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BrandingBranding
McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.
Branding — Today’s Objectives
Objectives will be to:
Understand what a brand is and how the 2Is affect branding
Understand what brand equity is and how it is measured
Discuss how marketing programs build brand equity
Examine the seven-step branding process
Review two case studies in online branding
Discuss the effects of brand on the four customer relationship stages
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Chapter 12: Branding
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Some Internet Brands Have Become Major Players
Source: www.brandinstitute.com/bi_site/news_release_megabrands1098.htm
Exhibit 12.1: Examples of Internet Brands
Exhibit 12.2: Case Studies of Successful Online Branding Efforts
Branding
Online Branding and Selling Online
Intermediary/ Vertical Portal
e-Commerce
Business-to-
Consumer Ragu
American Airlines
Yahoo! CDNow
Business-to-
Business Boeing Cisco Systems Avnet NexPrise
Established as Traditional Brand
Established as Online Brand
Source: PricewaterhouseCoopers Moneytree Report 2000.
IndividualizationIndividualization InteractivityInteractivity
CommunityCommunity
Interactivity creates value because the brand is tailored to the individual
Customers gain a sense of control with respect to the nature and timing of their interactions with the brand
There is a danger that the brand will stray from its core personality
Responsiveness becomes a key brand attribute as customers recognize that their concerns are heard and responded to across multiple channels
The frequency of interaction is increased — leading to the need to freshen content and target messages to specific usage occasions
Customers expect the brand to evolve in response to their needs and desires
Exhibit 12.3: The 2Is and Branding
Should Offline Firms Create New Online Brands?
Keep the Same Brand Build a New Brand
It takes an enormous amount of time and money to build a strong brand name
Customers who purchase online are assured that services are available offline
It is difficult to uncover interesting new brand names
The online brand and the offline brand can have a synergistic effect
Target customers will not be confused by brand offerings appearing online
Using an existing brand limits the growth of the user base
Existing offline brands “don’t get the Net”
It is possible to sign up more partners when a third-party name is used
Point-Counterpoint
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Quotes on Online Branding
“E-branding is more important [than e-commerce]. And it must come first. Because few people will buy your stuff – online or off – unless you are top-of-mind.” – Annette Hamilton, Executive Producer, ZDNet
“Brand is the price of entry [to the Internet], not the winning strategy.” – Dylan Tweney, infoNet
“By the time your potential customers log on, they already know what they’re looking for, and they often know from whom they want to buy it. … They’re just not listening to branding messages anymore.” – Michael Fischler, Principal, The Pubs Group
Quotes on Online Branding (cont.)
“Brands stand as comfort anchors in the sea of confusion, fear, and doubt. In dynamic markets, strong brands have more value than ever, precisely because of the speed with which these markets move.” – Chuck Pettis, Technobranding
“It took more than 50 years for Coca-Cola to become a worldwide market leader, but only five years for online search engine Yahoo to gain market dominance. The role of the brand has changed dramatically and has created a vacuum between offline and online brands.” – Mark Lindstrom, Executive Director, ZIVO
“A company’s website is the brand. It’s the hub of consumer experience, the place where all aspects of a company, from its annual report to its products to its support, intersect. It’s the company in a nutshell, all there in a way that just is not possible in the analog world.” – Sean Carton, Carton Donofrio Interactive
Product, Price, Community, Communication and Distribution Programs
Wraparounds
Exhibit 12.4: A Simple Conceptual Model of Brand Equity
Core Product/ Core Product/ ServiceService
Source: Keller (1996), Aaker (1996), Strategic Market Research Group, Marketspace Analysis
. . . provides positive consumer responses . . .A good brand . . .
Customer Benefits
Confidence
Loyalty
Satisfaction
Customer Benefits
Confidence
Loyalty
Satisfaction
Firm Benefits
Reduced marketing costs
Increased margins
Opportunity for brand extensions
Firm Benefits
Reduced marketing costs
Increased margins
Opportunity for brand extensions
. . . and benefits both target customers and firm
Brand Awareness
Depth
Breadth
Brand Awareness
Depth
Breadth
Brand Associations
Strength– Relevant– Consistent
Valence
Uniqueness– Memorable– Distinctive
Brand Associations
Strength– Relevant– Consistent
Valence
Uniqueness– Memorable– Distinctive
Fogdog Brand Perceptions
Emphasize prices and selection benefits
Selective distribution Competitive pricing
Exhibit 12.5: A Model of FogDog Branding
Gift shopping service MyFogdog discounts and
benefits “How to buy” help Discussion groups by sport Fogdog Fetch helps you find
the right product
Low prices Selection breadth and depth
Product, Price, Community, Communication and Distribution Programs
Wraparounds
Core Product / Core Product / ServiceService
Do Strong Online Brands Matter?
A Strong Brand Essential Strength of Brand
Is Not That Important
A strong brand name provides a clear presence in the market
Strong brands attract customers
Strong brands carry positive associations with consumers
Clear brands are associated with higher conversion rates
All current online “winners” have strong brands
Alliances — not strong brands — are the key to winning in the marketplace
Readily available third-party evaluators will increasingly influence online consumption
Speed to market is more important than branding
The trend toward customization is leading to an environment where the meaning of a “mega-brand” is no longer relevant
Current online winners may have strong brands, but so do a number of “big losers”
Point-Counterpoint
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Exhibit 12.7: Marketing Programs to Build Brand Equity
Brand Equity Brand Equity
Product Product
Pricing Pricing
Communication Communication
Promotional Program
Promotional Program
Distribution Distribution
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Clearly Define the Target AudienceClearly Define the Target Audience
Exhibit 12.8: A Seven-Step Branding Process
Step 1
Step 3
Step 2
Step 4
Step 5
Step 6
Step 7
Understand the Target CustomerUnderstand the Target Customer
Understand the CompetitionUnderstand the Competition
Design Compelling Brand IntentDesign Compelling Brand Intent
Identify Key Leverage Points in Customer Experience
Identify Key Leverage Points in Customer Experience
Execute the Branding StrategyExecute the Branding Strategy
Establish Feedback SystemsEstablish Feedback Systems
Exhibit 12.9: Similarities & Differences in Offline vs. Online Branding
Branding Element
Offline Online
1. Clearly Define the Brand Audience
Limited to manageable number of segments to prevent inconsistent messaging
Could include larger number of segments based on values or interests rather than demographics
2. Understand the Customer
Requires thorough understanding of environment, desired purchase and usage experience
Requires thorough understanding of desired purchase and usage experience in both the offline and online environment
3. Understand the Competition
Requires monitoring of competitor advertisements and activities
Competitor advertisements and some activities can be directly observed online
4. Design Compelling Brand Intent
Brand intent (desired positioning) designed to address the needs and beliefs of target segments
Greater opportunity for customization of key messages
5. Identify Key Leverage Points in Customer Experience
Buying process is typically a simplified representation of customer segment behavior with static leverage points
Buying process tends to be more dynamic and flexible
6. Execute the Branding Strategy
Strong, positive brands are built up over time
Image reinforced through variety of offline media
Marketing strategy includes plan for sequenced growth and adjustment of brand based on changing customer needs
Building brand awareness requires significant investment
Building brand loyalty takes time offline, especially because early customer receptivity to brands is difficult to assess (and usually involves market research)
Online interactions bring in added concerns of security and privacy
Limited familiarity with online brands makes fostering trust more difficult
With the ability to customize, one customer’s brand image may be different from another customer’s brand image
Customization for multiple segments and opportunity for early recognition of the changing customer requires a corresponding tailoring of brand intent
Building brand awareness requires significant investment, especially for those competitors who are not first in their category online
Brands have the potential to generate loyalty more quickly, especially if customers are targeted effectively
7. Establish Feedback Systems
Collecting and analyzing customer feedback is more time-consuming
Sophisticated tools exist for tracking online; allow for anonymous, interactive, quick feedback
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Exhibit 12.10: Citibank Online
Exhibit 12.11: Citibank Vs. Chase: Assessment of Key Branding Elements
Exhibit 12.12: Citibank Vs. Chase Assessment of Key Brand Attributes
Exhibit 12.13: CBS MarketWatch.com
Exhibit 12.14: CBS Marketwatch.com Vs. Bloomberg.com: Key Branding Elements
Exhibit 12.15: CBS Marketwatch.com Vs. Bloomberg.com: Key Brand Attributes
Exhibit 12.16: Brand as a Moderating Variable
Marketing Levers
Marketing Levers
Relationship Stages
Relationship Stages
For advertising, brand can enhance awareness
BrandBrand
Enhances or Detracts
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Branding and Four Key Stages of Customer Relationships
Offline advertising
Web price discount
Increased number of channel intermediaries
Online billboards
Direct mail
Targeted price promotions
Efficient site structure
Volume discounts
Personalized pages
Loyalty programs
Discontinue pricing discounts
Reduce advertising expenditures
Identify “departing friends”
Reduce customer care
AwarenessAwareness Exploration/Expansion
Exploration/Expansion CommitmentCommitment DissolutionDissolution
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Exhibit 12.17: EBay Vs. Amazon.com Auctions: Key Branding Elements
Exhibit 12.17: EBay Vs. Amazon.com Auctions: Key Branding Elements
Exhibit 12.18: EBay and Amazon.com Auctions: Key Attributes
Chapter 12: Branding
Defining Brand and Examining How the 2Is Affect Branding
What Is Brand Equity, and How Is It Measured?
How Marketing Programs Build Brand Equity
The Seven-Step Branding Process
Two Case Studies in Online Branding
Effects of Brand on the Four Customer Relationship Stages
EBay Example
Conclusion
Branding — Conclusion
Branding is fundamentally different from the other marketing activities — product, pricing, communication, community and distribution — in three ways:
Brands are reflections or outcomes of the firm’s marketing activities
Unlike the other activities, branding is an integral part of every marketing activity and strategy
Strong brands can be used to enhance the effectiveness of all other marketing activities
The branding process includes seven steps: 1) clearly define the target audience, 2) understand the target customer, 3) understand the competition, 4) design compelling BrandIntent, 5) identify key leverage points in customer experience, 6) execute the branding strategy and 7) establish feedback systems.
The presence of a strong brand enhances positive marketing activities such that awareness, exploration and commitment are more effectively established.