Marketing Chapter 5: Brand Equity Strategies

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Questions and Answers

What does mass customization refer to in marketing?

Creating products without consumer input

Offering a limited range of customizable options

Producing a single standard product for all customers

Making products to fit customers’ exact specifications (correct)

What is the goal of permission marketing?

To gain customer data through online surveys

To market only to consumers who have given their express permission (correct)

To market to all consumers without consent

To implement aggressive advertising tactics

According to the customer-based brand equity model, different marketing approaches emphasize different aspects of what?

Customer engagement

Sales strategies

Brand equity (correct)

Brand loyalty

How is perceived quality defined in the context of product strategy?

Customers’ perceptions of overall quality compared to alternatives Signup and view all the answers

What is a key focus of managing customers post-purchase?

Providing support through user manuals and customer service programs Signup and view all the answers

What are some processes or programs that help in managing customers post-purchase?

User manuals and loyalty programs Signup and view all the answers

Why is price considered a critical element of the traditional marketing mix?

It is the sole element that generates revenue Signup and view all the answers

What advantage does building a strong brand provide in terms of pricing?

The ability to charge price premiums Signup and view all the answers

What is a key characteristic of relationship marketing?

It creates stronger bonds with consumers. Signup and view all the answers

How does experiential marketing enhance product promotion?

By connecting products with unique consumer experiences. Signup and view all the answers

What drives the need for personalized marketing in modern times?

The rapid expansion of the Internet and consumer empowerment. Signup and view all the answers

Which of the following is NOT a traditional marketing approach mentioned?

Market segmentation Signup and view all the answers

What is NOT a benefit of using email to communicate with customers?

It eliminates the need for consent from customers. Signup and view all the answers

Which aspect does NOT contribute to brand resonance according to relationship marketing?

Establishing a transaction-based interaction. Signup and view all the answers

Which statement best describes mass customization?

It enables consumers to customize their experiences. Signup and view all the answers

In the context of brand experience, what does the 'intellectual' aspect refer to?

Engagement in thinking and curiosity about the brand. Signup and view all the answers

Which of the following factors contributes to the changing marketing strategies and tactics?

Fragmentation of traditional media Signup and view all the answers

What is a primary effect of greater customer empowerment in the marketplace?

Customers can interact more easily with marketers. Signup and view all the answers

Why have private labels grown in popularity in recent years?

Increased competition and industry convergence Signup and view all the answers

What advantage do companies have in the new economy regarding information?

Ability to collect fuller and richer information about their markets Signup and view all the answers

What is the primary objective of value pricing in a pricing strategy?

Achieving a balance between product quality, costs, and prices Signup and view all the answers

Which of the following is NOT a development impacting modern marketing?

Increasing reliance on business-as-usual tactics Signup and view all the answers

Why is consumer perception increasingly important in pricing strategy?

Companies need to cater to consumer preferences to build brand equity Signup and view all the answers

What is one of the new capabilities that consumers have in the new economy?

Access to a wider variety of products Signup and view all the answers

What must consumers do for a pricing strategy to be successful according to the content?

Understand and appreciate the value of the brand Signup and view all the answers

Which factor reflects the challenges faced by marketers in today's environment?

Fragmentation of the traditional media landscape Signup and view all the answers

What is a crucial element for building a pricing strategy focused on brand equity?

Setting a method for current price adjustments and promotions Signup and view all the answers

How have technological advancements affected marketing practices?

They have enabled greater competition among small businesses. Signup and view all the answers

Which of the following is NOT a factor in achieving a successful value pricing strategy?

Focusing exclusively on product delivery Signup and view all the answers

What role does pricing play in building brand equity?

It can reinforce brand perceptions among consumers Signup and view all the answers

What does value pricing aim to uncover according to the content?

The optimal combination of quality, costs, and prices Signup and view all the answers

What must firms communicate to ensure pricing success?

The values that justify the price set Signup and view all the answers

What is the primary purpose of price segmentation?

To adjust prices according to different market segments Signup and view all the answers

What is a characteristic of everyday low pricing?

It maintains a consistent pricing structure Signup and view all the answers

Which factor is NOT a reason for price stability?

Price elasticity Signup and view all the answers

What is a feature of direct channels in channel strategy?

Includes selling through direct personal contact Signup and view all the answers

Which channel typically provides the most direct interaction with customers?

Retailers Signup and view all the answers

Which strategy is employed to enhance brand equity through indirect channels?

Cooperative advertising Signup and view all the answers

What is a potential issue with selling through company-owned stores?

Limited market reach Signup and view all the answers

In the context of indirect channels, what is meant by retail segmentation?

Adjusting product offerings for various retailers Signup and view all the answers

Study Notes

Chapter 5: Designing Marketing Programs to Build Brand Equity

Learning Objectives:
- Identify new perspectives and developments in marketing.
- Describe how marketers enhance product experience.
- Explain the rationale for value pricing.
- List direct and indirect channel options.
- Summarize reasons for private label growth.

New Perspectives on Marketing

Marketing strategies and tactics have changed dramatically due to shifts in external marketing environments.

New Approaches Embraced by Marketers

Rapid technological developments
Greater customer empowerment
Fragmentation of traditional media
Growth of interactive and mobile marketing
Channel transformation and disintermediation
Increased competition and industry convergence
Globalization and growth of developing markets
Heightened environmental, community, and social concerns
Severe economic recession

The New Capabilities of the New Economy

Consumers:
- Wield more customer power.
- Purchase a wider variety of goods/services.
- Access a vast amount of information.
- Interact easily with marketers.
- Compare information with other consumers.
Companies:
- Operate powerful information and sales channels with expanded geographic reach.
- Gather richer information about markets, customers, and competitors.
- Facilitate two-way communication and efficient transactions.
- Customize offerings and services for individual consumers.
- Improve purchasing, recruiting, training, and internal/external communication.

Integrating Marketing

Personalizing Marketing:
- Rapid expansion of the internet & fragmentation of mass media necessitates personalized marketing.
- The modern economy values the individual consumer.
- Marketers adapt, using concepts like experiential and relationship marketing.
Reconciling Different Marketing Approaches:
- Mass customization, one-to-one, and permission marketing are effective strategies to engage consumers with a brand.
- These approaches emphasize various aspects of brand equity, according to the customer-based brand equity model.

Relationship Marketing

Experiential Marketing:
- Promotes products by connecting them with unique consumer experiences.
- Transcend a product or service to create stronger bonds with customers.
- Maximizes brand resonance.
Relationship Marketing (cont.)
- Focuses on creating stronger bonds with consumers beyond the product itself.
- It aims to be more than just a transaction; it means building a more robust connection with consumers.
- Mass Customization: Make products to fit specific customer needs (enabled by digital technology).
- Permission Marketing: Marketing only after gaining consent.
Brand Experience Scale (Figure 5-2):
- Sensory: Evokes strong visuals and other senses.
- Affective: Triggers emotions and feelings.
- Behavioral: Leads to physical actions and behaviors.
- Intellectual: Stimulates thinking and problem solving.

Product Strategy

Perceived Quality: Customers' overall perception of product quality superior to alternatives in the context of its purpose.
Managing Customers Post-Purchase: Crucial in e-commerce, this includes tools like user manuals, customer service programs, and loyalty programs.

Pricing Strategy

Consumer Price Perceptions: Choosing a pricing strategy to build equity requires setting current prices and policies for promotions. Importance is placed on consumer perceptions and preferences, not only on costs.
Figure 5-3: Price Tiers in the Ice Cream Market: Shows how brands position themselves in the ice cream market concerning quality, and price tiers.

Channel Strategy

Channel Design: Involves direct and indirect channels.
Indirect Channels: Retailers, push and pull strategies and other marketing techniques are used here to affect brand equity.
Direct Channels: Manufacturers sell directly to consumers, including company-owned stores, store-within-a-store, or other methods like phone or internet sales.
Figure 5-5: JCPenney Customer Channel Value Analysis: Provides examples of average yearly customer spending in various channels.

Setting Prices to Build Brand Equity

Value Pricing: Companies uncover a product's perfect balance of quality, costs, and prices that satisfy consumer needs & meet the company's profit goals through value pricing.
Communicating Value: Delivering good value is not enough to gain success. Consumers need to understand and appreciate the brand's value. At times, this value must be communicated to them.
Price Segmentation: Setting and adjusting prices for distinct market segments.
Everyday Low Pricing: Avoiding fluctuations by offering constant "everyday" base prices, avoiding inconsistent discounts and price increases/decreases.
Reasons for Price Stability: Includes forward buying and diverting.

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Description

This quiz covers Chapter 5 on designing marketing programs aimed at building brand equity. Learn about new marketing perspectives, product experience enhancement, value pricing rationale, and channel options. Understand the impact of technological advancements and customer empowerment in today’s marketing landscape.