Brands and Stakeholder Relationships

Key Points: What does it mean to say that a brand is more than

a product? Explain the three steps in building a brand. What are the key factors in creating brand

relationships? What is brand equity and how is it affected by

brand relationships?

Marketing evolved from Economics

During 20th century, focus on exchange through manipulating the price, promotion, distribution of ideas, goods and services to satisfy customers and organisational objectives 

“Rational Consumer” not swayed by image or intangibles

Must constantly innovate, improve product quality Brands = identification to distinguish your product

from competitors

But now…..

70% of “tangible” (physical) innovations are copied by competitors within 1year

Physical attributes get you in to a market but are not sustainable competitive advantage

What “brand” means

A perception resulting from experiences with, and information about, a company or a line of products

Exists only in people’s hearts and minds Differentiates products from competitors Makes a promise to customers

Brand value

Nike versus New Balance

Coke versus Cott

Laurier versus Laurentian

Brand value

You “believe” one brand performs better You “trust” the performance claims You buy “benefits” not products

Branding

Process of creating a brand image that

engages the hearts and minds of customers

Branding

Really, at its core, branding is simply marking something and saying, “This is from me.”

Karl-Heinz Kalbfell, Global Head of Brand

and Product Strategy, BMW Group

Intangible Attributes

Intangibles are important in brand building: Harder for competitors to copy More likely to involve consumers emotionally

Emotion triggers brain 3000x faster than rational thought

More consistent with how consumers choose

Brand more than a logo

Not just a name (McDonalds) Not just symbol (golden arches) More than identification How you feel and what you think when

you see the name/symbol No brand = commodity

New Brand definitions...

“A perception of an integrated bundle of information and experiences that distinguishes a company and/or its product offerings from the competition.”

“The sum of a customer’s experiences with a product and/or company.”

Tom Duncan

New Brand definitions...

“The visual, emotional and cultural image

that surrounds your association or

organization and its products and services.”

Where does a “Brand” come from?

Customers form perceptions from: Cues Signals Other types of communication messages Experiences

Both products and companies are considered brands

Cues

Attributes provide cues to support perceptions you want to create

What Does a “Brand” Do?

Saves consumers time Creates trust or level of expectation Provides psychological attributes

Brand Loyalty

What loyalty cards do you use? What role do they play in the MC program?

Brand Building

“Building a brand is all about conveying

proof points that whatever product you pitch

is worth my attention and my hard-earned dollar as a consumer and as a business owner.”

Steven Cody, Managing Partner, PepperCom

The Brand Promise

Essence of a brand is a promise Brand management = managing customer

expectations Don’t make promises you can’t deliver

The Coca-Cola Promise

The Coca-Cola company exists to benefit and refresh everyone it touches.

The basic proposition of our business is simple, solid and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business.

http://www2.coca-cola.com/ourcompany/ourpromise.html

Employee Marketing

Employees ultimately deliver the brand promise every day

If corporate culture is the brand…. Then employee marketing is the branding

Brand Equity

Two basic components determine a company or a brand’s value:

Physical net assets, e.g. plants, equipment, and land

Brand equity – the intangible value of a company beyond its physical net assets

Interbrand’s Most Valuable Brands

July 28, 2006 Rankings

1. Coca-Cola $67,000

2. Microsoft 56,927

3. IBM 56,201

4. GE 48,907

5. Intel 32,319

6. Nokia 30,131

7. Toyota 27,941

8. Disney 27,848

9. McDonald’s 27,501

10. Mercedes 21,795Source: www.interbrand.com/best_brands

How are Brands Evaluated?

Calculate overall brand sales Project net earnings Deduct projected earnings from ‘tangible assets’ Use market research to isolate “brand” from

remaining intangible assets (e.g.patents, customer lists, etc.)

Testing Brand Value

Conjoint Analysis Statistical method that captures trade-offs: service vs. price vs. features vs. brand name

Dollarmetric Scale AMC unidentified model – asked what would

customers pay for it Identical TV sets examined by consumers

Vs.Vs.

Five Elements of Brand Equity

Brand-name awareness Brand associations Perceived quality Proprietary brand assets Brand loyalty

Steps in Building a Brand (V1)

1. Select a name and symbol

2. Create awareness and brand identity

3. Position the brand

4. Create a brand image

5. Create trust/build a relationshipfrom Duncan first edition

Steps in Building a Brand (V2)

1. Select desired brand position

2. Develop brand identification

3. Create a brand imagefrom Duncan second edition

1. Positioning

Defined by consumers on important attributes

Place in mind relative to competing products

Position happens - planned or not

Positioning

G

Against aCompetitor

Against aCompetitor

UsageOccasions

UsageOccasions

Away fromCompetitors

Away fromCompetitors

ProductAttributes

ProductAttributes

ProductClass

ProductClass

BenefitsOffered

BenefitsOffered

UsersUsers

B D

C

G

F

A

E

Positioning Map

Luxury Automobile MarketHigh Price

BMW750iL

ToyotaSupra

Nissan300ZX

MercedesBenz 400EPorsche

Audi 325iCabriolet

Low Price

SedanSports Car

Jaguar XJSAudi Quattro

Nissan Infiniti

Toyota Lexus

CadillacAllante

Ferrari

LotusTurbo Esprit

2. Develop Brand Identification

Choose brand name Has to be memorable

How to do this? Benefit description Association Distinctive Pronounceable

2. Develop Brand Identification

Choose brand symbol An effective logo:

Communicates brand image and positioning Is simple, distinctive, and relevant Often legally protected as trademarks

3. Create Brand Image

An impression created by brand messages and experiences and assimilated into a perception or impression of the brand

E.g. Marlboro Man

Brand Icons of the 20th Century

1. The Marlboro Man2. Ronald McDonald3. The Green Giant4. Betty Crocker5. The Energizer Bunny6. The Pillsbury Doughboy7. Aunt Jemima8. The Michelin Man9. Tony the Tiger10. Elsie the Cow

Rankings based on an Advertising Age survey

Branding Strategies

Ways of maximizing the communication impact of brands

Critical elements include: Brand Extensions Multi-tier branding Co-branding Ingredient branding

Brand “Personality”

Anthropomorphism - giving human characteristics to inanimate objects

If the brand were a person, what kind of person would it be?

E.g. Mercedes vs Miata Male or Female? Young or Old? How would it dress? What music would it listen to? Where would you see it?

Y&R Brand Asset Valuator

Proprietary 2-part model part 1 - strength of the brand image part 2 - brand personality scale

Y&R Brand Asset Valuator

Differentiation

Relevance

Esteem

Knowledge

Brand Strength

Brand Status

BRAND IMAGE

Brand Personality Scale

Sincerity

Excitement

Sophistication

Competence

Ruggedness

Brand Brand PersonalityPersonality

“Is it on Brand?”

Would our brand say that? Would our brand do that? Is it consistent with our brand image and

personality?

Communication Style Guide

Graphic Standards Manual Gives direction for the appropriate use of the brand

or corporate identity symbols such as the logo, color palette, and other stylistic details

Consumers modify your brands

“In the old days, the successful communication of a

personality through advertising gave the brand stable meaning. Now consumers are more proactive in reshaping brands.”

Michael Solomon (Auburn)

Successful Brands

are visible have clarity are relevant have longevity

Brand mantra

3 words that capture the brand’s essence Nike: “Authentic athletic performance.” Disney: “Fun family entertainment.”