Product 2 Flashcards
Definition: Brand
Brand = Important asset that can outlast specific products Brands = useful way for customers to summarize a specific set of features, benefits, services, and experiences delivered
Definition: Brand Equity
Brand equity = the differential effect that the brand name has on the customer response to the product or its marketing all else being equal or similar.
What is brand equity?
Brand Equity = Customer Rating (with brand name) –Customer Rating (no brand name of equal or similar quality)
Higher brand equity = Higher WTP and Higher Purchase Probability
Brand equity can capture value for satisfying psychological needs.
Lessons from Blind Taste Test Activity
Relative prices reflect what the national brand manufacturer/retail store perceive the brand equity of the national brand to be.
Price (Nat Brand) – Price (House Brand) = (Difference in Objective Quality between natbrand and house brand) + (Brand equity of natbrand relative to house brand)
Blind Taste Test Activity
Activity = Marketing research to measure consumer quality perception and willingness-to-pay (WTP) of competing brands using experiments.
Brand Sponsorship: 4 Strategies
- Manufacturer’s Brand (National Brand)
- Store brand, Private brand or House brand
- Brand Licensing
- Co-Branding
- Store brand, Private brand or House brand
Used by retailers
Typically have higher margins (less promotion needed)
- Brand Licensing
License names created by others, celebrities, movie or book characters
Allows other firms to use them based on a negotiated fee (royalty)
- Co-Branding
Use two established brand names on the same product
Brand Licensing + Co-Branding
These 2 strategies help a product gain credibility quickly, but can be dangerous if the licensed brand or partner brand suffers bad publicity (brand dilution).
Store Brands & Private Labels: Examples
Ex. Whole Foods and Safeway
Note: Looks similar and are placed together with Manufacturer’s brand
Ex. Kirkland is Costco’s Private Brand
Brand Licensing: Examples (toys, entertainment, apparel)
Ex. NFL, NHL t-shirts
Ex. Dora the Explorer toothpaste
Ex. Spiderman lunchboxes
Co-Branding: Examples
Ex. Apple Watch Hermes
Ex. Apple Watch Nike+
Ex. Yeezy shoes - collaboration between Adidas and Kanye West
Brand Development Strategies
Product Category + Brand
Existing + Existing: Line extension
New + Existing: Brand extension
Key Decision when Making Brand Development Strategies
Key Decision: Should company leverage on parent/flagship brandor protect it from possible brand dilution
Line Extensions: Examples
Ex. Cheerios -> Honey Nut Cheerios, MultiGrain Cheerios, etc.
Ex. Coke -> Different flavoured cokes (vanilla, orange, etc.)
Line Extensions: Pros & Cons
Advantages:
- Lower cost strategy to communicate the value of new products (to meet variety of tastes, grab retail shelf space) - Uses same brand of flagship product
Risks:
- Cannibalization within brand product line.
- Brand dilution.
- Flagship brand may look like just another one of the products, or may be hurt if line extension is not well-perceived (e.g., Vanilla Coke)
Brand Extension: Amazon
Ex. Amazon -> Amazon Prime (Internet video service), Amazon Fresh (grocery delivery service), Amazon Basics (offers everyday items like batteries and cables)
Bad Line Extensions: Examples
- Ex. Celery flavored Jell-O
- Ex. Green Heinz ketchup
Definition: Product Mix vs. Product Line
Product mix is all products and services offered by a firm.
Product mix consists of multiple product lines.
Product line is a group of products that are closely related because they:
1) Function in a similar manner
2) Are sold to the same customer groups
3) Are marketed through the same types of outlets or
4) Fall within given price ranges
Product mix “Breadth” is the number of product lines.
Product line length is the number of items in a product line.
Ways to increase product line depth
Line Stretching
Ex. Marriott Rotes -> Ritz-Carlton (Upward stretching)
Ex. Marriott -> Courtyard Marriott (Downward stretching)
Ex. Magic Kingdom -> Epcot, Animal Kingdom (Horizonal stretching)
Line Filling
Ex. First class, Business class, Economy -> First class, Business class, Executive economy (new), Economy
Profit Analysis for Product Line Decisions
Uses the brand/product switching matrix
