A product is something that is made in a factory; a brand is something that is bought by a customer

Stephen King

A mental expression of an experience offered by a product / service

The experience is colored by our environment, values, beliefs and needs

WHY IS BRANDING IMPORTANT?

Brand Equity

Brand equity has just as much effect on stock price as do earnings.

Brand Equity
Brand equity is the added value that endowed to products and services. This value may be reflected in how consumers think, feel, and act with respect to the brand, as well as the prices, market share and profitability that the brand commands for the firm. Brand equity is an important intangible asset that has psychological and financial value to the firm.

Brand Equity/Raj Mohan And Ranjith

Brand equity

Brand Equity/Raj Mohan And Ranjith

Tangible attributes Product Packaging Labeling Attributes Functional benefits

Intangible attributes Quality Emotional benefits Values Culture Image

Identify existing perception

Determined desired perception

Determine gap

Formulate strategy

Evaluate

Ability to identify a brand under different conditions

Brand Recognition Correctly recognize the brand Brand Recall Ability to retrieve the brand from memory when the product category is mentioned/ thought of

BRAND RELATIONSHIP

EXPERIENCE EXPECTATIONS EMOTIONAL SENSORY PHYSICAL

Attributes

Descriptive features that characterize a product service What we think the product / service is or has and what is involved in its purchase and use Product related - performance, service, product class Non-product related - price, packaging, user imagery, intangible imagery

Benefits

Values attached to product attributes. What we think the product can do for us Functional Experiential Symbolic

Perceived quality is a combination of the associated attributes and benefits that are salient for the brand Overall impression of the brand / value judgment based on the cumulative effect of various brand associations in our mind

Image of the provider of the product / service and brand

Functional / Hard attributes like size, technology, process and financial strength Non-functional / Soft attributes like history, leadership. Psychographic - lifestyle, personality, traditional, modern, sophisticated Demographic - Age, income, education

Image of the user

Managing the expectation of experience by : - Building on those experiences which add value - Eliminating those experiences which are negative Keeping the brand experience relevant to changing consumer lifestyles and expectations, technology and competition.

Little image or product differentiation between Starbucks and smaller coffee chains according to specialty coffeehouse customers. The brands image was not viewed at the companys expectations of their values. 61% of respondents agreed that Starbucks cares primarily about money 55% of respondents agreed that Starbucks cares primarily about building more stores.

Top 5 Attributes Consumers Associate with the Starbucks Brand

(Percentage strongly agree)

59% - Known for specialty/gourmet coffee 42% - Corporate 41% - Trendy 39% - Always feel welcome at Starbucks 30% - Widely available

Transcend physical attributes and distinct features Build relationships with the consumer Capture consumer aspirations and fulfill expectations which in turn creates a bond Belong to the consumer

How do firms use corporate social responsibility to build brand equity? The case of Starbucks.

Corporate Social Responsibility

Corporate Social Responsibility creates a landing place in the minds of the target consumers. It not only caters to the Brand Equity awareness among the consumers but also leads to a positive Brand Image in the minds of the potential consumers.

For brands, it is an excellent way to show they care, taking the lead with innovative giving back schemes.

Teamed up with UNICEF to introduce Nutristar - a powdered drinking product that addressed micronutrient malnutrition in some populations

Acquiring the PuR brand to bring low-cost water purification technologies to consumers in developing markets. The company also promoted better hygiene in at-risk communities and in return had the benefit of forming new markets for its products like soap and toothpastes

Mr.Sunil Mittal, chairman and managing director of Bharti Enterprises, runs the country's largest affirmative action project imparting quality education to 30,000 underprivileged children in rural India across five states.

With its new campaign, which sets the tagline, What an idea in the landscape of rural India

Jaago re (wake up).

In this case, the advertising leads us to a website which actually allows people to register on-line as voters.

STARBUCKS CASE
The Company focuses on the quality of coffee bean and also enhancing farmers life who grow the coffee bean. Coffee market Highly price sensitive hence it affects coffee farmers

Starbucks helps them to buy coffee

Starbucks has paid premium price to help farmers to make more profit and support their families. Starbucks has created a policy that they call

C.A.F.E (Coffee and Farmer Equity)

Starbucks provides funds for farmers to access credit, purchasing conservation and certified coffee that includes organic and Fair Trade Certified and also investing in social development project in coffee producing countries. Starbucks has collaborated with coffee producers in Costa Rica that it offers farmers with training about the high quality coffee and technical support.

Ethical Branding
Ethical branding, as a subset of ethical marketing, relates to certain moral principles that define right and wrong behavior in branding decisions. An ethical brand should not harm public good; instead it should contribute to or help promote public good. A popular or successful brand may not be ethical.

On the other hand, ethical branding cannot guarantee a firm the success in the marketplace.
Consumers generally do have ethical concerns but such concerns do not necessarily become manifest in their actual purchasing behaviour.

Case of NIKE
Incidents: Refusal to compensate its workers with fair wages. Continual use of unsanitary and unsafe conditions in its factories. Child labour. Violation of overtime laws.

1990s

Disturbing stories about Nike factories in countries like Vietnam, China and Indonesia.

1997

In 1997, workers from Indonesian factories went on strike because of low and unpaid wages as well as violation of overtime laws.

1998

Chinese workers protest about low wages and dangerous working conditions Indonesian workers earn $2.46 a day, Vietnamese workers earn $1.60 while Chinese workers earn $1.75 a day.In Vietnam, 1300 workers protest for a raise of one cent per hour.

Social Impact
Jobs were taken overseas that could be in America which led to controversies and problems for Nike. It is morally unethical to sell shoes worth $150 when the person who made your shoes was only paid a dollar. Consequences Many people and organizations criticized Nike. Campaigns have been taken up by many including colleges and universities against Nike. Some people are discouraged and started boycotting Nike products because of its bad publicity. A 27% drop in their stock price and slower sales growth.

There are four distinct types of innovationsproduct optimization, brand extension, target ownership, category leadership: Product optimizationwhich seeks to optimize a product's or service's usage Brand extension which stretches a brand's equity into adjacent spaces Target ownership to own a greater share of a specific target's wallet across multiple segments, whether the segment is attitudinal, psychographic, or demographic Category leadership to sustain or achieve leadership by reshaping consumer attitudes and behaviors in a given segment or industry

Product optimization and brand extension, referred as "sustained innovations," usually build off an extant frame of reference. Therefore, although safer, they are likely to generate only limited incremental value.
Target ownership and category leadership, referred to as "disruptive innovations," can yield much larger growth, but they are also more capital-intensive and more unpredictable. Indeed, because they have the power to shift the paradigm, they can set new standards and change consumer behaviors, but they require significant amounts of time and money.

The companys approach doing what others dont has paid off, in the form of great products that people covet.
Sony has demonstrated an ability to capture the imagination and enhance peoples lives Sony innovations have become part of mainstream culture

first magnetic tape and tape recorder 1950

transistor radio

1955

worlds first all-transistor TV set

1960

worlds first color video cassette recorder

1971

Walkman personal stereo

1979

Compact Disc (CD)

1982

first 8mm camcorder

1985

MiniDisc (MD) player

1992

Today, Sony continues to fuel industry growth with the sales of innovative Sony products, as well as with the companys convergence strategy. Examples include: VAIO notebooks that raise the bar in both form and function; digital cameras that capture pictures on a floppy disk, CD-R or Memory Stick; a handheld device that lets you store and view photos as well as moving photo; MiniDisc recorders with a digital PC Link to marry high quality digital audio with downloadable music; DVD/CD multi-disc changers that playback both audio and video; digital network recorders that pause, rewind and fast-forward "live" television using a hard-disc drive; and Hi-Scan flat screen TVs that deliver near HDTV picture quality through Digital Reality Creation (DRC) circuitry.