BRAND EQUITY

MEANING
The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. Companies can create brand equity for their products by making them memorable, easily recognizable and superior in quality and reliability. The additional money that consumers are willing to spend to buy Coca Cola rather than the store brand of soda is an example of brand equity.

BRAND VALUE Brand value refers to the financial asset that the company records on its balance sheet

BRAND EQUITY Brand equity refers to the importance of the brand to a customer of the company.

Brand value is easier for a company to estimate. The company can determine the fair market value of the brand by asking other companies what price they would pay to purchase the brand.

Brand equity is more difficult to estimate because it relies on customers' beliefs. The company does not know whether a customer makes a purchase because he recognizes the company's brand or whether the customer uses other criteria, such as price and convenience, to make his decision

IMPORTANT BRAND CONCEPTS

Brand strength Brand extension Brand portfolio

Brand architecture

BRAND STRENGTH
While there is no universal definition, we describe the brand strength of a professional services firm as the combination of a firms reputation and its visibility. Firms that have better reputations coupled with higher visibility have stronger brands.

High visibility alone doesnt really strengthen your brand. Does any experienced professional services marketer believe that full page display ads alone strengthen your brand?

BRAND EXTENSION & STRETCHING

Brand Extension is the use of an established brand name in new product categories. This new category to which the brand is extended can be related or unrelated to the existing product categories.

Advantages of Brand Extension

It makes acceptance of new product easy.

It increases brand image.

The risk perceived by the customers reduces. The likelihood of gaining distribution and trial increases. An established brand name increases consumer interest and willingness to try new product having the established brand name.

The efficiency of promotional expenditure increases. Advertising, selling and promotional costs are reduced. There are economies of scale as advertising for

core brand and its extension reinforces each other.

Cost of developing new brand is saved. .

There are feedback benefits to the parent brand and the organization.
The image of parent brand is enhanced. It revives the brand.

It allows subsequent extension.

Brand meaning is clarified. It increases market coverage as it brings new customers into brand franchise.

BRAND STRETCHING
Brand stretching refers to the use of an established brand name for products in unrelated markets.
For example the move by Yamaha (originally a Japanese manufacturer of motorbikes) into branded hi-fi equipment, pianos and sports equipment.

PSU - Global Brand Management - Alain Hutinel

Brand stretching risks

Distort/Dilute the values of the Brand Lose the original consumers

PSU - Global Brand Management - Alain Hutinel

10

Keys to success in brand extension

Brand identity
Fit
Relevance

Brand extension

Added value

Markets values

PSU - Global Brand Management - Alain Hutinel

11

Examples- failed brand extensions

Pepsi's Cafechino looks like a disaster in India as very people have actually gone for it

Ready-to-eat pizza from Amul, India

 Coke's launch of Black Cherry Vanilla Coke and Diet Black Cherry Vanilla Coke failure miserable. launched in January 2006 by The Coca-Cola Company in United States

BRAND PORTFOLIO
Some companies have multiple products and services, each of which may have its own brand (trademark, service mark), or form part of a "family of brands." They may be common law marks, or registered under statutes in various countries and states. The total collection of these rights is called the "brand portfolio. According to marketing theory, there are two basic brand portfolio models House of Brands and Branded House.

 House of Brands
It refers to a brand portfolio where firms will choose different brand names for various products across categories. These brands will have own identity and personality

For example HUL has soap brands like Lux, Rexona, Hamam, Lifebuoy, Dove etc.

 Branded House
This portfolio model is where the firm chooses to have one brand name for all the products that is marketed by the company.

Many firms use the corporate brand name for all the products that they sell in the market. Dell is often cited as a classic example of a Branded House.

Brand architecture
Brand architecture is the structure of brands within an organizational entity. It is the way in which the brands within a companys portfolio are related to, and differentiated from, one another.

Types of brand architecture Corporate brand, umbrella brand, and family brand Examples include Virgin Group and Heinz. These are consumer-facing brands used across all the firm's activities, and this name is how they are known to all their stakeholders consumers, employees, shareholders, partners, suppliers and other parties. These brands may also be used in conjunction with product descriptions or sub-brands: for example Heinz Cream of Tomato Soup, or Virgin Trains.

Endorsed brands, and sub-brands For example, Nestle KitKat, Cadbury Dairy Milk, Sony PlayStation Polo by Ralph Lauren

These brands include a parent brand - which may be a corporate brand, an umbrella brand, or a family brand - as an endorsement to a sub-brand or an individual, product brand. The endorsement should add credibility to the endorsed sub-brand in the eyes of consumers.

AAKER MODEL- BRAND EQUITY

According to Aaker brand equity model, we are able to associate the concept for building brand equity with the below five following points:-

Brand Loyalty Brand Awareness Perceived Quality Brand Associations Channel Relationships