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Q.1What do you mean by the term Brand?

Brand Definition

A brand is a product from a known source (organization). The name of the organization can also

serve as a brand. The brand value reflects how a product's name, or company name, is perceivedby the marketplace, whether that is a target audience for a product or the marketplace in general(clearly these can have different meanings and therefore different values). It is important tounderstand the meaning and the value of the brand (for each target audience) in order to developan effective marketing mix, for each target audience. The value of the brand for a web-basedcompany may have heightened importance due to the intangible nature of the web.

OR

brand

Definition

An identifying symbol, words, or mark that distinguishes a product or company from

its competitors. Usually brands are registered (trademarked) with a regulatory

authority and so cannot be used freely by other parties. For many products and

companies, branding is an essential part ofmarketing.

OR

brand

A brand is a product, service, or concept that is publicly distinguished from other products,services, or concepts so that it can be easily communicated and usually marketed. A brand nameis the name of the distinctive product, service, or concept. Branding is the process of creating anddisseminating the brand name. Branding can be applied to the entire corporate identity as well asto individual product and service names.

Q.2What are the branding challenges and opportunities.

Branding challenges and opportunities

By brandvision2009
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Brands build their strength by providing customers consistently superior product and serviceexperiences. A strong brand is a promise or bond with customers. In return for their loyalty,customers expect the firm to satisfy their needs better than any other competitors.

Brands will always be important given their fundamental purpose to identify and differentiate

products and services. Good brand makes peoples lives a little easier and better. People are loyalto brands that satisfy their expectations and deliver on its brand promise. The predictably goodperformance of a strong brand is something that consumer will always value.

The challenges to brands

1) The shift from strategy to tactics: - With the increasing pressure to generate ever-improvingprofitability, it is often considered a luxury for managers to develop long-term strategic plans.This is further exacerbated by short-term goal setting, which is frequently designed primarily forthe convenience of the financial community.

2) The shift from advertising to promotions: - As a consequence of the increasing pressure onbrand manager to achieve short-term goals, there is a temptation to cut back on advertisingsupport, since it is viewed as a long-term brand-building investment, in favour of promotionswhich generate much quicker short-term results.

3) On-Line shopping: - The Internet is facilitating on-line shopping. On-line shopping isdifferent from traditional mail order because:

Brands are available all the time and from all over the world;

Information and interactions are in real time;

Consumers can choose between brands which meet their criteria, as a result of selectinginformation which is in a much more convenient format for them, rather than the standardcatalogue format.

This poses threats to brands, some components of added value, agent or the retail outlet whichoriginally added value by matching consumers with suppliers, may be eliminated.

4) Opportunities from technology: - Brand marketers are now able to take advantage oftechnology to again a competitive advantage through time. Technology is already reducing thelead time needed to respond rapidly to changing customers need and minimizing any delays in

the supply chain.

5) More sophisticated buyers: - In business-to-business marketing, there is already an emphasison bringing together individuals from different departments to evaluate suppliers new brands.As inter departmental barriers break down even more, sellers are going to face increasinglysophisticated buyers who are served by better information system enabling them to pay off brandsuppliers against each other.


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6) The growth of corporate branding:- With media inhabiting individual brand advertising,many firms are putting more emphasis on corporate branding, unifying their portfolio of brandsthrough clearer linkages with the corporation, which clarifies the those all the line brands adhereto. Through corporate identity program functional aspects of individual brands in the firmsportfolio can be augmented, enabling the consumer to select brands through assessment of the

values of competing firms. Firms developed powerful corporate identity programmes byrecognizing the need first to identify their internal corporate values, from which flow employeeattitudes and specific types of staff behavior secondly, to devise integrated communicationprogrammes for different external audiences.

Q.3Explain the termbrand knowledge

Brand Knowledge

is a function of awareness, which relates to consumers ability to recognize or recall the brand, and image,

which consists of consumers perceptions and of associations for the brand.

Positive brand equity results in:

1. Greater perceived differentiation

2. Stronger brand loyalty

3. Larger profit margins

4. Higher trade support

5. Increased marketing communication effectiveness

6. Opportunities to extend and license brand name

And these help consumers have a better awareness and recall. So in turn one can say brand knowledge is

what you know about the brand , how quickly you can recall it, with how much little information you can do

it.

OR

Brand KnowledgeBrand knowledge refers to brand awareness (whether and when consumers know the brand)and brand image (what associations consumers have with the brand). The differentdimensions of brand knowledge can be classified in a pyramid (adapted from Keller 2001), inwhich each lower-level element provides the foundations of the higher-level element. In otherwords, brand attachment stems from rational and emotional brand evaluations, which derivefrom functional and emotional brand associations, which require brand awareness. Brandknowledge measures are sometimes called customer mind-set measures because theycapture how the brand is perceived in the customers mind.

Figure 1

The Brand Knowledge Pyramid


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ATTACHMENT

Loyalty, sense ofcommunity, engagementBRAND AWARENESS DEPTH AND BREADTH

Depth (unaided recall, aided recall, or recognition) and breadth (when?)RATIONAL

EVALUATION

Brand value,credibilityEMOTIONAL

EVALUATION

Feelings, socialapproval, self respectFUNCTIONAL IMAGE

AND BENEFITS

Physique (design), quality,reliability, service, priceEMOTIONAL IMAGE

AND BENEFITS

Who, when, how, where usedpersonality, history

4. INTENSE &ACTIVE BRANDLOYALTY4. INTENSE &ACTIVE BRANDLOYALTY3. POSITIVE &ACCESSIBLEBRANDEVALUATIONS3. POSITIVE &ACCESSIBLEBRANDEVALUATIONS

2. STRONG,FAVORABLE &UNIQUE BRANDASSOCIATIONS2. STRONG,FAVORABLE &UNIQUE BRANDASSOCIATIONS1. DEEP & BROADBRAND

Q.4Explain Brand Essence.

What is Brand Essence?Brand Essence is a way of articulating the emotional connection and lasting

impression -- usually summed up with one simple statement or phrase -- that

defines the qualities, personality and uniqueness of a brand. Said another way,

Brand Essence characterizes what a brand stands for in the minds of customers and


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stakeholders. It embodies the brand's core competencies, advantages, culture and

values.

Think of Brand Essence as the heart and soul of a product or service. A brand's essenceestablishes a positive, powerful connection with everyone with whom it touches. It represents therelationship and intrinsic value the brand provides to the customer. For those who serve thebrand, it is a beacon that motivates and inspires continued commitment.

Brand Essence should be viewed as long-term positioning. It is reflected in the quality and

evolution of a product, how it is communicated and marketed, the type of care and concern

customers receive, and the way stakeholders support the brand.

OR

Brand Essence - A Brand Building ConceptBrand essence is a compact summary of what the brand stands for.Brand identity structureincludes core identity, extended identity and a brand essence. Typically the brand identity willrequire 6 to 12 dimensions in order to adequately describe the brands aspirations.

Because such a large set is unwieldy, it is helpful to provide focus by identifying the

core identity i.e. the most important elements of the brand identity. All dimensionsof the core identity should strategy and values of the organisation and at least one

association should differentiate the brand and resonate with the customers. The

core identity is most likely to remain constant as the brand travels to new markets

and products. The core identity creates a focus both for the customer and the

organisation. The extended identity includes all of the brand identity elements that

are not in the core. Brand personality is an element of extended identity.

Core identity has 2 to 4 dimensions that compactly summarize the brand vision.

Brand essence provides further focus by giving a single thought that captures the

soul of the brand. The brand essence can be viewed as the glue that holds the core

identity elements together.

Characteristics of brand essence:

Should resonate with customers Drive the value proposition Should be own able
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Provide differentiation persisting through time. Should be compelling enough to energize and inspire employees and

partners of the organization.

BRAND ESSENCE VS. TAG LINE

Brand essence represents the identity while tag line represents the brand position.

The function of essence is to communicate and energize those inside the

organization while tag lines function is to communicate with the external audience.

Brand essence is timeless or for a long period of time while the tag line has a

limited life. Brand essence is relevant across markets and products whereas the tag

line is more likely to have a confined arena.

Why isProduct Management necessary?

Its necessary for following reasons

ey perform the following tasks:

research products, markets, and competitors

devise and execute product plans

based on market trends, they introduce new products or add features to existing products

manage the positioning of existing brands

develop product strategies and promotional planning

based on sales figures, feedback, and other survey reports, they forecast their productssuccesses

keep track of competing products and monitor marketing and production efforts

carry out pricing and profitability analyses

assume responsibility for the successes and failures of their products

dont interfere with the responsibilities of marketing and operations departments

anticipate serious product flaws and work toward achieving real solutions

strive to provide superior value for customers


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Q.6What is Brand value chain?

Brand value chain

The brand value chain is a structured approach to assessing the sources and outcomes of brandequity and the manner in which marketing activities create brand value. The brand value chain isbased on several basic premises.

The brand value creation process begins when the firm invests in a marketing program targetingactual or potential customers. Any marketing program that can be attributed to brand valuedevelopment, either intentional or not, falls into this category product research development,and design; trade or intermediary support; and marketing communications.

The marketing activity associated with the program affects the customer mind-set? withrespect to the brand. The issue is, in what ways have customers been changed as a result of themarketing program? This mind-set, across a broad group of customers, then results in certainoutcomes for the brand in terms of how it performs in the marketplace. This is the collectiveimpact of individual customer actions regarding how much and when they purchase, the pricethat they pay, and so on.

Finally, the investment community considers market performance and other factors such asreplacement cost and purchase price in acquisitions to arrive at an assessment of shareholdervalue in general and the value of a brand in particular.

The model also assumes that a number of linking factors intervene between these stages anddetermine the extent to which value created at one stage transfers to the next stage. Three sets ofmultipliers moderate the transfers between the marketing program and the subsequent three valuestages the program multiplier, the customer multiplier, and the market multiplier.

The program multiplier determines the ability of the marketing program to affect the customermind-set and is a function of the quality of the program investment. The customer multiplierdetermines the extent to which value created in the minds of customers affects marketperformance. This result depends on contextual factors external factors external to the customer.

Three such factors are competitive superiority (how effective is the quantity and quality of the

marketing investment of other competing brands), channel and other intermediary support (howmuch brand reinforced and selling effort is being put forth by various marketing partners), andcustomer size and profile (how many and what types of customers, profitable or not, are attractedto the brand).

The market multiplier determines the extent to which the value shown by the marketperformances of a brand is manifested in shareholder value. It depends, in part, on the actions offinancial analysts and investors.


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OR

The brand value chain

The majority of companies that still follow the main principles of the

industrial economy will face great difficulties in the value economy of the

future. When the company defines itself by its products, far too many

resources will be tied up in the product system.

Alarm bells should ring when investment in products, services, divisions

and departments are inflated when compared to a companys actual

market access. Fortunes are spent on developing new products without

taking a critical view on their relevance in the market.

At the same time companies will find it increasingly difficult to push their

new products through the value chain to the people who are expected to

buy them. It is becoming still more difficult to penetrate the

communication flow and the more products that are fighting for the

same resources, the less these resources will suffice.

Brand Value Chain is a model that illustrates the fact that the company must

change its focus to win the optimal value position.

In contrast to the traditionally thinking company that optimises itself

according to its products, the mantra in Brand Value Chain is the concept
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that in the future, the company must optimise itself according to its value

position.

Internally, the employees must be made to understand the value position

and its importance for the companys existence. The value position must be

made relevant and present so that the employees understand how they,

through their daily work, can contribute to the company achieving thedesired value position.

Externally, the company must send a clear signal through its collective

behaviour about which value it offers to the market. This can be effectuated

through the product programme, its customer relations and through all its

marketing and communication.

To win a strong market position the company must pull in the same direction

in everything that it does. The companys strategy and actions must be

optimised according to how the company can achieve the desired value

position.

The Brand Value Chain way of thinking works with 8 focus points:

To successfully enter the value economy, the core of corporate strategy

must be the optimization of the brand value chain. Only then can it win

the best value position in the market. The entire company must be built

and shaped according to the brand. The brand value chain mindset:

1. Defining the value position you want in the market, depicted as a circle

to the very right of the figure, is key.

2. At the far left link in the brand value chain it is important to appear as

one company. Only a single, centralized company is in a position to be

unique. It has a soul and is a living organism.

3. The company must be built into a brand because the brand mindset is

good at gathering and communicating a set of values and attitudes

externally and internally.

4. You must develop a brand culture that can hold the brand together

globally.

5. It is important to define the product programme on which you focus

when building a brand position in the market.6. You must define the most important target groups for the brand, both

those who buy the brand directly and any indirect decisionmakers, who

are often the most important carriers of value. Direct connection to these

decision makers must be made via a brand relation management system.

7. You need to build a consistent and value-accumulating brand

communication that focuses on the brand and not on a lot of different


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product launches.

8. The brand communication must deliver the brand position in the

market, which should equal the value position you wish to capture.

The Brand Value Chain way of thinking leads to a strategy in which the

company must focus on becoming brand oriented instead of product

oriented. Use the model as a checklist when preparing a status of the

companys branding strategy.

In addition to this the company can use the model to take a critical look at

the way resources are being spent.

It would be utterly incorrect to think that branding is all about spending more

money on marketing. It is about reallocating the companys resources so

that more is spent in the customer system and less in the product and

distribution system. It is about organisational changes, creating an efficient

marketing system etc.

To illustrate this you could look in your warehouse and note how many

brochures for the last products you introduced are still there. If you expand

your survey to include subsidiaries and distribution system, you are

guaranteed to become depressed.

Or you could check out the companys investments in new machinery and

product development costs. What would it mean to the strength of the

companys brand and market position if these were cut down by 10-20%?

Could this money be better spent somewhere else?

Q.7What do you mean by Product modification and Line extensions

Product Modification

Product Modification is an attempt by companies to extend the length of the Product Life Cycle by making

small, or big changed to a product to keep customers interested in the product, or cause them to buy

accessory items to keep the product popular.

In the first years of the new Millenium, we see a lot of examples of Product Modification

What are the driving forces causing companies to seek new and weird ways to change the productso they can keep selling more?

1. The intensity of competition - the Competitive Environment, - in a globalized community ofbusinesses all interlinked, it becomes easier and easier to copy other people's products, especially


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consumer electronics- so once you have launched a new product - there is a very short time before someone else will make aknock-off copy, or even make a slight improvement to capture your customers

2. The continued advances in technology, the Technological Environment. Technology makes it easierand easier to copy other products. Also, advanced in technology make it more possible to have to

features to add on to a product that is several months old

3. The Economic Environment - the need for companies to make more money selling a product (maybebecause the cycle was too short) -

4. The Social / Cultural Environment - after the product has been used by the early adopters, it mightthe possible that other customer groups have slightly different uses, and this can be accomodated if theproduct packaging or features are altered slightly to make it more appealing to other demographics

OR

Product Modificationstrategy employed when a brand has reached maturity and profits begin to decline;approaches to revitalisation may include one or all ofmarket expansion, product

modification or brand repositioning.

Product modification means changing one or more of the product's features and

may involve reformulation and repackaging to enhance its customer appeal.

Modifications can give a competitive advantage , e.g., a company may be able to

charge a higher price and enhance customer loyalty. Product modification is often

used as a way of extending the product life cycle of a product. Brassington and

Pettitt (2003) classify modifications into three distinct types: quality, design , and

performance. Quality modifications relate to the product's dependability anddurability; performance modifications relate to the effectiveness, convenience, and

safety of products (e.g., washing machines that use less heat and water); and

design modifications alter the aesthetic and sensory appeal of the product (such as

its taste, texture, sound, and appearance). Such modifications can act to

differentiate products in the marketplace, e.g., BMW cars have an immediately

recognizable style. A number of issues have to be considered before deciding

whether or not to keep the product, change it, or eliminate it ( see product

deletion ); for example, what is the customer appeal? The product may have lost its

distinctiveness because of the introduction of new products or improvements of its

main rivals.

Line extensions\;;;

A product line extension is the use of an established products brand name for a new item in thesame product category.
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Line Extensions occur when a company introduces additional items in the same product categoryunder the same brand name such as new flavors, forms, colors, added ingredients, package sizes.This is as opposed to brand extension which is a new product in a totally different productcategory.Line extension occurs when the company lengthens its product line beyond its currentrange. The company can extend its product line down-market stretch, up-market stretch, or both

ways.

line extension

Multiproduct brandingstrategy whereby a firmmarkets one or more new products

under an already established and well known brand name. The objective is to serve

different customer needs or market segments while taking advantage of the

widespread name recognition of the originalbrand. For example, maker of a popular

perfume may introduce shampoos, bath soaps, body powders, etc., under the

perfume's name. Line extension is encouraged by some marketingexperts andfrowned upon by others. Also called brand extension.

Adding of another variety of a product to an already established brand line of products. Forexample, when a coffee manufacturer adds decaffeinated coffee to the same brand line of coffeeproducts already on the market (such as regular coffee and instant coffee), a line extension hasbeen made. Line extensions do not compete with each other, since each answers different needsand thus appeals to a different market

Q.8Mention about the ways to measure brand equity

Brand equity should be measured in two ways: internal and external measurement. Internalmeasurement ensures that employees are living the brand and delivering the desired experiencefrom an organizational alignment perspective. External measurement is measuring to whatdegree customers and prospects are experiencing your brand in ways that will cause them tobecome more committed evangelists.

We recommend annual benchmarking for brand equity, including the following types ofmeasurements:- unaided and aided awareness of the company, its products and services--including unaided firstmentions;

- unaided and aided awareness of company brand concepts including values, personality,associations and messages;- customer brand loyalty;- customers' willingness to pay a price-premium over a generic product or service and size ofprice premium;- whether or not customers are likely to recommend company brand or product/service to others;- number of competitive product or service choices customers will review when replacing theircurrent product or buying a similar new product or service;
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- likelihood of customer purchasing company's product or service again

Aided questions should use a -5 to +5 numerical scale, where +5 equals an unbreakable customerrelationship. The deeper the relationship, the greater the return on your brand investment.

The most effective format for external and internal research is a combination of in-depth phoneinterviews, supported by a larger sample of Web-based surveys to provide statistical legitimacy(depending on size of total population). Another great way to conduct ongoing brand equitychecks is to create customer councils that are representative of your customer base. You canregularly solicit information and test ideas to get a good idea of how your customer base willrespond.

OR

measuring brand equity

Measuring the financial value of the brand usually converts the CFO to a staunch brandsupporter and gets the organization to view brands as assets that must be maintained, built andleveraged. In his book, Managing Brand Equity, David Aaker writes about several approachesto valuing a brand as an asset. Interbrand has a methodology to help public and privatecompanies measure their brands values. Financial World, a recently defunct publication,annually ranked top brands by their financial values (estimating the Coca-Cola brand to beworth $48 billion in 1997).

Measuring brand equity helps you to maintain, build and leverage brand equity (that is, it helps

you to understand how to increase both the A and the R in the brands ROA). I will spendthe remainder of this post expounding on (b) measuring brand equity.

To better understand how to build brand equity we must first agree to a definition of brandequity. My favorite definition is as follows: brand equity is the value (positive and negative) abrand adds to an organizations products and services. Brand equity may ultimately manifestitself in several ways. Three of the most important ways are as the price premium (to consumersor the trade) that the brand commands, the long-term loyalty the brand evokes and the marketshare gains it results in.

The Blake Projectsbrand equity model is most interested in one thing, moving consumers from

brand awareness and brand preference to brand insistence. To do this, we have identified themajor factors that lead to consumer brand insistence. We call them brand equity drivers:

Brand Awareness

First, consumers must be aware that there are different brands in the product categories in whichyour brand operates. Next, they must be aware of your brand. Ideally, your brand should be thefirst one that comes to their minds within specific product categories and associated with keyconsumer benefits. Consumers should be able to identify which products and services your brand
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offers. They should also be able to identify which benefits are associated with the brand.Finally, they should have some idea of where your brand is sold.

Accessibility

Your brand must be available where consumers shop. Its much easier for consumers to insist

upon your brand if it is widely available. Slight brand preference goes a long way towardinsistence when the brand is widely available. The importance of convenience cannot beunderestimated in todays world.*

Value

Does your brand deliver a good value for the price? Do consumers believe it is worth the price?Regardless of whether it is expensive or inexpensive, high end or low end, it must deliver at leasta good value.

Relevant Differentiation

This is the most important thing a brand can deliver. Relevant differentiation today is a leading-

edge indicator of profitability and market share tomorrow. Does your brand own consumer-relevant, consumer-compelling benefits that are unique and believable?

Emotional Connection

First, the consumer must know your brand. Then he or she must like your brand. Finally, theconsumer must trust your brand and feel an emotional connection to it. There are manyinnovative ways to achieve this emotional connection--from advertising and the quality of frontline consumer contact to consumer membership organizations and company-sponsored consumerevents.

As you measure brand equity, keep the following points in mind:

Include measures of awareness, preference, accessibility, value, relevance, differentiation,vitality, emotional connection, loyalty and insistence.Include both behavioral and attitudinal measures (especially for loyalty).Tailor the study to your product categories and industry (especially benefit structure)Include competitive comparisons

Some of the more telling measures include the following:Top-of-mind unaided awareness (first recall)Position in the consideration setEmotional connection to the brandPerceived brand vitality

Perceived points of difference (open ended question)Unique delivery against key benefits

As you develop your brand equity measurement system, keep these questions in mind:Do you have a profound understanding of your brands consumers?Do you know what drives your brands equity?Have you established and validated equity measures for your brand?Have you set objectives against these measures?


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Do key decision-makers regularly see results against these measures?Are people held accountable for achieving brand objectives?

*Brands whose market place positionings have exclusivity as a key component may be anexception to this.

Q.9What are the brand elements?

The most important elements of a brand should be:

Brand Position

Who is addressed by companys branded products or services. What the company doesand for whom

The companys unique value and how customers benefit from products and/or services

Key competitive differentiators, what makes the brand be chosen, be different from itscompetitors

Brand Promise

The ONE most important thing that the brand promises to deliver to its customers Every time!

What customers and partners should expect from every interaction, how should they feelas brands customers

Brand Personality

What the brand is to be known for Personality traits that customers, partners, and employees use to describe the company.

What comes to the (potential) customers mind when addressed about the brand

Brand Story

The companys history and how the history adds value and credibility to the brand A summary of products/services/solutions

Brand Associations

Physical artifacts: name,logo, colors, taglines, fonts, imagery Ideally, it must reflect the all the above statements about the brand and the company

Q.10What do you mean by competitive analysis?
http://www.brandxpress.net/tag/elements-of-a-brand/http://www.brandxpress.net/category/positioning/http://www.brandxpress.net/search-results/?cx=partner-pub-8677760062540097:vgumck-lpvw&cof=FORID:11&ie=UTF-8&q=brand+promise&sa=Searchhttp://www.brandxpress.net/tag/brand-personality/http://www.brandxpress.net/category/logo/http://www.brandxpress.net/category/logo/http://www.brandxpress.net/tag/elements-of-a-brand/http://www.brandxpress.net/category/positioning/http://www.brandxpress.net/search-results/?cx=partner-pub-8677760062540097:vgumck-lpvw&cof=FORID:11&ie=UTF-8&q=brand+promise&sa=Searchhttp://www.brandxpress.net/tag/brand-personality/http://www.brandxpress.net/category/logo/


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Competitor Analysis

In formulating business strategy, managers must consider the strategies of the firm's competitors.While in highly fragmented commodity industries the moves of any single competitor may be

less important, in concentrated industries competitor analysis becomes a vital part of strategicplanning.

Competitor analysis has two primary activities, 1) obtaining information about importantcompetitors, and 2) using that information to predict competitor behavior. The goal of competitoranalysis is to understand:

with which competitors to compete, competitors' strategies and planned actions, how competitors might react to a firm's actions, how to influence competitor behavior to the firm's own advantage.

Casual knowledge about competitors usually is insufficient in competitor analysis. Rather,competitors should be analyzed systematically, using organized competitor intelligence-gathering to compile a wide array of information so that well informed strategy decisions can bemade.

Competitor Analysis Framework

Michael Porter presented a framework for analyzing competitors. This framework is based on thefollowing four key aspects of a competitor:

Competitor's objectives Competitor's assumptions Competitor's strategy Competitor's capabilities

Objectives and assumptions are what drive the competitor, and strategy and capabilities are whatthe competitor is doing or is capable of doing. These components can be depicted as shown inthe following diagram:

A competitor analysis should include the more important existing competitors as well aspotential competitors such as those firms that might enter the industry, for example, by extendingtheir present strategy or by vertically integrating.

Competitor's Current Strategy

The two main sources of information about a competitor's strategy is what the competitor saysand what it does. What a competitor is saying about its strategy is revealed in:

annual shareholder reports 10K reports


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interviews with analysts statements by managers press releases

However, this stated strategy often differs from what the competitor actually is doing. What thecompetitor is doing is evident in where its cash flow is directed, such as in the following tangibleactions:

hiring activity R & D projects capital investments promotional campaigns strategic partnerships mergers and acquisitions

Competitor's Objectives

Knowledge of a competitor's objectives facilitates a better prediction of the competitor's reactionto different competitive moves. For example, a competitor that is focused on reaching short-termfinancial goals might not be willing to spend much money responding to a competitive attack.Rather, such a competitor might favor focusing on the products that hold positions that better canbe defended. On the other hand, a company that has no short term profitability objectives mightbe willing to participate in destructive price competition in which neither firm earns a profit.

Competitor objectives may be financial or other types. Some examples include growth rate,market share, and technology leadership. Goals may be associated with each hierarchical level ofstrategy - corporate, business unit, and functional level.

The competitor's organizational structure provides clues as to which functions of the companyare deemed to be the more important. For example, those functions that report directly to thechief executive officer are likely to be given priority over those that report to a senior vicepresident.

Other aspects of the competitor that serve as indicators of its objectives include risk tolerance,management incentives, backgrounds of the executives, composition of the board of directors,legal or contractual restrictions, and any additional corporate-level goals that may influence thecompeting business unit.

Whether the competitor is meeting its objectives provides an indication of how likely it is to

change its strategy.

Competitor's Assumptions

The assumptions that a competitor's managers hold about their firm and their industry help todefine the moves that they will consider. For example, if in the past the industry introduced anew type of product that failed, the industry executives may assume that there is no market forthe product. Such assumptions are not always accurate and if incorrect may present


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opportunities. For example, new entrants may have the opportunity to introduce a product similarto a previously unsuccessful one without retaliation because incumbant firms may not take theirthreat seriously. Honda was able to enter the U.S. motorcycle market with a small motorbikebecause U.S. manufacturers had assumed that there was no market for small bikes based on theirpast experience.

A competitor's assumptions may be based on a number of factors, including any of thefollowing:

beliefs about its competitive position past experience with a product regional factors industry trends rules of thumb

A thorough competitor analysis also would include assumptions that a competitor makes aboutits own competitors, and whether that assessment is accurate.

Competitor's Resources and Capabilities

Knowledge of the competitor's assumptions, objectives, and current strategy is useful inunderstanding how the competitor might wantto respond to a competitive attack. However, itsresources and capabilities determine its ability to respond effectively.

A competitor's capabilities can be analyzed according to its strengths and weaknesses in variousfunctional areas, as is done in a SWOT analysis. The competitor's strengths define itscapabilities. The analysis can be taken further to evaluate the competitor's ability to increase itscapabilities in certain areas. A financial analysis can be performed to reveal its sustainablegrowth rate.

Finally, since the competitive environment is dynamic, the competitor's ability to react swiftly tochange should be evaluated. Some firms have heavy momentum and may continue for manyyears in the same direction before adapting. Others are able to mobilize and adapt very quickly.Factors that slow a company down include low cash reserves, large investments in fixed assets,and an organizational structure that hinders quick action.

Competitor Response Profile

Information from an analysis of the competitor's objectives, assumptions, strategy, andcapabilities can be compiled into a response profile of possible moves that might be made by thecompetitor. This profile includes both potential offensive and defensive moves. The specificmoves and their expected strength can be estimated using information gleaned from the analysis.

The result of the competitor analysis should be an improved ability to predict the competitor'sbehavior and even to influence that behavior to the firm's advantage.

OR
http://www.netmba.com/strategy/swot/http://www.netmba.com/strategy/swot/


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nResult's Competitive Analysis will help you accomplish the following:

Have a realistic view of your competition. Foresee market changes and demands.

Identify ways to attract customers from your competitors. Discover opportunities for improvement in your business practices. Identify necessary changes in your processes to meet market demands. Identify necessary changes in your processes to reduce costs.

What will Competitive Analysis reveal about my products?

What products compete with yours What advantages your products have over the competition What disadvantages your products have when compared to the competition The readiness of a new product in the market A realistic view of customers' perception of your product against the

competition

What is nResult's approach to Competitive Analysis?nResult evaluates features and functions of your products and those of thecompetition. Each evaluation covers a wide range of criteria, which are thenclassified in categories and subcategories. The results of the evaluations arekept in a proprietary secure web-based tool kit accessible only to you on-line.

Staffing: nResult will assign a Project Leader and Competitive AnalysisEngineers to test and evaluate your product. The nResult Project Leader'sprimary responsibility is to ensure that our testing meets your requirementsand is executed according to the agreements. We will also provide you withup-to-date progress, status, and findings. In addition to managing the testingprocess, the Project Leader will provide technical expertise and will work withyou to make any required changes to the test plan as issues arise.

Scope: Before the Competitive Analysis is started, nResult Engineers willcollaborate with you to define the scope of the analysis - which of yourproducts and which of your competitors and their products will be included inthe test.

Test Case Scenarios: nResult will work with you to develop evaluation profilesto ensure all features and functions are included.

Competitive Analysis Report: At the conclusion of testing your product, youwill receive a detailed on-line Competitive Analysis Report from the nResultProject Leader and the nResult Engineers. This report will outline the resultsof comparing your product against the market.


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Q.1

Explain in detail aboutCategory Attractiveness.

Q.2What are the levels ofMarket Competition and methods for measuring competition

There are five principal levels of competition in marketing:

Consumer need level A specifically identified need of the consumer. Industry The key industries supplying the demand of those needs, taking into

consideration relative growth and market power. Product line Specific products competing with yours in that field. Organizational Companies competing with you in that field, their economic health,

market share, and relative growth pattern. Brand The specific brands competing head-on with your product, taking into

consideration their market position, corporate prioritization, and your products marketposition.

By identifying your competition in line with these five different levels, you should be able toidentify all the competitive factors that present any meaningful resistance, and get a clear image

of your market position. After that, by looking at your competitors market share, companystability, relative growth and product/service characteristics, you should be able to put together amarketing strategy that will put you on the right track. Bear in mind the fact that any of these fiveelements can fluctuate, so a strong marketing strategy should also have a good marketinginformation system in place, to detect variations so that you can make timely adjustments.

Market Competition

Product market competition

Introduction: There are two kinds of product market competition that are relevant in

corporate governance. 1) Competition in the firm's product markets, and 2) competition inthe product markets of the firms owners if they are firms as well. For instance the product

markets of an institutional investor. Product market competition is of major importance incorporate governance because it affects the incentives of managers and thereby the

economic efficiency of the companies they manage. A classic reference on product marketcompetition is Hart


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Nature of Competition in Business

MONOPOLY OLIGOPOLY MONOPOLISTIC COMPETITION

Pure Competition- low barriers to entry, many choices, no business has dominance

sdc- many companies competing and nobody has a significantadvantageexamples

small bars and restaurants

variety stores, convenience stores

nail salons, barbers

small grocery stores

doughnut shops

professional services (dentist, doctor, architects)

s

Oligopoly- very similar products, few sellers, small firms follow lead of big firms,fairly inelastic demand

sdc- many barriers to establishing a business so only the oldest and biggest businesses are operatingexamples- all the businesses are big and of equal size

o banking industry

o automotive manufacturers

o gasoline retail companies

o insurance companies

o telecommunications companies

s

Monopoly- one single large seller with no close competition and no alternate substitutesexamples

sdc

- the definition of a Monopoly, some say, is that it is bigger than all other competition combined

software companies like Microsoft

local telephone in Canada (Bell)

Hydro services

LCBO

Canada Post


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s

Monopolistic Competition- sellers feel they do have some competition

sdc- there is one big company dominating the market with a few medium or smaller sized companiesexamples

Google

(there used to be "pure competition" until Google grew very big and became dominant)

Walmart

Q.3Explain thesteps involved in brand building,

Branding

The central concern of brand building literature experienced a dramatic shift in the lastdecade. Branding and the role of brands, as traditionally understood, were subject toconstant review and redefinition. A traditional definition of a brand was: the name,associated with one or more items in the product line, that is used to identify the sourceof character of the item(s) (Kotler 2000, p. 396). The American Marketing Association(AMA) definition of a brand is a name, term, sign, symbol, or design, or a combinationof them, intended to identify the goods and services of one seller or group of sellers andto differentiate them from those of competitors (p. 404). Within this view, as Keller

(2003a) says, technically speaking, the n, whenever a marketer creates a new name,logo, or symbol for a new product, he or she has created a brand (p. 3). He recognizes,however, that brands today are much more than that. As can be seen, according to thesedefinitions brands had a simple and clear function as identifiers.Before the shift in focus towards brand s and the brand building process, brands werejust another step in the whole process of marketing to sell products. For a long time,the brand has been treated in an off-hand fashion as a part of the product (Urde 1999,p. 119). Kotler (2000) mentions branding as a major issue in product strategy (p.404). As the brand was only part of the product, the communication strategy workedtowards exposing the brand and creating brand image. Aaker and Joachimsthaler (2000)mention that within the traditional branding model the goal was to build brand image ; a

tactical element that drives short-term results. Kapferer (1997) mentioned that thebrand is a sign -therefore external- whose function is to disclose the hidden qualities ofthe product which are inaccessible to contact (p. 28). The brand served to identify aA Brand Building Literature Review

2

product and to distinguish it from the competition. The challenge today is to create astrong and distinctive image (Kohli and Thakor 1997, p. 208).Concerning the brand management process as related to the function of a brand as anidentifier, Aaker and Joachmisthaler (2000) discuss the traditional branding model


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where a brand management team was responsible for creating and coordinating thebrands management program. In this situation, the brand manager was not high in thecompanys hierarchy; his focus was the short-term financial results of single brands andsingle products in single markets. The basic objective was the coordination with themanufacturing and sales departments in order to solve any problem concerning sales

and market share. With this strategy the responsibility of the brand was solely theconcern of the marketing department (Davis 2002). In general, most companies thoughtthat focusing on the latest and greatest advertising campaign meant focusing on thebrand (Davis and Dunn 2002). The model itself was tactical and reactive rather thanstrategic and visionary (Aaker and Joachimsthaler 2000). The brand was always referredto as a series of tactics and never like strategy (Davis and Dunn 2002).2.2.2 Now: Brand Building Models

Kapferer (1997) mentions that before the 1980s there was a different approach towardsbrands. Companies wished to buy a producer of chocolate or pasta: after 1980, theywanted to buy KitKat or Buitoni. This distinction is very important; in the first casefirms wish to buy production capacity and in the second they want to buy a place in the

mind of the consumer (p. 23). In other words, the shift in focus towards brands beganwhen it was understood that they were something more than mere identifiers. Brands,according to Kapferer (1997) serve eight functions shown in Table 2.1: the first two aremechanical and concern the essence of the brand: to function as a recognized symbolin order to facilitate choice and to gain time (p. 29); the next three are for reducing theperceived risk; and the final three concern the pleasure side of a brand. He adds thatbrands perform an economic function in the mind of the consumer, the value of thebrand comes from its ability to gain an exclusive, positive and prominent meaning in theminds of a large number of consumers (p. 25). Therefore branding and brand buildingshould focus on developing brand value.A Brand Building Literature Review

3

Table 2.1The Functions of the Brand for the ConsumerFunction Consumer benefitIdentification To be clearly seen, to make sense of the offer, to quickly identify the sought-afterproducts.Practicality To allow savings of time and energy through identical repurchasing and loyalty.Guarantee To be sure of finding the same quality no matter where or when you buy theproduct or service.Optimization To be sure of buying the best product in its category, the best performer for aparticular purpose.Characterization To have confirmation of your self-image or the image that you present to others.Continuity Satisfaction brought about through familiarity and intimacy with the brand thatyou have been consuming for years.Hedonistic Satisfaction linked to the attractiveness of the brand, to its logo, to itscommunication.Ethical Satisfaction linked to the responsible behavior of the brand in its relationship

towards society.Adapted from Kapferer (1997)

Kapferers view of brand value is monetary, and includes intangible assets. Brands failto achieve their value-creating potential where managers pursue strategies that are notorientated to maximizing the shareholder value (Doyle 2001a, p. 267). Four factorscombine in the mind of the consumer to determine the perceived value of the brand:brand awareness; the level of perceived quality compared to competitors; the level ofconfidence, of significance, of empathy, of liking; and the richness and attractiveness of


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the images conjured up by the brand. In Figure 2.1 the relationships between thedifferent concepts of brand analysis, according to Kapferer (1997), are summarized.Figure 2.1From Brand Assets to Brand EquityKapferer 1997, p. 37

Brand Awareness+ Image

+ Perceived quality+ Evocations+ Familiarity, liking= Brand Assets Brand added valueperceived by customers- Costs of branding- Costs of invested capitalBrand financial value(BRAND EQUITY)A Brand Building Literature Review

4

2.1.2.1 Brand Orientation

Urde (1999) presents Brand Orientation as another brand building model that focuses onbrands as strategic resources. Brand Orientation is an approach in which the processes

of the organization revolve around the creation, development, and protection of brandidentity in an ongoing interaction with target customers with the aim of achievinglasting competitive advantages in the form of brands (p. 117-118). Brand orientationfocuses on developing brands in a more active and deliberate manner, starting with thebrand identity as a strategic platform. It can be said that as a consequence of thisorientation the brand becomes an unconditional response to customer needs and wants(p. 120). This should be, however, considered carefully given that what is demandedby customers at any given moment is not necessarily the same as that which willstrengthen the brand as a strategic resource (p. 121). Following this reasoning, thewants an needs of customers are not ignored, but they are not allowed to unilaterallysteer the development of the brand and determine its identity (p. 122).

According to the brand orientation model, the starting point for a process of brandbuilding is to first create a clear understanding of the internal brand identity. The brandthen becomes a strategic platform that provides the framework for the satisfaction ofcustomers wants and needs (Urde 1999, p. 129). The point of departure for a brandorientedcompany is its brand mission.Urdes Brand Hexagon (1999), shown in Figure 2.2, integrates brand equity and brandidentity with a companys direction, strategy and identity. The right side of the modelreflects the reference function -product category and product, which are analyzedrationally-, while the left side of the model reflects the emotional function -corporateand brand name, which are analyzed emotionally. A brand is experienced in itsentirety (p. 126), which means that both emotions and rational thought are involved.

The lower part of the model -mission and vision- reflects the companys intentionstowards the brand, while the upper part reflects the way that target consumers interpretthe brand. At the center of the model lies the core process of brand meaning creation,which includes the positioning and core values.A Brand Building Literature Review

5Figure 2.2Brand HexagonUrde 1999

In summary, in a brand-oriented organization, the objective is -within the framework


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of the brand- to create value and meaning. The brand is a strategic platform for interplaywith the target group and thus is not limited to being an unconditional response to whatat any moment is demanded by customers (Urde 1999, p. 130).Additionally, in a later article, Urde (2003) mentions that the brand building process istwo-part: internal and external. He defines the internal process as that used primarily to

describe the relationship between the organization and the brand, with the internalobjective being for the organization to live its brands. Conversely, the external processis that concerned with relations between the brand and the customer, with the externalobjective of creating value and forming relationships with the customer.2.1.2.2 Brand Leadership

Aaker and Joachimsthaler (2000) leave behind the traditional branding model andintroduce the brand leadership model, which emphasizes strategy as well as tactics (p.7). In this model, the brand management process acquires different characteristics: astrategic and visionary perspective; the brand manager is higher in the organization, hasa longer time job horizon, and is a strategist as well as communications team leader;building brand equities and developing brand equity measures is the objective; and,

brand structures are complex, as the focus is on multiple brands, multiple products, andTargetAudienceProductVision &MissionBrand nameProductCategoryCompanynamePositioning:Core ValuesPersonality QualityCommunication2) Associations1) Awareness

3) LoyaltyA Brand Building Literature Review

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multiple markets. In short, brand identity and creating brand value become the driversof strategy.The brand leadership model is Aaker and Joachimsthalers (2000) proposal for buildingstrong brands. They argue that there are four challenges, summarized in Figure 2.3, thatmust be addressed:1) The organizational challenge: to create structures and processes that lead tostrong brands, with strong brand leader(s) for each product, market or country.Also, to establish common vocabulary and tools, an information system thatallows for sharing information, experiences and initiatives, and a brandnurturing

culture and structure. Supporting this challenge, McWilliam andDumas (1997) argue that everyone on the brand team needs to understand thebrand building process, and they propose metaphors as intelligent tools totransmit the values of a firm. Doyle (2001b) adds that brand management mustbe seen as part of the total management process and not only as a specialistmarketing activity.2) The brand architecture challenge: to identify brands, sub-brands, theirrelationships and roles. It is also necessary to clarify what is offered to the


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consumer and to create synergies between brands; to promote the leveraging ofbrand assets; to understand the role of brands, sub-brands, and endorsed brandsin order to know when to extend them; and to determine the relative role of eachbrand of the portfolio. Aaker (2004a) renames brand architecture calling itinstead brand portfolio strategy. He says that the brand portfolio strategy

specifies the structure of the brand portfolio and the scope, roles, andinterrelationships of the portfolio brands (p. 13). Therefore, this challengecould be renamed the brand portfolio strategy challenge.3) The brand identity and position challenge: to assign a brand identity to eachmanaged brand and to position each brand effectively to create clarity. Speak(1998) supports and adds to this stating that the brand identity challenge shouldhave a long-term focus in order to integrate the brand building process into thefabric of the organization.A Brand Building Literature Review

7

4) The brand building program challenge: to create communication programs andother brand building activities to develop brand identity, that help not only with

the implementation but also in the brand defining process. In short, brandbuilding must do what is necessary to change customer perceptions, reinforceattitudes, and create loyalty. One tactic to do so would be to consider alternativemedia in addition to advertising. Doyle (2001b) also adds that the brand strategymust maximize shareholder value.Figure 2.3Brand Leadership TasksAaker and Joachimsthaler 2000

2.1.2.3 Brand Asset Management

Davis (2002) also talks about a new way of managing brands. He argues that brands,along with people, are a companys most valuable asset. There is growing support forviewing and managing the brand as an asset and thus having the brand drive every

strategic and investment decision (Davis and Dunn 2002, p. 15). This becomes relevantgiven that the top three strategic goals for brand strategy nowadays are increasingcustomer loyalty, differentiating from the competition, and establishing marketleadership (Davis and Dunn 2002). It is important for a company to change its state ofmind in order to adopt this perspective because brand management has to report all theway to the top of the organization and has to involve every functional area (DavisBrand Architecture- Brands/sub-brands/endorsedbrands- Roles of brands/sub-brandsBrandLeadershipBrand Identity/Position- Aspirational image- Positioning the brandOrganizational Structure andProcesses- Responsibility for brand strategy- Management processesBrand-Building Programs- Accessing multiple media- Achieving brilliance- Integrating the communication- Measuring the resultsA Brand Building Literature Review


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8

2002, p. 9). Davis (2000) defines Brand Asset Management as a balanced investmentapproach for building the meaning of the brand, communicating it internally andexternally, and leveraging it to increase brand profitability, brand asset value, and brandreturns over time (p. 12). Some of the shifts from traditional brand management to thisnew model are highlighted in Table 2.2.Table 2.2The Shift from Traditional Brand Asset ManagementDavis 2002

The Brand Asset Management process, as shown in Figure 2.4, involves four phasesand eleven steps. The first phase is to develop a brand vision, which consists of a singlestep: developing the elements of a brand vision. The basic objective of this step is toclearly state what the branding efforts must do to meet corporate goals. The secondphase is to determine the companys BrandPicture by understanding consumerperceptions about the brand and of competitor brands. This phase consists of threesteps: determining the brands image, creating the brands contract - list of customersperceptions of all the current promises the brand makes-, and crafting a brand-basedcustomer model -which allows for understanding how consumers act and think, and

how and why they make their purchase decisions. The third phase is to develop a brandasset management strategy, in order to determine the correct strategies for achievinggoals according to the brand vision. This phase consists of five steps: positioning thebrand, extending the brand, communicating the brands positioning, leveraging thebrand, and pricing the brand. Finally, the fourth phase is to support a brand assetTraditional Brand ManagementBrand managementBrand managersRetentionOne-time transactionsCustomer satisfactionProduct-driven revenuesThree-month focus

Market share gainsMarketing manages the brandAwareness and recall metricsBrand is driven internallyBrand Asset Management StrategyBrand asset management strategyBrand champions and ambassadorsDeep loyaltyLifetime relationshipsCustomer commitmentBrand-driv en revenuesThree-year focusStock price gainsAll functional areas manage thebrandSophisticated brand metrics

Brand is driven externallyA Brand Building Literature Review

OR

Phase 1- Developing a brand vision

Step 1Elements of abrand vision


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Phase 2- Determining BrandPicture\

Step 2Determiningbrand image

Step 3Creating brand

Contract

Step 4Brand-basedcustomer model

Phase 3- Developing a brand asset management strategy

Step 5Positioningthe brand

Step 6Extendingthe brand

Step 7Communicatingbrands positioning

Step 8Leveragingthe brand

Step 9Pricingthe brand

Phase 4- Supporting a brand management culture

Step 10

Measuring return onbrand investment

Step 11Establishing abrand-based culture

Q.4What do you mean byBrand Positioning and Brand Associations?

The termpositioning was described by Trout and Riesas the basic position in the consumers mindoccupied by a brand. They saw positioning asan antidote to the overcommunicated society,in which consumers were drowning in a sea ofadvertising messages.

The term positioning is, and should be, intimatelyconnected to the concept of target market.


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That is, a brands positioning defines thetarget audience. For example, an airline couldposition itself against other airlines, whichdefines the target audience as airline travelers.Or, it could position itself against all modesof transportation between two destinations,which then defines the target audience as alltravelers between those two markets.

The positioning possibilities that exist for any given brandor service are almost infinite in number. Some commonlyused positioning strategies are:Positioning against a broader market; for example, positioninga bicycle brand as a substitute for the automobile,rather than as a substitute for other brands of bicycles.Positioning against a price segment of the market; for example,positioning a car brand against luxury imported

cars.Positioning against a usage segment of the market; forinstance, positioning a brand of cooking oil as the verybest brand of oil for frying chicken.Positioning against a geographic segment of a market;for example, positioning Ford trucks as made for drivingconditions in Texas.Positioning against a psychgraphic segment of the market;as an example, positioning the Volvo as the car fordrivers who are primarily concerned about safety.Positioning against a channel of distribution, a season

of the year, a particular type of weather, a humanfear, etc.

OR

Positioning defined

Most authors define positioning as the perception that a target market has

of a brand relative to its competitors. This definition raises two points.

First, positioning is perceptual. In other words, positioning is not factual;

instead it pertains to influencing customer perceptions of your product.

Second, companies cannot position brands in isolation; they must be positionedrelative to one or more competitors. By nature, human beings learn by makingcomparisons. When we learn new information, one way we remember and usethat information is by mentally comparing it to existing information. Therefore,its only natural for people to develop perceptions of one brand that are relativeto other brands. When we say what our brand is, whether we like it or not, we


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also imply what our competitor is not. When we say what our brand is not, weimply what our competitor is.

Brand Association

Brand Association and Value CreationBrand associations are useful to marketers. Marketers use brand associations todifferentiate, position, and extend brands, to create positive attitudes and feelings towardsbrands, and to suggest attributes or benefits ofpurchasing or using a specific brand(Aaker, 1991). However, brand associations are ofmore use to the customer than themarketer. The way a brand association creates value to the customer will depend on thecustomers perception of value. For each individual, reality is a totally personalphenomenon, based on that persons needs, wants, and personal experiences. Customers7

everywhere respond to images, myths, and metaphors that help them define their personalidentities. Thus, different customers will perceive reality differently. Indeed, Schiffrnan& Kanuk et al (1996, p.161) contends that although two individuals may be subject to the

same stimuli under apparently the same conditions, the way they recognize them, selectthem, organize them, and interpret them is a highly individual process based on eachpersons own needs, values, and expectations.The underlying value of a brand name often is its set ofassociations its meaning topeople. Associations, according to Aaker (1991) represent the bases for purchasedecisions and for brand loyalty. There are a host ofpossible associations and a variety ofways they can provide value (p.110). He identifies the following as the possible ways inwhich associations create value to the customer: helping to process / retrieve informationabout a brand; generating a reason to buy, and creating positive attitudes / feelings.2.3 Brand Associations and Value of Products Model

Brand associations help consumers judge the value ofa product. For example, country of

origin influences consumers in making judgements as to whether a product is of value ornot. Consumers tend to have broad but somewhat vague stereotypes about specificcountries and specific brands that they judge best. For example, French perfume,Italian leather, Japanese electronics and so on (Cateora, 1996; p.349). Using the exampleof country oforigin as a basis forjudging value of products, a model for brandassociations and consumer perceptions ofvalue ofproducts can be depictedschematically as in the following diagram (Figure 1)Associations Value Process / RetrieveInformation Reason-to-buy

Create Positive attitudesFigure 1: Conceptual Framework of the effects ofbrand association on perceived value. Product attributes Relative price Use / Application User / Customer Celebrity / Person Life Style/Personality


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Competitions Country ofOrigin8The model shows that a product is of value to the customer and hence it can be bought tosatisfy a need depending on its attributes, its use, or whether it can be associated with a

particular customer group. Similarly, a consumer will consider a product as beingvaluable if he/she can associate it with a certain celebrity, lifestyle or country of origin.Proponents ofbrand positioning suggest that brands should develop distinct images andthat these images will attract specific consumer segment (Hoek, et al, 2000).Consequently, the consumer segment will see the brand as being valuable to them. Howdo marketers determine the brand associations that convey the value of a brand to theconsumer? Association research (research on brand associations) is important tomarketers since they would want to gain an insightful picture of how a brand is perceivedby consumers as well as its competitors. The techniques that have been utilized by firmsto measure brand associations form part ofthe next section.

Measurement ofBrand AssociationsOne of the key functions ofbrand management is to keep one jump ahead ofcompetitorsby imprinting the brand firmly on the consumer psyche and keep it there (Emerald,2000). A firm therefore requires understanding consumer perceptions of its brand(s) visa-avis those of competitors. This calls for the measurement of brand associations. Thetechniques used to achieve this objective can be grouped into two categories lessstructured

and structured techniques ( Aaker, 1991; Low & Lamb, 2000).3.1 Projective Techniques

The central feature ofall projective techniques is the presentation otan ambiguous,unstructured object, activity, or person that a respondent is asked to interpret and explain(Aaker, et al, 1998). These writers argue that projective techniques are used when it is

believed that respondents will not or cannot respond meaningfully to direct questionsabout (1) the reasons for certain behaviours or attitudes or (2) what the act ofbuying,owning, or using a brand means to them (p.1 98). Respondents may be unwilling orunable to reveal feelings, thoughts, and attitudes when asked direct questions for anumber ofreasons. First, they may be unwilling because they feel the information is9

embarrassing or private (Aaker, 1991; p 136). Alternatively, respondents may simply bunable to provide information as to why they buy certain items because they do not knotile real reasons.Man of projective techniques employed in the measurement ofbrand associations aremeant to address problems aforementioned since they allow the respondent to project h

self or him-self into a context, which bypasses the inhibitions, or limitations of moredirect questioning (Aaker, p. 136). The techniques involve focusing on a discussion upothe use experience, the decision process, the brand user, or off- the- wall perspectivessuch as considering the brand to be a person or an animal. Another characteristic ofprojection research is the use of ambiguous stimuli, wherein there is freedom to projectexperiences, attitudes, and perceptions.There are many projective (indirect) approaches to understanding brand associations.The commonly used methods are word association, picture completion, Thematic


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Apperception Tests, sentence completion, and story completion (Aaker, 1991; Kotler anArmstrong, 1996; Aaker, et a!, 1998).3.2 Structured Approaches

According to Aaker (1991), structured approaches involve scaling brands upon a set ofdimensions. He argues that scaling approaches are more objective and reliable than

qualitative approaches since they are less vulnerable to subjective interpretation.Scaling consumer perceptions involves the determination ofperceptual dimensions,identification ofthe target segment. and the interpretation ofthe brand profiles. Theperceptual dimensions may include the product attributes and benefits, user ofthe brand,or relevant competitors (Day, et al, 1979).Scaling methods that marketers have utilized include semantic differential (Fry andClaxton, 1971), Likert scale, conjoint analysis, and natural grouping

Q.6Explain Customer based brand equity with the help of brand equity model

Customer Based Brand Equity

Customer-Based Brand Equity is formally defined as the differential effect that brandknowledge has on consumer response to the marketing of that brand. A brand is said to havepositive customer-based brand equity when consumers react more favourably to a product andthe way it is marketed when the brand is identified than when it is not (e.g., when the product isattributed to a fictitious name or is unnamed). (Kevin Lane Keller2004).Thus, a brand withpositive CBBE equity might result in the consumers acceptance of a new brand extension, lesssensitiveness to price increases and withdrawal of advertising support, or willingness to seek thebrand in a new distribution channel. On the other hand, a brand is said to have negative

customer-based brand equity if consumers react less favourably to marketing activity for thebrand compared with an unnamed or fictitiously named version of the product. The mainingredients of consumer based brand equity are differential effect, brand knowledge, consumerresponse in marketing.

The followings are the some of the important building blocks identified as the crucial elementsof customer based brand equity.

Brand Loyalty

This ismajor component of brand equity. Brand loyalty, a long a central construct in marketing,is a measure of the attachment that a customer has to brand. If the customer continue to purchaseone particular brand even in the face of competitors with superior features, price andconvenience where we can find the brand loyalty. It reflects how likely a customer will be toswitch to another brand, especially when that brand makes a change, either in price or in productfeatures. It is one indicator of brand equity which is demonstrably linked to future profits. Brandloyalty is qualitatively different from the other major dimensions of brand equity in that it is tied


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more closely to the use of experience. Brand loyalty cannot exist without prior purchase and useexperience. It is a basis of brand equity that is created by many factors, chief among them beingthe use experience. (Aaker 1991) defines loyalty as the attachment that a customer has to abrand and consider it to be a primary dimension of brand equity. In contrast, Keller (1993)views loyalty as a consequence of brand equity, i.e. when favourable attributes results in

repeated purchase. (Yoo and Donthfu 2001) defines brand loyalty from the attitudinalperspective that the tendency to be loyal to a focal brand, which is demonstrated by theintention to buy the brand as a primary choice

Brand Knowledge

From the perspective of the CBBE model, brand knowledge is the key to creating brandequity, because it creates the differential effect that drives brand equity. What marketers need,then, is an insightful way to represent how brand knowledge exists in consumer memory. Inparticular brand knowledge can be characterized in terms of two components: brand awarenessandbrand image. Brand awareness is related to the strength of the brand node or trace in

memory, as reflected by consumers ability to identify the brand under different conditions(Rossiter, J.R, and Piercy.L (1987). Brand image can be defined as perceptions about a brand asreflected by the brand association held in consumer memory. Apositive brand imageis createdby marketing programmes that link strong, favourable, and unique associations to the brand inmemory. The brand knowledge effects through brand awareness and brand association, thebenefits of brand are underlined as outcomes. Therefore brand knowledge entails significantactivities leading to brand loyalty and equity. In brief brand knowledge encompasses theconsumers ability relating to the awareness of the product, product features, where the productis available, company that makes the product, how the product is used and for what purpose andthe specific and distinctive features of the product.

Brand Awareness

Brand awareness refers to the strength of the brand presence in the consumers mind. It isthe ability of a potential buyer to recognize or recall that a brand is a member of a certain productcategory. This refers to the strength of a brands presence in consumers mind. Brand awarenessis an important component of brand equity (Aaker, 1991; Keller, 1993). It is believed that brandawareness is improved to the extent to which brand names are chosen that are simple and easy topronounce or spell; familiar and meaningful; and different, distinctive and unusual. Brandawareness consists of brand recall andbrand recognition. A brand can increase the demand for a

product in several ways. Brand awareness makes it easier for consumers to identify productswith the well-known brand names(Mary W.Sullivan 1998). Therefore, brands provideinformation by increasing awareness and serving as a proxy for quality. Brands can also appealto a consumers sense of individuality or make consumers feel as if they belong to a particularsocial group. Brand awareness can be characterized according the depth and breath. The depthof brand awareness concerns the likelihood that a brand element will come to mind and the easewith which it does so. The breath of brand awareness concerns the range of purchase and usage
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situations in which the brand element comes to mind. The breath of brand awareness depends toa large extent on the organization of brand and product knowledge in memory.

Perceived Quality

Perceived quality can be defined as the customers perception of the overall quality orsuperiority of a product or service with respect to its intended purpose, relative to alternatives(Valarie A.Zeithaml 1988). Perceived quality is, first a perception by customers. Perceivedquality is defined relative to an intended purpose and a set of alternatives. Perceived quality is anintangible, overall feeling about a brand. However, it usually will be based on underlyingdimensions which included characteristics of the products to which the brand is attached such asreliability and performance. To understand perceived quality, the identification and measurementof the underlying dimension will be useful. Perceived quality is a major determinant of brandstrength. Quality helps to increase market share, which results in lower unit costs through scale

economies. So it provides a competitive edge over the rivals in securing potential market area byinspiring the customers.

Brand Association

To create brand equity, it is important that the brand have some strong, favourable and uniquebrand association. Creating strong, favourable and unique associations is a real challenge tomarketers, but essential in terms of building customer-based brand equity.The favourable brandassociations are created by convincing consumers that the brand possesses relevant attributes and

benefits that satisfy their needs and wants such that they from positive overall brand judgments.Basically brand associations can be classified into three major categories viz, attributes, benefitsand attitudes. Attributes are those descriptive features that characterize a product or service.Attributes are further sub divided into product related and non-product related. Benefits are thepersonal value consumers attach to the product or service attributes can be further distinguishedinto three categories i.e. functional benefits, experimental benefits and symbolic benefits. Brandattitudes are consumers overall evaluations of a brand, which is most important one because it isdirectly associated with the consumers buying behaviour.

Purchase Decision

The core of marketing is exchange. It is the actualization of a transaction between theseller and the seeker of value. In this process the customer must make a choice or decisions withregard to selection of a value provider. A decision involves a choice between two or morealternative actions or behaviours (Henson, Flemming 1976).The customers essentially make twotypes of decision in the context of marketing. The first type of decisions is directed at the choiceof product or service. These decisions are called assortment decisions. The second type decisions


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when customers react more favorably to a product and the way it ismarketed when the brand isidentified than when it is not (e.g., when it is attributed to a fictitiouslynamed or unnamedversion of the product).

Brand knowledge can be defined in terms of an associative network memorymodel as anetwork of nodes and links wherein the brand node in memory has a varietyof associationslinked to it. Brand knowledge can be characterized in terms of twocomponents: brandawareness and brand image. Brand awareness is related to the strength ofthe brand node ortrace in memory, as reflected by consumers ability to recall or recognize thebrand underdifferent conditions. Brand awareness can be characterized by depth and

breadth. The depthof brand awareness relates to the likelihood that the brand can berecognized or recalled. Thebreadth of brand awareness relates to the

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