Snapples Brand Elements and Sources of Brand Equity - Essay Example

Discuss Snapple’s brand elements and sources of brand equity. What are the strengths and weaknesses of the brand’s existing image? 2. Discuss Quaker’s brand culture and how this potentially clashed with Snapple’s brand culture. How did this contribute to what they did wrong and what could they have done differently? 3. How might Snapple’s sale to Cadbury affect its equity? How well suited are the two brand cultures? 4. What do you think Cadbury’s next moves with Snapple should be? Should the company attempt to expand or reposition Snapple? April, 2009 1.0Introduction Although, there have been increasing body of literature on industrial and service brands, few of these studies have focus on a brand in the context of a particular company. According to Fournier (1998), brands are simply a collection of perceptions held in the minds of the consumers. Branding in consumer’s market has been widely argued to improve on a company’s financial performance and long term competitive position1. According to Keller (1993), powerful brands create meaningful images both in the minds of consumers and society as a whole. Elaborating on this, Aaker (1992) contends that, brand equity is a combination of assets such as loyalty, awareness, and perceived quality with brand associations. This study focuses on the case study of Snapple as a brand. The paper is subdivided in to four different sections with each section addressing a specific question. The fifth part of the paper however provides the conclusion and recommendation of the study. 1.1 brand elements and sources of brand equity. What are the strengths and weaknesses of the brand’s existing image Positioning products in people’s minds and making them attractive to market segments requires careful formulation of the marketing mix. Getting the right blend of the product, promotion price and distribution is essential to put the carefully carried out analysis into operation. The aim is to portray an image for the product or service that will match with how one wants the product to be visualized in people’s mine. Following Keller (2003) brand equity model, modernity should be reflected in the design, aesthetic, or ergonomic aspects of a brand. Snapple brand should has the same style, features and characteristics that help consumers get value for their money. With these, all products are position and identify under the brand name “Snapple.” To gain the loyalty of the customers, Snapple’s vision is not necessarily about what others are doing. It’s about bringing to market products that capture the imaginations of consumers and enhance their lives in the process2. It brand features are associated with amateurish approach to marketing, it distribution strategies, and unconventional marketing. The company through its brand extension emphasizes on supprises. Other brand related features that accelerated the development of the brand equity include, the brand natural ingredients, No artificial preservatives or additives, real taste, hot filled processing and upscale packaging that conveys quality. Brand elements are the trademarks, logos be it visual or audio and any other methods used by a company to trigger response or feedback from the public. Brand elements are the cue used in developing and enhancing brand awareness and recognition3. Consumers often used a company’s brand elements to retrieve the brand when given a product category and to single out a brand out of product shelves in supermarkets4. The management of the Snapple through its brand elements listed above gave the Snapple brand a leading edge over other brands. According to Keller (2003), a variety of brand elements can be chosen that inherently enhance brand awareness or facilitate the formation of strong, favorable and unique brand association5. Other brand elements are: logos, symbols, characters, packaging and the brand name itself. For example, the management of Snapple used the most effective packaging process to maintain the authentic flavors of the ingredients. However, the brand has been criticized because of its inherent weakness of the packaging and the advertisement being anti establishment. According to Keller (2003) the CBBE model approaches brand equity from the perspective of the consumer-whether it be an individual or organisation6. This model is built on the premise that, the power of a brand in the market is in “what customers have learned, felt, seen and heard about the brand due to their experiences over time”7. Keller (2003:60) defines CBBE as the “differentiated effect that brand knowledge has on consumer response to the marketing of that brand: brand awareness and brand image8. The CBBE model suggests that four sequential steps are necessary in building a strong brand. As outlined in the model, these steps start from given an identity to the brand (who are you?), to marking a difference between the brand and other related brands. Keller (2003) cautions that, each step is contingent of the other. This is what the management of Quaker failed to do with the Snapple brand. The CBBE model is built by “sequentially establishing six brand building blocks with customers and assembled within the brand pyramid”9. Keller (2003) argues that, for a brand to be significant, it must get to the top of CBBE Applying this to my case study, the question “who you are? Refers to Snapple in this context. Snapple is a global brand and a strategic player in the tea and hot drink market. The management of Quaker, aught to have through an extension of its product line would have successfully incorporated in their various products and. The Management of Quaker would have through the brand equity model enhanced the brand aesthetic features perceived as the brand quality. This would have been through Snapple brand positioning-media visibility, effectiveness of Snapples’ marketing in terms of sales, premium price to some of its products. Keller (2003) argues that brand awareness refers to the recognition of a brand by customers. Snapple was very popular until it was acquired by Quaker and at present its product line has not been growing as expected. From the customer’s perspective, consumer’s perception and judgment of Snapples’s’ product (what about you and me?) has been positive as indicated by Snapple continuous development of premium products and customers willingness to pay a premium price, acceptance of Snapple’s brand extension through repeated sales as conveyed by their loyalty. Snapple is a powerful brand name. Though its management failed to develop the brand further into a modern brand because of the traditional British heritage. Following Keller (2003) brand equity model, modernity should be reflected in the design, aesthetic, or ergonomic aspects of the Snapple brand. The management of Quaker failed by trying to give the brand a new brand identity through its new brand elements and features. The management of Quaker would have let the brand maintain its original brand elements and features the same style, features and characteristics that help consumers get value for their money through the establishment of a common bond. With these, all products should be position and identify under the brand name “Snapple.” Quaker’s’s vision should not necessarily be about what others are doing. It’s about bringing to market products that capture the imaginations of consumers and enhance their lives in the process10. These measures should be used successfully as a competitive weapon, a strategy for a new product launch, and to get customers return their calls. Positioning products in peoples mine is to portray an image for the product that will match with how one wants the product to be visualized. This is consistent with Keller (2003:70) argument that brand image is created by marketing programs that link strong, favorable, and unique association in the memory. 2.0 Discuss Quaker’s brand culture and how this potentially clashed with Snapple’s brand culture. How did this contribute to what they did wrong and what could they have done differently? The first component of study for customer equity is brand equity which is ‘The added value a brand name identity brings to a product or service beyond the functional benefits provided.’ This statement thus highlights the importance of brand equity for retailers in achieving customer equity because the added value can make customers more likely to shop at a particular store or buy a particular product. Looking at Snapple, while traditional brand theory says brand essence should be narrowed to one element, Snapple though celebrates traditional brand diversity, with brand related unique features that created uniqueness of the Snapple brand- the management of Quaker who bought over the company failed to capitalize on this11. This is however consistent and supports the brand positioning statement. Snapple brand elements includes the brand name ‘Snapple’, Snapple symbols and trademarks as displayed in its products sizes, packaging, labels advertisement and celebrity endorsement created with fan loyalists, products, the colour of its product which is mostly amateurish, the aesthetic features, product qualities and line of product extension. These elements were highly developed as they became brand identity and brand culture to the by Snapple brand, though through co branding with Quaker, the management of Quaker failed to recognized and promote these qualities. Instead, the management of Quaker wanted to emphasize its one size fit all strategy, as its wipe out the traditional brand features, and values of the Snapple brand. No wonder, by 1996 its sales had fallen to 44million. The acquisition that took place between Quaker and Snapple was a misfit, as the traditional brand values of the two brands were sharply in contrast. For example, while the management of Quaker emphasizes on professional labeling and advertisement, the Snapple brand equity has been built using unconventional marketing and distributive strategies that lay emphasizes on making use of natural ingredients, and values. The new management failed as they attempt to disentangle, the Snapple’s brand identity and values. Their new product designs, the price, the shape and colour of the Snapple brand package and other attribute making the brand communicated something new to the buyers. Quaker purchased Snapple in 1994 in an attempt to capitalize on the synergies between Snapple and Gatoradi under the premise of successful experience with the Gatorade that turned it to a powerful global brand. Quaker however failed in its original objectives as its culture and experience with Gatorade were in sharp contrast to the culture of the Snapple brand.. For example, they made many changes to the traditional brand identity and brand culture of Snapple that scared many loyalists. In search of distribution synergy, change of the Snapple product label, and product size from its single serve juice drink sold in 16 ounce bottles complicated issues for the company. According to Kumar (2005), co-branding strengthens a brand image, blur the prototype that separate the two brands, improve customers perception about at least one or all of brands through transfer of customers’ believe from one to the other brand. Since the co-branding extension derives the attributes from the two brands12. Other methods of brand extension include: celebrity endorsement-where a brand is match to a celebrity personality, or a celebrity being used in the advertisement13, and sponsorship -where an organisation takes advantage and be a co-sponsor of a sporting events14. The management of Quaker however failed in this dimension through its co branding with and acquisition of Snapple, because they destroy the traditional brand culture of Snapple. In the past years, co-branding activities have been repeatedly observed. These strategies have been quite successful considering its market position and sales per period when compared to competitors. However, the company aught to have consider using celebrity endorsement in its premium product. Brands of all kinds are used by companies to create a bond with their customers. Through a combination of promises and performance, brands help customers by lowering search costs, increasing consumer knowledge, and forging trust. The management of Snapple brand had acquired this with it customers. Ries and Ries, for instance, stated, “A successful branding program is based on the concept of singularity. It creates in the mind of the prospect the perception that there is no product on the market quite like your product.”(Ries &Ries1998:2). By changing the traditional brand values and features of the Snapple brand, the management of Quaker was going against this. In addition, Lele (1992), suggested that complementary products, for example, restaurant brands with distinct but overlapping target markets, can be used effectively to augment individual brand assets. This complementary effect promotes innovation, ensures overall product quality, provides increased differentiation between co brands, and can generates additional sales for both brands. Not only do the individual brands gain by their synergistic association with complementary brands, but the new identity the does as well. Redefining the Snapple brand has as an objective at increasing the market shares, creating a brand awareness, and positive brand knowledge about the brand. Keller (1993) suggested that positive brand knowledge favorably transforms customer perceptions, preference, and behavior toward the marketing mix, thereby leading to positive brand attitude, brand choice, and brand loyalty. Such effects of brand knowledge represent a ‘‘differential effect’’ in the definition of customer-based brand equity. This proposition by Keller (1993) has been well supported in the marketing stream where brand equity improves price premium, market share, firm performance, and purchase intention. 3. How might Snapple’s sale to Cadbury affect its equity? How well suited are the two brand cultures? Snapple sales to Cadbury will affect its brand equity positively. The sale will be more of a brand repositioning will be to create a brand satisfaction for existing and would be customers. Satisfaction has been defined in several ways. It is largely conceptualized as (1) ‘‘an evaluation rendered that the consumption experience was at least as good as it was supposed to be’’ (Hunt, 1977, p. 459); (2) ‘‘the consumer’s response to the evaluation of the perceived discrepancy between prior expectations and actual performance of the product as perceived after its consumption’’. According to Johnson, Anderson &Fornell (1995), overall satisfaction is characterized by a cumulative construct that has been evaluated by expectations and perceived performance as well as past satisfaction. Here, overall satisfaction is distinct from transaction-specific satisfaction shaped by instant evaluative judgment of the most recent post consumption experience. In addition, by redefining the Snapple brand through a sale to Cadbury, another objective will be to create a brand association and satisfaction link. According to Aaker (1991, p. 109) brand associations are defined as ‘‘anything linked in memory to a brand,’’ which is consistent with Keller’s (1993) line of reasoning that brand associations are other informational nodes linked to the brand node stored in consumer memory. This has been further elaborated by Keller (1993) when he pointed out that the favorability, strength, and uniqueness of brand associations are the dimensions discriminating brand knowledge that play a key role in underlying the differential response to the marketing of the brand, especially in high involvement decision settings. That is, brand equity is supported on a large scale by the associations that consumers attach to a brand. According to Aaker (1991), usage and user imagery can be developed from consumer exposure to advertising, contact with brand users, and experience with the brand (Keller, 1993). Usage and user imagery reveal how consumers express life-styles, social positions, and themselves through products (Aaker, 1991), which in turn arouses brand personality. Brand is often characterized by personality descriptors such as ‘‘young,’’ ‘‘tough,’’ and ‘‘glamorous’’ (Aaker, 1997). This easy to recognized brand values and features can easily be transferred to the Snapple brand. Cadbury is a powerful brand name. This is reflected in the design, aesthetic, or ergonomic aspects of its products. Cadbury products have the same style, features and characteristics that help consumers get value for their money. With these, all products are being position and identify under the brand name “Cadbury.” It shares the same traditional brand elements of the Snapple brand. Cadbury’s vision is not necessarily about what others are doing. It’s about bringing to market products that capture the imaginations of consumers and enhance their lives in the process15. It also make use of nature’s products like Snapple. It is believe in this regard that a partnership between the two brands will create a powerful market break through. These measures have been used successfully as a competitive weapon, a strategy for a new product launch, and to get customers return their calls16. Positioning products in peoples mine is to portray an image for the product that will match with how one wants the product to be visualized. This is consistent with Keller (2003:70) argument that brand image is created by marketing programs that link strong, favorable, and unique association in the memory. According to Cadburys’2005 Company’s report, Cadbury was rated as a powerful brand. Henderson and Mihas (2000) believe that for retail brands a powerful personality must be built through delivering the benefits that the retailer’s target market want, so as to gain a distinctive position in the market. This is important because the products that the retail brands stores sell become synonymous with the brand itself and therefore the marketing strategy must point towards increasing the image of the store and reap the benefits from this increase. Henderson and Mihas (2000) accentuate Abercrombie and Fitch’s success in becoming a ‘fun loving, independent and sexually un-inhibited brand.’ This image struck a cord with college students and teenagers because they could easily associate their emotions and lifestyles with the brand and ended up considering the retail brand as part of themselves. Abercrombie and Fitch’s success enabled them to increase their brand equity because their customer base had a greater perception of the intangibility of their brand over and above the value that they derived from Abercrombie and Fitch but also their competitors. Cadbury purchase of the Snapple brand will be successful against this background because, Cadbury will lay emphasis on reintroducing the traditional brand elements that made up the Snapple original brand. Brand theory is predicated on the idea that consumers benefit from the combination of lowered search costs, increased knowledge, and the built-up trust that strong brands offer (Ries & Ries 1998). Combining well-defined brands, especially those that are complementary to one another, in a single retail channel should be properly thought of. If Jaguar failed as a brand through co branding with Ford, it was due to cannibalization realized by Ford management by the end of the day. From this statement we understand the role that value plays in shaping customer equity. Increasing the value that a customer derives from a good or service will, in theory, have an affect on their satisfaction; therefore they’re more likely to repeat purchases which can in turn, if enough ties are built between the customer and the organisation, lead to long term customer loyalty for the firm. The management of Quaker failed by destroying the traditional brand value and culture of the Snapple brand. Value is the keystone of the customers relationship with the firm. If the firms products and services do not meet the customers needs and expectations, the best brand strategy and the strongest retention and relationship marketing strategies will be insufficient (Keller 2003). 4. What do you think Cadbury’s next moves with Snapple should be? Should the company attempt to expand or reposition Snapple? Cadbury should try and reposition the Snapple brand to its original position. This will be through restoring the brand original brand features, creating a new Cadbury Snapple product line through co-branding and celebrity endorsement. Through this, Snapple brand and Cadbury brand will exist as two brand identities, but will co-brand in new product line extension. Hence the brand equity of the two brand will be developed further is important in achieving customer equity because it helps to build emotional ties that adds value to the consumer because they trust the products or services that are being offered and thus are likely to become more loyal to a company or shop. Achieving this loyalty can be a source of competitive advantage because this loyalty assists in accomplishing superior results over the competition. Here, our caution to Cadbury’s management is to try and reposition the Snapple brands using its original brand elements and brand features. Keller, et al, (2002) have typified the importance that brand equity can play in achieving customer equity and subsequently improve firm performance. They highlighted four key areas that brand equity can have a positive effect on. The four areas are: 1) The brands ability to acquire new customers for current offerings, 2) The brands ability to encourage cross-buying from current customers, 3) The brands ability to charge a price premium for its products and services, and 4) Reduce marketing costs These four areas are significant in achieving superior performance because if the brand is able to acquire new customers then obviously the company can gain more sales and thus in theory increase their revenues and hence profits. In addition to that, if the brand can encourage cross-buying this will have the same effect as before because with the loyalty that customers display through cross-buying it shows an increase in their lifetime value and thus the profits gained by companies. Furthermore, if a retailer is able to charge a premium for its products or services it will have the same effect on revenues and consequently profits again. Changing the way customers think and feel about a product requires emotional messages to appeal to consumers and increase their likeability for the brand. Cadbury which were part in the original Snapple brand features are integrated into the marketing strategy and redesign to ensure that both trust and commitment can be developed and maintained and that there is a level of interdependence between the channel members, which means that an action by Cadbury will impact all the channel members. References Aaker, D. A. (1991). Managing brand equity. New York: Macmillan, Free Press. Aaker, D. A. (1992).The value of brand equity, Journal of Business Strategy 13 (1992) (4), pp. 27–32. Aaker, J. L. (1997). Dimensions of brand personality. Journal of Marketing Research, 34(3), 347–356. Diaz, G. M., & Barcala, F. M., (2006). 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