Marketing Management
BRANDING
“If this company were to be split up, I would give you the property, plant, and equipment and
I would take the brands and the trademarks and I would fare better than you"
-John Stuart, ex-chairman of Quaker Oats
Branding encompasses the customer’s perceptions of a company. Successful brands
occupy important “real estate” in the mind of customers. Brand building seeks to connect a
brand to a customer’s feeling, belief, or attitude.
A key motivator for branding is that emotions are more difficult to replicate than features and
benefits (i.e., competition-based positioning)
Brands connect themselves to consumers by “laddering,” which serves as the basis for
goal-based positioning:
Product features Functional benefits Emotional benefits  Brand essence Meet consumer goals
Brands “ladder up” when they move from having just functional benefits to emotional
benefits that are connected to important (often universal) goals. The ordering of these steps
matters; it is difficult to jump right to goals. Features and benefits become associated with
emotional benefits (e.g., safety). Emotional benefits should be connected to values (e.g.,
being a good parent), which influences factors like willingness to pay and satisfaction.
Brands add value to a company because they can become a point of difference that is
difficult for competitors to replicate (e.g, Coca Cola and happiness). Brands signal a product
category and help communicate value, quality, and characteristics. Brands can also allow
you to charge more for your product and to leverage brand equity with extensions.
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Brand Equity- The sum of the intangible assets and liabilities that add or subtract to
its value. Brand equity can be so high that companies will buy “dead” brands.
Competitors will also try to copy existing brands to leverage brand value.
Brand Extension- Taking the brand to another category. Example: Apple Pay as an
extension of Apple.
Vertical Extension- Taking the brand to more upscale or less-upscale markets in the
same category. Example: If Apple created a specific low-quality iPhone to rival the
lowest prices from competitors.
Line Extension- Adding more products in the same category under the same or other
brands. Adding variety to the existing product. Example: Apple creates different
styles of laptop like the macbook air vs macbook pro.
Co-Branding- An alliance with another brand. Example: Apple Pay teaming up with
MasterCard to use credit cards through Apple Pay.
Ultimately, consumers will determine brand associations, but companies can use marketing
tactics to influence it.