TOPIC OVERVIEW – Topic Overview: Proposition and Branding decision

1.1 Introduction

A corporation’s brand image reflects the feelings consumers and businesses have about the
overall organization as well as its individual products or product lines. A strong brand creates
major advantages for any good or service. Effective brands create an advantage, especially in
mature markets containing fewer products or where service differences exist. Strong brands
convey the most compelling benefits of the product, elicit proper consumer emotions, and help
create loyalty.

The marketing team seeks to understand the firm’s overall brand image and the strengths of
individual brands in order to make solid connections with consumers and business-to-business
customers. International marketers utilize both standardization and adaptation tactics with
regard to brands and products. Packages and labels must meet the legal and cultural needs of
individual countries.

1.2 Learning Outcomes from the Module Outline

LO.1 How does a brand’s image affect consumers, other businesses, and the company itself?

LO.2 How are brands developed, built, and sustained in order to build brand equity and fend
off perceptions of brand parity? How companies differentiate and position their products for
maximum competitive advantage.

LO.3 What current trends affect private brands?

LO.4 How are brands managed in international markets?

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1.3. Introducing corporate and brand image

Brand marketing plan essentially deals with taking key decisions on the marketing mix and
delivering those decisions by designing appropriate, integrated marketing communication and
advertising plan with tactical and strategic elements to support. In today’s competitive world,
if a product does not maintain differentiation and can’t graduate to a brand, then it remains a
commodity and competes only on the basis of price. A strong brand improves and enhances
the demand by providing the benefits of increased sales volume, higher price (premium), lower
churn, and the prospect of more brand stretching. It also improves supply by imparting
favorable supplier terms, greater trade acceptance as well as trade support, lower staff
acquisition and retention costs, lower cost of capital, and better economies of scale through
higher sales volume. Today, key brands have to be managed keeping in mind that technology
is changing very fast and there is a plethora of new product introductions all the time in the
market.

1.3.1. Components of brand image

Brand images contain invisible and intangible elements (Figure 1). Consumers encounter these
elements as they interact with a company or brand. A strong brand image also provides tangible
and intangible benefits. Organizational leaders devote considerable amounts of time and energy
to building and maintaining a positive brand image. Client companies expect advertising
agencies to help design marketing programs that take advantage of the benefits of a strong
brand image. Both customers and organizations benefit from a well-known firm with an
established reputation (Clow and Baack, 2018).

Tangible elements
Goods or services sold
Retail outlets where the product is sold
Marketing communications
Name and logo

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 Advertising
Package and labels
Employees
Intangible elements
Corporate personnel Ideals

Beliefs

Conduct

Environmental Policies

Corporate Culture

Country Location

Media Reports

Figure 1: Elements of Brand Image

A powerful brand has high brand equity. Brand equity is the differential effect that knowing
the brand name has on customer response to the product and its marketing. It’s a measure of
the brand’s ability to capture consumer preference and loyalty. A brand has positive brand
equity when consumers react more favorably to it than to a generic or unbranded version of the
same product. It has negative brand equity if consumers react less favorably than to an
unbranded version. Because consumers expect stores to carry the particular brand, the company
has more leverage in bargaining with resellers. Because a brand name carries high credibility,
the company can more easily launch line and brand extensions. A powerful brand offers the
company some defence against fierce price competition (Kotler and Armstrong, 2011).

Building a brand’s equity consists of developing a favorable, memorable, and consistent image
– no easy task (Farquhar, 1989). Product quality and advertising play a vital role in this
endeavor. However, if substantial brand equity can be achieved, the organizations that own the
brand can benefit in several ways:

 The brand itself can become a differential advantage, influencing consumers to buy a
particular product

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  Because it is expensive and time-consuming to build brand equity, it creates a barrier
for companies that want to enter the market with a similar product.
 Brand equity can help a product survive changes in the operating environment, such as
a business crisis or a shift in consumer tastes (Etzel et al., 1999).

Above all, however, a powerful brand forms the basis for building strong and profitable
customer relationships. The fundamental asset underlying brand equity is customer equity—
the value of customer relationships that the brand creates. A powerful brand is important, but
what it really represents is a profitable set of loyal customers. The proper focus of marketing
is building customer equity, with brand management serving as a major marketing tool.
Companies need to think of themselves not as portfolios of products but as portfolios of
customers (Kotler and Armstrong, 2011).

Below the role of brand image from consumer and company perspective is presented.

 Provides confidence regarding purchase decisions

 Gives assurance about the purchase when the buyer has little or no previous
experience
 Reduces search time in a purchase decision

 Provides psychological reinforcement and social acceptance of the purchase

Figure 2. Brand Image: Benefits to Consumers

 Extension of positive customer feelings to new products

 Ability to charge a higher price or fee

 Consumer loyalty leading to more frequent purchases

 Positive word-of-mouth endorsements

 Higher level of channel power

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  Ability to attract quality employees

 More favorable ratings by financial observers and analysts

Figure 3. Brand Image: Benefits to Companies

Source: (Clow and Baack, 2018)

1.3.2 Branding strategies

For consumers, brands make it easy to identify goods or services. They aid shoppers in moving
quickly through a supermarket, discount house, or other retail store and in making purchase
decisions. Brand also help assure consumers that they will get consistent quality when they
reorder. For sellers, brands can be promoted. They are easily recognized when displayed in a
store or included in advertising. Branding reduces price comparison. Because brands are
another factor that needs to be considered in comparing different products, branding reduces
the likelihood of purchase decisions based solely on price. The reputation of a brand also
influences customer loyalty among buyers of services as well as business and consumer goods
(Selnes, 1993).

Brand names develop histories. They have personalities. A current trend in branding involves
creating a human persona or personality for the brand. Key human traits that brands espouse
include customer empathy, talking and acting like people, and empowering individuals. The
copy in the Maxwell House coffee ad on the next page contains a play on the words “stay
grounded” by referring to both the coffee grounds and the human characteristic of being
grounded.

The powerful impact branding has on purchase behaviors means that marketers should make
branding decisions thoughtfully. The figure below identifies several types of brands (Clow and
Baack, 2018).

Categories of Brand Names

 Family brands. A group of related products sold under one name

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  Brand extension. The use of an established brand name on products or services
not related to the core brand

 Flanker brand. The development of a new brand sold in the same category as
another product

 Co-branding. The offering of two or more brands in a single marketing offer

 Ingredient branding. The placement of one brand within another brand.

 Cooperative branding. The joint venture of two or more brands into a new
product or service

 Complementary branding. The marketing of two brands together for co-

consumption

 Private brands. Proprietary brands marketed by an organization and sold within

the organization’s outlets

Figure 4: Types of Brands

Producers strategies

Producer must decide whether to brand their products and whether to sell any or all of their
output under middlemen’s brands.

 Marketing entire output under producer’s own brands. Companies that rely strictly on
their own brands usually are very large, well-financed, and well managed. It’s
particularly difficult for a new firm to employ this approach. Only a minority of
manufacturers employ this strategy, and the number seems to be decreasing. A primary
reason is there are lots of opportunities to make products to which middlemen apply
their own brands.

 Branding or fabricating parts and materials. Some producers use a strategy of branding
fabricating parts and materials (manufactured goods that become part of another
product following subsequent manufacturing). With this strategy, the seller seeks to
develop a market preference for its branded parts or materials. This strategy is more
likely to be effective when the particular part of the fabricating parts or material has
two characteristics:

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 a)the product is also a consumer good that is bought for replacement purposes
b)the item is the key part of the finished product

 Marketing under middlemen’s brands. A widespread strategy among manufacturers is

to sell part or all of their output to middlemen for branding by these customers.

Middleman’s strategies

 Carry only producer’s brands. Most retailers and wholesalers follow this policy. Why?
They do not have the finances or other resources to promote a brand and maintain
quality.

 Carry both producers’ and middlemen’s brands. Producers may offer good prices in
this situation because they are anxious to get the extra business. In some cases, the costs
maybe lower because the quality of competing products carrying middlemen’s brands
is lower than the quality of competing products bearing producers’ brands.

 Carry generic products. Generic products are simply labeled according to the contents,
such as pork or beans. Generic products captured a large enough share of total sales in
some product categories to be a major factor in the battle of the brands. As supermarkets
have improved and promoted their own brands, a growing number of shoppers are
choosing middleman’s brands as a compromise between generic products and
producers brands (Etzel et al., 1999).

1.3.3 Developing and building powerful brands

Developing a strong brand begins with dis- covering why consumers buy a brand and why they
rebuy the brand. When assessing a brand, marketing professionals ask questions such as:

 Where does your brand stand now?

 What are your objectives?
 What are you doing to build your brand and business?

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  What are your brand’s strengths? Weaknesses?
 Which opportunities should be pursued first? Where are the pitfalls (Clow and Baack,
2018).

There are three main steps in building a brand strategy, namely the creation of:

1.An emotionally‐based brand vision – this is a long‐term and high‐ level statement (which
may just be a few words) that sums up what the brand wants to stand for in the minds of
consumers. A brand vision is usually emotional in nature and would be of universal appeal.
The words would be relevant to the business of the brand and its potential consumer base.

2. A set of well-defined brand values, preferably (but not always) framed in the form of
personality traits. Like people, brands have their own values that help in the process, allowing
a brand to develop a character or personality that stands out from competitors and enables
differentiation. The words that combine to form this set of values or personality link closely to
the vision and when described and defined give depth and direction to brand communications
and internal brand behavior, thereby shaping the customer experience.

3. Establishing a position in the market that makes the brand stand out from its competitors.
This often involves writing one or more positioning statements that bring in the competitive
dimension and precisely identify why the brand is different and better than the competitor
brands. Although master brand positioning statements are often general in nature and are
written to describe the broad advantages of the brand they are often also written in a more
tailored fashion as sub‐positioning statements to focus on the differentiation for specific target
audiences. They home in on who the customer is, what they are looking for in a brand, what
strategic competitive advantage a brand has, and how the customer benefits from forming a
relationship with the brand (Temporal, 2015).

1.3.4 Branding and implications for international markets

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Findings of the literature review presented here have shown that international branding
research can be traced back to the 1970s and that the field has evolved over time from dealing
with brand name decisions at an international level to encompassing all brand related decisions
in the international context. Furthermore, the analysis of the findings has shown that future
international branding research would especially benefit from contributions by researchers
from institutions outside of Europe and North America, and from a shift in geographic focus
towards Africa, Latin America and large under-researched parts of the Asia-Pacific region like
the Arab countries. Future research would also benefit from a change in focus away from
consumer goods and towards industrial/B2B products and services. A look in detail at the
different areas identified within past research in the international branding field shows that in
the area of international brand standardisation/adaptation, the analysis of brand name
standardisation appears to have been quite substantially researched. Therefore, attention might
shift towards issues such as analysing the link between brand name standardisation and
profitability (Melewar and Small, 2007).

In international markets, product development, branding, and maintaining an image are more
complex. Firms can employ either an adaptation strategy or a standardization strategy in
promotional programs. These two approaches apply to the products as well as to brand names.
With standardization, the same brand name and product are sold in all countries. With
adaptation, the brand and/or the actual product may be different in each country or region. This
can mean a product may be viewed as a local brand.

Using a standardized global brand reduces costs. Instead of advertising each local brand with
a separate communication strategy, one standardized message can be sent. Standardized global
brands also allow for the transference of best practices from one country to another. Further,
purchasing a standardized global brand may be viewed as a better choice than buying a local
brand. The global brand might have a higher perceived quality. The consumer’s self-concept
of being cosmopolitan, sophisticated, and modern can be enhanced when buying a global
brand. As the world continues to shrink through advances in telecommunications, consumers
are becoming increasingly similar, displaying comparable consumer characteristics and
purchase behaviors. This may lead to greater use of standardized global brands.

A common global integrated marketing communications (GIMC) strategy is to “think globally,

but act locally.” This approach applies to branding. Developing global brands might be the
ultimate goal; however, the marketing team still considers each local market’s unique features
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and should be sensitive to supporting and developing local brands. The success of a global
brand largely depends on the brand’s ability to adapt to local needs and tastes (Clow and Baack,
2018).

1.4 Summary

In this introductory week of the module, we have set the basis for components of brand image
and its respective strategy. In the following week, we will examine marketing communication
in the digital age.

References

Clow, E. K., Baack, D., (2018), Integrated Advertising, Promotion, and Marketing
Communications, Pearson.

Etzel, J. M., Walker, J., B., Stanton, J. W., (1999), Marketing, The McGraw-Hill Companies.

Farquhar, P., (1989), Managing brand equity, Marketing Research.

Kotler, P., Armstrong, G., (2011), Principles of Marketing, Pearson Education.

Melewar, TC., Small, J., 2007, Contemporary thinking, topics and trends in international
branding - Part 1, Emerald Group Publishing Limited.
Selnes, F., (1993), An examination of the Effect of Product Performance on Brand Reputation,
Satisfaction and Loyalty, Journal of Product & Brand Management.
Temporal, P., (2015), Branding for the Public Sector: Creating, Building and Managing
Brands People Will Value, John Wiley and Sons, Ltd.

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