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7
C H A P T E R
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Branding
and
Positioning

 Involves selecting the right combination of name,
symbol, term, or design that identifies a product
 Brands have two parts
 Brand name – words, letters, and numbers that can be spoken
 Brand mark – symbols, figures, or a design
 Critical to product identification and the key factor in
differentiating a product from its competition
 Makes it easier for customers to find and buy
products
 Firms must protect brand names and brand marks
from trademark infringement by other firms
Branding Strategy
2

 Where can I find information quickly?
 Where can I get a quick meal and make my kids
happy?
 Where can I buy everything I need, all at decent
prices?
 Where can I get the best deal on car insurance?
 How do I find a value-priced hotel in midtown
Manhattan?
Good Brands Answer Questions for
Customers
3

Consider the notion that a truly effective
brand is one that succinctly captures the
product offering in a way that answers a
question in the customer’s mind. Now,
consider these brands (or choose your
own): Coca-Cola, Disney, Marlboro,
American Express, and Ford. What
questions do these brands answer? Why
are these effective brands?
4

Potential Brand Attributes
(Exhibit 7.1)
5

 Corporate Branding
 Equally as important as product-related branding
 Aimed at a variety of stakeholders
 Designed to build and enhance the firm’s reputation
 Basic Branding Decisions
 Manufacturer vs. private-label brands
 Individual vs. family branding
 Strategic Brand Alliances
 Cobranding
 Brand licensing
 Brand Value
 Brand loyalty
 Brand equity
 Packaging and Labeling
Strategic Issues in Branding
6

The Strongest and Weakest U.S.
Corporate Reputations (Exhibit 7.2)
7

 Product Identification
 Comparison Shopping
 Shopping Efficiency
 Risk Reduction
 Product Acceptance
 Enhanced Self-Image
 Enhanced Product Loyalty
Advantages of Branding
8

 Manufacturer vs. Private-Label Brands
 Private-label brands are owned by the merchants that sell
them (Gap, Craftsman, Sam’s Choice)
 Private-label brands are more profitable for the retailer
 Manufacturer brands have built-in demand
 Individual vs. Family Branding
 Individual branding – when a firm gives each of its product
offerings a different brand name
 Family branding – when a firm uses the same name or part of
the brand name on every product
Basic Branding Decisions
9

Manufacturer (Name) Brands versus
Private-Label Brands (Exhibit 7.3)
10

 Cobranding
 The use of two or more brands on one product
 Leverages the image and reputation of multiple brands to
create distinctive differentiation
 Brand Licensing
 A contractual agreement where a company permits an
organization to use its brand on non-competing products in
exchange for a licensing fee
 Licensed brands typically have instant recognition among
consumers
Strategic Brand Alliances
11

 Brand Loyalty
 A customer-centric view of brand value
 A positive attitude toward a brand that causes customers to
have a consistent preference for the brand
 Three degrees:
 Brand recognition
 Brand preference
 Brand insistence
 Brand Equity
 A firm-centric view of brand value
 The marketing and financial value associated with a brand’s
position in the marketplace
Brand Value
12

The World’s Twenty-Five Most Valuable
Brands (Exhibit 7.4)
13

Compare the corporate reputation scores in
Exhibit 7.2 with the brand valuations in
Exhibit 7.4. Why does Apple sit at the top of
both lists? How has the company used good
branding and positioning strategy to achieve
this result? How is it that Wells Fargo can
have a very high brand valuation, but a very
low corporate reputation score?
14

 Goes hand-in-hand with branding in developing a
product, its benefits, its differentiation, and its image
 Includes issues such as color, shape, size,
convenience
 Often used to reposition the product or give it new
and improved features
 Vital to helping customers make proper product
selections
 Can have important environmental and legal
consequences
Packaging and Labeling
15

 Differentiation
 Creating differences in the firm’s product offering that set it
apart from competing offerings
 Positioning
 Creating a mental image of the product offering and its
differentiating features in the minds of the target market
 Relative Position
 A product’s position vis-à-vis the competition
 Addressed through two tools
 Perceptual mapping
 Strategy canvas
Differentiation and Positioning
16

Hypothetical Perceptual Map of the
Automotive Market (Exhibit 7.5)
17

Hypothetical Strategy Canvas for the
Book Retailing Market (Exhibit 7.6)
18

 Branding is the most important tool of differentiation.
 Other important bases for differentiation
 Product Descriptors (see Exhibit 7.7)
 Product features – factual descriptors of the product and its
characteristics
 Advantages – performance characteristics of how the product
behaves
 Benefits – positive outcomes or need satisfaction
 Customer Support Services
 May be the best way to overcome commoditization
Bases for Differentiation
19

Using Product Descriptors as a Basis for
Differentiation (Exhibit 7.7)
20

Look back at the Top 10 brands in
Exhibit 7.4. What bases do these
brands use for differentiation? What
strategies do they use to create a
relative position in their respective
markets? Why do these brands hold
so much value?
21

 Strengthen the Current Position
 Constantly monitor customer perceptions, needs, and wants
 Raise the bar of customer expectations
 Repositioning
 Often requires a fundamental change in one or more
marketing program elements
Positioning Strategies
22

 The product life cycle is a useful tool for addressing
brand and product strategy over time.
 Limitations of the product life cycle
 Most new products never get past development
 Most successful products never die
 Life cycles really refer to industries, not products or brands
 The length of each stage depends on the actions of other firms
 The product life cycle forces managers to consider
the future of their industry and their brand.
Managing Brands over Time
23

Stages of the Product Life Cycle
(Exhibit 7.8)
24

Strategic Considerations During the
Product Life Cycle (Exhibit 7.9)
25

 No sales revenue during this stage
 Components of the product concept
 An understanding of desired uses and benefits
 A description of the product
 The potential for creating a complete product line
 An analysis of the feasibility of the product concept
 Customer needs should be discerned before
developing marketing strategy
 Test marketing is conducted in this stage.
The Product Life Cycle:
Development Stage
26

 Begins when development is complete and ends
when customers widely accept the product
 Marketing strategy goals during this stage
 Attract customers by raising awareness and interest
 Induce customers to try and buy
 Engage in customer education activities
 Strengthen or expand channel and supply chain relationships
 Build on availability and visibility through trade promotion
 Set pricing objectives
Introduction Stage
27

 Be ready for sustained sales increases and the rapid
increase in profitability early in the growth stage
 Length depends on nature of product and competitive
reactions
 Two main priorities during growth
 Establish a strong, defensible marketing position
 Achieve financial objectives that repay investment
 Marketing strategy shifts from customer acquisition to
customer retention and building brand loyalty.
Growth Stage
28

 Leverage the product’s perceived differential advantages
 Establish a clear brand identity
 Create unique positioning
 Maintain control over product quality
 Maximize availability of the product
 Maintain or enhance the product’s profitability to partners
 Find the ideal balance between price and demand
 Keep an eye focused on the competition
Marketing Strategy Goals During the
Growth Stage
29

 Typically, no more firms will enter the market
 Still an opportunity for new product features and
variations
 Typically the longest stage in the product life cycle
Maturity Stage
30

 Four general goals during the maturity stage
 Generate cash flow
 Hold market share
 Steal market share
 Increase share of customer
 Four strategic options to achieve these goals
 Develop a new product image
 Find and attract new users to the product
 Discover new applications and uses for the product
 Apply new technology to the product
Goals and Strategies During the Maturity
Stage
31

 Two options during the decline stage
 Attempt to postpone the decline
 Accept the inevitability of decline
 Harvesting
 Divesting
 Factors to be considered during this stage
 Market segment potential
 The market position of the product
 The firm’s price and cost structure
 The rate of market deterioration
Decline Stage
32

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