Brand relationship
A consumer-brand relationship, also known as a brand relationship, is the relationship
that consumers, think, feel, and have with a product or company brand. For more than half a
century, scholarship has been generated to help managers and stakeholders understand how to
drive favorable brand attitudes, brand loyalty, repeat purchase, customer lifetime value,
customer advocacy, and communities of like-minded individuals organized around brands.
Research has progressed with inspiration from attitude theory and, later, socio-cultural
theories, but a perspective introduced in the early 1990s offered new opportunities and
insights. The new paradigm focused on the relationships that formed between brands and
consumers: an idea that had gained traction in business-to-business marketing scholarship
where physical relationships formed between buyers and sellers.
Relationship types[edit]
Fajer and Schouten (1995) present the Typology of Loyalty-Ordered Person-Brand
Relationships as summarized below in the table.[2]
Lower-order relationships
Higher-order relationships
Potential friends / Casual friends Close friends / Best friends / Crucial friends
Brand trying / Brand liking
Multi-brand loyalty / Brand loyalty / Brand addiction
Later, Fournier (1998) provides a typology of 15 brand relationships derived
from phenomenological research[3]
Compartmentalized
friendships
Arranged
marriage
Rebounds
Dependencies
Secret affairs
Marriages of
convenience
Committed
partnerships
Best
friendships
Childhood
friendships
Flings
Kinships
Courtships
Enmities
Enslavement
Casual
friends/buddies
A more abstract typology is also supported that distinguishes exchange versus communal
relationships. Aggarwal provides a theory that distinguishes these two basic brand
relationship types according to the exchange norms that operate within them.
Hyun Kyung Kim, Moonkyu Lee, and Yoon Won Lee (2005) in their paper Developing a
Scale For Measuring Brand Relationship Quality present the following dimensions to
measure brand relationship quality.
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Self connective Attachment
Satisfaction
Behavioral Commitment
Trust
Emotional Intimacy
Relationship strength and the consumer-brand bond[edit]
Brand attachment[edit]
Many studies evoke the concept of brand love on Sternberg' triangular theory of love. Some
argue that brand love is similar to interpersonal love while others (e.g., Batra, Ahuvia, and
Bagozzi, 2012) state that "there are compelling reasons these conceptualizations of
interpersonal love should not be applied directly to brand love" (Batra, Ahuvia, and Bagozzi,
2012, p. 1). Some suggest brand love is more a parasocial love relationship.[4][5]
Multi-faceted strength notions are also recommended. Among these are Fournier's Brand
Relationship Quality index, which has seven facets:
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Love/Passion
Brand-Self Identity Connection
Brand-Social Other Communal connection
Commitment
Interdependence
Intimacy
Brand partner quality
Through an analysis conducted by Fournier (1998), a six faceted brand relationship quality
construct was drafted. There are dimensions in a relationship in which they all determine the
strength of a consumer-brand relationship, these dimensions include: love and passion, selfconnection, interdependence, commitment, intimacy, and brand partner quality.[6]
Love and passion is the essence of all strong brand relationships. It refers to the depth of the
emotional connection between that brand and the consumer.[6] There are many works about
brand love. Most notable is the one by Batra, Ahuvia, Bagozzi (2012).
Self-connection is the extent to which the brand conveys important identity concerns, tasks,
or themes, therefore communicates a significant aspect of self.[6] A strong brand relationship
is maintained by strong self-connections to the brand. This is due to the ever-growing
protective feelings of uniqueness, dependency, and encouragement of resilience in the face of
negative events.
Interdependence involves regular interactions between the brand and the consumer, increased
scope and diversity of brand-related actions, and the increased intensity of personal
experiences.
Commitment refers to the stability of the consumer's attitude towards the brand relationship,
and can be seen as the intention and dedication to the longevity of the relationship.[6]
Intimacy refers to how close the consumers feel with the brand, and also refers to the mutual
understanding and acceptance of both the brand and the consumer.[6]
Brand partner quality represents what the consumer thinks about the performance of the
brand in the relationship. The factors of this quality are trust, reliability, and expectation
fulfillment.
Brand community[edit]
When there is a group of people who have the same strong consumer-brand bond, it leads to
forming brand communities. A brand community is defined through four structures of
relationship. This includes the relationships between a consumer and a product, a brand, a
company, and other consumers/owners.[7] There are three traditional principles of
community; consciousness of kind, rituals and traditions, and a sense of moral.
Consciousness of kind is the underlying connection consumers feel towards each other, and
the mutual sense of difference from other consumers not in the community.[7] Next, rituals
and traditions are important in aiding the continuity of the community's meanings, history,
and culture.[7] And lastly, Stokburger-Sauer (2010) states that the community members feel a
sense of duty towards the community as a whole and also to the individual. Because brand
communities are communities with consumers who have a deep sense of responsibility to
their brand, they are essential factors of the brand they cherish. This is because even when
their brand is gaining negative publicity outside of the community, the brand community, if
the bond is strong enough, will still stand by their brand, and will maintain the brand's
attitude and meaning.[8]
Brand intimacy[edit]
Brand intimacy measures the level of emotional connection a brand has with its
customers.[9] Using the concept central to emotional branding that an emotional response, as
opposed to rational thought, dominates a customer’s buying choice, brand intimacy ascribes
a qualitative approach to the emotional connection between brand and customer.
Brand intimacy posits that customers who have strong brand intimacy with a given brand
have a powerful, positive emotional connection with that brand. More specifically, it
contends that in order for a brand to succeed, it must appeal and connect with a customer’s
emotions in a deep and meaningful way.[10][11]
Compared to Standard & Poor’s and the Fortune 500’s top brands, top intimate brands have
been shown to outperform in revenue and profit annually and also over a duration of time.[12]
The brand intimacy model analyzes the relationship a consumer has with a brand.[13] It is
described as having three different levels: sharing, bonding, and fusing,[14] each representing
an increasing level of trust and emotional attachment a customer has to a particular
brand.[15] Mario Natarelli and Rina Papler have written that the occurrence of brand intimacy
can be enhanced via the use archetypes to establish and maintain the emotional
connections.[16] The goal of brand intimacy is to create long-term purchasing relationships
between consumers and particular companies.[17]
Application to brands[edit]
Stages[edit]
Although emotional connection is necessary for brand intimacy, not every customer who has
formed an emotional connection with a brand necessarily reaches a stage of brand intimacy.
Instead, the forming of an intimate relationship between brand and customer (or user of a
brand) is often completed in a series of stages of increasing intimacy.[18]
These stages are:[citation needed]

1) Sharing. During the sharing stage, the brand user and brand engage with each other.
The user gains an understanding of the brand, its purpose and reputation; the brand also
gains an understanding of its user or audience base.[19]
 2) Bonding. During the bonding stage, the level of intimacy between user and brand
strengthens, with a level of acceptance and trust achieved between the two.[19]
 3) Fusing. During the fusing stage, the user and brand are strongly linked, to the point
that the emotional connection between the two takes on a form of mutual expression. At
this stage of brand intimacy, a brand has not only formed a part of the user’s daily
experience, the brand often provides a service that the user cannot live without.[20]
Archetypes[edit]
Six qualities or archetypes have been found to be present in brand intimate
relationships.[20] These archetypes are markers or characteristics that through research have
been found to be consistently present among intimate brands relationships:[citation needed]
1. Fulfillment. Exceed expectations.
2. Identity. The brand reflects an aspirational image or admired values that resonate
deeply with a user.
3. Enhancement. The brand succeeds in enhancing the user’s life by making them
smarter, more capable, and/or more connected.
4. Ritual. Ritual becomes stronger than habit,[20] with the brand becoming a ritualized
part of the user’s daily life.
5. Nostalgia. The brand succeeds in inspiring in the user past, positive memories and
associations of comfort.
6. Indulgence. In a brand intimate relationship, a brand is able to indulge the user
through pampering and gratification.
Findings[edit]
Brand intimacy has been studied in industries such as tech, retail, fast food, financial
services, automotive, and in both household and smaller brands. These studies have included
analysis at an industry level, as well as brand level. For each brand included in these studies,
the brand’s stages and archetypes of brand intimacy have also been analyzed. Studies of
brand intimacy have provided data and insight into how both industries and brands are
trending as far as their emotional connection with customers.[21][22][23]
Among brands, Apple has consistently scored the highest of all brands for brand
intimacy,[11][24] with Amazon and Disney also measuring competitively for brand
intimacy.[25] The level of brand intimacy has been shown to not be dependent on size or
recognition of brand.[26]
Outcomes[edit]
Positive brand relationship outcomes
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Word of mouth
Purchase intention
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Purchase behavior
Negative brand relationship outcomes
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Negative word of mouth
Public complaining
Brand avoidance
Brand divorce
Brand retaliation
Advertisers, for a long time, would spend more money on bringing in new customers rather
than on building up relationships they had with current customers, but this has changed
completely since then.[27] Now marketers are encouraged to reinforce consumer-brand
relationships, and is an ongoing important research topic for many reasons. Having this sort
of relationship produces many benefits for the company such as reduced marketing costs,
ease of access to customers, acquiring new customers, customer retention, brand equity, and
more profit.[27]
Brand relationships produce many outcomes, most of which are positive. The stronger the
consumer-brand relationships tend to be, the more likely it is to produce positive results for
all parties involved in the relationship, not just the company.[7] The customers' social needs
are satisfied through the relationships they have built and maintained with the brand, while
the brand gains adherence and advocacy from these consumers.[7] This loyalty or strong bond
with the customers is crucial for when the brand is subject to negative information or
negative publicity, as this negativity can be detrimental to the consumer-brand
relationship.[8] However, if the consumer-brand relationship is strong enough, it has the
capability to aid in the maintenance of the brand attitudes in light of the negative
information.[8]
There are gaps in what marketers know about negative relationships, which can cause
problems for brands.[28] The negative information consumers hear are more enduring,
diagnostic, and conspicuous, and also it is deeply processed in the mind, and is more likely to
be shared within social groups than positive information.[28] This would explain why some
strong positive brand relationships can readily turn into hateful, antagonistic associations.[28]
Brand loyalty
Brand loyalty is defined[by whom?] as positive feelings towards a brand and dedication
to purchase the same product or service repeatedly now and in the future from the same
brand, regardless of a competitor's actions or changes in the environment. It can also be
demonstrated with other behaviors such as positive word-of-mouth advocacy. Brand loyalty
is where an individual buys products from the same manufacturer repeatedly rather than from
other suppliers.[1] Businesses whose financial and ethical values, for
example ESG responsibilities, rest in large part on their brand loyalty are said[by whom?] to use
the loyalty business model.
Definition[edit]
Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or continue
to use the brand. It can be demonstrated by repeated buying of a product, service, or other
positive behaviors such as word of mouth advocacy.[2] This concept of a brand displays
imagery and symbolism for a product or range of products. Brands can have the power to
engage consumers and make them feel emotionally attached.[3] Consumer’s beliefs and
attitudes make up brand images, and these affect how they will view brands with which they
come into contact.[4] Brand experience occurs when consumers shop or search for, and
consume products.[5] Holistic experiences such as sense, relation, acting and feeling occur
when one comes into contact with brands. The stronger and more relational these senses are
to the individual, the more likely repeat purchase behavior will occur. After contact has been
made, psychological reasoning will occur, followed by a buy or not-buy decision. This can
result in repeat purchase behavior, thus incurring the beginning brand loyalty.[6] Brand loyalty
is not limited to repeat purchase behavior, as there is deeper psychological reasoning as to
why an individual will continuously re-purchase products from one brand. Brand loyalty can
be shortly defined as the "behavioral willingness" to consistently maintain relations with a
particular brand.[7] In a survey of nearly 200 senior marketing managers, 68 percent
responded that they found the "loyalty" metric very useful.[8]
True brand loyalty occurs when consumers are willing to pay higher prices for a certain brand
and go out of their way for the brand, or think highly of it.[9]
Purpose[edit]
Brand loyalty is a good measure for managers to use when trying to predict brand
performance outcomes. It also highlights the importance of marketing communication when
trying to promote a certain product that's not doing as well as other succeeding products.
Marketers are able to look at the patterns of brand loyalty and pick out characteristics that
make that product thrive.[10]
Examples of brand loyalty promotions
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My Coke Rewards
Pepsi Stuff
Marriott Rewards
Long term impact on business[edit]
Brand loyalty in marketing, consists of a consumer’s devotion, bond, and commitment to
repurchase and continue to use a brands product or service over time, regardless of changes
with competitors pricing or changes in the external environment. Brand loyalty reflects a
customer's commitment to remain in a relationship for a long period of time with a brand.[11]
A critical factor of building brand loyalty is developing a connection or relationship between
the consumer and the brand. When an emotional relationship is created between the consumer
and the brand this leads to a strong bond and a competitive advantage for that particular
brand. Loyalty consists of both attitudinal and behavioral components. Attitudinal loyalty
relates to the customers willingness to purchase product or service from the brand at any
reasonable cost. Behavioral loyalty is the re-purchasing. Both behavioral and attitudinal
components are important. One example is that a consumer displays behavioral loyalty by
buying Coke when there are few alternatives available and attitudinal loyalty when they will
not buy an alternative brand when Coke is not available. The attitudinal component is
psychological, this leads to the behavioural action of repeat purchase. It is the attitudinal
loyalty that drives most loyalty behavior and ensures loyalty over time not just with one
purchase. “Brand loyalty is desired by firms because retention of existing customers is less
costly than obtaining new ones. Firms profit from having loyal customers”.[12]
Benefits[edit]
Brand loyalty has shown to profit firms by saving them a lot of money. Benefits associated
with loyal consumers include:
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Acceptance of product extensions.
Defense from competitors cutting of prices.
Creating barriers to entry for firms looking to enter the market.
Competitive edge in market.
Customers willing to pay high prices.
Existing customers cost much less to serve.
Potential new customers.
Generally speaking, brand loyalty will increase profit over time as firms do not have to spend
as much time and money on maintaining relationships or marketing to existing consumers.
Loyal long-term customers spend more money with a firm.
Construction
Brand loyalty is more than simple repurchasing. Customers may repurchase a brand due to
situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of
convenience.[13] Such loyalty is referred to as "spurious loyalty".
A recent study[by whom?] showed that customer loyalty is affected by customer satisfaction, but
the association differs based on customer switching costs (procedural, relational, and
financial). True brand loyalty exists when customers have a high relative attitude toward the
brand which is then exhibited through repurchase behavior.[2] This type of loyalty can be a
great asset to the firm: customers are willing to pay higher prices, they may cost less to serve,
and can bring new customers to the firm.[14][15] For example, if Joe has brand loyalty to
Company A he will purchase Company A's products even if Company B's are cheaper and/or
of a higher quality. From the point of view of many marketers, loyalty to the brand — in
terms of consumer usage — is a key factor. However, companies often ensure that they are
not spending resources to retain loyal but unprofitable customers.[16]
Usage rate
Most important is usually the 'rate' of usage, to which the Pareto 80-20 Rule applies. Kotler's
'heavy users' are likely to be disproportionately important to the brand (typically, 20 percent
of users accounting for 80 percent of usage — and of suppliers' profit). As a result, suppliers
often segment their customers into 'heavy', 'medium' and 'light' users; as far as they can, they
target 'heavy users'. However, research shows that heavy users of a brand are not always the
most profitable for a company.[16]
Loyalty
A second dimension, is whether the customer is committed to the brand. Philip Kotler, again,
defines four status of loyalty:[17]
1.
2.
3.
4.
Hard-core Loyals - who buy the brand all the time.
Split Loyals - loyal to two or three brands.
Shifting Loyals - moving from one brand to another.
Switchers - with no loyalty (possibly 'deal prone', constantly looking for bargains or
'vanity prone', looking for something different). Again, research shows that customer
commitment is a more nuanced a fine-grained construct than what was previously
thought. Specifically, customer commitment has five dimensions, and some
commitment dimensions (forced commitment may even negatively impact customer
loyalty).
Psychological reasoning
Humans are attracted to certain brands due to each individual psychological make up.
Cognitive responses can be matched with brand personalities. Brand personalities are broken
down into 5 categories of traits: sincerity, ruggedness, competence, sophistication and
excitement.[4] Consumers are usually drawn to brands because the brand will strongly convey
one of these traits, and that trait will resonate in the individual consumers mind. These traits
are matched to the five psychological factors that the consumers are influenced by. These are
the perception, learning, motivation, and beliefs and attitudes.[4] In relation to brand loyalty,
the most important factors are beliefs and attitudes. A belief that one might hold can be based
on real knowledge, faith or opinion and have the ability to carry an emotional
charge.[4] Consumers use these beliefs to form a brand image in their minds, and marketers
try to either change or enhance people’s beliefs to draw them to their brand.[4] Marketers can
advertise messages such as ‘no added sugar’ and then if this statement resonates in the
consumers mind, they will believe that this brands beliefs matches theirs [4] Beliefs that
consumers hold against brands can also be false, as word of mouth, false advertising and so
forth can create false impressions. Marketers will try to counteract these negative beliefs so
the consumer feels like they hold similar beliefs as the brand. Attitudes can be based on brand
salience and accessibility.[18] Consumers make constant evaluations on every aspect of their
lives and these make up attitudes.[4] Ones attitude is usually difficult to change, so marketers
try to fit their brands and products into categorical attitudes.[4] Each time a consumer makes
contact with a brand (through advertising and promotion), they reflect on their attitudes to
make judgements and decisions about that particular brand.[18] If a person’s attitude coincides
with what a brand is trying to convey, the consumer will put the brand into a ‘liking’ category
in their mind. The consumer will then be more likely to increase involvement with this brand,
and because attitudes are difficult to change, the chances of brand loyalty occurring are
increased.
Other advertising techniques such as comparative advertising have shown to increase the
brand attitudes one might have.[18] When a brand praises a competitor, rather than using a
negative comparison, consumers are shown to have more positive brand attitudes, therefore
drawing them to the brand.[18] Brands may advertise themselves in ways that have nothing to
do with their product, but using emotional influences that they know the average consumer
will engage with. For example, using religion, world peace, love, death, children and many
more symbols that humans can feel sentimental about will attract consumers to their
brand [3] Through advertising, marketers are beginning to focus more on implicit emotional
messages, rather than the actual content or information about their brand.[19] Consumers take
notice of campaigns, and a wave effect can occur, due to the relational sense of the campaign
to the common persons emotions. Once an emotional hold has taken force, consumers are
more likely to be able to recall the brand than consumers who have been subject to a large
amount of content information.[19] Because of this increased level of recall, brand loyalty is
more likely to occur, as the brand name is resonating in the consumers mind due to a feeling
of emotional attachment.[3] Furthermore, consumers are willing to pay more for a product that
has a brand name that resonates with them emotionally.[3]
High VS Low Involvement Consumers[edit]
Buying decisions from consumers can be dependent on their level of involvement with the
product or brand. Brand loyalty can stem from whether the consumer is highly or lowly
involved with the brand. High involvement consumers interact with brands and products that
are important to them, are risky or expensive and products that people who are important to
the consumer have strong opinions on.[4] High Involvement consumers will usually progress
through complex buying behavior to decide whether they want to purchase a product whose
brand greatly differs from others. This involves gaining knowledge of the product,
specifications and attributes, and furthermore creating attitudes that lead to the buyer’s
decision.[4] Similarly, dissonance-reducing buying behavior occurs in the same situation, but
instead with brands they see little differences between.[4] This process consists of consumers
finding purchase convenience, attractive pricing, and shopping around. High involvement
consumers search for more product attributes and engage in more product related activities,
such as searching for more information on a product and researching the brands
background.[20] This engagement makes consumers aware and knowledgeable of the brands
attributes, so therefore they can shape behavioral brand loyalty, as the consumer feels that
they know the brand well.[20]
Low involvement consumers take on the habitual buying behavior or variety seeking
behavior.[4] These processes occur when a consumer is purchasing fast moving goods and
requires a low product involvement level.[4] Habitual behavior occurs when the consumer
doesn’t see large differences between brands; so therefore don’t search for information.
Consumers usually purchase on the basis of advertising or promotion creating
familiarity.[4] The attitudes formed by being exposed to advertisements and promotions are
what can cause brand loyalty to occur.[20] The limited amount of information processing and
lack of cognitive work done to assess each brand can mean that these consumers stick with a
brand simply because it is less work.[20] Low involvement consumers are using short-cut
evaluations so a known brand name that they haven’t thought deep enough to find faults in
will be an easy buy-decision for them. Habitual buying behavior can result in brand loyalty
subconsciously. The consumer isn’t actively aware they want to purchase repeatedly from a
particular brand, it is just in their habitual nature to do so.[4] Alternatively, low involvement
consumers who are using variety seeking behavior see differences between brands and tend
to do a lot of switching.[4] To attempt to persuade these consumers into habitual buying
behavior, marketers will try to dominate shelf space, cut prices or introduce new
products.[4] If a low involvement consumer continues to use variety-seeking behavior, brand
loyalty is unlikely to be established.
Factors influencing brand loyalty
It has been suggested[who?] that loyalty includes some degree of predisposition toward a brand.
Brand loyalty is viewed as multidimensional construct. It is determined by several distinct
psychological processes, and it entails multivariate measurements. Customer perceived value,
brand trust, customer satisfaction, repeat purchase behavior, and commitment are found to be
the key influencing factors of brand loyalty. Commitment and repeated purchase behavior are
considered as necessary conditions for brand loyalty followed by perceived value,
satisfaction, and brand trust.[21]
Fred Reichheld,[22] one of the most influential writers on brand loyalty, claimed that
enhancing customer loyalty could have dramatic effects on profitability. However, new
research shows that the association between customer loyalty and financial outcomes such as
firm profitability and stock-market outcomes is not as straightforward as was once
believed.[23] Many firms overspend on customer loyalty, and then do not reap the intended
benefits. Among the benefits from brand loyalty — specifically, longer tenure or staying as a
customer for longer — was said to be lower sensitivity to price. This claim had not been
empirically tested until recently. Recent research[24] found evidence that longer-term
customers were indeed less sensitive to price increases. Byron Sharp showed empirically that
behavior affects attitudinal response not the other way round. Longer term customers are less
sensitive because it is harder for them to completely stop using the brand.[25]
An organizations ability to attract and retain customers is vital to its success. Customer
loyalty requires a strong appetite by the customer for a product. Marketing tools such as
integrated marketing communications (IMC) and branding can be used in ways to increase
perceived attraction between the consumer and the brand. These tools are used to boost
emotional response and attachment to the brand, as well as to influence feelings the customer
has for a brand, both are important for congruency and a relationship, this in turn leads to the
development of brand loyalty. Relationship development and maintenance can also be
achieved through the use of loyalty programs or a celebrity endorser. These can help to
increase a bond between a brand and a consumer.[26]
IMC is defined as “integrating a variety of convincing messages across various forms to
communicate with and develop relationships with customers”.[27] IMC can be used to convey
the brand image, increase awareness, build brand equity, and achieve shared values between
the consumer and the brand.
IMC and brand loyalty[edit]
IMC and branding are both relevant marketing tools for increasing the brand loyalty of
consumers. The decisions made around communications and branding should be based on
solid and factual market research about the consumers. If the brand or the IMC do not seem
to be relevant to the target market, consumers will not pay attention. An example of this is
that high customization, creativity and a more direct voice is recommended for messages
directed towards generation Y consumers as generation Y want to be treated differently from
the rest of the market and marketers should acknowledge this.[28]
Loyalty programs help to reward and encourage customers, which is a necessary factor for
customers to want to repurchase. The consumer should feel a connection with the brand to
want repeat purchase and portray other brand loyalty behaviors such as positive word of
mouth. “A loyalty program is an integrated system of marketing actions that aims to make
member customers more loyal to a brand”.[12] The main goal of a loyalty program is to create
or enhance customer loyalty towards a brand whilst being sustained even after a loyalty
program is discontinued. Thus, to an extent a loyalty program motivates customers to change
their behavior.[12]
The reason for marketers to use such tactics as a loyalty program is to increase likelihood of
repeat purchase and retrieve vital information about the spending habits of the consumer.
Loyalty programs that enhance the consumer’s opinion about how much the firm can offer
them may be essential for building a relationship. Even though these programs can cost a lot
of money, they help to create a relationship between the brand and the consumer.[12] An
example of a loyalty program is a simple point system. Frequent customers earn points or
dollars, which transform into freebies, discounts, rewards or special treatment of some sort,
customers work toward a specific number of points to redeem their benefit.[29]
Celebrity endorsers moderate the relationship between the consumer and the brand by
personifying the brand to match the perceptions of the consumer themself. Using a celebrity
endorser can facilitate a relationship built between consumers and a brand because endorsers
can represent similarities between themselves and the consumer, and themselves and the
brand. Celebrities are used to make marketing tactics more convincing and marketing
communications more effective.[27]
An example is that a celebrity may be influential to a generation Y consumer because that
generation views them as likeable, real and beautiful. In order for celebrity endorsers to
effectively reach the audience, they must connect and identify with the audience.[30] The use
of a popular celebrity endorser could personalize the brand for the consumer and create the
relationship between the consumer and the brand. To ensure endorsement is successful the
celebrity should match the brand and the consumer.[31] The effect of using a celebrity
endorser that consumers look up to and want to emulate can lead to increased congruence
between the values of the consumers and the brand, and improve the relationship between the
two.
Industrial markets
In industrial markets, organizations regard the 'heavy users' as 'major accounts' to be handled
by senior sales personnel and even managers; whereas the 'light users' may be handled by the
general sales force or by a dealer.
Portfolios of brands
Andrew Ehrenberg, then of the London Business School said that consumers buy 'portfolios
of brands'. They switch regularly between brands, often because they simply want a change.
Thus, 'brand penetration' or 'brand share' reflects only a statistical chance that the majority of
customers will buy that brand next time as part of a portfolio of brands they prefer. It does
not guarantee that they will stay loyal.
Influencing the statistical probabilities facing a consumer choosing from a portfolio of
preferred brands, which is required in this context, is a very different role for a brand
manager; compared with the — much simpler — one traditionally described of recruiting and
holding dedicated customers. The concept also emphasizes the need for managing continuity.
Brand management
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In marketing, brand management is the analysis and planning on how a brand is perceived in
the market. Developing a good relationship with the target market is essential for brand
management. Tangible elements of brand management include the product itself; its look,
price, and packaging, etc. The intangible elements are the experiences that the consumers
share with the brand, and also the relationships they have with the brand. A brand manager
would oversee all aspects of the consumer's brand association as well as relationships with
members of the supply chain.[1]
Branding terminology[edit]
Brand associations refers to a set of information nodes held in memory that form a network of
associations and are linked to a key variable. For example, variables such as brand image,
brand personality, brand attitude, brand preference are nodes within a network that describes
the sources of brand-self congruity. In another example, the variables brand
recognition and brand recall form a linked network that describes the consumer's brand
awareness or brand knowledge.[43]
Brand attitude refers to the "buyer's overall evaluation of a brand with respect to its perceived
ability to meet a currently relevant motivation." [44]
Brand awareness refers to the extent to which consumers can identify a brand under various
conditions.[45] Marketers typically identify two distinct types of brand awareness;
namely brand recognition and brand recall.[46]
Brand equity Within the literature, it is possible to identify two distinct definitions of brand
equity. Firstly an accounting definition suggests that brand equity is a measure of the
financial value of a brand and attempts to measure the net additional inflows as a result of the
brand or the value of the intangible asset of the brand.[47] A different definition comes from
marketing where brand equity is treated as a measure of the strength of consumers'
attachment to a brand; a description of the associations and beliefs the consumer has about
the brand.[48]
Brand image refers to an image an organisation wants to project;[49] a psychological meaning
or meaning profile associated with a brand.[50]
Brand personality refers to "the set of human personality traits that are both applicable to and
relevant for brands."[51]
Self-brand congruity draws on the notion that consumers prefer brands with personalities that
are congruent with their own; consumers tend to form strong attachments with brands where
the brand personality matches their own.[52]
Brand preference refers to "consumers' predisposition towards certain brands that summarise
their cognitive information processing towards brand stimuli."[53]
Branding strategies[edit]
Further information: Brand management
Company name[edit]
Often, especially in the industrial sector, brand engineers will promote a company's name.
Exactly how the company name relates to product and services names forms part of a brand
architecture. Decisions about company names and product names and their relationship
depend on more than a dozen strategic considerations.[102]
In this case, a strong brand-name (or company name) becomes the vehicle for marketing a
range of products (for example, Mercedes-Benz or Black & Decker) or a range of subsidiary
brands (such as Cadbury Dairy Milk, Cadbury Flake, or Cadbury Fingers in the UK).
Corporate name-changes offer particularly stark examples of branding-related
decisions.[103] A name change may signal different ownership or new product
directions.[104] Thus the name Unisys originated in 1986 when Burroughs bought and
incorporated UNIVAC; and the newly-named International Business Machines represented a
broadening of scope in 1924 from its original name, the Computing-Tabulating-Recording
Company. A change in corporate naming may also have a role in seeking to shed an
undesirable image: for example, Werner Erhard and Associates re-branded its activities
as Landmark Education in 1991 at a time when publicity in a 60 Minutes investigative-report
broadcast cast the est and Werner Erhard brands in a negative light,[105] and Union Carbide
India Limited became Eveready Industries India in 1994 subsequent to the Bhopal disaster of
1984
Individual branding[edit]
Main article: Individual branding
Each brand has a separate name (such as Seven-Up, Kool-Aid, or Nivea Sun (Beiersdorf)),
which may compete against other brands from the same company (for example, Persil,
Omo, Surf, and Lynx are all owned by Unilever).
Challenger brands[edit]
Main article: Challenger brand
A challenger brand is a brand in an industry where it is neither the market leader nor a niche
brand. Challenger brands are categorised by a mindset which sees them have business
ambitions beyond conventional resources and an intent to bring change to an industry.
Multiproduct branding strategy[edit]
Multiproduct branding strategy is when a company uses one name across all their products in
a product class. When the company's trade name is used, multiproduct branding is also
known as corporate branding, family branding or umbrella branding. Examples of companies
that use corporate branding are Microsoft, Samsung, Apple, and Sony as the company's brand
name is identical to their trade name. Other examples of multiproduct branding strategy
include Virgin and Church & Dwight. Virgin, a multination conglomerate uses the punk
inspired, handwritten red logo with the iconic tick for all its products ranging from airlines,
hot air balloons, telecommunication to healthcare. Church & Dwight, a manufacturer of
household products displays the Arm & Hammer family brand name for all its products
containing baking soda as the main ingredient. Multiproduct branding strategy has many
advantages. It capitalises on brand equity as consumers that have a good experience with the
product will in turn pass on this positive opinion to supplementary objects in the same
product class as they share the same name. Consequently, the multiproduct branding strategy
makes product line extension possible.
Product line extension[edit]
Main article: Product line extension
Product line extension is the procedure of entering a new market segment in its product class
by means of using a current brand name. An example of this is the Campbell Soup Company,
primarily a producer of canned soups. They utilize a multiproduct branding strategy by way
of soup line extensions. They have over 100 soup flavours putting forward varieties such as
regular Campbell soup, condensed, chunky, fresh-brewed, organic, and soup on the go. This
approach is seen as favourable as it can result in a lower promotion costs and advertising due
to the same name being used on all products, therefore increasing the level of brand
awareness. Although, line extension has potential negative outcomes with one being that
other items in the company's line may be disadvantaged because of the sale of the extension.
Line extensions work at their best when they deliver an increase in company revenue by
enticing new buyers or by removing sales from competitors.
Subbranding[edit]
Main article: Subbranding
Subbranding is used by certain multiproduct branding companies. Subbranding merges a
corporate, family or umbrella brand with the introduction of a new brand in order to
differentiate part of a product line from others in the whole brand system. Subbranding assists
to articulate and construct offerings. It can alter a brand's identity as subbranding can modify
associations of the parent brand. Examples of successful subbranding can be seen
through Gatorade and Porsche. Gatorade, a manufacturer of sport-themed food and beverages
effectively introduced Gatorade G2, a low-calorie line of Gatorade drinks. Likewise, Porsche,
a specialised automobile manufacturer successfully markets its lower-end line, Porsche
Boxster and higher-end line, Porsche Carrera.
Brand extension[edit]
Main article: Brand extension
Brand extension is the system of employing a current brand name to enter a different product
class. Having a strong brand equity allows for brand extension. Nevertheless, brand extension
has its disadvantages. There is a risk that too many uses for one brand name can oversaturate
the market resulting in a blurred and weak brand for consumers. Examples of brand extension
can be seen through Kimberly-Clark and Honda. Kimberly-Clark is a corporation that
produces personal and health care products being able to extend the Huggies brand name
across a full line of toiletries for toddlers and babies. The success of this brand extension
strategy is apparent in the $500 million in annual sales generated globally. Similarly, Honda
using their reputable name for automobiles has spread to other products such as motorcycles,
power equipment, engines, robots, aircraft, and bikes.
Co-branding[edit]
Main article: Co-branding
Co-branding is a variation of brand extension. It is where a single product is created from the
combining of two brand names of two manufacturers. Co-branding has its advantages as it
lets firms enter new product classes and exploit a recognized brand name in that product
class. An example of a co-branding success is Whitaker's working with Lewis Road
Creamery to create a co-branded beverage called Lewis Road Creamery and Whittaker's
Chocolate Milk. This product was a huge success in the New Zealand market with it going
viral.
Multibranding strategy[edit]
Multibranding strategy is when a company gives each product a distinct name. Multibranding
is best used as an approach when each brand in intended for a different market segment.
Multibranding is used in an assortment of ways with selected companies grouping their
brands based on price-quality segments. Procter & Gamble (P&G), a multinational consumer
goods company that offers over 100 brands, each suited for different consumer needs. For
instance, Head & Shoulders that helps consumers relieve dandruff in the form of a
shampoo, Oral-B which offers inter-dental products, Vicks which offers cough and cold
products, and Downy which offers dryer sheets and fabric softeners. Other examples
include Coca-Cola, Nestlé, Kellogg's, and Mars.
This approach usually results in higher promotion costs and advertising. This is due to the
company being required to generate awareness among consumers and retailers for each new
brand name without the benefit of any previous impressions. Multibranding strategy has
many advantages. There is no risk that a product failure will affect other products in the line
as each brand is unique to each market segment. Although, certain large multiband
companies have come across that the cost and difficulty of implementing a multibranding
strategy can overshadow the benefits. For example, Unilever, the world's third-largest
multination consumer goods company recently streamlined its brands from over 400 brands
to centre their attention onto 14 brands with sales of over 1 billion euros. Unilever
accomplished this through product deletion and sales to other companies. Other multibrand
companies introduce new product brands as a protective measure to respond to competition
called fighting brands or fighter brands.
Fighting brands[edit]
Main article: Fighter brand
The main purpose of fighting brands is to challenge competitor brands. For example, Qantas,
Australia's largest flag carrier airline, introduced Jetstar to go head-to-head against the lowcost carrier, Virgin Australia (formerly known as Virgin Blue). Jetstar is an Australian lowcost airline for budget conscious travellers, but it receives many negative reviews due to this.
The launching of Jetstar allowed Qantas to rival Virgin Australia without the criticism being
affiliated with Qantas because of the distinct brand name.
Private branding strategy[edit]
Main article: Store brand
Private branding (also known as reseller branding, private labelling, store brands, or own
brands) have increased in popularity. Private branding is when a company manufactures
products but it is sold under the brand name of a wholesaler or retailer. Private branding is
popular because it typically produces high profits for manufacturers and resellers. The pricing
of private brand product are usually cheaper compared to competing name brands.
Consumers are commonly deterred by these prices as it sets a perception of lower quality and
standard but these views are shifting.[citation needed]
In Australia, their leading supermarket chains, both Woolworths and Coles are saturated with
store brands (or private labels). For example, in the United States, Paragon Trade
Brands, Ralcorp Holdings, and Rayovac are major suppliers of diapers, grocery products, and
private label alkaline batteries, correspondingly. Costco, Walmart, RadioShack, Sears,
and Kroger are large retailers that have their own brand names. Similarly, Macy's, a midrange chain of department stores offers a wide catalogue of private brands exclusive to their
stores, from brands such as First Impressions which supply newborn and infant clothing,
Hotel Collection which supply luxury linens and mattresses, and Tasso Elba which supply
European inspired menswear. They use private branding strategy to specifically target
consumer markets.
Mixed branding strategy[edit]
Mixed branding strategy is where a firm markets products under its own name(s) and that of a
reseller because the segment attracted to the reseller is different from its own market. For
example, Elizabeth Arden, Inc., a major American cosmetics and fragrance company, uses
mixed branding strategy. The company sells its Elizabeth Arden brand through department
stores and line of skin care products at Walmart with the "skin simple" brand name.
Companies such as Whirlpool, Del Monte, and Dial produce private brands of home
appliances, pet foods, and soap, correspondingly. Other examples of mixed branding strategy
include Michelin, Epson, Microsoft, Gillette, and Toyota. Michelin, one of the largest tire
manufacturers allowed Sears, an American retail chain to place their brand name on the tires.
Microsoft, a multinational technology company is seriously regarded as a corporate
technology brand but it sells its versatile home entertainment hub under the brand Xbox to
better align with the new and crazy identity. Gillette catered to females with Gillette for
Women which has now become known as Venus. The launch of Venus was conducted in
order to fulfil the feminine market of the previously dominating masculine razor industry.
Similarly, Toyota, an automobile manufacturer used mixed branding. In the U.S., Toyota was
regarded as a valuable car brand being economical, family orientated and known as a vehicle
that rarely broke down. But Toyota sought out to fulfil a higher end, expensive market
segment, thus they created Lexus, the luxury vehicle division of premium cars.
Positioning (marketing)
Positioning refers to the place that a brand occupies in the minds of the customers and how it
is distinguished from the products of the competitors. In order to position products or brands,
companies may emphasize the distinguishing features of their brand (what it is, what it does
and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian
or luxurious, entry-level or high-end, etc.) through the marketing mix. Once a brand has
achieved a strong position, it can become difficult to reposition it.
Positioning is one of the most powerful marketing concepts. Originally, positioning focused
on the product and with Ries and Trout grew to include building a product's reputation and
ranking among competitor's products. Schaefer and Kuehlwein extend the concept beyond
material and rational aspects to include 'meaning' carried by a brand's mission or
myth.[1] Primarily, positioning is about "the place a brand occupies in the mind of its target
audience".[2][3] Positioning is now a regular marketing activity or strategy. A national
positioning strategy can often be used, or modified slightly, as a tool to accommodate
entering into foreign markets.[2][4]
The origins of the positioning concept are unclear. Scholars suggest that it may have emerged
from the burgeoning advertising industry in the period following World War I, only to be
codified and popularised in the 1950s and 60s. The positioning concept became very
influential and continues to evolve in ways that ensure it remains current and relevant to
practising marketers.
Definitions[edit]
David Ogilvy noted that while there was no real consensus as to the meaning of positioning
among marketing experts, his definition is "what a product does, and who it is for". For
instance, Dove has been successfully positioned as bars of soap for women with dry hands,
vs. a product for men with dirty hands.[5]
Ries and Trout advanced several definitions of positioning. In an article, Industrial
Marketing, published in 1969, Jack Trout stated that positioning is a mental device used by
consumers to simplify information inputs and store new information in a logical place. He
said this is important because the typical consumer is overwhelmed with unwanted
advertising, and has a natural tendency to discard all information that does not immediately
find a comfortable (and empty) slot in their mind.[6] In Positioning: The Battle for Your
Mind, the duo expanded the definition as "an organized system for finding a window in the
mind. It is based on the concept that communication can only take place at the right time and
under the right circumstances".[7]
Positioning is closely related to the concept of perceived value. In marketing, value is defined
as the difference between a prospective customer's evaluation of the benefits and costs of one
product when compared with others. Value can be expressed in numerous forms including
product benefits, features, style, value for money.[8]
Strategies[edit]
Hungry Jack's slogan uses superlative positioning to imply that its burgers are "better" than
the market leader
J & J Baby Bath Products are positioned against a user or segment, namely children
Haigh's Chocolates stopped making chocolate Easter bunnies, replacing them with Easter
bilbies as culturally appropriate symbol of Easter in Australia
To be successful in a particular market a product must occupy an "explicit, distinct and
proper place in the minds of all potential and existing consumers".[34] It has to also be relative
to other rival products with which the brand competes.[34] This may require considerable
research of customer perceptions and competitor activity in order to ensure that the points of
difference are meaningful in the minds of customers. Perceptual mapping (discussed below)
is often used for this type of research.
Visibility and recognition is what product positioning is all about as the positioning of a
product is what the product represents for a buyer the business is targeting. As markets
become increasingly competitive, buyer have more purchase choices, and the process of
setting one brand apart from rival brands is critical success factor.[34] It is vital that a product
or service needs to have a clear identity and placement to the needs of the consumers targeted
as they will not only purchase the product, but can warrant a larger margin for the company
through increased added value.[34]
A number of different positioning strategies have been cited in the marketing literature:[35]
Approaches
Example
Preemptive positioning
Smith's Chips - the original and still the best
(Being the first to claim a benefit or
feature)
Superlative positioning
(Being the best or exhibiting some type
of superiority)
The burgers are better at Hungry Jack's
Exclusive positioning
(Being a member of an exclusive club
or group)
Positioning within a category
(Strong registration of both category
and brand)
XYZ Ltd - a Fortune 500 company
Within the prestige car category, Volvo is the safe
alternative
Positioning by competitor strategy
(Use competitor's strategy as a reference
point)
Positioning according to product
benefit(s)
(Emphasize a problem, need or benefit
where the firm
can offer superior satisfaction)
Positioning according to product
attribute
Positioning for usage occasion
(Can be associated with seasonal
products)
Avis - we're number two, so we try harder
Toothpaste with whitening, tartar control or
enamel protection
(or multiple benefits)
Dove is one-quarter moisturiser
Cadbury Roses Chocolates—for gift giving or
saying, 'Thank-you'
Positioning along price lines
A premium brand or an economy brand
Positioning for a user or user group
Johnson & Johnson range of baby products (e.g.,
No Tears Shampoo)
Positioning by cultural symbols
Australia's Easter Bilby (as a culturally appropriate
alternative to
the Easter Bunny) used as the shape of Easter
chocolates
Repositioning[edit]
The right positioning strategy at the right time can help a brand build a powerful image in the
mind of consumer(s).[43] From time to time, the current positioning strategy fails to resonate.
This could be due to new market entrants, changed customer preferences, structural change
within the target market (such as ageing, segment creep) or simply that customers have
forgotten about a brand and its position. When this happens, the company may need to
consider a number of options:[44]
* Strengthen current positioning: reinforce the concepts of features that led to
customers adopting a favourable view in the first instance
* Establish a new position: look for suitable niches where customers are
underserviced and occupy that space
* Reposition (or de-position): change the way customers think about the product or
brand, usually through comparative advertising
Repositioning involves a deliberate attempt to alter the way that consumers view
a product or brand. Repositioning can be a high risk strategy, but sometimes there
are few alternatives.[45]
Fishbein and Rosenberg's attitude models[3][46] indicate that it is possible for a
business to influence and change the positioning of the brand by manipulating
various factors that will affect a consumer's attitude. Research on persons'
attitudes suggests that a brand's position in a prospective consumer's mind is
likely to be determined by the "combined total of a number of product
characteristics such as the price, quality, durability, reliability, colour, and
flavour".[3] The consumer places important weights on each of these product
characteristics and it can be possible by using things such as promotional efforts
to realign the weights of price, quality, durability, reliability, colour and flavour
of which can then help adjust the position of a brand in the mind of the
prospective consumer.[3][46] Companies engaging in repositioning can choose to
downplay some points of difference and emphasise others.
Point of difference vs. point of parity[edit]
Points of difference and points of parity are both utilized in the positioning of
a brand for competitive advantage via brand/product.
Points-of-difference (PODs) – Attributes or benefits consumers strongly associate with a
brand, positively evaluate and believe they could not find to the same extent with a
competing brand i.e. points where you are claiming superiority or exclusiveness over other
products in the category.
Points-of-parity (POPs) – Associations that are not necessarily unique to the brand but may
be shared by other brands i.e. where you can at least match the competitors claimed best.
While POPs may usually not be the reason to choose a brand, their absence can certainly be a
reason to drop a brand.
While it is important to establish a POD, it is equally important to nullify the competition by
matching them on the POP. As a late entrant into the market, many brands look at making the
competitor's POD into a POP for the category and thereby create a leadership position by
introducing a new POD.
POP refers to the way in which a company’s product offers similarity with its competitors
within an industry. It could also be known as the elements that are considered mandatory for
a brand to be recognized as a legitimate competitor within a given industry.
As an excessive degree of differentiation would cause the goods or services losing its
standard, but not having differentiation would not benefit businesses as well. Therefore, in
order to avoid excessive differentiation, adopting point of parity would be the solution. In
terms of offering similarities, businesses should look at the benefits and all the positive
features of the competitor’s product, and take advantage from it. At the same time, businesses
could work on the negative aspects or even further enhance the positive features of the
particular product in order to achieve differentiation, and to take advantage from it.
Therefore, finding a balance between point of difference and point of parity is a critical factor
for businesses to succeed.[5]
Kevin Keller and Alice Tybout[6] note there are three types of difference: brand performance
associations; brand imagery associations; and consumer insight associations. The last only
comes into play when the others are at parity. Insight alone is a weak point of difference,
easily copied. Putting these together, check their desirability, deliverability and eliminate
contradictions.
Traditionally, the people responsible for positioning brands have concentrated on the
differences that set each brand apart from the competition. But emphasizing differences isn't
enough to sustain a brand against competitors. Managers should also consider the frame of
reference within which the brand works and the features the brand shares with other products.
Three questions about a brand can help:
1. Have we established a frame? A frame of reference signals to consumers the goal they
can expect to achieve by using a brand.
2. Are we leveraging our points of parity? Certain points of parity must be met if
consumers are to perceive your product as a legitimate player within its frame of
reference.
3. Are the points of difference compelling? A distinguishing characteristic that
consumers find both relevant and believable can become a strong, favourable, unique
brand association, capable of distinguishing the brand from others in the same frame
of reference.
Assessment[edit]
The assessment of consumer desirability criteria for PODs should be against:



Relevance
Distinctiveness
Deliverability
Whilst when assessing the deliverability criteria for PODs look at their:



Feasibility
Communicability
Sustainability
Differentiation types[edit]
Product differentiation[edit]
In order to achieve product differentiation, that particular product needs to have other unique
features and stands out from its competing products, or that particular product becomes the
only product that offers certain features to consumers by entering a new industry. Achieving
product differentiation is one of the ways for businesses to become the market leader.
However, if the product differentiation were too radical, it would lead to acceptance problems
on the consumer side, because the product might not meet the expected standards, or it could
be quickly obsolete.[7] Products can be differentiated in form, features, performance quality,
conformance quality, durability, reliability, repairability, style and customization. [8]
Price differentiation[edit]
Price differentiation is where a business offers a different price (lower or higher) from the
industry’s standard or its competitors. By offering a lower price, it would attract consumers to
purchase, as their demand is likely to be higher, when the price is lower. In terms of offering
a higher price, it also has the effect of drawing the attention from consumers, as consumers
would wonder the reason behind it, and higher price product tends to be more appealing to
the upper class group. However, in order to take advantage from offering a higher price, the
quality of the product has to match the price, otherwise, consumers would lose interests
because of not getting what they pay for.[9]
Differentiation focus[edit]
The principles of differentiation focus are similar to all the other differentiation strategies,
where it differentiates some of the features from the competitors. However, differentiation
focus targets a particular segment within a market, where it allows businesses to focus on
their strength. Thus, the user experience of the particular segment would be better, as all the
marketing and pre-production work of the goods or services are focused on specific segment.
Brand architecture
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In the field of brand management, brand architecture is the structure of brands within
an organizational entity. It is the way in which the brands within a company's portfolio are
related to, and differentiated from, one another. The brand architecture should[according to
whom?]
define the different leagues of branding within the organization; how the corporate
brand and sub-brands relate to and support each other; and how the sub-brands reflect or
reinforce the core purpose of the corporate brand to which they belong. Often, decisions
about brand architecture are concerned with how to manage a parent brand and a family of
sub-brands – managing brand architecture to maximize shareholder value can
often[quantify] include using brand-valuation model techniques.
One may regard the architecting of a brand architecture as an integrated process of brand
building through establishing brand relationships among branding options in the competitive
environment.[citation needed] The brand architecture of an organization at any time is, in large
measure, a legacy of past management decisions as well as of the competitive realities brands
face in the marketplace.
Types[edit]
There are three key levels of branding:



Corporate brand, umbrella brand, and family brand – Examples include Virgin
Group and Heinz. These are consumer-facing brands used across all the firm's activities,
and this name is how they are known to all their stakeholders – consumers, employees,
shareholders, partners, suppliers and other parties. These brands may also be used in
conjunction with product descriptions or sub-brands: for example Heinz Cream of
Tomato Soup, or Virgin Trains.
Endorsed brands, and sub-brands – For example, Nestle KitKat, Cadbury Dairy
Milk, Sony PlayStation or Polo by Ralph Lauren. These brands include a parent brand –
which may be a corporate brand, an umbrella brand, or a family brand – as an
endorsement to a sub-brand or an individual, product brand. The endorsement should add
credibility to the endorsed sub-brand in the eyes of consumers.
Individual product brand – For example, Procter &
Gamble’s Pampers or Unilever's Dove. The individual brands are presented to
consumers, and the parent company name is given little or no prominence. Other
stakeholders, like shareholders or partners, will know the producer by its company name.
Procter & Gamble is quoted by many authors as the antithesis of a corporate brand (Asberg
and Uggla, Muzellec and Lambkin, Olins).[2][3] "However, this situation changed in 2012.
After more than 150 years of invisibility of the organization for consumer, the brand
developed corporate brand promise during the 2012 Olympic games. Commercials are aired
on television around a message thanking all the "moms". In addition, each of their products is
associated with the brand "PG" in advertisements for products.
A recent example of brand architecture in action [4] is the reorganization of the General
Motors brand portfolio to reflect its new strategy. Prior to bankruptcy, the company pursued a
corporate-endorsed hybrid brand architecture structure, where GM underpinned every brand.
The practice of putting the "GM Mark of Excellence" on every car, no matter what the brand,
was discontinued in August, 2009.[5] In the run-up to the IPO, the company adopted a
multiple brand corporate invisible brand architecture structure.[6] The company's familiar
square blue "badge" has been removed from the Web site and advertising, in favor of a new,
subtle all-text logo treatment.[4]
Types of brands[edit]
Ambassador Brands Those brands that reflect the image of the company are Ambassador
Brands. Success or Failure of these brands affect the favorable or unfavorable opinion
respectively, of the company. E.g.: Colgate toothpaste, the market leader in toothpaste
segment in India, can be rightly called Ambassador brand.
Piggyback Brands The nature of these brands is to live on other brands. They are not profit
generators but build their image and gain mileage by riding on the back of these brands. E.g.:
Colgate toothbrush is a piggyback brand which survives on the back of Colgate Toothpaste.
Budget Brands These brands signify those that are welcomed in every home. They do not
lower the status of the upper-middle-class families as well as are affordable by the lower-
class homes too. E.g.: Cibaca toothpaste can be described as budget brand which is mainly
targeted in rural areas of India.
Strategic considerations[edit]
Structuring a company brand portfolio can involve choosing a strategy based upon a number
of variables, including the business strategy, market trends, competitive tactics, and sources
of growth and profit.[7] Often marketing mix modeling is used to help understand the role of
brands in a portfolio, and how they support or cannibalize one another. A strong parent brand
can be leveraged across multiple sub-brands to help maximize Return on Marketing
Investment. Managing brand architecture to maximize shareholder value can often include
using brand valuation model techniques.
What Is a Brand Portfolio?
Many popular brands are actually part of larger brands. One popular brand owned and
operated by a larger brand is Quaker Oats, which was acquired by PepsiCo in 2001.
Although a soft drink company operating a brand known for oatmeal and other breakfast
products might not initially seem logical, doing so can actually be a savvy business move.
Operating multiple, diverse brands as a business strategy is known as the brand portfolio
strategy.
Brand Portfolio Model Advantages
Building a brand portfolio has numerous advantages. These include:




Getting a company into many different markets
Connecting with diverse consumer markets
Making cross-promotion between brands simple
Building newer brands’ credibility by associating them with established brands
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Many popular brands are actually part of larger brands. One popular brand owned and
operated by a larger brand is Quaker Oats, which was acquired by PepsiCo in 2001.
Although a soft drink company operating a brand known for oatmeal and other breakfast
products might not initially seem logical, doing so can actually be a savvy business move.
Operating multiple, diverse brands as a business strategy is known as the brand portfolio
strategy.
A brand portfolio is a collection of distinct brands operating under one larger corporate
umbrella. While each of these brands maintains its own operational structure, they benefit
from shared resources and cross-promotional opportunities with other brands in the
portfolio.
Brand Portfolio Model Advantages
Building a brand portfolio has numerous advantages. These include:




Getting a company into many different markets
Connecting with diverse consumer markets
Making cross-promotion between brands simple
Building newer brands’ credibility by associating them with established brands
However, there are a few potential drawbacks to building a brand portfolio. Adding new
brands to a portfolio can divert time, money and other resources from existing brands,
causing resources to be spread too thin to be effective in any brand. A key part of brand
portfolio analysis is determining whether the advantages of acquiring new brands to a
portfolio will outweigh the potential drawbacks of doing so. Purchasing an existing brand is
expensive, as is rebranding it to make it fit the market’s needs better.
Brand Portfolio Models
There are two types of brand portfolio model. One is the House of Brands model and the
other is the Branded House model.
Under the House of Brands model, the brands within a portfolio are distinct from each other
and operate independently. In many cases, consumers might not even realize that two
brands are part of the same portfolio because there is little or no mention of their shared
ownership in their publicly available materials. Nestle uses the House of Brands model;
globally, the company operates more than 2,000 distinct brands, including DiGiorno frozen
pizza and Purina pet foods.
Under the Branded House model, every brand within a portfolio retains a connection to the
primary brand while operating as its own brand. An example of a company that uses the
Branded House model is Federal Express, which operates FedEx Ground, FedEx Freight,
FedEx Office, FedEx Trade Networks and FedEx Express.
Blended Brand Portfolio Strategy
Some companies use a mixture of the two recognized brand portfolio models. This model is
sometimes known as the Hybrid House model and despite many considering Nestle to use
the House of Brands model, certain brands within the Nestle house do bear the primary
company’s name. These include Nestle Toll House and Nestle Crunch and with these
brands in mind, some consider Nestle’s strategy more of a hybrid than a true House of
Brands strategy.
Another famous company that uses the Hybrid House model is Microsoft. Although
Microsoft operates numerous brands under its name, like Microsoft Office and Microsoft
Azure, it also operates the more independent Xbox brand.
Developing a Brand Portfolio Strategy
Regular brand portfolio analysis is necessary for any company to successfully operate
multiple brands. Brand portfolio analysis is more than assessing how each of a company’s
brands is performing; it requires regular assessment of the markets in which the company
operates and those it would be strategic for the company to expand into. When PepsiCo
acquired Quaker Oats, it did so to acquire Quaker’s sub-brand Gatorade and follow the
market’s trend of favoring sports drinks over sodas.
Other considerations to make when developing a brand portfolio strategy are:
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The market’s needs, what consumers need and how they satisfy these needs
How existing brands in the portfolio can be differentiated
The role the prospective acquisition will play in the company’s portfolio
The company’s risk tolerance and the riskiness of the proposed acquisition
Whether acquiring a new brand can potentially hurt existing brands in the portfolio