Branding

2. INTRODUCTION TO BRANDING
Chao Onlamai
18/10/2019

3. Why Brand?
• Why do companies such as Coca-Cola,
Microsoft, IBM and Disney seem to achieve
global marketing success so easily? Why does
it seem such an effort for others?
• Why do we, as consumers, feel loyal to such
brands that the mere sight of their logo has us
reaching into our pockets to buy their
products?

4. The meaning of brands
• Brands are a means of differentiating a
company’s products and services from those
of its competitors.
• There is plenty of evidence to prove that
customers will pay a substantial price
premium for a good brand and remain loyal to
that brand. It is important, therefore, to
understand what brands are and why they are
important.

5. The Importance of Brands
McDonalds sums this up nicely in the following
quote emphasizing the importance of brands:
“…it is not factories that make profits, but
relationships with customers, and it is company
and brand names which secure those
relationships”
Businesses that invest in and sustain leading
brands prosper whereas those that fail are left to
fight for the lower profits available in commodity
markets.

6. Coca-Cola
• “If Coca-Cola were to lose all of its production-related
assets in a disaster, the company would survive. By
contrast, if all consumers were to have a sudden lapse
of memory and forget everything related to Coca-Cola
the company would go out of business.”
• Coca-Cola

7. What is a brand?
One definition of a brand is as follows:
“A name, term, sign, symbol or design, or a
combination of these, that is intended to identify
the goods and services of one business or group of
businesses and to differentiate them from those of
competitors”.
Interbrand - a leading branding consultancy -
define a brand in this way:
“A mixture of tangible and intangible attributes
symbolized in a trademark, which, if properly
managed, creates influence and generates value”.

8. • “Brand equity” refers to the value of a
brand. Brand equity is based on the
extent to which the brand has high
brand loyalty, name awareness,
perceived quality and strong product
associations. Brand equity also includes
other “intangible” assets such as
patents, trademarks and channel
relationships.
Brand Equity

9. Brand image
• “Brand image” refers to the set of beliefs that
customers hold about a particular brand.
These are important to develop well since a
negative brand image can be very difficult to
shake off.

10. Brand extension
• “Brand extension” refers to the use of a successful
brand name to launch a new or modified product in a
new market. Virgin is perhaps the best example of how
brand extension can be applied into quite diverse and
distinct markets.

11. Branding gives the seller several advantages
• Seller’s brand name and trademark provide legal
protection of unique product features
• Branding gives the seller the opportunity to
attract a loyal and profitable set of customers.
• Branding helps the seller segment markets.
• Strong brands help build corporate image,
making it easier to launch new brands and gain
acceptance by distributors and consumers.

12. Benefits of Branding to A BUYER
• Help buyers identify the product that they like/dislike.
• Identify marketer
• Helps reduce the time needed for purchase.
• Helps buyers evaluate quality of products especially if
unable to judge a products characteristics.
• Helps reduce buyers perceived risk of purchase.
• Buyer may derive a psychological reward from owning the
brand, IE Rolex or Mercedes.

13. BRANDS - BUILDING A BRAND
What factors are important in building brand
value?
Professor David Jobber identifies seven main
factors in building successful brands, as given next:

14. Quality
• Quality is a vital ingredient of a good brand. Remember
the “core benefits” – the things consumers expect. These
must be delivered well and consistently. The branded
washing machine that leaks, or the training shoe that
often falls apart when wet, or a watch which needs
frequent adjustments will never develop brand equity.
• Research confirms that, statistically, higher quality brands
achieve a higher market share and higher profitability
than that of their inferior competitors.

15. Positioning
• Positioning is about the position a brand occupies in a
market in the minds of consumers. Strong brands have a
clear, often unique position in the target market.
• Positioning can be achieved through several means,
including brand name, image, service standards, product
guarantees, packaging and the way in which it is
delivered. In fact, successful positioning usually requires
a combination of these things.

16. Repositioning
• Repositioning occurs when a brand tries to
change its market position to reflect a
change in consumer’s tastes. This is often
required when a brand has become tired,
perhaps because its original market has
matured or has gone into decline.

17. Communications
• Communications also play a key role in building a
successful brand. We suggested that brand
positioning is essentially about customer
perceptions – with the objective to build a clearly
defined position in the minds of the target
audience.
• All elements of the promotional mix need to be
used to develop and sustain customer perceptions.
Initially, the challenge is to build awareness, then
to develop the brand personality and reinforce the
perception.

18. First-mover advantage
• Business strategists often talk about first-
mover advantage. In terms of brand
development, by “first-mover” they mean
that it is possible for the first successful
brand in a market to create a clear
positioning in the minds of target
customers before the competition enters
the market. There is plenty of evidence to
support this.

19. Long-term perspective
• The need to invest in the brand over the long-
term is utmost essential. Building customer
awareness, communicating the brand’s
message and creating customer loyalty takes
time. This means that management must
“invest” in a brand, perhaps at the expense of
short-term profitability.

20. Internal Marketing
Finally, management should ensure that the brand is
marketed “internally” as well as externally. By this we
mean that the whole business should understand the
brand values and positioning. This is particularly
important in service businesses where a critical part of
the brand value is the type and quality of service that a
customer receives.
Think of the brands that you value in the restaurant,
hotel and retail sectors. It is likely that your favorite
brands invest heavily in staff training so that the face-
to-face contact that you have with the brand helps
secure your loyalty.

21. An Effective Brand Name
• Is easy to pronounce
• Is easy to recognize and remember
• Is short, distinctive, and unique
• Has a positive connotation
• Reinforces the product image
• Is legally protectable

22. Branding Strategies
Brand No Brand
Manufacturer’s
Brand
Private Brand
Individual
Brand
Family
Brand
Combi-
nation
Individual
Brand
Family
Brand
Combi-
nation

23. Manufacturers’ Brands Versus
Private Brands
Manufacturers’
Brand
Private
Brand
The brand name of a manufacturer.
A brand name owned by a wholesaler or a retailer.
Also known as a private label or store brand.

24. Types of brand
There are two main types of brand – manufacturer
brands and own-label brands.
Manufacturer brands
Manufacturer brands are created by producers
and bear their chosen brand name. The producer
is responsible for marketing the brand. The brand
is owned by the producer.
By building their brand names, manufacturers can
gain widespread distribution (for example by
retailers who want to sell the brand) and build
customer loyalty (think about the manufacturer
brands that you feel “loyal” to).

25. Private Label brands
Own-label brands are created and owned by businesses
that operate in the distribution channel – often referred
to as “distributors”.
Often these distributors are retailers, but not exclusively.
Sometimes the retailer’s entire product range will be
own-label. Own-label branding – if well carried out – can
often offer the consumer excellent value for money and
provide the distributor with additional bargaining power
when it comes to negotiating prices and terms with
manufacturer brands.

26. Advantages of Private Brands
• Earn higher profits
• Less pressure to mark down prices
• Ties customer to wholesaler or
retailer

27. Advantages of Manufacturers’ Brands
• Develop customer loyalty
• Attract new customers
• Enhance prestige
• Ensure dealer loyalty

28. Individual Brands Versus Family Brands
Individual
Brand
Family
Brand
Using different brand names for different
products.
Marketing several different
products under the same
brand name.

29. Branding Policies
• First question is whether to brand or not to brand.
Homogenous products are difficult to brand Branding
policies are:
• Individual Branding: Naming each product differently
P&G, facilitates market segmentation and no overlap.
• Overall Family Branding: All products are branded with
the same name, or part of a name, IE Nokia, promotion of
one item also promotes other items.
• Line Family Branding: Within one product line.
• Brand Extension Branding: Use one of its existing brand
names as part of a brand for an improved or new product,
usually in the same product category.
75% new products are brand extensions!!

32. 01 Apple • +9%
• 234,241 $m
• Apple revolutionized
personal technology
with the introduction of
the Macintosh in 1984.
Today, Apple leads the
world in innovation
with iPhone, iPad, Mac,
Apple Watch and Apple
TV. apple.com

33. 02 Google • +8%
• 167,713 $m
• Since the beginning,
Google’s goal has been
to develop services that
significantly improve
the lives of as many
people as possible. Not
just for some. For
everyone. google.com

34. 03 Amazon • +24%
• 125,263 $m
• Amazon is an e-
commerce and cloud
computing company,
guided by four
principles: customer
obsession, passion for
invention, commitment
to operational
excellence, and long-
term thinking.
amazon.com

35. 04 Microsoft • +17%
108,847 $m
• Microsoft enables
digital transformation
for the era of an
intelligent cloud and an
intelligent edge. Its
mission is to empower
every person and every
organization on the
planet to achieve more.
microsoft.com

36. 05 Coca-Cola • -4%
• 63,365 $m
• The Coca-Cola Company
is the world’s largest
total beverage
company, offering over
500 brands to people in
more than 200
countries. coca-
cola.com

37. 06 Samsung • +2%
• 61,098 $m
• Samsung’s vision is to
inspire the world and
create the future.
Inspire the world with
innovative technologies,
products and design
that enrich people’s
lives and contribute to
social prosperity by
creating a new future.
samsung.com

38. 07 Toyota • +5%
• 56,246 $m
• Toyota manufactures a
diverse lineup of
vehicles all over the
globe and is taking
great steps to develop
eco-cars, which will
help us become a low
carbon society. toyota-
global.com

39. 08 Mercedes-Benz
• +5%
• 50,832 $m
• Mercedes-Benz is the
luxury automotive
division of The Daimler
Group, a producer of
premium cars,
manufacturer of
commercial vehicles,
and pioneer of
engineering and
mobility. mercedes-
benz.com

40. 09 McDonald's • +4%
• 45,362 $m
• McDonald’s is the
world’s leading global
foodservice retailer
with over 37,000
locations in over 120
markets. Over 90
percent of McDonald’s
restaurants worldwide
are owned and
operated by
independent local
business men and
women.

41. 10 Disney
• +11%
• 44,352 $m
• The Walt Disney
Company, together with
its subsidiaries, is a
diversified worldwide
entertainment company
with operations in four
business segments:
Media Networks; Studio
Entertainment; Parks,
Experiences and
Consumer Products;
and Direct-to-Consumer
and International.

42. Here's how we calculate the power in a name
INTERBRAND TAKES lots of ingredients into account
when ranking the world's most valuable brands. To
even qualify for the list, each brand must derive
about a third of its earnings outside its home
country, be recognizable outside of its base of
customers, and have publicly available marketing
and financial data. One or more of those criteria
eliminate such heavyweights as Visa, Wal-Mart,
Mars, and CNN. Interbrand doesn't rank parent
companies, which explains why Procter & Gamble
doesn't show up. And airlines are not ranked
because it's too hard to separate their brands'
impact on sales from factors such as routes and
schedules.

43. Evaluation
 BUSINESSWEEK CHOSE Interbrand's methodology because it
evaluates brands much the way analysts value other assets:
on the basis of how much they're likely to earn in the future.
The projected profits are then discounted to a present
value, taking into account the likelihood that those earnings
will actually materialize.
 THE FIRST STEP IS figuring out what percentage of a
company's revenues can be credited to a brand. (The brand
may be almost the entire company, as with McDonald's
Corp., or just a portion, as it is for Marlboro.) Based on
reports from analysts at J.P. Morgan Chase, Citigroup, and
Morgan Stanley, Interbrand projects five years of earnings
and sales for the brand. It then deducts operating costs,
taxes, and a charge for the capital employed to arrive at the
intangible earnings. The company strips out intangibles such
as patents and management strength to assess what portion
of those earnings can be attributed to the brand.

44. Summary
FINALLY, THE BRAND'S strength is assessed to
determine the risk profile of those earnings
forecasts. Considerations include market
leadership, stability, and global reach—or the
ability to cross both geographic and cultural
borders. That generates a discount rate, which is
applied to brand earnings to get a net present
value. BusinessWeek and Interbrand believe this
figure comes closest to representing a brand's true
economic worth.