For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Brands and Stakeholder Relationships

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin  What does “brand” mean?  How are brands created and maintained?  How are brand relationships created and maintained?  What is brand equity and how is it created? Chapter Outline

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Building Brand Relationships With Customers Create Customers Reward: Sales Reward: More Sales and Profits Reward: Sales Building Brand Relationships With Customers Create Customers Chapter Perspective: Changing World Traditional Product Focus Brand-Focus

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin What Does “Brand” Mean? Brand: A perception resulting from experiences with, and information about, a company or line of products Branding: The process of creating a brand image that engages the hearts and minds of customers

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Differentiates a Product From Its Competitors Makes a Promise to Consumers Differentiates a Product From Its Competitors What Does “Brand” Mean? What a Brand Does Serves As the Driving, Unifying Force Directing All Functional Areas, Including IMC

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Tales From the Real World There is an tendency to think of most brands in terms of tangible product categories like soft drinks or breakfast cereal. However, in the real world, there are many intangible brands. One example is the fact that every four years professionals from major MC agencies are enlisted in the U.S. presidential election campaigns—to help “brand” one of the candidates.

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Each of These Colleges Represents a Brand Image

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Brands are often represented by logos Logos: Distinctive graphic designs used to communicate a product, company, or organization identity

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin The Power of a Brand 59% Chose Kellogg’s 41% Chose No Brand Consumers willing to pay $75 more for Hitachi than GE Identical cereals tasted by consumers: Vs. Identical TV sets examined by consumers: Vs.

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Retailers are creating their own brands Store Brands (a.k.a. house brand or private label): A brand used exclusively by one chain of stores for a line of products made to a store’s specification

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Determining the Desired Brand Position Developing Brand Identification Determining the Desired Brand Position How Are Brands Created? 3 Key Steps Creating Brand Image

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Figure 3-1: Determining the Desired Brand Position

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Monster.Com Is a Distinctive Brand Name

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Examples of Well Known Brand Logos

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Craftsman Is a Legally Protected Trademark of Sears

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin The Marines Have Developed a “Tough” Image

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Insight: Stakeholder Overlap Organizations must assume that multiple stakeholder groups may be exposed to brand messages. In other words, stakeholders overlap. For example an IMC audit for a bank found that 95 percent of the bank’s employees were also bank customers and that 75 percent owned shares of the bank’s stock. Marketers must make sure that brand messages are acceptable to all stakeholders and that the presentation of the brand image and position is consistent for all of these groups.

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Responsive- ness Consistency Accessibility Commitment Responsive- ness Consistency Accessibility Aspects Fostered by the Company Relationship Aspects Relationship Aspects

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Liking Satisfaction Trust Liking Trust Aspects Arising from the Consumer Relationship Aspects Relationship Aspects

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Loyal Word of Mouth Advocates Can Be Highly Persuasive With Other Consumers Current Heavy Users Typically Account for Most of a Brand’s Revenue Selling to Existing Customers Is Much Less Costly Than Attracting New Customers Existing Brands Account for Most of the Brand Communication With Consumers Current Heavy Users Typically Account for Most of a Brand’s Revenue Existing Brands Account for Most of the Brand Communication With Consumers Selling to Existing Customers Is Much Less Costly Than Attracting New Customers Maintaining Relationships Is Critical

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Maintaining relationships is critical Customer Relationship Management (CRM): The optimization of all customer contacts through the distribution and application of customer information. Simply stated, it is your promise, that no matter how your customers interact with you, you will always recognize who they are

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Figure 3-5: Relative Importance of Different Stakeholder Groups + +

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Brand licensing Broadening distribution Brand extensions Co-branding Brand extensions Broadening distribution What Is Brand Equity and How Is It Created? Brand equity: The intangible value of a company beyond its physical net assets 4 Ways of Leveraging

For use only with Duncan texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Final Note: One of IMC’s most important contributions: Helping to build trust in brands… …therefore enhancing consumer relationships Reason: An organization’s communication with its stakeholders influences everything else it does