Product Differentiation and Branding. Toby Boss ESU 6. Essential Questions. Why do firms seek to differentiate their products? How does advertising and branding apply to differentiation? What are some examples of personal branding?. Objectives. Discuss Differentiation
Essential Questions Why do firms seek to differentiate their products? How does advertising and branding apply to differentiation? What are some examples of personal branding?
Objectives Discuss Differentiation Discuss social media as a branding tool
Products Goods and Services Some products are identical Examples Produce Electricity Propane Air Travel?
Prices If goods are truly identical (electricity, propane) the only difference between goods would be the price. The sellers are price takers – if they raise the price; they will sell 0 If they lower the price they will not sell any more units. Take the price set by the market
Perfectly Competitive Markets Many small firms Identical products Price takers Easy entry and exit Most firms break even
Product Differentiation Firms seek to set their products apart from the rest so as to charge a different price. Typically they use the following: Packaging Quality or functions Service Advertising Branding sends a consistent message that is identifiable.
Advertising Sunk fixed cost Sunk: Once you invest there is no asset to sell later Compare to equipment – if a firm invests in a building; they could potentially sell it later Fixed Cost: Doesn’t change with the level of output. A commercial doesn’t cost more or less depending on how many units a firm produces
Advantages Big firms had an advantage in advertising They can spread the fixed costs over many units There is always a risk – remember “New Coke”?
Logos What comes to mind when you see each of these brands?
Super Bowl $4 million for 30 second spot What do the stats say?
Super Bowl Stats 82,586 football fans watched Super Bowl XLVIIIat MetLife Stadium in East Rutherford, New Jersey 100 million football fans watched Super Bowl 2014 for almost 3.5 hours in four quarters plus a half time on the Fox broadcast television network.
Super Bowl Stats based on YouTube's data, football fans watched Super Bowl ads more than 265 million times for over 3.2 million hours – which is the equivalent of watching 914,285 Big Game broadcasts. Based on YouTube's pre-game data for 2014, it looks like the online views of this year's Super Bowl commercials are running about 2.2 times above last year.
Super Bowl Stats And the top five in views are: Budweiser Super Bowl XLVIII Commercial -- "Puppy Love" with 37 million views. Duracell: Trust Your Power - NFL's Derrick Coleman, Seattle Seahawks with 16 million views. Hyundai Elantra | Big Game Ad | "Nice" with 12 million views. 2014 Volkswagen Game Day Commercial: Wings with 11 million views. Sorry, Coke and Pepsi. (Uncensored) with 10 million views.
Personal Branding Some examples
Wikipedia Personal branding is, for some people, a description of the process whereby people and their careers are marked as brands. the creation of an asset that pertains to a particular person or individual… leading to an indelible impression that is uniquely distinguishable.
Example Celebrity real-estate mogul Donald Trump uses his last name extensively on his buildings and on the products he endorses (e.g., Trump Steaks). What are some other celebrity brands?
Differentiation So what sets you apart? Skills Education Experience Vision
Social Media What do you want your message to include? Your digital tattoo – make sure your image is what you want to convey. “Times Square” Analogy
Social Media How can you use these to convey your brand? Twitter Tweet retweeted 3 times will reach 100,000 people Hashtags Web 2.0 tools – blogs, Google Everyone can publish What will you say?
Pinterest Board Ideas on personal branding http://pinterest.com/lynneherr1/personal-branding/
Daily Infographic How to Brand Yourself
Reflection What do you want your personal brand to say?