! Week 8: Branding Dr Christopher Pokarier EB202 Introduction to Business

Transcription

1 Week 8: Branding! Dr Christopher Pokarier EB202 Introduction to Business

2 Marketing introduction: The 4 Ps Basic marketing theory identifies 4 elements in the marketing mix :! Product what?! Price - for how much?! Place where is it sold?! Promotion how is it sold? Branding is one part & consequence of this decision set

3 Brands offer assurance + identity!

4 Brand power! Brands simplify consumer decisions! They reduce search & decision times in an era of product complexity, huge choice, and information overload! Brands shift responsibility from buyers! Well, I bought the Toyota so don t blame me - Dear - that we are broken down in the middle of nowhere..! Brands enhance status of their customers: BUT only amongst others who also value that brand!!

5 Everything is branded today! A strong brand supports higher prices & adds to the market position of related products

6 Brands may express values! eg: Dior = style, elegance, creativity, exclusivity

7 Brands as communications Brands communicate focus & values to! Customers! Managers of the firm! All employees! Suppliers Brands guide strategic choice & implementation of strategy [ and strategy is what you DON T do]

8 Brands are core firm resources! Brand power (reputation) is usually built slowly + expensively + BUT damaged easily

9 Brands having pulling power! Strong brands create demand for a product! Consumers demand renowned products from retailers! Brands therefore pull product through the supply chain from the manufacturer, through wholesalers & retailers! This empowers the manufacturer increasing profits! Less need for an expensive sales team or product placement strategy (ie. Less need to push a product)

10 Communicating value! Brands & advertising communicate a value proposition to a targeted market

11 Basic strategic choice In general, firms have a choice between! Price leadership: Sell standard goods at low prices in large volumes! Product differentiation: Sell distinctive goods at higher prices but typically in smaller volumes Very few firms can achieve price leadership & differentiation across their product range

12 A business name becomes a brand! In traditional industries the firm s name is the brand & is guarded

13 Brands & stories of origin & place! Such stories give a firm focus & communicate values to customers

14 Brand portfolios! Large enterprises increasingly have a portfolio of brands! That is, multiple brands owned by one firm! Multinational enterprises may take over strong local brands abroad & bring their know-how to them! Eg. Campbell s Soup owns Arnott s Biscuits! Luxottica owns/makes many branded sunglasses..eg. Persol, Ray Ban, Oakley & license brands (Prada, Chanel, D&G, Miu Miu, Paul Smith, Tiffany, Versace, Ralph Lauren, Ferragamo, etc etc )! Fast Retailing has Uniqlo, Theory, Helmut Lang etc

15 Segmentation Firms identify and respond to differences within a general market (market segments) for a particular product based on! Price sensitiveness & orientation to quality! Demand characteristics (reflecting tastes, values, generations etc! Differing values placed on the same brand! Under one brand, segmentation is achieved via versioning or controlling distribution channels

16 Positioning Strategic product positioning in the market! Strategic choices over branding, pricing and product mix are then made to target each segment appropriately and maximise profitability! Often firms choose not to compete in some segments for various reasons including! Intense competition and low profit margins, technological prowess, premium positioning of brand

17 Find a segment or make your own! Understand your market position! Find a segment in which you can offer a distinctive value proposition! Find a category to be NUMBER ONE in (that is valued by customers)! Make customers value that category more highly valued by customers! BUT understand that you can t change customers minds

18 Brand preservation! Constant danger of success bringing brand dilution: especially for exclusive products

19 Brand extension! As the Luxottica licensed brands case shows, there is much scope to extend a strong brand into new product lines! Eg. fashion, accessories, perfumes, watches, homewares, even hotels (eg. Versace Resorts)! Danger of brand dilution with over-extension! Challenging strategic and tactical issues arise! Further complicated by licensing arrangements

20 Brand creation! Initial naming decisions create legacies and lock-in

21 What is marketing? Marketing is a very broad concept that includes! Assessing [future] consumer demand! Product planning, packaging, branding! Pricing! Advertising! Distribution & Selling! Public relations not just with customers but all players in the business environment investors, governments, the public-at-large! Marketing is integral to corporate strategy

22 Distribution! Strong brands still need to be accessible to customers when they need the product

23 Advertising! Bought (paid) media space/attention! Customers must find/know your product! Mass marketing for mass consumer goods: expensive but can pull product through distribution chains! Advertising is become more focused & varied (eg. internet)! Targeted marketing: focuses on core likely customers! Viral marketing: uses target audience to spread a message

24 Public relations! Earned media space/attention! Promotes the firm in addition to brands! Crisis communications: responds strategically & tactically to a problem with the company! Investor relations: communicates to investors! Government relations: deals with regulators & policymakers! Rivals for public attention are everywhere not just rival firms

25 Ubiquitous branding! Brands pattern urban and virtual space : people reflect & even become brands