Chapter 1 —Brands and Brand Management
What is a brand?
Brand: a name, term, sign, symbol or design, or a combination of them, intended to identify the
goods and services if one seller or group of sellers and to differentiate them from those of
competition
Technically speaking—whenever a marketer creates a name, logo, or symbol of a new product
he/she has created a brand
Something that has actually created a certain amount if awareness, reputation, prominence etc
Brand elements: components of a brand that identify and differentiate it
o Name o Symbol
o Colour o Design
Capital B Brand concept
o Refers to the premium of recognizable names as compared to its generic equivalent
Ex. Coca cola has 72% premium over PC brand cola
Brands vs. products
Product: anything we can offer to a market for attention, acquisition, use and consumption that
might satisfy a need or want
o Physical good o A person o Idea
o Service o Organization
o Retail outlet o Place
5 levels of meaning for a product
o Core benefit level: fundamental need or want that consumers satisfy by consuming the
product or service
o Generic product level: stripped down, no frills version of the product that adequately
performs the product function
o Expected product level: set of attributes or characteristics that buyers normally expect and
agree to when they purchase a product
o Augmented product level: additional product attributes, benefits, or related services that
distinguish the product from competitors
o Potential product level: all the augmentations and transformations that a product might
ultimately undergo in the future
A brand is therefore more than a product, because it can have dimensions that differentiate it in
some way from other products designed to satisfy the same need
o Rational and tangible—related to product performance of the brand
o Symbolic and intangible—related to what the brand represents
Why do brands matter?
Consumers Manufacturers
Identification of source of product Means of identification to simplify handling or tracing
Assignment of responsibility to product makerMeans of legally protecting unique features
Risk reducer Signal of quality level to satisfied customers
Search cost reducer Means of endowing products with unique associations
Promise, bond or pact with maker of a productSource of competitive advantage
Symbolic device Source of financial returns
Signal of quality
Search goods: products that can be evaluated by visual inspection (groceries) Experience goods: product trial and experience is necessary (automobile tires)
Credence goods: rarely learn product attributes (life insurance)
Types of risks
o Functional risks—the product does not perform up to expectations
o Physical risks—the product poses a threat to the physical well-being or health of the user or
others
o Financial risks—the product is not worth the price paid
o Social risks—the product results in embarrassment from others
o Psychological risks—the product affect the mental wellbeing of the user
o Time risks—the failure of the product results in an opportunity cost of finding another
satisfactory product
Challenges in branding
Savvy customers Fragmenting media coverage
More complex brand families and portfolios Eroding traditional media effectiveness
Maturing markets Emerging new communication option
More sophisticated and increasing Increasing promotional expenditures
competition Decreasing advertising expenditures
Difficultly in differentiating Increase cost of product introduction and
Decreasing brand loyalty in many categories support
Growth of private labels Short term performance orientation
Increasing trade power Increasing job turnover
Can everything be branded?
A brand is something that resides in the minds of consumers
o Perceptual entity rooted in reality, but it reflects the perceptions and perhaps even the
idiosyncrasies of consumers
The key to branding is that consumers perceive differences among brands in a product category
Commodity: a product so basic that it cannot be physically differentiated in the mind of the
consumer
Physical goods
As more and more different kinds of products are sold or promoted directly to consumers, the
adoption of modern marketing practises and branding has spread further
Brands have begun to emerge among certain types of physical goods that never supported brands
before
B2B products
o Creates a positive image and reputation for the company as a whole
o Creates goodwill
o Creates valuable reassurance
o Strong competitive advantages
o Very complex
o Challenge for some: de-commoditizing themselves to create product and service differences
High tech products o Marketing skills are playing an increasingly important role
o Speed and brevity of technology life cycles cause unique branding challenges
o Trust is crucial in the branding
o Mass market advertising
Services
Pervasiveness of service branding and its sophistication have accelerated in the past decade
Less tangible than products and more likely to vary in quality, depending on the particular person or
people providing them
Way to address intangibility and variability problems
Identify and provide meaning to the different services provided by the firm
Competitive weapon
Effective way to signal to consumers that the firm has designed a particular service offering that is
special and deserving of its name
Retailers and distributors
Can generate consumer interest, patronage, and loyalty in a store
Create an image and establish positioning
Can create own brand image by attaching unique associations to the quality of their service, product
assortment and merchandising, pricing and credit policy
Can introduce their own brands (store brands/private labels)
o Another way the retailer to increase customer loyalty and generate higher margins of profits
Online products and services
Critical to create unique aspects of the brand on some dimension important to consumers
o Convenience o
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