978-0078028861 Chapter 8 Solution Manual

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1 Chapter 08

2 Build the Brand

1.1 ETHICAL DIMENSION 8

Ethical Perspective

1. Diageo: The company faces a challenge—to find effective digital technologies that connect

with younger customers while maintaining ethical standards regarding underage drinking.

How should the company deal with this challenge? If you were CEO at Diageo would you

sponsor a virtual bar in Second Life? Why or why not?

2. Customers: Do younger customers have a responsibility to voluntarily not participate in

adult activities in virtual communities like Second Life?

3. Government: Given the growth of virtual communities, should the government create

stricter guidelines for underage access to adult content?

1.2 KEY TERMS

brand A name, term, sign, symbol, or design, or a combination of these elements, intended to

identify the goods or services of one seller or groups of sellers and to differentiate them from

those of competitors.

brand strategy The unique elements of a brand that define the products sold by a firm.

brand identity A summary of unique qualities attributed to a brand.

brand equity A set of assets and liabilities linked to a brand’s name and symbol that adds to or

subtracts from the value provided by a product or service to a firm or that firm’s customers.

brand awareness The most basic form of brand equity is simply being aware of the brand.

Awareness is the foundation of all other brand relationships.

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brand loyalty The strongest form of brand equity and reflects a commitment to repeat

purchases.

perceived quality The conveyed perception of quality of a brand that is either positive or

negative.

brand association When customers develop a number of emotional, psychological, and

performance associations with a brand. These associations become a primary purchase driver,

particularly with brand loyal users.

brand assets Other assets brands possess such as trademarks and patents that represent a

significant competitive advantage.

stand-alone brands Brands created to be separate from a company brand that can insulate the

company if there is a problem with the brand.

family branding The creation of brands that have synergy between them in terms of the overall

company brand.

category extensions When a firm uses its brand to expand into new product categories.

national brands Products created, manufactured, and marketed by a company and sold to

retailers around the country and the world.

store brands Brands created by retailers for sale only in their store locations.

licensing When a fi rm offers other manufacturers the right to use their brand in exchange for a

set fee or percentage of sales.

co-branding Joins two or more well-known brands in a common product or takes two brands

and markets them in partnership.

general warranty Broad promises about product performance and customer satisfaction.

specific warranty Explicit product performance promises related to components of the product.

1.3 APPLICATION QUESTIONS

1 You are the product manager for Ralph Lauren’s Polo shirts. What specific information are

you trying to convey in the brand’s iconic polo pony logo? For example, what does the Polo

brand say about quality, features, style relative to the Tommy Hilfiger or Lacoste brands?

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4. Johnson & Johnson have been able to establish strong brand equity for its line of baby

products. What benefits does J&J have because of its brand equity for these products?

5. You have been asked by Coke’s product manager to present the arguments for and against

extending the Coke brand to a new cola drink. What would be the arguments for and against

extending the Coke brand to a new cola drink?

6. SanDisk is introducing a new MP3 player and you are responsible for creating the package

design. What key information and other creative elements would you include on the

package?

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MANAGEMENT DECISION CASE: Developing and Growing Brand Equity in an Iconic

Brand

Questions for Consideration

1. For the past several years, in order to sustain sales and profit growth Harley has relied

heavily on baby boomers to buy a motorcycle in an effort to recapture their youth and

rebellious. However, that market segment is quickly aging out of mainstream motorcycle-

buying consumers. Identify one other market segment that you believe Harley should target

more strongly in the future. What product modifications or other changes do you recommend

to make the brand even more valuable to this new target market?

2. Licensing the brand name and symbol is an important source of revenue for Harley. What

types of products do you think do not fit with the Harley image and therefore are not good

candidates for licensing by Harley? Develop a list and discuss your selections.

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3. Warranties and service agreements play in important role in communicating a company’s

willingness to stand behind its products. Research the warranty coverage and how well the

Harley dealership network stands behind the product. How does the warranty coverage and

service provided by dealers enhance the brand value of Harley?

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