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 David Aaker, defined in Building strong Brands that A brand is a trusted promise of quality, service and value, established over time and proven by the test of operated use and satisf

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Dang An Hai

A CASE STUDY OF BRAND DEVELOP STRATEGY

FOR VIDA BEER

master of business administration thesis

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vietnam national university, HANOI

school of business

Dang An Hai

A CASE STUDY OF BRAND DEVELOP STRATEGY

FOR VIDA BEER

Major: Business Administration

Code : 60 34 05

Master of business administration thesis

Supervisor: Dr.NGUYEn VIET ANh

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TABLES OF CONTENTS

ACKNOWLEDGEMENTS 3

ABSTRACT: A CASE STUDY BRAND BUILDING STRATEGY FOR VIDA 4

TÓM TẮT: NGHIÊN CỨU CHIẾN LƯỢC PHÁT TRIỂN THƯƠNG HIỆU VIDA BEER TẠI CÔNG TY CP BIA SÀI GÕN NGHỆ TĨNH 6

INTRODUCTION 9

1 BACKGROUND OF THE TOPIC 9

2 RESEARCH OBJECTIVE 9

3 RESEARCH METHOD 10

4 SIGNIFICANCE OF THE PROJECT 10

5 SCOPE OF THE STUDY 10

CHAPTER 1 11

LITERATURE REVIEW 11

1.0 BRAND 11

1.1.1 BRAND DEFINES – WHAT IS BRAND? 11

1.1.2 COMPONENTS OF A BRAND 13

1.1.3 TYPES OF BRAND 13

1.1.4 THE FUNCTIONS OF THE BRAND FOR THE CONSUMER 13

1.2 BRANDING 15

1.2.1 DEFINE BRANDING 15

1.2.2 Elements of branding 17

1.2.3 Benefit of branding 18

1.2.4 Importance of branding 19

1.2.5 What factors are important in building brand value? 19

1.2.6 Brand strategy 21

1.2.9 Brand Orientation 33

1.2.10 Brand Hexagon 33

1.2.11 Corporate Branding 34

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1.2.12 Brand identity 37

1.2.13 Other concepts 38

CHAPTER 2 45

2.1 VIETNAM BEER MARKET OVERVIEW 45

2.2 NGHE AN BEER MARKET 48

2.2.1 Nghe An beer market overview 48

2.2.2 Market Segmentation 50

2.2.3 Customer Behavior 51

2.2.4 Market Potential 52

2.2.5 Consumer trends 53

2.3 SAIGON- NGHE TINH BEER JOINT STOCK COMPANY 53

 RESEARCH CONTEXT - RESEARCH PROBLEM 59

 RESEARCH OBJECTIVE 59

 RESEARCH METHOD 60

 QUESTIONNAIRE STRUCTURE 60

 SAMPLE SELECTION & DATA COLLECTION 61

 PILOT TEST OF IMPROVED QUESTIONNAIRE 61

 DATA ANALYSIS 62

 LIMITATION OF THE RESEARCH 62

 THE RESULT OF CUSTOMER SURVEY ON VIDA BRAND 63

 SUMMARY 71

CHAPTER 3 72

3.1 CONCLUSION: 72

3.2 RECOMMENDATION FOR VIDA 73

3.2.1 Recommendations for VIDA 73

3.2.2 Building and developing strong VIDA beer brand 74

3.2.2.1 Branding decision 74

3.2.2.2 VIDA Positioning and Target Consumers 75

3.2.2.3 Redefine some factor relate to VIDA brand 77

6.2.2.4 Branding tools and Marketing Activities 79

PHIẾU THĂM DÕ Ý KIẾN KHÁCH HÀNG 85

QUESTIONNAIRES 87

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INTRODUCTION

1 Background of the topic

There is a strong link between the growth of market share and the profitability of a company with the power of its brand Like other emerging economies, in Vietnam, the domestic companies have been facing tough competition brought about by multinational corporations (MNCs) with their well-established brands from all over the world

The branding concept of building an organization around the profitable satisfaction customer need help firm to achieve success in high growth, moderately competitive markets However to be successful in markets in with economic growth has leveled and which there exits many competitors who follow the branding concept, a well developed branding strategy is required Such strategy considers portfolio of products and takes into account the anticipated moves of competitors in the market Because of above reasons, Branding Strategy plays an important and integrated role

in any organizations As many other organization, VIDA also need a good Branding Strategy and the research was carried out because of this To illustrate the issue, I will examine the case of VIDA Interviews with managers and a consumer survey are carried out to investigate the competitor‟s reaction and consumers‟ perception toward this brand At the end, some recommendations are proposed for VIDA to develop brand

However, Brand building Strategy is very wide concept and it is not easy to cover all So, this research will be focused on one part of VIDA„s Branding Strategy on one kind of product: „draught beer‟

2 Research Objective

For the purpose is to provide the VIDA Company an overview of the awareness for beer as well as customer‟s perception on the VIDA beer brand in NgheAn The research is carried out Addition, this research also analysis the consumer purchasing decision beer and the competitive strings of VIDA beer in NgheAn It provides an overview of marketing strategy of VIDA and shows the strength and

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weakness of VIDA in implementing the branding strategy Final, the research gives some recommendations on branding strategy for VIDA on their beer product

3 Research method

By setting set of questionnaires and sent out to more than 82 respondents and the data was colleted by face to face interview, from annual report, company publication and industry publication were obtained to analyze organization performance In order to analysis data the spreadsheet software, Microsoft Excel was used Final, PILOT test were carried out to make sure that all respondents were able to answer all the questions

4 Significance of the project

The research project gives a more detail the perception of consumers on the VIDA beer brand in NgheAn as well as their suggestion on the Brand developing areas for the VIDA Company It helps VIDA to realize consumer„s perception on the scheme

of what is consumers needs the most and what marketing areas that VIDA are strong and weak at and what marketing areas that consumers would like to see Addition, it helps the VIDA a lot in satisfying the customers and increasing the reputation in the customer‟s mind

Further more, it is hope that the research will present an objective evaluation of VIDA present position in the beer industry with respect to other manufacturers VIDA„s multi faceted marketing strategy in globalization will make a good model for other to follow and learn from The future success of VIDA and these companies going regional will seem to be a good reflection of their abilities to become fully market with flexibility in adopting initiatives to meet changing market needs

5 Scope of the Study

This study looks into the customers‟ perception on beer brand as well as VIDA brand to a limited number of people whom the researcher met in restaurant This study covers people who has drink beer outside As it is confined to a small sample size will be difficult to make a concrete generalization The result of this survey is just a pointer which will be useful for an in-depth study

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Chapter 1

LITERATURE REVIEW

“Branding adds spirit and a soul to what would otherwise be a robotic, automated, generic price-value proposition If branding is ultimately about the creation of human meaning, it follows logically that it is the humans who must

1.0 BRAND

1.1.1 Brand defines – What is brand?

There are many definitions relate to brand Each author define in different way base

on their point

 A traditional definition: A brand is the name, associated with one or more items

in the product line, that is used to identify the source of character of the item

 The American Marketing Association (AMA) definition of a brand is “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors”

 David Aaker, defined in Building strong Brands that A brand is a trusted

promise of quality, service and value, established over time and proven by the test of operated use and satisfaction; and a brand is the proprietary visual, emotional, rational and cultural image that you associate with a company ore a product

 A brand is a distinguishing name or symbol designed to:

 Identify to origins of a good or service of a manufacturer

 Differentiate those goods or services from those of the competition

 Protect the consumer and producer from competitors who would attempt

to provide products that appear to be identical

According to Philip Kotler, a brand is a complex symbol that can convey us to six lever of meaning:

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- Attributes: a brand brings to mind certain attributes Mercedes suggests

expensive, well-built, and well-engineered, durable, high prestige automobiles

- Benefits: Attributes us be translated into functional and emotional benefits

The attribute “durable could translate in to functional benefit “I won‟t have

to buy another car for several yeas” the attribute “expensive translates in to the emotional benefits “the care makes me feel important and admired”

- Values: The brand also says some thing about the producer‟s vales Mercedes

stands for high performance, safety, and prestige

- Culture: the brand may represent a certain culture The Mercedes represents

Germen culture: high organized, efficient, high quality

- Personality: The brand can project a certain personality Mercedes may

suggest a no-nonsense boss (person), a reigning lion (animal), an austere palace (object)

- User: the brand suggests the kind of customer who buys or uses the product

We would expect to se a 55-year-old top executive behind the wheel of a Mercedes, but a 20-year-old secretary

Companies need o research the position their brand occupies in the customers‟ mind According to Kevin Keller, “What distinguishes a brand from its unbranded commodity counterparts is the consumer‟s perception and feelings about the product‟s attributes and how the perform Ultimately, a brand resides in the minds

of consumer.” There are three commonly used research approaches to get a brand meaning:

- Word association: People can be asked what a word comes to mind when

they hear the brand‟s name In the case of Mc Donald‟s, they probably would mention hamburgers, fast food, friendly services, fun, and children They may mention some negative word such as high calories and fatty food McDonald‟s would try to emphasize the positive and unique words and would try to reduce the causes giving rise to the negative words

- Personifying the brand: People can be asked to describe what kid of person

or animal they think of when the brand is mentioned The brand personal

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delivers a picture of the more human qualities to the brand

- Ladder up to find the brand essence: Brand Essence relate to the deeper,

more abstract goals consumer are trying to satisfy with the brand Ask why some wants to buy a Nokia cellular phone “They look well-built” (attribute)

“Why is it important that the phone be well built?” “It suggests that the Nokia is reliable” (functional benefit) “Why the reliability important?”

“Because my colleagues family can be sure to reach me” (an emotional benefit) “Why must you be available to them at all times?” “I can help them

if they are in trouble” (brand essence) The brand makes this person feel kike

a Good Samaritan, ready to help other

1.1.2 Components of a brand

 Brand name – that part of a brand that can be spoken

 Brand mark- the element of a brand not made up a words

 Brand identity – how the company sees itself and the product

 Brand image- how outsiders see the organization and its product

 Brand message- the message that the organization wishes to communication

to the customers about the qualities of its product

1.1.3 Types of brand

 Individual product brand: each product has its own brand

 Family brand: cover a range of products

 House brand/ own brand: branded with the retailers name or brand

 Company name brand: branded with the name of the company

 Generic brand: economy goods without a brand name

 Sub-brand: individual product brands within a retailer‟s range

1.1.4 The Functions of the Brand for the Consumer

Before the 1990‟s, there was a different approach towards brands “Companies wished to buy a producer of beer After 1990, they wanted to buy a specific product like Heineken or Vida This distinction is very important; in the first case firms wish

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to buy production capacity and in the second they want to buy a place in the mind of the consumer” In other words, the shift in focus towards brands began when it was understood that they were something more than mere identifiers

Brands, according to Kapferer serve eight functions shown in Table 1: the first two are mechanical and concern the essence of the brand: “to function as a recognized symbol in order to facilitate choice and to gain time”; the next three are for reducing the perceived risk; and the final three concern the pleasure side of a brand He adds that brands perform an economic function in the mind of the consumer, “the value

of the brand comes from its ability to gain an exclusive, positive and prominent meaning in the minds of a large number of consumers” Therefore branding and brand building should focus on developing brand value

Table 1: the functions of the brand for the consumer

Kapferer‟s view of brand value is monetary, and includes intangible assets “Brands fail to achieve their value-creating potential where managers pursue strategies that are not orientated to maximizing the shareholder value”

Four factors combine in the mind of the consumer to determine the perceived value

of the brand: brand awareness; the level of perceived quality compared to competitors; the level of confidence, of significance, of empathy, of liking; and the richness and attractiveness of the images conjured up by the brand

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1.2 BRANDING

1.2.1 Define Branding

Branding is a way to differentiate your company, product or service from

competitors, and to provide it with a personality that is both unique and appealing to potential customers It is a multifaceted, multi-layered process and discipline

Branding is the process of creating an association between a symbol, object,

emotion, perception and a product, company with the goal of driving loyalty and creating differentiation

For example, through product packaging and advertising, Coca Cola has created an association between many different objects and its brands The hourglass shaped

bottle, the red and white colors, and even the font of its logo together make Coca

Cola distinctive from competitors The product‟s past ability to satisfy consumer needs and its widespread distribution play an important role in consumption, however constant advertising has been successful in reinforcing past positive associations between the brand and consumers

Al Rise and Jack Trout, said Marketing is branding They claim that in short, all the marketing activities are all about building a strong brand Thus, Marketing is

Branding And a brand is no more than a trusted name in the customers‟ mind

In addition to recognition, branding may consist of building emotional responses or cultural responses As consumers are bombarded with a variety of products to meet the same need, branding provides a way for consumers to reduce their decision making to consider only those products that they feel are relevant to them or that have met their needs acceptably in the past

Brands were just another step in the whole process of marketing to sell products

“For a long time, the brand has been treated in an off-hand fashion as a part of the product” Kotler mentions branding as a major issue in product strategy As the brand was only part of the product, the communication strategy worked towards exposing the brand and creating brand image The traditional branding model the goal was to build brand image; a tactical element that drives short-term results Concerning the brand management process as related to the function of a brand as

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an identifier, the traditional branding model where a brand management team was responsible for creating and coordinating the brand‟s management program In this situation, the brand manager was not high in the company‟s hierarchy; his focus was the short-term financial results of single brands and single products in single markets The basic objective was the coordination with the manufacturing and sales departments in order to solve any problem concerning sales and market share With this strategy the responsibility of the brand was solely the concern of the marketing department In general, most companies thought that focusing on the latest and greatest advertising campaign meant focusing on the brand The model itself was tactical and reactive rather than strategic and visionary The brand was always referred to as a series of tactics and never like strategy

 It differentiates the product from competition

 To help customer easy to recognize a brand

The branding iceberg - Table 2: Branding iceberg

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What you can see above the water line of the iceberg are price, advertising, presentation, brand name and symbol

What‟s below are key assets and competencies such as high quality, efficient production, strong R&D, low cost operations, high service levels, string supply chain and effective selling

1.2.2 Elements of branding

The following are elements that should be considered and incorporated into company branding strategy They will take on a different mix of importance depending on factors such as product life cycles, competitive activity, importance to consumers, loyalty patterns of consumers, commodity or custom perception and others But within product environment, these elements will all have to be addressed

 Existing perceptions of the product category by target market segments

 Existing structure and infrastructure in this product category

 Competition for the same dollar from other product categories

 Product attributes deemed important to target market segments

 The positions currently occupied by you and your competitors in the collective minds of target market segments

 Product differentials, real or perceived by target market segments

 Corporate images of the marketers of products in your category

 Expectations of buyers about products in your category

 The programs, activities and policies in support of your brand They include names, logos, packaging, slogans, ad content, ad media, ad specialties, trade shows, contests sponsored, public relations, literature, promotions, events sponsored, distribution channels used, charities and causes supported, web

graphic standards, customer relations policies and personnel, audio symbols/themes, trade association and standards committee participation, and any other activities that provide exposure of the brand to your markets

by you and by your competitors

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 Relation of a particular brand with other brands from the same company (line extensions, brand adaptations, co-offerings etc.)

 Budget and financial considerations

 Product expectations for volume, profit, longevity

 The mix of elements and environment make branding a complex and ongoing activity, but it can lead to focused, consistent, powerful and cost-effective marketing performance which in turn can lead to increased market

share and profits

1.2.3 Benefit of branding

For smaller companies, well-focused and consistent attention to branding, and to creating favorable, memorable positioning of company product or service in the minds of prospects and customers is the most effective way to compete, to rise above the static and become a factor in the competitive arena in which you‟ve chosen to participate

Specific benefits of branding can make company more competitive

 Differentiation or distinguishes the firm‟s product from that of rivals Branding allows a company to differentiate themselves from the competition and, in the process, to bond with their customers to create loyalty So a position is created in the marketplace that is much more difficult for the competition to poach A satisfied customer may leave But a loyal one is much less likely to

 A vehicle for communication and promotion

 Goodwill value and Build strong image

 Facilitates customer recall and self selection

 Allows a higher price to be charged

 A means of obtaining legal protection for product features

 Reduced competition

 Lower marketing costs

 Reduced sales volatility

 The ability to attract and keep better customers and employees

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 Opportunities for brand extensions

 Possible co-branding opportunities with like-minded products or services

1.2.4 Importance of branding: Branding has taken on a greater significance in the

past decade as companies begin to see their brands as assets - as valuable and as tangible as their factories and patents So brands have become more than marketing slogans and icons today: they are now closely monitored by the CEO and CFO, and assessed by industry analysts and pundits

Many B2B marketers and service providers have yet to practice, or even appreciate, the value of branding in their particular businesses The truth is every business, even

a commodity supplier, is building a brand through their actions and their presence even if that brand is not being intentionally created and nurtured They acquire a

“position” in the minds of customers and prospects, a position or identity based on exposure and experience with the provider in the context of a competitive marketplace

Why does company need building brand?

 To protect the product - differentiate the product of company with others

 To aid advertising activities in marketing strategy

 To communicate value between company with other parties

 To target segment which company doing business

 To aid recognition the image of company

 To convey the image of the product- Improves customer loyalty

 Reduces the level and cost of personal selling

 Increases take up by distributors

 Aids positioning - Facilitates segmentation

 Associated products can be added and launched under the brand name

 Added value-through performance and psychological meanings

1.2.5 What factors are important in building brand value?

1.2.5.1 Quality

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Quality as a vital ingredient of a good brand Remember the “core benefits” – the things consumers expect These must be delivered well, consistently The branded washing machine that leaks, or the training shoe that often falls apart when wet will never develop brand equity

Research confirms that, statistically, higher quality brands achieve a higher market share and higher profitability that their inferior competitors

1.2.5.2 Positioning

Positioning is about the position a brand occupies in a market in the minds of consumers Strong brands have a clear, often unique position in the target market Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, packaging and the way in which it is delivered In fact, successful positioning usually requires a combination of these things

1.2.5.3 Repositioning

Repositioning occurs when a brand tries to change its market position to reflect a change in consumer‟s tastes This is often required when a brand has become tired, perhaps because its original market has matured or has gone into decline

1.2.5.4 Communications

Communications also play a key role in building a successful brand The brand positioning is essentially about customer perceptions – with the objective to build a clearly defined position in the minds of the target audience

All elements of the promotional mix need to be used to develop and sustain customer perceptions Initially, the challenge is to build awareness, then to develop the brand personality and reinforce the perception

First-mover advantage

Business strategists often talk about first-mover advantage In terms of brand development, by “first-mover” they mean that it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the market There is plenty of evidence to support this

1.2.5.5 Long-term perspective

This leads onto another important factor in brand-building: the need to invest in the

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brand over the long-term Building customer awareness, communicating the brand‟s message and creating customer loyalty takes time This means that management must “invest” in a brand, perhaps at the expense of short-term profitability

1.2.5.6 Internal marketing

Management should ensure that the brand is marketed internally as well as externally By this mean that the whole business should understand the brand values and positioning This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives Think of the brands that you value in the restaurant, hotel and retail sectors It is likely that your favorite brands invest heavily in staff training so that the face-to-face contact that you have with the brand helps secure your loyalty

1.2.6 Brand strategy

Table 3: Brand building process

1.2.6.1 Brand building process

Approach to building strong brand

There are four sections or levels to this framework As in building a house, it makes sense to begin brand construction with a strong foundation and a clear direction

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The next level includes the brand systems and processes necessary to guide effective brand building Then Brand strategy includes the brand value proposition, brand identity and experience

Finally, there‟s brand implementation, the tactics and days to days decision which

we all know can be 5 times harder than strategy

1.2.6.2 Branding strategy

Table 3: Branding Strategy

BRAND STRATEGY – Kotler

using existing brand

Over time, each type of brand can be developed further A company introduce line

extensions (existing brand name extended to new sizes of flavors in the existing

product category), brand extension (brand name can extended to new product categories), Multibrands (new brand names introduced in the same product

category), new brands (new brand name for a new category product), and branding (combining tow or more well-known brand names)

co-Line extensions consist of introducing additional items in the same product category

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under the same brand name, such as new flavor, forms, colors, added ingredients, and package sizes Line extension involves risks and has provoked heated debate among marketing professionals On the downside, line extensions may lead to the brand name losing its specific meaning However, lone extensions can and often to have a positive side They have much higher chance for survival than brand-new products Some marketing executive defend line extensions as the best way to build

a business Line extensions are also fueled by fierce competition in the market place Line extensions of strong brands, symbolic brands, brands given strong advertising and promotion support, and those entering earlier into a project subcategory are more successful

Brand extension is used when a company uses its existing brand name to launch

new products in other categories Honda uses its company name to cover such different products as automobiles, motorcycles, snow blowers, lawnmowers, amine engines, and snowmobiles Brand-extension strategy offers many of the same advantages as line extensions Examples are Sony, Samsung, and so on Yet like line extension, brand extension also involves risks The new products might disappoint buyers and damage their respect for the company‟s other products Companies are tempted to transfer their brand name must research how well the brands‟ associations fit the new product The best result would occur when the brand name builds the sales of both the new product and the existing products; acceptable result, the new product sells well without affecting the sales of the existing product; the new product fails and hurts the sales of existing products

Multi-brands, New brand, and Co-Brand: A company will often introduce

additional brands in the same product category Sometimes the company is trying to establish different features pr appeal to different buying motives Multi-brand strategy enables a company to lock up more distributor shelf space and to protect its major brand by setting up flanker brands A major pitfall in introducing multi-brand entries is that each might obtain only a small market share, and none may be particularly profitable The company will have dissipated its resources over several brands instead of building a few highly profitable brands Ideally, a company‟s brands within a category should cannibalize the competitors‟ brands and not each

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other At the very least, the net profits with multi-brands should be larger even if some cannibalism occurs When a company launches products in a new category, it may find that non of its current brand names are appropriate Co-branding is that tow ore more well-known brands are combined in an offer Each brand sponsor expects that the other brand name will strengthen preference or purchase intention

1.2.6.3 Brand strategy decisions

Brand strategy will vary with whether the brand is a functional brand, an image brand or an experiential brand Consumers purchase a functional brand to satisfy a

functional need Functional brands have the best chance to satisfy if the are seen as providing superior performance (Tide) or superior economy (Wal-Mart) Functional brands rely heavily on “product” or “price” features

Image brands arise with product or services that re difficult to differentiate, or to

assess quality, or convey a statement about the users Strategies include creating as distinctive design, associating them with celebrity users, or creating a powerful advertising image

Experiential brands involve the consumer beyond acquiring the product The

consumer encounters “people” and “place” with these brands

1.2.7.Tools for branding

A common misconception is that brands are basically built by advertising Kotler said that it is true that TV advertising in its early days was the most effective brand-

building tool But Al & Laura Rise in 22 Immutable Laws of Branding convinced us

that the most effective way to build a strong brand is Publicity Publicity must go first and Advertising follows Advertising is just like a defensive tool when a brand has been built by Publicity

In general, there are some tools to build a brand, among the most important are:

 Advertising

Advertising in magazines, newspapers, trade journals, or even on the radio or television will expose a brand to a large number of people in a short space of time There is no better way of exposing your brand, but substantial advertising is very expensive, particularly in the long term Advertising planning should always take

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into account the type of business you are in, and who you are aiming to sell or expose your brand to

 PR

Public Relations exposure can inform a wide range of people about your brand through trustworthy sources such as newspapers A news story that references your brand is given to the media outlets, which then decide whether or not to run the story

PR is not as expensive as advertising, but results can vary considerably depending

on the type of business you run, the availability of stories, and even what is going

on in the news that week

 Word Of Mouth

Highly satisfied customers will generally tell other people about your business, this can be used to help spread your brand Be careful however, as unsatisfied customers will usually tell more people about their experiences than satisfied customers will Word of mouth exposure is free, and helps to lodge your brand name and image in your potential customers minds

Advertising and promotions can also encourage word of mouth; many businesses run competitions or „teaser‟ advertising that often makes people talk about the advert (and therefore your brand) Discounts given when an existing customer introduces a friend are another common way of increasing word of mouth exposure

 Sponsorships: Brands are frequently promoted in sponsor events, such as

music show, game show, football cup

 Clubs and consumer communities: Brand can from the center of a customer

community, such as Toyota automobile owners

 Factory visits: some companies built theme parks at their factories and they

invite visitors to spend a time in

 Trade shows: that can be a great opportunity to build brand awareness,

knowledge, and interest

 Event marketing: Many automobile companies make an event out of

introducing their new car models

 Social case marketing: Brands can achieve a following by donating money to

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charitable causes

 Direct Marketing Systems: Contact with customers via Mail, telephone

 High value for the money: some brands create positive word of month by

offering exceptional value of the money Examples include IKEA and Vietnam Airlines

Other Tools for branding

 Corporate Identity/Logo Design

 Internet Sites/CD-ROMs

1.2.8 Brand management

Brand management is the application of marketing techniques to a specific product, product line, or brand It seeks to increase the product's perceived value to the customer and thereby increase brand franchise and brand equity Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with present and future purchases of the same product This may increase sales by making a comparison with competing products more favorable It may also enable the manufacturer to charge more for the product The value of the brand is determined by the amount of profit it generates for the manufacturer This results from a combination of increased sales and increased price

1.2.8.1 Brand Asset Management

This becomes relevant given that the top three strategic goals for brand strategy nowadays are increasing customer loyalty, differentiating from the competition, and establishing market leadership It is important for a company to change its state of mind in order to adopt this perspective because “brand management has to report all the way to the top of the organization and has to involve every functional area” The Brand Asset Management process, as shown in Figure below, involves four phases and eleven steps The first phase is to develop a brand vision, which consists

of a single step: developing the elements of a brand vision The basic objective of this step is to clearly state what the branding efforts must do to meet corporate

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goals The second phase is to determine the company‟s “BrandPicture” by understanding consumer perceptions about the brand and of competitor brands This phase consists of three steps: determining the brand‟s image, creating the brand‟s contract - list of customer‟s perceptions of all the current promises the brand makes-, and crafting a brand-based customer model -which allows for understanding how consumers act and think, and how and why they make their purchase decisions The third phase is to develop a brand asset management strategy, in order to determine the correct strategies for achieving goals according to the brand vision This phase consists of five steps: positioning the brand, extending the brand, communicating the brand‟s positioning, leveraging the brand, and pricing the brand Finally, the fourth phase is to support a brand asset management culture

Table 4: Brand Asset Management Process

1.2.8.2 Brand equity

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There is no question that a strong brand is an important corporate asset Brand

equity cannot be measured in dollars and cents but rather it is a direct result of how

consumers value a brand based on their experiences and perceptions It is these experiences and perceptions that permit the brand to earn greater volume or margins than it could without the brand name

There are many steps involved with building a brand‟s equity including; brand awareness (unaided/aided), brand attributes, message association, brand favorability, brand preference, and ultimately brand loyalty

Each has an important role in moving a consumer towards a purchase and should be understood in terms of their specific function

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BRANDING

STAGE OF BRAND BUILDING Brand awareness

Early

Brand attributes Is the brand cool? Hip? Intelligent?

Good value? Stable? Innovative?

Etc

Middle

Message association Does the brand offer a specific

value proposition to the consumer

Middle

Brand favorability Is the brand well-respected and

appreciated beyond being known and even used?

Late

Brand preference Where does the brand stand when

consumers are asked to choose among a competitive set?

Late

Brand loyalty Is the brand strong enough to keep

consumers coming back for more?

After conversion

Brand equity has also been defined as the enhancement in the perceived utility and desirability a brand name confers on a product High brand equity is considered to

be a competitive advantage since: it implies that firms can charge a premium; there

is an increase in customer demand; extending a brand becomes easier; communication campaigns are more effective; there is better trade leverage; margins can be greater; and the company becomes less vulnerable to competition In other words, high brand equity generates a “differential effect”, higher “brand knowledge”, and a larger “consumer response”, which normally leads to better brand performance, both from a financial and a customer perspective

Financial Perspective

Financial value-based techniques extract the brand equity value from the value of the firm‟s other assets Simon and Sullivan define brand equity as the incremental cash flows which accrue to branded products over and above the cash flows which would result from the sale of unbranded products These authors estimate a firm‟s brand equity by deriving financial market estimates from brand-related profits

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Taking the financial market value of a firm as a base, they extract the firm‟s brand equity from the value of the firm‟s other tangible and intangible assets, which results in an estimate based on the firm‟s future cash flows Along the same line of thought, argues that brand equity is reflected by the ability of brands to create value

by accelerating growth and enhancing prices In other words, brands function as an important driver of cash flow

Customer Perspective

Aaker and Joachimsthaler define brand equity as brand assets linked to a brand‟s name and symbol that add to, or subtract from, a product or service According to them, these assets, shown in Figure, can be grouped into four dimensions: brand awareness, perceived quality, brand associations, and brand loyalty

Brand Equity Model

Table 6: Model of Brand equity

Brand awareness affects perceptions and taste: “people like the familiar and are prepared to ascribe all sorts of good attitudes to items that are familiar to them” (Aaker and Joachimsthaler) Perceived quality influences brand associations and affects brand profitability Brand associations are anything that connects the

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consumer to the brand, including “user imagery, product attributes, organizational associations, brand personality, and symbols” “Brand loyalty is at the heart of brand‟s value The concept is to strengthen the size and intensity of each loyalty segment” Any way that brand equity is considered, it Brand Equity Loyalty can be understood as the incremental value a brand name grants a product

Keller introduces the Customer-Based Brand Equity (CBBE) model, which approaches brand equity form the perspective of the consumer -whether it be an individual or an organization The model is based on the premise that the power of a brand lies in what customers have learned, felt, seen and heard about the brand as a result of their experiences over time He defines CBBE as the differential effect that brand knowledge has on consumer response to the marketing of that brand, which emerges from two sources: brand awareness and brand image

According to Keller, brand awareness consists of brand recognition – the

“consumer‟s ability to confirm prior exposure to the brand when given a brand as a cue” - and brand recall -the “consumer‟s ability to retrieve the brand form memory when given the product category, the needs fulfilled by the category, or a purchase

or usage situation as cue” On the other hand, “brand image is created by marketing programs that link strong, favorable, and unique associations to the brand in the memory” These associations are not only controlled by the marketing program, but also through direct experience, brand information, word of mouth, assumptions of the brand itself - name, logo, or with the brand‟s identification with a certain company, country, distribution channel, person, place or event

The way to build a strong brand, according to the CBBE model, is by following four sequential steps, each one representing a fundamental question that customers ask about brands:

1 Ensuring the identification of the brand with a specific product category or need in the customer‟s mind -who are you?

2 Establishing the meaning of the brand in the customer‟s mind by strategically linking tangible and intangible brand associations with certain properties -what are you?

3 Eliciting customer responses to the brand identification and meaning -what

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about you?

4 Converting the response into an active, intense and loyal relationship between the customers and the brand -what about you and me? The CBBE model is built by “sequentially establishing six „brand building blocks‟ with

customers”, that can be assembled as a brand pyramid Brand salience relates

to the awareness of the brand Brand performance relates to the satisfaction

of customers‟ functional needs Brand imagery relates to the satisfaction of customers‟ psychological needs Brand judgments focus on customers‟ opinions based on performance and imagery Brand feelings are the customers‟ emotional responses and reactions to the brand Brand resonance

is the relationship and level of identification of the customer with a brand Few customers are this brand-loyal David Aaker distinguished five levels of a customer attitude toward a brand, form lowest to highest:

- Customer will change brands, especially for price reason No brand loyalty

- Customer is satisfied No reason to change the brand

- Customer is satisfied and would incur costly by changing brands

- Customer values the brand and sees it as a friend

- Customer is devoted to the brand

Brand equity is highly related to how many customers are in class 3, 4, or 5 It is also related, according to Aaker, to the degree of brand name recognition, perceived brand quality, strong mental and emotional associations, and other assets such a as patents, trademarks, and channel relationships

1.2.8.3 From Brand Assets to Brand Equity

Table 7: From brand assets to brand equity

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1.2.9 Brand Orientation

Brand Orientation is an approach in which the processes of the organization revolve around the creation, development, and protection of brand identity in an ongoing interaction with target customers with the aim of achieving lasting competitive advantages in the form of brands Brand orientation focuses on developing brands in

a more active and deliberate manner, starting with the brand identity as a strategic platform It can be said that as a consequence of this orientation the brand becomes

an unconditional response to customer needs and wants This should be, however, considered carefully given that what is demanded by customers at any given moment is not necessarily the same as that which will strengthen the brand as a strategic resource Following this reasoning, the wants an needs of customers are not ignored, but they are not allowed to unilaterally steer the development of the brand and determine its identity

According to the brand orientation model, the starting point for a process of brand building is to first create a clear understanding of the internal brand identity The brand then becomes a strategic platform that provides the framework for the satisfaction of customers‟ wants and needs The point of departure for a brand-oriented company is its brand mission

1.2.10 Brand Hexagon

Brand Hexagon, integrates brand equity and brand identity with a company‟s direction, strategy and identity The right side of the model reflects the reference function -product category and product, which are analyzed rationally, while the left side of the model reflects the emotional function –corporate and brand name, which are analyzed emotionally A brand is experienced in its entirety, which means that both emotions and rational thought are involved

The lower part of the model -mission and vision- reflects the company‟s intentions towards the brand, while the upper part reflects the way that target consumers interpret the brand At the center of the model lies the core process of brand meaning creation, which includes the positioning and core values

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Table 8: Brand Hexagon

The brand building process is two-part: internal and external The internal process

as that used primarily to describe the relationship between the organization and the brand, with the internal objective being for the organization to live its brands Conversely, the external process is that concerned with relations between the brand and the customer, with the external objective of creating value and forming relationships with the customer

1.2.11 Corporate Branding

Businesses began shifting their focus from product brands to corporate branding The corporate brand perspective supports, and could be a consequence of, the

strategic view of brands King is considered to be the first author to make a clear

distinction between product and corporate brands, emphasizing the importance of a multidisciplinary approach in order to manage them It is after 1995 when more research on corporate branding is published Balmer and Gray‟s literature review on corporate branding presents different visions that have been developed during the years prior They conclude that corporate brands are leading to the development of a new branch of marketing which should be known as corporate- level-marketing Aaker defines a corporate brand as a brand that represents an organization and reflects its heritage, values, culture, people, and strategy Corporate branding congruent with the strategic brand vision, wells on developing brands at an organizational level -which requires managing interactions with multiple

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stakeholders A corporate brand is defined primarily by organizational associations, and thus can develop and leverage organizational characteristics, as well as product and service attributes

The corporate brands must reflect organizational values In other words, an organization‟s core values must be the guiding light of the brand building process, both internally and externally They must be built into the product, expressed in behavior, and reflected in communication Core values influence continuity, consistency and credibility in the building of a corporate brand

Corporate and product brands are different in terms of their composition, constituencies, maintenance, management, and disciplinary roots There are six differences between product and corporate branding:

1) The shift in focus from product to corporation of the branding effort;

2) The different exposure the organization is subject to, which makes the firm‟s behavior and its interaction with society much more visible;

3) The relation of the brand to all company stakeholders, not just customers; 4) The requirement of organization-wide support;

5) The temporal dimension of corporate brands includes past and future, not just present;

6) The greater reach of corporate brands than product brands means that they take on more strategic importance

Given these differences, they describe a corporate branding framework, shown in Table 9, which is based on three elements: strategic vision, organizational culture and corporate image They argue that developing the corporate brand involves articulating and aligning these three elements, which can be achieved when an effective dialogue between top management, external stakeholders, and members of the organizational culture is established Given the fact that corporate brands concern multiple stakeholders, this framework should be extended in order to include a fourth variable: the competitive environment of the organization, both from the perspective of its current image and current culture

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Table 9: Elements of Corporate Branding

Six “conventions” of corporate brand building, illustrated They are:

 Brand context: understanding where the brand stands

 Brand construction: how the brand is positioned in accordance to customer

and stakeholder value

 Brand confirmation: the way the brand is articulated to the rest of the

organization and all of its audiences

 Brand consistency: delivering clarity to all stakeholders through its

The Six Conventions of Corporate Branding

In sum, from the corporate brand vision every activity of the company should be seen through the lens of the brand (Schultz and Hatch 2003)

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1.2.12 Brand identity

A brand identity is a trademark or distinctive name that identifies your business in the mind of the consumer This can include (but is not limited to) a name, a logo, corporate colours, a style, a typeface, a tagline, or a slogan

It also a unique set of associations that the brand strategist aspires to create or maintain These associations represent what the brand should stand for and imply a potential promise to customers It is important to note that a brand identity refers to the strategic goal for a brand; while brand image is what currently resides in the minds of consumers

Brand image is the understanding consumers derive form the total set of related activities engaged by the firm suggests passing from brand management to identity management by placing special importance on the internal aspect of brand building More emphasis needs to be placed on brand identity Identity is about ethos, aims and values that present a sense of individuality differentiating the brand Brand‟s identity in terms of vision and culture, which drive positioning, personality, and any other subsequent relationships In this sense, employees and staff members‟ vision and culture affect the brand building process More attention should be placed on internal aspects of branding, such as the role staff plays in shaping a brand‟s values

brand-According to Urde, the development brand identity is a process that revolves around interacting with the target customers with the aim of achieving lasting competitive advantages in the form of brands This can be done by developing a personality for the brand that will provide a basis for a unique relationship Further objectives identified as related to the development of brand identity are; to establish brand loyalty, to generate value and meaning and to satisfy customer needs and wants This can be achieved when the customers experience the brand as valuable and unique, and therefore becomes hard for competitors to copy

Building brand identity requires additional decisions on the brand‟s name, logo, colors, tagline, and symbol

At the same time, a brand is much more than logo, colors, and tagline, or symbol

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These are marketing tools and tactics A brand is essentially a marketer‟s promise to deliver a specific set of features, benefits, and service consistently to the buyers The marketer must establish a mission for the brand and a vision of what the brand must be and do The marketer must think that he is offering a contract to the customer regarding who the brand will perform The brand contract must be honest

At best, the brand campaign will create name recognition, some brand knowledge, maybe even some brand preference, but an ad campaign does not create brand bonding, no matter how much the company spends on advertising and publicity Brand bonding occurs when customers experience the company as delivering on its benefit promise The fact is that brands are not built by the brand experience All of the customers‟ contacts with company employees and company communications must be positive The brand idea not tale unless every one in the company lives the brand Too many companies make brand promises by fail to train employees to understand and deliver on the brand promises Companies can carry internal branding with their employees to understand, desire, and deliver on the brand promise

1.2.13 Other concepts

In addition to the brand building models discussed above, it is worth mentioning some other relevant concepts found in literature

Brand architecture is the structure of brands within an organizational entity It is

the way in which the brands within a company‟s portfolio are related to, and differentiated from, one another The architecture should define the different leagues of branding within the organisation; how the corporate brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the core purpose of the corporate brand to which they belong

Types of brand architecture

There are three generic relationships between a master brand and sub-brands

1 Monolithic brand or Branded house These brands use a single name across

all their activities and this name is how they are known to all their stakeholders – consumers, employees, shareholders, partners, suppliers and

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other parties

2 Endorsed brands The endorsement of a parent brand should add credibility

to the endorsed brand in the eyes of consumers This strategy also allows companies who operate in many categories to differentiate their different product groups‟ positioning

3 Product brand or House of brands The individual sub-brands are offered to

consumers, and the parent brand gets little or no prominence Other stakeholders, like shareholders or partners, know the company by its parent brand

Brand Image

Brand image includes the totality of consumers' opinions about, experiences with, and attitudes toward a company or organization and their brand as compared with that of competitors

A unique set of associations within the minds of target customers which represent what the brand currently stands for and implies the current promise to customers (Note that brand image is what is currently in the minds of consumers, whereas brand identity is inspirational)

Brand Attributes Functional or emotional associations that are assigned to a brand

by its customers and prospects Brand attributes can be either negative or positive and can have varying degrees of relevance and importance to different customer segments

Brand Audit A comprehensive and systematic examination of all collateral (both

tangible and intangible) which relates to a brand

Brand Awareness The proportion of target customers that recall a brand

Realisation by a consumer of the existence and availability of a particular product Brand awareness is a common measure of marketing communications effectiveness Unaided awareness is spontaneous; aided or prompted awareness is when the name

is recognized among others that are listed or identified

Brand Essence Brand Essence is a way of articulating the emotional connection

and lasting impression - usually summed up with one simple statement or phrase -

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that defines the qualities, personality and uniqueness of a brand Said another way, Brand Essence characterizes what a brand stands for in the minds of customers and stakeholders It embodies the brand‟s core competencies, advantages, culture and values

Think of Brand Essence as the heart and soul of a product or service A brand‟s essence establishes a positive, powerful connection with everyone with whom it touches It represents the relationship and intrinsic value the brand provides to the customer For those who serve the brand, it is a beacon that motivates and inspires continued commitment Brand Essence should be viewed as long-term positioning

It is reflected in the quality and evolution of a product, how it is communicated and marketed, the type of care and concern customers receive, and the way stakeholders support the brand

Brand Loyalty

Brand loyalty is a consumer‟s preference to buy a particular brand in a product category It occurs because consumers perceive that the brand offers the right product features, images, or level of quality at the right price This perception becomes the foundation for a new buying habit Basically, consumers initially will make a trial purchase of the brand and, after satisfaction, tend to form habits and continue purchasing the same brand because the product is safe and familiar

Brand loyalty has been proclaimed by some to be the ultimate goal of marketing In marketing, brand loyalty consists of a consumer's commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy True brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand

Brand Personality

Aaker develops the concept of brand personality, or the set of human characteristics associated with a brand Its can help distinguishing and identifiable characteristics which offer consistent, enduring and predictable messages and perceptions There are five dimensions are distinguished -the “big five”- that help to explain the symbolic and self-expressive functions of a brand: sincerity, competence,

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excitement, sophistication, and ruggedness

Brand Leadership

Aaker and Joachimsthaler leave behind the traditional branding model and introduce the brand leadership model, “which emphasizes strategy as well as tactics” In this model, the brand management process acquires different characteristics: a strategic and visionary perspective; the brand manager is higher in the organization, has a longer time job horizon, and is a strategist as well as communications team leader; building brand equities and developing brand equity measures is the objective; and, brand structures are complex, as the focus is on multiple brands, multiple products, and multiple markets In short, brand identity and creating brand value become the drivers of strategy

 The brand makes easier for the seller to process order and track down problems

 The seller‟s brand name and trademark provide legal protection of unique

Branding

Decision

Sponsor Decision

Brand-Brand Name Decision

Brand Strategy Decision

Brand positioning Decision

Re Brand

-No Brand

Manufactu rer brand Distributor brand Licensed brand

Individual name Blanket family name Separate family Company individual

Line extensions Brand extensions Multi - Brands New Brand Co-Brand

- Repositioning

- No repositioning

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product features

 Branding gives the seller the opportunity to attract a loyal and profitable set

of customer

 Branding helps the seller segment market

 Strong brands help build the corporate image, making it easier to launch the new brand and gain acceptance by distributors and consumers

Distributors and retailers want brands names because brands make the products easier to handle, hold production to certain quality standards, strengthen buyer preference, and make it easier to identify suppliers Consumers want brand names to help them identify quality differences and shop more efficiently

Brand-sponsor decision

A manufacture has several options with respect to brand sponsorship The product

may be launched as manufactures brand (sometimes call a national brand, or corporate brand), a distributor brand, or licensed brand name (franchised brand

name can be an alternative)

To maintain their power, the leading brand marketers need to invest in heavy and continuous R&D to bring out new brands, line extensions, features, and quality improvements They must sustain a strong “pull” advertising program to maintain high consumer brand recognition and preference They must find way to “partner” with major mass-distributors or become a powerful distributor

Brand-name decision

Manufactures and service companies who brand their products must choose which brand names to use Four strategies are available:

1 Individual names: A major advantage of an individual-names strategy is that the

company does not tie its reputation to the products If the product fails or appears to have low quality, the company‟s name or image is not hurt A manufacturer of good-quality motorcycle, such as Honda, can introduce a lower-quality line of motorcycle (called Wave) without diluting the Honda name The strategy permits the firm to search for the best name for each new product

2 Blanket family names: This policy is followed by KinhDo and Vinamilk A

blanket family name also has advantages Development cost is less because there is

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no need for “name” research or heavy advertising expenditures to create name recognition Furthermore, sales of the new product are likely to be strong if the manufacturer‟s name is good Vinamilk introduces new milk product under its brand name with extreme simplicity and achieves instant recognition

brand-3 Separate family names for all products: This policy followed by Sears (Kenmore

for appliances, Craftsman for tools, and Homart for major home installations) Where a company produces quite different products, it is not desirable to use one blanket family name When Mead Johnson developed a diet supplement for gaining weight, it created a new family name, Nutriment, to avoid confusion with its weight-reducing products, Metrical Companies often invent different family names for different quality lines within the same products class

4 Corporate name combined with individual product names: This policy is

followed by Kellogg (Kellogg‟s Rice Krispies, Kellogg‟s Raisin Bran, and Kellogg‟s Corn Flakes), as well as Honda, GE, and Hewlett-Packard The company name legitimizes, and individual name individualizes, the new product

Once a company decides on it brand-name strategy, it faces the task of choosing a specific brand name The company could choose the name of a person (SonHa, DuyLoi, ThaiTuan), location (PhuQuoc, Kentucky Fried Chicken), quality (Safeway, Duracell), lifestyle (Weight Watchers, Healthy Choice), or an artificial name (Exxon, Kodak) Among the desirable qualities for a brand name are the following:

- It should suggest something about the product‟s benefits

- It should suggest the product or service category

- It should suggest concrete, “high imagery” qualities

- It should be easy to spell, pronounce, recognize, and remember

- It should be distinctive

- It should not carry poor meaning in other countries and languages

Normally, companies choose brand names by generating a list of possible names, debating their merits, eliminating all but a few, testing them with target consumers, and making a final choice Today many companies hire a marketing research and

vast computer duress include association tests (What images come to mind?),

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learning tests (How easily is the name pronounced?), memory tests (How well is the

name remembered?) and preference through other databases to make sure the chosen name has not already been registered The whole process, however, is not cheap

Many firms strive to build a unique brand name that eventually will become intimately identified with the product category Examples are Kleenex, Levis and Xerox Federal Express officially shortened its marketing identity to FedEx, a term that has become a synonym for “to ship overnight” Yet identifying a brand name which a product category hs threaten the company‟s exclusive rights to that name Given the rapid grow of the global marketplace, companies should choose brand name that work globally One thing Compaq liked about the name Presario for its line of home computers is that it conjures up similar meanings in various Latin-influenced languages (France, Spanish, Latin, or Portuguese) Some company has to change its brand name when coming to a new market place For example, Auheuser-Busch cannot be name “Budweiser” in Germany

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