by Keller
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1. Outline the eight main ways to leverage secondary associations.
2. Explain the process by which a brand can leverage secondary associations.
3. Describe some of the key tactical issues in leveraging secondary associations from different entities.
This chapter addresses the way in which secondary associations can be leveraged to build brand equity. Secondary associations are those related to other entities to which a brand is linked, such as the parent company, country of origin, channels of distribution, spokespeople, events, characters, other brands, and third-party sources. The link may lead consumers to assume or infer that beliefs, attitudes, and perceptions they have for the external source also hold for the brand. This ability to “borrow” equity from the people, places, or things associated with the brand creates additional leverage for marketers beyond that generated by brand elements and marketing programs.
Leverage can only occur when consumers are familiar with the external source and associations for the sources are relevant to the brand. The leveraged associations are most likely to be considered in brand choice decisions when consumers have low interest or knowledge levels. Three criteria for evaluating the extent of leverage resulting from brand linkage to another entity: awareness of knowledge of entity, meaningfulness of the entity’s knowledge, transferability of the entity’s knowledge.
Eight different ways to leverage secondary associations to build brand equity are linking the brand to: (1) the company making the product; (2) the country or some other geographic location in which the product originates; (3) retailers or other channel members that sell the product; (4) other brands, including ingredient brands; (5) licensed characters; (6) famous spokespeople or endorsers; (7) events; and (8) third-party sources.
The chapter notes that attempts to leverage secondary associations require the company to relinquish some control over the branding process. In particular, managing the transfer process so that only the relevant secondary associations become linked to the brand may be difficult. Unwanted secondary associations may also become linked to the brand. For example, if one of two brands in a co-branding agreement becomes a target for negative publicity, the other brand may find its brand equity negatively affected as well.
Brand Focus 7.0 discusses one of the biggest events for corporate sponsorship, the Olympic Games. Companies spend up to $50 to be lead sponsors for the Games, and then spend as much as $100 million on related marketing activities; however, not everyone thinks the Games provide good value since the increasing commercialization of the competition makes it harder to break through the clutter.
Academics have identified the following five dimensions of a retailer’s brand image:
• Access The location of a store and the distance that consumers must travel to shop are basic criteria in their store choice decisions.
• Store Atmosphere Different elements of a retailer’s in-store environment, like color, music, and crowding, can influence consumers’ perceptions of its atmosphere, whether or not they visit a store, how much time they spend in it, and how much money they spend there.
• Price and Promotion Consumers are more likely to develop a favorable price image when retailers offer frequent discounts on a large number of products than when they offer less frequent, but steeper discounts.
• Cross-Category Assortment Consumers’ perception of the breadth of different products and services offered by a retailer under one roof significantly influences store image.
• Within-Category Assortment As the perceived assortment of brands, flavors, and sizes increases, variety-seeking consumers will perceive greater utility, consumers with uncertain future preferences will believe they have more flexibility in their choices, and, in general, consumers are more likely to find the item they desire.
Academic research has explored the effects of co-branding and ingredient branding strategies:
• Co-Branding Park, Jun, and Shocker compare co-brands to the notion of “conceptual combinations” in psychology. The findings show how carefully selected brands can be combined to overcome the potential problems of negatively correlated attributes (here, rich taste and low calories).
Simonin and Ruth found that consumers’ attitudes toward a brand alliance could influence subsequent impressions of each partner’s brands Brands less familiar than their partners contributed less to an alliance but experienced stronger spillover effects than their more familiar partners. Voss and Tansuhaj found that consumer evaluations of an unknown brand from another country were more positive when it was allied with a well-known domestic brand.
Kumar found that introducing a co-branded extension into a new product category made it less likely that a brand from the new category could turn around and introduce a counter-extension into the original product category. LeBar and colleagues found that joint branding helped to increase a brand’s perceived differentiation, but also sometimes decreased consumers’ perceived esteem for the brand and knowledge about the brand.
• Ingredient Branding Desai and Keller conducted a laboratory experiment to consider how ingredient branding affected consumer acceptance of an initial line extension, as well as the ability of the brand to introduce future category extensions.
The results indicated that with slot filler expansions, although a co-branded ingredient eased initial acceptance of the expansion, a self-branded ingredient led to more favorable later extension evaluations. With more dissimilar new attribute expansions, however, a co-branded ingredient led to more favorable evaluations of both the initial expansion and the subsequent extension.
BRANDINGBRIEF7-1
IBMPROMOTESASMARTERPLANET
IBM decided it needed to radically transform itself from a product-focused company to a value-added, services-oriented company. IBM Chairman and CEO Sam Palmisano spun off the company’s famous PC division and began to invest heavily in software and business consulting. Another critical aspect of the transformation was aligning the public perception of IBM with this new vision. “Smarter Planet” became the slogan for the corporate campaign, which had its roots in some of IBM’s recent accomplishments.
The initial goal of the “Smarter Planet” campaign was to position IBM as a leader in solving the world’s most pressing problems. One of the first campaign activities was an op-ad series, “Building a Smarter Planet,” targeting forward-thinking leaders.
The campaign also included TV ads and targeted ads to three groups: business and government leaders in large organizations, IT professionals, and the mid-market. It included a strong digital component, with an expanded IBM Web site and a Smarter Planet blog. Videos were created and distributed across eight of the largest video-sharing sites. IBM also launched a “Smarter Cities” global tour to bring key policy and decision makers together to discuss the topical issues they faced, such as transportation, energy, health care, education, and public safety.
IBM analysts estimated that the Smarter Planet strategy expanded its market potential by as much as 40 percent globally, or by an additional $2.3 billion in revenue. IBM’s brand tracking revealed increases across the board on a variety of image measures and overall judgments related to consideration, preference, and likelihood of doing business. IBM’s stock price increased by 64 percent during the campaign.
In November 2010, New Zealand was ranked as the third-strongest country brand in the world, a credit to the country’s remarkable qualities, but also to its concerted marketing program through the years.
In 1991, New Zealand began a branding initiative called “The New Zealand Way.” The key objectives of the New Zealand Way brand campaign were to reposition New Zealand to reflect its contemporary positioning and undertake a sustained campaign that could be a powerful force to benefit trade and tourism in the global marketplace. The New Zealand Way brand campaign promoted the country, its tourism and trade products and services, and its famous people, known as “Brand Ambassadors.”
In 1999, a decision was made to develop a more focused campaign for tourism and Tourism New Zealand sharpened its destination global marketing with its campaign: “100% Pure New Zealand.” The campaign focused on building awareness of New Zealand as a unique holiday destination due its spectacular natural landscapes and fascinating culture and people.
Buoyed also by publicity from the highly popular Lord of the Rings film trilogy, which was filmed there, plus the profile from the America’s Cup which Tourism New Zealand cleverly used for promotion, the number of visitors to the country increased by 50% during this time. NZTE chose to focus its branding efforts on international business development reflecting emerging and relevant values for enterprise such as innovation, creativity, and integrity.
In 2011, the tag line for the tourism campaign was changed to “100% Pure You” with the subline, “It’s About Time.” The intent was to build on the prior campaign to target people who were actively considering New Zealand for a holiday vacation and to encourage them to travel soon.
DuPont introduced a number of innovative products for use in markets ranging from apparel to aerospace. Many of the company’s innovations became household names as ingredient brands in consumer products manufactured by many other companies.
DuPont learned an important branding lesson the hard way. Because the company did not protect the name of its first organic chemical fiber, nylon, it was not trademarkable and became generic. A key question that DuPont constantly confronts is whether to brand a product as an ingredient brand. To address this question, the firm has traditionally applied several criteria:
• On the quantitative side, DuPont has a model that estimates the return on investment of promoting a product as an ingredient brand. The goal of the model is to determine whether branding an ingredient can be financially justified, especially in industrial markets.
• On the qualitative side, DuPont assesses how an ingredient brand can help a product’s positioning. If competitive and consumer analyses reveal that conveying certain associations would boost sales, DuPont is more likely to brand the ingredient.
2013 Pearson Education, Inc. publishing as Prentice Hall.
DuPont maintains that an appropriate, effective ingredient branding strategy leads to a number of competitive advantages, such as higher price premiums, enhanced brand loyalty, and increased bargaining power with other members of the value chain. DuPont employs both push and pull strategies to create its ingredient brands.
Guidelines for managing a person brand:
• A person brand must manage brand elements.
• A person brand is built by the words and actions of that person.
• A person brand can borrow brand equity through secondary associations and employ strategic partnerships with other people to enhance brand equity.
• Credibility is key for a person brand.
• Person brands can use multiple media channels
• A person brand must stay fresh and relevant and properly innovate and invest in key person traits.
• A person brand should consider optimal positioning in terms of brand potential and associated points-of-parity and points-of-difference.
• Brand architecture is simpler for a person brand but brand extensions can occur, for instance when a person adds to his or her perceived capabilities.
• A person brand must live up to the brand promise at all times.
• A person brand must be a self-advocate and help to shape impressions.
BRANDFOCUS7.0
Corporate sponsorship is a significant part of the business side of the Olympics and countries themselves vie for the rights to host the Games.
Corporate sponsorship of the Olympics exploded with the commercial success of the 1984 Summer Games in Los Angeles. At that time, many international sponsors, like Fuji, achieved positive image building and increased market share. Besides direct expenditures, firms spent hundreds of millions more on related marketing efforts.
Although several firms have long-term relationships and commitments with the Olympics, in recent years other long-time sponsors have cut their ties. Although many factors affect the decision to engage in or renew an Olympic sponsorship, its marketing impact is certainly widely debated.
In some cases, sponsorship confusion may be due to ambush marketing, in which advertisers attempt to give consumers the false impression they are Olympic sponsors without paying for the right to do so. Nonsponsoring companies attempt to attach themselves to the Games by, for instance, running Olympic-themed ads that publicize other forms of sponsorship like sponsoring a national team, by identifying the brand as an official supplier, or by using current or former Olympians as endorsers. Containing ambush marketing requires much diligence.
The 2008 Summer Games in Beijing held special appeal for some advertisers because the Games represented a connection to the burgeoning Chinese market. General Electric began its first global campaign revolving around the Beijing Games in 2005. UPS also chose the Beijing games to strengthen its brand presence in China.
Recognizing the important financial contribution of sponsorship, the London Games were supported by the British government’s introduction of extensive anti-ambush legislation. Banned were activities such as sky-writing, flyers, posters, billboards, and projected advertising within 200 meters of any Olympic venue. Organizers of the London Games also embarked on a multimillion dollar advertising campaign, “The Greatest Tickets on Earth,” in hope of raising £500 million from ticket sales. Outside the country, the government also embarked on a “Visit Britain” and “Visit London” promotional campaign to attract tourists.
A number of benefits may be evident for a host country that can be hard to quantify. One important psychological benefit is civic pride and patriotism for serving as host to such an iconic global sporting event. Another often-overlooked benefit is the investment in improving infrastructure that often leads up to hosting the Games.
Many corporate sponsors continue to believe that their Olympic sponsorship yields many significant benefits, creating an image of goodwill for their brand, serving as a platform to enhance awareness and communicate messages, and affording numerous opportunities to reward employees and entertain clients. Other view the Games as overly commercialized, despite the measures undertaken by the IOC and USOC to portray the Olympics as wholesome. In any case, the success of Olympic sponsorship depends in large part on how well it is executed and incorporated into the entire marketing plan.
1. The Boeing Company makes a number of different types of aircraft for the commercial airline industry, e.g., the 727, 747, 757, 767, and 777 jet models. Is there any way for Boeing to adopt an ingredient branding strategy with their jets? How? What would be the pros and cons?
Boeing could develop an ingredient branding strategy by leveraging its corporate name more for use on the interior and exterior of planes, on literature issued inside the plane,
2013 Pearson Education, Inc. publishing as Prentice Hall.
on ticketing information, and in airline advertising. Boeing could also develop an advertising campaign featuring its different jet models. Pros: more business, more recognition, and greater equity. Cons: greater accountability (particularly in the event of a crash) and competitors can adopt similar strategy.
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Learning Objective: Outline the eight main ways to leverage secondary associations.
AACSB: Analytic Skills
2. After winning major championships, star players often complain about their lack of endorsement offers. Similarly, after every Olympics, a number of medal-winning athletes lament their lack of commercial recognition. From a branding perspective, how would you respond to the complaints of these athletes?
Athletes are brands unto themselves, and sponsorship and endorsement opportunities exist because the sponsoring company wishes to borrow some of the athletes’ brand equity. Just like commercial brands, athletes vary in the strength, favorability, and uniqueness of consumers’ associations to them. In team sports, strong and favorable associations typically exist among the fan base for the entire team, but it is difficult for more than a few individual players to attain unique associations. Many Olympic sports do not engender strong associations, and those athletes that do manage to develop strong and favorable associations often encounter difficulty setting themselves apart from other medal-winners. Developing unique personalities, abilities, and stories would be a recommended course of action for athletes looking to capitalize on their achievements.
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Learning Objective: Explain the process by which a brand can leverage secondary associations.
AACSB: Analytic Skills
3. Think of the country in which you live. What image might it have with consumers in other countries? Are there certain brands or products that are highly effective in leveraging that image in global markets?
Answers will vary. Because it’s typically a legal necessity for the country of origin to appear somewhere on the product or package, associations to the country of origin almost always have the potential to be created at the point of purchase and to affect brand decisions there. Students may be asked to assess how certain products leverage the image of their country in other markets.
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Learning Objective: Explain the process by which a brand can leverage secondary associations.
AACSB: Reflective Thinking
4. Which retailers have the strongest image and equity in your mind? Think about the brands they sell. Do they help to contribute to the equity of the retailer? Conversely, how does that retailer’s image help the image of the brands it sells?
Answers will vary. Because of associations to product assortment, pricing and credit policy, quality of service, and so on, retailers have their own brand images in consumers’ minds. Retailers create these associations through the products and brands they stock and the means by which they sell them. To more directly shape their images, many retailers aggressively advertise and promote directly to customers.
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Learning Objective: Describe some of the key tactical issues in leveraging secondary associations from different entities.
AACSB: Analytic Skills
5. Pick a brand. Evaluate how it leverages secondary associations. Can you think of any ways in which the brand could more effectively leverage secondary brand knowledge?
Answers will vary. Students may be divided into groups of four and may be asked to choose a brand and assess its secondary associations.
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Learning Objective: Explain the process by which a brand can leverage secondary associations.
AACSB: Analytic Skills
1. Ask students to poll consumers regarding their associations for different countries. What products or services fit with and could benefit from being linked to the countries? Are the associations consistent with the way in which products and services from those countries are being marketed? (Can be related to Branding Brief 7-2: Selling Brands the New Zealand Way)
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Learning Objective: Explain the process by which a brand can leverage secondary associations.
AACSB: Analytic Skills
Question type: Individual/Group
Time to complete the exercise: 10-12 minutes
This activity may be carried out after the class is introduced to the concept of how the country or geographic location from which the product originates may also become linked to the brand and generate secondary associations.
2. Tell students to suggest celebrity endorsers for brands currently without one, and to explain their recommendations. For example, does Dennis Rodman’s fiery personality make him a good spokesperson for Tabasco? Does Sean “P. Diddy” Combs’ everpresent cell phone make him a perfect candidate to endorse Nokia phones? Would Rosie O’Donnell be a made-in-heaven match with Nickelodeon because of her love for and knowledge of classic TV shows?
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Learning Objective: Explain the process by which a brand can leverage secondary associations.
AACSB: Analytic Skills
Question type: Individual/Group
Time to complete the exercise: 6-8 minutes
This activity may be carried out before the class is introduced to the concept of celebrity endorsements.
3. Assign students the task of finding co-branding opportunities in various product categories. For example:
Facial tissue Puffs and Vaseline Intensive Care lotion?
Spaghetti sauce Ragu and Gallo wine?
Hotel Red Roof Inn and Serta mattresses?
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Learning Objective: Explain the process by which a brand can leverage secondary associations.
AACSB: Analytic Skills
Question type: Individual/Group
Time to complete the exercise: 10 minutes
This activity may be carried out after the class is introduced to the concept of cobranding.
4. Have students identify a brand with an active licensing strategy and evaluate the fit of the licensed products with the brand’s image. What changes should be made in the brand’s licensing policy? Examples of brands with products in numerous categories outside the original include Jell-O, Looney Tunes, Ralph Lauren and Star Wars.
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Learning Objective: Describe some of the key tactical issues in leveraging secondary associations from different entities.
AACSB: Analytic Skills
Question type: Individual/Group
Time to complete the exercise: 10-12 minutes
This activity may be carried out after the class is introduced to the concept of licensing.
1. Linking the brand to some other entity some source factor or related person, place, or thing may create a new set of associations from the brand to the entity, as well as affecting existing brand associations.
2. Brands can “borrow” equity from their association with people, places, programs, and other non-product-based sources.
3. Leveraging secondary associations can be problematic because it requires marketers to give up some degree of control over the branding process.
4. Secondary associations are strongest when consumers have awareness and strong, favorable, and unique perceptions of the external source.
5. Secondary associations are most likely to affect evaluations when consumers lack the ability or motivation to judge product attributes.
6. Because of associations to product assortment, pricing and credit policy, quality of service, and so on, retailers have their own brand images in consumers’ minds.
7. An existing brand can also leverage associations by linking itself to other brands from the same or different company.
8. Licensing creates contractual arrangements whereby firms can use the names, logos, characters, and so forth of other brands to market their own brands for some fixed fee.
9. A famous person can draw attention to a brand and shape the perceptions of the brand, by virtue of the inferences that consumers make based on the knowledge they have about the famous person.
10. Sponsored events can contribute to brand equity by becoming associated to the brand and improving brand awareness, adding new associations, or improving the strength, favorability, and uniqueness of existing associations.
11. Marketers can create secondary associations in a number of different ways by linking the brand to various third-party sources.
© 2013 Pearson Education, Inc. publishing as Prentice Hall.