This summary covers all the material for the Brand Management (328032-M-6) course and exam (2023). Including detailed examples and notes from the Interactive Lectures + Practice Exam Questions!
,Topic 1: Brand Management
The past, present, and future…
1.1 Brand Management
The past
Once upon a time, there were commodities (products), which were:
● Undifferentiable by seller/manufacturer;
● Often sold loose;
● Quality highly variable;
● In competitive markets, we have many manufacturers/sellers for the same
commodity.
This raises the question: “How do I get a buyer to prefer and buy my ‘commodity’?”
The answer to this question is to differentiate it from competition and make it more attractive,
by branding your ‘commodity’. Simply because products can be copied, while a brand is
unique.
The past: history
The word ‘brand’ originates from the old Norse word ‘brandr’, meaning ‘to burn’. It referred to
the mark that cowboys would burn into their livestock’s skin to identify the owner. Examples
are:
● Marks on Chinese porcelain, pottery jars from Grecian, Roman, and Indian artefacts
dating from 1300 BC.
● Cattle Ranchers.
● Bakers marking their bread (English law in 1266).
● The Moon & the Stars – P&G brand.
● Uneeda biscuits (1989) – first nationally branded biscuits.
So, 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”.
In practice, a brand creates a certain amount of meaning, reputation, preference, and so on,
in the eyes of the customers.
The present
“It’s no longer 100% what the companies tell you about the brand – that has stain-fighting
power or what have you – but it’s really about word of mouth, ratings, and reviews.”
— Michelle Aleti, founder of Thinkwell Marketing.
“A brand used to be what you said it was, and you were able to communicate that very
efficiently. Today, brands are the sum total of what others say that you are.”
— Jeff Bedard, JPMorgan Chase.
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,The present: (changing) perspectives
From the organizations’ point of view, it’s a physical product.
From the customers’ point of view, it’s a psychological
product.
Then we have a product-driven brand philosophy (companies
produce products) versus a people-driven brand-philosophy
(people buy brands).
● Core product: functionality of product/service
○ e.g., shoes
● Tangible product: core product + everything that you can see and experience with all
the senses you have
○ e.g., shoes can have multiple colors
● Augmented product: core product + tangible product + get certain
guaranties/warranties, additional services
○ e.g., shoes can have certain guarantees for 20 years
● Total product: core product + tangible product + augmented product + make the
customer feel special/extra benefits, added value in the eyes of the consumer -
cannot add this as a manufacturer
○ e.g., is no longer company defined, but customer defined, use Shell over
Esso, as it used to be Dutch for example
Until augmented product, producer has influence in the product, at total product, the
customer takes over and the extra benefits will be added by the customer itself.
Example: Diet Coke vs. Diet Pepsi
● Diet Coke vs. Diet Pepsi in blind taste test
○ Prefer Pepsi sample: 51%
○ Prefer Coke: 44%
○ No preference: 5%
● Diet Coke vs. Diet Pepsi in identified taste test
○ Prefer Pepsi sample: 23%
○ Prefer Coke: 65%
○ No preference: 12%
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,So, 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) needs. These valued differences can
be:
● Rational and tangible, but are often;
● Intangible, emotional, and symbolic.
Note that even in low expensive product we have brands: before Nike, there were sneakers,
before Starbucks there was coffee, before Coca-Cola there were soft drinks, and before
Kanzi there were apples!
Brands have become more and more intangibles that have become the key source of
corporate value:
The present: product versus brand
A product is “anything that can be offered to a market for attention, acquisition, use, or
consumption.” A branded product is “a product that has been given a name for
identification purposes.” 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) needs.”
Product → branded product Branded product → Brand
(Physical product perspective) (Psychological product perspective)
* Tangible: can be touched by customer * Intangible: lives in customer’s mind
* Can be copied * Unique
* Can be outdated * Potentially timeless
* Involves transactions * Forms basis of connections
* Differentiation * Relevance
* Attributes * Personality
* Promise * Relationship
* Static * Dynamic
* Mass * Individual
* Awareness * Meaningfulness
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, The present: importance
Why are brands important for (consumers and producers)?
Consumers
● Identification of product … and source;
● Assignment of responsibility to product maker;
● Risk reducer (different kinds of risk);
● Search cost reducer (e.g., heuristic);
● Bond / pact with maker of product;
● Symbolic device;
● Signal of quality;
● Et cetera.
Producers
● Means of identification to simplify handling or tracing;
● Means of legally protecting unique features;
● Signal of quality level (e.g., “made by Samsonite”);
● Means of endowing products with unique associations (beers being sold in a bar);
● Source of competitive advantage (barriers of entry);
● Source of financial returns;
● E.g., Uber, Facebook, Amazon, et cetera.
The present: importance
CBBE (Customer Based Brand Equity) is (1) differential effect that (2) brand knowledge
(“hey, that’s an Apple”) has on (3) consumer response to the marketing of that brand.
A brand has positive customer-based brand equity when customers react more favorably to
a product and the way it is marketed when the brand is identified than when it is not (e.g.,
when it is attributed to a fictitiously named or unnamed version of the product).
Brand equity stresses the importance of the role of the brand in marketing strategies:
● Differences in outcomes arise from “added value” as a result of past marketing
activities for the brand;
● This value can be created in many different ways;
● Brand equity provides a common denominator for interpreting marketing strategies
and assessing the value of a brand;
● Value can be manifested in different ways, e.g., greater proceeds (gains) and/or
lower costs (pains).
Brand management goals:
1. Consumer Based Brand Equity (CBBE): build, sustain, and leverage positive, strong,
active, unique meanings of the brand.
2. Financial Based Brand Equity (FBBE): to enable the brand to earn more in the short
and long run.
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