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Brands and Consumers

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  1. Brands and Consumers Professor S.J. Grant Spring 2007 BUYER BEHAVIOR, MARKETING 3250

  2. Outline • What is a brand? • Brands add value • Case study: Brand equity • How are brands built? • Laddering and goal-based positioning • Leveraging a brand • Brand extensions • Co-branding • Global branding

  3. What is a Brand? • A name, term, sign, symbol or design (or combination of these) intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors • Well-established brands activate a network of associations in consumers’ minds

  4. RANK BRAND 2004 1 COCA-COLA 2 MICROSOFT 3 IBM 4 GE 5 INTEL 6 DISNEY 7 McDONALD’s 8 NOKIA 9 TOYOTA 10 MARLBORO BRAND VALUE ($billions) 67.4 61.4 53.8 44.1 33.5 27.1 25.0 24.0 22.7 22.1 Brands Add Value Top 10 most valuable brands, as determined by Interbrand Group, 2004, J.P. Morgan.

  5. Features Emotions Essence Goal Benefits Laddering • Goal-based positioning deepens consumers’ understanding of a brand by showing brand helps to achieve goals • Concrete features imply functional benefits • Functional benefits imply emotional benefits • Emotional benefits imply brand essence • Brand essence implies goal attainment

  6. The Consumer Connection Bridge Product Feature- why I believe this Functional Benefit- what it does for me Emotional Benefit- how this makes me feel Consumer Goals - how this allows me to achieve an important, universal goal Goals EmotionalBenefit FunctionalBenefit ProductFeature Consumer Brand

  7. Laddering Physically attractive Brand Essence Emotional Benefits Virtuous, lean Low in calories Fat free Nutritious breakfast Functional Benefits

  8. Bubbly Goes with food Traditional Laddering Adds life Emotional Benefits Functional Benefit Refreshing Features

  9. Clean facilities Happy Meals Reliable fare Laddering A family place Brand Essence Emotional Benefits Friendly Functional Benefits

  10. Choosy Making tough choices Wanting best for kids Laddering Good mother Goal Brand Essence Caring Emotional Benefits

  11. Laddering Established elite Brand Essence Emotional Benefits Acceptance Preppy styling American casual Quality material Functional Benefits

  12. Product line extensions Diet Coke Bayer Select Country Time Cider A1 Poultry Sauce Crystal Pepsi Cool Mint Listerine Hershey’s Hugs Brand extensions Marlboro Clothing BIC Perfume Jello Pudding Pops Aunt Jemima Pancake Syrup Jack Daniels Charcoal Woolite Tough Stain Rug Cleaner DuPont Stainmaster Marquis by Waterford Leveraging the Brand

  13. Product Line Extensions • Opportunities • Way to serve a segmented market • Adapt to consumer variety seeking and update or expand the core brand’s image • Increase shelf-space and attract more consumer attention • Offer a broader range of price points and thereby serve a wider audience of consumers • Utilize excess capacity • Increase sales quickly • Create a barrier to entry by increasing control of shelf-space

  14. Product Line Extensions • Threats • Blurring the rationale for each product in the line • Encouraging variety seeking • Diluting the core brand image • Increasing costs without increasing total sales, cannibalization • Reducing credibility with trade if extension sales are lower than promised • Offering competitors more opportunities to match products

  15. Brand Extensions • Brands may launch extensions as a way to leverage strong brand equity • Starbucks coffee – Starbucks ice cream • Hewlett Packard calculators – Hewlett Packard PCs and printers

  16. Brand Extensions • The “extendibility” of a brand is a function of its associations • Brands that have “laddered-up” and thus connect with broad values and goals often can be extended successfully to other categories that serve the same goal (e.g. Polo) • Brands that remain closely tied to their product category may only succeed with extensions to related categories (e.g., Aunt Jemima Pancake Mix and Aunt Jemima Syrup)

  17. Co-Branding • Ingredient brands • Intel Inside • Nutrasweet • DuPont Stainmaster • Composite brands • Master Card and issuing bank • Healthy Choice from Kellogg’s

  18. Global Branding • Global target • Teens, business travelers, affluents/aspirers • Global needs: simplicity, elegance, status • Global category needs • Yes: high tech, high signal (style, fashion) • No: local tastes, rituals, personal hygiene • Global equity • Country-of-origin imagery relevant (Coke, Levi’s, Harley-Davidson, Chanel, Evian, Nissan) • Weak, fragmented local competitors • Can leverage economies of scale