2

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ChapterTwo

Corporate Imageand

Brand Management

Prof. (Dr.) Kao Kveng Hong, PhD, D.Litt.

• How important are brand names?• How important are brand names

for clothes?• In what product categories are

brand names important?• What product categories are

brandnames not important?

• What is your image of Gucci?• What determines your image

ofGucci?

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Chapter Overview• Managing a corporation’s image• Managing brands• Issues associated with developing

and promoting brand names and logos

• Importance of packaging and labels

• Developing brand and corporatepositioning strategies

Brand and CorporateImage Management2

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A corporate image advertisement by State Farm

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Components of a Corporate ImageStudy by Edelman Asia Pacific

• Quality of goods and services.• Willingness of firm to stand behind its products.• Perception of how the firm deals with

customers.

Source: Arun Sudhaman, “Brand Quality Still Key to Corporate Reputation: Edelman,”Media Asia, November 19, 2004, p. 8.

Intangible Elements

1. Goods and services sold.2. Retail outlets where

product is sold.3. Factories where product

is produced.4. Advertising, promotions, and

other forms of communications.5. Corporate name and logo6. Packages and labels7. Employees

1. Corporate, personnel, and environmental policies.

2. Ideals and beliefs of corporatepersonnel.

3. Culture of country and location of the company.

4. Media reports.

Components of a Corporate Image

Tangible Elements

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F I G U R E 2 . 1

Interview with Bob Baxter, Manager of Marketing Research Mercedes Benz of North AmericaBefore watching this interview:What word(s) would you use to describe the Mercedes Benz car? What is your image of the Mercedes?

After watching this interview: What would you do if you were Bob Baxter?

Discussion Slide

Click picture to play video.

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Role of Corporate Image• Consumer perspective.• Business-to-business perspective.• Company perspective.

Sony’s Web site is continually updated, but still retains a consistent corporate image.

Role of Corporate ImageConsumer Perspective

• Positive assurance• Unfamiliar settings• Little or no previous experience

• Reduces search time• Provides psychological reinforcement• Social acceptance

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Role of Corporate ImageCompany Perspective

• Extension of feelings to new products• Ability to charge more• Consumer loyalty• More frequent purchases by customers• Positive word-of-mouth• Attracts higher quality employees• More favorable ratings

Top 10 Global Corporate BrandsBrand Value ($billion)

Source: Based on “The 100 Top Brands,” Business Week (August 6, 2007), pp. 59-64.

Coca-Cola $ 65.3 Microsoft $ 58.7 IBM $ 57.1 General Electric $ 51.5 Nokia $ 33.7 Toyota $ 32.1 Intel $ 30.9 McDonald’s $ 29.4 Disney $ 29.2 Mercedes Benz $ 23.6

Corporate Image1. Accurate reflection of

firm2. Reinforcing3. Rejuvenating an

image4. Changing an image5. Negative or bad press

Promoting the Right Image• Creating the right image.

• Conveys a clear message about the organization.

• Should portray the nature of the firm.• Fit with products being sold.

• Rejuvenating an image.• Easier than changing a well-established image.• Add new elements but continue current image.

• Changing an image.– Extremely difficult.– Necessary when

• Target market has shrunk or disappeared.• Current image not consistent with industry trends.

This Family Circle ad aims to change the magazine’s image, reflectingchanges in culture,

What does this ad say about the contemporary “family woman” versus theone of 30 years ago?

What image is being conveyed bythis BMW advertisement?

What image is being conveyed bythe BMW Motorcycles Web site?

http://www.bmwmotorcycles.com

Are the images consistent?

Click image to enlarge.

Corporate Names• Overt names• Implied names• Conceptual names• Iconoclastic names

Iconoclastic Names

Skeeter Boats

Yamaha

F I G U R E 2 .4Tests of Quality Logos and Corporate Names

• Should be easily recognizable.• Should be familiar.• Should elicit a consensual meaning

among firm’s target market.• Stimulus codeability

• Should evoke positive feelings.

Benefits of Logo Recognizability

Aids in recall of specific brands. Aids in recall of advertisements. Reduces shopping effort. Reduces search time and evaluation

of alternatives.

Black – seriousness, distinctiveness, boldness, power, sophistication, and tradition.

Blue – authority, dignity, security, faithfulness,heritage, corporate stability, and trust.

Brown/gold – history, utility, earthiness,richness, tradition, and conservative.

Gray/silver – somberness, authority, practicality, corporate mentality, and trust.

Green – tranquility, health, freshness, stability, and appetite.

Orange – fun, cheerfulness, warm exuberance, health, and youth.

What colors should you use in your logo?

Source: “Jared McCarthy, “Logos: What Makes Them Work (Part 1of 2),”(www.marketingprofs.com/5/mccarthy4.asp), February 22, 2005.

Pink – femininity, innocence, softness, health, and youth.

Purple – sophistication, spirituality, wealth, royalty, youth, and mystery.

Red – aggressiveness, passion, strength, vitality, fear, speed, and appetite.

White/silver – purity, truthfulness, faith,contemporary, refined, and wealth.

Yellow – youth, positive feelings, sunshine, cowardice, refinement, caution, and appetite.

What colors should you use in your logo?

Source: “Jared McCarthy, “Logos: What Makes Them Work (Part 1of 2),”(www.marketingprofs.com/5/mccarthy4.asp), February 22, 2005.

Logo Recognizability

McDonald’s Golden Arches logo is recognizableenough to stand on its own.

Companies often create product icons to develop an identity for their products.

Why is theMr. Clean icon an effective representative for its product?

Branding• Provides quality assurance.• Reduces search time.• Allows a company to charge more.• Reduces brand parity.• Consumers choose a brand because it is:

– Salient– Memorable– Noteworthy

BrandingIf you didn’t find the brand you wanted, would yoube likely to buy another brand?

Source: Debbie Howell, “Today’s Consumers More Open To Try New Brands,” DSN Retailing Today, vol. 43, No. 20 (October 25, 2004), pp. 29-31.

Greeting cards 68%Groceries and canned food 67%Women’s apparel 50%Men’s apparel 55%Toys 47%Candy 47%Beverages 49%Consumer electronics 40%Computer software 35%

Developing a Strong BrandName

Begins with understanding why consumers buy a brand.

• What are the most compelling benefits?• What emotions are elicited by the brand

either during or after the purchase?• What one word best describes the

brand?• What is important to consumers in the

purchase of the product?

F I G U R E 2 .6Benefits of Brand Equity

• Higher prices• Higher gross margins• Channel power• Additional retail shelf space• Reduces customer switching

behavior• Prevents erosion of market share

Brand Equity

Mercedes Benz has developed a high level of brand equity.

F I G U R E 2 .7Steps in Building Brand Equity

1. Research and analyze what it would take to make the brand distinctive.

2. Engage in continuous innovation.3. Move fast.4. Integrate new and old media.5. Focus on domination.

Measuring Brand EquityBrand Metrics

Brand metrics measure return on branding investments.

• Attitudinal measures• Awareness• Recall• Recognition

• Brand power index (BPI)• Most preferred brand (DSN Retailing)• Revenue premium approach

Source: Adapted from Fred Crawford, “Branding Isn’t Like High School,” Retail Merchandiser, Vol. 47, No. 6 (July/August 2007), pp. S4-S9.

Top 10 Most Powerful Brands (AlixPartners) Brand Trust Rate Distrust Rate BPI

BPI = awareness, trust, and distrust.

F I G U R E 2 .8

Sony 9.2% 1.8% 75.1

Johnson & Johnson 5.7% 0.5% 55.3Kraft 5.2$ 0.6% 48.7Procter& Gamble 5.8% 1.1% 48.2Campbell’s 3.5% 0.4% 32.9Toyota 4.1% 1.2% 28.0Tylenol 3.2% 0.6% 27.2Dell 5.1% 2.1% 27.0General Mills 2.7% 0.2% 25.9Hewlett-Packard 4.0% 1.5% 23.5

Source: Adapted from Debbie Howell, “Top Brands,” DSN Retailing Today, Vol. 44, No. 20 (October 24, 2005), pp. 38-42.

1. Hanes (39%) 2. Levi’s (10%)3. Victoria’s

Secret (6%)4. Liz Claiborne

(4%)5. Nike (4%)6. Fruit-of-the-

Loom (4%)

1. Coke (26%)2. Pepsi (22%)3. Dr. Pepper (6%)4. Mountain Dew (5%)

1. Frito Lay/Lays (19%)2. Doritos (10%)3. Hershey’s (6%)4. Pringles (6%)5. Oreos (5%)

1. Sony (27%)2. RCA (6%)3. Panasonic (6%)4. Dell (5%)5. Duracell (4%)

Consumer ElectronicsSnacks

BeveragesWomen’s Apparel

F I G U R E 2 .9Most Preferred Brands (DSN Retailing)

Types of BrandsFamily brands

Brand extension Flanker brand Co-branding

Ingredient branding Cooperative branding

Complementary branding Private brands

Head & Shoulders is one of the brands sold by Procter & Gamble.

Access their Web site to see what other brands they sell in the United States as well as other countries.

http://www.pg.com

Ingredient Branding

Cooperative Branding

Complementary Branding

Co- Branding

F I G U R E 2 .11Forms of Co-Branding

Growth of Private Brands

•15% of all retail sales.•19% of food sales

Last 10 years:•64% increase in store brand sales.•30% increase in manufacturers’ brand sales

Improved quality. Perceived as a value purchase. Higher loyalty towards retail outlets and lower

loyalty towards specific brands. Used to differentiate retail outlets. Increased advertising of private brands. Increased quality of in-store displays and

packaging of private brands.

F I G U R E 2 .12Changes in Private Labels

15%18%

21% 21%18%

45%

16%

45%

40%

35%

30%

25%

20%

15%

10%

5%

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JP Penney (apparel

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otal

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Source: Thomas J. Ryan, “Private Labels: Strong, Strategic & Growing, Apparel Magazine, Vol. 44, No. 10 (June 2003), pp. 32-39.

Private Label Sales as a Percentage of Total Sales

Source: Adapted from Vanessa L. Facenda, “A Swift Kick to the Privates,” Brandweek, Vol. 48, No. 31 (September 3, 2007), pp. 24-28.

Strategies Used to Combat Private Labels

Focus on core brands Increase advertising Introduce new products Focus on in-store selling, packaging Use alternative methods of marketing

F I G U R E 2 .13

Packaging• Traditional elements

• Protect the product inside• Provide for ease of shipping, moving, and handling• Provide for easy placement on store shelves• Prevent or reduce the possibility of theft• Prevent tampering

• New trends• Meet consumer needs for speed, convenience, and

portability• Must be contemporary and striking• Must be designed for ease of use

Labels• Must meet legal requirements.

• Provide another marketing opportunity.

Positioning Approaches

AttributesCompetitorsUse or applicationPrice/qualityProduct userProduct classCultural symbol

•Consumer markets•B-to-B markets•International markets

1. Is relative to competition.2. Exists in the mind of the consumer.

A business-to-business advertisement positioned by the product’s attributes: the brightness of the Sony

An advertisement by Stetson positioned by cultural symbols.

projector.

Ethical Issues• Brand infringement• Brand name becomes a generic term• Domain or cyber squatting

International Implications• Adaptation vs. standardization• Standardization reduces costs• Shrinking world standardization• High-profile, high-involvement – global brand• Low-involvement products – local brand• Packaging and labeling• Image and positioning issues