chapter

1212

BrandingBranding

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

Branding — Today’s Objectives

Objectives will be to:

Understand what a brand is and how the 2Is affect branding

Understand what brand equity is and how it is measured

Discuss how marketing programs build brand equity

Examine the seven-step branding process

Review two case studies in online branding

Discuss the effects of brand on the four customer relationship stages

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Chapter 12: Branding

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Some Internet Brands Have Become Major Players

Source: www.brandinstitute.com/bi_site/news_release_megabrands1098.htm

Exhibit 12.1: Examples of Internet Brands

Exhibit 12.2: Case Studies of Successful Online Branding Efforts

Branding

Online Branding and Selling Online

Intermediary/ Vertical Portal

e-Commerce

Business-to-

Consumer Ragu

American Airlines

Yahoo! CDNow

Business-to-

Business Boeing Cisco Systems Avnet NexPrise

Established as Traditional Brand

Established as Online Brand

Source: PricewaterhouseCoopers Moneytree Report 2000.

IndividualizationIndividualization InteractivityInteractivity

CommunityCommunity

Interactivity creates value because the brand is tailored to the individual

Customers gain a sense of control with respect to the nature and timing of their interactions with the brand

There is a danger that the brand will stray from its core personality

Responsiveness becomes a key brand attribute as customers recognize that their concerns are heard and responded to across multiple channels

The frequency of interaction is increased — leading to the need to freshen content and target messages to specific usage occasions

Customers expect the brand to evolve in response to their needs and desires

Exhibit 12.3: The 2Is and Branding

Should Offline Firms Create New Online Brands?

Keep the Same Brand Build a New Brand

It takes an enormous amount of time and money to build a strong brand name

Customers who purchase online are assured that services are available offline

It is difficult to uncover interesting new brand names

The online brand and the offline brand can have a synergistic effect

Target customers will not be confused by brand offerings appearing online

Using an existing brand limits the growth of the user base

Existing offline brands “don’t get the Net”

It is possible to sign up more partners when a third-party name is used

Point-Counterpoint

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Quotes on Online Branding

“E-branding is more important [than e-commerce]. And it must come first. Because few people will buy your stuff – online or off – unless you are top-of-mind.” – Annette Hamilton, Executive Producer, ZDNet

“Brand is the price of entry [to the Internet], not the winning strategy.” – Dylan Tweney, infoNet

“By the time your potential customers log on, they already know what they’re looking for, and they often know from whom they want to buy it. … They’re just not listening to branding messages anymore.” – Michael Fischler, Principal, The Pubs Group

Quotes on Online Branding (cont.)

“Brands stand as comfort anchors in the sea of confusion, fear, and doubt. In dynamic markets, strong brands have more value than ever, precisely because of the speed with which these markets move.” – Chuck Pettis, Technobranding

“It took more than 50 years for Coca-Cola to become a worldwide market leader, but only five years for online search engine Yahoo to gain market dominance. The role of the brand has changed dramatically and has created a vacuum between offline and online brands.” – Mark Lindstrom, Executive Director, ZIVO

“A company’s website is the brand. It’s the hub of consumer experience, the place where all aspects of a company, from its annual report to its products to its support, intersect. It’s the company in a nutshell, all there in a way that just is not possible in the analog world.” – Sean Carton, Carton Donofrio Interactive

Product, Price, Community, Communication and Distribution Programs

Wraparounds

Exhibit 12.4: A Simple Conceptual Model of Brand Equity

Core Product/ Core Product/ ServiceService

Source: Keller (1996), Aaker (1996), Strategic Market Research Group, Marketspace Analysis

. . . provides positive consumer responses . . .A good brand . . .

Customer Benefits

Confidence

Loyalty

Satisfaction

Customer Benefits

Confidence

Loyalty

Satisfaction

Firm Benefits

Reduced marketing costs

Increased margins

Opportunity for brand extensions

Firm Benefits

Reduced marketing costs

Increased margins

Opportunity for brand extensions

. . . and benefits both target customers and firm

Brand Awareness

Depth

Breadth

Brand Awareness

Depth

Breadth

Brand Associations

Strength– Relevant– Consistent

Valence

Uniqueness– Memorable– Distinctive

Brand Associations

Strength– Relevant– Consistent

Valence

Uniqueness– Memorable– Distinctive

Fogdog Brand Perceptions

Emphasize prices and selection benefits

Selective distribution Competitive pricing

Exhibit 12.5: A Model of FogDog Branding

Gift shopping service MyFogdog discounts and

benefits “How to buy” help Discussion groups by sport Fogdog Fetch helps you find

the right product

Low prices Selection breadth and depth

Product, Price, Community, Communication and Distribution Programs

Wraparounds

Core Product / Core Product / ServiceService

Do Strong Online Brands Matter?

A Strong Brand Essential Strength of Brand

Is Not That Important

A strong brand name provides a clear presence in the market

Strong brands attract customers

Strong brands carry positive associations with consumers

Clear brands are associated with higher conversion rates

All current online “winners” have strong brands

Alliances — not strong brands — are the key to winning in the marketplace

Readily available third-party evaluators will increasingly influence online consumption

Speed to market is more important than branding

The trend toward customization is leading to an environment where the meaning of a “mega-brand” is no longer relevant

Current online winners may have strong brands, but so do a number of “big losers”

Point-Counterpoint

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Exhibit 12.7: Marketing Programs to Build Brand Equity

Brand Equity Brand Equity

Product Product

Pricing Pricing

Communication Communication

Promotional Program

Promotional Program

Distribution Distribution

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Clearly Define the Target AudienceClearly Define the Target Audience

Exhibit 12.8: A Seven-Step Branding Process

Step 1

Step 3

Step 2

Step 4

Step 5

Step 6

Step 7

Understand the Target CustomerUnderstand the Target Customer

Understand the CompetitionUnderstand the Competition

Design Compelling Brand IntentDesign Compelling Brand Intent

Identify Key Leverage Points in Customer Experience

Identify Key Leverage Points in Customer Experience

Execute the Branding StrategyExecute the Branding Strategy

Establish Feedback SystemsEstablish Feedback Systems

Exhibit 12.9: Similarities & Differences in Offline vs. Online Branding

Branding Element

Offline Online

1. Clearly Define the Brand Audience

Limited to manageable number of segments to prevent inconsistent messaging

Could include larger number of segments based on values or interests rather than demographics

2. Understand the Customer

Requires thorough understanding of environment, desired purchase and usage experience

Requires thorough understanding of desired purchase and usage experience in both the offline and online environment

3. Understand the Competition

Requires monitoring of competitor advertisements and activities

Competitor advertisements and some activities can be directly observed online

4. Design Compelling Brand Intent

Brand intent (desired positioning) designed to address the needs and beliefs of target segments

Greater opportunity for customization of key messages

5. Identify Key Leverage Points in Customer Experience

Buying process is typically a simplified representation of customer segment behavior with static leverage points

Buying process tends to be more dynamic and flexible

6. Execute the Branding Strategy

Strong, positive brands are built up over time

Image reinforced through variety of offline media

Marketing strategy includes plan for sequenced growth and adjustment of brand based on changing customer needs

Building brand awareness requires significant investment

Building brand loyalty takes time offline, especially because early customer receptivity to brands is difficult to assess (and usually involves market research)

Online interactions bring in added concerns of security and privacy

Limited familiarity with online brands makes fostering trust more difficult

With the ability to customize, one customer’s brand image may be different from another customer’s brand image

Customization for multiple segments and opportunity for early recognition of the changing customer requires a corresponding tailoring of brand intent

Building brand awareness requires significant investment, especially for those competitors who are not first in their category online

Brands have the potential to generate loyalty more quickly, especially if customers are targeted effectively

7. Establish Feedback Systems

Collecting and analyzing customer feedback is more time-consuming

Sophisticated tools exist for tracking online; allow for anonymous, interactive, quick feedback

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Exhibit 12.10: Citibank Online

Exhibit 12.11: Citibank Vs. Chase: Assessment of Key Branding Elements

Exhibit 12.12: Citibank Vs. Chase Assessment of Key Brand Attributes

Exhibit 12.13: CBS MarketWatch.com

Exhibit 12.14: CBS Marketwatch.com Vs. Bloomberg.com: Key Branding Elements

Exhibit 12.15: CBS Marketwatch.com Vs. Bloomberg.com: Key Brand Attributes

Exhibit 12.16: Brand as a Moderating Variable

Marketing Levers

Marketing Levers

Relationship Stages

Relationship Stages

For advertising, brand can enhance awareness

BrandBrand

Enhances or Detracts

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Branding and Four Key Stages of Customer Relationships

Offline advertising

Web price discount

Increased number of channel intermediaries

Online billboards

Direct mail

Targeted price promotions

Efficient site structure

Volume discounts

Personalized pages

Loyalty programs

Discontinue pricing discounts

Reduce advertising expenditures

Identify “departing friends”

Reduce customer care

AwarenessAwareness Exploration/Expansion

Exploration/Expansion CommitmentCommitment DissolutionDissolution

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Exhibit 12.17: EBay Vs. Amazon.com Auctions: Key Branding Elements

Exhibit 12.17: EBay Vs. Amazon.com Auctions: Key Branding Elements

Exhibit 12.18: EBay and Amazon.com Auctions: Key Attributes

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion

Branding — Conclusion

Branding is fundamentally different from the other marketing activities — product, pricing, communication, community and distribution — in three ways:

Brands are reflections or outcomes of the firm’s marketing activities

Unlike the other activities, branding is an integral part of every marketing activity and strategy

Strong brands can be used to enhance the effectiveness of all other marketing activities

The branding process includes seven steps: 1) clearly define the target audience, 2) understand the target customer, 3) understand the competition, 4) design compelling BrandIntent, 5) identify key leverage points in customer experience, 6) execute the branding strategy and 7) establish feedback systems.

The presence of a strong brand enhances positive marketing activities such that awareness, exploration and commitment are more effectively established.