CHAPTER
TWO
REVIEW
OF RELATED LITERATURE
2.1 INTRODUCTION
Today the primary
capital of many businesses is their brands. For decades the value of a company
was measured in terms of its real estate, then tangible assets, plants and
equipments. However it has recently been recognized that company’s real value
lies outside business itself - in the
minds of potential buyers or consumers.
“A brand is both, tangible and intangible, practical
and symbolic, visible and invisible under conditions that are economically
viable for the company” (Kapferer, 1986).
Brands are built up by persistent difference ever
the long run. They cannot be reduced just to a symbol on a product or a mere
graphic and cosmetic exercise. A brand is the signature on a constantly
renewed, creative process which yields various products. Products are
introduced, they live and disappear, but brands endure. The consistency of this
creative action is what gives a brand its meaning, its content, and its
characters’: creating a brand requires time and identity.
The American Marketing Association defines the term
‘Brand’ as “A name, term, symbol or design, or a combination of them, which is
intended to signify the goods or services of one seller or group of sellers and
to differentiate them from those of competitors.”
2.2. CONCEPTUAL REVIEW
Significant parameters
in brand building literature have experienced a dramatic shift in the last
decade. Branding and the role of brands, as traditionally understood, have been
subject to constant review and redefinition. A traditional definition of a typical
brand was: “the name, associated with one or more items in the product line,
which is used to identify the source of character of the item(s)” (Kotler,
2000). The American Marketing Association’s (AMA) definition of a brand is “a
name, term, sign, symbol, or design, or a combination of them, intended to
identify the goods and services of one seller or group of sellers and to
differentiate them from those of competitors”. Within this view, whenever an
organization creates a new name, logo, or symbol for a new product, it has
created a brand, (Keller, 2003). He recognizes, however, that brands today are
much more than that. As can be seen, according to these definitions brands had
a simple and clear function as identifiers.
Within the traditional
branding model, the goal was to build a brand image, (Aaker and Joachimsthaler,
2000); a tactical element that drives short-term results. It is mentioned that
the brand is a sign–therefore external-whose function is to disclose the hidden
qualities of a product which are inaccessible to contact
(Kapferer, 1997). The brand served to identify a product and to distinguish it
from competition.
In the journey from
product-centric brands to customer-centric brands, many consumer companies have
locked in on a transitional concept – segment-specific brands. While brand Nike
focuses on physically active consumers, brand Disney focuses on parents with
small children. This is a significant step in the right direction and it
reflects growing awareness of the power of customers.
A brand differentiates
a product in several forms and it can be broadly divided into two categories-
The tangibles (rational), and the intangibles (emotional and symbolic). Either
way, while the product performs its basic functions, the brand contributes to
the differentiation of a product (Keller, 2003). These dimensions “distinguish
a brand from its unbranded commodity counterpart and gives it equity which is
the sum total of consumers’ perceptions and feelings about the product’s attributes
and how they perform, about the brand name and what it stands for, and about
the company associated with the brand” (Achenaum, 1993). A strong branding
provides consumers multiple access points towards the brand by attracting them
through both functional and emotional attributes (Keller, 2003). The tangible
dimensions that a brand creates are product innovations, high qualities, and/or
attractive prices etc. The intangible values of a brand will include those that
cannot be quantified. These intangibles go beyond the product level to become a
synaptic process in the brain. The attributes of a branded product add value
for consumers, the intermediaries, and the manufacturers.
Consumers will be able
to develop associations and assumptions through brand name, package, label etc.
A strong brand also offers a high brand
credibility: it becomes a signal of the product quality and performance. This
reduces the risks involved in the purchase including the
functional, physical, financial, social, psychological, and time risks (Swait
and Erdem, 2004 ; Keller, 2003). Consumers do not only benefit from the
functional values of a brand, they also benefit from the emotional aspects. A
strong brand mixes and blends the product performance and imagery to create a
rich, deep, and complementary set of consumer responses towards the brand
(Zamardino and Goodfellow, 2007).
2.3 EMPIRICAL REVIEW
Branding represents one
of the most fascinating phenomena of the business environment in the 21st
century (Olins 2000). Their importance is irrefutable. Branding in their
various guises is integral to our everyday existence (Sherry, 1995).
Corporations have only begun to realize the financial clout of an effective
brand in the last 10 years.
All efforts are now
being made to ensure that decisions inside of a corporation are created
synergistically and represent a clear message to customers
and prospects.
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