Chapter 02 IMC notes.doc

8/12/2019 Chapter 02 IMC notes.doc

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MARKETING COMMUNICATIONS

CHALLENGES: ENHANCING BRAND EQUITY,

INFLUENCEING BEHAVIOR, AND BEING

ACCOUNTABLE

Chapter Objectives

Explain the concept of brand equity from both the companys and the customers

perspectives.

Describe the positive outcomes that result from enhancing brand equity.

Appreciate a model of brand equity from the customers perspective.

Understand how marcom efforts must influence behavior and achieve financial

accountability.

Chapter OverviewThe basic issues addressed in this chapter are these !hat can mar"eting communicators do to

enhance the equity of their brands and# beyond this# affect the behavior of their present and

prospective customers$ Also# how can mar"eting communicators %ustify their investments inadvertising# promotions# and other marcom elements and demonstrate financial accountability$

The concept of brand equity is explained from both the companys perspective and the

consumers perspective. The firm&based viewpoint of brand equity focuses on outcomesextending from efforts to enhance a brands value to its various sta"eholders and discusses

various outcomes '() achieving a higher mar"et share# '*) increasing brand loyalty# '+) being

able to charge premium prices# and ',) earning a revenue premium. -rom the perspective of thecustomer# a brand possesses equity to the extent that they are familiar with the brand and have

stored in their memory favorable# strong# and unique brand associations. rand equity from thecustomers perspective consists of two forms of brand&related "nowledge '() brand awareness

and '*) brand image. The chapter covers three ways by which brand equity is enhanced andlabels these the '() spea"&for&itself approach# '*) message&driven approach# and '+) leveraging

approach. The chapter then discusses ten traits shared by the worlds strongest brands.

The latter portion of the chapter covers the concept of /012# or return on mar"etinginvestments. 3everal difficulties of measuring marcom effectiveness are discussed '() choosing

a metric# '*) gaining agreement# '+) collecting accurate data# and ',) calibrating specific effects.

The chapter then discusses mar"eting&mix modeling 'i.e.# multivariate regression analysis) and

how it can assist managers in determining the effect of each marcom element on sales volume.

When Polls Fail to Reveal the Complete PictureMarketing researchers and pollsters are constantly surveying people about their likes and dislikes, their

voting intentions, their thoughts about which actors should win cademy wards, and on and on! Pollsters

also investigate consumers" thoughts and #eelings toward brands! $n a recent online poll %,&'' adults were

asked to spontaneously identi#y up to three brands that they personally regarded as the (best!) Coca*Cola,

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+ony, oyota, -ell, Ford, .ra#t Foods, Pepsi*Co, Microso#t, pple, and /onda were identi#ied as the 0' (best)

brands! Critics suggest that such polls are not true indicators o# the e1uity o# a brand, as Ford Motors is

anything but one o# the world"s best brands in terms o# pro#itability, market share, sales growth, and

consumer con#idence! (2est brands) surveys are more a measure o# brand awareness than o# brand e1uity!


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MKTG 6220

IMC

Summer 2014

Focus: Chapter 2: Marcoms Challenges: Enhancing Brand Equity, Influencing Behavior, and

Being Accountable

Brand Equity

Definition: This is the differential effect that, knowing the brand name has, on customer response to

the product and its marketing. It is a measure of the brands ability to capture customer preference

and loyalty (Armstrong & Kotler). Brand equity can be considered either from the perspective of

the organization that owns it or from the vantage point of the customer.

From organizations perspective:

1. A higher market share is achieved

2. Brand loyalty increases

3. Premium prices can be charged: As brand equity increases, the brand is able to charge higher

prices.

4. The brand earns a revenue premium (The revenue differential between a branded item and a

corresponding private labeled item; e.g., the difference in revenue earned by the brand being Dole

versus Kroger).

From the consumers perspective (begins with brand knowledge, which involves awareness and image)

Brand awareness: An issue of whether a brand name comes to mind when consumers think about a

particular product category and the ease with which the name is evoked.


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Brand awareness involvesbrand recognition(if you were shown the logo or packaging, or given the

name on a list, you would know what kind of product it is and something about it) andbrand recall

(you could come up with the name if someone asked you to list or name all the brands in a particular

product category). Brand recall can be either aided or unaided.

Aided recall: E.g. Here is a list of brands. Which of them is a toothpaste? This method generates

more recall.Unaided recall: List all brands of toothpaste tht u know abt. No clues given. Generate on their own.

Brand Image (can be favorable or unfavorable)

The types of associations that come to the consumers mind when contemplating (observe carefully)

a particular brand.

Consumers also associate certain things with brands (Brand associations): brands have certain

attributes; they provide certain benefits; and we have certain attitudes, positive or negative, towards

them.

In terms of image, we can have favorable or unfavorable impressions, which can be weak or strong in

their intensity, and they can relate only to one brand (unique) or to other brands in the category); e.g.

you think highly of Nike shoes and you think they are the only ones that guarantee comfort and

fashion.

Benefits that a brand provides(MCQ)

-Functional: It quenches my thirst; it covers my feet.

-Symbolic: it helps me to make a statement about who I am (I am stylish/fashionable; I have good

taste; I am an innovator).

-Experiential: it allows me to have certain experiences, which may be pleasant/fun/novel, etc.

Brand Awareness Pyramid:Review this model that describes how brand awareness works. A brand starts out being unknown

(consumers are unaware of the brand); then, through various IMC efforts, the consumers come to be

able to recognize the brand; a higher level of awareness is brand recall (where the consumer can

come up with the name without prompts) and ultimately, the brand becomesTop of Mind, meaning

whenever the product category is activated, the brand that comes first to mind is this brand.

Aim of marcom is to move consumers from a state of unawareness of my brand to top of mind

awareness.

Disadvantages of this model: (Criticism)

Just bcoz, the brand is in the TOMA, it doesnt mean tht the consumers will purchase it or even

capable of even purchasing it and it may also not be only due to a positive effects caused by the

brand. It may also be due to -ve impacts caused by the brand to the consumers.


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Note that brands also have personalities; dimensions of brand personality: Sincerity; Excitement;

Competence; Sophistication; and Ruggedness (toughness).

Ways Brand Equity Is Enhanced:

1. Speak for itself: overtime, for example, the brand has lived up to our expectations.No need anyone

to talk abt it.

2. Message-driven: based on IMC efforts. Based on the ads, u can enhance it. Undermining the brand

may be a caution to be considered by luxury brands in this.

3.Leveraging: by association; for example, if the brand is an Olympic sponsor, that says something

about the brand. Note the current concern about BP (British Petroleum) as an Olympic sponsor.

Leveraging can also come from country of origin(eg. wine coming from France is supposed to be

gud), celebrity endorsers, third-party endorsements, or alliances with other brands/companies.-i. Leveraging associations from other brands (What is the difference between co-branding and

ingredient branding? What are some examples of each?)

-ii. Leveraging associations from people:Bill Gates-Microsoft, Steve Jobs-Apple, Vasanth & Co. ,

Celebrities can also be used here.

-iii. Leveraging associations from things

iv. Leveraging associations from places.

Benefits of enhancing brand equity: (organizational point of view)

-Increased consumer loyalty

-Long-term growth and profitability for the brand

-Brand differentiation from competitive offerings-Insulation of brand from price competition

Global brands:What makes a brand a global brand? What are some characteristics of global brands?

What are some examples of global brands?


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Measurement:

-What to measure: (a) change in brand awareness; (b) changes in attitudes toward the brand; (c)

increased purchase intentions; and (d) sales volume.

-Return on investments (spending on the various IMC tools is seen as an investment for which there

should be some return)

-Marketing mix modeling: models based on the contributions of various IMC tools and tactics onsome variable such as final sales

-Difficulties in measurement, including agreement on what to be measured, the appropriate metrics

to be used, precise data, and dissecting the contribution of each IMC tool and tactic.

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