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BRAND NEW WORLD

Based on information supplied by: David Haigh Brand Finance plc

Defining the Brand


a name, term, sign, symbol, design, or a combination of them which is intended to identify the goods or services of one seller to differentiate them from those of the competitors. Philip Kotler a trademark which through careful management, skilful promotion and wide use come in the mind of consumers to embrace a particular set of values and attributes both tangible and intangible. John Murphy

Brand v. Product?
A product is something that is made in a factory whilst a brand is something that is bought by a consumer. A product can be copied by a competitor whilst a brand is unique. A product can be quickly outdated whilst a successful brand, properly managed can be timeless. Stephen King

Brand Differentiation
Brands put up two major barriers to competition through differentiation: Brands create a legal barrier protecting a bundle of rights covering names, colours, logotypes and even smells and sounds.

Brands create a psychological barrier to competition relating to a package of functional and emotional attributes.

Brand Attributes
Brands create a pact between company and customers through the creation of an emotional tie linked to the brand attributes:

Functional attributes: Ensuring recognition Simplifying selection Guaranteeing origin Confirming quality

Emotional attributes: Reassurance Association Aspiration Self-expression

Why Brand?
Successful brands have the capability of securing higher prices or volume Brands help to stabilise long-term demand in the market Established brands provide a more effective means of stretching into new product or geographical markets Brands therefore add real bottom line financial benefit

Differentiation
Market advantage is gained through differentiation. This differentiation means moving from the tangible to the intangible, which is the emotional pact that secures consumers. Examples? The chemical Aspartame was re-branded Nutrasweet The man made fibres Elastomeric became Lycra Hutchison mobile phones became Orange Silicon chips became Intel Inside.

Types of Branding
There are many factors to take into consideration in order to understand which type of branding is suitable to a particular company and sector, most importantly: Market research is essential Understanding the consumer is vital Define the audience Establishing how to reach them

Endorsement branding
Endorsement branding works well to add credence to a product or company. It can be a considered as a partnership or a branded network. A good endorsement can help meet targets, increase cost-effectiveness, improve overall brand identity and increase awareness Endorsement branding can provide advantages over rivals, and can give consumers the emotional security attached to firms which are respected and well-known

Personality Branding
Individual partner, character, founder, or an historic figure can represent the ethos the brand pervades. Characters or individuals within a company are promoted as experts in their field, or media personalities, and become established gurus. Individuals can be built up through the media, and lend credibility and interest to the company, eg: Virgins Richard Branson and the Virgin brand Luxury goods sector Calvin Klein, Tommy Hillfiger Computer games characters Lara Croft, Super Mario and Sonic the Hedgehog

Sub Branding
To effectively work amongst different audiences companies need to use different brands to represent different qualities Globalisation and competition forces many companies to expand both geographically and by product/ service therefore creating sub-brands Acquiring companies and keeping them as subbrands is also increasing in business practice Careful positioning of the sub-brands is required as to maintain the equity of the mother brand. The desire to sub-brand partly stems from the success of niche brands.

Internal brand building


Only if the internal communications succeed will the external communication work effectively In developing a strong brand, you need to know your customers and what they want and the brand is there to represent the organisation or product. You need to analyse company vision, and strategy and build values your customers can take out. Once youve done the strategy, you start to express that visually and verbally. Chris Smosarski

Living the brand is the catch phrase of the 21st century.

How to
Company brochures, newsletters, forums and meetings, annual conferences and, increasingly popular, TV and radio stations are used to promote internal branding Consistency of media, regularity and measurement of success of the internal marketing are all needed to ensure that it is successful. Treat the internal communications as external communications Ultimately success is measured by the fundamental acceptance of brand values by employees.

External brand building


The marketing mix must be carefully constructed according to the audience. the organisation must understand the target audience and the best means of reaching that audience. In professional services and B2B organisations it may be that PR is more essential then advertising In the consumer world, mass advertising campaigns are often essential to generate the high awareness levels needed to ensure critical mass in the FMCG markets

How to
External communications terms there is a vast array of elements involved in successful brand building In professional services and B2B markets, use client events and presentations, marketing materials and brochures, PR and promotional research. In the mass consumer markets, media advertising, sales promotion, direct marketing, packaging and design, point of sale, publicity and PR, event marketing and direct response advertising can all be key.

Case Study - Virgin


Virgin have pioneered the concept of a branded venture capitalist, growing its business through successful partnerships which draw on the strength of the Virgin brand This success is embodied by more than 20 separate umbrella companies operating 200 companies world-wide Together they employ 25,000 people and total revenues around the world in 1999 will exceed 3 billion (US $5bn)

Case Study - Virgin


Virgin Group urnover analysis
Virgin Entertainment 2% Virgin Hotels 1% Virgin Rail 13% Virgin Trading 1% Others 8%

Virgin Atlantic 20%

Virgin Holidays 6%

Virgin Direct 19% Virgin Express 5%

Intl Megastore 9% UK Megastores 16%

Case Study - Virgin


In many respects Virgin is a virtual company it does not own many of the assets in its ventures and relies instead on finding the right partner Since the mid-1990s, Virgins joint ventures have involved leveraging the brand as a capital asset. Virgin contribute the brand and Bransons PR profile and the partners provide the capital input - the brand is certainly at the centre of everything Virgin. According to Branson, Virgin reflects a Japanese management structure keiretsu, where different businesses act as a family under one brand

Case Study - Virgin


Brands must not be built around products but around reputation, quality and price[People] should not be asking is this one product too far but rather, what are the qualities of my companys name? How can I develop them?Richard Branson, 1997 This philosophy has made Virgin one of the strongest brand names in the UK - around 96% of British consumers have heard of Virgin, and 95% can correctly name Richard Branson as its founder. If new business opportunities are profitable, they are rejected if they do not fit the brand values.

Case Study - Virgin


Potential businesses are evaluated by the five criteria that characterise the brand. The product or service must be, or have the prospect of becoming in the future: The best quality Innovative Good value for money Challenging to existing alternatives Bringing a sense of fun or cheekiness which Virgin has found consumers react far better to

Cost of branding
Good branding is an investment in a key corporate asset. It can be a costly exercise, but only when the returns are not recognised. It is not easy to estimate what good marketing costs, and it can vary greatly according to the target audience, the size of the company and the personnel conducting the marketing PR and marketing department must be accountable for these expenses.

Benefits of branding
DEMAND trade/ consumer recognition and loyalty lower sales conversion costs lower average trade discounts/ commissions lower staff acquisition/ retention costs more favorable supplier terms lower cost of capital production economies of scale UPPLY growing the total market new-user acquisition switching-user conversion existing customer retention cross-sell new products like-for-like price premium

Conclusion
Brands add intangible value to products and businesses and redefine the value of their company owners. A new recognition of the financial value of brand assets is now emerging in company Boardrooms and in the City. Sir George Bull, Chairman of Sainsburys It is now time for companies to fully recognise the value of brands and create brands that provide long-term advantage.

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