CHAPTER 1: BRANDS & BRAND MANAGEMENT

1. Learning Objectives:

After reading this chapter, you will be able to:

1. Define “brand,” state how brand differs from a product, and explain what brand equity is.
2. Summarize why brands are important.
3. Explain how branding applies to virtually everything.
4. Describe the main branding challenges and opportunities.
5. Identify the steps in the strategic brand management process.

2. List of Contents: Chapter 1 Brands and Brand Management

1. What Is a Brand?
1.1 Brand Elements
1.2 Brands versus Products
2. Why Do Brands Matter?
2.1 Consumers
2.2 Firms
3. Can Anything Be Branded?
Physical Goods
Services
Retailers and Distributors
Online Products and Services
People and Organizations
Sports, Arts, and Entertainment
Geographic Locations
Ideas and Causes
4. What Are the Strongest Brands?
4.1 List of Top Brands – Global
4.2 List of Top Brands - Bangladesh
5. Branding Challenges and Opportunities
Savvy Customers
Economic Downturns
Brand Proliferation
Media Transformation
Increased Competition
Increased Costs
Greater Accountability
6. The Brand Equity Concept
7. Strategic Brand Management Process
Identifying and Developing Brand Plans
Designing and Implementing Brand Marketing Programs
Measuring and Interpreting Brand Performance
Growing and Sustaining Brand Equity

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3. Description of Contents:

1. What is a brand?

 According to American Marketing Association (AMA), a brand is a “name, term, sign, symbol, or
design, or a combination of them, intended to identify the goods and services of one seller or group of
sellers and to differentiate them from those of competition.”

 The new definition of Brand according to AMA is - "A brand is a customer experience represented by
a collection of images and ideas; often, it refers to a symbol such as a name, logo, slogan, and design
scheme. Brand recognition and other reactions are created by the accumulation of experiences with
the specific product or service, both directly relating to its use, and through the influence of
advertising, design, and media commentary."

 A brand is the summarization of all perceptions, experiences and beliefs associated with a product,
service, or entity that makes it distinct.(Most modern definition)

 Branding is the terminal phase of a process that involves the company's resources and all it's
functions, focusing them on the strategic intent: creating a difference.

 Branding is the act of transforming a product into customer satisfying value-added propositions to
create preferences in one's favor and against rivals.

1.1 Brand Elements:

Brand identities chosen to enhance brand awareness or facilitate the formation of strong, favorable,
and unique brand associations. Such as brand name, logo, symbol, character, packaging, and slogan.
Brand elements are the different components of a brand that identify and differentiate it.

1.2 Brands vs. Products

A product is anything we can offer to a market for attention, acquisition, use, or consumption that might
satisfy a need or want. A product may be a physical good, a service, a retail outlet, a person, an
organization, a place, or even an idea.

 Five Levels of Meaning for a Product

1. The core benefit level is the fundamental need or want that consumers satisfy by consuming the
product or service.

2. The generic product level is a basic version of the product containing only those attributes or
characteristics absolutely necessary for its functioning but with no distinguishing features. This is
basically an essential version of the product that adequately performs the function.

3. The expected product level is a set of attributes or characteristics that buyers normally expect and
agree to when they purchase a product.

4. The augmented product level includes additional product attributes, benefits, or related services that
distinguish the product from competitors.

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5. The potential product level includes all the augmentations and transformations that a product might
ultimately undergo in the future.

Five Levels of Meaning for a Brand

a. Attributes b. Benefits c. Values d. Culture e. Personality f. Users

A brand is therefore more than a product, as it can have dimensions that differentiate it in some way from
other products designed to satisfy the same need. Some brands create competitive advantages with
product performance; other brands create competitive advantages through non-product-related means.

Product = Physical and Nonphysical attributes + Benefits.

Brand = Product + Symbols + Images + Emotions +Feelings + Sound + Sight + Smell + Taste + Touch.

What is a Brand Name? That part of a brand which can be vocalized or utterable. (AMA)

What is a Brand Mark? That part of a brand which can be recognized but is not utterable, such as
symbol, design, or distinctive coloring or lettering. (AMA)

What is a Trademark? That part of brand which is registered and protected by law and which gives
the seller exclusive rights to use it in perpetuity.

2. Why do brands matter?

Since brands are perceptions of all tangible elements, they have:
- Power that can transcend the attributes and characteristics of products, and
- The ability to capture attention and often loyalty far above others.
What functions do brands perform that make them so valuable to marketers?

2.1 Importance of Brands to Consumers

 Identification of the source of the product

 Assignment of responsibility to product maker
 Risk reducer
 Search cost reducer
 Promise, bond, or pact with product maker
 Symbolic device
 Signal of quality

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Reducing the Risks in Product Decisions
Consumers may perceive many different types of risks in buying and consuming a product:
Functional risk—The product does not perform up to expectations.
Physical risk—The product poses a threat to the physical well-being or health of the user.
Financial risk—The product is not worth the price paid.
Social risk—The product results in embarrassment from others.
Psychological risk—The product affects the mental well-being of the user.
Time risk—The failure of the product results in an opportunity cost of finding another satisfactory
product.

2.2 Importance of Brands to Firms

To firms, brands represent extremely valuable pieces of legal property, capable of influencing consumer
behavior, being bought and sold, providing the security of sustained future revenues.

 Identification to simplify handling or tracing

 Legally protecting unique features
 Signal of quality level
 Endowing products with unique associations
 Source of competitive advantage
 Source of financial returns
3. Can everything be branded?
Ultimately a brand is something that resides in the minds of consumers. The key to branding is that
consumers perceive differences among brands in a product category. Even commodities can be branded.
For example - Coffee (Maxwell House), bath soap (Ivory), flour (Gold Medal), beer (Budweiser), salt
(Morton), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), chickens (Perdue), pineapples (Dole),
and even water (Perrier)

What can be branded?

 Physical goods (Coca-Cola, BMW, Nescafe, Sony, Square, Walton)

 Services(Amex, British Airways, Hilton Hotels, Fedex, Bangladesh Biman)

 Retailers and distributors(Tesco, Wal-Mart, Marks & Spencer, Agora)

 Online products and services(Google, Amazon.com, bdjobs)

 People and organizations(Dr. Mohammad Yunus, National Geographic, Dhaka University)

 Sports, arts, and entertainment (Star Wars, ESPN, Worldcup Cricket, Real Madrid).

 Geographic locations(Sundarbans, Cox’s Bazaar, Rangamati, Niagara Falls)

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 Ideas and causes(World Wildlife Fund, Bodle Jao Bodle Dao, Bachte hole jante hobe)

4. Source of Brands Strength

How to build superior Brands? Superior brands must achieve valued discrimination.

Importance of Brand Management The bottom line is that any brand—no matter how strong at one
point in time—is vulnerable, and susceptible to poor brand management.

4.1 Top Ten Global Brands:

Company
1-Yr Value Brand Revenue
Rank Brand Name Brand Value ($bil) Advertising Industry
Change (%) ($bil)
($mil)
1 Apple 124.2 19 170.9 1,100 Technology
2 Microsoft 63.0 11 86.7 2,300 Technology
3 Google 56.6 19 51.4 2,848 Technology
4 Coca-Cola 56.1 2 23.8 3,266 Beverages
5 IBM 47.9 -5 99.8 1,294 Technology
6 McDonald's 39.9 1 89.1 808 Restaurants
7 General Electric 37.1 9 126.0 - Diversified
8 Samsung 35.0 19 209.6 3,818 Technology
9 Toyota 31.3 22 182.2 4,200 Automotive
10 Louis Vuitton 29.9 5 9.7 4,707 Luxury
Sources: Factsheet; Forbes. November 2014

4.2 Top Thirty Bangladeshi Brands:

Rank Brand Name Category Name Rank Brand Name Category Name
Washing
1st Horlicks HFD – RTD 16th Wheel Powder
Powder/Bar/Liquid
Fairness
2nd Fair & Lovely 17th milk vita Milk
Cream/Cream/Lotion
3rd RADHUNI Masala Spice 18th TEER Atta/Maida/Suzi
RUPCHADA Soyabean
4th Edible Oil 19th Symphony Mobile Hand Set
Oil
CLEAR/CLEAR
5th Nokia Mobile Hand Set 20th Shampoo
men
6th Lux Toilet Soap 21th WALTON Refrigerators
7th HARPIC Toilet Cleaner 22th TANG Horlicks – Tang
8th Parachute Hair Oil 23th SINGER Refrigerators
9th Sunsilk Shampoo 24th Fresh Soyabean Oil Edible Oil
10th TEER Soyabean Oil Edible Oil 25th Pepsodent Oral Care
11th 7UP Beverage 26th BUTTERFLY Refrigerators
Mobile Phone Service
12th Maggi Noodles Snacks 27th banglalink
Provider

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13th SONY TV 28th DANO Milk
Mobile Phone Service
14th grameenphone 29th Lifebuoy Toilet Soap
Provider
15th Close-up Oral Care 30th LG Refrigerators
Source: Best Brand Award 2014, Bangladesh Brand Forum

5. Branding Challenges and Opportunities

 Savvy customers: are they are more experienced with marketing, more knowledgeable about how
it works, and more demanding.

 Brand proliferation: a brand name may be identified with a lot of different products with varying
degrees of similarities.

 Media fragmentation: Erosion of traditional ad media

 Increased competition: increasing numbers of competitors form demand side and supply side.

 Increased costs: costs for supporting existing products and introducing new products.

 Greater accountability: better measure of brand of equity and up to date evaluation of brand
performance.

6. The Brand Equity Concept

There is no common viewpoint on how it should be conceptualized and measured. It stresses the
importance of brand role in marketing strategies. Brand Equity: Brand equity is defined in terms of the
marketing effects uniquely attributable to the brand. Brand equity relates to the fact that different
outcomes result in the marketing of a product or service because of its brand name, as compared to if the
same product or service did not have that name.

Basic Principles of Brand and Brand Equity:

 Differences in outcomes arise from “added value” endowed to a product, results to past
marketing activities.
 Value can be created for a brand in many different ways
 Brand equity provides a common denominator for interpreting marketing strategies and
assessing the value of the brand.
 There are different ways to exploit the value of a brand to benefit the firm through greater
process, lower cost or both.

Competitive advantages of brand equity:

a. Reduce marketing cost b. Trade leverage c. Can charge a higher price

d. Can easily launch brand extensions e. Can take some price competition.

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 Brand Loyalty is the bias, behavioral response, expressed over time, by some decision-making unit,
with respect to one or more alternatives, and is a function of psychological process. Develop a 'loyal
customer base' - the essence of brand building.

7. Strategic Brand Management

It involves the design and implementation of marketing programs and activities to build, measure, and
manage brand equity.

 The Strategic Brand Management Process is defined as involving four main steps:

1. Identifying and establishing brand positioning and values

2. Planning and implementing brand marketing programs

3. Measuring and interpreting brand performance

4. Growing and sustaining brand equity

Strategic Brand Management Process

1. Identifying and establishing brand positioning and values:

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 Brand Positioning: Act of designing the company’s offer and image so that it occupies a distinct and
valued place in the target customer’s mind.
 Mental Map: A visual depiction of the different types of associations linked to the brand in the mind
of the consumers.
 Competitive frame of Reference: Creating brand superiority in the consumer’s mind
 Point-of-Parity: Attributes that are not unique to the brand but may be shared with other brands.
 Point-of-difference: Attributes or benefits that consumers strongly associate with a brand, positively
evaluate and believe they could not find it in other brands.
 Core Brand Associations: The subset of associations (attributes or benefits) that best characterize a
brand.
 Brand Mantra: A brand essence or core brand promise, a short three-to-five words expression of the
most important aspects of a brand.

2. Planning and implementing brand marketing programs:

 Choosing brand elements and mix and matched them.

 Integrating the brand into marketing activities and supporting marketing program,
 Leveraging secondary associations.

3. Measuring and interpreting brand performance:

Brand Value Chain: Tracing the value creation process for brads, to better understand the financial
impact of brand marketing expenditures and involvements.

Brand Audit: This is a comprehensive examination of a brand to assess its health, uncover its sources of
equity and suggest ways to improve and leverage the equity.

Brand Equity Measurement System: A set of research procedures designed to provide timely, accurate
and actionable information for marketers for taking short term tactical decision and long term strategic
decision.

4. Growing and sustaining brand equity:

 Defining the branding strategy

o Brand Product Matrix: A geographical representation of all the brands and products sold by
the firm.
o Brand Hierarchy: Displays the number and nature of common and distinctive brand
components across the firm’s product
o Brand Portfolio: The set of all brands and brand lines that a particular firm offers to a
particular buyer.
 Managing brand equity over time
 Managing brand equity over geographic boundaries, cultures and marketing segments
o Brand Expansion Strategies.
o Brand Reinforcement and Revitalization.

Case

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Case 1.1: Branding Commodities

A commodity is a product so basic that it cannot be physically differentiated from competitors in the
minds of consumers. Over the years, a number of products that at one time were seen as essentially
commodities have become highly differentiated as strong brands have emerged in the category. Some
notable examples are coffee (Maxwell House), bath soap (Ivory), flour (Gold Medal), beer (Budweiser),
salt (Morton), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), chickens (Perdue), pineapples
(Dole), and even water (Perrier). These products became branded in various ways. The key success factor
in each case, however, was that consumers became convinced that all the product offerings in the
category were not the same and that meaningful differences existed. In some instances, such as with
produce, marketers convinced consumers that a product was not a commodity and could actually vary
appreciably in quality. In these cases, the brand was seen as ensuring uniformly high quality in the
product category on which consumers could depend. In other cases, like Perrier bottled mineral water,
because product differences were virtually nonexistent, brands have been created by image or other non-
product-related considerations.
One of the best examples of branding a commodity in this fashion is diamonds. De Beers Group added
the phrase “A Diamond Is Forever” as the tagline in its ongoing ad campaign in 1948. The diamond
supplier, which was founded in 1888 and sells about 60 percent of the world’s rough diamonds, wanted to
attach more emotion and symbolic meaning to the purchase of diamond jewelry. “A Diamond Is Forever”
became one of the most recognized slogans in advertising and helped fuel a diamond jewelry industry
that’s now worth nearly $25 billion per year in the United States alone. After years of successful
campaigns that helped generate buzz for the overall diamond industry, De Beers began to focus on its
proprietary brands. Its 2009 campaign highlighted its new Everlon line. Partly in reaction to the recession,
De Beers’s marketing also began to focus on the long-term value and staying power of diamonds; new
campaigns included the slogans “Fewer Better Things” and “Here Today, Here Tomorrow.”

Source: Theodore Levitt, “Marketing Success Through Differentiation— of Anything,” Harvard Business
Review (January–February 1980): 83–91; Sandra O’Loughlin, “Sparkler on the Other Hand,” Brandweek,
19 April 2004; Blythe Yee, “Ads Remind Women They Have Two Hands,” Wall Street Journal, 14
August 2003; Lauren Weber, “De Beers to Open First U.S. Retail Store,” Newsday, 22 June 2005; “De
Beers Will Double Ad Spending,” MediaPost, 17 November 2008.

Case 1.2: Place Branding

Branding is not limited to vacation destinations. Countries, states, and cities large and small are beginning
to brand their respective images as they try to draw visitors or encourage relocation. Some notable early
examples of place branding include “Virginia Is for Lovers” and “Shrimp on the Barbie” (Australia).Now
virtually every physical location, area, or region considers place branding. More recent examples include
Santa Rosa’s new slogan “Place of Plenty” and the “Cleveland Plus” campaign. The San Diego
Convention and Visitors Bureau ran an integrated campaign, titled “Happy Happens,” in 2009. Las Vegas
ran its hugely successful “What Happens Here, Stays Here” campaign beginning in 2003. The ads were
meant to sell Las Vegas as an experience. In 2008, the city took a different route, selling Vegas
differently and in more practical terms in light of the economy. The “What Happens Here” ads returned in
2009, however, when marketing research showed that consumers missed them. In 2010, the Las Vegas
Convention and Visitors Authority had an $86 million advertising campaign budget, larger than the city’s
top competitors’ budgets combined. Branding countries to increase appeal to tourists is also a growing
phenomenon. Some recent success stories include Spain’s use of a logo designed by Spanish artist Joan
Miró, the “Incredible India” campaign, and New Zealand’s marketing of itself in relation to the Lord of
the Rings movie franchise. Some other tourist slogans include “No Artificial Ingredients” for Costa Rica
and “Mother Nature’s Best-Kept Secret” for Belize. Future Brand, a brand consultancy and research

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company, ranks countries on the strengths of their respective brands. In 2010, it deemed the top five
country brands to be Canada, Australia, New Zealand, the United States, and Switzerland.

Source: Roger Yu, “Cities Use Destination Branding to Lure Tourists,” USA Today, 12 February 2010;
Yana Polikarpov, “Visitors Bureau Lures Tourists to ‘Happy’ San Diego,” Brandweek, 23 April 2009;
Liz Benston, “Will Vegas Advertising That Worked Before, Work Again?,” Las Vegas Sun, 27
September 2009; Sean O’Neill, “Careful with Those Tourist Slogans,” Budget Travel, 24 September
2009; John Cook, “Packaging a Nation,” Travel + Leisure, January 2007.

Questions:

1. a) What do brands mean to you? What are your favorite brands and why? Check to see how your
perceptions of brands might differ from those of others. b) Mention some of the strongest brand
of Bangladesh? Why do you think they are strong?

2. a) Can you think of yourself as a brand? What do you do to “brand” yourself? b) According to
Bangladesh Brand Forum, Horlicks, Fair & Lovely, RADHUNI Masala, RUPCHADA Soyabean
Oil and Nokia are the Top Brands in Bangladeshi for 2014. What do you think of this list? Do
you agree with the rankings? Why or why not?

3. a) What do you think of the new branding challenges and opportunities that were listed in the
chapter? Can you think of any other issues? b) Pick an example of a branded product from
Bangladesh, in each of the categories provided (physical good, services, retailers and distributors,
person, and organization, place, and idea) and describe how it is a brand.

4. In a country like Bangladesh, do you consider branding a technology as challenge or opportunity?

Explain the reasons behind your answer?

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