International Brand Management
Why brands are important for customers and for companies, how consumers form
images about and attitudes towards brands and how the value of a brand can be
determined. How brands can optimally be managed and how to position the brand
the best in the mind and heart of customers.
Meeting 1: Brands and Brand Management
Goldfarb (2001): Let there be Sunlight! The Rise of Lever Brothers and Sunlight
Soap.
Paper describes the growth of Sunlight soap and Lever Brothers Limited from the 1880’s to the 1920’s
with an emphasis on the early period of rapid growth. Sunlight’s success was a result of careful brand
management.
Lever built one of the largest industrial empires in the world. Number of possible
explanations for the rapid growth in production. Supply – raw material costs and
Lever’s introduction of national distribution system are often cited as key factors.
Demand – growth is attributed to product innovation of Sunlight soap itself,
demographic factors, advertising, and branding. Most common story for demand
focuses on heavy advertising campaigns and the decision to individually wrap each
bar of soap. Paper argues that growth was a result of the careful management of the
Sunlight brand. Brand = 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. Brand management = coordinating a
coherent image based on advertising, distribution, and product quality in addition to
ensuring awareness.
Brand management has become a key buzz-phrase in modern marketing →
importance of careful guidance on the brand-building process. Brand gives value
through brand equity = set of assets and liabilities linked to a brand, its name and
symbol, that adds to or subtracts from the value provided by a product of service to a
firm and/or to that firm’s customers. Brand awareness & Brand image, necessary to
invest in both to create value (equity) for the brand. Careful planning and molding of
the growth of investment is essential. Next step is building brand equity: requires
careful brand management. Goal is to build assets of brand awareness and image in
order to improve marginal cash flow to the firm through customer loyalty, premium
pricing, entry deterrence, and reduction of future promotional costs. Begins with
choosing a name and overall image for the brand (reflects target market). Brand
equity involves both brand awareness and image.
Keller: Marketers should adopt a broad view of marketing decisions + Should define
knowledge structures that they would like to create in the minds of customers +
Should take long-term view of marketing decisions.
Aaker: Can be best achieved when single person is in charge of business associated
with a brand.
,Soap industry – increase consumption: technology, population growth, lower taxation
(lower prices), growth of education, creation of free public water supply systems,
increasing wages, and smoke and grime prevalent in factory and mine work. Lever
arrived in industry in 1885, started with packing the soaps individually with logo on
each wrapper. By 1906, early growth based on careful management of Sunlight
brand was essentially complete and company began focus on other brands. Today
(2001) Unilever has revenues in excess of 29 billion pounds per year!
“The key to successful new product development is to identify an unmet need or
desire”. Lever recognized this to be a mass-marketed national soap brand: met
through Sunlight soap. He tried to teach working class people the importance of
hygiene, managed to associate the societal benefit of hygiene with his product.
Focus on “less labour” gave Sunlight an image distinct from its rivals as a friend of
the working woman. The image that Lever built for Sunlight brand was that Sunlight
alone was the friend of the working-class woman, helper her to do her work easily
and efficiently.
Keller instructs brand managers to choose names that a simple, familiar, and
distinctive. And consistent with image trying to uphold.
Advertising is often credited as a fundamental force behind Sunlight’s growth,
success was however not due to advertising alone. Lever advertised heavily from the
start. Without a consistent image, the widespread awareness of the brand would be
wasted. Heavy advertising alone is not sufficient to make a product successful, and
Lever was by no means the first to advertise soap. Equity is a result of awareness
and image. Consistency of advertising message with brand image made it a success.
Next challenge was to maintain and increase goodwill. Number of imitators arose:
lawsuits followed, mostly unsuccessful. Lever also understood the value of brand
equity he had built in Sunlight: monitored it carefully and would not risk destroying it.
“Marketers should employ tracking studies to measure consumer knowledge
structures over time. When the Sunlight brand was carefully managed it succeeded,
and when it was not, it failed. High brand awareness is only valuable when
accompanies by a positive and coherent brand image.
Lever also used supply variables to build brand equity. Most visible is creation of
town of Port Sunlight surrounding factory. Some scholars have argued that Lever
was aided by low prices of raw materials in late 1880’s. idea of national distribution
network also helped. Reliable, inexpensive distribution was essential. Through
savings in distribution costs, branded advertising as a cost-saving device as well as a
demand-enhancement device. It was only through branding that Lever could create a
national market for his product. It was Sunlight’s carefully nurtured brand equity that
allowed it to become a national product.
,Meeting 2: Brand Equity
CHAPTER 1: Brands and Brand Management
Brand is derived from brandr, which means “to burn”, as brands were and still are as
the means by which owners of livestock mark their animals to identify them. Brand=
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. Managers refer to it as something that has created a certain
amount of awareness, reputation, prominence, and so on, in the marketplace.
Differences between commodity and distinctive offering that constitutes a brand.
Brand elements= different components of a brand that identify and differentiate them.
Brand names come in many different forms. Some use words with inherent product
meaning or suggesting important attributes or benefits. Others are made up and
include prefixes and suffixes that sound scientific, natural, or prestigious. Also brand
elements can be based on people, places, things, and abstract images.
Product= anything we can offer to a market for attention, acquisition, use, or
consumption that might satisfy a need or want. May be physical good or service.
Could also be a retail outlet, a person, an organization, or a place, or even an idea. 5
levels: (1) Core benefit level [fundamental need/want], (2) Generic product level
[basic / stripped-down version], (3) Expected product level [normally expect and
agree to], (4) Augmented product level [additional, what distinguishes from
competitors], and (5) Potential product level [all augmentations and transformations].
Brand is more than product, because it can have dimensions that differentiate it in
some way other products designed to satisfy the same need. Differences may be
related to product performance of brand (rational and tangible) or related to what the
brand represents (symbolic, emotional, and intangible). Some brands create
competitive advantages with product performance. Other brands create competitive
advantages through non-product-related means. Brands, especially strong ones,
carry a number of different types of associations, and marketers must account for all
of them when making marketing decisions. Not only many different types of
associations to link to the brand, but there are many different means to create them.
Most valuable assets many firms have may not be tangible ones, but intangible
assets.
To consumers, brands provide important functions. Identification of source of product
+ Assignment of responsibility to product maker + Risk reducer + Search cost
reducer + Promise, bond, or pact with maker of product + Symbolic device + Signal
of quality. Manufacturers: Means of identification to simplify handling or tracing +
Means of legally protecting unique features + Signal of quality level to satisfied
customers + Means of endowing products with unique associations + Source of
competitive advantage + Source of financial returns.
• Search goods: consumers can evaluate product attributes by visual inspection.
• Experience goods: consumers cannot assess product attributes.
• Credence goods: consumers may rarely learn product attributes.
, Given the difficulty of assessing and interpreting product attributes and benefits
for experience and credence goods, brands may be particularly important signals
of quality and other characteristics to consumers for these types of products.
Brand can reduce risk. Functional / Physical / Financial / Social / Psychological /
Time risk. One way to handle these risks is to buy well-known brands, especially
those with favourable past experiences. Brands can be a very important risk-handling
device!
Brands also provide a number of valuable functions to their firms. Identification
purpose, to simplify product handling or tracing. Help organize inventory and
accounting records. Offers legal protection for unique features or aspects of the
product. Can retain intellectual property rights, giving legal title to brand owner. Can
signal a certain level of quality. Branding can be seen as a powerful means to secure
a competitive advantage. Huge sums have been paid for brands in mergers or
acquisitions.
Brands provide important benefits to both consumers and firms. A brand is something
that resides in the minds of consumers. Brand is a perceptual entity rooted in reality,
but it is more than that – reflects the perceptions and perhaps even the
idiosyncrasies of consumers. Marketers must give consumers a label for the product
and provide meaning for the brand. Key to branding is that consumers perceive
differences among brands in a product category. Marketers can benefit from branding
whenever consumers are in a choice situation. Commodity= product so basic that it
cannot be physically differentiated from competitors in the minds of consumers.
Physical goods are traditionally associated with brands and include many of the best-
known and highly regarded consumer products. B2B products – makes up a huge
percentage of the global economy. B2B branding creates a positive image and
reputation for the company as a whole. Strong brand can provide valuable
reassurance and clarity to business customers who may be putting their company’s
fate on the line. Strong B2B brand can provide strong competitive advantage. 6
guidelines for marketers of B2B brands: 1. Ensure entire organization understands
and supports branding and brand management; 2. Adopt corporate branding strategy
if possible and create well-defined brand hierarchy; 3. Frame value perceptions; 4.
Link relevant non-product-related brand associations; 5. Find relevant emotional
associations for the brand; 6. Segment customers carefully both within and across
companies; and 7. Leverage digital techniques and social media marketing
approaches.
High-tech products: firms often lack any kind of brand strategy and sometimes see
branding a simply naming their products. Marketing skills are playing an increasingly
important role in the adoption and success of high-tech products. Speed and brevity
of technology product life cycles create unique branding challenges. Trust is critical.
One of the challenges in marketing services is that they are less tangible than
products and more likely to vary in quality. Branding can be particularly important to
service firms. Brands can help identify and provide meaning to different services.
