wps management workshop - business segmentation
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TRANSCRIPT
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Strategically Branding A Strategically Branding A DestinationDestination
William D. NealWilliam D. Neal
Senior Executive OfficerSenior Executive Officer
SDR, Inc.SDR, Inc.
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What Values Come to Mind?
Coca ColaCoca Cola
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What Values Come to Mind?
Hewlett PackardHewlett Packard
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What Values Come to Mind?
HondaHonda
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What Values Come to Mind?
DisneyDisney
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What Values Come to Mind?
Las VegasLas Vegas
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Branding is a Strategy
• Great brands are built strategically
• Great Brands are a central element of strategic business planning.
• Great Brands dominate the market planning process.
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StrategyStrategy - integrated actions in the pursuit of competitive advantage
George Day
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Strategic Market Planning
A planning process to develop or improve sustainable competitive advantage.
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“If it moves, we sponsor it,
if it doesn’t move, we paint it red.”
Roberto C. Goizueta, Coca Cola
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Can we adopt strategic business planning models to the Travel & Tourism Industry?
Yes !But we must change our thinking a bit
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Think in terms of BUSINESS• The location can be thought of as the ENTERPRISE.
– ORLANDOORLANDO
• Individual destinations can be thought of as STRATEGIC BUSINESS UNITS dominated by Brands.– Disney WorldDisney World– Universal StudiosUniversal Studios– Sea WorldSea World
• Specific activities can be thought of as CUSTOMER REQUIREMENTS.– Rides & AttractionsRides & Attractions - History Education- History Education– Culture/HeritageCulture/Heritage - Nature- Nature– Night LifeNight Life - Educational Programs- Educational Programs
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Think in terms of BRANDS• The destination area can be thought as an
AUTHORITY BRANDAUTHORITY BRAND.– ORLANDOORLANDO
• Individual destinations can be thought of as STRATEGIC BRANDSSTRATEGIC BRANDS.– Disney WorldDisney World
– Universal StudiosUniversal Studios
– Sea WorldSea World
• Specific activities can be thought of as INDIVIDUAL BRANDS to meet customer needs.– Indiana Jones Theme ParkIndiana Jones Theme Park - Theme Hotels- Theme Hotels
– Old Town OrlandoOld Town Orlando - Nature Island- Nature Island
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The Brand Hierarchy
Authority Brand
StrategicBrand
StrategicBrand
StrategicBrand
Sub-Brand
Sub-Brand
Sub-Brand
Orlando
Indiv. Rides Attractions Theme Hotels
Disney UniversalSea World
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San AntonioSan Antonio
What Master Brands come to mind for this Authority Brand?
The RiverwalkThe AlamoThe Five MissionsTexas Museum of HistoryThe Spurs
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AtlantaAtlanta
What Master Brands come to mind for this Authority Brand?
The Braves & Turner FieldStone Mountain ParkBuckheadEmory Medical CenterLake Lanier
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Ocracoke Island?Ocracoke Island?
What Master Brands come to mind for this Authority Brand?
Where is Ocracoke?
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CONSUMERCONSUMER
Marketing Activities
Marketing Mix
Other Co. Activities
Finance, Production, Legal
External Environment
Economic, Political, Technological, Social, Demographic
The Marketing ConceptThe Marketing Concept
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The Marketing ConceptThe Marketing Concept
• The purpose of business is satisfied customers– Drucker, Levitt, McKitterick
• The purpose of business is to deliver value– Porter, Reichheld, Berry
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All Products &Services in the Category
Consideration SetBrand Hierarchy* Brand V* Brand X* Brand Z
Brand Value ConceptBrand Value Concept
The rational buyerpurchases the brand withthe highest value to them
Satisfaction simply keeps you in the Consideration Set
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The Marketing ConceptThe Marketing ConceptREALITY:
• Marketing Concept must also address the competition
• The purpose of business is to deliver higher relative value.
• To survive and grow, you must provide: SUSTAINABLE COMPETITIVE ADVANTAGE
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Goal of Marketing Strategy
Develop Sustainable Develop Sustainable Competitive AdvantageCompetitive Advantage
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Strategic Market Planning
A planning process to develop or improve sustainable competitive advantage. (Neal, “Introduction to Marketing
Strategy”)
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The Kotler Model*
MarketingOpportunity
Analysis
TargetMarket
Selection
MarketingMix
Strategy
MarketingSystems
Development
Product & Market Levels: The Market PlanningProcess
CompanyMission
Objectivesand
Goals
GrowthStrategy
BusinessPortfolio
Plan
Corporate & Divisional Levels: Strategic Planning Process
* Philip KotlerBusiness MagazineMay-June 1980, pp3
Modified by W.D. Neal30 April, 1986
Execution
Environment
Information
Macro-environment
Publics
Competitors
Marketing Channels
Markets
Target Markets
Customers
Market SegmentationProduct Positioning
Prod. OptimizationMarket Forecasting
Customer SatisfactionBrand Value
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The Major Elements of the Strategic Planning Process at
the Enterprise Level
• Mission• Goals & Objectives• Growth Strategy• Business Portfolio Plan
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Mission
• Short statement of the business you are in
• Used to focus and limit your purview
• Often the hardest step in the process
• Often accompanied with a VISION STATEMENT - what do I want to be in the future.
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Goals & Objectives
• Goals - longer term, broader outcomes you are seeking (e.g. lead the industry in sales and service)
• Objectives - shorter term, totally measurable outcomes (e.g. sustain a 10% increase in annual profitability for each of the next three years)
• Each goal should have multiple, time-phased objectives crafted so that their accomplishment will fulfill the goal.
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Growth Strategy• To grow by how much over what time period.• How will we measure growth - sales, profits,
share, operating ratios, etc.• How will we grow?
– Higher Demand– New products – Market expansion– New market penetration– Production efficiency– Acquisition– etc.
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Business Portfolio Plan
• What elements of my business will I put under the same management group?– By brand family – By product line– By geographic/country location– By channel– By buyer benefits delivered– etc.
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Developing The Strategic Marketing Plan
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Step 1 - Assessment
SWOT Analysis
– Strengths
– Weaknesses
– Opportunities
– Threats
Areas to AddressInternal Opns
Competitors
Markets
Marketing
Environment
Core knowledge
Experience
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The Kotler Strategic Planning Model
The Company TheEnvironment
Market SegmentationProduct Positioning
Product OptimizationMarket Forecasting
Corporate & Divisional Levels: Strategic Planning Process
Product & Market Levels: The Marketing Process
Company
Mission
Objectivesand
Goals
GrowthStrategy
BusinessPortfolio
Plan
Macro-environment
Publics
Competitors
Marketing Channels
Markets
Target Markets
Information
Execution
MarketingOpportunity
Analysis
TargetMarket
Selection
MarketingMix
Strategy
MarketingSystems
Development
Philip KotlerBusiness Magazine
May-June, 1980, pg..3Customer Feedback
Customers
Brand Value
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Step 2 - Marketing Opportunity Analysis
• Segment the market - What bases?– Needs/preferences– Values/benefits sought– Occasions– Demographics
• Align your strengths against competition’s weaknesses - BY SEGMENT– Share of market, Share of preference,– Channel control, Price advantage, Brand strength, – Price/value perception, Production capability, etc
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Market Segmentation
Firms that properly segment their market and focus their resources on deep penetration of targeted segments almost always exhibit higher profitability.
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Why is Market Segmentation usually successful?
• Focuses the resources of the firm on a specific target of similar customers.
• Limits competitive pressure.
• Allows the firm to develop a deep marketing-mix experience with the segment.
• Provides a platform for expansion into contiguous segments.
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Demographics(Life Stage)
Occasions
The Multi-Dimensional Segmentation ModelThe Multi-Dimensional Segmentation Model
Act
ivit
ies
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The Kotler Strategic Planning Model
The Company TheEnvironment
Market SegmentationProduct Positioning
Product OptimizationMarket Forecasting
Corporate & Divisional Levels: Strategic Planning Process
Product & Market Levels: The Marketing Process
Company
Mission
Objectivesand
Goals
GrowthStrategy
BusinessPortfolio
Plan
Macro-environment
Publics
Competitors
Marketing Channels
Markets
Target Markets
Information
Execution
MarketingOpportunity
Analysis
TargetMarket
Selection
MarketingMix
Strategy
MarketingSystems
Development
Philip KotlerBusiness Magazine
May-June, 1980, pg..3Customer Feedback
Customers
Brand Value
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Step 3 - Target Market Selection
• Evaluate segments in terms of your perceived strengths and weaknesses vs competitions’ -develop perceptual maps for segment groups
• First, select segments you currently dominate and determine how to defend and improve your position
• Next, select segments that you could dominate and prioritize by cost of domination.
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Step 3 - Target Market Selection (cont.)
• Finally, find any remaining segments that represent high growth potential and look at ways you could successfully enter those segments.– New product introduction– New brand platform– Power promotion
• Order segments by financial attractiveness and prioritize investments
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The Kotler Strategic Planning Model
The Company TheEnvironment
Market SegmentationProduct Positioning
Product OptimizationMarket Forecasting
Corporate & Divisional Levels: Strategic Planning Process
Product & Market Levels: The Marketing Process
Company
Mission
Objectivesand
Goals
GrowthStrategy
BusinessPortfolio
Plan
Macro-environment
Publics
Competitors
Marketing Channels
Markets
Target Markets
Information
Execution
MarketingOpportunity
Analysis
TargetMarket
Selection
MarketingMix
Strategy
MarketingSystems
Development
Philip KotlerBusiness Magazine
May-June, 1980, pg..3Customer Feedback
Customers
Brand Value
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Step 4 - Marketing Mix Strategy
FOR EACH TARGETED MARKETFOR EACH TARGETED MARKET…• Determine how you will optimize VALUE for
each target market, now and in the future• Plan the product/service attributes you will
emphasize• Plan your advertising/promotional support
program• Plan your channel/delivery strategy - avoid
channel conflict• Plan your pricing strategy
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Step 4 - Marketing Mix Strategy (cont.)FOR EACH TARGETED MARKETFOR EACH TARGETED MARKET…
• Develop contingency plans for likely competitor counter-attacks
• For each segment, determine how you will enhance your brand equity
• Use market simulation (preference or choice models) to test likely market response to your initiatives and to test competitive responses
• Check for incompatible brand and product positions across targeted segments
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The Kotler Strategic Planning Model
The Company TheEnvironment
Market SegmentationProduct Positioning
Product OptimizationMarket Forecasting
Corporate & Divisional Levels: Strategic Planning Process
Product & Market Levels: The Marketing Process
Company
Mission
Objectivesand
Goals
GrowthStrategy
BusinessPortfolio
Plan
Macro-environment
Publics
Competitors
Marketing Channels
Markets
Target Markets
Information
Execution
MarketingOpportunity
Analysis
TargetMarket
Selection
MarketingMix
Strategy
MarketingSystems
Development
Philip KotlerBusiness Magazine
May-June, 1980, pg..3Customer Feedback
Customers
Brand Value
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Step 5 - Marketing Systems
• Forecast the growth in each targeted segment
• Develop selling and delivery systems that will support the current market and can handle the forecasted growth.– Market information systems– Customer service operations– Communications programs
• Develop a customer feedback system that measures plan vs. actual
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The Kotler Strategic Planning Model
The Company TheEnvironment
Market SegmentationProduct Positioning
Product OptimizationMarket Forecasting
Corporate & Divisional Levels: Strategic Planning Process
Product & Market Levels: The Marketing Process
Company
Mission
Objectivesand
Goals
GrowthStrategy
BusinessPortfolio
Plan
Macro-environment
Publics
Competitors
Marketing Channels
Markets
Target Markets
Information
Execution
MarketingOpportunity
Analysis
TargetMarket
Selection
MarketingMix
Strategy
MarketingSystems
Development
Philip KotlerBusiness Magazine
May-June, 1980, pg..3Customer Feedback
Customers
Brand Value
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Strategic Planning• Strategic market planning is non-linear and
recursive (and sometimes chaotic)• The interface between the overall business
strategy and the strategic marketing plan is critical - they must be fully integrated
• Ultimately, the strategic business plan dictates the amount of investment you can afford in your marketing plan
• Develop a plan to measure costs, effectiveness, and progress to objectives - ROMI
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Winning StrategyWinning Strategy - - Maximize Maximize valuevalue which maximizes which maximizes
loyaltyloyalty for each target market for each target market• The KEY to customer LOYALTY and growth
is to:– Get into the consideration set– Then, consistently deliver the BEST VALUE to
the targeted customers.
• VALUE is the KEY DRIVER of choice, thus LOYALTY!
• Brand Equity should be a major element of the VALUE PROPOSITION.
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Why is Brand Equity Important?
• Prevents commoditization of the category.• Communicates added value beyond the tangible
product performance characteristics, improving selling price and margins.
• Provides a strong defense against low price generic brands.
• Provides a platform for new product introductions.• Gives more channel control to the
manufacturer/producer. • Improves stockholder value and stock price.
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Competing Theories of Brand Equity
Financial Orientation– Interbrand - Premium over category avg.– Accepted Accounting Procedures– Farquar - New Accounting Procedure
Market Orientation– Total Research - Equitrend– Landor Associates– Aaker– Young & Rubican– CDB Research– Vanderbilt/SDR (Srinivasan, Russell, Kamakura)
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MARKETPLACE APPROACH
TOBRAND EQUITY
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Competing Market Theories of Brand Equity
• Aaker-Building Strong Brands. Views brand equity as the total value of a brand, including price premium, satisfaction, product attributes, image attributes, public opinion, and so forth.
• Vanderbilt Model - (MSI Series on Brand Equity.) (Srinivasan, Russell, Kamakura) Views brand equity as just the imagery that surrounds the brand name by buyers in the product category. Brand equity is separate from price and product performance attributes and may be measured as a price differential.
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Aaker’s 10 Measures
• Loyalty Measures– Price Premium– Satisfaction/Loyalty
• Perceived Quality/Leadership Measures– Perceived Quality– Leadership/Popularity
• Associations/Differentiation Measures– Perceived value– Brand Personality– Organizational Associations
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Aaker’s 10 Measures (cont.)
• Awareness Measures– Brand Awareness
• Market Behavior Measures– Market Share– Market Price & Distribution Coverage
“The price premium may be the best single measure of brand equity available, because it directly captures the loyalty of customers in a most relevant way.” Aaker, pg 321.
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Aaker’s 10 Measures (cont.)
• Aaker model uses very disparate measures for
each of the 10 criteria.
• Uses judgement to weight measures, depending
on the product category, in order to construct a
single summary measure.
• Does not work cross-culturally because of
measurement and scaling issues.
• Gives no examples
• Ultimately, it is totally judgmental.
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BRAND VALUEVanderbilt/SDR Model
(Combines market orientation and financial orientation)
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The Brand Value Model•Idea developed from literature of
Srinivasan, Russell & Kamakura
• Very similar model described by Srinivasan & Park (JMR, May 94) (used expectancy-value measurement model)
• SDR’s approach uses tradeoff exercises combined with other measurements.
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Brand Value Concept1. Buyers who are considering a purchase, scan their
product/service options and develop a consideration set.
2. Within the consideration set, they develop a hierarchy of brands/products based on their assessment of VALUE.
3. Typically, they choose the brand or product at the top of their value hierarchy, if available.
THIS MAY BE A CONSCIENCE COGNITIVE PROCESS, OR A SUB-CONSCIENCE PROCESS WITH SOME EMOTIONAL ELEMENTS
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The
All Products/servicesin the Category
Consideration SetBrand Hierarchy* Brand V* Brand X* Brand Z
Brand Value ConceptBrand Value Concept
The rational buyerpurchases the brand withthe highest value
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How Brands Get Into the Consideration Set
• Awareness
• Satisfaction in previous experience, or reputation for
high satisfaction of customers
• Trusted
• Compatible image with purchaser
• Perceived acceptable price range
• Not socially irresponsible
• Acceptable country of origin
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Brand Value Concept
Elements of Brand Value:Elements of Brand Value:
- A BUNDLE of tangible attributes delivered by the product/service or its channel.
- A BUNDLE of intangible attributes delivered by the name of the brand or producer (brand image or brand equity.)
- The price of those combined bundles.
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Brand Value Concept
Customers determine brand value
Varies by customer and customer segment
Varies by product/service category
Any one Customer may have a different value set for different product categories
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ValueValue
Brand Value ModelBrand Value Model
What Drives Value ?What Drives Value ?
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ValueValue
Price
Brand Value ModelBrand Value Model
PricePrice is one element is one elementPrice includes:Price includes:
- Initial Costs- Initial Costs- Operating Costs- Operating Costs
Initial PriceOperating Cost
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ValueValue
Price Product/ServiceDeliverables
Attribute 1Attribute 2Attribute 3etc..
Brand Value ModelBrand Value ModelThe bundle of tangible product/service attributesis another.
Product Product PerformancePerformance
Service/ChannelService/ChannelPerformancePerformance
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ValueValue
Price Product/ServiceDeliverables
Co./Brand Equity
Image Driver 1Image Driver 2Image Driver 3etc..
Attribute 1Attribute 2Attribute 3etc..
Brand Value ModelBrand Value Model
Brand equityBrand equityis the thirdis the thirdelement.element.
Attribute 1Attribute 2
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ValueValue
Price Product/ServiceDeliverables
Co./Brand Equity
Image Driver 1Image Driver 2Image Driver 3etc..
Attribute 1Attribute 2Attribute 3etc..
Brand Value ModelBrand Value Model
WPrice
Wi
WiAttributesWbrand
WiWiWi Wi
Wi
Wi
Wi
Each elementEach element of ofthe brand valuethe brand valuemodel has a model has a weightweight
Wi
WiAttribute 1Attribute 2etc..
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ValueValue
Price Product/ServiceDeliverables
Co./Brand Equity
Image Driver 1Image Driver 2Image Driver 3etc..
Attribute 1Attribute 2Attribute 3etc..
Brand Value ModelBrand Value Model
WiWiWiWi Wi
Wi
Wi
Wi
Each buyer hasEach buyer hasa different a different weightweightstructurestructure
WiAttribute 1Attribute 2etc..
Wi
WPrice WiAttributesWbrand
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ValueValue
Price Product/ServiceDeliverables
Co./Brand Equity
Image Driver 1Image Driver 2Image Driver 3etc..
Attribute 1Attribute 2Attribute 3etc..
Brand Value ModelBrand Value Model
WiWiWiWi Wi
Wi
Wi
Wi
The buyer’s weightThe buyer’s weightstructure is theirstructure is theirValue EquationValue Equation
Wi
WiAttribute 1Attribute 2etc..
WPrice WiAttributesWbrand
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Brand Value Model
• EachEach buyer has a buyer has a uniqueunique Value EquationValue Equation
• The Value Equation provides the buyer The Value Equation provides the buyer with a with a preference structurepreference structure for making a for making a CHOICECHOICE among a competing set of among a competing set of products or services in a category.products or services in a category.
• Rational buyers choose the best Rational buyers choose the best VALUEVALUE..
• Thus Thus VALUEVALUE drives drives CHOICECHOICE..
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ValueValue
Price Product/ServiceDeliverables
Co./Brand Equity
ChoiceChoice
Image Driver 1Image Driver 2Image Driver 3etc..
Attribute 1Attribute 2Attribute 3etc..
Brand Value ModelBrand Value Model
WPrice
Wi
WiAttributesWbrand
WiWiWi Wi
Wi
Wi
Wi
Wi
WiAttribute 1Attribute 2etc..
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Brand Value ManagementBrand Value Management
BRAND VALUEBRAND VALUE
• Varies by product/service category.Varies by product/service category.
• Price and performance features can often be met Price and performance features can often be met by competitors.by competitors.
• Brand equity is more difficult to change - long Brand equity is more difficult to change - long term strategy - Both offensive and defensive.term strategy - Both offensive and defensive.
• When there is weak brand equity and product/ When there is weak brand equity and product/ channel parity in a category, price is the only channel parity in a category, price is the only remaining marketing variable.remaining marketing variable.
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Brand Equity CharacteristicsBrand Equity Characteristics
BRAND EQUITYBRAND EQUITY Intangible, varies by categoryIntangible, varies by category Not easily duplicated, thus provides long-Not easily duplicated, thus provides long-
term defense against competitionterm defense against competition Underlying drivers are perceptual:Underlying drivers are perceptual:
– Image imparted to the purchaserImage imparted to the purchaser– TrustTrust– Longevity in the marketplaceLongevity in the marketplace– Reputation for qualityReputation for quality– Community involvementCommunity involvement
Built and improved by effective advertisingBuilt and improved by effective advertising
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Brand Value/Equity MeasurementBrand Value/Equity Measurement
ASSUMPTIONSASSUMPTIONS
• Buyers optimize value within a product or service category.
• Buyers therefore assign utilities (weights) to price, performance attributes, and brand equity.
• Buyers trade off performance attributes and brand equity against price in order to optimize value.
• The utilities (weights) of price, performance attributes and brand equity is summative and equal to total brand value.
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Brand Value/Equity Brand Value/Equity MeasurementMeasurement• First, we use conjoint models to estimate
utilities.
• Respondent goes through two tradeoff tasks
TASK 1TASK 1 - Brand-Price tradeoff - Brand-Price tradeoff
TASK 2TASK 2 - Brand-Features-Price tradeoff - Brand-Features-Price tradeoff
• Merge results of both tasks at the respondent subgroup level and re-scale to be comparable.
• Purpose is to get accurate estimate of price utility
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Measurement ModelMeasurement Model
Total Value Total Value
(U(Utt))
Price (Upr) Product (Upt)
Attribute 1
(u1)
Attribute 2
(u2)
Attribute J
(uj)Brand
(Ub)…
First stage conjointFirst stage conjoint
Second stage conjointSecond stage conjoint
PriceX
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Task 3 - Choice Task• Respondent then goes through a CHOICE
TASK that is based on their conjoint results.• Respondent is asked if they would switch
to, or purchase next, their highest rated conjoint profile.
• IF YES, we ask about another (lower) profile, and so on until they would not purchase or switch.
• PURPOSE: measure barriers to switching and confirm conjoint results
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Task 4 - Brand Image Ratings
• Each brand in the competitive set is also rated (0-10 scale) on its imagery, for example:– A brand I can trust
– A brand that I want seen in my home
– A company that will fix any problems I may have with their product
– etc.
• Ratings are then (ridge) regressed against derived brand equity from the conjoint to get the relative weight of each image driver.
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Task 4 - Brand Image Ratings
• The beta coefficients from the ridge regression (or similar models) reveal the key drivers that are most associated with each brand’s utility (derived brand equity)
• Thus, you can reveal the key drivers of brand equity, improve your imagery on those attributes and improve brand equity
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Brand Equity DRIVERS – Service Co.Brand Equity DRIVERS – Service Co.
Honest in its dealings with customers Concerned about my family’s needs Progressive and innovative Respects me as a customer Is well managed Efficient in coordinating the service activities
of different departments Keeps me informed of energy matters that are
important to my family’s health Easy to do business with Contributes to the community
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Average Importance of the Elements of Brand Value
Category Price Product/ChannelAttributes
Brand/Co.Equity
Carbonated Soft Drinks 22% 40% 38%
A Class of Automobiles 24% 68% 8%
Consumer Paper Products 48% 46% 6%
Sports Drinks 8% 34% 58%
Canned Pet Food 50% 43% 7%
Electric Utility 15% 80% 5%
Industrial Electronic Equip 16% 72% 12%
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Brand Valuation Brand Valuation RESULTSRESULTS• With this type of model, you can build a
market response simulator to determine how each marketing mix variable effects share of choice.
• Changes in BRAND EQUITY can be tracked over time.
• Changes are relative to other products/ brands in the category.
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ValueValue
Price Product/ServiceDeliverables
Co./Brand Equity
ChoiceChoice
Image Driver 1Image Driver 2Image Driver 3etc..
Attribute 1Attribute 2Attribute 3etc..
Brand Value ModelBrand Value Model
WPrice
Wi
WiAttributesWbrand
WiWiWi Wi
Wi
Wi
Wi
Wi
WiAttribute 1Attribute 2etc..
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Winning Strategy - Maximize value which maximizes loyalty
for each target market
• The KEY to customer LOYALTY and growth is to consistently deliver the BEST VALUE to the customer.
• VALUE is the KEY DRIVER of choice, thus LOYALTY!
• Brand Equity can be a major element of the VALUE PROPOSITION.
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Market Segmentation Based on Market Segmentation Based on the Value Modelthe Value Model
• Derive the value equation for each respondent in the survey.
• Each buyer’s value equation can be used as the basis for segmenting the market.
• Form groups of respondents who have similar value structures (e.g. price sensitives, service sensitive groups, product performance sensitive groups, etc.)
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Brand Value ModelBrand Value Model
• Each buyer has a unique value equation.
• We use modified conjoint/choice exercises to determine that value equation for each respondent.
• From the derived utilities and choice information, we can determine each respondent’s switching behavior under different competitive scenarios.
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From the Brand Value Model
• We can determined who switched.
• We can determine why they switched.
• We can describe the switchers.
• We can describe the non-switchers.
FOR EACH COMPETITIVE SCENARIOFOR EACH COMPETITIVE SCENARIO
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This led us to a discovery!This led us to a discovery!There are different kinds of loyalty!• Some people are loyal because they are
committed to a brand or company.• Some are loyal because a particular brand
offers some unique benefits or performance characteristics.
• Some are loyal because they won’t spend the time or effort to make an evaluation.
• Some are loyal because they have little choice.• And some are just disloyal, buying on price or
convenience alone.
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Some Parting ThoughtsSome Parting Thoughts
• A label is not a Brand!
• Advertising and Promotion costs to support a brand is an investment, not an expense.
• The starting point, and the KEY to building Brand Equity, is to define what you want your brand to stand for - the implied contract you have with the consumer.
• Then, support that brand image in every way - in all selling materials, with distributors & retailers, in advertising, promotion, and PR.
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Some Parting ThoughtsSome Parting Thoughts
• You can stake out a brand promise in many ways:– The highest quality in the category– Good & Economical– Available everywhere - systems, parts and repair– The best designs in the business– Extreme versatility/diversity
• Make sure your performance (and your channels’ performance) backs up your promise - walk the talk!
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Some Parting ThoughtsSome Parting Thoughts
• Strong brands mitigate channel dominance and product commoditization.
• Strong brands pull product through the channel.
• Strong brands improve profit margins.
• Strong brands build stockholder equity.
• If you do not build strong brands in your category, someone will do it to you!