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LEARNING OBJECTIVES
LO 9-2 Learn the importance of brand equity in product strategy.
LO 9-4 Define the responsibility of warranties and service agreements in building consumer
confidence.
CHAPTER OUTLINE
I. BRAND: THE FUNDAMENTAL CHARACTER OF A
PRODUCT
A. Brands play many roles
i. Customer brand roles
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ii. Company Brand Roles
iii. Competitor Brand Roles
B. The Boundaries of Branding
II. BRAND EQUITY –OWNING A BRAND
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A. Defining Brand Equity
B. Benefits of Brand Equity
i. Perceived Quality
ii. Brand Connections
iii. Brand Loyalty
III. BRANDING DECISIONS
A. Stand alone or family branding
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B. National or Store Branding
C. Licensing
D. Co-Branding
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IV. PACKAGING AND LABELING: ESSENTIAL BRAND
ELEMENTS
A. Package Objectives
i. Protect
ii. Communicate
iii. Promote Usage
B. Effective Packaging
i. Aesthetics
ii. Harmonizes with All Marketing Mix Elements
C. Labeling
i. Legal requirements
ii. Consumer requirements
iii. Marketing requirements
V. WARRANTIES AND SERVICE AGREEMENTS:
BUILDING CUSTOMER CONFIDENCE
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A. Warranties help define the brand
i. Cost versus benefit
ii. Conveys a message to the customer
VI. SUMMARY
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.
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.
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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 extension 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.
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?
The polo pony logo is meant to embody an aspirational lifestyle. According to Polo.com:
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MANAGEMENT DECISION CASE
Virgin Group Brand Extensions—Lots of Hits and a Few Misses
The Virgin Group may be a less familiar brand to students in the U.S., but many will have heard
Questions for Consideration
9–10
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3. Is the Virgin experience with brand extensions an anomaly or are there lessons that could be
applied to any brand wanting to expand this way?
While the Virgin Group’s rabid extension activity is unusual and is closely tied to the
personality of its founder, there are lessons that can be applied in any business:
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1
https://www.ralphlauren.com/about-us/global-aboutus.html, accessed 1/3/18.
2
https://www.ralphlauren.com/power–of-the-pony/09272017-m-prl-powerofthepony–
feat.html?categoryId=115318546, accessed 1/3/18.
3
https://www.amazon.com/s/ref=nb_sb_noss_1?url=search–alias%3Daps&field-keywords=flash+drive, accessed