Chapter 1 Introduction to Branding

Contents
Concept of branding Significance of branding How branding evolved Need to build strong brands Key issues in branding

The status dilemma

Neha is a working woman, and she needs a lunch box to carry to office. She remembers her father leaving for work every morning clutching his colourless stainless steel lunch box. But Neha shudders to even visualize the look on her colleagues faces if she walks into office with such a lunch box. Neha has a number of options available in the market to choose from, but she needs bright trendy containers, which can keep the food fresh for longer periods of time.

Concept of branding
For the consumers, a brand is a product. But for the maker or the seller, a brand is an identifier of its goods and services and a promise of consistently delivering the features/benefits that the consumers desire from the brand.

Brand to the rescue

Neha found exactly what she was looking for when her friend Meena brought her lunch box to office one day. Meena told her about Tupperwarea global brand, recognized the world over. Tupperware products were excellently designed and had won prestigious awards like the Red Dot award in 2009 (an award for excellence in product design instituted by Design Zentrum Nordrhein Westfalen in Essen, Germany), and the company was also featured in Forbes.com Platinum 400 Americas Best Big Companies List for the sixth time in a row in 2009. Tupperware had a range of high quality, lightweight, rust- and break-proof, colourful, airtight, stylish containers, which kept food fresh for longer, thus avoiding waste (Superbrands 2009). They were leak-proof as well, which meant that Neha could carry and store curry and gravy items.

Significance of Branding
Branding is one of the key issues and biggest challenges in corporate and marketing strategies. A product that is not branded is a commodity, such as sugar, rice, etc., and while purchasing a commodity, one only considers its physical attributes and benefits. A brand, on the other hand, is a lens through which the consumers view the product and the firm. It is basically a product with added dimensions, which make it different in some way or the other from other products that satisfy the same needs

Brand defined
According to the American Marketing Association, Brand is defined as: a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from competitors

Historical perspective of branding

Studies show that brands and branding are not a recent phenomenon. In fact, branding has existed since ages and can be traced back to the time when human civilizations originated. Early language was developed to convey information about two things religion and business transactions. Business transactions (who is involved, what was transacted, and how much) were recorded using symbols. These symbols were pictorial in nature (also known as brand marks, logotypes, or icons) and were sometimes accompanied by some text and use of colour. These early brands can be called proto-brands and their elements, i.e., the use of a logo, text, and colour are important for brands even today (Moore and Reid 2008). Take for example the logo of Anchor Electricals, which includes a pictorial symbol, text, and red and white colour combination

Historical perspective of branding

Brand Characteristics Early Bronze IV (22502000 BCE) The Indus Valley Middle Bronze Age (20001500 BCE) Shang China Late Bronze Age (1500 1000 BCE) Cyprus The Iron Age revolution (1000500 BCE) Tyre The Iron Age (825336 BCE) Greece Moder n Times

Information logistics Information origin Information quality Image power Image value Image personality

The top 20 most trusted brands, 2010

Brand Nokia Phones Colgate Lux Rank (2010) Rank (2009) Brand Mobile 1 2 3 1 2 3 Close Up Goodnight Rin Rank (2010) 11 12 13 Rank (2009) 11 21 43

Dettol
Britannia Lifebuoy Clinic Plus Ponds Fair and Lovely Pepsodent

4
5 6 7 8 9 10

5
9 4 15 16 18 8

Tata Salt
Pepsi Maaza Vodafone Maggi Glucon D Thums Up

14
15 16 17 18 19 20

7
26 46 30 35 14 39

What can we brand?

A servicefor example, Life Insurance Corporation, State Bank of India A productfor example, Nokia mobile, Lux soap, Knorr soup A storefor example, Big Bazaar, Shoppers Stop A place/geographic locationfor example, Taj Mahal, India (the Incredible India! campaign) A personfor example, Aamir Khan, Amitabh Bachchan An ideafor example, World Wildlife Fund An online organizationfor example, Amazon, Make my Trip An organizationfor example, UNICEF

Difference between a Product and a Brand

BRAND
Symbols Brand personality Scope Functional benefits Organizational associations Attribute User imagery

Country of origin

PRODUCT
Product uses

Quality/value

Brand customer relationship

Emotional benefits

Self-expressive benefits

Rationale for Building a Brand

Benefits of Building Strong BrandsOrganizational Perspective Identifier Shorthand for information Legal protection Differential advantage Unique associations Price premiums Enhancing customer loyalty Higher market share Inelastic response to price increase As a barrier to entry of other brands Can be bought and sold as an asset

Rationale for Building a Brand

Benefits of Building Strong Brands Customer Perspective Source of identification Heuristic or proxy for quality Source of evaluation A tool to simplify decision making Risk reducer
Financial risk, performance risk, time risk, social risk, psychological risk

Tool to express self image

Types of Brands
Functional brands Image brands Experience brands

Branding challenges
Intelligent and educated customers Growth of private labels Brand proliferation Increasing trade power Media fragmentation and the rise of new media Increasing cost of product introduction and support Increasing job turnover

Overcoming branding challenges

Brand equity Brand loyalty
Brand switchers Habitual buyers Switching-cost loyal Friends of the brand Committed customers

Historical perspective of branding

Level 5 Take pride in using the brand Friends of the brand Recommend brand others Emotional attachment withto the brand

Committed customer/consumer

Level 4

Level 3

Truly like the brand and consider it as a friend Switching-cost loyal Satisfied with the brand and have a switching cost Competitors need to overcome switching cost Habitual buyers Satisfied buyers, absence of any dissatisfaction Vulnerable to competitors stimulations

Level 2

Level 1

Brand switchers Indifferent to the brand name Buying decision based on price, availability etc and Brand name does not play a significant role in the purchase decisions

Key issues in branding

Whether to brand or not How to build brand equity How to measure brand equity Understanding customers and how they purchase a brand How to position the brand Which marketing mix strategies to choose How to design branding strategies How to manage brands over time How to manage brands across geographical boundaries

Quick Recapitulation
Concept of branding Significance of branding How branding evolved Need to build strong brands Key issues in branding

Questions?