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Difference Between Product and Brand
Difference Between Product and Brand
Difference Between Product and Brand
1.Product is made in
a factory 2. A product can be copied. 3. A product can be quickly outdated.
1. A brand is bought
by the customer . 2. A brand is unique. 3. A successful brand is timeless
BRAND EQUITY
BRAND EQUITY : is a set of brand assets and
liabilities linked to a brand , its name and symbol , that add to or subtract from the value provided by a product or service to a firm and /or to that firms customers. For assets or liabilities to underlie brand equity they must be linked to the name and/or symbol of the brand.
BRAND EQUITY
The assets and liabilities on which brand equity is
based can be grouped into 5 categories 1) Brand Loyalty 2) Name awareness 3) Perceived quality 4)Brand associations in addition to perceived quality 5)other proprietary assets : patents, trademarks,channel relationship etc.
BRAND EQUITY
Name Awareness Brand Loyalty Brand Equity Provides value to customer by enhancing customers Interpretation /Processing of information. Confidence in the purchase decision. Use satisfaction/delight Perceived quality Brand Associations Other proprietary brand assets
Provides value to firm by enhancing:Efficiency and effectiveness of marketing programs Prices/Margins Brand Extensions Trade Leverage Competitive advantage
and business . It is estimated that it costs $50 -100 million to develop and launch a new consumer product and chances of success is around 12-15%.. Thus on an average a firm will have to make 6 products costing $ 300 million (taking the lower estimate)to ensure atleast one winner. A firm thus should be willing to pay $ 300 million to an established brand in the category of interest.
brands. 1) Find market value of firm --> function of stock price and number of shares 2) Find the replacement cost of tangible assets (plant, machinery, inventories, cash) 3) Subtract 2 from 1 4)The balance intangible assets is distribute into three components : value of brand equity , value of nonbrand factors (R&D, PATENTS) and value of industry factors (regulation and concentration) 5) Brand equity is presumed to be a function of age of the brand, entry of the brand in the market (older brand has more equity), cumulative advertising (advertising creates equity) and the current share of industry advertising (current advertising share is related to positioning advantages).
Perceived quality :
What drives perceived quality? What is important to the customer What signals quality Is perceived quality valued- or is the market moving towards a commodity business Are prices and margins wear away How do competitors stack up with respect to perceived quality. Other brand assets: Is there a patent or trademark that is important? Are there channel relationships that provide barriers to competitors? Are sustainable competitive advantages attached tot he brand name that are not reflected in the other four equity dimensions?
Brand Associations :
What mental image does the brand stimulate/evoke? Is that image a competitive advantage Is there a slogan/ punch line /tagline /symbol that is a differentiating asset? How are the brand/competitors positioned. Evaluate each position with respect to its value/relevance to consumers and how protected /vulnerable it is to competitors.Which position is the most valuable and protected What does the brand mean? What are its strongest associations?
air into the soap mixture. Ivory was a remarkable product in a time when most soaps were yellow or brown , irrated skin. Also during those times the floatation value had practical value for those who were frustrated trying to find their soap in water. Well positioned soap----> pure, mild and floated. The claims of purity and mildness were supported by white color, name Ivory, the twin slogans and association with babies. In 1941 , Lever Brothers launched Swan to challenge Ivory, but as there was no product difference , the brand failed.
develop competing brands (multi brand concept) in order to serve new segments , even if new brands threaten existing brands. P&G has 10 brands in laundry detergent category which reach a variety of segment s and has given P&G a 40%+ market share . 1) Ivory Snow : ninety-nine and forty-four onehundredths percent pure,, the mild gentle soap for diapers and baby clothes 2) Tide--- For extra-tough family laundry jobs-Tides in , dirts out
Cheer -works in cold, warm or hot water- All temperature Cheer Gain- detergent with fragrance - Bursting with freshness. Bold 3 - includes fabric softener - Cleans , softens and controls static Dash- concentrated power, less suds to avoid clogging washing
machines Dreft- with Borax, natures natural sweetener for babys clothes Oxydol:- contains bleach-for sparkling whites -with color safe bleach. Era- concentrated liquid detergent-with proteins to clean stains Solo- heavy duty with fabric softener
Brand Loyalty
Brand Loyalty pyramid
Committed buyer
Satisfied buyer with switching costs Habitual buyer- no reason to change Switchers /price sensitive- indifferent- no brand loyalty
Repurchase rates: What % of Maruti Zen owners purchase Zen on their next purchase % of Purchases: of the last five purchases made by a customer, what % went to each brand purchased? Number of Brands Purchased: What % of coffee buyers bought only a single brand?, two brands?
Switching costs: If it is expensive or risky for a firm or consumer to
change suppliers, then the brand loyalty is on the higher side. E.g : Investment in computer system or software like SAP
customers then to attract new one ( COST RATIO IS 1:4) Trade leverage: Strong pull (brand loyalty) from consumers will ensure preferred shelf space because stores know that customers will have such brands on their shopping list. Attracting new customers: Time to respond to competitive threats:If a competitor develops a superior product , a loyal following will allow the firm time needed for the product improvements to be matched and neutralized.
Provide extras
Regular
surveys of customer satisfaction are useful in understanding how customers feel and it also helps in adjusting product and services. Dominos Pizza conducts weekly phone surveys of customers measuring dimensions like response time, lumpiness of dough, freshness of pepperoni and attitude of delivery people. A bonus pool is distributed based upon these measures. Create Switching costs: Reward loyalty directly. For e.g The airlines frequent flyers program .
Brand Awareness
Ability of a potential buyer to recognize or recall that a
1) Anchor to which other associations can be attached : for e.g McDonalds:Golden arches, clean/efficient, kids , fun etc. 2) Familiarity/Liking: recognition provides the brand with familiarity and people like the familiar. 3)Substance /commitment: The firm has been in business for a long time. The firm is widely distributed and the brand is successful. 4) Brands to consider ----- it enters the evoked or consideration set.
tandorosti hai wahan. Symbol exposure: colonel sanders --KFC, golden archesMcdonalds---> symbol should closely associate with the brand. Publicity--- advertisement. Event Sponsorship --- Femina Miss India, Manikchand Filmfare awards.
Consider brand Extensions : one way to gain brand recall
Perceived Quality
Defn : customers perception of the overall
quality or superiority of a product or service with respect to its intended purpose, relative to alternatives.
Perceived Quality
Quality dimensions :
1) Performance : How well does a washing machine wash clothes---> primary operating characteristics of service 2) Features: secondary elements like on/off timer in washing machine etc. 3) Conformance with specifications: --- absence of defects----trouble free . 4) Reliability--- will the vacuum cleaner work the same way each time it is used. 5) Durability: How long will the washing machine last 6) Serviceability: is the service system efficient , competent and convenient. 7) Fit and finish:- does the product look and feel like a quality product.
Perceived Quality
Research has shown that in many product classes a key
dimension which is visible can be pivotable in affecting perceptions. 1) Stereo Speakers: larger size means better sound 2) Tomato ketchup-- thickness means quality. 3) Supermarkets--- fresh products means overall quality. 4) cars: a solid door-closure sound implies good workmanship and a solid safe body. 5) lawn mover-- noise signals quality