Brand Value - Value of the invaluable.

"Brand!!!!", a very common word which we come across at least 10 times a day. We are also very much acquainted with the word Brand Value. But, what is brand value? how to define it? is it measurable? all these are quite difficult to answer. If defined in a layman's language, Brand Value is the amount of acceptance and respect which we receive while wearing the employee tag of a very reputed firm such as Apple or Coca Cola. but the depth of the word Brand Value is beyond that. The most authentic one to speak about brand value and brand equity at present is "Interbrand". Interbrand, a division of Omnicom is an american global branding consultancy which works on brand analytic's, brand strategy, brand valuation etc... Interbrand was started in 1974 when the world thought of the word Brand as just a synonym for logo. They changed the worlds perceptions about brand management and brand value by managing brand as valuable business assets and by evaluating the brand value of global brands annually. Interbrand released their 2013 survey results recently and in the result "Apple" stands first as the best brand in the world with a brand value of $ 98,316 million. This article deals with Brand valuation method, brand elements and Brand Resonance model formulated by Keller.

Before going deep into brand equity, we should know what does brand mean. The American Marketing Association defines a Brand as "A name, term, sign, symbol, or design, or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors." Branding is a simple concept of differentiating our product from others using the power and recognition of brand name. And now comes the major thing, Brand Equity or Brand value. It is the added value endowed on products or services due to the brand name. For example, when we are ready to pay a premium price for an iphone just because of the brand name "Apple", that is the brand value of Apple. This is the sole reason why Apple stands first in the Interbrand survey results. There are a lot of models to explain the brand equity, but what I found as the most relevant is the Keller's brand resonance model. Brand resonance model speaks of Brand development as a series of four steps, and each stage is assisted with certain factors called as Building blocks of a brand. The first stage is Brand Identity.

Brand Identity. 
This is the level to which people identify your brand name and it is established by Brand Salience. Salience means the frequency in which people think about the brand name. In short it is deep and broad Brand awareness. If we consider Apple as an example, there is no need of explaining the brand awareness which it possess. When an average man hears the word apple, the brand Apple comes to his mind before the fruit. This is because of the well established brand salience of Apple. The second stage is developing the Brand Meaning.

Brand Meaning
Brand meaning is developed through establishing performance and imagery. Brand performance is how good or how well is the product. It can be developed only through the quality of the product and the level to which it satisfies the functional needs of the customers. Apple products possess high quality and it has a well established brand performance as the customers have a perception that there is nothing better than Apple products. We often hear from them the famous quote "apple is apple". The second element for brand meaning is Imagery. Brand Imagery is how well you meet the customers needs in a social or psychological level. Apple always stand for innovation and change and customers perceive it as a status symbol, because they carry the change. Now comes the third stage, that is building Brand Response. 

Brand Response.
It is the feelings and reactions of the customers towards the brand. It is developed by establishing Judgments and feelings about the brand. Judgments are the customers own personal opinions and previous experiences regarding the brand and feelings are the customers emotional response when they hear a brand name. one reason for Apple to stay in the top level in terms of brand value is due to the customers perception about the products of Apple as a status symbol and their feeling that they own the best when they own an Apple product. The product quality of Apple also plays a part because all the branding strategies are in vain if the product do not stand. And the final stage of Brand building is Developing Brand Relationship.

Brand Relationship
Here the brand tries to create a psychological bonding between the customers and they feel like these names are the part of their day to day life. The phenomenon is called as Brand Resonance. Resonance means the intensity of customers psychological bond with the brand. Global Brands like Apple, Google and Coca Cola has gained the first three spots in the Interbrand's List of Top 100 Brands of 2013, mainly because of their high resonance. All these three brand names are pronounced by a person at least once a day. Finally, the brand building strategies of all the firms aim upon increasing the Brand resonance of their own brand.

Keller's Resonance pyramid is only one among the different brand building models; though this is the most recommended. I used Apple as a major example to explain this model because of its latest triumph by becoming the firm with highest brand value surpassing Coca Cola which stood first in 2012. Building Brand equity is not just a theory of four steps. Establishing all these stages requires careful planning, Support from advertisements and other promotional strategies and right choice of brand elements such as name, logo etc. for example, the logo of Apple is an amazing example of leveraging on brand elements. The Apple logo is memorable, meaningful and likable which gives them a huge advantage in building up their Brand equity. Even though i tried to explain the resonance model with the help of Interbrand and its Top 100 list, the Brand Valuation method of Interbrand is different. It consists of five different steps i.e, Market segmentation, Financial Analysis, Contribution of Branding, Brand Strength Measurement and NPV of forecasted Brand earnings. This method will be explained in detail in another post. Follow The Blog to get notified!!!!

iphone 5C, What went wrong?

All through the way back from 90's, the brand name Apple has successfully positioned themselves in one thing, i.e, "INNOVATION". Steve Jobs and Wozniac did their best to brand it in such a way that, whenever a new product from apple is about to be announced, the expectation of the consumers were too high and apple products especially iphones often went beyond these expectations since the inception of the first iphone in 2007. That is why Apple succeeded in creating a personalized, self owned Niche market for them and that niche was called as "Die hard Apple fans".

Now, when the present conditions are heated by the Android revolution, Microsoft Spearheading, Google - Motorola takeover, Microsoft - Nokia Takeover and challenge from Samsung; Apple was obviously expected to do something different from their usual modus operandi. But, the change they decided to make is doubted to not have the great "Apple" quality. iphone 5S and 5C is not reviewed as the right successors for the great predecessors of them. It is because of the single reason that they are lacking innovation. All through the history, Apple was trying to indulge in a kind of emotional branding ( Emotional Branding is a term used within marketing communications that refers to building brands that appeals directly to consumers emotional state, needs and aspirations). People used to love iphones and they were emotionally attached to that. The need for an Apple product was usually placed in the Esteem needs under Maslow's Hierarchy of needs (Refer Maslow's Hierarchy of needs). The expensive iphones were usually meant for above middle class and the niche which I have already mentioned about. Holding an iphone was considered as a status symbol, but the latest addition to the family iphone 5C was expected to be a middle mans phone with plastic bodies and colored back cases similar to Samsung and Lumia's. That is why, questions were raised such as "Can cheap Apple be real Apple?". A shift in the positioning of the brand is always a hard decision, but in Apple's case it was inevitable. They had no other option as the biggest Smartphone markets except USA started hugging Samsung Phones more than ever (Yes, I am talking about China and India). But, when a new product, that too different from the convectional positioning of the brand is about to be released, there are two things that has to be considered with prime consideration. i) Most suitable Pricing ii) Proper Market Research. All went wrong here for Apple and iphone 5C. The last letter "C" in the latest apple product was expected to be pointing at the word "CHEAP" before its announcement on September 10,2013. Since it was made with cheaper products and cheap labor from china, it was supposed to be cheaper than it actually is. It was explicit that Apple was targeting the Chinese Smartphone market (The biggest in the world) with their new products, but iphone 5C was wrongly priced for a market in which $300-$400 is considered as a middle range smartphone. iphone 5C which was marketed in such a way to position it as a cheaper middle range Apple, disappointed everyone when it was priced in an overwhelming $549. The pricing in almost all the regions is disappointing such as 599 euros in majority parts of Europe and 469 Pounds in UK. The wrong pricing has actually hit the Brand as iphone 5C contributes only a meager portion towards the combined sales of 5S and 5C, that is 9million units after the first weekend of release. The disappointment created by iphone 5C is a perfect example to underline the importance and relevance of "PRICE" in the 4 P's of Marketing. It is also heard that many of the features of the new Apple products are not really useful and as innovative as expected. This is due to the fault of market research. Even though Apple came first in the latest survey of "Interbrand" as the Brand with most Brand Value, Wrong pricing policy adopted for iphone 5C will always remain as a black mark for Apple and its CEO Tim Cook who has a Himalayan responsibility to match his legendary predecessor Steve Jobs.

Distribution - Complicated, but Most Crucial.

When we talk about the traditional 4 P's of Marketing i.e. Price, Place, Promotion and Product. The second "P", i.e. Place stands tall and remains as the most crucial in the marketing mix. As the time goes on, new concepts and moreover new "P's" get added to the broad world of marketing. But the importance of Distribution Channels which is also called as Marketing channels never get faded and new strategies are made frequently for getting the supremacy in Distribution Networks. In the age of Brands, majority of the brand wars are taking place for winning that most crucial "P", i.e. PLACE. It ranges from the low level fights of the employees of different firms for the shelf space with maximum visibility in a retail store to international tie-ups between conglomerates to distribute a product in particular markets. 

Speaking more about Distribution Channels, It can be broadly defined as the "Path through which goods and services move from the manufacturers to the final users for consumption". If we broadly classify the distribution channels, we will be able to find only two types,i.e. Direct and Indirect. Direct Distribution is without intermediaries and Indirect Distribution is with intermediaries, that is further classified as Level 1 - Only one intermediary ( Retailers in most cases); Level 2 - with two intermediaries (Retailers and wholesalers in most cases) and it goes on. The discussion about distribution channels will be incomplete if I don't mention about the different types of distribution. In major, there are three types of distribution. 1)Intensive Distribution :- In this type, the products will be filled and stocked in almost all the outlets available. Products will be made available in the smallest convenience stores to the biggest hyper markets. This kind of distribution strategy is mostly followed by impulse goods such as snacks,magazines etc...  

2)Selective Distribution :- In this type, manufacturers select a few and selected intermediaries to sell their products. This strategy is observed for more specialized goods. For example antique items, craft tools etc...

3)Exclusive Distribution :- In this strategy, manufacturers select only a very few intermediaries, that too their own franchises to sell the products. This strategy is most followed by expensive goods such as Automobiles etc... Selecting a distribution channel and type of distribution is one of the most crucial business decision of any firms. Even though there are a lot of theories to learn about distribution channels,it is obvious that in practical world, most of the firms go for their own uniquely designed distribution channels. Success lies in how effective and proper is their channels of distribution. They have to consider a lot of factors such as BRAND POSITIONING, TYPE OF PRODUCT, COST OF CHANNELS, TIME TO MARKET AND ON-SHELF COMPETITION. It is definitely not a good idea to sell the most costly watches of Rolex and Rado through the outlets of Walmart. If they have to position their products properly as a premium product, they will have to follow an exclusive distribution. At the same time, it will be ridiculous if cadbury decides to sell their chocolates only through their own outlets. For them, availability in market is the most crucial thing. Items like automobiles cannot be sold online, but apparels can be. Like this, Firms will have to decide their Distribution Channel. As the business world is moving in an admirable pace, most of the leading brands in the world is following a Hybrid marketing channel or Multichannel marketing. Hybrid marketing Channel means the use of more than one marketing channel to make the distribution network more effective. Apple Sells their iphones and ipads both through their own Apple Stores and and re-sellers. They even use the help of online retailing portals like E-bay and Flipkart and  retailing giants like Walmart and Tesco. All these different channels are used to make their distribution network very effective. But there is all possibility that Hybrid Distribution channels may result in channel conflicts as in the case of Apple products in which the re-sellers of iphones in USA confronted against the Apple stores for reducing their margins and making their business weak. So, even when using different channels of distribution, managing all these channels properly and maintaining good relations with the intermediaries is crucial for the success of any firm. 

While talking about Hybrid marketing channels, i would like to mention about PepsiCo. here, as they are one among the best brands in the world who designs and manages their distribution channels in the most effective way. In the matter of distribution operations, they outshines most of the other leading brands in the world. That is the sole reason why Hindustan Unilever joined their hands with Pepsi for distributing HUL's Lipton Ice Tea in India in 2003. Lipton Ice Tea which was not a market hit was transformed into a preferred product by the efficient distribution strategies of Pepsi. In USA, depending on the product involved Pepsico used different distribution methods such as DSD (Direct store delivery), BWD (Broker warehouse system), V&FS (Vending and Food Service system). For products which are very delicate like snacks (Pepsi's world famous Frito Lay products) they adopted the DSD system in which the employees of Pepsi actually go over to the retailers stores and arrange the products in their shelves. For their beverages like pepsi, tropicana etc... they adopted BWD in which they assigned third party distributors. V&FS are Pepsi's own sales personnel who is making their products available in schools, colleges, stadiums etc... Pepsi has one of the largest V&FS sales force in USA comprising of around 600 people. Efficiency in designing and maintaining the distribution channels has made Pepsi the top player in soft drinks industry. The Precision and innovation of Pepsi in designing their Distribution channels is actually a model for other firms. Even though I mentioned about Pepsi here, there are a lot of other brands who have excellent Distribution channels. All these underlines my previous statement that the "P" of "Place" stands tall in Marketing Mix.

Point Of Purchase Displays - Increasing Relevance

When it comes to what to buy, more decisions than ever before, 76% to be exact is made on the store. This in-store purchase decisions are often the major part of sales of many companies. Why Purchase decision is so unstable even though 100's of "shopping list" applications are available in the different smartphone application markets. If your answer is "The Emergence of Organized retailing", then it will not be specific. Here comes the relevance of POP's or Point of Purchase. The actual definition of point of purchase is that, "It is a place where sales are made or purchase decision is taken." So simple!! On a macro level it can be a Mall, Market or Even a city depended upon the product. On a micro level retailers consider it as a place in the store where the customer makes a purchase decision. The most frequent POP is the billing counter and the most often sold products over there are the impulse goods such as chocolates, magazines, novelties etc.. So there is a line of connection between the words Point Of Purchase, Impulse Goods and unplanned purchase decisions. On June of 2012, Point of Purchase Advertising International (POPAI) released the results of its recent research on the shopper decision process. To the surprise of many, the in-store decision rate according to POPAI is an all-time high of 76 percent. Now, I think i have made the title of this article more transparent. It is this increasing trend of unplanned purchase decisions that has increased the relevance of Point of Purchase displays. POP Displays can be anything such as small posters, cutouts, electric boards, shelf arrangements,display stand, dummy packs etc. which suddenly induces the customer to purchase the product.The relevance of POP displays can be well understood, if we observe the number of POP displays manufacturing and supplies companies emerging out in different parts of the world. In USA alone we can find around 50 different such firms.

In smaller retail outlets, POP displays are usually supplied by the manufacturer of the products, but located and maintained by the in-store sales persons or store managers.This is less common in larger Retail outlets such as the Walmart, Carrefour, Tesco etc.. who are usually called as the mighty retailers and is having high purchasing power. They control the supplier activities and prefer to use Displays designed in-house to ensure that store layouts and corporate themes are consistent. When I speak about POP Displays and the impulsive purchase decisions created by this, I am not underestimating the customers as someone who decides what to buy only through the Display ads inside a retail store. Customers of this  Era is filled with product knowledge more than the people of any times, but still, the availability of product in the stores, competitive pricing and POP displays do make a difference in the decision of the customer. Moreover most of the shopping lists made by the customers before visiting a store will be product based and not Brand based. So the decision regarding the brand selection is most often taken place inside the sore at least for the convenience goods. This is where the POP Displays is so important. Innovations should be regular in this field as outdated Displays and techniques can give negative results. POP Displays can fetch poor results also by Not considering the shoppers line of sight, Failure to adhere to retailers space limitations, Wrong location of the display, Over design etc.. Walmart is one retail firm which has brought revolution in Point of Purchase innovation by their latest addition of  Walmart TV, (A flat screen television which shows advertisements and other details, often attached to a shelf or rack.). This is actually creating an evolution to the POP displays to shoppers engaging instruments. Innovation is mandatory for survival in the market. While designing innovations for the different factors, Point of Purchase should be given prominent consideration as People actually buy things from there and after all the purchase decision of the customer is all that matters. 

Google - Initiator of an Evolution.

The world has now turned into a battlefield of brands. There may be many reasons for the emerge of this many corporate brands in the world as suggested by economists such as Result of globalization etc... but i feel it as a natural episode of the world of evolution. In the ancient Era, emperors fought each other for increasing the size of their Empire and that role has been handed over to the conglomerates when the era of kingdoms were over. One firm which is doing this role perfectly is Google.

Google is a computer software and a web search engine company that has been acquiring, on average, more than one company per week since 2010. The list of acquisitions made by Google from 2010 includes around 150 different firms. You can click on the following link for having a glance on the list of acquisitions made by Google since 2010.  http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Google . I wanted to mention about Google and its continuous acquisitions here, when i read about its latest acquisition of Motorola Mobility. Motorola Mobility was earlier functioning as the cellular division of  Motorola. Google agreed to acquire Motorola mobility on August 15 2011 for US$12.5 billion. The merger was completed on May 22 2012. and from February 26 2013, Motorola Mobility is simply known as "motorola a Google company". I emphasis on the word "a Google company" because i feel like Google is on a strive to make the world of technology "A Google Company" as Alexander the Great wanted to make the whole world Greek in BC

300's. It was very clear that the eyes of Google was always on the booming mobile industry, from the moment it purchased Android Inc. An Era of Tablets and Mobiles has already reached and there will not be more time for the computers to be in museum. I expect the Extinction of desktop computers to happen in next 10 years and gradually laptops too. Then Smartphones will be ruling the world and Google will be the Emperor. The only place where Google did not had a hold was making devices and that too is solved by the purchase. Google is one company which exactly follows the rule of the modern brand world, i.e, "Don't we have it, Then buy it". Google believes that purchasing power is the one that matters and it has worked in every cases such as Youtube, Adsense etc.. Just because motorola is now a google company, i expect the upcoming products of motorola to make new records in sales. Because google has one thing which is most important in this world, "VISIBILITY". There will not be a day in a human being's life without coming across the word "Google". Its not because of extensive advertisement, google usually don't follow the strategy of aggressive advertising, but they believe Service is the best advertisement. And all the software services required by a modern man is now from Google. This has even led to a proverb that "There is nothing that Google cant do". We all very well know that Samsung overtook Apple recently in smartphone sales, and the major reason for that is the technological supremacy given by Android. Now, Google themselves has entered the smartphone market and now allies can turn into foes. These are the comments made by the leading android partners after the motorola acquisition of google. 

J.K. Shin, President, Samsung, Mobile Communications Division

“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”

 Ken Hong, LG spokesman

"We will continue [to] support the Android operating system, and we have no concerns about the changes in the Android environment.” 

Even though the comments are diplomatic, i am sure that new strategies are made in these camps because they are the people who very well know what is the capability of Google and what kind of innovations it can make. It is sure that Motorola is about to make a mark in the smartphone market and they have started the revolution with their latest Droid series and the new personalized Moto X series. Google will always stand shining in the history of world business, because it initiated an evolution of business world from the era of "Satisfying the customer" to an era of "Surprising the Customer". I said this because, whenever Google announces a new product, It will be having something which the customer cant even expect to have or not even imagine. I personally as an android user is experiencing this. Now, I am Expecting wonders from "motorola a Google company" and i am sure that my next smartphone will be a motorola.