1. Copyright © 2002 by Marketspace LLC Rayport, Jaworski e-Commerce Chapter 5 Enhanced Lecture Slides Branding Exhibits and Tables

2. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Branding — Today’s Objective To develop an understanding of the branding process and how firms build superior and lasting brands

3. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding — Lecture Outline Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

4. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

5. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 3: What Is a Good Brand? Brand Prestige “Wraparounds” Market Communications Core Product / Service Core Product / Service Mix of offline and online advertising Emphasizes advantages to AAdvantage membership, including non-expiring miles and online services Superior service AAdvantage frequent-flier club Award-winning Admirals Club lounges Comfortable chairs Portable defibrillators on every flight Safe, on-time transportation from Point A to Point B A few key insights into what constitutes good online branding:

6. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 4: A Simple Conceptual Model of Brand Equity A good brand... Customer Benefits Confidence Loyalty Satisfaction Firm Benefits Lower marketing costs Increased margins Opportunity for brand extensions Brand Awareness Depth Breadth Brand Associations Strength Relevant Consistent Valence Uniqueness Memorable Distinctive “Wraparounds” Core Product / Service Core Product / Service Market Communication … provides positive consumer responses... … and benefits both target customers and the firm Source: Keller (1996), Aaken (1996), Strategic Market Research Group, Marketspace Analysis A framework by which to understand the effects of the brand and brand equity:

7. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Table 5 — 3: Types of Brands Traditional Brands Online Brands The product / service with which the brand is associated was established in the online world. Examples: –Amazon –Yahoo –Chemdex –ZDNet –AOL –Priceline –CDNow –WingspanBank –E*Trade The product / service with which the brand is associated was established in the online world. Examples: –Amazon –Yahoo –Chemdex –ZDNet –AOL –Priceline –CDNow –WingspanBank –E*Trade The product / service with which the brand is associated was established offline in the bricks-and-mortar world. Examples: –The Gap –UPS –Dell –J.Crew –McDonald’s –OfficeMax –Ragu –Coca-Cola –Disney The product / service with which the brand is associated was established offline in the bricks-and-mortar world. Examples: –The Gap –UPS –Dell –J.Crew –McDonald’s –OfficeMax –Ragu –Coca-Cola –Disney Early in the evolution of the Internet, brands were categorized as purely offline or online. Here are samples of such brands.

8. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 5: Brand Presence Traditional Brands Online Offline Online Brands Source: Monitor Analysis Mix of Promotional Activities Product Establishment Yahoo Ragu Yahoo Magazine Wingspan- Bank Wingspan- Bank Schwab Egghead This diagram captures the movement of brands.

9. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Supporting Slide 5 — A: Quotes on Online Branding “E-branding is more important [than e-commerce]. And it must come first. Because few people will buy your stuff — online or off — unless you are top-of-mind.” -- Annette Hamilton, executive producer, ZDNet “Brand is the price of entry [to the Internet], not the winning strategy.” -- Dylan Tweney, InfoNet “By the time your potential customers log on, they already know what they're looking for, and they often know from whom they want to buy it. … They're just not listening to branding messages anymore.” -- Michael Fischler, principal of The Pubs Group “Brands stand as comfort anchors in the sea of confusion, fear and doubt. In dynamic markets, strong brands have more value than ever, precisely because of the speed with which these markets move.” -- Chuck Pettis, Technobranding “It took more than 50 years for Coca-Cola to become a worldwide market leader, but only five years for online search engine Yahoo to gain market dominance. The role of the brand has changed dramatically and has created a vacuum between offline and online brands.” -- Mark Lindstrom, executive director, ZIVO “A company's website IS the brand. It's the hub of consumer experience, the place where all aspects of a company, from its annual report to its products to its support, intersect. It's the company in a nutshell, all there in a way that just is not possible in the analog world.” -- Sean Carton, Carton Donofrio Interactive

10. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Supporting Slide 5 — B: Do Strong Brands Matter Online? Point / Counterpoint Brand Is Essential Flood of new entrants. Too many brands. Hence, need to build your presence. With a strong brand, customers come to you instead of you chasing customers. All winners currently have strong brands. It is an “instant message” that contains a lot of associations. Clear brand associated with higher conversion rates. Flood of new entrants. Too many brands. Hence, need to build your presence. With a strong brand, customers come to you instead of you chasing customers. All winners currently have strong brands. It is an “instant message” that contains a lot of associations. Clear brand associated with higher conversion rates. Brand Is Sideshow Alliances lock up the market and are considerably more important than brands. Third-party evaluator sites (such as BizRate.com) decrease brand power. But … a lot of well-known brands (such as beyond.com or FreePC) will go belly up. Speed is more important than brand. Need to build customer base. Everything is about customization. It is a “personal” brand experience. Alliances lock up the market and are considerably more important than brands. Third-party evaluator sites (such as BizRate.com) decrease brand power. But … a lot of well-known brands (such as beyond.com or FreePC) will go belly up. Speed is more important than brand. Need to build customer base. Everything is about customization. It is a “personal” brand experience.

11. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

12. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 6: Building an Online Brand  1. Clearly define the brand audience.  2. Understand the customer.  3. Identify key leverage points in customer experience.  4. Continually monitor competitors.  5. Design compelling and complete brand intent.  6. Execute with integrity.  7. Be consistent over time.  8. Establish feedback systems.  9. Be opportunistic.  10. Invest and be patient.  1. Clearly define the brand audience.  2. Understand the customer.  3. Identify key leverage points in customer experience.  4. Continually monitor competitors.  5. Design compelling and complete brand intent.  6. Execute with integrity.  7. Be consistent over time.  8. Establish feedback systems.  9. Be opportunistic.  10. Invest and be patient. Integrated Campaign Value Cluster A broad framework for managers on building a brand:

13. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Table 5 — 4: Similarities and Differences in Offline vs. Online Branding In both environments, developing a brand requires significant long-term investment and a consistent compelling message.

14. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Table 5 — 4: Similarities and Differences in Offline vs. Online Branding (cont’d)

15. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Supporting Slide 5 — C: Point / Counterpoint: New Brand vs. Existing Brand Point / Counterpoint New Brand An existing brand name limits the size of the user base A single company brand name cannot be the “objective,” third-party portal (e.g., Travelocity will attract more visitors than AA.com) Existing brands are less likely to “get it” (and therefore will have more confusing interfaces, etc.) An existing brand name limits the size of the user base A single company brand name cannot be the “objective,” third-party portal (e.g., Travelocity will attract more visitors than AA.com) Existing brands are less likely to “get it” (and therefore will have more confusing interfaces, etc.) Existing Brand Enormous amounts of time and money are necessary to build new brands Customer understands and will respond to a known brand Customer will understand the value of being able to use both online and offline services interchangeably Target customers will not be confused Enormous amounts of time and money are necessary to build new brands Customer understands and will respond to a known brand Customer will understand the value of being able to use both online and offline services interchangeably Target customers will not be confused

16. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

17. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Table 5 — 5: Case Studies of Successful Online Branding Efforts A simple categorization scheme with brand examples for each category:

18. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Brand reinforcement Broad vs. Focused (specific products / services) Brand association Brand awareness Firm benefits Customer benefits Product sales Sales leads Brand creation Product trial Store traffic What value do you want to derive from your online presence? What part of brand equity do you want to build? What product / service are you offering them? Value Objective Component of Brand Equity Product Scope Target Audience Broad vs. Focused (specific segments) Who do we want to target? Exhibit 5 — 7: Online Branding Choices Source: Forrester Research, Monitor Analysis These choices are dependent upon a company’s communication objectives, which, in turn, influence the ultimate choice of communication mix elements.

19. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

20. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 8: www.aa.com American Airlines was the first airline to establish a website with the launch of AA.com on May 17, 1995. It has become a top airline site in terms of unique visitors and awards.

21. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 9: Assessment of Key Branding Elements Online Branding Best-in-Class Comparison American AirlinesContinental CVc = very low= low= moderate= high= very high CV

22. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 10: Assessment of Key Brand Attributes Online Branding Best-in-ClassComparison American AirlinesContinental = very low= low= moderate= high= very high

23. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

24. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 11: www.monster.com Monster is a metamarket switchboard that offers employment services to both job seekers and employers. It is a great example of an online company that has succeeded by branding itself in both online and offline environments.

25. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 12: Assessment of Key Branding Elements Online Branding Best-in-Class Comparison Monster.com Hotjobs.com

26. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 13: Assessment of Key Brand Attributes Online Branding Best-in-ClassComparison Monster.comHotjobs.com

27. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

28. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 14: Assessment of Key Branding Elements for Schwab and E*Trade = Very Low = Low = Moderate = High = Very High

29. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 14: Assessment of Key Branding Elements for Schwab and E*Trade (cont.) = Very Low = Low = Moderate = High = Very High

30. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Exhibit 5 — 14: Assessment of Key Brand Attributes for Schwab and E*Trade Schwab.cometrade.com = very low= low= moderate= high= very high

31. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

32. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Supporting Slide 5 — D: Citibank Online Citibank’s online success has been the strength of the Citigroup brand and allowed it to expand its online banking offering.

33. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Supporting Slide 5 — E: Assessment of Key Branding Elements Online Branding Best-in-ClassComparison Citibank OnlineBank of America Online Banking CVc = very low= low= moderate= high= very high

34. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Supporting Slide 5 — E: Assessment of Key Branding Elements (cont.) = Very Low = Low = Moderate = High = Very High Citibank OnlineBank of America Online Banking Online Branding Best-in-ClassComparison

35. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Supporting Slide 5 — F: Assessment of Key Brand Attributes Online Branding Best-in-ClassComparison Citibank OnlineBank of America Online Banking CVc = very low= low= moderate= high= very high

36. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Chapter 5: Branding Building Strong Brands The Ten-Step Branding Process A Framework for Branding Case Study: American Airlines Case Study: Monster.com Case Study: Schwab.com Case Study: Citibank Online Conclusion

37. Last Updated: 01/16/02 Copyright  2002, Marketspace LLC Branding — Conclusion  After today’s lesson, you should be able to answer the following questions: 1.What is a good brand? 2.What is the ten-step branding process? 3.How does online branding of American Airlines compare to that of Continental Airlines? 4.What are the arguments for and against bringing an offline brand into an online environment?