PRODUCT & BRAND

MANAGEMENT
DR. SANJEEV ARORA
 DEFINITIONS
• Product: A product is anything that can be offered to
satisfy a need or a want (goods, services, ideas).
• Product Management: Planning or marketing of a
product at all stages of PLC.
• Brand: Name, term, sign, symbol, design, or a
combination intended to identify & differentiate.
• Brand Management: Shaping and managing
perceptions of brand.
 Structure of Product
• Core product: benefit & core advantage
• Actual product: quality, brand name, features,
style/design, packaging
• Augmented product: post-purchase services
and additional services (warranty)
 4 TYPES OF PRODUCTS IN PCs

• Core : basic PC
• Staples : CPU
• Specialties : on site training
• Convenience items : printers
 Product vs. Brand
• Brand identifies & differentiates a product
from competition.
• Is branding necessary?
• What is a DOB?
• Can you also go from brand to product?
• What is Genericide?
 WHAT IS A BRAND?

Name, term, sign, symbol, design, or a

combination intended to identify &
differentiate

What is a Brand Contract?

 When did it begin?
• What are the first known instances of
branding?
• How did branding evolve?
• Cite an example of:
Commodity →Product →Brand
• What are: heritage, cult, iconic, ritual &
belonging brands?
 6 levels of meaning
• MERCEDES

1. Attributes (Expensive)
2. Benefits (Durability)
3. Values (Prestige)
4. Culture (German)
5. Personality (Lion)
6. User (Top Exec.)
 Brand identity

• The sum of the brand expressed as a product,

organization, person and symbol. So legendary
brands would also be very good products (Mach III),
have exemplary organizational values (3M epitomizes
innovation), a distinct personality (Pepsi is
young/vibrant) and a heritage (Coke symbolizes the
American dream).
 Brand identity

1. What is the brand’s particular vision & aim?

2. What makes it different?
3. What need is the brand fulfilling?
4. What is its permanent nature?
5. What are its values?
6. What are the signs which make it recognizable?
 Identity & Image

• Image is on the receiver’s side, while identity is on

the sender’s side. Image refers to the way the target
groups decode the signals emanating from the brand.
The purpose of identity is to specify the brand’s
meaning & aim. In Brand Management, identity
precedes image; before projecting an image to the
public, you must know exactly what you want to
project.
 Brand Identity Prism

1. Physical qualities or “physique”, which is both the

brand’s backbone & its tangible added value. First
step in developing a brand is to define its physical
aspect. E.g. Coke bottle is a distinctive part of the
Coke brand. So is the dark liquid (no crystal Coke,
though there is a crystal Pepsi).
2. Personality, or character. The way it speaks of the
product shows what kind of person it would be if it
were human.
 Cont.

3. Culture, from which every product derives. It means

the set of values feeding the brand’s inspiration.
Product is concrete representation of this culture &
means of communication. Major brands are driven
by a culture & in turn convey this culture. In focusing
too heavily on personality, advertising has ignored
this vital facet. E.g. Mercedes embodies German
values, Coke stands for US & Sony for Japan.
 Cont.
Culture links brand to firm esp. when the 2 bear
the same name. Nestle is not a fun & enjoyable
food brand; it is considered austere & puritan,
because the degree of freedom of the brand is
often reduced by the corporate culture of which it
is the most visible outward sign. Brand culture is
vital in launching new alcohol brands, since one
has to implicitly reassure consumers (excitement- cum-
fear factor). Banks too need this.
 Cont.

4. Relationship, since brands are at the crux of

transactions/exchanges between people (esp. the
service sector). Nike bears a Greek name that relates
it to specific cultural values like the Olympic Games.
IBM symbolizes orderliness & Apple friendliness. The
relationship aspect is crucial for banks etc.
 Cont.

5. Reflection, because its communication & most

striking products build up over time. So brand will
always tend to build a reflection or an image of the
buyer or user which it seems to be addressing.
6. Finally, brand speaks to our self-image. Through our
attitude towards certain brands, we develop a certain
inner relationship with ourselves. Porsche – “try
racing against yourself.”
Kapferer’s Brand Identity Prism

Nike vs. Adidas

 Brand Identity Prism - Nike
Physical product Personality
Sports and Jordan, Woods
fitness

Relationship Culture
Sponsorship, American
Ethics Just do It!

Reflection Self image

Aggressive, Cool
Provocative, ”Athlete”
In-your-face
 Brand Identity Prism - Adidas
Physical product Personality
Sports and Traditional, Conser-
fitness vative, Collective

Relation Culture
Quality and European
Heritage Traditional

Reflection Self-Image
True sportsmanship Relates more to
Strong work ethic competing than to
A good team player winning
 AMUL : Kapferer’s Prism

Physique : Personality :
Taste, Quality Simple, Indian

Relationship : AMUL Culture :

Sociable Co-operative, Sharing

Reflection : Self-Image :
Value Oriented Proud Indian, Fun loving
 Core vs. Extended Brand Identity

As suggested by Aaker, brand identity consists of a core identity (soul) and

an extended identity (e.g. brand personality). The former represents the
timeless essence of the brand. It’s central to both the meaning and success
of the brand, and contains the associations that are most likely to remain
constant as the brand encompasses new products and travels to new
markets. The extended identity, on the other hand, includes elements that
provide texture and completeness. It fills in the picture, adding details that
help portray what the brand stands for (e.g. Google’s core identity is
internet/search engine, what is its extended identity?)
 Building brand identity
• Name, Logo, Colors, Tagline, Symbol

*Example: Name: Sony

Logo: Nike
Colors: Coke
Tagline/Punchline: Nokia
Symbol/Mascot: Asian Paints
 Brand bonding

• Occurs when customers experience the company as

delivering on its benefit promise. Advertising alone
does not build brands, the brand experience does.
Advertising may create recognition, recall or even
preference, but ultimately the brand has to deliver.
 Branding Decisions

• Brand or not to brand?

• Most will brand, exception could be:

• Carrefours, the French hypermarket pioneer sells a

line of unbranded common products like spaghetti,
paper towels, canned peaches etc. @ 20-40% lower
prices.
 Brand Sponsor Decision

1. Manufacturer/National brand
(Kellogg/Benetton)
2. Distributor/Reseller brand
(Whirlpool – Sears Kenmore)
3. Licensed brand
(Hart, Schaffner & Marx sell clothes under the Pierre
Cardin & Christian Dior names)
Brand name decision

“What is in a name?”
 Power of brand names

• In deciding to call it Apple, the founders wanted to

emphasize the unconventional nature of the brand;
in refusing to idolize computer science, Apple was
completely overturning the human-machine
relationship. Machine was intended to become
something to enjoy, rather than revere or fear. The
brand name had in itself all the ingredients to
establish a new norm (which seems obvious now).
 Cont.

• “Nomen est omen”

A name is an omen. Examining a brand name thus

amounts to decoding this omen, i.e. the brand’s
program, its area of legitimacy & know-how; as well
as its scope of competence. Strong brand names give
words their own meaning e.g. Mercedes is a Spanish
Christian name, but now symbolizes German
efficiency.
 Strategies
• Individual names

HUL/P&G:
Both FMCG giants believe in naming brands
individually. In doing so they have created
“power” brands that have spawned several off
springs, thus dominating entire categories.
 Blanket family names

• Heinz
• GE
Separate family names for all products
• Sears – Kenmore (for appliances)
& Craftsman (for tools)
*Tata would be an Indian example
 Corporate name combined with individual
product names

• Kellogg

• Dabur
 Desirable qualities of a brand name
• Should suggest something about product benefit
(Friendly Wash)
• Should suggest product/service category
(Business Today)
• Should suggest “high imagery” (Mercedes)
 Desirable qualities of a brand name

• Should be easy to spell, pronounce, recognize &

remember (Tide)
• Should be distinctive (Kodak)
• Should not carry negative connotations (Nova/ car in
Spanish means “doesn’t go”)
 Choosing strong brand name

• To make a strong brand, any name can be used (or

almost any), provided there is consistent effort over
time to give it meaning.
• Brand name must be chosen with a view to the
brand’s future & destiny & not in relation to the
specific market & product situation at the time of its
birth. Think internationally too.
• Brand name should not describe what the product
does but reveal/suggest a difference.
 Product names

1. Lacoste strategy:
Brand transforms everything it embraces, turning an
article of everyday use into a product of distinction.
2. Mercedes strategy:
A, B, E class denote different models with the image
of Mercedes reflected in every model.
3. Nestle strategy:
Source brand naming.
 Cont.

4. Lancome strategy: Uses a suffix “ome” after every

brand name to establish the link between brand &
product.
5. Clarins strategy: Uses “multi” as a prefix to all its
products because it is part of the core identity of the
Clarins’ brand & not just an afterthought.
6. Dior strategy: Allows extension w/o destabilizing
heart of brand.
 Brand building tools

• Public relations & press releases

• Sponsorships
• Clubs
• Factory visits
• Trade shows
• Event marketing
 Brand building tools (Cont.)

• Public facilities
• Social cause marketing
• High value for the money
• Celebrity endorsement
• Telemarketing
 Brand characters/emblems

• Emblem is a brand’s capital equity. Emblem serves

to symbolize brand identity through a visual figure
other than brand name to:

1. Help identify & recognize brand

2. Guarantee the brand
3. Give brand durability
4. Help differentiate & personalize
 Examples:

• Mercedes insignia
• Renault’s diamond
• Nike’s dash
• Adidas’s 3 stripes
• Nestle’s nest
• Red grouse for Famous grouse whisky
• Lotus for India
 Brand Creator

• YSL designer wear

• Paloma Picasso’s perfumes
• Coco Chanel designer wear
• Shahnaz Hussein’s cosmetics
• Lacoste sportswear
• Pierre Cardin’s accessories
 Brand potential

• Not all the facets of brand identity are equally

patent. Some are TOM, while others are
latent, concealed in certain underlying signs of
the brand.
 Launching new brands

• If new brand does not convey its values from the very
start, it is unlikely to become a major brand.
• Choosing symbolic reference is as important as
deciding product reference.
• Successful launch requires that new brand be treated
as real brand from very start – not as mere product
name presented in advertising.
 Defining brand platform

• Brand identity is not the same for the company-

named brands, as for brands that have their own
name. Dupont, Philips, IBM are both company &
brand. But Tide is a P&G brand.
• For company-named brands, the brand becomes the
major spokesperson for company. So there must be a
relationship between brand & corporate identity.
That is why company-named brands have same
culture as company.
 Cont.

• The identity of strong brands is so strong that

companies often change their corporate name to
take on the name of their star brand (Sony was
earlier known as Tokyo Tsuhin Kogyo).

• Fena Ltd. was earlier called Syndet & Chemicals Ltd.

 Determining products typical of brand

• Not all products of a brand equally represent it. Only

those which truly epitomize the brand’s identity
should be used as support in a launch campaign.
Product features should also support the brand’s
ideology. Compaq is expected to have the latest
gizmos, Mercedes cannot look like Ambassador!
 Cont.

• For service brands, this task is tougher. So choose the

services which best exemplify the brand. The tone
communicated & the benefits conveyed should not
be chosen in isolation, but because they are the
strategic traits of the brand you are building.
 Brand Campaign or Product Campaign?

• Whenever a brand is created, there are 2 alternative

strategies – to communicate the brand’s meaning
either directly or by focusing on a particular product.
VW focused on Beetle, because it was an original
piece of work – totally different from the normal car
culture. Tata however focuses on the Tata corporate
brand name, because of the tremendous clout it
commands.
 Cont.

• 5 universal brand identity conditions:

1. Is it specific
2. Is it well-founded
3. Is it motivating
4. Does it capitalize on competitor weakness
5. Is it supported internally by all
 Brand Language

• Allows brands to freely express their ideology.

Serves as a means of decentralizing decisions. So it
should specify:
1. Dominant features of style
2. Audio-visual characteristics – e.g. a popular jingle
or piece of music (Maggi/Airtel)
3. Graphic layout & brand’s color codes
4. Principles determining how brand & its signature (if
any) can be used
 Role of a Product/Brand Manager
• Complete responsibility for product/brand
• Handles the Marketing Mix
• Works with all other departments esp. R&D,
Production, Sales etc. to achieve company
objectives/targets
• Reports to Marketing Head
 PLC Management
• Strategies used by management as a product
goes through PLC:
• a. Product has a limited life
• b. Product sales pass through distinct stages
• c. Profits rise & fall at different stages
• d. Products need different strategies for PLC
stages
 PLC stages
1. Market Introduction:
• Cost high
• Sales volume low
• No/little competition as competitors watch
• Demand needs to be created
• Customers have to be prompted to try product
 PLC stages
2. Growth:
• Costs reduced due to economies of scale
• Sales volume increases
• Profitability
• Public awareness
• Competition increases
• Max. market share is pricing objective
 PLC stages
3. Maturity:
• Costs are very low
• Sales peak
• Competition increases
• Prices drop
• Brand differentiation
• Industry profits drop
 PLC stages
4. Decline:
• Law of diminishing returns
• Sales decline/stabilize
• Prices/profits diminish
 PLC
• Concept has its limitations but is a useful planning
model. Micro entrants may come and go but macro
environment may continue e.g. some automobile
models may have exited, but the industry keeps
seeing new ones take their place!
 PRODUCT DIFFERENTIATION
• Source of competitive advantage.
• USP is now UCP
• Buyers should perceive a difference
• Difference should be valued
• Could be in quality, design, A & SP, time/location of
availability
• Successful differentiation leads to competition on
non price factors (the best a man can get!)
 PLC Management
• PLC has 5 phases:
1. Product development
2. Product introduction
3. Product growth
4. Product maturity
5. Product decline
 PLC Techniques
• Product Cannibalism:
Company decides to replace an existing product and
introduce a new one in its place regardless of the PLC
phase. Could be due to new technology & is most
common in high tech categories. Positive when
improved version replaces an existing product just as
the latter reaches its sales peak in market. But
sometimes new version is introduced just when
existing product has started growing. Works if the
timing is right!
 Negatives of Cannibalization
1. New product profit contribution is less than old one.
2. Economics of new product might not be favorable.
3. New product requires significant retooling.
4. New product has greater risks
 Product Development
• Documentation
• Research
• Making a prototype
• Filing a patent
 Product Development Strategy
• Time-to-Market
• Low Product Cost
• Low Development Cost
• Product Performance, Technology & Innovation
• Quality, Reliability, Robustness
• Service, Responsiveness & Flexibility
 Product Definition
• Well defined product strategy/plan
• Formal requirement
• Timely Marketing Requirement Specification (MRS)
• MRS & Product Engineering should work in tandem
• MRS should not be incomplete, ambiguous or overly
ambitious
• Constantly evolving specification that requires
increasing redesign
 Product Planning
1. Define an overall strategy
2. Define target markets & competitive strategy
3. Positioning strategy
4. Establish priorities
5. Scheduling
6. Resource estimation
 Marketing Strategies (PLC)

• Introduction stage:
1. The pioneer advantage
2. The competitive cycle –
• Sole supplier
• Competitive penetration
• Share stability
• Commodity competition
• Withdrawal of competition
 Marketing Strategies (PLC)

• Growth stage:

1. Improve product quality

2. Add new products
3. Enter new segments
4. Increase coverage
5. Lower price
 Marketing Strategies (PLC)

• Maturity stage:
Most products are in maturity stage!
1. Convert nonusers
2. Enter new segments
3. Win customers from competition
4. Modify product (quality/features)
5. Modify the 4 P’s (price cut, new outlets, sales
promo, services etc)
 Marketing Strategies (PLC)

• Decline stage:
1. Increase the firm’s investment
2. Maintain investment level
3. Decrease the investment
4. Harvesting (milking)
5. Divesting
 Marketing Strategies (PLC)

• Decline stage:
1. Increase the firm’s investment
2. Maintain investment level
3. Decrease the investment
4. Harvesting (milking)
5. Divesting
 New product development

• Idea generation – is the idea worth considering?

• Idea screening – is the product idea compatible with
company objectives, strategies & resources?
• Concept development & testing – can we find a good
concept for the product that consumers would try?
 New product development

• Conjoint Analysis:
A method for deriving utility values that consumers
attach to varying levels of a product’s attributes.
Respondents are shown various hypothetical offers
formed by combining varying levels of attributes &
are asked to rank them to identify most appealing
offer.
 New product development

• Marketing strategy development – can we find a

cost-effective, affordable marketing strategy?
• Business analysis – will this product meet our profit
goals?
• Product development – have we developed a
technically & commercially sound product?
 New product development

• Market testing – have product sales met

expectations?
• Commercialization – are product sales meeting
expectations?
 Market testing
• Sales wave research – consumers who initially try the
product at no cost are reoffered the product at
slightly reduced prices (3 to 5 times) to check their
level of satisfaction
• Simulated test marketing – 30-40 qualified shoppers
are found & questioned about brand familiarity &
preferences in a particular product category (to
check ad effectiveness)
 Market testing

• Controlled test marketing – allows company to test

impact of in-store factors & limited advertising on
buying behavior by putting products in test stores.
• Test markets – how many cities, which cities, length
of test, what info, what action?
PRODUCT MIX

P&G
 DETERGENTS
• IVORY SNOW
• DREFT
• TIDE
• CHEER
• OXYDOL
• DASH
• BOLD
• GAIN
• ERA
 TOOTHPASTE

• GLEEM

• CREST
 SOAP
• IVORY
• KIRK’S
• LAVA
• CAMAY
• ZEST
• SAFEGUARD
• COAST
• OIL OF OLAY
 DIAPERS

• PAMPERS

• LUVS
 PAPER TISSUE

• CHARMIN
• PUFFS
• BANNER
• SUMMIT
 WIDTH

• How many different product lines the company

carries

• in the case of P&G, we just saw 5 such lines. P&G

produces many more lines, in fact.
 LENGTH

• Refers to the total no. of items in the mix. In the P&G

case, there are 25 in all.

• Average length = total length/no. of lines.

• For P&G it is 5 (in this case)
 DEPTH

• How many variants are offered of each product in the

line.

• In the case of Crest (say):

• 2 flavors * 3 sizes
• = 6 SKUs
• So depth = 6
 CONSISTENCY

• How closely related the product lines are in end use,

production, distribution etc.

• For P&G, consistency is high, since it operates in the

FMCG segment.
 PRODUCT LINE DECISIONS

• Product line analysis

1. Sales & profits (80/20 rule)

2. Market profile (positioning)

 PRODUCT-LINE LENGTH

• Line stretching
1. Down-market stretch

• Introducing a lower priced line:

*Sony did it with Vega Trinitron, to take on LG golden

eye
 UPMARKET STRETCH

• Entering the high end of the market for more growth,

higher margins or simply to plug the full line

*E.g. Maruti
 2 WAY STRETCH

• Stretching the line in both directions

*E.g. Marriott
1. economy 2. comfort 3. luxury
 LINE FILLING
• Extending product line by adding more items within
present range - for incremental profits, to satisfy
dealers, to utilize extra capacity etc.

*E.g. ice creams (more flavors, same price)

 Brand strategy decision

• Line Extensions

Introducing additional items in the same product

category under the same brand name (Cadbury)
 Brand Extensions

• Company can use its existing brand name to launch

new products in other categories:

E.g. Nike
• Shoes
• Clothing
• Sports equipment
• Watches
 Multibrand

• Titan
1. Titan regular
2. Fast Track
3. Tanishq

* Cannibalization risk
 Packaging

• All activities of designing & producing the container

for a product. Many call it the 5th P, due to its
importance.

• Best example: Tetra Pak

 Labeling

• Identifies product or brand

• Describes product
• Promotes product

• Labels may become outdated & so need to be

freshened up once in a while.
 Product Differentiation
• Differences in quality, usually accompanied by
difference in price
• Differences in functional features or design
• Ignorance of buyers
• Sales promotion/advertising
• Differences in availability (time/location)
 Product Differentiation
• Objective is to develop a position that buyers
see as unique (USP)
• Successful differentiation moves the product
from competing primarily on price to
competing on non-price factors
• Mach 3 razors exemplify this type of product
quality leadership, commanding a huge
premium!
 Brand Differentiation
• POP & POD
1. POP – points of parity
e.g. Banks must all offer basic services

2. POD – points of difference

ICICI Bank offers extended timings
 Example
• “Cheetah bhi peeta hai”
This brand takes the energy platform
worldwide from US to India, but localizes the
strategy.
• Highlights the caffeine content in the US, to
differentiate itself to insomniac teens who
want to stay up all night!
Positioning
 What is positioning?

Positioning is the act of designing the company’s offer

so that it occupies a distinct & valued place in the
prospect’s mind. Positioning is not what you do to a
product. Positioning is what you do to the mind of
the prospect. You position the product in the mind of
the prospect.
 Types of positioning

Positioning can be of 3 broad types:

USP

Single consistent positioning message

Gillette
 Double benefit positioning

Volvo

1. Safest
2. Most durable

Volvo has always positioned itself on these two

attributes.
 Triple benefit positioning

Aquafresh

1. Anticavity protection
2. Better breath
3. Whiter teeth
 Some popular positioning platforms

• Lifebuoy – Tandurusti
• Surf – Jhagwala
• Promise – Laung tel
• Parachute – Purity
• Lux – Glamour
• Liril - Freshness
 Platforms---

• Fair & Lovely – Aspiration

• Tata – Reliability
• J&J – Caring
• Britannia - Health
 Other commonly used platforms

• Quality
• Safety
• Fun
• Lifestyle
• Convenience
 Major positioning errors

1. Underpositioning - Buyers have only a vague idea

of brand (Promise JFK)
2. Overpositioning - Buyers have too narrow a picture
of brand (Wall Street Journal)
3. Doubtful positioning - Buyers find brand claims
hard to believe (Saini)
 Getting their first

• First person on the moon?

Second person?
• Highest mountain peak?
Second highest?
• Who were the first in:
1. Computers?
2. Copiers?
3. Rent-a-car?
 Who were second?

Tough isn’t it?

Getting there second is not really getting there in

the true sense.

“Better to be a big fish in a small pond (& then

grow the size of the pond), than to be a small
fish in a big pond”
 What are the options for No. 2?

1. Strengthen your own current position - “We are

No. 2, we try harder” - Avis
2. Search for a new/unoccupied position - The
“uncola” - 7 UP
3. Deposition/Reposition competition - “Where’s
the beef?” - Wendy
 One more strategy

The “exclusive club”

If you are neither 1 nor 2,

• Big 3 – Automakers

• Big 8 – Accounting firms

 Positioning of a leader

“You cannot build a leadership position on your

own terms, you have to build it on the prospect’s
terms”
 Strategies of Leaders

• Reinforcing – Coke
• Covering all bets – GM
• Reacting rapidly – J&J (Tylenol vs. Datril)
• Covering with multibrands – P&G
• Covering with broader name - Businessweek
(as opposed to Wall Street Journal)
 Positioning of a Follower

“Cherchez le creneau”
1. Size – VW
2. High price – Chivas Regal
3. Low price – Nirma/Babool
4. Gender – Marlboro
5. Age – JFK/Aim
6. Time – Nyquil
7. Distribution – Cash Cards
8. Heavy user – Schaefer beer
 Repositioning the competition

• 7 UP – Uncola
To take on Coke/Pepsi

• Tylenol vs. Aspirin

Side effects of aspirin (generic brand)

• Listerine vs. Scope

“Medicine breath” factor ate into Listerine sales
 Communicating the positioning

• It is not enough to position the brand. You have to

communicate the positioning effectively. Quality of a
brand’s packaging, channels, promotion etc. must
collectively communicate & support the brand’s
image.
 Positioning & its limitations

• Evaluation & choice of positioning:

1. Are product’s current looks & ingredients
compatible with the positioning?
2. How strong is assumed consumer motivation
behind the positioning?
3. What size of market is involved?
4. Is this positioning credible?
5. Does it capitalize on a competitor’s actual or latent
weakness?
 Cont.

6. What financial means are required by such

positioning?
7. Is this positioning specific & distinctive?
8. Is it sustainable vs. competition?
9. Does it provide some alternative solution, in case of
failure?
10. Does it justify a price premium?
 Limitations of positioning

1. Focuses more on product & less on brand.

2. Does not reveal all the brand’s richness of meaning
or reflect all its potential.
3. Allows communication to be entirely dictated by
creative whims & current fads.
4. Brand identity serves to offset the limitations of
positioning.
Benefit Ladder & Perceptual Mapping
Benefit Ladder: Consumers seek certain attributes in
products and these attributes lead to certain ‘consequences’
(benefits) for them. When the consequences matter to them,
over time they learn to choose products which possess those
attributes that lead to the relevant consequences. Benefits fall
into two categories, according to the underlying motivations
to which they relate: (1) functional benefits and (2) emotional
benefits. Functional benefits address a customer’s basic
tangible needs. These benefits are often linked to fairly basic
motivations. Emotional benefits relate to the intangibles of
how one feels to use the product or service.
 Benefit Ladder
• The Benefits Ladder is based on the principle
that connecting a brand to higher-order
emotional benefits creates strong and lasting
customer loyalty. They must be connected,
however. The higher brands go up the ladder,
to uniquely own intangible benefits, the
greater the value, the stronger the
relationship, and the better the margins.
 Benefit Ladder
1. Focus on delivering key benefits to attract the most
desirable customer segments.
2. Consistently deliver benefit bundles to create a
lasting bond with target customers.
3. Leverage permission benefits to generate
exponential growth. Trust is achieved by
successfully and consistently delivering permission
benefits, the highest form of commitment a
company can achieve. Trust is earned and only
customers grant it.
 Perceptual Mapping
• Let’s do an interesting exercise!
 Brand Architecture

• Product brand
• Line brand
• Range brand
• Umbrella brand
• Source brand
• Endorsing brand
 Product brand strategy

• Involves the assignment of a particular name to 1 &

only1 product as well as one exclusive positioning. As
a result each new product receives its own brand
name that belongs only to it. E.g. P&G – Ariel, Vizir,
Dash (all detergents), Camay, Zest (soaps). Each
product has a precise, well-defined positioning &
occupies a particular segment of the market.
 Line brand strategy

• The line responds to the concern of offering one

coherent product under a single name by proposing
many complementary products. That these products
are completely different for the producer makes no
difference for the consumer who perceives them as
related. E.g. a shampoo maker offering an oil & then
a gel, all under the same brand name (Clinic).
 Cont.

• Advantages:
1. Reinforces selling power of brand & creates a
strong brand image
2. Leads to ease of distribution for line extensions
3. Reduces launch costs
*Warning!
Extensions should be closely linked to existing
product concept.
 Range brand strategy

• Range brands bestow a single brand name &

promote through a single promise a range of
products belonging to the same area of competence.
Nestle is the best example of this category. Such
names throw light on the products & help structure
the range in such a way that it creates a criteria for
segmentation even on shop shelves.
 Umbrella brand strategy

• Main advantage of umbrella brand strategy is

capitalization on 1 single name & economies of scale
on an international level. Even the occasional setback
can add to public awareness of brand. Best example
is Tata, which stretches across countless categories &
can withstand failures like TOMCO with elan.
 Source brand strategy

• Identical to umbrella brand, except that the products

are directly named. Best example is Dabur, which is
the trusted source for a host of products, but names
them distinctly e.g. Vatika, Hajmola, Real etc. The
corporate brand is endorsing the quality of
merchandise & acts as the guarantor.
 Endorsing brand strategy

• One of the least expensive ways of giving substance

to a company name & allowing it to achieve a
minimal brand status. High quality of these brands is
guaranteed by the names of major organizations. E.g.
GM for cars, J&J for baby products etc.
 Indian Scenario

• Corporate Brand (Tata)

• Umbrella Brand (Nestle)
• Mother Brand (Colgate)
• Brand (Big Mac)

• Remember, the process is cumulative!

 Choosing the appropriate branding strategy

• Choice of brand policy is not a stylistic exercise but

more a strategic decision aimed at promoting
individual products & ranges as well as capitalizing
the brand in the long term. Criteria include:
1. Product/service in question
2. Consumer behavior
3. Firm’s competitive position
 Cont.

• Decision stems from recognition of the brand’s role

as expected by the customer, compared with
function & meaning of possible product, range & line
specific names & that of other quality indicators such
as packaging, catalogue, advertising & the retailer’s
own recommendation & advice.
 3M Strategy

• Each innovation has to answer the following 4

questions:
1. Is the product a radical innovation?
2. Is there a usable primary brand?
3. Does the product justify a new primary brand?
4. Does it justify a new secondary brand?
 Co-branding

• Also known as dual branding.

• New product launches clearly identify the brands
that cooperated to create & market them. Compaq &
Mattel brought out a line of hi-tech/interactive toys.
• Many line extensions capitalize on the partner’s
brand equity. Hagen Dazs launched a Bailey’s
flavored ice-cream.
 Cont.

• To maximize their brand extension success rate,

many companies seek help from other companies’
brands whose established reputation helps. Kellogg
co-branded its cereals with Healthy Choice.

• Co-branding may help usage extension. In Europe,

Bacardi & Coke advertise together
 Cont.

• Ingredient co-branding has become commonplace.

Intel with Compaq is a common example.
• Image reinforcement may also be a co-branding
objective. Ariel & Whirlpool tied up to benefit from
each other’s equity & synergy.
• Capitalizing on synergies among a no. of brands is
another co-branding objective. Nestle showcases all
products to take on competition.
 Cont.

• Co-branding appears in sales promotions too.

Companies find that Club Med vacations work better
than cash for consumer contests.
• Loyalty programs increasingly use co-branding
arrangements. Jet Airways tying up with Stanchart is
a good example.
• Co-branding may signal a trade marketing operation.
Danone created a special yogurt for Quick
(competitor to Big Mac).
 Cont.

• Even though co-branding is fashionable, not all

alliances should be visible.
1. In the xerox market, many products sold by Canon
are made by Ricoh.
2. Mercedes & Swatch will jointly launch a car
“Smart”, w/o the Mercedes insignia.
3. Nestea is a Nestle product, distributed by Coke, but
there is just a small mention of Coke on the back.
 Ageing of brands

• General meaning refers to a slow but systematic

decline over a long period of time yesterday strong &
active, it appears mundane today. One symptom is
the widening gap between spontaneous & assisted
awareness. Brand still rings a bell but does not have
the same impact on the market
 Cont.

• Second meaning refers to the reflected image of

customer. Everything points to typical customer
being older. Even in the case of a company whose
marketing is deliberately targeted at older customers,
it is never advisable for the image of a brand to be
too closely associated with an older clientele.
 Cont.

• Examples:
1. How does a perfume for 18-25 year olds (L’Oreal) in
1977 remain the same in 2004, when the 18-25
generation itself has changed drastically?
2. In the alcohol segment, the link between father &
son is broken. Since tradition is of doubtful value,
brands have to be accepted by each new
generation.
3. YSL seems more dated than Dior or Chanel, due to
the ageing of YSL himself.
 Rejuvenating a brand

1. To halt the abrupt fall of sales of a leading brand to

enable recovery of a company on the verge of
bankruptcy.
2. To halt the slow but systematic fall of sales of a
leading brand in its market.
3. To halt the fall of sales of an ageing brand which
has almost lost contact with opinion leaders & the
younger generation.
 Cont.

4. To revive brands which have become marginal in

terms of market share but still have goodwill
among the public.
5. To revive marginal brands which still have a certain
fame but whose goodwill has disappeared among
distributors, opinion leaders & media.
6. Resurrection of brands of another era which have
already disappeared from market.
 Parameters for revival

1. Does the brand still have goodwill among

distributors or the public?
2. Is it the brand itself or the company which is
responsible for the decline?
3. Does the brand’s product correspond to market
expectations?
4. Is there anything in the company itself blocking the
change?
 Cont.

5. Is there still a group of loyal buyers who offer

potential for growth tomorrow?
6. Does the firm have long term plans or does it
expect quick results?
 Making brands go global

• A tourism develops, it is a disadvantage that certain

products have different names in different countries.
Brands acquire additional credibility when they prove
to have international appeal.
• The more international media develop, the greater
the opportunities they provide for the single brand.
However due to the cost involved only global brands
can sponsor events as far flung as Olympics, Grand
Prix, Wimbledon etc.
 Cont.

• Brand escapes the stranglehold of local distribution

through its globalisation which is a source of power.
• Single international brand eases the process of
segmentation. Worldwide single brand allows the
firm to capitalise on its own name sooner than
normal, since the brand acquires wider international
presence & awareness. The goodwill thus achieved
provides a priceless lever for entering other
markets/areas.
 Single name to global brand

• In Germany, Nestle launched Maggi as “Maggi, 5

Minuten Terrine” & positioned it as a practical
nutritious food for men & women between 30 to 40.
• In France it was launched as “Bolino” (with Maggi in
small print) & positioned as an instant snack for the
young single person.
• In Switzerland under the name “Quick Lunch” &
positioned as a quick meal approved by mothers.
 Benefits of going global

• It cuts duplicated tasks

• Simultaneous launch preempts competition
• Allows exploitation of good ideas wherever they
come from
• Allows the firm to slip the stranglehold of local
channels
 Consumers & globalization
• P&G & Camay:
In France, the seductive power was portrayed by a
woman beautifying herself in her bath for her
husband. In Japan, it created a furor, since it is
considered an insult for a man to enter the bathroom
when his wife is bathing!
• In Italy they preferred a fawning wife & her macho
husband.
• The Austrians used Paris as a backdrop to signify
seduction.
• In Greece, they brought in the proverbial vamp.
 Conditions favoring global brands

• Social & cultural changes

• New unexplored sectors
• Technology
• Mobility
• Archetype brands
* On the whole brands whose identity focuses on the
product & its roots can more easily go global. Jack
Daniel’s tradition makes it identifiable worldwide, but
what exactly is the Johnny Walker tradition now?
 “Born in the USA”

• American companies are more ready to globalize,

because their domestic marketing itself is essentially
global - since the social & cultural diversity of the
American melting pot makes the marketing process
multi-ethnic & diverse.
• US considers Europe as a single & homogeneous
market & standardizes its operations to reach every
nook & cranny. So there is little room left for local
differentiation & its products become global.
 Barriers to globalization
• The yoghurt example:
*In France, it is still considered a health product
because it was launched as one & sold exclusively
through pharmacies.
*In UK, it is regarded as a product for pleasure. So
the flavored/fruit version sells more & the plain
version is supposed to be for people on diet.
*In Spain & Portugal, the fruit variant is less popular
than the flavored version, because fruit is abundant
in these countries.
Moral: even a simple product becomes complex
globally!
 Managerial blockages

• One man firms are more suited to global marketing

e.g. Cardin, Benetton, Mars etc.
• Decentralized firms whose power lies within their
subsidiaries are less capable of brand globalization.
The local executive wants to be CEO of the subsidiary,
so he is more concerned with his local markets,
which is the antithesis of global marketing.
• Toshiba met with resistance in trying to implement
its slogan amongst French subsidiaries till it changed
the language to French (slogan was the same!).
 Impact of a single Euro market

• Differences that would compel adaptation of

marketing mix:
1. Legal – 55%
2. Competition – 47%
3. Consumption habits – 41%
4. Distribution structure – 39%
5. Brand awareness – 38%
6. Brand distribution level – 37%
7. Media audience – 37%
 Cont.

8. Marketing program success – 34%

9. Consumers’ needs – 33%
10. Media availability – 32%
11. Brand images – 30.5%
12. Norms for manufacturing – 27.5%
13. Brand history – 25.2%
14. Lifestyle differences – 25%
15. Cultural differences – 25%
16. Consumer buying power – 22%
 Facets of brand mix most often globalized
• Logo – 93%
• Brand name – 81%
• Product features – 67%
• Packaging – 53%
• After-sales service – 48%
• Distribution channels – 46%
• Sponsoring – 30%
• Positioning – 29%
• Advertising execution – 25%
• Relative pricing – 24%
• DM – 18%
• SP – 10%
 Which organization for global brand?

• 4 types of brands are:

1. Beginner
2. Flexible
3. Tactician
4. GLobal
 For global brands

• For global brands, purists favor “lead country” or

fully centralized type of organization. Most
organizations will go through following phases:
*Starting from a very decentralized position they will
move to creation of collective structures & more or
less strong centralization, but as rigidities appear as
well as loss in quality of relationship with market
itself, they will evolve once more towards
decentralized structures, though under strong
coordination.
 Pathways to globalization

1. Duplicating progressively but everywhere the

success factors of the local strategy
2. Launching brand from scratch simultaneously in
several countries
3. Unifying local brands inherited during growth of
groups (inorganic growth)
 Cont.

• In the case of (3), the following questions need to

be addressed:
1. Is globalisation pertinent?
2. Which brand facets should be globalised?
3. Common brand platform, prism & concept
4. Common packaging, advertising etc.
5. Common products
Building Brands Through
Archetypes
• Poorly defined or misunderstood brands
are rarely successful.
Stories make the world go round

‘We tell ourselves stories to make sense of life.” –Norman Mailer

“Man lives surrounded by his stories and those of others. He sees everything that
happens to him through them and tries to live his life as if recounting it.” -Satre
• Stories are so potent because they tap
into emotions which drive us

This explains why at the heart of every

great brand there is a story people want
to be a part of
• “What we sell is the ability for a 43 year
old accountant to dress in black leather,
ride through small towns and have
people be afraid of him.”
• (Harley Davidson Marketing Exec.)
• Some stories are more compelling than others…

• “The great stories consist of common elements found

consistently in myths, fairy tales, dreams and movies…as
soon as you enter their world you see the re-occurring
character types and relationships…These archetypes are
amazingly consistent throughout all times and cultures.”
• –Chris Vogel “Mythic Structures for Storytellers”

• Archetype:
• 1. An original pattern or model.
• 2. A perfect example or model of something.
• 3. An inherited idea.
• In 1893 400 different versions of the
Cinderella story had been identified
around the world.
 Star Crossed lovers
(and one common actor)
• “Titanic intentionally includes universals
of human experience that are timeless
and familiar. By dealing in archetypes,
the film touches people in all ages and
cultures.”
• -James Cameron on Titanic
• “A brand is a metaphorical story…that
connects with something very deep a
fundamental human appreciation of
mythology…companies that use this
well invoke something very powerful.”
• (Scott Bedbury - head of marketing at
Starbucks and Nike)
 The Hero & The Outlaw

– Archetypes can be seen across all cultures

throughout time.

– An Archetype is the missing link between

customer motivations and product sales
 INNOCENT
– Coca-Cola, Coors Light, Cotton, Jolly Green Giant, Crystal Light,
McDonalds
• http://www.archetypal-branding.com/theinnocent.html
– Faith and optimism

Mindful
– Oprah Winfrey, Oil of Olay, Proctor & Gamble,
http://www.archetypal-branding.com/thesage.html
– Wisdom & Intelligence
HERO
– Marines, Olympics, Nike, Red Cross, Marlboro Man
• http://www.archetypal-branding.com/thehero.html
– Competence & Courage

OUTLAW (rebel)
– MTV, Howard Stern, Harley-Davidson, Apple
• http://www.archetypal-branding.com/theoutlaw.html
– Outrageousness & Radical Freedom
REGULAR GUY/GAL
– VISA, Saturn, Wrangler Jeans, GEICO
• http://www.archetypal-branding.com/theregular.html
– Realism, Empathy, Lack of Pretense

LOVER
– Victoria's Secret, Godiva Chocolate, Chanel, Hallmark
• http://www.archetypal-branding.com/thelover.html
– Passion, Gratitude, Appreciation, Commitment

Playful
– Joe Camel, "Got Milk," Charlie Chaplin, Pepsi
• http://www.archetypal-branding.com/thejester.html
– Joy
BRAND VALUATION

Measuring Brand Equity

 Brand Equity

*Brand Loyalty:
• Customer will change brand for price – no loyalty
• Customer is satisfied, may not change
• Customer is satisfied & feels there would be cost
incurred on change
• Customer values brand & sees it as a friend
• Customer is devoted to brand
 Brand Equity

• Apart from loyalty, it is also the degree of brand-

name recognition, perceived brand quality, strong
mental & emotional associations & other assets such
as patents, trademarks & channel relationships.
 Advantages of Brand Equity

• More trade leverage

• Higher price
• Extensions
• Defense against competition (in terms of price etc.)

• Some popular branding models have been

explained….
CBBE MODEL (Keller)
 Other Models

• 1. Young & Rubicam BAV model

• 2. Aaker’s model
• 3. Millward Brown (Brand Pyramid)
BAV Key Components

Differentiation

Energy

Relevance

Esteem

Knowledge
 Aaker Model

Core Identity
Brand Identity
Elements

Extended Identity
Brand Essence
Elements
 MB Brand Pyramid
• Presence: The customer is aware of the brand and recognizes the name,
but may have no particular opinion or emotional attachment to the brand.
• Relevance: The customer is evaluating a brand in relation to other similar
products or services.
• Performance: The customer will begin to set certain expectations and may
develop a real sense of the brand’s identity.
• Advantage: The brand has proved itself superior to competitors and the
customer may begin to feel an emotional connection with the brand.
• Bonding: The customer has established a bond with the brand and is likely
to remain a loyal customer. Consumers at this level of the pyramid may
actively promote the brand to their family and friends.
 MB model
Strong Relationship

Bonding

Advantage

Performance

Relevance

Presence
Weak Relationship
Another Brand Pyramid Version
 Most valuable brands (2012)
1. Apple
2. Google
3. Microsoft
4. IBM
5. Wal-Mart
6. Samsung
7. GE
8. Coke
9. Vodafone
10. Amazon
 There are several brand values

• Value of liquidity in case of forced sale

• Book value for company accounts
• Value needed to encourage banks to lend the
company money
• Value of losses or damage to worth of brand
• Value in order to estimate price of licenses
• Value for management control which depends on
behavior encouraged in managers
 Cont.

• Value for partial sale of assets

• Value in case of a takeover or M&A

Million dollar question:

Is it necessary to include brands on the Balance

Sheet?
 Cont.

• Acquired brands must be included

• Created brands may be included

Observe the difference between “must” & “may” to

understand the difference in accounting for value of
inorganic & organic brands.

In India, we go with goodwill.

 Cont.

• For created brands:

Brand is an asset which should be taken into account
if:
1. It is likely that the brand will bring about a future
economic advantage which will have an influence
over the whole company.
2. The article has a cost or a value which can reliably
be valued.
 Cont.

• Arguments against including created brands on

Balance Sheet:

1. Acquired brands are accounted for at their

purchased price which is determined by expected
profits.
2. Valuation methods for internal brands are highly
subjective – this goes against basic accounting
principles.
 Valuation Methods

• Cost-based methods:

1. Valuation by historical cost

2. Valuation by replacement cost
3. Market Value Method
4. DCF Method
5. Brand Contribution Method
6. Inter-brand Method
 Price-based methods

1. Price Premium Method

2. Market Share Equalisation Method
3. Price-Premium at Indifference
 Customer-based Brand Equity

• Brand Knowledge Method

(brand recall)
• Attribute-oriented Approach
• Blind Test
 Cost-based methods

• Historical Cost: This is the money that has been spent

on the brand till date (i.e. on creating the brand).
Method is inappropriate because a prospective buyer
is interested in the future cash flows from the brand
& the money spent on creating the brand is no
guarantee for future sales. Costs incurred on brands
is no measure of efficiency & poorly spent finances
do not translate into brand equity.
 Replacement Cost
• How much would it cost to create a brand with the
turnover, profitability, distribution reach, brand
loyalty etc. of Colgate?
• This cost is the brand equity of Colgate.
• Promo expenses on launch alone would cost close to
5 crores (national).
• For Close Up, say Rs. 200 crores was spent on
production & marketing over the years to achieve
present turnover. Let’s add another 100 crores for
brand loyalty & equity. So brand value = 300 crores.
But what is the guarantee that that a brand created at
300 crores will achieve the market share ofClose Up?
 Cont.

• Replacement Cost = Launch cost + production &

admin. costs (over the years) + brand premium
(acquired)
• This method is better than historical cost, but suffers
from setbacks.
• Present costs (as replacement cost method) are as
bad indicators as past ones (historical cost method)
for brand valuation.
 Market Value Method

• Brand value for a particular brand is obtained by

comparing it with the value that had been realized in
a comparable current M&A.
• If Cibaca was bought by Colgate for 131 cr. what
should be the Colgate equity? Since Colgate’s
turnover is 17 times that of Cibaca, should we
multiply 131x17=2227 cr.? This may not be realistic!
Better option is P/E value of shares.
 Recent brand acquisitions (values)

• Eveready – 290 cr
• Kelvinator – 250
• Farex/Glucon/Complan – 210
• Thums Up/Gold Spot – 180
• Cibaca – 131
• Transelektra (Good Knight) – 80

* All were bought on “Market Value Method”.

 DCF Method
• Consists of
1. Estimating cash flows that would accrue to brand in
future
2. Converting these to present values, using time
value of money
*Consider the case of Usha fans:
If the estimate of sales for next 10 years is SI, S2, ---
S10 & a discount of 15% is applicable to these
amounts then present value P (Brand Value)=
SI/1.15+S2/(1.15)2 --- S10/(1.15)10
 Cont.

• The 15% here is supposed to cover the uncertainty

attached to future. But it is difficult because
competitors may outperform Usha or nature of
industry might change (like the shampoo industry
after the intro of sachets). So this method is useful
only when the industry is stable & company’s
turnover predictable.
 Brand Contribution
• This method tries to identify the value that is added
by the “brand” to the product. It compares the
profits earned by the brand with the profits earned
by an unbranded product in the same category. The
difference between the 2 is treated as a measure of
brand value. But any organization will not sell at this
price & will demand several times this value. So
brand value will = K x (profit from brand – profit from
unbranded product in same category).
 Inter-brand method

• The weighted average of the last 3 years’ profits of

brand is computed.
• This figure when x with a no. gives the value of brand
equity. The no. = P/E of company/industry & a factor
called brand strength.
• Brand strength is dependent on certain variables like
leadership, stability, internationality etc. of brand.
 Cont.
• This method despite all its emphasis on
quantification has several qualitative factors
incorporated in it that finally decide the brand’s
equity e.g. “brand strength” computation rests more
or less on subjective judgement.
• Why multiply earnings with P/E ratio? P/E ratio in this
context is the ratio of the price of a company’s share
in the industry to the average earning per share for
that industry. This represents the amount someone is
ready to pay to obtain an earning “E” from company.
 Cont.

• When P/E ratio is multiplied by weighted earnings, it

gives the price of the company. This when multiplied
by brand strength gives price of brand. This is the
rationale of the inter-brand method.
 Price-based methods

• Price premium method:

This compares the difference between the retail price
of the “brand” & the retail price of an unbranded
product in the same category. Difference gives
indication of “brand strength” only i.e. indication of
brand equity. Higher the retailer premium that a
brand can charge, greater is its equity in the mind of
the customer.
 Cont.

• Drawbacks:
1. Comparing Colgate Total with an unbranded
product will give it a high BE as compared to CDC.
2. Some toothpastes like Babool are deliberately
priced low for market penetration. So it would not
be fair to assume that Babool enjoys less BE.
3. This method would reduce BE to almost 0 for
brands like Nirma & Lifebuoy.
 Market Share Equalization Method

• Suppose there are 100 consumers of toothpaste in

the country, out of which:
65 use Colgate @ 17.40 for 100gm
20 use Close Up @ 22.50
10 use Promise @ 17.40
5 use Babool @ 14.60
*What are the prices at which the market share for
each of these brands is equal?
 Cont.

• Colgate is obviously the most popular brand, but if

the price is raised beyond a point, people will switch.
What is the point at which 40 people switch from
Colgate to other brands?
Colgate – 25 – 24.50 (up by 40%)
Close-Up – 25 – 23.00 (constant)
Promise – 25 – 17.50 (constant)
Babool – 25 – 14.60 (constant)
So at these prices, we have forced = market share for
all 4 brands.
 Cont.

• If we multiply all the prices by a factor of 10, we

get the brand equity nos. i.e.
1. Colgate = 245
2. Close Up = 230
3. Promise = 175
4. Babool = 146
 Price Premium at Indifference

• Tries to compare free prices of brands at point of

indifference. Let’s take Colgate & Promise. Let’s say
on average, a customer jumps from Colgate to
Promise at Rs. 25/-
• B. E. of Colgate =
(Revised price of Colgate) – 1 (X 100)
(Price of Promise)
= 25 - 1 X 100
17.4
= 43.7
 Customer-based brand equity
• Brand Recall Method:
Suppose you want a consumer to recall Nirma (say).
Then you can allot scores based on following scale:
1. TOM – 10/10
2. Somewhat unaided – 6/10
3. Somewhat aided – 4/10
4. Almost totally aided – 2/10

Average score = 5.4 (BE)

 Cont.
• Drawbacks of this method:
Like most attitude scores, the score obtained for
brand equity with the customer as the focus needs
extensive validation i.e. it has to be administered to
several groups of people containing a representative
sample of consumers. Until several such studies are
carried out on different products/brands, a score
cannot be interpreted. So problems associated with
this method are related to validation &
standardization.
 Examples

• If Colgate is one of the most popular Indian brands

with a score of 82, then should Nirma at a score of 55
be compared to Colgate or should it be compared
only to other detergent brands?
• Is it fair to compare equity of brands across
categories as wide as say IT & FMCG?
 Cont.

• Attribute-oriented approach:
Take a particular brand & list all its attributes. Rate
these attributes on a scale of 1-10, based on a
consumer survey. Sum up the scores. This represents
the equity of the brand scale. Repeat the exercise on
competing brands & you get the BE for all the brands.
*Talcum powder example.
 Cont.

• Limitations of this method:

BE is usually more than what the attributes bestow on

the brand. Equity is a function of many things & using
just one aspect is likely to give a lopsided view.
 Blind Test
• BE in this case is defined as the difference between
the overall performance of a brand & the sum of the
scores it obtains on the objective parameters.
• Example:
Suppose at the overall brand level, out of 100,
Yamaha scores 78, Shaolin 82 & Splendour 85. This is
the preference at brand level i.e. the score obtained
when you ask the consumer to rate the brands.
 Cont.

• Now perform a blind test on attributes like:

1. Fuel efficiency – Sh(6), Sp(9), Y(8)
2. Pick-up (6), (6), (7)
3. Load carrying (7), (6), (6)
capacity
Total(30) 19 21 21
Out of 100 63 70 70
 Cont.

• Differences:
Shaolin = 82 - 63 = 19
Splendour = 85 – 70 = 15
Yamaha = 78 – 70 = 8

So equity is highest for Shaolin & the lowest for

Yamaha, but the overall preference was highest for
Splendour.
 Cont.

• Limitations:
Problem lies in identifying subjective & objective
parameters. It could be easy ih the case of 2
wheelers, but may be tough in the case of talcum
powder. So taking subjective factors for measuring BE
could lead to problems.