International Brand Management – book
Chapter 1
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. – Brand – AMA definition
Brand: something that has created a certain amount of awareness, reputation, prominence
and so on, in the marketplace. It is the difference between a commodity and a distinctive
offering that constitutes a brand. – Brand – industry’s concept
Brand elements: the different components of a brand that identify and differentiate it.
Product: anything we can offer to a market for attention, acquisition, use, or consumption
that might satisfy a need or want. Five levels of meaning for a product:
- Core benefit level: the fundamental need or want that consumers satisfy by
consuming the product or service.
- Generic product level: a basic version of the product containing only those attributes
or characteristics absolutely necessary for its functioning but with no distinguishing
features.
- Expected product level: a set of attributes or characteristics that buyers normally
expect and agree to when they purchase a product.
- Augmented product level: includes additional product attributes, benefits or related
services that distinguish the product from competitors.
- Potential product level: includes all the augmentations and transformations that a
product might ultimately undergo in the future.
Steady investments in research and development have produced leading-edge products, and
sophisticated mass marketing practices have ensured rapid adoption of new technologies in
the consumer market.
By creating perceived differences among products through branding and by developing a
loyal consumer franchise, marketers create value that can translate to financial profits for the
firm.
Consumer: all types of customers, including individuals as well as organizations.
Why do brands matter? Consumers
If consumers recognize a brand and have some knowledge about it, then they do not have to
engage in a lot of additional thought or processing of information to make a product decision.
Based on what they already know about the brand, consumers can make assumptions and
form reasonable expectations about what they may not know about the brand.
Categories of products and their associated attributes/benefits:
- Search goods: consumers can evaluate product attributes like sturdiness, size, color,
style, design, weight and ingredient composition by visual inspection.
- Experience goods: consumers cannot assess product attributes like durability, service
quality, safety, and ease of handling or use so easily by inspection and actual product
trial and experience is necessary.
- Credence goods: consumers may rarely learn product attributes.
Types of risk in buying and consuming a product:
- Functional risk
- Physical risk
- Financial risk
- Social risk
, - Psychological risk
- Time risk
Why do brands matter? Firms
A brand can retain intellectual property rights, giving legal title to the brand owner.
Intellectual property rights ensure that the firm can safely invest in the brand and reap the
benefits of a valuable asset.
Brands can signal a certain level of quality so that satisfied buyers can easily choose the
product again.
To firms, brands represent enormously valuable pieces of legal property, capable of
influencing consumer behavior, being bought and sold, and providing the security of
sustained future revenues.
Mergers and acquisitions allow companies to seek out undervalued brands that can be
combined with existing product portfolios of acquirers, resulting in higher earnings and profit
performance for firms.
Branding creates mental structures and helps consumers organize their knowledge about
products and services in a way that clarifies their decision making and, in the process,
provides value to the firm.
Physical goods: traditionally associated with brands and include many of the best-known
and highly regarded consumer products like Mercedes-Benz, Nescafe and Sony.
- Business-to-business products: the B2B market makes up a huge percentage of the
global economy. B2B branding creates a positive image and reputation for the
company as a whole. A strong B2B brand can provide a strong competitive
advantage.
- High-tech products: these firms often lack any kind of brand strategy and sometimes
see branding as simply naming their products. Marketing skills are playing an
increasingly important role in the adoption and success of high-tech products. The
speed and brevity of technology product life cycles create unique branding
challenges.
Services: although strong service brands have existed for years, the pervasiveness of
service branding and its sophistication have accelerated in the past decade.
- Role of branding with services: one of the challenges is that services are less tangible
than products and more likely to vary in quality, depending on the particular person or
people providing them. Branding can be important to service firms as a way to
address intangibility and variability problems.
- Professional services: offer specialized expertise and support to other businesses
and organizations. Professional services branding is an interesting combination of
B2B branding and traditional consumer services branding. Individual employees have
a lot more of their own equity in the firm and are often brands in their own right. The
challenge is to ensure that their words and actions help build the corporate brand and
not just their own.
Retailers and distributors
Brands help retailers create an image and establish positioning. Retailers can also create
their own brand image by attaching unique associations to the quality of their service,
product assortment and merchandising, and their pricing and credit policy.
,Retailers can introduce their own brands by using their store name, creating new names or
some combination of the two. Products wearing these store brands or private label brands
offer another way for retailers to increase customer loyalty and generate higher margins and
profits.
To be competitive online, many retailers have had to improve their online service by making
customer service agents available in real time, shipping products promptly, providing tracking
updates and adopting liberal return policies.
Digital brands
Online marketers now realize the realities of brand building. First, as for any brand, it is
critical to create unique aspects of the brand on some dimension that is important to
consumers such as convenience, price or variety. The brand needs to perform satisfactorily
in other areas, such as customer service, credibility and personality. By offering unique
features and services to consumers, the best online brands are able to avoid extensive
advertising or lavish marketing campaigns, relying more on word-of-mouth and publicity.
Online brands also learned the importance of off-line activities to draw customers to
websites. They also began to target specific customer groups for whom the brand could offer
unique value propositions.
People and organizations
These often have well-defined images that are easily understood and liked by others.
One key for a successful career in almost any area is that coworkers, superiors, or even
important people outside your company or organization know who you are and recognize
your skills, talents, attitude and so forth.
Organizations often take on meanings through their programs, activities and products.
Sports, arts and entertainment
Sports marketing has become highly sophisticated in recent years, employing traditional
packaged-goods techniques. Many sport teams are marketing themselves through a creative
combination of advertising, promotions, sponsorship, direct mail, digital, and other forms of
communication. Brand symbols and logos in particular have become an important financial
contributor to professional sports through licensing agreements.
Certain movie franchises such as James Bond, Transformers and Star Wars have
established themselves as strong brands by combining all these ingredients into a formula
that appeals to consumers and allows the studios to release sequels that rely on the title’s
initial popularity. A strong brand is valuable in the entertainment industry because of the
fervent feelings that brands generate as a result of pleasurable past experiences.
Geographic locations
Increased mobility of both people and businesses and growth in the tourism industry have
contributed to the rise of place marketing. These campaigns aim to create awareness and a
favorable image of a location that will entice temporary visits or permanent move from
individuals and businesses alike.
Ideas and causes
They may be captured in a phrase or a slogan and even be represented by a symbol such as
AIDS ribbons.
Maintaining brand relevance and differentiation is important to the success of a brand.
, Any brand is vulnerable and susceptible to poor brand management.
It is likely that ‘digital native vertical brands’ could present a unique set of challenges and
opportunities, as companies begin to leverage the power of digital marketing to strengthen
their bonds with customers.
- Digital native vertical brands: born online and then later go direct to customers.
Technology has produced the ability to access vast amounts of information about almost any
topic. Algorithms act as a mediator between those who seek answers and the answers
themselves.
Over time, as these new technologies become more standard, brand marketers may find
opportunities to utilize these innovative features in designing better brand experiences for
their customers.
As connectivity increases, it also lowers consumers’ attention and makes them more
vulnerable to intrusions. However, while marketers gain unparalleled access to consumers,
consumers may become protective of their time and find ways of escaping this unwanted
attention.
Social media platforms have become vehicles for consumers to meet and share information
with each other. Consumers are increasingly producers of content. The opportunity offered
by these platforms is that they enable marketers to gain very precise information about their
target audiences, including political views and entertainment preferences, which allows for a
360-degree view of a customer.
The dynamics of the digital world are such that it can be easier for companies to enter into
new categories without having to face the barriers to entry that typically exist in the physical
world.
Disintermediation: refers to the reduction or elimination of intermediaries from the channel
of distribution, including entities such as agents, brokers and wholesalers.
Reintermediation: refers to the introduction of new intermediaries that perform some of the
same functions or have additional roles in the channel of distribution.
As more consumer decision-making is based on online word-of-mouth and reviews, there is
reduced information asymmetry between producer and consumer. The increase in
information on product quality certainly has reduced the reliance on brands as signals of
quality.
Given the speed with which consumers can learn about actual quality it is also very important
that brands invest a great deal in creating exceptional customer experiences that are worthy
of buzz.
Since unambiguous quality information is available for a low cost, consumers will gravitate
towards brands that are seen as having the highest average quality with the lowest variance.
Another important change in the marketing environment is the erosion or fragmentation of
traditional advertising media and the emergence of interactive and nontraditional media,
promotion and other communication alternatives.
Any negative news about brands can be amplified and destroy brand value quickly.
