Principles of Marketing

Session 6

Brands

© 2006 Chris Waller

 What is a brand ?

A brand is defined as a:

“name, term, sign, symbol, or design, or a combination of them,

intended to identify the goods or services of one seller

and to differentiate them from those of competitors”

Kevin Keller
Professor of Marketing
• Products have no voice
• Without a brand the customer is confused
• How can they gauge potential satisfaction?
• Every major brand has its own meaning [reason
for being]

• The meaning is important because it sets

expectations with buyers [quality, price, etc.,]
and tells them what direction the brand’s
research, innovation and other efforts are taken
• Exceptional brands follow their own paths
leaving a mark
• Reliability

• Innovation

• Luxury

• Romance

• Safety
There are two dimensions of brand knowledge :

• Brand awareness > reflects a consumer’s

ability to identify the brand

• Brand image > a consumer’s perception

about the brand
3 dimensions to brand image:

• Strength [how strongly the brand is identified

with a brand association]

• Favorability [how important or valuable the

brand association is to customers]

• Uniqueness [how distinctively the brand is

identified with the brand association]
• Brand responses > are judgments based on:

• Quality
• Credibility [expertise, trustworthy, likeability]
• Superiority
• Consideration [how personally relevant]
• The thinking of successful brand builders these
days is not so much the old game of reach (how
many consumers see my ad) and frequency
(how often do they see it)

• but rather finding ways to get consumers to

invite brands into their lives.
• The best brand builders are intensely creative in
getting their message out.

• Amazon.com, eBay, Starbucks, and Skype,

have amassed huge global value with little
traditional advertising.
• Brand builders weave messages over multiple
media channels blurring the lines between ads
and entertainment.

• Result: these brands can be found in a host of

new venues: the Web, live events, cell phones,
and handheld computers.
• Getting your brand message right, drives:

• Sales
• Profits

• And brand equity

Brand Equity
 Think of Brand Equity as

• “The positive differential affect that knowing the

brand name has on a customer’s response to the
product or service”.
 What’s a Brand Worth ?

$3.99 $5.99 $7.99

/case /case /case
Brand Stories

Big presence in Internet search ads

Move upmarket with luxury SUV and Phaeton sedan has left car
buyers, who associate VW with zippy, affordable cars, confused

$5 million in marketing > $6 Billion in sales

Value brand in France > Premium brand in Canada

Big advertiser in movies and video games [product placement]

and:
The world’s top 10 brands
 Brand Concepts

• Brand concept:
concept firm-selected brand meaning derived
from basic consumer needs. A concept chosen prior to
market entry sets the parameters for the scope of the
brand’s positioning strategy, and therefore influences the
perceived brand image and position.

• Three types of brands concepts: functional, experiential,

and symbolic
 Types of Brand Concepts

• Functional:
Functional products that solve a consumption related
problem - promise a higher product benefit, through
durability, reliability, technical superiority or monetary
value.

• Symbolic:
Symbolic products that fulfill internally generated
needs for self-enhancement, roles position, group
membership or ego identification. They enable a buyer to
express personality, values and status and in doing so
improve self-esteem and perceived prestige.

• Experiential:
Experiential products that provide sensory pleasure,
variety and/or cognitive stimulation.
 Exercise 1

• Identify three brands for each of the three brand

types:

• Functional

• Symbolic

• Experiential
 The creation of brands

• The success of a new product creates

Founding awareness for the associated brand
period

• The cognitive territory of the brand

Decoupling starts to refine
period

• The brand dimensions become present

Implanting and persistent in the mind of consumers
period

• The brand can be extended to other

Expansion products/ services
period
Founding period: Different types of awareness

Top-
of-mind
awareness

Unprompted
awareness

Prompted
awareness
Decoupling period: Measurement of brand image
Example: Electronic kitchen equipment

Brand A Brand B

Modern Old-fashioned
Favorable price/ quality ratio Unfavorable price/ quality ratio
Large choice Small choice
Not very esthetic Very esthetic
Lasts a long time Does not last a long time
Easy to use Difficult to use
Low energy consumption High energy consumption
Implanting period: The six dimensions of brands
PICTURE OF
SENDER

Physique Personality
E I
X N
T T
E E
R R
N N
A Relationship Culture A
L L
I I
Z Z
A A
T T
I I
O Reflection Self-image O
N N

PICTURE OF
RECEPIENT

• Physique - Visible expression of product features/ advantages (e.g. fat-reduced bio yoghurt)
• Personality - Psychological attributes that create the brand character – e.g Peugeot vehicles are
considered conservative while its sister brand Citroen, is thought of as idealistic
• Relation - Way of communicating between persons (provides a common ground)
• Culture - Implies a system of values, a source of inspiration and brand energy – e.g. Mercedes
personifies German values with order and strength prevailing.
• Reflection - Image which product users give to others (e.g. station wagon = family)
• Self-Image - Way in which the brand users see themselves (e.g. be in good shape, Porsche)
Expansion period: Brand extension

System of Transfer of
brand values brand values Extension of
the brand into
another
product
Typical category
products Perceived
distance
 The building of brand attachment

Awareness Consumer knows brand

Consumer takes brand into account

Sensibility
at time of purchase

Consumer considers brand image

Perception
as attractive

Consumer feels confident about the

Confidence
brand

Consumer creates an emotional

Attachment
attachment to the brand
 Brands as a corporate architecture

Carries the image and

Corporate brand guarantee of the
producer

Carries a set of values

Umbrella brand associated with a class
of products

Carries benchmarks
Product brand that help to compare
products
 Nestle’s Branding Tree

7500 Local
Brands

140 Regional
Strategic Brands

45 Worldwide
Strategic Brands

10 Worldwide
Corporate Brands
 Benefits of Strong Brands
Benefits for Customers:
ƒ Lower perceived risk
ƒ Reduced search costs
ƒ Increased trust
« An orange … is an orange.
ƒ Increased commitment Unless, of course, that orange
ƒ Status and prestige happens to be Sunkist, a name
eighty percent of consumers
know and trust. »
Russel L. Hanlin,
CEO, Sunkist Growers
Benefits for the Company:
ƒ Build loyalty
ƒ Premium pricing
ƒ Avoid price war
ƒ Additional revenue
ƒ Increased market share
ƒ International expansion
ƒ Barrier to entry
ƒ Increased distribution
ƒ Better shelf space
ƒ Brand extensions