© AP Images/Jeff Chiu Brands · 2009-11-05 · 63 support, Google as an information source, and the Museum of Modern Art as a specific museum). Marketers believe that brands have

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• What is a brand? Why do we brand—what functions do brands serve?• What are brand associations?• What are branding strategies for goods and services?• How do we assess brand equity?

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support, Google as an information source, and the Museum of Modern Art as a specific museum).

Marketers believe that brands have value above and beyond the benefits of the product itself. Coca-Cola is not only a well-known name but also a name that brings certain connotations to mind—the instant you hear the name, you may picture the shape of the Coke bottle, the logo, the red color, and some of its advertising. So while a brand begins with the name, a brand is more than just that name—it’s a portfolio of qualities associated with the name.

The qualities with which the brand name is associated begin with those under the company’s control. As with the shape of the Coke bottle, the product shape and its pack-aging can be distinctive (e.g., picture the distinctive shape of a Corvette, the clean design lines of the iPhone and the Motorola RAZR cell phone). In addition, logos are shapes and symbols that may begin with little inherent mean-ing, but they come to be associated with the brand and

WHAT IS A BRAND? WHY DO WE BRAND?

What do you think of when you hear these names: Coca-Cola, Disney, GE, IBM, Intel, and Microsoft? These are names that business magazines regularly feature as top global brands.1

Why do marketers care about brands? If branding is good or important, how do we do it? Why are the brand strategies of Coca-Cola and Disney strong, and how do they differ?

In the last chapter, we discussed goods and services. In this chapter, we’ll discuss not products as classes of pur-chases, but brands as particulars: not shoes, but Christian Lacroix; not cars, but Ferraris; not condos, but Trump Tower residences. Services get branded too (e.g., H&R Block tax consultants, Ronald McDonald House hospital



64 P A R T 2 Product Positioning

technical service support).3

Other brand names suggest their benefits (e.g., Coca-Cola intimated its original ingredi-ent; Motorola’s RAZR phone implies its razor-thin shape, iPod presumably means “my cache of music,” and Nike is named for the Greek goddess who ran in athletic shoes).

Many firm and brand names are those of the founder. These tend to have no inherent meaning, show little creativity in marketing, and serve primarily as an ego trip for the founder. Yet fam-ily names aren’t entirely lame

as brands. Their lack of explicit meaning allows them to translate well to other brands across the firm (e.g., Trump Plaza, Trump Marina, Trump as a sponsor of beauty pag-eants). And with time, no one thinks of the people (Mr. Enzo Ferrari in 1898 or Professor (seriously!) Ferdinand Porsche in 1948); rather, consumers think of the companies’ subse-quent cars. Still, the reader with entrepreneurial dreams should forgo ego and choose a brand name that conveys information to customers about the benefits of the brand.

Logos and Color

Regardless of the amount of information inherent in the brand name when it is introduced to the marketplace, brand name meaning is built over time through the firm’s communications to customers. And if educating custom-ers about the meaning of brand is important, it is all the more critical in helping originally meaningless abstract logos and symbols begin to convey meaning in the mar-ketplace. As the brand name engages customers verbally, logos and packaging colors engage customers visually.

Figure 6.1 displays various ad executions for . . . what? You know the brand and the product category immedi-ately. Why? The only clues are the colors and font, yet they’re identifiable simply because you are familiar with the brand’s packaging.

Given its familiarity, just the font of The New York Times would be sufficient in its identification, as would the colorful Google font.4 Figure 6.2 shows other names that have familiar features: the colors of eBay, the subscript in Intel, the curved line in the Citigroup logo. Some logos serve as identifiers in that the brand name is prominent, but they also offer a visual cue about the line of business. For example, Figure 6.3 shows A&W with a picture of a root beer float and Disney with the Magic Kingdom cas-tle. In contrast, other logos don’t communicate as clearly

become shorthand for that brand (e.g., Nike’s swoosh and McDonald’s Golden Arches are internationally known). Some brands are closely associated with colors; for example, envision Dr. Pepper’s burgundy, Tiffany’s aqua blue, John Deere’s green, and UPS’s “What can brown do for you?”

Beyond the name and other tangible product qualities, additional associative elements may enhance the imagery and market perceptions of brands. Some originate with the company but are less definitively associated with the brand (e.g., a jingle, slogan, or spokesperson). The hope is that the catchy tune sticks in your head when you’re at the grocery store (e.g., “Ask any mermaid you happen to see . . .”) or the slogan suggests a company’s worthy mission (e.g., “GE: We bring good things to life”) or the spokes-person is admired and the customer emulates the person through the purchase (e.g., Lance Armstrong).

Some strong associations are beyond the company’s control. For example maybe your mom substituted Coca-Cola for root beer to make ice cream floats when you were a child or your soccer coach had cold Cokes waiting for the team after every game or someone called you a dork when you asked for a Coke instead of a beer at a college party.2

The company can’t control all these representations, but it can ensure that its outgoing messages are excellent and positive.

Brand Name

So let’s get down to the nitty-gritty. A brand is first and fore-most a name. Some marketers say that a brand is a sym-bol, but it first has to be a name; otherwise, how would you dot-com it or register it through Yahoo’s (or old-fashioned) yellow pages? (Admittedly, all words are sym-bols in communication, in which case brands are symbols.) Some brand names immediately convey information (e.g., the Geek Squad as the name for on-call computer and

DREKAdvertising agencies are developing scales to capture the brand’s functional and symbolic worth.

• Young and Rubicam say that a brand should help Differentiate it from competitors, provide

Relevant benefits to customers, and be held in high Esteem by customers (they should like it)

and that customers should be Knowledgeable about or aware of the brand. Yes, they use the

acronym, DREK—okay, maybe they’re not great marketers, but the criteria are still good.

• Millward Brown seeks to strengthen its brands in terms of its presence (awareness), relevance,

performance (quality), advantage (competitive edge), and bond (strong customer liking).

Don’t be dazzled by acronyms or lists. These all come down to the basics (as discussed in the

chapters on customer decision making and advertising): Customers need to have awareness (some

knowledge); trial (thus access, affordability); preference (liking); purchase behavior (repeat buyers,

word of mouth); and, if the marketing manager is lucky, strong preference indicating intense loyalty.



C H A P T E R 6 Brands 65

radio origin. It then morphed into the colorful xylophone and peacock because programs were announced, “The following program is brought to you in living color by NBC,” color transmission being an innovation at the time. The logo morphed, but NBC kept the basic heri-tage color and a stylized bird, first bringing in the brand name and then simplifying the overall design. Do you like the changes? (Does it matter? Would you avoid a company because of a logo change? Probably not.) Com-panies use brand names and logos as a shorthand means to communicate to the customer: “This is who we are. This is what we look like.”

F I G U R E 6 .1 Brand Familiarity via Color and Font

© Terri Miller / E-Visual Communications, Inc.

F I G U R E 6 .2 Brand Names as Logos

© AP Images/PRNews

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F I G U R E 6 .3 Brand Names and Symbols as Logos

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to the customer. In Figure 6.3, the logos for White Castle and the Four Seasons aren’t very effective—both feature brand names and pictures that, while clear, depict the brand name (castle, seasons) more clearly than the busi-nesses’ value proposition (food, hotel).

Some logos are more abstract. Figure 6.4 shows three logos that we know represent the entertainment industry: The MGM lion isn’t advertising a zoo, Universal doesn’t offer lessons in astronomy, and Paramount doesn’t sell mountain climbing equipment. But logos become familiar to us over time through learning and observing the mar-ketplace. For other examples, think of Honda’s “H” or the jovial picture of KFC’s late colonel. AOL’s swirl tries to connote a network connection. BMW’s encircled blue and white logo represents the company’s origins in aircraft engines (the white propeller against the blue sky behind it). Ferrari sports an equine logo, presumably depicting horsepower. (And go online to check out the New Zealand All Blacks rugby team, whose players are apparently as speedy as a quill pen.)

Companies lucky enough to survive for decades need to adapt their logos with the times. Figure 6.5 shows the NBC logo. It began as a microphone, denoting the

F I G U R E 6 .4 Brand Names and Abstract Sym-bols as Logos

© AP Images/PRNewsFoto/

Paramount Pictures

© AP Images/PRNewsFoto/Nike


Metro-Goldwyn-Mayer Inc.

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device, it’s saying that it is proud to offer these products; these products are Sony’s. And with time, customers think of the brand name as synonymous with high qual-ity. For example, “Sony is a good brand”; thus, anything that comes from the house of Sony will be good.

Brand building is based fundamentally on the pre-dictability of the item being purchased. It would be dif-

ficult for customers to say that they valued Macs if some Macs worked well but oth-ers didn’t. Brands can get reputations for being bad, but the goal of a marketer is to create a product that is high-quality and reliable. And indeed, Macs have avid fans because the Macs work not just predictably well, but fabulously well.6

When the brand name is an assur-ance of reliable quality, the customer’s decision making is made easier. There is less perceived risk associated with the choice among the products offered in the marketplace—the one with the good brand will probably be among the best. Risk, as in financial transactions, is essentially a measure of variability. Reliability is the opposite—it implies a consistency or predictability in the performance of the product. Reliability is a signal that time and again the product will

WHY BRAND?

Some pundits claim that there’s a branding backlash, that there’s a decline in branding, but they’re clearly in the minor-ity. The U.S. Patent and Trademark Office issues more than 100,000 new brands each year. The same nay-saying experts point to Americans becoming less brand loyal, but brand sup-porters say that such a trend wouldn’t necessarily imply that brands weren’t good. Indeed, considering all of these facts, one hypothesis is that the explosion of new brands means that brands are more important than ever and that compa-nies simply must hustle after the consumer share of mind.

So why do we care about brand names, logos, and colors? Brands are intended to convey information to customers. Brand names identify company production and ownership.5 For example, when Sony puts its name on a DVD player, a television set, or a portable music

For the customer: 1. Brands convey information.

2. Brands signal consistent quality.

3. Brands confer status.

4. Brands reduce customer risk.

5. Brands make many purchase decisions easier.

For the company: 1. Brands enhance loyalty.

2. Brands allow charging of premium prices.

3. Brands inoculate the company from some competitive action.

4. Brands assist in segmentation, targeting, and positioning.

5. Brands encourage channel partners’ support.

Why Brand?

If a brand implies consistency, it makes brand building a challenge for services marketing. Some services are rather standardized, so creating a service brand for a hotel chain, an airline, or even a restaurant is much the same as for tangible products. But many services are more heterogeneous due to the exchange between the customer and the frontline service provider.>> To enhance reliability and branding, service pro-

viders select high-quality employees and train these employees longer to ensure uniform interac-tions with customers.

>> Consistency across customer–employee interac-tions is enhanced if the training includes tight specifications on the service delivery processes and, on the flip side, clear strategies for service recovery should the encounter proceed less than optimally.

>> Drawing a customer experience flowchart and not-ing various metrics at each point in the process (e.g., time elapsed, customer satisfaction) can help diagnose problematic components that might be ripe for redesign. (We’ll discuss flowcharts more in Chapter 12.)

F I G U R E 6 .5 Logo Morphing

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communications in the marketplace, the customers’ expe-riences with the brand and company and competitors’ brands, and the stories other customers relate about the brand. So let’s look at brand associations.

WHAT ARE BRAND ASSOCIATIONS?

If branding begins with simple physical qualities (a name, logo, color, packaging), the far more interesting and flex-ible aspects of a brand are the intangible cognitive and emotional associations that help the customer connect to the brand.8 Marketers talk about a hierarchy of brand asso-ciations. At the bottom of this hierarchy are the concrete product attributes such as color, size, shape, and flavor. As we travel up the hierarchy, these brand attributes extend to product benefits; (e.g., this blue sweater will be flatter-ing; this size jar of salsa should be enough for the recipe; the shape of the new Ray-Bans is too boxy; the flavor of the beef at Fogo de Chão is just spicy enough). Benefits are more intangible than attributes. Emotional benefits are the next level, and they’re more intangible yet (e.g., a flatter-ing sweater is a means to the goal of being attractive; a good Mexican meal is a means to pleasing family or friends).

Strategically, the concrete features are easiest to deliver and explain to customers, but they’re also matched relatively easily by competitors. The more abstract ben-efits are values that are more meaningful to customers and easier for a company to claim as a competitive advantage, but they’re also more difficult to create.

The key brand association, at least in individualistic Western cultures, is the extent to which the customer feels a personal connection to the brand.9 For example, think of the middle-aged man who rides a Harley— who deludes himself: “I’m a maverick, if not at the office, then on my ‘hog.’” Brands aren’t just extensions of the customer; they are also expressions of the customer’s ideal self. A brand carries a promise that it can help customers achieve the persona to which they aspire. The idea of brands func-tioning as tools of aspiration begins with childhood, when children believe that their popularity and acceptance are partly a function of wearing the right athletic shoes or lis-tening to the right music on the right MP3 player. Adults may deny that they use brands in a similar manner, but why do they attend certain schools, drive certain cars, or wear certain designer clothing and shoes?

Brands can also serve other social functions. Brands can become the focal point of bonding, and marketers are increasingly studying brand “communities”—the well-known Harley treks, people who attend Saturn rallies, Mac user groups, Lego clubs (http://club.lego.com), European car clubs, or even traditional fan club sites (e.g., hundreds for

perform to quality standards; over time and for different customers, the product performs with little variability and is of high quality. So the brand is a known entity. Customers can count on it to perform as expected.

It is also clear that many brands serve as status sym-bols. The reason there are knock-off designer handbags or watches is because some people think it’s cool to own one; yet the prices of the genuine articles are out of reach for many consumers. The reason Mercedes and BMW make entry-level cars is because young, successful people want to show the world they’ve “made it” while paying as little as possible to own a piece of the brand. The prestige of such brands bolsters the consumer’s self-image.

Those are the benefits of branding for customers, but brands bring rewards to their companies too. Good brands can induce loyalty.7 Repeat purchasing might be due to inertia, whereby the customer just reaches for the familiar (brand name, package, logo, color). If the brand is known to be high-quality and reliable (not risky), the brand choice is easy to justify and customers don’t have to think about the purchase or brand choice anymore. Repeat purchasing and true brand loyalty can also be a more mindful process, whereby a customer returns to a brand because, quite simply, he or she likes it. When the purchase satisfies the customer, the brand’s superior image is solidified.

To a company’s delight, most customers are willing to pay premium prices for brands they value. Customers so appreciate the reliability, high quality, and status that they’re less price-sensitive, knowing that they’re getting something good even if they’re paying somewhat more.

Companies can also use brands (or variants of their brands) to provide different offerings to satisfy different market segments. For example, Porsche’s 911 sells pre-dominately to men (92%) who are 52ish with a household income over $300,000. Porsche’s Boxster profiles slightly younger (47ish) and more to women (30%) (porsche.com/usa; forbes.com). These different car lines allow the macho 911 driver not to be offended by infiltrating women who are buying the sister model.

How does a brand name come to convey meaning, imply quality and consistency, reduce the riskiness of and ease decision making, induce loyalty, achieve presti-gious status, and command higher prices? Brand associa-tions give brands meaning in the customer’s mind. These associations are created through a number of sources: They’re built from the company’s advertisements and

Branding is beneficial to both customers and

businesses.




activate than those most closely and directly associated with the brand. Thus, while Figure 6.6 indicates that Crest is per-ceived to be expensive, that attribute is unlikely to be one of the first qualities conjured up when the Crest brand name is stimulated. In addition to memory implications, there are attitudinal ones as well.11 For example, measures of cus-tomer satisfaction with the brand are most heavily affected by the positivity or negativity of the nearby links.

Harry Potter). Fan dedication can be rabid (e.g., people talk about loving brands).10

All of these con-nections can be depicted, as shown in Figure 6.6, in a brand association network. The nodes in the net-work include elements such as the brand name (and perhaps the company and com-petitors) and attributes and abstract benefits about the brand. The links between the nodes indicate some connection (unlinked nodes have no connec-tion or the connection is weak), and strong links can be depicted with bolder lines.

This mapping is not meant to be a literal representa-tion of what customers have in their heads, and yet it’s not a bad metaphor. In memory, we have stored a lot of informa-tion about a brand, and when the brand name is activated (e.g., through advertising), the brand associations are subse-quently (even instantaneously) triggered (as if brand infor-mation were jumping across neurons). Links that are farther from the brand may take milliseconds longer to retrieve and

Crest

Crest Whitestrips

Crest toothpaste

Mom

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Dentist

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F I G U R E 6 .6 Brand Association Network

Branding cities and countries is becoming increasingly popular as destinations seek more tourism and business investment.

> Atlanta is branding itself “The ATL.” ATL wants to remind you that it is the eighth largest media market, and the metro area has 4 million people. Atlanta is not just Coca-Cola and CNN; it’s not just Gone with the Wind and traffic jams. Atlanta’s working slogan is “Opportunity, Openness, Optimism.”

> Estonia (the real country, not the one in Dilbert) is aiming for a greater international presence toward increasing its export business as it grows in independence from the Soviet Union.

> Scotland, through its tourism agency VisitScotland.com, is running ads to attract European visi-tors, especially visitors from France, Germany, and Spain. It conducted interviews to gain and relay tourist stories:• “I spoke to a lovely lady, thought she was the gardener, but turned out she owns the castle.”• “Got stuck in a herd of sheep—the Scottish way to slow down your life.” (For more, see

www.quirks.com.)> Sweden and the Netherlands are small, homogeneous countries (9–10 million people) that are

interested in building up technology and entrepreneurship. They’re emphasizing their fluency in English and good working relations with U.S. business partners.

> Toronto has ongoing “Toronto Branding Project” and “Toronto Unlimited” to increase global travel and business participation, and it is revitalizing and expanding arts centers to actively enhance its “product.”




often how companies are structured, that is, a category manager overseeing several brand managers, each of whom in turn oversees several product lines within the master brand.

In addition to relatively classic studies of brand associ-ations to understanding customers’ memory and attitudes, recent research has examined two special classes of brand associations: brand personalities and brand communities. We’ll look at each.

Brand Personalities

One way that marketers get customers to relate to their brands is by creating a brand “personality.” Some of these are obvious—the machismo of the Marlboro man and the cuddliness of the Pillsbury Doughboy. Other brands have distinct personalities even if they are not personified. For example:

>> MTV is not just a music cable station—it’s a way of life for young, cool people.

>> A Coach bag depicts a step for a young woman in the course of her professional life.

>> Dockers are avoided by a young man because his dad wears them.

>> Betty Crocker is more than cake and brownie mixes—it’s a way to achieve the goal of taking care of one’s family and giving them sweet treats.

>> Jiffy Lube changes your car’s oil quickly and conve-niently, and in doing so, it helps ensure your safety and a healthier environment. It’s not just “an oil change”; it’s Jiffy Lube!

When company advertising emphasizes one benefit, the cognitive maps may be simple (e.g., Volvo linked with safety and perhaps little else and Nordstrom linked pri-marily with good customer service). If those solitary links are strong and positive, the focused message has been delivered and the position of the brand in the marketplace will be clear. Networks can be more complex due to a long heritage in the marketplace (e.g., McDonald’s may be linked to fries, quick service, inexpensive meals, the “two-all-beef-patties” jingle, road trips, concerns about fatten-ing foods) or due to inconsistent advertising messages or customer experiences.

Increasingly, researchers also gather information about customers to impute into these maps. These personal attri-butes might include purchasing history, social qualities, and aspirations (e.g., traits they strive for or groups they’d like to be affiliated with). A company has the customer hooked when the brand seems integral to the customer’s life.12

Marketers also think about memory as being stored hierarchically, as depicted in Figure 6.7. In this diagram, oral hygiene is the highest node, or the most abstract goal that is achieved via the use of mouthwash, toothpaste, floss, etc. The toothpaste category is further broken down into brands and attributes.

The models in Figures 6.6 and 6.7 are alternatives, both simply intended to be helpful. The layout in Fig-ure 6.6 is appealing because it serves as a metaphor to the consumer’s brain—with the brands and attributes being the neurons and the associations being the jumps over the synapses between neurons. The layout in Fig-ure 6.7 is appealing because it shows how brand man-agers think about product category management—and

Oral hygiene

Mouthwash Toothpaste Floss Etc.

Aim Crest Colgate

Crestcavity control

This map of cognitive and affective brand associations is a hierarchically structured model of memory. The brand Crest existsat a certain level in the hierarchy, side-by-side with other brands. Higher levels in the hierarchy are more aggregate (e.g., the product category). Lower levels in the hierarchy represent brand features.

Cresttartar control

Crest Whitestrips,& previous network

F I G U R E 6 .7 Hierarchical Memory Storage of Brand Information




Brand Communities

Most brands speak of engaging customers’ hearts and minds, but increasingly marketers are seeing extremes.14 Some customers are so passionate about their love for certain brands that they want to connect with other like-minded customers. Whether these brand communities take the form of blogs or are as extreme as the Harley Owners Group (yes, with the acronym HOG) and its posse rides and touring rallies, customers are uniting over brands. There are brand communities around European car clubs, Harry Potter, Xena, Tom Petty, and Nike.15 Currently, marketers don’t quite know how to respond to these communities (other than try to engage them in viral campaigns). Will the communities enhance the bottom line? Stay tuned—the jury is still out on that.

Next, we turn to the more macro, corporate topic of branding strategies. That is, what might we do with all our knowledge of our customers’ brand associations?

WHAT ARE BRANDING STRATEGIES?

There are several important branding questions that a com-pany needs to answer as part of its overall marketing strategy. First, will the company offer multiple products under the same brand name, or will it roll out the products with distinct brand names? Second, what are the purposes of brand exten-sions, line extensions, and co-branding? How is brand equity determined and valuated? How are brands best rolled out globally? What is the role of a store brand? We’ll examine the factors that affect the answers to each question.

Umbrella Brands vs. House of Brands

Most companies start by offering a single product in the marketplace. The brand name might be the company name. As the company adds products, it must decide whether it should put the corporate name on every new product or choose new brand names for subsequent products.

A company that attaches the same brand name to all of its products is using an umbrella branding approach.16 For example, Honda makes cars, motorcycles, and lawn mow-ers and calls them all Hondas. Nike makes athletic shoes, sports jerseys, gym bags, and other products, all of which bear the same company brand name and swoosh logo. All of HP’s products say HP. Canon’s cameras and photocopiers say Canon. GE puts its corporate brand on its diverse lines of appliances, lighting, financial services, and engines.

In contrast, a house of brands approach is used when a company introduces a new brand name for every major line of product it brings to the marketplace.17 Procter &

In Figure 6.8, we see a conceptualization of five different kinds of brands, from rugged to sophisticated, competent to exciting, and sincere.13 The personalities capture something specific about a brand or something holistic about the brand and company position in the marketplace. For example, when customers say that Pepperidge Farm is sincere, the customers mean partly the cookies (e.g., the company would use only quality ingredients) and partly the company (e.g., those ingredients come only from fair trade sources).

None of the personality profiles are better than the oth-ers; they’re just all different. If the brand strategy was to attain a certain personality and the strategy succeeded, the branding and marketing efforts succeeded. If the brand man-ager doesn’t like the brand’s current description, new brand-ing and marketing efforts may be initiated to reposition the brand. For example, it might seem more fun for eBay to be classified as exciting than IBM being classified as competent, but competent is as good as exciting; it’s just different. There is a lot of space and reward in the marketplace for competent. IBM would lose its “IBM-ness” if it aimed to be “exciting.”

F I G U R E 6 .8 What Type of Brands Are There ?

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Saks Fifth Avenue

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Bentley Motors, Inc.


Cole Haan

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L.L. Bean

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Deere & Co.

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Worldwide Inc.

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Verizon Wireless and Motorola, Inc.

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Sincere:




Brand Extensions, Line and Product Category Extensions, and Co-branding

Brand extensions are a strategic use of a brand’s equity in which the marketer leverages the brand’s good name to get customers to buy something new.19,20 Recall the breadth and depth dimensions of product lines from Chapter 5; here too the brand name may be applied within a product line to go for depth—these are called line extensions—or the brand name may be applied across different kinds of products—these are called product category extensions.

Figure 6.9 illustrates brand extensions in the direc-tion of breadth (product category) and depth (line) in a familiar context. Swiss Army begins with a simple knifecontraption. The vertical21 or line extensions provide both simpler and more complex knives. The horizontal or prod-uct category extensions are Swiss Army’s successful ven-tures into other arenas—watches, luggage, and more.

Here are examples of brand extensions intended to deepen a product line: QuickBooks has its basic software; a version for Macs; another for small business needs; and premier packages for professionals, nonprofits, and retailers. The software does the same thing, but for dif-ferent host machines, and it’s all called QuickBooks. L’Occitane offers bubble bath and moisturizer lotions. Its new product introductions are based primarily on new scents, and each shares the L’Occitane brand name, which lengthens the product line further. New flavors offered by Pepsi (diet, vanilla, lime, twist, wild cherry, one), Quaker Oats (oatmeal, toasted oatmeal in brown sugar or honey nut, oatmeal squares in brown sugar or cinnamon), and Ben & Jerry’s (Jamaican Me Crazy, Neapolitan Dynamite, Turtle Soup, Black and Tan) all

Gamble is a well-known house of brands. It produces some eighty major brands, including Charmin, Crest, Dove, Head & Shoulders, Ivory, Pantene, Pert, Scope, and Sure, and no connections among the brands are made apparent to the customer. In B2B, DuPont has a portfolio of brands: Kevlar, Kalrez, Lycra, Teflon, Thinsulate, and Stainmaster.

Each approach has strengths (and liabilities). With an umbrella branding approach, once the company has estab-lished the key brand name in the marketplace, subsequent product introductions, which share the same brand name, are easier for the customer to understand and accept. The new product line will begin with higher-than-usual levels of awareness, and it will share some of the brand associations with the existing branded products. Given that the two products share a brand name, there will be a great degree of overlap between two different products’ associations. Thus, it is critical that the majority of the existing brand’s associations be positive; otherwise, the new product will be introduced to the market with a perceived handicap.

In contrast, given the nature of the multiple brands’ autonomy in the house of brands approach, the indepen-dence between brands ensures that any problems with one brand shouldn’t negatively affect any of the other brands. Even if a brand isn’t in the spotlight for being problem-atic (e.g., tires that blow out, beverage bottling problems, over-the-counter weight control pills that cause heart problems), a company with multiple brands almost surely is watching those brands from different points in their life cycles. A brand whose image is waning is less a liability in a house of brands where the names aren’t shared across the product lines. A more positive version of this brand independence is that the brand images need not be consis-tent, allowing the company to reach multiple segments. For example, Marriott’s portfolio has Courtyard and Fairfield to serve one part of the market and The Ritz (without the Marriott name) as the higher-end offering; there is no con-fusion with either segment, and neither segment of hotels provides an experience that the other segment offers.

Evidence suggests that compared to the house of brands approach, the umbrella branding strategy provides stronger financial outcomes to the company.18 One rea-son is that certain costs are cut. For example, the house of brands approach requires more advertising to build the multiple brands’ equity, whereas advertising for the umbrella brands builds the shared brand name synergisti-cally across the products. In addition, psychologically, cus-tomers seem to build stronger connections to the specific concrete product; thus, the customer thinks positively about Ivory without necessarily considering anything about its manufacturer, P&G. For umbrella branders (e.g., Nike), the product-level associations replicate the same name across multiple products (Nike shoes, Nike gym bag); thus, the attitude is reinforced (Nike, Nike, Nike), in turn enhancing brand loyalty.

Product CategoryExtensions:go for breadth

Line Extensions:go for depth

Breadth

Dep

th

Watches Messenger Bags,Luggage

Sentry, Boy Scout

Signature

SwissChamp XLT

F I G U R E 6 .9 Brand Extensions

© Bomshtein/Shutterstock.com © Terri Miller/E-Visual Communications, Inc.

© cyrus bharuha/Shutterstock.com © MCT/Newscom © 8781118005/Shutterstock.com




crossed product categories (breadth) and may have pulled the company out of its competence zone.

The difference is a mat-ter of degree: A slightly new model twist may be going for depth; a vastly different model/product extends the breadth. Per the logic previ-ously described, VW might have launched a high-end car without reference to the umbrella VW brand name, allowing the car to achieve greater independence as a new brand in the house of VW. Instead, if VW had kept its imprint on such a high-end car, the company’s chal-lenge would have been to impress potential luxury car buyers and previous own-ers of Infinity, Lexus, and BMW with the knowledge that VW, a brand known for good but admittedly more

modest cars, could pull off the luxury positioning.Industry studies show that the vast majority of prod-

ucts introduced to the marketplace are merely new sizes or new packages for existing brands, with the occasional “new and improved” formulation. As the changes from the parent brand become more dramatic, the marketer must consider not only how customers will accept the new product but also how customers’ perceptions about the company’s current products and brands may change. A

fall under the rubric of brand extensions that deepen a product line offering.

Here are examples of brand extensions intended to broaden the number and types of products a company makes available to the market. Arm & Hammer was just baking soda for a long time; then it took its freshness value proposition—and brand name—to offer toothpaste, deodorant, carpet deodorizer, kitty litter, and laundry detergent. Amazon.com has extended from books and CDs to DVDs, electronics, games, drugstore goods, computers, furniture, clothing, jewelry, and more, as well as services (registries, auc-tions) and information (yellow pages, movies, travel), all of which have the Amazon imprint.

Sometimes the distinction between a brand and line extension isn’t clear. Car models can work like either a brand or a line extension. For example, VW has long been positioned as produc-ing reliable, relatively inexpensive, small cars (the Beetle, the Golf), and these might be considered brand extensions that extend the line (depth). But when VW introduced the Phaeton model, the company was dipping its corporate toe into the luxury car pool, an altogether different busi-ness venture targeting a segment with different needs. And given Phaeton’s sales performance, VW had to reconsider that brand extension—it

Luxury BrandsDo you really need a definition of “luxury brands ”?

• Some say that for luxuries, the “ratio of functionality to price is low” and the “ratio of intangibles

and situational utility to price is high.”

• Others say “the price is greater than that of products with similar tangible features.”

• Still others say that luxury goods and services help us express our ideal selves.

• Traditionally, luxury brands have evoked exclusivity, but with the rise in (admittedly disparate)

wealth, there is a trend toward the democratization of luxury.

• Marketing researchers evaluate luxury brands on dimensions such as conspicuousness of the

purchase, uniqueness, quality, and hedonic properties.

• Characterization of luxury is not solely monetary. For example, a Rolex costs less than a Mer-

cedes-Benz, but the former is more “conspicuous” than the latter. In turn, while Mercedes and

Porsche are similar on quality and uniqueness, Mercedes is more conspicuous, making it more

of a luxury brand than Porsche.

• There are also segment, cultural, and distribution moderators (e.g., Levi’s rates high as a luxury

brand for Australian students).

For more information, see research by Professors Lester Johnson (Melbourne Business School),

Franck Vigneron (Cal State), and John Quelch (HBS).

Most co-branding examples lean toward being ingredient branding.

> United Airlines serving Starbucks coffee and Mrs. Fields cookies

> IZOD polo shirts made of 100% Peruvian pima

> Laptops with a label stating the processor is Intel

> Soft drinks and sweet treats labeling branded ingredients of NutraSweet and Splenda

> Finally, consider this battle among cars and their contents:• Lexus cars contain Mark Levinson audio systems• Aston Martins carry Linn• BMWs contain iPods• Bentleys provide Breitling clocks

(Find more at www.trendwatching.com.)




How Are Brands Best Rolled Out Globally?

First, what is a global brand? To be defined as a global brand, at least 30% of the brand’s revenues should come from other countries (no more than 70% from the brand’s home country).

Second, how do we roll out global brands? Analogous to the house of brands vs. umbrella branding decision, some companies go global with different brand names in different countries, with the motto “manufacture globally, brand locally”—the so-called philosophy of globalization. Other companies maintain the same brand name in every country they enter.

Just as it was said to be typically more advantageous to choose the umbrella path vs. the house of brand path, here too there appears to be greater advantages to main-taining a single brand name worldwide if possible. A true global brand (and perhaps not surprisingly or coinciden-tally, the biggest brands) carries one brand name and logo everywhere it is offered, and it is available in most markets in the world. Amazon.com looks just like amazon.co.uk, for example, and google.com looks like google.fr (although check out msn.com vs. msn.nl). There are corporate effi-ciencies to using the same brand information, commu-nications, and strategies. Strictly speaking, true “global brands” seek, achieve, and maintain similar positioning in all their markets.

consumer may believe that Honda, a company with a rep-utation for making reliable cars, has the proper mechani-cal experience to make good lawn mowers. But if Honda were to begin manufacturing soft drinks or blue jeans, the company wouldn’t have any credibility—this doesn’t mean it couldn’t be successful in either of these new ventures, only that the new product lines would clearly be more of a leap.22 This concern for carryover attitudes and implica-tions is particularly strong for brand extensions with an umbrella brand naming strategy; it is less a concern for line extensions under a house of brand naming approach.23

Co-branding is when two companies collaborate in a joint venture to create a good or service for thecustomer—“brought to you by” both companies. Ingredient branding is the primary form of co-branding in which one of the companies and its product is the primary host and the other company and its product add value to the host prod-uct. The distinction between co-branding and ingredient branding is one of degree—co-branding implies symmetry between the two providers, whereas in ingredient branding, one brand dominates the other. Marketers have claimed, for example, that American Airlines serving Pizzeria Uno is an example of co-branding. Perhaps that is the case, but clearly the airline is the primary host. The customer boarded the airplane to travel somewhere, not to eat pizza. But the branded pizza was a nice value-added, so this might be a better example of ingredient branding. Purer examples of co-branding are those where one product seems more inte-gral to the other (e.g., Cole Haan shoes being offered with Nike Air technology).

Marketers might go fur-ther and begin to brand one of their own ingredients to differentiate its quality from that of competitors. When a company is launching a rela-tively minor change, such as tweaking a current attribute (e.g., a new scent for an exist-ing laundry detergent), co-branding (namely, ingredient branding) might be fine for the short term, but in the long term, a self-brand is bet-ter (e.g., Tide’s “EverFresh” scent). When the new prod-uct innovation is greater (e.g., involving an altogether new attribute, such as add-ing cough relief medicine to candy), co-branding is better, providing strategic benefits in the short and long terms.24

Legal StuffA trademark is the legal ownership of identity—a trademark can include just the brand name; just

the logo; or, more inclusively, the name, logo, phrases, symbols, design, colors, sounds, etc.

Claims of trademark “infringement” occur when a “me-too” competitor develops part of its

brand identity too similarly to an extant trademark, which may lead to customers purchasing the

“me-too” rather than the original brand out of confusion.

The symbol TM essentially means “hands off—these are our ideas.” (Trademark rights are

claimed.) When TM graduates, it becomes ®, a more serious designation that means “hands off or

our lawyers will get you.” (The trademark has been registered.)

If you want to use a word as a brand name that prior to your use had no particular inherent

meaning, such as Geico (before the insurance company), you get a “fanciful” trademark. If you want

to appropriate a word with common meaning, such as Amazon, you file for an “arbitrary” trademark.

Finally, “suggestive” trademarks are those for which the brand name suggests the customer benefit

(e.g., Jiffy Lube).

With time, what had been company property can change, especially, perversely, if the brand

becomes “too” successful. For example, Aspirin had been a trademark of Bayer, but the name is

now deemed so generic that other pain relievers can also be called “aspirin.”

Trademark issues arise online in the form of domain names and ownership. Generic names

cannot be defended as registered.

Laws in different countries vary wildly, but services are available that search for prior brand

elements (brand names, slogans, etc.) to see if they’re free of TM or ® (e.g., in the states, via the U.S.

Patent and Trademark Office: uspto.gov).




aggressive deal demands, the manufacturers aren’t going to sit still, of course. Premium (“real”) brands are launch-ing their own second label, priced near the store label to provide an alternative to the price-sensitive customers, rather than losing their product to the store brand (or other competitors). Then what do the premium brand manufacturers do? They raise the price of their original premium brand.27

It’s also important to note that if brands represent cul-ture, then non-branded goods are embraced by various countercultures. Free spirits from skateboarders to yogis to Burning Man attendees eschew big national brands due to the commercialism they represent.

HOW IS BRAND EQUITY DETERMINED AND VALUATED?

In recent years, the popularity of branding, coupled with factors that have required marketers to be more account-able for their marketing expenditures and programs (e.g., slow economy, intense competition), has resulted in a number of efforts to measure the worth of a brand.28

Figure 6.10 lists the top 20 U.S. and non-U.S. brands as reported annually by Business Week. Do any of the brands on the list surprise you? Are there any parame-ters on which these aren’t great companies or brands? If Coca-Cola were to slip to #10 in next year’s poll, would you really consider it a lesser brand?

The ranking in Figure 6.10 uses Interbrand’s method. (See www.interbrand.com for details.) How are those ranks determined? When Rolls-Royce sold its brand to BMW

If a company wishes to serve different kinds of cus-tomer segments in different markets, it will opt to use different brand names in those different markets. For example, one of the functions of a brand name is quality assurance, but quality per se might be of varying impor-tance depending on the culture, segment, or product. And, of course, some brand names simply do not trans-late well. Finally, there may be legal restrictions curtail-ing certain marketing activities and even brand names (e.g., Diet Coke vs. Coke Lite) that vary with country. Still, these admittedly big caveats aside, the top market-ing thinking seems to be to use the same name globally if you can.25

Store Brands

What’s the role of store brands? Don’t laugh; although the term sounds like an oxymoron, store brands are big business. The traditional idea behind private labels is that they’re less expensive and more of a “me-too” product offering than an innovative brand. Most people are price-sensitive in product categories that they usually don’t care much about and price-insensitive when purchasing other brands. Some customers seem to be price-sensitive across the board—customers with a “cheap” gene, a broader trait or propensity to go for store brands across numer-ous categories (or they’re simply dealing with limited resources).26

Cost savings for customers isn’t the only motive. Retailers are also offering premium private labels. Tra-ditionally, generic (non)brands were packaged unattrac-tively and considered lesser quality, but these days the packaging and quality are usually on par with the national brands—many customers don’t know the store brand is a store brand. Walmart’s brand of “Sam’s Choice” might be an obvious name, but consider Safeway’s “Eating Right,” Target’s “Archer Farms,” Kroger’s “Private Selection,” and Costco’s “Kirkland Signature.” These are high-end or specialty products made available at “value” prices.

The retailer can offer decent quality for lower prices because certain costs are reduced (e.g., it can advertise inexpensively in local newspaper flyers and on the radio); it’s easy to promote the brands in-store as well. Thus, to the customer, if it looks like a brand and smells like a brand, then it must be a brand. And if it’s a brand, it might be of high quality. As is always the case, advertising encourages trial, but the quality of the product determines satisfaction and repeat purchases by consumers.

There are a lot of private label and pricing games going on in retailing. Retailers naturally want shoppers to buy their brands, and given retailers’ tremendous growth in power, they have been demanding better pack-age deals from other source manufacturers. Between the added competition (including the store brands) and the

Country of OriginSeparate from the particular brand name, the brand’s country of origin has an impact on the customer’s per-ceptions too.

• Many Chinese brands, or products with the generic “Made in China” label, suffer from negative con-notations; in particular, customers think the product will be cheap, inferior, unreliable, worthless, and unsophisticated. (For more, see interbrand.com.)

• Notwithstanding some global backlash from political pursuits, U.S. brands tend to fare well, where the country of origin implies money, freedom, and the pursuit of happiness. (For more, see brandchannel.com.)




costing $799 with a screen within a screen and holograph projection? vs. How much do you like this unknown brand flat screen costing $799 and sharing the same features as the Sony product?).

Essentially, the Interbrand method assesses the value of a firm, subtracts its physical and financial assets, and calls the rest “the value of the brand.”29 That’s a little simplistic in that although this calculation exposes a firm’s intangibles, there are other intangible assets beyond the firm’s brand (e.g., real investments in human resources or R&D such as patents); so brand valuation companies still have to tease out the effect of the brand. These days an estimated 50% of a typical firm’s value is determined by intangible assets, including its brand names. It may be challenging to estimate the value of those intangibles, but it is certainly done—so it must be done well.

So how to actually do it . . . Figure 6.11 tracks the fol-lowing computations. First, find this year’s annual report for your favorite brand and pick the number represent-ing the operating earnings that the brand generated (e.g., a corporate earnings number for an umbrella brand or a brand number for a brand in a house of brands). Say you find that the net sales figure is $25,000,000 and the operating earnings figure for that brand is $7,000,000. Those earnings are taxed (say 25%), so subtract the taxes (�$1,750,000). If the tangible capital figure is $12,500,000, multiply it by a rate of return of say 6% (a little conservative) and subtract this $750,000. The result is the figure for the earnings based on intangibles.

The next step is the magic of teasing out the brand effect. Interbrand estimates that brands are very impor-tant for perfumes (e.g., 90% of a firm’s intangibles may be attributable to its brand), less important for cars (40%), and still less important for retailers (20%). When this “brand contribution index” is used as a multiplier against the intangibles, we derive the proportion of those intangi-ble earnings that we may claim are due to the brand—we have an estimate of the brand value.

for $60 million, where did that number come from? Let’s see what goes into the consideration of a brand’s value.

Basically, the idea in brand valuation is to derive mea-sures that translate as best as possible into a financial vocabulary. The reasoning seems fair and sound—if mar-keters argue that their brands are assets, then they should be able to attach a monetary-like figure to that worth.

Some of the numbers that enter into these calculations are available in public firms’ annual reports. Other num-bers are obtained from customer survey data. Still other numbers are proprietary to the firms doing the calcula-tions, such as Interbrand.

One approach is to find out what sort of price pre-mium the brand can demand. Marketers can run a con-joint study that features brand as an attribute (e.g., Shell Oil vs. “unbranded fuel”). Price can be one of the other attributes, or it can be what is measured (e.g., How much are you willing to pay for gas at a Shell station? vs. How much are you willing to pay for gas at a local gas station?). (We’ll say more about con-joint in Chapter 7 on new products, and way more in Chapter 13 on marketing research.)

A related approach focuses less on the price per se and more on comparing the brand with an unbranded form of the prod-uct. Other than brand name, the products are matched feature for feature. Preferences and customer choices are measured (e.g., How much do you like this Sony flat screen

U.S.

• Coca-Cola

• Microsoft

• IBM

• GE

• Intel

• Disney

• McDonald’s

• Marlboro

• Citi

• Hewlett-Packard

• American Express

• Gillette

• Cisco

• Dell

• Ford

• Pepsi

• Merrill Lynch

• Budweiser

• Oracle

• Nike

Non-U.S.

• Nokia

• Toyota

• Mercedes-Benz

• BMW

• Louis Vuitton

• Honda

• Samsung

• Nescafé

• Sony

• HSBC

• Canon

• SAP

• IKEA

• Novartis

• UBS

• Siemens

• Gucci

• Nintendo

• L’Oreal

• Philips

F I G U R E 6 .10 Top Brands

Work sheet Numbers neededa) net sales (revenue for the brand) $25,000,000b) operating earnings $7,000,000c) tax on earnings 25% � b �1,750,000d) tangible capital $12,500,000e) rate of return 6% � d � 750,000f) intangible earnings $4,500,000

g) brand contribution index (bci) 40%*h) brand earnings g � f $1,800,000

* depends on product category

F I G U R E 6 .11 Brand Valuation




marketers find clear evidence of strong positive relation-ships linking brands to shareholder value.

Strong brands deliver greater returns—and with less risk (the classic desired state: higher means, lower vari-ance) than comparable benchmarks.30 Marketing matters. Brands make companies financially healthy.

The method is not perfect, and the proprietary nature of the indices is annoying. But because work in the area of brand valuation is new, look for better developments soon. Regardless of any of the methods’ shortcomings, when customers’ judgments of numerous brands are gathered and the data are correlated with companies’ financials,

E n d n o t e s

Francesca Riley (Kingston U); Metka Stare, Andreja Jaklic, and Patricia Kotnik (U Ljublijana, Slovenia); Michaela Wänke (U Basel); Andreas Herrmann and Dorothea Schaffner (U St. Gallen); and Asli Tasci and Metin Kozak (Mugla U, Turkey).

7. See research by Professors Arun Chaudhurit and Morris Holbrook (Columbia) and Piyush Kumar (U Georgia).

8. See research by Professors Jennifer Aaker and V. Srinivasan (Stanford), Jennifer Chang Coupland (Penn State), Susan Fournier (Dartmouth), Gita Johar (Columbia), and Jaideep Sengupta (Hong Kong U Science & Technology).

9. In the traditionally more “communal” cultures (e.g., much of Asia and South America, some southern European and Middle Eastern states), brands are a means of group homophily or affiliation, a means to acceptance by others.

10. See research by Professors René Algesheimer (U Zurich), Utpal M. Dholakia (Rice U), Andreas Herrmann (U St. Gallen), Catherine Yeung (National U Singapore), and Claudiu Dimofte (Georgetown).

11. Although advertising companies do care about memory (e.g., they measure “day-after recall” of aired commercials), they care more about attitudes about the ad and brand.

12. See research on self-brand connections by Professor Jennifer Escalas (Vanderbilt), Mirella Kleijnen (Vrije Universiteit Amsterdam), Ko de Ruyter (Maastricht), and Tor Andreassen (Norwegian School of Management).

13. See research by Professor Jennifer Aaker (Berkeley).

14. Check out www.manutd.com for Manchester United’s “Official Website for the World’s Most Popular Football Team.”

15. See research by Professors Rene Algesheimer (U Zurich), Neeli Bendapudi (OSU), Venkat Bendapudi (OSU), Utpal Dholakia (Rice U), Jennifer Escalas (Vanderbilt), Henry Fock (Chinese U Hong Kong), Kent Grayson (Northwestern), Andreas Herrmann

(U St. Gallen), Michael Hui (Chinese U Hong Kong), Harold Koenig (Oregon State), Clinton Lanier (U Nebraska), James McAlexander (Oregon State), Albert Muniz (DePaul), Thomas O’Guinn (U Illinois), Ann Morales Olazábal (U Miami), Stefania Ordovas de Almeida (U São Paolo), Hope Jensen Schau (U Arizona), John Schouten (U Portland), Silvia Vianello (U Ca’ Foscari di Venezia), and Ka-shing Woo (Aston U).

16. Marketers like making up new jargon: Umbrella marketing also goes by the terms corporate branding, franchise branding, family branding, and monobranding.

17. This strategy also goes by other names, including multibranding.

18. See research by Professors David Reibstein (Wharton), Vithala Rao (Cornell), and Manoj Agarwal (Binghamton U).

19. Brand extensions are also often referred to as sub-brands. There’s a great deal of work on brand extensions: See research by Professors Joe Alba (U Florida), Subramanian Balachander (Purdue), Michael Barone (Iowa State), Paul Bottomley (Cardiff U), Sheri Bridges (Wake Forest), Roderick Brodie (U Auckland), Susan Broniarczyk (U Texas), Tom Brown (Oklahoma State), Peter Dacin (Queen’s U), Niraj Dawar (U Western Ontario), Richard Fox (U Georgia), Sanjoy Ghose (U Wisconsin), Paul Herr (U Colorado), Stephen Holden (Bond U), Chris Janiszewski (U Florida), Christopher Joiner (Kansas State), Jung Keun Kim (Korea U), Amna Kirmani (SMU), Barbara Loken (U Minnesota), Michael McCarthy (Miami U), Tom Meyvis (NYU), Sandra Milbey (Georgetown), Maureen Morrin (Rutgers), James Oakley (Purdue), C. W. Park (USC), Jong-Won Park (Korea U), Martin Pickering (U Edinburgh), Srinivas Reddy (U Georgia), Deborah Roedder John (U Minnesota), Henrik Sattler (U Hamburg), Daniel Smith (Indiana), Sanjay Sood (UCLA), Andrew Stewart (U Manchester), Patrick Sturt (U Glasgow), Vanitha Swaminathan (U Pitt), Alice

1. Thanks to Professors Harry Harmon (U Central Missouri), Ann Little (High Point U), Chip Miller (Drake U), James Oakley (Purdue), C. W. Park (USC), Anthony Peloso (ASU), and Donald Shifter (Fontbonne U) for their helpful feedback. The big shots in branding are Professors David Aaker (Berkeley), Jennifer Aaker (Berkeley), and Kevin Keller (Dartmouth). Also see research by Professors Stephen Ball (Sheffield Hallam U), Karen Becker-Olsen (College of New Jersey), Susan Broniarczyk (U Texas), Pierre Chandon (Insead), Leslie de Chernatony (The Open U), Singfat Chu (National U Singapore), Colin Clarke-Hall (U Gloucestershire), Andrew Gershoff (Columbia), Peter Golder (NYU), Ronald Paul Hill (Villanova U), David Hillier (U Glamorgan), Peter Jones (U Gloucestershire), Hean Tat Keh (Peking U), Deirdre O’Loughlin (U Limerick), Debanjan Mitra (U Florida), Patrick Moore (Western Kentucky U), Francesca Dall’Olmo Riley (Kingston U), Michelle Roehm (Wake Forest), Peter Shears (Plymouth U), Sanjay Sood (UCLA), Isabelle Szmigin (U Birmingham), L. Turley (Western Kentucky U), Peter Turnbull (U Birmingham), and Alice Tybout (Northwestern).

2. Hey, it’s a compliment—dorks rule the world! 3. And the urgent nature of many computer and

tech problems is captured in their naming their distribution channels in Best Buy stores as “precincts.”

4. Businessweek.com identified Helvetica as the font common to several companies’ logos: American Airlines, BMW, Jeep, Lufthansa, Microsoft, Panasonic, Sears, Staples, and 3M.

5. Think of the original iron “branding” on cattle to discourage poaching from herds. See research by Professor Barbara Stern (Rutgers) on historical (even ancient) uses of the term brand.

6. Also see research on branding services by Professors Leonard Berry and Sandra Lampo (Texas A&M); Leslie de Chernatony (Open U);




see research by Professors Geraldine Henderson (Northwestern); Piyush Kumar (U Georgia); Maureen Morrin (Rutgers); Allard van Riel, Jos Lemmink, and Hans Ouwersloot (Maastricht U); and Marieke de Mooij (Cross Cultural Communication Co.).

24. See research by Professors Kalpesh Desai (SUNY, Buffalo) and Kevin Keller (Dartmouth).

25. See research by Professor David Reibstein (Wharton).

26. So found Professors Karsten Hansen (Northwestern), Vishal Singh (CMU), and Pradeep Chintagunta (U Chicago).

27. See research by Professors David Dunne (U Toronto), Tulin Erdem (Berkeley), Chakravarthi Narasimhan (Washington U), Ana Valenzuela (San Francisco State), and Ying Zhao (Hong Kong U Science and Technology).

28. Thank you, Rajesh Bhargave, doctoral student at Wharton, for research assistance. See research by Professors David Aaker (Berkeley), Kusum Ailawadi (Dartmouth), Paul Berger (Boston U), Pierre Chandon (Insead), Chris Dubelaar (U Utah), Tulin Erdem (NYU),

Morris George (U Conn), Robert Jacobson (U Washington), Wagner Kamakura (Duke), Kevin Keller (Dartmouth), Donald Lehmann (Columbia), Katherine Lemon (Boston College), Robert Leone (OSU), Jordan Louviere (U Alberta), Anita Luo (U Conn), Leigh McAlister (U Texas), Neil Morgan (Indiana U), Scott Neslin (Dartmouth), Chan Park (Hankuk U Foreign Studies), Jagmohan Raju (Wharton), Vithala Rao (Cornell), David Reibstein (Wharton), Lopo Leotte do Rego (U Iowa), Gary Russell (Iowa), Roland Rust (U Maryland), V. Srinivasan (Stanford), Rajendra Srivastava (Emory), Joffre Swait (U Alberta), Jakki Thomas (Northwestern), Rajkumar Venkatesan (U Virginia), and Valarie Zeithaml (UNC).

29. Thanks to Professor Jagmohan Raju (Wharton) for his notes and thoughts on these matters. Also see Professor David Reibstein’s (Wharton) “House of Brands vs. Branded House.”

30. See research by Professors Thomas Madden (U South Carolina) and Susan Fournier (Boston U).

Tybout (Northwestern), Franziska Völckner (U Hamburg), and Catherine Yeung (National U Singapore).

20. Some research suggests that “cognitively flexible” customers will be more accepting of brand extensions. (See work by Professors Eric Yorkston (TCU), Joseph Nunes (USC), and Shashi Matta (OSU).)

21. Just to confuse you, sometimes the term vertical extension is preserved for the specific situation in which an upscale brand is created or a downscale brand is created (both being true in the Swiss Army example); the vertical axis representing price points is such use of the term.

22. Mergers and other joint cooperatives must also consider the customer perception of whether the companies coming together are complementary or incongruent. Consider these affiliations: Toyota & Lexus, Chrysler & Mercedes, Ford & Jaguar. What are the motives and image and corporate association implications for the first company in each pair (an enhancement in status and prestige)? For the second (access to a larger customer base)?

23. For more information on the complementarity between parent brands and brand extensions,



I n R e v i e wCHAPTER 6

Discussion Questions

1. Choose four product categories in which there are products

you use and like a lot. What are your favorite brands in these

categories? What are four alternative brands (one for each

category)? What are four brands you would never use (one in

each category)? Why do you prefer your favorite brands over the

others?

2. Which brand personality best describes your business school?

Why? Is that the image the school should have? What would it

take to change the personality to a better one?

3. Which brand personality best describes you? Is that the image

you want? How might you change others’ perceptions of you?

4. Go to www.interbrand.com and read the descriptions of its

methodology. (Note that because it is providing a service, most

of the details are considered proprietary and therefore are not

revealed.) How might you improve upon the Interbrand mea-

sures of brand equity? What inputs would you use? What kind

of database and model would you like to see developed? Using

marketing concepts, how would you attach a “worth” to a brand

(its equity) to supplement the business’s financial values?

Summary

To summarize the key concepts of brands:

>> Brands are promises to customers. Brands are names and

logos and colors and fonts. Brands signal information to

customers about predictability in their purchases and about

anticipated reliability and expected quality. Brands can com-

mand higher prices because the brands offset any uncertain-

ties or risks associated with the purchase in the mind of the

customer. Brand associations are the cognitive and emotional

elements that combine to create the larger brand story.

>> Companies can employ any of a number of strategies with

their brands—they can put their corporate name on every-

thing (i.e., an umbrella brand), or they can create a portfolio

of different brands (i.e., the house of brands).

>> Brand valuation (e.g., per the method of Interbrand reported

in the Business Week annual polls) is all the rage and will

likely remain important to branders in the future.

MARKETING FRAMEWORK

5Cs 4Ps

Product

Price

Place

Promotion

Customer

Company

Context

Collaborators

Competitors

STP

Price

Place

Promo

• What is a brand? Why do we brand—what functions do brands serve?• What are brand associations?• What are branding strategies for goods and services?• How do we assess brand equity?

Segmentation

Targeting

Positioning

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I n R e v i e wCHAPTER 6

As business schools try to attract students (both undergraduate and

graduate) and recruiters for students’ employment, they’re increas-

ingly trying to find their distinctive brand voice. Few schools are big

enough to be good at everything, so they’re picking their battles by

trying to find a way to describe their unique competitive advantages

in the form of a brand personality.

Consider your school as the central brand whose identity is

forged in part by comparisons with competitors. Thus, create a

top-10 list of your most important competitor schools. If you’re at the

top of the pecking order, most of your top 10 will be other schools in

that list. If your school draws a student body primarily regionally, mix

into your top-10 list other schools that are geographically proximal.

If your school has other qualities that make it unique (private vs.

public; large evening program; specialization in nonprofits, health,

global, entertainment, whatever), include other schools that strive

for the same qualities. One way to populate this list is to think of the

other schools you applied to or considered.

Next, generate a list of seven attributes that you believe are

important in evaluating a business school. Then collect data—most

likely a convenience sample of at least thirty people (who will have

certain biases, but this case is more about the process than the out-

come) from whom you obtain ratings of each of the eleven schools

(the ten schools plus yours) on each of the seven attributes. Use a

9-point scale for each of the seven attributes.

Enter the data into an Excel spreadsheet—one row per respon-

dent. Take the averages (and confidence intervals if you want to get

sophisticated). Plot the means in a “profile” or “snake” plot. The

seven attributes are points along the horizontal axis. The scale 1 to

9 forms the vertical axis. You draw one profile or snake by plotting

the means for one school and then connecting the dots.

1. What do you see in the brand map?

2. How does your school fare? What is your school’s personality?

Strengths? Weaknesses?

3. How might you use this information to sell your school to stu-

dent applicants and recruiters?

Mini-Case: Brand U

Marketing Plan Questions

Take a branding perspective and build on the answers you compiled in Chapter 5.

Product: Fill in descriptions here:

Choose high-end quality or basic quality level. Product1

Use conjoint on target segments to determine primary

attributes/features. Product2

Determine what our brand associations are and what we want to

trade in/out. Product3

Determine where we are in the product life cycle and whether

it is time to jump-start. Product4

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© AP Images/Jeff Chiu Brands · 2009-11-05 · 63 support, Google as an information source, and the Museum of Modern Art as a specific museum). Marketers believe that brands have