Choosing a Brand Name

Choosing an effective brand name is an important decision for both manufacturer and distributor brands. The brand name communicates a great deal, which can facilitate brand awareness and brand image. In general, an effective brand name suggests something about the product’s benefits; is easy to pronounce, recognize, and remember; is distinctive in some way; and can be translated into other languages.

Ideally, a brand name should help to communicate to consumers the major benefits of the firm’s product. If it is achieved, the brand name helps to link brand awareness with brand image. As consumers become aware of the brand name, they begin to associate it with specific product benefits. Sometimes this association can make it difficult for companies to change strategies. Take the banking industry as an example. Many banks are trying to expand into different financial service areas, such as investment management and insurance. A problem is that many consumers perceive banks to be very conservative and not innovative, friendly, or aggressive. Thus, many banks either avoid using the word bank in their name or play down the bank part of their name.

A brand name that is easy to pronounce, recognize, and remember helps in establishing brand awareness. The name should also be distinctive. Brand names that meet these criteria are Mustang, Kodak, and Crest. Sometimes a brand name can be effective and not really mean anything in real words.

A brand name should be translatable into different languages for global business. For example, brands that are translated well into Russian include Sony, Adidas, and Ford etc.

An alternative to developing a brand name is licensing an existing name or logo. Licensing typically consists of the right to use a trademark in exchange for paying royalties on the sale of the licensed product.

Another approach is co-branding, where two brand names are used on a product. The objective is to capitalize on the brand equity in each brand as a way to appeal to defined target markets more effectively. Co-branding has become commonplace in the credit card industry. For example, the Visa brand name is often combined with another brand name to focus on specific markets. The other brand might be another company trying to generate sales for its products, such as Ford, Churchill Downs, or a non-profit organization trying to generate revenue, such as your university or alumni association. There are similarities in many co-branding relationships, the details of each situation are typically negotiated and formalized into a contractual agreement.

Comprehension questions:

1. Why is choosing an effective brand name an important decision?

2. What should a brand name help to?

3. Must a brand name really mean anything in real words or not?

4. What is the role of licensing in choosing brand a name?

5. What is co-branding?

Referring to Unit 11

New Product Development 1

A Idea generation

Idea generation is the systematic search for new ideas. It is the first step in the new product development (NPD) process. NPD is essential for companies to stay competitive. Ideas for product innovation can come from many sources – for example, internal brainstorming, distributors, or increasingly from customers. Many companies are adopting a customer-driven or customer-centric marketing approach, focused on identifying customer demands (what customers require to solve a particular problem).Market research techniques are used to identify gaps in the market.

Throughout the NPD process, marketers work closely with research and development (R&D) to create original products or to modify or improve existing products. New recipes (for example, Vanilla Coke) and limited or special editions (for example, Christmas tea) are examples of product improvements and product modifications. The product innovation may target a mass market or a specific niche market – product for left-handed people, for example.

B Idea screening

Launching new products is a risky business, so new product ideas are screened to select, or spot, potentially successful product ideas. A company has to assess which ideas are viable (will survive in a competitive marketplace), technically feasible (the company has the skills and resources to produce them), and profitable (will make money). The company also considers overall demand - how much they can expect to sell.

C Concept development and testing

An attractive idea is developed into several different product concepts. Concept testing measures customer response to a new product – what customers think of it – and gives an indication of the level of a customer acceptance – that is, how readily consumers will use the product. The objective is to successfully introduce the new product onto the market or penetrate the market, and to minimize the research and development costs.

D Marketing strategy and business analysis

The marketing strategy describes how to penetrate the market. You must decide which route to market is best for your product or service. You can produce it yourself, you can sell the idea, or you can license the product to another company to produce and market.

Before moving on to the product development phase, business needs to assess the financial attractiveness of the new product idea. Companies estimate the sales volume (how much they will be able to sell), the selling price (what consumers will pay for the product or service) and revenue expectations (how much income the product will generate).

Comprehension questions:

1. What is the first step in thew NPD?

2. What do marketers closely work with?

3. What does marketing strategy describe?