumberHyatt Gold passport :Allows customers to earn pointsredeemable for travel awards.
  64. 64. Silver bullets A silver bullet is a subbrand or branded benefit that is employed as a vehicle for changing or supporting the brand image of a parent brand. The Sony walkman supports the innovative miniaturization identity that is central to SONY Taurus brand of Ford showed that Ford could design and build innovative cars Pulsar changed the image of Bajaj. Bazooka the subbrand changed the image of Videocon Similarly Motorazr V3 , changed the image of Motorola
  65. 65. Branded Benefits as Silver bullets A branded benefit (feature, component, service) can also playa silver-bullet role by supporting the image of the brand to which it is attached. The Action cup and Indicator bristles play a silver bullet role for Oral-B toothbrushes and the Oral- B brand by reinforcing the technological edge that Oral-B products provide.
  66. 66. Leveraging the brand Line extensions ( in existing product class) Brand Extensions : On an adhoc basis or creating a range brand. co-branding Stretching the brand vertically in existing product class : a) stretching down b) stretching up
  67. 67. One recipe for strategic success is to create and leverageassets. With its awareness, perceived quality, associationsand customer loyalty, a brand is usually the most powerfulasset that a firm owns.Thus a brand can be leveraged to create larger andstronger business entities.
  68. 68. Line extension :why ?A) expanding user baseb) providing varietyc) energizing the brandd) blocking or inhibiting competitione.g Amul Kool with 6 variantsLays with 6 variants
  69. 69. Stretching the brand vertically in existing productclass : a) stretching down b) stretching up Launch products in all price points with same name e.g Sony, Philips Use subbrands like Citibank - Gold, Silver, Cambridge and Cambridge gold Videocon in colour TV launched subbrands like Bazooka,for top end, Turbo tough for middle class and Freedom series for the lower class Subbrands have the potential to permit entry in an emerginh low end amrklet without threatening the aprent brand’s equity in the higher ranges of the market.
  70. 70. There are two clear problemsa) Risk of cannibalisation as buyers may shift to lowerversionb) the risk that extending the brand down will taint theparent brand’s option here is to change the brand name / use adifferent nameWhen Honda wanted to launch a premium car , the namegiven was Acura.
  71. 71. A subbrand that is upscale will often employ a descriptorsuch as “Special Edition”, “Premium”, “Gold”brand extension: Another way to leverage a brand withextensions is to use it to enter and create advantage inanother product categoryAmul taking the name Amul to pizzas.Creating range brands:For their chips and food division , Pepsi has a seperatename LaysSimilarly in USA , United technologies has a range brandCarrier for A/Cs and Otis for lifts.
  72. 72. Co-brandinga) ingredient brands : One form of co-branding is tobecome a branded ingredient in another brand. Forexample MRF tyres in Maruti Zen cars.Another example is Intelb)Composite brands: Another form of co-branding ishaving a composite brands- the bundling of two brands toprovide an enhanced consumer benefit or reduced cost e.gBig bazaar ICICI Bank credit card or HSBC Indian Oilcredit card.