Importance of Brand and Brand Equity

The provided report highlights the significance of brand and brand equity in a business organization. It emphasizes that both are necessary components for an organization to succeed. Suitable methods should be used for managing the brand image in the market. The report also mentions the importance of modifying strategies for increasing market share, sales, and profit, as well as providing satisfaction to consumers.

Brand Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 AND P2: Importance of branding as a marketing tool and key components of a successful
brand strategy.........................................................................................................................1
TASK 2............................................................................................................................................5
P3: Different strategies of portfolio management, brand hierarchy and brand equity
management............................................................................................................................5
TASK 3............................................................................................................................................7
P4: Critical evaluation of brand leveraging ...........................................................................7
TASK 4............................................................................................................................................9
P5: Evaluate different types of techniques for measuring and managing brand value..........9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Brand management refers to the analysis and planning of ways through which a brand is
treated at the market place. The aim of brand management is to develop good relations with the
target market. The tangible elements of brand management are look of products, their price,
packaging, features etc. Brand management plays an essential role in marketing for enhancing
the economic value of a good or brand. Optimum impression limited is the taken organisation in
this report for task 1 which was founded in 2003 in UK and dealing in joinery installations. For
task 2, taken organisation is the McDonald which is a fast food chain. In this report, explanation
of brand and brand management will be provided. Further this report will determine the different
strategies which are necessary for building the brand. Also this report will discuss the ways
through which brands can be leveraged along with collaborative partnerships. In the end,
evaluation of techniques for measuring the brand value, brand awareness etc. will be done in this
report.
TASK 1
P1 AND P2
Brand is Power
INTRODUCTION
Branding refers to the tool or promotion activities which a name, symbol or design is
created for identification and differentiating from products of other firms or business. Brand is
considered as the power as it sets the stories, relationships, expectations and memories together
which assist the consumers in selecting the products and services of a brand. Brand equity is a
marketing term which states the economic worth or value of a brand. This value is determined
by the perceptions of consumers towards the brand and it’s provided products. Branding is very
important for any firm in order to improve their market share, brand image, profitability and
revenue. Branding provides the credibility to the business firms. The business firms can stand
out as unique through the branding in a saturated market. Branding is also important for firms to
maintain the customer loyalty. Branding is also beneficial for businesses in attracting potential
clients.
Stages for building brand
There are several stages which are used for building a successful brand through dealing
1

with the competitors using the differentiated brand and products. These stages for building the
brand starts with identifying target customers, defining mission of brand, research for the
competition, create value propositions and marketing of the products (Abrahams, 2016).
First stage is the identifying target customers in which the firms should needs to
determine their potential and targetted customers whom the products and services of the firm is
provided. Second stage is defining mission of brand in which the mission and vision of the firm
is conveyed to the employees and consumer of brand. Through this, the employees and
consumers become aware regarding the goals of organisation and the purpose for providing the
services and products. Third stage is research for the competition in which the firm needs to do
research for determining their competitors and their offerings. Through the research, firm can
determine the features which can be used in the products for capturing more market share.
Fourth stage is creating value propositions for differentiating the offerings of the brand from its
competitors. When the products are easily differentiable from the competitors products then
firm can attract more customer's towards the brand. Fifth stage is marketing of the products in
which marketing and promotion of the brand and its products is done.
Through the marketing, firm can attracts a lot of potential customers which will also
increases the profitability and revenue of the firm in the market. Through these stages,
customer's loyalty and huge profit along with sales can be achieved by the business. Marketing
department plays a major role in building and improving the brand equity such as by promoting
and marketing the brand and its products, creating brand awareness, etc. By using the marketing
in increasing the brand equity, McDonald can improve their customer base and profit by
reaching to the wider sections of consumers through internet and social media platforms.
Consumers in today's era are more active on social media rather then their own lives. McDonald
needs to advertise their products and services on various internet platforms which will assist the
firm in improving their customer base and sales.
MAIN BODY
Brand is not only a name, logo or symbol, but is more than it. McDonald is one of the
biggest organisations in the food sector which is properly processing their powerful and
impulsive brands for solidifying their customer base. The long term success of a brand mainly
depends upon the brand equity. It acts as a model for determining the experience and
perspective of the customers towards the brand and its products. For example: McDonald is
2

using different strategies for improving its brand equity. Proper communication is one of the
attractive strategy through which McDonald is achieving the brand equity. McDonald is
operating in several countries so the employees’ deals with the people of different cultures. The
firm needs to determine the economic process needs in an effective manner for ensuring a
proper multilingual, cultural delicate, mobile and online communication takes place with the
customers. Effective communication is also useful in resolving financial and legal matters.
Further, brand awareness is also a strong strategy through which the consumers remember the
brand and its offerings, when huge number of competitors exists in the market. For enhancing
the brand awareness, McDonald is going to use the latest social media marketing and content
marketing as their most suitable promotional tools for improving the brand awareness and brand
equity. The legal and ethical alternatives of McDonald are the central prospect of brand equity.
This is helpful in protecting the consumers from the unfair practices which will allow then in
going to court and legislations for complaining regarding the unethical behaviour and
malpractices in the market (Batey, 2015). Also the central prospect is beneficial in
implementing the strategies for brand extension and revitalisation.
Brand extension is a marketing strategy itself in which a brand is used for marketing the new
products in marketplace. There are several strategies through which a product is introduced in
the market with new form which is differentiated from the parent product. For example:
McDonald McAloo also comes with Mexican flavour. Also by including various flavours in
same product will create a new product. For example the McAloo burger helps in creating green
Aloo naan. The last strategy for brand extension is to add a feature or benefit in the existing
brand such as Spicy rice bowl with chicken strips added a benefit to spicy rice bowl. Brand
revitalisation is also a marketing strategy which is adopted when the products become matured
in the market and needs some improvements and modifications for enhancing the sales and
profit. These strategies of McDonald is becoming brand centric.
Keller brand equity model is focused on customers and clients of an organisation. This
model is also known as the customer brand based equity model. This model comes with a
pyramid structure in which explanation of building brand equity is provided by determining the
customers behaviour and then implementing suitable strategies. This model comes with 4 levels
which will be discussed further.
3

Source : Keller’s Brand equity Model, (2018).
The first level is the brand identity which is helpful for the McDonald to identify their
potential consumers and the ways through which they differentiate the brand from one another.
The brand identity is built when the customers does not recognise the brand and are unaware
about the offerings of the brand. For example: McDonald is using the social media platforms
and internet platforms for marketing their brand and it’s provided products. These platforms are
useful for the firm in developing a new product and for increasing the brand awareness.
The second level is the brand meaning which consist of two factors i.e. brand imagery
and brand performance. In Brand meaning, the consumers wants to know more regarding the
brand as they are familiar with the brand name. The performance of brand defines the customer
satisfaction level which is fulfilled by the company or brand (Dessart and et. al., 2015). Brand
imagery states that how well a brand has performed on meeting the needs of customers at social
and physiological levels. For example: McDonald is providing its brand meaning by providing
4
Illustration 1: Keller’s Brand equity Model

features in their products in terms of durability, reliability, serviceability etc. The firm can meet
the imagery needs by determining the experience of customers towards the brand.
The third level is the Brand response which states that the customers’ expectations
towards the brand increases when they start to purchase the products offered by the brand.
When the expectations of the customers are met then their experience and response will be
positive towards the brand and vice versa. When the customers are satisfied with the brand, then
word of mouth is expected from them which will develop a positive feeling in the mindset of
customers. The brand response consist two factors i.e. feelings and judgements. Judgements
refer to the different experiences regarding the brand which builds both negative and positive
responses. Feeling refers to the experience of customers towards the brand. For example: When
McDonald meets the expectations of customers below the superiority level then it will create
average feeling regarding the brand. At the same time when McDonald has positive judgement
then it will positively impact the brand and have favourable response.
The last level is the Brand resonance which belongs to the highest level of pyramid.
Only few of the brands reaches this level. The factors such as values, behaviour, and
engagement of consumers are included in this level. For example: McDonald can provide the
loyalty programs to consumers, gift on products etc. to their customers. The firm can also use
the forum on their website for interacting with the consumers regarding their issues and
problems.
Branding as a marketing tool
Branding is a crucial aspect of the marketing process for promoting any product or
service. Through the branding, firms such as McDonald can compete with the competitors
brands for cutting the competition from throat. The core of branding is to identify the target
market and consumers. Through the branding, firms can determine the preferences and needs of
the consumers as well as of market which is mainly done by using the marketing. Branding is
also very necessary for the McDonald due to various reasons. The firm is providing a large
number of products in the market due to which customers get confused in purchasing the
appropriate product. For eliminating this confusion, branding is suitable as it helps in creating
the preferences for the provided products of firm. Branding is also useful in creating the
recognition of the brand which is done mainly in the marketing (Elliott and et. al., 2015).
Recognised brand are easy to identify due to which customers can easily purchase the products.
5

Effective branding encourages and motivates the employees for achieving their desired
organisational and personal goals. People refer the brand to others when the product fulfils the
demand and needs of customers. Whereas when the brand is not recognised then people won't
refers it to others.
CONCLUSION
A clear branding strategy is helpful in conveying the mission and objectives of the
company to its employees and to work according to these defined objectives and mission.
Through Branding, customer base, sales and profit of the firm can increase which will also
increase the market share. Branding is also helpful in dealing with the competitors and it also
reduces the labour turnover of the firm as the motivated employees work with the full capability
at the Optimum Impression Limited.
TASK 2
P3: Different strategies of portfolio management, brand hierarchy and brand equity management.
A brand portfolio refers to the collection of brand under the control of a single company.
Small business can have single brand but MNC'S generally has several number of brands. Brand
portfolio is mainly taken into consideration when implementing the branding strategic decisions
like launching of new products, divest or harvest products, etc. Every brand has their own
trademark for differentiating with other brands and operates as a single unit (Scholz, 2014). The
brand portfolio allows business firms to compete with various firms at different market places.
Through this portfolio, management of McDonald can develop new policies with a broader
visual aspect. Also, it is useful in assigning the proper resources to the neediest brands. Brand
portfolio strategy is an essential component of the brand equity of firms and this is also
influenced by the brand identity. Some of the strategies and model which are used by the
McDonald are discussed below: Brand of house: This strategy states that the single brand should be used across the
different products and categories. This is focused on brand for increasing its sales and
profit. House of brands: This strategy is focused on the subsets of the brand or firms. The major
or primary brand gets the less or not attention. This strategy needs finances in devoted
6

resources due to functioning of every company as an independent company in terms of
elements and messaging. For example: McDonald is providing its McCafe as an
independent brand not AS McDonald.
House of brand strategy is used by the McDonald for which enables the firm to use different
brand names under a single company. Through this strategy, McDonald can increase their
customer base and revenue which will also improve the productivity of the company in the
market.
Hierarchy management of brands
Brand hierarchy or brand architecture is a hierarchy of brands of a single company. The
brand hierarchy ensures the smooth running of operations of a firm and this strategy is helpful in
targeting the needs of customers (Johansson and Carlson, 2014). Some strategies which can be
used by the McDonald are discussed below: Corporate branding: It is the pattern of utilising the name of a firm as the brand name of
product. Through this strategy, a product can use the brand equity for creating the brand
recognition. For example: McDonald has several brands such as McCafe, Ronald
McDonald etc. which can use the brand equity of McDonald for getting the recognition in
the market. Family brand: This strategy states that the when several products or group of products
are provided with same brand name in the market, then the products are marked and sold
under a single brand name. For example: McDonald is selling New York Cheesecake,
OREO Cheesecake, Frappé etc. under a single brand name i.e. McCafe. Modifier: This strategy states that a word or clause can be directed as the adverb for
qualifying the message of another word. For example: McDonald sells their burgers in
various flavours such as McAloo, salsa chicken burger, salsa bean burger, chicken kebabs
burger etc.
Strategies for managing brand equity
Some strategies which are used by the McDonald for managing the brand equity are
discussed below:
Understanding trends and preferences: The firm such as McDonald needs to determine
the changes in trends and preferences of the consumers based on the demand and requirements
for effectively managing the brand equity (Nagurney and Yu, 2012). McDonald is providing the
7

both veg and non veg burgers to their customers. So firm needs to determine the preferences of
majority of customers who prefers veg or non veg. After this determination, firm can provide the
flavours in the preferred type of burgers to the people for managing its brand equity.
Continuous differentiation: Brands needs to introduce new products and services to their
customers in a fixed interval of time for sustaining in the market. Also McDonald needs to
provide new products to the customers for increasing the brand equity. The firm is providing new
and modified burger products such as hamburgers, chicken kebabs burgers etc.
Continuous expansion: Expansion is a major aspect which can be used for maintaining
strong brand equity. This expansion can be in products or geographical expansion. Through this,
customers stays ensured about the capabilities and size of organisation. For example: McDonald
is successfully running its McCafe brand in different flavours such as New York Cheesecake,
OREO Cheesecake, Frappé etc. at international level.
Aaker’s brand equity model: This model was developed by the Professor David Aaker. This
model states that the brand equity is the combination of brand awareness, loyalty and
associations. This model is useful for improving the perception towards the performance of
product. It also increases the loyalty among the consumers which assist the firm in differentiating
its product from the competitors products. These combined factors offers the final value of the
product or service. There are 4 element of this model which will be discussed below: Brand as Product: It includes the scope, attributes, quality or value of the product. Brand as Organization: it includes the attributes of organisation which is against the
local working and global activities. Brand as Person: It includes the brand personality and the relationship between the
brand and its consumers.
 Brand as Symbol: It includes the audio and video imagery, symbols and the brand
heritage of the firm.
TASK 3
P4: Critical evaluation of brand leveraging
Branding is important for company as it works as a marketing tool for organisation.
Brand leveraging refers to uses of existing brand awareness of company to launch a product in
the existing or new market so to acquire more customers share resulting in higher profitability
8

for company. For instance, after becoming one of the largest food company in the world,
McDonald's has launched McCafe after owning it which deals in coffee and fast food to the end
consumers. With the help of parents company brand name, McCafe has become the largest coffe
chain in various countries like Australia, New Zealand.
There are different kinds through which brand leveraging can be used by company which is
discussed below with functional examples, Line extension: It refers to when company launched any new or modified product or
services in the existing product range so that more customers would be attracted. Main of
McDonald for using line extension is that they can serve their existing customers with a
new taste so that their marginal utility wont be attained for McDonald's product. For
instance, McDonald have first launched their chocolate milkshake in the market and after
its success with the use of brand leveraging, they have launched few more products like
strawberry, banana, vanilla milkshake etc so that niche market of milkshake would be
developed. So it can be said that line extension refers to launching a existing product with
modification in it.
 Brand extension: It is a type of marketing strategy in which company launches new
category of product in the market with the help of their power of brand and brand
leveraging (Johansson and Carlson, 2014). To compete with the company like KFC,
McDonald have launched new product category called chicken selects, chicken
McNuggets etc so that their company will also acquire customers from the non veg
section. It is beneficial of McDonald's because it would assist in increasing their image in
the new market and besides this, cost of launching a product is also decrease to a certain
level.
There are various benefits of brand leveraging to McDonald which is discussed below with
functional examples,
 Low cost in marketing activities: It is important for anyone to make their customer aware
about the products they are offering to satisfy their unmet needs and demands. With the
help of brand leveraging, company does not have to invest in their marketing activities so
to enhance their brand awareness in the market. For instance, recently UK has launched
their Twix Mc flurry in the market, so they do not have to specially invest in promotions
9

activities to sell this product. Their existing image and customers in the market make
their product successful.
But on the other side there is various kinds of disadvantage of brand leveraging for McDonald
which is explained below, Brand image: Their is some cons of using brand leveraging in the working operations as
if the new product does not suits or provide value which customers is expecting then it
will affect the profitability and sales of McDonald's in a negative way. For instance, Mc
Lobster is the product which company has launched to attract and acquire more non
vegetarian customers. But due to high price and low quality of products it did not work
well in market. So negative image of McDonald's is developed in the mind due to which
company sales has reduced to a certain level. Other products which failed miserably and
affects company profitability is Mc Gratin Croquette, Arch Deluxe etc.
Collaborative and partnership agreements
Organisation can only achieve success in the competitive market if they high number of
customers and market share. Company usually opt collaborative and partnership agreements with
the other party so that they can start their business operations in the new market with the hope of
acquiring more customers. For instance, McDonald's can choose collaborative partnership with
the company in different country so that they can utilise their resources to established own
business in the new market. McDonald has partnered with Coca Cola in to provide cold
beverages in their outlet in Des plaines. After that they have worked together in many countries
like India, Bhutan etc. There are various benefits for McDonald through this approach which is
mentioned below,
More reach: Main aim of partnering with other organisation is to increase the
productivity so that both the company can enhanced their efficiency in the market. For instance,
McDonald's can tie up with the other company to start their franchise in the new market. Other
player will take the benefit of McDonald's brand and increase their sales and in return,
McDonald's will get loyalty amount or share in the profit.
10

TASK 4
P5: Evaluate different types of techniques for measuring and managing brand value
There are several techniques which are used by the McDonald to measure and manage
their Brand Value. These techniques are discussed below:
Brand Value: It is an intangible asset for an organisation like McDonald. It is the extra
amount of money which is paid by the customers above of the MRP of products provided by the
McDonald. McDonald can measure their brand value using following approaches: Cost Based Approach: This approach is used for measuring the brand value of a firm. IN
this the brand value is formed by considering the production cost or replacement cost of
product.
 Market Based Approach: In this approach, evaluation of maximum prices is done for
selling the products of McDonald at which the customers are ready to buy the product.
For managing the brand value, McDonald can use the following methods: Continuous Innovation: McDonald can use this method for continuously innovating new
product in order to manage its brand value. Due to change in taste and behaviour of
consumers, McDonald needs to manage their brand value using the new and innovative
products. Social Media Interaction: McDonald can use the social media for managing the brand
value of firm. Through social media, firm can aware the customers regarding the new
products of the firm for increasing their sales and customer base.
Brand Awareness: It is the level up-to which the consumers are aware of the product of a
firm. For measuring the brand awareness, McDonald can use the methods discussed below: Surveys: McDonald can use the surveys for measuring their brand awareness. The firm
can conduct surveys by meeting with the customers, email etc. For getting the idea about
the recalling of the brand by the customers. Through this, the firm can determine the
extent up-to which the consumers are aware of the brand.
 Social Media: Another method for measuring the brand awareness is by using the social
media (Kavaratzis and Hatch, 2013). Through the social media, brand can determine the
customer awareness towards the brand based on the likes, comments and shares on the
posts of products.
For managing brand awareness, McDonald can use the following methods:
11

 Consumer Reach: McDonald can use this for managing their brand value. By increasing
the customer reach, firm can aware the more number of customers regarding its products
which will turn potential customers in real customers. Sponsorship: McDonald can use sponsorship for managing the brand value. Through
this, the firm can maintain the awareness level of customers. This can be done by
sponsoring the programs, sports events, etc. through which the firm can aware the
customers.
Market Share: It is the portion of market which is covered by the organisation using its
products and services. Market Share can be defined as the part of the market covered by the
company or the product of a company. For measuring the Market share, McDonald can use the
methods discussed below: By Total Market Sales Method: Using this method, Firm such as McDonald can
determine its covered market share. It can be identified by dividing the sales to the total
market sales of the firm.
 By Total Revenue Method: Using this method, McDonald can measure their market
share. This can be done by dividing the earning of the firm with the earning of the
industry.
For managing the Market share, McDonald can use the methods discussed below: Innovation: It is considered as the best method for managing the market share of
McDonald. Through this method, taken firm can enhance their market share of products.
Continuous innovations in products make people curious due to which they get attracted
towards the products (Kapferer, 2012). Strengthening Customer Relations: This can also be used for increasing the market
share of McDonald. By making strong relations with consumers, the consumers will refer
the products to their friends and family which will help in increasing the market share of
the firm.
Purchase Intent: It refers to the chances of purchasing the products or services of a firm.
For measuring the purchase intent, McDonald can use the below discussed method:
Funnel Method: This method can be used by the McDonald in order to measure the
purchase intent. The main focus in this method is on purchasing behaviour of consumers and the
price in which they buy products.
12

For managing the purchase intent, McDonald can use the below discussed method:
Customer Interaction among Social Media: By using this method, McDonald can manage the
purchase intent of customers. In this method, consumers are asked to share their experiences on
the social media handles of the firm for influencing the other people.
Customer attitude: It refers to the beliefs, feelings and intentions of consumers for the
products of the firm.
For measuring the customer attitude, McDonald can use the below discussed method:
Customer Satisfaction Surveys: This method can be used by the McDonald to determine
the interests of customers for the products of firm (Wallace, Buil and de Chernatony, 2014). The
firm can ask for satisfaction level of consumers from the products of McDonald.
For managing customer attitude, McDonald can use the below discussed method:
Identify Consumer Perceptions: For managing the customer's attitude towards the
products, firm needs to determine the qualities and features of products which can fulfil the
needs and demands of their customers. This is helpful in changing the attitude of people towards
the products provided by the firm.
CONCLUSION
From the above discussed report, it can be concluded that both brand and brand equity are
necessary components for an organisation. Suitable methods must be use for managing the brand
image in the market. The firms like McDonald needs to modify their strategies for increasing the
market share, sales and profit of the organisation in order to provide the satisfaction to
consumers.
13

REFERENCES
Books and Journals
Abrahams, D., 2016. Brand risk: adding risk literacy to brand management. Routledge.
Batey, M., 2015. Brand Meaning: Meaning, myth and mystique in today’s brands. Routledge.
Burmann, C. and König, V., 2011. Does internal brand management really drive brand
commitment in shared-service call centers?. Journal of Brand Management. 18(6).
pp.374-393.
Dessart and et. al., 2015. Consumer engagement in online brand communities: a social media
perspective. Journal of Product & Brand Management.24(1). pp.28-42.
Elliott and et. al., 2015.Strategic brand management. Oxford University Press, USA.
Iglesias, O., Singh, J.J. and Batista-Foguet, J.M., 2011. The role of brand experience and
affective commitment in determining brand loyalty. Journal of Brand Management.
18(8). pp.570-582.
Johansson, J.K. and Carlson, K.A., 2014. Contemporary brand management. Sage Publications.
Jurisic, B. and Azevedo, A., 2011. Building customer–brand relationships in the mobile
communications market: The role of brand tribalism and brand reputation. Journal of
Brand Management. 18(4-5). pp.349-366.
Kapferer, J. N., 2012. The new strategic brand management: Advanced insights and strategic
thinking. Kogan page publishers.
Kavaratzis, M. and Hatch, M. J., 2013. The dynamics of place brands: An identity-based
approach to place branding theory. Marketing theory. 13(1). pp.69-86.
Lin, Y.H., 2015. Innovative brand experience's influence on brand equity and brand satisfaction.
Journal of Business Research.68(11). pp.2254-2259.Abrahams, D., 2016. Brand risk:
adding risk literacy to brand management. Routledge.
Nagurney, A. and Yu, M., 2012. Sustainable fashion supply chain management under
oligopolistic competition and brand differentiation. International Journal of Production
Economics. 135(2). pp.532-540.
Scholz, L., 2014. Brand management and marketing of luxury goods. Anchor Academic
Publishing (aap_verlag).
Wallace, E., Buil, I. and de Chernatony, L., 2014. Consumer engagement with self-expressive
brands: brand love and WOM outcomes. Journal of Product & Brand
Management.23(1). pp.33-42.
Online
Keller’s Brand equity Model. 2018. [Online]. Available Through :
<https://www.marketing91.com/kellers-brand-equity-model/>
14