Session 15 - Branding

Customer Lifetime Value

value of the entire stream of purchases that a single customer would make over a lifetime of patronage

Brand

name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those competitors

Why do we have a discount factor when calculating money for the future?

• risk and uncertainty for any future projection 

Purpose of a Brand

differentiate in offering in two main ways

• creating unique identitiy 

• represents a meaning that resonates with its potential buyers 

Brand meaning’s impact on perceived value

• signals the quality of associated products and services

• creates additional benefits

  • emotional (satisfaction from using and owning the brand)

  • social (group acceptance resulting from ownership of a particular brand)

  • self expressive (use of the brand as a means to express one’s identity)

Brand Equity

Set of brand assets and liabilities linked to a brand name and symbol, which add to or subtract from the value provided by a product or service

Factors that impact Brand equity: 

• brand name, slogans, jingles, characters, logos and symbols, URLS

Products

• do something

• defined by functions and specs

• can be identical to another

• expand choices

Brands

• stand for something

• defined by their associations and emotional impact

• no two are identical

• simplify choices

Measuring brand equity

• both the consumer level and market level

Consumer level - willingness to pay for branded vs generic

Market level - if value of company is greater than sales of company = positive brand equity

• generic company seres as a baseline

Product Line

group of products that are closely related because they satisfy a similar need

Branded House

Apple, Google (google maps, google calendar, etc)

House of Brands

General Mills (Wheaties, Cheerios, Total, etc.)

P&G (Tide, Ivory, Crest, etc.)

Product Mix

Firm’s entire range of products 

Dimensions: 

• width - number of different product lines

• length: number of different offerings within a product line

• depth: the number of versions offered of each product in the line

• consistency: how closely related the various lines are 

Branded House considerations

• individual profit centers can affect, and be affected by, decisions made by other parts of the company

• generally require a greater level of internal communication and information sharing in relation to brand equity

Branded House benefits

• money invested in building parent brand is not wasted as product technology becomes obsolete

• parent brand can positively enhance all products; good brand image is transferable

• parent brand acts as a solid foundation to allow individual products and their features to be promoted

• strong, familiar parent brand serves to reassure consumers in a new, unfamiliar product/ service areas like e-commerce transactions or new financial instruments

Line extensions

when a brand is used to introduce a new product that targets a new market segment within a product category currently served by the parent brand, the new products are called ___

eg. coca-cola zero

colagate for kids

colagate gel

Brand extensions

when a brand is used to introduce a new product within a product category NOT currently served by the parent brand, the new products are called ___ or category ____

• the perceived “fit” of the ___ with the parent brand is an important  determinant of success

When a X-for-less competitor enters the market you can:

• reduce price

• hold the fort

• introduce a fighter brand

hazards of fighter brands

1. cannibalization

2. failure to bury the competition

3. financial losses

4. missing the mark with customers

5. management distraction