!Week8:BrandingDrChristopherPokarier|EB202IntroductiontoBusiness

Marketingintroduction:‘The4Ps’

Basicmarketingtheoryidentifies4elementsinthe‘marketingmix’:

! Product–what?

! Price-forhowmuch?

! Place–whereisitsold?

! Promotion–howisitsold?

Brandingisonepart&consequenceofthisdecisionset

!Brandsofferassurance+identity

Brandpower

! Brandssimplifyconsumerdecisions

! Theyreducesearch&decisiontimesinaneraofproductcomplexity,hugechoice,andinformationoverload

! Brandsshiftresponsibilityfrombuyers

! “Well,IboughttheToyotasodon’tblameme-Dear-thatwearebrokendowninthemiddleofnowhere..”

! Brandsenhancestatusoftheircustomers:BUTonlyamongstotherswhoalsovaluethatbrand!!

!EverythingisbrandedtodayAstrongbrandsupportshigherprices&addstothemarketpositionofrelatedproducts

!Brandsmayexpressvalueseg:Dior=style,elegance,creativity,exclusivity

Brandsascommunications

Brandscommunicatefocus&valuesto

! Customers

! Managersofthefirm

! Allemployees

! Suppliers

Brandsguidestrategicchoice&implementationofstrategy

[andstrategyiswhatyouDON’Tdo]

!BrandsarecorefirmresourcesBrandpower(reputation)isusuallybuiltslowly+expensively+BUTdamagedeasily

Brandshavingpullingpower

! Strongbrandscreatedemandforaproduct

! Consumersdemandrenownedproductsfromretailers

! Brandstherefore‘pull’productthroughthesupplychainfromthemanufacturer,throughwholesalers&retailers

! Thisempowersthemanufacturer–increasingprofits

! Lessneedforanexpensivesalesteamorproductplacementstrategy(ie.Lessneedto‘push’aproduct)

!CommunicatingvalueBrands&advertisingcommunicateavaluepropositiontoatargetedmarket

Basicstrategicchoice

Ingeneral,firmshaveachoicebetween

! Priceleadership:Sellstandardgoodsatlowpricesinlargevolumes

! Productdifferentiation:Selldistinctivegoodsathigherpricesbuttypicallyinsmallervolumes

Veryfewfirmscanachievepriceleadership&differentiationacrosstheirproductrange

!AbusinessnamebecomesabrandIntraditionalindustriesthefirm’snameisthebrand&isguarded

!Brands&storiesoforigin&placeSuchstoriesgiveafirmfocus&communicatevaluestocustomers

Brandportfolios

! Largeenterprisesincreasinglyhaveaportfolioofbrands

! Thatis,multiplebrandsownedbyonefirm

! Multinationalenterprisesmaytakeoverstronglocalbrandsabroad&bringtheirknow-howtothem

! Eg.Campbell’sSoupownsArnott’sBiscuits

! Luxotticaowns/makesmanybrandedsunglasses..eg.Persol,RayBan,Oakley&licensebrands(Prada,Chanel,D&G,MiuMiu,PaulSmith,Tiffany,Versace,RalphLauren,Ferragamo,etcetc)

! FastRetailinghasUniqlo,Theory,HelmutLangetc

Segmentation

Firmsidentifyandrespondtodifferenceswithinageneralmarket(marketsegments)foraparticularproductbasedon

! Pricesensitiveness&orientationtoquality

! Demandcharacteristics(reflectingtastes,values,generationsetc

! Differingvaluesplacedonthesamebrand

! Underonebrand,segmentationisachievedvia‘versioning’orcontrollingdistributionchannels

Positioning

Strategicproductpositioninginthemarket

! Strategicchoicesoverbranding,pricingandproductmixarethenmadetotargeteachsegmentappropriatelyandmaximiseprofitability

! Oftenfirmschoosenottocompeteinsomesegments–forvariousreasonsincluding…

! Intensecompetitionandlowprofitmargins,technologicalprowess,premiumpositioningofbrand

! Understandyourmarketposition

! Findasegmentinwhichyoucanofferadistinctivevalueproposition

! FindacategorytobeNUMBERONEin(thatisvaluedbycustomers)

! Makecustomersvaluethatcategorymorehighlyvaluedbycustomers

! BUTunderstandthatyoucan’tchangecustomers’minds

!BrandpreservationConstantdangerof‘success’bringingbranddilution:especiallyforexclusiveproducts

Brandextension

! AstheLuxotticalicensedbrandscaseshows,thereismuchscopetoextendastrongbrandintonewproductlines

! Eg.fashion,accessories,perfumes,watches,homewares,evenhotels(eg.VersaceResorts)

! Dangerofbranddilutionwithover-extension

! Challengingstrategicandtacticalissuesarise

! Furthercomplicatedbylicensingarrangements

!BrandcreationInitialnamingdecisionscreatelegaciesandlock-in

Whatismarketing?

Marketingisaverybroadconceptthatincludes

! Assessing[future]consumerdemand

! Productplanning,packaging,branding

! Pricing

! Advertising

! Distribution&Selling

! Publicrelations–notjustwithcustomersbutallplayersinthebusinessenvironment–investors,governments,thepublic-at-large

! Marketingisintegraltocorporatestrategy

!DistributionStrongbrandsstillneedtobeaccessibletocustomerswhentheyneedtheproduct

Advertising

! Bought(paid)mediaspace/attention

! Customersmustfind/knowyourproduct

! Massmarketingformassconsumergoods:expensivebutcanpullproductthroughdistributionchains

! Advertisingisbecomemorefocused&varied(eg.internet)

! Targetedmarketing:focusesoncorelikelycustomers

! Viralmarketing:usestargetaudiencetospreadamessage

Publicrelations

! Earnedmediaspace/attention

! Promotesthefirminadditiontobrands

! Crisiscommunications:respondsstrategically&tacticallytoaproblemwiththecompany

! Investorrelations:communicatestoinvestors

! Governmentrelations:dealswithregulators&policymakers

! Rivalsforpublicattentionareeverywhere–notjustrivalfirms

!UbiquitousbrandingBrandspatternurbanandvirtualspace:peoplereflect&evenbecomebrands