Types of brand

Types of brand

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  INTRODUCTION TO BRANDING ChaoOnlamai 18/10/2019
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  Why Brand? • Whydo companies such as Coca-Cola, Microsoft, IBM and Disney seem to achieve global marketing success so easily? Why does it seem such an effort for others? • Why do we, as consumers, feel loyal to such brands that the mere sight of their logo has us reaching into our pockets to buy their products?
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  The meaning ofbrands • Brands are a means of differentiating a company’s products and services from those of its competitors. • There is plenty of evidence to prove that customers will pay a substantial price premium for a good brand and remain loyal to that brand. It is important, therefore, to understand what brands are and why they are important.
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  The Importance ofBrands McDonalds sums this up nicely in the following quote emphasizing the importance of brands: “…it is not factories that make profits, but relationships with customers, and it is company and brand names which secure those relationships” Businesses that invest in and sustain leading brands prosper whereas those that fail are left to fight for the lower profits available in commodity markets.
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  Coca-Cola • “If Coca-Colawere to lose all of its production-related assets in a disaster, the company would survive. By contrast, if all consumers were to have a sudden lapse of memory and forget everything related to Coca-Cola the company would go out of business.” • Coca-Cola
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  What is abrand? One definition of a brand is as follows: “A name, term, sign, symbol or design, or a combination of these, that is intended to identify the goods and services of one business or group of businesses and to differentiate them from those of competitors”. Interbrand - a leading branding consultancy - define a brand in this way: “A mixture of tangible and intangible attributes symbolized in a trademark, which, if properly managed, creates influence and generates value”.
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  • “Brand equity”refers to the value of a brand. Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations. Brand equity also includes other “intangible” assets such as patents, trademarks and channel relationships. Brand Equity
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  Brand image • “Brandimage” refers to the set of beliefs that customers hold about a particular brand. These are important to develop well since a negative brand image can be very difficult to shake off.
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  Brand extension • “Brandextension” refers to the use of a successful brand name to launch a new or modified product in a new market. Virgin is perhaps the best example of how brand extension can be applied into quite diverse and distinct markets.
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  Branding gives theseller several advantages • Seller’s brand name and trademark provide legal protection of unique product features • Branding gives the seller the opportunity to attract a loyal and profitable set of customers. • Branding helps the seller segment markets. • Strong brands help build corporate image, making it easier to launch new brands and gain acceptance by distributors and consumers.
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  Benefits of Brandingto A BUYER • Help buyers identify the product that they like/dislike. • Identify marketer • Helps reduce the time needed for purchase. • Helps buyers evaluate quality of products especially if unable to judge a products characteristics. • Helps reduce buyers perceived risk of purchase. • Buyer may derive a psychological reward from owning the brand, IE Rolex or Mercedes.
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  BRANDS - BUILDINGA BRAND What factors are important in building brand value? Professor David Jobber identifies seven main factors in building successful brands, as given next:
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  Quality • Quality isa vital ingredient of a good brand. Remember the “core benefits” – the things consumers expect. These must be delivered well and consistently. The branded washing machine that leaks, or the training shoe that often falls apart when wet, or a watch which needs frequent adjustments will never develop brand equity. • Research confirms that, statistically, higher quality brands achieve a higher market share and higher profitability than that of their inferior competitors.
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  Positioning • Positioning isabout the position a brand occupies in a market in the minds of consumers. Strong brands have a clear, often unique position in the target market. • Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, packaging and the way in which it is delivered. In fact, successful positioning usually requires a combination of these things.
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  Repositioning • Repositioning occurswhen a brand tries to change its market position to reflect a change in consumer’s tastes. This is often required when a brand has become tired, perhaps because its original market has matured or has gone into decline.
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  Communications • Communications alsoplay a key role in building a successful brand. We suggested that brand positioning is essentially about customer perceptions – with the objective to build a clearly defined position in the minds of the target audience. • All elements of the promotional mix need to be used to develop and sustain customer perceptions. Initially, the challenge is to build awareness, then to develop the brand personality and reinforce the perception.
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  First-mover advantage • Businessstrategists often talk about first- mover advantage. In terms of brand development, by “first-mover” they mean that it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the market. There is plenty of evidence to support this.
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  Long-term perspective • Theneed to invest in the brand over the long- term is utmost essential. Building customer awareness, communicating the brand’s message and creating customer loyalty takes time. This means that management must “invest” in a brand, perhaps at the expense of short-term profitability.
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  Internal Marketing Finally, managementshould ensure that the brand is marketed “internally” as well as externally. By this we mean that the whole business should understand the brand values and positioning. This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives. Think of the brands that you value in the restaurant, hotel and retail sectors. It is likely that your favorite brands invest heavily in staff training so that the face- to-face contact that you have with the brand helps secure your loyalty.
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  An Effective BrandName • Is easy to pronounce • Is easy to recognize and remember • Is short, distinctive, and unique • Has a positive connotation • Reinforces the product image • Is legally protectable
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  Branding Strategies Brand NoBrand Manufacturer’s Brand Private Brand Individual Brand Family Brand Combi- nation Individual Brand Family Brand Combi- nation
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  Manufacturers’ Brands Versus PrivateBrands Manufacturers’ Brand Private Brand The brand name of a manufacturer. A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand.
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  Types of brand Thereare two main types of brand – manufacturer brands and own-label brands. Manufacturer brands Manufacturer brands are created by producers and bear their chosen brand name. The producer is responsible for marketing the brand. The brand is owned by the producer. By building their brand names, manufacturers can gain widespread distribution (for example by retailers who want to sell the brand) and build customer loyalty (think about the manufacturer brands that you feel “loyal” to).
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  Private Label brands Own-labelbrands are created and owned by businesses that operate in the distribution channel – often referred to as “distributors”. Often these distributors are retailers, but not exclusively. Sometimes the retailer’s entire product range will be own-label. Own-label branding – if well carried out – can often offer the consumer excellent value for money and provide the distributor with additional bargaining power when it comes to negotiating prices and terms with manufacturer brands.
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  Advantages of PrivateBrands • Earn higher profits • Less pressure to mark down prices • Ties customer to wholesaler or retailer
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  Advantages of Manufacturers’Brands • Develop customer loyalty • Attract new customers • Enhance prestige • Ensure dealer loyalty
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  Individual Brands VersusFamily Brands Individual Brand Family Brand Using different brand names for different products. Marketing several different products under the same brand name.
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  Branding Policies • Firstquestion is whether to brand or not to brand. Homogenous products are difficult to brand Branding policies are: • Individual Branding: Naming each product differently P&G, facilitates market segmentation and no overlap. • Overall Family Branding: All products are branded with the same name, or part of a name, IE Nokia, promotion of one item also promotes other items. • Line Family Branding: Within one product line. • Brand Extension Branding: Use one of its existing brand names as part of a brand for an improved or new product, usually in the same product category. 75% new products are brand extensions!!
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  01 Apple •+9% • 234,241 $m • Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. apple.com
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  02 Google •+8% • 167,713 $m • Since the beginning, Google’s goal has been to develop services that significantly improve the lives of as many people as possible. Not just for some. For everyone. google.com
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  03 Amazon •+24% • 125,263 $m • Amazon is an e- commerce and cloud computing company, guided by four principles: customer obsession, passion for invention, commitment to operational excellence, and long- term thinking. amazon.com
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  04 Microsoft •+17% 108,847 $m • Microsoft enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more. microsoft.com
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  05 Coca-Cola •-4% • 63,365 $m • The Coca-Cola Company is the world’s largest total beverage company, offering over 500 brands to people in more than 200 countries. coca- cola.com
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  06 Samsung •+2% • 61,098 $m • Samsung’s vision is to inspire the world and create the future. Inspire the world with innovative technologies, products and design that enrich people’s lives and contribute to social prosperity by creating a new future. samsung.com
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  07 Toyota •+5% • 56,246 $m • Toyota manufactures a diverse lineup of vehicles all over the globe and is taking great steps to develop eco-cars, which will help us become a low carbon society. toyota- global.com
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  08 Mercedes-Benz • +5% •50,832 $m • Mercedes-Benz is the luxury automotive division of The Daimler Group, a producer of premium cars, manufacturer of commercial vehicles, and pioneer of engineering and mobility. mercedes- benz.com
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  09 McDonald's •+4% • 45,362 $m • McDonald’s is the world’s leading global foodservice retailer with over 37,000 locations in over 120 markets. Over 90 percent of McDonald’s restaurants worldwide are owned and operated by independent local business men and women.
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  10 Disney • +11% •44,352 $m • The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in four business segments: Media Networks; Studio Entertainment; Parks, Experiences and Consumer Products; and Direct-to-Consumer and International.
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  Here's how wecalculate the power in a name INTERBRAND TAKES lots of ingredients into account when ranking the world's most valuable brands. To even qualify for the list, each brand must derive about a third of its earnings outside its home country, be recognizable outside of its base of customers, and have publicly available marketing and financial data. One or more of those criteria eliminate such heavyweights as Visa, Wal-Mart, Mars, and CNN. Interbrand doesn't rank parent companies, which explains why Procter & Gamble doesn't show up. And airlines are not ranked because it's too hard to separate their brands' impact on sales from factors such as routes and schedules.
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  Evaluation  BUSINESSWEEK CHOSEInterbrand's methodology because it evaluates brands much the way analysts value other assets: on the basis of how much they're likely to earn in the future. The projected profits are then discounted to a present value, taking into account the likelihood that those earnings will actually materialize.  THE FIRST STEP IS figuring out what percentage of a company's revenues can be credited to a brand. (The brand may be almost the entire company, as with McDonald's Corp., or just a portion, as it is for Marlboro.) Based on reports from analysts at J.P. Morgan Chase, Citigroup, and Morgan Stanley, Interbrand projects five years of earnings and sales for the brand. It then deducts operating costs, taxes, and a charge for the capital employed to arrive at the intangible earnings. The company strips out intangibles such as patents and management strength to assess what portion of those earnings can be attributed to the brand.
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  Summary FINALLY, THE BRAND'Sstrength is assessed to determine the risk profile of those earnings forecasts. Considerations include market leadership, stability, and global reach—or the ability to cross both geographic and cultural borders. That generates a discount rate, which is applied to brand earnings to get a net present value. BusinessWeek and Interbrand believe this figure comes closest to representing a brand's true economic worth.