Bmgt 411 week5

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Bmgt 411 week5

  1. 1. BMGT 411: Week #5 Kottler: Chapters 8 - Creating Brand Equity Chapter 9 - Brand Positioning Wood: Chapter 4 - Segmenting, Targeting and Positioning Chapter 5 - Planning, Directing, and Support 1
  2. 2. Chapter 8 Questions • What is a brand and how does branding work? • What is brand equity and how is it built, measured, and managed? • What are the important decisions in developing a branding strategy? 2
  3. 3. Steps in Strategic Brand Management • Identifying and establishing brand positioning • Planning and implementing brand marketing • Measuring and interpreting brand performance • Growing and sustaining brand value 3
  4. 4. What is a Brand? • A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. 4
  5. 5. The Role of Brands • Identify the maker • Simplify product handling • Organize accounting • Offer legal protection 5
  6. 6. The Role of Brands • Signify quality • Create barriers to entry • Serve as a competitive advantage • Secure price premium 6
  7. 7. What is Branding? •Branding is endowing products and services with the power of the brand. •Teaching customers “who” the product is •Tells customers what the product does •Reinforces why consumers should care 7
  8. 8. What is Brand Equity? • Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand. 8
  9. 9. Brand Equity What comes to mind when you think of these brand retailers? Why? 9
  10. 10. Advantages of Strong Brands • Improved perceptions of product performance • Greater loyalty • Less vulnerability to competitive marketing actions • Less vulnerability to crises • Larger margins • More inelastic consumer response • Greater trade cooperation • Increased marketing communications effectiveness • Possible licensing opportunities 10
  11. 11. What is a Brand Promise? • A brand promise is the marketer’s vision of what the brand must be and do for consumers. • What do you think the brand promise is for the retailers we discussed? 11
  12. 12. Brand Equity Models Brand Asset Valuator (BAV) Brandz Brand Resonance 12
  13. 13. Brand Asset Valuator (BAV) Strong New Brands: Higher in Energized Differentiation, low esteem and knowledge Leadership Brands: High in all categories Declining Brands: High Knowledge, low everything else 13
  14. 14. Figure 8.2 Brand Dynamics BrandZ Model 14
  15. 15. Figure 8.3 Brand Resonance Pyramid Think of Brands in these Stages? 15
  16. 16. Building Brand Equity 1.Identify Brand Elements (Name, Logo, URL, etc) and identities that make up the brand 2.The Product, Service, and All Marketing Activities and Marketing Programs 3. Other associations indirectly transferred to the brand (Figure 8.4 Page 119) 16
  17. 17. Brand Elements • Brand names • Slogans • Characters • Symbols • Logos • URLs • Social Media Presence • Customer Service Strategy 17
  18. 18. Brand Element Choice Criteria • Building the Brand • Memorable: Is the elements easily recalled and recognized at purchase and consumption (Tide) • Meaningful: Is the element credible and suggestive of the category? Does it suggest something about an ingredient or brand user? (Diehard) • Likable: Is the element appealing and likable visually or in other ways? (iPad) • Defending a Brand • Transferrable: Can the element introduce new products in the same category or other category? (Amazon, Soap.com, Wag.com, diapers.com) • Adaptable: Can the element be adapted and updated (Betty Crocker image) • Protectable: Is the element legally and competitively protected? Google 18
  19. 19. Betty Crocker Images Brand of General Mills 19
  20. 20. Secondary Sources of Brand Knowledge 20
  21. 21. Cult Brands: Building Equity Without Promotions http://www.youtube.com/watch? v=ZUG9qYTJMsI&feature=playe r_embedded#! 21
  22. 22. Measuring Brand Equity • Brand audits: A consumer focused series of procedures to asses the health of the brand, uncover its sources of equity, and suggest ways to improve and leverage it’s equity. • Brand tracking: Qualitative Marketing Research that collects data from consumers over time to provide baseline information on how brands and marketing programs are performing • Brand valuation: The actual financial value of a brand 22
  23. 23. Interbrand Retail US Brand Valuations http://www.interbrand.com/en/ BestRetailBrands/2013/Best- Retail-Brands-Brand-View.aspx? country=United%20States 23
  24. 24. Branding Terms (Page 122) • Brand line • Brand mix • Brand extension • Sub-brand • Parent brand • Family brand • Line extension • Category extension • Branded variants • Licensed product 24
  25. 25. Branding Decisions • Individual or Separate Family Brand Names: Individual names of brands across multiple categories, even though the company that makes the products are the same 25
  26. 26. Branding Decisions • Corporate Umbrella or Company Brand Name: Use one name across a variety of products. Becoming very popular as a strategy of private label products. 26
  27. 27. Branding Decisions • Sub Brand Names: Combines corporate umbrella brands with individual or family brands 27
  28. 28. Brand Portfolios • Flankers • Cash cows • Low-end, entry-level • High-end prestige 28
  29. 29. Brand Portfolios • Flankers: Fighter brands are positioned alongside competitor brands so that more important and more profitable flagship brands can retain their desire positioning • Cash cows: Still profitable without much marketing, dwindling sales, but still profitable • Low-end, entry-level: Attract customers to the brand franchise with lower prices • High-end prestige: Higher priced, adds prestige and credibility to overall portfolio 29
  30. 30. Brand Extensions • Most products are Brand Extensions (80-90%) - as they create new demand based on trends, customer tastes, without building the brand from scratch each time a new product is launched. 30
  31. 31. BMGT 411: Chapter 9 Crafting Brand Positioning 31
  32. 32. Chapter Questions • How can a firm develop and establish an effective positioning? • How are brands successfully differentiated? • How do marketers identify and analyze competition? • How can market leaders, challengers, followers, and nichers compete effectively? 32
  33. 33. Brand Positioning Statement • Positioning: The act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market • Positioning Statement or Value Propositions • For (target audience), (brand name) is the (frame of reference) that delivers (benefit/point of difference). • Frame of Reference: The category the brand name competes in 33
  34. 34. Examples For (target audience), (brand name) is the (frame of reference) that delivers (benefit/point of difference). 34
  35. 35. Examples For (target audience), (brand name) is the (frame of reference) that delivers (benefit/point of difference). 35
  36. 36. Examples For (target audience), (brand name) is the (frame of reference) that delivers (benefit/point of difference). 36
  37. 37. Defining Associations • Points-of-difference: Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand • Points-of-parity: Associations that are not necessarily unique to the brand but may be shared with other brands 37
  38. 38. Point-of-Difference Criteria for POD • Desirable to Consumer: Consumers must see the brand association as personally relevant to them • Deliverable: The company must have resources to feasibly and profitably create and maintain the brand association in the minds • Ex: If Walmart promised great customer service • Differentiating from Competitors: Consumers must see the brand association as distinctive and superior to competitors 38
  39. 39. Figure 9.1a Perceptual Map: Current Perceptions Brand Repositioning 39
  40. 40. Figure 9.1b Perceptual Map: Possibilities Brand Repositioning 40
  41. 41. Dimensions of Differentiation for Competitive Employee Channel Image Services 41
  42. 42. Employee Differentiation • Better trained • Superior customer service • Often premium priced vs competition 42
  43. 43. Channel Differentiation •Channel coverage, convenience • Makes buying easier • More enjoyable • More rewarding 43
  44. 44. Image Differentiation •Powerful brand images that appeal to customers social and psychological needs • Often premium prices 44
  45. 45. Service Differentiation •Delivering more effectively to consumers • Delivering more efficiently 45
  46. 46. Figure 9.1 Hypothetical Market Structure 46
  47. 47. 47
  48. 48. Protecting Market Share Continuous Innovation 48
  49. 49. Types of Defense Strategies - Market Leaders • Position Defense: Continuing to occupy the most desirable position through marketing and continued innovation • Flank Defense: Developing brand extensions to compete at lower price points to try to meet attackers (Luv’s Diapers Vs Private Label) • Preemptive Defense: Announce new products at a pace competitors cannot keep up with 49
  50. 50. Types of Defense Strategies Market Leaders • Counteroffensive Defense: Lowering prices so competitors cant compete, even at a loss, while gaining profits off other products • Mobile Defense: Enters new territories or market diversifications • Contraction Defense: Letting go, or sunsetting unprofitable products to focus on more profitable ones 50
  51. 51. General Attack Strategies - Challengers • Frontal attack: Matches opponents product, price, and marketing (Usually loses in retail) • Flank attack: Targets underperforming geographic areas, or to serve uncovered market needs • Encirclement attack: Launching an attack in several areas at once, requires great resources • Bypass attack: Diversifying products, innovating, shifting messaging where challenger has advantage • Guerrilla warfare: Grassroots marketing efforts meant to surprise the market leader 51
  52. 52. Specific Attack Strategies • Price discounts • Lower-priced goods • Value-priced goods • Prestige goods • Product proliferation • Product innovation • Improved services • Distribution innovation • Manufacturing-cost reduction • Intensive advertising promotion 52
  53. 53. Market Follower Strategies 53
  54. 54. Market Nicher Strategies • End-User Specialist • Vertical-Level Specialist • Customer-Size Specialist • Specific-Customer Specialist • Geographic Specialist • Product-Line Specialist • Job-Shop Specialist • Quality-Price Specialist • Service-Specialist • Channel Specialist 54
  55. 55. Wood: Chapter 4 Segmenting, Targeting and Positioning 55
  56. 56. Fragmented and Diverse Markets  Customers exhibiting a wider variety of:  Needs  Attitudes,  Behaviors,  Tastes, and Interests. 56
  57. 57. The Need for Segmentation, Targeting, and Positioning  A move away from mass marketing.  A move towards segment marketing.  Allows marketers to focus their resources on the most promising opportunities.  Improves marketing efficiency and effectiveness.  Enables marketers to notice changes in the segment and to respond more quickly. 57
  58. 58. Market Segmentation  Definition: the process of grouping customers within a market according to similar needs, habits, or attitudes that can be addressed through marketing.  Even within a large segment, marketers often can identify niches. 58
  59. 59. Steps in the Segmentation Process 1. Select the market: Eliminate markets that have no need for the product or are inappropriate for other reasons. 2. Apply segmentation variables. 3. Assess and select segments for targeting. 59
  60. 60. Step 1: Select the Market  For purposes of segmentation, the overall market may be defined on the basis of:  The market definition,  Situational analysis,  SWOT analysis, and  Eliminate general markets that have no need for your offerings or are inappropriate for other reasons. 60
  61. 61. Step 2: Apply Segmentation Variables  Marketers can isolate groupings within consumer markets using the following types of variables:  Behavioral and Attitudinal  Demographic  Geographic  Psychographic 61
  62. 62. Type of Variable Examples Behavioral and Attitudinal Benefits sought, rate of usage, attitude toward product and usage, price sensitivity. Demographic Age, gender, family status, household size, income, occupation, education. Geographic Location, distance, climate. Psychographic Lifestyle, activities, interests. 4-8 62
  63. 63. Consumers: Segmenting by Behaviors and Attitudes In many ways, the best way to segment:  Help marketers analyze the specific value that a particular group expects from the offering.  Include variables like:  Benefits required or expected  Usage occasion and status  Loyalty status  Technological orientation  Attitudes toward products or usage 63
  64. 64. Consumers: Segmenting by Demographics  Popular because they are common and easily identified.  Often point to meaningful differences in:  Consumer needs and wants  Product consumption  Media usage 4-10 64
  65. 65. Consumers: Segmenting by Geography  By certain areas or climates.  Targeting promising new markets.  Reluctance to sell in certain areas due to environmental threats or unfavorable climate. 65
  66. 66. Consumers: Segmenting by Psychographics  Lifestyles, activities, and interests.  Provides a deeper understanding of what and why consumers buy.  When consumer activities or interests cross demographic and/or geographic lines. 66
  67. 67. Business Segmentation Variables Type of Variable Examples Behavioral and Attitudinal Purchasing patterns and process, user status, benefits expected, order size/ frequency, buyer/influencer/user attitudes. Demographic Industry, business size, business age, ownership structure. Geographic Location, distance, climate. 67
  68. 68. Businesses: Segmenting by Behaviors and Attitudes  Purchasing patterns  User status  Attitude toward technology  Loyalty status  Price sensitivity  Order size/frequency  Attitudes  Benefits expected 68
  69. 69. Businesses: Segmenting by Demographics Common business demographic variables used:  Industry  Business size  Business age  Ownership structure 69
  70. 70. Businesses: Segmenting by Geography  Utilizes such variables as nation, region, state, city, and climate.  Allows for the grouping of potential customers according to:  Concentration of outlets  Location of headquarters  Geography-related needs or responses 70
  71. 71. Step 3: Assessing and Selecting Target Markets  Target Market: The segment of the overall market that a company chooses to pursue.  Each potential segment must be evaluated based upon fit with the firm’s:  Resources  Goals  Mission  Priorities 71
  72. 72. Assessing Segment Attractiveness Source: Graham Hooley, Nigel F. Piercy, and Brigitte Nicoulaud, Marketing Strategy and Competitive Positioning, 5th ed. (Harlow, England: FT Prentice Hall 2012), Fig. 10.3, p. 245. 72
  73. 73. Segment Personas  Personas: Detailed but fictitious profiles representing how individual customers in their targeted segments behave, live, and buy.  Give marketers a deeper understanding of what shapes each segment’s needs, preferences, buying behavior, and consumption patterns. 73
  74. 74. Next week • October 1: No Class. Invited to hear Guest Speaker on Wednesday Night (10.2) • PNC Chief Marketing Officer Karen Larrimer • Bring a few questions to ask for participation • Guest Speaker October 2: Point Park University, Academic Hall, 601 • Written Assignment #3: Develop a positioning statement using the equation developed in class. Show an example on the blog of how this brands advertising supports this positioning. 74

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