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Extended Products Branding Issues

Extended Products Branding Issues

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Extended Products Branding Issues

Arash Aloosh1, Mehdi Aloosh2, Talieh Tarighati1, Hamed Shojaei Baghini1

Mazandaran University of Science and Technology, 734 Babol, Iran, arashaloosh@yahoo.com, {t_tarighati, h_shojaie}@ustmb.ac.ir

Tehran University of Medical Sciences, Tehran, Iran, md_aloosh@hotmail.com

Abstract The brands which are positioned in tangible layer of extended products must be carefully created, developed and managed. Building a successful brand, whether for an EN or an extended product, requires strategic planning and a major investment. The Business Developers in EEs and the Opportunity Brokers and Support Institution Assistance Providers in NEs should have special brand managers to make their major brand strategic decisions like Brand positioning, Brand name selection, and Brand development. Key elements of branding strategies are brand equity, building strong brands and managing brands. Enterprise networks’ sponsorship options are enterprise network’s brand, B2B brand, licensing by TEs and EEs, cobranding between ENs. They need to periodically audit their brands’ strengths and weaknesses. Keywords Extended Product (EP), Branding, Extended Enterprise (EE), Virtual Enterprise (VE), Enterprise Network (EN)

• •

Core Product: this basic layer presents the core benefit of extended products which addresses the question What is the buyer really buying? Tangible Product: at this level, the core product must be turned into tangible product which can consist of product and service features, design, a brand name, packaging, a quality level and durability. Non-tangible Product: finally, a non-tangible product must be built around the core product and tangible product by offering additional consumer services and benefits.
After Sale service

In any case, the extended product includes three layers:

Non-tangible Product Tangible Product

Packaging Delivery and credit Features

Brand name
Core benefit Design

Customer Service

Core Product

Quality and Durability Warranty Installation

Figure 1 – Brand name in Layer-Model of extended product

Extended Enterprises (EEs), the form of collaborating consortia of specialist partners who come together to provide extended products, are definitely able to develop and deliver those products faster and cheaper compared to traditional enterprises (TEs).

Virtual Enterprises and Enterprise Networks. each VEs can have his/her own brand (note that each core competencies has his/her own brands).Figure 2 – Extended Products in the Extended Enterprise [Thoben. an extended enterprise can be seen as a particular case of a virtual enterprise. In this paper we discuss branding and its strategy for extended products in the Extended Enterprises. Brand name selection. managers and coordinators of extended enterprises. 2003] Business developers. try to promote the brand of their extended products. and Brand development). However. The Business Developers in EEs and the Opportunity Brokers and Support Institution Assistance Providers in NEs should have special brand managers to make their major brand strategic decisions (e. . Also. On the other hand. Definitely the most distinctive skill of professional brand managers (of both EEs and VEs/ENs) should be their ability to build and manage successful brands. So. Enterprise Network or Collaborative Network Virtual Enterprise After Sale service Packaging Delivery and credit Features Core benefit Brand name Design Customer Service Quality and Durability After Sale service Warranty Installation Packaging Delivery and credit Features Core benefit Brand name Design Customer Service Extended Enterprise After Sale service After Sale service Packaging Delivery and credit Features Customer Service Packaging Delivery and credit Features Core benefit Quality and Durability Warranty Installation After Sale service Brand name Design Core benefit Brand name Design Customer Service Quality and Durability Warranty Installation Packaging Delivery and credit Features Brand name Core benefit Design Customer Service Quality and Durability Warranty Installation Quality and Durability Warranty Installation After Sale service Packaging Delivery and credit Features Business Developers Customer Service Core benefit Brand name Design Quality and Durability Warranty After Sale service Installation Packaging Delivery and credit Features Core benefit Brand name Design Customer Service Quality and Durability Warranty Installation Opportunity Brokers Support Institution Assistance Providers Figure 4 – Brand Managers for Extended Products in the Enterprise Network Building and managing brands are the most important brand managers’ tasks in the dynamic environment. Brand positioning. each partner in EEs has his/her own brands. Competencies After Sale service Packaging Delivery and credit Features Core benefit Brand name Design Customer Service Virtual Enterprise Quality and Durability Warranty Installation After Sale service Virtual Enterprise Packaging Delivery and credit Features Brand name Core benefit Design Customer Service Quality and Durability Warranty Installation Enterprise Network (Collaborative Network) Supplier Suppliers Figure 3 – Extended Products in Virtual Organization Breeding Environment of the Enterprise Network The opportunity brokers and support institution assistance providers in VEs and ENs (or CNOs) must try to promote the brand or brands of their network’s (or enterprise’s) products. So. a Virtual Enterprise (VE) is a temporary alliance of enterprises that come together to share skills or core competencies and resources in order to better respond to business.g. the brand of EPs belongs to them.

the process of creating a brand image that engages the hearts and minds of customers. Consumers view a brand as an important part of a product. 2005] Branding. complementary core competencies. Therefore. As we will discuss. sign. term. warranty and after sales services) to different consumers instead of a general product for all consumers. [Kotler and Armestrong. In the marketplace. 3 Branding Strategy In the competitive environment. a clear understanding of branding strategy is essential in order to build preferable extended products. Brand names ensure consumers about extended products quality and benefits. For this purpose. quality. perceptions are the collective results of everything . Branding helps EEs/ENs to segment markets. the EE’s/EN’s brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors or other enterprises. or a combination of these that identifies the maker or seller of a product or service. building a successful brand. In this case. brand managers should be aware of various branding approaches that can be pursued. and etc).” A brand is basically a perception. Branding helps both dimensions of transactions (extended/virtual enterprises and consumers) in many ways. most of enterprises are interested in participating in such virtual enterprises to produce these extended products faster and cheaper. In that conditions. design. Building Strong Brands 3. Key elements of branding strategies are: 1. feature. not a logo on the side of a package. symbol. packaging. and quality each time they buy. “A successful Brand is nothing more than a special relationship. Also. Branding has several advantages for EEs/VEs. benefits. By branding approach. Brand Equity 2. whether for a (an) VE/EN or an extended product. Making smart decisions up front is crucial since an enterprise network may have to live with the decision for a long time.2 Branding A brand is a name. requires strategic planning and a major investment. brand managers of virtual enterprises (opportunity brokers) or enterprise networks (support institution assistance providers) can use different product identification strategies for developing of their extended products within their market. A brand exists only in people’s heads and hearts. They can offer different kinds of a product (in terms of shape. Moreover. and branding can add value to a product. Consumers who always order to specific EEs/ENs or buy the same brand know that they will get the same features. they can access to new markets by offering high quality extended products and services. Managing Brands 4 Brand Equity According to Rings McKenna. they will try to promote their core competencies and join to related enterprise networks. the purpose of these approaches is to build a brand that will exist in the long term. is what separates similar extended products from each other. This makes competitions very complex. Because of the special characteristics of virtual enterprises (boundary crossing. So. on one hand virtual enterprises and enterprise networks and on the other hand large extended enterprises and huge traditional enterprises try to build their brands stronger than the others.

[Duncan. 2003] Enterprises can track trust and satisfaction (or other elements like levels of brand awareness and perceived brand quality) of their extended products to determine levels of brand equity. brand name selection. A measure of a brand’s equity is the extent to which customers are willing to pay more for the brand. Brand equity is the positive differential effect that knowing the brand name has on consumer response to the product or service. brand sponsorship. Therefore. the real value of brand equity. A powerful brand has high brand equity. So. the consumer preference and loyalty are very important for VEs because a powerful brand forms the basis for building strong and profitable consumer relationship. For example they can ask their customers How many times do they buy their extended products when they buy a same extended product? For better understanding of the meaning of extended products’ brand equity. One study found that 72 percent of customers would pay a 20 percent premium for their brand of choice relative to the closest competing brand. the amount of consumer preferences for paying more for the VE’s brand. Also. hears or experiences about an enterprise and its brands. Brand positioning Attributes Benefits Beliefs and Values Brand name selection Selection Protection Brand sponsorship Manufacturer's brand Private brand Licensing Co-branding Brand development Line extensions Brand extensions Multi-brands New brands Table 1 – Major brand strategies decisions [Kotler and Armestrong. en G Pa rt ic Pa rt ic s ew ic Vi ner G e ar ia rt Pa ul r Pa ul l ic er tia l ar Particular Enterprise Network Generosity Operation phase Life-cycle phases Enterprise Network Virtual Enterprise Figure 5 – Virtual Enterprise Reference Architecture [Bernus. 2005] Brands vary in the amount of power and value they have in the marketplace. is important for ENs. 2000] Customers order their needs to enterprise networks that consist of high performance core competencies.that a customer or other stakeholder sees. they have a feeling about the entire enterprise networks’ environment that provides high quality extended products faster and cheaper. 40 percent said they would pay a percent premium. 2005] . [Holt. and brand development. a profitable set of loyal customers for extended products is important for ENs (or CNs). Also. 5 Building Strong Brands The major brand strategic decisions involve brand positioning. we should consider where the transactions are conducted. but virtual enterprises have a temporary nature.

More important.1 Brand Positioning Brand position is the standing of a brand in comparison with its competitors in the minds of customers [Duncan. 5. They go beyond attribute or benefit positioning. a visualization technique that indicates how customers perceive competing brands in terms of various criteria. Also. Brand managers need to position their brands clearly in target customers’ mind at any of three levels [Davis. Hallmark (caring). Nike (performance. ALIVE (Advanced Legal Issues in Virtual Enterprise). and Lexus (quality). they position the brand on extended product attributes.2 Brand Name Selection The brand name and symbol are chosen to represent a brand’s need to reflect the position of the brand. In new markets and collaboration environments. For example. KUBA (KU Band Antenna). However. Some successful brands positioned on benefits are Volvo (safety). The more memorable and relevant the brand name and symbol are the faster and less costly it will be to create awareness of a brand. they must be the leader of their segments and they need to be simple and distinctive. Yahoo. A brand can be better positioned by associating its name with a desirable benefit. attributes are the least desirable level for brand positioning. they are not interested in attributes as such. In this case. position it in customers’ minds. and develop an image for it [Duncan. the internet branding experiences and ecommerce brand name selections can be valuable (e. They are good but they are not attractive and popular.5. customers are interested in what the attributes will do for them. and eBay and so on). 2005]. services. 2002]. to determine how customers perceive an extended product’s brand and its competitors. 2005]. . These names are not general for all people. the abbreviated forms of names are very useful for example. and they must work as identification cues. and SCOP (Small Co-generation Plant). Harley-Davidson (adventure). FedEx (on-time delivery). [Kotler and Armestrong. Customers have specific expectation from brand regarding how the extended product or service will deliver value and satisfaction. benefits. High Style Low Performance Ex ten ENs de dP Tr ro ad du itio cts na lP ro du TEs VEs cts EEs High Performance Low Style Figure 6 – Perceptual Map of Extended Products Brand managers can use perceptual map. 2005] The strong brands are positioned on strong beliefs and values of customers and their society. Google. so their sponsors have to search for peculiar names for future. CTS (Commercial off-The-Shelf components).g. The expectations of brand (or the messages of brand) must be simple and honest. These brands pack on emotional wallop in their market. the EN’s brand presents a promise to deliver high style (long term) features. At the lowest level. Competitor EEs and other ENs can easily copy attributes. and experiences consistently to the buyer of extended products and etc.

These relationships usually involve complex legal contracts and licenses so these partners must carefully coordinate their advertising. or characters from popular movies and books for their extended products. They can license names or symbols previously created by other manufacturers. because licensing brand names generate additional revenues and brand recognition for them. Store brand (or B2B/B2C brand): is created and owned by a reseller (retailers and wholesalers) or B2B/B2C marketers of an extended product or service. Co-branding also allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone. names of well-known celebrities. such as Apple (computers). each partners must trust the other will take good care of its brand. yoyo. Finally. Simplicity: It should be easy to pronounce. For a fee. . 5. and translate easily into foreign languages. it must be protected. Co-branding can also utilize between business developers in extended enterprises and between support institution assistance providers or opportunity brokers in enterprise networks.Although choosing a memorable name is more an art than a science. and other marketing efforts. any of these can provide an instant and proven brand name.3 Brand Sponsorship Traditional Enterprise Manufacturer's brand Store brand Licensing By other TEs Co-branding Between TEs Extended Enterprise Business developer's Brand Store & B2B brand Licensing By TEs Co-branding Between EEs Table 2 – Brand Sponsorships Enterprise Network Enterprise Network's brand B2B/B2C brand Licensing By TEs and EEs Co-branding Between ENs A brand manager has four sponsorship options: Enterprise Network’s brand (or Business developer's brand and Manufacturer's brand): is created by Enterprise Networks (Business developers and Manufacturers). Many originally protected brand names-such as cellophane. Business developers can license successful manufacturers’ names and symbols and enterprise networks can license both manufacturers’ and business developers’ strong brands. After choosing a brand name. Association: if the brand name of the extended product or enterprise associates with their environment or characteristics then it will be extendable. Distinctiveness: One way to communicate distinctiveness is to use a simple word that is completely unrelated to the product. nylon. The fastest-growing licensing category is corporate brand licensing. aspirin. A good brand name usually communicates one or more of the following characteristics: • • • • • Benefit: It should suggest something about the product’s benefits and qualities. Co-branding: it involves a contractual relationship between two partners and it offers many advantages. and etc-are now generic names that any seller can use. sales promotion. successful brand names generally are the result of extensive research. The combined brands create broader consumer appeal and greater brand equity because each brand dominates in a different category. when co-branding. remember. Peculiarity: It should be capable of registration and legal protection. recognize. Licensing: Business developers and enterprise networks don’t need to take years and spend millions to create their own brand.

4 Brand Development As Enterprise Networks grow and expand the number of extended products they produce. in response to new markets. the use of two or more brands (all owned by the same enterprise) in the identification of the same product category. word of mouth. However. the brand’s positioning will not take hold fully unless every one in the enterprise network lives the brand. Such advertising can create brand awareness and customer’s preference and loyalty. new brand names in new product categories. size.5. Today. can introduced by ENs when they use their previous successful brand for their new extended product of their new VEs.Is the brand properly positioned? . Brand managers do not have enough power or scope to do all the necessary things to build and enhance their brands. Brand extensions. and some brand preference. Enterprises must manage their brands carefully all the time. Even better. and flavours of existing product category. customers come to know a brand through a wide range of contacts and touch points.Does our brand excel at delivering benefits that consumers truly value? . personal interactions with company people. Product Category Existing Existing New Brand Name New Line extension Multi-brands Brand extension New brands Figure 7 – Brand development strategies [Kotler and Armestrong. can be introduced by ENs when they provide their extended products to different customers or B2B markets. the EN should carry on internal brand building to help core competencies to understand and be enthusiastic about the brand promise. the internet and related Medias have the most contacts with customers. Moreover. brands are maintained by brand experience not by advertising. 2005] . The brand valuation is the process of estimating the total financial value of a brand and enterprise networks need to periodically audit their brands’ strengths and weaknesses. Second. and also personal experience with the brand. In virtual environment. 6 Managing Brands As mentioned before. In multi-brands. they not only extend their brands to these products but also they often have four different choices for developing their brands. They should ask: [Kotler and Armestrong. existing brand names extended to new forms. telephone interactions. brand managers often pursue short-term results. All of these suggest that managing an EN’s brand assets can be no longer left only to brand managers. whereas managing brands as assets calls for longer-term strategy. brand knowledge. the brand’s positioning must be continuously communicated to consumers.Do all of our consumer touch points support the brand’s positioning? . Thus. existing brand names extended to new product categories. company Web pages and many others. These include advertising. Brand managers should benefit from advertising campaigns to cerate name recognition. First. ENs produce their extended products for a long period. Many ENs will go even further by training and encouraging their B2B/B2C market places to serve their customers well. ENs must put much care into managing these touch points as it does into producing its ads. some ENs will set up brand asset management teams to manage their major brands. 2005] Line extensions. ENs introduce new brands. Therefore the EN needs to train its participants to be customer-centred (as they are).

Therefore. we should consider the Enterprise Networks or collaborative networks (EEs. 1999. 419-420. M. or enterprise. Eschenbächer. service. D. K. Prentice-Hall. H. In this regard. 2005. sustained support? Finally. GERAM: Generalised Enterprise Reference Architecture and Methodology. must be simple and honest.Do the brand’s managers understand what the brand means to consumers? . P. Sanaz Hosseini for her valuable supports. Kotler. the names which are selected for an EP or an EN must be simple and distinctive.6. the business developers (in EEs). opportunity brokers (in VEs) and support institution assistance providers (in ENs) should establish missions for the brand and visions of what the brand must be and do. the real value of extended products’ brands refers to the value of EN’s brand because the ENs have a long-term nature.S. customer preferences or new competitors. & Armestrong. Marketing Management. P. Kotler. . Prentice-Hall of India. J. Version 1. & Wagenhaus. References Aloosh. pp. Jossey-Bass. proceedings of the 7th International Conference on Concurrent Enterprising: Engineering the Knowledge Economy through Co-operation. Jagdev. Davis. 429-439. the messages of the brand..Does the Brand receive proper. Weber. 11th Edition. Tehran. McGraw-Hill. 2002. Holt. Extended enterprise architectures (E2A): towards a powerful mode of production. G. Pawar (eds. P. repositioned and supported in all the times. 2001. the brands need to be repositioned because of changing market’s environment. CNOs and VCs …) where the transactions are conducted in. 2005.3. 11th Edition. A Methodology for Virtual Enterprise Management. March 2003. F. Vesterager & J. Virtual Enterprises. Tølle. Extended products: evolving traditional product concepts. 2002. T. VTT Technical Research Centre of Finland. Kühnle. Global Engineering and Manufacturing in Enterprise Networks. Thoben.-D.). in: K. 2nd edition. 2004. Proceedings of the ICTM2006 conference of Iran. 43-49. Bremen. pp. Proceedings of The 9th annual Cambridge international manufacturing symposium Cambridge. Scott M. GLOBEMEN final report. For better understanding of the meaning of extended products’ branding. Proceeding of The ICE2000 conference in France. When positioning a brand. G. Toulouse. 2000. 2006. “What Becomes an Icon Most?” Harvard Business Review. Helsinki. VEs. Brand Asset Management. Principles of Advertising and IMC.-D. 2002. H. Also. Duncan. The brand audit will turn up some cases that call for completely re-branding a product. A. Acknowledgement The authors wish to acknowledge Ms. 7 Conclusions The Brands of extended products are powerful assets that must be carefully developed and managed. the promises that customers expect from the brand. Principles of Marketing. IFIP–IFAC Task Force on Architectures for Enterprise Integration. Thoben K. 2nd edition. Finally the brands of EPs or ENs need to be periodically audited. Bernus.

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