Branding in the New Millennium: SAJEMS NS Vol 6 (2003) Report Overview

This report delves into the core concepts of branding, highlighting its significance as a strategic tool for creating awareness, building reputation, and shaping an organization's image. It emphasizes the evolution of branding beyond traditional domains, including retail, leisure, and digital platforms. The report underscores the importance of brand consistency and customer trust, and it uses Heineken beer as a case study to illustrate the practical application and impact of effective branding. The report also examines the characteristics of successful global brands and the factors that contribute to their sustained success, touching on how they influence consumer behavior, and generate shareholder value. The analysis includes insights into marketing strategies, brand management, and the challenges facing businesses in the new millennium, particularly from a South African perspective.

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The Power of Branding: Revisiting an “Old
Friend”
________________________________________________________________
E J North, T Kotzé, O Stark and R de Vos
Department of Marketing and Communication Management, University of
Pretoria
________________________________________________________________
ABSTRACT
Branding is a key strategic tool used to create awareness, reputation and build
the organisation’s image. Marketers consider brands as carriers of values, and
the development and implementation of branding strategies and programmes
have lately expanded to include more than the traditional corporate, product and
service domains of branding. In this article we set out to define and briefly
discuss the nature of branding and indicate how brands are used to define the
product to the customer. One of the major challenges facing South African
business and marketing executives in the new millennium is to create world-
class brands that will put South African brands on the national and international
map.
JEL M31
INTRODUCTION
Brands exist in the mind. They help us reduce the anxiety of the unknown
by providing the assurance of an old friend.
Dr Edward de Bono, 2001.
In today’s volatile and competitive markets brands are under constant pressure.
Mergers, acquisitions and major changes in the business environment demand
the continuous management of the organisation’s brands. All brands,
“…whether product, service or corporate require constant evaluation and
conscious rejuvenation” (McCoy, 2001: 1). For many customers and consumers,
the brand “is the product”. Therefore, branding is a key strategic tool used to
create awareness, reputation and build the organisation’s image. Marketers
consider brands as carriers of values, and according to McCoy (2001), can even
be a more efficient way than segmentation to find your target market. In order to
build customer trust and loyalty, a brand must be easy to identify and consistent
in quality. The development and implementation of branding strategies and

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programmes have lately expanded to include more than the traditional corporate,
product and service domains of branding. Retail branding, for example, aims to
fully engage the customer and reach beyond merely staging an experience (Levy
& Weitz, 2001). The rapid growth in the leisure industry is placing great
demands on leisure branding (McCoy, 2001), while the emergence of e-
commerce has demonstrated the importance of digital branding (Duncan, 2002;
McCoy, 2001).
There is general agreement in the marketing literature that a brand is more than
the name given to a product; it embodies a whole set of physical and socio-
psychological attributes and beliefs (Simões & Didd, 2001: 217). In consumer
marketing, brands often provide the primary means of differentiation between
competitive offerings. As such, brands can be critical to the success of
companies (Wood, 2000: 662). It is estimated that half of the market value of the
Fortune 250 companies are tied up in intangible assets such as brand equity
(Court, Leiter & Loch, 1999: 101). Aaker (1991: 7-8) suggests that strong
brands provide higher profit margins and better access to distribution channels,
as well as a broad platform for product line extensions. It is clear that brands
directly influence the sustainability of a business and its growth. Brands are also
directly responsible for generating shareholder value.
In this article we set out to define and briefly discuss the nature of branding and
indicate how brands are used to define the product to the customer. We discuss
the role that brands play in companies, and touch on the process of brand
management so as to give practical insight into this important yet illusive
management tool. Special emphasis will be placed on the development of brands
and branding from a South African perspective. To illustrate the value and
“power” of branding to a company, and serve as an introduction and background
to the topic, a case study of a well-known global brand, namely Heineken beer,
is presented first.
CASE STUDY: HEINEKEN BEER
The traditional global beer market has hardly grown over the last decade. This
has prompted brewers to expand into non-traditional beer drinking markets, such
as those in traditional wine drinking countries (Vrontis, 1998: 76). The
traditional beer drinking nations of northern Europe (countries such as UK,
Germany, Belgium and Ireland) have, for example, recently experienced
stagnating or falling beer sales due to consumers switching to low alcoholic
beers, wine and soft drinks.

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Brewers essentially regard beer as a homogeneous product, and thus rely largely
on differentiation to create consumer preferences. In an industry where product
differentiation - especially differentiation relating to image and segmentation - is
of paramount importance, the creation and maintenance of a strong portfolio of
brands is critical in terms of achieving a sustained competitive advantage
(Vrontis, 1998: 77).
Heineken, one of the three most recognised beer brands in the world, is available
in more than 170 countries (AC Nielsen, 2001: 4). The company was founded in
1864, when a 22-year old businessman, Gerard Adriaan Heineken, bought the
Haystack brewery in Amsterdam. Since then, Heineken has grown with leaps
and bounds to the point where it currently is the third largest brewer in the world
with a production volume of 97.9 million hectolitres, and profits in the region of
EUR 621 million (http://www.heinekencorp.com/).
The globalisation drive by Heineken can be traced back to the vision of Alfred
Heineken who, in 1942, saw the potential of a beer that can travel around the
world. As grandson of G.A. Heineken, he went to America to learn how the
Americans market their beer. Currently only 21 per cent of the company’s sales
occur within The Netherlands. The Encyclopaedia of Consumer Brands (1994)
states that in the early 1990s Heineken achieveda 9 per cent market share in
Western Europe, increasing its status to that of the largest European beer
brewery. The Heineken brand is sold in 170 different countries and brewed in 19
of them. While the company possesses more than 70 different brands, its
principal strategy is to market four corporate brands on a worldwide scale.
These brands are: Heineken, Amstel, Buckler (alcohol-free) and Murphy’s Irish
Stout. Only the first two (Heineken and Amstel) are marketed in South Africa.
These global brands are supported by the remaining brands in the product line,
which tend to be national or regional in identity. The decision was however
taken to brand Heineken international under the same brand logo to project a
single standard quality image internationally (http://www.heinekencorp.com/).
A closer examination of Heineken’s marketing strategy (4 Ps) clearly shows
how the brand is integrated into the product and vice versa. In Table 1
Heineken’s European marketing strategy is compared to their South African
strategy.

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Table 1 Heineken’s marketing strategy: A comparison between Europe
and South Africa
Strategy Europe and UK South Africa
Product
Price
Place
Promotion
Brand name: Heineken and
Heineken Export
Premium
90 Breweries outside Europe
Sponsorships and traditional
promotional tactics
Heineken and Amstel
Premium
Distributed through SA
Breweries
Sponsorships and
traditional promotional
tactics
The power of the Heineken branding is quite evident from the entry of Heineken
into the Hong Kong beer market. Carlsberg and San Miguel traditionally
dominated the Hong Kong beer market. Today they account for only 45 per cent
of the market, while Heineken accounts for 20 per cent. This growth was
accomplished by using a key Asian value, namely popularity. The company
asked staff of restaurants and bars to leave Heineken bottles on the tables. Very
soon, little green bottles where being drunk by white-collar workers everywhere
(Robinson 1996: 57). Using the quality associated with generic Heineken in
traditional markets and the visual connotation of the green branded bottle,
Heineken successfully entered a closed market at a relative low cost.
GLOBAL BRANDS
AC Nielsen, the global marketing research firm, recently published a report on
the world’s leading global brands entitled “Reaching the Billion Dollar Mark: A
Review of Today’s Global Brands”. The report identifies those brands that have
sales over a billion dollars as well as a geographic presence in all of the major
regions of the world. A brand had to meet three main criteria to be included in
the AC Nielsen study:
• The cumulative sales for the year ending March 2001 had to be US $1
Billion or more.
• The brand had to have a measurable presence in each of the following four
geographic regions, namely Latin America, Asia Pacific, North America
and Europe, as well as the Middle East & Africa.
• Sales outside of the home market had to represent at least 5 per cent of the
global sales value.

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The findings presented in the report are based on data from thirty countries.
Although one may question whether this is truly a global study, these 30 key
markets account for 90 per cent of the world’s gross domestic product (GDP)
and are spread across all of the core geographic regions. Over two hundred
brands were researched for this study. Of the 200 plus brands investigated, only
43 brands actually met the criteria of having a global presence in each region
and having over a billion dollars in sales. These 43 brands represent 23 global
manufacturers and a total of more than $125 billion in sales (see Table 2).
A glance through this list of “Global Leading Brands” inadvertently leads one to
ask the following questions: “What makes these brands so unique?” and “Why
are these brands so successful?” These are undoubtedly difficult questions to
answer. Tilley (1999: 182) argues that the world’s leading brands are “… those
which consistently deliver their promise to their customers and are able to create
lasting value for them”. She has identified some distinguishing characteristics of
so-called “leadership brands”:
• They influence the behaviours, thoughts and feelings of a significant
number of people, or of a market. Rather than following rules and
markets, leadership brands create them.
• They effectively communicate a meaning which is more than just the
function of the product or the market they serve. The most effective
meanings are based on a deeply felt human need. This enables leading
brands to enter new markets or develop new products which address this
need.
• Leadership brands embody their meaning in all they do. They exemplify it
and this embodiment is visible at all times.
• They are consistent and eloquent in every aspect of their communication
so that people always understand what the brand stands for.
• They are dynamic, constantly changing and developing to meet new needs
so that they remain relevant, even when their original product is obsolete.
• Leadership brands have social responsibilities and inspirational roles.
They hold certain beliefs, values, attitudes and behaviours which earn the
respect of consumers and other stakeholders.

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Table 2 A review of today’s global brands
Brand
(# of countries included 30
maximum)
Segment
Sales
Ye Q1 2001
(In constant US $)
Total Coca-Cola (30)
Coca-Cola (Regular)**
Diet Coke/Coca-Cola Light**
Marlboro (25)
Marlboro (Regular)**
Marlboro Lights**
Carbonated beverages
Tobacco
Over
$15 billion
Total Pepsi (30)
Pepsi (Regular)**
Diet Pepsi/ Pepsi Light**
Carbonated beverages $5 - 15 billion
Budweiser (25)
Campbell's (21)
Kelloggs (27)
Pampers (27)
Beer
Soup
Cereal
Diapers
$3 - 5 billion
Benson & Hedges (21)
Camel (24)
Danone (25)
Fanta (29)
Friskies (24)
Gillette (29)
Huggies (25)
Nescafe (29)
Sprite (30)
Tide (11)
Tropicana (17)
Wrigley's (27)
Tobacco
Tobacco
Yoghurt
Carbonated beverages
Pet Food
Blades & razors
Diapers
Coffee
Carbonated beverages
Laundry detergent
Still beverages
Chewing gum
$2 - 3 billion
Colgate (29)
Duracell (28)
Heineken (26)
Kodak (13)
L&M (18)
Lay's (22)
Pedigree (25)
Toothpaste
Batteries
Beer
Consumer films
Tobacco
Chips & snacks
Pet food
$1.5 - 2 billion

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Table 2 continued
Brand
(# of countries included
30 maximum)
Segment
Sales
Ye Q1 2001
(In constant US $)
Always (22)
Doritos (20)
Energizer (28)
Gatorade (22)
Guinness (23)
Kinder (28)
Kleenex (26)
L'Oreal (27)
Maxwell House (19)
Minute Maid (16)
Nivea (29)
Pantene (30)
Philadelphia (25)
Pringles (30)
Seven-Up/ 7-Up (30)
Tylenol (9)
Whiskas (24)
Sanitary protection
Chips & snacks
Batteries
Sports beverages
Beer
Chocolate
Facial tissue
Colorants
Coffee
Still beverages
Moisturizers & cleansers
Shampoo & conditioners
Cheese
Chips & snacks
Carbonated beverages
OTC Pain remedies
Pet food
$1 - 1.5 billion
* Brands are in alphabetical order within each sales range
** Sub brands that independently meet the Global Billion Dollar mark
Source: AC Nielsen, 2001.
The six characteristics discussed above suggest that a brand is more than just a
label, name, or package. But what exactly is a brand? We will attempt to answer
this question in the next section.
THE NATURE OF A BRAND
Different authors define the term “brand” differently. Wood (2000: 664)
explains that the different approaches to defining the brand construct partly stem
from differing philosophies (such as product-plus and holistic branding) and
stakeholder perspectives (i.e. a brand may be defined from the consumers'
perspective and/or from the brand owner's perspective). In addition, brands are
sometimes defined in terms of their purpose, and sometimes described by their
characteristics.

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De Chernatony & Riley (1997: 89) point out that much of the literature on
brands is based on the 1960 American Marketing Association (AMA) definition
of a brand:
A name, term, sign, symbol or design, or combination of them, intended to
identify the goods or services or one seller or group of sellers and to
differentiate them from those of competitors.
This definition has been criticised by writers on the subject as being too
mechanical, too concerned with the physical product, too input orientated, with
little reference to the manufacturer’s strategic thinking or visions for the brand,
and failing to recognize that the brand acquires connotations in consumers’
minds through their experiences with it (De Chernatony & Riley 1997: 90).
De Chernatony & Riley (1997: 90) has identified nine themes regarding the
nature of a brand from a review of relevant literature in this regard. These nine
themes include conceptualisations of a brand as:
• A legal instrument – Since branding represents an investment by a firm,
firms seek legal ownership of a title to obtain some protection against
imitators. At is simplest, a brand can, therefore, be regarded as a legal
“statement of ownership”.
• A logo – The conceptualisation of a brand as a logo is in line with the
traditional AMA definition cited earlier. This definition stresses the
importance of the brand’s visual features as the basis for differentiation.
• A company – Many service organizations use corporate branding where
the company’s name is used to identify the entire product offering
(Cravens 1997: 308). Such a perspective stresses a coherent focus for all
the company’s offerings, with a consistent message to all its stakeholders
(De Chernatony & Riley 1997: 91).
• An identity system – This perspective stresses the need for developing a
holistic, integrated desired positioning for the brand. In this regard, de
Chernatony (1999) distinguishes between the image, reputation and
identity of the brand.
Brand identity is a firm-centred concept that can be defined as a unique set
of brand associations that the brand strategist aspires to create or maintain
(Louro & Cunha, 2001: 860). From the firm’s perspective, the brand
identity is an expression of how the firm wants the brand to be perceived
by its customers.
Brand image, on the other hand, is a customer-centred concept which can
be defined as a holistic impression held by customers about the relative
position of a brand among its perceived competitors (de Chernatony, 1999:
165). De Chernatony (1999: 159) argues that brand image concerns the
latest perceptions and that it changes continually.

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He believes that managers should rather focus on brand reputation that is
more stable and represent the distillation of multiple images over time. The
latter construct is defined as: “A collective representation of a brand’s past
actions and results that describes the brand’s ability to deliver valued
outcomes to multiple stakeholders” (Harris & De Chernatony, 2001: 445).
• An image in consumers’ minds – As suggested above, one can look at a
brand from the firm or customer’s point of view. Brand image is defined
as “consumer perceptions of a brand as reflected by the brand associations
held in consumers’ memory” (Louro & Cunha, 2001: 863). De
Chernatony & Riley (1997: 91) explain that there is growing support for
the brand image conceptualisation. Adopting an image definition forces
management to face the challenge of dealing with perceptual filters which
change consumers’ cognitions of the brand (De Chernatony & Riley,
1997: 91).
De Chernatony & Riley (1997: 93) summarise four complementary views
of brands that consumers might hold:
- At its simplest, a brand may simply be a means of identifying an
offering. Research indicates that consumers often do not remember the
names of products they buy regularly, but rely on packaging to
identify what they are looking for.
- A brand can also be a guarantee of consistent quality and thus act as a
risk reduction mechanism.
- Brands can also act as a shorthand device encapsulating all the mental
connections people have around them. This enables rapid information
recall and facilitates product choice.
- At the most abstract level, brands enable consumers to project aspects
of their self-concepts. Several studies have shown that, in the case of
products that are consumed conspicuously, consumers often choose
brands they perceive to be congruent with their self-concept.
• A personality – De Chernatony & Riley (1997: 92) point out that brands
are often presented as symbolic devices with personalities that users value
beyond their functional utility. According to Aaker (1997: 347), brands
often serve a symbolic or self-expressive function because consumers
imbue brands with human personality traits. She defines brand personality
as “the set of human characteristics associated with a brand” and has
developed a scale to measure brand personality along five dimensions,
namely sincerity, excitement, competence, sophistication, and ruggedness.
• A relationship – De Chernatony (1999: 169) argue that once the brand’s
personality has been defined, a relationship develops between the brand
and the consumer defined by the values inherent in the brand’s
personality.
• Adding value – Simões & Dibb (2001: 220) explain that customers
generally buy brands rather than products. Competition among brands,

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therefore, no longer occurs at the core-product level but according to the
added functional capabilities and symbolic features that the brand
represents (De Chernatony & Riley 1998: 1081). These functional or
emotional values represented by the brand enable firms to achieve a
competitive advantage.
• An evolving entity – According to Goodyear (quoted in De Chernatony &
Riley 1997: 92) brand evolve through different stages: From unbranded
commodities, to brands as references where the name is used for
identification, to a situation where brands develop a personality by
offering emotional appeals in addition to functional benefits. The
implication of this view is that different definitions should not be
considered as conflicting, but rather as expressions of the evolutionary
development of brands.
BRAND STRATEGY: A TYPOLOGY OF BRAND TYPES AND BRAND
STRATEGIES
Several authors have developed classification schemes to categorise different
brand types as well as different brand strategies used by firms (see Laforet &
Saunders, 1994 & 1999 as well as Cravens, 1997: 307-312). Brand types relate
to a classification of the type of brand name used for a specific individual
product, while brand strategy refers to a firm’s broader approach to the branding
of its product range(s), or as Laforet & Saunders (1999: 51) explain, to: “… the
ways firms mix and match their corporate, house, and individual brand names on
their products”.
Laforet & Saunders (1994: 64-76) have identified a hierarchy of six brand types
based on a content analysis of 400 leading brands in the UK grocery sector.
These six brand types include:
• Corporate brand names – This brand type involves the use of the
company name as a brand name and is often used by service firms.
Companies such as Shell, Avis, Kellogg and Heinz have made their
company names synonymous with a product class. Sometimes the
corporate brand appears as the only brand identity, as in the case of Heinz
tomato sauce, or along with another brand name such as Nestlé’s Classic
Double.
• House brand names – Diversified companies sometimes use the names
of divisions or Strategic Business Units (SBUs) to promote products in
different markets or market segments. Volkswagen, for example, has the
Volkswagen and Audi brands.
• Family brand names – According to Laforet & Saunders (1994: 67),
family brand names are names used to cover a family of related products.

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Family brand names differ from house names in that there is no
relationship between the brand name and the company’s organizational
structure (e.g. the brand does not relate to a specific SBU or subsidiary).
Family brands often result from a situation where a strong mono brand
name is used to launch new related brands.
• Mono brand names – A mono brand name refers to the use of a single
unique brand for each individual product. According to Laforet &
Saunders (1994: 67), mono brands are the dominant form used by many
leading marketers. However, the number of mono brands is diminishing as
firms engage in brand extensions. Many firms are also moving away from
mono brands to a mixed brand type consisting of a corporate and product
specific brand name (e.g. Nestlé Kit Kat) or a family and product specific
brand name (e.g. Crosse & Blackwell Branston Pickles).
• Virtual brand names – Occasionally, virtual brand names appear as
suffixes used to identify variants of a brand or as a qualifier to a brand
name. Nestlé’s pet foods division, for example, markets Friskies Gourmet
and Friskies Gourmet A La Carte. These are two distinct products
differentiated by the addition of the virtual brand name “A La Carte”
(Laforet & Saunders 1994: 67).
• Brand variant descriptions – Laforet & Saunders (1994: 67) explain that
a variant of a brand is often described with a descriptor (e.g. Cross &
Blackwell Mayonnaise Light)
The content analysis conducted by Laforet & Saunders (1994: 67-69) also
suggests a classification of brands strategies into a mix of four elements,
namely: corporate dominant, house dominant, mixed brands, and brand
dominant.
The true corporate dominant brand structures are quite rare in the fast moving
consumer goods (FMCG) sector. Corporate brands do, however, occur quite
frequently in the service sector (Simões & Didd, 2001: 219). In the FMCG
sector, corporate brands are normally used when a company operates in a tightly
defined homogeneous market. Laforet & Saunders (1994: 68) explain that
acquisitions have caused composite corporate dominant firms to emerge such as
Cadbury Schweppes and Colgate-Palmolive where parts of the corporate name
are associated with different product classes, for example, Cadbury with
chocolate and Schweppes with cold drinks.
According to Laforet & Saunders (1994: 68 & 73), house-dominant brand
structures are more common in the FMCG sector than corporate ones. This
happens because most major marketers of fast moving consumer goods are
highly diversified and consist of a large number of different SBUs. House
brands are also appropriate when a firm diversifies outside the names suiting

SAJEMS NS Vol 6 (2003) No 1170
their corporate name, or when acquired businesses have their own useful
established reputations (Laforet & Saunders, 1999: 65).
Many FCMG marketers use mixed brand structures. Mixed brands gain
symbiotically from the reputation of the corporate name and the individuality of
a unique brand name (Laforet & Saunders, 1999: 65). However, if taken too far,
this symbiosis can degenerate into parasitism and a loss of brand identity.
The final brand structure mentioned by Laforet & Saunders (1994: 68-69) is a
brand dominant brand structure. By using a brand dominant strategy,
companies can differentiate their products and position themselves for diverse
target markets. Brand-dominant strategies also suit decentralised businesses with
a wide brand portfolio (Laforet & Saunders, 1999: 64).
Firms using a brand dominant structure either use a different mono brand for
each of their products (In this case, the company name and corporate logo is not
prominently displayed, but usually do appear somewhere on the packaging) or
use furtive brands (where the name of the manufacturer does not appear on the
packaging at all). Pet food manufacturers often use the latter approach to reduce
the link between food for pets and food for humans.
Cravens (1997: 308) mentions two additional brand strategies that are not
covered by Laforet and Saunders (1994). These include having no brand identity
and private label branding. According to Cravens (1997: 308), small- and
medium-sized manufacturers often do not have an established brand identity (no
brand identity) and lack the financial and marketing capabilities to build buyer
awareness in the marketplace. Firms in this situation often rely on wholesalers
and retailers to encourage buyers to purchase their brand. Private-label
offerings carrying the brand of a well-known retailer has recently become very
popular. Dunne and Narasimhan (1999: 41) point out that one fifth of all grocery
sales in the United States are now sold under retailer’s names. Private labels
account for a quarter of all grocery sales in Canada, and in Europe the
proportion is even higher. These authors argue that, contrary to conventional
wisdom, major brand manufacturers can gain by supplying private label
products, especially premium private label products, to retailers (see Dunne &
Narasimhan, 1999: 41-52 for a comprehensive discussion of this issue).
Laforet & Saunders (1994) as well as Cravens (1997: 309) point out that
companies often use more than one of the strategies mentioned above for
different product lines or product categories. In addition, firms competing in the
same market often use vastly different brand strategies (Laforet & Saunders,
1999: 51). In the UK confectionary market, each of the major competitors,