Managing Brand Equity by David A. Aaker

“A product is something that is made in a factor; a brand is something that is bought by a customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless.”

– Stephen King WPP Group, London

What is Brand Equity?

The Role of Brands

A brand is a distinguishing name and/or symbol (shuck as a logo, trademark, or packaged design) intended to identify the goods and services of either one seller or a group of sellers and to differentiate those goods and services from those competitors. A brand thus signals to the customers the source of the product and protects both the customer and the producer from competitors who would attempt to provide products that appear to be identical. 

A distinguishing characteristic of modern marketing has been its focus on the creation of differentiated brands. Maker research has been used to help identify and develop bases of brand differentiation. Unique brand associations have been established using product attributes, names, packages, distribution strategies, and advertising. The idea has been to move beyond commodities to branded products – to reduce the primacy of price upon the purchase decision, and to accentuate the bases of differentiation. 

Pressure for Short-term Results

Branding decisions take place in organizations experiencing extreme pressures to deliver short-term performance. Managers have an excessive preoccupation with short-term profits at the expense of long-range strategy. 

The Role of Assets and Skills

One approach to introducing a strategic orientation is to change the primary focus from managing short-term financials to the development and maintenance of assets and skills. An asset is something firm posses, such as a brand name or retail location, which is superior to that of the competition. A skill is something a firm does better than its competitors do, such as advertising or efficient manufacturing. 

What a business does (the way it competes and where it chooses to do so) usually is easily imitated. It is more difficult to respond to what a business is since that involves acquiring or neutralizing specialized assets or skills. The right assets and skills can provide the barriers to competitor thrusts that allow the competitive advantages to persist over time and thus lead to long-term profits. The challenges are to identify key assets and skills on which the firm should base its competitive advantage, build upon and maintain them, and then use them effectively. 

The most important assets of a firm, however (such as the people of the organization and the brand names), are intangible in that they are not capitalized and thus do not appear on the balance sheet. Depreciation is not assessed, on “intangible assets,” and thus maintenance must come directly out of cash flow and short-term profits. Everyone understands that even in bad times a factor must be maintained because of the depreciation term in the income statement and also because maintenance needs are visible. An intangible asset, by contrast, is more valuable, and its “maintenance” is more easily neglected. 

Managing the Brand Name

One such intangible asset is equity by a brand name. For many businesses, the brand name and what it represents are its most important assets – the basis of competitive advantage and future earnings streams. Yet, the brand name is seldom managed in a coordinated, coherent manner with a view that it must be maintained and strengthened.   

It is not enough to avoid damage to a brand – it needs to be nurtured and maintained. A more subtle danger facing a brand is from a firm with a stoning cost/efficiency culture. The focus is on improving the efficiency of operations including purchasing, product design, manufacturing, promotions, and logistics. A problem, o is that in such a culture the brand may not be nurtured, and thus may slowly deteriorate. Further, efficiency pressures lead to difficult compromises between cost goals and customer satisfaction on the other.

The value of brand-building activities on future performance is not easy to demonstrate. The challenge is to understand better the links between brand assets and future performance so that brand-building activities can be justified. What are the assets that underlie brand equity? How do they relate to future performance? Which assets need to be developed, strengthened, or maintained? What exactly is the nature of the payoff/risk of such activities? What is the value of an improvement in perceived quality or brand awareness, for example? 

What is Brand Equity?

Brand equity is a set of brand assets and liabilities linked to brands, their name, and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers. For assets or liabilities to underlie brand equity they must be linked to the name and/or symbol of the brand. If the brand’s name or symbol should change, some or all the assets or liabilities could be affected and even lost, although some might be shifted to a new name and symbol. The assets and liabilities on which brand equity is based will differ from context to context. However, they can be usefully grouped into five categories: 

1. Brand loyalty.
2. Name awareness.
3. Perceived quality.
4. Brand association in addition to perceived quality.
5. Other proprietary brand assets – patents, trademarks, channel relationships, etc. 

Provides value to customers by enhancing customers:

1. Interpretation/processing of information.
2. Confined in a purchase decision.
3. Use satisfaction.

Provides value to the firm by enhancing:

1. Efficiency and effectiveness of marketing programs.
2. Brand loyalty.
3. Price/margins.
4. Trade leverage.
5. Competitive advantage. 

Brand Loyalty

For any business, it is expensive to gain new customers and relatively inexpensive to keep existing ones, especially when the existing customers are satisfied with – or even like – the brand. In fact, in many markets, there is substantial inertia among customers even if there are very low switching costs and low customer commitment to the existing brand. Thus, an installed customer base has the customer acquisition investment largely in its past. Further, at least some existing customers provide brand exposure and reassurance to new customers. 

Awareness of the Brand Name and Symbols

People will often buy a familiar brand because they are comfortable with the familiar. Or there may be an assumption that ab rand that is familiar is probably reliable, in business to stay, and of reasonable quality. A recognized brand will thus often be selected over an unknown brand. 

Perceived Quality

A brand will have associated with it a perception of overall quality not necessarily based on a knowledge of detailed specifications. The quality perception may take on somewhat different forms for different types of industries. 

Perceived quality will directly influence purchase decisions and brand loyalty,  especially when a buyer is not motivated or able to conduct a detailed analysis. Further, perceived quality can be the basis for a brand extension. 

A Set of Associations

The underlying value of a brand name often is based upon specific associations linked to it. The link of Karl Maiden to American Express provides credibility and may stimulate confidence in the service. The association of a “use context” such as aspirin and heart-attack previo can provide a reason-to-buy which can attract customers. A lifestyle or personality association May change the user experience: The Jaguar associations may make the experience of owning and driving one “different.” 

If a brand is well associated with a key attribute in the product class, competitors will find it hard to attack. If they attempt a frontal assault by claiming superiority via that dimension, there will be a credibility issue. They may be forced to find another, the perhaps inferior, basis for competition. 

Other Proprietary Brand Assets 

Brand assets will be more valuable if they inhibit or prevent competitors from eroding a customer base and loyalty. 

Brand assets will be most valuable if they inhibit or prevent competitors from eroding a customer base or loyalty. These assets can take several forms. For example, a trademark will protect brand equity from competitors who might want to confuse customers by using a similar name, symbol, or package. 

Assets must be tied to the brand. 

What is the Value of a Brand?

Consider IBM, Boeing, Betty Crocker, Ford, Weight Watchers, and Wells Fargo. What would happen to those firms if they lost a brand name but retained the other assets associated with the business? What would it cost in terms of expenditures to avoid damage to their business if the names were lost? 

At least five general approaches to assessing the value of brand equity have been proposed.

Price Premiums Generated by the Brand Name

One approach to the measurement of a price premium attached to a brand is simply to observe the price levels in the market. What are the differences, and how are they associated with different brands? For example: what are the price levels of comparable automobiles? How much are the different brands depreciating each year? How responsive is the brand to a firm’s price changes, or price changes of competitors? 

Price premiums can also be measured through customer research. Customers can be asked what they would pay for various features and characteristics of a product. 

Brand Name and Customer Preference

An alternative is to consider the impact of the brand name upon the customer evaluation of the brand as a measure of preference, attitude, or intent to purchase. 

The value of a brand would then be the marginal value of the extra sales (or market share) that the brand name supports. Suppose, for example, it was believed that sales would be 30% less if the brand name was discarded, or sales would decline 30% over five years if that advertising support for the name was eliminated. The profits on the lost marginal sales would represent the value of the brand. 

Brand Value Based Upon Future Earnings

The best measure of brand equity would be the discounted present value of future earnings attributed to brand-equity assets. The problem is how to provide such an estimate. 

One approach is to use the long-range plan of the brand. Simply discount the profit stream that is projected. Such a plan should take into account brand strengths and their impact on the competitive environment. 

Another approach that can be used when a brand profit plan is unavailable or unsuitable is to estimate current earnings and apply an earnings multiplier. The earnings estimate could be current earnings with any extraordinary charges backed out. 

Appraising Brand Assets

Brand loyalty: what are the brand-loyalty levels by segment? Are customers satisfied? What do “exit interviews” suggest? Why are customers leaving? What is causing dissatisfaction? What do customers say are their problems with buying or using the brand? What are the market share and sales trends?

Awareness: how valuable an asset is brand awareness in this market? What brand awareness level exists as compared to that of competitors? What are the trends? Is the brand being considered? Is brand awareness the problem? What could be done to improve brand awareness? 

Perceived quality: what drives perceived quality? What is important to the customer? What signals quality? Is perceived quality valued – or is the market? Is the price moving toward a commodity business? How do competitors stack up concerning perceived quality?

Brand associations: what mean image, if any, does the brand stimulate? Is that image a competitive advantage? Is there a slogan or symbol that is differentiating assets? How are the brand and its competitors positioned? 

Other brand assets: are sustainable competitive advantages attached to the brand name that is not reflected in the other four equity dimensions? Is there a patent name that is not reflected in the other four equity dimensions? Is there a patent or trademark that is important?

Issues in Managing Brand Equity

1. The base of brand equity: on what should the brand equity be based? What associations should form the basis of the positioning? How important is awareness? Among which segments? Can barriers be created so it’s more difficult for competitors to dislodge loyal customers?
2. Creating brand equity: how is brand equity created? What are the diving determinants? What is the role in any given context of the name, the channel, the advertising, the spokesperson, and the package, and how do they relate?
3. Managing brand equity: how should a brand be managed over time? What actions will meaningfully affect the elements of equity – in particular, the association and perceived loyalty? What is the “decay rate” if supporting activists are withdrawn?
4. Forecasting the erosion of equity: how can erosion of brand equity, and other future problems, be forecasted? The danger is that by the time damage to the brand is recognized, it is too late. The cost of correcting phlegm can be extremely high relative to the cost of mailing equity.
5. The extension decision: to what products should the brand be extended? How far can the brand be extended before brand equity is affected?
6. Creating new names: the investment in a new brand name will generate a name with a new set of associations that can provide a plant form for another growth stream. What are the trade-offs between these alternatives? How many brand names can businesses support?
7. Complex families of names and surnames: how should different levels of brand-name families be managed? What mix of advertising should brands place under the umbrella name?
8. Brand-equity measurement: a basic question that underlies all these issues is how to measure brand equity and the assets on which it is based. If it can be conceptualized in a given context precisely enough to measure and monitor it, the other problems become manageable.
9. Evaluating brand equity and its components assets: a pressing related issue is how to value a brand. Given that there are markets for brands, it is of enormous practical value to provide methods to estimate the value. 

Brand Loyalty

The brand loyalty of the customer is often the core of brand equity. If customers are indifferent to the brand and buy concerning features, price, and continence with little concern for the brand name, there is likely little equity. If, on the other hand, they continue to purchase the brand even in the face of competitors with superior features, price, and convenience, substantial value exists in the brand and perhaps in its symbol and slogan. 

Brand loyalty is a measure of the attachment that a customer has to a brand. It reflects how likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features. It is one indicator of brand equity that is demonstrably linked to future profits since brand loyalty directly translates into future sales. 

Levels of Brand Loyalty

There are several levels of loyalty. Each level represents a different marketing challenge and a different type of asset to manage and exploit. 

1. Committed buyer. These customers have pride in discovering and/or being users of the brand. The brand is very important to them either functionally or as an expression of who they are. Their confidence is such that they will recommend the brand to others. The value of the committed customers is not so much the business he or she generates but, rather, the impact upon others and the markets themselves.
2. Likes the brand – considers it a friend. These customers truly like the brand and their preference may be based upon an association such as a symbol, a set of user experiences, or a high perceived quality. However, liking is often a general feeling that cannot be closely traded to anything specific; it has a life of its own. Segments of this level might be termed friends of the brand because there is an emotional/feeling attachment.
3. Satisfied buyer with switching costs. These customers are satisfied and have switching costs – costs in time, money, or performance risks associated with switching. Perhaps they have invested in learning a system associated with a brand. Or perhaps there is a risk that another brand Amy does not function as well in a particular use context. To attract these buyers, competitors need to overcome the switching costs by offering an inducement to switch or by offering a benefit large enough to compensate.
4. Satisfied/habitual buyer no reasons to change. The buyer is not dissatisfied with the product. There is no dimension of dissatisfaction that is sufficient to stimulate a change especially if that change involves effort. A such segment can be vulnerable to competitors that can create a visible benefit to switching.
5. Switcher/price sensitive indifferent – no brand loyalty. At this level the buyer is complexity indifferent to the brand – each brand is perceived to be adequate and the brand name plays little role in the purchase decision.  

Brand Loyalty as One Basis of Brand Equity

Brand loyalty is qualitatively different from the other major dimensions of brand equity in that it is tied more closely to the user experience. Brand loyalty cannot exist without prior purchase and use experience. In contrast, awareness, associations, and perceived quality are characteristics of many brands that a person has never used. 

If the loyalty is to a product rather than the brand, equity would not exist. 

A customer base can too easily be taken for granted when interest is in short-term sales rather than building and maintaining equity. The focus is often upon faceless sales statistics to be analyzed and controlled rather than on the people and organizations who are the customers. 

Measuring Brand Loyalty 

One approach to measuring brand loyalty is to consider actual behavior. Other approaches are based upon the loyalty constructs of switching costs, satisfaction, liking, and commitment. 

Behavior Measures

A direct way to determine loyalty, especially habitual behavior, is to consider actual purchase patterns. Among the measures that can be used are: 

Repurchase rates: what percentage of the product purchases the product on their next car purchase?
Percent of purchases: of the last fiver purchase made by a customer, what percentage went to each brand purchased?
The number of brands purchased: what percent of the brand buyers n bought only a single brand? Two brands? Three brands? 

The loyalty of customers can vary widely among some product classes, depending upon the number of competing brands and the nature of the product. The percentage of users buying only one brand is over 80% for products like slat, cooking spray, waxed paper, and pet shampoos, and under 40% for gasoline, tires, canned vegetables, and garbage bags. 

Switching Costs

An analysis of switching costs can provide insight into the extent to which switching costs provide a basis for brand loyalty. 

The most obvious type of switching costs is an investment in a product or system. When a firm buys a computer system, the hardware investment is only part of the investments involved.

Another type of switching cost is the risk of change. If the current system works, even if there are problems, there is always the risk that a new system will be worse. 

Measuring Satisfaction

What problems are customers having? What are the sources of irritation? Why are some customers switching? What are the precipitation reasons? A key premise of the fourth and third levels of loyalty is that the dissatisfaction is absent or low enough to avoid precipitating a decision to switch. 

Liking of the Brand

Do the customers “like” the firm? Are there feelings of respect or friendship toward the firm or brand? Is there a feeling of warmth toward the brand? A positive effect can result in resistance to competitive entries. 

General overall liking can be scaled in a variety of ways, such as:

1. Linking.
2. Respect.
3. Friendship.
4. Trust.

The concept is that there is a general liking or facet which is distinct from specific attributes that underlie it. People simply like the brand, and this liking cannot be explained completely by their perceptions and beliefs about the brand’s attributes. 

Another measure of liking is reflected in the additional price that customers would be willing to pay to obtain their brand and the price advantage that competitors would have to generate before they could attract a loyal buyer. 

The Strategic Value of Brand Loyalty

Reduced Marketing Costs

It is simply much less costly to retain customers than to get new ones. Because potential new customers usually lack the motivation to change from their current brands, they will be expensive to contact, in part because they are not making an effort to locate brand alternatives. Even when they are exposed to alternatives, they will often need a substantial reason to risk buying or using another brand. 

Trade Leverage

When a brand has loyalty or cult-like customers (like Apple for example) it will be easier to demand more shelving space or less percentage of sales from big players since the brand is guaranteed to sell independent of who sells it. 

Attracting New Customers

A customer base with segments that are satisfied and others that like the brand can prove assurance to a prospective customer, especially when the purchase is somewhat risky. 

A relatively large satisfied customer base proves an image of the brand as an accepted, successful product that will be around and will be able to afford to serve backup and product improvements. 

Brand awareness can also be generated from the customer base. Existing customers and delays will enhance recognition merely by being there. Further, this type of exposure – actually seeing it “in action” or even on a retailer’s shelf – will be much more vivid and have more impact than only seeing an ad several times. Seeing a product being used by a friend will generate the kind of memory links to the user context and the user that any advertisement would have great difficulty in doing. Brand recall huts would be stronger. 

Time to Respond to Competitive Threats 

Brand loyalty provides a firm with time to respond to competitive moves. If a competitor develops a superior product, a loyal following will allow the firm time needed for the product improvements to be matched or neutralized. 

Maintaining and Enhancing Loyalty

Chancing brands requires effort, especially if the decision involves substantial investments or risks. Further, positive attitudes toward an incumbent brand are likely to develop which will not only justify but enhance prior decisions. People do not like to admit that they were wrong – it is much easier to rationalize prior decisions. 

There are many ways to do this and the author explains them in further detail, but since they’re quite obvious to understand I’ll simply list them here:

– Treat the customer right.
– Stay close to the customer.
– Measure/manage customer satisfaction. 
– Providing extras. 
– Creating switching costs. 

Selling Old Customers Instead of New Ones

Perhaps the most common mistake that firms make is to attempt to grow mainly by attracting new customers. Often, aggressive marketing programs are involved. The problem is that new customers are almost always difficult to attract. They simply may have little reason to consider moving from another brand. They simply have little reason to consider moving from another brand. 

In contracts, there usually is an enormous payoff in retaining existing customers, in part because retention programs are relatively inexpensive. If the migration of existing customers to competitors can be reduced, growth will naturally occur. New customers, even without much effort to attract them, will appear, some inflicted by existing customers. 

What is needed here is a reduction of dissatisfied customers’ motivation to leave, and an increase in the switching costs of those who are satisfied. The first step is to analyze irrational problems causing people to switch brands by contacting lost customers. They often represent the best source of information about the dynamic of the customer base. 

An aggressive customer-retention program will move beyond removing sources of discontent, to building switching costs by rewarding customers. 

Brand Awareness

What is Brand Awareness?

Brand awareness is the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category. A link between product class and brand is involved. 

Brand awareness involves a continuum ranging from an uncertain feeling that the brand is recognized, to a belief that it is only one of the product class. The role of brand awareness in brand equity will depend upon both the context and upon which level of awareness is achieved. 

There are four levels of brand awareness:

1. Top of mind: a still stronger recall position, would be that of a dominant brand, a brand that is the only brand recalled by a high percentage of respondents. 
2. Brand recall: the first-name n brand in an unaided recall takes has achieved top-of-mind awareness, a special position. 
3. Brand recognition: is based upon asking a person to name the brand in a product class; it is time for “unaided recall” because, unlike in the recognition task, the respondent is not aided by having the names provided. 
4. Unaware of the brand: This is based upon an aided recall test. Brand recon ignition is the minimal level of brand awareness.

How Awareness Works to Help the Brand

Brand awareness creates value in at least four ways:

Anchor to Which Other Associations can be Attached

Brand recognition is the basic first step in the communication task. It usually is wasteful to attempt to communicate brand attributes until a name is established with a chick to associate the attributes. A name is like a special file folder in the mind which can be filled with name-related facts and feelings. Without such a file readily accessible in memory, the facts and feelings become misfiled, and cannot be readily accessed when needed. 

Familiarity/Liking

Recognition provides the brand with a sense of familiarity – and people like the familiar. Especially for low-involvement products like soap, chewing gum, paper towels, sugar, disposable pens, or facial tissues, familiarity can sometimes drive the buying decision. 

Substance/Commitment

Name awareness can be a single of presence, commitment, and substance, attributes which can be very important even to industrial buyers of big-ticket items, and consumers buyer of durables. The logic is that if a name is recognized, there must be a reason – such as:

 – The firm has advertised extensively.
– The firm has been in the business for a long time.
– The firm is widely distributed.
– The brand is successful – others use it. 

These suppositions are not necessarily based upon knowledge of specific facts about the brand. Even if a person has not been exposed to advertising and knows little about the firm, brand awareness could still lead to the assumption that the firm is substantial and backs the brand with advertising. 

Brands to Consider

The first step in the buying process often is to select a group of brands to consider – a consideration set. In selecting an advertisement, a car to test-drive, or a computer system to evaluate, for example, three or four alternatives might be considered. The buyer probably will not be exposed to many brand names during the process, except by happenstance. Thus, brand recall can be coral to getting into this group. Who makes computers? The first firms that come to mind will have an advantage. 

Brand Recall and Buying Decision

The role of brand recall (or, better yet, top-of-mind recall) can also be crucial for frequently purchased products like coffee, detergent, and headache remedies, for which brand decisions usually are made before going to the store. Further, in some categories (such as cereal) there are so many recognized alternatives that the shopper is overwhelmed. 

Certain studies have shown a relationship between recall and consideration sets: Generally, if a brand does not achieve recall it will not be included in the consideration set. However, people usually will also recall the brands that they dislike strongly. 

How to Achieve Awareness

Achieving awareness, both recognition, and recall involves two tasks; gaining brand name identity and liking it to the product class. For a new brand, both tasks are required. However, in other contexts, one is already accomplished, and the assignment becomes different.

How should awareness be achieved, maintained, or imported? The best approach will depend upon the context, but several helpful guidelines are based on formal studies from both psychology and advertising and upon observing brands that have done well in creating and maintaining awareness levels. 

Be Different

An awareness message should provide a reason to be noticed and it should be memorable. Many tacks work but one key is simply to be different and unusual. 

Too many product classes have brands with very similar communication approaches, making it difficult to break out of the clutter. 

Involve a Slogan or Jingle

A slogan or jingle can make a big difference. The link to the slogan might be stronger because it involves a product characteristic that can be visualized. Thus, it can pay to create and establish a slogan with strong links to the brand and the product class. 

A jingle can be a powerful awareness-creating device. 

Symbol Exposure

A symbol involves a visual image that is much easier to learn and recall than a word or phrase. Further, there are often creative ways to gain exposure besides using advertising – for example, Betty Crocker’s baking contest, exhibitions of Budweiser’s Clydesdale horse team, and Apple’s in various forms at computer shows. 

Event Exposure

Beer brands long ago discovered the value of promotions, and Budweiser, Miller, Coors, and other brands have become prominently associated with hundreds of events. 

Consider Brand Extensions

One way to gain brand recall, to make the brand name more salient, is to put the name on other products. Coca-Cola, Weight Watchers, and Sunkist all get name exposure when their names are attached to additional products which are advertised, displayed, and used. 

Recall

Developing recalls is more difficult than developing recognition. The brand name needs to be made more salient, and the link from the brand to the product class needs to be stronger. While recognition, even based on only a few exposures, persists, recall decays through time. A recall is difficult, requiring either an in-depth learning experience or many repentings. The top-of-mind recall is even more demanding.  

Perceived Quality 

What is Perceived Quality?

Perceived quality can be defined as the customer’s perception of the overall quality or superiority of a product or service concerning its intended purpose, relative to alternatives. Perceived quality is, first, a perception by customers. It thus differs from several related concepts, such as:

– Actual or objective quality – the extent to which the product or service delivers superior service. 
– Product-based quality – the nature and quantity of ingredients, features, or services included.
– Manufacturing quality – conformance to specifications, the “zero defect” goal.

Perceived quality cannot necessarily be objectively determined, in part because it is a perception and also because judgments about what is important to customers are involved. 

Perceived quality differs from satisfaction. A customer can be satisfied because he or she had low expectations about the performance level. High-perceived quality is not consistent with low expectations. It also differs from attitude: a positive attitude could be generated because a product of inferior quality is very inexpensive. Conversely, a person could have a negative attitude toward a high-quality product that is overpriced.

How Perceived Quality Generates Value

As suggested, perceived quality provides value in several ways.  

Reason-to-Buy 

Because perceived quality is linked to purchase decisions, it can make all elements of the marketing program more effective. If the perceived quality is high, the job of advertising and promoting is more likely to be effective. By contrast, a perceived quality problem is difficult to overcome. 

Differentiate/Position

A principal characteristic of a brand – whether a car, a computer, or a cheese – is its position on the perceived quality dissension. It is super-premium, premium, value, or economy entry? Further, concerning the perceived quality category, is the brand the best, or is it only competitive with others in the class?

A Price Premium

A perceived quality advantage provides the option of charging a premium price. The price premium can increase profits, and/or provide resources with which to reinvest in the brand. These resources can be used in such brand-building activities as enhancing awareness or associations, or in R&D activities to improve the product. A price premium not only parodies resources but can also reinforce the perceived quality. 

Channel Member Interest

Perceived quality can also be meaningful to retailers, distributors, and other channel members, and thus aid in gaining distribution. We know that the image of a channel member is affected by the products or services included in its line – stocking “quality products” can matter. In addition, a retailer or other channel member can offer a high perceived quality product at an attractive price, to draw traffic. 

Brand Extensions

In addition, the perceived quality can be exploited by reducing brand extension and using the brand name to enter new product categories. A strong brand concerning perceived quality will be able to extend further and will find a higher success probability than a weaker brand. 

What Influences Perceived Quality?

Why do some customers believe that the quality is high or low? How could perceived quality be improved? Why attributes do others use to make overall quality judgments? 

The dimension that underlies a perceived quality judgment will depend upon the context. For an own mower it might include cutting quality, realizability, availably of maintenance,e, and cost of maintenance. To learn relevant dimensión in a given context, it is usually useful to conduct some exploratory research.

1. Performance.
2. Features.
3. Conformance.
4. Reliability.
5. Durability.
6. Serviceability.
7. Fit and finish: does the product look and feel like a quality product?
8. Tangibles: do the physical facilities, equipment, and appearance of personnel imply quality?
9. Competence.
10. Responsiveness.
11. Empathy: does the bank provide caring, individualized attention to its customers?

Brand Associations: The Positioning Decision

Associations, Image, and Positions

A brand association is anything “linked” in memory to a brand. Thus, McDonald’s could be linked to a character such as Ronald McDonald, a customer segment such as kids, a feeling such as having fun, a product characteristics such as service, a symbol such as the Golden Arches, a lifestyle such as harried, an object such as a car, or an activity such as going to a movie theater next to a McDonald’s. 

The associations not only exist but have a level of strength. A link to a brand will be stronger when it is based on many experiences or exposures to communications, rather than few. It will also be stronger when it is supported by a network of other links. 

A brand image is a set of associations, usually organized in some meaningful way. Thus, McDonald’s is not just a set of 20 strong associations and 30 weaker ones. Rather, the associations are organized into groups that have meaning. 

An association and an image both represent perceptions that may or may not reflect objective reality. Whereas the state coach often is associated with Wells Fargo, that does not mean that Wells Fargo is logically or physically any more Western than the Bank of America. 

Positioning is closely related to the association and image concept except that it implies a frame of reference, the reference point usually being competition. Thus, the Bank of California is positioned as being smaller and friendlier than the Bank of America. 

A well-positioned brand will have a competitively attractive position supported by strong associations. It will rate high on a desirable attribute like friendly service, or occupy a position distinct from that of competitors – such as being the only store that offers home delivery. 

A “brand position” does reflect how people perceive a brand. However, “positioning” or a “positioning strategy” can also be used to reflect how a firm is trying to be perceived. 

How Brand Associations Create Value

The underlying value of a brand name often is its set of associations – its meaning to people. Associations represent bases for purchase decisions and brand loyalty. There are a host of possible associations and a variety of ways they can provide value. Among how associations create value for the firm and its customers are: helping to process/retrieve information, differentiating the brand, generating a reason to buy, creating positive attitudes/feelings, and providing a basis for extensions. 

Help Process/Retrieve Information 

Associations serve to summarize a set of facts and specifications that otherwise would be difficult for the customer to process and access, and expensive for the firm to communicate. An association can create a compact information chunk for the customer which provides a way to cope. A set of hundreds of acts and incidents about Nordstrom can be summarized by a strong position relative to competitors of Nordstrom on a service de mission, for example. 

Associations can also influence the interpretation of facts. 

Further associations can influence the recall of information, especially during decision-making. For example, the siren of Starbucks brings with it all sorts of information about the quality and quantity of its products. 

Differentiate

An association can provide an important basis for differentiation. In some product classes such as wines, perfumes, and clothes the various brands are not distinguishable by most customers. Associations of the brand name can then play a critical role in separating one brand from another. 

Differentiation associations can be a key competitive advantage. If a brand is well positioned upon a key attribute in the product class, such as Nordstrom on service, or upon an application, such as Gatorade and athletics, competitors will find t hard to attack. 

Reason-to-Buy

Many brand associations involve product attributes or customer benefits that provide a specific reason to buy and use the brand. They represent a basis for purchase decisions and brand loyalty. Thus, Crest is a cavity-prevention toothpaste; Colgate provides clean, white teeth; and Close-Up generates fresh breath as well as serves its more pedestrian purpose. 

Some associations influence purchase decisions by providing credibility and confidence in the brand. If a Wimbledon champion uses a certain tennis racket, or a professional hair stylist uses a particular hair-coloring product, consumers will feel more comfortable with those brands. 

Create Positive Attitudes/Feelings

Some associations are liked and stimulate positive feelings that get transferred to the brand. The associations and their companion feelings then become linked to the brand. 

Likable symbols can also serve to reduce the incidence of counter-arguing where the audience argues against the logic of an advertisement. For example, Chevron during the oil crises of the 70s, successfully battled the resentment against oil companies only when they told their story using cute cartoon dinosaurs accompanied by cheerful, fun music. 

Some associations create positive feelings during the use of experience, serving to transform it into something different than it would otherwise be. 

Basis for Extensions

An association can provide the basis for an extension by creating a sense of fit between the brand and a new product, or by providing a reason to buy the extension. 

Types of Associations

A considerable number of associations could be relevant to just about anyone. The manager of a brand, though, will not be equally interested in all associations. Rather, he or she will be primarily interested in those associations that directly or indirectly affect buying behavior. Management’s interest is in not only the identity or brand associations but also whether they are strong and shared by many, or weak and differ from person to person. 

Product attributes or customer benefits are an important class of associations, but others can also be important in some contexts. Some will reflect the fact that products are used to express lifestyles, social positions, and professional roles. Still, others will reflect associations involving product applications, types of people who might use the product, stores that carry the product, or salespeople who handle it. The name, symbol, and slogan are indicators of the brand but also can be important associations as well. 

Product Attributes

Probably the most used positioning strategy is to associate an object with a product attribute or characteristic. Developing such associations is effective because when the attribute is meaningful, the association can directly translate into reasons to buy or not to buy a brand. 

In many product classes, the different brands will be associated with different attributes. For example, Volvo has stressed durability, showing “crash tests”, and telling how long their cars last. BMW, in contrast, talks about performance and handling with the tag line: “The ultimate driving machine.”

The position problem is usually to find an attribute important to a major segment and not claimed by a competitor. The identification of an unmet customer problem can sometimes lead to an attribute previously ignored by competitors. 

It is always tempting to try to associate a brand with several attributes so that no selling argument or market segment is ignored. However, a positioning strategy that involves too many product attributes can result in a fuzzy, and sometimes contradictory, confusing image. 

The use of several attributes can work well when they support each other. 

Intangibles

Companies love to make brand comparisons. Brands engage in shouting matches, attempting to convince others of the superiority of their brand along a key dimension or two. Bayer is fast acting. Lean Cuisine has fewer calories. Volvo has longer life. 

There are several problems with such a spaceship. First, a position based upon a specification is vulnerable to innovation. There will always be a competitor suddenly a bit faster or having more fiber or fewer calories, or whatever. 

Second, when firms start a specification shouting match they all eventually lose credibility. After a while, nobody believes an aspiring firm that claims to be the most effective or the fastest-acting. 

Third, people do not always make dictions based upon a particular specification anyway. They may feel that small differences in some attributes are not important. Or they may simply lack the motivation or ability to attempt to process information at a detailed level. 

Unlike more concrete attributes, an “intangible attribute” such as technology, health, or nutrition is more difficult to counter. If Life cereal is well-positioned in nutrition, it is not as vulnerable as a competitor that provides 10% of daily vitamin needs. Further, a consumer is not burdened with learning and processing detailed information about calories, fiber, and vitamins. 

Customer Benefits

Because most product attributes provide customer benefits, there usually is a one-to-one correspondence between the two. BMW is good-handling (a product characteristic) providing the customer driving satisfaction (a customer benefit). However, whether the dominant association is a product attribute or a customer benefit can sometimes be pivotal. When BMW is mentioned, is the visual image that of a car or a satisfied driver? 

It is useful to distinguish between a ration benefit and a psychological benefit. A rational benefit is closely likely to a product attribute and would be a part of a “rational” decision process. A psychosocial benefit, often extremely consequential in the attitude-formation process, relates to what feelings are engendered when buying and/or using the brand. 

Relative Price

In some product classes, there are five well-developing price levels. The evaluation of a brand in these product classes will start by determining where it stands concerning one or two of these price levels.

For example, in the beer market, there are mainstream premium beers such as Budweiser, Coors, and Miller. The super-premium category, which includes Michelin, Lowenbrau, and Coors Gold, is intended to be perceived as being higher quality, meriting a higher price. The highest category would include such prestige beers as Henry Weinhard, Herman Joseph, Anchor Steam, Samuel Adams, and some imports, and would have a still higher expected price and quality level. 

Positioning concerning relative price can be complex. The brand usually needs to be clearly in only one of the rice categories. The job is to position its offering away from tethers at the same price point. One way to relate is by offering t la higher price level. For example, Suave is a line of “economy” shampoos that Helene Curtis has successfully marketed at a price substantially lower than competitors. 

Positioning against a brand with a higher relative price by upgrading a brand can be tricky. Sears, for example, periodically has attempted to offer more upbeat fashion clothing featuring designer labels. But advertising update fashion invariable adversely affects their core-value image: Customers wonder whether they are still the value store. Attempting to offer merchandise competitive with a department store’s run the risk that customers will suspect that Sears has become a department store. Worse, the conclusion may be that sears are an inferior department store, rather than the desired conclusion that Sears remains a superior-value store. 

The premium segment is enticing in many markets because it often represents an area with high growth and high margins somewhat protected from the murderous cost-price squeeze from offshore firms. To be a part of the premium category, a brand has to offer a credible case either that it is superior concerning quality, or that it indeed can deliver status worth a price premium. One vehicle to help accomplish that positioning is a brand name having “premium” connotations.  

Use/Application

Another approach is to associate the brand with use or application. Campbell’s soup for many years positioned itself as a lunchtime product and used noontime radio extensively. More recently it has been repositioned as a complete meal. 

A study of the coffee market revealed that there were nine relevant use contexts for coffee:

1. To start the day.
2. Between meals alone.
3. Between meals with others.
4. With lunch.
5. With super.
6. At gunner with a guest.
7. In the evening.
8. To keep awake in the evening.
9. On weekends. 

Products can, of course, have multiple positioning strategies, Al thought increasing the number involves obvious difficulties and risks. Often a positioning-by-use strategy represents a second or third position for the brand, a positing that deliberately attempts it expand the brand’s market. 

User/Consumer

Another position approach is to associate a brand with a type of product user or customer. When it works, a user positioning strategy is effective because it can match positioning with a segmentation strategy. Identifying a brand with its target segment often is a good way to appeal to that segment. 

The role of user position can be illustrated by the cosmetic industry in the late 1980s. The dominant firm featured Noxell’s Cover Girl line, which, with just over 20% of the market, had a sharply defined image as the makeup of the girl next door. Cover Girl was firmly established as the product for the wholesome, healthy (usually blonde) woman. Reckon garnered around 15% of the market by being associated with presumably more-sophisticated women. 

Another example of a firm that attempts to find neglected users is Cadbury, with its Canada Dry ginger ale, soda, and seltzer product, and its Schweppes line. Cadbury has targeted the adult soft-drink market, leaving the tee-age market to Coke and Pepsi. Canada Dry ginger ale got a new, cleaner green-and-gold package and the advertising tagline “For when your taste grows up.” The logic is that as people mature, they being to want a drink that is less sweet – like ginger ale. 

The problem with a strong association, particularly a strong user association, is that it limits the ability of a brand to expand its market. Thus, a strong image is both a strength and a limitation. 

Celebrity/Person

A celebrity often has strong associations. Linking a celebrity with a brand can transfer those associations to the brand. One characteristic important for a brand to develop is technological competence, the ability to design and manufacture a product. In tennis rackets, for example, a key element of marketing strategy is to obtain endorsement from leading tournament players. 

A person attached to the brand need not be a celebrity. The fabled man in the Hathaway shirt wearing an eyepatch, Betty Crocker, Juan Valdez (Colombian coffee), Mrs. Paul, and Mr. Whipple. Mr. Goodwrench. The person need not even be real. 

Lifestyle/Personality

If your car were suddenly to become a human being, what kind of person would you expect it to be? Great to have around? Hard to live with? Every person possesses a personality and a lifestyle that is rich, complex, vivid, and distinctive as well. But a brand can be imbued by customers with several very similar personalities and lifestyle characteristics. 

Product Class

Some brands need to make critical positioning decisions that involve product class associations. For example, some margarine position themselves concerning butter. Dried-milk makers came out with instant breakfast positioned as a breakfast substitute, and a virtually identical product positioned as a dietary meal substitute. 

Competitors

In most positioning strategies, the frame of reference, whether explicit or implicit, is one or more competitors. In some cases, the reference competitors can be de dominant aspect of the positioning strategy. It is useful to consider positioning concerning a competitor for two reasons. First, the competitor may have a firm, well-crystallized image, developed over many years, which can be used as a bridge to help communicate another image referenced to it. Second, sometimes it is not important how good customers think you are; it is just important that they believe you are better than (or perhaps as good as) a given competitor. 

Positioning a competitor can be an excellent way to create a position concerning a product characteristic, especially price quality. Thus, products that are difficult to evaluate, such as liquor products, often will use an established competitor to help the position task. 

Positioning concerning a competitor can be accomplished by comparative advertising – advertising in which a competitor is explicitly named and compared against one or more product characteristics. 

Country or Geographic Area

A country can be a strong symbol, as it has close connections with products, materials, and capabilities. Thus, Germany is associated with beer and upscale automobiles, Italy with shoes and leather goods, and Frances with fashions and perfumes. These associations can be exploited by associating a brand with a country. 

The Measure of Brand Associations

What Does This Brand Mean to You?

A direct way to find out what a brand means to people is to ask them. An in-depth discussion of a brand, either with individual customers or with focus groups of up to 10 participants, can be quite helpful. Among the questions to be pursued are: what brands are used? Why? What brand associations exist? What feelings are associated with brand use? What people?

Indirect Approaches

Although direct approaches toward learning perceptions can be useful, often it is worthwhile to consider more-indirect methods – even some that might appear a bit offbeat. Their indirect approaches often are motivated by the assumption that respondents may be either unwilling or unable to reveal feelings, thoughts, and attitudes when asked a direct question. 

Free Associations 

Word associations are an efecto to bypass the inhibiting thinking process of the respondents. The procedure is to have a list of objects consisting of, or including brand names. The respondents are asked to provide the first set of words that once to mind. The key is to avoid taking off evaluation but rather to generate words and thoughts as fast as they arrive. 

For perspective, it is useful to conduct the same associate research on competitive brands. 

Picture Interpretation

Another approach is to have respondents interpret a scene presented in which the product or brand is playing a role. 

The use of a picture is one way to allow respondents to express how they feel by using characters in the scene as a vehicle to communicate their attitudes and feelings. 

If This Brand Were a Person

Joseph Plummer, a former research director of Young & Rubicam, indicates that there are three components to a brand image: product attributes, consumer benefits, and brand personality. A brand might be characterized as being modern or old-fashioned, lively or dull, conventional or exotic. He argues that for many product classes brand personality is a key element in understanding brand choice. 

Animals, Activities, and Magazines 

A useful approach is to ask customers to relate brands t other kinds of objects – such as animals, cars, magazines, trees, movies, or books. Questions might be used, such as:

1. If Clorox bleach or Tide detergent were animals, what kind of animals would they be? Why? What characteristics of the animals remind you of the brands?
2. If Citibank and Bank of America were cars, what models would they be?
3. If United Airlines, American Airlines, and Delta were magazines, what would they be? 

The Use Experience

Instead of asking which brand respondents are using, and why, the discussion might focus on the user experience. A discussion of specific past-use experiences can allow the respondents to open up, recall, and communicate feelings and context that were part of their user experiences. A picture of a brand can thus emerge which is not filtered or summarized. 

The Decision Process

Another approach could be to track a person’s decision process. When a decision process is dissected, the influence of brand associations often emerges that may not be part of someone’s summary picture of a brand. The associations might be subtle, such as the user experiences of grandfather, or indirect, such as the nature of who recommended the brand. 

What is the Brand User Like?

Focusing on the brand user asks how the user of one brand or product differs from the user of another. In particular, how do the needs and motivations of the users of the two brands differ? When the brand user (rather than the brand) is spotlighted, respondents are more likely to provide responses that go beyond a logical rationale for their brand choice. 

The second one can be framed in many ways and can involve both open-ended and scaled measures. Respondents can be given a shipping list, or a description of the activities of a person, and asked to describe the person in more detail than provided. The shopping list for one set of people could include one brand or product, and another set of people would get the same list but with another brand. The differences in the profile of the person can be very revealing.   

What Distinguishes Brands From One Another?

One approach is to give the respondents pairs of brands and ask how they differ. Another approach that is particularly good at generating customer-driven vocabulary is to give the respondents three brand names from a set of brands familiar to them. The respondent is asked to identify the two most similar brands and to describe why those brands are both similar to and different from the third. 

From Product Attributes to Benefits to Personal Values

The concept is that personal values represent the desired end state and should be included. Personal values can be externally oriented or can relate to how one views oneself. Product attributes such as “miles per gallon” or “strong flavor” and consumer benefits such as “saves money” or “don’t have to wash hair so frequently” reprint the means that can be used to achieve the desired ends. 

Scaling Brand Perceptions

A more direct way to measure associations is to scale the brands upon a set of dimensions. Scaling approaches are more objective and reliable than qualitative approaches. Less vulnerable to subjective interpretation, they can be based upon a representative sample of customers; the incidence of associations and relationships among them can thus be quantified. 

Some additional considerations go into providing quantitative pictures of the brand image.

1. Beyond attributes and benefits.
2. Who are the relevant competitors? 
3. Removing redundancy: identifying underlying dimensions. 
4. Identifying the important perceptual dimensions. 
5. Determining perceptions by segment. 
6. Beyond perceptions: 

Interest is not only in the associations with the brand, and the position of the brand on the perceptual dimensions, but also on:

– Association strength: how confident are customers about the associations with the brand?
– Clarity of the image: do customers agree upon the associations with a brand? Or does the image differ across people?

Selecting, Creating, and Maintaining Associations  

Which Associations?

The selection of the associations will drive elements of the marketing effort. The importance is particularly relevant in the context of a new product or service. Let us assume that we have a new service concept, a video store that will deliver and pick up videos from a special mailbox attached to the customers’ homes. Among the possible associations are such attributes as home-delivery convenience, speed, movie selection, catalog selection, and friendly operators. Which should be the primary and which are the secondary associations?

Such positioning decisions will likely determine not only short-term success but also long-term viability because associations need to support competitive advantages which will be sustainable and convincing. 

The position decision for an established brand is complicated by the set of associations already in place. As a result, consideration needs to be given as to which associations should be weakened or eliminated, as well as which should be created or enhanced. 

Self-Analysis

Don’t try to be something you are not. Before positioning a brand, it is important to conduct an in-home blind-taste test or in-office use test which ensures that the brand can deliver what it promises and that it is compatible with a proposed image. To create a position different from that which the brand delivers is extremely wasteful. It is also strategically damaging, as it will undermine the basic equity of the brand: consumers will be skeptical about future claims. 

Brand perceptions can be more important than the physical product itself, especially if they are strong because of name, or past advertising. It is thus important to make sure that the nature and strength of existing associations are known. 

Competitors’ Associations

Knowing the competitors’ associations is a second key to the positing decision. For most brands in most contexts, it is imperative to develop associations that represent points of difference with competitors. If there is nothing different about your brand, there is no reason for customers to select it over another, or even notice it. 

Sometimes it is useful to develop several common associations with only one point of difference. An example would be IBM PC clones which emphasize that they are identical to IBM models in all important performance characteristics but less expensive.

An attribute can be so central that it needs to be emphasized even though there is a competitor who has preempted it. 

Target Market

The name of the game is to develop associations that build or develop brand strength and attributes, that provide a point of difference, and to which the target market will respond. Just being different will help recognition, but a much stronger position will provide a reason to buy or adds value to the product. 

The reason to buy needs to be influential enough to be attractive to buyers.

Creating Associations

Associations are created by anything linked to the brand. Of course, the features and benefits of the product or service together with its package and distribution channel, are central to a brand image. Further, the brand’s name, symbol, and slogan are among the most important positions tools. 

Identifying and Managing Signals

It is important to know which associations are to be created. However, it is also necessary to address this question: 

What are the key signals of the associations that are to be formed – how can the perceptions the influenced?

Understanding Unanticipated Signals

Sometimes attributes that represent significant utility to the customer and are emphasized as product advantages by the firm turn out to have negative connotations which produce unanticipated signals of negative associations. It is critical to understand sometimes-subtle interpretations of brand associations. Thus, a second question is: 

What unanticipated signals may be generated by brand associations?

Maintaining Associations 

Often it is more difficult to maintain associations than to create them, in the face of demeans upon the marketing program and external forces alike. Among the guidelines are to (1) be consistent over time, (2) be consistent over the marketing program, and (3) manage disasters to minimize their damage. 

Be Consistent Over Elements of the Marketing Program

One of the dangers of making alterations is that a change in the marketing program or the product line that makes perfect sense in isolation can affect the association. 

Be consistent. Changes at the margin can be tolerated, but an image usually has difficulties in dealing with inconsistencies. The customer will need to resolve them by adjusting perceptions. 

Managing Disasters

Chrysler

Chrysler was caught setting back odometers on cars driven by company executives. Lee Iacocca immediately pronounced in ads “We belt it,” and that customers would be compensated and the practice continued. 

Tylenol

Someone injected some poison into containers of Tylenol capsules. Johnson & Johnson immediately recalled all the products and relaunched only after redesigning the packages to make them tamper-resistant thereby providing a visible fix to the problem. They also supported the relaunch with aggressive advertising and promotions. Six months after the incident, they recovered 95% of their market share.

AT&T

AT&T while competing with a quality-and-reliability theme under the slogan “The right choice,” had a computer software breakdown. As a result, their customers failed Tom in half their long-distance calls during one day. AT&T admitted the problem, apologized to customers, explained the problem and its fix, and provided a discount day for their customers. 

The Name, Symbol, and Slogan

Names

The name is the basic core indicator of the brand, the basis for both awareness and communication efforts. Often even more important is the fact that it can generate associations that serve to describe the brand – what it is and does. In other words, the name can form the essence of the brand concept. 

A name can serve as a substantial barrier to entry once it is established. Consider the power of names like Velcro, Formica, and Kodak. A name can be more useful than a patent, which can be difficult and costly to defend. In contrast, a trademark or service mark can be enforced quickly by obtaining a temporary injunction, and need not terminate in some arbitrary period. If the innovation is closely tied to the name, protection of the name can be enough to protect the innovation. 

An established brand can benefit from the establishment of a new sub-name. A surname can identify a new model which has particular characteristics, such as the Mercury Sable. It can also identify a group of models which have a common relevant attribute. Consider the Turbo series of computer software products by Borland: Turbo Pascal, Turbo Basic, Turbo C, and Turbo Assembly. 

A name is much more permanent than most other elements of marketing programs. A package, price, or advertising theme usually can be changed much more easily than a name. 

Generating Alternatives

Before creating a list of alternatives, it is useful to know which words and phrases will describe the associations that would be useful for the brand name to have. Useful associations might be: fast, deliver, wide selection, express, delivery truck, and order by catalog. The list can be expanded through word-association research – such as asking members of the target audience to list whatever comes to mind when words from the list are read, or placed on a screen. These associations can be used to generate a set of alternatives by:  

– Combining them into phrases: Video Express, Movie Truck
– Generating parts of words and combining them: Rent video
– Considering symbols for each: Popcorn Video
– Using rhymes: Groovy Movie
– Using humor: Cecil B. Video
– Adding suffixes or prefixes such as poly, Omni, vita, Este, dyne, lite, sun, ad, is, Ada: Moviette

A powerful source of a name or slogan is a metaphor. A metaphor is the use of a word or phrase denoting one concept in place of another concept suggesting a likeness between them. A metaphor is a way of communicating very compactly a complex idea. DieHard battery, for example, is a metaphor that suggests that the battery is like a tough person or plant that is hard to kill off.

Is It Easy to Learn?

An important aspect of a brand name is thus its memorability: will it be remembered? Although the memory process clear is complex, a substantial amount of research into both phycology and concussed behavior has provided at least some insight into which pertinent factors are related to memory. In general, a recall will be enhanced:

1. When a name is different or unusual to attract attention, and perhaps to arouse curiosity.  
2. When a name has something about it that is interesting – such as rhyme, alliteration, a pun, or humor. 
3. When a name elicits a mental picture or image.
4. When a name is meaningful.
5. When a name has some emotion.
6. When a name is simple.

Will the Name Support a Symbol or Slogan?

A symbol or slogan can become an important asset and need to be solidly linked to the name. When a name can stimulate and support effective symbols and slogans, the task of linking them to a name is made easier. The name Harlem Saving Bank of New York was limiting the bank, which wanted to expand outdid of both Harlem’s and its existing customer base. The cornerstone of their image change was a new name, Apple Bank. 

Does it Suggest Desired Brand Associations?

A brand like Ultrabite, The Silent Floor, Airbus, or WordPerfect can also identify brand attributes or other positive associations. Consider the associations of: 

– Mop ´n Glow
– Head and Shoulders
– Gee, Your Hair Smells Terrific
– Huggies

Are There Undesirable Associations?

A name can sound right, and have good associations, with a group of involved people who are considering it from the context of a brand with certain characteristics. But what will a naive person think when exposed to the name for the first time? For example, when United Airlines wanted a new name when they expanded into hotels and rental cars, they picked Allegis, drawn from the words allegiance and aegis. 

One way to determine the associations elicited by candidate names is to conduct word-associations research: simply ask members of the target audience to list whatever comes to mind when a word is read or placed on the screen. Among the words will be the proposed names. 

Is the Name Distinctive?

It is important to know in advance whether a name will create an association with a competitive product. In addition to legal considerations, there are market reasons why such associations are important. For instance, it can be an advantage for a product to be confused with a prestige brand. Consider for example the private-label grocery products with packages (and sometimes names) Silvi mar to those of their higher-priced, national-brand competitors. However, I usually desire to create a brand and a supporting marketing program that generate an identity separate and distinct from competitors’ so that others do not benefit or exploit the equity that is created. 

Symbols

The reality is that most firms and products are fairly similar; the differences that do exist, such as service quality, are difficult to communicate effectively and credibly. When products and services are difficult to differentiate, a symbol can be the central element of brand equity, the key differentiating characteristic of a brand. 

The symbol can by itself create awareness, associations, and a liking or feeling which in turn can affect loyalty and perceived quality.

Symbols can be nearly anything, including:

– Geometric shapes: Prudential’s rock.
– Things: the Wells Fargo stagecoach.
– Packages: Morton’s Salt’s blue, cylindrical box.
– Logos: Apple Computer’s apple with a bite out of it.
– People: the Maytag repairman.
– Scenes: Marlboro country.
– Cartoon characters: Mickey Mouse.

Attribute Associations

A symbol can communicate associations – even specific attributes. Consider the Travelers’ red umbrella, which compactly has consistently communicated over time that Travelers protects – it offers protection from the elements by providing a broad shield. Note the slogan: “You’re better off under the Umbrella.” Consider the difficulty of communicating such characteristics without the symbols, and the resulting constraints upon the marking programs even if such programs were successful. 

Positive Thinking

Some of the most successful and interesting symbols are cartoon characters that invoke humor and fantasy, symbols such as the Pillsbury Doughboy, the Jolly Green Giant, the Keebler Elves, Charlie the Tuna, Snoopy, and Mickey Mouse.

The fact that a character is liked or is associated with positive feelings such as fun or laughter is important. People engage in “affect transfer,” which means that they tend to transfer effect from one object to another which is perceived to be connected or related to it in some meaningful way.  

Symbols as Indicators of Brands and Product Classes

One role of a symbol, in addition to possibly generating associations, is to be an indicator of a brand. 

The symbol may also help the brand name to associate with a product class by linking with it. Research in consumer behavior and psychology provides clues as to what sort of symbol characteristic will affect the ability of a symbol to link with brand and product class. 

One guideline is to make the symbol unique. There’s s always the danger that the brand equity of one brand can be co-pet by someone who generates a similar symbol.

Another guideline is that it is much easier to learn the association between a symbol and a brand if the symbol reflects the brand – for example, if the rocking chair is the symbol for The Rocking-Chair Theater. 

Upgrading the Symbol

With so much invested in a symbol, it is risky to change it because of the relearning that will have to take place. On the other hand, the symbol can become dated and start to develop some undesirable old-fashioned, stodgy connotations. Several films have successfully updated their symbols over time to keep them in touch with the times while still retaining their heritage and associations. 

Auth Jemima has traded in her kerchief for a stylish, gray-streaked hairdo and has added earrings and a white collar. The change was intended to provide a more contemporary look while preserving the warmth, good taste, and reliability that is associated with the symbol. 

Slogans

A name and symbol in combination can be an important part of brand equity. However, there is a limit to what a single word and symbol can do. For instance, a name like Ford, with its symbol, is pretty much set in concrete – such a brand usually does not have the luxury of selecting another name or symbol to reinforce a positioning or repositioning strategy. A slogan, however, can be tailored to a positioning strategy and added to a brand name and symbol. It has far fewer legal and other limitations than does either a name or a symbol. 

A slogan can provide an additional association for the brand. Ford wanted to add a quality association to this name. The slogan “Quality is Job No. 1” provided the vehicle.

A slogan can remove some ambiguity from the name and symbol. Maybe the line has a mixed image, but “Smart, beautiful, Maybelline” is very specific. 

 Another capacity that a slogan has is its ability to generate equity of its own which can be exploited. Consider AT&T’s “Reach out and touch someone” slogan, which has associations with feelings of warmth and friendship, as well as an active component. 

Brand Extensions, the Good, The Bad, and the Ugly

The Good: What the Brand Name Brings to the Extension

Brand Associations

Purchase decisions often are based on a limited number of product attributes. A credible and sustainable point of differentiation concerning a key attribute can be difficult to create, especially if one’s competitors are established. 

There are a host of brand associations that can provide a point of differentiation for an extension. Brand extensions fit into seven approaches:

1. Same product in a different form: Cranberry juice cocktail and Dole Frozen Fruit Bars.
2. Distinctive taste/ingredient/component: Philadelphia Cream Cheese Salad Dressing.
3. Companion products: Coleman camping equipment, Mr. Coffee coffee, Colgate Toothbrushes.
4. Customer franchise: VISA traveler’s checks, Sears Saving Bank.
5. Expertise: Honda’s experience in small motors helped its lawn mowers, and BIC’s razors were aided by competence in making disposable inexpensive plastic items.
6. Benefit/attribute/feature: Ivory “mild” Shampoo.
7. Designer or ethnic image: Pierre Cardin wallets, Porsche sunglasses.

Quality Associations

In many situations, product-attribute positioning may be futile. A brand can get into a specific battle – the brand with the most fiber, the fates frequency response, the most effective aspiring, the lowest number of complaints, etc. However, such claims may be short-lived – competitors may alter their product and challenge the claim, or surpass it. Further, customers get confused: they disregard the competing claims and decided based on an intangible perception of quality that is not necessarily based on specific attributes. 

Often the use of established brand names is a good way to achieve a quality perception. Thus, the HP name provides thousands of products with an umbrella quality reputation that usually means far more than the specifications of individual HP products. 

Awareness/Presence  

The first step in gaining acceptance of a new product is developing awareness of the brand name and associating it with the product class. For this reason, a recognized name can translate directly into a market advantage.

Creating awareness of a name and associating it with a product class can be expensive. Over $200 million was reportedly spent in chagrin’s Esso to Exxon. 

The use of a recognized brand name on a new product automatically provides name recognition and reduces the communication tasks to the more manageable one of associating the name of the new product class. 

Trail Purchase

A brand name attached to a new product reduces the risk to prospective buyers. It means that the firm is established, is likely to be around to support the product, and is unlikely to promote a flawed product. 

Better: Extensions Can Enhance the Core Brand

The extension can enhance the core brand. Instead of extensions wearing the brand name and draining their goodwill, the extensions should reinforce their image, providing a building function. Thus, Weight Watchers brand extensions are firmly positioned as weight-control products. They increase the brand’s visibility and support the main association. 

An extension can provide name recognition and associations to new segments. 

The Bad: The Name Fails to Help the Extension

The Name Does Not Add Value

When a brand name is added simply to provide recognition, credibility, and quality association, there often is a substantial risk that even if the brand is initially successful, it will be vulnerable to competition. 

The brand extension needs to provide a benefit if the product class is well established. For example, a designer’s name does not always guarantee success, because it does not add value to the product. 

The Name Confuses

The name can imply a very different product from what is being delivered. The success of Tuna Helper and Hamburger Helper prompted Betty Crocker to create a chicken version. However, the chicken product required more time, since the chicken content had to be prepared. Further, the name Betty Crocker Cookbook Chicken, which was supposed to suggest a quality home-cooked meal, instead was very confusing. 

The Fit is Poor

The extension needs to fit the brand. The customer needs to be comfortable with the concept of the brand name being on the extension. If the fit is poor, desired associations will not transfer but will distract, or even precipitate ridicule.

If a premium name such as Rolls Royce is attached to mundane products such as bicycles or games, customers may feel that the name is being exploited or that it is adding nothing except price. 

A basis of fit can be provided in a variety of ways. One basis of fit can be links between the two product categories. Relations between product classes were related to the acceptance of extension concepts:

1. Transferability of skills and assets: the “brand” is perceived to have the necessary skills and assets to make the extension. 
2. Complementary: the extension is used with the product classes associated with the brand. 

Fit can also be based on functional attributes relating to brand performance, or on intangible attributes such as prestige or status. 

Poor Quality Perceptions

Even when a brand is generally well regarded there will be some who will have had bad experiences with it, or for some other reason have the impression that it is low quality. Thus, the use of an extension will limit the market to those who are not unfavorably disposed to the brand.

The Ugly: The Brand Name is Damaged

The brand name often is the key asset of the firm. It can be more important than brick and mortar in terms of replacement investment. It is tempting to evaluate the extension as a business decision on its own merits. However, a key consideration should be the possible damage it could cause to the brand franchise. Having the extension fail is usually not nearly as bad as having it “succeed”, or at least survive, and damage the brand name by creating undesirable attribute associations, damaging the brand’s perceived quality, or altering existing associations.

Undesirable Attribute Associations are Created

An extension will usually create new brand associations, some of which can be potentially damaging to the brand in its original context. 

There is certainly the possibility that Sunkist Fruit Rolls hurt the Sunkist health mage, the Black & Decker small appliances hurt their power-tool image, and the Sears Financial Network hurt the retailer’s image of value. 

Such predicted transfer of negative associations does not always occur. General Mills was very reluctant to disturb the Cheerios brand associations of being a non-sugar cereal. They tested Honey Nut Cheerios for a long time, and even tested adult cereal positions, to avoid the Cheerios core market. However, the extension did not damage the sales of Cheerios at all, even though it was used by the same customers. It instead cut into the pre-sweetened portion of their diet. 

Under what conditions will an extension’s potentially negative associations be transferred to the original brand context? The transfer should be less likely if (1) the original brand associations are very strong, (2) there is a distinct difference between the original brand and the extensions, and (3) the difference between the original brand and the extension is not so extreme as to make the extension appear incongruous. 

Existing Brand Associations are Weakened

The brand associations created by the extension can fuzz a sharp image which has been a key asset. The dangers are particularly acute when a brand’s key association is a product class – Kleenex, Perrier, and Tampax, for example, all are synonymous with a product category.

It is important to make a distinction between adding associations and diluting them. Jell-O used its associations with pudding and creamy taste, plus it’s wholesome/fam-ily-tingling associations, to introduce Jell-O Pudding Pops. The Jell-O name helped communicated the product concept and assisted recognition and credibility as well. 

As a brand is extended its product-class associations may be weakened, but it may also develop a useful association with a type of product. One consideration in making an extension decision, then, is whether an extension set can form a coherent whole so it includes useful specific product-oriented associations. 

When the brand associations are not product-related, there is more latitude. Thus, when the dominant associations are the personality of Aunty Jemima, the lifestyle of the Sharper Image customers, the technological superiority of HP, or the fashion/style of Varner, the extension can go further afield without affecting the existing associations. 

Quality Image is Affected

A reputation of perceived quality is the basis of sustainable competitive advantage for many businesses. There should be a concern that an extension widely exposed but of inferior quality might damage this reservoir of goodwill. 

General Mills attempted to capitalize on the Lacoste alligator, an authentic status symbol during the 1970s, by extending the name into a wide variety of clothing items and by reading out to new target markets. Observers have attributed the resulting sharp sales fall to wreaking the upscale sportsman association. All of a sudden the alligator no longer was a status symbol. 

Even if the extension is successful, there will be those who dislike some aspect of it or its positioning, and others who have had a band use experience e with the extension. This group may become a problem for the original brand, as their loyalty may be reduced. In the long run, the more exposure that the brand receives via extensions, the largest will the group of people who will have had a bad experience, or hold a negative attitude toward the brand in some setting. 

Attaching the brand to a lower price point enhances the risk that the quality image of the brand itself will be affected. 

The Brand Franchise is Cannibalized 

An important part of brand equity is the brand’s customer loyalty. If sales of a brand extension come at the expense of the original brand (the original brand’s sales are cannibalized), the extension’s sale may not compensate for the damage to the original brand’s equity. 

Campbell’s, after trying a series of extensions such as Campbell’s Cup, Campbell0s Chunky, Campbell’s “Home Cooking”, and Campbell’s Creamy Natural, introduced a soup line under the Prego name. The Prego brand provides an Italian soup position that is likely to sharply attack the Progresso line of Italian-style soups, which had been taking share from Campbell’s without cannibalizing the basic Campbell’s line.

More Ugly: A New Brand Name is Foregone

Perhaps the worst potential result of an extension is a foregone opportunity to create new brand equity. Consider where P&G would be without Ivory, Camay, Dreft, Tide, Cheer, Joy, Pampers, Crest, and their 70 or so other brands. Consider how much more value is represented by the P&G brands than a set of brands such as P&G bar soap, P&G laundry detergent, and so on.

Establishing a new brand name provides a vehicle with which to generate a set of distinct associations without being burdened with an existing set. 

A new brand also provides a platform for growth. For example, after introducing Campbell’s Prego name for a line of spaghettini sauces to compete with Ragú, the Prego name was then available for use in other lines, such as frozen Italian entrees. 

The establishment of a unique new brand name, then, involves the consideration of:

– The strength of the name association and its usefulness in telling the brand story. Does the name help communicate the task? Does it make learning the brand message easier?
– The strength and usefulness of the name in creating long-term loyalty and advantage. Is it unique, and likely to be superior to competitors in stimulating associations?
– The cost of establishing the name, gaining awareness and associations. Can the brand justify marketing support adequate to establish the name?

How to Go About It?

Developing a brand extension systematically involves three steps: identifying brand associations, identifying products linked to those associations, and sleeting the best candidates from that product list for concept testing and new product development. 

What are the Associations?

The first step is to determine the associations with the brand name. 

– Name associations: what comes to mind when the rolling brands are mentioned?
– Projective techniques: Jan had just finished eating Campbell’s tomato soups and felt…
– Exploring perceptual differences: what other brand is it different from and why?

Determining Candidate Product Classes

For each of the major associations, or sets of associations, the next step is to identify related product categories. Again, the customers could be asked directly to generate names of products related to associations. 

Another approach is to focus on such bases of fit as complementary, transferability of skills and assets, user types, attributes, benefits, components,s, and symbols. Consider complementarity – which other products would be used in the same application (perfume with lipstick). Transferability of skills and assets reflects the fact that makers of products (such as potato chips) will be perceived to have the capability of making some other products (such as pretzels) better than others (such as pickles).

Selecting Candidate Products

From the resulting list of products, the next task is to select a limited number to explore through a concept-testing stage. Two primary criteria should be used. First, the brand should be perceived to fit the extension. Second, it should provide some point of advantage. 

A particularly common fit problem occurs when a brand is used on a trivial (for the brand) product class, a product in which there is little perceived differentiation. The brand will then be perceived to be exploiting its name because it has little to offer. Further, it will probably be perceived as being overpriced.

A second criterion to be used in selecting candidate extensions is that the extension should provide a point of advantage. If a customer cannot say why he or she would like a proposed extension, there is cause for concern. The name should provide a reason to buy. It should suggest a benefit such as higher quality, more chocolate, more reliable performance, or a feeling of status. 

Strategy Considerations

When Does An Extension Make Sense?

A brand extension will tend to be an optimal route when:

1. Strong brand associations provide a point of differentiation and advantage for the extension.
2. The extension helps the core brand by reinforcing the key associations, avoiding negative associations, and providing name recognition. When the brand name provides only name recognition and a perceived quality umbrella, often the extension will be vulnerable to competition.
3. The category will not support the resources needed to establish a new name, or the new name will not provide a useful set of associations or a platform for future growth. 

Think Strategically

The first extension will probably build up some of those associations and weaken others. The resulting set will then provide the bias for future extension, and inhibit others. Thus, it is important to think through which umbrella associations should ultimately provide the brand group with a fit logic and a source of differentiation and advantage. 

Use Nested Brand Names

It is possible to develop brand names within brand names and use them to develop associations and platforms for new growth. For example, Black & Decker hand a line of appliances designed to be mounted off the kitchen counter. 

A nested brand name provides the reassurance of an established name and the product-attribute associations as well. The only problem is that it still represents a new name that needs to be established. Unless there is a sales base, and the will and ability to establish the name, the name may provide confusion instead of value. 

The State in the Product Line Cycle

A brand extension has a larger comparative advantage in an established product class when the brand name helps generate awareness, associations, and distribution in a cluttered marketplace. By contrast,s the risk to a brand name is greatest when a product is young. 

Protecting and Nurturing the Brand Name

The viability of growing by using extensions is based on the equity of the original brand name. Consequently, it is cruel that the name is protected and nurtured. Since its associations can be influenced by any market activity, the marketplace needs to be actively managed. In particular, sales promotions, product compositing decisions, distribution decisions, and pricing policies can affect the brand.  

Revitalizing the Brand

Increasing Usage

When developing programs to increase usage, it is useful to begin by asking some fundamental questions about both the user and the consumption system in which the product is embedded: why isn’t the product or service used more? What inhibits the usage decision? How does the light user differ from the heavy user in terms of attitudes and habits?

In response, product usage can be precipitated in two ways: by increasing the frequency of use, and by increasing the quantity used in each application. 

Increasing the Frequency of Use

– Reminder Communication: Some people may be aware of the brand itself, the problem is that they might not think of using it altogether. In these cases, reminder advertising may be what is needed.  
– Positions for Frequent or Regular Use: Products can change an image of occasional usage to one of frequency usage by repositions campaign. For example, the advertising campaigns for Clinique’s “Twice a day” moisturized and “Three glasses of milk per day” both represent efforts to change the perception of the products involved. 
– Make the Use Easier: asking why customers do not use the product or service more often can lead to approaches for making product use easier. 
– Provide incentives: incentives can be provided to increase consumption frequency. Programs such as the airlines’ frequent flyer plants can affect usage.
– Reduce undesirably consequences of frequent use: sometimes there are good reasons why a customer is inhibited from using the product more frequently. If such a reason can be addressed, usage may increase. 

Finding New Uses

The detection and exploitation of new functional use for a brand can rejuvenate a business that has been considered a has-been for years. A classic example is Jell-O, which began strictly as a dessert product but found major sources of new sales in applications such as Jell-O salads. 

The identification of new uses can best be obtained by market research by determining exactly how customers use the brand. From the set of uses that emerge, several can be selected to pursue.

Another tack is to look at application areas of competing product forms. The widespread use of raising prompted Ocean Spray to create dried cranberries. 

Entering New Markets

In some cases, the new markets may require product modifications. Texas Instruments looked at the previously neglected women’s market for calculators as a way to revitalize this mature, competitive business. Around 60% of all calculators were purchased for women, but few were designed specifically for them. The approach was to turn calculators into fashion accessories under the name Nuance. 

Repositioning the Brand

Changing Associations

A positioning strategy can become inappropriate because it becomes obsolete over time, the target market ages, or the association becomes less appealing as taste and fashions change. 

A positioning strategy can also simply wear out. The target segment becomes saturated: new associations and associated segments are needed to generate growth. 

Among the brand that has achieved a boost by repositioning have been:

– Campbell’s Soup, once positioned as a lunch supplement. 
– Geritol, the iron and vitamin supplement.

Augmenting the Product/Service

When a product is close to becoming a commodity considered augmenting it, providing services or features not expected by the customer as they go beyond anything being offered. Two ways are to win: do something better, or do something extra or different. With a mature product, it often is more feasible to do something extra and different than better.

Differentiation of the package is one way to offer a differentiating extra which can stimulate a new look to a tired product class. 

The need is to find augmentations that the customer will value, and that are linked enough to the product so that it will in fact benefit. The process starts by understanding the customer: what are the problems that are irritating to the customer – that make a difference? Is there any way that added services can deal with them? In what way is the customer dissatisfied? What can be done?

 Global Branding

A Global Brand

Should there be a global brand – a single name, symbol, and slogan together with common associations? Should the same familiar brand name be used throughout the world? Or should a variant, a related but different brand name, be adapted for each country, or even for different regions within a country? If different brands are now used, should they be replaced by a global brand name?

A key to the argument for a global product is the economies of scale that result from the worldwide volume – regarded as crucial to being competitive in many industries. Of course, some manufacturing and product design economies of scale do not depend upon the use of a global brand. 

A global brand can have substantial advantages in gaining brand awareness when customers travel between countries. In Europe and elsewhere where between country travel is extensive, such exposure can be important to a brand. 

A global brand can have some useful associations. Just the concept of being global can symbolize the ability to generate competitive products in addition to strength and staying power. Such an image can be particularly important in pricey industrial products or consumer durables like cars or computers where there is costumers risk that a product may be unreliable or be technologically surpassed by a competitor. 

A global brand often provides a country association for a brand that is very established in one country and for which the country association is part of the essence of the brand. 

Targeting a Country

Even if the name is not established, the constraint that the name, symbols, and associations work in all countries is very confining. Most names, especially names with useful associations, will have a damaging meaning in some countries. For example, P&G’s Pert Plus, the very successful combination shampoo conditionally, is sold as Rejoy in Japan, Rejoice in much of the Far East, and Vidal Sassoon in the U.K. because the Pert Plus name or something similar was preempted. 

A similar problem exists for symbols and associations. Those that are “universal,” that work in all settings, are not necessarily the most effective. Consider, for example, Heinz baby food and Levi jeans which both have strong value positions in the U.S. and premium positions in other markets. Two very different tracks will need to involve very different symbols and associations. 

A local brand can benefit from distinct associations that can be useful – even pivotal: is there any tendency to “buy home-grown,” or any positive feeling toward local traditions or characteristics, that can be integrated into the brand’s positioning strategy? Or, does the global brand have negative associations locally because it has an undesirable meaning in some countries, or is it tied to a country’s politics and thus subject to the ups and downs of international events?