7. value through brands Flashcards
What is the product?
First, and most basic, marketing consideration
▪ Anything that is capable of satisfying customer needs
▪ Physical products = tangible
▪ Service products = intangible
product line
Group of brands that are closely related in terms of their
functions and the benefits they provide
product mix
Total set of brands marketed in a company
brand potential
Brand name and images Service
Guarantees
Quality and Delivery
design
packaging
branding
Branding is the process by which companies distinguish their
product offerings from the competition
benefits from strong branding
Add value to companies
▪ Positively affect consumer perceptions
▪ Act as a barrier to competition
▪ Improve profits
▪ Provide a base for brand extensions
brand equity
Brand equity is a measure of the strength of a brand in the
marketplace by adding tangible value to a company through the
resulting sales and profits
customer based brand equity
= differential effect that brand knowledge has on consumer
responses to the marketing of a brand
proprietary based brand equity
= derived from company attributes that deliver value to the brand
creating brand equity
- Develop Positive Brand Awareness
- Establish a Brand’s Meaning
- Elicit the Proper Response
- Create Intense Brand Loyalty
Customer-based brand equity leads to
High customer loyalty
▪ Low price sensitivity
▪ High willingness for customers to visit more than one outlet
to purchase the brand
▪ Strong base for brand-extensions
Proprietary-based brand equity
Patents
* Give certainty to future revenue streams
* Brand equity drops at the end of lifetime of patent
* Channel relationships
* Experience, knowledge, relationships with distributors and suppliers
* Enhance value of company brands
brand building
- quality
- positioning
- repositioning
- well blended communications
- being first
- internal marketing
- long term perspective
building a strong brand (key decisions)
Key decisions
* Brand name strategies and choices
* Rebranding
* Brand Extension and stretching
* Co-branding
family brand names
Brand name is used for all products
* Helps promotion of all the brands carrying the family name
* Risk: when one brand receives unfavorable publicity, all
products within brand are potentially affected
choosing a brand name
Should evoke positive associations
2. Should be easy to pronounce
3. May suggest product benefits
4. Technological products: (alpha-)numeric branding
5. Should be transferable (check cultural meaning)
6. Capable of registration and legal protection
renaming
Brand name changes
* Cosmetic
* Tactic moment focused on
creating and producing
communications
* Performance < perception
* Is about “packaging”
You change:
your name
rebranding
Brand content changes
* Fundamental
* Strategic moment of truth,
confronting the organizational,
structural and cultural
implications
* Performance > perception
* Is about ‘repositioning’
You change:
their minds
reasons for rebranding
Merger or acquisition
* Desire to create a new image/position in the marketplace
* The sale or acquisition of parts of a business
* Corporate strategy changes
* Brand familiarity
* International marketing considerations
* Legal problems
brand extension
= Use of an established brand name on a new brand within a
different product category
line extension
= Use of an established name on a new brand within the same
product category
benefits brand / line extension
Leverage by parent brand image & associations
* Less perceived risk for consumers
* Smaller financial investment & risk for company
* More efficient use of communication efforts
* Expand variety
* Reach new customers
* More bargaining power throughout channel
* Command more shelf space
* Strengthen parent brand image
risks brand / line extension
Loss of meaning and clear positioning (brand dilution)
* Risk of cannibalization
* In general, there should be a reasonable amount of ‘fit’
* Unsuccessful extension can harm parent brand
* More than half of brand extensions fail
Product-based co-branding
Linking of two (or more) brands to form a product in which
both brand names are visible to consumers
1. Parallel product-based co-branding
* Two or more independent brands join forces to produce
a combined brand
2. Ingredient product-based co-branding
* One supplier explicitly chooses to position its brand as an ingredient
of a product
Product-based co-branding risks/benefits
Benefits
* Added value and differentiation
* Positioning
* Reduction of cost of product introduction
▪ Risks
* Loss of control
* Loss of brand equity
Communications-based co-branding
Linking two or more existing brands for the purpose of joint
communication
1. Recommendation
* Endorsement for one of the brands from the other
2. Provide promotional opportunities
* Alliance to stimulate awareness and interest
global branding
= achievement of worldwide brand penetration
▪ Globally consumers seek
* Reliable, quality products
* At low price
▪ Marketing task
* Offer products and service in the same way
* Achieving global economies of scale
global branding risks/benefits
Benefits
▪ Reducing time-consuming local modifications
▪ Perception of global increases perceived prestige and quality which increases purchase
intentions
▪ Easier to coordinate and to control
▪ Risks
▪ Taste and consumption patterns varies nationally
▪ Adaptation increases self-brand congruity which causes an increased attention to ad and
brand
