Keller SBM3 01 1

1.
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1.2
1.3
What is a brand?
 Many practicing managers refer to a brand as more than that — as

something that has actually created a certain amount of
awareness, reputation, prominence, and so on in the marketplace.
 We can make a distinction between the AMA definition of a
“brand” with a small b and the industry’s concept of a “Brand”
with a capital b.
 For the American Marketing Association (AMA), a brand is a
“name, term, sign, symbol, or design, or a combination of them,
intended to identify the goods and services of one seller or group
of sellers and to differentiate them from those of competition.”
 These different components of a brand that identify and
differentiate it are brand elements.
1.4
Brands vs. Products
 A product is anything we can offer to a market for

attention, acquisition, use, or consumption that might
satisfy a need or want.
 A product may be a physical good, a service, a retail
outlet, a person, an organization, a place, or even an
idea.
1.5
Five Levels of Meaning for a
Product
 The core benefit level is the fundamental need or want that
consumers satisfy by consuming the product or service.
 The generic product level is a basic version of the product containing
only those attributes or characteristics absolutely necessary for its
functioning but with no distinguishing features. This is basically a
stripped-down, no-frills version of the product that adequately
performs the product function.
 The expected product level is a set of attributes or characteristics that
buyers normally expect and agree to when they purchase a product.
 The augmented product level includes additional product attributes,
benefits, or related services that distinguish the product from
competitors.
 The potential product level includes all the augmentations and
transformations that a product might ultimately undergo in the
future.
1.6
Importance of Brands to Consumers
 Identification of the source of the product
 Assignment of responsibility to product maker
 Risk reducer
 Search cost reducer
 Promise, bond, or pact with product maker
 Symbolic device
 Signal of quality
1.7
Reducing the Risks in Product Decisions
 Consumers may perceive many different types of risks in
buying and consuming a product:
 Functional risk—The product does not perform up to
expectations.
 Physical risk—The product poses a threat to the physical well-
being or health of the user or others.
 Financial risk—The product is not worth the price paid.
 Social risk—The product results in embarrassment from others.
 Psychological risk—The product affects the mental well-being
of the user.
 Time risk—The failure of the product results in an opportunity
cost of finding another satisfactory product.
1.8
Importance of Brands to Firms
 Identification to simplify handling or tracing
 Legally protecting unique features
 Signal of quality level
 Endowing products with unique associations
 Source of competitive advantage
 Source of financial returns
1.9
Can everything be branded?
 Ultimately a brand is something that resides in
the minds of consumers.
 The key to branding is that consumers perceive
differences among brands in a product category.
 Even commodities can be branded:
 Coffee (Maxwell House), bath soap (Ivory), flour
(Gold Medal), beer (Budweiser), salt (Morton),
oatmeal (Quaker), pickles (Vlasic), bananas
(Chiquita), chickens (Perdue), pineapples (Dole),
and even water (Perrier)
1.10
An Example of Branding a Commodity
 De Beers Group added the phrase “A Diamond

Is Forever”
1.11
What is branded?
 Physical goods
 Services
 Retailers and distributors
 Online products and services
 People and organizations
 Sports, arts, and entertainment
 Geographic locations
 Ideas and causes
1.12
Source of Brands Strength
 “The real causes of enduring market leadership
are vision and will. Enduring market leaders have
a revolutionary and inspiring vision of the mass
market, and they exhibit an indomitable will to
realize that vision. They persist under adversity,
innovate relentlessly, commit financial resources,
and leverage assets to realize their vision.”
Gerald J. Tellis and Peter N. Golder, “First to Market, First to
Fail? Real Causes of Enduring Market Leadership,” MIT Sloan
Management Review, 1 January 1996
1.13
Importance of Brand Management
 The bottom line is that any brand—no matter
how strong at one point in time—is vulnerable,
and susceptible to poor brand management.
1.14
What are the strongest brands?
Top Ten Global Brands
Brand 2006 ($Billion) 2005 ($ Billion)
1. Coca-Cola 67.00 67.53
2. Microsoft 56.93 59.94
3. IBM 56.20 53.38
4. GE 48.91 47.00
5. Intel 32.32 35.59
6. Nokia 30.13 26.45
7. Toyota 27.94 24.84
8. Disney 27.85 26.44
9. McDonald’s 27.50 26.01
10. Mercedes-Benz 21.80 20.00
1.16
Branding Challenges and Opportunities
 Savvy customers
 Brand proliferation
 Media fragmentation
 Increased competition
 Increased costs
 Greater accountability
1.17
The Brand Equity Concept
 No common viewpoint on how it should be
conceptualized and measured
 It stresses the importance of brand role in
marketing strategies.
 Brand equity is defined in terms of the marketing
effects uniquely attributable to the brand.
 Brand equity relates to the fact that different outcomes result
in the marketing of a product or service because of its brand
name, as compared to if the same product or service did not
have that name.
1.18
Strategic Brand Management
 It involves the design and implementation of marketing programs
and activities to build, measure, and manage brand equity.
 The Strategic Brand Management Process is defined as involving
four main steps:
1. Identifying and establishing brand positioning and values
2. Planning and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity
1.19
Strategic Brand Management Process
Steps Key Concepts

Mental maps
Identify and establish Competitive frame of reference
brand positioning and values Points-of-parity and points-of-difference
Core brand values
Brand mantra
Plan and implement Mixing and matching of brand elements

brand marketing programs Integrating brand marketing activities
Leveraging of secondary associations
Brand value chain

Measure and interpret Brand audits
brand performance Brand tracking
Brand equity management system
Brand-product matrix
Grow and sustain Brand portfolios and hierarchies
brand equity Brand expansion strategies
Brand reinforcement and revitalization 1.20

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1.

 Many practicing managers refer to a brand as more than that — as

 A product is anything we can offer to a market for

 De Beers Group added the phrase “A Diamond

Steps Key Concepts

Plan and implement Mixing and matching of brand elements

Brand value chain

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