Marketing Programs to Build Brand Equity

New Perspectives on Marketing

W Changes in economic, technoIogicaI, poIiticaI- IegaI, socio cuIturaI and competitive
environment.
W According to KotIer five major drivers of this new economy:
a. Digitalization and connectivity ( through nternet, ntranet and mobile devices.)
b. ntermediaries ( via new middleman of various sorts)
c. Customization ( through tailored products)
d. ndustry convergence ( through the blurring of industry boundaries)
e. New Consumer & Company Capabilities
New Consumer
Substantial increase in consumer power.
A greater variety of available goods & services
A great amount of information about practically anything
A greater ease in interacting and in placing and receiving orders
An ability to chat with strangers and compare notes on products and services
Company CapabiIities
Can operate a powerful new information and sales channel
Can collect fuller and richer information about their markets, customers, prospects and competition.
Can facilitate two way communication with their customers and prospects
Can have better and effective advertisement and promotion.
Can customize their offerings and services to individual customers
Can improve their purchasing, recruiting, training and internal & external communication
Personalized Marketing
W PersonaIized Marketing:
a. Experimental Marketing b. One to One Marketing c. Permission Marketing
a. Experimental Marketing:
Experimental marketing promotes a product by not only communicating a product's
features and benefits but also connecting it with unique and interesting experiences.
The idea is not to sell something, but to demonstrate how a brand can enrich customers
life.
Experimental Marketing Focus on:
a. Focus on Customer Experience
b. Focuses on consumption situation
c. View Customers as rational and emotional animals
d. Uses electric methods and tools
Five different types of experiences- sense, feel, think, act and relate
Communications, visual/ verbal identity and signage, product presence, co-branding,
electronic media and sales person can be used as a part of a marketing campaign to
create these experiences.
Personalized Marketing
W PersonaIized Marketing:
a. Experimental Marketing b. One to One Marketing c. Permission Marketing
b. One to One Marketing:
Don Peppers and Martha Rogers have popularized the concept of one to one
marketing.
t's a shift from transaction based marketing to relationship marketing.
The idea is not to sell something, but to demonstrate how a brand can enrich customers
life.
One to One Marketing Focus on:
a. Focus on individual consumers through consumer database
b. Respond to consumer dialogue via interactivity ( The consumer talks to us)
c. Customize products and services ( We make something unique for him/her)
mportance of one-to-one marketing is treating different consumers differently because
of their different needs, different value and son on.
n one-to-one marketing, consumers help to add value by providing information to
marketers; marketers add value, in turn taking that information and generating
rewarding experiences.
mportance of devoting more marketing effort to the most valuable consumers.
Personalized Marketing
W PersonaIized Marketing:
a. Experimental Marketing b. One to One Marketing c. Permission Marketing
c. Permission Marketing:
t is the practice of marketing to consumers only after gaining their express permission.
Marketer can no longer employ interruption marketing ( mass media, campaign, direct mail, bill
boards etc) consumer have come to expect but not necessarily appreciate.
Godin argues that if marketers want to attract a consumer's attention, they first need to get his or her
permission with some kind of inducement- a free sample a sales promotion or discount a contest
and so on. By eliciting consumer cooperation in this manner, marketers can potentially develop
stronger relationship.
Five Steps of Effective Permission Marketing :
a. Offer the prospect an incentive to volunteer.
b. Offer the interested prospect a curriculum over time, teaching the consumer about the product
or service being marketed.
c. Reinforce the incentive to guarantee that the prospect maintain the permission.
d. Offer additional incentive to get more permission
e. Over time leverage the permission to change consumer behavior towards profits
Permission marketing can be seen as developing the consumer dialogue component of one-to-one
marketing.
Product Strategy
W The heart of great brand is invariable a great product.
W Designing and delivering a product or service that fully satisfies consumer needs and
want is prerequisite for successful marketing.
W Perceived QuaIity and VaIues
Perceived quality has been defined as customer's perception of the overall quality or
superiority of a product or service.
Achieving a satisfactory level of perceived quality has become more difficult as
continual product improvement over the years have led to heightened consumer
expectation regarding quality of product.
Dimensions of Perceived Product Quality
Performance: Levels at which primary characteristics of the product operate ( Low
medium High)
Features: Secondary element of a product that complement primary characteristics.
Conformance Quality: Degree to which product meets specifications and absent of
defects.
Reliability: Consistency of performance
Serviceability: Ease of servicing the product
Style and design: Appearance or feel of quality.
Product Strategy
W rand IntangibIes
Product quality depends not only on functional product performance but on broader
performance consideration aswell. For example product quality may be effected by
factors such as speed, acuracy, care of product delivery, instllation, promptness,
courtesy and helpfulness of customer service and training.
TQM
Objective of TQM department is to maximize the quality of the product.
TQM principles have provided important guidelines to marketing manager to improve
quality.
Quality must be perceived by customers.
Quality must be reflected in every company acititvity
Quality requires total employee commitment
Quality requires high quality partners
Quality doesn't always cost more
Quality is necessary may not be sufficient
A quality drive can not save poor product
Product Strategy
VaIue Chain
Consumers often combine quality perceptions with cost perception to arrive at
assessment of the value of the product.
Value Chain as a strategic tool for identifying ways to create more customer value.
Firms to perform activity of designing, producing, marketing, delivery and support of the
product.
Five mportant Value Creating Activities:
nbound logistics, outbound logistics, marketing & sales, and service
Four Support Activities
Firm nfrastructure, human resources, technology development and procurement
Product Strategy
W #eIationship Marketing
Actual product or service to create stronger bonds with consmers and maximize brand
resonance.
Relationship marketing is based on the principle that current customers are the key to
long term brand success.
Relationship marketing attempts to provide a more holistic, personalized brand
experience to create stronger consumer ties.
The new approaches to marketing reviewed( experimental, one to one & permission)
can all seem as means of creating stronger consumer brand relationship
enefits of #M
a. Acquiring new customers can cost five times more than the costs involved in
satisfying and retaining current customers.
b. n average company loses 10 percent of its customers each year.
c. The customer profit rate tends to increase over the life of the retained customers
Product Strategy
W #eIationship Marketing
Three important reIationship marketing issues:
a. Mass Customization b. After Marketing c. Loyalty Programs
a. Mass Customization
Mass customization , making product to the fit the customers exact specification
Mass customization can reduce inventory
Not every product is easily customized and not every product demands customization
Mass customization is not restricted to product only
b. After Marketing
After marketing is those marketing activities that occur after customer purchase.
t is devoted to encourage trial and repeat purchase by consumers
After marketing involves more than the design and communication of product instruction. t reminds
of building lasting relationship with customer
After marketing can also involve the sale of related, complimentary product that are ingredients. For
eg printer with computer
c. LoyaIty Programs:
Creates stronger ties with customer.
dentifying, maintaining & increasing the yield from firm's best customer'
Specialized services; Loyalty club , frequency card, newsletter, incentives
Loyalty programs reduce defection rate and increase retention
Tip for buiIding effective IoyaIty programs:
Know your audience. Change is good. Listen to your best customer. Engage People
Pricing Strategy
W Consumer Price Perception
Pricing strategy defines how consumer categorize the price of the brand.
Regulator of product demand & supply
Consumer often ranks brand according to price tiers in a category. Basis of quality of
assesment
W Setting prices to buiId brand equity
a. A method or approach for how current prices will be set.
b. A policy or set of guidelines for depth and duration of promotion and discount over
time.
Factors related to the costs of making and selling products and the relative prices of
competitive products are important determinants of the optimal pricing strategy.
Many firms are now employing a value pricing approach to set prices everyday.
Pricing Strategy
W VaIue Pricing
The objective of value pricing is to uncover the right blend of product quality, product
costs and product prices that fully satisfies the need and wants of consumer and the
profit target of the firm.
n this challenging new environment, several firms have been succesful by adopting a
value- pricing strategy. For example Wal-Mart's slogan " We sell for less describes the
pricing strategy.
An effective value-pricing strategy could strike the proper balance of the following:
a. Product Design & Delivery
b. Product Costs
c. Product Prices
a. Product Design & Delivery:
First key is the proper design and delivery of the product.
The concept is not selling of product at lower price but consumers are willing to pay
premiums when they perceive added value in the product & service.
Pricing Strategy
b. Product Costs
The second key to a successful value- pricing is to lower product costs as much as
possible through productivity gains, outsourcing, material substitution, product
reformulation, process changes etc.
c. Product Prices:
Final key to successful value pricing strategy is to understand exactly how much value
consumers perceive in the brand and thus to what extent they will pay a premium over
product costs.
Number of techniques are available to estimate these consumer value perceptions but
the most common approach is asking consumers their perceptions of price and value in
different ways.
Everyday Low Pricing ( EDLP)
Channel Strategy
ChanneI Design
Channel can be classified into direct channel & indirect channel.
Direct Channel involves selling through personal contacts from the company to
prospective through mail, phone, electronic measns, in-person visits etc.
ndirect channel involve selling through third party, intermediaries such as broker,
retailer, wholesaler, distributor etc
Direct channel may be preferred when
a. Product information needs are high
b. Product customization is high
c. Product quality assurance is important
d. Purchase lot size is important
e. Logistics are important
ndirect Channel may be preferred when
a. A broad variety is essential
b. Availability is critical
c. After sales service is important