Branding

Branding Concept

Some marketers distinguish the psychological aspect of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service.

Marketers engaged in branding seek to develop or align the expectations behind the brand experience (see also brand promise), creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. This approach works not only for consumer goods B2C (Business-to-Consumer), but also for B2B (Business-to-Business), see Philip Kotler & Waldemar Pfoertsch.
A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at branding with their particular script font (originally created for Walt Disney's "signature" logo), which it used in the logo for go.com.

Consumers may look on branding as an important value added aspect of products or services, as it often serves to denote a certain attractive quality or characteristic (see also brand promise). From the perspective of brand owners, branded products or services also command higher prices. Where two products resemble each other, but one of the products has no associated branding (such as a generic, store-branded product), people may often select the more expensive branded product on the basis of the quality of the brand or the reputation of the brand owner.

Brand name
The brand name is often used interchangeably with "brand", although it is more correctly used to specifically denote written or spoken linguistic elements of a brand. In this context a "brand name" constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services. A brand owner may seek to protect proprietary rights in relation to a brand name through trademark registration. Advertising spokespersons have also become part of some brands, for example: Mr. Whipple of Charmin toilet tissue and Tony the Tiger of Kellogg's.
The act of associating a product or service with a brand has become part of pop culture. Most products have some kind of brand identity, from common table salt to designer clothes.

Brand identity
How the brand owner wants the consumer to perceive the brand - and by extension the branded company, organisation, product or service. The brand owner will seek to bridge the gap between the brand image and the brand identity.Brand identity is fundamental to consumer recognition and symbolizes the brand's differentiation from competitors.
Brand identity may be defined as simply the outward expression of the brand, such as name and visual appearance.Some practitioners however define brand identity as not only outward expression (or physical facet), but also in terms of the values a brand carries in the eye of the consumer. In 1992 Jean-Noel Kapferer developed the Brand Identity Prism, which charts the brand identity along a constructed source and constructed receiver axis, with externalization on the one side and internalization on the other. On the externalization side brand identity consists of "physical facet", "relationship" and "reflected consumer". On the internalization side brand identity consists of "personality", "culture (values)" and "consumer mentalisation". In this respect Kapferer positions brand personality as one factor within brand identity.

Brand personality
Brand personality is the attribution of human personality traits to a brand as a way to achieve differentiation. Such brand personality traits may include seriousness, warmth, or imagination. Brand personality is usually built through long-term marketing, as well as packaging and graphics.

Brand promise
Brand promise is a statement from the brand owner to customers, identifies what consumers should expect from all interactions with the brand. Interactions may include employees, representatives, actual service or product quality or performance, communication etc. The brand promise is often strongly associated with the brand owner's name and/or logo.
The brand promise may be expressed in a "tag line", for example a dining restaurant may create the following brand promise: "Carl's Steak House -"Our food is the best, but the memories we help you create are even better."" Other brand owners may develop their brand promise into a detailed statement on the values, characteristics and behaviour of their brand. For example BP describes its brand promise as "our fundamental beliefs" which have evolved over time. BP continues "At the core of BP is an unshakable commitment to integrity, honest dealing, treating everyone with respect and dignity, striving for mutual advantage and contributing to human progress."

Brand value
Brand equity or brand value measures the total value of the brand to the brand owner, and reflects the extent of brand franchise.
A brand can be an intangible asset, used by analysts to rationalize the difference between a company's "book value" and market value. For example, the market value of a company can far exceed its tangible assets (physical assets owned by the company, such as stock or machinery), and its brand value can account for some of the difference. Up to 85 percent of a company’s market value might be intangible (for example know-how, existing client relationships), and Interbrand, a brand consultancy, states that tangible assets may account for less than five percent of a company’s market value, for example in the case of Coca-Cola or Microsoft.
Brand value, especially in the case of consumer product brands, may arise out of customer loyalty. Brand value may also arise in terms of staff retention benefits (e.g. the ability of the company to attract and retain skilled and/or talented employees offering competitive salaries).
Brand value can be negatively influenced. For example, in 1999 Nike's brand value was estimated at 8 billion US$. Facing media exposure and consumer boycotts over supply chain issues, Nike's brand value declined in following two years to 7.6 billion US$, and rose back to 9.26 billion US$ in 2004 after Nike addressed its supply chain issues.
Campaigning groups may deliberately target a company’s brand value to force a company into adopting a certain position or practices. Some campaign groups have thought to do this by deliberately subverting a brand’s image, logo or message, creating a negative association among consumers. This attack may be visual, as pioneered by groups such as the Adbusters, or focusing on the message. For example, BP’s “Beyond Petroleum” branding is subverted by campaigners into headline such as “BP: Beyond Petroleum or Beyond Preposterous?” or “BP must move beyond petroleum as profits soar“.
See also: Main Article brand equity

Brand monopoly
In economic terms the "brand" is, in effect, a device to create a "monopoly" — or at least some form of "imperfect competition" — so that the brand owner can obtain some of the benefits which accrue to a monopoly or unique point of sale, particularly those related to decreased price competition. In this context, most "branding" is established by promotional means. However, there is also a legal dimension, for it is essential that the brand names and trademarks are protected by all means available. The monopoly may also be extended, or even created, by patent, copyright, trade secret (e.g. secret recipe), and other sui generis intellectual property regimes (e.g.: Plant Varieties Act, Design Act).
In all these contexts, retailers' "own label" brands can be just as powerful. The "brand", whatever its derivation, is a very important investment for any organization. RHM (Rank Hovis McDougall), for example, have valued their international brands at anything up to twenty times their annual earnings.

There are a number of possible policies:

Company name

Often, especially in the industrial sector, it is just the company's name which is promoted (leading to one of the most powerful statements of "branding"; the saying, before the company's downgrading, "No one ever got fired for buying IBM").
In this case a very strong brand name (or company name) is made the vehicle for a range of products (for example, Mercedes-Benz or Black & Decker) or even a range of subsidiary brands (such as Cadbury Dairy Milk, Cadbury Flake or Cadbury Fingers in the United States).

Individual branding
Main article: Individual branding
Each brand has a separate name (such as Seven-Up or Nivea Sun (Beiersdorf)), which may even compete against other brands from the same company (for example, Persil, Omo, Surf and Lynx are all owned by Unilever).

Attitude branding
Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude branding include that of Nike, Starbucks, The Body Shop, Safeway, and Apple Computer.[1] In the 2000 book, No Logo, attitude branding is described by Naomi Klein as a "fetish strategy".
"A great brand raises the bar -- it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you're drinking really matters." - Howard Schultz (president, ceo and chairman of Starbucks

"No-brand" branding
Recently a number of companies have successfully pursued "No-Brand" strategies, examples include the Japanese company Muji, which means "No label, quality goods" in English. Although there is a distinct Muji brand, Muji products are not branded. This no-brand strategy means that little is spent on advertisement or classical marketing and Muji's success is attributed to the word-of-mouth, a simple shopping experience and the anti-brand movement. Other brands which are thought to follow a no-brand strategy are American Apparel, which like Muji, does not brand its products.

Derived brands
In this case the supplier of a key component, used by a number of suppliers of the end-product, may wish to guarantee its own position by promoting that component as a brand in its own right. The most frequently quoted example is Intel, which secures its position in the PC market with the slogan "Intel Inside".

Brand development
In terms of existing products, brands may be developed in a number of ways:

Brand extension
The existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, (sun-) glasses, furniture, hotels, etc.
Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene.
There is a difference between brand extension and line extension. When Coca-Cola launched "Diet Coke" and "Cherry Coke" they stayed within the originating product category: non-alcoholic carbonated beverages. Procter & Gamble (P&G) did likewise extending its strong lines (such as Fairy Soap) into neighboring products (Fairy Liquid and Fairy Automatic) within the same category, dish washing detergents.

Multi-brands
Alternatively, in a market that is fragmented amongst a number of brands a supplier can choose deliberately to launch totally new brands in apparent competition with its own existing strong brand (and often with identical product characteristics); simply to soak up some of the share of the market which will in any case go to minor brands. The rationale is that having 3 out of 12 brands in such a market will give a greater overall share than having 1 out of 10 (even if much of the share of these new brands is taken from the existing one). In its most extreme manifestation, a supplier pioneering a new market which it believes will be particularly attractive may choose immediately to launch a second brand in competition with its first, in order to pre-empt others entering the market.
Individual brand names naturally allow greater flexibility by permitting a variety of different products, of differing quality, to be sold without confusing the consumer's perception of what business the company is in or diluting higher quality products.
Once again, Procter & Gamble is a leading exponent of this philosophy, running as many as ten detergent brands in the US market. This also increases the total number of "facings" it receives on supermarket shelves. Sara Lee, on the other hand, uses it to keep the very different parts of the business separate — from Sara Lee cakes through Kiwi polishes to L'Eggs pantyhose. In the hotel business, Marriott uses the name Fairfield Inns for its budget chain (and Ramada uses Rodeway for its own cheaper hotels).
Cannibalization is a particular problem of a "multibrand" approach, in which the new brand takes business away from an established one which the organization also owns. This may be acceptable (indeed to be expected) if there is a net gain overall. Alternatively, it may be the price the organization is willing to pay for shifting its position in the market; the new product being one stage in this process.

Small business brands
Branding a small or medium sized business (SME) follows essentially the same principle a branding larger corporation. The main differences being that small businesses usually have a smaller market and have less reach than larger brands. Some people argue that it is not possible to brand a small business, however there are many examples of small businesses that became very successful due to branding. Starbucks initially used almost no advertising and over a period of ten years developed such a strong brand that the company went from one shop to hundreds.

Own brands and generics
With the emergence of strong retailers the "own brand", a retailer's own branded product (or service), also emerged as a major factor in the marketplace. Where the retailer has a particularly strong identity (such as Marks & Spencer in the UK clothing sector) this "own brand" may be able to compete against even the strongest brand leaders, and may outperform those products that are not otherwise strongly branded.
Concerns were raised that such "own brands" might displace all other brands (as they have done in Marks & Spencer outlets), but the evidence is that — at least in supermarkets and department stores — consumers generally expect to see on display something over 50 per cent (and preferably over 60 per cent) of brands other than those of the retailer. Indeed, even the strongest own brands in the UK rarely achieve better than third place in the overall market.
This means that strong independent brands (such as Kellogg's and Heinz), which have maintained their marketing investments, are likely to continue their strong performance. More than 50 per cent of UK FMCG brand leaders have held their position for more than two decades, although it is arguable that those which have switched their budgets to "buy space" in the retailers may be more exposed.
The strength of the retailers has, perhaps, been seen more in the pressure they have been able to exert on the owners of even the strongest brands (and in particular on the owners of the weaker third and fourth brands). Relationship marketing has been applied most often to meet the wishes of such large customers (and indeed has been demanded by them as recognition of their buying power). Some of the more active marketers have now also switched to 'category marketing' - in which they take into account all the needs of a retailer in a product category rather than more narrowly focusing on their own brand.
At the same time, probably as an outgrowth of consumerism, "generic" (that is, effectively unbranded goods) have also emerged. These made a positive virtue of saving the cost of almost all marketing activities; emphasizing the lack of advertising and, especially, the plain packaging (which was, however, often simply a vehicle for a different kind of image). It would appear that the penetration of such generic products peaked in the early 1980s, and most consumers still appear to be looking for the qualities that the conventional brand provides.