Module 1 Flashcards
a brand (defined by the American Marketing Association)
a “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.”
Many practicing managers refer to a brand as
something that has actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace.
This would be a “Brand” rather than a “brand”.
The difference between AMA’s ‘brand’ and practicing managers’ ‘Brand’ can often lead to
disagreements about branding principles or guidelines which often revolve around what we mean by the term.
brand elements
Different components of a brand such as a name, logo, symbol, package design, or other characteristics that identify and differentiate it
the word brand is derived from norse word brander
meaning to burn - mark their lvestock to identify
A product can be…
a physical good a service a retail outlet a person an organization a place an idea
Five levels of meaning for a product
core benefit level generic product level expected product level augmented product level potential product level
core benefit level
the fundamental need or Want that consumers satisfy by consuming the
product or service.
generic product level
a basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features.
expected product level
a set of attributes or characteristics that buyers normally expect and agree to when they purchase a product.
augmented product level
includes additional product attributes, benefits, or related services that distinguish the product from competitors.
potential product level
includes all the augmentations and transformations that a product might ultimately undergo in the future.
A brand is more than a product, as it can have…
…dimensions that differentiate it in some way from other products designed to satisfy the same need.
Some brands create competitive advantages with…
…product performance.
For example, companies in the right figure have been leaders in their product categories for decades due, in part, to continual innovation.
Other brands create competitive advantages through…
…non-product-related means.
Coca-Cola, Chanel No.5 and others have been leaders in their product categories by understanding consumers motivations and desires and creating relevant and appealing images surrounding their products.
THE WORLD’S 25 MOST INNOVATIVE COMPANIES
1 Apple 2 Google 3 Toyota Motor 4 General Electric 5 Microsoft 6 Proctor & Gamble 7 3M 8 Walt Disney 9 IBM 10 Sony 11 Wal-Mart Stores 12 Honda Motor 13 Nokia 14 Starbucks 15 Target 16 BMW 17 Samsung Electronics 18 Virgin Group 19 Intel 20 Amazon 21 Boeing 22 Dell 23 Genentech 24 eBay 25 Cisco Systems
By creating perceived differences among products through branding and by developing a loyal consumer franchise, marketers create…
…value that can translate to financial profits for the firm.
Who said:
My father, John Stuart, has famously said, “If this company were to split up I would give you the property, plant and equipment and I would take the brands and the trademarks… and I would fare better than you.”
John Stuart, CEO of Quaker Oats
Roles the Brands Play (Customer Side)
Identification of source of product
Assignments of responsibility to product maker
Risk reducer
Search cost reducer
Promise, Bond, or Pact with maker of product
Symbolic device
Signal of quality
Identification of source of product
Consumers can identify the source or maker of a product.
Assignments of responsibility to product maker
Enables consumers to assign responsibility to a particular manufacturer or distributor.
Risk reducer
Brands can reduce the risks in product decisions which is perceived by consumers and which include Functional Risk, Physical risk, Financial risk, Social risk, Psychological risk, Time risk.
Search cost reducer
From an economic perspective, brands allow consumers to lower the ‘search costs’ for products both internally and externally.
Promise, Bond, or Pact with maker of product
As long as consumers realize advantages and benefits from purchasing the brand, and as long as they derive satisfaction from product consumption, they are likely to continue to buy it.
Symbolic device
Brands can serve as symbolic devices, allowing consumers to project their self-image. Certain brands are associated with certain types of people and thus reflect different value or traits.
Signal of quality
Brands can also play a significant role in signaling certain product characteristics to consumers.
Roles the Brands Play (Manufacturer Side)
Means of identification to simplify handling or tracing
Means of legally protecting unique features
Source of competitive advantage
Signal of quality level to satisfied customers
Means of endowing products with unique associations
Source of financial returns
Means of identification to simplify handling or tracing
Brands serve an identification purpose, to simplify product handling or tracing. Brands help to organize inventory and accounting records.
Means of legally protecting unique features
The brand also offers the firm legal protection for unique features or aspects of the product.
A brand can retain intellectual property rights, giving legal title to the brand owner.
The brand name can be protected through patents.
Packaging can be protected through copyrights and designs.
Source of competitive advantage
Although manufacturing processes and product designs may be easily duplicated, lasting impressions in the minds of individuals and organizations from years of marketing activity and product experience may not be so easily reproduced.
Signal of quality level to satisfied customers
Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again. This brand loyalty provides predictability and security of demand for the firm and creates barriers of entry that make it difficult for other firms to enter the market.
Source of financial returns
Most of the value of a firm lies in intangible assets & goodwill. As much as 70% of intangible assets are supplied by brands.
What risks might consumers perceive in buying and consuming a product. (These risks may be reduced by brands.)
Functional Risk
Physical Risk
Financial Risk
Social Risk
Psychological Risk
Time Risk
Functional Risk
The product does not perform up to expectations.
“Search goods”, “experience goods” & “credence goods”.
Physical Risk
The product poses a threat to the physical well-being or health of the user or others.
Financial Risk
Social Risk
Psychological Risk
Time Risk
The product is not worth the price paid.
Social Risk
The product results in embarrassment from others.
Psychological Risk
The product affects the mental well-being of the user.
Time Risk
The failure of the product results in an opportunity cost of finding another satisfactory product.
credence goods
impossible to assess the quality of the goods–you have to believe the seller that it will deliver
To firms, brands represent…
…enormously valuable pieces of legal property, capable of influencing consumer behavior, being bought and sold, and providing the security of sustained future revenues.
