Chapter 6 Advanced E-Commerce (Dr.Maha)

7/31/2019 Chapter 6 Advanced E-Commerce (Dr.Maha)

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Chapter 6

Market Communications

and

Branding

McGraw-Hill/Irwin


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6-3Chapter 6: MarketChapter 6: Market

Communications and BrandingCommunications and Branding

Questions answered in this chapter:

What are the four categories of market

communications?

What constitutes a good brand?

What is a 10-step branding process?

How does online branding compare between

American Airlines and Continental Airlines?

What are the arguments for and against leveraging

an offline brand into the online environment?


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Integrating Communications and BrandingIntegrating Communications and Branding

Branding is about consumers perception of

the offeringhow it performs, how it looks,

how it makes one feel, and what messages it

sends Market communications represent

customers interaction with the brand and,

more generally, mass-marketing approaches

In the offline world, market communications tend tobe one-way, from the firm to the customer

In the online world, market communications

become much more interactive (two-way)


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What is a Good BrandWhat is a Good Brand

Brand name, term, sign, symbol, or design, or a

combination of them intended to identify the goods &

services of one seller or group of sellers & to

differentiate them from those of competitionA good brand provides positive consumer responses and

benefits both target customers and the firm

Brand equity

a set of assets (and liabilities) linked to a brandsname & symbol that add to the value provided by a

product or service to a firm and/or that firms

customers


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What is a Good BrandWhat is a Good Brand

1. A brand has three components: Core product/service

Wrap-around

Marketing communications2. Consumer response

Brand awareness

Brandassociation

3. Benefits to the customer & firm

Realized from +ve costumer responses


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1-71-76-7Exhibit 6Exhibit 6--5: A Simple Conceptual5: A Simple Conceptual

Model of Brand EquityModel of Brand EquityA good brand...

CUSTOMER BENEFITS

Confidence

Loyalty

Satisfaction

FIRM BENEFITS

Reduce marketing costs

Increased margins Opportunity for brand

extensions

BRAND AWARENESS

Depth

Breadth

BRANDASSOCIATIONS

Strength

Relevant

Consistent

Valence

Uniqueness

Memorable

Distinctive

CoreCore

Product /Product /

ServiceService

Market Communication

provides positive

consumer responses...

and benefits both target

customers and the firm


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A Simple Conceptual Model of Brand EquityA Simple Conceptual Model of Brand Equity

Consumer responses can take two broadforms:

A. Brand awareness

Refers to the strength of brand name in

customers mind

Awareness is measured in terms of

Depth: how much do you know about the brand

Breadth: how diverse is what you know about the brand

B. Brand associations

Connections that consumers make to the brand


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Brand association category include1. Association strength

intensity of linking words, pictures or meaning with the brand.

Measure of strength include the number of times an association

is mentioned, ranking of association and speed of recall

2. Association valence: positive or negative degree of

association

Ex. Easy to use +ve association

Ex. Unprofitable -ve association

3. Association uniqueness: degree of association being distinct,

relative to other brands

Distinctive captures the degree of product differentiation

w.r.t. other brands

Memorability is measured by lasting communication effect


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Strength of Brand association is dividedbetween two criteria

1. Relevance

The degree to which a brand is perceived as

meeting the needs of the target customer

2. Consistency

The degree to which each element of the brand

reinforces the brand intent


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Consumer benefits may include Increased confidence in the purchase

decision,

Loyalty to the brand,

Satisfaction with the experience

Firm benefits translate into

Top-line revenue growth,

Increased margins,

Lower marketing costs

Opportunity for brand extensions


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Types of BrandsTypes of Brands

Pure offline and online brands Early days

Classic offline brands include the Gap, UPS, and Disney

New online brands include Amazon, Yahoo, and

Priceline

AfterInternet Expansion

There is cross over from offline world to online one and visaversa


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Types of BrandsTypes of Brands

Blurring of the distinction Brands such as Yahoo were established online but use

offline promotional activities to grow brand awareness

Brands such as E*Trade are traditional brands, but they areextensions of the online brandsand thus a mixture of the

two Brands such as Egghead.com have completely shifted from

an offline brand to a purely online brand

Brands such as WingspanBank were established in thevirtual world but by a traditional brand

Brands such as Schwab have successfully bridged the gap

between online and offline activities Brands such as Ragu were established offline but use

online promotion to grow brand awareness


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Exhibit 6Exhibit 6--6: Types of Brands6: Types of Brands

Traditional Brands Online Brands

The product / service with which the

brand is associated was established in

the online world

Examples:

Amazon

Yahoo

ZDNet

AOL

Priceline

CDNow

Excite

E*Trade

The product / service with which the

brand is associated was established

offline in the bricks-and-mortar world

Examples:

Gap

UPS

Dell

J.Crew

McDonalds

Office Depot

Ragu

Coca-Cola

Disney


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Exhibit 6Exhibit 6--7: Brand Presence7: Brand Presence

Traditional

Brands

OnlineOffline

Online

Brands

Source: Monitor Analysis

Mix of Promotional Activities

Product

Establishment

E*Trade

Ragu

E*Trade Financial ATM

Wingspan

bank

Schwab

Egghead

Bank One


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Exhibit 6Exhibit 6--8: Building an Online Brand8: Building an Online Brand

1. Clearly define the brand audience.

2. Understand the customer.

3. Identify key leverage points in customer experience. 4. Continually monitor competitors.

5. Design compelling and complete brand intent.

6. Execute with integrity.

7. Be consistent over time.

8. Establish feedback systems. 9. Be opportunistic.

10. Invest and be patient.

Integrated

Campaign

Value

Cluster


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1-171-176-17Building an Online BrandBuilding an Online BrandStep 1: Clearly define the brand audience.Step 1: Clearly define the brand audience.

Identify clearly the target segment

Argument: number of segments can be

effectively addressed in Online

environment than in offline one


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1-181-186-18Building an Online BrandBuilding an Online BrandStep 2: Understand the Target CustomerStep 2: Understand the Target Customer

It is useful to describe a typical customer

in a segment

Require deep customers understanding for

both environment

Blend a mixture of traditional & online

research


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1-191-196-19Building an Online BrandBuilding an Online BrandStep 3: Identify Key Leverage Points in CustomerStep 3: Identify Key Leverage Points in Customer

ExperienceExperience

Key organization levers are

Product prices, customer interface, mix of

online & offline communications

Use the above to activate the customer

behavior to be consistent with organization

objective


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1-201-206-20Building an Online BrandBuilding an Online BrandStep 4: Continually Monitor CompetitorsStep 4: Continually Monitor Competitors

Building a brand is tough even if there is

no competition

Competition in online is similar to offline

but has two distinction1. Degree of competition intensity is different

as new firms may emerge both within the

product category or across product category2. Much easier to analyze competitors given

the emergence of sources


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1-211-216-21Building an Online BrandBuilding an Online BrandStep 5: Design Compelling and Complete Brand IntentStep 5: Design Compelling and Complete Brand Intent

Brand bring to life value proposition which

tend to focus on high-level customer focus

(how customers interpret the product)

Brand intent tends to be more segment

focused in offline while online environment

allows individuals within the segment tocustomize the offering


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1-221-226-22Building an Online BrandBuilding an Online BrandStep 6: Execute with IntegrityStep 6: Execute with Integrity

Refers to the quality of the implementation

choices & the extent to which the firm

provides clear, trustworthy message

Offline branding took consistent, long-term

investment

What about online branding?


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1-231-236-23Building an Online BrandBuilding an Online BrandStep 7: Be Consistent over TimeStep 7: Be Consistent over Time

Strong brand take time to develop

Send consistent message

In online environment, each customer

behave differently, thus customer

experience is unique


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1-241-246-24Building an Online BrandBuilding an Online BrandStep 8: Establish Feedback SystemsStep 8: Establish Feedback Systems

Market communication & reactions rarely

act work out as planned

Effects of branding can be measured more

quickly & precisely in online environment

because of the availability of analysis &

tracking tools


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1-251-256-25Building an Online BrandBuilding an Online BrandStep 9: Be OpportunisticStep 9: Be Opportunistic

Brand-building opportunities are present in

unexpected way

Opportunity occurs at the segment level in

offline and at individual level in online


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1-261-266-26Building an Online BrandBuilding an Online BrandStep 10: Invest and be PatientStep 10: Invest and be Patient

Important to note that brands nurtured &

managed over internet

Careful investment, long-term patience &

ability to focus on long run are critical

Online has the ability to generate loyalty

more quickly than offline


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Exhibit 6Exhibit 6--11: Online Branding Choices11: Online Branding Choices

Source: Forrester Research, Monitor Analysis

BrandReinforce-

ment

Broad Vs.Focused(Specific

Products /Services)

BrandAssociation

BrandAwareness

Firm Benefits

CustomerBenefits

ProductSales

Sales Leads

BrandCreation

P

roductT

rial

Store Traffic

What value do you

want to derive from

your online presence?

What part of brand

equity do you want to

build?

What product / service

are you offering them?

Value ObjectiveComponent of Brand

Equity

Product ScopeTarget Audience

Broad Vs.Focused(Specific

Segments)

Who do we want to

target?


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Branding Choices: Value ObjectiveBranding Choices: Value Objective

A firms online branding choices depend upon itscommunications objectives

Brand creation.

Objective may be to build a new-to-the-world brand name

Sales leads

Company may decide that Internet will be used to facilitate the

sales-lead process Store traffic

Principal objective for some sites may be to increase storetraffic

Product trial

A fourth objective may be trial usage of the product

Product sales

Company can also measure the success of a campaign basedupon the actual increase in product or service sales

Brand reinforcement.

It is possible that communications effort is focused on

reinforcing a brand image that is already widely accepted in themarketplace

Chapter 6 Advanced E-Commerce (Dr.Maha)

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