! Week 8: Branding Dr Christopher Pokarier | EB202 Introduction to Business
!Week8:BrandingDrChristopherPokarier|EB202IntroductiontoBusiness
Marketingintroduction:‘The4Ps’
Basicmarketingtheoryidentifies4elementsinthe‘marketingmix’:
! Product–what?
! Price-forhowmuch?
! Place–whereisitsold?
! Promotion–howisitsold?
Brandingisonepart&consequenceofthisdecisionset
!Brandsofferassurance+identity
Brandpower
! Brandssimplifyconsumerdecisions
! Theyreducesearch&decisiontimesinaneraofproductcomplexity,hugechoice,andinformationoverload
! Brandsshiftresponsibilityfrombuyers
! “Well,IboughttheToyotasodon’tblameme-Dear-thatwearebrokendowninthemiddleofnowhere..”
! Brandsenhancestatusoftheircustomers:BUTonlyamongstotherswhoalsovaluethatbrand!!
!EverythingisbrandedtodayAstrongbrandsupportshigherprices&addstothemarketpositionofrelatedproducts
!Brandsmayexpressvalueseg:Dior=style,elegance,creativity,exclusivity
Brandsascommunications
Brandscommunicatefocus&valuesto
! Customers
! Managersofthefirm
! Allemployees
! Suppliers
Brandsguidestrategicchoice&implementationofstrategy
[andstrategyiswhatyouDON’Tdo]
!BrandsarecorefirmresourcesBrandpower(reputation)isusuallybuiltslowly+expensively+BUTdamagedeasily
Brandshavingpullingpower
! Strongbrandscreatedemandforaproduct
! Consumersdemandrenownedproductsfromretailers
! Brandstherefore‘pull’productthroughthesupplychainfromthemanufacturer,throughwholesalers&retailers
! Thisempowersthemanufacturer–increasingprofits
! Lessneedforanexpensivesalesteamorproductplacementstrategy(ie.Lessneedto‘push’aproduct)
!CommunicatingvalueBrands&advertisingcommunicateavaluepropositiontoatargetedmarket
Basicstrategicchoice
Ingeneral,firmshaveachoicebetween
! Priceleadership:Sellstandardgoodsatlowpricesinlargevolumes
! Productdifferentiation:Selldistinctivegoodsathigherpricesbuttypicallyinsmallervolumes
Veryfewfirmscanachievepriceleadership&differentiationacrosstheirproductrange
!AbusinessnamebecomesabrandIntraditionalindustriesthefirm’snameisthebrand&isguarded
!Brands&storiesoforigin&placeSuchstoriesgiveafirmfocus&communicatevaluestocustomers
Brandportfolios
! Largeenterprisesincreasinglyhaveaportfolioofbrands
! Thatis,multiplebrandsownedbyonefirm
! Multinationalenterprisesmaytakeoverstronglocalbrandsabroad&bringtheirknow-howtothem
! Eg.Campbell’sSoupownsArnott’sBiscuits
! Luxotticaowns/makesmanybrandedsunglasses..eg.Persol,RayBan,Oakley&licensebrands(Prada,Chanel,D&G,MiuMiu,PaulSmith,Tiffany,Versace,RalphLauren,Ferragamo,etcetc)
! FastRetailinghasUniqlo,Theory,HelmutLangetc
Segmentation
Firmsidentifyandrespondtodifferenceswithinageneralmarket(marketsegments)foraparticularproductbasedon
! Pricesensitiveness&orientationtoquality
! Demandcharacteristics(reflectingtastes,values,generationsetc
! Differingvaluesplacedonthesamebrand
! Underonebrand,segmentationisachievedvia‘versioning’orcontrollingdistributionchannels
Positioning
Strategicproductpositioninginthemarket
! Strategicchoicesoverbranding,pricingandproductmixarethenmadetotargeteachsegmentappropriatelyandmaximiseprofitability
! Oftenfirmschoosenottocompeteinsomesegments–forvariousreasonsincluding…
! Intensecompetitionandlowprofitmargins,technologicalprowess,premiumpositioningofbrand
Findasegmentormakeyourown
! Understandyourmarketposition
! Findasegmentinwhichyoucanofferadistinctivevalueproposition
! FindacategorytobeNUMBERONEin(thatisvaluedbycustomers)
! Makecustomersvaluethatcategorymorehighlyvaluedbycustomers
! BUTunderstandthatyoucan’tchangecustomers’minds
!BrandpreservationConstantdangerof‘success’bringingbranddilution:especiallyforexclusiveproducts
Brandextension
! AstheLuxotticalicensedbrandscaseshows,thereismuchscopetoextendastrongbrandintonewproductlines
! Eg.fashion,accessories,perfumes,watches,homewares,evenhotels(eg.VersaceResorts)
! Dangerofbranddilutionwithover-extension
! Challengingstrategicandtacticalissuesarise
! Furthercomplicatedbylicensingarrangements
!BrandcreationInitialnamingdecisionscreatelegaciesandlock-in
Whatismarketing?
Marketingisaverybroadconceptthatincludes
! Assessing[future]consumerdemand
! Productplanning,packaging,branding
! Pricing
! Advertising
! Distribution&Selling
! Publicrelations–notjustwithcustomersbutallplayersinthebusinessenvironment–investors,governments,thepublic-at-large
! Marketingisintegraltocorporatestrategy
!DistributionStrongbrandsstillneedtobeaccessibletocustomerswhentheyneedtheproduct
Advertising
! Bought(paid)mediaspace/attention
! Customersmustfind/knowyourproduct
! Massmarketingformassconsumergoods:expensivebutcanpullproductthroughdistributionchains
! Advertisingisbecomemorefocused&varied(eg.internet)
! Targetedmarketing:focusesoncorelikelycustomers
! Viralmarketing:usestargetaudiencetospreadamessage
Publicrelations
! Earnedmediaspace/attention
! Promotesthefirminadditiontobrands
! Crisiscommunications:respondsstrategically&tacticallytoaproblemwiththecompany
! Investorrelations:communicatestoinvestors
! Governmentrelations:dealswithregulators&policymakers
! Rivalsforpublicattentionareeverywhere–notjustrivalfirms
!UbiquitousbrandingBrandspatternurbanandvirtualspace:peoplereflect&evenbecomebrands