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Lecture 5 Brand Management

Fifth lecture of Brand Management, Focusing on Marketing of Brands.

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Lecture 5 Brand Management

  1. 1. Brand Management Lecture - 5 PT MBA – Year 1 – Trimester III
  2. 2. Today…. <ul><li>Effective Management of Brands </li></ul><ul><li>Brands and 4 Ps </li></ul><ul><li>New Perspectives of Marketing </li></ul><ul><li>Product Strategy </li></ul><ul><li>Pricing Strategy </li></ul><ul><li>Channel Strategy </li></ul><ul><li>Promotions </li></ul>
  3. 3. New perspectives – Philip Kotler <ul><li>Drivers of the new economy </li></ul><ul><li>Digitalization and connectivity </li></ul><ul><li>Disintermediation and Reintermediation </li></ul><ul><li>Customization and Customerization (DIY) </li></ul><ul><li>Industry Convergence </li></ul><ul><li>New customer and company capabilities </li></ul>
  4. 4. Customer capabilities - Consumers <ul><li>A substantial increase in customer power </li></ul><ul><li>A greater variety of available goods and services </li></ul><ul><li>A great amount of information about anything </li></ul><ul><li>Ease in interacting / trading </li></ul><ul><li>Ability to chat / exchange notes </li></ul>
  5. 5. Customer capabilities - Companies <ul><li>New sales channel with augmented Geo reach </li></ul><ul><li>Fuller and richer information about markets, customer, competition etc </li></ul><ul><li>Two way communication – Transmission turns into conversation </li></ul><ul><li>Value adds to permission marketing participants </li></ul><ul><li>High customization levels </li></ul><ul><li>Improve all corporate processes </li></ul>
  6. 6. Personalizing Marketing <ul><li>Experiential Marketing </li></ul><ul><li>One to one marketing </li></ul><ul><li>Permission marketing </li></ul>
  7. 7. Personalizing Marketing>> Experiential Marketing <ul><li>“ Saleable experiences come in four varieties: Entertainment, Aesthetics, education and escapist.”– Pine and Gilmore </li></ul><ul><li>Experiential Marketing </li></ul><ul><li>Focuses on customer experience </li></ul><ul><li>Focuses on consumption situation </li></ul><ul><li>Views customers as rational and emotional beings </li></ul><ul><li>Uses eclectic methods and tools </li></ul>
  8. 8. <ul><li>Focus on individual customers through databases </li></ul><ul><li>Respond to customer dialogue via interactivity </li></ul><ul><li>Customize products and services </li></ul>Personalizing Marketing>> One to One marketing
  9. 9. <ul><li>Offer the prospect an incentive to volunteer </li></ul><ul><li>Offer the interested prospect a curriculum over time, teaching about the product </li></ul><ul><li>Reinforce the incentive to ensure that the prospect stays on </li></ul><ul><li>Over time leverage on the permission to change consumer behavior </li></ul>Personalizing Marketing>> Permission marketing
  10. 10. Product Strategy <ul><li>Perceived Quality and Value </li></ul><ul><ul><li>Brand Intangibles </li></ul></ul><ul><ul><li>Total Quality Management and Return on Quality </li></ul></ul><ul><ul><li>Value Chain </li></ul></ul><ul><li>Relationship Marketing </li></ul><ul><ul><li>Mass customization </li></ul></ul><ul><ul><li>Aftermarketing </li></ul></ul><ul><ul><li>Loyalty programs </li></ul></ul>
  11. 11. Product Strategy>> Perceived Quality and Value <ul><li>Perceived quality – </li></ul><ul><li> “Customer’s perception of the overall quality of the superiority of the product to relevant alternatives and with respect to its intended purpose ” </li></ul><ul><li>Performance: Primary characteristics operation </li></ul><ul><li>Features: Secondary elements </li></ul><ul><li>Conformance Quality: defect free </li></ul><ul><li>Reliability: consistency over time and from purchase to purchase </li></ul><ul><li>Durability: Expected economic life </li></ul><ul><li>Serviceability </li></ul><ul><li>Style and Design: “Morphy richards, Braun” </li></ul>
  12. 12. <ul><li>Brand intangibles </li></ul><ul><ul><li>– service quality, delivery and installation </li></ul></ul><ul><ul><li>Abstract – imagery, symbolisms, personality depicted </li></ul></ul><ul><li>Total Quality Management </li></ul><ul><li>Return on Quality </li></ul>Product Strategy>> Intangibles, TQM and RoQ
  13. 13. Product Strategy>> TQM strategy <ul><li>Must be perceived by customers </li></ul><ul><li>Must be reflected in every company activity, not just in the products </li></ul><ul><li>Requires total employee commitment </li></ul><ul><li>Requires high quality partners </li></ul><ul><li>Can always be improved </li></ul><ul><li>Improvements sometimes requires quantum leaps </li></ul><ul><li>Does not always cost more </li></ul><ul><li>Is necessary but may not be sufficient </li></ul><ul><li>A quality drive cannot save a poor product </li></ul>Quality
  14. 14. <ul><li>Start with an effective quality program </li></ul><ul><li>Calculate the cost of current quality initiatives </li></ul><ul><li>Determine what key factors retain customers – what drives them off </li></ul><ul><li>Focus on customer satisfaction </li></ul><ul><li>Pilot testing of promising initiatives and cut down of non impactful ones </li></ul><ul><li>Improve continually </li></ul>Product Strategy>> RoQ
  15. 15. Relationship marketing <ul><li>Acquiring customer costs 5 times more than retaining current customers </li></ul><ul><li>Average company loses 10% customers every year </li></ul><ul><li>5% reduction in customer attrition can result in profit increase from 25% to 85%, depending on the industry </li></ul><ul><li>Incremental profits by retained customers over time </li></ul><ul><li>Mass customization and loyalty programmes </li></ul>
  16. 16. Pricing strategy>> Consumer Price perceptions <ul><li>Relationship between Pricing and Perceived quality </li></ul><ul><li>“ Price bands” </li></ul>
  17. 17. <ul><li>Right blend of </li></ul><ul><ul><li>Product design and delivery – adding to perceived value </li></ul></ul><ul><ul><li>Product costs – Lower costs, Save </li></ul></ul><ul><ul><li>Product prices – What the customer is willing to pay </li></ul></ul><ul><li>Every Day Low Pricing (EDLP) v/s promotion-driven pricing </li></ul>Pricing Strategy>> Value Pricing
  18. 18. Channel Strategy <ul><li>Direct Channels </li></ul><ul><ul><li>Product information needs are high </li></ul></ul><ul><ul><li>Product customization is high </li></ul></ul><ul><ul><li>Product quality assurance is important </li></ul></ul><ul><ul><li>Purchase lot size is important </li></ul></ul><ul><ul><li>Logistics are important </li></ul></ul><ul><ul><li>Industrial products and High networth products </li></ul></ul><ul><li>Indirect channels </li></ul><ul><ul><li>A broad assortment is essential </li></ul></ul><ul><ul><li>Availability is critical </li></ul></ul><ul><ul><li>After-sales service </li></ul></ul><ul><ul><li>Geographic reach </li></ul></ul><ul><li>Service provided by Channel members </li></ul><ul><li>Marketing research </li></ul><ul><li>Communications </li></ul><ul><li>Contact matching </li></ul><ul><li>Negotiations </li></ul><ul><li>Physical distribution </li></ul><ul><li>Financing </li></ul><ul><li>Risk sharing </li></ul><ul><li>Service </li></ul>
  19. 19. Channel strategy <ul><li>Support to indirect channels </li></ul><ul><ul><li>Retails Segmentation </li></ul></ul><ul><ul><li>Cooperative Advertising </li></ul></ul><ul><li>Web Strategies </li></ul>
  20. 20. Example of channel mix <ul><li>Brand – Nike </li></ul><ul><li>Retail – retail stores, malls etc </li></ul><ul><li>Branded Nike town stores </li></ul><ul><li> </li></ul><ul><li>Catalog retailers </li></ul><ul><li>Factory outlet </li></ul><ul><li>Speciality stores – golf and hockey </li></ul><ul><li>Nike All condition gear </li></ul>
  21. 21. summary <ul><li>After having a clear positioning of the brand, it has to be executed well through a meticulous marketing process </li></ul><ul><li>The product should deliver through its core utility, added expectations and abstract appeal ( should hit the need ) </li></ul><ul><li>The Price should account for the cost, and should tap the extent to which the customer is willing to pay ( Should hit the ability of the user ) </li></ul><ul><li>A careful combination of direct and indirect channels is pivotal in making the brand available. ( should make it accessible or available to the user ) </li></ul>