Branding Licensing 2

Chapter Objectives Explain the concepts of branding and brand equity. Discuss the types of brands. Describe how to develop an effective brand name. Discuss product licensing and how licensed goods are merchandised. Explain the importance of sports sponsorships and endorsements. Discuss how companies choose sports endorsers for their products. 3

The Importance of Branding brands Sports organizations and companies strive to develop strong brands to differentiate themselves from one another. brand a name, word or words, symbol, or design that identifies an organization and its products 4

The Importance of Branding 5 brand name trademark When a brand name or trade name is registered, it also becomes a trademark. brand name a word or words, letters, or numbers representing a brand that can be spoken Ex: “Gatorade” or “Los Angeles Lakers” trademark a device that legally identifies ownership of a registered brand or trade name TM = Trademark SM = Service Mark ® = Registered Trademark © = Copyrighted

Logo History: Who’s the mystery player dribbling on the NBA logo? Jerry West, former Lakers guard from 1960 to

The Importance of Branding Branding is important for building customer loyalty. Customers expect the same quality from the brands they buy or teams they watch. Customers familiar with the original brand are more likely to trust a new product with the same brand. 7

The Importance of Branding Brand Personality involves attaching human traits to a brand name. Ex: Nike and other sports footwear companies often have professional athletes endorse their products to create a “winning” brand personality. Ex: Skechers brand sport footwear tries to develop a cool, hip brand personality through its sales. 8

The Importance of Branding brand equity Customers are generally willing to pay a higher price for products with brand equity. Brand equity has financial value through licensing. brand equity the value a brand has beyond its actual functional benefits 9 When a brand becomes very popular, its value becomes a competitive advantage because most consumers equate the brand with quality.

The Importance of Branding The three steps of developing brand equity are: 10 1.Develop the brand in the customer’s mind as part of a class of products.(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.(Gatorade helps athletes to perform better in athletic events.) 3.Help consumers think and feel the way you want them to regarding your product.(Gatorade is the best product of choice for successful athletes.)

The Importance of Branding 11 1.Develop the brand in the customer’s mind as part of a class of products.(The Yankees are a professional baseball team.) 2.Link the product’s brand name to its function and make some type of emotional connection with the product.(The Yankees fans think positively about the club and players.) 3.Help consumers think and feel the way you want them to regarding your product.(Yankee fans stick with their team through good and bad seasons because of the bond they have with the team.)

Create a Brand 12 Divide into groups and create a brand name for the product of your choice. Next, plan how you would develop brand equity for this product. Remember to follow the three steps outlined in the lesson: 1.Develop 2.Link 3.Help

The World’s Most Valuable Brands How Much Does a Brand Cost? worlds-most-recognizable.html

Types of Brands and Strategies The three basic types of brands are: Manufacturer brand 2. Intermediary brands 3. Generic brands Manufacturer Brand a brand owned by the producer of the product What things do you buy by brand names? What determines whether a brand name is important?

15 Manufacturers may use: Multi-Product Branding One name is used for all products. Major advertising advantage. Ex: Nike baseball, running, soccer, etc. lines use multiproduct branding. Nike capitalizes on it name and image to sell all product lines. Multi-Branding Each product in a product line has a distinctive name. If one product fails it does not affect the others. Separate promotional plans is costly. Ex: Procter & Gamble has Secret for women, Old Spice for men, and Sure for men or women. 1. Manufacturer Brand

16 Manufacturers may use: Co-Branding Two different manufacturers may partner to produce one produce. Products need to complement each other. Ex: Cold Stone Creamery has worked with Oreo, JELL-O and Jelly Belly to produce new and unique ice cream flavors. In turn, Jelly Belly, for example, launched a Cold Stone Creamery line of jelly bean flavors. co-branding a branding strategy that combines one or more brands to increase customer loyalty and sales for each product

Types of Brands and Strategies Intermediary Brands Intermediaries contract with manufacturers to make products that are sold under their own private label.Intermediaries contract with manufacturers to make products that are sold under their own private label. Ex: Gander Mountain & Cabelas intermediary brand a brand that carries a name developed by the wholesaler, retailer, or catalog house 3. Generic Brands Does not carry a company or brand name.Does not carry a company or brand name. Unlikely to see in the sport industry for apparel or equipment.Unlikely to see in the sport industry for apparel or equipment. generic brands a brand that represents a general product category and does not carry a company or brand name

Developing Brand Names Choosing and developing a good brand name requires thought and planning. 18 Top 5 Athletic Shoe Brands 5. Converse 4. Puma 3. Reebok 2. Adidas 1. Nike Brand names should: Offer a benefit Be simple Be different and positive Reflect an image Be previously unregistered

Developing Brand Names 19 Offer a benefit The sports drink Gatorade was given that name because it helped the University of Florida football team, the Gators, play better when it was hot. The team because known as the “second half” team because of the team’s stamina in the second half of the game. The sports drink (“ade”) served to help (sounds like “aid”) the Gators.

Developing Brand Names 20 Be simple Simple is more memorable. Ex: Nike, Adidas, Puma, Reebok Be different and positive Ex: Puma is a fast animal in the cat family. Ex: Team names are distinctive – Yankees, Red Sox, White Sox, Giants

Developing Brand Names 21 Reflect an image Branding should say something about the product. Ex: The positive association with the sports industry helps to create a distinctive image of Wheaties as the Breakfast of Champions. Be previously unregistered ( Ex: Country Club Industries wanted to register “Sport Powerace” as a brand of drinking water. Coca-Cola opposed because it was too similar to its registered brand-name sports drink, Powerade.

What are the three steps involved in developing brand equity? Name and provide an example of the three types of brands. What rules should be followed when developing a good brand name?

Licensing and Merchandising licensing Sports teams and athletes may have licensing agreements with product manufacturers. 23 licensing an agreement which 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. The licensee is the company or individual paying for the rights to use the licensor’s name or property.

Licensing and Merchandising The licensor must be careful to select products that reflect the image its brand has in the public eye. If the licensee produces poor-quality merchandise, the licensor’s image may be damaged. Winning teams and players sell more merchandise. 24

Licensing and Merchandising Licensed merchandise is made available through many channels of distribution. (good or bad?) Special promotional deals create partnerships between the licensor and the licensee to help boost store traffic. Sweepstakes and contests are run by the sponsor, with the prize being tickets to the sporting event. Some licensed products are used as promotional incentives for customers to buy a product. 25

Benefits of Licensing 26 Sports Organizations Companies Reinforce image Build team spirit Build presence through merchandise Reach a new audience Publicity Revenue Brand awareness Mutual Advantages

Sponsorships and Endorsements Sponsorships are the promotional vehicles that financially support sports events. (need to survive) 27 Types of sponsorships include: Signage Entitlements Facility entitlements Product exclusivity

Sponsorships and Endorsements 28 Signage During a game can be seen in person or TV. Scoreboard, floorboards, rafters, fences, & rotating electronic screens. Don’t need to buy airtime. NASCAR offers a variety of sponsorship opportunities: Dashboard, side door, rear panel, top, hood, wheel area, racetrack, driver’s or pit crews uniform.

29 Entitlements There is one major sponsor for an event/season. Ex: NASCAR signed a contract with Sprint. Previously was Nextel & Winston. Ex: PGA has a sponsor for each event. A company must pay more to be the official or title sponsor.

Sponsorships and Endorsements 30 Facility entitlements Company purchases the promotional rights to an entire stadium. Ex: MetLife Stadium Exposure is there for all events held at the stadium during the season and off-season.

31 Product exclusivity One product in a product category is granted sponsorship. Competition is prevented from selling or promoting their products during the sponsored events. Ex: Coca-Cola is the only soft drink that can be sold at the Olympic Games.

Sponsorships and Endorsements An endorsement is a statement of approval of a product, service, or idea made by an individual or organization speaking on behalf of the advertiser. 32 Some important considerations are: Association Demographic match Successful careers Image

33 Association There may be no direct relationship between the product and the athlete. Company believes the association will help sell products. Ex: Michael Jordan endorsed Hanes wear.

34 Demographic match Sports figures who matches the demographic profile of its customer base. Ex: To reach a target market of African Americans, a company may choose a successful African American athlete. Successful careers Top performers or promising newcomers. Compensated with money or free services and goods.

35 LeBron James : Before he graduated from high school to set foot on a professional basketball court in 2003, he was being asked to endorse products. James negotiated endorsement deals with: Nike $90 million Upper Deck trading cards $6 million Coca-Cola to endorse Sprite and Powerade. Michael Jordan has his own product line with Nike

36 Image Endorsements sell products when the endorser has a positive image and is popular. Image is a major factor when companies decide to renew contracts with their endorsers. Celebrities are role models in the public eye. Who would make a good sports figure to represent West Milford High School?

37 Image (cont.) Most endorsements have clauses that will release the company from the contract if the celebrity’s image is tainted. (law or performance) Bad publicity can mean the end of profitable endorsement deals. What athletes have lost endorsements? Lance Armstrong Ben Johnson Mike Tyson

Sports Appeal Through licensing, sponsorships, or endorsements, companies can generate positive publicity and achieve their marketing goals of increasing brand awareness and sales. 38

Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses. Though Many larger dot-com companies crashed in the 1990’s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service. Describe an e-business’s home page to your class after viewing one through marketingseries.glencoe.com.marketingseries.glencoe.com Your Online Sports Arena 39 interactive polls, statistics, streaming broadcasts, and merchandise. The Web’s ability to integrate these different forms of media and commerce makes it perfect for satisfying a sports enthusiast's every need. Major sports organizations such as NASCAR offer sophisticated sites that provide not only news and information about your sports figures, but also links to tickets, TV schedules,

Name two forms of licensing. How do sponsorships benefit the sports organization and the sponsor? What do companies consider when selecting a sports celebrity for endorsement of a product?

Define brand and brand name. 41 Explain the concept of branding and its components. A brand is a name, word or words, symbol, or design that identifies an organization and its products. A brand name is a word or words, letters, or numbers representing a brand that can be spoken. 1.Branding involves any name, symbol, or device an organization uses to identify itself and its products. 2. Explain how brand equity is developed. Brand equity, the value a brand has beyond its actual functional benefits, is developed in the consumer’s mind when the brand is identified as part of a class of products. 3. Checking Concepts continued

Differentiate between the three basic types of brands. 42 Define co-branding. Manufacturer brands are owned by the producer of the product; intermediary brands carry a name developed by the wholesaler, the retailer, or catalog house; generic brands carry no branding. 4. Explain product licensing. Co-branding is a branding strategy that combines one or more brands to increase customer loyalty and sales for each product. 5. Licensing is a contract agreement which gives a company the right to use another brand name, patent, or other intellectual property for a royalty or fee. Licensed goods are available in retail department stores, chain stores, league- sponsored retail outlets, and on the Internet. 6. Checking Concepts continued

Explain why sponsorships and endorsements are important to sports organizations and sponsors. All major sports organizations use sponsorships to help finance their operations; sponsors get exposure of their products and free publicity. Endorsements involve using a celebrity or public figure to represent and promote a company and its products; the celebrity lends credibility to the product while he/she is handsomely paid. 7. Discuss the importance of an athlete's image to a company that is choosing and endorser. 43 Critical Thinking Endorsers must match target markets, have successful careers, and have positive public images. 8. Checking Concepts 7. 8.

Jeopardy Game chapter-7-branding-and-licensing 44

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