1. COMP 6125 An Introduction to Electronic Commerce
Session 2: Branding on the Web

2. Introduction
Successful branding (I.e: known and respected) creates a powerful statement of quality, value and other desirable qualities in one recognizable element to potential customers
Products become easier to advertise and promote as each item carries the reputation of the brand name
Examples: Gap clothing, Mercedes vehicles, Walt Disney entertainment

3. Key Elements Of A Brand Differentiation The Issue:
First condition that must be met
Product must be clearly distinguished from all others in the market
The Issue:
Difficult for commodity products, but not impossible
Example is the success of Ivory Soap by Proctor & Gamble

4. Key Elements Of Branding
Relevance
Degree to which the product offers utility to a potential customer; i.e: visualizing how it can be included in their life/lifestyle
The Issue
Brand only has meaning to a customer if he can visualize it in his life
Example is Tiffany & Co that offers a unique line of jewellery and gift products but does not capture a large market as few people see themselves purchasing and using the products

5. Key Elements Of Branding
Perceived value
Key element in creating a brand that has value
Customers may distinguish it from other products
The Issues:
Customers may distinguish it from other products/services and may even see themselves using, but will avoid it because they cannot see it as having value to them
Examples are fast food restaurants that have well-established brand names but due to negative association (low quality, high fat-content, etc), persons avoid eating at them

6. Points Of Note Figure 4-11, pg 196
Buyers will only purchase product and become familiar with how it provides value once a brand has established that it is different from other competing brands and inspires a perception of value
Brands become established only when the level of buyer understanding and acceptance is high
Sometimes a brand can lose its value if the environment in which it was successful has changed

7. Emotional Vs Rational Branding
Traditional use of emotional appeal in advertising and promotional efforts
Difficult to convey on Internet – active medium; site users are “busy” with set goals in mind and most often shy away from emotional appeals
Rational branding is when companies attempt to offer assistance to site visitors in exchange for viewing an ad; relies on cognitive appeal of specific help offered
Example: Hotmail offers a valuable service of and storage space, and users see an ad on each page the provides these services

8. Brand Leveraging
This strategy involves well-established sites extending their dominant positions to other products and services
It adds features that are useful to already existing customers
Example: Amazon.com expanding from just books to include CDs, videos, etc
Only works for those companies that already have sites that dominate a particular market

9. Brand Consolidation
This strategy involves bringing together related interests and needs of customers from well-established branded companies
Could include acting as a market intermediary
Example: pg 197

10. Branding Costs
Costs of transferring an existing brand to the Web or maintaining one on the Web is significantly cheaper than creating a new one
Estimates of about US $8 million spent in 1998 to create and build an online brand by each of the top 100 e-commerce sites
Amazon.com spent US $133 million
BarnesandNoble.com spent $70 million
Interestingly enough, this was not spent on online advertising but on television, radio and print media

11. Affiliate Marketing
In this strategy, company A’s site (affiliate) includes descriptions, reviews, ratings etc about a product that is linked to company B’s site that offers the product for sale
For every visitor that follows the link for company A’s site to company B’s site, company A receives a commission
Company A also gets the added benefit of company B’s brand in exchange for the referral

12. Affiliate Marketing
The affiliate makes saving from not having to handle inventory, advertise or promote any products, or process transactions

13. Cause Marketing
Affiliate marketing program that benefits a charitable organisation
Affiliate site is created simply to benefit the charity
When a visitor clicks on a link on the affiliate site, donation is made by a sponsoring company to support the charity
The page that loads after the visitor clicks on the donation link carries advertising for the sponsoring companies

14. Cause Marketing
Click-through rates are significantly higher than for typical banner ads!
Why do you think that is?

15. Commission Types From Affiliation
Pay-per-click model
Commission is earned every time visitor clicks the link and loads the page
Similar to click-through model for banner ads with similar rates
Pay-per-conversion model
Commission is earned each time a visitor becomes a qualified prospect or actual customer

16. Affiliate Program Broker
Serves as a clearinghouse or marketplace for both sites that run affiliate programs and those that want to become affiliates
Also provide software, management consulting and brokerage services to affiliate program operators
Example: track affiliates’ sales, calculate and pay commissions, etc

17. Viral Marketing
Relies on “word of mouth” to inform of company, products and services
On the Web, also includes use of s and other communication means to spread word
Name is derived from the fact that the number of customers increases in the same manner that a virus spreads
Success story is Blue Mountain Arts which produces e-cards and relies on persons receiving cards and following link to send cards to their friends and so on

18. Links Reference Of Interest
Electronic Commerce, Seventh Annual Edition by Gary Schneider
Of Interest
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