Deck 8 - Branding - lecture 9 Flashcards
what is brand equity
positive differential effect that knowing brand name has on customer response to product or service
what does brand equity result in
customers showing a preference for one product over another when they are basically identical
branding benefits *
consumer (easy product identification),
manufacturer (creates loyalty),
retailer (attracts customers)
what are branding benefits for consumers *
easier product identification,
communicates benefits and features,
reduces risk in purchasing
what are branding benefits for manufacturers *
helps create loyalty,
defends against competition,
allows premium pricing
why are branding benefits a double edged sword for retailers *
brings in customers because of brand however this creates brand loyalty not shop loyalty (nike shoes in footlocker)
what is an example of brand loyalty not shop loyalty
new nike trainers if not in stock in one shop customer will just go to another
what is the cost difference of acquiring a new customer compared with current
acquiring a new customer is about 6 times more expensive than keeping a current customer
what can strong brands do
strong brands can override disaster (coke bringing out tap water but didn’t affect them long term)
example of a strong brand overriding disaster
tesco horse meat scandal didn’t affect them much long term
how do brands generate value for companies
price premiums,
higher market share,
stable earning streams,
growth avenue
why is there a need for global brands
pressure to reduce cost,
accelerate international innovation,
internationalisation of tastes and buying patterns
main standardised characteristics
product formulation,
brand name
mcdonalds has a global brand but a _____ menu
local (China etc)
short-termism affects ______ ________
brand equity
what is a way to avoid short-termism affecting brand equity
differentiate between ‘overhead costs’ and investment in the future
what are four parts of the product
core product,
tangible product,
augmented product,
potential product
what does core product mean
main reason for existence and purchase
what does tangible product mean
the means by which the core product is made real
example of tangible product
design,
packaging,
branding
what does augmented product mean
add-on extras that make the product more attractive
example of augmented product
insurance deals, extended warranties
what is the product life cycle *
1 introduction,
2 growth,
3 maturity,
4 decline
features of product life cycle introduction 1
sales slow to build, small or negative profit, main priority to create awareness of the product
features of product life cycle growth 2
rapid increase in sales, PRIORITIES - to build up brand preferences, take defensive steps against competition, think about improvements
features of product life cycle maturity 3
can’t be complacent, consolidate core buyers, nurture distribution channels
features of product life cycle decline 4
CHOICES - slow down decline, maximise returns while you still can, phased withdrawal
example of related diversification from coke
a new type of drink (vitamin water for example)
example of unrelated diversification from coke
a coca cola t-shirt (completely unrelated), highest risk
what is a brand
an identifying symbol, words, or mark that distinguishes a product or company from its competitors
what is the branding dilemma
torn between long-term investment and short-term profits
what does short-termism affect
brand equity
what does the core product, tangible product, augmented product and potential product look like as a diagram
smallest circle in the middle is the core product, larger circle round that is the tangible product, larger still circle round that is the augmented product, potential is larger round edge but different colour because not yet realised (lec slides ‘product’)
what does potential product mean
what it could and should be in the future
what does product management involve
what products should be created and when is the best time to launch them,
capitalise on strength and iron out weaknesses,
decide if older product should be ditched or reinvigorated through modifications or marketing strategy
what are the problems with the introduction stage for product life cycle
hard to convince retailers on shelf space,
high failure rates of new production so introduction stage makes heavy demands on marketing resources,
need time for marketing effort to take place
draw out the product life cycle diagram it has time on x and sales and profit on y
two lines sales and profit,
look at post it
what does nurturing distribution channels mean for product life cycle maturity
likely to be heavy competition and increased marketing expenditure from competitors, good relations with distributors essential
what does consolidate core buyers mean for product life cycle maturity
encourage them to buy more, may be possible to convert some brand switcher into loyal customers by sales promotion/ advertising
what does can’t be complacent mean for product life cycle maturity
if product starts to look dated, customers likely to switch brand, small/poorly positioned brands may disappear
what are some reasons for the decline phase
not necessarily poor management,
technological developments,
changes in consumer tastes,
some fashion products have naturally short life-cycles
what does a phased withdrawal involve for product life cycle decline
set cut off date but let people know (car manufacturers often do this)
what does contract out or sell involve for product life cycle decline
smaller firm might see your product as a manageable challenge and satisfactory return
what do slow down decline and maximise returns while you can mean for product life cycle decline
slow down decline: with marketing expenditure and support,
milk whatever you can from it and then withdraw support
what is the product mix
total sum of products and variants offered by the organisation
what is a product line
group of closely related products
why would a company make various combinations of a product (lynx different fragrances and product type shower gel body spray)
not to cover different markets but to offer lots of choice/variation to keep target segment interested/loyal
what is the boston consulting group matrix
post it note
features of question mark in growth share matrix
low market share in high growth market,
requires a high level of investment and has low profitability,
whether it becomes a star depends on how much can afford to invest has product got potential and how effectively can competitors respond to attack (often becomes a double or quit situation)
features of star in growth share matrix
market leader in high growth market,
profitability good and investment high,
investment needed to maintain product position,
when market matures should become cash cows
features of cash cow growth share matrix
high market share in low growth market,
profitability good investment low,
cash cows should be generating the resources to support the organisations development in other high-growth markets
features of dog in growth share matrix
low market share in low growth market,
profitability poor investments divest,
if they require investment to maintain their position they become cash users,
consume more time than they are worth so general recommendation is to divest from these businesses
what can you do a growth share matrix for
a company and then put their products in the different bits,
adidas:
clothes cash cow,
sports equipment like boxing gloves in question mark,
hats and sunglasses in dog,
sports shoes in star
