brandmanagement pre

8/10/2019 BrandManagement Pre

1/41

Learning Outcomes Learn how to design marketing programmes

(i.e. product, pricing and distribution

strategies) to build brand equity

Understand how can marketers integrate these

activities to enhance brand awareness,

improve the brand image, elicit positive brand

responses, and increase brand resonance?


2/41


3/41

5.3

Implications for the Practice of Brand

Management

They have a number of implications for thepractice of brand management. Marketers areincreasingly abandoning the mass-market

strategies that built brand powerhouses in the1950s, 1960s, and 1970s to implement newapproaches.

Even marketers in staid, traditional industriesare rethinking their practices and not doingbusiness as usual.


4/41

5.4

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.


5/41


6/41

.

.

Experiential marketing

One-to-One marketing

Permission marketing


7/41

Experiential Marketing

Employ multiple touch points & multiplesenses

Often involves special events, contests,promotions, sampling, on-line activities, etc.

Combine brand education & entertainment

Distinctive and relevant

Read Figure 5.2 for Schmitts Guidelines!


8/41

One-to-One Marketing:

Competitive Rationale Consumers help to add value by providing

information

Firm adds value by generating rewardingexperiences with consumers

Creates switching costs for consumers

Reduces transaction costs for consumers

Maximizes utility for consumers


9/41


Consumer Differentiation Treat different consumers differently

Different needs

Different values to firm

current

future (life-time value)

Devote more marketing effort on mostvaluable consumers (and customers)


10/41


Fundamental Strategies Focus on individual consumersConsumer

databases

RespondInteractivity: A dialogue

Customize


11/41

5 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 thatprospect maintains the permission.

4. Offer additional incentives to get morepermission from the consumer.

5. Over time, leverage the permission to changeconsumer behavior toward profits.


12/41


13/41

5.13

Integrating the Brand

Into Supporting Marketing Programs

Product strategy

Pricing strategy

Channel strategy

Supporting marketing mix should be designed to

enhance awareness and establish desired brand

image.


14/41

5.14

Product StrategyDesigning and delivering a product or service that fully satisfies

consumer needs and wants is a prerequisite for successful

marketingHow do consumers form their opinions about Products?

Perceived quality and value

Perceived quality is customers perception of the overall

quality or superiority of a product or service compared to

alternatives and with respect to its intended purpose

Perceived Quality Dimensions:

Performance: Levels which primary characteristics operate (low, medium, high or

very high Features : Secondary elements that complement primary characteristics

Conformance Quality: Degree at which product meets specification products

Reliability: Consistency of performance over time and from purchase to purchase

Durability : Expected economic life of the product

Serviceability : Ease of servicing the product


15/41


16/41

Product StrategyUsing Relationship Marketing Perspective in Formulating

Product Strategy and Offering

Customer relationship management (CRM)is the overall

process of building and maintaining profitable customer

relationships by delivering superior value andsatisfaction

Uses a companys data systems and applications to track

consumer activity and manage customer interactions

with the company


17/41


18/41

5.18

Pricing Strategy

Price : The amount of money charged for aproduct or service. It is the sum of the valuesthat consumers exchange for the benefits ofhaving or using the product or service

Price is the only element in the marketing mixthat produces revenue, all other elements

represent costs.


19/41

5.19

Pricing Strategy

Price premiums are among the most important brandequity benefits of building a strong brand.

Consumer price perceptions

Consumers often rank brands according to price tiers in acategory.

The relationship between price and quality


20/41

Pricing Strategy

Value to Customers or Perceived Value for Money

Value is the benefit the customer derives from the purchase of the

product. The firm needs to understand the value that the

customer places on the benefits received and then price

accordingly. Effectively, customers assess the price and measure

the benefits received.Factors that affect the value they place on the product:

1. Status

2. Service and after sales service quality

3. Level of differentiation from competitor products

4. Quality of any packaging

5. Product functionality

6. Any substitute products which may be available


21/41

5.21

Pricing Strategy

Setting prices to build brand equityValue pricing

To uncover the right blend of product quality costs, and product

that fully satisfies the needs and wants of consumers and the

profit targets of the firm.

Everyday low pricing (ELPD)

Maintaining consistently low prices on major items every day to

build brand loyalty and fend off private label inroads and reduce

manufacturing and inventory costs e.g. Procter and Gamble


22/41


23/41

5.23

Pricing Strategy

8 Steps to Better Pricing

1. Assess what value your customers place on a product

or service

2. Look for variation in the way customers value the

product3. Assess customers price sensitivity

4. Identify an optimal pricing structure

5. Consider competitors reactions6. Monitor prizes realized at the transaction level

7. Access customers emotional response

8. Analyze whether the returns a worth the cost to serve


24/41

5.24

Channel Strategy

Marketing ChannelsSet of interdependent organizations involved in

the process of making a product or service

available for use or consumption.

The manner by which a product is sold or

distributed can have a profound impact on theresulting equity and ultimate sales success of

a brand.


25/41

5.25

Channel Strategy

Channel strategy includes the design andmanagement of intermediaries such as

wholesalers, distributors, brokers, and

retailers.


26/41

5.26

Channel Design

Direct channels

Selling through personal contacts from the company toprospective customers by mail, phone, electronic means,in-person visits, and so forth

Indirect channels Selling through third-party intermediaries such as agents

or broker representatives, wholesalers or distributors, andretailers or dealers

Push and pull strategies

Web strategies


27/41

Channel Design: How Channel

Members Add Value1. Creating Utility : Time, place, possession, form2. Facilitating exchange efficiencies

3. Alleviating Discrepancies e.g. quantity and

assortment

4. Standardising Transactions: products,

packaging, pricing, delivery is standardised

through the channel5. Customer Service e.g. technical advice, dealing

with customer enquiries, after sale service etc.


28/41

Channel Design : Functions of Members of

Marketing ChannelInformationrefers to the gathering and distributing research and

intelligence information about actors and forces in the marketingenvironment needed for planning and aiding exchange

Promotionrefers to the development and spreading persuasive

communications about an offer

Contacts refers to finding and communicating with prospective

Buyers

Matchingrefers to shaping and fitting the offer to the buyers

needs, including activities such as manufacturing, grading,

assembling, and packaging

Negotiationrefers to reaching an agreement on price and other

terms of the offer so that ownership or possession can be

transferred


29/41


30/41

Types of Distribution Channels

Consumer Goods Channels

Channel LevelA layer of intermediaries that performs some work inbringing the product and its ownership closer to the final

buyer

Channel 1 Manufacturer Consumer

Channel 2 Manufacturer Retailer Consumer

Channel 3 Manufacturer Wholesaler Retailer Consumer

Channel 4 Manufacturer Agent Wholesaler Retailer Consumer

NB: Hybrid Marketing Channelsor multi-channel distribution, as when a single firmsets up 2 or more marketing channels to reach one or more customer segments.


31/41

Establishing Channel Strategies

Channel strategy decisions involve thefollowing :

1. The selection of the most effective

distribution channel,2. The most appropriate level of

distribution intensity

3. The degree of channel integration


32/41

Establishing Channel Strategies :Channel

Selection

Why will Procter and Gamble sell its brands through supermarkets rather thanselling direct to consumers ? Why Dell will sell direct to end users and not

necessarily through retailers?

1.Market Factors :

2.Producer Factors

3.Product/Brand Factors

4.Competitive Factors


33/41


Selection

1. Market Factors : Buyer Behaviour,

Buyer needs information, installation & technicalassistance etc.

Willingness of channel intermediaries to marketproduct

The profit margins demanded by wholesalers &retailer and commission by sales agents

The number and size of buyers The location and geographical concentration of

customers


34/41


Selection

Producer Factors Resource availability : Financial and Managerial

resources

Product Mix

Desired Degree of Control of Channel Operations(price, stocking of new products etc)

Competitive Factors

Control of traditional channels of distributionthrough franchise or exclusive dealing arrangements


35/41

Establishing Channel Strategies :Channel Selection

Products/Brand Factors

Direct Channel

1. Product Customization is high

2. Product information needs are high

3. Product quality assurance is important

4. Purchase lot size is important

5. Logistics are important i.e. degree of difficulty in carrying

the product e.g. storage etc.

Indirect Channel

1. Availability is critical

2. Aftersales service is important



36/41


Why a Firm May like to use Direct Marketing

Channels

Direct Marketing Channel is a marketing channel thathas no intermediary levels. The end user is served

directly .e.g. through the internet, mail order, own retail

shop or outlet etc.1. Greater Control

2. Lower Cost

3. Value Added Subsequent to Production Process4. Direct Contact with Customer Needs

5. Quicker Response or Change in Marketing Mix

6. Suitable Middlemen Not Available


37/41

Establishing Channel Strategies :Distribution

Intensity3 broad options are intensive, selective and exclusive:

1. Intensiveis a strategy used by producers of convenience products and

common raw materials in which they stock their products in as

many outlets as possible e.g. foods, toiletries, beer etc.

Aim is to achieve saturation coverage of the market

2. Selective

is a strategy when a producer uses more than one but fewer than

all of the intermediaries willing to carry the producers products

Televisions

Appliances


38/41

Establishing Channel Strategies :Distribution

Intensity3. Exclusive is a strategy in which the producer gives only

a limited number of dealers the exclusive right to

distribute its products in their territories e.g. only one

wholesaler, retailer or industrial distributor is used in a

geographic area. Luxury automobiles

High-end apparel


39/41

5.39

Channel Management: Push and

Pull Strategies

By devoting marketing efforts to the end

consumer, a manufacturer is said to employ a

pull strategy.

Alternatively, marketers can devote their

selling efforts to the channel members

themselves, providing direct incentives for

them to stock and sell products to the endconsumer. This approach is called apush

strategy.


40/41

5.40

Channel Support

Two such partnership strategies are retail

segmentation activities andcooperative advertising

programs.

Retail segmentation Retailers are customers too

Cooperative advertising

A manufacturer pays for a portion of the advertising that a

retailer runs to promote the manufacturers product and

its availability in the retailers place of business.


41/41

brandmanagement pre

Documents