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CHAPTER 5

DESIGNING MARKETING PROGRAMS TO BUILD BRAND

EQUITY

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Strategic Brand Management Process

Mental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantra

Mixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associations

Brand Value ChainBrand auditsBrand trackingBrand equity management system

Brand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalization

KEY CONCEPTSSTEPS

Grow and SustainBrand Equity

Identify and EstablishBrand Positioning and Values

Plan and Implement Brand Marketing Programs

Measure and InterpretBrand Performance

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CUSTOMER-BASED BRAND EQUITY PYRAMID

RESONANCE

SALIENCE

JUDGMENTS FEELINGS

PERFORMANCE IMAGERY

4. RELATIONSHIPS =

What about you & me?

4. RELATIONSHIPS =

What about you & me?

3. RESPONSE =

What about you?

3. RESPONSE =

What about you?

2. MEANING =

What are you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?

1. IDENTITY =

Who are you?

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Personalizing Marketing

• Relationship Marketing – provide more holistic, personalized brand experiences to create stronger consumer ties.

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Personalizing Marketing

Relationship Marketing:– Experiential Marketing– One-to-One Marketing– Permission Marketing

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Experiential Marketing

• 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!

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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

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One-to-One Marketing:Consumer Differentiation

• Treat different consumers differently– Different needs– Different values to firm

• current• future (life-time value)

• Devote more marketing effort on most valuable consumers (and customers)

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One-to-One Marketing:Fundamental Strategies

• Focus on individual consumers – Consumer databases

• Respond – Interactivity: A dialogue• Customize

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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.”– Anticipated– Personal– Relevant

• Permission marketing can be contrasted to interruption marketing

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5 Steps in Permission Marketing

1. Offer the prospect an incentive to volunteer.

2. Offer the interested prospect a curriculum over time, teaching consumers about the product.

3. Reinforce the incentive to guarantee that prospect maintains the permission.

4. Offer additional incentives to get more permission from the consumer.

5. Over time, leverage the permission to change consumer behavior toward profits.

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Personalizing Marketing• 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

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Integrating the BrandInto Supporting Marketing

Programs

• Product Strategy

• Pricing Strategy

• Communications Strategy

• Channel Strategy

Supporting marketing mix should be designed to enhance awareness and establish desired brand image.

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Product Strategy

• Perceived quality and value– Brand intangibles

– Total quality management and return on quality

– Value chain

• Relationship marketing issues– Mass customization

– Aftermarketing

– Loyalty programs

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Product Strategy

• 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.

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Product Strategy

• 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.

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Pricing Strategy

• 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– Value pricing

– Everyday low pricing

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Communications Strategy

– Mix & match communication options

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Channel Strategy

– Channel design: Direct vs. Indirect– Blend channel “push” with consumer

“pull”– Retail segmentation– Cooperative advertising– Company-owned stores and web strategies

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Channel Strategy• 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.