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LEVERAGING SECONDARY BRAND ASSOCIATIONS TO
BUILD EQUITYChapter 7
LEVERAGING
• “Borrowing” some brand knowledge and depending on the nature of associations or responses, some brand equity
• Unlike brand elements and communication strategies, this is an indirect approach to build brand equity.
Sources of Brand Knowledge
Things
Places
People
Other Brands
Brand
Alliances
Ingredients Company
Extensions
ChannelsCountry of Origin
Events
Causes
3rd Party Endorsements
Endorsers
Employees
Creation of New Brand Associations
• By making a connection between and other entities, consumers form a mental association
• This secondary knowledge is most likely to affect the evaluations of a new product when consumers lack the motivation or the ability to judge product related attributes
Effects of Existing Knowledge
• Awareness and knowledge of the entity– DO they have the knowledge– Do they hold unique associations
• Meaningfulness of the knowledge– Is the knowledge relevant and meaningful for the
brand– Does it have connection to the brand
• Transferability– How strongly will this impact the choice of the new
brand
Examples
• Events: create experiences• People: create feelings• Media: knowledge about attributes• Cause-related marketing:
– Enhance brand image– Evoke feelings of social approval/esteem– Brand attitudes such as trustworthy &
Likeable
Will Brand Leveraging Work for you?
• Does the new product fit into the established product family? • Does the brand have attributes or features that easily and
effectively carry into new categories? • Is the brand name strengthened or diluted by representing
two (or more) differentiated products? • Does your company have facilities necessary to
manufacture and distribute a new and differentiated product?
• Will sales of the new product cover the cost of product development and marketing?
• A brand leveraging strategy can be extremely successful and profitable if it is correctly implemented and provides new products with the right image.
Associations• Commonality: when consumers have
associations to another entity that are congruent with desired brand associations
• Complementarity: when there is not the level of congruence required, how much can associations add to the brand
Frito Lay™ name is extended from potato chips into other types of snack foods and dips. An introduction of Frito Lay™ lemonade did not succeed because the fruity, sweet drink had little connection to other Frito Lay™ products.
• Other examples that did not work in the consumer market include – Ben-Gay™ aspirin, – Fruit of the Loom™ laundry detergent.
• However, M&M™ ice cream, Reese’s™ peanut butter, and Minute Maid™ orange soda experienced success because the brands held direct and logical connections to their new categories.
An Exception
• Bic™ is a strong brand name with years of experience in marketing low-cost disposable plastic products such as the Bic™ pen. Thus, Bic™ is positioned well to introduce products that capitalize on these same basic strengths – products such as disposable razors and cigarette lighters.
Pros• More products mean greater shelf space for the brand
and more opportunities to make a sale. • The cost of introducing a brand leveraged product is
less than introducing an independently new product due to a much smaller investment in brand development and advertising designed to gain brand recognition.
• A full line permits coordination of product offerings, such as bagels and cream cheese, potato chips and ranch dip, peanut butter and jelly, etc.
• A greater number of products increase efficiency of manufacturing facilities and raw materials.
Cons• Brand leveraging does present challenges.
– Brand dilution
– Potential exists for damaging the reputation of the parent product if new products fail.
– Manufacturing and inventory costs may be higher as a result of product diversification.
Company
• Create a new brand • Adopt or modify an existing brand • Combine an existing or a new brand
Corporate Marketing Umbrella (Philosophy)
Corporate Brand vs. Product Brand
Importance of Corporate Branding
Country of Origin
• Is Land Rover British, German or American?
Cultural Bazaar
• Origins of the brand are more important than who the owner becomes latter in life.
• Lamborghini is owned by German-VW, yet it keeps this Italian identity.
• Rolls-Royce is now owned by German BMW, it still is associated with English luxury.
• It is like a child, the first years are the most important for his identity.
Other Geographic Associations
• States: Idaho Potatoes• Regions: Irish Spring Soap• Cities: Impulse London Vibe
Problems
• Strong associations may hinder migration• Favourability of the country of origin
– Domestic Perspective– Foreign Perspective– Individualistic vs collectivist societies
• Patriotic Appeal– Lack uniqueness– Overused
Channels of Distribution• Associations with
– Product– Price– Credit Policy– Quality of Service– Results in associations of brands by retailers“If its sold in Nordstrom, it must be of good
quality”
In Bangladesh context?????
• Exclusive Vs.
• Intensive distribution
A small story….• He was the little tan bear millions of kids grew up with. He tagged
along with Christopher Robin, stuck his hand in the honey pot, and figured out new ways to cause harmless mischief. And no matter where children came from or what their parents did for a living, the name Winnie-the-Pooh conjured up a single image gleaned from the classic books by A.A. Milne.
• Today's kids, however, won't have that common touchstone. These days, their image of Pooh depends a lot on where they live and how much money their parents make. That's because the Walt Disney Co., which owns the rights to Milne's make-believe menagerie, is carefully marketing two distinct Poohs. The original line-drawn figure appears on fine china, pewter spoons, and pricey kids' stationery found in upscale specialty and department stores such as Nordstrom and Bloomingdale's. The plump, cartoonlike Pooh, clad in a red T-shirt and a goofy smile, adorns plastic key chains, polyester bedsheets, and animated videos. It sells in Wal-Mart stores and five-and-dime shops. Except for at Disney's own stores, the two Poohs do not share the same retail shelf.
Co-Branding• Occurs when two or more existing brands
are combined into a joint product or are marketed together in some fashion
Examples:• Sony Ericsson• Yoplait Trix Yogurt• Nestle’s Cheerios Cookie Bars
• Co-branding is nothing new, and it's something that we as consumers take somewhat for granted. Visit a grocery store and you'll see dozens of examples, from the ice cream aisle (Breyer's (UL) and Hershey to the snack aisle (Lay's and KC Masterpiece (CLX)) to the cereal aisle (Kellogg's (K) and Healthy Choice) to the dessert aisle (Cinnabon and Mrs. Smith's). You can also find co-branding examples in the automotive world (Coach (COH) and Lexus (TM)), the hospitality industry (Bulgari and Ritz-Carlton), the footwear business (Disney (DIS) and Crocs (CROX), the franchising world (Tim Hortons (THI) and Cold Stone, the airline industry (Southwest (LUV) and SeaWorld), and even in product catalogs stuffed into airplane seat pockets ("Order your Braun Oral-B Plaque Remover today").
• For example, a restaurant could co-brand with a local packaged-foods maker to create a new menu item, an accounting firm could co-brand with an information-technology provider to create a new consulting offering, or a physician might co-brand with a hospital on a new service line. A good place to start generating ideas is by thinking about other types of companies that do a good job serving your target market. You might even ask your customers to identify other companies with which they do business and see if you come across any patterns.
Advantages of Co-Branding
• Borrow needed expertise• Leverage equity you don’t have• Reduce cost of product introduction• Expand brand meaning into related
categories• Broaden meaning• Increase access points• Source of additional revenue
Disadvantages of Co-Branding
• Loss of control• Risk of brand equity dilution• Negative feedback effects• Lack of brand focus and clarity• Organizational distractions
Ingredient Branding
• A special case of co-branding that involves
creating brand equity for materials, components,
or parts that are necessarily contained within
other branded products• Examples:• Betty Crocker baking
mixes with Hershey’s• chocolate syrup• Intel inside
Licensing
• Involves contractual arrangements wherebyfirms can use the names, logos, characters, andso forth of other brands for some fixed feeExamples:• Entertainment (Star Wars, Jurassic Park, etc.)• Television and cartoon characters (The
Simpsons)• Designer apparel and accessories (Calvin Klein,• Pierre Cardin, etc.)
Celebrity Endorsement
• Draws attention to the brand• Shapes the perceptions of the brand• Celebrity should have a high level of
visibility and a rich set of useful associations, judgments, and feelings
Celebrity Endorsement: Potential Problems
• Celebrity endorsers can be overused by endorsing many products that are too varied.
• There must be a reasonable match between the celebrity and the product.
• Celebrity endorsers can get in trouble or lose popularity.
• Many consumers feel that celebrities are doing the endorsement for money and do not necessarily believe in the endorsed brand.
• Celebrities may distract attention from the brand.
Sporting, Cultural, or Other Events
• Sponsored events can contribute to brand equityby becoming associated to the brand and improving brand awareness, adding newassociations, or improving the strength,favorability, and uniqueness of existingassociations.• The main means by which an event can transferassociations is credibility.