Corporate Image and Brand Management Chapter 2 Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-1

Chapter Objectives 1.Why is a corporation’s image vitally important? 2.What kind of tactics and plans can be used to build an effective corporate image? 3.What are family brands, brand extensions, flanker brands, co-brands, private brands, brand equity, and brand recognition? 4.How are logos, packages, and labels related to image and brand management? 5.Which brand and product characteristics can be used to establish a positive position in the market? Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-2

Gucci Started in Italy Strong corporate and brand name Global name recognition In United States – seductive, high fashion band Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-3

Chapter Overview Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-4 Managing a corporation’s image Managing brands Issues associated with developing and promoting brand names and logos Importance of packaging and labels Developing brand and corporate positioning strategies

Components of image  Tangible  Intangible Role of corporate image  Consumer perspective  Business-to-business perspective  Company perspective Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-5 Corporate Image

Corporate Image Consumer Perspective Provide assurance  Unfamiliar settings  Little or no previous experience Reduce search time Provide psychological reinforcement Provide social acceptance Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-6

Corporate Image Company Perspective Extension of name to new products. Ability to charge more Consumer loyalty More frequent purchases by customers Positive word-of-mouth communications Attracts higher quality employees Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-7

Accurate reflection of firm Reinforcing image Rejuvenating image Changing image Negative press Corporate Image Development Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-8

Promoting the Right Image Creating the right image  Convey clear message  Fit with company and product Rejuvenating an image  Easier than changing image  Add new elements, but maintain current image Changing an image  Extremely difficult Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-9

Overt names Implied names Conceptual names Iconoclastic names Corporate Names Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-10

Should be easily recognizable Should be familiar Should elicit consensual meaning  Stimulus codeability Should evoke positive feelings Corporate Logos Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-11

Benefits of Logo Recognizability Aids in recall  Specific brands  Advertisements Reduces shopping effort Reduces search time Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-12

Provides quality assurance Reduces search time Allows company to charge more Reduces brand parity Consumers choose brands that are:  Salient  Memorable  Noteworthy Branding Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-13

Developing Strong Brands What are most compelling benefits? What emotions are elicited by brand? What one word best describes brand? What is important to consumers in the purchase of the brand? Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-14

Benefits of Brand Equity Higher prices Higher gross margins Channel power Additional retail shelf space Reduces customer switching behavior Prevents erosion of market share Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-15

Building Brand Equity Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Research and analyze what it would take to make the brand distinctive. 2.Engage in continuous innovation. 3.Move fast. 4.Integrate new and old media. 5.Focus on domination.

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-17 Measuring Brand Equity Brand Metrics Attitudinal measures Awareness Recall Recognition Brand power index (BPI) Most preferred brand (DSN Retailing) Revenue premium approach Brand metrics measure return on branding investments.

Family brands Brand extensions Flanker brands Private brands Types of Brands Ingredient Cooperative Complementary Co-Branding Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-18

Changes in Private Brands Quality improvements Lower prices Higher store loyalty Lower loyalty to manufacturer brands Increase in advertising of private brands Increase in quality of private brand store displays Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-19

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-20 Focus on core brands Increase advertising Introduce new products Focus on in-store selling, packaging Use alternative methods of marketing Source: Adapted from Vanessa L. Facenda, “A Swift Kick to the Privates,” Brandweek, Vol. 48, No. 31 (September 3, 2007), pp Strategies used to Combat Private Labels

Packaging Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-21 Traditional elements Protect the product inside Provide for ease of shipping, moving, and handling Provide for easy placement on store shelves Prevent or reduce the possibility of theft Prevent tampering New trends Meet consumer needs for speed, convenience, and portability Must be contemporary and striking Must be designed for ease of use

Labels Must meet legal requirements. Provide another marketing opportunity to sell the product. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-22

Attributes Competitors Use or application Price/quality Product user Product class Cultural symbol Product Positioning Consumer B-to-B International Markets 1.Relative to competition. 2.Exists in the mind of the consumer. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-23

Ethical Issues Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-24 Brand infringement Brand name becomes a generic term Domain or cyber squatting

International Implications Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2-25 Adaptation vs. standardization Standardization reduces costs Shrinking world  standardization High-profile, high-involvement – global brand Low-involvement products – local brand Packaging and labeling Image and positioning issues