Brand Hierarchy

Progress never comes overnight. Everyone has to climb the ladder step by step.
Coca-Cola started life in 1886 as a soda fountain beverage. A typical local or store brand, it spread to other
outlets rapidly. Bottling was not an initial priority. In fact, two attorney bought the bottling rights for most
of the US for a handsome $ 1.

Nokia was originally a brand of paper and cardboard. It pre-dates Coke, tracing its origins back to 1865.
Today, it is the world's eighth most valuable brand worth $ 24 billion (Coke No .1 at $ 67 billion). The
company was in paper; it is still in the communications business.

All brands have small beginnings. Even in these days of simultaneous global launches, there is an
enormous amount of test marketing initially. In India, cities like Hyderabad, Vijayawada, and areas like
Lokhandwala in Mumbai are happy hunting grounds for the test marketing fraternity. Sometimes new
brands spend as much as a year out there before they are taken regional or national.

So is there a hierarchy in brands? At the bottom is the store brand or the private label (a very localized
brand). Then comes the regional brand, followed by the national brand and the global brand.

The store brand needs the least investment and the global brand the highest. Given the same core product,
the global brand cost the most. An obvious corollary: the margins on store brands are the least.

Is there also a natural progression from a store (local) brand to regional, national and finally global? What
does it take to move from one orbit to the other?

It is an increase in energy level and really needs three inputs. First is the communication input, which
means advertising, promotions, etc. Then is the availability input, which is essentially distribution. Finally,
it is the unpredictability input.

Unpredictability is what will make a new brand successful against the already entrenched. The P&G's of
the world are prepared for the ordinary and the common place. They take a hard knock when they don't
know what hit them. The surprise could be in price.

It could be in distribution. Would you think of getting salt with your morning newspaper? The Dainik
Bhaskar group, which has launched the highly successful Bhaskar salt, can do that because it owns the No.
1 Hindi daily in India.

It could be in advertising. French Connection United Kingdom was a tired old fashion house. Then it
started advertising under its acronym FCUK, and turned a loss of 5 million pound in 1992 into a profit of
almost 39 million pound last year.

Progress never comes overnight. Everyone has to climb the ladder step by step. There are several Indian
brands that are doing it. Anchor is going global. Bajaj Auto, Tata Motors and Raymond are already there,
albeit in a small way. The challenge for India today is to turn from an outsourcing center to a producer of
India-owned branded goods.
Concluded.

When you think about the affinity that you have for different brands, you quickly realize that they fall into different
categories – you may not have the as much brand affinity and loyalty to your soap vendor as you do to your
favorite shirt manufacturer, or your car manufacturer.

Could there be such a thing as a universal brand loyalty hierarchy – akin to Maslow’s needs hierarchy? And if so,
would it help marketers in determining what marketing program might work better to promote and position their
products?

Let’s try this out and see where it leads…

At the highest level of the brand loyalty hierarchy are products that help define who you are and what you stand
for. They are the products that define your personal brands – let’s call them Image Defining Brands. Brands
that fall in this category in the consumer space include your clothes- you might want to wear only Nautica shirts
because you are a sailor, or a sailor wanna be. Another product that probably falls in this category is the car you
drive – with some people driving all wheel drive vehicles to indicate their love for the rugged outdoors and
adventure travel, and others swearing by the Toyota Prius to indicate their dedication to a cleaner planet. In the
corporate world, products that fall into this category are products that can affect a person’s image or career. Early
adopters of Lotus Notes collaboration software or Linux servers come to mind. Being early in buying VoIP solutions
would probably fall into this category as well. The key is that those brands define who I am or who I want others
to think I am.

Next ring down are products that do not necessarily define your image, but they make you feel good – let’s call
them Feel Good Brands. You may not really have much brand loyalty to a soap vendor who’s product you use,
but you buy the same soap over and over again because it smells good and makes you feel good when you step
out of the shower. Another example in this category could be Fair Trade Coffee – it really does not make a
difference to your image whether you drink Fair Trade Coffee or not – after all it is not written on your cup. But it
makes you feel good that the laborers that brought you this coffee were treated fairly. In the business world,
products that fall in this category are products in well established and mature product categories. If you are in
charge of deciding which CRM system to bring into your company, it is no longer a career defining decision, or
even an image defining decision – it is very much a “feel good” decision. You will choose a solution that will make
you feel good about your decision.

One ring further down are the products for which you have little brand affinity. They don’t define you, nor do they
make you feel much different than if you were using another brand – let’s call them Commodity Brands. Low end
pens and pencils come to mind. You may buy a pen from Bic because you know that they have a reputation to last
long and not leak on planes, but in reality you might be just as satisfied and feel just as good with a Papermate
pen. The same is true for the gas you put in your car, you may have a slight preference for Mobil because it has a
reputation of being a cleaner gas, but you really would not feel much different after filling up your tank with with
cheap LuKoil gas. In the business world, brands that fall into this category would be office supplies, or
snack/vending machine service providers. The key buying decisions for these brands are reputation and trust.

Of course, product vendors can create products in certain product categories that allows them to move up (or
down) the hierarchy. Luxury pens are perceived by some buyers as image defining products. And while Fair Trade
Coffee in your own cup may not help define your image, being a Starbucks vs. a Dunkin’ Donuts kind of coffee
buyer may do just that.

More on this later…what are your thoughts?

brands - brand positioning

Brand positioning

As we have argued in our other revision notes on branding, it is the “added value” or augmented elements
that determine a brand’s positioning in the market place.

Positioning can be defined as follows:

Positioning is how a product appears in relation to other products in the market

Brands can be positioned against competing brands on a perceptual map.

A perceptual map defines the market in terms of the way buyers perceive key characteristics of competing
products.

The basic perceptual map that buyers use maps products in terms of their price and quality, as illustrated
below:

Brand Positioning Example

By Nige | October 23, 2009
Part of the branding process is working out your brand position. Brand position is all about where your brand currently sits
in your market place and where you want it to sit in your marketplace against your competitors.
By talking to your customers and also relevant focus groups you can build up a picture of where your brand sits within the
marketplace. This can be visualised by plotting the results on a graph. The 2 axis used in this example are, value against
luxury and traditional against innovation.

Is your product/service a luxury item, or is it more of a commodity (value). Also is a traditional product or a more cutting
edge innovative product/service.

Also you need to plot your competitors on the graph, to see where they are in the market place and identify any gaps in the
market. Then we can plot were we want to be in the marketplace as part of the overall brand of our product. There are no
wrong or right answers, it just a matter of understanding your brand, it’s strengths and then playing to the strengths. You
may find through this exercise that your product/service is undervalued in the market-place, your marketing is not getting
the message across. You can then address the problem and measure the returns.

Once this is established and complete, we can use it as part of out brand strategy to inform our clients and potential clients
on where we sit within the market. This is just one example of brand positioning, there are many other techniques, which
can be used and depending on your business, some are more effective than others.

Most marketing uses brand positioning as part of its message, but sometimes we see examples of brand positioning, being
the message. Below is an examples of this in practice.

Clover
Below is the clover advert recently launched in the UK. The ad is a great example of brand positioning. In fact is pretty
blatant. The ad is all about the product being in the middle between, butter and margarine, taking the best of both and
combining them in to 1 product. Positioning it separate from it’s competition (butter products and margarine products) and
creating it’s own category, so it becomes no.1 in that category.

Brand Positioning Example

By Nige | October 23, 2009
Part of the branding process is working out your brand position. Brand position is all about where your brand currently sits
in your market place and where you want it to sit in your marketplace against your competitors.
By talking to your customers and also relevant focus groups you can build up a picture of where your brand sits within the
marketplace. This can be visualised by plotting the results on a graph. The 2 axis used in this example are, value against
luxury and traditional against innovation.

Is your product/service a luxury item, or is it more of a commodity (value). Also is a traditional product or a more cutting
edge innovative product/service.

Also you need to plot your competitors on the graph, to see where they are in the market place and identify any gaps in the
market. Then we can plot were we want to be in the marketplace as part of the overall brand of our product. There are no
wrong or right answers, it just a matter of understanding your brand, it’s strengths and then playing to the strengths. You
may find through this exercise that your product/service is undervalued in the market-place, your marketing is not getting
the message across. You can then address the problem and measure the returns.

Once this is established and complete, we can use it as part of out brand strategy to inform our clients and potential clients
on where we sit within the market. This is just one example of brand positioning, there are many other techniques, which
can be used and depending on your business, some are more effective than others.
Most marketing uses brand positioning as part of its message, but sometimes we see examples of brand positioning, being
the message. Below is an examples of this in practice.

Clover
Below is the clover advert recently launched in the UK. The ad is a great example of brand positioning. In fact is pretty
blatant. The ad is all about the product being in the middle between, butter and margarine, taking the best of both and
combining them in to 1 product. Positioning it separate from it’s competition (butter products and margarine products) and
creating it’s own category, so it becomes no.1 in that category.