Case Study on "Demonstrate How New Product Development Created Equity for the Yahoo Brand"

Case Study 4 pages (1136 words) Sources: 2

[EXCERPT] . . . .

New Product Development created equity for the Yahoo brand

Brand equity at Yahoo!

Yahoo! is nowadays one of the leading companies in the field of online entertainment and communications. This position has not however always been the same for Yahoo!. The company was launched in the 1990s decade as a small startup agency, surrounded by the giants of the Silicone Valley. Still, Yahoo! was not intimidated and managed to gradually create a strong brand and a powerful brand equity.

The concept of brand equity is generally difficult to decide and the specialized literature has yet to reach a common terminology to describe it. In most instances however, it is understood as the benefits a product attains by having a brand attached. Specifically, brand equity represents the "additional value of the product (which derives from the brand), or an additional change (premium price) for that a consumer is willing to pay for an identical product, if this product is also provided with a brand. The more higher the loyalty results from the marketing mix methods, the higher is the value of the brand" (Tonnis, 2007).

Brand equity is the result of the interaction of numerous factors that strengthen the organizational position and enhance the brand. The diagrams below present two standpoints on the generators of brand equity, including elements such as awareness of the brand, the perceived quality of the products / services attached to the brand or the loyalty of the consumers towards the respective brand.

Sources: Nworah and Q. And A Consulting

In the case of Yahoo!, their brand equity was created through a multitude of elements, one of the more important of them having been the development of new items. The company initially launched itself as a search engine -- among the first search engines on the World Wide Web -- and it attracted hundreds of thousands of surfers within the first year of operations. As Yahoo! became the default search engine on the Netscape website, the company brand further strengthened. Brand equity was as such created through popularity and increased access to a wider market share.

As the company grew larger and larger, it also became more popular within the virtual environment and within the business community. In other words, Yahoo! came to be recognized as a portal to new business opportunities. Economic agents as such commenced to advertise their products and services on the Yahoo! platform and the "biggest dot-com advertisers [would] pay premium prices for ads on Yahoo!" (case). This situation further increased the company's brand equity.

The company however further diversified its services and launched itself within the field of electronic commerce. It introduced the Yahoo! branded visa card; created an online shopping mall and it created technological support for merchants to sell their products in the Yahoo! mall. Additional products included the "Yahoo! Clubs, and online immunity, the Yahoo! Calendar, an online calendar, and Yahoo! Small Business, with Internet and services aimed at small business proprietors" (case).

All in all, Yahoo!'s strategy of new product development has allowed them to expand their penetration of the market. The product development efforts have raised emotions in users; were developed using aesthetics principles and core technology and they had an important impact on the users and the community. This increased popularity and market presence, combined with the quality of the new products and services, have attracted the attention of both customers as… READ MORE

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