The document summarizes key concepts about branding from chapters 2 and 3 of an unknown work. It discusses how brands transform product categories by organizing the market and giving products identity. Brands are a long-term vision that shape categories and hold certain positions. Strategy is needed to unite the brand vision and core values. Brands also protect innovators through exclusiveness and reward risk-taking. It then explains the halo effect where brands influence through search, experience, and belief cues. Kernel traits unconditionally signify the brand, while peripheral traits depend on the product range. Flagship products reveal the brand direction. Brands can guide product perceptions like a prism. Finally, it notes that brands benefit all companies

1. https://www.youtube.com/watch?v=By9m3UBiRZM

2. Chapter 2 & Chapter 3
PRESTON AND SNOW

3. Chapter 2:
Strategic Implications of
Branding
WHAT DOES BRANDING REALLY MEAN?

4. Branding transforms the product category
How does the brand do this?
◦ Brands organize the market
◦ Gives the products their own identity
A brand is weak when products are transparent
(Coke keeps its recipe secret)

5. A brand is a long term vision
Brands are not just about market share, but
shape product category
◦ Brands hold certain positions in product category
◦ “What would the market last if we did not exist?”
Strategy is needed to unite the brand
◦ What is the brand vision?
◦ What are the core values?

7. Permanently nurtures the difference
Brands protect the innovators
◦ Grants exclusiveness
◦ Rewards risk-taking attitude

8. Brands act as a genetic program
Serves as the memory and the future
Acts like fast-setting concrete

9. Respect the brand contract
Brands are built through a consistent message
Once established, customers use brands as a benchmark
Satisfied customers become loyal customers
Brand requirements:
◦ Forecast the needs and expectations of potential buyers
◦ React to technical and technological progress
◦ Provide product/service quality and quantity simultaneously
◦ Control supply quantity and quality
◦ Deliver products to distributors
◦ Give meaning to the brand and communicate it to consumers
◦ Increase the experience of consumption or interaction
◦ Remain ethical and ecology-conscious

10. Halo Effect
https://www.youtube.com/watch?v=fxyAYTieXlQ

11. The product and the brand

12. Halo effect: Kernel and Peripheral values
How does a brand have influence?
Cue Messages:
◦ Search cues: factors readily accessible (price, label information)
◦ Experience cues: sample the product or service
◦ Credence cues (aka belief cues): long term fulfillment of promises
Influence buyers if:
◦ Immediately available
◦ Firmly believed
◦ Highly valued
◦ Highly differentiated

13. Halo effect: Kernel and Peripheral values
Kernel Traits
◦ Unconditional, signify the brand
◦ If the brand does not have X or Y, is it still the brand?
Peripheral Traits
◦ Conditional, depends on the product range or segment
◦ Samsung products differ depending on what category they’re in
◦ Long term may become kernel traits

14. Brands need a flagship product
“Prototype” product
Specific product most representative of the brand
Reveals direction and focuses brand
Problems arise when products are too similar

15. Advertising products through
the brand prism
Brands can guide perceptions like a magnifying glass
Products can reflect like a prism to help build the brand
Details change the picture depending on how they are presented
◦ Volvo and BMW would promote ABS differently to fit their strategies

16. Brands versus other signs of quality
Brands often coexist with other signs of quality
This promotes and protects the brand
◦ Certifications of origin protect the heritage of the brand
◦ Quality seals act as a promotional tool

17. Obstacles to the implementation of branding
Branding is a long term process requiring repetition and consistency
Corporate accounting is often short term
◦ Focus on the bottom line and ROI
◦ Fast measurable results are preferred
Turnover with agencies and within brands results in new directions
Innovations quickly become the status quo

19. Asia’s branding culture
Paradoxical
◦ Asian brands enjoy high market share, but are not intrinsically desired
◦ Asians have a love affair with brands, but mostly Western brands (fashion and
luxury)
Samsung
◦ Successful but needs more branding
◦ Focus on products, not brand
◦ Innovations are not disruptive
◦ No capitalization, just distribution
◦ Highly centralized management and communication

20. Summary
Time is often overlooked, but pivotal
The brand needs focus
◦ Say no to products that change the brand
The essence of the brand creates is
◦ A flagship product embodies the idea of the brand
◦ Kernel traits identify products within the brand
Brands guide perceptions and promote products

21. Chapter 3:
Brands and business models

22. Are brands for all companies?
YES
An instrument for growth and profitability
Essentially another business tool

23. The benefits of being a brand
Brands lend personality, influence, value,
and innovation that forms a community
Enhance exclusivity
Act as a springboard for diversification
Magazines are a great example
◦ Vogue, Elle, GEO, etc.

24. Differentiating a commodity by the brand
A commodity market is runs on optimal price alone
◦ Consumers pay for the value of the good
◦ Long term differentiation between products suffers
◦ Hints of classical liberalism
Brands disrupt the commodity market
◦ Perception of brand product having more value
◦ Examples: Coke, Evian

25. Yello
Yello Strom has
developed a meter that
makes electricity visible
and offers customers an
entirely new
transparency around
their energy
consumption.

26. Yello

27. Building a market leader without
advertising
Brand needs to do the following
◦ Have enough volume/sufficient supply
◦ Have a stable quality to reduce risk
◦ Have a mainstream price
◦ Be end-user driven
◦ Create barriers to entry for other brands
◦ Have a strong national sales force
Example: Jacob’s Creek Wine

28. Jacob’s Creek Wine
https://www.youtube.com/watch?v=STnrf0w33wg

29. Brand building:
From product to values, and vice versa
From product to value
◦ Focus on product attributes
◦ Starting point for most goods
◦ As the product becomes more recognized, the name gains attention
From value to product
◦ Focus on the name behind the product
◦ Starting point for luxury and licensed goods
◦ Initially name alone is worth the money, but the product needs to support
Brand names are important and should NOT be descriptive
◦ Descriptive becomes generic, and the brand is lost

31. Are leading brands the best products or
best value curve? What’s a value curve?
Paradox that the number one brands are not the best products
Value curve: what does it mean to be the best?
◦ Meet the needs of consumers in the best way possible
◦ Have added intangible values, such as personality
Bacardi: easy to mix, appeals to casual partygoers
BREAK THE RULE AND ACT FAST
Strong brand awareness is enough to catch the attention of
consumers unaware of product differences

32. What to learn from branding and the
value curve?
Starting a brand means finding a disruptive innovation
Creating a market is the best way to lead the market
Winners start first and move fast
Reach critical size rapidly
Focus on the customer’s values
Example: Insead MBA

33. Backing the brand by a business model
Competition between brands is often a competition between
business models
To grow through expansion, strategy relies on three factors
◦ Availability
◦ Accessibility
◦ Attractiveness

34. Case Study
The Cola Wars: Coke vs. Pepsi
Coke:
◦ “Put Coke at arm’s reach”
◦ Able to be sold cheaply, at the same price as tea in the East
◦ Coke’s image is not a product, but a bond
Pepsi Challenged
◦ Cheaper to consumers
◦ Focus on the product: better taste and started line extensions
◦ Image was for the new “young” generation
Virgin Cola Failure
◦ Didn’t have the distribution
◦ Only one core product with no portfolio for support
◦ Small sales force

35. Summary
Brands are necessary for all companies and products
Brands foster differentiation in the market
Branding can be a chicken or egg debate: product or value?
◦ Either way you get a chicken
The value curve identifies the “best” brand
Brand competition is often business model competition

36. Questions
Thank you