chapter

12

Branding
McGraw-Hill/Irwin

2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

Branding Todays Objectives

Objectives will be to: Understand what a brand is and how the 2Is affect branding Understand what brand equity is and how it is measured Discuss how marketing programs build brand equity Examine the seven-step branding process Review two case studies in online branding Discuss the effects of brand on the four customer relationship stages

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Some Internet Brands Have Become Major Players

Source: www.brandinstitute.com/bi_site/news_release_megabrands1098.htm

Exhibit 12.1: Examples of Internet Brands

Exhibit 12.2: Case Studies of Successful Online Branding Efforts

Established as Traditional Brand
Branding Online BusinesstoConsumer BusinesstoBusiness Ragu Branding and Selling Online American Airlines

Established as Online Brand

Intermediary/ Vertical Portal Yahoo! e-Commerce

CDNow

Boeing

Cisco Systems

Avnet

NexPrise

Source: PricewaterhouseCoopers Moneytree Report 2000.

Exhibit 12.3: The 2Is and Branding

Individualization Interactivity

Interactivity creates value because the brand is tailored to the individual Customers gain a sense of control with respect to the nature and timing of their interactions with the brand There is a danger that the brand will stray from its core personality

Responsiveness becomes a key brand attribute as customers recognize that their concerns are heard and responded to across multiple channels The frequency of interaction is increased leading to the need to freshen content and target messages to specific usage occasions Customers expect the brand to evolve in response to their needs and desires

Community

Should Offline Firms Create New Online Brands?

Point-Counterpoint
Keep the Same Brand It takes an enormous amount of time and money to build a strong brand name Customers who purchase online are assured that services are available offline It is difficult to uncover interesting new brand names The online brand and the offline brand can have a synergistic effect Target customers will not be confused by brand offerings appearing online

Build a New Brand Using an existing brand limits the growth of the user base Existing offline brands dont get the Net It is possible to sign up more partners when a third-party name is used

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Quotes on Online Branding

E-branding is more important [than e-commerce]. And it must come first. Because few people will buy your stuff online or off unless you are top-of-mind. Annette Hamilton, Executive Producer, ZDNet Brand is the price of entry [to the Internet], not the winning strategy. Dylan Tweney, infoNet By the time your potential customers log on, they already know what theyre looking for, and they often know from whom they want to buy it. Theyre just not listening to branding messages anymore. Michael Fischler, Principal, The Pubs Group

Quotes on Online Branding (cont.)

Brands stand as comfort anchors in the sea of confusion, fear, and doubt. In dynamic markets, strong brands have more value than ever, precisely because of the speed with which these markets move. Chuck Pettis, Technobranding It took more than 50 years for Coca-Cola to become a worldwide market leader, but only five years for online search engine Yahoo to gain market dominance. The role of the brand has changed dramatically and has created a vacuum between offline and online brands. Mark Lindstrom, Executive Director, ZIVO A companys website is the brand. Its the hub of consumer experience, the place where all aspects of a company, from its annual report to its products to its support, intersect. Its the company in a nutshell, all there in a way that just is not possible in the analog world. Sean Carton, Carton Donofrio Interactive

Exhibit 12.4: A Simple Conceptual Model of Brand Equity

A good brand . . .
Product, Price, Community, Communication and Distribution Programs

. . . provides positive consumer responses . . .

Brand Awareness

. . . and benefits both target customers and firm

Customer Benefits

Depth Breadth

Confidence Loyalty Satisfaction

Wraparounds

Brand Associations Core Product/ Service

Strength Relevant Consistent

Valence Uniqueness Memorable Distinctive

Firm Benefits

Reduced marketing costs Increased margins

Opportunity for brand extensions

Source: Keller (1996), Aaker (1996), Strategic Market Research Group, Marketspace Analysis

Exhibit 12.5: A Model of FogDog Branding

Fogdog Brand Perceptions
Product, Price, Community, Communication and Distribution Programs

Wraparounds

Emphasize prices and selection benefits Selective distribution Competitive pricing Gift shopping service MyFogdog discounts and benefits How to buy help Discussion groups by sport Fogdog Fetch helps you find the right product Low prices Selection breadth and depth

Core Product / Service

Do Strong Online Brands Matter?

Point-Counterpoint
A Strong Brand Essential A strong brand name provides a clear presence in the market Strong brands attract customers Strong brands carry positive associations with consumers Clear brands are associated with higher conversion rates All current online winners have strong brands

Strength of Brand Is Not That Important Alliances not strong brands are the key to winning in the marketplace Readily available third-party evaluators will increasingly influence online consumption Speed to market is more important than branding The trend toward customization is leading to an environment where the meaning of a mega-brand is no longer relevant Current online winners may have strong brands, but so do a number of big losers

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Exhibit 12.7: Marketing Programs to Build Brand Equity

Product

Pricing

Communication

Brand Equity

Promotional Program

Distribution

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Exhibit 12.8: A Seven-Step Branding Process

Step 1 Clearly Define the Target Audience Step 2 Understand the Target Customer

Step 3

Understand the Competition

Step 4

Design Compelling Brand Intent

Step 5

Identify Key Leverage Points in Customer Experience

Step 6

Execute the Branding Strategy

Step 7

Establish Feedback Systems

Exhibit 12.9: Similarities & Differences in Offline vs. Online Branding

Branding Element
1. Clearly Define the Brand Audience 2. Understand the Customer 3. Understand the Competition 4. Design Compelling Brand Intent 5. Identify Key Leverage Points in Customer Experience 6. Execute the Branding Strategy
Limited

Offline
to manageable number of segments to prevent inconsistent messaging thorough understanding of environment, desired purchase and usage experience monitoring of competitor advertisements and activities
Brand Could

Online
include larger number of segments based on values or interests rather than demographics thorough understanding of desired purchase and usage experience in both the offline and online environment advertisements and some activities can be directly observed online opportunity for customization of key messages

Requires

Requires

Requires

Competitor

intent (desired positioning) designed to address the needs and beliefs of target segments process is typically a simplified representation of customer segment behavior with static leverage points positive brands are built up over time

Greater

Buying

Buying

process tends to be more dynamic and flexible

Strong, Image

Online

reinforced through variety of offline media

interactions bring in added concerns of security and privacy familiarity with online brands makes fostering trust more difficult

Marketing strategy includes plan for sequenced growth and adjustment of brand based on changing customer needs Building Building

Limited With

brand awareness requires significant investment brand loyalty takes time offline, especially because early customer receptivity to brands is difficult to assess (and usually involves market research)

the ability to customize, one customers brand image may be different from another customers brand image for multiple segments and opportunity for early recognition of the changing customer requires a corresponding tailoring of brand intent brand awareness requires significant investment, especially for those competitors who are not first in their category online have the potential to generate loyalty more quickly, especially if customers are targeted effectively tools exist for tracking online; allow for anonymous, interactive, quick feedback

Customization

Building

Brands

7. Establish Feedback Systems

Collecting

and analyzing customer feedback is more time-consuming

Sophisticated

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Exhibit 12.10: Citibank Online

Exhibit 12.11: Citibank Vs. Chase: Assessment of Key Branding Elements

Exhibit 12.12: Citibank Vs. Chase Assessment of Key Brand Attributes

Exhibit 12.13: CBS MarketWatch.com

Exhibit 12.14: CBS Marketwatch.com Vs. Bloomberg.com: Key Branding Elements

Exhibit 12.15: CBS Marketwatch.com Vs. Bloomberg.com: Key Brand Attributes

Exhibit 12.16: Brand as a Moderating Variable

Brand

Enhances or Detracts

Marketing Levers

Relationship Stages

For advertising, brand can enhance awareness

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Branding and Four Key Stages of Customer Relationships

Exploration/ Expansion

Awareness

Commitment

Dissolution

Offline advertising Web price discount Increased number of channel intermediaries Online billboards

Direct mail Targeted price promotions Efficient site structure

Volume discounts Personalized pages Loyalty programs

Discontinue pricing discounts Reduce advertising expenditures Identify departing friends Reduce customer care

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Exhibit 12.17: EBay Vs. Amazon.com Auctions: Key Branding Elements

Exhibit 12.17: EBay Vs. Amazon.com Auctions: Key Branding Elements

Exhibit 12.18: EBay and Amazon.com Auctions: Key Attributes

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding What Is Brand Equity, and How Is It Measured? How Marketing Programs Build Brand Equity The Seven-Step Branding Process Two Case Studies in Online Branding Effects of Brand on the Four Customer Relationship Stages

EBay Example
Conclusion

Branding Conclusion

Branding is fundamentally different from the other marketing activities product, pricing, communication, community and distribution in three ways:

Brands are reflections or outcomes of the firms marketing activities Unlike the other activities, branding is an integral part of every marketing activity and strategy Strong brands can be used to enhance the effectiveness of all other marketing activities

The branding process includes seven steps: 1) clearly define the target audience, 2) understand the target customer, 3) understand the competition, 4) design compelling BrandIntent, 5) identify key leverage points in customer experience, 6) execute the branding strategy and 7) establish feedback systems.

The presence of a strong brand enhances positive marketing activities such that awareness, exploration and commitment are more effectively established.