![Page 1: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/1.jpg)
.
.
Chapter 5: Designing Marketing Programs to Build Brand Equity
![Page 2: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/2.jpg)
Overview• 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?
![Page 3: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/3.jpg)
.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…)
New perspective on marketing
![Page 4: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/4.jpg)
.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
![Page 5: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/5.jpg)
.
.
5.5
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.
![Page 6: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/6.jpg)
.
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
Marketing is changing!
![Page 7: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/7.jpg)
IMPACT TO…
INTEGRATING MARKETING PROGRAMS AND ACTIVITIES
![Page 8: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/8.jpg)
Product
brand building efforts
marketing activities
![Page 9: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/9.jpg)
.
.IMPACT TO…
PERSONALIZING MARKETING• Experiential marketing• One-to-One marketing• Permission marketing
![Page 10: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/10.jpg)
.• Expression of individuality
• Consumer desire for personalization
“The idea is not to sell something, but to demonstrate how a brand can enrich a customer’s life”
Experiential marketing connects a product to unique and interesting experiences
![Page 11: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/11.jpg)
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
![Page 12: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/12.jpg)
.Product Strategy
![Page 13: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/13.jpg)
“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?
![Page 14: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/14.jpg)
.
.
Perceived Quality and Value
Dimensions of Quality:
• Performance • Features • Conformance Quality • Reliability • Durability • Serviceability • Style and Design
Brand Intangiblesspeed, accuracy, delivery and installation, courtesy, helpfulness of customer service and training
![Page 15: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/15.jpg)
.
.
Product or Service Benefit Dimensions:
1. Functional benefits: Product and performance attributes
2. Process benefits: ease of access to product information; broad product selection; convenient transactions
3. Relationship benefits: personalized service; strong emotional relevance; loyalty rewards
“By improving the fuller customer experience, companies can keep consumers happier and hold on to them longer”
(McKinsey)
![Page 16: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/16.jpg)
Value Chainquality perceptions + cost perceptions = assessment of value
opportunity costs of time, energy and psychological involvement in the decision
The firm is a collection of activities that are performed to design, produce, market, deliver and support products
Firms can achieve competitive advantages by improving performance and reducing costs in
any or all of the value creating activities
![Page 17: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/17.jpg)
.Relationship Marketing
current customers are the key to long term brand success
- Mass Customization
- Aftermarketing
- Loyalty Programs
Customization addresses the need for individuality
To achieve the desired brand image, product strategies should focus on both purchase and consumption
Activities that occur after customer purchase (User Manuals, Complimentary Products)
Loyalty programs offer different mixtures of services, newsletters, premiums and incentives for a firm’s “best” customer
![Page 18: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/18.jpg)
.
.
Pricing Strategy
![Page 19: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/19.jpg)
. 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
Pricing Strategy
![Page 20: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/20.jpg)
.
• Consumers rank brand according to prices
• Price Bands = range of acceptable prices
• price - product meaning - value and quality they received
Price Perceptions
![Page 21: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/21.jpg)
.
.
Pricing Strateg
yNeeds and wants of
consumers
Costs of producing the product Relative prices of competition
Profit margin of the company
Greater emphasis on the end consumer
Value strategies
Everyday low pricing EDLP strategies
Setting PricesSell the right product and the
right price- to better meet consumer needs
![Page 22: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/22.jpg)
.
.
1. Assess what value the customer places on your brand2. Look for variation in assessing customers value3. Asses customers price sensitivity4. Identify an optimal pricing structure5. Consider competitors reactions6. Monitor prices at a transaction level7. Asses customer emotional response8. Analyse if the returns are worth the cost
8 steps to better Pricing
![Page 23: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/23.jpg)
.
. Value pricingProduct
design and delivery
Product costs
Product prices
Setting Prices
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
![Page 24: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/24.jpg)
.
.Everyday low pricing EDLP
Discount and promotions over time
Builds brand loyalty and awareness
Incentives to consumers to buy
Setting Prices
Everyday base prices
Consistent low prices on major items will bring consumers back to buy
- Forward buying versus diverting
![Page 25: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/25.jpg)
Channel Strategy
![Page 26: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/26.jpg)
. 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 intermediaries2. Direct – sell through personal contacts
Try develop : “integrated shopping experiences “
Channel Strategies
![Page 27: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/27.jpg)
.
DIRECT
Product info is high Customisation Quality assurance is important Lot size is important Logistics are important
INDIRECT
Broad assortment is essential Availability is critical After sales service is important
Indirect Vs Direct channels
-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
![Page 28: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/28.jpg)
.
- It concentrates on retailers even though there are many other intermediaries
- Retailers have the most contact to customers – affect brand equity
- The image of the product and the image of the retailer is important to consider as customers tend to form associations.
- Consider : 1. Push and pull strategies 2. Channel support
- Retail segmentation - Cooperative advertising
Indirect Channels
![Page 29: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/29.jpg)
.
.
1. Push and pull strategies
Retailers have power over manufactures and directly affect brand equity.- Demand lucrative and frequent trade promotions - Compensation to stock a new brand - Cash payments for shelf space (slotting allowances) - Introductory deals (“ one free with three”)- Postponed billing- Advertising or promotion to supports a new brand
Manufactures can overcome this power by creating unique products the consumer demands
Devoting marketing efforts to the end consumer = PULL STRATEGY( broad distribution)
Devoting marketing efforts to the channel members , offering them incentives to buy the brand = PUSH STRATEGY( selective distribution)
Indirect Channels
![Page 30: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/30.jpg)
2. Channel support
Services provided by channel members may help enhance the value to consumers and the brand. Establish “ Marketing partnership with retailers is critical to ensure channel support”
Two channel support strategies are :
1. Retail segmentation – segmenting the retailers according to similar characteristics , as
different retailers might need different product mixes , special delivery systems
customised promotions or even there own branded version of the product
2. Cooperative advertising- manufacturer pays for a portion of the advertising to
promote the product and the availability at the retailer.
![Page 31: Chapter 5 (designing marketing programsto build brand equity)](https://reader035.vdocuments.site/reader035/viewer/2022062220/55629744d8b42a950c8b513a/html5/thumbnails/31.jpg)
.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
Direct Channels