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|276 PART 3 Designing a Customer Value-Driven Strategy and Mix
Brands are powerful assets that $70 billion. Other brands rating among the world’s most valuable include AT&T, China
must be carefully developed and Mobile, GE, Walmart, and Amazon.com.30
managed. As this figure suggests,
building strong brands involves High brand equity provides a company with many competitive advantages. A power-
many challenging decisions. ful brand enjoys a high level of consumer brand awareness and loyalty. Because consumers
expect stores to carry the particular brand, the company has more leverage in bargaining
with resellers. Because a brand name carries high credibility, the company can more easily
launch line and brand extensions. A powerful brand also offers the company some defense
against fierce price competition.
Above all, however, a powerful brand forms the basis for building strong and profitable
customer relationships. The fundamental asset underlying brand equity is customer equity—
the value of customer relationships that the brand creates. A powerful brand is important, but
what it really represents is a profitable set of loyal customers. The proper focus of marketing
is building customer equity, with brand management serving as a major marketing tool. Com-
panies need to think of themselves not as portfolios of brands but as portfolios of customers.
Building Strong Brands
Branding poses challenging decisions to the marketer. Figure 8.5 shows that the major
brand strategy decisions involve brand positioning, brand name selection, brand sponsorship,
and brand development.
Brand Positioning
Marketers need to position their brands clearly in target customers’ minds. They can
position brands at any of three levels.31 At the lowest level, they can position the brand
on product attributes. For example, P&G invented the disposable diaper category with its
Pampers brand. Early Pampers marketing focused on attributes such as fluid absorption,
fit, and disposability. In general, however, attributes are the least desirable level for brand
positioning. Competitors can easily copy attributes. More important, customers are not
interested in attributes as such—they are interested in what the attributes will do for them.
A brand can be better positioned by associating its name with a desirable benefit. Thus,
Pampers can go beyond technical product attributes and talk about the resulting contain-
ment and skin-health benefits from dryness. Some successful brands positioned on benefits
are FedEx (guaranteed on-time delivery), Nike (performance), Walmart (save money), and
Facebook (connections and sharing).
The strongest brands go beyond attribute or benefit positioning. They are positioned
on strong beliefs and values, engaging customers on a deep, emotional level. For example, to
parents, Pampers mean much more than just containment and dryness. The Pampers Web
site (www.pampers.com) positions Pampers as a “love, sleep, and play” brand that’s con-
cerned about happy babies, parent–child relationships, and total baby care. Says a former
P&G executive, “Our baby care business didn’t start growing aggressively until we changed
Pampers from being about dryness to helping mom with her baby’s development.”32
Successful brands engage customers on a deep, emotional level. Advertising agency
Saatchi & Saatchi suggests that brands should strive to become lovemarks, products or ser-
vices that “inspire loyalty beyond reason.” Brands ranging from Apple, Disney, Nike, and
Coca-Cola to Google and Pinterest have achieved this status with many of their custom-
ers. Lovemark brands pack an emotional wallop. Customers don’t just like these brands,
they have strong emotional connections with them and love them unconditionally.33 Brands
don’t have to be big or legendary to be classified as lovemarks. Consider Shake Shack,
which began 10 years ago as a lowly hot dog cart in Manhattan and grew into a small
burger chain with a big, almost cult-like following. The occasionally epic lines at local Shake
Shacks testify to its status as a lovemark brand.
When positioning a brand, the marketer should establish a mission for the brand and a vi-
sion of what the brand must be and do. A brand is the company’s promise to deliver a specific
Brand positioning Brand name selection Brand sponsorship Brand development
Attributes Selection Manufacturer’s brand Line extensions
Benefits Protection Brand extensions
Private brand Multibrands
Beliefs and values Licensing New brands
Co-branding
FIGURE | 8.5 Major Brand Strategy Decisions
