2 Chapter Two Corporate Image and Brand Management

2 Chapter Two Corporate Image and Brand Management 2 -1

Components of a Corporate Image – Products – Personnel – Retail outlets – Servicing

FIGURE 2. 1 Components of a Corporate Image Tangible Elements 1. Goods and services sold. 2. Retail outlets where product is sold. 3. Factories where product is produced. 4. Advertising, promotions, and other forms of communications. 5. Corporate name and logo 6. Packages and labels 7. Employees Intangible Elements 1. Corporate, personnel, and environmental policies. 2. Ideas and beliefs of corporate personnel. 3. Culture of country and location of the company. 4. Media reports. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -3

Role of Corporate Image Consumer Perspective • Positive assurance • Unfamiliar settings • Little or no previous experience Reduces search time • Provides psychological reinforcement • Social acceptance • Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -4

Role of Corporate Image Company Perspective • • • Ability to charge more Consumer loyalty More frequent purchases by customers Positive word-of-mouth Attracts higher quality employees More favorable ratings Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -5

Top 10 Global Corporate Brands n n n n n Coca-Cola Microsoft IBM General Electric Nokia Toyota Intel Mc. Donald’s Disney Mercedes Benz Brand Value ($billion) $ 65. 3 $ 58. 7 $ 57. 1 $ 51. 5 $ 33. 7 $ 32. 1 $ 30. 9 $ 29. 4 $ 29. 2 $ 23. 6 Source: Based on “The 100 Top Brands, ” Business Week (August 6, 2007), pp. 59 -64. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -6

Promoting the Right Image • Creating the right image. • Conveys a clear message about the organization. • Should portray the nature of the firm. • Fit with products being sold. • Rejuvenating an image. • Easier than changing a well-established image. • Add new elements but continue current image. • Changing an image. – Extremely difficult. – Necessary when • Target market has shrunk or disappeared. • Current image not consistent with industry trends. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -7

FIGURE 2. 4 Tests of Quality Logos and Corporate Names Should be easily recognizable. • Should be familiar. • Should elicit a consensual meaning among firm’s target market. • • Mutual contract • Should evoke positive feelings. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -8

Benefits of Logo Recognizability n Aids in recall of specific brands. n Aids in recall of advertisements. n Reduces shopping effort. n Reduces search time and evaluation of alternatives. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -9

What colors should you use in your logo? n n n Black – seriousness, distinctiveness, power, sophistication, and tradition. Blue – authority, dignity, security, faithfulness, heritage, corporate stability, and trust. Brown/gold – history, utility, earthiness, richness, tradition, and conservative. Gray/silver – authority, practicality, corporate mentality, and trust. Green – health, freshness, stability, and appetite. Orange – fun, cheerfulness, health, and youth. Source: “Jared Mc. Carthy, “Logos: What Makes Them Work (Part 1 of 2), ” (www. marketingprofs. com/5/mccarthy 4. asp), February 22, 2005. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -10

What colors should you use in your logo? n Pink – femininity, innocence, softness, health, and youth. n Purple – sophistication, spirituality, wealth, royalty, youth, and mystery. n Red – aggressiveness, passion, strength, vitality, fear, speed, and appetite. n White/silver – purity, truthfulness, faith, contemporary, refined, and wealth. n Yellow – youth, positive feelings, sunshine, cowardice, refinement, caution, and appetite. Source: “Jared Mc. Carthy, “Logos: What Makes Them Work (Part 1 of 2), ” (www. marketingprofs. com/5/mccarthy 4. asp), February 22, 2005. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -11

Companies often create product icons to develop an identity for their products. Why are these icons effective representatives for these companies? Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -13

Branding • • • Provides quality assurance. Reduces search time. Allows a company to charge more. Reduces brand parity. Consumers choose a brand because it is: – Salient – Memorable – Noteworthy Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -14

Branding If you didn’t find the brand you wanted, would you be likely to buy another brand? Greeting cards Groceries and canned food Women’s apparel Men’s apparel Toys Candy Beverages Consumer electronics Computer software 68% 67% 50% 55% 47% 49% 40% 35% Source: Debbie Howell, “Today’s Consumers More Open To Try New Brands, ” DSN Retailing Today, vol. 43, No. 20 (October 25, 2004), pp. 29 -31. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -15

Developing a Strong Brand Name Begins with understanding why consumers buy a brand. What are the most compelling benefits? • What emotions are elicited by the brand either during or after the purchase? • What one word best describes the brand? • What is important to consumers in the purchase of the product? • Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -16

F I G U R E 2. 6 Benefits of Brand Equity • • • Higher prices Higher gross margins Channel power Additional retail shelf space Reduces customer switching behavior • Prevents erosion of market share Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -17

F I G U R E 2. 7 Steps in Building Brand Equity 1. Research and analyze what it would take to make the brand distinctive. 2. Engage in continuous innovation. 3. Move fast. 4. Integrate new and old media. 5. Focus on domination. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -19

FIGURE 2. 8 Top 10 Most Powerful Brands (Alix. Partners) Brand Trust Rate Sony Johnson & Johnson Kraft Procter& Gamble Campbell’s Toyota Tylenol Dell General Mills Hewlett-Packard Distrust Rate 9. 2% 5. 7% 5. 2$ 5. 8% 3. 5% 4. 1% 3. 2% 5. 1% 2. 7% 4. 0% 1. 8% 0. 5% 0. 6% 1. 1% 0. 4% 1. 2% 0. 6% 2. 1% 0. 2% 1. 5% BPI 75. 1 55. 3 48. 7 48. 2 32. 9 28. 0 27. 2 27. 0 25. 9 23. 5 BPI = awareness, trust, and distrust. Source: Adapted from Fred Crawford, “Branding Isn’t Like High School, ” Retail Merchandiser, Vol. 47, No. 6 (July/August 2007), pp. S 4 -S 9. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -20

F I G U R E 2. 9 Most Preferred Brands (DSN Retailing) Women’s Apparel 1. 2. 3. 4. 5. 6. Hanes (39%) Levi’s (10%) Victoria’s Secret (6%) Liz Claiborne (4%) Nike (4%) Fruit-of-the-Loom (4%) Snacks 1. 2. 3. 4. 5. Beverages 1. 2. 3. 4. Coke (26%) Pepsi (22%) Dr. Pepper (6%) Mountain Dew (5%) Consumer Electronics Frito Lay/Lays (19%) Doritos (10%) Hershey’s (6%) Pringles (6%) Oreos (5%) 1. 2. 3. 4. 5. Sony (27%) RCA (6%) Panasonic (6%) Dell (5%) Duracell (4%) Source: Adapted from Debbie Howell, “Top Brands, ” DSN Retailing Today, Vol. 44, No. 20 (October 24, 2005), pp. 38 -42. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -21

Packaging • Traditional elements • • • Protect the product inside Provide for ease of shipping, moving, and handling Provide for easy placement on store shelves Prevent or reduce the possibility of theft Prevent tampering New trends • Meet consumer needs for speed, convenience, and portability • Must be contemporary and striking • Must be designed for ease of use Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 2 -22