Brand and Brand Elements

A brand is much more than a name or a logo, and represents the full ‘personality’ of the company. Here we understand the concept of brand, its elements, and the advantages it offers.

Importance of a Brand

Businesses that invest in and sustain leading brands prosper whereas those that fail are left to fight for the lower profits available in commodity markets. Strong brands are able to establish a long-lasting place in short-lived markets. Consumers are willing to pay a premium for stronger brands.

McDonalds quote emphasizing the importance of brands: “…it is not factories that make profits, but relationships with customers, and it is company and brand names which secure those relationships”.

“If Coca-Cola were to lose all of its production-related assets in a disaster, the company would survive. By contrast, if all consumers were to have a sudden lapse of memory and forget everything related to Coca-Cola the company would go out of business.” Coca-Cola

The Brand is King in a Global World!

A brand is the way a company, organization, or individual is perceived by those who experience it. More than simply a name, term, design, or symbol, a brand is the recognizable feeling a product or business evokes.

Brands, then, live in the mind. They live in the minds of everyone who experiences them: employees, investors, the media, and, perhaps most importantly, customers.

Simply put, brands are perceptions.

Brands are a means of differentiating a company’s products and services from those of its competitors. There is plenty of evidence to prove that customers will pay a substantial price premium for a good brand and remain loyal to that brand. It is important, therefore, to understand what brands are and why they are important.

You will find that products of certain brands cost more (compared to similar products from other brands). And that is because they are of better quality, are better designed, are visually appealing, and make you feel that you own something really special. A pair of Nike shoes is going to cost more than a local shoe brand.

When one thinks of a brand, it brings to the mind certain attributes about the product, and as such reduces the perceived concerns of a buyer, which he may otherwise have if the brand of the was not known. For most buyers, a brand evokes trust, complements his personality and is a sign of status.

Why Brands Matter to Consumers

From a Consumer Perspective, Brands have a lot of importance:

• Identification of the product: It helps buyers identify the product that they like/dislike. It helps buyers to identify Product Source (country or company) and marketer.

• Reduces the amount of time spent making product-based decisions and in turn decrease the time spent shopping.

• It enables customers to make associations with certain attributes or feelings with a particular brand. If this differentiation can be achieved and sustained, then a brand is considered to have a competitive advantage.

• Successful brands create strong, positive and lasting impressions through their communications and associated psychological feelings and emotions, not just their functionality through use.

• Symbolic device: consumers express their own personality & values. Buyer may derive a psychological reward from owning the brand, IE Rolex or Mercedes.

• Assignment of responsibility to product maker: brands have to perform – fulfil expectations.

• Risk reducer: consumers trust brands. It reduce levels of perceived risk and in doing so improve the quality of the shopping experience.

• Search cost reducer: less time and effort to search.

• Promise, bond, or past with product maker: consumer knowledge.

• Signal of quality: guarantee of quality. It helps buyers evaluate quality of products especially if unable to judge a products characteristics.

Branding can help reduce the customer perceived risk. Various Risks in Consumer Decisions:

• Functional risk: whether the product will perform expected functions.
• Physical risk: whether the product will have the expected physical characteristics, and in particular will not put the customer at physical risk.
• Financial risk: whether the product is worth the price paid.
• Social risk: whether the product will convey the appropriate image to friends, family, colleagues, or will embarrass.
• Psychological risk: whether the product will or will not reinforce the customer’s expectations, affect mental well-being etc.
• Time risk: if the product does not deliver expected benefits, what is the opportunity cost of the search time to replace it.

Why Brands Matter to Manufacturers

One product /brand – many Intellectual Property rights

• Trade marks: NOKIA, Product “208”, Start-up tone
• Copyright: Software, User manuals, Ringtones, Start-up tone, Images
• Patents and utility models: Data-processing methods, Operating system, Operation of user interface
• Designs: Form of overall phone, Arrangement and shape of buttons, Position and shape of screen
• Trade secrets: Some technical know-how kept “in-house” and not published

Advantages of Branding to Seller, Manufacturers and Retailers:

• Source of competitive advantage: brand equity & differentiation.

  Branding enables manufacturers and retailers to help customers differentiate between the various offerings in a market. Contributes to corporate identity programmes.

• Identification to simplify handling or tracing (logistics).

• Legally protecting unique features: copyright of brand elements.

• Signal of quality level: consumers trust the company’s offerings.

• Develops customer loyalty/retention and repeat-purchase buyer behaviour. It gives the seller the opportunity to attract a loyal and profitable set of customers.

• Endowing products with unique associations: consumers’ minds.

• Source of financial returns: strong brand equity increases financial value of the brand.

  Brands are assets (have a financial value), these are a source of financial returns, enables premium pricing.

• Strong brands help build corporate image, making it easier to launch new brands and gain acceptance by distributors and consumers.

  Encourages cross-selling to other brands owned by the manufacturer. Assists the development and use of integrated marketing communications.

• Seller’s brand name and trademark provide legal protection of unique product features.

Check out more branding theories and concepts

What is a Brand?

A brand is perception resulting from experiences with, and information about, a company or line of products. A brand is more than just a product, it is what people think about the product from their heads and hearts.

The American Marketing Association defines brands as a “name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers”

The set of physical attributes of a product or service, together with the beliefs and expectations surrounding it – a unique combination which the name or logo of the product or service should evoke in the mind of the audience. (CIM)

Usually managers characterize a brand by describing all of the brand elements used to identify it, including its name, symbol, package design, and any other features that serve to differentiate that brand’s offering from competitors’

• “..brand is a complex bundle of images and experiences in the customer’s mind” (Keegan and Green 2015, p. 297).
• “A name, term, sign, symbol, combination of these, that identifies, the products or services of one seller or group of sellers and differentiate them from competitors …branding can add value to a product. Customer attach meaning to brands and develop relationships. Brands have meaning well beyond a product’s physical attributes” (Kotler 2013, p. 254).
• “Brands are the culmination of a user’s total experience with a product…over many years…made of a multitude of good, neutral and bad encounters such as the way a product performs, an advertising message, a press report, a telephone call, or a rapport with a sales assistant” (Whalley 2010, p.81).

Brand Elements

Brand Elements are the different components that identifies and differentiates a brand such as Name, logo, symbol, package design, or other characteristic as well as emotional attachments.

It can be based on people, places, things, and abstract images.

Brand name, Logos and symbols, Characters, Slogans, Jingles/Sounds, URLs make a Brand.

Brands: Level of Meaning

A brand may mean different things to different sets of people.

• Attributes: A brand first brings to mind certain product attributes.
• Benefits: Customers buy benefits. Attributes must be translated into functional and emotional benefits.
• Values: A brand says something about the buyers’ values.
• Personality: The brand will attract people whose actual or desired self images match the brand’s image.

(based on Kotler et al, 1999 and Kapfener, 1992)

Brand Characteristics

• Brands reside in the minds of the consumer
• Rooted in reality but reflecting our strangeness
• Brands provide a meaning and a label to a product
• Consumers must be able to perceive differences among brands in the same product category

A branding strategy (also known as brand development) is a long-term plan to develop the brand so that it is recognized and preferred by consumers.

Brands: Types, Classification

Branding is universal and pervasive in different product categories. It is applicable to both tangible and intangible offerings of an organization.

Brand Entities: Things that can be branded

Brands can be:

• People & Organizations
• Services / Physical Goods
• Sports, Arts & Entertainment
• Online products and services
• Geographic locations
• Retailers and distributors

Types of Brands

Generic product: no means of identifying the company – eg plain flour. Item characterized by plain label, with no advertising and no brand name

Manufacturers’ brand: brand name owned by a manufacturer or other producer (Example: Whirlpool, Heinz, Cadbury)

Private brands (Distributor, own label): brand name placed on products marketed by wholesalers and retailers (Kenmore, Craftsman are Sears private brand). These are developed by wholesalers, distributors, dealers, retailers e.g. Supermarkets, Argos, Gap

Family brand: brand name that identifies several related products (Heinz is a popular Family Brand)

Individual brand: unique brand name that identifies a specific offering within a firm’s product line and that is not grouped under a family brand (Colgate-Palmolive uses Individual Branding for Soaps)

Further Classification of Brands

Local Brands

• Has achieved success in a single national market.
• Can be created by local or global companies
• Can represent significant competitive hurdles to global companies entering a new market.
• Growing national pride (or ethnocentrism) can favour local products and brands.

International or ‘Pan-Regional’ Brands

Are offered in several markets in a particular region.

• Asian Branding: capitalizes on Asian pride and confidence; employ a mix of cultural symbols from different Asian countries; often utilizes also a Western connection.
• Euro Branding: marketed across Europe with the same brand name and formula, packaging, positioning and advertising strategy (standardization & homogenization)

What do Brands Convey?

Here’s what a brand does:

• It makes a promise to consumers.
• It serves as a driving, unifying force directing all functions of Marketing
• Differentiates a product from its competitors.

Brands convey several levels of meaning.

1. Attributes: brings to mind certain attributes – eg Mercedes – expensive, well built etc
2. Benefits: Attributes must be translated into functional and emotional benefits eg attribute ‘durable’ could be translated into functional benefit – won’t have to buy another car for years. Expensive – translates into emotional benefit – car makes me feel important and admired
3. Values: says something about the producer’s values. Mercedes – prestige, safety
4. Culture: may represent a certain culture. Mercedes – German culture – organised, efficient, high quality
5. Personality: can project a personality. Mercedes – no nonsense boss
6. User: suggests the kind of consumer who buys / uses product – eg 55 year old executive

(Kotler, 2003, p.419)

How Brands Create Competitive Advantage

Through product performance:

• Innovation
• Investment in R&D
• Development of new technologies

Examples: Sony, 3M, Gillette

Through Non-product related performance:

• Understand consumer motivations
• Appealing images
• Image associations to allow distinction

Examples: Coca-Cola, Lush, Burberry

Brand Concepts

Brand Attributes

Many companies identify specific attributes that should be linked to their brands and emphasized in brand communication. Brand Attributes are the bullet-point selling-type features listed in brochures or in an advertisement. They state the specific benefit to the user from purchasing or using the brand.

Physical attributes can be encountered in many areas like packaging, product performance or superior value. For instance, Domino’s Pizza promises 30 minutes delivery.

Brands are constructed of two main attributes

1. Intrinsic attributes: functional characteristics of a proposition, such as its shape, performance and physical capacity. If any of these intrinsic attributes were changed this would directly alter the proposition
2. Extrinsic attributes: if changed, do not alter the material functioning and performance of the proposition. These include the brand name, marketing communications, packaging, pricing, and mechanisms that enable customers to form associations and give meaning to the brand

(Baines, Fill and Rosengren, 2017, p.493)

• Target and insights (Consumers): Define target, need states, competitors and insights.
• Features (Product Features): Product-focused strengths, claims, differences
• Functional (Functional Benefits): “So what do I get?”
• Emotional (Emotional Benefits): “So how does that make me feel?”

Brand Characteristics:

Tangible attributes: Design, Performance, Ingredients /components, Size / shape, Price, Marketing communication

Intangible attributes: Perceived value, Brand image, Memories associated with the brand, Perceptions and impressions of the user. Brand managers primary responsibility is to influence intangible attributes. This is important for brand building because it is more likely to involve consumers emotionally, and it is also difficult for competitors to copy.

Brand Values

Brand Values are the emotional benefits and intangible benefits which connect the consumer to the brand.

• Reputation Value: Perceived quality of product features.
• Experiential Value: Customer experiences.
• Relationship value: Firm is a long term partner that has customer interests.
• Symbolic value: Imbibing of values and attitudes

Exploiting Brand Value: Focused brand leverage and Diversified brand leverage

.

• Focused brand leverage: Focused brand leverage depends on owning and broadening the category and capturing all occasions of use. E.g. Starbucks
• Diversified brand leverage emphasises creating a golden thread; building high-credibility personalities; and aggressive leveraging. E.g. Disney – Mickey Mouse, Goofy and other characters strike an emotional chord for all ages. It has leveraged beyond animation to include multiple theme park sites, professional sports franchises.

Brand Personality

Personality refers to a set of human characteristics that are associated with a brand name. Personality is how the brand behaves. Companies uses brand personality to identify with their ideal consumers. Brand has a personality, character, tone of voice, its own style, etc.

Personality-like traits associated with brands:

• Volvo – safety
• Nike – the athlete
• BMW – performance
• Levi’s 501 – dependable and rugged

Aaker’s brand personality framework suggests that there are five dimensions of brand personality – sincerity, competence, excitement, sophistication and ruggedness.

• Sincerity: Disney, Cadbury, Amazon
• Excitement: Tesla, Nike, Red Bull
• Competence: Google, Intel, Volvo
• Sophistication: Rolex, Gucci, Apple
• Ruggedness: Harley Davidson, Timberland, Jeep, Marlboro

Brand Loyalty

A successful brand is nothing more than a special relationship. Successful brands have good Customer Relationships and are able to retain Customers. Loyalty is the reward of consumer relationship.

• Brand Recognition: Consumer awareness and identification of a brand.
• Brand Preference: Consumer reliance on previous experiences with a product to choose that product again.
• Brand Insistence: Consumer refusals of alternatives and extensive search for desired merchandise.

Brand Equity

Brand Equity is the component of overall preference not explained by objectively measured attributes; and the set of consumer associations & behaviours that permits the brand to earn greater volume or margins than it could without the brand name.

Pros and Cons of Branding:

• Advantages: Increases loyalty, can charge HIGHER PRICES, successful brand names CAN link to product (e.g. “Bisleri”), can Launch complimentary products in same brand name – e.g. shampoo; conditioner; hairspray.
• Drawbacks: Cost of developing and establishing it, Can be copied/ near copied, could get a bad name as well as a good one if quality is not kept up