LEVERAGING SECONDARY BRAND ASSOCIATIONS TO BUILD EQUITY Chapter 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 Company Ingredients Alliances Other Brands Extensions Events es Employees Things Brand People Endorsers 3rd Party ndorsements Places Country of Origin Channels 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? oes the new product fit into the established product amily? oes the brand have attributes or features that easily nd effectively carry into new categories? the brand name strengthened or diluted by epresenting two (or more) differentiated products? oes your company have facilities necessary to manufacture and distribute a new and differentiated roduct? Will sales of the new product cover the cost of product evelopment and marketing? brand leveraging strategy can be extremely successful nd profitable if it is correctly implemented and provides ew 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 o Lay™ name is extended from potato chips into other types of snack foods and dips. An ntroduction of Frito Lay™ lemonade did not ucceed because the fruity, sweet drink had little onnection 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 ategories. 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 re products mean greater shelf space for the nd and more opportunities to make a sale. e cost of introducing a brand leveraged duct is less than introducing an ependently new product due to a much aller investment in brand development and vertising designed to gain brand recognition. full line permits coordination of product erings, such as bagels and cream cheese, ato chips and ranch dip, peanut butter and y, etc. reater number of products increase efficiency 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 Reputation Corporate Branding Corporate Identity Corporate Marketing Corporate Communica tions Corporate Image Corporate Brand vs. Product Brand Management responsibility: Management responsibility: CEO Brand Manager Functional resp.: Most/All Departments General responsibility: All personnel Communication channels: Functional resp.: Communication mix Marketing General responsibility: Stakeholder focus: Marketing personnel Consumer Brand gestation: Medium / Long Brand gestation: Short Importance of Corporate Branding Country of Origin s 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 trong associations may hinder migration avourability of the country of origin Domestic Perspective Foreign Perspective Individualistic vs collectivist societies atriotic Appeal Lack uniqueness Overused Channels of Distribution ssociations with Product Price Credit Policy Quality of Service Results in associations of brands by retailers f its sold in Nordstrom, it must be of good quality” n Bangladesh context????? • Exclusive Vs. • Intensive distribution A small story…. the little tan bear millions of kids grew up with. He tagged h Christopher Robin, stuck his hand in the honey pot, and ut new ways to cause harmless mischief. And no matter hildren came from or what their parents did for a living, the innie-the-Pooh conjured up a single image gleaned from ic books by A.A. Milne. kids, however, won't have that common touchstone. ays, their image of Pooh depends a lot on where they live w much money their parents make. That's because the ney Co., which owns the rights to Milne's make-believe ie, is carefully marketing two distinct Poohs. The original wn figure appears on fine china, pewter spoons, and pricey ionery found in upscale specialty and department stores Nordstrom and Bloomingdale's. The plump, cartoonlike ad in a red T-shirt and a goofy smile, adorns plastic key polyester bedsheets, and animated videos. It sells in Walres and five-and-dime shops. Except for at Disney's own he 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 cobranding 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 cobranding that involves reating 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 volves contractual arrangements whereby s can use the names, logos, characters, and orth of other brands for some fixed fee mples: ntertainment (Star Wars, Jurassic Park, etc.) elevision and cartoon characters (The mpsons) esigner apparel and accessories (Calvin Klein, erre 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 elebrity endorsers can be overused by ndorsing many products that are too varied. here must be a reasonable match between the lebrity and the product. elebrity endorsers can get in trouble or lose opularity. any consumers feel that celebrities are doing e endorsement for money and do not ecessarily believe in the endorsed brand. elebrities may distract attention from the brand. orting, Cultural, or Other Events Sponsored events can contribute to brand equity y becoming associated to the brand and mproving brand awareness, adding new ssociations, or improving the strength, avorability, and uniqueness of existing ssociations. The main means by which an event can transfer ssociations is credibility.