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MIS 6322 Chapter 6:

Market Communications and Branding

MIS 6322MIS 6322

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Market Communications and Branding

y Questions answered in this chapter:

1. What constitutes a good brand?

2. What are the four categories of market

communications?3. What is a 10-step branding process?

4. What are the arguments for and against leveraging

an offline brand into the online environment?

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Integrating Communications and Branding

y Branding is about consumers perception of the

offeringhow it performs, how it looks, how it makes

one feel, and what messages it sends

y

Market communications represent customersinteraction with the brand and, more generally, mass-

marketing approaches

In the offline world, market communications tend to be

one-way, from the firm to the customer

In the online world, market communications become much

more interactive (two-way)

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The Customer Decision Process

and Market Communications

y Decision stages of the buying process:1. Brand awareness and product consideration can be

communicated through television ads, general interestmagazines, web banners

2. Product preference can be fostered through nichemagazines and company websites

3. Purchase decisions can be triggered by point-of-salepromotions, direct marketing, daily specials, sweepstakes,

and first-time order incentives4. Brand loyalty can be developed through product

experience, buyers clubs, e-mail alerts, newsletters

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Evolution of Customer Buying Process [Exhibit 6-1]

Source: Forrester Research, Monitor Analysis

Web Market

Communication

Television ads

Generalinterest

magazines

Banners

Niche

magazines

Collateral

Microsites

Brochureware

Website

Point-of sale

promotions

Direct

marketing

Daily specials

Sweepstakes

First-time order

incentives

Product

experience

Buyers clubs

E-mail alerts

Newsletters

Television ads

Generalinterest

magazines

Buttons

Banners

Sponsorships

Traditional

MarketCommunication

Consideration Preference Purchase LoyaltyAwarenessBuying Process

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Framework for Marketing Communications [Exhibit 6-2]

Direct Personalized

Broad

Individualized

Offline Online

Communications Media

AudienceFocus

Traditional Mass

Marketing

General Online

Approaches

Market communications refers to all the points of contact

that the firm has with its customers

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Exhibit 6-3: The Four Categories of

CommunicationsDirect

Traditional Mass Marketing

Television

Radio Print

Billboards

Personalized Personalized permission e-mail

Personalized recommendations

Personalized advertisements

Personalized webpages

Personalized e-commerce

General Online Approaches

Banner ads

E-mail Viral marketing

Portal sponsorship/exclusive agreements

Associate programs

Online and offline partnerships

Customer information

Online transactions

Salesforce

Direct mail

Telemarketing

Customer service reps

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What is a Good Brand

y According to theAmerican MarketingAssociation, a brandis name, term, sign, symbol, or design, or a combination ofthem intended to identify the goods and services of one selleror group of sellers and to differentiate them from those of

competitiony A good brand provides positive consumer responses and

benefits both target customers and the firm

y Brand equity is a set of assets (and liabilities) linked to abrands name and symbol that add to the value provided by a

product or service to a firm and/or that firms customers

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Exhibit 6-4: What Is a Good Brand?

Brand Prestige

Marketing Communications

Core

Product /

Service

Mix of offline and online advertising

Emphasizes advantages to AAdvantagememberships, including mileage points andonline services

Superior service

AAdvantage frequent-flyer club

Award-winning Admirals Club lounges

Comfortable chairs

Portable defibrillators on every flight

Safe, on-time transportation from A to B

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A Simple Conceptual Model of Brand Equity

y A brand has three components:y Core product/service

y Wrap-around

y Marketing communications

y

Consumer responses can take two broad forms:y Brand awareness (depth, breadth)

y Brand associations (strength, valence, uniqueness)

y Consumer benefits may include the increased confidence in thepurchase decision, loyalty to the brand, and satisfaction with the

experiencey Firm benefits translate into top-line revenue growth, increased

margins, and lower marketing costs

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Types of Brands

y

Pure offline and online brandsy Classic offline brands include the Gap, UPS, and Disney

y New online brands includeAmazon, Yahoo, and Priceline

y Blurring of the distinctiony Brands such as Yahoo were established online but use offline promotional

activities to grow brand awarenessy Brands such as E*Trade are traditional brands, but they are extensions of the

online brandsand thus a mixture of the two

y Brands such as Egghead.com have completely shifted from an offline brand toa purely online brand

y Brands such asWingspan Bank were established in the virtual world but by a

traditional brandy Brands such as Schwab have successfully bridged the gap between online and

offline activities

y Brands such as Ragu were established offline but use online promotion togrow brand awareness

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Brand Presence [Exhibit 6-7]

Source: Monitor Analysis

Traditional

BrandsOnlineOffline

Online Brands

Mix of Promotional Activities

Produc

t

Establishm

ent

E*Trade

Ragu

E*Trade Financial ATM

Wingspan

bank

Schwab

Egghead

Bank One

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Building an Online Brand [Exhibit 6-8]

1. Clearly define the brand audience.

2. Understand the customer.

3. Identify key leverage points in customer experience.

4. Continually monitor competitors.

5. Design compelling and complete brand intent.

6. Execute with integrity.

7. Be consistent over time.

8. Establish feedback systems.

9. Be opportunistic.

10. Invest and be patient.

Integrated

Campaign

Value

Cluster

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Similarities and Differences Between Offline and

Online Branding[Exhibit 6-9]Branding Element Offline Online

1. Clearly define the brand

audiencey Limited to manageable number of

segments to prevent inconsistentmessaging

y Could include larger number ofsegments, with customer-drivenmessages

2. Understand the customer y Requires understanding ofenvironment, desired purchase,and usage experience

y Requires more thoroughunderstanding of desiredpurchase and usage experience

in an interactive environment

3. Identify key leverage points in

customer experiencey Buying process is typically a

simplified representation ofcustomer segment behavior withstatic leverage points

y Buying process tends to be moredynamic and flexible

4. Continually monitor

competitors

y Requires monitoring of competitor

advertisements & activities

y Competitor advertisements &

activities can be monitored online

5. Design compelling and

complete brand intenty Brand intent (desired positioning)

is designed to address the needsand beliefs of target segments

y Greater opportunity forcustomization of key messages

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Similarities and Differences Between Offline & Online

Branding(Exhibit 6-9 contd.)

Branding Element Off-line On-line

6. Execute with integrity y Strong, positive brands are built up overtime

y Online interactions bring in addedconcerns of security & privacy

y Limited familiarity with online brandsmakes fostering trust more difficult

7. Be consistent over time y Brand intent guides marketingcommunications

y Image reinforced through variety of

offline media

y Brand intent guides marketingcommunications

y With the ability to customize, one

customer's brand image may bedifferent than another customers brandimage

8. Establish feedbacksystems

y Collecting and analyzing customerfeedback is more t ime-consuming

y Sophisticated tools exist for trackingonline; allows for anonymous,interactive, quick feedback

9. Be opportunistic y Marketing strategy includes plan forsequenced growth and adjustment ofbrand based on changing customer

needs

y Customization for multiple segmentsand opportunity for early recognition ofchanging customer needs

y Corresponding tailoring of brand intent

10. Invest and be patient y Building brand awareness requiressignificant investment

y Building brand loyalty takes time offline,especially because early customerreceptivity to brands is difficult to assess(and usually involves market research)

y Building brand awareness requiressignificant investment, especially forcompetitors who are not first in theircategory online

y Brands have the potential to generateloyalty more quickly, especially ifcustomers are targeted effectively

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Branding Choices

y A firms online branding choices depend upon its communicationsobjectives

y Brand creation.The objective may be to build a new-to-the-world brandname

y Sales leads.The company may decide that the Internet will be used to facilitate

the sales-lead processy Store traffic.The principal objective for some sites may be to increase store

traffic

y Product trial.A fourth objective may be trial usage of the product

y Product sales.The company can also measure the success of a campaign basedupon the actual increase in product or service sales

y Brand reinforcement. Finally, it is possible that the communications effort isfocused on reinforcing a brand image that is already widely accepted in themarketplace

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Exhibit 6-11: Online Branding Choices

Source: Forrester Research, Monitor Analysis

BrandReinforce-

ment

Broad Vs.Focused(Specific

Products /Services)

BrandAssociation

BrandAwareness

Firm Benefits

CustomerBenefits

ProductSales

Sales Leads

BrandCreation

Product Trial

Store Traffic

What value do you

want to derive from

your online presence?

What part of brand

equity do you want to

build?

What product / service

are you offering them?

Value ObjectiveComponent of Brand

Equity

Product ScopeTarget Audience

Broad Vs.Focused(Specific

Segments)

Who do we want to

target?

Online Branding Choices Exhibit 6-11

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Case Study: American Airlines

y Overview ofAmericanAirlines online branding effortsy First to have a service-oriented website (May 1995)

y First to launch an e-mail service of discounted fares, Net SAAverFares (March1996)

y First to offer real-time flight information (Spring 1996)

y First to offer flight information on competitors (Spring 1996)y First to offer airline reservations online (June 1996)

y First to offer paperless upgrade coupons and stickers (Spring1997)

y First to send e-mail confirmation of itinerary and ticket purchase

(Fall 1997)y First to offer high personalization for consumers (June 1998)

y First airline to partner withAOL to createAOLAAdvantageRewards Program (Fall 2000)

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American AirlinesAssessment of Key BrandingElements Exhibit 6-13:

Key Elements Rating Rationale Rating Rationale

1. ClearlyDefine the

Brand Audience

Targets AAdvantage membershighly profitableand loyal customers familiar with travel (andthus more likely to buy tickets online), as well aslow-fare seekers

Targets both high spending business customers, aswell as OnePass members, and non-OnePassmembers

2. Understand theCustomer

Constantly anticipates and innovates to meetthe needs of the customer

Tends to be a follower in the industry, late inlaunching its website (6/97)

3. Identify KeyLeverage Points in

Customer

Experience

Net SAAvers and new customization programleverage consumers' desire to find cheap faresinto transaction by sending out e-mails each

week; site features sections for currenttravelers, prospective travelers

Does not promote e-mail subscriptions on the site

4. Continually Monitor

Competitors

If a competitor adopted a technology beforeAmerican, it was quick to follow

Tends to follow what competitors are doing at a slowerpace, launching copy cat initiatives many monthsafter competitor rollout

5. Design Compelling

and Complete

Brand Intent

Focus, streamlining, and ease of use of websiteall convey Americans message of customerneeds first

Unclear target segment (business travelers? OnePassmembers?) causes lack of clarity with Brand Intent

6. Execute with

Integrity

Trust fostered in the offline world carries overinto the online world

Trust fostered in the offline world carries over into theonline world, with extensive information for memberson privacy and use of provided information

7. Be Consistent OverTime

Although constantly innovating newtechnologies and features, stays true tosomething special online

Consistent over time but does not stand out

8. Establish Feedback

Systems

Customer contact offered as a service at the topof each page and customer service offered as aspecific menu item

Very easy to access, prominent feature for obtainingcustomer feedback on the website

9. Be OpportunisticLeader in its industry in innovation and

development Follower in the industry

10. Invest and Be

Patient

Invests significantly in technology for the future Has a tendency to wait too long to make changescompetitors make to their sites

American Airlines Continental

CVc= very low = low = moderate = high = very high

CV

CV

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American AirlinesAssessment of Key Brand Attributes [Exhibit 6-14]

Key Attributes Rating Rationale Rating Rationale

1. Relevant

Up-to-date flight and gate information

Personalized information based onAAdvantage profiles

PDA applications with flight information

Offers only information for Continental,but does offer bookings for rental carsand hotels

Allows travel preferences to be saved inprofiles

2. Distinct

Offers highly personalized experienceFirst to offer tie in with PDA applications

y

Offers extensive online customer serviceoptions

Offers customized services for thebusiness traveler

3. Consistent

Portrays an image of "something specialonline, consistent with its image ofoffering "something special in the air

No key messages online associatedclosely with the offline campaign

4. Memorable

Provides a unique service others cannotoffer (in terms of personalization)

Net SAAvers is the most well known andeffective e-mail marketing tool

Low use of branding on the site and lackof online / offline message associationfail to create a cohesively memorablebrand for the consumer

American Airlines Continental

= very low = low = moderate = high = very high