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Designing Marketing Programs to Build Brand Equity. Chapter 5. Overview. How do marketing activities in general — and product, pricing, and distribution strategies in particular—build brand equity?
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Designing Marketing Programs to Build Brand Equity Chapter 5
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?
New Perspectives on Marketing • The strategy and tactics behind marketing programs have changed dramatically in recent years as firms have dealt with enormous shifts in their external marketing environments
Changes are…. • Digitalization and connectivity • Customer Empowerment • Fragmentation of media • Customization (through tailored products and co-creation • Industry convergence (blurring of industry boundaries) • Globalization and growth of developing markets • Heightened environmental and social concerns
Awareness refers to the strength of a brand’s presence in the consumer’s mind • Consumers instinctively prefer a brand that they have previously seen to one that is new to them • Familiar brand has an edge!
Brand awareness A known devil is better than an unknown angel
Personalizing Marketing • Experiential Marketing • Promote the product in a way that connects it with the audience in a unique and interesting manner. • Experiences can come in 4 varieties: • Entertainment • Education • Aesthetic • Escapist
75% Market Share • No benefit of the product • Focused on customer • it’s not if you get this iPod you will be cool, but rather you are getting this because you are cool
SEMs or ‘strategic experience modules’ • SENSE • FEEL • THINK • ACT • RELATE
One-to-OneMarketing Relationship Marketing • Focus on individual customers • Respond to dialogues: “Consumers talk to us” • Customise products and services PermissionMarketing • Practice of marketing to consumers only after they give permission • The worse marketing clutter gets, more effective is permission marketing
Customisation Advantages • Reduces inventory • Has a lot of potential with e-commerce • Potential with service organisations
Perceived quality Perceived quality can be defined as the customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives
Perceived quality Perceived quality is an intangible and overall feeling about a brand Perceived quality cannot necessarily be objectively determined because it is a perception Perceived quality could be different for the corner store versus the department store Both are judged by a different set of criteria Perceived quality differs from satisfaction A positive attitude could be generated because a product of inferior quality is very inexpensive
AfterMarketing • Focus on the augmented product • After-sales service • User Manuals • Loyalty/Frequency programs
Value generated by perceived quality In many contexts, perceived quality provides the pivotal reason to buy Could differentiate and be a principal positioning characteristic of a brand Provides the option of charging a premium price Could be meaningful to channel members and thus aid in gaining distribution
Pricing Strategy • Consumer Price Perceptions • Setting Prices to build brand equity
Pricing Implication • Price cuts will effect different brands differently • High quality brands can easily “steal” market share from low quality brands by cutting price • At the same time, it may not always hold true • But lower quality brands will not steal share from a high quality brands by cutting price
Channel Strategy • Channel Design • Direct Channels • Company Owned Stores • They can act as advertisements and tourist attractions • Create own shops in major department stores • Indirect Channels • Retailers • Tiered Marketing • Web Strategies • Bolsters other marketing efforts • Makes brand more engaging
Indirect Channels • Retailers
