BUSSPP 0020 1st Edition Lecture11 Outline of Last Lecture I Back to the Course Thesis II Differentiation as an Investment Outline of Current Lecture I Branding II Life Cycle of a Product Current Lecture I Branding A Concept definition 1 Brand identifier product B There are different things that we can think of as identifiers 1 Brand name a name b Big Mac b This is linked to language and therefore could become a symbol to a place that doesn t speak the same language c Some may use an English brand in foreign countries i Target market is US ii May see English as more global d Example Sony i Eventually wanted to sell to US soldiers needed to be pronounceable by them e Could be for business product of a business or for the entire name i There can be multiple brand names within one firm 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 f These are examples of protected intellectual property i Firm that develops the name has exclusive use of the name for a period of time ii That time is NOT infinite iii Has to be renewed on a regular basis iv If you do not go through federal listing you don t necessarily have exclusive use Example Yo yo escalator g People now brand their children with unique names and spellings i There are ways to infringe upon this Piracy False advertising false branding Knock offs 2 Brand mark a Symbol logo i McDonald s golden arches 3 formal name of a firm a Example Darden b Owns Olive Garden brand name of one business and Capital Grill c Brand name identifies thing and provokes much more information than just an identifier C Other than Identity brands 1 Because of advertising we associate things with brand names 2 Emotional affective a Different people have like dislike reactions to certain brands 3 Knowledge cognitive belief a Information is known b You recognize the brand example canned soup many flavors etc 4 Predisposition to act a When you are looking for soup you like Progresso better than Campbell s you are therefore predisposed to one of these versus the other i We could selectively put info into your heads by advertisements ii This is the goal and the other two are the means of meeting the goal D Ownership of Brands 1 There can be other brand owners but these are the two most basic 2 Assume not vertically integrated a Manufacturer vs Retailer b Manufacturer ii Market ii National If I brand my product you can get that at many different retailers c Retailer i Private label ii Retailer iii Store brand iv Proprietary brand Owned by someone the only place that you can buy something that is branded is in that store American Eagle d Manufactured with 1 product unique brand i Ethical prescription drugs e Manufacturer with set of products family brand i Food products ii Kraft Heinz Nestle f Retailer with set of products family brand i Apparel g Retailer with 1 product unique brand i Big Mac E Emergence of Product Differentiation 1 A firm must decide to either keep the current brand name or come up with a new one 2 Example Honda a Already had developed of associations knowledge and predisposition b Did they do a good job at this i They want a higher price point and different message ii Decided that they wanted to release a premium product iii Called their new identifier Acura Could have a second chance at developing associations and developing different associations from Honda Luxury features F Brand Equity 1 Captures the economic value of the brand NOT the accounting value 2 If I were to sell this what would I get for it now 3 There are things that drive brand equity a Brand recognition II Lifecycle of a Product A There is some period of time before the differentiated product appears 1 Time before is selling of the generic brand 2 Split into 4 periods a Introduction period i Slow growth in demand b Growth period i Rapid growth in demand c Mature period i Constant of slowly declining demand d Reclining period i Rapidly reclining demand B Not this simple 1 A lot of products vanish before introduction period even begins a Assume also that there is one firm selling this product first mover b Advantages i Great retail locations 2 Technology development protected by patent 3 Really great brand 4 Take up distribution centers 5 In general creates entrance barriers to keep out second movers a Now in monopolistic competition 6 A lot of products are not able to establish true demand growth a Assuming at this point that there still is only one player b However if there is significant growth incentives to enter this product market will increase i Second movers Fast second movers Slow second movers c This period of time could be very short or last decades C Maturity conveys several ideas 1 Demand is flat or slightly down a Especially if it is a relatively long period of time b All the buyers have a lot of time to know all of the sellers c Either people exit the market or consolidate i Development of oligopolies ii Example Expedia and Travelocity iii Growth opportunities and profit opportunities are highly limited iv Consolidate to drop costs and gain profit opportunities d Technology tends to emerge 2 Decline a Attempts to restart growth
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