CH-9 Creating Brand Equity – Marketing Management : Exam Guide

Chapter 9 1. The first step in the strategic brand management process is ________. A) measuring consumer brand loyalty B) identifying and establishing brand positioning C) planning and implementing brand marketing D) measuring and interpreting brand performance E) growing and sustaining brand value Answer: B Rationale: Identifying and establishing brand positioning is indeed the initial step in strategic brand management. Before executing marketing plans or measuring brand loyalty or performance, it's crucial to define how the brand wants to be perceived in the minds of consumers. 2. The American Marketing Association defines a ________ as "a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors." A) copyright B) trademark C) slogan D) brand E) logo Answer: D Rationale: The definition provided aligns with the concept of a brand, which encompasses various elements like name, symbol, or design aimed at distinguishing products or services from competitors. 3. Branding is ________. A) all about creating unanimity between products B) the process of performing market research and selling products or services to customers C) endowing products and services with the power of a brand D) the process of comparing competing brands available in the market E) use of online interactive media to promote products and brands Answer: C Rationale: Branding involves imbuing products or services with the power of a brand, thereby differentiating them and creating value beyond their tangible features. 4. Brand ________ is the added value endowed to products and services. A) loyalty B) equity C) preference D) identity E) licensing Answer: B Rationale: Brand equity represents the added value that a brand brings to products or services, encompassing factors like brand awareness, perception, and loyalty. 5. ________ is the differential effect that brand knowledge has on consumer response to the marketing of that brand. A) Mission-driven brand equity B) Customer-based brand equity C) Product-driven brand equity D) Service-driven brand equity E) Function-based brand equity Answer: B Rationale: Customer-based brand equity refers to the differential impact that brand knowledge has on consumer response to marketing efforts. It emphasizes the significance of consumer perceptions and associations with the brand. 6. Adam wants to buy a washing machine and is looking for something that is not too expensive. When he goes to make the purchase, he finds there are two options that meet his requirements. One is an IFB Bosch product, while the other is a newly imported South Korean brand. Adam is not very familiar with the latter and does not hesitate in choosing Bosch. This example implies that ________. A) the imported brand will not survive the competition from Bosch B) Bosch has a positive customer brand equity C) the South Korean company has a low advertising budget D) the imported brand is unreliable E) the Bosch washing machine has better features than the imported brand Answer: B Rationale: Adam's choice of Bosch over the unfamiliar South Korean brand suggests that Bosch has a positive customer brand equity, meaning it has built trust and preference among consumers. 7. When a consumer expresses thoughts, feelings, images, experiences, and beliefs associated with the brand, the consumer is expressing ________. A) brand knowledge B) ethnocentric bias C) self-serving bias D) cognitive dissonance E) brand identity Answer: A Rationale: Brand knowledge encompasses the various thoughts, feelings, and associations that consumers have with a brand, reflecting their understanding and perceptions of it. 8. The challenge for marketers in building a strong brand is ________. A) ensuring that customers have the right type of experiences with their products and marketing programs to create the desired brand knowledge B) pricing the product at a point that maximizes sales volume C) minimizing the number of people to whom the product is targeted in order to provide consumers with a personalized experience D) minimizing the impact of customer brand equity E) avoiding the usage of an established brand to introduce a new product in the market Answer: A Rationale: Building a strong brand requires ensuring that customers have positive experiences consistent with the desired brand image, which fosters the development of strong brand knowledge and associations. 9. Which of the following is a marketing advantage of strong brands? A) no vulnerability to marketing crises B) more elastic consumer response to price increases C) guaranteed profits D) additional brand extension opportunities E) more inelastic consumer response to price decreases Answer: D Rationale: Strong brands offer additional brand extension opportunities, allowing companies to leverage their brand equity and expand into new product categories with a higher likelihood of success. 10. When a marketer expresses his or her vision of what the brand must be and do for consumers, they are expressing what is called ________. A) a brand promise B) a brand personality C) a brand identity D) a brand position E) a brand revitalization Answer: A Rationale: A brand promise articulates the marketer's vision of what the brand stands for and the benefits it offers to consumers, setting expectations and guiding brand-related activities. 11. Identify the four pillars of brand equity, according to the brand asset valuator model. A) relevance, performance, bonding, and advantage B) presence, performance, advantage, and bonding C) energized differentiation, relevance, esteem, and knowledge D) brand salience, brand feelings, brand imagery, and brand performance E) energized differentiation, esteem, brand feelings, and brand salience Answer: C Rationale: The brand asset valuator model identifies four pillars of brand equity: energized differentiation, relevance, esteem, and knowledge. These pillars collectively contribute to a brand's strength and value. 12. Christian Louboutin is a footwear designer who launched his line of high-end women's shoes in France in 1991. Since 1992, his designs have incorporated the shiny, red-lacquered soles that have become his signature. These red-lacquered soles and high stilettos of Louboutin distinguish him from other designer shoe brands. In accordance with the brand asset valuator model, which of the following components of brand equity has Louboutin fulfilled in the given scenario? A) energized differentiation B) relevance C) esteem D) knowledge E) advantage Answer: A Rationale: Christian Louboutin's distinctive red-lacquered soles set his brand apart from competitors, fulfilling the component of energized differentiation in the brand asset valuator model. 13. Christian Louboutin is a footwear designer who launched his line of high-end women's shoes in France in 1991. The brand caters to an elite clientele whose satisfaction with the brand has always been evident. Apart from being high-end, Louboutin footwear signifies power in elite social circles. Celebrities are often seen sporting "Loubs" at special occasions, such as movie premieres. This has resulted in people associating Louboutin footwear with class and power. In accordance with the brand asset valuator model, which of the following components of brand equity has Louboutin fulfilled in the given scenario? A) knowledge B) energized differentiation C) esteem D) advantage E) presence Answer: C Rationale: Louboutin's association with elite clientele and celebrities contributes to its esteem component in the brand asset valuator model, as it signifies the brand's high regard and status among consumers. 14. According to the brand asset valuator model, which of the components of brand equity measures how aware and familiar consumers are with the brand? A) esteem B) energized differentiation C) relevance D) knowledge E) presence Answer: D Rationale: Knowledge measures consumers' awareness and familiarity with the brand, encompassing aspects like brand recognition and recall. 15. According to the brand asset valuator model, which of the components of brand equity measures the breadth of a brand's appeal? A) differentiation B) relevance C) esteem D) knowledge E) value Answer: B Rationale: Relevance measures the breadth of a brand's appeal by assessing its appropriateness and importance to consumers within its target market. 16. According to brand asset valuator model, energized differentiation and relevance, the two pillars of brand equity combine to determine what is called brand ________. A) position B) image C) depth D) knowledge E) strength Answer: E Rationale: Brand strength is determined by the combination of energized differentiation and relevance, reflecting the brand's overall power and influence in the market. 17. According to brand asset valuator model, esteem and knowledge, the two pillars of brand equity together create ________, a "report card" on past performance and a current indicator of current value. A) brand stature B) brand parity C) brand strength D) brand personality E) brand architecture Answer: A Rationale: Brand stature, created by the combination of esteem and knowledge, serves as a report card on the brand's past performance and current value, reflecting its standing in the marketplace. 18. According to the brand asset valuator model, strong new brands show ________. A) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are lower still B) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are lower still C) high knowledge—evidence of past performance—a lower level of esteem, and even lower relevance, energy, and differentiation D) high levels on energy, differentiation, relevance, knowledge, and esteem E) low levels on energy, differentiation, relevance, knowledge, and esteem Answer: B Rationale: Strong new brands typically exhibit higher levels of differentiation and energy compared to relevance, esteem, and knowledge as they work to establish themselves in the market. 19. According to the brand asset valuator model, leadership brands show ________. A) high levels of energy, differentiation, relevance, knowledge, and esteem B) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are lower still C) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are lower still D) low levels on energy, differentiation, relevance, knowledge, and esteem E) high knowledge—evidence of past performance—a lower level of esteem, and even lower relevance, energy, and differentiation Answer: A Rationale: Leadership brands exhibit high levels of energy, differentiation, relevance, knowledge, and esteem, reflecting their strong position and influence in the market. 20. According to the brand asset valuator model, declining brands show ________. A) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are lower still B) high relevance—appropriateness of brand's appeal—a lower level of energy and differentiation, and even lower knowledge C) high levels on energy, differentiation, relevance, knowledge, and esteem D) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are lower still E) high knowledge—evidence of past performance—a lower level of esteem, and even lower relevance, energy, and differentiation Answer: E Rationale: Declining brands typically show high levels of knowledge (evidence of past performance) but lower levels of esteem, relevance, energy, differentiation, reflecting their decreasing relevance and influence in the market. 21. According to Young and Rubicam's brand asset valuator, a brand's ________ measures how well the brand is regarded and respected. A) differentiation B) energy C) relevance D) esteem E) knowledge Answer: D Rationale: In Young and Rubicam's brand asset valuator, esteem measures how well the brand is regarded and respected by consumers, reflecting its perceived value and reputation. 22. Aromas Inc., introduced a new line of shower gels. To analyze consumer reaction, the company interviewed people who bought them. When Sarah was asked why she had chosen the new shower gel, she said she bought it because a friend recommended it. Sarah is at which level of the brand dynamics pyramid? A) presence B) bonding C) relevance D) performance E) advantage Answer: A Rationale: Sarah's decision based on a friend's recommendation reflects the presence level of the brand dynamics pyramid, indicating her awareness of the brand but not yet forming a strong bond or evaluating its performance. 23. If a consumer, trying to decide between alternatives, believes that a particular brand delivers acceptable product performance and can be short listed, she is in the ________ level of the brand dynamics pyramid. A) presence B) relevance C) performance D) advantage E) bonding Answer: C Rationale: At the performance level of the brand dynamics pyramid, consumers evaluate the brand's product performance and consider it as a viable option among alternatives. 24. Which of the following levels of the brand dynamics pyramid pertains to consumer's needs? A) advantage B) relevance C) bonding D) performance E) presence Answer: B Rationale: The relevance level of the brand dynamics pyramid pertains to consumer needs, indicating the brand's significance and suitability in addressing consumer requirements. 25. A consumer who expresses rational and emotional attachments to the brand to the exclusion of most other brands has reached the ________ level in the brand dynamics pyramid. A) advantage B) relevance C) presence D) performance E) bonding Answer: E Rationale: The bonding level of the brand dynamics pyramid involves consumers forming strong emotional and rational attachments to the brand, leading to loyalty and exclusivity. 26. According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address the question "Do I know about this brand?" A) relevance B) presence C) performance D) advantage E) bonding Answer: B Rationale: In the BRANDZ model, the presence step addresses the question of brand awareness, focusing on whether consumers are aware of the brand's existence. 27. According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address or answer the question "Does this brand offer something better than the others?" A) performance B) presence C) advantage D) bonding E) relevance Answer: C Rationale: The advantage step in the BRANDZ model addresses whether the brand offers something better than its competitors, focusing on its unique selling points and competitive advantages. 28. According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address or answer the question "Can this brand deliver?" A) performance B) bonding C) advantage D) relevance E) presence Answer: A Rationale: The performance step in the BRANDZ model addresses the brand's ability to deliver on its promises and meet consumer expectations in terms of quality and performance. 29. According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address or answer the question "Does this brand offer me something?" A) advantage B) presence C) relevance D) bonding E) performance Answer: C Rationale: The relevance step in the BRANDZ model addresses whether the brand offers something meaningful and relevant to consumers, focusing on its ability to fulfill consumer needs and desires. 30. According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps convey the message " Nothing else beats this brand"? A) bonding B) relevance C) advantage D) performance E) presence Answer: A Rationale: The bonding step in the BRANDZ model conveys the message that nothing else beats the brand, indicating strong emotional and rational attachments leading to loyalty and exclusivity. 31. Brand salience ________. A) is customers' emotional responses and reactions with respect to the brand B) is how often and how easily customers think of the brand under various purchase or consumption situations C) is how well the product or service meets customers' functional needs D) describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers' psychological or social needs E) describes the relationship customers have with the brand and the extent to which they feel they're "in sync" with it Answer: B Rationale: Brand salience refers to how often and how easily customers think of the brand under various purchase or consumption situations, indicating the brand's top-of-mind awareness and prominence. 32. With respect to the "six brand building blocks," ________ signifies how well the product or service meets customers' functional needs. A) brand judgment B) brand imagery C) brand salience D) brand performance E) brand resonance Answer: D Rationale: Brand performance in the context of the six brand building blocks refers to how well the product or service meets customers' functional needs, focusing on its tangible attributes and benefits. 33. With respect to the "six brand building blocks," ________ describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers' psychological or social needs. A) brand imagery B) brand judgment C) brand resonance D) brand salience E) brand performance Answer: A Rationale: Brand imagery focuses on the extrinsic properties of the product or service, including how the brand attempts to meet customers' psychological or social needs, shaping perceptions and associations. 34. With respect to the "six brand building blocks," ________ focuses on customers' own personal opinions and evaluations. A) brand salience B) brand performance C) brand imagery D) brand judgment E) brand resonance Answer: D Rationale: Brand judgment pertains to customers' own personal opinions and evaluations of the brand, including their perceptions of its quality, credibility, and reliability. 35. With respect to the brand building pyramid, at which of the following "building block levels" would we expect the consumer to develop an intense, active loyalty? A) salience B) imagery C) feelings D) judgments E) resonance Answer: E Rationale: The resonance level of the brand building pyramid corresponds to the branding objective of developing deep, broad brand loyalty, where consumers develop intense, active loyalty towards the brand. 36. With respect to the brand building pyramid, at which of the following "building block levels" would we expect the consumer to develop positive and accessible reactions? A) resonance B) salience C) imagery D) performance E) feelings Answer: E Rationale: The feelings level of the brand building pyramid corresponds to the branding objective of creating positive and accessible reactions, where consumers develop favorable emotional responses towards the brand. 37. With respect to the "six brand building blocks," ________ describes the relationship customers have with the brand and the extent to which they feel they're "in sync" with it. A) brand imagery B) brand judgment C) brand resonance D) brand salience E) brand performance Answer: C Rationale: Brand resonance describes the relationship customers have with the brand and the extent to which they feel they're "in sync" with it, indicating a strong emotional connection and loyalty. 38. With respect to the "six brand building blocks," ________ are customers' emotional responses and reactions with respect to the brand. A) brand imagery statements B) brand judgments C) brand performances D) brand feelings E) brand resonances Answer: D Rationale: Brand feelings represent customers' emotional responses and reactions towards the brand, reflecting their emotional connection and affinity with it. 39. Which of the following "building block levels" corresponds to the branding objectives of points-of-parity and difference? A) performance and imagery B) judgment and feelings C) resonance and salience D) imagery and judgment E) salience and feelings Answer: A Rationale: The performance and imagery levels of the brand building blocks correspond to the branding objectives of establishing points-of-parity and points-of-difference, respectively, focusing on both functional and emotional associations. 40. With respect to the brand building pyramid, the branding objective of developing deep, broad brand awareness corresponds to which of the following "building block levels"? A) resonance B) imagery C) performance D) salience E) judgment Answer: D Rationale: The salience level of the brand building pyramid corresponds to the branding objective of developing deep, broad brand awareness, where the brand is easily recalled and recognized by consumers. 41. From a marketing management perspective, there are three main sets of brand equity drivers. Which of these drivers was most applicable when McDonald's decided to use the "golden arches" and Ronald McDonald as symbols of their brand? A) the product and all accompanying marketing activities and supporting marketing programs B) the service and all accompanying marketing activities and programs C) the initial choices for the brand elements or identities making up the brand D) associations indirectly transferred to the brand by linking it to some other entity E) the profitability associated with brand development Answer: C Rationale: The initial choices for the brand elements or identities making up the brand, such as the "golden arches" and Ronald McDonald, were crucial in defining McDonald's brand identity and establishing its brand equity. 42. Red Bull enlisted college students as "Red Bull student brand managers" to distribute samples, research drinking trends, design on-campus product promotion activities, and write stories for student newspapers. From a marketing management perspective, which of the following brand equity drivers is most applicable in the given scenario? A) the profitability associated with brand development B) associations indirectly transferred to the brand by linking it to a person C) the product and all accompanying marketing activities and supporting marketing programs D) the initial choices for the brand elements or identities making up the brand E) associations indirectly transferred to the brand by linking it to a place Answer: C Rationale: In this scenario, the focus is on the product and all accompanying marketing activities and programs, including the utilization of student brand managers to promote the brand, which enhances brand equity. 43. The brand name of New Zealand vodka 42BELOW refers to both a latitude that runs through New Zealand and the percentage of its alcohol content. From a marketing management perspective, which of the brand equity drivers is most applicable in the given scenario? A) the associations indirectly transferred to the brand by linking it to a place or thing B) the product and all accompanying marketing activities and supporting marketing programs C) the initial choices for the brand elements or identities making up the brand D) the profitability associated with brand development E) the service and all accompanying marketing activities and programs Answer: A Rationale: The brand name of 42BELOW creates associations indirectly transferred to the brand by linking it to a place (New Zealand) and a numerical indicator of its alcohol content, thereby enhancing brand equity. 44. ________ are devices that can be trademarked and serve to identify and differentiate the brand. A) Brand elements B) Brand value propositions C) Brand perceptions D) Brand images E) Brand extensions Answer: A Rationale: Brand elements, such as logos, slogans, and brand names, are identifiable and differentiating components of a brand that can be trademarked to distinguish it from competitors. 45. If a brand element can be used to introduce new products in the same or different categories, the brand element is said to be ________. A) memorable B) meaningful C) likeable D) transferable E) adaptable Answer: D Rationale: A brand element that can be used to introduce new products in the same or different categories is said to be transferable, indicating its versatility and applicability across different contexts. 46. If consumers can easily recall and recognize a brand element, the brand element is said to be ________. A) meaningful B) protectable C) adaptable D) transferable E) memorable Answer: E Rationale: A brand element that consumers can easily recall and recognize is considered memorable, contributing to the brand's visibility and top-of-mind awareness. 47. Which of the following is a defensive criterion for choosing brand elements? A) adaptable B) memorable C) meaningful D) likeable E) significance Answer: A Rationale: Adaptability is a defensive criterion for choosing brand elements, indicating the brand's ability to endure changes in the market and remain relevant over time. 48. With respect to powerful brand elements, ________ is an extremely efficient means to build brand equity. This element functions as a useful "hook" or "handle" to help consumers grasp what the brand is and what makes it special. A) the tangibility of a product B) a product's shape C) a slogan D) a patent E) a copyright Answer: C Rationale: A slogan, as a powerful brand element, serves as an efficient means to build brand equity by encapsulating the brand's essence and making it memorable and distinctive to consumers. 49. A ________ can be defined as any information-bearing experience a customer or prospect has with the brand, the product category, or the market that relates to the marketer's product or service. A) brand value B) brand personality C) brand trait D) brand character E) brand contact Answer: E Rationale: Brand contact refers to any information-bearing experience a customer or prospect has with the brand, encompassing interactions with the brand, its products, and the market environment. 50. The traditional "marketing-mix" concept and the notion of the "four Ps" may not adequately describe modern marketing programs. ________ is about mixing and matching marketing activities to maximize their individual and collective effects. A) Personalized marketing B) Mass customization C) Globalized marketing D) Relationship marketing E) Integrated marketing Answer: E Rationale: Integrated marketing involves mixing and matching marketing activities to maximize their individual and collective effects, ensuring consistency and synergy across various channels and touchpoints. 51. Brand equity can be built by ________, which create(s) equity by linking the brand to other information in memory that conveys meaning to customers. A) internal marketing B) brand transferability C) secondary associations D) customer alignment E) brand auditing Answer: C Rationale: Secondary associations are external entities or other brands that are linked with the focal brand, creating brand equity by connecting the brand to additional meaning in customers' minds. 52. Mark feels that Shell delivers on its promises to supply the best gasoline possible to the public. His experiences with Shell have always been good resulting in positive brand contact. Mark is most likely experiencing ________. A) brand alliance B) brand essence C) brand harmonization D) brand parity E) brand bonding Answer: E Rationale: Mark's positive experiences with Shell and his belief that the brand delivers on its promises lead to a strong emotional connection, indicating brand bonding. 53. ________ consists of activities and processes that help inform and inspire employees about brands. A) Internal branding B) Personal branding C) Individual branding D) External branding E) Co-branding Answer: A Rationale: Internal branding involves activities and processes aimed at informing and inspiring employees about brands, ensuring alignment with brand values and objectives. 54. AT&T's business campaign not only helped to change public perceptions of the company, it also signaled to employees that AT&T was determined to be a leader in telecommunication services. Which principle of internal branding does this example portray? A) choosing the right moment to capture employees' attention and imagination B) furnishing energizing and informative internal communication C) bringing the brand alive for employees D) linking internal and external marketing E) understanding how brand communities work Answer: D Rationale: This example demonstrates the principle of linking internal and external marketing by using a business campaign to change public perceptions while also signaling to employees about the company's determination to lead in its industry. 55. A ________ is a specialized group of consumers and employees whose identification and activities focus around the brand. A) brand community B) brand channel C) brand association D) brand personality E) brand cluster Answer: A Rationale: A brand community is a specialized group of consumers and employees whose identification and activities revolve around the brand, fostering engagement and loyalty. 56. Which of the following value creation processes means sharing the brand "good news" and inspiring others to use the brand? A) staking B) badging C) evangelizing D) justifying E) milestoning Answer: C Rationale: Evangelizing involves sharing the brand's "good news" and inspiring others to use the brand, promoting its positive attributes and benefits. 57. Which of the following value creation processes means detailing the brand relationship journey in a narrative way, often anchored by and peppered with milestones? A) documenting B) milestoning C) badging D) evangelizing E) staking Answer: B Rationale: Milestoning involves detailing the brand relationship journey in a narrative manner, often highlighting key milestones that contribute to the brand's story and evolution. 58. Which of the following value creation processes means translating milestones into symbols and artifacts? A) staking B) evangelizing C) milestoning D) badging E) documenting Answer: D Rationale: Badging involves translating milestones into symbols and artifacts, such as awards or certifications, that serve as tangible representations of the brand's achievements and progress. 59. A structured approach to assessing the sources and outcomes of brand equity and the manner in which marketing activities create the financial worth of the brand is called ________. A) the brand value chain B) the brand portfolio C) the brand life cycle D) brand partitioning E) brand positioning Answer: A Rationale: The brand value chain is a structured approach to assessing the sources and outcomes of brand equity, as well as how marketing activities contribute to the financial worth of the brand. 60. Competitive superiority and channel support are factors that influence the ________ of the brand value chain. A) program multiplier B) customer multiplier C) brand multiplier D) profit multiplier E) market multiplier Answer: B Rationale: The customer multiplier in the brand value chain is influenced by factors such as competitive superiority and channel support, which impact the brand's ability to create value for customers. 61. Clarity, relevance, distinctiveness, and consistency are factors that influence the ________ of the brand value chain. A) program multiplier B) brand multiplier C) market multiplier D) customer multiplier E) profit multiplier Answer: B Rationale: Clarity, relevance, distinctiveness, and consistency contribute to enhancing the brand's value, which influences the brand multiplier in the brand value chain. 62. ________ are a means of understanding where, how much, and in what ways brand value is being created to facilitate day-to-day decision making. A) Internal marketing campaigns B) Brand portfolio audits C) Brand value chains D) Sales cycles E) Brand-tracking studies Answer: E Rationale: Brand-tracking studies provide insights into where, how much, and in what ways brand value is being created, helping in day-to-day decision making regarding brand management. 63. ________ is the job of estimating the total financial worth of the brand. A) Brand tracking B) Brand auditing C) Brand equity D) Brand valuation E) Brand harmonization Answer: D Rationale: Brand valuation involves estimating the total financial worth of the brand, assessing its monetary value based on various factors such as market performance and brand strength. 64. Apple's iPod Shuffle is an example of ________. A) a sub-brand B) a parent brand C) family brand D) a brand mix E) an umbrella brand Answer: A Rationale: The iPod Shuffle is a sub-brand of Apple's iPod line, as it represents a specific product variation within the broader iPod product range. 65. When a firm uses an established brand to introduce a new product, it is called a ________. A) brand harmonization B) brand valuation C) brand extension D) brand positioning E) brand parity Answer: C Rationale: When a company introduces a new product using an established brand name, it is termed a brand extension strategy. 66. A parent brand that is associated with multiple products through brand extensions is also called a(n)________. A) category brand B) subbrand C) extension brand D) family brand E) line brand Answer: D Rationale: A family brand is a parent brand associated with multiple products through brand extensions, offering various products under the same brand umbrella. 67. The introduction of Diet Coke by the Coca Cola Company is an example of ________. A) line extension B) brand harmonization C) category extension D) brand dilution E) co-branding Answer: A Rationale: Introducing Diet Coke, a new variation of the original Coca Cola product, falls under the category of line extension. 68. A ________ consists of all products original as well as line and category extensions sold under a particular brand. A) brand line B) cobrand C) generic brand D) licensed product E) subbrand Answer: A Rationale: A brand line comprises all products, including original offerings and subsequent line and category extensions, sold under a specific brand name. 69. A major advantage of a ________ strategy is that the company does not tie its reputation to the product. A) blanket family name B) licensing C) separate family brand name D) category extension E) brand revitalization Answer: C Rationale: With a separate family brand name strategy, the company does not tie its reputation directly to the product, which offers flexibility and risk mitigation in case of product-related issues. 70. Starbucks introduced ice creams in the same flavors as the Frappuccinos it sold in its coffee shops. This is an example of ________. A) brand dilution B) co-branding C) brand variants D) category extension E) brand harmonization Answer: D Rationale: Introducing ice creams with flavors similar to the Frappuccinos sold in Starbucks coffee shops represents a category extension strategy, expanding the brand into a new product category while leveraging its existing brand equity. 79. Consumers may evaluate identical products differently depending on how they are branded. Answer: True Rationale: Branding plays a significant role in shaping consumer perceptions and preferences. Different branding strategies, such as branding based on quality, luxury, or affordability, can influence how consumers perceive and value identical products. This phenomenon is often referred to as brand perception or brand equity. 80. Physical goods, services, and stores can be branded, but ideas and people cannot. Answer: False Rationale: Ideas and people can indeed be branded. For example, personal branding involves creating a distinct image and reputation for individuals, while branding ideas involves creating memorable concepts or messages associated with particular ideologies, movements, or campaigns. 81. One of the advantages of having a strong brand is the ability to have a more elastic consumer response to price decreases of the brand. Answer: True Rationale: A strong brand typically commands higher brand loyalty and perceived value among consumers. As a result, consumers may be more willing to accept price increases without significantly decreasing their demand. Conversely, when prices decrease, loyal customers may perceive the brand as offering greater value, leading to increased sales. 82. Brand equity arises from unanimity in consumer response. Answer: False Rationale: Brand equity refers to the value and strength of a brand, which can vary among different consumers and markets. It arises from various factors such as brand awareness, perceived quality, brand associations, and brand loyalty. It does not necessarily require unanimity in consumer response but rather favorable perceptions and attitudes towards the brand. 83. The quantity, rather than quality, of a marketer's investment in brand building is the critical factor in building brand equity. Answer: False Rationale: While investment in brand building is important, the quality of these investments, such as the effectiveness of marketing strategies, the consistency of brand messaging, and the creation of positive brand experiences, is crucial in building strong brand equity. Merely increasing investment without considering these factors may not necessarily lead to a significant increase in brand equity. 84. According to brand asset valuator (BAV) model, knowledge is one of the key components of brand equity. Answer: True Rationale: The Brand Asset Valuator (BAV) model identifies four key components of brand equity: differentiation, relevance, esteem, and knowledge. Knowledge refers to consumers' awareness and understanding of the brand, which is essential for building and sustaining brand equity. 85. According to the BRANDZ model, "Bonded" consumers at the lower levels of the pyramid build stronger relationships with and spend more on the brand than those at the top. Answer: False Rationale: In the BRANDZ model, "Bonded" consumers are positioned at the top of the pyramid, representing the most loyal and emotionally connected customers. These consumers are more likely to spend more on the brand and advocate for it, demonstrating a deeper level of engagement compared to those at lower levels of the pyramid. 86. Under the BRANDZ model of brand strength, customers who are bonded to the brand believe "nothing else beats it." Answer: True Rationale: According to the BRANDZ model, "Bonded" consumers are characterized by their strong emotional attachment to the brand. They believe that nothing else can surpass the brand they are bonded to, indicating a high level of brand loyalty and preference. 87. Brand salience describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers' psychological or social needs. Answer: False Rationale: Brand salience refers to the degree to which a brand is noticed or comes to mind in various buying situations. It is more related to the brand's visibility and recall rather than its intrinsic or extrinsic properties. 88. Brand imagery is a consumer's emotional response and reaction with respect to the brand. Answer: False Rationale: Brand imagery refers to the set of associations and symbols that consumers connect with a brand. It includes visual, sensory, and experiential elements that shape consumers' perceptions and interpretations of the brand. While emotions can be a part of brand imagery, it encompasses a broader range of cognitive and affective responses. 89. One of the selection criteria for creating a successful brand element is that it should be protectable. Answer: True Rationale: Protectability is an important consideration when creating brand elements such as names, logos, and symbols. Ensuring that these elements can be legally protected through trademarks helps prevent competitors from using similar elements, thereby safeguarding the brand's identity and reputation. 90. If a brand element has the characteristic of being memorable, the brand is credible and suggestive of the type of person who might use the brand. Answer: False Rationale: While memorability is important for a brand element, it does not necessarily guarantee credibility or suggestiveness about the type of person who might use the brand. Credibility and brand persona associations are influenced by various factors beyond memorability, such as brand messaging, quality, and alignment with consumer values. 91. Brands are built only by advertising. Answer: False Rationale: While advertising is a significant component of brand building, brands are built through a combination of various activities, including product quality, customer service, brand experiences, word-of-mouth marketing, public relations, and more. Advertising alone cannot establish a strong brand if other aspects of the brand experience are lacking. 92. To achieve integrated marketing, marketers need a variety of different marketing activities that consistently reinforce the brand promise. Answer: True Rationale: Integrated marketing involves coordinating various marketing activities to deliver a consistent brand message and experience across different channels and touchpoints. This consistency helps reinforce the brand promise and enhances brand perception among consumers. 93. Brand equity can be built by linking the brand to sources, such as channels of distribution as well as to other brands. Answer: True Rationale: Brand equity can be enhanced by strategic associations with distribution channels, other brands, or even endorsers. These associations can influence consumers' perceptions of the brand's quality, reliability, and overall value, thereby contributing to the development of brand equity. 94. The brand promise will not be delivered unless everyone in the company lives the brand. Answer: True Rationale: The brand promise represents the commitments made by a brand to its customers regarding the value, benefits, and experience they can expect. For the brand promise to be fulfilled consistently, it requires alignment and commitment from everyone within the organization, from frontline employees to top management, who must embody the brand's values and principles in their actions and decisions. 95. Modifying a brand to suit group-level or individual needs is called staking. Answer: False Rationale: Modifying a brand to suit group-level or individual needs is typically referred to as customization or adaptation. Staking is not a term commonly associated with brand modification. 96. A brand community can be a constant source of inspiration and feedback for product improvements or innovations. Answer: True Rationale: Brand communities consist of loyal customers who share a common interest or affinity for a brand. These communities can provide valuable feedback, ideas, and insights that can inform product development, innovation, and marketing strategies, making them a valuable resource for brands seeking to improve and evolve. 97. The indirect approach to assessing brand equity assesses the actual impact of brand knowledge on consumer response to different aspects of marketing. Answer: False Rationale: The indirect approach to assessing brand equity involves examining consumer responses to various marketing activities and then inferring the influence of brand knowledge based on these responses. It does not directly measure the impact of brand knowledge on consumer response but rather indirectly assesses it through observed consumer behavior. 98. Spending on product research, development, and design constitutes investment in the brand value development process. Answer: True Rationale: Investing in product research, development, and design is crucial for creating products that meet customer needs and deliver value. These activities contribute to the overall brand experience and perception, thereby enhancing brand value and equity over time. 99. The brand audit can be used to set strategic direction for the brand. Answer: True Rationale: A brand audit involves a comprehensive examination of a brand's current position, strengths, weaknesses, opportunities, and threats. This analysis helps in understanding the brand's performance and can inform strategic decisions regarding positioning, messaging, target audience, and overall brand direction. 100. Brand equity is essentially the same as brand valuation. Answer: False Rationale: Brand equity refers to the intangible value and strength of a brand, encompassing factors such as brand awareness, perception, loyalty, and associations. Brand valuation, on the other hand, is the process of assigning a monetary value to a brand, often for financial reporting or transaction purposes. While brand equity influences brand valuation, they are not synonymous. 101. When change is necessary, marketers should vigorously preserve and defend sources of brand equity. Answer: True Rationale: Brand equity represents the accumulated value of a brand, built over time through various investments and efforts. When changes are necessary, marketers should strive to protect and reinforce the sources of brand equity, such as brand awareness, perceived quality, and brand associations, to maintain and enhance the brand's value and competitive advantage. 102. An important part of reinforcing brands is providing uniform and unchanging marketing support. Answer: False Rationale: While consistency in brand messaging and positioning is important, providing uniform and unchanging marketing support may not always be effective. Brands need to adapt to changing market conditions, consumer preferences, and competitive landscapes. Flexibility and responsiveness to evolving trends and customer needs are essential for reinforcing brands effectively. 103. When a parent brand covers a new product within a product category it currently serves, it is called a line extension. Answer: True Rationale: A line extension occurs when a brand introduces a new product within the same product category that it currently serves. This strategy leverages the existing brand equity of the parent brand to enter new segments or offer variations of the core product. 104. A firm's branding strategy is also called the brand architecture. Answer: True Rationale: Brand architecture refers to the structure and relationship between different brands within a portfolio. A firm's branding strategy determines how brands are positioned, differentiated, and managed within this structure, including decisions about brand hierarchy, extensions, and endorsements. 105. When Honda expanded its brand into such areas as automobiles, snowblowers, and marine engines, it was pursuing a strategy called line extension. Answer: False Rationale: When a brand expands into unrelated product categories, it is referred to as a brand extension, not a line extension. Line extension involves introducing new products within the same category that the brand currently serves. 106. Increasing shelf presence and retailer dependence in the store is one of the reasons for introducing multiple brands in a category. Answer: True Rationale: Introducing multiple brands in a category can help increase shelf presence and retailer dependence by offering a broader range of options to consumers. This strategy can also enable a company to target different market segments, mitigate risk, and compete more effectively against rival brands. 107. Flankers are brands that may be kept around despite dwindling sales because they manage to maintain their profitability with virtually no marketing support. Answer: False Rationale: Flankers are brands strategically positioned to target specific market segments or fill gaps in a brand portfolio. They are typically supported with marketing efforts to maintain their relevance and profitability, especially if they serve as a defensive strategy against competitors. 108. The role of a relatively high-priced brand in the portfolio is often to attract customers to the brand franchise or to "build traffic". Answer: False Rationale: The role of a relatively high-priced brand in the portfolio is often to signal prestige, quality, and exclusivity. These brands typically cater to premium or luxury segments of the market and may not necessarily focus on attracting customers to the brand franchise or building traffic. 109. Brand extensions can reduce the costs of introductory launch campaigns and make it easier to convince retailers to stock and promote a new product. Answer: True Rationale: Brand extensions leverage the existing brand equity of a parent brand to introduce new products into related or unrelated categories. This can reduce the costs associated with launching a new brand from scratch and may make it easier to gain retailer acceptance, as the parent brand's reputation and customer base can provide credibility and support for the new product. 110. Brand differentiation occurs when consumers no longer associate a brand with a specific product or highly similar products and start thinking less of the brand. Answer: False Rationale: Brand differentiation refers to the process of making a brand distinct from its competitors by highlighting unique features, attributes, or benefits that set it apart in the minds of consumers. It is aimed at enhancing the brand's perceived value and competitiveness, rather than diminishing it. 111. Intrabrand shifts in a company's sales are always undesirable. Answer: False Rationale: Intrabrand shifts refer to changes in sales volume or market share within a particular brand's product line or portfolio. While some intrabrand shifts may indicate underlying issues such as cannibalization or declining demand for certain products, they are not always undesirable. In some cases, intrabrand shifts may reflect successful product launches, strategic repositioning, or changes in consumer preferences that benefit the brand overall. 112. Marketers must judge each potential brand extension by how effectively it leverages existing brand equity from the parent brand, as well as how effectively, in turn, it contributes to the parent brand's equity. Answer: True Rationale: Brand extensions should be evaluated based on their ability to leverage the equity of the parent brand to enhance the new product's success while also considering how the extension impacts the parent brand's image and equity. A successful brand extension reinforces the parent brand's core values and strengths while expanding its relevance and appeal to new markets or segments. 113. Research indicates that high-quality brands stretch farther than average-quality brands, although both types of brands have boundaries. Answer: True Rationale: High-quality brands often have greater latitude for successful brand extensions because they have built strong brand equity and consumer trust. However, even high-quality brands have limits to how far they can stretch before diluting their brand equity or risking consumer backlash. Average-quality brands may have more constrained extension opportunities due to weaker brand equity and lower perceived value. 114. A brand that is seen as prototypical of a product category is easy to extend outside the category. Answer: False Rationale: While a brand that is seen as prototypical within its product category may have strong associations with that category, extending it outside the category can be challenging. Consumers may have difficulty accepting the brand in unfamiliar product contexts, and the brand's equity may not transfer effectively to unrelated categories. 115. A successful extension cannot only contribute to the parent brand image but also enable a brand to be extended even farther. Answer: True Rationale: A successful brand extension not only enhances the parent brand's image by demonstrating its relevance and innovation but also opens up opportunities for further extensions into related or even unrelated categories. By building consumer trust and acceptance with each successful extension, the parent brand can expand its reach and diversify its product offerings. 116. The most effective advertising strategy for an extension emphasizes the parent brand. Answer: False Rationale: The most effective advertising strategy for a brand extension depends on various factors, including the relationship between the parent brand and the extension, the target audience, and the competitive landscape. While some extensions may benefit from leveraging the parent brand's equity and associations, others may require a more independent or differentiated marketing approach to establish their own identity and value proposition. 117. Customer lifetime value is affected by revenue and by the costs of customer acquisition, retention, and cross-selling. Answer: True Rationale: Customer lifetime value (CLV) represents the total value a customer generates for a business over their entire relationship. It is influenced by revenue generated from the customer's purchases as well as the costs associated with acquiring, retaining, and cross-selling to the customer. Maximizing CLV involves increasing revenue while minimizing acquisition and retention costs and maximizing cross-selling opportunities. 118. Both brand equity and customer equity emphasize the importance of customer loyalty and the notion that we create value by having as many customers as possible pay as high a price as possible. Answer: True Rationale: Both brand equity and customer equity highlight the significance of building strong relationships with customers and maximizing their value to the business. Brand equity focuses on the intangible value derived from consumer perceptions and associations with the brand, while customer equity emphasizes the financial value of loyal customers over their lifetime. Both concepts underscore the importance of customer loyalty and the ability to command premium prices for products or services. 119. What valuable functions can brands perform for a firm? Answer: Brands perform a number of valuable functions for firms. First, they simplify product handling or tracing. Brands help to organize inventory and accounting records. A brand also offers the firm legal protection for unique features or aspects of the product. The brand name can be protected through registered trademarks; manufacturing processes can be protected through patents; and packaging can be protected through copyrights and proprietary designs. These intellectual property rights ensure that the firm can safely invest in the brand and reap the benefits of a valuable asset. A credible brand signals a certain level of quality so that satisfied buyers can easily choose the product again. Brand loyalty provides predictability and security of demand for the firm, and it creates barriers to entry that make it difficult for other firms to enter the market. Loyalty also can translate into customer willingness to pay a higher price. 120. Describe the three ingredients of customer-based brand equity. Answer: The three key ingredients of customer-based brand equity are as follows: 1. Brand equity arises from differences in consumer response. If no differences occur, the brand-name product is essentially a commodity, and competition will probably be based on price. 2. Differences in response are a result of consumers' brand knowledge, all the thoughts, feelings, images, experiences, and beliefs associated with the brand. Brands must create strong, favorable, and unique brand associations with customers, as have Toyota (reliability), Hallmark (caring), and Amazon.com (convenience. 3. Brand equity is reflected in perceptions, preferences, and behavior related to all aspects of the marketing of a brand. Stronger brands lead to greater revenue. 121. Advertising agency Young and Rubicam (Y&R) developed a model of brand equity called Brand Asset Valuator (BAV. What is the intent of the BAV model? List and briefly characterize the four key components (pillars) of brand equity. Answer: The BAV model is based on research of almost 800,000 consumers in 51 countries. BAV provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. There are four key components—or pillars—of brand equity. These pillars are: (1) energized differentiation—measures the degree to which a brand is seen as different from others, and its perceived momentum and leadership; (2) relevance—measures the appropriateness and breadth of a brand's appeal; (3) esteem—measures perceptions of quality and loyalty, or how well the brand is regarded and respected; and (4) knowledge—measures how aware and familiar consumers are with the brand. 122. The creation of significant brand equity involves reaching the top or pinnacle of the brand pyramid. What are the six components of the brand resonance pyramid? Answer: The six components of the brand resonance pyramid include: (1) brand salience—relates to how often and easily the brand is evoked under various purchase or consumption situations; (2) brand performance—relates to how the product or service meets customers' functional needs; (3) brand imagery—deals with the extrinsic properties of the product or service, including the ways in which the brand attempts to meet the customers' psychological or social needs; (4) brand judgments—focus on consumers' own personal opinions and evaluations; (5) brand feelings—customers' emotional responses and reactions with respect to the brand; and (6) brand resonance—refers to the nature of the relationship that customers have with the brand and the extent to which customers feel that they are "in sync" with the brand. 123. Identify and describe the four value stages of the brand value chain. Answer: The brand value creation process begins when the firm invests in a marketing program targeting actual or potential customers. Next, customers' mindsets are assumed to change as a result of the marketing program. This change affects the way the brand performs in the marketplace through the collective impact of individual customers deciding how much to purchase and when, how much they'll pay, and so on. Finally, the investment community considers market performance and other factors such as replacement cost and purchase price in acquisitions to arrive at an assessment of shareholder value in general and the value of a brand in particular. 124. Describe the function of brand tracking studies. Answer: To understand how the sources and outcomes of brand equity change, if at all, over time, marketers conduct brand tracking studies. These studies collect quantitative data from consumers over time to provide consistent, baseline information about how brands and marketing programs are performing. Tracking studies help us understand where, how much, and in what ways brand value is being created, to facilitate day-to-day decision making. 125. Describe the meaning and function of a brand audit. Answer: To better understand the sources of brand equity and how they affect outcomes of interest, marketers often need to conduct brand audits. A brand audit is a consumer-focused exercise that involves a series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity. The brand audit can be used to set strategic direction for the brand. As the result of this strategic analysis, the marketer can develop a marketing program to maximize long-term brand equity. Marketers should conduct a brand audit whenever they consider important shifts in strategic direction. 126. As a branding manager, you have recommended to your board of directors a corporate policy of umbrella branding. What are the advantages that your company might gain from this? Answer: Many firms, such as Heinz and GE, use their corporate brand as an umbrella brand across their entire range of products. A corporate umbrella brand name has a number of advantages. Development cost is less because there is no need for "name" research or heavy advertising expenditures to create brand-name recognition. Furthermore, sales of the new product are likely to be strong if the manufacturer's name is good. Corporate-image associations of innovativeness, expertise, and trustworthiness have been shown to directly influence consumer evaluations. Finally, a corporate branding strategy can lead to greater intangible value for the firm. 127. There are a number of specific roles brands can play as part of a brand portfolio. List and briefly describe the four roles. Answer: The four roles are: (1) flankers—or fighting brands. These are positioned with respect to competitors' brands so that more important (and more profitable) flagship brands can retain their desired positioning; (2) cash cows—some brands may be kept around despite dwindling sales because they still manage to hold on to a sufficient number of customers and maintain their profitability with virtually no marketing support. These "cash cow" brands can be effectively "milked" by capitalizing on their reservoir of existing brand equity; (3) low-end entry-level—the role of the relatively low-priced brand in the portfolio often may be to attract customers to the brand franchise. Retailers like to feature these "traffic builders" because they are able to "trade up" customers to a higher-priced brand; and (4) high-end prestige—the role of a high-priced brand in the brand family often is to add prestige and credibility to the entire portfolio. 128. In what ways can brand extensions improve the odds of new-product success? Answer: Consumers make inferences and form expectations about the composition and performance of a new product based on what they already know about the parent brand and the extent to which they feel this information is relevant to the new product. By setting up positive expectations, extensions reduce risk and may make it easier to convince retailers to stock and promote a brand extension because of increased customer demand. From a marketing communications perspective, an introductory campaign for an extension doesn't need to create awareness of both the brand and the new product, but instead can concentrate on the new product itself. 129. Assume you are a marketing manager and want to adopt strategic brand management. List the four main steps that you would most likely go through to accomplish this task. Answer: The steps would be: (1) identifying and establishing brand positioning; (2) planning and implementing brand marketing; (3) measuring and interpreting brand performance; and (4) growing and sustaining brand value. 130. How does the American Marketing Association (AMA) define the term brand? Answer: A brand, according to the AMA, is "a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors." 131. Define brand equity. Answer: Brand equity is the added value endowed to products and services. This value may be reflected in how consumers think, feel, and act with respect to the brand, as well as the prices, market share, and profitability that the brand commands for the firm. 132. What is positive customer-based brand equity? Answer: A brand is said to have positive customer-based brand equity when consumers react more favorably to a product and the way it is marketed when the brand is identified, than when it is not identified. 133. Explain the concept of brand knowledge. Answer: Brand knowledge consists of all the thoughts, feelings, images, experiences, beliefs, and so on that become associated with the brand. In particular, brands must create strong, favorable, unique brand associations with customers. 134. How does consumer knowledge play a role in the success of new products associated with existing brands? Answer: Brand knowledge created by marketing investments dictates appropriate future directions for the brand. Consumers will decide, based on what they think and feel about the brand, where they believe the brand should go and grant permission to any marketing action or program. Many new products can fail because consumers find them inappropriate extensions for the brand. 135. Brand equity has four components—energized differentiation, relevance, esteem, and knowledge. How are these components combined to produce brand strength and brand stature? Answer: Energized differentiation and relevance combine to produce brand strength. Esteem and knowledge together create brand stature. 136. According to the BRANDZ model of brand strength, brand building involves a series of five sequential steps. What are those five sequential steps? Answer: The steps are in ascending order: (1) presence, (2) relevance, (3) performance, (4) advantage, and (5) bonding. 137. List the six criteria used in creating brand elements. Answer: The six criteria are: (1) memorable, (2) meaningful, (3) likable, (4) transferable, (5) adaptable, and (6. protectable. 138. As a brand manager you would like to have your brand (brand name) be protectable. Explain what you mean by "protectable" and give an illustration. Answer: As a brand manager you would need to consider the questions like, "How legally protectable is the brand element?" "How competitively protectable is the brand element?" and "Can it be easily copied?" It is important that names that become synonymous with product categories—such as Kleenex, Kitty Litter, Jell-O, Scotch Tape, Xerox, and Fiberglass—retain their trademark rights and not become generic. 139. Identify the three important principles for internal branding. Answer: Three important principles for internal branding are: (1) choosing the right moment; (2) linking internal and external marketing; and (3) bringing the brand alive for employees. 140. Given that the power of a brand resides in the minds of consumers and how it changes their response to marketing, there are two basic approaches to measuring brand equity. Briefly, describe each of these approaches. Answer: The two approaches are: (1) an indirect approach that assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures; and (2) a direct approach that assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing. 141. Distinguish between brand equity and brand valuation. Answer: Brand equity is the added value endowed to products and services. Brand valuation is the job of estimating the total financial value of the brand. 142. How can marketers reinforce brand equity? Answer: Marketers can reinforce brand equity by consistently conveying the brand's meaning in terms of 1. what products it represents, what core benefits it supplies, and what needs it satisfies; and 2. how the brand makes products superior, and which strong, favorable, and unique brand associations should exist in consumers' minds. 143. The decision as to how to brand new products is especially critical. When a firm introduces a new product, it has three main choices. What are those choices? Answer: The firm can: (1) develop new brand elements for the new product, (2) apply some of its existing brand elements, or (3) use a combination of new and existing brand elements. 144. Nichepro Technologies, who were mainly into producing personal computers and laptops, have now decided to produce Nichepro health care products. Explain the branding strategy advocated by the company. Answer: Nichepro Technologies are advocating brand extension strategy. Brand extensions fall into two categories: 1. line extension and 2. category extension. Marketers use the parent brand to enter a different product category, in category extension. Nichepro is adopting the same strategy by using their parent brand to enter the healthcare products category. 145. Define brand variants. Answer: Brand variants are specific brand lines supplied to specific retailers or distribution channels. They result from the pressure retailers put on manufacturers to provide distinctive offerings. 146. Kellogg's uses its corporate brand name with its individual product brands as with Kellogg's rice krispies, Kellogg's raisin bran, and Kellogg's corn flakes. Which branding strategy is being used by the company? Answer: Kellogg's employs a sub-brand or hybrid branding strategy by combining the corporate brand with individual product brands as with Kellogg's rice krispies, Kellogg's raisin bran, and Kellogg's corn flakes. 147. What is a licensed product? Why have corporations seized on licensing? Answer: A licensed product is one whose brand name has been licensed to other manufacturers that actually make the product. Corporations have seized on licensing to push their company names and images across a wide range of products-from bedding to shoes-making licensing a multibillion dollar business. 148. Tide laundry detergent maintains the same market share it had 50 years ago because of the sales contributions from its various line extensions. It can be said that Tide employs a preemptive cannibalization strategy in generating line extensions. What does this mean? Answer: When there is a threat of losing consumers to a competing brand, companies sometimes opt for preemptive cannibalization. This causes consumers to switch between the same brand's products, preventing loss of customers. Even though Tide's various line extensions may cannibalize sales of its other products, if the extensions had not been introduced, then customers would have defected to another brand offering the same type of extension. In this way, Tide has maintained its market share through preemptive cannibalization. Test Bank for Marketing Management Philip T Kotler, Kevin Lane Keller 9780132102926, 9780273753360, 9781292092621, 9780133856460, 9789332587403, 9780136009986