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Slides & Lecture Notes Brand Management
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Pagina |1Slides & Lecture Notes Brand
Management
, Pagina |2
Lecture 1
Brands are used to make products of certain manufacturers different (by name) in a world full
of commodities. Make a product different and more attractive than competitors. Branding was
also used to give the customer knowledge on the true quality of the product.
e.g. the number 925 on a ring gives you the knowledge that it is Sterling silver
The phenomenon of branding was first seen in the 1890s. In that time, building brands was
done very carefully.
Brand: 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 creates a certain amount of awareness, reputation, prominence, and so on… in the
marketplace.
Brand Management Perspective
A brand is much more than just the product!
Brand from the organisations’ point of view: physical product
Brand from the customers’ point of view: psychological product view course
The first perspective is product-driven, the traditional view of looking
at a brand. This meant listening to your customer do develop and
adjust your product where you put your brand on.
The second-perspective is people-driven – a theory in which the
focus is on your ideas of product development and adjustment while
keeping your customer segments in mind. The marketer here focuses
on growing a customer base, and not necessarily a brand building
brand equity and maximising customer lifetime value.
Product: anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a need or want
A product is more in the eyes of the consumer than the thing you hold in your hands. Levitt
distinguished four levels in a product:
1. Core benefit – what a car makes a car (e.g. four wheels)
2. Tangible product – the extra features in a car (e.g. air-conditioning, colour, warranties)
3. Augmented product – e.g. brand name, additional services the company gives
4. Total product – the status or symbolic meaning of a product, the intangible aspects
linked to a certain product
The first three factors are under control of the organisation, while the latter factor is what the
customer adds to the product.
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Marketing means building a bridge between the customer and company.
Differences between product and brand
Product Brand
Tangible, can be touched by the customer Intangible, lives in the mind of the customer
Can be copied Unique
Can be outdated Potentially timeless 1)
Involves transactions Forms basis of connections
1) Although your brand may be potentially timeless, it remains important to update your
brand!
Examples
McDonalds
A customers has a formed a network of associations about this brand, many are learned while
others come from yourself. One learns from the advertising from the company and this can be
seen as collective associations. The associations that come from yourself, are developed by
your own experience and are personal and private associations.
When one makes a positioning map, it is important to think about what exactly to include.
The cola wars of Pepsi and Coca-Cola
Pepsi’s marketing share was not as big as they would like. They started a cola war with Coca-
Cola to show that customers liked their drinks better when being blindfolded. Coca-Cola was
so impressed with these results, that they decided to change their recipe and taste. This was a
bad decision! Consumer did prefer Pepsi, but Coca-Cola was better valued by the customers;
it had become a part of their culture. People do not like it that you change something in their
culture. This shows that a brand is much more than just a product.
A brand is a product, but one that adds other dimensions that differentiate it in some way from
other products designed to satisfy the same need.
These differences can be:
Rational and tangible
Symbolic, emotional and intangible
The reality is that most valuable assets that many firms have may not be tangible assets, but
intangible assets (management skills, marketing, financial and operations expertise and most
important, the brands themselves. Keep in mind that a brand is a valued (in)tangible asset that
needs to be handled carefully. Brands are intangibles that have become the key source of
corporate value. Research shows that the ratio of intangible / tangible has gone from 17/83 in
the 1980s to 80/20 nowadays.
The Importance of Brands
Brands are important for customers because they:
- Identify the source of a product
- Assign a responsibility to the product maker
- Work as a risk reduce of different kinds of risks; brand names stand for a certain
quality
- Work as a search cost reducer (heuristic); leveraging the brand name
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- Cause people to have a bond or pact with the maker of the product brand
communities
- Are a symbolic device
- Are a signal of quality
Brands are important for manufacturers because they:
- Function as a means of identification to simplify handling or tracing
- Are a means of legally protecting unique features
- Can signal quality level
- Are a means of endowing products with unique associations
- Are a source of competitive advantage (barriers of entry)
- Are a source of financial returns customer relationship management
Any product can be branded since there will be perceived differences. But branded does not
mean that it is a brand. A brand is added to a product and has a certain meaning; it loads the
product. Reasons for companies to use brands:
- Physical goods
o FMCG: +/- 100 % “branded”
o B2B: creating a positive image and reputation for company as a whole
o High-tech: Financial success is no longer driven by product innovation or latest
product specifications and features alone
- Services
Here brands are used to address potential intangibility and variability problems and to
make the abstract nature of a service more concrete
- Retailers and distributors
Generate consumer interest, patronage and loyalty in a store and consumers learn to
expect certain brands and products from a store
o Private label brands
- Online products and services
Improving customer services because unique aspects of the brand (convenience, price,
etc.) are not enough
- People and Organizations
e.g. Walt Disney, Clintons
- Sports, Arts and Entertainment (experience goods)
e.g. Walt Disney, Pixar
- Geographic Locations
San Francisco
- Ideas and Causes
e.g. ribbons (AIDS, breast cancer), BOB
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