Brands and Brand Management

Lecture Note
Ch 1 … WHAT IS A BRAND?
According to 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.”

• Brand Elements
o different components of a brand that identify and differentiate it are brand elements

• Brand vs Product
o A product is anything we can offer to a market for attention, acquisition, use, or consumption that might
satisfy a need or want.
o Five levels of a product:
▪ The core benefit level is the fundamental need or want that consumers satisfy by consuming the
product or service.
▪ The generic product level is a basic version of the product containing only those attributes or
characteristics absolutely necessary for its functioning but with no distinguishing features. This is
basically a stripped-down, no-frills version of the product that adequately performs the product
function.
▪ The expected product level is a set of attributes or characteristics that buyers normally expect
and agree to when they purchase a product.
▪ The augmented product level includes additional product attributes, benefits, or related services
that distinguish the product from competitors.
▪ The potential product level includes all the augmentations and transformations that a product
might ultimately undergo in the future.
• Why do brands matter?
For Consumers
▪ identify the source or maker of a product and allow consumers to assign responsibility to a
particular manufacturer or distributor
▪ Because of past experiences with the product consumers find out which brands satisfy their
needs and or means of simplification for their product decisions
▪ to lower the search costs for products both internally (in terms of how much they have to
think) and externally (in terms of how much they have to look around)
▪ Based on what they already know consumers can make assumptions and form reasonable
expectations about what they may not know
▪ think of the relationship between a brand and the consumer as a type of bond or pact
▪ can serve as symbolic devices allowing consumers to project their self-image (Consuming
such products is a means by which consumers can communicate to others-or even to
themselves-the type of person they are or would like to be)

o 3 major categories of products:

1. search goods like grocery produce, consumers can evaluate product attributes by visual
inspection
2. experience goods like automobile tires, consumers cannot assess by inspection, and actual
product trial and experience is necessary
3. credence goods like insurance coverage, consumers may rarely learn product attributes

o Brands can reduce the risks in product decisions:

▪ Functional risk: The product does not perform up to expectations.
▪ Physical risk: The product poses a threat to the physical well-being or health of the user or
others.
▪ Financial risk: The product is not worth the price paid.
▪ Social risk: The product results in embarrassment from others.
▪ Psychological risk: The product affects the mental well-being of the user.
▪ Time risk: The failure of the product results in an opportunity cost of finding another
satisfactory product.

For Firms
▪ Fundamentally, they serve an identification purpose, to simplify product handling or
tracing.
▪ offers the firm legal protection for unique features or aspects of the product.
 ▪ brand loyalty provides predictability and security of demand for the firm and creates
barriers of entry that make it difficult for other firms to enter the market
▪ branding can be seen as a powerful means to secure a competitive advantage (such as
Colgate toothpaste, Cheerios cereal, and Levi's jeans have is that consumers have literally
grown up with them)
o Can Anything be branded?
• Physical Goods
• Services
• Business-to-Business Products
• High-tech Products
▪ a brand is something that resides in the minds of consumers
▪ marketers must give consumers a label for the product and provide meaning for the brand
▪ The key to branding is that consumers perceive differences among brands in a product
category
▪ Accordingly, marketers can benefit from branding whenever consumers are in a choice
situation

• Brand Equity
o Branding is all about creating differences. Most marketing observers also agree with the following
basic principles of branding and brand equity:
▪ Differences in outcomes arise from the "added value" endowed to a product as a result
of past marketing activity for the brand.
▪ This value can be created for a brand in many different ways.
▪ Brand equity provides a common denominator for interpreting marketing strategies and
assessing the value of a brand.
▪ There are many different ways in which the value of a brand can be manifested or exploited
to benefit the firm (in terms of greater proceeds or lower costs or both).

o Strategic brand management process

Strategic brand management involves the design and implementation of marketing programs and
activities to build, measure, and manage brand equity.

▪ Strategic brand management process as having four main steps:

1. Identifying and developing brand plans
2. Designing and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity
1. Identifying and developing brand plans - The strategic brand management process
starts with a clear understanding of what the brand is to represent and how it should
be positioned with respect to competitors
▪ The brand positioning model describes how to guide integrated marketing to
maximize competitive advantages.
▪ The brand resonance model describes how to create intense, activity loyalty
relationships with customers.
▪ The brand value chain is a means to trace the value creation process for
brands, to better understand the financial impact of brand marketing
expenditures and investments

2. Designing and Implementing Brand Marketing Programs - building brand equity

requires properly positioning the brand in the minds of customers and achieving as
much brand resonance as possible
▪ Choosing Brand Elements - The most common brand elements are brand
names, URLs, logos, symbols, characters, packaging, and slogans.
▪ Integrating the Brand into Marketing Activities and the Supporting Marketing
Program - Although the judicious choice of brand elements can make some
contribution to building brand equity, the biggest contribution comes from
marketing activities related to the brand. This text highlights only some
particularly important marketing program considerations for building brand
equity.
▪ leveraging Secondary Associations - The third and final way to build brand
equity is to leverage secondary associations. Brand associations may themselves
be linked to other entities that have their own associations, creating these
secondary associations. For example, the brand may be linked to certain
source factors, such as the company (through branding strategies), countries
or other geographical regions (through identification of product origin), and
channels of distribution (through channel strategy), as well as to other brands
(through ingredients or co-branding), characters (through licensing),
spokespeople (through endorsements), sporting or cultural events (through
sponsorship), or some other third-party sources (through awards or reviews).

3. Measuring and Interpreting Brand Performance - successfully design and implement a

brand equity measurement system. A brand equity measurement system is a set of
research procedures designed to provide timely, accurate, and actionable information
for marketers so that they can make the best possible tactical decisions in the short
run and the best strategic decisions in the long run. A system involves three key steps:
▪ brand audits - a comprehensive examination of a brand to assess its health,
uncover its sources of equity, and suggest ways to improve and leverage that
equity
▪ brand tracking - collect information from consumers on a routine basis over
time, typically through quantitative measures of brand performance on a
number of key dimensions marketers can identify in the brand audit or other
means
▪ brand equity management system - a set of organizational processes designed
to improve the understanding and use of the brand equity concept within a
firm

4. Growing and sustaining brand equity - Maintaining and expanding on brand equity
can be quite challenging. Brand equity management activities take a broader and more
diverse perspective of the brand's equity-understanding how branding strategies
should reflect corporate concerns and be adjusted, if at all, over time or over
geographical boundaries or multiple market segments.
▪ Defining Brand Architecture. The firm's brand architecture provides general
guidelines about its branding strategy and which brand elements to apply
across all the different products sold by the firm
▪ Managing Brand Equity over Time. Effective brand management also
requires taking a long-term view of marketing decisions. A long-term
perspective of brand management recognizes that any changes in the
supporting marketing program for a brand may, by changing consumer
knowledge, affect the success of future marketing programs
▪ Managing Brand Equity over Geographic Boundaries, Cultures, and Market
Segments. Another important consideration in managing brand equity is
recognizing and accounting for different types of consumers in developing
branding and marketing programs. International factors and global branding
strategies are particularly important in these decisions.
CH 2 – Customer-based Brand Equity and Brand Positioning
• Defining Customer-Based Brand Equity - We formally define customer-based brand equity as the
differential effect that brand knowledge has on consumer response to the marketing of that
brand. Let's look at the three key ingredients to this definition:
(1) "differential effect,"
(2) "brand knowledge," and
(3) "consumer response to marketing."

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