Unit Two: Introduction to Brand Management

2-1. The Meaning of Brand

According to American Marketing Association (AMA) 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 co petitioners”.
A brand in short is an identifier of the seller or the maker. A brand name consists of words,
letters and/or numbers that can be vocalized. A brand mark is the visual representation of the
brand like a symbol, design, distinctive coloring or lettering. Mercedes Benz is a brand name and
the star with it is a brand mark.

Essentially, a brand is a promise of the seller to deliver a specific set of benefits or attributes or
services to the buyer. Each brand represents a level of quality. Irrespective of the fact from which
the brand is purchased, this level of quality can be expected of the brand. A brand is much more
complex. Apart from attributes and benefits, it also reflects values.

Note: Branding is the main tool marketers use to distinguish their products from the
competitions. Branding means the use of a name, term, symbol, or design—or a
combination of these—to identify a product of one seller or group of sellers and to
differentiate them from those of competitors.

2-2. Brand Management

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 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 can result from a combination of increased sales and increased price, and/or reduced COGS
(cost of goods sold), and/or reduced or more efficient marketing investment. All of these
enhancements may improve the profitability of a brand, and thus, “Brand Managers” often carry
line management accountability for a brand’s P&L profitability, in contrast to marketing staff
manager roles, which are allocated budgets from above, to manage and execute.
2-3. Why Do Brands Matter?
An obvious question is why are brands important? What functions do they perform that make
them so valuable to marketers? We can take a couple of perspectives to uncover the value of
brands to both customers and firms themselves.

A. Consumers
To consumers, brands provide important functions. Brands identify the source or maker of a
product and allow consumers to assign responsibility to a particular manufacturer or distributor.
Most important, brands take on special meaning to consumers. Because of past experiences with
the product and its marketing program over the years, consumers find out which brands satisfy
their needs and which ones do not. As a result, brands provide a shorthand device or means of
simplification for their product decisions.

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.
Thus, from an economic perspective, brands allow consumers to lower the search costs for
products both internally (in terms of how much they have to think) and externally (in terms of
how much they have to look around). Based on what they already know about the brand—its
quality, product characteristics, and so forth—consumers can make assumptions and form
reasonable expectations about what they may not know about the brand.

Consumers offer their trust and loyalty with the implicit understanding that the brand will behave
in certain ways and provide them utility through consistent product performance and appropriate
pricing, promotion, and distribution programs and actions. To the extent that consumers realize
advantages and benefits from purchasing the brand, and as long as they derive satisfaction from
product consumption, they are likely to continue to buy it.

B. Firms
Brands also provide a number of valuable functions to their firms. Fundamentally, they serve an
identification purpose, to simplify product handling or tracing. Operationally, brands help
organize inventory and accounting records. A brand also offers the firm legal protection for
unique features or aspects of the product. A brand can retain intellectual property rights, giving
legal title to the brand owner.

The brand name can be protected through registered trademarks; manufacturing processes can be
protected through patents; and packaging can be protected through copyrights and designs. These
intellectual property rights ensure that the firm can safely invest in the brand and reap the
benefits of a valuable asset.

We’ve seen that these investments in the brand can endow a product with unique associations
and meanings that differentiate it from other products. Brands can signal a certain level of quality
so that satisfied buyers can easily choose the product again. This brand loyalty provides
predictability and security of demand for the firm and creates barriers of entry that make it
difficult for other firms to enter the market.

2-4. The Types of Brand

The features of brand include:
a. Brand names: that part of a brand which can be vocalized.
 It is that part of a brand that can be spoken, including letters (GM, YMCA), words
(Chevrolet), and numbers (WD-40, 7-Eleven).

b. Brand mark/logo: that part of a brand which can be recognized but is not vocalized, such as a
symbol, design, or distinctive coloring or lettering.
• It is the elements of a brand that cannot be spoken. For example, the well-known
Mercedes-Benz and Delta Air Lines symbols.

c. Trademark: a brand or part of a brand that is given legal protection because it is capable of
exclusive appropriation. It is a legal term.
• It includes only those words, symbols, or marks that are legally registered for use by a
single company.

2-5. Differences between Brand and Product

Variables that indicate the difference between brand and product include:
1. Definitions
Concerning their definitions, a product is a specific item that different organizations sell in the
market to their customers with the sole purpose of making profits. Contrastingly, a brand is a
particular entity, which may include a company logo, symbol, or name that is used to contrast or
differentiate the products of one company to those of others. Precisely, a brand plays the role of
making product for a specific enterprise to be identifiable in the marketplace.

2. Time Horizon
It is important to note that, when a brand has been established, it stays forever in the minds of the
consumers while of the other hand; other upcoming products are likely to offer more satisfaction
than the current product can replace a product, which means that its time is limited.

3. Uniqueness
It is difficult to emulate or copy a brand whereas; a product is readily copied hence making
prototypes of similar products to be present in the market. Organizations have been competing
by copying each other’s products because they cannot reproduce the brand, which is a legal
trademark.

4. Source/Creators
A brand is created in the minds of the consumers after developing a perception that a particular
product can satisfy their needs. However, a product is designed and can only be sourced from the
manufacturer. Producers create new products after which they market them through their brand
names at a profit.

5. Role of Brand Vs. Products

A brand has the purpose of adding value or boosting the psychological perception of a consumer
because he or she owns a reputable product from a reputable company. On the other hand, a
product performs a specific and an express role, which may include covering the body, printing,
etc.
6. Appearance
It is difficult to see and touch a brand because it is formulated in the minds of customer and can
only be explained. However, it is possible to see and feel some of the product. Example:
Television while it is difficult to see and touch Coca-Cola brand.

2-6. Establishing a Sound Brand

As exciting and promising as this all sounds, composing an effective and memorable sonic
identity is a significant challenge. A lot of different factors go into developing a sonic identity.
Above all, the company’s brand codes need to be expressed through its sound branding. Even
small decisions – like whether to use major or minor keys, thirds or fifths and diminished or
augmented chords, as well as the choice of instruments – can significantly influence the overall
tenor of the brand’s sonic identity. The target group, along with their musical tastes and habits,
also need to be considered when developing the sound branding. As such, it is clear that if brands
want to benefit from an effective acoustic DNA, they need to engage sound branding
professionals to develop it.

2-7. The Benefit of Strong Brand

Building a strong brand is essential for any business looking to establish a solid reputation and
stand out from the competition. It can help you build trust with customers, increase your market
share, and drive sales. A strong brand can also improve your company's overall value, attract top
talent, and create a sense of unity among your employees.

1. Increases Brand Recognition

Brand recognition is how well your target audience, and potential customers, can recall your
company’s brand and identifies your products. It’s an indicator of how well your audience
differentiates your product from those of competitors. Take Starbucks, for example. Even if you
don’t drink their coffee, you probably recognize their brand. Their café has a glass case for
sandwiches and cake pops, with an open bottom for expensive bottled water and apple juice
boxes for kids. The café interior is a bit dark and dramatic. The logo on their coffee cup is some
sort of white and green woman in a circle. All to say, you wouldn’t walk into a Starbucks and
mistake it for any other café.

2. Improve Customer Loyalty to your Brand

Loyal customers generally spend more money on your product. Research shows that 57% of
customers spend more money on brands they’re loyal to. Loyal customers tend to be repeat
customers, too. They look forward to your next product release and follow you for product and
company updates. Customer loyalty is the natural effect of a continuously positive emotional
experience, satisfaction with your products, and the perceived value of a strong brand. It’s based
on an individual’s personal experience with a company. Loyal customers generally perceive your
product as being better than that of any other brand. Both Apple and Microsoft have a large
following, and both companies’ customers perceive their respective favorite brands as being
better than the other. Neither is right or wrong – it’s how they perceive the brands that really
matters.
3. Higher Advertising Effectiveness on Customers
Advertising effectiveness refers to the measure of how likely it is that your customer will
purchase your product after seeing your advertisement. The higher your advertising effectiveness
is, the more likely your customer is to purchase your product. Any advertisements that originate
from you – the ‘strong brand’ – will be met with curiosity and reliance. Think about the strongest
brands you know and how you feel when a new product comes out. When your brand is well
established, and the products are reliable, new product releases and promotions will make a
strong impact on your customers. Your brand – and its advertising – can more effectively spark
curiosity and excitement from your customers.

2-8. Strategic Brand Management

Strategic brand management is a tactic meant to support companies in their efforts to gain or
improve brand recognition, increase revenue and meet their long-term business goals. Choosing
the most effective brand management strategy for your organization may help you achieve these
items. Strategic brand management is the process of using words, images and techniques to show
customers what makes your brand unique. It helps establish a brand and promotes its products in
the financial marketplace. The word "strategic" means that the process is long term and
incorporates every aspect of the brand, across channels through continuous review and updating.
Brand management builds the unique identity of an organization and affects areas such as quality
and customer interactions. Some companies may use strategic brand management to get global
recognition or increase the perceived value of their products or services

The Strategic Brand Management Process

Strategic brand management involves the design and implementation of marketing programs and
activities to build, measure, and manage brand equity. Strategic brand management process has
four main steps. Let’s briefly highlight each of these four steps.

A. Identifying and Developing Brand Plans

The strategic brand management process starts with a clear understanding of what the brand is to
represent and how it should be positioned with respect to competitors. Brand planning uses the
following three interlocking models.
 The brand positioning model describes how to guide integrated marketing to maximize
competitive advantages.
 The brand resonance model describes how to create intense, activity loyalty relationships
with customers.
 The brand value chain is a means to trace the value creation process for brands, to better
understand the financial impact of brand marketing expenditures and investments.

B. Designing and Implementing Brand Marketing Programs

Building brand equity requires properly positioning the brand in the minds of customers and
achieving as much brand resonance as possible. In general, this knowledge building process will
depend on three factors:
 The initial choices of the brand elements making up the brand and how they are mixed and
matched;
 The marketing activities and supporting marketing programs and the way the brand is
integrated into them; and
 Other associations indirectly transferred to or leveraged by the brand as a result of linking it
to some other entity (such as the company, country of origin, channel of distribution, or
another brand).
Some important considerations of each of these three factors are as follows.
Choosing Brand Elements: The most common brand elements are brand names, logos, symbols,
characters, packaging, and slogans. The best test of the brand-building contribution of a brand
element is what consumers would think about the product or service if they knew only its brand
name or its associated logo or other element. Because different elements have different
advantages, marketing managers often use a subset of all the possible brand elements or even all
of them.
Integrating the Brand into Marketing Activities and the Supporting Marketing Program:
Although the judicious choice of brand elements can make some contribution to building brand
equity, the biggest contribution comes from marketing activities related to the brand. This text
highlights only some particularly important marketing program considerations for building brand
equity.

Leveraging Secondary Associations: The third and final way to build brand equity is to leverage
secondary associations. Brand associations may themselves be linked to other entities that have
their own associations, creating these secondary associations.

C. Measuring and Interpreting Brand Performance

To manage their brands profitably, managers must successfully design and implement a brand
equity measurement system. A brand equity measurement system is a set of research procedures
designed to provide timely, accurate, and actionable information for marketers so that they can
make the best possible tactical decisions in the short run and the best strategic decisions in the
long run. Implementing such a system involves three key steps— conducting brand audits,
designing brand tracking studies, and establishing a brand equity management system.
The task of determining or evaluating a brand’s positioning often benefits from a brand audit. A
brand audit is a comprehensive examination of a brand to assess its health, uncover its sources
of equity, and suggest ways to improve and leverage that equity. A brand audit requires
understanding sources of brand equity from the perspective of both the firm and the consumer.

D. Growing and Sustaining Brand Equity

Maintaining and expanding on brand equity can be quite challenging. Brand equity management
activities take a broader and more diverse perspective of the brand’s equity—understanding how
branding strategies should reflect corporate concerns and be adjusted, if at all, over time or over
geographical boundaries or multiple market segments.

Defining Brand Architecture: The firm’s brand architecture provides general guidelines about
its branding strategy and which brand elements to apply across all the different products sold by
the firm. Two key concepts in defining brand architecture are brand portfolios and the brand
hierarchy. The brand portfolio is the set of different brands that a particular firm offers for sale
to buyers in a particular category. The brand hierarchy displays the number and nature of
common and distinctive brand components across the firm’s set of brands.

Managing Brand Equity over Time: Effective brand management also requires taking a long-
term view of marketing decisions. A long-term perspective of brand management recognizes that
any changes in the supporting marketing program for a brand may, by changing consumer
knowledge, affect the success of future marketing programs. A long-term view also produces
proactive strategies designed to maintain and enhance customer-based brand equity over time
and reactive strategies to revitalize a brand that encounters some difficulties or problems.

Managing Brand Equity over Geographic Boundaries, Cultures, and Market Segments:
Another important consideration in managing brand equity is recognizing and accounting for
different types of consumers in developing branding and marketing programs. International
factors and global branding strategies are particularly important in these decisions. In expanding
a brand overseas, managers need to build equity by relying on specific knowledge about the
experience and behaviors of those market segments.