ANSWER KEY FOR INTERNAL ASSESSMENT TESTpesitsouth.pes.edu/pdf/MBA/new/test1/MM410_T1_SBM_KEY.pdfthe security of sustained future revenues ... positioned with respect to competitors

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PESIT Bangalore South Campus Hosur road, 1km before Electronic City, Bengaluru -100

Department of Master of Business Management

MBA IV

ANSWER KEY FOR INTERNAL ASSESSMENT TEST –1 Date 18/3/2016 Max Marks: 50 Subject & Code : Strategic Brand Management – 14MBAMM410 Section : A Name of faculty: Ravi Urs Time : 11.30 AM – 1.00 PM

Note: Answer all questions

1. a What is brand equity?

Brand equity describes the value of having a well-known brand name, based on the idea that the owner

of a well-known brand name can generate more money from products with that brand name than from

products with a less well known name, as consumers believe that a product with a well-known name is

better than products with less well-known names. It is the value premium that a company realizes from a

product with a recognizable name as compared to its generic equivalent.

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b Define brand image.

Brand image is consumers’ perceptions about a brand, as reflected by the brand association held in

consumer memory. The brand associations contain the meaning of the brand for consumers. Associations

can come in all forms and may reflect characteristics of the product. Creating a strong brand image means

creating a link that is strong, favorable, and has a unique association with the brand.

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2. a What are the advantages of branding to producers?

Brands serve an identification purpose, thus simplifying product handling

or tracing

It helps to organize inventory and accounting records

It offers the producer legal protection for unique features of the product

It can retain intellectual property rights, giving legal title to the brand

owner, which helps them to safely invest in the brand and reap the

benefits of a valuable asset

Investment in brand can endow a product with unique associations and

meanings that differentiate it from other products

Brands can signal a certain level of quality

Brand loyalty provides predictability and security of demand

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Brands create barriers of entry that make it difficult for other producers

to enter the market

Brands create a very secure competitive advantage

Brands represent enormously valuable pieces of legal property, capable

of influencing consumer behavior, being bought and sold, and providing

the security of sustained future revenues

b How is branding done for people and organizations?

Branding is generally straightforward for people and organizations

These often have well-defined images that are easily understood and

liked (or disliked) by others

o E.g. Politicians, entertainers, sportspersons

They strive in some way for public approval and acceptance

o E.g. Association of TCS with marathon, Bacchan for Pulse Polio

They benefit from conveying a strong and desirable image

o E.g. Viral Kohli is seen as very aggressive

Branding is not restricted only to celebrities. It is needed for everyone for

a successful career as co-workers, superiors, or even important people

outside the company know who the person is and their skills, talents,

attitudes, etc.

Building name and reputation is branding for individuals

o E.g. Rahul Dravid is reputed for his batting abilities

The right awareness and image can be invaluable in shaping how people

treat a person and interpret their words, actions and deeds

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Organizations create brand from themselves through their programs,

activities and products

E.g. HUL is known for its marketing

3 a Describe the strategic brand management process.

I. Identifying and establishing brand positioning

The strategic brand management process starts with a clear

understanding of what the brand is to represent and how it should be

positioned with respect to competitors

Brand positioning can be defined as “act of designing the company’s offer

and image so that it occupies a distinct and valued place in the target

customer’s mind,” such that the potential benefit to the firm is

maximized

It is about creating brand superiority in the minds of the customers

Positioning convinces consumers of the advantages or points of

difference a brand has over its competitors and also eliminates the

disadvantage about points of parity

Positioning also specifies the appropriate core brand association and

brand mantra

A mental map is a visual depiction of the different types of associations

linked to the brand in the minds of the consumers

Core brand associations are that subset of associations (attributes ad

benefits) that best characterizes a brand

Brand mantra is the brand essence or core brand promise

Brand mantra is a short three to five word expression of the most

important aspects of a brand and its core associations, the enduring

“brand DNA” and the most important aspects of the brand to the

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consumers and the company

Core brand associations, points of parity, points of difference and a brand

mantra are thus an articulation of the heart and soul of the brand

II. Planning and Implementing Brand Marketing Programs

Building brand equity requires creating a brand that consumers are

sufficiently aware of and with which they have strong, favorable, and

unique brand association

This knowledge building process will depend on three factors:

a) Choosing brand elements

The most common brand elements are brand names, URLs, logos,

symbols, characters, packaging, and slogans

A number of options and criteria are relevant for choosing them to

enhance brand awareness or facilitate the formation of strong, favorable,

and unique brand associations

The best test of the brand building contribution of a brand element is

what consumers would think about the product or service if they knew

only about that brand element

Because different elements have different advantages, marketing

managers often use a subset of all the possible brand elements or even

all of them

b) Integrating the brand into marketing activities and the supporting

marketing programs

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Marketing programs can create strong, favorable, and unique brand

associations in a variety of ways

c) Leveraging Secondary Associations

Brand associations may themselves be linked to other entities that have

their own associations, creating these secondary associations

Brand may be linked to source factors like, such as company (through

branding strategies), countries or other geographical regions (through

identification of product region), and channels of distribution (through

channel strategy), as well as other brands (through ingredients or co-

branding), characters (through licensing), spokespeople (through

endorsements), sporting or cultural events (through sponsorship), or

some other third party sources (through awards or reviews)

Because the brand becomes identified with another equity, even though

this entity may not directly relate to the product or service performance,

consumers may infer that the brand shares associations with that entity,

thus producing indirect or secondary associations for the brand

The marketer is borrowing or leveraging some other associations for the

brand to create some associations of the brand’s own and thus help to

build its brand equity

III. Measuring and Interpreting Brand Performance

The task of determining or evaluating a brand’s positioning often benefits

from the brand audit

A brand audit is a comprehensive examination of a brand to assess its

health, uncover its sources of equity, and suggest ways to improve and

leverage that equity

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It requires understanding sources of brand equity from the perspective of

both the firm and the consumer

Once marketers have determined the brand positioning strategy, they

are ready to put into place the actual marketing program to create,

strengthen, or maintain brand associations

To understand the effects of these brand marketing programs, marketers

should measure and interpret brand performance through marketing

research, through brand value chain

The brand value chain is the means to trace the value creation process

for brands, to better understand the financial impact of brand marketing

expenditures and investments

A brand equity measurement system has to be successfully designed and

implemented by the managers to manage the brands profitably

A brand equity measurement system is a set of research procedures

designed to provide timely, accurate, and actionable information for

marketers so that they make the best possible tactical decisions in the

short run and the best strategic decisions in the long run

IV. Growing and Sustaining Brand Equity

Managing brand equity can mean managing brands within the context of

other brands, as well as over multiple categories, over time, and across

multiple market segments

a) Defining the Branding Strategy

The firm’s branding strategy provides general guidelines about which

brand elements to apply across its products

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The two main tools in defining the corporate branding strategy are the

brand-product matrix and the brand hierarchy

The brand-product matrix is a graphical representation of all the brands

and products sold by the firm

The brand hierarchy displays the number and nature of common and

distinctive brand components across the firm’s products

By capturing the potential branding relationships among the different

products sold by the firm, it graphically portrays the firm’s branding

strategy

The Brand Portfolio is the set of all brands and brand lines that a

particular firm offers for sale to buyers in a particular category

b) Managing Brand Equity over Time

Effective brand management requires taking a long-term view of

marketing decisions

A long-term perspective of brand management recognizes that any

changes in the supporting marketing program for a brand may, by

changing consumer knowledge, affect the success of future marketing

programs

A long-term view also produces proactive strategies designed to maintain

and enhance customer-based brand equity over time, in the face of

external changes in marketing environment and internal changes in the

firm’s marketing goals and programs

c) Managing Brand Equity over Geographic Boundaries, Cultures and

Market Segments

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Different types of customers need to be recognized in developing

branding and marketing programs

International factors and global branding strategies are particularly

important

In expanding a brand overseas, managers need to build equity by relying

on specific knowledge about the experience and behaviors of those

market segments

b Explain the customer based brand equity pyramid.

According to the CBBE model, building brand is a sequence of four steps,

each of which is contingent on successfully achieving the objectives of

the previous one

1. Ensure identification of the brand with customers and an association of

the brand in customers’ minds with a specific product class or customer

need

2. Firmly establish the totality of brand meaning in the minds of customers

by strategically linking a host of tangible and intangible brand

associations with certain properties

3. Elicit the proper customer response to this brand identification and

brand meaning

4. Convert brand response to create an intense, active loyalty relationship

between customers and the brand

The ordering of the steps in this “branding ladder,” is from identity to

meaning to response to relationship

This means we cannot have meaning unless we have created identity;

response cannot occur unless we have developed the right meaning; and

we cannot forge a relationship unless we have elicited the proper

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response

Brand building blocks

We can establish six building blocks with customers that we can assemble

in a pyramid

Significant brand equity only results if brands reach the top of the

pyramid

Brand salience

Brand salience means achieving the right brand identity for the brand

It is an important first step in building brand equity

It measures the awareness of the brand

Building brand awareness helps customers understand the product or

service category in which the brand competes and what products or

services are sold under the brand name

It ensures that customers know which of their “needs” the brand –

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through these products – is designed to satisfy

It helps in knowing what basic functions does the brand provide to

customers

A highly salient brand is one that has both depth and breadth of

brand awareness

This should make sure that customers always make sufficient

purchases as well as always think of the brand across a variety of

settings in which it could possibly be employed or consumed

Brand performance

Product is at the heart of brand equity as it is the primary influence

on what consumers experience with a brand, what they hear about a

brand from others, and what the firm can tell consumers about the

brand in their communications

Designing and delivering a product that fully satisfies consumer needs

and wants is a prerequisite for successful marketing

It is important that the product at least meet the expectations of the

customers, for creating of brand loyalty and resonance

Brand performance describes:

How well the product or service meets customers’ more functional

needs?

How well does the brand rate on objective assessment of quality?

To what extent does the brand satisfy utilitarian, aesthetic and

economic customer needs and wants in the product or service

category?

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Brand performance includes dimensions that differentiate the brand

Five important types of attributes and benefits often underline brand

performance:

a) Primary ingredients and supplementary features

b) Product reliability, durability and serviceability

c) Service effectiveness, efficiency and empathy

d) Style and design

e) Price

Brand Imagery

It is the way people think about a brand abstractly, rather than what they

think the brand actually does

It depends on the extrinsic properties of the product or service, including

the way in which the brand attempts to meet customers’ psychological

and social needs

It refers to the intangible aspects of the brand, and consumers can form

imagery associations directly from their own experience or indirectly

through advertising or by some other source of information, such as

word of mouth

The four main kinds of intangibles that can be linked to a brand are:

a) User profile:

It is an imagery about the type of person or organization who uses the

brand

This imagery will result in customers’ mental image of actual users or

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more aspirational, idealized users

Consumers may base associations of a typical or idealized brand user on

descriptive demographic factors or more abstract psychographic factors

b) Purchase and usage situations

It tells customers under what conditions or situations they can or

should buy and use the brand

Associations can be about the type of channel, such as departmental

stores, specialty stores, or the Internet (E.g. Moto G being available

only on Flipkart); to specific stores such as Macy’s

Associations to a typical usage situation can relate to the time of the

day (E.g. Colgate ads showing advantages of brushing before going to

bed), week, month (E.g. DSP Mutual fund ads encouraging people to

save for tax purpose in the month of March) or year to use the brand

(E.g. Junior Horlicks for kids)

It can be about the location – such as inside or outside the house

It can be about the type of activity during which a product can be

used – formal or informal

c) Personality and values

Through customer experience or marketing activities, brands may

take on personality traits, and like a person, appear to be

“modern,” “old-fashioned,” “lively,” or “exotic”

The five dimensions of brand personality are:

I. Sincerity (down-to-earth, wholesome, cheerful) (E.g. LIC)

II. Excitement (daring, spirited, imaginative, up-to-date) (E.g.

Mountain Dew, Thumps Up)

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III. Competence (reliable, intelligent, successful) (E.g. Toyota)

IV. Sophisticated (Upper class and charming) (E.g. Titan)

V. Ruggedness (outdoorsy and tough) (E.g. Bullet, Live-in Jeans)

d) History, heritage and experiences

Brands may take on associations to their past and certain

noteworthy events in the brand history

These type of associations may recall distinctly personal

experiences and episodes or past behaviours and experiences of

friends, family or others

Associations to aspects of marketing for the brand can be:

Color of the product, look of its packaging, the company that

makes the product, country where it is made, the type of store

where it is sold, events for which the has sponsored, people who

endorse the brand

Associations to history (Krishnaiah Chetty ads proclaiming that

they were the jewellers for the Mysore royal family), heritage

(Cadburys ads showing Raksha Bandhan tradition of brother

gifting to sister), and experiences (Maggi) involve more specific,

concrete examples

Brand Judgments

They are customers’ personal opinions about and evaluation of

the brand

Theses are formed by the customers by putting together all the

different brand performance and imagery associations

Though customers may make many types of judgments about a

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brand, the following four types of judgments are most important:

a) Brand Quality

The most important attitude customers’ hold towards a brand is

towards its perceived quality

Brand attitudes are consumers’ overall evaluations of a brand,

and often form the basis for brand choice

Brand attitudes generally depends on the specific attributes and

benefits of the brand

b) Brand Credibility

Brand credibility describes the extent to which customers see the brand

as credible in terms of three dimensions:

o Perceived expertise

o Is the brand competent, innovative and a market leader (Maruti

Suzuki)

o Trustworthiness

o How dependable is the brand and does it keep customers’

interest in mind (GE’s claim that they are a 100 year old company)

o Likeability

o Is the brand fun, interesting, and worth spending time with

(Disney, Wonder La)

c) Brand consideration

Consideration depends in part on how personally relevant customers find

the brand (E.g. Anti dandruff shampoos is relevant for people having

dandruff and may not be relevant to others)

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It is crucial filter in terms of building brand equity

Unless the customer gives the brand a serious consideration and deem it

relevant, he will keep the brand at a distance and never closely embrace

it (E.g. Health conscious people may never accept aerated drinks like

Coke)

Brand consideration depends in large part on the extent to which strong

and favorable brand associations can be created as part of brand image

d) Brand superiority

Superiority measures the extent to which customers view the brand

as unique and better than other brands

It is absolutely critical to building intense and active relationships

with customers

It depends to a great degree on the number and nature of unique

brand associations that make up the brand image

Brand Feelings

They are customers’ emotional response and reactions to the

brand

These feelings can be mild or intense and can be positive or

negative

The emotions evoked by a brand can become so strongly

associated that they are accessible during product consumption

or use

The following are six important types of brand-building feelings:

I. Warmth

II. Fun

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III. Excitement

IV. Security

V. Social approval

VI. Self respect

Brand Resonance

It describes the nature of relationship between the customers and brand

and the extent to which customers feel that they are “in sync” with the

brand

E.g. Harley Davidson, Apple and eBay have very good brand resonance

Resonance is characterized by two dimensions:

In terms of intensity, or the depth of the psychological bond that

customers have with the brand

By the level of activity engendered by this loyalty, such as repeat

purchase rates and the extent to which customers seek out brand

information, events, and other loyal customers

The above two dimensions of brand resonance can be broken down in to

four categories:

a) Behavioral loyalty

This can be gauged from the repeat purchase and the amount or share of

category volume attributed to the brand

It is about how often do customers purchase a brand and how much do

the purchase

The lifetime value of behaviorally loyal customers can be enormous

b) Attitudinal attachment

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Resonance requires very strong personal attachment

Customers must go beyond having a positive attitude to viewing

the brand as something special in a broader context

Customers with a great deal of attitudinal attachment to a brand

may state that they “love” the brand, describe it as one of their

favorite possessions, or view it as a “little pleasure” that they look

forward to

c) Sense of community

Identification with a brand community may reflect an important

social phenomenon in which customers feel a kinship or affiliation

with other people associated with the brand, whether fellow

brand users or customers or employees or representatives of the

company

A brand community may be online or offline

A stronger sense of community among loyal users can engender

favorable brand attitudes and intentions

d) Active engagement

This is the strongest affirmation of brand loyalty where customers

are willing to invest time, energy, money, or other resources in

the brand beyond those expected during purchase or

consumption of the brand

In this case, customers themselves become brand evangelists and

ambassadors and help to communicate about the brand and

strengthen the brand ties of others

4 Case Study: (Compulsory)

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Café Coffee Day (CCD). Owned by Amalgamated Beans Coffee trading company, pioneered the concept of

“out-of-home” premium coffee consumption in India by opening a chain of coffee retail outlets in 1996.

Till the year 2002, these outlets were largely confined to South India. Realizing that customers were

accepting the concept of consumption outside home and that organized coffee retailing would be

growing rapidly, Barista opened their own chain of coffee bars in the year 2000, targeting the executive

class of coffee-loving customers. Accordingly, Barista, promoted by Java Coffee Company, positioned

itself on the lines of traditional European Cafes. On the other hand, CCD decided to target the young

generation, usually college students and young people, and opened their outlets near colleges, software

companies and places where the target customers are usually present in large numbers.

CCD positioned itself as a “hangout place” for youngsters where they can meet and make friends and

promoted the outlet as a place where “a lot can happen over coffee.” Barista, with its stylish and sober

ambience and with facilities like internet connectivity, emerged as favorite destination where executives

met with business associates, made presentations on lap-tops and conducted business while savoring the

coffee aroma. In contrast, CCD’s ambience was one of spirited music and bright lighting, which

complemented the interiors to reinforce the concept of a “chillout zone” for the young customers.

While Barista entered in tie-ups with major retail chains like Planet M and Crossword, and set up outlets

in their premises, CCD initiated joint promotions with more youthful brands like channel V to craft the

brand-positioning. Thus while Barista is positioned as a premium coffee retail outlet for the upwardly

mobile executives, CCD differentiated the brand by crafting a unique position in the young consumer’s

minds.

a

Questions:

Have the two brands been able to communicate their positioning? Justify

Yes the two brands have been able to communicate their positioning. Barista has provide the with its

stylish and sober ambience and with facilities like internet connectivity to cater to the business class. They

have entered in tie-ups with major retail chains like Planet M and Crossword, and set up outlets in their

premises

CCD’s ambience was one of spirited music and bright lighting, which complemented the interiors to

reinforce the concept of a “chillout zone” for the young customers. CCD initiated joint promotions with

more youthful brands like channel V to craft the brand-positioning

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b What advice would you give to CCD to attract customers other than youth?

CCD to also provide an ambience which would be attractive to business people who are young and are

looking for meeting place. They should also position themselves for young and successful businessmen.

There would also be scope for providing snacks in addition to coffee to make it attractive for people who

want to have something to eat along with the coffee. There can be some designated places within the

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CCD where an ambience can be created for business meeting to happen.

c Considering that Starbucks has now entered India, provide a positioning strategy for Starbucks to

compete successfully with CCD and Barista.

Students can come up with their own strategy which should help Starbucks to position themselves as

being different from Barista and CCD.

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Documents

ANSWER KEY FOR INTERNAL ASSESSMENT TESTpesitsouth.pes.edu/pdf/MBA/new/test1/MM410_T1_SBM_KEY.pdfthe security of sustained future revenues ... positioned with respect to competitors