branding leveraging

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Brand Building Brand Building Session XII Brand Leveraging Lectures 1 - 2 of 2

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Page 1: branding leveraging

Brand BuildingBrand Building

Session XIIBrand LeveragingLectures 1 - 2 of 2

Page 2: branding leveraging

Scope of the PresentationScope of the Presentation

The leveraging processLeveraging brand associationsThe process of brand

orientation

Page 3: branding leveraging

The Leveraging ProcessThe Leveraging Process

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What is Brand Leveraging?What is Brand Leveraging? Brands may be linked to other entities that have

their own knowledge structures in the minds of the consumers

Because of these linkages consumers may assume or infer that some of the associations that charecterise the other entities may also be true for the brand

In effect, the brand borrows some brand knowledge and depending on the associations some brand equity from other entities

This indirect approach of building brand equity is referred to as leveraging secondary brand knowledge for the brand

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Significance of Brand Significance of Brand LeveragingLeveraging

Brand leveraging may be important If the existing brand associations are

deficient in any way– To create strong, favourable and unique

associations and positive responses that may otherwise not be present

To reinforce existing associations in a fresh and unique way

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Extent of LeverageExtent of Leverage

3 factors affect the extent of leverage Awareness and knowledge of the entity

– Ideally consumers would be aware of the entity– Hold some strong, favourable and perhaps unique

association regarding in the entity– Have positive judgments and feelings about the entity

Meaningfulness of the knowledge of the entity– Relevance and connection of the entity associations

with the brand Transferability of the knowledge of the entity

– The actual extent to which the the meaningful and positive associations of the entity are linked to the brand

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Leveraging Brand Leveraging Brand AssociationsAssociations

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Means of Brand Means of Brand LeveragingLeveraging

By linking the brand to Companies Countries or geographic areas Channels of distribution Other brands – Co-branding Characters Spokespersons Events Other third party sources

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CompanyCompany

Brand leveraging here happens through the branding strategies adopted by the company

A corporate brand may evoke associations of – Common product attributes, benefits or attitudes– People and relationships– Programs and values– Corporate credibility

Brands and companies are often unavoidably linked to the category in which they compete– E.g.: Fuel Industry

Page 10: branding leveraging

Country of OriginCountry of Origin

Choosing brands with strong national ties may reflect a deliberate decision to maximise product utility and communicate self-image based on what consumers believe about the products from those countries

Geographic associations are possible at a state, regional or city level as well

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Country of OriginCountry of Origin

Country of origin associations can be done by– The location embedded in the brand name

E.g.: Air India– The location combined with the brand

nameE.g.: Bailey’s Irish Cream

– The locations becoming a dominant theme in the brand advertising

E.g.: Fosters – Australian for beer

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Country of OriginCountry of Origin

Brand Country

Coca-Cola USA

BMW Germany

Gucci Italy

Swatch Switzerland

Foster’s Australia

Page 13: branding leveraging

Channels of DistributionChannels of Distribution

Channels of distribution can create associations through– The products and brands they store– The means by which they sell them– The advertising and promotion efforts

at a retail levelThe associations related to the

store are of key importance

Page 14: branding leveraging

Other Brands – Co-Other Brands – Co-brandingbranding

Co-branding (aka brand bundling or brand alliance) occurs when two or more existing brands are combined into a joint product or are marketed together in some fashion– E.g.: ICICI Bank HPCL Visa Card

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Advantages of Co-Advantages of Co-brandingbranding

Borrow needed expertiseLeverage equity you don’t haveReduce cost of product introductionExpand brand meaning into related

categories– Broaden meaning– Increase access points

Source of additional revenue

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Disadvantages of Co-Disadvantages of Co-brandingbranding

Loss of controlRisk of brand equity dilutionNegative feedback effectsLack of brand focus and clarityOrganisational distraction

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Ingredient BrandingIngredient Branding

A special case of co-brandingIt contains creating equity for

materials, components or parts that are necessarily contained within other branded products

E.g.: Dolby noise reduction, Teflon nonstick coating, Intel inside

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Advantages of Ingredient Advantages of Ingredient BrandingBranding

For the supplier of the ingredient– Greater sales and higher margins

through consumer pull– Better long term supplier-buyer

relationships– Enhanced revenue through twin

streams The direct revenue from supplies Royalty generated through display of

ingredient brand

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Advantages of Ingredient Advantages of Ingredient BrandingBranding

For the manufacturer of the host product– Enhancing brand equity– Entry into new product categories,

market segments, distribution channels

– Sharing of some production and development costs with the supplier of the ingredient brand

Page 20: branding leveraging

Disadvantages of Disadvantages of Ingredient BrandingIngredient Branding

Suppliers unable to sustain high advertising costs

Loss of control Different objectives between the supplier and

host Manufacturers’ brand dilution Setting the stage for competitive ingredient

branding efforts– No expenditure on establishing the importance of the

ingredient– Spends only on establishing superiority of the

ingredient

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CharactersCharacters

Characters are used to leverage brand knowledge through licensing agreements

Successful licensors includeMovies

Star Wars, Jurassic Park

Cartoon Strip Characters

Garfield, Snoopy

Television Characters

Sesame Street, Simpsons

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SpokespersonsSpokespersons

Using well-known and admired people to promote products is a widespread phenomenon with a long marketing history

The rational behind these strategies is– To draw attention to the brand– To shape the perception of the brand

basis the knowledge and perceptions of the famous person

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Potential Problems with Potential Problems with EndorsementsEndorsements

Overuse – endorsing too many products– Lack of any specific product meaning– Seen as overly opportunistic or insincere– E.g.: Amitabh Bachan

Match between celebrity and product– Navratna tel – Amitabh Bachan

Endorsers getting into trouble or their popularity dropping– E.g.: Mohammad Azharuddin

Low credibility– Celebrities endorse only for monies

Celebrities may distract attention from the brand

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EventsEvents

Sponsored events can contribute to the brand equity by– Improving brand awareness– Adding new associations– Improving existing associations

E.g.: Standard Chartered Marathon, Ponds Femina Miss India, Manikchand Filmfare Awards

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Third Party SourcesThird Party Sources

Seals or stamps – Agmark, ISIEndorsements from

– Leading magazines – Autocar– Organisations – SIAM– Experts – Hormuzd Sorabji

Published studies – JD Powers CSIAwards – CNBC ‘Car of the Year’

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The Process of Brand The Process of Brand OrientationOrientation

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What is Brand Orientation?What is Brand Orientation?

The organization’s point of view on marketplace relationships

Every organization has an attitude—stated or unstated—toward how it should use its resources to build marketplace relationships

This brand orientation has a major impact on how the company embraces and uses brand management

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The Brand Orientation MapThe Brand Orientation Map

B

Product/Technology

Driven

D

Market

Driven

Behaviour/Solution

Products

Trade End User

Functional Relationship

Cu

stom

er

Rela

tion

ship

A

Sales

Driven

C

Opportunistic

Driven

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The Brand Orientation MapThe Brand Orientation Map

It is possible to discover an organization’s brand orientation by placing it into one of four categories

The organization’s perspective on either functional or customer relationships—ultimately, its brand orientation—has a significant impact on its marketing behaviors, investments, and priorities

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Functional RelationshipsFunctional Relationships

The chart’s vertical axis is a spectrum that plots an organization’s functional relationship with its marketplace

Functional relationship describes how an organization defines and communicates its competency to the marketplace

Organizations define their functional relationships with their markets based on either a product relationship or a behavior/solution relationship

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Functional RelationshipsFunctional Relationships

Companies favoring a product relationship believe they will maintain competitive advantage by continually delivering a superior product that satisfies a particular need

At the other end of the spectrum, we find firms that base their functional relationships on satisfying a broader-based customer need - they do this by satisfying a broader set of customer needs that are defined by a behavior— for example, “athletic performance” shoes as opposed to “running shoes”—a complete, rather than a partial, solution

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Customer RelationshipsCustomer Relationships

The other perspective described by this model is the customer relationship

This spectrum differentiates organizations based on whether they cater more to the needs of their trade customers—the vendors who sell their products—or to the needs of their end users

In marketing jargon, organizations that favor their trade customers put more emphasis on the “push” side of the marketing lever

Those at the other end of the spectrum believe they will have greater advantage with “pull” marketing strategies

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A Sales Driven A Sales Driven OrganisationOrganisation

The sales-driven organization depicted in quadrant A believes in the superiority of its product

It believes in building brand equity primarily with its trade customers, mostly through sales activities and one-on-one relationships

E.g.: 3M

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A Product/Technology A Product/Technology Driven OrganisationDriven Organisation

The product/technology-driven organization depicted in quadrant B relies on these abilities to create and sustain superior relationships with its end users

Its brand orientation is based on a belief that its superior technology is so valued by consumers that it can dictate terms to, its trade customers

Organizations with this type of brand orientation believe that their technical competence is their loudest brand voice and place less emphasis on other dimensions of the brand relationship

E.g.: Microsoft  

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An Opportunistically An Opportunistically Driven OrganisationDriven Organisation

The opportunistically driven brand orientation appears in quadrant C, the lower-left side of the graph

These organizations believe that their competitive advantage derives from being particularly responsive to the needs of their trade channels

Hence, they place a lot of stock in marketplace relationships with trade customers

Generally, these organizations build their initial brand equity with a sales-driven orientation

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An Opportunistically An Opportunistically Driven OrganisationDriven Organisation

They then use the success of a particular product to cement that relationship

Such companies usually follow this success by expanding their product set based on the opportunities their trade channels dictate

They are consequently vulnerable to distressing their brand equity by extending their brand recklessly in reaction to the wishes of their trade customers

Certainly, companies with this orientation can be very successful, but they must pay extra attention to their brand management practices  

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A Market Driven A Market Driven OrganisationOrganisation

Finally, we come to the marketing-driven orientation shown in quadrant D

Organizations that subscribe to this brand orientation exhibit a richer sense of brand equity due, in most cases, to competitive necessity

These companies believe in the value of a functional relationship that goes beyond a product or set of products

To maintain an enduring relationship with end users, they know their brand must relate to an important behavior or solution

E.g.: Nike  

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Deciding Brand Deciding Brand OrientationOrientation

What’s the best brand orientation?It depends on many factors In reality, the challenge is to

create movement across each axis and evolve brand relationships to support the growth of the organization

Page 39: branding leveraging

Thank You!Thank You!