Branding

Licensing

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Chapter Objectives

!   Explain the concepts of branding and brand equity. !   Discuss the types of brands. !   Describe how to develop an effective brand name. !   Discuss product licensing and how licensed goods

are merchandised. !   Explain the importance of sports sponsorships and

endorsements. !   Discuss how companies choose sports endorsers

for their products.

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The Importance of Branding

Sports organizations and companies strive to develop strong brands to differentiate themselves from one another.

brand a name, word or words, symbol, or design that identifies an organization and its products

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When a brand name or trade name is registered, it also becomes a trademark.

brand name a word or words, letters, or numbers representing a brand that can be spoken

trademark a device that legally identifies ownership of a registered brand or trade name

The Importance of Branding

Customers are generally willing to pay a higher price for products with brand equity.

brand equity the value a brand has beyond its actual functional benefits

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Brand equity has financial value through licensing.

The Importance of Branding

The three steps of developing brand equity are:

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1.  Develop the brand in the customer�s mind as part of a class of products.

2.  Link the product�s brand name to its function and make some type of emotional connection with the product.

3.  Help consumers think and feel the way you want them to regarding your product.

Types of Brands and Strategies

The three basic types of brands are:

manufacturer brand a brand owned by the producer of the product

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!  Manufacturer brands – Multi-Product

Branding – Multi-Branding – Co-branding

co-branding a branding strategy that combines one or more brands to increase customer loyalty and sales for each product

! Intermediary brands

intermediary brand a brand that carries a name developed by the wholesaler, retailer, or catalog house

! Generic brands generic brands a brand that represents a general product category and does not carry a company or brand name

Developing Brand Names

For a brand to be successful, it should:

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!   Offer a benefit. !   Be simple. !   Be different and positive. !   Reflect an image. !   Be previously unregistered.

Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses. Though Many larger dot-com companies crashed in the 1990�s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris�s bicycle business rides in on the Web to get hard-to-find parts and personal service. Describe an e-business�s home page to your class after viewing one through marketingseries.glencoe.com.

Your Online Sports Arena

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interactive polls, statistics, streaming broadcasts, and merchandise. The Web�s ability to integrate these different forms of media and commerce makes it perfect for satisfying a sports enthusiast's every need.

For more information on sports and entertainment marketing, go to marketingseries.glencoe.com.

Major sports organizations such as NASCAR offer sophisticated sites that provide not only news and information about your sports figures, but also links to tickets, TV schedules,

What are the three steps involved in developing brand equity? Name and provide an example of the three types of brands. What rules should be followed when developing a good brand name?

1.

2.

3.

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Licensing and Merchandising

Sports teams and athletes may have licensing agreements with product manufacturers.

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licensing an agreement which gives a company the right to use another�s brand name, patent, or other intellectual property for a royalty or fee

!   The licensor is the company or individual granting the license.

!   The licensee is the company or individual paying for the rights to use the licensor�s name or property.

Licensing and Merchandising

!   Licensed merchandise is made available through many channels of distribution.

!   Special promotional deals create partnerships between the licensor and the licensee to help boost store traffic.

!   Sweepstakes and contests are run by the sponsor, with the prize being tickets to the sporting event.

!   Some licensed products are used as promotional incentives for customers to buy a product.

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Sponsorships and Endorsements

Sponsorships are the promotional vehicles that financially support sports events.

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Types of sponsorships include: ! Signage ! Entitlements ! Facility entitlements ! Product exclusivity

Sponsorships and Endorsements

An endorsement is a statement of approval of a product, service, or idea made by an individual or organization speaking on behalf of the advertiser.

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Some important considerations are: !   Association !   Demographic match !   Successful careers !   Image

Sports Appeal

Through licensing, sponsorships, or endorsements, companies can generate positive publicity and achieve their marketing goals of increasing brand awareness and sales.

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Benefits of Licensing

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Sports Organizations

Companies

Reinforce image

Build team spirit

Profit

Build presence through merchandise

Reach a new audience

Publicity Revenue Brand awareness

Mutual Advantages

Name two forms of licensing. How do sponsorships benefit the sports organization and the sponsor? What do companies consider when selecting a sports celebrity for endorsement of a product?

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2.

3.

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Define brand and brand name.

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Explain the concept of branding and its components.

A brand is a name, word or words, symbol, or design that identifies an organization and its products. A brand name is a word or words, letters, or numbers representing a brand that can be spoken.

1. Branding involves any name, symbol, or device an organization uses to identify itself and its products.

2.

Explain how brand equity is developed.

Brand equity, the value a brand has beyond its actual functional benefits, is developed in the consumer�s mind when the brand is identified as part of a class of products.

3.

Checking Concepts

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continued

Differentiate between the three basic types of brands.

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Define co-branding.

Manufacturer brands are owned by the producer of the product; intermediary brands carry a name developed by the wholesaler, the retailer, or catalog house; generic brands carry no branding.

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Explain product licensing.

Co-branding is a branding strategy that combines one or more brands to increase customer loyalty and sales for each product.

5. Licensing is a contract agreement which gives a company the right to use another brand name, patent, or other intellectual property for a royalty or fee. Licensed goods are available in retail department stores, chain stores, league-sponsored retail outlets, and on the Internet.

6.

Checking Concepts

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continued

Explain why sponsorships and endorsements are important to sports organizations and sponsors.

All major sports organizations use sponsorships to help finance their operations; sponsors get exposure of their products and free publicity. Endorsements involve using a celebrity or public figure to represent and promote a company and its products; the celebrity lends credibility to the product while he/she is handsomely paid.

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Discuss the importance of an athlete's image to a company that is choosing and endorser.

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Critical Thinking

Endorsers must match target markets, have successful careers, and have positive public images.

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Checking Concepts 7.

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