E- Marketing, Material for 3rd year Marketing mgt students.

Chapter 1: Overview of E-commerce

 E-commerce, or electronic commerce, refers to the buying and selling of goods and services
over the internet. It encompasses a wide range of online business activities, including retail
shopping, auctions, and payment processing.
 E-commerce continues to evolve, driven by technological advancements, changing
consumer behaviors, and emerging market trends.
 E-Commerce or Electronics Commerce is a methodology of modern business, which
addresses the need of business organizations, vendors and customers to reduce costs and
improve the quality of goods and services while increasing the speed of delivery.
 E-commerce refers to the paperless exchange of business information using the following
ways:
 Electronic Data Exchange (EDI)
 Electronic Mail (e-mail)
 Electronic Bulletin Boards
 Electronic Fund Transfer (EFT)
 Other Network-based technologies
Types of E-Commerce
1. Business-to-Consumer (B2C): Transactions between businesses and individual
consumers. This is the most common form, with examples like Amazon, eBay, and
online retailers.
2. Business-to-Business (B2B): Transactions between businesses. Companies sell products
or services to other companies, often in bulk. Examples include Alibaba and various
wholesale distributors.
3. Consumer-to-Consumer (C2C): Transactions between individual consumers, often
facilitated by third-party platforms. eBay, Craigslist, and Facebook Marketplace are
examples.
4. Consumer-to-Business (C2B): Individuals sell products or services to businesses.
Examples include freelance platforms like Upwork or Fiverr.

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5. Government-to-Business (G2B): Transactions between government entities and

businesses, often involving procurement and regulatory compliance.
6. Mobile Commerce (m-commerce): Shopping and transactions conducted through
mobile devices, such as smartphones and tablets.

Key Components of E-Commerce

1. Online Storefront: A website or app where products or services are displayed for
consumers to browse and purchase.
2. Payment Processing: Systems that facilitate online payments, such as credit card
processing, digital wallets (e.g., PayPal, Apple Pay), and cryptocurrency transactions.
3. Supply Chain Management: The management of the flow of goods and services,
including inventory, warehousing, and logistics.
4. Marketing and Advertising: Strategies used to attract and retain customers, including
SEO (search engine optimization), social media marketing, and email campaigns.
5. Customer Service: Support provided to customers before, during, and after the purchase,
often through chatbots, email, or phone support.

Advantages of E-Commerce

 Convenience: Shopping can be done 24/7 from anywhere with an internet connection.
 Wider Reach: Businesses can reach a global audience, expanding their customer base
beyond local markets.
 Lower Operational Costs: E-commerce often requires less overhead than traditional
brick-and-mortar stores.
 Personalization: Data analytics allows businesses to tailor marketing and
recommendations to individual customer preferences.

Challenges of E-Commerce

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 Security Concerns: Risks related to data breaches and fraud can deter customers from
shopping online.
 Logistics and Fulfillment: Managing inventory, shipping, and returns can be complex.
 Competition: The low barrier to entry leads to high competition, making it essential for
businesses to differentiate themselves.
 Changing Regulations: E-commerce is subject to various laws and regulations that can
change, affecting operations.

Trends in E-Commerce

 Social Commerce: Selling through social media platforms like Instagram and TikTok.
 Augmented Reality (AR): Enhancing the shopping experience by allowing customers to
visualize products in their environment.
 Subscription Services: Offering products or services on a recurring basis, like streaming
services or monthly product boxes.
 Sustainability: Growing consumer demand for eco-friendly products and practices.

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A company usually pursues a mix of these new products and it is found that only 10% of all new
products are truly innovative or new to the world because they involve the greatest cost and
risk since they are new both to the marketplace and the company.

 The new-to-the-world category involves the greatest cost and risk because these products
are new to both the company and the marketplace, so positive customer response is far
from certain. That’s why most new-product activities are improvements on existing products.
At Sony, for example, over 80 per cent of new-product activity is undertaken to modify and
improve existing Sony products. Even new-product improvements are not guaranteed to
succeed.

1.4 Organization for New Product Development

 The development of a new product, whether consumer or industrial goods or services, can be
a highly involved process. It is seldom just a matter of dreaming up a new idea and rushing
it to the marketplace - the risks of loss are far too great.
 If a company has an organized new product development effort it has more chances of
success. New product development, therefore, can be successful if a company establishes an
effective organization to take care of the new product development process. This type of
organization should begin with the top management of the company since it is ultimately
accountable for the success of the new product.
 It should specify the business domain of the company as well as categories of products where
it should concentrate.
 The next important area of decision of top management is how much to budget for new
product development. Here management faces a real challenge since normal investment
criteria for budgeting cannot be applied here because R & D outcomes are very uncertain.
There could be several ways out such as encouraging and financing as many projects as
possible, setting R & D budget by applying a conventional percentage of sales figures, or it
may spend keeping pace with the competitors. Some companies on the other hand decide the
number of new products they need and estimate how much money they require to invest for
R& D of this number of new product development.
 Establishing an effective organizational structure is a key factor in new product

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development work. How the company is organized for new product development
depends on several factors. They are:
The extent to which it relies on new products for profits and growth; to what extent
does it enhance profitability?
The extent of its financial resources available for research and development and the
new product introduction;
 It's research and new product expertise; and
The stability and market positions of its existing product lines.
 The company can organize this effort in various ways. The most common methods are
described in the following sections.
 Product managers: Many companies assign responsibility for new product ideas to
product managers.
In practice, this system has several faults. Product managers are so busy managing
existing lines that they give little thought to new products other than line extensions.
They also lack the specific skills and knowledge needed to develop and critique new
products.
 New-product managers: Kraft and Johnson & Johnson have new-product managers
who report to category managers. This position professionalizes the new product
function. However, like product managers, new-product managers tend to think in
terms of modifications and line extensions limited to their product market.
 New-product committees: Many companies have a high-level management
committee charged with reviewing and approving proposals.
 New-product departments: Large companies often establish a department headed by a
manager who has substantial authority and access to top management. The
department’s major responsibilities include generating and screening new ideas,
working with the R&D department, and carrying out field testing and
commercialization.
 New-product venture teams: A venture team is a group brought together from various
operating departments and charged with developing a specific product or business.
They are “entrepreneurs” relieved of their other duties and given a budget, a time

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frame, and a “skunk works” setting. Skunkworks are informal workplaces, sometimes
garages, where entrepreneurial teams attempt to develop new products.

1.5 The Process of New Product Development

 The process of developing new products spans eight stages, each with a particular set of
marketing challenges. This section covers the stages from idea to strategy and analysis; the
following section covers the stages from product development through market testing and
commercialization.
1. Idea Generation
 The marketing concept holds that customer needs and wants are the logical place to start
the search for new product ideas. Many of the best ideas come from asking customers to
describe their problems with current products. In addition to customers, new product ideas
can come from many sources: scientists, competitors, employees, channel members, sales
reps, top management, inventors, patent attorneys, university and commercial laboratories,
industrial consultants, advertising agencies, marketing research firms, and industry
publications.
2. Idea Screening
 Once the firm has collected several new product ideas, the next step is to screen out the
weaker ideas, because product development costs rise substantially with each successive
development stage. Most companies require new-product ideas to be described on a standard
form that can be reviewed by a new-product committee. The description states the product
idea, the target market, and the competition, along with a rough estimate of the market size,
product price, development time and costs, manufacturing costs, and rate of return.
3. Concept Development
 A product idea is a possible product the company might offer to the market. In contrast, a
product concept is an elaborated version of the idea expressed in meaningful consumer
terms. A product idea can be turned into several concepts by asking:
 Who will use this product?
 What primary benefit should this product provide?
 When will people consume or use this product?

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 By answering such questions, a company can often form several product concepts, select
the single most promising concept, and create a product-positioning map for it.
4. Concept Testing
 Concept testing involves presenting the product concept to appropriate target consumers and
getting their reactions. The concepts can be presented symbolically or physically. However,
the more the tested concepts resemble the final product or experience, the more dependable
concept testing is.
 Today firms can design several prototypes via computer and then create plastic models to
obtain feedback from potential consumers. Companies are also using virtual reality to test
product concepts.
 Many companies today use customer-driven engineering to design new products. Customer-
driven engineering attaches high importance to incorporating customer preferences in the
final design.
5. Marketing Strategy Development
 After testing and selecting a product concept for development, the new product manager
must draft a three-part preliminary marketing strategy plan for introducing the new product
into the market. The first part will describe the target market’s size, structure, and behaviour;
the planned product positioning; and the sales, market share, and profit goals sought in the
first few years.
 The second part will outline the planned price, distribution strategy, and marketing budget
for the first year. The third part will describe the long-run sales and profit goals and
marketing mix strategy over time. This plan forms the basis for the business analysis that is
conducted before management makes a final decision on the new product.
6. Business Analysis
 In this stage, the company evaluates the proposed new product’s business attractiveness by
preparing sales, cost, and profit projections to determine whether these satisfy company
objectives. If they do, the product concept can move to the product development stage.
Note that this cannot be a static process: As new information emerges, the business analysis
must be revised and expanded accordingly.

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 First, management needs to estimate whether sales will be high enough to yield a
satisfactory profit.
 After preparing the sales forecast, management should analyze expected costs and
profits based on estimates prepared by the R&D, manufacturing, marketing, and finance
departments. Companies can also use other financial measures to evaluate new-product
proposals. The simplest is break-even analysis, in which management estimates how
many units of the product the company will have to sell to break even with the given
price and cost structure.
7. Product Development
 If the product concept passes the business analysis test, it moves on to be developed into a
physical product. Up to now, it has existed only as a word description, drawing, or
prototype. This step involves a large jump in investment that dwarfs the costs incurred in the
earlier stages. If the company determines that the product idea cannot be translated into a
technically and commercially feasible product, the accumulated project cost will be lost—
except for any useful information gained in the process.
8. Market Testing
 After management is satisfied with functional and psychological performance, the product
is ready to be dressed up with a brand name and packaging and put to a market test. The
new product is now introduced into an authentic setting to learn how large the market is and
how consumers and dealers react to handling, using, and repurchasing the product.
9. Commercialization
 If the company goes ahead with commercialization, it will face its largest costs to date. The
company will have to contract to manufacture build or rent a full-scale manufacturing
facility.
 Major decisions during this stage include:
 When (timing). Marketing timing is critical. If a firm learns that a competitor is nearing
the end of its development work, it can choose: first entry (being first to market, locking
up key distributors and customers, and gaining reputational leadership; however, if the
product is not thoroughly debugged, it can acquire a flawed image); parallel entry
(launching at the same time as a rival may gain both products more attention from the

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market); or late entry (waiting until after a competitor has entered lets the competitor
bear the cost of educating the market and may reveal problems to avoid).
 Where (geographic strategy). The company must decide whether to launch the new
product in a single locality, a region, several regions, the national market, or the
international market. Smaller companies often select one city for a blitz campaign,
entering other cities one at a time; in contrast, large companies usually launch within a
whole region and then move to the next region, although companies with national
distribution generally launch new models nationally. Firms are increasingly rolling out
new products simultaneously across the globe, which raises new challenges in
coordinating activities and obtaining agreement on strategy and tactics.
 To whom (target-market prospects). Within the rollout markets, the company must target
its initial distribution and promotion to the best prospect groups. Presumably, the
company has already profiled the prime prospects—who would ideally be early adopters,
heavy users, and opinion leaders who can be reached at a low cost. The company should
rate the various prospect groups on these characteristics and then target the best prospect
group to generate strong sales as soon as possible, motivate the sales force, and attract
further prospects.
 How (introductory market strategy). The company must develop an action plan for
introducing the new product into the rollout markets. To coordinate the many activities
involved in launching a new product, management can use network planning techniques
such as critical path scheduling (CPS), which uses a master chart to show the
simultaneous and sequential activities that must take place to launch the product. By
estimating how much time each activity takes, the planners can estimate the project’s
completion time. A delay in any activity on the critical path will delay the entire project.

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1.6. Factors for Successful Innovation

 Product innovation encompasses a variety of product development activities – product
improvement, development of entirely new products, and extensions that increase the range
or number of lines of products the firm can offer. Product innovations are not to be confused
with inventions.
 The latter are new technologies or products which may or may not be commercialized and
may or may not deliver benefits to customers. An innovation is defined as an idea, service,
product or piece of technology that has been developed and marketed to customers who
perceive it as novel or new.
 New product development is an act of innovation which entails a process of identifying,
creating and delivering new-product values or benefits that were not offered before in the
marketplace.
 Innovation is crucial to long-term success in an organization, yet the risks are high with
significant rates of new product failure. The managerial issues and problems to which this
dilemma gives rise are considerable. A combination of the recognized importance of
innovation and the high risk of failure has meant that his area of company activity has
attracted substantial attention and research in recent years.
 Successful innovators tended to be distinguished by the following five elements:
1. They had a much clearer idea of user needs.
2. Put much more effort into marketing their innovations – not just at the original idea stage by
looking for gaps in the market, but throughout the process of development and launch.
3 Paid much more attention to the development stage of their innovations than those innovators
who failed. This often meant that the development work proceeded more slowly, but it was more
effective.
4. They were much more willing and indeed able, to use outside help and advice in developing
their products. However, most tended to perform more of the practical development work in-
house
5. They were distinguished by a high degree of commitment to their innovations. Usually, a
senior manager with substantial activity in the organization was in charge of the successful
innovation in each pair.

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Why New Products Fail?

 A high-level executive pushes a favourite idea through despite negative market research
findings.
1) The idea is good, but the market size is overestimated.

2) The product is not well-designed.

3) The product is incorrectly positioned, ineffectively advertised or overpriced.

4) Development costs are higher than expected or

5) Competitors fight back harder than expected.

New-Product Success

 The success factors are a unique superior product, one with higher quality, new features
and higher value in use. Another key success factor is a well-defined product concept
before development, in which the company carefully defines and assesses the target
market, the product requirements and the benefits before proceeding.
 New products that meet market needs more closely than existing products invariably do well.
 Other success factors included technological and marketing synergy, and quality of
execution in all stages.

Chapter - Two:

2. Over View of Brand Management

2.1. Introduction to Brand Management and its Definitions

What is a brand?

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 The concept of branding has evolved over centuries, adapting to societal, economic, and
technological changes. Branding traces its roots to ancient times when humans first began to
leave marks on their products to distinguish them from others. Early forms of branding
were practical and tied to ownership, quality assurance, and identification.
 Branding is derived from and Old Norse or Norwegian brander meaning to burn, as in
branding cattle. Though the practice of branding has begun with ancient Egyptians, later it
spreads to Europe. They used to brand their cattle with a hot branding iron in order to
differentiate one’s cattle from others in case they lost. Or incase if somebody steal someone
animal anyone can detect the symbol and deduce the actual owner.
 For example,
 Ancient Egyptians branded livestock with hieroglyphics to signify ownership, using symbols
burned into animals’ hides.
 Mesopotamia Potters would inscribe marks on their wares to denote their origin or the
maker's identity, establishing some of the earliest known trademarks.

 Roman Empire: In Rome, brick makers stamped their products to show their origin, which
helped ensure consistency in the materials used for construction.

 The different brand names tell us another part of the story of the evolution of branding. The
first brands were names. Many of what we now call modern brands are just names,(e.g.
Ford, Nestle) These are names of people who founded companies and started selling
products which they were proud of .
 Once the power of the brand was recognized, there was a strong incentive to come up with
powerful and attractive brand names. .
 Overtime branding has moved from being just a way of identifying the make and a seal of
guarantee, to today’s situation where the brand has taken on a more important role of distinct
values. The brand is to distinguish one product from another, to guarantee a certain quality.
 According to the American marketing Association (AMA), “a 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.”
Technically speaking, then whenever a marketer creates a new name, logo, or symbol for a
new product, he or she has created a brand.
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 These three elements, identity, quality and communication remains the corner stone’s of
the branding process.
 Brand is part of a product.
 Brand is a mind set .
 Brand is an image in the mind of customers developed through time.
 A brand is a promise, hence customers believe brands.
 A brand identifies the seller or maker.
 It is a promise to deliver a specific set of features, benefits, and services consistently
to the buyers.
 A brand is much more than just a logo, slogan, or product. It represents the identity and
reputation of a business or individual in the market. It encompasses a combination of
elements, including:

1. Name: The brand's name, which is often the first point of recognition.
2. Logo: The visual representation or symbol of the brand.
3. Values and Mission: What the brand stands for, its guiding principles.
4. Perception: How customers perceive the brand, shaped by interactions, experiences, and
communication.
5. Personality: The human traits or characteristics associated with the brand (e.g., fun,
professional, innovative).
6. Products or Services: What the brand offers, which plays a critical role in shaping its
identity.
7. Customer Experience: The overall experience people have when interacting with the
brand, including customer service, online presence, and physical interactions.

Importance of a Brand

1. Recognition: A strong brand is easily recognizable, helping customers identify your

products and services quickly among competitors.
2. Trust and Loyalty: A well-established brand fosters trust with its audience. When
people have positive experiences with a brand, they are more likely to return and stay
loyal.

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3. Market Differentiation: Branding allows businesses to differentiate themselves from

competitors. In crowded markets, a unique brand identity can help stand out.
4. Emotional Connection: Strong brands evoke emotional responses. People often buy
products from brands they feel connected to, beyond just practical or functional reasons.
5. Business Value: A reputable brand increases the value of a company by creating a
perceived worth that goes beyond tangible assets. This is important in attracting
investment, partnerships, or during mergers and acquisitions.
6. Consistent Experience: A well-managed brand provides consistency across various
touchpoints (e.g., social media, advertisements, customer service), enhancing customer
trust and satisfaction.
7. Marketing Efficiency: A strong brand simplifies marketing efforts. Once a brand has a
solid foundation, campaigns can focus more on reinforcing the brand identity rather than
continuously introducing it.
8. Employee Engagement: A strong brand is not only external but also internal. Employees
who resonate with the brand's values are more likely to feel engaged, motivated, and
aligned with the company’s mission.

 In essence, a brand is a crucial asset for any organization or individual, impacting everything
from customer perception to business growth.

The main Branding basis

 The names or marks given to products or services come in many different forms and can be
based on
 People (Sam Walton, , Maru, Mesfin, Louis Chevrolet, Dell, Honda
 place, (Toyota (founder even-Toyoda, Derba, Messebo, dashen, Raya, Harrar, Axumite, BMW,
Fuji, Nokia
 Animal or bird, (Dove, Redbul, kangaroo, Lion , Jaguar, Puma, dolphin, Camel etc.
 Scientific term (Pepsin-digestive enzyme
 Things or objects.(Coca cola, Samsung (3 stars)

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Can anything be branded?

1. Commodity, Coffee (Nestle, Abyssinia, Yirga Cheffe, Keffa, Harrar etc), salt (Afdera), beer
(Castle, Heineken, Guinness, Habesha,), and even water (highland, Mercy, Abyssinia,
Bekoji, Yes), Sesame(Humera, Gonder, Welega) Teff (Adet, Bichena, Mota, or Gojam …)
etc.
2. Physical goods– Beverages-Pepsi, coca coal
Car: Mercedes-Benzes,
Films: Kodak, fuji
3. Services –EAL, British Airways, Lufthansa, Emirates, Sheraton Hotel, Intercontinental
Hotel, Hilton Hotel, DHL, EMS, Master card and Visa card etc.
4. Retailers and Distributors –Tesco Plc, Wal-Mart retailer, Costco Wholesale Corporation,
Ale Bejimla, JinAd etc
5. Online product and services: online product sellers (Amazon.com, eBay, alibaba.com
Walmart etc. Online service brands are (Google, Facebook, YouTube, yahoo, skype etc.
6. People and Organizations Cindy Crawford (supermodel), Zenit Mohaba, Oprah TV
7. Sports, Arts, and Entertainment –with movies, TV, music and books). Example DS TV,
SKYsport,
8. Geographic Locations –Ethiopia ( 13 months of sunshine, Ethiopia Land of origins) e.g.
Australia, World Wildlife Fund, city of Lalibela, city of Axum etc.

2.2 How can organizations Establish a sound brand?

 Establishing a sound brand requires a combination of strategy, creativity, and consistency.

It’s about creating an identity that not only represents your company but also forms a strong,
emotional connection with your audience.
 It involves creating a strong, memorable identity that resonates with your target audience and
differentiates your business from competitors. Here’s a step-by-step guide to building a solid
brand:

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1. Define Your Brand Purpose and Vision

 Purpose: What is your company’s reason for existence beyond making a profit? This
could be related to solving a specific problem, contributing to society, or inspiring people
in some way.
 Vision: Where do you see your brand in the future? This long-term goal should align
with your company’s core values and serve as a guide for decision-making.
2. Understand Your Target Audience
 Conduct market research to understand the demographics, behaviours, needs, and
desires of the audience you’re trying to reach. A sound brand connects deeply with its
audience by addressing their specific pain points and aspirations.

3. Create a Unique Value Proposition

 A strong brand is built on a compelling value proposition that answers why customers
should choose your product or service over others. This should be clear, and concise, and
focus on the unique benefits you offer.
4. Develop Brand Personality
 Define your brand’s personality traits, much like you would for a person. Are you fun,
serious, professional, quirky, or bold? The tone you use in communications, from your
website to social media, should reflect this personality consistently.
5. Design a Memorable Visual Identity

 Logo: Design a distinctive logo that represents your brand. It should be simple,
memorable, and versatile across different media.

 Colours and Typography: Choose brand colors and fonts that evoke the right emotions
and associations for your brand. Consistency in visuals helps with brand recognition.

 Imagery: Use images and videos that align with your brand's voice and visual identity.

6. Craft a Consistent Brand Message

 Your messaging should be clear, consistent, and aligned with your brand values. Develop
taglines, slogans, and brand stories that convey your brand’s essence and resonate with
your audience emotionally.

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7. Establish Brand Guidelines

 Create a brand style guide that outlines your brand’s voice, tone, visuals, and usage rules.
This ensures consistency across all platforms and touchpoints, from marketing campaigns
to customer service interactions.

8. Build a Strong Online Presence

 Your website, social media, and content marketing efforts should reflect your brand.
Develop a professional website that embodies your brand’s aesthetics and values, and use
social media to engage with your audience authentically.

9. Deliver on Your Brand Promise

 A sound brand is built on trust and reliability. Consistently delivering on your brand
promise is essential to fostering customer loyalty and building a positive brand
reputation.

10. Monitor and Adapt Your Brand

 Stay aware of changes in your industry, customer preferences, and market trends. A
strong brand adapts without losing its core identity, evolving to stay relevant while
maintaining its essence.

2.3 Types of Brands

 Choosing the right type of brand name depends on factors like your industry, brand
personality, target audience, and long-term goals. The best brand names are those that align
with your values, stand out in the market, and resonate with your audience.
1. Generic products
o Goods without any efforts at branding.
o There is little or no advertising and no brand names.
o Common categories of generic products include food and household staples

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2. Manufacturer’s brand
 They are also called national brands.
 It is a brand name owned by a manufacturer or other producer.
Examples: HP, Sony, Pepsi-Cola, Dell,
3. Private brands
 Brands are offered by wholesalers and retailers.
Examples: Wal-Mart, Kmart
Captive brands: products manufactured by a third party exclusively for a retailer then
the retailer brands it and labels it. Wal-mart
4. Family brand
 Is a single brand name that identifies several related products.

For example: Apple, Samsung, LG…

5. Individual brand

 Manufacturing and marketing a product as uniquely identifies the item itself, rather than
under the name of the company.
 For example: Unilever (food and beverage products); Home and personal care brands- like
Axe, Signal, Omo, Surf, Lux, Lifebuoy, and Dove soaps).

 When choosing a brand name, there are several different types to consider. Each type has
its advantages and is suited to different branding strategies. Here's an overview of the main
types of brand names:

1. Descriptive Brand Names

 Definition: These names describe exactly what the product or service is or does. They are
straightforward and informative.
 Examples: General Motors, The Weather Channel, American Airlines
 Advantages:
o Immediately communicates what the company offers.
o Often easier for consumers to understand and remember initially.

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 Disadvantages:
o May lack creativity or distinctiveness.
o Harder to trademark because the name might be too generic.
2. Evocative Brand Names
 These names suggest the brand’s positioning or the kind of experience it offers, without
directly describing the product or service.
 Examples: Amazon, Nike, Patagonia
 Advantages:
o More creative and unique.
o Often evoke strong emotional responses, making them memorable.
 Disadvantages:
o May require more effort to explain or market initially.
o Could be harder for consumers to immediately understand the offering.
3. Invented or Fanciful Brand Names

 Completely made-up words, often used to create a unique and original brand identity.
 Examples: Google, Kodak, Xerox
 Advantages:
o Highly distinctive and easier to trademark.
o Can be designed to sound pleasant or appealing.
 Disadvantages:
o May require a lot of marketing to build recognition.
o The meaning of the name is not immediately clear.

4. Acronym Brand Names

 Names made up of initials or abbreviations, often from the first letters of a longer
descriptive name.
 Examples: IBM (International Business Machines), BMW (Bayerische Motoren Werke),
KFC (Kentucky Fried Chicken)
 Advantages:

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o Short, simple, and often easy to remember.

o Useful for companies with long, descriptive names.
 Disadvantages:
o Acronyms can be hard to interpret or may seem impersonal.
o They may lack meaning without context.

5. Geographical Brand Names

 These names are based on a location, either where the company is founded or the area it
serves.
 Examples: Kentucky Fried Chicken, Swiss Air, California Pizza Kitchen
 Advantages:
o Helps build an association with a particular place, which can be appealing.
o Can add authenticity or prestige, especially if the place is well-known.
 Disadvantages:
o May limit future growth if the company expands beyond the region.
o If the location has a negative connotation, it can affect the brand.

6. Founder or Personal Brand Names

 These names use the founder’s or owner’s name as the brand.

 Examples: Ford (Henry Ford), McDonald's (Richard and Maurice McDonald), Disney
(Walt Disney)
 Advantages:
o Adds a personal touch, creating a story behind the brand.
o Can create a strong, identifiable legacy.
 Disadvantages:
o May be harder to sell or transfer ownership.

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o The brand may be tied to the founder’s reputation, for better or worse.

7. Suggestive Brand Names

 Definition: These names suggest the qualities or benefits of the product without directly
describing them.
 Examples: Facebook, Pinterest, Groupon
 Advantages:
o They hint at what the brand offers while remaining creative.
o Often more memorable than descriptive names.
 Disadvantages:
o May not be immediately clear to all consumers.
o Can require explanation or context in some cases.

8. Compound Brand Names

 These names combine two or more words to create a unique name.

 Examples: Microsoft (Microcomputer + Software), Facebook (Face + Book), Snapchat
(Snap + Chat)
 Advantages:
o Creates a distinctive identity.
o Can describe the brand while still being creative and unique.
 Disadvantages:
o Some combinations may be awkward or difficult to say.
o May become outdated if one part of the compound is no longer relevant.

9. Metaphorical Brand Names

 These names use metaphors or symbolic meanings to create a brand identity.

 Examples: Jaguar (speed and luxury), Dove (peace and purity), Apple (knowledge and
innovation)
 Advantages:

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o Can be highly creative and memorable.

o Often evokes positive imagery and emotions.
 Disadvantages:
o May require an explanation if the metaphor is too abstract.
o Can be harder to communicate the product offering.

10. Hybrid Brand Names

 These names combine elements from two or more types of brand names, such as mixing
descriptive and evocative elements.
 Examples: Burger King (descriptive + suggestive), PayPal (compound + suggestive)
 Advantages:
o Offers flexibility in branding, combining the benefits of multiple name types.
o Can be more engaging and informative.
 Disadvantages:
o The combination may not always be harmonious or easy to communicate.
o The name could become too complex or long.

2.3.1 The Three Cs of Branding

 The Three Cs of Branding Clarity, Consistency, and Credibility are essential pillars for
building and maintaining a strong brand. They help ensure that a brand's identity is well-
defined, trustworthy, and effectively communicated to its audience.
 The Three Cs together work to form a cohesive, trustworthy, and recognizable brand.
Clarity ensures your audience understands your brand; consistency reinforces recognition and
reliability; and credibility builds trust and loyalty. Together, these elements create a strong
foundation for successful branding.
1. Clarity
 Clarity refers to how well-defined and easily understood a brand is. It involves having a
clear brand purpose, message, and positioning.

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 Brands must set what they are and not.

 Must set the promise they stand for and that sets them apart from their competitors.
 They must be clear in their promise. Example: Safety first (EAL and Volvo)
 Key Elements:
o Brand Message: The core message of your brand should be simple, focused, and
easy to communicate. It should reflect what your brand stands for and what value it
offers to your audience.
o Target Audience: Knowing who your brand serves is critical. A clear
understanding of your target market helps ensure that your message resonates with
the right people.
o Brand Identity: From the logo to the tagline, every visual and verbal element of
your brand should represent what your brand is about.
 Why It Matters: A clear brand reduces confusion and ensures that customers understand
what your company stands for, making it easier to build trust and engagement.
2. Consistency
 Consistency refers to the uniformity of your brand's messaging, visual identity, and
customer experience across all platforms and touchpoints.
 Whatever model, version, place or anything else changed companies shouldn’t change
their commitment.
 For Example Volvo, they are always about safety. They don’t change their focus from
model to model.
 Key Elements:
o Visual Elements: Logos, colours, fonts, and imagery should be used consistently in
marketing materials, websites, and packaging to create a recognizable brand.
o Tone and Voice: Whether communicating through social media, customer service, or
advertising, the tone and voice of your brand should remain consistent. For example,
if your brand is playful, all content should reflect that same energy.
o Customer Experience: Every interaction, whether it’s online or in-person, should
consistently reflect your brand's values and promises.

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 Why It Matters: Consistency strengthens brand recognition and helps customers know
what to expect from your company. A consistent brand fosters trust and loyalty by
delivering a unified experience.
3. Credibility
 Credibility is the level of trust and authenticity a brand has with its audience. It is built
over time through reliable and authentic interactions.
 Key Elements:
o Authenticity: Being genuine in your brand’s message, actions, and promises. Avoid
making exaggerated or false claims, and always deliver on your brand promise.
o Reputation: Positive customer reviews, endorsements, and word-of-mouth all
contribute to brand credibility. A good reputation increases trust and attracts new
customers.
o Expertise: Being seen as a leader or authority in your industry can significantly boost
credibility. This can be achieved through thought leadership, quality products or
services, and staying true to your brand's values.
 Why It Matters: A credible brand is one that people trust, which is key to long-term
customer relationships. Credibility turns customers into advocates and reduces the
barriers to purchase.
Conclusion

2.4 Relation and difference of Brand and product.

 Products are tangible outputs manufactured by a company. But Brands are intangible.
 Products can be for a single element of the company’s product mixes, whereas brand
represents all the product mix elements even the company as a whole. Product is in a
single category of a company’s product categories. However, the brand represents all
product categories of the company.
Hence, the difference encompasses:
A product is an item which is ready for sale in the market, whereas a brand is
something that distinguishes a product from other products in the market
A product performs a function whereas Brands offer an emotion.
o Products are prepared to do something for customers

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o Products are all that they do for people.

o Products fulfil customer’s needs.
o Functions, ingredients and needs make up a product.

Whereas

o Brands don’t cover a customer’s needs, rather they fulfil the customer’s wants.
o We don’t fall in love with products, we fall in love with brands.
o Brands offer a promise and an emotion.
o Brands are about how they make people feel.

(In short, You may need a product, but You will want a brand)

For example: You may need a cup of coffee (Product), but you may want to get it at Starbucks or
yergachefe, Wonbera, or Harer (Brand).

A product is something that is made in a factory; a brand is something that is bought by a

customer. (Companies make products and consumers make brands)
A product can be copied by a competitor, a brand is unique.
A product can be replaced whereas a brand can’t.
A product can be quickly outdated; a successful brand is timeless.
Product is a physical entity but brand is a perceptual entity.
2.4.1 Importance of Brands to Consumers
Identification of the source of the product: Consumers can easily make a purchase
decision based on brands. Consumers usually find brands which satisfy their needs.
Assignment of responsibility to product maker.
Risk reducer: Brands mean lower purchase risk to consumers as they are dealing with a
product or organization that they trust.
Search cost reducer: If the consumers recognize a particular brand and have knowledge
about it, they make quick purchase decisions and save lot of time. Also, they save search costs
for products.
Promise, bond, or pact with product maker

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Symbolic device: Brands play a significant role in signifying certain product features to
consumers.
Signal of quality: Consumers see ‘brands’ as a symbol of quality and remain committed and
loyal to a brand as long as they believe that the brand will continue meeting their expectations
and perform in the desired manner consistently.

2.4.2 Importance of Brands to the Firm

• Identification to simplify handling or tracing

• Legally protecting unique features: Brands help to protect the unique features/traits of
products by legal copyrights.
• Signal of quality level.
• Endowing products with unique associations
• Source of competitive advantage: A brand helps the firms to provide consistently a unique
set of characteristics, advantages, and services to the buyers/consumers.
• Source of financial returns: Brands form the basis of purchase decisions among consumers
and thus are a means of financial profits.

2.5. Why do brands matter?

 Brands matter because they play a crucial role in shaping consumer perceptions, building
trust, and fostering emotional connections.
 A strong brand helps businesses differentiate from competitors, increases customer loyalty,
provides a competitive edge, and adds financial value.
 For consumers, brands simplify decision-making and offer reassurance that they are
making a reliable, valuable choice.
 Brands matter for several key reasons, both for businesses and consumers. A well-
established brand provides value beyond the product or service itself, creating emotional

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and practical benefits that influence purchasing decisions. Here’s why brands matter:

1. Differentiation in the Market

 Stand Out from Competitors: A strong brand helps a company differentiate itself from
competitors in a crowded marketplace. A well-defined brand identity makes it easier for
consumers to recognize and choose your product or service over others.
 Unique Identity: Brands provide a unique identity that reflects what the company stands
for, its values, and its personality. This makes it easier for customers to connect with the
business.

2. Consumer Trust and Loyalty

 Builds Trust: Established brands develop credibility over time, which fosters trust with
customers. People are more likely to buy from a brand they recognize and trust rather
than from an unknown competitor.
 Creates Loyalty: Strong brands create loyal customers who are emotionally connected
to the brand. This loyalty results in repeat purchases and advocacy, where customers
recommend the brand to others.

3. Emotional Connection

 Brand as an Experience: Brands often evoke emotions and feelings, providing more
than just a product or service. Consumers may choose a brand because it aligns with their
values, lifestyle, or aspirations, creating a deeper emotional connection.

 Perception of Value: A strong brand can enhance the perceived value of a product,
making customers willing to pay more for it because of the brand’s reputation or
emotional impact. For example, luxury brands command premium prices due to their
association with quality and prestige.

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4. Customer Recognition

 Brand Awareness: A recognizable brand is essential for marketing success. The more
familiar a brand is, the more likely customers are to consider it when making purchasing
decisions. Brand recognition can be the result of consistent branding, strong advertising,
or word-of-mouth promotion.
 Ease of Decision Making: For customers, a strong brand simplifies decision-making. In
a world of overwhelming choices, brand loyalty and recognition reduce the effort
required to choose, as customers gravitate toward the brands they trust.

5. Competitive Advantage

 Market Positioning: A strong brand can create a competitive edge by establishing a

unique market position. A brand with a strong reputation often has an advantage when
entering new markets or launching new products.
 Barriers to Entry: Well-established brands create barriers for competitors. New entrants
may find it difficult to compete with established brands because they lack the trust,
loyalty, and recognition that well-known brands have already built.

6. Increased Financial Value

 Brand Equity: Strong brands have high brand equity, meaning they add financial value
to the company. This equity allows businesses to charge premium prices, attract
investment, and weather market fluctuations more effectively.
 Asset for Business: A brand is an intangible asset that can significantly increase a
company’s overall valuation. Successful brands are often seen as valuable assets in
mergers, acquisitions, or during periods of growth and expansion.

7. Guides Marketing and Communication

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 Brand Consistency: A well-defined brand provides a clear direction for all marketing
efforts. It informs the design of marketing materials, advertising strategies, and the tone
of customer communications.
 Simplifies Brand Management: With a strong brand identity in place, companies can
create a more streamlined and consistent approach to managing customer interactions,
online presence, and advertising campaigns.

8. Employee Motivation and Engagement

 Sense of Purpose: Employees are more likely to feel motivated and aligned with the
company’s goals if they believe in the brand and what it stands for. A strong brand can
foster a sense of pride and belonging among employees.
 Attracts Talent: Strong brands often attract top talent. Potential employees are more
inclined to work for a brand that is well-known, respected, and seen as a leader in its
industry.

9. Brand as a Promise
 Consistency in Experience: A brand represents a promise to customers. It signifies what
they can expect in terms of quality, service, and experience. Strong brands consistently
deliver on that promise, which helps build reliability and trust.
 Sets Expectations: Customers develop certain expectations based on a brand's
reputation. Meeting or exceeding these expectations ensures long-term customer
satisfaction and loyalty.

10. Influence on Purchase Behavior

 Shortens the Sales Cycle: A trusted brand reduces the time and effort required to
convince customers to buy. When customers are familiar with and trust a brand, they are
more likely to make quick purchase decisions.
 Perceived Quality: Strong brands are often associated with higher quality, which
influences customers’ perceptions and purchasing decisions. This association leads
consumers to choose a brand even if it is more expensive than alternatives.

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2.6 Branding challenges and opportunities

 “Although brand may be as important as ever to consumers, brand management may be

more difficult than ever.” (Keller 1998, p.30) If brands are strong, they also face
challenges regarding sustenance and growth.These challenges vary in degree and
intensity for various markets. Competitive pressures and wars have led to a few difficult
situations that companies have to face as challenges.
 The following are the typical ones:
1. Savvy Consumers
 Increasingly, consumers and businesses have become experienced with marketing and
more knowledgeable about how it works. Well-developed media market has resulted in
increased attention paid to the marketing actions and motivation of companies.
 Consumer information and support exist in the form of consumer guides. Many believe
that it is more difficult to persuade consumers with traditional communications than it
is within years gone by marketers.
 Other marketers believe that what consumers want from products and services and brands
has changed. Now there is more world-weary, that people are more likely not to believe
what they see on TV, to tune things out.
 Pretty much everything today can be seen in relation to love-respect axis. You can plot
any relationship with a person by whether it is based on love or respect.
 It used to be a high respect rating would win. But these days, a high love rating wins. If I
don’t love what you’re offering me, I’m not even interested.
 A passionate believer in the concept point that, Trustmark belongs to people and that an
emotional connection are critical.
2. Brand Proliferation
 Owing to the reason of low growth, the classic response of marketing people has been
develop new brands or extending/stretching existing brands into different varieties.
 Brand extension and stretching essentially is an exercise meant for having different
varieties of products under the same brand name.
 In trying to do so, marketing people may not create products that really are new. That
is, an inevitable response to the dynamics of markets may not generate a real new product
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for the simple reason that innovations do not come by so very easily and frequently.
 The result has been a variety of products that are very similar not having differentiated
features that can attract consumers. Creating distinctions without differentiation does not
make a product stand out and convince consumers to go for it.
 In many instances, products carry the label of “new” indicating new features. But those
are not recognized by consumers as really new. The result is “irritated consumers” who
think their buying decision has been made complicated into an unnecessary effort. The
net result is no increase in sales.
 To meet this challenge, manufacturers have to introduce products with real meaningful
added features that can be perceived as “performance benefits” and not just cosmetic
changes.
3. Media Fragmentation
 An important change in the marketing environment is the erosion or fragmentation of
traditional media and the emergence of interactive media promotion and other
alternatives. It has become too expensive to go national on the TV network with no
specific plans for points of attack and reinforcement in relation to brand’s potential in
different areas. In other words, marketing people should concentrate on those areas,
which offer better prospects of brand’s growth.
 With technical advancements, number of channels has increased manifolds.
Developments of cable and satellite systems offer enormous choices, with the help of
which you can reach fragmented audiences.
 Under such circumstances, it has become challenging for brand managers to be
practically aware of the media costs and the effects of fragmenting a TV campaign. Not
only that, they also have to be able to plan an integrated communication campaign
with various tools of communication at their hands.
 The managers have to capitalize on the factor of fragmentation and align their campaigns
accordingly. In its place, marketers are spending more on non-traditional forms of
communication and new emerging forms of communication such as interactive,
electronic media; sport and event sponsorship; in-store advertising; mini-billboards
in transit vehicles on parking and product placement in moves.
4. Increased Competition
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 One reason marketers have been forced to use some money financial incentives or
discounts are that the market place has become more competitive. Both demand and
supply side factors have contributed to increase in competitive industry. On the demand
side consumption for many products and services has flattened and hit the maturity or
even declaim stage of the product life cycle.
 As a result, sales growth for brands can only be achieved at the expense of competing
brands by taking away some of their market share. On the supply side, new competitors
have merged due to a number of factors:
 Brand extensions: as noted earlier, Many Company have taken their existing brands and
launched products with the same name in to new categories. Many of these brands
provide formidable opposition.
 Deregulation: certain industries (example telecommunications, fanatical services,
health care and transportation) have become deregulated leading to increased
computation from outside traditionally defined product market -boundaries.
 Globalization: although firms have embraced globalization as means to open new
markets and optional sources of revenue it has also resulted in an increase in the number
of competitors in existing market, threatening current sources of revenue.
 Low.-priced competitors: market penetration of gunneries, private levels, or low-
priced ‘clones’ imitating product leaders has increased on world-wide bases. Retailers
have gained power and often dictate what happens with in the sore. Their chief
marketing weapon is price, and they have introduced and pushed their own brands and
demanded greater compensation from trade promotions to stock and national brands.
5. Increased Costs
 At the same time that competition is increasing, the cost of introducing a new product or
supporting an existing product has increased rapidly, making it difficult to much the
investment and level of support that brands were able to receive in previous years.
6. Greater Accountability
 Finally, marketers often found themselves responsible for meeting ambitious short term
profit targets because of financial market pressures and senior management imperatives.
Stock analysis value strong and consistent earnings as an indication of the long –term
financial health of a firm.
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 As a result, marketing managers may find themselves in the dilemma of having to make
decision with a short term benefits but long-term costs (e.g., cutting advertising
expenditures), moreover, many of the same managers have experienced rapid job
turnover and promotions and may not anticipate being in their current positions for
very long.

2.6 Strategic Brand Management

 Strategic brand management involves the design and implementation of marketing programs
and activities to build, measure, and manage brand equity. The strategic brand
management process is defined as involving four main steps:

1. Identifying and establishing brand positioning and values

2. Planning and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity.

1. Identifying and Establishing Brand Positioning and Values

 The strategic brand management process starts with a clear understanding as to what the
brand is to present and how it should be positioned with respect to competitors. The key
concepts include;
 Mental mapping: Positioning the brand favorable in customers’ mind.
 Competitive frame of reference: creating brand superiority in the mind of customers.
 Points-of-parity and points-of-difference: Points-of-difference (PODs) are attributes or
benefits that consumers strongly associate with a brand, positively evaluate, and believe
that they could not find to the same extent with a competitive brand.
 Points-of-parity (POPs), on the other hand, are not necessarily unique to the brand but
may in fact be shared with other brands.
 Core Brand values: attributes and benefits linked with brand (those set of abstract
associations).

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 Brand Mantra: An articulation of the “heart and soul” of the brand. A short three- to-
five-word expression of the most important aspects of the brand.
Nike: Authentic Athletic Performance
Disney: Fun Family Entertainment.

2. Planning and Implementing Brand Marketing Programs

This knowledge- building process will depend on three factors:

 Mixing and matching brand elements: the most common brand elements are brand
name, logo, symbol, character, packaging and slogan.
 Integrating brand marketing activities: strong, favorable and unique brand
associations can be created in a variety of different ways by marketing programs, such
that product (tangible and intangible benefits), price (value perceptions), distribution and
promotions.
 Leverage of secondary association: brand associations may be linked to other entities
that have their own associations, creating secondary brand associations. In other words,
brand associations may be created by linking the brand to another node or information
in memory that conveys meaning to consumers.
 For example, the brand may be linked to certain factors such as company, country of

origin, channel of distribution, other brands, characters, endorsers and events.

 The Leveraging Secondary Brand Associations to Build Brand Equity is further divided
into three parts.
i. Co-branding: Co-branding occurs when two or more existing brands are combined into
a joint product or are marketed together in some fashion. A few examples are: Sony
Ericsson, Yoplait Trix Yogurt, Nestle’s Cheerios Cookie Bars.
ii. Licensing: Licensing involves contractual arrangements whereby firms can use the
names, logos, characters, and so forth of other brands for some fixed fee. A few
examples are: Entertainment (The Matrix, Shrek, etc.), Television and cartoon
characters (Mickey Mouse), Designer apparel and accessories (Gucci, Armani, etc.)
iii. Celebrity Endorsement: Firms can also use a celebrity to endorse their brands to help
build brand equity. Celebrity endorsement helps to draw attention to the brand and to
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shape the perceptions of the brand. A celebrity should be greatly popular and have a
high level of visibility. He or she should also have a rich set of useful associations,
judgments, and feelings associated with him/her by the general public.

3. Measuring and Interpreting Brand Performance

 To understand the effects of brand marketing programs, it is important to measure and

enterprise brand performance. A use full tools in that regards are:
Brand Value chain— is tracing value creation process to examining the financial impact of
brand marketing expenditures and investments. Brand value chain helps to direct marketing
research effects. Profitable brand management requires successfully designing and
implementing a brand equity measurement system.
A brand equity measurement system is a set of research procedures designed to provide
timely, accurate and actionable in the short run and best strategic decisions in the long run.
Brand Audits—is a comprehensive examination of a brand, involving activities to assess
the health of the brand, uncover its sources of equity, and suggest ways to improve and
leverage that equity. A brand audit requires understanding sources of brand equity from the
perspective of both the firm and customer.
Brand Tracking— studying brand awareness and usage, brand judgment and feelings,
brand performance.

4. Growing and Sustaining Brand Equity

 Through the skill full design and implementation of marketing programs that capitalize on a
well-conceived brand positioning, strong brand leadership positions can be obtained. Brand
equity management concerns those activities that take a broader and more diverse perspective
of the brand equity. The key concepts in managing brand equity are:
 Brand- product matrix— is a graphical representation of brands and products sold by

the firm.

 Brand extension- establishes new equity and enhances existing equity.

 Brand portfolio- maximizes coverage and minimizes overlap.

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 Brand hierarchy— reveals an explicit ordering of brands by displaying the number and
nature of common and distinctive brand components across the firm’s products. Brand
hierarchy is a useful means to geographically portray a firm’s brand strategy.
 Enhance brand equity overtime —Effective brand management requires taking a long-
term view of marketing decisions.
 Brand reinforcement-Maintaining brand consistency and Consistent marketing
support in amount and nature. It includes innovation in product design and
manufacturing that are relevance in user and usage imaginary.
 Brand revitalization- back to basic strategy or Returning to values of original brand.
 Establish brand equity over market segment—identify difference is consumer
behavior (How they purchase and use products and what they know and feel about
different products) and then adjust branding programs (choice of brand elements and
leverage secondary associations).

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