MKT 3000 - CH 11

ELEMENTS OF A BRAND

- Brand Name - URLs (domain names) - Logos & Symbols - Characters - Slogans - Jingles/Sounds

VALUE OF BRANDING FOR THE CUSTOMER

- FACILITATE PURCHASES - ESTABLISH LOYALTY - BRANDS PROTECT FROM COMPETITION AND PRICE COMPETITION - ASSETS - AFFECT MARKET VALUE

So why do firms change their product mix's breadth or depth?

- Increase Depth: firms might add items to address changing consumer preferences or to preempt competitors while boosting sales. - Decrease Depth: from time to time, it is also necessary to delete products within a product line to realign the firm's resources. - Decrease Breadth: sometimes it is necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities. - Increase Breadth: firms often add new product lines to capture new or evolving markets and increase sales

To prevent the potentially negative consequences of brand extensions, firms consider the following:

- Marketers should evaluate the fit between the product class of the core brand and that of the extension. - Firms should evaluate consumer perceptions of the attributes of the core brand and seek out similar attributes for the extension because brand-specific associations are very important for extensions. - Firms should refrain from extending the brand name to too many products and product categories to avoid diluting the brand and damaging brand equity. - Firms should consider whether the brand extension will be distanced from the core brand, especially if the firm wants to use some but not all of the existing brand associations.

- BRAND EXTENSION - LINE EXTENSION

- Refers to the use of the same brand name in a different product line; it is an increase in the product mix's breadth. - It is the use of the same brand name within the same product line and represents an increase in a product line's depth.

ADVANTAGES to using the same brand name for new products

- The brand name is already well established, the firm can spend less in developing consumer brand awareness and brand associations for the new product. - If either the original brand or the brand extension has strong consumer acceptance, that perception will carry over to the other product. - When brand extensions are used for complementary products, a synergy exists between the two products that can increase overall sales.

BREADTH

A firm's product mix breadth represents a count of the number of product lines offered by the firm. Ex.: BMW - BMW, Mini, Rolls-Royce, Motorrad.

PRODUCT LINES

Are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services. Ex.: BMW's product lines (brands) include BMW, cars targeted at middle-aged professionals; the MINI, cars targeted to the young adult market; Rolls-Royce, cars targeted at the ultra-wealthy market; and BMW Motorrad, its motorcycle line.

MANUFACTURER BRANDS (also known as NATIONAL BRANDS) The majority of the brands marketed in the United States are manufacturer brands. Ex.: Nike, Coca-Cola, KitchenAid, and Sony.

Are owned and managed by the manufacturer. With these brands, the manufacturer develops the merchandise, produces it to ensure consistent quality, and invests in a marketing program to establish an appealing brand image. By owning their brands, manufacturers retain more control over their marketing strategy, are able to choose the appropriate market segments and positioning for the brand, and can build the brand and thereby create their own brand equity.

CONSUMER PRODUCTS (TYPES OF GOODS)

Are products and services used by people for their personal use. Marketers further classify consumer products by the way they are used and how they are purchased.

RETAILER/STORE BRANDS (also called PRIVATE-LABEL BRANDS)

Are products developed by retailers. In some cases, retailers manufacture their own products, whereas in other cases they develop the design and specifications for their retailer/store brands and then contract with manufacturers to produce those products. Some national brand manufacturers work with retailers to develop a special version of their standard merchandise offering to be sold exclusively by the retailer.

SHOPPING PRODUCTS/SERVICES

Are products or services for which consumers will spend a fair amount of time comparing alternatives, such as furniture, apparel, fragrances, appliances, and travel alternatives.

UNSOUGHT PRODUCTS/SERVICES

Are products or services that consumers either do not normally think of buying or do not know about.

SPECIALTY PRODUCTS/SERVICES

Are those for which customers express such a strong preference that they will expend considerable effort to search for the best suppliers.

CONVENIENCE PRODUCTS/SERVICES

Are those products or services for which the consumer is not willing to expend any effort to evaluate prior to purchase.

- FACILITATE PURCHASES

Brands are often easily recognized by consumers, and because they signify a certain quality level and contain familiar attributes, brands help consumers make quick decisions, especially about their purchases.

- ESTABLISH LOYALTY

Consumers learn to trust certain brands. They know, for example, that they wouldn't consider switching brands and, in some cases, feel a strong affinity to certain brands.

- ASSETS

For firms, brands are also assets that can be legally protected through trademarks and copyrights and thus constitute a unique form of ownership. Firms sometimes have to fight to ensure their brand names are not being used, directly or indirectly, by others.

- AFFECT MARKET VALUE

Having well-known brands can have a direct impact on the company's bottom line. The value of a company is its overall monetary worth, comprising a vast number of assets. When the brand loses value, it also threatens other assets.

ASSOCIATED SERVICES (AUGMENTED PRODUCT)

It includes the nonphysical aspects of the product, such as product warranties, financing, product support, and after-sale service. The amount of associated services also varies with the product.

CO-BRANDING

It is the practice of marketing two or more brands together on the same package, promotion, or store. Co-branding can enhance consumers' perceptions of product quality by signaling unobservable product quality through links between the firm's brand and a well-known quality brand. Co-branding strategy is designed to appeal to diverse market segments and extend the hours in which each restaurant attracts customers. RISKS: customers of each of the brands turn out to be vastly different; disputes or conflicts of interest between the co-brands.

BRAND AWARENESS

Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to consumers.

BRAND LOYALTY

Occurs when a consumer buys the same brand's product or service repeatedly over time rather than buy from multiple suppliers within the same category.19 Therefore, brand-loyal customers are an important source of value for firms.

BRAND DILUTION

Occurs when the brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold. Ex.: Cheetos Lip Palm, Lifesavers Soda, Colgate Kitchen Entrees, Bic's disposable underwear.

DEPTH

Product line depth, in contrast, equals the number of products within a product line. Within BMW's Rolls-Royce brand, for example, it offers Phantom, Wraith, and Ghost models.

BRAND REPOSITIONING or REBRANDING

Refers to a strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences. Although repositioning can improve the brand's fit with its target segment or boost the vitality of old brands, it is not without costs and risks.

BRAND ASSOCIATIONS

Reflect the mental and emotional links that consumers make between a brand and its key product attributes, such as a logo and its color, slogan, or famous personality. These brand associations often result from a firm's advertising and promotional efforts.

- BRANDS PROTECT FROM COMPETITION AND PRICE COMPETITION

Strong brands are somewhat protected from competition from other firms and price competition. Because such brands are more established in the market and have a more loyal customer base, neither competitive pressures on price nor retail-level competition is as threatening to the firm.

PRODUCT MIX

The complete set of all products and services offered by a firm. The product mix reflects the breadth and depth of the company's product lines.

PERCEIVED VALUE

The perceived value of a brand is the relationship between a product's or service's benefits and its cost. Customers usually determine the offering's value in relationship to that of its close competitors. If they believe a less expensive brand is about the same quality as a premium brand, the perceived value of that cheaper choice is high.

BRAND EQUITY

The set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service. Brands are assets a firm can build, manage, and harness over time to increase its revenue, profitability, and overall value. Marketing expenditures allocated carefully can result in greater brand recognition, awareness, perceived value, and consumer loyalty for the brand, which all enhance the brand's overall equity.

BRAND OWNERSHIP

There are two basic brand ownership strategies: 1. Manufacturer Brands and 2. Retailer/Store Brands.