SYLLABI-BOOK MAPPING TABLE

Brand Management
Syllabi
1. Introduction to Branding Service Branding

Mapping in Book
Unit 1: Introduction to Branding
Service Branding (Pages 3-11)

2 Brand Identity

Unit 2: Brand Identity (Pages 13-18)

*

3. Identity SourcesSymbols, Logos and

Trademarks
4. Advertising and Branding
5. Brand Creation Principles

7. Brand

6. Time Effects
Extension

8.' Relationship of Brand and Product

Unit 3: Identity SourcesSymbols,

Logos and Trademarks (Pages 19-26)
Unit 4: Advertising and Branding
(Pages 27-46)
Unit 5: Brand Creation Principles
(Pages 47-57)
Unit 6: Time Effects (Pages 59-71)

Unit 7: Brand Extension (Pages 73-86)

Unit 8: Relationship of Brand and
Product (Pages 87-106)

 . -

.V -

CONTENTS

UNIT 1 INTRODUCTION TO BRANDING

SERVICE BRANDING

UNIT 2 BRAND IDENTITY

UNIT 3 IDENTITY SOURCESSYMBOLS, LOGOS AND
TRADEMARKS
UNIT 4 ADVERTISING AND BRANDING
UNIT 5 BRAND CREATION PRINCIPLES
UNIT 6 TIME EFFECTS
UNIT 7 BRAND EXTENSION
UNIT 8 RELATIONSHIP OF BRAND AND PRODUCT
INDIAN INSIGHT
S

3-11
13-18

19-26
27-46
47-57
59-71
73-86
87-106

107-119

4 Introduction to Branding Service Branding

INTRODUCTION
i

A brand is not a name, term, sign, symbol or combination of these. A brand is an assurance or guarantee
that the product will perform as the customer thinks it should, which means that the brand has already
shaped the expectations of the customer about itself. The brand embodies some values that remain
consistent over a period of time, and the customer expects these values to be delivered to him during
eaeh encounter he lias with the brand. Therefore, companies must realize that building a brand is not a
short- term activity. Consistency is the most valued quality of a brand. It takes a long time to build a
consistent brand image, and it is extremely hard to sustain that image. After a period of consistent
performance, the brand is in grained in the customer's memory as an accumulation of associations.

|
motion picture. This can only happen if the brand has lived upto its values for a long time. Strong
brands just cannot be created overnight. Human behaviour is inherently distrustful. A brand has
to live up to its promises consistently before customers start taking its values and attributes for
granted.
The strength of the brand is directly proportional to the expectations of the customer, Therefore,

the first task of branding is to raise customer expectations about the product. The communication
efforts of the company do raise expectations and thus, contribute to branding, but personal usage
of the product by the customer or recommendations from a personal source are decisive sources
for raising expectations. It means that ensuring that the product performs well is the most
important branding exercise. However, companies have to exercise some caution. In an effort to
raise expectations about the brand, a company may exaggerate the brand in its communications
effort and customers can form exaggerated expectations from the brand. If the brand does not
deliver the heightened expectations of the customers, customers are disappointed and they can
tarnish the image of the brand by talking badly about it. Such a brand wilt find it difficult to be
accepted until the market forgets the fiasco. Any renewed bout of advertising will only enhance
the cynicism of the customers towards the brand. The company should wait for a considerable
period before renewing the effort to arouse expectations among customers again.
However, if the company is conservative in making claims, customer expectations will not be
aroused and they will not buy the brand. It is a delicate balance, however, companies will have to
manage it. The communication efforts of the company should arouse just enough expectations
among customers that they become interested in buying the brand. In addition, when the brand
delivers more than what the customers expected, they spread positive word-of-mouth, thus,
starting the spiral of 'moderate expectation-superior delivery. which will ultimately create a
strong brand.

One interaction alone cannot build or tarnish the brand image, unless it is particularly strong. The
whole idea of giving a consistent performance is that if once in a while the brand does not
perform up to the expectations, customers do not start feeling negatively about the brand. Customers
should be willing to give the benefit of doubt to the brand if its performance slips once in a while.
It is very important that a brand owns up to the one-time lackluster performance and promises to
make amends. A brand which chooses to remain in a state of denial or ignorance about its bad
performance gives the signal that the brand no more cares about living the values embodied in the
brand, and nor does it care about customer sentiments. It is usually useless arguing against
customers. Customers will interpret a brands performance in their own way and the companys
interpretation of the situation has no relevance to the customer. Instead of arguing against a
customers interpretations of the brands performance, a company should try to understand the
process by which the customer arrived at the interpretation. This will often include an impartial
assessment of the brands performance and the customers existential situation in which he is
using the brand. A customer should never be allowed to have a perception about the brand, which
is different from the perception that the company wants its customers to have. A companys first
task is managing the perceptions of customers about the brand and not let customers develop
their own perception. Every activity of the company should be assessed in terms of its influence
on the customers perception of the brand.

UNIT - 1

INTRODUCTION TO BRANDING
SERVICE BRANDING____________________________
UNIT OBJECTIVES

The purpose of branding

The role of brand in a particular business

The essential attributes related to a brand

The stages in building a successful business

brand

1.1 INTRODUCTION
Branding is the process by which companies distinguish their product offerings from competition.
Marketers develop their products into brands, which help to create a unique position in the minds of
customers. A brand is created by developing a distinctive name, package and design, and by arousing
customer expectations about the offering. By developing an individual identity', branding permits customers
to develop associations, such as prestige and economy, with the brand, Buying a brand reduces the risk
of the customer and eases his purchase decisions. Branding shapes customer perceptions about the
product. Brand superiority leads to higher sales, the ability to charge price premiums and the pow'er to
resist distribution power.1 2
|:
.

1.2 UNDERSTANDING A BRAND

Branding is an indispensable activity of any organization. However, it is imperative for
organizations
to remember that branding is only an outcome of various other activities in an organization. A
brand is an external manifestation of what happens inside the organization, ft is important to align
all activities in an organization, and behaviours of all employees towards the values embodied in
the brand. Many companies believe that branding only comprises the product and the
communication. Hence, it is believed that branding is the responsibility of the marketing department
only. It is the duty of every department as well as the individuals to shape the perception of the
customers in sync with the desired brand values. Every department and individual of the company
has to identify as to how he will contribute in shaping the perceplion of the customers. Branding
is the sole prerogative of the marketing department.
1 Chematony, L. De, Formulating Brand Strategy, European Management Journal (1991), 194-200.
2 Ehrenberg, A. S. C G J. Goodhardt andT. P. Barwise, Double Jeopardy Revisited, Journal of Marketing (1990),
82-91.

1.3 The sole purpose of branding is to create differentiation and the brand name by itself cannot act
as a differentiator. Die brand as a label merely acts as a distinguished name to convey this
differentiation. Therefore, the brand is the culmination of all activities of the organization. The
brand name conveys the set of values and attributes embodied in the brand. As soon as a customer
hears the brand name, the attributes and values of the brand should conjure before his eyes like
aBRAND ATTRIBUTES
A successful brand has several essential attributes. 3 The presence of most of these attributes can guarantee
long-term eminence of the brand.
The attributes of the worlds best brands are as follows:
The brand provides benefits that customers desire. Customers buy a brand because of its attributes,
its image, the sendees it provides and many other tangible and intangible factors, which create an
attractive whole. Sometimes customers cannot even \crbalize what they actually want. They feel
the brand is just right for them. Starbucks customers get a fulfilling experience through the
aroma of the coffee beans, the good taste of the coffee, how the products are displayed, the
interiors, the background music and the fresh and clean tables.
There is a relevance of the brand. Brand equity comprises of the actual product quality or service
and many other intangibles. Those intangibles arc:
o Imageries regarding the kind of person using the brand
o The circumstances under which the brand is used
o The personality of the brand (conventional, genuine, stimulating, competent,
strong)
o The protective and warm feeling a brand wants its customers to have
o Most importantly, the committed, casual and seasoned relationship it wants to
have with its
customers
Powerful brands are always on the leading edge in the product ground and tend to
twist
their
intangibles to remain contemporary. Gillette engages in advanced technology, and
its
famous
ad,
The best a man can get reflects the contemporary times. Besides advertising, the
perception
of
the customer on the company and the companys participation in social causes
reflects
on
the
brands force as well. When they promote social causes, it always helps.
A consumers perception of value forms the basis of the pricing strategy. The
company
needs
to
have the right combination of product design, quality, price and features. At the
cost
of
necessary
brand-building activities, value pricing should not be adopted. There is nothing
intrinsically
right
or wrong with low or high price. Whatever price the company decides to charge,
it
should
be
able to demonstrate that customers are deriving value from it m proportion to the
price
they
are
paying.
The brand is properly positioned. Successful brands create a differential advantage through their
brands by creating points of difference. This gives them a competitive advantage. At the same
time, they make points of similarity where competition is trying to get an upper hand. There are
similarities and dissimilarities among competing brands in certain ways. Sonys product superiority
and competitors similar price levels are added advantages for the company. When a brand spans
many product categories, the task becomes difficult. What may work for one category of the
same brand may not work for another category.

3 Keller, Kevin Lane, Harvard Business Review (2000), 147.

 The brand is steady and reliable. To maintain a powerful brand, it is important to strike a correct
balance between continuity in marketing activities and the type of modifications required stays
relevant. A spate of marketing efforts that confuse customers by sending conflicting messages
should not muddle the brands image.The hierarchy and brand portfolio should be sensible.
Companies
cater
to
diverse
segments
with
diverse brands. A particular product line is repeatedly sold under diverse brand names, and diverse
brand names have different powers within a company. Gaps brand portfolio gives great market
coverage with least chances of an overlap, it designed the Banana Republic brand to serve the
upper end, while the basic style-and-quality part is covered by the core Gap brand, and the mass
market is served by Old Navy. Every brand comes with a distinct image and its own source of
equity. The overall equity of the portfolio requires contribution from every level of the hierarchy
of the brand through their individual effort to bring consumer awareness of the different products
and promote good relationships with them. There should be boundaries for each brand. A brand
should not stretch too much, and nor should two brands in the same portfolio overlap.
The brand engages in a complete range of marketing activities to construct equity. Powerful
brands combine different trademarked marketing elements like symbols, logos, and signage for
performing brand linked functions. These functions help to enhance and reinforce the customers
awareness of the brand or the brand image and provide protection both competitively and legally
to the brand. Marketing activities play specific roles in building brand equity. Advertising helps in
creating demand among the consumer for a product. Trade promotions are designed to push
products through distribution. A brand must utilize all its resources so that the essence of the
brand remains uniform in all its activities.
A brand managers role is to understand the meaning of the brand to its customers. Powerful
brands have managers w'ho understand the importance of their brand image in totality, i.e.,
beliefs, perceptions, behaviours and attitudes that the customers associate with the brand. Bic
was very successful with its non-refillable ballpoint pens, disposable cigarette lighters and
disposable
razors but when the same strategy was used for marketing perfumes, the effort was unsuccessful.
Bic had developed a utilitarian and impersonal image with its earlier offers, which did not gel well
with the marketing of perfumes. In contrast, Gillette uses its brand name for its range of mens
shaving products, the Braun brand name for electric appliances, and Oral-B for its oral care
products.
A brand which is persistent over the long run is highly supported. A solid foundation for brand
equity ensures an awareness and associations with the brand which is strong and unique in their
mind. Shortcuts should be avoided by managers. They should follow all the brand building
exercises starting from those, which will achieve the required level of awareness about the brand
to those, which will build an image.
,
A company monitors various sources of brand equity. It should periodically audit its brands. The
brand audit assesses the fitness of its brand. Details of internal description of how the brand was
marketed along with a careful external investigation, with the help of focus groups and consumer
research, about what the brand has or is doing and what does it mean to consumers is the core
job of the brand audit. To uncover the true meaning of brand, it is important to find the customers
perceptions and beliefs. This helps in revealing the areas where corporate and consumer views
contradict. It paves a path for the company to refine or redirect the companys branding endeavours.

1.4 To build a powerful brand, a marketer should take full advantage of all the brand characteristics.
However, in practice, it is not easy, because at times when a companys focus is on improving one
feature, the others may get ignored. The idea should be to know the brands performance on all the
points and then assess any marketing activity from all probable angles. SERVICE

BRANDING

It is a travesty that while two-thirds of the GDP in developed countries is accounted for by the service
sector, less than one-fourth of top sixty brands are service brands. This is because the brand managers
for service brands are steeped deeply in practices of branding cf products and arc merely tweaking the
standard brand building exercises to build service brands. This has not proved to be a successful
endeavour in promoting their brands.
The unique characteristics of any service should be capitalized to develop successful service
brands. These include intangibility, inseparability of production and consumption, heterogeneous quality
and perishability. The problem of intangibility can be overcome by projecting the company as a brand. A
definite corporate identity will evoke the desired functional and emotional values. Inseparability of
production and consumption can be converted to an opportunity by making customers co-producers of
value and thus, customizing the brand to suit their needs. To reduce heterogeneity of services, the
service provider should recruit staff whose values align with those of the brand, and then reinforce
these values through symbols and frequent training. The issue of perishability affects brands in sectors
such as pensions where brands are bought in advance of the benefit. The tlireat of a competitor luring
away customers before the service, i.e., before the pension can be delivered, can be countered by
building a reliable reputation.
Sendee brands represent intangibility. Though service companies like airlines, schools, hotels,
etc., cannot function without major tangibles such as planes, rooms and food, the delivery of
service is about the experience of the customer at the interface with the sendee provider.
This service encounter is dependent upon the attitudes and motivation of the service
organizations staff, irrespective of the tangible resources employed by the service organization.
Service brands therefore, depend critically upon the understanding of and commitment to the
brand and the brand values by the staff of the service organization. For example, friendly and
helpful staff is the embodiment of an airline company. It is this living embodiment and
enactment
of the brand that service branding must ensure.
A service brand is a promise. However, if a promise is to be appreciated, the expectation and
delivery must match. Most of the time, the promise is fulfilled by the staff of the service
organization. Service branding should lay emphasis on internal communication, ensuring that
staff understands the brands promise and consistently delivers it. Therefore, service brands
should not just focus on customers but also on the staff of the service organization.
The value delivery system for service brands is externally visible. It is subject to quality
variability and it involves customers as active participants. Customers perception about service
brands is formed by what they get, i.e., outcome and how they get it, i.e., process. In some
sectors like financial services, brand activity is focussed on the outcome and there is little
scope of differentiation in such services. However, in other sectors like the hospitality industry,
the emphasis is more on the way things are done internally. The staff recognizes that interaction
with customers is important and this interaction can form a basis for sustainable differentiation.
Greater industrialization of service processes, i.e., replacing human activities with technology,
reduces heterogeneity of quality. Technology takes precedence over employees and the service
process is designed to give little discretion to employees. Companies like McDonalds assess
where technology can replace routine human tasks. Wholesale replacement of staff by
technology can demotivate good employees and they will be unable to respond to custoiners
unique requests. Competitive advantage can be gained by releasing staff from routine tasks to
concentrate on non-routine problems.Employees will perform better if they are aware of, and are
aligned
with
their
organizations
values. Successful service brands have clear values, which employees and customers
understand. It is important that employees understand as to how these values affect their

jobs. This understanding reduces employee stress as to what they should do in a particular
situation and increases their commitment to delivering the service brand. Good service brands
rely on internal communication programmes to ensure consistency of delivery regardless of
customers point of contact. Recruiting staff with the right values, and having well designed
induction and training programmes become very crucial in building employee commitment to
the service brand.
For service brands, a great trap is the exclusive focus on category values rather than on
unique brand values. This misplaced focus on category values results in lack of clear
differentiation between service brands. Thus, most personal care product retailers will focus
on the category value of beauty and most banks will focus on the category value of security.
A service organizations culture and heritage can give a genuine basis for clear positioning of
service brands. Body Shop has its unique value of respecting the environment rather than the
category value of beauty, which was imbibed from its culture and heritage.
Customers good experiences with a service brand are the basis of a relationship between the
two. Strong brands savour and respect customer relationships. The unique characteristic of
the service brand, like the genuine warmth experienced by customers at the J.W. Marriott,
cements such customer relationships. The absence of strong service brands is indicative of
the fact that such customer relationships based on customers' experience and nurtured by
the unique features of the service brand are missing. The behaviour of employees should
encourage customers to develop relationships with a service brand. Therefore, recruitment
of employees whose values align with those of the service brand becomes very important.
Customers have a high frequency of contact and a deep experience with some service brands.
Such service brands should focus on the experience of the customers. Where customers
have a low frequency of contact and a superficial experience with service brands, such
brands should focus on the quality of contact. The extent of involvement of customers in the
experience is also important. In services where the extent of involvement of customers in the
experience is high, interactions between customers and employees of the service organization
are important. The duration of consumption of service is also important. In services like
restaurants, tire service is consumed at tire time of delivery. In services like education and
health care, the service is consumed over a period of time. Regular training of employees will
ensure consistency.

Customers lake time to form preferences about services. Service brands are experiences and
are assessed over longer periods. Consistent delivery, over an extended period becomes
crucial. Some service brands like restaurants where the brand is repeatedly purchased, oneoff relationships exist only for short periods. A worsening service will result in customers not
buying the service next time they require the product or service. Customers' attitudes and
their purchasing behaviour are aligned for such services. Such service brands know the
strength of their brands by tracking customers purchase behaviour. Some other service
brands like banks result in long-term relationships, where once they have bought the brand,
they do not need to review the purchase decision. A worsening service will change the
customers attitude but they cannot discontinue availing the service immediately. For such
services there is a disconnect between the customers attitude and their purchasing
behaviour.Such service brands should track the customers attitude rather than their purchase
behaviour.
If they focus on the customers purchase behaviour they will mistakenly believe that their
brand is still appreciated by the customers. They assume that as the customers do not review
their brand choice decisions, they arc satisfied.
Representing services, and hence, advertising them is difficult because there is a lack of
physical reality about them, i e. they are intangible. Service brands values have to be identified
and these values have to be represented through symbols The advertisement has to ere ate a
picture of what the brand stands for through symbols. Employees build relationships with
customers around the symbol It can also be done by physical evidence. Customers will
re call the benefits of the serv ice brand by the physical e\ idences like the employees uniforms
and their behaviour However, as more and more service organizations brand themselves
customers are becoming familiar with the pro lises of service 1 rands Service brands will
have to shift attention from promises to the processes by which customers will experience
the promise. This is important because some services like pensions and insurance cannot be
evaluated until long after the purchase has been made. Regular contact with customers and
building trust in the bt ar%i' J ability to deliver it, promise arc helpful
Service delivery is dependent on people and one person can ruin the experience of the customers
with a service brand. Consistency across the full delivery chain is important. It is important
to blueprint the service delivery process. There should be a flowchart of both activities and
interactions. A sendee brand has to concentrate on the end-to-end customer experience and
coordinate different departments and large numbers of people to get them to behave in a
consistent way. Consistent behaviour depends on the extent to which employees understand
and are willing to enact their brand values. The employee has to understand the brand promise
and what the promise means to the customer at that particular contact-point with the employee
and then the employee should have the skill and motivation to execute what is expected of
him. A service brand is offered by an employee in a particular place, at a particular time and
is surrounded by factors that are not under the control of the organization. An employee who
is satisfied with his organization and who is well steeped in the sendee brands values will
interpret the employee-customer contact-point in a way that will fulfill the sendee brands
promise. The employees should believe that what they are trying to achieve is the most
differentiating factor about their service brand. The behaviour of employees in building a
service brand is of utmost importance because if employees are nice and do a decent enough
job, customers forget a great many imperfections in the service.
Branded sendees are in vogue and customers have to learn to make a choice from among
service brands. They do not have the time to make detailed evaluations of the service brands.
Customers arc looking for brands they recognize and trust. Therefore, service brands should
focus on building a relationship with customers. Some service brands have not concentrated
on forging a relationship with customers because there is a great degree of inertia with
service brands. In addition, since customers do not switch immediately the sendee organization
does not feel the urgency to develop relationships.
The challenge of a service brand is to treat a customer as an individual, without making him feel
that he is being mass processed in what is essentially a mass-market service brand. Only a conscientious
and committed employee can achieve this feat for the service brand.

1.5 SUMMARY
A brand is an internal manifestation of what happens in an organization. The purpose of branding is to
create differentiations. As soon as a customer hears the brand name, the attributes and values of the
brand should conjure up before his eyes like a moving picture. Presence of certain essentia! attributes
can guarantee long-term eminence of the brand. The brand should provide the benefits that the customer
desires. The brand should be strong enough to stay in the leading. The price of the product should be
able to demonstrate that customers are deriving value from it. A brand should be givgrtproper support so
that it can sustain itself for a long time. There are various stages involved in building a successful service
brand. They are: (i) Identify external opportunities, (ii) Identify internal capabilities, (iii) Define the brand
and develop brand concept, (iv) Consider feasibility of brand, (v) Ensure internal commitment, (vi)
Position and differentiate the brand, (vii) Structure organizational resources, (viii) Market testing, (ix)
Operationalization.

1.6 KEY TERMS

,

Branding: The process by which companies distinguish their product offering from competition.

1.7 CHECK YOUR PROGRESS QUESTIONS

1.

2.

3.

4.
'
5.

A brand is a:

(a) Name
(b) Symbol or sign
(c) Term
(d) Combination of all of the above
The primary reason why companies build brands is in order to:
(a) Distinguish themselves from competitors (b) Earn higher profits
(c Generate more share-holder wealth (d) None of the above
A strong brand is all of the following except:
(a) Consistent
(b) Expensive
(c) Relevant
(d) Consumer-centric
The unique attribute of services is that:
:
(a) It is high in search qualities
(b> Is standardized
- "(c) Is experiential
(dj None of the above
While building service brands, organizations must be:
(a) First internally driven, then externally driven
(b) First externally driven, then internally driven
(c) Internal and external branding must occur simultaneously
(d> None of the above

False?)
6. Brand builders must choose a brand architecture consistent with the chosen role and the institution's
products, services and market landscape. (True or False?)
7. Brand values in the goods sector are not as important as those in the services sector. (True or
8. The role of the marketing department is most critical in building a service brand, (True or False?)
9. Branding is an indispensable activity of the organization. (True or False?)

1.8 One interaction alone cannot build or tarnish the brand image. (True or False?) QUESTIONS
AND EXERCISES
1. What is a brand?
2. Describe the various attributes of a strong brand.
3. Why is internal branding more important for services than for goods?

UNIT - 2
4. Discuss the various stages involved in building a successful services brand.
'V

-*

y".

BRAND IDENTITY
1.9FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/e; Pearson.

Murthy, Brand Management, Vikas
Publishing House.
The concept of brand identity
The dimensions of brand associations
-

2.1 INTRODUCTION

C , -?2f

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..................s

Ylr-::. , . ,, . .-V -ij* , Vi-if T ' V/

UNIT OBJECTIVES
The difference between brand identity and
brand image
How organizations can bring about changes in
their brand identity
",

",

'.

' ' " ..... ' '

Brands are intangible assets that can build shareholder value. These not only reflect a firms true value
but also provide sustained competitive advantage. Brands add value to the firm as well as to the consumer.
This added value can be conceptualized in terms of brand equity.
From a firms perspective, a successful brand enables it to maintain a high level of consumer
acceptance, often in the face of considerable competition. For instance, Coca-Cola, the world leader in
cola drinks, has been able to maintain its strong presence in the soft drinks market because the CocaCola and Coke trademarks denote values that go beyond mere physical attributes and product labelling.
From the consumers perspective, a brand provides a visible representation of the difference between
products. Brands allow consumers to shop with confidence in an increasingly complex world. A brand
can signify product quality as well as aid consumers in differentiating the product from competitive
offerings. A brand that consumers trust will also serve to reduce perceived risk and post-purchase
cognitive dissonance. An organization can, through its branding strategies and advertising messages,
seek to convey a certain image for the brand. Consumers may, however, evaluate a companys message
through the prism of their own subjectivity.
People will use their own interpretations and will respond differently to brands. This subjective
evaluation results in the formation of a brand image in the mind of the consumer. It is, therefore,
important that the brand message be conveyed clearly. According to the basic communication model,
the company (source) encodes and sends a message to the consumer (receiver), who decodes it on
the basis of his dr her frame of reference. *A communication gap can exist if there is a discrepancy
between the encoding and decoding processes. In the context of brands, the communication between
a company and its consumers can be examined in terms of brand identity and brand image.

2.2 BRAND IDENTITY

:

The concept of a brand is based on the consumers needs that a brand can satisfy. The three broad
categories of consumer needs are: experiential, functional and symbolic. A brand with a functional
concept is so designed that it solves the consumption requirements created externally. Consumers will
be motivated to purchase and use functional brands in situations where the product is viewed as
addressingutilitarian needs. The symbolic image in a brand represents belongingness to a desired group, selfimage
or role. Brands with a symbolic concept facilitate communication of a symbolic meaning.
A brand with an experiential concept fulfils the need for stimulation and variety. The primary motivation
for selecting certain products is the enjoyment derived by the consumer on consuming it.
Brand identity originates from the company, i.e., a company is responsible for creating a
differentiated product with unique features; it is how a company seeks to identify itself. A company will
often use branding strategy as a means of communicating its identity and value to consumers and other
stakeholders. The marketing mix strategy plays a significant role in the establishment of a brand identity.
The four Psproduct, promotion, price and placecontribute significantly to the process. The tangible
attributes that comprise the product will send a message to the consumer about die various features of
the brand. The dual airbags and anti-lock braking system installed in a particular brand of car communicate
the safety benefits of the car to potential buyers.
Brand identity sends a single, unified signal through various elements of the brand such as the
name, slogans and products. This is important because the uncontrolled expansion and diversification of
the brand leads customers to feel that they are dealing with several different brands rather than just a
single one. Through brand identity, a company seeks to convey its individuality and distinctiveness to all
its relevant publics.
Kapferer has emphasized the brand-focussed view of identity. It is through the development of
this identity that managers and employees make a brand unique. Brand identity is made up of various
components including:

Style of presentation

Bonds and relationships

Vision of the brand
Culture of the brand
Brand positioning
Personality

PICTURE OF
SENDER

The main objective behind the existence of a brand is embodied in the brands
vision,
which
represents a set of values that, in combination with brand culture, help to guide
and
direct
the
brand.
A
brands positioning seeks to emphasize the characteristics and attributes that make it unique. The
advantages
and benefits on offer are conveyed to the consumers through brand positioning. The emotional
characteristics of the brand are represented by personality. It is influenced by positioning as well as
the
core values and culture of the top management, vision and culture are also responsible for the evolution
of relationships between employees, consumers and other stakeholders. Presentation styles are
developed
to project brand identity. This should take into account consumers needs and aspirations. Brand
identity
can also be examined in terms of brand concept, which refers to the meanings assigned to a unique
Fig 2.1 Brand Identity Prism

are
the
the
efforts
the
six facets
shown

brand

combination of
product
features,
the
meanings that
assigned to the
arrangement of
features, and
companys
to
create
meaning from
arrangements.
of identity are
in Figure 2.1.
Physique:
A
has
physical
qualities.
It

comprises a combination of salient objective features

or emerging features. Salient features here refer to those features of the brand that at once come
to mind when a brand is quoted in a survey. Physique is both the brands backbone and its
tangible added value. Though physical appearance is not the most important aspect of a brand, it
matters nevertheless.
-'wmapi
Every brand possesses a unique personality. It builds up character through gradual
communication. The manner in which the brand portrays its products or speaks of its services
reflects the kind of person the brand would be if it were human. Personality has been the main
focus of brand advertising for a long time now. One of the ways of lending the brand a personality
is by giving it a spokesperson or a figurehead.
Every brand possesses its own culture which is reflected in the product. The product
communicates this culture to the consumers and the media; it represents the culture. Here,
culture implies the set of values that inspires the brand. The cultural aspect is the essence of the
brand and refers to the basic principles that govern the brand, that is, its external communication
and its products. Major brands are not only driven by culture, but also convey this culture.
Countries of origin are great cultural reservoirs for brands. Coke stands for America, IKEA for
the Scandinavian region, Nokia for Finland, Mercedes for Germany and Toyota for Japan. However,
this is not the only factor adding to their value. Culture is what links the brand to the firm,
especially when the two have other common elements. The degree of freedom of a brand is often
reduced by the corporate culture, of which it becomes the most visible outward sign.
This facet helps the most while differentiating luxury brands as it refers to their sources, to their
fundamental ideals and to their set of values.

 A brand represents a relationship. Brands form the basis of most exchanges, transactions or deals
that take place between people. This holds true for both service sector and retail brands. Services
are often defined only by relationships.A brand can be referred to as a reflection. As its
communication
and
most
significant
products
and services build up or grow over time, a brand will always reflect the image of its consumers
or buyers. All brands must control their reflection by constantly reiterating what they stand for.
Finally, a brand speaks to the customers self-image. If reflection is the target audiences mirror,
self-image is the targets own internal mirror. Through the acquisition of brands, customers
develop a certain type of relationship with themselves.

2.3 BRAND IMAGE

Brand image is related to the perception that the customer has about a brand. A set of beliefs about a
specific brand is termed as brand image. Brands have a personality or character that can be more
significant to the customer than the technical details of the product. Brand image sums up the impressions
that customers get from several sources. This summation forms the brand personality. Several researchers
are of the opinion that brand image describes not just the individual traits of the product, but also the
complete impression that the customer forms in his mind. The manner in which a
specific brand is positioned in the market, i.e., the way the customer perceives the product, describes
the brand image.
Clearly, consumers form an image of a brand on the basis of associations they have with respect
to that brand. Brand image is a set of associations, usually organized in some meaningful way. A firm
engages in several brand-related activities. Each of these acti vities lends some meaning to the brand. For
the customer, brand image is the sum of all the meanings that can be derived from all such activities of
the company. Implicit in all the above definitions is that brand image is a consumer-constructed
notion of the brand. Consumers associate a particular image or persona with a brand on the basis of the
subjective perceptions that they have about it. For example, Lexus may be associated with luxury and
status, while Volvo may have safety associations in the mind of the consumer. McDonalds may be
associated with a symbol such as the Golden Arches, or children may link the fast-food giant to a place
where they can have fun.
Attributes, attitudes and benefits are the three dimensions of brand associations.
Attributes could be both specific and abstract. Attributes such as size, colour and weight are specific,
whereas brand personality attributes such as youthful, durable and rugged are abstract in nature.
Attributes could also be categorized as product-related or non-product related. While product related
attributes would be unique to the type of product and service, non-product-related attributes would
include packaging and user imagery as well as usage imagery. Benefits refer to the consumer perception
of the needs that are being satisfied. The third dimension of brand associations is attitudes.
A learned predisposition to behave in a favourable or unfavourable manner with respect to a particular
object, is called an attitude. Brand attitudes are the overall evaluations of a brand by the customer.
Researchers have constructed several models of brand attitudes.

2.4

DIFFERENCE
BETWEEN
BRAND IMAGE

BRAND

IDENTITY

AND

The main difference between brand identity and brand image lies in the fact that brand identity
arises
from the company or source and the receiver or the customer gets the image. Brand message is presented
as brand identity, and received by the customer as brand image. Image signifies customer perception,
while the firm's reality is represented by identity.Brand identity and brand image originated as products of
the
communications
environment
where
they exist. The strengthening of the identity-image linkage helps to create and mainten brand loyalty.
Therefore, the space between consumer perception and company reality has to beTeduced or removed.

2.5 CHANGING BRAND IDENTITY AT INTEL CORPORATION

In January 2006, Intel Corporation released its new brand identity. The identity marked the transition of
the company to a complete solutions provider. Intels key technologies are the microprocessor, chipset
and software that enhance its performance, and also improve the experience of its customers.
The development of the Centrino technology platform proved to be a breakthrough for the company
in terms of its approach towards its market. The company new caters to four segments mobile,
enterprise, health and digital home, all of which revolve around its new technology platform.
Intel has also launched new brands such as Viiv (pronounced v 2 v) technology. The branding
system is now simpler, and unifies the look and feel of the Intel brand. The Centrino mobile technology
and Viiv technology have new logos. The logos for other Intel mother boards, chipsets and processors
have also been modified. Each product of Intel also sports the new logo.
The basic purpose of creating the new brand identity is to foster a stronger emotional relationship
between the Intel brand and its customers. The brand recognition for Intel has also increased for the
company, besides strengthening its position in the marketplace.
The Intel Inside logo that was used for a long time has been changed to Intel. Leap ahead.
The new logo combines the powerful heritage of Intel and the direction of the company towards
integrated electronics. The tagline conveys the new promise made by the company to design appropriate
technology solutions for its customers that would give them the leading .edge in their businesses. The
tagline conveys what the legacy of the company is and what they intend to do.

2.6 SUMMARY
Brand identity is a means for a company to convey its individuality. Brand identity is a summation of
factors such as brand vision, brand culture, positioning, personality, relationships and presentations.
According to the brand identity prism, an identity has six facets, namely: (i) physique, (ii) personality,
(iii) culture, (iv) relatioaship, (v) reflection, (vi) self-image.
Brand image is the understanding that consumers derive from the total set of brand-related activities
engaged by a firm.

2.7 KEY TERMS

Brand identity: How a company seeks to identify itself and make itself distinctive to the public.

Brand image: The perception that the customer has about a brand.

2.8 CHECK YOUR PROGRESS QUESTIONS

1. A brand:
(a) Reduces perceived risk
(b) Serves as a signal of quality
(c) Acts as a differentiator
(d) All of the above
2. Which of the following is not one of the dimensions of the brand identity prism?
(a) Culture
(b) Relationship

3. (c)

Positioning

(d)

Self-imageA brands culture is derived from its:

(a) People

(b) Country of origin

(c) Ownership

(d)

Identity

4. Brand identity is contributed by all except the following:

(a)

Marketing mix

(b)

Communication of a company

(c) Product features

(d)

Consumers

5. Brands are intangible assets that can build shareholder value. (True or False?)
6. Through brand identity, a company seeks to convey its individuality and distinctive-ness to all its
relevant public. (True or False?)
7. Brand image and identity are the same. (True or False?)
8. Different customers have different brand images. (True or False?)
9. Brand identity and image are both consequences of the firms communications. (True or False?)

2.9 QUESTIONS AND EXERCISES

I. How does a brand add value to a company?
2. What is brand identity?

3. Discuss in detail, the brand identity prism. How can it help a company in building its brand
identity?
4. What is brand image? How is it different from brand identity?

2.10

FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/e; Pearson.

Murthy, Brand Management, Vikas Publishing House.
:

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UNIT OBJECTIVES
The importance of symbols in brands and the The components of an effective logo
protection of symbols
The importance of a trademark
an* U'-j

UNIT - 3

IDENTITY
SOURCESSYMBOLS,
TRADEMARKS

LOGOS

AND

3.1 INTRODUCTION
An important part of brand marketing is the use of identity sources such as symbols, logos, trademarks,
etc. A logo can say many things about a company; it can make the perception of the company cither
negative or positive. Symbols are used to portray the values and goals of a company.

3.2 SYMBOLS
Products take on symbolic meanings and consumers buy them as much for their
physical benefits as for their symbolic or non-functional meanings. Ibis is evident in badge products,
i.c.., products that are used in public and whose symbolic meaning the consumer internalizes. It would
not be right to think that such meanings are attached only to conspicuous products. Such meanings are
also attached to those products whose identity is only known to the user.
The reality is that many firms and products are similar; the differences that exist-such as
perceived qualityare difficult to communicate in an effective manner. In several industries, companies
find it increasingly difficult to differentiate between brands. Such brand parity can be somewhat reduced
by using distinct symbols. The recognition and recall elements of the symbol contribute to word building
brand equity.
The symbol can by itself create awareness, associations and feelings which, in turn, can affect
loyalty and perceived quality. It is easier to learn visual images (symbols) than words (names). Thus,
symbols can help gain brand awareness. Symbols can be anything, including Geometric shapes

Things

Packages
Logos
People
Scenes

Cartoon characters

Attribute associations
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A symbol can communicate associations even specific attributes. Several characteristics are difficult
to communicate, and the resulting marketing constraints can reflect on the marketing programmes
without the symbols.20 Identity SourcesSymbols, Logos, Trademarks

Multiple associations
Several industries such as banks may not have distinctive features, as most are similar in terms of
deposits, interest rates, etc. In those industries where similarity is the norm, a host of associations
formed through symbols is a huge advantage.

Positive feelings
Some of the most successful and interesting symbols are cartoon characters (such as the Bunny Rabbit
of Duracell) that invoke humour and fantasy. The Pillsbury Doughboy is a symbol that tends to be
memorable, likable and has strong associations. This symbol communicates the plump freshness of the
bakery products and provides a lovable character.
The fact remains that a character is appreciated or is associated with a positive feeling. People
engage in affect transfer which means that they tend to transfer affect (feelings of liking or disliking)
from one object to another which is perceived to be connected or related to it in some meaningful way.
People are uncomfortable with inconsistencies. It is a neutral feeling toward one object closely associated
with another, which has a very positive affect attached to it. They cope by altering the affect that is not
very strong.

Symbols as indicators of brands and product class

One role of a symbol, in addition to possibly generating associations, is to be an indicator for a brand.
The result is a useful mnemonic for the audience. Exposure to the same symbols makes it memorable
and interesting. The symbol may also help the brand name to associate with a product class by linking
;
it. Research in consumer behaviour and psychology provides clues as to what sort of symbol characteristics
will affect the ability of a symbol to link with the brand and product class.
The implication is to legally protect symbols from imitators and to develop symbols, which are
unique. One way to test symbols is to use recognition tests. The symbol could be exposed for a fraction
of a second along with a set of competing symbols. A distinct, differentiated symbol would do well in
such a test.
Another guideline is that it is much easier to learn the association between a symbol and a brand
if the symbol reflects the brand. For instance, the symbol of Dabur suggests heritage. At the other
extreme, brands such as Sony and IBM have their brand name as their symbol as well.
If the symbol (and the brand name) has associations that are extremely strong, the brands ability
to reposition or extend is reduced. An extension would not only change the name or product class
association but also the symbol-product association. A symbol, which also has an inherently weak
association with a product class, provides strategic flexibility.
Upgrading the symbol
With so much invested in a symbol, it is risky to change it because of the relearning that will have to take
place. On the other hand, the symbol can be outdated and develop some undesirable old fashioned,
stodgy connotations. Several firms have successfully updated their symbols over time to keep in touch
with the times while retaining their heritage and associations.
Guarding the symbol
3.3 A symbol should always be protected. Placing the symbol in a context, which will put at risk its
associations, should be avoided. When a symbol is licensed, it indicates a way to get the spotlight.
But,
the symbol should be limited to the appropriate settings. Its equity can be effected by any unwanted
associations.LOGOS
A logo is the graphic and typeface elements of a brand. 1 A combination of all the graphic elements that a
company uses to communicate its brand and its properties to its external and internal audiences, 4 5 6 comprises
the logo. A logo is a sort of a signature of a companys brand. *
Companies spend a lot of time and money in deciding their brand logos. For instance, recently
4 Pamela W Henderson, and Joseph A. Cote. Guidelines for Selecting or Modifying Logos, Journal of Marketing
(1998). 14-30.
5 Zakia, Richard D. and Mihai Nadin, Semiotics, Advertising, and Marketing, Journal of Consumer Marketing
(1987), 5-12.
6 1 Snyder, Adam, Branding Coming Up for More Air, Brandweek (1993), 24-28.

Pepsi took five months to revamp their logo after Indra Nooyi took over as the CEO of Pepsi Cola. 7 The
purpose of revamping the logo was to give a symbolic indication of the transformation of Pepsi into a
cultural leader. The new logo incorporated different white bands inside the erstwhile Pepsi circle. A
white smile is for the Pepsi brand, a grin for Diet Pepsi, and a laugh for Pepsi max. The total estimated
cost of revamping the logo was approximately $1 million. Tire new logo had to be incorporated in their
trucks, vending machines, letterheads, point-of-salc materials, refrigerators, etc.
The main purpose of a brand logo is to foster recognition and recall. A company, therefore, uses
its logo at several places:
Advertisements (television, print, in-store)
Packages
Letterheads
Business cards
Product designs
Annual reports
Sponsorships
These are particularly important for packaged goods manufacturers as these help to trigger
attention, recognition and recall in retail outlets, thus, prompting purchase.
Logos are often the first external communication of an internal change in the organization; for
example, recently Wal-Mart changed its logo indicating an evolution of its brand. 8 The logo now includes
a new symbol of a flower, thus, indicating an organizational shift to becoming more environmentally
friendly. Wal-Mart has also indicated that the logo change indicates a move to being more people friendly.
Since companies spend, a lot on selecting and using brand logos in the corporate communication,
it is extremely important to ensure that the right logos are selected and the meaning of the logos are
clearly communicated to the customers. Often, companies tend to spend a lot of effort in selecting and
displaying logos, though much less effort is spent on communicating its meaning to the intended audiences.
Therefore, customers may not recall the logos, and worse, may dislike them.
D.'

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7 Natalie Zmuda, What went into the updated Pepsi logo Advertising Age (1993), 40
8 Wal-Mart Changes its Logo, Apparel Magazine (2008), 12

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i.W.,. 'l f... ".,.22 Identity Sources
Symbols, Logos, Trademarks
Logo recognition occurs at two levels:
Ai the first level, it must trigger recognition for the customer, i.e., he must remember seeing the
logo.
Thereafter, it must make the customer recollect the correct brand name (recall).
The first step is facilitated by the use of a memorable design. It should fit in appropriately with
the values of the brand, must be distinct and should be easily recognizable. It should also have the ability
to evoke the correct emotions among customers. The logo should also have the ability to convey the
meaning and emotions across cultural contexts.
For instance, Google is one brand that has been credited with constantly innovating with its logo,
in keeping with changing seasons/' Google is the antithesis of the traditional guidelines of how a logo
should be used. A logo, traditionally, should never be changed or tampered with, and should appear in the
same way everywhere. However, Google has changed the traditional guidelines. It has in the past used
the image of a couple in its logo during the Valentines season, the image of tulips to announce the arrival
of spring and substituted the two Os in its logos for eggs during Easter.
' -

The changing logos of Google reflect the confidence it has in the power of its brand. High
recognition, recall and patronage of its customers across cultures remains unparalleled.

Therefore, logos should be easily recognizable, evoke positive emotions, and right brand values,
across cultures, besides being distinctive. However, not all logos are designed to achieve all these goals.
The goals that a brand logo must achieve depend on the objectives set forth for it by the company.
Sometimes logos may be used only to trigger recognition and recall. Some companies use abstract
logos, but give names to the logos to convey the intended brand values. The best examples of this
strategy are Nike (swoosh), and Coca- Cola (wave). The Dabur logo triggers recognition and recall 9and
conveys the brand value of heritage' associated with the company. At the other extreme, spurious
brands use familiar logos to prompt mere recognition among undisceming customers to foster sales.

3.3.1

Visa

A recent example of a well-known company changing its logo is that of Visa. Visa International invested
in a makeover of its brand image, including its logo and card design features, as new payment opportunities
opened up. The new logo design has been crafted to present a more contemporary' face of the Visa
brand and will feature in all in-store materials and Visa payment cards. The brand will retain its trademark
blue, white and gold colours as well as the italicized typeface, however, the V in Visa is enhanced with
a spot of gold at its tip. As part of the redesign, the Visa name will be made more prominent after
research showed that people respond on seeing the word. Banners around the edge of the card used in
the current design have been removed and the familiar Visa hologram will be moved to the back of the
card and incorporated into the magnetic strip which will also make counterfeiting more difficult. This
will allow more space in the front of the card to be used for messages or other designs and branding.
The card company is making the changes to reflect the evolution of its payment methods. For example,
in some markets, the old Visa Flag has become synonymous with credit but in reality, Visas global
debit card business is now greater than its credit card business. The new mark was incorporated into
marketing and communications material, with plans to leverage major international events to take the
new' look to a global audience.
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3.3.2

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....

Kodak

In 2005, Kodak changed its logo to convey a better connect with the evolving digital age. The change
comes after nearly forty years of using the logo comprising of a yellow *K in a red box.

Kodak
Old and new Logos of Kodak
The new logo uses two yellow lines and the name pixilated Kodak name in the middle. A change
in the brand logo became necessary' when a worldwide survey among customers revealed that the name
Kodak continued to be associated with films for cameras, while the market had moved on to the digital
age. Therefore, the companys image was considered old and outdated. Therefore, a 360-degree
communication using advertising, PR and product design changes were introduced by the companys
ad agency Ogilvy and Mather.

9 Google Logo, Marketing (2008).

3.4 The company used extensive outdoor campaigns in Australia, as most customers are out of their
homes in summers. Public relations were also used extensively to encourage customers to use new
technologies introduced by the company. For instance, the company places digital kiosks at tourist
spots to encourage people to try out its new products. The company also entered into collaboration
with
the Internet communications company Skype, and introduced Kodak Photo Voice, that allowed users
to
talk live to their family and friends and share photo albums.TRADEMARKS
A trademark is a signa logo, a name, a word, a symbol or a combination thereofused by a producer
or vendor to distinguish a particular product or service/ 10 For example, tire way in which the brand name
Coca-Cola is written, the Nike swoosh and the golden arch of McDonalds.
Trademarks need not be registered. The mere usage of the unique signs validates
the claims of the owner of the trademark. However, registering the trademarks gives the owners distinct
advantages. It provides a secure and stringent right of usage for the owner, and gives him protection
against any misuse for an unlimited period. The trademarks are recognized by the symbols TM or . A
trademark is thus, an intellectual property right for its owner.
Thus, a trademark comprises a unique sign that an organization uses to identify itself in the eyes
of its various stakeholders. It also aims to distinguish itself from its competitors by using the trademark.
The brand name, logo, symbol and design are the most common forms of trademarks for a company.
However, virtually anything that can be represented graphically can be registered as a trademark, provided
the owner can prove its active usage, and the fact that it lends distinctiveness to his brand name. For
example, when Nestle applied for a trademark registration for its brand Kit Kat, it applied for the registration
of both the brand name, as well as the slogan Have a break... Have a Kit Kat with the British Trade
Marks Registry in 1995. However, its competitor Mars objected to the registration of the slogan, saying
that Have a break... is an expression, and does not in itself lend distinctiveness to the brand name.
However, the European Court of Justice (ECJ) ruled in favour of Nestle (contended by Mars). Amendments
by ECJ, for instance, also allow the registration of shapes, colours and smells, provided they lent
distinctiveness to the owner. Thus, anything that lends distinctiveness for the owner can be registered
as a trademark.
Trademarks are one of the proprietary assets of a company that helps in building brand equity.
Therefore, they need to be protected by the company against any malpractice. Misuse of trademarks
can erode the brand equity and cause confusion among customers.
Trademark infringements can be proved by the owner on three basis:11
The first category of evidence revolves around the strength of the original trademark. The appellate
authority checks the extent of the usage of the trademark, how much is spent on its promotion
including advertising and how well the customer knows it.
The next evidence revolves around the degree of resemblance that the infringed trademark bears
with the original trademark. For instance, similar sounding brand names or similar looking logos.
The third category of evidence is related to customers, i.e., the copied trademark causing confusion
among them or not. It also relates to the intention of the party that has infringed on the trademark
whether any malicious intention towards inducing the customer to buy was involved or not.
For example, LOreal USA filed a suit for trademark infringement against Zotos International Inc.

10 Giovanni B. Ramello, Whats in a Sign? Trademark Law and Economic Theory, Journal of Economic Surveys
(2006), 547-565.
11 Ross D. Petty, Naming Names: Trademark Strategy and beyond: Part one - Selecting a Brand Name, Journal of
Brand Management (2008), 190-197.

Zotos is a hair care manufacturer and subsidiary of Shiseido Ltd. LOreal alleged that Zotos had copied
the packaging and the trade dress of its brand Redken. LOreal further stated that the copying confused
its customers and caused irreparable damage to the company. It also alleged that Zotos actions
weredeliberate and willful.12 The two products were also competing in the same market. Therefore, LOreal
claimed an injunction and monetary compensation.
Similarly, Adidas filed suits against Walmart and other European retailers (such as Dutch retailer
H & M), whose private label was selling shoes bearing the three stripe pattern, popularly associated with
Adidas. In the US, the case was dismissed, and the agreement between Walmart and Adidas is not
known. Walmart was retailing shoes with two stripes. Adidas filed a motion accusing Walmart of
violating and diluting its trademark. In Europe, the European Court of Justice (ECJ) ruled in favour of
Adidas. The main argument presented by Adidas in both the cases was that customers strongly associated
three stripes with Adidas.
Protecting a trademark is not an easy task, as products in todays world are exposed to various
countries across the world, and to monitor if the trademarks are not being infringed anywhere, is
expensive. For example, the Tea Board of India has registered the Darjeeling Tea variety under the
(Indian) Trade and Merchandise Marks Act, 1958. It has also registered it with the geographical Indication
of Goods (Registration and Protection) Act, 1999. It has also prevented the misuse of the trademark in
countries like Norway, Germany, Israel and Sri Lanka. This exercise alone cost the Tea Board more than
$ 200,000 in four years.
Some emerging countries like India and China are particularly notorious for cases of trademark
infringements. This is not due to lack of legislations, but due to the inability of the local governments to
check their enforcements, and the expense for companies to keep a track of cases of infringement.
However, companies must take the pain of tracking the use of their brand names, as they have invested
a lot of money in building them. Recently, in the year 2006, Bluetooth special interest group (SIG) raided
a factory in China and discovered Bluetooth products being manufactured with the logos,
without the proper qualification programme. Even though China has made trademark
infringement both a civil and a criminal offence, checks need to be made to ensure the implementation
of the laws.

3.5 SUMMARY
Symbols can help gain brand awareness. They can create awareness, associations, liking or feelings,
which can affect loyalty and perceived quality. Symbols may take any shape, be it people, things,
cartoon characters, geometric shapes, etc. Symbols should always be unique so that they cannot be
easily imitated. Brand names can be the symbols of a company. On the other hand, a logo gives immediate
recognition to the company. A logo should also be unique, as it represents the brand of the company.
Trademarks are one of the proprietary assets that help to build the brand equity of a brand.

3.6 KEY TERMS

Symbols: Visual images that are created to promote associations with a brand.
Logos: The graphic representation of a brand.

12 , Jeanine Poggi, and Andrea Nagel, LOreal Files Trademark Suit, WWD: Womens Wear Daily (2008), 195.

3.7 Trademark: A sign which is a combination of a logo and a symbol which is used by a
manufacturer
to make his product distinctive.CHECK YOUR

PROGRESS QUESTIONS

1. All are symbols, except:

(a) Logos.
(b) People
(c) Things
(d) Product features
2. Symbols provide all the following, except:
(a) Reason to buy
(b) Positive feelings
(c) Indicators of brand and product class (d)
Legal protection
3. A symbol can by itself create awareness, associations, and liking or feelings, which in turn can
affect loyalty and perceived quality. (True or False?)
4. All are aspects of a logo except:
v (a) Wordmark-logotype
(b) Icon
(c) Slogan
(d) Advertisement
5. A logo is a graphic element, symbol, or icon of a trademark or brand, and together with its
logotype, is set in a unique typeface or arranged in a particular way. (True or False?)
6. Trademarks help a company to:
(a) Build proprietary assets
(b) Identify the commercial source or origin of products or services
(c) Inhibit or prevent eom-petitors from eroding the customer base
(d) All of the above
7. Patents and trademarks are the same. (True or False?)
8. Trademarks are enforced by their commercial usage. (True or False?)
9. Consumers buy products for:
(a) Their features
(b) Their symbolic meanings
(c) Only (a)
(d) Both (a) and (b)
10. Colour is vital for brand recognition. (True or False?)

3.8 QUESTIONS AND EXERCISES

1. What are symbols? What are the different types of symbols?
2. Discuss the significance of symbols for a brand.
3.

What is a trademark? How docs it contribute to brand equity?

4. Discuss the relevance of trademarks and the issues related to it.

5. Differentiate between patents and trademarks.

3.9 FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/e; Pearson.
Murthy, Brand Management, Vikas Publishing House.

UNIT - 4

ADVERTISING AND BRANDING

UNIT OBJECTIVES
The role of advertising in building a brand

The objectives of an advertising agency

The theories on how advertising works

The concept of 'positioning in the mind of the
customer

How television advertising can be effective

Barriers in the measurement of advertising
effectiveness

4.1 INTRODUCTION
Advertising is meant to make consumers buy brands. It is a medium of information and persuasion. The
effectiveness of an advertisement can be best judged by its ability to enhance sales. Advertisements can
enhance sales only if they promise a benefit to the consumer. The brand promise must be persuasive,
unique and relevant to the consumer.

4.2 BUILDING BRAND TRUST THROUGH ADVERTISING

Trust affects consumer value and perceptions, inpacts consumer choice, and enhances brand commitment
and loyalty. This encourages marketers to explore ways in which they can build and enhance trusting
relationships with customers, including fostering consumer trust through trust advertising appeals.
Despite its usage, there are certainly reasons to question the ability of advertising to foster brand
trust. There are at least two streams of thought that appear to challenge the value of using trust advertising
appeals. First, it has long been documented that consumers generally are distrustful of advertising. This
distrust might, at best, negate the effectiveness of explicit advertising claims of trustworthiness and, at
worst, produce a form of psychological resistance that could undermine consumer opinions of the
advertised brand.
Another question that arises is if advertising enhances consumer trust. It is widely believed that
familiarity or experience with the party to be trusted is a precondition for trust that trust emerges only
after direct contact and develops gradually over time. Thus, trust is thought to be earned through longterm interactions. From this perspective, consumers come to trust brands, companies or salespeople
only after experience with the to-be-trusted party has taught them the wisdom of doing so. This view
therefore suggests that little may be gained from advertisements that simply label a brand as trustworthy
or call for consumers trust in the brand, especially for unfamiliar advertised brands.

However, research indicates that the presence of an explicit call for trust changes the direction of
thinking (more trust-related thoughts) as well as the favourableness of thinking (more favourable thinking
about the product and its trustworthiness and less unfavourable thinking about the ad) during processing.
Moreover, this appeal enhances the perceived trustworthiness of the advertised brand, strengthens and
makes customers more confident about some (but not all) brand beliefs, and, consequently, increases
brand attitude and purchase intentions. Advertising with an explicit trust appeal does include productspecific information about the advertised brand (hat speaks about its trustworthiness. Explicit trustappeals
that provide specific information germane to the brands trustworthiness as elaborate trust
appeals. Such information includes anything about the brands competency and benevolence. Messages
containing strong and cogent arguments famish better support for advertising claims and result in more
persuasion than messages with weak supporting information when they are processed sufficiently.
Research also reveals that consumers form positive perceptions about a brand and have greater
trust even by the mere presence of advertising. Therefore, brands that are advertised are more likely to
be trusted as compared to those brands that are not advertised.
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4.3 HOW ADVERTISING WORKS1

4.3.1

Strong Theory

A consumer passes through the stages of awareness, interest, desire and action (AIDA). The theory
advocates that advertising is strong enough to increase peoples knowledge and change their attitudes. It
is capable of persuading people who had not previously bought the brand, to buy it. Conversion theory
of advertising states that non-buyers are convened to buyers. Advertising is assumed to have such a
powerful influence on consumers that new customers are persuaded to buy the brand.
This theory has been criticized on the grounds 13 14 15 that for many brands, consumers do not
experience
a strong desire (to buy) before action (buying). For inexpensive products, a brand may be bought on a
trial basis without any strong conviction that the brand Lhat has been purchased is superior to competing
brands.
The model is also limited to the conversion of non-buyer to the buyer. It ignores what happens
after the first purchase. Yet in most mature products, advertising is designed to affect people who have
already bought the brand atleast once.

4.3.2

Weak Theory

According to this theory, the decision-making steps for a consumer are awareness, trial and reinforcement.
Advertising is believed to be much less powerful. Advertising may arouse awareness and interest, and
nudge some customers towards the first purchase. The purchase provides reassurance and reinforcement,
meaning that the consumer liked the product. Strong AIDA-like desire or conviction may not be needed
before the first purchase is made.
In a fast-moving consumer goods markets, loyalty to one brand is rare. Most consumers buy a
repertoire of brands. The share of a consumers expenditure on different brands shows little variation
over time, and new brands join the repertoire only in exceptional circumstances. A major objective of
advertising in such circumstances is to defend brands. It does not work to increase sales by bringing in
new buyers to the brand advertised. Its main function is to retain existing customers and sometimes to
increase the frequency w'ith which they buy the brand.'The target is existing buyers w rho are fairly well
disposed to the brand. The advertisement is designed to reinforce their favourable perceptions. ; - For high involvement decisions such as the purchase of expensive consumer durables, many
alternatives are considered and the information search is extensive. Advertising is likely to follow the

13 Jones. J. P. {1991), Over-promise arid Under-delivery, Marketing and Research Today, November, 195-203.
14 - Ehrenberg, A. S. C. (1993), Comments on How Advertising Works. Marketing and Research Today, August,
167-9.
15 Jones (1991), op. cit.

' - -- * * * ! ' ' '* '

^ strong theory, by creating a strong desire to purchase or by
convincing
people
that
they
should
find
out
more about the brand (by visiting retail outlets). Since the purchase is expensive, it is likely that a strong
desire is required before the purchase takes place.
For low involvement purchase decisions, people do not thoroughly consider a wide range of
brands before purchase, and the weak theory of advertising applies. Advertising is intended to let consumers
do what they are already doing, by providing reassurance and reinforcement. Advertising repetition is
important to maintain awareness and to keep the brand on the consumer's repertoire of brands from
which individual purchases will be chosen.

4.4 DEVELOPING THE ADVERTISING STRATEGY

4.4.1

Identify and Understand the Target Audience

The target audience is a group at which the advertising is aimed. The target market selection should be
preceded by one sound rationale it should comprise the best prospects that would buy the brand. In
consumer markets, the target market may be defined in terms of the socio-economic group, age,
gender, buying frequency and lifestyle. In business markets, the target market may be defined in terms
of the type of industry, order size, product specifications and buyer-seller relationships.
It is extremely important to define the target audience with clarity and,precision. The advertisement
must be intended only for the target audience, and not for others, even if other customers in the
periphery are interested in the offering. Else, the organization can feel tempted to reformulate its
advertisements for customers who are not a part of the target audience, thus losing focus. A company
that wants to focus on the youth audience may find takers for its products among other customers who
are older. The advertisement cannot be reformulated to include these older consumers, even though they
can be an attractive revenue making proposition. The mid-path would not be attractive to the intended
target audience, the youth.
Once the target audience has been identified, it needs to be understood better. Buyer motives and
choice criteria need to be analysed. Choice criteria are those factors which buyers use to evaluate
competing choices. These in turn are shaped by several other external factors (such as income, social
class, reference group influence, culture, buy situations) and psychological factors (such as perceptions,
attitude, involvement levels).
Advertising in organizational markets is particularly interesting since different members of the
decision-making unit may use different choice criteria to evaluate a given product. For instance, a
purchasing manager uses a cost-related criteria whereas an engineer places more emphasis on technical
criteria. Where costs allow, two different advertisements may be needed, with one stressing cost benefits
using media read by purchasing managers, and another focusing on technical issues in media read by
engineers.

4.5 Consumer decision-making may also involve various stages and multiple roles being played by
different people, depending on the type of purchase decision being made. The advertiser has to
decide
the focus of the advertisement in terms of addressing a particular choice criteria employed by an
important decision-maker. Like in industrial markets, a company may have to make more than one
advertisement to address the different choice criteria used by the different players in the decision
making
process. It is important to decide as to who the advertisement is trying to impress and influence, and
then frame its appeal appropriately.DEFINING ADVERTISING OBJECTIVES
All advertisements should increase sales. Some may induce purchase action immediately (direct action
advertising), while some may stimulate demand for a later period (indirect action advertising). The
objective of advertising should be to make the consumer buy the companys brand every time he faces
a need for the product, Thus, every advertisement must be framed with specific objectives that ultimately

lead to an increase in sales.

Position the brand: Advertisements are primarily used for positioning products in the target audiences
mind.16 17 Positioning essentially involves defining what the product does and who it is meant for. Creative
positioning involves development and/or reinforcement of an image or set of associations for a brand.
There are seven ways of positioning a brand:18
Product characteristics and customer benefits: A powerful attribute for positioning is being the
number one in the market. People tend to remember objects that are number one but may easily
forget number two positions. Occasionally two attributes are used (cavity fighting and fresh
breath) to convey positioning. Companies emphasize product attributes, features and benefits
while positioning their products.
Price-quality: Giving value through quality products sold at low prices, or high quality products
at competitive prices, or superior quality at a premium.
Product use: The idea is that when people think of a specific use of the product, they would
automatically think of the brand name.
Product user: Associate a product with a user or a user type.
Product class: The product may position itself as a leader within a product class, or may position
itself against the product class (for instance. 7 Up, the Un-cola).
Symbols: Use of symbols is effective when the symbol reflects a quality desired in the brand.
Competition: Positioning against well-entrenched competitors is effective since their image in the
marketplace can be used as a reference point.
Create awareness: Creating awareness helps to legitimize a company, its products and its representatives
to customers. Advertising improves acceptance of products and salespeople. Brand awareness is a
precondition to purchase, and is achieved through advertising. Advertising can be used to make the
target audience aware of a solution to a problem.

Stimulate trial: Once consumers try the product, the acceptance rate is high (as personal experience is
the best indicator of product performance). But initially only a small proportion of target customers try
the product. Advertising that stimulates trial increases the diffusion rate of the product among the target
audience. New product or brand introductions particularly warrant the stimulation of trial among the
intended target audience. Various promotional offers also fall into the same category.

16 "TAT: CrC "-' /; ..yUT';

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17 Ries, A and J. Trout (1981), Positioning: The Battle for Your Mind, New York: McGraw-Hill.
18 Aaker, D. A, R. Batra and J. G Myers (1992), Advertising Management, New York: Prentice-Hall.
1

Remind and reinforce: Once a clear position has been established in the minds of the target audience,
the objective of advertising is to remind them of the brands existence and reinforce its image. For many
leading brands in mature markets, the objective of their advertising is to maintain top-of-the-mind
awareness and favourable associations. They have a strong market position and a major advertising task
is to defend against competitive inroads, maintaining high sales, market share and profits. Provide support
to the sales force: Advertising provides support to the sales force by identifying warm
prospects and communicating with otherwise unreachable members of a decision-making unit. Some
industrial advertising contains return coupons which potential customers can send to the advertiser
indicating an interest in the product. Identification of such warm prospects enables the sales force to
use their time more efficiently by calling upon them rather than cold calling on potential customers who
may or may not be interested.
Correcting misconceptions: Advertisements can also be used to correct misconceptions which consumers
hold against brands. Companies or brands that may have got tarnished due to negative publicity can be
resuscitated by advertising. For instance, the leading aerated beverage manufacturers have faced the
wrath of the Indian media due to the alleged pesticide content in their product. Joint advertisements have
been issued by Pepsi and Coca-Cola negating such claims.
'

4.6 DETERMINING THE ADVERTISING SPEND

_.

'

The advertising spend is a part of the total communications spend of a company. The company must
therefore decide the percentage of advertising spend as one of the components of its integrated
communication campaign.

4.6.1

Percentage of Sales Method

The advertising budget is a specified percentage of current or expected sales revenue. The percentage
may be based on company or industry tradition. The method is easy to apply and discourages costly
advertising wars if all competitors keep to their traditional percentage. The disadvantage of the method
is that it encourages a decline in advertising expenditure when sales decline, which causes a further
downward spiral of sales. It ignores market opportunities which may suggest the need to spend more
(or less) on advertising. An opportunity to build market share may suggest raising advertising expenditure
and a decision to harvest a product would suggest reducing expenditure. The method fails to provide a
means of determining the correct percentage to use.

4.6.2

Affordability Method

Executive judgement decides on the affordable amount that can be spent on advertising. Its use as the
sole criterion for budget setting neglects the communication objectives and the market opportunity that
may exist to grow sales and profits. It is unscientific in nature and cannot be applied in large companies.

4.6.3

Matching Competition

Some companies match expenditures or use a similar percentage of sales figures as their major competitors.
Matching expenditure assumes that the competition has arrived at the correct level of expenditure and
ignores the market opportunities and communication objectives of the company. The competitors
objectives and strategic direction could be at variance from those of the company, making such a
method questionable. Using a similar percentage of sales ratio is justified only if it can be shown to
prevent costly advertising wars.
....

4.6.4

Objective and Task Method

The advertising budget depends on the communication objectives and costs of tasks required to achieve
them. If the objective is to increase the awareness of a brand name from 30 per cent to 40 per cent, the
costs of developing the necessary campaign and using appropriate media (TV, posters) would be made.
The total costs would represent the advertising budget. In practice, the effort to achieve the
specifiedawareness increase may be difficult to estimate. But the method is scientific, and encourages the
management to think about objectives, media exposure levels and resulting costs.
The advertising budgeting decision is a highly political process. 19Finance argues for monetary
caution whereas marketing personnel who view advertising as a method of long term brand building,
support high advertising spend.
The percentage of advertising spend would depend on several factors such as characteristics of
the industry and the firms resources. Usually a combination of methods may be used to arrive at the
spend, and modifications may be required during implementation of the communication strategy.

4.7 MESSAGE DECISIONS

Advertising is not an art form or a creative outlet. It certainly cannot function on intuition, without the
backing of sufficient research. A creative advertisement is the one which increases sales.
Making an effective advertisement (the one that enhances sales) requires a lot of research about
the brand that is going to be advertised, the competitor's offerings and the target customer. A big idea
(one that sells more product for several years) is always the outcome of a lot of research. The advertiser
should fall in love with the product before he touches the story board. The sure way to kill a product is
to assign it to an advertiser who does not get excited at the prospect of handling the advertising of the
product. The product and its customers have to become part of the unconscious self of the advertiser.
Before a message can be decided, an understanding of the advertising platform should be made.
The advertising platform is the basic selling proposition that is used in the advertisement. The platform
should be important to the target audience and should communicate its competitive advantage. Therefore
an understanding of the motives and choice criteria of the target audience is essential for effective
advertising.
Advertising is often used to build a brand image. Image means personality. Brand personality is
the message that the advertisement seeks to convey. It includes the brand name, symbols, advertising
style, packaging, price and the nature of the product that is being sold. Brand personality acts as a form
of self expression, reassurance, a communicator of the brands function and as an indicator of
trustworthiness. The value of the brand personality to consumers will differ by product category. In
self-expressive product categories such as perfumes, cigarettes and clothing, brands act as a badge for
making public an aspect of personality.
Brand personality can also act as a reassurance. The personality of a mass brand may convey
sophistication and upper classness which may not necessarily correspond with the type of people who
buy the brand. What the imagery is doing is providing the reassurance that the brand is socially acceptable.
In the long run, the marketer who builds the most sharply defined image of his brand wins the
maximum market share.
Standardizing advertising is a growing preoccupation of multinational companies. Proponents of
standardization point to customer convergence, who share common experience, needs and motivations.
Even when advertisers try to penetrate foreign markets they use stereotype images of the local population.
Else they simply assume that the type of advertising message that is appropriate in the home country
would be relevant in foreign markets as well.Multinational companies will have to reconsider their strategy of
standardizing
advertising
messages.
Whatever the commonality between customers of different countries, regions, and cultures, there is and
always will be significant differences between them. Advertisements will have to address these differences
rather than ride roughshod over them. A strong brand is built by addressing itself to differences between
segments. A brand that ignores differences between segments provides opportunities to competitors to
creep in and design brands to address these differences.
Sometimes, when marketers are selling parity products, or products where superiority may be
extremely insignificant or difficult to convey, it may suffice to make the message clearer, more honest
and more informative than the competitors. More persuasive communication may work better than
19 " Piercy, N. (1987), The Marketing Budgeting Process: Marketing Management Implications, Journal of Marketing,
51 (4), 45-59.

emphasizing a better product because there is no rally better product.

An advertising message translates the platform into words, symbols and illustrations which are
attractive and meaningful to the target audience. The secret is to use the right appeal.
Print advertisement:
A print advertisement comprises the headline, the body copy and the illustration.
Some guidelines for a print advertisement are:20
Readers first see the illustration, then read the headline and then the body copy. An advertisement
should follow the same sequence the illustration at the top, followed by the headline and then
the copy after the headline.
Overuse of colours may distract consumers.
The advertisement should contain a headline which might promise a benefit, deliver news, offer
a service, identify a problem or quote a satisfied customer.
A longer headline has better chances of being read than a shorter headline.
The headline or the illustration should contain the brand name noticeably, which must subsequently
be repeated as many times as possible in the advertisement. Most people who read a press
advertisement read the headline but not the body copy. The company or brand name should
appear in the headline, otherwise the reader may not know the advertiser. The benefit should be
communicated in the same line as well. Even if no more of the copy is read, the advertiser has got
the message across by means of a strong headline.
The message appeal (benefit) should be important to the target audience.
The appeal should be specific, and evidence to support the claim should be provided.
The message should be couched in the customers language and not the language of the advertiser.
The illustration can entice a reader by telling a story, using characters that the customers can
identify with, emphasizing on the product or its packaging, showing results of product usage.
The illustration should sell the product benefits by using pictures.
In body copy, long paragraphs and sentences should be avoided; white space should be used to
avoid it looking too heavy to read.
Print ads should be in black'coloured letters on a white space, and not the other way around.
The use of capitals and outlandish fonts obstructs reading.

20 Ogilvy. D. (1983), Ogilvy on Advertising, London: Pan.

TV commercials:
TV commercials are of short duration. Most communicate only one major
selling
appeal called the single-minded proposition, which is the single most motivating and differentiating thing
that can be said about the brand. 21TV advertising uses one of the three creative approaches. The benefits
approach
suggests
a
reason for the customer to buy. The second approach is subtle. No overt benefit is mentioned. The
intention is to involve the viewer by telling a story. The third appeal attempts to register the brand as
significant in the market and is called salience advertising. The assumption is that advertising which
stands out as being different, will cause the brand to stand our as different.
Advertising formats
; .
- Some advertising formats are more effective than others on television.
Humorous advertisements sell but not many writers can write funny commercials. Therefore
they should not be attempted unless the advertiser has real talent for them.
In slice-of-iifc advertisements, an actor argues with another about the merits of a product, in a
setting which approximates real life. Such realistic and charming slice-of-lite advertisements areeffective. '
The most effective testimonial advertisements are those which show loyal users of the product
testifying to its virtues when they do not know that they are being filmed. The interviewer
pretends to find faults with the product and the loyal customer defends the product with tar more
conviction than if the interviewer simply asked him what he thought of it. When an advertiser has
to pick loyal users to testify, he should avoid those who would give polished performances. The
viewers would think they were professional actors. The more amateurish the performance, the
more credible is the testimonial to the audience.
Product demonstration is also able to persuade. Product demonstrations need not be boring. An
ad demonstrating the effectiveness of a glue showed the glue being applied to the soles of the
announcer's shoes and hanging him upside down from the ceiling.
Advertisements that compare the advertised product with those of the competitor by identifying
the competitor by name are less believable and more confusing than advertisements which do
not. Tie brand which is being run down in the advertisement is remembered more by the viewers.
Advertisements showing the advertised product providing solutions to common problems also
work.
.
...;
...
Advertisements in which a pitchman extols the virtues of the product are above average in
changing brand preference. Such ads are particularly useful for announcing new products,
In some advertisements, a character is used to sell the product for a long time. The character
becomes the living symbol of the product. Provided they are relevant to the product, characters
are above average in their ability to change brand-preference.
Advertisements which give the viewer a rational reason for buying the advertised product are
slightly above average in effectiveness. Though advertisers believe that the customers do not
care how the product is made, if the company is employing some novel process to make the
product, customers do get influenced.
Advertisements which contain news are above average in changing customers brand preferences.
When advertisers have news to tell, which may not be often, they should not underplay it.

21 Saatchl and Saatchi Comptom (1985), Preparing the Advertising Brief, 9.

It is difficult to quantify the effectiveness of emotions in an advertisement. Most advertisers

believe that advertisements with nostalgia, charm, and sentimentality are very effective. Emotions
can be as effective as any rational appeal, particularly when there is nothing unique to say about
the product. Most clients and also some advertisers believe that rational appeals for products are
more important for products than consumers think they are. They believe that if an advertisementis
going to be successful, if it is going to stand out front the clutter, it must be objective about the
benefits of the advertised product. But it is difficult to portray rational benefits of products like
ice-creams, cigarettes, candies, beer. etc.
Testimonials by celebrities are below average in their ability to change brand preferences.
Customers assume that the celebrity has been bought. Most of the time customers remember the
celebrity but forget the product.
Cartoons sell products to children but they are below average in selling to adults. T hey do not
hold the viewer is attention and are less persuasive.
Musicals are not effective. Probably customers tune in to the music so intently that they tune out
the advertised product.
Making television advertising more effective: Advertising on television can be improved by focusing on
making consumers remember the advertised brand and its distinctive offering, rather than focus only on
creative appeals.
Brand name: A very large percentage of customers remember an advertisement but forget the
name of the advertised brand. Worse, they attribute the,commercial to a competing brand. The
advertiser has to take care to emphasize the name of the brand in the advertisement. The brand
name should appear within the first ten seconds of the advertisement and should be repeated as
often as possible. It is possible to do that without irritating the viewer. Like everything else in
advertising, the brand name can be mentioned more frequently in an advertisement by being
devising creative ways of doing it. A popular device is to play games with the brand name like
spelling it with accompanying music or playing a jingle with the brand name featuring in it
prominently.
Package: Advertisements which end by showing the package are more effective in changing
brand preference than advertisements which do not.
Appetizing food: In advertisements for food, the more appetizing the product looks, the more it
sells. It has been found that food in motion looks very appetizing. Showing ice cream in the act
of being scooped looks very appetizing.
Close-ups: When the product is the hero of the advertisement, a close-up of the product is a good
idea. The closer a look the viewers have of an ice-cream, the more they desire it.
Emphatic opening: If an advertisement grabs attention in the first frame with a visual surprise, it
has a better chance of holding the viewer. People screen out a lot of advertisements because they
have dull openings. The advertiser knows that the next visuals are great but the viewers do not.
They already have switched channels or moved out of the room after seeing the first frame.
Jingles: There are successful advertisements which sing the sales pitch but jingles are below
average in changing brand preference. An advertiser should never use a jingle without trying it on
people who have not read the script. If they cannot understand the words the advertisement
should not be aired. Playing background music is not harmful but can be distracting.
Voice-over: It is difficult to hold the audience if a voice-over is used. It is better to have the actors
talk on camera.

 Supers: The promise can be reinforced by setting it in type and superimposing it oyer the video,
while the soundtrack speaks the words. The words in the super should be exactly the same as the
spoken words. Any divergence confuses the viewer.Avoid visual banality: The viewer will pay
attention
if
he
sees
something
that
he
has
never
seen
before. Customers see thousands of advertisements every year but the few they remember are
the ones with uniquevisual impacts.
Scenes: Not many advertisers have the talent to use many scenes without confusing people. In
general, advertisements with plenty of short scenes are below average in changing brand preference.
Mnemonics: A visual device can be repeated over a long time. It increases the brand identification
and reminds people of the brands promise.
Product in use: It is useful to show the product being used, and, if possible the end result of using
it. An advertisement of diapers should show how the diaper keeps the baby dry.
Miscomprehension: Most advertisements arc not understood by a large number of viewers. The
advertisement should state its message very clearly.
Radio commercials: Advertising on radio must draw customers to listen, and then remember the brand
and its promise.
The first thing a radio advertisement has to do is to get people to listen. Surprising them and
arousing their curiosity is very important. Once people are listening, the advertisement should talk to
them as one human being to another. Listeners have to be involved and charmed. Make them laugh.
Because radio is a high frequency medium, people quickly get tired of listening to the same advertisement.
So several advertisements should be made.
The following suggestions are useful:
Identify the brand early in the advertisement.
Identify the brand often in the advertisement.
Promise the listener a benefit early in the advertisement.
Repeat the benefit often.
Celebrity endorsements: Celebrity endorsements should be planned thoughtfully. Celebrity values and
personality must match those of the brand. Moreover the celebrity should not be overexposed.
Featuring a celebrity in an advertisement has its advantages. People look up and watch the
advertisement of even an obscure brand when the familiar face of the celebrity pops on the television
screen The advertisement and even the brand sometimes, is talked about. There is certainly an initial
euphoria when a celebrity signs up for a brand and this is good for any brand, very well known or
absolutely fresh. But celebrities often demand exorbitant prices and they agree after a lot of persuasion.
However celebrities have immense potential to shape the brand identity because of peoples affiliation
towards them and their inclination to believe them.
All the same most celebrities are being wasted and tliat is a shame. Endorsement by celebrities
has to be rethought and restrategized. First of all the selection of the celebrity has to be done carefully.
The first one who consents should not be hired automatically. The values and the personality of the
celebrity have to match closely with the values and the personality that the promoter wants to bestow on
the brand. The celebrity has to be attached with the brand for a long time since the persona of the
celebrity has to be transferred to the brand. This is a subtle and creeping process and takes a long time.
It is important that the celebrity is not associated with other brands that are projecting values and
personalities that are very different from, or in conflict with the brand in question. If this happens
customers get confused about personalities and values of both the brand and the celebrity and there is
serious erosion in the worth of the brand and the celebrity. If the celebrity becomes reckless in signing
for brands, he is reduced to the level of a slightly more illustrious model. This has to be avoided.Advertising
and Branding 37
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A responsible brand would help the celebrity decide the portfolio of brands that he could endorse. His
appearance in the advertisement of one brand should remind viewers of other brands with the same
values and personalities in which the celebrity has featured. Therefore each time the celebrity appears on
the screen, there is some reinforcement of the values and personalities of all the brands he is associated
with. In fact a group of similar brands should draw the celebrity in a contract limiting his association
with all and sundry brands. A celebrity is a potent marketing tool. He cannot be allowed to go astray and
destroy brand value all around him.

Business advertising: It is cheaper to reach a business customer through advertising than through
a salesmans visit, letter or phone call. But even a very effective advertisement is not likely to close a
sale. Follow-up action is necessary. But advertising pre-sells the product and when a salesman visits a
business customer, the latter is positively predisposed towards the salesmans product if he has liked
what he has seen in the advertisement. Advertisements also generate inquiries from business customers.
Advertising of business products is also important because there are many people in the buyers organization
who influence the buying decision and the salesman cannot know who they all are, and what their
respective interests in the purchase are. Advertisement reaches these people, and moreover people who
set specifications for the product that the company proposes to buy refer to advertisements to know
what is being offered in the market.
The techniques that work in business-to-business advertising include promising the customer a
benefit, news, testimonials and useful information.
The advertiser's promise should be important to the customers. The advertiser has to conduct
research to find out the customers choice criteria. It is always tempting for an advertiser to portray his
strengths in his ads but this idea never works unless, by sheer coincidence, the advertisers strengths
and the customers concerns match. If customers are looking for timeliness of supplies from the seller,
the advertisement should promise timeliness of supplies against all odds that the advertiser might face. It
is also important to make the promise specific. Instead of mouthing generalities, the ad should promise
the money that the buyer can save, the increase in productivity that he can affect, and other very
specific performances that the buyer can achieve if he bought the advertised product. The advertiser
should always remember that he is talking to specialists who know what they want from the products
they propose to buy. Such specialists arc often put off by the advertisers attempts to sidetrack from the
main issues in their ads.
Testimonials from experts in reputed companies are useful in influencing business customers.
Demonstrations are useful when the advertised product is compared with competitors products.
It is always helpful if the demonstration is so simple that the customers can perform it themselves.
Customers can then validate the claims that the advertiser is making in the ad.
Information that appears in the form of news appears credible to business buyers. A company
selling to businesses should prominently feature its news in technical journals.
Readers scan advertisements in technical journals looking for new solutions to their problems.
It has also been found out that an advertisement is more effective than an article in the same journal.
Therefore advertising in technical journals can be helpful in generating enquiries.

The layout of business ads should be simple. Flamboyant designs, irrelevant photographs and
uncharacteristic headlines should be avoided. The ad should look more like an editorial - serious and to
the point. Most business products look boring but that is what their customers want to see. It is always
advisable to feature the product in the ad, rather than try to titillate the readers in business-to-business
advertising.Far more readers read the headlines than the body copy. The headline should catch the readers
fancy. The headline should promise a benefit, or deliver news, or offer a service, or tell an important
story, or recognize a problem, or quote a satisfied customer. Fewer readers read the body copy but
those who take the trouble to read it are the ones who are genuinely interested in the product. What is
said in the body copy will determine the success of the ad. Since more can be written about a business
product the advertiser should write a long copy. A long copy attracts more readers than a short copy, :
Captions should always appear under all photographs. More people read the captions than the
body copy. The captions should be used to sell and should be treated as mini-advertisements, i.e.,
efforts should be made to make them informative and act as a sales pitch.
Four-colour ads of business products attract more readers than black and white ads.
Television should be used as a medium by business-to-business advertisers. The audiences of
many sports and news programmes are business executives and it makes sense to advertise business
products during such programmes. Such ads should be longer than the normal ads for consumer
products as more information has to be provided to business customers. An advertiser can sacrifice
frequency to deliver a thorough and detailed sales pitch. Even inexpensive television commercials for
industrial products can be very effective if they come directly to the point and offer something of
genuine interest.
Advertising can be used to differentiate seemingly commodity industrial products. Such products
can differentiate themselves either by low cost or by having a reputation for quality or service. Advertising
can spread the news of the company's price advantage or its reputation for quality or service.
Inquiries that an advertisement generates come from customers who are genuinely interested in
the product and a substantial number of them end up buying the product. Toll-free numbers should
always be put in advertisements to make the inquiry easy and fast. Large numbers of readers of trade
journals use these numbers. The body copy should always close with the companys offer, its address
and phone number.

4.8 MEDIA DECISIONS

As media costs rise and brands become more sharply targeted, media decisions become important. Two
key media decisions are choice of media class (TV, press, radio, outdoor, the Internet, phone) and media
vehicle (a particular magazine/programme).

4.8.1

The Media Class Decision

The media planner has the choice of using TV, press (magazine, newspaper, leaflets, inserts), cinema,
outdoor (posters), radio, the Internet, mobile phones, or some combination of media classes.
Five considerations will be taken into account;
Creative factors: The key question is whether the medium allows the communication objective to
be realized. If the objective is to position the brand as having high status aspirational personality,
TV would be a better option than posters. If the communication objective is to remind the target
audience of a brands existence, a poster campaign may suffice.
Size of advertising budget: Some media are more expensive than others.

Relative cost per opportunity to see: Target audience may be reached much more cheaply using
one medium rather than another. The calculation of opportunity to see differs according to in
turn media class which the makes comparisons difficult. An opportunity to see in case of apublication
would be if its is looked at for at least two minutes. In case of posters it would be the
traffic volume at the site.
Competitive activity: Whether to compete in the same media or to dominate an alternative medium
are two conflicting philosophies. The decision to compete in the same medium is taken because
of a belief that the medium chosen by major competition is most effective and to ignore it would
be to hand the competition a massive communication advantage. Domination of an alternative
medium is sensible for third or fourth players in a product market who cannot match advertising
budgets of the two big competitors. If major players use TV, third or fourth competitors might
choose posters or press where it could dominate, achieving higher impact than if it followed the
competition into TV.
For many consumer goods producers, views of retail trade influences choice of media class.
Advertising is used by sales people to convince retail trade to increase shelf space of existing
brands and to stock new brands. Supermarkets favour TV advertising in some product markets.
A combination of media classes is used in an advertising campaign to take advantage of their
relative strengths and weaknesses. A new car launch may use TV to gain awareness and project a
desired image, with the press being used to supply more technical information. Later, posters may be
used as a support to the early mediums to remind and reinforce earlier messages.
Various media are:
Television: Advertisers can demonstrate the product in action. The capability of TV to combine
colour, movement and sound means that it is often used when brand building is required. It is
easier to create a desirable atmosphere using TV than other media. Imagination is the only limitation
in this medium. Advertisements can be repeated over a short time period. But it is a transitory
medium so consumers cannot refer back to the advertisement once it has been broadcast.
Press: Factual information can be presented effectively. Readers are in control of how long they
take to absorb the information. Advertisements can also be re-examined at a later date. But it
lacks movement and sound, and advertisements in newspapers and magazines compete with
editorials for the readers attention.
Posters: Simplicity is required in the creative work because people will have the opportunity only
to glance at a poster. Brand names need to be written in the largest size possible, strong and pure
colours should be used, and pictures showing the product, its usage or the selling proposition
should be used. It is usually used as a support medium.
Cinema: Advertisements can benefit from colour, movement and sound Exposure is high due to
the captive nature of the audience. Repetition may be difficult to achieve given the fact that
people visit the cinema intermittently, but the nature of the audience is predictable.
Radio: Creativity is limited to sound. It is better suited to communicating factual information
than attempting to create a brand image. Nature of audiences changes during the day. The cost of
the medium is low.
The Internet is another kind of media that is being used by advertisers. It is inexpensive, but
getting the attention of viewers is difficult. Mobile phones are also emerging as an advertising medium.

4.8.2

Selection of the Media Vehicle

The media vehicle decision concerns the choice of the particular newspaper, magazine, TV spot, poster
site, etc. Although creative considerations still play a part, cost per thousand customers reached is more
dominant. This requires readership and viewership figures, for instance, number of pedestrians thatcross the
site for posters, actual cinema admissions, number of subscribers of a magazine, number of
people watching a TV programme, etc. Calculation of overall cost per thousand customers reached is
easy once audience size is known. Media buying is a specialized skill and a lot of money can be saved by
skilled and powerful buyers.

4.9EXECUTING CAMPAIGN
Once advertisements have been produced and the media selected, they are sent to the relevant media for
publication or transmission. ft has to be ensured that the right advertisements reach the media at the
right time. Each media vehicle has its own deadline after which publications or transmissions may not be
possible.

4.10EVALUATING ADVERTISING EFFECTIVENESS

Measurement of advertising effectiveness is extremely important. Effective advertisements have a positive
impact on the sales of a brand. Several clients or advertising agencies may not set stringent standards to
measure advertising effectiveness because all the players involved have some vested interests. The
agency earns money and will hate the idea of being paid only for effective advertisements. The advertising/
marketing manager is responsible for the advertising investment and obviously would not like to be told
that he has wasted precious resources on an ineffective advertisement. And at the end of the day, even
the company may not want to admit that the advertisement was a failure.
Quite often, the likeability of the advertisement is equated with its success. And most companies
and agencies believe that advertising can do no harm. At the worst, it may be ineffective. But research
reveals that bad advertising is capable of decreasing sales.
The three relevant questions about measuring effectiveness are what, when and how to evaluate
advertising.

4.10.1
What Should be Measured?
What should be measured depends on the objective that the advertising campaign is trying to achieve.
Advertising objectives include gaining awareness, trial, positioning, removing misconceptions and
reminding and providing support for salespeople. By setting targets for each objective, advertising
research can assess whether objectives have been achieved. For instance, a campaign may have the
objective of increasing awareness from 10 per cent to 20 per cent. If advertising objectives are couched
in sales or market share terms, advertising research would monitor the sales or market share effects of
advertising. If trade objectives are important, distribution and stock levels of wholesalers/retailers and
perhaps their attitude and awareness should also be measured.
However, the objective of advertising is not to merely make people remember or like the
advertisements. Recall of advertisements can at best be the first step leading to Sales. Sometimes, it may
be very easy to create an advertisement with high recall or liking (by using celebrities or other gimmicks),
though the ad may be completely useless in generating sales. Therefore, the best measure of effectiveness
of advertising is its ability to generate sales (while post-testing) or cause a change in brand preference
(while pre-testing).
4.10.2

When and How to Measure?

Measurement can take place before, during and after a campaign. Pre-testing takes place before the
campaign is run and is a part of the creative process. In TV advertising, rough ads are created and tested
with a target audience. A focus group is shown alternative commercials and asked to discuss their
likes,dislikes and understanding of each one. Stills from the proposed commercial are shown on a TV
screen
with a voice-over. This is an inexpensive but realistic portrayal of what the commercial will be like if it
is shot. The method provides important inputs from target customers themselves rather than solely
relying on advertising agency views. But critics say that the impact of a commercial that is repeated
many times cannot be captured in a two hour group discussion. There are campaigns which were

rejected by target consumers in the pre-test but were enormously successful when executed.22
When pre-testing TV commercials, agencies pay great attention to the way in which the
advertisement communicates to its limited target audience. Attitudes to the brand, copy comprehension,
and measurement of interest created in the brand by the advertisement are monitored by the agencies.
Press advertisements are pro-tested using folder techniques. 23 if two advertisements are being
compared, two folders are prepared containing a number of advertisements with which test ads will
have to compete for attention. The test ads are placed in the same position in each folder. Two matched
samples of around 50-100 target consumers are given one of the folders and asked to go through it.
Respondents are then asked to state which advertisements the}' have noticed (unaided recall). They are
then shown a list of advertised brands and asked such questions as which one was most liked which
was least disliked and which they intend to buy. Attention is gradually focused on the test advertisement
and respondents are asked to recall its content.
Once the campaign has run, post-testing can be used to assess its effectiveness. Checking how
well an advertisement has worked can provide the information necessary to plan future campaigns.
Image/attitude changes, statistical analysis of sales data, usage rate and changes in usage are popular TV
post-testing techniques. Image/attitude change is a sensitive measure that is a good predictor of
behavioural
change. Agencies which favour actual sales measures argue that despite difficulties in establishing the
cause and effect, sales change is the ultimate objective of advertising and therefore is the only meaningful
measure. Recall is also popular, despite evidence suggesting that recall may not be a valid measure of
advertising effectiveness. But if the advertisement is seen and remembered, it reassures the client. It
may not, however, suggest that sales have increased. It only indicates an affective media planning and
execution.
In press advertisements, spontaneous recall of a brand name can be measured before and after a
press campaign. Readers of periodicals in which the advertisement appeared could be asked to recall the
advertisements they saw. And specific questions can be directed at the test ad and its content. Press ads
that incorporate coupons to promote enquiries or actual sales can be evaluated by totalling the number of
enquiries or value of sales generated.

22 * Bell, E. (19921, Lies, Damned Lies and Research, Observer, 28 June, 46.
23 Crimp, M. (1990), The Marketing Research Process, London: Prentice-Hall, 180.

4.11

It still may not be possible to measure the real effectiveness of an advertisement because
other
communications arc reaching the customers simultaneously and it is impossible to isolate the effect
of
the advertisement. But it helps to have in place a system of measuring advertising effectiveness. The
advertisers become clear about what they have to achieve for the brand, and they realize that they
cannot spend their clients money to pursue their own creative urges. They will eventually learn to
channelize their creativity to earn dollars for their clients. It is always a tough job to a make a
creative
person accountable but having a system to measure the effectiveness of his creative output brings
some
responsibility to the way he pursues his craft. Some of them may resent being evaluated and may
opt
out, but then they should have realized that advertising represents a frontier where creativity and
commerce
meet. One without the other is simply untenable. IMPROVING ADVERTISING

RESULTS

It is important to understand the customer mindset to improve advertising results.

Advertising is used to persuade people to buy brands. An important assumption made by marketers
and advertisers while creating or using advertising is that it can actually influence or persuade customers
to buy brands. This argument still remains contentious.
A customer goes through several processes before making his decision to purchase or not to
purchase, a brand. The first barrier to be overcome by any advertiser is to expose the customer to the
communication. Thereafter, the customer must understand it correctly, store it in his memory' and make
a purchase decision on the basis of such information. However, it is well known that all these processes
are choices exercised by the customer. He may or may not be exposed to the advertisement, may not
interpret it correctly, may not remember it or may not purchase the advertised product on the basis of
such stored information. Therefore, all the processes are selective in nature - selective exposure,
selective perception, selective retention and selective decision.
For an advertisement to be successful, i.e., for it to go through these processes and make the
customer purchase the product, the advertiser has to understand these selection processes carefully.
The most important questions that have to be answered by the advertiser are: How does the
customer select what he wants to see? What influences his process of understanding an advertisement?
Which messages is he likely to retain more? On what basis are decisions to purchase made by him?
The customer is more likely to select advertisements that conform to his existing attitudes
(liis likes or dislikes towards an objcct/his predispositions). He is also more likely to remember
them without distortions and act on their basis. Therefore, most advertisements should reinforce
the existing attitudes of the customer.
Customers who are already predisposed to receiving communication about certain products
are more likely to notice the advertisements and remember them. They are also more likely to
act upon them (purchase).
If both the above suppositions were true, advertisers are bound to feel disappointed, as most of
the advertisements are made with the objective of changing either customer attitudes or their behaviour
(purchase). And if the above proposition were true, changing customers would be impossible, This is
not correct. Advertising can work wonders in achieving its intended objectives. But certain conditions
need to pre-exist the advertisement itself, in order to make the communication as effective as planned.
Customer attitudes and behaviour changes are easier to achieve when:
Such attitudes and behaviour are inconsequential to the customer. Customers hold weak attitudes
towards objects that are not important to them, or for those products that are not close to the
values held by them (for instance, products that are not closely linked to their cultural values).
Non-habit forming behaviour is easier to change. In these cases, the attitudes and behaviour are
not closely held by customers, because of winch the customer resistance to change is lower.
Advertisements can attempt to influence and change such attitudes and behaviour.

 Some factors act as mediators in a customers attitude formation, and his behaviour. Mediating
factors that are likely to be part of customer decision processes are his socio-economic background
(age, income, gender, etc.), his personality and the social environment (culture, reference group,
-social class, etc.) in which he operates. If the influence of these mediators is either absent or
inconsequential (for the product), the advertisements created to influence or change his attitudes
or behaviour can work better.When mediating factors themselves are willing to change, and they are
important
to
the
customer,
he can be persuaded to change along with them.
It is thus important for advertisers to understand the triggers for various customers. Different
groups of customers hold varying attitudes and behaviour for the same product. They arc also influenced
by the mediating factors differentially. Therefore, even though the same product may be satisfying the
same needs for various customers, they may not be influenced by the same appeals. It is important for
advertisers to understand what can convince various groups of customers the most so that messages
can reach customers better and be more effective. Advertisers must use an advertising campaign that
uses a single positioning appeal, with several executions or appeals so that they can reach out to these
groups of customers.
It is well documented that customers buy different products as their needs vary. However, it is
also true that the same customer may buy a product for various reasons. Of these reasons, some may
be more important to him than others. So it is important for advertisers to lend various appeals to the
same product over a period of time so that they can increase the chances of a more persuasive
communication with the same customer.

4.12

ORGANIZING A. CAMPAIGN DEVELOPMENT

An advertiser has four options when organizing a campaign development:

Small companies develop the advertising in cooperation with people from the media. Advertising
copy is written by someone from the company but artwork and the final layout of the advertisement
isdc 2 by newspaj o . a e. Alt lativeb n ial io st lira f id facilities
for commercials to be produced.
The advertising function is conducted in-house by creating an advertising department staffed
with copy writers, media buyers, and production personnel. Total control of the advertising
function is within the company but since media buying is on behalf of only one company, buying
power is low.
Because of specialist skills that are required for developing an advertising campaign, the company
opts to work with an advertising agency. Larger agencies offer full service comprising creative
w ork, media planning i IC buying ph r ning and strategy fevt lopment and market res< arch and
production. Key figures in the development of a campaign are account directors and executives
who liaise with the client companies and coordinate the work of other departments on behalf of
their clients. Because agencies work for many clients, they have a wide range of experience and
can provide an objective outsiders view of what is required, and how problems can be solved.
Use in-house staff for some advertising functions and use specialist agencies for others. Media
specialists control large volume of business and have enormous buying power when negotiating
media prices. An advertiser can employ services of a creative hot shop to supplement their own
or their full service agencys skills.

4.12.1

Agency Selection

Agency selection begins

by clearly defining requirements. A
furniture chain may
place more emphasis
on media selection so
that the lowest cost per thousand can be
achieved for their straightforward black
and white product advertisements. A company
marketing drinks or perfumes may place more
priority
on creative talents of prospective agencies
A company can sift advertisements in
various media and identify ads that they consider brilliant.
Agencies that made those advertisements can be evaluated further for their suitability.
Selection procedure is as follows:11 ,

Define requirements
Develop a pool list of agencies
Credentials pitch by agencies
Issue brief to short listed agencies
Full agency presentations
Analysis of pitch
Agree contract details

. Announce winner
When briefing agencies, the following checklist may be used:
1. Product history: Sales, market share, trends, price, competition, past campaigns
2.

Product features and benefits: Products competitive advantages and disadvantages

3.

Objectives: Products marketing and communication objectives

4.

Target audience: Who they are. their motives and choice criteria

5.

Timetable: When the agency presentation is required, when the campaign is planned to commence

6. Budget: How much money is available, which may affect choice of media
Analysis of agency presentation depends on six key questions:
How good is their creative media/research work?
Does the agency have people who you think you can work with?
Does your account appear important to them?
What is their background? Who are their clients? How long have they worked with them? Is their
list growing or contracting? Have they worked in your field before, and if so. why did they lose
the account?
.
Are they a full sendee agency or do they contract out some function (for instance, media,
research!?
What do they charge? Do they charge fees as well as commission?

4.12.2

Agency Payment System

Traditionally, media owners gave a commission to agencies as a mode of payment. Advertising

agencies originally were set up on behalf of media owners who wished to provide advertising
services to enhance the likelihood of selling advertising space, so payment should be from them.
Media owners traditionally gave a 15 per cent discount on the list price to agencies. Large
advertisers (companies) have the power to demand some of the 15 per cent in the form of a
rebate.

Second method is by fees. Large clients advocate fees rather than commissions on the basis that
this removes a possible source of agency bias towards media that pay commission.Payment by results: This
involves measuring the effectiveness of the advertising campaign using marketing
research and basing payments on how well communication objectives have been achieved. Payments
might be based on how awareness levels have increased, brand image improved or intentions to buy rise
and in media buying (on savings generated).

4.13

SUMMARY

Advertising helps in building trust about brands. Consumers form positive perceptions about a brand
and have great trust, by the mere presence of advertising. The strategy for effective advertising suggests
that there should be a target audience for whom advertising is to be intended. Positioning involves
defining what the product does and who it is meant for. To create an awareness about the company, its
products and representatives, is another important objective of advertising.
The percentage of advertising spend depends on several factors such as characteristics of the
industry and the firms resources. An advertising message translates the platform into words, symbols
and illustrations which are attractive and meaningful to the target audience.
The many ways of sending messages is through print advertisement, TV' commercials, radio
commercials, celebrity endorsements, business advertising, etc. It has to be ensured that the right kind
of advertisements reach the media at the right time. It is important for advertisers to understand what
can convince various groups of customers the most, so that messages can reach customers better and
be more effective.

4.14

KEY TERMS

Target audience: Group of people at whom the advertising is aimed.

Positioning: Defining what the product is and who it is meant for.
Advertising spend: Part of the total communication spend of a company spent on advertising.
Jingles: Advertisements where die sales pitch is sung.

4.15

CHECK YOUR PROGRESS QUESTIONS

1. Define strong theory of advertisement.

2. How can a marketer better understand his target audience?
3. What are the objectives of advertisements?
4. Explain the affordability method.
5. Explain the objective and task method.
6. List the important guidelines for a print ad.
7. Explain testimonials as a format for ads
8. How can one use a brand name to make an ad more effective?
9. TV commercials are usually long and provide a lot of information. (True or False?)
10. List the useful suggestions that should be kept in mind while making a radio ad.
11. Which of the following best describes an evaluation of advertising after it has been developed but
before it has been rolled out nationally or internationally?
(a) Pretests
,
(b) Posttests

(c) Awareness, trial, usage study (d) Awareness, attitude, usage studyIn case of celebrity endorsements,
the persona of the celebrity should match closely with the
persona of the advertised brand, (True or False?)
13 When selecting a media for the purpose of advertisement, what consideration should be kept in
mind?
14. Briefly explain television as a media for posting advertisements.

4.16

QUESTIONS AND EXERCISES

1. Compare the situations where advertising and personal selling are more likely to feature strongly
in the promotional mix.
2. Describe the strong and weak theories of advertising. Which theory is more likely to apply to the
purchase of a car, and the purchase of a soap powder?
3. Advertising has no place in industrial marketing communication. Discuss.
4. Media class decisions should always be based on creative considerations, while media vehicle
decisions should solely be determined by cost per thousand calculations. Do you agree? Discuss.
5. Describe the structure of an advertising agency. Why should an advertiser prefer to use an
advertising agency rather than set up a full-service internal advertising department?
6. Explain the objectives of an advertising strategy.
7. What are the various ways of positioning a brand?
8. An advertising campaign usually fulfils several objectives simultaneously. Comment.
9. What are the essential prerequisites for designing an effective advertising message?
10. Explain the various essential guidelines for drafting an effective print advertising campaign.
11. What measures can be adopted by a company to improve the effectiveness of television
advertising?
12. How can radio advertising be made more effective?
13. Discuss the importance of advertising in business markets. How can business advertising be
made more effective?
14. Designing an advertising message is a creative process and an art. Therefore, no specific
preparedness is necessary to make an effective advertising message. Comment.
15. What parameters need to be measured while testing effectiveness? How should these criteria be
selected?
16. Differentiate between pre-testing and post-testing. What are the advantages of each of these
measurement techniques?
17. Explain some post-testing techniques for measuring advertising effectiveness.
18. Analyse the barriers in the measurement of advertising effectiveness.

4.17

FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/e; Pearson.

Murthy, Brand Management, Vikas Publishing House.

UNIT - 5

BRAND CREATION PRINCIPLES

UNIT OBJECTIVES

*
*

The creation of a brand

The creation of a corporate brand

equity

The various components of brand equity

The importance of brand awareness in brand

5.1 INTRODUCTION
In todays environment, building strong brands is becoming increasingly challenging. Increasing pressure
to compete on price, increased competition through product introduction, the fragmentation of advertising

and market segments are just samples of the pressures being faced by companies in todays competitive
environment. Thus, in this scenario only strong brands can survive.

5.2 BRAND CREATION

Core benefits are derived from core products. Toothpastes clean teeth. However, all toothpastes do the
same work. Branding allows marketers to create benefits that distinguish one brand from another. A
brand is created by enhancing a core product with distinctive values that distinguishes it from competition.
Brand building involves deep understanding of both functional and emotional values that customers use
when choosing between brands.
Brands are built by a combination of seven factors. These factors are discussed in detail in this
section.

(i) Quality
Building quality into the core product is of vital importance. The core product must achieve the basic
functional requirements expected of it. Higher quality brands gain greater market share and higher
profitability than their inferior rivals.1
It is important to understand how customers judge the quality of a product. Most customers do
not, while making a purchase, evaluate the performance of the product in detail. They categorize a
product to be of high quality when they find that it performs well on the parameters that are important
to them or when the product performs well on the parameters that they understand well. Customers rely
on cues to determine the quality of the product. A company should provide an exaggerated performance
in those product attributes which customers use to judge the quality of the product.
(ii) Positioning
In order to create a unique position in the marketplace that is unique requires the selection of the target
market lias to be carefully selected, This can be attained through service, brand name and image, design,
packaging, delivery and guarantees. Unique positioning will need a blend of these factors. When a
market is viewed in a unique manner, it automatically creates unique positioning concepts.
:

T r"""''v'

....'................... T" ::

!;'

Buzzetl, R. and B, Gale, The PIMS Principles (London: Collier Macmillan, 1987). Positioning is an opportunity
for
a
company
to
communicate
to
customers
what
it
strives
to
achieve for them, i.e., functional needs, and what it wants to mean to them, i.e., emotional needs.
Unfortunately, customers functional and emotional needs vary widely and one positioning plank will not
be attractive to the whole market. A brand which wants to achieve specific things for its customers and
wants to mean just a particular thing for them, will only have a small segment of customers who will be
attracted to the brand. The rest of the customers would not find the brand useful. It is always tempting
to dilute a brands position to make it attractive to a larger segment. A company should resist this
temptation. A brand focussed on the functional and emotional needs of a small set of customers will be
more successful in fetching a premium price, as it will be greatly valued by its target market. A focussed
brand is more likely to enhance its value proposition than a less focussed brand because the focussed
brand knows precisely what it has to achieve for its target market, and devotes its resources to achieve
it. A less focussed brand will dissipate its resources in trying to serve the varied needs of too wide a
segment.
1

(iii) Well-balanced communication

Brand positioning shapes customer perceptions. A brand needs to communicate its positioning to its
target market. Awareness needs to be built, brand personality projected and favourable attitudes built and
reinforced among customers. The brand theme needs to be reinforced through advertising, salespeople,
sponsorship, public relations and sales promotion campaigns.
Companies have often relied on advertising in the mass media to communicate brand positioning.
While some amount of advertising may be necessary to get the target markets initial attention, advertising
in the mass media is too impersonal and ephemeral for building a relationship between a brand and its
customers. The purpose of brand communication is to make customers feel attached to the brand. The
ultimate purpose is that customers should start considering the brand to be an important part of their life.
For such an attachment to develop, customers have to participate physically and emotionally in the
activities and celebrations of the brand. The company has to provide opportunities for such participation
to its customers. Sponsoring an event about which customers feel very strongly, will move the brand
closer to the customer. Joint participation of customers and the brand in some Social cause also cements
the relationship between the two. Public relations campaign celebrating the contribution and successes
of customers rather than extolling the companys achievement will make customers feel proud of their
association with the brand. Whenever customers come m contact with the company, the contact
employees should be living the brand values during their interaction with the customers. The idea is that
the company should be relentless in communicating its brand values to its target market and never miss
an opportunity to impress customers about what it stands for and what it can do for them,
(iv) Being first
Pioneer brands are more likely to be successful than follower brands. 1 Being a pioneer allows the brand
a chance to create an impression in the customers minds before the market is invaded by competition.
This provides an opportunity for the first brand to create distributor and customer loyalty. However, it
needs continued efforts in marketing and strength to survive attacks from competitors.
The pioneer gets an opportunity to shape the expectations of the customers about the product
category. If the pioneer is uncontested in the market for a considerable period, the pioneers product

- Urban G. L T. Carter. S Gaskin nnd T. Mucha, 'Market Share Rewards to Pioneering Brands: An Empirical
Analysis and Strategic implications, Management Science (1986), 645-59: Pioneering New Markets: A Comparison
of Market Share Win nets and Losers', International Journal of Research in Marketing (1986), 5-22.becomes the

benchmark against which products of late entrants will be evaluated. The pioneer gets time
to assess the needs of the customers and develop the capabilities to serve those needs. The pioneer
should develop a positioning focussed sharply on the needs of a segment so that late entrants do not find
unmet needs among customers of its target market. Most pioneers cannot resist the idea of serving the
whole market and often make the mistake of targeting the whole market through a diffused positioning.
Pioneers serve the whole market successfully with a compromise product for some time, but late
entrants arc able to discover segments with needs that the compromise product is not serving. Late
entrants carve out segments from these unmet customer needs. Late entrants change the structure of
the market from one big market with supposedly uniform needs to a market consisting of many segments,
each with a different set of needs. The pioneer may find that its compromise product is not particularly
suitable for any segment and the mass market in which the compromise product was acceptable is no
more there.
Pioneers should resist the temptation of serving the whole market with a common product, It
should focus on a particular segment of the market in very early phase of market development, or
identify segments and serve them with different products positioned differently from each other. It is
suicidal for pioneers to allow late entrants to discover segments in the market.

(v) Long-term perspective

Generating awareness, communicating brand values and building customer loyalty takes many years.
There must be a consistent high level of brand investment. If investment is cut, sales are unlikely to fall
substantially in the short term, but it will erode brand equity in terms of awareness levels, brand
associations,
intentions to buy. etc.
Customers fondly remember brands which may not have sold for years. In fact, some of the
customers refuse to believe that the brand is not selling. Customers grow up and live with their favourite
brands and though they may not be able to verbalize their relationship with their favourite brands, they
are always there in their memory. Companies should remember that there is nothing short term about a
brand, because the strength of a brand is depends on the strength of the association between the brand
and its customers. This association or any association for that matter takes time to build. The brand has
to establish credibility and trust with consistent performance and behaviour before customers start
associating with it. Moreover, companies have to ensure that this trust is not breached. Therefore, a
company has to invest in the brand-building process for a long time. However, the payoff is also for a
long time. Long after the company has stopped promoting the brand, customers continue to buy it.
Investment in a brand never goes waste. If a company has some extra resources about which it is not
sure where to invest, it should go ahead and invest it in strengthening its brand.
(vi) Internal marketing
wk
Many brands are corporate brands, i.e., the marketing focus is on building the company brand,-' Most
brands that are meant for the service* industry are marketed as corporate brands, .Internal staff should be
well trained because service companies depend on personal communication between the provider and
the user of a service. Brand values and strategies must be communicated to the staff.
Whenever customers come in contact with the company, they should experience the values
embodied in the brand being played out in real. For such an experience to take place, employees should
understand what type of interaction will reinforce the customers conviction in the brand. All employees

' King. S. Brand Building in the 1990s, Journal oj Marketing Management ( 1991); and P. Doyle. Building Successful
Brands: The Strategic Options. Journal of-Marketing Management (1989), 77-95.should

know what customers expect

from
the
brand
and
try
to
fulfill
those
expectations.
They
should
be explicitly told about their roles in the brand-building exercise and they should be expected to perform
these roles.

(vii) Repositioning
As markets change and new opportunities arise, repositioning is needed to build brands from their initial
base. A successful brand may be rendered irrelevant if needs and circumstances of customers in its
target market change. If this change is gradual and perceptible, the company can change its offerings
and communications gradually and manage to keep itself acceptable to the target market. But if the
change is sudden and the company finds itself out of tune with its market all of a sudden, the company
has two options. It may start targeting a different market where its positioning plank is still relevant, or
changes its offerings and communications drastically to make itself relevant to its original target market
again.
However, companies have been guilty of changing their positioning planks unnecessarily and far
too frequently. A decision about the positioning of a brand should be strictly dependent on the choice
criteria of customers and the capability of the company. A company should arrive at a positioning
strategy after conducting a thorough research of the customers choice criteria and an audit of its
resources and capabilities. A positioning plank is a reflection of the companys ability to serve a single or
a few elements of the customers choice criteria. The capability of a company and the choice criteria of
the customers does not change as frequently as companies change their positioning. A company which
repositions its brand frequently, confuses its customers about what it is really capable of achieving. The
brand loses its credibility among customers in the target market.

5.3 BUILDING A CORPORATE BRAND

To build a corporate brand, the corporate identity must align with the companys strategic direction, the
unage of the brand among customers, the companys culture and the value system of employees to
create harmony.
Tire traditional branding idea is that each product needs a unique identity. Ideally, a brand should
become so strong that it should become a synonym for the product itself. Companies like Procter and
Gamble and Unilever have followed the strategy of creating and nurturing separate brands for each of
their businesses. Some other companies like Microsoft and Sony promote a corporate brand instead of
branding individual products. The corporate brand is a single umbrella image that permeates all the
businesses of the company. However, corporate branding is not simply designing a new logo and
attaching it to every product. There is more to corporate branding than coining an attractive slogan,
tacking it on a wide range of products, and hoping that it will mean something to customers and
employees.
To create a corporate brand, the company has to take concerted steps to align vision, culture and
image of the company. Vision is the top managements aspirations for the company. Culture is the
organizations values, behaviours and attitudes, i.e., the way employees feel about the company. Image
is the outside worlds impression of the company. This outside world includes all stakeholders of the
company like customers, shareholders, the media, the public, and so on. The process of alignment will
start with exposing gaps between vision, culture and image.
The misalignment between vision and culture develops when the management moves the company
in a strategic direction that employees do not understand or support. The gap usually emerges

when senior management establishes a vision that is too ambitious for the organization to
implement.In such situations, There is a gap between reality and rhetoric. Management blames
employees
for
resisting change and employees are suspicious and cynical. Such scapegoat finding and mistrust
will wither the corporate brand from within. Three issues need to be addressed: (1) Does the
company practice the values it promotes? The downsizing that took place at IBM inspite of the
companys promises of lifelong employment created anxiety, depression, and fear among its
employees. In such situations, employees will not believe that the company will abide by the
promises made to the customers via the values of the corporate brand. They will not feel the
pressure to live by the values of the corporate brand. (2) Does the companys vision inspire all
subcultures? The engineers in research and development will have a different set of values and
priorities than those held by the marketing department. The organizational value, like customer
care, should be shared across the organization. The value customer care should guide the work
of the accounts department as much as it does of the marketing department. If a common value
does not permeate all the departments, the customer will not get what has bees, promised by tne
corporate brand. The brands promises to customers can be fulfilled oi.y by a concerted effort
of all the departments of the company. (3) Is the vision and culture of the company sufficiently
differentiated from thpt of the competitors? The vision and culture is the DNA of a company
which helps in standing out from competition. The vision and culture w:il decidewhat the company
will achieve for tire customer. If the vision and culture of me company are different from those
of its competitors, customers will not encounter a unique exper-eves with the company.
The image-culture gap arises when customers am confused about what the company stands for.
This happens when a company Iocs not keep " . its promises. A company needs to conqrare
what its employees arc saying and what its 'in Miners and other stakeholders are saying. The
following issues needs to be addressed: -i) W.iat images do stakeholders associate with the
company? The images are both real and pc-caved and emanate from an individuals feelings,
thoughts, and opinion as well :;s from the tacts of the company. The mrage of stakeholders can
be different from what, the company seeks to project. Stakeholders may discover that the culture
of the company is different from the one that is needed jf foe company has to achieve the desired
image. A company trying to project an image of being customer focussed will be thwarted in its
attempt if employees continue to treat easterners as intrusions in their lives. Customers will easily
sec through the facade, (if) In what ways do employees and stakeholders interact? Advertising
and public relations shapes a company's image, but stakehoders direct and personal encounters
with the organization seal or destroy a companys image. Such interactions should be carefully
planned and staged till the desired behaviour becomes intuitive, (ill) Do employees care what
stakeholders think of the company? The tmpk-ygps should feel hurt if important stakeholders,
like custc.oc/s, hold ah opinion centrin' to v hat they expect them to believe about the company.
There is not much chance of an alignment between the image and culture of the company if
employees are not concerned with -wim then customers think about them.
* The most brilliant strategic vision will- fail if they arc not aligned with \vhat customers want from
the company. The following issues arc important while addressing the image-vision gap: (i) Who
are the stakeholders? Many compahiesTtscover that their products reach a very different market
than the one they are targeting. Nike saw itself as a high-performance athletic shoe company that
attended only to the needs of top athletes. However, half of Nikcs sales .vere coming from
peoole who were wearing Nike shoes as a substitute for casual shoes. Though such untargeted
markets obviously find something attractive in the companys offerings, the company can cement
its relationship with them by aligning its strategies more strongly with their interests, (ii) What do
stakeholders want from the company? After Nike discovered that its shoes were sold as substitutes

for casual shoes, it produced a line of conventional casual shoes.

However,
customers
wanted
the same shoes that their athletic heroes were wearing and rejected the new line. Companies have
to probe deep to find the customers expectations and align its strategic vision with it. (iii) Is the
company effectively communicating its vision to its stakeholders? Customers are attracted to a
company when the company's communications are able to create certain expectations in their
minds. The expectations of the customers and the strategic vision of the company should align
for a profitable relationship between them. The company should be able to clearly communicate
what it wants to achieve for its customers.
' .i

5.4

V '

. */

BUILDING A BRAND WITHOUT USING MASS MEDIA24

Brands can be built without using the mass media, particularly advertising. Customers should be engaged
with the brand by other means. With advertising, the impact maybe unclear, however, building brands
without mass media should be encouraged.
Brand equity is accumulated by the customers experience with the brand. By choice or by habit,
a brand manager relies on advertising in the mass media to build a brand. A customers experience with
a brand when he is watching an advertisement is at best vicarious. At most times it involves absentmindedly
watching moving or still pictures that have sounds accompanying it. This is not the type of customer
experience one can hope to build a brand on. The experience has to be more physical, sentimental and
real. That is why building a great brand has to start with the decision not to rely solely or primarily on
advertising in the mass media.
When a brand manager eschews advertising in the mass media, he gets plenty of ideas of enhancing
customers' experience with the brand. A single-minded focus on advertising thwarts the emergence of
alternate methods of engaging with the customer. The method that a brand uses to engage with the
customer will depend upon die category it is a part of, its premiumness, its choice of target market and
other factors but the brand seeks a deeper involvement of customers with these methods The company
may take up a social cause and involve its customers in its campaigns. Alternatively, it can create an
environment in its retail premises, which the customers may savour. A company can build a brand
around exemplary service, a company can sponsor an event or sport which its customers are very
enthusiastic about or it can sponsor a club of its customers. The idea is to move the customer away
from being a mere consumer of its products and services to becoming more engaged with the brand and
its activities.V
A brand has a chance to convey its identity' when it engages with its customers. Therefore, the
choice of the programme becomes a critical decision. The programme has twin tasks, which have to be
accomplished simultaneously. The first is to increase awareness of the brand and the second is to
convey and reinforce the brand identity. A brand manager has to resolve to achieve the two goals by a
common programme. It is very' tempting to start with a programme to increase awareness of the brand
and leave the task of conveying the brand identity to some later time and some oilier programme.
Customers cannot be allowed to form their opinion of the brand while they are becoming aware of it.
The programme has to shape the opinion of the customers about the brand, while they are learning about
it. The best part of non-advertising programmes is that it is possible to increase the awareness of the
brand and convey its identity simultaneously.Advertising has a role in building a brand but it has to
supplement
other
programmes
that
are
in place to engage with customers. It should never become the mainstay of the brand-building

programme.

5.5 BRAND EQUITY25

Brand equity
A brand is an intangible asset for an organization. The concept of brand equity originated in order to
24 Joachimsthaler. Erich and David A. Aaker, Building Brands Without Mass Media, Harvard Business Review

(1997), 39-50.
25 . Aaker, David, Managing Brand Equity (The Free Press, 1991)

measure the financial worth of this significant, yet intangible entity.

Brand equity is the value and power of the brand that determines its worth. Brand equity can be
determined by measuring:
Tire price premium that the brand charges over unbranded products.
By assessing the additional volume of sales generated by the brand as compared to other brands
in the same category and/or segment.
From the share prices that the company commands in the market (particularly if the brand name
is the same as the corporate name, or customers can easily associate the performance of all the
individual brands of the company with the financial performance of the corporate).
Returns to shareholders.
Assessing the image of the brand for various parameters that arc deemed important.
Assessing the future earning potential of the brand.
Alternatively, a combination of the above methods. Some methods of measuring brand equity
involve the formulation of a multiplier by using a combination of the above methods. Such
multipliers as brand strength or brand esteem can be determined by combining several variables
to ultimately arrive at the brand equity.
Brand equity comprises the following elements:
(i) Brand awareness
Awareness of brand name among target customers is the first step in the equity-building process.
Awareness essentially means that customers know about the existence of the brand, and can recall what
categories the brand is in. The lowest level of awareness is when the customer has to be reminded about
the existence of the brand name, and that it is a part of the category. Thereafter are the stages of aided
recall, i.e., upon the mention of the category, the customer can recognize the companys brand from
among a list of brands. Then is the stage of unaided recall, wherein a customer mentions the companys
brand among a list of brands in the category. The highest level of awareness is when the first brand that
the customer can recall upon the mention of the product category is the companys brand. This is called
top-of-mind recall.

(ii) Awareness of a name acts as an anchor to which everything else about the brand is linked, much
like the name of a person acting as an anchor for tying all associations about him. Building
awareness
involves making the brand visible to the relevant target audience by various promotional methods
such
as publicity, sponsorships, events, advertising, instigating word-of-mouth promotion, etc. Brand
association
Anything that is connected to the customers memory about a brand is an association. Customers form
associations on the basis of quality perceptions, their interactions with employees and the organization,
advertisements of the brand, price points at which the brand is sold, product categories that the brand is
in, product displays in retail stores, publicity in various media, offerings of competitors, celebrity
associations and from what others tell them about the brand. Moreover, this is not an exhaustive list.
Consumers add to brand associations with every interaction they have with the brand. Not all
these associations are formed only due to their interactions with the organization. Many associations are
formed from what others tell customers about the brand. It is crucial that the company plan each
interaction with customers and others (media, shareholders, employees, government) so as to eliminate
even the slightest chances of any negative associations that can emanate from any of these sources.
Associations contribute to brand equity, as strong, positive associations induce brand purchases,
besides generating good word-of-mouth publicity. Such associations can also help the company in
leveraging the brand, creating strong barriers to competitors from gaining entry, giving trade leverages
to the company and enabling the company to achieve differential advantage.
(iii) Perceived quality
Perceived quality is also a brand association, though because of its significance, it is accorded a distinct
status while studying brand equity. Perceived quality is the perception of the customer about the overall
quality of a brand. In assessing quality, the customer takes into consideration the performance of the
brand on parameters that are important to him and makes a relative judgment about quality by assessing
the competitors offerings as well. Therefore, quality is a perceptual entity, and consumer judgments
about quality vary.
Quality perceptions influence pricing decisions of companies. Better quality products can be
charged a premium. Quality is one of the main reasons for consumer preference for a brand in any
product category. Thus, a superior perceived quality can also be used to position the brand.
(tv) Brand loyalty
Brand loyalty is said to occur when a customer makes the choice of purchasing a particular brand from
among a set of alternatives consistently over a period. In the traditional sense, brand loyalty was always
considered to be related to repetitive purchase behavior. For some products such as purchasing a house
or an automobile, repetitive purchase behaviour may not occur. In these situations, attitudinal brand
loyalty, i.e., consumer feelings about the brand that was purchased, and their inclination to recommend
the brand to others arc measured. Brand loyalty is usually rated as the most important indicator of brand
equity. The reason for this is that loyalty' develops post purchase and indicates a consistent patronage of
a customer over a long period whereas all other elements of brand equity' may or may not translate into
purchases.

Brand loyal customers form the bedrock of a company. Higher loyalty levels lead to a decrease in
marketing expenditure as the customers act as positive advocates for the brand. Besides, a company can
introduce more products in its portfolio that cost less but are aimed at the same customers. It also acts
as a potential barrier to entry for new players and gives time to the company to respond to competitive
threats. The bargaining power of the company with the trade channel members is stronger when there
are many loyal customers who would only buy the companys brand. In this case, the retailer merely
distributes the manufacturers products.(v) Other proprietary brand assets
Proprietary assets include patents, trademarks and channel relationships. These assets are valuable as
they prevent competitors from attacking the company, and prevent the erosion of competitive advantages
and loyal customer base.
Various activities of the firm determine brand equity. These activities may enhance or diminish
the brand value. Activities that are synchronous with the overall vision for the brand enhance equity, and
any activity that goes against this overall vision reduces brand equity.

5.6 BRAND PERSONALITY

Brand personality is extremely important in positioning brands with non-functional values. Many brand
strategy statements refer to the character or personality* of the brand. However, brand managers
writing these statements often tend to define the character* of several brands in a companys product
line in identical terms. For example, for many OTC remedies, the brand character is monotonously
described as caring and efficient*. From me-too product features, one may end up with me-too
personalities. For nutritional products aimed at children, and even for laundry detergents, the character/
personality of the caring mother and conscientious housewife is encountered repeatedly,
The purpose of positioning by brand personality is lost if the manager is unable to define the
desired personality of the brand which is clearly distinct from the personalities of competing brands
and sister brands of the companys product lines.
The brand name is a complex symbol that represents a variety of ideas and attributes. The
manufacturer who dedicates his advertising to building the most favourable image, the most sharply
defined personality, is the one who will get the largest share of the market at the highest profit - in the
long run.
According to David Ogilvy, it is important to decide the image that is desired for the brand. Image
means personality. The personality of the brand is an amalgam of many things - its name, packaging,
price, style of advertising and above all, the nature of the product itself.
In many markets, there is no real difference among competitors. Therefore, managers tend to
explore a more emotional level and this is where brand personality comes in.
Some authors consider brand image to be different from brand personality. Brand image refers to
rational measurements like quality, strength and flavour. Brand personality explains why people like
some brands more than others do, even when there is no physical difference between them. Therefore,
they consider brand personality as being made up of the emotional associations of the brand and brand
image of the physical features and benefits.
The added values (of a brand) tend increasingly to be non-functional in nature. However, they
will only work if they are blended with the physical and functional values to form an integrated brand
personality.
The brand image thus represents the essence of all the impressions or imprints about the brand
that has been made on the customers mind. It includes impressions about its physical features and
performance, impressions about the functional benefits from using it, impressions about the land of
people who use it, the emotions and associations aroused by it, the imagery and symbolic meaning it
evokes in the customers mind and this includes imagery of the brand in human terms, as if it were
a person.
The brand image is indeed the totality of die brand in the perception of the consumer. It is truly
a complex symbol* and defies oversimplification that equates it to one of its aspects, like its physical
features, for example, or its emotional associations alone.Personality is that aspect of the brands totality,
which
brings
up
in
the
consumers
mind
its
emotional overtones and its symbolisms - its characterization. The great operational utility of the brand
personality concept is that when the consumer cannot distinguish brands by their physical features or
functional benefits, he is invited to took at their human characteristics. This makes his task simpler in
judging whether it is his kind of product or not.

The brand image represents the totality of impressions about the brand as selected and adapted
by the consumer perceptions. It embraces the brand's physical and functional aspects and its symbolic
meanings. The brand personality dwells mainly on its symbolic aspects.
With differentiated products, the functional benefits of the brand plus its imagery or symbolism
help the consumer to make the right purchase. In case of undifferentiated products, the symbolic
aspects of the brand - the brand personality must endure the most of consumer persuasion. It must
patch the target consumer's self-concept. When a marketer has a clear idea of his intended target
segment, it is possible to think of a personality for the brand, which will have congruence with the
consumers self image.

5.7 SUMMARY
Brand building is a process in which a deep understanding of both the functional and emotional values
that customers use is required. Building quality into the core product is vital. Better quality brands gain
greater market share and higher profitability than their inferior rivals. The purpose of brand
communication
is to make customers feel attached to the brand.
The pioneer should develop positioning by focusing sharply on the needs of a segment. A company
has to invest in brand building for a long time; only then is the payoff also for a long time.
Corporate branding is not just about an attractive slogan or taking it on a wide range of products,
but to align the vision, culture and image of the company.
When brands are built without using mass media, there are two tasks to be done: (i) to increase
awareness of the brand, and (ii) to convey and reinforce the brand identity.

5.8 KEY TERMS

Corporate brand: A single umbrella image that is representative of all the businesses of the
company.
Brand equity: The value and power of the brand that determines its worth.
Brand awareness: The fact that customers know about the existence of the brand.
Brand association: Anything that is coiuiected to the customers memory about the brand.
Brand loyalty: A customer making a conscious choice of the same brand out of a set of alternatives
consistently.
Brand personality: A combination of its name, packaging, price, style and the nature of the
product.*

5.9 CHECK YOUR PROGRESS QUESTIONS

Brands provide all of the following

except:
(b)
Risk
reduction
(a) Expectations of quality
(d) Automatic success
(c) Prestige
1. Brand loyalty is a component
of .
(a) Brand value
(b) Brand awareness
(c) Perceived quality
(d) Brand associations
2. ______is composed of loyalty, awareness, perceived quality, favourable brand associations and
other assets.
(a) Brand awareness
(b) Brand equity
(c) Consumer behavior
(d) Market segmentation
3. A strong brand name is an important aspect of the________ linked to customer perceptions.
(a) Perceived quality
(b) Differential advantage
(c) Brand associations
(d) Other brand assets
4. High brand awareness alone within the target audience is_________ for high brand equity.
(a) Sufficient
(b) Not sufficient
(c) Not necessary
(d) The only necessity
5. To create strong brands, it is necessary to
(a) Create a brand identity
(b) Be consistent over time
(c) Track the equity
(d) All of the above
6. Brand equity is defined as being composed of all of the following except:
(a) Loyalty
(b) Awaieness
(c) Perceived quality
(d) Length of existence
7. Repositioning a brand is a common marketing strategy. It often occurs when a brand_________and
needs a revitalized value proposition.
(a) Becomes tired
(b) Loses its license
(c) Becomes too expensive
(d) None of the above
8. Good brands can be builteven without mass media.
(True or False?)
9.

Awareness is the first step in establishing the equity of a brand. (True or False?)

10. Brand image and personality are the same. (True or False?)
11. Brand personality is a consumer perception. (True or False?)
12. Brand personality often acts as a differentiator for a company. (True or False?)

5.10
1.
2.
3.
4.

QUESTIONS AND EXERCISES

What is brand equity? What are the various components of brand equity?
How does brand awareness contribute to brand equity?
What is brand personality? Explain with examples from the Indian context.
Differentiate between brand identity and brand image.

5.11

FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/c; Pearson.

Murthy, Brand Management, Vikas Publishing

UNIT 6

House.
J: : -I, t XXX if 'XMXXX H X.. XX- XXXX XX- X
V i f X .f

UNIT OBJECTIVES

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XXX- "XJ :XX T J XfX.7
XyX : X- :XX

 7 ie time effects of a brand i sing the pvr in idal

model
The d ff rei ; bet :ct revita zati i and
reinforcement of brands

Reinforcement strategies of a b in,:

* The conditions for successful evitalization of

brands

6.1 INTRODUCTION
Brand managers take a long-term perspective of all the decisions taken by them. Typically, the long-term
!> rspective pen dates the understanding tha any change in the structure of the b ind will change the
customers brand related knowledge, change the position of the brand /is-a vis the . ompeting brands
and may even damage the brand in the future. A long-term view also mandates managements to manage
and strengthen the brand equity over time after taking into consideration the external environmental
changes and internal changes in organizational goals.

6.2 PYRAMIDAL MODEL

The evolution of > brand nee Is : e jrnmon stream of thoi gift C >ns ide ing the brand as a vision about its
product category, it is important to kn w in which direction it is looking. The brand being a generic
memory to help a ipany manage it fut rt he mark nderstand v d i t and what is
its prime reason for existing.

Ail these concepts (source of inspiration, statement, codes and communication themes) work
together in a three-tier pyramid as seen in Figure 6.1:
At the top of the pyramid is the kernel of the brand, the source of its identity. Invisible, it must
nevertheless be known because it imparts coherence and consistency.
The base of the pyramid is the theme: it is the tier of communication concepts and the products
positioning of the promises linked to the latter.
The middle level relates to the stylistic code, how the brand talks and which images it uses. It is
through this style that the author of a brand writes the theme and describes himself or herself as
a brand. Tire style leaves the mark.
There is a close relationship between the different facets of brand identity and the three tiers of
the pyramid. An examination of advertising themes reveals that they refer to the physical nature of the
products or to customer attitudes or to the relationship between the two (particularly in service brands).
They are the outward facets of identity, those tliat are visible and that lead to something tangible.

6.3 REINFORCING AND REVITALIZING BRANDS

One of the challenges in managing brands is the many changes that occur in the marketing environment,
The marketing environment evolves and changes, often in very significant ways. External environmental
changes among customers, competitors, regulatory frameworks, demography, and other uncontrollable
factors affect the brand. The company also changes its goals periodically, which also necessitates a
change in the brand strategies. Therefore, even for a brand to remain where it is in terms of market
share, or profits, it must constantly monitor and adjust itself to these environmental changes.

Customer-based brand equity' is based on the customer's response to the brand due to the relevant
knowledge he has about the brand. Therefore, positive equity results when the marketing activities
contribute positive knowledge about the brand to the customer. Customers brand knowledge comprises
of brand awareness and brand image, Customers need to hold strong, unique and positive associations
about the brand to generate equity for the company. There are a number of ways to create those
knowledge structures in the minds of the consumers. Broadly, they involve choosing brand elements,
developing supporting marketing programmes, and creating secondary associations. One direct implication
of this view on brand equity is that brand management which is effective, needs a long-term view of
marketing decisions. As part of its marketing programme, any step taken by an organization can potentially
alter consumers knowledge about the brand especially, in terms of brand image or brand awareness.
These alterations have an effect in an indirect way, on the accomplishment of marketing activities in the
future. Thus when marketing decisions are made, it is essential to think about how the alterations in
image and brand awareness resulting from those decisions, can aid or harm the other marketing decisions
to follow'. Tliis entire scenario must be therefore, viewed from the standpoint of customer-based brand
equity. To take an example, the frequent use of sales promotions involving temporary price decreases
may create or strengthen a discount association to the brand, with potentially adverse implications on
customer loyalty' and responses to future price changes or non-price-oriented marketing communication
efforts. Merely taking a long-term perspective is not enough. A brand needs to be reinforced and revitalized
along the way in order to maintain and strengthen brand equity.

Reinforcing Brands

How should brand equity be reinforced over time? How' can marketers make sure that consumers have
the desired knowledge structures such that their brands continue to have the necessary sources of
brand equity? Generally, brand equity is emphasized by marketing actions that constantly communicatethe
significance of the brand to consumers, especially, in terms of brand image and brand awareness.
Therefore, it is important to answer these questions in order to reinforce brands:
What products does the brand represent; what are its benefits; and which are satisfied?
How is the brand helpful in making products better? What strong, unique and favourable brand
associations are present in the consumer minds?
As explained in Figure 6.2 both these issuesbrand meaning in terms of products, benefits and
needs as well as brand meaning in terms of product differentiation - depend on the firms general
approach to product development, branding strategies and other strategic concerns.
-if
Brand
Reinforcement
Strategies
Brand Image
What products.does the.hrand represent
What benefit does it supply?

What need does it satisfy''

Innovation in Product
Design, Manufacturing
arid Merchandising

flow does the brand make product superior?

What strong, favourable and unique brand
associations exist in customers minds?

Refutation in User
and Usage Imagery

Brand

Awareness

wm
Marketing
to Fortify
Leverage
Equity

Activities
vs.
Brand
.

Fig 6.2

Brand Reinforcement
Strategies'26
Amount and "Nature
of Marketing
Support

Meaning Changes in
Marketing Tactics

of Brand Equity

Maintaining
Consistency
both the amount and
marketing support, the consistency of the
marketing
support
that the brand receives is a vital consideration in reinforcing brands.

Brand
In terms of
nature of

26 Keller, Lane Kevin, 'Managing Brands for the Long Run; Brand Reinforcement and Revitalization Strategies,
California Management Review (1999), 102-124.

62 Time

Effects
Consistency of the brand is significant in order to maintain the favourability and strength of brand
associations. Brands run the risk of being disadvantaged technologically or even obsolete if they dont''
receive adequate support of proper research and development or marketing communication budgets. Market

Leaders and Failures

From the perspective of maintaining consumer loyalty, inadequate marketing support is especially dangerous
when combined with price increases. In terms of qualitative aspects of positioning, a cursory examination
of the brands that have maintained market leadership for the last 50 or 100 years or so is a testament to
the advantages of staying consistent. Brands like Dabur, Coca-Cola, Hershey, Cadburys and others
have been remarkably consistent in their strategies once they achieved a pre-eminent market leadership
position.
Perhaps an even more compelling demonstration of the benefits of consistency is to consider the
fortunes of those brands that have been inconsistent in their marketing programme, e.g., by constantly
repositioning or changing ad agencies.

Consistency and Change

Consistency does not require marketers to stop making any modifications in their marketing programmes;
rather consistency in managing brand equity may need several tactical shifts and alterations in order to
sustain the direction of the brand and appropriate strategic thrust. There are many ways through which
brand awareness and brand image can be created, maintained, or improved by carefully designing
marketing programmes. The tactics that may be most effective for a particular brand at any one time
can certainly vary from those that may be most effective for the brand at another time. Subsequently,
prices may increase or decrease, product features may be included or deleted, ad campaigns may make
use of varied brand extensions and may be introduced or withdrawn over time in order to create the
same desired knowledge structures in the consumers minds.
Nevertheless, despite these different types of changes in marketing programmes, the strategic
positioning of many leading brands has remained remarkably consistent over time. A major factor that
contributes to the brands success is that in spite of these tactical changes, some major features of the
marketing programmes are retained throughout and continuity is maintained in the brand meaning eventually.
Many brands, for example, have kept a key creative element in their marketing communication
programmes over the years and, as a result, have effectively created some advertising equity. From an
awareness standpoint, such efforts obviously make sense. It is essential to establish if these advertising
elements that has grown old, still continue to have a lasting impression on the old consumers and also
seem meaningful to the new consumers. The complete marketing programme should be scrutinized to
establish which factors make a powerful contribution to brand equity and should be protected.

Protecting Sources of Brand Equity

Consistency relates to strategic direction and not essentially the specific tactics used by the marketing
programme for the brand at any time. There is little need to diverge from a positioning that is doing well,
except if there are any changes with competition, consumers or the organization, which may have made
the strategic positioning of the brand weaker. At all times, brands should look for new sources of brand
equity which are powerful and have a potential, however, the main concern in these situations should be
to preserve and protect those sources of brand equity that are already there.

Consider the public relations problems encountered by Intel Corp., in December 1994, with the
floating decimal problem in their Pentium microprocessors. Although the flaw in the chip resulted in
miscalculation problems in only extremely unusual and rare instances, Intel was probably at fault - as
company executives now admit - for not identifying the problem and proposing remedies to consumers
sooner. Once the problem became public, Intel endured an agonizing six-week period where the company
was the focus of media scrutiny and criticism for their reluctance to publicize the problem and theirfailure to
offer replacement chips. Two key sources of brand equity for Intel microprocessors like the
Pentium - emphasized throughout their marketing programme - are power and safety. Although
consumers primarily think of safety in terms of upgradability, the perceptions of financial risk or other
problems that might result from a potentially flawed chip certainly should have created a sense of
urgency within Intel to protect one of their prize sources of brand equity. Eventually, Intel capitulated
and offered a replacement chip. Perhaps not surprisingly, only a small percentage of consumersan
estimated 1-3 per centactually requested a replacement chip, suggesting that it was Intels stubbornness
to act and not the defect per se that rankled so many consumers. If the main sources of brand equity
have a lasting value, then these brand associations need to be carefully protected and looked after.
However, these values can be ignored easily, because marketers tend to enlarge their brand meanings
and include fresh non- product-related or product-related brand associations.

Fortifying versus Lev eraging

There are various ways of increasing brand awareness and creating favourable, strong and unique brand
associations in the minds of the consumers. This helps in building customer-based brand equity.
It is essential to be familiar with trade-offs between marketing activities that strengthens and
contributes fiirther to brand equity against those inarketing activities that influence or take advantage of
the present brand equity in order to harvest on some financial gains. The benefit of building a brand with
high awareness and an optimistic brand image is that many benefits may result to the firm in terms of
cost savings and revenue opportunities. Marketing programmes can be designed which primarily attempt
to capitalize on or perhaps even maximize these benefits, e.g., by reducing advertising expenses, seeking
increasingly higher price premiums, or introducing numerous brand extensions. The more there is an
attempt to realize or capture brand equity benefits, the more likely it is that the brand and its sources of
equity' may become neglected and perhaps diminished in the process. In other words, marketing actions
that attempt to leverage the equity of a brand in different ways may come at the expense of other
activities that may help to fortify the brand by maintaining or enhancing its awareness and image.
Sometimes inability to strengthen the brand diminishes the awareness of the brand and deteriorates
the brand image. In the absence of these sources of brand equity, it may not be possible for the brand to
produce benefits.
Fine Tuning the Supporting Marketing Programme
As long as the fundamental positioning and vision for the brand remain unchanged, only the tactical
implementation of the brand strategy' should be changed. Moreover, even the tactical implementation
can be kept unchanged if the elements are contributing to the maintenance or strengthening of the brand
equity. Dove soap has been advertised in a remarkably consistent fashion over the years, even across
geographical boundaries. Dove is positioned as a beauty bar with 1/4 moisturising cream that nourishes
the skin while it washes. Doves advertising has consistently been positioned to consumers on a
performance basis with the slogan Dove Doesnt Dry Your Skin. For years, advertising has always
been trial-oriented, using consumer testimonials to vouch for the quality of the product (Take the 7Day Dove Test). It is important for a conpany to know the brand associations before reinforcing the
brand image. Customers possess product-related and non-product related brand associations.

Product-related Associations

Some brands build strong associations with the product class that they belong to. For such brands,
equity is built based on functional attributes. Then, w'hile reinforcing equity, the functional attributes can
be strengthened based on manufacturing, product design, packaging or merchandizing elements. Failureto
innovate can have dire consequences. Product innovations are critical for performance-based brands
whose sources of brand equity primarily rest in product-related associations. In some cases, product
advances may involve brand extensions based on a new or improved product ingredient or feature, e.g
Sony televisions with special Trinitron colour tubes. In fact, in many categories, a strong family subbrand has emerged from product innovations associated with brand extensions.
At the same time, it is important not to change products too much, especially if the brand meaning
to consumers is wrapped up in the product design or make-up. Thus, while making product changes in
a brand, it is important that loyal consumers feel that a reformulated product is the same product and not
a different product. The timing of the announcement and introduction of product improvement is also
important because if the brand improvement is announced too soon, consumers may cease to buy the
existing products; if the brand improvement is announced too late, competitors may have already taken
advantage of the market opportunity with their own introductions.

Non-product-related Associations
Brands that are closely associated with non-product-relatcd attributes and experiential or symbolic benefits,
its significance to the user and usage imagery are important. Because of their intangible nature, nonproduct-reiated associations may be potentially easier to change, e.g., through a major new advertising
campaign that communicates a different type of user or usage situation. Nevertheless, ill-conceived or
too-frequent repositioning can blur the image of a brand and confuse or perhaps even alienate consumers.
Significant repositioning may be dangerous for other reasons. Brand images can be extremely
sticky, and once consumers form strong brand associations, they may be difficult to change. Consumers
may choose to ignore or just be unable to remember the new positioning when strong, but different
brand associations already exist in memory.
For dramatic repositioning strategies to work, convincing new brand claims must be presented in
a compelling fashion. One brand that successfully shifted from a primarily non-product-related image to
a primarily product-related image is BMW. Uniformly decreed as the quintessential yuppie' vehicle of
the 1980s, sales of the brand dropped almost to half from 1986 to 1991 as new Japanese competition
emerged and a backlash to the Greed Decade set in. BMW realized that status was no longer its
exclusive domain, and that in the long run, this would not be enough to sustain its long-term competitive
edge. Thus, they shifted BMWs positioning to the Ultimate driving machine, thus emphasizing product
improvements such as cutting edge engineering, state-of-the-art performance and styling. These efforts,
showcased in well-designed ads, helped to diminish the yuppie association, and by 1995 sales approached
their earlier peak.
"w .. .VSi.7,, .-a.,!'.,

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''1..

All marketing activities that constantly reinforce the existing brand positioning strengthen the
brand equity. The marketing activities include the core benefits of the product, the needs fulfilled by the
brand, the core values of the brand, and claims of product differentiation. All these activities must create
and foster the strong, unique and positive associations of the customer towards the brand.

The nature of the brand association involved determines the reinforcement of brand meanings.
Brands that are closely associated with product-related attributes and'or functional benefits, novelty in
product design, merchandising and manufacturing becomes extremely important to maintain or enhance
brand equity. Similarly, to maintain and enhance brand equity, brands are positioned on the basis of
usage imagery which requires reinforcements in the form of non-product based benefits and powerful
symbolism.Revitalizing Brands
Sometimes, even the best designed and implemented brand reinforcement strategies may fail. Changes
in consumer tastes and preferences, the emergence of new competitors or new technology, or any new
development in the marketing environment could potentially have a profound effect on the fortunes of a
brand. Every product category would have brands that were once extremely successful and garnered
large market shares, but lost their steam along the way. Brand managers mast understand that building
and maintaining brand equity is a long-term activity. Strong brands can survive the passage of time, and
the changes that come with it.
In order to regain lost ground, brands either can revisit the original positioning, or can reposition
in order to become more relevant to the changed environmental context. However, a brand manager
must understand that the stronger the brand association with the original positioning, the more difficult
it will be to change it. Hush Puppies suede shoes - symbolized by the cuddly, rumpled, droopy-eyed dog
- were a kids favourite in the 1950s and 1960s. Changes in fashion trends and a series of marketing
mishaps, however, eventually resulted in an out-of-date image and diminished sales. Wolverine World
Wide, makers of Hush Puppies, made a number of marketing changes in the early 1990s to reverse the
sales slide. New product designs and numerous offbeat color combinations (bright shades of green,
purple, and pink) enhanced the brands fashion appeal. Increased expenditure backed an ad campaign
featuring youthful, attractive people wearing the shoes and the tagline We Invented Casuals. Popular
designers began to use the shoes in their fashion shows. As a result of all these developments, and a
concerted programme to engage retailer interest, the brand has now reappeared in fashionable department
stores and sales and profits have skyrocketed.
In order to re-establish a declining brand, sources of brand equity must be identified and built
upon. Either these sources can be original associations with the brand that were lost, or they can be new
associations that the company wants to build into the brand. Regardless of the approach adopted,
brands that make a comeback need to make changes that can revolutionize rather than evolve. This
helps to reinforce brand meaning. Often, things that turn around the fate of a brand are to comprehend
and recognize the initial sources of brand equity. Thus, to guide repositioning in profiling brand knowledge
structures, it is essential to correctly and totally distinguish the strength and depth of brand awareness
along with the favourability and uniqueness of brand associations, held in the consumers mind. Are
positive associations losing their strength or uniqueness? Have negative associations become linked to
the brand (e.g., due to some type of changes in the marketing environment)?
To answer these questions, a brand audit is often conducted. A brand audit examines all the
sources from which a brand derives equity. It becomes important to decide whether to create a new
positioning or retain the same positioning.
Considerations regarding positioning are related to the desirability and deliverability of various
possible brand associations, like the salient attributes and/or benefits which are based on the consumer,
competitor considerations and organization. An organization can work on rejuvenating the brand if it has
complete understanding about the brand knowledge structure. There are two approaches according to
the customer-based brand equity model, which arc possible:
The company should be able to understand the extent of the customers recognition and
recall of the brand. This understanding can be enhanced further.

Refresh Old
VinSource:
Brand equity can be re-established
three ways. These are:
of Brand Equity

Changing the brand elements

Changing

Create New Sources

of Brand Equity

Retain

Improve Strength, Favourabitity.

and Uniqueness of Brand
supportingVulnerable
the brand
Association
Customers
brand associations

Expand Depth and

of Awareness
theBreadth
marketing
programme
and Usage of Brand

Establishing and/or leveraging

Figure 6.3 explains the working of brand revitalization strategies:

Increase Frequency
of Consumption
(How Often)

Increase Quantity
of Consumption

|HewMuehV

Create New
Associations

Brand
Bolster

Fading Neutralize

Revitalization
Associations

......; , , .

Strategies

Negative

Association

Recapture
Lost
Customers

Identify Attract
Neglected New
Segments Customers

Customers'
associations about
the brand need to be explored. The company should aim to
form several strong,
unique and
positive
customer
associations
about the
brand. Either these
associations can be pre-existing ones or they can be new
ones
depending on the brand
positioning.
Identify Additional
Opportunities to y
Use Brand in Same
Basic Way

Identify Completely
New and Different
Ways to Use

Fig 6.3 Brand Revitalization Strategies2

Expanding Brand Awareness

When a brand is facing a decline, usually the customer is aware of the brand name, i.e., recognition
and recall exist. Therefore, the depth of brand awareness is not the issue. The issue is the breadth
of the brand, i.e., the associations that the customer has about the brand name. The customer tends
to remembers only a few aspects of the brand. Therefore, the associations are very narrow. In this
case, the company needs to add and strengthen unique and positive associations about the brand,
thus, adding to the breadth of brand awareness. This will enable the customer to put the brand in
their consideration set.
When it is assumed that a brand has a considerable level of awareness and has a brand image that
is positive, the right point when new sources of brand equity can be created is when tactics that increase
Keller (1999), Op. cit.usage

are employed. In several instances, approaches to enhance usage signify the path of
least
resistance. They do not engage in potentially complicated and expensive alterations in the brand
positioning or image as much as in changes that are easy to implement in brand awareness and salience.
Increase in usage can be achieved in either case when:
The consumption level or quantity is increased (i.e., how much the brand is used)
The consumption frequency is increased (i.e.. how often the brand is used)
It is believed that increasing the frequency of usage of a product by a consumer is easier to
achieve than changing the quantity of the product used at a time. The quantity of consumption is based
on beliefs consumers hold on how the product is used at its best. An exception holds for consumption
products bought on an impulse, Le., whose usage increases when the product is made more available
(e.g., soft drinks, snacks).
Increase in the number of times a product is used, involves the identification of new or added
ways to use the brand or identification of purely different and innovative opportunities to use the brand.
Increasing frequency of use is a particularly attractive option for large market share brands that are
leaders in their product category.

Identifying Additional or New Usage Opportunities

At times, the brand serves to be of use if it has strong brand associations to specific usage circumstances
or r types of users. This happens only in some places and at particular times. If a company wants to
identify opportunities to make the customer use the brand more, it needs to inform customers about the
advantages of using the brand more frequently. Additional usage of the brand can be prompted in
existing situations or in new situations. The company also needs to remind customers about these
additional usage situations as dose to those consumption situations as possible.
For many brands, increasing usage is as simple as improving top-of-the-mind awareness through
reminder advertising. In other cases, more creative types of retrieval cues may be necessary. These
reminders may be critical as consumers often adopt functional fixedness with a brand such that it can be
easily ignored in non-traditional consumption settings. Increased usage applications may also require
more than just new ad campaigns. Often, increased usage can arise from new packaging. When
consumers perception of their usage is different from their real usage, it serves as a potential opportunity
to increase the number of usage. When products have comparatively short life spans, users may not be
able to substitute the product on time because of their failure to estimate the duration of productive
usage. Product replacements can be prompted by tying it up with the occurrence of an event, such as
a festival, holiday or rime of the month/year. The company can alternately provide information about the
replacement requirement, or present the level of performance of the product, indicating when the product
needs to be replaced. For example, batteries now offer built-in gauges that show how much power they
have left.

The best and the easiest way to boost usage is when the real usage of a product is not at par with
the best recommended usage. In such situations, consumers have to be convinced of the benefits of
habitual usage and any prospective obstacle that may hinder the optimal usage has to be conquered. A
great way to handle this situation is to improve the product design and make the packaging more suitable
and easier to use. For example, a shampoo designed to be gentle enough for daily use may alleviate
concerns from those consumers who believe that frequent hair washing is undesirable, thereby eliminating
their tendency to conserve the amount of product they use.

Identifying New and Completely Different Ways to use

the Brand
Another approach that can help to increase the number of
times of usage for a brand is to come up with
innovative and special usage applications. For instance,
beverage
companies
have
long
advertised
for
new kinds of drinks that use their branded products in completely innovative ways.
Improving the Brand Image
Sometimes, changes in brand awareness alone do not help in reviving a declining
brand. In such cases the company has to develop new marketing programmes to enhance the favourability,
strength and uniqueness of the brand associations. Sometimes, changes in brand awareness alone may
not be enough. The company may have to enhance the uniqueness, strength and favourability of the
brand associations. This will enable them to strengthen the brand image of the company. Associations
that were positive and were lost need to be revived, negative associations have to be removed and new
associations may have to be created to lend a strong positive brand image.
In some cases, repositioning the brand requires establishing more compelling points-of-differenee
to better differentiate the brand. Other times a brand needs to be repositioned to establish a point-ofparity on some key image dimensions to break even with respect to other brands. For example, a
common problem for established, mature brands is that they must be made more contemporary by
creating relevant usage situations, a more contemporary user profile, or a more modern brand personality.
Heritage brands that have been around for years may be seen as trustworthy but also as boring,
uninteresting, and not that likable. Updating a brand may involve some combination of new products,
new advertising, new promotions and new packaging. Sometimes negative product-related associations
emerge because of changes in consumer tastes.
A brand is positioned at a chosen target market. Tire positioning aims to create a differential
advantage that is meaningful to customers in the selected target market. A company can choose to
operate in only one particular target market or operate in several markets at once. For each market, the
company formulates a different brand offering, and therefore, different positioning. No company can
possibly serve all customer segments by using a single offering. However, depending on the company
resources, the number of attractive market segments is chosen that are targeted using different brands.

Retaining Vulnerable or Recapturing Lost Customers

In some cases, simply retaining existing customers who would eventually move away from the brand or
re-capturing lost customers who no longer use the brand can be a means to increase sales. Some of
these ads use themes and appeals to nostalgia or heritage. Others attempt to make the case that the
products enduring appeal is still relevant for users today. The importance of retaining current customers
can be recognized by calculating the lifetime value'of customers. For example, one research study noted
that the cost of selling an automobile to a new customer is five times greater than selling it to a satisfied
and existing customer.

Identifying Neglected Segments

Segmenting on the basis of demographic variables and identifying neglected segments is thus one viable
brand revitalization option. To grow the brand franchise, many firms have reached out to new customer
groups to build brand equity.

Attracting a new market segment can be unexpectedly difficult. Nike, Gillette and other marketers
have struggled for years to fmd the right blend of products and advertising to make their brandswhich
have more masculine oriented imagesappear relevant and appealing to women. Attracting emergingnew
market segments based on more cultural dimensions may require different messages, creative
strategies and media.

Attracting New Customers

A tactical option to restore a brand that is fading away is to simply abandon the past loyal consumer
group and target an entirely new market segment.
Balancing New and Old Target Markets
Firms have multiple market segments they can target to grow their sales. All firms face trade-oflfs in
their marketing efforts to attract new customers versus their efforts to retain existing ones. In mature
markets, building loyalty and retaining existing customers is generally more important. Nevertheless,
certain amounts of customers inevitably leave the brand franchise, even if only by natural causes.
Consequently, it is imperative that the firm proactively develop strategies to attract new customers,
especially younger ones. The biggest marketing challenge that a brand faces during the acquisition of
new customers, is making the brand appear appropriate to customers from varied generations, lifestyles
and cohort groups. This challenge is exacerbated when the brand has strong personality or user image
associations that tie the brand to one particular consumer group. Unfortunately, even as younger consumers
age, there is no guarantee they will have the same attitudes and behaviours of the older consumers who
preceded them.
The response to the challenge of marketing across generations and cohort groups has taken all
forms. Some marketers have attempted to cut free from the past. Procter and Gambles Old Spice has
had to wrestle with the problem of being seen as your fathers after shave to young male consumers.
To revitalize the brand, a new campaign backed by heavy spending was launched in 1993. The new TV
ads eliminated the trademark whistling sailor character to show suave, contemporary men. On the
product side, P & G put heavy support behind their fast-selling and more youth-positioned Old Spice
High Endurance deodorant.

Multiple Marketing Communication Programmes

For a brand, to attract a new market segment while continuing to satisfy the existing segments is to
make different ad campaigns and communication programmes for every segment. The increased
effectiveness of targeted media makes multiple targets more and more feasible. The obvious drawback
to this approach is the expense involved and the potential blurring of images if there is too much media
overlap among target groups and if the respective ad positioning are seen as incompatible.

Brand Extensions and Sub-Brands

Another way through which new customers can be attracted is by keeping the brand fresh and
contemporary. This is best achieved by introducing a line extension or a new sub-brand.

New Distribution Outlets

In certain situations, catching the attention of a new market segment could be as easy as making the
product obtainable to that group.
- r 'Vi r 'it * *_ VbV

Retiring Brands

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Finally, it should be recognizedthat because of dramatic or adverse changes in the marketing environment,
some brands are just not worth saving. Their basis of brand equity may have fundamentally dehydrated
or even worse, harmful and hard-to-change new associations may have been created. At some point, thesize
of the brand franchise no matter how loyaltails to justify the support of the brand. In the face
of such adversity, decisive management actions are necessary.
Several options are possible to deal with a fading brand. The first step in retrenching a fading
brand is to reduce the number of its product types (e.g., pack sizes or variations). Such action reduces
the cost of supporting the brand and allows the brand to put its best foot forward. Under these reduced
levels of support, a brand may more easily hit profit targets. If a sufficiently large and loyal enough
customer base exists, marketing support can be virtually eliminated altogether as a means to milk or
harvest brand profits from these cash cows.
In some cases, on the other hand, the brand is beyond repair and measures that are more drastic
have to be taken. One possible option for fading brands is to consolidate them into a stronger brand.
With shelf space at a premium, brand consolidation will increasingly be seen as a necessary' option to
create a stronger brand, ait costs, and focus marketing efforts.
Finally, a permanent solution is to discontinue the product all together. The market place is littered
with brands that have either failed to establish an adequate level of brand equity or have found their
sources of brand equity to disappear because of changes in the marketing environment.

Making Existing Products Obsolete

How do you decide which brands to revitalize, which to milk and which to make obsolete? The decision
to retire a brand depends on a number of factors, related to how strong the brand is, the target market
and its competitors. Fundamentally, the issue is the existing and latent equity of the brand. If businesses
are not creating value, the company should not be in them.
While choosing to revitalize a brand, the company can revive all the sources of equity that existed
earlier, or it can choose to make new sources of brand equity. The creation of new' sources of equity
requires the elements to be recognized, maintained and built upon. The customer-based brand equity
framework recommends that the awareness of the brand to be enhanced by increasing the breadth and
depth of the brand. This further increase recognition of the brand and customer recall during the buying
process and improves the uniqueness, strength and level of positive associations about the brand. This
creates a favourable and powerful brand image directed at new or existing brand associations.
When a brand is fading, the depth of brand awareness is not as much an issue as the breadth
because consumers have a tendency to think narrowly of the brand. As part of re-positioning, it is
crucial that new markets are tapped. What proves to be a challenge in this situation is to alter the brand
image yet not damage the existing equity.

6.4 SUMMARY
In a pyramidal model, concepts such as source of inspiration, statements, codes and communication
themes, work together. Effective brand management requires proactive strategies which can at least
maintain, if not enhance, brand equity. Brand equity is reinforced by marketing actions that consistently
convey the meaning of brand to the customers, both in terms of brand awareness and brand image.
Brand consistency is an important aspect for maintaining the strength and favourability of brand
associations. The elements which are making a strong contribution to brand equity must be protected.

6.5 Revitalizing brands is one way by which a number of brands have managed to make an impressive
comeback. There are several revitalizing strategies that a brand can adopt to save itself from
moving
into
oblivion.CHECK YOUR PROGRESS QUESTIONS
1. The brand identity pyramid has the following three levels except:
(a) Brand kernel
(b) Brand image
(c) Brand style
(d) Brand themes
2. Ail the following are reinforcement strategies except:
(a) Maintain consistency
(b) Leverage and fortify
(c) Protect sources of brand equity
(d) Repositioning
3. All the following are revitalization strategies linked to customer perceptions:
(a) Increase awareness
(b) Identify new usage opportunities
(c) Improve brand image
(d) All the above
4. Brand managers should always keep an eye on short- term profits to take decisions. (True/
False?)
5. Changes in the environment often lead to brands becoming obsolete. (True/False?)
6. Innovation in product design, manufacturing, and merchandizing is especially critical to maintaining
or enhancing brand equity. (True/False?)
7. Reinforcing brand meaning depends on the nature of the brand association involved. (True/
False?)

6.6 QUESTIONS AND EXERCISES

1. Discuss the pyramidal model that indicates the time effects of a brand.
2. Discuss, in detail, the various reinforcement strategies of a brand.
3. Explain the various revitalization strategies that a brand can adopt to save itself from going into
oblivion.
4. What conditions must be present for a successful revitalization of brands to take place?

6.7 FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/e; Pearson.

Murthy, Brand Management, Vikas Publishing House.

UNIT - 7

BRAND EXTENSION
UNIT
OBJECTIVES
The concept of brand extension
The advantages and disadvantages of line
extension

The difference between brand extension and

brand stretching
The concept of co-branding

7.1 INTRODUCTION
Companies that build brand equity capitalize on strong brands by using them to (i) launch new products
in other categories, (ii) serve other customer segments in the same category or (iii) serve the same
customer in the same category, better. The main purpose of using ihe same brand name is to take
advantage of the value and power that the brand commands, rather than building a completely new
brand from scratch; that would entail huge expenditure.

7.2 WHAT IS BRAND EXTENSION?

Brand extension is the use of an established brand name in new product categories. The category to
which the brand is being extended can be related or unrelated to the existing product categories.
Brand extension in unrelated markets may result in loss of credibility if a brand name is extended
too far. A company has to find out the product categories in which the established brand name will work
and the product categories in which it will not work. To be able to do that the company has to find out
what makes the brand name successful in its current business. It may find out that customers in the
current business desire luxury and exclusivity, and the brand is correctly positioned since it offers
luxury and exclusivity. If the customers of the new business also desire luxury and exclusivity, the
brand name will work in the new business. If values and aspirations of the customers of the new
business match those of the original business and if these values and aspirations are embodied in the
brand, it is likely to be accepted by customers in the new business.
Brand extension reduces the cost of launching and building a new brand from scratch. The
company uses the existing brand with positive customer associations to enter into a new product
category. Thus, for the customer, brand extension results in risk reduction to some extent, due to
Familiarity with the brand, albeit in a different category. 1 Extending brands both within and beyond
the original product category is deemed profitable because, in general, it is assumed that brands that
are already known and recognized need low introduction cost, such as trade deals, price promotions
and advertising. Customers tend to associate similar quality perceptions for the new product under
the same brand, as for the original product 27 28 29 An established name enhances consumer interest and
willingness to try the new product bearing the established brand name. 1 Though the company haslaunched a
new product, since it carried an existing brand name, generation of awareness is less
expensive. Therefore, awareness can be built with greater ease and less cost. Since the brand must
convey similar values in both the categories, the company can also achieve economies of scale in
advertising. An advertisement of a product reinforces the other product as well, as they are being
sold under the same brand name.'5
However, brand extensions that offer no functional, psychological or price advantages over the
rival brands in the new category often fail. There is also the danger that management does not provide
enough funds for the launch, believing that the spin-off effects from the original brand name will
compensate. This can lead to low awareness and trial. Also bad publicity for one product affects the
reputation of other products under the same name. A related problem is the danger of the new product
failing or generating connotations that damage the reputation of the core brand.
Significant insights are provided by the research studies findings into the factors leading to
the success of brand extension. The types of factors leading to success play a significant role in the
27 Sharp, B. M The Marketing Value of Brand Extension. Marketing Intelligence and Planning (1990), 9-13.
28 Aaker, D. A. and K. L. Keller, Consumer Evaluation of Brand Extensions, Journal of Marketing (1990), 27-41.
29 Aaker. D. A, Brand Extensions: The Good, the Bad and the Ugly, Sloan Management Review (1990), 47-56.

extension products success, under some conditions. For example, despite some mixed results, prior
studies show that the fit between the parent brand, the extension product categories and the parent
brand quality are highly important brand extension success factors. It is extremely important for the
values of the extended brand (Le., the old brand in the new product category) to be in consonance
with the values of the brand in the core product category. A brand extension that hopes to
target new customer segments with vastly different values will not work out. It may not only result
in the failure of the extension, but may also lead to the reduction of the brand equity of the core
brand.
A brand extension is more successfi.il under the following circumstances:

Parent
Brand Characteristics
. . .. .
Quality (strength) of the parent brand - If the quality of the parent brand is high. History of
previous brand extensions - If the history of previous brand extensions is successful
For example.
o Large number of previous brand extensions
o High variability among product types offered by the parent brand
o Low variance in quality' among previous brand extensions
' >.
Parent brand conviction - If parent brand conviction is high
',.
Parent brand experience - If parent brand experience is high
Extension's Marketing Context
.... ... ... , ...
Marketing support - If the marketing support is high
For example,
o Advertising support
o Firm's marketing competence
Retailer acceptance - If the retailer acceptance is high
Relationship of the Parent Brand to the Extension Product -ut:- y
TfTc
v
Fit between parent brand and extension product - If the fit between the parent brand and the

extension is high 30For example,

o High global similarity
o High ability of the owner of the parent brand to make a product in the extension product
class
o High relevance of the extended associations for the extension product
Extension's Product Category Characteristics
Perceived risk - If the perceived risk is low
Consumer innovativeness - If consumer innovativeness is high
The fit between the extension product and the parent brand, marketing support, parent brand
conviction, retailer acceptance and parent brand experience are major contributors in driving the success
of brand extension. These factors deserve managerial attention.
From a managerial perspective, it is especially essential to know' the relevant determinants of
extension success. The most important factors that determine the success of the extension are:
1. The fit between the values of the core brand, and the extended brand
2. The extent of support accorded to the extension
3. Trade acceptance
4. The success of the parent brand
Other peripheral factors that impact the success of the extension are ;
1. The fate of earlier extensions of the same brand
2. The extent to which the new product related attributes connect with the core brand values
3. Extent of consumer innovativeness
4. Other moderating factors
Managers should pay a lot of attention to the five success elements that substantially influence
the success of brand extension. Consequently, the question arises of how to influence these factors to
increase the likelihood of the extensions success. Several important mediating effects may serve as a
starting point for the identification of promising ways to influence certain success determinants and
consequently, the likelihood of extension success. The issue of how managers influence the five vital
success factors is highlighted in the following points:
Fit between parent brand and extension product: Appropriate selection of the parent brand
and the extension product category can directly affect fit. Extension advertisements can also
increase the salience of crucial brand associations that help consumers infer extension features
and benefits and thus, understand how an extension fits. It is likely that consumers deduce
judgments of consistency and fit when an advertisement demonstrates hou' parent brand
attributes develop the extension's capacity to offer benefits. Consumers can establish links
between the brand and the extension product through repeated exposure to advertisements
that induce suitable parent brand associations thus, influencing the perceived fit between the
extension product and the extending brand.

30Roberts. O.T. and G. ML McDonald. 'Alternative Naming Strategies: Family versus Individual Brand Names,
Management Decision (1989), 31-7.

Parent brand conviction and parent brand experience: Although extension products do not

guarantee success based on the brand name alone, results indicate that parent brand
characteristics, such as consumers' parent brand experience and conviction, play an important
role in driving brand extension success. Managers normally are not in a position to manipulate
the two factors in the medium or short term, because both factors reflect specific
characteristics of the parent brand. However, the favourable strategies are to build customerbased brand equity and/or acquire strong brands because they signify a precondition for
better leveraging of a brand that still exists in order to harvest some financial gains, Moreover,
managers who have access to a portfolio of parent brands might consider influencing parent
brand conviction and parent brand experience by selecting an appropriate brand that performs
favourably in terms of these factors,
Retailer acceptance: There are many ways in which a retailer can be convinced to accept a
novel product. Retailers are likely to accept a novel product if they arc given trade and slotting
allowances, which is a positive effect. Promotional allowances cut down the retailer's
expenditures of informing customers that the extension product is available in a given store,
thus, leading to the growth of inter-store competition. Retailers' decisions to agree to novel
listings also gains prominence due to consumer advertising, which creates demand.
Marketing support: The support from the market that the extension product gets has a vital
role for FMCGs to play in influencing die new product's success in the market. For managers,
this factor holds great interest as it falls under a company's direct control and can be influenced
in the short term. However, the monetary health of the company symbolizes a boundary
condition about the full support that new introductions may get.
Relative importance ofsuccess factors. Another set of implications for managers is related to
the incremental influence of each success factor on the performance of the extension product.
Thus, little has been known about the relative importance of success.

7.3 LINE EXTENSION

New variants such as new product formulations, flavours, SKUs (sizes), models or colours within the
same product category and bearing the established brand name are launched.
Line extensions can be useful to reach out to new customer segments who seek new benefits,
hitherto not being offered by the brand in the category. For instance, launching a new shampoo variant
aimed at consumers seeking solution for a dry, itchy scalp under the existing shampoo brand name
makes sense. Line extensions are also useful in reviving consumer interest in a dull-product category. In
some categories, variety is a desirable attribute for consumers. ..
....
Line extension shows the way to managerial focus on small changes - changes in packaging and
advertising instead of novelty. Cannibalization can also occur, i.e., the new brand variants gain sales at
the expense of the established variants of the same brand.
The popularity of line extension strategies over the last two decades has been fuelled by the need
for companies to reduce costs and minimize risk. Extending a brand may encourage trial of the new line,
but this trial may be at the expense of the parent, i.e., cannibalization. Buyers of the lines extension have
usually bought the parent before launch and this emphasizes the importance of customer retention as a
strategy. The challenge is to ensure that line extension is an addition to the portfolio rather than a
substitution for the existing lines of the parent brand. Clear distinctions need to be made between the
positioning of the line extension versus the existing lines, perhaps by usage occasion.

76 Brand

Extension
Cross purchase is significantly higher between line extension and other lines of the parent brand.
This implies that the pre-purchase behaviour carries through into the post-launch period. Both these
findings vindicate the use of a line-extension strategy to some extent. The extension of an existing brand
name does seem to have an effect in encouraging purchase of the new line extension. This adds to the
evidence that an existing brand encourages access to the new line. However, from a practitioners
viewpoint, the same comments apply as abovethe line extension needs to be sufficiently distanced
from the parent to discourage substitute purchasing.Ultimately, the line extension will be judged a success if
it
meets
the
objectives
set
for
it.
Often,
these are incremental sales for the total brand. However, defensive motives may well play a part in some
markets. Nonetheless, it is; important that companies do not use strategic logic as a defence for poor
financial logic. Companies need to enter into a line-extension strategy knowing the risks as well as the
advantages. The commonality of brand name does encourage trial of the new line by purchasers of the
parent, but then there is a trade-off in terms of substitute purchasing. Almost all line extensions steal
from their parents. Managers need to accept this risk and judge what level of cannibalization is acceptable
in terms of an overall increase in brand profitability.
A majority of line extensions do not differ much from the parent brand's products, i.e., the
extensions are poor incremental improvements over existing products that offer very little additional
value to customers. Thus, line extensions only tend to increase the number of variants for existing
customers without seeking new markets for companies. Managers are also aware of the little financial
value addition that line extensions do, because of which they do not use stringent financial criteria to
evaluate line extensions.
Research reveals that line extensions undertaken for increasing the number of flavours or SKUs
(size of a package) tend to be the most successful ones. They add to the bottomline of the company.
They also target new needs of customers and expand the customer base better than other forms of line
extensions.
However, line extensions claiming change in quality are not as successful. They shrink the
company's bottomline as the additional cost incurred by the company in manufacturing and marketing
such extensions is not recovered completely.
Line extensions can be potentially damaging for a company as competitors can catch up with
them easily. Since the company only makes incremental improvements over existing products to introduce
line extensions, no real competitive advantage accrues to it, though the cost of adding such products is
substantial. In intensely competitive markets, the advantage of line extensions is extremely short-lived.
This pattern has been observed across service and manufacturing industries. Packaged goods
manufacturers also face competition,from private label brands of retailers.
One of the biggest arguments against line extensions is that they only cater to variety-seeking
customers in the existing market. Such customers are hardly brand loyal, even if they are satisfied with
a brand or a variant. They exhibit strong tendency to try out new variants without any underlying motive
other than novelty. Therefore, they further fragment the existing market, without adding any value for
the firm. In effect, the existing product is cannibalized, without any expansion in customer base.
The worst affected company is the market leader. Since the market leader has the largest customer
base in a given market segment, the consequent fragmentation is also harmful for it. Besides, the
economics of scale that the leader was earning by manufacturing a particular variant arc lost. Thus,
adequate differentiation is the best way of stalling competitors, and earning high profits even for the
market leader. Fragmented markets rarely present an optimal opportunity to maximize market share.

Line extensions can be defensive or offensive. Extensions that are introduced early in the lives of
the parent brands, have a strong fit with the parent brand values. They are also given strong marketing
support and have a higher likelihood of success. They are usually offensive. On the contrary, lineextensions that are introduced later in the life of the parent brand are likely to be defensive. Research
reveals high correlation between the parent brand-extension fit, and advertising support for the extension
indicates that it is extremely difficult for the company to promote line extensions, particularly when the
extensions closely resemble the parent brand physically. Customers cannot find any visible difference
between the parent and the extensions. Therefore, customers tend to ignore such communication.Thus,
companies while advertising extensions should create strong awareness, as well as induce positive
feelings towards the extensions.
As already explained, the lower the difference between the line extension and the parent brand,
the stronger are the chances of cannibalization. Thus, the cost of introduction of the extensions exist
(and may be high), but the resultant sales and profit outcomes are not in sync with the cost incurred.
However, if used appropriately, line extensions can be used to not only rejuvenate a brand, but
also to strengthen its existing positioning. Intensely competitive markets and markets with a strong trade
power call for greater introspection and careful management of extensions. Under these conditions, the
competitive advantage of line extensions does not last long. Such ill effecls of line extensions are most
pronounced for market leaders. Therefore, greater differentiation should be incorporated into line extensions
to make them more successful.
Line extensions always require adequate advertising and marketing support. The cost for the
launch of the extension should not come from only the advertising budget of the parent brand. It is
important to remember that the parent brand and the extension serve different objectives, and may seek
to serve different customer segments as well. Therefore, if the stronger the correlation between the
parent and the extension, the greater are the chances of cannibalization of the parent brand. If an
extension resembles the parent brand physically, its advertising should be managed even more carefully.
Therefore, companies should establish clear objectives for launching line extensions. They should
also set rigorous financial goals that mast be achieved by the extensions. Along with this, the impact of
the line extensions on the parent brand must also be monitored closely. Most importantly, flimsy incremental
improvements tend to result in additional costs, which are not justified in terms of the returns earned
from such extensions. Besides, they are also likely to damage the parent brand. Therefore, companies
must manage line extensions very carefully to benefit from them.

7.4 BRAND STRETCHING OR VERTICAL EXTENSIONS

A company may sense an opportunity in the premium or/and the value segments of the market, besides
its existing markets. The company enters into these premium or/and value segments as well. These
movements are called upscaling and downscaling respectively.
Companies engage in brand stretching because:
Existing markets may be saturated
They sense new opportunities in the premium or popular segments of a market
Competition in the existing segments is intense
A brand-stretching strategy can be practised in three ways:
Upscaling or downscaling the entire brand
Introducing a new brand in the upscaled or downscaled position
Both the above techniques represent extremes. Almost all companies really tread the middle path.
Treat the original brand as the Mother Brand and introduce its offshoots in the form of subbrands,These sub-brands can either be added as:

(a) Prefixes or suffixes

(b) Describe the calibre of the stretched brand by using appropriate numbers/symbols/text

abbreviationAvords/namesWhen upscaling is done using existing brands, it might not be successful,

as
customers
in
the
premium segments may not accept the brand that was present in the popular segment earlier. Though
upscaling an existing brand may not necessarily fail, the customers in premium segments will not
like to associate with popular brands. To overcome such associations is a tedious task. Using subbrands with clearly distinguishable personality and values, or introducing a new brand may be
necessary in this case. A new brand is the safest option for upscaling, as it does not carry over any
baggage of associations with existing market segments. However, it is the most risky and the most
expensive option as well.
Downscaling, on the other hand, can be accomplished easily with an existing brand, as customers
in the popular segment are glad to buy a brand that is hitherto aspirational due to its presence in the more
upscale market segment. However, the current customers of the premium brand may not like to see
their brand being associated with a downscale market and will in all probability', stop patronizing the
brand. They will switch to some other premium brand. The company has to decide if the downscale
segment is big.enough to take the risk of losing customers of the upscale segment.

Upscaling/downscaling (he entire brand

A brand abandons the present position that it occupies in the market, and moves up to become a
relatively more premium brand (upscaling), or moves down to become a relatively more value brand
(downscaling).
,,

Situation l
The company in its present position is not performing well in the market. Under these circumstances,
the company cannot move to a premium segment as the brand image even in the present market has
been damaged or eroded to some extent, if not completely so. This is the reason for the non-performance
of the brand. Therefore, a premium segment is unlikely to accept it. However, if the brand enters a
market that is geographically distant, and not as well developed or informed, it may succeed in upscaling
till such conditions last. In India, Levis is still considered a premium brand with an upmarket image and
sells at a high price, whereas in America, it has been fast losing its market share and image. Similarly,
McDonalds was never a premium-eating joint in America. In fact, its USP was to deliver consistent
quality at cheap prices for the working community. However, in India, frequenting the joint still carries
a status notion for the middle-class families, and it definitely has a more premium inrage than in its land
of origin.

The only path for this brand in distress is to move downwards. With the current resources, the
company' feels that the brand can perform better in the value platform, because the brand still has
enough equity to attract consumers in the value segment. Akai was a premium brand. It later downscaled,
and offered television and music systems at nearly two-thirds the price of the brands that offered the
same features and technology, such as BPL. Akai almost changed the price-quality relationship in the
consumer electronics market. Earlier, consumers believed that they could buy a reasonably good television
for ?15,000. When Akai started selling the same televisions for ? 10,000, consumers initially doubted the
quality of the electronic goods being sold to them at such low' prices. However, back then, Akai did fairly
well in the given market conditions. Had it stayed on in the market for another year or so, it would have
managed to completely redefine the price-quality relationship by making consumers believe that good
televisions could be purchased for X 10, 000. Even after Akai exited the market, almost all brands of
electronic goods are taking its prices as the standard and selling from there. Most brands such as BPL,
Videocon, etc,, have actually lowered their prices to the Akai level.The strategy of downscaling the brand,
due
to
non-performance
in
the
existing
market
can
be
successful, if:
Consumers of the downscaled market still believe in the premiumness of the brand. The
company should take particular care to avoid being considered a cheap brand in the
consumers mind. The company should consistently project an image of a quality product
offered at reasonable prices. Moreover, consumers feel privileged owning the brand that was
otherwise out of their reach. If possible, the company should publicize plausible explanations
for cost reductions in their operations, which are being passed on to customers. They should
insist that they are offering the same high-quality product at a lower price.
It is very important that the brand completely redefine the way customers evaluate the product
in the value segment. In this segment price is the dominant evaluative criteria. However, the
brand should not focus on price reduction, even though it is the single most important change.
It should instead focus on other important attributes and functions of the category'.
The strategy can be catastrophic if the brand image is eroded. The iinage will be preserved if
.focus is not on price reduction. It will be a slide down the precipice otherwise.

Situation 2
y-:,;;
Market conditions such as inadequate market size, slow growth rate, intense competition, etc., force the
company to rethink its continued presence in the market. Opportunities exist, however, in other markets
for this firm. The company can upscale or downscale the entire brand in this case.
Traditionally this has been truer in the case of downscaling. Customers of the value market easily
accept the brand. Companies normally find it difficult to upscale because customers of the premium
segment associate the brand with the value market.
; .1...
Gillette is one such company that overestimated the Indian market. It thought that Indian consumers
were prepared to pay more for greater value. However, they found out that such high prices did not
bring them as many consumers as they had initially thought. Consequently, they had to lower their
prices on almost all their products for all market segments. The brand has, however, managed to retain
its equity primarily because it still stands unchallenged in the market across all market segments.
Revlon is another such brand in the Indian market that had to revise its prices after it found that
the strategies were not going quite as planned. Revlons products were expensive and beyond the reach
of many Indian women in the target market. Indian women continued to favour Lakme over a better
MNC brand. The other problem, of course, was the unavailability of preferred colours. Revlon has now
revised its product range, and introduced the new range at lower prices. Several products are nowpriced at the same levels as Lakme. They have also introduced products in lower SKUs. However,
Revlon is now perceived to be a cheaper brand that committed mistakes earlier in the market. As a
result, its brand image in the market has suffered irreparable damage. New and more aggressive players
such as LOreal, Maybelline, Avon, etc., pursued better strategies, and managed to capture higher
market shares.
Downscaling may be disastrous unless enough caution is exercised. For the exercise to
succeed, care must be taken to play down the price reduction as much as possible. Instead,
focus should be on promoting the still premium brand to the new value position. The
change has been only in terms of price because the high price the company has been charging
is not acceptable in the market.

The company should also conduct research about the new position of the brand. It must not
only explore opportunities (in context of their firm and the market conditions), but must also
anticipate competitors responses in the event of their downscaling.Downscaling should noi be
done
frequently.
In
fact,
once
is
more
than
enough.
There
are
several mobile-service providers in India, none of whom have focussed on brand building.
Due to continuous price reductions, consumers are being forced to consider only the price
instead of other attributes. There exists a huge opportunity for these companies to shift the
attention of consumers to other significant choice criteria such as connectivity, clarity, reach,
etc.

Other brands upscaled under the same market circumstances (such as intense competition or
losing market share or fading image). Liberty repositioned itself as a more contemporary brand, replacing
its fading, conservative image. It has introduced several trendy designs in vibrant colours. The release
of a new ad campaign in print and television conveys this change to consumers. The ad sheds the
conventional garb of Liberty and the brand dons a new look.
The act of painting a house is no longer a drudgery, thanks to Asian Paints. Not only has this
brand launched several expensive paints, they have also established contact points with consumers (via
toll- free numbers and the Internet). Professionals from the company provide complete design solutions
to consumers.
Reynolds had the basic ball pen that was cheap. This is another brand that has come up with
costlier brands in response to its competitors. Add Ciel and Parker.
Upscaling the whole brand makes sense these days. There is a huge market in India for
brands that are more expensive than the value brands, but less expensive than the superpremium ones. These brands can focus on the rising affluent mass in India instead of focusing
on the micro segment of the super rich.
It is important to convey this new image of premiumness. The company should do this subtly
because it does not want to alienate the existing segment completely. In fact, it wants many
of its existing customers to upscale. The new segment must convey an image of some
exclusivity.
t Upscaling is a difficult exercise. Consumers will not buy a new premium brand if it has had
a strong image of being a mediocre brand. All the above-mentioned brands - Asian Paints,
Reynolds and Liberty were above ordinary in their categories. Even though they were mass
brands, they were still aloof. They all conveyed a cool and confident image as brands. They
stayed away from petty competitive responses.

Upscaling/downscaling using new brands

The company uses new brands to upscale or downscale because:
The present brand is well entrenched in the existing market segment, and enjoys high equity in
the market. Additionally, the existing market still has a huge potential. Because of these two
reasons, the company does not want to relocate the existing brand from its market.
Meanwhile, there may be other market segments that offer great opportunity to the marketer.
However, these segments may be very different from the existing target market of the company.
It may not be wise for the company to focus on these new possibilities using the same brand
name, as it poses a threat to the existing brand. This brand may lose its current associations with
the existing market, and may not be able to reach out to the new segment as effectively as any
new brand.

HUL has three brands of cosmetics catering to distinct segments of the market - Elle 18 for
teenagers; Lakme for the youth and working women in the middle and upper-middle class; and Elizabeth
Arden for the super rich, upper-class women. Lakme was the first brand that wus introduced by HUL inIndia.
Teenagers are an emerging segment of the market. Despite the success of Lakme, the brand could
not be used for this new segment, as the values desired by teenagers are different. Therefore, it made
sense to introduce cosmetics for teens under a new name.
Titan, Sonata, and Tanishq are different brands in the same category by the same company. Titan
revolutionized the watch industry'. They redefined the parameters on which consumers purchased watches.
Earlier HMT focussed on reliability and economy, which changed to design, technology and style once
Titan entered the market. Titan established itself in the upper category of the watch market that existed
then. However, it would see two markets - one above and one below it. It would have been dangerous
for Titan to tamper with its well-entrenched position by pushing the brands into these new segments as
well. So. they launched Sonata for the lower segment and Tanishq for the upper segment.
The classic marketing example of the attack of Nirma on Surf is another illustration in the same
class. HUL thwarted the attack, not by introducing Surf Popular, but by introducing Wheel in the value
segment of the market.
One of the main advantages of introducing separate brands is that the original brand remains
protected even if the downscaling/upscaling does not w'ork out. They also help companies to
tap opportunities and potential synergies.
It involves the prohibitive cost of building new brands. The new brands that are launched in
the market require aggressive promotion activities, as the company does not have the advantage
of the equity of the first/existing brands, though these brands may have great equity in the
:.:
market.
In addition, the new brand rides on its own merits into the new segments that the company
has forayed into. The chances of success or failure of these new brands (though in the same
product category) are much alike new brands launched by new competitors.
This strategy makes sense only if various segments desire distinct, non-overlapping values.
This be the case, the same brand cannot be introduced to such diverse segments. Multiple
brands will not work and result in brand cannibalization if there is even some overlapping
between the values offered by these brands, even though they might be positioned for different
segments. This is happening for many FMCG products for majors like P&G, HUL, etc.
Following this strategy, the company has to concentrate on developing and nurturing many
brands simultaneously. Since the brands necessarily have to have different values, the
competencies needed to provide these different values would also be different. This might
result into a diffused set of competencies from one that was focussed when the company
was managing one brand for a single segment. The company may*have to consolidate its
brand portfolio (i.e., withdraw from certain segments - brand pruning) and focus on one (or
fewer) segments.
-

Upscaling or downscaling using sub-brands

The company again has opportunities in other unexplored segments of the market. It may use the
strategy of introducing sub-brands in order to draw the advantage of brand equity of the existing brand
name, which was not available to companies while it introduced new brands. It also reduces the risk of
damaging the entire brand name (in case of downscaling or upscaling the entire brand) by lending
distinct identities to these sub-brands. The company also reduces the amount spent on marketing activities
by this process as opposed to introducing completely new brand names that have to be built from
scratch.The most popular instances of this strategy are undoubtedly the automobile majors Maruti and
Hyundai. Maruti 800, Zen, Omni, Esteem, Wagon R, Alto, Baleno, etc., are all sub-brands of Maruti and
Santro, Accent, Sonata are sub-brands of Hyundai.
However, Hyundai has been more successful in the market. For a very long time, Maruti was
associated with providing the most affordable car for the middle class. Therefore, when it upscaled
using sub-brands, the strategy did not work well because the consumer could not easily accept the idea
of an expeasive or state-of-the-art car offered by Maruti of the M800 fame. Hyundai did not fall into this
trap. It introduced Santro at a higher price than the M800, competing with Marutis Zen. 'fire car was
positioned as a family car offering high benefits. The offer was a value product; the price was never
talked about. Maruti stuck to M800 and Omni for more than a decade and thus, allowed consumers to
develop a strong brand association of Maruti and a cheap car. Hyundai did not let this stickiness happen.
It launched cars in the upper segments in a relatively shorter span of time. Thus, consumers accepted
that Hyundai was one company that truly understood their need to buy the best car in the respective
segments, even if it meant paying a higher price. In fact, M800 may cease to remain the entry-level
segment in the times to come.
Parker introduced sub-brands like Beta. Victor, etc. It has used these sub-brands to downscale
the parent brand. The sub-brands have become extremely successful in the market. However, in the
process, the parent brand has lost its premium position. Now, Parker is just one of the many aboveordinary brands in the market competing with the likes of Reynolds and Add Gel pens and this is
crashing down the precipice.
if a brand is highly successful in one segment of the market, it is almost impossible to upscale
or downscale it, because of a strong association of the brand with the values of that segment.
Upscaling a brand has to be a planned endeavour. The parent brand should at least have more
than an average image, and should not be stuck in the same segment tor very long. However,
they should upscale as soon as the parent brand is established.
Downscaling can be dangerous. The parent brand is sure to die. Downscaling should be done
only when the existing segment becomes unattractive and upscaling is not viable. But if a
company insists on downscaling then it should not promote the sub-brand aggressively. It
should have a quiet launch.
Most companies have been enamoured with the prospect of serving mass markets and have
downscaled premium brands that they had so painstakingly build for decades, sometimes even centuries.
They have lost it all in a few years. The mass market, for which they took this hit, is so littered with
entrenched competitors that after the initial hjpe of customers being able to own brands that they never
thought they would own, the erstwhile premium brands have become just one of the competitors. Since
the downscaled brand does not have the experience of doing business in the mass market, it has even
been muscled out of the mass market by the big fishes here. Mass markets operate by a different set of
machinations of scale, quality and price, which premium brands find very difficult to master. Parker
pens and many other iconic brands have followed the above script and dug their own graves. Mass
market has been the graveyard of many illustrious brands.

7.5 Using sub-brands are also likely to have similar effects. The mother brand, still in the more
premium segment, can face repercussions if it is not appropriately distinguishable from the
sub-brand
in
the popular segment Many consumers from the premium segment can move to the popular
segment,
thus resulting in losses. A completely new brand for downscaling is a better option than using
subbrands for a firm that wants to be active in both the premium and the popular segments. CO-

BRANDING

A relatively new phenomenon that caught the attention of academic researchers is co-branding. Cobranding is the use of two or more brands to name a new product. The basic premise behind co-

branding strategies is that the constituent brands help each other achieve their objectives. Marketers
recognized that, at least in some cases, using two or more brand names in the process of introducing
new products offers a competitive advantage. Since co-branding is the result of combining two brands
to name a product, when evaluating that product, one has to consider the overall fit between the brand
pair and the product. For instance, in the case of Petro cards, the coming together of Hindustan Petroleum
and Y'isa enabled the two companies to capitalize on their individual strengths and create a new service.
There are two kinds of co-branding;-- Ingredient co-branding and Composite co-branding.
Ingredient co-branding involves the use of one well-known brand as an ingredient in the production of
another well-known brand. For instance, brands such as Teflon and Lycra act as ingredients for making
utensils and clothes, respectively. A widely cited example of component-branding strategy is the promotion
of personal computers through the Intel Inside campaign. Intel uses ingredient co-branding while
advertising, along with the manufacturers brand name. Ingredient-branding strategy results in more
efficient promotions, easier access to distribution, higher quality products and higher profit margin.
Composite co-branding involves the coming together of two well-known brand names in such a
manner that they can together offer a unique service or product that could not be done individually. For
instance, an MTV-Citibank credit card for teenagers. The venture would be successful only if both the
brand are well known and can gain from die synergies that result through the combined venture. The
evaluation of the composite extension depends on the favourability of the constituent brands and, more
importantly, on the degree of complementarity between them.
The essential concept of co-branding is to reap the benefits of the brand equities of all the brands
involved in the partnership. They can together generate greater awareness and positive associations in
customers. All brands must have strong positive customer evaluations to initially succeed in the venture.
Each brand thus, lends positive perceptions about quality to the other, thus acting synergistically. It leads
to the generation of higher profits and market share for all the brands.
Since two or more brands are involved in the process of co-branding, they may sometimes affect
each other negatively. Certain brand values associated with one of the brands may unintentionally get
transferred to the other brand causing damage. For instance, a scandal involving one of the brands may
negatively affect the other brand in the partnership. Therefore, partners must evaluate potential advantages
and risks before venturing into co-branding.

7.6 SUMMARY
Brand extension is the use of an established brand name in new' product categories. If lets the marketer
take a brand with well-known quality perceptions and associations and put it on a brand in a new
category. Consumers who favourably evaluate a parent brand, are more walling to try and adopt the
brands extension rather than an unfamiliar brand in the same category. Line extension is the launch of
new variants in the same product category; line extensions are useful to revive consumer interest in dull
product category.
Co-branding is the use of tw o or more brands to name a new product. The two ways in which
co-branding is done are:

7.7 (i) Ingredient co-branding, (ii) Composite co-branding.KEY TERMS

Brand extension: Use of an established brand name in new product categories.

Line extension: New variants within the same product category.

Upscaling/Downscaling: When a company enters into a premium/value segment besides its

existing market.
Co-branding: Use of two or more brands to name a new product.

7.8 CHECK YOUR PROGRESS QUESTIONS

1. Often, two independent companies will cooperate to have both brands highlighted in a product.
;
These are known as:
(a) Corporate brands
(b) Corporate parent brands
(c) Brand extensions
(d) Co-brands
2. The key issue with brand extensions is whether the new product, using a previously successful
brand name, can potentially_________ if the extension is a flop.
(a) Help the parent"
(b) Harm the parent
(c) Add value to the parent
(d) Be independent of theparent
3. The main consideration(s) for the fit of a brand extension to the parent brand category is (are)
the following:
(a) Transferability of the associations
(b) Complementarity of the product
( c) Similarity of the users
(d) All of the above
4. Line extensions can be useful to reach out to new customer segments who seek new benefits.
(True/False?)
5. Line extensions can cannibalize existing variants. (True/False?)
6. Brand extensions reduce risk for the easterner. (True/False?)
7. A brand is more successful when:
(a) Quality of the parent brand is high
(b) When marketing support is good
(c) When the perceived risk of the category is low
(d) All of the above
8. The following are methods ofleveraging brand equity except:
(a) Brand extension
(b) Brand repositioning
(c) Line extension
(d) Brand stretching
9. It is easy and useful for a company to stretch its brand vertically rather than go for line extensions.
(True/False?)
10. In co-branding strategies the constituent brands help each other achieve their objectives. (True/
False?)

7.9 It is easier to upscale a brand than to downscale it. (True/False?) QUESTIONS AND
EXERCISES
1. Explain the various methods by which brands can be leveraged.
2. What are line extensions? What are its advantages and disadvantages? When are they successful?
3. Under what conditions are brand extensions successful? Explain with examples.
4. Differentiate between brand extension and brand stretching.
5. What is brand stretching? Explain various methods by which brand stretching can be achieved.
What are the conditions under which brand stretching will succeed?
6. What is co-branding? Do you think it is an effective business strategy? Support your answer
with real life examples

7.10

FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/e; Pearson.

Murthy, Brand Management, Vikas Publishing House.

UNIT - 8

RELATIONSHIP OF BRAND AND PRODUCT

; -' 'f -

UNIT OBJECTIVES

* The relationship between brand and product

The advantages and disadvantages of
individual and composite branding
The methods of maintaining portfolio of brands
.

The difference between retailer and

manufacturer brands
The threats posed by private labels to
manufacturer brands
The methods of international expansion

8.1 INTRODUCTION
Advertising and branding are accepted as important tools of competitive strategy. On the one hand, the
main value of advertising lies in the demonstration of the supplier's continued commitment to the market.
On the other, brands are used to reassure customers about the attributes of a product, as well as to
convey information about them.

8.2 RELATIONSHIP
OF
BRAND
STRATEGIES AND SELECTION

AND

PRODUCT-

The task may seem frivolous but choosing a brand name is a very serious business. A company has the
option of using a single brand name for all its products, or it can have a different brand names for each
of its products, or it can combine names when branding an offer.
Brand names should be chosen carefully since names convey images. A good brand name should
evoke positive associations, be easy to pronounce and remember, suggest product benefits, be distinctive,
use numerals when emphasizing technology, and should not infringe on an existing registered brand
name. :

8.2.1
Brand names should be chosen with a lot of foresight. Brand promoters should expect
their
brand
to last for eternity. They should have a clear idea about how they want the brand to evolve and
what
they
want it to become. Allowing the brand name to reflect themes which are in vogue now but which
cannot
be expected to be popular forever is a bad idea. If a brand name strongly reflects its association
with
a
product category, the brand promoter will find it difficult to extend the brand name to a different
category in future. Similarly if the name strongly reflects a products characteristics, it will be difficult
to reposition the brand if such needs arise. The idea is that the name should not become a constraint
in
the brands evolution or its planned life cycle. If the promoter is not clear about how the brand will
evolve, such a brand name should be chosen winch does not evoke any meaning related to either
the
product category it is currently part of, or its current customers. Having XYZ as a brand name is
really
not a bad idea if the promoter is undecided about the brand's future. But if the promoter has definite
plans tor the brand, then he can commit the brand name to something more definitive either
reflecting
the products characteristics or the customers unfulfilled needs.Family Brand Name
A common brand name is used for all the products of the company. The goodwill attached to a family
brand name benefits all the brands and the use of a name in the advertisement of one brand helps the
promotion of all the brands carrying that family name. The- risk in this strategy is that if one, of the
brands receives unfavourable publicity or is unsuccessful, the reputation of the entire range of products
containing the brand name can be tarnished.

Though the strategy has been successfully followed by many companies, there are fundamental
flaws in the strategy. A brand has strong relations with the category it belongs to. In fact, it lias to first
establish itself as belonging to the category before it starts differentiating itself from its competitors. So
effective branding is about creating points of parity and points of differences with the competitors of the
product category it is a part of. When a company uses a family name it loses some leverage in establishing
parity and promoting differences with its competitors because the family brand name carries the baggage
of its association with other product categories. A company using a family brand name has to ensure
that it is associated with only generic characteristics like quality, reliability, etc. When the company uses
the family brand name for entering a new category, it should promote aggressively to establish points of
parity and then points of difference with its competitors in the new category.
Companies using family brand names do not promote aggressively to establish their positioning
plank among customers. They believe that since customers are already aware of the brand name, they
have an easier task promoting the brand values among customers. They are wrong. Sometimes the
reverse may be true. Because the family brand name already has association with other categories,
customers may already have some opinion about the brand. These opinions may not necessarily be
negative but they may definitely not be the ones that the company would like customers to have about
the brand in the new category. Such opinions have to be erased from customer minds before new ones
can be established. The idea is that in spite of having a family brand name which is well-known, the
company has to promote aggressively to position the brand afresh when it enters a new category with
the family brand name. If however the associations that have to be attached to the brand in the new
category are at complete variance with the existing values, the company is bound to face problems. The
brand positioning can get confusing and at worse, the brands reputation in the existing and new categories
can get damaged.
. .

8.2.2
Individual Brand Name
This strategy does not identify a brand with a particular company. A company uses different names for
its offerings in different product categories. It may also use different names for different offerings in the
same product category. This is necessary when it is believed that each brand requires a separate,
unrelated identity. Sometimes the use of a family brand name may harm the image of new product line
when moving into a new market segment since the family name may carry pre-existing, undesirable
associations to the new segment.
.
However, the lack of company association can also prove to be risky and each time the company
launches a new brand it has to establish its credentials afresh. Establishing an individual brand name is an
expensive and time consuming exercise.

In spite of the expenses involved in establishing a brand name each time the company launches a
new product, the strategy of having individual brand names for all a companys offerings has some
irrefutable merits. A brand manager is not constrained by the brands association with certain other
categories. The brand can go ahead and establish strong points of parity with the category it is a part of,
and then differentiate sharply from its competitors. The company need not dilute its brand positioning tomake
it compatible with its positioning in other product categories which it would have to do if a family
brand name was being used. The brand can afford to be enmeshed within its category. An individual
brand name can become a synonym for the category it belongs to if it becomes very' strong. This is the
most enviable state for any brand manager.

8.2.3

Combination Brand Names

A combination of family and individual brand names capitalizes on the reputation of the company while
allowing individual brands to be distinguished and identified. This strategy entails using the family brand
name first followed by individual names for every brand in every product category that the company
operates in. This strategy is helpful if everything is well with the company and customers are generally
happy with the companys offerings in various categories. Each brand will benefit from the success of
the other. But the situation may start to get bad if a few offerings in some product categories start
receiving bad vibes from customers. If the situation is not rectified, customers will get suspicious about
all the brands that has the family brand name attached to it. A few more failures, and the initial skepticism
of customers will snowball into a disaster. Customers will shy away irom products bearing the family
brand name.
A company using family brand names or a combination of brand names should exercise caution.
If the company is entering a category which is very different from the ones that the company is
currently serving, or the company is not very sure of succeeding in the new' category, it should use an
individual brand name instead of the family brand name or a combination of brand names. Because the
family brand name is associated with so many businesses, too much may be at stake to risk its associations
with any business which has a reasonable chance of failing.

8.3

PORTFOLIO OF
LIMITATIONS

BRANDS:

STRATEGIES

AND

In theory, at least, most marketers recognize that they should run their brands as a portfolio. Managing
brands in a coordinated way helps a company to avoid confusing its consumers, investing in overlapping
product-development and marketing efforts and multiplying its brands at its own rather than its competitors
expense. Moreover, killing off weaker or ill-fitting parts of the product rangean important tenet of
brand-portfolio management, though not one that should be applied at all timesfrees marketers to
focus resources on the stronger remaining brands and to position them distinctively. It thus reduces the
complexity of the marketing effort and counteracts the decreasing efficiency and effectiveness of
traditional media and distribution channels.
However, marketers today face heavy pressure to produce growth in an era of fragmenting
customer needs. They often react by expanding rather than pruning their brand offerings. After all,
killing tired brands and curbing the launch of new ones isnt easy when the remaining portfolio must
capture nearly half of a discontinued brands volume merely to break even. Marketers also worry about
the repercussions of using a portfolio approach and making the wrong call. Companies today are more
likely to punish brand managers for missing an emerging opportunity than for failing when they try to
exploit it.

Uo m Relationshin <>f Brand r>Pd P m r f i K f

For these reasons, brands (including sub-brands and line extensions) are proliferating at a breakneck
pace in industries such as beverages, consumer durables, food, household goods, and pharmaceuticals.
Among other ills, this explosion makes it harder to define customer segments and positioning objectives
consistently. Consider, for example, the predicament of automakers that have stuffed their brand portfolios
with dozens of all-too-similar vehicles. Discerning indeed is the consumer who can pick out
meaningfuldiftwertee* among'diom f >st<; --ofled- i> oVofr. At} n ;vf byjfri h' fe <*! , i
rv ' lT.yV 1* ' <i ,s t, J', T- ir.
,.*i-

, \r'A jn **fm .

of them suffer frrtinfttf-i i, d n iVtinu d 1 -'\r tv.-ai eo*" A vira net

' of M ate.

If marketers a<u (<:* d HM', *hev must r< -vi .* !>>? i .ir.nsUi,, tr. t.t >.;h n*-n :tnO pi op'd o-d
b'u.r-'land instead shepherd lm< < t r*n_*'*' "ra ir* i synch- >t \?;d v*> Pro i.>- and Clantbte has phase*,
out more than 1.000 brands v, > die p -t no years a; pan o, > a > .A.'ri globe 1 I rnyi.tiirafon. And
several other consumer goods companies h-v: achieved rates of f" -mic j^-owih two to five (mtc
higher than their histr dc nereis and sa ad y- >.vi rent of rN > .n.-ijli: r>r:* One .'\;>eii,!itt;i;es by mm-i ;bv
their brand port* dios more effectively
Ih.nv is this done by-companies?- hi pert by **7 -hh-h u e*e:r . :, rairiiox-hy;:, os; i b- wn.kra
for their brands and then, within these go id It , givi g mdi id d tram v inagers plenty of scope
subject to oversight from one person who is responsible fir the portfolio a> a whole. Top-down goals,
such a; PtV(j's a cent desue to prune brands dial are not the top two r.. <forms in their categories, also
play an important role, provided that the goals are informed by a deep understanding of consumer needs.
In addition, since new portfolio strategies <" que lb r r'-mp; vvos from competitors and ba\
unanticipated f rav-conera-e compaoi.-; v. i!i h.:vc to change the organisation to facilitate quick.
coordinated responses forth portfolio ..odul a i f. r rafovidim? h> e ffi RsA i 1
unexpected .diiifo are crincui U> hoi lilt is easy to se why !marketers rosr.t the portfolio nppifach t brand'. Anvi all. cntrepicucunw
brand managers, not portfolio managers, built most ut the world's ynwr bran is. Even if most of these
brands are a part of portfolios today, a portfolio approach wasnt mowwey when the pioneers were
developing smaller numbers of brands.
But managing them.has become more difficult, since companies in maturing sectors have not
only used new brands and products to pursue continued growth but have also resisted pruning existing
ones, in hopes of maintaining market share, cash flows, and long-lit ed consumer franchises. Mergers
have compounded the problem. All too often, an acquisition motivated by; the allmte of a specific brand
.complicates the portfolio manager's task. . .
..=
.
' *

Although the search for growth provided rhe main impetus for launching, hevvbrands and sheltering
'old >nes <n st tndu s f il 11 * t x the dt ired io It In addition one-. ; growing number of
brands imposes complexity costs affecting the entire life cycle, from product development and sourcing
(more R&D resources} to manufacturing and distribution (more Idbonr schedules t- c- ofohtofo to saleand channel management (more training and more brands than the sales force can really 7 focus on) to
marketing and promotions (more documentation and more coordination of marketing vendors and
agencies).
...
The demanding nature of the solution makes matters even mors difficult: restoring order calls for
contra1:-'ad m nils5 re ;t ?lvy h-rfo of w f r u n mow to die tr :i of ww th. nvra iraphtoi ratod
marketing
organiHattons. Brand moves 'that-' look economically inactive or strategically tidy may foandei because
of the complex irtterielationsdapi between products and segments or a backlash from consumers.
' To dv.,-,1 vul, fn.,'.:
..ompa.iics uc:d a tlmabk portfolio approach sensitive to consumers
and cun cut brands aulc v\ info holey i p u- v n declarations of intent do have a place, marketers will fo
better served by first clarifying foe needs that brands could satisfy and then assessing bpth the cionomic
attractiveness of meeting them and their fit with the positioning of existing brands Only then should
marketers move to increase the portfolios value by making strategic derisions on the restnictuvisig.
acquisition, divestiture, or launch of brandsThe starting point for marketers is to define categories as
consumers do. Over the past decade or
so, PepsiCo, for example, has recognized that customers choose among all non-alcoholic beverages,
not just carbonated ones, to satisfy their need for refreshment. It has therefore made acquisitions
(Gatorade, SoBe, Tropicana), developed new products (Amp, Aquafina), and completed several joint
; ventures (with Starbucks led to the bottled Frappuccino). Strong operating results have follow'ed.
- Successes such as PepsiCo's result front a judicious, deliberate broadening of a company's
frame of reference. The revised view of consumer needs is neither too narrow and category constrained

Uo m Relationshin <>f Brand r>Pd P m r f i K f

nor too broad and conceptual. Moving gradually often helps companies to strike such a balance. PepsiCo,
for instance, initially expanded its frame of reference from cola drinks to all carbonated beverages and
only later moved into non-alcoholic, non-dairy ones. The fit between the redefined frame, of reference
and existing organizational capabilities also provides a reality check. When an expanded frargeyjf reference
. implies brand-extension opportunities that a company cant easily seize by itself, it must weigh the
benefits of acquisitions or partnerships to broaden its portfolio against their complexity costs.
Within a given frame of reference, marketers need a disciplined way of evaluating their brands'
opportunities. One is to scrutinize need statesthe intersection between what customers w'ant and
how they want it. Many marketers think about need states from time to time, but most define their
brands by product (for instance, an economy brand) or consumer segment (young adults, say) instead
of consumer needs (people consume this brand when they want something cheap, dont care about
i nutrition, and cant spend time cooking at home). Although thinking through need states is demanding,
it often suggests new ways for existing brands to satisfy the needs of customers, thereby helping
marketers avoid the common trap of launching a new brand every time they want to enter a market. If
consumer needs are largely shaped by the occassions in which a product is used, it is often appropriate
to offer the target consumer a number of brands.
Need states are more than descriptive toolsthey also represent market opportunities. To evaluate
them, marketers must begin by estimating their size. Since heed states rarely coincide with conventional
market definitions, it is often necessary to piece together known segment-share and channel-mix figures
creatively. Category, consumer, product and packaging trends can point to the likely future size of heed
states, and potential shifts in the intensity of competition can shed light on future profitability.
But a profit map is not a portfolio strategy. For starters, to target some seemingly attractive need
states, it may be necessary to reposition brands such that they no longer appeal to their original consumers.
Such considerations help explain Toyota Motors 1989 decision to launch Lexus as a separate brand and
not as a new Toyota model.
To avoid positioning mistakes, marketers must understand each brands unique contribution to
the portfolio. Mapping its current brands against the universe of relevant need states is a helpful starting
point. The most valuable insights often emerge when marketers use statistical tools and market research
to assess the relationship between the things customers value in a given need state and the attributes that
differentiate the brand for them. Combining this consumer knowledge with conventional metrics (such
as each brands market share within a variety of need states as well as the proportion of each brands
volume that a need state represents) helps clarify the attainable opportunities for each brand and the
amount of differentiation or overlap within the portfolio.

Many, companies mapping out their portfolios find that they have at least one relatively weak
brand. Some choose to retain and improve underperformers rather than jettisoning them or targeting
them toward new customers, but that approach carries risks. Frequently, companies that hold on to
underperformers cant really support all of their brands and thus have to make small cuts in the resources
allotted to each, thereby undermining the performance of their portfolios. One benefit of developing aprofit
map is that it helps catalyze more dramatic action by painting a clear picture of the economic
opportunities companies forgo if they dont take the portfolio approach.
Marketers generally have two options for achieving their portfolio goals. First, they can restructure
their brands by repositioning those that have lost relevance to the target segments, by consolidating two
or more mature brands competing for the same consumers or by divesting a brand that absorbs more
resources than it contributes and holds little promise of a turnaround. Restructuring does not involve
pursuing customers whom a company does not currently serve, rather it means changing the brands
that serve its present customers. The other option is to change the portfolio to drive new growth by
launching a new brand, by acquiring or licensing one from another company, or by redefining an
existing brand to target a new category of customers.
Restructuring is more risk prone because it involves modifying brands and consumer attitudes.
But though careful management is certainly needed to restructure brands without losing customers, the
risk of adding new brands or categories is often greater, and so are the investments. Value-creating
brand acquisitions are tew and far between. Roughly three-quarters of all new brands fail, And despite
success stories, stretching brands into any new category is risky because it is easy to go too far and the
brands may lose their identify. Brand managers are accustomed to making headlines through launches or
acquisitions, but such tactics should be considered last as a portfolio strategy'.
Of course, companies can rework their brand portfolios in a number of ways, which are often
interconnectedif one brand is repositioned, that may have ripple effects for others so it is not
practical to evaluate each brand move in isolation. Marketers must therefore develop and compare a
manageable number of plausible scenarios that bundle compatible moves. Each scenario should involve
only a few of them, more than four or five can overwhelm a marketing organization and confuse
consumers. To define those moves, a company must make decisions about issues such as the right
number of brands, and which to have, and the advisability of offering umbrella brands with sub-brands
beneath them rather than a medley of individual ones.
Several rules of thumb help marketers to avoid playing a trial-and-error game. First, they can
build their strategies around leading brands. If well-known brands arc financially successful, their role in
the portfolio should not change much, but when they underperform it is critical to adjust their positioning
before recrafting the roles of other brands. Second, marketers must ensure that their sophisticated and
ambitious portfolio ideas are feasible in view of internal resource constraints and likely competitive
reactions. Finally, they should know when a brand is the consumers second choice. Research techniques
such as conjoint analysis can help them learn whether two or more adjacent brands are taking share and
margins from each other or from competitors.

8.3.1

Managing the Brand Portfolio

Getting a strategy right is only part of the battle; companies must also make organizational changes if
they are to adapt their brand portfolios quickly to shifting trends, competitive responses, mergers, and
new-product launches while also managing the natural life cycle of their brands. Since taking action
with one brand often means doing so with another, companies must appoint a dynamic portfolio manager
who can ensure that the whole portfolio moves nimbly.

How can a company centralize this kmd of authority without handcuffing the managers of its
individual brands? That depends largely on how it constitutes the portfolio managers role. The crucial
thing is that the person who holds it must have the ability to determine, on an ongoing basis, how well
individual brands are fulfilling their part in the portfolio strategy and whether the strategy itself still
makes sense. The portfolio manager must, of course, have certain traits and skills. But much will also
berequired of the organization, including unity of purpose across functions and businesses and robust
metrics for tracking performance.

8.3.2

Structural Options

To articulate and monitor a brand portfolio strategy, the portfolio manager must have the authority, the
marketing skills, the facts, and the analyses to sway the brand managers. Sometimes the chief marketing
officer, the vice-president for marketing, or a person who rose through the ranks of the marketing
organization and then became general manager of a business unit can serve as portfolio manager while
still carrying out his or her primary duties. The support team might consist primarily of analysts who
have some responsibility for individual brands but can be called up by the portfolio manager for major
events, such as a nevv-product launch or the acquisition of several brands. At the extreme, brand teams
might have a fluid membership.
In other cases, particularly in industries characterized by rapidly changing tastes (fashion), many
sub-brands (automobiles), or rapid consolidation, a full-time portfolio management structure may be
warranted.

8.3.3

Essential Tasks

Whatever structure a company selects, it is vital for the portfolio manager to channel the entrepreneurial
energies of the brand managers in the right direction and, when necessary, to make them trim their sails
or change course. The portfolio manager must get individual brand groups to endorse the portfolio
strategy formally. Incentives that reward them for the whole portfolios performance help to ensure that
they dont revise their brands strategies when no one is watching.
Meanwhile, the portfolio manager should reconcile the portfolio strategy with functional agenda*
elsewhere in the company.
Measuring whether each brand is fulfilling its role in the portfolio is crucial. Standard metric*
show whether consumers know about, have tried, or ever considered purchasing a brand; their attitude*
toward it, rates for converting prospects into customers and for retaining customers in target segments,
and levels of customer satisfaction. Other metrics should be tailored to the strategic goals for each
brand. If the managers of several brands in the same portfolio track identical metrics, the company
often has a problem: either the metrics are at too high a level to shed light on the relative performance of
different brands, or the brands are positioned so closely together that the strategy needs a rethink.
Although the annual planning process is normally the time for such dialogues, brand managers
should raise red flags whenever these issues appear, particularly if the portfolio managers likely response
to them includes adding a brand. When market researchers recognize a new' consumer trend, the portfolio
manager must get involved to avoid a familiar outcome: a number of similar products for similar customers
and need states.
Marketers are uneasy about rigorous brand portfolio management, but overcoming this mind-set
can pay big dividends. For companies that succeed, setting the., portfolio strategy' is not a onetime event,
it is a living, breathing part of day-to-day business.

8.4 RETAILER BRANDS

Traditionally, manufacturers branded their products and sold them to customers by using the distribution
channel. Wholesalers, distributors and retailers sold only the manufacturers brands. Manufacturers
were thus able to exert control over these distribution channel members. In the past few decades,
however, some distribution channel members, particularly retailers have started selling their own
brands,called private labels. These brands are usually of comparable quality with the manufacturers brands,
though they are priced lower. These private labels are given more prominence in the retail stores, thus
enabling the transfer of power from manufacturers to retailers.

8.4.1

Manufacturer Brands

These arc created by producers and bear their chosen brand name. The responsibility' for marketing the, .
brand lies with the producer. Most manufacturer brands are supported by massive advertising budgets.
They also have to manage long, distribution channels to reach the final customers. The producer is an
expert in designing and manufacturing the product. Though the producers, may eventually become great
marketing organizations, like Proctor Gamble and Unilever have, their main prowess lie in technologies
and processes underlying the product. A manufacturer brand is likely to be more advanced and may
have more innovative features than other brands in its category.

8.4.2

Own Label or Distributor or Store Brands

They are created and owned by channel intermediaries. Most of these brands are owned by big and
powerful retailers. The retailers do not manufacture these brands and may not have any knowledge
about the underlying technologies and processes of the product. Retailers almost completely outsource
manufacturing. Since retailers are in contact with customers they can give very important information
about the likings and disliking of customers, which the manufacturers of distributor brands can incorporate
in the products they manufacture for the retailer.
The prestige and power of the brand depends on the brand equity of the retail store. The retail
store is the main brand. The retailer gives preference to his brands when placing products on the
shelves. The retailer does not need to promote the brand very extensively and mostly resorts to in-store
promotions, and promotions in the local media. Since the retailer does not incur much distribution and
promotion costs, the retailer brands can be sold cheaper than comparable manufacturer brands.
For a very long time customers believed that retailer brands do not match the quality levels of
manufacturer brands. This had some linkage to the lower prices at which retail brands were sold as
compared to manufacturer brands in the same product categories. Retailers worked on the quality of
their brands to change customer perceptions. Now even premium brands in some categories are retailer
brands. Instead of considering the business of own label brands ancillary to the main business of
retailing, some retail chains see this as important part of their business and an important contributor to
their revenues. Customer perceptions about retailer brands have changed to the extent that they find the
prices of the manufacture brands too high compared to those of retailer brands, whereas they find the
quality of the two to be comparable. Customers have become sophisticated enough to understand that
the reason for lower prices of retailer brands is the lower cost incurred by retail chains in distribution
and promotion and not because they are of lower quality.
The power of the low price of own label brands has forced many producer brands to introduce
so called fighter brands or their own low price alternatives to retailer brands. A major decision that
producers have to face is whether to agree to supply own label products for retailers. The danger is that
should customers find out, they may believe that there is no difference between the manufacturers
brand and its equivalent which is being produced by the manufacturer, but being sold under the brand .
name of the retailer. For some producers supplying own label goods may be a means of filling excess
capacity and generating extra income. But manufacturers should view manufacturing for distributor
brands as a more strategic decision. They should see it as an opportunity for cementing their relationship
with retailers. They can choose to manufacture those retailer brands which are in alignment with their
operations strategy and from whose manufacturing they can learn something which they can apply in iknig
their Own biaitUs Ocliei.

Xttfty
ut'
H'.H
HiaiUtidCCutt, aoi'iitoilt
f
.d.c Will, but by IICJCIJ* ill ihc IOO]J
iiStljbUtOi

of the ;:?!iStC2U.S bt'Ulv i i, plMVC.i by tho U and

hiaikds

they

ft1 llicv oa'i! coimtei it.

filing with retailer brands'private Sahel:,

; tbtis and nuy Stay that
i.d faciois suggest diui w. xn of private labels threat in the 1990s .
vajyregardless of economic coulitvotis.
The Improved Quality c* I'nvute Lithe! Pmlu<~t$: Uarlbr, there was a
distinct
gapTri
Ihelev
el
of
quality between private label and bi acted products. Today that pap has narrowed and private

tnty
i
would
maria

label quality levels are much higher than evci beiOK- I hey are also mere const tteitt, especially in
categoriesJnstoricai:y cuatacicfizrd by little product innovation. fi-.e list; iouters dtat contract
for private land ptooucu .. havewumffved rhdr or<fufcmchi processr., P.d iftotn 'careful
about monitoring quality.
The Development of Premium Private Lube brands. Innovative retailers have .down IIK rest of
the trade how to develop private label line that delivers quality superior to that. >!' itional
brands. AS a result of cat eibi, worldwide procurement, retailers can squeeze the national brands
between its top-of- the ii:. _ brands and the regular private label line.
European Supermarkets Success with Private Labels: In several markets across the world, higher
private label sales result in higher average pre-tax profits. These profits are higher tli; n profits
earned by manufacturers
But a growing number of retailers believe that strong private label programmes can successfully
differentiate their stores and cement shoppers loyalty, thereby strengthening their positions with
regard to brand-name manufacturers and increasing profitability.
* The Emergence of New Channels: Mass merchandisers, warehouse clubs, and other channels
account for a growing percentage of sales of dry groceries, household cleaning products, and
health and beauty aids. Wal -Mart Stores, in fact, is already one of the top ten food retailers in the
United States. Private labels accounted for 8.8 per cent of sales at mass merchandisers in 1994;
in some categories, that percentage was much higher. For example, 39 per cent of soft-drink
volume sold in mass merchandisers is private label versus 21 per cent in supermarkets in the US.
The Creation of New Categories: Private labels arc continually expanding into new and diverse
categories. In supermarkets, for example, private labels have developed well beyond the traditional
staples such as milk and canned peas to include health and beauty aids, paper products such as
diapers, and soft drinks. Private label sales have also increased in categories such as clothing and
beer. With that expansion comes increased acceptance by consumers. The more quality private
label products on the market, the more readily will consumers choose a private label over a
higher-priced brand name. Gone are the days when there was a stigma attached to buying private
labels.
Taken together, these trends may seem daunting to manufactiuers of brand-name products. But
ell only hr If the story. The increased strength of private labels does not mean that national brands
fade awH Indeed, such brands are alive and reasonably healthy. It requires only a dedicated
cmenttv. U "ive.

 ; process favours manufacturers brands. Brand names exist because consumers

n assurance of quality when they do not have the time, opportunity or ability to
i n s p c n a t i v e s at the point of sale. Brand names simplify the selection
process
in
cluttered
product categories.Brand-name goods have a solid foundation on which to build current advantage.
Put
simply,
brands have a running start. The strongest national brands have built their consumer equities over
decades of advertising and through deli very of consistent quality. From year to year, there is little
change in consumers rankings of the strongest national brands.
Brand strength parallels the strength of the economy.
National brands have value for retailers. Retailers cannot afford to cast off national brands that
consumers expect to find widely distributed. When a store does not carry' a popular brand,
consumers are put off and may switch stores. Retailers must not only stock but also promote,
often at a loss, those popular national brands that consumers use to gauge overall store prices.
Even if, in theory, retailers can make more profit per unit on private label products, those products
just do not have the traffic-building power of branded goods.
Excessive emphasis on private labels dilutes their strength. What could be more convenient,
some retailers argue, than to have consumers remember a single store name? The problem is that
stretching a store namejust like a manufacturer name over too many product categories
muddles the image. Many consumers rightly do not believe that a store can provide the same
excellent quality for products across the board. Even leading retailer stores have found it necessary
to invest in category-specific sub-brands.
Faced with the pros and cons of private label production, what should manufacturer brands do?
There can be several recommendations to companies that do not yet make products for the private label
market:
Some brand name manufacturers make private label goods only to use occasional excess production
capacity. In those circumstances, private label production may seem tempting. But although the system
may work well for a company for a time, private label production can become a narcotic. A manufacturer
that begins making private label products to take up excess capacity may soon find itself taking orders
for private label goods in categories where the market share of its own brand is weak.
That step, too, may seem reasonable enough. Indeed, production managers may argue that in
addition to using up excess capacity, private label production can increase cumulative production
experience and decrease unit manufacturing and distribution costs. The next step in the process is to
supply private label goods in categories that are the lifeblood of the manufacturers branded sales. After
all, the thinking goes, high-volume private label orders placed well in advance of required delivery dates
can help smooth production and take less time and effort per unit to sell than the companys own
branded goods.
From that point, how'ever, the results of those tactics are predictable: the companys strategy
becomes confused, it starts to cannibalize its branded products and it may even face financial disaster.
Manufacturers still tempted by private label production should understand, first, that managers
invariably examine private label production opportunities on an incremental marginal cost basis. The
fixed overhead costs associated with the excess capacity used to make the private label products would
be incurred anyway. But if private label manufacturing were evaluated on a fully costed rather than on an
incremental basis, it would, in many cases, appear much less profitable. The more private ;bel production
grows as a percentage of total production, the more an analysis based on full costs b> ">mes relevant.
Second, private label production can result in additional manufacturing and distriF
complexities
stiff''

that add costs rather than reduce them. For example, packages and labels have to b A for each
private label customer, and inventory holding costs increase with each private labiThird, efficiencies of
selling
private
label
contracts
are
also
exaggerated.
Whenever
a
private
label
contract comes up for renewal, there is inevitably a long and arduous negotiation as competitors attempt
to steal the business. Moreover, since most retailers employ different buyers for national brands and
private labels, manufacturers must maintain two sales relationships with each retailer.
Fourth, it is easy to overstate the relative contribution of private label goods and therefore to
understate the cost of cannibalization. And even though selling private labels often requires a separate
sales relationship, sales forces generally sell where they are most welcome and this means that invariably
offerings by private labels end up in a manufacturers strongest accounts, not the weakest.
As private label and national-brand manufacturing and marketing are based on such different cost
structures, it is hard for one organization to do both well. Some companies try to manage both together
to approach the trade with a total category solution, but this practice often leads to strategic schizophrenia,
pressure from demanding retailers to give priority to less profitable private label shipments, and unproductive
use of management time in reducing conflicts.
Other organizations try to manage their private label business in separate divisions to compete
better with the lean cost structures of private label-only manufacturers. In such organizations, private
label manufacturing cannot be contained, and inevitably the private label goods cannibalize nationalbrand sales.
Proponents of private label manufacturing suggest that private labels are necessary for competitive
reasons. If one manufacturer refuses private label contracts, another will take them, perhaps using the
profits from private label manufacture to support the marketing of its national brands. Since private label
purchasers represent a legitimate and continuing consumer segment in most product categories, the
goal of diversification argues for a manufacturer having a stake in both parts of the market. Proponents
also argue that the dual manufacturer has more ability to influence the category, the shelf-space allocation
between national brands and private labels, the price gap between them, and the timing of national-brand
promotions, and further, that its clout with the trade is enhanced by supplying both national brands and
private labels. Moreover, the learning about consumers and costs that comes from being in the private
label market can enhance the manufacturers ability to defend its national brands. And again, considered
alone or in a short-term context, these views can seem compelling.
A few companies have used private label production effectively as a temporary strategy to enhance
competitive advantage. In Europe, PepsiCo Foods International succeeded in capturing private label
businesses from its key competitor, forcing it to close plants and, more importantly, weakening its
national brands. In the United States, General Electric Company used a Iwo-step process in the light
bulb business. It first captured private label trade contracts from competitors and then proved through
comparative in-store experiments that trade accounts could make more money just stocking GE light
bulbs than by stocking both GE and private label bulbs.
There is no evidence, however, that making private label products enhances a
brand manufacturers trade relationships in the long run and results in preferential merchandising support
for its national brands. Far from enhancing diversification, private label contracts can increase a brand
manufacturers dependence on a few large trade accounts, force the manufacturer to disclose its cost
structure and share its latest product and process improvements, and result in margin pressure every
time a contract is up for renewal.

'JiiitJieUlliQ/lsilUfl (ij iit'M.ti Uhd

triXHiQi
* If the company does produce private label goods, it is important to assess their effect on the
business as a whole and to keep private label operations under control. Taking the following steps
should
help: tUISg jCOUdUOt *1 pO v.Uv iu-OC* .aud-H. AU*aWU'*giy, top-level CKCCUil VCS..3J D'iUUj. *v.>itipuOC.S i_k> Ik/t
. know how. uadi
label bd-',Hv>s Stk.;t wganm.tliuiii, do. This ignorance L>most evident in
multinationals with fur-Hung opetarionS that h.r. c ymwn rapidly through acquisition:;--especially
of businesses in Europe and Canada, where private label, penetration is strong. Often those
, companies internal control s>stems d<. n w uc utateiy reika private label sales or the addiiioaot
.toek-hcepuig Ufiit-v dcvuitu UJ illulit
Second, calculate pnvatglabel profitability on both a full-cost and marginal-cosi basis. Research
cveaL-.-ibut.on a full-mst basis prt\ >ic itow business could be unprofitable-in almost ull categories
'turd rein? o. *he : no .cl of priwit,- iwoot:-- tin- market .durt> . t lac t a b . rial or mbs.
Finally, dose -e ? ctwK captpcjtjv Th<- option of shutting down unused-capacity is almost cover
- -coTiSidercd rn me private label deb-m

K a f i o ' i ' d o 'mnioVtuie1-' /*-n fie

refers - whether thee eurknfiv make prime'
land products or not.............to stem any Gather sMte * a ms by nrr-ite hbc*"-
r '

'
i hives; in brand equities: For mew consumer go. d.- mpamee. the brand names limy own atc
their most important assets. A brand is the capitalized value of the trust between a company and
' its customer. Brand equity - the added \ due by * h i-nuier* y:v$ to the underlyin'}* ptbduct- must be carefully nurtured by each successive biami manager Managers must continually monitor
how consumers perceive the -brand.. Consistent dear- positioning supported by periodic product
;dr i improvements that keep the brand contemporary without distorting its fundamental promise, is
essential Consistent investment in product improvements enhances a brands perceived super iority,
provides the basis for informative and provocative advertising, increases the brands sustainable
price premium over the competition, and raises the costs to private label imitators who are
constantly forced to play catch-up. innovate wisely: Desperate to increase sales and presence tin the shelves and to earn quick
promotions, too many national-brand managers launch line extensions. Most that are of marginal
value to customers, dilute rather than enhance the core-brand -franchise, add complexity and
administrative costs, impair the accuracy of demand forecasts, and are unprofitable on it fullcost basts. Too many line extensions confuse consumers, the trade, and the sales force, and
reduce the manufacturers credibility with the trade as an expert on the category-In addition, if
. line extensions fragment the business, the average retail sales per item will decline. That, in tum,
opens the door for a private label programme that focuses just on a brands best-sellers and
therefore can deliver attractive average sales and profits per item. Product-line extensions do
make sense when a category has a large premium component and the level of rivalry is high. But
in most instances, especially in commodity categories that are driven by price, product-line
proliferation and innovation ate a waste of money.

Relationship of Brand and hvduct * 98

Use fighting brands sparingly: For similar reasons, managers should be wary of launching fighting
brands, which arc price positioned between the private labels and the national brands they aim to
defend. The purpose of a fighting brand is to avoid the huge contribution loss that would occur
if a leading national brand tried to stem share losses to private labels by dropping its price; the
fighting brand gives the price-sensitive consumer a. low-cost branded alternative. However, die
fighting brand can end up competing with the national brand for consumers who would not have
switched to private label products anyway. Rarely do fighting brands make money. The management
tune that these products absorb is often better invested in building the equity of the national
brand.Build tmde relationships: The best consumer goods companies should know more about then
consumers and their categories than any private label manufacturer. Indeed, they should also
know more than their trade customers, who. though closer to the end consumer and inundated
with scanner purchase data, have to plan assortments of products and allocate shell space for
250 to 300 categories with less resources. Manufacturers must leverage their knowledge to
create a win-win proposition for their trade accounts; retailers and national-biand producers can
.maximize their profits jointly without excessive emphasis on private labels.
Many retailers emphasize private label products because they often deliver a higher percentage of
proiit margins than national brands. However, the rate or pi here label turnover and the absolute
margin per unit may be lower. In addition, retailers often mistakenly compare apples and oranges.
They dont always take account of promotion costs for the store name that builds private label
demand. They also may omit their warehousing and distribution costs for private label products
when comparing private label retail margins with those of national brands that manufacturers
deliver direct to stores and stock on the shelves.
Jnvariably, the shopper who buys a national brand rather,than, the private label in the same
category spends more per supermarket visit and delivers a higher absolute and percentage margin
to the retailer. The private label shopper is not the most profitable for the retailer.
Retailers views of how many consumers are attracted to their stores by private labels is often
exaggerated. National-brand manufacturers can suggest and pay for tests that compare the sales
and profitability' of a control stores current shelf-space allocation plan with the sales and profitability
of a shelf-space plan offering fewer or no private label goods.
By responding to customers and managing categories more efficiently, leading manufacturers
have found new ways of favouring trade accounts that support their national brands over private
labels and of not being quite so helpful,to those that dont. For example, companies are becoming
increasingly sophisticated about how they spend, their trade dollars. Instead of giving straight
discounts, manufacturers are asking for pay for performance, in which retailers are paid more
if their sales activities are successful.
Manage the price spread: During the 1980s, consumer goods manufacturers increased prices
ahead of inflation (the easiest way to add to the bottom-line in the short term) and then offered
periodic reductions off their artificially inflated list prices to distributors and consumers who
demanded them As long as some still paid filll price, this price discrimination was thought to be
profitable. Over time, however, such a high proportion of the typical brands volume was being
sold at a deep discount that the list prices no longer had credibility. Further, the added manufacturing
and logistics costs of the promotions and the increased price sensitivity they stimulated played
l into the hands of private labels. National-brand manufacturers must monitor the price gap both to
the distributor and to the end consumer between each national brand and the other brands,
including private labels, in every' market. They must also understand how elastic the price is for
each national brandthat is, how much effect changes in price have on consumers. Knowing
the shape of die brands price elasticity curve is essential to smart pricing and to maximizing the
brands profitability. A price reduction on a popular national brand may result in a lower profit
contribution, but studies show that private label sales are twice as sensitive as national brands to
changes in the price gap. In other words, a decrease in the price gap would swing twice as many
sales from private labels to national brands as a corresponding increase would swing sales to
private labels from national brands.Exploit sales-promo Hon tactics: National-brand manufacturers
cannot
prevent
retailers
from
displaying copycat private label products alongside their brands with 'compare and save signs
heralding the price gaps. However, they can use sales promotion tactics to enhance the
merchandising of their brands. Strong brands with lull product lines can sometimes secure retail
space for their own custom-built displays. Manufacturers can emphasize performance-based
merchandising allowances that require special in-store displays or advertisements over cash
discounts applied to invoices. They can reward retailers for increasing sales volume (as verified

Relationship of Brand and hvduct * 99

by scanner records) with rebates. And they can distribute coupons to households in areas where
retailers are aggressively providing private label products.
Menage each category: What works for detergents wont necessarily work for soft drinks.
Categories differ widely in private label penetration, the price-quality gap between private labels
and national brands, and the relative profitability and potential cannibalization cost of any private
label or value brand.
In categories with low private label penetration such as candy and baby food, managers must
understand and sustain the barriers to entry- -such as frequent technological improvements within
a category, a manufacturers low-cost producer status, or intense competition among national
brands.
In categories with emerging private label penetration, it is useful to consider value-added packaging
changes, and in some circumstances, line extensions that make the product stand out on the
shelf, keep consumers attention focused on the national brands, and raise the costs for private
label imitators. Promotions targeted at trade accounts showing interest in private labels may also
be useful, along with advertising that focuses consumers on the advantages of the national brand
and then warns them against imitations.
In categories with well-established private label penetration, the goal is containment. The emphasis
must be on lowering the costs in the supply chainthrough minimum orders, truckload and
direct shipment discounts, more efficient trade deals, and the elimination of slow-moving stockr
keeping unitsto save money for reinvestment in the brand.
Use category profit pools as a performance measure: Most consumer-goods companies use
market share and volume as the primary measurement tools for category' performance. These
tools can lead to poor decision-making because they inherently value all share points equally.
When a manufacturers objectives are to maximize both foe overall category profit pool and its
share of that pool, foe decision-making is generally very different from traditional share and
volume measures.

Take private labels seriously: Too many national brands treat private label competition as an after
thought in their annual marketing plans. They regard only the other national brands as their true
competitors. The emergence of premium private labels and national store brands makes this
oversight more dangerous. Stealing market share from weaker national brands often merely
opens the door for more serious private label competition. Every national brand marketing plan
should include a section on how to limit foe encroachment of private labels. The marketing plan
might include specific actions to be taken in categories, trade accounts, or regional markets
where reports indicate private labels are gaining ground. In addition, national-brand manufacturers
should bring more legal actions against manufacturers of copycat private labels who use the
same packaging and colours as national brands, and they should strengthen arrangements with
contract suppliers to prevent them from using new proprietary technologies in the manufacture
of private label products.Manufacturers of national brand can use some or all of the strategies outlined above
to
win
the
battle against private label producers. By taking firm, considered action, brand name manufacturers can
successfully fight the private label challenge.

8.5 INTERNATIONALIZATION OF BRANDS

Global branding is achievement of brand penetration worldwide. Intensified competition and technological
development will force companies to operate globally.' Emergence of global markets for standardized
products and services on a huge scale is the new commercial reality. The reason is consumer
convergence of tastes and needs and prospects of global efficiencies in production, procurement,
marketing and R&D.
However, national varieties in taste and consumption patterns hinder standardization. Brands can
be built on a global scale, but which parts of the brand can be standardized and which must be varied
across countries has to be decided.

8.5.1

Elements of a Brand

Elements that comprise the brand arc:

Brand form: Quality, formulation, design, variants
Brand additional: Delivery, service, guarantees
Brand communication: Name, execution, packaging, advertising, publicity
It is difficult to prescribe one standard format for creating a global brand. Two facts remain
irrefutable
There are massive efficiencies to be achieved in production, marketing, procurement, and R&D
if a standard product could be sold in a common way in all markets of the world.
There are real differences among markets in terms of the types of product they need and prefer,
the communication channels that are available and useful, and the additional services that they
require with the product.
Global marketers have to reconcile these two facts.
A global branding strategy need not follow all-encompassing standardization, i.e., the company
sells the same product in all its markets, uses the same method of promotion in ail markets, and gives the
same services. Nor should the strategy be of treating each market
very
differently,
i.e.,
each
market
being served with a different product, the product being promoted
differently,
and
different
services
being provided with the product in each market.

8,5.2
The company should analyse each market and decide if any one, two, or all three elements
of brand form, brand additional, and brand communication can be standardized across all markets.
For example, a packaged food items brand form may be different in different markets as peoples
tastes vary, but the brand additional and brand communication may be standardized across all
markets. In case of automobiles, the brand forms across all markets may be the same but brand
communications and brand additional may be different in different markets. The idea is that global
brand managers should understand each country market and then decide the amount of
standardization
that can be permissible. 31Methods of Achieving Global Brandi Presence2
Companies can achieve global presence either through organic growth (by entering new geographic
areas), or by inorganic means (acquiring brands in the new geographic markets).
..
T
/ V\ s -* Vt'C liMT/
V- * P C
Geographic extensions
A company takes present brands into new geographic markets. The company will have to decide the
extent of standardization that will be possible in each of the geographic markets. This strategy will be
very useful if the new market is similar to the ones it is serving now because the company will not be
required to make many adjustments in the brand form, brand communication and additional services. It
may sometimes happen that the new market may be so different from the markets it currently serves
that that a new product has to be designed for live market, new methods of promoting the. brand have to
be, devised, and new services have to be offered with the product; Such a foray into a new geographical
market will be very expensive and risky, and can be justified only if the market potential is very big.
Brand acquisition
>, ,
A company purchases brands which are already selling in the markets that the company wants to enter.
Brand acquisition is the fastest method of developing global brands.
The company should retain the essential elements of the acquired brand and support it with its
financial and managerial resources. This is a good strategy for markets which are very different from
the markets the company is currently serving. If the company wanted tointrnduce its' own brand in
such a market it would have to make wholesome changes in the design of the product and the way it is
marketed. This can be expensive and risky. The company can use its experience to launch its own
brands at some later stage.
- v c* ^ T .< s {!.

,)

-V > ~

vr

iTix. \\V

Brand alliance
Fite company enters into joint ventures or partnerships to market brands in national Or cross national
markets. The company may find the new market to be very different from the ones it is operating in. It
is not prepared to make wholesome changes in the design of the product and the way it is marketed
because it is not sure if it understands the market enough to bring about these changes. It is also waiy
of buying local brands because it does not know the real strengths of the local brands, and is not sure as
to how the,local brand will fare as part of its brand portfolio and whether it can add any value to the
brand. The company is essentially scared of treading alone in the new market. It looks for a partner who
has experience in the new market. The local partner provides knowledge about customers and local
environment, whereas the foreign-based company provides the technology and most of the resources.
Such an alliance does not survive for long as the foreign-based company soon gets enough knowledge
about customers and local conditions, and does not fee! the need to put up with a partner which,
anyway, is not contributing much to the partnership. In most cases the foreign-based company buys out
the local partner.

Global brand portfolio

Companies need to manage a portfolio of strong local global brands. The right mix of standardization
nnd adaptation of elements of marketing mix cancnablc the company to build strong brand equity.
Marketers always fancy creating global brands whose positioning, advertising strategy, personality,
look and feel can be standardized in most respects across countries. Having a global brand simplifies lifefor a
corporation: Products do not have to be developd -for each region tor country, Separate advertisement*
do not have to be created for each country or region, and nuances '{'customer behaviour do not {ve31 Rarwise, P. and T. Robertson. Brand Portfolios'. European Management Journal, (1992), 10 (3),277-85.

to be unearthed 'every time the brand enters a wv c iontry.

Howsoever great the advantages of having y global brand, the fee Wes <>f .-.virket--: in different
regions are so different from one another that building a truly global brand cannot be i winning ptoposhfo-*..
Customers in different regions live, behave, communicate and feel differently. They appreciate ani
value different aspects of a brand in different regions'. The same brand Will lave to appeal to different
faculties of customers in different markets. There are sonic similarities among customers across regions
but the differences are galore, and a global brand built to cater to die common denominator will no*
tftJHre&'the finer needs of customers*and will never be successful. A bfahifsf appeal Is governed by its
taking account of finer and detailed aspects of customers needs and behaviours. In fact, a strong brand
is built around differences between customers' requirements and behaviours rather than similarity among
them. A competitors brand will creep in to capitalize on the global brand's missing attributes. And if t
corporate decides to adapt the product and its messages for different markets, it will find the adaptation
very cumbmdrhe and costly. Most companies realise that it is a better proposition to design a product
and its messages afresh rather than adapt an e.-d u-ng .*v>Aiet and its 'me sage
But while building a global brand is ha>ardour the answer i: not create independent and
isolated regional or local brands. There is a middle ground between r, truly global brand and" isolated local
brands. Marketers have to learn to exploit the C'rr,kr,lenten 1.*w rd.v -::t gb-bel rind local blooding
strategics and programmes,
"
A 'local brand would have learnt important lessons in its journey to being successful. It is
important that this knowledge is 'shared among executives who are responsible for building
brands in other regions. There may be a feeling among executives that each market is different
from the other and what has worked in one country will not work in the other. It may not, but
it also might. Fresh experiments in brand building in a new market are co-wiy and risky, and a
lot of them, can be avoided if executives learn from the experiments that other executives
have carried out in their markets The idea is not to prescribe what has Worked in one mm 1 .
to other markets, but to let executives know what has worked in which market and whet...;
what has worked in one market will work in their market. Therefore tire idea is to build an
* ensemble of knowledge of brand building programs that have been successful in various
markets. The company should facilitate and reward sharing of experiences and best practices
among executives of different markets. The company should appropriately reward executives
'i" who''Actively help in designing arid executing brand building programmes in other markets
based on the experiences in their own markets. The company should also ensure that its

- executives from different markets are able to-spend time-with each other and get a real
perspective of the brand building ^programmes that are-working in different markets, and
- \ " whether they can work in their own mat sets -
-

 The corporate should institute common processes of brand building for ail its markets. For
r >
- -' . 'instance.-1 the brand image may be different in differerit markets but the method that a
local
executive uses to decide a particular image of the brand for bis market should be standard.
Therefore the process will include analysis of customers, competitors and the brand itself.
Instituting a common process is not in curtail the independence of executives in deciding
what is best for the brands ,in their, markets but to bring some discipline among executives in
far-flung markets and prevent them from going overboard with they; brand building
programmes, fhe idea is that programmes that euviiuio. initial i > tfo-'r markets should be
justifiable and not merely based on their M> tilled special' v hv
markets. Whenthe same
process will be followed in all the markets, chinks in the process can be identified
more easily and better processes can be designed and then instituted in all markets.
While local managers will be managing the brands m their regional markets, there is need
for a central authority who will be responsible for the brand across all its markets. This
authority may be vested in an individual or a group. This authority keeps a close watch
on the development and performance of the brand in each of its markets. The company
may decide that some particular aspects of the brand, like high quality, should be pursued
in all markets or at least majority of its markets. The central authority ensures that local
managers respect the heritage of the brand and give it a prominence in their brand building
programmes. The idea is that while the brand is free to adapt to the nuances of motivations
of the customers of their markets, it should not lose its essential character. The essential
character of the brand is linked to some special capability of the company, and the
corporate insists on leveraging this capability in all its markets. Japanese auto majors
compete on different attributes of their brands in different markets but they always insist
that their products are of high quality being offered at reasonable prices because this is
linked to their excellence in manufacturing.
The central authority needs to be in constant touch with managers responsible for the brand
in different regions so that brand managers do not lose sight of what the brand essentially
stands for.
The execution of the brand building programmes is very important and the discrete activities
that need to be undertaken have to be chalked out. Tire company may choose any of the pate
of advertising, sponsorship, increasing retail presence, sales promotion, etc. Most companies
start with advertising and miss out on other innovative methods to build their brands. A
company should explore other means of building brands and should settle on advertising only
when other viable means are not available. And once settled on advertising, the company
should insist that the best people of the agency are working for it. The company should be on
the lookout for messages and marketing programmes which have worked in particular markets
and see if they can work in other markets too,
And, Anally, the company should put in place a system for measurement of the performance
of the brand. The system should be able to measure brand equity different markets in financial
terms as well as in terms of customer awareness, customer loyalty, brand personality and
favorable brand associations. The company can know the effectiveness of different brand
building programmes undertaken in different markets. It can identity the most effective ones
and explore if they can work in other markets too.
In their binary view of a brand being either global or local, marketers are missing a huge
opportunity.
The fact is that there is no chance of an omnipotent global brand pervading the minds of all customers
of all markets, but the fact also is that there is no need to develop as many local brands as there are
markets. A global brand has to be localized in certain aspects, and a brand running in a particular market
will have some elements common with brands in all other markets. The corporate has to manage this
dynamics of simultaneous localization and globalization of a brand and strengthen it.

8.6 SUMMARY

A brand name should be chosen carefully as it evokes positive associations. The brand name should be
easy to pronounce and remember, and must suggest product benefits. The company uses different
names for its offerings in different product categories. An individual brand name is necessary wheneach
product of the brand requires an individual identity. Manufacturer brands are created by producers
and bear their chosen brand name.
A manufacturer brand is likely to be more advanced and may have more innovative features than
any other brands in the category.
Global branding is an achievement of worldwide brand penetration. The reason for this is consumer
convergence of tastes and the need for and prospects of global efficiencies in production, procurement,
marketing, R&D, etc.

8.7 KEY TERMS

Need states: The intersection between what customers want and how they want it.

Global branding: Penetration of a brand in the worldwide market.

Brand alliance: When a company enters into joint ventures or partnerships to market brands.

8.8 CHECK YOUR PROGRESS QUESTIONS

1. In cases where the individual brand name is associated with the corporate brand name, it is
known as:
(a) Corporate brands

(b) Corporate parent brands

(c) Distinct product brands

(d) Brand extensions

2. Often, individual brand names are separate and distinct from the corporate brand For example.
Crest is not marketed with the Proctor and Gamble name. These brands are known as:
(a) Corporate brands

(b) Corporate parent brands

(c) Distinct product brands

(d) Brand extensions

3. Private labels are cheaper as retailers have to spend less than national brands on:
(a) Promotion

(b) Packaging

(c) Distribution

(d) Ail of the above

4. Customers are now changing their perceptions regarding the quality of private labels because:
(a)

Retailers convey quality of products actively through communication.

(b)

Customers understand why prices of private labels are less.

(c)

Manufacturer brand quality' has reduced over time.

(d)

None of the above.

5. The prestige and power of a brand is depends on the brand equity of the retail store. (True or
False?)
6. A combination of family and individual brand names capitalize on the reputation of the company

while allowing individual brands to be distinguished and identified. (True or False?)

7. Managing brands as a portfolio makes it easier for the company to organize its resources effectively.
(True or False?)
8. The primary barrier to managing a brand portfolio is the mental block of brand managers in a
company. (True or False?)

8.9 Manufacturers always find it profitable to use their excess capacity to manufacture products for
retailers. (True or False?)QUESTIONS AND EXERCISES
1. Explain in detail the relationship between a brand and a product.
2. Discuss the advantages and disadvantages of individual branding versus combination brand names.
3. What is a brand portfolio? Why should companies maintain a portfolio of brands?
-

4. Differentiate between retailer and manufacturer brands.

'

5. Discuss the advantages and disadvantages of manufacturers selling to retailers.

6. Discuss the threats posed by private labels to manufacturer brands.
7. What are the various methods of international expansion?

8.10

FURTHER READING

Keller, Kevin Lane, Strategic Brand Management, 2/e; Pearson.

Murthy, Brand Management, Vikas Publishing House.

e key insights, which

consumer has to be

INDIAN INSIGHTS

form the basis of

primarily familiarised

positioning
with the

Bose in the Indian market, revealed that the Indian

concept
of quality sound and then make available

products
which
reproduce
lifelike
sound to
them.
Bose
believes
in
quality sound,
whatever
the
applicationprofessional
or
home,
and
the
companys
exceptionally
strong
commitment
to
research
is
their
key
differentiator. The company reinvests 100 per cent of its profits into furthering research, Bose has taken
its commitment and its passion for innovation and applied it to develop unique sound solutions to meet
virtually
any
audio
challenge
in
any
application.
Boses
commitment
to
provide
better
sound
through
research
makes
it
the
path
breaker
in
audio
systems.
Bose
has
launched
Bose
AcoustimassTM
speaker
systems.
Its
patented
technology
eliminates
audible
distortion
without
betraying
its
true
location.
All
the
sound appears to come from the tiny cube speakers. This advance allows the Acoustimass module to be
placed almost anywhere.

The people who have already experienced the lifelike sound of Bose are the biggest advertisers for the
brand through the word of mouth that is generated by them. Besides some routine advertising, the
company believes in letting people experience the products. It has a fair amount of advertising budget, but
its major focus is on below-the-line activities to promote its Direct Marketing Division. Bose has initiated
a multi-city Bose Connect Programme aimed to address the Indian consumers desire to experience, touch
and feel the product before making an actual purchase. The programme is conducted in those cities where
the company does not have a retail presence. It expects such programmes to establish a direct contact with
its customers in cities where it does not currently enjoy a presence, which will further boost its sales,
thereby enabling it to replicate the success enjoyed by the Bose Direct Marketing Group in North America,
UK. Germany and Japan. The company also plans to create multiple programmes to establish a direct
connect with its customers. Some of the plans include demo points at places like Music World and
Landmark, multi-city road shows under Bose Connect Programme and increased pace in the growth of the
retail presence.Saffola has leveraged the current leaning towards the health trend and the wellness concept in
an
innovative manner. The busy executives and professionals are looking for lifestyle interventions necessary
to counter the stresses of personal and professional life; and all of them are in a search mode for solutions.
Saffola has taken initiatives to bring solutions to their doorsteps. Saffola has started its Direct to Office*
initiative. In this programme, interesting information is shared by an eminent cardiologist on lifestyle
interventions. Diet forms an important part of this lifestyle intervention and this is where the brand Saffola
fits in. For the same insight, the company has a Direct to Consumer Programme where the wives of
executives and professionals are addressed. So Saffola this times goes to their homes. This programme
involves sharing interesting information by a dietician. This is done because housewives interest lie in
practical interventions like recipes, cooking tips, etc., w'hich are necessary to counter a stressful life. Here
the housewives are addressed through talks and recipe shows. Saffola recognized the potential of World
Heart Day as a concept, and used it as an opportunity to involve audiences with the message of Heart
Care. Free heart check up was offered by Saffola at key locations on the World Heart Day in various metros.
While through such check ups, only a few people were reached, the messages in media touched millions,
inextricably linking Saffola to a Healthy heart, which is the brand message the company wants to spread.
Qualitative insights are critical to derive a deep understanding of the consumers needs today and
aspirations tomorrow. Saffola has very successfully used insights gathered through the qualitative route
in their marketing programmes. Saffola wanted to engage young adults in preventive heart care solutions,
majority of who are yet indifferent towards heart care, for themselves. Therefore on World Heart Day, the
company tapped on the insight that young adults want to do something productive for their parents but
do not have the time. Their parents health is a key concern for them. The appeal made to them was to
register for a heart check for their parents and this generated 10,000+ registrations in Mumbai and Delhi
alone. This programme also gave the company an opportunity to talk to these young adults about
preventive heart care for themselves.

Health and wellness in the context of the FMCG category is becoming an increasingly
important
need
area for todays consumers. Increasing health consciousness, pollution, stress, and a host of other
lifestylerelated factors have led to this trend gaining prominenceand this is a trend that is not restricted
to
only
large metros. A number of products (some of them even non-FMCG) are now talking about
health
in
different
waysdurable companies, Malted Food Drinks, Beverages, Tea, Water Purifiers, are some of
them.
In
the
context of Indian food products, the need for healthy foods is becoming mere important.
Saffola
has
a
very strong healthy heart equity, and is a trusted brand that has gone from strength to strength
over
the
years. It thus provides the company with an ideal platform to capitalize on this trend of
increasing
health
consciousness by offering a number of new food products that are able to cater to this need area.
The
food products have to be in sync with Saffolas imagery and values.
" '
.........

3. Kurkure

From its launch in 1999 to its current status, Kurkure has come a long way. The introduction of each new
variant is a milestone for the company which takes it closer to its goal of being the first choice in
Namkeens.
Kurkure is the modem namkeen snack, enjoyed at tea-time or any time of the day, whether with Family,
friends or just by oneself.
A wide range of offerings is imperative for success in the namkeens market. Kurkure, like any other impulse
snack product, needs to provide variety to retain consumer interest and loyalty to the brand. It is a constant
endeavor at Frito-Lay (whose brand is Kurkure) to innovate and introduce new flavours to match the Indian
taste buds, at affordable prices.

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