P RODUCT AND P RICE D ECISIONS : E NTERTAINMENT Branding and Entertainment Price Decisions

B RANDING AND E NTERTAINMENT To explain entertainment brand identity, brand marks, and trademarks To identify brand strategies used by entertainment companies To explain how celebrities are brands

T HE R OLE OF B RANDING Branding and packaging-among most important elements in marketing mix today Labeling cars, an airline, soup or movies For ex: Campbell’s means soup Popular brand names are vital to the success of companies and products

O RIGINS OF B RANDING Earliest known brands were seen on paintings of cattle in cave murals in Southern France Stone Age 5000 year old pottery has it’s maker’s identification In 1266, England passed a law that required bakers to mark their breads for identification 1700s-1800s-growth of consumer products led to increased need for manufacturer’s to distinguish theirs from their competition

B RAND I DENTITY T ODAY Choosing a brand identity is an important product decision Brand may include all the feelings and experiences you have regarding a particular company, product, or service Brand identity-consistent feeling or image that consumers recognize when encountering the brand Could purchase an unrecognized item based on brand recognition Ex: Samsung products, Trilogy movies Brand mark-brand name and symbol Sometimes a slogan (catchy phrase) is developed too

D IFFERENT I DENTITIES Difficult to be consistent Ex: Universal Studios: products are varied and widespread (various types of genres, ages, etc.) Walt Disney-family style, G-rated If compromised or lost-cost Disney millions of $

F IXED B RAND IDENTITY Consistency leads to more focused marketing But does limit the market (Ex: Disney only family) Don’t branch out b/c you risk what you have created (Ex: Disney-controversial actors or films) What to do? Create other companies owned by your corporation but not identified with the company name Hollywood Pictures, Touchstone Pictures Splash with Tom Hanks, Dick Tracy with Warren Beatty, Al Pacino, Madonna, Open Range with Kevin Costner

T HE VALUE OF TRADEMARKS Symbols you see everyday that help you identify with goods/services you buy Ex: Golden arches (McDonald’s), peacock logo (NBC), mountain in movie (Paramount Studios) Signify ownership Provide legal protection for the brand and products Licensing-(tie products with a movie)-very profitable for product maker and movie maker Other Types: Soundmark-a trademark identified by a sound Roaring lion (MGM) Motionmark-a trademark identified by a specific movement Winged horse that leaps off the movie screen (Tri-Star Films)

E NTERTAINMENT BRANDS ON THE INTERNET Just as important as conventional marketing Ideal channel for marketing entertainment b/c of multimedia capabilities Need domain name

M USIC AND THE INTERNET In 2003, lawsuits against those who engaged in illegal downloading of music (pirating) Industry believed it violated the copyrights of artists and record companies Some artists agreed with the crackdown but others felt people would always find a way to get free music Apple ipod- legal distribution of music and maintained control of music distribution

C ELEBRITIES AS BRANDS Not just performers Brands-monetary value, just like Nike, Pepsi Brand extension-development and introduction of new products that expand the brand and take advantage of the recognition and image of an established brand name Madonna-Gap hired her for commercials Gap believed she appealed to many ages and would project the idea that Gap sells products for all generations J Lo-clothing line P Ddiddy-clothes

F RANCHISES Entertainment franchise-series of films, programs, character portrayals planned to expand the character’s activities in a series Films TV Franchises

C ROSSOVER ARTISTS Related to a performer’s image or brand is crossover Crossover-an expansion of the popular appeal of an artist or work by achieving success in another market or style For ex: Shania Twain-Country to pop Shaquille O’Neal-bball to rap music to films Purpose: Increase mainstream exposure and stay in the public eye

A RCHIVED B RANDS A brand strategy To become a classis strategy, legendary status Elvis Presley

Q UESTIONS Why can a performer be considered a brand? What is brand extension? What is meant by a crossover artist?

P RICE D ECISIONS To define gross profit and net profit To identify different pricing goals To identify factors that determine CD and concert ticket prices

R EVENUE, PROFIT, LOSS Revenue-total income brought in through the sales of goods and services Can include ticket sales, merchandise sales, or concession sales, advertising income from selling spots on TV or radio Product placement-appearance of a product as a prop in a film or TV show, in exchange for a fee paid by the product’s advertiser. For ex: German automaker BMW paid $15 mill to MGM to have its cars in James Bond movies MGM includes this revenue as part of rev for film

P ROFIT Gross profit-revenue minus the cost of the goods sold Revenue-Cost=Profit Examples of costs for film: film negatives, theater, actors’ salaries, stage production, etc. Net profit-gross profit minus expenses (or those costs out of production) These costs are most commonly-taxes Could also be advertising, PR, selling costs

PRICING STRATEGIES AND GOALS In the entertainment field, it is similar to retail pricing for goods. Marketers must determine goals for pricing Could be based on: recovering costs getting a specific return on investment hitting profit goals meeting or beating the competition

R ECOVERING C OSTS Difficult to make a profit in the entertainment industry CDs released by record companies do not recover the cost of production and distribution Prices of CDs must be set high enough to recover the costs Profits from successful CDs help to offset those of no success

R ETURN ON INVESTMENT ROI-for every dollar the company puts into a project, the goal is to get the maximum return For ex: an entertainment company could look at these options: 1 dollar put in a bank might bring a return of two to four cents on the dollar, before taxes, with very little risk 1 dollar could be invested in producing a CD by a new band and earn 5-10 cents per dollar, with a very high risk of total loss of investment-or the slim chance it oucld earn millions of dollars Movie production pricing The failure rate is very high Marketers must look at a variety of pricing goals