group6-presentation final version

8/8/2019 Group6-Presentation Final Version

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International UniversitySchool of BusinessMBA class 02 - Group 6


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Tran Ngoc Son

Nguyen NgocDieu Thi

Tran Thi TuongVi

Le NgocTrung

Phan Minh Nhat


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Chapter 09: Creating Brand Equity

Chapter 10: Crafting the Brand Positioning

Chapter 14: Developing Pricing Strategy &Programs


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Creating Brand

Equity


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What is a brand & How does

branding work?What is brand equity?

How is brand equity built, measured,and managed?

What are the important decisions indeveloping a branding strategy?


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A brand is a name, term, sign, symbolor design, or a combination of them,

intended to identify the goods orservices of one seller or group of sellersand to differentiate them from those ofcompetitors.


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Identify the maker

Simplify product handling

Organize accounting

Offer legal protection

Signify quality

Create barriers to entry

Secure price premium & competitiveadvantage


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Branding is endowingproducts and services withthe power of the brand.

Brand equity is the added value endowed

on products and services, which may bereflected in the way consumers, think, feel,and act with respect to the brand.


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Improved perceptionsof productperformance

Greater loyalty

Less vulnerability to

competitivemarketing actions

Less vulnerability tocrises

Larger margins

More inelasticconsumer response

Greater tradecooperation

Increased marketingcommunicationseffectiveness

Possible licensing

opportunitiesAdditional brandextension opporunities


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A brand promise is the marketers visionof what the brand must be and do for

consumers.


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Brand Asset Valuator

- Differentiation, Energy, Relevance,Esteem, Knowledge)

BRANDZ

- Follow a squential series of steps- Challenge : help people be high earnings& high potential customers

Aaker Model- Brand identity, Core identity elements,Extended identity elements, Brand essence)

Brand Resonance


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Brand Resonance Pyramid


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Choosing brand elements

Trademarkable devices that identify anddifferentiate the brand

Designing holistic marketing activitiesBrands are not built by ad alone.

Leveraging secondary associations

The associations indirectly transferred to thebrand by linking the brand to other entities(company, distribution channels,...)


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Brand buildingBrand building DefensiveDefensive

Memorable

Meaningful

Linkable

Transferable

Adaptable

Protectable

Criteria of choosing

DevelopingDeveloping brand elements (brand name, slogan, URL, Logo,brand elements (brand name, slogan, URL, Logo,

Symbol) can play a number of brand building rolesSymbol) can play a number of brand building roles

SlogansSlogans: an extremely efficient means to build brand equity: an extremely efficient means to build brand equity


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PersonalizationMaking sure the brand and itsmarketing are as relevant as possible,to as many customers as possible

Integration

Mixing and matching marketingactivities ==> reinforce the brandpromise

Internalization"Walk the walk" to deliver the brand

promiseChoose the right moment

Link internal & External marketing

Bring the brand alive for employees

When You're Here, You're

Family

Answers That Matter


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BRAND

Things

OtherBrands

People Places

Alliances

Ingredients Company

Extensions

Country ofOrigin

Channels

Employees

Endorsers

Events

Causes

3rd partyendorsemen

ts

Secondary Sources of Brand Knowledge


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Brand audits

Brand trackingBrand valuation


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The World's 10 Most Valuable Brands in 2010Source: Millward Brown Optimor, BrandZ Top 100 Most Valuable Global Brands ranking


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Brand reinforcement

Brand revitalization

Brand crises


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Market segmentation

Financial analysis

Role of brandingBrand strength

Brand value calculation


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Develop new brand elementsApply existing brand elements

Use a combination of old and new


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Crafting the Brand

Positioning


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1. What is positioning?

2. How to create an effective positioning

strategy?

3. How to differentiate brands?

4. What marketing strategies are

appropriate at each stage of the

product life cycle?


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Competitive frame of reference

Points-of-parity (POPs)

Points-of-difference (PODs)


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Frame of referenceCategory membership

Announcing category benefitsComparing to exemplars

Relying on the product descriptor


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Associations that are not necessarily

unique to the brand but may be sharedto other brands


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DesirabilityCriteria

DeliverabilityCriteria

Relevance Feasibility

Distinctiveness Communicability

Believability Sustainability


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PersonalPersonal

ProductProduct

ImageImage

ChannelChannel


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Product form

Features

Performance

Conformance

Durability

Reliability

Reparability

Style

Design

Ordering ease

Delivery

Installation

Customer training

Customer consultingMaintenance


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Source: www.bauer.uh.edu/pgalvani/files/MARK6361/kotler10.ppt


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"To remove the SingaporeGirl icon from SIA is like removing MickeyMickeyMouse from Disneyland... - Singapore's The Straits Times
http://en.wikipedia.org/wiki/The_Straits_Timeshttp://en.wikipedia.org/wiki/The_Straits_Times


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VS


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The product life circle

Marketing strategies for each stage inPLC


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Source: www.bauer.uh.edu/pgalvani/files/MARK6361/kotler10.ppt


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Improve product quality and add newproduct features and improved styling

Add new models and flanker products

Enter new market segmentsIncrease distribution coverage and enternew distribution channels

Shift from product-awareness advertisingto product-preference advertising

(www.suu

.edu/.../Kotler

%20Keller%20PwrPt/Kotler

_MM_13e_Basic_10

.ppt)


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Expand number of brand users by:Converting nonusers

Entering new market segments

Winning competitors customersConvince current users to increase usageby:

Using the product on more occasions

Using more of the product on each occasion

Using the product in new ways

Shift from product-preference advertising toproduct-reminding advertising

(www.suu.edu/.../Kotler%20Keller%20PwrPt/Kotler_MM_13e_Basic_10.ppt)


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Increase firms investment

Decrease the firms investment levelselectively by dropping unprofitable customergroups, while simultaneously strengtheningthe firms investment in lucrative nichesHarvesting (milking) the firms investmentto recover cash quickly

Get rid of the business quickly by disposing ofits assets as advantageously as possible.

(www.suu

.edu/.../Kotler

%20Keller%20PwrPt/Kotler

_MM_13e_Basic_10

.ppt)


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Quality improvements

Feature improvements

Style improvements


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Developing Pricing

Strategy & Programs


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Understanding pricing

Setting the price

Adapting the price

Initiating and responding to PriceChanges


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Although nonprice factors have become more important inmodern marketing, price is the most important elementsdetermining market share and profitabilityEffectively designing and implementing pricing strategiesrequires a thorough understanding of consumer pricingpsychology and a systematic approach to setting, adapting,and changing pricesConsumer pricing psychology how consumers arrive attheir perceptions of price, the marketers must think of:

a. Reference price: consumers get pricing information from internalreference price (used as habitual decision making) or externalreference price (used as limited decision making and extendeddecision making)

b. Price-quality inferences: many consumers use price as an indicator ofquality whenever the information is not available

c. Price cues: consumers tend to process prices in a left to right

manner rather than by rounding e.g. stereo amplifier priced at 299instead $300 as a price in the $200 range rather than $300 range


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In setting pricing policy, a company follows a Six-Stepprocedures :

Step1: Selecting the Pricing Objective

Step 2: Determining Demand : price elasticity of demand

Step 3: Estimating costs

Step 4: Analyzing Competitors Costs, Prices, and Offers

Step 5: Selecting a Pricing methods

Step 6: Selecting the final price


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Step1: Selecting the Pricing Objective through Survival: face overcapacity, intense competitionor changing consumer wants.

Maximum current profits: knowledge ofcustomer demand and cost function

Maximum market share: set the lowest priceassuming the market is price sensitive

Maximum market skimming: setting higherprice as to communicate superior product

Product-Quality leadership: high levels ofperceived quality, taste, and status with a pricee.g. Jaguar car

Other objectives: suitable to nonprofit and publicorganization


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Step 2: Determining Demand :

Price sensitivity:

Price $15

$10

100 105

$15

$10

50 150

------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------

(a) Inelastic Demand (b) Elastic Demand

Quantity Demanded per Period Quantity Demanded per Period Estimating demand curves

Survey: how many units customers would buy atdifference priceExperiments: can vary the prices of different

products in a storeStatistical analysis: past prices, quantities sold,

other relationship


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Step 3: Estimating costs

Type of costs and levels of production andAccumulated productionFixed costs: not vary with production level or sales revenue

Variable costs: material, office expenses

Average costs: is the cost per unit at that level of production

Total costs: Comprise variable costs and fixed costs

Accumulated Production

Costp

erunit

$2

$4$6

$8

$10

100,000 200,000 400,000 800,000

-----------------------------------------------------------------------B

II

A

IIII

IIIII

TI

Current price

Experiencecurve

I I I


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Step 4: Analyzing Competitors Costs, Prices, andOffers:

Consider the nearest competitors price The introduction of any price or change of any existing

price can provoke a response from customers,competitors, distributors, suppliers, and even +government

Anticipating a competitors reactionsHigh price

(Nopossibledemandat this

price)

Low price(No

possibleprofit at

this price)

Ceiling

price

Customersassessmentof uniqueproductfeatures

Orienting point

Competitorsprices andprices of

substitute

Costs Floorprice

Advantages:

Easy to perform, especially difficult to

estimate costs

Avoid a war of price

Disadvantages:

Not count the factors of price for self-

company

Skip profits at higher price levels

Setting high price maybe attract more

rivals to enter the market


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Step 5: Selecting a Pricing methods:

MARKUP PRICINGVariable cost per unit $ 10Fixed costs $ 300,000Expected $ 50,000The manufactures unit cost is given by:

Unit cost = variable cost + = $10 += $16

$300,000$50,000

Fixed costUnitsales

Markup Price = = =$20

Unit cost

1 desired return on sales

$16

1 0.2

Assume the manufacturer wants to earn a 20% markupon sales. The manufacturers markup price is given by:

TARGET-RETURN PRICING

Markup Price = unit cost + = $16 +

= $20

desired return x investedcapital unit sales

0.2 x $1000,000

50,000


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Step 5: Selecting a Pricing methods (cont)

Advantages:Compensated costs

Rapidly and easilyConsidered equal price,decreasing pricecompetition

Disadvantages:Unit cost depend on sold

products

wrong pricingDisregarding rivals andfluctuation of demand levelsSkip profits at higher levels


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Step 6: Selecting the final price : the company mustconsider additional factors such as:

Impact of other marketing activities: the final pricemust take the brands quality, advertising media,channel selection and services provided

The salespeople quote prices that are reasonable tocustomer and profitable to the company

Risk and gain sharing pricing: the company mustaware the risk of pricing such as consumers willsee uncompetitive price for homogeneous productsor loss of customers if it does not deliver the fullpromised value for non homogeneous products.


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Companies usually do not set a single price, but

rather a pricing structure that reflects variation in:a. Geographical pricing: the company decides how to price itsproducts to different customers in different locations andcountries

b. Price discounts and allowance: most companies will adjusttheir list price and give discounts and allowances for earlypayment, volume purchases, and off-season buying

c. Promotional pricing: companies can use several pricingtechniques to stimulate early purchases or attractcustomers attention such as loss leader pricing, specialevent pricing, longer payment terms

d. Differentiated pricing or price discrimination: companiesoften adjust their basic price in customer segment pricing

(adult vs child), product form pricing (1 for $10, 2 for $15),location pricing and time pricing


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Companies face situations where they needto cut or raise price

Initiating Price Cuts: as a drive to dominatethe market through lower cost and excessplant capacity. A price-cutting strategyinvolves possible traps:

a. Low quality trapb. A low price buys market share but not market loyaltyc. Little cash receives due to price wars


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Initiating Price Increases: as a drive to face thecost inflation and the over demand. A price-

increase strategy involves different impact onbuyers:a. Delayed quotation pricing: the company does not set a final

price until the product is finished or deliveredb. Unbundling: the company prices separately one or more

elements that were part of the offer such as delivery and

installation costc. Reduction of discounts: the price increase makes the companyto instruct its sales force not to offer its normal cash e.g. 30%discount but price already changes

Market leaders attacked by lower-pricedcompetitors can choose: to maintain price, raise

the perceived quality of their product, reduceprice, increase price and improve quality, orlaunch a low-priced fighter line


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International UniversitySchool of BusinessMBA class 02 - Group 6

group6-presentation final version

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