CHAPTER1:

BRANDS&BRANDMANAGEMENTKevinLaneKellerTuckSchoolofBusinessDartmouthCollege1.1Whatisabrand?FortheAmericanMarketingAssociation(AMA),abrandisa“name,term,sign,symbol,ordesign,oracombinationofthem,intendedtoidentifythegoodsandservicesofonesellerorgroupofsellersandtodifferentiatethemfromthoseofcompetition.”Thesedifferentcomponentsofabrandthatidentifyanddifferentiateitarebrandelements.1.2Whatisabrand?Manypracticingmanagersrefertoabrandasmorethanthat—assomethingthathasactuallycreatedacertainamountofawareness,reputation,prominence,andsooninthemarketplace.WecanmakeadistinctionbetweentheAMAdefinitionofa“brand”withasmallbandtheindustry’sconceptofa“Brand”withacapitalb.1.3Brandsvs.ProductsAproductisanythingwecanoffertoamarketforattention,acquisition,use,orconsumptionthatmightsatisfyaneedorwant.Aproductmaybeaphysicalgood,aservice,aretailoutlet,aperson,anorganization,aplace,orevenanidea.1.4FiveLevelsofMeaningforaProduct

Thecorebenefitlevelisthefundamentalneedorwantthatconsumerssatisfybyconsumingtheproductorservice.Thegenericproductlevelisabasicversionoftheproductcontainingonlythoseattributesorcharacteristicsabsolutelynecessaryforitsfunctioningbutwithnodistinguishingfeatures.Thisisbasicallyastripped-down,no-frillsversionoftheproductthatadequatelyperformstheproductfunction.Theexpectedproductlevelisasetofattributesorcharacteristicsthatbuyersnormallyexpectandagreetowhentheypurchaseaproduct.Theaugmentedproductlevelincludesadditionalproductattributes,benefits,orrelatedservicesthatdistinguishtheproductfromcompetitors.Thepotentialproductlevelincludesalltheaugmentationsandtransformationsthataproductmightultimatelyundergointhefuture.1.5Abrandisthereforemorethanaproduct,asitcanhavedimensionsthatdifferentiateitinsomewayfromotherproductsdesignedtosatisfythesameneed.1.6Somebrandscreatecompetitiveadvantageswithproductperformance;otherbrandscreatecompetitiveadvantagesthroughnon-product-relatedmeans.1.7Whydobrandsmatter?Whatfunctionsdobrandsperformthatmakethemsovaluabletomarketers?1.8ImportanceofBrandstoConsumersIdentificationofthesourceoftheproductAssignmentofresponsibilitytoproductmakerRiskreducerSearchcostreducerPromise,bond,orpactwithproductmakerSymbolicdeviceSignalofquality1.9ReducingtheRisksinProductDecisionsConsumersmayperceivemanydifferenttypesofrisksinbuyingandconsumingaproduct:Functionalrisk—Theproductdoesnotperformuptoexpectations.Physicalrisk—Theproductposesathreattothephysicalwell-beingorhealthoftheuserorothers.Financialrisk—Theproductisnotworththepricepaid.Socialrisk—Theproductresultsinembarrassmentfromothers.Psychologicalrisk—Theproductaffectsthementalwell-beingoftheuser.Timerisk—Thefailureoftheproductresultsinanopportunitycostoffindinganothersatisfactoryproduct.1.10ImportanceofBrandstoFirmsTofirms,brandsrepresentenormouslyvaluablepiecesoflegalproperty,capableofinfluencingconsumerbehavior,beingboughtandsold,andprovidingthesecurityofsustainedfuturerevenues.1.11ImportanceofBrandstoFirmsIdentificationtosimplifyhandlingortracingLegallyprotectinguniquefeaturesSignalofqualitylevelEndowingproductswithuniqueassociationsSourceofcompetitiveadvantageSourceoffinancialreturns1.12Caneverythingbebranded?Ultimatelyabrandissomethingthatresidesinthemindsofconsumers.Thekeytobrandingisthatconsumersperceivedifferencesamongbrandsinaproductcategory.Evencommoditiescanbebranded:Coffee(MaxwellHouse),bathsoap(Ivory),flour(GoldMedal),beer(Budweiser),salt(Morton),oatmeal(Quaker),pickles(Vlasic),bananas(Chiquita),chickens(Perdue),pineapples(Dole),andevenwater(Perrier)1.13AnExampleofBrandingaCommodityDeBeersGroupaddedthephrase“ADiamondIsForever”1.14Whatisbranded?PhysicalgoodsServicesRetailersanddistributorsOnlineproductsandservicesPeopleandorganizationsSports,arts,andentertainmentGeographiclocationsIdeasandcauses1.15SourceofBrandsStrength“Therealcausesofenduringmarketleadershiparevisionandwill.Enduringmarketleadershavearevolutionaryandinspiringvisionofthemassmarket,andtheyexhibitanindomitablewilltorealizethatvision.Theypersistunderadversity,innovaterelentlessly,commitfinancialresources,andleverageassetstorealizetheirvision.” GeraldJ.TellisandPeterN.Golder,“FirsttoMarket,FirsttoFail?RealCausesofEnduringMarketLeadership,”MITSloanManagementReview,1January19961.16ImportanceofBrandManagementThebottomlineisthatanybrand—nomatterhowstrongatonepointintime—isvulnerable,andsusceptibletopoorbrandmanagement.1.17Whatarethestrongestbrands?18TopTenGlobalBrandsBrand2006($Billion)2005($Billion)Coca-ColaMicrosoftIBMGEIntelNokiaToyotaDisneyMcDonald’sMercedes-Benz67.0056.9356.2048.9132.3230.1327.9427.8527.5021.8067.5359.9453.3847.0035.5926.4524.8426.4426.0120.001.19BrandingChallengesandOpportunitiesSavvycustomersBrandproliferationMediafragmentationIncreasedcompetitionIncreasedcostsGreateraccountability1.20TheBrandEquityConceptNocommonviewpointonhowitshouldbeconceptualizedandmeasuredItstressestheimportanceofbrandroleinmarketingstrategies.Brandequityisdefinedintermsofthemarketingeffectsuniquelyattributabletothebrand.Brandequityrelatestothefactthatdifferentoutcomesresultinthemarketingofaproductorservicebecauseofitsbrandname,ascomparedtoifthesameproductorservicedidnothavethatname.

1.21StrategicBrandManagementItinvolvesthedesignandimplementationofmarketingprogramsandactivitiestobuild,measure,andmanagebrandequity.TheStrategicBrandManagementProcessisdefinedasinvolvingfourmainsteps:1.Identifyingandestablishingbrandpositioningandvalues2.Planningandimplementingbrandmarketingprograms3.Measuringandinterpretingbr