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1 Chapter 08
2 Build the Brand
1.1 ETHICAL DIMENSION 8
Ethical Perspective
1. Diageo: The company faces a challenge—to find effective digital technologies that connect
with younger customers while maintaining ethical standards regarding underage drinking.
How should the company deal with this challenge? If you were CEO at Diageo would you
sponsor a virtual bar in Second Life? Why or why not?
2. Customers: Do younger customers have a responsibility to voluntarily not participate in
adult activities in virtual communities like Second Life?
3. Government: Given the growth of virtual communities, should the government create
stricter guidelines for underage access to adult content?
1.2 KEY TERMS
brand A name, term, sign, symbol, or design, or a combination of these elements, intended to
identify the goods or services of one seller or groups of sellers and to differentiate them from
those of competitors.
brand strategy The unique elements of a brand that define the products sold by a firm.
brand identity A summary of unique qualities attributed to a brand.
brand equity A set of assets and liabilities linked to a brand’s name and symbol that adds to or
subtracts from the value provided by a product or service to a firm or that firm’s customers.
brand awareness The most basic form of brand equity is simply being aware of the brand.
Awareness is the foundation of all other brand relationships.
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brand loyalty The strongest form of brand equity and reflects a commitment to repeat
purchases.
perceived quality The conveyed perception of quality of a brand that is either positive or
negative.
brand association When customers develop a number of emotional, psychological, and
performance associations with a brand. These associations become a primary purchase driver,
particularly with brand loyal users.
brand assets Other assets brands possess such as trademarks and patents that represent a
significant competitive advantage.
stand-alone brands Brands created to be separate from a company brand that can insulate the
company if there is a problem with the brand.
family branding The creation of brands that have synergy between them in terms of the overall
company brand.
category extensions When a firm uses its brand to expand into new product categories.
national brands Products created, manufactured, and marketed by a company and sold to
retailers around the country and the world.
store brands Brands created by retailers for sale only in their store locations.
licensing When a fi rm offers other manufacturers the right to use their brand in exchange for a
set fee or percentage of sales.
co-branding Joins two or more well-known brands in a common product or takes two brands
and markets them in partnership.
general warranty Broad promises about product performance and customer satisfaction.
specific warranty Explicit product performance promises related to components of the product.
1.3 APPLICATION QUESTIONS
1 You are the product manager for Ralph Lauren’s Polo shirts. What specific information are
you trying to convey in the brand’s iconic polo pony logo? For example, what does the Polo
brand say about quality, features, style relative to the Tommy Hilfiger or Lacoste brands?
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4. Johnson & Johnson have been able to establish strong brand equity for its line of baby
products. What benefits does J&J have because of its brand equity for these products?
5. You have been asked by Coke’s product manager to present the arguments for and against
extending the Coke brand to a new cola drink. What would be the arguments for and against
extending the Coke brand to a new cola drink?
6. SanDisk is introducing a new MP3 player and you are responsible for creating the package
design. What key information and other creative elements would you include on the
package?
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MANAGEMENT DECISION CASE: Developing and Growing Brand Equity in an Iconic
Brand
Questions for Consideration
1. For the past several years, in order to sustain sales and profit growth Harley has relied
heavily on baby boomers to buy a motorcycle in an effort to recapture their youth and
rebellious. However, that market segment is quickly aging out of mainstream motorcycle-
buying consumers. Identify one other market segment that you believe Harley should target
more strongly in the future. What product modifications or other changes do you recommend
to make the brand even more valuable to this new target market?
2. Licensing the brand name and symbol is an important source of revenue for Harley. What
types of products do you think do not fit with the Harley image and therefore are not good
candidates for licensing by Harley? Develop a list and discuss your selections.
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3. Warranties and service agreements play in important role in communicating a company’s
willingness to stand behind its products. Research the warranty coverage and how well the
Harley dealership network stands behind the product. How does the warranty coverage and
service provided by dealers enhance the brand value of Harley?
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