CHAPTER 5 DESIGNING MARKETING PROGRAMS TO BUILD BRAND EQUITY
Strategic Brand Management Process Mental maps Competitive frame of reference Points-of-parity and points-of-difference Core brand values Brand mantra Mixing and matching of brand elements Integrating brand marketing activities Leveraging of secondary associations Brand Value Chain Brand audits Brand tracking Brand equity management system Brand-product matrix Brand portfolios and hierarchies Brand expansion strategies Brand reinforcement and revitalization KEY CONCEPTS STEPS Grow and Sustain Brand Equity Identify and Establish Brand Positioning and Values Plan and Implement Brand Marketing Programs Measure and Interpret Brand Performance
CUSTOMER-BASED BRAND EQUITY PYRAMID RESONANCE SALIENCE JUDGMENTS FEELINGS PERFORMANCE IMAGERY 4. RELATIONSHIPS = What about you & me? 3. RESPONSE = What about you? 2. MEANING = What are you? 1. IDENTITY = Who are you?
Relationship Marketing – provide more holistic, personalized brand experiences to create stronger consumer ties.
Employ multiple touch points & multiple senses
Often involves special events, contests, promotions, sampling, on-line activities, etc.
Combine brand education & entertainment
Distinctive and relevant
Read Figure 5.2 for Schmitt’s Guidelines!
One-to-One Marketing: Competitive Rationale
Consumers help to add value by providing information
Firm adds value by generating rewarding experiences with consumers
Creates switching costs for consumers
Reduces transaction costs for consumers
Maximizes utility for consumers
One-to-One Marketing: Consumer Differentiation
Treat different consumers differently
Different values to firm
future (life-time value)
Devote more marketing effort on most valuable consumers (and customers)
One-to-One Marketing: Fundamental Strategies
Focus on individual consumers – Consumer databases
Respond – Interactivity: A dialogue
Permission Marketing (Seth Godin)
Permission marketing “encourages consumers to participate in a long-term interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages.”
Permission marketing can be contrasted to interruption marketing
5 Steps in Permission Marketing
Offer the prospect an incentive to volunteer.
Offer the interested prospect a curriculum over time, teaching consumers about the product.
Reinforce the incentive to guarantee that prospect maintains the permission.
Offer additional incentives to get more permission from the consumer.
Over time, leverage the permission to change consumer behavior toward profits.
All of these approaches are a means to create deeper, richer, and more favorable brand associations
Relationship marketing has become a powerful brand-building force
can slip through consumer radar
may creatively create unique associations
may reinforce brand imagery and feelings
Nevertheless, there is still a need for the control and predictability of traditional marketing activities
Models of brand equity can help to provide direction and focus to the marketing programs
Integrating the Brand Into Supporting Marketing Programs
Supporting marketing mix should be designed to enhance awareness and establish desired brand image.
Perceived quality and value
Total quality management and return on quality
Relationship marketing issues
Why Relationship Marketing?
Acquiring new customers can cost ----- times more than the costs involved in satisfying and retaining current customers.
The average company loses --- percent of its customers each year.
Why Relationship Marketing?
A 5 percent reduction in the customer defection rate can increase profits by --- percent to --- percent.
The customer profit rate tends to ----- over the life of the retained customer.
Price premiums are among the most important brand equity benefits of building a strong brand.
Consumer price perceptions
Consumers often rank brands according to price tiers in a category.
Setting prices to build brand equity
Everyday low pricing
Mix & match communication options
Channel design: Direct vs. Indirect
Blend channel “push” with consumer “pull”
Company-owned stores and web strategies
Advantage of having both a physical “brick and mortar” channel and a virtual, online retail channel
The Boston Consulting Group concluded that multichannel retailers were able to acquire customers at half the cost of Internet-only retailers, citing a number of advantages for the multichannel retailers.