Brand Management Handout

Brand Management Notes by Bilal Mustafa Khan
Brands: The important distinction is between a product and a brand. A product is

something with a functional purpose. A brand offers something in addition to its
functional purpose. All brands are products (including brand as Citibank and Air India
that are technically services) in that they serve a functional purpose.
But not all products are brands. In fact a brand and can be defined as, “A brand is a
product that provides functional benefits plus added values that some consumer value
enough to buy”. Added values form the most important part of the definition of a brand.
We've all heard the story of the blind men and the elephant. Different men
examine different parts of an elephant. One examines the trunk and concludes that "an
elephant is like a vine". Another examines a leg and concludes that "an elephant is like a
pillar". A third examines the tail and concludes "an elephant is like a rope". A fourth runs
his hand across the elephant's side and concludes "an elephant is like a wall'. All of them
are correct. All of them miss the essential truth. An elephant is much more than the sum
of its anatomical parts. It is a living, breathing being.
Consumer taste differs so widely that no brand can be all things to all people.
Moreover any manufacturer who strives to cover too vide a filed will produce a brand
that is number two or number three over a wide range of attributes, rather than number
one over a Limited range of attributes (which might enable it to become first choice to a
Limited group of consumers, the normal route to success.
B P Emotional
Discriminators
r
r
o
Benefits
a d
n u
d c
t Functional
Benefits Motivators
The strongest brands are often the most distinctive. But in their distinctiveness they are
also generally well balanced between motivating benefits – those (generally functional)
benefits that prompt the consumer to use any brand in the product field – and
discriminating benefits - those prompting the consumer to buy one brand rather them
another. All brands are different from each other in the obvious sense that the names and
packaging are different. But distinctiveness over and beyond this is highly desirable,
although distinctiveness based so much on discriminators that it neglects motivators is a
recipe for a weak brand..
Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

internal distribution and class discussion. The material may not be reproduced in
any form without prior permission either in parts or whole.
Event brands (periodic experiences, usually within the worlds of sports, entertainment, or
fine arts) achieve their promoters' goals by making the most of the traditional approaches
to brand building. While it can be argued that professional golf's Master's tournament
(and the other three "majors", as well) has been a brand of sorts for many years, it is only
with the coming of enormous television contracts that the financial value of the brand has
been realized. The same can be said of dozens of other athletic events. Geographical
brands (cities, countries, resorts) have become common because businesses in particular
areas have also recognized the value of selling their locales using some traditional, and
non-traditional, brand building methods. Tourism directors from Orlando to Las Vegas,
from Alabama to Bangkok, have created brands to help sell their part of the planet.
The word "brand", when used as a noun, can refer to a company name, a product name,
or a unique identifier such as a logo or trademark.
In a time before fences were used in ranching to keep one's cattle separate from other
people's cattle, ranch owners branded, or marked, their cattle so they could later identify
their herd as their own. .
The concept of branding also developed through the practices of craftsmen who wanted
to place a mark or identifier on their work without detracting from the beauty of the
piece. These craftsmen used their initials, a symbol, or another unique mark to identify
their work
Not too long afterwards, high quality cattle and art became identifiable in the consumer's
mind by particular symbols and marks. Consumers would actually seek out certain marks
because they had associated those marks in their minds with tastier beef, higher quality
pottery or furniture, sophisticated artwork, and overall better products. If the producer
differentiated their product as superior in the mind of the consumer, then that producer's
mark or brand came to represent superiority.
Today's modern concept of branding grew out of the consumer packaged goods industry
and the process of branding has come to include much, much more than just creating a
way to identify a product or company.
Branding today is used to create emotional attachment to products and companies.

Branding efforts create a feeling of involvement, a sense of higher quality, and an aura of
intangible qualities that surround the brand name, mark, or symbol.
So what exactly is the definition of "brand"? Let's cover some definitions first before we
get too far into the branding process.

"If a product is something that is produced to function and exist in reality," says Philip
Durbrow of Frankfurt Balkind, an international design firm based in San Francisco, "then
a brand has meaning beyond functionality and exists in people's minds." Part art, part
science, brand is the difference between a bottle of soda and a bottle of Coke, the
intangible yet visceral impact of a person's subjective experience with the product — the
personal memories and cultural associations that orbit around it.
The goal of branding is to convince the public that a brand is trustworthy and thus worth
paying a premium for. The buyer is assured that the branded product will perform as
expected. But that is not the only reason why people are willing to pay a premium for
some brands.
Consider the differences that exist between a Rolex watch and one made by Timex. Trust
in their respective abilities to accurately keep track of time is not what justifies that one
can cost 100 to 500 times more than the other. Sure, the Rolex watch is well made and is
truly waterproof, whereas the Timex may only be "water-resistant," a lower standard of
water-tightness. A few SCUBA divers may wear Rolex watches but I am ready to bet that
the majority of Rolex wearers have never seen a decompression table...
People are willing to pay a premium price for brands that help define their self-image and
their social image.
Successful brand marketers can convince you that their brands are worth paying a little
more for because "you are worth it," and because there are brands that someone with your
standing in society should prefer over others. This effect of branding can be felt in every
category of product or service, from automobiles to floor cleaners. It is more likely to be
apparent where the product is worn or used for all to see, but it exists everywhere.
A brief history of branding

The phenomenon of branding has roots running deep into economic history. Stone Age
toolmakers undoubtedly had trademark styles that signaled potentially greater success in
the hunt. Particularly accomplished Viking shipbuilders may have had valuable brands
of vessels. Certainly silversmiths over the centuries, including Paul Revere, the American
colonial patriot, included marks on their wares to indicate both the purity of the metal
and the craftsmanship embodied in the product.
The English word “brand” is derived from “burning,” a reference, in the word's
business sense, to the embers once used to burn the mark of the owner onto livestock,
casks, timber, metal, or other goods.
Indeed, branding—the use of symbols to concisely convey information about a product or

service—can be seen as a quintessential human activity. It is also a fundamental building
block of commerce: Without information about a producer’s or a seller’s reputation, trade
would grind to a halt. (The seller ratings on the eBay Internet auction site represent just
one conspicuous contemporary example.) The real power of brands, however, dates to the
time when this indicator of reputation was transferred from the individual to a larger
business enterprise. The shift magnified brands’ impact, extended their geographic reach,
and resulted in wealth creation for numerous employees.
Josiah Wedgwood is often cited as the father of the modern brand. Beginning in the
1760s, Wedgwood placed his name on his pottery and china to indicate their source—his
state-of-the art factories—and therefore their quality. But the Wedgwood name came to
stand for something more. Nearly two hundred years before the advent of mass media,
and without using conventional advertising, Wedgwood used royal endorsements and
other marketing devices to create an aura around the name of his company that gave the
brand a value far beyond the attributes of the product itself. His business design of mass
production and distribution enabled him to capture the value created by his calculated
association of his product with a rich and famous lifestyle and his exploitation of
customers’ social aspirations.
In many ways, branding has stepped away from Wedgwood’s precepts during the latter
part of this century. With the development of new media, particularly television, and the
huge post- World War II boom in consumption and birthrates, a mass market was born.
Rising demand and standards of living created an era where market share was king: The
player with the leading share would have the lowest cost and the highest profitability.
Quite simply, a brand is a promise to the customer — a mirror in which the customer sees
a reflection of him or herself and identifies with, or rejects, the promise he or she sees.
Likewise, a brand is also a reflection of your organization. Your brand serves to define
your organization and influences every aspect of your operation, right down to corporate
culture. Whether measured in SKU per second shopping, margins or shareholder value,
the power of your brand has far-reaching impact. On stock valuation. On marketing costs.
Even on employee retention rates.
For customers, branding plays two important roles:
In a world with lots of choices, it tells them which choice is right. It serves as a
customer’s compass out of the chaos of competing choices. “What’s best for me?”
In a world full of change and confusion, it helps them define who they are — it gives
them a badge. Good Mother, Dedicated Athlete, Hip Teenager.
Branding
“Brands are all about how consumers position themselves. Powerful brands succeed by
establishing a relationship, a connection, with their customers. To establish that
connection — to earn a place in their world — a brand must know its customers and
become a part of how customers want to see themselves.”
Quite simply, a brand is a promise to the customer — a mirror in which the customer sees
a reflection of him or herself and identifies with, or rejects, the promise he or she sees.
Likewise, a brand is also a reflection of your organization. A brand serves to define the
organization and influences every aspect of its operation, right down to corporate culture.
Whether measured in SKU per second shopping, margins or shareholder value, the power
of your brand has far-reaching impact. On stock valuation. On marketing costs. Even on
employee retention rates.
Moreover a brand is the proprietary visual, emotional, rational, and cultural image that
one associates with a company or a product. When you think Volvo, you might think
safety. When you think Nike, you might think of Andre Agassi or "Just Do It." When you
think IBM, you might think "Big Blue." The fact that you remember the brand name and
have positive associations with that brand makes your product selection easier and
enhances the value and satisfaction you get from the product.
While Brand X cola or even Pepsi-Cola may win blind taste tests over Coca Cola, the fact
is that more people buy Coke than any other cola and, most importantly, they enjoy the
experience of buying and drinking Coca Cola. The fond memories of childhood and
refreshment that people have when they drink Coke is often more important than a little
bit better cola taste. It is this emotional relationship with brands that make them so
powerful.
For customers, branding plays two important roles:

1. In a world with lots of choices, it tells them which choice is right. It serves
as a customer’s compass out of the chaos of competing choices. “What’s best
for me?”
2. In a world full of change and confusion, it helps them define who they are
— it gives them a badge. Good Mother, Dedicated Athlete, Hip Teenager.
Brand Types
Parent Brands
IBM, Microsoft, Disney, Wipro
Parent brands serve as our basis for identification — they provide recognition and quality
reassurance. They say “safe, reliable, trustworthy.” We associate parent brands with a set
of values and imagery, and they evoke certain expectations about what our experience
will be using that brand.
Line Brands
Citicorp Securities, Surf Excel, Disneyland, Lay’s
Line brands bring texture and tangible relevance to the parent brand, while adding the
distinctive appeal of their own unique identity. Line brands code a product/service for a
specific usage experience — a particular situation or occasion — and provide information
about the intended user. They serve as a telegraphic communicator of attributes as well as
functional and emotional benefits.
The Job of Positioning

When we interact with a brand, we experience it through a variety of attributes. All of
these attributes tell us how to “feel” about a particular brand:
• What is it (cognitive)
• What does it look like (visual)
• How does it feel (emotional)
• What does it stand for (symbolic)
• How does it sound (auditory)
Brand positioning builds a bridge between the larger self of the consumer (“How I want
to see myself”) with a larger idea about a product or service (Kodak = immortality). It
constantly seeks to build the relevance and equity of your brand. Proper positioning
allows your customer to say, “This is the right choice for me.”
Effective Positioning
• Is intrusive, it cuts through the clutter.

• Is relevant, it constantly asks, “how can we join consumers” rather than asking
consumers to join you.
• Differentiates, it demonstrates what’s really different about your brand compared
to everyone else.
• Strengthens margin, it establishes ownership of the category, not just “squatter's
rights,” by focusing on increasing brand equity.
• Creates demand, it links the consumer back to the category via the brand.
• Is consistent, it demands loyalty to consumers rather than requesting their loyalty
to you. It requires you to be faithful to your brand and leverage it fully.
• Is customer-focused, it speaks in today’s consumer currencies: time, energy,
money, quality and self-esteem.
What makes up a brand identity?
Brand identity includes brand names, logos, positioning, brand associations, and brand
personality. A good brand name gives a good first impression and evokes positive
associations with the brand. A positioning statement tells, in one sentence, what business
the company is in, what benefits it provides and why it is better than the competition.
Imagine you're in an elevator and you have 30 seconds to answer the question, "What
business are you in?" Brand personality adds emotion, culture and myth to the brand
identity by the use of a famous spokesperson (Palmolive – Kapil Dev), a character (the
Pink Panther), an animal (the Ceat Rhino) or an image (There is a bit of steel in
everybody’s life)
Brand associations are the attributes that customers think of when they hear or see the
brand name. McDonalds television commercials are a series of one brand association
after another, starting with the yellow arches in the lower right corner of the screen and
following with associations of Big Mac, Ronald Mcdonald, kids, Happy Meal, consistent
food quality, etc.
The Brand Benefit Hierarchy
Powerful brands allow us to join and connect to something larger than ourselves. We
associate a brand with a whole bundle of increasingly meaningful benefits — a hierarchy
of needs. Brands help us define who we are. Great brands recognize that they play an
important role in how people position themselves in the world, which is the true focus of
positioning.

Brand Essence: Signing Up for Something Bigger
Great brands are unambiguously anted on quality, deeply felt emotional benefits,
identified fundamental beliefs and values. They have a ubiquitous presence and,
importantly, sell to diverse segments of consumers. But the best brands have all gone
beyond attributes, functional benefits and emotional benefits to articulate their brand
essence — they have “signed up for something bigger” by finding not what separates
different segments of consumers but what unites them. Thus, powerful brands badge both
the product and the user simultaneously. Brand soul — the emotional end benefit —
drives everything about that brand and defines brand personality.
BRANDS AND ADDED VALUES

The important distinction is between a product and a brand. A product is
something with a functional purpose. A brand offers something in addition to its
functional purpose. All brands are products (including brand as Citibank and Air India
that are technically services) in that they serve a functional purpose.
But not all products are brands. In fact a brand and can be defined as, “A brand is
a product that provides functional benefits plus added values that some consumer value
enough to buy”.
Added values form the most important part of the definition of a brand. Before we
discuss added values two general points must be discussed briefly.
First, the strongest brands are often the most distinctive. But in their
distinctiveness they are also generally well balanced between motivating benefits – those
(generally functional) benefits that prompt the consumer to use any brand in the product
filled – and discriminating benefits - those prompting the consumer to buy one brand
rather them another. All brands are different from each other in the obvious sense that the
names and packaging are different. But distinctiveness over and beyond this is highly

desirable, although distinctiveness based so much on discriminators that it neglects

motivators is a recipe for a weak brand.
Second, consumer taste differs so widely that no brand can be all things to all
people. Moreover any manufacturer who strives to cover too vide a filed will produce a
brand that is number two or number three over a wide range of attributes, rather than
number one over a Limited range of attributes (which might enable it to become first
choice to a Limited group of consumers, the normal route to success).
Most brand have a known and restricted range functions and added values are
non-functional the manufactures benefits over and beyond these.
The major sources of added values can be listed as:
1. Added Values that come from Experience of the Brand :-
These include familiarity, known reliability and reduction of risks. A brand becomes
an old friend. This includes the important notion of brand personality the personality
of the brand itself – its functional and non-functional features as they might be
described in quasi – human terms.
2. Added Value that come from the sort of people who use the brands:-
Rich and snobbish, young or glamorous or masculine or feminine. There are
enormous examples of brands which have these user association, most of which are
fostered by advertising. Association can be with our individual or an entity or it can
be user groups also.
3. Added values that come from the belief that the brand is effective:-
This is related to the way in which some brands work on peoples belief and there is
sufficient evidence to prove that branding in such product affects the mind’s influence
over body processes. Belief in effectiveness also plays an important role with
cosmetics with their ability to make their users feel more beautiful with generally
beneficial results.
4. Added value which come from the apperance of the brand:-
This is the prime role packaging two identical products with different packaging may
not be equally attractive to consumers. There is strong evidence which points out that
in many product categories the physical appearance of the brand plays a major in
purchase decision (e.g. white goods). If a consumer if offered a choice between two
products having similar features and attributes, but different styling: e.g. one is
extremely sleek and the other is just a basic covering than the consumer would prefer
the first alternative.
5. Added values that come from the manufacturers name and reputation:-
This is another source of added value which results from an established and reputed
manufacture quality of product and service quality. But in certain situations these
may not make an impact and they are:
a) When the consumers do not known who the manufacturer of a particular brand they
use, then obviously there are no role of added value which result from reputation etc.
b) A familiar brand name is no longer needed as a guarantee of new products
homogeneity and quality. Branded goods are known to be homogenous and to
perform their function well. Yet there have been instance where brands spell different
(e.g. Philips produced average quality as well as high quality goods) hence there no
guarantee that a new product by Philips would be of average or high quality.
The contribution of added values to consumer choice is easily demonstrated by the
commonly used technique of matched product tests. In these tests, a sample of
consumer use and judge brands in coded but unnamed package and a second and
similar sample of consumers uses and judges those same brand in their normal
containers. The invariable pattern is that the preferences among identified brands are
quite different from preferences among those same brands in coded but unidentified
containers.
The subject of added values is quite alluring by in conclusion, added values in a
brand arise from people’s use and familiarity from the advertising and associations
and from packaging. If follows that added values are not immediately available to
manufacture of new brand but are built over time and therefore initially a brand must
solely survive on its superior functional performance.
FACTORS THAT SHAPE A BRAND DURING ITS CONCEPTION & BIRTH
Five influences on a new brand: The following are the five major forces, which
shape a brand: -
1. FUNCTIONAL PERFORMANCE:
A new brand is like a newborn child, which comes naked in this world. Without superior
competitive functional performance in at least some respect it has little chance of
succeeding; it will not persuade a person who buys it on a trial basis or who receive a free
sample to buy it again. One of the key roles of the pack design, the introductory
promotions and the advertising is to communicate this functional performance clearly and
forcefully.
The pack as an advertising medium and the advertising itself should also begin to build
those added values that are vital to protect the brands often rather fragile franchise, once
competitors have moved towards functional parity with it. That is the new brands need
the edge of added values to maintain its position when as often happens, it loses within
months the advantage of its initial functional lead.
If when enters the market, the brand is to be bought more than once, the decision
is essentially based on its functional properties.

Evidence points out that the functional superiority of a potentially successful

brand also provides under pining and support for the other factors contributing to success,
notably the effort of sales force. So, if the first and most important thing, its functional
performance, is recognized, synergy will lend a hand to boost its effect. But when a brand
is not going to succeed efforts of the sales force alone are not enough to compensate for it
functional weaknesses.
Competitive functional performance is not something that is important to new
brands and unimportant to mature brands, because the added values that these brands
have acquired over the years cannot provide a permanent bulwark against functionally
superior newcomers.
The first question for the manufacturer of a new brand to ask is “from which
brands do we want to take business “once this question has been answered, the firm can
direct R&D efforts to the specific functional performance with the new brand
characteristics (i.e. the new brand that is being developed should be superior
functionally/or in terms of functional performance). Once the competing brands are know
better and superior functional product/brand can be developed.
2. POSITIONING:
This is another major variable which influence the eventual outcome (failure & success)
of a brand. Positioning should be in tune with the brand objective and target market.
The positioning strategies can be classified into two brand groups. Price based
and non-price strategy. Price based implies that the product is positioned in terms of high
price/premium, value priced or economically priced/low priced. Non-price strategies
refer to Nemours positioning strategies like positioning by user, by symbol, competitor
etc.
The key to successful positioning lies in identifying a key USP, which the firm
should focus on and hammer away on it trying to become no. one brand for a Ltd. no. of
consumers (e.g. Mercedes Engineered like no other car).
3. NAME:
Many marketing guru’s feel that choice of brand name is a less substantial matter when
viewed in comparison to making sure that the brand is functionally effective and is
properly positioned in the market. Many marketers feel that the added values of a brand
are embodied with name, that there values can be transferred to another product by using
the brand as a common property this is the rational for the strategy of using and umbrella
brand name for number of different products (a strategy often described as range
extensions or line extensions).
The most obvious point is that the danger of cannibalization is likely to be greater
where the products with the umbrella name are in competition with each other (e.g. Rin
bar & Rin Powder) than when they are not (Gillette Blades and Gillette after shave).

The only major advantage of using umbrella naming is within the same segments
((e.g. segments using one product like Denim After Shave can easily try Denim soap),
that is people who use one product under a brand name can, presumably easily be
persuaded to sample a second perhaps different category of product using that same
brand name. Usually the advantage is in term of reduced promotional and advertising
costs and efforts.
In fact market research data indicates that basically the success of a brand in a
new product category depends primarily on functional performance. The economic
advantage of umbrella naming are substantially illusory in the short and medium term.
Umbrella names are in general no worse on better than new names. As general rules the
level of success of a new brand is much more dependent on support levels than on name.
It is possible that umbrella names provide greater staying power, by enabling greater
addition to added values, which is essentially a long-term process.
In the long-term, an umbrella naming is really a part of a manufacturers corporate
policy an act of faith, and one of the basic elements on which his business is based and on
which the firm might be included to attribute its long-term success in the marketplace.
4. PRICE:
In perhaps two-third of all cases, a new brand enters an existing market at a
premium price. The firm justifies this high price on the basis of innovation and functional
superiority of the brand over its competitors. In reality, the premium prices are charged to
fund the high cost of achieving sampling. The costs are usually at a high level to
compensate for the established position of existing brands with their stock of added
values, which have been acquired over the years and while a new brand only rarely
makes a profit during its first two years or so, deficit budgeting puts an automatic upward
pressure on the consumer price. There is also a good deal of evidence that, although new
and different brands will normally command a significant price premium, this premium
tends to narrow during the first few years of a brands life.
There are also facts to support the contention that premium prices are reasonably
well accepted as justification for functional improvement, although consumers are
heartening skeptical about manufacturer attempts to charge a premium price for no
obvious functional advantage at all.
Stephen king (developing new brands) suggests a useful investigative and
pragmatic approach to the question of initial pricing. The technique recommended is
research into consumer attitude based on direct and indirect questions, which will provide
guidance to the feasibility of “skimming” or “penetration pricing”.
On the other hand basing prices on derivation of production costs will tell the
manufacturer whether he will cover costs at a given level of output, it will give little
about whether the company will in fact be able to sell that output.
5. DISTRIBUTION:
One key factor influencing the immediate success (failure) of a new brand is the
ability of the manufacturers sales force to get it into distribution.
Expanded distribution is a result of success. If the brand goes well in the early
stages, the public demands it, retail branches hear from the head office. The word gets
around and more retailers want to stock it.
But a functional performance is not important to the consumer alone. Retailers
themselves, and even more importantly the sales force, are conscious of functional
superiority and its contribution to a brands success. Functional superiority will provide
conviction to the salesman and draw commitment from the retailer.
BRAND AWARENESS
Brand awareness refers to the strength of a brand’s presence in the consumer’s mind. It is
a measure of the percentage of the target market that is aware of a brand name. Marketers
can create awareness among their target audience through repetitive advertising and
publicity (Strydom et al., 2000:388). Brand awareness can provide a host of competitive
advantages for the marketer. These include the following
• Brand awareness provides the brand with a sense of familiarity.
• Name awareness can be a signal of presence, commitment and substance.
• The salience of a brand will determine if it is recalled at a key time in the
purchasing process.
• Brand awareness is an asset that can be remarkably durable and thus sustainable.
It may be extremely difficult to dislodge a brand that has achieved a dominant
awareness level.
Organisations can create brand awareness by, firstly, having a broad sales base, and
secondly, becoming skilled at operating outside the normal media channels. A brand with
high brand awareness and with positively distinguishing associations will have a high
added value for consumer.
Brand awareness is measured according to the different ways in which consumers
remember a brand, which may include brand recognition, brand recall, top of the mind
brand and dominant brand
• Brand recognition. Brand recognition relates to consumers’ ability to confirm
prior exposure to that brand when given the brand as a cue. It requires that
consumers can correctly discriminate the brand as having been previously seen or
heard.
• Brand recall. Brand recall relates to consumers’ ability to retrieve the brand from
memory given the product category, the needs fulfilled by the category or a
purchase or usage situation as a cue. It requires consumers to correctly generate
the brand from memory when given a relevant cue.

• Top-of-mind brand. This is the brand name that first comes to mind when a
consumer is confronted with the name of a product classification.
• Dominant brand. The ultimate awareness level is brand name dominance, where
in a recall task, most customers can only provide the name of a single brand.
Customers need information to be able to choose between alternative brands. However,
consumers are bombarded with increasingly more marketing messages. The challenge
therefore facing marketers is to build awareness and presence both economically and
efficiently.
BRAND ASSOCIATIONS - A brand association is anything mentally linked to the

brand. An association can affect recall, provide a point of differentiation, provide a
reason to buy, create positive attitudes and feelings, and serve as the basis for trial.
Overall quality ratings, technological leadership, newness and associations with customer
benefits are the strongest. The combination of all associations supports the price which
can be charged. The relative price position often is central. Whether the brand is in the
luxury, mid-price or budget, being at or near the top or bottom of the selected category is
often most advantageous.
This safety-pin print ad for Volvo,

created in Japan, positions the car
so perfectly. So simply and quickly.
Volvo is “Safety.”
Importance to marketers and consumers.

Brand associations are the category of a brand's assets and liabilities that include anything
"linked" in memory to a brand .Brand associations can also be defined as informational
nodes linked to the brand node in memory that contain the meaning of the brand for
consumers. Brand associations are important to marketers and to consumers. Marketers
use brand associations to differentiate, position, and extend brands, to create positive
attitudes and feelings toward brands, and to suggest attributes or benefits of purchasing or
using a specific brand. Consumers use brand associations to help process, organize, and
retrieve information in memory and to aid them in making purchase decisions.
High brand equity provides a company with many competitive advantages. A powerful
brand does not only enjoy a high level of consumer brand loyalty and awareness but also

has positive associations in consumer minds. Brand associations are perceptions and
images that people link with particular brands. A positive brand image is created by
marketing programmes that link strong, favourable, unique and admirable associations to
the brand in the consumer’s memory.
The associations attached to a company and its brands can therefore be key enduring
business assets. A brand association is anything that is directly or indirectly linked in the
consumer’s memory to a brand.
A brand represents the key to a product’s personality. It also says something about the
image of a company and its products. For marketers to create the right brand identity,
brand meaning, brand responses and brand relationship can be a complicated and difficult
process.
When marketers focus on creating positive brand awareness in the minds of consumers,
they should keep in mind that, although product-attribute associations can be powerful
(especially if a brand has a key attribute), the associations can fail to differentiate because
there is a tendency for all brands to position according to the most important product
attributes. Furthermore, an advantage on a product attribute is an easy target that is likely
to be copied or eventually surpassed. Finally, a strong product-attribute association limits
brand extension options and thus the strategic flexibility of the brand.
It is thus true that building strong brands and establishing brand equity is becoming
increasingly challenging . Strong brands therefore go beyond product attributes and
differentiate on brand associations, such as the following:
o Company associations. Focus on attributes of the organization rather than
attributes of the product or service.
o Brand personality. Uses the brand-as-person metaphor to help communicate a
brand and its relationships to customers.
o Symbols. Provide cohesion and structure to a brand and make it much easier to
gain recognition and recall.
o Emotional benefits. Relate to the ability of a brand to make the buyer or user
feel something during the purchase process or use experience.
o Self-expressive benefits. Reflect the ability of the purchase and use of a brand to
provide a product for a person’s personal expression.
Marketers should keep in mind that brand associations can also be negative and thus
detract from a brand’s equity.
A key step in creating and managing a brand asset is to determine the brand’s identity –
in other words, the associations that the brand aspires to represent.
The process of creating a brand identity overlaps significantly with the development of a
business strategy because future investments and points of differentiation for the
companies will drive the perceptions of the brand.
Conversely, it is self-defeating to aspire to a brand image if the company is unwilling
and/or unable to back up the vision with a plan and funds.

The brand, and its image and equity all allow the customer to perceive a promise of value
(Webster, 2003:1). Marketers should therefore build strong brands to ensure that the right
message is conveyed to the consumer. In so doing, marketers can accomplish the
following:
• ensure identification of the brand with customers and an association of the brand
in the customers’ minds with a specific product class or customer need
• establish the totality of brand meaning in the minds of customers by strategically
linking a host of tangible and intangible brand associations with certain properties
• elicit the proper customer response to this brand identification and brand meaning
• convert brand response to create an intense, active loyalty relationship between
customers and the brand.
Although print and broadcast media have played a huge role in building strong brands,
other forces are now coming into play. Factors such as customer service, and the
relationship that the organisation has with its customers are all part of the brand. This is
why many industries have started to focus on branding and brand equity.
Some organisations have actually appointed other entirely different companies to focus
on brand management to ensure that the right message is communicated to consumers
through all communication mediums. Other companies manage their brands themselves,
by means of effective brand management.
PERCEIVED QUALITY
Brand equity creates and consistently delivers quality and value brands to consumers .
Perceived quality is a brand association that is elevated to the status of a brand asset for
various reasons, such as the following:
• Perceived quality drives financial performance.
• Perceived quality is often a major strategic thrust of products.
• Perceived quality is linked to and often drives other aspects of how a
brand is perceived.
Part of a consumer’s image of a brand is based on actual facts and experiences. However,
another part of that image is based on perceptions born out of a product’s reputation,
media coverage and other indirect sources of information. A successful brand has a
recognizable name which signals specific attributes to the consumer
Marketers can create perceived quality, by firstly, having an understanding of what
quality means to customer segments; secondly, by having a supportive culture; and
finally, having a quality improvement process that will enable an organisation to deliver
quality products .
BRAND IMAGE
Simply put, brand image is how your customers, potential customers, suppliers, and the
general public sees you. It’s how you are positioned in their minds. Large enterprises
spend a great deal of time and money on making sure that their brand projects exactly
what they want about the company. When they’re successful in branding themselves, the
payoff can be huge.
Take the global brands—Honda, MacDonald’s, Nike, Coke—they all have very strong
brand franchises. Now pay attention here. Their brand franchises don’t focus on product
features. Products can change. Features can change. Brands, if successful, can last
decades because they center on more enduring values. Think Honda and you think
reliability. You don’t think power steering or antilock brakes. MacDonald’s? You don’t
think cheeseburger or shakes. MacDonald’s is the place to take your family. Just do it
with Nike and you’ll be a winner. High-performance plastic is the furthest thing from
your mind. Do people buy Coke because it tastes sweet? No, they buy Coke because it
brings the world together. The key to having a good brand image is to have a consistent
perception of your company as it relates to important customer values. Once you strike
the right chord, customers will keep coming back. Ask two-time Honda owners what car
they’ll buy next. Try to get a Coke drinker to switch to Pepsi. What’s more customers
will pay for brands. Just check out your local supermarket. Look at the price of the no-
name cereal compared to one put out by Kellog’s. Brands always cost more. They
command a premium.
Having a good brand image is important to small businesses as well. Customers look for
the same things from large or small companies. They want to deal with a reputable and
trustworthy business. They want good value. They want quality. They'll choose a
company that projects that over one that doesn't any time any where.
Difference Between Corporate Identity, Brand Identity And Brand Image
It is important to distinguish between corporate identity, brand identity, and brand
image. Corporate identity is concerned with the visual aspects of a company's presence.
When companies undertake corporate identity exercises, they are usually modernizing
their visual image in terms of logo, design, and collaterals. Such efforts do not normally
entail a change in brand values so that the heart of the brand remains the same - what it
stands for, or its personality. Unfortunately, many companies do not realize this fallacy,
as they are sometimes led to believe by agencies and consultancy companies that the
visual changes will change the brand image. But changes to logos, signage, and even
outlet design do not always change consumer perceptions of quality, service, and the
intangible associations that come to the fore when the brand name is seen or heard.
The best that such changes can do is to reassure consumers that the company is
concerned about how it looks. Brands do have to maintain a modern look, and the visual
identity needs to change over time. But the key to successfully effecting a new look is
evolution, not revolution. Totally changing the brand visuals can give rise to consumer
concerns about changes of ownership, or possible changes in brand values, or even

unjustified extravagance. If there is a strong brand personality to which consumers are

attracted, then substantial changes may destroy emotional attachments to the brand.
People do not expect or like wild swings in the personality behavior of other people, and
they are just as concerned when the brands to which they have grown used exhibit similar
"schizophrenic" changes.
On the other hand, if the intention is to substantially improve the standing of the
brand, then corporate identity changes can be accompanied by widespread changes to
organizational culture, quality, and service standards. If done well, and if consumers
experience a great new or improved experience, then the changes will, over the longer
term, have a corresponding positive effect on brand image.
Brand identity is the total proposition that a company makes to consumers - the
promise it makes. It may consist of features and attributes, benefits, performance, quality,
service support, and the values that the brand possesses. The brand can be viewed as a
product, a personality, a set of values, and a position it occupies in people's minds. Brand
identity is everything the company wants the brand to be seen as.
Brand image, on the other hand, is the totality of consumer perceptions about the
brand, or how they see it, which may not coincide with the brand identity. Companies
have to work hard on the consumer experience to make sure that what customers see and
think is what they want them to.
THE BRAND IMAGE TRAP

Knowledge of the brand image (how customers and others perceive the brand)
provides useful and even necessary background information when developing a brand
identity. In the brand image trap, however, the patience, resources, or expertise to go
beyond the brand image is lacking, and the brand image becomes the brand identity rather
than just one input to be considered.
The brand image trap does not tend to occur when a brand image is obviously
negative or inappropriate. When there are only subtle image inadequacies caused by
customers' past brand experiences or by changes in their needs, however, the use of the
brand image as an identity statement often goes unchallenged.
While brand image is usually passive and looks to the past, brand identity should
be active and look to the future, reflecting the associations that are aspired for the brand.
While brand image tends to be tactical, brand identity should be strategic, reflecting a
business strategy that will lead to a sustainable advantage. The brand identity should also
reflect the brand's enduring qualities, even if they are not salient in the brand image. Like
any identity, it represents the basic characteristics that will persist over time.
A brand identity is to brand strategy what "strategic intent" is to a business
strategy. Strategic intent involves an obsession with winning, real innovation, stretching
the current strategy, and a forward-looking, dynamic perspective; it is very different from

accepting or even refining past strategy. Similarly, a brand identity should not accept
existing perceptions, but instead should be willing to consider creating changes.
THE BRAND POSITION TRAP

A brand position is the part of the brand identity and value proposition that is to
be actively communicated to the target audience and that demonstrates an advantage
over competing brands.
Thus the brand position guides the current communication programs and is
distinct from the more general brand identity construct. Some elements of brand identity
(such as cleanliness for a restaurant) may not be actively communicated, and other
elements (such as a product class association) will recede in visibility as the brand
matures. Thus there is a distinction between three related constructs:
BRAND
BRAND IDENTITY BRAND POSITION
IMAGE
How the brand How strategists want The part of the brand identity and value
is now the brand to be proposition to be actively communicated to a
perceived perceived target audience
The brand position trap occurs when the search for a brand identity becomes a
search for a brand position, stimulated by a practical need to provide objectives to those
developing the communication programs. The goal then becomes an advertising tag line
rather than a brand identity.
This trap inhibits the evolution of a full-fledged brand identity, because strategists
continuously weed out those aspects that they feel are not worth communicating. The
tendency to focus on product attributes is intensified, and there is often no room to
consider brand personality, organizational associations, or brand symbols because they
simply do not make the cut when developing a three-word phrase.
Further, a compact phrase is unlikely to provide much guidance to brand-building
activities. A brand position does not usually have the texture and depth needed to guide
the brand-building effort which event to sponsor, which package is superior, or what
store display supports the brand. There is a need for a richer, more complete
understanding of what the brand stands for.
BRAND LOYALTY
Loyalty is an important concept in strategic marketing. Loyalty provides fewer reasons
for consumers to engage in extended information search among alternatives. Researches
also indicates that purchase decisions based on loyalty may become simplified and even
habitual in nature and this may be a result of satisfaction with the current brand(s). A
base of loyal customers will be advantageous for an organisation as it reduces the
marketing cost of doing business. In addition, loyalty can be capitalised on through

strategies such as brand extension and market penetration. Finally a large number of loyal
customers is an asset for a brand, and has been identified as major determinant of brand
equity .
Brand Loyalty is a crucial goal and result of successful marketing programs, sales
initiatives and product development efforts. At the core of every successful brand is a
nucleus of loyal customers. These "true believers" understand the brand better, purchase
more often and recommend the brand to others. Loyal customers can be and should be the
foundation for marketing strategy. Beyond the profit they generate, loyal customers
provide the basis for brand development and improvement. The brand that loses sight of
its loyal customers has lost its direction, and is vulnerable to losing market share.
As a brand's percentage of loyal customers goes up, market share increases and the brand
becomes more profitable. Share rises because those customers who become repeat
purchasers are no longer lost to the competition. In addition, repeat customers are more
profitable than new customers - attracting new customers involves investing far more
marketing and promotional funds. To some extent, brand loyalty is being developed and
managed by all successful brands. But in many cases loyalty itself is considered simply
the result of well executed marketing programs. The best way to achieve greater brand
loyalty is by managing the brand loyalty process. This involves measuring the drivers of
brand loyalty, selecting high impact loyalty improvement projects, and quickly carrying
them out.
Brand loyalty has been a major focus of strategic marketing planning (Kotler,
1984) and offers an important basis for developing a sustainable competitive advantage -
an advantage that can be realized through marketing efforts (Dick and Basu, 1994).
Many studies on the topic of brand loyalty have been measured by the behavioral
aspect of brand loyalty (e.g., repeat purchases) without considering cognitive aspects of
brand loyalty. For example, Fader and Schmittlein (1993) conducted a research
investigating the advantage of high share brands in brand loyalty, suggesting that high
share brands have significantly higher brand loyalty than low share brands. They
measured brand loyalty only by the behavioral aspect of repeat purchase, not considering
cognitive aspects of brand loyalty. Bayus (1992) also operationalised brand loyalty by a
behavioral measurement of probability of purchasing the same appliance brand as the one
previously owned in his study on brand switching analysis of home appliances.
Kahn et al. (1986) report that academic research on loyalty has largely focused on
measurement issues and correlates of loyalty with consumer characteristics in a
segmentation context (e.g., Frank, 1967).
A few brand loyalty studies found price promotions as the antecedents of brand
switching behavior (Bawa and Shoemaker, 1987; Rothschild and Gaidis, 1981; Winer,
1986). They agree that price promotions increase sales in the short term. Some
researchers have proposed and found empirically that if consumers have been satisfied
with the promoted brand, their satisfaction is reinforcing and leads to an increase in the
probability of choosing the brand again after the promotion is withdrawn, particularly for
previous non-users of the brand (Kahn and Louie, 1990; Rothschild and Gaidis, 1981).
Other researchers found that lineage is an antecedent of brand loyalty (Miller,
1975; Moore-Shay and Lutz, 1988). For example, Moore-Shay and Lutz (1988) reported
that mother and daughter had shown same brand preference and shopping strategy
congruence.
However, brand loyalty is not a simple uni-dimensional concept, but a very
complex multi-dimensional concept. Wilkie (1994) defines brand loyalty as "a favorable
attitude toward, and consistent purchase of, a particular brand". However, such a
definition is too simple to understand brand loyalty in the context of consumer behavior.
The definition implies that consumers are brand loyal when both attitude and behavior
are favorable. However, it does not clarify the intensity of brand loyalty, because it
precludes the possibility that a consumer's attitude is unfavorable, while he/she repeats
the purchases. In such case, the consumer's brand loyalty would be superficial and
shallow-rooted.
Oliver (1997) has presented a conceptual framework of brand loyalty that
includes the full spectrum of brand loyalty based on a hierarchy of effects model with
cognitive, affective, conative (behavioral intent), and action (repeat purchase behavior)
dimensions. A definition integrating this multidimensional construct has been given
(Oliver, 1999) as:
"a deeply held commitment to rebuy or repatronize a preferred product/service

consistently in the future, thereby causing repetitive same-brand or same brand-set
purchasing, despite situational influences and marketing efforts having the potential
to cause switching behavior."
Implications for Brand Management:

Several things are clear from the above discussion on Brand Loyalty. The first
thing is that Brand Loyalty consists of at least two dimensions viz. behavioral and
attitudinal apart from other dimensions like situation and propensity to be loyal which are
unique to an individual. The different types or categories of brand loyalty exhibited can
be visualized in the form of a brand loyalty map.

Repeat Patronage: High
Spurious
True
Loyalty
Loyalty
High
Low
Relative Attitudes
No Latent
Loyalty Loyalty
Low
Figure 1: The Brand Loyalty Map
Categorizing Loyalty Types
No loyalty: Consumers falling in this category have a low attitude towards a

particular product and willingly or unwillingly they try to avoid the product purchase.
Spurious loyalty is very similar to the concept of inertia; where despite
perceptions that choices are relatively undifferentiated behavioral data suggest loyalty. In
such cases repeat purchase may be based on the availability of deals, special offers,
convenience or the influence of other people. As a result consumer may only be
temporarily display such loyalty, and is likely to be very open to competing offers. That
is if another product comes along that is for some reason easier to buy (e.g. it is cheaper
or the original product is out of stock), the consumer will not hesitate to do so.
Sometimes the loyalty is circumstantial: repeat buying comes from lack of
reasonable alternatives e.g. monopoly. Circumstantial loyalty includes what are called
propriety assets such as patents, copyrights and trademarks that give a firm at least a
temporary monopoly position ( the impact of generic drugs when an ethical drug comes
off patent suggests that much of the advantage is circumstantial and hence temporary).
In other situations loyalty reflects an efficiency motive: the brand is good, so we
automatically select it to minimize effort. An important efficiency case of loyalty occurs
when a customer relies on an ‘expert’ such as a dealer or shopkeeper to make a choice for
him or her. This usually occurs in situation when the product infrequently bought and is
inexpensive and the customer does not what to spend time searching for information
about the various alternatives. Another good example would be that of a patient diligently
buying the specific brand prescribed by the doctor. In this case the loyalty is really
channel created loyalty.
Latent loyalty occurs when consumer has a high relative attitude towards the
company or brand, but this is not evident in terms of their purchase behavior. This is
probably as a result of situational influences – including inconvenient store locations,
out-of-stock situations, and/or the influence of other people.
Sustainable loyalty exists when the customer exhibits high repeat purchase, and
does so because they have a strong preference (high relative attitude) manifested in repeat
buying, word of mouth it engenders among it customers. Sustainable loyalty is therefore
achieved when the company has developed and communicated a proposition that clearly
has long-term benefits for the customer, and where the customer modifies his or her
behavior to remain loyal over time. Thus sustainable loyalty occurs where repeat
patronage is accompanied by a favorable attitude i.e. where purchase is as a result of a
conscious decision by the consumer. As such, this clearly the most preferred of the four
categories, and may be what we intuitively mean by loyalty.
This strong form of loyalty is due to attachment. In this case the customer
doggedly seeks out the product, often out of deference to its role in a previous situation
(e.g. “they were there when I needed them”) and sometimes in an almost ritualistic
manner (e.g. stopping at a certain Café as a rite of the summer). This level of loyalty
insulates a brand from competitive pressures such as advertising and price promotions
and leads to high margins and profits.
Further there are several other marketing implications. The first question, of
course, for the marketer attempting to attract more brand-loyal customers is the feasibility
of segmenting this group. That is, are those consumers identifiable? Customers generally
do not appear to differ significantly from other customers on most segmentation basis.
The marketer may be more successful, however, in discerning unique characteristics of
custom-ers loyal to his particular brand or product. Such an analysis will be quite fruitful
as the analyses may provide him with useful insights for developing attractive marketing
strategies including focused loyalty programs.
Wind (1977) has proposed a matrix, as shown in figure below,
incorporating attitudes and behavior by which the marketer may assess the brand’s
vulnerability. It provides some indication of the magnitude of the exposure. In the first
two rows, the more the brand is disliked, the greater is the vulnerability. In the third row,
the greater the brand is liked, the more vulnerable are customers to competitive brands.
Of course, the marketer would need to identify the relevant reasons for consumers
liking or disliking the brand. With such information, the insights may be gained into not
only the size of the loyal and vulnerable segments but also the magnitude and nature of

customer’s vulnerability. Loyalty/marketing plans may then be developed aimed at

reducing buyers’ vulnerability while attracting customers of competing brands.
These various goals of the marketers may necessitate different marketing
strategies. For instance, increasing brand loyalty of present customers may necessitate
better after sales service, while attracting new customers to become steady users may
require certain inducements such as price discounts. Thus, the varying ranges of brand
loyalty that the marketer faces point to different competitive actions. For less highly
committed consumers, a catchy advertising message, coupled with coupon offers, free
samples, p-o-p displays, or attractive package could cause to switch over to the
marketer’s brand, especially in certain product group such as foods, soaps, detergents etc.
the packaged goods field may be considered highly dynamic in this regard.
Attitude
Attitude toward
toward this
this Brand
Brand
“Indifferent”
“Like” it “Dislike” it
to
it and others
Customers of this brand who are

“Loyal” to it vulnerable to competitors
Buy it regularly
1 2 3
Purchase
Purchase
Pattern
Pattern
with
with
respect
respect to
to Buy it Customers of this brand who are
this brand
this brand occasionally vulnerable to competitors
4 5 6
Customers of this brand who Unlikely target

are for this brand
Do not buy it
vulnerable to competitors
7 8 9
Vulnerability Matrix

In order to induce brand switching among customers who are more loyal, the
marketer is more likely to require more fundamental changes in consumer perceptions
and attitudes. Therefore, significant revisions in product image are often necessary,
frequently manifested in revamped promotional programs.
Advertising decisions are usually geared to the loyalty situation that confronts the
brand. It is suggested that if brand loyalty is high, the advertiser has a good case for
“investment” expenditures where large amounts are expended over short periods of time
to attract new users, because continued purchases after the advertising has been curtailed
will “amortize” the advertising investment. Where a low degree of brand loyalty exists in
the product class, advertising expenditures should be made at a fairly steady rate on a
pay-as-you-go basis, with demonstrated returns in extra sales equal to or greater than the
extra advertising costs.
Frequency marketing approaches seek to increase the yield from the organizations
best customers by developing a long-term, interactive, value-added relationship. By
concentrating on loyal customers, treating them as individuals, and providing them with
discounts, free products or services, or simply information, their relationship with the
firm and its brand can be solidified.
The traditional conceptualization of attitudinal brand loyalty includes cognitive,
affective, and behavioral intent dimensions. Conventional brand loyalty development
efforts have relied substantially on brand image building through mass media
communications
BRAND PERSONALITY
Based on the premise that brands can have personalities in much the same way as humans,
Brand Personality describes brands in terms of human characteristics. Brand personality is
seen as a valuable factor in increasing brand engagement and brand attachment, in much the
same way as people relate and bind to other people. Much of the work in the area of brand
personality is based on translated theories of human personality and using similar measures
of personality attributes and factors.
Why Brand Personality?
Many of the world's most powerful brands spend a great deal of time putting personality
into their brands. It is the personality of a brand that can appeal to the four functions of a
person's mind. For example, people make judgments about products and companies in
personality terms. They might say, "I don't think that company is very friendly," "I feel
uneasy when I go into that branch," "I just know that salesmen is not telling the truth about
that product," or "That offer doesn't smell right to me." Their minds work in a personality
driven way. Given that this is true, then how can a company create a personality for its
product or for itself? The answer lies in the choice and application of personality values and
characteristics.
Imagine a person as a brand. She may be around 28 years of age, have fair features, a small
build and be pleasant-looking. These would be similar to a product's features. When you get
to know her a little better, your relationship may deepen, and you will be able to trust her,
enjoy her company, and even miss her a lot when she is not around. She is fun to be with
and you are strongly attracted to her values and concerns. These are emotions similar to the
associations which people develop with brand personalities. People, generally, like people.
So, if a personality can be created for a brand, it will be easier to attract consumers to the
brand. As brands grow, as do human relationships, it is the emotional dimension that tends
to become dominant in loyalty. Personality grows brands by providing the emotional
difference and experience.
Values and characteristics of brand personality:
People's personalities are determined largely through the values and beliefs they have, and
other personality characteristics they develop. An example of a value or belief is honesty.
Many people believe in being honest in everything they do and say. An example of a
characteristic is confidence. This is not a belief, but more of a behavior. There are, of
course, many values/beliefs and characteristics that a person may have, but there are some
that are particularly likeable. It is to these likeable values and characteristics that people are
inevitably attracted. Examples of these include dependability, trustworthiness, honesty,
reliability, friendliness, caring, and fun-loving.
There are about two hundred words that describe personality characteristics, and these can
be used for putting personality into brands. To illustrate how people think in personality
terms when making judgments about brands, here are the results of consumer research into
how people feel about two companies. When asked the question: "If these two companies
were people, how would you describe them?" their replies were:
Company A Company B
Sophisticated Easy going
Arrogant Modest
Efficient Helpful
Self-centered Caring
Distant Approachable
Disinterested Interested

These two companies are actually competitors in a service industry. If you were asked
which of these two companies you would like to be your friend, you would probably choose
Company B, as did 95% of other respondents. It is not surprising that the service level of
Company B can be a better experience for customers than that of Company A. It is also easy
to conclude that if consumers consistently experience these differences between the two
companies, then the brand image of Company B will be much better than that of Company
A.
A further point of interest arising out of this research is that people tend to prefer brands that
fit in with their self-concept. Everyone has views about themselves and how they would like
to be seen by others. And they tend to like personalities that are similar to theirs, or to those
whom they admire. Thus, creating brands with personalities similar to those of a certain
group of consumers will be an effective strategy. The closer the brand personality is to the
consumer personality (or one which they admire or aspire to), the greater will be the
willingness to buy the brand and the deeper the brand loyalty.
LEVERAGING BRAND EQUITY: BRAND EXTENSIONS
Traditionally the Indian market has seen extensions which are merely line extensions by
using the same brand name to launch new forms, flavors, variants or colors of the
existing product. Santro and Santro Zip Drive, Close-Up Red and Green, Colgate Gel and
Colgate toothpaste, Surf & Surf Ultra, are not brand extensions in the true sense, but
merely line extensions. Barring a handful of real extensions, like Denim soap & talcum
powder, Dettol antiseptic & floor cleaner, Anchor switches and toothpaste, most of the
marketing giants like HLL, P&G and Reckitt Coleman use multi-branding strategy.
It is only recently that the Indian marketers have realized the full potential of brand
extensions. And going by number of companies adopting the brand extension concept it
looks like the idea has taken root in the mind of brand strategists as a viable growth
strategy in the Indian market.
Why Brand Extensions:
Introduction of a new product with an established brand name can dramatically

reduce the investment required and improve the likelihood of its success. It is therefore
not surprising that brand extensions have been the strategy of growth for many firms
during the past decades. Brand extensions provide a vehicle to exploit brand name
recognition and brand image. A strong brand name can provide consumers with the
familiarity and knowledge of a reputable brand. Additionally, brand extensions can
decrease the cost of accessing distribution channels and make promotional efforts more
efficient. One researcher defines brand extension as "using a brand in one category to
introduce products in a totally different category."
Brands are basically a promise to the consumers underlying the trust, familiarity,
risk reduction and provide emotional benefits. Strong brands are therefore enormously
attractive to senior managers, whose interest is fed by any number of books and articles
on how to get and keep them. But anyone who thinks seriously about branding soon
realizes that there are basically two kinds of strong brands: those that are focused and
those that are diversified.
Focused like IBM concentrating on personal computers and accessories or

diversified like Wipro which includes vanaspati, lighting, soaps, healthcare, computers,
and baby diapers. On one hand, IBM has maintained a focused link between its brand and
its core product line: personal computers. At the other end is Wipro. IBM has decided to
remain focused for now, while Wipro elected — and managed — to diversify. The
crucial question for confronting strategists is whether to extend the brand or stay focused.
As these examples show, a strong company can do well in either.
Benefits of Brand Extensions
At least four factors appear to be driving the brand extensions. First, leveraging a
brand widely tends to lower brand management support costs. Second, the tendency to
leverage the franchise with existing consumers is another major attraction. Third,
relationship benefits seem to have growing importance for customers; relationship
building (through loyalty programs, better service, and a better understanding of
customers) may now count for more than functional benefits. As relationships outstrip
products in importance, leveraging brands makes more and more sense. Fourth the
prospects of extending the brand in a new and growing market imply supernormal profits
and opportunities for growth.
A critical assumption underlying the use of brand extensions is that strong brands
offer greater leverage for extension than weaker brands. Brand strength has been
implicitly defined in terms of consumer predispositions towards the brand. Established
brands tend to be used as quality cues. A recognizable brand is often relied upon by
consumers as a strategy for dealing with perceived risk.
Placing a trusted brand name in a new category is less expensive and risky than
creating a new brand, particularly with new products failure rates exceeding 90%;
entering a new category generates increased exposure for the brand across the store, and
therefore may serve to strengthen the base brand.
Extensions across venues are less likely than traditional line extensions (i.e. new
flavors, varieties, models, etc.) to cannibalize sales of the original brand; and Most
importantly, extensions (particularly licensing) can provide an additional revenue stream
with little extra effort or expense.

Core brand associations are conveyed to extensions

Consumer evaluation of a brand extension is frequently described by a transfer
process in which core brand associations are conveyed to the extension. As we have seen,
brand associations can vary among consumers, across usage situations, and in different
competitive environments. Potentially, the core brand may provide a group of salient,
positively evaluated, relevant associations which are valid within or across product
categories. Ideally, a core brand’s associations can contribute a complex, yet well-defined
image to an extension. A well-established brand usually has a well-defined brand image.
A great benefit of brand extension is the instant communication of a salient image.
In addition to brand associations, extension can convey quality associations. To
avoid advertising battles based on product specifications, one can compete on the basis of
perceived high quality. Hewlett-Packard has used this strategy by extending its name to
numerous products and thereby has extended its umbrella of quality to them. When
quality is perceived to be high it is valuable to share the benefits of a core product with an
extension. Without perceived high quality, however, the task is impossible.
Another benefit of extension is the cross fertilization which advertising the core brand
can bring. That familiarity also provides consumers with another benefit in the form of
reduced risk with a new product. Consumers confronting Diet Coke for the first time
would know that it was a Coca-Cola product of assumed high quality. In reported tests of
new products, most support the fact that an established brand name enhances initial
consumer reaction, interest, and trial.
Enhancing the core product
The final benefit of extension is enhancing the core product. Like a successful
offspring, an extension may reinforce the core product's brand image instead of
weakening it. Diet Coke is clearly positioned as a tasty, low-calorie soda and reinforces
Coke's association with cola and good taste.
Brand Extension Dilemmas:
Brand extensions can be accomplished in a variety of ways. One of the most

obvious differences is whether the extension is in the same or different product category.
Thus they can be classified as either vertical or horizontal extensions.
Extend a current brand name to a new product
Horizontal extensions
Typically, horizontal brand extensions either apply or extend an existing product's
name to a new product in the same product class or to a product category new to the
company. There are two varieties of horizontal brand extensions which differ in terms of
their focus. They are termed line extensions and franchise extensions. Line extensions
involve a current brand name which is used to enter a new market segment in its product
class. Diet Coke and Diet Pepsi are examples of line extensions since they focus on the
diet conscious segment for colas not served by their parent products. In contrast,
franchise extensions use a current brand name to enter a product category new to the
company. Denim after shave and Denim shaving cream are examples of franchise
extension.
Extension distance
One brand extension variable studied recently is the distance of the extension
from the core product. Close extensions may be in the same product category and share
the same feature set as the parent product. Distant extensions may be in unrelated product
categories and rely on overall quality associations from the parent for success.
Horizontal extensions lend themselves to natural distancing. Distancing is the
purposive increase in the perceptual distance of the extension from the core product.
Unsuccessful horizontal extensions are less likely to damage the core brand than vertical
extensions since horizontal extensions are often in different - and more distant - product
categories. Typically consumers will recognize that such horizontal extensions are not
closely related. The downside to distancing is that distancing reduces the amount or
strength of the brand associations and reduces the halo effect of the extension.
Importance of associations
Horizontal extensions may suffer if the core and extension are perceived to be too
distant from each other. Brand associations cannot stretch over too large a gulf. Research
indicates that if the core product is perceived to be of high quality, and the "fit" between
the core and extension is high, then brand attitudes toward the extension will be more
favorable. Without the perceived similarity between the parent and extension, consumers
find it more difficult to attribute original brand associations to the extension.
Vertical extensions
In contrast, vertical extensions involve introducing a related brand in the same
product category but with a different price and quality balance. They offer very little
distancing. Vertical extensions offer management the quickest way to leverage a core
product's equity. However, since the new product is in the same category, distancing is
difficult and the risk of negative information is higher than with a horizontal extension.
As a strategy, vertical brand extension is widely practiced in many industries. For
example, within automobile brands, the various models attempt to offer distinct price-
quality bundles to attract a variety of market segments. Often a product will be extended
in an attempt to garner more of the market.
Brand images
Type of product extended

Two main types of products undergo brand extension: products with function-
oriented brand images and products with prestige-oriented brand images. Function-
oriented products are visualized in terms of brand unique aspects that are related to
product performance. In contrast, a prestige-oriented brand is visualized primarily in
terms of a consumer's expression of self-image. Thus, a Gillette Sensor razor is a
function-oriented product because consumers are most concerned with performance, that
is, whether it shaves well or not. Conversely, consumers would be more concerned with
the prestige aspects of a Mercedes Benz. Each type of product has unique brand
associations and lends itself to different forms of extension.
For both function-oriented and prestige-oriented brand names, the most favorable
consumer reactions can be expected when brand extensions and core brands have high
concept consistency and high product feature similarity. This reinforces the need for fit
between the core product and its extension.
Upscale or downscale
Vertical extension direction

Vertical new product introductions can extend in two directions, upscale,
involving a new product with higher price and quality characteristics than the original; or
downscale, involving a new product with lower quality and price points.. The vertical
extension is the type of new product introduction which seems to carry less risk and
seems more appealing to management. The new product is in the same category as the
parent, aims at a similar market segment as the parent, and may enjoy the same
acceptance as the parent.
Downscale vertical extensions: Downscale vertical extensions may offer the
equivalent of sampling to a new market segment, and bring some market share
enhancement. Functional products, like computer software, offer some unique
opportunities.
Potential benefits of downscaling

The potential benefit of a downgraded version of a functional product with a
subset of features is that the new segment will learn about and gain experience with the
product. When companies promote clearly the downgraded versions’ lack of some
features, coupled with an appropriate low price, they affect both users of the extension
and of the core product. New consumers may react favorably to the free or inexpensive
product. Core consumers who use the full-featured product will understand that their
price-quality balance is higher, and should not resent the low-cost, low-quality extension.
When users of the downscale extension need more power, it is less costly in terms
of retraining and search costs to trade up to the full-featured product. Thus, if the
downscale extension is successful, the company will have foreclosed competitors from
the new user market segment. If, on the other hand, the extension is not successful, new
users will probably avoid the core product entirely. This is another situation in which
managers should craft extensions carefully, and foreknowledge of consumer reactions is
vital.
Prestige may be tarnished

With prestige-oriented products, the reverse is true. Downscale extensions usually
bother the core audience. If consumers view the downscale extension as a cheaper
version of "their" prestige product, the prestige is tarnished and core consumers may feel
cheated.
A significant amount of recent literature examined aspects of vertical extensions. In
general, downscale vertical extensions of function-oriented products may be accepted,
while downscale extensions of prestige-oriented products will probably damage the core
product's image.
Upscale vertical extensions: Functional products seem to allow downscale but not
upscale extension. Conversely, prestige products allow upscale but not downscale
extensions. An example of a functional product, the Gillette Sensor razor, offered a
successful downscale extension, the Gillette disposable razor. The product and its
advertising reflected a cheap, disposable concept which offered much of the functional
benefits of the Gillette Sensor, with less cost. In contrast, Gillette attempted an upscale
extension, a gold-tone plated luxury Gillette Mach III razor, with little success.
Consumers valued the cheap disposable for situations like traveling, but would not pay a
premium price for the functions of a "decorated" but otherwise ordinary razor.
Upscale extensions enhance prestige

Upscale extensions of prestige products seem more acceptable. The limited or
luxury editions of various automobile models seem to be popular, even at a higher price.
Consumers seem to recognize and accept the enhanced prestige brand image of such
upscale extensions.
Brand Extension Strategies:
Fit and Similarity
Several authors have suggested that an effective brand extension must be

perceived as a "fit" with the original. Fit has been defined as the extent to which a
consumer accepts the new product as a logical and expected extension of the brand. A
poor fit between the original brand and the extension may diminish the appeal of the new
product. Positive attributes may not transfer from the brand to the extension..
Three aspects of fit are:

(1) complementarity, defined as the extent to which two products can be

utilized in common usage situations or can together satisfy some need, (e.g.,
cricket bats and cricket balls);
(2) substitutability, or the extent to which the two products can replace the
other in satisfying the same need (i.e., pizza and burger);
(3) transferability, defined as the extent to which manufacturer's expertise in

one category transfers to the extension product. This expertise includes
production facilities, employees, and the skills of the firm.
Neither complementarity nor substitutability had significant main effects in rating the
brand extensions. Rather, the complementarity and substitutability measures interacted
with the perceived quality of the original brand to predict brand extension evaluation.
Transferability (i.e., perceived expertise of the manufacturer to make the extension
product) had a direct impact on the evaluation of brand extensions. For example
McDonald's photo processing caused some subjects to comment that McDonald's should
remain in the food business and had no credibility as a photo-processor.
Positive ratings of a brand seem to transfer to brand extensions. Further, there

seems to be greater transfer of affect from the brand to the brand extension when the
brand extension was very similar to the original brand product. Correlations between
attitude toward the original brand and attitude toward extensions decreased as the degree
of similarity decreased. The process of affect generalization from the brand to the brand
extension may not take place when the extension is insufficiently similar to the original
brand.
Successful brand extension depends on consumer perceptions of how it "fits" both in

terms of similarity and consistency with the brand concept. Take two well known brand
names, Timex and Rolex. Both brands are in the watch category but convey very
different meanings to consumers. Rolex is associated with the concept of luxury and
prestige, while Timex 'is associated with product performance. Both product feature
similarity and brand concept consistency were found to be important predictors of
favorable reactions to brand extensions. Further, the authors suggest that concept
consistency may have a greater effect on the prestige brand than on the functional brand.
Extensions Should Support Brand Positioning
Extensions are even more powerful when linked back to the customer relationship
and how it has been used as a basis for brand positioning. This means ensuring that the
extension builds off one or more of the following positioning components:

• It extends the target market: Gillette’s Sensor for Women leveraged the
definition of the business Gillette’s in and its brand benefit of the
clean shave,” effectively extending its target market from
only men to all adults who shave.
• It extends your business definition: In launching IBM Consulting, IBM
changed the definition of the business it was in from “technology-based”
to “technology-based solutions.”
• It extends your point of difference: By introducing the benefit of “faster
relief,” Dispirin grown its points of differentiation. So has Bluedart by
establishing a new drop-off time for packages of midnight in some
locations.
• It extends the entire positioning. This usually occurs when a business is
trying to enter a new market for the first time with a brand whose strengths
are recognized beyond its current target market and current definition of
the positioning. This can be risky, but done right, it allows a company to
diversify its range of branded products and take a true portfolio approach
to managing its brand.
Creating a category
This may be one of the ways in which brand extension can be successful. A brand
that is moved into an existing product or service category may end up as a me-too unless
it is able to achieve significant differentiation from the competitors. The new variant must
be able to promise something different such as simplicity or sustained added value
compared with existing brands in the sector. Nokia’s development of a fashion element
within the mobile phone sector moves the brand into a potentially lucrative area.
Extending to revitalize
Brand extensions can be one way in which the brand is kept modern and alive.
Nescafé is an example of a strong parent brand that has used brand extension to develop a
series of variants that are able to target different coffee drinking occasions, consumer
types and price sectors. In turn these are able to strengthen the Nescafé parent brand. The
addition of a service or experiential element such as Café Nescafé can also strengthen the
brand by moving it beyond mere imagery to the provision of genuine consumer
engagement. Nescafé can thus be equally an established and modern, up-to-date brand.
Extensions Should Support Brand Positioning
Extensions are even more powerful when linked back to the customer relationship
and how it has been used as a basis for brand positioning. This means ensuring that the
extension builds off one or more of the following positioning components:
• It extends the target market: Gillette’s Sensor for Women leveraged the
definition of the business Gillette’s in and its brand benefit of the
clean shave,” effectively extending its target market from
only men to all adults who shave.
• It extends your business definition: In launching IBM Consulting, IBM
changed the definition of the business it was in from “technology-based”
to “technology-based solutions.”
• It extends your point of difference: By introducing the benefit of “faster
relief,” Dispirin grown its points of differentiation. So has Bluedart by
establishing a new drop-off time for packages of midnight in some
locations.
• It extends the entire positioning. This usually occurs when a business is
trying to enter a new market for the first time with a brand whose strengths
are recognized beyond its current target market and current definition of
the positioning. This can be risky, but done right, it allows a company to
diversify its range of branded products and take a true portfolio approach
to managing its brand.
Creating a category
This may be one of the ways in which brand extension can be successful. A brand
that is moved into an existing product or service category may end up as a me-too unless
it is able to achieve significant differentiation from the competitors. The new variant must
be able to promise something different such as simplicity or sustained added value
compared with existing brands in the sector. Nokia’s development of a fashion element
within the mobile phone sector moves the brand into a potentially lucrative area.
Extending to revitalize
Brand extensions can be one way in which the brand is kept modern and alive.
Nescafé is an example of a strong parent brand that has used brand extension to develop a
series of variants that are able to target different coffee drinking occasions, consumer
types and price sectors. In turn these are able to strengthen the Nescafé parent brand. The
addition of a service or experiential element such as Café Nescafé can also strengthen the
brand by moving it beyond mere imagery to the provision of genuine consumer
engagement. Nescafé can thus be equally an established and modern, up-to-date brand.
BRAND EQUITY AND BRAND VALUATION
Brand equity has received considerable attention in the marketing literature in recent
years. Much of this attention has focused on developing alternative theoretical definitions

of brand equity; as a result, some confusion surrounds the implications of brand equity
issues in marketing research applications. The authors discuss the role of brand names in
consumer purchase decision-making processes and provide a framework within which
brand equity issues can be examined by marketing researchers.
In 1988, Lance Leuthesser concluded that there was no precise definition of brand equity
nor even common agreement on what it is." More recently, however, several definitions
of brand equity have been published, including:
• "Broadly stated, brand equity refers to the residual assets resulting from the
effects of past marketing activities associated with a brand." (Rangaswamy et al.
1990)
• Brand equity is added value that "is attributable to the brand name itself which is
not captured by the brand's performance on functional attributes." (Sikri 1992)
• "Brand equity can be measured by the incremental cash flow from associating the
brand with the product." (Farquhar 1989)
• "Brand equity is defined in terms of the marketing effects uniquely attributable to
the brands -- for example, when certain outcomes result from the marketing of a
product or service because of its brand name that would not occur if the same
product or service did not have that name." (Keller 1993)
• "A consumer perceives a brand's equity as the value added to the functional
product or service by associating it with the brand name." (Aaker 1993)
A brand is a name or symbol used to identify the source of a product. When developing a
new product, branding is an important decision. The brand can add significant value
when it is well recognized and has positive associations in the mind of the consumer.
This concept is referred to as brand equity.
What is Brand Equity?
Brand equity is an intangible asset that depends on associations made by the consumer.
There are at least three perspectives from which to view brand equity:
• Financial - One way to measure brand equity is to determine the price premium
that a brand commands over a generic product. For example, if consumers are
willing to pay $100 more for a branded television over the same unbranded
television, this premium provides important information about the value of the
brand. However, expenses such as promotional costs must be taken into account
when using this method to measure brand equity.
• Brand extensions - A successful brand can be used as a platform to launch
related products. The benefits of brand extensions are the leveraging of existing
brand awareness thus reducing advertising expenditures, and a lower risk from the
perspective of the consumer. Furthermore, appropriate brand extensions can
enhance the core brand. However, the value of brand extensions is more difficult
to quantify than are direct financial measures of brand equity.
• Consumer-based - A strong brand increases the consumer's attitude strength
toward the product associated with the brand. Attitude strength is built by
experience with a product. This importance of actual experience by the customer
implies that trial samples are more effective than advertising in the early stages of
building a strong brand. The consumer's awareness and associations lead to
perceived quality, inferred attributes, and eventually, brand loyalty.
Strong brand equity provides the following benefits:
• Facilitates a more predictable income stream.

• Increases cash flow by increasing market share, reducing promotional costs, and
allowing premium pricing.
• Brand equity is an asset that can be sold or leased.
However, brand equity is not always positive in value. Some brands acquire a bad
reputation that results in negative brand equity. Negative brand equity can be measured
by surveys in which consumers indicate that a discount is needed to purchase the brand
over a generic product.
Building and Managing Brand Equity
In his 1989 paper, Managing Brand Equity, Peter H. Farquhar outlined the following
three stages that are required in order to build a strong brand:
1. Introduction - introduce a quality product with the strategy of using the brand as
a platform from which to launch future products. A positive evaluation by the
consumer is important.
2. Elaboration - make the brand easy to remember and develop repeat usage. There
should be accessible brand attitude, that is, the consumer should easily remember
his or her positive evaluation of the brand.
3. Fortification - the brand should carry a consistent image over time to reinforce its
place in the consumer's mind and develop a special relationship with the
consumer. Brand extensions can further fortify the brand, but only with related
products having a perceived fit in the mind of the consumer.
A powerful brand is said to have high brand equity, higher the brand equity ,
higher is the brand loyalty, name awareness, perceived quality, strong brand

associations, and other assets such as patents, trademarks, and channel relationships. The
point is that a brand is an asset insofar as it can be sold or bought for a piece. Certain
companies are basing their growth on acquiring and building rich brand portfolios.
Brand value involves actually placing a rupee value on a brand name. The reasons
for doing this are usually to set a price when the brand is sold and also to include the
brand as an intangible asset on a balance sheet (a practice which is not used in some
countries). While there are many methods for making this measurement, some of which
will be described shortly, it is important to note that there is a significant difference
between an "objective" valuation created for balance sheet purposes, and the actual price
that a brand may get when sold. A brand is likely to have a much greater value to one
purchaser than another depending on the synergy that exists. Therefore it should be noted
that different potential acquires would leverage the brand in different ways and would
accordingly pay more or less for these brands.
For acquisitions, the value of a brand to a certain purchaser is often estimated
through scenario planning. This involves determining what future cash flows could be
achieved by the company if it owned and took advantage of the brand. What this means is
that there is no such thing as an absolute value for a brand, and brand value needs to be
considered as only one component of the overall equity of a brand.
Measuring the actual equity of a brand name is somewhat arbitrary.
Aaker(1996a), describe five different approaches, including basing it on the price
premium, the stock value, the brand replacement value, and so on. For example, one
measure of brand equity value is the price premium the brand commands times the extra
volume it moves over what an average brand would command.
It is difficult to value a brand precisely. A brand’s value is a function customers’
perception, his/her attitude towards it and the economic value or price that he or she
attached to the brand. A brand’s price reflects customer’s perceived value. If the
customer perceives higher value in the brand, then he or she will be willing to pay a
premium to buy it.
Different perspectives of brand valuation
Brand valuation has been viewed from a variety of perspectives. The first
perspective has used the concept of brand equity in the context of marketing decision-
making. The second perspective is financially based and views brand equity in terms of
incremental discounted future cash flows that would result from branded product
revenue, in comparison with the revenue that would occur if the same product did not
have the brand name (Simon & Sullivan, 1993).
MARKETING PERSPECTIVE

Aaker (1991) has provided the most comprehensive definition of brand equity to
date: “A set of brand assets and liabilities linked to a brand, its name and symbol , that
adds to or detracts from the value provided by a product or service to a firm and/or to the
firm's customers.”
Aaker has also synthesized some contemporary thinking about marketing and
depicted a comprehensive yet parsimonious set of factors that contribute to the
development of brand equity (Aaker, 1996b). He has contemplated that, to a greater
extent, the equity of a brand depends on the number of people who purchase it regularly.
Hence, the concept of brand loyalty is established as a vital component of brand equity.
Strong effects of brand recognition on choice and market share are discussed and
documented extensively in marketing literature. That is why Aaker regards the concept of
brand awareness as a second component of brand equity. Considering the PIMS findings
(Buzzell and Gate, 1987), perceived quality is included as another significant component.
Other proprietary brand assets - such as patents, trademarks, and established channel
relationships - constitute the final component.
Loyalty
Price Premium
Aaker(1996) suggest that one of the most effective approaches to the valuation of
a brand is the premium that it commands in the market. A basic indicator of loyalty is the
amount a customer will pay for a product in comparison to other comparable products. A
price premium can be determined by simply asking consumers how much more they
would be willing to pay for the brand? According to him if the price premium for a brand
can be obtained, then the value of the brand in a given years will be the price differential
(premium) times the number of units sold. For Example, if a firm’s brand commands a
premium of Rs. 5 per unit and it has sold 2,50,000 units, then the brand’s value is
Rs.12,50,000.
A consumer may be willing to pay more for brand A than brand B. this is the
price premium associated with brand loyalty. It could be high or low, and positive or
negative. While measuring price premium, it is necessary to divide the market into
loyalty segments. Premium is always with respect to one or a set of competitors, which
must be specified. A simple question put to the customers measures price premium, e.g.
how much more would you pay so as to buy Sony TV instead of Videocon TV?
According to Chunawalla(1999), a sophisticated approach would be to conduct conjoint
analysis or trade-off analysis. A drawback of this approach is its reference to a competitor
or set of competitors. It is necessary to arrive at several sets of price premiums when
there are a number of brands in the market. Even then an emerging competitor might be
missed.
Customer Satisfaction: Satisfaction or preference for a brand shows how loyal the
consumer is likely to be to a brand. A direct measure of customer satisfaction can be
applied to existing customers. The focus can be the last use experience or simply the use
experience from the customer's view.
Consumers are asked about their experience with the brand, and whether the
brand met their expectations. Preference is measured by asking them whether they
assessed whether the usage of the brand caused some inconvenience. There can be direct
questions about loyalty to the brand, e.g., are you loyal to this brand? Satisfaction model
is very useful in service industry like airlines and banks. One drawback of this model is
that it can be applied only to the users and customers.
Perceived Quality and Leadership Measures
Perceived Quality is one of the key dimensions of brand equity and has been shown to be
associated with price premiums, price elasticities, brand usage and stock return. It can be
calculated by asking consumers to directly compare similar brands.
Leadership/Popularity has three dimensions. First, if enough consumers are buying into
the brand concept it must have merit. Second, leadership often taps innovation within a
product class. Third, leadership taps the dynamics of consumer acceptance. Namely,
people are uneasy swimming against the tide are a likely to buy a popular product. This
can be measured by asking consumers about the product's leadership position, its
popularity and its innovative qualities.
Associations/ Differentiation Measures

Perceived Value: This dimension simply involves determining whether the product
provides good value for the money and whether there are reasons to buy this brand over
competitive brands. We can ask consumers how much more valuable the product in
question is than another can. In other words, we have to assess what percentage rise in the
preferred product will make him switch to the less preferred one. Another dimension is to
put priced products before the consumers. Then they are asked how much of each product
they are willing to buy. Prices can then be varied, and the same exercise is repeated. It
assesses the relative value of different products in the perception in the perception of the
consumers.
Brand Personality: This element is based on the brand-as-person perspective. For some
brands, the brand personality can provide links to the brands emotional and self-
expressive benefits.

Organizational Associations: This dimension considers the type of organization that lies
behind the brand.
Young and Rubicam Brand Asset Valuator Model (Y&R Model)
Prominent among brand valuation models, which are based on consumer

perceptions, is the Young & Rubicam Brand Asset valuator (Y&R model). The Y&R
model determines the value of a brand based on two major dimensions, viz. Brand
strength and brand structure.
Perceived Personal
distinctiveness of appropriate of
the brand the brand
(Differentiation) (Relevance)
Brand
Asset
Valuator
(BAV)
Regard for Understanding

the brand of the offering
(Esteem) (Knowledge)
Young & RubicomBrand Asset Value Approach

Brand strength is the combination of differentiation (which is a measure of
distinctiveness of the brand in the market) and relevance (which refers to the
meaningfulness and appropriateness of the brand to the consumer).
Brand stature, on the other hand, is a combination of esteem and knowledge,
where esteem refers to the popularity, quality perception and regard for the brand in the
mind of consumers and knowledge refers to the positive understanding by the consumer
as to what the brand stands for.
The Y&R model can be used as a diagnostic tool. By mapping the brand along the
two dimensions of brand stature and brand strength, the marketer can assess the health of
the brand. Other consumer-focused models essentially value brands along similar lines
with varying degrees of sophistication.
Brand strength is the combination of differentiation (which is a measure of
distinctiveness of the brand in the market) and relevance (which refers to the
meaningfulness and appropriateness of the brand to the consumer).
Brand stature, on the other hand, is a combination of esteem and knowledge,
where esteem refers to the popularity, quality perception and regard for the brand in the
mind of consumers and knowledge refers to the positive understanding by the consumer
as to what the brand stands for.
The Y&R model can be used as a diagnostic tool. By mapping the brand along the
two dimensions of brand stature and brand strength, the marketer can assess the health of
the brand. Other consumer-focused models essentially value brands along similar lines
with varying degrees of sophistication.
Awareness Measures
Brand awareness reflects the salience of the product in the consumer's mind and involves
various levels including recognition, recall, brand dominance, brand knowledge and
brand opinion.
Market Behavior Measures
Market Share. The performance of a brand as measured by market share often provides a
valid and dynamic reflection of the brand's standing with customers.
Price and Distribution indices. Market share can prove deceptive when it increases as a
result of reduced prices or promotions. Calculating market price and distribution
coverage can provide or more accurate picture of the product's true strength. Relative
market price can be calculated by dividing the average price at which the product was
sold during the month by the average price at which all the brands were sold.

FINANCIAL PERSPECTIVE
Simon and Sullivan (1993) have presented a financial-market-value-based

technique for estimating a firm's brand equity. The stock price is used as a basis to
evaluate the value of the brand equities. Brand equity is defined as "the incremental cash
flows which accrue to branded products over unbranded products". The estimation
technique extracts the value of brand equity from the value of the firm's other assets.
First, the macro approach assigns an objective value to a company's brands and relates
this value to the determinants of brand equity. Second, the micro approach isolates
changes in brand equity at the individual brand level by measuring the response of brand
equity to major marketing decisions. Simon and Sullivan believe that financial markets
do not ignore marketing factors and stock prices reflect marketing decisions.
Book or Replacement Values
Brand equity is estimated as the replacement cost of the brand over a generic
equivalent. A generic equivalent is a product that is sold only on the basis of product
attributes. Alternatively, replacement value can be estimated as book value. The
challenge with this latter method is that marketing expenditures do not appear on the
balance sheet. For either method, replacement cost is difficult to estimate accurately.
Market Transactions
Brand equity is estimated by identifying comparable mergers or acquisitions. The

premiums paid for those companies are associated with the equity in their brands. Data is
scarce for comparable M&As, however, and buyers could have paid more or less than the
true value of brands.
Incremental Cash Flow from Branding
Brand equity is estimated by determining the cash flows of a brand and

subtracting the cash flows from an unbranded product. The estimation challenge becomes
more difficult as the product of interest belongs to an increasingly differentiated category.
For example, it is harder to find a generic equivalent for cars than for cigarettes.
Discounted Value Of Future Earnings Projections
Brand Equity is evaluated by discounting the value of future earnings projections

and adding to the value the cost competitors would incur if they duplicated the brand.

Price/Earnings Multiple
Multiplying current earnings by an estimate for P/E multiple yields an equity

price. The critical step is estimating the P/E multiplier. One approach that has been taken
is to measure brand strength by a weighted average of seven factors. (Penrose, 1989)
Next, the P/E multiplier is estimated using and S-shaped relationship between brand
strength and the P/E multiple that is based on similarities to risk free rates, industry rates,
and other factors.
Value of Avoided Advertising
Advertising is a key tool for developing brand strength that management can
leverage into equity. Advertising can affect how readily a consumer associates attributes
with a brand, what brands consumers include in their evoked set, and other behavioral
and perceptual factors. The effect of advertising builds up over time and leads to
extending brands with greater ease and less cost. An estimate of Brand Equity is the value
of advertising avoided to achieve the current level of performance.
The Inter-Brand approach:

The pioneer in the field of brand valuation is the Interbrand Group PLC. Here an
attempt is made to estimate current and future earnings from the brand. Under this model
the value of a brand is a function of two factors: its earnings and its strength. While the
brand’s earnings are a measure of potential profitability, the brand’s strength is the
measure of its reliability of its future earnings. The greater the brand’s strength, greater is
the reliability of its future earnings and lesser the risk. Since it is difficult to attribute all
the earnings to the brand per se, adjustments need to be made to the earnings estimates.
These include elimination of unbranded profits, that is a brand's earnings are adjusted,
e.g., earnings that an unbranded product would have made, deduction for returns on the
assets employed etc.
Brand Strength
A brand's strength is composite constituted by measuring the following seven
variables:
Leadership : This is the ability of the brand to influence the market.
Stability : This is the characteristic that has made the brand the inherent "fabric" of
the market.
Market : This is the structural attractiveness of the market, its projected growth, entry
barriers etc
Geographic : Appeal and acceptability of the brand is across different markets with a
view to distinguish between regional, national and international brands.
Trend : This is the brand’s ability to remain contemporary and relevant to consumers
Support : This is the quantity and quality of support and investments made to
maintain the brand.
Protection : This is the protection received from the legal system, patents,
trademarks, etc.
Measurement of the seven variables, based on a detailed audit would determine a

brand’s strength A brand adjusted estimated earnings are discounted by the measure of
brand strength so as to get the present value.
Valuation of brands by inter-brand approach has an 'accounting focus' although
valuable, especially in an acquisition and merger context. It has relevance for audit
purposes which stem from the desire to ensure that the value arrived at is auditable.
Further from a marketer’s perspective, the Interbrand approach does not explicitly
measure consumers’ perception of the brand, which is critical for marketing decision
making, especially on brand extension.
Other Approaches
Brand mangers can measure overall brand value through a variety of means
basically, measuring brand value requires answering the question “How much more value
does the product have with the brand name attached?” One other method can also be
used, by simply using brand name as an attribute and using the different brand names in
the market or fictitious brand name being considered for a new product, the part-worth
estimated are quantitative measures of the value of a brand name relative to the others
used in the experimental design.
A related method relies on so-called hedonic regression. This technique combines
actual product features and prices to regress market price (or the amount customers say
they are willing to pay for various products) against product features and brand name:
Price = B0 + B1 (Feature) + B2 (Feature 2) + … +C1 (Brand A) + C2 (Brand B)+…
The output gives a rupee value for each brand. (Of course, when actual prices are
used, this analysis ignores the sales volume of each brand, so it may present a somewhat
distorted view of the value to those customers who choose to buy each product.)
The various components of brand value can also be assessed in relatively
straightforward ways. Different levels of awareness measurement (e.g., aided or unaided)
are possible. Quality associations can be directly assessed (“If ABC Inc. made a product
with X amount of attribute A, how much of attribute B would you expect it to have?”).
One approach called Valmatrix analysis, developed by Trademark and Licensing
Associates (TLA), values a brand by the amount another party will pay to rent or buy the
brand name. TLA bases its valuation on comparable sales, licensing and royalty
agreements, as well as on 20 key descriptors of brand strength such as margins, life cycle
position, extenuation potential and others. The rank order of brand names in Health and
Beauty Aids is Gillette, Johnson & Johnson, Estee Lauder, Chanel, and Avon; for
Apparel/Fashion it is Nike, Adidas, Reebok, Dior and Yves Saint Laurent.
An example of a survey approach is Total Research’s EquiTrend, in which 2,000
households are polled by telephone. Consumers are asked to rate brands on a scale from 0
to 10 where 10 represent extraordinary quality and 0 poor or unacceptable quality. In its
1996 survey, the top five brand names were Kodak, Disney World, National Geographic,
The Discovery Channel and Mercedes-Benz; the bottom five (out of the top 100) were
Wal-Mart, Apple Macintosh, The Disney Store, Toyota Landcruiser and Universal
Studios.
An example from the technology area is a quarterly survey conducted by Techtel
Corporation. The firm surveys business buyers of computer equipment including
software and hardware on behavioural measures such as awareness, trial, purchase and
repurchase intention. The survey also measures the percentage of the buyers who have a
positive opinion about a brand. An illustration of the results is shown in for IBM
notebook computers. The squares represent the opinion measure while the vertical bars
represent those who bought recently (within the previous quarter). While the opinion
measure itself is a measure of brand strength, the obviously high correlation between the
positive opinion and purchasing measures gives some assurance that the brand strength is
being converted into actual buying behaviour.
Alternative Means to Brand Equity
Building brand equity requires a significant effort, and some companies use alternative
means of achieving the benefits of a strong brand. For example, brand equity can be
borrowed by extending the brand name to a line of products in the same product category
or even to other categories. In some cases, especially when there is a perceptual
connection between the products, such extensions are successful. In other cases, the
extensions are unsuccessful and can dilute the original brand equity.
Brand equity also can be "bought" by licensing the use of a strong brand for a new
product. As in line extensions by the same company, the success of brand licensing is not
guaranteed and must be analyzed carefully for appropriateness.
Brand Experience
Brand experience is the process of taking the values of a brand and extrapolating them to
create an environment where the consumer becomes immersed, surrounded by colours,
shapes, sounds and sensations which embody what the brand is all about.
Through the creation of the "brand world", everything reflects and reinforces the brand.
No longer do consumers just consume a brand: with brand experience, they can dive into
the brand world and live their favourite brand.
Brand experience can take the product or service further into the consumer's psyche than
the more traditional uses of brand values alone, and so opens up new areas of association
and engagement for the consumer.
The creation of the brand experience represents an area that companies will have to
address in order to provide sustained differentiation for their brands. At a time when
consumers are becoming increasingly disenfranchised from many marketing activities
and many marketers are finding it difficult to differentiate their brands through
"conventional" means, the brand experience can represent the way forward.
Brand Experience is a wide concept that runs close to event marketing at one end and
relationship marketing at the other extreme. It looks beyond the brand to identify and
develop values that have a greater degree of relevance for the consumer. In doing this, it
moves much close to the consumer in terms of immersion, engagement or individual
relationships.
This is where brands can start to develop a competitive edge. Brand experience enables
marketers to provide genuine and sustainable differentiation which, in turn, provides a
strong defence against "me-toos" and other competitive threats. Meanwhile it enables
products and services to be transferred into unrelated categories.
Perceptual Mapping: The Directory of the Mind
"Marketing battles are not fought in the supermarkets, marketing battles are fought
inside the mind. A mean and ugly place where the terrain is tricky and difficult to
understand. Mapping the mental battleground can give you an enormous advantage."
Al Ries & Jack Trout,
Originators of Positioning Theory1969.
Marketing Warfare, 1986 (page 44-45).
Forget detailed marketing plans, maps are what strategists need.
Image trying to find a telephone number, a street, a web site, a book in the library or a file
in a computer without a directory. Most people would say it would be next to impossible

but marketers do this everyday. Marketers need to map out a directory before they can
even consider strategy but where is this directory? In the consumer’s mind of course.
Strategy is "big picture planning". Tactical is detailed planning. If you are a strategist,
you need to simplify the battlefield in order to understand the dynamics whether it is a
football game, chess, military war or marketing. Maps are the traditional tool used by
strategists to deduce strategy. Every good map should show the terrain along with the
position, size and type of forces of each competitor, including your own. The Hourglass
Positioning Method (see appendix) is a process for making such a perceptual map of the
file directory in the consumer’s mind. The final map (directory) is called a Hourglass
Positioning Chart. The Hourglass Positioning Method combines, builds on and
summarizes the world’s best marketing theories, into an easy to understand one page
map. The Hourglass Positioning Chart is deceivingly simple but extremely powerful
because in order to create the chart correctly, you must understand the theories of the
following leading experts in marketing: Demographic Theory, Segmentation Theory,
Strategic Square Theory, VALS Psychographic Theory, Perceptual Mapping
Theory, Positioning Theory, Focus Theory, Laws of Marketing, Name Selection
Theory, Marketing & Product Management, Brand Management Theory, Brand
Marketing Theory.
The Mind's Filing System: The Terrain.
Imagine saving a file in a computer without some sort of directory. Files would get lost
forever, much like 9 out of 10 new product concepts. The mind stores information in
memory (on the hard drive) very similarly to a computer or library but then it is
referenced on different file directories that the mind’s search engine uses. The mind’s
database is actually relational vs. linear in nature (see chart). Within the mind’s file
directory, concepts are segmented and stored; first by category (i.e. personal hygiene),
then by sub-category (toothpaste) and eventually over time by specific attribute (cavity
fighter). The mind is constantly gathering, sorting and ranking useful beneficial concepts
(i.e. #1 cavity fighter, #2 fresh breath, #3 teeth-whitener). Each new concept that the
mind gathers, gets a file folder and eventually a descriptive label (positioning attribute)
which is correctly placed in the file directory. Each person’s "file directory of the mind"
is slightly different just like everyone’s "personal computer file directory" because of the
differences in the data files. However, within a certain market segmentation (i.e.
boomers) the data files are surprisingly similar. For a new product to get into the "mind’s
file directory", you need a map of it.
Mapping the Terrain: The Hourglass Positioning Chart.

Unfortunately marketers cannot see this file directory in the consumer’s mind. To help
marketers, I developed the Hourglass Positioning Method which maps out a slice of the
directory on the Hourglass Positioning Chart. (The Hourglass Positioning Chart is
probably the foremost perceptual mapping system available in the world today.) The
method is very detailed but the goal is to make an exact copy of the reference directory of
how a group of consumers have stored existing concepts. This allows strategists to
ascertain the best "available positioning" to insert a new product concept (file) or capture
a "vacant concept" (file) in the consumer’s "file directory". The apex (see diagram) of the
hourglass shows the exact positioning needed. Needless to say, the more accurate the
map, the better chances are of developing a winning strategy. The Hourglass Positioning
Chart is the first "big picture" master directory map of the entire mental battlefield. It is
an extremely effective brand management tool because it compares concepts. This is
crucial for developing a winning marketing strategy.
The Mind’s File Operating System: The 22 Immutable Laws of Marketing.
Before you can claim a new concept, you must understand how the mind files concepts in
the memory (hard drive). It does not file concepts randomly but processes them using a
File Operating System which organizes them similar to computers (DOS or OS/2) or
library cataloguing system. (Libraries do not just back a truck up and dump a load of
books into it, there has to be an organized filing system.) The basic categories are usually
the same between people but just like libraries, one might have 5 books in a category but
another might have 500 (in depth knowledge on a subject). Global communication
(books, television, magazines, internet) have allowed the free flow of new concepts to
millions of people almost instantly. It is surprising how standardized the consumer’s file
directories are becoming. The mind’s librarian checks each new book (concept) against
it’s current file directory to see if it is needed. If the mind already has it, there is no need
to buy the book (concept). Al Ries & Jack Trout have discovered the File Operating
System which are the rules the mind uses for filing concepts. You must learn these rules
before you try and file your concept in the consumers mind. (see The 22 Immutable Laws
of Marketing, Violate Them at Your Own Risk.)
Already Taken File Folders (concepts): The Competition.
If a competitor has already attached itself to the concepts file label, there is not much
choice but to search for another concept to claim. It is surprising how fast the best
attributes in a new category are taken. The easiest way to capture a good concept is to be
first into the mind and then defend it with constant reinforcement.
Finding or Creating a Vacant File Folder (concept): Positioning Strategy.

Once a map of the terrain and where the position of the competition is plotted, it is easy
to spot a vacant file folder (concept). The rank of the concept will determine if you want
to take it. What do you do when all the good file folders (concepts) are taken in a
category? Split the category into a new sub-category and be first to claim the best file
(concept). There are other ways but you must refer to The 22 Immutable Laws of
Marketing, Violate Them at Your Own Risk.
Labeling Your File Folder (concept): Brand Name.
Registering your brand in the mind’s directory is critical, not only for finding it but
classifying it. (Imagine not registering your website with Yahoo). The best way to name
your file is with a distinctive name and then the category name. (i.e. Crest Toothpaste)
You can even state the positioning attribute (benefit) in either the actual name or a sub-
heading (slogan). (i.e. name: Ultra White Toothpaste or slogan: "Look mom, no
cavities!") The shorter and simpler, the better. Eventually, the category name but not the
meaning will be dropped by consumers. It saves time. (i.e. Crest)
Filling Your File Folder (concept): Brand Building.
This is where traditional brand building takes over. Supporting attributes using visible
symbols are used in advertising campaigns to build the main positioning concept. (i.e.
attributes = fresh breath, visible symbol = young couples kissing.) You do not chase the
latest fads but focus on building important components of the brand identity. This gets
into Focus Theory which is an entirely different subject than Positioning Theory which I
am not going to get into at this time.
Positioning Theory
Positioning Theory is a new discipline-based school of thought about the strategic

marketing process. It is the study of the governing laws, principles, strategies and models
of how the consumer’s mind systematically sorts, ranks and files concepts in the mind’s
directory relative to the competition. The mind does not file concepts at random but is
very selective. Positioning Theory deals mainly with how the mind stores information
and not with what it stores. This difference is similar to working with a computer’s
operating system vs. data files. Positioning Theory is not to be confused with a “product
centered” sustainable competitive advantage or unique selling proposition. It mainly
focuses on the most critical point in time, the purchase decision. This makes strategic
marketing first and foremost a battle of concepts. Similar to chess, there are rules to the
positioning game.
Competition

Competition has exploded in the 1990s due to globalization, free trade, technology,
private label brands, internet, global standards, knowledge transfer, alternative media and
alternative distribution channels. Fierce competition drives shorter product lifecycles,
dropping prices, wide selection, fragmentation, increased quality and razor thin profit
margins. It has been great for the customer but bad for manufactures that cannot adjust. A
new era of hyper-competition has made traditional marketing definitions out of date.
Nearly every current textbook definition of marketing states a relationship between the
company and the customer but fails to take into account the competition.
“The following definitions were approved by the American Marketing

Association Board of Directors. The definition of marketing first appeared in
Marketing News, March 1, 1985. Both definitions are included in the Dictionary
of Marketing Terms, 2d edition, edited by Peter D. Bennett, published by the
American Marketing Association, c1995.”
“Definition of Marketing - Marketing is the process of planning and executing
the conception, pricing, promotion, and distribution of ideas, goods, and services
to create exchanges that satisfy individual and organizational goals.”i [i]
New Era
Positioning and differentiation is now the key to succeeding in this new era of super
competitiveness. Back in “the good old days”, the 1950s, manufacturers ruled. Only 65%
of new product launches failed. Today 90% of new product launches fail and can result in
a net loss of up to $25 millionii [ii] . Today, everyone can manufacture but few companies
can properly market a product and even fewer properly position a product. Production is
up, prices are down, distribution channels are full and the media is a jammed fragmented
noise. It is the “age of sameness”iii [iii] .
1. Company Era (Pre 1970) = Manufacture it and they will come.
2. Customer Era (1970 – 1990) = Mass Advertising & Marketing Mix (4Ps).
3. Competition Era (Post 1990) = Strategic Positioning & Differentiation.
Today’s marketplace is increasingly more dynamic as a result of demographic shifts,
economic forces, politics and changing technology. Standing still is just as deadly as
making the wrong strategic move. CEOs paint rosy pictures for shareholders about how
innovative and cutting edge their firms are but in reality most companies are really
fighting to just stay alive. Older companies milk brand equity through line-extension,
while innovative companies drive the new economy with new concepts. There seems to
be no limit to consumer choice, but customers still make one simple request, “Just give
me one really good reason to choose your product over the competition.”
Hyper-competition has forced corporations to become more strategic in their thinking,

making the traditional relationship company - customer models out of date. Today’s
consumers are bombarded with choice - 25,181 new products in 1998; supermarkets with
40,000 SKUs; 150 TV channelsiv [iv] ; 1,000+ ads viewed per day. How do you break
though the clutter?
Positioning Strategies
To position a brand requires that you make choices. Having a position means that the
brand will appeal to some people and not others. A brand can be positioned in several
ways: offering a specific benefit, targeting a specific segment, price, or distribution.
Benefit positioning can be used if the brand perceivably differs in its ability to deliver a
specific benefit. The power of a benefit position will depend on how many people care
about the benefit and how different the brand is in delivering it.
Target positioning requires that all a brand’s marketing be focussed on a specific

segment. The target may be defined demographically, economically, geographically,
ethnically or attitudinally. To work, a target position should cause the people in the target
to perceive the brand as superior in meeting their particular needs.
Price positioning puts the brand either at the top or bottom of the category. By being the
most or least expensive brand in the category the brand takes on a specific identity.
Obviously the size of the customer franchise, brand image and profit margins will be
affected by this strategy. It is difficult to defend a price position.
Positioning by distribution is an often overlooked, but effective strategy. Placing a brand

in a channel that is not used by competitors can effectively differentiate it and establish a
unique identity. Being the first product of its kind sold in a channel of distribution can
cause people to perceive it differently.
The importance of a strong brand position is not to be underestimated. It can last for
years, even, as in the case of Ivory, for over a century. It may sound like heresy but I
believe that neither innovation or quality are, by themselves, sufficient to guarantee that a
brand will achieve all that it is capable of in the market place. What makes a position
right is difficult to define. Bob Cox, chairman of the Cox group and creator of the long
lasting, “ We make it simple” campaign that helped position Honda, says that positioning
occurs when a “truth in the product” is connected to a “need of the consumer” by
compelling communications. Every product has certain “truths” about it. Not every
product has unique truths or truths that are very different from competition.

To position a brand requires that you make choices. Having a position means that the
brand will appeal to some people and not others. A brand can be positioned in several
ways: offering a specific benefit, targeting a specific segment, price, or distribution.
Benefit positioning can be used if the brand perceivably differs in its ability to deliver a
specific benefit. The power of a benefit position will depend on how many people care
about the benefit and how different the brand is in delivering it.
Target positioning requires that all a brand’s marketing be focussed on a specific

segment. The target may be defined demographically, economically, geographically,
ethnically or attitudinally. To work, a target position should cause the people in the target
to perceive the brand as superior in meeting their particular needs.
Price positioning puts the brand either at the top or bottom of the category. By being the
most or least expensive brand in the category the brand takes on a specific identity.
Obviously the size of the customer franchise, brand image and profit margins will be
affected by this strategy. It is difficult to defend a price position.
Positioning by distribution is an often overlooked, but effective strategy. Placing a brand

in a channel that is not used by competitors can effectively differentiate it and establish a
unique identity. Being the first product of its kind sold in a channel of distribution can
cause people to perceive it differently.
The importance of a strong brand position is not to be underestimated. It can last for
years, even, as in the case of Ivory, for over a century. It may sound like heresy but I
believe that neither innovation or quality are, by themselves, sufficient to guarantee that a
brand will achieve all that it is capable of in the market place. What makes a position
right is difficult to define. Bob Cox, chairman of the Cox group and creator of the long
lasting, “ We make it simple” campaign that helped position Honda, says that positioning
occurs when a “truth in the product” is connected to a “need of the consumer” by
compelling communications. Every product has certain “truths” about it. Not every
product has unique truths or truths that are very different from competition.
There are seven qualities that help to make a successful position:
1. Relevance
Positions that do not focus on benefits that are important to people or reflect the character
of the product will fail. Often in their search for differentiation, marketers seize upon
some attribute in their product which is different but in reality is of little concern to
customers. This is a waste of time and money. The lonely Maytag repairman, who
symbolizes reliability, is an example of a powerful position based on the quality built into
the appliances.
2. Clarity
A position should be easy to communicate and quick to comprehend. Difficulty in either

suggest that a position is to fuzzy to be of value to the brand. “We try harder because we
are #2” established Avis as a major league competitor quickly and simply.
3. Distinctiveness
People have few needs that are unfulfilled, and they have many choices to fill the needs
they have. If a brand’s position lacks distinctiveness it will be forced to compete on the
bases of price or promotion; expensive strategies that will not build brand equity in the
long term.
4. Coherence
Speak with one voice through all the elements of the marketing mix if you wish to create
a strong position. If, for example, a brand that is positioned as premium quality and price
appears in an end-aisle “sale” display, its quality image will suffer. The shipping cartons,
freight pallets, envelope franking, packaging, advertising, promotions, shelf displays etc.
should all reflect and translate the brand’s position into the appropriate form for the
media.
5. Commitment
Often people will get nervous when a strong position threatens to ignore or even alienate
some segment of the population as a price of clearly communicating to the desired target.
Once a position is adopted, it takes commitment to see it through, in the face of criticism
and pot shots.
6. Patience
Crest has dominated its market for over thirty years. When it was first introduced
positioned as a cavity fighter its share never rose above 13% for three years. The ADA
approval was the key to launching the brand to over 40% of the market. Had P&G lost

patience after two or three years, someone else would be enjoying the profits of this
powerful brand position.
7. Courage
It goes without saying that adopting a strong brand position requires bravery. It is much
easier to defend an appeal to everyone with a rather generic sales pitch. You must believe
that the position makes strategic sense for the brand and then stick to your guns.

i
ii
iii
iv

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Brand Management Notes by Bilal Mustafa Khan

Brands: The important distinction is between a product and a brand. A product is

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Branding today is used to create emotional attachment to products and companies.

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

A brief history of branding

Indeed, branding—the use of symbols to concisely convey information about a product or

For customers, branding plays two important roles:

For customers, branding plays two important roles:

The Job of Positioning

• Is intrusive, it cuts through the clutter.

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

What makes up a brand identity?

The Brand Benefit Hierarchy

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Brand Essence: Signing Up for Something Bigger

BRANDS AND ADDED VALUES

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

desirable, although distinctiveness based so much on discriminators that it neglects

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Evidence points out that the functional superiority of a potentially successful

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

BRAND ASSOCIATIONS - A brand association is anything mentally linked to the

This safety-pin print ad for Volvo,

Importance to marketers and consumers.

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

unjustified extravagance. If there is a strong brand personality to which consumers are

THE BRAND IMAGE TRAP

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

THE BRAND POSITION TRAP

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

"a deeply held commitment to rebuy or repatronize a preferred product/service

Implications for Brand Management:

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Repeat Patronage: High

Categorizing Loyalty Types

No loyalty: Consumers falling in this category have a low attitude towards a

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

customer’s vulnerability. Loyalty/marketing plans may then be developed aimed at

Customers of this brand who are

Customers of this brand who Unlikely target

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Why Brand Personality?

Values and characteristics of brand personality:

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

LEVERAGING BRAND EQUITY: BRAND EXTENSIONS

Why Brand Extensions:

Introduction of a new product with an established brand name can dramatically

Focused like IBM concentrating on personal computers and accessories or

Benefits of Brand Extensions

Bilal Mustafa Khan© 2010. Department of Business Administration. Only for

Core brand associations are conveyed to extensions

Brand Extension Dilemmas:

Brand extensions can be accomplished in a variety of ways. One of the most

Extend a current brand name to a new product

Type of product extended

Vertical extension direction

Potential benefits of downscaling

Prestige may be tarnished

Upscale extensions enhance prestige