This document provides an overview of branding and considers various aspects of branding such as definitions, importance of brands, brand classification, brand functions, instruments of web 2.0 for branding, and brand communities. It defines branding as the process of creating a unique name and image for a product in consumers' minds through advertising campaigns. It also discusses the importance of brands in building customer preferences and loyalty. [/SUMMARY]

1. page 1
Branding and consideration

2. page 2
Outline
1. Definition of branding
2. Brands
2.1 Importance
2.2 Classification
2.3 Functions
3. Instruments of the WEB 2.0
4. Brand communities

3. page 3
“A brand for a company is
like a reputation for a
person. You earn
reputation by trying to do
hard things well.”
Jeff Bezos, founder of Amazon.com

4. page 4
Branding …
 is the entire process involved in creating an unique name and
image for a product (good or service) in the consumers' mind
through advertising campaigns with a consistent theme.
 aims to establish a significant and differentiated presence in
the market that attracts and retains loyal customers.
Definition of Branding
(Source: Businessdictionary.com, 2009)

5. page 5
Outline
1. Definition of branding
2. Brands
2.1 Importance
2.2 Classification
2.3 Functions
3. Instruments of the WEB 2.0
4. Brand communities

6. page 6
Top 25 most valuable brands 2009
68,7
60,2
56,6
47,8
34,9
32,9
32 31,3
30,6
28,4
24,1 23,9
22,8 22 21,7 21
19
17,8 17,5
15,4 15,4 15 13,7 13,7 13,3
0
10
20
30
40
50
60
70
C
oca
C
ola
IBMM
icrosoft
G
E
N
okia
M
cD
onaldsG
oogle
Toyota
IntelD
isney
H
ew
lett-P
ackard
M
ercedes
Benz
G
ilette
C
isco
BM
W
Louis
V
ittonM
arlboro
H
ondaSam
sung
Apple
H
&M
Am
erican
Express
Pepsi
O
racleN
escafé
Bill. US $
Source: Interbrand, September 2009

7. page 7
The Interactive-Tableau helps to structure
communication activities
Consideration CRMTransactionBranding
PR
PP + Progr.
Print
TV
Online
DM + Mobile
Possiblecrossmediaintegration
Outlet
Communication cycle

8. page 8
Product placement /
programming

9. page 9
Product Placement
Product Placement is an advertising
technique used by companies to
subtly promote their products through
appearances (integration of products
into the plot) in film, television, or
other media.
Benefit:
Product is not perceived within an
advertising context, but as part of
the plot.
Source: Businessdictionary.com, 2009

10. page 10
Do you imagine a shoe
brand when you see
these pictures?
Examples – Sex and the City

11. page 11
No classic advertising, but close to 99% aided brand awareness in
relevant target group.
That’s the result of brilliant strategic and operational PR work.
Examples – Sex and the City + Manolo Blahnik

12. page 12
Movie or advertising?
Examples – Sex and the City (The Movie)

13. page 13
Designers
Manolo Blahnik
Vivienne Westwood
Louis
Chanel
Dior
Ferragamo
Adidas
Burberry
Swarovski
Hello Kitty
Stores & Services
Henri Bendel
Scoop
Bluefly.com
Duane Reade
Manhattan Mini Storage
Bag Borrow or Steal Netflix
U-Haul
Gadgets
Apple
iPhone
Blackberry
Bang & Olufsen
Dell
Cuisinart
Sprint
Publications
Vogue
New York Post
Page Six
Entertainment Weekly
New York magazine
Marie Claire
The Wall Street Journal
Sips and Snacks
Starbucks
Pellegrino
Skyy Vodka
VitaminWater
Smart Water
Pret a Manger
Cup of Noodles
Roger Vivier
Diane von Furstenberg
Hermès
Christian Louboutin
Prada
Tiffany and Co.
Escada
Versace
Gucci
Vera Wang
Oscar de la Renta
Carolina Herrera
Christian Lacroix
Lanvin
Nike
„Women come to New York for the two L's: Labels and Love“
Examples – Sex and the City (The Movie)

14. page 14
Programming
Programming / Advertiser-founded programming (AFP) is the development,
planning and realization of television / movie formats together with a brand.
General Motors promoted its new Pontiac GTO
in the movie “The last ride” in 2004.
(Source: absatzwirtschaft, 2005)

15. page 15
Outline
1. Definition of branding
2. Brands
2.1 Importance
2.2 Classification
2.3 Functions
3. Instruments of the WEB 2.0
4. Brand communities

16. page 16
Brand game

17. page 17
Human personalities and Greek gods
(Source: McKinsey & Company, Hajo Riesenbeckund Jesko Perrey, Mega-Macht Marke, p. 189)
Well-behaved
Rationality
Desire
Fortitude
Intellect
Robust
Intelligent
Reliable
Authentic
Honest
Gentle
Charming
Bright / Happy
Freedom-loving
Spirited
Impassionate
Robin Hood
(Prometheus)Nelson Mandela
(Hephaistos)
J. W. von Goethe
(Apollo)
Alice Schwarzer
(Artemis)
Lance Armstrong
(Herkules)
Bruce Willis
(Ares)
Mick Jagger
(Dionysos)
Evita Perón
(Helena)
James Bond
(Zeus)
Thomas
Gottschalk
(Hermes)
Julia Roberts
(Aphrodite)
Brave

18. page 18
Rationality
Desire
Fortitude
Intellect
Robust
Intelligent
Reliable
Authentic
Honest
Gentle
Charming
Bright / Happy
Freedom-loving
Spirited
Impassionate
Brave
Well-behaved
Robin Hood
Nelson
Mandela
Richard v. Weizäcker
Alice Schwarzer
Lance Armstrong
Bruce Willis
Mick Jagger
Evita
James Bond
Thomas
Gottschalk
Julia Roberts
NIVEA
L‘Oréal
Radeberger
Lucky Strike
Beck‘s
Volksbanken
Camel
Jever
Warsteiner
KrombacherGünther
Jauch
Goethe
Robbie
Williams
Mahatma Gandhi
Alfred Biolek
The brand personality gameboard (BPG)
(Source: McKinsey & Company, Hajo Riesenbeckund Jesko Perrey, Mega-Macht Marke, p. 191)

19. page 19
Krombacher and Günther Jauch
-40 +40
negative positiveO
Gentle
Charming
Successful
Intelligent
Bright / happy
Impassionate
Spirited
Brave
Freedom-loving
Reliable
Robust
Honest
Well-behaved
Authentic
Personality traits
Krombacher
Günther Jauch
Source: Riesenbeck / Perrey (2004), p. 196

20. page 20
Success factors of brand management
Strong brands are…
 …continuous.
 …sustaining and maintaining its brand name.
 …not changing their positioning, target group or
public appearance from day-to-day.
(Source: Riesenbeck / Perrey (2004), p. 31)

21. page 21
Persil
The brand Persil

22. page 22
Persil

23. page 23
Centennial success story of a detergent brand:
 Always innovative, without changing personality
 "Top-brand 2008”
 External appearance almost unchanged
 More than 20 variations have been invented
 Market share: 37%
 1907 „First self-acting detergent“
 1959 „First synthetic detergent, non-sensitive concerning
water-hardness“
 1986 „First phosphate-free detergents“
 1994 Persil Megaperls
 1998 Persil Tabs
 2002 Persil LIQUITS
Source: Riesenbeck / Perrey (2004), p. 31 ff., www.persil.de
Persil

24. page 24
The cowboy always works – Camel is searching
Year*
(Source: Riesenbeck / Perrey (2004), p. 33, * since 1991 incl. East Germany)
0
5
10
15
20
25
30
35
40
1900 1900 1900 1900 1900 1900 1900 1900
1988 2000 200296 97 98 99 0189 93 94 9590 91 92
Market shares of
branded cigarettes
in percent
Smoking
cowboy
Riding
cowboy
Smoking
cowboy
Smoking
cowboy
Smoking
camel-man
Camel in
front of
pyramid
Smoking
adventurer in
the jungle
Kangaroo in
the desert
Funny
dromedary
character
Relaxed
young
people
Marlboro: high advertising consistency
Camel: inconsistent advertisement

25. page 25
Outline
1. Definition of branding
2. Brands
2.1 Importance
2.2 Classification
2.3 Functions
3. Instruments of the WEB 2.0
4. Brand communities

26. page 26
Typology of brands I
Source: Ansätze zur Typologisierung von Marken, Bruhn, Kommunikationspolitik, edition 1997, p. 1447
Typology characteristics Brand types Examples
Institutional position
Vertical range within the supply-
chain
Geographical coverage
Amount of brand owners
Amount of marked goods
Producer brand
Trade brand
Service brand
Regional brand
National brand
International brand
Vanishing preliminary product brand
Accompanying preliminary product brand
Finished product brand
Individual brand
Collective brand
Single brand
Product group brand
Umbrella brand
Global brand
Jacobs Krönung
Albrecht coffee
TUI
Südmilch
Ernte 23, Mark Astor
Opel, EC-card
Coca-Cola
Duraterm-Chromium-ignition plug
Sympatex, Intel
Boss-Suit
Rosenthal
Odol
Nivea
Siemens
Gruppe 21

27. page 27
Brand types Examples
With regards to contents of the brand
Market levels
Utilization of perceptional
instruments
Instruments of marking
Knowledge of
producer
Way of marking
Secondary brand
Tertiary brand
Enterprise brand
Fantasy brand
Acoustic brand
Optical brand
Olfactory brand (smell)
Word brand
Tactile brand (touch)
Picture brand
Company-labeled brand
Daimler-Benz
Mercedes star
Bahlsen Choco Leibniz
Nylon
4711
Mohr von Sarotti
Underberg (melody)
Merci-chocolate
Bahlsen cookies
Carstens SC
Rütgers Club
Primary brand Henkel Trocken
Third party brand Palazzo (chocolate cookies)
Source: Ansätze zur Typologisierung von Marken, Bruhn, Kommunikationspolitik, edition 1997, p. 1447
Typology characteristics
Typology of brands I

28. page 28
ConsumerCompany Intermediary
• Differentiation from
competition and signaling
quality
• Building customer
preferences and loyalty
• Creation of market entry
barriers for competitors
• Establish a price
premium
• Creation of a platform for
new products
(introduction with
established brand name)
• Reduction of own sales
risk
• Image transfer (from
brand leader towards
intermediary)
• Limitation of own
consulting activities by
sales staff
• Orientation guide and
facilitation for information
reception and processing
• Signal of quality and
reduction of risk
• Communication of an
experience value
• Self-expression (of
individual taste, group
membership or social
status)
(Source: Homburg/Krohmer, Marketingmanagement, 2003, p. 517)
Brand functions out of different perspectives

29. page 29
Challenges for brand management
Market / Competition
 International market
 Deregulated national markets
 New competitors
 Concentration (M&A)
Trade
 Increasing emancipation and
power of the retailer
 New management concepts
 Increasing importance of retailer
brands
Product
 Product inflation
 Reduction of product life cycle
 Equality of brands
 Increasing flop rates
Consumer
 Changed consumer needs
 Variety seeking
 Fragmentation of target groups
 Stimulus satiation
 Individualization
Communication
 New information- and
communication technologies
 Declining efficiency of
communication
Brand
 Increasing costs of brand
management
 Undifferentiated brand profiles
Brand
erosion
Brand value
Business
success
-
-
(Source: Esch, F.R. / Wicke, A. (2002): Herausforderungen und Aufgaben des Markenmanagements, in: Esch, F.R. (Ed.): Moderne Markenführung, 3. edition, Wiesbaden, p. 3-60)

30. page 30
Outline
1. Definition of branding
2. Brands
2.1 Importance
2.2 Classification
2.3 Functions
3. Instruments of the WEB 2.0
4. Brand communities

31. page 31
Instruments of the Web 2.0
Source: IMG (2006)
Blogs
Peer-to-Peer
Podcasts
Avatars
IP TV
Online
advertising
Ad games
Auctions

32. page 32
Online advertising has high growth rates
1. Classic online advertising
 Branding orientated or transaction
orientated
 Banner, e-mail advertising, layer
ads…
2. Key word advertising
 Transaction orientated advertising
 Context relevant insertion of
advertising links depending on the
entered search term (e.g. on Google)
3. Affiliate advertising
 Mutual placement of advertising and
accordingly advertising links in a
partnership of websites
Source: OVK (2009)
OVK advertising statistic 2007 and 2008 with forecast for 2009 in mill. Euro
by segments
2007 2008 Forecast 2009
Affiliate networks
Key word advertising
Classic online advertising
Online advertising is
…advertisement, which is communicated in different ways over the medium Internet.

33. page 33
How key word advertising works
Source: Google (2006); IMG (2006)
Key word advertising
 Enter search term on Google
 Display of specific search
results
 Display of advertising links
dependent on entered key
word in the beginning (context
relevant advertising)
Implications
 Sales management
 Stronger perception of
advertisement due to higher
relevance Ordinary
search results
Key word
Context relevant
advertisement

34. page 34
Google
 Google is No. 1 search engine in Germany with more
than 17 mill. users.
 Google is the fifth largest homepage worldwide.
 In Germany, 87,1% of the Internet traffic, which is
generated by search engines, is induced by Google.
 Google is provided in 124 languages.
 In 2008 Google launched its own Browser (Chrome)
and gained a total revenue of 22.5 bill. USD.
Search Engines
Development of market shares

35. page 35
 Google Maps / Street View: since 2008 Google is taking pictures of German
neighborhoods
Google tools and services
 Google Books: Google’s newest project contains the scanning of about a million non-
protected books, in order to provide them online.

36. page 36
Three ways Google is earning money with
1.) Key
word
advertising
3.) License model: Like in case of software, buyers of the license are paying Google for the right to
merchandise Google’s know how on their own web pages.
2.) Paid placement: The one who pays most, will be listed on top.

37. page 37
Instruments of the Web 2.0
Source: IMG (2006)
Online
advertising
Blogs
Peer-to-peer
Podcasts
IP TV
Avatars
Ad games
Auctions

38. page 38
Avatars
Avatar describes…
 …an artificial person or a graphic
representative of a real person in
the Internet.
 Avatars may be displayed in form of
a picture, icon or as 3D figure of a
human.
Impact of avatars
 Avatars possess a higher influence
on the user, if the similarity compared
to the own character is perceived as
higher.
Source: Bauer et al. (2005)

39. page 39
Avatars interact with customers:
 adaption to the consumer in appearance
and behavior
 giving product recommendations
 answering questions concerning particular
products and utilization
Source: IMG (2006)
Benefits
(1) Generation of user related
data
(2) Acceptance testing of new
products
(3) Trend analysis
(4) Gaining of new customers
(5) Commitment of existing
customers
Avatars as sales representatives for brands

40. page 40
Instruments of the Web 2.0
Source: IMG (2006)
Online
advertising
Blogs
Peer-to-peer
Avatars
IP TV
Podcasts
Ad games
Auctions

41. page 41
Benefits
(1) Innovative approach to address special interest consumers and
experts (retailer, press, etc.)
(2) Gaining of new customers
(3) Retention of existing customers
Podcasts
Podcasts…
Source: IMG (2006)
upload
download
• Staff members
• Private persons
• Press
…are available online as video or audio clips
…consist of reports of relevant topics in society (e.g. business,
lifestyle, entertainment or food)
• Staff members
• Private persons
• Press

42. page 42
Instruments of the Web 2.0
Source: IMG (2006)
Online
advertising
Peer-to-peer
Podcasts Avatars
IP TV
Blogs
Ad games
Auctions

43. page 43
Blogs
Blogs are…
 … websites, which contain
periodically new entries.
 Most of them are published by
private persons
 and serve the exchange of
opinions of users among each
other.
Implications:
 Topics primarily discussed in blogs
are taken over from the
established press in the meantime.
 Blogs are accepted as opinion
leader.

44. page 44
Benefits
(1) Trend analysis
(2) Monitoring of product
acceptance
(3) Active complaint
management
(4) Retention of existing
customers
(5) Gaining of new
customers
Blogs enhance interaction with the brand
Possible areas of application
 Managers (executive board, directors, etc.) are
telling about job, highlights or private belongings
 Feedback and discussions of employees in the
management blog
Source: IMG (2006)
 Public forums about topics like work, living,
food or brand relevant areas of life
 Assistance from mentor of the enterprise
 Blogs for daily exchange of ideas and solutions
concerning important topics among brand products
(B2B and B2C)
 Exchange of tips, tricks and recommendations of
utilization between consumers
 Individual consulting from experts of the company

45. page 45
Case study: Dell Computer - Blogging
21thof June
 First post from Jeff Jarvis
26th of June
 Jarvis considers to switch from Dell to Apple
30th of June – 1st of July
 Top blogger Scoble, Calacanis, Rubel and Silverman are following
1st of July
 „Blog Business Summit“ concludes, that Dell interpreted the blog entries falsely
 Jarvis gets ranked on 5th place at Google for “Dell sucks“
8th of July
 Dell reports troubles with closing down customer forums
17th of August
 Jarvis writes an open letter to Michael Dell
23th of August
 Dell changes its blog policy “Look & don‘t touch“ – Consumer service is now scanning blogs
25th of August
 Jarvis locates his story in BusinessWeek online. He receives emails from Dell’s PR manager
27th of August
 Jarvis locates his story in the printed edition of BusinessWeek
29th of August
 Jarvis receives a warm but peremptory call of the Dell PR manager

46. page 46
Case study: Development of Dell‘s stock price
First post
from Jarvis
Top blogger are
following
Jarvis’ page gets
ranked on 5th
place for “Dell
sucks“
Dell closes
down customer
forums
Dell changes
blog policy
Jarvis is attacked
from PR
Last Dell post
Story appears in
BusinessWeek online
Jarvis’ open letter
to Michael Dell
Dell publishes
quarterly figures

47. page 47
Instruments of the Web 2.0
Source: IMG (2006)
Online
advertising
Blogs
Peer-to-peer
Podcasts Avatars
IP TV
Auctions
Ad games

48. page 48
Online Auctions
Auctions
Demand
 Private persons
 Registered retailer
 Registered reseller
Offerings
 Special offers or new
developments
 Limited products with
special design
 Private products
Source: IMG (2006)
Auctions
Benefits
(1) Gaining new customers
(2) Market research instrument for early detection of new trends
(3) Testing new products
(4) Testing market related willingness to pay

49. page 49
Instruments of the Web 2.0
Source: IMG (2006)
Online
advertising
Blogs
Peer-to-peer Auctions
Podcasts Avatars
Ad games
IP TV

50. page 50
Ad games…
Ad-Games
 …are games, which serve advertising in an entertaining way (advertainment / in-game
advertising) and contain advertising banner or products.
 …are also used by non-commercial enterprises and institutions to communicate their
message.
 …posses a great significance for young customers, since long-lasting relationships with
brands are often initiated under 17 years.
 …on gateways are good opportunities to address young and fashion-conscious recipients.
iPhone Game
Volkswagen Scirocco R 24H
Challenge

51. page 51
Moorhuhn
Ad games - Examples
Source: Institut für angewandte Kommunikationsforschung (2002)
Benefits
(1) Consumers are engaged
voluntarily and in an active
way with brand or product
(2) Avoid advertising reactance
(3) Brand management (linkage
of brand with entertainment)
(4) Gaining of new customers
(5) Customer retention
“While almost 90 percent of all test
persons regard TV-spots as disturbing,
advertising in ad games is
appreciated from more than 50
percent.”
Created 1999 by Phenomedia as ad game for
the Scottish whiskey brand Johnnie Walker

52. page 52
Instruments of the Web 2.0
Source: IMG (2006)
Online
advertising
Blogs
Peer-to-peer
Podcasts Avatars
IP TV
Ad games
Auctions

53. page 53
Internet Protocol TV (IP TV)…
 …describes the digital transmission of television programs and movies.
 …is only receivable via broadband connection.
 …is used for:
 Broadcast TV (reception of multicast video streams, also referred to as live TV).
 Video on demand (virtual video shop).
 Internet TV (playback of video streams).
Source: IMG 2006
IP TV
(1) Innovative approach to address special interest consumers and experts (retailer,
press, etc.)
(2) Increases the significance of brand relevant areas of life by placement of channels or
programs about lifestyle topics
(3) Customer retention and gaining of new customers
Benefits

54. page 54
Economic significance of IP TV
Source: Goldmedia (2006)
Study of Goldmedia (2010):
 More than 3.8 mill. households will use IPTV in Germany until 2014
 Utilization of video on demand enables (via the feedback channel Internet) various
interactive services like shopping or online auctions on the TV screen

55. page 55
Instruments of the Web 2.0
Source: IMG (2006)
Online
advertising
Blogs
Podcasts Avatars
IP TV
Peer-to-peer
Ad games
Auctions

56. page 56
Peer-to-peer (P2P)
P2P is the decentralized diffusion of all types of files
 Describes the communication among
equals.
 Within a P2P network all computers are
equal.
 No central database (every peer makes
a part of the existing information available).
 No peer administrates (or knows) the total
stock.
 Peers are autonomous.
 No central entity, which is navigating or
coordinating interactions.
 Peers, connections and information are
not reliable.
Peer Peer
Peer Peer
Due to the lack of controllability, an implementation of the P2P technology for
objects of an enterprise seems not to lead to success.
No controlling
entity

57. page 57
Example - simfy
Source: Simfy.de (2009)
Simfy in facts and figures
MEDIA DATAFORMATS & PRICES
OFFERING PACKAGES
Display, audio, video-ads –
right format for everyone
Reach exactly your target
group
Advertising packages –
matched with your needs
Discover our special
forms of advertising
Marketing / commercialization options
Music creates a lucrative
advertising environment
and as the number of users
increases, advertising gets
more and more profitable
(see facebook / StudiVZ)
What is simfy?
• simfy gives you the possibility to share your music with your friends, legally and without
having any bad conscience
• simfy is your music stored at one place and available from everywhere

58. page 58
Outline
1. Definition of branding
2. Brands
2.1 Importance
2.2 Classification
2.3 Functions
3. Instruments of the WEB 2.0
4. Brand communities

59. page 59
What is the difference between these two products?
The social cover!
quality, technique, design?

60. page 60
History of communities
Source: University of St. Gallen (2006)
Functionalization
“society"
Individualization
"Cocooning"
Traditional
communities
New forms of
communities
e.g. family, clans, village
communities, cliques, churchly
communities
 Common origin (geographic
or relatedness)
 Strong relationship
 Shared identity
 Reciprocity
 Trust
 Community as value
e.g. contract orientated groups,
transaction communities
 Weak relationships
 Functional interests
 Commercialization
 Transaction orientation
 Information procurement
e.g. singles, dropouts, big city
residents
 Release of the ties of
traditional communities
 Individual freedom
 Self-actualization
 Search for identity
 Enjoyment orientation and
hedonism
e.g. virtual communities,
consumption communities,
Brand Communities
 Physical adjacency no
longer required (“global
village“)
 Identification via shared
interests, values or ideals
Values
decisive
Functional needs
decisive
Individual needs
decisive
Symbolic
consumption decisive

61. page 61
From core product towards social experience (1/2)
Source: University of St. Gallen (2006)
Social interaction
Emotional
experience
Added value
Core
product
Needs Control conception
Individual as part of a
social network
(e.g. brand community)
Social
orientation
Art, lifestyle
Brand
orientation
Hotline,
24-hours service
Consumer
orientation
Attractive, quality products
for affordable prices
Product
orientation
 Consumption became a social act of symbolic self-expression
 The brand is the connector of social interactions in this process

62. page 62
Core product Added value Emotional experience Social experience
I revive your spirits! I am practical! I make you stylish! We are friends!
From core product towards social experience (2/2)
 Social reasons for buying: The brand creates a new social standing / contacts for the consumer
 Customer value: Contribution to shaping of identity, group experiences and encounter platform
 Consequence: Affective brand loyalty (emotions, love relationship)

63. page 63
 Uniting fans, admirers and
customers with basic interest of
the brand
 Members represent strong
market for license products and
brand extensions
 Members are also willing to
invest in shares of the enterprise
Compare & compete:
 Save your runs and plot your results
 Discuss new tips and training tools
 Share your playlists & powersongs
 Join events like city marathons
 Music & Entertainment
 Online Games
 Events
 Social interaction
 Based on interests
 Not bound to time and place
 Allow consumers a bigger
influence on brand design
Brand communities and their characteristics (1/3)

64. page 64
 “We” feeling & social identity
 Environment with high
identification potential
 Presence of shared rituals and
traditions (allow to continue
certain history or culture)
 Members operate as “brand
missionaries”, who carry brand
message to other communities
Members are motivated to give
feedback to company
 Online and / or offline
Brand communities and their characteristics (2/3)
 Hosting or joining a home party
 Join an online party

65. page 65
 Members are more likely to
forgive product imperfection or
a lack of service quality
 Members are less willed to
switch brand, even if products of
competitive brands provide better
performance characteristics
Providing: blogs, forums, events,
downloads, network gaming, etc.
Sony‘s Playstation / Nintendo‘s Wii
 A sense of moral responsibility
(towards community and other
members)
 Members represent a valuable
source of information for brand
relevant topics
Brand communities and their characteristics (3/3)
MTV community contains areas like: multiplayer
games, blogs, contests, events or activism

66. page 66
AttractionValidationDeepeningIntegrationAttraction
Pleasant anticipationAffirmationChallengeExcitementWord of mouth
 Chapter information
 Direct mailing
 Word of mouth
 Arrival in groups
 Welcome event
 Passports
 T-shirts
 Story nights
 Daily challenges
 Oath
 Certificates
 Honors
 Farewell event
 Chapter activities
 Story telling
Meet & Greet in Paris
 Community formation process: The aim of these activities is to develop long-term relationships
between the customers and towards the brand.
 Role of the company: Enabler, not in the centre of interest (fascination), concentration on
customer interaction, detailed planning of the event.
 Problem: Relationships are breaking after an event
Example: Harley Davidson
Relevance of events for community building: European Posse Ride

67. page 67
Brands will clearly benefit from brand communities
Source: University of St. Gallen & University of Mannheim (2006)
2. Exchange of ideas and information with other
consumers (via brand communities) is leading to
higher brand attraction.
4. The communication between consumers in brand
communities has a significant impact on brand
choice.
1. The brand is benefiting from the interaction with
consumers.
3. Consumers are voluntarily engaged with brands and
are thereby encouraging the exchange of information
between company and consumers.
0% 100%
0% 100%
0% 100%
0% 100%
100%
90.9%
87%
81.8%
Affirmation from
marketing experts (in %)Thesis concerning brand communities
Delphi study „Interactive Marketing 2020“

68. page 68
Economic relevance of community marketing
Brand loyalty has a rational and a social
component
 Functional and social aspects are in
principle equally weighted components
 Only community marketing not enough!
 Social aspects of consumption (customer
involvement) have the biggest impact on the
willingness of recommendation for a brand
Community marketing is cash-relevant:
 The combination of product quality and
social cover is encouraging the frequency of
purchase and is resulting in a higher
willingness to pay
Building up differentiation potentials via
community value:
 Social criteria are less replaceable than
service components
0,39 0,19
0,17
0,59 0,69 0,610,61
Brand Loyalty
(Word of Mouth)
Product
Quality
Community
Quality
Customer
Involvement
Trust Satisfaction
Social arguments for
purchasing
Functional arguments
for purchasing
Source: Herrmann / Löwenfeld, 2004
Customer
involvement
Trust Satisfaction
Community
quality
Product
quality
Brand loyalty
(WoM)
Bottom line: Social arguments for purchasing (via
brand community) have same impact as functional
arguments, for creation of brand loyalty