In this article (our finale!), we complete our four-part series on brand equity, suggesting how a firm that has established equity in a brand can leverage that equity through branding strategies such as brand and line extensions, co-branding, and licensing.
Just in case you missed it, or in case you'd like a review of where this article fits into our series, here's a quick summary:
- Our first article defined a number of branding terms—so if you are confused about what any of the terms in this article mean, please check out that article.
- Our second article developed a measure of brand equity. If you are confused about what we mean by brand equity and how we think brand equity can be measured, check out that article.
- In our third article, we focused on customers' emotional attachment to a brand and suggested that it is the key to developing brand equity. We suggested that emotional attachment is something that exists in consumers, but is created by your marketing efforts—that is, efforts that help consumers understand what the brand stands for, how responsive it can be to their needs, and that it can be trusted.
When consumers believe that a brand is responsive and trusted, they become emotionally attached to it; and when they become emotionally attached to it, they become committed to it—emotionally and behaviorally—and they invest something of themselves, their reputation and their time in the brand.
Commitment and investment are crucial because they affect brand equity—that is, the worth of the brand as revealed by its efficiencies in attracting and retaining customers.
Building Equity
You can do everything in your power to crate or build brand equity. But how do you sustain it? Furthermore, how do you leverage it to glean new marketing opportunities over time and ensure the highest possible return on investment for your company?
Ideally, we'd like to have a brand that is sufficiently strong to allow us to grow with it as we enter new markets, develop new products and burrow deeper into markets we have already entered.
Branding Strategies That Build Brand Equity
Building brand equity can be achieved by a number of branding strategies. One is to extend the current brand name (e.g., Dannon, known for yogurt) into a new product category (water). This is a brand extension strategy. Sometimes, brands are extended to many product categories, and all of the brands are said to fall under a common umbrella brand name.
Line extensions are a more limited and, in many cases, less-risky strategy to engage in. With this strategy, the original brand name (e.g., Diet Coke) is extended to another variant that uses the same brand name (e.g., Diet Lemon Coke).
Another is a licensing strategy, where your brand equity (e.g., Sponge Bob Square Pants) is built by allowing other firms to pay you to use your brand name on products that they make (e.g., Sponge Bob Square Pants T-shirts or Kleenex).
A third is a co-branding opportunity. Here, a firm (e.g., Häagen-Dazs) joins together with another firm (say Slim-Fast) to produce a product that bears the names of both brands (e.g., Häagen-Dazs ice cream by Slim-Fast). Since each brings different things to the table (rich taste, diet) these co-branding opportunities allow firms to capitalize on the benefits of both brands in categories where both benefits are desirable (good-tasting diet food).
Growing the brand through one or more of these branding strategies is often done—but it's fraught with risks. Among the most severe: these brand-building strategies (a) may not be perceived to be a good fit by consumers; (b) may make them have associations with the brand that you don't want them to have; and (c) may hurt the equity of the brand.
A lot of research has tried to understand how, when and under what conditions it's a good idea for firms to use one or more of these strategies.
Behold: Emotional Attachment
We believe that the success of these strategies has a lot to do with how emotionally attached consumers are to the brand. When consumers are strongly emotionally attached to a brand, they will be far more amenable to trying brands that have the original brand name on them.
Furthermore, they are likely to identify with the brand and use an entire compilation of products with the brand name to signify their brand attachment.
Think about consumers who are really strongly emotionally attached to Harley-Davidson motorcycles. They'll buy almost anything that has the Harley label—whether it bears any similarity to motorcycles or not (Harley eyewear, glasses, clocks, books, money clips, etc.)—anything that is even vaguely related to the “outlaw motorcycle” image the company has cultivated for so many years.
Or think about Apple. Apple cultivated such a large contingent of die-hard fans that consumers wanted Apple products not just for work or school but for pleasure, too.
Although a lot of research will say that consumers are much more likely to accept new brands when they are physically similar to the original brand (e.g., motorcycles, bicycles, outboard motors), attachment theory says that that's a bunch of nonsense. What really mattes is not how similar these new products are to the original brand but how emotionally attached consumers are to the original brand.
When consumers understand that the brand stands for, when they believe it is responsive to their core need, and when they trust it, they will be far more likely to believe that new brands with the same name have the same character. Hence, they'll be committed to and invest in the new brands as well—with little marketing investment on the part of the firm.
But Wait—There's More!
But just because consumers are emotionally attached to a brand doesn't mean that the firm should opt for just any growth strategy. You don't want to engage in a licensing opportunity with another firm, even if it's lucrative; develop a new product for a new market, even if that market is hot; or engage in a co-branding opportunity, with just any partner.
Emotional attachment is critical, but the branding strategies we opt for should always be guided by our brand concept.
A brand begins with a firm's decision not only to create it but also to establish a position for that brand in the eyes of consumers. It begins with a brand concept. When brand equity is leveraged by brand and line extensions, co-branding or licensing opportunities, it is very important that firms consider how or whether these new marketing opportunities work with the core brand concept.
Ideally, we'd like the core meaning of the brand to expand somewhat—but to never drift too far from its original brand meaning.
Maintaining brand concept consistency means that you need to think about how you are going to (a) elaborate and (b) fortify your core brand concept.
Elaboration
Elaboration involves solidifying or clarifying the brand's core meaning and how it is different from or better than competitors using one or more of the branding strategies.
For example, Arm & Hammer solidified its “deodorizing” concept by brand and line extensions to products where deodorizing is an important consumer benefit, such as cat litter, laundry products, dental products and so on.
Nike did the same, but in a different way. Nike running shoes made Nike synonymous with the word “athlete” by extensions to other types of shoes linked with sports (basketball, soccer, etc.).
Sony did so by having a line of products all having to do with sound entertainment (e.g., Walkmans, radios, stereos, etc.)
Fortification
Fortification is strategy that sustains yet also expands the brand's concept by linking it to other and/or more abstract brand meanings.
While Arm & Hammer deepened its “deodorizing” image by some branding strategies, it fortified its image by involving branding strategies to product categories that related to stain removal (toothpaste, laundry detergent, stain removers). As a result, Arm & Hammer's concept has been strengthened and abstracted. It is not only synonymous with deodorizing—it is synonymous with a broader category in which both deodorizing and stain removal are important—”cleaning.”
While Sony deepened its “quality sound entertainment” with extensions to audio products, the Sony brand has been abstracted with newer growth strategies. Sony has become synonymous with “entertainment” broadly conceived, as it is linked to audio products, TVs, DVDs, cameras, movies, music, and videogames.
The Bottom Line
Good branding, then, means doing a lot of things right—identifying a good brand concept and a good product and marketing mix that creates a strong and clear brand image, creates trust, and makes consumers feel that the brand is responsive to their needs.
It means developing a measure of brand equity that allows you to monitor the financial value of your brand to your company—and to diagnose why it may be weak or strong.
And, it means thinking strategically—using good sense about your brand's core meaning and taking advantage of strong emotional attachment to make your “brand” more than a one-product deal.
It is through these efforts that tremendous marketing synergies can be realized—and hence the equity of your brand can be maximized.
