MKT 302 Lecture 2 - Foundational Considerations

List Walmart's core competence, strategic asset, and product

-Core competence: superior logistics know-how -Strategic asset: low costs for Walmart -Product (benefit): low prices to customers

What was Invisalign's goal and 2 objectives of achieving it?

-Goal: create value for our shareholders and increase revenue -Objectives: 1. Create awareness of Invisalign among target customers and generate demand 2. Create awareness among dental professionals so they can promote the system to patients

Why do companies choose to lower the cost in regards to brand extensions? (2 reasons)

-They need to create awareness of a new product, but not the brand -To reduce the production/packaging/market research costs

List 3M's core competence, strategic asset, and product

-core competence: organizational culture that fosters innovation -strategic asset: portfolio of patents -product (benefit): novel products

What are two company examples of the negative effects of setting overly ambitious goals?

1. Cyberpunk 2007 - video game with graphics issues 2. Theranos - Holmes convicted of fraud for falsifying the abilities of a blood testing device that was supposedly cheaper and more accessible

What are the 5 attributes of beneficial goals?

1. Prioritized 2. Quantified 3. Includes a temporal benchmark 4. Realistic 5. Internally consistent

What does Amazon.com's research on consumer reviews suggest?

1. Ratings correlate poorly with consumer reports 2. User ratings don't predict resale value 3. Ratings are influenced by price and brand image

What are 5 reasons we see so many brand extensions?

1. So consumers can alleviate boredom but stay in a brand's family 2. The billboard effect 3. Pricing breadth 4. Lower cost 5. Reduce the risk of a product failure

What are the 3 questions asked when discussing foundational considerations?

1. What is our brand architecture (branding strategy)? 2. What, if anything, is our core competence? 3. What is our core business?

What are the four foundational questions that marketing managers have to ask?

1. Who are we? 2. What are we uniquely good at? 3. What business are we in? 4. What are we trying to achieve?

What are 3 kinds of brand extensions?

1. product line extensions 2. category extensions 3. introducing "branded variants"

What are 2 caveats of core competence?

1. some strategic assets are a consequence of core competencies while some are not 2. some companies do not have a core competence, or have one and don't realize it

What is the billboard effect?

A phenomenon that results in getting more visibility on your property, more visitors to your website, and more direct bookings since you are present in several locations

What is core competence?

A skill that a company uniquely possesses

What is meant by pricing breadth?

An indicator of how well a product/stock will do relative to others that are declining

How can a goal be prioritized

An ultimate goal is driven by a series of smaller behavioral goal

How might BMW exhibit hybrid branding?

BMW owns Mini Cooper, which is a more fun, low-class car compared to rather refined BMWs

What is the proposed effect of consumers being able to read reviews online?

Brands matter less

What is an example of a clothing brand demonstrating a branded variant?

Burberry offers a cheaper version of a trench coat at Saks than the one sold in their store

How might 3M exhibit distinct, hybrid, and umbrella branding?

By adjusting the size and presence of the 3M logo on each product

How did Bezos convince investors to not expect short- or medium-term profits?

By retraining the investors to replace their expectation for short-term profits with vision and growth

How did Cadillac's brand extension cause a dilution of the brand?

Cadillac made an inexpensive car and its consumers got upset for making Cadillacs attainable to other people with lower economic status

Is Harley Davidson's perfume for women a brand extension, product line extension, or category extension?

Category extension

How did M&M's use product line extensions to drive engagement?

Consumers had to vote on their favorite new flavor

Why did the Michael Kors x Versace acquisition generate outrage on social media?

Consumers of Versace believed that Michael Kors would turn the more refined Versace into a midbrow brand

What is the myopic tendency of identifying one's core business?

Defining a business based on products rather than consumer benefits, e.g., a newspaper vs. information

What is a potential effect of producing Red Enameled Ferrari cufflinks?

Diluting the brand equity by stretching Ferrari's offerings to people that otherwise wouldn't afford the car

What is a House of Brands?

Distinct branding

How does Doritos exhibit a product line extension?

Doritos is the parent brand, and under it are other flavors of Doritos such as Cool Ranch and Hot Flame

Who does Netflix compete with?

Every other activity a consumer could do to relax, unwind, hangout, and connect

Why might HBO users be upset about the change from HBO Max to just HBO?

HBO now includes more sitcoms instead of just sophisticated media, which is what consumers originally paid for

How does Flex Seal represent umbrella branding?

It has many different applications, all designed to stick two things together

How does Crest represent umbrella branding?

It produces a family of products all in favor of a healthy mouth

What is the advantage of umbrella branding?

Once consumers trust the brand, the company can extend the brand in various ways

What are two examples of companies exhibiting category extensions?

Swiss Army Knife and Amazon.com: Earth's Biggest Bookstore

How might Sony exhibit hybrid branding?

The Sony symbol is unnoticeable on a Walkman but very large on a Playstation

Why might some people negatively review products they have never purchased?

They are fans of the company and want to protect its branding

What does the invisible gorilla teach us about goals?

They can overly focus attention

How do branded variants of clothing brands accommodate customers with different WTPs (willingness to pay)?

They offer cheaper versions of the same product at lower-status outlets

Why did Wells Fargo employees open customer accounts without asking?

They set an overly ambitious goal which stimulated dishonesty within the company

Why might brands like Dunkin' Donuts and Radio Shack switch their names to just Dunkin' and The Shack, respectively?

To tell consumers they sell more than just the product listed in their name

Why can't Nike successfully make a chocolate bar?

Umbrella brands are not very flexible and damage from product failures can be quite high

What is distinct branding?

When firms offer several products with distinct meanings, brand names, and logos, targeted to different audiences

What is an umbrella brand?

a family of products that all deliver the same higher-order benefit

What is a product line extension?

adding additional products to an existing product line in order to compete more broadly in the industry

What kind of service is distinct branding the most common?

consumer packaged goods (CPG)

What kind of branding does Unilever exhibit? products: Axe deodorant, Dove body wash, Klondike bars - U is small and on the back

distinct branding

What does hybrid branding combine?

distinct branding and umbrella branding

What is brand extension?

extending an existing brand name to new product categories

The efficiency/simplicity is ____ in umbrella branding while the flexibility is ____.

high; low

What does having a core competence do?

it generates strategic assets, which in turn generate benefits for consumers (products)

The efficiency/simplicity is ____ in distinct branding while the flexibility is _____.

low; high

What is a category extension?

marketers apply the parent brand to enter a different product category from the one it currently serves

What are branded variants?

specific brand lines supplied to specific retailers or distribution channels

Who does Domino's compete with?

technology, and anyone who sells or promotes or delivers food

What does brand architecture describe?

the relationship between different brands within a company's portfolio

What is the purpose of establishing goals for a company?

to simplify decision making and a performance benchmark

What is a Branded House?

umbrella branding

What kind of branding does Nike exhibit? products: shoes, shirts, baseball mitts - nike symbol on the front

umbrella branding