Extended Products Branding Issues

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

1

Mazandaran University of Science and Technology, 734 Babol, Iran, arashaloosh@yahoo.com, {t_tarighati, h_shojaie}@ustmb.ac.ir
2

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 networks 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)

Introduction
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).

Figure 2 Extended Products in the Extended Enterprise [Thoben, 2003]

Business developers, managers and coordinators of extended enterprises, try to promote the brand of their extended products. So, the brand of EPs belongs to them. However, each partner in EEs has his/her own brands. On the other hand, 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. So, an extended enterprise can be seen as a particular case of a virtual enterprise.
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 networks (or enterprises) products. Also, each VEs can have his/her own brand (note that each core competencies has his/her own brands).
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. 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.g. Brand positioning, Brand name selection, and Brand development). 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. In this paper we discuss branding and its strategy for extended products in the Extended Enterprises, Virtual Enterprises and Enterprise Networks.

Branding

A brand is a name, term, sign, symbol, or a combination of these that identifies the maker or seller of a product or service. Consumers view a brand as an important part of a product, and branding can add value to a product. [Kotler and Armestrong, 2005] Branding, the process of creating a brand image that engages the hearts and minds of customers, is what separates similar extended products from each other. Branding helps both dimensions of transactions (extended/virtual enterprises and consumers) in many ways. Brand names ensure consumers about extended products quality and benefits. Consumers who always order to specific EEs/ENs or buy the same brand know that they will get the same features, benefits, and quality each time they buy. Also, Branding has several advantages for EEs/VEs. Branding helps EEs/ENs to segment markets. They can offer different kinds of a product (in terms of shape, feature, design, quality, packaging, warranty and after sales services) to different consumers instead of a general product for all consumers. Moreover, the EEs/ENs brand name and trademark provide legal protection for unique product features that otherwise might be copied by competitors or other enterprises.

Branding Strategy

In the competitive environment, 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. Because of the special characteristics of virtual enterprises (boundary crossing, complementary core competencies, and etc), they can access to new markets by offering high quality extended products and services. Therefore, most of enterprises are interested in participating in such virtual enterprises to produce these extended products faster and cheaper. For this purpose, they will try to promote their core competencies and join to related enterprise networks. This makes competitions very complex. In that conditions, building a successful brand, whether for a (an) VE/EN or an extended product, requires strategic planning and a major investment. So, a clear understanding of branding strategy is essential in order to build preferable extended products. In this case, brand managers should be aware of various branding approaches that can be pursued. By branding approach, 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. As we will discuss, the purpose of these approaches is to build a brand that will exist in the long term. Making smart decisions up front is crucial since an enterprise network may have to live with the decision for a long time. Key elements of branding strategies are: 1. Brand Equity 2. Building Strong Brands 3. Managing Brands

Brand Equity

According to Rings McKenna, A successful Brand is nothing more than a special relationship. A brand is basically a perception, not a logo on the side of a package. A brand exists only in peoples heads and hearts. In the marketplace, perceptions are the collective results of everything

that a customer or other stakeholder sees, hears or experiences about an enterprise and its brands. [Duncan, 2005] Brands vary in the amount of power and value they have in the marketplace. A powerful brand has high brand equity. Brand equity is the positive differential effect that knowing the brand name has on consumer response to the product or service. A measure of a brands equity is the extent to which customers are willing to pay more for the brand. 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; 40 percent said they would pay a percent premium. [Holt, 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. 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, we should consider where the transactions are conducted.
en G
Pa rt ic Pa rt ic

s ew ic Vi ner
G e

ar

ia rt Pa

ul

r Pa

ul

ic er

tia

ar

Particular Enterprise Network

Generosity

Operation phase

Life-cycle phases
Enterprise Network

Virtual Enterprise

Figure 5 Virtual Enterprise Reference Architecture [Bernus, 2000]

Customers order their needs to enterprise networks that consist of high performance core competencies. Also, they have a feeling about the entire enterprise networks environment that provides high quality extended products faster and cheaper. Also, the consumer preference and loyalty are very important for VEs because a powerful brand forms the basis for building strong and profitable consumer relationship, but virtual enterprises have a temporary nature. So, the real value of brand equity, the amount of consumer preferences for paying more for the VEs brand, is important for ENs. Therefore, a profitable set of loyal customers for extended products is important for ENs (or CNs).

Building Strong Brands

The major brand strategic decisions involve brand positioning, brand name selection, brand sponsorship, and brand development.
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, 2005]

5.1

Brand Positioning

Brand position is the standing of a brand in comparison with its competitors in the minds of customers [Duncan, 2005]. Brand managers need to position their brands clearly in target customers mind at any of three levels [Davis, 2002]. At the lowest level, they position the brand on extended product attributes. However, attributes are the least desirable level for brand positioning. Competitor EEs and other ENs can easily copy attributes. More important, customers are interested in what the attributes will do for them; they are not interested in attributes as such. A brand can be better positioned by associating its name with a desirable benefit. Some successful brands positioned on benefits are Volvo (safety), Hallmark (caring), Harley-Davidson (adventure), FedEx (on-time delivery), Nike (performance, and Lexus (quality). [Kotler and Armestrong, 2005] The strong brands are positioned on strong beliefs and values of customers and their society. They go beyond attribute or benefit positioning. These brands pack on emotional wallop in their market. Customers have specific expectation from brand regarding how the extended product or service will deliver value and satisfaction. The expectations of brand (or the messages of brand) must be simple and honest.
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, a visualization technique that indicates how customers perceive competing brands in terms of various criteria, to determine how customers perceive an extended products brand and its competitors. For example, the ENs brand presents a promise to deliver high style (long term) features, benefits, services, and experiences consistently to the buyer of extended products and etc.

5.2

Brand Name Selection

The brand name and symbol are chosen to represent a brands need to reflect the position of the brand, and they must work as identification cues. 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, position it in customers minds, and develop an image for it [Duncan, 2005]. In new markets and collaboration environments, the abbreviated forms of names are very useful for example, KUBA (KU Band Antenna), CTS (Commercial off-The-Shelf components), ALIVE (Advanced Legal Issues in Virtual Enterprise), and SCOP (Small Co-generation Plant). They are good but they are not attractive and popular. Also, they must be the leader of their segments and they need to be simple and distinctive. These names are not general for all people, so their sponsors have to search for peculiar names for future. In this case, the internet branding experiences and ecommerce brand name selections can be valuable (e.g. Yahoo, Google, and eBay and so on).

Although choosing a memorable name is more an art than a science, successful brand names generally are the result of extensive research. A good brand name usually communicates one or more of the following characteristics: Benefit: It should suggest something about the products benefits and qualities. Simplicity: It should be easy to pronounce, recognize, remember, and translate easily into foreign languages. Distinctiveness: One way to communicate distinctiveness is to use a simple word that is completely unrelated to the product, such as Apple (computers). Peculiarity: It should be capable of registration and legal protection.

Association: if the brand name of the extended product or enterprise associates with their environment or characteristics then it will be extendable. After choosing a brand name, it must be protected. Many originally protected brand names-such as cellophane, aspirin, nylon, yoyo, and etc-are now generic names that any seller can use.

5.3

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 Networks brand (or Business developer's brand and Manufacturer's brand): is created by Enterprise Networks (Business developers and Manufacturers). 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. Licensing: Business developers and enterprise networks dont need to take years and spend millions to create their own brand. They can license names or symbols previously created by other manufacturers, names of well-known celebrities, or characters from popular movies and books for their extended products. For a fee, any of these can provide an instant and proven brand name. The fastest-growing licensing category is corporate brand licensing, Business developers can license successful manufacturers names and symbols and enterprise networks can license both manufacturers and business developers strong brands, because licensing brand names generate additional revenues and brand recognition for them. Co-branding: it involves a contractual relationship between two partners and it offers many advantages. The combined brands create broader consumer appeal and greater brand equity because each brand dominates in a different category. Co-branding also allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone. Co-branding can also utilize between business developers in extended enterprises and between support institution assistance providers or opportunity brokers in enterprise networks. These relationships usually involve complex legal contracts and licenses so these partners must carefully coordinate their advertising, sales promotion, and other marketing efforts. Finally, when co-branding, each partners must trust the other will take good care of its brand.

5.4

Brand Development

As Enterprise Networks grow and expand the number of extended products they produce, they not only extend their brands to these products but also they often have four different choices for developing their brands.
Product Category
Existing Existing New

Brand Name
New

Line extension Multi-brands

Brand extension New brands

Figure 7 Brand development strategies [Kotler and Armestrong, 2005]

Line extensions, existing brand names extended to new forms, size, and flavours of existing product category, can be introduced by ENs when they provide their extended products to different customers or B2B markets. In multi-brands, the use of two or more brands (all owned by the same enterprise) in the identification of the same product category, ENs produce their extended products for a long period. Brand extensions, existing brand names extended to new product categories, can introduced by ENs when they use their previous successful brand for their new extended product of their new VEs. ENs introduce new brands, new brand names in new product categories, in response to new markets.

Managing Brands

As mentioned before, Enterprises must manage their brands carefully all the time. First, the brands positioning must be continuously communicated to consumers. Brand managers should benefit from advertising campaigns to cerate name recognition, brand knowledge, and some brand preference. Such advertising can create brand awareness and customers preference and loyalty. However, brands are maintained by brand experience not by advertising. Today, customers come to know a brand through a wide range of contacts and touch points. These include advertising, and also personal experience with the brand, word of mouth, personal interactions with company people, telephone interactions, company Web pages and many others. In virtual environment, the internet and related Medias have the most contacts with customers. ENs must put much care into managing these touch points as it does into producing its ads. Second, the brands positioning will not take hold fully unless every one in the enterprise network lives the brand. Therefore the EN needs to train its participants to be customer-centred (as they are). Even better, the EN should carry on internal brand building to help core competencies to understand and be enthusiastic about the brand promise. Many ENs will go even further by training and encouraging their B2B/B2C market places to serve their customers well. All of these suggest that managing an ENs brand assets can be no longer left only to brand managers. Brand managers do not have enough power or scope to do all the necessary things to build and enhance their brands. Moreover, brand managers often pursue short-term results, whereas managing brands as assets calls for longer-term strategy. Thus, some ENs will set up brand asset management teams to manage their major brands. 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. They should ask: [Kotler and Armestrong, 2005] - Does our brand excel at delivering benefits that consumers truly value? - Is the brand properly positioned? - Do all of our consumer touch points support the brands positioning?

- Do the brands managers understand what the brand means to consumers? - Does the Brand receive proper, sustained support? Finally, the brands need to be repositioned because of changing markets environment, customer preferences or new competitors. The brand audit will turn up some cases that call for completely re-branding a product, service, or enterprise.

Conclusions

The Brands of extended products are powerful assets that must be carefully developed and managed. For better understanding of the meaning of extended products branding, we should consider the Enterprise Networks or collaborative networks (EEs, VEs, CNOs and VCs ) where the transactions are conducted in. Therefore, the real value of extended products brands refers to the value of ENs brand because the ENs have a long-term nature. When positioning a brand, 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. In this regard, the messages of the brand, the promises that customers expect from the brand, must be simple and honest. Also, the names which are selected for an EP or an EN must be simple and distinctive. Finally the brands of EPs or ENs need to be periodically audited, repositioned and supported in all the times.
Acknowledgement The authors wish to acknowledge Ms. Sanaz Hosseini for her valuable supports. References Aloosh, A. Virtual Enterprises, Proceedings of the ICTM2006 conference of Iran, Tehran, 2006. Davis, Scott M. Brand Asset Management, 2nd edition, Jossey-Bass, 2002. Duncan, T. Principles of Advertising and IMC, 2nd edition, McGraw-Hill, 2005. GERAM: Generalised Enterprise Reference Architecture and Methodology, Version 1.6.3. IFIPIFAC Task Force on Architectures for Enterprise Integration, 1999. GLOBEMEN final report, Global Engineering and Manufacturing in Enterprise Networks, VTT Technical Research Centre of Finland, Helsinki, 2002. Holt, D. What Becomes an Icon Most? Harvard Business Review, pp. 43-49, March 2003. Kotler, P. & Armestrong, G. Principles of Marketing, 11th Edition, Prentice-Hall of India, 2005. Kotler, P. Marketing Management, 11th Edition, Prentice-Hall, pp. 419-420. 2002. Khnle, H. & Wagenhaus, G. Extended enterprise architectures (E2A): towards a powerful mode of production, Proceedings of The 9th annual Cambridge international manufacturing symposium Cambridge, 2004. Thoben K.-D. Eschenbcher, J, Jagdev, H. Extended products: evolving traditional product concepts, in: K.-D. Thoben, F. Weber, K.S. Pawar (eds.), proceedings of the 7th International Conference on Concurrent Enterprising: Engineering the Knowledge Economy through Co-operation, Bremen, 429-439. 2001. Tlle, M. Vesterager & J. Bernus, P. A Methodology for Virtual Enterprise Management, Proceeding of The ICE2000 conference in France, Toulouse, 2000.