branding and positioning
DESCRIPTION
Branding and Positioning. Branding Strategy. Involves selecting the right combination of name, symbol, term, or design that identifies a product Brands have two parts Brand name – words, letters, and numbers that can be spoken Brand mark – symbols, figures, or a design - PowerPoint PPT PresentationTRANSCRIPT
7C H A P T E R
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Branding and
Positioning
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Involves selecting the right combination of name, symbol, term, or design that identifies a product
Brands have two parts Brand name – words, letters, and numbers that can be
spoken Brand mark – symbols, figures, or a design
Critical to product identification and the key factor in differentiating a product from its competition
Makes it easier for customers to find and buy products
Firms must protect brand names and brand marks from trademark infringement by other firms
Branding Strategy
2
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Where can I find information quickly? Where can I get a quick meal and make my
kids happy? Where can I buy everything I need, all at
decent prices? Where can I get the best deal on car
insurance? How do I find a value-priced hotel in midtown
Manhattan?
Good Brands Answer Questions for Customers
3
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Consider the notion that a truly effective brand is one that succinctly captures the product offering in a way
that answers a question in the customer’s mind. Now, consider
these brands (or choose your own): Coca-Cola, Disney, Marlboro,
American Express, and Ford. What questions do these brands answer?
Why are these effective brands?
4
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Potential Brand Attributes(Exhibit 7.1)
5
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Corporate Branding Equally as important as product-related branding Aimed at a variety of stakeholders Designed to build and enhance the firm’s reputation
Basic Branding Decisions Manufacturer vs. private-label brands Individual vs. family branding
Strategic Brand Alliances Cobranding Brand licensing
Brand Value Brand loyalty Brand equity
Packaging and Labeling
Strategic Issues in Branding
6
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Strongest and Weakest U.S. Corporate Reputations (Exhibit 7.2)
7
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Product Identification Comparison Shopping Shopping Efficiency Risk Reduction Product Acceptance Enhanced Self-Image Enhanced Product Loyalty
Advantages of Branding
8
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Manufacturer vs. Private-Label Brands Private-label brands are owned by the merchants that
sell them (Gap, Craftsman, Sam’s Choice) Private-label brands are more profitable for the retailer Manufacturer brands have built-in demand
Individual vs. Family Branding Individual branding – when a firm gives each of its
product offerings a different brand name Family branding – when a firm uses the same name or
part of the brand name on every product
Basic Branding Decisions
9
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Manufacturer (Name) Brands versus Private-Label Brands (Exhibit 7.3)
10
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Cobranding The use of two or more brands on one product Leverages the image and reputation of multiple
brands to create distinctive differentiation
Brand Licensing A contractual agreement where a company permits an
organization to use its brand on non-competing products in exchange for a licensing fee
Licensed brands typically have instant recognition among consumers
Strategic Brand Alliances
11
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Brand Loyalty A customer-centric view of brand value A positive attitude toward a brand that causes
customers to have a consistent preference for the brand
Three degrees: Brand recognition Brand preference Brand insistence
Brand Equity A firm-centric view of brand value The marketing and financial value associated with a
brand’s position in the marketplace
Brand Value
12
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The World’s Twenty-Five Most Valuable Brands (Exhibit 7.4)
13
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Compare the corporate reputation scores in Exhibit 7.2 with the brand valuations in Exhibit 7.4. Why does
Apple sit at the top of both lists? How has the company used good branding and positioning strategy to achieve
this result? How is it that Wells Fargo can have a very high brand valuation, but a very low corporate reputation
score?
14
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Goes hand-in-hand with branding in developing a product, its benefits, its differentiation, and its image
Includes issues such as color, shape, size, convenience
Often used to reposition the product or give it new and improved features
Vital to helping customers make proper product selections
Can have important environmental and legal consequences
Packaging and Labeling
15
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Differentiation Creating differences in the firm’s product offering that
set it apart from competing offerings
Positioning Creating a mental image of the product offering and
its differentiating features in the minds of the target market
Relative Position A product’s position vis-à-vis the competition Addressed through two tools
Perceptual mapping Strategy canvas
Differentiation and Positioning
16
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Hypothetical Perceptual Map of the Automotive Market (Exhibit 7.5)
17
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Hypothetical Strategy Canvas for the Book Retailing Market (Exhibit 7.6)
18
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Branding is the most important tool of differentiation.
Other important bases for differentiation Product Descriptors (see Exhibit 7.7)
Product features – factual descriptors of the product and its characteristics
Advantages – performance characteristics of how the product behaves
Benefits – positive outcomes or need satisfaction Customer Support Services
May be the best way to overcome commoditization
Bases for Differentiation
19
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Using Product Descriptors as a Basis for Differentiation (Exhibit 7.7)
20
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Look back at the Top 10 brands in Exhibit 7.4. What bases do these
brands use for differentiation? What strategies do they use to
create a relative position in their respective markets? Why do these brands hold so much
value?
21
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Strengthen the Current Position Constantly monitor customer perceptions, needs, and
wants Raise the bar of customer expectations
Repositioning Often requires a fundamental change in one or more
marketing program elements
Positioning Strategies
22
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The product life cycle is a useful tool for addressing brand and product strategy over time.
Limitations of the product life cycle Most new products never get past development Most successful products never die Life cycles really refer to industries, not products or
brands The length of each stage depends on the actions of
other firms
The product life cycle forces managers to consider the future of their industry and their brand.
Managing Brands over Time
23
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Stages of the Product Life Cycle(Exhibit 7.8)
24
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Strategic Considerations During the Product Life Cycle (Exhibit 7.9)
25
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
No sales revenue during this stage Components of the product concept
An understanding of desired uses and benefits A description of the product The potential for creating a complete product line An analysis of the feasibility of the product concept
Customer needs should be discerned before developing marketing strategy
Test marketing is conducted in this stage.
The Product Life Cycle:Development Stage
26
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Begins when development is complete and ends when customers widely accept the product
Marketing strategy goals during this stage Attract customers by raising awareness and interest Induce customers to try and buy Engage in customer education activities Strengthen or expand channel and supply chain
relationships Build on availability and visibility through trade
promotion Set pricing objectives
The Product Life Cycle:Introduction Stage
27
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Be ready for sustained sales increases and the rapid increase in profitability early in the growth stage
Length depends on nature of product and competitive reactions
Two main priorities during growth Establish a strong, defensible marketing position Achieve financial objectives that repay investment
Marketing strategy shifts from customer acquisition to customer retention and building brand loyalty.
The Product Life Cycle:Growth Stage
28
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Leverage the product’s perceived differential advantages
Establish a clear brand identity Create unique positioning Maintain control over product quality Maximize availability of the product Maintain or enhance the product’s profitability to
partners Find the ideal balance between price and demand Keep an eye focused on the competition
Marketing Strategy Goals During the Growth Stage
29
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Typically, no more firms will enter the market Still an opportunity for new product features
and variations Typically the longest stage in the product life
cycle
The Product Life Cycle:Maturity Stage
30
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Four general goals during the maturity stage Generate cash flow Hold market share Steal market share Increase share of customer
Four strategic options to achieve these goals Develop a new product image Find and attract new users to the product Discover new applications and uses for the product Apply new technology to the product
Goals and Strategies During the Maturity Stage
31
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Two options during the decline stage Attempt to postpone the decline Accept the inevitability of decline
Harvesting Divesting
Factors to be considered during this stage Market segment potential The market position of the product The firm’s price and cost structure The rate of market deterioration
The Product Life Cycle:Decline Stage
32