Description
This is a presentation about the complete guide to brand management explaining concepts like brand equity, brand awareness etc.
What is a Product?
? Anything that can be offered to a market for
attention, acquisition, use or consumption.
? Satisfies a want or a need. ? Includes:
Physical Products, Services, Persons Places, Organizations, Ideas Combinations
Levels of Product
Installation Packaging Brand Name
Augmented Product Additional Attributes
Delivery & Credit
Quality Level
Core Benefit or Service
Features
AfterSale Service
Design
Warranty Actual Product Core Product Fundamental Need
Product Attribute Decisions
Quality
Features
Design
? A form of product that consists of activities, benefits, or
What is a Service?
satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
? Examples: banking, hotel, airline, retail, tax preparation,
home repairs.
Nature and Characteristics of a Service
The Product-Service Continuum
Sugar Restaurant
College Education
Pure Tangible Good
Pure Service
Brand Defined
A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service Branding: Creating, maintaining, protecting, and enhancing products and services.
Brand is a product, that adds dimensions to differentiate from other products designed to satisfy the same need.
Differences could be rational, tangible, functional OR Symbolic, emotional, intangible
Benefits of Brands to Consumers
1. Identification of source of products
2. Risk Reducer: Consumers may perceive different types of risks in buying
Functional Risk: product performance
Physical Risk: health related hazards Financial Risk: worth for the price paid Social Risk: status, embarrassments
Time & Energy Risk: cost of finding another Satisfactory product Brands can be a very important risk-handling device
3. Search Cost Reducer:
4. Bond or Pact with the manufacturer or Service Provider: utility, consistency,
Appropriateness Ps of Marketing
5. Symbolic Device: Personality traits, values…
Benefits of Brands to Companies
1. Identification
2. Legal Protection
3. Signal of quality level to satisfied customers 4. Competitive Advantage
5. Financial returns
Branding Challenges:
1. Savvy Customers: advent of IT, knowledgeable experienced, demanding 2. Proliferations: line and brand extensions, complicated the marketing decisions 3. Increased Competition: Brand extensions, Globalization, Imitations
4. Media Fragmentation: non traditional forms of communication, zipping, cable TV
5. Decreasing Brand Loyalty in many categories
Brand Equity
Branding is all about creating differences
Differences in outcomes arising from the ‘added value endowed to a product. Brand Equity is the value of a brand.
A positive differential effect that knowing a Brand Name has on customer’s response towards the Product or services
Strategic Brand Management Process
Involves the design and implementation of marketing programs and activities to build, measure and manage brand equity.
Identify and Establish Brand Positioning and Values
Plan and Implement Brand Marketing Program
Measure and Interpret Brand Performance Grow and Sustain Brand Equity
Identify and Establish Brand Positioning and Values Mental Maps: understanding what the brand represent
Competitive Frame: Advantages of a brand vis-a-vis competitors
Points of Parity and Difference: Core Brand Values: Set of Attributes and benefits Brand Mantra: three-to-five words expression of the most important aspects of the brand.
Plan and Implement Brand Marketing Program Mixing and Matching the Brand Elements: Visual or verbal information that serves to identify and differentiate a product. Common Elements are : Brand Name, Logo, Symbol, Character, packaging and slogans. Chosen to enhance brand awareness or facilitate the formation of strong, favorable and unique brand Association. Different elements have different advantages, a subset or even all the possible brand elements are often employed
Integrating Brand into Marketing Activities and the Supporting Marketing Programs: Primary input to build a strong brand comes from the marketing activities related to brand Product, Price, and Channel Strategy Leveraging Secondary Associations: Product Origin Channel Strategy Ingredients Co-branding
Endorsements
Sponsorships
Brand Building Tools
Choosing Brand Elements
Brand Name, Logo, Symbol Character, Packaging, Slogan
Memorable, Meaningful, Likeability, Adaptability, Protectable
Developing Marketing Programs
Product Price Place Promotion
Tangible / Intangible Benefits Value Perception Integration Push / Pull Mix and Match options
Leveraging Secondary Associations
Company Name Country of Origin Channel of Distribution Endorsers Events Awareness Meaningfulness Transferability
Choosing Brand Elements
Brand Awareness Depth Breadth
Purchase Consumption
Developing Marketing Programs
Recall Recognition
Brand Associations
Strong
Leveraging Secondary Associations Relevance Consistency Points of Parity Points of Difference
Unique
Possible Outcomes
Choosing Brand Elements
Brand Awareness
Developing Marketing Programs
Loyalty
Less Vulnerability
Larger Margins
Brand Associations
Trade Co-operations
Increased Marketing Communication Efficiency Brand Extensions
Leveraging Secondary Associations
Customer Based Brand Equity Model
Basic Premise of the model is what customers have Learnt, Felt, Seen and heard about the brand as a result of their experiences over a period of time.
Power of brand lies in what lies the minds of the customers The challenge to the marketers in to building a strong Brand is to ensure that customers have right experience with the product and associated marketing programs
Customer Based Brand Equity is defined as the Differential effect that Brand knowledge has on consumer response to the marketing of that brand.
Differential Effect: difference in offerings than the Competitors.
If no difference occur, then the brand name can be essentially classified as COMMODITY or GENERIC Competition may be based on Price.
Brand Knowledge: differences in response are a result of consumers? knowledge about the brand from past Experience. Learnt, felt, saw or heard.
Marketing Programs: differential response reflected in Perceptions, preferences and behavior related to all Aspects of the marketing.
Recall of various touch points, Advertisements, sales promotions
Sources of Brand Equity
Brand Awareness consists of brand recognition and brand recall performance.
Brand Recognition relates to consumers? ability to confirm prior exposure to the brand when given the brand as a cue.
Brand Recall relates to consumers? ability to retrieve the brand from memory when given the cues.
Brand Awareness plays an important role in consumers? decision making for three main reasons: Learning Advantage: awareness influences the formation strength of the brand associations that make up the Brand image. Consideration Advantage: It is important that consumers think of and consider the brand whenever they are Making a purchase for which the brand can be potentially be acceptable.
Raising brand awareness increases the likelihood that brand will be a member of the consideration set.
Choice Advantage: Brand awareness can affect choices among the consideration set. Consumers may make choices based on brand awareness considerations when they have low involvement. Low involvement could be in terms of lack of motivation to purchase, nature of product, lack of knowledge or experience etc.
Brand Awareness is created by repeated exposure with the help of advertising, promotions, sponsorships, events etc.
It is important to visually and verbally reinforce the brand name with full complement of brand elements. A positive brand image is created by marketing programs that link strong, favorable and unique associations to the brand in memory.
Steps of Brand Building
Ensure Identification of the brand with customers and an association of the brand in customers? mind with a specific positioning.
WHO ARE YOU? (brand Identity)
Firmly establish the totality of brand meaning in the mind of customers by strategically linking tangible ad intangible brand associations with certain properties.
WHAT ARE YOU? (Brand Meaning)
Ensure Identification of the brand with customers and an association of the brand in customers? mind with a specific positioning. WHAT DO I THINK OR FEEL ABOUT YOU? Brand Response
Convert Brand response to create an intense, active relationship between brand and the consumers. WHAT ABOUT YOU AND ME? Associations
Customer Based Brand Equity Pyramid
Resonance
4. Relationships
Judgments
3. Response
Feelings
Performance
Imagery
2. Meaning
Salience
1. Identity
Brand Salience: relates to aspects of the awareness of the brand. Brand Recall, Recognition. Breadth and Depth of Awareness: it is important to have high levels brand awareness under a variety of conditions.
Depth of Awareness: Likelihood that a brand element will come to mind and the ease with which it does so. Breadth of Awareness: The range of purchase and usage situations in which the brand elements comes to mind.
Product Hierarchy has important implication for how to improve brand awareness. It contains schematic depiction of possible hierarchy that May exist in consumers? mind
Beverages Water Flavored Non Alcoholic Milk Juices Hot Beverages Soft Drinks Alcoholic
Wine
Beer
Distilled Spirits
Organization of the product category hierarchy that prevails in memory plays an important role in consumer decision making. Highly salient brand is the one which has both depth and breadth of brand awareness. It should be developed in such a manner that customers always make sufficient purchases as well always think of the brand across a variety of settings in which it could be employed or consumed.
Brand Performance: Designing and delivering a product that fully satisfies consumer needs and wants. Product itself is at the heart of brand equity
To what extent does the brand satisfy utilitarian, aesthetic and economic needs and wants. Different performance dimensions can serve as a means to differentiate the brand.
Resonance
Judgments
Feelings
Performance
Imagery
2. Meaning
Salience
Different types of attributes and benefits that often underlie brand performance;
1. Primary ingredients and supplementary features 2. Product reliability, durability and serviceability 3. Service effectiveness, efficiency and empathy 4. Style and Design
5. Price
Some attributes are essential ingredients necessary for For a product to work. Other attributes are supplementary features that allow for customization and more versatile, personalized usage. These attributes vary by product or service category Some categories have few ingredients or features; Bread Some categories have many essential ingredients but few features; Oven – many optional features.
Some categories have numerous ingredients and features Music Player – multiple options
Brand Imagery: deals with extrinsic properties of the product or service, including the way in which the brand attempts to meet customer?s psychological and social needs. Brand Imagery is how people think about a brand abstractly rather than what they think the brand actually does.
Resonance
Judgments
Feelings
Performance
Imagery
2. Meaning
Salience
It refers to more intangible aspects of the brand. Imagery associations can be formed directly or indirectly. Directly: customer experience, contact with product, usage situations etc.
Indirectly: through the desirous depictions communicated in brand advertising or some other sources of information.
Many types of intangibles can be linked to a brand:
User Profile Purchase and Usage Situations Personality and Values History, Heritage and Experiences
Brand Judgments: Focus on customer?s personal opinions and evaluations with the brand. Brand Judgment involve how a customer puts together all different performance and imagery associations of the brand to form different kinds of opinions.
Resonance Judgments Feelings
3. Response
Performance
Imagery
Salience
Some of the brand judgments that are important to Building a strong brand are: Quality Consideration Credibility User Profile
Brand Quality: is the attitude towards brand performance and its match with the perceived quality expectations Brand attitudes are important because they often form the basis for actions and behavior that consumers take with the brand. Brand Credibility: refers to the extent to which the brand As a whole is seen as credible in terms of three dimensions
Perceived expertise: competent, innovative, market leader
Trustworthiness: dependable and keeping customer Interests in mind
Likeability: Fun, interesting and worth spending time with Brand Consideration: it is more than mere awareness Consideration depends on how personally relevant customers find the brand OR The extent to which customers view the brand as being appropriate and meaningful to themselves. Customers make an overall appraisal as to whether they Have any personal interest in a brand AND Whether they should ever buy a brand
Brand superiority: relates to the extent to which customers view the brand as unique and better than Others. Brand superiority: relates to the extent to which customers view the brand as unique and better than Others. Superiority is intensely critical in terms of building intense and active relationships with customers and depends on Number of unique brand association that make up the Brand image.
Brand Feeling: are customers emotional response and reactions with respect to the brand. Brand feelings also relate to social currency evoked by the brand. Feelings that can be evoked by the various marketing Programs can be Warmth, Fun, Excitement, Security, Social Approval, Self Respect etc.
Resonance
Judgments
Feelings
3. Response
Performance
Imagery
Salience
Brand Resonance: refers to the nature of the relationship and the extent to which customers feel that they are IN SYNC with the brand.
Resonance is characterized in terms of intensity, or the depth of the psychological bond and the level of activities engendered by this loyalty. (repeat purchases, referrals)
Resonance can be broken down into four categories: Behavioral Loyalty Sense of Community Attitudinal Attachment Active Engagement
Behavioral Loyalty is necessary but not sufficient for resonance to occur. Some customers may buy out of necessity because the brand is the only product being stocked or easily available or only one that they can afford. To create resonance there needs to be a strong personal attachment. (Attitudinal Attachment) The brand may also take on broader meaning to the customers in terms of sense of community.
Identification with a brand community may reflect an important social phenomenon whereby customers feel a kinship or affiliation with others associated with the brand Strongest affirmation of brand loyalty is when customers are willing to invest time, energy, money or other resources in brand beyond those spent during purchase
Choosing Brand Elements to Build Brand Equity
Brand Elements are also called brand identities. These are trademarkable devices that serve to identify and differentiate the brands. Main Brand elements are: Names Jingles Logos Symbols Characters Signage Slogans
Packages
Spokespersons
These are independent of the decisions made about the product and how it is marketed.
Brand Elements are chosen to enhance brand awareness, facilitate the formation of strong, favorable, and unique brand associations; OR
Elicit (draw out) positive brand judgments and feelings.
Criteria for choosing Brand Elements There are six criteria in choosing brand elements Memorability: Easily recognized; Easily Recalled Meaningful: Descriptive; Persuasive Likability: Fun and Interesting; Rich visual and verbal imagery Transferability: within and across product categories; across geographical boundaries and cultures Adaptable: Flexible and Updatable
Protectable: Legally and Competitively
Memorability Intrinsic nature of brand elements may make them more attention getting and easy to remember.
All of these to contribute to brand equity
Meaningfulness Elements could be chosen whose inherent meaning enhances the formation of brand associations.
Important aspects of meaning of a brand element are the extent to which it conveys; General information about the nature of the product category: Suggesting something about product category Likelihood of consumer rightly identifying the product Specific Information about particular attributes and benefits of the brand: Product ingredients; kind of personality who might use etc…
Likeability The associations suggested by a brand element may not always related to product. Brand elements can be chosen that are rich in visual and verbal imagery. They may inherently denote fun and interest.
Memorability, Meaningful and Likeability; the set offers advantages of Recognition and Awareness: Consumers often do not examine much information in making purchase decision Reduce the burden on Marketing Communications Transferability Usefulness of the brand element for product category or line extension. The less specific the name, the more easily it can be transferred across categories.
Reliance connotes a feeling of security and can be extended to variety of products related to safety and security. Transferable across geographic boundaries Depends on cultural content and linguistic qualities of the brand elements. Using non meaningful names which do not have any inherent meaning can be transferred easily.
Pepsi marketed its products in China with the slogan “Pepsi Brings You Back in Life”, but the slogan in Chinese really meant
“Pepsi Brings Your Ancestors Back from Grave”
A hair product company introduced the Mist Stick, a curling iron rod, in Germany. Later on the company found out that mist is slang used for Manure in German. An American Company sold Baby food in Africa, the packaging had Pictures of Babies on the pack.
Company failed and found out that as Africans could not read, African companies put pictures on the label of what is inside the pack.
Companies must review all their brand elements for cultural meaning before introducing the brand into a new market.
Adaptability Because of the changes in consumer values and opinions, or simply because of a need to remain contemporary, brand elements often must be updated over the time.
Protectable Choose brand elements that can be legally protected on an international basis
Formally register them with the appropriate legal bodies
Vigorously defend trademarks from unauthorized competitive infringement. It is important to reduce the likelihood that competitors can imitate the brand creating a derivative based on salient prefixes or suffixes of the name, package looks or other actions.
Procedures and Considerations for choosing Brand Elements
Brand Name captures the central theme or key Associations of a product in a very compact and Economic manner . It takes consumers to comprehend marketing communications and can range from half a minute to a few hours;
Brand names can be noticed and its meaning registered or activated in memory within just a few seconds.
Brand Names can be chosen with certain criteria in mind
Descriptive Describes function literally, generally unregisterable Suggestive Suggestive of benefit or function Compounds Combination of two or more, unexpected words Classical
Based on Latin, Greek or Sanskrit words
Arbitrary Words with no obvious tie-in to the company
Brand awareness is improved; The extent to which brand names are chosen that are; Simple and easy to pronounce or spell Familiar and meaningful
Different, distinctive and unusual
Simplicity reduces consumers? cognitive effort to comprehend and process the brand name
Short names often facilitate recall because they are easy to encode and store in the memory
Longer names can be shortened to ease recall-ability Pronounciation also affects the entry of the brand into consideration sets and the willingness of consumers to order or request the brand orally. To improve pronounciability and recall-ability marketers may seek a desirable pleasant sound in their brand names. Cultural differences may exist in brand name memorability and recall.
Chinese Speakers are more likely to recall names in visuals rather than spoken recall
Whereas, English speakers are more likely to recall the names in spoken recall.
Brand names are not restricted to letters only but can contain Alphanumerics
Naming Procedures
1. Defining the brand objective: also necessary to recognize the role of the brand within the corporate branding hierarchy and how the brand should relate to other brands and products 2. Generating as many names and concepts as possible any potential source of names can be used; Company management and employees, existing and potential customers, intermediaries, Ad agencies, professional consultants and so on.
3. Names must be screened based on branding objectives and marketing considerations.
Elimination can be based on
Names that have unintentional double meanings Names that are patently unpronounceable, already in use or too close an existing name Names that have obvious legal complications Names that represent an obvious contradiction of the positioning
4. Collecting more extensive information on each of the final 5-10 names.
Before spending large amounts of money on consumer research it is advisable to do an extensive international legal search
5. Consumer research to confirm management expectations as to the memorability and meaningfulness of the names.
6. Based on all the information management can choose the name that maximizes the firm?s branding and marketing objectives and register.
Brand Logos can be used as means to indicate origin, ownership or association.
logos may range from corporate names and trademarks written in a distinctive form to;
Distinctive abstract logos completely unrelated to corporate name or activities. Strong word marks; BATA, COCA-COLA, KIT-KAT Abstract Logos; Mercedes Benz, Nike, Olympic
Non-word mark logos are often called as symbols. Because of their visual nature, logos and symbols are often easily recognizable. Logos are non-verbal thus can be updated as needed over time and can be well transferred across culture They can be relevant and appropriate in a range of product categories.
Brand characters Represent a special type of brand symbol that takes a human or real life characteristics. These are introduced through advertising and can play a central role in subsequent campaigns and package design.
Characters can be animated of live-action figures often colorful or rich in imagery.
Characters can help to break through the marketplace clutter
Help in easily communicating key product benefits. The ability of a consumer to have a relationship with a brand can be easier when the brand literally has a humanistic character Brand characters also do not have direct product meanings so they can be transferred easily across product categories.
Characters often must be updated over time so that their and personality remains relevant to the target market.
Brand Slogans
Slogans are short phrases that communicate descriptive or persuasive information about the brand.
Just do it
Slogans often become closely tied to advertising campaigns and can be used as lines to summarize the descriptive or persuasive information conveyed in ads Diamonds are forever: the tagline communicates the intended ad message that Diamonds bring eternal love and never loose value.
Campaign-specific lag lines may be used to help reinforce the message of a particular campaign instead of the brand slogan for a certain period of time.
Brand Jingles
Jingles are musical messages written around the brand.
These are typically composed by professional songwriters Can be thought as extended musical slogans
Because of their musical nature jingles are not easily transferrable as other brand elements.
Jingles can communicate brand benefits but often convey product meaning in a fairly abstract manner.
The potential associations that might occur for the brand from jingles are feelings, personality or other intangible benefits.
Because of their catchy nature, consumers are likely to mentally rehearse or repeat the jingle even after seeing or hearing the ads. This provides an additional encoding opportunities and increasing memorability.
A well known jingle can serve as a foundation for advertising for years.
Brand Packaging
Packaging involves the activities of designing and producing containers or wrappers for a product. Packaging should achieve certain objectives: Identify the brand
Convey descriptive and persuasive information
Facilitate product transportation and protection
Assist at-home storage
Aid product consumption
The aesthetic and functional components of packaging must be chosen correctly.
Aesthetics: relate to package?s size and shape, material colour, text and graphics. Functional: easy to hold, easy to open, resealable, tamperproof, storage, reusable. One of the strong associations that a consumer has with the brand is the look of its packaging.
New packages can also expand a market and capture new market segments.
Package design has also become important as: Brand proliferation is increasing and Advertising is becoming more expensive. For many consumers, the first encounter with a new brand may be on the shelf of a store. Few product differences exist in some categories, packaging innovations can provide an edge
Packaging also means having a strong appeal on the shelf and standing out from the clutter.
Packaging is also called as; „Last five seconds of marketing?
„Permanent Media?
„The last salesman?
Putting it all together
It is necessary to „mix and match? different brand elements to increase brand equity. Marketers must choose to mix brand elements to achieve different objectives. Brand elements must be chosen to reinforce each other by shared meaning and marketing programs.
Designing Marketing Programs to Build Brand Equity
Judicious selection of brand elements can make an important contribution to customer based brand equity. But the primary input comes from marketing activities related to the brand and the corresponding marketing programs.
Marketing activities in general and product, price and distribution strategies in particular can build brand equity by way of: Enhancing brand awareness, improve brand image, eliciting positive brand response and increasing brand resonance
Brand itself can be effectively integrated into the marketing program to maximize the creation of brand equity
Changes in the economic, technological, socio-cultural, and competitive environments have forced marketers to adopt new marketing approaches.
Kotler identifies certain major drivers of new economies as; Digitalization and connectivity Disintermediation and re-intermediation
Customization New customer and company capabilities.
New Capabilities in New Economy
Consumers A substantial increase in customer power A greater variety of available goods and services A greater amount of information , practically about anything
A greater ease in interacting, placing and receiving orders.
An ability to exchange and compare notes, experiences or information on various issues , even with strangers.
Companies
Can collect full and richer information about market, customers, prospects and competitors.
Can facilitate transaction efficiency Can customize their offerings and services to individual customers
Marketers are abandoning the mass marketing approach to implement new approaches
Companies are adopting Personalized marketing in the form of :
Experiential Marketing: Pine and Gilmore It promotes a product by not only communicating product?s features and benefits but also connecting it with unique and interesting experiences.
Experiential Marketing differs from traditional marketing in several distinct ways: Focuses on customer experience Focuses on the consumption situation
Views customers as rational and emotional being
Use eclectic (diverse and assorted) methods and tools
Different Types of experiences enhanced: Sense, feel, think, act and relate
Different experience providers: Communications, visual/ verbal identity and signage, product presence, co-branding, spatial environment and sales personnel.
One-to-one Marketing: Don Peppers and Martha Rogers
Basic rationale of one-to- one marketing is that consumers help to add value by providing information to the marketer; and Marketers add vale by taking that information and generating rewarding experiences for consumers. A company reduces transaction costs and maximize utility for consumers to build profitable relationships One-to-one marketing is based on certain concepts like;
Focus on individual consumers through databases Respond to consumer dialogue via interactivity Customize products and services
Most important principle of one-to-one marketing is:
Treat different consumers differently because of their different needs and their different value to the company.
Permission Marketing: Seth and Godin
Interruption marketing in terms of mass media campaigns can no longer attract customers as they may expect but not necessarily appreciate such interruptions
If a marketer wants to attract a consumer?s attention, they first need to seek his permission. Inducements for permission could be – a free sample, sales promotion, contest, discount etc. By eliciting consumer co-operation, marketer can potentially develop stronger relationships with consumers
Consumers may show a willingness to receive further communications in the future. Steps to effective permission marketing:
Offer the prospects an incentive to volunteer
Offer the interested prospect information over time
Reinforce the incentive to guarantee permission over time
Leverage the permission to change consumer behaviour towards Brand Equity.
Permission marketing can be seen as developing the consumer dialogue components of one-to-one marketing in more details.
Reconciling The New Marketing Approaches
From branding perspective new marketing approaches are useful means of thinking how to: Bring out positive brand responses and
Create brand resonance to build CBBE.
One-to-one and Permission Marketing can be effective at creating strong behavioural loyalty and attitudinal attachment. Experiential Marketing can be effective in establishing brand imagery and variety of feelings.
The product itself is at the heart of brand equity because it is the primary influence on what consumers experience With a brand,
What they hear from others
To create brand loyalty, consumers? experience with the product at least be met, if not actually surpass their expectations.
Important to know how consumers form their opinions of the quality and value of a product.
Perceived Quality and Value
Perceived quality has been defined as customers? perception of the overall quality or superiority of a product relative to; Relevant alternatives, and With respect to its intended purpose. Quality Perceptions can vary from category to category
General Dimensions of Product Quality
Performance
Levels at which the primary characteristics of the product operate.
Features Secondary elements of a product that complement the primary characteristics.
Conformance Quality Degree to which the product meets specifications and is absent of defects
Reliability
Consistency of performance over time and from purchase to purchase Durability
Expected economic life of the product
Serviceability Ease of servicing the product
Style and Design
Appearance or feel of quality
Brand Attitudes may not necessarily be based only on product performance but
May also depend on more abstract product imagery.
Reflecting the importance of product quality, companies are adopting to quality management approaches like
Quality Function Deployment, Total Quality Management Return on Quality
Marketers must take a broad and holistic approach to building brand equity McKinsey Consulting has Developed a Model for 3-D Marketing
Model proposes three product or service benefit dimensions that are likely to be expected by a customer
Benefits Functional Benefits: Product and performance attributes; value, quality so forth
Process Benefits: Ease of access to product information, broad product selection, simplified/ assisted decision making, convenient transaction, automatic product replenishment Relationship Benefits: Value based on personalized service, strong emotional relevance, information sharing that creates value exchange, differentiated loyalty rewards
Value Chain Concept
Consumers often combine quality perceptions with cost perceptions to arrive at an assessment of the value of a product. Costs are not restricted to the actual monetary price but may also reflect opportunity costs of time, energy and psychological involvement in the decision making.
Michael Porter has proposed the value chain as a strategic tool for identifying ways to create more customer value.
The value chain identifies FIVE primary value creating activities; and FOUR Support Activities.
Value Creation Inbound Logistics Outbound Logistics
Support Activities
Infrastructure
Human Resource
Marketing Technology Development
Sales
Procurement Services
Companies can create competitive advantages by partnering with other members of the values chain to improve the performance of the customer value delivery system.
From a branding perspective, various mentioned activities are potentially a means of creating strong, favourable, and unique brand associations that can serve as sources for brand equity. This broader set of activities and its integration is relationship marketing
Important Relationship Marketing Issues
Mass Customization
Making products to fit the customer?s exact specification Dell, Levi?s, Fashion Markets, Nike
After Marketing Those marketing activities that occur after customer purchase
It can involve the sale of related, complementary products
Instruction Manuals for many products.
Loyalty Programs
These have become a popular means to create a stronger tie to customers. The purpose is to identify, maintain and increase yield From company?s best customers through
Long term, interactive, value added relationship
BRAND LOYALTY VERSUS PERCEIVED VALUE LOYALTY
Consumers look for “perceived value” and not at price alone as Value is a blend of quality and price. A consumer is willing to pay a certain price for a certain quality. Different segments of consumers look at different „perceived value? points and not just price points. This is the tangible part. The intangible part of perception, which is a combination of image and emotional value, also contributes to consumers? purchase and consumption decisions.
The tangible value and the intangible perception make up the „perceived value? of any brand in the minds and hearts of the consumers.
Ultimately it is the „perceived value points? that the consumer looks for and the wars that are actually won are “perceived value” wars and not „price? wars.
Price wars may be successful in certain categories like; Hindustan Lever and Procter and Gamble in the prices of their brand Wheel, Ariel and Tide to snatch back market share from brands like Ghadi detergent.
The same companies have also aggressively priced Sunsilk and Clinic and are resorting to aggressive marketing for brands like Head & Shoulders and Pantene to take back market share from brands like Chik and Nyle. They have also changed the proportion of sachets and bottles to increase consumption. Categories like TV a consumer evaluates the brands in terms of Perceived value. It is not enough to have innovative exchange schemes, unique tie-ups or liberal consumer financing. But combined with sound positioning and servicing,
Consumers are more loyal to „perceived value? than to „brands?. If a brand consistently delivers „perceived value? over a period of years, it may attain brand loyalty.
Ways to Acquire Perceived Value Points and Brand Loyalty
Marketers must focus on the consumer and not on the competition. Comparing and contrasting with competition, and even following the price cut road to a bottomless pit, is suicidal.
Companies must focus on its consumer segments and customize its offerings.
Unwarranted and adhoc promotions, that are actually disguised price cuts reduce the equity and the image of the brand, making the consumer focus on the „deal? rather than the branded product. It is important to create disparity through positioning, core values and enhancing the „perceived value? in minds and hearts of consumers. Companies may launch a new brand or a variant at a low, medium or high „perceived value point?. This is consciously done to focus on a given segment.
It would be prudent to have various brands or variants in the portfolio, allowing the consumer to choose which segment they would like to participate in.
Pricing Strategies
From brand equity perspective, it is important that consumers find the price of the band appropriate and reasonable; Different kinds of price perceptions that consumers might form and different pricing strategies that a firm may adopt leads to desired brand equity.
Pricing strategy can dictate how consumers categorize the price of a brand as low, medium or high priced
There could be various price tiers which are acceptable to the consumers
Specialty
Excellent
Very Good
Good
Commodity
Fair
Price
Within any price tier there is a range of acceptable prices a customer may pay; these are called PRICE BANDS
PRICE BANDS provide managers with some indication of the flexibility and breadth they can adopt in pricing their brands within a particular price tier. In many product categories consumers may infer quality of a product on the basis of its price. Companies have adopted VALUE BASED PRICING STRATEGIES- attempting to sell the right product at right price.
The objective of value pricing is to uncover the right blend of;
product quality,
product cost
product price,
These fully satisfy the needs and wants of the consumers and the profit targets of a firm.
An effective value pricing strategy should strike the proper balance among Product design and delivery Product costs Product prices
Proponents of value pricing point out that the concept does not mean selling stripped-down versions of product at lower prices but Consumers are willing to pay premiums when they perceive added value in products and services
The product costs can be lowered for a successful value-pricing strategy
Cost savings could be achieved through
Productivity gains, Outsourcing
Material Substitution
Product Reformulation
Process changes,
Contemporary Pricing Strategy- Everyday Low Pricing
Companies charge a constant low price with no temporary discounts
An Every Day Low Pricing (EDLP) strategy is more popular with shoppers, than one driven purely by promotions.
Advantages
? Reduces price wars ? Reduces advertising ? Improves customer service ? Increases overall profit margins
? Predatory Pricing: Selling at unreasonably
low prices to lessen competition.
? Price Discrimination: The use of different
prices for different customers.
? It is illegal if a price advantage is granted to one,
but not another, where both compete and the articles are similar.
? Granting promotional allowances must be done
on a proportionate basis to all customers.
Pricing Strategy Improvement
1. Base pricing strategies on sound research in order to understand relevant price factors.
2. Continuously monitor pricing decisions because they often help define company image. 3. Remember that consumers have trouble recognizing slight price differences.
4. Remember that consumers evaluate prices comparatively. They often use a sense of what they think the item should cost as a benchmark.
5. Recognize that buyers typically have a range of acceptable prices defined by upper and lower limits.
6. Understand the importance of relative price to buyers – the relationship between a price and your competitors? price. 7. Understand the importance of price information and its effects on differentiating products within a product line.
8. Recognize that price elasticity vary – it is easier to lose customers to price increases then gain them from price decreases.
Branding Strategies
A branding strategy can be seen as both DEPTH and BREADTH of the company offerings. A branding strategy can be seen both as deep and broad if the firm has large number of brands; Many of which have extended to various product categories
The Offering Mix
(Portfolio)
The totality of a company?s offerings is known as its product or service offering mix or portfolio • Consists of distinct offering lines (product line width)
Each line consists of individual offers or items (product line depth)
?
The Offering Portfolio
Bundling – enhancing the offering mix by providing two or more product or service items as a “package deal” McDonald?s “value meal”
IBM hardware, software, and maintenance contracts
Brand Growth Strategies
New products New Brand Existing products Fighting/Flanker Brand Strategy Line Extension Strategy
New Brand Strategy
Existing Brand Extension Strategy Brand
Brand extension
Product categories (Brand –Product Relationships)
1
Brand
ProductBrand Relationship
2
…..
N
A
CATEGORY EXTENSION
B
LINE EXTENSION
Rows : Number and nature of products sold under a company?s Brands Columns : Number and nature of brands marketed in each category.
LINE EXTENSIONS
BRAND EXTENSIONS
Horizontal Extension
Vertical Extension
Another Product Class
Range Brand
CoBranding
Up from Core Brand
Down from Core Brand
Line Extension Strategy
Adding offerings with the same brand in a product class that an organization currently serves… Respond to customers’ desire for variety Eliminate gaps in the product line Lowers advertising and promotion costs Consider possibilities of product cannibalism and proliferation of offerings (Coke and Vanilla Coke)
Brand Extension Strategy
The practice of using a current brand name to enter a completely different product class
Reduced risk due to brand equity Success depends on perceptual fit with the original product class
e.g., Yamaha makes motorcycles, sound equipment, computer peripherals, and musical instruments
? Five Stages Model of Brand Extension
Strategy
Planning
Sustainability
Customer Loyalty
Brand Equity
Building a Value Fit
Positioning
Five Stages Model of Brand Extension Strategy
? The process requires a lot of decisions at the top
and managerial levels for the sustainability of the brand and of course for greater returns.
? Planning: comprises of comprehensive R&D, where
customer’s needs are tested and their tastes and preferences being investigated thoroughly and bringing in the right product in the market.
Positioning: requires the recognition to touch the hearts
and minds of the targeted group which creates Brand Loyalty and in turn Brand preference i.e. consumer reliance on previous experiences with a product to choose that product again. Sustainability of the brand as per its importance and impact on ROI would require the brand mangers to check the pulse of the market regularly to see if it’s giving the same kind of quality and benefits consumers wanted.
Building a value fit with what consumers’ perceptions And expectations are and meeting them by creating a Unique value for them.
Brand equity is the most important as everything being done from step A to last one would revolve around the financial stability of the brand and the financial value it had in the market as compare to its rivals.
Brand Extension Strategy: Co-branding
Co-branding Pairing two brand names of two manufacturers on a single product
Flanker/Fighting Brand Strategy Flanker Brand Strategy
Involves adding a new brand on the high or low end of a product line based on a price-quality continuum
Fighting Brand Strategy Involves adding a new brand whose sole purpose is to confront competitive brands in a product class being served by an organization.
Cash Cows: Some brands may be kept in-spite of decreasing sales because; They still manage to hold sufficient number of customers and maintain their profitability with virtually no marketing support. Low- End Entry level of High- End Prestige Brands: Introducing line extensions or brand variants in a product category that vary in price and quality.
These extensions / sub-brands leverage associations from parent / other brands while distinguishing themselves on the basis of their price and quality dimensions.
The end points of the brand line often play a specialized role.
New Brand Strategy
Involves the development of a new brand and often a new offering for a product class that has not been previously served by the organization.
Most challenging strategy Most costly
e.g., Lexus by Toyota
Managing the brand Over the Time Brand equity must be actively managed over time by Reinforcing the brand meaning and adjusting the marketing programs to identify new sources of Brand Equity. Managing the brand with consistency in amount and nature of support. Being consistent in managing brand equity may require numerous tactical shifts and changes in order to maintain the strategic thrust and direction of the brand
The tactics may be most effective for a particular brand at any one time can not be as effective during the other Over the time : Price may move up or down
Product features may be added or dropped
Ad campaigns may employ different creative strategies and slogans
Different brand extensions may be introduced or withdrawn
The mentioned changes may take place in order to create the same desired knowledge structures in customer?s mind.
Consistency should be viewed in terms of strategic direction and not necessarily any particular tactics employed by the supporting marketing programs. In certain cases there are changes in: Consumers, competition or the company that makes the strategic positioning of the brand less powerful.
Revitalizing the Brand
A major overhaul of a brand, starting with its positioning and proceeding through creative regeneration of the brand identity A brand revitalization program is involving strategies to recapture lost sources of brand equity and; Ways to identify and establishing new sources of brand equity for the brand or the brand portfolio. Brands sometimes have to return to their roots to recapture lost sources of equity
By surveying consumers who have long-term relationships with older brands, the following data can be mined: What are the points of differentiation, or unique selling proposition of the brand, per their perception? What are the brand?s Enjoyment assets? How many pleasant associations and experiences consumers have had with the brand? What are the negatives, if any, associated with the brand?
What is the perceived value of the brand? Is the perceived value of the brand still active, or is it dormant? How relevant is the brand?
What, in the consumers? perception, can the brand do for them to add value or more desirable attributes?
How much loyalty is there to the brand?
Brands are most likely to respond to Revitalization efforts
That have clear and relevant values that have been left dormant for a long time. Have not been well expressed in the marketing and communication recently Have violated by product problems
Revitalizing the Brand Involves 1. Refocus Entire Organization
2. Restore Brand?s Relevance
3. Reinvent Brand Experience 4. Rebuild Brand Trust 5. Realize Global Alignment
Revitalization Strategies involve a continuum with
PURE BACK TO BASIC at one end to PURE REINVENT on the other The trick is to place the brand in the center. The “1080-10” rule of focus can be useful : Acknowledge your heritage (10%) Address the needs of today (80%) Look forward to the future (10%)
Identifying Additional or New Usage opportunities
Brand may be seen as useful only in certain times and At certain times. True in cases if a brand has strong associations to particular usage situations. Marketing programs can be aligned and designed to increase additional or new usage opportunities by: Communicating to consumers as to the appropriateness and advantages of using the brand more frequently in existing situations or in new situations
Another way to increase usage is to provide consumers with better information about ;
When the product was first used or would need to be replaced, or; The current level of product performance.
Brand Revitalization Strategies
Refresh old sources of brand equity
Expand depth and breadth of awareness and usage of brand Increase quantity of consumption (how much)
Create new sources of brand equity
Improve strength, favorability and uniqueness of brand associations
Bolster fading associations Neutralize negative associations Create New Associations
Increase frequency of consumption (how often)
Increase quantity of consumption (how much)
Increase frequency of consumption (how often)
Neutralize negative associations
Bolster fading associations
Create New Associations
Identify additional opportunities to use brand in same basic way Identify completely new and different ways to use brand
• Retain vulnerable customers • Recapture lost customers • Identify neglected segments • Attract new customers
Measuring Brand Equity
? Multi-dimensional concept ? Many different measures required ? The ultimate value of a brand depends on the underlying components of brand knowledge and sources of brand equity
Comparative Methods
? Brand-based comparative approaches
? Marketing-based comparative approaches ? Conjoint analysis
Brand-Based Approaches
? The marketing element under consideration is fixed. ? Consumer response is examined based on changes in
brand identification.
? Application example: Blind testing ? Advantage: Isolates the value of the brand ? Disadvantage: The totality of what is learned depends on
how many applications are examined.
Marketing-Based Approaches
? The brand is held fixed and consumer response is
examined based on changes in marketing programs.
? Applications: Explore price premiums’ effect on switching,
consumer evaluations of marketing activities, brand extensions, etc.
? Advantage: Ease of implementation ? Disadvantage: Difficult to determine whether consumer
responses are caused by brand knowledge or generic product knowledge
Conjoint Analysis
? A survey-based multivariate technique that enables marketers to profile the consumer decision process with respect to products and brands ? Helps researchers determine the trade-offs consumers make between brand attributes ? Applications: Assess advertising effectiveness and brand value; analyze brand/price trade-off ? Advantage: Allows for different brands or different aspects of the product to be analyzed simultaneously ? Disadvantage: May violate consumers’ expectations
based on what they already know about brands
Holistic Methods
? Attempt to place an overall value on the brand
in either
abstract utility terms or concrete financial terms
? Net out various considerations to determine the unique
contribution of the brand
? Holistic methods: ? Residual approaches ? Valuation approaches
Free Association
? Here subjects are asked what comes to mind when they think of the brand, without any more specific probe or cue than perhaps the associated product category: What does the Rolex name mean to you? What comes into mind when you think of Rolex watches.
? Free association can also provide some rough indication of the relative strength, favorability, and uniqueness of brand associations.
Free Association
? To better understand the favorability and uniqueness of the associations, one could ask followup questions:
“What do you like best about Rolex? “What are its positive aspects?” “What do you dislike?” “What are its disadvantages?” “What do you find unique about the Rolex brand?” “How is it different from other brands? In what ways is it the same?”
Free Association
ATTRIBUTES
User Imagery Western, American, blue collar, hard-working, traditional, strong, rugged, and masculine Usage Imagery Product-Related Blue denim, shrink-to-fit cotton fabric, button-fly, two-horse patch, and small red pocket tag
BENEFITS
Appropriate for outdoor work and casual social situations
Brand Personality
LEVI’S
Honest, classic, Contemporary, approachable, independent, and universal
High quality, long lasting, and durable Functional
Comfortable fitting and relaxing to wear
Experiential
Feelings of self-confidence and self-assurance
Symbolic
Projective Techniques
? Under some situations, consumers may feel that it would be socially unacceptable or undesirable to express their true feelings: e.g. unwilling to say a brand enhances self-esteem. ? Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express them.
? Comparison Tasks:: Here we ask consumers to convey their impressions by comparing brands to people, countries, animals, activities, fabrics, occupations, cars, magazines, vegetables, nationalities, or even other brands.
? Completion and Interpretation Tasks: This technique uses incomplete or ambiguous stimuli to gauge consumer thoughts and feelings. One approach is “bubble exercises” which show people buying or using certain products or services. Respondents are asked to fill in the empty bubbles.
Brand Personality and Values
? Brand personality is the human characteristics or traits that consumers can attribute to a brand. ? Jennifer Aaker created a brand personality scale that reflected the following five factors of brand personality: Sincerity (down-to-earth, wholesome, and cheerful) Excitement (daring, spirited, imaginative, and up-to-date) Competence (reliable, intelligent, and successful) Sophistication (upper class and charming) Ruggedness (outdoor and tough)
Quantitative Research Techniques
Although qualitative measures are useful to identify the range of possible associations to a brand and their characteristics in terms of strength, favorability, and uniqueness, marketers
often want a more definitive portrait of the brand to allow them to make more confident decisions.
Quantitative research typically employs various types of scaled questions from which researchers can draw numerical summaries:
? Brand Awareness ? Brand Image ? Brand Responses ? Brand Relationships
Aided or Unaided Recall Beliefs or perceptual mapping Purchase Intentions Behavioural Loyalty
? To measure sources of brand equity, we must
understand two key areas: how consumers shop for and use products and services, and what consumers know, think, and feel about various brands.
? Qualitative methods allow marketers to probe
consumers either through direct questions or through tasks that indirectly reveal perceptions and attitudes. ? Quantitative methods, which typically use numerical rating scales or rankings, include measures of recognition, aided and unaided recall, beliefs, attitudes, intentions and behaviors toward the brand .
? Both methods enable marketers to construct “mental maps” that model consumers’ feelings, beliefs, and attitudes regarding a brand.
Residual Approaches
? Examine the value of the brand by subtracting
consumers’ preferences based on physical product attributes alone from their overall brand preferences
? Advantage: Useful benchmark for interpreting brand
equity, especially from a financially oriented perspective
? Disadvantage: Static view. Limited diagnostic value for
strategic decision making
Valuation Approaches
? Attempt to place a financial value on brand equity for
accounting purposes
? Useful in cases of mergers and acquisitions, brand
licensing, fund raising, and brand management decisions
? Valuation approaches: ? Accounting background ? Historical perspectives ? General approaches ? Interbrand’s brand valuation methodology
Accounting Background
? Intangible assets are typically lumped under the
heading of goodwill and include things such as patents, trademarks, and licensing agreements, as well as “softer” considerations such as the skill of the management and customer relations.
? In an acquisition, the goodwill item often includes a
premium paid to gain control, which, in certain instances, may even exceed the value of tangible and intangible assets.
Historical Perspectives
? In Australia Rupert Murdoch’s News Corporation included a valuation of some of its magazines on its balance sheets in 1984. ? British firms used brand values primarily to boost their balance sheets. ? In the United States, generally accepted accounting principles (blanket amortization principles) mean that placing a brand on the balance sheet would require amortization of that asset for up to 40 years. Such a charge would severely hamper firm profitability; as a result,
firms avoid such accounting maneuvers.
General Approaches
? In determining the value of a brand in an acquisition or merger, firms can choose from three
main approaches:
? Cost approach: Brand equity is the amount of money
that would be required to reproduce or replace the brand
? Market approach: The present value of the future
economic benefits to be derived by the owner of the asset
? Income approach: The discounted future cash flow from
the future earnings stream for the brand
Interbrand’s Brand Valuation
? Assumes that brand value is the present worth of the benefits of future ownership ? Follows five valuation steps:
? Market segmentation ? Financial (role of branding) analysis ? Demand (brand strength) analysis ? Competitive benchmarking ? Brand value calculation
? Brand value calculation : Calculate the brand value as the net present value (NPV) of the forecast brand earnings, discounted by the brand discount rate
Brand leadership – the evolving paradigm
Classic brand management Brand leadership
From tactical to strategic management PERSPECTIVE
BRAND MANAGER STATUS Tactical and reactive Strategic and visionary Higher in the organization, longer time horizon
Less experienced, shorter time horizon
CONCEPTUAL MODEL
Brand image
Brand equity
FOCUS
Short-term financials
Brand equity measures
Brand leadership – the evolving paradigm
Classic brand management Brand leadership
From tactical to strategic management
PRODUCT-MARKET SCOPE
Tactical and Single products and markets reactive
Multiple products and markets
NUMBER OF BRANDS
Focus on single brands
Category focus – multiple brands
COUNTRY SCOPE
Single country
Global perspective
COMMUNICATION FOCUS
External/customer
Internal as well as external
doc_580136088.pptx
This is a presentation about the complete guide to brand management explaining concepts like brand equity, brand awareness etc.
What is a Product?
? Anything that can be offered to a market for
attention, acquisition, use or consumption.
? Satisfies a want or a need. ? Includes:
Physical Products, Services, Persons Places, Organizations, Ideas Combinations
Levels of Product
Installation Packaging Brand Name
Augmented Product Additional Attributes
Delivery & Credit
Quality Level
Core Benefit or Service
Features
AfterSale Service
Design
Warranty Actual Product Core Product Fundamental Need
Product Attribute Decisions
Quality
Features
Design
? A form of product that consists of activities, benefits, or
What is a Service?
satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
? Examples: banking, hotel, airline, retail, tax preparation,
home repairs.
Nature and Characteristics of a Service
The Product-Service Continuum
Sugar Restaurant
College Education
Pure Tangible Good
Pure Service
Brand Defined
A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service Branding: Creating, maintaining, protecting, and enhancing products and services.
Brand is a product, that adds dimensions to differentiate from other products designed to satisfy the same need.
Differences could be rational, tangible, functional OR Symbolic, emotional, intangible
Benefits of Brands to Consumers
1. Identification of source of products
2. Risk Reducer: Consumers may perceive different types of risks in buying
Functional Risk: product performance
Physical Risk: health related hazards Financial Risk: worth for the price paid Social Risk: status, embarrassments
Time & Energy Risk: cost of finding another Satisfactory product Brands can be a very important risk-handling device
3. Search Cost Reducer:
4. Bond or Pact with the manufacturer or Service Provider: utility, consistency,
Appropriateness Ps of Marketing
5. Symbolic Device: Personality traits, values…
Benefits of Brands to Companies
1. Identification
2. Legal Protection
3. Signal of quality level to satisfied customers 4. Competitive Advantage
5. Financial returns
Branding Challenges:
1. Savvy Customers: advent of IT, knowledgeable experienced, demanding 2. Proliferations: line and brand extensions, complicated the marketing decisions 3. Increased Competition: Brand extensions, Globalization, Imitations
4. Media Fragmentation: non traditional forms of communication, zipping, cable TV
5. Decreasing Brand Loyalty in many categories
Brand Equity
Branding is all about creating differences
Differences in outcomes arising from the ‘added value endowed to a product. Brand Equity is the value of a brand.
A positive differential effect that knowing a Brand Name has on customer’s response towards the Product or services
Strategic Brand Management Process
Involves the design and implementation of marketing programs and activities to build, measure and manage brand equity.
Identify and Establish Brand Positioning and Values
Plan and Implement Brand Marketing Program
Measure and Interpret Brand Performance Grow and Sustain Brand Equity
Identify and Establish Brand Positioning and Values Mental Maps: understanding what the brand represent
Competitive Frame: Advantages of a brand vis-a-vis competitors
Points of Parity and Difference: Core Brand Values: Set of Attributes and benefits Brand Mantra: three-to-five words expression of the most important aspects of the brand.
Plan and Implement Brand Marketing Program Mixing and Matching the Brand Elements: Visual or verbal information that serves to identify and differentiate a product. Common Elements are : Brand Name, Logo, Symbol, Character, packaging and slogans. Chosen to enhance brand awareness or facilitate the formation of strong, favorable and unique brand Association. Different elements have different advantages, a subset or even all the possible brand elements are often employed
Integrating Brand into Marketing Activities and the Supporting Marketing Programs: Primary input to build a strong brand comes from the marketing activities related to brand Product, Price, and Channel Strategy Leveraging Secondary Associations: Product Origin Channel Strategy Ingredients Co-branding
Endorsements
Sponsorships
Brand Building Tools
Choosing Brand Elements
Brand Name, Logo, Symbol Character, Packaging, Slogan
Memorable, Meaningful, Likeability, Adaptability, Protectable
Developing Marketing Programs
Product Price Place Promotion
Tangible / Intangible Benefits Value Perception Integration Push / Pull Mix and Match options
Leveraging Secondary Associations
Company Name Country of Origin Channel of Distribution Endorsers Events Awareness Meaningfulness Transferability
Choosing Brand Elements
Brand Awareness Depth Breadth
Purchase Consumption
Developing Marketing Programs
Recall Recognition
Brand Associations
Strong
Leveraging Secondary Associations Relevance Consistency Points of Parity Points of Difference
Unique
Possible Outcomes
Choosing Brand Elements
Brand Awareness
Developing Marketing Programs
Loyalty
Less Vulnerability
Larger Margins
Brand Associations
Trade Co-operations
Increased Marketing Communication Efficiency Brand Extensions
Leveraging Secondary Associations
Customer Based Brand Equity Model
Basic Premise of the model is what customers have Learnt, Felt, Seen and heard about the brand as a result of their experiences over a period of time.
Power of brand lies in what lies the minds of the customers The challenge to the marketers in to building a strong Brand is to ensure that customers have right experience with the product and associated marketing programs
Customer Based Brand Equity is defined as the Differential effect that Brand knowledge has on consumer response to the marketing of that brand.
Differential Effect: difference in offerings than the Competitors.
If no difference occur, then the brand name can be essentially classified as COMMODITY or GENERIC Competition may be based on Price.
Brand Knowledge: differences in response are a result of consumers? knowledge about the brand from past Experience. Learnt, felt, saw or heard.
Marketing Programs: differential response reflected in Perceptions, preferences and behavior related to all Aspects of the marketing.
Recall of various touch points, Advertisements, sales promotions
Sources of Brand Equity
Brand Awareness consists of brand recognition and brand recall performance.
Brand Recognition relates to consumers? ability to confirm prior exposure to the brand when given the brand as a cue.
Brand Recall relates to consumers? ability to retrieve the brand from memory when given the cues.
Brand Awareness plays an important role in consumers? decision making for three main reasons: Learning Advantage: awareness influences the formation strength of the brand associations that make up the Brand image. Consideration Advantage: It is important that consumers think of and consider the brand whenever they are Making a purchase for which the brand can be potentially be acceptable.
Raising brand awareness increases the likelihood that brand will be a member of the consideration set.
Choice Advantage: Brand awareness can affect choices among the consideration set. Consumers may make choices based on brand awareness considerations when they have low involvement. Low involvement could be in terms of lack of motivation to purchase, nature of product, lack of knowledge or experience etc.
Brand Awareness is created by repeated exposure with the help of advertising, promotions, sponsorships, events etc.
It is important to visually and verbally reinforce the brand name with full complement of brand elements. A positive brand image is created by marketing programs that link strong, favorable and unique associations to the brand in memory.
Steps of Brand Building
Ensure Identification of the brand with customers and an association of the brand in customers? mind with a specific positioning.
WHO ARE YOU? (brand Identity)
Firmly establish the totality of brand meaning in the mind of customers by strategically linking tangible ad intangible brand associations with certain properties.
WHAT ARE YOU? (Brand Meaning)
Ensure Identification of the brand with customers and an association of the brand in customers? mind with a specific positioning. WHAT DO I THINK OR FEEL ABOUT YOU? Brand Response
Convert Brand response to create an intense, active relationship between brand and the consumers. WHAT ABOUT YOU AND ME? Associations
Customer Based Brand Equity Pyramid
Resonance
4. Relationships
Judgments
3. Response
Feelings
Performance
Imagery
2. Meaning
Salience
1. Identity
Brand Salience: relates to aspects of the awareness of the brand. Brand Recall, Recognition. Breadth and Depth of Awareness: it is important to have high levels brand awareness under a variety of conditions.
Depth of Awareness: Likelihood that a brand element will come to mind and the ease with which it does so. Breadth of Awareness: The range of purchase and usage situations in which the brand elements comes to mind.
Product Hierarchy has important implication for how to improve brand awareness. It contains schematic depiction of possible hierarchy that May exist in consumers? mind
Beverages Water Flavored Non Alcoholic Milk Juices Hot Beverages Soft Drinks Alcoholic
Wine
Beer
Distilled Spirits
Organization of the product category hierarchy that prevails in memory plays an important role in consumer decision making. Highly salient brand is the one which has both depth and breadth of brand awareness. It should be developed in such a manner that customers always make sufficient purchases as well always think of the brand across a variety of settings in which it could be employed or consumed.
Brand Performance: Designing and delivering a product that fully satisfies consumer needs and wants. Product itself is at the heart of brand equity
To what extent does the brand satisfy utilitarian, aesthetic and economic needs and wants. Different performance dimensions can serve as a means to differentiate the brand.
Resonance
Judgments
Feelings
Performance
Imagery
2. Meaning
Salience
Different types of attributes and benefits that often underlie brand performance;
1. Primary ingredients and supplementary features 2. Product reliability, durability and serviceability 3. Service effectiveness, efficiency and empathy 4. Style and Design
5. Price
Some attributes are essential ingredients necessary for For a product to work. Other attributes are supplementary features that allow for customization and more versatile, personalized usage. These attributes vary by product or service category Some categories have few ingredients or features; Bread Some categories have many essential ingredients but few features; Oven – many optional features.
Some categories have numerous ingredients and features Music Player – multiple options
Brand Imagery: deals with extrinsic properties of the product or service, including the way in which the brand attempts to meet customer?s psychological and social needs. Brand Imagery is how people think about a brand abstractly rather than what they think the brand actually does.
Resonance
Judgments
Feelings
Performance
Imagery
2. Meaning
Salience
It refers to more intangible aspects of the brand. Imagery associations can be formed directly or indirectly. Directly: customer experience, contact with product, usage situations etc.
Indirectly: through the desirous depictions communicated in brand advertising or some other sources of information.
Many types of intangibles can be linked to a brand:
User Profile Purchase and Usage Situations Personality and Values History, Heritage and Experiences
Brand Judgments: Focus on customer?s personal opinions and evaluations with the brand. Brand Judgment involve how a customer puts together all different performance and imagery associations of the brand to form different kinds of opinions.
Resonance Judgments Feelings
3. Response
Performance
Imagery
Salience
Some of the brand judgments that are important to Building a strong brand are: Quality Consideration Credibility User Profile
Brand Quality: is the attitude towards brand performance and its match with the perceived quality expectations Brand attitudes are important because they often form the basis for actions and behavior that consumers take with the brand. Brand Credibility: refers to the extent to which the brand As a whole is seen as credible in terms of three dimensions
Perceived expertise: competent, innovative, market leader
Trustworthiness: dependable and keeping customer Interests in mind
Likeability: Fun, interesting and worth spending time with Brand Consideration: it is more than mere awareness Consideration depends on how personally relevant customers find the brand OR The extent to which customers view the brand as being appropriate and meaningful to themselves. Customers make an overall appraisal as to whether they Have any personal interest in a brand AND Whether they should ever buy a brand
Brand superiority: relates to the extent to which customers view the brand as unique and better than Others. Brand superiority: relates to the extent to which customers view the brand as unique and better than Others. Superiority is intensely critical in terms of building intense and active relationships with customers and depends on Number of unique brand association that make up the Brand image.
Brand Feeling: are customers emotional response and reactions with respect to the brand. Brand feelings also relate to social currency evoked by the brand. Feelings that can be evoked by the various marketing Programs can be Warmth, Fun, Excitement, Security, Social Approval, Self Respect etc.
Resonance
Judgments
Feelings
3. Response
Performance
Imagery
Salience
Brand Resonance: refers to the nature of the relationship and the extent to which customers feel that they are IN SYNC with the brand.
Resonance is characterized in terms of intensity, or the depth of the psychological bond and the level of activities engendered by this loyalty. (repeat purchases, referrals)
Resonance can be broken down into four categories: Behavioral Loyalty Sense of Community Attitudinal Attachment Active Engagement
Behavioral Loyalty is necessary but not sufficient for resonance to occur. Some customers may buy out of necessity because the brand is the only product being stocked or easily available or only one that they can afford. To create resonance there needs to be a strong personal attachment. (Attitudinal Attachment) The brand may also take on broader meaning to the customers in terms of sense of community.
Identification with a brand community may reflect an important social phenomenon whereby customers feel a kinship or affiliation with others associated with the brand Strongest affirmation of brand loyalty is when customers are willing to invest time, energy, money or other resources in brand beyond those spent during purchase
Choosing Brand Elements to Build Brand Equity
Brand Elements are also called brand identities. These are trademarkable devices that serve to identify and differentiate the brands. Main Brand elements are: Names Jingles Logos Symbols Characters Signage Slogans
Packages
Spokespersons
These are independent of the decisions made about the product and how it is marketed.
Brand Elements are chosen to enhance brand awareness, facilitate the formation of strong, favorable, and unique brand associations; OR
Elicit (draw out) positive brand judgments and feelings.
Criteria for choosing Brand Elements There are six criteria in choosing brand elements Memorability: Easily recognized; Easily Recalled Meaningful: Descriptive; Persuasive Likability: Fun and Interesting; Rich visual and verbal imagery Transferability: within and across product categories; across geographical boundaries and cultures Adaptable: Flexible and Updatable
Protectable: Legally and Competitively
Memorability Intrinsic nature of brand elements may make them more attention getting and easy to remember.
All of these to contribute to brand equity
Meaningfulness Elements could be chosen whose inherent meaning enhances the formation of brand associations.
Important aspects of meaning of a brand element are the extent to which it conveys; General information about the nature of the product category: Suggesting something about product category Likelihood of consumer rightly identifying the product Specific Information about particular attributes and benefits of the brand: Product ingredients; kind of personality who might use etc…
Likeability The associations suggested by a brand element may not always related to product. Brand elements can be chosen that are rich in visual and verbal imagery. They may inherently denote fun and interest.
Memorability, Meaningful and Likeability; the set offers advantages of Recognition and Awareness: Consumers often do not examine much information in making purchase decision Reduce the burden on Marketing Communications Transferability Usefulness of the brand element for product category or line extension. The less specific the name, the more easily it can be transferred across categories.
Reliance connotes a feeling of security and can be extended to variety of products related to safety and security. Transferable across geographic boundaries Depends on cultural content and linguistic qualities of the brand elements. Using non meaningful names which do not have any inherent meaning can be transferred easily.
Pepsi marketed its products in China with the slogan “Pepsi Brings You Back in Life”, but the slogan in Chinese really meant
“Pepsi Brings Your Ancestors Back from Grave”
A hair product company introduced the Mist Stick, a curling iron rod, in Germany. Later on the company found out that mist is slang used for Manure in German. An American Company sold Baby food in Africa, the packaging had Pictures of Babies on the pack.
Company failed and found out that as Africans could not read, African companies put pictures on the label of what is inside the pack.
Companies must review all their brand elements for cultural meaning before introducing the brand into a new market.
Adaptability Because of the changes in consumer values and opinions, or simply because of a need to remain contemporary, brand elements often must be updated over the time.
Protectable Choose brand elements that can be legally protected on an international basis
Formally register them with the appropriate legal bodies
Vigorously defend trademarks from unauthorized competitive infringement. It is important to reduce the likelihood that competitors can imitate the brand creating a derivative based on salient prefixes or suffixes of the name, package looks or other actions.
Procedures and Considerations for choosing Brand Elements
Brand Name captures the central theme or key Associations of a product in a very compact and Economic manner . It takes consumers to comprehend marketing communications and can range from half a minute to a few hours;
Brand names can be noticed and its meaning registered or activated in memory within just a few seconds.
Brand Names can be chosen with certain criteria in mind
Descriptive Describes function literally, generally unregisterable Suggestive Suggestive of benefit or function Compounds Combination of two or more, unexpected words Classical
Based on Latin, Greek or Sanskrit words
Arbitrary Words with no obvious tie-in to the company
Brand awareness is improved; The extent to which brand names are chosen that are; Simple and easy to pronounce or spell Familiar and meaningful
Different, distinctive and unusual
Simplicity reduces consumers? cognitive effort to comprehend and process the brand name
Short names often facilitate recall because they are easy to encode and store in the memory
Longer names can be shortened to ease recall-ability Pronounciation also affects the entry of the brand into consideration sets and the willingness of consumers to order or request the brand orally. To improve pronounciability and recall-ability marketers may seek a desirable pleasant sound in their brand names. Cultural differences may exist in brand name memorability and recall.
Chinese Speakers are more likely to recall names in visuals rather than spoken recall
Whereas, English speakers are more likely to recall the names in spoken recall.
Brand names are not restricted to letters only but can contain Alphanumerics
Naming Procedures
1. Defining the brand objective: also necessary to recognize the role of the brand within the corporate branding hierarchy and how the brand should relate to other brands and products 2. Generating as many names and concepts as possible any potential source of names can be used; Company management and employees, existing and potential customers, intermediaries, Ad agencies, professional consultants and so on.
3. Names must be screened based on branding objectives and marketing considerations.
Elimination can be based on
Names that have unintentional double meanings Names that are patently unpronounceable, already in use or too close an existing name Names that have obvious legal complications Names that represent an obvious contradiction of the positioning
4. Collecting more extensive information on each of the final 5-10 names.
Before spending large amounts of money on consumer research it is advisable to do an extensive international legal search
5. Consumer research to confirm management expectations as to the memorability and meaningfulness of the names.
6. Based on all the information management can choose the name that maximizes the firm?s branding and marketing objectives and register.
Brand Logos can be used as means to indicate origin, ownership or association.
logos may range from corporate names and trademarks written in a distinctive form to;
Distinctive abstract logos completely unrelated to corporate name or activities. Strong word marks; BATA, COCA-COLA, KIT-KAT Abstract Logos; Mercedes Benz, Nike, Olympic
Non-word mark logos are often called as symbols. Because of their visual nature, logos and symbols are often easily recognizable. Logos are non-verbal thus can be updated as needed over time and can be well transferred across culture They can be relevant and appropriate in a range of product categories.
Brand characters Represent a special type of brand symbol that takes a human or real life characteristics. These are introduced through advertising and can play a central role in subsequent campaigns and package design.
Characters can be animated of live-action figures often colorful or rich in imagery.
Characters can help to break through the marketplace clutter
Help in easily communicating key product benefits. The ability of a consumer to have a relationship with a brand can be easier when the brand literally has a humanistic character Brand characters also do not have direct product meanings so they can be transferred easily across product categories.
Characters often must be updated over time so that their and personality remains relevant to the target market.
Brand Slogans
Slogans are short phrases that communicate descriptive or persuasive information about the brand.
Just do it
Slogans often become closely tied to advertising campaigns and can be used as lines to summarize the descriptive or persuasive information conveyed in ads Diamonds are forever: the tagline communicates the intended ad message that Diamonds bring eternal love and never loose value.
Campaign-specific lag lines may be used to help reinforce the message of a particular campaign instead of the brand slogan for a certain period of time.
Brand Jingles
Jingles are musical messages written around the brand.
These are typically composed by professional songwriters Can be thought as extended musical slogans
Because of their musical nature jingles are not easily transferrable as other brand elements.
Jingles can communicate brand benefits but often convey product meaning in a fairly abstract manner.
The potential associations that might occur for the brand from jingles are feelings, personality or other intangible benefits.
Because of their catchy nature, consumers are likely to mentally rehearse or repeat the jingle even after seeing or hearing the ads. This provides an additional encoding opportunities and increasing memorability.
A well known jingle can serve as a foundation for advertising for years.
Brand Packaging
Packaging involves the activities of designing and producing containers or wrappers for a product. Packaging should achieve certain objectives: Identify the brand
Convey descriptive and persuasive information
Facilitate product transportation and protection
Assist at-home storage
Aid product consumption
The aesthetic and functional components of packaging must be chosen correctly.
Aesthetics: relate to package?s size and shape, material colour, text and graphics. Functional: easy to hold, easy to open, resealable, tamperproof, storage, reusable. One of the strong associations that a consumer has with the brand is the look of its packaging.
New packages can also expand a market and capture new market segments.
Package design has also become important as: Brand proliferation is increasing and Advertising is becoming more expensive. For many consumers, the first encounter with a new brand may be on the shelf of a store. Few product differences exist in some categories, packaging innovations can provide an edge
Packaging also means having a strong appeal on the shelf and standing out from the clutter.
Packaging is also called as; „Last five seconds of marketing?
„Permanent Media?
„The last salesman?
Putting it all together
It is necessary to „mix and match? different brand elements to increase brand equity. Marketers must choose to mix brand elements to achieve different objectives. Brand elements must be chosen to reinforce each other by shared meaning and marketing programs.
Designing Marketing Programs to Build Brand Equity
Judicious selection of brand elements can make an important contribution to customer based brand equity. But the primary input comes from marketing activities related to the brand and the corresponding marketing programs.
Marketing activities in general and product, price and distribution strategies in particular can build brand equity by way of: Enhancing brand awareness, improve brand image, eliciting positive brand response and increasing brand resonance
Brand itself can be effectively integrated into the marketing program to maximize the creation of brand equity
Changes in the economic, technological, socio-cultural, and competitive environments have forced marketers to adopt new marketing approaches.
Kotler identifies certain major drivers of new economies as; Digitalization and connectivity Disintermediation and re-intermediation
Customization New customer and company capabilities.
New Capabilities in New Economy
Consumers A substantial increase in customer power A greater variety of available goods and services A greater amount of information , practically about anything
A greater ease in interacting, placing and receiving orders.
An ability to exchange and compare notes, experiences or information on various issues , even with strangers.
Companies
Can collect full and richer information about market, customers, prospects and competitors.
Can facilitate transaction efficiency Can customize their offerings and services to individual customers
Marketers are abandoning the mass marketing approach to implement new approaches
Companies are adopting Personalized marketing in the form of :
Experiential Marketing: Pine and Gilmore It promotes a product by not only communicating product?s features and benefits but also connecting it with unique and interesting experiences.
Experiential Marketing differs from traditional marketing in several distinct ways: Focuses on customer experience Focuses on the consumption situation
Views customers as rational and emotional being
Use eclectic (diverse and assorted) methods and tools
Different Types of experiences enhanced: Sense, feel, think, act and relate
Different experience providers: Communications, visual/ verbal identity and signage, product presence, co-branding, spatial environment and sales personnel.
One-to-one Marketing: Don Peppers and Martha Rogers
Basic rationale of one-to- one marketing is that consumers help to add value by providing information to the marketer; and Marketers add vale by taking that information and generating rewarding experiences for consumers. A company reduces transaction costs and maximize utility for consumers to build profitable relationships One-to-one marketing is based on certain concepts like;
Focus on individual consumers through databases Respond to consumer dialogue via interactivity Customize products and services
Most important principle of one-to-one marketing is:
Treat different consumers differently because of their different needs and their different value to the company.
Permission Marketing: Seth and Godin
Interruption marketing in terms of mass media campaigns can no longer attract customers as they may expect but not necessarily appreciate such interruptions
If a marketer wants to attract a consumer?s attention, they first need to seek his permission. Inducements for permission could be – a free sample, sales promotion, contest, discount etc. By eliciting consumer co-operation, marketer can potentially develop stronger relationships with consumers
Consumers may show a willingness to receive further communications in the future. Steps to effective permission marketing:
Offer the prospects an incentive to volunteer
Offer the interested prospect information over time
Reinforce the incentive to guarantee permission over time
Leverage the permission to change consumer behaviour towards Brand Equity.
Permission marketing can be seen as developing the consumer dialogue components of one-to-one marketing in more details.
Reconciling The New Marketing Approaches
From branding perspective new marketing approaches are useful means of thinking how to: Bring out positive brand responses and
Create brand resonance to build CBBE.
One-to-one and Permission Marketing can be effective at creating strong behavioural loyalty and attitudinal attachment. Experiential Marketing can be effective in establishing brand imagery and variety of feelings.
The product itself is at the heart of brand equity because it is the primary influence on what consumers experience With a brand,
What they hear from others
To create brand loyalty, consumers? experience with the product at least be met, if not actually surpass their expectations.
Important to know how consumers form their opinions of the quality and value of a product.
Perceived Quality and Value
Perceived quality has been defined as customers? perception of the overall quality or superiority of a product relative to; Relevant alternatives, and With respect to its intended purpose. Quality Perceptions can vary from category to category
General Dimensions of Product Quality
Performance
Levels at which the primary characteristics of the product operate.
Features Secondary elements of a product that complement the primary characteristics.
Conformance Quality Degree to which the product meets specifications and is absent of defects
Reliability
Consistency of performance over time and from purchase to purchase Durability
Expected economic life of the product
Serviceability Ease of servicing the product
Style and Design
Appearance or feel of quality
Brand Attitudes may not necessarily be based only on product performance but
May also depend on more abstract product imagery.
Reflecting the importance of product quality, companies are adopting to quality management approaches like
Quality Function Deployment, Total Quality Management Return on Quality
Marketers must take a broad and holistic approach to building brand equity McKinsey Consulting has Developed a Model for 3-D Marketing
Model proposes three product or service benefit dimensions that are likely to be expected by a customer
Benefits Functional Benefits: Product and performance attributes; value, quality so forth
Process Benefits: Ease of access to product information, broad product selection, simplified/ assisted decision making, convenient transaction, automatic product replenishment Relationship Benefits: Value based on personalized service, strong emotional relevance, information sharing that creates value exchange, differentiated loyalty rewards
Value Chain Concept
Consumers often combine quality perceptions with cost perceptions to arrive at an assessment of the value of a product. Costs are not restricted to the actual monetary price but may also reflect opportunity costs of time, energy and psychological involvement in the decision making.
Michael Porter has proposed the value chain as a strategic tool for identifying ways to create more customer value.
The value chain identifies FIVE primary value creating activities; and FOUR Support Activities.
Value Creation Inbound Logistics Outbound Logistics
Support Activities
Infrastructure
Human Resource
Marketing Technology Development
Sales
Procurement Services
Companies can create competitive advantages by partnering with other members of the values chain to improve the performance of the customer value delivery system.
From a branding perspective, various mentioned activities are potentially a means of creating strong, favourable, and unique brand associations that can serve as sources for brand equity. This broader set of activities and its integration is relationship marketing
Important Relationship Marketing Issues
Mass Customization
Making products to fit the customer?s exact specification Dell, Levi?s, Fashion Markets, Nike
After Marketing Those marketing activities that occur after customer purchase
It can involve the sale of related, complementary products
Instruction Manuals for many products.
Loyalty Programs
These have become a popular means to create a stronger tie to customers. The purpose is to identify, maintain and increase yield From company?s best customers through
Long term, interactive, value added relationship
BRAND LOYALTY VERSUS PERCEIVED VALUE LOYALTY
Consumers look for “perceived value” and not at price alone as Value is a blend of quality and price. A consumer is willing to pay a certain price for a certain quality. Different segments of consumers look at different „perceived value? points and not just price points. This is the tangible part. The intangible part of perception, which is a combination of image and emotional value, also contributes to consumers? purchase and consumption decisions.
The tangible value and the intangible perception make up the „perceived value? of any brand in the minds and hearts of the consumers.
Ultimately it is the „perceived value points? that the consumer looks for and the wars that are actually won are “perceived value” wars and not „price? wars.
Price wars may be successful in certain categories like; Hindustan Lever and Procter and Gamble in the prices of their brand Wheel, Ariel and Tide to snatch back market share from brands like Ghadi detergent.
The same companies have also aggressively priced Sunsilk and Clinic and are resorting to aggressive marketing for brands like Head & Shoulders and Pantene to take back market share from brands like Chik and Nyle. They have also changed the proportion of sachets and bottles to increase consumption. Categories like TV a consumer evaluates the brands in terms of Perceived value. It is not enough to have innovative exchange schemes, unique tie-ups or liberal consumer financing. But combined with sound positioning and servicing,
Consumers are more loyal to „perceived value? than to „brands?. If a brand consistently delivers „perceived value? over a period of years, it may attain brand loyalty.
Ways to Acquire Perceived Value Points and Brand Loyalty
Marketers must focus on the consumer and not on the competition. Comparing and contrasting with competition, and even following the price cut road to a bottomless pit, is suicidal.
Companies must focus on its consumer segments and customize its offerings.
Unwarranted and adhoc promotions, that are actually disguised price cuts reduce the equity and the image of the brand, making the consumer focus on the „deal? rather than the branded product. It is important to create disparity through positioning, core values and enhancing the „perceived value? in minds and hearts of consumers. Companies may launch a new brand or a variant at a low, medium or high „perceived value point?. This is consciously done to focus on a given segment.
It would be prudent to have various brands or variants in the portfolio, allowing the consumer to choose which segment they would like to participate in.
Pricing Strategies
From brand equity perspective, it is important that consumers find the price of the band appropriate and reasonable; Different kinds of price perceptions that consumers might form and different pricing strategies that a firm may adopt leads to desired brand equity.
Pricing strategy can dictate how consumers categorize the price of a brand as low, medium or high priced
There could be various price tiers which are acceptable to the consumers
Specialty
Excellent
Very Good
Good
Commodity
Fair
Price
Within any price tier there is a range of acceptable prices a customer may pay; these are called PRICE BANDS
PRICE BANDS provide managers with some indication of the flexibility and breadth they can adopt in pricing their brands within a particular price tier. In many product categories consumers may infer quality of a product on the basis of its price. Companies have adopted VALUE BASED PRICING STRATEGIES- attempting to sell the right product at right price.
The objective of value pricing is to uncover the right blend of;
product quality,
product cost
product price,
These fully satisfy the needs and wants of the consumers and the profit targets of a firm.
An effective value pricing strategy should strike the proper balance among Product design and delivery Product costs Product prices
Proponents of value pricing point out that the concept does not mean selling stripped-down versions of product at lower prices but Consumers are willing to pay premiums when they perceive added value in products and services
The product costs can be lowered for a successful value-pricing strategy
Cost savings could be achieved through
Productivity gains, Outsourcing
Material Substitution
Product Reformulation
Process changes,
Contemporary Pricing Strategy- Everyday Low Pricing
Companies charge a constant low price with no temporary discounts
An Every Day Low Pricing (EDLP) strategy is more popular with shoppers, than one driven purely by promotions.
Advantages
? Reduces price wars ? Reduces advertising ? Improves customer service ? Increases overall profit margins
? Predatory Pricing: Selling at unreasonably
low prices to lessen competition.
? Price Discrimination: The use of different
prices for different customers.
? It is illegal if a price advantage is granted to one,
but not another, where both compete and the articles are similar.
? Granting promotional allowances must be done
on a proportionate basis to all customers.
Pricing Strategy Improvement
1. Base pricing strategies on sound research in order to understand relevant price factors.
2. Continuously monitor pricing decisions because they often help define company image. 3. Remember that consumers have trouble recognizing slight price differences.
4. Remember that consumers evaluate prices comparatively. They often use a sense of what they think the item should cost as a benchmark.
5. Recognize that buyers typically have a range of acceptable prices defined by upper and lower limits.
6. Understand the importance of relative price to buyers – the relationship between a price and your competitors? price. 7. Understand the importance of price information and its effects on differentiating products within a product line.
8. Recognize that price elasticity vary – it is easier to lose customers to price increases then gain them from price decreases.
Branding Strategies
A branding strategy can be seen as both DEPTH and BREADTH of the company offerings. A branding strategy can be seen both as deep and broad if the firm has large number of brands; Many of which have extended to various product categories
The Offering Mix
(Portfolio)
The totality of a company?s offerings is known as its product or service offering mix or portfolio • Consists of distinct offering lines (product line width)
Each line consists of individual offers or items (product line depth)
?
The Offering Portfolio
Bundling – enhancing the offering mix by providing two or more product or service items as a “package deal” McDonald?s “value meal”
IBM hardware, software, and maintenance contracts
Brand Growth Strategies
New products New Brand Existing products Fighting/Flanker Brand Strategy Line Extension Strategy
New Brand Strategy
Existing Brand Extension Strategy Brand
Brand extension
Product categories (Brand –Product Relationships)
1
Brand
ProductBrand Relationship
2
…..
N
A
CATEGORY EXTENSION
B
LINE EXTENSION
Rows : Number and nature of products sold under a company?s Brands Columns : Number and nature of brands marketed in each category.
LINE EXTENSIONS
BRAND EXTENSIONS
Horizontal Extension
Vertical Extension
Another Product Class
Range Brand
CoBranding
Up from Core Brand
Down from Core Brand
Line Extension Strategy
Adding offerings with the same brand in a product class that an organization currently serves… Respond to customers’ desire for variety Eliminate gaps in the product line Lowers advertising and promotion costs Consider possibilities of product cannibalism and proliferation of offerings (Coke and Vanilla Coke)
Brand Extension Strategy
The practice of using a current brand name to enter a completely different product class
Reduced risk due to brand equity Success depends on perceptual fit with the original product class
e.g., Yamaha makes motorcycles, sound equipment, computer peripherals, and musical instruments
? Five Stages Model of Brand Extension
Strategy
Planning
Sustainability
Customer Loyalty
Brand Equity
Building a Value Fit
Positioning
Five Stages Model of Brand Extension Strategy
? The process requires a lot of decisions at the top
and managerial levels for the sustainability of the brand and of course for greater returns.
? Planning: comprises of comprehensive R&D, where
customer’s needs are tested and their tastes and preferences being investigated thoroughly and bringing in the right product in the market.
Positioning: requires the recognition to touch the hearts
and minds of the targeted group which creates Brand Loyalty and in turn Brand preference i.e. consumer reliance on previous experiences with a product to choose that product again. Sustainability of the brand as per its importance and impact on ROI would require the brand mangers to check the pulse of the market regularly to see if it’s giving the same kind of quality and benefits consumers wanted.
Building a value fit with what consumers’ perceptions And expectations are and meeting them by creating a Unique value for them.
Brand equity is the most important as everything being done from step A to last one would revolve around the financial stability of the brand and the financial value it had in the market as compare to its rivals.
Brand Extension Strategy: Co-branding
Co-branding Pairing two brand names of two manufacturers on a single product
Flanker/Fighting Brand Strategy Flanker Brand Strategy
Involves adding a new brand on the high or low end of a product line based on a price-quality continuum
Fighting Brand Strategy Involves adding a new brand whose sole purpose is to confront competitive brands in a product class being served by an organization.
Cash Cows: Some brands may be kept in-spite of decreasing sales because; They still manage to hold sufficient number of customers and maintain their profitability with virtually no marketing support. Low- End Entry level of High- End Prestige Brands: Introducing line extensions or brand variants in a product category that vary in price and quality.
These extensions / sub-brands leverage associations from parent / other brands while distinguishing themselves on the basis of their price and quality dimensions.
The end points of the brand line often play a specialized role.
New Brand Strategy
Involves the development of a new brand and often a new offering for a product class that has not been previously served by the organization.
Most challenging strategy Most costly
e.g., Lexus by Toyota
Managing the brand Over the Time Brand equity must be actively managed over time by Reinforcing the brand meaning and adjusting the marketing programs to identify new sources of Brand Equity. Managing the brand with consistency in amount and nature of support. Being consistent in managing brand equity may require numerous tactical shifts and changes in order to maintain the strategic thrust and direction of the brand
The tactics may be most effective for a particular brand at any one time can not be as effective during the other Over the time : Price may move up or down
Product features may be added or dropped
Ad campaigns may employ different creative strategies and slogans
Different brand extensions may be introduced or withdrawn
The mentioned changes may take place in order to create the same desired knowledge structures in customer?s mind.
Consistency should be viewed in terms of strategic direction and not necessarily any particular tactics employed by the supporting marketing programs. In certain cases there are changes in: Consumers, competition or the company that makes the strategic positioning of the brand less powerful.
Revitalizing the Brand
A major overhaul of a brand, starting with its positioning and proceeding through creative regeneration of the brand identity A brand revitalization program is involving strategies to recapture lost sources of brand equity and; Ways to identify and establishing new sources of brand equity for the brand or the brand portfolio. Brands sometimes have to return to their roots to recapture lost sources of equity
By surveying consumers who have long-term relationships with older brands, the following data can be mined: What are the points of differentiation, or unique selling proposition of the brand, per their perception? What are the brand?s Enjoyment assets? How many pleasant associations and experiences consumers have had with the brand? What are the negatives, if any, associated with the brand?
What is the perceived value of the brand? Is the perceived value of the brand still active, or is it dormant? How relevant is the brand?
What, in the consumers? perception, can the brand do for them to add value or more desirable attributes?
How much loyalty is there to the brand?
Brands are most likely to respond to Revitalization efforts
That have clear and relevant values that have been left dormant for a long time. Have not been well expressed in the marketing and communication recently Have violated by product problems
Revitalizing the Brand Involves 1. Refocus Entire Organization
2. Restore Brand?s Relevance
3. Reinvent Brand Experience 4. Rebuild Brand Trust 5. Realize Global Alignment
Revitalization Strategies involve a continuum with
PURE BACK TO BASIC at one end to PURE REINVENT on the other The trick is to place the brand in the center. The “1080-10” rule of focus can be useful : Acknowledge your heritage (10%) Address the needs of today (80%) Look forward to the future (10%)
Identifying Additional or New Usage opportunities
Brand may be seen as useful only in certain times and At certain times. True in cases if a brand has strong associations to particular usage situations. Marketing programs can be aligned and designed to increase additional or new usage opportunities by: Communicating to consumers as to the appropriateness and advantages of using the brand more frequently in existing situations or in new situations
Another way to increase usage is to provide consumers with better information about ;
When the product was first used or would need to be replaced, or; The current level of product performance.
Brand Revitalization Strategies
Refresh old sources of brand equity
Expand depth and breadth of awareness and usage of brand Increase quantity of consumption (how much)
Create new sources of brand equity
Improve strength, favorability and uniqueness of brand associations
Bolster fading associations Neutralize negative associations Create New Associations
Increase frequency of consumption (how often)
Increase quantity of consumption (how much)
Increase frequency of consumption (how often)
Neutralize negative associations
Bolster fading associations
Create New Associations
Identify additional opportunities to use brand in same basic way Identify completely new and different ways to use brand
• Retain vulnerable customers • Recapture lost customers • Identify neglected segments • Attract new customers
Measuring Brand Equity
? Multi-dimensional concept ? Many different measures required ? The ultimate value of a brand depends on the underlying components of brand knowledge and sources of brand equity
Comparative Methods
? Brand-based comparative approaches
? Marketing-based comparative approaches ? Conjoint analysis
Brand-Based Approaches
? The marketing element under consideration is fixed. ? Consumer response is examined based on changes in
brand identification.
? Application example: Blind testing ? Advantage: Isolates the value of the brand ? Disadvantage: The totality of what is learned depends on
how many applications are examined.
Marketing-Based Approaches
? The brand is held fixed and consumer response is
examined based on changes in marketing programs.
? Applications: Explore price premiums’ effect on switching,
consumer evaluations of marketing activities, brand extensions, etc.
? Advantage: Ease of implementation ? Disadvantage: Difficult to determine whether consumer
responses are caused by brand knowledge or generic product knowledge
Conjoint Analysis
? A survey-based multivariate technique that enables marketers to profile the consumer decision process with respect to products and brands ? Helps researchers determine the trade-offs consumers make between brand attributes ? Applications: Assess advertising effectiveness and brand value; analyze brand/price trade-off ? Advantage: Allows for different brands or different aspects of the product to be analyzed simultaneously ? Disadvantage: May violate consumers’ expectations
based on what they already know about brands
Holistic Methods
? Attempt to place an overall value on the brand
in either
abstract utility terms or concrete financial terms
? Net out various considerations to determine the unique
contribution of the brand
? Holistic methods: ? Residual approaches ? Valuation approaches
Free Association
? Here subjects are asked what comes to mind when they think of the brand, without any more specific probe or cue than perhaps the associated product category: What does the Rolex name mean to you? What comes into mind when you think of Rolex watches.
? Free association can also provide some rough indication of the relative strength, favorability, and uniqueness of brand associations.
Free Association
? To better understand the favorability and uniqueness of the associations, one could ask followup questions:
“What do you like best about Rolex? “What are its positive aspects?” “What do you dislike?” “What are its disadvantages?” “What do you find unique about the Rolex brand?” “How is it different from other brands? In what ways is it the same?”
Free Association
ATTRIBUTES
User Imagery Western, American, blue collar, hard-working, traditional, strong, rugged, and masculine Usage Imagery Product-Related Blue denim, shrink-to-fit cotton fabric, button-fly, two-horse patch, and small red pocket tag
BENEFITS
Appropriate for outdoor work and casual social situations
Brand Personality
LEVI’S
Honest, classic, Contemporary, approachable, independent, and universal
High quality, long lasting, and durable Functional
Comfortable fitting and relaxing to wear
Experiential
Feelings of self-confidence and self-assurance
Symbolic
Projective Techniques
? Under some situations, consumers may feel that it would be socially unacceptable or undesirable to express their true feelings: e.g. unwilling to say a brand enhances self-esteem. ? Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express them.
? Comparison Tasks:: Here we ask consumers to convey their impressions by comparing brands to people, countries, animals, activities, fabrics, occupations, cars, magazines, vegetables, nationalities, or even other brands.
? Completion and Interpretation Tasks: This technique uses incomplete or ambiguous stimuli to gauge consumer thoughts and feelings. One approach is “bubble exercises” which show people buying or using certain products or services. Respondents are asked to fill in the empty bubbles.
Brand Personality and Values
? Brand personality is the human characteristics or traits that consumers can attribute to a brand. ? Jennifer Aaker created a brand personality scale that reflected the following five factors of brand personality: Sincerity (down-to-earth, wholesome, and cheerful) Excitement (daring, spirited, imaginative, and up-to-date) Competence (reliable, intelligent, and successful) Sophistication (upper class and charming) Ruggedness (outdoor and tough)
Quantitative Research Techniques
Although qualitative measures are useful to identify the range of possible associations to a brand and their characteristics in terms of strength, favorability, and uniqueness, marketers
often want a more definitive portrait of the brand to allow them to make more confident decisions.
Quantitative research typically employs various types of scaled questions from which researchers can draw numerical summaries:
? Brand Awareness ? Brand Image ? Brand Responses ? Brand Relationships
Aided or Unaided Recall Beliefs or perceptual mapping Purchase Intentions Behavioural Loyalty
? To measure sources of brand equity, we must
understand two key areas: how consumers shop for and use products and services, and what consumers know, think, and feel about various brands.
? Qualitative methods allow marketers to probe
consumers either through direct questions or through tasks that indirectly reveal perceptions and attitudes. ? Quantitative methods, which typically use numerical rating scales or rankings, include measures of recognition, aided and unaided recall, beliefs, attitudes, intentions and behaviors toward the brand .
? Both methods enable marketers to construct “mental maps” that model consumers’ feelings, beliefs, and attitudes regarding a brand.
Residual Approaches
? Examine the value of the brand by subtracting
consumers’ preferences based on physical product attributes alone from their overall brand preferences
? Advantage: Useful benchmark for interpreting brand
equity, especially from a financially oriented perspective
? Disadvantage: Static view. Limited diagnostic value for
strategic decision making
Valuation Approaches
? Attempt to place a financial value on brand equity for
accounting purposes
? Useful in cases of mergers and acquisitions, brand
licensing, fund raising, and brand management decisions
? Valuation approaches: ? Accounting background ? Historical perspectives ? General approaches ? Interbrand’s brand valuation methodology
Accounting Background
? Intangible assets are typically lumped under the
heading of goodwill and include things such as patents, trademarks, and licensing agreements, as well as “softer” considerations such as the skill of the management and customer relations.
? In an acquisition, the goodwill item often includes a
premium paid to gain control, which, in certain instances, may even exceed the value of tangible and intangible assets.
Historical Perspectives
? In Australia Rupert Murdoch’s News Corporation included a valuation of some of its magazines on its balance sheets in 1984. ? British firms used brand values primarily to boost their balance sheets. ? In the United States, generally accepted accounting principles (blanket amortization principles) mean that placing a brand on the balance sheet would require amortization of that asset for up to 40 years. Such a charge would severely hamper firm profitability; as a result,
firms avoid such accounting maneuvers.
General Approaches
? In determining the value of a brand in an acquisition or merger, firms can choose from three
main approaches:
? Cost approach: Brand equity is the amount of money
that would be required to reproduce or replace the brand
? Market approach: The present value of the future
economic benefits to be derived by the owner of the asset
? Income approach: The discounted future cash flow from
the future earnings stream for the brand
Interbrand’s Brand Valuation
? Assumes that brand value is the present worth of the benefits of future ownership ? Follows five valuation steps:
? Market segmentation ? Financial (role of branding) analysis ? Demand (brand strength) analysis ? Competitive benchmarking ? Brand value calculation
? Brand value calculation : Calculate the brand value as the net present value (NPV) of the forecast brand earnings, discounted by the brand discount rate
Brand leadership – the evolving paradigm
Classic brand management Brand leadership
From tactical to strategic management PERSPECTIVE
BRAND MANAGER STATUS Tactical and reactive Strategic and visionary Higher in the organization, longer time horizon
Less experienced, shorter time horizon
CONCEPTUAL MODEL
Brand image
Brand equity
FOCUS
Short-term financials
Brand equity measures
Brand leadership – the evolving paradigm
Classic brand management Brand leadership
From tactical to strategic management
PRODUCT-MARKET SCOPE
Tactical and Single products and markets reactive
Multiple products and markets
NUMBER OF BRANDS
Focus on single brands
Category focus – multiple brands
COUNTRY SCOPE
Single country
Global perspective
COMMUNICATION FOCUS
External/customer
Internal as well as external
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