978-0132664257 Chapter 4 Solution Manual

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Chapter 4

Choosing Elements to Build Brand Equity

Chapter Objectives

1. Identify the dierent types of brand elements.

2. List the general criteria for choosing brand elements.

3. Describe key tactics in choosing dierent brand elements.

4. Explain the rationale for “mixing and matching” brand elements.

5. Highlight some of the legal issues surrounding brand elements.

Overview

Chapter 4 examines the elements that marketers can use to identify

and dierentiate a brand. Names, logos, symbols, characters, slogans,

URLs, jingles, and packages all in+uence a company’s ability to build

awareness and image for a brand and, consequently, have a direct

impact on the degree of positive brand equity that can be established.

Brand elements can be judged on the merits of their brand-building

ability by isolating the element in a consumer survey and measuring

consumers’ response to the brand based solely on the isolated

element. If the consumers infer or assume a certain valued association

or response, the element is said to contribute positively to brand

equity.

Six general criteria should govern a 3rm’s choice of brand elements.

First, an element should be memorable, or easy to recognize and

recall. Second, an element should be meaningful, or descriptive,

persuasive, inherently fun and interesting, and rich in visual and verbal

imagery. Third, an element should be likeable to consumers, in an

aesthetic sense and in an emotional sense. Fourth, an element should

be transferable within and across product categories, and across

geographical and cultural boundaries. Fifth, an element should be

adaptable, or +exible, and capable of being updated over time. Sixth,

an element should be protectable, both legally and competitively.

Next, the chapter discusses the bene3ts and drawbacks inherent in the

choice of each type of brand element. For example, selecting a

familiar-sounding name for a brand would likely lead to high

recallability, but recognition often requires brand names to be

dierent, distinct, or unusual. Fictitious or coined names are often used

to satisfy these criteria. Brand characters are bene3cial because they

typically aid awareness, reinforce key brand strengths, add elements of

fun, excitement, humor, etc., and can be transferred across product

categories. Consumer associations with a brand character can be so

strong, however, that they actually dampen awareness by dominating

other brand elements. Also, brand characters must be updated over

time.

The chapter ends by discussing how brand elements can be “mixed

and matched” for maximum equity building. For instance, brand

elements must be mixed to achieve dierent positioning objectives.. It

is also important to match brand elements by ensuring that they

harbor similarities that reinforce some shared meaning. Taken

together, the entire set of brand elements makes up the brand identity,

which re+ects the contribution of all the elements to awareness and

image.

Brand Focus 4.0 discusses legal issues for branding. These include

trademark protection from counterfeit and imitator brands, historical

and legal precedence, trademark issues with generic names, and

trademark issues with packaging.

Science of Branding

THE SCIENCE OF BRANDING 4-1

COUNTERFEIT BUSINESS IS BOOMING

The current size of the counterfeit market is estimated to be $600

billion, representing costs of $200 to $250 billion annually to U.S.

businesses. The fakes are soaking up pro3ts faster than multinationals

can squash counterfeiting operations, and they’re getting tougher and

tougher to distinguish from the real thing. The dierence can be as

subtle as lesser-quality leather in a purse or fake batteries inside a cell

phone. And counterfeiters can produce fakes cheaply by cutting

corners on safety and quality, as well as by avoiding paying for

marketing, R&D, or advertising.

The World Health Organization says up to 10 percent of medicines

worldwide are counterfeited besides luxury items and consumer

electronics. Counterfeiting has become increasingly sophisticated and

pervasive. To avoid being detected, counterfeiters are knocking o

smaller brands that don’t have the resources to 3ght back, focusing on

fewer high-end brands given the recent economic downturn, and

increasing prices on fake goods sold over the web to counter consumer

suspicions.

These days, 81 percent of counterfeit goods in the United States come

from China. Other sources are Russia, Ukraine, Pakistan, India, Mexico,

and several countries in Southeast Asia and Latin America. The

operations are 3nanced by such varied sources as Middle East

businessmen who invest in facilities in Asian countries for export, local

Chinese entrepreneurs, and criminal networks. The replication process

has also speeded up as counterfeiters have honed their engineering

skills and increased their speed.

Producing counterfeit goods is as pro3table as trading in illegal drugs

but does not carry the same risk. Some companies have decided to

target the end users of knocko products, hoping manufacturers will

eventually be forced to get a license and pay royalties. And some

patent holders are beginning to get creative and target anyone on the

supply chain who knowingly ignores counterfeit businesses.

Some provocative academic research shows that fake products are not

uniformly bad for companies. While some who cannot aord to buy

genuine luxury items may always buy fakes, other consumers will 3nd

that buying a counterfeit motivates them to later buy the real thing.

THE SCIENCE OF BRANDING 4-2

BALANCE CREATIVE AND STRATEGIC THINKING TO CREATE

GREAT CHARACTERS

Great characters can embody a brand’s story and spark enthusiasm for

it. But bringing a character to life through advertising requires

navigating a host of pitfalls. Character, a company based in Portland,

Oregon, helps create new corporate brand characters and revitalize old

ones. During three-day “Character” camps, a team from a client

company learns to +esh out a new or current brand character through

improvisational acting, discussion, and re+ection. Some tips for brand

characters presented at Character Camps:

Don’t be a shill—Human traits are appealing.

Create a life—Create a full backstory to 3ll out the character. This

ensures that the character can evolve over time and continue to

connect with consumers.

Make characters vulnerable—Even superheroes have +aws.

Imagine the long run—Don’t get rid of older characters just to

make room for new ones. Consumers can get very attached to

longtime characters.

Don’t ask too much—Characters with a simple task or purpose

work best. Using characters for new lines or other purposes can

dilute their eectiveness.

To be truly eective, brand characters have to be engaging in their

own right while staying true to the brand. Most characters though, are

conceived as short-term solutions to solve speci3c problems. If the

audience likes a character, companies face the challenge of turning it

into an asset. At this point some companies try to freeze all the

character’s attributes and preserve them.

Characters that are mass-marketed too heavily can also crash and

burn, but static characters can lose their appeal and fail to emotionally

connect with consumers. Viewers connect with characters whose

struggles are familiar.

THE SCIENCE OF BRANDING 4-3

THE PSYCHOLOGY OF PACKAGING

Cornell University’s Brian Wansink has conducted a series of research

studies into the consumer psychology of packaging. Four of his

fascinating 3ndings:

Packaging Can In+uence Taste—Our sense of taste and touch is

very suggestible, and what we see on a package can lead us to

taste what we think we are going to taste. The right words and

image on a package can have a big in+uence on our

expectations.

Packaging Can In+uence Value—Most people believe the bigger

the package, the better the price per ounce. Yet even the shape

of a package can in+uence what we think.

Packaging Can In+uence Consumption—Studies of 48 dierent

types of foods and personal care products have shown that

people pour and consume 18–32 percent more of a product as

the size of the container doubles. A big part of the reason is that

larger sizes subtly suggest a higher “consumption norm.”

Packaging Can In+uence How a Person Uses a Product—One

strategy to increase the use of mature products has been to

encourage people to use the brand in new situations, like soup

for breakfast, or for new uses, like baking soda as a refrigerator

deodorizer. Part of the reason such on-package suggestions are

eective is that they are guaranteed to reach a person who is

already favorable to the brand.

Branding Briefs

BRANDING BRIEF 4-1

UPDATING BETTY CROCKER

In 1921, Washburn Crosby Company, makers of Gold Medal +our,

launched a picture puzzle contest. The contest was a huge success—

the company received 30,000 entries—and several hundred

contestants sent along requests for recipes and advice about baking.

To handle those requests, the company decided to create a

spokesperson. Managers chose the name Betty Crocker because

“Betty” was a popular, friendly sounding name and “Crocker” was a

reference to William G. Crocker, a well-liked, recently retired executive.

The company merged with General Mills and introduced the Betty

Crocker Cooking School of the Air as a national radio program. During

this time, Betty was given a voice and her signature began to appear

on nearly every product the company produced. Prim and proper, Betty

was shown with pursed lips, a hard stare, and graying hair. Her

appearance has been updated a number of times over the years and

has become more friendly, although she has never lost her reserved

look.

Prior to a makeover in 1986, Betty Crocker was seen as honest and

dependable, friendly and concerned about customers, and a specialist

in baked goods, but also out-of-date, old and traditional, a

manufacturer of “old standby products,” and not particularly

contemporary or innovative. The challenge was to give Betty a look

that would attract younger consumers, but not alienate older ones who

remembered her as the stern homemaker of the past. Finally, Betty

Crocker’s look was also designed to appeal to men. A few years later,

Betty Crocker received another update as an ultramodern model,—the

current one. Betty Crocker now appears on cookbooks, advertising, and

online, where she has over 1.5 million Facebook friends, a Twitter

account, and a mobile app downloaded by millions.

BRANDING BRIEF 4-2

BENETTON’S BRAND EQUITY MANAGEMENT

Benetton built a powerful brand by creating a broad range of basic and

colorful clothes that appealed to a wide range of consumers. Their

corporate slogan, “United Colors of Benetton” embraces both product

considerations and user considerations, providing a strong platform for

the brand. Benetton’s ad campaigns reinforced this positioning by

showing people from a variety of dierent racial backgrounds wearing

a range of dierent-colored clothes and products.

In the 1980s, Benetton print ads and posters featured such unusual

and sometimes disturbing images as a white child wearing angel’s

wings alongside a black child sporting devil’s horns; a priest kissing a

nun; an AIDS patient and his family in the hospital moments before his

death; and 56 close-up photos of male and female genitalia.

Critics labeled these various campaigns gimmicky as “shock”

advertising and accused Benetton of exploiting sensitive social issues

to sell sweaters. Although the campaigns may have succeeded with a

certain market segment, they were certainly more “exclusive” in

nature by distancing the brand from many other consumers. U.S. sales

of Benetton products shrank by 50 percent to $52 million between

1993 and 2000. By 2001, the number of Benetton stores in the United

States dropped to 150 from 600 in 1987.

Since 2001, Benetton’s advertisements have featured more

conventional images—teenagers in colorful Benetton clothing.

Benetton maintained that the company would maintain its “socially

responsible” status by focusing on noncontroversial themes like racial

discrimination, poverty, child labor, AIDS awareness, and so forth.

BRANDING BRIEF 4-3

DO-OVERS WITH BRAND MAKEOVERS

Logos, symbols, packaging, and even brand names are being updated

to create greater meaning, relevance, and dierentiation. Some

high-pro3le examples and the challenges and diJculties their brand

makeovers encountered:

Tropicana

In February 2009, Pepsi introduced a dramatic overhaul to its

category-leading orange juice. Gone was the visual image of an

orange with a straw protruding from it; in its place was a close-up

image of a glass of orange juice and the phrase “100% Orange.”

Consumer reaction was swift and largely negative. Customers

complained about being unable to dierentiate between the

company’s pulp-free, traditional, and other juice varieties. Even

worse, customers also felt the look was too generic.

The Gap

After unexpectedly unveiling a new logo, the company asked

consumers on its Facebook page for comments and further logo

ideas. Feedback was far from kind, and after enduring a long

week of criticism, Gap management reverted to its iconic white

text logo and unique brand font.

Gatorade & Pepsi

Pepsi completely overhauled its Gatorade brand as well as its

classic Pepsi-cola product lineup. The new brand goal was to

reach athletes in a wide range of sports and experience levels

while positioning itself as the one-stop source for hydration and

other needs before, during, and after their workouts. Pepsi’s

makeover included a new logo—a white band in the middle of the

Pepsi circle that appeared to loosely form a smile. Both brand

makeovers received some negative feedback and the products

experienced sluggish sales afterwards.

Lessons

When changing a well received or even iconic brand element—a

character, logo, or packaging—two issues are key. One, the new

brand element must be inherently highly regarded. Two,

regardless of the inherent appeal of a new brand element,

changes are hard for consumers and should be handled carefully

and patiently.

Brand Focus

BRAND FOCUS 4.0

LEGAL BRANDING CONSIDERATIONS

According to Dorothy Cohen, under common law, “a ‘technical’

trademark is de3ned as any fanciful arbitrary, distinctive, and

nondescriptive mark, word, letter, number, design, or picture that

denominates and is aJxed to goods; it is an inherently distinctive

trade symbol that identi3es a product.” Trademark strategy involves

proper trademark planning, implementation, and control. A few key

legal branding considerations:

Counterfeit and Imitator Brands

Some products attempt to gain market share by imitating

successful brands. These copycat brands may mimic any one of

the possible brand elements, such as brand names or packaging.

Many copycat brands are put forth by retailers as store brands,

putting national brands in the dilemma of protecting their trade

dress by cracking down on some of their best customers. Many

national brand manufacturers are responding through legal

action. For national brands, the key is proving that brand clones

are misleading consumers, who may think that they are buying

national brands. The burden of proof is to establish that an

appreciable number of reasonably acting consumers are

confused and mistaken in their purchases.

Historical and Legal Precedence

Legally, a brand name is a “conditional-type property”—

protected only after it has been used in commerce to identify

products (goods or services) and only in relation to those

products or to closely related oerings. To preserve a brand

name’s role in identifying products, and the authors’ note,

federal law protects brands from actions of others that may tend

to cause confusion concerning proper source identi3cation.

Trademark appropriation is identi3ed as a developing area of

state law that can severely curtail even those brand strategies

that do not “confuse” consumers. Appropriation resembles theft

of an intangible property right. Trademark dilution is the

protection from dilution—a weakening or reduction in the ability

of a mark to clearly and unmistakably distinguish the source.

Dilution can occur in three ways: blurring, tarnishment, and

cybersquatting.

Trademark Issues Concerning Names

Without adequate trademark protection, brand names can

become legally declared generic, as was the case with vaseline,

victrola, cellophane, escalator, and thermos. Legally, the courts

have created a hierarchy for determining eligibility for

registration. In descending order of protection, these categories

are fanciful, arbitrary, suggestive, descriptive, and generic.

Secondary meaning refers to a mark gaining a meaning other

than the older (primary) meaning. The secondary meaning must

be the meaning the public usually attaches to the mark and that

indicates the association between the mark and goods from a

single source.

Trademark Issues Concerning Packaging

In general, names and graphic designs are more legally

defensible than shapes and colors. The issue of legal protection

of the color of packaging for a brand is a complicated one.

Discussion questions

1. Pick a brand. Identify all of its brand elements and assess their

ability to contribute to brand equity according to the choice criteria

identi ed in the chapter.

2. What are your favorite brand characters? Do you think they

contribute to brand equity in any way? How? Can you relate their

e&ects to the customer-based brand equity model?

3. What are some other examples of slogans not listed in the chapter

that make strong contributions to brand equity? Why? Can you

think of any “bad” slogans? Why do you consider them to be so?

4. Choose a package for any supermarket product. Assess its

contribution to brand equity. Justify your decisions.

5. Can you think of some general guidelines to help marketers “mix

and match” brand elements? Can you ever have “too many” brand

elements? Which brand do you think does the best job of “mixing

and matching” brand elements?

Exercises and assignments

1. Have students make a list of brand slogans, analyze what each

communicates, and explain why the parent 3rm would select it.

2. Ask students to develop a brand name, logo and symbol, slogan,

package and, if appropriate, character for a new product. Discuss

how the elements would change if the target market changed.

Candidates might include a men’s fragrance, a laundry detergent, a

battery-free wind-up +ashlight, and a sparkling fruit drink. (Can be

related to Branding Brief 4-1: Branding a New Soft Drink.)

3. Tell students to pick two brands from the same product category

and compare their brand elements in terms of their memorability,

likability, protectability, adaptability, meaningfulness, and

transferability. Haagen-Dazs vs. Ben and Jerry’s ice cream, Aqua3na

vs. Dasani water, Michelin vs. Goodyear tires, Holiday Inn vs.

Comfort Inn motels, Heineken vs. Michelob beer, and Budweiser vs.

Miller beer could be used.

4. Bring in or have students bring in competing brands so that their

packages can be compared. Discuss the reasons for the similarities

and dierences between them, as well as the pros and cons of each.

Key take-away points

1. Criteria for choosing brand elements include memorability,

meaningfulness, likability, transferability, adaptability, and

protectability.

2. All the brand elements for a particular brand create the brand

identity, which conveys the contribution of these elements to image

and awareness.

3. A brand’s identity is created through the choice of a name, URL,

logo, symbol, slogan, package, jingle, and character.

4. The brand-building potential of brand elements can be gauged by

asking consumers what they would think about the product if they

knew only its name, logo, and other identity characteristics.