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Brand management

Module 1

Definition of 'Brand'

A distinguishing symbol, mark, logo, name, word, sentence or a combination of these items that companies useto distinguish their product from others in the market. Once a brand has created positive sentiment among itstarget audience, the firm is said to have built brand equity. ome e!amples of firms with brand equity "possessing very recogni#able brands of products " are $icrosoft, %oca"%ola, &errari, ony, he (ap and )okia.Legal protection given to a brand name is called a trademark.

A brand is often the most valuable asset of a %orporation. Brand owners manage their brands carefully to createshareholder value, andbrand valuationis an important management technique that ascribes a money value to abrand, and allows marketing investment to be managed *e.g.+ prioriti#ed across a portfolio of brands toma!imi#e shareholder value

BRAND EQUITY

he value premium that a company reali#es from a product with a recogni#able name as compared to its genericequivalent. %ompanies can create brand equity for their products by making them memorable, easilyrecogni#able and superior in quality and reliability. $ass marketing campaigns can also help to create brandequity. -f consumers are willing to pay more for a generic product than for a branded one, however, the brand issaid to have negative brand equity. his might happen if a company had a maor product recall or caused awidely publici#ed environmental disaster. he additional money that consumers are willing to spend to buy%oca %ola rather than the store brand of soda is an e!ample of brand equity.

Brand e!it"is aphraseused in themarketingindustry which describes the value of having a well"knownbrand 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 thata product with a well"known name is better than products with less well known names

/lements that can be included in the valuation of brand equity include *but not limited to+ changing marketshare, profit margins, consumer recognition of logos and other visual elements,brand languageassociationsmade by consumers, consumers' perceptions of quality and other relevant brand values

%onsumers' knowledge about a brand also governs how manufacturers and advertisers market the brand. Brandequity is created through strategicinvestmentsin communication channelsand marketeducationand appreciatesthrougheconomic growthinprofit margins,market share,prestigevalue, and critical associations. (enerally,these strategicinvestmentsappreciate over time to deliver areturn on investment. his is directly relatedtomarketing 0O-. Brand equity can also appreciate without strategicdirection.

Brand val!e

$aor brand owners like he %oca"%ola %ompany, 1rocter 2 (amble, 3nilever and )estl4 were aware of the

importance of their brands, as indicated by their creation of brand managers, but on the stock market, investors

focused their value assessment on the e!ploitation of tangible assets.

CET MBA | Prepared by Belli P K
http://en.wikipedia.org/wiki/Brand_valuationhttp://en.wikipedia.org/wiki/Brand_valuationhttp://en.wikipedia.org/wiki/Phrasehttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Brand_namehttp://en.wikipedia.org/wiki/Visual_brand_languagehttp://en.wikipedia.org/wiki/Brand_languagehttp://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Communication_channelhttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Profit_marginhttp://en.wikipedia.org/wiki/Profit_marginhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Market_sharehttp://en.wiktionary.org/wiki/prestigehttp://en.wikipedia.org/wiki/Association_(psychology)http://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Marketing_ROIhttp://en.wikipedia.org/wiki/Marketing_ROIhttp://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Phrasehttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Brand_namehttp://en.wikipedia.org/wiki/Visual_brand_languagehttp://en.wikipedia.org/wiki/Brand_languagehttp://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Communication_channelhttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Educationhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Profit_marginhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wiktionary.org/wiki/prestigehttp://en.wikipedia.org/wiki/Association_(psychology)http://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Marketing_ROIhttp://en.wikipedia.org/wiki/Strategichttp://en.wikipedia.org/wiki/Brand_valuation

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Brand management

he increasing recognition of the value of intangibles came with the continuous increase in the gap between

companies5 book values and their stock market valuations, as well as sharp increases in premiums above the

stock market value that were paid in mergers and acquisitions in the late 6789s.

he brand is a special intangible that in many businesses is the most important asset. his is because of theeconomic impact that brands have. hey influence the choices of customers, employees, investors and

government authorities. -n a world of abundant choices, such influence is crucial for commercial success and

creation of shareholder value. /ven non"profit organi#ations have started embracing the brand as a key asset for

obtaining donations, sponsorships and volunteers.

ome brands have also demonstrated an astonishing durability. he world5s most valuable brand,6 %oca"%ola, is

more than 668 years old: and the maority of the world5s most valuable brands have been around for more than

;9 years. his compares with an estimated average life span for a corporation of olvo and ?and 0over. amsung, a leading electronics group, invests heavily in its intangibles,

spending about @.= percent of annual revenues on 02D and another = percent on communications. = -n

packaged consumer goods, companies spend up to 69 percent of annual revenues on marketing support.

T#e social val!e o$ brandsbrands create substantial social as well as economic value as a result of increased competition, improvedproduct performance and the pressure on brand owners to behave in socially responsible ways.

%ompetition on the basis of performance as well as price, which is the nature of brand competition, fostersproduct development and improvement. And there is evidence that companies that promote their brands moreheavily than others in their categories do also tend to be the more innovative in their categories.

he need to keep brands relevant promotes increased investments in 02D, which in turn leads to a continuousprocess of product improvement and development. Brand owners are accountable for both the quality and theperformance of their branded products and services and for their ethical practices. (iven the direct link betweenbrand value and both sales and share price, the potential costs of behaving unethically far outweigh anybenefits, and outweigh the monitoring costs associated with an ethical business.

)ike, a company once critici#ed for the employment practices of some of its suppliers in developing countries,now posts results of e!ternal audits and interviews with factory workers at www.nikebi#.com. he concern ofmultinational companies is understandable, considering that a = percent drop in sales could result in a loss of

brand value e!ceeding 6 billion. -t is clearly in their economic interests to behave ethically

%#at great brands s#areA compelling idea.Behind every brand is a compelling idea, which captures customers5 attention and loyaltyby filling an unmet or unsatisfied need

A resol!te core p!rpose and s!pporting val!es.hese remain in place even though the business strategy andtactics have to be regularly revised to address and take advantage of the circumstances of a changing, and in thedetail often largely unanticipated, world and business environment.


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Brand management

A central organi&ational principle.he brand position, purpose and values are employed as managementlevers to guide decision"making. his becomes so ingrained in leading organi#ations that they consciously askthemselves, Cow will this decision impact upon the brandE or -s this on"brandE

An abilit" to sta" relevant. ?eading brands constantly maintain their relevance to a targeted set of customers,

ensuring ownership of clear points of difference compared with the competition. hey sustain their credibilityby increasing customers5 trust of and loyalty to them.

Brand b!ilding skills

Anyone with responsibility for building a brand needs to be creative, intelligent, innovative, venturesome,nurturing, disciplined and servicefocused. hey must also master three primarytasks+

/mbody the brand itself. his is the most important task. he communications and the actions of theindividual must align with the core purpose and values reflecting the brand. he organi#ation looks tobrand managers as role models who portray appropriate behavior and act in the best interests of thebrand and company. %onversely, they must also challenge convention to keep the brand fresh byquestioning what has become the status quo.

3nderstand the underlying sources of brand value and protect and build on them.

%ontinually search out what makes the brand unique. %ustomer preferences, competitive frameworks

and market conditions are incredibly dynamic. 0enewing and refreshing the brand to ensure continuingrelevance, differentiation and credibility are the most strategic tasks and perhaps the most consuming

tactically. Brand managers must determine what cannot change and what must change.

'e"s o$ branding

Brand identityis the combined effect of visual elements in your marketing materials. A basic brand identitykitconsists of a logo, business card, letterhead, and branded envelope. his basic set of materials can bee!tended to include a website, brochure, folder, flyer, or any other professionally designed pieces.


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Brand management

A successful brand identity is built around the following 7 key characteristics+

Uni!ein Flook and feelF and message about your business. $ake sure that your business's graphics

stand out from and cannot be confused with those of the competition, and that the ways you talk and writeabout your business are uniquely yours as well.

Repetitionhelps potential clientsGand current clientsGto remember and relate to who you are and

what you do in your business. /!perts say that it takes somewhere between ; and 6< Fimpressions,F orcontacts with your business, for customers to truly remember you and connect with your business.

(onsistentuse of your logo, tagline, and materials and what you say about your business. Hou will only

be able to build a strong brand for your company by designing unique visual and verbal elements and thenrepeating those elements through all of the materials that you create.

)emorableelements help your business to stand out as well. Hou'll be able to create brand

memorability through consistency, repetition, and uniqueness of your graphics and materials. $ake your

graphics memorable by creating a unique logo and using a consistently strong>isual >ocabulary.%reatememorable te!t by using alliteration *repeating similar sounds, such as using words that all start with thesame letter, repetition, unique word combinations, and lively imagery in your copy.

)eaning$!lgraphics make your company's message come to life through symbolic graphics, colors,

and type choices in all of your marketing materials. $eaningful te!t will e!press what your business is reallyall about, and help to give some depth to your developing brand. And, perhaps more importantly, youraudience will be able to understand the meaning in your graphics and te!t G it will be accessible to yourtarget market.

(leargraphics and te!t communicate your message in an understandable way. $ake sure that your

graphics are crisp, clean, simple, and meaningful. And make sure that your te!t e!presses your point and isnot confusing G that it e!plains your point well.

*onest"in your brand identity materials. -f clients do engage with you and then you don't live up to

the brand promisesyou made in your materials, then they will feel alienated from you and your company...or worse. his can really damage your relationships and your overall brand, so make sure you can standbehind your brand and deliver on your promises before you distribute your branded materials.

+ersonalit"for your business helps make sure that you don't look like everyone else, so that potential

clients can immediately tell that all of your branded materials are coming from your business. -f you're theowner of a one"person business, your brand identity might resonate with your own personality. -f your

business is larger, or if you want to make it appear larger, you can create your own brand personality toconnect with your potential clients.

+ro$essionalismin all things, from the quality of your graphics, to the way your te!t is written

*proofreading is essentialI, to your personal presentation+ the way you talk, dress, and speak.1rofessionalism in customer service and in the way you treat people you meet is also important. &ollowthrough on your offers and promises.

http://www.elf-design.com/article-Visual-Vocabulary.htmlhttp://www.elf-design.com/article-Visual-Vocabulary.htmlhttp://www.elf-design.com/article-Visual-Vocabulary.html

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Brand management

T#e *alo E$$ect

horndike discovered that when people rate someone on one trait it is correlated with their ratings on othertraits. 1ut simply, people tend to see a person5s performance as all good or all bad. his phenomena has come tobe called the Calo /ffect.E Jhile horndike saw the Calo /ffect as a source of measurement bias in his

research, the savvy marketer will recogni#e it as the foundation of the modern concept of brands. Jhen wedevelop a favorable impression of a firm when interacting with one partner at a firm we tend to view the wholefirm in a favorable light. Our impression of that firm5s brand is strengthened. )ot surprisingly it can also workin the other direction. 3nfavorable impressions are also generali#ed via the Devil /ffectE.

Brand ,trengt# De$ined- he concept of a strong brand is something that we all understand on a very intuitivelevel. &rom our own e!perience we know that firms with high brand strength do better in the marketplace,whether they need new clients, business partners or employees. o what e!actly is brand strength Jhile thereis no universal definition, we describe thebrand strength of a professional services firmas the combination of a

firm5s reputation and it5s visibility. &irms that have better reputations coupled with higher visibility havestronger brands.

Increasing Brand ,trengt#- Hour firm doesn5t need to be the best at everything. Hou ust need to be the bestatsomethingand the Calo /ffect will help pull the rest of your services forward. imilarly, you don5t need to behighly visible to everyone. But you do need to have a strong presencesomewhere. &rom that starting point yourbrand strength can grow.

A better approach would be to focus on an industry in which you have a strength and a service where you cangain a true advantage. By devoting your resources to becoming the best in that segment you have a reasonableopportunity to develop a strong reputation and high visibility. &rom that island of brand strength you can more

easily e!pand. Add additional services and move to additional industries where your visibility can be leveraged.

(#anges in t#e Indian (ons!mer

Jhen -ndia opened its economy to the global marketplace in the early 6779s, many multinational%orporations rushed in to pursue its middle"class consumersGan estimated

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Brand management

Jindow hoppersE are more than actual shoppers. he concept of (host hoppersE is yet to come here,which will also happen eventually to keep the quality of the retail outlets. Buyers are (od now, moreknowledgeable and having more options in their handsbefore they decide to purchase and invest their money.

ie/ o$ )alls in 0!rgaon Area.-n a diversified country like -ndia cultural factors e!ert the broadest and

deepest influence on consumer behaviour: we will look at the role played by the buyer5s culture, subculture, andsocial class.

(!lt!re- %ulture is the most fundamental determinant of a person5s wants and behaviour. Jhereas lowercreatures are governed by instinct, human behaviour is largely learned. he child growing up in a society leansa basic set of values, perceptions, preferences and behaviours through a process of sociali#ation involving thefamily and other key institution .hus a child growing up in -ndia is e!posed to the following values+Achievement and success, activity , efficiency and practicality, progress, material comfort, individualism,freedom, e!ternal comfort, humanitarianism, and youthfulness.

,ocial 1actors- A consumer5s behaviour is also influenced by social factors, such as the consumer5s reference

group, family, and social roles and statuses.

Re$erence 0ro!p-A person5s behaviour is strongly influenced by many group .A persons reference group arethose groups that have a direct *face to face or indirect influence on the person5s attitudes or behaviour. (rouphaving a direct influence on a person are called membership group. hese are group to which the personbelongs and interacts. ome are primary groups. Jith which there is fairly continuous interaction, such asfamily, friends, neighbours, and co"workers. 1rimary group tend to be informal. he person also belong tosecondary group, which tend to be more formal and where there is less continuous interaction+ they includereligious organi#ations, professional associations, and trade unions.

1amil" 0ro!p-$embers of the buyer5s family can e!ercise a strong influence on the buyer5s behaviour. Je

can distinguish between two families in the buyer5s life. he family oforientationconsists of one5s parents.&rom parents a person acquires an orientation towards religious, politics, and economics and a sense of personalambitions, self Mworth, and love. /ven if the buyer no longer interacts very much with his or her parents, theparents influence on the unconscious behaviour of the buyer can be significant. -n countries whereparents continueto live with their children, their influence can be substantial like -ndia. -n case of e!pensiveproducts and services, husband and wives engage in more oint decision making. he market needs to determinewhich member normally has the greater influence in the purchase of a particular products or services. /ither thehusband or the wife, or they have equal influence. he following products and services fall under such+Cusband M dominant+ life insurance, automobiles, television Jife M dominant+ washing machines, carpeting,non Mliving M room furniture, kitchenware /qual+ ?iving M room furniture, vacation, Cousing, outsideentertainment. heir researches were made on the -ndian people5s social life, personal tastes and preferences,

way of life, how they identify an effective product and what makes them get attracted towards a product. hesocial and economic conditions were analy#ed. he general economy of -ndia was also researched on. hey hadmodified their product to suit the -ndian conditions. heir technology had to be adusted and suited to such ane!tent that their car is adaptable to -ndian conditions. -ndians are generally prone to be rough and toughcustomers and especially taking into account the road conditions and other social factors they designed theproduct in such a way that it5s best suited to the conditions and it5s received by the target customers. oday &ordis enoying a huge market in -ndia.

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Brand management


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