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Classification Of Brand Extension And Brand Endorsement Marketing Essay

1761 words (7 pages) Essay in Marketing

5/12/16 Marketing Reference this

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For ages, the brand permits to distinguish a good of a producer from another. The term “Brand” comes from the old Norse (old Irish) brandr, and means burn. The sheep breeders marked their livestock so, and continues today (Keller 2008). The expression is anyway “to mark with a branding iron”. We can use today this metaphor when the producer tries to “brand”, or burn, the image into the consumer’s mind, so draw a parallel between the image and the product’s quality.

A brand represents the holistic sum of all information about a product or group of products. This symbolic construct typically consists of a name, identifying mark, logo, visual images or symbols, or mental concepts which distinguishes the product or service. A brand often carries connotations of a product’s “promise”, the product or service’s point of difference among its competitors which makes it special and unique. Marketers attempt through a brand to give a product a “personality” or an “image”. Thus, they hope to “brand”, or burn, the image into the consumer’s mind; that is, associate the image with the product’s quality. Because of this, a brand can form an important element of an advertising theme: it serves as a quick way to show and tell consumers what a supplier has offered to the market.

Well known products acquire brand recognition. When a brand has accumulated a mass of positive sentiment among consumers, marketers say that its owner has acquired brand equity or brand franchise. Brand equity measures the brand’s value to the marketer. It is an assessment of the investment a company has made in a brand. Brand franchise measures the effect of this investment on the target market. When enough brand equity is created that the brand has the ability to draw buyers (even without further advertising), it is said to have brand franchise. A brand name comprises that part of a brand consisting of words or letters that humans can verbalize. A brand name that has acquired legal protection becomes a trademark.

Branding has become part of pop culture. Numerous products have a brand identity: from common table salt to designer clothes. Non-commercially, branding can also apply to the marketing of entities which supply ideas or promises rather than goods and services — such as political parties or religious organizations.

Consumers as a group may look on the brand as an important aspect of a product, and it can also add value to a product or service. It carries the reputation of a product or company. A branded laundry detergent may sell twice as much product as a store-brand detergent. Although the two products may resemble each other closely in almost every other respect, people have learned to regard the branded product as superior. In some cases they believe that because it costs more it offers better quality.

Advertising spokespersons have also became part of some brands, for example: Mr. Whipple of Charmin toilet tissue and Tony the Tiger of Kellogg’s.

History

Brands originated with the 19th-century advent of packaged goods. Industrialization moved the production of many household items, such as soap, from local communities to centralized factories. These factories, cursed with mass-produced goods, needed to sell their products in a wider market, to a customer base familiar only with local goods. It quickly became apparent that a generic package of soap had difficulty competing with familiar, local products. The packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product.

Many brands of that era, such as Uncle Ben’s rice and Kellogg’s breakfast cereal furnish illustrations of the problem. The manufacturers wanted their products to appear and feel as familiar as the local farmers’ produce. From there, with the help of advertising, manufacturers quickly learned to associate other kinds of brand values, such as youthfulness, fun or luxury, with their products. This kickstarted the practice we now know as “branding”.

According to the AMA (American Marketing Association), are called brands “a name, a term, a sign, a symbol, a drawing or a combinations of these elements that identify the goods or services of a seller and to distinguish these from those of the competitors”.

The professor Theodor Levitt provides an analysis that the competition is not about the “what we sell”, because the most enterprises could sell good products, but “how we sell it”. For example, consumer goods could be almost the same, but the difference comes from packaging, service, advertising, after-sales service, payment and credit terms, transport facilities… (Levitt 1960)

The marketers have to identify a product, but to distinguish a brand from another (Keller 2008). The differences between the brands into a category of products are sometimes rational and sometimes based on the emotion or the symbolic. It’s rational, when the notoriety of the brand comes from the product’s perform, for example Sony for a long time, or Apple in this last decade, firms that have a great innovation capacity. It’s more emotional for some firms like Coca or McDonalds that have got a competitive advantage because they are here for decades. They created a positive image around the brand.

Brand extension (Bouchet 2009)

If a line extension aims to offer more complementary products to the consumers, a brand extension aims to exploit the name, the notoriety and the competences of an existing brand to launch a new product in another category of the original products (Ladwein 1998, Bouchet 2009). For example, a line extension could be to sell ski shoes after having sold skis. We could find different sort of line extension, horizontal as seen before, or vertical. That’s consist to launch new products in another prices category, with sometimes a difference of quality too (Randall 1999). Some firms use a strategy of geographic extension too.

1/ Horizontal line extension

2/ Vertical line extension upside

3/ Vertical line extension downside

4/ Geographic extension

5/ Brand extension

B2B brand extension to the B2C market

Brand extension has been recognized as a strategic asset by most companies. In the consumer markets, the emphasis is usually on the products or a cluster of products, whereas in industrial markets the company name itself is often the brand name.

A brand extension will link the new products with the established brand or the company name, so as to generate consumer acceptance for a new product. The success of a brand extension is therefore determined by how consumers evaluate the brand. That provides a signal to the consumer about the qualities or characteristics of that new product.

The brand equity model of Aaker and Keller aims to investigate a consumer’s attitude toward B2B brand extension on the B2C market. They examine brand extensions outside the current brand offerings in three types of attributes, that is, marketing activities related to product innovation, environmental concern and community involvement. Their findings suggests that a marketing activity can facilitate a new product acceptance. If consumers perceive a “fit” between the original and extension product, they would transfer quality perceptions to the new brand extension.

Licensing

Co-Branding

Brand Architecture

How an organization structures and names the brands within its portfolio. There are three main types of brand architecture system: monolithic, where the corporate name is used on all products and services offers by the company; endorsed, where all sub-brands are linked to the corporate brand by means of either a verbal or visual endorsement; and freestanding, where the corporate brand operates merely as a holding company, and each product or service is individually branded for its target market.

(http://www.brandchannel.com/education_glossary.asp)

Monolithic :

= corporate brand, umbrella brand and family brand

Endorsed: EasyGroup.

= Endorsed brands and sub-brands.

Freestanding: P&G (voir truc en français)

= Individual product brand

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The brand architectures is the organizing structure of the brand portfolio that specifies brand roles and the nature of relationships between brands (Rajagopal 2003). Contemporary theories state that brand architecture is based on the efficacy of the attributes, derived advantages and brand system emerging in relation to the buying power of the customer.

The categories of brands play significant roles in the process of brand architecture for a company by:

Creating coherence and effectiveness

Allowing brands to stretch across the products and markets

Stimulating the purchase decisions by brand drivers

Targeting market niches and benefit positioning

House of brands. A branded house uses a single master brand to span a set of offerings that operate with only descriptive sub-brands. The house-of-brands strategy clearly positions brands on functional benefits and to dominate niche segments. Targeting niche markets with functional benefit positions is the main reason for using a house-of-brands strategy.

The principal attributes of the endorsed brand may be delineated as follows:

It incorporates the shadow brands

It generates indirect market impact with mother brands

It represents distinct product and market segments

Endorsed brands operate independently of the mother brands in the market

The advantages of the corporate endorsement of the product brands include:

Building umbrella brands

Establishing global corporate identity

Developing customer confidence

Monitoring key strategic brands

Enhancing the brand value in the new segments.

The growing prevalence of corporate endorsements and brand extensions, coupled with a focus on building a limited number of strong brands in international markets, has led firms to develop procedures to manage and monitor key strategic brands. A key objective is to maintain their identity and value in international markets. Two important aspects need to be considered:

The consistency of brand positioning in different countries and across product lines.

The value and/or risks of brand extensions in international markets. Widely different approaches have been adopted for managing strategic brands in international markets and assigning custody for them. Typically these vary depending on the organizational structure of the firm and the desired degree of control, and rang from having no explicit custody strategy to highly centralized tight control by corporate headquarters.

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