Corporate Image & Brand Management

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall

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2 Chapter Two

Corporate Image and

Brand Management


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• How important are brand names?

• How important are brand names for clothes?

• In what product categories are brand names important?

• What product categories are brand names not important?

• What is your image of Gucci?

• What determines your image of Gucci?

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Chapter Overview

• Managing a corporation’s image

• Managing brands

• Issues associated with developing and promoting brand names and logos

• Importance of packaging and labels

• Developing brand and corporate positioning strategies

Brand and Corporate

Image Management 2


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A corporate

image

advertisement

by State Farm


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Components of a Corporate Image Study by Edelman Asia Pacific

• Quality of goods and services.

• Willingness of firm to stand behind its products.

• Perception of how the firm deals with

customers.

Source: Arun Sudhaman, “Brand Quality Still Key to Corporate Reputation: Edelman,”

Media Asia, November 19, 2004, p. 8.


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Tangible Elements Intangible Elements

1. Goods and services sold.

2. Retail outlets where product

is sold.

3. Factories where product is

produced.

4. Advertising, promotions, and

other forms of communications.

5. Corporate name and logo

6. Packages and labels

7. Employees

1. Corporate, personnel, and

environmental policies.

2. Ideals and beliefs of corporate

personnel.

3. Culture of country and location

of the company.

4. Media reports.

F I G U R E 2 . 1

Components of a Corporate Image


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Interview with Bob Baxter, Manager of Marketing Research

Mercedes Benz of North America

Before watching this

interview:

What word(s) would you use

to describe the Mercedes

Benz car? What is your

image of the Mercedes?

After watching this interview:

What would you do if you

were Bob Baxter?

Discussion Slide

Click picture to play video.


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Role of Corporate Image

• Consumer perspective.

• Business-to-business perspective.

• Company perspective.

Sony’s Web site is continually updated, but still retains a consistent corporate image.


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Consumer Perspective

• Positive assurance

• Unfamiliar settings

• Little or no previous experience

• Reduces search time

• Provides psychological reinforcement

• Social acceptance


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Company Perspective

• Extension of feelings to new products

• Ability to charge more

• Consumer loyalty

• More frequent purchases by customers

• Positive word-of-mouth

• Attracts higher quality employees

• More favorable ratings


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Top 10 Global Corporate Brands

Coca-Cola $ 65.3

Microsoft $ 58.7

IBM $ 57.1

General Electric $ 51.5

Nokia $ 33.7

Toyota $ 32.1

Intel $ 30.9

McDonald’s $ 29.4

Disney $ 29.2

Mercedes Benz $ 23.6

Brand Value ($billion)

Source: Based on “The 100 Top Brands,” Business Week (August 6, 2007), pp. 59-64.


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Corporate Image

1. Accurate reflection of firm

2. Reinforcing

3. Rejuvenating an image

4. Changing an image

5. Negative or bad press


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Promoting the Right Image

• Creating the right image.

• Conveys a clear message about the organization.

• Should portray the nature of the firm.

• Fit with products being sold.

• Rejuvenating an image.

• Easier than changing a well-established image.

• Add new elements but continue current image.

• Changing an image.

– Extremely difficult.

– Necessary when

• Target market has shrunk or disappeared.

• Current image not consistent with industry trends.


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This Family Circle ad aims to change the magazine’s image, reflecting

changes in culture,

What does this ad say about the contemporary “family woman” versus the

one of 30 years ago?


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What image is being conveyed by

this BMW advertisement?

What image is being conveyed by

the BMW Motorcycles Web site?

http://www.bmwmotorcycles.com

Are the images consistent?

Click image to enlarge.

http://www.bmwmotorcycles.com/


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Corporate Names

• Overt names

• Implied names

• Conceptual names

• Iconoclastic names


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Iconoclastic Names

Skeeter Boats

Yamaha


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• Should be easily recognizable.

• Should be familiar.

• Should elicit a consensual meaning among firm’s target market.

• Stimulus codeability

• Should evoke positive feelings.

F I G U R E 2 .4

Tests of Quality Logos and Corporate Names


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Benefits of Logo Recognizability

Aids in recall of specific brands.

Aids in recall of advertisements.

Reduces shopping effort.

Reduces search time and evaluation

of alternatives.


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Black – seriousness, distinctiveness, boldness, power, sophistication, and tradition.

Blue – authority, dignity, security, faithfulness, heritage, corporate stability, and trust.

Brown/gold – history, utility, earthiness, richness, tradition, and conservative.

Gray/silver – somberness, authority, practicality, corporate mentality, and trust.

Green – tranquility, health, freshness, stability, and appetite.

Orange – fun, cheerfulness, warm exuberance, health, and youth.

What colors should you use in your logo?

Source: “Jared McCarthy, “Logos: What Makes Them Work (Part 1of 2),”

(www.marketingprofs.com/5/mccarthy4.asp), February 22, 2005.

http://www.marketingprofs.com/5/mccarthy4.asp


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Pink – femininity, innocence, softness, health, and

youth.

Purple – sophistication, spirituality, wealth,

royalty, youth, and mystery.

Red – aggressiveness, passion, strength, vitality,

fear, speed, and appetite.

White/silver – purity, truthfulness, faith,

contemporary, refined, and wealth.

Yellow – youth, positive feelings, sunshine,

cowardice, refinement, caution, and appetite.

What colors should you use in your logo?

Source: “Jared McCarthy, “Logos: What Makes Them Work (Part 1of 2),”

(www.marketingprofs.com/5/mccarthy4.asp), February 22, 2005.

http://www.marketingprofs.com/5/mccarthy4.asp


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Logo Recognizability

McDonald’s Golden Arches logo is recognizable

enough to stand on its own.


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Companies often

create product icons

to develop an identity

for their products.

Why is the

Mr. Clean icon

an effective

representative

for its product?


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Branding

• Provides quality assurance.

• Reduces search time.

• Allows a company to charge more.

• Reduces brand parity.

• Consumers choose a brand because it is:

– Salient

– Memorable

– Noteworthy


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Branding If you didn’t find the brand you wanted, would you

be likely to buy another brand?

Greeting cards 68%

Groceries and canned food 67%

Women’s apparel 50%

Men’s apparel 55%

Toys 47%

Candy 47%

Beverages 49%

Consumer electronics 40%

Computer software 35%

Source: Debbie Howell, “Today’s Consumers More Open To Try New Brands,” DSN

Retailing Today, vol. 43, No. 20 (October 25, 2004), pp. 29-31.


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Developing a Strong Brand Name

• What are the most compelling benefits?

• What emotions are elicited by the brand

either during or after the purchase?

• What one word best describes the brand?

• What is important to consumers in the

purchase of the product?

Begins with understanding why consumers buy a brand.


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• Higher prices

• Higher gross margins

• Channel power

• Additional retail shelf space

• Reduces customer switching

behavior

• Prevents erosion of market share

F I G U R E 2 .6

Benefits of Brand Equity


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Brand Equity

Mercedes Benz has developed a high level of brand equity.


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1. Research and analyze what it would

take to make the brand distinctive.

2. Engage in continuous innovation.

3. Move fast.

4. Integrate new and old media.

5. Focus on domination.

F I G U R E 2 .7

Steps in Building Brand Equity


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Measuring Brand Equity Brand Metrics

• Attitudinal measures

• Awareness

• Recall

• Recognition

• Brand power index (BPI)

• Most preferred brand (DSN Retailing)

• Revenue premium approach

Brand metrics measure return on branding investments.


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Source: Adapted from Fred Crawford, “Branding Isn’t Like High School,” Retail Merchandiser,

Vol. 47, No. 6 (July/August 2007), pp. S4-S9.

Brand Trust Rate Distrust Rate BPI

Sony 9.2% 1.8% 75.1

Johnson & Johnson 5.7% 0.5% 55.3

Kraft 5.2$ 0.6% 48.7

Procter& Gamble 5.8% 1.1% 48.2

Campbell’s 3.5% 0.4% 32.9

Toyota 4.1% 1.2% 28.0

Tylenol 3.2% 0.6% 27.2

Dell 5.1% 2.1% 27.0

General Mills 2.7% 0.2% 25.9

Hewlett-Packard 4.0% 1.5% 23.5

BPI = awareness, trust, and distrust.

F I G U R E 2 .8

Top 10 Most Powerful Brands (AlixPartners)


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Source: Adapted from Debbie Howell, “Top Brands,” DSN Retailing Today, Vol. 44, No. 20 (October 24, 2005), pp. 38-42.

1. Hanes (39%)

2. Levi’s (10%)

3. Victoria’s Secret (6%)

4. Liz Claiborne (4%)

5. Nike (4%)

6. Fruit-of-the-Loom (4%)

1. Coke (26%)

2. Pepsi (22%)

3. Dr. Pepper (6%)

4. Mountain Dew (5%)

1. Frito Lay/Lays (19%)

2. Doritos (10%)

3. Hershey’s (6%)

4. Pringles (6%)

5. Oreos (5%)

1. Sony (27%)

2. RCA (6%)

3. Panasonic (6%)

4. Dell (5%)

5. Duracell (4%)

Consumer Electronics Snacks

Beverages Women’s Apparel

F I G U R E 2 .9

Most Preferred Brands (DSN Retailing)


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Types of Brands

Family brands

Brand extension

Flanker brand

Co-branding

Ingredient branding

Cooperative branding

Complementary branding

Private brands


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Head & Shoulders is

one of the brands

sold by Procter &

Gamble.

Access their Web

site to see what

other brands they

sell in the United

States as well as

other countries.

http://www.pg.com

http://www.pg.com/


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Ingredient Branding

Cooperative Branding

Complementary Branding

Co- Branding

F I G U R E 2 .11

Forms of Co-Branding


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Growth of Private Brands

•15% of all retail sales.

•19% of food sales

•64% increase in store brand sales.

•30% increase in manufacturers’ brand sales

Last 10 years:


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Improved quality.

Perceived as a value purchase.

Higher loyalty towards retail outlets and lower

loyalty towards specific brands.

Used to differentiate retail outlets.

Increased advertising of private brands.

Increased quality of in-store displays and

packaging of private brands.

F I G U R E 2 .12

Changes in Private Labels


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15%

18%21% 21%

18%

45%

16%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Saks' DSG Dillard's May

Department

Store

Goody's

Family

Clothing

Nordstrom JP Penney

(apparel

only)

Federated

Perc

ent

of

Tota

l S

ale

s

Source: Thomas J. Ryan, “Private Labels: Strong, Strategic & Growing, Apparel Magazine, Vol. 44, No. 10

(June 2003), pp. 32-39.

Private Label Sales as a Percentage of Total Sales


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Focus on core brands

Increase advertising

Introduce new products

Focus on in-store selling, packaging

Use alternative methods of marketing

Source: Adapted from Vanessa L. Facenda, “A Swift Kick to the Privates,” Brandweek,

Vol. 48, No. 31 (September 3, 2007), pp. 24-28.

F I G U R E 2 .13

Strategies Used to Combat Private Labels


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Packaging • Traditional elements

• Protect the product inside

• Provide for ease of shipping, moving, and handling

• Provide for easy placement on store shelves

• Prevent or reduce the possibility of theft

• Prevent tampering

• New trends • Meet consumer needs for speed, convenience, and

portability

• Must be contemporary and striking

• Must be designed for ease of use


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Labels • Must meet legal requirements.

• Provide another marketing opportunity.


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Positioning Approaches

Attributes

Competitors

Use or application

Price/quality

Product user

Product class

Cultural symbol

•Consumer markets

•B-to-B markets

•International markets

1. Is relative to competition.

2. Exists in the mind of the consumer.


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A business-to-business

advertisement positioned by

the product’s attributes: the

brightness of the Sony

projector.

An advertisement by Stetson

positioned by cultural

symbols.


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Ethical Issues

• Brand infringement

• Brand name becomes a generic term

• Domain or cyber squatting


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International Implications

• Adaptation vs. standardization

• Standardization reduces costs

• Shrinking world standardization

• High-profile, high-involvement – global brand

• Low-involvement products – local brand

• Packaging and labeling

• Image and positioning issues

Documents

Corporate Image & Brand Management