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Chapter 1

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Department
Marketing
Course
MKT 510
Professor
Ida Berger
Semester
Fall

Description
Chapter 1 —Brands and Brand Management What is a brand?  Brand: a name, term, sign, symbol or design, or a combination of them, intended to identify the goods and services if one seller or group of sellers and to differentiate them from those of competition  Technically speaking—whenever a marketer creates a name, logo, or symbol of a new product he/she has created a brand  Something that has actually created a certain amount if awareness, reputation, prominence etc  Brand elements: components of a brand that identify and differentiate it o Name o Symbol o Colour o Design  Capital B Brand concept o Refers to the premium of recognizable names as compared to its generic equivalent  Ex. Coca cola has 72% premium over PC brand cola Brands vs. products  Product: anything we can offer to a market for attention, acquisition, use and consumption that might satisfy a need or want o Physical good o A person o Idea o Service o Organization o Retail outlet o Place  5 levels of meaning for a product o Core benefit level: fundamental need or want that consumers satisfy by consuming the product or service o Generic product level: stripped down, no frills version of the product that adequately performs the product function o Expected product level: set of attributes or characteristics that buyers normally expect and agree to when they purchase a product o Augmented product level: additional product attributes, benefits, or related services that distinguish the product from competitors o Potential product level: all the augmentations and transformations that a product might ultimately undergo in the future  A brand is therefore more than a product, because it can have dimensions that differentiate it in some way from other products designed to satisfy the same need o Rational and tangible—related to product performance of the brand o Symbolic and intangible—related to what the brand represents Why do brands matter? Consumers Manufacturers Identification of source of product Means of identification to simplify handling or tracing Assignment of responsibility to product makerMeans of legally protecting unique features Risk reducer Signal of quality level to satisfied customers Search cost reducer Means of endowing products with unique associations Promise, bond or pact with maker of a productSource of competitive advantage Symbolic device Source of financial returns Signal of quality  Search goods: products that can be evaluated by visual inspection (groceries)  Experience goods: product trial and experience is necessary (automobile tires)  Credence goods: rarely learn product attributes (life insurance)  Types of risks o Functional risks—the product does not perform up to expectations o Physical risks—the product poses a threat to the physical well-being or health of the user or others o Financial risks—the product is not worth the price paid o Social risks—the product results in embarrassment from others o Psychological risks—the product affect the mental wellbeing of the user o Time risks—the failure of the product results in an opportunity cost of finding another satisfactory product Challenges in branding  Savvy customers  Fragmenting media coverage  More complex brand families and portfolios  Eroding traditional media effectiveness  Maturing markets  Emerging new communication option  More sophisticated and increasing  Increasing promotional expenditures competition  Decreasing advertising expenditures  Difficultly in differentiating  Increase cost of product introduction and  Decreasing brand loyalty in many categories support  Growth of private labels  Short term performance orientation  Increasing trade power  Increasing job turnover Can everything be branded?  A brand is something that resides in the minds of consumers o Perceptual entity rooted in reality, but it reflects the perceptions and perhaps even the idiosyncrasies of consumers  The key to branding is that consumers perceive differences among brands in a product category  Commodity: a product so basic that it cannot be physically differentiated in the mind of the consumer Physical goods  As more and more different kinds of products are sold or promoted directly to consumers, the adoption of modern marketing practises and branding has spread further  Brands have begun to emerge among certain types of physical goods that never supported brands before  B2B products o Creates a positive image and reputation for the company as a whole o Creates goodwill o Creates valuable reassurance o Strong competitive advantages o Very complex o Challenge for some: de-commoditizing themselves to create product and service differences  High tech products o Marketing skills are playing an increasingly important role o Speed and brevity of technology life cycles cause unique branding challenges o Trust is crucial in the branding o Mass market advertising Services  Pervasiveness of service branding and its sophistication have accelerated in the past decade  Less tangible than products and more likely to vary in quality, depending on the particular person or people providing them  Way to address intangibility and variability problems  Identify and provide meaning to the different services provided by the firm  Competitive weapon  Effective way to signal to consumers that the firm has designed a particular service offering that is special and deserving of its name Retailers and distributors  Can generate consumer interest, patronage, and loyalty in a store  Create an image and establish positioning  Can create own brand image by attaching unique associations to the quality of their service, product assortment and merchandising, pricing and credit policy  Can introduce their own brands (store brands/private labels) o Another way the retailer to increase customer loyalty and generate higher margins of profits Online products and services  Critical to create unique aspects of the brand on some dimension important to consumers o Convenience o
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