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