BRANDS AND BRAND

EQUITY

MOHIT S. KELKAR
PGDM-Exec
2014-15
K. J. Somaiya Institute Of Management Studies &
Research

CONTENTS

Introduction

Strategic Importance and Significance of Branding

Strategies and Tactics for Building, Leveraging, an

Defending Strong Brands

Challenges in Brand Management

Conclusion

INTRODUCTION

Branding Logo, Brand Name, Symbol,

Character, Tagline
Branding elements important for identifying &
differentiating a product/service but part of
overall branding strategy
American Marketing Association defines Brand
as
a name, term, sign, symbol, or
design, or a combination of them, intended to
identify goods & services of one seller or group
of sellers and to differentiate them from those
of competitors
Brand purposes : Mainly informational, cognitive

INTRODUCTION

Globalization, advance technology & social

media contribute towards global brand
Changing market forces & emergence of
global brands makes branding one of the
most important aspects of business
strategy
Brands companys most valuable asset
Tata Motors purchasing Jaguar & Range
Rover from Ford Motor Company
Purchase price $2.6 billion far exceeded
the value of the factories, raw material

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING

Good branding Buyers confidence in purchase,

cleaner interpretation, easier processing of info
leading to higher satisfaction
Corporate perspective Increases effectiveness
of marketing, enhances brand loyalty, allows
higher prices & margins, provides greater
leverage with distribution channels, creates
significant competitive advantage
Name, logo & design are markers of the brand
Without product history, markers are empty
Markers such as Starbucks mermaid, bitten
Apple, Nike swoosh are rife with customer
experiences, ads, media reviews, word of mouth

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING

Over time, ideas about the product

accumulate and brand markers get
meaning which creates a brand culture
The
Firm

Brand Stories

Brand Culture

Shared, taken-for(Product related activities)

granted brand
(Film & TV, news events)
stories,
Brand Stories
and
Stories
associations

Influenc
ers

Brand Stories

Popular
Culture
Brand

Custome
rs

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING

These stories, images & associations become

so continually reinforced & conventional and
are treated as fact
This creates tangible benefits in the form of
brand equity & brand value
Brand equity Set of assets linked to a brands
name that adds to or subtracts from the value
of the product/service
Brand equity can be positive or negative
Positive brand equity causes customers to react
more favourably to a product/service after
brand identification.

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING
Assets that are component part of Brands Equity :(Categorized by David Aaker)
1) Brand awareness Familiarity
2) Perceived quality Sense of quality
3) Brand associations Subjective & emotional
associations which form brand personality
4) Brand loyalty Repeat buying, word of mouth.
Strongest measure of brand equity e.g. Apple iPhone
5) Other brand assets Patents, trademaks
Creating positive brand equity is the goal of brand
management

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING

Building an emotional connection between consumers &

products is essential to strong brand equity
BrandDynamics Pyramid(BrandZ group) :-

Nothing else beats it

Strong Relation

Bonding

Expense
Whats better than others?

Advantage

Can it deliver?

Performance
Does it offer something?

Do I know about it?

Weak Relation

Low Expense

Relevance
Presence

High

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING

Brand Resonance Pyramid (Kevin Lane

Keller):-

Stages of Brand Development

Branding Objective at

Brand Building
Blocks

Each Stage

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING
Brand Value is a quantitative measurement of the financial
value of a brand
Firms such as Interbrand, BrandZ & Brand Finance have
developed models for calculating the brand value
Interbrands Methodology :1) Financial performance of the branded products
2)Role of the brand in purchase decision process as measured by
Interbrands Role Brand Index(RBI) which is derived from primary
research, review of historic roles of the brand for companies in
that industry or expert panel assessment
3) Strength of the brand/Ability to create loyalty measured on 0
to 100 scale based on following 10 key factors :Clarity, Commitment, Protection, Responsiveness, Authenticity,
Relevance, Differentiation, Consistency, Presence &
Understanding

STRATEGIC IMPORTANCE & SIGNIFICANCE

OF BRANDING
BrandZ Methodology :Its based on what it believes the worlds most
comprehensive & reliable collection of brand equity
information available, containing data from more than 1
million consumers in 30 countries
It uses 4 step method :1) Calculates amount of earnings for a particular brand
2) Calculates financial value by predicting future earnings
3) Determines brand contribution by assessing brands
uniqueness & its ability to stand out, generate desire &
cultivate loyalty
4) Uses formula involving values from Step 1 to 3 to
calculate final brand value

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Creating & Building a Strong Brand :
Basics :*A family, master or corporate brand is typically a
single brand name that identifies several related
products
E.g. Honda Bikes, Cars, Lawn Movers
*Manufacturers also market products under individual
brands uniquely identifying the product
E.g. Proctor & Gamble marketing individual brands as
Tide, Charmin, Duracell etc.
*Some prefer both corporate as well individual brands
E.g. Toyota Branded automobiles but also Lexus, Scion

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Basics : Parent brand can create Brand Extensions
leveraging the association with parent brand
E.g. Mars did with M&Ms, Peanut M&M, Pretzel
M&M
Products can also be co-branded
E.g. DLF IPL on YouTube, NDTV GOOD TIMES
The entirety of companys products offerings
is often called its Product Mix or Product
Portfolio

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Brand Elements :Brand name plays a central role in establishing
brand but brand elements such as the brand mark
or logo and the tagline or slogan play an equally
important role
Organizations which do it well integrate all the
elements in branding
E.g. Nike, Iconic swoosh logo, Just Do It slogan
and company names after Greek goddess of
Victory convey characteristics as speed, strength &
empowerment perfect for sporting goods company

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
6 criteria suggested by Kotler & Keller for choosing
Brand Elements:1)Memorable : Easy to say, remember e.g. Tide, Dove
2)Meaningful : Purpose / type of product e.g. Caress soap
3)Likable : Positive feeling, aesthetically pleasing
4)Transferable : Does it add to brand equity across globe
5)Adaptable : Will it be dated quickly?
6)Protectable : How legally defensible are the brand
elements? Can you trademark them? When class of
products becomes widely known as original brand name
of product brand name can become generic & original
owner can lose trademark e.g. Nylon, Aspirin

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Unique packaging also plays a vital role in
branding. Functional as well as Promotional.
e.g. Coca-Cola, Heinz can be identified without
labels
Brand Personality The mix of human traits
that we can attribute to a particular brand
Consumers are likely to choose brands
matching their personality
Consumers dont choose brands consistent with
their own actual self-concept but also based on
their ideal self-concept
Core brand message communicating essence

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Mike Moser guidelines on Brand Message :*Is the message simple & clear enough?
*Does it differentiate the brand in the marketplace?
*Is it true? E.g.7-UP : The Uncola differs greatly
from cola
*Is it relevant? The key to memorability is relevance
*Is it consistent with the companys core brand
values?
*Can you be the first to say it?
E.g. Apples Think different is a good example of a
clear, differentiating, true, relevant message

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Branding & Social Media :Social media has completely changed how consumers
engage with brands and transformed the economics of
marketing
70-90% of marketing funding goes to promotions hitting
consumers at consider & buy stages, yet consumers
are more susceptible to influence post purchase at
evaluate & enjoy stages
High promotions but no online discussion means brand
unlikely to survive the early stages of purchase decision
Neilsen reports 90% consumers trust recommendations
from other consumers only 56% trust brand advertising

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Branding & Social Media :Despite these facts marketing spending in social
media is low because of following factors
according to Sunil Gupta :
*Cost & Time Too many creative people & too
much time
*Knowledge Risk Senior managers less familiar
so avoid
*Incentive Structure Ad firms with traditional
media experts have strong incentives to maintain
the current structure

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands

Brand Communities :Ardent consumers of particular brands can

connect easily with like minded people via the
Internet. Such online communities provide a
forum to communicate with others who share
same interest in product
Brand communities tend to buy more, remain
loyal & reduce marketing costs
Such communities are difficult to control as
consumers take these communities in their
hands
Results are not always favourable

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands

Growing & Maintaining Strong Brands :

Profit margins are generally lesser at the launch as
promotional spending is very high
A successfully launched product will likely demonstrate
increasing profit margins throughout the growth phase and
contribute significantly to the earnings growth
When product reaches its peak growth phase, it is considered
a mature brand
Transferability is a key feature of a strong brand. Company
tries to capitalize on strong brands through extensions
To create brand extensions of a strong brand they should go
with brands image e.g. Harley Davidson perfume
With Strong transferable brands global markets can be
penetrated

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Defending Your Brand :
Throughout its life cycle, a brand faces threats on a
number of levels & needs to be defended :
1)Economic downturn can affect brand leadership
2)Counterfeiting It can tarnish the reputation of the
real brand
3)Direct competition is the most commonly encountered
threat to a brand and certainly the most difficult to deal
with. Recent studies show that length of times brands
dominate their category has fallen down significantly
4)With constant measurement & engineering across the
entire marketing mix brand leadership can be
maintained

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands

Measuring Brand Success :

Advertising agency Young & Rubicam (Y&R)
Model of Brand Measurement called
BrandAsset Valuator(BAV)
Strength of a brand is measured 4 pillars :
Differentiation, Relevance, Esteem &
Knowledge

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Measuring Brand Success :
Kevin Keller developed a Brand Report Card. Keller recommends that
companies rate their brands on 1 to 10 scale on each of the following
attributes :1)Ability to deliver benefits
2)Relevance
3)Value Perception Nature, premium vs household
4)Positioning Similarities & differences from competitors
5)Consistency No conflicting messages by marketing
6)Brand Architecture All brands in portfolio work together
7)Brand Equity All marketing channels communicate same message
about the brand solidifying brand identity
8)Brand Meaning Consumers perceptions are known
9)Internal Support Building & maintaining brand awareness
10)Measuring Brand Equity Formal brand equity management system

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands

Managing Declining or Dying Brands :

Business Profits from Brands Smaller than 80/20 rule :
80-90% of profits come
from fewer than 20% of the brand an organisation sells
Many brands are not performing
David Aaker says The revitalization of a brand is
usually less costly & risky than introducing a new
brand
Its can be true for product which is relevant & if its
brand awareness & brand equity is high
Nirmalya Kumar suggests a more systematic method of
brand & portfolio analyis

Strategies & Tactics for Building,

Leveraging & Defending Strong Brands
Managing Declining or Dying Brands :
Nirmalya Kumars Four Step Process
1)Making the case Brand audit
2)Pruning the Portfolio Portfolio or segment
approach
3)Liquidating Brands Merging, Selling brand
assets, Milking brands, Eliminating brands
4) Growing core brands When non
performing brands are deleted invest in
growth of remaining brands

Challenges in Brand
Management

Traditional VS Contemporary Approaches

Traditional approaches still apply but new market
dynamics of customer centricity & social media needs to
be incorporated
Theory VS Practice
Consumer behaviour can be unpredictable
Corporate VS Consumer Value
Customers value enhanced experience but corporates
value price premiums
Short Term VS Long Term Vision
Due to marketing myopia long term goals are sacrificed
Maintaining Consistency VS Relevancy
In dynamic & constantly changing world keeping
balance is difficult

CONCLUSION

Branding clearly goes far beyond a simple

trademark or a logo
New technology & tools may reduce cost of
developing & executing a brand strategy
Irrespective of cost integrating a branding
strategy into an organizations overall
strategy remains crucial for ensuring brand
value endurance
Successful brand management requires
careful inclusion of all the elements while also
balancing the challenges presented

THANK
YOU
MOHIT S. KELKAR
PGDM-Exec 2014-15
mohit.kelkar@somaiyya.ed
u