chapter
12
Branding
McGraw-Hill/Irwin
© 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.
Branding — Today’s Objectives

Objectives will be to:

Understand what a brand is and how the 2Is affect branding

Understand what brand equity is and how it is measured

Discuss how marketing programs build brand equity

Examine the seven-step branding process

Review two case studies in online branding

Discuss the effects of brand on the four customer relationship stages
Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Some Internet Brands Have Become
Major Players
Source: www.brandinstitute.com/bi_site/news_release_megabrands1098.htm
Exhibit 12.1: Examples of Internet
Brands
Exhibit 12.2: Case Studies of
Successful Online Branding Efforts
Established as Traditional
Brand
Established as Online
Brand
Branding
Online
Branding and
Selling Online
Intermediary/
Vertical Portal
e-Commerce
BusinesstoConsumer
Ragu
American
Airlines
Yahoo!
CDNow
BusinesstoBusiness
Boeing
Cisco Systems
Avnet
NexPrise
Source: PricewaterhouseCoopers Moneytree Report 2000.
Exhibit 12.3: The 2Is and Branding
Individualization

Interactivity creates
value because the
brand is tailored to the
individual

Customers gain a
sense of control with
respect to the nature
and timing of their
interactions with the
brand

There is a danger that
the brand will stray from
its core personality
Interactivity

Responsiveness becomes
a key brand attribute as
customers recognize that
their concerns are heard
and responded to across
multiple channels

The frequency of
interaction is increased —
leading to the need to
freshen content and target
messages to specific
usage occasions

Customers expect the
brand to evolve in
response to their needs
and desires
Community
Should Offline Firms Create New
Online Brands?
Point-Counterpoint
Keep the Same Brand
It takes an enormous amount
of time and money to build a
strong brand name
Customers who purchase
online are assured that
services are available offline
It is difficult to uncover
interesting new brand names
The online brand and the
offline brand can have a
synergistic effect
Target customers will not be
confused by brand offerings
appearing online

Build a New Brand
Using an existing brand limits
the growth of the user base
Existing offline brands “don’t
get the Net”
It is possible to sign up more
partners when a third-party
name is used

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Quotes on Online Branding



“E-branding is more important [than e-commerce]. And it must come
first. Because few people will buy your stuff – online or off – unless you
are top-of-mind.” – Annette Hamilton, Executive Producer, ZDNet
“Brand is the price of entry [to the Internet], not the winning strategy.” –
Dylan Tweney, infoNet
“By the time your potential customers log on, they already know what
they’re looking for, and they often know from whom they want to buy it.
… They’re just not listening to branding messages anymore.” – Michael
Fischler, Principal, The Pubs Group
Quotes on Online Branding (cont.)



“Brands stand as comfort anchors in the sea of confusion, fear, and
doubt. In dynamic markets, strong brands have more value than ever,
precisely because of the speed with which these markets move.” –
Chuck Pettis, Technobranding
“It took more than 50 years for Coca-Cola to become a worldwide market
leader, but only five years for online search engine Yahoo to gain market
dominance. The role of the brand has changed dramatically and has
created a vacuum between offline and online brands.” – Mark Lindstrom,
Executive Director, ZIVO
“A company’s website is the brand. It’s the hub of consumer experience,
the place where all aspects of a company, from its annual report to its
products to its support, intersect. It’s the company in a nutshell, all there
in a way that just is not possible in the analog world.” – Sean Carton,
Carton Donofrio Interactive
Exhibit 12.4: A Simple Conceptual
Model of Brand Equity
A good brand . . .
Product, Price, Community, Communication
and Distribution Programs
Wraparounds
. . . provides positive
consumer responses . . .
. . . and benefits both
target customers and firm
Brand Awareness
Customer Benefits

Depth

Confidence

Breadth

Loyalty

Satisfaction
Brand Associations
Core Product/
Service

Strength
– Relevant
– Consistent

Valence

Uniqueness
– Memorable
– Distinctive
Source: Keller (1996), Aaker (1996), Strategic Market Research Group, Marketspace Analysis
Firm Benefits

Reduced
marketing costs

Increased
margins

Opportunity for
brand extensions
Exhibit 12.5: A Model of FogDog
Branding
Fogdog Brand Perceptions
Product, Price, Community, Communication
and Distribution Programs

Wraparounds



Core Product /
Service






Emphasize prices and selection
benefits
Selective distribution
Competitive pricing
Gift shopping service
MyFogdog discounts and
benefits
“How to buy” help
Discussion groups by sport
Fogdog Fetch helps you find the
right product
Low prices
Selection breadth and depth
Do Strong Online Brands Matter?
Point-Counterpoint
Strength of Brand
Is Not That Important
A Strong Brand Essential
A strong brand name provides
a clear presence in the market
Strong brands attract
customers
Strong brands carry positive
associations with consumers
Clear brands are associated
with higher conversion rates
All current online “winners”
have strong brands

Alliances — not strong brands
— are the key to winning in
the marketplace
Readily available third-party
evaluators will increasingly
influence online consumption
Speed to market is more
important than branding
The trend toward
customization is leading to an
environment where the
meaning of a “mega-brand” is
no longer relevant
Current online winners may
have strong brands, but so do
a number of “big losers”

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Exhibit 12.7: Marketing Programs to
Build Brand Equity
Product
Pricing
Communication
Promotional
Program
Distribution
Brand Equity
Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Exhibit 12.8: A Seven-Step Branding
Process
Step 1
Clearly Define the Target Audience
Step 2
Understand the Target Customer
Step 3
Understand the Competition
Step 4
Design Compelling Brand Intent
Step 5
Identify Key Leverage Points in
Customer Experience
Step 6
Execute the Branding Strategy
Step 7
Establish Feedback Systems
Exhibit 12.9: Similarities & Differences
in Offline vs. Online Branding
Branding
Element
Offline
to manageable number of segments to
prevent inconsistent messaging
Online
1. Clearly Define the
Brand Audience
Limited
Could
2. Understand the
Customer
Requires
Requires
3. Understand the
Competition
Requires
4. Design Compelling
Brand Intent
 Brand
Greater
5. Identify Key
Leverage Points in
Customer
Experience
Buying
Buying
6. Execute the
Branding Strategy
Strong,
thorough understanding of environment,
desired purchase and usage experience
monitoring of competitor advertisements and
activities
intent (desired positioning) designed to address
the needs and beliefs of target segments
process is typically a simplified representation
of customer segment behavior with static leverage
points
Image
positive brands are built up over time
reinforced through variety of offline media
Marketing strategy includes plan for sequenced
growth and adjustment of brand based on changing
customer needs
Building
brand awareness requires significant
investment
Building
brand loyalty takes time offline, especially
because early customer receptivity to brands is
difficult to assess (and usually involves market
research)
include larger number of segments based on values or
interests rather than demographics
thorough understanding of desired purchase and
usage experience in both the offline and online environment
Competitor
advertisements and some activities can be directly
observed online
opportunity for customization of key messages
process tends to be more dynamic and flexible
Online
interactions bring in added concerns of security and
privacy
Limited
familiarity with online brands makes fostering trust more
difficult
With
the ability to customize, one customer’s brand image may
be different from another customer’s brand image
Customization
for multiple segments and opportunity for early
recognition of the changing customer requires a corresponding
tailoring of brand intent
Building
brand awareness requires significant investment,
especially for those competitors who are not first in their
category online
Brands
have the potential to generate loyalty more quickly,
especially if customers are targeted effectively
7. Establish
Feedback Systems
Collecting
and analyzing customer feedback is more
time-consuming
Sophisticated
tools exist for tracking online; allow for
anonymous, interactive, quick feedback
Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Exhibit 12.10: Citibank Online
Exhibit 12.11: Citibank Vs. Chase:
Assessment of Key Branding Elements
Exhibit 12.12: Citibank Vs. Chase
Assessment of Key Brand Attributes
Exhibit 12.13: CBS MarketWatch.com
Exhibit 12.14: CBS Marketwatch.com Vs.
Bloomberg.com: Key Branding Elements
Exhibit 12.15: CBS Marketwatch.com Vs.
Bloomberg.com: Key Brand Attributes
Exhibit 12.16: Brand as a Moderating
Variable
Brand
Enhances or Detracts
Marketing
Levers
Relationship
Stages
For advertising, brand can enhance awareness
Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Branding and Four Key Stages of
Customer Relationships
Exploration/
Expansion
Awareness




Offline
advertising
Web price
discount
Increased
number of
channel
intermediaries
Online
billboards
Commitment
Dissolution

Direct mail



Targeted price
promotions
Volume
discounts
Discontinue
pricing discounts


Efficient site
structure
Personalized
pages

Loyalty programs
Reduce
advertising
expenditures

Identify
“departing
friends”

Reduce customer
care

Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Exhibit 12.17: EBay Vs. Amazon.com
Auctions: Key Branding Elements
Exhibit 12.17: EBay Vs. Amazon.com
Auctions: Key Branding Elements
Exhibit 12.18: EBay and
Amazon.com Auctions: Key Attributes
Chapter 12: Branding

Defining Brand and Examining How the 2Is Affect Branding

What Is Brand Equity, and How Is It Measured?

How Marketing Programs Build Brand Equity

The Seven-Step Branding Process

Two Case Studies in Online Branding

Effects of Brand on the Four Customer Relationship Stages

EBay Example

Conclusion
Branding — Conclusion

Branding is fundamentally different from the other marketing activities —
product, pricing, communication, community and distribution — in three ways:

Brands are reflections or outcomes of the firm’s marketing activities

Unlike the other activities, branding is an integral part of every
marketing activity and strategy

Strong brands can be used to enhance the effectiveness of all other marketing
activities

The branding process includes seven steps: 1) clearly define the target
audience, 2) understand the target customer, 3) understand the competition,
4) design compelling BrandIntent, 5) identify key leverage points in customer
experience, 6) execute the branding strategy and 7) establish feedback
systems.

The presence of a strong brand enhances positive marketing activities such
that awareness, exploration and commitment are more effectively established.