MGTC21 Chapter 1 Notes.docx

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University of Toronto Scarborough
Management (MGM)
Bill Mc Conkey

MGTC21: Chapter 1 Notes What is a Brand? - comes from the old Norse word brandr which means to burn - is a “name, term, sign, symbol or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. - Some brand name strategies are using them for all products, individual brand names like P&G, and some retailers create their own brand like Sam’s Club - Product is anything we can offer to market for attention, acquisition, use or consumption that might satisfy a need or want - 5 levels of meaning for a product o Core benefit level – is the fundamental need or want that consumers satisfy by consuming o Generic product level – basic version of product containing only those atricutes necessary for function and no distinguishing features o Expected product level – set of attribute that buys normally expect and agree to when they purchase a product o Augmented product level – incldes additional product attributes, benefits or related services that distinguish the product from competitors o Potential product level – includes all the augmentations and transformations that a product might ultimately undergo in the future - Harvard’s Ted Levitt argued that “new competition not between stuff produced but what they add in form of packaging, services, advertising, and other things people value - 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. - Distinguish brands by o Competitive advantages with product performance o Through non-product related means like Coke who create a fun image - Brands carry a number of different types of associations Why Do Brands Matter? - consumers o to them brands provide source or maker of product and assign responsibility to them o take on special meaning to consumers because of past experience or marketing program o simplicfication of their product decisions o search cost reducer, symbolic, signal of quality, promise o Search goods – ex. Grocery. Consumers can evaluate product by sturdiness, size, colour, design o Experience goods – cannot be assessed so easily by inspection. Need actual product trial and experience to learn quality, safety etc. ex. Tires o Credence Goods – may rarely learn product attributes because of difficulty ex. Insurance converage - Firms o Provide a number of valuable function to their firms like identification, organize inventory, legal protection, retain intellectual property rights. o To firms brands represent enormously valuable pieces of legal property, capable of influcencing consumer behavior, being bought and sold, and providing the security of future earnings o Most value of firm is in intangible assets and goodwill. As much of 70% of intangibles can be supplied by brand - Can everything be branded? o A brand is a perceptual entity rooted in reality but reflects perceptions and perhaps the idiosyncrasies of consumers o To brand a product it is necessary to teach consumers “who” the product is by giving a name and using other brand elements to help identify. “a Label for the product” o “Key to branding is that consumers perceive differences among brands in a product category” o commodity is a product so basic it cannot be physically differentiated in minds of consuemrs like soap, beer. These products have been branded as well. o Technology companies have struggled with branding o Challenges in marketing services is because less tangible and likely to vary in quality depending on particular person or people. o Reatilaers can introduc
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