A Perspective on Brands Brands are a bundle of relationships. A brand relationship brings customers and branding together. A good brand relationship is one benefiting the customer and the company. A customer relationship is a long-term strategy.

Building Relationships With Boots The Chemists

What is a “Brand”? A brand is more than a product. A brand is a perception. Customers form such perceptions from: Cues Signals Other types of communication messages Experiences  Both products and companies are considered brands. Customers have relationships with both products and companies.

What Does a “Brand” Do? A brand: Differentiates one product or company from another. Identifies the product and its source or maker. Often has a certain association and image.

How Do Brands Work? Basic principle of branding: Brands transform products – goods as well as services – into something larger than the product itself. Brand names and symbols help customers identify a product they have tried before and liked. So, they don’t need to treat every purchase like a first-time buy. The more specific the overall brand identity, the easier it is to recognize, and the more value it adds to the brand itself.

Brand Perception Despite consistent marketing and marketing communication efforts, a brand is seldom perceived in the same way by all customers. Customers use tangible attributes to decide whether competing products are different. Customers use intangible attributes to decide how they are different. Differentiation is an important factor in creating a link between a brand and its stakeholders.

Intangible Attributes Intangibles are important in brand building for two reasons: They are hard for competitors to copy. They are more likely to involve consumers emotionally.

The Brand Promise The essence of a brand is a promise. Basic principle of IMC: A company must manage customer expectations. This is the foundation of managing the brand promise and creating trust on which brands are built.

Brand Equity Two basic components determine a company or a brand’s value: Physical net assets – such as plants, equipment, and land Brand equity – the intangible value of a company beyond its physical net assets

Five Elements of Brand Equity Brand-name awareness Brand associations Perceived quality Proprietary brand assets Brand loyalty The first four elements determine the fifth element, brand loyalty, the “measure of the attachment that a customer has to a brand.”

Steps in Building a Brand Select a name and symbol. Create awareness and brand identity. Position the brand. Create a brand image. Create trust.

Cushman & Wakefield

Choosing a Brand Name Number one priority for a brand name is that it be memorable. Several characteristics that can help make a brand name more memorable: Benefit description Association Distinction Pronounceability

Choosing a Brand Symbol A brand symbol is called a logo. An effective logo: Communicates a brand’s image and positioning. Is simple, distinctive, and relevant. Brand symbols are often legally protected as trademarks.

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Apple

Branding Strategies Brand management today focuses on ensuring that the image and perception of a brand are maximized. Brand strategies are ways of maximizing the communication impact of brands. Critical elements of a branding strategy are: Brand Extensions Multi-tier branding Co-branding Ingredient branding Brand Licensing

Brand Extensions Once a company has created awareness and trust in a brand name, it can then practice brand extension. Advantages: Saves company time and money when introducing new products because brand is already known. If new product is successful, this success can reinforce the brand and thus providing it with even more brand equity. Creates more visibility. Disadvantages: Risks of diluting the power, meaning, and positioning of the brand. If new product fails, the failure could negatively affect the brand’s original products.

Multi-tier Branding Multi-tier branding is used for several reasons: To leverage the value in the corporate name To strengthen the corporate brand by connecting it to another successful product line To help differentiate other products sold by the same company as well as from competitors Corporate name often communicates trust and quality. Product name relates product’s purpose or performance.

Co-branding Co-branding uses two brand names that are owned by two separate companies. Co-branding is a contractual relationship between two marketing partners to provide customers value from both brands.

Ingredient Branding Another way to add value to a brand is by using ingredient branding. To be successful, the ingredient brand itself must have developed brand awareness.

Brand Licensing Brand licensing in essence, means renting a brand to another company while the parent company still owns the brand. IMC managers must monitor brand licensing to ensure brand maintains a consistent image.

Brand Relationships Fundamental principle of IMC: a variety of groups of people – known as stakeholders – can affect a company’s bottom line so they should be taken into consideration when creating and sending brand messages.

Stakeholder Groups

Stakeholder Support Customers determine sales and profits. Interactivity, to detect their changing wants, need, and concerns is critical for integrating customers into the company. Customers often view employees with whom they come into contact with as “being the company.” How employees treat customers delivers a highly influential message.

Other Stakeholders Marketing does not always have the primary responsibility for maintaining these relationships, but markers must be sensitive to how these groups will react to marketing communication efforts.  Other stakeholders include: Suppliers and distributors Competitors Media Governments and regulators Communities Financial community

Stakeholder Overlap Another basic principle of IMC: Stakeholders overlap. Marketers must make sure that brand messages are consistent and acceptable to all or most stakeholders.

Field of Stakeholders

Stakeholder Capital Creates Brand Value The broader and deeper support of various stakeholders, the stronger a brand will be. Stakeholder relationships are like another form of capital because they impact sales revenue and stock prices. Some non-customer stakeholders, such as the financial community and government, can have more impact on the bottom line than customers. Stakeholders interact with other stakeholders in a network of communication, and those messages may carry more weight than any ad or sales promotion.

Acquisition versus Retention A basic principle of IMC: a company should focus more on retention of current customers than the acquisition of new customers.

Trust Trust anchors a company’s reputation. Trust is a factor of both reality and perception. Important elements in creating trust: Satisfaction Consistency Accessibility Responsiveness Commitment Affinity Liking

Good Housekeeping

The Links that Connect a Customer to a Company

Levels of Relationship Intensity

Managing Expectations Unfulfilled expectations and undelivered promises damage stakeholder relationships. IMC seeks to create brand messages that make realistic promises and set expectations the brand can meet. Two reasons why brands fail: Expectations set too high. Products or supporting services are defective.

Loyalty Brand loyalty is when a person or company buys a brand regularly. The level of loyalty is determined by share of wallet, the percentage of a customer’s spending in a product category for one particular brand. Since few companies capture 100% of a customer’s share of wallet, heavy users are particularly important.

Profitable Brand Relationships Brand relationships have bottom-line results. Unless an organization’s brand relationships are profitable, it will go out of business.

Benefits of Brand Relationship Programs Several reasons why companies focus on building brand relationships: It costs less to sell to a current customer. Relationships amortize acquisition costs. A small decrease in defections means a large increase in sales. Lost customers can cause other customers to also leave. Relationships increase value of the customer. Loyal customers are more profitable. Capitalizing on advocates.

IMC Builds the Relationships that Build Brands One of the most important reasons for using IMC is to build trust in a brand. Brand communication impacts the quantity and quality of brand relationships, which in turn determine the value of a brand and a company’s brand equity.

St. Paul Insurance