LEVERAGING SECONDARY

BRAND ASSOCIATIONS TO
BUILD EQUITY
Chapter 7
LEVERAGING
Borrowing some brand knowledge and
depending on the nature of associations or
responses, some brand equity
Unlike brand elements and communication
strategies, this is an indirect approach to
build brand equity.
Sources of Brand Knowledge
Things
Places
People

Other
Brands
Brand
Alliances
Ingredients
Company
Extensions
Channels Country of Origin
Events
Causes
3
rd
Party
Endorsements
Endorsers
Employees
Creation of New Brand
Associations
By making a connection between and
other entities, consumers form a mental
association
This secondary knowledge is most likely to
affect the evaluations of a new product
when consumers lack the motivation or the
ability to judge product related attributes
Effects of Existing Knowledge
Awareness and knowledge of the entity
DO they have the knowledge
Do they hold unique associations
Meaningfulness of the knowledge
Is the knowledge relevant and meaningful for the
brand
Does it have connection to the brand
Transferability
How strongly will this impact the choice of the new
brand
Examples
Events: create experiences
People: create feelings
Media: knowledge about attributes
Cause-related marketing:
Enhance brand image
Evoke feelings of social approval/esteem
Brand attitudes such as trustworthy &
Likeable
Will Brand Leveraging Work for
you?
Does the new product fit into the established product
family?
Does the brand have attributes or features that easily
and effectively carry into new categories?
Is the brand name strengthened or diluted by
representing two (or more) differentiated products?
Does your company have facilities necessary to
manufacture and distribute a new and differentiated
product?
Will sales of the new product cover the cost of product
development and marketing?
A brand leveraging strategy can be extremely successful
and profitable if it is correctly implemented and provides
new products with the right image.
Associations
Commonality: when consumers have
associations to another entity that are
congruent with desired brand associations

Complementarity: when there is not the
level of congruence required, how much
can associations add to the brand
Frito Lay name is extended from potato chips into
other types of snack foods and dips. An
introduction of Frito Lay lemonade did not
succeed because the fruity, sweet drink had little
connection to other Frito Lay products.

Other examples that did not work in the consumer
market include
Ben-Gay aspirin,
Fruit of the Loom laundry detergent.

However, M&M ice cream, Reeses peanut
butter, and Minute Maid orange soda
experienced success because the brands held
direct and logical connections to their new
categories.
An Exception
Bic is a strong brand name with years of
experience in marketing low-cost
disposable plastic products such as the
Bic pen. Thus, Bic is positioned well
to introduce products that capitalize on
these same basic strengths products
such as disposable razors and cigarette
lighters.
Pros
More products mean greater shelf space for the
brand and more opportunities to make a sale.
The cost of introducing a brand leveraged
product is less than introducing an
independently new product due to a much
smaller investment in brand development and
advertising designed to gain brand recognition.
A full line permits coordination of product
offerings, such as bagels and cream cheese,
potato chips and ranch dip, peanut butter and
jelly, etc.
A greater number of products increase efficiency
of manufacturing facilities and raw materials.
Cons
Brand leveraging does present challenges.
Brand dilution

Potential exists for damaging the reputation of
the parent product if new products fail.

Manufacturing and inventory costs may be
higher as a result of product diversification.

Company
Create a new brand
Adopt or modify an existing brand
Combine an existing or a new brand
Corporate Marketing Umbrella
(Philosophy)
Corporate
Marketing
Corporate
Reputation
Corporate
Identity
Corporate
Image
Corporate
Communic
ations
Corporate
Branding

Management
responsibility:
CEO
Functional
resp.:
Most/All
Departments
General
responsibility:
All personnel
Brand
gestation:
Medium /
Long
Stakeholder
focus:
Multiple
Stakeholders
Communicatio
n channels:
Total
corporate
communicatio
ns

Management
responsibility:
Brand
Manager
Functional
resp.:
Marketing
General
responsibility:
Marketing
personnel
Brand
gestation:
Short
Stakeholder
focus:
Consumer
Communicatio
n channels:
Communicatio
n mix
Corporate Brand vs. Product
Brand

Importance of Corporate
Branding

Country of Origin
Is Land Rover British, German or
American?
Cultural Bazaar
Origins of the brand are more important
than who the owner becomes latter in life.
Lamborghini is owned by German-VW, yet
it keeps this Italian identity.
Rolls-Royce is now owned by German
BMW, it still is associated with English
luxury.
It is like a child, the first years are the
most important for his identity.
Other Geographic Associations
States: Idaho Potatoes
Regions: Irish Spring Soap
Cities: Impulse London Vibe
Problems
Strong associations may hinder migration
Favourability of the country of origin
Domestic Perspective
Foreign Perspective
Individualistic vs collectivist societies
Patriotic Appeal
Lack uniqueness
Overused
Channels of Distribution
Associations with
Product
Price
Credit Policy
Quality of Service
Results in associations of brands by retailers
If its sold in Nordstrom, it must be of good
quality

In Bangladesh context?????
Exclusive
Vs.
Intensive distribution
A small story.
He was the little tan bear millions of kids grew up with. He tagged
along with Christopher Robin, stuck his hand in the honey pot, and
figured out new ways to cause harmless mischief. And no matter
where children came from or what their parents did for a living, the
name Winnie-the-Pooh conjured up a single image gleaned from
the classic books by A.A. Milne.

Today's kids, however, won't have that common touchstone.
These days, their image of Pooh depends a lot on where they live
and how much money their parents make. That's because the
Walt Disney Co., which owns the rights to Milne's make-believe
menagerie, is carefully marketing two distinct Poohs. The original
line-drawn figure appears on fine china, pewter spoons, and pricey
kids' stationery found in upscale specialty and department stores
such as Nordstrom and Bloomingdale's. The plump, cartoonlike
Pooh, clad in a red T-shirt and a goofy smile, adorns plastic key
chains, polyester bedsheets, and animated videos. It sells in Wal-
Mart stores and five-and-dime shops. Except for at Disney's own
stores, the two Poohs do not share the same retail shelf.
Co-Branding
Occurs when two or more existing brands
are combined into a joint product or are
marketed together in some fashion
Examples:
Sony Ericsson
Yoplait Trix Yogurt
Nestles Cheerios Cookie Bars
Co-branding is nothing new, and it's something that we
as consumers take somewhat for granted. Visit a grocery
store and you'll see dozens of examples, from the ice
cream aisle (Breyer's (UL) and Hershey to the snack
aisle (Lay's and KC Masterpiece (CLX)) to the cereal
aisle (Kellogg's (K) and Healthy Choice) to the dessert
aisle (Cinnabon and Mrs. Smith's). You can also find co-
branding examples in the automotive world (Coach
(COH) and Lexus (TM)), the hospitality industry (Bulgari
and Ritz-Carlton), the footwear business (Disney (DIS)
and Crocs (CROX), the franchising world (Tim Hortons
(THI) and Cold Stone, the airline industry (Southwest
(LUV) and SeaWorld), and even in product catalogs
stuffed into airplane seat pockets ("Order your Braun
Oral-B Plaque Remover today").

For example, a restaurant could co-brand with a
local packaged-foods maker to create a new
menu item, an accounting firm could co-brand
with an information-technology provider to
create a new consulting offering, or a physician
might co-brand with a hospital on a new service
line. A good place to start generating ideas is by
thinking about other types of companies that do
a good job serving your target market. You might
even ask your customers to identify other
companies with which they do business and see
if you come across any patterns.
Advantages of Co-Branding

Borrow needed expertise
Leverage equity you dont have
Reduce cost of product introduction
Expand brand meaning into related
categories
Broaden meaning
Increase access points
Source of additional revenue
Disadvantages of Co-Branding

Loss of control
Risk of brand equity dilution
Negative feedback effects
Lack of brand focus and clarity
Organizational distractions
Ingredient Branding

A special case of co-
branding that involves
creating brand equity for
materials, components,
or parts that are necessarily
contained within
other branded products
Examples:
Betty Crocker baking
mixes with Hersheys
chocolate syrup
Intel inside

Licensing

Involves contractual arrangements whereby
firms can use the names, logos, characters, and
so forth of other brands for some fixed fee
Examples:
Entertainment (Star Wars, Jurassic Park, etc.)
Television and cartoon characters (The
Simpsons)
Designer apparel and accessories (Calvin Klein,
Pierre Cardin, etc.)

Celebrity Endorsement

Draws attention to the brand
Shapes the perceptions of the brand
Celebrity should have a high level of
visibility and a rich set of useful
associations, judgments, and feelings

Celebrity Endorsement: Potential
Problems

Celebrity endorsers can be overused by
endorsing many products that are too varied.
There must be a reasonable match between the
celebrity and the product.
Celebrity endorsers can get in trouble or lose
popularity.
Many consumers feel that celebrities are doing
the endorsement for money and do not
necessarily believe in the endorsed brand.
Celebrities may distract attention from the brand.

Sporting, Cultural, or Other Events

Sponsored events can contribute to brand equity
by becoming associated to the brand and
improving brand awareness, adding new
associations, or improving the strength,
favorability, and uniqueness of existing
associations.
The main means by which an event can transfer
associations is credibility.