Unit 1 Brands

UNIT 1-BRANDS_CLASS PRACTICE_MATERIAL

WHAT_IS _A_BRAND?

“What’s in a name? That which That which we call a rose by any other name other name would smell as sweet.” (William Shakespeare) In the business the business context, the answer on the same question is quite different. According to Hans G. Gueldenberg, CEO of Nestlé Deutschland “names are road signs that help people find orientation in the jungle the jungle of supply.” In today’s world, ‘name sells’. For instance, a car is a car and the its purpose is commuting from point A to B. Nevertheless, when a car is a Mercedes or a BMW, the perception changes. It’s not viewed just as a mode of transport but it’s attached to one’s status or prestige. And that’s exactly what a brand does. It not only gives recognition to the company but helps customers create an identity for themselves. As said by said by Jeff Jeff Bezos, CEO of Amazon.com, “A brand “A brand for a company is like a reputation for a person. You earn reputation by reputation by trying to do hard things well.” According to American Marketing Association (AMA), brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition”. competition”. For a customer, a brand is all the emotions and ideas associated with a product or service that creates a distinct customer experience. It includes all things real or perceived, rational or emotional, physical or sensory, thought or felt, whether in form or function, planned or unplanned. The power of the brand the brand depends on how well a product can invite the customers and how long can it reside in their minds. Other ways to define a Brand 1st definition A brand is a name, term, symbol, design, or combination of these elements that is intended to identify the goods or services of a seller and differentiate them from their competitors. 2nd definition A brand is the intangible sum of a productʹs attributes: its name, packaging, and price, its history, its reputation, and the way itʹs advertised. 3rd definition “Branding is a practice…that has always existed above and beyond all other business strategies. It is an organizing principle so broad yet so defining that it can

Author: S.R.D. / BE2_summer semester

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shape and direct just direct just about everything a company does, and, most important, how it does it.” Scott Bedbury, A Bedbury, A New Brand World 4th definition Brands are sponges for content, for images, for fleeting feelings. They become psychological concepts held in the minds of the public, where they may stay forever. As such you can’t entirely control a brand. At best At best you can only guide and influence it. Branding is a powerful message that speaks to who we are, what we want and who we want to be. to be. Brands humanize the product or service and give it a personality all its own.

THE_NEED_FOR_BRANDING OR WHAT_MAKES_BRANDS_SUCCESSFUL Earlier, branding Earlier, branding included logos and advertisements. But nowadays, brand nowadays, brand is much more than a name or a logo. A brand is no longer just longer just about image projection. It is about the company as a whole. Branding distinguishes a company, product or service from the rest and creates a lasting impression on the consumers. To be able to deliver the expected quality, successful brands put a strong emphasis on the following: • Reputation = a brand always reflects a certain image in public • Customer Service = relation to customers after they purchase a brand • Promise to customers = whether a brand will meet customers’ expectations • Price of the product = one of the major factors in customers’ purchasing decision • Attitude = of the product; what kind of image it sells • Logo = graphic representation or symbol of the brand’s the brand’s image and message • Product line = how a product is improved in time A brand is not just not just a logo, ad campaign, spokesperson or slogan. Rather a brand is a product of the millions of experiences a company creates with employees, vendors, reporters, communities, and customers—and the emotional feelings these groups develop as a result of their experiences. In order to maintain their brands successful, companies need to: Use web‐based social networking to exchange information (social media sites – Twitter, Facebook, LinkedIn…) since marketing on those sites is on the constant increase as is social networking online. Studies have shown that people connected on


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those sites spend more money online than an average buyer. In today’s uncertain economic conditions, business owners are finding it necessary to become even more creative in order to successfully brand their products and services. Money is tighter in many households due to job loss and/or reduced wages. As a result, consumer expectations are rising as they seek newer and more advanced tools to meet their desire for the latest and best, and best, despite financial limitations.

Enable fast consumer feedback. Today, information travels faster than a few decades ago and companies need to adjust their marketing strategy to the new tendencies in communication. That means advertising in the media used by the younger generations and adjusting their customer service operations to fit the latest technological development (open forums and chat lines, invite consumers to send text messages, etc.).

Anticipate customers’ needs. needs. A basic business principle has always been that the most successful businesses are those that know how to anticipate their customers’ needs, and then fill them. In some ways, narrowing rather than expanding one’s brand has become the target of today’s marketplace due to conservative spending and meeting the wants and needs of customers who are able to pay.

Narrow the brand instead of expanding it (in times of recession consumers spend conservatively and focus their attention on meeting the basic day‐to‐day needs so they look for products that will meet those needs).

Create web site with precise product information. Brand should be truly reflected in the logo and the tagline (=a slogan or phrase that captures the essence of a brand’s promise to consumers). Use a variety of advertising methods – newsletters, tote bags(given away at events, promotions and openings), personal phone calls, direct marketing (leaflets in the post) Organise seminars and webinars Upload personal details and contact information on the web page to speed up information flow.


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Inspire customer interaction – post surveys, open forums, invite customers to blog. Offer customer testimonials – personal statements make product or service Provide excellent customer service

WHAT_IS_BRAND_MANAGEMENT? Brand management is the process of creating and sustaining brand sustaining brand equity. Brand management includes–developing a strategy that successfully sustains or improves brand awareness, strengthens brand strengthens brand associations, emphasises on on brand brand quality and utilisation. It represents a sophisticated business sophisticated business process to maintain the unique mix of physical attributes and intangible values that distinguishes one brand one brand identity from the other. Therefore, brand Therefore, brand building building and brand and brand management have become have become critical issues for firms competing within industries. Over the last decades, brand decades, brand evolved from a simple product attribute to that of a value creator for the entire firm. A brand can be anything – a person, product, country, company, etc. Brand management is not just not just about building about building brands, brands, but but also managing and establishing them. Marketers should consider maintaining healthy and vital brands vital brands and firms need to pay attention to brand to brand building. building. They should not neglect important issues related to brand to brand leveraging, identification, and protection. Successful brand Successful brand is an important strategic marketing tool for a firm. Effective brand management includes constant endeavour of a firm to choose the ways for realising the brand the brand potential and enhance its value. As a result, it can create sustained competitive advantage and a successful strategic positioning through continued investment in quality, communication and customer relationships. The basic message to management is that brand that brand is an instrument, not only a goal and, if it used efficiently, it causes creation of valued intangible assets – customer capital.

TYPES_OF_BRANDS There are six types of brands of brands – Product, Service, Organisation, Person, Event and Geography. The brand that is associated with a tangible product, such as 1. Product Brands – The brand a car or a drink. This can be can be very specific or may indicate a range of products. It is further divided into individual product (Ex: Coca‐Cola) and product range (Ex: varieties of Colgate toothpaste). Author: S.R.D. / BE2_summer semester

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The brands that deliver complete solutions and intangible 2. Service Brands – The brands services besides services besides manufacturing products. Service brands Service brands are about what is done, when it is done, who does it, etc. It is much different than product brands, product brands, where variation can be can be eliminated on the production line. Even in companies such as McDonald’s where service has been has been standardised down to eye contact and smile, variation still occurs. are brands, whether it is a company that 3. Organisation Brands – Organisations are brands, delivers products and services or some other group. Thus, Greenpeace, Mercedes and the US Senate are all defined organisations and each have qualities associated with them that together constitute the brand. the brand. Person brand is focused on one or a few individuals and is 4. Person as brand – Person brand associated with personality. individual brand is based is based on one person, such as a • Individual – A pure individual brand celebrity actor or a singer. The brand The brand can be can be a person with a carefully crafted projection (eg. politicians) • Group –In particular, when this is a small group and the individuals are known, the group brand group brand and the individual brand individual brand overlap. For example, the brand the brand of a pop group and the brand the brand of its known members are strongly connected (eg. The Beatles). 5. Event – Events have brands too, whether they are rock concerts or the Olympics. Event brands are strongly connected with the experience of the audience, for example, musical pleasure. 6. Geography – Areas of the world also have essential qualities that are seen as characterisations, and hence also have brand. have brand. These areas can range from countries to states to cities to streets and buildings. and buildings. Those who govern or represent these geographies, develop the brand the brand (e.g. Japan, (e.g. Japan, US).

TRANSFORMATION_OF_A_BRAND_TO_AN_EXTRAORDINARY_BRAND Most of the companies manage to build to build brands. brands. But, the question is – What is the secret of the long life of such brands? There are companies that have established brands which are loved by the customers and have been for decades. Such brands become icons. Iconic Brands Iconic brands Iconic brands are part of our culture. They are easily recognised by their logo. These brands These brands spend a lot of money on marketing to keep their image Author: S.R.D. / BE2_summer semester

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perfect. These iconic brands iconic brands are top of mind brands mind brands and often win a bigger market share. For example, McDonald’s, Microsoft, Dell, Coke, Pepsi, and American Airlines have a significant place not just not just in the market, but market, but also in the consumer’s minds. But, there are few phenomenally extraordinary brands extraordinary brands that build that build an everlasting relationship with the customers. They ideally are called cult brands. cult brands. Cult Brands Cult brands Cult brands understand that their brand their brand belongs belongs to the customer. Only the customer’s voice counts. A successful cult brand cult brand embraces its customers by anticipating their basic their basic human and spiritual needs. As a consequence, cult brands achieve a level of customer loyalty unprecedented in traditional business. traditional business. These brands These brands have no substitutes. Examples are: Oprah, Linux, Southwest Airlines, IKEA, Harley Davidson, Apple, Star Trek, Volkswagen Beetle, Cuban Cigars. They are profitable even in unfavourable market conditions because of the powerful relationships they have with their customers.

CORPORATE_BRANDING Corporate branding refers to a company applying its name to a product. The product and the company name become name become the brand name. name. The company can advertise several of its products under a single brand single brand name in a practice referred to as family branding or umbrella branding. By using corporate branding corporate branding with a successfully marketed product, a company can familiarize consumers with its products and may create brand loyalty. loyalty. If the public likes one product from this company, then they may seek out the brand name when buying other products. Corporate branding Corporate branding is usually only successful if the company is well known and sells reputable products with a positive image. One of the disadvantages of corporate branding corporate branding is that the company can become can become identified with only one type of product. To consumers, corporate branding corporate branding represents a level of quality that they have come to expect from the company. They will expect every product with the same brand same brand name to have the same level of quality that they are familiar with. The company can increase sales by sales by comparing one of their more popular products with a similar product by product by another company, showing sales figures to back up their promise. promise. The value of the brand the brand is determined by determined by the profits the products have made. If profits are high, then the manufacturer is able to charge more for their product. When applying corporate branding to a product or products, companies need to follow a few guidelines. A corporate brand corporate brand should be should be easy to recognize and attract attention. It should also be also be legally protectable and suggest the company or product image.


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Ideally, the brand the brand should be should be easy to pronounce and easy to remember. A premiere brand product typically costs more to purchase than an economy brand. Consumers are paying for the name and the quality of product that name guarantees. There are a few extensions to corporate branding. corporate branding. One brand One brand name may be may be used for a number of products in family branding, family branding, or all the products may be may be given different brand names in a practice called individual branding. branding. When large retailers buy retailers buy goods in bulk and then put their own own brand brand name on them, this is called store branding , label branding , or private branding. branding. Co‐branding is when two or more manufactures combine to sell their products. When a company sells the right to use their brand their brand name to another company for use in another location or for non‐competitive purposes, this is called brand licensing. licensing. Corporate branding Corporate branding has the ability to make a product very successful. If the brand the brand name has a track record of a guarantee of quality, then there are huge amounts of money to be to be made by made by using the name. However, just However, just one shoddy product under the brand name may cause bad word of mouth , affecting sales of all the other products under the same name and causing irreversible damage to the company. On the other hand, if a company launches a successful brand, successful brand, which in time achieves high sales numbers and proves its high brand value , then consumers tend to show loyalty to other similar products made by made by the same manufacturer.

**ATTENTION**NEW VOCABULARY** o

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Track record: a record of achievements or performance; an executive with a good track record. expensive brand of all other Premiere brand: the most valuable and the most expensive brand similar brands similar brands in the category. brand by the same company or cheaper Economy brand: cheaper version of a brand by brand by brand by other producer. poorly built, made of bad of bad materials; Shoddy: cheap, poorly built, *shoddily ‐ In a shoddy manner, lacking quality and done poorly, usually in a cheap and low quality way. Irreversible /ɪr.ɪvɜ.sɪ.bl /: ̩ not possible to change; impossible to return to a previous condition Smoking has caused irreversible damage to his lungs.

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speech but not in writing. Word of mouth / mouth / by by word of mouth: in speech but All the orders were given were given by word of mouth of mouth so that no written evidence could be discovered later. Brand value: the amount that a brand is worth in terms of income, potential income, reputation, prestige, and market value. Brands with a high value are


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regarded as considerable assets to a company, so that when a company is sold a brand with a high value may be may be worth more than any other consideration.

STORE_BRANDS Certain brands Certain brands of products that are only available at a particular store, usually a chain store, are called store brands. store brands. Store brand Store brand products are often available for a discounted price, and are popular with those trying to keep their spending to a minimum. In some stores, they can even make up 40 to 50 percent of the total sales, and may be may be 15 to 50 percent cheaper than the national name brand name brand products. Store brands Store brands are usually similar in quality to the name brand name brand products, although some food products may be may be of a slightly lesser quality. Paper and personal products usually perform just perform just as well, if not better, not better, than name brand name brand items. The packaging for store brand store brand items is usually very close in resemblance to name brand merchandise, with the same colours often used for both for both products. Stores will often put their store brand on the shelves right next to the comparable name brand product, encouraging shoppers to quickly and easily compare the prices and ingredients of the two items. The manufacturers of name brand name brand products are very often the manufacturers of similar store brand store brand products. This does not necessarily mean that the recipes used for the two products are the same. In other cases, the products may be may be made individually by individually by a manufacturing plant owned by owned by the store chain itself. By comparing the ingredient lists from the products of national and store brands, store brands, consumers can decide how similar the two products really are, and if the difference in price is worth the possible difference in quality. Store brands Store brands allow stores to sell products for a better value than many of the name this, but the main one is that store brand brand items. items. There are several reasons for this, but products do not need the advertising that national brands do. do. The stores do not create special marketing campaigns for these products. They are often included in fliers and specials, but specials, but very little extra money is spent on advertisements. This saves the company, and consumers, a lot of money. Consumers have very different opinions on store brands. store brands. Some are very loyal to certain name brand name brand products, and refuse to try cheaper alternatives. alternatives. To others, the money saved is more than worth any reduced quality. Many people, however, fall somewhere in the middle. There are some products that they feel are worth the money for getting name brand name brand quality, such as cereal or paper towels, but towels, but are more than willing to use the cheaper alternatives for other items, such as condiments, desserts, and dairy products. The quality of many store brand store brand products has improved greatly over the past decade, making it easier for consumers to get the quality they expect for a more reasonable price. Author: S.R.D. / BE2_summer semester

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READING: OUTSOURCING PRODUCTION, p.8 (Course book) What is outsourcing? Business process outsourcing is what happens when one company decides to hire another company to handle certain business activities. activities. When business When business process outsourcing first began, first began, it was restricted to the payroll process. Today, many businesses many businesses still outsource their payroll processes; however, there are many other processes that are being are being outsourced. Business process outsourcing is an intricate process for companies. When companies decide they want to use outsourcing, they must select a vendor and create contracts. Companies then transition that part of their business their business smoothly to the new company. Some of the main business main business processes of companies that are being are being outsourced include human resources functions, financial processes, administration processes, call centre and customer service activities. When a company decides to use business use business process outsourcing, they normally create a contract with another company that establishes the business process will be will be outsourced. Larger the length of time for which the business corporations establish outsourcing contracts that last for multiple years and can cost millions of dollars. Most business Most business process outsourcing involves hiring a company in another country to handle the work. This is also called offshore outsourcing because outsourcing because a segment of the business is eliminated in the home country for financial reasons. Offshore outsourcing has grown in controversy because controversy because of the economic and political implications involved in this practice. Corporations that choose business choose business process outsourcing to move jobs overseas often look into transferring their business their business processes to countries that have substantially using business process lower currencies. currencies. Most of the corporations that are using business outsourcing are located in Europe, Asia, and the United States. Some of the most popular countries that profit substantially from business from business process outsourcing are China, India, and the Philippines. These countries are especially popular for outsourcing and are able to make substantial financial gains and improve their economy and overall quality of life. Business process outsourcing is becoming is becoming a primary method in which companies can communicate with other nations for their benefit. their benefit. Unfortunately, outsourcing often has a negative effect on the home countryʹs economy. The main outsourcing purpose is cutting production cost by cost by transferring jobs transferring jobs to lower paid foreign workers. The growing unemployment rate worldwide is related to this outsourcing trend. The negative effects of outsourcing are obvious. As western workers lose their jobs their jobs to cheaper overseas labour, their spending must reduce to minimum level of surviving. This, in turn, will reduce sales and services in domestic national, thereby affect other people incomes. Author: S.R.D. / BE2_summer semester

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When many people losing their jobs their jobs as a result of outsourcing, there are fewer payroll tax receipts and fewer contributions to Social Security and Medicare. Government revenues mainly depend on income and sales tax tax.. Reduction in these areas adds to more payments going for unemployment benefits unemployment benefits which will result in increasing government spending. Article “Made in Europe”: find terms that match these meanings: 1. A trade name of a company that produces a brand of clothing. 2. Raise, move upwards 3. The difference between difference between the sales and the production costs including the overheads. 4. Countries with lower currency value and cheap labour. 5. Facilities that belong that belong to the company that produces certain goods. 6. A business deal or document giving permission to somebody to produce something under their name. 7. To make new again, to reestablish. 8. The value of goods when they reach the store. 9. Of a high social class, preferring extremely high standards. 10. The best The best or the most important store idea, building, idea, building, product, etc. that an organization owns or produces. 1. 11. (when talking about companies and banks) and banks) based based in a different country with different tax rules that cost them less money. 11. Very near. 12. Place where the production takes place. 13. Public representation or perception of a product. KEY: 1. Fashion label; 2.To lift; 3. Gross margin; 4. Low‐cost markets; 5. Company‐ owned plant; 6. Licensing arrangement; 7. Renew; 8. Retail value; 9. Snob; 10. Flagship store; 11. Offshore; 12. Round the corner; 13. Manufacturing location; 14. Brand image.

“Made in Europe”: Are these statements true or false? Explain. luxury brands are outsourcing their production. All the top super luxury brands has been shifting their production to low‐cost markets for some years. Coach has been Asia but to keep it all in Burberry decided not to outsource their production to Asia but England. Sanyo opened a flagship store in Ginza to satisfy its snob customers who demand Burberry products ‘made in Europe’. The Japanese believe believe that quality products are exclusively made in Japan. in Japan. The Japanese Prada believes that their goods have to be to be ‘made in Italy’ to maintain The CEO of Prada believes high quality standards and to express Italian style. Author: S.R.D. / BE2_summer semester

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CASE_STUDY: CAFEROMA BACKGROUND FACTS o Caferoma is a well‐known coffee brand made by a company called PEFD, based in Torino, Italy o Brand image: Italian‐style coffee, exclusive product for people who love ground coffee, has strong taste, costs more than every other brand of ground coffee in the market.

PROBLEMS THAT THE BRAND IS FACING IN THE LAST COUPLE OF YEARS o o

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Market share has declined ( ) by almost 30% Consumers have become less loyal to brands and more price conscious (they are rather buying economy brands than premiere brands) Supermarkets are selling own‐label brands at much lower prices There are lot of ‘copycat’ products – cheaper Italian‐style brands that have established themselves as a strong competition to high‐end brands like Caferoma. Caferoma’s brand image seems to be outdated, no longer exciting and new.

DESCRIBING CAFEROMA’S PROBLEMS BY USING THE DATA IN GRAPHS 1. Caferoma’s market share has declined substantially in the last year. 2. In comparison with Caferoma, top five European coffee brands coffee brands have increased their market share significantly. 3. Other coffee brands coffee brands on the market have been have been holding their market position strongly, showing no significant increase in market share. 4. Supermarket own‐label brands label brands are also maintaining their market share stable showing no changes in the last year. 5. When compared to the situation two years ago, it is evident that Caferoma reduced its sales in the last year. 6. The strongest decrease in sales is evident in the percentages of sales in supermarkets where sales of Caferoma fell by fell by almost 20 percent. 7. Sales in hotels also show a slight decrease by decrease by less than 10 percent, although the situation is not as serious as in supermarkets. 8. Although the sales in restaurants and specialist shops had been had been low even two years ago, in the last year they showed a slight increase in sales, particularly specialist shops which report a moderate increase of slightly over 10 percent in the last year.


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POSSIBLE SOLUTIONS o

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Repositioning the product – changing the brand image to appeal to different market segments. Reduce the price – to reach the medium price range. Create new advertising campaign – relaunch the brand. Sell Caferoma under different brand names at lower prices Allow supermarkets to sell Caferoma under their own brand labels Create a new product under the Caferoma brand – introduce instant coffee or decaffeinated coffee under the Caferoma brand name. Allow makers of coffee equipment to use Caferoma brand on their goods for a licensing fee – goods like cafetieres, percolators, coffee machines, cups, coffee mugs, sugar bags, etc.

LISTENING 1.6: Listen to the conversation between Caferoma’s Marketing Manager and the Sales Director and fill in the gaps in the text below: MM: Marketing Manager SD: Sales Director MM: Pietro, can I ……………………… with you? I’ve just been talking to Gina Delassi, Majestic’s new Purchasing Manager. They are going to ……………………………….. with us. They won’t change their mind. SD: That’s fifty percent of our business: we can’t ………………………………… What reason did they give for ………………………….. ? MM: Café Velvet has just ……………………………………………. and Majestic’s Head Chef is ……………………………… it. They are ………………..Café Velvet in all their hotels. SD: Are you talking to other…………………………….. ? Any idea on who we can get to ……………………..our product? We need to ………………………………….. about our new campaign. MM: Our department has already …………………………. a shortlist of possible ……………………………………..and we have …………………………………….. to target supermarkets. We aim to put these plans………………………………… next week. SD: Don’ t forget to ……………………..other hotel chains. KEY: have a word / cancel their contract / afford to lose them / cancelling / launched a new advertising campaign / endorsing / introducing / hotel chains / endorse / talk to the supermarkets / brainstormed / celebrity names / drawn up an action plan / before the board the board / survey.


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CASE STUDY: C a f e r o m a - V OC OCA B U L A R Y 

Copycat adjective [only before noun] that copies sb else’s successful idea, design, etc: strong sales of established and copycat drugs

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Reposition verb ( M a r k e t i n g ) to present a product in a new way so that it will attract more or different customers The parent company intends to reposition the brand as sportswear, rather than fashion. repositioning noun 

Percolator an appliance in which coffee is percolated (made in a container in which hot water passes through coffee) 

Sales outlet = retail store A place of business for retailing goods to consumers. 

Focus group A form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members.  Value

for mon ey An economic assessment by the public sector as to whether a project/product represents value for money; the optimum combination of cost and quality to provide the required service. 

Compete (verb) /k əmpit/ = equal; rival; match; to try to be more successful than someone or something else It's difficult difficult for for a small supermar ket to to compete compete ag ainst/w ith the the big supermar kets. Both girls compete for their fa ther's attention.

Compe titive, titive, Com petitory petitory involving competition or competitiveness; “competiti “com petitive ve g ames"; "to improve one's competitive competitive position'' position'' 

Decline (verb) /dɪklaɪn/ = go down; slump; worsen; To gradually become less, worse, or lower His interest in the project declined after his wife died. The party's par ty's popular ity ha s declined declined in the opinion opinion polls. polls.

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Groun d (coffee) (coffee) Coffee made into small bits, very much like powder.

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Conscious (adjective) /k ɒn.t n.t ʃəs/ = noticing, being aware of somehing; to notice that a particular thing or person exists or is present I think she's she's very consci conscious ous of being the only person in the office who didn't have a university education.


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He gradually became conscious (of the fact) that everyone else was wearing a suit. Price-conscious Price-conscious (adjective) (adjective) knowing how much things cost and avoiding buying expensive things price-conscious shoppers 

Label a piece of paper or other material which gives you information about the object it is fixed to Remember to put some address labels on the suitcases. Washing instructions should be on the label. Label (noun) = company a company which produces goods for sale, the goods themselves, or the company's name or symbol Her favourite d e s i g n e r label (= maker of expensive expensive clothes) clothes) is Armani. Arma ni. Their own-label vegetarian products have been a huge success. The group have just signed (= arranged to record) with a new r e c o r d label. Listening 1.6 

Endorse ( AmE spelling spelling a lso indorse) indorse ) ( M a r k e t i n g ) to say in an advertisement that you use and like a particular product or service so that other people will want to buy or use it: We decided decided to use use a celebrity celebrity to endorse endorse our r estaura nt. ; products endorsed endorsed by loya l customers 

Draw sth up to make or write sth that needs careful thought or planning:

t o d r a w u p a p l a n / l i sstt / c o n t r a c t

VOCABULARY PRACTICE 1. Use the words below to complete the sentences 1‐5. demand / consumers / respond to / factors / consumer tastes / decision making / complementary / complementary / advertisers advertisers / / 1. Producers and ……………………. use a variety of methods to try to influence …………………………………… and preferences, and through that, demand. 2. Tastes and preferences and the price of substitute and ……………………….. products influence …………………………… for goods and services. 3. Distinguishing fact from opinion in advertising enhances consumer…………………………….. . 4. People ……………………………advertising in various ways.


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5. ………………………… make better choices when they understand and consider the ………………………. that influence their demand for goods and services. **ATTENTION! o

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Complements are products that are used or consumed in combination with one another, such as hamburgers and hamburger buns, hamburger buns, peanut butter peanut butter and jelly, and jelly, and loose leaf paper and 3‐ring binders. ring binders. apple juice Substitutes are products that can replace one another, such as apple juice and orange juice, orange juice, butter butter and margarine, and pencils and mechanical pencils.

KEY: 1. advertisers; consumer tastes; 2. complementary; 3. decision making; 4. respond to; 5. Consumers; factors;

2. Match the terms on the left with their definitions on the right. 1.brand

essence

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brand image

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brand parity

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brand positioning

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brand equity

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brand loyalty

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brand name

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co‐branding

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trademark

a. How a brand is presented to differentiate it from a competing brand. b. The use of the brand names from two different companies on the same product. c. The result of a customer’s decision to always buy a particular brand. d. A word, phrase or symbol that represents a company or identifies a product and is registered to protect against its use by another party. e. The most fundamental aspect of a brand. It is often possible to express this in a single word or phrase f. The part of the brand that can be expressed verbally as words, letters or numbers g. The marketing strategy in which every product in a company’s range has its own brand name. h. How a brand is perceived in the minds of customers and what they associate with it. i. The value that a brand name and symbol adds to a product of service.


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power brand

j. How a product is similar to that of a competitor.

KEY: 1‐e; 2‐h; 3‐ j; 4‐a; 5‐i; 6‐c; 7‐f; 8‐ b; 9‐d; 10‐g;

DISCUSSION ACTIVITY a. Name a product that is advertised by a celebrity. b. Why do companies use celebrities in ads? c. Name a product that is endorsed by an authority, such as a doctor, a pharmacist, a nutritionist, a mechanic, a teacher, a police officer, and so on. d. Why do companies use authorities in ads? e. Name a product advertisement that focuses on a claim that everyone else consumes the product. f. Why do companies advertise in this way? g. Name a product advertisement that compares the quality of similar products. h. Why do companies advertise in this way?

ANSWERS b. They think that celebrity ads will influence consumer tastes and preferences for the product, and, therefore, increase consumer demand for the product. c. toothpaste, pain relievers, food supplements, frozen foods, teaching aids for children, anti‐calc machine powder, etc. d. They think that an endorsement by endorsement by an authority will influence consumer tastes and preferences for the product, and, therefore, increase consumer demand for the product. e. Levi jeans, Levi jeans, Guess, video game systems, various toys, washing‐up liquids, fabric softeners, etc. f. They think that the ad will influence consumer tastes and preferences; consumers will want what everyone else has, and the demand for the product will increase. g. Cars, pain relievers, other over‐the‐counter medications, stain removers, washing‐ up liquids, home and furniture equipment. h. If consumers think the quality of one product is higher than another, they will substitute one product for another, and the demand for the high‐quality product will increase.


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LISTENING, COURSE BOOK, P.7 Why brands matter Complete the passage below with the terms you heard on the audio track. Brands are all about ………………… .You know what a ………………………., what it means, whatʹs it going to ……………………… and you actually trust it to deliver time and time again. So in a world of…………………………………., a brand can give you something to ………………………..– itʹs a kind of …………………….. in the darkness. You can …………………. that we donʹt need brands, that weʹd all …………………………..in a world where nothing is branded and we all wear ……………………………… and buy oats out of sacks and have no choice over who we ……………………………..or what TV channels we watch. And I think one thing about brands is they add a lot of ………………………………………. and fun, as well as giving you ………………………………….things.

KEY: 1.trust; 2. brand 2. brand is about; 3. deliver; 4. endless choice; 5. fix on; 6. beacon 6. beacon (like a ray of light that shows you the way in the dark); 7. argue; 8. be 8. be better better off; 9. blue 9. blue overalls (a working suit in one piece worn when doing physical work to keep dirt away from your clothes); 10. 10. bank bank with; 11. colour and enjoyment; 12. the power to choose.

GLOSSARY OF NEW TERMS COLLOCATIONS COLLOCATION S W ITH ‘BRAND’: B r a n d (noun) a name given to a product or a group of products so that it can be easily recognized. (e.g. I have hav e bought one of the the leading leading bra brands nds of computers computers.) .) B r a n d n a m e (noun) a name the manufacturer gives a product; the product is sold under its brand name (e.g. Drug s can be sold under under different bra nd names across a cross the EU. EU. When Whe n it comes to to soft drinks, Coca-Cola Coca-Cola is the bigg est selling selling bra nd name in Brita in. in.)) Own brand (own label) (noun) products which have the trademark or label of the shop which sells them, especially a supermarket chain. They are normally cheaper than other popular brands.


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(e.g. This range is substantially cheaper than any of the other own brands available.) Bran d awar eness/ brand fam iliarity/ iliarity/brand brand re cognition degree to which people know a brand (e.g. The stra stra tegic strong point of Har ley Da vidson’ vidson’ss mar keti keting ng pla ns is the the strong brand r ecognition enjoyed enjoyed by their products. Brand a w ar arene eness ss provides provides custome customers rs w ith a degr ee of reassurance.) reassurance.) Brand promise what people (clients, consumers, end-users) expect from a brand. Brand essence The most fundamental aspect of a brand. It is often possible to express this in a single word or phrase. Brand parity parity How a product is similar to that of a competitor. Co-branding The use of the brand names from two different companies on the same product. Power brand The marketing strategy in which every product in a company’s range has its own brand name. Brand preference when consumers prefer one brand to another. Brand image all the ways in which people think about a brand OR how a brand is perceived in the mind of the customers and what they associate with it. Brand equity equity the value of a brand to its owners, as shown on a firm´s balance sheet O R the value that a brand name and symbol ads to a product or service. Branding refers to the image or impression that a company creates for its products, usually through advertising. (e.g. As we (e.g. As w e enter the 21st century, companies are placing greater emphasis on branding and mar ke keting. ting. French Connection Connection,, the fashion retailer is a g ood example example of how skilful branding can invigorate trading.) Bran d positioning positioning a firm can position a brand by emphasizing its characteristics and benefits in relation to other brands. Firms create a positioning map to show how different brands are positioned in relation to one another (e.g. in the case case of breakfa st cerea cereall a firm fir m creates a positioning map ma p to demonstrate demonstrate how their brand compares to other varieties of cereal that already exist at the market, in price, energy value, calories, etc.)


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Bran d differentiation differentiation when a company designs a product in a way that distinguishes it from competitors´ brands and communicates the comparative benefits to customers in its sales documentation, advertising, etc. (For instance, a UK mobile phone company r an a campa ign a ddressed to to the ´hardnosed business businessman´. man´. This w as an effort to differentiate its business business services serv ices from those for priv ate users a nd from business business services from less-targ eted services services offered by other mobile phone companies). Bran d stretching stretching Or brand extension is when a company uses an existing brand name for new types of product. Marketers say that this can go too far and lead to brand dilution dilution ( – making the brand less powerful.) (e.g. A good example (e.g. A exa mple of brand stretch str etching ing is when w hen tobacco tobacco companies use non-tobacco non-tobacco products such as the Marlboro Classic clothing range to promote a particular brand of cigarette.) Stretching (verb) 1. to make money last longer or buy more than planned (e.g. The sale of the enterta entertainment inment division would clear the company company ´s stretched stretched balance shee sheett ). 

2. (Marketing) + an object if a company stretches a brand, they use a successful brand name to sell new types of products or services. IDIOMATIC EXPRESSION: A t f u l l s t r e t c h : using as much energy as possible, or the greatest possible amount of supplies (e.g. We (e.g. We hav hav e been been working w orking a t full stretch stretch). ).

Brand architect architecture ure This means creating „brand realm“ - the sphere or “space” in which the brand exists. Determining brand realm is a systematic way of organizing the identity of the different products, messages, or elements of an organization so that people both within and outside of the business understand how its clients or customers are being served. Brand realm also provides a solid framework for a business to manage future opportunities so that the new ventures are strengthened by their association with the value and equity invested in current activities. The advantage of having a solid brand realm is that it’s easier and less expensive to add to the equity of an existing, strong brand than launching a new effort. Brand realm gives structure to—and communicates the relationships between the company including its divisions, business units, joint ventures, as well as its products and services, all with the objective of adding value to the brand. It is designed around the needs and interests of external audiences rather than internal ones.


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**Trademark** A word, phrase or symbol that represents a company or identifies a product or is registered to protect against its use by another party. COLLOCATIONS COLLOCATION S W ITH ‘PRODUCT’: Produ ct launch the introduction of a product to the market Product lifecycle lifecycle the length of time people continue to buy a product Product range the set of products made by a company Product placement when products are used in films or TV programmes Product endorsement the use of a well-known person to advertise a product (e.g. Sports stars earn a lot of money every year from product endorsements, especially for hig h-profile sports equipment equipment and soft drinks.) drinks.) COLLOCATIONS COLLOCATION S W ITH ‘MARKET’ Marke t leader leader The best-selling product or brand in the market. Marke t follower The second best-selling product or brand in the market. Marke t positioning positioning The process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Market research The process of obtaining information about what consumers want and need. Market segment A group of customers of similar age, income level, and social class; a sample group of potential product users. Market share A percentage of sales of a product in a particular market. Marke t value value The price which a seller might reasonably expect to get for goods, services or securities on the open market


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W HEN DESCRIBING DIFFERENT DIFFERENT PRODUCTS W E USE PHRASES LIKE: Value for mo ney (refers to the relationship between a product´s quality and its price): how much sth is worth compared with its price (e.g. We a re constantly on the lookout lookout for products that offer the best value for money.) Top of the range (adjective) (for various types of products): the most expensive of a group of similar products (e.g. I have a cquired a top-of-the top-of-the rang e computer.). computer.). Mid-range (adjective) (for various types of products): not the cheapest or most expensive, not the best or worst, etc. (e.g. mid-range DVDs; to increase sales in the mid-rang e market) mar ket) Stylish (adjective) attractive or well arranged (e.g. stylish sty lish clothes clothes;; stylish furniture) Reliable (adjective) Something or someone that is reliable can be trusted or believed because they work or behave well in the way you expect Is your w atch reliable? reliable? reliable information Gideon is very reliable - if he sa ys he'l he'lll do something, something, he'll do it. Opposite: unre liable liable Reliability (noun) Reliability (noun) /rɪlaɪә bɪl.ɪ.ti/ Rolls-Royce cars are famous for their quality and reliability. Reliably (adverb) ( adverb) /rɪlaɪә.bli/ I am reliably informed that you have been talking about resigning Luxurious (adjective) /lʌgʒʊә.ri.əs/ very comfortable and expensive They have a very luxurious house. We spent spent a luxurious w eeke eekend nd at a country hotel. Durable (adjective)/dj ʊә.rə.bl /̩ =lasting; long-lasting; long-lived; able to last a long time without becoming damaged The machines hav hav e to be made of durable materia ls. The resolution resolution calls for a dura durable ble peace settlement. settlement. Durability (noun) Durability (noun) Timeless (adjective) = not limited having a value that is not limited to a particular period but will last forever a timele timeless ss book/play book/play /film/c /film/classic lassic timeless values/questions Rothko's Rothk o's paintings have ha ve a timele timeless ss quality. Timelessly (adverb) Timelessly (adverb) Timelessness (noun)


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Inexpensive/ Inexpensive / (adjective) /ɪn.ɪkspent kspent .s v/ ɪv/ = cheap not costing a lot of money It's an inexpe inexpensive nsive perfume. Fashionable (adjective)/fæ ʃ .ən.ə.bl /̩ popular at a particular time a fashionable nightclub/restaurant fashionable ideas/cloth ideas/clothes es Fashionably (ad verb) /fæ . ən . ə.bli/ fashionably dressed Well-made (adjective) 1. skilfully built or constructed: a well-m well-made ade sofa. 2. strongly built; well-built: sturdy, well-made youngsters. Cool (adjective) informal

Very good; fashionable; hip

Course bo ok, pp. 6, 7: 7: LISTENING: 1.1; 1.2 Hype (noun) refers to the media coverage (television, radio, etc.) telling the public about a product or a service and about how good or important it is. (e.g. marketing/media hype; Despite all the hype surrounding the new model of the the palm computer, comput er, sales sa les have been slow slow . Hype (verb) (informal: hype sth (up)) (up) ) to advertise sth in a way that you exaggerate its good qualities, in order to attract greater attention of the public. (e.g.The (e.g. The opening opening of the new new w ing of the Faculty w as hyped hy ped up in the the media media a s an importa nt event.) Inflated (adjective) (often referring to prices being too high): very high; much higher than normal or reasonable. (e.g. Customers no longer want to pay highly inflated prices for luxury items. Future forecasts w ere based ba sed on inflated expectations expectations about the rise in Internet sales.) Bank (usually used as a noun but it can be a verb) [+ object]: to put money into a bank account (e.g. She is believed believed to hav e banked nearly $20 million million for the movie. [without object] to have an account with a particular bank Deliver (this word has numerous meanings in various contexts, but the following meaning results from the context the word is used in here):


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to

produce, provide or achieve sth that people expect or that will benefit sb/sth (e.g.The company delivered strong financial results last year; We are committed to delivering delivering rea reall value va lue to shareholders)

Course boo k, p. 8: Reading: Outsourcing production Outsourcing (noun) the process of arranging for sb outside a company to produce goods or provide services for that company the outsourcing of catering; cost savings from IT outsourcing; outsourcing contracts/deals outsource (verb) (e.g. We outsource outsource a ll our maintenance operations.) opera tions.) synonym of outsourcing is subcontract and the opposite is: Insourcing (noun) the process of producing goods or providing services within a company rather than buying them from outside (e.g. The company ha s benefited benefited from the insourcing insourcing of serv ices previously performed from outside suppliers. insource (verb) We insource our training. Low-cost (or: lower-cost) lower-cost ) (adjective, usually before noun) costing less than others (e.g. Easy Jet is a successful successful low-cost airline. Sony has sw itched itched all a ssembly ssembly opera tions to low low er-cost countries.; countries.; Philips Philips has a nnounced nnounced the launch of a new low-cost ra nge of kitchen kitchen applia nces.) Offshore (adjective) based in a different country (refers to the idea that certain countries have less strict laws and lower taxes than some other countries, such as the USA) (e.g. China ha s become become the lar lar gest offshore supplier supplier of computer components components to US companies.) Offshore (verb) to move part of your company’s operations to a foreign country, for example to reduce the cost of labor (e.g. It is believed believed that around a round $25 million million may have hav e bee been n offshored offshored in the last 3 yea rs. Our company ha s offshored offshored approximately appr oximately one half of its opera operations tions to to Middle East countries.) Offshore (adverb) (e.g. In the recent recent decades we hav e witnessed many multinationals moving their production production and a ssembly ssembly lines offshore.)


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Skills, page 11, Listening 1.5 Customer Customer base (also consumer base, base , less frequent) frequent) noun [C, usually sing.] all the people who buy or use a particular product or service We need need to appeal to a w ider customer customer base. ; En d point or level that is the highest or lowest in a particular range These two tw o products are fr om opposite opposite ends ends of the price rang e.; e.; We are aiming a t the the premium (= very expensive) end of the market. mar ket. t h e b ot o t t o m / h i g h / lo lo w / t o p / u p p e r e n d t h e b u d g e t / c h ea e a p / e x p e n s iv iv e / p r e m i u m e n d

Price range noun [usually sing.] a group of prices that are close together, often within fixed limits There ar e a lot of choices choices for for PCs in this price ra nge. the higher/lower/middle price range the amount that a person can afford to pay for something The apartment was way o u t o f m y p r ic ice r a n g e. To get a sale – to sell also: make/lose a sale: I'm willing to lower the price in order to make a sale. Role play, page 11, exercise D: The case of Jonson

Overpriced too expensive; costing more than it is worth: Their goods are high quality but overpriced. overpriced shares opposite: Underpriced cheap; costing less than it is worth underpriced exports/stock Market segment ( M a r k e t i n g ) a group of possible customers who are similar in income, age, habits, etc School Schoolss ar e a gr owing market segment. segment. products produced for one particular group of customers Their strong est market mar ket segment is in small notebook notebook computers. computers. Aim verb o try or plan to achieve sth We are a iming iming a t / f o r 2 000 new customers by next year. ; They They a im t o increase sales sa les by 20%. ; The government is aiming a t a 50% reduction in unemployment. unemployment. aim sth at sb (usually be (usually be aim ed ) to produce sth that meets the needs of a particular group of customers or tries to influence them The new air fares ar e aimed a t business business tra vellers. ; a marketing campaign aimed at teenagers synonym TARGET


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Floor the area in a factory, shop/store, stock exchange, etc. where things are made, displayed or traded The new stores will increase our floor space by 45%.

PORTFOLIO ASS IGNMENTS FOR UNIT 1

1. RESEARCH ASSIGNMENT You are the managing director of a company which manufactures an extremely well‐known and popular brand popular brand of soft drink. Your branding Your branding includes not only the name of the drink, but drink, but also distinctive packaging. You have advertised your product extensively, and have a large share of the soft drink market. However, you are well aware that there is a great deal of competition in your sector of the market. It means that you need to work more on on building building brand brand awareness about your product. Use the questions below questions below to create a point‐ by‐point advertising strategy for your brand of soft drink so that it will stand out from the tough market competition. You can use images, pictures, graphs or any other method that may help you to describe how you plan to boost to boost the sales of your brand. your brand. a) What is the name of your company? b) What is the name of your product? c) Describe your product. d) Describe your packaging. e) Where do you sell your product? f) How much do you charge for your product? g) Where do you advertise your product? h) Who are your major competitors? i) How do you compete against your competitors, i.e. price, unique product, taste, unusual advertising methods etc.?

Take a virtual tour at the Coca‐Cola Internet Site and get ideas on how to promote a soft drink: http://www2.coca‐cola.com/ourcompany/discoverthe cola.com/ourcompany/discovertheworldofCoca worldofCoca ‐Cola


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2. CASE STUDY ASSIGNMENT (based on the case study in your Course books) After discussing the Caferoma brand Caferoma brand in class, you need to write an e‐mail to Caferomaʹs Managing Director, Mario Cumino and explain what course of action you agreed on during the meeting with your marketing team. Use the ideas offered in the Course book. Course book. To help with your e‐mail writing task, there is a Phrase Bank posted on the web, containing phrases and expressions used in writing. Download that document, you may need it for your future assignments. file on page 133 in your Course books. You can also consult the Writing file


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Unit 1 Brands

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