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?

BACKGROUND

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

Consumers buy products; they choose brands!

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

SENSE

FEEL

THINK

ACT

RELATE

Relationship Marketing One-to-One Marketing Focus on individual customers Respond to dialogues: “Consumers talk to us” Customise products and services Permission Marketing 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 Web Strategies 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

Direct Channels

Store within a store

Indirect Channels Retailers

Web Strategies