Branding
What is a Brand?
A brand is often a concept that means different things to different people. It's akin to the story of the five blind men describing an elephant – each touches a different part and describes it uniquely. Similarly, the perception of a brand varies depending on what aspect one focuses on.
Definition
A brand can be defined as:
A name, term, sign, symbol, design, or a combination of these, intended to identify the products or services of one seller or a group of sellers and to differentiate them from competitors.
When you see a name, logo, or symbol, such as Apple, Nike, or HP, you immediately identify the source and its promise. This identification goes beyond recognition; it embodies a seller's commitment to deliver consistent features, benefits, and services.
The Promise of a Brand
A brand is not merely an identifier; it is the seller's promise to deliver:
- Features
- Benefits
- Services
Example: Nike
Nike's slogan, "Just Do It," reflects more than just quality. It conveys:
- Purpose: Specialized products like running shoes, tennis shoes, etc.
- Association: The endorsement of great athletes and sports stars.
- Consistency: Nike delivers on promises like quality, Airsoles, and lightweight features, making it a trusted choice.
This consistency builds trust and loyalty, turning the brand into a sustainable competitive advantage.
Why Brands Matter in Marketing
Building a brand requires significant time, energy, and resources, but the result is a strategic asset that simplifies consumer decision-making:
- Routine Problem Solving: For convenience products, consumers often make quick decisions without extensive comparison.
- Extensive Problem Solving: For complex or expensive products, consumers engage in detailed evaluations. However, established brands with a strong promise often bypass this scrutiny.
A strong brand ensures that consumers trust it implicitly, fostering loyalty and reducing the need for constant comparison unless the brand makes a significant error.
The Power of Brand Identity
A brand’s identity communicates six key dimensions:
- Attributes
- Benefits
- Values
- Culture
- Personality
- User
Example: Apple
Let’s analyze Apple using these six dimensions:
1. Attributes
Apple is known for:
- Technological superiority
- Convenience and ease of use
- Comfortable user experience
2. Benefits
Apple provides:
3. Values
Apple solves customer problems innovatively, focusing on user-centric solutions rather than just technology.
4. Culture
Apple promotes a unique culture:
- Campaign: "Think Different" encapsulates the brand ethos.
- Philosophy: Encourages creativity, rebellion, and aspiring to make a difference.
5. Personality
Apple's personality aligns with:
- Rebels and visionaries ("the crazy ones").
- Individuals driven to think differently and impact the world.
6. User
Apple appeals to diverse user segments, including:
- Professionals
- Students
- Families (e.g., homemakers)
- Kids
Marketing Example
Apple’s campaigns focus on simplicity and effectiveness. For instance, iPhone advertisements highlight camera quality with stunning photos taken by amateurs, reinforcing its functionality and accessibility.
The Broader Implications of Branding
A brand represents more than a name or logo. It embodies:
- Attributes and Benefits: Functional, social, and emotional.
- Values and Culture: Aspirations and community.
- Personality and Users: Diverse yet loyal audiences.
6.3.3 Roles of a brand
A brand plays a pivotal role in the success and identity of a product or company. Here’s a clear breakdown of its key roles and characteristics:
Key Roles of a Brand
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Identification of the Maker
A brand identifies the producer or seller of a product or service, distinguishing it from competitors. For example, when you see a product labeled "Apple" or "Nike," you instantly associate it with its maker. -
Simplifies Product Handling
Brands streamline product management and organization, especially at the SKU (Stock Keeping Unit) level. This aids in inventory management, accounting, and operational efficiency. -
Offers Legal Protection
Brands protect against infringement, unauthorized use, and copying. Trademarks, copyrights, and patents ensure exclusive rights and help maintain brand integrity. -
Signifies Quality
A brand is often seen as a guarantee of quality. Loyal consumers trust that the brand consistently delivers on its promises. -
Creates Barriers to Entry
Strong brands create significant hurdles for new competitors trying to enter the market.How Does a Brand Create Barriers to Entry?
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Consumer Trust and Loyalty: Established brands foster deep trust and loyalty. Consumers often prefer a familiar brand without comparing features or characteristics.
Example: Taj Mahal Tea—The association with quality, heritage, and character is so strong that consumers don’t actively seek alternatives, even if a competitor offers similar or better quality. - Emotional Connection: Effective branding campaigns (e.g., "Wah Taj!" featuring Zakir Hussain) evoke emotional responses that further strengthen loyalty.
- Reduced Comparisons: Over time, loyal consumers stop comparing features and simply stick to the brand they trust, making it harder for new entrants to attract attention.
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Consumer Trust and Loyalty: Established brands foster deep trust and loyalty. Consumers often prefer a familiar brand without comparing features or characteristics.
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Supports Price Premium
A strong brand allows companies to charge higher prices, as consumers are often willing to pay more for the perceived value, trust, and status associated with the brand.
Competitive Advantage of a Brand
- Sustainable Differentiation: A well-established brand becomes a competitive advantage that is extremely difficult for competitors to overcome.
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Loyalty Over Features: Consumers prioritize the emotional and functional trust they have in a brand over detailed comparisons of features and pricing.
Example: Taj Mahal Tea remains dominant despite alternatives because it embodies a legacy of quality and reliability.
6.3.4 Building strong brands: Equity, Culture & Value
To understand a brand effectively, it’s essential to grasp three foundational concepts: Brand Culture, Brand Equity, and Brand Value. These concepts provide a framework for analyzing and appreciating the essence, components, and financial significance of a brand.
1. Brand Culture
What is Brand Culture?
Brand culture refers to:
- The identity of the brand: What the brand stands for and how it is perceived.
- Its place in popular culture: How the brand resonates with societal norms, values, and trends.
2. Brand Equity
What is Brand Equity?
Brand equity encompasses the components that build and sustain a brand, including:
- Awareness: How well consumers recognize and recall the brand.
- Perceptions: The associations and emotional connections consumers have with the brand.
- Loyalty: The extent to which consumers consistently prefer the brand over competitors.
- Performance: The brand’s ability to deliver on its promises.
3. Brand Value
What is Brand Value?
Brand value quantifies the financial return and significance of a brand. It answers the question:
Is the brand financially beneficial?
6.3.5 Building strong brand culture
Brand culture is the narrative and essence of a brand, shaped through stories and myths built over time. These stories form the foundation of what the brand stands for and how it resonates with its community. It is more than just a product—it’s about the identity, emotions, and lifestyle associated with it.
What is Brand Culture?
Brand culture is:
- A Storytelling Framework: Stories, myths, and campaigns about the brand build its cultural essence.
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Shaped by Multiple Stakeholders: These stories are told by:
- Brand ambassadors or influencers.
- The company through its campaigns and promotions.
- Consumers or users who share their experiences and stories.
These narratives, consistently communicated over time, create a perception of the brand that resonates deeply with its audience.
Key Features of Brand Culture
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Creates a Community
- The stories tell aspiring users what it means to be part of the brand’s community.
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Establishes Emotional Connection
- A brand culture taps into the psyche of consumers, building a sense of belonging and identity.
Examples of Brand Culture
1. Harley-Davidson:
- Story: Harley-Davidson symbolizes freedom, rebellion, and camaraderie among riders.
- Culture: Owning a Harley means embracing a lifestyle that values the open road and a tight-knit community of riders.
- Impact: It inspires consumers who admire this lifestyle to associate themselves with the brand.
Importance of Storytelling in Brand Culture
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Builds Trust and Loyalty
- Repeated storytelling creates familiarity and trust in the brand.
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Differentiates the Brand
- Stories emphasize what the brand stands for, setting it apart from competitors.
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Fosters Aspirational Identity
- Consumers aspire to be part of the brand’s culture and community.
6.3.6 Building effective brand equity
Brand equity refers to the set of assets linked to a brand's name that adds value to its products or services. It represents the intangible value a brand brings, going beyond the physical characteristics or features of its products or services. A strong brand equity creates differentiation, trust, and loyalty among consumers.
Components of Brand Equity (David Aaker's Model)
David Aaker's framework identifies key elements that constitute brand equity:
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Brand Awareness
- The simplest form of brand equity.
- It reflects the familiarity of consumers with the brand.
- A well-known brand creates a sense of trust and preference.
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Perceived Quality
- A recognized brand often conveys a perception of quality.
- Consumers know what to expect from the brand, increasing reliability and trust.
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Brand Associations
- Subjective and emotional associations linked to the brand.
- These include attributes like personality and lifestyle connections.
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Examples:
- Saffola: Associated with a healthy heart.
- Dove: Linked to beauty and moisturizing benefits.
- Harley-Davidson: Represents a macho, rebellious lifestyle.
- Pepsi: Reflects youthfulness and rebellion.
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Brand Loyalty
- The strongest measure of brand equity.
- Loyal customers endorse and advocate for the brand, contributing to its growth and market share.
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Other Brand Assets
- Patents, trademarks, and proprietary technology act as barriers to entry, protecting the brand’s market position.
Customer-Based Brand Equity (CBBE) Model
The Customer-Based Brand Equity (CBBE) model explores the consumer’s perspective of brand equity. It revolves around four steps (or questions), structured as a pyramid:
Step 1: Brand Identity
- Question: Who are you?
- The brand creates identification and association.
- Example: Apple answers, "I am innovative and stylish."
Step 2: Brand Meaning
- Question: What are you?
- The brand establishes its meaning in the consumer’s mind through its attributes and benefits.
- Example: Apple answers, "I am premium, easy to use, and a status symbol."
Step 3: Brand Response
- Question: What do I think or feel about you?
- The consumer reflects on their experiences and perceptions of the brand.
- Example: With Apple, the consumer might think, "I feel technology, innovation, and great design."
Step 4: Brand Resonance
- Question: What kind of relationship or connection would I like to have with you?
- The consumer decides their level of loyalty and connection to the brand.
- Example: With Apple, they see the brand as a problem-solver, a leader, and a community builder.
Summary of the CBBE Model
Step | Consumer Question | Brand Example (Apple) |
---|---|---|
1. Identity | Who are you? | "I am innovative and stylish." |
2. Meaning | What are you? | "I am premium, easy to use, and a status symbol." |
3. Response | What do I think or feel about you? | "I feel technology, innovation, and great design." |
4. Resonance | What kind of connection would I like? | "A problem-solver, a leader, and a community builder." |
6.3.7 Generating high brand value
Brand value refers to the quantitative measure of the financial worth of a brand. It demonstrates how much the brand contributes to the organization in monetary terms, influencing financial performance, consumer loyalty, and stakeholder engagement. Measuring brand value involves specific models and frameworks developed by leading consulting firms like Interbrand, Brand Finance, and others.
Key Components of Brand Value
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Financial Value
- The monetary worth of the brand, often expressed in terms of the dollar value.
- This can include economic profits, future cash flows, and the brand's market value.
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Brand Contribution
- The brand’s role in enhancing corporate value through its influence on consumers, employees, and stakeholders.
- Example: Driving customer demand, creating loyalty, and enabling a price premium.
Approaches to Measuring Brand Value
1. Interbrand Model
Interbrand assesses brand value by considering the brand's impact on the organization and its stakeholders. It focuses on three primary dimensions:
a) Financial Performance
- Evaluates the economic profit generated by the brand.
b) Brand's Role in Consumer Decision-Making
- Examines the qualitative aspect of how the brand influences purchase decisions.
- Does the brand simplify or enhance consumer choices?
c) Brand Strength
- Assesses the brand’s ability to create loyalty and compete effectively.
- Loyalty acts as a barrier to competition and strengthens the brand's market position.
2. Brand Finance Model
Brand Finance uses a similar approach with slight variations. It emphasizes:
a) Dollar Value of the Parent Company
- Calculates the total financial worth of the organization attributable to the brand.
b) Future Valuation
- Projects future economic benefits tied to the brand, including future demand and price premiums.
- Example: Kingfisher Airlines, where loans were extended based on the assessed value of the Kingfisher brand.
c) Brand Contribution
- Measures the brand’s role in corporate value by assessing its influence on consumer demand and loyalty.
Applications of Brand Value
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Financial Transactions
- Brands can be mortgaged or valued during loans, mergers, and acquisitions.
- Example: The Kingfisher brand was mortgaged for loans during its expansion into airlines.
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Strategic Planning
- Organizations use brand valuation to determine price premiums, set future pricing strategies, and make investment decisions.
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Stakeholder Engagement
- Demonstrates the brand's contribution to customer loyalty, employee motivation, and investor confidence.
Summary of Brand Valuation Parameters
Parameter | Description | Example |
---|---|---|
Financial Value | The brand's monetary worth in terms of economic profit. | Dollar value of Kingfisher brand for loans. |
Brand Contribution | The brand’s ability to drive demand and loyalty. | Apple’s premium pricing due to innovation and trust. |
Insights into Brand Valuation
- Frameworks Vary: Each consulting firm uses unique models combining both qualitative and quantitative measures.
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Two Key Measures:
- The financial value (direct economic worth).
- The contribution to corporate value (impact on stakeholders).
- Broader Impacts: Beyond financial measures, brand value reflects the brand’s influence on long-term business success.
6.3.8 Measuring the success of a brand
Brands are intangible assets, and their success depends on how effectively they are created, nurtured, and leveraged. Measuring brand success involves various frameworks and tools that evaluate its impact, relevance, and financial contributions. Below are the key ways to identify and measure the success of a brand:
Ways to Measure Brand Success
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Perceptual Mapping
- A tool to visually position a brand in the consumer’s mind relative to competitors.
- It helps understand consumer perception and brand differentiation.
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Brand Asset Valuator (BAV)
- Developed by Young and Rubicam, this framework evaluates the brand based on four pillars:
- Differentiation: Uniqueness of the brand.
- Relevance: How well the brand connects with the target audience.
- Esteem: Consumer respect for and perception of the brand's quality.
- Knowledge: Consumer awareness and understanding of the brand.
- Developed by Young and Rubicam, this framework evaluates the brand based on four pillars:
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Brand Report Card (Kevin Lane Keller)
- A structured evaluation of a brand using 10 key attributes to measure its health and success.
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Attributes of the Brand Report Card:
- Ability to Deliver Benefits: Can the brand consistently meet its promises?
- Relevance: Is the brand relevant to the needs of its target audience?
- Value Perceptions: Does the brand deliver value for the price?
- Positioning: Is the brand distinct and clearly positioned in the market?
- Consistency: Does the brand messaging remain consistent over time?
- Brand Architecture: Is the portfolio of sub-brands aligned and coherent?
- Brand Equity: Does the brand have strong awareness, associations, and loyalty?
- Brand Meaning: Is the brand meaning well-defined and understood?
- Internal Support: Are employees and stakeholders aligned with the brand's vision?
- Measuring Brand Equity: Are brand metrics regularly tracked and optimized?
Key Takeaways on Measuring Brand Success
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Significance of Brand
- A strong brand impacts consumer choices, drives loyalty, and creates financial value.
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Frameworks for Evaluation
- Tools like Perceptual Maps, Brand Asset Valuator, and Brand Report Card provide insights into a brand’s success.
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Quantifiable Metrics
- Brands can be valued in financial terms, making it possible to link branding efforts to tangible outcomes.