Bus M300 1nd Edition Lecture 12 Outline of Current LectureI. Why is brand important?II. Brand III. Brand LoyaltyIV. Brand ExtensionsV. Product Line ExtensionsCurrent Lecture I. Why is brand important?a. Brand is responsible for 18% of total purchase decisionb. Strong vs. weak brands can charge 19% higherc. Stronger brands drove 9.5 points higher shareholder returnII. Brand a. Brand is more than just advertising and marketing. It’s nothing less than everything one thinks when they see your logo or hear your name. b. Brand definition: Name, symbol, or design used to identify the products and differentiate them from competitive offerings. c. Brand name: the words or letters of the brandsd. Brand mark: pictorial part of the brande. Trademark: legally protected brand exclusive to the owner. f. Brand equity: The added value to the firm, the channel, or the consumer with which a brand endows a product. These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.i. High brand equity has a high degree of preference and insistenceii. In other words: incremental value the brand itself produces. III. Brand Loyaltya. Brand recognition: knowledge of brandi. How can a firm increase brand recognition?1. Advertising, promotion, trial etc. 2. Goal is to get the brand in front of their eyesb. Brand preference: prefers one brand over another but will not demand that brand every time.i. How can they increase this? 1. Persuade/convince people you are betterc. Brand insistence: No alternatives will suffice. Few goods reach this stage. i. How can they increase this?1. Loyalty programs (airlines). Having a superior product. Superior service. 2. Example: Some people DEMAND Coke vs. Pepsi. d. 3 stages, Recognition, Preference, Insistence. IV. Brand Extensionsa. High brand equity can lead to brand extensions to maximize valueb. Brand extension: new products in different product categoryc. Successful brand extensionsi. Product categories must fitii. Characteristics must fitiii. What the product stands for must fitiv. Quality of extensionV. Product Line Extensionsa. Product line extension (PLE): new products that closely resemble the firms existing productb. Stay within the same category but extend productc. Example: MacBook pro > mac air, Coke > Coke Zerod. Why offer PLE?i. PLE can enhance firm growth – Mature to growthii. PLE allow for more optimal uses of company resourcese. Differences between PLE and Brand extensioni. PLE: Starwars sequelsii. Brand extension: Action figures for
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