CH10: Building Strong Brands

Question 1

brand

Answer 1

name, term, sign, symbol, design, or combination, intended to identify the goods or services of one seller or group of sellers and differentiate them from those of competitors

Question 2

ultimate purpose of the brand

Answer 2

create value for consumers, company, and collaborators that goes beyond the value created by the product and service aspects of the offering

Question 3

branding

Answer 3

the process of endowing products and services with the power of a brand

Question 4

brands’ main roles for consumers

Answer 4

• set and fulfill expectations
• reduce risk
• simplify decision making
• take on personal meaning
• become part of identity

Question 5

brands’ main roles for firms

Answer 5

• simplify product handling
• organize inventory and accounting
• offer legal protection
• create brand loyalty
• secure competitive advantage

Question 6

brand equity

Answer 6

monetary value of a brand; net present value of all expected future returns generated by the brand; part of “goodwill”

Question 7

goodwill

Answer 7

monetary value of all intangible assets of a company, e.g. brands, patents, copyrights, know-how, licenses, etc.

Question 8

the 3 methods of measuring brand equity

Answer 8

• cost approach
• market approach
• financial approach

Question 9

cost approach to brand equity

Answer 9

calculates brand equity based on historical costs associated with the brand; costs of brand development

Question 10

market approach to brand equity

Answer 10

estimates brand equity by measuring the difference in revenues of a branded vs unbranded offering, adjusted for brand-related expenses; e.g. Morton Salt vs generic salt

Question 11

financial approach to brand equity

Answer 11

evaluates brand equity as NPV of a brand’s future earnings; steps include: compute future cash flow, estimate brand contribution to future cash flow, adjust the cash flow based on brand-related risk factors to future earnings

Question 12

brand power

Answer 12

ancillary value contributed by the brand to a product or service; the degree to which the brand influences the way consumers interact with the brand; can be positive or negative

Question 13

what is brand power based on?

Answer 13

• consumer brand knowledge
• brand associations

Question 14

what happens in the case of neutral brand power? [was part of a question in chapter test]

Answer 14

the brand-name product is essentially a commodity, and competition will be based on price

Question 15

brand audit

Answer 15

assessment of brand health, used to uncover sources of brand equity and suggest ways to improve/leverage brand equity

Question 16

brand tracking

Answer 16

tracking results from brand audits over time, and making adjustments as needed

Question 17

brand mantra

Answer 17

short and vivid articulation of the heart and soul of the brand used internally to guide org and employee actions

Question 18

characteristics of a good brand mantra

Answer 18

• communicate brand’s uniqueness
• simplify brand essence
• inspire

Question 19

characteristics of brand elements

Answer 19

brand-building:
- memorable
- meaningful
- likable

defensive:
- transferable
- adaptable
- protectable

Question 20

brand characters

Answer 20

special type of brand symbol with human characteristics, used to enhance likability and show that the brand is interesting and fun (e.g. Tony the Tiger, Mr. Peanut)

Question 21

brand personality

Answer 21

specific mix of human traits that we can attribute to a particular brand; consumers gravitate towards brands that are like them

Question 22

secondary sources of brand knowledge

Answer 22

• places (e.g. Kenyan coffee)
• things (e.g. related charity/foundation)
• people (e.g. celebrities)
• other brands (e.g. co-branding)

Question 23

brand hierarchy

Answer 23

the way in which a company’s brands are related to a company’s products and services, as well as to one another; e.g. GM > Chevrolet > Corvette

Question 24

brand portfolio

Answer 24

set of all brands and brand lines a particular firm offers for sale in a particular category or market segment; e.g. Coke has Coca Cola, Sprite, etc.

Question 25

the 3 main brand portfolio strategies

Answer 25

- house-of-brands strategy - branded-house strategy - sub-brand strategy

Question 26

house of brands portfolio strategy

Answer 26

individual or separate family brand names; e.g. P&G

Question 27

branded house portfolio strategy

Answer 27

corporate umbrella or company brand name; e.g. GE

Question 28

sub-brands portfolio strategy

Answer 28

combines two or more corporate, family, or individual product brand names; e.g. Kellogg's

Question 29

flagship product

Answer 29

product that best represents or embodies the brand to consumers

Question 30

branded variant

Answer 30

specific brand lines supplied to specific retailers or distribution channels; e.g. Levi's sells different jeans at Target than at its own retail locations

Question 31

co-branding

Answer 31

two or more brands marketing together; same company, joint venture, or ingredient

Question 32

benefits of co-branding

Answer 32

- leverage multiple brands - attract new customers - reduce go-to-market cost - valuable means to learn about consumers

Question 33

drawbacks of co-branding

Answer 33

- less control over brand associations - abnormally high consumer expectations - potential overexposure

Question 34

brand value stages

Answer 34

1. marketing program investment 2. customer mind-set 3. brand performance 4. shareholder value

Question 35

brand value chain multipliers

Answer 35

1. program multiplier feeds from program investment to customer mind-set 2. customer multiplier feeds from customer mind-set to brand performance 3. market multiplier feeds from brand performance to shareholder value

Question 36

brand repositioning strategies

Answer 36

- back to basics - reinvention

Question 37

benefits of brand extension

Answer 37

- consumer carry brand expectations to new extension - easier to convince retailers to stock new items - reduce launch costs

Question 38

drawbacks of brand extension

Answer 38

- brand dilution - forgo chance to create new brand with separate identity - potential cannibalizing effects

Question 39

brand dilution

Answer 39

consumers no longer associate a brand with a specific or similar set of products and start thinking less of the brand as a result

Question 40

guidelines for managing a brand crisis

Answer 40

- empathy - value - strategy (including authenticity) - innovation

Question 41

the 2 defining characteristics of luxury goods

Answer 41

- quality - uniqueness

Question 42

the key principles of luxury brand management

Answer 42

- all marketing decisions must be aligned to ensure a consistent image - create a premium, aspirational image - span categories, and thus have a broadly-defined competitor range - protect identity and aggressively combat trademark infringement and counterfeits - all brand attributes must be aligned with the image of the brand, including secondary associations