1a Branding An Overview (Parekh Sir)

Brand Management
Branding: An Overview
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Prof. Vikram Parekh on Brand Management @ 2009
What is a Brand? Brand assets, strength and value How brand create value for the customer How brand create value for the company Corporate brand
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What is a brand?
For the American Marketing Association (AMA), a brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. These different components of a brand that identify and differentiate it are brand elements. Many practicing managers refer to a brand as more than that as something that has actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace.
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What is a Brand?
A brand is a set of MENTAL ASSOCIATIONS, held by the consumer, which add to the perceived value of a product or service. These associations should be UNIQUE (exclusivity), STRONG (saliency) and POSITIVE (desirable)
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What is a Brand?
Brands are intangible assets Brands are conditional assets Without benefits there is NO brand value
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What is a Brand?
LEGAL PERSPECTIVE A sign or set of signs certifying the origin of a product or service and differentiating it from the competition
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Kotlers 5 levels to a Product
Potential Product
Augmented Product
Expected Product Generic Product CORE BENEFIT

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Potential Product
Augmented Product The Fundamental Need or Want that consumers satisfy by consuming the product or service
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Potential Product
Augmented Product
Basic Version of the product containing only those elements absolutely necessary to function. No distinguishing features.
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Potential Product
Augmented Product
Attributes and Characteristics that buyers normally expect and agree to when they purchase a product
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Potential Product
Augmented Product
Additional product attributes, benefits, or related services that distinguish the product from competitors
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Potential Product
Augmented Product
All the augmentations and transformations that a product might ultimately undergo in the future
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Delivery & Credit Installation After-Sale Service Warranty
All the augmentations and transformations that a product might ultimately undergo in the future Additional product attributes, benefits, or related services that distinguish the product from competitors Attributes and Characteristics that buyers normally expect and agree to when they purchase a product
Potential Product
Augmented Product
Brand Name Features Design Packaging Quality Level
Basic Version of the product containing only those elements absolutely necessary to function. No distinguishing features. The Fundamental Need or Want that consumers satisfy by consuming the product or service
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Relative Brand Distinction

The more distinctive or different a brand is in the consumers mind set, the stronger brand preference becomes. This is critical to keeping competition away from the consumers consideration.
Products (Commodities) No Difference Except Price Brand Name Well Known But Similar Strong Brand Brand Distinctive Perceived by the Consumer as Unique
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A brands preference is primarily built through differentiation and relevance Insulate product from competition OWN Something
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Kotlers Five Levels of A Product
Potential Product
Augmented Product
BRAND DISTINCTION by Timothy D. Ennis

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Kotlers Five Levels of A Product
Potential Product
Augmented Product
BRAND DISTINCTION by Timothy D. Ennis

OWN Something
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Product vs Brand
Product = Commodity
A product is a produced item always possessing these characteristics: Tangibility Attributes and Features
Brand = Mind Set

The sum of all communications and experiences received by the consumer and customer resulting in a distinctive image in their mind set based on perceived emotional and functional benefits.
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What is a Brand?
A brand is therefore more than a product, as it can have dimensions that differentiate it in some way from other products designed to satisfy the same need. Some brands create competitive advantages with product performance; other brands create competitive advantages through nonproduct-related means.
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Why do brands matter?

What functions do brands perform that make them so valuable to marketers?
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Meaning & Importance of Brand

Brands are a means of differentiating from competitors. Customers will pay price premium for a good brand it is not factories that make profits, but relationships with customers, and it is company and brand names which secure those relationships Businesses that invest in and sustain leading brands prosper
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Brand also is
The cherry is a brands promise. The ice cream represents all your products and services. The apples are the corporation itselfthe corporate environment. The crust is the structure of your companynot the building (although how it looks is part of branding) but your systems. So here is your delicious, multi-tiered, integrated apple pie. Of course the cherry gets attention. Its your name in neon lights, your fancy new logo, and your overall visual appeal. If a prospect
buys a slice of your pie just for the cherry then youve done well!
But integrating the ice cream (Product/Service), apples (Corporate Culture) and crust (Systems) are essential for building true core brand equity.
Source: www.brandidentityguru.com Prof. Vikram Parekh on Brand Management @ 2009
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Brand Assets, Strength & Value

From Awareness to Financial Value
Brand Assets
Brand Awareness Brand reputation
(attributes, benefits, competence, know-how etc.)
Brand Strength
Market share Market leadership Market penetration Share of requirements Growth rate Loyalty rate Price Premium
Brand Value
Net discounted cash flow attributable to the brand after paying the cost of capital invested to produce and run the business and the cost of marketing
Brand personality Brand deep values Brand imagery Brand preference or attachment Patents and rights
These are the sources of influence of the brand

This at a specific point in time is a result of the Brand Assets within a specific market & competitive environment
This is the ability of brands to deliver profits

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Importance of Brands to Consumers Identification of the source of the product Assignment of responsibility to product maker Risk reducer Search cost reducer Promise, bond, or pact with product maker Symbolic device Signal of quality
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Reducing the Risks in Product Decisions

Consumers may perceive many different types of risks in buying and consuming a product: Functional riskThe product does not perform up to expectations. Physical riskThe product poses a threat to the physical well-being or health of the user or others. Financial riskThe product is not worth the price paid. Social riskThe product results in embarrassment from others. Psychological riskThe product affects the mental wellbeing of the user. Time riskThe failure of the product results in an opportunity cost of finding another satisfactory product.
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How brands create value for the customer
Buyers do not look the brand (e.g. writing pad, rubber, markers or photocopy paper) Brands reduce perceived risk The perceived risk is greater if the unit price is higher or the repercussions of a bad choice are more severe. Consumers generally invest more time and effort in buying decisions for high involvement products
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How brands create value for the Company
Why do financial analysts prefer companies with strong brands? Because they are less risky By paying a high price for a company with brands the financial analyst is acquiring certain future cash flows
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Importance of Brands to Firms

To firms, brands represent enormously valuable pieces of legal property, capable of influencing consumer behavior, being bought and sold, and providing the security of sustained future revenues. Identification to simplify handling or tracing Legally protecting unique features Signal of quality level Endowing products with unique associations Source of competitive advantage Source of financial returns
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Can everything be branded?

Ultimately a brand is something that resides in the minds of consumers. The key to branding is that consumers perceive differences among brands in a product category. Even commodities can be branded:
Coffee (Maxwell House), bath soap (Ivory), flour (Gold Medal), beer (Budweiser), salt (Morton), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), chickens (Perdue), pineapples (Dole), and even water (Perrier)
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Corporate Brand
Product brands to Corporate Brand Example: After Procter & Gamble, Unilever is developing some kind of corporate visibility in Asia. Change of name from HLL to HUL Companies becoming Sensitive towards reputation
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Corporate Brand
Global reputation is based on six factors:
1. 2. 3. 4. 5. 6. Emotional appeal (trust, admiration & respect) Product & services (quality, innovativeness, VFM) Vision & leadership Workplace quality (well-managed, talent) Financial performance Social responsibility
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RECAP
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1a Branding An Overview (Parekh Sir)

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Brand Management

Kotlers 5 levels to a Product

Expected Product Generic Product CORE BENEFIT

Kotlers 5 levels to a Product

Expected Product Generic Product CORE BENEFIT

Kotlers 5 levels to a Product

Expected Product Generic Product CORE BENEFIT

Kotlers 5 levels to a Product

Expected Product Generic Product CORE BENEFIT

Kotlers 5 levels to a Product

Expected Product Generic Product CORE BENEFIT

Kotlers 5 levels to a Product

Expected Product Generic Product CORE BENEFIT

Kotlers 5 levels to a Product

Brand Name Features Design Packaging Quality Level

Expected Product Generic Product CORE BENEFIT

Relative Brand Distinction

Relative Brand Distinction

Relative Brand Distinction

BRAND DISTINCTION by Timothy D. Ennis

Expected Product Generic Product CORE BENEFIT

Relative Brand Distinction

BRAND DISTINCTION by Timothy D. Ennis

Expected Product Generic Product CORE BENEFIT

Brand = Mind Set

Why do brands matter?

Meaning & Importance of Brand

Source: www.brandidentityguru.com Prof. Vikram Parekh on Brand Management @ 2009

Brand Assets, Strength & Value

These are the sources of influence of the brand

This is the ability of brands to deliver profits

Reducing the Risks in Product Decisions

How brands create value for the customer

How brands create value for the Company

Importance of Brands to Firms

Can everything be branded?

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