MODULE 1

BRAND

A. Reading

Brands were originally developed as labels of ownership: name, term, design, and
symbol. However, today it is what they do for people that matters much more, how they
reflect and engage them, how they define their aspiration and enable them to do more.
Powerful brands can drive success in competitive and financial markets, and indeed become
the organization's most valuable assets.
A number of different types of brands are recognized. A "premium brand" typically costs
more than other products in the category. An "economy brand" is a brand targeted to a high
price elasticity market segment. A "fighting brand" is a brand created specifically to counter a
competitive threat. When a company's name is used as a product brand name, this is
referred to as corporate branding. When one brand name is used for several related
products, this is referred to as family branding. When all a company's products are given
different brand names, this is referred to as individual branding. When a company uses the
brand equity associated with an existing brand name to introduce a new product or product
line, this is referred to as "brand leveraging." When large retailers buy products in bulk from
manufacturers and put their own brand name on them, this is called private branding, store
brand, white labeling, private label or own brand (UK). Private brands can be differentiated
from "manufacturers' brands" (also referred to as "national brands"). When two or more
brands work together to market their products, this is referred to as "co-branding". When a
company sells the rights to use a brand name to another company for use on a non-
competing product or in another geographical area, this is referred to as "brand licensing."
An "employment brand" is created when a company wants to build awareness with potential
candidates. In many cases, such as Google, this brand is an integrated extension of their
consumer.
 In the field of marketing, brands originated in the nineteenth century with the advent of
packaged goods. According to Unilever records, Pears Soap was the world's first registered
commercial brand. Industrialization moved the production of household items, such as soap,
from local communities to centralized factories. When shipping their items, the factories
would brand their logotype insignia on the shipping barrels. These factories, generating
mass-produced goods, needed to sell their products to a wider range of customers, to a
customer base familiar only with local goods, and it turned out that a generic package of
soap had difficulty competing with familiar, local products.
Around 1900, James Walter Thompson published a house advert explaining trademark
advertising, in an early commercial description of what now is known as 'branding'. Soon,
companies adopted slogans, mascots, and jingles that were heard on radio and seen in early
television. By the 1940s, Mildred Pierce manufacturers recognized how customers were
developing relationships with their brands in the social, psychological, and anthropological
senses. From that, manufacturers quickly learned to associate other kinds of brand values,
such as youthfulness, fun, and luxury, with their products. Thus began the practice of
'branding', wherein the customer buys the brand rather than the product. This trend arose in
the 1980s 'brand equity mania'. In 1988, Phillip Morris bought Kraft for six times its paper
worth. It is believed the purchase was made because the Phillip Morris Company actually
wanted the Kraft brand rather than the company and its products.
Brand management is the application of marketing techniques to a specific product,
product line, or brand. It seeks to increase the product's perceived value to the customer and
thereby increase brand franchise and brand equity. Marketers see a brand as an implied
promise that the level of quality people have come to expect from a brand will continue with
future purchases of the same product. This may increase sales by making a comparison with
competing products more favorable. It may also enable the manufacturer to charge more for
the product. The value of the brand is determined by the amount of profit it generates for the
manufacturer. This results from a combination of increased sales and increased price.

1. Answer the questions briefly.

a. What did originally brands refer to?
b. Nowadays, what do brands relate to?
c. Mention types of brands that appear in the text?
d. In the nineteenth century, what was brand indicated?
e. What does brand management mean?
f. What does the word “this” in the last line refer to?
g. What does the word “it” in However, today it is what they do for people that
matters much more refer to?
h. Elaborate the advantages of brand in a business.
i. What was known as branding in the early beginning of twentieth century?
j. When did the practice of branding begin?

2. State whether the statements below true (T) or false (F). If false, correct them.
a. The value of the brand is determined by the amount of workers who work for the
manufacturer.
b. Industrialization moved the production of household items, such as soap, from local
communities to centralized factories.
c. Brands can drive success in competitive and financial markets, and but they are not
the organization's most valuable assets.
d. Marketers see a brand as an implied promise that generate the people to continue
with future purchases of the same product.
e. Brand management aims to increase the product's perceived value to the customer
and thereby increase brand franchise and brand equity.
f. A brand targeted to a high price elasticity market segment and that costs more than
other products in the category is known as an "economy brand".

3. Match the definitions with their terms.

Definitions:
a. One brand name which is used for several related products.
b. A brand which is created specifically to counter a competitive threat.
c. Brand names which are given to all company’s products.
d. The brand equity associated with an existing brand name which is used to introduce a
new product or product line.
e. The company's name which is used as a product brand name.
f. The brand name which is used by another company in another geographical area.
g. The brand name that is put by large retailers on the product from manufactures.
h. Two or more brands that work together to market the product.
i. A brand name which refers to the awareness of a company to build with potential
candidates.

Brand-related Terminologies:
1) Fighting Brand
2) Corporate Branding
3) Family Branding
 4) Individual Branding
5) Brand Leveraging
6) Private Branding
7) Co-branding
8) Brand Licensing
9) Employment Brand

B. Structure
1. Change the verb in the bracket into the right form.
For example:
An existing strong brand name can be used as a vehicle for new or (modify) products.
→ An existing strong brand name can be used as a vehicle for new or modified
products.
a. Brand orientation (be) a deliberate approach to working with brands, both internally
and externally.
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b. The most important driving force behind this (increase) interest in strong brands is the
accelerating pace of globalization.
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c. This has (result) in an ever-tougher competitive situation on many markets.
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d. A product’s superiority is in itself no longer sufficient to (guarantee) its success.
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e. The fast pace of technological development and the increased speed with which
imitations turn up on the market have dramatically (shorten) product lifecycles.
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f. The consequence is that product-related competitive advantages soon risk being
(transform) into competitive prerequisites.
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g. For this reason, increasing numbers of companies (be look) for other, more enduring,
competitive tools – such as brands.
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h. Brand Orientation (refer) to "the degree to which the organization values brands and
its practices are oriented towards building brand capabilities”.
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i. A brand which is widely known in the marketplace (acquire) brand recognition.
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j. When brand recognition builds up to a point where a brand enjoys a critical mass of
positive sentiment in the marketplace, it is said to (have) achieved brand franchise.
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k. One goal in brand recognition (be) the identification of a brand without the name of
the company present.
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2. Fill in the blank with the right word form from bracket.
For example:
Individual brand names naturally allow greater ______ (flexible) by permitting a
variety of different products.
→ Individual brand names naturally allow greater flexibility by permitting a variety
of different products

a. Many brand managers limit themselves to setting ______ (finance) objectives.

They ignore strategic objectives because they feel this is the ______(responsible)
of senior management.
b. Most product level or brand managers limit themselves to setting short term
objectives because their ______ (compensate) packages are designed to reward
short term ______ (behave). Short term objectives should be seen as milestones
towards long term objectives.
c. Often product level managers are not given enough ______ (inform) to
construct ______ (strategy) objectives.
d. In a ______ (diversify) company, the objectives of some brands may conflict
with those of other brands. Or worse, corporate objectives may conflict with the
______ (specify) needs of your brand.
e. This is ______ (particular) true in regard to the trade-off between ______
(stable) and riskiness.
f. The brand manager also needs to know senior management's ______
(harves) strategy. If corporate ______ (manage) intends to invest in brand equity
and take a long term position in the market, it would be a mistake for the product
______ (manage) to use short term cash flow objectives.
g. Only when these conflicts and tradeoffs are made explicit, is it possible for all
levels of objectives to fit together in a ______ (cohere) and mutually ______
(support) manner.
h. Many brand managers set objectives that optimize the ______ (perform) of
their unit. This is particularly true where compensation is based ______ (primary)
on unit performance.
C. Vocabulary Building

Fill the blank with the words available in the box.

In a market fragmented with many brands, a supplier can choose to launch new brands
apparently competing with its own, extant strong brand (and often with an identical product),
simply to ______ a greater share of the market that would go to ______ brands. The
rationale is that having 3 out of 12 brands in such a _______ will give garner a greater,
overall share than having 1 out of 10 (even if much of the share of these new brands is taken
from the existing one). In its most extreme ______, a supplier pioneering a new market which
it _______ will be particularly attractive may choose _______ to launch a second brand in
competition with its first, _______ to pre-empt others entering the market.
Individual brand names naturally allow greater ______ by permitting a variety of
different products, of differing quality, to ______ without confusing the consumer's perception
of what business the ______ is in or diluting higher quality products.
Once again, Procter & Gamble is a leading exponent of this______, running as many
as ten detergent brands in the US market. This also _____ the total number of "facings" it
receives on supermarket shelves. Sara Lee, _____, uses it to keep the very different parts of
the business separate—from Sara Lee _____ through Kiwi polishes to L'Eggs pantyhose. In
the hotel business, Marriott uses the name Fairfield Inns for its budget chain and Ramada
uses Rodeway for its own cheaper hotels.
.

Obtain minor market manifestation

believes immediately in order flexibility
be sold company philosophy increases
on the other hand cakes

D. Speaking
There are several problems associated with setting objectives for a brand or product
category. Choose one of the problems as your conversation topic with your friend.
• Many brand managers limit themselves to setting financial objectives. They ignore
strategic objectives because they feel this is the responsibility of senior management.
• Most product level or brand managers limit themselves to setting short term
objectives because their compensation packages are designed to reward short term
behavior. Short term objectives should be seen as milestones towards long term
objectives.
• Often product level managers are not given enough information to construct strategic
objectives.
 • It is sometimes difficult to translate corporate level objectives into brand or product
level objectives. Changes in shareholders' equity are easy for a company to calculate.
It is not so easy to calculate the change in shareholders' equity that can be attributed
to a product or category. More complex metrics like changes in the net present value
of shareholders' equity are even more difficult for the product manager to assess.
• In a diversified company, the objectives of some brands may conflict with those of
other brands. Or worse, corporate objectives may conflict with the specific needs of
your brand. This is particularly true in regard to the trade-off between stability and
riskiness. Corporate objectives must be broad enough that brands with high risk
products are not constrained by objectives set with cash cows in mind (see B.C.G.
Analysis). The brand manager also needs to know senior management's harvesting
strategy. If corporate management intends to invest in brand equity and take a long
term position in the market (i.e. penetration and growth strategy), it would be a
mistake for the product manager to use short term cash flow objectives (ie. price
skimming strategy). Only when these conflicts and tradeoffs are made explicit, is it
possible for all levels of objectives to fit together in a coherent and mutually
supportive manner.
• Many brand managers set objectives that optimize the performance of their unit
rather than optimize overall corporate performance. This is particularly true where
compensation is based primarily on unit performance. Managers tend to ignore
potential synergies and inter-unit joint processes.

E. Writing
After reading the text below, write a summary of it in 200-300 word using your own language.

BRANDING AND THE INTERNET

With the internet as the primary source of new business for many companies, a new
curve has been thrown at marketers and executives in charge of development and protection
of corporate branding.
Many computer savvy students have registered all names they assumed would hold
future value. This includes virtually all dictionary terms and before the courts had rules, many
corporate names were registered. Some companies have purchased a domain name that
matched their brand in the domain aftermarket at a premium price in excess of the cost of
registration.
Fortunately domain squatting has not hurt companies that have clearly distinguishable
brands that have been victims of this. Courts will rule in favor of clear cases. However many
cases are not as clear and in cases of a generic term or terms, the person that originally
registered the name, although it may be someone’s brand, may keep it. For instance had
Amazon not owned the domain name, a person would have the right to own it and post a
picture of a rain forest if they so wished. This is because a company cannot restrict use of
common words when trade-marking. It must be within a limited scope. For a reverse of the
domain ownership, it would have to be proven the user was infringing on a trademark, and
that is not always the case.
The internet has honored the right to register a domain name of a generic term to an
individual or company and to use it for what it is best suited. While a person cannot hope to
keep the name "BurgerKing.com" from being given to a national brand if it were to be a court
case, Burger King cannot expect to be entitled to Burgers.com
Similarly while Dominos Pizza can expect to obtain rights to a nationally know Dominos
Pizza domain name, it cannot prevent a man name Domino who owns a Pizza place from
registering it and using it. If the purpose is to dilute a brand and confuse a customer on a
trademark, the chance is the domain name will go to the holder of the trademark. However if
a Mr. Domino of Kansas wants to register DominosPizza.com, before Dominos the national
chain does or did, then it would fairly belong to Dominos Pizza of Kansas. A national
company is no more entitled to the domain name than is a small business. Their are also
other extensions such as .net, .org, .us, .info, .biz and more. No one is entitled to a
commonly used phrase with a dot com extension. Therefore a brand is now subject to
making a deal with a domain owner if they wish to have the domain name that they are not
entitled to.
For new companies, creating a brand now must include first checking to see if the
domain name will be available or can be purchased before investing heavily and building
upon the name. A company would not spend millions of dollars in advertising on "Fast
Computers" if it could not register the domain name. It would be better to pick a brand that
could be matched with an available domain name. By synchronizing a brand with a domain
name, it is easy to market, gain and keep customers. Therefore the use of a domain name
should be carefully considered prior to development of any new brand.

F. Case Study
The Re-branding of Skoda
Introduction
The re-branding of Skoda provides a useful case study of the challenges faced by
brands wishing to reposition themselves
Remember the Skoda jokes?
- What do you call a Skoda with a sun-roof?
 - Answer: A skip
- Why does a Skoda have a heated rear windscreen?
- Answer: To keep your hands warm when you push it
- What do you call a Skoda with twin exhaust pipes?
- Answer: A wheelbarrow
Critics of the Skoda would be surprised to hear the Skoda is now one of the fastest-growing
car brands in the UK motor industry. The Czech car company boosted its sales in the UK in
2001 by 24% as opposed to the average market growth of 10.7%. This built on growth of
34% in 2000. How has this been achieved?

Background
Skoda had a monopoly in car manufacturing in Czechoslovakia until the 1989 'Velvet
Revolution'. After this the Czech government started looking for a commercial partner to
revitalize its Skoda factories. In 1991, Volkswagen took a 30% stake in Skoda and started
work in training and educating the workforce to Western quality standards. It invested over
£2 billion in the plant, research, development and new models. Ten years later, in 2001, VW
took total control of the business.
The first two launches from the new Skoda camp were well-received by the automotive
press. The Felicia - launched in 1994 - was built as an old-style Skoda, but enjoyed the
benefit of VW features. The 1998 Octavia was built on the VW group platform. The costs of
the improved VW car structure pushed up Skoda prices. The cars carried a higher price tag
and Skoda needed to convince consumers that this price was worth paying.
A VW marketing manager working for Skoda explained: "We needed to move away
from being a cheap brand to being a value-for-money brand. At the same time, we badly
needed to find our own positioning within the group, rather than just trading on being part of
the VW Group. Otherwise, we might just as well have re-branded ourselves as VW, with very
little reason for existence."

Launch of the Octavia

Skoda’s first VW-backed model was the Octavia. It was launched in the UK with a
£10m promotional campaign- Skoda's highest-ever spend on a marketing campaign.
However, the Octavia launch was a failure. Just 6,154 Octavia cars were sold over the year
following the car's launch, despite the fact that the car achieved almost unanimously good
reviews. Market research at the time suggested that sixty per cent of people said they “would
never buy a Skoda”. Only a fifth of early Octavia buyers were under the age of 45 and a third
had previously owned Skoda cars. Skoda's image was old, unfashionable and out of sync
with its products.
VW's Strategy
VW resisted the temptation to scrap the Skoda brand altogether. Despite its poor image
in the UK, Skoda still commanded respect in Eastern Europe and held its own in other
Western European countries. The Skoda brand also had high “brand awareness” in the UK
–even if it was for the wrong reasons – and a reliable distribution channel through a
network of independent car retailers. The next product launch was the Skoda Fabia. It was
launched with a much smaller marketing campaign and an advertising message that poked
gentle fun at Skoda’s customer perception: "The Fabia is a car so good that you won't
believe it's a Skoda"
Key elements of the promotional mix were as follows:
• The Fabia was launched with a number of television, print and poster ads
• The initial TV campaign ran for four-and-a-half weeks and the print and poster
campaign ran for two weeks.
• Expensive TV and print campaigns were supported by both PR and direct mail
campaigns
• The PR push targeted the consumer press and attempted to get journalists to
discuss Skoda in a positive light
• The direct mailings tried to build on loyalty levels among Skoda drivers and get
across the brand's new image.
• AutoExpress magazine carried a competition to win a Skoda car that generated
27,000 responses. The respondents who didn't win the car were profiled to check
their similarity to the average Skoda driver and followed up. Hot prospects received
a scale model as a consolation prize and an invitation to test drive a full-size model.

Impressive results
The results of the marketing campaign were impressive. By the end of 2000, more than
11,000 Fabias had been sold and even Octavia sales were seeing a 29% increase on the
previous year. In July 2000, the near impossible finally happened - Skoda had a waiting-list
for its cars. There was also a less obvious, but equally important shift in the public's
perception of Skoda. Only 42% of those polled after the campaign said they would not
consider buying a Skoda. Many UK customers now don’t see a Skoda in front of them – they
see a cut-price VW.
.