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Choosing Elements to Build Brand Equity

Posted by 17 February, 2008 Comments Off on Choosing Elements to Build Brand Equity

Chapter 4 examines the elements that marketers can use to identify and differentiate a brand. Names, logos, symbols, characters, slogans, URLs, jingles and packages all influence a company’s ability to build awareness and image for a brand and, consequently, have a direct impact on the degree of positive brand equity that can be established. Brand elements can be judged on the merits of their brand-building ability by isolating the element in a consumer survey and measuring consumers’ response to the brand based solely on the isolated element. If the consumers infer or assume a certain valued association or response, the element is said to contribute positively to brand equity.

Six general criteria should govern a firm’s choice of brand elements. First, an element should be memorable, or easy to recognize and recall. Second, an element should be meaningful, or descriptive, persuasive, inherently fun and interesting, and rich in visual and verbal imagery. Third, an element should be likeable to consumers, in an aesthetic sense and in an emotional sense. Fourth, an element should be transferable within and across product categories, and across geographical and cultural boundaries. Fifth, an element should be adaptable, or flexible and capable of being updated over time. Sixth, an element should be protectable, both legally and competitively.

Next, the chapter discusses the benefits and drawbacks inherent in the choice of each type of brand element. For example, selecting a familiar-sounding name for a brand would likely lead to high recallability, but recognition often requires brand names to be different, distinct, or unusual. Fictitious or coined names are often used to satisfy this criteria. Brand characters are beneficial because they typically aid awareness, reinforce key brand strengths, add elements of fun, excitement, humor, etc., and can be transferred across product categories. Consumer associations with a brand character can be so strong, however, that they actually dampen awareness by dominating other brand elements. Also, brand characters must be updated over time.

The chapter ends by discussing how brand elements can be “mixed and matched” for maximum equity building. Brand elements must be mixed to achieve different positioning objectives, for instance. It is also important to match brand elements by ensuring that they harbor similarities that reinforce some shared meaning. Taken together, the entire set of brand elements makes up the brand identity, which reflects the contribution of all the elements to awareness and image.

Brand Focus 4.0 discusses legal issues for branding. These include trademark protection from counterfeit and imitator brands, trademark issues with generic names, and trademark issues with packaging.

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Bingo! We Have a Brand

Posted by 17 February, 2008 Comments Off on Bingo! We Have a Brand

Gala Clubs, the largest bingo operator in the UK with roughly 40 percent of the market, employs 6,700 employees who mostly work part-time. In 2000, Gala initiated an internal branding program called “The Gala Difference” which was intended to create a strong customer service commitment among employees. The Gala Difference cultivates the relationship between employee and customer by making highly personalized service a priority. The company encourages its employees to establish first-name relationships with customers.

Gala conducted extensive internal research to explore the attitudes of its employees toward the brand and the customers. The company distributed a survey to determine whether Gala employees were aware of what the brand represented and whether they considered themselves to be living the brand. More in-depth interviews and focus groups followed. The results of the research led to the following recommendations for Gala:

  • Re-inspire people around the brand and the role Gala had in changing perceptions of bingo
  • Work with club managers to create local business plans focusing on communications, business objectives, people management and service excellence
  • Create a continual learning experience for staff to raise awareness of customer service

To inform its employees of the Gala Difference program, the company’s sales and

marketing director sent a letter to each employee that explained the program and emphasized that “internal change is not brought about just by TV campaigns and marketing slogans, but by what employees deliver.” A booklet that contained the results of the survey was also distributed to employees in order to give them insights as to how their co-workers felt about the brand and to foster a sense of community. Additionally, Gala produced a video that described best practices for bingo and demonstrated what exceptional customer service entailed. Finally, the company set up “make a difference” training sessions at each club where general managers shared best practices and sought out “pockets of excellence” in each club.

Gala anticipated the Gala Difference would have a positive effect on the company’s bottom line. When the employees live the brand, Gala reasoned, they would bring about greater customer satisfaction. This would lead to increased admissions through repeat visits and word-of-mouth referrals, which in turn would generate increased profitability. In 2000, admissions rose 15 percent from 1999, while operating profits increased by 38 percent to $54 million.

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[1] www.gala-bingo.co.uk; Luciana Palmisano. “Eyes Down for a Full House.” Brand Strategy, October 2000

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What Makes a Brand Different?

Posted by 17 February, 2008 Comments Off on What Makes a Brand Different?

A recently reported study examined the factors that discriminate between a number of top brands.[1]  Specifically, category users were surveyed concerning their brand perceptions in the following product categories:

1)         Airlines (American, Continental, and United)

2)         Beer (Budweiser, Coors, and Miller)

3)         Coffee (Folgers, Maxwell House, and Nestle)

4)         Fast Food (Burger King, McDonald’s, and Wendy’s)

5)         Hotels (Hilton, Holiday Inn, and Marriott)

6)         Long Distance Telephone (AT&T, MCI, and Sprint)

7)         Soup (Campbell’s, Lipton, and Progresso)

Study respondents rated the brands on a number of functional, economic, psychological, social, and cultural factors. The results were analyzed with some advanced multivariate techniques to yield a perceptual space. Several observations are relevant. First, brand type can be more important than category to the positioning of a brand. Thus, Campbell’s soup may have as much in common in many ways with Maxwell House coffee as with Lipton or Progresso soup. Second, within a category, there was a brand hierarchy in terms of the five factors that subjects rated. The functional and economic dimensions were the ones found to be most desirable; however, the dimensions most closely associated with brand choice dealt with the cultural, social, and psychological factors.

The researchers who conducted the study interpreted these findings as indication that an “equity hierarchy” existed with the stated economic and functional dimensions as a “cost of entry” base and the derived cultural, social, and psychological dimensions as the key brand choice differentiators. In other words, the study findings could be interpreted in terms of the positioning concepts presented here as stating that economic and functional characteristics are often points-of-parity associations and cultural, social, and psychological factors are often points-of-difference associations, at least as far as these generally mature, well-known brands go.



[1]James F. Donius, “Brand Equity: A Holistic Perspective,” ARF Brand Equity Conference, February 15-16.

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Brand Positioning and Values

Posted by 17 February, 2008 Comments Off on Brand Positioning and Values

This chapter deals in greater detail with brand positioning and the key role it plays in creating positive brand equity. Positioning refers to the place in consumers’ minds occupied by the brand. The positioning strategy a marketer adopts for a brand will influence the knowledge structures consumers develop.

The chapter addresses how ideal or desired brand knowledge structures can be defined with respect to brand positioning. This involves selecting a target market, segmenting the market, and evaluating the competition. With respect to competition, positioning the brand with points-of-parity and points-of-difference is discussed next. Points-of-difference are characteristics unique to the brand that help distinguish it from the competition, while points-of-parity may be shared by other brands in a given category.

Once a brand has an established positioning, it may be necessary to update the positioning over time. The chapter discusses the laddering technique used to deepen the meaning of brand associations in the minds of consumers. The chapter also details how marketers can change positioning in response to competition by either doing nothing, going on the offensive, or going on the defensive.

Next, the internal aspects of branding are explored. The chapter provides information on how to establish brand values. Marketers can use a mental map to represent all associations and responses consumers have regarding the brand. The core brand values are the five or ten most important attributes or benefits of the brand that appear on the mental map. A brand mantra can capture the core brand values and provide the essence of the brand in a short phrase. Next, the importance of internal branding is discussed.

Brand Focus 3.0 at the end of the chapter details the process of a brand audit, an important informational and diagnostic tool to help marketers determine the overall state and health of the brand. The two steps of the brand audit, the brand inventory and the brand exploratory, provide marketers with a complete picture of the brand and consumers’ perceptions of it.  This Brand Focus can help students if they are conducting a brand audit project and can be highlighted as such in the course syllabus.

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To Be a Pepper Or Not to Be a Pepper…

Posted by 17 February, 2008 Comments Off on To Be a Pepper Or Not to Be a Pepper…

Finding the right brand personality for the right group of consumers can be challenging. A brand with the right personality can result in a consumer feeling that the brand is relevant and “my kind of product.” A consumer may be more willing to invest in a relationship or even develop a “friendship” with the brand as a result. Advertising in particular often needs to reflect the appropriate brand personality. The first question members of the creative department in an ad agency often ask a new client is, “what is the personality of the brand?” The answer that is given often takes on great importance as they develop the ad campaign.

Defining the target market can have profound implications on the resulting positioning. The extent to which users and non-users agree can provide strategic direction. Dr Pepper is an unusual tasting soft drink with an unusual name. Its first major ad campaign stressed that it was “America’s Most Misunderstood Soft Drink,” establishing the brand as a feisty, irreverent underdog that stood out from the crowd. Later ads repositioned the brand, however, in different ways.

For example, to capitalize on its growing popularity, the “Be a Pepper” campaign was launched. The mainstream shift created problems because although some loyal Dr Pepper drinkers still saw the brand as original, fun, and offbeat, in spite of the advertising, others rejected the new mainstream appeal. Recognizing this shift, Dr Pepper returned to a campaign stressing the brand’s individuality by urging consumers to “Hold Out for the Out of the Ordinary.” The shift brought new and old users into the fold and led to sales growth in the 1980s. More recently, however, Dr Pepper has returned to a more mass-market appeal, invoking heart-tugging images of small-town America. This shift created an opportunity for the brand to recapture its heritage with these underdog supporters. Ads in the 1990s proclaimed that the brand was “Just What the Dr. Ordered.”

The small-town imagery appealed to consumers, and Dr Pepper grew at a seven percent annual rate between 1990 and 1999. During that same interval, the brand doubled shipments of its product, which reached 5 billion cases in 1999. The company continued with a feel-good campaign featuring the jingle “Dr Pepper Makes the World Taste Better.” In 2000, Dr Pepper’s share of the soft-drink market held steady at 6.2 percent – good enough for sixth place in the category – while two of the top five soft drink brands saw their share fall. 2001 saw a new campaign themed “Be You” featuring popular singer Garth Brooks.

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[1] Theresa Howard. “With Dr Pepper, 7UP Both Clicking, Bottlers Are Ready for Flavor Crusade.” Brandweek, October 11, 1999. Ronald Alsop, Dr Pepper Is Bubbling Again After Its ‘Be a Pepper’ Setback, Wall Street Journal, September 26, 1985, p. 33. Betsy Sharkey, “David Naughton: Wouldn’t He Like to Be a Pepper II?” ADWEEK, May 16, 1988, p. 10. Kevin Goldman, “Dr Pepper Wraps Ads in Stars and Stripes,” Wall Street Journal

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Australians Know Beer — Or Do They?

Posted by 17 February, 2008 Comments Off on Australians Know Beer — Or Do They?

The reality is that in many product categories, brands are not that different in their actual product performance. Australians are well-known for their beer-drinking loyalty and prowess. Australians have extremely strong and well-defined brand preferences, often based on regional differences. In Queensland, XXXX reigns supreme where in the state of Victoria, beer drinkers ask for Victoria Bitter (VB). The only strong national brand is Foster’s Lager, which has also been the recipient of a considerable financial investment to take advantage of its Australian heritage to develop markets worldwide.

Many Australian breweries make more than one beer, supporting them with different marketing programs and targeting different market segments. For example, the large Carlton and United Breweries (CUB) makes both Foster’s Lager and Victoria Bitter. Recently, the Sydney Morning Herald reported that Castlemaine Perkins, a rival brewer to CUB, issued a press release claiming that examination and analysis of data on CUB’s Foster’s Lager and Victoria Bitter beers from four sources over a five year period showed that the only consistent variation between the two beers was that VB had a higher color content!

Specifically, the press release reported that qualified chemists had examined six flavor profiles of the beers and concluded they showed similar analytical patterns. A spokesman for the analysts said the tests were standard industry ones using a technique called “wet chemistry” and included specific gravity (for the fullness in a beer), bitterness, pH, color, alcohol, head retention, carbonation, haze stability, aroma tests and carbohydrate tests.

CUB’s head brewer in Brisbane, Noel Jago, complained of an opposition smear campaign but admitted that most of CUB’s full strength beers were similar and “reasonably close in many aspects.” He maintained, however, that although the same hops, sugar, malt, and yeast were used in making the two beers, the difference was in the combination of basic ingredients. He also noted that the carbon dioxide, specific gravity and other normal parameters were similar, but the fine tuning in fermentation and filtration made the difference.

“There is not a hell of a difference in taste but the difference is there,” Jago said. He said anyone who doubted the difference in the beers was entitled to “come and see them.”

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Customer-Based Brand Equity

Posted by 17 February, 2008 Comments Off on Customer-Based Brand Equity

This chapter defines the concept that is the focus of the book. Customer-based brand equity (CBBE) is the differential effect that brand knowledge has on consumer response to the marketing of that brand. Brand knowledge is a function of awareness, which relates to consumers’ ability to recognize or recall the brand, and image, which consists of consumers’ perceptions of and associations for the brand. Building awareness requires repeatedly exposing consumers to the brand as well as linking the brand in consumer memory to its product category and to purchase, usage and consumption situations. Creating a positive brand image requires establishing strong, favorable and unique associations for the brand.

The chapter outlines the important contribution of brand knowledge to brand equity. Brand knowledge is composed of brand awareness, which is itself a function of recognition and recall, and brand image, which reflects the associations consumers hold for the brand in memory.

Brand awareness is important because 1) it is a necessary condition for inclusion in the set of brands being considered for purchase, 2) in low-involvement decision settings it can be a sufficient condition for choice, and 3) it influences the nature and strength of associations that comprise the brand image. Awareness can be heightened by increasing consumer exposure to the brand and by linking the brand to product category, consumption and usage situations.

A brand’s image reflects all the associations consumers have for a brand in memory. The strength, favorability and uniqueness of the associations affect the response consumers will have to the brand and to its supporting marketing activities. Associations can be about attributes and benefits of the brand, or attitudes toward it. Attributes, which are descriptive features of a brand, can relate to the actual physical components and ingredients of a brand (product-related) or to such things as the price, imagery, feelings and experiences, and personality associated with the brand (non-product-related).

Benefits derived from a brand may relate to the functional advantages it provides, the symbolic information it conveys, or the experiential feelings it produces. Attitudes, which represent the highest level of brand associations, reflect consumers’ overall evaluations of a brand and, consequently, often determine their behavior toward it.

The strength of associations depends upon the relevance of information consumers encounter about the brand and the consistency with which the information is presented over time. Favorability is a function of the desirability or value of the associations in attitude formation and decision-making, and of their deliverability or performance probability.

The chapter then outlines the Customer-Based Brand Equity Model, which maintains that building a strong brand involves a series of logical steps: 1) establishing the proper brand identity, 2) creating the appropriate brand meaning, 3) eliciting the right brand responses, and 4) forging appropriate brand relationships with customers. Specifically, according to this model, building a strong brand involves: 1) establishing breadth and depth of brand awareness; 2) creating strong, favorable, and unique brand associations; 3) eliciting positive, accessible brand responses; and 4) forging intense, active brand relationships. Achieving these four steps, in turn, involves establishing six brand building blocks – brand salience, brand performance, brand imagery, brand judgments, brand feelings, and brand resonance.

The strongest brands excel on all six of these dimensions and thus fully execute all four steps in building a brand. With the CBBE model, the most valuable brand building block, brand resonance, occurs when all the other core brand values are completely “in sync” with respect to customers’ needs, wants, and desires. In other words, brand resonance reflects a completely harmonious relationship between customers and the brand. With true brand resonance, customers have a high degree of loyalty marked by a close relationship with the brand such that customers actively seek means to interact with the brand and share their experiences with others. Firms that are able to achieve resonance and affinity with their customers should reap a host of valuable benefits, e.g., greater price premiums and more efficient and effective marketing programs.

The chapter concludes by describing some of the implications of the CBBE model: consumers own brands, brand managers should not take shortcuts in building a brand, brands should appeal to consumers’ rational and emotional sides, brands should have richness in order to facilitate strong bonds with consumers, and achieving brand resonance should be a key point of focus for marketers.

Brand Focus 2.0 details the advantages of creating a strong brand. These include greater loyalty and less vulnerability to competitive marketing actions and crises; larger margins; greater trade cooperation and support; increased marketing communication effectiveness; possible licensing opportunities; additional brand extension opportunities; and a number of other advantages.

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Branding Energy

Posted by 17 February, 2008 Comments Off on Branding Energy

Branding Energy2

Deregulation of the energy industry in some states during the mid-1990s enabled energy companies to compete for retail customers. The competition led many companies to step up their marketing programs in efforts to reach consumers recently empowered with the right to choose their energy provider. Spending on advertising in the energy industry rose from $80 million in 1996 to $180 million in 1997. Several companies also changed their names to make them more consumer-friendly, as when Panhandle Eastern became PanEnergy and Natural Gas Clearinghouse changed its name to NGC and later became Dynegy (for “Dynamic Energy”). Some power companies began offering loyalty programs while others appealed to consumers with cross-promotions with other utilities such as telephone and plumbing.

One of the first companies to make a significant investment in raising its public profile was Cinergy Corporation. In 1995, the company signed a $6 million, five-year deal to rename Cincinnati’s Riverfront Stadium as Cinergy Field. Right before the deal was made, name recognition of the company stood at 50 percent in the greater Cincinnati area. Nine months after the renaming, name recognition in Cincinnati rose to 94 percent. Because of national television coverage for football and baseball, the Cinergy name became known all over the nation. Another energy company, Edison International, signed a $30 million, 20-year deal with the Walt Disney to rename the Anaheim Angels “Big A” stadium Edison International Field.

Energy companies also used traditional advertising methods to build brand awareness. Following its 1998 name change, Dynegy was still relatively unknown among financial analysts and wholesale energy buyers according to a 2000 brand awareness study conducted by the company. The company suffered from a low-profile image despite the fact that it was one of the top three transporter’s in each interstate gas pipeline in North America and had annual revenues of $29.4 billion in 2000. To raise awareness, Dynegy debuted its first national television advertising campaign in 2001, comprised of several 30-second spots that used humor to illustrate the company’s services. In one ad, an actress playing a Dynegy employee arranges food on the dinner table so it resembles a power grid. Subsequent surveys revealed that recognition of the Dynegy brand increased significantly.

Power company’s emphasis on marketing did not necessarily lead to a change in consumer behavior. In the two largest deregulated states, California and New York, only two percent of consumers switched utility companies. Allan Adamson, the managing director of brand expert Landor Associates, said of the energy industry, “This is a very difficult category to brand. Coming up with anything that’s differentiating to customers beyond consistent power delivery is hard.” This may help explain why spending on advertising in the category peaked at $180 million in 1997. In 2000, only three power companies (Enron, Southern, Pacific Gas & Electric) had ad budgets that exceeded $10 million.

Further troubles for the energy industry occurred when energy giant Enron, the leading energy marketer in the world and the seventh largest company in the U.S., declared bankruptcy in December 2001. Enron had been a major advertiser, boasting the largest ad budget of all the national utility companies at $18 million in 2000. Enron also sponsored a stadium called Enron Field in Houston, where baseball’s Astros play. After investors and analysts raised questions about Enron’s business model, however, it was revealed that Enron had employed unorthodox accounting principles to misstate earnings. The company could not recover when credit rating companies downgraded Enron’s debt to junk status in November 2001.

Enron’s woes caused concern for the fate of the energy trading industry. Dynegy’s stock fell 37 percent in the three weeks after it abandoned a rescue acquisition of Enron. Share prices for energy firms slumped in the wake of Enron’s collapse. One energy consultant asserted, “Without a doubt, Enron’s collapse has given the energy trading industry a black eye.” Other energy companies tried to shake the stigma. Dynegy CEO, Chuck Watson, predicted that the intense focus on the energy industry would help the major players by forcing weaker competitors to exit the business, and insisted that the “Enron failure [wasn’t] the failure of the energy merchant business.” Other energy trading companies lined up to assure consumers that Enron’s troubles were not indicative of an industry-wide problem. A spokesperson for California-based Calpine said, “Calpine is not another Enron.”

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[1][1]Adrian Room, Dictionary of Trade Name Origins, Routledge & Kegan Paul, 1982.

[1] Neil Weinberg and Daniel Fisher. “Power Player.” Forbes, December 24, 2001, p. 53-58; Bethany McLean. “Why Enron Went Bust.” Fortune, December 24, 2001, p. 58-72; Charlene Oldham. “Energy Traders Tidy Up.” Dallas Morning News, December 18, 2001, p. 1D; Todd Wasserman. J. Dee Hill. “Feller Creates Dynegy’s Premiere TV Campaign.” Adweek, September 24, 2001, p. 4; Greg Hassell. “‘Screaming People’ Create Awareness.” Houston Chronicle, September 19, 2001, p. 1; “Where’s the Power Surge?” Brandweek, August 13, 2001, p. 31; Leonard S. Greenburger. “The Name in the Game.” Electric Perspectives, July 1, 1999, p. 52; Peter Fritsch and Lisa Brownlee. “Energy Firms Try To Create Image for the Invisible.” Wall Street Journal, August 28, 1996, p. B6

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Sony

Posted by 17 February, 2008 Comments Off on Sony

Sony (electrical equipment and manufacturer) Many Japanese trade names turn out to be taken simply from the surname of a company founder or an inventor. Sony is rather different. When Japan’s first transistor radio was produced by the Tokyo Tsushin Kogyo Kabushai Kaisha (company) in 1955 the directors understandably felt that they needed a much more ‘streamlined’ and international name for it than the full length company name. At first they considered “TTK, which was certainly better, but there already existed a TKK (Tokyo Kyuto KK, or Tokyo Express Co.) which would be confusing. Earlier, they had used ‘Tape-corder’ for their tape recorder and ‘Soni’ (from ‘sonic’) for this machine’s tape. Considering, ‘Soni,’ the directors felt that this would probably be mispronounced in English, as ‘so-nigh.’ But the international (Latin) base ‘son,‘ meaning ‘sound,’ was good, and an alteration of the final ‘i’ to ‘y’ would suggest ‘sonny,’ and give the name a homely, affectionate touch. If, however, the actual name was spelled ‘Sonny’ the Japanese would pronounce this as ‘son-ny,’ and this might be associated with the Japanese word for ‘loss,’ son. This would not do, since the radio was clearly intended to produce a profit! Finally, the variant Sony was decided on for the transistor, and the name passed to the company as a whole in 1958.

aReprinted from Adrian Room, Dictionary of Trade Name Origins, Routledge & Kegan Paul, 1982.

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Shell

Posted by 17 February, 2008 Comments Off on Shell

Shell (petroleum and manufacturer) The story of Shell began in the first half of the nineteenth century in the curio shop in East Smithfield, London, set up by a Jewish dealer, Marcus Samuel. Samuel’s children had fastened seaside shells to their empty lunch boxes on returning from a holiday, and the dealer made up a number of such boxes and labeled them with the names of the resorts the shells had come from. For the more sophisticated demands of his lady customers he imported fancy polished shells from abroad. His shop soon became known as the Shell Shop, and business expanded rapidly so that by 1830 Marcus Samuel had built up an international trade in oriental curios and copra, as well as shells. When barreled kerosene was added to his cargo list, the world-wide activities of the Shell Shop were consolidated as the Shell Transport and Trading Co. This was in 1897 when the firm had been taken over by Samuel’s son, also called Marcus. (Marcus père died in 1870, aged 73.) The company adopted the scallop as its trademark in 1904

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