CHAPTER SEVENTEEN

1. CHAPTER SEVENTEEN Strategic Launch Planning 1 Branding March 13, 2007

2. The Value of a Strong Brand “Brand equity has just as much effect on stock price as do earnings.” —David Aaker Professor of Marketing, Emeritus University of California, Berkeley

3. What is a Brand? A brand is a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” Source: American Marketing Association A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly outdated; a successful brand is timeless. Source: Stephen King, WPP Group, London A brand is something that resides in the minds of consumer.

4. What is a Brand? Symbol Term Identifies product/service of seller and differentiates from competitors Design Name Combination Sign Keller, Kevin Lane. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. 1998.

5. Benefits of Brands • Consumers • Identification of the source of product • Assignment of responsibility to product maker • Risk reducer • Search cost reducer • Promise, bond, or pact with maker of product • Symbolic device • Signal of quality

6. Benefits of Brands (cont.) • Manufacturers • Means of identification to simplify handling or tracing • Means of legally protecting unique features • Signal of quality level to satisfied customers • Means of endowing products with unique associations • Source of competitive advantage • Source of financial returns

7. A Brand is More Than a Product Organizational associations Brand Symbols Brand Personality Country of origin Scope Attributes Uses Quality/value Functional benefits Product Brand/customer relationships User Imagery Self-expressive benefits Emotional benefits

8. What is Brand Equity? What distinguishes a brand from its unbranded commodity counterpart and gives it equity is the sum total of consumers’ perceptions and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, and about the company associated with the brand. Source: Alvin A. Achenbaum, “The Mismanagement of Brand Equity, 1993

9. Brand Equity as a Percent of Firm Tangible Assets Industry Brand Equity Apparel 61 Tobacco 46 Food Products 37 Chemicals 34 Electric machinery 22 Transportation 20 Primary metals 01

10. Picking Stocks Suppose that you will be given 0.1 percent of the stock on one of the following companies. Which firm’s stock would you prefer, given the following information? Sales Assets Profits General Motors$166B $229B $7B Coca-Cola $19B $17B $4B

11. What is Brand Equity? Perceived Brand Quality Brand Associations • Personality • Benefits • Attitudes • Brand • Awareness • Brand Name • Symbols • Other • Proprietary • Brand Assets • Patents • Trademarks • Channel relationships Brand Equity Brand Loyalty • Provides Value to Firm by Enhancing: • • Efficiency and Effectiveness of Marketing Programs • • Brand Loyalty • • Prices/margins • Brand extensions • • Trade Leverage • • Competitive Advantage Provides Value to Customer by Enhancing: • Interpretation/processing of information • Confidence in the Purchase Decision • Use Satisfaction Source: Aaker (1991) “Managing Brand Equity”

12. Dimensions of Brand Personality

13. Brand personality Describe the personality of the following: • Arizona Iced Tea • Intel • Blockbuster Video • Wal-Mart • Toyota • Dr. Pepper • Aquafina • Seiko • Texas Instruments • Nordstroms

14. Brand personality What personality characteristics come to mind for the following: • Brand is repositioned several times or changes its slogan repeatedly • Brand uses continuing character in its advertising • Brand charges a high price and uses exclusive distribution • Brand frequently available on deal • Brand offers many line extensions • Brand sponsors show on PBS or uses recycled materials • Brand features easy-to-use packaging or speaks at consumer’s level in advertising • Brand offers seasonal clearance sale • Brand offers five-year warranty or free customer hot line

15. Brand Equity • Sources of Brand Knowledge • Brand Awareness • Brand Image • Strength of Brand Associations • Favorability of Brand Associations • Uniqueness of Brand Associations

16. Why Extend a Brand? • Immediate brand awareness • Transfer existing associations • Faster trial • Reinforce core brand

17. Why Not Extend a Brand? • “Boomerang” potential • Dilution • Bad “fit”

18. Questions and Guidelines in Brand Name Selection Figure 17.8

19. Some Brand Names That Didn’t Work Figure 17-9 Crapsy Fruit French cereal Fduhy Sesane China Airlines snack food Mukk Italian yogurt Pschitt French lemonade Atum Bom Portuguese tuna Happy End German toilet paper Pocari Sweat Japanese sport drink Zit German lemonade Creap Japanese coffee creamer I'm Dripper Japanese instant coffee Polio Czech laundry detergent Sit & Smile Thai toilet paper Barf Iranian laundry detergent

20. High Brand Loyalty High Brand Awareness High Perceived Quality More/Better Brand Associations Other Brand Assets Reduced marketing costs Increased trade leverage Easier to make brand associations Increased liking and familiarity Supports quality positioning Supports higher-price strategy Creates positive image Helps customer process information Patents or trademarks Strong channel relationships Provides value to customer: Assists in customer information processing Increases confidence in purchase Increases satisfaction in product use Provides value to firm: Increases effectiveness of marketing programs Increases customer loyalty and trade leverage Facilitates brand extensions Is a source of competitive advantage How Brand Equity Provides Value

21. Building Brand Equity • Getting awareness of the brand and the meaning. • Making brand associations -- even the factory location in Saturn’s case. • Building perceived quality • Loyalty in repurchase -- locking them in • Getting reseller support