BMGT 451 Midterm Study Guide BRANDS Definition a product or service that occupies a valued position in the consumers minds Brands owe their valued position to the promises they deliver o Brands ARE promises delivered The promises a brand delivers represent the value proposition of the brand Brands are among a company s most valuable assets o Companies use the reputation their brands enjoy to charge consumers premium prices and gain a competitive advantage in the marketplace o Branding is a company s ability to increase the value of their brands in consumers minds o The marketing objective of branding is to generate repeat purchases of the brand by consumers o Branding is the management of a product or service image by the manufacturer or service provider Consumers perceived value of brands due to attributes that consumers ascribe to the brand or its manufacturer These are o Product Quality for those whose quality cannot be evaluated at the time of purchase Brands hold reputations and consumers take on risks when they purchase products especially In such instances brands operate as a signaling mechanism to increase customers confidence that the product is of excellent quality and will prove reliable Ex We buy SONY television sets because we trust the quality o Reliability of the Manufacturer or Service Provider as a long term partner that will respond to future customer needs Brands also communicate that the firm can be trusted to act A significant aspect of value is the customer s belief that the firm will respond satisfactorily if anything goes wrong Ex IBM consultants would rather miss their own wedding than fail to respond immediately to IT failures With a belief like this implanted in consumers minds customers are confident that IBM will go the extra mile to respond to any IT problems customers may encounter Consumer associates with the brand that it can be trusted o Experiential Value Refers to a specific benefit which consumers believe a brand will deliver Ex Consumers are confident that FedEx and not the U S Postal Service should be THE shipping company of choice when it the shipment absolutely positively must be there overnight o Symbolic Value Brands express values and identities with which consumers yearn to associate Ex the symbolic value of Nike is one of individual professional achievement See the section on iconic brands o Companies impart these four attributes to their brands through imagery associations brand performance associations and consumer insight associations Relationship is THE common denominator which ties consumers to product or service brands o Most of the products enjoy no such relationships with consumers Products that rely solely on their material markers trademark logos unique features for identification and differentiation from other products remain mere commodities At best they are CONVENTIONAL BRANDS When brands acquire special status in consumers minds they are no longer conventional brands they have become ICONIC BRANDS them o These products are no longer commodities they have become cultural artifacts As cultural artifacts the usage of these products now signifies a special status lifestyle or a variety of social identities aspired to by the consumer o How do marketers succeed into turning their products into cultural artifacts and imparting iconic brand status to Douglas B Holt of Harvard University is a leading expert on this subject Holt argues iconic brands provide consumers powerful myths which help the people deal with tensions in their lives These tensions arise because of contradictions between the society in which people live and the experiences of individual consumers These contradictions produce both intense wishes and anxieties that fuel the demand for myths Rambo First Blood Part II Nike The Beverly Hillbillies became one of the most popular television shows of the 1960s because it damned the stiff conformity of that era o Strategic focus is not only on brand performance but also on what the brand stands for the strategic focus of marketers of conventional brands is limited to the performance of the brand COMMUNITY BRANDS are a step beyond iconic brands o Harley Davidson motorcycles provide an example of community branding o H D owners are a part of a community with each other o Elvis Presley and Star Trek fan clubs are another example of community brands o Susan Fournier of Harvard has written extensively on community brands BRANDS AND COMPETITIVE ADVANTAGE o When trying to influence consumer behavior through conventional iconic or even community brands six essential steps must be followed for successfully growing a brand in the market place and acquiring a competitive advantage Competitive advantage four stage process of making consumers aware of the product prefer the product buy the product and keep on buying the product 1 Consumer Insight Marketers need insight as to what consumers want need in order to grow o Ex Ted Turner s CNN the Toyota Prius Subway s weight reducing diet 2 Establishing a Frame of Reference tells your target customers in a way that is easy to understand what your product does or what your service is A successful frame of reference also would tell your target customers the unique value that your product or service offers them o Dove s frame of reference see below was not successful o Nivea and FedEx we successful 3 Establishing Points of Parity with Competitors marketers must establish a competitive advantage by stressing how their product differs from their competitors o Also important for marketers to signal to consumers that their product also offers what similar products in the market offer o Ex Dove tried to capitalize on its brand name as soap known for its moisturizing property and introduced a dishwashing liquid soap Result sales were disappointing consumers wanted a dishwashing liquid soap not a hand lotion marketers didn t emphasize its properties as dish cleaner o Ex Nivea known for making a skin cream which is gentle and protective emphasized first and foremost that the new deodorant it was introducing did what a deodorant is supposed to do stop body odor point of parity Once that was established in consumers minds Nivea went on to promote the gentle and protective qualities associated with the Nivea brand Result sales flourished o Visa s point of difference is that it is the most convenient card to have American Express highlights the prestige associated with use of its card Having