1. University of Washington EMBA Program Regional 20 “Branding and Designing the Offer” Instructor: Elizabeth Stearns

2. Brand Policy Brand Definition –A name for a product Brand Equity –A set of assets and liabilities linked to a brand that add value provided by a product or service, to a firm and/or to that firm’s customers. (typically quantified on a $ metric) Brand Leveraging –Applying the firm’s equity in a brand to a new product in an existing or new market

3. RANK 2003 BY BRAND VALUE ($BILLIONS ) COCA-COLA 70.5 MICROSOFT 65.2 IBM 51.8 GE 42.3 INTEL 31.1 NOKIA 29.4 DISNEY 28.0 McDONALD'S 24.7 MARLBORO 22.2 MERCEDES21.4 Business Week & Interbrand Corp.

4. 2003 COCA-COLA 70.5 MICROSOFT 65.2 IBM 51.8 GE 42.3 INTEL 31.1 NOKIA 29.4 DISNEY 28.0 McDONALD'S 24.7 MARLBORO 22.2 MERCEDES21.4 Business Week & Interbrand Corp. RANK BY BRAND VALUE ($BILLIONS ) 2001 COCA-COLA 68.9 MICROSOFT 65.1 IBM 52.8 GE 42.4 NOKIA 35.0 INTEL 34.7 DISNEY 32.6 FORD 30.1 McDONALD'S 25.3 AT&T 22.8

5. What is a Brand? AttributesBenefitsValues Culture User Personality ©2000 Prentice Hall

6. Aspects of Brand Equity Loyalty Name Awareness Perceived Quality Satisfaction Associations and Image Channel Relationships Channel Relationships

10. Brand Equity Maintenance Brand Equity Building Activities –Advertising and public relations –Service –Product improvement –Channel support –Customer reward system –Price maintenance

11. Brand Equity Maintenance Brand Equity Exploiting Activities –Price promotions/cutting –Lower price component substitution –Channel downscaling/proliferation –Channel/supplier squeezing

12. Selling Whoppers CAMPAIGNYEARSAGENCY “Burger King, home of the Whopper”1958-68 Hume Smith Mickelberry “The bigger the burger, the better the burger”1968Batten, Barton, Durstine, “Have it your way”1974and Osborne “America loves burgers and we’re America’s1976J. Walter Thompson burger king” “Best darn Burger”1978 “Make it special, make it Burger King”1979 “Aren’t you hungry”1982 “Battle of the burgers”1982 “Herb”1985 “Burger King town”1986 “Best food for fast times”1987 “We do it like you do it”1987-89N.W. Ayer “Sometimes you’ve gotta break the rules”1989D’arcy, Masius, Benton, “Your way right away”1991and Bowles “BK tee vee”1992 “Back to basics”1994UniWorld Group “Get your burger’s worth”1994Ammirata/Puris/Lintas “It just tastes better”1996 “When you have it your way it just tastes better”1999 “Got the urge?”2000Lowe/Lintas and partners “The WHOPPER says:”2001McCann Erickson

23. Think about who you are in the marketplace and what you “look” like to your customers, prospects, collaborators, competitors, and to yourself!

29. Pacific Market Research

32. Brands & Their Benefits Convey many levels of meaning -attributes-benefits -values-culture -personality For ConsumersFor Sellers -Simplify shopping-Basis for differentiation -Surrogate for quality-Foster Company Relationships -Satisfy needs (e.g. status)-Represent the intangible “A Brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”

33. Product Definition: A product is anything that can be offered to a market for acquisition, use or consumption that might satisfy a need or want

34. Product Products have a Range of Characteristics Intangible “Pure” Service Life Insurance Tangible “Pure” Product Road Salt Most Things We Buy

35. Key Product Decisions Attribute levels for individual products Product Mix –Breadth of line –Depth of line Branding Policy –Equity –Leveraging

36. Key Product Decisions New Product Acquisition –Internal development –Other acquisitions joint ventures licensing

37. Product Mix Width Width - number of different product lines Length Length - total number of items within the lines Length Length - total number of items within the lines Depth Depth - number of versions of each product Product Mix - all the product lines offered Product Mix - all the product lines offered Consistency ©2000 Prentice Hall

38. Branding Policy (Line Extension – “Rationale”) Adapt to consumer need, variety seeking Update or expand core brand’s image Increase sales quickly and “inexpensively” (reduced advertising and sales costs) Offer a broad range of price points and thereby serve a wider audience of consumers Low cost, low risk way to serve a highly segmented market Increase shelf space and thereby attract more consumer/purchaser attention Utilize excess capacity Preempt competitors in shelfspace, mindspace

39. Branding Policy (Line Extension – Risks) Diluting the core brand image - Ultimate loss in asset $$ value (eg Pierre Cardin) Blurring the rationale for each product in the line (P&G retrenchment) Encourages variety seeking (may not be yours!) Under exploiting a good idea (so not available later) Increasing costs without increasing overall sales Reducing credibility with, and or angering the trade

40. Two-Way Product-Line Stretch: Marriott Hotels Quality Economy Superior StandardGood Price High Above average Average Low Fairfield Inn (Vacationers) Courtyard (Salespeople) Marriott (Middle managers) Marriott Marquis (Top executives) ©2000 Prentice Hall

41. Designing Offers for Customers Offer CostValue Price Time Effort Risk Technical Innovation Sales Relation- ship Brand Equity DeliveryServices Product

42. Brand Strategies (connecting the Brand to the Offer) Brand Extension New Brand Name Product Category Line Extension Existing Multibrands New Brands ©2000 Prentice Hall

43. Sell the product The Value-Delivery Process Make the product Procure Design product MakePriceSell Advertise/ promote DistributeService Choose the Value Provide the Value Communicate the Value (a) Traditional physical process sequence (b) Value creation & delivery sequence Strategic marketing Tactical marketing ©2000 Prentice Hall

44. Satisfaction = Performance minus Expectations

45. Thank you !