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MODULE 1

BRAND

A. Reading

Brands were originally developed as labels of ownership: name, term, design, and

symbol. However, today it is what they do for people that matters much more, how they

reflect and engage them, how they define their aspiration and enable them to do more.

Powerful brands can drive success in competitive and financial markets, and indeed become

the organization's most valuable assets.A number of different types of brands are recognized. A "premium brand" typically costs

more than other products in the category. An "economy brand" is a brand targeted to a high

price elasticity market segment. A "fighting brand" is a brand created specifically to counter a

competitive threat. When a company's name is used as a product brand name, this is

referred to as corporate branding. When one brand name is used for several related

products, this is referred to as family branding. When all a company's products are given

different brand names, this is referred to as individual branding. When a company uses the

brand equity associated with an existing brand name to introduce a new product orproductline, this is referred to as "brand leveraging." When large retailers buy products in bulk from

manufacturers and put their own brand name on them, this is called private branding, store

brand, white labeling, private label or own brand (UK). Private brands can be differentiated

from "manufacturers' brands" (also referred to as "national brands"). When two or more

brands work together to market their products, this is referred to as "co-branding". When a

company sells the rights to use a brand name to another company for use on a non-

competing product or in another geographical area, this is referred to as "brand licensing."

An "employment brand" is created when a company wants to build awareness with potential

candidates. In many cases, such as Google, this brand is an integrated extension of their

consumer.
http://en.wikipedia.org/wiki/Namehttp://en.wikipedia.org/wiki/Termhttp://en.wikipedia.org/wiki/Designhttp://en.wikipedia.org/wiki/Symbolhttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Price_elasticity_of_demandhttp://en.wikipedia.org/wiki/Market_segmenthttp://en.wikipedia.org/wiki/Corporate_brandinghttp://en.wikipedia.org/wiki/Family_brandinghttp://en.wikipedia.org/wiki/Individual_brandinghttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Product_lininghttp://en.wikipedia.org/wiki/Product_lininghttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Private_brandhttp://en.wikipedia.org/wiki/Store_brandhttp://en.wikipedia.org/wiki/Store_brandhttp://en.wikipedia.org/wiki/Private_labelhttp://en.wikipedia.org/wiki/Googlehttp://en.wikipedia.org/wiki/Image:Famous_brands.pnghttp://en.wikipedia.org/wiki/Namehttp://en.wikipedia.org/wiki/Termhttp://en.wikipedia.org/wiki/Designhttp://en.wikipedia.org/wiki/Symbolhttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Price_elasticity_of_demandhttp://en.wikipedia.org/wiki/Market_segmenthttp://en.wikipedia.org/wiki/Corporate_brandinghttp://en.wikipedia.org/wiki/Family_brandinghttp://en.wikipedia.org/wiki/Individual_brandinghttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Product_lininghttp://en.wikipedia.org/wiki/Product_lininghttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/Private_brandhttp://en.wikipedia.org/wiki/Store_brandhttp://en.wikipedia.org/wiki/Store_brandhttp://en.wikipedia.org/wiki/Private_labelhttp://en.wikipedia.org/wiki/Google


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In the field of marketing, brands originated in the nineteenth century with the advent of

packaged goods. According to Unilever records, Pears Soap was the world's first registered

commercial brand. Industrialization moved the production of household items, such as soap,

from local communities to centralized factories. When shipping their items, the factories

would brand their logotype insignia on the shipping barrels. These factories, generating

mass-produced goods, needed to sell their products to a wider range of customers, to a

customer base familiar only with local goods, and it turned out that a generic package of

soap had difficulty competing with familiar, local products.

Around 1900, James Walter Thompson published a house advert explaining trademark

advertising, in an early commercial description of what now is known as 'branding'. Soon,

companies adopted slogans, mascots, andjingles that were heard on radio and seen in early

television. By the 1940s, Mildred Pierce manufacturers recognized how customers were

developing relationships with their brands in the social, psychological, and anthropological

senses. From that, manufacturers quickly learned to associate other kinds of brand values,

such as youthfulness, fun, and luxury, with their products. Thus began the practice of

'branding', wherein the customer buys the brandrather than the product. This trend arose in

the 1980s 'brand equity mania'. In 1988, Phillip Morris bought Kraft for six times its paper

worth. It is believed the purchase was made because the Phillip Morris Company actually

wanted the Kraft brand rather than the company and its products.

Brand management is the application of marketing techniques to a specific product,

product line, orbrand. It seeks to increase the product's perceived value to the customer and

thereby increase brand franchise and brand equity. Marketers see a brand as an implied

promise that the level ofquality people have come to expect from a brand will continue with

future purchases of the same product. This may increase sales by making a comparison with

competing products more favorable. It may also enable the manufacturer to charge more for

the product. The value of the brand is determined by the amount of profit it generates for the

manufacturer. This results from a combination of increased sales and increased price.

1. Answer the questions briefly.

a. What did originally brands refer to?

b. Nowadays, what do brands relate to?

c. Mention types of brands that appear in the text?

d. In the nineteenth century, what was brand indicated?

e. What does brand management mean?

f. What does the word this in the last line refer to?

g. What does the word it in However, today it is what they do for people that

matters much more refer to?
http://en.wikipedia.org/wiki/Good_(accounting)http://en.wikipedia.org/wiki/Pears_Soaphttp://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/Factoryhttp://en.wikipedia.org/wiki/Livestock_brandinghttp://en.wikipedia.org/wiki/James_Walter_Thompsonhttp://en.wikipedia.org/wiki/Sloganhttp://en.wikipedia.org/wiki/Mascothttp://en.wikipedia.org/wiki/Jingleshttp://en.wikipedia.org/wiki/Radiohttp://en.wikipedia.org/wiki/Televisionhttp://en.wikipedia.org/wiki/Phillip_Morrishttp://en.wikipedia.org/wiki/Krafthttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_linehttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Qualityhttp://en.wikipedia.org/wiki/Good_(accounting)http://en.wikipedia.org/wiki/Pears_Soaphttp://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/Factoryhttp://en.wikipedia.org/wiki/Livestock_brandinghttp://en.wikipedia.org/wiki/James_Walter_Thompsonhttp://en.wikipedia.org/wiki/Sloganhttp://en.wikipedia.org/wiki/Mascothttp://en.wikipedia.org/wiki/Jingleshttp://en.wikipedia.org/wiki/Radiohttp://en.wikipedia.org/wiki/Televisionhttp://en.wikipedia.org/wiki/Phillip_Morrishttp://en.wikipedia.org/wiki/Krafthttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_linehttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Quality


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h. Elaborate the advantages of brand in a business.

i. What was known as branding in the early beginning of twentieth century?

j. When did the practice of branding begin?

2. State whether the statements below true (T) or false (F). If false, correct them.

a. The value of the brand is determined by the amount of workers who work for the

manufacturer.

b. Industrialization moved the production of household items, such as soap, from local

communities to centralized factories.

c. Brands can drive success in competitive and financial markets, and but they are not

the organization's most valuable assets.

d. Marketers see a brand as an implied promise that generate the people to continuewith future purchases of the same product.

e. Brand management aims to increase the product's perceived value to the customer

and thereby increase brand franchise and brand equity.

f. A brand targeted to a high price elasticity market segment and that costs more than

other products in the category is known as an "economy brand".

3. Match the definitions with their terms.

Definitions:

a. One brand name which is used for several related products.

b. A brand which is created specifically to counter a competitive threat.

c. Brand names which are given to all companys products.

d. The brand equity associated with an existing brand name which is used to introduce a

new product orproduct line.

e. The company's name which is used as a product brand name.

f. The brand name which is used by another company in another geographical area.g. The brand name that is put by large retailers on the product from manufactures.

h. Two or more brands that work together to market the product.

i. A brand name which refers to the awareness of a company to build with potential

candidates.

Brand-related Terminologies:

1) Fighting Brand

2) Corporate Branding

3) Family Branding
http://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/Factoryhttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Price_elasticity_of_demandhttp://en.wikipedia.org/wiki/Market_segmenthttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Product_lininghttp://en.wikipedia.org/wiki/Corporate_brandinghttp://en.wikipedia.org/wiki/Family_brandinghttp://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/Factoryhttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Price_elasticity_of_demandhttp://en.wikipedia.org/wiki/Market_segmenthttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Product_lininghttp://en.wikipedia.org/wiki/Corporate_brandinghttp://en.wikipedia.org/wiki/Family_branding


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4) Individual Branding

5) Brand Leveraging

6) Private Branding

7) Co-branding

8) Brand Licensing

9) Employment Brand

B. Structure

1. Change the verb in the bracket into the right form.

For example:

An existing strong brand name can be used as a vehicle for new or (modify) products.

An existing strong brand name can be used as a vehicle for new or modifiedproducts.

a. Brand orientation (be) a deliberate approach to working with brands, both internally

and externally.

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b. The most important driving force behind this (increase) interest in strong brands is the

accelerating pace of globalization.

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c. This has (result) in an ever-tougher competitive situation on many markets.

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d. A products superiority is in itself no longer sufficient to (guarantee) its success.

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e. The fast pace of technological development and the increased speed with which

imitations turn up on the market have dramatically (shorten) product lifecycles.

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f. The consequence is that product-related competitive advantages soon risk being

(transform) into competitive prerequisites.

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g. For this reason, increasing numbers of companies (be look) for other, more enduring,

competitive tools such as brands.

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h. Brand Orientation (refer) to "the degree to which the organization values brands and

its practices are oriented towards building brand capabilities.

-------------------------------------------------------------------------------------------------------------i. A brand which is widely known in the marketplace (acquire) brand recognition.

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http://en.wikipedia.org/wiki/Individual_brandinghttp://en.wikipedia.org/wiki/Private_brandhttp://en.wikipedia.org/wiki/Brand_orientationhttp://en.wikipedia.org/wiki/Product_lifecyclehttp://en.wikipedia.org/wiki/Competitive_advantagehttp://en.wikipedia.org/wiki/Individual_brandinghttp://en.wikipedia.org/wiki/Private_brandhttp://en.wikipedia.org/wiki/Brand_orientationhttp://en.wikipedia.org/wiki/Product_lifecyclehttp://en.wikipedia.org/wiki/Competitive_advantage


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j. 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.

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k. One goal in brand recognition (be) the identification of a brand without the name of

the company present.

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2. Fill in the blank with the right word form from bracket.

For example:

Individual brand names naturally allow greater ______ (flexible) by permitting a

variety of different products.

Individual brand names naturally allow greaterflexibilityby permitting a variety

of different products

a. Many brand managers limit themselves to setting ______ (finance) objectives.

They ignore strategic objectives because they feel this is the ______(responsible)

of senior management.

b. Most product level or brand managers limit themselves to setting short term

objectives because their ______ (compensate) packages are designed to reward

short term ______ (behave). Short term objectives should be seen as milestones

towards long term objectives.

c. Often product level managers are not given enough ______ (inform) to

construct ______ (strategy) objectives.

d. In a ______ (diversify) company, the objectives of some brands may conflict

with those of other brands. Or worse, corporate objectives may conflict with the

______ (specify) needs of your brand.

e. This is ______ (particular) true in regard to the trade-offbetween ______

(stable) and riskiness.

f. The brand manager also needs to know senior management's ______

(harves) strategy. If corporate ______ (manage) intends to invest in brand equity

and take a long term position in the market, it would be a mistake for the product

______ (manage) to use short term cash flow objectives.

g. Only when these conflicts and tradeoffs are made explicit, is it possible for all

levels of objectives to fit together in a ______ (cohere) and mutually ______

(support) manner.

h. Many brand managers set objectives that optimize the ______ (perform) oftheir unit. This is particularly true where compensation is based ______ (primary)

on unit performance.
http://en.wikipedia.org/wiki/Trade-offhttp://en.wikipedia.org/wiki/Trade-off


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C. Vocabulary Building

Fill the blank with the words available in the box.

In a market fragmented with many brands, a supplier can choose to launch new brands

apparently competing with its own, extant strong brand (and often with an identical product),

simply to ______ a greater share of the market that would go to ______ brands. The

rationale is that having 3 out of 12 brands in such a _______ will give garner 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 ______, a supplier pioneering a new market which

it _______ will be particularly attractive may choose _______ to launch a second brand in

competition with its first, _______ to pre-empt others entering the market.

Individual brand names naturally allow greater ______ by permitting a variety of

different products, of differing quality, to ______ without confusing the consumer's perceptionof what business the ______ is in or diluting higher quality products.

Once again, Procter & Gamble is a leading exponent of this______, running as many

as ten detergent brands in the US market. This also _____ the total number of "facings" it

receives on supermarket shelves. Sara Lee, _____, uses it to keep the very different parts of

the business separatefrom Sara Lee _____ 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.

.

D. Speaking

There are several problems associated with setting objectives for a brand or product

category. Choose one of the problems as your conversation topic with your friend.

Many brand managers limit themselves to setting financial objectives. They ignore

strategic objectives because they feel this is the responsibility of senior management.

Most product level or brand managers limit themselves to setting short term

objectives because their compensation packages are designed to reward short term

behavior. Short term objectives should be seen as milestones towards long term

objectives.

Often product level managers are not given enough information to construct strategic

objectives.

Obtain minor market manifestationbelieves immediately in order flexibilitybe sold company philosophy increaseson the other hand cakes
http://en.wikipedia.org/wiki/Sara_Leehttp://en.wikipedia.org/wiki/Marriott_Internationalhttp://en.wikipedia.org/wiki/Ramadahttp://en.wikipedia.org/wiki/Sara_Leehttp://en.wikipedia.org/wiki/Marriott_Internationalhttp://en.wikipedia.org/wiki/Ramada


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It is sometimes difficult to translate corporate level objectives into brand or product

level objectives. Changes in shareholders' equity are easy for a company to calculate.

It is not so easy to calculate the change in shareholders' equity that can be attributed

to a product or category. More complex metrics like changes in the net present value

of shareholders' equity are even more difficult for the product manager to assess.

In a diversified company, the objectives of some brands may conflict with those of

other brands. Or worse, corporate objectives may conflict with the specific needs of

your brand. This is particularly true in regard to the trade-off between stability and

riskiness. Corporate objectives must be broad enough that brands with high risk

products are not constrained by objectives set with cash cows in mind (see B.C.G.

Analysis). The brand manager also needs to know senior management's harvesting

strategy. If corporate management intends to invest in brand equity and take a long

term position in the market (i.e. penetration and growth strategy), it would be a

mistake for the product manager to use short term cash flow objectives (ie. price

skimming strategy). Only when these conflicts and tradeoffs are made explicit, is it

possible for all levels of objectives to fit together in a coherent and mutually

supportive manner.

Many brand managers set objectives that optimize the performance of their unit

rather than optimize overall corporate performance. This is particularly true where

compensation is based primarily on unit performance. Managers tend to ignore

potential synergies and inter-unit joint processes.

E. Writing

After reading the text below, write a summary of it in 200-300 word using your own language.

BRANDING AND THE INTERNET

With the internet as the primary source of new business for many companies, a new

curve has been thrown at marketers and executives in charge of development and protection

of corporate branding.

Many computer savvy students have registered all names they assumed would hold

future value. This includes virtually all dictionary terms and before the courts had rules, many

corporate names were registered. Some companies have purchased a domain name that

matched their brand in the domain aftermarket at a premium price in excess of the cost of

registration.

Fortunately domain squatting has not hurt companies that have clearly distinguishable

brands that have been victims of this. Courts will rule in favor of clear cases. However many


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cases are not as clear and in cases of a generic term or terms, the person that originally

registered the name, although it may be someones brand, may keep it. For instance had

Amazon not owned the domain name, a person would have the right to own it and post a

picture of a rain forest if they so wished. This is because a company cannot restrict use of

common words when trade-marking. It must be within a limited scope. For a reverse of the

domain ownership, it would have to be proven the user was infringing on a trademark, and

that is not always the case.

The internet has honored the right to register a domain name of a generic term to an

individual or company and to use it for what it is best suited. While a person cannot hope to

keep the name "BurgerKing.com" from being given to a national brand if it were to be a court

case, Burger King cannot expect to be entitled to Burgers.com

Similarly while Dominos Pizza can expect to obtain rights to a nationally know Dominos

Pizza domain name, it cannot prevent a man name Domino who owns a Pizza place from

registering it and using it. If the purpose is to dilute a brand and confuse a customer on a

trademark, the chance is the domain name will go to the holder of the trademark. However if

a Mr. Domino of Kansas wants to register DominosPizza.com, before Dominos the national

chain does or did, then it would fairly belong to Dominos Pizza of Kansas. A national

company is no more entitled to the domain name than is a small business. Their are also

other extensions such as .net, .org, .us, .info, .biz and more. No one is entitled to a

commonly used phrase with a dot com extension. Therefore a brand is now subject to

making a deal with a domain owner if they wish to have the domain name that they are not

entitled to.

For new companies, creating a brand now must include first checking to see if the

domain name will be available or can be purchased before investing heavily and building

upon the name. A company would not spend millions of dollars in advertising on "Fast

Computers" if it could not register the domain name. It would be better to pick a brand that

could be matched with an available domain name. By synchronizing a brand with a domain

name, it is easy to market, gain and keep customers. Therefore the use of a domain nameshould be carefully considered prior to development of any new brand.

F. Case Study

The Re-branding of Skoda

Introduction

The re-branding of Skoda provides a useful case study of the challenges faced by

brands wishing to reposition themselves

Remember the Skoda jokes?- What do you call a Skoda with a sun-roof?


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- Answer: A skip

- Why does a Skoda have a heated rear windscreen?

- Answer: To keep your hands warm when you push it

- What do you call a Skoda with twin exhaust pipes?

- Answer: A wheelbarrow

Critics of the Skoda would be surprised to hear the Skoda is now one of the fastest-growing

car brands in the UK motor industry. The Czech car company boosted its sales in the UK in

2001 by 24% as opposed to the average market growth of 10.7%. This built on growth of

34% in 2000. How has this been achieved?

Background

Skoda had a monopoly in car manufacturing in Czechoslovakia until the 1989 'Velvet

Revolution'. After this the Czech government started looking for a commercial partner to

revitalize its Skoda factories. In 1991, Volkswagen took a 30% stake in Skoda and started

work in training and educating the workforce to Western quality standards. It invested over

2 billion in the plant, research, development and new models. Ten years later, in 2001, VW

took total control of the business.

The first two launches from the new Skoda camp were well-received by the automotive

press. The Felicia - launched in 1994 - was built as an old-style Skoda, but enjoyed the

benefit of VW features. The 1998 Octavia was built on the VW group platform. The costs of

the improved VW car structure pushed up Skoda prices. The cars carried a higher price tag

and Skoda needed to convince consumers that this price was worth paying.

A VW marketing manager working for Skoda explained: "We needed to move away

from being a cheap brand to being a value-for-money brand. At the same time, we badly

needed to find our own positioning within the group, rather than just trading on being part of

the VW Group. Otherwise, we might just as well have re-branded ourselves as VW, with very

little reason for existence."

Launch of the Octavia

Skodas first VW-backed model was the Octavia. It was launched in the UK with a

10m promotional campaign- Skoda's highest-ever spend on a marketing campaign.

However, the Octavia launch was a failure. Just 6,154 Octavia cars were sold over the year

following the car's launch, despite the fact that the car achieved almost unanimously good

reviews. Market research at the time suggested that sixty per cent of people said they would

never buy a Skoda. Only a fifth of early Octavia buyers were under the age of 45 and a third

had previously owned Skoda cars. Skoda's image was old, unfashionable and out of sync

with its products.


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VW's Strategy

VW resisted the temptation to scrap the Skoda brand altogether. Despite its poor image

in the UK, Skoda still commanded respect in Eastern Europe and held its own in other

Western European countries. The Skoda brand also had high brand awareness in the UK

even if it was for the wrong reasons and a reliable distribution channel through a

network of independent car retailers. The next product launch was the Skoda Fabia. It was

launched with a much smaller marketing campaign and an advertising message that poked

gentle fun at Skodas customer perception: "The Fabia is a car so good that you won't

believe it's a Skoda"

Key elements of the promotional mix were as follows:

The Fabia was launched with a number of television, print and poster ads

The initial TV campaign ran for four-and-a-half weeks and the print and poster

campaign ran for two weeks.

Expensive TV and print campaigns were supported by both PR and direct mail

campaigns

The PR push targeted the consumer press and attempted to get journalists to

discuss Skoda in a positive light

The direct mailings tried to build on loyalty levels among Skoda drivers and get

across the brand's new image.

AutoExpress magazine carried a competition to win a Skoda car that generated

27,000 responses. The respondents who didn't win the car were profiled to check

their similarity to the average Skoda driver and followed up. Hot prospects received

a scale model as a consolation prize and an invitation to test drive a full-size model.

Impressive results

The results of the marketing campaign were impressive. By the end of 2000, more than

11,000 Fabias had been sold and even Octavia sales were seeing a 29% increase on the

previous year. In July 2000, the near impossible finally happened - Skoda had a waiting-listfor its cars. There was also a less obvious, but equally important shift in the public's

perception of Skoda. Only 42% of those polled after the campaign said they would not

consider buying a Skoda. Many UK customers now dont see a Skoda in front of them they

see a cut-price VW.

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