Brand valuation

After reading Brand Valuation, I think the one thing that makes a brand valuable is its capability to provide long-term competitive advantage. Brands influence the choices of customers, employees, investors, and government authorities, they have an economic impact. According to a study by Interbrand in association with JP Morgan, brands create significant value either as consumer or corporate brands or as a combination of both. On average, one-third of shareholder value. Besides, companies with strong brands outperform the market in respect of several indices. Other than the economic value, brands also create substantial social value by increase competition, improve product performance and the pressure on brand owners to behave in socially responsible ways.

Out of all my favorite brands, I would like to focus on my favorite brands related to food. Below are my favor brands and the reason for each of them:

McDonald’s
I like McDonald’s for several reasons. First, the kids playground. In Hong Kong, none of the MCD have kid playing area, I’m surprised when I come to the US that most MCD have playground. This allow the parent to eat and socialize when their kids play around. Second, they offer collectables with menu from time to time, at least it is the case in Hong Kong. There always a long line waiting for the collectables. Third, Ronald McDonald House Charities is a great cause.

Yoplait
They offer a lot of different choices for their yogurt, you won’t be bore eating yogurt all the time. Besides, their Save Lids to Save Lives program helps people with breast cancer.

Campbell
Campbell soup test good and also offered a lot of variety. I also like their participation in Labels for Education.

Cheetos
While I’m not a cheese lover, I lover Cheetos! I just can’t stop eating them.

Just like all other assets, brands are one of the assets for the company, even though they are intangible. As mentioned above, brands create not only to the company, but also customer and shareholder etc. Companies also find brand valuation helpful in the following ways:

• Making decisions on business investments
• Measuring t he return on brand investments
• Making decisions on brand investments
• Making decision on licensing the brand to subsidiary companies
• Turning the marketing department from a cost center into a profit center by connecting brand investment and brand returns
• Allocating marketing expenditures
• Organizing and optimizing the use of different brands in the business
• Assessing co-branding initiatives
• Deciding the appropriate branding after a merger
• Managing brand migration more successfully
• Establishing brand value scorecards
• Managing a portfolio of brands across a variety of markets
• Communicating where appropriate the economics value creation of the brand to the capital markets in order to support share prices and obtain funding
• Assessing fair transfer prices for the use of brands in subsidiary companies
• Determining brand royalty rates
• Determining the contribution of brands to joint ventures
• Using brands for securitization of debt facilities

Due to the wide range of applications for brand valuation, I think Brands should be on the balance sheet.

Campbell Soup Company (CPB)

Campbell's is a well-known producer of canned soups, and it is the company which I believe is highly effective in bringing in all the elements of the marketing mix together for their consumers. The target audience for the company's market offerings is soup lovers who lack time to prepare soup themselves. In North America, Campbell offers a variety of soups, which includes condensed soups, microwavable soups, chunky soups, select harvest soups, healthy request soups, low sodium soups and 25% less sodium soups. The different types of soup listed about are based on the need of different consumers. Low sodium soups and 25% less sodium soups targets at senior, who may have higher concern with sodium intake. Microwavable soup targets consumers which put great emphasis on convenience. Due to the different perceived value by consumers from different segment, Campbell set up different price range for different type of soups. For example, people with healthy diet life style will be willing to pay a higher price for healthy request soups due to healthy ingredients contains in the soups. In term of distribution, Campbell soup is widely distributed in different venue. While supermarkets and grocery stores carried a variety of canned soup, Campbell's soup on the go is available in gas stations and vending machines. While TV ad is one of the main channel which Campbell communicate with their target audience, Campbell also deliver their messages to their target audience through the Campbell Soup Foundation, their participation in Labels for Education, their commitment to social responsibility to consumers, neighbors, employees and the planet. Campbell’s participation in Labels for Education is a win-win promotional strategy to both Campbell’s and the schools/organizations. Consumers who have a tie and want to help the school/organization will have a higher incentive to purchase Campbell than other named brands or private brands. On the other hand, schools/organizations will encourage consumers to purchase Campbell, which will increase the sales of Campbell soup. Chapter 8 of The Marketing Plan Handbook discussed channel members and different type of distribution. In the case of Campbell, I think they utilize the intensive distribution.

In an academic library, price may be irrelevant as we don’t charge patrons for services, except for fine. However, distribution channel do play a role in how we deliver our services. Unlike a few decades ago, which books were housed in a physical building; technologies enable the library to deliver ebook electronically through web browsers and mobile devices. The distribution model changed from exclusive distribution to intensive distribution; as access is no longer restricted to a specific group of patrons, who is able to visit the library physically, but to patrons anywhere around the world (assuming they are affiliated with the university). 

Product development and product life cycle

Shorter product life cycle will force companies to speed up their product development process. As stated in The Marketing Plan Handbook, technology advancement enables competitors to leapfrogged each other with new models every few months. Hence, it is important for companies to speed up their product development, so they can launch their new product before their competitors grab their sales and customer relationships. While speeding up every stage of product development may not be possible, it is best to speed up as much processes as possible. For example, use of the latest prototype software will enable companies to produce design prototype in a shorter amount of time. By employing sophisticated analytic software, the companies will be able to analyze data to create more accurate segmentation plan. Technologies play a positive role in product development.

Rory Sutherland's TED Talk

Just watched the TED Talk, Rory Sutherland: Life Lessons from an Ad Man. Below are a few things I get out from the video:

• all value is subjective
• persuasion is often better than compulsion
• value of good depends on: being expensive, rare, ubiquitous, classless, minimalistic
• so much communication now is contextual that the capacity for actually nudging people, for giving them better info
• mobile phone is persuasive technologies -> location-specific, contextual, timely & immediate

The Shreddies example is a good one and it also demonstrate the value of marketing research.

Working in a heavily service oriented organization, with limited financial resources, I think the concept of intangible value and how it can impact perception will be a very important area that we look into.

Obsolete products

John posted a question, which asked us to think of cases where products have become obsolete. The first thing it comes up in my mind is different models of cell phones. For example, Apple's iphone 3 is now obsolete and success by new models. Another obsolete product I can think of is cassette tape. There are some other products which I believe they will be obsolete in the near future due to technological advancement, see below:

• Typewriters: replaced by computers
• Floppy disks: replaced by flash drives
• Dial-up internet: replaced by cable
• Landline phones: replaced by cell phones
• CDs: replaced online streaming music

Total Product Concept/Augmented Product/Three Levels of a Product

The three levels of product introduced by Philip Kotler are Core (Simply looks at what people set out to buy and what benefits the producer would like their product to offer buyers), Actual (design a product that will persuade people to purchase your product) and Augmented (additional non-tangible benefit that a product can offer). One of the products, which have products in all three levels, is body wash. The core product is body wash. The actual products are Dove, Old Spice, etc. Dove differentiates itself from others by offering body wash with moisturizer and skin care. One non-tangible benefit of body wash is the customer will feel refreshing after they use body wash at shower. In an effort to get a better understanding of the augmented product, I found an article called Five Product Levels (Kotler). In addition to the core and augmented product, the article also explains generic, expected and potential product.

1. Core product: Basic product and the focus is on the purpose for which the product is intended.
2. Generic product: all the qualities of the product.
3. Expected product: all aspects the consumer expects to get when they purchase a product.
4. Augmented product: all additional factors which sets the product apart from that of the competition.
5. Potential product: augmentations and transformations that the product may undergo in the future.

Positioning

According to The Marketing Plan Handbook, positioning strategy is aimed to differentiate the brand or product on the basis of attributes that customers find meaningful. A firm's position resides with the attributes which customers value and attributes which competitors perceived. For positioning to work, it should align with the company's mission, goals, and resources. In addition, positioning conveys the value that the brand provides, it sets the brand apart from competitors in a sustainable way.

Victoria's Secret and Aerie are two companies which competing in the apparel industry which specialized in lingerie. Victoria's Secret sells lingerie, womenswear and beauty products, and Aerie sells lingerie. While Victoria's Secret targets at adult, Aerie targets at teenagers. The impression given by Victoria's Secret is seductive, which Aerie give an impression of cute and girlish. Not only does Victoria's Secret provides a bigger selection in term of lingerie, but they also offers other products like perfume, bathing suits etc. In term of promoting the product, Victoria's Secret have fashion show, angels and pink spokesmodels. For Aerie, they invite targeted group of customers to the in-store party. The two companies have different products and marketing strategies due to the different needs of their customers.

In research of how academic libraries apply positioning, I found an article titled "Positioning and Marketing Academic Libraries to Students", even though the article was published in 1998, it got some interesting information. Another search leads me to a book titled Breakthrough Branding: Positioning Your Library to Survive and Thrive, which is published in 2013. I would like to read the book and find out how branding and position impact libraries.