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Summary all articles Building Brands for Impact RUG 2024/2025. Perfect for the exam.
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1Week 1 – What is a brand and why does it matter?
Chapter 1 & 2 of your Textbook, Strategic Brand Management (5th ed)
Chapter 1 – Brands and brand management
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.
A brand can be a person, place, firm or organization.
Marketers like to refer as it as something that has actually created a certain amount of awareness,
reputation, prominence, and so on in the market place.
The components that identify and differentiate a brand are called brand elements. Like name, logo,
symbol, package design, …. It’s everything that distinguishes a brand.
Managers create value for the brand by linking associations to the brand.
A product is anything we can offer to a market for attention, acquisition, use, or consumption that
might satisfy a need or want. A brand can differentiate in more ways than a product.
Rational, tangible differences: Related to product performance of the brand
Symbolic, emotional, intangible differences: Related to what the brand represents.
There are 5 levels of meaning for a product:
1. The core benefit level is the fundamental need or want that consumers satisfy by consuming
the product or service.
2. The generic product level is a basic version of the product containing only those attributes or
characteristics absolutely necessary for its functioning but with no distinguishing features.
This is basically a stripped-down, no-frills version of the product that adequately performs
the product function.
3. The expected product level is a set of attributes or characteristics that buyers normally
expect and agree to when they purchase a product.
4. The augmented product level includes additional product attributes, benefits, or related
services that distinguish the product from competitors.
5. The potential product level includes all the augmentations and transformations that a
product might ultimately undergo in the future.
Most competition takes place at the product augmentation level
E.g. air conditioner
1. Cooling and comfort 3. At least two cooling 4. Optional features like
2. Sufficient energy speeds, according to touch-pad controls
consumer reports 5. Silently running
Why do brands matter:
- Based on past experiences, consumers find out which brands satisfy their needs and which
ones don’t. This results in lower search costs, both internal (thinking) and external (time).
- Consumers can form reasonable expectations about the brand
- It can be a symbolic device, so that consumers can project their self-image.
- An identical product can be rated different according to brand associations
3 categories of products with their attributes:
1. Search goods: Consumers can evaluate product attributes by visual inspection. (color/size/…)
2. Experience goods: Consumers have to trial and experience the good to evaluate it. (safety/…)
3. Credence goods: Consumers can rarely learn the products attributes.
Examples: (1) Grocery products, (2) Automobile tires, (3) Insurance coverage
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Brands can signal quality etc. and so reducing consumers risks in product decisions.
Consumers can perceive different types of risks in buying and consuming a product:
1. Functional risk: The product does not perform up to expectations.
2. Physical risk: The product poses a threat to the physical well-being or health of the user or
others.
3. Financial risk: The product is not worth the price paid.
4. Social risk: The product results in embarrassment from others.
5. Psychological risk: The product affects the mental well-being of the user.
6. Time risk: The failure of the product results in an opportunity cost of finding another
satisfactory product.
A way to reduce risk is buy from a well-known brand.
For firms, brands can serve as an identification purpose, but it is also legal protection. Brand loyalty
provides predictability and security of demand for the firm and creates barriers of entry.
Products are easy to duplicate, brands are not.
A brand is something that resides in the minds of consumers, it is perceptual. Branding creates
mental structures to organize knowledge about products/services, to clarify decisions.
Reputation, recognition, awareness and image is important in branding.
B2B branding creates a positive image and reputation for the company as a whole. Creating goodwill
with business customers leads to greater selling opportunities and more profitable relationships. A
strong B2B brand provides a strong competitive advantage.
Some argue that B2B doesn’t need branding because purchasers are well-informed and professional.
High-tech industries: Besides product innovation, also branding is important. Trust is critical.
Professional services branding: Combi of B2B branding and traditional consumer services branding.
Corporate credibility is key in terms of expertise, trustworthiness, and likability. Also variability is an
issue in professional services, because it is harder to standardize the services. Long-term rela is
crucial.
Retailers can do branding by unique service, assortment, price and credit policy.
Even a city can be a brand, visits are promoted via ads. Also ideas and causes can be branded.
Any brand, no matter how strong at one point in time, is vulnerable and susceptible to poor brand
management
Branding challenges & opportunities.
- Savvy customers: They know exactly what they are buying and from who. Therefore it is more
difficult to persuade using traditional communications.
- Economic downturns: Recession in 2008. There will always be ups and downs in the econ.
cycle.
- Brand proliferation: Increasing number of independent sub-brand under one parent brand.
With all these extensions, distribution channels have become clogged.
- Media transformation: Emerge of interactive and nontraditional media.
- Increased competition: Consumption hit the maturity (or even decline) stage. So marketers
can achieve growth only by taking it from competitors. But also increasing number of
competitors:
o Globalization: Open markets. More competitors over the whole world.
o Low-priced competitors: Imitation of market leaders for lower prices.
o Brand extensions: Same name products in new categories.
o Deregulation: Increased competition from outsides by deregulation.
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- Increased costs: More difficult to match investment levels and levels of support.
- Greater accountability: Marketers are responsible for ambitious short-term profit targets, due
to financial market pressures and senior management imperatives.
Guidelines for marketing brands during economic downturns: (1) Explore the upside of actually
increasing investment, (2) Get closer to your consumer, (3) Rethink how you spend your money, (4)
Put forth the most compelling value proposition, instead of only price focusing and (5) Fine-tune your
brand and product offerings
Brand equity has elevated the importance of brands. It is the marketing effects uniquely attributable
to a brand. It explains why different outcomes result from the marketing of a branded product or
service than if it were not branded.
Basic principles of branding and brand equity:
1. Differences in outcomes arise from the “added value” endowed to a product as a result of
past marketing activity for the brand.
2. This value can be created for a brand in many different ways.
3. Brand equity provides a common denominator for interpreting marketing strategies and
assessing the value of a brand.
4. There are many different ways in which the value of a brand can be manifested or exploited
to benefit the firm (in terms of greater proceeds or lower costs or both).
Strategic brand management involves the design and implementation of marketing programs and
activities to build, measure, and manage brand equity. This process includes 4 steps:
1. Identifying and developing brand plans
2. Designing and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity
(1) Identifying and Developing Brand Plans
It starts with a clear understanding of what the brand represents and how it should be positioned.
Brand planning uses 3 models:
1. The brand positioning model describes how to guide integrated marketing to maximize
competitive advantages.
2. The brand resonance model describes how to create intense, activity loyalty relationships
with customers.
3. The brand value chain is a means to trace the value creation process for brands, to better
understand the financial impact of brand marketing expenditures and investments
(2) Designing and implementing brand marketing programs
Brand equity is about positioning the brand in customers’ mind, to achieve as much brand resonance
as possible. This is called the knowledge-building process, and depends on 3 factors:
How to build brand equity
1. Choices of the brand elements that make up the brand and how they are mixed and matched
2. The marketing activities and supporting marketing programs and the way the brand is
integrated into them
3. Leverage secondary associations that are indirectly transferred to or leveraged by the brand
as a result of linking it to some other entity (e.g. country of origin and channel of distribution)
(3) Measuring and interpreting brand performance
A brand equity measurement system is a set of procedures to provide info to make the best possible
tactical decisions in the short run and the best strategic decisions in the long run. This involves
, 4
conducting brand audits, designing brand tracking studies, and establishing a brand equity
management system.
Brand audit – Assess brands’ health and source of equity.
Brand tracking studies – Info from customers on a routine basis, quantitative.
Brand equity man. system – Organizational processes to improve the brand equity concept.
(4) Growing and sustaining brand equity
Branding strategies should reflect corporate concerns and maybe have to be adjusted over time.
The brand architecture provides guidelines about the branding strategy and brand elements.
Brand portfolio – Set of different brands under the parent brand
Brand hierarchy – Number and nature of common and distinctive brand components.
It’s important to recognize different types of consumers in developing branding and marketing
programs. Also international factors are important.
Chapter 2 – Customer-based Brand equity and brand positioning
Customer-based brand equity is the differential effect that brand knowledge has on consumer
response to the marketing of that brand. It provides a unique point of view on what brand equity is
and how it should best be built, measured, and managed. About 2 questions:
1. What do different brands mean to consumers?
2. How does the brand knowledge of consumers affect their response to marketing activity?
CBBE is positive when consumers reacts more favorable with the brand than without branding.
Quality of brand building in the past is a reflection in brands. Brand equity offers guidance and focus.
The associative network memory model views memory as a network of nodes and connecting links,
in which nodes represent stored information or concepts, and links represent the strength of as
sociation between the nodes. Any type of information, whether it’s verbal, abstract, or contextual,
can be stored in the memory network.
Brand knowledge consists of brand awareness and brand image.
Brand awareness is related to the strength of the brand node or trace in memory
Measured by the consumers ability to identify the brand under different conditions.
Brand image is consumers’ perceptions about a brand, as reflected by the brand associations
held in consumer memory. The informational nodes linked to the brand node.
Customer-based brand equity occurs when the consumer has a high level of awareness and
familiarity with the brand and holds strong, favorable and unique brand associations in memory.
Low-involvement decisions: Brand awareness is enough for favorable consumer responses.
Low involvement results when consumers lack either purchase motivation or purchase ability.
Low ability rely on heuristics
Brand awareness consists of:
- Brand recognition: Ability to confirm prior exposure when given the brand as a cue.
- Brand recall: Ability to retrieve the brand from memory when given the product category, the
needs fulfilled by the category, or a purchase or usage situation as a cue.
Benefits of brand awareness:
- Learning advantages: Influences the formation and strength of associations
- Consideration advantages: Increases likelihood that the brand is part of the consideration set
- Choice advantages: Affects choices among brands in the consideration set
Creating brand awareness means increasing the familiarity of the brand through repeated exposure.
The more a consumer “experiences” the brand by seeing it, hearing it, or thinking about it, the more
likely he or she is to strongly register the brand in memory.
A strategy is shock advertising: Using bizarre teams. But they fail to create category links.
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