Page 309 - Foundations of Marketing

276 Part 4 | Product and Price Decisions

recalls that affected several million vehicles, because of its
historically high perceived brand quality. Even though the
recalls were a huge mark against the brand, the company’s
loyalists and previously perceived high brand quality enabled
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it to survive.
Perceived high brand quality helps to support a premium
price, allowing a marketer to avoid severe price competition.
Also, favorable perceived brand quality can ease the intro-
duction of brand extensions because the high regard for the
brand likely will translate into high regard for the related
products.
The set of associations linked to a brand is another key
component of brand equity. At times, a marketer works to
connect a particular lifestyle or, in some instances, a cer-
tain personality type with a specific brand. These types of
brand associations contribute significantly to the brand’s
equity. Brand associations sometimes are facilitated by using
trade characters, such as the Jolly Green Giant, the Pillsbury
Dough Boy, and the Snuggle Bear. Placing these trade char-
acters in advertisements and on packages helps consumers
to link the ads and packages with the brands. For instance,
Geico’s advertising often portrays its gecko trade character
describing how consumers can save money with Geico car
Courtesy of GEICO insurance.
Although diffi cult to measure, brand equity represents
the value of a brand to an organization. Table 10.2 lists the

pany that owns a brand listed in Table 10.2 would agree that
Stimulating Brand Associations top 10 brands with the highest economic value. Any com-
Geico uses the gecko as a trade character to stimulate favorable the economic value of that brand is likely to be the greatest
brand associations. single asset in the organization’s possession.

Types of Brands

There are three categories of brands: manufacturer, private distributor, and generic.
Manufacturer brands are initiated by producers and ensure that producers are identified with
their products at the point of purchase—for example, Green Giant, Dell Computer, and Levi’s
jeans. A manufacturer brand usually requires a producer to become involved in distribution,
promotion, and, to some extent, pricing decisions.
Private distributor brands (also called private brands, store brands, or dealer brands ) are
initiated and owned by resellers—wholesalers or retailers. The major characteristic of private
brands is that the manufacturers are not identifi ed on the products. Retailers and wholesalers
use private distributor brands to develop more effi cient promotion, generate higher gross mar-
gins, and change store image. Despite the many strong national brands available to consum-
ers, the top-selling consumer brand on this continent is Walmart’s private label brand, Great
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Value. Private distributor brands give retailers or wholesalers freedom to purchase products
of a specifi ed quality at the lowest cost without disclosing the identities of the manufacturers.
Wholesaler brands include IGA (Independent Grocers’ Alliance) and Topmost (General Gro-
cer). Familiar retailer brand names include Sears’ Kenmore and JCPenney’s Arizona. Many
manufacturer brands Brands successful private brands are distributed nationally. Kenmore appliances are as well known as
initiated by producers most manufacturer brands. Sometimes retailers with successful private distributor brands start
private distributor brands manufacturing their own products to gain more control over product costs, quality, and design
Brands initiated and owned by in the hope of increasing profi ts. Sales of private labels now account for one out of every four
resellers product items sold in supermarkets, drugstores, and mass merchandisers, totaling some $ 93
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generic brands Brands billion of retail business. Supermarket private brands are popular globally, too.
indicating only the product Some marketers of traditionally branded products have embarked on a policy of not brand-
category ing, often called generic branding. Generic brands indicate only the product category (such

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