People do not buy products, they buy brands. Successful organizations have the power of their brands as the cornerstone of their success. When brands are treated as an asset, companies begin to see the power of branding, including what it can do for them. This commitment can create a more effective and unified organization. More and more companies are aligning their corporate strategy and goals, internal and external communications and operations behind their brand to help drive revenue and increase customer loyalty
Brand V/S Product
It is important to contrast a brand and a product. According to Philip Kotler, well-regarded marketing academic, a product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Thus, a product may be a physical good (e.g., a cereal, tennis racquet or automobile), service (e.g., an airline, bank, insurance company), retail store (e.g., a department store, specialty store, or supermarket), person (e.g., a political figure, entertainer, or professional athlete), organization (e.g., a non profit organization, trade organization or arts group), place (e.g., a city, state, or country), or idea (e.g., a political or social cause).
|
Product |
Brand |
|
Term used to describe all goods, services, and knowledge sold. |
A term, sign, symbol or design or a combination of them intended to identify the products or services of one’s business or group of businesses and differentiate them from those of competitors |
|
Products are bundles of attributes (features, functions, benefits, and uses) and can be either tangible, as in the case of physical goods, or intangible, as in the case of those associated with service benefits, or can be a combination of the two |
Brands are bundles of functional benefits, emotional benefits and self expressive benefits. It is the sum of the expectations that a customer or stakeholder has when purchasing a product or dealing with an organization |
|
Product =
Commodity A product is a
produced item always possessing these characteristics: • Tangibility •Attributes and Features |
Brand = “Mind
Set” In essence, the brand is a piece of real estate you occupy in a person’s mind, and the related impressions it leaves behind. |
|
A product can be outdated quickly |
A brand if properly managed can be timeless |
|
Something available to the consumer undistinguished from others in the category |
A product which is distinct from others in its category |
|
The physiological response to a product is important |
The psychological response to a brand can be as important as the physiological response |
Kotler defines five levels to a
product
1.
The core product level is the fundamental need or want
that consumers satisfy by consuming the product or service.
2.
The generic product level is a basic version of the
product containing only those attributes or characteristics absolutely
necessary for it’s functioning but with no distinguishing features. This is
basically a stripped-down, no-frills version of the product that adequately
performs the product function.
3.
The expected product level is a set of attributes or
characteristics that buyers normally expect and agree to when they purchase a
product.
4.
The augmented product level includes additional
attributes, benefits, or related services that distinguish the product from
competitors.
5. The potential product levels include all of the augmentations and transformations that a product might ultimately undergo in the future.
Kotler notes that competition
within many markets essentially takes place at the product augmentation level
because most firms can successfully build satisfactory products at the expected
product level. Another, well-respected marketing academic, Harvad’s Tel Levitt,
concurs and argues that “the new competition is not between what companies
produce in their factories but between what they add to their factory output in
the form of packaging, services, advertising, customer advice, financing,
delivery arrangements, warehousing, and other things that people value.
A brand is a complex symbol that
can convey up to six levels of meaning:
1.
Attributes: A brand brings to mind certain attributes.
Mercedes suggests expensive, well-built, well-engineered, durable,
high-prestige automobiles.
2.
Benefits: Attributes must be translated into functional
and emotional benefits. The attribute “durable” could translate into the
functional benefit “won’t have to buy another car for several years”. The
attribute “expensive” translates into the emotional benefit “The car makes me
feel important and admired.”
3.
Values: The brand also says something about the
producer’s values. Mercedes stands for high performance, safety, and prestige.
4.
Culture: The brand may represent a certain culture. The
Mercedes represents German culture: organized, efficient, high quality.
5.
Personality: The brand can project a certain
personality. Mercedes may suggest a no-nonsense boss (person), a reigning lion
(animal), or an austere palace (object).
6.
User: The brand suggests the kind of consumer who buys
or uses the product. We would expect to see a 55-year-old top executive behind
the wheel of a Mercedes, not a 20-year-old secretary.
A brand is therefore a product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need. These differences may be rational and tangible - related to product performance of the brand - or more symbolic, emotional, and intangible - related to what the brand represents.
Extending our previous example, a branded product may be a physical good (e.g., Kellogg’s Corn Flakes cereal, Prince tennis racquets or Ford Tarus automobile), a service (e.g., United Airlines, Bank of America, or Allstate insurance), a store (e.g., Bloomingdale’s department store, Body Shop specialty store, or Safeway supermarket), a person (e.g., Bill Clinton, Julia Roberts, or Michael Jordan), a place (e.g., the city London, the state of California, or country of Australia), an organization (e.g., the Red Cross American Automobile Association, or the Rolling Stones), or an idea (e.g., abortion rights, free trade, freedom of speech).
As Interbrand’s John Murphy puts it: Creating a
successful brand entails blending various elements together in a unique way -
the product or service has to be of high quality and appropriate to consumer
needs, the brand name must be appealing and in tune with the consumer’s
perceptions to the product, the packaging, promotion, pricing and all other
elements must similarly meet the tests of appropriateness, appeal, and
differentiation.
Brand Levels Pyramid
Definition of Brand
A name, a term, a symbol or a design or a combination of these, that is intended to identify the products or services of one business or group of businesses and to differentiate them from those of competitors.
The sum of the expectations that a customer or stakeholder has when purchasing a product or dealing with an organization.
A product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need
A brand is an expectation or a promise waiting to be fulfilled. Brands are shorthand for trust.
The brand is a piece of real estate you occupy in a person’s mind, and the related impressions it leaves behind
Process Of Branding
Branding goes beyond the execution of advertising and logos, touching practically every area of an organization-from internal employee communications and operational facilities to dealerships, the Web, as well as the products and services that are being sold Branding is about how your business motivates a consumer to make a purchase
When does a brand take on something special and become a super brand or a power brand. Power brands compete above the shifting sands of product comparison and function because they market in a way that not only helps consumers in their daily lives but also adds meaning to their lives. This position above the fray gives power brands a sustainable competitive advantage and makes them much more profitable.
There are many instances where brand names become so recognized that they actually become a generic name for that type of product e.g. Cadbury for chocolate, Colgate for toothpaste, Dettol for an antiseptic or Xerox for photocopying list is endless.
Power brands are successful
because they create consumer enthusiasm, and then use it to drive ongoing
purchase The key to brand enthusiasm is to move beyond your product's function
& build an emotional connection with consumers This happens when the brand plays a larger, more
meaningful role in consumers' lives by going beyond traditional marketing
tactics to develop an empathetic, personal understanding Brands need vivid
insight into what consumers care about, beyond demographic facts and psycho
graphic profiles — their concerns,
values, and emotional rewards
Consumers are human beings. They know brands, express about brands, think about brands, feel about brands, compare brands, choose brands, recommend brands, reject brands, buy brands, and do not buy brands through a combination of
• Brand name
•
Brand looks
•
Brand associations
•
Brand personality
•
Brand attitude
Brand Relationship is the ultimate achievement-need of branding. All other aspects (e.g. Brand Positioning) might happen but if this does not happen, the job is not complete.
Brand Relationship happens if 'image' and 'attitude' for a brand exist. It is the resultant effect of these two aspects of a brand.
• Brand Attitude defines what the brand thinks about the consumer, as per the consumer. A brand may have 'attitude' on one or more aspects.
• Brand Image includes two aspects of a brand—its associations and its personality. A brand may have image on one or more aspects.
• Brand Associations include all that is linked up in memory about the brand. It could be specific to attributes, features, benefits or looks of the brand. A brand may have a range of associations. But the one association that stands out in memory and differentiates it becomes the 'position' of the brand. A brand may have one or more associations but no 'position'.
For a brand to have brand relationship, it should
have 'image'. And for 'image' a brand should have 'association'. If among its
'associations', a brand has a 'position' it is of great advantage. However, if
a brand does not have a 'brand position' it does not mean that it would not
have brand image or brand relationship. In other words, 'brand position' is not
a sufficient condition for brand relationship, but a 'highly desirable'
condition.
• Brand Looks, which have a role to play in forming reinforcing brand associations are facilitated by two key properties of a brand—its name and its symbol. While brand name is a necessary condition for existence of brand relationship, the same is not true for brand symbol. However, if the latter exists it helps the process of brand relationship and reinforces it.
• Brand symbol includes two visual signals of a brand—its character (e.g. Amul girl, Pillsbury doughboy) and its logo.
• 'Necessary' aspects for brand relationship to
exist are:
—brand name
—brand
associations
—brand attitude
'Highly desirable' aspects for brand
relationship to exist are (excluding the 'necessary' aspects):
—brand position
—brand symbol
The model is a process. It has linked up steps. It is dynamic. It never ends. And it is all to do about managing the minds of the people and aspects about a product, thus creating brand relationship, and defining a brand.
Advantages to the Producer
a. The
brand helps to build loyalty for the product among the customers. Brand loyal
customers are a source of repeat sales.
b. Brand-loyal customers resist the temptation to change the
brand"
product and are insulated against the products of
the competitors.
c. A
brand enables a company to build a reputation for its products and creates an image in the public mind.
d. It
facilitates the introduction to new products in the market.
e.
Branding is necessary for the sales promotion and
building a demand for the product among the customers in a selective manner.
f.
A brand
distinguishes and differentiates a product from the goods of competing companies.
g. Branding assists in the maintenance of a proper control over the price, quality and other features of the product.
Limitations for the Producer
1. The
responsibility for maintaining the quality and the standard of the product
falls on the producer. He should continue to maintain the same standard and
quality. If he fails to do so, the customer will identify the brand owner, that
is, the producer, and will complain to him. If the quality deteriorates, the
customer may switch over from the product.
2. Some
products, such as raw materials, do not easily lend themselves to branding. It
is, difficult, therefore, to distinguish and differentiate them
3. The
manufacturer, in order to create an acceptance of the brand by the consumers,
has to incur heavy expenditure to popularize it and some time may have to sell
the product to wholesalers unbranded. The wholesalers sell the goods under
their own brands.
4. The
retailer and the wholesaler may not be willing to stock the goods if the brand
is not popular. If the brand is very popular, they may refuse to stock' the
goods on the ground that their commission would be small.
Advantages to the Consumers
a. Brands
distinguish and differentiate the goods of different manufacturers and this
fact enables the consumers to choose their products.
b. Consumers
can finally select the brand they prefer after using different branded goods
and develop brand loyalty.
c. The
branded goods assure a certain quality and standard, which an consistently
maintained by the producer.
d. Certain
brands acquire a great popularity. The customer buying these branded goods
derives the immense satisfaction of prestige and status.
e. For
the customer, shopping becomes easy
and pleasurable, especially if he has developed brand-loyalty.
Limitations for the
Consumer
1. In
a competitive market, there are many brands for the same or similar products,
and it may become difficult and confusing to choose the proper brand.
2. Popular
branded goods cost more, which is unreasonable. Certain types of brands become
very costly and are out of reach of many people.
3. Sometimes
quality and standard deteriorate and are not maintained at the same level.
4. Manufacturers
try to pass on sub-standard goods by adopting high pressure sales and
advertising campaigns for their brands.
Types Of Brands
F
Manufacturer’s Brands: Name is owned and
advertised by the manufacturer or under their guidelines e.g. Godrej Cold Gold,
Tide, Ariel, Chevrolet Travera.
F
Distributor’s Or Private Brands: Name is
owned and controlled by a wholesaler or retailer e.g. Chintamani’s, Apna Bazar,
Bazee.com.
Advantages Of Private Branding
The advantages and disadvantages
vary depending to which market sector you are talking to:
Advantages to the retailer
1.
Reduce producer domination in the marketplace
2.
Create more dependence on the retailer by the consumer.
3.
Customer sales increase.
4.
An opportunity to differentiate and provide variety
5.
Customer loyalty in a situation where you can avoid
comparisons
6.
Positive image building
7.
More freedom in your pricing strategy
8.
Positive control over stock keeping inventory
9.
Better bargaining position in a depressed economy
10. The
potential disadvantages for the retailer could be
11. A
negative backlash on their image
12. Lack
of standardization of private labels between categories upsets the customer
13. Financial
control concerns
14. Lower
turnover, resulting in lost total sales per linear metre
15. Excessive
focus on the private label at the expense of other products
16. The
retailer could be perceived as less powerful in the marketplace as they don’t
promote recognized brands
17. Low
price equates to low quality
18. Lack
of financial support from suppliers
19. If
the product fails, the consumer doesn’t forgive you
20. The
producer and supplier also need to consider their positioning. Many producers
will be producing a recognized brand leader and a private label.
Advantages to the producer
1)
It keeps out a competitor from using this opportunity
2)
They can get into the marketplace at a lower cost
3)
They have a secondary product that gives the company a
new profile
4)
They can produce a competitor product to position
against their own market leader
5)
It is an opportunity for smaller suppliers who don’t
have the promotional capabilities to enter a bigger marketplace
6)
The supplier can get more shelf space in the store
7)
An opportunity to build strategic partnerships with
selected retailers
8)
The disadvantages to the producer could be
9)
The relationship with the retailer could be threatened
if the product doesn’t perform
10)
They have created a competitor to their own brand
11)
Other suppliers may introduce cheaper private labels
and drive margins downwards
12)
High inventory costs and low profit margins
Advantages to the consumer
Customer, generally hesitate when
a private label enters the marketplace. They prefer their favorite brand. Their
major shift to private labels occurs when they personally feel economic
deterioration.
The main consumer advantages are
a)
A guarantee of the same quality for a serious price
differentiation
b)
More variety within the category
c)
A trusted retail name equals trust in the product
d)
Product provides a need based on a want, where products
were missing within the category, e.g. ethnic foods, diet foods, sugar free
foods and so on.
Disadvantages
for a consumer
a.
Low quality product - Consumers may have a prejudice to
low price equaling low quality
b.
Previous customer failures could effect the whole
private label range in a store e.g. if their cereals aren’t good, then their
jam will be the same.
Why Does A Brand Matter?
Manufacturers
Simplifies
handling or tracing Legal protection
of unique features Signal of quality
level to satisfied customers Means of endowing
products with unique associations Competitive
Advantage Financial Returns |
Consumers Identifies the Product Source Assignment of responsibility to maker Search cost reducer Signal of Quality Promise, bond, or pact with the make of the product |
No comments:
Post a Comment