Branding involves giving a distinct name and/or mark to a product for its easy identification in the market. It intends to highlight something unique about the product viz., quality, specialty, utility etc. At the same time, a brand name should be easy to recall for the customers.
According to W.J. Stanton, M.J. Etzel and B.J. Walker “Brand is comprehensive term encompassing other narrow terms. A brand is name and/or mark intended to identify the product of one seller or group of seller’s and differentiate the product from competing products”.
Learn about:- 1. Concept of Branding 2. Definitions of Branding 3. Types 4. Selecting a Brand 5. Importance 6. Functions 7. Branding Decisions 8. Brand Equity 9. Brand Image 10. Trade Marks and Brand Names 11. Branding Strategy 12. Brand Building Strategies 13. Advantages and Disadvantages.
Branding : Meaning, Definitions, Importance, Functions, Advantages, Disadvantages and Brand Image
Contents:
- Meaning of Branding
- Definitions of Branding
- Types of Brands
- Selecting a Brand
- Importance of Branding
- Functions of Branding
- Branding Decisions
- Brand Equity
- Brand Image
- Trade Marks and Brand Names
- Branding Strategy
- Brand Building Strategies
- Advantages and Disadvantages of Branding
Branding – Meaning and Concept
Brand management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with present and future purchases of the same product.
This may increase sales by making a comparison with competing products more favorable. It may also enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of profit it generates for the manufacturer. This results from a combination of increased sales and increased price.
The annual list of the world’s most valuable brands, published by Interbrand and Business Week, indicates that the market value of companies often consists largely of brand equity.
Research by McKinsey & Company, a global consulting firm, in 2000 suggested that strong, well-leveraged brands produce higher returns to shareholders than weaker, narrower brands. Taken together, this means that brands seriously impact shareholder value, which ultimately makes branding a CEO responsibility.
Branding originated as the act of using a heated tool to mark livestock as property, and to mark criminals, either as a public warning or a sign of disgrace. The practice of branding humans began before recorded history and ended in western culture as a form of punishment in the late 1800s.
The act of branding has since evolved from its early uses, so that it now connotes the science of “burning” qualities and attributes into the minds of consumers, in order to yield emotional relationships and loyalties.
Historically, a brand was any visible mark created for identification. Today, a brand includes any identifiable or subconscious characteristic, including the many qualities and emotions contained in a consumer’s relationship with an entity, be it a company, product, service or individual. Therefore, the term “branding” is now synonymous with relationship-building.
Contrary to popular belief, a brand is not a mark, logo, or trademark. Marks, logos and trademarks may be the most easily identifiable attributes of brands, but these signifiers act as simple visual links that embody the complex emotional attributes contained in any relationship between entities and their consumers – the brand is the relationship, and the visual cue — be it a mark, logo, or trademark — that works to represent, evoke and enhance the relationship.
Brands have become the most valuable and protected assets of corporations, because they enable the introduction of new commodities while concurrently maintaining or strengthening relationships with consumers.
Emerging branding practices include the use of MRI — magnetic resonant imaging, or brain scan — technology, and digital surveillance. MRI technology informs and prioritizes brand development and accurately predicts consumer behavior, and digital surveillance technology targets consumers based on interest profiles.
Some marketers distinguish the psychological aspect of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service.
Marketers engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand image may be developed by attributing a “personality” to or associating an “image” with a product or service, whereby the personality or image is “branded” into the consciousness of consumers.
A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. This approach works not only for consumer goods B2C (Business-to-Consumer), but also for B2B (Business-to-Business).
A brand which is widely known in the marketplace acquires brand recognition. Where brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present.
For example, Disney has been successful at branding with their particular script font (originally created for Walt Disney’s “signature” logo), which it used in the logo for go(dot)com.
The American Marketing Association defines a brand as – “A brand is a name, term, sign, symbol, design, or a combination of these, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors”.
A brand is a customer experience represented by a collection of images and ideas; often, it refers to a symbol such as – a name, logo, slogan, and design scheme. Brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design, and media commentary.
A brand is a symbolic embodiment of all the information connected to a company, product or service. A brand serves to create associations and expectations among products made by a producer. A brand often includes an explicit logo, fonts, color schemes, symbols, sound which may be developed to represent implicit values, ideas, and even personality.
The brand, and “branding” and brand equity have become increasingly important components of culture and the economy, now being described as – “cultural accessories and personal philosophies”.
Branding may refer to:
1. Livestock Branding:
Livestock branding is any technique for marking livestock so as to identify the owner. Originally, livestock branding only referred to the practice of burning a mark on livestock using a hot iron, though the term is now also used to refer to other alternative techniques such as – freeze branding, ear tagging, and RFID tagging. In the American west, it has evolved into a complex marking system still in use today.
2. Human Branding:
To Brand (or cauterize) a person means to burn a symbol into a living person’s skin using a hot or cold iron, with the intention that the resulting scar makes the symbol permanent. It therefore uses the physical techniques of livestock branding on a human, either with consent as a form of body modification; or under coercion, as a punishment or imposing masterly rights over an enslaved, otherwise legally thereto condemned or other (even illegally) exploited and oppressed person.
3. Assignment of Brands to Products:
A name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from another.
Vehicle title branding is the use of a permanent designation on a vehicle’s title, registration or permit documents to indicate that a vehicle has been written off due to collision, fire or flood damage or has been sold for scrap.
The designation or brand is mandatory in most provinces and states in North America when an insurer or vehicle owner writes off a vehicle as a “total loss”. Typically this means the cost to repair the vehicle would equal or exceed the car’s value, although legal definitions vary.
5. Personal Branding:
Personal branding is the process whereby people and their careers are marketed as brands. It has been noted that while previous self-help management techniques were about self-improvement, the personal branding concept suggests instead that success comes from self-packaging.
Branding is a strategy that is used by marketers. Pickton and Broderick (2001) describe branding as – “Strategy to differentiate products and companies, and to build economic value for both the consumer and the brand owner”.
Brand occupies space in the perception of the consumer, and is what results from the totality of what the consumer takes into consideration before making a purchase decision. So branding is a strategy, and brand is what has meaning to the consumer.
There are a number of interpretations of the term brand.
They are summarized as follows:
i. A brand is simply a logo e.g., McDonald’s Golden Arches.
ii. A brand is a legal instrument, existing in a similar way to a patent or copyright.
iii. A brand is a company e.g., Coca-Cola.
iv. A brand is shorthand – not as straightforward. Here a brand that is perceived as having benefits in the mind of the consumer is recognised and acts as a shortcut to circumvent large chunks of information. So when searching for a product or service in less familiar surroundings you will conduct an information search. A recognised brand will help you reach a decision more conveniently.
v. A brand is a risk reducer. The brand reassures you when in unfamiliar territory.
vi. A brand is positioning. It is situated in relation to other brands in the mind of the consumer as better, worse, quicker, slower, etc.
vii. A brand is a personality, beyond function e.g., Apple’s iPod versus just any MP3 player.
viii. A brand is a cluster of values e.g., Google is reliable, ethical, invaluable, and innovative and so on.
ix. A brand is a vision. Here managers aspire to see a brand with a cluster of values. In this context vision is similar to goal or mission.
x. A brand is added value, where the consumer sees value in a brand over and above its competition e.g., Audi over Volkswagen, and Volkswagen over Skoda – despite similarities.
xi. A brand is an identity that includes all sorts of components; depending on the brand e.g., Body Shop International encapsulates ethics, environmentalism and political beliefs.
xii. A brand is an image where the consumer perceives a brand as representing a particular reality e.g., Stella Artois Reassuring Expensive.
xiii. A brand is a relationship where the consumer reflects upon him or herself through the experience of consuming a product or service.
Branding – Definitions: Provided by American Marketing Association, W.J. Stanton, M.J. Etzel and B.J. Walker
Branding and Trademark are important aspects of product and are every extensively used these days. Product is basically a bundle of utilities. But a consumer, now-a-days not only buys utilities but also various other features associated with the product. The physical product is only a part of the total product.
In addition, there are other elements like Branding, Packaging, Labelling, Guarantee, Warrant After-sale-service which make a complete product. Brand is the name of the product and many times it is the brand name which the customers by and not the physical product itself.
A brand is a name, term, sign, symbol or some combination used to identify the products of one firm and to differentiate them from competitive offerings. A brand identifies the seller’s product and differentiates it from the competitor’s product.
According to American Marketing Association “A brand name is that part of the brand consisting of words or latter that comprise a name used to identify and distinguish the firm’s offerings from those of competitors”.
According to W.J. Stanton, M.J. Etzel and B.J. Walker “Brand is comprehensive term encompassing other narrow terms. A brand is name and/or mark intended to identify the product of one seller or group of seller’s and differentiate the product from competing products”.
Brand is, thus, a name, symbol or mark given to a product which helps in identifying the product. Brand provides value to the product. It speaks of product quality, product image and product value. Brand mark, on the other hand is the symbol or design of a brand that cannot be spoken. Example – the symbol of Maharaja of Air India.
Branding is the process of providing a brand name to a product. It is managerial activity by which a product is branded. It includes activities like giving a brand name to a product, designing a brand mark, and establishing and popularizing it.
Brand name when legalized or registered, are called Trademarks. It is essential to get brand names registered to protect them from being used by others.
Branding involves giving a distinct name and/or mark to a product for its easy identification in the market. It intends to highlight something unique about the product viz., quality, specialty, utility etc. At the same time, a brand name should be easy to recall for the customers.
Thus, branding gives a distinct identity to a product so that it can be distinguished from the products of the competitors. This is also essential for the purpose of advertising and sales promotion. It further helps in brand building and brand recognition in the minds of the consumers.
A brand can have a registered ‘Trade Mark’ so that others don’t make use of it. The symbol (letter ‘R’ in a circle) on the product package indicates that the mark has been duly registered. It also gives an assurance of uniform quality throughout the entire range of products covered under the brand.
Examples of a few successful brands are –
a. Bata – One instantly remembers footwear when one thinks of it.
b. Tata Motors – One instantly remembers cars when one thinks of it.
Lakme – It is closely associated with cosmetics and beauty products.
Branding – Types of Brands: National Brand, Family Brand and Individual Brands
1. National Brand or Private Brand:
This decision is more relevant in developed countries where department stores dominate the retail distribution system. This is, however, largely a hypothetical question in India. Only Super Bazars have started marketing a few products, which are specially packed and sold under their names.
Some recent examples are NANZ SUPER MARKET and MERA BAZAR. However, if outlets of Super Bazar Mother Dairy and National Consumers Co-operative Federation increase in sufficient number, it is possible that private brands will become a reality in future.
Some popular brand names in the product-categories of sarees, and car accessories are: ROOP SAREES, RAM CHAND KISHAN CHAND SAREES, KALA NIKETAN SAREES, GLOBE AUTO ACCESSORIES and DESERT COOLERS.
Attributes to be built into the product:
This is a very crucial decision. The matrix of such attributes will decide the product positioning. A marketer has the option to position his product at any segment of the market — top, bottom or intermediate. Example- SURF is a premium- quality and high-priced product. At the other end, NIRMA is low-priced- DET and KEY are somewhere at the middle in quality; TITAN is high-priced and HMT is low-priced.
2. Family Brand and Individual Brand:
The decision has to be taken whether to adopt a family brand under which all the products of a company come or an individual brand for each product.
Advantages of a Family Brand:
i. A family brand reduces the cost of launching.
ii. It reduces the on-going promotional expenditure.
iii. If a brand is successful, it would be able to sell the entire product-line.
iv. It is very cost-effective.
v. If one product under a family brand does exceptionally well, there is a strong possibility of a positive fallout for other products under the same brand.
Disadvantages of a Family Brand:
i. A family brand is not justified, if the products offered are of uneven quality.
ii. It will not be a good strategy if the markets are dissimilar in terms of consumer profile.
iii. A family brand does not recognise that each product can be given a specific identify by a suitable brand, which can go a long way in making it a fabulous success in its own right.
3. Individual Brands:
Individual brands are those where each product has a unique brand name.
Examples:
HLL — REXONA, LUX, LIFEBUOY, PEARS, CLOSE-UP Toothpaste and Surf GODREJ — EVITA, KEY, VIGIL, GANGA, CROWNING GLORY and CINTHOL
Advantages:
i. If there is a product failure, it will not affect the whole range of products.
ii. If stands on its feet for its reputation.
Disadvantages:
i. Individual brand is costly.
Branding – Selecting a Brand
In selecting a brand name, the following aspects are taken into consideration:
1. A brand name should reflect directly or indirectly some aspects of the product, like benefits and functions. For example, EZEE implies that it is easy to use; GOOD KNIGHT, a mosquito repellent, suggests that one can have a good sleep at night with it; and PUMA conjures up the celebrated speed of a ‘cheetah’.
2. It should be distinctive, e.g., a name like “Chancellor” for a cigarette portrays status, power and an opulent life-style.
3. It should be easy to pronounce and remember. Some of the classic examples are: AMUL, HUTCH, WHIRLPOOL, PHILIPS, VIMAL, TAJ, ONIDA, BAJAJ, MRF, FEM, LUX, THUMS-UP, 100 PER CENT, BUSH, GARDEN and RIN.
4. It should be legally protected.
Brand Equity:
The overall strength of a brand in the marketplace and its value to the company that owns it; increasingly, companies are trying to assign financial value to brand equity.
Brand Loyalty:
The level of commitment that consumers feel toward a given brand, as represented by their continuing purchase of that brand.
Branding – Importance: To Buyer and Seller
Branding is not a waste of resources but it helps the buyers and sellers in many ways as follows:
1. To Buyer:
i. Help buyers identify the product that they like/dislike.
iii. Helps reduce the time needed for purchase.
iv. Helps buyers evaluate quality of products especially if unable to judge a products characteristics.
v. Helps reduce buyers perceived risk of purchase.
vi. Buyer may derive a psychological reward from owning the brand, e.g., Rolex or Mercedes.
2. To Seller:
i. Differentiate product offering from competitors.
ii. Helps segment market by creating tailored images.
iii. Brand identifies the company’s products making repeat purchases easier for customers.
iv. Reduce price comparisons.
v. The seller’s brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors.
vi. A good brand helps in building the corporate image.
Brand helps firm to introduce a new product that carries the name of one or more of its existing products, half as much as using a new brand, lower co. designs, advertising and promotional costs.
Branding – 7 Important Functions
(i) It helps in product identification and gives ‘distinctiveness’ to a product.
(ii) Indirectly it denotes the quality of standard of a product.
(iii) It eliminates imitation products.
(iv) It ensures legal right on the product.
(v) It helps in advertising and packaging activities.
(vi) It helps to create and sustain brand loyalty to particular products.
(vii) It helps in price differentiation of products.
Thus brand names serve to create identity to distinguish one product from another. Identity is essential to competition, because without a means for identification there is no way of making a choice. Brand names definitely facilitate in making a choice.
In the present-day markets branding is inevitable and plays an important role in demand creation. A large number of products even today live in the markets mainly due to an effective use of brand names.
For example, Usha fans. This brand name is so common that one does not even recognise the manufacturer,-viz., Jay Engineering. Similar instance is found in the case of ‘Dettol’. It is simply an antiseptic lotion. But the manufacturers were successful in creating an impression in the minds of most of the people that Dettol means antiseptic lotion and vice versa.
The importance of branding arose mainly because of the overemphasis on advertisement. In fact, the brand name is a child of advertisement and the trade mark is the legal guardian of a brand name.
Branding – Branding Decisions
Branding has become a management technique as it involves consideration of alternatives and choosing the best alternative. Brand managers have to develop a logical order of action in developing brand awareness and ultimately leading to brand loyalty.
These steps may be as follows:
1. Non-recognition
2. Brand recognition/Brand awareness
3. Brand Preference — Making the consumers buying out of habit a particular brand
4. Brand Instance — In this stage consumers will not accept any substitute product
5. Brand Loyalty — Last stage in the branding process when consumers make repeat purchase of the same brand.
Phillip Kotler has listed various questions to be considered for making decisions, especially for consumer products:
1. Should product be branded at all?
2. Who should sponsor the product?
3. What quality should be built into the brand?
4. Should the product be individually branded or family branded?
5. Should two or more products be developed in the same product category?
6. Should the established brand be given a new meaning?
This depends on the following factors:
1. Nature of the product.
2. Type of the outlet assigned for the product.
3. Perceived advantages of branding.
4. Estimated cost of developing the brand.
Historically, it has been found that brand development is closely correlated with increase in disposable income, sophistication of distribution system and increasing size of the national market. These trends are manifest in India also at the moment.
Example:
A few years back, nobody could have thought of selling branded rice or refined flour in India. But several firms in the recent past have been successful even in such product-categories. These are- SHAKTI BHOG ATTA, ATHITITI BHOG ATTA, and LAL QILA RICE.
Branding – Brand Equity
The definition of brand equity is often confused and more often it is reckoned as brand image. Experts, however, feel that the two are distinct.
The brand, as it is defined at J. Walter Thompson, exists simultaneously in the rational, emotional and sensual realms of an individual/consumer. A brand’s equity hence, according to the agency, refers to the latent capacity of the brand to influence the behaviour of the beholder by evoking a specific set of thoughts, feelings, sensations and associations.
The word “latent” is important because it implies that the brand’s equity is in the brand’s potential to continuously influence the behaviour of those who behold the brand, rationalising their purchase behaviour and thus stabilising the demand for an existing product, or expanding their purchase behaviour to create a demand for new products.
An attempt to measure the brand equity, according to the agency, is to audit all dimensions, i.e., rational, emotional, sensual and moral, within which a brand exists in the minds of the beholder as well as relative power of those dimensions.
Brand equity feels analysts can be measured by its effectiveness, i.e., the total number of people who have thoughts, feelings or sensations evoked by the brand, its comprehensiveness, the generalisability of the thoughts, feelings and sensations evoked by the brand; its intensiveness, the strength of the thought, feelings and sensation evoked by the brand.
Alexander Biel, however, argues that brand equity does deal with the value, but needs to be defined in economic terms, of a brand beyond the physical assets associated with its manufacture or provision.
He argues that while brand image is a concept originated and “primed” by marketers and advertising professionals, the idea of a brand having an equity has exceeds its conventional asset value is a notion that was developed by financial people. Underlying a brand’s equity is the concept of what is referred as “consumer franchise”, “loyalty”, etc.
Brand equity, according to Biel, is considered the additional cash flow achieved by associating a brand with the underlying product or service. In the event of a merger or an acquisition of a brand, it usually is the expectation of the cash flow that commands a premium over the cost of developing the plant and infrastructure required to bring a new, competing brand to the market.
Although there are to identifiable characteristics of what constitutes a strong brand, there is great deal of agreement among analysts about strong brands. For sake of argument, we can say that Coca Cola, IBM, Apple, Sony, Revlon, New York Times, Time, Times of India and Tatas are strong brands while Canada Dry, Onida, WIPRO, Tips and Toes, The Pioneer are not so.
Experts feel that brand image drives brand equity. While brand equity has come to stand for a financial concept associated with the valuation placed on a brand, it is useful to recognise that the “equity of a bands is driven by brand image, customer concept”. Any expectation of cash flow enjoyed by a successful brand undoubtedly depends on the consumer behaviour which, in turn, is driven by perceptions about a brand.
Branding – Brand Image
What really drives a consumer to a product when there are a plethora of similar products? As a starting point, suggest experts, the image of a brand can be described as the cluster or attributes and associations that consumers connect to the brand name. The volked association can be both tangible based on reason or “hard” facts such as – attributes, like speed, premium, price, user friendliness, length of time in business, frequency like, number of flights ip a day or networking, etc., or intangible, based on softer or emotional attributes, like excitements, trustworthiness, fun, dullness, masculinity or femininity and youthfulness, etc.
At times, one finds relating to the same category products differently by consumers. Apple Macintosh is associated with youthful ingenuity, while IBM is generally linked to efficiency.
Image, according to analysts, has three components, viz., the image of the provider of the product/service or the corporate image; the image of the user; and the image of the product/service itself. The relative contributions of these components vary by product category and by brand.
(a) Image Based on Personality and Character:
Brands are often bought on the basis of “who” they are and- “what” they are. Customers will have no difficulty in identifying who might smoke Marlboro cigarettes, weak Cartier watches, use Elizabeth Arden cosmetics or drive a Mercedes Benz. In recent times Omega watches are endorsed by famous actress Cindy Crawford.
(b) Visual Representation:
Brand images have very strong non-verbal components. Visual images remain etched and evoke instant memory. The “bat wing” shape on the leather badge evokes the association of Levi’s jeans and the picture of “Maharaja”, of Air India airlines.
(c) Hard and Soft Attributes:
Each product depends on some appeal. These can be tangible or intangible. A BBDO study in 1998 that asked of consumers to estimate the extent to which leading brands in a category were truly different or the same interestingly revealed that consumers were far more likely to find differences in product categories that rely on emotional appeal than those that rely on rational appeal.
Beer and cigarettes relying on emotional appeal were far more remembered that rational appeal for cleaning products, found the BBDO study. Some of the reasons for this could be that functional differences among similar product categories are marginal, stiff competition and technological advances render the claims short-lived.
The softer attributes or the intangible characteristics associated with products not only give a distinct positioning but are remembered for emotional appeal.
Branding – Trade Marks and Brand Names
Trademarks and brand names are much more than mere signs, symbols or names. They communicate a lot. The brand has a great marketing significance. A brand name is the title given to a product by its manufacturer which must be distinguished from the trade name, which is the name of business firm.
For example, “Chayvanprash, Lal Dant Manjan, Amla Kaish Tail, Hajmola”, “Odomos”, “Odonil” are the brand names of the products manufactured by Dabur. The trade name is “Dabur”.
(1) Trade Marks:
A brief study of trademarks is appropriate here, for trademarks and trade characters are used in advertisements. First, let us understand what a trade mark is. It is a name, Symbol or other device identifying a product, officially registered and legally restricted to the use of the owner or manufacturer.
A brand name differs from a trade mark in that it is that name, symbol, term, sign, or design which can be vocalised or which is utterable. Most manufacturers use both brand names and trademarks. Every ad should contain the trade mark because the advertiser wants the consumer to remember it.
It is the trade mark which is an important element in the product’s brand image, and therefore, it is essential to have distinctive and easy to remember trade mark. In addition to brand names and trademarks, many marketers use trade characters, which are nothing but various symbols in the form of animals, people associate their products with themselves with the objective of enhancing their memorabilia in the consumer’s mind.
Airlines normally have a trade character of one type of bird or the other, indicative of its flights, which are as smooth and perfect as those of birds. Of course, Air India has the trade character of the Maharaja, which indicates the royal touch in its services. Trade characters do have an advertising significance; and they, too, appear in advertisements.
(2) Family Brand:
(a) It is cost effective in as much as it reduces product launch costs and also the promotional expenses incurred on a continuing basis. The success of one brand when well-promoted gives a push to the entire product line. Management of trade channel also is easier. In tyre marketing this approach is highly successful.
(b) For products of uneven quality, this approach is dicey proposition. Even in markets showing variations in consumer profiles, this approach is not useful.
(c) Each product is denied a special identity which can go a long way to make it click.
(3) Individual Brand:
(a) Individual brand evokes associations and imageries. These psychological factors influence the buying decision.
(b) Even if the product fails, the effects are restricted to that product only. They are not: transferred to the whole product line.
(c) Costlier Strategy.
(d) No benefit to the brand of the organisation’s reputation.
(4) Modified Strategy:
These days companies tend to brand the products individually, but also give prominence to the company’s name or logo in all promotional efforts and products packaging. For instance, A TATA PRODUCT is a legend that goes with every individual brand name of Tata Oil Mill Co. (TOMCO).
Some companies adopt brand extension strategy, by introducing similar or dissimilar products, e.g., Nirma toilet soaps. Some organisations decide several brand names of the same product where each brand has it is own following. The brands compete amongst themselves. Soap manufacturers follow this type strategy.
Branding – Branding Strategy
Brands and brand relationships are of increasing importance to practitioners and of continued significance to researchers. The environment of increased communication that continues to develop as a result of new and improved technology, together with the increasing use of brand extension, co-branding and other associative techniques and effects, is resulting in an increasingly complicated set of relationships between brands.
A brand community is a specialized, non- geographically bound community, based on a structured set of social relationships among admirers of a brand. It is specialized because at its center is a branded good or service. Like other communities, it is marked with a shared consciousness, rituals and traditions, and a sense of moral responsibility.
Each of these qualities is, however, situated within a commercial and mass-mediated ethics, and has its own particular expression. Brand communities are participants in the larger social construction of the brand and play a vital role in its ultimate legacy.
In one of the earliest papers to investigate branding, Gardner and Levy (1955) suggested that the brands were selected when the clusters of values represented by a brand matched customers’ rational and emotional needs, thus enabling them to reinforce and communicate the aspects of their personality.
While Culliton’s (1948) view of the executive as an artist or ‘mixer of ingredients’ is still generally accepted, there has been considerable discussion of the interpretations by Borden (1964) and McCarthy (1964) that classified the mix into a number of ‘P’s.
Duncan and Moriarty (1998) point out that each of the “new generation marketing approaches – customer- focused, market-driven, outside-in, one-to-one marketing, data-driven marketing, relationship marketing, integrated marketing, and integrated marketing communications… emphasize two-way communication through better listening to the customers and the idea that communication before, during and after transactions can build or destroy important brand relationships”.
Yoo, Donthu, and Lee (2000) showed that there were strong links between marketing mix elements and brand equity, both positive and negative. Frequent price promotions reduced brand equity, while high advertising spending, price, distribution intensity and good store image were related to high brand equity.
Duncan and Moriarty (1998) showed that increase in the interactivity that is made possible by new technology such as the Internet makes communication an even more important element in marketing than it has been in the past. There is evidence that the on-line environment helps a service brand to build dialogue and strengthen the motivation of customers to the service offering and that the control of an on-line brand by its owner is necessarily looser than in traditional environments.
By this we mean that the increased communication between customers facilitated by the Internet can increase their involvement with a product and allow them to co-produce more value, so that greater transparency, hitherto associated with strong downward pressure on prices, can be used to advantage.
Branding – Brand Building Strategies
Strategically, the brands are managed separately and independently. On some occasions, the brands are introduced in the market on ad hoc basis. This strategy requires decision-making to allocate appropriately the resources to the identified brands. The brand personality is the core-measuring tool of the brand management exercise.
The brand management broadly consists of the following activities:
a. Brand launch
b. Brand leverage
c. Brand equity
d. Brand loyalty
A strong brand is a valuable asset and its management should include proper positioning along with visual presentation of the brand image through the trademark and trade dress. A trade dress of the brand is its nomenclature symbol style and colors put together on the product package. The trade dress of the brand need to be registered to protect imitations.
The brand equity consists of the strength of the brand along with the brand presentation strategy and its association with the user groups. The brand equity is largely reflected in the market behavior comprising market share, price, perceived quality, distribution efficiency, consumer loyalty and promotion strategy.
The brand leveraging may be defined as an exercise using an existing brand name to enter a new product category. Brand leveraging is potentially very attractive. It makes use of the existing consumer awareness, good will and loyalty. Such exercise of brand positioning is cost effective and reflects greater emphasis on brand.
The Proctor and Gamble adopted a brand leveraging strategy in the introduction of its sanitary hygiene product always. The P&G adopted similar strategy for introducing the liquid detergent Tide as a new category of product. In order to implement an effective brand strategy it is necessary to identify an appropriate category of branding.
Multinational companies in a competitive environment adopt the following brand strategies:
a. Specific product branding
b. Product line branding
c. Corporate branding
d. Combination branding
e. Private branding
The brand leveraging strategy by a company may be adapted through extending the product line category. The new product line can be formed by stretching it to cater the mass or class market consumers. Sometime the companies prefer to form a new product line instead of stretching the existing product line vertically or horizontally.
The co-branding or brand hiring strategies also provide the brand leverage which may give opportunities for more franchising and better sales promotion of the products and services. Whenever there is a new product line of the company, it should be decided whether to create a new brand name or use an existing name. The example may be cited of Coca-Cola Company when it first developed the diet cola drink it chose to use a new name-tab instead of capitalizing on its existing consumer brand to promote franchise by using the Diet Coke.
However, later in competition to Diet Pepsi the Coca-Cola Company countered its rival by using Diet Coke which is one of the best seller products now in the market. On the other extreme the company could have introduced a new brand in a new category, and presented it in the market as a solely new product.
The family brands are group of products sold under one label by a single company. Heinz, Del Monte and General Electric (GE) endorse a wide array of products with their own corporate name while the consumer goods companies like Proctor and Gamble (P&G), Nestle prefer to use separate brand names for each product.
The P&G has eleven brands in the heavy-duty detergent category in the United States of which two brands Tide and Ariel are best sellers in India. The US brands of P&G in this category are Cheer, Bold, Gain, Era, Dash, Oxydol, Solo, Dreft and Ivory Snow including Tide and Ariel.
The family brands have the advantage that advertising for one brand promotes the sales of all products carrying that particular label or attributes. The family brands also make it easier to introduce new products to the distribution channels and consumers.
However, the family brands offer a narrow distinction among the products of the same category and it is difficult for the product manager to create and maintain an identity for each product and then tie them together with a unifying trade name. This strategy is used by the General Motors as their cars are promoted under their own names and the GM symbol is used as common point of reference in marketing the products.
The national brands are identified as long standing in the competitive markets and wide spread distribution over the spatial and temporal market segments. The national brands are not very sensitive to the price gaps and the private labels. When a firm markets another brand in the existing category and protects its market positioning, the product is defined as flanker brand. The flanker brand is also known as fighting brand.
Such brand has low investment on advertising and the product is offered on cost price. The American Express sells its premium priced products as green, gold and platinum credit cards and the card named as Optima was brought to the market by the company as a fighting brand.
Such brands outwit the competing brands in a cost effective way. The private brands are more sensitive to the personal income and most of the retail stores set such brands for selling their grocery and consumer goods. The store based private labels or brands offer a number of advantages with high margins.
The branding strategy is also developed in accordance to the life cycle performance of the products and services. Many large companies consider different branding strategies at different levels of product life cycle-introductory, growth, mature and decline. The companies develop the brand in the introductory stage with an objective to establish the market position on the basis of quality, price, application and consumer preference.
The brand promotion needs more investment at this stage to build awareness and pull effect with the distribution channels and consumers. Effective brand building is necessary to introduce the product in the distribution network at the skimming price. In the second stage of the product life cycle which emphasizes growth of the product in the given market environment, the brand need to be reinforced with a focus on expanding the consumer segment.
In the process, the weaknesses of the product from the point of view preferences of consumers and distributors need to be identified. Accordingly, the strategies to be built to provide comprehensive information on products and services strengthen the channel relationship and competitive price. The maturity stage of the product requires the repositioning of the brand with an objective to secure the new market segments.
The marketing-mix strategies for product, promotion, place and price need to be developed accordingly by adjusting the product features, improve communication, comprehensive distribution and offering good price deals to the channels. At the stage of decline, the brand needs to be redesigned with a view to prepare the product for re-entering in the market.
The physical and applied properties of the product need to be improved and re-launched with better consumer awareness approaches at the point of purchase and demonstration levels. The distributors of the product may be reoriented towards the competitive advantages. Simultaneously, the efforts have to be made to clear the stocks of the old product well before the redesigned version of the product is formally launched in the market.
Branding – Advantages and Disadvantages: To Buyers and Manufacturer
Advantages to Buyers:
1. A brand name denotes uniform quality. With it, the consumer has the assurance of quality when he buys the products having a particular name.
2. Brand names make shopping easier. The customer has to spend less time and energy in buying, as brand names make product identification easier. Moreover, the customer has huts to go to the market and buy the products of the brands he prefers without wasting time.
3. Competition among brands can and does, in due course of time, lead to quality improvement.
4. Purchasing a socially visible brand gives immense psychological satisfaction to the buyer.
Disadvantages to Buyers:
1. The product price tends to go up.
2. Manufacturers, taking advantage of the popularity of their brand names, may reduce the quality gradually.
3. Branding creates confusion. Consumers are not able to decide which brand is the best in quality, because all the brands claim to be the best ever in quality.
Advantages to Manufacturer:
1. Branding is a means of product identification.
2. In a highly competitive market, brand names can carve out niches for themselves through product differentiation.
3. If brand loyalty can be developed through successful promotion, the sellers will be able to exert quasi-monopolistic power.
4. Branding gives greater bargaining power to the manufacturer with the dealers. This is because there is already a ‘pull’ in favour of the product; there may be no need for a great ‘push’ by the retailers.
5. Brand makes ‘recall’ easier. The stronger the brand, the stronger its recall among the people.
A brand plays an important role in improving and maintaining product quality. In fact a brand is a seal of consistency and reliability of quality. Brand also helps in better dissemination of product knowledge which can contribute to scientific and rational decision-making.
For example, the very word ‘Tata’ denotes an image of a robust responsiveness and indigenous product. ‘Lifebuoy’ denotes health soap. ‘Dove’ is recognised as a moisturising soap. Some brands become so popular that they become generic name for the product as, for example, Dalda for vanaspati and Surf for detergent.
Brands are even more important in the case of durable consumer goods and industrial products which require before and after-sales service and which have potential resale value.
Branded products are sold at a higher price than unbranded ones. ‘Captain Cook’ atta costs more than the wheat flour sold by the neighborhood grocer. Tanishq jewellery from Tatas costs 20 per cent more than a comparable piece sold by an ordinary jeweller.
Alesander L. Biel advances some arguments for elevating strong brands to the sacred category:
1. Strong brands enjoy higher loyalty than their weaker counterparts.
2. Strong brands offer a platform for brand extension that simply is not available to weaker brands.
3. Strong brands have more leverage with trade.
4. Strong brands are allowed to make a mistake and are given a second chance.
5. Strong brands have a very long life.
According to a survey by A & M magazine, the top 10 Indian brands are Vicks, Colgate, Dettol, Rin, Close Up, Ponds, Bata, Iodex, Doordarshan and Horlicks. Except Doordarshan, all brands are owned by MNCs. The top ten brands owned by wholly Indian companies are Doordarshan, Nirma, VIP luggage, Dalda, Tata, HMT, Usha, SBI, Godrej and Dabur.