Brand Management


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Brand Management

  1. 1. BRAND MANAGEMENTBenefits of BrandingProvides benefits to buyers and sellersTO BUYER: • Help buyers identify the product that they like/dislike. • Identify marketer • Helps reduce the time needed for purchase. • Helps buyers evaluate quality of products especially if unable to judge a products characteristics. • Helps reduce buyer’s perceived risk of purchase. • Buyer may derive a psychological reward from owning the brand, IE Rolex or Mercedes.TO SELLER: • Differentiate product offering from competitors • Helps segment market by creating tailored images, IE Contact lenses • Brand identifies the company’s products making repeat purchases easier for customers. • Reduce price comparisons • Brand helps firm introduce a new product that carries the name of one or more of its existing products...half as much as using a new brand, lower co. designs, advertising and promotional costs. EXAMPLE, Gummy Savers • Easier cooperation with intermediaries with well known brands • Facilitates promotional efforts. • Helps foster brand loyalty helping to stabilize market share. • Firms may be able to charge a premium for the brand.What is Intangible Brand Value?There has always been a struggle between marketers trying to convince corporate seniormanagement that the company’s brand is its most valuable asset and should be included in thecompany’s overall investment strategy to ensure it works its magic. However, what do you saywhen the men and women in the corner offices ask you to quantify your argument for why thecompany should invest in branding initiatives? The challenge for marketers has always beenfinding metrics to measure the value of a brand. Certainly, one can point to brands like Apple andmake the argument that the value of branding is too obvious to ignore. However, ignore it theywill unless you can prove its worth.Next time you head into a meeting in an attempt to secure budget for internal and externalbrand-building campaigns, use the list below to help you make your case. Use each item in thelist below and attach at least one real-world example to it, particularly from your own company’sor your competitors’ experiences. You might not win your first argument, but you might justopen some eyes about the intangible value of a brand.A strong brand creates a sense of security among consumers.They’re more comfortable with an existing, established brand, are more likely to trust it, buy it,and tell their friends about it. It brand extensions within the same category a leg up on thecompetition because the awareness marketing of the brand is already done.A strong brand boosts new product awareness and credibility.If your brand launches into a new market where it’s a new player, you can leverage the power ofyour brand in other markets where consumers may already be familiar with its reputation. 1
  2. 2. A strong brand helps salespeople close deals with business partners andcustomers.If a new client is trying to decide between two sales proposals with all things fairly equal, a strongbrand can help that client move in your direction simply because they know what to expect basedon the brand reputation.A strong brand can help the human resources department attract top talent.Many prospective employees can be tempted by the prospect of working for a company that ownswell-known brands. Much of it is a prestige move, because people like to be associated with themarket leader.A strong brand can help a company secure investments.A well-known brand name can help you not just get your foot in the door but also securefinancing for large-scale ventures. Investors and lenders like to feel secure in their investmentsand companies with strong brands are typically viewed as companies that won’t disappearanytime soon.A strong brand can shelter a company from a public relations disaster.Think of the Tylenol poisoning scandal in the 1980s. Had the company’s brand not been sotrusted, the company may not have rebounded as quickly as it did. Brand positioningBrand positioning refers to “target consumer’s” reason to buy your brand in preference toothers. It is ensures that all brand activity has a common aim; is guided, directed and delivered bythe brand’s benefits/reasons to buy; and it focuses at all points of contact with the consumer.Brand positioning must make sure that:• Is it unique/distinctive vs. competitors?• Is it significant and encouraging to the niche market?• Is it appropriate to all major geographic markets and businesses?• Is the proposition validated with unique, appropriate and original products?• Is it sustainable - can it be delivered constantly across all points of contact with theconsumer?• Is it helpful for organization to achieve its financial goals?• Is it able to support and boost up the organization?In order to create a distinctive place in the market, a niche market has to be carefully chosen anda differential advantage must be created in their mind. Brand positioning is a medium throughwhich an organization can portray its customers what it wants to achieve for them and what itwants to mean to them. Brand positioning forms customer’s views and opinions.Brand Positioning can be defined as an activity of creating a brand offer in such a manner that itoccupies a distinctive place and value in the target customer’s mind. For instance-Kotak Mahindrapositions itself in the customer’s mind as one entity- “Kotak ”- which can provide customized andone-stop solution for all their financial services needs. It has an unaided top of mind recall. Itintends to stay with the proposition of “Think Investments, Think Kotak”. The positioning youchoose for your brand will be influenced by the competitive stance you want to adopt.Brand Positioning involves identifying and determining points of similarity and difference toascertain the right brand identity and to create a proper brand image. Brand Positioning is the keyof marketing strategy. A strong brand positioning directs marketing strategy by explaining thebrand details, the uniqueness of brand and it’s similarity with the competitive brands, as well asthe reasons for buying and using that specific brand. Positioning is the base for developing and 2
  3. 3. increasing the required knowledge and perceptions of the customers. It is the single feature thatsets your service apart from your competitors. For instance- Kingfisher stands for youth andexcitement. It represents brand in full flight.There are various positioning errors, such as-1. Under positioning- This is a scenario in which the customer’s have a blurred andunclear idea of the brand.2. Over positioning- This is a scenario in which the customers have too limited aawareness of the brand.3. Confused positioning- This is a scenario in which the customers have a confusedopinion of the brand.4. Double Positioning- This is a scenario in which customers do not accept the claims ofa brand.5 Factors of Brand PositioningLet’s take a look at the 5 main factors that go into defining a brand position.1. Brand AttributesWhat the brand delivers through features and benefits to consumers.2. Consumer ExpectationsWhat consumers expect to receive from the brand?3. Competitor attributesWhat the other brands in the market offer through features and benefits to consumers.4. PriceAn easily quantifiable factor – Your prices vs. your competitors’ prices.5. Consumer perceptionsThe perceived quality and value of your brand in consumer’s minds (i.e., does your brand offer thecheap solution, the good value for the money solution, the high-end, high-price tag solution,etc.?).Effective Brand PositioningPositioning a brand in the consumers mind is critical to brand success. In age sameness, abrand must tout a variety of product or brand features and benefits, by drawing attention to themand promoting their value to the consumer.The act of developing certain brand characteristics and promoting them is one of the few ways abrand can be differentiated. Your own market is probably saturated with products that all looksimilar and offer the same benefits. Since most products or brands have a variety of features, suchas speed, accuracy, size, functionality, cost, style, specs, and more, each of these can beemphasized if they are truly critical to a segment of the consumer market. If you want your brandto be known for a subset of the potential features and benefits it offers, then you are fixing orpositioning the product brand in consumers minds as being about those attributes. You positiona brand in order to establish your product as a superior choice to competitors.Whats important to know is that many of your competitors will position their products and brandsthe same way you intend to. Thats when brand credibility comes into play. If you cancommunicate your brand positioning better, then consumers will view yours as the mostattractive or most credible. The credibility factor might only be delivered via the style of yourbrand communications. 3
  4. 4. d What is Brand Equity?Brand Equity is defined as the values and impressions, both long-lasting and fleeting, which affectconsumers’ choice of brand to purchase. These values and impressions are created by their:r Prior experience with the brandrforms):f Reception of and reaction to the brand’s communications.Consumers receive the brand’s message throughC Planned and paid efforts in: • Advertising • Promotions • Packaging • Public relations • Sponsorships • PartnershipsP Unpaid and unplanned channels such as: • Word-of-mouth • Third party endorsementsThe consumers relationship with the brand is established by these brand experiences (prior andnew) and communications. This means that Brand Equity is built (or diminished) in essentiallyevery touch point where the consumer interacts or experiences the brand.Example: brands with strong equitiesConsider the values and impressions you associate with these brands: • Adidas • Boeing • Cadbury’s or Hershey’s • Dell computers • Dolce & Cabana • Jet Blue or Easy Jet • Manchester United • Michelin • Porsche or Aston Martin • Pringles potato chips • Sony • The New York Times or The Economist • Virgin • VolvoWhy is Brand Equity important?Brand Equity is important for three major reasons:B Brand Equity creates shareholder valueB Brand Equity Building creates competitive advantageB Brand Equity management creates business growth opportunities.Brand Equity creates shareholder value 4
  5. 5. • Building Brand Equity establishes a bond with consumers and drives the desired consumer behavior. • Identifying, rationalizing, and taking steps to own the Brand Promise can ensure that the brand is emotionally connected with consumers, which establishes loyalty and commitment. Brands with high loyalty and commitment levels can command a premium price. • High brand equity therefore drives higher, faster, more profitable and less risky cash flows for the business.Examples of Brands strong Brand Equity:Pantene Healthy HairDove Restoring FemininityHeinz Ketchup (2001+) Fun, family and entertainmentVolvo Ability to protect loved onesNike Self realization through athletic activityThese brands have created long-term, consumer-preferred franchises that deliver reliable streamsof revenue and profit to their brand owners.Brand Equity Building creates competitive advantage • Few brands manage their equity consistently and at every consumer touch point. • Even fewer link their Brand Equity to marketplace and financial performance indicators. • Brand Equity is a facet of the brand that is often misunderstood and under-used. Developing a process to consistently measure, plan and develop Brand Equity is the true path to building strong brands and a sustainable competitive advantage.Brand Equity management creates business growth opportunitiesThe process of defining a Brand Vision (the second phase of the Brand Equity Process) requires anin-depth consumer understanding. The vision reveals the opportunities for the brand, both withinthe current business category and in new categories and businesses. Example Dove’s enhanced self-image through skin care equity enabled them to extend from soap into moisturizer and other beauty care categories (where growth and margins are higher). Virgins “Good deal for consumers” equity enabled them to extend to categories as diverse as insurance, phones, airlines, and even wedding dresses.How do you develop Brand Equity?Brand Equity is based on three components:B Brand PromiseB Category-specific EquitiesB General EquitiesBrand PromiseB The highest level, differentiating, emotional consumer benefit that the brand stands for (orintends to stand for) in the minds of consumers.i It is derived from the Hierarchy of Needs developed for each Consumer Domain.i the brand seeks to stand for this Brand Promise to ‘own’ this Equity.Category-specific Equities: • A specific set of performance or expectations that contribute to the category’s success. 5
  6. 6. • For example, in the oral care category, these could include cavity prevention and tooth whitening benefits. These are essential functional benefits that a winning oral care brand will need to deliver. In addition, the benefit of say “oral centered self confidence” is also an important emotional benefit that the brand will need to deliver. • Category specific equities are required qualifications that must be earned and maintained before the brand can own its Brand Promise.General Equities:G DifferentiationG RelevanceG Appreciation (likeability, trust, leadership, innovation)G KnowledgeG ValueG Quality (product satisfaction)By measuring General Equities you can benchmark the brand with others in any product categoryand compare it to other brands.Brand Equity is a critical driver of two financial performance indicators:B Top line revenue growthB Brand Gross MarginYou measure these three equity components individually and then combine the results into asingle Brand Equity scorecard. If Brand Equity scores rise relative to competitive brands and tobenchmarks set for it, the brand’s financial performance should improve (measured in top linerevenue growth and brand gross margin).4 Steps to Creating Brand EquityBrand equity stems from the customer’s experiences with your product or service. When acustomer has used your product over and over again, that builds equity, or value, in your brand.Your value to the customer is what separates you from your competition. It’s what makescustomers loyal to your brand and motivates them to refer to their friends.Many try to create the level of brand equity those great companies like Coca-Cola and Sony have.It takes hard work to get to that level, but it’s not impossible, especially when you implement thefollowing steps in your marketing plan.1. Define your positioning. This is the one thing your company stands for in the minds ofyour customers. You need to clarify your positioning in the market among your competitors. “One”is the important word here. You must define your brand position with just one element. Askyourself and your employees, what is the one thing that makes you different and better than thecompetition?2. Let everyone know your story and bring it to life. Position statements are often internalstatements that need to be made external. The way to do that is by telling a story. Document yourbest corporate stories, which are likely to come from the founder, that best reflect yourpositioning statement.Cracker Barrel, a well-known restaurant that serves “old country” food and has “old country”stores that shelve nostalgic brands of candy in nostalgic wrappers, is positioned to bring that oldcountry feeling back to people. Everything about their restaurants and stores reminds people of atime long gone. Their Web site and their menus tell the story of how the first store and restaurantopened in Tennessee in the 1960s to give travelers a place to get a good meal and pick up candyfor their kids on their way home. These old time stores often had a barrel of saltine crackers thatthe community members would gather around to visit with friends. And so Cracker Barrel was 6
  7. 7. born and its story is told through the menus, Web site and everything that is in the store, down tothe old look of the labels on the candy and other products. Cracker Barrel tells its story in text onits Web site and in everything it does in its stores, including the label printing.3. Build the brand before the transaction. Before the customer gets to the cash register, oreven to the store, start branding. The easiest way to do this is to give something away that hasyour branding on it. It doesn’t have to be something big; it could be a free notepad at the door oreven an email coupon for a free item in customers’ email inboxes. As long as the coupon has yourlogo and elements of your brand on it, it counts toward building your brand equity.4. Measure efforts. You can simply ask customers when they come into your store what theythink of your brand, or you can do some research on your own. You can send out surveys tocustomers and prospects in the area or you can check the social media conversations going onabout your brand. Consumers are quite active on forums, blogs and chats, especially when theyare unhappy about a product or service, so check out what people are saying about you online.Vendor-rating Web sites and are great places to start.By implementing these steps, the road to building brand equity will be a lot smoother and a lotshorter. And the great thing about these steps is that you can get started on that road todayExperiential Branding: Using 5 Senses to Build Brand EquityTodays consumers are confronted with countless choices and a multitude of information toconsider when they buy products or services. Traditional promotional methods like advertising inmagazines or on TV are no longer as effective as before. How can a company help their brandstand out? What will make their brand communication effective? In light of these questions andmany others, brand experience has emerged as an innovative and compelling way to build a brandin the minds of consumers.What is brand experience and experiential branding?Brand experience can be thought of as sensations, feelings, perceptions, and behaviouralresponses evoked by brand-related stimuli. The more powerful the experience is, the stronger thebrand impression. Brand experience also affects consumer satisfaction and loyalty; it allows thebrand to sell products at a premium and to create competitive entry barriers.Experiential branding is a process by which brands create and drive sensory interactions withconsumers in all aspects of the brand experience to emotionally influence their preferences and toactively shape their perceptions of the brand. Interactions involve communication, brand space,and product and service elements. These elements work together to affect brand equity.How does brand experience build brand equity?The combination of all interactions with communication, brand space, and product and serviceelements, make up a customers brand experience. The customer will then form a brandevaluation and perception based on these interactions. This is what builds brand equity in theconsumers mind, and it is composed of four key dimensions: differentiation, relevance, esteemand knowledge. Various experiential branding methods impact different dimensions of brandequity, which must be carefully considered by marketers or brand managers when utilizing these 7
  8. 8. methods.The Brand Asset Valuator (BAV) is a database of consumer perception of brands created andmanaged by Brand Asset Consulting, a division of Young & Rubicam Brands to provide informationto enable firms to improve the marketing decision-making process and to manage brands better.BAV/Brand Experience measures the value of a brand along four dimensions of brand equityand provides specific examples of experiential branding for each one, in order to discover howthis creative branding activity can be used successfully.Differentiation: Perceived distinctiveness of the brandDifferentiation is a brands ability to stand apart from others, and to gain consumer choice,preference and loyalty. It is the degree to which consumers find a brand unique. A compelling andmemorable brand experience can attract customers attention and maintain their interest, andtherefore contribute to brand differentiation.In recent years, companies like Nokia, Apple, Barbie, and Gucci have opened flagship stores inChina to provide more consumer-brand interaction opportunities. The newly-built Barbie Store inShanghai is a 6-floor mega store with a spa, design centre, café and interactive activitiesdesigned for girls. It became a hot spot in Shanghai very quickly, with thousands of girls nowvisiting the store every day. The branded experiences provided by the Barbie store willundoubtedly serve to differentiate the brand from others.Flagship stores are one way that companies can connect and interact with customers to participatein experiential branding. They are also places to display limited edition products and uniqueservice experiences, which can communicate the companies culture and brand values in waystraditional media cannot.Relevance: Personal appropriateness of the brandRelevance refers to how meaningful a brand is to their target consumers. Relevant brands are bothappropriate and appealing. Niche and growing brands may choose to focus first on differentiationand then on relevance, whereas leading brands will excel on all four dimensions.Adidas Brand Centre in Beijing is both experiential and meaningful for customers, so it contributesto brand relevance. The retail centre features a range of interactive zones including miCoach CoreSkills, the recently launched miOriginals, mi Adidas, a juice bar, a dedicated Urban area forexhibitions and events, a basketball court on the rooftop, a Concierge Desk and a childrens area.As you can see, there are products and interactions offered for Adidas various targeted marketsegments, ensuring that the customers experiences of the Adidas brand are highly relevant.Esteem: Regard for the brandEsteem measures the degree to which the target audiences regard and respect a brand. Esteem inshort, how well it is liked. When companies grow larger and become more mature, brand esteembecomes more and more important. Today, companies often use indirect experiential brandingmethods to build brand esteem. One way to do this is through the Internet and social networkingwebsites.With the recent popularity of social networking services (SNS) such as Face book, Twitter,Kaixin001, Renren, and many more, forward-thinking companies place their brand 8
  9. 9. inconspicuously in the pages, games, and posts, of these sites. SNS websites are a new mediawhich stimulate increased interaction with users. In the first half of 2009, Kaixin001 becameChinas most popular SNS with over 83 million registered. Brands, media agencies, andorganizations have used different approaches to connect with the community and target itsnetizens. An impressive and representative case is Lohas juice. It successfully promoted its brandin the popular SNS game "Kaixin Garden". Through this interactive game, the juice brand not onlypromotes its products, but also portrays a lifestyle and an attitude which influences thecustomers brand perception.Knowledge: Understanding of What the Brand Stands forKnowledge determines whether there is a true understanding of what a brand stands for. Brandawareness is a sub-component of knowledge. The level of brand knowledge is a signal of thecompanys past performance, as well as a foundation for its further development. Positive andaccurate understanding of the brand amongst target consumers results in brand loyalty. However,it is not enough for a brand to tell consumers what their brand means, they have to show them,and what better way to do this than through brand experience.This is what Nokia is doing with its global customer service and experience centre in Shanghai,which opened in August, 2009. The centre provides hardware repair and software services tousers of its mobile phones. The Shanghai experience centre is a place for customers to learn moreabout their Nokia cell phones and experience what Nokia brand stands for. Helping theircustomers develop a deep and comprehensive understanding of their company will help Nokiaconsolidate their customer loyalty and brand equity.Therefore we learn that experiential branding, a creative branding process through customerexperience, contributes to brand differentiation, esteem, relevance, and knowledge, and thereforeis an effective way to build brands. Through interactive technologies, innovative retail spaces, andindirect online brand communication methods, consumers can now see, touch, hear, taste, andsmell brands in ways they never could before. Flashy advertising and price-slashing productpromotions are often not sustainable methods for brand building. Experiential branding, with theobjective of building brand equity, has emerged as a promising and viable alternative.Brand Equity PyramidA standard tool for understanding a brand’s associations to customers’ response. The strongestbrands exhibit both “duality” (emotional and functional associations) and richness (a variety ofbrand associations or “equity” at every level, from salience to resonance). 9
  10. 10. How to Build a BrandFrom the traditional branding point of view, the brand building process is best represented by theBrand Equity model (Brandt and Johnson, 1997) as follows: 10
  11. 11. The Brand Building MatrixEXPERIENCE QUALITY • Customer perceptions • Tastes & levels of service • Customer service • Ingredients & raw materials used etc. • Actions of sales & delivery people • Product/service durability etc. • Guarantees and warrantees • Brand evolution over the years, • Cutting edge technology changes to any aspect of the brand must reflect the changing market demandsIDENTITY COMMUNICATION 11
  12. 12. • Strong & visible • PR & Advertising strategies • Memorable names • Quality letterheads & writing materials. • Logos & color • Internet presence • Sponsorships • News Releases, sponsored press articles etc. • Packaging etc. • Other verbal and non-verbal means used in • Shelf position & display communicating • Vehicle displays and branding • Corporate uniforms The Importance of Assets for Product ManagerMost brand managers focus on tangible, easily quantified assets. When you combine that with"next-quarter-it is," the national penchant for focusing on short-term numerical goals regardlessof the impact on brand equity, you get systemic long-term problems. While it’s most apparent inpublicly-traded companies, it’s contagious. In this mind set, for example, volume will always seemmore important than market share, and easy-to-measure quarterly results will matter more thanhard-to-measure customer satisfaction.Add to those institutional biases the short-term perspective of Brand Managers at General ____(fill in the blank) who know they’ll be on X Brand for 18 months, tops, before moving on to YBrand (or field sales, or something). They know their career path is paved with short-term fixes. Isit any wonder that budgets for indiscriminate high-value couponing (and other brand demotions)are growing far faster than budgets for brand-building?Come, let us audit together.Pick a brand, any brand. If you have more than one to choose from, pick the one that makes youlose sleep at night. Grab a pencil and keep score as we review sixteen of your brand’s vital assets.Use a separate piece of paper if you want someone else to go through this for the sake ofcomparison. 1. Name A brand’s most valuable asset can be the name itself. For one thing, a name can have inherent selling power when the word(s) stand for something, showcasing and explaining the uniqueness of the product or service. By this measure, for example, "Vapo-Rub" is more valuable, more descriptive, than "Formula 44," and Mercury "Cougar" promises more than Buick "Century." But this value of "name" pales in comparison with the enormous power of those brands that have built equity after decades of consistent brand-building activities. "Diet Rite," for example, no matter how descriptive and colorful, can’t approach the equity in "Diet Coke," a heritage built on a billion dollars of investment ad spending. In any brand asset audit, we give a lot of weight to the use (and occasional misuse) of a name. Investigating the practical limits of line extensions, for example, forces us to distinguish between those new product efforts that re-invest brand equity and those that dilute it. In box #1 on your scorecard, give your brand anywhere from 0 to 5 points for the salesmanship built into the meaning of the name … plus anywhere from 0 to 10 points for top-of-mind awareness, a fair measure of the value of the brand’s history of investment. 2. Packaging 12
  13. 13. It’s the ultimate final dialogue with the consumer. It must call attention to itself, set the product apart from the category and other products in its own line. We don’t know why packaging is so often regarded as separate from the selling process, a stepchild in the marketing family. Thinking of packaging and P.O.P. as brand assets to be invested in, and deployed like other managed assets, helps to focus on how important they are to the final sale. A family of packages can reassure consumers by projecting a persuasive brand personality and value-added consistency. At their most effective, packages can jump off the shelf … and close the sale. On your scorecard, give your brand from 0 to 10 points for packaging and P.O.P. strengths. If you’ve got a strong retail presence compared to your competitors, but one that can’t be compared with the best of the best, don’t give yourself more than 5.3. Reach and frequency When most people think of advertising effectiveness, they tend to think in terms of an ad budget. So a few people are deluded into believing "If we spend twice as much on our advertising, we will get twice the results." (Not you, of course, and not me. Some other guys. But trust me, they’re out there.) It was never true, and it’s getting even less true every year. In an age where niche markets are proliferating and mass markets are mostly myth, it is very helpful to think of reach, frequency, and ad content as related but separate assets in your portfolio. Reach has become more important than frequency, with so many new marketing tools to target "rifle-shot" segments. These have created efficient new ways to get to specific consumer affinity groups and psychographic slices of the almost-extinct mass audience. (Remember when there were general-interest magazines?) Frequency is still basically deploying money against markets, boxcar numbers flexing budgetary muscle. Market segmentation strategies can, however, deliver more leveraged results with equal frequency but (relatively) smaller budgets. So, give yourself 0 to 10 points for smart segmenting … plus 1 to 3 points for Share of Voice: media spending below (1), at (2), or above (3) the spending level of competitors.4. Ad Content The greatest leverage of advertising is in its Creativity. A great ad can be, and often is, 10 times as effective as a mediocre ad. It’s possible, for example, to cut a media budget by 25%, and know that you’ll lose roughly 25% of your effectiveness. But if you cut production costs, e.g., by 25% … you can’t know the possible impact. You might lose up to 90% of your effectiveness. We’re not just talking about throwing money around here. It’s true that dazzling production values can’t rescue a non-idea ("It’s it. And that’s that"). But it’s also true that looking like a local car dealer (or Radio Shack) can turn off an audience’s receptors to even the strongest ideas. If we think of media spending as an unleveraged investment, and ad content as highly leveraged, we will be less tempted to steal budget from the creative process to buy a few more spots in Lubbock. Candidly, score 0 to 10 points for what your ads say, plus 0 to 10 for how memorably and unexpectedly they say it. Then multiply that total by the "Share of Voice" score you gave yourself, above. (This is the single biggest score you’ll get, because these assets are the 13
  14. 14. biggest equity builders. It stands to reason: more leverage = more importance = more points.)5. Promotion Can promotions kill brand equity? Yes. Can promotions build brand equity? Yes … if one sees to it that the promotional activities enhance and reinforce the basic brand image. In other words, don’t needlessly, blindly switch on Marketing Autopilot, drop millions of high-value coupons and call it a plan. To put it bluntly, sometimes FSI stands for Failed to Search for Ideas. Score 0 to 5 for a strategically sound promotion policy. Then subtract one point for every coupon promotion in the last 12 months. Range = -5 to +5.6. Consistency There are two kinds of consistency that are both important for brands: consistency from year to year and consistency across all communications vehicles. If a brand changes its personality every few years, it runs the risk of having no image at all. (What does Canada Dry stand for, anyway? How is a Plymouth different from a Dodge?) The Marlboro Man, on the other (tattooed) hand, suffers from no such confusion. A firm hand is usually needed two or three years into any brand-building campaign to keep the agents of change-for-the-sake-of-change on a short leash. The second kind of inconsistency is ad, promotion, packaging and PR people who aren’t reading from the same sheet of music. They each pursue their own vision, losing the single focus that consumers demand, and that erodes brand equity. Score 0 to 10 for across-the-disciplines consistency, and 0 to 5 for across-the-years consistency.7. Distribution In the conventional view, the single greatest problem for most consumer products brand holders is to get, hold, or expand retail shelf/floor space. And the conventional (that is, easiest) solution? Buy the distribution. Pay the slotting fees, display allowances, baksheesh, and listing fees to get the shelf space … then discount like crazy to keep your facings, running an avalanche of coupons and rebates and similar margin-reducing activities to keep the inventory turning, making the retailer (not to mention Advo) prosperous. For many smart marketers, however, Pushing with trade deals and Pulling with coupons can be prohibitively unprofitable. And not altogether consistent with developing a brand. There are alternatives. Score 0 to 6 for breadth of distribution (are you in all the geography you want?) plus 0 to 6 for the depth and cost of that distribution. (Are you overspending to maintain marginal regions? Channels? Markets? Customers?)8. Newsworthiness Being in tune with the times offers lots of opportunities for "unpaid advertising." Clearly defined, strategically oriented public relations can be a powerful tool. It’s an asset that can induce trial, enhance brand image, and build brand equity … if it is consistent with other messages. Give yourself 0 to 5 points for how well you’ve exploited this brand asset.9. Likeability 14
  15. 15. Yes, it matters. And yes, it’s measurable. If your communications (and therefore your brand) are likable, then people will welcome your message. It’s a fundamental truth: people buy from people (read Brands) they like. There are no rational purchases. None. Give yourself up to 5 points for a refreshing brand "attitude."10. Trade Support Leverage over competitors is the best result of enthusiastic trade support. For many brand holders, of course, that leverage can be enormous: in some industries, trade support can be life or death. Remember: in today’s environment, you can achieve your goals only by making your trade network believe that you are helping them achieve theirs. Every sales force worth its salt cultivates relationship sales. Score 0 to 5 points for how your brand is supported (versus competitors) by the trade.11. Sales Force You’d think that your scores you recorded for Distribution would tell you all you need to know about your Sales Force. And, while that’s usually true, any change in a selling organization brings a dynamic to established distribution. Adding reps, or changing sales management, or altering compensation programs — any substantial change can weaken the strongest distribution or (conversely) pay big dividends. Give yourself up to 10 points for the strength and discipline of your front-line troops.12. User Profile Certain user groups and market segments carry more significance and impact than others. Distinguish between high-index users and high-potential users, for example. People with developing (or changeable) brand images are highly important. This translates in many cases into pursuit of the young, in hopes of securing a long-term predisposition toward a brand. If it works, when it works, the benefits can roll on for decades. Consider Honda. They pursued and nurtured a relationship with a whole generation of consumers and continued to fine-tune the product line to meet their changing needs. On the other hand, narrow appeals mean narrowing markets. People who buy fur coats, Olds mobiles, and Ross Perot are dropping out faster than they’re being replaced. It’s not irreversible: whole categories (like gourmet coffee) have been rejuvenated by young trendsetters. Add 0 to 5 points to your score just for having enough good research to know your user intimately.13. Product Performance t almost goes without saying that product performance is a key factor in a buyer’s decision to repurchase. If the world were rational, the objective realities of product performance would generate trial, too. The key factor in a consumer’s decision to try a product in the first place, however, is perceived product performance. While it’s up to you to maximize actual product performance, many different components of brand image influence consumers’ perceptions of anticipated performance. That’s a shared responsibility of ads, promotions, packaging, P.O.P. … everything that "talks" to consumers. Score 0 to 5 for actual performance, 0 to 5 for consumer perceptions of performance.14. Repurchasing 15
  16. 16. Frequency of use equals frequency of brand-affirming (or brand-switching) decisions. That’s a key equation, because it helps explain why loyalties grow stronger to Snickers bars than to oatmeal. It also helps you to know how many trials you have to induce to conquer competitive users. You can never know too much about purchaser behavior: Do repurchase patterns change by time of day, time of year, retail environment, competitive pressure, or promotional activity? Can these behaviors be altered? What are your use-up rates? Do users take themselves out of the market for a considerable time with each purchase? Too many marketers bask in the glow of so-called "Brand Loyalty," which has the unintended consequence of taking good customers for granted. Nobody should count on the continued (blind) loyalty of people who have chosen a brand in the past. Brand owners should be loyal to their customers, not the other way around. Consumers will buy and re- buy only those brands that continue to live up to their perceptions of added value. How well have you planned and exploited ways to promote additional uses/occasions, which tend to increase the velocity of repurchase? Score 0 to 5.15. Actionable Research In an age of computerized data bases, and number-crunching machines of awesome speed, there’s little or no problem with the quantity of information available to us. Indeed, we see a lot of Analysis Paralysis. The key is how to turn digits into decisions. And the key to the key (to murder our metaphor) is to recognize and use actionable research. Do the findings lead us to action, or just to filling up overhead projector acetates? Can we make the leap from raw tabs to real insight? Can we learn how to use our brand assets more creatively, more unexpectedly? If not, save the money. The ongoing fascination with focus groups (and concurrent neglect of quantitative studies) has had unfortunate side effects. Some marketers suffer because they broke rule one: they tried to project quantitative results from qualitative research. We call it "But That Woman in Walla Walla Said" Syndrome. The absurd number of new product offerings is a monument to this kind of wishful thinking. Hint: if your focus group moderator ever asks for a "show of hands," find another moderator. One valuable function we offer as an agency is to question every client’s old research (and assumptions and comfortable rituals), like alien visitors just arrived from another marketing planet. If your research is aging (or missing), or it’s been a while since your corporate assumptions have been challenged, it’s time to restate all your questions and question all your answers. Subtract 5 points for wasting money on useless research, score 0 points for no research, and give yourself up to 5 for actionable results that make you say "Aha."16. Value In a rational world, price would equal value. (Of course, in a rational world, there’d be no civil wars, salad shooters, Madonna concerts, high-heel shoes, lawyers, clip-on ties, Pat Robertson, 3-card Monte, or fuzzy dice. But we digress.) Price is just one element in the complex, non-rational perception tug-of-war within consumer buying decisions. Value equals perceived quality, divided by actual price. Perceived quality, of course, is what you hope to establish with your other assets. 16
  17. 17. Pricing decisions, insofar as a brand holder can actually control (or even influence) them, have to be handled with much more skill and attention than simply throwing coupons or rebates at potential buyers.Score 0 to 10 based on your pricing. If you can establish and maintain a value-added premiumprice versus competition, give yourself credit for being perceived as a value-added brand. It’s ajudgment call, of course. Sometimes it takes heroic measures just to maintain price parity. What’syour total score? (Out of a possible 200?)Have you projected wishful thinking (or natural optimism) onto the numbers? Most people tend tobe a bit on the over-optimistic side. Not that the objective total matters … but now put someoneelse through this same exercise. Would your staff come up with the same numbers? Would yourdistributors? Sales force? Competitors? Consumers? Where are the most obvious disagreements?Where can you find consensus? Which assets are clearly performing up to their potential? Whichneed a little hand holding? Which is a drag on your brand equity? The fact is, every brand assethas to contribute to a value-added brand image to make the machinery work at peak efficiency.But prudent asset deployment calls for putting money, people, time and energy against the assetswith the most leverage.Fundamental Important Asset for Brand ManagerThe fundamental asset underlying brand equity is customer equity. Customer equity—the value ofthe customer relationship that the brand create. A powerful brand represents profitable loyalcustomers.In deciding the value of a company, it is important to know of how much value its customer baseis in terms of future revenues. The greater the customer equity (CE), the more future revenue inthe lifetime of its clients; this means that a company with a higher customer equity can get moremoney from its customers on average than another company that is identical in all othercharacteristics. As a result a company with higher customer equity is more valuable than onewithout it. It includes customers goodwill and extrapolates it over the lifetime of the customers.There are three drivers to customer equity, all of which refer to three sides of the same thing: 1. Value equity: What the customer assesses the value of the product or service provided by the company to be; 2. Brand equity: What the customer assesses the value of the brand is, above its objective value; 3. Retention equity: The tendency of the customer to stick with the brand even when it is priced higher than an otherwise equal product; A product manager may help the company to gain more customers and increase revenues by improving customer equity by doing these: • improving consumer service • improving the value or desirability of the brand • improving goodwill • improving brand popularity such as by advertisements The way to build a strong brand is to put customers and their needs at the centre of every decision the organization makes. Over time, “customer-centric” actions create differentiation in the marketplace and build emotional connections with customers. This differentiated bond, called “brand equity”, is a real and valuable asset with tangible returns in terms of customer loyalty, profitability, and insulation from negative publicity or competitive action. 17
  18. 18. Brand ImageBrand image may be called the set of emotional & sensory inputs a consumer associates with aparticular brand or service in the episodic memory system. Therefore Brand Image is defined asconsumer perception of the brand and is measured as the brand associations held in consumermemory. Brand association is the information node linked to the brand node in the memory andcontains meaning of the brand for the consumer. These associations are attributes, benefits &attitudes and may come in all forms and may reflect characteristics other product or aspectsindependent of the product itself. E.g. thinking Apple computers, what comes to mind, theassociations of user friendly, creative, innovative & used at many places.Another example, whenever Sally drinks her favourite beer, COORS, brand image floods hersenses with senses of being on a hot beach drinking something refreshing.The term "brand image" gained popularity as evidence began to grow that the feelings and imagesassociated with a brand were powerful purchase influencers, though brand recognition, recall andbrand identity. It is based on the proposition that consumers buy not only a product (commodity),but also the image associations of the product, such as power, wealth, sophistication, and mostimportantly identification and association with other users of the brand.Good brand images are instantly evoked, are positive, and are almost always unique amongcompetitive brands.Brand image can be reinforced by brand communications such as packaging, advertising,promotion, customer service, word-of-mouth and other aspects of the brand experience.Brand images are usually evoked by asking consumers the first words/images that come to theirmind when a certain brand is mentioned (sometimes called "top of mind"). When responses arehighly variable, non-forthcoming, or refer to non-image attributes such as cost, it is an indicatorof a weak brand image.Distinguishing Corporate Identity, Brand Identity & Brand ImageIt is important to distinguish between corporate identity, brand identity, and brand image.Corporate identity is concerned with the visual aspects of a companys presence. Whencompanies undertake corporate identity exercises, they are usually modernizing their visual imagein terms of logo, design, and collaterals. Such efforts do not normally entail a change in brandvalues so that the heart of the brand remains the same - what it stands for, or its personality.Unfortunately, many companies do not realize this fallacy, as they are sometimes led to believe byagencies and consultancy companies that the visual changes will change the brand image. Butchanges to logos, signage, and even outlet design do not always change consumer perceptions ofquality, service, and the intangible associations that come to the fore when the brand name isseen or heard.The best that such changes can do is to reassure consumers that the company is concerned abouthow it looks. Brands do have to maintain a modern look, and the visual identity needs to changeover time. But the key to successfully effecting a new look is evolution, not revolution. Totallychanging the brand visuals can give rise to consumer concerns about changes of ownership, orpossible changes in brand values, or even unjustified extravagance. If there is a strong brandpersonality to which consumers are attracted, then substantial changes may destroy emotionalattachments to the brand. People do not expect or like wild swings in the personality behavioursof other people, and they are just as concerned when the brands to which they have grown usedexhibit similar "schizophrenic" changes. 18
  19. 19. On the other hand, if the intention is to substantially improve the standing of the brand, thencorporate identity changes can be accompanied by widespread changes to organizational culture,quality, and service standards. If done well, and if consumers experience a great new or improvedexperience, then the changes will, over the longer term, have a corresponding positive effect onbrand image. If you are spending a vast amount of money on corporate identity, it is as well toremember this.Brand identity is the total proposition that a company makes to consumers - the promise itmakes. It may consist of features and attributes, benefits, performance, quality, service support,and the values that the brand possesses. The brand can be viewed as a product, a personality, aset of values, and a position it occupies in peoples minds. Brand identity is everything thecompany wants the brand to be seen as.Brand image, on the other hand, is the totality of consumer perceptions about the brand, or howthey see it, which may not coincide with the brand identity. Companies have to work hard on theconsumer experience to make sure that what customers see and think is what they want them to. Brand Identity Brand Image1 Brand identity develops from the source Brand image is perceived by the receiver or the or the company. consumer.2 Brand message is tied together in terms Brand message is untied by the consumer in of brand identity. the form of brand image.3 The general meaning of brand identity is The general meaning of brand image is “How “who you really are?” market perceives you?”4 Its nature is that it is substance oriented Its nature is that it is appearance oriented or or strategic. tactical.5 Brand identity symbolizes firms’ reality. Brand image symbolizes perception of consumers6 Brand identity represents “your desire”. Brand image represents “others view”7 It is enduring. It is superficial.8 Identity is looking ahead. Image is looking back.9 Identity is active. Image is passive.10 It signifies “where you want to be”. It signifies “what you have got”.11 It is total promise that a company makes It is total consumers’ perception about the 19
  20. 20. to consumers. brand.Focus on shaping your brand identity, brand image will follow. Frequency MarketingFrequency marketing (Frequency marketing programme). Any marketing plan designed toreward customers who buy on a regular basis or to encourage customers to do so, as in afrequent flyer programme. E.g. PIA Frequent Flyers Programme (Discounted tickets, free milestravel), Credit Cards (Rewards Points) etc.Frequency Marketing is a term that relates to marketing programs that aim to maintain or increasethe ‘frequency’ of visits, purchases, orders etc. of customers in order to maximise their profitcontribution over-time. Such programmes, more often termed as loyalty programmes recogniseand reward customers based on purchasing behaviour.A frequency marketing programme is a means to an end; it is the means in which companies areable to identify its ‘best customers’ and once identified, enables companies to recognize andreward those customers in order to keep them loyal. A frequency marketing programme alsoenables companies to identify potential best customers and market to them. Customerrecognition and reward then come into play accordingly.Frequency marketing programmes need to be innovative and motivating enough for customers towant to join while volunteering information about themselves, such as name and address,therefore enabling companies to identify and communicate with selected customers. The mostbasic identifying information could simply be a name and an accompanying email address. Richinformation, provided on an application for a loyalty card for instance, will give an address, an agedemographic, previous purchase information and a whole range of other specific information,such as consumption of media, frequency of holidays, even income bracket.Every time a frequency marketing (or loyalty) card is used, this identifies the customer, and linksrelevant transactions to their record. Companies then analyse this data and turn it into knowledge(either on a non-aggregate or aggregate level) and use this accumulated insight to rewardcustomers with the objective of retaining or growing their profit contribution. Just imagine thebenefits of Loyalty Programme...► 1 your sales will increase► 2 your customer retention level will increase► 3 your knowledge level goes up, so you talk with your customers as individuals,as people► 4 your awareness levels increase► 5 you target your message to the right people at the right time► 6 you earn an increased level of loyalty► 7 you are able to measure your successes► 8 you spend less / you earn more -- your profits increase.Brand loyalty 20
  21. 21. Brand loyalty, in marketing, consists of a consumers commitment to repurchase or otherwise continue using the brandand can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouthadvocacy.Dick, Alan SBrand loyalty can be defined as relative possibility of customer shifting to anotherbrand in case there is a change in product’s features, price or quality. As brand loyaltyincreases, customers will respond less to competitive moves and actions. Brand loyal customersremain committed to the brand, are willing to pay higher price for that brand, and will promotetheir brand always. A company having brand loyal customers will have greater sales, lessmarketing and advertising costs, and best pricing. This is because the brand loyal customers areless reluctant to shift to other brands, respond less to price changes and self- promote the brandas they perceive that their brand have unique value which is not provided by other competitivebrands.Brand loyalty is always developed post purchase. To develop brand loyalty, an organization shouldknow their niche market, target them, support their product, ensure easy access of their product,provide customer satisfaction, bring constant innovation in their product and offer schemes ontheir product so as to ensure that customers repeatedly purchase the product. E.g. Google topsthe brand loyalty. Google is always coming up with add-ons that are cool. Talk about eye –tracking studies, you’re always straight at Google because Innovation, Creativity and consumer-comes-first attitude, attritubetes help Google retain the top PositionCustomer loyaltyThe loyalty business model is a business model used in strategic management in which companyresources are employed so as to increase the loyalty of customers and other stakeholders in theexpectation that corporate objectives will be met or surpassed. Customer loyalty is a companysability to retain satisfied customers. Maintaining customer loyalty is one of the toughestchallenges for any marketing department in a business enterprise, since the wants of a customerare modified at much faster rate than their needs. It requires a business enterprise to follow apro-active approach that includes formulating strategies for brand consolidation, researching andcontinuing with new product development, following TQM (Total Quality Management),implementing CRM systems, and also, working out Pipeline Management tactics. E.g. TCS buildsCustomers loyalty through friendly behaviour & on time speedy service & guarantees qualityshipment handling of documents & goods etc.Here are ten ways to build customer loyalty: 1. Communicate. Whether it is an email newsletter, monthly flier, a reminder card for a tune up, or a holiday greeting card, reach out to your steady customers. 2. Customer Service. Go the extra distance and meet customer needs. Train the staff to do the same. Customers remember being treated well. 3. Employee Loyalty. Loyalty works from the top down. If you are loyal to your employees, they will feel positively about their jobs and pass that loyalty along to your customers. 4. Employee Training. Train employees in the manner that you want them to interact with customers. Empower employees to make decisions that benefit the customer. 5. Customer Incentives. Give customers a reason to return to your business. For instance, because children outgrow shoes quickly, the owner of a children’s shoe store might offer a card that makes the tenth pair of shoes half price. Likewise, a dentist may give a free cleaning to anyone who has seen him regularly for five years. 21
  22. 22. 6. Product Awareness. Know what your steady patrons purchase and keep these items in stock. Add other products and/or services that accompany or compliment the products that your regular customers buy regularly. And make sure that your staff understands everything they can about your products. 7. Reliability. If you say a purchase will arrive on Wednesday, deliver it on Wednesday. Be reliable. If something goes wrong, let customers know immediately and compensate them for their inconvenience. 8. Be Flexible. Try to solve customer problems or complaints to the best of your ability. Excuses — such as "Thats our policy" — will lose more customers then setting the store on fire. Read our 60-Second Guide to Managing Upset Customers for more information. 9. People over Technology. The harder it is for a customer to speak to a human being when he or she has a problem, the less likely it is that you will see that customer again. 10. Know Their Names. Remember the theme song to the television show Cheers? Get to know the names of regular customers or at least recognize their faces.Businesses appreciate every sale but a sale made to a repeat customer is a virtualseal of approval Customer loyalty keeps businesses running and is very sought afterBusinesses appreciate every sale but a sale made to a repeat customer is a virtual seal of approval.Customer loyalty keeps businesses running and is very sought after. What is it, however, thatgains and maintains customer loyalty? Basically it is making and keeping the customer happy,(customer satisfaction). There are many ways you can achieve this and the more ways youincorporate into your business practices, the more likely you are to get and keep customer loyalty.- Provide a good product or service: This seems like a no brainer but make sure you are wellrepresenting what you are providing.- Always give the customer more than they were expecting. This doesn’t mean losingmoney. It just means people like to be pleasantly surprised and when they are, they tend to dobusiness there again.- Deliver what you promise. Make sure your policies are posted where customers see themcan- Try to handle disputes amicably. This isn’t always possible but makes a good faith effort.You may just turn an unhappy customer into a repeat customer.- Offer a unique twist to your website and your business. Make your business stand outfrom the rest- Follow up on a sale. This doesn’t mean necessarily trying to get another sale butacknowledge the customer and they will more than likely want to shop with you again.Customers like a personal touch and yet appreciate good business practices. Displaying theright amount of both could make the difference in securing and retaining a customer’s loyalty. Ifthey are happy with the product (or service) and happy with the way they were treated, chancesare they will continue to buy from you.Never take any customer for granted. People can be fickle and there is fierce competition 22
  23. 23. for every dollar spent by a customer. If your business stands out for any reason in a positive way,the customer is more likely to continue to buy from you. It only takes one negative experience tolose a customer, however, so try to keep the customer happy. The customer may not always beright, but they are your bread and butter.People like knowing what they are getting. They also like getting what they feel is morethan what they paid for. Any little extras you add are a plus. This can mean something as simpleas a? Thank You? Sticker on the package or a personalized card inside. If you aren’t willing toshow appreciation to your customer, someone else will. Once you get customer loyalty, you cancontinue to sustain it by offering frequent shopping rewards or something similar. Customerappreciation coupons are another good way to keep customers coming back.Every effort you make toward providing a pleasant shopping experience helps to get and keepcustomers happy. If a customer is happy and satisfied with a product and customer service,chances are they will be back to shop with you again.Gathering customer information and enhancing loyaltyEncouraging Loyalty — Loyalty Cards Marketers’ world over, have long realized theimportance of repeat business and have devised innovative ways to retain customers. One suchmethod is by way of the loyalty programs.Customer loyalty to a retailer can be defined as existing when a customer chooses to shop inonly on store or retail chain for specific product or group of products.One of most popular loyalty programs of all times was the Airline Frequent Flyer programdesigned by airlines in the seventies. Given the popularity of airline programs other businesseslike hotels, restaurants and supermarkets too devised similar loyalty programs to attract andretain customers. In the more developed markets of the word, these cards are looked upon astools of gathering consumer information and encouraging the patronage of a store.There is another major attraction for business to encourage loyalty programs: sophisticated datamining techniques are available to help companies study buying patterns, customer preferencesand trends. This is a really useful tool for businesses trying to forecast demand and for managinginventory and supply chains. ‘Large retailers spend millions on tools and technologies to gather more information about theircustomers. This information s then used to design, develop and package products and solutionstailored to the customer’s needs. For example supermarkets have discovered that peoplegenerally buy milk, eggs and cheese together. Therefore they generally stock cartons of eggs andsampling of new cheese products near the aisles where they stock milk. This way, customers whogo to pick up milk are subconsciously encouraged to also buy eggs and try out newer kinds ofcheese, thus increasing sales for the supermarket too. Data warehouses help in studying customerpatterns, buying trends and behaviours and provide a tremendous amount of information tomarketing managers and planners.In categories where products and services are at par, customer relationships — and thereforeloyalty programs – play the role of differentiation. The blend of recognition and rewards offeredthrough a loyalty program can encourage customers to be identified. Once they have joined anidentification number allows all customers to be recognized regardless of their preferred methodof payment.When customers opt in to a permission based loyalty program, they are more willing to shareinformation and enable the retailer to create dialogue with his customers. In this manner, the 23
  24. 24. retailer can learn a lot more than the bits and pieces of information available from transactionaldata.The best way to coordinate marketing objectives across channels is to build a knowledge base ofcustomer behaviours ad preferences. A well conceived and executed loyalty program can be thekey to turning invisible shoppers into profitable customers. A good customer loyaltyprogram needs to possess the following characteristics.Visibility:A loyalty program must be highly visible regardless of the channel. The retailer’s website canshow special offers for program members a catalogue can feature the program prominently andshoppers in the store should be asked if they’d like to join. Cross promotional materials should bepresent and easily obtainable.SimplicityTo succeed a loyalty program must be easy to use in all. Minimize the fine print the more thecustomers have to figure out, the less they like the program.ValueThe balance of reward and recognition must establish value in the customer’s mind and motivateincremental purchases. Program rewards should be credited regardless of where the customerprefers to shop.TrustKeep the promises made by the loyalty program. If the promise is for personalized highly valuedservice, don’t bombard program participants with meaningless offers that obviously are availableto everyone.Retaining customersKeeping customers coming back for more isnt always easy. Here are ten top tips on how to retaina loyal consumer base.1. Go the extra mileOffering something extra is often a good alternative to cutting prices, and it can generate moregoodwill, even if it costs you very little. London-based marketing agency Exposure has offices justoff Oxford Circus, close to the capital’s main shopping district. It has made use of its own windowspace to create temporary ‘pop-up shops’ for brands such as Vitamin Water and Kings Mill bread.‘For us, this was a fairly unique offer that we could tag on to our core marketing programme,’says CEO Tim Bourne. ‘It was a complete differentiator from other agencies simply because otheragencies couldn’t do it.’2. Boost staff motivationWhen customer-facing staff becomes demotivated, contracts are lost. Charlie Mowat, MD of TheClean Space Partnership says this is a particular problem in the cleaning industry, which tends topay low wages and offer scant opportunities for training and development. His solution is to turnemployees into franchisees, offering them a cleaning contract in return for a fee (usually around£1,000 to £2,000), which they repay gradually out of their earnings. Mowat claims the cleaners’hourly wages are around double the industry norm, adding that the franchise model gives workersan increased sense of ownership and self-worth. ‘The attitude of our franchisees is the key to ourgrowth,’ says Mowat. ‘We’ve gone from scratch to £2 million turnover in six years and I put thatdown to the people on the ground keeping our clients happy.’3. Keep it fresh… but familiarMooning, which sells customizable greetings cards through its website, relies on the continualdevelopment of its product to keep repeat business high. Says founder and Chairman Nick 24
  25. 25. Jenkins, ‘We are constantly looking for innovations so that when customers come back there isalways something new there. We’ve introduced the ability to upload photos and new ways to writetext on the card, for example writing in clouds or on sand.’ But product innovation is only half thestory. You also have to figure out what works and make it easy for people to locate it. ‘There’s abalance to strike. Some cards are perennial bestsellers so it’s a case of offering the best of whatwas there before and something fresh,’ says Jenkins, who has overseen turnover growth of 165per cent to £20.9 million and a similar sprint in pre-tax profits to £6.7 million for the 2008/09financial year.4. Invite complaints‘If our customers have an experience that doesn’t feel right, I want them to tell us about it so thatwe can resolve it,’ says Derek Buchanan, CEO of signage and labeling specialist Episys. Theconcept is simple enough, but the problem is always getting people to complain before they taketheir business elsewhere. Buchanan’s solution is what he calls the ‘Ever Been Disappointed’campaign. He sends out packs with ‘happy’ and ‘sad’ cards and pre-paid envelopes so that it’squick and easy for clients to offer feedback. If the problem is particularly serious, he’ll even get onthe phone himself. ‘I don’t want my staff to be scared of making mistakes – the important thing isthat when the customer tells you about the mistake, you respond,’ he explains.5. Remind customers that you’re thereClaire Watt-Smith founded Bo belle, a supplier of eel skin handbags and accessories, in 2007 andquickly expanded from selling on market stalls to wholesaling. She’s a firm believer in frequentcommunication with customers, sending out newsletters, personalized emails and thank you cardsboth to individual buyers and the boutiques that stock her goods. ‘If someone has bought aleather handbag, I’ll send them an email or make a courtesy call reminding them to spray leatherprotector on it,’ says Watt-Smith, adding that with the boutiques, ‘It’s important to listen to themto find out what colours and styles are selling well, so you can tailor the next order to theirwishes.’6. Maintain a human touchNow that customer service is a discrete business function, often with its own dedicated team,there’s a danger of it becoming over-automated or isolated from the rest of the business. Travelagent Cruise118 has taken steps to prevent this, installing an IT system that recognizes callers’phone numbers and puts them through to the same salesperson, or “customer concierge” as theyprefer to call the role, each time – even after they’ve returned from their holiday. ‘Too often, after[travel companies] have made a sale the customer gets palmed off to the administration orcustomer service team,’ says director James Cole. The personal touch is paying off, withCruise118 generating sales of roughly £10 million in its first year of business.7. Lock in clients for longerWhether you’re selling to consumers or businesses, it pays to structure the deal to encouragecustomer retention. Moon pig offers users £5 extra credit when they prepay £20 and Cruise118greets returning holidaymakers with incentives for booking their next break within 28 days, whileEpisys has moved from working on a project basis to signing up clients to three- or five-yearcontracts. Buchanan has one word of warning. ‘[Longer] contracts are important but you will notget people to sign up to them unless they feel comfortable with your service,’ he counsels.8. Monitor feedback 25
  26. 26. The internet makes it easier to find out what your customers think about you. Charles Tyrwhitt, aretailer of men’s shirts, has signed up to a service that allows users to leave feedback on a third-party website. The idea is that all responses are displayed, both good and bad, giving internetusers confidence in the information. It’s also easy to isolate and deal with critical comments.Founder Nick Wheeler says the service has increased conversion rates by a factor of three andboosted repeat orders fivefold. An even simpler way of collecting feedback is through netpromoter scores (NPS). Popular in the US with companies such as General Electric and AmericanExpress, the NPS metric is based on asking customers how likely they are to recommend you on ascale of zero to ten. Dominic Monk house, UK MD of IT services company Peer 1, which uses thesystem, says, ‘It’s always the nines and tens that stay around and spend more money. We find thatmanaging out the fours and fives actually improves our customer retention in the long term. Theunhappy customer is typically heavy work, and often has a misunderstanding of the service youprovide.’9. Offer good after-sales supportStephen Clarke, MD of phone-based notification service Truancy Call, says the company providesclients with phone, email and online support. For him, having a customer relationshipmanagement (CRM) system in place has been vital to make this effective: ‘When a company makesan after-sale call without the support of a CRM system, they lack knowledge about the history ofthe customer, which could be crucial to maintaining good relations and retaining their business.’After-sales support is not only important for these reasons – it also provides opportunities forcross-selling and collecting feedback on how products could be improved, observes Clarke.10. Be your own competitorYour customers will often want to try something new – but there’s no reason why you can’t be theone to offer it. Cruise118 has only been trading for 12 months, but has already launched threesub-brands:, and The idea is to capitalizeon niches of the cruise market, and encourage customers who have been on one cruise with thecompany to book again under a different brand. ‘When customers request information aboutSixStarCruises, for example, we’ll send them a letter with the SixStarCruises letterhead butintroduce them to the Cruise118 group, mentioning the other brands as well,’ says Cole.‘Whichever brand they book under, there is the same ethos in terms of customer service.’Product StrategyThe product strategy should give a detailed description of what your product(s) are and how theyare going to benefit your company. You describe which products you think will be most popularand describe which ones you want to be the most popular (The BCG Dot Matrix is very good inhelping you determine this). If you are doing an individual product marketing plan, then thissection would describe in detail what your product is and what strategies you have to make it beatout your competitors. One-to-one marketingOne-to-one marketing refers to marketing strategies applied directly to a specific consumer.Having the knowledge on the consumer preferences, there are suggested personalized productsand promotions to each consumer. The one-to-one marketing is based in four main steps inorder to fulfill its goals: Those stages are IDENTIFY; DIFFERENTIATE; INTERACT and CUSTOMIZE.Identify: In this stage the major concern is to get to know the customers, to collect reliable dataabout their preferences and how their needs can be satisfy.Differentiate: To get to distinguish the customers in terms of their lifetime value, to know themby their priority in terms of their needs and segment them in more restrict groups. 26
  27. 27. Interact: In this phase it is needed to know by which communication channel an in which way itis possible to optimize the contact with the client. It is needed to get the customer attention byengaging with him in ways that are known has being the ones that he enjoys the most.Customize: It is needed to personalize the product or service to the customer individually. Theknowledge that a company has of a customers need to be taken into practice and the informationabout it has to be taken into account in order to be able to give the client exactly what he wants.Examples of companies that have these techniques in order to persuade the clients: • Dell Computers • Smart Cars •; • Avon • Nike • Riz-carlton Hotels What is One-to-One Marketing? It is an approach that concentrates on providing services or products to one customer at a time by identifying and then meeting their individual needs. It then aims to repeat this many times with each customer, such that powerful lifelong relationships are forged. As such it differentiates customers rather than just products. One to One Marketing is more than a sales approach. Its an integrated approach that must permeate all parts of an organization: marketing, sales, production, service, finance, etc.. In fact, One to One Marketing needs to come to the guiding vision that drives the whole company. One to One Marketing recognizes that lifetime values of loyal customers who make repeat purchases far exceed that of fickle customers who constantly switch suppliers in search of a bargain. This is particularly true within financial services where the customer acquisition costs are very high. Whilst at first the concept appears to be only suitable for a niche market of rich clients, modern information technology, particularly the new interactive mediums, provide an opportunity to bring personalized and customized products to the mass market yet at a mass produced price. This is called Mass Customization. However, it does require new thinking that breaks away from the traditional concepts of mass marketing and mass production. The concept of One to One Marketing is attributed most to Don Peppers and Martha Rogers. E.g. Banks, Doctors, Teachers, Lawyers, Pharmaceuticals etc are using one-one marketing approach for their customers in selling of goods & services.Benefits of One-to-One MarketingHigher ProfitsOne to One Marketing delivers economies of scope. Not economies of scale.It initially concentrates on those 20% or even 10% of customers who are your most profitable.By providing tailored products to meet particular needs, you make comparative shopping difficultand you shift the focus from price to benefits.It aims for lifetime share of customer, not a share in an often static and crowded market.By developing Mass Customization capabilities, you can then extend the service to morecustomers. You then gain an ever increasing market share without the need to match the lowestprice mass market supplier.Lower CostsThe cost of keeping profitable customers far outweighs the acquisition cost of new customers. 27
  28. 28. With an intimate knowledge of individual customers, products and services can be more accuratelytargeted (right specification at the right time in the right way).Market ExploitationIt differentiates your company from the competition. Through collaborative working, customerstell you about their unmet needs and aspirations as well as their most pressing problems. Youfeed those needs directly into NPD. And by using Mass Customization technology, you can actuallyfeed those needs directly into your production line.Customers, with whom you have a depth of relation, provide a rich source of new ideas that canalso be exploited with other customers or with new prospects. As a result, NPD has lower risk offailure and a higher chance of beating the competition.Last but not the least, Satisfied and loyal customers provide excellent references and referrals.Why Ads? One-to-One Marketing: The ImplicationsPromotionOne to One promotion needs to highlight individual possibilities and unique benefits. Timelinessof delivery is important.DesignCustomer needs will be better met where products and services can be personalized andcustomized easily.Your marketing department needs to take a component based approach and create identifiablebasic building blocks.Rules will define the possible combinations and limits. Such rules will usually be held in a rulesrepository, along with the other business that define policies, processes, etc..Processes and IT systems will need to support this Lego™ like approach, not only in productdevelopment, but through marketing, sales, and servicing.ProductionProduction systems needs to assemble the basic blocks according to the rules.This may be down by your sales staff, agents, distributors or your customers themselves (MassCustomization).ServicingProfiles of individual customer products as well as profiles of the individual customers, need to beavailable to support staff throughout the life of the customer.FeedbackFeedback during the any part of the marketing, purchase or support cycles needs to beencouraged and captured.Such data needs to be analyzed, communicated, and acted on in a timely fashion, perhaps withinminutes.Information provided by customers must be used sensitively and be kept secure.OrganizationAll staff will be need to be well trained and motivated to meet individual needs. The managementstyle and organizational culture may well need changing.Staff need to be supported with good IT.Information TechnologyA shared customer information system, data mining tools, interactive technologies, and flexiblecomponent based systems, object technology systems, and rules based systems are key. WhyAds? 28
  29. 29. One-to-One Marketing: Why is this now an issue?End of a mass production era (supply)The post war period was a time of economic growth when customers would clamor for whatevergoods were available. To-day, mass production has in many cases produced an over supply ofvery similar goods and, in particular, services. And in a global information based society, ideascan easily be replicated by competitors; price wars are common and deadly.Individualism (demand)People’s lives today are more turbulent and diversified. The "one size fits all" model is out-of-date. Individuals now want to be seen and treated as individuals and many are to pay for this.They are better educated and informed; able and willing to make their own decisions.Competition (demand)All companies are promoting value for money, quality, durability, etc.. It is difficult to differentiateproducts. To make matters worse, in many industries there is a variety of new entrants, forexample, Virgin, Tosco and Sainsbury into financial services. Flexible and virtual companies canout-pace and out-smart established leaders.Profitability (demand)In many businesses, 20% of the customers provide 80% of the profits. Gaining new customers isexpensive. Forging close lifetime relationships with existing customers can produce superiorprofits.Technological progress (supply)The Internet provides a new delivery vehicle whereby the ordinary customer can easily providefeedback either consciously or sub-consciously. In many instances customers are nowparticipating in the product design to create their own unique custom products or services.Gateway and Dell in personal computers, Acumen Corp. in vitamin pills, and Chubb & Sons andUSAA in insurance. All these interactions can be captured into customer databases. Databasemining then allows individual profiles to be compiled and then analyzed for new marketopportunities to specific customers, both current and new. Managing Change is building aStrategic Interactive Marketing framework and a complementary database of example companies. Measuring Outcomes of Brand EquityThere are two types of method employed to measure brand equity at source. These two methodsare qualitative research methods and quantitative research methods. Qualitative researchmethods are ideal for measuring brand association where in consumer perceptions towardsbrand are captured.Quantitative research methods are perfect to understand brand awareness within consumer.Both above mention methods are only able to capture and measure one dimension of brand equityat a time. But brand equity is multi-dimensional and therefore it is important to measure each asit will help in taking tactical as well as strategically important decision.Comparative methods and holistic methods are designed to directly analyze brandequity. Comparative methods tend to analyze effects of consumer perception towards brand inrespect to marketing programs, in terms of change in brand awareness. Holistic methods aredesigned to analyze the total effect of brand equity. These methods will provide necessary tools tomeasure outcome of brand equity. Consumer bases brand equity will lead to loyal customer base,point of differentiation against competitors get better margins, more acceptances of marketingcommunication, strong standing in distribution channel and also support any form of brandextension. 29
  30. 30. Comparative methods are research methods which measure brand equity associated withbrand association and high level of brand awareness. Comparative methods are again of differenttypes depending on usage of marketing. Brand based comparative methods looks to measureconsumer response against same marketing program for different brands. Marketing basedcomparative method looks to measure consumer response for same brand under differentmarketing program. Conjoint comparative method looks to combine both brand basedcomparative method and marketing based comparative method. Each method has its applicationand drawbacks.Brand based comparative method, as mentioned, tries to examine consumer’s response toidentical marketing response to different brand in the same product category. This could becompetitor’s brand, any non-existing brand or preferred brand in that category. A classic exampleof such comparative method is experiment conducted by Larry Percy; in which consumer were askto map beer taste and preference. In one first instance brand name were disclosed whereas onsecond instance brand name was not disclosed. Consumer showed more loyalty when brand namewas disclosed. Brand based method really isolated true value of brand name and this conceptespecially holds true when there is a change in marketing program from past efforts.Marketing based method tries to understand consumer response under different marketingpromotions. Here focus is to understand how much influence marketing program has on brandperformance. One such experiment would be to understand consumer response at different pricelevels; this will reveal level of tolerance before consumer switch to another brand. Marketingbased method would also be effective in understanding consumer response to similar marketingprogram across various geographical locations. The main advantage of marketing based methodis that it can be applicable to any marketing program. However drawback of this method is that itis difficult to separate whether consumer preference is towards the brand or product category ingeneral, meaning the price premium discovered may applicable to other brand in similar productcategory also.Conjoint method allows simultaneously study of brand as well as marketing program. Thismethod also employs statistical calculation making it possible to study many attributes orassociation at one time. Disadvantage of this method is that too much experimentation will mayincrease consumer expectation with respect to the brand.Holistic method is used to determine financial value or definite utility value of the brand.Holistic method looks to measure consumer brand preference over consumer brand response.Residual holistic approach measures brand equity after subtracting physical attributes of thebrand. Valuation holistic approach looks to measure brand equity in financial term which isimportant during valuation of whole firm in activities of merger/acquisition, fund raising etc.Comparative method and Holistic method are employed to measure benefit of consumer basedbrand equity. Comparative method measures consumer response where as holistic methodmeasure consumer brand consumer preference. These methods are relevant to calculate return ofinvestment for marketing activities. 30