Module 2Building a brand From Scratch

Dr Tripti Dhote

• “Great brands are no accidents. They are a result of thoughtful and imaginative planning. Anyone building or managing a brand must carefully develop and implement creative brand strategies”.

• - Kevin Lane Keller!!!

• What Are powerful Brands?????

Power Brands….

A distinctive productDelivering brand promisePersonality and presence

Power Brands

• Emotional bond with the customer• Generates relationships measurably stronger

than ordinary brands

Power Brands….

• Generates enormous profits• Expands future strategic opportunities

Presence….

• Seem to be present everywhere, enforcing distinctiveness

• National/international scale• Successful brand extensions• Multiple concept and channels

So Powerful Brands…..

• Measuring, developing and implementing marketing programs can be very complicated. It is important for managers to consider the impact of their marketing decisions on brand value.

• .

• Powerful brands create meaningful images in the minds of consumers (Keller, 1993)

• With brand image and reputation enhancing differentiation and thus potentially having a positive

• influence on buying behavior (Gordon, Calantone and di Benedetto, 1993; McEnally and de Chernatony, 1999).

• Branding in consumer markets has been shown to increase a company’s financial performance and long term competitive position (Mudambi, 2002).

What is Brand Building?

• Involves all the activities that are necessary to nurture a brand into a healthy cash flow stream for the company after launch

“For me, it's all about having a story to tell. This is what will enable you to create an experience around the brand”.

Starbucks CEO Howard Schultz

Three models of branding

• 1) Brand Positioning: Describes how to guide integrated marketing to maximize competitive advantages.

• 2) Brand Resonance: Describes how to create intense, actively loyal relationships with customers.

• 3) Brand Value Chain: Describes how to trace the value creation process to better

• understand the financial impact of marketing expenditures and investments

Brand Positioning

• Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market.

• The goal is to locate the brand in the minds of consumers to maximize the potential benefits to the firm. Brand positioning is crucial because it drives so many marketing decisions.

• A good brand positioning helps guide marketing strategy by clarifying the brand’s essence, what goals it helps the consumer achieve, and how it does so in a unique way.

Situating the product within existing frame of reference

Handsets

Laptops

Service providers

Consumer durables

AutomobilesDetergents

Footwear

Cosmetics

Food ItemsGarments

• Customer focused value proposition (positioning outcome)

• Positioning requires that similarities and differences between brands to be defined and communicated.

• Why target market should buy the product?(convincing logic)

• Determining a frame of reference by identifyingTM and competition.

• Identifying the ideal POD’s POPs for BA.

Brand, TC, Benefits & VP

• ------------ How?????

Value for Money

Spacious small car no extra cost

Luxury and comfort

4 key components of Superior Positioning

• A competitive frame of reference

• in terms of the target market and nature of competition

• The points-of-difference in terms of strong, favorable, and unique brand associations

• The points-of-parity • in terms of brand association

that negate any existing or potential points - of- difference by competitors

• A brand mantra • that summarizes the essence

of the brand and key points-of-difference in 3-5

• words.

Superior Competitive Positioning• 1). a competitive frame of

reference • Category membership-

products or set of products with which a brand competes & close substitutes.

• The competitive frame of reference defines the associations that consumers use to evaluate POP & POD.

• Determining competitors FOR calls for understanding Consumer behavior & consideration sets customers use to make brand choices.

Points of Difference

• POD- Attributes/ benefits that consumers strongly associate with a brand (in terms of strong, favorable, and unique brand associations) which they positively evaluate and believe cannot be found in competitor brands

• Clear Superiority( Hi design, GUCCI, Versace)

Points of Parity

• Associations that may not essentially be unique to the brand & may even be shared with other brands.

• 2 types –• Category POP – necessary but

not sufficient conditions for brand choice

• Competitive POP- associations designed to negate competitors POD.

The brand association must be seen as personally relevant to consumers

• Automobile market Volvo (safety), Toyota (quality and dependability), and Mercedes-Benz (quality and prestige).

• Creating brand associations that are strong, favorable, and unique that can become points-of-difference is a real challenge, but essential in terms of competitive Positioning.

• Believable and credible.• Deliverable by the company. • The company must have the internal

resources and commitment to be able to actually feasibly and profitably create and maintain the brand association in the minds of consumers.

• Ideally, the brand association should be pre-emptive, defensible, and difficult to attack.

• Differentiating from competitors. • Finally, the brand association must be

seen by consumers as distinctive and superior compared to relevant competitors.

POD Vs POP

Availability Convenience Exclusivity, Prestige

“Its everywhere you want to Be” “More no of merchants accepting the card”

Market Mantra….

• Customers are perceptive about the messagesthat brands are giving them. Any inconsistency in the marketing mix arouses doubts.

Google… !!!!

Google is thriving because it continued to create relevant apps around its search engine instead of just isolating itself to the core business.

Positioning Pitfalls…• Over positioning• Under positioning• Ambiguous/ Vague/ Indistinct• Promising irrelevant benefits• Promise should be credible

• Points of parity:• Points of parity are the

shared values between the target brand and its competitors. These values

• are the common denominators that define the category.

• Points of parity can be leveraged to

• negate competitors’ POD

NIKE vs Reebok vs Adidas• This mental map shows the range of

associations for Nike. Some associations are product

• specific while others are not. • Brands typically may have many

associations, but only three to five are the primary drivers of brand equity.

• Core associations for Nike include: innovative technology,

• high quality/stylish products, joy and celebration of sports, maximum performance, self empowerment

• .

• inspiring, locally and regionally involved, and globally responsible.

• When compared to Reebok, comfort and stylishness are points of parity while technology and empowerment are points of difference.

• Compared to Adidas, performance and quality are points of parity while technology and empowerment are points of difference

From a commodity to a brand…..• In 1971, Perdue Farm

embarked on its first major advertising campaign and had contracted the firm of Scali, McCabe Scoves

• The firm came up with the idea of putting Perdue on television himself, with the tag line, "It takes a tough man to make a tender chicken”

It takes a tough man to tender chicken…

Perdue's Model…• This was fairly radical

because at the time, CEOs were not usually public spokespersons for their firms.

• The first commercial, shot in the city park in Salisbury, was ranked by Advertising Age as one of the best campaigns of the year.

• It was so successful that he went on to appear in over 200 of Perdue Farms' television commercials, although he was also known for his shyness as well.

• Much of the commercials were known for Perdue actually encouraging people to voice any complaints or dissatisfaction with Perdue products, usually ending with Perdue stating "Say whatever you have to say; I can take it".

• Through this advertising, Perdue is credited with creating the first brand for chicken.Frank Perdue's promotion of the Perdue brand

through high-profile advertising resulted in its being the first well-known brand of chicken in the U.S

Perdue’s Model of Brand Building

• Frank Perdue’s perceived quality scale Model is based on

• building a brand out of a commodity. Perdue proved by

• creating branded chicken out of commodity chicken in U.S.A.

• According to Perdue the value of a particular brand is defined

• Value = Quality Price

• = Tangible Qlty + Intangible qlty

• Price• = Product Qlty +Service

qlty• Price

Brand Equity Illustration : Perdue's model

Proprietary Brand assets

like regd trademarks,

patents, logos etc.

Brand Equity

Brand awarenes

s

Perceived

Quality

Loyalty Price

premium

Steps to create a brand out of anexisting commodity

Step 1: Conduct an attribute research

Step 2: Find out the current benefits of the

commodity that the customers are availing.

Step 3: Estimate the gap between what is desired and what if

offered in each of the attribute parameter.

• Step 4: Research and development to bridge the gaps

• Step 5: Evaluate the perceived quality and performance by giving samples for feedback relative to the commodity.

• Step 6: Evaluate a suitable price which gives the customers value for money.

Brand Value

Filters

Impact

Investment in the Marketing

• The first line shows the 4 stages of the brand value chain.

• The second line shows multipliers, or filters, between these stages. These multipliers are factors that influence the impact of one stage on the subsequent stage.

• First, brands must invest in the marketing program in such areas as the Product, Employees, or advertising.

• All of these factors affect brand value in the future. Program quality factors such as distinctiveness of commercials or consistency of service determine how much the first stage

• influences the second stage, customer mindset.

Customer Mindset• Customer mindset includes the

5 A’s: awareness, associations, attitudes, attachment, and activity.

• These dimensions are hierarchical in nature so that awareness supports consumers’ ability to make brand associations.

• associations, in turn, drive attitudes which can lead to

attachment and ultimately activity.

• Translation of the 5 A’s to brand value depends on

• multipliers related to marketplace conditions such as competitive reactions and support from

• channels or intermediaries

• Customer size.

Shareholder value

• The final stage of the brand value chain is shareholder value. Measurements in this stage include

• Stock price, price/earnings ratios, and market capitalization. Taken together, these stages allow managers to evaluate the value of their brand and can suggest where improvements can be made

Market Performance• This is the stage where brand

performance can be measured in the marketplace.

• Price premiums and price elasticity demonstrate the brand’s ability to charge a premium,

• Market share demonstrates the brand’s ability to drive sales, expansion success is the brand’s

• opportunity to increase revenue streams, and cost savings are possible if the consumers 'knowledge is strong enough that marketing expenditures can be decreased while maintaining the same effectiveness

• . Finally, the first 5 factors determine a brand’s ability to have profitable sales.

• These factors ultimately lead to shareholder value, but only after investor sentiment is included in the calculation. Market forces such as growth potential and risk profile can affect the ultimate evaluation.

Starbucks Transformed Coffee From A Commodity Into A $4 Spree

• A brand is an entity that engenders an emotional connection with a consumer.

• Consumers emotionally connect with brands when the brands repeatedly provide something that the consumer wants, desires, or needs.

"No one is going to pick up your product and try it if they don't want to buy into the experience”. Stanley Hainsworth- VP global creative

• The concept of a person not knowing that they need something is a fascinating one. Clearly, there were millions of coffee shops all over the world before Starbucks launched its particular brand of coffee shop

when people are surprised or delighted by how a brand can change their lives by just making it a little bit better--or a little bit more fun or a little more performance-oriented--that's when they start creating a connection with that brand.

• Every brand has a story, whether it's the founder's story or the brand's reason for being. Some brands have never told their story well, or have lost their story. Microsoft is a good example of a brand that's never told its story well. It's a huge consumer product software platform, a mega conglomerate, and there's no love there. There's no emotional story to rally around. The Bill Gates story is such an incredible story, but it's never really been expressed by the brand.

Brand Development• The first stage of brand

development is identity. At this stage, consumers are just beginning to understand what the brand is.

• Salience refers to how easily or often a consumer thinks of the brand, especially at the right place and right time.

• 2nd stage - meaning. • consumers begin to understand

points of difference and points of parity such as performance and reliability.

Brand Development• 3rd stage - response, which is

where consumers judge the brand with their

• heads and hearts. Consumers judge factors such as credibility, expertise, and trustworthiness.

• Feelings at this stage can be divided into two categories: experiential and enduring. Warmth, fun, and excitement are experiential feelings. They are more immediate and short-lived than enduring feelings

• Enduring feelings, such as security, social approval, and self-respect, are private and potentially part of day-to-day life. The final stage is resonance, or intense, active loyalty.

• This is where customers feel a connection or sense of community with the brand and they would miss it if it went away.

Brand Building Process…

3 principles in managing brands.

• First, brand building is a considered process that entails making the right investments at the right time.

• Second, what those investments are and when they should be made will be partly determined by industry forces.

• Third, whatever the industry, brand building calls for major marketing muscle.

Building a Brand…

• When You are building a brand….• Superior insight into customer needs• Ability to devise product/services that

powerfully meet those needs• Agility to redefine its offering as those

needs change• Creativity to produce exciting and

compelling advertising

Tangibles

ShapeColorSizeModelsPriceFeaturesBenefits

Intangibles

• Company name• Brand name• Slogan and its

underlying associations

• Perceived quality• Brand awareness

• Customer base• Trademarks and

patents• Channel relationships• Customer loyalty• Customer confidence• Competitive

advantage

When creating a brand

• Choosing a brand Name• Developing rich associations and promises• Manage customer brand contacts to meet and

exceed customer expectations

Porters….. Approach

• Product differentiator• Low cost leader• ‘Nicher’

• What are Brand Elements…….

Selecting a Brand Name

• Product benefits• Product quality• Descriptive brand

names • Be easy to

pronounce/remember/recognize/ simplicity

• Be distinctive/ Unique/ Differentiated

• Simplicity and ease of pronunciation and spelling

• Familiarity and meaningfulness

• Not have poor meanings in other countries or languages

Brand associations…..

• Logos & symbols

• Characters

• Slogans

• Packaging

'the world's local bank',

What are brand ambassadors…

• These are used to create the Brand personality, just like a human being. Therefore in some way the values and personality of the ambassador rubs off into the brand.

• Hence the brand and choice of the ambassador must fit.

Brand Status

Step up advertising Cash cow. Need to sustain brand building activities

Product should be phased out

Troubled brand. Product up gradation required

Esteem

Familiarity

Sub dimensions of BB Model

Category identification Need satisfied

Primary characteristicsProduct featuresProduct reliabilityDurability & serviceabilityService effectivenessEfficiency & empathyStyle, design & price

User profilesPersonality & usage situationsPersonality & valuesHistory, heritage & experiences

WarmthFunExcitementSecurity, social approval, self respect

QualitycredibilityConsiderationsuperiority

LoyaltyAttachmentCommunityEngagement

Sub dimensions of BB Model

Category identification Need satisfied

Primary characteristicsProduct featuresProduct reliabilityDurability & serviceabilityService effectivenessEfficiency & empathyStyle, design & price

User profilesPersonality & usage situationsPersonality & valuesHistory, heritage & experiences

WarmthFunExcitementSecurity, social approval, self respect

QualitycredibilityConsiderationsuperiority

LoyaltyAttachmentCommunityEngagement

Sub dimensions of BB Model

Category identification Need satisfied

Primary characteristicsProduct featuresProduct reliabilityDurability & serviceabilityService effectivenessEfficiency & empathyStyle, design & price

User profilesPersonality & usage situationsPersonality & valuesHistory, heritage & experiences

WarmthFunExcitementSecurity, social approval, self respect

QualitycredibilityConsiderationsuperiority

LoyaltyAttachmentCommunityEngagement