UGBA 106 Midterm CS (1) PDF Lecture Notes

Lecture 9: Branding (10/1) John Stuart, Chairman, Quaker (1900): if this business were split up, I would give you the land and bricks and mortar and I would take the brands and trade marks and I would fare better than you = brand value American marketing association: a brand is...

Lecture 9: Branding (10/1) John Stuart, Chairman, Quaker (1900): if this business were split up, I would give you the land and bricks and mortar and I would take the brands and trade marks and I would fare better than you = brand value American marketing association: a brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors Product vs Brand ○ Product Broadly, a product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. (Kotler & Keller, 2015) ○ Brand “A brand is a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers”. (American Marketing Association). Reputation, trust, respect Brand is a term closely linked to a product or place’s image and reputation in that it “captures the idea” of reputation observed, reputation valued, reputation managed Brand is not branding ○ The difference between brand and branding is that one is a marketing tool and the other is an action A brand is a thing (noun) Branding is an action (verb)  Branding ○ Set of marketing and communications methods that help distinguish a company or products from competitors, aiming to create a lasting impression in the minds of customers. ○ The key components that form a brand's toolbox include a: brand’s identity, brand communication (such as by logos and trademarks), brand awareness, brand loyalty, and various branding (brand management) strategies. In very simple words ○ A product is what you sell ○ A brand is the perceived image of the product you sell ○ Branding is the strategy to create that image ○ Many companies believe that there is often little to differentiate between several types of products in the 21st century, and therefore, branding is one of a few remaining forms of product differentiation Although the balance sheet may not even put a value on it, a company's brand, or its portfolio of brands, is its most valuable asset ○ For some companies the brand can account for as much as 70 percent of its market value ○ because of this and because of the power of not-for-profit brands like the Red Cross or Oxfam, all organizations should make the brand their central organizing principle, guiding every decision and every action A brand is "a promise” you make and are known for keeping to the person you are asking or trying to influence."  Lecture 10: STP and Branding (10/1) Segmentation Targeting Positioning TAM = total available market  ○ How big is the largest possible market = the sector’s entire revenue opportunity SAM = serviceable available market ○ What portion of the TAM fits you SOM = serviceable obtainable market ○ What portion of the SAM can you reach STP process ○ Segmentation → targeting → positioning ○ A 3 step model that examines your products or services as well as the way you communicate their benefits to specific customer segments ○ The STP marketing model means you segment your market, target select customer segments with marketing campaigns tailored to their preferences and adjust your positioning according to their desires and expectations ○ STP marketing represents a shift from product-foucsed marketing to customer-focused market ○ STP process leads to marketing mix The STEP formula ○ If you are looking for a simple way to remember and summarize the STP marketing concepts, the acronym STEP is extremely useful ○ Segmentation + Targeting Equals Positioning (STEP) ○ This formula clearly illustrates that eachsegment requires tailored positioning and marketing mix to ensure its success Market segmentation ⇒ targeting (Select the target market) ⇒ product positioning ⇒ decide on the optimal marketing mix Segmentation ○ Identifying meaningfully different groups of customers ○ Divide the market into different groups of customers using segmentation pricing ○ Divide market inot distinct groups of customers (segments) using segmentation practices Targeting ○ Selecting which segments to serve ○ Determine which segment to focus your marketing efforts on ○ Determine which customer group (segment) to focus your marketing efforts on Positioning + marketing mix ○ Implementing chosen image and appeal to chosen segment ○ Position your products to appeal to each segment  ○ Create product positioning and marketing mix that is most likely to appeal to the selected audience Market segmentation ○ Identify basis for segmentation ○ Determine important characteristics of each market segment Demographic Psychographic Geographic Behavioral Market targeting ○ Evaluate potential and commercial attractiveness of each segment ○ Select one or more segments Product positioning ○ Develop detailed product positioning for selected segments ○ Develop a marketing mix for each selected segment Brand development process  ○   Lecture 11: Positioning (10/3) Differentiation and positioning  Positioning statement summarizes company or brand positioning using this form: to (target segment and need) our (brand) is (concept) that (point of difference) ○ ○ ○  ○ ○ Lecture 14: Marketing Mix (10/7) The 4 Ps framework is typically represented as a target with the customer in the center, the “bull’s eye” ○ Product decisions affect customer benefits, our first C in applying the marketing mix 4 Ps framework  ○ Extended marketing mix (the fifth P and C of marketing) ○ Extended marketing mix decision process ○ A marketer can influence customer costs (and any other C) with any of the Ps) ○   To apply the marketing mix effectively, marketers must tie specific Ps to customer Cs. Marketers should relate: ○ Product (P) decisions to desired customer benefits (C) ○ Place (P) decisions to customer expectations and desired levels of convenience © ○ Price decisions (P) to customer perceptions of cost © ○ Promotion decisions to customers’ communication © needs The 4Ps are all producer-controlled variables ○ The marketer controls which features are included in the product, how it is packaged and the brand (porudct) ○ The marketer decides when and where to make the product available to the customer (place) ○ The marketer decides how much to charge in exchange and what terms will be offered (price) ○ The marketer also determine how the product willbe promoted and what messages customers will see (promotion)    Lecture 15: Meeting Customer Needs (10/15) Delivering products and brands The new product development process (NPD) → Diffusion of Innovation (DOI) and Product Life Cycle (PLC) → Reflect how Brands Create Value (BCV) for customers and marketers  Community flywheel ○  People don’t buy products; they buy the benefits the product offer. One product most always offers more than one benefit Products are total market offerings ○ Core product The essential motivating benefit the customer is purchasing ○ Actual product The physical and intangible properties or characteristics the product takes on ○ Augmented product Extra attributes and features that are not part of the actual product ○   Product life cycle ○ Products have life spans, they begin as ideas, develop into market offerings and eventually disappear from store shelves Diffusion of Innovation (DOI) ○ The idea that new technology and the products that utilize the technology spread through markets over time is called diffusion of innovation ○ Diffusion of innovation gives marketers a generalization about the nature of people that adopt innovation at various points ○ Diffusion of innovation adopter categories  ○   Article 1: Brand Portfolio Explain the relationships among the Six Parts of the Marketing Process? Discuss with examples. The Six Parts of the Marketing Process, as outlined in various marketing frameworks, include critical stages that are interrelated. Each stage builds on the other to create a cohesive strategy for brand development and execution. In the context of Brand Portfolio Strategy and Architecture, we can break down these relationships using examples from the article: Market Research and Customer Analysis: This stage involves understanding customer needs, preferences, and behaviors. It helps brands define their market segments. For instance, Frito-Lay's analysis of the "6 W’s" (What, Who, When, Where, Why, and Why Not) allows it to map customer needs and diversify its brand offerings, such as salty vs. sweet snacks​. Segmentation, Targeting, and Positioning (STP): After analyzing customer needs, companies segment the market and decide which groups to target. The positioning of brands ensures that each one addresses a specific customer need. Unilever, for example, maintains several brands like Dove and Lux in the soap category, targeting different customer segments with unique positioning. Brand Strategy and Architecture: Here, companies determine how their brand portfolio will be structured. This is essential in ensuring clarity, avoiding overlap, and maximizing market coverage. For example, Gap employs a mix of house of brands (Old Navy, Gap, Banana Republic) and branded house strategies (GapKids, BabyGap) to separate or unify product lines depending on the strategic goals​. Product and Service Design: This stage focuses on how to extend and leverage brand meaning across products and services. Brand architecture helps determine whether brands should share the same name or be kept separate to avoid negative spillover, as seen in Hyundai’s decision to rename its luxury car brand Genesis, after realizing the Hyundai name did not fit the luxury market​. Pricing and Distribution Strategy: The way brands are priced and distributed is influenced by their architecture. Companies like Procter & Gamble use a multi-brand portfolio to differentiate price points and distribution channels, targeting various  consumer needs without causing cannibalization between premium and value brands like Pampers and Luvs. Communication and Promotion: Finally, effective communication of brand positioning is critical. The architecture ensures that brand messages are clear and targeted to the right audience. Apple's five-part branding architecture for its iPhone line demonstrates how a company can communicate product differentiation (iPhone 6S, etc.) while maintaining brand coherence​. Article 2: Framework for MKTG Strategy While companies choose to brand their products and services in many ways, what are some central tenets that help define an optimal brand portfolio and associated brand architecture? To define an optimal brand portfolio and associated brand architecture, several central tenets are crucial. Based on the "Framework for Marketing Strategy Formation," here are some key tenets: Clarity and Differentiation: A well-defined brand portfolio should clearly differentiate each brand in the portfolio. Each brand must target a distinct market segment or fulfill different consumer needs to avoid confusion or overlap. For example, companies like Procter & Gamble successfully manage multiple brands such as Tide (targeting premium laundry detergent users) and Gain (offering a value option), ensuring that each brand is distinct. Market Segmentation: Segmenting the market ensures that each brand in the portfolio addresses a specific target market. This helps in positioning each brand appropriately. For instance, Gap Inc. has segmented its brands into Old Navy (value-conscious consumers), Gap (mid-market), and Banana Republic (premium customers), ensuring that each brand serves different customer needs. Strategic Fit and Synergy: An optimal portfolio ensures that the brands complement each other and create synergies. For instance, having multiple brands that address various segments can help a company capture a larger share of the market without causing cannibalization. L’Oréal has a vast portfolio, from drugstore brands like Maybelline to luxury lines like Lancôme, which ensures that it can serve a broad spectrum of consumers while maintaining synergies in distribution and promotion​. Flexibility for Expansion: The brand architecture should allow for growth. This could involve creating new brands or sub-brands as the market evolves. Hyundai’s spin-off of Genesis as a luxury brand allowed it to expand into the premium car market while keeping the parent Hyundai brand focused on more affordable vehicles​. Long-Term Consistency: A successful brand portfolio must maintain long-term consistency in brand messaging and positioning. This ensures that brands build equity over time without confusing the consumer. Coca-Cola, for example, has consistently maintained the core positioning of its flagship brand while expanding its portfolio with products like Coke Zero and Diet Coke, each targeting different consumer preferences. Case 1: Pattern Brands Case 2: KFC China Case 3: Chase Sapphire