Marketing: Branding

What is a brand?

A brand is a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers.

Why do companies brand?

✓ Differentiate self from others (STP)

✓ Appeal to different segments (Axe/shield-Rexona)

✓ Competitive advantage (trust)

✓ Price premium (financial asset)

✓ Helps new product introductions (lowers risk)

✓ Improves communication (consistent messaging)

✓ Legal protection of ideas and IP

How do consumers benefit from brands?

✓ Simplify choice

✓ Reduce search costs

✓ Minimise risk (financial, social, physical, etc.)

✓ Create bonds and develop relationships

✓ Say something about the customer

✓ Differentiate products and services (make sense

of the world)

Other facts about brands

Brands have tangible marketing influence and financial value. Brands can shape consumer perceptions. Brands communicate quality, attributes, benefits, values and personality. Brands have a personality (consumers can associate human-like characteristics with a brand). If you were asked, “if this brand were a person, what would they be like.“ The adjectives you give describes its brand personality. These make the brand more relatable and distinctive. When consumers think about a brand, they often don’t just remember its physical features they remember qualities associated with it. However, this is subjective. A strong, consistent brand personality can make consumers feel “I know what to expect from this brand, so I trust it.“

Brand equity

Brand equity is the value that a brand has in the minds of consumers because of their awareness, perceptions, associations, trust and experiences with that brand. The American Marketing Association similarly describes it as the intangible value a brand holds in consumers' minds. In simple words, the extra value a product get simply because of the brand name attached to it.

Why do companies care about brand equity?

Because strong brand equity can give a company advantages such as:

• Greater customer loyalty

• More trust

• Stronger preference over competitors

• Ability to charge a premium

• Greater market share

• Consumers being more willing to choose the brand repeatedly

Why is brand equity difficult to measure?

You cannot put trust, brand associations, loyalty or perceived quality on a scale and directly measure them. These are subjective perceptions and different consumers can give completely different answers. It is also multidimensional.

What is brand image?

It 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.

Brand building

Brand development, brand positioning, brand name and brand sponsorship.

Brand development

Brand development is the process of building, improving and strengthening a brand over time. It involves shaping how the brand is positioned, perceived and recognized by its target market.

4 strategies a company can use to develop its brand portfolio

Line extensions, brand extensions, multibrands and new brands.

Line extension

Existing brand + existing product category. We are saying lets take our existing product and give consumers more versions of it. This involves extending an existing brand into new forms. There are risks: too many variations can confuse consumers, products can cannibalize each other’s sales.

Brand extension

Existing brand + new product category. We are saying lets take a brand people already know and use that brand name on a completely different type of product. The big advantage of this is that the ew product already has recognition because consumers know the existing brand. The risk is if the product is bad, it can damage people’s attitudes toward the main brand as well. If value entry is perceived to be inconsistent with the quality expected from the brand, it could damage customer relationship.

Multibrands

New brand name + existing product category. We are saying that we are already selling this type of product but we are going to create another brand to compete in the same category. This is done because different brands can target different customer segments.

New brands

New brand name + new product category. The company says we are entering a new category and we are creating a completely new brand to do it.

Individual brand vs Family brand

Individual brand: using different brand names for different products

Family brand: marketing several different products under the same brand name.

Advantages and disadvantages of brand development

Advantages: consumer awareness already established. Economies of scale. Access to retail space.

Disadvantages: lose focus, one mistake affects all, stretching the image too far.

Brand name selection

It should suggest something about the products benefits

• It should be simple

• Distinctive

• It should be extendable

• Translatable into different languages

• It should be capable of registration and legal protection

Manufacturers brand

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).

Private label Brand

A brand name owned by a wholesaler or a retailer. Also known as a store brand.

Own-label brands (private label/house brands)

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 (previously Woolworths).

• 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

Licensing

One brand gives another company permission to use its brand name, logo, character in exchange for a fee.

Co-branding

Two established brands come together and put their brands on the same product or offering. The idea is that both brands can benefit from each other’s brand equity, recognition and appeal.

How is the environment in which brands compete changing globally?

1. House brands and cheaper brands are attacking main brands. The main idea is that established brands are facing more competition from cheaper alternatives.

2. Recession - leading to trade downs and trade offs. Trade down is choosing a cheaper version of something. Trade off means sacrificing one thing in order to get another. Economic pressure can cause consumers to move away from premium/main brands.

Continuation

3. Consumers increasingly involved and aware. Consumers are becoming more knowledgeable and actively involved in purchasing decisions. Consumers have more info and therefore more power.

4. Retailers are dominating the supply chain - Who gets on the shelf? Retailers can use their power to negotiate prices with suppliers, decide which brands get shelf space, promote their own house brands. They control access to consumers through distribution and shelf space.

Brands cannot rely on having a famous name. They have to provide value, stay relevant to informed consumers and convince powerful retailers to give them shelf space.

Brand architecture

Architecture is about optimising the hierarchy, linkages, and roles of brands within the portfolio in support of the business strategy. Architecture allows brands to play multiple roles.

Type of brand architecture

Branded house, house of brands.

Branded house (Monolithic master brand)

One big brand and everything sits under it. That means you generally have one main brand name, one main logo, one visual identity, products/variants that operate under the same overarching brand promise. A company does this because the master brand’s reputation can benefit all the products.

House of brands

One company, many separate brands. The individual brands have their own identities, names, personalities and market positions and consumers may not even realize they belong to the same parent company.

Endorsed master brand

With an endorsed brand, you have: individual/sub-brands + a connection to the master brand. The individual brand has its own identity, but the master brand “endorses“ it, giving it credibility and support. This is creating marketing synergy between the product/service name and the master brand, meaning each can add value to the other.

Brand building

Creating and strengthening the brand in consumers’ minds.

Sales activation

It is about encouraging consumers to take action now- usually making a purchase.

Double duty campaigns

A campaign that does both jobs at the same time. Builds the brand and encourages an immediate purchase/action.

Non-double duty campaign

It does one of the two jobs, rather than trying to achieve both.