Branding and its role in profitability of holding Companies part 2

Product involvement or contribution

The notion of product involvement or contribution is precisely examined in customer’s behavior and society’s psychology and it relates to how customer uses the product in everyday life. Product involvement expresses that products and special services are more or less the core of people’s lives and point to their needs and demands and reflect their beliefs and values. For example, automobile is a product with high involvement. Many personalities choose an automobile to feel that they show the original and real image of themselves in society. Thus such a choice improves their social identity and self confidence. Products with low consumption life such as beverages have little involvement and customer has less care for them. The product involvement has an important aspect in marketing, because it can affect the people’s feedback to product and services.


2- Branding of holding companies

Brands activity is inherently the identification and distinction of products, but services, organizations, sport, art, beliefs, people and places may also be brands. Brand is the dialogue of senses and identity. This sense and identity was previously designed and/or declared and established in customers’ mind.

Holding brand may be the reasonable summation of marketing efforts of companies to provide the holding collaborative value. Value systems need to be considered in a wider concept of identity theory. This subject provides the strategic framework to understand holding brands. Holding brand may be the image or identity expression of an organization .

Holding brand is a smart decision made by the senior manager to clarify the reputation and identity of the organization in shape of brand design. In forming a strong holding brand, the organization has the opportunity to establish a connection with bank or finance and credit resources to define the required cases. The meaning of holding brand values must help the organization to reach its objectives.


2-1 Co-branding with one holding name

Blackett and Boad defined co-branding as a form of cooperation between two or more brands with significant customer recognition, in which all the participants’ brand names are retained. Thus, co-branding is not simply cooperation between organizations, but must involve the public linkage of corporate brands that are owned or controlled by different organizations. This linkage process should start with the corporate brand values. Co-branding values are:

  • Core values
  • Absentee values
  • Peripheral values
  • Generic values

Each co-branded partner has, as its own core values, a set of fundamental values that define the brand and differentiate it from the competition. The challenge within co-branding ventures is to align the core values and maximize the opportunity to augment absentee values that the brand lacks but wishes to acquire. Co-branding may also offer an opportunity to abandon peripheral values that are inappropriate or negative. In order for the co-branding exercise to succeed, each partner must have the generic values that enable their brand to enter the co-brand category and compete effectively.

Just as successful mergers require best practice in corporate identity and corporate communications, co-branding initiatives need to take into account synergies in the corporate identities and corporate communications. Furthermore, successful co-branding may result in transferring the three virtues of corporate brands :

  • Communicate clearly and consistently the co-brand promise
  • Differentiate the co-brand from its competitors
  • Enhance the esteem and loyalty of its customers and stakeholder groups and networks


2-2 Brand Equity

Initially brand equity was seen from a consumer behavior perspective that emphasized the consumer response to the marketing of the brand. The consumer behavior perspective has been extended to include interactive communications, marketing strategy, channel management, services and financial perspectives. This broader understanding of brand equity and branding recognizes the importance of relationships with multiple stakeholder groups .The way in which the firm communicates the brand is a significant factor in the increase of its equity. From a financial perspective, a brand is regarded as an asset and its value to the firm lies in the ability to build and maintain earnings over and above the value created by the tangible assets. Knox et al. (2000) identified reputation, product/service performance, product brand and customer portfolio, and networks as the unique organization value proposition. Brand equity is, therefore, an intangible asset that resides in the complex interaction of brand reputation, performance, meanings and relationships that add to the value of an organization.

Branding is the creation of the conditions that allow the connection of brands and the production of a viable linked identity, even though the brands may have no necessary belongingness. If the branding is successful, then stakeholders who participate in the relevant discourse will accept the linkage and speak and behave accordingly.

Potential sources of brand equity for corporate co-brands are outlined below.

  • Equity source 1: equity is developed through access to the brand strategy and associations of the co-branded partner.

ao-branding offers access to the brand strategy of another brand. Thus each organization has the opportunity to pursue new strategies assisted by an experienced partner.

  • Equity source 2: equity is developed through the alignment of corporate brand values.

Value is derived from the alignment of agreed-on common starting points. When brand values are compatible and connected the brands at a fundamental level. Thus, a successful co-branding articulation may enable the values associated with one brand to be linked with another brand. Alternatively, when particular values are shared by both brands, then these values may be even more powerfully associated with the co-brand.

Alignment may occur with core, extended or inspirational brand values. Some brand values are culture-specific and may offer fewer opportunities for marketing communication promotions.


  • Equity source 3: equity emerges from the marketing communications association

Association with a partner’s brand facilitates the articulation, disarticulation and/or re-articulation within desired discourses. In this case, much of the initial co-branded equity was established through the marketing communication relationship, and it is possible to argue that the marketing relationship was crucial to the establishment of the co-brand identity and reputation.


  • Equity source 4: the corporate co-brand reach offers equity

An immediate source of co-brand equity may also be access to the established stakeholder relationships, media, distribution channels, and markets of the partner brand. A prime reason for sponsorship is to gain access to a new set of consumers, and in a co-branded relationship that access is extended to include stakeholders such as media, local communities, and even government. Co-branding also allows easy access to a brand partners’ established markets and product distribution channels.


2-3 The Strategic importance of Fit (Congruity)

Fit means the strategic adaptation of brand companies and holding in mission, target customers and/or the defined values. The target customer of brand products is determined by congruity evaluation (for instance, between brands and affiliates, or brands and stockholders). When congruity is high, the scientific and information adaptation of customers often leads to their favorable feedback. Adversely, when congruity is low, the non adaptation of information and customers’ experience negatively affects their feedbacks.

The ability of branding programs of holding companies in customization a particular belief in brand image, meaning, feedback and brand relationships are studied in meaning transfer model. According to this model, transfer of meanings and beliefs from one subject to another (for example, from brand companies to holdings and vice versa) and establishing some cooperation needs good development of two subjects. The clearer relationships are defined, the stronger their cooperation and collaboration will be and the better the competitive situation of holding brand will be. In contrast, the weaker are defined the relationships, the less favorable will be the common definitions, values, mission and records, target customer etc.

In fact customers easily understand the relationship between two brands, like a musical brand with Sony company brand and consequently the special cooperation of two brands, brand images, brand reputation enhance and perception risk will reduce and a sense of intimacy is created that finally leads to a positive situation.


2-4 Branding Strategies

Holding brand changes the way of presenting product/service to market. Some features of brand such as name, logo, values, motivation and/or sign or special reputation of organization, help the customer to choose product/service between different variables. Presenting exclusive services (in effect unique) in services industry is reflected in uniqueness, especially commitment throughout the organization. In addition strong brands have demand advantages like cost advantage.

The real value of strong personality depends on customer’s perception and commitment of a brand. Strong brands reduce the search time of customer and limit the access of rivals to their company information and reduce the risk of information retrieval and facilitates the customers relation with brand and reinforces the positive beliefs towards brands.

Brand feedback is the next step of customers’ experiences which ends in brand relations. Brand feedback forms with two components: judgments and emotions. Judgments are the knowledge feedbacks of customers from validation and brand value that a holding must have. Validation is the perception capacity of doing commitments. Brands with high validation have low perception risk (by customer), information costs and non reliability and have higher expected profitability.

Brand emotions include warmth, welfare, excitement, self-respect and social acceptance. Brand emotions help the companies to develop the positive effective relation with customers and improve their tendency to the brand.


Measurable factors of brands congruity with each other are:

  • Brand preference (loyalty, satisfaction etc.)
  • Transfer of brand image (definition and recognition of brand)
  • Customer product pattern (affected by brand identification)
  • Process customization


2-5 Holding plans and brand management

Holding plans in support of the special objectives of branding has effects on partners’ collaborative relations. Brand management strategies of holding need holding’s profound notions and activities.

The benefits of holding branding may include the increase of brand associations, improvement of competitive situation, positive feeling of customer and increase of brand fans.

The maximum effect of holding’s branding plans need specific conditions. Customers’ evaluation of the plans and holding brand management is performed on these factors: personal interests, company’s reputation, sponsor’s motivation and perception of congruity.


2-6 The role of customization process

The process of identification and customization of brand concept, in clarification of situation and preference and brand benefits in market is very important. Customers may easily understand the adapted concepts and may reach more positive features ad situations. The simplicity of the process has significant effect on the customer’s feedback.


2-7 The role of brand pattern, and the effect of customer product pattern

The patterning theory affects the customer product pattern feedback. If the customer product pattern conforms to the product classification, the brand image beliefs have huge effect on brand preference. Therefore the information classification facilitates the motivation made by sponsor or holding. Thus customer confronting the purchase situation uses the schematic pattern of brand in his mind. One may suppose that when this pattern is well defined and recognized, customers will have fewer tendencies to accept their image beliefs whether it does not conform to their schematic pattern.