Chapter 10, p 308. Chapter 12, pp 350-354. Content Summary This topic highlights the main features in the analysis of brands to be offered, specifically the aspects of brand equity development and management, brand strategy, brand positioning and brand differentiation strategy. 4.1 Brand Equity A brand is a name, term, sign, symbol, design, or some combination of these elements, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors. The different components of a brand –brand names, logos, symbols, package designs and so on – are brand elements. Brands are valuable intangible assets that offer a number of benefits to customers and firms and need to be managed carefully. The key to branding is that consumers perceive differences among brands in a product category. Brand equity should be defined in terms of marketing effects uniquely attributable to a brand. That is, different outcomes result in the marketing of a product or service because of its brand, compared to the results if that same product or service was not identified by that brand.
STUDY GUIDE BMMK5103 Marketing Management 38There are three key ingredients of customer-based brand equity: (a) Brand equity arises from difference in consumer response. (b) Differences in response are a result of consumer’s brand knowledge. Brand knowledge consists of all thoughts, feelings, images, experiences, beliefs and so on that become associated with the brand. (c) Brand equity is reflected in perceptions, preferences and behaviour related to all aspects of the marketing of a brand. The roles of brands include: (a) Consumers learn about brands through experiences with the product and its marketing programme. (b) Brands perform valuable functions for the firm. (c) A credible brand signals a certain level of quality so that satisfied buyers can easily choose the product again. (d) Brand loyalty provides predictability and security of demand for the firm and creates barriers to entry for other firms. (e) Branding can be a powerful means to secure a competitive advantage. (f) To firms, brands represent enormously valuable pieces of legal property that can influence consumer behaviour, be bought and sold, and provide their owner the security of sustained future revenues. 4.2 Building Brand Equity Building brand equity depends on three main factors: (a) The initial choices for the brand elements or identities making up the brand; (b) The way the brand is integrated into the supporting marketing programme; and (c) The associations indirectly transferred to the brand by links to some other entity (the company, country of origin, channel of distribution, or another brand). There are several important activities that need to be carried out in building brand equity. They are: (a) Choosing brand elements; (b) Developing brand elements;
STUDY GUIDE BMMK5103 Marketing Management 40sources of brand equity due to changes in consumer tastes and preferences, the emergence of new competitors or new technology, or any new development in the marketing environment. 4.5 Devising Brand Strategy Several important activities need to be carried out in devising brand strategy, which are: Branding name decisions; Brand extensions; and Branding portfolios. Branding name decision is the process of increasing the brand equity by developing and placing a brand name for a product. The brand name can come from: