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Chapter 5

There are several ways that marketing activities can build brand equity, including through product, pricing, and distribution strategies. Marketers must integrate these activities to enhance brand awareness, improve brand image, elicit positive brand responses, and increase brand resonance with customers. With the rise of digital technologies and more empowered customers, marketers are increasingly moving away from mass-market strategies to more personalized approaches focused on customer experiences and one-to-one relationships.

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71 views

Chapter 5

There are several ways that marketing activities can build brand equity, including through product, pricing, and distribution strategies. Marketers must integrate these activities to enhance brand awareness, improve brand image, elicit positive brand responses, and increase brand resonance with customers. With the rise of digital technologies and more empowered customers, marketers are increasingly moving away from mass-market strategies to more personalized approaches focused on customer experiences and one-to-one relationships.

Uploaded by

fariha ether
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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.

.
• How do marketing activities in general—and product, pricing,
and distribution strategies in particular—build brand equity?
• How can marketers integrate these activities to enhance
brand awareness, improve the brand image, elicit positive
brand responses, and increase brand resonance?
The four major drivers of this new economy are:
.
1. Digitalization and connectivity
(internet, intranet, mobile devices)

2. Disintermediation and reintermediation


(middlemen)

3. Customization and customerization


( tailored products and ingredients provided to customers to make their own
products)

4. Industry convergence
(blurring of industry boundaries (laptops+tablets+GSM phones etc…)
Customers: - Have more power
.
- Have a large variety of available goods and
services
- Can obtain more information
- Can easily interact with marketers in placing
and receiving orders
- Can interact with other consumers and
compare notes

Companies: - Can collect fuller and richer information


about markets, customers, competition
- Better communication technologies and
transaction efficiency
- Can use the internet and e-mail to send
promotional messages to customers
- Can customize their offerings to individual
customers
Implications for the
. Practice of Brand
Management
• Number of implications for
. the practice of brand
management. Marketers are
increasingly abandoning the
mass-market strategies that
built brand powerhouses in
the 1950s, 1960s, and 1970s
to implement new
approaches.
• Even marketers in staid,
traditional industries are
rethinking their practices and
not doing business as usual.

5.5
.
There is a move away from mass-market strategies

• The 21st century has forced marketers to change how


they develop their marketing programs.

• Integration and Personalization are crucial factors


in building and maintaining strong brands
brand building efforts

Product

marketing activities
Product
Integrating Marketing Programs and
Activities
• Creative and original thinking is necessary to
create fresh new marketing programs that
break through the noise in the marketplace to
connect with customers.
• Marketers are increasingly trying a host of
unconventional means of building brand
equity.
.
.

• Experiential marketing
• One-to-One marketing
• Permission marketing
• Expression of individuality
. • Consumer desire for personalization

Experiential marketing connects a product to unique and interesting experiences

“The idea is not to sell something, but to demonstrate how a brand


can enrich a customer’s life”
The Fundamental Strategies of One-to-One Marketing:
- Focus on individual consumers through consumer databases
- Respond to consumer dialogue via interactivity
- Customize products and services

Marketing to consumers only after gaining their express permission

“anticipated, personal and relevant” - Godin


Personalizing Marketing
• All of these approaches are a means to create deeper, richer,
and more favorable brand associations.
• Relationship marketing has become a powerful brand-
building force.
– Can slip through consumer radar
– May creatively create unique associations
– May reinforce brand imagery and feelings
• Nevertheless, there is still a need for the control and
predictability of traditional marketing activities.
• Models of brand equity can help to provide direction and
focus to the marketing programs.
Experiential Marketing
• Focuses on customer experience
• Focuses on the consumption situation
• Views customers as rational and emotional
elements
• Uses electric methods and tools
One-to-One Marketing:
Competitive Rationale
• Consumers help to add value by providing
information.
• Firm adds value by generating rewarding
experiences with consumers.
– Creates switching costs for consumers
– Reduces transaction costs for consumers
– Maximizes utility for consumers
One-to-One Marketing:
Consumer Differentiation
• Treat different consumers differently
– Different needs
– Different values to firm
• Current
• Future (lifetime value)
• Devote more marketing effort on most valuable
consumers (and customers)
One-to-One Marketing: Five Key Steps
• Identify consumers, individually
and addressably
• Differentiate them by value and
needs
• Interact with them more cost-
efficiently and effectively
• Customize some aspect of the
firm’s behavior
• Brand the relationship
Permission Marketing (Seth Godin)
• “Encourages consumers to participate in a
long-term interactive marketing campaign in
which they are rewarded in some way for
paying attention to increasingly relevant
messages.”
– Anticipated
– Personal
– Relevant
• Permission marketing can be contrasted to
interruption marketing.
Permission Marketing
Five Steps in Permission Marketing
1. Offer the prospect an incentive to volunteer.
2. Offer the interested prospect a curriculum over
time, teaching consumers about the product.
3. Reinforce the incentive to guarantee that prospect
maintains the permission.
4. Offer additional incentives to get more permission
from the consumer.
5. Over time, leverage the permission to change
consumer behavior toward profits.
Integrating the Brand
Into Supporting Marketing Programs
Supporting marketing mix should be designed to enhance
awareness and establish desired brand image.

• Product strategy
• Pricing strategy
• Channel strategy
.
Product Strategy
• Perceived quality and value
– Brand intangibles
– Total quality management and return on quality
– Value chain
• Relationship marketing
– Mass customization
– Aftermarketing
– Loyalty programs
“At the heart of a great brand is invariably a great
product”
• How do consumers form their opinions of the quality and value
of a product?
• How can marketers use the relationship marketing perspective
in formulating product strategy and offerings?
.
.
Dimensions of Quality:

• Performance
• Features
• Conformance Quality
• Reliability
• Durability
• Serviceability
• Style and Design
Brand Intangibles
speed, accuracy, delivery and installation, courtesy, helpfulness of
customer service and training
.
.

“By improving the fuller customer experience, companies


can keep consumers happier and hold on to them longer”
(McKinsey)
.
current customers are the key to long term brand success

- Mass Customization
Customization addresses the need for individuality

- Aftermarketing
Activities that occur after customer purchase (User Manuals, Complimentary Products)

To achieve the desired brand image, product strategies should focus on


both purchase and consumption

- Loyalty Programs
Loyalty programs offer different mixtures of services, newsletters, premiums and incentives for
a firm’s “best” customer
.
.
Pricing Strategy
• Price premiums are among the most important brand
equity benefits of building a strong brand.
• Consumer price perceptions
– Consumers often rank brands according to price tiers in a
category.
• Setting prices to build brand equity
– Value pricing
– Everyday low pricing
. Revenue generating element from of the mix

 Its belongs in the performance CBBE model( Chapter 2 )

 Consumers willing to pay price premiums , when there is a


perceived added value = Stronger brands

 Aspects of pricing Strategy :


1. Price perceptions
2. Setting prices
.
• Consumers rank brand according to prices

• Price Bands = range of acceptable prices

• price - product meaning - value and quality they received


Sell the right product and the

.
right price- to better meet
consumer needs

.
.
1. Assess what value the customer places on your brand
.
2. Look for variation in assessing customers value
3. Asses customers price sensitivity
4. Identify an optimal pricing structure
5. Consider competitors reactions
6. Monitor prices at a transaction level
7. Asses customer emotional response
8. Analyse if the returns are worth the cost
.
.
Innovations , improvements , and convenience

Outsourcing , material substitution , technology,


product reformulation , factory improvement .
Cost reductions can’t sacrifice quality

Understand what consumers are willing to pay, if


there are premiums and then adjust it for cost and
competition
.
.
Everyday base prices

Consistent low prices on major items


will bring consumers back to buy

- Forward buying versus diverting


Channel Strategy
• The manner by which a product is sold or
distributed can have a profound impact on the
resulting equity and ultimate sales success of
a brand.
• Channel strategy includes the design and
management of intermediaries such as
wholesalers, distributors, brokers, and
retailers.
.
 Marketing channels =“ a set of interdependent organizations
involved in the process of making a product / service
available for use “

 This involves designing a channel and managing


intermediaries.

 Channel design :
1. Indirect - sell through third party intermediaries
2. Direct – sell through personal contacts

 Try develop : “integrated shopping experiences “


.

-Hybrid approach = combing the both , must be careful not to


have too many not too little

- The goal is to maximize channel coverage and effectiveness


while minimizing cost and conflict
.
Manufacturers who sell directly to the public

1. Company owned stores – by means to showcase the brand


and all its products. Helps build stronger relationships with it’s
customers. This may cause competition with the retailers.

2. Other means - create there own shops within a department store ;


sell through phone , mail or electronic means ( Catalogue)

3. Web strategies – online retail channel

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