Unit: 3Chapter 7: Branding and

Licensing Marketing Principles

2014-2015

State Standard Covered:

• 7. analyze promotional and merchandising tools and types of promotions in marketing and management to optimize revenue.

Learning Targets:

• I CAN….– Explain the concepts of branding and brand

equity.– Identify the types of brands.– Develop an effective brand name.– Describe product licensing and how licenses

goods are merchandised.– Explain the importance of sports sponsorships

and all endorsements. – Explain how companies choose sports

endorsers for their products.

Section 1: Branding

Importance of Branding

• Brand- a name, word or words, symbol, or design that identifies an organization and its products.– Example: Nike Swoosh

(branding Strategy)

• Brand Name- word or words, letters, or numbers representing a brand that can be spoken.

Importance of Branding

• Trade name is the legal name of a company.

– Register name with US Patent and Trademark office in Arlington, Virginia.

• Trademark- a device that legally identifies ownership of a registered brand or trade name.

Branding

• Branding is important to build customer loyalty.– How? Why?

• Brand Personality– New York Yankees- Winning Team– Nike Athletics- “Winning” (athlete endorsements)

• Brand Equity– The value of a brand has beyond its actual functional

benefits.• Developed over years of promoting brand name to

customers.

Steps Establishing Brand Name to Customers:

• Develop as part of a class of products. (Gatorade = sports drink)

• Link product name to its function. (Gatorade helps athletes perform better in athletic events)

• Help consumers think and feel the way you want them to regarding your product. (Gatorade is the best product of choice for athletes)

Steps Establishing Brand Name to Customers

• Sports Teams–Develop

• Yankees are a professional baseball team.

– Link• The Yankees’ fans think positively about the club

and the players.

–Help• Yankees’ fans stick with their team through good

and bad seasons because of the bond they have with the team.

Types of Brands and Strategies

• Manufacturer Brand– Owned by the producer of the product.

–Multi-Product Branding (uses one name for all products)• Nike• Advantage: Strong promotional campaign to

create image for all products.• Brand Extension- brand name for an

improved or new product in the product line.

Types of Brands and Strategies

–Multi-Branding• Each product in a product line has a

distinctive name.– Ex: Proctor & Gamble’s deodorant product line

includes three antiperspirants/deodorants:

• Advantages: each product has its own distinct image. If a product fails, it would not affect the other products produced by the manufacturer. • Disadvantages: creating separate

promotional plans for each product can be very expensive.

Types of Brands and Strategies

– Co-Branding• Comines one or more brands to increase

customer loyalty and sales for each product. – MasterCard and Visa have been co-branded with

airlines, automobile manufacturers and sports organizations.» General Motors and the PGA have co-

sponsored MasterCard

Types of Brands and Strategies

• Intermediary Brand– Carries a name developed by the

wholesaler, retailer, or catalog house.– Intermediaries contract with

manufacturers to make products that are sold under their own private labels.

Types of Brands and Strategies

• Generic Brands– A general product category and does not

carry a company or brand name.

Developing Brand Names

• The brand name should:– Offer a benefit.– Be simple.– Be different and positive.– Reflect an image.– Be previously unregistered.

Developing Brand Names

• Offer a Benefit– Off the customer value.• The sports drink Gatorade was given that

name because it helped the University of Florida football team, the Gators, play better when it was hot. • The team actually become known as the

“second-half” team because of the team’s stamina in the second half of a game. • The sports drink (“ade”) served to help

(sounds like “aid”) the Gators, and so the name “Gatorade” became a well-known name.

Developing Brand Names

• Be Simple– Simple name is more memorable.

Developing Brand Names

• Be Different and Positive– Puma brand has a positive association

as it projects an image of a fast animal in the cat family, such as a cougar or mountain lion.

– Teams names are usually simple and distinctive:

Developing Brand Names

• Reflect an Image– Should say something about the

product.–Wheaties cereal has used athletes on its

packaging and is known as The Breakfast of Champions. The positive association with the sports industry helps to create a distinctive image of Wheaties as the Breakfast of Champions.

Michael Jordan Bruce Jenner Nastia Liukin

Developing Brand Names

• Be Previously Unregistered– Brand name cannot be previously registered with

the U.S. Patent and Trademark Office.• www.uspto.gov to search and see if a name already

exists. • Country Club Industries, a small California company,

wanted to register “Sport Powerace” as a new brand of drinking water. The Coca-Cola Company opposed that registration because it was too similar to its registered brand name sports drink Powerade.

• Government agencies also restrict the use of certain words that may be misleading to consumers. The word heart leads one to think the product is good for their heart.

Developing Brand Names

• Make It Last– Communicates the type of business and

products to customers. – Good brand name and symbol will last

over time. • Nike “swoosh” created in 1971 for $35 by

student of founder Phil Knight. • Design was based on the “wing” of the

goddess Nike, and has represented the company for 44 years,

Goddess Nike

Section 2: Licensing

Licensing and Merchandising

• Licensing- an agreement that gives a company the right to use another’s brand name, patent, or other intellectual property for a royalty or fee.– Licensor- the company or individual

granting the license for a fee in the legally binding contract.

– Licensee- the company or individual paying for the rights to use the licensor’s name or property.

Licensing and Merchandising

• Licensed Products–When you see a sports figure featured

on a box of cereal, or a sport’s team logo on a T-shirt, you know that company is paying a fee to that sports figure (licensor).

– You may see Reebok (licensee) selling its jerseys and hats with the NFL logo.

– Tiger Woods has a licensing agreement with Nike.

Licensing and Merchandising

• The Products– The licensor must be careful to select

products that reflect the image its brand name has in the public eye.

– Company that produces poor-quality merchandise may be damaging to its image.

– Select the right events, leagues, teams, and/or individuals for their products.

Licensing and Merchandising

• Merchandising Licensed Goods– Available through many channels of

distribution.• Department stores, chain stores, league-

sponsored retail outlets, and Internet. • Some licensed products are used as

promotional incentives for customers to buy products. – Subscribing to Sports Illustrated, you may receive

a free video of that year’s most celebrated athlete. The video would be the licensed product.

Sponsorships and Endorsements

• Sponsorship- promotional vehicles that financially support sports events.– Promotional packages for sponsors may

include licensing rights, stadium promotions, product sampling, signage, product sales, billboards, hospitality opportunities, receptions with athletes, free tickets, and on-site merchandising opportunities. Exposure of a sponsor’s products through use by the athletes or organization.

Sponsorships and Endorsements

• Types of Sponsorships:– Sponsor portions or a sporting event.

• Example: half-time portion of a football game or the first quarter of a basketball game. (common during broadcasted events). XYZ company has sponsored an “XYZ Star of the Game” or an “XYZ Halftime Report”

– Signage- sponsors’ names may appear on the scoreboard, floorboards, rafters, or even rotating electronic screens. If broadcasted on television, the company receives direct advertising without buying airtime.

Sponsorships and Endorsements

• Premium Sponsors– Company must pay more to be the official or title

sponsor, but receives more options and opportunities. • Entitlements:

– NASCAR signed a 10-year contract with Nextel.– PGA grants entitlement for almost all of its tour events.

• Facility Entitlements:– Heinz Field in Pittsburgh, Pennsylvania, and FedEx Field near

Washington, D.C. – Exposure in all the events that are held at the stadium during the

season and off-season.

• Product Exclusivity– Only one product in a product category is granted sponsorship.– Coca-Cola official sponsor of the Olympic Games. ONLY Coca-Cola

drinks can be sold as the games.

Sponsorships and Endorsements• Endorsements

– A statement or approval of a product, service, or idea made by an individual or organization speaking on behalf of the advertiser. • Association- Michael Jordan endorses Hanes wear.

The product has no relation to the sport with which the athlete is affiliated.

• Demographic Match- Choosing a sports figure who matches the demographics profile of its customers. Bill Lester, African-American drive, featured on a package of Honey Nut Cheerios.

• Successful Careers- Tiger Woods: winning record and winning attitude.

• Image- positive image and is popular. Bad publicity ends endorsement deals. Example: Mike Tyson.

Sports Appeal

• Companies associate their products with well-known sports organizations to reach new customers and strengthen their relationships with their existing customers.

• Licensing, sponsorships, and endorsements generate positive publicity to achieve marketing goals and awareness of their product.