978-0132664257 Chapter 7 Solution Manual

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Chapter 7

Leveraging Secondary Brand Associations to Build Brand

Equity

Chapter Objectives

1. Outline the eight main ways to leverage secondary associations.

2. Explain the process by which a brand can leverage secondary

associations.

3. Describe some of the key tactical issues in leveraging secondary

associations from di erent entities.

Overview

This chapter addresses the way in which secondary associations can be

leveraged to build brand equity. Secondary associations are those

related to other entities to which a brand is linked, such as the parent

company, country of origin, channels of distribution, spokespeople,

events, characters, other brands, and third-party sources. The link may

lead consumers to assume or infer that beliefs, attitudes, and

perceptions they have for the external source also hold for the brand.

This ability to “borrow” equity from the people, places, or things

associated with the brand creates additional leverage for marketers

beyond that generated by brand elements and marketing programs.

Leverage can only occur when consumers are familiar with the external

source and associations for the sources are relevant to the brand. The

leveraged associations are most likely to be considered in brand choice

decisions when consumers have low interest or knowledge levels.

Three criteria for evaluating the extent of leverage resulting from

brand linkage to another entity: awareness of knowledge of entity,

meaningfulness of the entity’s knowledge, transferability of the entity’s

knowledge.

Eight di erent ways to leverage secondary associations to build brand

equity are linking the brand to: (1) the company making the product;

(2) the country or some other geographic location in which the product

originates; (3) retailers or other channel members that sell the product;

(4) other brands, including ingredient brands; (5) licensed characters;

(6) famous spokespeople or endorsers; (7) events; and (8) third-party

sources.

The chapter notes that attempts to leverage secondary associations

require the company to relinquish some control over the branding

process. In particular, managing the transfer process so that only the

relevant secondary associations become linked to the brand may be

di4cult. Unwanted secondary associations may also become linked to

the brand. For example, if one of two brands in a co-branding

agreement becomes a target for negative publicity, the other brand

may 7nd its brand equity negatively a ected as well.

Brand Focus 7.0 discusses one of the biggest events for corporate

sponsorship, the Olympic Games. Companies spend up to $50 to be

lead sponsors for the Games, and then spend as much as $100 million

on related marketing activities; however, not everyone thinks the

Games provide good value since the increasing commercialization of

the competition makes it harder to break through the clutter.

Science of Branding

THE SCIENCE OF BRANDING 7-1

UNDERSTANDING RETAILERS’ BRAND IMAGES

Academics have identi7ed the following 7ve dimensions of a retailer’s

brand image:

Access—The location of a store and the distance that consumers

must travel to shop are basic criteria in their store choice

decisions.

Store Atmosphere— Di erent elements of a retailer’s in-store

environment, like color, music, and crowding, can in@uence

consumers’ perceptions of its atmosphere, whether or not they

visit a store, how much time they spend in it, and how much

money they spend there.

Price and Promotion— Consumers are more likely to develop a

favorable price image when retailers o er frequent discounts on

a large number of products than when they o er less frequent,

but steeper discounts.

Cross-Category Assortment— Consumers’ perception of the

breadth of di erent products and services o ered by a retailer

under one roof signi7cantly in@uences store image.

Within-Category Assortment— As the perceived assortment of

brands, @avors, and sizes increases, variety-seeking consumers

will perceive greater utility, consumers with uncertain future

preferences will believe they have more @exibility in their

choices, and, in general, consumers are more likely to 7nd the

item they desire.

THE SCIENCE OF BRANDING 7-2

UNDERSTANDING BRAND ALLIANCES

Academic research has explored the e ects of co-branding and

ingredient branding strategies:

Co–Branding— Park, Jun, and Shocker compare co-brands to the

notion of “conceptual combinations” in psychology. The 7ndings

show how carefully selected brands can be combined to

overcome the potential problems of negatively correlated

attributes (here, rich taste and low calories).

Simonin and Ruth found that consumers’ attitudes toward a

brand alliance could in@uence subsequent impressions of each

partner’s brands. Brands less familiar than their partners

contributed less to an alliance but experienced stronger spillover

e ects than their more familiar partners. Voss and Tansuhaj

found that consumer evaluations of an unknown brand from

another country were more positive when it was allied with a

well-known domestic brand.

Kumar found that introducing a co-branded extension into a new

product category made it less likely that a brand from the new

category could turn around and introduce a counter–extension

into the original product category. LeBar and colleagues found

that joint branding helped to increase a brand’s perceived

di erentiation, but also sometimes decreased consumers’

perceived esteem for the brand and knowledge about the brand.

Ingredient Branding— Desai and Keller conducted a laboratory

experiment to consider how ingredient branding a ected

consumer acceptance of an initial line extension, as well as the

ability of the brand to introduce future category extensions.

The results indicated that with slot 7ller expansions, although a

co-branded ingredient eased initial acceptance of the expansion,

a self-branded ingredient led to more favorable later extension

evaluations. With more dissimilar new attribute expansions,

however, a co-branded ingredient led to more favorable

evaluations of both the initial expansion and the subsequent

extension.

Branding Briefs

BRANDING BRIEF 7-1

IBM PROMOTES A SMARTER PLANET

IBM decided it needed to radically transform itself from a

product-focused company to a value-added, services-oriented

company. IBM Chairman and CEO Sam Palmisano spun o the

company’s famous PC division and began to invest heavily in software

and business consulting. Another critical aspect of the transformation

was aligning the public perception of IBM with this new vision.

“Smarter Planet” became the slogan for the corporate campaign,

which had its roots in some of IBM’s recent accomplishments.

The initial goal of the “Smarter Planet” campaign was to position IBM

as a leader in solving the world’s most pressing problems. One of the

7rst campaign activities was an op-ad series, “Building a Smarter

Planet,” targeting forward-thinking leaders.

The campaign also included TV ads and targeted ads to three groups:

business and government leaders in large organizations, IT

professionals, and the mid-market. It included a strong digital

component, with an expanded IBM Web site and a Smarter Planet blog.

Videos were created and distributed across eight of the largest

video-sharing sites. IBM also launched a “Smarter Cities” global tour to

bring key policy and decision makers together to discuss the topical

issues they faced, such as transportation, energy, health care,

education, and public safety.

IBM analysts estimated that the Smarter Planet strategy expanded its

market potential by as much as 40 percent globally, or by an additional

$2.3 billion in revenue. IBM’s brand tracking revealed increases across

the board on a variety of image measures and overall judgments

related to consideration, preference, and likelihood of doing business.

IBM’s stock price increased by 64 percent during the campaign.

BRANDING BRIEF 7-2

SELLING BRANDS THE NEW ZEALAND WAY

In November 2010, New Zealand was ranked as the third-strongest

country brand in the world, a credit to the country’s remarkable

qualities, but also to its concerted marketing program through the

years.

In 1991, New Zealand began a branding initiative called “The New

Zealand Way.” The key objectives of the New Zealand Way brand

campaign were to reposition New Zealand to re@ect its contemporary

positioning and undertake a sustained campaign that could be a

powerful force to bene7t trade and tourism in the global marketplace.

The New Zealand Way brand campaign promoted the country, its

tourism and trade products and services, and its famous people, known

as “Brand Ambassadors.”

In 1999, a decision was made to develop a more focused campaign for

tourism and Tourism New Zealand sharpened its destination global

marketing with its campaign: “100% Pure New Zealand.” The

campaign focused on building awareness of New Zealand as a unique

holiday destination due its spectacular natural landscapes and

fascinating culture and people.

Buoyed also by publicity from the highly popular Lord of the Rings 7lm

trilogy, which was 7lmed there, plus the pro7le from the America’s Cup

which Tourism New Zealand cleverly used for promotion, the number of

visitors to the country increased by 50% during this time. NZTE chose

to focus its branding e orts on international business development

re@ecting emerging and relevant values for enterprise such as

innovation, creativity, and integrity.

In 2011, the tag line for the tourism campaign was changed to “100%

Pure You” with the subline, “It’s About Time.” The intent was to build

on the prior campaign to target people who were actively considering

New Zealand for a holiday vacation and to encourage them to travel

soon.

BRANDING BRIEF 7-3

INGREDIENT BRANDING THE DUPONT WAY

DuPont introduced a number of innovative products for use in markets

ranging from apparel to aerospace. Many of the company’s innovations

became household names as ingredient brands in consumer products

manufactured by many other companies.

DuPont learned an important branding lesson the hard way. Because

the company did not protect the name of its 7rst organic chemical

7ber, nylon, it was not trademarkable and became generic. A key

question that DuPont constantly confronts is whether to brand a

product as an ingredient brand. To address this question, the 7rm has

traditionally applied several criteria:

On the quantitative side, DuPont has a model that estimates the

return on investment of promoting a product as an ingredient

brand. The goal of the model is to determine whether branding

an ingredient can be 7nancially justi7ed, especially in industrial

markets.

On the qualitative side, DuPont assesses how an ingredient

brand can help a product’s positioning. If competitive and

consumer analyses reveal that conveying certain associations

would boost sales, DuPont is more likely to brand the ingredient.

DuPont maintains that an appropriate, e ective ingredient branding

strategy leads to a number of competitive advantages, such as higher

price premiums, enhanced brand loyalty, and increased bargaining

power with other members of the value chain. DuPont employs both

push and pull strategies to create its ingredient brands.

BRANDING BRIEF 7-4

MANAGING A PERSON BRAND

Guidelines for managing a person brand:

A person brand must manage brand elements.

A person brand is built by the words and actions of that person.

A person brand can borrow brand equity through secondary

associations and employ strategic partnerships with other people

to enhance brand equity.

Credibility is key for a person brand.

Person brands can use multiple media channels.

A person brand must stay fresh and relevant and properly

innovate and invest in key person traits.

A person brand should consider optimal positioning in terms of

brand potential and associated points-of-parity and

points-of-di erence.

Brand architecture is simpler for a person brand but brand

extensions can occur, for instance when a person adds to his or

her perceived capabilities.

A person brand must live up to the brand promise at all times.

A person brand must be a self-advocate and help to shape

impressions.

Brand Focus

BRAND FOCUS 7.0

GOING FOR CORPORATE GOLD AT THE OLYMPICS

Corporate sponsorship is a signi7cant part of the business side of the

Olympics and countries themselves vie for the rights to host the

Games.

Corporate Sponsorship

Corporate sponsorship of the Olympics exploded with the commercial

success of the 1984 Summer Games in Los Angeles. At that time, many

international sponsors, like Fuji, achieved positive image building and

increased market share. Besides direct expenditures, 7rms spent

hundreds of millions more on related marketing e orts.

Sponsorship ROI

Although several 7rms have long-term relationships and commitments

with the Olympics, in recent years other long-time sponsors have cut

their ties. Although many factors a ect the decision to engage in or

renew an Olympic sponsorship, its marketing impact is certainly widely

debated.

Ambush Marketing

In some cases, sponsorship confusion may be due to ambush

marketing, in which advertisers attempt to give consumers the false

impression they are Olympic sponsors without paying for the right to

do so. Nonsponsoring companies attempt to attach themselves to the

Games by, for instance, running Olympic-themed ads that publicize

other forms of sponsorship like sponsoring a national team, by

identifying the brand as an o4cial supplier, or by using current or

former Olympians as endorsers. Containing ambush marketing requires

much diligence.

Beijing 2008 Summer Games

The 2008 Summer Games in Beijing held special appeal for some

advertisers because the Games represented a connection to the

burgeoning Chinese market. General Electric began its 7rst global

campaign revolving around the Beijing Games in 2005. UPS also chose

the Beijing games to strengthen its brand presence in China.

London 2012 Summer Games

Recognizing the important 7nancial contribution of sponsorship, the

London Games were supported by the British government’s

introduction of extensive anti-ambush legislation. Banned were

activities such as sky-writing, @yers, posters, billboards, and projected

advertising within 200 meters of any Olympic venue. Organizers of the

London Games also embarked on a multimillion dollar advertising

campaign, “The Greatest Tickets on Earth,” in hope of raising £500

million from ticket sales. Outside the country, the government also

embarked on a “Visit Britain” and “Visit London” promotional campaign

to attract tourists.

City and Country E ects

A number of bene7ts may be evident for a host country that can be

hard to quantify. One important psychological bene7t is civic pride and

patriotism for serving as host to such an iconic global sporting event.

Another often-overlooked bene7t is the investment in improving

infrastructure that often leads up to hosting the Games.

Summary

Many corporate sponsors continue to believe that their Olympic

sponsorship yields many signi7cant bene7ts, creating an image of

goodwill for their brand, serving as a platform to enhance awareness

and communicate messages, and a ording numerous opportunities to

reward employees and entertain clients. Other view the Games as

overly commercialized, despite the measures undertaken by the IOC

and USOC to portray the Olympics as wholesome. In any case, the

success of Olympic sponsorship depends in large part on how well it is

executed and incorporated into the entire marketing plan.

Discussion questions

1. The Boeing Company makes a number of dierent types of aircraft

for the commercial airline industry, e.g., the 727, 747, 757, 767,

and 777 jet models. Is there any way for Boeing to adopt an

ingredient branding strategy with their jets? How? What would be

the pros and cons?

2. After winning major championships, star players often complain

about their lack of endorsement oers. Similarly, after every

Olympics, a number of medal-winning athletes lament their lack of

commercial recognition. From a branding perspective, how would

you respond to the complaints of these athletes?

3. Think of the country in which you live. What image might it have

with consumers in other countries? Are there certain brands or

products that are highly eective in leveraging that image in global

markets?

4. Which retailers have the strongest image and equity in your

mind? Think about the brands they sell. Do they help to contribute

to the equity of the retailer? Conversely, how does that retailer’s

image help the image of the brands it sells?

5. Pick a brand. Evaluate how it leverages secondary associations.

Can you think of any ways in which the brand could more

eectively leverage secondary brand knowledge?

Exercises and assignments

1. Ask students to poll consumers regarding their associations for

di erent countries. What products or services 7t with and could

bene7t from being linked to the countries? Are the associations

consistent with the way in which products and services from those

countries are being marketed? (Can be related to Branding Brief

7-2: Selling Brands the New Zealand Way)

2. Tell students to suggest celebrity endorsers for brands currently

without one, and to explain their recommendations. For example,

does Dennis Rodman’s 7ery personality make him a good

spokesperson for Tabasco? Does Sean “P. Diddy” Combs’

ever-present cell phone make him a perfect candidate to endorse

Nokia phones? Would Rosie O’Donnell be a made-in-heaven match

with Nickelodeon because of her love for and knowledge of classic

TV shows?

3. Assign students the task of 7nding co-branding opportunities in

various product categories. For example:

Facial tissue Pu s and Vaseline Intensive Care lotion?

Spaghetti sauce Ragu and Gallo wine?

Hotel Red Roof Inn and Serta mattresses?

4. Have students identify a brand with an active licensing strategy and

evaluate the 7t of the licensed products with the brand’s image.

What changes should be made in the brand’s licensing policy?

Examples of brands with products in numerous categories outside

the original include Jell-O, Looney Tunes, Ralph Lauren and Star

Wars.

Key take-away points

1. Linking the brand to some other entity—some source factor or

related person, place, or thing—may create a new set of

associations from the brand to the entity, as well as a ecting

existing brand associations.

2. Brands can “borrow” equity from their association with people,

places, programs, and other non-product-based sources.

3. Leveraging secondary associations can be problematic because it

requires marketers to give up some degree of control over the

branding process.

4. Secondary associations are strongest when consumers have

awareness and strong, favorable, and unique perceptions of the

external source.

5. Secondary associations are most likely to a ect evaluations when

consumers lack the ability or motivation to judge product attributes.

6. Because of associations to product assortment, pricing and credit

policy, quality of service, and so on, retailers have their own brand

images in consumers’ minds.

7. An existing brand can also leverage associations by linking itself to

other brands from the same or di erent company.

8. Licensing creates contractual arrangements whereby 7rms can use

the names, logos, characters, and so forth of other brands to market

their own brands for some 7xed fee.

9. A famous person can draw attention to a brand and shape the

perceptions of the brand, by virtue of the inferences that consumers

make based on the knowledge they have about the famous person.

10. Sponsored events can contribute to brand equity by becoming

associated to the brand and improving brand awareness, adding

new associations, or improving the strength, favorability, and

uniqueness of existing associations.

11. Marketers can create secondary associations in a number of

di erent ways by linking the brand to various third-party sources.