Brand BuildingBrand Building
Session XIIBrand LeveragingLectures 1 - 2 of 2
Scope of the PresentationScope of the Presentation
The leveraging processLeveraging brand associationsThe process of brand
orientation
The Leveraging ProcessThe Leveraging Process
What is Brand Leveraging?What is Brand Leveraging? Brands may be linked to other entities that have
their own knowledge structures in the minds of the consumers
Because of these linkages consumers may assume or infer that some of the associations that charecterise the other entities may also be true for the brand
In effect, the brand borrows some brand knowledge and depending on the associations some brand equity from other entities
This indirect approach of building brand equity is referred to as leveraging secondary brand knowledge for the brand
Significance of Brand Significance of Brand LeveragingLeveraging
Brand leveraging may be important If the existing brand associations are
deficient in any way– To create strong, favourable and unique
associations and positive responses that may otherwise not be present
To reinforce existing associations in a fresh and unique way
Extent of LeverageExtent of Leverage
3 factors affect the extent of leverage Awareness and knowledge of the entity
– Ideally consumers would be aware of the entity– Hold some strong, favourable and perhaps unique
association regarding in the entity– Have positive judgments and feelings about the entity
Meaningfulness of the knowledge of the entity– Relevance and connection of the entity associations
with the brand Transferability of the knowledge of the entity
– The actual extent to which the the meaningful and positive associations of the entity are linked to the brand
Leveraging Brand Leveraging Brand AssociationsAssociations
Means of Brand Means of Brand LeveragingLeveraging
By linking the brand to Companies Countries or geographic areas Channels of distribution Other brands – Co-branding Characters Spokespersons Events Other third party sources
CompanyCompany
Brand leveraging here happens through the branding strategies adopted by the company
A corporate brand may evoke associations of – Common product attributes, benefits or attitudes– People and relationships– Programs and values– Corporate credibility
Brands and companies are often unavoidably linked to the category in which they compete– E.g.: Fuel Industry
Country of OriginCountry of Origin
Choosing brands with strong national ties may reflect a deliberate decision to maximise product utility and communicate self-image based on what consumers believe about the products from those countries
Geographic associations are possible at a state, regional or city level as well
Country of OriginCountry of Origin
Country of origin associations can be done by– The location embedded in the brand name
E.g.: Air India– The location combined with the brand
nameE.g.: Bailey’s Irish Cream
– The locations becoming a dominant theme in the brand advertising
E.g.: Fosters – Australian for beer
Country of OriginCountry of Origin
Brand Country
Coca-Cola USA
BMW Germany
Gucci Italy
Swatch Switzerland
Foster’s Australia
Channels of DistributionChannels of Distribution
Channels of distribution can create associations through– The products and brands they store– The means by which they sell them– The advertising and promotion efforts
at a retail levelThe associations related to the
store are of key importance
Other Brands – Co-Other Brands – Co-brandingbranding
Co-branding (aka brand bundling or brand alliance) occurs when two or more existing brands are combined into a joint product or are marketed together in some fashion– E.g.: ICICI Bank HPCL Visa Card
Advantages of Co-Advantages of Co-brandingbranding
Borrow needed expertiseLeverage equity you don’t haveReduce cost of product introductionExpand brand meaning into related
categories– Broaden meaning– Increase access points
Source of additional revenue
Disadvantages of Co-Disadvantages of Co-brandingbranding
Loss of controlRisk of brand equity dilutionNegative feedback effectsLack of brand focus and clarityOrganisational distraction
Ingredient BrandingIngredient Branding
A special case of co-brandingIt contains creating equity for
materials, components or parts that are necessarily contained within other branded products
E.g.: Dolby noise reduction, Teflon nonstick coating, Intel inside
Advantages of Ingredient Advantages of Ingredient BrandingBranding
For the supplier of the ingredient– Greater sales and higher margins
through consumer pull– Better long term supplier-buyer
relationships– Enhanced revenue through twin
streams The direct revenue from supplies Royalty generated through display of
ingredient brand
Advantages of Ingredient Advantages of Ingredient BrandingBranding
For the manufacturer of the host product– Enhancing brand equity– Entry into new product categories,
market segments, distribution channels
– Sharing of some production and development costs with the supplier of the ingredient brand
Disadvantages of Disadvantages of Ingredient BrandingIngredient Branding
Suppliers unable to sustain high advertising costs
Loss of control Different objectives between the supplier and
host Manufacturers’ brand dilution Setting the stage for competitive ingredient
branding efforts– No expenditure on establishing the importance of the
ingredient– Spends only on establishing superiority of the
ingredient
CharactersCharacters
Characters are used to leverage brand knowledge through licensing agreements
Successful licensors includeMovies
Star Wars, Jurassic Park
Cartoon Strip Characters
Garfield, Snoopy
Television Characters
Sesame Street, Simpsons
SpokespersonsSpokespersons
Using well-known and admired people to promote products is a widespread phenomenon with a long marketing history
The rational behind these strategies is– To draw attention to the brand– To shape the perception of the brand
basis the knowledge and perceptions of the famous person
Potential Problems with Potential Problems with EndorsementsEndorsements
Overuse – endorsing too many products– Lack of any specific product meaning– Seen as overly opportunistic or insincere– E.g.: Amitabh Bachan
Match between celebrity and product– Navratna tel – Amitabh Bachan
Endorsers getting into trouble or their popularity dropping– E.g.: Mohammad Azharuddin
Low credibility– Celebrities endorse only for monies
Celebrities may distract attention from the brand
EventsEvents
Sponsored events can contribute to the brand equity by– Improving brand awareness– Adding new associations– Improving existing associations
E.g.: Standard Chartered Marathon, Ponds Femina Miss India, Manikchand Filmfare Awards
Third Party SourcesThird Party Sources
Seals or stamps – Agmark, ISIEndorsements from
– Leading magazines – Autocar– Organisations – SIAM– Experts – Hormuzd Sorabji
Published studies – JD Powers CSIAwards – CNBC ‘Car of the Year’
The Process of Brand The Process of Brand OrientationOrientation
What is Brand Orientation?What is Brand Orientation?
The organization’s point of view on marketplace relationships
Every organization has an attitude—stated or unstated—toward how it should use its resources to build marketplace relationships
This brand orientation has a major impact on how the company embraces and uses brand management
The Brand Orientation MapThe Brand Orientation Map
B
Product/Technology
Driven
D
Market
Driven
Behaviour/Solution
Products
Trade End User
Functional Relationship
Cu
stom
er
Rela
tion
ship
A
Sales
Driven
C
Opportunistic
Driven
The Brand Orientation MapThe Brand Orientation Map
It is possible to discover an organization’s brand orientation by placing it into one of four categories
The organization’s perspective on either functional or customer relationships—ultimately, its brand orientation—has a significant impact on its marketing behaviors, investments, and priorities
Functional RelationshipsFunctional Relationships
The chart’s vertical axis is a spectrum that plots an organization’s functional relationship with its marketplace
Functional relationship describes how an organization defines and communicates its competency to the marketplace
Organizations define their functional relationships with their markets based on either a product relationship or a behavior/solution relationship
Functional RelationshipsFunctional Relationships
Companies favoring a product relationship believe they will maintain competitive advantage by continually delivering a superior product that satisfies a particular need
At the other end of the spectrum, we find firms that base their functional relationships on satisfying a broader-based customer need - they do this by satisfying a broader set of customer needs that are defined by a behavior— for example, “athletic performance” shoes as opposed to “running shoes”—a complete, rather than a partial, solution
Customer RelationshipsCustomer Relationships
The other perspective described by this model is the customer relationship
This spectrum differentiates organizations based on whether they cater more to the needs of their trade customers—the vendors who sell their products—or to the needs of their end users
In marketing jargon, organizations that favor their trade customers put more emphasis on the “push” side of the marketing lever
Those at the other end of the spectrum believe they will have greater advantage with “pull” marketing strategies
A Sales Driven A Sales Driven OrganisationOrganisation
The sales-driven organization depicted in quadrant A believes in the superiority of its product
It believes in building brand equity primarily with its trade customers, mostly through sales activities and one-on-one relationships
E.g.: 3M
A Product/Technology A Product/Technology Driven OrganisationDriven Organisation
The product/technology-driven organization depicted in quadrant B relies on these abilities to create and sustain superior relationships with its end users
Its brand orientation is based on a belief that its superior technology is so valued by consumers that it can dictate terms to, its trade customers
Organizations with this type of brand orientation believe that their technical competence is their loudest brand voice and place less emphasis on other dimensions of the brand relationship
E.g.: Microsoft
An Opportunistically An Opportunistically Driven OrganisationDriven Organisation
The opportunistically driven brand orientation appears in quadrant C, the lower-left side of the graph
These organizations believe that their competitive advantage derives from being particularly responsive to the needs of their trade channels
Hence, they place a lot of stock in marketplace relationships with trade customers
Generally, these organizations build their initial brand equity with a sales-driven orientation
An Opportunistically An Opportunistically Driven OrganisationDriven Organisation
They then use the success of a particular product to cement that relationship
Such companies usually follow this success by expanding their product set based on the opportunities their trade channels dictate
They are consequently vulnerable to distressing their brand equity by extending their brand recklessly in reaction to the wishes of their trade customers
Certainly, companies with this orientation can be very successful, but they must pay extra attention to their brand management practices
A Market Driven A Market Driven OrganisationOrganisation
Finally, we come to the marketing-driven orientation shown in quadrant D
Organizations that subscribe to this brand orientation exhibit a richer sense of brand equity due, in most cases, to competitive necessity
These companies believe in the value of a functional relationship that goes beyond a product or set of products
To maintain an enduring relationship with end users, they know their brand must relate to an important behavior or solution
E.g.: Nike
Deciding Brand Deciding Brand OrientationOrientation
What’s the best brand orientation?It depends on many factors In reality, the challenge is to
create movement across each axis and evolve brand relationships to support the growth of the organization
Thank You!Thank You!
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