Firms with the largest BRAND VALUE in the world (WPP)

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Firms with the largest BRAND VALUE in the world (WPP)

Source: Managing Brand Equity David A. Aaker

What is Brand Equity? A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless. – Stephen King (WPP Group, London)

What is Brand Equity? Brand equity is a set of assets such as name awareness, loyal customers, perceived quality and associations that are linked to the brand and add value to the product or service being offered. Brand management team – responsible for the marketing program and its coordination with sales and manufacturing.

The Role of Brands A brand is a distinguishing name and/or symbols (such as logo, trademark, or package design) intended to identify the goods or services of either one seller or a group of sellers, and to differentiate those goods or services from those of competitors.

The Role of Brands A brand signals to the customer the source of the product, and protects both the customer and the producers from competitors who would attempt to provide products that appear to be identical.

The Role of Brands The idea is to move beyond commodities to branded products – to reduce the primacy of price upon the purchase decision, and accentuate the bases of differentiation. (The power of brands is indicted by what firms are willing to pay for them).

Dimensions of Brand Equity
Brand loyalty Brand awareness Perceived quality Brand associations in addition to perceived quality Other proprietary brand assets – patents, trademarks, channel relationships, etc

Brand equity creates value for the customer
Brand equity assets affect customers’ confidence in the purchase decision (due to either past-use experience or familiarity with the brand and its characteristics). Both the perceived quality and brand associations can enhance customers’ satisfaction with the use experience. The user (i.e. using Apple) can feel different.

Brand equity creates value for the firm
Enhance programs to attract new customers or recapture old ones, for instance try a new flavor will be more effective if the brand is familiar. The perceived quality, the associations and the well-known name can provide reasons to buy and can affect use satisfaction; reducing the incentive to try others. Brand equity will usually allow higher margins by permitting both premium pricing and reduced reliance upon promotions.

Brand equity creates value for the firm
Brand equity can provide a platform for growth via brand extensions. Brand equity can provide leverage in the distribution channel (shelf space and cooperation to implement marketing programs). Brand equity assets provide a competitive advantage that often presents a real barrier to competitors. For instance, an association (i.e. iPod - mp3 player)

Brand equity assets require investment to create, and will dissipate over time unless maintained

Brand Loyalty

Apple – luxury brand status

Brand Loyalty The loyalty of the customer base reduces the vulnerability to competitive action. Competitors may be discouraged from spending resources to attract satisfied customers. Higher loyalty means greater trade leverage, since customers expect the brand to be always available

Awareness of the brand name and symbols
People will often buy a familiar brand because they are comfortable with the familiar. A recognized brand will thus often be selected over an unknown brand. Brand must first enter the consideration set – it must be one of the brands that are evaluated.

Perceived quality Perceived quality will directly influence purchase decisions and brand loyalty. It can support a premium price, which, in turn, can create gross margin that can be reinvested in brand equity. Perceived quality can be the basis for a brand extension. If a brand is well regarded in one context, the assumption will be that it will have high quality in a related context.

A set of associations The specific associations linked to the brand name may provide credibility, and to some may stimulate confidence in the service. A life-style or personality association may change the use experience. A strong association may be the basis of a brand extension. If a brand is well positioned upon a key attribute in the product class (i.e. service or technological superiority), competitors will find it hard to attack, thus, an association can be a barrier to competitors.

Other proprietary brand assets
Such as patents, trademarks, and channel relationships. Brand assets will be most valuable if they inhibit or prevent competitors from eroding a customer base and loyalty. For instance, a trademark will protect brand equity from competitors who might want to confuse customers by using a similar name, symbol, or package. A patent can prevent direct competition. A distribution channel can be controlled by a brand because of a history of brand performance

What is the value of a brand?
Price premiums generated by the brand name The value of the brand name in a given year would be that price differential multiplied by the unit sales volume. Discounting these cash flows over a reasonable time horizon. Brand name and customer preference The value of the brand would be the marginal value of the extra sales that the brand name supports.

What is the value of a brand?
Replacement cost The cost of establishing a comparable name and business Brand value based upon stock price movements Using finance theory, use stock price as basis. The argument is that the stock market will adjust the price of a firm to reflect future prospects of its brand

Brand Loyalty If customers are indifferent to the brand, buy with little concern to the brand name; there is likely little equity. If, on the other hand, they continue to purchase the brand even in the face of competitors with superior features, price, and convenience, substantial value exists in the brand and perhaps in its symbol and slogans.

Brand Loyalty Brand loyalty is a measure of the attachment that a customer has to a brand. How likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features. As brand loyalty increases, the vulnerability of the customer base to competitive action is reduced. It is one indicator of brand equity, which is demonstrably linked to future profits, since brand loyalty directly translates into future sales.

5 levels of brand loyalty
The bottom loyalty level is the nonloyal buyer who is completely indifferent to the brand – each brand is perceived to be adequate and the brand name plays little role in the purchase decision. Whatever is on sale or convenient is preferred. This buyer might be termed a switcher or price buyer.

5 levels of brand loyalty
The second level includes buyers who are satisfied with the product or at least not dissatisfied. There is no dimension of dissatisfaction that is sufficient to stimulate a change especially if that change involves effort. These buyers might be termed habitual buyers. Such segments can be vulnerable to competitors that can create a visible benefit to switching.

5 Levels of brand loyalty
The third level are those who are also satisfied and, in addition, have switching costs – costs in time, money, or performance risk associated with switching. To attract these buyers, competitors need to overcome the switching costs by offering a benefit large enough to compensate the switching cost. This group might be called switching-cost loyal.

On the fourth level are those who truly like the brand. Their preference may be based upon an association such as a symbol, a set of use experiences, or a high perceived quality. Liking is often a general feeling that cannot be closely traced to anything specific. Segments at this level might be termed friends of the brand because there is an emotional/feeling attachment.

The top level are committed customers. They have a pride of being users of a brand. The brand is very important to them either functionally or as an expression of who they are. Their confidence is such that they will recommend the brand to others. A brand that has a substantial group of extremely involved and committed customers might be termed a charismatic brand.

Brand loyalty as one basis of brand equity
Brand loyalty is tied more closely to the use experience. Brand loyalty cannot exist without prior purchase and use experience. However, loyalty is influenced in part by the other major dimensions of brand equity, awareness, associations, and perceived quality. A key premise is that the loyalty is to the brand. If the loyalty were to a product rather than the brand, equity would not exist. Considering brand loyalty is a key, core bases of brand equity should help firms treat customers as the brand assets that they are.

The strategic value of brand loyalty
Reduced marketing costs Less costly to retain customers than to get new ones. Loyalty of existing customers represents a substantial entry barriers to competitors. Trade leverage Shelf space favors brands with large strong loyal followers (fast moving)

The strategic value of brand loyalty
Attracting new customers The acceptance of the brand by a relatively large customer base provides an image of the brand as an accepted, successful product. Awareness can be generated from the customer base. Time to respond to competitive moves. If a competitor develops a superior product, a loyal following will allow the firm time needed for the product improvements to be matched or neutralized.

Maintaining and enhancing loyalty
TREAT THE CUSTOMER RIGHT A product or service that works – as expected – provides a basis for loyalty, a reason not to switch. The goal is to have a positive interaction – to treat the customers as any person would like to be treated: with respect. STAY CLOSE TO THE CUSTOMER Focus groups can be used to see and hear real customers voice concerns. Just the act of encouraging customer contact can help send signals to both the organization and the customers that the customer is valued.

MEASURE / MANAGE CUSTOMER SATISFACTION Regular surveys of customer satisfaction/dissatisfaction to understand how customers feel and to adjust products and services. For customer satisfaction measures to have impact they need to be integrated into day-to-day management. CREATE SWITCHING COSTS reward loyalty directly, i.e. frequent flyers.

PROVIDE EXTRAS It is often relatively easy to change customer behavior from tolerance to enthusiasm just by providing a few extra unexpected services. SELLING TO OLD CUSTOMERS INSTEAD OF NEW ONES The most common mistake that firms make is to attempt to grow mainly by attracting new customers. The problem is that new customers are almost always difficult to attract.

What is needed here is a reduction of dissatisfied customers’ motivation to leave, and an increase in the switching costs of those who are satisfied.

Brand Awareness

Brand Awareness Brand awareness is the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category. A link between product class and brand is involved.

3 levels of brand awareness
Brand Recognition This lowest level is based upon an aided recall test. There needs to be a link between the brand and the product class, it need not be strong. Brand recognition is a minimal level of brand awareness. It is particularly important when a buyer chooses a brand at the point of purchase. Brand Recall Brand recall is based upon asking a person to name the brand in a product class; it is termed “unaided recall” because the responder is not aided by having the names provided.

3 levels of brand awareness
Top of the mind The first-named brand in an unaided recall task. A dominant brand is a brand that is the only brand recalled for a high percentage of the respondents.

Brand awareness may create value
The first step in the buying process often is to select a group of brands to consider – a consideration set. Brand recall can be crucial to getting into this group. The first firms that come to mind will have an advantage.

The role of brand recall / top-of-mind can be crucial for frequently purchased products like coffee, detergent, and headache remedies, for which brand decisions usually are made prior to going to the store. Thus, even if a brand is dominantly displayed, it may be critical that it be a “recalled” brand, or even “top-of-mind recalled,” to get the purchase.

Generally, if a brand does not achieve recall it will not be included in the consideration set. However, people usually will also recall brands that they dislike strongly.

How to achieve brand awareness
Achieving awareness, both recognition and recall, involves two tasks: gaining brand name identity and linking it to the product class.

How to achieve awareness
Be Different, Memorable An awareness message should provide a reason to be noticed and it should be memorable. One key is simply to be different, unusual. Of course, it is necessary to create a link between the brand and the product class. Involve a Slogan or Jingle The link to the slogan might be stronger because it involves a product characteristic that can be visualized. A jingle can be a powerful awareness-creating device.

Symbol Exposure A symbol involves a visual image, which is much easier to learn and to recall than a word or phrase. Publicity Publicity is less expensive than media advertising but also effective. People are Interested in learning about a news story than in reading advertising. Event sponsorship Create or maintain awareness from the spectators – who view them either live or on television, and from others who read about them either before or after their occurrence.

Consider Brand Extension One way to gain brand recall is to put the name on other products. Attach the brand to additional products which are advertised, displayed and used. Using Cues One brand cue is the package. The package is the actual stimulus with which the shopper is confronted. Cues (i.e. celebrity endorsers, colors, symbols) can be used to remind people of the link developed in the advertising.

Recall Requires Repetition The brand name needs to be made more prominent, and the link from the brand to the product class needs to be stronger. The Recall Bonus Maintaining a strong top-of-mind awareness through constant exposure can create not only brand awareness, but also brand salience (prominence) that can inhibit the recall of other brands.

Perceived Quality

Perceived quality The customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives. It is, first, a perception by customers. It differs from several related concepts, such as: Actual or objective quality – the extent to which the product or service delivers superior service Product-based quality – the nature and quantity of ingredients, features, or services included Manufacturing quality – conformance to specification, the “zero defect” goal

Perceived quality Perceived quality cannot necessarily be objectively determined because it is a perception and because judgments about what is important to customers are involved.

Perceived quality is an intangible, overall feeling about a brand
These are the underlying dimensions of perceived quality: Reason-to-buy Perceived quality of a brand provides a pivotal reason- to-buy, influencing which brands are included and excluded from consideration, and which is to be selected.

These are the underlying dimensions of perceived quality: Differentiate/Position A principal positioning characteristic of a brand is its position on the perceived quality dimension. Is it a super premium, premium, value, or economy entry? Further, with respect to a perceived quality category, is the brand the best, or is it only competitive with others in the class?

These are the underlying dimensions of perceived quality: A Price Premium A perceived quality advantage provides the option of charging a premium price. A price premium not only provides resources, but can also reinforce the perceived quality. Channel Member Interest Perceived quality can also be meaningful to retailers, distributors, and other channel members, and thus aid in gaining distribution.

These are the underlying dimensions of perceived quality: Brand Extensions The perceived quality can be exploited by introducing brand extensions, using the brand name to enter new product categories.

Perceived quality creates profitability
Perceived quality affects market share. Products of higher quality are favored and will receive a higher share of the market. Perceived quality affects price. Higher perceived quality allows a business to charge a higher price. A higher price tends to enhance perceived quality by acting as a quality cue.

Perceived quality creates profitability
Perceived quality has a direct impact on profitability in addition to its effect on market share and price. The cost of retaining existing customers declines less with higher quality, or competitive pressures are reduced when quality is improved. Perceived quality does not affect costs at all. The concept that “quality is free” enhanced quality leads to reduced defects and lowered manufacturing costs.

Dimensions of perceived quality of a PRODUCT
Performance involves the primary operating characteristics of the product. How well does a washing machine clean clothes? Features are secondary elements of products, for instance, does the toothpaste have a convenient dispenser? For an automobile, it could be an outlet for IPods (i.e. Honda City).

Conformance with specifications (the absence of defects) is the traditional, manufacturing- oriented view of quality. For instance, what is the incidence of defects? Reliability is the consistency of performance from each purchase to the next, and the “up time” – the percentage of time that the product delivers an acceptable performance. For instance, will the lawn mower work properly each time it is used?

Durability reflects the economic life of the product: how long will it last? Serviceability reflects the ability to service the product. For instance, is the service system efficient, competent, and convenient? Fit and finish refers to the appearance or feel of quality.

Dimensions of perceived quality of a SERVICE.
Tangibles: Their importance is in large part their role in acting as signals of competence/performance. Do the physical facilities, equipment, and appearance of personnel imply quality? Reliability: The service necessarily changes with the specific service person, customer, or day involved. Standardizing a service operation provides an effective approach to achieving reliability that often is easily communicated to customers. Consider the operations of fast food and hotel chains. Competence of the service people: concerns with the delivery of the basic function being sought by the customer. For instance, does the repair shop staff have the knowledge and skill to get the job done right? Do they convey trust and confidence? Responsiveness, empathy, credibility, trustworthiness and courtesy center mainly around the nature of the interaction between the customer and the service people. Was the customer treated with respect? Did the firm show that it really cared about the customer? Responsiveness: is the sales staff willing to help customers and provide prompt service? Empathy: does the bank provide caring individualized attention to its customers

Tangibles: Their importance is in large part their role in acting as signals of competence/performance. Do the physical facilities, equipment, and appearance of personnel imply quality? Reliability: The service necessarily changes with the specific service person, customer, or day involved. Standardizing a service operation provides an effective approach to achieving reliability that often is easily communicated to customers. Consider the operations of fast food and hotel chains.

Competence of the service people: concerns with the delivery of the basic function being sought by the customer. For instance, does the repair shop staff have the knowledge and skill to get the job done right? Do they convey trust and confidence?

Responsiveness, empathy, credibility, trustworthiness and courtesy center mainly around the nature of the interaction between the customer and the service people. Was the customer treated with respect? Did the firm show that it really cared about the customer? Responsiveness: is the sales staff willing to help customers and provide prompt service? Empathy: does the bank provide caring individualized attention to its customers

Delivering high quality
It usually is wasteful to attempt to convince customers that quality is high when it is not. Unless the use experience of customers is consistent with the quality position, the image cannot be maintained

Commitment to Quality. The goal is to achieve and maintain quality. A Quality Culture. The quality commitment needs to be reflected in the culture of the organization, its norms of behavior, its symbols, and its values. Customer Input. Customer ultimately defines quality. The need is to obtain accurate and current customer input.

Measurement/Goals/Standards. Achieve goals which are measurable and tied into the reward system. Allow Employee Initiative. Employee groups are not only sensitive to problems but also are in a position to implement and support solutions. Customer Expectations. Perceived quality can also be deficient because expectations are too high.

Signals of high quality
For instance for product quality, offering longer warranty. The customer would think that the firm must have such confidence in its product that they are willing to stand behind it. For services, the most important to the customer would be the competence of the service provider, for instance surgeons. Mistakes in action or judgment can cause inconvenience, or even injury.

However, customer lacks the ability to judge competence, hence, signal of quality would be the tangibles, for instance the neatness of the waiting room, the number of patients waiting would signal the quality of a physician. The appearance of the service personnel would be an indicator of their professionalism.

In addition to information about a brand’s product features (termed intrinsic cues) there are a lot of host of other brand associations – such as the amount of advertising used, the brand name, or the price (termed extrinsic cues) – that can influence perceived quality.

The amount of advertising supporting a brand can signal that the firm is backing the brand, which logically implies it must be a superior product. Another signal is the brand name. A brand name can affect quality perceptions when the brand name is attached to a different product class.

Signals of high quality: PRICE
Price will tend to be relied on as a quality cue when other cues are not available. When intrinsic cues and extrinsic cues are available, people will be less likely to rely on price. The use of price as a quality cue differs from person to person. If a person lacks the ability or motivation to evaluate the quality of a product, price will be more relevant. If a person is knowledgeable to detect differences in materials and tailoring, price will be less relevant.

Signals of high quality: PRICE
The use of price as a quality cue will differ across product classes. Product classes which are difficult to evaluate are more likely to have price as a quality cue. (wine, perfume, and durables.) A higher price, on average, leads to higher relative perceived quality. In the absence of complete information, price is used as a signal of quality.

Managing perceptions to match actual quality
Customer perception must be created or changed. One way is to manage signals of quality, such as price levels, or the presentability of employees or facilities. Another way is to simply communicate a quality message by explaining why quality is superior, by offering guarantees, or by using external measures. A quality claim will be more credible if customers know on what it is based.

Managing perceptions to match actual quality
A meaningful guarantee can provide convincing support for a quality claim. For instance, refund for unsatisfied customers within 30 days. An effective guarantee should be: Unconditional Easy to understand, it should be clear. Easy to invoke. The procedure should be simple and require minimum of effort Meaningful.

Brand Associations

Brand associations (image), the positioning decision
A brand association is anything “linked” in memory to a brand. The associations not only exist but also have a level of strength. A link to a brand will be stronger when it is based on many experiences or exposures to communications, rather than few.

A brand image is a set of associations. Associations are organized into groups that have meaning.

McDonald’s There is a kids’ cluster, a service cluster and a type of food cluster. There might also be one or more visual images, mental pictures that come to mind when McDonald’s is mentioned, such as the Golden Arches, Ronald McDonald, or hamburger and fries.

Positioning implies a frame of reference, the reference point usually being competition. For instance, SMART is positioned as having the largest network than GLOBE. A “brand position” does reflect how people perceive a brand. “Positioning” or a “position strategy” can also be used to reflect how a firm is trying to be perceived.

How brand association creates value
Help process/retrieve information Associations can serve to summarize a set of facts and specifications that otherwise would be difficult for customers to process and access. Differentiate An association can provide an important basis for differentiation. For instance, for products such as wines, perfumes and clothes, associations of the brand can play a critical role in separating one brand from another. For example, actors model for clothes.

Reason-to-buy Many brand associations represent a basis for purchase decisions and brand loyalty. Colgate strong teeth, Close Up fresh breath. “Miller time” provides a reason-to-buy for Miller beer: a well deserved reward. Create positive attitudes/feelings Some associations are liked and stimulate positive feelings that get transferred to the brand.

Basis for extensions An association be the basis for an extension by creating a sense of fit between the brand name and a new product, or by providing a reason to buy the extension.

Types of associations: PRODUCT ATTRIBUTES
Associate an object with a product attribute or characteristic. For instance, Volvo stressed durability by showing ‘crash tests’ and telling how long their car lasts. BMW talks of performance and handling with the tag line “The ultimate driving machine.” Jaguar, “A blending of art and machine,” offers performance and an elegant style. Mercedes, “The ultimate engineered car” emphasizes engineering excellence in a luxury car. Hyundai, “Cars that make sense” provides the price advantage.

Types of associations: PRODUCT ATTRIBUTES
Thus, all have selected a different attribute/benefit on which to base their positioning. The positioning problem is usually to find an attribute important to a major segment and not already claimed by a competitor. The identification of an unmet customer problem can sometimes lead to an attribute previously ignored by competitors. The use of several attributes can work well when they support each other.

Types of associations: INTANGIBLES
An intangible factor is a general attribute, such as perceived quality, technological leadership, perceived value, or ‘healthy’ food, which serves to summarize sets of more-objective attributes. For instance, technological leadership, Apple products sell for a large price premium because of the reputation of the firm as a leader in their industry. Customer perceived Apple as a technological leader without knowing the specs of specific models.

Types of associations: CUSTOMER BENEFITS
Two kinds of benefits: rational and psychological benefits A rational benefit is closely linked to a product attribute and would be part of a “rational” decision process. A psychological benefit, often extremely consequential in the attitude-formation process, relates to what feelings are engendered when buying and/or using the brand.

Type of associations: RELATIVE PRICE
The evaluation of a brand in these product classes will start by determining where it stands with respect to one of two of these price levels. Positioning with respect to relative price can be complex. The brand usually needs to be clearly in only one of the price categories. The job is to position its offering away from others at the same price point.

Types of associations: USE/APPLICATION
Associate the brand with a use or application. For example, the coffee market. To start the day Between meals alone Between meals with others With lunch With supper At dinner with guests In the evening To keep awake in the evening On weekends.

Types of associations: USE/APPLICATION
In this study there were sharp differences in brand profiles across use occasion. The major differences were found between AM and PM coffee drinkers. Products can have multiple positioning strategies. Often a positioning-by-use strategy represents a second or third position for the brand, a position that deliberately attempts to expand the brand’s market. For example, Gatorade (a beverage for athletes who, particularly in the summer, need to replace body fluids) has attempted to develop a positioning strategy for the winter months. The concept is to use Gatorade when flu attacks and the doctor says “Drink plenty of fluids.”

Types of associations: USER/CUSTOMER
Associate a brand with a type of product user or customer. Identifying a brand with its target segment often is a good way to appeal to that segment. For example, Cover Girl was established as the product for wholesome, healthy (and usually blonde) women. Revlon is associated with presumably more sophisticated women.

Types of associations: CELEBRITY/PERSON
Linking a celebrity with a brand can transfer those associations to the brand. In the mid-eighties, NIKE’s first-year sales of Air Jordans were over $100 million. Its key was the endorsement of gravity- defying basketball player Michael Jordan in the Nike advertising. A person attached to the brand need not be a celebrity. For instance, the Marlboro man has strong identity and characteristics that have become important brand associations. The person need not even be real (Ronald McDonald). It can be a cartoon symbol such as Mr. Clean and the Michelin tire giant.

Types of associations: LIFESTYLE/PERSONALITY
If your car were suddenly to become a human being, what kind of person would you expect it to be? Research by Pepsi involving 17 groups of loyal drinkers of either Pepsi or Coke, provided insights into the personalities of the two brands. Generally, Coke projected a Norman Rockwell – type image of family and flag, and a solid rural America. Pepsi, by contrast, was considered exciting, innovative, and fast-growing – albeit somewhat brash and pushy.

Types of associations: PRODUCT CLASS
Some brands need to make critical positioning decisions that involve product-class associations. For instance, some margarines position themselves with respect to butter. The soft drink 7-Up was made to reposition the brand as a soft drink, as a logical alternative to the “colas” but with a better taste. The successful Uncola campaign was the result.

Types of associations: COMPETITORS
In most positioning strategies, the frame of reference, whether explicit or implicit, is one or more competitor(s). First, the competitor may have a firm, well-crystallized image, developed over many years, which can be used as a bridge to help communicate another image referenced to it. Second, sometimes it is not important how good customers think you are; it is just important that they believe you are better than (or perhaps as good as) a given competitor. Positioning with respect to a competitor can be accomplished by comparative advertising – for instance, gas usage (Petron).

Type of associations: COUNTRY/GEOGRAPHIC AREA
A country can be a strong symbol, as it has close connections with products, materials, and capabilities. For instance, Germany is associated with beer and upscale automobiles. Italy with shoes and leather goods, and France with fashions and perfumes. These associations can be exploited by associating a brand with a country.

3 components of brand image
product attributes (i.e. Tang is an orange-flavored powder, containing vitamin C, that comes in a jar); consumer benefits (i.e. lemon-fresh Pledge polishes furniture and repels dust); and brand personality. A brand might be characterized as being modern or old-fashioned, lively or dull, conventional or exotic. Joseph Plummer argues that for many product classes brand personality is a key element in understanding brand choice (i.e. MAC vs PC).

Selecting, creating and maintaining associations

I think of advertising as the engine pulling a train
I think of advertising as the engine pulling a train. If you take away the engine the train will roll along for a while, but eventually the train will slow. – Pierre Ferrari (Coca-Cola Foods)

THREE CONSIDERATIONS that can be helpful in analyzing the positioning decision

SELF-ANALYSIS Don’t try to be something you are not. Make sure that the brand can deliver what it promises and that it is compatible with a proposed image. Brand perceptions can be more important than the physical product itself, especially if they are strong because of a name, or past advertising.

COMPETITORS’ ASSOCIATIONS
THREE CONSIDERATIONS that can be helpful in analyzing the positioning decision COMPETITORS’ ASSOCIATIONS It is important to develop associations that represent points of difference with competitors. If there is nothing different about your brand, there is no reason for customers to select it over another, or even to notice it. The fatal error is to be a “me too” entry. When your brand is the dominant brand and has control of distribution outlets, it is less important to be different.

TARGET MARKET Develop associations that build brand strengths and attributes, that provide a point of difference, and to which the target market will respond. Just being different will help recognition, but a much stronger position will be one that provides a reason-to- buy (i.e. unique selling proposition important enough to affect consumer purchases) or adds value to the product (i.e. being elegant, stylish, prestige, success).

Creating Associations
Associations are created by anything linked to the brand. Adverting effort is a direct contributor as well as promotion and publicity. How can the perceptions be influenced? Consumers generally lack the ability to evaluate the actual quality of many products. As a result, signals of quality become important – the size of stereo speakers, the sound of a car door, the thickness of tomato juice, the price of the product.

Creating Associations
Services are particularly hard to evaluate. Consumers look for signals – the appearance of furniture movers, the neatness of a doctor’s office, the demeanor of a bank teller.

Role of promotions Sales promotions provide short-term incentives to make a purchase decision. Promotions often are effective at impacting sales, but run the risk of increasing price sensitivity and reducing brand loyalty. Promotions which simply offer a discount or rebate are the most likely to cheapen the brand and thus adversely affect the brand image.

Role of promotions One way that promotions can enhance equity is to reinforce and strengthen key associations and brand awareness. For instance, leather-strapped luggage tags that American Express gives to its card members or Levi’s accessories (such as belts and handbags) offered as promotional items by Levi’s retailers. Promotions can be used to reward your existing customer and thus increase loyalty. (i.e. free ice-cream on the 11th purchase)

Role of promotions Promotions can enhance perceived quality.
A relatively inexpensive way to upgrade a brand’s image is to use an upscale promotion that has strong associations compatible with a high-perceived quality product. A “quality” promotion presented in an appropriate manner will suggest a quality product. By contrast, a quality brand is expected to avoid “cheap” promotion. The quality of the promotion can matter.

The role of publicity Paid advertising sometimes is extremely difficult and expensive because it lacks both credibility and interest value. For publicity to be most effective, there should be an event or action that is newsworthy (i.e. it is unusual).

Managing associations
Be consistent over time In many respects the set of associations is the result of all the accumulated marketing efforts behind the brand. In particular if the advertising, promotion, and packaging has supported a consistent positioning strategy over time, the brand is likely to be strong. Conversely, if the positioning changes, the advertising investment that preceded the change loses much of its value. Be consistent over elements of the marketing program One of the dangers of making alterations is that a change in the marketing program or the product line that makes sense in isolation can affect the association. Be consistent. Changes at the margin can be tolerated, but an image usually has difficulties in dealing with inconsistencies.

Use the organization to protect brand equity Expanding distribution to broaden the sales base is a method to dramatically increase sales. However, the new channel also can create associations that are damaging enough to weaken associations on which the brand equity is based. One approach to protecting equity is identifying certain activities that will not be permissible.

Manage disasters in order to minimize their damage The best approach to handling a disaster usually is to avoid it. It is useful to create worst-case scenarios about what could happen if a product were misused or a promotion misinterpreted. With scenarios in place, action can be taken to reduce the probability of such occurrences. A second line of defense is to detect the problem early and do something about it before it blows up. When adverse publicity does break, the goal is to reduce its duration. The key is to admit the problem then remedy it as convincingly and quickly as possible. If fault is immediately admitted, critics simply have nothing to talk about.

The Name, Symbol and Slogan

Names The name is the basic core indicator of the brand, the basis for both awareness and communication efforts. The name can actually form the essence of the brand concept. A name can serve as a substantial barrier to entry once it is established. An established brand can benefit from the establishment of a new subname.

A proposed name should be:
Be easy to learn and remember – it is helpful if it is unusual, interesting, meaningful, emotional, pronounceable, spellable, and/or if it involves a visual image. Suggest the product class so that name recall will be high while still being compatible with potential future uses of the name. For instance, Go Fly a Kite, Ticketron, Overnight Delivery Services communicate the involved product class.

Support a symbol or slogan since it can become important assets. When a name can stimulate and support effective symbols and slogans, the task of linking them to the name is made easier. Are there undesirable associations? Be distinctive – it should not be confused with competitors’ name. The desire is to create a brand and a supporting marketing program that generate an identity separate and distinct from competitors’, so that others do not benefit or exploit the equity that is created.

Be available and protectable legally. A name which is sound legally must be distinct from the names of competitors, and it must do more than simply be descriptive of the product or service.

Symbols The reality is that most firms and products are fairly similar; the differences that do exist, such as service quality, are difficult to communicate in an effective and credible manner. When products and services are difficult to differentiate, a symbol can be the central element of brand equity, the key differentiating characteristics of a brand. The symbol can by itself create awareness, associations, and a liking or feelings which in turn can affect loyalty and perceived quality. Symbols can be nearly anything (i.e. geometric shapes, things, packages, logos, people, scenes, cartoon characters). The choice of symbol and how it is developed will affect the role that it plays in the four dimensions of brand equity.

Attribute associations
A symbol can communicate associations. The symbol can be attached to anything the firms distribute, and provide these associations as a bonus. Symbols that have represented brand attributes: Mr. Clean: The muscular sailor has represented the cleaner’s strength Allstate: The “good hands” represent personal care and competent service POSITIVE FEELINGS: LIKING Some of the most successful and interesting symbols are cartoon characters that invoke humor and fantasy.

Symbols as indicators of brands and product classes
One role of a symbol, in addition to possibly generating associations, is to be an indicator for a brand. One guideline is to make the symbol unique. There is always the danger that the brand equity of one brand can be co-opted by someone who generates a similar symbol. For instance, Vidal Sassoon rely upon their package to act as a symbol. Private-label brands have been produced with nearly identical packages/symbols. One study showed that such products were perceived to have some similar attributes to the national brands (i.e. Vidal Sassoon) than other private labels with dissimilar packaging.

Guarding the symbol A symbol, with its associations, will need to be protected over time. It is important to avoid placing the symbol in a context which will jeopardize its associations. Licensing a symbol is one way to gain exposure. The symbol needs to be restricted to the right settings; any undesirable associations can affect its equity.

Slogans A slogan can be tailored to a positioning strategy, and added to a brand name and symbol. It has far fewer legal and other limitations than does either a name or a symbol. A slogan can provide an additional association for the brand. (Honda, Prestige) A slogan can remove some ambiguity from the name and symbol. For instance, Maybelline has a mixed image, but “Smart, beautiful, Maybelline” is very specific.

Slogans A slogan has the ability to generate equity of its own which can be exploited. For instance, local telecoms slogans have associations with feelings of connection, warmth and friendship. A slogan also can reinforce the name and symbol. For instance, Sharp slogan, “From Sharp minds come Sharp products”. As with the name and symbol, a slogan is most effective if it is specific to the point, and memorable for some reason – interesting, relevant, funny, catchy… It also needs to be linked to the brand.

Dimensions of Brand Equity
Brand loyalty Brand awareness Perceived quality Brand associations in addition to perceived quality Other proprietary brand assets – patents, trademarks, channel relationships, etc

BrandZ Top 100 Most Valuable Brands Study 2012 by WPP
Key findings highlighted in this year’s research report include: Technology Prevails: Technology has become ubiquitous in all areas of our lives. Seven of the top 10 brands are technology or telecoms brands. However, the power of smart, simple-to-use technology can also be seen beyond these two sectors. In other categories – cars, financial services, luxury and retail for example - we can also see that brands are gaining significant advantages by using smart technology to enhance their customer experience. For example, Burberry created a virtual world where younger brand followers can view fashion shows and more. Source:

Key findings highlighted in this year’s research report include: The Rise of Africa: This year’s ranking highlights the progress of Africa’s economic development with the arrival of the first African brand in the Top 100 – South African mobile company MTN – No. 88. But it’s not just African brands that are thriving south of the Sahara. Around 40% of Guinness’s sales come from Africa, Airtel’s third quarter results showed a 16% increase in revenue in Africa. Similarly, Orange enjoyed rapid growth in Africa in 2011, while Walmart invested there with the acquisition of Massmart. Source:

Key findings highlighted in this year’s research report include: The Future is Mobile: The future of the internet will be predominantly mobile rather than computer based. Mobile, to some extent, has been shielded from the recession as one of the few items consumers don’t want to give up or cut back on. The most valuable telecoms brand is AT&T worth $68.8 billion. Whilst the USA’s largest mobile service provider, Verizon, increased its brand value by 15% in the last year and is now worth $49.1 billion. Source:

Key findings highlighted in this year’s research report include: Retail: Constructing an Omni-Channel Business: The customer experience is a new focus for many retailers as they recognize its importance in keeping customers loyal and the need to be present anywhere and everywhere on the path to purchase. Walmart knocked Amazon from the top position and its brand is now worth $34.4 billion whilst Amazon is now worth $34 billion. Source:

Key findings highlighted in this year’s research report include: Brands with Women on the Board Outperform: As the number of women on corporate boards continues to rise, the BrandZ Top100 study this year reveals the success that women bring to brands. 77% of the brands appearing in the BrandZTM Top 100 Most Valuable Global Brands have women in the boardroom. The average value of brands with women on the boards is $27 billion, double that of those companies without female directors. Not only that, these brands also show an average five-year growth of 66% compared to an average growth of only 6% for those BrandZ Top100 brands that don’t have a woman on the board. Source:

Key findings highlighted in this year’s research report include: Strong Brands Provide Better Shareholder Value: An analysis of BrandZ Top 100 Most Valuable Global Brands as a ‘stock portfolio’ over the last seven years shows a highly favorable performance compared to a current stock market index, the S&P500. While the total return on investment (ROI) for all companies in the S&P500 index was just 2.3%, the BrandZ Portfolio provided a 36.3% ROI, proving that companies with strong brands are able to deliver better value to their shareholders. Source:

The study… The BrandZ Top 100 Most Valuable Global Brands study is the only valuation in the world that takes into account what people think about the brands they buy alongside rigorous analysis of financial data, market valuations, analyst reports and risk profiles. The study was developed for WPP’s operating companies by Millward Brown Optimor, the BrandZ Top 100 Most Valuable Global Brands ranking is now in its seventh year. It is the only study to combine measures of brand equity based on interviews with over 2 million consumers globally about thousands of global “consumer facing” and business-to-business brands with a rigorous analysis of the financial and business performance of each company to separate the value that brand plays in driving business revenue and market capitalization. Source:

Finally… Consumer perception of a brand is a key input in determining brand value because brands are a combination of business performance, product delivery, clarity of positioning, and leadership. Millward Brown is one of the world's leading research agencies and is expert in effective advertising, marketing communications, media and brand equity research. Millward Brown has 82 offices in 52 countries. Millward Brown is part of Kantar, WPP's insight, information and consultancy group. WPP is the world’s largest communications services group. Through its operating companies, the Group provides a comprehensive range of advertising and marketing services including advertising; media investment management; consumer insight; public relations and public affairs; branding and identity; healthcare communications; direct, digital, promotion and relationship marketing and specialist communications. The company employs over 158,000 people (including associates) in 2,500 offices in 107 countries. Source:

Firms with the largest BRAND VALUE in the world (WPP)

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Firms with the largest BRAND VALUE in the world (WPP)

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