Download Definition: Brand

Enterprise Marketing
Question:
Which is better?
 Sell 10 items and make $10 profit on each
one.
 Sell 1 item and make $100 profit.
Answer:
 Sell 1 item and make $100 profit
Competitive Strategies
Cost leadership strategy
 Price your products lower than the
competition of similar value. Better value
Differentiation strategy
 Make your product unique or special in
some way. Better perceived value
Which strategy is better?
Answer: Differentiation strategy
What’s wrong with a cost leadership strategy?
 Lower margins
 Higher manufacturing, inventory, customer
support and transactions costs
 No brand loyalty. If a competitor responds
with a lower price then you are
uncompetitive
How do you differentiate your
product?
 Answer: Add value.
 Customer value = Customer benefit – Cost
 Customer benefit can be tangible or
intangible.
 Intangible benefits can be emotional, social
or peace of mind.
Intangible Value
 How do you increase intangible value for
the customer?
 Answer: Branding
 Branding creates perceived value because
the customer has a name that they trust.
 Branding increases social status and image
associated with the product.
 Branding builds customer loyalty.
Branding
Definition: Brand
 An identifying name, term, design or symbol
Definition: Brand Name
 Part of the Brand that can be spoken
Definition: Brand Mark
 The part of the Brand not made of words
Definition: Trademark
 A legal designation of exclusive use of a Brand
Branding continued
Definition: Brand Loyalty
 A customer’s favourable attitude toward a
specific Brand
Definition: Brand Recognition
 A customer’s knowledge of a particular
Brand
Definition: Brand Equity
 The marketing and financial value
associated with a Brand
Brand Equity
Brand
Loyalty
Brand
Recognition
Brand
Equity
Perceived
Brand
Value
Brand
Image
Companies with the greatest
Brand Equity
Rank
Brand
Country
Value in Billions $ US
1
Coco-Cola
USA
72.5
2
Microsoft
USA
70.2
3
IBM
USA
53.2
4
Intel
USA
39.0
5
Nokia
Finland
38.5
6
General Electric
USA
38.1
7
Ford Motor Company
USA
36.4
8
Disney
USA
33.6
9
McDonald’s
USA
27.9
10
AT&T
USA
25.5
Branding case study: Guinness
 Founded 1759, Dublin, Ireland
 Guinness is the most recognized brand of
beer in the world.
 It is not the largest selling beer. It has a
small but very loyal customer base.
 Guinness is very selective about the bars
and restaurants that sell its product.
 The draught equipment is specialized, the
presentation and customer experience are
unique.
Case Study: Intel Inside
 Intel is the world’s largest supplier of
microprocessors
 Intel is the computer industry standard.
 Intel had a brand recognition problem.
Most computer buyers did not know them
or did not care.
 Intel’s product names were numbers such
as 386 and 486. Numbers cannot be
trademarked.
Case study: Intel continued
 Intel had a problem with cheaper
“copycat” competitors that didn’t have
the R & D costs of Intel
 Solution: Intel invested heavily in
developing an “ingredient” brand, an
industry first
 Intel trademarked the brand,
“Pentium” which means, “number 5”
Case study: Intel continued
 Intel created the “Intel Inside” co-op
marketing program.
 Intel created an extensive marketing
campaign, educating consumers to look for
the Intel Inside sticker on the computer.
 Intel’s name became associated with a high
quality, high performance product.
 Customers perceived that if the computer
maker used a non-Intel CPU that it was an
inferior computer.
Case Study: Harley Davidson
 Harley Davidson is the leader in
manufacturing large, highway cruising
motorcycles.
 Harley Davidson was facing near
bankruptcy due to superior, lower cost
competitors from Japan
 Harley Davidson had an image problem
with their name being associated with
undesirables.
Harley Davidson: continued
 Harley Davidson correctly identified what
their “value” was.
 The marketing team was able to turn their
negative image into a positive image.
 Harley Davidson was able to take an
“inferior” product and use it as a
differentiation.
Harley Davidson: continued
 Today Harley Davidson has a fiercely loyal
customer base.
 Their image is the envy of the industry
 The “superior” competitors must copy Harley
Davidson’s “inferior” products in order to
compete.
 Harley Davidson’s brand merchandise accounts
for 5% of total revenue.
The marketing project
 Scenario: You are a marketing manager for a
Chinese manufacturing company. The
company wishes to begin exporting into the
Canadian market. You are asked by the V.P.
to produce a marketing plan.
 Work in your groups of 5 students. Imagine a
product that you think will sell in Canada.
You are marketing to other enterprises. This
will not be a consumer item.
 Create a marketing plan using the format and
the analysis tools discussed in class. Due date
is Wednesday, December 9th.