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LEVERAGING SECONDARY

BRAND ASSOCIATIONS TO

BUILD EQUITY

Chapter 7

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LEVERAGING

Borrowing some brand knowledge and

depending on the nature of associations or

responses, some brand equity

Unlike brand elements and communication

strategies, this is an indirect approach to

build brand equity.

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Sources of Brand Knowledge

Things

Places

People

Other

Brands

Brand

Alliances

Ingredients

Company

Extensions

ChannelsCountry of Origin

Events

s

3rd Party

dorsements

Endorsers

Employees

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Creation of New Brand

Associations

By making a connection between and

other entities, consumers form a mental

association

This secondary knowledge is most likely to

affect the evaluations of a new product

when consumers lack the motivation or the

ability to judge product related attributes

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Effects of Existing Knowledge

Awareness and knowledge of the entity

DO they have the knowledge

Do they hold unique associations

Meaningfulness of the knowledge Is the knowledge relevant and meaningful for the

brand

Does it have connection to the brand

Transferability

How strongly will this impact the choice of the new

brand

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Examples

Events: create experiences

People: create feelings

Media: knowledge about attributes Cause-related marketing:

Enhance brand image

Evoke feelings of social approval/esteem Brand attitudes such as trustworthy &

Likeable

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Will Brand Leveraging Work for

you?

es the new product fit into the established productmily?

es the brand have attributes or features that easilyd effectively carry into new categories?

the brand name strengthened or diluted bypresenting two (or more) differentiated products?

es your company have facilities necessary toanufacture and distribute a new and differentiatedoduct?

ill sales of the new product cover the cost of productvelopment and marketing?

brand leveraging strategy can be extremely successfuld profitable if it is correctly implemented and providesw products with the right image.

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Associations

ommonality: when consumers have

ssociations to another entity that are

ongruent with desired brand associations

omplementarity: when there is not the

evel of congruence required, how much

an associations add to the brand

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o Lay name is extended from potato chips intother types of snack foods and dips. Antroduction of Frito Lay lemonade did notucceed because the fruity, sweet drink had littleonnection to other Frito Lay products.

ther examples that did not work in the consumer

arket includeBen-Gay aspirin,

Fruit of the Loom laundry detergent.

owever, M&M ice cream, Reeses peanututter, and Minute Maid orange sodaxperienced success because the brands heldirect and logical connections to their newategories.

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An Exception

Bic is a strong brand name with years of

experience in marketing low-cost

disposable plastic products such as theBic pen. Thus, Bic is positioned well

to introduce products that capitalize on

these same basic strengths productssuch as disposable razors and cigarette

lighters.

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Prose products mean greater shelf space for thed and more opportunities to make a sale.

cost of introducing a brand leverageduct is less than introducing an

pendently new product due to a muchller investment in brand development andertising designed to gain brand recognition.

full line permits coordination of product

rings, such as bagels and cream cheese,to chips and ranch dip, peanut butter and, etc.

reater number of products increase efficiency

anufacturing facilities and raw materials.

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Cons

rand leveraging does present challenges.

Brand dilution

Potential exists for damaging the reputation ofthe parent product if new products fail.

Manufacturing and inventory costs may behigher as a result of product diversification.

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Company

Create a new brand

Adopt or modify an existing brand

Combine an existing or a new brand

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Corporate Marketing Umbrella

(Philosophy)

CorporateMarketing

CorporateReputation

CorporateIdentity

CorporateImage

CorporateCommunic

ations

CorporateBranding

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Managementresponsibility:

CEO

Functionalresp.:

Most/AllDepartments

Generalresponsibility:

All personnel

Brandgestation:

Medium /Long

Managementresponsibility:

BrandManager

Functionalresp.:

Marketing

Generalresponsibility:

Marketing

personnel

Brandgestation:

Short

Stakeholderfocus:

Consumer

Communication channels:

Communicatio

n mix

orporate Brand vs. Product

Brand

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Importance of Corporate

Branding

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Country of Origin

Land Rover British, German or

merican?

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Cultural Bazaar

Origins of the brand are more importantthan who the owner becomes latter in life.

Lamborghini is owned by German-VW, yetit keeps this Italian identity.

Rolls-Royce is now owned by GermanBMW, it still is associated with English

luxury.It is like a child, the first years are the

most important for his identity.

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Other Geographic Associations

States: Idaho Potatoes

Regions: Irish Spring Soap

Cities: Impulse London Vibe

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Problems

rong associations may hinder migration

vourability of the country of origin

Domestic PerspectiveForeign Perspective

Individualistic vs collectivist societies

triotic AppealLack uniqueness

Overused

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Channels of Distribution

sociations withProduct

Price

Credit PolicyQuality of Service

Results in associations of brands by retailers

its sold in Nordstrom, it must be of goodquality

Bangladesh context?????

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Exclusive

Vs.

Intensive distribution

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A small story.he little tan bear millions of kids grew up with. He taggedh Christopher Robin, stuck his hand in the honey pot, and

ut new ways to cause harmless mischief. And no matterildren came from or what their parents did for a living, thennie-the-Pooh conjured up a single image gleaned fromic books by A.A. Milne.

kids, however, won't have that common touchstone.ys, their image of Pooh depends a lot on where they livemuch money their parents make. That's because theey Co., which owns the rights to Milne's make-believe

ie, is carefully marketing two distinct Poohs. The originaln figure appears on fine china, pewter spoons, and priceyionery found in upscale specialty and department storesNordstrom and Bloomingdale's. The plump, cartoonliked in a red T-shirt and a goofy smile, adorns plastic keyolyester bedsheets, and animated videos. It sells in Wal-es and five-and-dime shops. Except for at Disney's owne two Poohs do not share the same retail shelf.

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Co-Branding

Occurs when two or more existing brandsare combined into a joint product or are

marketed together in some fashion

xamples:Sony Ericsson

Yoplait Trix Yogurt

Nestles Cheerios Cookie Bars

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Co-branding is nothing new, and it's something that weas consumers take somewhat for granted. Visit a grocerystore and you'll see dozens of examples, from the icecream aisle (Breyer's (UL) and Hershey to the snackaisle (Lay's and KC Masterpiece (CLX)) to the cerealaisle (Kellogg's (K) and Healthy Choice) to the dessertaisle (Cinnabon and Mrs. Smith's). You can also find co-branding examples in the automotive world (Coach(COH) and Lexus (TM)), the hospitality industry (Bulgariand Ritz-Carlton), the footwear business (Disney (DIS)

and Crocs (CROX), the franchising world (Tim Hortons(THI) and Cold Stone, the airline industry (Southwest(LUV) and SeaWorld), and even in product catalogsstuffed into airplane seat pockets ("Order yourBraunOral-B Plaque Remover today").

http://bx.businessweek.com/co-branding/http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=ULhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=CLXhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=Khttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%2061029http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%206753119http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=COHhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=TMhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%20920234http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=DIShttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=CROXhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=THIhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=LUVhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=29039149http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=6563476http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=6563476http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=29039149http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=LUVhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=THIhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=CROXhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=DIShttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%20920234http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%20920234http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%20920234http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=TMhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=COHhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%206753119http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=%2061029http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=Khttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=CLXhttp://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=ULhttp://bx.businessweek.com/co-branding/http://bx.businessweek.com/co-branding/http://bx.businessweek.com/co-branding/

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For example, a restaurant could co-brand with alocal packaged-foods maker to create a newmenu item, an accounting firm could co-brandwith an information-technology provider to

create a new consulting offering, or a physicianmight co-brand with a hospital on a new serviceline. A good place to start generating ideas is bythinking about other types of companies that doa good job serving your target market. You might

even ask your customers to identify othercompanies with which they do business and seeif you come across any patterns.

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Advantages of Co-Branding

Borrow needed expertise

Leverage equity you dont have

Reduce cost of product introduction

Expand brand meaning into relatedcategories

Broaden meaning

Increase access points

Source of additional revenue

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Disadvantages of Co-Branding

Loss of control

Risk of brand equity dilution Negative feedback effects

Lack of brand focus and clarity

Organizational distractions

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Ingredient Branding

A special case of co-branding that involves

reating brand equity formaterials, components,

r parts that are necessarilycontained within

ther branded products

Examples:

Betty Crocker bakingmixes with Hersheyschocolate syrup

Intel inside

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Licensing

olves contractual arrangements whereby

can use the names, logos, characters, and

rth of other brands for some fixed fee

ples:tertainment (Star Wars, Jurassic Park, etc.)

levision and cartoon characters (Thempsons)

signer apparel and accessories (Calvin Klein,

erre Cardin, etc.)

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Celebrity Endorsement

Draws attention to the brand

Shapes the perceptions of the brand

Celebrity should have a high level ofvisibility and a rich set of useful

associations, judgments, and feelings

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Celebrity Endorsement: PotentialProblems

lebrity endorsers can be overused bydorsing many products that are too varied.

ere must be a reasonable match between the

lebrity and the product.lebrity endorsers can get in trouble or losepularity.

ny consumers feel that celebrities are doing

endorsement for money and do notcessarily believe in the endorsed brand.

lebrities may distract attention from the brand.

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rting, Cultural, or Other Events

Sponsored events can contribute to brand equity

becoming associated to the brand and

proving brand awareness, adding new

sociations, or improving the strength,

vorability, and uniqueness of existing

sociations.

The main means by which an event can transfersociations is credibility.