When you recall products often you are recalling the brand of a product. You are either recalling the popular firm, the popular product line, or the popular item. For instance when you are shopping for a toy for a young girl you may initially think Mattel (the firm), Barbie (the product line), or Princess Barbie (a specific, popular item). Logos, symbols, slogans, jingles in commercials, and packaging can all make up the branding image that a firm displays to its consumers.
Brands do several things
They help in purchasing decisions — if a customer is buying a convenience item like flour the branding of different companies’ flour products will be what influences a consumer to choose a specific type. Brands also establish loyalty. Brand loyalty can come from many places including cultural influences, familial influences, and personal choice. Once a company achieves brand loyalty in a customer they can be sure of having that customer forever. This leads into the fact that brands can protect against competition.
Because of brand loyalty a company has a customer base that is a “sure thing” and don’t need to worry as much about being shut out by a competitor. Brands also reduce marketing costs – once people know and recognize the logo long advertisements aren’t needed to explain what a firm is and what it does. People will simply know. Finally brands are assets and as such they impact the market value. Brands should be protected by trademarks and copyrights to prevent the brand from being associated elsewhere.
A brand’s equity is the set of liabilities and assets associated with the brand. If the assets are more than the liabilities this indicates that the brand adds a certain amount of value to each product under the brand. There are four aspects that determine a brand’s equity: brand awareness, perceived value, brand associations, and brand loyalty.
- Brand Awareness: This is the measurement of how familiar a brand is and how much opinion a customer has of it. This is important because when consumers buy convenience products a firm will want them to automatically think of their brand and buy it without considering other options. If a customer is making a risky decision for an item with the worth of a lap top or a car brand awareness may influence their decision as well, even if they have never bought that type of product previously.
- Perceived Value: This is the amount of value to quality of a product especially in relation to a products competitors. Consumers are looking for cheap, high quality items. So if a brand is considered to be the same quality but is slightly cheaper than it’s competitor then it becomes more valuable to a consumer.
- Brand Associations: This is the temporal link between a brand and it’s attributes like a logo or a celebrity endorsement. To go back to Barbie, the brand is clearly bedecked in pink and made for young girls. But in the early 2000’s Mattel created a Barbie line which gave Barbie a makeover which included more colors like torquoise, green, and purple in her branding to appeal to more than just the “girly girl”. Sometimes a brand needs more personality to it, and this is where brand associations come in.
- Brand Loyalty: As mentioned above brand loyalty is very important in retaining customers and it insulates a firm against competition.
Brand strategies include policies, cooperations between companies, licensing and many other decisions to help make a brand the best that it can be and give it an edge over competition.
- Ownership: This describes where the ownership of the brand actually lies on the supply chain. Ownership can be divided into manufacturer brands and private brands. A manufacturer creates a brand by creating the product, producing it, and starting a marketing campaign to sell it. The majority of brands in the United States are manufacturer brands. A private label brand is created by retailers to compete with manufacturer brands. Retailers will create the brand and then contact manufacturers to make it. Most private label brands are “store brand” items such as Walmart’s Great Value selection. Private label brands include premium brands, generics, copycats, and exclusives.
- Naming: Naming includes corporate and family brands, corporate and product line brands, and individual brands. Corporate family branding means that a firm labels all of it’s products with the firms name. Retail stores like The Gap only sells clothing with the Gap Label on the inside. A corporate product line brand means that there is a combination of corporate brands and product line brands. Charlotte Russe a retail clothing store previously had it’s own corporate branded items but also sold product line brands like Refuge Jeans and Anne Michelle shoes. Now, in a rebranding effort, they have switched to a solely corporate family branding method. Finally individual brands are specific brands for particular products within a firm. Proctor and Gamble is a firm that owns popular brands like Tide, Bounty, and Pampers all of which are individual brands owned by a firm.
- Extension: This refers to using the same brand for several products. For instance, Doritos has extension in that they have several flavors including Nacho Cheese and Cool Ranch. Using a brand name for a new product gives it a boost over other new products in the market as people with brand loyalty are more likely to try it out.
- Cobranding: This is done when two brands are marketed together. Credit card companies are an excellent example of this. Many companies including Target, Delta, Kohl’s, Barnes and Noble, and others have a company credit card. This company credit card gives you points withe the store brand and it also costs a store less because when customers use the company credit card the company doesn’t have to pay a processing fee to transfer funds around. All of companies work in a cobranding effort with top credit companies including Visa, Mastercard, and American Express as each of the company cards includes a major credit card logo.
- Brand Licensing: This is a contractual agreement where firms allow another firm to use its brand in some manner. A firm will receive royalty payments on anything that the brand generates for the other company.
- Brand Repositioning: As mentioned above with Charlotte Russe, any time a brand undergoes “rebranding” it is is repositioning its products. It is realigning it’s focus to give maximum profits to its consumers.