Strategic Brand Management PDF

Strategic Brand Management: Building, Measuring, and Managing Brand Equity Fifth Edition, Global Edition Chapter 5 Designing Marketing Program...

Strategic Brand Management: Building, Measuring, and Managing Brand Equity Fifth Edition, Global Edition Chapter 5 Designing Marketing Programs to Build Brand Equity Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objectives 5.1 Identify some of the new perspectives and developments in marketing 5.2 Describe how marketers enhance product experience 5.3 Explain the rationale for value pricing 5.4 List some of the direct and indirect channel options 5.5 Summarize the reasons for the growth in private labels Copyright © 2020 Pearson Education Ltd. All Rights Reserved New Perspectives on Marketing As firms are dealing with enormous shifts in their external marketing environments: – Marketing strategies and tactics have changed dramatically Copyright © 2020 Pearson Education Ltd. All Rights Reserved New Approaches Embraced by Marketers Rapid technological developments Greater customer empowerment Fragmentation of traditional media Growth of interactive and mobile marketing options Channel transformation and disintermediation Increased competition and industry convergence Globalization and growth of developing markets Heightened environmental, community, and social concerns Severe economic recession Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 5-1: The New Capabilities of the New Economy (1 of 2) Consumers Can wield substantially more customer power. Can purchase a greater variety of available goods and services. Can obtain a great amount of information about practically anything. Can more easily interact with marketers in placing and receiving orders. Can interact with other consumers and compare notes on products and services. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 5-1: The New Capabilities of the New Economy (2 of 2) Companies Can operate a powerful new information and sales channel with augmented geographic reach to inform and promote their company and its products. Can collect fuller and richer information about their markets, customers, prospects, and competitors. Can facilitate two-way communication with their customers and prospects, and facilitate transaction efficiency. Can send ads, coupons, promotions, and information by e-mail to customers and prospects who give them permission. Can customize their offerings and services to individual customers. Can improve their purchasing, recruiting, training, and internal and external communication. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Integrating Marketing Personalizing Marketing Reconciling the Different Marketing Approaches Copyright © 2020 Pearson Education Ltd. All Rights Reserved Personalizing Marketing Rapid expansion of the Internet and continued fragmentation of mass media – Have brought the need for personalized marketing Modern economy celebrates the power of the individual consumer Marketers have embraced concepts such as experiential marketing and relationship marketing Copyright © 2020 Pearson Education Ltd. All Rights Reserved Relationship Marketing (1 of 3) Experiential Marketing Relationship Marketing Mass Customization Permission Marketing Copyright © 2020 Pearson Education Ltd. All Rights Reserved Relationship Marketing (2 of 3) Experiential marketing – Promotes a product by communicating features and benefits and connecting it with unique and interesting consumer experiences Relationship marketing – Transcend an actual product or service to create stronger bonds with consumer – Maximize brand resonance Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 5-2: Brand Experience Scale Sensory This brand makes a strong impression on my visual sense or other senses. I find this brand interesting in a sensory way. This brand does not appeal to my senses. Affective This brand induces feelings and sentiments. I do not have strong emotions for this brand. This brand is an emotional brand. Behavioral I engage in physical actions and behaviors when I use this brand. This brand results in bodily experiences. This brand is not action oriented. Intellectual I engage in a lot of thinking when I encounter this brand. This brand does not make me think. This brand stimulates my curiosity and problem solving. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Relationship Marketing (3 of 3) Mass customization – Making products to fit customers’ exact specifications ▪ Digital-age technology enables customized products Permission marketing – The practice of marketing to consumers only after gaining their express permission Copyright © 2020 Pearson Education Ltd. All Rights Reserved Reconciling the Different Marketing Approaches Mass customization and one-to-one and permission marketing are: – Potentially effective means of getting consumers more actively engaged with a brand According to the customer-based brand equity model: – Different approaches emphasize different aspects of brand equity Copyright © 2020 Pearson Education Ltd. All Rights Reserved Product Strategy Perceived Quality Managing Customers Post-Purchase Copyright © 2020 Pearson Education Ltd. All Rights Reserved Perceived Quality Customers’ perceptions of overall quality or superiority of a product or service – Compared with alternative – With respect to its intended purpose Copyright © 2020 Pearson Education Ltd. All Rights Reserved Managing Customers Post- Purchase (1 of 2) Product strategies should focus on both purchase and consumption Particularly important in the context of e-commerce Processes or programs that can help with managing customers post-purchase – User manuals – Customer service programs – Loyalty programs Copyright © 2020 Pearson Education Ltd. All Rights Reserved Managing Customers Post- Purchase (2 of 2) User Manuals Customer Service Programs Loyalty Programs Copyright © 2020 Pearson Education Ltd. All Rights Reserved Pricing Strategy Price is the one revenue-generating element of the traditional marketing mix – Price premiums are among the most important benefits of building a strong brand Copyright © 2020 Pearson Education Ltd. All Rights Reserved Consumer Price Perceptions Choosing a pricing strategy to build brand equity means determining – A method for setting current prices, and – A policy for choosing the depth and duration of promotions and discounts Factor related to costs of making and selling a product and relative price of competing product are important determinant in pricing strategy – However, firms are putting greater importance on consumer perceptions and preferences Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 5-3: Price Tiers in the Ice Cream Market Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 5-4: Services Provided by Channel Members Source: Reprinted from Donald Lehmann and Russell Winer, Product Management, 2nd ed. (Burr Ridge, IL: Irwin, 1997), Figure 13-8 on p 379. © The McGraw-Hill Companies. ag e Copyright © 2020 Pearson Education Ltd. All Rights Reserved Setting Prices to Build Brand Equity (1 of 4) Value Pricing Communicating Value Price Segmentation Everyday Low Pricing Reasons for Price Stability Copyright © 2020 Pearson Education Ltd. All Rights Reserved Setting Prices to Build Brand Equity (2 of 4) Value pricing – Objective is to uncover the right blend of product quality, product costs, and product prices ▪ That fully satisfies the needs and wants of consumers ▪ As well as the profit targets of the firm Successful value-pricing strategy should strike a balance among – Product design and delivery – Product costs, and – Product prices Copyright © 2020 Pearson Education Ltd. All Rights Reserved Setting Prices to Build Brand Equity (3 of 4) Just delivering good value is not sufficient for achieving pricing success – Consumers need to understand and appreciate the value of the brand – Value is not always obvious ▪ At times, must be communicated Copyright © 2020 Pearson Education Ltd. All Rights Reserved Setting Prices to Build Brand Equity (4 of 4) Price segmentation – Sets and adjusts prices for appropriate market segments Everyday low pricing – Avoids the sawtooth pattern of alternating price increases and decreases – Avoids discounts ▪ In favor of a more consistent set of “everyday” base prices on products Reasons for price stability – Forward buying – Diverting Copyright © 2020 Pearson Education Ltd. All Rights Reserved Channel Strategy (1 of 2) Channel Design Indirect Channels Direct Channels Online Strategies Copyright © 2020 Pearson Education Ltd. All Rights Reserved Channel Strategy (2 of 2) Channel design – Direct channels ▪ Selling through personal contacts from the company to prospective customers – Mail, phone, electronic means, or in-person visits – Indirect channels ▪ Selling through third-party intermediaries – Agents, broker representatives, wholesalers or distributors, or retailers or dealers Copyright © 2020 Pearson Education Ltd. All Rights Reserved Indirect Channels Retailers tend to have the most visible and direct contact with customers – Has the greatest opportunity to affect brand equity ▪ Push and pull strategies ▪ Channel support ▪ Retail segmentation ▪ Cooperative advertising Copyright © 2020 Pearson Education Ltd. All Rights Reserved Direct Channels Manufacturers may choose to sell directly to consumers – Brand equity issues of selling through direct channels include: ▪ Company-owned stores ▪ Store-within-a-store ▪ Other means may be by phone, mail, or electronic means Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 5-5: JCPenney Customer Channel Value Analysis Source: Customer Values Analysis, Doublecheck (2004). Courtesy of Abacus Direct, LLC. Copyright © 2020 Pearson Education Ltd. All Rights Reserved