branding and positioning

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


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


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


Potential Brand Attributes(Exhibit 7.1)

5


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


The Strongest and Weakest U.S. Corporate Reputations (Exhibit 7.2)

7


Product Identification Comparison Shopping Shopping Efficiency Risk Reduction Product Acceptance Enhanced Self-Image Enhanced Product Loyalty

Advantages of Branding

8


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


Manufacturer (Name) Brands versus Private-Label Brands (Exhibit 7.3)

10


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


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


The World’s Twenty-Five Most Valuable Brands (Exhibit 7.4)

13


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


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


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


Hypothetical Perceptual Map of the Automotive Market (Exhibit 7.5)

17


Hypothetical Strategy Canvas for the Book Retailing Market (Exhibit 7.6)

18


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


Using Product Descriptors as a Basis for Differentiation (Exhibit 7.7)

20


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


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


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


Stages of the Product Life Cycle(Exhibit 7.8)

24


Strategic Considerations During the Product Life Cycle (Exhibit 7.9)

25


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


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


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


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


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


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


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

branding and positioning

Documents

cengage learning

accessible website

product offering

brand names

brand marks

effective brands

productrelated brandingaimed

good brands answer questions