MSc
Marketing
&
Services Management
Branding Strategy
Dr. Weiyue (Jimmy) Wang
1
Branding
To understand:
• what is brand
• what is brand equity
• five categories of brand equity by Aaker
• what is customer-based brand equity
• how to build a brand equity
•brand building implications
• advantages of strong brands
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Product Vs. Brand
A product is anything that is capable of
satisfying consumer functional needs.
A brand gives a product a distinctive identity
through the creation of a name, design or,
more usually, some combination of these.
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Why brands are so important – customer
perceptions – Coke V Pepsi
Blind (%)
Branded (%)
Prefer Pepsi
51
23
Prefer Coke
44
65
Equal/Don’t
Know
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12
Strong brand names affect perceptions and preferences
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Why brand?
Company
perspective
Customer
perspective
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Helps with ever growing choice
Reduces search costs
Reduces psychological risks
Gives customers confidence –
heritage/reputation
Therefore allows for easier
choice – one more decision you
don’t have to make!
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Can obtain premium prices
Or sell at market price to increase
volume
And then benefit from economies
of scale
Reduces new product risks
Distinctive identity – difficult to
copy
Good products/brands add value
Builds internal pride
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What is a brand?
• A brand is a name that is given to a particular product or service
or range of products or services (Kotler, Keller, Brady, Goodman,
Hansen, 2009).
• A brand is a name, term, sign, symbol, design or combination of
these, which is used to identify the goods or services of one seller
and to differentiate them from those of competitors (Kotler,
Wong, Saunders, Armstrong, 2005)
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Ownership
Differentiation
Image
Identity
Added value
Relationship
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Brand Equity – D Aaker
• Brand equity is a set of brand assets and
liabilities linked to a brand, its name and
symbol, that add to or subtract from the value
provided by a product or service to a firm
and/or to that firm’s customers (Aaker, 1991,
p.15)
• Brand equity can be grouped into five
categories: brand loyalty / brand awareness /
perceived quality / brand associations / other
brand assets
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Five categories of Aaker’s brand
equity – brand loyalty
• Brand loyalty: a measure of the attachment that a
customer has to a brand
• When a brand makes a change, e.g. price, product
feature, etc., how likely its customers will be to switch to
another brand
• No loyalty --- committed loyalty
• Maintain and enhance loyalty: treat customer right / stay
close to customer / measure or manage customer
satisfaction / create switching costs / provide extras
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Five categories of Aaker’s brand equity –
brand awareness
• Ability of a potential buyer to recognise or
recall that a brand is a member of a certain
product category
• Level of awareness: top of mind awareness,
brand recall, brand recognition, unawareness
• The way from awareness to sales
• How to achieve awareness: be different or
memorable / involve a slogan or Jingle /
symbol exposure / event sponsorship / brand
extensions / recall needs repetition
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Five categories of Aaker’s brand equity –
perceived quality
• Customer’s perception of the overall quality or
superiority of a product or service with
respect to its intended purpose, relative to
alternatives
• Customer perceived quality ≠ customer
satisfaction
• Perceived quality generates values: a premium
price / willingness to buy / differentiation /
brand extension
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Five categories of Aaker’s brand equity –
brand associations
• Anything linked in memory to a brand
• All associations: product attributes,
intangibles, customer benefits, relative price,
country of origin effect, competitors, product
class, personality, life style, celebrity
endorsement
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Five categories of Aaker’s brand
equity – other assets
• Patents, trademarks, channel relationships,
etc
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Customer-based brand equity –
Kevin Lane Keller
• Customer-based brand equity occurs when the
consumer has a high level of awareness and
familiarity with the brand and holds some strong,
favorable and unique brand associations in memory
• Sources of brand equity: brand awareness & brand
image (brand knowledge)
• Brand knowledge is the key to create brand equity
and consists of a brand note in memory with a
variety of associations linked to it
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Building a strong brand:
The Four Steps of Brand Building
1.
Ensure identification of the brand with customers and an
association of the brand in customers’ minds
2.
Establish the totality of brand meaning in the minds of
consumers
3.
Elicit the proper customer responses to the brand
identification and brand meaning
4.
Convert brand response to create an intense, active loyalty
relationship between customers and the brand
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Four Questions Customers ask of
Brands
1. Who are you? (brand identity)
2. What are you? (brand meaning)
3. What about you? What do I think or feel
about you? (brand responses)
4. What about you and me? What kind of
association and how much of a connection
would I like to have with you? (brand
relationships)
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Brand Building Implications
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Customers own brands.
Don’t take shortcuts with brands.
Brands should have a duality.
Brands should have richness.
Brand resonance provides important focus.
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Marketing advantages of strong brands
1. Greater loyalty and less vulnerability to
competitive marketing actions and crises
2. Larger margins
3. Greater trade cooperation and support
4. Increased marketing communication
effectiveness
5. Possible licensing opportunities
6. Additional brand extension opportunities
7. Etc.
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Leveraging Secondary Associations
• Creation of new brand associations
• Effects on existing brand knowledge
– Awareness and knowledge of the entity
– Meaningfulness of the knowledge of the entity
– Transferability of the knowledge of the entity
• These secondary associations may lead to a transfer of:
– Response-type associations
• Judgments (especially credibility)
• Feelings
– Meaning-type associations
• Product or service performance
• Product or service imagery
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Types of Secondary Associations
Company
Co-branding
Other
brands
Extensions
COO
employees
People
Brand
Places
Endorsers
Channels
Things
Events
Licensing
Third party
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Leveraging Secondary Associations
• Brand associations may themselves be linked to other
entities, creating secondary associations:
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Company (through branding strategies)
Country of origin (through identification of product origin)
Channels of distribution (through channels strategy)
Other brands (through co-branding)
Characters (through licensing)
Celebrity spokesperson (through endorsement advertising)
Events (through sponsorship)
Other third-party sources (through awards and reviews)
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Company branding strategies
• Corporate brand associations
• Corporate brand visibility/dominance
– New brand / modify an existing brand / combine existing and new
brand
• Product responses (consumer evaluation and behaviour)
• Influenced by fit, consumer involvement, perceived risk
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Country of origin
• Consumer attitude towards foreign products
• French wine, Japanese electronics, Russian vodka,
Scottish whiskey, German car, etc…
• Made-in-… vs. Manufactured-in-…
• But mitigated by trial and direct experience, and
moderated by product type, consumer involvement, and
other personal values.
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Co-Branding
 Occurs when two or more existing brands are
combined into a joint product or are
marketed together in some fashion
 Examples:
 Sony Ericsson
 Haagen-Dazs & Balleys
 Dell Computers with Intel Processors
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Advantages of Co-Branding
 Borrow needed expertise
 Leverage equity you don’t have
 Reduce cost of product introduction
 Expand brand meaning into related
categories
 Broaden meaning
 Increase access points
 Source of additional revenue
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Disadvantages of Co-Branding
 Loss of control
 Risk of brand equity dilution
 Negative feedback effects
 Lack of brand focus and clarity
 Organizational distractions
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Licensing
 Involves contractual arrangements whereby firms can
use the names, logos, characters, and so forth of other
brands for some fixed fee
 Examples:
 Entertainment (Star Wars, Jurassic Park, etc.)
 Television and cartoon characters (The Simpsons)
 Designer apparel and accessories (Calvin Klein, Pierre
Cardin, etc.)
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Celebrity Endorsement
 Draws attention to the brand
 Shapes the perceptions of the brand
 Celebrity should have a high level of visibility
and a rich set of useful associations,
judgments, and feelings, also be credible in
terms of expertise, trustworthiness, and
likeability.
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Celebrity Endorsement: Potential Problems
 Celebrity endorsers can be overused by endorsing many products
that are too varied.
 There must be a reasonable match between the celebrity and the
product.
 Celebrity endorsers can get in trouble or lose popularity.
 Many consumers feel that celebrities are doing the endorsement
for money and do not necessarily believe in the endorsed brand.
 Celebrities may distract attention from the brand.
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Sporting, Cultural, or Other Events
• Sponsored events can contribute to brand
equity by becoming associated to the brand
and improving brand awareness, adding new
associations, or improving the strength,
favorability, and uniqueness of existing
associations.
• The main means by which an event can
transfer associations is credibility.
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Third-Party Sources
• Marketers can create secondary associations
in a number of different ways by linking the
brand to various third-party sources.
• Third-party sources can be especially credible
sources.
• Marketers often feature them in advertising
campaigns and selling efforts .
– Example: J.D. Power and Associates’ wellpublished Customer Satisfaction Index, Interbrand
publish Top 100 brands
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Leveraging Secondary Associations
• Brand associations may themselves be linked to other
entities, creating secondary associations:
–
–
–
–
Company (through branding strategies)
Country of origin (through identification of product origin)
Channels of distribution (through channels strategy)
Other brands (through co-branding)
• Special case of co-branding is ingredient branding
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Characters (through licensing)
Celebrity spokesperson (through endorsement advertising)
Events (through sponsorship)
Other third-party sources (through awards and reviews)
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What we have achieved?
•
•
•
•
•
•
•
•
what is brand
what is brand equity
five categories of brand equity by Aaker
how to build a brand equity
brand building implications
advantages of strong brands
Building customer-based brand equity
Secondary association
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