Entrepreneurship & organisations: influences and organizations
Brand equitymod
1. Difference Between Product and Brand
1.Product is made in 1. A brand is bought
a factory by the customer .
2. A product can be 2. A brand is unique.
copied.
3. A product can be quickly 3. A successful brand is
outdated. timeless
2. BRAND EQUITY
BRAND EQUITY : is a set of brand assets and
liabilities linked to a brand , its name and symbol ,
that add to or subtract from the value provided by
a product or service to a firm and /or to that firm’s
customers.
For assets or liabilities to underlie brand equity
they must be linked to the name and/or symbol of
the brand.
3. BRAND EQUITY
The assets and liabilities on which brand equity is
based can be grouped into 5 categories
1) Brand Loyalty
2) Name awareness
3) Perceived quality
4)Brand associations in addition
to perceived quality
5)other proprietary assets :
patents, trademarks,channel relationship etc.
4. • Reduces marketing
costs
• Trade Leverage
• Attracting new Provides value to
consumers customer by
enhancing
1) Creates Awareness customer’s:
Brand 2) Reassurance • Interpretation/
Loyalty • Time to respond to Processing of
competitive threats information
• Confidence in
purchase
• decision
Anchor to which other
• Use satisfaction
associations can be
attached
Brand • Familiarity-Liking Provides value to firm
Awareness • Signal of by enhancing :
Substance/Commitment
• Brand to be considered • Efficiency and
effectiveness of
marketing
Brand equity programs
• Reason – to –buy • Brand loyalty
• Prices/Margins
• Differentiate/Position • Brand extensions
• Price • Trade Leverage
Perceived
• Channel Member • Competitive
quality
interest advantage
• Extensions
• Help process/retrieve
information
• Differentiate /Position
Brand • Reason-to buy
• Create positive attitude
associations
/feelings
• Extensions
Competitive
Other advantage
proprietary
Brand assets
5. BRAND EQUITY
Name Awareness Perceived quality
Brand Associations
Brand Loyalty Other proprietary
brand assets
Brand Equity
Provides value to firm by
enhancing:-
Provides value to customer by
•Efficiency and effectiveness
enhancing customer’s
•of marketing programs
•Interpretation /Processing of •Prices/Margins
information.
•Brand Extensions
•Confidence in the purchase •Trade Leverage
decision.
•Competitive advantage
•Use satisfaction/delight
6. P& G- Believers in Brand Management
In 1879 , Harley Procter named his soap “IVORY”
The soap was promoted as “99 44/100 % pure” and that it floated.
The floatation property was created by production mistake which fed
air into the soap mixture.
Ivory was a remarkable product in a time when most soaps were
yellow or brown , irrated skin.
Also during those times the floatation value had practical value for
those who were frustrated trying to find their soap in water.
Well positioned soap----> pure, mild and floated.
The claims of purity and mildness were supported by white color,
name Ivory, the twin slogans and association with babies.
In 1941 , Lever Brothers launched “Swan “ to challenge “Ivory”, but
as there was no product difference , the brand failed.
8. A striking aspect of P& G has been its willingness to
develop competing brands (multi brand concept) in order
to serve new segments , even if new brands threaten
existing brands.
P&G has 10 brands in laundry detergent category which
reach a variety of segment s and has given P&G a 40%+
market share .
1) Ivory Snow : “ ninety-nine and forty-four one-
hundredths percent pure,’, the mild gentle soap for diapers
and baby clothes”
2) Tide--- For extra-tough family laundry jobs-”Tide’s in ,
dirt’s out”
9. Cheer -works in cold, warm or hot water- “ All temperature Cheer”
Gain- detergent with fragrance - “ Bursting with freshness”.
Bold 3 - includes fabric softener -” Cleans , softens and controls static
Dash- concentrated power, less suds to avoid clogging washing
machines
Dreft- with “Borax, nature’s natural sweetener “ for baby’s clothes
Oxydol:- contains bleach-for sparkling whites -with color safe bleach.
Era- concentrated liquid detergent-with proteins to clean stains
Solo- heavy duty with fabric softener
10. Brand Loyalty
Brand Loyalty pyramid
Committed
buyer
Likes the brand, considers
brand as a friend
Satisfied buyer with switching
costs
Habitual buyer- no reason to change
Switchers /price sensitive- indifferent- no brand loyalty
11. Measuring Brand Loyalty
Behavior Measures:
Repurchase rates: What % of Maruti Zen owners purchase Zen on
their next purchase
% of Purchases: of the last five purchases made by a customer,
what % went to each brand purchased?
Number of Brands Purchased: What % of coffee buyers bought only a
single brand?, two brands?
Switching costs: If it is expensive or risky for a firm or consumer to
change suppliers, then the brand loyalty is on the higher side.
E.g : Investment in computer system or software like SAP
12. Strategic value of Brand Loyalty
Reduced Marketing Costs: It is much less costly to retain
customers then to attract new one ( COST RATIO IS 1:4)
Trade leverage: Strong pull (brand loyalty) from
consumers will ensure preferred shelf space because stores
know that customers will have such brands on their
shopping list.
Attracting new customers:
Time to respond to competitive threats:If a competitor
develops a superior product , a loyal following will allow
the firm time needed for the product improvements to be
matched and neutralized.
13. Creating & Maintaining Brand Loyalty
Treat the customer Right
Stay close to customer
Measure/Manage Customer Satisfaction
Create switching cost
Provide extras
14. Creating & Maintaining Brand Loyalty
Measure / Manage Customer Satisfaction : Regular
surveys of customer satisfaction are useful in
understanding how customers feel and it also helps in
adjusting product and services.
Domino’s Pizza conducts weekly
phone surveys of customers measuring dimensions like
response time, lumpiness of dough, freshness of pepperoni
and attitude of delivery people.
A bonus pool is distributed based upon these
measures.
Create Switching costs: Reward loyalty directly. For e.g
The airlines frequent flyers program .
15. Brand Awareness
Ability of a potential buyer to recognize or recall that a
brand is a member of a certain product category.
Top of
Mind
Brand recall
Brand Recognition
Unaware of brand
The awareness Pyramid
16. Brand awareness creates value in the followingg ways :
1) Anchor to which
other associations can be attached : for e.g McDonalds:-
Golden arches, clean/efficient, kids , fun etc.
2) Familiarity/Liking: recognition provides the brand
with familiarity and people like the familiar.
3)Substance /commitment: The firm has been in
business for a long time. The firm is widely distributed and
the brand is successful.
4) Brands to consider ----- it enters the evoked or
consideration set.
17. How to achieve Awareness
Be different , Memorable:
Involve a slogan or jingle: e.g Lifebuoy hai jahan ,
tandorosti hai wahan.
Symbol exposure: colonel sanders --KFC, golden arches-
Mcdonalds---> symbol should closely associate with the
brand.
Publicity--- advertisement.
Event Sponsorship --- Femina Miss India, Manikchand
Filmfare awards.
Consider brand Extensions : one way to gain brand recall
is to put the name on other products.
18. Recognition v/s Recall- The Graveyard Model
High
Graveyard Brand
Recognition
Niche Brands
Low
Low Recall High
19. BRAND RECOGNITION
Brand Recognition: Familiarity and Liking :
Recognition reflects familiarity gained from past exposure .
Recognition doesn't necessarily involve remembering where the
brand was encountered before, why it differs from other brands ,
or even what the brand’s product class is.
It is simply remembering that there was a past exposure to the
brand.
When consumers see a brand and remember that they have seen it
before (perhaps even several times) , they realize that the
company is spending money to support the brand.
Since it is generally believed that companies will not spend money
on bad products , consumers take their recognition as a “signal”
that the brand is good.
20. Brand Recall
A brand (for e.g. HDFC Bank) is said to have recall if it
comes to consumers’ minds when its product class (for e.g.
, banking companies ) is mentioned.
Whether or not a customer recalls your brand can be the
deciding factor in getting on a shopping list or receiving a
chance to bid on a contract.
The graveyard model was developed by Young and
Rubicam Europe under the guidance of Jim Williams.
In this model , brands in a product class are plotted on a
recognition v/s recall graph.
21. The Graveyard Model
For e.g , the recall and recognition of each of the brands in
the automobile category could be measured and these
measurements could be used to position each brand on the
graph.
One finding consistent across dozens of product classes is
that brands tend to follow the curved line shown in the
figure.
There are two exceptions , each of which reveals the
importance of recall.
One exception is healthy niche brands , which fall below
the line because they are not known to a substantial group
of consumers , and therefore have relatively low overall
recognition.
22. The Graveyard Model
But because they do have high recall among their
respective loyal customer groups , their low recognition is
not necessarily an indication of poor performance.
And healthy niche players sometimes have the potential to
expand recognition and thus the scope of their customer
base.
The second exception is the graveyard , an area in the
upper left hand corner populated by brands with high
recognition but low recall.
Being in the graveyard can be deadly.
Customers know about the brand , but it will not come to
mind when considering a purchase .
23. The Graveyard Model
One point of the graveyard model is that high recognition
is not necessarily the mark of a strong brand –it is
associated with weak ones as well.
Movement towards the graveyard is associated with
sliding sales and market share.
If however , the brand is moving away from the
graveyard , sales and market share can be expected to
increase.
Thus the graveyard model provides evidence that recall is
as important as recognition.
24. Perceived Quality
Defn : customer’s perception of the overall
quality or superiority of a product or service
with respect to its intended purpose, relative
to alternatives.
25. Perceived Quality
Quality dimensions :
1) Performance : How well does a washing machine wash
clothes---> primary operating characteristics of service
2) Features: secondary elements like on/off timer in washing
machine etc.
3) Conformance with specifications: --- absence of defects-----
trouble free .
4) Reliability--- will the vacuum cleaner work the same way
each time it is used.
5) Durability: How long will the washing machine last
6) Serviceability: is the service system efficient ,
competent and convenient.
7) Fit and finish:- does the product look and
feel like a quality product.
26. Perceived Quality
Research has shown that in many product classes a key
dimension which is visible can be pivotable in affecting
perceptions.
1) Stereo Speakers: larger size means better sound
2) Tomato ketchup-- thickness means quality.
3) Supermarkets--- fresh products means overall
quality.
4) cars: a solid door-closure sound implies good
workmanship and a solid safe body.
5) lawn mover-- noise signals quality
27. 6) Cleaners: A scent like lemon signals cleaning
power
7) Medicine : for adults , bitter means better.
In addition to information about a brand’s product
features (intrinsic cues) there are a host of other
brand associations- such as the amount of
advertising used, the brand name or the price
(extrinsic cues) – that can influence perceived
quality.
28. Extrinsic cues – perceived quality
1) Advertising: The amount of advertising
supporting a brand can signal that the firm is
backing the brand.
This logically implies that it must be a superior
product.
2) Price as a quality cue: Chivas Regal was a
struggling brand until it decided to raise its price
higher than competitors’.Its sales increased
thereafter. Product itself was not changed.
29. The relevance of price as a quality cue will depend on
other cues available, the individual himself and the
product.
When intrinsic cues are available , people will be less
likely to rely on price.
The use of price as a quality cue will differ across product
classes
Product classes which are difficult to evaluate are more
likely to have price as a quality cue.
As per research, price tends to signal quality in wine,
perfume and durables.
30. Brand Associations
Apple produced a good computer , the
Apple 2, but created a great distinction.
It made using a computer a “ friendly” ,
unintimidating process. Everything at
Apple, from its logo to its down-to earth
founders , underscores its uniqueness –
Tom Peters
31. A brand association is anything ‘linked’ in
memory to a brand.
Thus McDonald’s could be linked to
- A character such as Ronald McDonald
- A Consumer segment such as kids
- A feeling such as having fun
- A symbol such as the Golden arches
32. There are 11 types of associations. They are
- Product attributes
- Intangibles
- Customer benefits
- Relative Price
- Use/ Application
- User/ Customer
33. - Celebrity/ Person
- Lifestyle / Personality
- Product class
- Competitors
- Country/ Geographic area
34. Product Attributes
Probably the most used positioning strategy
is to associate an object with a product
attribute or characteristic.
E.g
- Crest- strong association with cavity control
- Volvo – durability and safety
- BMW talks of performance with their tag
line , “The ultimate driving machine”
35. Positioning by Product attributes and benefits
: Colgate --- white strong teeth
Close-Up is positioned on fresh breath
Promise--- Gum care.
Car ads show technical features like MPFI, Power steering,
Delta –V technology etc.
Dettol : hygiene
36. Intangibles
An intangible factor is a general attribute ,
such as perceived quality, technological
leadership etc.
Customers perceive companies like Sony,
IBM as technology leaders without
knowing the specs of specific models or
exactly in what way they are superior
37. Customer Benefits
As most product attributes provide customer
benefits , there usually is a one-to one
correspondence between the two.
Cavity control is both a product characteristic of
Crest and a key customer benefit.
BMW is good handling (a product characteristic )
providing the customer driving satisfaction (a
customer benefit)
Benefits are normally two– rational benefit and
psychological benefit.
38. A rational benefit is closely linked to a
product attribute and would be part of a
rational decision process
A psychological benefit , often extremely
consequential in the attitude-formation
process, relates to what feelings are
engendered when buying and /or using the
brand.
39. Product Feature Rational Psychological
Benefit Benefit
Computer Bubble Memory Can’t lose your Job safety/
work security
computer Touch screen entry Easy to use Feeling
professional
Shampoo Built-in Full, thick hair Confidence about
conditioner looks
Shampoo Natural protein Safe to use every Exciting/sexy
day
Fairness cream Neem extracts Better skin shade Confidence about
looks
40. Country or Geographic area
A country can be a strong symbol, as it has close
connections with products, materials and
capabilities
E.g Germany- beer and upscale automobiles
Italy-shoes and leather goods
France- fashion and perfume
These associations can be exploited by associating
a brand with a country.
41. Use ,application, Occasion and
time :
The idea behind this positioning strategy is to find an
occasion or time of use
Thus you associate the brand with a use or application
Kellogg’s --- breakfast
Odomos-- USED AT NIGHT
Good Knight ---- to fight mosquitos at night
Arm and hammer baking soda--- extended its fresh/clean
postiioning as an odour destroying agent in refrigerators.
Campbell soup—lunch time product
42. Price – Quality:
Is a powerful approach particularly in a
developing economy like India.
In early 1970’s , Nirma positioned itself as good
quality product that lathered well, cleaned well
and the price was nearly 50% lower then Surf.
Timex use price quality positioning and succeeded
in USA.
Zenith used Price quality positioning for its Home
PCs----- value for money
43. Positioning by Price – Quality:
Another dimension of P-Q positioning is that the
product is positioned on high quality and price is
kept high to communicate this high quality.
For e.g In certain product categories it is not
possible to assess quality – Perfumes.
Premium products positioned at the high end of
the market use this positioning
e.g—Rolex, Mercedes, Rolls- Royce, Cartier etc.
44. Product User/customer
The brand manager can determine a target
audience for whom the product will be positioned
e.g --- Farex, Cerelac--- is for small Kids—(0-12
Months).
Cosmetics industry—
A) Noxell’s cover girl- product for wholesome,
healthy and blonde women
B) Revlon: associated with more sophisticated
women
45. Positioning By competitor
In most positioning strategies, the frame of reference is
one or more competitors.
e.g—Avis-”We’re number two, we try harder campaign
Sabroso a coffee liqueur positioned itself against the well
established Kahlua with respect to quality and also with
respect to the type of liqueur . Its print ad should two
bottles side by side and used the headlines “ Two great
imported coffee liqueurs. One with a great price.
Subaru
46. Positioning by cultural symbols
Marlboro cigarettes chose the American
cowboy as the central focus to help
differentiate its brand from competitors and
developed the Marlboro man.
Pillsbury’s doughboy
Air India’s Maharaja
47. Positioning by Product class
Some products need to make critical positioning
decisions that involve product-class associations.
For e.g--- Maxim freeze –dried coffee , the first
one in the market needed to position itself with
respect to regular and instant coffee.
Dove positioned itself apart form the soap
category as a cleansing cream product , for women
with dry skin.
48. Positioning by Product class
The soft drink 7- Up was for long time positioned as a
beverage that had a “fresh clean taste” that was “thirst
quenching”.
Research uncovered the fact that most people did not
regard 7-Up as a soft drink but rather as a mixer beverage.
The brand tended to attract only light soft-drink users.
The positioning strategy was then developed to position 7-
Up as a mainline soft drink as a logical alternative to the
colas but with a better taste.
The successful “ uncola” campaign was the result.
49. Celebrity/ Person
A celebrity often has strong associations.
Linking a celebrity with a brand can transfer those
associations to the brand.
E.g 1) Rahul Dravid and Castrol:
Dravid is dependable. So even Castrol is
dependable lubricant.
2) V. Anand and NIIT : Anand plays chess which
requires brains and NIIT is into software which
also requires brains
50. In the mid eighties , Nike faced a challenge from
Reebok .
Reebok had exploited the aerobics craze to take
over first place in the athletic shoe market.
Nike responded with Air Jordans, basketball shoes
using air-cushioning technology featuring
patented pressurized gas pockets in the soles
(Pump it up)
The shoe was a smash success , with first year
sales of over $100 mn. Its key was the
endorsement by Michael Jordan, the basketball
legend.
51. A person attached to the brand need not be a
celebrity.
The Maytag repair man and the Marlboro man
have strong identities and characteristics that have
become important brand associations.
The person need not even be real. It can be a
cartoon symbol such as –Gattu of Asian Paints
and utterly butterly girl of Amul.
66. Amitabh and brands
Amitabh– extrovert, legendary, aggressive,
larger than life, can do comic characters etc.
The brand he endorses or used to endorse
are as follows:
What do you think– is there a fit between
the brand and amitabh in all cases
67. Category Brand
Paints Goodlass Nerolac
Cola Pepsi
Chocolates Cadbury
Detergent Rin
Battery Eveready
Telecom/energy Reliance
Digestion Dabur - Hajmola
Oil Navratan
Television BPL
Cars Maruti-Versa
Suitings Reid and Taylor
Pens Parker
Pain Relief Emami
69. Lifestyles/personality
If your car, your colour TV or your washing machine were suddenly
to become a human being, what kind of person would you expect it to
be?
Every person possesses a personality and a lifestyle that is rich,
complex and vivid and distinctive as well.
Similarly brands can be thought of as having personality/lifestyle by
consumers.
E.g Research by Pepsi involving 17 groups of loyal drinkers of either
Pepsi or Coke, provided , insights into the personalities of the two
brands.
Coke projected an image of family, and a solid rural America
Pepsi– was considered exciting, innovative, and fast growing.
70. Other proprietary Brand Assets
This includes patents, trademarks and channel relationships
Brand assets will be most valuable if they inhibit or prevent
competitors from eroding a customer base and loyalty.
A trademark will protect brand equity from competitors who might
want to confuse customers by using a similar name, symbol or
package.
A patent can prevent direct competition
A distribution channel can be controlled by a brand because of a
history of brand preference.
71. Managing Brand Systems
Brand Hierarchies
Corporate Brand: G.M,Maruti
Range Brand : Chevrolet, Zen
Product Line Brand: Chevrolet Lumina, Zen Classic
Subbrand: Chevrolet Lumina Sports Coupe, Zen Classic
LXI, Surf Excel, Surf Ultra
73. Driver roles: A driver brand is a brand that drives the
purchase decision: its identity represents what the
customer primarily expects to receive from the purchase.
For e.g Gillette Sensor razor, customers are primarily
purchasing the technology and performance represented by
the Sensor name.
As a result, Sensor is the driver brand and its name and
symbol need to have a strong identity and clear visibility
on the package and in the mind of the user.
Similarly for Maruti Zen, Zen is the driver brand as the
consumer is buying Zen and not Maruti.
74. The endorser Role : In the endorser role, a brand provides
support and credibility to the driver brand’s claims.
Because the corporate brand usually represents an
organization with people, culture, values and programs, it
is well suited to support a driver brand and thus it often
plays the endorser role.
For e.g for LG Golden Eye, LG is the endorser role.
Similarly in case of Gillette Sensor , Gillette is an endorser
for sensor razors.
75. Subbrand Roles
A subbrand is a brand that distinguishes a part of the
product line within the brand system.
For e.g Buick (corporate Brand is G.M) uses the subbrand
Roadmaster to distinguish a specific model from another
model such as Riviera. Both are Buicks and both enjoy the
umbrella of the Buick name but each is a distinct product.
Similarly Surf has the following subbrands over the years--
Surf excel, Surf Ultra, Surf Super excel, Surf Excel matic.
Also Zen has the following subbrands
Zen Nova, Zen Classic
76. Branding Benefits
Branding a feature :Oral B brushes:
Two key features of it unique design were themselves
branded - the power tip bristles at the end of the brush and
Action cup shape that conformed to teeth and gum
contour. They also have branded the indicator bristles
which changes colour when brushes become worn.
Godrej PUF: a very important feature was branded
Bajaj Discover DTSI:
branding a component:
many computers give the ad and also say “intel inside”
Similarly Maruti cars say with MRF tyres
77. Branding a service program :
A company can brand its services to build brand strength
e.g Hyatt in USA has done the following
Hyatt Business Plan- Provides work space, phone, fax
machine in the hotel room, also access to copiers, printers
etc
Touch and Go : Automatic check in via an 800 toll free
number
Hyatt Gold passport :Allows customers to earn points
redeemable for travel awards.
78. Silver bullets
A silver bullet is a subbrand or branded benefit that is
employed as a vehicle for changing or supporting the
brand image of a parent brand.
The Sony walkman supports the innovative miniaturization
identity that is central to SONY
Taurus brand of Ford showed that Ford could design and
build innovative cars
Pulsar changed the image of Bajaj.
Bazooka the subbrand changed the image of Videocon
Similarly Motorazr V3 , changed the image of Motorola
79. Branded Benefits as Silver bullets
A branded benefit (feature, component, service) can also
playa silver-bullet role by supporting the image of the
brand to which it is attached.
The Action cup and Indicator bristles play a silver bullet
role for Oral-B toothbrushes and the Oral- B brand by
reinforcing the technological edge that Oral-B products
provide.
80. Leveraging the brand
Line extensions ( in existing product class)
Brand Extensions : On an adhoc basis or creating a range
brand.
co-branding
Stretching the brand vertically in existing product class : a)
stretching down b) stretching up
81. One recipe for strategic success is to create and leverage
assets. With its awareness, perceived quality, associations
and customer loyalty, a brand is usually the most powerful
asset that a firm owns.
Thus a brand can be leveraged to create larger and
stronger business entities.
82. Line extension :why ?
A) expanding user base
b) providing variety
c) energizing the brand
d) blocking or inhibiting competition
e.g Amul Kool with 6 variants
Lays with 6 variants
83. Stretching the brand vertically in existing product
class : a) stretching down b) stretching up
Launch products in all price points with same name e.g
Sony, Philips
Use subbrands like Citibank - Gold, Silver, Cambridge
and Cambridge gold
Videocon in colour TV launched subbrands like
Bazooka,for top end, Turbo tough for middle class and
Freedom series for the lower class
Subbrands have the potential to permit entry in an
emerginh low end amrklet without threatening the aprent
brand’s equity in the higher ranges of the market.
84. There are two clear problems
a) Risk of cannibalisation as buyers may shift to lower
version
b) the risk that extending the brand down will taint the
parent brand’s name.
one option here is to change the brand name / use a
different name
When Honda wanted to launch a premium car , the name
given was Acura.
85. A subbrand that is upscale will often employ a descriptor
such as “Special Edition”, “Premium”, “Gold”
brand extension: Another way to leverage a brand with
extensions is to use it to enter and create advantage in
another product category
Amul taking the name Amul to pizzas.
Creating range brands:
For their chips and food division , Pepsi has a seperate
name Lays
Similarly in USA , United technologies has a range brand
Carrier for A/Cs and Otis for lifts.
86. Co-branding
a) ingredient brands : One form of co-branding is to
become a branded ingredient in another brand. For
example MRF tyres in Maruti Zen cars.
Another example is Intel
b)Composite brands: Another form of co-branding is
having a composite brands- the bundling of two brands to
provide an enhanced consumer benefit or reduced cost e.g
Big bazaar ICICI Bank credit card or HSBC Indian Oil
credit card.