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Chapter 1

Chapter 1 Brands and Brand Management.docx

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Department
Marketing
Course
MKT 510
Professor
Ida Berger
Semester
Fall

Description
MKT510 Innovations In Marketing CHAPTER 1 Brands and Brand Management WHAT IS A BRAND  Brand: as something that has actually created a certain amount of awareness, reputation, prominence, and so on in the marketplace Brand Elements  Name, logo, symbol, package design, or other characteristic that identifies a product and distinguishes it from others  Brand elements: different components of a brand that identify and differentiate it o Brand elements like logos and symbols also can be based on people, place, things, and abstract images  Creating a brand, marketers have choices about number and nature of brand elements they use to identify their products Brands versus Products  Product: anything we can offer to a market for attention, acquisition, use, or consumption that might satisfy need or want o Product may be physical good, service, retail outlet, person, organization, place, or idea like a political or social cause  Five levels of meaning for a product: 1. Core benefit level: fundamental need or want that customers satisfy by consuming product or service 2. Generic product level: basic version of product containing only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features 3. Expected product level: set of attributes or characteristics that buyers normally expect and agree to when they purchase a product 4. Augmented product level: additional product attributes, benefits, or related services that distinguish the product from competitors 5. Potential product level: all augmentations and transformations that product might ultimately undergo in the future  Competition is what companies add to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value  Brand is more than a product, because it can have dimensions that differentiate it in some way from other products designed to satisfy same need o Rational and tangible – related to product performance of brand – or more symbolic, emotional, and intangible – related to what the brand represents  Brands carry a number of different types of associations, and marketers must account for all of them in making marketing decision WHY DO BRANDS MATTER? Customers  Brands take on special meaning to customers because past experiences with product and its marketing program, consumers find which brands satisfy their needs and which ones do not  Customers offer trust and loyalty with implicit understanding that brand will behave in certain ways and provide utility through consistent product performance and appropriate pricing, promotion, and distribution programs and actions  Brands serve as symbolic device, allowing consumers to project their self-image  Researchers classified products and associated attributes or benefits into three major categories: o Search goods: consumers evaluate product attributes by visual inspection o Experience goods: consumers asses product attributes by trial and experience o Credence goods: customers may rarely learn product attributes  Consumers perceive different types of risk in buying and consuming: o Functional risk: product does not perform up to expectations o Physical risk: product poses threat to physical well-being or health of user or others o Financial risk: product is not worth price paid o Social risk: product results in embarrassment of others o Psychological risk: product affects mental well-being of user o Time risk: failure of product results in opportunity cost of finding another satisfactory product  Special meaning that brands take on can change perceptions and experiences with a product MKT510 Innovations In Marketing Firms  Brands serve as identification purpose, to simplify product handling or tracing; helps organize inventory and accounting records; offers firm legal protection for unique features or aspects of product; retain intellectual property rights, giving legal title to brand owner; protected through registered trademarks  Brand loyalty provides predictability and security of demand for firm and creates barriers of entry that make it difficult for other firms to enter market  Strong brands result in better earnings and profit performance for firms, which create greater value for shareholders CAN ANYTHING BE BRANDED?  Brand is something that resides in minds of consumers; reflects perceptions and idiosyncrasies of consumers  Marketers must provide label for product and provide meaning for the brand  Key to branding is that consumers perceive differences among brands in product category  Marketers can benefit from branding whenever consumers are in a choice situation Physical Goods  Physical goods associated with brands and include many of best-known and highly regarded consumer products  Business-to-business branding creates positive image and reputation for company as a whole o Creating goodwill with business customers thought to lead to greater selling opportunities and more profitable relationships o Strong business-to-business brand provides strong competitive advantage Services  Branding with services vary in quality and address intangibility and variability problems o Brands help identify and provide meaning to different services provided by firm  Corporate credibility is key in terms of expertise, trustworthiness, and likability  Variability is an issue in professional services because harder to standardize services of consulting firm than those of typical consumer services firm Retailers and Distributors  Brands generate consumer interest, patronage, and loyalty in store, as consumers learn to expect certain brands and products  Products bearing store brands or private label brands offer another way for retailers to increase customer loyalty and generate higher margins and profits Online Products and Services  Critical to create unique aspect of brand on some dimension that is important to consumers, such as convenience, price, or variety and needs to perform satisfactorily in other areas, such as customer service, credibility, and personality Pe
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