Product Differentiationand Branding

Toby BossESU 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• 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”?

Branding

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?– Source: Click Z Marketing News

• http://goo.gl/Bx8RIU

Super Bowl Stats

• 82,586 football fans watched Super Bowl XLVIII at 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-bra

nding/

Daily Infographic

• How to Brand Yourself

Reflection

• What do you want your personal brand to say?