Jaywant Singh, Paurav Shukla - Brand Management - Principles and Applications For Effective Branding-Kogan Page (2024)

i
PRAISE FOR
BRAND MANAGEMENT
‘In an era where marketing is everything and branding is the core of marketing, the
importance of this book cannot be overstated. The two accomplished marketing
academics, Jaywant Singh and Paurav Shukla, offer an authoritative and comprehensive
discussion of all aspects of branding that makes this book a must-read for business
students and practitioners alike.’
Bodo B Schlegelmilch, Professor Emeritus, WU Vienna University of Economics and
Business, Bualuang ASEAN Chair Professor, Thammasat University, Bangkok
‘This comprehensive, timely and highly accessible gem of a book provides a state-of-the
art perspective on branding in today’s world. Grounded in research, the book and its
concepts are highly relevant to both students and practitioners interested in branding.’
Debbie MacInnis, Emerita Professor of Marketing, Marshall School of Business,
University of Southern California
‘This is not just another book about branding concepts! This is a book that has been long
awaited, a book that holistically addresses the entire branding process, from the meaning
of the branding concept to how to build and manage a brand. The book offers a pragmatic
guide to why branding is important and how it works, and will become a requisite text for
anyone involved in a branding project. It provides an essential discussion of current
research on branding and should be a ‘must-read’ for all students studying branding.’
Nicholas J Ashill, Professor of Marketing and RC Chair, School of Marketing and
International Business, Wellington School of Business and Government, Victoria
University of Wellington – Te Herenga Waka, New Zealand
‘Provides a fresh and useful survey of branding concepts, research and applications.
Progressing from the core ideas and historical origins of branding, the text proceeds to
thoroughly cover modern scholarly research and contemporary industry applications. The
work is an invaluable resource both for students learning about branding and for scholars
requiring a comprehensive reference on work in the area.’
Malcolm Wright, Fellow of ANZMAC, MSA Charitable Trust Chair in Marketing,
Massey Business School – Te Kura Whai Pakihi, New Zealand
ii
‘Offers an in-depth coverage of key concepts, practical case studies and actionable
frameworks. An extremely valuable resource for anyone looking to learn about branding,
or to elevate their brand strategy and drive impactful results.’
Rodrigo Guesalaga, Professor of Marketing, Faculty of Economics and Business,
Alberto Hurtado University, Chile
‘Written by two top research academics, this book has provided a comprehensive and
thorough account of branding and brand management in the global context. Current,
relevant and interesting case studies and illustrations have been presented throughout
the book, which have added to its uniqueness. I highly recommend that this book be used
as a core text book in any brand management courses taught at the undergraduate and
postgraduate levels, as well as a key reference for any DBA and PhD students.’
T C Melewar, Professor of Marketing and Strategy, Department of Marketing,
Branding and Tourism, Middlesex University London
‘Dr Singh and Dr Shukla’s Brand Management: Principles and Applications for Effective
Branding offers a comprehensive guide to mastering the art of branding. Through its
insightful exploration of brand principles and real-world applications, this book is an
invaluable resource for marketers and business professionals aiming to enhance their
brand strategy.’
Iain Brown, Head of Data Science, SAS Northern Europe
‘What a brand stands for and how you keep it relevant is at the heart of many
organizations’ focus. This work provides real life examples and insights on those very
considerations.’
Carmela Crisafulli, Director, Development Marketing EMEAA, IHG Hotels and Resorts
‘A comprehensive textbook that demystifies branding, offers actionable frameworks, and

shows how to apply them through a myriad of case studies.’
Amitava Chattopadhyay, The GlaxoSmithKline Chaired Professor of Corporate
Innovation INSEAD, France
iii
Brand Management
Principles and applications for effective
branding
Jaywant Singh
Paurav Shukla
iv
Publisher’s note
Every possible effort has been made to ensure that the information contained in this book is accurate
at the time of going to press, and the publishers and authors cannot accept responsibility for any errors
or omissions, however caused. No responsibility for loss or damage occasioned to any person acting,
or refraining from action, as a result of the material in this publication can be accepted by the editor, the
publisher or the authors.
First published in Great Britain and the United States in 2024 by Kogan Page Limited
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted
under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or trans-
mitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of
reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning
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London New York, NY 10018
EC1V 3RS USA
United Kingdom
www.koganpage.com
Kogan Page books are printed on paper from sustainable forests.
© Jaywant Singh, Paurav Shukla 2024
The rights of Jaywant Singh and Paurav Shukla to be identified as the authors of this work have been asserted
by them in accordance with the Copyright, Designs and Patents Act 1988.
ISBNs
Hardback 978 1 3986 1 1603
Paperback 978 1 3986 1 1580
Ebook 978 1 3986 1 1597
British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library.
Library of Congress Control Number

2024934065
Typeset by Integra Software Services, Pondicherry

Print production managed by Jellyfish
Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY
v
CONTENTS
List of figures and tables xi

Walkthrough of textbook features and online resources xiii
PA R T O N E Introduction – the foundations

of brand management
01 Brand – the concept and meanings 3

Overview 3
Key learning outcomes 3
How does a product become a brand? 3
Brand definitions and meanings 6
What can be branded? 8
The importance of brands for companies 15
Chapter summary 17
Key concepts 18
Exercise questions 18
Endnotes 20
02 The evolution of branding 22

Overview 22
The evolution of the word ‘brand’ 22
The genesis of branding across ages 23
Branding in the modern world 28
The future for brands 31
Chapter summary 32
Key concepts 33
Endnotes 34
03 Research streams in branding 37

Overview 37
How do consumers buy brands? 37
Why do consumers buy brands? 42
vi Contents
Chapter summary 46
Key concepts 46
Endnotes 47
PA R T T WO Building brands – principles and applications
04 Brand features 53
Overview 53
What are the essential values for brand features? 53
Brand features/assets 55
Creating brand appeals through a consistent brand feature strategy
(CBFS) 68
Chapter summary 69
Key concepts 69
Endnotes 72
05 Brand loyalty and brand equity 74

Overview 74
Relevance and definitions of brand loyalty 74
Scholarly beginnings 76
Different approaches to brand loyalty 77
Synthesizing the brand loyalty debate 80
What is brand equity? 81
Chapter summary 84
Key concepts 85
Endnotes 86
06 Brand positioning 88
Overview 88
What is the positioning of a brand? 88
Brand association, image and brand symbolism 91
Points of convergence and divergence 95
Perceptual map 96
Segmentation bases and brand positioning 98
Contents vii
Chapter summary 100

Key concepts 101
Endnotes 103
07 Brand communication 105

Overview 105
Brand as the key communication tool 105
Theories in brand communication 107
Brands as communication signals 110
The interactive relationship between brand communication and individual
identities 112
Brand communication and compensatory consumption in the digital
age 114
Brand as tools for individual impression management 115
Chapter summary 116
Key concepts 117
Endnotes 119
08 Consumer-brand relationships 123

Overview 123
Origins and concepts of consumer-brand relationships 123
Self-brand connection 126
Brand trust and brand commitment 127
Brand attachment 129
Brand love 130
Brand engagement and customer experience 131
Brand engagement via digital and social media 133
Chapter summary 135
Key concepts 136
Endnotes 137
09 Brand extension 141

Overview 141
What is brand extension and its role in brand management? 141
viii Contents
Types of brand extensions – category and line extensions 143

Drivers of brand extension 145
Advantages and disadvantages of brand extension 150
Brand extension – spillover effects 151
Chapter summary 152
Key concepts 153
Endnotes 155
10 Brand alliance or co-branding 158

Overview 158
Defining co-branding 158
Benefits and risks of co-branding 159
Conditions for the success of co-branding 163
Psychological mechanisms of co-branding 165
Social cause-brand alliance 166
Chapter summary 170
Key concepts 170
Endnotes 173
11 Brand portfolio management 177

Overview 177
What is brand portfolio? 177
Managing brand portfolio 180
Managing brand equity across the portfolio 182
Tactical management of brand portfolio 184
Corporate branding 185
Managing corporate brands 190
Chapter summary 191
Key concepts 192
Endnotes 194
Contents ix
PA R T T H R E E Managing contemporary brands
12 Managing negative events for brands 199

Overview 199
Brand crises and reputation management 199
Theoretical framework for brand crisis type identification and
response 203
Product-harm crises 207
Brand transgression 209
Service brand failure and recovery 211
Chapter summary 215
Key concepts 215
Endnotes 218
13 Luxury branding 223

Overview 223
The unique context of luxury branding 223
What makes a product a luxury brand? 226
Luxury brand signalling, symbolism and value perceptions 227
Contemporary growth challenges for luxury brands 232
Digitalizing luxury 235
Chapter summary 237
Key concepts 237
Endnotes 239
14 Sensory branding and neuromarketing 244

Overview 244
The role of human sensory perceptions 244
Types of sensory influences in branding 246
Crossmodal sensory perceptions 256
Ethics of sensory marketing and branding 258
Neuromarketing 260
Chapter summary 263
Key concepts 264
Endnotes 265
x Contents
15 Branding on social media and digital brand analytics 271

Overview 271
The advent of social media branding 271
Creating and enhancing brand engagement through social media 274
The role of social media influencers in brand building 278
The dos and don’ts of branding on social media 284
Understanding brand social media analytics 288
Chapter summary 290
Key concepts 290
Endnotes 292
16 Global and cross-cultural branding 295

Overview 295
Branding in the global environment 295
The role of culture in branding 297
Standardization vs customization 302
‘Born-global’ brands in the digital age 305
The role of brands’ country of origin 308
Chapter summary 310
Key concepts 311
Endnotes 313
Index 316
xi
LIST OF FIGURES AND TABLES
Figures
Figure 1.1 Product engagement matrix 4
Figure 1.2 Multi-dimensional view of a brand from academic-practitioner
perspective 6
Figure 2.1 Temples in ancient Egypt and India were seats of religion and
sources of brand communication 25
Figure 6.1 Perceptual map based on student survey conducted by authors 97
Figure 7.1 Hierarchy of Effects models 108
Figure 7.2 Elaboration Likelihood Model (ELM) 109
Figure 7.3 Advertising, Trial and Reinforcement (ATR) model 109
Figure 7.4 Electric cars are employing their green credentials as brand
communication signal 110
Figure 8.1 Consumers search for a brand with which they feel connected 124
Figure 8.2 Consumers of Louis Vuitton waiting in a queue, showing the power
of affective and normative commitment 129
Figure 9.1 BMW’s extension from luxury car to motorcycle based on usage fit 146
Figure 9.2 Apple uses simple design across devices based on feature and
product fit 146
Figure 9.3 Example of unsuccessful brand extensions 148
Figure 11.1 Nokia had many globally successful phones such as Nokia
5110 179
Figure 11.2 Brand portfolio management structure of Colgate-Palmolive 181
Figure 13.1 Human beings have always been fascinated with exquisite objects 224
Figure 13.2 Red roses have lost their luxury status in recent times due to easy
availability 225
Figure 13.3 Counterfeiting remains a big business across the world 234
Figure 14.1 Since 2018, all Apple stores use a signature scent developed in
collaboration with renowned perfumer Christophe Laudamiel 245
Figure 14.2 Wine companies use different fonts for the bottle labels to
demonstrate varying levels of taste 249
Figure 14.3 Understanding the power of haptics, many stores allow consumers
to touch and feel the product freely 252
Figure 14.4 Smell is a powerful trigger for consumer action and brands use it
regularly in their marketing efforts 254
Figure 14.5 Images of food can arouse visual, gustatory and even olfactory
reflections 256
xii List of figures and tables
Figure 14.6 Sensory marketing and branding raises important ethical questions 259
Figure 15.1 Most popular social networks worldwide as of January 2023,
ranked by number of monthly active users 273
Figure 15.2 Consumers buy and sell a variety of products on social commerce
marketplaces such as Facebook Marketplace 274
Figure 15.3 The 6C framework of social media engagement 275
Figure 15.4 Social media influencer sphere of influence in number of followers 282
Figure 15.5 Share of Instagram influencers involved in fraud worldwide by
number of followers 285
Figure 16.1 Comparing macro cultural dimensions across countries 299
Figure 16.2 The same object, a dining table with chairs, is construed differently
depending on culturally motivated individual thinking styles 301
Figure 16.3 Apple uses language mentioned in the image to avoid stating ‘made
in China’ 310
Tables
Table 1.1 Examples of large B2B product brands 9
Table 1.2 Best global brands 2023 17
Table 2.1 Examples of old brands and the introduction of their logo 27
Table 3.1 Prominent theories and their applications in branding 44
Table 4.1 ALARM features of a brand 56
Table 4.2 Top 10 sonic brands in the USA 65
Table 5.1 Brand loyalty leaders 75
Table 5.2 Interbrand’s top 10 best global brands 2022 84
Table 6.1 Toothpaste brand positioning 90
Table 8.1 Example statements 128
Table 9.1 Advantages of brand extension with examples 150
Table 9.2 Disadvantages of brand extension with examples 151
Table 10.1 Successful brand alliances 164
Table 10.2 STEAM framework for cause-brand alliance success 168
Table 12.1 Crisis types 203
Table 12.2 Crisis response strategies 206
Table 12.3 Customer evaluations of service recovery experiences 213
Table 12.4 Justice (fairness) of service recovery 214
Table 14.1 Different meanings of colours across cultures 248
Table 14.2 Crossmodal sensory perception examples 257
Table 14.3 The positives and negatives associated with sensory branding 260
Table 15.1 Data types and sub-types that can be used for social media analytics 288
Table 16.1 Macro cultural dimensions proposed by Geert Hofstede 298
Table 16.2 Advantages and disadvantages of standardization, customization,
and glocalization 303
xiii
WALKTHROUGH OF TEXTBOOK
FEATURES AND ONLINE
RESOURCES
Chapter overview
Highlights the main issues and topics that will be covered in each chapter.
In this chapter, we delineate brands through history – how and why branding began
and developed through ancient, medieval and modern eras. We bring in new perspec-
tives on the existence of the core concepts of modern branding throughout history.
Learning outcomes
A bulleted list at the beginning of each chapter summarizes what you can expect to
learn, to help you to track your progress.
Upon reading this chapter, you should be able to

●● Understand how the need for branding took roots
●● Develop insights into the historical journey of branding, through ancient, medieval
and modern times
Case studies and real-world examples

A range of case studies and real-world examples illustrates how key ideas and theo-
ries are operating in practice to help you to place the concepts discussed in real-life
context.
xiv Walkthrough of textbook features and online resources
CASE STUDY – Time travel through the

Nestlé story
1 Please visit the history of Nestlé on the webpage below, and answer the following
questions: www.nestle.com/about/history/nestle-company-history
2 Evaluate the critical factors leading to the creation of brand Nestlé.
3 Critically examine the landmark changes in branding of Nestlé through the
history.
4 Discuss the changing focus on consumers convenience, wellbeing and shared
values in Nestlé’s branding in modern times.
5 Critically reflect on Nestlé’s current branding strategy and recommend steps the
brand should take to help ensure its long-term success.
Scholarly debate boxes

Students are directed to publications that have been key to theoretical debates in the
subject and encouraged to critically reflect on them.
‘Branding in practice’ boxes

In each chapter, the application of branding concepts and theories is illustrated
through real-world examples.
Branding in practice – Why logos are going

simple
In recent years, some brands have simplified their logos by removing or adapting
design elements such as name (e.g., Mastercard, Uber etc.), colours (i.e., Apple,
Instagram), shades (e.g., Google), depth (e.g., Dell) and fonts (e.g., Burberry, Chanel)
among others.
Walkthrough of textbook features and online resources xv
Exercise questions
These can be used in tutorials or small study groups to stimulate debate and critical
thinking.
1 What are the main patterns of buyer behaviour?

2 How can the empirical generalization patterns help brand managers?
Key terms/quotes boxes

These boxes give explanations of key terms and concepts in the book to highlight
them for your learning.
Chapter summary
Draws together the main threads of the chapter and summarizes the key learning
points.
Key learning points/concepts

Key learning points at the end of each chapter summarize the main themes of the
chapter and act as a useful revision tool.
Key concepts
●● Patterns of buyer behaviour
●● Empirical generalizations in branding
●● Modelling brand buying behaviour
●● The psychology of branding
●● Theories that influence branding research
xvi Walkthrough of textbook features and online resources
References
Detailed references provide quick and easy access to the research and underpinning
sources behind the chapter.
Online resources:
This book includes online resources for lecturers comprising:
●● Chapter slides
●● Instructor manual
●● Exercises
●● Further real-world examples
These resources can be accessed through the Kogan Page website:

www.koganpage.com/brand-management
1
PART ONE
Introduction – the
foundations of
brand management
2
THIS PAGE IS INTENTIONALLY LEFT BLANK

3
Brand – the 01
concept and
meanings
Overview
In this chapter, we first introduce the basic concepts of a brand and how a product
transforms into a brand. In the following section, we elaborate upon the central place
of branding in all walks of life, and identify the popular definitions of branding and its
varied meanings. We then show the pervasive reach of branding in all aspects of hu-
manity such as for individuals, groups, societies, governments and ideologies. In the
last section, we highlight the importance of branding for all stakeholders involved.
Overall, this chapter provides the foundations for learning the discipline of branding.
Key learning outcomes

●● Understand the difference between a product and a brand

●● Develop deeper understanding of branding definitions and associated meanings
●● Develop insights into the pervasiveness of branding
●● Appreciate the scholarly debate on the foundations of branding
●● Recognize the importance of branding for different stakeholders
How does a product become a brand?

To comprehend the concept of brand, it is necessary to understand the idea of a
product. The overall notion of product is easily understood by most people through
its physical manifestation. A product can be much more than its physical aspects. For
instance, a watch or a pen can be identified as a physical product, whereas a bank or
an insurance policy can be identified as service products. They satisfy different needs
4 Brand Management
and wants of their customers. Thus, a product is anything that meets the functional
needs of customers.1 Moreover, a product is almost always a combination of the
tangible and intangible.2 For example, a watch is bought to tell the time, and a pen
to write. Similarly, a service product like a bank is used to satisfy financial transac-
tions and other financial needs. An insurance policy is bought for reducing customer
safety concerns. Thus, a product can also be identified as the total package of bene-
fits the customer receives upon purchase of the product.
To achieve meaningful engagement with customers, a company should consider
both the tangible and intangible benefits that the product delivers. In other words,
companies should think beyond the functional aspects of its products. The product
engagement matrix3 provides a useful direction for companies to integrate both tan-
gible and intangible benefits, as shown in Figure 1.1.
As a fundamental principle, a product satisfies customer needs through its core
benefits. For instance, a hotel offers ‘shelter’ away from home or a soft drink
quenches ‘thirst’. A generic product is a somewhat rudimentary difference that
may exist between competing products in a particular industry or sector. For
instance, two Italian restaurants on the same street of a city may use the same
ingredients to make a margarita pizza. However, their shape and size may differ
Figure 1.1 Product engagement matrix
Potential product
Augmented product
Expected product
Generic product
Core benefit
SOURCE Adapted from Levitt (1980)

Brand – the concept and meanings 5
somewhat. In most cases, the generic product differences are not salient to the
customers. The salient differences are observed by the customers at the expected
product levels. The expected product reflects customers’ minimal purchase
conditions. These could include price, delivery terms, customer service provision
and novelty. Extending the Italian restaurant example, customers may expect
reasonable price, prompt delivery, good customer service and a range of flavours
to satisfy their need to eat. Many products use a variety of expected product
characteristics to differentiate themselves. For instance, a Bic pen is available for
less than £1, while on the other hand, a Montblanc pen can cost a hundred times
more. While both pens satisfy the same functional need for writing, customer
expectations differ significantly from a social value perspective.
An augmented product is something that the customer has never thought about
or expected. The unprompted ‘augmentation’ beyond the expected product can sub-
stantially help companies to differentiate their product from competitors and create
‘aha’ moments. Such augmentation can also strengthen the customer-brand relation-
ships as the customer feels more valued. For instance, the Italian restaurant can
provide a free drink with the order of a pizza. In addition, for health conscious cus-
tomers, a restaurant can provide information regarding calorie content and sourcing
of ingredients from sustainable sources. Such augmentation exceeds the normal ex-
pectations of the customer and may create greater satisfaction and garner customer
loyalty over a period. Product augmentation comes with its own risks as well. For
instance, companies cannot always augment products or services on a continuous
basis. Moreover, some customers, due to their own financial constraints or value
preference, may prefer the basic product and may not be willing to pay for augmen-
tation. Hence, a company should embark on a systematic programme of customer-
benefitting and, therefore, customer-retaining product augmentation.
Everything that is done by a firm to attract and retain customers on a regular basis
is called the potential product. This may involve product feature innovations through
market research and investments in product or service R&D. For instance, since its
launch of the path-defining smartphone, iPhone, Apple has regularly introduced an
improved version that builds on its predecessors. The latest iPhone boasts a new
operating system, better camera hardware and software, and a variety of other fea-
tures that differentiate it from earlier versions as well as competitors. These potential
product differentiations can help a product create substantial value in customer
minds and lead to strong relationships.
Products at the most basic level satisfy customers’ functional needs. However, a
customer attaches value to a product in proportion to its perceived ability to help
solve their problem or meet their needs. In today’s highly competitive marketplace,
satisfying such needs may not help companies stand out and be noticed. Most com-
panies aim to differentiate or distinguish their products from competitors by high-
lighting their unique features or elements. They achieve this by creating a brand.
6 Brand Management
Brand definitions and meanings

According to the American Marketing Association (AMA), a brand can be defined as
a specific name, symbol or design – or, more usually, some combination of these –
that is used to distinguish a particular seller’s product. At a simplistic level, i dentifying
a name or developing a logo, etc. can be the basis of branding. However, brand is
seen though a multi-dimensional lens by practitioners. Figure 1.2 shows how practi-
tioners think about a brand in real life.4
Figure 1.2 Multi-dimensional view of a brand from academic-practitioner perspective
Legal
instrument
Evolving
Logo
entity
Adding
Corporate
value
Relationship Brand Shorthand
Risk
Personality
reducer
Value Identity
system system
Image in
consumers'
minds
SOURCE Adapted from de Chernatony and Dall’Olmo Riley (1998)

Brand as a legal instrument demonstrates the mark or ownership and at the same time
protects a company’s products and image through copyrights and trademarks laws. A
logo helps a brand in differentiating through visual identity and name. It also helps a
brand highlight quality assurance. At the corporate level, a brand allows a firm to
highlight its organizational culture, people and personality over a long-term horizon.
Brand can act as shorthand for rapid recognizability and speedy decision making.
Moreover, a brand can instil confidence among its customers through its quality as-
sociations which in turn reduce risk perceptions and enhances trustworthiness.
Brands can also act as an identity system beyond a name. They can highlight the
direction, meaning and strategic positioning within the marketplace. Moreover,
brand as an identity system can provide a protective barrier and communicate
essence to its stakeholders. Image in consumers’ minds can allow a brand to clearly
differentiate itself and also establish its customer-centric credentials. Consumers’
image perceptions of a brand is their reality and thus can help a firm in developing
and enhancing customer-brand relationships. When a brand and customer values
match, the product becomes more desirable in customer minds. The values can be
psychological such as brand personality and image that add to the functionality as-
pects of the product. These values are generally conveyed through advertising and
packaging. Customers tend to buy brands that fit with the subjective meaning they
value. As brands evolve to meet such requirements through their aesthetics, supply
chain, customer service and other marketing activities, customers are ready to pay a
premium price for the perceived enhanced experience they will gain from engaging
with the brand. Brands create a belief in the consistent performance of the product
and thus add value in customer minds and enhance customer-brand relationships.
Brands are multifaceted entities. The concept and meaning of brands have evolved
over the decades. Scholars have attached symbolic, cultural, attitudinal and
behavioural aspects. Brands and an individual’s identity are interlinked wherein
brands are also suggested to reflect an individual’s personal, interpersonal and
social selves, and vice versa.5 While there is no universally accepted definition of a
brand, the interpretations and meanings have enriched the field of branding through
the inclusion of a variety of branding traits in the definitions. For example, brands are
identified as risk reducers at the point of purchase decisions.6 Brands are also
defined as value enhancers7 through their relational associations.8 From a semiotics
perspective, brands can be a physical entity and/or a mental representation.9 Brand
is also defined from the perspective of its visible traits such as the name, logo, term,
sign, symbol or design, or a combination of these. Leading marketing practitioners
such as David Ogilvy and Tim Ambler define brand from the perspective of image and
personality10 and as a promise that consumers believe in.11 Building on these
aspects, scholars highlight a brand as a dynamically evolving concept that captures
the product’s essence, its meaning and its direction.12 13
8 Brand Management
What can be branded?

As described earlier, a brand is not just a name or a logo but an identity representa-
tion of a company and its values. Without branding, a company may struggle in
differentiating its products and services. In most cases, due to competition, custom-
ers will also struggle in identifying the unique facets of a product without clear
branding. Thus, it is imperative for companies to build brands. Brands provide cus-
tomers with the knowledge structure about the product. When exposed to the brand
in the marketplace, the brand-driven knowledge structures act as mental shortcuts in
helping customers to recognize and visualize the product that leads to a quicker and
confident purchase decisions.
Therefore, anything can be branded. This includes products, services, people, des-
tinations, concepts, ideologies, religion and anything else. Branding for each of these
aspects has flourished in recent years. In the following paragraphs, we provide exam-
ples of successful branding for the aspects listed.
Product brands
Physical products are easiest to imagine from a branding perspective. The tangibility
of products makes it easier for companies to create brands. Tangible products can
effortlessly be displayed and packaged and thus brand name, logo and other such
visual aspects can be attached to them with ease. For instance, a commodity such as
water, when packaged in a bottle, becomes a branded product. While people may not
normally pay for tap water, the same water can be bottled and branded with a price
tag. Moreover, due to branding, people tend to associate bottled water with a differ-
ent level of purity and quality as compared to tap water. This has resulted in the rise
of global bottled water market brands such as Dasani from Coca-Cola, Aquafina
from Pepsi, Perrier from Nestlé, among many others. This has also resulted in a large
market for mineral water along with a variety of other new sub-categories such as
vitamin water, flavoured water and smart water. Such branding activities has led to
the global bottled water market being valued at $283 billion in 2021 and is expected
to expand at a compound annual growth rate (CAGR) of 6.7 per cent from 2022 to
2030.14
Product branding is not only useful for business to consumer (B2C) markets but
also for business to business (B2B) markets. B2B markets differ from B2C markets
in terms of order size and frequency of order itself. B2B orders tend to be larger and
infrequent and are dependent on derived demand from B2C market.15 Hence, creat-
ing a product brand is quite critical in setting out a unique identity and strong rela-
tionships that influence a business buyer’s trust perceptions. A number of large B2B
brands exist within physical goods market, as outlined in Table 1.1.
Table 1.1 Examples of large B2B product brands
Sector Examples of large B2B product brands
Coal mining China Shenhua Energy Co, BHP Billiton, Coal India,
Shaanxi Coal
Steel China Baowu Group, ArcelorMittal, Ansteel,
Nippon Steel
Glass Saint Gobain, PPG Industries, Corning International, AGC,
Kyocera
Aircraft manufacturing Boeing, Airbus, Lockheed Martin, Raytheon,
Rolls Royce
Textiles Toray, V.F. Corp, Shenzhou International Group, Reliance
Industries
Machine manufacturing Caterpillar, John Deere, CNH Industrial, ABB, Linde
Enterprises, Daikin, Komatsu
Forestry Oji paper, Stora Enso, West Fraser Timber, Weyerhaeuser,
Universal Forest
SOURCE Zippia.com16
Product branding has transformed many other sectors within the B2C market as
well. For instance, the home technology market has expanded rapidly within the last
two decades. Brands such as Apple, Amazon, Google have become globally known
with their product brands, from the Apple iPhone and Amazon Echo to Google Nest
and Home branded products. More traditional products such as toothpaste and
television also have distinct brands.
Service brands
Globally, in most of the developed economies services industry has overtaken the
manufacturing sector. For instance, within the USA, service sector contributes
77.31 per cent of the overall GDP.17 Similarly, in the UK the service industry
accounts for 79 per cent of the total UK economic output.18 In France and Japan,
service industry contributed 70.16 per cent19 and 75 per cent respectively. In
countries such as Germany with a strong manufacturing sector, service industry
still contributes almost 70 per cent of the overall GDP.20 Such growth of service
industry across large developed markets has resulted in differentiation initiatives
by companies. This has in turn propelled the growth of service brands.
10 Brand Management
Compared to product brands, services are somewhat difficult to brand due to

their inherent characteristics. Services differ from products due to their intangibility,
perishability, inseparability and variability.21 Services are intangible because they can
often not be seen, tasted, felt, heard or smelled before they are purchased. Similarly,
services cannot be stored and are inseparable as their production and consumption
occurs simultaneously. Due to human involvement, there is a substantial variability
challenge in delivery of services.
For instance, insurance or financial products like a mortgage cannot be felt or
seen and can only be experienced after the service has been provided. Moreover,
when claiming an insurance, a customer may receive differing levels and quality of
service from the same company due to service variability.
The growth of service industry and its challenges have led to substantial research
establishing services marketing as a field of study in itself.22 An alternative
perspective emerged claiming that service provision rather than goods is
fundamental to economic exchange.23
Thus, service brands dominate in every industry sector. In the physical retail sector
including grocery, clothing and healthcare, global brands compete with local brands.
For instance, within the grocery sector, brands such as Wal-Mart, Tesco and Carrefour
have a global footprint. These retailers use branding elements with their own distinct
store atmospherics to entice and engage consumers. Similarly, in the internet-based
service economy, many dominant brands exist including Amazon, Alphabet, Meta
and eBay, among others, which have created their own service eco-systems. Within
the technology industry, the e-commerce and smartphone revolution has resulted in
global service brands in fields such as:
●● travel and hospitality (e.g. Expedia, Tripadvisor, etc.)

●● games (e.g. Candy Crush, Fortnite, Angry Birds, etc.)
●● music (e.g. Spotify, iTunes, TuneIn, etc.)
●● education (e.g. Coursera, EdX, Duolingo, etc.)
●● dating (e.g. match.com, Tinder, eHarmony, Bumble, etc.)
These service brands have disrupted their industry sector which was dominated by
traditional brick and mortar players.
BRANDING IN PRACTICE
Service brand transformation: the demise
of Blockbuster and the rise of Netflix
Blockbuster opened its first movie-rental store in 1985 in Texas, USA. For the two
decades between 1990 and early 2000s, it was the dominant player in the VHS tap
rental market. While a small rental store offered a few hundred movie choices to
rent, a Blockbuster store could have a selection of 8,000 movies. Within the first five
years, the company had more than a thousand stores across the USA. Viacom, a
US-based media conglomerate, bought Blockbuster for $8.4 billion in 1994.
Blockbuster made a significant chunk of revenue from late fees, almost 16 per cent
of it, which frustrated many customers.
According to Reed Hastings, the co-founder of Netflix, one of his key motivations
for starting the company was because he did not want to pay the $40 fine he was
charged by Blockbuster. Netflix started as a mail-order DVD rental business with no
late fees and a monthly flat rate in the year 1997. In 2000, Netflix founders Reed
Hastings and Marc Randolph tried to sell Netflix to Blockbuster for $50 million and
was turned away by then-CEO John Antioco. At that time, Blockbuster was widely
considered a visionary leader in the home entertainment market with more than
9,000 stores globally and $5.9 billion in revenues.
However, competitors such as Redbox and Netflix, with their no late fees and
quicker rental options, started gaining rapid market share by mid-2000s. In 2004,
Blockbuster decided to end their late fees charge which was estimated to have cost
the company $200 million. Moreover, it also entered a new online rental market with
a new venture, Blockbuster Online, which was already dominated by Netflix.
Using the facets and complexities of services as a competitive advantage over a
products-focused business, Netflix transformed the home entertainment sector. It
was able to build a novel service business model utilizing technological
advancements, including the vast improvements in internet speed and storage
infrastructure.
From 2003 to 2005, Blockbuster lost 75 per cent of its market value and filed for
bankruptcy in 2010. While Netflix remains a dominant global brand with $29.7 billion
revenue in 2021.
This case highlights the continuous and dynamic nature of the service industry
wherein branding plays a key role along with technology transformation.
SOURCES www.businessinsider.com/rise-and-fall-of-blockbuster?r=US&IR=T#today-the-blockbuster-
franchise-has-dwindled-to-just-one-store-in-bend-oregon-which-has-been-turned-into-an-airbnb-15; https://
finance.yahoo.com/news/netflix-reed-hastings-streaming-wars-blockbuster-120914436.html
12 Brand Management
Person brands
Similar to products and services, people also possess intrinsic qualities that are re-
flected and perceived by the external world. Moreover, every person has a name and
thus in a generic sense, everyone has a person brand of some kind.24 Personal brand
reflects individual characteristics with a motive of establishing a distinctive image in
the minds of the target audience. While person branding has been in existence for a
long period of time, academic research pertaining to this phenomenon is gaining
popularity in recent years. For instance, impression management theory has been
used as a lens to examine the ways in which people create, manage and communicate
their person brand.25 People use a variety of defensive (excuse, justification, dis-
claimer, self-handicapping and apology) and assertive (ingratiation, intimidation,
supplication, entitlement, enhancement, blasting and exemplification) impression
management tactics to build their brand.26
Historically, rulers across civilizations created their person brands by creating
unique monuments. For instance, the Pharaohs built pyramids and temples with
their own name inscribed throughout these monuments. Ancient kings in Greece,
Persia, India, China, Mayan and Aztec civilizations used facets of person branding
by creating impressive monuments and artefacts glorifying their achievements and
personality. For instance, in ancient India, king Ashoka’s stone engraved edicts com-
municated the personal ideology of the ruler for his subjects to follow.
Over time, person brands have become popular in different fields. For instance,
artists and sculptors such as Leonardo da Vinci, Donatello and Caravaggio, econo-
mists such as Adam Smith and John Maynard Keynes, scientists such as Copernicus,
Newton and Einstein are examples of person brands. In recent years, person brands
have grown substantially. Politicians such as Winston Churchill, Jacinda Ardern and
Donald Trump have created their own branded personas built around their personal
ideologies. Following such personal ideologies can act as a double-edged sword. For
instance, Donald Trump was banned from using various social media such as Twitter
for his divisive political rhetoric on a variety of socio-political issues. To sustain his
person brand, the ex-president Trump even created his own social media platform,
Truth Social. Person branding has allowed many other politicians to use their char-
acteristics to gain senior business leader positions and earn substantial revenues. For
example, ex-British deputy prime minister Nick Clegg has become President of
Global Affairs of Meta.
Person brands are also highly influential in the world of business. Some famous
business CEOs and entrepreneurs have created person brands that are at times more
popular and recognized than the companies they are associated with. For example,
Richard Branson (Virgin), Bill Gates (Microsoft), Steve Jobs (Apple), Jack Welch
(GE), Jack Ma (Alibaba), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook) and
Elon Musk (Tesla and Twitter) have created and curated their person brands that are
recognized globally. At times their charisma has helped but also hindered their com-
pany’s growth prospects. For instance, Elon Musk was sued by the Securities and
Exchange Commission of the USA in August 2018 and had to agree for some of his
tweets to be vetted by a lawyer which had a substantial impact on Tesla’s market
valuation.27
Similar to person brands in political and business domains, person brands also
exist in other social domains. For example, in the early 1990s, several fashion mod-
els, including Claudia Schiffer, Heidi Klum, Naomi Campbell and Kate Moss, gained
worldwide popularity through their work with haute couture brands and commer-
cial modelling. These supermodels charted a new drive for fashion trends globally
and became household names. Similarly, with the increasing penetration of television
globally, many news anchors and journalists also established their person brands.
Celebrities associated with Hollywood and other film and drama industries also
have strong person brands. For instance, popular Hollywood actress Angelina Jolie
used her person brand to highlight the plight of refugees for over 20 years as a UN
refugee agency ambassador.
Person brands and social media

With the rise of internet and social media, a novel type of person brand has
emerged as social media influencers. Traditional celebrities bring meaning to the
endorsement process from the roles they assume in their careers which they use in
turn to build their social media profiles.28 For instance, footballer Cristiano
Ronaldo has the highest number of followers overall (more than 510 million on
Instagram) which is based on his footballing prowess. Similarly, the musician
Justin Bieber has amassed 455 million followers on Instagram. Many of these in-
fluencers are not always celebrities known for their work in social, political and
business domains. However, they develop their expertise over time in a particular
domain by regularly engaging and posting on various social media platforms and
gaining followers. Their continuous endeavours in the field of their choice and
views create their person brand. These influencers have become brands in them-
selves purely capitalizing on the growth and popularity of social media as com-
pared to traditional celebrities.
Destination brands
Travelling has always been part of human need. From the early migration of humans
from Africa to all parts of the world to recent global immigration trends, humans
have an innate need to explore new horizons. With the advent of robust public trans-
port and cheap air travel, there has been a significant rise in the number of people
travelling globally. As destinations compete with each other to attract visitors,
14 Brand Management
randing has become crucial in this domain. Governments across the world are
b
spending a substantial amount of resources on promoting their destinations to global
visitors. For instance, island countries such as the Seychelles and Dominican Republic
spend nearly 22 per cent of their GDP on tourism marketing, promotion and visitor-
related infrastructure.29 Even large markets such as the USA and the UK spend
substantial resources on destination branding. For instance, the USA destination
marketing body, Brand USA, received more than $250 million in funding from the
federal government in 2022 alone to promote tourism.30 According to Visit Britain,
inbound tourism was worth more than £28 billion to the UK economy in 2019, its
third largest service export and a major part of British trade.31
Destination branding encompasses branding of nations, cities and places. It al-
lows the promoters of destinations to increase tourist traffic as well as makes the
destination more attractive for businesses which in turn plays a critical role in the
globalizing of the destination as well as growth of the local economy. For instance,
when a government promotes a destination and develops primary travel infrastruc-
ture, it attracts secondary infrastructure including airlines, hotels and hospitality
sectors. The availability of transport, accommodation and culinary delights in turn
bring visitor traffic, leading to economic growth at the regional and in some cases
national levels.
As part of their destination branding exercise, some governments have created
memorable campaigns with global recognizability and recall. For instance, Malaysian
government’s campaign slogan ‘Malaysia, Truly Asia’ or the ‘Incredıble !ndıa’ cam-
paign by the Government of India since 2002 have captured the imaginations of
millions of tourists. Destination branding can be used to not only promote the place
but demonstrate the unique aspects associated with its culture, food, heritage and
people. For instance, in 2012, Visit Britain, the official tourism body of Great Britain,
launched a four-year £25 million campaign to promote tourism coinciding with the
London Olympic Games. The Love Great Britain campaign focused on culture, her-
itage, sport, music, nature, food and shopping and partnered with the James Bond
movie Skyfall as well as Paddington Bear. The nation of Iceland used the campaign
‘Iceland Hour’ after the eruption of the Eyjafjallajökull volcano in 2010 to re-build
its reputation as a tourism destination.
Branding of ideologies and religion

Thinking about some of the oldest brands in the world, one would observe religion
and ideologies as brands with immense staying power. For instance, from a branding
perspective ‘Buddha’, ‘Krishna’, ‘Jesus Christ’ and other similar religious figures have
a global presence and recognition for millennia and not just centuries. Similarly,
every religion differentiates itself from others through its unique symbols and design
aesthetics. Moreover, the strength of branding of ideologies and religion has led to
numerous sub-brands within each religion that people strongly attach themselves
with. Within Christianity, while Catholic and Protestant ideologies dominate, each is
further divided into many other sects and beliefs with their own unique symbolism,
mythology and motifs. The same appears to be the case for Hinduism and Islam as
well. Images and symbolism remain central to religious branding. Symbols such as
 (aum) and swastika in Hinduism, menorah, the seven-branched candelabrum and
star of David in Judaism, the Christian cross, the khanda in Sikhism and Torii in
Shinto are deeply imbued in people’s psyche and are pertinent reminders of the dis-
tinctive identity of the religion.
In recent times, religious organizations and their associated groups have assigned
significant resources to branding. This rise of resource allocation is associated with
several societal changes, including work replacing church as a place for social con-
nection; the cultural upheaval of the 1960s wherein baby boomers widely rejected
the faith of their families; and by the 1990s the rise of spiritual alternatives provided
via cable TV and the internet globally.32 This has resulted in a huge increase in spend-
ing on branding by religious organizations across online and offline media. Religious
organizations have used the same branding principles as their commercial counter-
parts such as leaders’ persona, symbolisms, mythologies, speeches, quotes and lan-
guage to appeal to their existing followers and acquire new ones.
Commercial brands have also adapted their products and services to cater to
the belief systems of religious communities. For instance, McDonald’s introduced
halal meat in countries where a majority of the population is Muslim. However, in
countries such as the UK, they do not offer such a choice.33 Brands that are deeply
rooted in their religious belief system consolidate their image accordingly to at-
tract and engage their target audience. For example, some brands keep their stores
closed on Sundays or support certain religious gatherings, groups or events. Chick-
fil-A, the third-largest food chain in the USA, remains shut on Sundays, reflecting
their founder Truett Cathy’s Christian faith.34 Mecca-Cola, a brand that origi-
nated in Paris, France, was founded in protest against the political ideology of the
West in the Middle East, particularly towards the Muslim majority countries.35
Such examples illustrate how some brands build their identity around religious
belief systems.
The importance of brands for companies

As described above, anything can be branded and more importantly, branding en-
sures organizational success. Brands not only help the organization but also other
stakeholders as well. For instance, consumers make product quality, price and other
16 Brand Management
relevant consumption decision judgements based on the brands they see. Similarly,
people who are not consuming but only observing the brands also make judgements
about the person in possession of the brand. Thus, brands serve functional as well as
emotional and social purposes.
Brands have become highly valuable for companies. This is reflected in increasing
investment in branding activities globally. Brand is an intangible asset, and their
value resides in the perceptions of the customers and the market.36 Thus, many man-
agers assume that brand equity and brand value are the same. While both brand
equity and brand value are educated estimates of how much a brand is worth, there
is a subtle difference between these terms. Brand equity refers to the importance of a
brand in the customer's eyes, while brand value is the financial significance the brand
carries.37
Brand value has traditionally been regarded as part of the company’s goodwill which
is the extra worth of a business over and above the value of physical assets. Hence,
finance professionals and accountants tend to take brand value into account when a
business is sold. Thus, the intangible value of a brand does not appear on the
balance sheet.
However, there is an ever-increasing emphasis on brand value in corporate commu-

nications including investor reports and directors’ statements in annual reports.
Moreover, brand is increasingly considered an acceptable security for asset-backed
financing.38
This importance of brands has led to a number of metrices that determine the
value of a brand. These metrices use a variety of parameters to calculate the total
financial value of a brand. Brand valuation was first developed by the British brand-
ing agency Interbrand in the 1980s. Several other companies also launched their
brand valuation metrics. For example, Millward Brown, now part of Kantar, also
developed its own brand valuation methodology termed Brand Z. Similarly, Young
and Rubicam’s brand valuation model, which is now called VMLY&R and is a sub-
sidiary of WPP, also gained popularity within the market. Brand valuation involves
a variety of approaches including the cost, market and the income approach. For
instance, Interbrand uses three key components for their brand valuation: an analy-
sis of the financial performance of the branded products or services, the role the
brand plays in purchase decisions and the brand’s competitive strength.39 Table 1.2
provides the top 10 global brands and their valuation based on Interbrand’s
methodology.
Table 1.2 Best global brands 2023
Rank Brand name Value (in US$ mn) % increase YoY
1 Apple 482,215 18%

2 Microsoft 278,288 32%
3 Amazon 274,819 10%
4 Google 251,751 28%
5 Toyota 59,787 10%
6 Coca-Cola 57,535 0%
7 Mercedes-Benz 56,103 10%
9 Disney 50,325 14%
10 Nike 50,289 18%
SOURCE Interbrand annual global ranking, 202240
Scholarly debate
Ehrenberg A S, Uncles, M D and Goodhardt, G J (2004) Understanding brand
performance measures: using Dirichlet benchmarks, Journal of Business
Research, 57 (12), 1307–25
Keller, K L and Lehmann, D R (2003) How do brands create value? Marketing
Management, 12 (3), 26–31
Chapter summary
This chapter began by defining a product and how companies can use a variety of
engagement levels to build relationships with consumers. We then identified the piv-
otal role that brands play in building strong relationships with the consumers. We
also identified several definitions of brand and the multidimensional view of a brand
from both academic and practitioners’ perspectives. Anything can be branded in-
cluding products, services, people, organizations, destinations, ideologies and reli-
gions. The importance of brands is captured in its financial valuation. As markets
evolve, brands evolve too and thus branding has become a key facet for business
success.
18 Brand Management
Key concepts
●● Product
●● Brand as a multidimensional entity
●● Branding applications
●● Product, service, person, destination, ideologies and religion
●● Brand meaning
●● Financial value of a brand
Exercise questions
1 Define a product and discuss how companies can achieve meaningful engagement
with consumers using product engagement matrix.
2 Explain the multidimensional view of a brand.
3 Can anything be branded? Discuss using examples.
4 You have been invited as a consultant by a national tourism agency of your home
country. Their management board is currently sceptical about branding the nation
and its culture. Explain how branding can enhance tourist perceptions of your
home country using other successful campaigns as examples.
5 Using the internet, compare and contrast different brand valuation techniques.
6 Explain the importance of a brand from the perspectives of an organization and
a consumer.
CASE STUDY
The new model of sharing economy

This case shows how modern information technology is helping brands and individuals
become more collaborative.
Adam Smith, the father of modern economics, noted that a person who seeks only his
own profit may still end up making choices that benefit others economically, guided by an
‘invisible hand’. Imagine an economy where self-interest isn't just good for you, it also
benefits society as a whole. This concept, dubbed the ‘sharing economy’,41 is emerging
alongside traditional economic models. While self-interest still drives most productivity,
technology is pushing boundaries and making collaborations easier.
There has been a lot of hype about how IT would change the economy, so it is
important to separate the truly transformative changes from those that simply make it
easier to do what we were already doing. Three main trends stand out:
1 Wider reach: Technology empowers individuals to offer goods and services to larger
audiences. Take accommodation, for instance, websites like Airbnb connect
homeowners with global travellers, bypassing limitations faced by traditional hotels.
This doesn’t alter the pursuit of self-interest, but it optimizes resource utilization by
filling previously empty rooms. Similarly, online platforms match individuals with
diverse personal service needs, creating a win-win for both parties.
2 True sharing: Barter, once deemed inefficient, is making a comeback thanks to the
internet. House swaps and car sharing platforms expand possibilities, allowing more
people to experience different lifestyles and optimize resource use. Carpooling
websites offer a modern twist on hitchhiking, connecting drivers with passengers for
efficient travel. This trend goes beyond economics, reflecting a shift towards
experiences and a less materialistic view of success.
3 Sharing in creation: The open-source software movement, Wikipedia and artists
exploring alternative copyright models showcase how voluntary, collaborative work
can yield valuable products. This ‘anti-Taylorism’ approach disrupts traditional
production methods; but it's not an alternative to capitalism, rather a complement.
These emerging sharing trends all serve to complement, not replace, capitalism. Much
like traditional free market economics, collaborative consumption models thrive on trust
and supporting structures. Reviews, ratings and clear licensing allow sharing economy
companies to regulate themselves without top-down rules.
However, some degree of government oversight helps instil confidence when handling
private assets. The aim of the government should not be to forcibly institutionalize sharing
where it does not arise organically, nor to restrict it where it proves useful, rather,
regulators and businesses alike should focus on empowering those who voluntarily opt
into collaborative ecosystems, providing the guardrails they need to participate securely.
By embracing both self-interest and collective benefit, the economy may enjoy the best of
both the invisible hand and its more visible, collaborative counterpart.
Case questions
1 How is technology transforming consumption trends and driving the sharing economy?
2 Find examples online of the sharing economy from food, travel, transportation and
crowdfunding sectors.
3 From your perspective, what challenges are faced by the sharing economy brands?
4 What role should governments play in sharing economy system according to you?
20 Brand Management
Endnotes
1 Doyle, P and Stern, P (2006) Marketing Management and Strategy, Pearson Education
2 Levitt, T (1980) Marketing success through differentiation – of anything, Harvard
Business Review, Jan–Feb, 83–91
3 Ibid.
4 de Chernatony, L and Dall’Olmo Riley, F (1998) Defining a ‘brand’: Beyond the
literature with experts’ interpretations, Journal of Marketing Management,
14 (5), 417–43
5 Bagozzi, R P, Romani, S, Grappi, S and Zarantonello, L (2021) Psychological underpin-
nings of brands, Annual Review of Psychology, 72, 585–607
6 Assael, H (1984) Consumer Behavior and Marketing Action, Kent Pub. Co.
7 De Chernatony, L (2010) Creating Powerful Brands, Routledge
8 Blackston, M (1992) A brand with an attitude: A suitable case for treatment, Journal of
the Market Research Society, 34 (3), 231–42
9 Stern, B B (2006) What does brand mean? Historical-analysis method and construct
definition, Journal of the Academy of Marketing Science, 34 (2), 216–23
10 Ogilvy, D (2013) Ogilvy on Advertising, Vintage
11 Ambler, T (1992) Need-to-Know Marketing: An accessible AZ guide, Century Business
12 Kapferer, J N (1994) Strategic Brand Management: New approaches to creating and
evaluating brand equity, Simon and Schuster
13 Goodyear, M (1993) Reviewing the concept of brands and branding, Marketing and
Research Today, 21 (2), 75–79
14 www.grandviewresearch.com/industry-analysis/bottled-water-market (archived at
https://perma.cc/2XEK-LXVV)
15 Keller, K L and Kotler, P (2022) Branding in B2B firms, in Handbook of Business-to-
Business Marketing, Edward Elgar Publishing, pp 205–24
16 Zippia (2022) The 10 largest coal mining companies in the United States, Zippia.com,
26 July, www.zippia.com/advice/largest-coal-mining-companies/ (archived at https://
perma.cc/8TZJ-BUFC)
17 www.statista.com/statistics/270001/distribution-of-gross-domestic-product-gdp-across-
economic-sectors-in-the-us/ (archived at https://perma.cc/WK7N-HKQS)
18 https://commonslibrary.parliament.uk/research-briefings/sn02786/#:~:text=The%20
service%20industries%20accounted%20for,employment%20in%20July%2D
September%202022 (archived at https://perma.cc/8AA3-54RA).
19 www.statista.com/statistics/270352/distribution-of-gross-domestic-product-gdp-across-
economic-sectors-in-france/ (archived at https://perma.cc/VJD7-UJGG)
20 www.statista.com/statistics/295519/germany-share-of-economic-sectors-in-gross-
domestic-product/ (archived at https://perma.cc/YC9A-X7Q5)
21 Kotler, P, Keller, K L and Chernev, A (2021) Marketing Management – Global Edition,
Pearson
22 Zeithaml, V A, Parasuraman, A and Berry, L L (1985) Problems and strategies in
services marketing, Journal of Marketing, 49 (2), 33–46. Also see Lovelock, C and
Patterson, P (2015) Services Marketing, Pearson Australia
23 Vargo Stephen, L and Lusch Robert, F (2004) Evolving to a new dominant logic for
marketing, Journal of Marketing, 68 (1), 1–17
24 Rangarajan, D, Gelb, B D and Vandaveer, A (2017) Strategic personal branding—And
how it pays off, Business Horizons, 60 (5), 657–66
25 Bolino, M, Long, D and Turnley, W (2016) Impression management in organizations:
Critical questions, answers, and areas for future research, Annual Review of
Organizational Psychology and Organizational Behavior, 3 (1), 377–406
26 Lee, S J, Quigley, B M, Nesler, M S, Corbett, A B and Tedeschi, J T (1999) Development
of a self-presentation tactics scale, Personality and Individual Differences, 26 (4),
701–22
27 www.theguardian.com/technology/2022/mar/08/elon-musk-seeks-end-us-restrictions-
tweets (archived at https://perma.cc/GC8K-PULY)
28 Breberina, J, Shukla, P and Rosendo-Rios, V (2021) When endorsers behave badly:
Consumer self-expression and negative meaning transfer, International Journal of
Advertising, 1–25
29 www.cnbc.com/2016/09/29/tourism-how-much-do-countries-spend-to-attract-tourists.
html (archived at https://perma.cc/WH6U-LHGE)
30 www.hotelmanagement-network.com/comment/us-tourism-funding-boost/ (archived at
https://perma.cc/DJA7-RX7Q)
31 www.visitbritain.org/visitbritain-launches-multi-million-pound-global-campaign-drive-
inbound-tourism (archived at https://perma.cc/2LAE-U2C5)
32 Einstein, M (2008) Brands of Faith: Marketing religion in a commercial age, Routledge
33 www.mcdonalds.com/gb/en-gb/help/faq/do-you-have-any-halal-restaurants.html
(archived at https://perma.cc/7QS9-CDL3)
34 www.businessinsider.com/chick-fil-a-closed-on-sunday-business-strategy-2019-6?
r=US&IR=T (archived at https://perma.cc/VE3D-E35W)
35 https://meccacolagroup.com/the-founer-and-you/ (archived at https://perma.cc/5AWL-
U9BH)
36 https://online.hbs.edu/blog/post/whats-in-a-brand-the-value-of-the-brand-and-how-to-
record-it (archived at https://perma.cc/6L36-YDTD)
37 https://prophet.com/2022/01/brand-equity-vs-brand-value/ (archived at https://perma.cc/
GQW5-EM8K)
38 https://interbrand.com/london/thinking/financial-applications-for-brand-valuation/
(archived at https://perma.cc/RS36-T2WA)
39 https://interbrand.com/thinking/best-global-brands-2021-methodology/ (archived at
https://perma.cc/8796-53R2)
40 https://interbrand.com/best-brands/ (archived at https://perma.cc/AY7Y-WTAX)
41 www.ft.com/content/ddf5de76-0105-11e3-a90a-00144feab7de (archived at https://
perma.cc/7WH6-ZXA8)
22
The evolution of 02
branding
Overview
In this chapter, we delineate brands through history – how and why branding began
and developed through ancient, medieval and modern eras. We bring in new perspec-
tives on the existence of the core concepts of modern branding throughout history.
We identify the original drivers that led to the modern-day branding concepts and
then discuss how branding emerged more potent and omnipresent in the modern
times. The chapter ends with reflections on the future for brands.

●● Understand how the need for branding took roots

●● Develop insights into the historical journey of branding, through ancient, medieval
and modern times
●● Understand how the basic concepts of branding developed through the ages and
morphed into modern branding lexicon
●● Appreciate the scholarly debate on the history of branding
●● Develop insights into the forces shaping the contemporary and future paths for
branding
The evolution of the word ‘brand’

Brands were used throughout history as conveyers of information and image or
meaning.1 This occurs because brand as a word serves a dual function of being both
a noun and a verb. Brand as a noun refers to various entities such as products, peo-
ple, places and ideas.2 As a verb, brand refers to the seller’s or producer’s approach
to make their goods and/or services meaningful through naming and communicating
The evolution of branding 23
the features or benefits.3 According to the Oxford English Dictionary, the word
brand was first found in the Old English (Anglo-Saxon) that emerged from Germanic
languages. It appears as a noun in the epic poem Beowulf (ca. 1000) and as a verb in
Wycliffe’s religious tract An Apology for Lollard Doctrines.4 Dual-function words
such as brand are highly flexible as they can be combined into multiword noun
phrases (e.g. brand identity, brand loyalty, brand equity) and verbal phrases (e.g.
corporate brand-ing, brand-ed service) which can extend and enhance the meaning.
Thus, brand was used for 15 centuries before it entered marketing lexicon in 1922,
when it appeared as the multiword noun phrase brand name in the publication
Hotel World, to describe a trade or proprietary name.5
In its original meaning brand was used in the poem Beowulf as a synonym for
sword. The usage of the term brand is associated with the old Germanic brinn-an or
with the Norse word brandr that is loosely associated as an act, means or result of
burning. Moreover, through its evolution, the word brand had both positive and
negative meanings which emerged through the practice of branding throughout his-
tory. As described earlier, traders and merchants from Indus valley civilizations used
seals that distinguished their goods from others. Thus, the mark was stamped on the
goods. The positive idea associated with brand reflects the burning of a mark on
goods or animals such as cattle, horses, etc. to clearly establish origin, ownership and
distinctive identity. However, the word also conveyed negative meaning when it was
used to communicate the idea of disgrace stamped on something or someone. For
instance, in British colonial slave regimes, branding of African American slaves was
widespread for identification or punishment purposes.6
The genesis of branding across ages

As discussed in the previous chapter, branding has become firmly established as a key
component of business success. Brand as a concept remains multifaceted and thus
multitudes of meanings are attached with it. The notion of brand, however, has been
observed throughout the development of the human civilization. At its core, brand is
something that distinguishes a seller from competitors. From ancient to modern
times, brands have played two key roles for their owners: (a) conveyer of informa-
tion regarding origin, quality and other relevant aspects attached with a product or
service; and (b) conveyer of image or meaning relating to status, power, value and/or
personality to both consumers and channel members.7 Many historical branding
practices focused on former rather than the latter.
Branding in ancient civilizations

Branding as a business practice is not a new concept. Historians, archaeologists and
scholars from other disciplines such as sociology and anthropology have suggested
24 Brand Management
that some form of brand and branding had existed since the early periods of the
human civilization. The need for branding emerged as trade started flourishing
within and between expanding ancient civilizations. To clearly identify their goods,
sellers started using pictorial symbols sometimes accompanied by additional text.
These early versions of brands are termed proto-brands by researchers.8 The earliest
evidence of such proto-branding is observed in Egyptian wine jars and other ceramic
goods found throughout Mesopotamia.9 The first extensive evidence of p roto-brands
were found when archaeologists excavated two regions of the Indus Valley civiliza-
tion in Harappa and Mohenjo-Daro (2600–1700 BCE). The stone and bronze
craftsmen in these ancient cities created little square seals, with animal and geomet-
ric motifs, which were then sold to the merchants, who used these seals for brand-
ing purposes to distinguish their goods from others. These seals have also been
found in archaeological excavations around Mesopotamia and Failaka in Persian
Gulf suggesting extensive use of brand marks in these trading operations. These
seals with their imagery and text have been shown to indicate the origin, identity of
the owner and aided the sorting, storage and transportation both by resellers and
relevant authorities.
Similar to early Bronze Age Indus civilization, in the middle Bronze Age
(2000–1500 BCE), in Shang China, carved bone and tortoise-shell-based crests pro-
vide evidence of a substantial state-run operation that was organized around ‘Zu’ or
kin groups. These crests appear on pottery, flags, cooking pots, wine vessels, horse
plumes, fences and other goods.10 It is argued that these crests could allow others to
identify the product origin and also infer quality on the basis of that.11 In the late
Bronze Age (1500–100 BCE), the trade centres grew in the Eastern Mediterranean
with seafaring communities of Canaanites (Phoenicians), Minoans and Mycenaean
Greeks taking a central role as the key middlemen in the Near Eastern trading sys-
tem.12 Cyprus copper emerged as a high status good, similar to Egyptian gold.
These practices adopted by early civilizations were continued by late Bronze
Age and Iron Age producers and merchants. For instance, Tyrian jugs that were
stylishly decorated with bands or red, black and maroon paint that reflected the
origin and quality.13 Similarly, modern archaeologists are able to trace different
Greek pots back to their respective makers and workshops by comparing the
very individualistic decorations. Greek potters started labelling their work as
early as 7th century BCE with some vases containing inscriptions of the men who
made them, similar to modern-day craftsmen signatures.14 The labelling con-
veyed origin and quality perceptions and at the same time invoked power and
image value of the good as status symbols of their time.
While the focus of early branding effort was on differentiating goods such as pot-
tery, metal, cotton and other such produce, there is also evidence of service brands in
ancient history. For instance, Takshashila, considered to be one of the earliest centres
of higher learning in the world, had students representing India, Central Asia, China
and other countries. Similar centres for higher learning emerged in various other
parts of the world including Alexandria, Athens and ancient India. These were
destinations of higher learning and thus excellent examples of destination branding
apart from the services they offered.
Ancient Egypt and India
To demonstrate their power and status over subjects, Egyptian rulers built vast
structures such as the pyramids and the temples. Karnak temple in Luxor was the
largest such complex in the world when it was built. Each of the temples and
sub-temples had their own distinctive identities associated with the rulers of the
time. The power of such structures is seen even today as Karnak is the second most
visited site in Egypt after the Giza pyramids.
In India, post-4th century BCE, the rise of Buddhism happened rapidly and that can
also be attributed to how the thoughts of the Buddha were communicated across
South and Southeast Asia. Various statues of Buddha emerged throughout the ancient
world including Bamyan in present-day Afghanistan and Leshan Giant Buddha in
China. In India, religious art in the form of murals, statues and paintings in the rock-cut
Ajanta caves captured the life stories and message of the Buddha. Such religious
iconography served as brand communication adopted later by other religions as well.
Figure 2.1 T emples in ancient Egypt and India were seats of religion and sources of
brand communication
SOURCE Authors
26 Brand Management
Branding through the Middle Ages

Throughout the Middle Ages and up to the early 20th century, the use of brand as
the conveyer of information remained consistent. The origin and quality signals
were associated with craftsmen, guilds or cities, which led to the rise of industrial
clusters. Moreover, the growing commerce and international trade spurred the
need for clear distinction for goods coming from different sources. Certain places
gained regional, international and even global prominence for their speciality
products. For instance, Chinese silk and porcelain, Venetian Murano glass, Indian
spices, Japanese gold, West African ivory and salt from Sahara were in high d emand
throughout the world markets.
The international trade routes such as the Silk Road led to the emergence of
important world-renowned trading centres such as Xi’an from the east to Samarkand,
Baghdad and Damascus in the Middle East and Central Asia, to Constantinople and
Venice in the West.15 With the growing demand of unique goods, novel forms of
people brands emerged including artists, sculptors, poets and scientists. For instance,
works of poets such as Rumi, Omar Khayyam and Ferdowsi were disseminated far
and wide through the trade routes. Similarly, books on a variety of topics from
Indian and Arabic scientists, including Bhaskara, Muhammad ibn Musa al-Khwar-
izmi, were read widely. Further, as Europe entered the Renaissance period, painters
and sculptors such as Leonardo da Vinci, Michaelangelo, Raphael, Donatello,
Caravaggio and Filippo Brunelleschi, among many others, became brands in them-
selves and gained fame for their work internationally.
Similar to the Chinese systems of kin groups in ancient times, early guild-like
associations existed in most civilizations.16 From the 11th century onwards,
however, guilds started taking a more structured form across Europe as craftsmen
united to protect their common interests.17 Guilds controlled trade in many cities
and shaped the flow of labour and production. By controlling the supply and
demand for various specialist goods, guilds were able to establish their own

distinctive identities. While guilds helped create unique brands and supported their
members through their trade monopoly locally and regionally in most cases,
scholars also argue that many guilds turned primarily into profit-seeking entities.
This, in turn, inhibited quality, skills and innovation.18
The Industrial Revolution

The Industrial Revolution acted as a catalyst for a new wave of branding propagated
by some of the pioneering multinational companies of the time such as the East India
Company and the Dutch East India Company. Initially starting as trading companies,
these organizations flourished as they engaged in the export and import of a variety
of commodities including clothing, machinery, spices, tea and opium from a number
of different European and Asian countries. With intensified trading and competition,
the need for a distinctive brand name, mark and/or logo became even more pro-
nounced, which contributed towards modern branding practices.
Companies such as Twinings, a tea company established in London in 1707, de-
cided to differentiate itself through an elaborate logo in 1787, which is considered
the oldest commercial logo in continuous use.19 However, the oldest commercial
logo belonging to a business that still exists today is attributed to the lager brand
Stella Artois. The origin of the logo can be traced to 1366 with the establishment of
Den Hoorn Brewery in Leuven, Belgium. The two horns in the Stella Artois brand
have remained part of the brand logo since 1366, while other features such as the
text, font and style have changed over the years. Table 2.1 lists some of the oldest
brand logos of companies that still exist today.
Similar to a goods-centred economy, the service economy also flourished through-
out history. While the goods travelled across countries and kingdoms, services were
predominantly localized. Many such service-oriented brands have survived for cen-
turies and continue to trade today, predominantly in the hospitality and education
sectors. For instance, the oldest continuously operating hotel brand in the world,
Nishiyama Onsen Keiunkan in Japan, was established in the year 705 and has been
Table 2.1 Examples of old brands and the introduction of their logo
Year of company
Brand name establishment Logo first used Industry
Stella Artois 1366 1366 Beverage

Twinings 1707 1787 Beverage
Bass Ale 1777 1876 Beverage
Peugeot 1810 1850 Automotive
Shell 1833 1904 Energy
Levi Strauss 1837 1886 Clothing
Louis Vuitton 1854 1896 Luxury
Sherwin-Williams 1866 1905 Chemicals
Nestlé 1868 1868 Food
Heinz 1869 1869 Food
Prudential 1875 1896 Insurance
Coca-Cola 1886 1886 Beverage
Johnson & Johnson 1886 1887 Healthcare
28 Brand Management
operated by 52 generations of the same family over the past 1,300 years.20 Similarly,
the oldest continuously run restaurant brand in the world, St Peter Stiftskulinarium
in Austria, came into existence in the year 803.21 Shishi High School in Chengdu,
China opened in 143–141 BCE and is claimed to be the oldest existing school in the
world.22 Such examples show the existence of service brands that have stood the test
of time. In contrast to the historic period, global service brands have emerged and
flourished in the modern times across many traditional and new sectors.
Branding in the modern world

With the arrival of the 20th century, due to technological and logistical advance-
ments, multinational corporation emerged that were producing and selling their
goods and services in many different countries. Brands such as Nestlé, Coca-Cola,
IBM and Ford Motor Company initially exported their products in various foreign
markets and then opened factories in different parts of the world. These brands
became household names in many international markets. The two world wars in
the 20th century altered the scope and scale of the demand and supply for goods
and services.
At the start of the 20th century, most industry sectors were highly fragmented,
largely served by local or at best regional players. During World War I, however, the
US government in particular enforced the idea of ‘simplification’ in the US industry,
which then resulted in a standardization movement.23 A survey of 84 product cate-
gories in 1929 showed a substantial reduction in variation within a decade.24 For
example, the variation in bed blanket sizes reduced from 78 to 12, and from 33
variations in hospital beds when they were standardized to one size fits all. This had
a significant effect on market competition where small manufacturers almost van-
ished and were replaced by large, integrated operations producing standard-sized
products. Emergence of these large corporations allowed mass production and mass
marketing as well as a standardized approach to branding.
However, post-World War II, technological and logistical advancements combined
with greater market access and consumer affluence meant that managers were able
to provide a greater variety of products and services, driving a gradual move from
the extreme forms of standardization. This was also supported by the management
thinkers of that time, who promoted the initial strategic orientation for ‘market
segmentation’.25 26 The movement was predominantly geared toward the aggregation
of the submarket or the market class rather than customization at an individual
level.27 As different segments were created by marketers, a variety of corresponding
brands, sub-brands and their variants were developed. However, with most products
looking functionally similar, marketing and brand managers were faced with the
task of creating a unique identity for their products in a cluttered marketplace.
This led to the use of a variety of psychological techniques for distinguishing a

product from the competition. The increasing use of segmentation-driven
communication included factual information as well as emotional triggers. For

instance, marketers started using gender- and age-based stereotypes in advertising, as
demonstrated in the examples in Figure 2.1. To develop an emotional connection
with consumers, marketers increasingly used movie stars and famous sports
personalities as endorsers of their products. Further, the advent of colour TV in 1951
provided a novel medium for brands to communicate their identities beyond
billboards, radio and other signage mediums.
The increasing use of psychology led to accusations of manipulation from and
mistrust towards marketing. Scholars argued that the increased consumer choice
and related marketing activities were not particularly beneficial to the consumer
themselves, rather it brought profit to the industry.28 However, at the same time,
critical scholars also acknowledged the improvements in the quality of life afforded
by the growth of industry.29 Thus, the growth of industry and brands led to critical
debates regarding the benefits accruing from economic growth versus the ethics
related to the growing reliance on often zealous and sometimes manipulative
marketing practices.
Growing importance of product quality

As products proliferated and competition grew across markets globally post-World
War II, product quality became a paramount factor for consumer choice. Companies
highlighted their product quality throughout their communications. Interestingly, an
American engineer and mathematical physicist, W. Edwards Deming, who helped
develop the sampling techniques for Census and Labour statistics in the USA and
Japan, led a completely new movement focusing on quality management that was
embraced by the Japanese firms.30 Through his training of engineers and managers,
Deming created the Total Quality Management (TQM) idea. Many Japanese firms
including Yamaha, Toyota and Sony applied Deming’s quality management ideas in
their manufacturing and supply chains resulting in substantial productivity and
quality gains. With their relentless pursuit of quality improvement, these companies
became trusted household brands in many parts of the world and have continued to
flourish globally.
Throughout the 1980s and 1990s, globalization fuelled economic growth which
led to a healthy middle class in markets across the Americas, Europe and Asia.
Consequently, companies started taking into account cultural and regional differ-
ences and adapted their branding practices accordingly. This led to scholarly debate
regarding the suitability of standardization versus customization approaches.31,32
Firms started following different branding philosophies for their international
30 Brand Management
perations. Many brands such as Apple, Microsoft, McDonald’s and Sony adopted
o
standardization, while others, including Nestlé, P&G and Unilever, developed or
acquired numerous local/regional brands in their portfolios. A further approach
emerged that bridged the standardization versus customization debate in the early
1990s wherein to benefit from the economies of scale some firms adopted a glocal
approach. Through this approach, brands aimed to pursue standardization with a
relevant local adaptation in product offerings and communications, as seen in the
example below.
McDonald’s approach to glocalization
McDonald’s, an American firm, is one of the largest fast-food chains in the world
with more than 38,000 outlets in over 100 countries.33 Started in 1940 by brothers
Maurice (Mac) and Richard McDonald in California, USA, the company pioneered an
efficient format of service by creating a limited menu that included hamburgers,
potato chips, drinks and pies as well as a self-service counter eliminating the need
to be served on a table by staff.34 In the 1950s, Ray Kroc joined the brothers as a
franchise agent and launched the first McDonald’s franchise. In 1961, Kroc took over
McDonald’s Corporation.
Kroc was a firm believer in standardization and set out exacting standards from
food preparation to cleaning which were taught at the Hamburger University to
franchisees. He also launched the highly recognizable double-arch M design logo.
McDonald’s offers the same décor and processes throughout the world through
standardization. Moreover, it offers several products with the same brand name
globally including McChicken, McNuggets, McFlurry and Happy Meal.
However, with its international expansion the firm has increasingly customized its
menu and communications in many markets. For instance, in Japan, in spring,
McDonald’s offers Teri Tama Burger while in autumn it sells the Tsukimi Burger.35
In India, to avoid the cultural taboo attached to beef consumption, McDonald’s
launched the Chicken Maharajah Mac.36 Further, to serve the large vegetarian
population of India, a separate vegetarian kitchen and other menu items such as the
McAloo Tikki Burger were added. To serve Islamic markets, McDonald’s replaced
pork with fish in its menu, and offered Halal meat as well as a special menu for
Ramadan festivities.37
As shown above, McDonald’s standardization approach helps in achieving
uniform speed and efficiency of supply chain and service, cleanliness and hygiene.
At the same time, customization responding to cultural, religious and local palettes
assists the brand in satisfying customers globally.
The internet age

The advent of the internet and its commercialization in the mid-1990s created a new
avenue for branding. The internet-driven digital economy grew at a rapid pace and
many brands were quick to adapt while others were late adopters. The internet was
an equalizer for small and large brands alike. Brands could easily reach out to a vast
body of consumers globally through their website and other social media as they
grew in prominence over the years. The internet also led to online-only brands such
as Amazon, eBay, Google and Facebook.
The digital transformation grounded in internet technology assisted brand com-
munication in a variety of ways. Brands were now able to communicate their mes-
sage to a wider audience. From a demand-side, the internet allowed brands to convey
their story through a variety of means beyond the traditional newspaper and televi-
sion adverts such as blog posts, videos, photos and social media. In the pre-internet
world, most brand communication was a one-to-many endeavour wherein the brand
promoted itself via traditional means. The internet allowed customers to co-create
brand message which led to many-to-many communications. On the supply side,
brands were able to coordinate the flow of goods and services globally through the
power of continuous connectivity leading to significant growth in international
trade. Within the last two decades, brands’ spend on digital media has increased
manyfold compared to traditional media.
The future for brands

As these sections have shown, branding has evolved throughout human history.
From the simple seal that identified goods by a specific merchant, branding has de-
veloped into a multidimensional endeavour that encompasses both science and art
and benefits from knowledge emanating across disciplines such as anthropology,
sociology, psychology, economics, management and mathematics. In recent decades,
branding has developed as a discipline of its own and is aided by continuous robust
research which is driving the future of branding.
Ample avenues exist for brands to evolve further. Modern technology allows
brands to build their voice in a cluttered marketplace. The advances in neuroscience,
cognitive psychology and the emergence of techniques associated with Big Data ana-
lytics are helping branding researchers to understand the individual and social psy-
chology and behaviours on an unprecedented scale. As a result, many brands are
moving towards hyper-personalization. For instance, based on cookies and other
predictive analytics-based approaches, brands are able to personalize individual dig-
ital experiences taking into account individual socio-demographic, geography,
psychographic and behavioural variables. Amazon customizes its webpages and
32 Brand Management
r ecommendations depending on the aforementioned variables as consumers search

through its website. Similarly, all social media platforms track visitor activities and
customize content and customer experience accordingly.
Such changes, driven by information asymmetry wherein brands possess substan-
tial amounts of data and information about customers, is leading to a power imbal-
ance in the market. The available data and analytics have allowed brands to gain
deep insights about their customers, tipping the balance in their favour. Such market
power held by brands can sometimes lead to manipulative practices that can harm
their customers’ interests and wellbeing. To avert such imbalances, governments and
policy makers have created interventions including the European General Data
Protection Regulation (GDPR)38 which enables greater protection to consumers re-
garding the use of their personal data by brands.
Supplemented by technological advances, branding will continue to evolve. While
traditional principles and concepts – such as brand elements, brand architecture,
brand loyalty and equity, brand positioning, communication and engagement, brand
extension and cobranding – will continue to hold their sway, the approach will be-
come more sophisticated. Customer data is generated in unprecedented volumes in
today’s marketplace on a continuous basis. Capturing, curating and managing this
data in a meaningful way is going to be a major challenge for the brands beyond the
segmentation and targeting objectives. Such data will also assist brands in offering
increasing transparency and consumer protection which can become future differen-
tiators for the brands to aspire for. Brands that transfer the power of data to their
customers may reap significant rewards in reputation and trust.
As we move towards the future, brands will have to play an increasingly impor-
tant role as societal flagbearers in regards to sustainability and social responsibility.
Recent research shows that consumers expect their brands to be doing more ‘good’
and not ‘less bad’.39 Moreover, consumers increasingly expect brands to take an
ethical stance40 and even at times a social activist stance.41 In future, brands will have
to authentically demonstrate their sustainability and social responsibility credentials
to gain consumer appreciation and engagement. While such initiatives may not lead
to increasing sales or profitability, with greater consumer consciousness about future
of the planet and human welfare issues, it is imperative for the brands to integrate
these activities for their long-term survival and success.
Chapter summary
This chapter first discussed the evolution of the term ‘brand’. We then identified how
branding as a practice evolved in ancient civilizations across the world as merchants
needed to differentiate their goods from other competitors to highlight their origin
and quality. The practice of branding did not change much throughout the middle
ages. However, increasing global trade led to newer concepts such as people brand-
ing which evolved through the expertise of master craftspeople of the time. The roots
of modern branding practices can be traced back to the Industrial Revolution in
Europe with many multinational brands emerging in the 17th century and onwards.
We also discussed the parallel evolution of service brands. The chapter also reflected
on modern branding practices from the start of the 20th century, pre- and post-
World Wars I and II. We also discussed the impact of the digital revolution and the
future of branding. Understanding the growth and evolution of branding will allow
you to comprehend the deep roots of this discipline throughout human history and
appreciate the consistency as well as the evolutionary characteristics of branding.
Key concepts
●● Defining brands
●● Branding history
●● Branding in ancient civilizations
●● Branding through the Middle Ages
●● Branding in the modern world
●● The future of branding
Exercise questions
1 Discuss the evolution of the word brand.
2 What were the key drivers for branding in ancient civilizations? Explain with
examples.
3 Did branding practice differ throughout ancient civilizations to the Middle Ages?
Why and how?
4 How did branding evolve in 20th century? What were the primary drivers?
5 Explain with examples the key considerations that brands will have to take into
account for success in the 21st century.
34 Brand Management
CASE STUDY Time travel through the Nestlé story
Please read the history of Nestlé, and do the following:
1 Evaluate the critical factors leading to the creation of brand Nestlé.

2 Critically examine the landmark changes in the branding of Nestlé through history.
3 Discuss the changing focus on consumer convenience, wellbeing and shared values in
Nestlé’s branding in modern times.
4 Critically reflect on Nestlé’s current branding strategy and recommend steps the brand
should take to help ensure its long-term success.
SOURCE www.nestle.com/about/history/nestle-company-history
Endnotes
1 Moore, K and Reid, S (2008) The birth of brand: 4000 years of branding, Business
History, 50 (4), 419–32
2 Stern, B B (2006) What does brand mean? Historical-analysis method and construct
definition, Journal of the Academy of Marketing Science, 34 (2), 216–23
3 Calder, B J and Reagan, S J (2001) Brand Design. In Dawn Iacobucci (ed.), Kellogg on
Marketing, John Wiley, New York, pp 58–73
4 Brand names on menus? 1922, Oxford English Dictionary 2022:II.9
5 Ibid.
6 Bastos, W and Levy, S J (2012) A history of the concept of branding: Practice and
theory, Journal of Historical Research in Marketing, 4 (3), 347–68
7 Moore, K, and Reid, S (2008) The birth of brand: 4000 years of branding, Business
History, 50 (4), 419–32
8 Ibid.
9 Wengrow, D (2008) Prehistories of commodity branding, Current Anthropology,
49 (1), 7–34
10 Moore, K and Lewis, D C (2009) The Origins of Globalization, Routledge
11 Eckhardt, G M and Bengtsson, A (2010) A brief history of branding in China, Journal
of Macromarketing, 30 (3), 210–21
12 Moore, K and Reid, S (2008) The birth of brand: 4000 years of branding, Business
History, 50 (4), 419–32
13 Harrison, R J (1988) Spain at the Dawn of History: Iberians, Phoenicians and Greeks,
Thames and Hudson, London
14 Osborne, R (1998) Archaic and Classical Greek Art, Oxford University Press
15 Frankopan, P (2015) The Silk Roads: A new history of the world, Bloomsbury
Publishing
16 Epstein, Steven A (1995) Wage Labor and Guilds in Medieval Europe, University of
North Carolina Press, Chapel Hill, NC, pp 10–49
17 www.britannica.com/topic/guild-trade-association (archived at https://perma.cc/
QV34-M5GU)
18 Ogilvie, S (2004) Guilds, efficiency, and social capital: Evidence from German proto-
industry, The Economic History Review, 57 (2), 286–333
19 https://twinings.co.uk/blogs/news/history-of-twinings (archived at https://perma.cc/
VC5N-T3BR)
20 https://keiunkan.co.jp/en/ (archived at https://perma.cc/MAS6-TBB6)
21 www.stpeter.at/en/ (archived at https://perma.cc/GR86-BXW4)
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29 Tadajewski, M (2010) Towards a history of critical marketing studies, Journal of
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30 https://asq.org/quality-resources/total-quality-management/tqm-history (archived at
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31 Levitt, T (1983) The globalization of markets, Harvard Business Review, May–June,
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32 Douglas, S P and Wind, Y (1987) The myth of globalization, Columbia Journal of
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33 https://corporate.mcdonalds.com/corpmcd/franchising-overview.html (archived at
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36 Brand Management
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38 https://gdpr.eu/ (archived at https://perma.cc/8H35-9EBY)
39 Davies, I A, Lee, Z and Ahonkhai, I (2012), Do consumers care about ethical-luxury?,
Journal of Business Ethics, 106 (1), 37–51
40 Singh, J (2016) The influence of CSR and ethical self-identity in consumer evaluation of
cobrands, Journal of Business Ethics, 138 (2), 311–26
41 Moorman, C (2020) Commentary: Brand activism in a political world, Journal of
Public Policy & Marketing, 39 (4), 388–92
37
Research streams 03
in branding
Overview
The focus of this chapter is to provide an overview of research traditions in brand-
ing. In the first section we explain the key developments and empirical research on
brand buying behaviour. This part focuses on ‘how’ consumers buy their brands. In
the second section we bring in the research on ‘why’ consumers buy and relate to
their brands, that is, the research underpinned by the psychology of branding. In the
third section, we highlight key research on branding through the lenses of sociology
and anthropology.

●● Develop understanding on different research streams in branding

●● Gain knowledge on the three main aspects of branding research
●● Understand how the theories and insights from different disciplines inform
branding research
●● Appreciate the scholarly debate on branding research
●● Develop insights into of the latest branding research
How do consumers buy brands?

A major challenge in branding research has centred around consumer buying behav-
iour. While brand buying remains a highly complex phenomenon, brand managers
have consistently aimed to maximize their sales and profits through understanding
how their brands are being bought by the buyers. Consequently, models that identify
brand buying patterns emanating from mathematics and statistics disciplines enable
38 Brand Management
brand managers to manage the inventory as well as understand their brand’s levels
of loyalty in the competitive markets, i.e. how much customers stick with the brand.
In addition, forecasting models provide estimates of future brand sales and assist
with product planning. Such models have become well-established and widely
adopted by the branding practitioners. In the following section, we provide an over-
view of the research on how people buy their brands.
Understanding brand buying through consumer panel data

People engage in buying various goods and services using a variety of means. With
the proliferation of products and services with seemingly similar features across
markets, understanding consumer choice processes has been a critical issue for mar-
keting researchers. How do consumers choose one brand over the others? This ques-
tion has garnered significant interest among research scholars and practitioners.
Scholars initially suggested that when faced with products similar in features, gen-
eral qualities and external appearance, consumers preferred a brand based on their
previous buying experience, advertising or recommendation.1 The question remained
at the forefront for researchers, however, due to lack of robust data collection meth-
ods – the measurement of actual brand preference and purchase remained scarce. In
1942, H L Churchill advocated the use of panels of consumers who agreed to record
their purchases on a regular basis in a diary. The diary was then used to analyse how
different brands were bought by the consumers.
One of the first consumer panels that recorded consumer preferences and be-
haviour was run by Chicago Tribune. The data was analysed by George Brown in
1953 to understand customer preference.2 Brown showed that the consumers
could be divided into four segments based on their buying record for a brand: sole
buyers, divided buyers, unstable buyers and no buyers. Such analyses of historical
buying record became popular. Later researchers used panel data to further estab-
lish how consumers were buying their brands.3 4 In the UK, the Attwood Panel
similarly collected continuous purchase data across several product categories.
Taylor Neslon (UK), Sofres (France), Frank Small (Australia), Intersearch (USA)
and Research International (UK) were other popular consumer panels operating in
the 1960s and onwards. Through mergers and acquisitions the panels grew in size
and became established as providers of robust purchase data on how consumers
were buying brands across categories over time. Currently, the Kantar Group,
IRIWorldwide, GfK, Nielsen and Dentsu are some of the major providers of con-
sumer panel data.
Research streams in branding 39
Empirical generalizations in marketing

A substantial amount of research evidence employing panel data has emerged over
the past six decades. This body of research focuses solely on examining how consum-
ers buy their brands, and empirically establishing patterns in brand buying behav-
iour. One of the pioneer scholars is Andrew Ehrenberg, who, with his colleagues,
observed empirically generalizable patterns of buyer behaviour in purchase data.
These patterns were then juxtaposed with mathematical modelling to establish law-
like relationships of buying.
The underlying precepts of this body of research lie in the scientific tradition of
generalizing empirical results that are generated in different conditions. The phe-
nomenon is now well-established as ‘empirical generalizations’ which has laid the
foundations for studying how consumers buy their brands. One of the leading schol-
ars espousing the tradition was Frank Bass who defined empirical generalizations as
a pattern or regularity that repeats in different circumstances and which can be de-
scribed simply by mathematical, graphic or symbolic methods.5 Ehrenberg suggested
that the lawlike relationships of science are descriptive generalizations, and they are
also the building blocks of higher-level theory and explanation.6
In marketing literature, studies based on empirical generalizations have been devel-
oping steadily over time. Patrick Barwise added another perspective to the discussion
with his listing of five characteristics of a good empirical generalization: scope, preci-
sion, parsimony, usefulness and link with theory.7 A good empirical generalization, for
example, will have a wide scope in terms of results showing consistent patterns under
different conditions, contexts, countries, product categories and period. Similarly, the
generalized results will demonstrate higher precision in terms of replicability of the re-
sults. Parsimony in research refers to the use of fewer variables to predict a generalizable
outcome. Often there may be a trade-off between scope and parsimony, however, with
repeated generalizations, a parsimonious model can emerge. Good empirical generaliza-
tions should also provide useful benchmarks to the marketing practitioners, who should
be able to apply the patterns for realistic marketing decisions. Further, linking empirical
generalizations with theory is critical to establish that the predictions are reliable, ex-
plainable and the reason some generalizations may not hold under certain conditions.
Other scholars further advocated the use of replication studies across multiple
sets of data covering a wide range of conditions to establish the scope of empirical
generalizations.8 9 Empirical generalizations can thus be transformed into the build-
ing blocks of scientific knowledge. The idea of using multiple sets of data is central
to producing generalizable results that lead to empirically grounded theory.10 Such
results are, in turn, highly useful and applicable for branding practice, as demon-
strated in the following ‘Branding in practice’ box.
40 Brand Management
Empirical generalizations in brand management
The systematic study of brand performance metrics has led to generalizable

patterns, as summarized here:
●● Brand penetrations vary within a product category and are much lower for
smaller brands.
●● Average buying frequencies do not vary much amongst brands in a category.
Underlying these averages, some individuals are heavy buyers and others light
buyers.
●● Smaller brands not only have fewer buyers than larger brands, but buyers of
smaller brands also buy the brand slightly less often than do buyers of bigger
brands – the so-called double jeopardy effect.11
●● 100% loyal buyers are relatively rare – in one year, almost all buyers of a typical
brand are multi-brand buyers and divided in their loyalty.
●● Levels of loyalty are higher in shorter-length periods, mainly because there are
fewer opportunities to purchase different brands in shorter periods compared to
longer periods.
●● Most buyers of a brand also buy other brands leading to the duplication of
purchase, which correlates with brand penetration.
SOURCE Singh and Crisafulli (2022)
Challenges of generalizability
In general, in management and marketing research there is a distinct lack of studies
that are replicated across various contexts to establish generalizability. The reli-
ance on a single data source has also taken roots in managerial practice, where
brand managers often rely on cross-sectional studies for branding decisions. Studies
with a single set of data may be considered anecdotal in nature as the business
manager might want to know, for instance, whether or not a planned communica-
tions campaign will have a productive impact across the sector. Such practices that
rely on a single data source pose a question about the scientific rigour and practical
applicability of the results. Given that the results are not tested or re-validated
across varying contexts, their generalizability remains unclear. In this regard, in
academic inquiry, meta-analytic studies are increasingly gaining popularity.
A meta-analysis that combines the results of dozens or hundreds of comparable

studies may reveal a replicable pattern in the data, which forms the basis of an em-
pirical generalization that is highly informative to the decision makers.12 In the past,
studies have illustrated how meta-analysis has produced empirical generalizations
concerning parameters in models of advertising, price, diffusion and consumer be-
haviour.13 In pricing research, the results of 1,851 published price response estimates
were used to conclude that average brand-level price elasticities are −2.62.14 In prac-
tical applications, price elasticities may indicate levels of brand loyalty. This suggests
that a price increase might not lead to a reduction in sales, and the brand should aim
for a lower price elasticity figure. Thus, the meta-analytical result of −2.62 could
serve as a benchmark for pricing decisions. Similarly, in a meta-analysis of 290 stud-
ies on brand relationship elasticity that denotes the relationship between brand rela-
tionship strength and customer brand loyalty, the overall elasticity was found to be
0.44. The figure can help managers to estimate the percentage increase in customer
loyalty resulting from investments in brand relationship activities.15 In branding re-
search, such studies can help managers in using empirically generalizable research
findings for robust decision-making.
Use of modelling in branding research

Over the years, marketing scholars have developed models using mathematical and
statistical principles. These models have been widely used by branding practitioners
to understand brand buying behaviour and predict future buyer behaviour. Broadly,
the models are classified as being either decision or descriptive models. John D Little,
in 1994, contrasted the two approaches: decision models are for solving problems
whereas descriptive models seek to uncover marketing phenomena and to represent
them.16 Decision models include marketing activities that are controllable by the
organization, such as price, sales promotion and advertising, and leave out others.
Decision models often utilize popular statistical technique such as logit modelling.
Descriptive models such as the Hendry, first-order Markov, NBD, NBD–Dirichlet, on
the other hand, aim to descriptively provide information on the phenomena, for in-
stance, patterns of buying or repeat purchase behaviour.
Managers and researchers use decision models to identify potential solutions to
their current marketing problems by attempting to determine causality; for example,
the impact of price discount on sales, the influence of advertising on market shares
or whether personal selling or advertising would have a stronger impact on sales.17
Critiques have, however, pointed out several deficiencies in decision modelling ap-
proaches.18 For instance, decision models are said to be simplistic, and are unable to
account for all possible variables that could influence a causal outcome. In the
42 Brand Management
afore mentioned example of the influence of advertising on market shares, several

other variables could impact causality, such as brand equity, promotional activities
of competitors, the weather, seasonality, availability, amongst others. Similarly, the
predictive capability of such models is doubtful, given the contextual and temporal
issues involved. For instance, a brand manager predicting ice cream sales would need
access to accurate weather data that also accounts for weather fluctuations. Such
data is hard to come by and could lead to sub-optimal marketing decisions. Causal
inferences derived from decision models have also been questioned, due to the dy-
namic consumption experiences and practices in the digital environment.
Descriptive models typically examine large-scale purchase data and derive infor-
mation and patterns that can be used to describe present and predict future buying
behaviour. Descriptive models have been hailed as being more useful for realistic
marketing decisions. The models identify patterns of purchase behaviour, and pro-
vide insights and predictable benchmarks for evaluating change. As in many other
areas of engineering and other sciences, models which successfully describe general-
izable marketing phenomena first show us what, where, how and how much.
However, they can then also help in deciding what to do and why.19 For instance,
models such as the NBD-Dirichlet provide benchmarks for evaluating the market
performance of brands, as well as predicting the future buyer behaviour. The model
fits over a wide range of contexts, and time periods, and has spawned a substantial
body of academic papers, and found applications in marketing practice.20 Descriptive
models have been critiqued for lacking the function of explaining the psychology of
purchase behaviour; in other words, why consumers buy brand A over brand B.
Why do consumers buy brands?

The research on the reasons for purchase of brand products/services has developed
in parallel to the research traditions discussed in the preceding sections. Since the
publication of one of the first books in the domain, The Science of Advertising, by
Edwin Balmer 1910, the academic discipline of marketing started taking shape.
Academic journals such as the Harvard Business Review (est. 1922), Journal of
Retailing (est. 1925) and the Journal of Marketing (est. 1936) provided a platform
for disseminating research findings and spurred further academic research in mar-
keting and branding. The issue of why consumers buy has been the research focus for
marketing researchers since the start of the formal academic research tradition. For
instance, the first issue of the Journal of Marketing published an article titled ‘Why
people buy at department stores’ (1936).21
Several established academic disciplines such as sociology, social psychology, an-
thropology, psychology, economics, statistics and mathematics shaped the branding
and marketing thought. Drawing from these, researchers developed new branding
ideas and terminology. For instance, in the 1950s and the 1960s, terms such as brand
loyalty, brand segmentation, lifestyle branding and marketing mix were coined.
Similarly, in the 1970s and 1980s, terms such as brand positioning, brand equity,
social and relationship marketing emerged. Further developments were in the areas
of brand identity, relationship branding, brand communities, not-for-profit branding
and brand origin throughout the 1990s and early 20th century.22 In the following
sections, we bring together some of the theories in respective disciplines that have
been influential in shaping the discourse and research in branding.
Psychology and sociology

Psychology is the scientific study of the human mind and its functions, especially
those affecting behaviour in a given context. Sociology, on the other hand, is the
scientific study of social life, group behaviour, social change, and social causes and
consequences of human behaviour. These disciplines have impacted branding re-
search in a substantial way, especially in understanding why consumers buy one
brand over others, why they connect or disengage with their brands, and why they
continue patronizing their brand.
The discipline of psychology has profoundly influenced branding thought and
literature in modern times. Psychological theories, such as attribution theory, bal-
ance theory, cognitive dissonance, elaboration likelihood model and self-identity
theory, have impacted research on enhancing our understanding of consumers and
their relationship with brands.
Similarly, theories from the discipline of sociology have guided some pathbreak-
ing research on branding. Theories such as symbolic interactionism, impression
management, social exchange and social capital, amongst others, have played an
important role in shaping research in branding. A brief overview of some of the
prominent theories is provided in Table 3.1.
In terms of brand consumption behaviour, a distinct branch that has developed in
recent years is that of consumer culture theory.23 Scholarly work in the field emanates
from social anthropology and ethnographic and netnographic studies rooted in other
disciplines.24 The consumer culture theory denotes that consumption choices are
grounded in cultural and social norms. The study of subcultures has spawned research
in understanding the impact and dynamics of brand communities as well as how con-
sumer identities evolve and impact global brand consumption behaviour.25 26
Economics and behavioural sciences

While psychological and sociological theories examine individual and group be-
haviour, theories in economics, in particular behavioural economics, focus on the
44 Brand Management
Table 3.1 Prominent theories and their applications in branding
Theory Key source Meaning Application
Attribution Heider, F (1958) The Accounts for how A toothpaste brand

theory Psychology of individuals perceive the communicates that it is
Interpersonal causes of everyday the most preferred
Relations, Wiley, experience, as being brand for the dentists.
New York either external or The quality of the brand
internal. is attributed to the
dentists’ preference.
Cognitive Festinger, L (1957) People strive for When a consumer
dissonance A Theory of consistency. A person realizes that their
theory Cognitive who experiences preferred brand is from
Dissonance, internal inconsistency a country that they have
Stanford University tends to become a negative opinion of,
Press, California psychologically then their preference for
uncomfortable and is the brand may change.
motivated to reduce the
cognitive dissonance.
Elaboration Petty, R E and Focusing on attitude A car brand advertises
likelihood Cacioppo, J T (1986) change, the ELM catering to both central
model Communication and proposes two major and peripheral routes
Persuasion: Central routes to persuasion: through communicating
and peripheral the central route (careful various features of the
routes to attitude evaluation and car, such as speed,
change, Springer- processing) and the design, colour, safety
Verlag, Berlin, peripheral route (simple and fuel efficiency.
Germany inferences and low
involvement).
Social-identity Tajfel, H and Turner, People identify A brand highlights the
theory J C (1979) An themselves based on nature of the people
integrative theory of their affiliation with who use their products
intergroup conflict, social groups (ingroup), or services (e.g.
in W G Austin and S or being excluded from celebrities – luxury).
Worchel (eds.) The such groups (outgroup).
Social Psychology of
Intergroup
Relations, Brooks/
Cole, Monterey, CA,
pp 33–47
(continued)
Table 3.1 (Continued)
Theory Key source Meaning Application
Impression Goffman, E (1959) It is a conscious or A brand highlights its

management The Presentation of subconscious process in sustainability credentials
Self in Everyday which people attempt to for people who would
Life, Penguin, influence the want to be seen as
Garden City, NY perceptions of other pro-environment.
people about a person,
object or event by
regulating and
controlling information in
social interaction.
Social Thibaut, N and Social exchange theory A brand communicates
exchange Kelley, H (1959) The proposes that social its unique benefits in
theory Social Psychology of behaviour is the result of comparison to the
Groups, Wiley, an exchange process. competitors.
New York The purpose of this
exchange is to maximize
benefits and minimize
costs.
Persuasion Friestad, M and People are aware when A brand in its
knowledge Wright, P (1994) The there is a persuasion communications
theory persuasion attempt made to change attempts to avert
knowledge model: their beliefs. Such persuasion knowledge
How people cope persuasion knowledge by using subtle signals.
with persuasion suppresses their attitude
attempts, Journal of change.
Consumer
Research, 21 (1),
I31
Social capital Bourdieu, P (1987) Individuals and groups In the digital space, a
theory Distinction: A social function together to brand enables customer
critique of the create a shared identity, reviews to influence
judgement of taste, norms and values that purchase amongst
Harvard University foster relationships. consumers.
Press
economic value and agency perspectives. For instance, the well-known game
theory, which examines how people base their decisions on the expected behaviour
of others, has been applied in branding research to investigate the competitive be-
haviour of brands’ advertising and pricing strategies.27 Signalling theory, another
landmark development in economics that derives from the principles of information
46 Brand Management
asymmetry, has had profound influence on branding research.28 Scholars have

employed signalling theory to examine a variety of branding contexts, such as
corporate branding, digital branding, luxury branding, brand communications
transparency and advertising.29
A group of theories that examines value as a construct grounded in exchange of
goods and services has also informed branding research.30 The theory of value has
been used to examine areas such as retail branding, brand communications, luxury
branding, digital branding, employer branding, place branding and the branding of
sustainable goods.31 In behavioural economics, Daniel Kahneman and Amos Tversky
provide evidence that people behaved irrationally in uncertain conditions, contra-
dicting the economic theory of expected utility maximization.32 Known as the pros-
pect theory, the research has had a tremendous influence in understanding perceived
fairness, loss aversion, emotions and attitudes in branding.33
With the advent of the digital age, branding researchers have employed the net-
work effects theory to understand how consumers relate to their brands in the
digital space.34 The theory states that the value of a product or service increases
with a greater number of users engaging in consumption. The theory finds applica-
tions in studying the effectiveness of social media messaging of brands, brand crisis
communications, mobile platforms, brand extensions, brand popularity and brand
communities.35
Chapter summary
After providing an overview, the chapter delved into the specific research traditions
or streams in branding. In the first part, the chapter encapsulated the key question of
how consumers buy their brands. In this part, the chapter summarized key research
emerging from mathematical sciences. Here the empirical generalizations tradition is
discussed, with examples of key research and how the stream developed over the
decades. That section also included the use of quantitative modelling in branding
research. In the following section, the chapter brings together views on why consum-
ers buy brands, delving into a number of theories from psychology, social psychol-
ogy, sociology, economics and other disciplines, with examples of applications in
branding research.
Key concepts
●● Patterns of buyer behaviour
●● Empirical generalizations in branding
●● Modelling brand buying behaviour

●● The psychology of branding
●● Theories that influence branding research
Exercise questions
1 What are the main patterns of buyer behaviour?
2 How can the empirical generalization patterns help brand managers?
3 What the main traditions of branding research?
4 Name three theories that you think are important to understand branding research
and explain their contributions to the domain.
5 How has economics influenced branding thought?
Endnotes
1 Copeland, M T (1923) Relation of consumers’ buying habits to marketing methods,
Harvard Business Review, 1 (2), 282–89
2 Brown, G H (1953) Brand loyalty—fact or fiction? Advertising Age, 24 (26 January),
cited in A S Ehrenberg and G J Goodhardt (1968) A comparison of American and
British repeat-buying habits, Journal of Marketing Research, 5 (1), 29–33
3 Cunningham, R M (1956) Brand loyalty – what, where, how much, Harvard Business
Review, 34 (1), 116–28
4 Oakes, R H (1957) Resale price maintenance in Chicago, 1953–55 (A Study of Three
Products), The Journal of Business, 30 (2), 109–30
5 Bass, F (1995) Empirical generalisations and marketing science: A personal view,
Marketing Science, 14 (3), G6–G19
6 Ehrenberg, A S C (1972/88) Repeat-Buying: Facts, theory and applications, 1st and 2nd
edns, Griffin, London; Oxford University Press, New York
7 Barwise, P (1995) Good empirical generalisations, Marketing Science, 14 (3), Part 2 of 2
8 Singh, J and Crisafulli, B (2022 Brands and Consumers: A research overview,
Routledge, London
9 Easley, R W and Madden, C S (2013) Replication revisited: Introduction to the special
section on replication in business research, Journal of Business Research, 66 (9),
1375–76
10 Ehrenberg, A S (1994) Theory or well-based results: Which comes first? in G Laurent, G
L Lilien and B Pras (eds.) Research Traditions in Marketing, vol. 5, Springer Science and
Business Media, Dordrecht, Netherlands
48 Brand Management
11 Ehrenberg, A S C, Uncles, M D and Goodhardt, G J (2004) Understanding brand

performance measures: Using Dirichlet benchmarks, Journal of Business Research,
57 (12), 1307–25
12 Hanssens, D M (2018) The value of empirical generalizations in marketing, Journal of
the Academy of Marketing Science, 46 (1), 6–8
13 Farley, J, Lehmann D, and Sawyer, A (1995) Empirical marketing generalisation using
meta-analysis, Marketing Science, 14 (3), Part 2 of 2
14 Bijmolt, T H A, van Heerde, H J and Pieters, R G M (2005) New empirical generaliza-
tions on the determinants of price elasticity, Journal of Marketing Research, 42 (2),
141–56
15 Khamitov, M, Wang, X and Thomson, M (2019) How well do consumer-brand
relationships drive customer brand loyalty? Generalizations from a meta-analysis of
brand relationship elasticities, Journal of Consumer Research, 46 (3), 435–59
16 Little, J D C (1994) Modeling market response in large customer panels, in R C
Blattberg, R Glazer and J D C Little (eds.), The Marketing Information Revolution,
Harvard Business School Press, Boston, MA, pp 150–72
17 Leeflang, P S and Wittink, D R (2000) Building models for marketing decisions: Past,
present and future, International Journal of Research in Marketing, 17 (2–3), 105–26
18 Ehrenberg, A S, Barnard, N R and Sharp, B (2000) Decision models or descriptive
models?, International Journal of Research in Marketing, 17 (2–3), 147–58
19 Ibid.
20 Ehrenberg, A S C, Uncles, M D and Goodhardt, G J (2004) Understanding brand
performance measures: Using Dirichlet benchmarks, Journal of Business Research,
57 (12), 1307–25
21 McDermott, L M (1936) Why people buy at department stores, Journal of Marketing,
1 (1), 53–55
22 Hampf, A and Lindberg-Repo, K (2011) Branding: The past, present, and future: A
study of the evolution and future of branding, Hanken School of Economics
23 Arnould, E J and Thompson, C J (2005) Consumer culture theory (CCT): Twenty years
of research, Journal of Consumer Research, 31 (4), 868–82
24 Kozinets, R V (2002) The field behind the screen: Using netnography for marketing
research in online communities, Journal of Marketing Research, 39 (1), 61–72
25 Muniz Jr, A M and O’Guinn, T C (2001) Brand community, Journal of Consumer
Research, 27 (4), 412–32
26 Fournier, S and Lee, L (2009) Getting brand communities right, Harvard Business
Review, 87 (4), 105–11
27 Milberg, S J, Cuneo, A and Langlois, C (2019) Should leading brand manufacturers
supply private label brands to retailers: Calibrating the trade-offs, Industrial Marketing
Management, 76, 192–202
28 Connelly, B L, Certo, S T, Ireland, R D and Reutzel, C R (2011) Signaling theory: A
review and assessment, Journal of Management, 37 (1), 39–67
29 Mandler, T, Bartsch, F and Han, C M (2021) Brand credibility and marketplace
globalization: The role of perceived brand globalness and localness, Journal of
International Business Studies, 52, 1559–90
30 Sheth, J N, Newman, B I and Gross, B L (1991) Why we buy what we buy: A theory of
consumption values, Journal of Business Research, 22 (2), 159–70
31 Shukla, P (2020) Luxury Value Perceptions: A cross-cultural perspective, Aalto
University Press
32 Kahneman, D (2011) Thinking, Fast and Slow, Penguin, London
33 Rossiter, J R (2019) A critique of prospect theory and framing with particular reference
to consumer decisions, Journal of Consumer Behaviour, 18 (5), 399–405
34 Katz, M L and Shapiro, C (1985) Network externalities, competition, and compatibility,
The American Economic Review, 75 (3), 424–40
35 Kumar, V, Nim, N and Agarwal, A (2021) Platform-based mobile payments adoption in
emerging and developed countries: Role of country-level heterogeneity and network
effects, Journal of International Business Studies, 52, 1529–58
50

51
PART TWO
Building brands –
principles and
applications
52

53
Brand features 04
Overview
In this chapter, we first describe the fundamental values that make brand features
effective through our novel ALARM framework. We discuss brand features through
the lens of the ALARM framework, with illustrations. In the first two sections, we
provide theoretical understanding of the use and purposes of brand feature strategy.
In the last section, we explain the need for a consistent brand feature strategy (CBFS)
along with the reasons for pursuing the strategy. The last section also includes
examples of brands that pursue the CBFS in practice effectively.

●● Understand the essential values that make brand features effective

●● Know the different features of a brand
●● Learn about the ALARM framework
●● Understand how the ALARM framework can guide the development of brand
features
●● Appreciate the importance of CBFS for effective branding
What are the essential values for brand features?

For effective branding, there are essential values that shape the brand features. These
values are grounding principles through which brands can communicate and
differentiate effectively in the marketplace. Over time, these values aid brands in
strengthening their associations through brand features. These essential values are
encapsulated in the ALARM acronym of brand features: Appealing, Legitimate,
Applicable, Recognizable, Meaningful.
54 Brand Management
Appealing
Brands by nature are created to connect and communicate with target customers.
Thus, a fundamental condition for any successful brand is that it is appealing to the
audience that it is aiming to connect with.1 To achieve this appeal, a brand has to
evoke a feeling of interest and likeability. Appealing brands can communicate both
utilitarian as well as hedonic aspects of the product or the service associated. One of
the core features of appealing brands is that it generates customer curiosity and in
turn may create a desire for the brand.
Legitimate
As stated in Chapter 2, brands were created to distinguish and protect the identity of
the owner. Initially used as a protection mechanism, in today’s world brands have
become highly valuable for their owners. Consequently, relevant legal frameworks
have emerged to support and protect the brand owners. Thus, legal aspects of legiti-
macy are deeply connected with the brand. Moreover, legitimacy is reflected in cus-
tomers’ perspective where customers feel trust in the brand. Legitimacy can be
achieved through a consistent approach in brand communication across a variety of
platforms and media. Such consistency over a period of time can help brands in sig-
nalling their legitimacy and be identified as genuine and reliable.
Applicable
In communicating a brand’s message, the brand owner is offering to fulfil the prom-
ise that the brand has made to its customers. A brand has to highlight why and how
it is suitable and fitting for task accomplishment. Thus, applicability is key to a
brand’s success. For many day-to-day brands, applicability gets highlighted in the
usefulness and utilitarian benefits. This creates heuristics, or shortcuts, in customers’
minds for decision making. For many high involvement brands, the applicability
aspect can help customers signal their identity.
Recognizable
A brand’s core purpose is to distinguish the brand from its competitors. Hence, rec-
ognizability plays a highly important role in brand’s success. Without recognizability
among its target population and beyond, a brand may not exist for long. To achieve
recognizability, a brand has to establish its distinction clearly. Moreover, the distinc-
tion that the brand wishes to convey has to be observable and understandable by its
target market. Without obvious and clearly perceivable brand benefits, a brand will
not achieve recognizability.
Brand features 55
Meaningful
In increasingly competitive markets, a prime role of a brand is to communicate its
meaningfulness in a succinct and swift manner. Thus, brands communicate inherent
meanings that are not explicitly or directly expressed. Meaningfulness is a major
challenge for brands due to a variety of cross-cultural and language-related aspects
that influence the inference of meanings. Thus, when conveying meaning, brands
need to be compatible with the rules of the language, culture and symbols.
Meaningfulness allows customers to create a strong emotional and/or cognitive at-
tachment with the brand. It also conveys the brand’s relevance and usefulness to its
target market.
A summary of the features is shown in Table 4.1.
Brand features/assets
A brand is recognized by its components, or features, such as its logo, name, charac-
ters, slogans and packaging. Each of these features help a brand to distinguish itself
from its competitors. These features enable the brand to create memory traces that
are useful during brand recall and recognition. For example, a Stanford University
study found that children as young as three–five years old were able to distinguish
between non-branded and McDonald’s chicken nuggets.2 Features act as shortcuts to
ascertain the brand’s intangible and tangible elements, such as quality and value.
Brand name
Brand name is a fundamental and critical feature that leads to effective branding.
Brand name helps generate brand recognition and recall. When the need arises for a
product in a particular category, brand recognition is vital as it forms the consumers’
awareness set. For example, think of a famous cola brand. The chances are that you
either thought of Coca-Cola or Pepsi. Similarly, when thinking about a social media
platform, people may immediately recall brands such as Instagram, Snapchat,
Facebook and Twitter, among others. These names are appealing to customers and
tend to arouse interest and likeability within the target market.
Companies spend a substantial amount of resources in finding a brand name that
is easy to pronounce and distinguishable to global audiences. For instance, one of the
world’s largest manufacturers of white goods with a revenue of more than $27 bil-
lion, Haier Corporation, was founded as Qingdao Refrigerator Company. However,
as it entered global markets, to resonate with global consumers, the brand name was
changed to Haier Corporation.3 Brand names increasing carry a financial value that
is used by many firms in their financial statements. For example, the most valued
56
Table 4.1 ALARM features of a brand
Digital Sounds and

Brand features Brand name Logo Slogan Persona presence jingles Packaging
Appealing Allows brand Aids brand Evokes memory Anthropomorphizes Enhances Refreshes Allows brand
recall recognition traces and brand a brand engagement memory and recall and
associations brand recognition at the
associations point of purchase
Legitimate Allows Allows Reinforces Deters copycat Extends Additional Strengthens
protectability protectability brand legitimacy branding protectability avenue for brand trust
through brand
increased protectability
visibility
Applicable Somewhat Allows Allows Limited Allows Limited Allows
limited malleability malleability co-creation and malleability
enhances
engagement
Recognizable Increases Increases Allows extra Enhances brand Adds further Allows extra Provides relevant
brand brand identification knowledge layers of brand identification information
recognition recognition connection and
and recall and recall knowledge
Meaningful Allows recall Can explain Evokes brand Allows increased Stretches Evokes brand Helps brands
of product product usage situations self-brand brand meaning usage explain product
features characteristics connection in a variety of situations features
contexts
Brand features 57
brand name in the world according to Interbrand is Apple, which was valued at
more than $400 billion in 2022.4
With this type of valuation attached to brand names, many brands spend a sig-
nificant amount of financial and legal expense on protecting their brand name.
Apple’s brand name protection troubles in China
In the year 2002, Apple filed for a trademark bid for its iPhone brand in China.
However, this was not approved until the year 2013. In the meantime, in 2007, a
Chinese technology company, Xintong Tiandi, filed its application to trademark
‘IPHONE’ for its leather products, which was later approved in 2010. Xintong Tiandi
sells mostly handbags, mobile phone cases and other leather goods.
In the year 2012, Apple initiated legal proceedings against Xintong Tiandi with the
Chinese Trademark Authority. However, the authority ruled in favour of the Chinese
manufacturer. Apple then sued the Chinese firm in the lower Beijing court and later
on to the higher court after losing its appeal. The higher court also ruled in favour of
Xintong Tiandi.
As iPhones went on sale in China in the year 2009, the high court ruling stated that
Apple could not establish that its brand iPhone was familiar among Chinese
consumers in 2007 when Xintong Tiandi filed its trademark application.
SOURCES www.bbc.co.uk/news/business-36200481; www.reuters.com/article/us-apple-china-
idUSKCN0XV0YH; image courtesy: www.billboard.com/pro/apple-loses-iphone-trademark-case-china/
A brand name can convey meaningfulness. It allows customers to recall what the brand
stands for and its functions. These meanings can be associated with utilitarian, hedonic
and innovative aspects of a brand. For instance, customers may not know what
Minnesota Mining and Manufacturing Company does, however, when they encounter
3M branded products while shopping (Post-it notes and many other household and
industrial products), it reminds them of the innovative nature of the company.
Another example is that of yoghurts, which may be regular purchases for many
people. When thinking of yogurt brands such as Activia and Benecol, people are re-
minded of the gut health benefits associated with this yogurt product category and
the brand simultaneously. Research shows that brand name can also allow people to
make quality inferences.5 Many retail brand names including Walmart, Target, Tesco,
Carrefour and Marks and Spencer carry particular quality- and price-associated
meanings.
58 Brand Management
Logo
A logo is a fundamental aspect of a brand’s visual identity. A logo consists of text
and/or symbols that communicate a business’s core values and are a vital tool for
brand recognition. A good logo should be distinctive, appropriate, practical, graphic
and simple in form. A logo is a dynamic rather than static element for many brands.
It evolves and reforms depending on how the organization transforms itself on its
journey. Nike is a good example of this. The Nike logo wasn’t always the swoosh as
we know in current times. The company was founded in 1964 as ‘Blue Ribbon
Sports’ and the logo was a set of interlacing letters (BRS) with the name of the brand
underneath. However, as Nike became more popular among customers worldwide,
in 1971 a graphic design student named Carolyn Davidson helped the brand create
the swoosh logo with Nike written over it in lower-case font. Over the years, the
Nike logo has also changed with the brand name in upper-case font, from black and
white to red and white and recently the dropping of the brand name altogether with
just the swoosh on most Nike products. It shows the prominence that the swoosh
logo has acquired over time as it is now recognizable even without the brand name.
Sometimes brands have to change their logos for cultural, language or historical
reasons. For instance, Starbucks sued a San Francisco-based cartoonist for creating
a parody of its logo in 1998. Similarly, in the year 2000, it went to court seeking an
injunction against a Japanese coffee chain company that had a similar logo. However,
the company itself decided to change its logo when entering the Kingdom of Saudi
Arabia by removing the mermaid from the logo and only keeping the crown.6 The
decision was taken to accommodate the cultural sensitivities, local religious beliefs,
social norms and laws.
Sometimes, due to historical associations, brands continue to use a different name
or logo for the same product in different countries. However, effective brands aim to
create consistency in logo design through colours, style and formats. For instance,
Walkers, a well-known brand of potato crisps in the UK, is known as Lay’s in most
of Europe and the US as well as in India. However, in Australia it is labelled Smith’s.
A consistent feature across these different brand names is the font style and the yel-
low/red background. Thus, the brand keeps certain aspects of the logo static while
remaining dynamic in other areas.
While brands can evolve and adapt over time and to align with various cultures,
logos can also allow brands to traverse the boundaries of culture and language alto-
gether. Logos are a major vehicle for brands to express their meaningfulness. With
the incorporation of image and other symbolic elements, logos can allow brands to
traverse the boundaries of culture and language. For instance, the arrow at the bot-
tom of Amazon logo seems like a smiley face, but it is more than that. The arrow is
pointed from the letter A to the letter Z with an aim to represent the fact that
Amazon offers a huge variety of products. Moreover, the smiley face depicts Amazon’s
Brand features 59
relentless focus on customer satisfaction. Similarly, Fanta’s logo uses the orange fruit
in the background. Orange as a fruit is associated with freshness around the world.
Moreover, it also conveys the taste of Fanta. In addition, the colour orange is consid-
ered energetic and is represents excitement and enthusiasm, which again allows em-
phasis of Fanta’s association with youthfulness.
Why logos are going simple
In recent years, some brands have simplified their logos by removing or adapting
design elements such as name (e.g. Mastercard, Uber, etc.), colours (i.e. Apple,
Instagram), shades (e.g. Google), depth (e.g. Dell) and fonts (e.g. Burberry, Chanel).
The minimalistic trend in brand logo design is driven by three important aspects.
Firstly, simple logos are more memorable and fewer elements in a logo have
implications for easier recognition and recall.
Secondly, digital transformation is playing a big role in logo design. Most people
now spend a substantial amount of time on their digital devices and in particular on
smartphones. In the digital landscape, with multiple brands vying for customer
attention rendering complex logos in high quality can take up more bandwidth and
thus affect the speed at which the logo is delivered on the webpage. Moreover,
smaller and complex elements may not be seen and recognized easily in the
crowded landscape of mobile apps on the smartphone screen. Moving to a simple
design allows companies to work across both offline and online mediums more
effectively.
Thirdly, in the marketplace, there is a move towards developing minimalistic
design which is associated with modernity. Thus, there is normative pressure that is
driving the change towards simple logos. However, redesigning logos may not
always work in the favour as brands will need to make new memory associations
with the logo. This may require significant investment of time and resources from
both the brand as well as the customers and thus could be a risky endeavour.
Slogan
‘Have a break, have a ______!’ Most people who are familiar with the famous Nestlé
brand around the world would fill up the blank with the word KitKat. This shows
the power of slogans in creating memory traces. Slogans help brands establish their
dominance through easy memorability and brand associations. Moreover, by high-
lighting brand features, slogans allow companies to convey aspects of the product
and in turn the desire for a brand. For instance, Kentucky Fried Chicken’s (KFC)
long-standing slogan ‘It’s finger lickin’ good’, reminds consumers about the taste of
the brand’s chicken and creates desire.
60 Brand Management
Slogans help brands make legitimacy claims. BMW proclaims to be the ‘ultimate
driving machine’. Similarly, Carlsberg declares itself as ‘probably the best lager in the
world’ and Redbull ‘gives you wings’. Slogans become memorable over time and can
create such strong associations that even when a brand retires a slogan from its cam-
paigning, it can still exist within the vernacular. For instance, Nike sparingly uses its
slogan ‘Just do it!’ in its packaging and other campaigning compared to past dec-
ades. However, the slogan is strongly attached to the brand.
Sometimes slogans designed at the start of a brand’s inception to connect with a
target market can limit the brand’s expression. For example, in 2006, Dunkin’
Donuts, which is currently re-branded as Dunkin’, launched a new slogan ‘America
Runs on Dunkin’’ changing its historical slogan ‘Time to make the donuts’. The slo-
gan is specific to a market and thus may not translate well in many other markets in
which Dunkin’ is present.
Slogans help customers relate to brand usage situations. As discussed earlier,
KitKat is associated with taking a break from the routine, Nike is associated with
taking healthy actions and McDonald’s slogan ‘I’m lovin it!’ evokes action towards
having tasty fast food. Thus, slogans also allow meaning making through communi-
cating usage-related messages.
Slogans can also create a strong emotional attachment for a product or a brand.
One highly successful slogan, ‘Diamonds are forever’ from De Beers Diamond
Company, has helped the firm create emotional connections with customers globally.
However, as demonstrated in the Branding in practice box that follows, brands
should be careful when developing their slogans, as they may not be appropriate
when translated through a different linguistic and cultural lens. Thus, creating mean-
ingful yet culturally neutral slogans is important for brands.
When brand names and slogans don’t travel well culturally!
If misunderstood or mistranslated, brand names and slogans can cause substantial

harm to the brand. For instance, confectionery giant Cadbury's committed a major
blunder in its slogan by comparing a brand of chocolate to the disputed territory of
Kashmir between India and Pakistan and describing both as ‘too good to share’.
Moreover, the blunder occurred in an advertisement to promote Cadbury's
Temptations brand on India’s Independence Day. The newspaper campaign featured
a map of India showing the war-torn area of Jammu and Kashmir shaded over.
Written in bold across the shaded area was the message ‘I’m good. I’m tempting. I’m
too good to share. What am I? Cadbury’s Temptations or Kashmir?’ Cadbury’s India
Brand features 61
Limited was forced by the Indian public and media to apologize for the advert.
When Mitsubishi released the Pajero model in the 1980s it hadn’t considered that
the word Pajero is associated with negative connotations in Spanish. Therefore,
Mitsubishi had to change the name to Mitsubishi Montero in all Spanish-speaking
countries. Similarly, Ford had to change the name of its car brand Pinto for the
Brazilian market as Pinto in Brazilian Portuguese refers to small male genitalia. The
brand was re-named as Corcel which means a horse or steed.
SOURCES www.theguardian.com/media/2002/aug/20/advertising.india#:~:text=Confectionery%20
giant%20Cadbury%27s%20has%20committed,brand%20on%20India%27s%20independence%20day;
www.goodbadmarketing.com/davidfrank/famous-marketing-language-translation-blunders/
Persona
Many organizations humanize their brands by using a variety of animate and inani-
mate characters to further delineate themselves in the marketplace and build stronger
connections with their customers. For example, Ronald McDonald is a cartoonish
character developed by the McDonald’s corporation. The colourful-clothes-wearing
clown allows the brand to create an appeal to younger consumers. On the other
hand, brands such as Geico uses an animated lizard, M&M use coloured chocolate
mascots, Churchill insurance has a dog, Old Speckled Hen ale uses Henry the fox
and comparison website comparethemarket.com uses meerkats that speak in a
human voice. Moreover, some brands use photos of their founders such as Uncle
Ben’s. Using a persona allows companies to anthropomorphize their brand which
appeals to many customers.
Animals and inanimate objects that use human voices or have human-like expres-
sions have always fascinated mankind. This has been captured in a variety of mythical
tales across civilizations including the sphinx in Egypt, Narasimha in India, Minotaur
in Greek, Gonggong in China and Saqra in South America. Moreover, modern tales
such as Alice in Wonderland, Peter Rabbit, Paddington and Jungle Book have also
used anthropomorphism to weave their stories. In modern times a number of anima-
tion studios have emerged and successfully engaged audiences globally through an-
thropomorphized characters including Mickey Mouse and Angry Birds, among many
others. As customers across the world have built strong emotional identifications with
such characters, brands have often integrated them in their persona. Such efforts
allow brands to build quick reference points, emotional engagement and transfer of
meanings that are associated with these characters on the brand.
Another popular trend in utilizing brand persona can be seen in co-branding. For
instance, Mickey Mouse, a Disney character, has been used by Sugerfina, Kate Spade,
Uniqlo, Adidas and Gucci, among many others. The following Branding in practice
box shows how Angry Birds have been used by brands across the globe.
62 Brand Management
Angry Birds work for Rovio and its alliance partners!
Rovio Entertainment, a Finnish video game developer, released the Angry Birds game
in December 2009. The game was based on stylized wingless birds that were
cannoned from a slingshot over a variety of structures that held ‘bad piggies’. The
game became an instant success on mobile phones and other platforms. In order to
ride on the success of the game and its characters globally, many brands entered
into an alliance with Rovio.
The brand persona attached with Angry Birds led to a number of successful
alliances including both for-profit and not-for-profit organizations. For instance,
Burger King created toys and augmented reality experiences using Angry Birds.
Similarly, the multinational sports entertainment company Topgolf offered an
interactive golf experience involving Angry Birds. Global sports brands such as the
Chicago Bulls and English premier league club Everton have also become Angry
Birds alliance partners. Moreover, education-oriented brands such as Duo lingo and
Kahoot have also engaged with Angry Birds. UNICEF and Rovio have built an alliance
to further support adolescent education in a number of emerging markets.
Such alliances help both brands to enhance their image among customers.
Research has shown that the positive image of the brands become substantially
enhanced through the spillover of perceptions of the partnering brands on to the
alliance benefiting both partners.
SOURCES www.rovio.com/articles/category/brand-partnerships/; Singh, J (2016) The influence of CSR and
ethical self-identity in consumer evaluation of cobrands, Journal of Business Ethics, 138 (2), 311–26
Persona creates unique associations which strengthen the brand’s recognizability

among customers and at the same time deter copycat brands from taking advantage
of all the initial investment that a brand has made towards its success.
Anthropomorphizing helps create a strong and multidimensional meaning that

provides a substantial protective layer for the brand. Success of such anthropomor-
phizing may attract other brands to copy the original brand persona. However, the
multidimensional meaning that is created due to brand persona allows customers to
distinguish between the original and the copycat brand. Thus, brand persona offers
protection against such practices.
Digital presence
Historically, marketing and branding were communicated mostly through printed
press, TV and other outdoor media outlets. However, the commercialization of the
Brand features 63
internet transformed this landscape. Today, it is unusual for a brand to not have
digital presence in some form. The need for digital presence became particularly
acute post-March 2020 when the Covid-19 pandemic hit globally. With physical
stores being shut down, digital presence became vital for brand survival. Digital
presence can take many forms including websites, blogs, social media interactions,
image- and video-based engagement as well as livestreaming and metaverse.
The advent of digital marketplaces has led to novel forms of businesses including
digital-only and sharing economy brands. For instance, global fashion brands such
as Asos, banks such as Starling and Monzo, B2B brands such as Alibaba and eBay,
and multi-brand stores such as jd.com and Wayfair have successfully emerged as
purely digital players. The digital marketplace has also spawned another novel busi-
ness model known as the ‘sharing economy’ wherein assets and services are shared
between private parties online, either free or for a fee. Global giants such as Uber,
Airbnb, Ola, Facebook Marketplace and Fiverr became globally successful and rec-
ognized brands through the sharing economy.
Digital presence is key for today’s brands and more importantly it plays a pivotal
role in creating appeal to wider audiences and enhancement of engagement. For ex-
ample, Gymshark, a UK-based fitness apparel and accessories brand, started in 2012
and was valued at more than £1 billion in 2020. The brand started selling bodybuild-
ing supplements and its own fitness apparel through its website in 2013 with about
£500 per day worth of sales. However, by 2016, the brand was using all forms of
digital presence including social media campaigns, its website and other means of
digital customer engagement. In 2016, Gymshark was named the fastest growing
company in the UK by the Sunday Times.7
Retail reversal: digital-only brands going physical
The popularity and success of many of these digital-only brands has allowed them to
build their presence in brick-and-mortar markets as well, reversing the trend of
physical stores moving into digital space. For instance, Amazon has created its
Amazon Go stores where it utilizes advanced digital technologies to offer an
immersive and engaging retail experience for its customers.
Away is an American luggage and travel accessories retailer based in New York
that started its operations in 2015 as an online-only retailer. The company improved
upon traditional suitcase designs by adding features such as built-in batteries in
their luggage for charging mobile devices. It found a sweet spot between super-
premium and inexpensive luggage. Away benefited a lot from its digital presence
wherein customers and social media influencers used the brand to co-create their
travel experiences using the brand’s colourful suitcases. Its products have become
64 Brand Management
highly popular among international travellers and while continuing to strengthen its
online presence, Away decided to launch their first physical store in 2016. Since
then, the brand has launched several other stores in large cities across the world
including London, Boston, Toronto, Chicago, Dallas and San Francisco. The brand
has also partnered with large retail organizations such as Nordstorm to create
pop-up stores that aids brand visibility and recognition.
Many other brands such as Casper (mattresses), Allbirds (sustainable shoes and
clothing), Knix (undergarments) and Billie (Razor and other grooming products for
women) have also moved into building physical retail presence.
This retail reversal from digital to physical also shows the need for brands to
embrace an omnichannel presence. At the same time, it also allows digital-only
brands to compete head-on against other physical retail brands.
SOURCES www.shopify.com/uk/retail/dtc-to-brick-and-mortar; https://econsultancy.com/how-away-
luggage-built-travel-brand-through-storytelling/;www.awaytravel.com/stores
Digital presence is a boon, particularly for small brands. Apart from connecting
with customers globally, digital presence can help brands increase their visibility and
recognition to a wider society. This can increase market penetration and at the same
time help the brand compete and protect itself from copycats. Digital presence is
comparatively less resource-intensive and thus allows brands to represent themselves
in a meaningful manner and gain a foothold in the market. It also helps such brands
establish a revenue stream that in turn can aid further expansion.
Similarly, for large and established brands, digital presence acts as a mechanism
for brand recall and self-brand connection. Moreover, it allows multiway communi-
cation between the brand and the customer, customer and customer and customer
and brand. Today, many large retail brands across different categories, including
grocery, fashion, homeware, and food and beverages, have built a strong digital pres-
ence to create customer engagement. Some of these brands also sell their products
directly to their customers as well as via other online retailers. For instance, Argos, a
multi-brand catalogue retailer of home furnishings and electronics in the UK, contin-
ues to offer an omnichannel experience to its customers. It has also partnered with
its parent company Sainsbury’s, a grocery retailer, to deliver products bought at
Argos online in Sainsbury’s stores. On the other hand, brands such as Coke and
Pepsi have built digital presence predominantly to create excitement, connection and
engagement to encourage repeat buying.
Sounds and jingles

Sound is one of the key senses through which human beings perceive stimuli. Sounds
can startle, shock, soothe and please us and in turn attract our attention through
Brand features 65
auditory reflexes. Sounds can thus create both affective and cognitive triggers. Brands
have used sounds to attract attention and create strong association beyond the visual
stimuli such as logo, brand name and persona. Marketers historically have relied on
visual elements more than appealing to other senses.8
Sonic branding, the idea of using sound-based communication, has become popu-
lar over time as part of sensory marketing.
Visual cues may remain one of the key elements of connecting with customers.
Sonic branding can also prove a potent tool to refresh customer memories, create
brand salience, foster unaided recall, and generate distinctive cognitive and affective
responses. For instance, brands such as the BBC and Intel have used sonic branding
to create appropriate associations that appeal and remind people globally about
these brands when they hear the tunes without seeing the brand. Many other brands
such as Netflix, Colgate and Tic Tac have used just pure sounds to build a unique
brand identity.
Some brands have extended sonic branding further by developing a jingle beyond
just the sound profile. For instance, McDonald’s worked with pop star Justin
Timberlake to create the jingle for ‘I’m Lovin’ It’ which was launched globally in
2003, and continues to be the sonic profile for the brand globally. Similarly, the
Green Giant jingle, ‘Ho, ho, ho, Green Giant’ has been used by the firm since the
1960s, giving the brand a strong unaided recall score.
As seen in Table 4.2, sonic branding can create a number of affective and cogni-
tive responses.
Table 4.2 Top 10 sonic brands in the USA
Unaided recall
Brand (48 hours) Emotions identified by customers
Liberty Mutual 96% Familiar, happy, unique, authentic

State Farm 96% Familiar, likeable, trustworthy, authentic
Farmer’s Insurance 95% Familiar, unique, likeable, authentic
Nationwide 92% Familiar, likeable, unique, trustworthy
Little Caesars 93% Familiar, unique, authentic, likeable
Intel 93% Familiar, likeable, unique, authentic
Arby’s 90% Familiar, unique, authentic, likeable
T-Mobile 91% Familiar, happy, unique, likeable
Safelite 90% Familiar, likeable unique, authentic
O’Reilly Auto Parts 90% Familiar, happy, unique, authentic
SOURCE Veritonic audio logo index 20209
66 Brand Management
Sonic branding not only creates familiarity but also provides enduring brand power
that induces positive emotions such as happiness, likeability, uniqueness and authen-
ticity from people. Moreover, it also adds a further layer of protection for a brand
that is hard to copy. Many visual elements including the logos and the design aspects
are copied world over. For instance, a Chinese retail chain, Chrisdien Deny, with
more than 500 stores across China, has its name, logo and fonts and other visual
elements very similar to Christian Dior.10 Many other brands also copy other visual
elements, such as the casual wear brand Clio Coddle which has a green crocodile
logo reminiscent of Lacoste.11 Across many emerging markets, sneakers are embla-
zoned with Adidos, Hike, Cnoverse and Fuma – featuring a smoking puma – and
there are SQNY and PenesamiG batteries and Johnnie Worker Red and Black Labial
whisky.12 While these visual elements can easily be copied, sonic branding elements
are hard to copy because of their inherent audio signals and thus can be copy-
righted.13
Sonic branding can also allow consumers to take action as sounds and jingles can
involve action orientation. For instance, the British price comparison portal Go
Compare uses its jingle to ask people to go to the website to view a variety of price
comparisons. Similarly, KitKat’s famous jingle ‘Gimme a Break’ encourages consum-
ers towards an action, that is, having a break and eating a KitKat. Jingles and sounds
can thus evoke brand usage situations in consumer minds and increase engagement.
Packaging
Packaging is one of the oldest forms of communicating a brand. From a simple
brown bag to highly elaborate design, packaging is a powerful visual element that
appeals to consumer senses. For example, the packaging of a Chivas Regal whisky
bottle clearly communicates the sense of conspicuous consumption and luxury.
Similarly, perfume brands heavily rely on packaging to attract consumer attention.
Packaging is a strategic decision for brands as it is the first point of real contact
between a consumer and the brand’s product. Consumers may have seen the logo or
slogan of a brand before and may have heard the jingle. Thus, packaging has a criti-
cal role to play in appealing and communicating the brand elements to the consumer.
For example, the packaging of Cadbury’s chocolate contains the unique purple col-
our and the font style that reminds consumers of the brand elements at the point of
purchase. Similarly, Kellogg’s frequently uses the colour yellow across its cereal
brand packaging which not only attracts consumers’ attention but also helps them
build a stronger connection with the morning breakfast and sunshine which is con-
sistent with the brightness of the yellow colour. Surf, a Unilever brand, expresses its
Brand features 67
product characteristics such as fragrance through pictorial representations of flow-

ers including lavender, lily, and jasmine via its packaging.
An important function of packaging beyond communication is protecting the
product from spillage and pilferage. Moreover, appropriate packaging can also help
a brand become more sustainable. For instance, Amazon has invested a substantial
amount of resources in developing frustration-free packaging that aims to reduce
waste, offers protective design, increases recyclable material usage and is easy to
open. By the end of 2021, Amazon claims to have more than 2 million products that
qualify for frustration-free packaging across its platform. The company also claimed
to have avoided over 30,000 tons of plastic across North America in 2021 through
its packaging innovations.14 Most supermarket brands, such as Walmart, Tesco,
Waitrose and Sainsbury’s, have moved away from single-use plastic bags to ‘bags for
life’ and are now currently promoting plastic-free wrappings and packaging. Good
packaging allows consumers to handle the product content in an appropriate man-
ner and avoid damage. Thus, packaging, in turn, increases consumer trust in the
brand, reduces carbon footprint and helps promote its sustainability credentials.
Creative packaging can arouse curiosity in consumers which can lead to a variety
of cognitive actions. Packaging can convey both originality and relevance of the
brand. Research shows that these elements of packaging can arouse curiosity and
motivation to process the information and design of the packaging, which positively
affects brand attitude and purchase intentions.15 Packaging also conveys the design
aesthetics of the brand. For instance, Apple uses a minimalist and sleek packaging
design which is consistent with its product and branding. On the other hand, many
health supplements and complementary medicines are regularly accused of excessive
product information on their packaging.16
Packaging acts as a powerful medium to convey a brand’s features. Packaging
used creatively can clearly show the product inside and communicate its functions.
For instance, frozen vegetables are packaged in plastic bags with pictures of the
product inside. Packaging can also act as a simple instruction manual in several
product categories including toys, cookware and electronics.
Scholarly debate
Escalas, J E (2004) Narrative processing: Building consumer connections to brands,

Journal of Consumer Psychology, 14 (1–2), 168–80
Keller, K L (2000) The brand report card, Harvard Business Review, 78 (1), 147–58
68 Brand Management
Creating brand appeals through a consistent

brand feature strategy (CBFS)
As discussed above, the ALARM framework allows brands to differentiate and
communicate their core message in a unique way using a variety of brand features.
However, these features do not work in isolation and a brand needs a cohesive and
consistent brand feature strategy to be successful in the marketplace. With such
integration, consistency as well as branding effectiveness is enhanced. Consistent
brand feature strategy (CBFS) requires all levels of an organization to be in sync with
the branding strategy. As described in the ALARM framework, CBFS, if used appro-
priately, will help a brand create a consistent appeal among its customers using a
combination of brand features. Moreover, due to the consistency of approach, le-
gitimacy of the brand communication will increase through enhanced consumer
trust. CBFS will also help a brand improve its recognizability because consumers will
be able to comprehend similarities in the brand features. In summary, CBFS can help
a brand increase its meaningfulness among its target consumers.
Many large brands have successfully developed CBFS. For instance, Louis Vuitton,
the world’s largest luxury brand, started in 1854 in Paris as an innovative producer
of flat-topped trunks. In 1896, the iconic LV monogram was introduced by the
company.17 Since then, the brand has consistently used the monogram and other
brand features consistently. The brand logo and name have appeared across the
range of their products. The brand has also used a variety of slogans. However, each
of them has consistently aimed to create distinctiveness through communicating the
class, quality and heritage of the brand. Slogans such as ‘Show me your luggage and
I’ll tell you who you are’ in the 1920s, to recent ones such as ‘the spirit of travel’
highlight the brand’s ethos consistently. Moreover, the brand has employed
Hollywood celebrities such as Sean Connery, Julia Roberts, Angelina Jolie, Emma
Stone, prominent sportspersons such as Muhammad Ali, Pele, Maradona, Andre
Agassi, politicians such as Mikhail Gorbachev and musicians such as Keith Richards
as ambassadors to personify the brand’s luxury message. The distinctive packaging
of the brand is recognized globally. In addition, the brand has hired top creative di-
rectors and collaborated with globally renowned artist such as Takashi Murakami to
consistently demonstrate the brand’s artistic pedigree. Further, the brand has col-
laborated with top art museums across the world to showcase its creativity and in-
novativeness and its bold experiments with brand aesthetics. Louis Vuitton has also
spent substantial resources on developing its digital presence through its website and
other digital avenues. Its website demonstrates the brand features consistently. A
consequence of such concerted efforts has made Louis Vuitton one of the world’s
leading luxury brands. For example, in the Interbrand top 100 global brands list,
Louis Vuitton has consistently remained the top luxury brand with a brand v aluation
Brand features 69
of nearly $45 billion.18 In addition, such efforts have led to substantial social media
presence for the brand. On Facebook the brand has more than 25 million followers,
and on visual social media such as Instagram the brand has more than 50 million
followers.
Chapter summary
This chapter began by identifying essential values that shape brand features through
our novel ALARM framework. The ALARM framework encapsulates five key val-
ues: Appealing, Legitimate, Applicable, Recognizable, Meaningful. Each value guides
brand feature development for effective branding. A brand can utilize several fea-
tures in combination: brand name, brand logo, slogan, persona, digital presence,
sounds and jingles, and packaging. Each of these features help a brand communicate
its core message and values. However, this has to be done consistently, as explained
in the discussion of CBFS. A consistent approach will ensure an effective brand man-
agement process for the organization.
Key concepts
●● Brand values
●● ALARM framework
❍❍ Appealing, Legitimate, Applicable, Recognizable, Meaningful
●● Brand features
❍❍ brand name, brand logo, slogan, persona, digital presence, sounds and jingles,
and packaging
●● Consistent brand feature strategy (CBFS)
Exercise questions
1 What are the essential values of a brand? Explain the ALARM framework in
detail with examples.
2 What are brand features? Explain various brand features using examples.
3 How can brand features be integrated through ALARM framework?
4 Why should brands employ a consistent brand feature strategy (CBFS)?
5 Identify a brand and apply the ALARM framework and CBFS.
70 Brand Management
CASE STUDY Marc Jacobs’ Heaven line and pop culture
Introduction
Fashion branding is a complex and dynamic process that involves creating and
communicating a distinctive identity and value proposition for a fashion product or
service. Fashion brands need to constantly adapt to the changing preferences and
expectations of their target customers, as well as the competitive and environmental
forces that shape the fashion industry. One of the challenges that fashion brands face is
how to appeal to younger generations, who have different tastes, values and behaviours
to older ones.
This case study examines Heaven by Marc Jacobs, a sub-label of the renowned
fashion brand Marc Jacobs, which was launched in the fall of 2020 as a collaboration
between Marc Jacobs and Ava Nirui, a multi-talented artist who rose to fame on
Instagram for her creative bootlegs of luxury brands. Ava played with the names of Marc
Jacobs, Dior, Chanel and Louis Vuitton to create a tongue-in-cheek take. For example, she
created a white hoodie embroidered with ‘Mark Jacobes est 1985’ which became very
popular among youths. She also created goods such as asthma inhalers, basketballs and
toothpaste tubes with tongue-in-cheek names and logos based on luxury fashion brands.
This case study explores how Heaven by Marc Jacobs uses nostalgia and pop culture
as key elements of its branding strategy, and how it resonates with Millennials and Gen
Zs, who are the main target customers of the sub-label. The case study also analyses the
strengths and weaknesses of Heaven by Marc Jacobs, and the opportunities and threats
that it faces in the fast-changing fashion industry.
Background
Marc Jacobs is one of the most influential and successful fashion designers in the world,
who has been at the forefront of fashion trends and innovations for over three decades.
He started his own label, Marc Jacobs, in the mid-1980s, and became the creative
director of Louis Vuitton in 1997, where he transformed the luxury brand into a global
fashion powerhouse. He also launched a lower-priced line, Marc by Marc Jacobs, in 2001,
which was popular among young and fashion-conscious consumers. Marc Jacobs is
known for his eclectic and rebellious style, which mixes high and low culture, vintage and
contemporary influences, and grunge and glamour aesthetics.
However, in recent years, Marc Jacobs has faced some difficulties and challenges
in maintaining its relevance and profitability in the fashion industry. The brand’s
aesthetics had become out of sync with the minimal and utilitarian trends that
dominated the 2010s, and the brand had suffered from declining sales, store closures
and lay-offs. The brand also discontinued its Marc by Marc Jacobs line in 2015, which
Brand features 71
was a major source of revenue and customer loyalty. The brand’s parent company,
LVMH, had expressed concerns about the brand’s performance and future prospects.
While LVMH did not disclose the brand’s financial performance, analysts in 2018
estimated that the LVMH-owned brand had been losing $61 million annually for some
years, registering flat revenues – a sharp drop from the estimated $1 billion in
revenue it was making in 2015.
In order to revitalize the brand and restore its profitability, Marc Jacobs appointed Eric
Marechalle as the chief executive in 2017, who joined from Kenzo, another LVMH-owned
fashion brand. Marechalle implemented a series of strategic changes, such as
streamlining the brand’s operations, reducing costs, improving quality, expanding
distribution channels, and enhancing its digital and social media presence. He also
supported Marc Jacobs’ creative vision and encouraged him to pursue new projects and
collaborations that would reinvigorate the brand’s identity and appeal. One of these
projects was Heaven by Marc Jacobs, a sub-label that Marc Jacobs and Ava Nirui
launched together in the autumn of 2020.
Heaven by Marc Jacobs
Heaven by Marc Jacobs is a playful and eclectic sub-label that draws inspiration from
Marc Jacobs’ past collections, shows and campaigns, often recreating some of his most
iconic designs. The sub-label also incorporates Nirui’s artistic sensibility and style, which
is characterized by her creative bootlegs of luxury brands, her nostalgic references to the
1990s and 2000s pop culture, and her diverse network of friends and idols. The sub-label
offers baby tees, grungy cardigans, printed mini dresses, nylon shoulder bags and
eccentric accessories that fit the aesthetic and taste of Millennials and Gen Zs, who are
the main target customers of the sub-label. The sub-label also features collaborations
with various artists and celebrities, such as Kate Moss, Nicki Minaj, Brian Molko and Gen
Z singer Beabadoobee, al of whom appear in the sub-label’s campaigns and events.
This sub-label has a nostalgic vibe that appeals to Millennials who grew up with
Marc Jacobs in its 1990s and 2000s glory days, when the brand was known for its
grunge influence and quilted “It” Stam bags. For that generation, Heaven reminds
them of Marc by Marc Jacobs, the lower-priced line that was discontinued in 2015,
and which was often their first introduction to the Marc Jacobs world. But Heaven
also attracts Gen Zs, who seem to enjoy nostalgia as much as Millennials and have a
diverse and flexible fashion sense that combines vintage references with current
trends. Heaven also benefits from the popularity and influence of the celebrities and
artists who wear and endorse the sub-label, such as Bella Hadid, Olivia Rodrigo, Dua
Lipa and Doja Cat.
The sub-label has a distinctive identity that differentiates it from Marc Jacobs’ main
line and other competitors in the market. In doing so, Heaven is a brand that celebrates
the past, embraces the present and looks forward to the future.
72 Brand Management
Analysis
Heaven by Marc Jacobs is a successful case of nostalgia and pop culture in fashion
branding, as it leverages the history and heritage of the Marc Jacobs brand, as well as
the cultural and personal references of Nirui and her collaborators, to create a unique
and appealing value proposition for younger customers. The sub-label also demonstrates
the creative synergy and mutual respect between Marc Jacobs and Nirui, who share a
similar vision and style, and who complement each other’s strengths and weaknesses.
The sub-label also benefits from the strategic support and guidance of Marechalle, who
provides the necessary resources and expertise to ensure the sub-label’s operational and
financial viability.
However, Heaven by Marc Jacobs also faces some challenges and threats that could
affect its sustainability and growth in the long term. One of the challenges is how to
maintain the sub-label’s relevance and freshness in the fast-changing and competitive
fashion industry, where trends and customer preferences can shift quickly and
unpredictably. The sub-label also needs to balance its creative freedom and
experimentation with its commercial objectives and expectations, as it needs to generate
enough sales and profits to justify its existence and investment. It also needs to manage
its relationship and alignment with the Marc Jacobs brand, as it needs to avoid
cannibalizing or diluting the brand’s main line and image, while also benefiting from the
brand’s reputation and resources.
Case questions
1 Market segments such as Gen Z have different expectations from luxury brands.
Applying the ALARM framework, identify the ways in which a brand like Heaven can
engage with Gen Z.
2 Gen Z are digital natives. How would you use digital presence brand features to
connect with this cohort of customers?
3 Beyond digital presence, how can a brand like Heaven create a consistent brand
feature strategy (CBFS) to engage with its customers?
Endnotes
1 Schmitt, B H and Simonson, A (1997) Marketing Aesthetics: The strategic management
of brands, identity, and image, Free Press, New York
2 Science Daily (2007) Old McDonald’s has a hold on kids’ taste buds, study finds, 8
August, www.sciencedaily.com/releases/2007/08/070806161214.htm (archived at
https://perma.cc/R4AY-AM6U)
Brand features 73
3 Cakici, N M and Shukla, P (2017) Country-of-origin misclassification awareness and

consumers’ behavioral intentions: Moderating roles of consumer affinity, animosity, and
product knowledge, International Marketing Review
4 https://interbrand.com/best-brands/ (archived at https://perma.cc/8LU8-47S9)
5 Rao, A R and Monroe, K B (1989) The effect of price, brand name, and store name on
buyers’ perceptions of product quality: An integrative review, Journal of Marketing
Research, 26 (3), 351–57
6 www.washingtonpost.com/archive/opinions/2002/01/26/the-saudi-sellout/71c3ca17-
277b-43e8-9a8c-9d9c9cc1e3d3/ (archived at https://perma.cc/SGZ4-JS7V)
7 www.thetimes.co.uk/article/gymshark-launched-by-ben-francis-bulks-up-69838cls9
(archived at https://perma.cc/94E3-GBE2)
8 www.marketingweek.com/ritson-brand-assets-senses/ (archived at https://perma.cc/
JZ7Y-2363)
9 www.veritonic.com/audio-logo-index (archived at https://perma.cc/N6TN-RPP2)
10 www.nytimes.com/2014/12/27/business/international/adidos-and-hotwind-in-china-
brands-evoke-foreign-names-even-if-theyre-gibberish.html (archived at https://perma.cc/
XZK5-N82P)
11 www.thedrum.com/news/2015/02/20/art-fakery-chinas-most-notable-sham-brands
(archived at https://perma.cc/XVP9-GNLA)
12 https://photogallery.indiatimes.com/celebs/celeb-themes/funny-fake-brands/johnnie-
worker-black-labial-scotch-whiskey/morphshow/47896366.cms (archived at https://
perma.cc/EG7S-CRCT)
13 Gustafsson, C (2015) Sonic branding: A consumer-oriented literature review, Journal of
Brand Management, 22 (1), 20–37
14 https://sustainability.aboutamazon.com/environment/packaging (archived at https://
perma.cc/R2LJ-4XY7)
15 Shukla, P, Singh, J and Wang, W (2022) The influence of creative packaging design on
customer motivation to process and purchase decisions, Journal of Business Research,
147, 338–47
16 www.creativebydefinition.com/supplement-packaging.html (archived at https://perma.
cc/43P3-FRUZ)
17 www.lvmh.com/group/milestones-lvmh/1593-to-the-present/ (archived at https://perma.
cc/FR8N-84PQ)
18 https://interbrand.com/best-global-brands/louis-vuitton/ (archived at https://perma.
cc/5S56-YH38)
74
Brand loyalty 05
and brand equity
Overview
In this chapter, we first introduce the concept of brand loyalty and discuss why it
remains important from a managerial perspective. We then consider the debates on
the varied approaches to brand loyalty, including behavioural and attitudinal meas-
urement and management. We also provide an overall view on the current state of
the debate. Further, we explain the concept of brand equity and provide details on
different ways of measurement. Bringing in the current business approaches to meas-
uring brand equity and brand valuation, we give illustrations of some well-known
brand valuation tools.

●● Know about the relevance and importance of brand loyalty for businesses
●● Understand the ways in which brand loyalty is measured and managed
●● Learn about the current debate on brand loyalty
●● Understand the different meanings and measurements of brand equity
●● Learn about popular brand valuation tools
Relevance and definitions of brand loyalty

Loyalty is something that consumers exhibit in their interactions with the brands.
Managers want their customers to be loyal to their brands. Loyalty is extremely
important for brands as in having loyal customers, managers can be certain that a
group of customers will continue to buy their products and services in the foreseeable
future. Thus, brand loyalty allows managers a degree of certainty about their b usiness
in competitive markets and ensures financial stability.
Brand loyalty and brand equity 75
The concept of loyalty is multifaceted. Brand loyalty could mean an emotional

and/or attitudinal connection with the brand. It could also manifest in a customer
buying the brand repeatedly over a period by showing behavioural loyalty.
Brand Keys Loyalty Engagement Index shows relevance of brand loyalty
Brand Keys, a brand research consultancy headquartered in the USA, has been
conducting an annual survey of North American consumers asking them about their
attitudinal preference towards thousands of brands in more than 110 categories
since 1996.
It claims to identify the category drivers that establish customer loyalty to brands
and in turn drive profits. According to the agency, the brands that come closest to
meeting or exceeding the category ideal position tend to achieve the highest level of
customer engagement and loyalty over a future 12- to 18-month period.
In its latest report, new brand leaders, returning brand leaders and brands that
owned the loyalty of customers for a long period of time were identified (see Table 5.1).
SOURCES https://brandkeys.com/customer-loyalty-engagement-index/; https://thecustomer.net/
brand-keys-customer-loyalty-engagement-index-finds-seismic-changes-in-loyalty-rankings/
Table 5.1 Brand loyalty leaders
Brands that own

New brand loyalty Returning brand loyalty loyalty for more than a
leaders leaders decade
Corona Extra McDonald’s Discover Card (26 years

Disney+ Uber running)
Enterprise Rent-A-Car The NFL Google (23 years)
Aquafina Chase Domino’s (19 years)
Traders Joe’s L’Oréal Dunkin’ (17 years)
Booking.com Apple (headphones) Konica Minolta (16 years)
Oscar Meyer Chipotle Hyundai (14 years)
Epsom Dick’s Sporting Goods AT&T Wireless (14 years)
Levi Strauss CVS Amazon.com (12 years)
H&R Block Samsung (smartphones) Home Depot (11 years)
LEGO Colgate
Dannon
Don Julio Tequila
Drury Hotels
76 Brand Management
The concept of loyalty is grounded in the notion of ‘faithful adherence’, as per the
meaning given by Oxford English Dictionary. Such adherence is multifaceted by its
concept, as it could reflect adherence towards a person, a product, a service or an
ideology, amongst others. As discussed in Chapter 2, however, all the above can be
branded: David Beckham is a person as well as a brand, Tesla is an automobile com-
pany and a brand, and Google is search service provider and a brand.
Scholars have debated and often skirted around the expressions ‘customer loyalty’
versus ‘brand loyalty’. Loyalty is seen as inherent to people who express their loyalty
to a brand. On the other hand, loyalty is also driven by brands. Loyalty-related terms
such as commitment, recommendation, share and retention are applicable to both
customers and brands. Therefore, customer loyalty and brand loyalty are inextrica-
bly linked terms and can be used interchangeably.
Scholarly beginnings
As discussed in earlier chapters, scholars began to conceptualize and define a variety
of branding constructs, including brand loyalty, in the 1970s. Scholars and practi-
tioners including Jacob Jacoby, Jagdish Sheth, C Whan Park and David Kyner led the
debate on conceptualizing brand loyalty. For example, Jacoby defined loyalty as a
non-random behavioural response, expressed over time, by some decision-making
unit, with respect to one or more alternative brands, which is a function of psycho-
logical processes (decision-making, evaluation).1 This definition puts forth the faith-
ful adherence to a particular brand among competing brands by an individual or a
household (decision-making unit) over a period of time. Further to that, scholars
also defined brand loyalty as a positively biased response that captures a emotive,
evaluative and behavioural response.2 The debate on brand loyalty further devel-
oped as scholars started identifying its varying components. For instance, Richard
Oliver argued that loyalty involves four facets including cognitive (loyalty to objec-
tive information), affective (loyalty based on liking or preference), conative (loyalty
through intentions and behaviours) and action (effortful search and purchase of the
brand and avoiding all alternatives).3
These conceptualizations and definitions show the complex and multifaceted na-
ture of brand loyalty. This has led to researchers questioning the constructs and its
relevance. For instance, if a consumer buys a product repeatedly without any attitu-
dinal or emotional connection, is it loyalty? Alternatively, if an individual shows a
strong preference and liking toward a brand but is not going to be able to buy it for
the foreseeable future, is it loyalty as well? Scholars argue that not all loyal brand
relationships are alike in strength or in character4 and thus there exists a confusion
regarding the nature and relevance of brand loyalty. In the following section, we
discuss the different approaches that capture the various facets of brand loyalty.
Different approaches to brand loyalty

Brand loyalty can manifest itself in three distinct forms, namely share, retention
and recommendation. For example, consumers demonstrate loyalty by consistently
buying one brand above all other competitors and thus give a high market share to
their desired brand. Consumers could also buy that brand for a considerable pe-
riod showing brand retention. Moreover, consumers may become advocates of the
brand by recommending it to other potential customers. While the first two forms
of loyalty show a behavioural inclination, the latter shows an attitudinal prefer-
ence. In addition to the above, brand loyalty is also category-dependent. For in-
stance, fast-moving consumer goods (FMCG) such as soap, shampoo, etc. are
bought regularly and so it is comparatively easy to observe both behavioural and
attitudinal loyalty. However, loyalty is difficult to capture for shopping or s peciality
products such as TVs, computers, cars, luxury goods. Thus, scholars and practi-
tioners use different facets of brand loyalty to understand and capture its multifac-
eted nature. In the following section, we capture the behavioural and attitudinal
approaches of brand loyalty.
Behavioural approach
The behavioural approach of loyalty is predominantly focused on measuring loyalty
through well-established measures such as repeat-buying, market share, market pen-
etration, average purchase frequency and share of category requirements. These
measures are recorded by third-party companies such as IRI, Kantar Group, GfK
and Nielsen using large scanner panels. These consumer panels record the purchases
of many hundreds or thousands of individual or households on a continuous basis
over several years. Such large-scale panels provide brand, category and socio-demo-
graphic-based insights to companies about the actual purchases of their brands by
the consumers in the dataset. Brands benefit from such insights by evaluating their
market competitiveness across many different brands within a category across vari-
ous types of markets. In doing so, brands can identify the levels of loyalty using the
well-established loyalty measures stated above. Brands can also get relevant con-
sumer purchase data from large-scale retailers. For instance, retailers such as Tesco,
Wal-Mart and Sainsbury’s share a variety of data about their customers’ purchase
patterns through proprietary platforms. However, such retailer data, while being
vast, contains the purchase patterns from their own loyalty programmes. Consumers
who belong to such loyalty programmes tend to purchase from specific stores more
often to attain greater loyalty rewards. Thus, single-retailer-based panel data creates
a skewed picture of customer loyalty and market competitiveness.
78 Brand Management
The behavioural approach to loyalty has provided substantial insights into under-
standing how people buy different brands across categories. One of the major in-
sights of the behavioural approach is that many markets are near-stationary, wherein
the market share of brands does not change much. Sometimes, over a longer period
there may be some changes in consumption behaviour which could lead to a change
in the market. For instance, lager drinking increased in the UK throughout the 1980s
with a corresponding decline in the consumption of bitter beer. Such changes in con-
sumption behaviour are rather rare as consumers tend to buy from a repertoire of
brands within a category driven largely by habit.
A similar change occurred in the early 2000s when Australian wine makers mar-
keted their brands in the UK market based on the types of grapes and usage occa-
sion. Wine was previously marketed based on the concept of terroir, which refers to
the unique combination of natural factors associated with any particular vineyard,
such as quality, product complexity or vineyard prestige, highlighted by French win-
eries. Thus, wine was largely associated with regions such as Champagne, Bordeaux,
Brittany and Savoy. The Australian strategy of marketing their brands based on the
types of grapes and usage occasion simplified the consumers’ choice as it did not
require the complexities associated with guessing wine qualities based on terroir.
Such simplification in choice allowed young consumers in particular to easily under-
stand and adopt wines from Australia, replacing lager beer as their first choice of
alcoholic drink in many situations. As noted earlier, though, such category level con-
sumption shifts do not happen often. Markets are largely stationary at brand and
category level, as observed in most large-scale empirical studies.5 6
Brand performance measures used for understanding behavioural
loyalty
Companies use a variety of brand performance measures to understand and capture

behavioural loyalty. Some of the regularly used measures and their definitions are
provided here.
Market share: denotes the percentage of total category sales the brand
accounts for.
Total purchases of the brand

Market share =
Total purchases of the category
Market penetration: the proportion of the population who buy the item at least once
in a given time-period.
The number buying the brand at least once
Penetration =
The total number of potential customers
Average purchase frequency: the average number of purchases made by

households who buy at all in a given period.
100% loyal buyers: buy only one single brand of that product category throughout the
time period of analysis.
Share of category requirements: measures each brand’s market share among the
group of householders that bought the brand at least once during the time period
under consideration.
Duplication of purchase: the number of purchasers of a brand who also purchase
another brand in the same period (i.e. buyers of brand X also buying brand Y).
Based on the above measures there are several brand-level buying patterns
established in scholarly research. See the Branding in practice box in Chapter 3 on
page 40.
Attitude-based approach
While the behavioural approach to brand loyalty emerged from large-scale panel
data, the attitude-based approach is grounded in capturing consumer preference and
attitudes through a variety of techniques including focus groups, surveys and ex-
periments. Another fundamental difference between behavioural and attitudinal ap-
proaches to brand loyalty is their measurement itself. Behavioural loyalty is captured
through actual behavioural data, while attitudinal loyalty is measured through
self-reported measures that may or may not result in actual behaviour. For brand
managers, behavioural measures give a more accurate portrayal of the competitive
structure of the market as compared to attitudinal measures. However, behavioural
purchase data is more expensive and scarcer in certain markets or categories. This
creates accessibility constraints for smaller and medium-sized brands. Hence, many
such small and medium-sized brands rely on attitudinal measures of brand loyalty to
understand their customers.
The attitude-based approach to brand loyalty has developed substantially over
the past six decades within the field of marketing. Early proponents of the approach
argued that for true brand loyalty to exist, strong attitudinal commitment from the
customer was a fundamental condition.7 Attitudinal loyalty is seen as a consistently
80 Brand Management
favourable set of beliefs toward the purchased brand.8 Researchers have measured
attitudinal loyalty through a variety of questions based on preference, purchase
likelihood, recommendation likelihood, affective commitment, repeat purchase like-
lihood, positive beliefs and feelings – relative to competing brands.9 The attitude-
based approach has led to the development of unique branding constructs, including
self-brand connection,10 brand commitment,11 brand trust12 and brand love.13 By
comparing the strength of these attitudes toward the brand against the competitors,
researchers and managers can predict purchase and repeat patronage toward the
brand.
Synthesizing the brand loyalty debate

While scholars continue to debate about the relevance and applications of behav-
ioural and/or attitudinal approaches to brand loyalty, both have significant merits
and weaknesses. For instance, the behavioural approach provides insights on cus-
tomers’ actual purchasing behaviour and loyalty towards brands. It does not, how-
ever, offer information about the psychology behind the brand choice. For instance,
why a brand was preferred over its competitors. On the other hand, the attitudinal
approach highlights the psychology of brand choice and brand loyalty. This ap-
proach, however, mostly captures customer intentions and attitudes that may not
result in actual behaviour, for example purchase.
While theorizing the construct of brand loyalty, many scholars have reflected on
the intertwined nature of attitudinal and behavioural approaches.14 In fact, brand
loyalty in real life reflects both attitudinal and behavioural components. If there is no
liking or commitment towards the brand, and the customer still keeps on buying it
regularly, it may be because of habit or unavailability of competing brands. Similarly,
a customer may have strong feelings towards the brand and follow all relevant media
information, but may not have the means to purchase the brand. Either of the above
cases can reflect brand loyalty. The former is an example of habitual loyalty while
the latter depicts positive attitudes which may not result in purchase. Thus, by com-
prehending both attitudinal and behavioural aspects of brand loyalty, managers can
make better decisions about their brands.
Usefulness of loyalty programmes: fact versus fiction
It is believed that an average North American household is part of more than 30 loyalty
programmes.15 The loyalty management market was valued more than $21 billion and is
expected to be greater than $71 billion by 2026.16 The usefulness of loyalty programmes,
however, is debatable.
The importance of brand loyalty and the surrounding debate has led many
companies to introduce a variety of loyalty programmes. For instance, one of the
largest retailers in the UK, Tesco, launched its loyalty programme ‘Clubcard’ in 1995.
Similarly, most airlines and their alliance partners run their own loyalty programmes
relating to air miles accrued. Many managers assume that loyalty programmes lead
to substantial rewards for the organization as loyal customers are less costly to
serve and spend more than other customers and they also act as brand advocates
spreading positive word-of-mouth for the company.17 However, substantial academic
research relating to loyalty programmes has established that in most cases loyalty
programmes do not enhance either attitudinal or behavioural loyalty.18
A loyalty programme is built with a notion that upfront expenditure in creating
loyal customers will result in much greater future returns. Contrarily, research shows
that many of the loyalty programmes produce substantial liabilities for the firm.19
Evidence clearly shows that heavy buyers continue to buy more, irrespective of
being part of a loyalty programme or not. Moreover, as loyalty programme members,
they claim extra rewards, but do not change their purchase behaviour.20 The
overwhelming evidence thus suggests that loyalty programmes largely benefit
customers but not the brand in most cases.21 Thus, loyalty programmes remain
largely organization-driven initiatives with little impact on brand loyalty among their
customers.
The debate on the usefulness of loyalty programme is summed up nicely in this
quote from a manager representing the Millennium Hotel Group, ‘Honestly, I don’t
know what, if anything, it actually does for me.’22
What is brand equity?

Brand equity is a frequently used term in the field of branding. Businesses and
scholars have offered varying interpretations of the concept. The concept became
popular in the 1990s with scholars such as David Aaker and Kevin Lane Keller
leading the debate. Brand is by nature intangible and thus identifying the equity
of a brand has always been challenging. This is further compounded by defini-
tional challenges arising due to a lack of agreement on the nature, constituents
and outcomes relating to brand equity. Some scholars and marketers have at-
tempted to examine brand equity through the lenses of economics and finance.
Their aim remains to attach a financial value to a brand which can demonstrate
the profit potential of the brand in the market. This finance-driven approach has
82 Brand Management
led companies to identify and promote the value of their brand, reflected in the
balance sheet as ‘goodwill’, when acquiring a firm.
The other approach to brand equity is based on customers’ perceptions and atti-
tudes towards the brand. Grounded mainly in psychology and sociology, this ap-
proach aims to capture how customers prefer one brand over the other through their
image perceptions, symbolism and behavioural intentions. Kevin Lane Keller con-
ceptualized brand equity through this approach and developed a framework named
‘customer-based brand equity’.23 Customer-based brand equity (CBBE) is defined as
the differential effect of brand knowledge on consumer response to the marketing of
the brand. This framework examines customers’ brand knowledge through the sub-
components of brand awareness and brand image. Brand awareness is measured by
asking customers about their brand recall and recognition. Brand image is measured
through favourability, strength and uniqueness of brand associations, and types of
brand associations that are captured in brand-related attributes, benefits and atti-
tudes. Brand attributes take into account a variety of marketing mix aspects such as
price, packaging and user imagery. Brand benefits reflect the functional, experiential
and symbolic aspects associated with the brand.
Brand strength vs brand size debate

Managers can use the CBBE framework to ascertain their brand’s health in a com-
petitive marketplace and also to identify their customers’ views about competing
brands. Focusing on this attitudinal-approach-driven CBBE framework, companies
can discover the strength of their brand’s association in customer minds compared
to their competitors. In this regard, companies can also identify the strengths and
weaknesses of their brand on a variety of CBBE components as well as overall mar-
ket position of their brand. For instance, a brand could have higher awareness (i.e.
recall and recognition) but may not have a strong brand image. Such a brand can
then focus on building better brand image by communicating the uniqueness of its
associations and attributes.
Strength of CBBE does not mean that a strong brand will be a market leader.
There is no clear evidence that the strength of CBBE and the size of the brand are
correlated.24 A brand with a strong CBBE may have a small market share. For in-
stance, Ferrari is a highly recognized automobile brand, but its market share within
the overall automobile sector is small. Compared to Ferrari, Ford may not have the
same strength of CBBE but has a much larger market share. Moreover, the strength
of CBBE does not relate to future success in terms of market share either.25 Brands
such as Kodak, Polaroid and Nokia which were some of the largest players in their
sectors for a number of years and still evoke a significant degree of CBBE, are how-
ever brands that have failed in consumer markets.
Measuring brand equity

With the variations in conceptualizing brand equity, researchers and practitioners
have attempted to measure brand equity in a variety of ways. Several important
considerations have been taken into account by researchers in regard to measuring
brand equity including perceptual measures such as perceived quality, brand loyalty
and brand awareness/associations.26 27 Researchers have also identified several be-
havioural measures such as buying frequency, market penetration, share of category
requirements, level of loyalty among buyers and market share to estimate behav-
ioural loyalty as a proxy for brand equity.28
While academic research on measuring brand equity has included attitudinal and
behavioural aspects, a number of practitioner frameworks have also gained promi-
nence. Noteworthy among them are Interbrand’s Brand Valuation (see Table 5.2),
Brand Asset Valuator by VMLY&R and BrandZ from Kantar. Each of these brand
equity frameworks utilize a different methodology.
Interbrand’s Brand Valuation includes three variables, namely financial forecast,
role of brand and brand strength.29 Financial forecast measures the overall financial
return or after-tax operating profit. Role of brand measures the purchase decision
attribution specifically assigned to the brand devoid of other factors such as price,
convenience or product features. Brand strength measures 10 factors based on inter-
nal and external dimensions that determine the brand’s ability to generate loyalty
and resultant demand and profit in the future compared to other industry players.
Developed in conjunction with academic partners from a number of universities,
Brand Asset Valuator by VMLY&R captures brand equity through brand strength
and brand stature.30 Brand strength is measured based on the future growth poten-
tial of a brand through two sub-dimensions, differentiation and relevance. Similarly,
brand stature, or the current operating value of a brand, is measured through esteem
and knowledge sub-dimensions. Differentiation reflects a brand’s ability to capture
attention in the cultural landscape and is identified as a powerful driver of curiosity,
advocacy and pricing power. Relevance, on the other hand, relates to the appropri-
ateness and meaningfulness of the brand to consumers, which, in turn, drives brand
consideration and trial. Esteem depicts how highly regarded a brand is and how well
it delivers on its promises, leading to trial and commitment. Finally, knowledge sub-
dimension captures the depth of understanding people have of a brand – both its
positive and negative information.
Similarly, the BrandZ framework by Kantar utilizes a methodology combining a
financial matrix with perceptual attributes of the brands.31 The framework aims to
identify brand-related attribution by capturing financial information from annual
reports and other sources such as Kantar Worldpanel and Kantar Retail IQ data.
This data is coupled with perceptual matrices on brand power that is captured
through the meaningfulness, differentiation and salience of a brand in consumer
84 Brand Management
Table 5.2 Interbrand’s top 10 best global brands 2022
Brand value Change since

Ranking Brand name (in mn $) last year
1 Apple 482,215 +18%

2 Microsoft 278,288 +32%
3 Amazon 274,819 +10%
4 Google 251,751 +28%
5 Samsung 87,689 +17%
6 Toyota 59,757 +10%
7 Coca-Cola 57,535 0%
8 Mercedes-Benz 56,103 +10%
9 Disney 50,325 +14%
10 Nike 50,289 +18%
SOURCE https://interbrand.com/best-global-brands/
minds. Using predictive algorithms based on the combination of financial and per-
ceptual data, future value is assigned to the brand.
As is evident from the industry-based brand equity frameworks, a combination of
financial, attitudinal and behavioural measures is utilized to measure brand equity.
These frameworks, which are proprietary to their respective firms, lead to annual
brand reports or rankings such as the BrandZ top 100 Most Valuable Global Brands
or Interbrand’s Best Global Brands.
Chapter summary
This chapter focuses on two key constructs in the branding domain: brand loyalty
and brand equity. The chapter began by describing the relevance of brand loyalty and
its varying definitions leading to a critical debate on the nature of brand loyalty.
Brand loyalty has been approached from a behavioural or attitudinal perspective:
both approaches provide unique insights into the relationship between a consumer
and a brand. We highlight the need to synthesize the two approaches. The chapter
questions the over-reliance on and the problems with the usefulness of customer loy-
alty programmes and considers how brand equity and its measurement approaches
remain contentious. Brand equity is useful for organizations in identifying the value
of the potential acquisition. The chapter also provides insights into the academic
framework of consumer-based brand equity (CBBE) as well as the behavioural
approach for measuring brand equity. Further, a detailed discussion on industry

frameworks that measure brand equity is provided.
Key concepts
●● Brand loyalty
❍❍ Behavioural brand loyalty
❍❍ Attitudinal brand loyalty
●● Brand loyalty programmes
●● Brand equity
❍❍ Brand strength and size
●● Consumer-based brand equity (CBBE)
●● Brand equity measurements
Exercise questions
1 Critically discuss the concept of brand loyalty.
2 What are the approaches to brand loyalty? How do they differ?
3 Describe brand performance measures. How can these measures help managers
understand and estimate brand loyalty?
4 What is brand equity? Why and when does it matter for an organization?
5 Explain the different ways in which brand equity has been examined in academic
research.
6 Review and critically analyse the three industry-based brand equity measurement
frameworks.
CASE STUDY
‘Data for a discount: are customer loyalty programs
ever a good deal?’
Read the article from The Guardian, which explores the use of loyalty programmes in
Australia. It looks specifically into how loyalty schemes make use of customer data,
providing information on buying habits, needs and preferences, as well as movements
(e.g. where a customer shops). The benefits of the actual loyalty scheme may not always
86 Brand Management
be obvious to the individual, and neither is what information is being collected or how.
More importantly, what is the data used for?
SOURCE www.theguardian.com/australia-news/2022/sep/20/data-for-a-discount-are-customer-loyalty-
programs-ever-a-good-deal
Case questions
1 Based on the case study and academic research evidence, reflect critically on the
usefulness of customer loyalty programmes.
2 Given the increasing restriction on data usage and privacy regulations, how should
companies manage loyalty databases?
3 Reflect critically on the future of customer loyalty programmes in the digital age.
4 Discuss how AI may impact the operationalization and management of customer
loyalty programmes.
Endnotes
1 Jacoby, J (1971) Brand loyalty: A conceptual definition, Proceedings of the Annual
Convention of the American Psychological Association, 6 (2), 655–56
2 Sheth, J N and Whan Park, C (1974) A theory of multidimensional brand loyalty, in
NA – Advances in Consumer Research, vol. 1, eds. S Ward and P Wright, Association
for Consumer Research, Ann Arbor, MI, pp 449–59
3 Oliver, R L (1999) Whence consumer loyalty?, Journal of Marketing, 63 (4_suppl), 33–44
4 Fournier, S and Yao, J L (1997) Reviving brand loyalty: A reconceptualization within
the framework of consumer-brand relationships, International Journal of Research in
Marketing, 14 (5), 451–72
5 Ehrenberg, A S, Uncles, M D and Goodhardt, G J (2004) Understanding brand perfor-
mance measures: Using Dirichlet benchmarks, Journal of Business Research, 57 (12),
1307–25
6 Sharp, B and Romaniuk, J (2016) How Brands Grow, Oxford University Press
7 Jacoby, J and Chestnut, R W (1978) Brand Loyalty: Measurement and management,
John Wiley and Sons
8 Uncles, M D, Dowling, G R and Hammond, K (2003) Customer loyalty and customer
loyalty programs, Journal of Consumer Marketing, 20 (4), 294–316
9 Dick, A S and Basu, K (1994) Customer loyalty: Toward an integrated conceptual
framework, Journal of the Academy of Marketing Science, 22, 99–113
10 Escalas, J E and Bettman, J R (2003) You are what they eat: The influence of reference
groups on consumers’ connections to brands, Journal of Consumer Psychology, 13 (3),
339–48
11 Singh, J, Shukla, P and Schlegelmilch, B B (2022) Desire, need, and obligation:
Examining commitment to luxury brands in emerging markets, International Business
Review, 31 (3), 101947
12 Chaudhuri, A and Holbrook, M B (2001) The chain of effects from brand trust and
brand affect to brand performance: The role of brand loyalty, Journal of Marketing,
65 (2), 81–93
13 Batra, R, Ahuvia, A and Bagozzi, R P (2012) Brand love, Journal of Marketing, 76 (2),
1–16
14 Dick, A S and Basu, K (1994) Customer loyalty: Toward an integrated conceptual
framework, Journal of the Academy of Marketing Science, 22, 99–113
15 Kim, J J, Steinhoff, L and Palmatier, R W (2021) An emerging theory of loyalty program
dynamics, Journal of the Academy of Marketing Science, 49, 71–95
16 Fortune Business Insights (2019) Loyalty Management Market Size, Growth: Industry
Report 2026, www.fortunebusinessinsights.com/industry-reports/loyalty-management-
market-101166 (archived at https://perma.cc/XTP4-EKDJ)
17 Reinartz, W and Kumar, V (2002) The mismanagement of customer loyalty, Harvard
Business Review, 80 (7), 86–94
18 Uncles, M D, Dowling, G R and Hammond, K (2003) Customer loyalty and customer
loyalty programs, Journal of Consumer Marketing, 20 (4), 294–316
19 Shugan, S M (2005) Brand loyalty programs: Are they shams?, Marketing Science,
24 (2), 185–93
20 Liu, Y (2007) The long-term impact of loyalty programs on consumer purchase
behavior and loyalty, Journal of Marketing, 71 (4), 19–35
21 Kim, J J, Steinhoff, L and Palmatier, R W (2021) An emerging theory of loyalty program
dynamics, Journal of the Academy of Marketing Science, 49, 71–95
22 McCall, M and Voorhees, C (2010) The drivers of loyalty program success: An organ-
izing framework and research agenda, Cornell Hospitality Quarterly, 51 (1), 35–52
23 Keller, K L (1993) Conceptualizing, measuring, and managing customer-based brand
equity, Journal of Marketing, 57 (1), 1–22
24 Goodhardt, G J (1999) Letters to the Editor: Strong and weak brands, International
Journal of Advertising, 18, 190
25 Ehrenberg, A S, Uncles, M D and Goodhardt, G J (2004) Understanding brand perfor-
mance measures: Using Dirichlet benchmarks, Journal of Business Research, 57 (12),
1307–25
26 Yoo, B and Donthu, N (2001) Developing and validating a multidimensional consumer-
based brand equity scale, Journal of Business Research, 52 (1), 1–14
27 Christodoulides, G and De Chernatony, L (2010) Consumer-based brand equity
conceptualisation and measurement: A literature review, International Journal of
Market Research, 52 (1), 43–66
28 Romaniuk, J and Nenycz-Thiel, M (2013) Behavioral brand loyalty and consumer
brand associations, Journal of Business Research, 66 (1), 67–72
29 https://interbrand.com/thinking/best-global-brands-2021-methodology/ (archived at
https://perma.cc/QXU4-GQ7F)
30 www.bavgroup.com/about-bav (archived at https://perma.cc/FSF5-K59S)
31 www.ft.com/content/051725be-bc78-11e2-9519-00144feab7de (archived at https://
perma.cc/ST54-VRQR) and www.youtube.com/watch?v=WcPakbqewp4 (archived at
https://perma.cc/F2TE-EJB5)
88
Brand positioning 06
Overview
In this chapter, we first introduce the concept of brand positioning and how it
influences marketing practice. We then include the well-known concepts of brand
association, image and symbolism. We also provide an overview of points of parity
and points of difference as effective tools for assessing brand positioning. In the
sections following, we consider practical tools of brand positioning in the form of
associative network theory and perceptual maps. The chapter ends with a discussion
on how customer segmentation bases can be employed to position the brand and
target relevant segments.

●● Understand what brand positioning is and its central role in marketing

●● Comprehend the concepts of brand association, image and symbolism
●● Understand how to use points of parity and points of difference in brand
positioning
●● Gain insights into associative network theory and perceptual maps as important
tools for determining brand positioning
●● Know how customer segmentation bases are used for positioning
What is the positioning of a brand?

Think about colour red. Now, think about a cola brand. Which brand came to mind?
When asked, most consumers tend to answer Coca-Cola. Think about the ‘best
search engine’. It is highly likely that you thought ‘Google’. The colour red for cola
or the word for best search engine is associated with a particular brand in consumer
minds. This, in its simplest form, is brand positioning.
Brand positioning is defined as the place a brand occupies in the minds of

consumers based on one or more distinctive characteristics in comparison to
competitors. The idea of positioning emerged from product management literature.
Management consultants Al Ries and Jack Trout coined the term product p ositioning
in the early 1970s. They identified product form, package size and price when
compared to competitors as a way in which a firm can differentiate its products.1
Product differentiation is about the features of a product that distinguishes it from
its competitors. Brand positioning relates to the communication of differentiating
elements of the product to consumers.
Brand positioning, over the years, has become an important element in marketing
strategy. Most successful brands have a clear positioning in consumer minds, as
highlighted in the earlier examples of Coca-Cola and Google. Similarly, Red Bull has
a clear positioning advantage as an energy drink by associating itself with extreme
sports. Brands such as Xerox and Google have achieved such strong positioning that
they have become synonymous with their respective product categories, photocopy-
ing and information search on the internet.
Brand positioning is analogous to a schema that exists in consumer minds. A
schema is a cognitive structure that represents consumers’ expectations about a
product category which is developed over time.2 A brand-positioning-related
schema takes shape based on the value ascribed to various brand attributes, and the
variability present across brands. For example, when considering cars, consumers
assign different value to attributes such as price, quality, design, safety, status, style
and performance, among many others. Volvo is associated with the safety attribute.
A consumer who assigns the highest value to safety in purchasing a car is more
likely to prefer Volvo above others. Thus, Volvo’s brand positioning on safety
features allows alignment with consumer expectations. To affirm consumer views
and expectations about the brand, Volvo’s brand communication often prominently
features the safety attribute, creating a virtuous cycle and strong brand positioning
in consumer minds.
Positioning in the dentifrice market
When thinking about toothpaste how do you differentiate between various brands?
Table 6.1 shows the positioning put forward by many global toothpaste brands.
90 Brand Management
Table 6.1 Toothpaste brand positioning
Brand Positioning
Colgate Total Fights full range of oral health problems

Close-up Whitener, great breath for kissing
Crest Powerful fluoride cavity fighter
Aim Milder taste than other brands, kid-friendly
Arm & Hammer Popular baking soda mixed with toothpaste
Aquafresh Kills germs, for young adults
Biotene Reduces bacteria and germs in mouth
Oral-B High quality, dentist approved
Rembrandt Higher-quality whitening
Sensodyne Especially for sensitive teeth
Mentadent Baking soda and peroxide for fresh breath
While brands aim to position their products using a variety of positioning

statements, it is well-known that most consumers hardly differentiate between
brands in most categories. This is particularly true for low-involvement
products. One of the reasons for such reduced differentiation is the
development of sub-brands and market proliferation where many of these
positions overlap.3 For instance, Colgate not only has its ‘original Total
toothpaste’, but currently has 54 variants,4 some of which are listed here:
●● Colgate cool stripe

●● Colgate white charcoal whitening toothpaste
●● Colgate max white extra care sensitive protect whitening toothpaste
●● Colgate total advanced deep clean toothpaste
●● Colgate sensitive instant relief repair and prevent
●● Colgate white sparkle diamonds whitening toothpaste
●● Colgate sensitive with sensiform toothpaste
●● Colgate max white purple reveal toothpaste
●● Colgate deep clean with baking soda toothpaste
These variants substantially overlap with the positioning of other toothpaste

brands in the market, thus, reducing the clear differentiation that brands wish
to derive.
Brand association, image and brand symbolism

In the previous chapter, we briefly discussed the importance of brand image, associa-
tions and symbolism for brand equity and loyalty. These aspects also play a critical
role in brand positioning.
Brand association
Brand associations are fundamental memory cues that help consumers remember
and recall a brand based on a variety of triggers including a brand name, logo, a nar-
rative or any other stimuli. Research has shown that brand associations are critical
in our understanding of inference making,5 categorization,6 product evaluation,7,8
persuasion9 and brand equity.10,11 Two distinct theoretical mechanisms have been
proposed in explaining how brand associations affect consumer decision making.
The first path, grounded in the Human Associative Memory (HAM) theory,12
proposes that declarative knowledge is represented as a network of concept nodes
connected by links that are strengthened each time two events co-occur. The more a
brand name co-occurs with a benefit association, either through indirect or direct
experience, the stronger the link between the brand name and the benefit association.
An alternative theory explaining the power of brand associations is adaptive net-
work theory,13 which is grounded in the classical conditioning literature.14 According
to this theory, association strengths update and evolve as cues interact, and often
compete, to predict outcomes.15 Thus, while HAM theory explains that cues are
learned independently, adaptive network theory holds that cues interact, wherein the
strength of the association between a brand name and a benefit depends on how
uniquely a brand name can be associated to a benefit and vice versa. Hence, in the
case of brand associations, the famous neuroscience expression ‘neurons that fire
together, wire together’ is relevant. The more a particular benefit association is at-
tached to a brand, the stronger the association becomes and in turn will lead to
stronger brand related memory and recall. For example, when buying electronic
products, quality is an important consideration. In this regard, Sony has built a
strong association with the word quality worldwide. Such associations can act as a
buffer against consumer backlash when the occasional quality transgression or
brand crisis occurs. For instance, Sony has been involved in many product recalls due
to product quality issues.16,17 However, it has still maintained its brand position due
to the strength of its quality association.
A popular theory in brand communication is the associative network memory
model. It describes how brands are perceived by consumers based on their memory
cues. Building on the HAM theory, it argues that the network of nodes and connect-
ing links within consumer minds regarding a brand influences brand equity. Various
92 Brand Management
nodes such as a brand name, logo and other visual or sensory signals connect with
features such as quality, price, image, etc. and these associative linkages, in turn, de-
termine brand equity. The linkages can be either positive or negative. For example, a
fast-food brand such as McDonald’s could easily be recognized because of a strong
associative network memory including the brand name, the yellow colour of the
logo, its mascot and design elements, which is connected with positive features such
as fast service and negative features such as unhealthy food.
Brand image
Brand image is another fundamental aspect of brand positioning. Brand image refers
to the perception, reputation and overall impression that a company or product
evokes in the minds of consumers and the public.18 It is a critical aspect of brand
equity,19 as it influences consumer behaviour and purchasing decisions. Brand image,
using the theory of mental representations, can be seen as consisting of two sub-
constructs, namely, brand attitude – which examines the valence reflected in the
pleasantness or unpleasantness of an emotional stimulus – and brand strength – cog-
nitive elements associated with a brand.20
Brand attitude
The brand attitude component of brand image captures the positive or negative feel-
ings about a brand and its attributes. In the previous section, we highlighted the
quality attribute of brand Sony. In addition, consumers’ attitudes towards brand
Sony can be shaped by many other attributes, such as visual aesthetics, brand com-
munications, customer experiences and interactions with the brand across different
platforms such as social media, physical retail stores and other channels. All these
attributes, either individually or in combination, lead to the accumulation of positive
or negative feelings over a period, and can contribute towards the development of
brand attitude for Sony. Brand attitude, thus, is a dynamic construct that continu-
ously evolves as a consumer gets exposed to brand-related stimuli and develops an
emotional response. A consumer may possess a strong positive attitude towards a
brand, however, if the brand behaves in a morally inappropriate way or its products
harm consumers in some way, the brand attitude can turn negative. For instance,
consumers in general held positive brand attitudes towards Volkswagen, one of the
largest manufacturers of automobiles in the world, which built a reputation around
high-quality engineering. When it was found to be faking emission test results using
either hardware or software, consumer attitudes towards the brand changed into
negative.21 Alternatively, if a brand continues to fulfil its promise consistently and
focuses on enhancing customer experience through some of the above identified
a ttributes, negative attitudes can change to positive as well. Many brands emerging
from Japan, Taiwan and South Korea which have become global names today, such
as Toyota, Mitsubishi, Asus, Acer, Samsung and Hyundai, have overcome initial
scepticism from consumers in Western countries and have successfully created posi-
tive brand attitudes.
Brand strength
The other component of brand image, brand strength, refers to the ease of retrieving
the brand name from memory, through the range of associations that a brand has
created in the consumer minds over a period.22 Brand strength, thus, builds over
time, through the number of associations, uniqueness of these associations and also
the strength of associations. Researchers in philosophy and cognitive psychology
highlighted that humans tend to create a mental image of things that are not actually
present to the senses, based on the existing associations they have through their im-
agination.23 This has substantial implications for brand strength: researchers in
branding have shown that brands with a bigger market share have a greater number
of associations in consumer minds.24 For instance, when thinking about the brand
Apple, the likely associations are user-friendly, iPhone, expensive, iTunes, iPad, in-
novation, beautiful, design, elegance, Steve Jobs, cool, stylish, among others. On the
other hand, if asked about another brand operating in electronics market, such as
ZTE or HTC, people tend not to identify as many associations as Apple and more
importantly the strength of the association is not as strong. Hence, the brand image
of these brands compared to Apple is weak. However, there are brands that have a
uniqueness in their associations in consumer minds that are difficult for others to
replicate. Google as a brand has a unique association with online information search.
This unique association and its strength make it harder for other search engines to
complete with Google in online information search.
A well-crafted brand image, which utilizes the brand attitude and brand strength,
creates a distinct and favourable identity for a brand, conveying its values, personal-
ity and unique selling propositions. Maintaining a positive and consistent brand
image is essential for building trust, fostering brand loyalty and ultimately gaining a
competitive edge in the market. As consumers often associate emotions and feelings
with brands, a strong brand image can lead to deep connections, turning customers
into brand advocates and ambassadors.
Brand symbolism
Brand symbolism refers to the use of symbols, icons and visual cues by a company to
represent its brand identity and values.25 These symbols often transcend language
94 Brand Management
barriers and become a powerful means of communication with consumers through

sound as well,26 which we discussed in Chapter 4. Brand symbolism research is
rooted in semiotics, the study of signs and symbols and their use or interpretations.
One of the most iconic examples is the bitten apple logo used by Apple, which
evolved from its original design of Newton sitting under an apple tree. The apple
symbolizes knowledge, discovery and the quest for enlightenment, aligning perfectly
with the company’s focus on innovative technology and user-friendly products. This
symbolism fosters an emotional connection with consumers, inspiring a sense of as-
piration and sophistication.27 Another notable example of brand symbolism is the
Nike ‘swoosh’ logo. The simple yet dynamic swoosh represents motion, speed and
victory. It embodies the brand’s commitment to excellence, athleticism and determi-
nation, making it a universally recognized symbol. The swoosh has become synony-
mous with Nike’s brand personality, creating a strong association between the logo
and the company’s core values, which, in turn, drives brand equity and consumer
trust. Brand symbolism, when executed effectively, can create a lasting impression
and shape brand perceptions and distinctiveness.
Branding researchers have particularly focused on the socio-cultural meanings of
signs, symbols and icons present in the society. Beyond the visual aspects that brand
symbolism offers, the social-cultural interpretations allow individuals to use brands
to represent their self-identity, group-identity, social-identity and even cultural-iden-
tity.28 A substantive body of research in this domain is contained in the consumer
culture theory (CCT) literature.29 Consumer culture theory researchers argue that
brand symbolism acts as a social representation that enable communities to com-
municate, behave and orient themselves.30 Due to such social interpretations, brands
are interwoven in consumer narratives and experiences, and are in turn mytholo-
gized and anthropomorphized.31
Ascribing humanlike attributes to brands (i.e. brand anthropomorphism) has
been found to enhance consumers’ ability to recognize the inherent values of a
brand.32 Many brands have utilized the power of social narratives and used anthro-
pomorphic elements to create strong self-brand connections. By humanizing their
narrative, many brands have become icons in their own rights. For example, the
Duracell bunny, Tony the Tiger for Kellogg’s Frosties, Ronald McDonald for
McDonald’s, cheetah of Cheetos, meerkats of Comparethemarket.com are all well-
known examples of brand anthropomorphism. Research shows that anthropomor-
phizing primes the mental representation of fun, which in turn increases consumers’
focus on approaching self-rewards. The self-rewards focus makes consumers more
likely to consume in a more indulgent fashion.33 However, brand anthropomorphism
is not always beneficial. Research highlights that anthropomorphizing a brand be-
comes a detrimental marketing strategy when consumers are driven by distinctive-
ness motives.34 Brands can overcome this challenge through supporting consumers’
identity expression.
Scholarly debate
Parris, D L and Guzmán, F (2023) Evolving brand boundaries and expectations:

looking back on brand equity, brand loyalty, and brand image research to move
forward, Journal of Product & Brand Management, 32 (2), 191–234
Sharma, M and Rahman, Z (2022) Anthropomorphic brand management: an
integrated review and research agenda, Journal of Business Research, 149,
463–75
Points of convergence and divergence

The discussed constructs of brand association, image and symbolism are key drivers
that allow a brand to distinguish itself in the marketplace. Some of the associations
that consumers have in their minds about a brand could be similar to competing
brands, while certain attributes, visuals and motifs could be unique to the brand. The
similarity of associations between competing brands is referred to as points of con-
vergence (PoC), while the unique features of a brand as compared to competitors,
offer points of divergence (PoD). Consumers use a variety of attributes to derive PoC
and PoD, including quality, price, image, status and location, among others. For ex-
ample, while very different in how they provide rating for a movie (point of diver-
gence), both IMDB.com and Rottontomatoes.com in general are associated with
movie ratings and reviews (point of convergence). Similarly, handbags from H&M
and Gucci both have lots of similarities in their functionality (PoC), however, they
differ substantially in regard to quality, price, brand image and status (PoD).
Moreover, two closely competing brands may also have PoC and PoD. For example,
Coca-Cola and Pepsi heavily use the colours red and blue respectively to create PoD
in their communications.
PoCs could be observed at product category level and between direct competitors.
At product category level, PoC is mostly associated with common tangible features
observed across competitors within a given sector or industry. For example, most
automobiles have certain common features in terms of wheels, doors, governor,
dashboard, seats and engine, etc. These features help establish the product as an
automobile in consumer minds. Product category level convergence evolves as the
industry advances. For instance, automobile transmission systems have continued to
evolve wherein automobiles now have fossil fuel (either petrol or diesel), hybrid and
electric versions. Directly competing brands within most industries have many simi-
lar features. While leading brands may aim to avoid such convergence, follower
brands can take advantage of such convergence to increase choice confidence among
consumers.35 A famous case of direct competitor convergence was observed when
96 Brand Management
Apple sued Samsung in various parts of the world for copying its design features,
wherein both parties settled after seven years long legal battle in courts.36
PoDs, many times, are features unique to a brand, or strong positive/negative
mental associations a consumer may have that allow clear distinction between com-
peting brands. PoDs can emerge from features associated with objective or subjective
performance as well as other abstract or imagery aspects. For instance, a brand pro-
moting 4k television will objectively be able to show how its product is better than
competing HD television brands. Additionally, consumers also use subjective perfor-
mance elements in their decision-making process. For example, a German automo-
bile is assumed to be better engineered than a South Korean counterpart. Similarly,
an Italian fashion brand is subjectively assessed as superior in terms of design and
aesthetics as compared to brands from other countries. Such subjective assessments
of country-of-origin effect are driven by consumer mental associations as high-
lighted.
Perceptual map
A perceptual map, also known as a positioning map, is a graphical representation
that helps managers understand how consumers perceive competing brands within a
specific product category. It reflects consumer perceptions rather than market share,
sales- or revenue-based figures. It provides a visual tool for analysing the competitive
landscape and the relationships between various attributes or qualities that consum-
ers associate with products. Perceptual maps typically depict two or more relevant
product- or brand-related dimensions along axes, with each axis representing a dis-
tinct attribute, feature or characteristic that influences consumer perceptions about
the brand. For example, a perceptual map may have economical versus expensive on
the X axis and high versus low quality on the Y axis for several brands in the same
product category (see Figure 6.1). By plotting different brands or products on these
axes, brands can identify assess their own positioning against the competitors, po-
tential gaps in the market and make informed decisions about areas for differentia-
tion or improvement.
Perceptual maps are regularly used in marketing, branding and strategy develop-
ment. Creating an effective perceptual map requires careful data collection and
analysis. Market research tools, including surveys and focus groups, are commonly
used to gather consumer perceptions and preferences related to various product at-
tributes. Once the data is collected, it is plotted onto the map wherein the features
are identified on the X and the Y axis. Each brand is then represented as a point on
this axis, as shown in the example figure. The relative distances between these points
on the map indicate how consumers perceive the differences between them. Brands
that are close to each other on the map are perceived as similar in terms of the
a ttributes or features being measured, while those farther apart are seen as more
distinct. By interpreting the map, businesses can identify opportunities to differenti-
ate their offerings, adjust their marketing strategies and address any gaps in con-
sumer perceptions. Overall, perceptual maps serve as powerful tools for serving two
objectives: (a) understanding a brand’s competitive landscape, and (b) developing
effective positioning strategy in relation to competitors.
Brand positioning for fashion industry
The fashion industry is a hypercompetitive, multi-billion dollar sector consisting of

very small to large global brands. It also consists of brands that serve all income
groups of the market. You could buy a pair of jeans trousers for $12 from George and
for $3,000 from Dolce & Gabbana. With such high levels of competitive diversity, a
perceptual map can offer a quick reference about how consumers perceive fashion
brands.
The following perceptual map, based on a student survey conducted by the
authors, uses the two dimensions of price (high versus low) and style (traditional
versus trendy) that demonstrates how consumers perceived different fashion brands
on these dimensions.
Figure 6.1 Perceptual map based on student survey conducted by authors
High price
DOCKERS
Barbour Fred Perry
Abercrombie
M&S & Fitch
LEVI’s
GAP UNIQLO URBAN
Ben Sherman OUTFITTERS
John Lewis
American Eagle
FCUK Outfitters
Traditional Trendy
River Island
ASOS
OLD NAVY
Boohoo
MATALAN New Look
H&M
George PRIMARK
Low price
98 Brand Management
The perceptual map shown offers several insights. First, it offers different brands’
position on those dimensions. Second, it also shows specific clusters of brands
which consumers perceive to be similar to each other. For example, Boohoo, New
Look and H&M are a cluster of brands that are competing in the trendy and low-
price quadrant. Similarly, Levi’s, Gap and Uniqlo are seen as quite similar to each
other. However, these brands are distinct from some of the traditional brands such
as M&S, Ben Sherman or Barbour. Third, this perceptual map also demonstrates
certain gaps that exist within the market currently based on consumer perceptions.
For instance, a brand that is mid-priced and follows new trends set by brands like
Asos and Zara could enjoy a unique position. Similarly, a traditional brand that is
mid-priced could also find itself in a distinct position in the market.
Most brands do not start with a clear positioning vis-à-vis competitors. The posi-
tioning is formed as the brand evolves, because it is based on consumer perceptions.
Once a position is formed, changing consumer perceptions is highly resource inten-
sive. However, a perceptual map can provide a brand with a direction in which they
may aspire to move. The following Branding in practice box provides an illustration
of perceptual map for fashion industry.
Segmentation bases and brand positioning

Segmentation is a core aspect of marketing that is associated with the paradigm of
Segmentation, Targeting and Positioning (STP).37 By dividing customers into sepa-
rate groupings based on their socio-demographics (e.g. age, gender, income, etc.)
and socio-psychographics (e.g. price consciousness, status orientation, etc.), man-
agers can target appropriate segments that fit with their brand positioning in the
market. Segmentation allows brands to better understand their customers, improve
product development, acquire new customers and retain regular customers, and
optimize their performance and spend on marketing campaigns by choosing ap-
propriate media.38
There are four major bases for customer segmentation in business to consumer
(B2C) markets: demographic, geographic, psychographic and behavioural.
Demographic segmentation pertains to various socio-demographic variables such as
age, gender, income, marital status and education. Geographic segmentation focuses
on a variety of variables including area, postcode, city, region, county, province and
country. Psychographic segmentation takes into account lifestyle, personality, values
and such other psychological motivations that drive consumer decision making.
Finally, behavioural segmentation is driven by occasion and other market-specific
behaviours that consumers display in their consumption practices. An important

aspect while understanding customer segmentation bases is to remember that these
segmentation bases are not exclusive and, in most cases, overlap. For example, in the
fashion industry perceptual map, a brand like Asos targets young consumers (demo-
graphic segmentation), who wish to be seen as trendy (psychographic segmentation),
and most of these consumers tend to live in the Western developed markets (geo-
graphic segmentation). Similarly, Ferrero, which owns the brand Kinder, sees a spike
in sales of Kinder Egg around Easter times and for its other brand Ferrero Rocher
around Christmas (behavioural segmentation).
These segmentation bases which evolved in physical markets are also extremely
useful for online marketplaces. In the digital domain, brands have a plethora of cus-
tomer data that can be utilized to develop even more meaningful segmentation that
can take into account all segmentation bases and multiple variables within it. For
instance, using Facebook’s advertisement platform, a brand can decide to use various
segmentation bases depending on its campaign objectives such as sales, lead genera-
tion, engagement, sales promotion, increasing web traffic or awareness. The brand
can then choose to target customers who live in a certain neighbourhood, area, re-
gion, city or country (geographic segmentation), age, gender, education level and
field of study, income, life events including birthdays and anniversaries, social groups
or networks, relationship status, employment status and work industry (demo-
graphic segmentation), hobbies and interests that include business, entertainment,
sports, activities, family and relationships (psychographic segmentation) and variety
of behaviours including digital activities, device usage, travel, web-browsing pat-
terns, purchase behaviours (behavioural segmentation) in a single campaign. The rise
of Big Data-based segmentation analysis has further crystallized the usefulness of
segmentation bases which allows better targeting and positioning.
Major segmentation systems offered by specialist companies
As just illustrated, segmentation can become a complex exercise as one starts

adding more variables in the mix. To help brands achieve their aims, a number of
leading market research and data analytics firms have developed segmentation
systems. Herein, three of the leading such segmentation systems are discussed –
PRIZM, Mosaic and Acorn. These systems can be useful in improving brands’ overall
efficiency and effectiveness in reaching their target audiences. By leveraging these
systems, brands can customize their segmentation, targeting and positioning
strategy effectively. Thus, they can strengthen their marketing efforts and services to
provide enhanced value to their specific consumer groups.
100 Brand Management
Potential Rating Index by ZIP Market (PRIZM), developed by Claritas, is a

segmentation tool that utilizes all the segmentation bases, to classify USA-based
households into 68 segments.39 It utilizes a combination of data sources, including
socio-economic rank (income, education, occupation and home value) as well as 11
life-stage groups and 14 social groups. Life-stage groups are based on age,
affluence and the presence of children. Social groups are based on affluence and
whether they live in a city, second-tier city, the suburbs or small towns and rural
areas. The tool also incorporates various offline and online data sources that
capture purchase behaviours and media behaviours including TV, cable, internet
browsing, social media, podcast listening, mobile, audio and print behaviours.
Mosaic is a consumer classification system developed by the information
services and analytics firm Experian to classify and identify the structure of UK
society.40 It aims to categorize individuals and households into 15 groups and 66
types based on a wide range of factors, including demographic, lifestyle, buying
behaviour and attitudes. Mosaic provides insights into consumer preferences,
spending patterns, media consumption habits and other relevant characteristics.
Using Big Data analytics including the latest satellite remote sensing technology,
global data and machine learning algorithms, Experian have also created a
segmentation tool called Worldview that offers geo-level demographic attributes for
250 by 250 metre grids globally.
Acorn is a geo-demographic segmentation of residential neighbourhoods in the
UK. It classifies more than 1.6 million postcodes in the country into one of 65 types.
The 65 types aggregate into 22 Acorn groups which lie within 7 Acorn categories at
the top level.41 These types are based on 800 variables that describe the consumers.
Chapter summary
This chapter focused on a vital component of brand management – brand position-
ing. We first defined what brand positioning is and how this schema can help brands
in distinguishing themselves in a competitive marketplace. Brand positioning is per-
ceptual. Managers can easily conceptualize the intended positioning for their brand.
However, in practice, it is much more complex and takes considerable time and re-
sources to achieve a desired position in consumer minds in comparison with the
competitors. Brand association, brand image and brand symbolism play a vital role
in developing and achieving brand positioning. Brands should clearly understand
their points of convergence (PoC) and points of divergence (PoD) in order to devise
effective brand communications. Perceptual maps are an important tool for m
anagers
in understanding their brand’s PoC and PoD against competitors. Utilizing a variety
of segmentation bases brands can connect better with their target market through
appropriate positioning.
Key concepts
●● Brand positioning
●● Segmentation, targeting and positioning
●● Brand association
●● Brand image
●● Brand symbolism
●● Points of convergence (PoC) and points of divergence (PoD)
●● Perceptual map
●● Segmentation bases
●● Demographic
●● Geographic
●● Psychographic
●● Behavioural
Exercise questions
1 Visit the Colgate toothpaste website (www.colgate.com/en-gb/products/
toothpaste) and examine the variants of the original toothpaste brand. If given a
choice, how would you consolidate or differentiate Colgate’s positioning in the
market?
2 Following your Colgate exercise, now visit the Arm & Hammer (www.
armandhammer.com/oral-care/toothpastes) and Aquafresh (www.aquafresh.com/
products.html) websites and examine the brand positioning of their sub-products.
What would you suggest both of these brands do with regards to their brand
positioning?
3 Given that Colgate, Arm & Hammer and Aquafresh offer similar variants of
toothpaste catering to similar oral health issues, how do you think they are
differentiated in consumer minds?
4 Identify points of convergence (PoC) and points of divergence (PoD) for a

minimum of 10 brands in the following categories: (a) fashion; (b) automobiles;
and (c) smartphones.
5 Draw a perceptual map for a product category of your choice.
6 Identify segmentation bases utilized by prominent brands in: (a) shampoo; (b)
sports clothing; (c) sneakers; (d) washing machines; and (e) airlines.
CASE STUDY Gymshark
Read the article in Forbes about the development and growth of the sports apparel brand
GymShark. In it, GymShark’s approach is summarized as:
●● Staying humble
●● Focusing on customer needs
●● Being visionaries
●● Building an influencer community
●● Assembling a dream team
●● Documenting everything
●● Building the founder’s profile
SOURCE www.forbes.com/sites/jodiecook/2020/08/17/how-gymshark-became-a-13bn-brand-and-what-we-can-
learn/?sh=22d3fe9176ed
Case questions
1 Based on the case study, discuss how Gymshark was able to create its unique
positioning in the athleisure market.
2 Draw a perceptual map of the athleisure market using any two criteria of your choice.
3 Thinking about segmentation bases, which particular segmentation bases and
variables were used by Gymshark in targeting its customers?
4 What types of brand associations, image and symbolic facets of brand positioning
were used by Gymshark?
Endnotes
1 Ries, A, and Trout, J (1972) The positioning era cometh, Advertising Age, 24 (4), 35–38
2 Sujan, M and Bettman, J R (1989) The effects of brand positioning strategies on
consumers’ brand and category perceptions: Some insights from schema research,
Journal of Marketing Research, 26 (4), 454–67
3 Singh, J, Ehrenberg, A and Goodhardt, G (2008) Measuring customer loyalty to product
variants, International Journal of Market Research, 50 (4), 513–32
4 www.colgate.com/en-gb/products/toothpaste (archived at https://perma.cc/KV29-
MDQ5)
5 Alba, J W, Hutchinson, J W and Lynch Jr, J G (1991) Memory and decision making, in
Handbook of Consumer Behavior, ed. T S Robertson and H H Kassarjian, Prentice-
Hall, Englewood Cliffs, NJ, pp 1–49
6 Sujan, M (1985) Consumer knowledge: Effects on evaluation strategies mediating
consumer judgments, Journal of Consumer Research, 12 (June), 31–46
7 Broniarczyk, S M and Alba, J W (1994) The importance of the brand in brand
extension, Journal of Marketing Research, 31 (May), 214–28
8 Schnittka, O, Sattler, H and Zenker, S (2012) Advanced brand concept maps: A new
approach for evaluating the favorability of brand association networks, International
Journal of Research in Marketing, 29 (3), 265–74
9 Greenwald, A G and Leavitt, C (1984) Audience involvement in advertising: Four levels,
Journal of Consumer Research, 11 (June), 581–92
10 Keller, K L (1993) Conceptualizing, measuring, and managing customer-based brand
equity, Journal of Marketing, 57 (January), 1–22
11 Sasmita, J and Mohd Suki, N (2015) Young consumers’ insights on brand equity:
Effects of brand association, brand loyalty, brand awareness, and brand image,
International Journal of Retail & Distribution Management, 43 (3), 276–92
12 Anderson, J R and Bower, G H (1973) Human Associative Memory, Halstead, New
York
13 van Osselaer, S M J and Alba, J W (2000) Consumer learning and brand equity, Journal
of Consumer Research, 27 (June), 1–16
14 Gluck, M A and Bower, G H (1988) From conditioning to category learning:
An adaptive network model, Journal of Experimental Psychology: General, 117
(September), 227–47
15 Van Osselaer, S M J and Janiszewski, C (2001) Two ways of learning brand
associations, Journal of Consumer Research, 28 (2), 202–23
16 www.laptopmag.com/articles/sony-vaio-batteries-recalled#:~:text=Sony%20is%20
recalling%20the%20lithium,overheat%2C%20risking%20burns%20and%20fire
(archived at https://perma.cc/JT7X-L6ZD)
17 www.cpsc.gov/Recalls/2016/Sony-Recalls-VAIO-Laptop-Computer-Battery-Packs
(archived at https://perma.cc/BL6X-NEEJ)
18 Patterson, M (1999) Re-appraising the concept of brand image, Journal of Brand
19 Faircloth, J B, Capella, L M and Alford, B L (2001) The effect of brand attitude and
brand image on brand equity, Journal of Marketing Theory and Practice, 9 (3), 61–75
20 East, R, Singh, J, Wright, M and Vanhuele, M (2021) Consumer Behaviour:

Applications in marketing, 4th edn, Sage, London
21 https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wharton-podcast/
volkswagen-diesel-scandal/ (archived at https://perma.cc/GGW6-C7UP)
22 East, R, Singh, J, Wright, M and Vanhuele, M (2021) Consumer Behaviour:
Applications in marketing, 4th edn, Sage, London
23 Mckellar, P (1957) Imagination and Thinking: A psychological analysis, Basic Books,
Oxford,
24 Romaniuk, J (2013) Modeling mental market share, Journal of Business Research,
66 (2), 188–95
25 Holt, D B (2005) How societies desire brands: Using cultural theory to explain brand
symbolism, in Inside Consumption, Routledge, pp 273–91
26 Klink, R R (2000) Creating brand names with meaning: The use of sound symbolism,
Marketing Letters, 11, 5–20
27 https://edition.cnn.com/2011/10/06/opinion/apple-logo/index.html (archived at https://
perma.cc/G2EB-EZ7N)
28 Schmitt, B (2012) The consumer psychology of brands, Journal of Consumer
Psychology, 22 (1), 7–17
of research, Journal of Consumer Research, 31 (4), 868–82
30 Woodside, A G, Sood, S and Miller, K E (2008) When consumers and brands talk:
Storytelling theory and research in psychology and marketing, Psychology &
Marketing, 25 (2), 97–145
31 Holt, D B (2004) How Brands Become Icons: The principles of cultural branding,
Harvard Business Press, Boston
32 Morhart, F, Malär, L, Guèvremont, A, Girardin, F and Grohmann, B (2015) Brand
authenticity: An integrative framework and measurement scale, Journal of Consumer
Psychology, 25 (2), 200–18
33 Nenkov, G Y and Scott, M L (2014) ‘So cute I could eat it up’: Priming effects of cute
products on indulgent consumption, Journal of Consumer Research, 41 (2), 326–41
34 Puzakova, M and Aggarwal, P (2018) Brands as rivals: Consumer pursuit of
distinctiveness and the role of brand anthropomorphism, Journal of Consumer
Research, 45 (4), 869–88
35 Wang, Q and Shukla, P (2013) Linking sources of consumer confusion to decision
satisfaction: The role of choice goals, Psychology & Marketing, 30 (4), 295–304
36 www.theverge.com/2018/6/27/17510908/apple-samsung-settle-patent-battle-over-
copying-iphone (archived at https://perma.cc/S8DM-JH9V)
37 Kotler, P (2017) Philip Kotler: Some of my adventures in marketing, Journal of
Historical Research in Marketing, 9 (2), 203–08
38 Dibb, S (1999) Criteria guiding segmentation implementation: Reviewing the evidence,
Journal of Strategic Marketing, 7 (2), 107–29
39 https://claritas.com/prizm-premier/ (archived at https://perma.cc/QX4W-9S2V)
40 www.experian.co.uk/business/platforms/mosaic (archived at https://perma.cc/2FUW-
P74U)
41 https://acorn.caci.co.uk/ (archived at https://perma.cc/JW8M-VMKP)
105
Brand 07
communication
Overview
In this chapter, we first discuss how a brand’s primary function pertains to commu-
nication. We then introduce the prevalent theories in advertising including AIDA,
ATR and ELM. We also provide an overall view on the current state of the debate.
Further, we bring in the signalling role of brands, from economics and evolutionary
psychology perspectives. In the section, we take a novel perspective on how brand
communication influences individual identities, both social and personal, and in
turn how individual identities are shaped to be congruent with the brand. In the
following two sections, we introduce two powerful theories that provide deeper
understanding of individuals’ relationships with brands, where brand communica-
tion aggravates compensatory consumption and often functions as a tool for indi-
viduals’ impression management. This chapter contains some well-known cases in
brand communication.

●● Understand how brands function as a communication tool

●● Learn about the well-known theories in brand communication
●● Understand the debate on how brands shape identities
●● Develop insights on psychological theories that influence brand communication
●● Be informed about the role of brand communication in the digital age
Brand as the key communication tool

As mentioned in earlier chapters, brands are a vital tool for any organization in com-
municating their distinctiveness from competitors. In Chapter 4, we discussed how
brand features such as Appealing, Legitimate, Applicable, Recognizable, and

Meaningful (ALARM), coupled with brand elements such as the name, logo, slogan,
persona, digital presence, sounds and jingles, and packaging, help brands to distin-
guish themselves.
Companies use their brand elements in a variety of ways to communicate their
brand identity to the wider public. Moreover, depending on the aim of the commu-
nication, such as information, persuasion, image creation, reassurance and reminder,
brand elements are used differently by companies. For example, in many parts of the
world, orange juice was not considered a breakfast drink, even 30 years ago. While
oranges were consumed, orange juice was not a staple part of breakfast.1 This
changed considerably when Del Monte Foods, one of the largest producers and dis-
tributors of processed fruits and juices, ran a worldwide campaign featuring British
actor Brian Jackson in the mid-1980s. The campaign’s slogan, ‘The man from Del
Monte, he say yes!’2 became an instant catchphrase leading to the acceptance of or-
ange juice as a breakfast drink. Within a decade of the campaign execution, a report
from the US Department of Agriculture (USDA) in 2003 concluded that on any given
day only 5 per cent of US citizens consumed fresh oranges while 21 per cent con-
sumed orange juice.3
While Del Monte aimed to change usage behaviour relating to the consumption
of its product, Stella Artois, the lager brand, used brand communication to change
consumer perceptions towards paying a higher price. Due to its higher alcohol con-
tent, the brand had to pay higher duty in the United Kingdom, which made the cost
higher compared to the competitors. Stella launched the ‘reassuringly expensive’
campaign with the help of advertising agency Lowe to create a positive assurance
that by being more expensive, its premium lager was better than the cheaper brands.4
Using highly creative advertisements that used themes such as war movies, silent
comedy and surrealism to portray an image of sophistication associated with the
beverage, the brand was able to capture the public imagination.
De Beers, a leading diamond consortium that specializes in diamond mining, ex-
traction, retail and trading, created a completely new behaviour globally through
brand communication, also known as the ‘diamond invention’.5 When the company
discovered massive diamond mines in South Africa in the late 19th century, they real-
ized that only by maintaining the fiction that diamonds are scarce and invaluable
could diamond prices be kept high. By controlling all the facets of the diamond busi-
ness from mining to retail, the company was able to control the supply and by using
the brand communication, it increased the demand. In the mid-1930s, the brand
used communication to persuade young American men that diamonds were synony-
mous with romance and the measure of a men’s personal and professional success
directly correlated with the size and the quality of diamond that they purchased for
their partner. Moreover, they also campaigned to convince young women that love
was measured through a gift received, a diamond.6 The brand communicated this
Brand communication 107
through idols of romance including Hollywood personalities, political leaders, their

spouses and daughters. The company also created a weekly service which provided
125 leading newspapers with descriptions of the diamonds worn by movie stars.
Such communication tactics honed over the years have resulted in global success. For
instance, in Japan, the percentage of first-time brides who receive a diamond engage-
ment ring increased from 5 per cent in 1965 to 77 per cent in 1995. Similarly, in
China, one of the fastest-growing retail markets for diamonds, less than 1 per cent
of first-time brides received a diamond engagement ring in 1994, but this increased
to 31 per cent in 2010 and over 50 per cent in 2019.7 8
While brand communication can help a brand create distinctiveness and propel its
market share and revenues, if the claims made in the brand communication are not
supported in product functionality, customers will not stay connected with the
brand. Exaggerations about product performance through brand communication
can backfire when the product does not meet customer expectations.9 The issue of
robust and valid claims in brand communication had led to research on communica-
tion ethics,10 product harm11 and brand transgression.12 This has also culminated in
related regulations and appropriate legislative bodies that examine miscommunica-
tions and false claims. For instance, in the UK, the advertising watchdog ASA
(Advertising Standards Authority) banned a campaign by Toyota and Hyundai for
making exaggerated claims about the speed at which their electric cars can be
charged and misleading consumers about the availability of rapid-charging points
across the UK and Ireland.13 Similarly, the watchdog also banned a series of adver-
tisements from HSBC for being misleading about its green credentials. The bank did
not mention its financing of fossil fuel projects or links to deforestation.14
Theories in brand communication

Along with the development of brand communication, research interest has grown
in this domain. A number of prominent theories have emerged over the past few
decades aiming to explain the underlying processes involved in brand communica-
tion, mainly in advertising. These theories are grouped as ‘strong’ and ‘weak’ theories
of communications. These two contrasting perspectives provide insights into the im-
pact and role of communication in shaping consumer attitudes and behaviours.
The strong theory of communication is also termed as the persuasive view, which
characterizes the role of communication as having a strong influence on shaping the
receivers’ actions, attitudes and behaviours. Communication from this theoretical
viewpoint is seen as a potent tool that can influence consumer desires, emotions and
could also drive cultural norms. In contrast, the weak theory assumes the role of com-
munication as a means to convey information to potential consumers as well as to
remind existing consumers about the brand. This viewpoint espouses communication
Figure 7.1 Hierarchy of Effects models
AIDA DAGMAR
Awareness Awareness
Interest Comprehension
Desire Conviction
Action Action
as a source of information that can help consumers make informed decisions by them-
selves. It proposes that the brand communication should be focused on details about
features, benefits, prices and availability of the brand, and such information will, in
turn, help consumers in their decision making. While these theories offer different per-
spectives, brand communication can serve both persuasive and informative functions
depending on the context and the specific goals set by the managers.
Several important theories in the field of brand communication have emerged in-
cluding Hierarchy of Effects models such as AIDA and DAGMAR (see Figure 7.1),
as well as other process theories such as Elaboration Likelihood Model (ELM) and
Advertising, Trial and Reinforcement (ATR). Hierarchy of effects models build on
the notion that consumers move through a series of stages in their decision-making
process. The AIDA model, as the name suggests, includes four hierarchical compo-
nents, namely Awareness, Interest, Desire and Action. The DAGMAR model, which
stands for Defining Advertising Goals for Measured Advertising Results, identifies
the sequence of hierarchy as Awareness, Comprehension, Conviction and Action.15
Figure 7.1 provides a comparison of the hierarchy.
The process-based account of brand communication is reflected in theories such
as Elaboration Likelihood Model (ELM) and Advertising, Trial and Reinforcement
(ATR). ELM describes the change of attitude through two major routes of persua-
sion: the central route and the peripheral route (see Figure 7.2).16 When the message
recipient has the motivation and the ability to think about the message and its topic,
they use the central route. However, consumers use peripheral route when they have
little or no interest in the subject and have lesser ability to process the message. In the
peripheral route, consumers rely on heuristics and rules of thumb in message pro-
cessing.
The ATR model highlights that brand communication works for the existing buyers
of a brand (see Figure 7.3).17 The central assumption of this theory is that the main
Figure 7.2 Elaboration Likelihood Model (ELM)
Brand
communication
An individual’s ability and motivation

to process communication
Low High
Peripheral Central
route route
Attitude change
SOURCE Adapted from Petty and Cacioppo (1986)
Figure 7.3 Advertising, Trial and Reinforcement (ATR) model
Awareness
For new
brands
Trial Brand
communication
Reinforcement
For established
brands
Repeat
Purchase
role of brand communication ‘is to reinforce feelings of satisfaction with brands al-
ready bought’.18 In this theory, consumers first gain awareness or interest, which leads
to trial purchase, which in turn leads to a repeat-buying habit. However, for frequently
bought products, repeat buying is the central determinant of sales volume and thus the
role of brand communication in this situation is to reinforce rather than be persuasive.
It means that when buyers are already aware of the brand, the role of communication
is to reinforce their existing knowledge and beliefs about the brand, which can lead to
repeat purchase. To maintain the market share through repeat purchase, communica-
tion mainly works through reminding and reinforcing the brand message, as denoted
in the bold black arrows in Figure 7.3.
Each of the above theories offer an interesting account for brand communication,
however, they have also been criticized for their specific limitations. For instance,
ELM has been criticized for its descriptive nature,19 unable to account for the chang-
ing levels of consumer involvement, the possibility that consumers may use both
central and peripheral routes simultaneously,20 and the role of situations, person and
product categories that may lead to variance in chosen routes.21 Similarly, Hierarchy
of Effects models have been criticized for their lack of applicability to established
brands when awareness is already present.22
Brands as communication signals

Most brands use visual and/or auditory elements to signal who they are to the wider
population (Figure 7.4). These elements allow brands to convey their message about
the brand’s identity, image, functionality, distinctiveness, usage, status and other such
aspects. Consumers, in turn, often utilize these brand elements to signal their own
identity as well. Thus, brands fulfil two important roles: (a) communicate the prod-
uct and its benefits; and (b) aid consumers in communicating their identity. These
two roles are explained through signalling theory. The communication from the
brand about the product and its benefits can be illustrated through the economics
perspective of signalling theory. On the other hand, the consumer signalling through
brand is grounded within the evolution biology and social psychology fields.
Figure 7.4 E lectric cars are employing their green credentials as brand communication
signals
SOURCE Unsplash (Michael Marais)

The economics perspective of signalling theory is based on the core idea of ‘infor-
mation asymmetry’. Information asymmetry pertains to the inequalities of knowl-
edge between market actors, such as sellers and buyers.23 The concept of signalling
in economics was originally highlighted by Nobel laureate Michael Spence in his
seminal work.24 Spence argued that there is a knowledge gap between the sender and
the receiver of a message. The sender aims to fill that gap by providing more infor-
mation. In the branding context, this is highly relevant as in a competitive market-
place buyers may not possess the relevant information about every product or brand.
Thus, it is paramount for brands to communicate their ability to fulfil customer ex-
pectations. Brands can do that by highlighting their functionality, novelty, social
approval and many such other attributes.
This is relevant for every brand but even more important for new products. For
instance, in the fast-growing electric car market, new brands are emerging at a rapid
rate. Each automobile brand is highlighting their specific features pertaining to elec-
tric cars in terms of mileage on a single charge, speed of charging and electricity
consumption, as well as their collaborative networks such as network of charging
points and beneficial electricity supplier tariffs. Such information can alleviate
knowledge gaps among potential electric car buyers.
While this information is available in the market, receivers may still remain scep-
tical, due to the reliability of information, one of the key conditions of signalling
theory. For instance, while many electric car makers claim substantial mileage on a
single charge, a study by the consumer body Which? found that since 2017 only one
electric car met the official Worldwide Harmonized Light Vehicle Test Procedure
(WLTP) that pertains to the mileage of the car in ideal road conditions.25 Thus, a
reliability signal challenge exists for electric cars in terms of their official mileage on
a single charge. Electric car brands can provide transparent information about the
ideal and real mileage and enhance their reliability signals.
On one hand, brands communicate their features, while on the other, consumers
also use brands to signal their identity. In this regard, a substantial body of consumer
research exists that is derived from evolutionary biology and social psychology.26 27
Research in evolutionary biology highlights that men use brands conspicuously,
driven predominantly by their short-term mating motives,28 while women use con-
spicuous brands to deter other female rivals,29 and signal their mating standards to
men and thereby deter undesirable pursuers.30
Many luxury brands highlight their logos prominently on their products which
enables consumers to communicate their status.31 Brands also use a variety of other
signals to communicate their position in the market to assure consumers of their
reliable signals. For example, in the UK retail market brands use a variety of posi-
tions, such as number 1 (Tesco), low price (Lidl and Asda), high quality (M&S and
Waitrose) and frozen food (Iceland). Such signals can shape consumers’ own prefer-
ences and identities. Price-conscious or quality-conscious consumers may prefer re-
tailer brands that match with their identities.
Signalling misadventures at Starbucks
Starbucks, a global coffee brand, courted controversy regarding its stance on the
Black Lives Matter (BLM) movement. As BLM gathered pace around the USA and in
many other markets where Starbucks products are sold, the company announced its
support via social media and press releases. It also pledged to donate $1 million to
organizations promoting racial equity, diversity and inclusivity.
While signalling support towards the BLM movement publicly, Starbucks, initially,
told its employees that they could not wear clothing and accessories that supported
the movement, stating violation of the company’s dress code policy. The company
stated that employees were ‘not permitted to wear buttons or pins that advocate a
political, religious or personal issue’. However, such double-standards were shared
by the employees on social media and the company received substantial public
backlash.
Following the public uproar, Starbucks reversed its decision and handed out
buttons supporting the cause. Moreover, the company also announced that it would
design and distribute 250,000 T-shirts that feature a series of protest picket signs,
including one that says ‘Black Lives Matter’.
This example highlights the pivotal role of reliable and consistent signals in brand
communication. When brands demonstrate consistent signals about their actions and
intent, it can dampen hypocrisy perceptions and strengthen positive brand image.
The interactive relationship between brand

communication and individual identities
Brands are part of consumers’ daily lives and are woven into their life narratives.
Thus, consumers attach meanings to their brands, knowingly or unknowingly, inten-
tionally or unintentionally.32 Consumers have beliefs about themselves, called self-
concepts, which are reflected in their consumption of the brands. Consumers hold
several types of self-concept. For instance, actual self reflects the attributes that the
consumer actually possesses, such as level of intelligence, academic achievements
and attractiveness.33 The ideal self represents what the consumer would like to por-
tray themselves to be which, in turn, motivates them to change, improve and achieve
higher standards.34 The social self refers to how the individual thinks other people
perceive them. The ought self represents the sense of duty, obligation and responsi-
bilities,35 and the extended self is created by external objects such as brands that one
possesses or surrounds oneself with.36 37
Brand communication aids consumers to establish and manage their self-concepts

and thus the relationship between the individual and social identity is intertwined.
Social identity reflects a consumer’s perceived membership of a relevant social group.
Social groups are identified as in-group and out-groups. Research shows that con-
sumers buy and consume brands that match with their in-groups and avoid brands
preferred by their out-groups.38 When consumers discover that the brand preferred
by them and their in-group is rejected by others, they demonstrate defensive behav-
iours such as advocating the brand, and even trading up to a premium version of the
brand.39 Research also shows that consumers use different types of brands to negoti-
ate their identity in a variety of settings.40
Many successful brands understand and utilize this interactive nature of identity
through their communications. For instance, Dove, a personal care brand from
Unilever, realized from its market research that the traditional fashion-model-driven
aspirational marketing that focused on an ideal self was causing anxiety among its
consumers. Its research showed that only 2 per cent of women considered themselves
beautiful. In response to this, Dove created its ‘real beauty’ campaign, which em-
ployed women with different body shapes and colours as models. The campaign was
an instant success globally and the brand sales increased from $2 billion a year to
$4 billion within three years of the campaign.41
‘Don’t Buy This Jacket’! Patagonia invokes consumers’ ought
and ideal selves
Patagonia, founded in 1973 by climbing enthusiast Yvon Chouinard, has continuously

focused on environmental sustainability in its brand communication. In 2011, on
Black Friday, Patagonia launched a full-page advertisement in the New York Times,
with the slogan ‘Don’t Buy This Jacket’.42 Black Friday is celebrated in the United
States as the day after Thanksgiving in the month of November, and traditionally
marks the start of the Christmas shopping season, with high discounts offered on the
day to attract shoppers. Patagonia, instead of encouraging the shopping spree like
other brands, decided to address the issue of consumerism head on through this
advertisement. The campaign aimed at establishing Patagonia as a leading brand
selling sustainable products.
The advert also highlighted the environmental costs of producing the jacket and
by promoting anti-consumption, the brand took a stance against fast fashion.
Moreover, the common threats initiative pledge launched by the brand at the same
time focused on reducing consumption, repairing, reusing and recycling goods. The
campaign’s communication appealed to consumers’ responsibilities and aspirations
towards securing the planet’s future, connecting with their ‘ought and ideal selves’.
The campaign was highly successful for the brand in terms of sales gain, and at the
same time, in raising awareness regarding the issues of consumerism, fast fashion
and its environmental impact.43
Brand communication and compensatory

consumption in the digital age
As discussed in the earlier section, brands are an important aspect of expressing
consumer identities. Consumers regularly define themselves through their craft,
hobbies, work and education which are recognized by others as indicators of attain-
ments. When such indicators of attainment are lacking or weak, consumers use al-
ternative symbols of self-definition to compensate their own shortcomings.44 In this
regard, brands have become prominent avenues of alternative symbols of self-com-
pletion. For example, a low-income consumer may invest in buying high-end prod-
ucts such as luxury brands as a compensation mechanism of their lack of wealth
(i.e. indicator of attainment). This phenomenon is called compensatory consump-
tion, defined as a reactionary consumption behaviour to quell or eliminate the ex-
perienced self-identity threat.45 Compensatory consumption can take many forms
depending on the lack of attainments and the standard of comparison. For instance,
if your neighbour (i.e. standard of comparison) bought a new automobile, you may
decide to buy a new car or another conspicuous product to attain symbolic self-
completion. Research points out that consumers typically offset comparisons to
higher status and wealthier individuals by identifying an alternative domain in
which they believe they fare more favourably than the higher-status person and by
displaying success and achievement in these domains.46 For example, consumers of
inexpensive cars display car bumper stickers relating to golf club membership and
marathon completion, which highlight their membership or accomplishments in
another domain.
Brands have long understood consumers’ need for symbolic self-completion and
resultant compensatory consumption. In this regard, brands use a variety of tactics
to induce compensatory consumption. In sectors such as make-up, cosmetics, fash-
ion and other personal care brands have used highly attractive models and celebri-
ties, perpetuating the ideal of body shape in their communications. For example, in
the oral hygiene market, a toothpaste brand communicating ‘whiter than white’
teeth can make the receivers feel inadequate about the whiteness of their own teeth,
leading to the purchase of the brand. Such brand communication can create a dis-
crepancy between the target consumers’ actual and ideal selves, which, in turn,
would drive the need for compensatory consumption.
Compensatory consumption is further pronounced in digital environments due to

constant and continuously evolving comparative standards of attainment. While re-
search is still nascent in this area, the concept is highly applicable in the context of
digital consumption. Social media influencers induce the desire for further consump-
tion of products that they endorse through creating a sense of discrepancy amongst
the followers. Similarly, other consumers posting their lifestyle and brand choices on
social media platforms such as Instagram, Facebook, Snapchat and TikTok may also
create a lack of self-attainment perceptions. The digital environment can, thus, in-
duce compensatory consumption. While many brands regularly engage with social
media and the influencers in promoting their products to increase sales, they should
remain aware of the precepts of ethical marketing and responsible behaviour.
Brand as tools for individual impression

management
Another important theory from social psychology that enriches the domain of brand
signalling is impression management. Emerging from the seminal work by Erving
Goffman, this theory describes efforts by a consumer to create and maintain their
identity to match with the image held by their target audience.47 While impression
management has been studied extensively in organizational psychology and organi-
zation management literature,48 marketing and brand management domains have
yet to explore the applications. By engaging in impression management, consumers
project their desired image and avoid portraying an undesired image.49 Researchers
suggest that consumers use two types of impression management tactics, namely
defensive and assertive.50
Defensive tactics are employed to defend or restore an identity, and include ex-
cuses, justifications, disclaimers, self-handicapping and apologies. On the other
hand, assertive tactics are used for developing or maintaining identities and include
tactics such as ingratiation, intimidation, supplication, entitlement, enhancement,
and exemplification.51 For example, consumers use brands that promote their sus-
tainability credentials as part of their exemplification tactic so they can present
themselves as having social consciousness. Similarly, consumers also employ ingra-
tiation regularly by flattering others’ brand choices and giving expensive gifts. Power
dressing is associated with intimidation tactics. Given that consumers use impression
management regularly, further research can reveal insights into applications in brand
communication.
In the digital age, signalling through brand communication has evolved further. In
recent years, a number of social media platforms such as Instagram and Snapchat
have emerged that focus on the visual representation. Consequently, many consum-
ers use brands to curate their own identity in a desirable fashion. Examples of such
behaviour can be found in people conspicuously highlighting clothing and hairstyles

and image projection using specific brands that are related to high status on social
media. The tendency to manage one’s online impression using brands has fuelled the
growth of multibillion dollar industries including luxury goods, personal grooming,
diet, cosmetics and exotic tourism. Accordingly, brands have strengthened their pres-
ence on social media platforms.
Scholarly debate
Bolino, M, Long, D and Turnley, W (2016) Impression management in organizations:

Organizational Psychology and Organizational Behavior, 3, 377–406
Lee, S J, Quigley, B M, Nesler, M S, Corbett, A B and Tedeschi, J T (1999)
Development of a self-presentation tactics scale, Personality and Individual
Differences, 26 (4), 701–22
In conclusion, the theories from the different disciplines discussed above enrich our
understanding of how brand communication functions. It is, however, important to
consider that while offering deeper insights into the underlying processes that drive
consumer-brand relationships, many of these theories may seem overlapping in their
scope and meaning. For example, self-concept- and identity-related theories reflect
on consumer’s sense of self as it is, as well as within a group and society, and impres-
sion management theory offer how consumers signal and manage their identity.
Similarly, the different hierarchy of effects models discussed are flexible and allow
brands to adapt their campaigns, depending on the communication aims (i.e. aware-
ness, persuasion, image creation) and market position (e.g. new or established).
Overall, the advancements in knowledge provide insights about multiple ways that
brands can achieve the goal of building strong customer relationships.
Chapter summary
In this chapter, we first understood how brands play a vital role in communicating the
value and ethos of a firm. Moreover, through the examples of brands such as Del Monte,
De Beers and others, we also learned how brand communication is critical to the success
of an organization. Thereafter, we explored the various theories of brand communica-
tion that emerge from the field of advertising including the different Hierarchy of Effects
models, ELM and ATR. Brand communication as signalling has been studied from a
variety of lenses including economics, evolutionary biology and psychology. While the
economics-driven perspective offers a way to understand how brands can signal their
position in the market, the psychology-driven research shows how consumers use brands
to signal their own identity. Thus, brand communication and individual identity at both
personal and social levels are intertwined. In today’s digital age, brands also allow
consumers an avenue to fulfil their identity-driven goals through compensatory

consumption. Moreover, consumers regularly use brands to manage their impression in
both offline and online domains. In summary, brand communication has assumed even
greater importance as a strategic tool for organizational success.
Key concepts
●● Brand communication
●● Hierarchy of effects model
❍❍ AIDA
❍❍ DAGMAR
❍❍ ELM
❍❍ ATR
●● Brand signalling
●● Self-identity
●● Social identity
●● Compensatory consumption
●● Impression management
Exercise questions
1 Using your own examples, explain how brand communication can help companies
achieve success.
2 Critically reflect on why brand communication is vital in today’s market.
3 Explain the hierarchy of effects models and critically reflect on their advantages
and shortcomings.
4 Brands are intertwined with consumer identities. Explain, providing examples.
5 Using examples, discuss how and why consumers use brands as compensatory
consumption tools.
6 Discuss the impression management tactics through the usage of brands that you
have observed amongst your peers.
CASE STUDY How to develop a jewellery icon
Introduction
Luxury jewellery brands often rely on ‘iconic’ designs to build brand recognition and drive
sales growth. These signature pieces encapsulate a brand’s history and aesthetic, provide
an aspirational entry point for customers and can account for a significant portion of
revenue. An icon transcends mere adornment; it embodies a brand’s narrative, resonates
with diverse audiences and fuels financial success. This case study analyses how iconic
designs have supported the business strategies and performance of leading jewellery
houses like Cartier, Bulgari and Chaumet.
Chaumet’s Bee My Love collection
The 243-year-old French jewellery brand Chaumet is known for its exclusive tiaras but has
also successfully developed iconic ranges like ‘Bee My Love’ at more accessible price
points. The bee motif alludes to Chaumet’s history as the official jeweller of Napoleon
Bonaparte, who adopted the bee symbol. The Bee My Love collection includes plain gold
rings from €1,090 up to diamond-encrusted designs at €98,600. As Chaumet CEO Jean-
Marc Mansvelt notes, building icons requires long-term discipline and investment. But
ultimately only the customer can make an icon successful with continuous engagement
and purchase of the brand. Bee My Love represents Chaumet’s origins and has become
central to its brand narrative and revenue mix.
Cartier’s Trinity and Love collections
Cartier’s Trinity design originated in 1924 from a custom ring commission but has evolved
into a globally recognized icon available in jewellery, watches and accessories. The silk
Trinity cord bracelet retails for £720, providing an affordable entry point into the brand.
Cartier’s Love collection originated in 1969 as couple’s bracelets but truly took off
commercially with its symbolic design and aspirational sentiment. HSBC estimates that
Love now generates nearly 20 per cent of Cartier’s €10 billion annual revenues. Although
initially organic creations, Cartier has since strategically invested in marketing and
innovation around Trinity and Love to fully capitalize on their iconic status.
Bulgari’s city-inspired icons
Bulgari has taken the more deliberate approach of linking its iconic designs with brand
heritage. Its snake-shaped Serpenti range references ancient Roman mythology, while
the round Diva and B.Zero1 collection alludes to Rome’s famous Colosseum amphitheatre.
Bulgari CEO Jean-Christophe Babin notes these vertical and horizontal adaptations have
made Serpenti in particular commercially successful across diverse product categories.

The strategy provides focus to Bulgari’s icon efforts and consistency across its marketing
communications.
Conclusion
Iconic designs have proven essential for luxury jewellery brands in establishing identity,
connecting with customers and sustaining long-term sales growth. The quest for an
iconic collection is a strategic endeavour demanding a delicate balance between
tradition and innovation. Yet, icons cannot be artificially manufactured, and rely on
authentic brand narratives combined with targeted brand communications, which can
lead to strong consumer demand. Thus, building an icon requires more than just price
tags. The most successful jewellery houses have strategically invested around organic
icon innovations to fully capture their commercial potential.
Case questions
1 ‘Building an icon requires discipline… time and money.’ Explain the statement in terms
of brand communication.
2 The case discusses brands at various stages of iconicity. Using the ATR model, discuss
how established and new brands should use brand communication.
3 The case states ‘But ultimately only the customer can make an icon successful with
continuous engagement and purchase of the brand’. Reflect critically on the
intertwined nature of brand communication and consumer identity.
4 Imagine that you are the head of brand communication for the Serpenti range and are
tasked with building a digital identity for this icon. What kind of digital brand
communication and impression management tactics will you use to motivate your
target consumers to engage with your brand through sharing, liking and commenting?
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123
Consumer-brand 08
relationships
Overview
In this chapter, we provide the origins of consumer-brand relationship, tracing the
beginnings from relationship to marketing research. In the section following, we
present an overview of some of the key concepts used in consumer-brand r elationships,
including self-brand connection, brand trust and commitment, brand attachment,
brand engagement and brand love. We then explore the role played by c onsumer-brand
relationships in influencing customer experience. The final section includes the latest
developments in brand experience via digital and social media.

●● Understand how the notion of consumer-brand relationships research developed

●● Gain insights on some of the key current concepts in consumer-brand relationships
●● Critically understand the role of consumer-brand relationships in influencing
customer experience
●● Explore how consumer-brand relationships function in the digital and social
media era
Origins and concepts of consumer-brand

relationships
Brands are a bridge between the company and the consumer. For a company to be
successful, they have to build a strong relationship between the consumer and a
brand (Figure 8.1). The debate on the importance of this relationship between the
consumer and the brand emerged with the development of relationship marketing
theory in the mid-1990s.1 Historically, as discussed in Chapters 1 and 2, brands were
observed as merely identifiers of products or services for centuries, if not millennia.

However, with the development of relationship marketing theory, scholars have
grappled with questions such as whether, why and in what forms consumers seek
and value relationships with brands.2 Initial conceptualizations within this theory
highlighted that consumers engage in relational market behaviour due to personal,
social and institutional influences.3 These influences coupled with consumers’ moti-
vation to simplify their decision making, information processing, reduce perceived
risks and maintain cognitive consistency and a state of psychological comfort, were
identified as major drivers of consumption choice. Researchers also suggested that
family and social norms, peer group pressures, government mandates, religious ten-
ets, employer influences and marketer policies also motivated consumers to build
strong relationships with brands and organizations.4
In a seminal article, Susan Fournier criticized the traditional transactional na-
ture of consumer-brand relationships in the business-to-consumer markets. The
Figure 8.1 Consumers search for a brand with which they feel connected
SOURCE Khuc Le Thanh Danh on Unsplash

Consumer-brand relationships 125
author opined that the B2C markets can learn from how B2B sector partnerships
evolve between suppliers and manufacturers.5 Fournier proposed a renewed per-
spective that builds on relationship marketing theory, and argues that brands
should be animated, humanized and personalized to form a relational bond with
consumers. This perspective emphasizes that consumers form relationships with
brands in the same way as people-to-people relations. Hence, brands have transi-
tioned from mere transactional products or services to entities that play relational
roles in people’s lives. Fournier’s work also emphasizes the dynamic nature of
customer-brand relationships and the interplay between attachment and detach-
ment. The work also reaffirms the earlier research on empirical generalizations
(see Chapter 3), that customers do not exhibit unwavering loyalty to a single
brand; instead, it recognizes that customers might engage with multiple brands,
forming connections that vary in intensity and duration. Fournier’s insights into
the origins of customer-brand relationships underscore the complex interplay be-
tween individual identity, cultural context and brand symbolism. This perspective
underscores the importance of understanding consumer behaviour beyond trans-
actional exchanges, acknowledging the role of emotions, memories and aspira-
tions in shaping enduring brand relationships.
The development of relational perspective allowed other researchers to examine
consumer-brand relationships from varied angles. This led to a number of
relationships-related constructs that are observed in people-to-people relationship
being employed in branding context, including, love, passion, commitment, trust and
engagement. The following sections explore these important consumer-brand
relationships concepts including self-brand connection,6 brand trust,7 8 brand

commitment,9 brand attachment10 and brand love.11 Consumer-brand relationships
have thus become an umbrella term that encompasses a wide range of concepts as
outlined above that have become central to brand management theory and are
applied widely in branding practice.
Scholarly debate
Fournier, S (1998) Consumers and their brands: developing relationship theory in

consumer research, Journal of Consumer Research, 24 (4), 343–73
Sheth, J N and Parvatiyar, A (1995) Relationship marketing in consumer markets:
Antecedents and consequences, Journal of the Academy of Marketing Science,
23(4), 255–71
Self-brand connection
Self-brand connection is an important concept in branding that emerged in the mid-
1990s. Self-brand connection builds on brand personality12 and extended self-concept13
wherein brands become an integral part of the consumer identity. This perspective posits
that brands possess five distinct human-like qualities – sincerity, excitement, competence,
sophistication and ruggedness – essentially forming a brand’s identity. Extending this
concept, Jennifer Escalas and James Bettman coined the termed self-brand connection,
defined as an aggregate construct that captures the set of brand associations that are
more meaningful and closely linked to the self-identity of a consumer.14 Consumers
choose a brand based on how well it may align with their self-image. In today’s con-
sumption-driven world, the notion that ‘we are what we have’ signifies how consumers
extend their self-identity through objects, knowledge and habits. This concept is exem-
plified through actions like purchasing a prestige car to symbolize status or acquiring
luxury clothing for societal recognition. Scholars have highlighted the importance of
reference groups, which share similar beliefs and characteristics as the consumer, in shap-
ing brand meanings.15 Brands consistent with the ingroup positively impact self-brand
connections, whereas those consistent with the outgroup have a negative effect.16 Thus,
self-brand connection operates not only individually but also collectively, encompassing
family, group and national identities. Shared consumer passions for products or brands
lead to identities expressed through concepts like brand communities,17 brand tribes18
and brand cults.19 For consumers with high self-brand connection, their self-identity is
tied to the brand. High self-brand connection can act as a barrier to negative events relat-
ing to the brand, including negative news or word-of-mouth, and brand rejection by
others.20 For instance, when Elon Musk decided to change the company name from
Twitter to X, consumers reacted adversely by creating memes and demanding rollback
to the original Twitter brand name.
When consumer identity is threatened by others rejecting the brand or outgroups
using the brand, these consumers tend to trade up (i.e. buy a more premium version
of the brand). For example, when young athletic consumers who have a strong self-
brand connection with the brand Under Armour were informed that the brand was
now preferred by non-athletic consumers, the athletic consumers demonstrated a
greater willingness to upgrade and buy premium versions. Similarly, when young
fashion-focused women with high self-brand connection to the brand Burberry
were informed that working mums were avid consumers of the Burberry tote bag,
they demonstrated a significant interest in purchasing a higher-priced version of the
brand’s handbags.21 These examples demonstrate the dynamic relationship between
consumers and the brands they use. Successful brands build strong connections
with the consumers. The strength of self-brand connection acts as a buffer against
adverse market events including negative word-of-mouth, service failures and repu-
tation crisis.
Brand trust and brand commitment

Trust and commitment are basic aspects of any relationship. With the development
of knowledge on consumer-brand relationship, why and how consumers trust their
brands, and remain committed to these brands, have become important tenets of
brand management discipline. Trust and commitment are by nature mutual and thus
effort is required by both the brand and the consumer to maintain the relationship.
The concept of brand commitment first emerged in the B2B relationships literature
wherein the persistent desire to uphold a valued relationship between supplier and
the manufacturer was explored.22 In the consumer-brand relationships domain, com-
mitment is characterized as a form of ‘stickiness’ fostering consumer loyalty even
when satisfaction might be diminished.23 Similarly, trust involves confidence in the
integrity and reliability of the other party in the relationship.24 Brand trust is defined
as the willingness of the average consumer to rely on the ability of the brand to per-
form its stated function.25 Thus, brand trust and brand commitment are interwoven
as the former pertains to the brand delivering on its promise and the latter reflects
the relationship strength that is formed based on the brand promise. In academic
research, brand trust has been seen as a precursor to brand commitment which pos-
its that relationships grounded in trust are esteemed to the extent that parties seek to
commit to their continuation.26 A brand makes a promise to gain and maintain con-
sumer trust which, in turn, can lead to consumer commitment towards the brand.
Brand promise statements
Brands use catchy slogans and other tools to communicate their promise (as shown
in Table 8.1). These promises can be functional, such as the price promise offered by
many retailers such as Lidl, Target, Tesco, Wal-Mart and Wegmans. Many brands, on
the other hand, highlight the pleasure of consuming the product, such as BMW,
Marriott and Coca-Cola.
Not all brand promises are believed by consumers either. For instance, H&M, a
fast fashion brand, and its claim on being good for the planet has been controversial
among many consumer groups around the world. The brand has been given a low
rating on its sustainability claims.27 While H&M launched Conscious Collection, a line
of clothing within the brand made of sustainably sourced materials, and in-store
recycle bins, according to environmentalist Elizabeth Cline, less than 1 per cent of
the clothes are collected back for recycling.28 Of the clothes sent back to H&M, only
35 per cent of what’s collected is recycled at all.29
Thus, catchy slogans of brand promise may not lead to consumer trust and
commitment. However, a brand will have to act on the promises made to ensure that
it is continued to be trusted.
Table 8.1 Example statements
Brand Brand promise statement
Apple Think different.

BMW The ultimate driving machine.
Coca-Cola To inspire moments of optimism and uplift.
Coors Light The world’s most refreshing beer.
De Beers A diamond is forever.
Geico 15 minutes or less can save you 15% or more on car insurance.
H&M More fashion choices that are good for people, the planet and
your wallet.
Lidl Big on quality, Lidl on price.
Marriott Quiet luxury. Crafted experiences. Intuitive service.
Nike To bring inspiration and innovation to every athlete in the world.
Target Expect more, pay less.
Tesco Every little helps.
Wal-Mart Save money. Live better.
Wegmans Consistent low prices.
SOURCE Power reviews30
Brand trust and brand commitment are multidimensional concepts. For example,
brand trust is derived from several aspects, including shared values, competence, com-
munication, opportunistic behaviour, reliability, integrity and benevolence.31 32 Brand
commitment is measured through three distinct dimensions, namely affective, con-
tinuance and normative.33 Affective commitment entails a psychological attachment
to the brand based on shared values and brand identification, linked to retention, re-
purchase, positive word-of-mouth and willingness to pay a premium. For instance,
Apple consumers or Harry Potter fans (called Potterheads) queue up for hours in
front of the stores in advance of a new product being launched (see Figure 8.2).
Continuance commitment reflects a rational dependence on the brand driven by
limited alternatives or high switching costs, while normative commitment represents
attachment due to personal obligation to the brand, influenced by social pressure
and normative beliefs. While trust and commitment entail cognitive assessments of
relationship-building benefits and risks, brand attachment and love address the emo-
tional underpinnings of such relationships.
Figure 8.2 onsumers of Louis Vuitton waiting in a queue, showing the power of affective
C
and normative commitment
SOURCE Photo by Melanie Pongratz on Unsplash
Brand attachment
Brand attachment reflects the strength of the bond connecting the brand with the
self.34 This bond is exemplified by the mental representation of the rich and accessi-
ble memory network which encompasses a consumer’s positive thoughts and emo-
tions pertaining to the brand and their own identity. Brand attachment consists of
two sub-dimensions: self-brand connection (as discussed) and brand prominence.
The brand prominence sub-dimension captures the salience of the cognitive and af-
fective bond between the consumer and the brand. This salience is reflected in the
immediate recall of the brand with perceived ease as well as the frequency with
which brand-related thoughts and feelings are brought to mind.35
To create attachment among target consumers, brands have to focus on not only
strengthening self-brand connection, but also, at the same time, they must enhance
brand recall. To further improve brand recall, a strategically structured communica-

tions approach is recommended. For instance, L’Oréal Paris, a well-known global
cosmetics brands, wanted to increase brand attachment among Canadian women in
the 25–49 year age group. To achieve this, the brand posted sponsored advertise-
ments showcasing models in a snowy outdoor shoot in Whistler, Canada. The
eye-catching adverts used vibrant colours in the foreground with soft colours in
background, and encouraged women to ‘Dare to stand out from the crowd this
winter’ and ‘Take winter beauty to new heights’. As a result, the brand achieved a
7-point lift in recommendations in this age group and doubled the average brand
recall.36 Similarly, after successfully revamping its iconic 500 model, the Italian
automobile manufacturer Fiat launched the 500X crossover. In France, it targeted
the over-35 potential car buyers using a structured YouTube-based campaign. The
campaign achieved a 23 per cent increase in brand awareness and a 230 per cent
increase in Google search traffic for the Fiat 500X model in France. The campaign
even had a spillover effect wherein there was a 200 per cent increase in search vol-
ume for the Fiat brand.37 The above examples show that structured and targeted
brand communications, with high creative content that is original and relevant to the
consumers, will lead to increase in self-brand connection and brand prominence. The
increase in self-brand connection and prominence reflected in brand recall, in turn,
increase brand attachment.
Brand love
A relatively recent conceptualization in consumer-brand relationships is brand
love.38 It encompasses the emotional needs that form the foundation of relationship-
building. Similar to interpersonal love, brand love is the pinnacle of emotional at-
tachment a consumer has with a brand. Scholars have examined brand love through
a variety of methodologies and define brand love as the degree of passionate emo-
tional attachment a satisfied consumer has for a particular brand.39 Brand love dif-
fers from other brand-related emotions such as liking, because loved brands are
deeply integrated with consumer identity and precludes negative feelings towards
the brand. Based on the relational love prototype, scholars also argue that brand love
is a fuzzy and complex concept. Thus, brand love encompasses a collection of
‘thoughts, feelings, and actions that consumers arrange within a mental prototype’.40
Brand love can lead to several organizational advantages, including brand loyalty,
positive word-of-mouth (WOM) and brand advocacy. Moreover, it can result in fa-
vourable brand associations, which subsequently forecast affective commitment and
willingness to pay a premium price.41 Managers can employ a variety of tactics to
facilitate brand love among consumers including enabling passion-driven behav-
iours, self-brand integration, positive emotional connections and creating a sense of
long-term relationship. For example, brands such as Patagonia and Body Shop cre-
ated a sense of love among their customers by taking a consistent stance on specific
global issues such as climate change and no animal testing for cosmetics.42 Harley-
Davidson is loved by its customers due to its creation and active management of a
tightly-knit brand community. The brand regularly engages with its customers by
creating emotional meaningful events such as music festivals or NASCAR races and
through other digital engagements. Many consumers of Harley-Davidson even adorn
the tattoo of the brand on their body, a show of love.
Thus, due to its emotional nature, brand love is often viewed as overlapping with
brand passion, and emotional attachment, particularly in hedonic product catego-
ries, as opposed to utilitarian ones. This blurring of concepts raises questions about
their distinctiveness, posing a research limitation concerning brand love.43 The no-
tion that brand love gives companies an advantage over ‘unloved’ competitors con-
tradicts marketing empirical findings that show most brands, even the most beloved
ones, have numerous sporadic buyers. Consumers often fail to perceive anything
exceptional about the brands they use, even those they claim to love.44 These cri-
tiques serve as a timely reminder to approach popular branding constructs with
caution. Further empirical evidence from a behavioural perspective could assist in
determining whether consumer love for brands is genuine and leads to better market
performance or merely an academic concept with limited managerial relevance.
Scholarly debate
Batra, R, Ahuvia, A and Bagozzi, R P (2012) Brand love, Journal of Marketing,

76 (2), 1–16
Romaniuk, J (2013) What's (brand) love got to do with it?, International Journal of
Brand engagement and customer experience

Brand engagement and customer experience are two essential pillars for successful
branding, influencing how companies interact with their target audience and estab-
lish long-lasting connections. Brand engagement encompasses the emotional and
cognitive relationship that customers form with a brand.45 It goes beyond mere
transactions, aiming to create meaningful interactions that foster loyalty and advo-
cacy.46 Successful brand engagement involves consistent messaging, immersive story-
telling and a genuine alignment of values between the brand and its customers. By
creating memorable experiences and eliciting positive emotions, companies can cul-
tivate a strong sense of community and affinity among their customers.47
Customer experience, on the other hand, refers to the entirety of a customer’s

journey with a brand, encompassing every touchpoint from initial awareness to
post-purchase interactions.48 Customer experience is thus created by factors that
brands control as well as outside its control, including influence of other people,
consumer goals and purpose of shopping.49 50 In his book on customer experience
management, Bernd Schmitt highlights five steps: (1) analysing the experiential
world of the customers, (2) building the experiential platform, (3) designing the
brand experience, (4) structuring the customer experience and (5) engaging in con-
tinuous innovation.51 A seamless and delightful customer experience can significantly
impact brand perception and loyalty.52
The intersection of brand engagement and customer experience is where brands
can truly differentiate themselves from competitors. Engaging customers with con-
sistent brand communications and authentic brand experiences at every touchpoint
contributes to a positive customer journey.53 When brand engagement strategies
align seamlessly with a consistent customer experience, it results in a symbiotic
relationship where customers not only buy products or services but also become
emotionally attached to the brand's story and values. This interconnected approach
fosters self-brand connection, encourages word-of-mouth marketing and positions
the brand as more than just a transactional entity as well as a trusted companion.
Macmillan engagement campaign leads to additional
help for cancer sufferers
Macmillan, one of the largest UK-based charities in the fight against cancer, realized
that cancer sufferers needed much more support in everyday tasks such as
shopping, cleaning and ironing. Moreover, it was also observed from its research
that one in four cancer patients did not have adequate support from family and
friends.
To alleviate this issue, Macmillan’s Team Up service came up with an idea of
creating a region-specific, online marketplace that connected local community with
cancer sufferers, so the patients could get vital everyday support. Additionally, the
charity wanted to engage young volunteers from the local communities and make
the experience safe and easy to use for everyone involved.
Macmillan employed a multichannel brand communications approach, wherein it
used mobile technologies, traditional media and its in-person volunteering team to
ensure the campaign’s success. It used software to verify users’ identity at a point of
registration, created a unique brand identity that differentiated in colour and form
factor from other Macmillan campaigns, and the dedicated community manager
spent time working with local groups. The charity also ran bi-weekly user testing
sessions to ensure buy-in from local communities.
This consistent and multipronged approach resulted in registrations exceeding
40 per cent of the target. While the campaign team assumed that support tasks by
volunteers would be completed within three days of the cancer sufferer registering a
task, the average task completion time was less than two days.54 This case
demonstrates the importance of consistent and creative brand communications
supported by efficient processes, which can lead to successful brand engagement
and fulfilling customer experience.
Brand engagement via digital and social media

In today’s digital era, consumers not only expect high-quality products and services
but also demand a personalized, convenient and intuitive journey. This includes
factors like user-friendly interfaces, efficient problem-solving and personalized
recommendations. Moreover, today’s consumers rely on brand-related information
from other consumers, rather than relying exclusively on marketing materials.55
With increasing personalization, as seen on websites like Amazon or eBay,
consumers now expect brands to treat them as a unique entity. Brands that prior-
itize and invest in enhancing their customer experience stand to gain a competitive
edge, as satisfied customers are more likely to become repeat buyers and e nthusiastic
brand advocates.56
With emerging technological advancements such as social media, mobile com-
merce, web 2.0, virtual reality (VR), augmented reality (AR), multiplayer online
games (MMORPG), eSports and artificial intelligence (AI), brand engagement via
digital and social media has become extremely varied. Digital brand engagement,
thus, has become critical for success in today’s market. However, while offering
opportunities for engaging with customers through a variety of platforms and

technologies, it poses substantial challenges as brands have less control of their
communications as explained in the following Branding in practice case.
Global recall of Samsung Galaxy Note 7: the power of consumer
content and contempt in social media
On 2 August 2017, Samsung unveiled its flagship smartphone, the Galaxy Note 7, with
great fanfare in New York, which boasted novel technologies including an iris
scanner. By 19 August 2017, the phone was being sold in 10 markets including South
Korea and United States with a scheduled launch in the European Union in October.
However, within a week of the launch, customers started posting photos and videos
of the phone overheating, exploding or catching fire. The news spread globally
within hours and most major news outlets around the world were reporting it. While
Samsung announced a voluntary global recall on 2 September 2017, more than
2.5 million Galaxy Note 7 phones were already sold in the market. On 8 September
2017, the Federal Aviation Administration of USA and airlines worldwide asked
passengers with the Galaxy Note 7 to keep the phone turned off and not charge it
throughout their journey. As consumer complaints about the phones surged, the
US Consumer Product Safety Commission urged people to stop using the phone,
leading Samsung to issue a formal recall on 15 September 2017.57
By 1 October 2017, Samsung started selling the phone again, stating the faults
relating to the battery that caused the mishap was resolved. However, consumers
who bought the new version started posting photos and videos again within a week,
with viral videos of it on board a Southwest Airline flight in the USA emitting smoke
and the plane having to be evacuated. With major US carriers like AT&T and
T-Mobile stopping sales within a week, on 11 October 2017, Samsung announced it
would stop selling the Galaxy Note 7 globally.
This example shows the power of content sharing on social media and how
brands have to remain aware and agile in the face of consumer backlash. While
product recalls have been a regular phenomenon in the market for decades, the
advent of digital technologies has shifted the power base into the hands of the
consumers. Three months after the recall and the stopping of production, Samsung
announced that two separate problems with the lithium-ion batteries were to blame
for the fires.58
The interactive nature of digital technologies coupled with global connectivity add
further complexity to brand engagement challenges as outlined in the Samsung case.
Consumers nowadays are not passive recipients of brand information, but act as co-
creators.59 Consumers create vast amount of audio-visual content and exchange
amongst themselves through a variety of technologies.60 For instance, text- and
video-based product reviews, online forums, livestreaming and many other techno-
logical avenues are used by consumers to engage with and share their views about
brands. For instance, livestream shopping is estimated to be worth $68 billion by
2026 in the USA alone.61 However, the largest livestream shopping market in the
world happens to be China wherein top streamers like Li Jiaqi (Austin Li) sell thou-
sands of products in a few minutes through their live broadcasts.62
Digital brand engagement offers a unique opportunity for brands to gain knowl-
edge about their customers. Through social media and other research and data min-
ing platforms, brands are able to access vast amounts of consumer data. Such data
includes consumer socio-demographics such as age, gender, location, income, educa-
tion, family size, social network size and socio-psychographics including lifestyle,
consumption preferences and preferred brands across categories. The abundance of
data has led to new industries involving marketing technology (Martech), digital
data analytics, data warehousing and data mining. Companies such as Palantir that
specialize in Big Data analytics are utilizing machine learning and artificial intelli-
gence which allows its clients, including brands, organizations and governments, to
harness the power of data.63 Brands that utilize this data in an efficient manner are
able to build sustainable and successful engagement strategies. For instance, when
launching a new CLA version of its car, Mercedes Benz hired five Instagram photog-
raphers through a competition where whoever got the most impressions would get
to keep the car. This campaign received 87 million organic Instagram impressions
with 2 million new likes. Similarly, Airbnb uses the campaign ‘Don’t just go there,
live there’ through which it posts photos generated by the hosts and guests on the
Airbnb platforms about lived experiences. Each post received substantial engage-
ment among consumers.
While all brands aim to build strong consumer-brand relationships, it is not al-
ways possible to create a strong attachment, connection, love and engagement. There
are many brands to whom consumers demonstrate high levels of connection, love
and engagement such as Apple, Samsung, Nike, Louis Vuitton and Harry Potter. At
the same time, there are many other brands that are highly successful without having
a strong self-brand connection, attachment or love. These brands are trusted by con-
sumers, and often are bought solely out of habit, for example, Kellogg’s corn flakes,
Colgate toothpaste, Asos.com, Sony and Toyota. The key to building consumer-
brand relationships is to deliver on the brand promise consistently and keep remind-
ing the consumers through engaging brand communications.
Chapter summary
In this chapter, we have explored the origins and popular concepts of consumer-brand
relationships that have roots in the relationship marketing theory. We explained a
number of important branding concepts such as self-brand connection, brand trust,
brand commitment, brand attachment, brand love and brand engagement. We dem-
onstrated how each of these concepts can help brand managers to effectively manage
their brands through developing stronger relationships with their target consumers.
The importance of fulfilling the brand promise and how it can lead to satisfying and
enhancing customer experience have also been highlighted. We have shown that using
creative brand communications, brands, irrespective of their industry sector, can build
substantial engagement in physical as well as digital domains.
Key concepts
●● Consumer-brand relationship
●● Self-brand connection
●● Brand trust
●● Brand commitment
●● Brand promise
●● Brand attachment
●● Brand love
●● Brand engagement
Exercise questions
1 Discuss the origins of consumer-brand relationships in branding.
2 Explain the importance of building strong self-brand connections for a brand.
3 Why are brand trust and commitment critical for any brand’s success?
4 Using any three of the consumer-brand relationships concepts, critically examine
a brand of your choice against its major competitor.
5 Using examples, identify successful and failed branding campaigns on social
media.
6 Consumer-brand relationships are even more critical in the digital domain.
Critically reflect on this statement.
CASE STUDY How social media sold Wall’s ice cream
Wall’s ice cream is a well-established name and used social media platforms to refresh
their brand’s personality and relevance. The authors used econometrics to isolate the
sales impact of social channels on sales.
SOURCE www.mrs.org.uk/resources/social-media
Case questions
1 Examine the competitive market of ice cream and explain why Wall’s decided to launch
a social media campaign.
2 Explain the key highlights and the rationale for brand engagement strategy behind the
‘Goodbye Serious’ campaign.
3 Discuss the need for context-dependent social media engagement in the case study. In
your view, what other social contexts over the summer months could be utilized by the
brand to create further engagement?
4 Critically examine if the campaign was successful against its objectives.
5 Discuss the importance of brand engagement on social media for seasonal products
and how they can strengthen consumer-brand relationships.
Endnotes
1 Sheth, J N and Parvatiyar, A (1995) Relationship marketing in consumer markets:
Antecedents and consequences, Journal of the Academy of Marketing Science, 23 (4),
255–71
2 Fournier, S (1998) Consumers and their brands: Developing relationship theory in
3 Sheth, J N and Parvatiyar, A (1995) Relationship marketing in consumer markets:
Antecedents and consequences, Journal of the Academy of Marketing Science, 23 (4),
255–71
4 Bagozzi, R P (1995) Reflections on relationship marketing in consumer markets, Journal
of the Academy of Marketing Science, 23 (4), 272–77
5 Fournier, S (1998) Consumers and their brands: Developing relationship theory in
339–48
7 Morgan, R M and Hunt, S D (1994) The commitment-trust theory of relationship
65 (2), 81–93
9 Beatty, S E and Kahle, L R (1988) Alternative hierarchies of the attitude-behavior
relationship: The impact of brand commitment and habit, Journal of the Academy of
Marketing Science, 16, 1–10
10 Park, C W, MacInnis, D J and Priester, J (2008) Brand attachment: Constructs, conse-
quences, and causes, Foundations and Trends in Marketing, 1 (3), 191–230
1–16
12 Aaker, J L (1997) Dimensions of brand personality, Journal of Marketing Research,
34 (3), 347–56
15 (2), 139–68
339–48
15 Berger, J and Heath, C (2007) Where consumers diverge from others: Identity signaling
and product domains, Journal of Consumer Research, 34 (2), 121–34
16 Escalas, J E and Bettman, J R (2005) Self-construal, reference groups, and brand
meaning, Journal of Consumer Research, 32 (3), 378–89
17 McAlexander, J H, Schouten, J W and Koenig, H F (2002) Building brand community,
Journal of Marketing, 66 (1), 38–54
18 Cova, B and Cova, V (2001) Tribal aspects of postmodern consumption research: The
case of French in-line roller skaters, Journal of Consumer Behaviour, 1 (1), 67–76
19 Belk, R and Tumbat, G (2005) The cult of Macintosh, Consumption Markets &
Culture, 8 (3), 205–17
20 Khalifa, D and Shukla, P (2021) When luxury brand rejection causes brand dilution,
Journal of Business Research, 129, 110–21
21 Wang, Y and John, D R (2019) Up, up, and away: Upgrading as a response to dissimilar
brand users, Journal of Marketing Research, 56 (1), 142–57
22 Moorman, C, Zaltman, G and Deshpande, R (1992) Relationships between providers
and users of market research: The dynamics of trust within and between organizations,
23 Gustafsson, A, Johnson, M D and Roos, I (2005) The effects of customer satisfaction,
relationship commitment dimensions, and triggers on customer retention, Journal of
Marketing, 69 (4), 210–18
65 (2), 81–93
26 Shukla, P, Banerjee, M and Singh, J (2016) Customer commitment to luxury brands:
Antecedents and consequences, Journal of Business Research, 69 (1), 323–31
27 https://directory.goodonyou.eco/brand/h-and-m (archived at https://perma.cc/W2NB-
MLJH)
28 www.brandingmag.com/2019/12/12/hms-greenwashing-short-sighted-and-unethical/
(archived at https://perma.cc/X7TG-3D2X)
29 www.cbc.ca/news/business/clothes-recycling-marketplace-1.4493490 (archived at
https://perma.cc/L2NF-Z9E9)
30 www.powerreviews.com/blog/brand-promise-examples/ (archived at https://perma.
cc/988R-2H28)

32 McEvily, B and Tortoriello, M (2011) Measuring trust in organisational research:
Review and recommendations, Journal of Trust Research, 1 (1), 23–63
Review,
31 (3), 101947
34 Park, C W, MacInnis, D J, Priester, J, Eisingerich, A B and Iacobucci, D (2010) Brand
attachment and brand attitude strength: Conceptual and empirical differentiation of
two critical brand equity drivers, Journal of Marketing, 74 (6), 1–17
35 Ibid.
36 www.digitaltrainingacademy.com/casestudies/2015/08/taking_winter_beauty_to_new_
heights.php (archived at https://perma.cc/R8CB-6V47)
37 www.thinkwithgoogle.com/marketing-strategies/video/fiats-500x-crossover-ad-drives-
audience-engagement-on-youtube/ (archived at https://perma.cc/8A5L-VNHX)
38 Carroll, B A and Ahuvia, A C (2006) Some antecedents and outcomes of brand love,
Marketing Letters, 17, 79–89
39 Ibid.
1–16
41 Ibid.
42 www.thebodyshop.com/en-gb/about-us/activism/faat/a/a00018 (archived at https://
perma.cc/NK8F-77ER)
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141
Brand extension 09
Overview
In this chapter, we discuss the fundamental concept of brand extension, and its piv-
otal role in brand management. As brands grow, they extend into different categories
and lines, which pose new challenges for brand management. We provide details of
research into drivers of brand, category and line extension. The extensions are not
free from risks, and we highlight the advantages and disadvantages therein. In the
following section, we include research insights into how consumers evaluate the ex-
tensions, based on different types of congruence or fit, as well as how the ‘spillover’
effects influence consumer perceptions. Lastly, we present how culture influences
perceptions and attitudes towards brand extension.

●● Understand the fundamental concepts of brand, category and line extension

●● Gain knowledge on the success factors of extensions, along with advantages and
disadvantages of brand extension
●● Comprehend how consumers evaluate brand extensions through the lenses of
brand fit, product fit and spillover effects
●● Know about the cultural influences of perceptions toward brand extensions
What is brand extension and its role

in brand management?
Brand extension, a strategic marketing practice, involves extending a well-estab-
lished brand into new product or service categories, leveraging the parent brand’s
equity to enhance the acceptance and success of the new offerings.1 Brand extension
as a strategic practice relies on the positive self-brand connection, brand trust and
brand attachment, which consumers have developed towards the existing brand,
leading to reduced perceived risk and increased willingness to try the new products
offered by the brand.2 Brand extensions are considered a preferred strategic tool
because they are seen as a less risky approach to introducing new product lines. For
instance, Apple’s success from a comparatively small personal computer brand to a
global behemoth can be attributed to successful brand extension in phones, music
and streaming services. Similarly, Caterpillar, a heavy-machine product brand, has
successfully extended its business into boots, apparels and other merchandise. Brand
extension allows companies to tap into the parent brand’s equity, and reduce the
resources required for building a new brand.3 Successful brand extension aligns with
the concept of brand portfolio management, wherein firms strategically manage a set
of related brands to optimize overall brand equity.4
Brand extensions also enable brands to diversify their product portfolios while
maintaining a cohesive brand identity.5 Thus, extensions allow brands to address
changing customer needs, tastes, preferences, while remaining relevant. Scholarly
literature highlights the significance of congruence between the parent brand’s
image and the extended product category for successful brand extension.6 7 In this
context, brand extension's effectiveness hinges on the brand’s ability to extend its
core attributes and associations into the new domain.8 For instance, initially fo-
cused on young consumers, Lego has successfully extended the brand through ex-
tensions that target adults (Lego Technic), architecture students (Lego Architecture),
women (Lego Friends) and very young kids (Lego Duplo).9 The brand has also used
several thematic extensions by collaborating with very successful Hollywood fran-
chises such as Star Wars, Disney, Marvel and DC Comics. This has even led to suc-
cessful movie and television franchises as well.10 In addition, Lego has extended the
brand in cultural domains by collaborating with popular Korean pop band BTS and
the Museum of the Modern Art (MoMA), as well as popular brands including Ikea,
Adidas and Levi’s.11
As discussed, brand extension serves as a crucial strategy within brand manage-
ment. It harnesses the power of established brand equity to facilitate growth, re-
duce risk and enable diversification. By strategically extending into new categories,
companies can cater to evolving consumer preferences while leveraging the posi-
tive perceptions associated with their parent brands. However, effective execution
requires alignment between the parent brand and the extended offering, emphasiz-
ing the need for congruence in brand attributes and associations. Overall, brand
extension underscores the dynamic interplay between brand equity, consumer per-
ceptions and strategic innovation in the realm of brand management. In the next
sections, we discuss different types, drivers, advantages and disadvantages of brand
extensions.
Brand extension 143
Types of brand extensions – category

and line extensions
As discussed in the previous section, brand extensions offer a less risky and less
resource-intensive way for firms to enter into new or existing markets with new
products. When a firm introduces a new brand, it has two choices: create a direct
brand (e.g. BMW 3 series) or a sub-brand (e.g. Volkswagen Polo). In the above cases,
BMW and Volkswagen are called parent brands. Over time, these sub-brands can
also have their own extensions. For instance, Volkswagen Polo has 23 different ex-
tensions depending on the engine type, engine size, transmission type, colour and
other features.12 Thus, brand extensions can lead to substantial complexities for
firms as new and innovative specifications are added. There are two major categories
of brand extensions: category extension and line extension.
Category extension
Category extension involves introducing new products or services within a related
or unrelated product category. For category extensions, the brand generally aims
to maintain its core attributes. An example is Toyota’s extension from manufactur-
ing only petrol or diesel automobiles to producing hybrid technology, such as the
Toyota Prius. This expansion allowed Toyota to leverage its reputation for fuel-
efficient vehicles to create a new product line that addresses environmental con-
cerns. Such related brand extensions can help a brand increase its market presence
and market share. However, at times, it can also cannibalize the other extensions
that exist within a parent brand’s line up.13 For example, Prius could cannibalize
the market of Toyota Corolla and vice versa. Many brands also extend themselves
in unrelated categories and can be very successful. For example, Amazon, the on-
line retailer which started in 1994, decided to move into the cloud computing
space almost a decade later. However, over time, Amazon Web Services (AWS) has
become a global leader in this space and AWS generates more than 70 per cent of
operating profits for Amazon (the parent brand).14 Amazon has similarly ventured
into a variety of category extensions with Kindle (e-reader), audio books (audible),
mobile phone, tablets and other electronic devices (Fire and Alexa), electronic
equipment (Amazon Basics), entertainment and gaming (Amazon Prime and
Twitch), home security (Ring), domestic products including baby wipes, diapers
and vitamin supplements (Amazon Elements), dog food (Wag) and groceries
(AmazonFresh), among many others.
Line extension
Line extension occurs when a brand introduces variations or different versions of an
existing product within the same product category. As consumer preferences evolve,
a brand may add new features and remove existing features. To highlight this novelty
a brand may create a line extension to benefit from the established brand recognition.
For example, with consumers becoming aware of the sugar content in Coca-Cola
products coupled with the spread of health consciousness among wider population,
the brand introduced a variety of line extensions including Diet Coke, Coca-Cola
Zero Sugar and Coca-Cola Zero Sugar Zero Caffeine. Further, the brand has
introduced a number of different sizes from 250ml to 2ltr bottles and different types
of packaging (i.e. glass, plastic bottles and cans). These variants extend the product
line while keeping the brand consistent and recognizable.
Line extensions are carried out through a lens of product feature changes as
observed in the example of Coca-Cola above. However, some brands use other
mechanisms such as price to extend the brand. For instance, Tesla Motors has c reated
entry-level options such as Model 3 and Model Y, mid-priced Model S and h igher-tier
Model X. Tesla has also announced a sports car version, Tesla Roadster, which is
expected to be priced above $200,000.15 This is called vertical brand extension,
which is aimed at catering to different socio-economic segments of the market. When
a brand introduces an extension that appeals to the higher-income segment of the
market, it is called upward extension. On the other hand, if the brand extension
caters to the lower socio-economic segments, it is identified as downward extension.
For example, to fight the deep discounters such as Lidl and Aldi, in the UK groceries
market, Tesco introduced downward brand extensions through Tesco Everyday
Value and Tesco Discount. Moreover, to appeal to the less price-conscious consumers,
Tesco developed an upward extension with its Tesco Finest range, which is priced at
similar price point as some other national brands.
Brand extensions are quite common globally. According to the latest research,
almost 70 per cent of new products in the consumer-packaged goods market in the
US are brand extensions.16 A study by market research firm Nielsen of top brands in
46 FMCG categories and 82 brand extensions in food and non-food categories,
shows that in addition to promoting brand equity, brand extensions can grow
incremental sales up to 38 per cent and contribute as much as 30 per cent to parent
brand sales.17 Moreover, the study also found that FMCG brand extensions were five
times more successful than new product launches. In the next section, we discuss
the drivers of brand extension.
Brand extension 145
Drivers of brand extension

While a large number of new product introductions are brand extensions, only 30
per cent of them survive the first two years.18 Given that brand extension failure rate
is nearly 70 per cent, it is vitally important for brand managers to obtain insights on
the drivers for brand extension success. A plethora of academic studies over the past
30 years have attempted to understand the factors that drive brand extension suc-
cess.19 Figure 9.1 shows a conceptual framework that captures these drivers.
One of the foremost drivers of brand extension success is parent brand equity.
This is reflected in consumer attitude, familiarity, quality perceptions and loyalty
towards the parent brand.20 As consumers may not be familiar with the new brand
extension, they cannot make informed judgements regarding the new offering.21 In
such circumstances, they would use existing heuristics (knowledge structure or
schema) attached with the parent brand to make buying decision. Another critical
factor that drives brand extension success is extension fit, which reflects the per-
ceived similarity between an extension and its parent brand. The extension fit is a
multifaceted construct which comprises of usage fit (shared product usage contexts),
goal fit (shared associations organized around common goals), feature or product fit
(shared tangible product characteristics) and concept or brand fit (shared abstract
brand images).22 If the extension fit is high, consumers are more likely to retrieve and
transfer parent brands related associations to the brand extension.
Examples of extension fit
Usage fit
Usage fit refers to a brand extension where the new product is used in a similar way
as the existing product. An example of usage fit is BMW’s extension from luxury cars
to motorcycles (see Figure 9.1). Both products cater to a premium and performance-
oriented audience, and the usage context of driving aligns well with the brand’s
identity.
Goal fit
Goal fit involves extending the brand to products that share a common purpose or
goal with the existing brand. An instance of goal fit is Patagonia’s expansion into the
food industry. Known for its commitment to environmental sustainability, Patagonia
launched Patagonia Provisions, a line of food products that align with the brand’s
values of responsible sourcing and ethical consumption.
Figure 9.1 BMW’s extension from luxury car to motorcycle based on usage fit
SOURCE BMW
Figure 9.2 Apple uses simple design across devices based on feature and product fit
SOURCE Photo by Julian O’hayon on Unsplash

Brand extension 147
Feature/product fit
Feature fit occurs when the new product shares certain features or characteristics
with the existing brand. An example of feature fit is Apple’s extension from
computers to smartphones (see Figure 9.2). Apple’s reputation for innovation, design
excellence and user-friendly interfaces translated seamlessly into the smartphone
category with the introduction of the iPhone.
Concept/brand fit
Concept fit involves extending the brand to products that share a common underlying
concept or essence. Disney, a well-established brand in the entertainment industry,
extended its brand into the streaming service market with the launch of Disney+. The
concept fit here lies in Disney’s core identity of providing family-friendly, high-quality
content. Disney+ offers a platform for streaming a wide range of Disney movies, TV
shows and original content that aligns with the brand’s concept of wholesome
entertainment for all ages.
As already discussed, a large number of brand extensions fail, and the concept of fit
remains a critical factor. For example, Colgate, a leading brand in oral care, at-
tempted to extend its brand into the frozen food market in the 1960s with ‘Colgate
Kitchen Entrees’ (for example, see Figure 9.3). However, the brand fit between tooth-
paste and frozen food was unclear and confusing to the consumers, resulting in
scepticism and lack of credibility. Consumers found it difficult to associate a tooth-
paste brand with food products, leading to the failure of this brand extension at-
tempt. Similar famous examples exist with the brand Virgin introducing cola in the
UK market, and Zippo, the famous lighter brand, launching its clothing range.
Beyond brand fit, there are many other product fit failure examples. For instance,
in the 1990s Harley-Davidson attempted to extend into the perfume market with a
fragrance line. This product fit failure occurred because the essence of a motorcycle
brand did not seamlessly translate into a completely different product category like
perfume. The disconnect between the rugged image of Harley-Davidson motorcycles
and the elegance and subtlety associated with perfumes resulted in consumer confu-
sion and an inability to resonate with the new product. Similarly, when Cheetos, a
popular snack brand, tried to extend its product line into the cosmetics market with
‘Cheetos Lip Balm’, the extension failed. Cosmopolitan magazine, a well-known
woman’s lifestyle magazine, extended its brand into the yogurt market, which also
encountered failure. The above examples highlight the importance of carefully evalu-
ating whether the extension fits with the parent brand. In a meta-analysis involving
more than 150 research papers over the past 30 years, scholars show that strength of
Figure 9.3 Example of unsuccessful brand extensions
Reproduced with permission
extension fit could increase the success of brand extension with a probability of 61.4
per cent. Thus, brands should ensure that their new offering aligns with their core
attributes, values and consumer perceptions to create a meaningful and successful
extension.
Other factors affecting brand extension

Brand extension success depends on several other factors beyond the parent brand’s
equity and extension fit. From a parent brand perspective, the industry in which the
parent brand operates, the prestige of the parent brand and the variability of prod-
ucts already associated with the brand. For example, an automobile brand will find
it difficult to move into the cola and drinks sector. However, many luxury brands are
able to create brand extensions across categories. For example, Armani, while pre-
dominantly known for its ready-to-wear (Emporio Armani, Armani Jeans) and haute
couture (Armani Collezioni) range, is also in the business of hotels and luxury villas
(Armani Hotels), eyewear, leather goods, among others.
For the success of their brand extensions, brands use different cues to make the par-
ent brand more accessible in consumers’ minds. For example, Disney uses its name in
its theme parks (e.g. Walt Disney World Resort, Disneyland Paris, Hong Kong
Disneyland), streaming service (e.g. Disney+, Disney Channel, Disney Junior) and
other assets.23 Such cues allow the benefit of the parent brand equity transfer to ex-
tended products. However, if the brand extension is highly innovative and has its own
cues that can distinguish it, the signalling role of parent brand equity becomes less
relevant.24 For example, the Star network, which runs more than 70 different TV
Brand extension 149
c hannels in India, has 790 million viewers a month across India and in more than 100
countries, has been a subsidiary of Disney since 2017. However, most of its channels
are still widely known by their original names and Disney’s name is not incorporated
everywhere. Similarly, ESPN is 80 per cent owned by Disney. However, the Disney
brand is loosely associated with it.
Consumers’ characteristics, such as their level of involvement, age and gender, can
also be a critical factor in brand extension success. For example, some older consum-
ers may find learning and processing new information more difficult. Hence, they
rely on existing parent brand associations which strengthen the signalling associated
with the brand extension and facilitate categorization processes.25 Scholars argue
that women and men process information differently and employ different levels of
elaboration when analysing new stimuli.26 Thus, by understanding their target seg-
ment socio-demographics, brand managers can employ appropriate positioning
strategies to successfully extend their brand.
Brands that defy extension logic
When a brand becomes too identifiable as an exemplar for a particular category of

product, extensions become difficult to achieve. For instance, there are brands that
have become synonyms for a particular category of product or service such as
Xerox (for photocopying), Google (for online search), Bubblewrap (wrapping), Uber
(for taxi) and Hoover (for vacuum cleaning). These brands have adopted different
strategies to extend their brands by creating a different parent or sub-brand. For
example, Google is now part of a parent brand, Alphabet. Moreover, it has created
several sub-brands that have grown to become global brands in their own
categories such as Android (smartphone software), Pixel (smartphone hardware),
YouTube (video streaming) and Nest (smart products).
There are also brands like Virgin that have defied the extension logic by
expanding into many related and unrelated categories. Started as Virgin Records, a
music company in the UK in 1970, Virgin has a vast portfolio of brand extensions that
encompass health and lifestyle (Virgin Active), airline (Virgin Atlantic, Virgin Atlantic
Holidays), hospitality (Virgin Experience Days, Virgin Hotels, Virgin Limited Edition,
Virgin Voyages), mobile communications (Virgin Mobile), music (Virgin Music, Virgin
Radio, Virgin Records), retail (Virgin Megastores, Virgin Gift Card, Virgin Wines),
banking (Virgin Money) and space travel (Virgin Galactic) among many others.27
The parent brand ‘Virgin’ is associated with approximately 60 businesses with 49
sub-brands using the Virgin name. However, these extensions have not always been
successful either. For instance, there have been a large number of failed ventures
such as Virgin Nigeria (Airline), Virgin Cola (soft drinks), Virgin Vodka (spirits), Virgin
Brides (retail), Virgin Cinemas (entertainment) and Virgin Rail (transport), etc.
One of the reasons Virgin is able to expand into so many product is because of its
maverick founder, Richard Branson. The brand is loosely associated with the values
of youthfulness, adventure, fun and rebelliousness. These values are constantly
projected through a variety of brand communications including the image of Richard
Branson.
Advantages and disadvantages

of brand extension
Brand extension remains one of the most preferred market expansion strategies de-
spite the high failure rate of new extensions. There are several advantages and disad-
vantages associated with brand extension strategy, as outlined in Tables 9.1 and 9.2.
Successful brand extensions can not only be advantageous for the brand extension
Table 9.1 Advantages of brand extension with examples
Advantages of brand
extension Examples
1. Leverages existing brand Apple’s extension from computers to smartphones

equity and recognition. with the iPhone.
2. Reduces costs by utilizing Coca-Cola introducing Diet Coke and Coca-Cola Zero
brand awareness. Sugar as line extensions.
3. Mitigates risk through Amazon’s extension into cloud computing with
consumer trust. Amazon Web Services (AWS).
4. Enhances customer loyalty Starbucks’ extension into the Starbucks Rewards
and retention. loyalty programme.
5. Achieves economies of scale Procter & Gamble’s brand extension strategy for Tide
by sharing resources. detergent and Tide To Go stain remover.
6. Allows diversification without Nestlé’s extension into the pet food market with the
losing core identity. Purina brand.
7. Encourages cross-promotion Calvin Klein’s brand extension from a premium fashion
between different product brand to perfumes, home furnishings and other
lines. categories.
8. Facilitates quick market entry Tesla’s extension into the electric truck market with
with a recognized brand. the Cybertruck.
9. Builds consumer trust and Lego’s extension into video games with Lego-themed
acceptance faster. games.
10. Enhances brand perception Google’s extension into various technology areas like
as innovative. self-driving cars and AI.
Brand extension 151
Table 9.2 Disadvantages of brand extension with examples
Disadvantages of
brand extension Examples
1. Risk of brand dilution. Kodak’s extension into printers and ink products.
2. Misfit between parent brand Colgate’s extension into frozen food (Colgate
and new category. Kitchen Entrees).
3. Potential cannibalization of sales. Kellogg’s extension of Nutri-Grain into cereal bars.
4. Negative perceptions transferred. BP’s extension with ‘Beyond Petroleum’ criticized
for greenwashing.
5. Difficulty in creating distinct Harley-Davidson’s extension into the perfume
positioning. market.
6. Dilution of brand image. Virgin’s extension into various industries including
Virgin Cola.
7. Potential for channel conflicts. P&G’s extension of Tide into the dry cleaning
business.
8. Complexity in managing Disney’s extension into Disney+ streaming
multiple lines. services.
9. Diversion of resources from Heinz’s extension into coloured ketchup.
core business.
10. Legal issues related to Microsoft’s extension of the Windows brand into
trademark conflicts. Windows Phone.
but the parent brand as well. For instance, Apple’s extension into the smartphone
and later a variety of other electronic products market has made it one of the largest
companies in the world over the past 15 years in terms of its valuation.28 Similarly,
Adidas Originals allowed Adidas to extend from footwear to clothing. However, on
the other side it can hurt the parent brand sales also. For example, Cadbury’s, which
is known for its chocolates and candy products globally, launched instant mashed
potato brand, Smash, which was successful initially. However, over time due to per-
ceived quality issues associated with it, the extension had an effect on the parent
brand quality association as well. So, after 20 years of introducing the instant mashed
potato brand, Cadbury’s eventually sold the Smash brand.
Brand extension – spillover effects

An important reason why brands employ extension strategy is to take advantage of
the parent brand equity. The parent brands want the substantial equity that has gar-
nered in the market to reflect in their brand extension. Consumers, when exposed to
the brand extension, evaluate the new extension based on their pre-existing attitudes
regarding the parent brand.29 Based on this evaluation, they form their opinions re-
garding the brand extension and also regarding the parent brand. When these evalu-
ations of brand extension reflect back in consumer attitudes towards the parent
brand, it is termed attitude spillover. Attitudes are relatively stable psychological
constructs.30 Because of this stability, pre-existing attitudes toward the parent brand
will be related highly to post-exposure attitudes toward that brand.31 This cognitive
transfer may lead to positive or negative change in the attitude towards the parent
brand due to the associative network in consumers’ minds.32
The spillover effect, thus, can be positive as well as negative. This phenomenon is
particularly pronounced when consumers perceive strong connections or a clear the-
matic fit between the entities (i.e. the parent brand and the brand extension), result-
ing in a cognitive shortcut that further boosts the existing mental associations with
the parent brand. For example, BMW extended the brand into the electric vehicle
(EV) market with the BMW i series. BMW already had a reputation for luxury, per-
formance and engineering excellence. With the introduction of i series EVs and its
success, the parent brand BMW has gained credibility as an automobile brand in
sustainable mobility through positive attitude spillover. An example of when attitude
spillover can be negative is Johnson & Johnson (J&J), one of the world’s largest
healthcare companies with a large portfolio of baby-care products that are trusted
by parents worldwide. In 2018, J&J initiated a voluntary recall of its popular
Johnson’s baby powder due to asbestos contamination in the USA.33 This resulted in
substantial negative spillover for the parent brand J&J in terms of its stock market
valuation, legal compensation and reduction in market share.34
Chapter summary
In this chapter we explored the important concept of brand extension. We learnt that
brand extension is a comparatively less risky approach for introducing new brands;
however, its success rate is not substantially different to other new product launches.
The chapter also explored the various types of brand extensions including category
and line extensions and their sub-types such as vertical and horizontal extensions.
Brand extension success relies on a number of factors including parent brand equity,
extension fit, brand communications and consumer factors. There is no successful
recipe for brand extension success as it depends on the interaction of a large number
of market forces. There are a number of advantages and disadvantages of brand
extension. Moreover, brand extensions can increase or decrease parent brand equity
through positive or negative spillover effects respectively. Overall, brand extension
remains one of the most popular strategies to introduce new products in the market.
Brand extension 153
Key concepts
●● Brand extension
❍❍ Category extension
❍❍ Line extension
–– Vertical and horizonal brand extension
●● Parent brand equity
●● Brand extension fit
●● Brand extension drivers
●● Spillover effects
Exercise questions
1 Explain brand extension and its importance for brand managers.
2 Describe different types of brand extensions with examples.
3 What are the major drivers of successful brand extension? Explain with examples.
4 There is no universal recipe for successful brand extension. Critically reflect on
this statement.
5 Choose any three multinational brands and identify their brand extensions. What
new extensions would you recommend for these parent brands?
6 What are the advantages and disadvantages of brand extension?
7 Brand extension can create positive or negative spillover for the parent brand.
Explain your viewpoint in detail with examples.
8 Review and discuss the key managerial takeaways from the following paper: Singh,
J, Scriven, J, Clemente, M, Lomax, W and Wright, M (2012) New brand extensions:
Patterns of success and failure, Journal of Advertising Research, 52 (2), 234–42.
CASE STUDY The risks and rewards of brand extensions through

innovations in consumer products
Innovation-based brand extension is crucial for consumer products companies to drive

growth, take market share from competitors and boost profit margins. However, most new
product innovations fail to deliver sustained sales and profits.
The opening of the Museum of Failure in Sweden sheds light on a crucial paradox in
the consumer products industry – the relentless pursuit of innovation amidst a high rate of
product flops. While companies spend billions on research and development, hoping for
‘new and improved’ products to boost market share and profits, the museum serves as a
stark reminder that success is far from guaranteed.
This case study analyses examples of successful and failed brand extensions based on
innovations in the consumer products industry. It examines the product development
process, pricing strategies and market reception over time to draw insights about
innovation best practices.
The pressure to innovate stems from several factors including stagnant core markets,
which compel companies to seek new avenues for growth. Additionally, established
players like L’Oréal rely on innovation to maintain their share in competitive markets.
The spectrum of innovation showcased in the museum ranges from seemingly bizarre
brand extensions like Lay’s cappuccino-flavoured crisps, to packaging changes like
Marmite’s upside-down squeezy bottle. Similarly, cautionary tales like Unilever’s Persil
Power detergent, which destroyed clothes while removing stains, or Coca-Cola’s Blak and
Life beverages, which failed to capture consumer imagination are reminders that even
global brands can get it wrong. However, truly impactful brand extensions, like Nescafé’s
Nespresso capsule pods, are rare and such product innovations take years to develop.
Some brand extensions can initially succeed, and then fail as well, when the company
fails to take into account the brand’s key message and usage.
Reckitt Benckiser (RB) is a global consumer health, hygiene and nutrition company. Its
Scholl brand focuses on foot care products, holding a significant global market share. In
2014, Scholl launched a breakthrough electronic foot exfoliation device called the Velvet
Smooth Express Pedi which uses spinning rollers to remove dead skin. Priced at $39, it
was cheaper and more effective than existing manual scraping tools for removing hard
skin on feet. The pedi device was a huge success and Scholl revenues from 2013 to 2015
quadrupled to €810 million. It captured a significant market share by changing consumer
behaviour and habits around foot care rather than just attracting brand switchers. The
success accounted for nearly half of RB’s health division growth during 2014 and 2015.
In 2016, Scholl introduced a new Wet & Dry Pedi model with enhanced waterproof
features at a 50 per cent price premium. The market rejected it, with revenues dropping
11 per cent in 2016. RB CEO Rakesh Kapoor stated they had ‘over-innovated’ too quickly
after the original product and priced too high, failing to understand consumer willingness
to pay. The failure represented the majority of RB’s slowing sales growth in 2016.
While innovation is critical for growth in consumer products, companies must carefully
balance risks and rewards. They should focus innovation on shifting consumer habits,
avoid too-frequent incremental product revamps and ensure they price new offerings
appropriately based on the value proposition. When done right, innovation can deliver
step-function revenue growth and profits. But mistakes can lead to dramatic market
failure and brand damage.
Brand extension 155
Case questions
1 What are the major factors behind the unsuccessful brand extensions identified in this
case?
2 If you were to recommend a company planning a brand extension, what considerations
would you keep in mind for the success of the extension?
3 Based on the various brand extensions failures highlighted in the case, critically reflect
on the following statement: Brand extension failures are not industry dependent.
4 While innovating, a company should keep sight of customer needs and trends. Reflect
on the above statement, suggesting how a brand can manage its new extensions.
Endnotes
1 Broniarczyk, S M and Alba, J W (1994) The importance of the brand in brand
extension, Journal of Marketing Research, 31 (2), 214–28
2 Loken, B, Joiner, C and Houston, M J (2023) Leveraging a brand through brand
extension: A review of two decades of research, Brands and Brand Management,
Psychology Press, New York, pp 11–42
3 Pitta, D A and Katsanis, L P (1995) Understanding brand equity for successful brand
extension, Journal of Consumer Marketing, 12 (4), 51–64
4 Peng, C, Bijmolt, T H, Völckner, F and Zhao, H (2023) A meta-analysis of brand
extension success: The effects of parent brand equity and extension fit, Journal of
Marketing, 87 (6), 906–27
5 Keller, K L and Lehmann, D R (2006) Brands and branding: Research findings and
future priorities, Marketing Science, 25 (6), 740–59
6 Aaker, M D (1990) Brand extensions: The good, the bad, and the ugly, MIT Sloan
Management Review, 31 (Summer), 47–56
7 Völckner, F, Sattler, H, Hennig-Thurau, T and Ringle, C M (2010) The role of parent
brand quality for service brand extension success, Journal of Service Research, 13 (4),
379–96
8 Batra, R, Lenk, P and Wedel, M (2010) Brand extension strategy planning: Empirical
estimation of brand–category personality fit and atypicality, Journal of Marketing
Research, 47 (2), 335–47
9 https://sundaybricks.com/2018/07/04/lego-brand-extension/ (archived at https://perma.
cc/4EY5-VKBN)
10 https://en.wikipedia.org/wiki/List_of_Lego_films_and_TV_series (archived at https://
perma.cc/S5AB-9JA8)
11 www.prestigeonline.com/sg/lifestyle/culture-plus-entertainment/most-iconic-lego-
collaborations/ (archived at https://perma.cc/EMV6-UHG3)
12 www.cartrade.com/volkswagen-cars/polo/faqs/how-many-versions-are-available-for-
volkswagen-polo/ (archived at https://perma.cc/G5NV-ADAL)
13 Lomax, W, Hammond, K, East, R and Clemente, M (1997) The measurement of

cannibalization, Journal of Product and Brand Management, 6 (1), 27–39
14 www.fool.com/investing/2022/07/07/aws-chief-says-amazons-most-profitable-
segment-is/ (archived at https://perma.cc/BN5U-J4EF)
15 https://carbuzz.com/cars/tesla/roadster (archived at https://perma.cc/4QYX-S4QL)
Marketing, 87 (6), 906–27
17 https://timesofindia.indiatimes.com/business/india-business/fmcg-brand-extensions-five-
times-more-successful-than-new-product-launches-study/articleshow/17402963.
cms?frmapp=yes&from=mdr (archived at https://perma.cc/6PP5-28NK)
18 https://nielseniq.com/global/en/insights/analysis/2019/bursting-with-new-products-
theres-never-been-a-better-time-for-breakthrough-innovation/ (archived at https://
perma.cc/AP7K-YY6S)
19 Singh, J, Scriven, J, Clemente, M, Lomax, W and Wright, M (2012) New brand
extensions: Patterns of success and failure, Journal of Advertising Research, 52 (2),
234–42
20 Yoo, B, Donthu, N and Lee, S (2000) An examination of selected marketing mix
elements and brand equity, Journal of the Academy of Marketing Science, 28, 195–211
21 Erdem, T and Swait, J (2001) Brand equity as a signaling phenomenon, Journal of
Consumer Psychology, 7 (2), 131–57
22 Martin, I M, Stewart, D W and Matta, S (2005) Branding strategies, marketing
communication, and perceived brand meaning: The transfer of purposive, goal-oriented
brand meaning to brand extensions, Journal of the Academy of Marketing Science,
33 (3), 275–94
23 https://en.wikipedia.org/wiki/List_of_assets_owned_by_the_Walt_Disney_Company
(archived at https://perma.cc/F6TZ-ZARA)
Marketing, 87 (6), 906–27
25 Ibid.
26 Wang, P, Xiong, G and Yang, J (2019) Serial position effects on native advertising
effectiveness: Differential results across publisher and advertiser metrics, Journal of
Marketing, 83 (2), 82–97
27 www.virgin.com/about-virgin/virgin-group/overview (archived at https://perma.cc/
QN5V-STZX)
28 www.ft.com/content/c3ad748f-c910-4a3c-8026-32890a6f3061 (archived at https://
perma.cc/S7MH-7SD6)
29 Aaker, D A and Keller, K L (1990) Consumer evaluations of brand extensions, Journal
of Marketing, 54 (1), 27–41
30 Ajzen, I and Fishbein, M (1977) Attitude-behavior relations: A theoretical analysis and
review of empirical research, Psychological Bulletin, 84 (5), 888
31 Raufeisen, X, Wulf, L, Köcher, S, Faupel, U and Holzmüller, H H (2019) Spillover
effects in marketing: Integrating core research domains, AMS Review, 9, 249–67
Brand extension 157
32 Simonin, B L and Ruth, J A (1998) Is a company known by the company it keeps?

Assessing the spillover effects of brand alliances on consumer brand attitudes, Journal
of Marketing Research, 35 (1), 30–42
33 https://edition.cnn.com/2019/10/18/health/johnson-and-johnson-baby-powder-recall-
bn-trnd/index.html (archived at https://perma.cc/68KF-WDAQ)
34 www.theguardian.com/business/2023/jul/19/johnson-johnson-cancer-patient-lawsuit
(archived at https://perma.cc/9H4W-T6KW)
158
Brand alliance 10
or co-branding
Overview
In this chapter, we first explain the strategic concept of co-branding and its recent
popularity alongside its benefits and risks. We then explain the conditions of success
for co-branding, based on research insights. In the following section, we include the
theories underpinning co-branding from a consumer perspective. We also present the
notion of positive and negative perceptual spillovers due to co-branding. The final
section deals with the recent application of co-branding in the form of cause-brand
alliance.

●● Understand the concept of brand alliance or co-branding

●● Comprehend the advantages and disadvantages of co-branding, including spillover
effects
●● Identify the drivers for successful co-branding
●● Know about the psychology of co-branding
●● Gain insights into cause-brand alliances
Defining co-branding
Co-branding or brand alliance is a strategic branding approach that involves the col-
laboration of two or more distinct brands in the creation and promotion of a new
product or service.1 This approach leverages the established equity, awareness and
associations of each partner brand to create a synergistic effect that enhances cus-
tomer perceptions, credibility and market reach. Co-branding manifests in various
forms, such as ingredient co-branding (‘Intel Inside’, among various personal
Brand alliance or co-branding 159
computers), promotional co-branding (McDonald’s ‘Happy Meals’ with Disney

toys), complementary co-branding (Nestlé and Starbucks coffee products), advertis-
ing alliances (Kellogg and Tropicana jointly advertising each other’s products), bun-
dling (Microsoft including McAfee anti-virus in its software), dual branding (Avis
and Budget promoting each other together) and product combinations (Betty
Crocker and Hershey’s launching a milk chocolate together). The above forms of
co-branding may overlap in their scope and function. For instance, dual branding
may involve an advertising alliance and promotional co-branding as well. Overall,
the aim of the involved brands is to leverage each other’s brand equity.
Co-branding capitalizes on the combined equity of the two brands to yield a
more potent and memorable impact on consumers.2 In other words, in the context
of co-branding the sum of the combined brand assets is greater than the parts of
the individual brands.3 In co-branding, partners selectively integrate their
associations to create a congruent narrative, influencing consumers’ perceptions of
product quality, value and authenticity. For example, Dell computers use Intel
processors to signal the high quality of its PCs, with the Intel logo prominently
displayed on the computer.
Benefits and risks of co-branding

Academic researchers find that co-branding allows collaborating brands to leverage
their brand associations in a more cost effective and less risky manner, as compared
to traditional brand extension strategies.4 Thus, there are a number of benefits of
co-branding. Research suggests that co-branding results in increased brand aware-
ness and access to new markets, and it can lead to a unique market positioning,
resonating with a broader audience.5 Moreover, complementary expertise and re-
sources can result in improved product quality and innovation, ultimately enhancing
customer satisfaction and loyalty.6 As discussed in the previous chapter, brand exten-
sions are not always successful, and more importantly, many brands cannot extend
in different product categories due to their equity being too strongly attached to a
particular product category. For example, McDonald’s attempt to enter into the hos-
pitality business by launching four-star hotels in Europe failed.7 Thus, brand exten-
sions, while remaining a preferred method of expanding into new products and new
markets, is a highly saturated market phenomenon and does not lead to success in
all cases. Co-branding, on the other hand, allows brands to avoid such risks by ben-
efitting from the established images and associations of the partners. Due to these
unique advantages, co-branding is observed in a variety of industries such as food
and drink, retailing, air travel and financial services. In the last three decades, there
has been a substantial increase in the number of products launched as an alliance of
two brands. Notable examples include Nike and Apple’s Sports Kit, Fiat and Mattel’s
limited-edition Barbie car, and Coca-Cola and OPI’s line of nail lacquers.
There are arguably two most commonly cited benefits of co-branding. The first
pertains to obtaining assets, both tangible and intangible, and the utilization of col-
lective resources and skills, which help brands enter novel markets and consumer
bases. The second benefit involves maximization of brand value, through augment-
ing revenue streams and strengthening customer-centric brand equity.8 These benefits
can be observed in any alliance context. For example, when a high-ranked university
enters into an alliance with a low-ranked university (e.g. a dual degree), the added
value of the dual degree aids the lower ranked university.9 Thus, when an unknown
or lesser-ranked brand partners with a highly reputable brand, consumers perceive
the alliance based product to be of high quality and demonstrate greater choice con-
fidence.
Since brand alliances involve utilization of collective resources and skills, from a
financial perspective they are cheaper to execute compared to new product launches
and in some cases brand extensions. Co-branding partners can combine resources;
thus, the overall cost of promotion and other overheads are reduced for each part-
ner.10 For example, British Petroleum (BP) and Marks and Spencer’s (M&S) have
been alliance partners in the UK since 2005.11 The brands share their equity and re-
sources instilling confidence in consumers regarding quality of the products. By com-
ing together, both brands are able to offer customers greater convenience and value.
Similarly, in B2B markets co-branding leads to greater benefits for the lower equity
brand.12 Moreover, the experience of primary partner plays an important role and
could lead to substantial effect on the quality evaluations,13 enhanced outcomes for
customers14 and stock returns15 of the co-branded products.
Volvo and Daimler AG join hands to develop fuel cell technology
A notable example of B2B brand alliance from Europe in recent years is the
collaboration between Volvo Group and Daimler AG to develop fuel cell technology
for heavy-duty commercial vehicles. In March 2021, these two prominent European
automotive companies announced their intention to form a joint venture, named
‘cellcentric GmbH and Co. KG’, with the aim of advancing hydrogen-based fuel cell
systems.16
This collaboration aligns with the companies’ shared commitment to sustainable
transportation solutions. By pooling their resources, knowledge and expertise, Volvo
Group and Daimler intend to accelerate the development and deployment of
hydrogen fuel cell technology in the commercial vehicle sector. This technology
holds the potential to significantly reduce carbon emissions and contribute to a more
environmentally friendly transport industry.
The partnership leverages the strengths of both companies, with Volvo Group’s
experience in vehicle development and Daimler’s expertise in fuel cell technology, to
create a synergistic effect. The alliance allows them to share research and
development costs, mitigate risks and work towards a common goal that benefits not
only their individual brands but also the broader transportation industry and the
environment.
This example underscores how B2B brand alliances in Europe are increasingly
focusing on innovation and sustainability, combining the strengths of different
companies to drive technological advancements and address global challenges.
Academic research shows that co-branding has clear revenue generation and cost
benefits. For example, when a manufacturer enters into an alliance with a supplier, it
can lead to significant lower manufacturing costs, increased innovation and lower
prices for the manufacturer. Similarly, it also increases the supplier profits. The alli-
ance, in turn, can increase economies of scale and reduce the chances of competitors’
entry.17 Research evidence also suggests that co-branding can enhance brand sales
and overall market share without the risk of cannibalizing the original brands.18
With the advantages of co-branding highlighted earlier, both academic research-
ers and businesses are keen to grasp its benefits; however, there is a lack of knowl-
edge on the risks associated with this branding strategy.19 Some of the risks inherent
to co-branding pertain to the differences in strategic visions, legal and financial disa-
greements, or incompatible brand synergies.20 A failure involving a partner brand
can have undesirable consequences for the co-brand, as the alliance can be viewed
negatively by consumers. This can result in customer dissatisfaction, negative word-
of-mouth and reduction in brand loyalty.21 Academic research also shows that nega-
tive events affecting any partner brand can affect the co-brand when the alliance is
viewed as equally culpable for the offence. When the alliance is linked directly to the
competence failure of an organization, consumers are likely to transfer this negative
association to the other brand in the alliance.22 For example, Southwest Airlines suf-
fered negative publicity following a scandal and media hype surrounding the alleged
treatment of captive whales by SeaWorld.23 Given the longstanding partnership be-
tween Southwest Airlines and SeaWorld, the scandal led to a 35 per cent decline in
SeaWorld’s share price, public protests and criticism against Southwest Airlines and
resultantly Southwest Airlines terminated the long-term alliance. Similarly, Ford re-
ceived unfavourable media attention in the wake of the tyre scandal affecting its
partner brand, Firestone.24 The Firestone crisis led to the recall of over 20 million
tires, the loss of market value for the partner brands and the termination of a nearly
a 100-year relationship between Ford Motor Company and Firestone.
Beyond the partner brand spillover effects, negative spillover of alliance can also
create memory traces among consumers. Such memory traces and associations can
create unfavourable brand responses for future product launches.25 Such an effect
varies across the three crisis types. Based on controllability and intentionality,
Timothy Coombs classifies crises into three types:
1 preventable (i.e. the brand knowingly breaches the law causing damage to
consumers)
2 accidental (i.e. the brand lacks control over the crisis yet causes damage to
consumers)
3 victim (i.e. the brand unknowingly causes damage to consumers due to the actions
of a third party)26
This crisis typology has also spurred research on crisis response strategies that can
reduce reputational damage for the brands. This is discussed in detail in Chapter 12.
When a co-brand is involved in preventable crises it creates more negative responses
from consumers when compared with accidental crises.27 For example, research
shows that, following a preventable crisis, the non-culpable brand in the alliance
suffers from negative consumer perceptions even when enjoying high equity.28 The
above risks highlight the need for brands to be highly cautious when selecting a
partner brand for a potential alliance. For example, Lego had to end its partnership
with Shell following negative publicity about Shell’s plans to drill in the Arctic, and
Visa was drawn into the corruption scandal involving FIFA.
Currently, little is known in co-branding research regarding partner brands’ fail-
ure to meet objectives, incompatible brand values, partner repositioning and other
financial and legal issues, and to what extent it could attribute to unsuccessful
co-branding partnerships.29 Overall, while co-branding is highly popular in the
marketplace due to its inherent benefits in brand equity, cost savings and consumer
acceptance, it is not devoid of risks. In the next section, we discuss the conditions
that lead to successful co-branding.
Scholarly debate
Lafferty, B A (2007) The relevance of fit in a cause–brand alliance when consumers

evaluate corporate credibility, Journal of Business Research, 60 (5), 447–53
Simonin, B and Ruth, J (1998) Is a company known by the company it keeps?
Assessing the spill over effects of brand alliances on consumer brand attitudes,
Conditions for the success of co-branding

Academic researchers have highlighted four fundamental conditions that can lead to
successful co-branding. These factors are:
1 attitudes toward the partner brands

2 familiarity of the partners
3 the complementarity between the product categories
4 the brand fit between the partners30
While positive attitudes and familiarity of partnering brands among target consum-
ers are vital, product fit (i.e. the extent to which two product categories are compat-
ible) and brand fit (i.e. the consistency of the partners brand image and personality)
are equally important for co-branding success.
When there is a good fit between the brand alliance partners, consumers feel as-
sured about the product.31 Co-branding from brands that are seen as complementary
to each other are viewed more positively than when the brands are not complemen-
tary. For example, in the below Branding in practice when IBM and SAP, two tech-
nology companies, enter into alliance, they represent category level fit or congruence.
Similarly, the McDonald’s and Coca-Cola alliance is seen favourably by consumers
due to the complementarity between their product offering, i.e. fast-food and soft
drink. Fit between brand images can also have a positive influence on co-branding
evaluations.32 For example, Nike and Apple are both seen as highly innovative
brands in their respected product categories. Thus, both possess strong brand images
that complement each other, resulting in successful co-branding. The above exam-
ples also captures the importance of consumer familiarity in co-branding success as
both partners involved in co-branding are well-known.
Managers must be mindful of these four critical factors when deciding on their
co-branding partner. When both partner brands possess positive attitudes in the mar-
ket and have highly familiarity among consumers, but the product and brand fit is
not strong, it can lead to an unsuccessful co-branding. For instance, Forever 21, a
well-known fashion brand, entered into a promotional alliance with Atkins, the low-
carb diet brand. Forever 21 shipped Atkins bars, which are used as a low-carb snacks
for weight loss, with its customer orders. While both brands are well-known within
their categories, there was a poor product and brand fit. Customers were unable to
comprehend the complementarity between these brands and thus many were out-
raged when their plus size outfit orders arrived with a weight loss bar.33 Both brands
apologized to customers and ended their promotional alliance due to the poor prod-
uct and brand fit.
Table 10.1 Successful brand alliances
Co-branding
companies Sector Process
IBM and SAP B2B IBM and SAP have collaborated to integrate their
technologies and offer businesses improved enterprise
solutions. This partnership has combined SAP’s enterprise
software with IBM’s cloud and services, enabling companies
to leverage both brands’ strengths for comprehensive
business solutions.34
Nestlé and B2C These two global giants joined forces to create a line of
L’Oréal nutritional cosmetics in 2002. Nestlé’s expertise in nutrition
and L’Oréal’s knowledge of beauty products culminated in
the ‘Innéov’ brand, offering beauty supplements designed to
enhance skin and hair health. The partnership ended in
2015.35
Nike and Apple B2C Nike and Apple partnered in 2006 to create the Nike+iPod
Sports Kit, a co-branded product that allowed users to track
their athletic performance through their iPods and Nike
footwear. This integration of fitness and technology
showcased the synergy between the two brands.
Coca-Cola and B2C This enduring co-branding collaboration that started in 1955
McDonald’s involves exclusive beverage offerings at McDonald’s outlets.
The ‘McFloat’ and ‘McFizz’ products, made with Coca-Cola
beverages, are tailored for McDonald’s menus, showcasing
the synergy between fast food and soft drink brands.36
Airbus and B2B In the aerospace industry, Airbus and Rolls-Royce
Rolls-Royce collaborated on the A350 XWB aircraft. Rolls-Royce provides
the advanced Trent XWB engines for the Airbus A350,
demonstrating the partnership’s commitment to innovation
and efficiency in aviation technology.37
Siemens and B2B Siemens, a global technology company, collaborated with
Bentley Bentley Motors, a luxury car manufacturer, to integrate
Siemens’ technology into Bentley’s production process. This
partnership enhances Bentley’s manufacturing efficiency,
demonstrating the application of B2B co-branding in
improving industrial processes.38
H&M and B2C The collaboration between Swedish fashion retailer H&M
Versace and Italian luxury fashion brand Versace resulted in a
limited-edition collection that combined Versace’s iconic
designs with H&M’s accessibility. This co-branding effort
made luxury fashion more affordable and accessible to a
broader consumer base.39
(continued)
Co-branding
companies Sector Process
Samsung and B2B Samsung, a South Korean electronics conglomerate, and

Intel Intel, an American technology company, collaborated to
develop advance processors for various devices, including
smartphones and smartwatches. This B2B partnership
illustrates how global technology leaders can join forces to
create competitive solutions.40
Tata Motors and B2B Tata Motors, an Indian automobile manufacturer,
Cummins collaborated with Cummins, an American engine
manufacturer, to produce engines for Tata’s commercial
vehicles. This B2B collaboration showcases how a
partnership between a vehicle manufacturer and an engine
specialist can lead to improved performance and efficiency.41
McDonald’s and B2C McDonald’s and the popular franchise Pokémon collaborated
Pokémon on multiple occasions to offer Pokémon-themed toys with
Happy Meals. This co-branding effort leveraged the appeal of
Pokémon characters to attract young customers and boost
sales.42
Uniqlo and B2C Japanese apparel retailer Uniqlo teamed up with Disney to
Disney create limited-edition clothing collections featuring beloved
Disney characters. This B2C collaboration capitalized on the
nostalgia and popularity of Disney characters to drive
customer engagement and sales.43
Psychological mechanisms of co-branding

With the increasing interest among managers in co-branding, academic researchers
have also engaged in explaining the psychological mechanisms that can lead to suc-
cessful co-branding. Four major theories – namely signalling theory, information
integration theory, associative network theory and attitude accessible theory – have
been regularly employed to explain co-branding success.
As discussed in Chapter 7, signalling plays a fundamental role in brand commu-
nication. People rely on communication signals from partner brands as perceivable
indicators of co-branding that they cannot observe directly. Through partner brands’
communication, consumers can derive quality cues and in turn also prescribe a refer-
ence price for the co-brand. For instance, when Nike and Apple, which are both
premium brands within their categories, enter into an alliance, consumers assume
that the product will be highly innovative, good quality and premium priced. Thus,
partner brand signals can play an important role in co-branding.
Further to signalling, consumers also have pre-conceived attitudes and beliefs

about partner brands. When a co-brand is launched, information integration the-
ory44 suggests that new attitudes are formed through the integration of new informa-
tion regarding the co-brand with the existing attitudes, beliefs and perceptions of the
two partner brands. Academic researchers have shown that judgements about the
brand alliances are likely to be affected by prior attitudes towards each brand and
that can lead to future judgements about the partner brands and the co-brand as
well.45 A key consideration for information integration theory is congruency be-
tween the partner brands. As explained earlier, if the product and brand fit is weak
between the partnering brands, there are greater chances of co-branding failure.
As discussed in Chapter 6, associative network theory is critical for brand posi-
tioning. Similarly, in the case of co-branding, both partner brands have to spend
substantial resources to create a condition wherein consumers can fuse the brand
togethers as a single stimulus. Without creating such linked nodes in consumer mem-
ory structures,46 co-brands would not be successful. For instance, a consumer will
only be able to associate the stimuli relating to the co-brand if the alliance is con-
tinuously reinforced through advertisements, public endorsements, a variety of en-
dorsements and promotions among other brand communications tools. A highly
successful example of such an associative network is Heineken’s sponsorship of
UEFA Champions League. The sonic association created by Heineken with the words
‘the champions’ throughout its advertisements when Champions League games are
played has allowed football viewing consumers to create a strong associated mem-
ory network between the two brands.
While associative network theory focuses on the memory connection, attitude ac-
cessibility theory is related to the strength of attitude. This theory proposes that the
stronger the attitude towards a stimulus, the more easily it is accessed from memory.
Thus, the stronger the attitude towards a brand, the easier it becomes for consumers
to recall the brand.47 According to this theory, the co-brand is evaluated based on
how easily consumers can recall their attitudes towards the partner brands. Moreover,
if one of the partner brands is easily accessible to consumers due to their strong at-
titudes, its related attitudes will take precedence in evaluating the co-brand. Thus,
having equity between partner brands is vitally important.48
Social cause-brand alliance

The discussion in this chapter has predominantly focused on B2B and B2C co-
branding which brings together two for-profit brands. There is an increasing trend of
co-branding involving a for-profit and a not-for-profit brand, creating a cause-brand
alliance. Cause-brand alliances focus on mutual benefits for both brands. The for-
profit partner gains a positive attitude and is perceived as warm and trustworthy by
consumers.49 Similarly, the not-for-profit partner benefits from financial donations
and can increase its reach among a larger group of potential donors.50 Moreover, the
partnership can lead to improved brand awareness, enhanced consumer trust, greater
purchase intentions, higher profits and increased customer loyalty.51
Again, for cause-brand alliance to be successful, the four principles that we high-
lighted earlier in the section ‘Conditions for the success of co-branding’ are pertinent.
More importantly, the fit between the brand and the cause is extremely important for
consumers to accept the alliance. Consumers’ attitudes and behaviours towards cause-
related alliances are favourable when their perceptions of the cause are similar to their
perceptions of the brand.52 For example, the Pampers and UNICEF brand alliance is a
longstanding and impactful partnership between Procter & Gamble’s (P&G) Pampers
brand, a global leader in baby care products, and the United Nations Children’s Fund
(UNICEF), a renowned international organization dedicated to children’s welfare.53 This
collaboration is primarily focused on a critical global issue: maternal and newborn teta-
nus (MNT) elimination. Pampers committed to donating a portion of the proceeds from
the sale of specially marked packs of its nappies to UNICEF. Each pack sold carries a
‘1 Pack = 1 Vaccine’ message, indicating that the purchase of one pack of nappies would
provide funding for one tetanus vaccine for a mother in need. UNICEF, with the financial
support from Pampers, procures and distributes tetanus vaccines to healthcare facilities
in countries where MNT is prevalent. UNICEF works with local health workers and
communities to ensure that pregnant women receive these life-saving vaccines. The part-
nership extends beyond financial contributions. Pampers and UNICEF collaborate on
educational programmes to raise awareness about the importance of vaccination and
safe delivery practices, helping to reduce maternal and newborn tetanus cases. The
Pampers and UNICEF partnership demonstrates how a successful cause-brand alliance
can leverage the reach and resources of a global brand like Pampers to make a tangible
impact on a critical global health issue, aligning with the not-for-profit brand’s mission.
However, academic research also suggests that a cause-brand alliances can be suc-
cessful even when there is an unclear fit.54 The incongruity between the cause and the
brand can be overcome if the alliance can lead to transference of positive emotions
related to the cause on the brand. For example, Masterfoods (the parent company of
Mars, Inc., the producer of M&M’s brand candies) donated 50 cents for every bag of
Pink and White M&M’s sold to the Susan G. Komen Breast Cancer Foundation, a
charitable organization that funds cancer research, education and screening.55 In this
case, M&M, which is a brand of chocolate, has no clear connection as a product or a
brand with cancer research.
A weak fit between the cause and the brand could lead to controversy as well and can
result in negative brand evaluation, wherein consumers question the for-profit brand’s
inferred or ulterior motive. Inferred motive is defined as the extent to which a customer
believes a firm intended to maximize its own interests while engaging in a socially ap-
propriate action that may sway consumer opinions.56 While the brand supports a social
cause altruistically, the action might be perceived as hypocritical. This hypocrisy percep-
tion occurs when the brand’s observed behaviour is inconsistent with what it claims to
be supporting. Such hypocritical behaviour can negatively affect consumer attitude and
behaviour towards the brand.57 For example, Kentucky Fried Chicken (KFC), one of the
world’s largest fast-food chains, launched its ‘Buckets for the Cure’ charitable campaign,
to support breast cancer awareness and research. This initiative involved a pledge from
KFC to donate 50 cents from each specially branded pink bucket of its grilled or Original
Recipe chicken sold in KFC outlets in the month of October to Susan G. Komen founda-
tion. However, this campaign was severely criticized by activists and other organization
as ‘pinkwashing’.58 The term pinkwashing refers to a situation where a company or
organization uses breast cancer awareness and the colour pink as a marketing tactic
without making substantial contributions to the cause. Critics claimed that there was a
contradiction between promoting breast cancer awareness and offering menu items that
could be associated with unhealthy diets, which can contribute to various health issues,
including obesity.59 Thus, when brands engage in cause-brand alliances, they need to
exercise caution in the selection of the social cause. A cause that could raise questions
regarding the brand’s core activity should be avoided. In the KFC case, the incongruity
principle suggests that supporting a cause that is not directly connected with the food
sector may have been more fruitful for KFC.
As noted earlier, cause-brand alliances are often met with scepticism from a wider
body of stakeholders, specifically about fulfilling ulterior business motives in support-
ing a social cause. Such scepticism can cause significant resource waste as well as repu-
tational damage for the brand. To overcome such a challenge, we suggest a five-step
framework for achieving cause-brand partnership success. Table 10.2 describes the
STEAM framework.
Table 10.2 STEAM framework for cause-brand alliance success
STEAM
Framework Explanation Questions to ask
Specificity ●● A brand should specify what ●● Is the brand interested in

exactly it wishes to achieve donating money to a cause or is
from a cause-brand alliance. it genuinely interested in
Their objective should be tackling social ills through
aligned to the resource action?
investment from the ●● Is the cause in congruence with
organization. the brand’s core business and
●● The brand should also examine value proposition?
the cause-related connection ●● Are the not-for-profit partner’s
from a congruity perspective. values aligned with the cause
●● The brand should also focus on and the brand’s objectives?
the partnering not-for-profit
organization and the perceptions
associated with them.
(continued)
STEAM
Framework Explanation Questions to ask
Transparency ●● The brand should transparently ●● Have we clearly identified the

communicate what it aims to timeframe for our alliance?
achieve through this cause- ●● Are we transparently
brand alliance to the not-for- communicating the resource
profit partner. expenditure?
●● The types of support that the ●● Are we transparently
brand provides to the cause communicating our objectives
should be set out clearly. and desired outcomes to our
partner and wider audiences?
Engagement ●● Once the brand identifies the ●● How are we engaged with
social cause, it needs to stakeholders with varying views
conceptualize the execution plan about the cause?
and engage with the multiple ●● Have we engaged with both
stakeholders that are involved supporters and critics?
with the cause. ●● What are our physical and
●● Throughout the execution, the digital engagement strategies?
brand should identify the ●● How are we optimizing our and
touchpoints that will aid the the not-for-profit partner’s
success of the cause-brand communication expertise to
alliance. signal our motives?
Accountability ●● The brand should make sure ●● Are our actions in the wider
that its actions beyond the market appropriately aligned
cause-brand alliance are in line with the cause we are
with the vision of the cause. supporting?
●● The cause-brand alliance should ●● Is there a sufficient buy-in and
be supported by all ranks of the support among senior
organization, including senior management towards the
management. cause-brand alliance?
●● The brand should accept that it ●● Are we willing to accept
has an obligation to take responsibility for undesirable
responsibility for unplanned outcomes?
outcomes.
Measurability ●● In this stage, the brand should ●● How is our cause-brand alliance
demonstrate how is it achieving performing?
the specified objectives of the ●● What objectives are being
cause-brand alliance outlined in fulfilled and where are we
the first step. observing any deviation?
●● The brand should hire an ●● Have we engaged with a
external neutral organization to neutral organization to examine
evaluate the success of its the effectiveness of our alliance
cause-brand alliance. activities?
Chapter summary
In this chapter, we explored an important concept in brand management, co-
branding, which is also termed brand alliance. We first defined what is meant by
co-branding and then examined its benefits and risks. Co-branding is highly popular
in branding practice because it is seen as a less resource-intensive and less risky
strategic approach, in comparison to new product launches and even brand

extensions. However, there are a number of risks associated with co-branding as
well. To develop a successful brand alliance, we identified four important principles,
namely consumer attitudes, familiarity, fit between the products and the brand fit.
We also observed several successful brand alliance examples that have stood the test
of time in both B2B and B2C sectors. Focusing on academic research in co-branding,
we also identified important theories in the field that can explain the underpinning
psychological mechanisms driving the success of brand alliances. Finally, we e xplored
the burgeoning field of cause-brand alliances wherein a for-profit and a not-for-
profit organization engage in co-branding.
Key concepts
●● Brand alliance or co-branding
●● Spillover effects
●● Product fit
●● Brand fit
●● Co-branding theories
❍❍ signalling theory
❍❍ information integration theory
❍❍ associative network theory
❍❍ attitude accessible theory
●● Cause-brand alliance
Exercise questions
1 Define co-branding and explain why it remains a popular strategic approach in
branding compared to new product launches.
2 What are the major benefits associated with co-branding?
3 Identify and explain the major risks associated with brand alliances and how it
can hurt a partner brand.
4 Using examples explain the important principles that drive successful brand
alliances.
5 Explain any two theories that underpin co-branding-related academic research.
How can an understanding of these theories help design impactful brand alliances
in practice?
6 Describe the notion of cause-brand alliance. Provide one example, reflecting on
the reasons of cause-brand alliance success and failure.
CASE STUDY Handwashing for life – Lifebuoy’s global cause-brand alliances
Read the following case study from Unilever about Lifebuoy’s Social Mission programmes
and communications, which has encouraged more than 1 billion people to develop good
handwashing habits.
Lifebuoy soap was first created in 1894 by William and James Lever, during a period
where public health and personal hygiene was becoming of greater social interest. In the
21st century, Lifebuoy is one of Unilever’s biggest brands, aiming to prevent illness and
save lives through handwashing with soap, creating accessible hygiene products and
promoting healthy habits. This includes a handwashing behaviour change programme,
including across Asia, Africa and Latin America, and TV adverts.
Other initiatives have included:
●● Lifebuoy’s response to Covid-19: public service announcements in 17 countries to

follow public health guidelines about handwashing with soap as a key measure to stay
protected; 2021’s It’s in Your Hands campaign continued to emphasize the need for
handwashing alongside social distancing, mask-wearing and vaccination; it
strengthened its supply chains to keep factories running and products available; it
donated over 20 million products, including soap, hand sanitizers and antibacterial
wipes to various organizations and initiatives, including schools, hospitals, the elderly
and taxi drivers across Asia Pacific, the Middle East and Africa.
●● H for Handwashing: H for Handwashing was built on the premise that effective
behaviour change must start at an early age. Aligning with teaching children the
alphabet through simple word associations, this campaign aimed to transform the
letter ‘H’ into a symbol for hygiene. This included providing educational materials and
launching a downloadable book
●● Harnessing the power of digital: Lifebuoy’s mobile programme Mobile Doctarni is a
voice-based service that delivers critical health and hygiene information to mothers
living in rural parts of the world, where access to doctors, information and TV is limited.
The programme was able to significantly increase handwashing with soap/liquids by
about one occasion per day among mothers. Specifically among pregnant or new
mothers, the frequency of handwashing vastly improved among participants exposed
to the campaign – an average of 1.5 times increase in handwashing frequency.
●● Lifebuoy’s new telehealth partnerships: Lifebuoy is progressing its social mission by
supporting more people to improve their health and hygiene through its telehealth
partnerships (consultation through mobile devices). Lifebuoy has teamed up with
leading telemedicine providers in India, Indonesia, Vietnam, Bangladesh and Pakistan
to expand the reach of these vital platforms.
●● Partnerships tackling cross-cutting issues linked to hygiene: expanding partnerships’
portfolios beyond hygiene to improve adjacent health-related behaviours, e.g.
malnutrition and immunization. That means forging impactful partnerships that focus
on holistic health where hygiene has a cross-cutting impact, enabling us to tackle
hygiene-related health issues such as malnutrition and immunisation.
SOURCES www.unilever.com/planet-and-society/health-and-wellbeing/handwashing-for-life/; Rabie, T and
Curtis, V (2006) Handwashing and risk of respiratory infections: A quantitative systematic review, Tropical
Medicine and International Health, 11 (3), 258–67; Luby S et al (2011) The effect of handwashing at recommended
times with water alone and with soap on child diarrhea in rural Bangladesh: An observational study, PLoS Med, 8
(6); Unilever calculation based in part on information reported by NielsenIQ through its ScanTrack, MarketTrack
and Retail Index Services for the Skin Cleansing Category (markets defined by Nielsen or Unilever) for the
52-week period ending: Ghana – Jun 2020; Egypt – Sep 2020; Denmark, Norway, Saudi Arabia, Sweden and
UAE – Nov 2020; Argentina, Australia, Bangladesh, Brazil, Canada, China, France, Germany, Great Britain,
Greece, Hungary, India, Indonesia, Italy, Malaysia, Mexico, Netherlands, New Zealand, Nigeria, Pakistan, Peru,
Philippines, Russia, South Africa, Spain, Switzerland, Taiwan, Thailand, Turkey and Uruguay – Dec 2020; Hong
Kong, Kenya, Poland and Vietnam – Jan 2021; Austria, Belgium, Chile, Portugal, Singapore and South Korea –
Feb 2021; US – Mar 2021 (Copyright © 2021, NielsenIQ); www.lifebuoy.com/No1.html
Case questions
1 Go to Unilever’s website and read its mission and vision. How does this cause-brand
alliance fit with Unilever’s strategic branding?
2 Examine the H for Handwashing cause-brand alliance using the STEAM framework.
3 Apply any two of the four theories underpinning brand alliances identified in this
chapter to the success of the H for Handwashing cause-brand alliance.
4 Critically evaluate using the four fundamental principles of successful brand alliance
discussed in the chapter how Unilever collaborated with various social causes and
relevant not-for-profit organizations to create effective cause-brand alliances.
5 Reflect critically on how these cause-brand alliances benefitted Unilever.
6 Examine the case from a critic’s perspective and recommend how other brands can
learn from Unilever’s approach to improve their chances of successful cause-brand
alliances.
Endnotes
1 Singh, J, Quamina, L and Kalafatis, S P (2016) Strategic brand alliances: Research
advances and practical applications, The Routledge Companion to Contemporary
Brand Management, 120–35
2 Washburn, J H, Till, B D and Priluck, R (2000) Co-branding: Brand equity and trial
effects, Journal of Consumer Marketing, 17 (7), 591–604
3 Rao, A and Ruekert, R W (1994) Brand alliances as signals of product quality, Sloan
Management Review, 36 (1), 87–97
4 Besharat, A and Langan, R (2014) Towards the formation of consensus in the domain
of co-branding: Current findings and future priorities, Journal of Brand Management,
21, 112–132
5 Washburn, J H and Plank, R E (2002) Measuring brand equity: An evaluation of a
consumer-based brand equity scale, Journal of Marketing Theory and Practice, 10 (1),
46–62
6 Park, C W, Jun, S Y and Shocker, A D (1996) Composite branding alliances: An
investigation of extension and feedback effects, Journal of Marketing Research, 33 (4),
453–66
7 https://hbr.org/2007/04/the-upside-of-falling-flat (archived at https://perma.cc/R6B8-
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8 Besharat, A (2010) How co-branding versus brand extensions drive consumers’
evaluations of new products: A brand equity approach, Industrial Marketing
Management, 39 (8), 1240–49
9 Kalafatis, S P, Ledden, L, Riley, D and Singh, J (2016) The added value of brand
alliances in higher education, Journal of Business Research, 69 (8), 3122–32
10 Lambe, C J, Spekman, R E and Hunt, S D (2002) Alliance competence, resources, and
alliance success: Conceptualization, measurement, and initial test, Journal of the
Academy of Marketing Science, 30 (2), 141–58
11 www.bp.com/en/global/corporate/news-and-insights/press-releases/m-and-s-food-and-
bp-extend-successful-forecourt-convenience-relationship.html (archived at https://
perma.cc/L9KY-VY2T)
12 Kalafatis, S P, Remizova, N, Riley, D and Singh, J (2012) The differential impact of
brand equity on B2B co-branding, Journal of Business & Industrial Marketing, 27 (8),
623–34
13 Helm, S V and Özergin, B (2015) Service inside: The impact of ingredient service
branding on quality perceptions and behavioral intentions, Industrial Marketing
14 Dahlstrom, R and Nygaard, A (2016) The psychology of co-branding alliances: The
business-to-business relationship outcomes of role stress, Psychology & Marketing,
33 (4), 267–82
15 Cao, Z and Yan, R (2017) Does brand partnership create a happy marriage? The role of
brand value on brand alliance outcomes of partners, Industrial Marketing Management,
67, 148–57
16 www.volvogroup.com/en/news-and-media/news/2021/mar/news-3905968.html
(archived at https://perma.cc/835J-7LFC)
17 Erevelles, S, Stevenson, T H, Srinivasan, S and Fukawa, N (2008) An analysis of B2B

ingredient co-branding relationships, Industrial Marketing Management, 37 (8), 940–52
18 Swaminathan, V, Reddy, S K and Dommer, S L (2012) Spillover effects of ingredient
branded strategies on brand choice: A field study, Marketing Letters, 23, 237–51
20 Ibid.
21 Weber, K and Sparks, B (2004) Consumer attributions and behavioral responses to
service failures in strategic airline alliance settings, Journal of Air Transport
Management, 10 (5), 361–67
22 Votolato, N and Unnava, H (2006), Spill over of negative information on brand
alliances, Journal of Consumer Psychology, 16 (2), 196–202
23 www.theguardian.com/world/2014/jul/31/southwest-seaworld-end-partnership
(archived at https://perma.cc/NW2Q-XPZN)
24 https://en.wikipedia.org/wiki/Firestone_and_Ford_tire_controversy (archived at https://
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25 Suh, J and Park, S (2009), Successful brand alliance and its negative spill over effect on
a host brand: Test of cognitive response hypothesis, Advances in Consumer Research,
36, 243–47
26 Coombs, W T (2007) Protecting organization reputations during a crisis: The develop-
ment and application of situational crisis communication theory, Corporate Reputation
Review, 10, 163–76
27 Singh, J and Crisafulli, B (2020) ‘Corporate image at stake’: The impact of crises and
response strategies on consumer perceptions of corporate brand alliances, Journal of
Business Research, 117, 839–49
28 Singh, J, Crisafulli, B, Quamina, L T and Kottasz, R (2020) The role of brand equity
and crisis type on corporate brand alliances in crises, European Management Review,
17 (4), 821–34
29 Crisafulli, B, Dimitriu, R and Singh, J (2020) Joining hands for the greater good:
Examining social innovation launch strategies in B2B settings, Industrial Marketing
31 Park, C, Jun, S and Shocker, A (1996), Composite branding alliances: An investigation
of extension and feedback effects, Journal of Marketing Research, 33 (4), 453–66
32 Simonin, B and Ruth, J (1998) Is a company known by the company it keeps? Assessing
the spill over effects of brand alliances on consumer brand attitudes, Journal of
33 https://edition.cnn.com/2019/07/24/business/forever-21-atkins-bars/index.html
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34 www.ibm.com/cloud/sap/alliance (archived at https://perma.cc/LQB3-34H2)
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44 Anderson, N (1981), Foundations of Information Integration Theory, Academic Press,
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47 Fazio, R, Powell, M and Williams, C (1989) The role of attitude accessibility in the
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49 Galan-Ladero, M, Galera Casquet, C and Singh, J (2015) Understanding factors
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of Non-profit and Voluntary Sector Marketing, 20 (1), 52–70
50 Till, B D and Nowak, L I (2000) Toward effective use of cause-related marketing
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51 Krishna, A and Rajan, U (2009) Cause marketing: Spill over effects of cause-related
products in a product portfolio, Management Science, 55 (9), 1469–85
52 Lichtenstein, D R, Drumwright, M E and Braig, B M (2004) The effect of corporate
social responsibility on customer donations to corporate-supported non-profits, Journal
of Marketing, 68 (4), 16–32
53 www.unicef.org/partnerships/pg-pampers (archived at https://perma.cc/X42Z-DVS3)
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177
Brand portfolio 11
management
Overview
In this chapter, we first explain the concept of brand portfolio management, and
discuss how different types of approaches to brand portfolio management lead to
benefits and sometimes disadvantages. We then discuss how equity is locked and
managed at different levels of a brand’s portfolio. In the following section, we in-
clude the tactical elements of brand portfolio. The final section deals with the con-
cept of corporate branding, the important levers and how organizations can manage
corporate brands.

●● Understand the concept of brand portfolio management

●● Comprehend the advantages and disadvantages of different brand portfolio
management strategies
●● Identify how brand equity is managed across levels
●● Gain insights on tactical elements of brand portfolio management
●● Understand the concept of corporate branding
●● Grasp the important levers that help corporate brands distinguish themselves
●● Develop an unerstanding of how to manage corporate brands
What is brand portfolio?

It is well-established that brands are created to communicate their value to custom-
ers. Brands are also a promise made by the manufacturer to their customers which
signals price, quality, status and other relevant symbolic aspects. As a brand grows,
many different customer segments get involved in buying and consuming the brand.
Many times, consumers use the same brand for varying reasons. For instance, some
consumers may use a soft drink for quenching their thirst, while others may use it as
party refreshment. Similarly, a health supplement may be used a consumer to reduce
weight, while others may use it to remain fit. Thus, as the usage associated with the
product differs, brand managers may want to align their brand’s narrative to fit with
their customer needs and wants. Moreover, with regular product innovations and
additional features that are added, brands also aim to convey the differentiation
between the older and new version of their products. For example, Apple launches a
new iPhone variant every year. Further to that, many brands expand into multiple
categories of products that are related or unrelated to their initial offering. Continuing
with Apple, the company currently operates in personal computing, smartphone,
wearable devices, sound equipment, television and home entertainment and is even
planning to develop autonomous cars.
The growth of product categories and the proliferation of brands across the cat-
egories to serve multiple segments of customers creates immense complexities for
brand managers. A brand’s basic premise is to differentiate the product from compe-
tition. However, growing competition and a plethora of brands within the market-
place make it difficult for a brand to differentiate itself. Furthermore, as discussed
earlier, with the growth of a single brand in multiple product categories, brand man-
agers have to simplify and clearly distinguish their offering so consumers can easily
identify the brand and remain connected.
Nokia’s entry and exit from consumer electronics
Nokia, established in 1865 as a paper mill operation in Finland, expanded into rubber
products, telecommunications, consumer electronics, personal computers, network
equipment, mobile phones, operating systems, among other things. Moreover, within
each of these categories, the brand Nokia had multiple product levels depending on
customer segment requirements. For instance, to just serve the consumer electronics
markets in the early 2000s, Nokia created a number of mobile phones such as the
Nokia 3310, Nokia 6600, N73, N95 and E71. It also acquired a number of prominent
brands across several categories: the hardware division of Sega to develop N-gage
gaming devices, the online music distributor Loudeye Corporation, the media-sharing
service Twango, the mobile advertising technology firm Enpocket, the digital mapping
brand Navtaq, among many others. However, with the arrival of the Apple iPhone, the
Nokia consumer electronics division struggled substantially. For instance, in 2007
when the Apple iPhone was launched, Nokia’s Symbian operating system had a
market share of 62.5 per cent within the mobile phone sector. However, by the end of
Brand portfolio management 179
2008, this had fallen to 40.8 per cent, reducing to less than 15 per cent by the end of
2011.1 In 2014, Nokia sold its mobile phone division with its brands.2 However, at the
same time, the Nokia brand has continued its acquisitions as well. For instance, in
2016, Nokia purchased French telecommunications equipment company Alcatel-
Lucent, which also owns the iconic telecommunications firm Bell Labs.
This Nokia example shows how sometimes brands grow in different sectors,
flourish and at times fail. Without a clear portfolio management strategy, brands can
enter into categories of products without having clear expertise. Nokia was
predominantly a B2B company that ventured into B2C market and flourished for a
number of years. However, with continuous expansion into a variety of B2C
categories, and without a clear brand portfolio management strategy, it had to
withdraw from consumer electronics. The brand continues to operate successfully
through its B2B portfolio.
Figure 11.1 Nokia had many globally successful phones such as the Nokia 5110
SOURCE Photo by Girl with red hat on Unsplash

Managing brand portfolio

To manage the challenge of brand proliferation and growth, brand managers need to
plan branding from the perspective of portfolio management. Portfolio management
refers to the systematic process of managing a collection of assets, investments,
projects or products to achieve specific strategic objectives. It involves making deci-
sions about the allocation of resources, risk management and the optimization of the
portfolio to maximize returns or achieve other desired outcomes.3 Brand portfolio
management, thus, is the systematic process of identifying, structuring, managing,
curating and communicating the brands under a company’s control. Developing a
portfolio management approach allows managers to create a clear and coherent
structure to streamline their brands fitting with their strategic objectives, allocate
appropriate marketing and communication resources based on each brand’s growth
potential, take appropriate acquisition or deletion decisions and manage the brand
on a day-to-day basis. Brand portfolio management also helps consumers in under-
standing the differing traits and features of a brand within the portfolio and helps
foster customer-brand relationships.
Brand portfolio management is not a rigid structure and can differ for each firm
depending on their strategic brand vision and growth. In that regard, brand portfo-
lios differ between competing brands. An important point to remember is that most
brands do not start with a predetermined portfolio strategy. As a brand expands into
new product categories and markets, complex hierarchies and levels emerge. As dis-
cussed in Chapter 9, brands have varieties of line and category extension strategies
as they grow. Moreover, brands can move into new businesses that can further in-
crease complexities. The business in practice regarding Nokia explains the complex-
ities involved in brand management and the need for brand portfolio management.
Types of brand portfolio management strategies

Brands use a variety of strategies to successfully manage their portfolio. Three major
brand portfolio management strategies that brands employ include: corporate
branding, family branding and individual branding. Corporate branding is the high-
est-level brand in the hierarchy of brand portfolio management. It represents the
parent company and all its products and services. For example, the corporate brand
for Samsung is simply ‘Samsung’. All of Samsung’s products, such as smartphones,
TVs and appliances, are branded under the Samsung corporate brand. On the other
hand, there are corporate brands like Unilever and Diageo which function on the
corporate level with a large portfolio of brands across various categories. These cor-
porate brands serve as a relationship enhancer for the stakeholders. In the section on
corporate branding in this chapter, we explain in further detail the importance of
corporate branding and how it is a critical avenue for reputation management and
brand identity.
Family branding involves the use of one overarching name for multiple products
or product lines. For example, ‘Microsoft Office’ encompasses a suite of software
applications like Word, Excel and PowerPoint. Many large firms use a unique family
brand setting at product category level: Procter & Gamble use product category
classification such as baby care, fabric care, family care, feminine care, grooming,
hair care and oral care to set out the family of brands that operate within the same
category. Within fabric care, Procter & Gamble owns brands such as Ariel, Bounce,
Cheer, Downy, Dreft, Era, Gain, Rindex and Tide. These brands compete against
each as well as other competitors in the market.
Within the family brands, there are individual brands. These brands have their
own unique identity and are managed independently within the corporate structure.
For instance, detergent brands such as Ariel, Gain and Tide also act as individual
brands wherein they have their own variants for different pack sizes and formula-
tions. Similarly, the Apple family brand includes individual brands such as the
iPhone, iPad and MacBook, all with numerous variants based on their specifications
and colours. Individual brands are all marketed under their own names, which helps
to differentiate them from each other and from other brands in the market.
Brands also manage their portfolio cognisant of regional and cultural differences.
For instance, Colgate toothpaste is sold globally, however, Sorriso is mostly available
in Latin America and Elmex in Europe. An outline of the structure of Colgate-
Palmolive is shown in Figure 11.2.
Figure 11.2 Brand portfolio management structure of Colgate-Palmolive
Colgate-Palmolive
Oral care Personal Home Pet care

care care
Colgate Sorriso Tom's of Elmex Hello

Maine
Colgate Colgate Colgate

toothpaste mouthwash toothbrush
Max Fresh Total Deep Max Fresh Ultrabrite Sensitive

Knockout Clean Clean Advanced Prevent
toothpaste Toothpaste Mint Whitening and Repair
Toothpaste Toothpaste
SOURCE Authors’ compilation

NOTE The above only shows a few of the brand variants within the Colgate brand. Please visit www.colgate.com/
en-us/products for the full brand portfolio.
Similarly, depending on the region and cultural associations, brands also include
variants within their individual portfolio. For example, Coca-Cola in the UK is avail-
able in eight different pack sizes from a 150ml can to a 2.25ltr plastic bottle. In the
USA, there are six pack sizes from 220ml to 2ltr.
Advantages and disadvantages

The portfolio management approach creates the structure and relationships between
a company’s brands and sub-brands. This approach has several advantages and dis-
advantages that impact a company’s branding strategy. The biggest advantage of
adopting brand portfolio management strategy is the clarity and consistency it pro-
vides for the parent brand and the sub-brands about their role with the hierarchy. It
also makes it easier for consumers to understand how various products and services
are related and thus increase brand recognition and trust. Further, brand portfolio
management can also allow a corporate brand to leverage its brand equity across
categories which makes it easier to enter into new product categories and interna-
tional markets. The portfolio approach allows for efficient resource allocation as
marketing and R&D efforts can be shared across related brands. This can reduce the
cost of innovation and improve market penetration. Moreover, the brand portfolio
management approach can help mitigate risks when one of the brands within a port-
folio suffers from reputational damage due to a transgression.
The brand portfolio management approach provides clarity but at the same time
due to market pressures, many brand managers tend to overextend the brand. This
overextension can lead to brand dilution and cannibalization within the same prod-
uct category. Moreover, each extension is associated with its own costs related to
production, logistics, retail and communications. Thus, it can lead to resource alloca-
tion challenges. In addition, overextending brand portfolio and variants in particular
can cause consumer confusion. For instance, there are more than 40 different vari-
ants of Colgate toothpaste available in the market including various flavours and
ingredients (e.g. mint, charcoal, fluoride-free, etc.) and types of oral care (e.g. cavity
protection, whitening, freshness, sensitive teeth care, etc.). Such levels of variety may
lead to consumer confusion, decision postponement and reduced decision satisfac-
tion at times.4 When such overextension occurs, the portfolio management approach
can allow the brand manager to evaluate the market performance of the extensions
and make decisions regarding streamlining the portfolio size.
Managing brand equity across the portfolio

The brand portfolio management approach allows brand managers to unlock brand
equity at every level of the portfolio. To leverage equity at each level, the following
principles can be followed. First, a company has to decide on its brand strategy by
defining its core values and distinction in terms of what the brand stands for. Second,
based on the brand strategy, the company can decide its brand positioning strategy
which will allow consistency and coherence of brand communication. Third, the
strategy and the positioning will the guide the company in developing and managing
its brand portfolio. Such a brand portfolio will, in turn, allow a brand to create a
roadmap for product development and brand extension. Finally, by monitoring and
evaluating the performance of each brand and its variants, the company can adjust
the overall brand portfolio.
The brand portfolio management approach can guide a firm in its actions to lever-
age brand equity at each level of the portfolio. At the corporate brand level, the
major brand equity considerations are reputation management, social responsibility
and product/market development. For example, Kering group, which owns luxury
brands including Gucci, Yves Saint Laurent, Bottega Veneta, Balenciaga, Alexander
McQueen and Briony, among others, has a unique corporate level sustainability ini-
tiative that has resulted in the Kering brand publishing its first environmental profit
and loss statement (EP&L) in 2016 and initiatives such as group wide sustainability
targets for suppliers and its own brands, the banning of fur across product range and
refusal to use models under 18 years old.5
Brand equity is locked in the positioning of various brands within the brand
family. Thus, the overall brand family and the individual brands within the fam-
ily can leverage brand equity through their strategic actions. For instance, within
the fabric care brand family, Unilever has various detergent brands such as Surf,
Omo (Persil in the UK; Skip in France, Portugal and Spain; Ala in Argentina; Via
in Sweden; Breeze in Thailand and Philippines; and Rinso in Indonesia), and
Neutral among others. Each brand is positioned slightly differently in the mar-
ket. However, they all adhere to Unilever’s principles of sustainability.6 Surf is
associated with value for money and concentrating on fun and playfulness, while
targeting the price conscious consumer. The brand is also focused on families
with young children, encouraging playing outside and getting dirty, while Bio
Luvil targets adults and adult households predominantly focusing on clothes and
fashion. Neutral diverts from these brands and focuses on skin sensitivities to
detergent chemicals and fragrances. With each brand having its own position,
they can choose varying communication strategies, tools and approaches to build
and maintain their brand equity. Moreover, this allows the brands to explore
varieties of co-branding strategies. For instance, Neutral collaborated with
Allergy and Asthma Association within Finland, while Omo with its family focus
partnered with the Olympic movement that encourages kids to be active in not-
for-profit sports clubs.
Tactical management of brand portfolio

Brand portfolio is dynamic. As the company grows, it builds new brands, and ac-
quires and discards brands to serve its current and potential customers according to
its brand vision. This requires regular changes within the brand portfolio. There are
a number of tactics that brands use to maintain their overall brand equity. These
tactics include brand introduction, rejuvenation, transfer, extension and divestment.
Brand introduction is the process of launching a new brand into the market. This
typically involves creating brand awareness, establishing a brand identity and
building initial brand equity. Apple’s introduction of the iPhone in 2007 is a notable
example. Apple successfully introduced a new brand that revolutionized the
smartphone industry by combining design, functionality and user experience. Brand
rejuvenation, also known as brand revitalization, involves making changes to an
existing brand that may include repositioning, redesigning or rebranding to appeal
to a new or refreshed target audience. McDonald’s uses this tactic often when it re-
vamps its menu, offering different toys in Happy Meals, and redesigning the restau-
rant ambience to attract its customer base. Brand transfer refers to the practice of
leveraging an established brand’s equity to enter a new product category or market.
It involves extending a brand’s identity and reputation beyond its original scope.
Nike successfully transferred its brand equity from athletic footwear to apparel,
accessories and even technology, creating a broader brand presence that extends
beyond shoes.
Twitter aims to rejuvenate itself by becoming the super app X
Since its inception, Twitter has been a news-led social media platform that focused
on global socio-political trends. With the takeover by Elon Musk, Twitter was
re-branded as X. Mr Musk highlighted the financial struggles of the brand and
promoted his vision for the brand to become a super app such as WeChat in China
that offers everything from messaging, video calls, micro-blogging, buyer-seller
platform, forums and payments.
To rejuvenate the brand, X will need to use a variety of brand portfolio strategies
to operate in different categories. It will also need to collaborate with a variety of
organizations to provide the range of services it aims to deliver. For instance, the
brand may collaborate with large travel organizations to build a hospitality and travel
search option, connect with online auction companies to create a buyer-seller
ecommerce platform and offer a payment gateway using Musk’s earlier ventures,
such as Paypal.
Alternatively, creating its own sub-divisions and sub-brands will require

considerable resources and brand portfolio management effort in this saturated
market. Communicating the value of the sub-brands will pose yet another challenge
for X. A well-crafted brand portfolio can lead X to success.
Brand divestment involves the strategic decision to sell or discontinue a brand or

brand portfolio. This can be done to focus resources on core brands, eliminate un-
derperforming brands or address regulatory or competitive issues. Covergirl, the
American cosmetics brand, was acquired by Procter & Gamble in 1989 and later on
sold to Coty, Inc. in 2016. Brand divestment involves the tactical decision to sell,
discontinue or spin off a brand from the brand portfolio. Companies may choose to
divest brands that no longer align with their core business objectives, underperform
or face regulatory or competitive challenges. In 2017, the Kraft Heinz Company di-
vested several brands, including the sale of its cheese business to Lactalis, to focus on
core brands and reduce debt. This divestment allowed Kraft Heinz to reallocate re-
sources and streamline its portfolio.
Corporate branding
Corporate branding refers to the entire organization as a brand, as opposed to
individual product or services.7 Many companies now prominently display the

organization as a brand. This practice is observed across a wide array of organizations,
including for-profit, not-for-profit, non-governmental organizations, universities,
sports teams and destinations.8 In specific regions of the world, corporate branding
has a well-established presence. For instance, in Japan, Korea and India, companies
such as Mitsubishi, Samsung and Tata are long recognized as corporate brands
engaged in a wide array of sectors, including shipbuilding, medical equipment,

construction, financial services, software development and consultancy. This extends
beyond these corporations’ more recent reputations in the Western world, primarily
for automobiles and consumer electronics.
Corporate branding offers a further distinctive identity beyond the product/ser-
vice brand that can promote differentiation from competitors. Moreover, corporate
branding can help the firm in developing and percolating a particular set of values,
culture, people, programmes, assets and skills.9 A strong corporate brand thus allows
companies to straddle across sectors based on their values and ethos. For instance,
DuPont is a corporate brand that has endured numerous shifts in its strategic direc-
tion over time. Initially, it ventured into gunpowder manufacturing, briefly explored
the rapidly growing automotive industry in the early 20th century and later focused
its efforts on polymers and innovative materials. Subsequently, it expanded into the
energy sector and currently the brand identifies itself as a worldwide science com-
pany.10 Similarly, IBM, the global technology behemoth, which started as a time
clocks company, moved into punch card-based data processing, to computing, main-
frame servers, personal computers, software, super computers, consulting and now
into machine learning and artificial intelligence. However, the values and ethos as-
sociated with technological innovations have remained consistent throughout the
company’s evolution. Most industry sectors have large corporate brands that con-
sumers identify with. For instance, within retail, there are global corporate brands
such as Wal-Mart, Tesco and Carrefour. Similarly, in the aviation industry there are
both manufacturing and service corporate brands, such as Airbus, Boeing, United
Airlines, Turkish Airlines, Emirates and Menzies. Corporate brands not only offer
the trust signals to consumers but also allow employees to develop a sense of identity
and help build employee-company relationships.
Corporate brands have some overlaps in their characteristics with product brands;
however, these are also distinct. The scope and scale of a corporate brand comprises
the whole enterprise, the entire corporation and all its stakeholders, and not just one
product or a group of products.11 Moreover, corporate brands reflect the company’s
heritage, values and beliefs that define corporate brand identity. In comparison,
product brands are often developed predominantly through the imagination of the
brand management team and the advertising agencies. Further, product brands’ main
focus is consumers, while a corporate brand targets a much wider stakeholder group
including employees, investors, suppliers, policy makers and society at large.
Corporate brands are managed at a comparatively senior level of the organization,
while many product brands are controlled and managed by middle managers.12 In
order to develop a successful corporate brand, it is vital that the values associated
with the corporate brand are transmitted to the entire organization. This happens
when there is a strong commitment from senior management at the highest levels.13
Corporate brand levers

Corporate brands allow companies to leverage their position through a variety of
dimensions including heritage, value, reputation, personality and ethics/sustainabil-
ity credentials.14 While products and services tend to become similar over time,
organizations are inevitably very different.15 Corporate brand activities are organi-
zation wide, thus, initiatives supported by the corporate brand offer better resource
utilization, management and wider acceptance compared to product brands. Due to
closer stakeholder engagement compared to product brands, initiatives supported by
corporate brands are seen as more credible and trustworthy.
Corporate brands can leverage a company’s historical legacy, traditions and herit-
age to build a strong brand identity and foster connections with customers and
stakeholders.16 Such an approach can emphasize the company’s longstanding market
presence, values and contributions to the industry and society. For example, Coca-
Cola often emphasizes its 135+ years of history and traditions, associating its brand
with nostalgia and timeless refreshment. Coca-Cola’s vintage advertisements and use
of its classic logo help reinforce this heritage perspective.17 The corporate brand can
also utilize its historical legacy to showcase its authenticity. Adidas, for instance, ef-
fectively highlights its pivotal role not only in the realm of sports (by pioneering in-
novations like the first hand-forged spiked running shoes for various distance races,
famously crafting Jesse Owens’ footwear for the 1936 Berlin Olympics and intro-
ducing the first lightweight football boots with screw-in studs, as well as manufac-
turing footballs for numerous World Cups), but also in the realm of popular culture
(as evidenced by its enduring association with dance music culture, for instance, the
hip-hop pioneers Run DMC’s track ‘My Adidas’). Some corporate brands even add
their establishment year within the logo itself to highlight their heritage and origin.
For example, the beer brand Budweiser often includes the year 1876 in its logo, sig-
nifying the year the brand was founded. Similarly, the luxury brand Hermès uses the
word Paris to signify its association with the leading fashion and luxury destina-
tion.18 Moreover, Hermès also highlights its association as a high-end harness and
saddle maker, by depicting the ‘Duc-carriage’ with a horse and rider.
In addition to heritage association, the corporate brand is a valuable tool for
reputation management. Corporate brands reflect the values and culture of the or-
ganization that product brands may not convey. The values, culture and personality
of the corporate brand allow both internal and external stakeholders of a brand to
derive meaning associated with the brand and the organization.19 Corporate brands
are, thus, strongly connected with organizational reputation. A positive reputation
can significantly impact a company’s success and competitiveness.20 Reputation is
often regarded as one of a company’s most valuable assets and can lead to increased
customer trust, loyalty and competitive advantage.21 Consumers are more likely to
do business with companies they trust, and investors are more inclined to support
financially stable and reputable organizations.22 For instance, Apple is known for its
strong corporate reputation, built on a combination of innovative products, sleek
design and a commitment to customer privacy. The company’s reputation for quality
and reliability has contributed to its loyal customer base.
Nestlé corporate brand: heritage, values and reputation
Nestlé, founded in 1866 by Henri Nestlé, is a Swiss multinational food and beverage
conglomerate known for its strong corporate brand heritage, values and reputation.
It is the world’s largest food company, with over 200 brands and products sold in
over 190 countries.
Nestlé’s corporate brand heritage is deeply rooted in the company’s commitment

to improving the nutrition and wellbeing of infants through the development of Farine
Lactée, the world’s first milk-based infant food. Nestlé continues to honour this
heritage by positioning itself as a nutrition-focused company. This heritage aligns
with Nestlé’s mission to ‘unlock the power of food to enhance quality of life for
everyone, today and for generations to come’.23
Nestlé’s corporate values, encapsulated in its ‘Nestlé in Society’ report, reflect its
commitment to responsible business conduct, sustainability and ethical practices.24
The company prioritizes areas like nutrition, water stewardship, environmental
sustainability and social impact. Nestlé’s ‘Creating Shared Value’ (CSV) approach
integrates social and environmental concerns into its core business strategy,
demonstrating a commitment to value creation for both shareholders and society.25
Nestlé maintains a strong global reputation through consistent product quality,
transparency and ethical practices. Its reputation for safe and nutritious products
extends to diverse markets worldwide. Nestlé’s efforts to provide clean and safe
drinking water in developing countries through its ‘Water for Life’ initiative
showcases its commitment to global social responsibility.
Nestlé successfully utilizes its corporate brand heritage, values and reputation
to maintain a global presence while fostering trust, sustainability and innovation. The
vision put forward by the corporate brand helps unite the entire organization and
foster trust with stakeholders. By aligning its actions with its heritage and values,
Nestlé continues to be a leading force in the global food and beverage industry,
illustrating the strategic importance of brand heritage and reputation for corporate
brands.
Approaches to corporate branding

Depending on the organizational structure, managers decide about the visibility and
identity the corporate brand should create, in comparison to its product brands.
Companies generally employ three different approaches in this regard.26 Some
organizations use their corporate brand name across all the firm’s activities and
communications. This ‘monolithic’ corporate brand approach may also be used in
conjunction with product brands. For instance, Amazon, the multinational technol-
ogy and e-commerce company known for its vast online marketplace, cloud
computing services and innovative ventures, employs a monolithic brand strategy
across its diverse range of products and services, from e-commerce (i.e. Amazon.com)
and Amazon Prime to Amazon Web Services (AWS).
The second approach to corporate branding focuses on ‘endorsed and sub-brands’
wherein the corporate brand offers an endorsement or support to the product brand.
The endorsement is aimed at adding credibility to the endorsed product brand or

sub-brand in consumer minds, utilizing the strength of values of the corporate
brand.27 For example, Cadbury’s Dairy Milk, Sony PlayStation or Polo by Ralph
Lauren utilize the corporate brand’s heritage, values and reputation. This approach
is particularly useful when launching new brands or entering new product/service
categories. The third approach involves giving little or no prominence to the corpo-
rate brand, with a clear focus on a product brand. When a corporate brand employs
such an approach, some of its stakeholders, such as the shareholders, suppliers and
partners, may know the corporate brand and its product brands. However, the end-
users or the consumers may not be able to make a direct connection between the
product and the corporate brand.28 For instance, PepsiCo is known for its individual
product brands such as Pepsi, Lay’s, Gatorade, Tropicana and Quaker Oats. These
brands are marketed separately and cater to different categories. Procter & Gamble
(P&G) has a portfolio of several successful individual product brands, for example,
Tide, Pampers, Gillette and Crest. Each of these brands has its own distinct identity
and marketing strategy, although they are all owned by the corporate brand P&G.
Similar to product brands, corporate brands have a personality as well. The values
and actions of a corporate brand reflected in individual or collective employee ac-
tions and behaviours set out its personality.29 Three specific personality traits that are
vital for corporate brands are highlighted by academic researchers, including being
passionate and compassionate in addressing the market and stakeholders; creative
and disciplined in its approach to markets; and agile and collaborative in addressing
market dynamics and changes.30 In the digital era, company websites have become
an important vehicle for demonstrating these traits. In analysing corporate brand
websites, researchers have identified personality traits such as sophistication, excite-
ment, affection, popularity, competence and ruggedness, amongst others.31 32 For
example, the website of Kikkoman, a Japanese food and seasoning company with a
global reach known for its soy sauce and a wide range of authentic Japanese condi-
ments, highlights its corporate social responsibility (CSR) credentials and warm per-
sonality through its digital presence.
CSR, sustainability, activism and such other socio-politically relevant activities
are mostly carried out by the corporate brand. Termed corporate brand citizenship,
these initiatives reflect the values and wider societal concerns of the people within
the organization. For example, the Swedish retailer Ikea sets out a sustainability
strategy with an ambitious goal to become carbon positive, without relying on off-
setting. In making this commitment, Ikea aims to reduce more greenhouse gas emis-
sions than its value chain emits.33 Similarly, Danone, one of the world’s largest dairy
companies, committed to substantially cut absolute methane emissions from its fresh
milk supply chain by working with farmers, other companies and governments on
regenerative practices.34 Such commitment from corporate brands means that each
product brand within the Ikea and Danone groups and its suppliers must engage in
sustainable and carbon positive solutions.
However, at the same time, it is important to remember that many corporate

brands still face allegations of greenwashing or corporate irresponsibility.35 For ex-
ample, while highlighting sustainability as a major strategic driver, as highlighted in
the branding in practice above, Nestlé has been accused of using palm oil in its prod-
ucts, even though palm oil production is a major driver of deforestation.36 Similarly,
while H&M has devoted substantial resources towards sustainability, it has been
criticized for its use of fast fashion, which is a major contributor to textile waste.
H&M has also been accused of using misleading labels on its products, such as ‘or-
ganic cotton’ and ‘sustainable’.37 In 2015, Volkswagen was caught cheating on emis-
sions tests for its diesel vehicles. The company had installed software in its vehicles
that could detect when they were being tested and reduce emissions accordingly. This
allowed Volkswagen to sell its vehicles as being more environmentally friendly than
they actually were.38 These cases highlight that, if not managed appropriately, corpo-
rate brands can also cause substantial harm to the organization’s reputation and
revenues. The next section, thus, discusses how to manage corporate brands.
Managing corporate brands

As corporate brands evolve, developing and managing a consistent and clear narra-
tive becomes significantly complex. Managing corporate brands involves strategi-
cally shaping and overseeing the identity, reputation and perception of a company in
the eyes of its stakeholders.39 It encompasses defining the brand’s values, mission and
positioning, ensuring consistency in messaging and visual elements, and aligning all
activities with the brand’s core identity. Effective corporate brand management re-
quires continuous monitoring of market trends and stakeholder feedback, as well as
adapting to evolving consumer expectations and societal values.40 Companies that
excel in managing their corporate brands can foster trust, loyalty and positive asso-
ciations, ultimately contributing to long-term success and competitive advantage in
their respective industries.
A prominent scholar in corporate brand management, John Balmer, offered the
6Cs framework for developing and managing a corporate brand. The 6Cs include
culture, character, communication, constituencies, covenant and conceptualization.41
Culture relates to the organization’s shared values and beliefs. It is the foundation of
the organization’s character, and it is what binds the organization together. Character
is the corporate brand’s core values and beliefs which makes its distinct from com-
petitors. The communication dimension allows the brand to communicate its char-
acter and culture to its stakeholders. Constituencies are the brand’s stakeholders,
such as the customers, employees, investors, suppliers and other community mem-
bers. The corporate brand needs to understand the needs and expectations of its
constituencies to effectively communicate its character to them. This, in turn, reflects

in the relationship between the brand and its constituencies, referred to as the cove-
nant. Conceptualization captures how the organization is perceived by its stakehold-
ers. The corporate brand needs to continuously manage its stakeholders’ perceptions
in order to create a positive corporate image. By understanding and addressing these
six dimensions of corporate branding, organizations can create strong corporate
brands that are aligned with their strategic goals and that resonate with their stake-
holders.
The framework is particularly useful for today’s digital marketplace wherein or-
ganizations can demonstrate each of these 6Cs through their websites, social media
communication and other digital channels including digital expos and trade shows.
In the physical world, corporate brands engage with different stakeholders through
different platforms. For example, at a trade show, a corporate brand engages with
mainly suppliers and B2B customers. However, in a retail environment, the corpo-
rate brand is engaged with end customers. In digital environments, such as websites
or social media, all stakeholders converge in the same space. Hence, a corporate
brand has to be nurtured on digital platforms. Based on the 6Cs framework, the
corporate brand needs to demonstrate its culture and character consistently with all
constituencies. This, in turn, will lead to better covenant (relationship) and
conceptualization. For example, the website of UPM, a leading Finnish forest

industry company, providing information on their sustainable and innovative

solutions in forestry, paper, pulp and biofuels. The website demonstrates UPM’s
commitment to sustainability, focusing on reducing emissions, promoting circular
economy principles and responsible forest management. Its Biofore strategy drives
innovations in r enewable materials and contributes to a more sustainable future.
Chapter summary
In this chapter, we explored the concept of brand portfolio and understood why it is
important for brands to employ a portfolio approach as they grow. There are multi-
ple ways in which brand portfolio can be managed and each approach can have
varying brand equity implications. We also identified various tactics of brand
portfolio management. Corporate branding is a unique approach towards brand
portfolio management wherein the whole organization is reflected a single brand. We
learnt how and why corporate brands have become vitally important for today’s
businesses. We also explored the brand levers such as heritage, value, culture, person-
ality and reputation which can be better communicated through corporate branding
approach. Finally, we comprehended the issues involved in the effective management
of corporate brands.
Key concepts
●● Brand portfolio
●● Brand portfolio management
●● Portfolio management tactics
●● Corporate branding
●● Levers of corporate brands
●● Management of corporate brands
Exercise questions
1 Define brand portfolio and why it is needed in today’s marketplace.
2 Each brand can have its own unique way of portfolio management. Critically
evaluate this statement using examples.
3 How can brand portfolio management affect brand equity across levels? Reflect
on how brands can manage equity at each level.
4 Describe, using examples, the variety of tactics used by brands in managing their
brand portfolio.
5 What is corporate branding? Why has it become important?
6 What benefits do corporate brands offer an organization?
7 Explain the 6Cs of corporate brand management.
CASE STUDY Balancing convention and expansion
Tata’s Global Branding Strategy, Tata Group, India’s oldest and one of the largest private
conglomerates, faced a crucial challenge in the late 20th century – reconciling its strong
Indian identity with aspirations for global expansion. This case study examines the
branding strategies employed by Tata Group regarding its major international acquisitions
between 2000 and 2010. Specifically, it analyses the decisions to maintain standalone
branding or integrate acquisitions under the Tata parent brand. The analysis reveals how
Tata balances global growth ambitions with preserving brand equity in both local and
global contexts during the integration process.
Founded in 1868, Tata Group grew into one of India’s largest private sector entities by
2010, with over 100 companies in industries from steel to IT to hotels, and $70 billion in
revenue. The company holds a strong association with Indian national identity and values
like community service. However, since the 1990s, Ratan Tata, the group’s leader,
envisioned a global future, which raised concerns about the potential dilution of its core
values and brand identity. This created a strategic challenge regarding brand architecture
for major international acquisitions.
Conventional branding wisdom suggested unifying diverse acquisitions under the ‘Tata’
name, as exemplified by companies like GE. For example, GE applies its parent brand
across the board to all new ventures and all new acquisitions, so its brands become GE
Healthcare, GE Power and GE Capital, for example. However, Tata faced unique
challenges, such as wanting to preserve its own Indian identity while at the same time
wanting to respect acquired brands. In achieving this brand architecture approach, Tata
Group adopted a flexible approach, defying conventional wisdom.
For instance, in 2000, Tata Tea acquired UK beverage firm Tetley Tea for $450 million.
Tetley retained its distinct branding with modest visual association with Tata as the parent
brand. Tata’s logic was that Tetley held strong brand equity in the UK that would be diluted
by rebranding it as Tata Tea. Similarly, in 2008, Tata Motors acquired the Jaguar and Land
Rover auto brands for $2.3 billion. As iconic British car brands, Tata wanted to maintain
their distinct brand identities to preserve their value. Rebranding risked weaker
associations with Indian-made cars.
However, in 2007, when Tata Steel acquired Anglo-Dutch steelmaker Corus for
$13 billion it used a different approach. After initial hesitation, Tata Steel rebranded Corus,
which was a comparatively weak brand, as Tata Steel Europe in 2010 to better integrate
operations.
Tata’s case offers valuable insights into balancing tradition and expansion. Its success
demonstrates that branding strategies must be tailored to specific contexts and
challenges. Its different brand acquisition approaches reveals that Tata weighs
rebranding decisions carefully based on perceptions of brand equity gains versus risks, in
both local subsidiary and Tata corporate brand contexts. This nuanced, context-specific
approach aims to balance Tata’s global integration needs with retaining the value of
strong legacy brands.
This case suggests that firms expanding globally through acquisition face heightened
needs to manage brand architecture across portfolios and geographies. Brand integration
decisions require weighing synergies against diluting or damaging established brand
identities shaped by national cultures and business contexts. As Tata shows, pragmatic and
context-specific rebranding choices can prove more successful than uniform integration
policies. The case offers a compelling example of how a traditional company can
successfully navigate the complexities of globalization while staying true to its core values.
Case questions
1 Visit www.tata.com/investors/companies and examine its brand portfolio in detail.

Develop a brand portfolio structure as explained in Figure 11.1.
2 Critically reflect on the advantages and disadvantages of the brand portfolio
management approaches employed by Tata and GE.
3 Discuss the preferred brand portfolio management tactics used by the Tata Group.
Explain in detail why the company employs such tactics.
4 Visit the Tata Group website and critically examine how it uses the corporate brand
levers of heritage, value and transparency.
5 Apply the 6Cs framework to analyse the corporate brand management strategy of the
Tata Group.
Endnotes
1 www.statista.com/statistics/263438/market-share-held-by-nokia-smartphones-
since-2007/ (archived at https://perma.cc/3S8G-F5S3)
2 www.wsj.com/articles/SB10001424052702304788404579521182171069704 (archived
at https://perma.cc/BGV7-AC3Z)
3 Drake, P P and Fabozzi, F J (2010) The Basics of Finance: An introduction to financial
markets, business finance, and portfolio management, vol. 192, John Wiley and Sons
4 Wang, Q and Shukla, P (2013) Linking sources of consumer confusion to decision
satisfaction: The role of choice goals, Psychology & Marketing, 30 (4), 295–304
5 www.kering.com/en/sustainability/crafting-tomorrow-s-luxury/historic-commitment/
(archived at https://perma.cc/N5WV-8QUX)
6 www.unilever.co.uk/planet-and-society/ (archived at https://perma.cc/LZ6C-VWKP)
7 Keller, K L (2003) Brand synthesis: The multidimensionality of brand knowledge,
Journal of Consumer Research, 29 (4), 595–600
8 Roper, S (2016) Branding the entire entity: Corporate branding, in The Routledge
Companion to Contemporary Brand Management, Routledge, pp 354–65
9 Aaker, D A (1996), Building Strong Brands, The Free Press, New York
10 Roper, S (2016) Branding the entire entity: Corporate branding, in The Routledge
11 Hatch, M J and Schultz, M (2008), Taking brand initiative: How companies can align
strategy, culture and identity through corporate branding, Jossey-Bass, San Francisco
12 Harris, F and De Chernatony, L (2001) Corporate branding and corporate brand
performance, European Journal of Marketing, 35 (3/4), 441–56
13 Fetscherin, M and Usunier, J C (2012) Corporate branding: An interdisciplinary
literature review, European Journal of Marketing, 46 (5), 733–53
14 Simoes, C, Singh, J and Perin, M G (2015) Corporate brand expressions in business-to-

business companies’ websites: Evidence from Brazil and India, Industrial Marketing
15 Aaker, D A (2004) Leveraging the corporate brand, California Management Review,
46 (3), 6–18
16 Burghausen, M and Balmer, J M (2014) Corporate heritage identity management and
the multi-modal implementation of a corporate heritage identity, Journal of Business
Research, 67 (11), 2311–23
17 Balmer, J M and Greyser, S A (eds.) (2003) Revealing the Corporation: Perspectives on
identity, image, reputation, corporate branding, and corporate-level marketing: An
anthology, Psychology Press
18 Shukla, P (2011) Impact of interpersonal influences, brand origin and brand image on
luxury purchase intentions: Measuring interfunctional interactions and a cross-national
comparison, Journal of World Business, 46 (2), 242–52
19 1 Roper, S (2016) Branding the entire entity: Corporate branding, in The Routledge
20 Van Riel, C B and Fombrun, C J (2007) Essentials of Corporate Communication:
Implementing practices for effective reputation management, Routledge
21 Roberts, P W and Dowling, G R (2002) Corporate reputation and sustained superior
financial performance, Strategic Management Journal, 23 (12), 1077–93
22 Syed Alwi, S F, Nguyen, B, Melewar, T C, Loh, Y H and Liu, M (2016) Explicating
industrial brand equity: Integrating brand trust, brand performance and industrial
brand image, Industrial Management & Data Systems, 116 (5), 858–82
23 www.nestle-esar.com/aboutus/missionvision (archived at https://perma.cc/4JFS-7U7Q)
24 www.nestle.com/sustainability (archived at https://perma.cc/784R-HWF4)
25 Porter, M E and Kramer, M R (2011) Creating shared value, Harvard Business Review,
89 (1–2), 62–77
26 Olins, W (1990) The Wolff Olins Guide to Corporate Identity, The Design Council,
London
27 Balmer, J M (2012) Strategic corporate brand alignment: Perspectives from identity
based views of corporate brands, European Journal of Marketing, 46 (7/8), 1064–92
28 Balmer, J M and Gray, E R (2003) Corporate brands: What are they? What of them?,
European Journal of Marketing, 37 (7/8), 972–97
29 Simoes, C, Singh, J and Perin, M G (2015) Corporate brand expressions in business-to-
business companies’ websites: Evidence from Brazil and India, Industrial Marketing
30 Keller, K L and Richey, K (2006) The importance of corporate brand personality traits
to a successful 21st century business, Journal of Brand Management, 14, 74–81
31 Okazaki, S (2006) Excitement or sophistication? A preliminary exploration of online
brand personality, International Marketing Review, 23 (3), 279–303
32 Ankomah Opoku, R, Abratt, R, Bendixen, M and Pitt, L (2007) Communicating brand
personality: Are the web sites doing the talking for food SMEs?, Qualitative Market
Research: An International Journal, 10 (4), 362–74
33 www.ikea.com/gb/en/this-is-ikea/climate-environment/the-ikea-sustainability-strategy-
pubfea4c210 (archived at https://perma.cc/4QLB-BTNJ)
34 www.reuters.com/business/sustainable-business/dairy-giant-danone-aims-cut-methane-
emissions-by-30-by-2030-2023-01-17/ (archived at https://perma.cc/2BDY-TUKF)
35 Perks, K J, Farache, F, Shukla, P and Berry, A (2013) Communicating responsibility–
practicing irresponsibility in CSR advertisements, Journal of Business Research, 66 (10),
1881–88
36 www.greenpeace.org/philippines/press/9990/greenpeace-calls-out-nestle-for-false-claims-
on-plastic-neutrality/ (archived at https://perma.cc/P4C8-6TYX)
37 www.bigissue.com/news/environment/hm-greenwashing-is-disguising-the-reality-of-fast-
fashion/ (archived at https://perma.cc/SMS6-9V6E)
38 https://environmentaldefence.ca/volkswagen-dieselgate-timeline/ (archived at https://
perma.cc/ER8Y-D35L)
39 Balmer, J M (2012) Corporate brand management imperatives: Custodianship,
credibility, and calibration, California Management Review, 54 (3), 6–33
40 Urde, M (2013) The corporate brand identity matrix, Journal of Brand Management,
20, 742–61
41 Balmer, J M and Greyser, S A (2006) Corporate marketing: Integrating corporate
identity, corporate branding, corporate communications, corporate image and corporate
reputation, European Journal of Marketing, 40 (7/8), 730–41
197
PART THREE
Managing
contemporary
brands
198

199
Managing 12
negative events
for brands
Overview
In this chapter, we first explain the overarching concept of brand crises and its i mpact
on reputation management. We then discuss the three well-known types of crises –
product harm, brand transgression, and service failure and recovery. Each subsection
includes well-cited scholarly work and recent as well as classic examples of negative
events for brands.

●● Understand the concept of brand crises and reputation management

●● Comprehend the three types of negative events – product harm, brand transgression
and service brand failure
●● Gain insights into strategies of recovery and reputation management
Brand crises and reputation management

It is generally believed that negative information weighs heavily on people’s minds.1
For instance, consumers remember negative experiences more vividly. Prospect the-
ory, a well-known theory in behavioural economics, identifies that people give
greater emphasis to their losses compared to gains of the same size.2 For example,
the pain from losing $1,000 could only be compensated by the pleasure of earning
$2,000. This is also known as ‘negativity bias’ in social psychology.3 Negative events
are a common occurrence in the marketplace. People do not always get treated in an
optimal manner in their societal and organizational interactions. In organizational

interactions, consumers do not always think about the individual treating them
badly, rather the actions are scrutinized at a more macro level, wherein the entire
organization is blamed. Brands, as the key communication tool for most organiza-
tions, find themselves at the forefront of these interactions. When any kind of crisis
relating to the organization has an impact on its stakeholders, there is a potential for
substantial reputational damage.
A brand crisis typically emerges from negative events that severely impact an or-
ganization’s reputation, financial stability or operations, often leading to significant
public scrutiny and loss of stakeholder trust.4 Crises are often characterized by their
unexpected nature, the threat they pose to core organizational values, the need for
urgent decision making and the level of uncertainty they introduce. These events can
vary in nature, such as financial scandals, product recalls, environmental disasters,
ethical misconduct or cybersecurity breaches.5 Volkswagen, a prominent German
automobile maker, faced a brand crisis when it was revealed that the company had
installed software in its diesel cars to manipulate emissions tests. This revelation led
to a significant decline in Volkswagen’s reputation, legal battles and imposition of
large financial penalties.6 The scandal had a lasting impact on the company’s brand
reputation and emphasized the importance of ethical conduct and transparency in
the automotive industry. Volkswagen’s handling of the brand crisis and response
management strategy coupled with the financial penalties could have minimized the
reputational damage, and helped maintain its sales growth worldwide.7
Negative events can trigger a domino effect, causing a chain reaction of problems
that escalate into a full-fledged crisis, demanding strategic and well-coordinated re-
sponses from the organization.8 For example, Enron, once a leading American en-
ergy company, collapsed due to an extensive accounting fraud. The scandal not only
led to the bankruptcy of Enron but also damaged the reputation of Arthur Andersen,
its auditing firm.9 As Enron collapsed, to avoid further negative associations and to
maintain its core reputation of competence, Arthur Anderson undertook an exten-
sive re-branding exercise, renaming itself as Accenture. While Arthur Anderson’s
reputation was damaged due to the Enron scandal, Accenture continued to grow.10
It is now a successful consulting organization, providing services for 89 of the
Fortune Global 100 biggest companies in the world and for more than three-quar-
ters of the Fortune Global 500 companies.11 The Enron scandal is a classic example
of how financial mismanagement and unethical practices can severely tarnish a
brand and erode trust.
Crises can have far-reaching consequences, extending beyond the immediate
event, and adversely affecting an organization’s as well as it associated partners’
brand image, market position, financial stability and overall sustainability. For
instance, Cambridge Analytica, a British consulting firm, faced a major brand crisis
Managing negative events for brands 201
when it was exposed for harvesting personal data from Facebook without consent.
The scandal raised concerns about data privacy and manipulation of public opinion
for political purposes. Facebook, which was closely associated with the scandal, also
faced significant reputational damage and regulatory scrutiny. Therefore, an appro-
priate strategic response to brand crisis is required. Successful brand crisis manage-
ment involves not only reactive responses but also proactive planning to anticipate
potential crises and mitigate their impact.12 Effective crisis management strategies
encompass timely and transparent communication with stakeholders, crisis team
coordination and learning from the crisis to implement improvements and prevent
similar incidents in the future.13
In the aftermath of a brand crisis, organizations often find themselves at a
crossroad, requiring careful navigation to rebuild trust and reputation. In this regard,
effective brand communications play a crucial role in shaping perceptions and
responses during and after a crisis. Clear, consistent, transparent and empathetic
communication is essential in conveying the organization’s commitment to r esolution
and recovery, fostering a sense of trust and credibility among stakeholders.14
Thus, reputation management is a crucial aspect of brand crisis management
strategy that focuses on influencing, shaping and maintaining a positive perception
of an organization among its stakeholders.15 It involves a systematic approach to
monitoring and managing the reputation of a brand following a negative event,
which encompasses how it is perceived by customers, investors, employees and the
broader public.16 Academic researchers have long viewed reputation as a valuable
intangible asset that directly affects a brand, and, in turn, an organization’s financial
performance and competitive advantage.17 Many brands, therefore, actively engage
in reputation management through effective communications, ethical business prac-
tices, social responsibility initiatives and building strong relationships with stake-
holders to enhance their standing and credibility in the market.
Effective reputation management is crucial to mitigate the impact of brand crises
and rebuild trust. Swift and transparent communication, corrective actions and a
demonstrated commitment to addressing the issues at hand are essential components
of successful crisis management and reputation recovery. The ability to bounce back
from a brand crisis and rebuild a positive reputation is a testament to the resilience
and adaptability of a good brand crisis strategy. In 2018, Starbucks faced a brand
crisis after an incident where two African American men were arrested at a
Philadelphia store for waiting without making a purchase. In response, Starbucks
closed 8,000 company-owned stores in the United States for a day to conduct racial
bias training for employees. This proactive action demonstrated the company’s com-
mitment to addressing the issue and fostering a more inclusive environment, contrib-
uting to brand recovery and a strengthened reputation for social responsibility.18
The horsemeat scandal and Tesco’s reputation management:
what happened, the impact and what we learned
The horsemeat scandal in the UK was a major food safety threat that occurred in
2013. It involved the discovery of horsemeat in products that were labelled as beef.
The scandal had a big impact on the food industry and consumers alike. It also
raised concerns about the safety and traceability of food supply chains.19
Tesco was one of the major retailers involved in the horsemeat scandal. In 2013, it
was revealed that Tesco’s own-brand burgers contained 29 per cent horsemeat.20
This was a major blow to Tesco’s reputation, as it led to concerns about the safety
and quality of its products.
Tesco were able to quickly identify and address the root cause of the problem,
and took a number of steps to improve its food safety and supply chain management.
It tightened its supplier approval process, implemented DNA testing of meat
products and increased the amount of British meat it sourced. Tesco also became
more transparent about the supply of its products, and launched a new website
where customers could track the journey of their food from farm to fork.
In addition to these measures, Tesco also invested in reputation management
strategies to rebuild trust with consumers. It launched a number of advertising
campaigns that emphasized its commitment to food safety and quality. It also
engaged with customers on social media and through its customer service channels
to address their concerns.
Beyond the Tesco brand, the horsemeat scandal had several negative
consequences for the whole industry. It eroded consumer trust in the food industry
and led to a decline in sales of beef products. The scandal also had a significant
economic impact on the food industry, as businesses were forced to recall products
and implement new food safety measures.
In response to the scandal, the government introduced new food safety
regulations. These regulations included stricter requirements for food labelling and
traceability. The food industry also took steps to improve food traceability, such as
implementing DNA testing of meat products.21
The horsemeat scandal was a major wake-up call for the food industry. It showed
how vulnerable the food supply chain is to fraud and how important it is to have
robust food safety measures in place. While the industry has made progress since
the scandal, there is still more work to be done to prevent food fraud.22
Tesco’s response to the horsemeat scandal was widely praised by industry
experts and the brand was able to recover from it and maintain its position as one of
the UK’s leading retailers due to the brand-crisis-related reputation management
strategies it employed. However, the scandal served as a reminder of the importance
of food safety and supply chain management for all retailers.
Theoretical framework for brand crisis

type identification and response
An important theoretical framework that helps understand brand crisis type and ap-
propriate response is the situational crisis communication theory (SCCT).23 The
theory explains how organizations should communicate with their stakeholders dur-
ing a crisis. The theory assumes that the main goal of crisis communication is to
protect the organization’s reputation, which is affected by how stakeholders attrib-
ute responsibility for the crisis and how they perceive the organization’s response
strategies.24 SCCT also provides guidelines for selecting the most appropriate re-
sponse strategies based on the type, history and relationship of the crisis. The theory
posits that the most effective crisis response strategy depends on two key factors: the
level of crisis responsibility (i.e. controllability) and the reputational threat posed by
the crisis (i.e. impact). The level of crisis responsibility refers to the extent to which
an organization could have controlled the crisis before it occurred. This can be influ-
enced by a variety of factors, such as the nature of the crisis, the organization’s past
actions and the public’s perception of the organization. Reputational threat refers to
the potential damage to an organization’s reputation because of the crisis. This can
be affected by the severity of the crisis, the organization’s response to the crisis and
the public’s reaction to the crisis.
Table 12.1 Crisis types
Crisis type Explanation Causes
Victim crisis The organization is also ●● Natural disaster: Acts of nature damage an
a victim of the crisis. organization such as an earthquake.
Weak attributions of ●● Rumour: False and damaging information
crisis responsibility = about an organization is being circulated.
Mild reputational threat ●● Workplace violence: Current or former
employee attacks current employees onsite.
●● Product tampering/malevolence: External
agent causes damage to an organization.
Accidental The organizational ●● Technical-error accidents: A technology or
cluster actions leading to the equipment failure causes an industrial
crisis were accident.
unintentional. ●● Technical-error product harm: A technology or
Minimal attributions of equipment failure causes a product to be
crisis responsibility = recalled.
Moderate reputational
threat
(continued)
Crisis type Explanation Causes
Preventable The organization ●● Human-error accidents: Human error causes

cluster knowingly placed an industrial accident.
people at risk, took ●● Human-error product harm: Human error
inappropriate actions or causes a product to be recalled.
violated a law/ ●● Organizational misdeed with no injuries:
regulation. Stakeholders are deceived without injury.
●● Organizational misdeed management
Strong attributions of
misconduct: Laws or regulations are violated
crisis responsibility =
by management.
Severe reputational
threat ●● Organizational misdeed with injuries:
Stakeholders are placed at risk by
management and injuries occur.
According to SCCT, there are three types of crises: victim, accidental and prevent-
able. Table 12.1 below summarizes the crisis types based on the criteria of
controllability and impact.
Victim crises are those that are caused by external factors and are not the fault of
the organization. Examples of victim crises include natural disasters, terrorism,
product tampering or workplace violence. These types of crises have the lowest level
of attributions of responsibility and reputational threat for the organization, as
stakeholders tend to sympathize with the organization and view it as a victim of the
situation. Therefore, the recommended response strategies for victim crises are to
express concern, compassion and regret for the affected stakeholders, and to provide
information and assistance as needed. A recent example of a brand involved in a
victim crisis is the case of Nike and the Kobe Bryant crash. In January 2020, Kobe
Bryant, his daughter Gianna and seven other people were killed in a helicopter crash.
Nike was one of the first brands to respond to the tragedy, releasing a statement
expressing its condolences to the Bryant family and the other victims. However, Nike
was later criticized for its handling of the crisis, specifically for the way it marketed
Kobe Bryant merchandise in the aftermath of the crash. Some people felt that Nike
was exploiting Kobe Bryant’s death for profit, and that its marketing campaigns
were insensitive to the Bryant family and the other victims. Nike defended its ac-
tions, stating that it was simply trying to honour Kobe Bryant’s legacy and to pro-
vide his fans with a way to mourn his loss. However, the criticism continued, and
Nike eventually decided to pull its Kobe Bryant merchandise from the market.25 This
example shows how important it is for brands to be sensitive to the needs of victims
and their families in the aftermath of a crisis. Brands should also be careful not to
exploit victims for profit.
Accidental crises are those that are unintentional and result from technical or
human errors. Examples of accidental crises include equipment failures, product
recalls or data breaches. These types of crises have a moderate level of attribution
of responsibility and reputational threat for the organization, as stakeholders may
question the organization’s competence or reliability, but not its i ntentions or eth-
ics. Therefore, the recommended response strategies for accidental crises are to
acknowledge the crisis, accept some responsibility, apologize or express sympathy,
and explain how the organization will endeavour to prevent similar crises in the
future. For example, in 2018 two Boeing 737 MAX aircraft crashed within five
months of each other, killing 346 people. The crashes were caused by a software
flaw in the aircraft’s Manoeuvring Characteristics Augmentation System (MCAS),
which was designed to prevent stalls. However, the MCAS system could be acti-
vated in error, causing the aircraft to nosedive. The Boeing crisis had a significant
impact on the company. The 737 MAX was grounded worldwide for nearly two
years, and Boeing lost billions of dollars in revenue. The company’s reputation
was also harmed, and it faced numerous lawsuits from the families of the crash
victims. Boeing took a number of steps to address the crisis. It fixed the MCAS
software flaw and made other changes to the 737 MAX to make it safer. The com-
pany also apologized to the families of the crash victims and offered compensa-
tion to them. The 737 MAX was recertified by aviation regulators in late 2020
and began flying again in early 2021.26 However, the Boeing crisis is not over. The
company is still facing lawsuits and investigations, and it continues to rebuild its
reputation. This crisis demonstrates the need for product safety, transparency in
communications and the importance of accountability.
Preventable crises are those that are intentional or result from negligence or
misconduct. Examples of preventable crises include fraud, corruption, deception or
illegal actions. These types of crises have the highest level of attributions of
responsibility and reputational threat for the organization, as stakeholders may view
the organization as dishonest, unethical or immoral. Therefore, the recommended
response strategies for preventable crises are to admit full responsibility, apologize
sincerely, express remorse and regret, and offer compensation or restitution to the
affected stakeholders. Tesla and the death of drivers in self-driving car accidents
demonstrates a preventable crisis.27 In one of the cases, the driver was using Tesla’s
Autopilot feature, which allows the car to steer, accelerate and brake on its own.
However, the car failed to see a trailer-truck crossing the road and crashed into it,
killing the driver.28 Tesla has been criticized for its handling of the crisis surrounding
the autopilot feature. The company has regularly denied that Autopilot was to blame
for many of the crashes, but later admitted that the feature was not perfect.29 Tesla
has also been accused of overselling the capabilities of Autopilot and of not doing
enough to prevent drivers from using the feature in unsafe conditions.30
These crises do not always involve products and for-profit organization but can
also occur for not-for-profit organizations. For example, in 2018, a Swedish televi-
sion investigation revealed that United Nations Children’s Fund (Unicef), a UN
agency responsible for providing humanitarian and developmental aid to children
worldwide, did not fulfil its promise to assist some of the children who claimed that
they were sexually abused by French peacekeepers in 2014.31 The investigation also
showed that some of the children were homeless, out of school and living on the
streets, despite Unicef’s assurance that they were in its assistance programme. The
case exposed the seriousness of the issue and the need for accountability and trans-
parency from Unicef and other aid agencies. The case also highlighted the wider
problem of sexual misconduct and abuse in the humanitarian sector, which has been
under scrutiny after the Oxfam scandal that occurred in Haiti. In 2018, Oxfam, a
globally leading charity from the UK that focuses on the alleviation of global pov-
erty, was tackling 26 claims of recent and historical sexual misconduct investigations
involving Oxfam staff.32 This led Haitian authorities to suspend Oxfam operations
in their country, an inquiry by the International Development Committee in the UK
and dismissal of several staff members at Oxfam.33 The charity implemented a num-
ber of whistleblowing and safeguarding procedures and established an independent
global commission to review its approach to safeguarding culture in response to the
scandal.
The SCCT suggests that the most effective crisis response strategy is the one that
best matches the level of crisis responsibility and the reputational threat posed by the
crisis. In that regard, the theory identifies three primary and one secondary crisis
response strategies, as outlined in Table 12.2.
Table 12.2 Crisis response strategies
Crisis response Approach Examples
Primary Deny ●● Attack the accuser: Crisis manager confronts the

person or group claiming something is wrong with the
organization.
●● Denial: Crisis manager asserts that there is no crisis.
●● Scapegoat: Crisis manager blames some person or
group outside of the organization for the crisis.
(continued)
Crisis response Approach Examples
Diminish ●● Excuse: Crisis manager minimizes organizational

responsibility by denying intent to do harm and/or
claiming inability to control the events that triggered the
crisis.
●● Justification: Crisis manager minimizes the perceived
damage caused by the crisis.
Rebuild ●● Compensation: Crisis manager offers money or other
gifts to victims.
●● Apology: Crisis manager indicates the organization
takes full responsibility for the crisis and asks
Secondary Bolster ●● Reminder: Tell stakeholders about the past good works
of the organization.
●● Ingratiation: Crisis manager praises stakeholders and/or
reminds them of past good works by the organization.
●● Victimage: Crisis managers remind stakeholders that
the organization is a victim of the crisis too.
In sum, SCCT is a valuable tool for organizations to identify the crisis type and de-
velop an effective response plan. It can help organizations to create the most appro-
priate crisis response strategy based on the type of the crisis, as outlined in Tables
12.1 and 12.2.
SCCT provides an important theoretical lens in the field of corporate communica-
tions. It has applications in public relations, crisis communications and reputation
management at corporate level. At the same time, in the field of marketing and
branding, negative events are examined using analogous terms, namely, product
harm, brand transgression and service failure, which are the focus of our next sec-
tions.
Product-harm crises
A product-harm crisis is a situation in which a product is found to be defective, dan-
gerous or harmful to consumers, and thus damages the reputation and profitability of
the brand or company that produces it.34 It typically involves a well-publicized situa-
tion affecting a large group of customers.35 Product-harm crises can have negative
consequences for various stakeholders, such as consumers, investors, competitors,
regulators and the media.36 Product-harm crises can also affect consumer behaviour,
such as purchase intentions, brand loyalty, word-of-mouth and online search.37

Product-harm crises are strongly linked to product recall, wherein a firm asks its cus-
tomers to return its defective product in order to replace, fix or reimburse it.
Product-harm crises can occur in any industry and market, and can be caused by
various factors, such as manufacturing errors, design flaws, quality control failures,
human negligence, sabotage or natural disasters. For example, in 2008, China expe-
rienced a major product-harm crisis when melamine, a toxic chemical used to make
plastics, was found in infant formula and other dairy products. The crisis affected
more than 300,000 babies and children who suffered from kidney stones and renal
failure. Six children died and many others were hospitalized. The scandal damaged
the reputation of Chinese dairy products and led to bans and recalls in many coun-
tries.38 Similarly, in 2021, Peloton, a fitness equipment company, recalled its Tread
and Tread+ treadmills after reports of injuries and one death involving a child, and
pets who got trapped under the machines. The company faced a backlash from con-
sumers and regulators for initially resisting the recall and downplaying the safety
risks.39 The recall affected about 125,000 units and cost the company $165 million
in lost revenue.40
GM’s ignition switch crisis and response
General Motors (GM), one of the global automobile giants, was involved in a case of
product-harm crisis when more than 30 million vehicles were recalled.41 The case
involved a defect in the ignition switches of some of GM’s small cars, such as the
Chevrolet Cobalt and the Saturn Ion, which could cause the engine to shut off
unexpectedly, disabling the power steering, power brakes and airbags. The defect
was first detected by GM engineers in 2001, but the company failed to recall the
affected vehicles until 2014, after more than a decade of inaction and denial. By
then, the defect had been linked to at least 13 deaths and 31 crashes, although some
reports suggest that the actual numbers could be much higher.42
The GM case sparked a public outcry and a series of investigations by the US
government, regulators, media and consumers. GM faced lawsuits, fines, criminal
charges and congressional hearings for its negligence and cover-up of the problem.
The company also suffered a loss of reputation, trust and market share among its
customers and stakeholders.43 GM’s CEO Mary Barra admitted that the company’s
culture was characterized by ‘incompetence’ and ‘silos’ that prevented effective
communication and decision making on safety issues. She also apologized to the
victims and their families and promised to make changes to prevent such a crisis
from happening again.44
In response to this crisis, GM implemented a number of changes. For example,

it created a new position of vice president of global vehicle safety to oversee all
aspects of vehicle safety and report directly to the top management. The
company also established a ‘Speak Up for Safety’ programme to encourage
employees, dealers and suppliers to report any potential safety issues or defects
without fear of retaliation. It hired an independent monitor to oversee GM’s
compliance with the terms of a deferred prosecution agreement with the US
Department of Justice, which required GM to pay a $900 million fine and
cooperate with ongoing investigations.45 The company also had to set up a
compensation fund for the victims of the ignition switch defect, administered by
attorney Kenneth Feinberg, who had previously handled similar funds for the 9/11
attacks and the BP oil spill.
The GM case illustrates the importance of product safety and quality for any
company that wants to maintain its competitive advantage and customer loyalty. It
also shows how a product-harm crisis can have devastating effects on a company’s
performance, reputation and social responsibility. Therefore, companies should
adopt proactive strategies to prevent, detect and respond to product-harm crises in
a timely and effective manner.
Beyond product recall, product-harm crises can also lead to a reduction in trust
towards competing brands due to negative spillover effect, as explained in the
horsemeat scandal. Following a product-harm crisis, consumers may become more
cautious about using products from the industry as a whole as they may perceive
all brands in the industry to be involved in such practices. Academic r esearch sug-
gests that in a situation where a competing brand is engaged in a product-harm
crisis, the brand should use varying tactics to avoid the negative spillover effects
depending on their market position. For instance, leading brands should use bol-
stering, while follower brands should employ differentiation strategy to avoid
negative spillover from a product-harm crisis affecting a competing brand.46
Brand transgression
Brand transgression is a term that refers to a brand’s act that violates the norms or
expectations of consumers, and thus damages the reputation and relationship of the
brand with its customers.47 While there is some overlap between product-harm crises
and brand transgression, when the transgression involves harm caused by product
defect, many transgressions involve ethical misconduct, social responsibility, social
media crisis, celebrity endorsement scandals or simply a failure to live to the brand’s
promises. The latter aspects do not involve any physical harm to the consumer, but
they can sever emotional ties and make the consumer question the financial and re-
lational investment they have made in the brand. Thus, academic research on brand
transgression is rooted in consumer-brand relationship literature, and has been stud-
ied from a variety of standpoints including anthropomorphism,48 cross-cultural ef-
fects49 and neuroscience,50 among many others.
There are two distinct types of brand transgressions identified in academic litera-
ture: performance-related and performance-unrelated (or value-based). Performance-
related transgressions occur when a brand fails to deliver functional benefits or meet
customer expectations, such as product defects, service failures or quality issues.
Performance-unrelated or value-based transgressions occur when a brand violates
social or ethical norms or customer values, such as ethical misconduct, social media
crisis or a celebrity endorsement scandal.51 Both types of transgression can damage
the reputation and relationship of the brand with its customers and stakeholders.
For example, Turing Pharmaceuticals, after acquiring Daraprim, a drug that treats
HIV/AIDS patients, raised the price from $18 to $750 a pill. This price hike was
ascribed to be motivated by profiteering, and it caused a significant backlash from
society, which forced Turing to offer substantial discounts to hospitals.52 However,
the prices were not brought back to the original price of the pill for individual pa-
tients. Moral transgressions such as this one do not affect the performance of a
product, but they do betray the fundamental promise of the brand to its consumers.
Such transgressions may or may not have substantial revenue or profit implications.
However, the ethical challenges posed by these transgressions can cause reputational
damage for the company, as well as the industry as a whole. For instance, Turing’s
profiteering tactic brought into focus the overall pricing strategies used by the phar-
maceutical industry.53
Brand transgression can also involve wrongdoing by the organization towards
their employees. For example, it was revealed that one of Apple’s largest assembly
plants in Longhua (China), run by Foxconn, which employs nearly 1.3 million
Chinese workers, became infamous for the high suicide rate of its workers in 2010.
The workers were subject to long hours, low wages and strict rules, which led to the
high rate of suicides.54 Such revelations led to substantial media scrutiny. However,
the companies involved, that is, Apple and Foxconn, initially denied such challenges.
Moreover, Foxconn even asked new hires to sign an anti-suicide pledge, undertaking
that if they killed themselves, the company would not be blamed or pursued for
compensation.55 Rather than improving working conditions, the company used
safety nets so workers would not be able to jump from the top of the buildings. To
reduce further reputation damage, the company announced putting in place appro-
priate policies to improve worker welfare.
While brand transgressions remain rife in the marketplace, companies can use
their consumer-brand relationships to reduce the potentially negative consequences.
Academic research suggests that strong consumer-brand relationships can act as a
buffer against brand transgressions. However, even when the relationship is weak,
organizations’ investment in resolving the consequences of the transgression can
lead to a stronger relationship with a brand post-transgression.56
Service brand failure and recovery

Service failure and recovery is a rich area of academic research that has grown in
prominence over the past four decades. Service failure occurs when the service per-
formance of an organization falls below the expectations of its customers.57 Service
recovery, which is regularly examined in tandem with service failure, is defined as all
the actions the organization could take to remedy the complaints or loss caused by
a service failure.58
Service has become the cornerstone for most developed economies and is playing a
large part in many emerging economies as well. Companies nowadays are increasingly
focused on customer orientation, and at the same time, customers are demanding bet-
ter service. Digital technologies are adding further transparency in customer-organiza-
tion service dynamics. For example, customers can see reviews of the services offered
by an organization prior to engaging with it and thus set their expectations accord-
ingly. Moreover, customers are becoming increasingly vocal when companies do not
meet their expectations, or they believe that they have been treated unfairly. Websites
such as Tripadvisor, Trustpilot, Feefo and Yelp have become primary service failure
reporting portals. In addition, social media such as X (formerly Twitter), YouTube and
Facebook also play a prominent role in customers highlighting service failures which
can lead to substantial reputational damage for an organization. For example, in
March 2020, Robinhood, a popular stock trading app, experienced a major outage
that prevented millions of users from accessing their accounts and trading stocks dur-
ing a historic market rally.59 The outage lasted for more than 16 hours and caused
many users to lose money and miss out on trading opportunities. Robinhood apolo-
gized for the incident and offered compensation to some users but faced a lot of back-
lash and criticism from customers, regulators and lawmakers. The incident also
damaged Robinhood’s reputation and trustworthiness as a reliable platform for inves-
tors. A Twitter account ‘Robinhood Class Action’ gained more than 7,000 followers
and some users even filed lawsuits against the company for negligence and breach of
contract.60 This is an example of how a service failure in a digital environment can
have serious consequences for both customers and businesses.
United Airlines ‘bumpgate’ case
In 2017, to accommodate four crew members who needed to reach another

destination for their flight next day, United Airlines (UA) offered passengers
remuneration to take a later flight. However, when no passenger came forward, UA
staff randomly picked names of four passengers and told them to deplane.61
While three passengers did so reluctantly, one passenger, Dr David Dao, did not.
UA crew called officers of the Chicago Department of Aviation to forcibly remove Dr
Dao from the plane. A video recording of bloodied and injured Dr Dao being removed
from the plane was posted by one of the fellow passengers on social media, which
immediately went viral and was seen by millions of people.
The next morning, United CEO Oscar Munoz issued a statement justifying what
happened, describing it as ‘re-accommodating the customers’. Munoz also sent an
email to United staff commending the actions of the crew. Facing backlash from
other travellers, Munoz later apologized to Dr Dao. Moreover, UA also settled a
lawsuit for a confidential amount with Dr Dao.
Since this incident, within the USA, involuntary denied boarding incidents have
declined substantially from 4.29 per cent in 2017 to 0.61 per cent in 2021. When a
flight is overbooked, airlines tend to be more proactive and generous in their
incentive to avoid such service failures.62
Service failures occur in various contexts of consumer-service brand interactions. For

example, it can be due to process failure, employee interactions, expectations and
experience mismatch. Examples range from room or flight overbooking, flight can-
cellations or delay, impolite employees treating customers in an unfair or unequal
manner, dirty hotel rooms, service delivery delay or failure and monetary overcharge,
among many others. Thus, any service experience that fails to meet customer expec-
tations is associated with service failure.63 Consumers complain for various reasons
including seeking redress through compensation or other means, the simple oppor-
tunity to voice anger and frustration or even as an altruistic act to help improve the
service amongst others.64 However, service failure may not always result in com-
plaining behaviour. Many consumers do not complain because they are unable to
find the time and effort required to complain. Consumers, especially in collectivistic
contexts, associate complaining with loss of face for themselves as well as the em-
ployee, and thus may not complain.65 Moreover, when customers have low expecta-
tions from an organization and a service failure occurs, they tend not to complain.66
Recent academic research shows that service failure involves three distinct stake-
holders, namely the complainer, the organization and the bystander. Service failure
Table 12.3 Customer evaluations of service recovery experiences
FAIR UNFAIR
Distributive ‘The waitress agreed that there was ‘Their refusal to refund our money
justice a problem. She took the for the cold food was inexcusable.’
sandwiches back to the kitchen and ‘The situation was never remedied.
had them replaced. We were also Once they had my money, they
given a free drink.’ disappeared when I had problems.’
Procedural ‘The representative was pleasant ‘They should have assisted me with
justice and quick to resolve the problem.’ the problem instead of giving me a
‘The sales manager called me back phone number to call. No one
one week after my complaint to returned my calls, and I never had a
check if the problem was taken care chance to speak to a real person.’
of to my satisfaction.’
Interpersonal ‘The loan officer was very ‘The person who handled my
justice courteous, knowledgeable and complaint about... wasn't going to
considerate – he kept me informed do anything about it and didn’t
about the progress of the seem to care.’
complaint.’
Informational ‘The employee explained that the ‘The employee did not provide an
justice restaurant was full that evening.’ explanation for the reason we had
to wait for three hours in the
waiting area.’
can result in affective as well as behavioural responses. For example, due to service
failure, consumers may feel dissatisfaction, anger, frustration, helplessness, betrayal,
desire for revenge or desire for avoidance.67 It may also result in varying behavioural
responses such as re-complaining, exiting the interaction and switching to another
service provider.68 Complaining is dependent on a number of other contingency fac-
tors including the customer-brand relationship strength, firm reputation and brand
equity.69
Service failure theories

Three important theories – cognitive appraisal, attribution and justice theory – have
been used regularly in service failure and recovery related academic studies. Cognitive
appraisal theory relates to consumers’ evaluation of the failure (primary appraisal)
and the coping strategies employed by the consumers (secondary appraisal).70
Attribution theory examines with whom and where the responsibility in the service
failure process lies.71 This attribution of failure can either be external or internal.72
Grounded in the fairness principle,73 justice and equity theories74 have been regularly
Table 12.4 Justice (fairness) of service recovery
Distributive justice Procedural Justice Interpersonal justice Informational justice
Monetary ●● Voice ●● Politeness ●● Explanation

●● Refund ●● Speed ●● Empathy ●● Information
●● Discount ●● Accessibility ●● Concern ●● Follow-up
●● Replacement ●● Flexibility ●● Effort ●● Keeping up-to-
●● Upgrade ●● Respect date
Non-monetary ●● Honesty ●● Admission of
●● Apology responsibility
employed by academic researchers to explain the service failure and recovery pro-
cess. There are four types of justice perceptions: distributive, procedural, interac-
tional and informational. Each type of justice perception can result in a variety of
service recovery responses that can affect consumer fairness perceptions, as demon-
strated in the examples in Table 12.3.
Distributive justice refers to the perceived fairness of the allocation of resources
such as compensation, promotions and rewards. It captures the cost-benefit analysis
that the customer undertakes when service failure occurs and the service brand
attempts a failure recovery.75 As detailed in Table 12.4, recovery grounded in distribu-
tive justice can reflect in refund, discount, replacement, upgrade and/or apology
offered to the consumers by the service brand. Procedural justice is associated with
the perceived fairness of the process of recovery claim which can be achieved through
the speed of recovery, as well as a clear, transparent, accessible and flexible approach
to the recovery process.76 Interactional justice is the perceived equity of the treatment
that consumers receive during the process of service failure in comparison to others.
The politeness, honesty, concern, effort, respect and empathy shown by the service
organization towards the consumers equitably can substantially augment consumers’
interactional justice perceptions.77 Finally, informational justice is concerned with the
accuracy, clarity and timeliness of information that is provided in response to the
service failure.78 To achieve recovery in consumers’ minds from an informational jus-
tice perspective, service brands can take actions such as admitting responsibility,
explaining the circumstances, providing clear information, offering up-to-date infor-
mation and following up with the consumers to avoid re-complaining.
With service becoming a central contributor for more and more economies, ser-
vice failure and recovery is critically important for any brand that operates in a
competitive marketplace. As outlined above, brand managers can proactively iden-
tify and prepare their service failure touchpoints and develop appropriate service
recovery strategies using the justice theory framework.
Chapter summary
In this chapter, we comprehensively put together academic research and managerial
examples pertaining to negative events that affect brands. We understood how and
why brand crises occur and the importance of reputation management strategies. We
provide a framework to clearly identify crisis types and effectively manage response
strategies using the SCCT. We explain the notion of product-harm crisis as well as
the incidence of brand transgression. Finally, grounded in the justice theory frame-
work, we offer insights for brand managers to manage the service failure and recov-
ery process successfully. In sum, brand managers should proactively endeavour to
mitigate the impact of negative events.
Key concepts
●● Brand crisis
❍❍ Crisis types
❍❍ Crisis response management
●● Reputation management
●● Product-harm crisis
●● Brand transgression
●● Service failure
●● Service recovery
Exercise questions
1 Explain, using examples, why managers should proactively identify negative
events that may affect their brands and develop appropriate reputation
management strategies.
2 Find two real-life brand crisis cases, identify the crisis types and suggest appropriate
crisis responses that can be employed using the SCCT framework.
3 Compare and contrast the concepts of product-harm crisis and brand transgression
with examples.
4 Critically analyse the importance of service failure and recovery strategies for
today’s digital organizations.
5 Using an example of service failure that you were involved in, discuss how the
organization would have employed the justice theory framework for an
appropriate recovery effort.
CASE STUDIES Brand crisis and response management
Case 1: Equifax and the data breach
What happened
On 29 July 2017 Equifax discovered a massive data breach which affected the personal
information of up to 143 million Americans, including social security numbers and driver
licences. The company believed that the hack had taken place several weeks earlier,
even as early as mid-May.79
Equifax waited until September to make a public announcement of the problem.
The data thieves knew where to target. Equifax is one of three nationwide credit-
reporting companies that track and rates the financial history of US consumers. The
companies are supplied with data about loans, loan payments and credit cards, as well as
information on everything from child support payments, credit limits, missed rent and
utilities payments, addresses and employer history, which all factor into credit scores.
Subsequent events only made the situation worse: the website and consumer
telephone lines set up by Equifax so that people could get information and sign up for
credit protection were overwhelmed and it took weeks to get them working effectively. It
was reported that three executives sold nearly $2 million in shares after the breach was
discovered but before being publicly revealed. Equifax subsequently twice upped its
estimate of the numbers of consumers impacted – by 2.5 million in October 2017 and by
2.4 million in February 2018.
What we learned
This is why we build crisis preparedness plans.
A data breach must have been very high on the potential risks that Equifax faced. Given
its business, any data loss is serious.
A plan would have had laid out the crisis team, how they should work together, the
steps to take, the initial messaging and statements, and the process for escalating the
response as it got worse.
Nothing in Equifax’s slow motion and bungled response suggested it had anticipated
and planned for such an event.
Case 2: KFC and the shortage of chicken
What happened
In February 2018, KFC had to close more than half of its 900 stores in the United Kingdom
because of a shortage of… chicken.80
The social and mainstream media enjoyed the irony of a chicken shop without any
chicken and went to town on the story. The cause was a delivery problem after the chain
switched its contract to DHL which said that due to ‘administrative problems’ a number of
deliveries were cancelled or delayed. Loyal customers vented on Twitter and took their
families to McDonald’s. Some even complained to their local politicians.
Then KFC, even while struggling to get the restaurants re-opened, managed to switch the
narrative entirely. It ran an apology advertisement that was extremely funny (especially to
the brand’s core younger consumers) while taking ownership of the problem, this involved a
rearrangement of the letters KFC. The company was widely applauded by customers and
the media for its deft handling of the situation and became the poster child for how to handle
a crisis well.
What we learned
Among the key elements in a best-in-class crisis response plan are:
●● An understanding of the brand’s key stakeholder, particularly the core consumers. Who
are they? Where are they? What are their key considerations? What’s likely to be on
their minds when the brand is facing challenges.
●● An understanding of the brand’s promise and ‘voice’. How is it positioned? What’s likely
to support or break the trust in the brand in how it responds to a crisis.
KFC’s clever, authentic and borderline obscene response showed it deeply understood
both these factors. It knew its audience (young, hip and irreverent) and it followed through
in exactly the kind of tone and language that was consistent with how the brand was
positioned in other, more positive marketing.
The result was a swift abatement of the criticism for the closed stores – and the sound
of widespread applause for a model crisis response.
Case questions
1 Using the SCCT framework, identify the crisis types for the two cases with your own
justifications.
2 Critically evaluate the appropriateness of the response from each brand using the
SCCT framework.
3 Suggest your own alternative response strategies that these brands could have
employed using the SCCT framework.
4 Develop a 140/280 character social media response that the brand could use to reduce
the reputational damage.
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223
Luxury branding 13
Overview
In this chapter, we first explain the context of luxury branding, definitions and
growth. We then talk about the principles underpinning luxury products and brand-
ing, including brand signalling, value perceptions and symbolism. In the following
section, we discuss the contemporary growth challenges faced by the luxury brands,
including counterfeiting, masstige brands, sustainable luxury and luxury democrati-
zation. Finally, we bring in the developments of luxury marketing in the digital
sphere.

●● Understand the concept of luxury, definitions and the growth of the sector
●● Comprehend the principles and theories underpinning luxury branding
●● Gain insights into the current growth challenges in the sector
●● Understand how digital revolution is impacting the luxury sector
The unique context of luxury branding

The fascination with luxury has captivated the human mind throughout history,
spanning past, present and future (see Figure 13.1). This enduring allure has tran-
scended time, from ancient civilizations to today’s rich and the nouveau riche, where
yearnings for opulence remain constant. Whether we look at the ornate gold-clad
sarcophagi and v ibrant wall paintings of the Egyptian civilization, intricately crafted
wooden a rchitecture and exquisite silk work of the Chinese culture or the ornate
gold jewellery and stonework of the Indus Valley civilization, luxury has always
played a pivotal role in establishing power, status and social hierarchy.
This penchant for luxury persists in the art, craftsmanship and lifestyle of both
pre-and post-Renaissance European societies. Even in today’s modern marketplace,
the concept of luxury continues to captivate consumers worldwide. However, a
Figure 13.1 Human beings have always been fascinated with exquisite objects
SOURCE Author’s
c ritical issue arises when attempting to define luxury, given its contextual and tran-
sient nature. The Oxford English Dictionary defines luxury as a state of great com-
fort or elegance, often involving significant expense, or as an inessential, desirable
item that is expensive or hard to obtain.1
This definition illustrates the multifaceted nature of luxury, encompassing both a
state of being and coveted objects. For example, a Rolls-Royce may be seen as ines-
sential, desirable, expensive and associated with great comfort and elegance.
However, with the ‘democratization’ of luxury, where there is greater access to once-
exclusive goods, defining luxury becomes more complex.2 In the Western developed
markets, where handbags are considered essential, and luxury brands such as Louis
Vuitton are more accessible, questions about luxury’s essence arise.
To address this broad definition, scholars in management and psychology have
adopted a trait-specific approach to define luxury. For instance, traits associated
with luxury include old-fashioned, pleasant, good taste, flashy and expensive.3 Later
research highlights six specific traits attached with all types of luxury, such as pre-
mium price, excellent quality, scarcity, ancestral heritage, aesthetics and superfluous-
ness.4 However, researchers focusing on the fashion industry only suggest luxury
fashion brands have overlapping traits like heritage, exclusivity, premium price, de-
sign signature, environment and service, along with culture, brand identity and mar-
keting communication.5 Other researchers have proposed traits such as rarity, cost,
change, transformation, expenditure, distinction, excess and pleasure.6 Exclusivity
Luxury branding 225
Figure 13.2 Red roses have lost their luxury status in recent times due to easy availability
SOURCE Unsplash/Becca Tapert
and uniqueness are also vital traits in luxury.7 Luxury brands create and maintain a
rarity principle, generating high awareness while remaining comparatively rare and
difficult to obtain.8 For instance, Ferrari limits its annual car production to create a
scarcity premium.9
A third approach to defining luxury emphasizes experiential aspects, recognizing
the contextual nature of luxury. Luxury, in this context, becomes a reflection of
beauty and art applied to functional items, and a conveyance of culture and life-
style.10 The meaning of luxury depends on contextual factors, as what is considered
luxurious can change over time. For example, presenting out-of-season flowers as a
gift, such as a rose on the Valentine’s Day, was once a luxury. However, red roses are
now available throughout the year and have become accessible across the social
strata due to global production and logistics advancements (Figure 13.2).
In summary, luxury is a multifaceted concept that can be defined through various
lenses, including a generic definition, a trait-based approach or an experiential per-
spective. An amalgamation of these approaches provides a more comprehensive un-
derstanding of luxury. A new definition of luxury encapsulating the above approaches
is proposed: Luxury is a significantly comfortable state of being, achieved through
the possession of aspirational goods, services and/or meanings that are desired by
oneself and/or significant others, based on the collective past and present experi-
ences.11 Luxury brands serve as a means to attain this state and encompass goods,
services or constructs, which offer symbolic aspirational meaning embedded in soci-
etal consciousness, reflecting the contextual and transient nature of luxury.
What makes a product a luxury brand?

Luxury by definition involves aspiration, desires and societal meanings. Thus, in al-
most every sector there are luxury brands. For example, Bentley in automobiles,
Louis Vuitton in fashion and leather goods, Christian Louboutin in shoes, Chopard
in jewellery, Hermès in silk scarves and Patek Philippe in watches. In the previous
section, we identified a number of traits – high quality, exclusivity, rarity and scarcity,
heritage, price, unique design and innovation, and perceived symbolism – that sepa-
rate a luxury brand from a non-luxury brand.
Exclusivity derived through the scarcity principle is a fundamental concept in the
luxury goods industry which emphasizes the importance of limited availability in
enhancing the desirability and prestige of luxury products.12 This principle suggests
that when luxury brands restrict the quantity of a particular product or limit its
availability in the market, it creates a perception of exclusivity, which in turn in-
creases consumer demand.13 Consumers are more inclined to desire and value items
that are perceived as scarce or hard to obtain due to the innate human tendency to
seek uniqueness and social distinction through ownership of exclusive items.14 As a
result, luxury brands strategically employ scarcity as a means to maintain their
brand’s aura of exclusivity and elevate the perceived value of their products.15 The
rarity principle, though it is used interchangeably with the scarcity principle by
many, differs as it emphasizes the innate uniqueness or exceptional qualities of a
luxury product.16 Rarity does not require limiting the availability through produc-
tion processes, as managed by Ferrari and De Beers. However, rarity could be inher-
ent to the product itself due to the use of rare materials, intricate craftsmanship or
unique design elements.17 For instance, the Fabergé Lady Compliquée is a remarka-
ble luxury watch known for its intricate craftsmanship and artistic design. This time-
piece features a mesmerizing dial that pays homage to the famous ‘Peacock Egg’ of
1908 from Fabergé. It features a hand-engraved peacock in 18 karat gold, a dia-
mond-set bezel and a retrograde hand-winding movement. The Lady Compliquée
exemplifies Fabergé’s heritage of creating exquisite, one-of-a-kind pieces that blend
horological precision with artistic elegance, making it a coveted collector’s item for
those who appreciate the fusion of haute horologerie and fine artistry. While these
principles share similarities, it is important to note that luxury brands may employ
both strategies simultaneously and prioritize one over the other. The choice between
Luxury branding 227
the scarcity principle and rarity principle depends on the brand’s identity, marketing
strategy and the specific product in question.
As discussed previously, luxury is highly contextual. In this regard, the brand’s
origin plays an important role. People regularly incorporate brand origin in their
decision making.18 For instance, Swiss watches, Italian leather goods, French per-
fume, Belgian chocolate, Scotch whisky and Chinese silk are used as important cues
in buying decisions. French and Italian luxury brands are able to charge substantial
premiums due to their brand origin which other brands cannot. Hence, to benefit
from this typical consumer preference, many luxury brands from emerging markets
often employ French or Italian-sounding names to evoke a sense of European so-
phistication and heritage, which can enhance their perceived prestige and appeal to
a global luxury consumer base.19 For instance, Indian luxury brand Hidesign uses
sub-brand names such as Dione, Keira, Cindy, Kelly and Heidi. Similarly, the
Japanese lingerie brand Ravijour combines French words to evoke a touch of
European luxury.20
Scholarly debate
Kapferer, J N and Valette-Florence, P (2016) Beyond rarity: The paths of luxury

desire. How luxury brands grow yet remain desirable, Journal of Product and
Brand Management, 25 (2), 120–33
Shukla, P (2011) Impact of interpersonal influences, brand origin and brand image on
luxury purchase intentions: Measuring interfunctional interactions and a
cross-national comparison, Journal of World Business, 46 (2), 242–52
Luxury brand signalling, symbolism

and value perceptions
Luxury brand signalling is a critical aspect of how high-end brands communicate
their exclusivity, quality and prestige to consumers.21 It involves using various cues
and signals to convey the unique attributes and desirability of luxury products. One
key signalling strategy is through price positioning.22 Luxury brands often set their
prices significantly higher than their competitors, signalling their commitment to
premium quality and exclusivity. For example, brands like Rolex and Hermès are
known for their high price tags, which signal their luxury status and attract consum-
ers seeking products associated with superior craftsmanship and status.
Another essential element of luxury brand signalling is through branding and

logo design. Luxury brands often invest heavily in creating distinctive logos and
brand imagery that are instantly recognizable and associated with prestige.23 For
instance, the interlocking ‘C’ logo of Chanel and the iconic monogram of Louis
Vuitton serve as powerful signals of luxury and craftsmanship, allowing consumers
to showcase their affiliation with these brands. Additionally, limited edition and ex-
clusive collaborations with renowned designers or artists, such as the partnership
between Louis Vuitton and Jeff Koons, can further enhance the brand’s signalling of
uniqueness and desirability.24 In summary, luxury brand signalling encompasses var-
ious strategies, including pricing, branding and collaborations, to convey exclusivity
and prestige to consumers. These signals help consumers identify and connect with
luxury brands, fostering a sense of aspiration and desire for their products while
maintaining their elevated status in the market.
Symbolic motivations arise from the aspiration for social prestige and status.25
These motivations manifest in a consumption pattern that communicates signifi-
cance and information regarding one’s social standing, identity, personality and
personal preferences.26 When a product or service serves as a symbol, its value is
determined by the social status and influence it conveys within the network, rather
than its intrinsic cost.27 The theory of network effects, also known as network
externalities, provides an explanation that the symbolic value individuals assign to a
product or service is influenced by the growing number of users.28 Thus, the more
people who own a luxury brand, the more desirable it becomes to others. This is
because luxury brands are often seen as status symbols, and people want to be
associated with brands that are popular and exclusive. For example, Balenciaga, the
Spanish luxury fashion house, founded in 1917, has grown in popularity among
young consumers for its avant-garde design and its high-end luxury clothing.
Interestingly, the more shocking designs the brand has introduced, the more popular
it has become. This symbolic motivation and the resulting practice of symbolic con-
sumption of luxury brands are observed across historical periods.29
Thorstein Veblen, in his seminal 1899 work on the theory of the leisure class, ar-
gued that a substantial portion of goods consumption was driven by the desire to
attain and affirm one’s social status.30 He contended that affluent members of society
engaged in consumption to create ‘invidious comparisons’, whereas those with fewer
resources pursued ‘pecuniary emulation’. This concept was further expanded by
economists introducing network externalities. These externalities, often called ‘net-
work effects’, occur when the value of a product or service increases as more people
use it. For example, the more the number of people own smartphones, the more use-
ful they become because people can easily communicate with others and access vari-
ous apps and services. Based on the above logic, economists assert that three primary
motivational factors underpin the inclination to engage with luxury brands: the snob
effect, the bandwagon effect and the Veblen effect.31
Luxury branding 229
Buyer motivations
Snob motivation refers to people’s desire for unique goods. This motivation dampens
consumer demand for a luxury brand because more people are buying the brand.
The underlying reason is due to the negative effects of the expanding network, also
known as the negative network effect. In other words, the consumer of the luxury
brand is unable to differentiate from others through the uniqueness of their con-
sumption.32 Hence, popularity of a luxury brand can destroy its utility for the snob-
bish consumers.33 For example, Burberry, a British luxury brand, faced a period of
struggle in the early 2000s when its iconic check pattern became associated with
lower socio-economic youth segments and rampant counterfeiting. This led to sub-
stantial reputational damage and decline in sales as the traditional Burberry buyers
shunned the brand.34 Burberry subsequently underwent a major rebranding effort
which also involved jettisoning the infamous check print. This helped the brand to
regain its previous status as a true luxury fashion house. Having reclaimed its luxury
status, Burberry reintroduced the pattern 13 years later.35 Luxury brands, therefore,
should carefully monitor and maintain the exclusivity and uniqueness signals associ-
ated with their offerings.
In contradiction to snob motivation, bandwagon motivation arises when consum-
ers purchase luxury brands because of their popularity. The bandwagon effect is
observed when demand for a luxury brand is increased because socially relevant in-
dividuals and groups are also consuming it at a given price. For example, consumers
may buy a luxury brand that is being endorsed by a popular social media influencer,
a celebrity or a relevant group of people. Thus, the bandwagon effect is similar to
positive network effects, where a product becomes more desirable as its popularity
increases.36 This associated consumption of luxury brands grounded in the band-
wagon effect is driven by social approval and a sense of belonging to the relevant
status groups. Consumers use these luxury brands as signals about their status and
belonging to the social community. Luxury brands, thus, have to strike a balance
between their popularity and exclusivity. For example, the brand Von Dutch,
launched in the mid-1990s became highly popular for its trucker hats, jackets and
t-shirts in the early 2000s with celebrities such as Beyoncé, Paris Hilton, Whitney
Houston, Madonna, Britney Spears and Justin Timberlake adorning the brand.37
However, in the late 2000s the brand experienced a rapid decline due to saturation
driven by its increasing popularity and counterfeiting.38 As the above example illus-
trates, if too many people own a particular luxury brand, the exclusivity, rarity and
uniqueness may get diluted, which, in turn, will trigger the snob effect, resulting in
consumers abandoning the brand. However, if the brand remains too exclusive,
many consumers would not be able to purchase it, and thus could result in sales
revenue and profits losses.
Veblen motivation, on the other hand, refers to the traditional definition of con-
spicuous consumption regarding the willingness of people to buy high-end luxury
goods in order to display their wealth and financial prowess.39 Herein, the perceived
prestige and desirability of a luxury brand increase as its price rises, contrary to the
law of demand. In other words, consumers are drawn to higher-priced luxury items
as a symbol of status and exclusivity. This suggests that due to Veblen motivation, a
luxury brand’s price increase might not lead to loss of sales.
Classifying luxury
Considering the complex characteristics of both the construct of luxury and value,
luxury has been classified from various perspectives, encompassing functional, expe-
riential, hedonic and symbolic dimensions. As previously mentioned, the historical
significance of luxury in shaping individual and social identities is widely
acknowledged. This has led to substantial research on value perceptions associated
with luxury brands that reflect functional, social and personal aspects. Functional
value represents what the luxury goods or services ‘do’ in the real world, rather than
what they ‘represent’.40 Consumers anticipate that a luxury product should be prac-
tical, exhibit excellent craftsmanship and possess a distinctiveness that fulfils their
desire for differentiation.41 For instance, since inception, Louis Vuitton trunks were
designed with exceptional functionality, capable of enduring the extensive world
travels of their clientele. Likewise, Patek Philippe underscores its heritage and endur-
ing quality in watchmaking through its advertising tagline, ‘You don’t truly possess
a Patek Philippe; you simply care for it for the succeeding generation.’ Academic
research suggests that highlighting price, quality and uniqueness can allow luxury
brands to demonstrate their functional value.42 The assessment of the overall value
of any luxury brand continues to heavily involve social value perceptions. These
perceptions stem from its image and symbolism in connection with or separation
from demographic, socio-economic and cultural-ethnic reference groups.43
Social value perceptions relate to the instrumental aspect of impression management
and are driven by outer-directed consumption preferences and reflect in social salience
and social identification.44 Scholars have highlighted how luxury brands strategically
position themselves to create associations with exclusive social circles or cultural refer-
ences, amplifying their allure and social value in the eyes of consumers.45 Consequently,
these social value perceptions serve as a vital dimension in understanding the intricate
dynamics of luxury brand consumption through both acquisition and display of luxury
brands. Luxury brands regularly utilize this dimension. For example, Louis Vuitton’s
‘Neverful’ handbag campaign was accompanied by the tagline ‘Neverful. Never out of
style’, highlighting the social approval and classic nature of the product.
While social referencing and status signalling have received significant attention
throughout the history of luxury branding debate, an important thought that is be-
coming more prominent in recent times is the idea of luxury consumption directed
towards pleasing the self.46 Personal value perceptions associated with luxury brands
are grounded in self-enhancement which relates to the expressive dimension of
Luxury branding 231
impression management.47 Luxury brands exploit personal value perceptions

through three sub-dimensions that reflect the internal and external facets of the self
through materialism and hedonism associated with luxury brand consumption. For
example, Gucci, the famous Italian fashion house, is known for its bold and flam-
boyant designs. Its advertising often features young and attractive people who are
having fun and enjoying themselves. This creates a sense of excitement and hedon-
ism, which can be appealing to consumers.
Supreme exploits luxury brand symbolism and value perceptions
Supreme, the iconic streetwear brand founded in New York City in 1994, has
remarkably transformed streetwear culture by successfully utilizing luxury brand
signalling, symbolism and value perceptions to engage customers. What began as a
small skateboarding shop in downtown Manhattan has evolved into a global cultural
phenomenon, with consumers across the world eagerly buying into in the brand’s
unique blend of streetwear and luxury. The brand is known for its limited-edition
products, high prices and association with hip-hop culture.
Supreme cleverly employs luxury brand signalling by adopting a minimalist yet
instantly recognizable logo – the bold red box with ‘Supreme’ in white Futura Heavy
Oblique font. This iconic branding serves as a symbol of exclusivity and authenticity.
Supreme’s limited product releases, typically in small quantities, create a sense of
scarcity, driving up demand and reinforcing the brand’s luxury appeal. The
collaboration with luxury fashion houses like Louis Vuitton further elevated
Supreme’s status, showcasing its ability to align with traditional luxury while
maintaining its streetwear roots.
Supreme understands the power of symbolism. The brand’s ability to incorporate
cultural references, often subversive or nostalgic, into its designs, resonates with its
core audience. Supreme has effectively tapped into the symbolism of counterculture,
skateboarding and hip-hop, establishing itself as a symbol of rebellion and
authenticity. Items like the Supreme Box Logo Hoodie have become status symbols
within streetwear culture, signifying not just clothing but a lifestyle and identity.
Supreme’s limited editions and collaborations generate anticipation and
excitement, contributing to the perception that owning a Supreme product is an
achievement. The resale market for Supreme items, where certain pieces can fetch
prices many times their original retail value, reinforces the idea that Supreme offers
both financial and social value. Customers view Supreme as an investment, where
the value of ownership extends beyond the utility of the product itself.
As a result of these strategies, Supreme has been able to successfully exploit
luxury brand signalling, symbolism and value perceptions and has become one of the
most successful fashion brands in the world.
Contemporary growth challenges

for luxury brands
As the marketplace evolves, luxury brands, which were once the preserve of the elite,
are now desired by other socio-economic classes as well. The business growth aim
often conflicts with the scarcity and rarity principles of luxury branding and the
knowledge on why and how consumer commit to luxury brand is nascent.48 Luxury
brands are also faced with the choice of following the successful branding practices
of non-luxury brands, for instance corporate social responsibility, sustainability,
digitization, corporate identity and value management, the dilemma of the luxury
brand extending into ‘masstige’ and brand dilution due to counterfeiting. This sec-
tion examines several such contemporary challenges that are faced by the luxury
brands.
Given their visibility and high symbolic and cultural capital, consumers increas-
ingly expect luxury brands to engage in and be vocal about various social issues such
as sustainability, climate change and racial equality.49 While known for their exclu-
sivity, many luxury brands are embracing ethical practices in response to consumer
demand and their own strategic vision.50 Yet, the impact of these efforts on their
profitability remains uncertain, with mixed research findings.51 It should be noted,
however, that such society-oriented practices are aimed towards strengthening the
luxury brand’s image and attitudes, rather than for increasing profitability or market
performance. While some luxury brands at the corporate level such as the Kering
group (owner of Gucci, Balenciaga, Brioni, etc.) have achieved high sustainability
rankings, consumer attitudes towards the individual luxury brands and their sustain-
ability initiatives appear ambivalent.52 In contrast, others show that depending on
the appeal used by the luxury brands, consumers prefer sustainable luxury brands.
For example, when a brand uses self-pride appeal-based communication, it heightens
the luxury dimension, however, a gratitude appeal in communication increases the
sustainability association.53 Gucci’s Chime for Change campaign, launched in 2013,
is a global initiative advocating for gender equality and women’s empowerment. The
brand raises awareness and funds for various projects aimed at improving the lives
of women and girls worldwide, focusing on education, healthcare and justice.
Most luxury brands concentrate their corporate social responsibility efforts on the
supply side, focusing on sustainable raw materials, procurement processes and labour
management. For example, Prada has developed a new code of conduct for the group’s
suppliers to improve its sustainability and social responsibility credentials and con-
verted all the production of virgin nylon into regenerated nylon.54 Similarly, Tiffany
& Co. is committed to responsible sourcing of diamonds and has implemented initia-
tives to track the provenance of their stones, ensuring they come from ethical and
environmentally responsible sources. Some also engage in demand-side initiatives,
Luxury branding 233
such as charity events and partnerships with non-profit organizations. For example,
Burberry has a comprehensive CSR programme that includes sustainability efforts
like reducing its carbon footprint and water usage. They also invest in communities
through educational and philanthropic initiatives.55 Similarly, for its re-nylon project,
Prada will fund 1 per cent of its proceeds to the Sea Beyond charity.56
The rapid growth of luxury brands in recent decades is largely attributed to the
increasing demand from emerging markets such as China, India, Russia and Brazil.57
The consumers in emerging markets may not have same per capita income as their
developed market counterparts, however, there is a substantial growth in the so-
called nouveau riche segment who aspire for global luxury brands.58 To satisfy the
demand of the growing customer base globally, luxury brands have engaged in a
variety of brand extensions. These have been termed at times as ‘accessible luxury’,59
‘masstige’60 or ‘democratization’.61 One prominent example is the expansion of
Italian fashion house Gucci into the world of fragrance and beauty. By applying its
distinctive design aesthetic and luxury appeal to perfumes, makeup and skincare
products, Gucci successfully extended its brand into the beauty sector, attracting a
wider audience while maintaining its premium image. Another example is Louis
Vuitton’s foray into the realm of luxury travel and hospitality with their Louis
Vuitton Maison concept. Through this extension, Louis Vuitton offers customers a
holistic brand experience, including hotels, restaurants and cultural spaces, reinforc-
ing the brand’s commitment to luxury and craftsmanship in a new and immersive
way.62 Similarly, Armani has extended its brand in haute couture, ready-to-wear,
eyewear, home furnishings, fragrances, hospitality including clubs, hotels and re-
sorts, restaurants, and museums, as well as beauty and food products.63 While such
brand extensions allow these luxury brands to reach wider audiences, it has also
meant loss of focus. For instance, academic research shows that when luxury brands
extend themselves to engage middle-class consumers, traditional luxury consumers
tend to abandon democratizing luxury brands.64
Counterfeiting
Counterfeiting poses significant challenges for luxury brands, affecting their
reputation, revenues and intellectual property rights.65 Such challenges are also

substantiated by growing research evidence.66 The counterfeit luxury goods market
is estimated to be a $1.2 trillion economy.67 The counterfeiting of luxury goods has
become increasingly sophisticated, making it difficult for consumers and even experts
to distinguish fake products from genuine ones. This not only erodes consumer trust
but also damages the brand’s image as counterfeits often lack the quality and crafts-
manship associated with luxury items. The global luxury industry loses billions of
dollars annually due to counterfeit sales (Figure 13.3).
Figure 13.3 Counterfeiting remains a big business across the world
SOURCE Author’s
This loss not only affects the revenue stream of luxury brands but also hinders their
ability to invest in innovation and maintain their competitive edge.68 Moreover, the
proliferation of counterfeits can lead to legal battles, as luxury brands seek to protect
their intellectual property rights, incurring significant legal expenses. For example, it
is estimated that French luxury group LVMH spends as much as $17 million every
year on anti-counterfeiting legal expenses.69 Additionally, the availability of counter-
feit products in online marketplaces has exacerbated the problem, making it harder
for luxury brands to control the distribution and sale of fake goods. For example,
Amazon removed more than six million counterfeit luxury and non-luxury goods in
2022 alone.70 These challenges highlight the pressing need for luxury brands to in-
vest in anti-counterfeiting measures to protect their brand equity and maintain their
exclusivity. To fight counterfeiting, luxury brands are also investing in the latest tech-
nological solutions including blockchain. For instance, several leading luxury brands
including LVMH, Prada and Cartier have partnered in establishing the Aura
Blockchain Consortium, which offers shoppers tamper-proof access to information
about the product’s supply chain and proof of ownership.71 Luxury brands are also
using other initiatives such as microprinting and holograms, serial numbers and
RFID tags, and unique design patterns to fight the counterfeiters.
Luxury branding 235
Digitalizing luxury
One of the foremost challenges faced by luxury brands is digitization. For hundreds
of years, luxury brands were largely available in large cosmopolitan cities of the
world such as London, Venice, Monte Carlo, New York and Paris. However, the
rapid pace of digital evolution adds increasing challenges for luxury brands as they
are now globally desired and are spurred to engage with customers residing in re-
mote corners of the world. Consequently, this expansion has notably broadened
luxury brands’ reach and the esteem attributed to them by the consumers.72
Furthermore, it has provided luxury brands with the means to establish meaningful
interactions with both current and prospective customers, extending beyond the
confines of physical retail spaces. Internet technologies provide a dynamic platform
for luxury brands to engage with the consumers, contrasting with the one-way com-
munication channels of the past, such as print and TV ads. Yet, they bring forth
significant challenges. Initially, many luxury brands were hesitant to embrace these
technologies, leading to delayed online presence and the emergence of luxury por-
tals, for instance, Net-a-Porter and Farfetch.73 The second challenge is the depth and
quality of engagement. While the internet allows global connections, it diminishes
the traditional luxury shopping experience, impacting service quality and personal
interactions. Maintaining a consistent, high-quality digital experience is a major
challenge for the luxury brands.74 Furthermore, online commerce threatens the
uniqueness and exclusivity, historically linked with luxury. In the past, customers
had to invest substantial effort to gather information about luxury brands. However,
social media now facilitates easy comparisons of attributes such as price, style and
trends among peers.75 Thus, alongside customer engagement, luxury brands face the
task of managing multi-channel expectations while preserving a unique and exclu-
sive brand narrative.76
Luxury brands have also embraced digitalization to communicate their social en-
gagement initiatives. In particular, many luxury brands are engaging in brand activ-
ism, wherein a brand takes a stand on contemporary social political challenges.77
Using social media, luxury brands have become increasingly vocal about their views
on socio-political issues. For instance, following the George Floyd murder by the
police and the rise of Black Lives Matter movement, many prominent luxury brands
including Gucci, Fendi, Louis Vuitton and Dior have taken a stance and spoken out
against racial injustice in their social media outlets. Burberry also announced its
boycott of Xinjiang cotton sourcing from China due to concerns over alleged human
rights abuses in the region, over social media.78 It also allowed the brand to engage
in a dialogue with today’s digital savvy consumers. Such brand activism initiatives by
luxury brands receives attention from global media outlets and the public at large,
and helps to strengthen their image.
Luxury brands are also embracing the latest immersive digital technologies for
communicating with customers. For instance, Ralph Lauren, Gucci, Burberry and
several other brands have opened their collections on the video game Roblox, which
is especially popular among the young players.79 Similarly, Balenciaga has collabo-
rated with globally popular game Fortnite and launched a range of hoodies, clothes
and skins.80 Gucci has partnered with The Sandbox to create a virtual world called
Gucci Vault. Gucci Vault is a space where users can collect digital Gucci items, such
as non-fungible tokens (NFT) and virtual clothing. In collaboration with Superplastic,
a company that creates digital characters and toys, Gucci created a collection of 100
NFT. This collaboration features the digital artworks of Superplastic characters,
Janky and Guggimon, in Gucci-inspired designs. The NFTs were sold on the OpenSea
marketplace and raised over $2 million.81 While faced with technical glitches and
other setbacks, Dolce & Gabbana and Tommy Hilfiger were among the major names
participating in the first ever Metaverse Fashion Week, which saw the brands create
elaborate experiential boutiques in the Decentraland metaverse.82 Such initiatives
heighten the experiential dimension of luxury branding.
Digitalization has allowed substantial customization opportunities for luxury
brands. Many luxury brands have embraced the practice of customization to en-
hance the online shopping experience for their discerning clientele. Luxury brand
customization allows customers to personalize products, whether it’s a bespoke suit,
a monogrammed handbag or custom-fitted jewellery. This online trend not only
caters to individual preferences but also amplifies the exclusivity associated with
luxury consumption. Through user-friendly digital platforms, customers can select
materials, colours and design elements, effectively co-creating their unique luxury
items. Brands like Louis Vuitton, Burberry, Longchamp and Rolex have integrated
these customization options seamlessly into their websites, enabling customers to
engage with their products in a more intimate and personal way. Luxury customiza-
tion practices online not only cater to the desire for unique, one-of-a-kind items but
also strengthen brand loyalty and engagement in the digital realm, where the concept
of bespoke luxury has found a new and thriving home.
While many luxury brands are embracing social media and other digital technolo-
gies, some exclusive brands are shunning social media and attempt to replicate their
customers’ unique experience digitally through other avenues. For example, Bottega
Veneta shut down its social media accounts in 2021 and devised a special app to
curate customer experience.83 Other brands such as Rolls-Royce, Balenciaga and
Celine also use social media sparsely, to maintain their exclusivity focus.
Luxury brands in the digital marketplace are adapting to the evolving landscape
by leveraging online platforms to reach wider audiences and cater to the changing
preferences of tech-savvy consumers. They prioritize e-commerce, offering exclusive
Luxury branding 237
online shopping experiences while maintaining their aura of exclusivity. Digital

strategies, such as immersive content, social media engagement and limited-edition
digital releases, are now integral to luxury brands’ presence, ensuring they stay rel-
evant and alluring in the digital age.
Chapter summary
In this chapter, we examined the unique context of luxury branding. While the con-
ventional brand management concepts apply equally to luxury, it is a complex con-
struct that has been defined through varied lenses, such as the generic, trait-based
and experiential. The trait approach to luxury allows us to understand the distinc-
tion between luxury and non-luxury brands. Luxury brands thrive on their unique
symbolism, signalling and value perceptions. Various counteracting forces such as
snob, bandwagon and Veblen motivations drive luxury brand consumption. We also
learnt the various types of values that are important for luxury brands including
social, personal and functional value. With the growth of luxury brands globally,
there are a number of challenges relating to socio-political engagement, brand exten-
sion and counterfeiting that these brands face. Finally, we understood how luxury
brands are embracing digital technologies to strengthen their brand image and cus-
tomer-brand relationships.
Key concepts
●● Luxury branding
❍❍ Luxury brand signalling
❍❍ Luxury brand motivations
❍❍ Luxury value perceptions
●● Difference between luxury and non-luxury brands
●● Luxury brand activism
●● Counterfeiting
●● Democratization/masstige
●● Digital luxury
Exercise questions
1 Discuss the different approaches used in defining luxury.
2 Critically reflect on what makes a product a luxury brand.
3 Explain the snob, bandwagon and Veblen motivations that underpin luxury
branding using examples.
4 Discuss the different value perceptions that drive luxury consumption.
5 Describe in detail the contemporary growth challenges faced by luxury brands.
6 How are luxury brands embracing digital technologies? Explain with examples.
7 Using examples, explain how luxury brands should engage in activism particularly
using the social cause-brand image fit concept.
CASE STUDY Can luxury fashion brands ever really be inclusive?
Read the following article by Paurav Shukla and Dina Khalifa, which examines the extent
to which luxury fashion brands can be inclusive. Many invest in initiatives to address
environmental concerns, e.g. the Kering group aiming to reduce greenhouse gas
emissions by 50 per cent by 2025 or health issues (such as LVMH providing their
manufacturing facilities to make free hand sanitizer in France). However, there is doubt
that the exclusive nature of luxury brands (out of the price range for most consumers) can
ever align with a public image of sustainability and environmental or social awareness.
SOURCE https://theconversation.com/can-luxury-fashion-brands-ever-really-be-inclusive-165187
Case questions
1 Critical reflect on whether ‘luxury brands can really be inclusive’, based on the traits
associated with luxury.
2 This case study suggests that many luxury brands’ approach to inclusivity is a reaction
to a crisis. Explain using examples.
3 What kind of symbolic motivations can be triggered among consumers when luxury
brands engage in activism?
4 Through your own web search, identify examples of luxury brands that have
proactively embraced the idea of inclusivity.
5 Identify ways in which luxury brands can improve their equality, diversity and inclusion
initiatives through online and offline initiatives.
Luxury branding 239
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244
Sensory 14
branding and
neuromarketing
Overview
In this chapter, we first explain the role of sensory perceptions in creating and sus-
taining brand differentiation. We then discuss the types of human sensory percep-
tions, with examples of how brands use these perceptions. In the following section
we discuss crossmodal sensory perceptions and the latest advancements in research.
In the final section, we discuss neuromarketing and its impact on branding practice.

●● Understand sensory branding

●● Gain insights into types of sensory perceptions
●● Develop an understanding of ‘crossmodal’ sensory perceptions
●● Comprehend applications of neuromarketing perspectives in branding
The role of human sensory perceptions

Human sensory perceptions are the processes by which people receive, select, organ-
ize and interpret information from the external world through their five senses: sight,
hearing, smell, taste and touch. Sensory perceptions play a crucial role in consumer
decision making, as they influence how consumers perceive, evaluate and choose
products and services.1 Sensory perceptions also affect consumers’ emotions, memo-
ries, preferences and satisfaction.2 In the physical retail environment, marketers have
long understood the power of sensory perceptions in guiding consumer decision
making and brand choices. For instance, academic research showed that when retail
Sensory branding and neuromarketing 245
Figure 14.1 S ince 2018, all Apple stores use a signature scent developed in collaboration
with renowned perfumer Christophe Laudamiel
SOURCE Unsplash.com/Mihály Köles
stores use smells that are perceived as warm (e.g. vanilla, cinnamon), compared to
cool (e.g. peppermint, eucalyptus), consumers assumed the environment to be more
socially dense, that is, they perceived the presence of others in the environment
(Figure 14.1). In such warm-scented retail environments, social density perceptions
also lead to a sense of loss of power, or perceived control of their surroundings.
Interestingly, the perceived loss of power results in consumers preferring power-com-
pensatory behaviour which encourages buying expensive brands.3 Appropriate use
of sensory elements within the retail environment has become a well-established tool
that encourages browsing, time spent within store, employee interactions and pur-
chase behaviour. Advancements in sensory marketing research has provided new
avenues for retailers to interact and engage with their customers.
Brands use sensory perceptions to create differentiation and distinctiveness in the
market by offering unique sensory experiences that appeal to consumers’ senses and
creating positive associations with the brand. Differentiation refers to the extent to
which a brand is perceived as different from its competitors on attributes that are
relevant and important to consumers. Distinctiveness refers to the extent to which a
brand is easily recognizable and memorable among other brands in the same cate-
gory.4 Once established, the distinctive sensory features associated with the brand
turn in valuable distinctive assets,5 as discussed in Chapter 4.
Some examples of how brands build distinctive sensory assets successfully using
sensory perceptions are:
●● Sight: Brands can use visual elements such as colours, shapes, logos, characters,
images, fonts, packaging, product design and service delivery to create distinctive
visual identities that attract consumers’ attention and convey the brand’s
personality and values.6 For example, Coca-Cola uses its iconic red colour and
script logo to create a strong visual identity that is easily recognizable and
associated with happiness and refreshment.
●● Hearing: Brands can use auditory elements such as sounds, music, jingles, slogans,
voiceovers and sound effects to create distinctive auditory identities that capture
consumers’ attention and evoke emotions and memories.7 For instance, Netflix
uses its famous sonic branding approach to create a distinctive auditory identity.
●● Smell: Brands can use olfactory elements such as scents, fragrances, aromas and
odours to create distinctive olfactory identities that stimulate consumers’ senses
and influence their mood and behaviour.8 Coffee shop brands use the smell of
freshly brewed coffee to create a distinctive olfactory identity that attracts
consumers and enhances their experience of the brand.
●● Taste: Brands can use gustatory elements such as flavours, tastes, textures and
sensations to create distinctive gustatory identities that satisfy consumers’ senses
and preferences.9 Ice-cream brand Baskin & Robbins continuously creates unique
and appealing flavours, such as Rocky Road, Buttercream Cupcake, Mango
Coconapple, Sumatra Coffee Toffee and many others.
●● Touch: Brands can use tactile elements such as materials, shapes, textures,
temperatures, weights and vibrations to create distinctive tactile identities that
appeal to consumers’ senses and perceptions.10 For example, 3D and 4D movies
offered by cinemas focus on tactile feedback for a more immersive viewer experience.
Human sensory perceptions are important factors in consumer decision making, as

they affect how consumers perceive and evaluate products and services. Brands can
use sensory perceptions to create differentiation and distinctiveness in the market by
offering unique sensory experiences that appeal to consumers’ senses and create
positive associations with the brand.
Scholarly debate
Biswas, D (2019) Sensory aspects of retailing: Theoretical and practical implications,

Journal of Retailing, 95 (4), 111–15
Zha, D, Foroudi, P, Jin, Z and Melewar, T C (2022) Making sense of sensory brand
experience: Constructing an integrative framework for future research,
International Journal of Management Reviews, 24 (1), 130–67
Types of sensory influences in branding

The five types of sensory influences as outlined in the previous section have been widely
researched. In this section, we discuss the importance of these cues in branding.
Visual elements in branding

Visual perceptions are often the first sensory cues that customers get exposed to in a
physical or digital environment. For example, before even entering a physical store, a
customer can see the brand name, colours, windows, lights, layout, employee appear-
ance, in-store crowding and other ambient features. Similarly, in a digital environment,
it is primarily the visual cues that customers first see. For instance, while browsing
through a website or an app, customers experience colour, style, format and other
visual features. Thus, due to the variety, visual cues are usually observed more often
than any other sensory cues.11 Brand managers focus substantial resources on visual
composition of their brand including logo, fonts, format, colours and packaging. The
visual sensory perceptions drive unique consumer behaviour. For example, research
shows that creative packaging can make customers more curious and encourage them
to process the information, leading to buying decisions.12 In this section, we focus on
several important visual cues that consumers consider in their decision making includ-
ing colour, fonts, characters and images, across physical and digital domains.
Colour is one of the most salient and influential visual elements that captures con-
sumers’ attention and evokes emotional responses. Colour includes three dimensions:
hue, saturation and value. Hue refers to the wavelength composition of a colour,
saturation corresponds to the degree of intensity, richness, strength or purity of a
colour, and value reflects the relative lightness or darkness of a colour.13 Each of these
dimensions can influence how brand meaning is conveyed. For example, red can
signify passion, excitement, urgency or danger, depending on the situation and the
culture.14 Fast food restaurants, accordingly, often use red in their store space and
branding. In addition, when choosing colours, brand managers need to be cognizant
about the additive and subtractive nature of colour. Additive colours (red, green, blue;
RGB) are used mostly in digital mediums (e.g. computers, tablets and mobile phones)
as these devices create colours by adding one set of hues to another. Subtractive col-
our models (cyan, magenta, yellow and black; CMYK) are used in print mediums (e.g.
newspapers, magazines), where colour creation occurs due to the absorption of cer-
tain wavelengths of colour while reflecting other wavelengths to the reader.
Colour can also convey meanings and associations that are biologically, culturally
and contextually dependent.15 According to the psychology of colour, colours can have
different effects on consumers’ moods, attitudes and behaviours. For instance, warm
colours like red, orange and yellow can generate biological responses through stimu-
lating arousal, appetite, increased attention and impulsiveness, while cool colours like
blue and green can induce relaxation, trust and calmness.16 17 In addition, colour has a
strong cultural dependency.18 Red, for instance, is considered auspicious in China and
India, and preferred by brides at their wedding; while it also signifies love in Western
cultures, and is ascribed to symbolize annual festivities such as Valentine’s Day.
Ascriptions of colours across cultures may have developed historically, drawing cul-
tural meanings rooted in the cultural psyche over time.19 Some examples of the cultural
meanings of colours are presented in Table 14.1. Colour can also affect consumers’
perception of product attributes, such as quality, taste, freshness or price.20 For exam-
ple, consumers perceived a chocolate bar as more expensive when it was wrapped in
gold foil than in silver foil.21 The above examples show the crucial role of colour in
creating brand associations across cultures. Brands should, therefore, be cognizant of
the impact on colour in their communications and branding.
Fonts are another visual element that can influence consumers’ perception and
evaluation of textual information. Fonts can communicate personality traits, emo-
tions and values that are consistent, or inconsistent, with the message or the brand
image.22 For example, serif fonts are often associated with tradition, elegance and
authority, while sans serif fonts are seen as modern, clean and simple.23 Fonts can
also affect consumers’ subjective cognitive processing of information, such as read-
ability and comprehension; its recommended that as large a type size as possible is
used in brand communications.24 For example, a study found that large fonts used in
warning labels reduced college students’ intentions to use e-cigarettes.25 Another
study found that dynamic right-slanted fonts in ads increase consumers’ behavioural
intentions.26 The font shape and typeface congruence facilitates stimulus processing,
thereby positively affecting perceptions of brand credibility, brand aesthetics and
brand value; the latter reflected in higher price expectations.27 For example, in the
wine industry it is understood that font width can produce difference meanings re-
Table 14.1 Different meanings of colours across cultures
Colour Cultural meanings
Black Thailand: bad luck

Hinduism: restoring chakra energies
Europe: mourning, cool, funeral, death
Blue Europe: soothing, bridalwear
China: immortality
Middle East: protection
Orange Ireland: Protestants
The Netherlands: favourite colour
Hinduism: sacred
Red Europe: danger, excitement, love
China: luck and fame
Celtic: death, afterlife
Green Islam: hope, virtue
China: exorcism
USA: money
Yellow Egypt: mourning
Buddhism: wisdom
Japan: courage
Figure 14.2 ine companies use different fonts for the bottle labels to demonstrate
W
varying levels of taste
SOURCE Unsplash.com/Louis Hansel
garding brand identity and product properties – for instance bold fonts are thought
to be reflective of strong taste, while thin fonts a delicate taste (Figure 14.2).28
Fonts also affect the pressing of the payment button in digital commerce. For
example, angular fonts, compared to round fonts, are perceived as harsh and thus
remind consumers about the pain of payment, thus reducing consumer purchase
intentions.29 Thus, successful branding requires an appropriate level of understand-
ing of the way fonts can influence consumer perceptions and decision making.
Anthropomorphism, the attribution of human characteristics to a brand, is an-
other important visual sensory branding approach. Brands regularly use human or
human-like characters in their logos, communications including advertisements, so-
cial media posts and other promotions. Such character-driven features can help
brands convey emotional meaning. For instance, the logo of Amazon has an arrow
going from A to Z which conveys the brand serving all types of products and the
yellow arrow is set out to represent a smile, evoking a sense of reliability and happi-
ness. Hermès, the iconic luxury brand, conveys its history and heritage of leather
goods craftsmanship by highlighting a picture of a Duc-carriage with a horse. Other
brands that use animals in their logos include Puma, Red Bull, Polo Ralph Lauren,
Firefox, Lacoste, Crocs, Jaguar and Ferrari.
The use of anthropomorphic characteristics is used beyond the logo by many
brands. Some brands use animals with human-like traits to convey their features. For
instance, the insurance company Churchill uses a British bulldog, the price comparison
portal comparethemarket.com uses a meerkat, the battery brand Duracell uses a rabbit
and the cereal brand Kellogg’s uses Tony the Tiger. Using animal characters, brands try
to communicate culturally construed meanings associated with the animal as the
brand’s own features, such as the loyalty and sincerity of a dog, the curiosity of a meer-
kat, the energy of a rabbit and the power of a tiger.
Other brands use more human-like characters in their communications as mas-
cots including the Michelin man, Ronald McDonald, M&M spokescandies, Mickey
Mouse by Disney, Rich Uncle Pennybags in Monopoly by Hasbro, Mario by
Nintendo and Jolly Green Giant by B&G foods. Similar to animal characters used
by other brands, human-like characters allow brands to utilize the wide range of
emotional attributes. Academic research on cuteness of characters suggests that the
use of anthropomorphic characters drives either careful or hedonic behaviours
among consumers depending on the kind of mental representation of kindchen-
schema (baby schema) they trigger. For instance, when the anthropomorphism is
identified as just cute (e.g. baby face on a product advertisement), it creates a mental
representation of vulnerability and caretaking, and thus leads to careful behaviour.30
On the other hand, products that are whimsically cute (e.g. a stapler that looks like
a crocodile) can lead to hedonic behaviours.31 Thus, the correct alignment of charac-
ters with the emotions integral to a brand can guide consumer decision making.
Digital domains, on the other hand, are unique because visual sensory perceptions
take primacy as customers cannot touch or feel the product. Thus, brands primarily
rely on visual aids, as outlined above, for building a better customer experience. In
this regard, the use of images, browsing ease, interactivity and adaptability are para-
mount.32 For instance, too many images on a web page may take a lot of time to load
if the internet connection is weak and may reduce the customer’s propensity to wait,
stay and interact with the brand. Similarly, if a web page lacks interactivity and can-
not adapt to the hardware device screen size, it may reduce the optimal experience.
Appropriate use of colours, fonts and anthropomorphism can increase the visual
aesthetics in both the physical and digital domains and can lead to satisfactory cus-
tomer experience.33 Thus, the optimal use of visual elements in digital brand com-
munications is crucial for effective digital branding.
Auditory elements in branding

In Chapter 4 we discussed the concept of sonic branding. Brands have long used
auditory sensory perceptions above and beyond visual perceptions to create a dis-
tinctive image. The auditory aspects of branding, such as jingles, slogans, specific
music tone, sound effects and voiceovers, can act as reminder and aid recall of a
brand. For example, the lion’s roar in MGM movies has been used for nearly 100
years, and more recently, the signature opening sounds of Amazon Prime and Netflix
have become well recognized. Such auditory cues can trigger thoughts about the
brand even when a brand name is not mentioned.34 Beyond recognition and recall,
auditory cues can help brands convey their product traits. For example, for food
products such as crisps or potato chips, the sound produced through the biting ac-
tion in an advert can convey the crispness and freshness of the chips.35
Further, how the brand name sounds is crucial. It is believed that almost
40 per cent of a product’s success may be attributed to a well-chosen brand name.36
Understanding the science of phonetics and sound symbolism is important for brand
managers. Academic researchers examining the linguistic attributes of top brands
have shown an apparent overrepresentation of the letters A, B, C, K, M, P and S,
when compared to the occurrence of these letters in the English dictionary.37
Moreover, greater fit between a brand name and its sound symbolism can convey the
desired meanings for customers. For example, a hiking boot brand with a sound
symbolism of ruggedness (e.g. Mammut, Timberland) and a moisturizing product
with a sound symbolism of softness (e.g. Dove, Olay) are preferred by the custom-
ers.38 Similarly, longer brand names (three-syllabic length or more) are perceived to
convey greater social status and higher social position compared to shorter names
(e.g. Lamborghini, Chanel).39 In addition, rounded or back vowel sounds (e.g. /o/ as
in frosh) is perceived as richer and creamier for an ice-cream brand.40 Apart from
vowels, consonants also play an important role in brand recognition. Research sug-
gests that brand names that begin with hard consonants (e.g. Pepsi, Pantene) lead to
greater brand recognition.41
Brands also embed auditory elements in their products to capture attention and
create the optimal customer experience. For example, motorcycle and car brands
devote substantial resources to how their engine sounds. Similarly, most smartphone
manufacturers include a click sound when a photograph is taken, while in reality
there is no manual switch involved. Perfume companies also invest in making sure
that optimal spraying sound is created when the spray nozzle is pressed by the con-
sumer.42
Beyond the embedded sonic elements in branding, external auditory elements can
also influence consumer decision making. For example, in physical retail brand envi-
ronments, music piped through the stereo system can influence customers’ pace of
browsing, shopping time and product choices. Auditory elements including tempo,
style/genre, volume and familiarity of music can also influence consumer choices.43
Counterintuitive to consumer perception, individuals actually spend longer in shops
when exposed to unfamiliar music. It is suggested that familiar music can increase
consumer arousal, which in turn, may lead to speedier shopping.44 The genre of music
played can also influence consumer brand choices. When supermarkets played French
music in the background, consumers increasingly bought more French wine than
German wine. However, when German music was played in the background, the pref-
erence was reversed.45 Moreover, classical music increased consumers’ willingness to
pay for hedonic products such as expensive wines, while country music increased util-
itarian purchases.46 Music and sound in general, thus, play an important role in brand-
ing and creating lasting brand associations.
Haptic elements in branding

Touch and feel are key components in consumer decision making of almost all prod-
ucts. Thus, the haptic element is an important aspect of consumer brand choices. For
example, when buying a sofa, consumers often try to visit home furnishing stores
and sit on different types of sofas to get a feel for them.
Similarly, when buying clothes or a car, many consumers regularly attempt to
experience the product first-hand (Figure 14.3). The haptic inputs offer consumers
information about four properties of a product: texture, hardness, temperature and
weight.47 Such inputs can drive consumer decision making. For instance, when
choosing bed mattresses, some consumers prefer soft, while other prefer hard mat-
tresses. While consumers can perceive the texture of a mattress in a physical home
furnishing shop, they cannot do so in the digital environment. Thus, leading direct-
to-consumer brands such as Simba, Emma, Casper and Nectar, highlight the levels of
firmness of their products in their advertising and communications. Further, to en-
hance user experience, smartphone brands such as Apple and Samsung spend consid-
erable resources on designing optimal haptic inputs.
Figure 14.3 nderstanding the power of haptics, many stores allow consumers to touch
U
and feel the product freely
SOURCE Unsplash.com/Clark Street Mercantile

The need for touch is critical for consumers in evaluating products. It is a growing
interest area of academic research, and new insights are continuously adding to
our knowledge. Placing a product behind glass can inhibit touch, however, it can
also increase the perceived luxuriousness of the brand.48 Many luxury brands,
thus, place their products inside a glass box or put up barriers so that shoppers
cannot touch the product. However, this can also cause shopper frustration.49
Academic research shows that allowing consumers to touch the brand can enhance
perceived ownership effect, and this, in turn, can lead to greater purchase inten-
tions.50 At the same time, products that are previously touched by other shoppers
are evaluated less favourably, which is called the product contamination effect.51
Although these research findings may seem inconsistent, it is clear that touch has
an important impact on consumer in-store behaviour, and is a potent topic of fur-
ther research and applications in retail branding.
In many countries people mostly use cutlery, such as a spoon, fork or chopsticks,
instead of their fingers to eat food. Thus, the manual haptic feedback through fingers
is mostly absent. In these countries, consumers mostly rely on oral haptics, feeling
things through their mouth, when making judgements about food products. Thus,
many food and beverage brands are spending considerable resources on understand-
ing oral haptics.52 For example, foods with hard and rough (vs soft and smooth)
haptic properties are perceived as healthier.53 Such findings have important implica-
tions for consumer wellbeing.
Olfactory elements in branding

Olfactory branding is the use of scent to create a distinctive and memorable identity
for a brand, product or service. It can enhance the emotional connection between
consumers and brands, as well as influence their behaviour and preferences.54
Olfactory branding can also differentiate a brand from its competitors and create a
competitive advantage in the market by creating fragrance-related cues in customer
minds (Figure 14.4). For example, walking outside a coffee shop in the morning, the
smell of roasted beans may trigger the purchase of coffee and other related products,
such as croissants or muffins.
Olfactory branding is based on the premise that smell is a powerful and primal
sense that can evoke memories, emotions and associations.55 Smell is also closely linked
to taste, which can affect the perception of food and beverage products. It can influ-
ence mood, cognition and wellbeing, as well as social and cultural interactions.
Research suggests that scented environments can enhance employee productivity, im-
prove perceptions of product quality, increase duration of retail visit and purchase in-
tentions among consumers, and boost consumers’ willingness to pay.56 For example,
British Airways has developed a unique scent that is diffused in its terminals, lounges
and planes. The scent is designed to create a pleasant, relaxing and adventurous mood
Figure 14.4 S mell is a powerful trigger for consumer action and brands use it regularly
in their marketing efforts
SOURCE Unsplash.com/bundo
for travellers. The scent is also used in the airline’s bathroom soaps and hand lotions.57
Similarly, retail brand Abercrombie & Fitch uses its own line of scents in stores to in-
stigate customer arousal and purchase intentions.58 Olfactory or scent branding is also
used by hospitality brands such as Hyatt, Taj, John Lewis, Starbucks and Disney
among many others.59
However, olfactory branding is not a one-size-fits-all strategy. Smell sensitivities
vary among individuals based on the environmental and cultural aspects. People liv-
ing in less-polluted environments tend to have better sense of smell compared to
those living in highly polluted environment.60 Smells may have a cultural aspect,
with preferences, associations and meanings differing across cultures. For example,
in Hinduism, jasmine is considered sacred to goddess Shakti, who embodies fertility
and divine energy. Similarly, in Sufi mysticism, the fragrance of jasmine is often used
as a symbol of the soul’s journey toward union with the divine. On the other hand,
in Thai and Chinese cultures, jasmine is often associated with femininity and grace.61
In the Philippines, jasmine fragrance symbolizes purity, simplicity and humility, and
it is often used in religious offerings and as a symbol of national pride. While in most
Western cultures, jasmine fragrance is associated with purity and virtue, in some
parts of South Asia, including Sri Lanka, jasmine garlands are placed on the bodies
of the deceased as a gesture of respect and to mask the scent of decay.62 Therefore,
olfactory branding needs to consider the cross-cultural differences in olfaction and
language, as well as the context and purpose of scent usage.
Gustatory elements in branding

Gustatory (i.e. taste) branding is a powerful and effective way of creating and man-
aging a brand image, as it can influence the perception, preference and behaviour of
consumers, and create a lasting and emotional connection with them. Gustatory
branding is usually associated with food products. For example, with regularly used
products such as toothpaste or mouthwash and indulgent products such as choco-
lates or ice cream, gustatory associations are crucial.63 The Swiss chocolate brand
Lindt is known for its high-quality and premium products, which are characterized
by their smooth and rich taste, as well as their distinctive shapes and packaging.
Lindt uses gustatory branding to convey its brand values of excellence, tradition and
innovation, and to create a strong emotional bond with its customers, who associate
Lindt with indulgence, pleasure and happiness.64 Moreover, gustatory branding is
not limited to food products only. It is used by a variety of other products wherein
taste sense is employed.65
Gustatory branding can also help a brand to stand out from the crowd, to adapt
to different markets and cultures, and to communicate its values and personality.66
Gustatory branding is, therefore, an essential component of a successful brand man-
agement strategy for food and beverage brands. There are five different tastes that
the human sensory system can evaluate: sweet, salty, bitter, sour and umami. The
taste sensors across the tongue pick up the taste sensations and accordingly drive
sensory perceptions.
Gustatory branding can be used to differentiate a brand from its competitors, to
enhance customer loyalty and satisfaction, to create a sense of identity and belong-
ing, and to evoke positive emotions and associations. Gustatory branding can also
be used to communicate the brand values, personality and positioning, as well as to
create a sensory synergy with other elements of the brand, such as the visual, audi-
tory, olfactory and haptic aspects. Nespresso, the coffee brand, which is part of the
Nestlé group, uses gustatory branding to create a distinctive and consistent taste
experience for its customers, who can choose from a variety of flavours and intensi-
ties of coffee capsules. Nespresso also uses gustatory branding to position itself as a
luxury and sophisticated brand, which offers convenience, quality and customiza-
tion to its customers.67
Crossmodal sensory perceptions

While the above section highlights the various sensory influences in branding, these
human senses do not operate in isolation. In other words, consumers use various
senses together to arrive at their overall sensory perception. This insight has led to
substantial research in the field, known as crossmodal sensory perceptions, wherein
researchers examine the effects of a combination of sensory influences to understand
human decision making.68
Crossmodal sensory experience research provides interesting insights for brand-
ing. It has been shown to influence the perceptions, preferences and behaviour of
consumers, and can create a lasting and emotional connection with them. By appeal-
ing to multiple senses, brands can create a distinctive and memorable association
with their products or services.69 Moreover, as explained earlier, the combination of
sensory perceptions can help brands communicate their values and personality, cre-
ate a sense of identity and belonging, and evoke positive emotions and associations.70
Crossmodal sensory experience is a powerful and effective way of creating and man-
aging a brand image, as it can help a brand to stand out from the crowd, to adapt to
different markets and cultures, and to create a multidimensional engagement with
consumers.71
Figure 14.5 Images of food can arouse visual, gustatory and even olfactory reflections
SOURCE Unsplash.com/Louis Hansel

Table 14.2 Crossmodal sensory perception examples
Crossmodal
pairing Approach Real-life examples
Visual-auditory ●● Pairing uplifting music with Nike‘s ‘Just Do It’ campaign

energetic visuals in a sports apparel combines powerful visuals
ad to convey a sense of excitement of athletes in action with
and motivation. rousing music to create a
●● Using soothing music and calming sense of empowerment and
visuals in a spa ad to create a sense motivation.
of relaxation and tranquillity.
Auditory-haptic ●● Incorporating crisp sounds when BMW cars feature a variety
consumers interact with a product‘s of audible feedback sounds,
packaging to enhance the perceived such as the iconic door
quality and premium-ness. chime, to enhance the
●● Using subtle vibrations in a driving experience and
smartphone notification to provide a reinforce brand identity.
more tactile and engaging
experience.
Olfactory-visual ●● Creating a signature scent for a Victoria‘s Secret employs a
retail store that complements the specific fragrance
brand‘s visual identity and enhances throughout their stores and
overall shopping experience. products, creating a
●● Using evocative food scents in consistent brand identity.
restaurants to increase appetite and
customer satisfaction.
Gustatory-visual ●● Presenting food dishes with visually M&M uses colourful
appealing arrangements and colour packaging and playful visuals
combinations to enhance taste to enhance the perceived
perception. taste and enjoyment of their
●● Using descriptive language in food product.
descriptions to stimulate the
imagination and heighten the
anticipation of taste.
Haptic-visual ●● Employing soft, luxurious textures Chanel and Louis Vuitton use
in product packaging to convey a high-quality materials and
sense of quality and value. craftsmanship in their
●● Using high-quality graphics and packaging, creating a sense
textures in digital interfaces to of luxury and exclusivity.
create a more immersive and
engaging experience.
Let’s expand on this. Gustatory perceptions generally operate in conjunction with

visual and olfactory perceptions. The taste of a food or drink is not only determined
by its flavour, but also by its multisensory inputs (Figure 14.5). For instance, a
75 per cent cacao dark chocolate has a sweet and bitter taste, yet the taste experi-
ence is much more complex and rich when we consider its dark and intense colour,
its fruity aroma, its crisp sound when we bite it and its smooth texture when it melts
in our mouth.72 Similarly, changing the colour of a soft drink can change image
perceptions attached to it, even though the taste remains the same.73 The powerful
link between the smells of food, the production of saliva and the desire for food has
been well known to the food and beverages companies for a long time. Therefore,
they use artificial scents of their products, such as cookies, pizza and cinnamon
rolls, to lure shoppers in malls. The Hershey’s store in Times Square uses artificial
chocolate aromas to tempt customers to buy their chocolate.74 Researchers find that
even changing image placement, such as displaying the product image lower on the
packaging, enhances flavour heaviness perceptions and could have implications for
healthy eating decisions.75 However, when these other sensory perceptions are not
available, gustatory perceptions tend to get distorted.76 For example, when smell
and sight are constrained, potatoes can taste similar to apples, and red wine can
taste similar to coffee.77
Crossmodal cues are used by brands in their advertising, packaging and other
visual and sonic communications. For instance, the sound of a can of Coca-Cola
being opened and poured into a glass is a crossmodal cue that enhances the percep-
tion of the taste and refreshment of the drink. Similarly, the shape and colour of the
Toblerone chocolate bar are crossmodal cues that evoke the association with Swiss
Alps and premium quality of the product. Researchers also show that the pitch of a
sound and brightness of a colour can direct visual attention wherein objects that are
light-coloured attract visual attention when a high-pitched sound is heard. Contrarily,
dark-coloured objects attract visual attention when a low-pitched sound is heard.78
Such crossmodal sensory perception can influence advertising on visual media, such
as TV and digital media.
Crossmodal sensory experiences play a crucial role in branding, providing brands
with a powerful tool to influence consumer perceptions and forge deeper connec-
tions with their audience. By understanding and harnessing the interplay between
the senses, brands can create immersive and memorable experiences that resonate
with consumers on an emotional level, ultimately driving brand loyalty and success.
Ethics of sensory marketing and branding

While it offers an important avenue for brands to engage with their customers, the
ethical implications of sensory marketing raise critical questions about its impact on
consumer autonomy and the potential for manipulative practices. On the one hand,
sensory marketing can play a positive role in consumer decision making by provid-
ing consumers with additional information about products and enhancing their
overall shopping experience through sensory exploration (see Table 14.3). For in-
stance, in-store sampling of food products allows consumers to taste and evaluate
the product before making a purchase, reducing the risk of post-purchase dissatisfac-
tion. Similarly, the ambient scent of freshly baked bread in a bakery can create a
welcoming atmosphere and signal the high quality of the products. Moreover, sen-
sory marketing can be used to communicate brand identity and values effectively.
For example, a luxury perfume brand might employ elegant packaging, soft textures
and a sophisticated fragrance to convey a sense of luxury and exclusivity. This mul-
tisensory approach can create a stronger emotional connection with consumers, fos-
tering brand loyalty and positive brand associations.
On the other hand, the power of sensory marketing also raises concerns about its
potential to manipulate consumer behaviour and lead to undesired purchases
(Figure 14.6). The use of intense or overpowering sensory stimuli can overwhelm
consumers, making it difficult for them to make rational decisions. Additionally,
sensory marketing techniques can be particularly effective in targeting vulnerable
populations, such as children, who may be more susceptible to persuasive messaging.
Research has shown that sensory marketing can influence consumers’ perceptions of
product quality, price and even taste.79 Studies have demonstrated that products
presented in high-quality packaging are perceived as being of higher quality and
worth a premium price, even if the product itself is identical to a lower-priced prod-
uct in less attractive packaging.80
Figure 14.6 Sensory marketing and branding raises important ethical questions
SOURCE Unsplash.com/Bret Kavanaugh

Table 14.3 The positives and negatives associated with sensory branding
Positive associations Negative associations
Recognize and remember a brand or Buy impulsively or compulsively by

product by creating a distinctive and triggering their subconscious desires,
memorable sensory identity or signature. cravings and urges through sensory stimuli.
Evaluate and compare a brand or product Spend more or waste more by influencing
by highlighting its attributes, benefits and their perception of value, quantity and
quality through sensory cues. quality through sensory illusions.
Enjoy and appreciate a brand or product by Consume unhealthily or unsustainably by
creating a pleasant and satisfying sensory appealing to their sensory hedonism,
experience that enhances their mood, indulgence and gratification.
wellbeing and loyalty.
Furthermore, the use of sensory cues can influence in-store behaviour, leading to
impulse purchases and increased spending. For example, the aroma of freshly baked
cookies in a grocery store can evoke positive emotions and cravings, prompting con-
sumers to add cookies to their carts, even if they had not originally planned to pur-
chase them. The ethical implications of sensory marketing are further complicated
by the growing use of neuromarketing techniques, which measure brain activity to
understand consumer preferences and behaviour. While neuromarketing has the po-
tential to provide valuable insights into consumer behaviour, it also raises concerns
about privacy and the potential for manipulation.81
In conclusion, sensory marketing and branding raise ethical questions and chal-
lenges for both marketers and consumers. Marketers need to consider the moral
implications and responsibilities of using sensory marketing and branding, and be
aware that their actions do not lead to exploiting, deceiving or harming consumers.
Consumers, too, need to be aware of the potential influence and impact of sensory
marketing and branding, and exercise their critical thinking, self-control and in-
formed choice. Sensory marketing and branding can be powerful and positive tools
for creating and managing a brand image, but should be used with caution and un-
derstanding towards the consumers.
Neuromarketing
As our understanding of sensory aspects have developed over the past two decades,
researchers have attempted to understand the neural activities that drive consumer
decision making. This has led to the novel field of neuromarketing which applies
neuroscience and cognitive science to marketing, aiming to understand and influence
consumer behaviour and decision making.82 Neuromarketing can help marketers
optimize their strategies, products and other marketing communications by measur-

ing the brain’s responses to different stimuli.83 Neuromarketing can also reveal
customer needs, motivations and preferences more precisely than the traditional
methods such as surveys, observations, interviews and focus groups.84
Neuromarketing assumes that most consumer decisions are not made consciously
but are driven by non-conscious processes by neural networks in the brain.85 At its
core, it explores the fundamental concept that human behaviour is deeply rooted in
neural activity. The human brain, an intricately wired neural network, processes and
interprets sensory information, generating emotions, thoughts and, ultimately, ac-
tions. Neuromarketing aims to tap into these neural activities and connections, un-
derstanding how external stimuli, such as brand communication, trigger specific
brain responses and influence consumer behaviour. In sum, neuromarketing seeks to
access and unravel the intricate relationship between the human brain and behav-
iour and provide more accurate and reliable insights than self-reported data.
Neuromarketing researchers use a variety of methods and tools to collect and
analyse data from consumers. Some of the methods involve neuroimaging tools like
EEG (electroencephalography), fMRI (functional magnetic resonance imaging) and
SST (steady-state topography), which register the brain’s electrical activity and func-
tions. Other methods use eye tracking and facial coding to infer consumers’ feelings
and preferences.86 Each method has its advantages and disadvantages, depending on
the research objectives, budget and feasibility. For instance, EEG is a relatively cheap,
portable and fast method that can measure the brain’s activity in real time, but it has
low spatial resolution and can be affected by external noise.87 fMRI is a more expen-
sive, invasive and slow method that can measure the brain’s functions with high
spatial resolution, but it has low temporal resolution and can be uncomfortable for
the participants.88 Eye tracking is a simple, non-invasive and affordable method that
measures consumers’ attention and interest, but it cannot capture the emotional and
cognitive aspects of consumer behaviour.89 Facial coding is a method that can meas-
ure consumers’ emotional expressions, but it can be influenced by cultural and indi-
vidual differences.90
Neuromarketing in action: Philips leverages brain science
for packaging optimization
Philips, a global leader in electronics and healthcare, sought to optimize the

packaging of their new steam iron, aiming to enhance consumer appeal and
purchasing decisions. Recognizing the power of subconscious emotional responses
in influencing consumer behaviour, it turned to Neurensics, a neuromarketing firm
specializing in measuring brain activity to understand consumer preferences. The
primary objective of this study was to determine whether the orientation of the hand
holding the iron on the packaging would influence consumer perception and
purchase intent.
Neurensics employed magnetic resonance imaging (MRI), a brain-imaging
technique that measures activities from the entire brain, both conscious and
unconscious, including rational and emotional thoughts. Participants were shown
both images, one with a right hand holding the iron and the other with a left hand.
The MRI results revealed that packaging featuring a right hand holding the iron
elicited significantly higher activation in brain regions associated with positive
emotions, reward processing and purchase intent, compared to the packaging with
a left hand. The left-hand-holding-iron image resulted in negative feelings including
repulsion and disgust. This finding suggests that the right-handed packaging
resonated more strongly with consumers as nearly 90 per cent of the population is
right-handed and have a natural tendency to hold the iron in the right hand.
Based on the neuroimaging evidence, Philips concluded that packaging featuring
a right hand holding the iron would be more effective in capturing consumer attention,
evoking positive emotions and ultimately driving purchase decisions. This insight led
Philips to adopt the right-handed packaging design for their new steam iron.
This case study highlights the value of neuromarketing in understanding
consumer subconscious preferences and optimizing marketing strategies. By
employing brain-imaging techniques, Philips gained valuable insights into the
emotional impact of their packaging designs, enabling them to make data-driven
decisions that could potentially boost sales and enhance brand success.
Neuromarketing has various applications in branding, such as advertising, digital mar-

keting, product design, packaging, pricing and sales.91 Brand managers can utilize
neuromarketing techniques to assess the emotional impact of advertising campaigns,
identifying the elements that resonate with consumers. This data can inform creative
decisions including designing more effective and persuasive campaigns, testing differ-
ent messages and media, and measuring the impact of advertising on consumer behav-
iour. Similarly, by understanding the pricing sensitivities of the consumers through
neuromarketing, managers can develop optimal pricing strategies to maximize profit-
ability while maintaining consumer satisfaction.92 For example, PepsiCo used two
methods, standard survey and EEG, to understand the impact of increasing price of its
Lay’s chips by 0.25 Turkish Lira on consumers in Turkey. A traditional survey pre-
dicted a sales drop of 33 per cent and the brand becoming non-profitable. On the other
hand, EEG predicted a 9 per cent sales drop with the brand remaining profitable.
PepsiCo decided to increase the prices and the sales dropped by only 7 per cent while
the brand remained profitable.93
Within the digital domain, neuromarketing can help optimize websites, apps and
social media platforms, by analysing how consumers navigate, interact and engage
with digital content. Using neuromarketing, brand managers can measure consumer
preferences for product features and packaging. This understanding can guide prod-
uct development, ensuring that products align with consumer desires and maximize
market appeal. For instance, Campbell Soup used eye tracking and biometrics to test
different designs of their soup cans which resulted in different colour packaging for
different soup lines with a smaller logo, more vibrant and steamy photos without
spoons.94 Similarly, BMW used neuromarketing for product design optimization,
wherein it identified that consumers had stronger emotional reactions to cars with
curved designs, and thus, the brand launched curved lines and contours in its BMW
3 series, and found greater success compared to previous models.95
Scholarly debate
Lee, N, Chamberlain, L and Brandes, L (2018) Welcome to the jungle! The

neuromarketing literature through the eyes of a newcomer, European Journal of
Marketing, 52 (1/2), 4–38
Lim, W M (2018) Demystifying neuromarketing, Journal of Business Research, 91,
205–20
Overall, neuromarketing is a fascinating and growing field that offers many oppor-
tunities and challenges for brands and consumers alike. It enables brands to gain
deeper insights into their consumers’ actions and choices and helps them design at-
tractive and convincing campaigns and product offerings that meet their customers’
needs. Notwithstanding, similar to sensory marketing, neuromarketing tools can be
prone to unethical use, and brand managers need to be circumspect regarding its ap-
plications.
Chapter summary
This chapter discussed the latest developments in the field of sensory branding and
neuromarketing. It offered insights on how human sensory perceptions play a key
role in consumer decision making. We then explored five sensory influences – visual,
auditory, haptic, olfactory and gustatory. We also learnt that these sensory influences
do not operate in isolation and consumers use crossmodal sensory perceptions in

their brand choices and other decision making. While the use of sensory perceptions
in influencing consumer decision making is becoming increasingly common, there
are ethical challenges that brand managers need to be aware of. Finally, we discussed
how neuromarketing developments are helping brands make informed decisions re-
garding consumer choices leading to greater success.
Key concepts
●● Sensory perceptions
❍❍ Visual perceptions
❍❍ Auditory perceptions
❍❍ Haptic perceptions
❍❍ Olfactory perceptions
❍❍ Gustatory perceptions
●● Crossmodal sensory perceptions
●● Sensory marketing and branding
●● Neuromarketing
Exercise questions
1 Using examples from three different sectors, explain how brands use different
sensory aspects in influencing consumer decision making.
2 Give examples of how brands across products and services employ different visual
sensory elements to influence consumer choice.
3 Critically examine the importance of studying crossmodal sensory perceptions for
better branding applications.
4 Sensory marketing and neuromarketing can have both positive and negative
effects on brands. Critically evaluate this statement.
5 Explain the various neuromarketing techniques researchers use to understand
consumer decision making. Explain how neuromarketing may be a better
approach to study consumer choices as compared to traditional research methods.
CASE STUDY
How the travel industry uses your sense of smell
to enhance your holiday
Read the following article from 2016, which looks more closely into how tourism and travel
operators may use sensory marketing – specifically the sense of smell – to provide a
unique experience.
SOURCE https://theconversation.com/how-the-travel-industry-uses-your-sense-of-smell-to-enhance-your-
holiday-180520
Case questions
1 Rank the sensory marketing elements according to their importance for the travel and
tourism industry. Provide justification for your ranking.
2 Critically evaluate the ethical aspects of sensory marketing in travel and tourism
industry.
3 Discuss what crossmodal sensory perceptions can be utilized by brands to connect
with their customers in the travel industry.
4 Based on the case study, develop a sensory marketing campaign for an existing retail
brand.
Endnotes
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10 Peck, J (2011) Does touch matter? Insights from haptic research in marketing, in A
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53 Ibid.
54 Biswas, D (2019) Sensory aspects of retailing: Theoretical and practical implications,
55 Errajaa, K, Daucé, B and Legoherel, P (2020) Consumer reactions to olfactory
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58 https://theconversation.com/how-the-travel-industry-uses-your-sense-of-smell-to-
enhance-your-holiday-180520 (archived at https://perma.cc/ER8N-WZZQ)
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271
Branding on social 15
media and digital
brand analytics
Overview
In this chapter, we first explain the rise of social media branding. In the following
section, we explain how brands use social media to create and build customer en-
gagement. This is followed by a discussion on the rise and the prominence of social
media influencers in digital brand communications. We then sum up the good prac-
tices and pitfalls to avoid in social media branding. In the final section, we explain
the usefulness and applications of brand analytics data.

●● Understand the role of social media in brand communications

●● Develop insights into ways of creating brand engagement through social media
●● Develop understanding of the role of social media influencers in branding,
including good practices
●● Comprehend the basics of brand analytics
The advent of social media branding

Human beings have an innate need to belong and to connect with other humans.1
Moreover, being social animals, we also possess curiosity about what others are
doing and how we should behave in social settings to achieve our desired goals and
favourable outcomes. These social aspects have driven people to engage in a variety
of social endeavours, which in modern society has led to the rise of social media. The
Oxford English Dictionary defines social media as ‘websites and applications which
enable users to create and share content or to participate in social networking’.2
While digital social media websites are a novel invention that emerged in the early
2000s, the notion of social media networking and interactions is grounded in the
electronic information exchange that started with Morse Code.3 The advent and
commercialization of the internet created a new information exchange revolution
that allowed a variety of communication options between brands, consumers and
other stakeholders through email, bulletin boards and forums, real-time chatting,
blogs and vlogs, and other digital communication avenues. Avenues that allowed
consumers and brands to communicate and exchange information easily were social
media networking websites. The first social media networking website experiments
attempted to connect people through geographic proximity or similar lived experi-
ences, such as geocities.com, classmates.com and sixdegrees.com. Based on the buzz
created by these social media networking websites, a number of new platforms
emerged, including Friendster and Myspace, followed by the now highly popular
websites and apps such as Facebook and X (formerly known as Twitter). With

increasing internet availability and access, coupled with broadband infrastructure
improvement, these social media networking websites, which were predominantly
text-based communication, allowed greater audio-visual content, with the rise of
new age social media such as YouTube, Instagram, Snapchat, WeChat, Telegram and
TikTok. While many of these social media networks succeeded in engaging users,
many others failed, including Google initiatives such as Orkut, Google+, Buzz,
Apple’s Ping and other independent platforms such as YikYak.4
Currently, it is believed that there are more than 5 billion internet users of which
almost 90 per cent use social media.6 As Figure 15.1 shows, many social media
networks have more than 2 billion regular users. The rise of the internet with in-
creasing usage by consumers offered brands an opportunity to create meaningful
and dynamic engagement. This led to brand’s own websites, multi-retail platforms
such as Amazon.com, auction platforms such as eBay.com and social media inter-
actions through brand’s own webpages, and other content. Social media networks
allowed communication between consumers and brands, as well as consumers and
consumers.
Consumers are now likely to use social media for almost every stage of their con-
sumption process, including information search, alternative selection, decision mak-
ing, word-of-mouth and the acquisition, use and disposal of products and services.7
Moreover, social media network websites allow brands an opportunity to develop
and communicate their identity, and gain commercial, non-commercial and social
mileage via a variety of means that was not possible previously. For example, when
searching about a product or service, consumers regularly scour social media pages
created by the brand and read other consumers’ views to make purchase decisions.
For instance, Starbucks is known for its customer-centric social media presence. The
brand frequently interacts with its customers on social media, answering questions,
addressing concerns, and sharing fun and engaging content. Starbucks also hosts
Branding on social media and digital brand analytics 273
Figure 15.1 ost popular social networks worldwide as of January 2023, ranked by
M
number of monthly active users5
Facebook 2,958
YouTube 2,514
WhatsApp* 2,000
Instagram 2,000
WeChat 1,309
TikTok 1,051
Facebook Messenger 931
Douyin** 715
Telegram 700
Snapchat 635
Kuaishou 626
Sina Weibo 584
QQ 574
Twitter 556
Pinterest 445
Number of active users in millions
contests and giveaways throughout the year, giving customers the chance to win
prizes such as free coffee, gift cards and merchandise. Such initiatives make the con-
sumer feel that the brand is responsive to their needs and thus increase their trust in
the brand.
Moreover, consumer-to-consumer electronic word-of-mouth on social media in-
fluences decision making.8 This electronic word-of-mouth, also termed user-gener-
ated content (UGC), is used by brands to promote itself further. For example,
GoPro, the camera brand, encourages its users to share their GoPro footage on
social media using the hashtag #GoPro. GoPro then reposts and shares this content
on its own social media channels, inspiring other users to get out and adventure
with their GoPro cameras. In addition, initiatives such as Facebook Marketplace
(see Figure 15.2) have given rise a new type of commerce called social commerce
that can help consumers acquire and sell a variety of products and services on so-
cial media network websites.9
Figure 15.2 onsumers buy and sell a variety of products on social commerce
C
marketplaces such as Facebook Marketplace
SOURCE Author’s
Creating and enhancing brand engagement

through social media
As the reach and usage of social media grows among consumers, it offers brands
ample opportunities for creating and enhancing brand engagement. Brands can pro-
vide different types of information that can help consumer decision making. For
example, brands can offer utility-focused information on social media, including
product information, updates on product innovations, delivery aspects and com-
parison to competitors. Similarly, using more hedonic approach of communication,
brands can motivate consumers to participate on their social media pages via con-
tests, raffles and rewards. Moreover, brands can also use the dynamic nature of com-
munication on social media to engage consumers in product feature innovations. By
posting new product features on social media, brands can get real-time feedback
about the product attributes preferred by the consumers. For example, many food
and drink, fashion and clothing, and cosmetic brands have dedicated product testing
programmes where they invite a select group of followers to test out new products
and provide feedback. These programmes are often run through social media plat-
forms such as Instagram and Facebook.
An industry report suggests that in several product categories 80 per cent of con-
sumers make buying decisions based on a friend’s social media post, and brands that
offer content that is relatable tend to attract more consumers.10 Companies that
interact meaningfully with their audience beyond advertisements or product listings
Figure 15.3 The 6C framework of social media engagement
Continuous Create
listening authenticity
Clear and
consistent Contests and
brand incentives
message
6Cs of social
Content mix media Co-creation
engagement
SOURCE Adapted from Parent et al. (2011, 219–29)
create a positive impact. Beyond the utilitarian and hedonic communications, the
social nature of social media networks allows brands to tap into consumer
conversations and understand the deeper associations, emotions and opinions of
consumers.11 For instance, despite the challenges faced by fashion retailers during
the coronavirus pandemic, Boohoo Group (which includes PrettyLittleThing and
Nasty Gal) managed to thrive. Boohoo’s social media strategy has been integral to its
success, with influencer endorsements enabling the brand to target and engage a
young audience on Instagram (where it now has more than 12.6 million followers).
Boohoo cleverly adapted its content to stay relevant, such as using
#BoohooInTheHouse – a hashtag relating to ‘stay at home style’ during the Covid-
19 lockdown. Similarly, other social selling platforms like Depop regularly offer
mini-interviews with their content creators and sellers on social media to engage
similar audience. The brand’s page also offers content creators advice on topics such
as ‘how to make a listing that sells’, ‘how to take great photos’, ‘how to sell even
faster’, etc. Engaging social media users in co-creating content can help a brand in a
variety of ways. For instance, it can increase brand identification and consumer en-
thusiasm to engage with the brand. At the same time, other consumers may find the
co-creation approach more trustworthy and thus pay greater attention to such con-
tent. Academic research suggests that compared to company advertising, user-gener-
ated content on social media tends to generate a significantly positive brand atti-
tude.12
As the above examples demonstrate, brands should actively engage in social
media platforms for several practical reasons. Firstly, visibility and reach are
s ignificantly amplified through social media. With billions of active users across var-
ious platforms, brands can connect with a vast audience, including potential custom-
ers who might not have encountered their products or services otherwise. Such
amplification can lead to higher penetration for the brand and contribute to overall
sales and market share. Secondly, social media provides a direct line of communica-
tion between brands and consumers. By actively participating in conversations,
responding to queries and addressing concerns, brands can build trust and satisfac-
tion, fostering positive relationships. Thirdly, social media allows for real-time feed-
back. Brands can gather insights from comments, likes, shares and direct messages to
improve their offerings and tailor marketing strategies.
Moreover, to enhance their customer engagement, brands should employ the fol-
lowing effective practices as identified in the 6C framework (see Figure 15.3).
Content mix: Academic research has shown that creative content tends to generate
curiosity, and in turn, enhance motivation to process information.13 Thus, a
brand’s social media posts should have creative, relevant, valuable and shareable
content. This can include a mix of informative posts, entertaining videos and user-
generated content. For example, Taco Bell uses social media to share behind-the-
scenes glimpses, exclusive promotions and interactive stories. Their creative
content keeps followers engaged and motivated to view and process upcoming
menu items or events.
Clear and consistent brand message: Maintaining a clear and consistent communication
tone and style across all social media channels helps reinforce brand associations and
identity. Whether it is witty and playful or professional and informative, the voice
should align with the brand’s values. Several important psychological theories,
including the stereotype content model (i.e. warmth vs competence)14 or brand
personality types (i.e. sincerity, excitement, competence, sophistication and
ruggedness)15 could help brands in developing a consistent brand message. For
instance, a brand such as IBM, which is perceived by consumers to be competent,
should use messages that reflect their competence. Alternatively, a brand that is
perceived as warm should adopt a message accordingly. For example, Oreo wants to
be seen as a playful and warm brand. To that end, Oreo celebrated its 100th anniversary
with the ‘Daily Twist’ campaign. Each day for 100 days, Oreo posted a creative image
related to a current event or holiday on Facebook and Twitter. The campaign
encouraged followers to engage by guessing the twist or sharing their own ideas.
Continuous listening: Brands should continuously monitor social media conversations
related to their industry and products. By gathering competitive market
intelligence, a brand will be able to understand and predict market trends, new
product launches or feature enhancements, which could then feed into their own
product development and innovation. Moreover, listening to customer feedback
and addressing concerns promptly, brands can build stronger consumer-brand
relationships which, in turn, demonstrate responsiveness and care, and more

importantly increase trust towards the brand among consumers.16 Burt’s Bees, an
organic-product-focused cosmetics firm known for its beeswax and lip balm,
actively interacts with followers on Twitter by answering questions and replying
to comments. They take the time to engage with their audience, making followers
feel heard and valued. By signing off comments with a real representative’s name,
they humanize their brand communications, and build stronger connections.
Create authenticity: Authenticity matters. Brands can demonstrate their authenticity
through communicating integrity, sincerity, continuity and symbolism.17 Brands
should avoid overly promotional content and focus on building genuine
connections with the consumers. When brands communicate their message
authentically on social media, it reduces consumer scepticism and increases trust.18
Responding to comments individually and showing appreciation for user-
generated content signals authenticity. For example, the Guardian, a more than
200-year-old newspaper from the UK, is globally associated with serious
journalism. Keeping up with its impression in public minds, the brand uses a
formal and reserved tone in sharing its news posts on social media.
Contests and incentives: Running contests, giveaways and exclusive promotions
encourages users to participate actively. Such activities are generally associated
with a sense of pleasure. It motivates consumers to participate anticipating
rewards based on the pleasure principle.19 The reward mechanism further
encourages consumers re-visit and re-engage with the brand’s social media
campaign. It also creates a sense of community around the brand. Goldfish
Crackers ran a creative contest called the ‘#GoForTheHandful Duet Challenge’
on TikTok. They challenged participants to duet with pro basketball player Boban
Marjanović by attempting to hold more Goldfish crackers in one hand than
Boban’s record of 301. The entries were hash tagged with #GoForTheHandful,
making it easy to search for and watch challengers pile Goldfish crackers in their
hands. The winner received Goldfish for a year and earned the title of Official
Goldfish Spokeshand. The contest garnered an impressive 11.5 billion views on
TikTok.
Co-creation: Encouraging users to share their experiences with the brand (through
photos, reviews or testimonials) boosts engagement and serves as powerful social
proof. When other consumers create content involving the brand, consumers tend
to trust it more as organic word-of-mouth. Moreover, such content is highly
valued by consumers as they assume it to be a result of real interest and passion
from the content creator.20 For example, Airbnb leverages user-generated content
on Instagram. They encourage travellers to share their Airbnb experiences using
specific hashtags (#Airbnb or #LiveThere). By featuring these photos on their
official account, Airbnb not only engages users but also showcases unique
accommodations worldwide.
Gymshark: a fitness brand with a social media edge
Gymshark is a UK-based fitness brand that offers stylish, comfortable and functional
clothing and accessories for men and women. Founded in 2012 by Ben Francis and
Lewis Morgan, Gymshark has grown from a small online store to a global
phenomenon with over 15 million followers across various social media platforms.
One of the key communications strategies that Gymshark employs on social
media is to create engaging and authentic content that showcases its brand values
and culture. For example, Gymshark regularly posts motivational quotes, fitness
challenges, behind-the-scenes videos, customer testimonials and user-generated
content on its main Instagram account @gymshark (which has more than 6.4 million
followers). Gymshark’s posts are highly relevant to its target audience, with the
majority of imagery captured in a gym environment and with gym equipment or
weights, thus adding clarity and consistency of brand message. Listening to its
customers, Gymshark also consciously includes a balance of men and women in its
posts and showcases the inclusive nature of the business by featuring varied
athletes and diverse groups of people. Gymshark also has separate Instagram
accounts for different segments of its audience, such as @gymsharkwomen
(3.4 million followers).
Another strategy that Gymshark uses on social media is to collaborate with
influential fitness personalities such as Whitney Simmons, Steve Cook and Nikki
Blackketter. These influencers, also known as Gymshark Ambassadors, promote the
brand’s products, share their workout routines and tips, and interact with their fans
on Instagram, YouTube, TikTok and other channels. Gymshark also co-creates
products with some of these influencers, such as the Whitney Simmons Collection
and the Nikki B x Gymshark Collection.
Through the lens of the 6C framework of social media engagement, Gymshark has
created an effective social media presence that demonstrates its passion for fitness,
innovation and community. This enhances its brand image and loyalty among its
customers, as well as attracting new customers who are inspired by its products
and values.
The role of social media influencers

in brand building
Before the advent of social media networks, the main avenue for brands to commu-
nicate their message was either through print or electronic media available in any
given market. This mainly included newspapers, magazines, radio and television.
Depending on their budget, brands chose appropriate avenues to influence their con-
sumers. A few brands, such as Tupperware, Avon and Amway, use consumer-to-
consumer communications as their key marketing channel. Brands have long relied
upon subject experts and opinion leaders for their specialized knowledge. These pub-
lic personalities were employed to support brands’ claims and market their offerings.
The aim was to influence consumer product choice using the authenticity and trust-
worthiness of the expert.21 For example, Oral-B used a long-term campaign suggest-
ing that it is the preferred toothpaste of dental professionals.
With the commercialization of the internet in the mid-1990s onwards, consumer
content creation increased manyfold. At this time, blogging emerged as a particular
tool that allowed consumers to share their own opinions, in many cases free of
charge. Many bloggers started writing about their own usage and product experi-
ences which were read and commented by other consumers. The rise of social media
networks in the mid-2000s allowed a substantial increase and dynamism in con-
sumer-to-consumer communications. Consumers could communicate with the con-
tent creator in real-time, share their views and get instant feedback as well. This led
to the advent of unique types of individuals who started sharing their own opinions
about specific products or services based on their own usage and experience. These
influential individuals over time garnered many followers, giving rise to the modern-
day social media influencers. Influencer marketing has become the cornerstone of
current branding practices. The global influencer marketing market has observed
rapid growth from $1.7 billion in 2016 to $21.1 billion in 2023 and Instagram is
considered the leading platform for influencer marketing.22
The rise of the social media influencer: Zoella
Social media influencers are individuals who have established credibility and
popularity in a specific industry, or niche, by creating and sharing original content on
various online platforms. They can influence the opinions, behaviours and
purchasing decisions of their followers, who often regard them as authentic,
relatable and trustworthy sources of information and entertainment. Social media
influencers have emerged as a new type of celebrity and marketing agent in the
digital era, challenging the traditional notions of fame, authority and communication.
A prominent and successful social media influencer whose fame rose with the
rise of social media in the early 2010s is Zoe Sugg, better known as Zoella, who
started her career as a YouTuber and blogger in 2009. Initially, Zoella wrote blog
posts and created YouTube videos on her own life experiences. As her popularity
grew, she started discussing her consumption of beauty and fashion brands. Zoella
is widely regarded as one of the pioneers and leaders of the influencer industry,
especially in the UK, where she was named the highest-earning female social media
influencer under 30. In 2023, Zoella had nearly 11 million followers online with
1.1 billion views of the content she has created. She has created her own beauty and
fashion line, written books and has actively promoted hers as well as other brands.
She has also received numerous awards and recognition for her online presence
and impact, such as being listed among ‘Britain’s most influential Tweeters’ by The
Telegraph and being appointed as a digital ambassador for Mind, a mental health
charity.
Zoella’s success is attributed to her variety, quality, frequency and personality of
her content; her collaborations with other YouTubers and brands; her loyal and
engaged audience; her recognizable, reputable and profitable personal brand; and
her ability to overcome or cope with the controversies and criticisms that she faced.
An interesting question is why social media influencers have become so popular and
influential. Academic researchers have examined this phenomenon by employing dif-
ferent theories and have provided several explanations, which are discussed below. A
number of influential theories, including para-social relationships, reference group
effect and congruity theory, have been used in academic research to explain the rea-
sons behind the rapid growth of influencer economy on social media.
Unlike the influencers of the past, who were subject experts or celebrities, many
social media influencers are seen as more relatable, credible and authentic. These
influencers are relatable because most of them start from an ordinary background
and have interests and a demographic similar to their followers. Many influencers
post about their daily lives, respond to their followers regularly, often hold live
discussions and build stronger connection with their followers. Thus, social media
influencers are able to build congruence with their followers. As they use or pro-
mote a brand, their followers’ approval of the endorsed brand increases due to the
congruity.
With increasing number of followers, social media influencers and their follow-
ers build a kind of para-social relationship. Para-social relationships are one-sided
relationships between followers and the social media influencer. In this type of rela-
tionship, the follower invests effort and resources in terms of emotions, time and
money to continue the relationship with the influencer. However, the influencer is
unlikely to be aware of such efforts by an individual follower as they have a large
following. For example, James Stephen Donaldson, known as MrBeast, has over
312 million followers on his various YouTube channels. The followers are attracted
by the creative content provided by these social media influencers and follow them
and their endorsements in a one-sided manner. Para-social relationships offer a

number of advantages for followers: feeling increased belonging, enhanced self-es-
teem, reduced loneliness and stronger social connections.23 However, these can lead
to negative consequences as well wherein these relationships can interfere with a
follower’s real-life relationships24 and interactions leading to increased anxiety,
loneliness and social isolation.25
By nature, most human beings like to be part of social groups. These social
groups, termed as reference groups, are groups of individuals that have significant
relevance for consumers and influence consumers’ evaluations, aspirations and be-
haviour. To remain connected with the community of other followers, many fol-
lowers buy products promoted by the influencers. With the increased congruency
and the strength of relationship with the influencers, consumers find recommenda-
tions from influencers as more credible and authentic compared to company ad-
vertisements.26 Moreover, with other followers liking, commenting, purchasing
products or services recommended by influencers, consumers also find social proof
to support their consumption.27
Consumers are increasingly consuming social media content. On most social
media, the content is continuously updated, leading to ‘bottomless scrolling’. Most
people highlight positive aspects of their lives on social media, including their travel,
food and other experiences. This is especially true of social media influencers who
portray their public persona to be larger than life with fresh content added fre-
quently. Influencer actions are aimed to engage their followers who constantly con-
sume content due to ‘fear of missing out’ (FOMO).28 FOMO occurs when consumers
feel that their peers are receiving something enriching and gratifying, which they are
not, and could lead to feelings of concern, apprehension and consternation.29
Scholarly debate
Hudders, L, De Jans, S and De Veirman, M (2021) The commercialization of social

media stars: A literature review and conceptual framework on the strategic use
of social media influencers, International Journal of Advertising, 40 (3), 327–75
Singh, J, Crisafulli, B, Quamina, L T and Xue, M T (2020) ‘To trust or not to trust’: The
impact of social media influencers on the reputation of corporate brands in
crisis, Journal of Business Research, 119, 464–80
Types of social influencers

Brand managers have different types of social media influencers to select from. Two
important distinctions about the types have emerged: one is dependent on the
e xisting popularity and professional standing of the social media influencer, while
the other focuses on the number of followers. On the basis of number of followers,
social media influencers are categorized into nano, micro, macro and mega influenc-
ers (see Figure 15.4). While there is no consensus about their exact number of fol-
lowers, as a general guideline it is assumed that nano influencers are those with fewer
than 10,000 followers. This is because they are new to social media or have a niche
audience. They also tend to have a close relationship with their followers. Micro-
influencers have between 10,000 and 100,000 followers. They are typically experts
in their field and have a loyal following. Micro-influencers are a good choice for
brands that want to target a specific niche audience. For example, Elyse Miller, a fit-
ness coach, has approximately 25,000 followers and fits into the micro-influencer
category. Macro-influencers have between 100,000 and 1 million followers. They are
well-known in their industry and have a large reach. Macro-influencers can be effec-
tive for brands that want to increase brand awareness and reach a large audience.
For example, Ashley Galvin (537,000 followers) is a fitness and yoga coach who
promotes brands such as FRÉ hair repair serum. Mega-influencers have over 1 mil-
lion followers. They are typically celebrities or social media stars. Mega-influencers
can be effective for brands that want to quickly reach a global audience and generate
buzz.
With regards to existing popularity and professional expertise, three types of social
media influencers have emerged: (a) celebrity influencers; (b) expert influencers; and (c)
Figure 15.4 Social media influencer sphere of influence by number of followers
Mega (1mn+)
Macro (100k–1mn)
Micro (10k–100k)
Nano (1k–10k)
SOURCE Authors
celebrity-expert combined influencers. For example, Selena Gomez (499 million fol-
lowers), one of the top pop singers who promotes brands such as Adidas, Pantene and
Coach, is a celebrity social media influencer. Similar top celebrity influencers include
Cristiano Ronaldo (787 million followers), Lionel Messi (530 million f ollowers), Justin
Bieber (477 million followers) and Kylie Jenner (450 million followers). Expert influ-
encers are those who possess subject expertise in the area of their promotion. These
experts generally belong to categories such as beauty, fashion, fi tness, travel and
lifestyle. For example, Huda Kattan, a beauty influencer, has more than 50 million
followers on social media. Similarly, YouTuber Mark Rober, a former NASA engineer,
promotes technology gadgets and has more than 26 million followers. Some of these
social media influencers can become combined celebrity-expert influencers when they
promote a product or service that is within their domain of expertise. For example,
when Virat Kohli (231 million followers), one of the top cricket players, promotes
cricket equipment, he takes on the role of an expert-celebrity combined influencer.
How to select an appropriate influencer for your brand
With the growing impact of social media influencers, brands need appropriate
guidelines on how to choose a social media influencer. The following questions and
reflections provide a guide for brand managers in selecting an appropriate social
media influencer for their campaigns.
Are they an expert?

●● Are they considered an expert in their respective field?
●● How well will their image fit with the brand?
●● Have they ever been invited to speak at an event?
●● Have they received awards or been recommended by anyone in the industry?
Do they have an engaged community?

●● How engaged is their community?
●● What questions does the community ask and how well does the influencer
answer them?
●● How likeable are they among their community?
How many people are their posts reaching?

●● Reach can help you understand how many views an influencer’s post is likely to get.
●● The more eyeballs on content, the higher the chance of boosting brand
awareness.
Who are they reaching?
●● Check the demographics of the community to ensure the brand is relevant to

them – particularly if targeting a very specific demographic.
●● Consider audience demographics such as interests, gender, age group and
locations.
●● Will you be targeting the right people if the message reaches them?
Have they worked with other brands?

●● In general, this is fine, but if the influencer has worked with a competitor for a
very long time, it can be difficult to shift the attention away from that competitor
since their association with the influencer may stick.
Do they post regularly?

●● Posting multiple times a week will have a direct impact on other metrics such as
engagement rate, reach, loyalty, etc.
The above questions can help brands to select an appropriate social media
influencer.
As discussed, social media influencers have become integral to modern day con-
sumption and provide brand managers with a novel avenue to communicate and
reinforce their brand associations and values. Social media influencers are found to
be more relatable, credible and authentic by consumers and thus offer a complemen-
tary source of communication for brand managers beyond conventional advertising.
Choosing an appropriate social media influencer is critical for brand managers. The
following section captures the important aspects to consider when branding on
social media.
The dos and don’ts of branding on social media

Social media has become pivotal for brand success in today’s marketplace. However,
the success is not equally shared, as some brands excel in engaging with their cus-
tomers and other stakeholders on social media, while others find it a struggle. Thus,
it is important for the brands to understand how to achieve success on social media.
As discussed previously, the 6C framework of brand engagement can help
brands achieve success on social media. However, there are several pitfalls that
brands can avoid in their activities on social media. Many unsuccessful brands
Figure 15.5 Share of Instagram influencers involved in fraud worldwide by number

of followers30
70%
61.23%
60% 58.19%
54.74%
50.17%
50%
45.32%
Share of influencers
40%
35.26%
30%
20%
10%
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Number of followers
evelop their campaigns without having a clear audience or plan in terms of how
d
to engage with the target audience. While social media is used by different types of
consumers, as discussed in earlier chapters, different consumer segments engage
with the brand for varying reasons. Thus, the starting point for a successful social
media campaign is developing a clear plan of engagement based on understanding
the audience being targeted.
When developing their social media engagement plan, many brands tend to focus
too much on creativity, ignoring the importance of consistency and clarity of their
message. It is quite common for brands to seize on wrong trends on social media as
well. Veering away from their central engagement theme can be detrimental and thus
brands need to balance creativity with consistency. For example, Dove, the personal
care brand from Unilever, wanted to engage in the dialogue around diversity.
However, its Facebook advertisement showed a black woman turning into a white
woman after using Dove lotion.31 Dove faced significant social media backlash from
its followers and the public. This dented the company’s long-running diversity cam-
paign and the brand had to apologize.
Another issue for brands is that they fail to engage with the relevant audience and
do not have in place a clear post-campaign engagement plan. Social media is a dy-
namic engagement medium wherein the audience continuously engages with the
brand. Some brands have a tendency to post social media campaigns similar to their
advertisements on TV or newspapers with the assumption that it is the conventional
one-sided communication. Moreover, some brands do not allocate sufficient re-
sources towards post-campaign social media engagement and thus get overwhelmed
in the face of a negative response. In addition, many brands focus only on negative
comments and do not support the customers who share positive comments and ex-
periences associated with the brands. This is particularly observed within hospitality
and other service sectors. Brands should naturally engage with customers who ex-
press negative views to provide satisfactory service recovery. However, they should
also engage with customers who share positive comments and experiences to rein-
force brand associations and encourage repeat patronage.32
We have earlier discussed the selection process for social media influencers. However,
many brands find themselves unclear about how to choose the right social media influ-
encers for their campaigns. Many brands tend to engage influencers based on number
of followers only. This may not be an optimal use of brand resources as there are several
instances of unethical practices associated with influencer marketing. As Figure 15.5
shows, approximately half of influencers have an inflated number of followers.
The types of follower number fraud can take various forms including fake
followers, fake comments made by bots and creation of pods. To inflate numbers of
followers, many influencers buy fake followers. These bought followers are added
gradually to help disguise the fact that they are not real. Similarly, many influencers
buy bot comment services, that sell automated ‘likes’ and ‘comments’ to make audi-
ences believe that an influencer is generating a positive reaction to posts, images and
videos. Learning from the Massively Multiplayer Online Role-Playing Games
(MMORPGs), many people on social media form alliances (also called Pods) to
provide positive comments and ‘likes’ on each other’s posts. Some influencers build
their brand by making deals with these pods, which calls into question how genuine
these alliances are since they aren’t built on real, organic interest. The Branding in
practice below offers guidance on how to identify signs of fraud and a practical
checklist to avoid engaging with influencers that may have engaged in such fraud.
Signs of social media influencer fraud and a practical checklist
Social media follower fraud is not easy to detect. However, a brand can identify the
signs of fraud by examining the following:
Sudden spike in followers

●● A sudden spike not explained by another factor like a major event.
●● Major events that could organically boost the number of followers include a live
streaming session, a recent appearance at a fan get-together or a popular video
that went viral.
Unequal ratio of likes/comments to number of followers

●● Has a relatively low number of followers and a very high number of likes and
comments, in this case likes/comments could be auto-generated.
Comments don’t align with posts
●● Comments on an influencer’s social media platform don’t have anything to do with

what that influencer posted. For example, the influencer posted a video of a dog
eating his lunch, but the comments talk about an entirely different subject.
In addition, the 8-point checklist below can be used to spot an influencer marketing
fraud.
Has the influencer got…
1 A verification badge?
2 A solid account history that shows consistent and original posts?
3 Proof of organic audience growth over time?
4 A history of quality posts?
5 High engagement on their posts?
6 An engaging and complete Instagram profile?
7 Examples of successful past campaigns, partnerships and sponsorships?
8 A history of promoting products and brands in a way that is consistent with brand
values?
While providing a truly exciting avenue, social media engagement is fraught with a
number of pitfalls. Brands should carefully traverse the social media space and en-
gage with their audience. Importantly, as outlined above, it is highly recommended
that brands avoid engaging with influencers who are involved in social media fraud
of any kind, as it can be detrimental to the brand in the long run. Digital brand ana-
lytics can help brands in understanding and improving social media engagement,
which is the focus of our next section.
Understanding brand social media analytics

As brands have increased their engagement on social media, a new field of research
has emerged that focuses on data analytics that can help brands in achieving their
social media related aims and objectives. Social media analytics is a relatively new
field of research that can help understand brand exposure, lead generation, fan loy-
alty and online traffic on social media.33 Brands can use a variety of data in their
analytics process. Academic researchers identify seven types of data that can help
brands in social media analytics.34 Table 15.1 explains different data types and sub-
types that can be utilized for social media analytics.
These data types and sub-types are examined through a variety of analytical tech-
niques including text mining, sentiment analysis, web analytics, network analytics,
descriptive social media analytics and image analytics. Text mining involves content-
based analysis of mostly text-based data including reviews, posts, comments, etc.
using techniques such as keyword retrieval, topic modelling and cluster analysis.35
Sentiment analysis particularly focuses on the sentiment conveyed within the text.36
Techniques such as opinion mining and aspect-oriented classification are used in
sentimental analysis regularly.37 Web analytics is a different branch of social media
analytics that focuses on web-page-related characteristics, such as speed of loading,
content and images used, with the use of website crawling/spidering, cloud comput-
ing and search log analysis.38 39 Network analytics taps into the structure of existing
relationships between various entities on social media including between users and
between users and brands, among others. Techniques such as social network analysis
Table 15.1 Data types and sub-types that can be used for social media analytics
Data Sub-types
User-generated data • CG-textual data (reviews, comments, posts, enquiries,

tweets, Wikipedia pages)
• CG-linguistic data
Platform-based data • Structured data (ratings, stars, rankings)
• Profile data (gender, age, followers)
• Consumption data
Metadata • Post-level (volume, length)
• Webpage-level (web traffic)
Network data • Links between users
• Links between words
Firm-generated data • Webpages, posts, comments, product descriptions
Temporal data • Real-time data, posting time
Rich media data • Geotag and image
SOURCE Wang et al (2021)

examine human networks, while semantic network analysis explores the linkage be-
tween products/objects.40 Descriptive social media analytics captures the standard
statistical analysis such as frequency and counts.41 Image analytics is a novel
analytical approach that aims to analyse visual content on social media through
techniques such as image classification and feature descriptors.42 Depending on their
requirements, brands can use the above - mentioned data types and analytics tech-
niques to better understand their social media presence and engagement.
To engage with different social media users, many brands engage in social testing.
Social testing on social media is a method of evaluating the effectiveness of different
content, strategies or tactics, on various social media platforms. It involves creating
and comparing different versions of the same post or campaign and measuring its
performance based on a predefined goal. The goal could be to increase engagement,
traffic, conversions or any other metric that is relevant to the brand’s objectives.
Social testing can help brands gain data-driven insights into their audience prefer-
ences, behaviour and response to different types of content. It can also help them
optimize their social media strategy and allocate their resources more efficiently.
Different types of social tests exist on social media, including A/B testing, spilt test-
ing and multivariate testing. A/B testing is the simplest form of social testing, where
two versions of the same post or campaign are shown to a random subset of the target
audience and their performance is compared. For example, a marketer could test
whether adding emojis to their Instagram captions increases engagement or not.
HubSpot Academy observed that out of more than 55,000 page views, only 0.9 per
cent of those users were watching the video on their homepage. By creating three dif-
ferent variants of the homepage, HubSpot were able to identify a particular homepage
style that increased video viewing by 6 per cent and resultant sign-ups.43 Split testing,
a variant of A/B testing, involves splitting the entire audience into two or more groups
and each group is shown a different version of the post or campaign. The performance
of each group is then compared to determine which version is more effective. For ex-
ample, a marketer could test how different posting times affect the reach and engage-
ment of their Twitter posts. Multivariate testing is a more complex form of social
testing, where multiple variables are changed simultaneously, and their combined ef-
fect is measured. For example, a marketer could test how different combinations of
copy, image and headline affect the click-through rate of their Facebook advertise-
ments. Netflix regularly uses multivariate testing to improve the usability of their user
interface including content, buttons and styles, amongst many other variables.44
Social media analytics testing is highly valuable for improving social media mar-
keting outcomes for brands. It can help brands to understand their audience better,
create more engaging and relevant content, and optimize their social media strategy.
By using social media analytics and testing tools, brand managers can save time and
resources and make data-driven decisions that support their branding objectives.
Chapter summary
In this chapter, we first explored how social media evolved and how brands began
engaging on social media. As social media has become an important part of many
consumers’ daily lives, brands engagement has become critical. In this regard, we
offered the 6C framework of social media engagement that focuses on content,
consistency, continuity, creating authenticity, contests and co-creation. We also dis-
cussed how some brands that are using the 6C framework are successful in today’s
digital marketplace. A significant aspect of the social media world are influencers,
and we discussed the rise and importance of social media influencers for successful
brand engagement. We also provided guidelines on how to select appropriate so-
cial media influencers. Furthermore, success on social media depends on several
good practices that a brand should follow. Finally, we discussed the different digi-
tal analytics tools and techniques that brands can use to increase their chances of
success on social media.
Key concepts
●● Social media
●● Brand management
●● Social media influencers
❍❍ Selection
❍❍ Fraud
●● Social media brand analytics
Exercise questions
1 Select any brand of your choice and examine how its social media engagement
differs on any three different social media platforms.
2 Choose three brands and investigate their activities on social media platforms
highlighting their branding goals.
3 Choose any brand of your liking that is active on social media and critically
evaluate their engagement by applying the 6C framework.
4 Imagine you are a brand manager planning to engage a social media influencer
based on their follower numbers.
a. Identify two influencers each based on their sphere of influence (i.e. nano,
micro, macro or mega).
b. Examine their recent social media posts and critically evaluate their
appropriateness using the criteria provided in this chapter (see the Branding
in practice box on pages 283–84).
5 Imagine you are invited as a consultant by a company that is planning to engage
with their customers on social media. Explain the importance of brand social
media analytics to the company marketing team.
CASE STUDY Wimbledon: match point for digital marketing
This case study, written by Clodagh O’Brien in 2023, is about Wimbledon’s digital
marketing strategy. It looks at how Wimbledon has used innovative technologies and
techniques to continuously attract young audiences (and potential life-long fans) and
promote the sport in an engaging way. Audience segmentation, online and offline content
creation, and the use of various communications are covered here. Brand partnerships
and advertising through those partnerships is also examined. Capitalizing on celebrity
attendance is another aspect to the strategy but the priority is protecting the image and
brand itself (e.g. trademarking its colours).
Finally, embracing AI and encouraging tennis players to endorse/take part in marketing
are part of the strategy.
SOURCE https://digitalmarketinginstitute.com/blog/wimbledon-match-point-for-content-marketing
Case questions
1 Not all sports fans are alike. How does Wimbledon use audience segmentation to
engage with different types of tennis fans on social media?
2 What are the various ways in which Wimbledon uses different social media for
consumer engagement? Critically evaluate Wimbledon’s marketing and social media
strategy employing the 6C framework of social media engagement.
3 Wimbledon has partnered with many established brands. Examine any one of the
integrated campaigns that involves Wimbledon and a partner brand and recommend
suggestions for further refinement for the next Wimbledon tournament.
4 Explain how Wimbledon is using AI and data analytics to improve brand engagement.
5 Tennis stars are social media influencers themselves. If you were a social media
manager at Wimbledon, what steps would you take to make sure that an appropriate
social media influencer is chosen to represent the brand using the guidelines
suggested within the Branding in practice box on pages 283–84?
Endnotes
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JPY7-L67Y)
4 www.searchenginejournal.com/failed-social-media-sites/303421/ (archived at https://
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(archived at https://perma.cc/EGE2-L5S9)
6 www.statista.com/topics/1164/social-networks/#editorsPicks (archived at https://perma.
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7 Chahal, H, Wirtz, J and Verma, A (2020) Social media brand engagement: Dimensions,
drivers and consequences, Journal of Consumer Marketing, 37 (2), 191–204
8 Erkan, I and Evans, C (2016) The influence of eWOM in social media on consumers’
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9 Zhang, K Z and Benyoucef, M (2016) Consumer behavior in social commerce: A
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11 Hollebeek, L D, Glynn, M S and Brodie, R J (2014) Consumer brand engagement in
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12 Müller, J and Christandl, F (2019) Content is king–But who is the king of kings? The
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14 Kervyn, N, Fiske, S T and Malone, C (2012) Brands as intentional agents framework:
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19 Kivetz, R and Simonson, I (2002) Earning the right to indulge: Effort as a determinant
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20 Sorensen, A, Andrews, L and Drennan, J (2017) Using social media posts as resources
for engaging in value co-creation: The case for social media-based cause brand
communities, Journal of Service Theory and Practice, 27 (4), 898–922
21 McCracken, G (1989) Who is the celebrity endorser? Cultural foundations of the
endorsement process, Journal of Consumer Research, 16 (3), 310–21
22 www.statista.com/topics/2496/influence-marketing/#topicOverview (archived at
https://perma.cc/QAW9-VFXF)
23 Gleason, T R, Theran, S A and Newberg, E M (2017) Parasocial interactions and
relationships in early adolescence, Frontiers in Psychology, 8, 246529
24 www.theguardian.com/media/2022/feb/13/too-close-for-comfort-the-pitfalls-of-
parasocial-relationships (archived at https://perma.cc/X7HR-7FFT)
25 www.medicalnewstoday.com/articles/parasocial-relationships (archived at https://perma.
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26 Ooi, K B, Lee, V H, Hew, J J, Leong, L Y, Tan, G W H and Lim, A F (2023) Social media
influencers: An effective marketing approach?, Journal of Business Research, 160,
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27 Rohde, P and Mau, G (2021) ‘It’s selling like hotcakes’: Deconstructing social media
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28 Tandon, A, Dhir, A, Almugren, I, AlNemer, G N and Mäntymäki, M (2021) Fear of
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and framework for future research, Internet Research, 31 (3), 782–821
29 Przybylski, A K, Murayama, K, DeHaan, C R and Gladwell, V (2013) Motivational,
emotional, and behavioral correlates of fear of missing out, Computers in Human
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30 www.statista.com/statistics/1250681/share-of-instagram-influencers-involved-in-fraud-
worldwide/ (archived at https://perma.cc/9FN8-LRMT)
31 www.theguardian.com/world/2017/oct/08/dove-apologises-for-ad-showing-black-
woman-turning-into-white-one (archived at https://perma.cc/7Q99-YN2Q)
32 Kim, W G, Lim, H and Brymer, R A (2015) The effectiveness of managing social media
on hotel performance, International Journal of Hospitality Management, 44, 165–71
33 Moon, S and Iacobucci, D (2022) Social media analytics and its applications in
marketing, Foundations and Trends in Marketing, 15 (4), 213–92
34 Wang, Y, Deng, Q, Rod, M and Ji, S (2021) A thematic exploration of social media
analytics in marketing research and an agenda for future inquiry, Journal of Strategic
Marketing, 29 (6), 471–91
35 Gandomi, A and Haider, M (2015) Beyond the hype: Big data concepts, methods, and
analytics, International Journal of Information Management, 35 (2), 137–44
36 Fan, W and Gordon, M D (2014) The power of social media analytics, Communications
of the ACM, 57 (6), 74–81
37 Lee, A J, Yang, F C, Chen, C H, Wang, C S and Sun, C Y (2016) Mining perceptual
maps from consumer reviews, Decision Support Systems, 82, 12–25
38 Chen, H, Chiang, R H and Storey, V C (2012) Business intelligence and analytics: From
big data to big impact, MIS Quarterly, 36 (4), 1165–88
39 Ordenes, F V, Ludwig, S, De Ruyter, K, Grewal, D and Wetzels, M (2017) Unveiling
what is written in the stars: Analyzing explicit, implicit, and discourse patterns of
sentiment in social media, Journal of Consumer Research, 43(6), 875–94
40 Gandomi, A and Haider, M (2015) Beyond the hype: Big data concepts, methods, and
analytics, International Journal of Information Management, 35 (2), 137–44
41 Aswani, R, Kar, A K, Ilavarasan, P V and Dwivedi, Y K (2018) Search engine marketing
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42 Miah, S J, Vu, H Q, Gammack, J and McGrath, M (2017) A big data analytics method
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43 https://blog.hubspot.com/marketing/a-b-testing-experiments-examples (archived at
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44 https://netflixtechblog.com/what-is-an-a-b-test-b08cc1b57962 (archived at https://
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295
Global and cross- 16

cultural branding
Overview
In this chapter, we first highlight how brands operate in the global environment. In
the first section, we discuss the role of culture in brand communications. The chapter
includes the advent of the ‘born global’ brands and their unique features. In the final
sections, we reflect upon contemporary issues in global branding, such as country of
brand origin, global brand naming dilemmas and misclassification of brand names
as a strategy. The chapter offers key insights into how to manage global brands suc-
cessfully.

●● Understand the global branding environment

●● Appreciate the impact of culture on international branding
●● Develop an understanding of the digital era global brands
●● Gain insights into the latest developments in global branding strategies
Branding in the global environment

As discussed in Chapter 2, historically most brands started off as local and remained
that way for long periods. However, as globalization allowed trade between far flung
markets, brands became international symbol of trust between manufacturers, trad-
ers and consumers. New transport means including railways, shipping and air trans-
port allowed brands to expand globally in the 20th century. The 21st century brought
a new wave of expansion through digital technologies and the rise of social media,
as discussed in Chapter 15. Thus, the evolution of marketplaces, transportation and
technologies now allows brands to operate globally without having to establish lo-
cally first, as was the case in the past.1
Academic researchers distinguish global brands from local brands based on their
geographical reach and marketing activities. Today’s global brands serve different
geographical regions with the same brand name and similar marketing strategies and
characterize an important aspect of global consumer culture. Local brands, in con-
trast, are marketed in a specific country or a geographical area.2 For example, KitKat,
the much-loved chocolate brand from Nestlé, has adapted to local tastes in Japan by
introducing more than 300 limited-edition seasonal and regional flavours, such as
Baked Potato, Sake and Wasabi, while continuing its standardized global brand com-
munication.
Operating in global environments offers several benefits for brands.3 Firstly,
brands get access to large consumer and business markets. This allows brands to
increase brand awareness, revenues, market share and achieve economies of scale in
branding activities. Secondly, operating in a global environment offers financial sta-
bility to brands. For instance, if one market is facing economic downturn, brands
can focus on other growth markets and maintain their revenue streams. Global
branding also helps brand explore, examine and adapt to various global cultural
trends.4 This can help with product innovations, advertising effectiveness and engag-
ing with global customer segments.
However, such opportunities are also coupled with substantial challenges such as
environmental degradation, income inequalities, workers’ rights, child labour and
fuelling over-consumption, among many others.5 For example, British Petroleum
(BP), the global oil giant, was involved in a legal and environmental disaster in 2010,
when the Deepwater Horizon oil rig exploded and sank in the Gulf of Mexico, kill-
ing 11 workers and releasing about 4 million barrels of oil into the sea.6 BP was
found guilty of gross negligence and misconduct, and faced billions of dollars in
fines, penalties, claims and cleanup costs. The oil spill had devastating effects on
marine life, wildlife, economy and people’s health in the Gulf region. Similarly, Shell,
another leading oil firm, was involved in an environmental crisis involving crude oil
spillage in Nigeria.7 Fashion brands such as H&M, Boohoo, Zara, Primark, Gap and
many others have courted controversy regarding their environmental impact and
labour rights.8
Uniqlo: a global brand with a local fit
Uniqlo is one of the most successful and innovative global apparel brands from
Japan, with a presence in over 25 countries and territories. The company sells a
wide range of products, including casual wear, innerwear, accessories and
functional clothing. Uniqlo’s global marketing strategy is based on the idea of
‘LifeWear’, meaning that it provides simple, high-quality and versatile clothing that
enhances the lives of its customers.
Global and cross-cultural branding 297
One of the ways that Uniqlo does this is by offering products that fit the local
needs and preferences of its customers. For example, in India, Uniqlo launched a
brand called the Kurta Collection, which features traditional Indian garments with
modern design and technology. In France, Uniqlo created a brand called Inès de la
Fressange, which is a collaboration with a famous French model and designer
inspired by Parisian chic and elegance. In Australia, Uniqlo developed a brand called
Ultra Light Down, which is a lightweight and compact down jacket that can be worn
in various seasons and occasions. The above are examples of product customization
that appeals to local consumer preferences.
Further, Uniqlo localizes its global brand communications by creating socially
responsible and impactful campaigns that connect with its target audiences. For
example, it created a campaign called Peace for All in collaboration with celebrities
and artists who have designed t-shirts. The profits from the sale of these t-shirts,
more than $4.7 million to date, is donated to charity sector organizations such as the
UNHCR, Save the Children and PLAN International.
By offering relevant and meaningful products and campaigns to the local markets,
Uniqlo has been able to establish its global brand identity, while also satisfying the
different needs and wants of its customers. The company’s global marketing strategy
has enabled it to achieve high levels of customer patronage, brand awareness and
social impact across the world.
Branding in global environments presents several opportunities, while, at the same

time, there are inherent risks involved that need to be managed. Hence, brand man-
agers should be aware of global socio-political, economic, technological and legal
issues (the PESTL factors) and appropriately adjust their strategies. In addition, cul-
ture plays a pivotal role in global brand management, as discussed in the following
section.
The role of culture in branding

Culture is often described as a collection of ideas, customs and social behaviour of a
particular people or society. Culture, while transmitted across generation to genera-
tion, is a dynamic concept and thus evolves over time. Culture and branding are in-
terwoven. Brands offer a symbolic representation of culture as consumers use brands
in their activities for meaning making. Cultural theorists help us understand how
societies at a macro level get influenced by cultural forces. One of the most famous
cultural frameworks is proposed by Geert Hofstede which identifies societies on six
cultural dimensions, as detailed in Table 16.1.
Table 16.1 Macro cultural dimensions proposed by Geert Hofstede9
Dimension Definition Example Countries
Power distance The extent to High power distance High – Philippines

which the less cultures tend to have (94), Mexico (81)
powerful members centralized authority, Low – Austria
of a society accept hierarchical structures and (11), New Zealand
and expect that large gaps between the (22)
power is rich and the poor. Low
distributed power distance cultures
unequally. tend to have decentralized
authority, flat structures
and small gaps between
the rich and the poor.
Individualism vs The degree to Individualistic cultures tend Individualist –
collectivism which individuals to value personal freedom, USA (91),
are integrated into autonomy and Australia (90)
groups or expected achievement. Collectivistic Collectivist –
to look after cultures tend to value Guatemala (6),
themselves. group harmony, loyalty and Pakistan (14)
conformity.
Masculinity vs The distribution of Masculine cultures tend to Masculine –
femininity roles and values value competitiveness, Japan (95), Italy
between the assertiveness and (70)
genders. ambition. Feminine cultures Feminine –
tend to value cooperation, Sweden (5),
nurturance and quality of Costa Rica (21)
life.
Uncertainty The tolerance High uncertainty avoidance High – Greece
avoidance levels of a society cultures tend to have strict (100), Uruguay
to uncertain or rules, regulations and (98)
ambiguous rituals. Low uncertainty Low – Singapore
situations. avoidance cultures tend to (8), Denmark (23)
have flexible norms,
tolerance and openness.
Long-term vs The extent to Long-term oriented Long-term –
short-term which a society cultures tend to value South Korea
orientation exhibits a perseverance, thrift and (100), China (87)
pragmatic future- adaptation. Short-term Short-
oriented oriented cultures tend to term – Nigeria
perspective rather value tradition, stability and (13), Norway (35)
than a conventional reciprocation.
historical or
short-term point of
view.
(continued)
Dimension Definition Example Countries
Indulgence vs The extent to Indulgent cultures tend to Indulgence –

restraint which a society value happiness, leisure United Kingdom
allows relatively and personal expression. (69), Brazil (59)
free gratification of Restrained cultures tend to Restraint –
basic and natural value duty, moderation and Saudi Arabia (14),
human desires self-discipline. Poland (29)
related to enjoying
life and having fun.
Figure 16.1 Comparing macro cultural dimensions across countries
China x India x United Kingdom x United States x
89 91 87
80 77
66 69 68
66 62
56
48 51 51
46
40 40
35 35
30 28 24 26
20
Power Uncertainty Long-term

distance Individualism Masculinity avoidance orientation Indulgence
SOURCE www.hofstede-insights.com/country-comparison-tool
Figure 16.1 captures the country level macro cultural differences that can influence
brand consumption as well. For example, China and India both have high power
distance scores, which reflect a society that believes that inequalities amongst people
are acceptable and there is appreciation for hierarchy and a top-down structure in
society and organizations. From a branding perspective, this has substantial implica-
tions. For example, a brand consumed by the superiors or higher-status consumers
will be preferred more by people in the lower echelons of the hierarchy.10 The figure
also shows stark differences between the USA and China for the individuals/collec-
tivism dimension. In individualist societies, ties between individuals are loose and
people are expected to look after themselves first. For example, the well-known
‘American dream’ of a prosperous lifestyle is a representation, wherein people hope
for a better quality of life and a higher standard of living than their parents. The
belief is that anyone, regardless of their status can ‘pull up their socks’ and raise
themselves up from poverty. In collectivist cultures, cohesive in-group behaviour is
the norm. Thus, people tend to follow their social group’s behaviour closely. The
rapid rise of livestreaming-based purchases in China is an example of this behaviour
and the industry is estimated to have generated more than $480 billion in 2022.11
Similar to the macro cultural framework proposed by Geert Hofstede, different
frameworks also exist that identify country-level cultural differences. Other cultural
theory researchers including Fons Trompenaars and Charles Hampden-Turner of-
fered a different framework to understand diversity in global business. They identified
dimensions such as universalism vs particularism, neutrality vs affectivity, individual-
ism vs communitarianism, specific vs diffuse, internal vs external control and achieve-
ment vs ascription orientation.12 A number of other frameworks exist that examine
country cultures from the perspective of language, religion and geography.13 The
Hofstede framework remains one of the most popular globally.
While these macro frameworks explain country level differences, at individual or a
micro-group level, people may or may not represent the country level cultural trait. For
example, China is identified as a collectivist culture (see Figure 16.1), however, many
individuals living in China could be highly individualistic. Similarly, there could be
many American or British consumers who will be collectivist at an individual level,
however, their country cultural trait is individualist. Thus, the macro cultural frame-
works have been criticized in academic literature for over-simplification, over-general-
ization and at times rigidity as they do not take into consideration the dynamically
evolving nature of cultural norms. For example, as mentioned, livestreaming-based
sales are quite popular in China; however, it is not as popular in many other collectiv-
ist countries including India, Mexico and Pakistan. Thus, it could be challenging for a
global brand to assume that they can standardize their products or services in a market
based on macro cultural traits.
Frameworks based on micro level traits

Considering the challenges associated with macro cultural frameworks in global
branding, academic researchers have proposed frameworks that are based on micro
or individual level cultural traits. For instance, self-construal, that is how individuals
define themselves vis-à-vis others, is useful to cultural differences at individual level.
An individual can possess two different types of self-construal: independent or
interdependent. Independent self-construal is characterized by the primary focus on
oneself rather than the group. Contrarily, individuals with stronger interdependent
self-construal demonstrate a strong sense of group affiliation and fundamental
connectedness with others over their individual preferences and wishes.14 Similarly,
another important micro level cultural construct is associated with consumer
thinking styles, involving holistic vs analytical thinking.15 Holistic thinkers, mostly
Figure 16.2 T he same object, a dining table with chairs, is construed differently d epending
on culturally motivated individual thinking styles
SOURCE Unsplash.com/shche_team
a ssociated with East Asian countries, tend to reflect on the whole situation or con-
text and focus on relationships between things. On the other hand, analytical think-
ers, mostly associated with Western countries, are focused on rules and logic, cause
and effect, and examine complex problems through individual parts. For example,
while buying a dining table, a holistic thinker will consider the function of the table
as a space for social or family gathering to enjoy a meal together. An analytical
thinker, however, will see the dining table in terms of its quality, aesthetics, comfort
and functionality (see Figure 16.2).
A substantial body of literature in branding, particularly pertaining to Consumer
Culture Theory (CCT), examines the role of consumption culture.16 CCT scholars are
interested in consumption culture at individual or group level. CCT research examines
consumption culture using varied lenses including how consumers derive their own
identity markers using brands;17 how they form and demonstrate belonging to a cul-
tural notion through brand communities or tribes;18 why and how consumers follow
global or local trends; and socio-historic patterns associated with brands.19
These macro and micro cultural frameworks can help brand managers establish
appropriate strategies to develop stronger customer-brand relationship across cul-
turally homogenous or heterogeneous markets. However, brand managers need to
remain conscious that they may have to use multiple macro and micro frameworks
to achieve success in global markets.
Standardization vs customization
Riding the wave of globalization, many brands are entering other markets than their
own country of origin. However, what strategy to use to enter foreign markets is a
hotly debated topic. A seminal viewpoint was presented in this regard by Professor
Theodore Levitt in his 1983 article published in the Harvard Business Review titled
‘The globalization of markets’.20 Levitt argued for a standardization approach
suggesting that ‘companies must learn to operate as if the world were one large mar-
ket – ignoring superficial regional and national differences’ (p 92). However,
proponents of an alternative approach termed as customization argue that cultural
differences, local customer characteristics and preferences should be taken into

consideration.21 This important debate has a further addition, suggesting the third
approach of glocalization, which is a hybrid strategy that combines elements of both
standardization and customization by adapting the global standardization strategy to
local markets while maintaining some core elements that are consistent across all
markets.22 Each approach has its own advantages and disadvantages, as discussed in
Table 16.2.
Another important aspect to consider is the difference in product and communi-
cation standardization vs customization. Product customization is driven by produc-
tion process streamlining and could have significant costs associated with logistics.
For example, a laptop nowadays may be assembled in one country,23 however, its
components may come from more than 30–40 different countries.24 Moreover,
brands should take into consideration consumers preferences. On the other hand,
communication customization may differ based on mostly customer preferences. For
example, automobile brands adopt their products between the UK and the US as cars
are driven on different sides of the road. However, as both countries share substan-
tial cultural norms and a common language, the communications can be standard-
ized to a large extent. On the other hand, Coca-Cola sells the same product, with the
same logo and packaging, in most countries. However, its communication is highly
customized and involves local celebrities and events. For example, in China, Lu Han,
a popular singer, actor and dancer, is Coca-Cola’s brand endorser, while in India, it
uses Bollywood film celebrities such as Aamir Khan, Aishwarya Rai and Ranbir
Table 16.2 Advantages and disadvantages of standardization, customization, and glocalization
Approach Advantages Disadvantages Brands that use such an approach
Standardization ●● A consistent brand image and ●● Misalignment with customer ●● Apple is known for its standardized
reputation across the world needs, wants and expectations products, design, packaging, pricing and
●● Economies of scale and lower costs in different markets advertising across the world. Apple relies
due to mass production and ●● Reduced responsiveness and on its strong brand image and reputation
distribution. flexibility to changing market to appeal to customers in different
●● Transferable experience and conditions and customer markets, without compromising on its
knowledge among brand teams. feedback. quality and innovation.
●● Easier control and coordination of ●● Potential legal, ethical or cultural ●● Starbucks uses standardization to create a
branding activities. issues, due to ignoring local consistent customer experience and brand
norms and regulations. identity across the world. Starbucks offers the
●● Loss of competitive advantage same core products, such as coffee, tea and
due to lack of differentiation from pastries, with the same logo, store design and
competitors. service standards in every market.
Customization ●● Higher customer satisfaction and ●● Higher costs and complexity due ●● KFC uses customization to adapt its menu,
brand loyalty due to meeting their to developing and managing ingredients, flavours and promotions to
specific needs and wants. different products and brand suit local tastes and cultures. For example,
●● Increased market share and campaigns for each market. in China, KFC offers congee, egg tarts and
profitability of the brand due to ●● Inconsistent brand image and soy milk; in India, it offers vegetarian
creating a unique value proposition identity across the world. options and spicy sauces; and in Japan, it
for each market. ●● Difficulties in transferring brand offers fried chicken as a Christmas meal.
●● Enhanced brand communication experience and knowledge ●● Netflix uses customization to offer
creativity and innovation due to among marketing teams. different content, languages, subtitles and
exploring new opportunities and ●● Challenges in controlling and recommendations for each market. Netflix
challenges in each market. coordinating branding and also produces original content that reflects
●● Improved brand social responsibility marketing activities. the local culture, history and values of
and reputation due to respecting each market.
local cultures and values.
(continued)
303
304
Approach Advantages Disadvantages Brands that use such an approach
Glocalization ●● Balancing the trade-offs between ●● Finding the optimal level of ●● IKEA uses glocalization to combine its
brand message and feature adaptation for each market for global brand identity with local customer
standardization and customization. each brand. needs. IKEA offers the same products,
●● Leveraging the global brand equity ●● Managing the potential conflicts design, quality and low prices across the
while catering to local customer or inconsistencies between world. However, it also adapts its product
preferences. global and local branding and names, sizes, colours, styles and
●● Achieving synergies between global marketing objectives. catalogues to suit local cultures and
and local brand teams. ●● Allocating the resources and lifestyles.
●● Enhancing the flexibility and responsibilities between global ●● Toyota uses glocalization to achieve both
responsiveness to market changes. and local brand teams. global efficiency and local responsiveness.
●● Measuring the performance and Toyota offers some global models of cars
effectiveness of glocalization. with the same logo and quality standards
across the world. However, it also adapts
its car features and prices to suit local
market conditions and customer
preferences.
Kapoor. Similarly, in the Middle East region, Coca-Cola has engaged with local
Arabic singers such as Nancy Ajram, and football players.
Types of customization offered by some brands
Burger King, a globally recognized fast-food brand originating from the United
States, illustrates a robust strategy of customizing its offerings to meet distinct
consumer preferences and cultural differences in various markets.
Burger King embraces localized product customization through culinary
adaptations that respect regional taste profiles. In India, where vegetarianism is
popular, Burger King innovatively offers a diverse range of vegetarian options,
featuring plant-based patties and unique local flavours. This culinary customization
aligns with the cultural and dietary preferences of the Indian market, showcasing
Burger King’s commitment to providing appealing choices for a diverse customer
base.
Moreover, Burger King understands the importance of respecting religious beliefs
and customs. In Middle Eastern markets, where Halal dietary guidelines are crucial,
it ensures that its menu strictly adheres to Halal requirements. This consideration for
religious customs underscores Burger King’s dedication to providing inclusive and
respectful product offerings.
Additionally, Burger King effectively customizes its promotional and marketing
strategies to align with regional events, festivities and trends. In countries where
specific cultural celebrations are significant, it tailors advertising campaigns and
limited time offers to coincide with these events. This approach demonstrates
Burger King’s adeptness in leveraging local culture to enhance brand engagement
and relevance.
In summary, Burger King’s approach to product customization illustrates a
commendable understanding of local tastes, cultural considerations and market
dynamics. By adapting menus, marketing strategies and culinary choices, Burger
King effectively navigates the global fast-food landscape, reinforcing its position as
a popular and adaptable brand in the industry.
‘Born-global’ brands in the digital age

Most multinational brands, such as Microsoft, Coca-Cola, Phillips and Siemens,
grew big in their home markets before they went overseas. Born-global brands, a
concept emerging in the late 20th century, broke this tradition and swiftly
internationalized from their inception, operating on a global scale from a very early
stage. This phenomenon challenges traditional internationalization theories, such as
the Uppsala Model,25 which emphasized incremental and experiential international
expansion. For example, of the 300 largest publicly listed UK companies in 2008,
fewer than 30 per cent generate half of their total revenues from international sales.26
However, many ‘born-global’ firms generate a very high percentage of their revenues
from international markets. The rise of born-global brands has been attributed to
factors such as advancements in technology, globalization and shifts in consumer
behaviour.27
The roots of this rapid internationalization can be traced to the mid-1980s when
technological advancements, especially in communication and transportation, facili-
tated global operations for startups and SMEs.28 This was further fuelled by new
market conditions such as increased globalization, market liberalization and regional
integration, which created substantial opportunities globally for new entrants.29 For
example, Logitech, a Swiss-American brand that designs, manufactures and markets
computer peripherals and software, was founded in 1981. Within a few years of its
establishment, Logitech had expanded its operations to Europe, Asia and North
America, establishing itself as a global leader in its industry. Similarly, Cochlear, a
global leader in the ear implant market, was established in Australia in 1983 to
develop and manufacture implantable hearing devices for people with severe to
profound hearing loss. The brand’s early internationalization strategy involved

establishing partnerships with hospitals and research centres worldwide, enabling it
to quickly expand its global reach.
The emergence of the internet in the 1990s exponentially accelerated the trend,
enabling firms to reach a global audience almost instantly. For example, established
in 1999, ASOS, an online fashion retailer that targets young adults, embraced the
potential of e-commerce early on, establishing a global online presence and expand-
ing its reach to over 200 countries. Similarly, Booking.com, an online travel agency
that was founded in 1996 in the Netherlands, allows customers to book hotels,
flights, car rentals and other travel services worldwide. It has become one of the larg-
est travel e-commerce companies in the world over time.
Born-global brands leverage digital platforms, e-commerce and social media to
establish a global presence, enabling them to engage with diverse consumer seg-
ments. Their strategies often involve utilizing online platforms to bypass traditional
barriers to internationalization.30 For example, launched in 2003 in Luxembourg,
Skype, a communication brand that provides video chat and voice calls over the in-
ternet, had 50 million users globally by 2005 and more than 600 million in just five
years. The brand’s innovative technology which reduced communications costs and
its user-friendly interface enabled it to gain rapid global adoption, becoming a house-
hold name within a few years of its launch. Similarly, Spotify, the Swedish audio
streaming and media services brand, was founded in 2006. The brand used global
licensing agreements that allowed it to quickly expand its reach to over 180 coun-
tries, establishing itself as a leading player in the music streaming industry. Most of
the leading digital brands that we know and use today are born-global including
Amazon (retail and ecommerce), Dell (computing hardware), eBay (auctions),
Google (search engine), Instagram (social media), Netflix (video streaming), Paypal
(finance) and Xiaomi (smartphones). Thus, born-global brands are not sector-de-
pendent and have emerged across a variety of industries globally.
In conclusion, born-global brands represent a paradigm shift in international
business and branding, challenging conventional models and highlighting the trans-
formative influence of market changes, technology and transportation, on global
market entry strategies.
Supercell: born-global gaming
Supercell is a mobile gaming company founded in Helsinki, Finland, in 2010. The

company is best known for its hit games such as Clash of Clans, Clash Royale, Brawl
Stars and Hay Day.31 The company has achieved remarkable success in the global
mobile gaming market, with over 100 million daily active players and billions of
dollars in revenue.32
Supercell’s success was based on external environmental factors such as the
rapid penetration of the internet in most parts of the world and the rise of social
media as well as smartphone technology. Moreover, the company’s unique culture
and strategy which focused on creating high-quality and engaging games for a
global audience from inception helped its gaming brand’s substantial success.
Supercell adopted a ‘cell’ structure, where small and independent teams of
developers worked on their own projects with full autonomy and responsibility.
Leveraging the power of data and analytics that was available due to digital
advancements, the brand used real-time feedback and metrics to optimize the game
design, monetization and marketing. This also allowed the company to quickly retire
game brands that did not resonate with players.
Understanding global consumer preferences, the company was able to expand its
game brand portfolio into different genres, such as strategy, card, action and casual
games, to appeal to a diverse and loyal fan base. Its born-global nature allowed the
company to engage with other born-global brands from different markets such as
Tencent (China), SoftBank (Japan) and NetEase (China), to access new markets,
especially in Asia.
In 2012, Supercell was recognized as the best Nordic startup company and
chosen as the Finnish game developer of the year.33 The following year, the brand
won the Finnish Technology Educator 2013 competition, and the company was
chosen as the software entrepreneur of the year.34 The research and consultancy
agency T-Media chose Supercell as Finland’s most reputable company in their
Luottamus and Maine (Trust and Reputation) report.35
In conclusion, Supercell is a remarkable example of how a born-global brand can
create a successful impact worldwide. Supercell has demonstrated its ability to
create high-quality and engaging games that have attracted millions of fans around
the world. However, Supercell also needs to be aware of the challenges and risks
that it faces in sustaining its innovation and popularity in the future.
The role of brands’ country of origin

In a number of earlier chapters, we discussed the role of country of origin in branding.
Country of origin is one of the most researched aspects of international marketing.36
Historically, categories of products associated with particular countries, such as
French perfumes, Chinese silk, Indian spices and Italian food, allowed traders to
charge a premium for the origin of their product. As markets and technology evolved,
advance industrialized countries such as Germany and Switzerland became well
known for their high quality, precision engineering and performance in specific sec-
tors such as automobiles and watch-making respectively. Further developments in
the domain of branding over the years led to the emergence of brands from these
countries that imbued the characteristics of provenance for their benefit, leading to
the concept of ‘brand origin’.37
A brand’s country of origin refers to the perceived or actual geographic location
associated with a brand or product.38 The concept has further evolved to encompass
the country, region or city where the brand is headquartered, manufactures its prod-
ucts and sources its materials.39 A brand’s country of origin can affect consumer
perceptions, preferences, attitudes and loyalty towards it, as well as its positioning,
differentiation and communication in the market.40 For example, BMW, Audi and
Volkswagen regularly highlight their German origin. Similarly, most Swiss watch
brands prominently mention ‘Swiss-made’ to utilize the positive origin perceptions
that consumers have.
Not all countries have positive origin perceptions associated with them however.
Thus, brands use foreign-sounding names to circumvent negative perceptions associ-
ated with their actual country of origin. This practice, known as foreign branding,
aims to evoke positive associations with a different country or culture, thereby en-
hancing brand appeal and overcoming potential biases. Wanko, Hotwind, Scat and
Marisfrolg (the L is silent) are all Chinese brands attempting to tap into the appeal
of Western sophistication. Some brands have even employed fonts and words that
mimic the logos of megabrands, like Adidos, Hike, Cnoverse and Fuma.41 Such
branding endeavours could also lead to cultural appropriation. For instance, there is
a Chinese eyewear brand called Helen Keller with the motto ‘you see the world, the
world sees you’; notwithstanding the fact that Helen Keller was both blind and deaf.
Such origin-avoidance effect is not only common in the Eastern emerging markets
but also occurs around the world. For instance, Parfois, a women’s accessories brand
from Portugal, uses a French-sounding name to convey a sense of elegance and so-
phistication. The brand is now available in 70 countries with more than 1,000 stores.
Caffè Nero is a British brand with an Italian sounding name. Dolmio, a leading
brand of pasta sauce, which carries an Italian-sounding name was originally launched
as Alora in Australia by Masterfoods. However, when test-launching its products in
the UK, the brand name was changed to Dolmio to sound more Italian, which has
now become global. Ginsu knives, which are much-loved by American consumers,
were originally branded as Quikut. Through market research the company found
that Quikut lacked panache, and thus the company created a new brand name that
alluded to the exceptional sharpness and durability of a Japanese sword, Ginsu.
Currys, a UK retailer previously known as Dixons, launched Matsui in the 1980s as
a brand for its consumer electronics products to profit from the positive perceptions
of Japanese electronics in consumer minds. The brand name and logo suggested a
Japanese origin, with a sun symbol and the slogan ‘Japanese Technology Made
Perfect’. However, the Matsui products were actually made in the UK with imported
parts, and had no connection to Japan or its technology. Similarly, Røde Microphones,
a leading audio technology brand, is spelt with an ‘ø’ in the middle which gives the
impression that the company is Scandinavian, when it is in fact Australian.
All the above examples of cloaking the country of origin with brand names exist
because people demonstrate different levels of positive or negative associations with
country of origin. In academic research, the positive effects of country of origin are
studied under the label of consumer affinity, and the negative effects are studied as
consumer animosity. Consumer affinity refers to the positive feelings and preferences
that consumers have for products from certain countries, usually their own or those
with similar cultures, values or history.42 Consumer animosity refers to the negative
feelings and aversions that consumers have for products from certain countries, usu-
ally those with political, military or economic conflicts or disagreements with their
own.43 For example, some American consumers may have a high affinity with prod-
ucts made in the USA or Canada, but high animosity for products made in China or
Iran. Thus, many brands use foreign-sounding names to avoid negative associations
with their original country of origin and take advantage of positive origin associa-
tions with foreign names. Academic research, however, shows that when consumers
find out a brand has been acting in a deceptive manner, they tend to punish the brand
Figure 16.3 pple uses language mentioned in the image to avoid stating ‘made in
A
China’
SOURCE Author’s
by avoiding purchase and spreading negative word-of-mouth.44 Thus, brands trying

to rapidly expand into new product categories or markets should exercise circum-
spection when planning to use foreign-sounding names, as this might not be benefi-
cial in the long term if consumers associate such practice with deception.
Globally successful brands have acceptance from consumers worldwide. Thus, a
different country of manufacturing or assembly is not perceived as negative for them.
For example, in its global brand communications, including its product packaging,
Apple uses the wording ‘Designed by Apple in California. Assembled in China’ rather
than stating ‘made in China’ (see Figure 16.3). In doing so, Apple utilizes the positive
associations people have with California-based technology companies. It also dem-
onstrates that the product is produced in another country and thus captures the
globalness of the brand Apple. Similarly, it is widely known that most global auto-
mobile brands such as Ford, Mercedes, Volkswagen and Toyota have their design
origin and manufacturing plants in many different countries. This shows the power
of global branding.
Chapter summary
This chapter captured the global environment in which today’s brands have to oper-
ate to be successful. We also examined the important role that macro and micro
culture plays in international markets. We looked at how brands are using a variety
of approaches to succeed in a global environment. For example, some brands use
standardization while others use customization, and some others use a hybrid ap-
proach. With the rise of globalization and digital technologies, born-global brands
have emerged defying conventional wisdom that brands first need to be strong in
their local market before venturing into foreign markets. Finally, we discussed the
critical role of brand’s country of origin and the different tactics and strategies used
by the brands. The chapter provides several key applications and insights for success-
ful global branding.
Key concepts
●● International branding
●● Global branding
●● Culture
❍❍ Macro culture
❍❍ Micro culture
●● Standardization
●● Globalization
●● Glocalization
●● Born global
●● Country of origin
❍❍ Brand origin
Exercise questions
1 Describe the advantages and challenges of operating in a global environment for
brands.
2 Using your own examples, explain how brands utilize macro and micro cultural
influences for building successful consumer-brand relationships.
3 Critically evaluate the statement ‘In order to succeed in global markets, brands
should take into account cultural differences.’
4 Using the standardization vs customization debate, discuss, with examples, the
pros and cons of each approach.
5 Critically evaluate the role of increasing globalization and technology in rise of
‘born-global’ brands.
6 Using the country of origin debate, explain why companies try to mask their
brand origin and its short-term and long-term impact.
CASE STUDY
Zeekr: navigating the global expansion of a Chinese
premium EV brand
This case examines the international growth strategy of Zeekr, the premium electric
vehicle (EV) brand owned by the Chinese automaker Geely. It focuses on Zeekr’s 2023
launch plans in the Middle East and Europe, as well as its ambitions to go public in the
USA. The case analyses how Zeekr approaches overseas expansion amid trade tensions
and competitive pressures in the EV space.
Founded in 2021 and backed by Geely, Zeekr operates in the premium EV segment
competing with brands like Audi, BMW and Polestar. Zeekr delivered around 150,000
vehicles in its first two years exclusively in China. However, with slowing EV sales growth
and intensifying competition in China, Zeekr announced plans to expand internationally.
This includes a $1 billion IPO in the USA as well as market launches in Europe and the
Middle East in 2023.
In September 2022, Zeekr signed agreements to launch in Saudi Arabia, UAE, Qatar
and Bahrain in partnership with leading dealers. It aims to capture a share in
underdeveloped premium EV segments in these markets. Zeekr is offering competitive
pricing compared with gas-powered rivals and expects 10,000 units of sales across the
four Middle Eastern markets by 2025. The move aligns with China’s deepening economic
ties in the region.
Concurrently, Zeekr decided to enter Europe, starting with the Netherlands and
Sweden in the later part of 2022. However, Zeekr and other Chinese EVs have faced
regulatory pushback in Europe regarding unfair subsidies. This could hamper growth
plans in the medium term.
Zeekr confidentially filed for a $1 billion US IPO that would be the largest Chinese
listing since DiDi, a vehicle-for-hire company similar to Uber, in 2021. The offering comes
amid strained diplomatic ties, limiting Chinese IPOs in the USA, and seeks to raise capital
for global expansion.
Zeekr’s Middle Eastern expansion represents a bold move to capitalize on emerging EV
markets. Zeekr exemplifies Chinese EV startups expanding overseas for growth and
funding amid intensifying domestic competition. However, navigating international
markets poses an array of challenges, such as protectionist policies, competitive
dynamics and cultural differences across regions. As such, these firms must adapt their
branding, pricing and strategic focus across different geographies.
The case suggests EV makers with global ambitions must balance seizing opportunities
in new markets with mitigating regulatory risks and executing expansion plans
sustainably. As a young brand, Zeekr provides an interesting test case for how emerging
Chinese EV brands can internationalize competitively.
Case questions
1 Based on your reading of the case and the chapter, evaluate the cultural challenges
Zeekr may face in becoming a global brand.
2 Imagine that Zeekr is planning to launch its high-end cars in your country. Using the
macro and micro cultural aspects discussed in the chapter, what advice would you
give to the brand about adapting to local consumer preferences?
3 In marketing their product successfully across the world, what type of product and
communication customizations will Zeekr have to perform? Explain using examples.
4 Critically reflect on the decision by a Chinese firm to use Zeekr as a brand name in
view of the country-of-origin debate.
Endnotes
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2 Gürhan-Canli, Z, Sarial-Abi, G and Hayran, C (2018) Consumers and brands across
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3 Ibid.
4 Yu, L (2003) The global-brand advantage: Research indicates that buyers are more
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5 Steenkamp, J B (2017) Global Brand Strategy: World-wise marketing in the age of
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316
INDEX
NB: page numbers in italic indicate figures or tables
Aaker, D 81 augmented reality (AR) 133

academic-practitioner perspective 6 automobile transmission systems 95
accidental crises 205 AWS. see Amazon Web Services (AWS)
adaptive network theory 91
adherence 76 Babin, J-C 118–19
Advertising Standards Authority (ASA) 107 baby care products 167
Advertising, Trial and Reinforcement (ATR) balance theory 43
108, 109 Balmer, E 42
affective commitment 128, 129 Balmer, J 190
AI. see artificial intelligence (AI) Barra, M 208
ALARM. see Appealing, Legitimate, Applicable, Barwise, P 39
Recognizable, Meaningful (ALARM) Bass, F 39
Amazon Web Services (AWS) 143, 188 behavioural approach 77–79
Ambler, T 7 behavioural economics 46
American Marketing Association (AMA) 6 behavioural loyalty 78–79
ancient civilizations 23–25 behavioural segmentation 98–99
ancient Egypt and India 25, 25 Bettman, J 126
Angry Birds game 62 Bezos, J 12
anthropomorphism 61–62, 94, 210 Bieber, J 13
Antioco, J 11 Big Data analytics 31
anti-Taylorism approach 19 Big Data-based segmentation
An Apology for Lollard Doctrines (Wycliffe) 23 analysis 99
appealing brands 54 Black Lives Matter (BLM) 112
Appealing, Legitimate, Applicable, Recognizable, Blue Ribbon Sports (BRS) 58
Meaningful (ALARM) 54–55, 56, 68, 106 brand alliance 164–65
Apple’s brand name protection, China 57 see also co-branding
applicability 54 Brand Asset Valuator 83
AR. see augmented reality (AR) brand association 91–92
Ardern, J 12 brand attitude 92–93
artificial intelligence (AI) 133, 135, 186 brand awareness 82
ASA. see Advertising Standards Authority (ASA) brand communication
assets compensatory consumption, digital age
brand name 55, 57 114–15
digital presence 62–64 hierarchy of effects models 108
logo 58–59 individual identities 112–14
packaging 66–67 individual impression management
persona 61–62 115–16
slogan 59–61 signals 110, 110–12
sounds and jingles 64–66 theories 107–10
associative network memory model 91–92 tool 105–7
associative network theory 165, 166 brand crisis
ATR. see Advertising, Trial and Reinforcement reputation management 199–202
(ATR) response management 216–17
attitude accessible theory 165, 166 type identification and response 203–4,
attitude-based approach 79–80 203–7
attitude spillover 152 brand engagement
attribution theory 43, 213 customer experience 131–33
augmentation 5 digital and social media 133–35
Index 317
brand equity structure, Colgate-Palmolive 181

brand strength vs. size debate 82 tactical management 184–85
concept 81–82 types 180–82
consumer behaviour and purchasing brand positioning
decisions 92 association, image and brand symbolism
measuring 83–84 91–95
portfolio management 182–83 attributes 89
and value 16 consistency and coherence 183
brand extension definition 88–89
advantages and disadvantages 150–51, fashion industry 97–98
150–51 marketing strategy 89
brand management 141–42 perceptual map 96–98, 97
category and line extensions 143–44 PoC and PoD 95–96
drivers 145–50 segmentation bases 98–100
example 148 toothpaste 90
factors 148–50 brand revitalization 184
portfolio management 183 brand strength 93
risks and rewards, consumer products 153–55 vs. size debate 82
spillover effects 151–52 brand symbolism 93–94
brand features brand valuation 16
ALARM framework 54–55, 56 BrandZ framework 83–84
assets 55–67 Branson, R 12, 150
CBFS 68–69 Brown, M 16
essential values 53–55 BRS. see Blue Ribbon Sports (BRS)
brand image 82, 92 business to business (B2B) 8, 9
branding business to consumer (B2C) 8, 98
ancient civilizations 23–25
augmentation 5 Cacioppo, J T 109
companies 15–17 CAGR. see compound annual growth rate
definitions 6–7 (CAGR)
destination brands 13–14 Campbell, N 13
evolution of 22–23 cancer sufferers 132–33
genesis of 23–28 category extension 143
hyper-personalization 31 Cathy, T 15
ideologies and religion 14–15 causal inferences 42
logo 27 cause-brand alliance. see social cause-brand
management 141–42 alliance
middle ages 26 CBBE. see customer-based brand equity
modern world 28–31 (CBBE)
person brands 12–13 CBFS. see consistent brand feature strategy
physical and service product 3–4 (CBFS)
principles 32 CCT. see consumer culture theory (CCT)
product brands 8–9, 9 Chinese Trademark Authority 57
product engagement matrix 4, 4 Chouinard, Y 113
service brands 9–11 Churchill, W 12
strategy 183 Clegg, N 12
theories and applications 44–45 Cline, E 127
Brand Keys Loyalty Engagement Index 75 co-branding
brand names 55, 57, 60–61 benefits and risks 159–62
brand portfolio management conditions 163–65
advantages and disadvantages 182 definition 158–59
balancing convention and expansion 192–94 psychological mechanisms 165–66
corporate branding 185–91 social cause-brand alliance 166–69, 168–69
definition 177–79 cognitive appraisal theory 213
developing and managing 183 cognitive dissonance 43
equity 182–83 commitment 127–29
monitoring and evaluating 183 communication signals 110, 110–12
318 Index
compensatory consumption 114–15 Defining Advertising Goals for Measured

compound annual growth rate (CAGR) 8 Advertising Results (DAGMAR) 108
concept/brand fit 147 Deming, W E 29
consistent brand feature strategy (CBFS) 68–69 destination brands 13–14
consumer-brand relationships detrimental marketing strategy 94
attachment 129–30 diamond invention 106
engagement (see brand engagement) digital age 46, 114–15
love 130–31 digital data analytics 135
origins and concepts 123–25 digital marketplaces 63
search 124 digital media 133–35
self-brand connection 126 digital presence 62–64
trust and commitment 127–29 digital technologies 211
consumer culture theory (CCT) 43, 94 digital transformation 31, 59
consumers, brand buying distributive justice 214
competitive markets 37–38 double jeopardy effect 40
data panels 38 downward extension 144
marketing, empirical generalizations 39–41
reasons for 42–46 economics and behavioural sciences 43–46
research modelling 41–42 economies services industry 9
consumer socio-demographics 135 Ehrenberg, A 39
continuance commitment 128 elaboration likelihood model (ELM) 43,
Coombs, T 162 108, 109
coping strategies 213 emotional stimulus 92
corporate branding 180 empirical generalizations 39–41
approaches 188–90 environmental profit and loss
characteristics 186 statement 183
DuPont 185–86 Escalas, J 126
heritage, values and reputation 187–88 eSports 133
levers 186–88 evolutionary biology 111
management 190–91 extension fit 145–47
sectors 185 extension logic 149–50
corporate level sustainability 183
corporate social responsibility (CSR) 189 family branding 180–81
Cosmopolitan magazine 147 fashion branding 70
Creating Shared Value (CSV) 188 fashion industry 97–98
Crisafulli, B 40 fast moving consumer goods (FMCG) 77
crisis response strategy 206, 206–7, 208–9 feature/product fit 146, 147
crisis responsibility 203 Feinberg, K 209
cross-cultural effects 210 finance-driven approach 81–82
cultural-identity 94 forecasting models 37–38
culture, character, communication, constituencies, Fournier, S 124–25
covenant and conceptualization fuel cell technology 160–61
(6Cs) 190–91
Curtis, V 172 Gates, B 12
customer-based brand equity (CBBE) 82 gender- and age-based stereotypes 29
customer-centric brand equity 160 General Data Protection Regulation
customer experience 131–33 (GDPR) 32
customer loyalty programs 85–86 generalizability 40–41
customer orientation 211 General Motors (GM) 208–9
customer satisfaction 58–59 geographic segmentation 98–99
customer vs. brand loyalty 76 global brands 2023 16, 17
glocalization 30
Dall’Olmo Riley, F 6 goal fit 145
data mining 135 Goffman, E 115
data warehousing 135 grounded theory 39
de Chernatony, L 6 group-identity 94
decision vs. descriptive models 41–42 Gymshark 102
Index 319
Haier Corporation 56–57 marketing

Hastings, R 11 development 183
heaven 70–72 empirical generalizations 39–41
human associative memory (HAM) theory 91 segmentation 28
hybrid technology 143 technology 135
marketplace 59
identity system 7 maternal and newborn tetanus (MNT) 167
impression management 12, 115–16 meaningfulness 56
individual branding 180, 181 middle ages 26
Industrial Revolution 26–28 mobile commerce 133
informational justice 214 monolithic brand strategy 188
information asymmetry 32, 45–46, 111 Moss, K 13
information integration theory 165, 166 multichannel brand communications
innovation-based brand extension 153–54 approach 132
insurance policy 4 multiplayer online games (MMORPG) 133
interactional justice 214 Munoz, O 212
Interbrand Murakami, T 68
Brand Valuation 83, 84 Museum of the Modern Art (MoMA) 142
methodology 16 Musk, E 12–13
international trade routes 26
internet age 31 negative events for brands
internet-based service economy 10 brand crises and reputation management
199–202
Jacobs, M 70–72 brand crisis type identification and
Jacoby, J 76 response 203–4, 203–7
jewellery icon 118–19 brand transgression 209–11
jingles 64–66 product-harm crises 207–9
Jobs, S 12 service brand failure and recovery 211–14,
justice (fairness) theory 213–14, 214 213
negativity bias 199
Kahneman, D 46 Nestlé, H 187–88
Kapoor, R 154 neuroscience 210
Keller, K L 81, 82 Nokia, consumer electronics 178–79, 179
Keynes, J M 12 normative commitment 128, 129
Klum, H 13 nostalgia 70–72
Kroc, R 30
Kyner, D 76 Ogilvy, D 7
organizational culture 7
legitimacy 54 organizational psychology 115
Levitt, T 4
line extension 144 packaging 66–67
Little, J D 41 Park, C W 76
logit modelling 41 Patagonia, consumers’ ought and ideal
logos 58–59 selves 113–14
loyalty 75, 75 perceptual map 96–98, 97
approaches 77–80 performance-related transgressions 210
debate 80–81 performance-unrelated/value-based
leaders 75 transgressions 210
programmes 80–81 person brands 12–13
relevance and definitions 74–76 social media 13
scholars 76 persuasion routes 108
Luby, S 172 Petty, R E 109
pinkwashing 168
machine learning 135, 186 points of convergence (PoC) 95–96
Ma, J 12 points of divergence (PoD) 95–96
Manoeuvring Characteristics Augmentation pop culture 70–72
System (MCAS) 205 positioning 89–90, 90
Mansvelt, J-M 118 positioning map. see perceptual map
320 Index
potential product 5 Smith, A 12, 18

Potential Rating Index by ZIP Market social cause-brand alliance 166–69, 168–69,
(PRIZM) 100 171–72
predictive analytics-based approaches 31 social groups 113
preventable crises 205 social-identity 94, 113
price elasticities 41 social media 12, 133–37
procedural justice 214 person brands 13
product brands 8–9, 9 social psychology 111, 115
product development 183 social responsibility 183
product differentiation 89 socio-demographics 98
product engagement matrix 4, 4 sociology 43
product-harm crises 207–9 socio-psychographics 98
product quality 29–30 sonic branding 65, 65–66
prospect theory 46, 199 sounds 64–66
proto-branding 24 Spence, M 111
psychographic segmentation 98–99 spillover effects 151–52, 162
psychological techniques 29, 43 standardization movement 28
standardization vs. customization approaches
quality assurance 7 29–30
Starbucks 112
Rabie, T 172 statements 127–28, 128
Randolph, M 11 STEAM framework 168, 168–69
recognizability 54 STP. see segmentation, targeting, and positioning
relationship marketing theory 123–25 (STP)
religious belief system 15 sustainability 183
religious organizations 15
reputation management 183, 187, 199–202 terroir 78
response management 216–17 time travel, Nestlé 34
retail reversal, digital-only brands 63–64 total quality management (TQM) 29
Ronaldo, C 13 transgression 209–11
Trump, D 12
SCCT. see situational crisis communication theory trust 127–29
(SCCT) Tversky, A 46
Schiffer, C 13 Twitter 184–85
Schmitt, B 132
The Science of Advertising (Balmer) 42 UEFA Champions League 166
Securities and Exchange Commission of the USA United Airlines ‘bumpgate’ case 212
in 2018 13 United Nations Children’s Fund
segmentation bases 98–100 (UNICEF) 167
segmentation systems 99–100 upward extension 144
segmentation, targeting, and positioning (STP) 98 usage fit 145, 146
self-brand connection 126 US Department of Agriculture (USDA) 106
self-concept 112
self-identity 43, 94 value-based transgressions 210
self-rewards 94 vertical brand extension 144
service brands 9–11 victim crises 204
service brand transformation 11 virtual reality (VR) 133
service failure 211–14 visual cues 65
service recovery 211–14, 213
sharing economy 18–19, 63 web 2.0 133
Sheth, J 76 Welch, J 12
signalling misadventures, Starbucks 112 Worldwide Harmonized Light Vehicle Test
signalling theory 45–46, 110, 165 Procedure (WLTP) 111
Singh, J 40
situational crisis communication theory yoghurt brands 57
(SCCT) 203
slogans 59–61 Zuckerberg, M 12
321
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‘A comprehensive textbook that demystifies branding, offers actionable frameworks, and

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© Jaywant Singh, Paurav Shukla 2024

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List of figures and tables xi

PA R T O N E Introduction – the foundations

01 Brand – the concept and meanings 3

02 The evolution of branding 22

03 Research streams in branding 37

PA R T T WO Building brands – principles and applications

05 Brand loyalty and brand equity 74

Chapter summary 100

07 Brand communication 105

08 Consumer-brand relationships 123

09 Brand extension 141

Types of brand extensions – category and line extensions 143

10 Brand alliance or co-branding 158

11 Brand portfolio management 177

PA R T T H R E E Managing contemporary brands

12 Managing negative events for brands 199

13 Luxury branding 223

14 Sensory branding and neuromarketing 244

15 Branding on social media and digital brand analytics 271

16 Global and cross-cultural branding 295

LIST OF FIGURES AND TABLES

Upon reading this chapter, you should be able to

Case studies and real-world examples

CASE STUDY – Time travel through the

Scholarly debate boxes

‘Branding in practice’ boxes

Branding in practice – Why logos are going

1 What are the main patterns of buyer behaviour?

Key terms/quotes boxes

Key learning points/concepts

These resources can be accessed through the Kogan Page website:

THIS PAGE IS INTENTIONALLY LEFT BLANK

Key learning outcomes

●● Understand the difference between a product and a brand

How does a product become a brand?

Figure 1.1 Product engagement matrix

SOURCE Adapted from Levitt (1980)

Brand definitions and meanings

Figure 1.2 Multi-dimensional view of a brand from academic-practitioner perspective

Relationship Brand Shorthand

SOURCE Adapted from de Chernatony and Dall’Olmo Riley (1998)

What can be branded?

Table 1.1 Examples of large B2B product brands

Sector Examples of large B2B product brands

Compared to product brands, services are somewhat difficult to brand due to

●● travel and hospitality (e.g. Expedia, Tripadvisor, etc.)

Person brands and social media

Branding of ideologies and religion

The importance of brands for companies

However, there is an ever-increasing emphasis on brand value in corporate commu-

Table 1.2 Best global brands 2023

PA R T O N E Introduction – the foundations

r ecommendations depending on the aforementioned variables as consumers search