Chapter 7 Branding and Licensing

Objectives Explain the concepts of branding and brand equity. Explain the concepts of branding and brand equity. Discuss the types of brands. Discuss the types of brands. Describe how to develop an effective brand name. Describe how to develop an effective brand name. Discuss product licensing and how licensed goods are merchandised. Discuss product licensing and how licensed goods are merchandised. Explain the importance of sports sponsorships and endorsements. Explain the importance of sports sponsorships and endorsements. Discuss how companies choose sports endorsers for their products. Discuss how companies choose sports endorsers for their products.

Case Study – Race For The Prize (NASCAR) To fund their races, the National Association for Stock Car Auto Racing (NASCAR) receives race fees from track owners, annual fees from driving teams, a percentage of television revenue and licensed merchandise, and other sponsorship money. NASCAR’s 75 million fans each support a favorite driver by buying products of that driver’s sponsor. They demonstrate a 72 percent loyalty to sponsor brands, double that of any sport. To fund their races, the National Association for Stock Car Auto Racing (NASCAR) receives race fees from track owners, annual fees from driving teams, a percentage of television revenue and licensed merchandise, and other sponsorship money. NASCAR’s 75 million fans each support a favorite driver by buying products of that driver’s sponsor. They demonstrate a 72 percent loyalty to sponsor brands, double that of any sport. Analyze and write. Analyze and write. (100 Total Points/25 Points Each) (100 Total Points/25 Points Each) 1) Why are NASCAR fans considered loyal to their sponsor brands? 1) Why are NASCAR fans considered loyal to their sponsor brands? 2) Why did NASCAR change sponsorship from Winston (cigarettes) to Sprint (phones)? 2) Why did NASCAR change sponsorship from Winston (cigarettes) to Sprint (phones)? 3) Why was Dale Earnhardt Sr. (The Intimidator) so popular? 3) Why was Dale Earnhardt Sr. (The Intimidator) so popular? 4) Will Dale Earnhardt Jr. ever be as popular as his father? Why? 4) Will Dale Earnhardt Jr. ever be as popular as his father? Why?

Section 7.1 Branding

The Importance of Branding A “brand” is a name, word or words, symbol, or design that identifies an organization and its products. A “brand” is a name, word or words, symbol, or design that identifies an organization and its products. Ex.: Nike Swoosh Ex.: Nike Swoosh List/Identify 5 brands. List/Identify 5 brands. 1)______________ 1)______________ 2)______________ 2)______________ 3)______________ 3)______________ 4)______________ 4)______________ 5)______________ 5)______________

What’s In A Name A “brand name” is a word or words, letters, or numbers representing a brand that can be spoken, such as Gatorade, or the Boston Celtics. A “brand name” is a word or words, letters, or numbers representing a brand that can be spoken, such as Gatorade, or the Boston Celtics. A “trade name” is the legal name of the company (Reebok). A “trade name” is the legal name of the company (Reebok). A “trademark” is a device that legally identifies ownership of a registered brand or trade name. A “trademark” is a device that legally identifies ownership of a registered brand or trade name.

Brand Personality A “brand personality” involves attracting human traits to a brand name. A “brand personality” involves attracting human traits to a brand name. Ex.: Nike used famous athletes who endorse their products. Ex.: Nike used famous athletes who endorse their products. Ex.: The New York Yankees have won 26 championships on 100 years – therefore they are recognized, and have brand personality. Ex.: The New York Yankees have won 26 championships on 100 years – therefore they are recognized, and have brand personality.

Brand Equity “Brand Equity” is the value a brand has beyond its actual functional benefits. “Brand Equity” is the value a brand has beyond its actual functional benefits.

Establishing A Brand Name – 3 Steps 1) “Develop” the brand in the customer’s mind as part of a class of products. Ex.: Gatorade is a sports drink. 1) “Develop” the brand in the customer’s mind as part of a class of products. Ex.: Gatorade is a sports drink. 2)”Link” the product’s brand name to its function and make some type of emotional connection with the product. Ex.: Gatorade helps athletes perform better. 2)”Link” the product’s brand name to its function and make some type of emotional connection with the product. Ex.: Gatorade helps athletes perform better. 3) “Help” consumers think and feel the way you want them regarding your product. Ex.: Gatorade is the best product of choice for winning athletes. 3) “Help” consumers think and feel the way you want them regarding your product. Ex.: Gatorade is the best product of choice for winning athletes.

Types of Brand and Strategies 1) Manufacturer Brands 1) Manufacturer Brands 2) Intermediary Brands 2) Intermediary Brands 3) Generic Brands 3) Generic Brands

Manufacturer Brands A “manufacturer brand” is owned by the producer of the product. A “manufacturer brand” is owned by the producer of the product.

Multi-Product Branding This is used when the manufacturer uses on name for all its products. Ex.: (Nike – basketball, soccer, golf…). This is used when the manufacturer uses on name for all its products. Ex.: (Nike – basketball, soccer, golf…).

Multi-Branding “Multi-branding” means that each product in a product line has a distinctive name. “Multi-branding” means that each product in a product line has a distinctive name. Ex.: Proctor and Gamble’s deodorant product line has Old Spice for men, and Secret for women. Ex.: Proctor and Gamble’s deodorant product line has Old Spice for men, and Secret for women.

Co-Branding “Co-Branding” combines one or more brands to increase customer loyalty and sales for each product. Ex.: Buick (automobile) and PGA (Professional Golf Association). “Co-Branding” combines one or more brands to increase customer loyalty and sales for each product. Ex.: Buick (automobile) and PGA (Professional Golf Association).

Intermediary Brands An “intermediary brand” carries a name developed by the wholesaler, retailer, or catalog house. An “intermediary brand” carries a name developed by the wholesaler, retailer, or catalog house. Ex.: Gander Mountain uses their name as a “private label.” Ex.: Gander Mountain uses their name as a “private label.”

Generic Brand A “generic brand” represents a general product category and does not carry a company or brand name. Ex.: Food Lion Pizza. A “generic brand” represents a general product category and does not carry a company or brand name. Ex.: Food Lion Pizza.

Developing Brand Names - Guidelines 1) Offer a benefit. 1) Offer a benefit. 2) Be simple. 2) Be simple. 3) Be different and positive 3) Be different and positive 4) Reflect an image. 4) Reflect an image. 5) Be previously unregistered. 5) Be previously unregistered.

Pairs Activity – Develop Your Brand Name (100 Total Points/25 Points Each) (100 Total Points/25 Points Each) Brainstorm a product and create a brand name for it. Brainstorm a product and create a brand name for it. Your product “brand name” must include: 1) Benefit, 2) Simplistic Name, 3) Different and Positive connotation, 4) Reflect an image. Your product “brand name” must include: 1) Benefit, 2) Simplistic Name, 3) Different and Positive connotation, 4) Reflect an image. Explain all 4 of the above after determining your product and brand name. Explain all 4 of the above after determining your product and brand name.

Be Simple Simple Brand Names – Nike, Puma, Addidas. Simple Brand Names – Nike, Puma, Addidas.

Be Different and Positive The Puma brand has a positive association as it projects an image of a fast animal in the cat family, such as a cougar or mountain lion. The Puma brand has a positive association as it projects an image of a fast animal in the cat family, such as a cougar or mountain lion.

Reflect An Image Ex.: Wheaties cereal – “The Breakfast of Champions.” Ex.: Wheaties cereal – “The Breakfast of Champions.”

Be Previously Unregistered A brand name cannot be previously registered with the U.S. Patent and Trademark Office. A brand name cannot be previously registered with the U.S. Patent and Trademark Office.

Make It Last Choosing a name, symbol, device, or slogan for a business is a critical process. Choosing a name, symbol, device, or slogan for a business is a critical process. A good brand name will last over time. A good brand name will last over time. Ex.: Nike Swoosh. Other examples are ______________.

Section 7.2 Licensing

Licensing and Merchandise “Licensing” is an agreement that gives a company the right to use another’s brand name, patent, or other intellectual property for a royalty or fee. “Licensing” is an agreement that gives a company the right to use another’s brand name, patent, or other intellectual property for a royalty or fee. The “licensor” is the company or individual granting the license for a fee in this legally binding contract. The “licensor” is the company or individual granting the license for a fee in this legally binding contract. The “licensee” is the company or individual paying for the rights to use the licensor’s name or property. The “licensee” is the company or individual paying for the rights to use the licensor’s name or property.

Licensed Products In sports marketing, a company must pay a fee to use a league’s, team’s, or individual’s name, image, or logo on a product or its packaging. In sports marketing, a company must pay a fee to use a league’s, team’s, or individual’s name, image, or logo on a product or its packaging. Ex.: NFL grants product licenses to companies that want to use the NFL logo. Ex.: NFL grants product licenses to companies that want to use the NFL logo.

Sponsorships and Endorsements Two forms of licensing are “sponsorships” and “endorsements.” Two forms of licensing are “sponsorships” and “endorsements.”

Sponsorships “Sponsorships” are the promotional vehicles that financially support sporting events. “Sponsorships” are the promotional vehicles that financially support sporting events. Ex.: NASCAR driver Dale Earnhardt Jr.’s race team is sponsored by AMP Energy Drink. Ex.: NASCAR driver Dale Earnhardt Jr.’s race team is sponsored by AMP Energy Drink. Some other sponsors are ___________. Some other sponsors are ___________.

Importance of Sponsorships Operating sports events and leagues requires a significant amount of money. Operating sports events and leagues requires a significant amount of money. Ex.: NBA players salaries – Kobe Bryant, Lebron James – in excess of $100 million dollars. Ex.: NBA players salaries – Kobe Bryant, Lebron James – in excess of $100 million dollars.

Types of Sponsorship 1) Sponsoring an event. Ex.: Tostitos Fiesta Bowl (College Football Bowl Game) 1) Sponsoring an event. Ex.: Tostitos Fiesta Bowl (College Football Bowl Game) 2) Sponsoring a portion of the event. 2) Sponsoring a portion of the event. Ex.: Fox Sports NFL Halftime Show 3) Signage – companies can be signs for baseball/football/soccer/hockey games and place them in the stadiums or arenas. 3) Signage – companies can be signs for baseball/football/soccer/hockey games and place them in the stadiums or arenas.

Premium Sponsors A company must pay more to be the official sponsor. Ex.: FedEx Field (Washington Redskins). A company must pay more to be the official sponsor. Ex.: FedEx Field (Washington Redskins). Some of these sponsorships exceed $100 million over a 20 year period. Some of these sponsorships exceed $100 million over a 20 year period.

Entitlements “Entitlements” occur when there is one major sponsor for an event. “Entitlements” occur when there is one major sponsor for an event. Ex.: NASCAR signed a 10 year agreement with Nextel, a cell phone service, to be their title sponsor. Ex.: NASCAR signed a 10 year agreement with Nextel, a cell phone service, to be their title sponsor.

Facility Entitlements Ex.: Heinz Field (NFL – Pittsburgh Steelers) Ex.: Heinz Field (NFL – Pittsburgh Steelers) Name 10 other facility entitlements. Name 10 other facility entitlements. 1)_______________ 1)_______________ 2)_______________ 2)_______________ 3)_______________ 3)_______________ 4)_______________ 4)_______________ 5)_______________ 5)_______________ 6)_______________ 6)_______________ 7)_______________ 7)_______________ 8)_______________ 8)_______________ 9)_______________ 9)_______________ 10)______________ 10)______________

Product Exclusivity “Product Exclusivity is another premium sponsorship whereby only one product in a product category is granted sponsorship. “Product Exclusivity is another premium sponsorship whereby only one product in a product category is granted sponsorship. Ex.: Coca-Cola – the official drink of the Olympic Games. Ex.: Coca-Cola – the official drink of the Olympic Games. Ex.: Papa John’s Pizza – official pizza of the Redskins. Ex.: Papa John’s Pizza – official pizza of the Redskins.

Endorsements “Endorsements” are a statement or approval of a product, service, or idea made by an individual or organization speaking on behalf of the advertiser. “Endorsements” are a statement or approval of a product, service, or idea made by an individual or organization speaking on behalf of the advertiser. List 5 athletes and the products they endorse: List 5 athletes and the products they endorse: 1)_______________________ 1)_______________________ 2)_______________________ 2)_______________________ 3)_______________________ 3)_______________________ 4)_______________________ 4)_______________________ 5)_______________________ 5)_______________________

Cross-Curricular Activity – Informational Writing (100 Points) (100 Points) Choose/List 5 athletes and products they endorse. Then choose 1 athlete/product to write about in detail. Choose/List 5 athletes and products they endorse. Then choose 1 athlete/product to write about in detail. Explain in ½ page: 1) Why consumers buy this product, 2) Why this product is successful, because of the specific athlete’s endorsement (why it sells), 3) Why you would buy it. Explain in ½ page: 1) Why consumers buy this product, 2) Why this product is successful, because of the specific athlete’s endorsement (why it sells), 3) Why you would buy it.

Association Endorsements my simply involve an association with a product. Endorsements my simply involve an association with a product. Ex.: Michael Jordan – Hanes Underwear. Ex.: Michael Jordan – Hanes Underwear.

Demographic Match A company may choose a sports figure who matches the demographic profile of its customer base. A company may choose a sports figure who matches the demographic profile of its customer base. An example is __________________. An example is __________________.

Successful Careers Top sport endorsers come from all sports, but they have one thing in common – successful careers. Top sport endorsers come from all sports, but they have one thing in common – successful careers. Ex.: Tiger Woods Ex.: Tiger Woods

Image Endorsements sell products when the endorser has a positive image and is popular. Endorsements sell products when the endorser has a positive image and is popular. Personal lives for better or worse play an important part of image. Personal lives for better or worse play an important part of image. List 5 athletes with a positive image: List 5 athletes with a positive image: 1)_________________ 1)_________________ 2)_________________ 2)_________________ 3)_________________ 3)_________________ 4)_________________ 4)_________________ 5)_________________ 5)_________________ List 5 athletes with a negative image: List 5 athletes with a negative image: 1)_________________ 1)_________________ 2)_________________ 2)_________________ 3)_________________ 3)_________________ 4)_________________ 4)_________________ 5)_________________ 5)_________________

Differentiating Three Types of Brands (100 Total Points/10 Points Each) (100 Total Points/10 Points Each) Choose 10 sports products and place them in the appropriate branding category – 1) Manufacturer Brands, 2) Intermediary Brands, 3) Generic Brands. Choose 10 sports products and place them in the appropriate branding category – 1) Manufacturer Brands, 2) Intermediary Brands, 3) Generic Brands.

Corporate Sponsorships (100 Total Points) (100 Total Points) Watch 2 different professional sports games. Answer the following from each game. Watch 2 different professional sports games. Answer the following from each game. What types of sponsorship are present? What types of sponsorship are present? Is a company sponsoring the entire game or just a portion? Is a company sponsoring the entire game or just a portion? Is a company buying signage at the stadium? Is a company buying signage at the stadium? Is a company’s logo being used on equipment? Is a company’s logo being used on equipment? Record your observations for each game. Record your observations for each game. Game #1 Game #1 Game #2 Game #2

Checking Concepts/ Critical Thinking/Cross-Curriculum Skills (100 Total Points/10 Points Each) (100 Total Points/10 Points Each) 1) Define brand and brand name. 1) Define brand and brand name. 2) Explain the concept of branding and its components. 2) Explain the concept of branding and its components. 3) Explain how brand equity is developed. 3) Explain how brand equity is developed. 4) Differentiate between the three basic types of brands. 4) Differentiate between the three basic types of brands. 5) Define co-branding. 5) Define co-branding. 6) Explain product licensing. 6) Explain product licensing. 7) Explain why sponsorships and endorsement are important to sports organizations and sponsors. 7) Explain why sponsorships and endorsement are important to sports organizations and sponsors. 8) Discuss the importance of an athlete’s image to a company that is choosing an endorser. 8) Discuss the importance of an athlete’s image to a company that is choosing an endorser. 9) What do you believe is the most identifiable sports product? Why? 9) What do you believe is the most identifiable sports product? Why? 10) Imagine you are the agent for a major sports figure. Your job is to arrange an endorsement that will benefit your client’s professional goals. Write a paragraph to your potential sponsor about your client. 10) Imagine you are the agent for a major sports figure. Your job is to arrange an endorsement that will benefit your client’s professional goals. Write a paragraph to your potential sponsor about your client.