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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   outdated.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
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.
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.
• 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
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
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.
P& G’S Product Portfolio - launched from
1940-1980
 Tide- Detergent
 Prell - Shampoo
 Joy - dishwashing detergent
 Crest - Toothpaste
 Secret - cream deo
 Jif - peanut spread
 Ivory - Liquid soap
 Pampers - disposable diapers
 Folgers - coffee
 Scope - Mouthwash
 Bounty - paper towels
 Pringles- potato chips
 Bounce - fabric softeners
 Duncan Hines - cookies
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”
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
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
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
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.
Creating & Maintaining Brand Loyalty

 Treat the customer Right
 Stay close to customer
 Measure/Manage Customer Satisfaction
 Create switching cost
 Provide extras
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 .
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
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.
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.
Recognition v/s Recall- The Graveyard Model

High



                Graveyard   Brand
  Recognition




                                    Niche Brands




 Low
                Low                 Recall         High
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.
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.
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.
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 .
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.
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.
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.
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
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.
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.
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.
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
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
There are 11 types of associations. They are
-   Product attributes
-   Intangibles
-   Customer benefits
-   Relative Price
-   Use/ Application
-   User/ Customer
- Celebrity/ Person
- Lifestyle / Personality
- Product class
- Competitors
- Country/ Geographic area
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”
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
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
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.
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.
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
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.
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
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
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.
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
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
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
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.
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.
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
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.
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.
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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
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
25-1.wmv
kmhj_pappu.wmv
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.
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.
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
Understanding Brand Roles
 Driver
 Endorser
 Strategic Brands
 Subbrand Roles
 branded Benefits
 Silver Bullets
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.
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.
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
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
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.
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
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.
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
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.
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
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.
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.
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.
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.

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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.
  • 7. P& G’S Product Portfolio - launched from 1940-1980 Tide- Detergent Prell - Shampoo Joy - dishwashing detergent Crest - Toothpaste Secret - cream deo Jif - peanut spread Ivory - Liquid soap Pampers - disposable diapers Folgers - coffee Scope - Mouthwash Bounty - paper towels Pringles- potato chips Bounce - fabric softeners Duncan Hines - cookies
  • 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
  • 72. Understanding Brand Roles Driver Endorser Strategic Brands Subbrand Roles branded Benefits Silver Bullets
  • 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.

Editor's Notes

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