Page 229 - Electronic Commerce

Chapter 4

In Chapter 9, you will learn more about software tools and other technologies that
companies are using to implement CRM.

CREATING AND M AINTAINING BRANDS
ON THE W EB
204
A known and respected brand name can present to potential customers a powerful
statement of quality, value, and other desirable characteristics in one recognizable
element. Branded products are easier to advertise and promote because each product
carries the reputation of the brand name. Companies have developed and nurtured their
branding programs in the physical marketplace for many years. Consumer brands such as
Ivory soap, Walt Disney entertainment, Maytag appliances, and Ford automobiles have
been developed over many years with the expenditure of tremendous amounts of money.
However, the value of these and other trusted major brands far exceeds the cost of
creating them.

Elements of Branding
The key elements of a brand, according to researchers at the advertising agency
Young & Rubicam, are differentiation, relevance, and perceived value. Product
differentiation is the first condition that must be met to create a product or service
brand. The company must clearly distinguish its product from all others in the market.
This makes branding difficult for commodity products such as salt, nails, or plywood—
difficult, but not impossible.
A classic example of branding a near-commodity product is Procter & Gamble’s
creation of the Ivory brand more than 100 years ago. The company was experimenting
with manufacturing processes and had accidentally created a bar soap that contained a
high percentage of air. When one of the workers noted that the soap floated in water, the
company decided to sell the soap using this differentiating characteristic in packaging and
advertising by claiming “it floats.” Thus was the Ivory soap brand born. Procter & Gamble
maintains this brand differentiation on its Web site even today by maintaining a separate
Facebook page for the brand.
The second element of branding—relevance—is the degree to which the product
offers utility to a potential customer. The brand only has meaning to customers if they
can visualize its place in their lives. Many people understand that Tiffany & Co. creates a
highly differentiated line of jewelry and gift products, but very few people can see
themselves purchasing and using such goods.
The third branding component—perceived value—is a key element in creating a
brand that has value. Even if your product is different from others on the market and
potential customers can see themselves using this product, they will not buy it unless they
perceive value. Some large fast-food outlets have well-established brands that actually
work against them. People recognize these brands and avoid eating at these restaurants
because of negative associations—such as low overall quality and high-fat-content menu
items. Figure 4-11 summarizes the elements of a brand.

Copyright 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.