What is Brand?
The traditional orientation of branding suggests that brand name is a part of the brand consisting of words or letters that form a means to identify and distinguish a firm’s offer. A brand market is the symbol or pictorial diagram that helps in the identification of the product.
There are generic brand names also like branded names that have become a generically descriptive term for a class of products like Nylon, Aspirin, Kerosene and Zipper. A trademark is a brand mark to which the owner legally claims exclusive access. Trademark protection confers the exclusive right to use brand name with any trademark, logo, slogan or product name aberrations.
Table of Contents
- 1 What is Brand?
- 2 Types of Brands
- 3 Branding Decisions
- 4 Brand Building Process
A brand provides distinct benefits to consumers. It promises and delivers a high level of assurance to consumers. It is a mental guarantee that the product will deliver the desired value promise. It is a mental patent as it promises certain amount of value to the customers. A brand serves as an assurance to the customer about product performance.
A brand helps customers to identify the product on the shelf and helps in making an informed choice. A brands as symbols of status and social significance give psychological satisfaction to the consumers. A brand also serves as a medium of social stratification, as it reflects a person’s choice and social class due to specific usage and value orientation. It essentially helps in brand choice.
Types of Brands
There are various kinds of brands available in the market. It is necessary to understand each of these categories of brands to understand their relevance in the Indian market.
Above the brands, there are generic products characterised by plain labels, with no advertising and no brand name. They are commodities available in the market and often are marketed as generic, bulk drugs, food items and other commodities.
Manufacturer’s brand is a brand owned by a manufacturer or producer. Many times, the marketing companies procure the generics and give their own brand name to the product. The intermediaries like wholesalers and retailers often sell the manufacturer’s brand.
Private brands or private labels are brand names placed on products marketed by wholesalers and retailers. Persons selling the product are not the producer of the product. Manufacturers produce for many retailers who put their own labels on these products.
Example: Multi-category retailer Flipkart has launched a private label apparel and accessories range, Flippd.
label apparel and accessories range, Flippd. Future Retail’s supermarket chain Food Bazaar created Kasundia, a very common mustard preparation used as a condiment, mostly for the East Indian market, it has Tasty Treat Khakra and Thepla for Gujarat, Basundi for Maharashtra, and several other traditional Indian savories and sweets.
Captive brands are national brands that are sold exclusively by a retail chain like Pantaloons in India. The form of a private brand often involves a given brand is sold exclusively in a given retail store.
Example: Kmart’s captive brands include women’s clothing with the Jaclyn Smith Label (from TV’s Charlie’s Angels)
Family Brand is a brand name that identifies several related products.
Example: Godrej brand. All new products in the same category carry the same brand name with different model names and types.
Individual brand names are unique brand names that identify a specific offering within a firm’s product line and that are not grouped under a family brand name.
Example: Unilever has several brand names for each product like Lux, Dove, Surf, Fair and Lovely, Close up, Sunsilk and Axe, etc.
A brand extension is the application of a popular brand name to a new product in an unrelated product category. A brand manager is a marketing professional who is charged with planning and implementing marketing strategies.
Many large companies assign the task of managing a brand’s marketing strategy to a brand manager. This professional plans and implements the promotional, pricing, distribution, and product arrangements that lead to strong brand equity.
Many brand managers follow a strategy of brand licensing, which allows them to use the brand name of another company with a payment. The role of a brand manager, in this case, is very limited as he only produces the generic and uses another company’s brand name.
A brand manager needs to take various kinds of decisions while managing a brand. We will discuss some of these decisions in the context of managing and building a brand. A brand manager has to take the following decisions for brand selection and positioning in business.
The decisions can be grouped as brand strategy decisions, brand sponsorship decisions, brand name decisions, brand portfolio decisions,s and brand repositioning decisions. Let us explain each one of them.
Branding Strategy Decision
Strategy is a goal-directed action for the firm and branding strategy for a firm is the decision of the firm to identify and manage the number and nature of common and unique elements or value propositions applied to a set of products sold by the firm.
So, a brand strategy decision involves a set of decisions to add or maintain a number of brand elements to its product portfolio. Whether to brand a product or not is a decision that can be taken only after considering the nature of the product, the type of outlets envisaged for the product, the perceived advantages of branding, and the estimated costs of developing the brand.
Historically, it is observed that brand development is closely related to the increase in disposable income, the level of sophistication of the distribution system, and the increase in the estimated size of the national market. We are experiencing a situation similar to the above in the current Indian market.
The concept of branding is applicable to commodities like rice, flour, and oil in India. Firms like ITC and HLL have achieved success in such commodity markets. One of the important factors for successful branding strategies in food and commodity categories is the willingness of consumers to pay more for better quality products through the value promise of brands.
When customers buy a branded product, they get the same quality in whichever retail shop they go to. Many other commodities, such as spices are also now being branded. There is no doubt that this trend is going to stay for a long in the Indian market and we are going to see more and more brand-building initiatives in the market.
As a part of the branding strategy decision, the brand manager can decide either to create new brand elements for the new products, apply some of the existing brand elements to the new product or it can use a combination of existing and new brand elements to the existing and new products.
When a firm uses an established brand to introduce a new product, it is called brand extension. When a brand manager combines elements of an existing brand with a new brand, it is called a sub-brand. If an existing brand name is used for a new product category, then the existing brand is called the parent brand or master brand.
If the parent brand is associated with multiple products through brand extensions, it is called family branding. There are two kinds of brand extension, namely vertical extension and horizontal extension.
When the same brand name is taken to products very similar to the current offer, higher or lower in the same product line, it is called vertical extension or line extension. Line extensions can be step-up or step-down extensions also.
A step-up line extension occurs when the brand manager moves up in the price-quality dimension with the same brand name. A step-down model occurs when a current brand name is used to launch a low-value product. The horizontal extension is a process of taking an existing brand name to a newer product category.
This is also known as category extension. In this case, the parent brand name is used to enter into a newer product category. A brand line means a set of products sold under the same brand name. A brand line can have similar as well as dissimilar products in its line. A brand mix is the set of all the brand lines that a multi-product firm offers to the market.
Companies can also launch branded variants in which they have a range of specific brands for specific distribution channels or specific product-market situations. The brand variants are available in the market due to the excessive pressure on retailers to deliver specific brands in the marketplace.
We have seen LG in the market having specific brands for specific distribution channels. The distributed retailer brands are different than the set of brands available on LGeasybuy.com sites.
Brand Name Decision
Giving a brand name is one of the crucial decisions in brand management. This is a crucial decision resting on two dimensions, viz. the name should be one, which satisfies several marketing criteria and secondly, the name should not be one, which is already being used by another firm. This necessitates extensive consumer research and mapping of consumer interest.
A brand is defined as a composite set of beliefs and associations in the mind of consumers. So a brand name is believed to indicate the product’s benefits, be memorable and help in reinforcing the belief and associations in the consumer’s psyche.
The name has to be unique so as to rise above the clutter. However, when unique names become run-of-the-mill, suddenly a simple name becomes a hit and people remember this name. Decisions on branding a product should be done in such a way that it helps in ‘decluttering’ the brand.
A simple brand name will be effective only if the overall brand personality supports the ‘I am a different brand, promise. Brand names have to be relevant to both categories and audiences.
There is no hard and fast rule to the selection of a brand name. However, through extensive research and past experiences, brand marketers have developed the following principles, which should be followed while selecting the brand name.
- A brand name should be acceptable in social settings. For an instance, Swedish furniture maker Ikea named the children’s workbench “Fartfull”, which became an issue in some countries and the product didn’t sell well.
- A brand name should be easy to recognize. In the washing powder category Surf is synonymous with any other brand name and is easily recognizable. Likewise, the big ‘M’ of McDonald’s is an easily recognizable brand name.
- A brand name should reflect directly or indirectly some aspect of the product viz. benefit, function, etc. Like we have Fair and lovely, skin fairness cream. The brand suggests the function which the product aims to fulfill.
- A brand name should be distinctive, especially if there is a higher clutter in the category. For an instance, Apple is a brand name that is distinct from the other mobile brands in this category as it resembles fruit but is, in reality, a mobile brand.
- A brand name should be easy to pronounce and remember. We can take for example Maggi, the name is easy to pronounce and can be remembered for a long.
- A brand name should be one that can be legally protected. For say if a company uses the name of a state or country etc. then it doesn’t possess the sole right to use that name. Others also own the right to use that name.
Another example is “Xerox” which is the brand name of a photocopier and is also a term used for photocopies.
A brand name is also expected to generate favorable associations. In order to make it suggestive and descriptive, it needs marketing investment through a brand communication strategy.
A brand name can be classified as follows:
- Descriptive brand Name, for example, Handyplast
- Suggestive Brand Names, for example, Kamasutra and Denim
- Free Standing Brand Name, for example, Kodak, does not communicate any information immediately to the consumer.
Brand Sponsorship Decision
The brand sponsorship decision involves whether it should be a manufacturer’s brand (also known as a national brand) or a private brand (also known as a private label) or partly a manufacturer’s brand and partly a private brand. In most developed countries, where large chain/departmental stores dominate the retail distribution system, retailers buy the products from manufacturers and sell them under their own brand.
This is, a growing phenomenon in the Indian context as we see the emergence of a large number of super bazaars and chain stores coming up with different product categories. Mother Dairy, Amul, Food Bazaar from Pantaloon, BPL Garage, Kids Kemp, and Cross Roads are some of the upcoming supermarkets and chain stores marketing exclusive product categories.
Thus the brand sponsorship decision involves the decision of using the brand manufacturer’s name or the retailer’s name. The decision largely depends on who has more power in the value network.
Brand Quality Decision
Since the brand delivers values higher than the commodity, perceived quality is a critical decision. The brand manager should take a decision on what kind of attributes and what quality level he should offer in his product to satisfy his consumers.
Developing a matrix of such desirable attributes helps in both product and brand positioning. A marketer has the option to position his brand at any segment of the market: top, bottom, or intermediate.
Example: Café Coffee Day (CCD) is positioned for youth to enjoy the experience of the cafeteria and share moments over a cup of coffee with its tag line “A lot can happen over coffee”. Whereas Green Lounge, another brand of CCD is targeted toward more sophisticated business-class clients who seek professional environments to discuss business deals over coffee.
Single Branding Vs. Umbrella Branding
The brand manager needs to decide whether he is going to adopt umbrella branding or a single branding approach. Under umbrella branding or family branding, all the products are branded with the same name. Godrej, Videocon, and L&T follow this kind of strategy.
One basic advantage of using umbrella branding is that it reduces the cost of product launching, marketing, and promotional expenditure. The firm has to promote only one brand, which, if successful, would be able to sell the entire product line. Lining up the distribution channel members also becomes comparatively easier.
A family brand name has been found to be a cost-effective way of marketing a basket of products from the same firm. If one product does exceptionally well, other products marketed under the same brand enjoy the success of this brand.
However, brand managers should be cautious while following the family branding strategy. It is an ill-advised strategy when the products being offered are of highly uneven quality. It may not also be a good strategy if the markets are quite dissimilar in terms of consumer profile.
A greater weakness of this strategy is that it does not recognize the fact that each product should have a specific identity of its own by a suitable brand, which can have long-term contributions to the brand’s life and value proposition.
The research also reveals that the master brand’s equity does not always get translated in a similar way to other brands. A company sometimes gets identified with one brand and when this brand’s name is given to other product categories, it may times lead to consumer confusion and it becomes difficult on the customer’s part to believe that the same brand is available in other product categories.
Single brand or individual brand suggests giving each product a separate brand name of its own. For example, Hindustan Lever sells its products under different brand names like Rin, Surf, Annapurna, etc. The weakness of family branding is the principal strength of a single branding strategy.
Recent consumer researchers have established that a name can have varied associations and can conjure diverse images. These psychological factors can immensely influence the buying decision. The second advantage of this strategy is that if there is a product failure in one product category, its damaging effect will be limited to that particular product only.
The negative aspect of one brand will not affect other brands in the company’s product line. The basic disadvantage of individual branding lies in the economies of developing individual brands for each product of a company.
It is obviously a costlier strategy than the earlier one. The corporate brand does not contribute anything to the success of the individual brand as only single brands are highlighted in brand communication.
To solve such problems, some firms follow a modified branding strategy, which involves using individual brands and also giving prominence to the corporate brand name or logo in all promotional campaigns, including product packaging.
For example, Godrej follows a single and umbrella branding strategy in the soap business by showing both corporate and single brand names e.g. Godrej Evita or Godrej Navtal Locks.
Brand Portfolio Decision
A multi-product firm has to manage its brand portfolio in such a way that each of the brands in the portfolio has distinct and unique features, differentiated value promises, and distinct images in the consumer’s mind. But not all brands are in the same product-market situation.
Since product-market situations are different from one another, efforts, marketing expenditures, and stages in the brand life cycle will vary. The portfolio decision about a brand is guided by the category development index and brand development index. The category development index explains the penetration of the product category whereas the brand development index explains the level of brand building in each category.
Companies can place their brands in the matrix of category development index and brand development index to develop a balanced brand portfolio. A firm may decide on several brands of the same product line, to some extent competing with each other.
The major reason for such a decision is that consumer products offer various benefits and appeals; even a marginal difference between brands can help in winning large consumer franchisees. Similarly, the brand manager can decide about the combination of brands that the company should offer to the customers.
Though Hindustan Lever Limited has a big portfolio, it is concentrating on a few brands in its portfolio as power brands, which will give rich dividends to the company in the future. The other brands are called flanker brands and when the situation arises, the company can make any of the flanker brands as a power brand to exploit the emerging market situation.
Brand Repositioning Decision
As the market situation changes and brands complete different stages of their life cycle, they become less attractive and redundant. It is necessary to save the brand and make it more relevant for consumers through repositioning decisions. Customers correspondingly move in the value life cycle with the aging of brands.
Unless brands are rejuvenated, they will not be able to sustain their market share and brand image. Several marketing parameters may undergo change over the product life cycle, such as the entry of a competing product and/ or brand in the same category, shifts in consumer preferences, and the emergence of new needs.
Each of such changes calls for an evaluation of the original position of the brand and its contribution to the brand’s uniqueness and distinctiveness. Stagnating or declining sales point to the emerging need for reassessing the original brand positioning.
For example, Lifebuoy has been repositioned several items in its lifetime, from being a low-priced carbolic soap to a health and hygiene-oriented soap to the current positioning of being a ‘do good soap.
Brand Building Process
The brand-building process refers to enhancing a brand’s equity directly through advertising campaigns and indirectly through promotions.
Several factors are crucial in building successful brands, as illustrated in Figure.
Quality is a vital ingredient of a good brand. Remember the “core benefits” – the things consumers expect. These must be delivered well, and consistently. The branded washing machine that leaks, or the training shoe that often falls apart when wet will never develop brand equity.
Positioning is about the position a brand occupies in a market in the minds of consumers. Strong brands have a clear, often unique position in the target market. Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, packaging, and the way in which it is delivered.
Repositioning occurs when a brand tries to change its market position to reflect a change in consumer’s tastes. This is often required when a brand has become tired, perhaps because its original market has matured or has gone into decline.
Communications also play a key role in building a successful brand. We suggested that brand positioning is essentially about customer perceptions – with the objective to build a clearly defined position in the minds of the target audience.
Business strategists often talk about first-mover advantage. In terms of brand development, by “first-mover” they mean that it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the market. There is plenty of evidence to support this.
This leads to another important factor in brand-building: the need to invest in the brand over the long term. Building customer awareness, communicating the brand’s message, and creating customer loyalty takes time. This means that management must “invest” in a brand, perhaps at the expense of short-term profitability.
Finally, management should ensure that the brand is marketed “internally” as well as externally. By this, we mean that the whole business should understand the brand values and positioning. This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives.
Brand building as a process integrates the components shown in Figure 10.4. A well-planned brand-building process follows many sequential steps, which are contextual, and thus cannot be generalized for all brands.
A generic view of brand building process shall consist of the following bare minimum essential steps:
Step 1: Deciding What to Brand
The first step is to answer the question as to what is being branded. Companies and practicing managers usually do confuse because of the ambiguity in branding the company, product, or service. This increases brand equity and creates a virtuous circle of recognition.
The alternative is to build a business full of brands: this can be very expensive, time-consuming, and confusing for your customers. However, sometimes it is simply the best solution. It is advisable to create a stand-alone profit center for each brand under such circumstances.
Step 2: Knowing the Customer
Research is key to building a successful brand. Once the true customers of the product or service offering have been identified, it is easy for the company to target them cost-effectively with little or no waste. Understanding their needs, wants and desires provides a platform to build on the process of brand building.
Once it has been understood who are the customers, the next step is to structure the effort in terms of the visions, mission, and value proposition being offered through the product or service offering.
Step 4: Finding the Market Position
The process of finding a place to build your brand in your market and in minds of customers is called Positioning. Positioning is the precise job of differentiating your offering, then slotting it into a free spot in the market to fulfill an unfilled need.
Having completed your market research, you should know who your customers are, but more importantly, you should know who is most likely to want what you’re selling.
You should know their needs and desires, where they are, how to target them, what kind of messages will motivate them to buy from you, and what kind of customer experience will make them loyal to your brand. The next step is to frame an effective marketing communication strategy.
Designing a marketing and communications strategy requires the big-picture insight that guides the marketing activity and makes sure all activities add up to success. A good core strategy gives a special kind of high-level direction.
Step 5: Create the Right Impression
The average consumer faces numerous promotional messages every day. They only tune into messages that appeal to their wants and needs. They ignore messages for offerings they already buy from a trusted supplier. Unless, the offering presented is unique, attractive, different, and better. To grab their attention – and win their custom – you need to be all of these things.
This has been associated with a fundamental psychological error of stereotyping. When brands of competing products appear to be similar, it creates clutter in the mind of the consumer. The brand requires a face and voice that is unique, simple, and a strong representation of the business.
It should reflect your brand character and embody the promise made to customers. It must be consistent in image and tone across all marketing communications. It must be targeted in the message and powerful enough to grab the customer’s attention – and win their custom.