Chapter7 branding con't

Chapter 7 Con’tChapter 7 Con’t

Product, Services, and Product, Services, and Branding Strategies Con’tBranding Strategies Con’t

Branding DecisionsBranding Decisions

• A brand is a name, term, symbol, or any A brand is a name, term, symbol, or any other unique element of a product that other unique element of a product that identifies one firm’s product(s) and sets it identifies one firm’s product(s) and sets it apart from competitionapart from competition

• Brands should Brands should – be memorablebe memorable– have a positive connotationhave a positive connotation– convey a certain imageconvey a certain image

Branding Strategy: Branding Strategy: Building Strong BrandsBuilding Strong Brands

• Brands may be the major enduring Brands may be the major enduring asset of a company, outlasting the asset of a company, outlasting the company’s specific products and company’s specific products and facilitiesfacilities

• Brands are powerful assets that must Brands are powerful assets that must be carefully developed and managedbe carefully developed and managed

• Brands represent consumers’ Brands represent consumers’ perceptions and feelings about a perceptions and feelings about a product and its performance—product and its performance—everything that the product or service everything that the product or service means to consumersmeans to consumers

Brand EquityBrand Equity• Brand Equity:Brand Equity: the positive differential effect that knowing the the positive differential effect that knowing the

brand name has on customer response to the product or brand name has on customer response to the product or serviceservice– A A measuremeasure of a brand’s equity is the of a brand’s equity is the extent to which customers extent to which customers

are willing to pay more for the brandare willing to pay more for the brand

• Brand Valuation:Brand Valuation: the process of estimating the total financial the process of estimating the total financial value of a brand (Coca Cola $69 Billion, Microsoft $65 billion, value of a brand (Coca Cola $69 Billion, Microsoft $65 billion, and IBM $53 billion)and IBM $53 billion)– A powerful brand enjoys a high level of consumer brand A powerful brand enjoys a high level of consumer brand

awareness and loyaltyawareness and loyalty– It provides a company with more leverage in bargaining with It provides a company with more leverage in bargaining with

resellersresellers– A company can more easily launch line and brand extensionsA company can more easily launch line and brand extensions– Offers a company some defense against fierce price competitionOffers a company some defense against fierce price competition

• Customer equity:Customer equity: the value of the customer relationships the the value of the customer relationships the brand creates—the fundamental asset underlying brand equitybrand creates—the fundamental asset underlying brand equity

Branding StrategyBranding Strategy

•Both Tiger Both Tiger Woods Woods and Nike can be and Nike can be considered considered brandsbrands

Brand StrategyBrand Strategy

• Brand Brand PositioningPositioning

• Brand Name Brand Name Selection Selection

• Brand SponsorshipBrand Sponsorship• Brand Brand

DevelopmentDevelopment

• Three levels of Three levels of positioning:positioning:– Product attributesProduct attributes

• Least effectiveLeast effective

– BenefitsBenefits– Beliefs and valuesBeliefs and values

• Taps into emotionsTaps into emotions

Key Key Decisions Decisions

Brand PositioningBrand Positioning• Brand Positioning:Brand Positioning: marketers need to position their marketers need to position their

brands clearly in target customers’ mindsbrands clearly in target customers’ minds• Can position under product attributesCan position under product attributes

– The The least desirableleast desirable level for brand positioning because level for brand positioning because competitors can easily copy attributescompetitors can easily copy attributes

– Customers are not necessarily interested in attributes but what Customers are not necessarily interested in attributes but what those attributes will do for themthose attributes will do for them

• Can position by associating its Can position by associating its name with a desirable benefitname with a desirable benefit

• The strongest brands are positioned on The strongest brands are positioned on strong beliefs and strong beliefs and valuesvalues

• When positioning a brand, the marketer should establish a When positioning a brand, the marketer should establish a mission for the brand and a vision of what the brand must mission for the brand and a vision of what the brand must be and dobe and do

Branding StrategyBranding Strategy

Product Positioned Product Positioned on Emotionson Emotions

MasterCard MasterCard positions its positions its

credit card based credit card based on consumer on consumer

emotionsemotions

Brand StrategyBrand Strategy

• Brand PositioningBrand Positioning

• Brand Name Brand Name SelectionSelection

• Brand SponsorshipBrand Sponsorship• Brand Brand

DevelopmentDevelopment

• Good Brand Names:Good Brand Names:– Suggest something about Suggest something about

the product or its benefitsthe product or its benefits– Are easy to say, recognize Are easy to say, recognize

and rememberand remember– Are distinctiveAre distinctive– Are extendableAre extendable– Translate well into other Translate well into other

languageslanguages– Can be registered and Can be registered and

legally protectedlegally protected

Key Key Decisions Decisions

Brand Name SelectionBrand Name Selection• Desirable qualities for a brand name include:Desirable qualities for a brand name include:

1.1. It should be easy to pronounce, It should be easy to pronounce, recognize, and remember.recognize, and remember.

2.2. It should be distinctive.It should be distinctive.

3.3. It should suggest product’s benefits It should suggest product’s benefits and qualities.and qualities.

4.4. It should be extendable.It should be extendable.

5.5. It should translate easily into foreign It should translate easily into foreign languages.languages.

6.6. It should be capable of registration It should be capable of registration and legal protection.and legal protection.

Boudreaux’s Butt Paste is a real product that is used in the treatment of diaper rash.

Evaluate this brand name against the criteria for a good brand name that were previously discussed.

How does it fare? Explain.

Brand StrategyBrand Strategy

• Brand PositioningBrand Positioning• Brand Name Brand Name

Selection Selection

• Brand Brand SponsorshipSponsorship

• Brand Brand DevelopmentDevelopment

• Manufacturer brandsManufacturer brands• Private (store) brandsPrivate (store) brands

– Costly to establish and Costly to establish and promotepromote

– Higher profit marginsHigher profit margins

• Licensed brandsLicensed brands– Name and character Name and character

licensing has grownlicensing has grown

• Co-brandingCo-branding– Advantages / Advantages /

disadvantagesdisadvantages

Key Key Decisions Decisions

Brand SponsorshipBrand Sponsorship

• Brand Sponsorship:Brand Sponsorship: four sponsorship four sponsorship optionsoptions

– Private Brands:Private Brands: store brand or distributor store brand or distributor brandbrand

– Manufacturer’s Brand:Manufacturer’s Brand: or national brand or national brand

– Licensed Brands:Licensed Brands: the brand name is the brand name is licensed to other productslicensed to other products

– Co-Branding:Co-Branding: when two established brand when two established brand names of different companies are used on the names of different companies are used on the same productsame product

Brand StrategyBrand Strategy

• Brand PositioningBrand Positioning• Brand Name Brand Name

Selection Selection • Brand SponsorshipBrand Sponsorship

• Brand Brand DevelopmentDevelopment

• Line extensionsLine extensions– Minor changes to existing Minor changes to existing

productsproducts• Brand extensionsBrand extensions

– Successful brand names Successful brand names help introduce new help introduce new productsproducts

• MultibrandsMultibrands– Multiple product entries Multiple product entries

in a product categoryin a product category• New brandsNew brands

– New product categoryNew product category

Key Key Decisions Decisions

Brand DevelopmentBrand Development• Brand Development-Brand Development- 44 choices for brand choices for brand

development:development:• Line ExtensionsLine Extensions

– Occur when a company introduces additional items in a Occur when a company introduces additional items in a given product category under the same brand name, such given product category under the same brand name, such as new flavors, forms, colors, ingredients, or package as new flavors, forms, colors, ingredients, or package sizessizes

• Brand ExtensionBrand Extension – Involves the use of a successful brand name to launch Involves the use of a successful brand name to launch

new or modified products in a new category—gives a new new or modified products in a new category—gives a new product instant recognition and faster acceptanceproduct instant recognition and faster acceptance

• MultibrandsMultibrands – Offers a way to establish different features and appeal to Offers a way to establish different features and appeal to

different buying motives—additional brands in the same different buying motives—additional brands in the same category—a drawback is that each brand might only category—a drawback is that each brand might only obtain a small portion of market share and none may be obtain a small portion of market share and none may be very profitablevery profitable

• New BrandsNew Brands – A company may create a new brand name when it enters A company may create a new brand name when it enters

a new product category for which none of the company’s a new product category for which none of the company’s current brand names is appropriatecurrent brand names is appropriate

Figure7-4:

Brand DevelopmentStrategies

Line Extensions Line Extensions May Feature Different:May Feature Different:

Brand StrategyBrand Strategy

• FlavorsFlavors• ColorsColors

• FormsForms• IngredientsIngredients

• Package Package SizesSizes

Managing BrandsManaging Brands• First, the brand’s positioning must be First, the brand’s positioning must be

continuously communicated to consumerscontinuously communicated to consumers

• Brands are maintained by Brand Experience—Brands are maintained by Brand Experience—– Customers come to know a brand through a wide range Customers come to know a brand through a wide range

of contacts and touch points such as advertising, of contacts and touch points such as advertising, personal experience, word of mouth, personal personal experience, word of mouth, personal interactions, websites, etc.interactions, websites, etc.

• The company needs to train its people to be The company needs to train its people to be customer-centeredcustomer-centered

• Finally, companies need to periodically audit their Finally, companies need to periodically audit their brands’ strengths and weaknessesbrands’ strengths and weaknesses

Services MarketingServices Marketing

• ServicesServices– Account for 74% of U.S. gross Account for 74% of U.S. gross

domestic product.domestic product.– Service industries include business Service industries include business

organizations, government, and organizations, government, and private not-for-profit organizations.private not-for-profit organizations.

The Nature and Characteristics The Nature and Characteristics of a Serviceof a Service

• A company must consider four special service A company must consider four special service characteristics when designing marketing programs: characteristics when designing marketing programs: intangibility, inseparability, variability, and perishabilityintangibility, inseparability, variability, and perishability

• Service IntangibilityService Intangibility – Services cannot be seen, tasted, felt, heard, or smelled before Services cannot be seen, tasted, felt, heard, or smelled before

they are purchased—people undergoing cosmetic surgery they are purchased—people undergoing cosmetic surgery cannot see the result before the purchase—to reduce cannot see the result before the purchase—to reduce uncertainty, buyers look for “signals” of service qualityuncertainty, buyers look for “signals” of service quality

• Service InseparabilityService Inseparability – The services cannot be separated from their providers, The services cannot be separated from their providers,

whether the providers are people or machines—both the whether the providers are people or machines—both the provider and the customer affect the service outcomeprovider and the customer affect the service outcome

• Service VariabilityService Variability – The quality of services depends on who provides them as well The quality of services depends on who provides them as well

as when, where, and how they are providedas when, where, and how they are provided

• Service PerishabilityService Perishability – Services cannot be stored for later sale or useServices cannot be stored for later sale or use

Marketing Strategies for Marketing Strategies for Service FirmsService Firms

• In a service business, the customer In a service business, the customer and the front-line employee interact to and the front-line employee interact to create the servicecreate the service– The service provider must then interact The service provider must then interact

effectively with customers to create effectively with customers to create superior value during service encounterssuperior value during service encounters

• Successful service company companies Successful service company companies focus their attention on both their focus their attention on both their customers and their employees.customers and their employees.

Marketing Strategies for Marketing Strategies for Service FirmsService Firms

• Service-Profit Chain:Service-Profit Chain: links service firm links service firm profits with employee and customer profits with employee and customer satisfaction—consists of five linkssatisfaction—consists of five links– Internal Service QualityInternal Service Quality– Satisfied and Productive Service EmployeesSatisfied and Productive Service Employees– Greater Service ValueGreater Service Value– Satisfied and Loyal CustomersSatisfied and Loyal Customers– Healthy Service Profits and GrowthHealthy Service Profits and Growth

• It all begins with taking care of those who It all begins with taking care of those who take care of the customerstake care of the customers

Marketing Strategies for Marketing Strategies for Service FirmsService Firms

• Internal Marketing:Internal Marketing: the service firm must effectively the service firm must effectively train and motivate its customer-contact employees and train and motivate its customer-contact employees and supporting service people to work as a team to provide supporting service people to work as a team to provide customer satisfactioncustomer satisfaction

• Interactive Marketing:Interactive Marketing: service quality depends service quality depends heavily on the quality of the buyer-seller interaction heavily on the quality of the buyer-seller interaction during the service encounterduring the service encounter

• Service companies face three major marketing tasks: Service companies face three major marketing tasks: the increase of competitive differentiation, service the increase of competitive differentiation, service quality, and productivityquality, and productivity– The service company must develop a differentiated offer, The service company must develop a differentiated offer,

delivery, and imagedelivery, and image– It can consistently deliver higher quality than its competitorsIt can consistently deliver higher quality than its competitors– They can increase their service productivityThey can increase their service productivity

Coke – Pepsi Taste TestCoke – Pepsi Taste Test