7.4 Branding Strategy: Building Strong Brands

Question 1

What are Brands?

Answer 1

Brands are more than just names and symbols. They are a key element in the company’s relationships with consumers.

Brands represent consumers’ perceptions and feelings about a product and its performance—everything that the product or the service means to consumers.

In the final analysis, brands exist in the heads of consumers. As one well-respected marketer once said, “Products are created in the factory, but brands are created in the mind.

Question 2

Definition of Brand equity

Answer 2

Brand equity:

The differential effect that knowing the brand name has on customer response to the product or its marketing.

Question 3

When does a brand have positive/negative brand equity?

Answer 3

A brand has positive brand equity when consumers react more favourably to it than to a generic or unbranded version of the same product.

It has negative brand equity if consumers react less favourably than to an unbranded version.

Question 4

Ad agency Young & Rubicam’s BrandAsset Valuator measures brand strength along four consumer perception dimensions.

Answer 4

Differentiation (what makes the brand stand out)

Relevance (how consumers feel it meets their needs)

Knowledge (how much consumers know about the brand)

Esteem (how highly consumers regard and respect the brand).

Question 5

What is positive brand equity derived from?

Answer 5

Positive brand equity derives from consumer feelings about and connections with a brand.

Question 6

Definition of Brand value.

Answer 6

Brand value:
The total financial value of a brand.

Question 7

High brand equity provides a company with many competitive advantages. What are they?

Answer 7

A powerful brand enjoys a high level of consumer brand awareness and loyalty.

Because consumers expect stores to carry the particular brand, the company has more leverage in bargaining with resellers.

Because a brand name carries high credibility, the company can more easily launch line and brand extensions.

A powerful brand also offers the company some defence against fierce price competition and other competitor marketing actions.

• Above all, however, a powerful brand forms the basis for building strong and profitable customer engagement and relationships. *

Question 8

What is the fundamental asset underlying brand equity?

Answer 8

The fundamental asset underlying brand equity is customer equity—the value of customer relationships that the brand creates.

A powerful brand is important, but what it really represents is a profitable set of loyal customers.

The proper focus of marketing is building customer equity, with brand management serving as a major marketing tool.

Companies need to think of themselves not as portfolios of brands but as portfolios of customers.

Question 9

The major brand strategy decisions involve

Answer 9

Brand positioning
Brand name selection
Brand sponsorship
Brand development

Question 10

Figure 7.5 Major Brand Strategy Decisions

Answer 10

Question 11

What are the three levels of Brand positioning?

Answer 11

Attribues
Benifits
Beliefs and values

Question 12

What is the product attribute of Brand positioning?

Answer 12

At the lowest level, they can position the brand on product attributes.

For example, Whirlpool can position its major home appliance products on attributes such as quality, selection, style, and innovative features. In general, however, attributes are the least desirable level for brand positioning.

Competitors can easily copy attributes. More important, customers are not interested in attributes as such—they are interested in what the attributes will do for them.

Question 13

What is the benifit aspect of Brand positioning?

Answer 13

A brand can be better positioned by associating its name with a desirable benefit.

Thus, Whirlpool can go beyond technical product attributes and talk about benefits such as taking the hassle out of cooking and cleaning, better energy savings, or more stylish kitchens.

For example, for years, Whirlpool positioned its washing machines as having “the power to get more done.”

Some successful brands positioned on benefits are FedEx (guaranteed on-time delivery), Walmart (save money), and Instagram (capturing and sharing moments).

Question 14

What is the Beliefs and values aspect of Brand positioning?

Answer 14

he strongest brands go beyond attribute or benefit positioning. They are positioned on strong beliefs and values, engaging customers on a deep, emotional level.

For example, Whirlpool’s research showed that home appliances are more than just “cold metal” to customers.

They have a deeper meaning connected with the value that they play in customers’ lives and relationships.

So Whirlpool launched a major positioning campaign—called “Every Day, Care”—based on the warm emotions of taking care of the people you love with Whirlpool appliances.

Question 15

What must a marketer keep in mind when positioning a brand?

Answer 15

When positioning a brand, the marketer should establish a mission for the brand and a vision of what the brand must be and do.

A brand is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to buyers.

The brand promise must be clear, simple, and honest.

Question 16

What does deciding on a brand name begin with?

Answer 16

It begins with a careful review of the product and its benefits, the target market, and proposed marketing strategies. After that, naming a brand becomes part science, part art, and a measure of instinct.

Question 17

Desirable qualities for a brand name include the following:

Answer 17

(1) It should suggest something about the product’s benefits and qualities: Beautyrest, Slimfast, Facebook, Airbnb.

(2) It should be easy to pronounce, recognize, and remember: iPad, Tide, Jelly Belly, Twitter, JetBlue.

(3) The brand name should be distinctive: Panera, Swiffer, Zappos, Nest.

(4) It should be extendable—Amazon.com began as an online bookseller but chose a name that would allow expansion into other categories.

(5) The name should translate easily into foreign languages: Coca-Cola translates in Chinese to “Ke Kou Ke Le,” which means “tasty fun.”

(6) It should be capable of registration and legal protection. A brand name cannot be registered if it infringes on existing brand names.

Question 18

Once a name is chosen for a brand, what must happen?

Answer 18

Once chosen, the brand name must be protected. Many firms try to build a brand name that will eventually become identified with the product category.

Question 19

What must a brand do to protect their brands?

Answer 19

To protect their brands, marketers present them carefully using the word brand and the registered trademark symbol

Question 20

What are the four different kinds of Brand sponsorship?

Answer 20

The product may be launched as a national brand (or manufacturer’s brand), as when Samsung and Kellogg sell their output under their own brand names (the Samsung Galaxy tablet or Kellogg’s Frosted Flakes).

Or the manufacturer may sell to resellers who give the product a** private** brand (also called a store brand).

Although most manufacturers create their own brand names, others market licensed brands.

Finally, two companies can join forces and co-brand a product.

Question 21

Definition of a Store brand (private brand)

Answer 21

Store brand (private brand):

A brand created and owned by a reseller of a product or service.

Once known as “generic” or “no-name” brands, today’s store brands have shed their image as cheap knockoffs of national brands. Store brands now offer much greater selection, and they are rapidly achieving name-brand quality. In fact, many retailers are out-innovating many of their national-brand competitors.

Question 22

In the so-called battle of the brands between national and private brands, retailers have many advantages.

What are they?

Answer 22

They control what products they stock, where they go on the shelf, what prices they charge, and which ones they will feature in local promotions.

Retailers often price their store brands lower than comparable national brands and feature the price differences in side-by-side comparisons on store shelves.

Although store brands can be hard to establish and costly to stock and promote, they also yield higher profit margins for the reseller.

And they give resellers exclusive products that cannot be bought from competitors, resulting in greater store traffic and loyalty.

Question 23

How to National brands compete with store brands?

Answer 23

To compete with store brands, national brands must sharpen their value propositions, especially when appealing to today’s more frugal consumers.

Many national brands are fighting back by rolling out more discounts and coupons to defend their market share.

In the long run, however, leading brand marketers must compete by investing in new brands, new features, and quality improvements that set them apart.

They must design strong advertising programs to maintain high awareness and preference. And they must find ways to partner with major distributors to find distribution economies and improve joint performance.

Question 24

A company has four choices when it comes to developing brands. What are they?

Answer 24

It can introduce:

Line extensions,
Brand extensions
Multibrands
New brands

Question 25

Figure 7.6 Brand Development Strategies

Answer 25

Question 26

Definition of Line extension.

Answer 26

Line extension:

Extending an existing brand name to new forms, colours, sizes, ingredients, or flavours of an existing product category.

For example, over the years, KFC has extended its “finger lickin’ good” chicken lineup well beyond original recipe, bone-in Kentucky fried chicken. It now offers grilled chicken, boneless fried chicken, chicken tenders, hot wings, chicken bites, chicken popcorn nuggets, chicken sandwiches, and KFC Go Cups—chicken and potato wedges in a handy car-cup holder that lets customers snack on the go.

Question 27

Risks involved in a line extension.

Answer 27

An overextended brand name might cause consumer confusion or lose some of its specific meaning.

Question 28

Definition of a Brand Extension

Answer 28

Brand extension:

Extending an existing brand name to new product categories.

For example, Google-owned Nest—which began as a maker of stylish, connected, learning thermostats that can be controlled remotely by phone—has extended its line with a host of smart and stylish smart-home products, including a smoke and carbon monoxide alarm, home monitoring cameras, a home security alarm system, and a video doorbell that lets you know who’s calling.

Question 29

Benifits of a Brand Extension.

Answer 29

These days, a large majority of new products are extensions of already-successful brands. Compared with building new brands, extensions can create immediate new-product familiarity and acceptance at lower development costs.

Question 30

Risks of a Brand Extention

Answer 30

The extension may confuse the image of the main brand—for example, how about Zippo perfume or Fruit of the Loom laundry detergent?

Brand extensions such as Cheetos lip balm, Heinz pet food, Colgate ready meals, and Life Savers gum met early deaths.

Furthermore, a brand name may not be appropriate to a particular new product, even if it is well made and satisfying—would you consider flying on Hooters Air or wearing an Evian water-filled padded bra (both failed)?

And if a brand extension fails, it may harm consumer attitudes toward other products carrying the same brand name.

Question 31

What is Multibranding?

Answer 31

Companies often market many different brands in a given product category.

For example, PepsiCo markets at least eight brands of carbonated soft drinks (Pepsi, Sierra Mist, Mountain Dew, Manzanita Sol, Mirinda, IZZE, Tropicana Twister, and Mug root beer), three brands of sports and energy drinks (Gatorade, AMP Energy, Starbucks Refreshers), five brands of bottled teas and coffees (Brisk, Pure Leaf, SoBe, Starbucks, Tazo), five brands of bottled waters (Aquafina, H2OH!, Ocean Spray PACt, Propel, SoBe), and nine brands of fruit drinks (Brisk, Dole, IZZE, Looza, Ocean Spray, Tropicana, and others).

Each brand includes a long list of sub-brands. For instance, Aquafina includes regular Aquafina, Aquafina Flavorsplash, and Aquafina Sparkling.

Question 32

What are the benifits of Multbranding?

Answer 32

Multibranding offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share.

For example, although PepsiCo’s many brands of beverages compete with one another on supermarket shelves, the combined brands reap a much greater overall market share than any single brand ever could.

Similarly, by positioning multiple brands in multiple segments, Pepsi’s eight soft drink brands combine to capture much more market share than any single brand could capture by itself.

Question 33

Risks of multibranding.

Answer 33

A major drawback of multibranding is that each brand might obtain only a small market share, and none may be very profitable.

The company may end up spreading its resources over many brands instead of building a few brands to a highly profitable level.

These companies should reduce the number of brands they sell in a given category and set up tighter screening procedures for new brands.

Question 34

What is the reasoning behind creating a new brand?

Answer 34

A company might believe that the power of its existing brand name is waning so a new brand name is needed. Or it may create a new brand name when it enters a new product category for which none of its current brand names is appropriate.

Question 35

What is the risks of creating a new brand?

Answer 35

As with multibranding, offering too many new brands can result in a company spreading its resources too thin. And in some industries, such as consumer packaged goods, consumers and retailers have become concerned that there are already too many brands with too few differences between them.

Question 36

What are the benifits and considerations behind brand advertising campaigns?

Answer 36

Such advertising campaigns can help create name recognition, brand knowledge, and perhaps even some brand preference.

However, the fact is that brands are not maintained by advertising but by customers’ engagement with brands and customers’ brand experiences.

Question 37

When does a brand’s positioning take hold? How can marketers encourage this?

Answer 37

The brand’s positioning will not take hold fully unless everyone in the company lives the brand.

Therefore, the company needs to train its people to be customer centred.

Even better, the company should carry on internal brand building to help employees understand and be enthusiastic about the brand promise.

Many companies go even further by training and encouraging their distributors and dealers to serve their customers well.

Question 38

What questions should be asked when auditing a brand?

Answer 38

Does our brand excel at delivering benefits that consumers truly value? Is the brand properly positioned?

Do all our consumer touch points support the brand’s positioning?

Do the brand’s managers understand what the brand means to consumers?

Does the brand receive proper, sustained support?

The brand audit may turn up brands that need more support, brands that need to be dropped, or brands that must be rebranded or repositioned because of changing customer preferences or new competitors.