All 3 entries tagged Brand

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January 06, 2009

Outline of Research Project

Follow-up to Importance of Brands from Saya's Ramblings...

Introduction and background

·        What is branding, brand management, brand strategy, development of brands, historical approaches, where it stands today.

·        Evidence of brand value and importance of brands and branding today, for internal and external stakeholders:

·        Internal: marketing division, management, employees (human capital)

·        External: shareholders for their value creation, investors for their investment initiatives

Literature review and Theoretical underpinning

·        Economics of brands as a source of market value for firms.

·        The economic importance of intangibles (brands) in our economy today supported with some statistical evidence from critically reflecting on the literature review. An example of statistical; evidence includes: Increased R&D expenditure in healthcare sector, market-to-book value ratios of Fortune 500 companies and suggesting the higher market value over tangible assets.

·        The differences in value of brands within different industries (Sattler & Hupp, 2003)

·        How the theory of the firm, more specifically the resourced-based view (RBV) of the firm explains the importance of intangibles (brands) to regain the firms’ competitiveness in the marketplace. How brands play a pivotal role amongst all other intangible assets of a firm. Critically reflecting on the development of RBV and how it addresses issues of immutability, mobility, tradability, scarcity, substitutability and other characteristics of brand intangibles for a firm or a specific industry.

Aims and Objectives of this research

·        The goal of this research is to outline the linkages the brand equity to that of brand investments

·        This issue has been on the top of the agenda for marketers to try to justify spending in branding, marketing and other ancillary activities.

·        Using the theoretical backgrounds and literature review, the goal of this research will be to critically reflect on the findings and put things into perspective using the RBV of the firm and the Value, Rare, In-imitable, Non-substitutability (VRIN) model laid out by Barney (1991).

Data and Methodology

·        I shall first be using secondary financial data from firms which have a noticeable brand, both business-to-business (B2B) and business-to-customers (B2C)

·        I shall be looking into how analysts’ make recommendations from current earnings regarding the performance of future earnings and how (if any) brand equity plays a role in such recommendations.

·        A typical analyst report includes company profile, financial forecasts, operational performance and other sub-headings that highlight the overall firm’s outlook for the future. After careful consideration of various factors, the analysts then reports to the investors if the security of that firm is either a Strong buy, Buy, Hold or a Sell situation.

·        I shall try to look into how the recommendations of worlds top brands (approx 50) have changed over time and how has it been reflected in analysts recommendations. This way I shall try to highlight any anomalies (if any) or obvious movements in trying to find out the linkages of the brand financing with brand investments within capital markets.


·        Summarise the findings from the empirical analysis

·        Outline the possible problems faced during the study: while gathering, analysing, highlighting brand elements from reports, etc

·        Suggest further improvements in security analysis and modelling such with emphasis of brand equity and its overall impact on the business

·        Reflect on future research realms connected with my results

December 09, 2008

Importance of Brands

Follow-up to Brand Equity from Saya's Ramblings...

“A brand name represents a strong communication link between the firm and the market”

Market based assets: (Garvin, 1996)
•    Consumer trust
•    Perceived quality
•    Perceived value of brand

Brand instruments:
•    Trademarks
•    Symbols
•    Logo
•    Registered designs
•    Brand name and firms’ reputation
•    Integrated communication

Successful implementation of brand strategies:
•    Advertising
•    Media
•    Packaging
•    Networking and word of mouth to create a strong, favourable and unique association (Keller, 1998)
•    Public relations teams
•    Charity events
•    Low-cost promotions
•    Sponsorships
•    Linkages with other companies, spokespeople, personalities

Brand effects:
•    Competitiveness in the marketplace
•    By creating market-based assets perceived by the consumer, firms are able to nurture perceived brand value and consumer brand equity, which in turn create profitability for the firm
•    Brands create the identity of the firm in terms of name or trademark or a consumer influence on their minds
•    Brands enable consumers to make confident, purchase decisions thus easier for firms with previous brands to introduce newer brands, adding to less risk for firms to innovate to produce newer products and services
•    Brands are a key source of immutable assets for the firm, where they can not be copied by their competitors and thus differentiating feature, leading to sustainable growth

“Brand strategy is a policy for creating and nurturing sustainable competitive advantage. It consists of “the development and maintenance of sets of product attributes and values which are coherent, appropriate , distinctive, protectable and appealing to customers” (Murphy, 1992:3)

Brand strategy challenges:
•    High resources, budgets required
•    Impact on creating growth opportunities and market based assets
•    Coherent, consistent and integrated communications policy in the midst of immense competition (corporate communication)
•    The guarantee that the brand strategy will work. The effectiveness of the plans

Brand traits:
•    Memorable, simple, recognisable by customers, credible and deliverable (Blacket and Denton, 1992:79)


Blacket, Tom and Graham Denton (1992), Developing New Brands, in: John Murphy (Editor.), Branding a Key Marketing Tool (2nd), 73-85, Basingstoke, UK: MacMillan Press.

Garvin, David (1993), Building a Learning Organisation, Harvard, Business Review, 71(July-August)

Keller, Kevin Lane (1998), Strategic Brand Management: Building, Measuring and Managing Brand Equity, Upper Saddle River, New Jersey: Prentice Hall

Murphy, John (1992), What is Branding?, in: John Murphy, (Editor) Branding a Key Marketing Tool, London: Macmillan Academic and Professional Ltd.

November 24, 2008

Brand Equity

What is brand equity?

American Marketing Association defines a brand as “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those competitors”(Kotler, 2003, p. 418).

In essence, to brand a product or a service is to create marketable differences to differentiate it from other similar products or services in order to derive excessive profits to the company providing the service or product.

Although marketing activities and other activities create an impetus for brand creation, a brand ultimately resides in the minds of customers. Thus for the branding to be successful, it is essential for the customers to be convinced that there are meaningful differences among brands in the product or service category.

Brand equity is the added value endowed to products and services. This value may be reflected in how consumers think, feel and act with respect to the brand, as well as the prices, market share, and profitability that the brand commands for the firm. Brand equity is an important intangible asset that has psychological and financial value to the firm.

Srinivasan et al. (2001, p. 1) defines brand equity as “the incremental contribution ($) per year obtained by the brand in comparison to the underlying product (or service) with no brand-building efforts.” Furthermore he outlines the sources of brand equity through (1) brand awareness, (2) incremental attribute perception biases and finally through (3) incremental non-attribute preferences.

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