Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

9. Elements of Product
   Planning for Goods and
   Services

Text © The McGraw−Hill

Companies, 2002

Elements of Product Planning for Goods and Services 263

A good brand name can help build brand familiarity. It can help tell something

important about the company or its product. Exhibit 9-6 lists some characteristics

of a good brand name. Some successful brand names seem to break all these rules,

but many of them got started when there was less competition.

Companies that compete in international markets face a special problem in

selecting brand names. A name that conveys a positive image in one language may

be meaningless in another. Or, worse, it may have unintended meanings. GM’s Nova

car is a classic example. GM stuck with the Nova name when it introduced the car

in South America. It seemed like a sensible decision because novais the Spanish

word for star. However, Nova also sounds the same as the Spanish words for “no

go.” Consumers weren’t interested in a no-go car, and sales didn’t pick up until GM

changed the name.^11

Because it’s costly to build brand recognition, some firms prefer to acquire estab-

lished brands rather than try to build their own. The value of a brand to its current

owner or to a firm that wants to buy it is sometimes called brand equity—the value

of a brand’s overall strength in the market. For example, brand equity is likely to

be higher if many satisfied customers insist on buying the brand and if retailers are

eager to stock it. That almost guarantees ongoing profits.

Traditional financial statements don’t show brand equity or the future profit

potential of having close relationships with a large base of satisfied customers. Per-

haps they should. Having that information would prompt a lot of narrow-thinking

finance managers to view marketing efforts as an investment, not just as an

expense.

The financial value of the Yahoo brand name illustrates this point. In 1994,

Yahoo was just a tiny start-up trying to make it with a directory site on the Inter-

net. Most people had never heard the name, and for that matter few even knew

what the Internet was or why you’d need a directory site. As interest in the Inter-

net grew, Yahoo promoted its brand name, not just on the Internet but in

traditional media like TV and magazines. It was often the only website name that

newcomers to the web knew, so for many it was a good place from which to start

their surfing. When they found the Yahoo site useful, they’d tell their friends—

and that generated more familiarity with the name and more hits on the site.

Within a few years—even before the Internet really took off—Yahoo was attract-

ing 30 million different people a month and 95 million web page views a day.

Since Yahoo’s original marketing plan was to make money by charging fees to

advertisers eager to reach the hordes of people who visit Yahoo’s web pages, the

familiarity of its brand translated directly into ad revenues. Because it attracted

traffic and ad revenue, it could offer users more specialized content, better search

capability, free e-mail, community offerings, and e-commerce. And now, in less

than a decade, it’s become one of the best known brands not only in cyberspace

but in the world.^12

The right brand name

can help

A respected name

builds brand equity

Exhibit 9-6 Characteristics of a Good Brand Name

• Short and simple • Suggestive of product benefits


• Easy to spell and read • Adaptable to packaging / labeling needs


• Easy to recognize and remember • No undesirable imagery


• Easy to pronounce • Always timely (does not go out-of-date)


• Can be pronounced in only one way • Adaptable to any advertising medium


• Can be pronounced in all languages • Legally available for use (not in use by
  (for international markets) another firm)