Video 4_Marketing Principle #3_Chapter 5 Brand.pdf

Marketing Strategy Chapter 5: Managing Brand-Based SCA Odile Guinot Marketing Principle #3: All Competitors React ➔ Managing Sustainable Competitive Advantage Learning Objectives ▪ Articulate what “brand” means and recognize its various elements ▪ Define Brand Equity and identify the steps to build...

Marketing Strategy Chapter 5: Managing Brand-Based SCA Odile Guinot Marketing Principle #3: All Competitors React ➔ Managing Sustainable Competitive Advantage Learning Objectives ▪ Articulate what “brand” means and recognize its various elements ▪ Define Brand Equity and identify the steps to build it ▪ Assess the strength of a brand and the advantages it offers History of Branding ▪ Earliest form: 2000BC (marking on cattle, crafts, buildings, etc.) ▪ From word “brandr” (ancient Norse, Scandinavian language)= to burn (a brand was a burning piece of wood, later described as a torch) ▪ Gutenberg Printing Press invention ▪ Industrial Revolution > more competition need to stand out / take ”ownership” 1881: Congress passed 1st Trademark Act (brand = IP) ▪ 20th Century: rise of mass media (newspaper, radio, then TV) & graphic design High demand leads to more competition leads to more need to differentiate ▪ Today: branding is everywhere (products, services, ideas, people, “personal branding”) What is a Brand? American Marketing Associate (AMA) Definition: A brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” Usually, a collection of all the brand elements, including its name (e.g., Apple), symbol (e.g., silhouette of an apple with a bite removed), package design (e.g., sleek white box), and any other features that serve to differentiate that brand’s offering from competitors’. Nike vs. Adidas Criteria for Choosing Brand Elements 1. Memorability 4. Transferability Easily recognized Within and across product categories Easily recalled Across geographic boundaries and cultures 2. Meaningfulness 5. Adaptability Descriptive Flexible Persuasive Updatable 3. Likability 6. Protectability Fun and interesting Legally Rich visual and verbal imagery Competitively Aesthetically pleasing The Brand Equity Concept Brand equity is the set of assets and liabilities linked to a brand, its name, and its symbol, which add to or subtract from the value provided by the firm’s offering and relationships ▪ Brand equity “lies in the mind of the customer,” which means that it is difficult for competitors to copy it, adding to the sustainability of brand-based barriers This also makes it hard for firms to adapt or change their brand identity Associative Network Memory Model of Brand Equity Brand Operates at Subconscious Level Colt 45 Pabst Guinness Pabst Guinness Coors Budweiser Miller Lite Miller Lite Colt 45 Coors Budweiser A. Taste perceptions of six beer brands when the drinker knows what (s)he is drinking B. Taste perceptions of six beer brands when the drinker does NOT know what (s)he is drinking Russia’s version of Starbucks reopens with a new name and logo Source: https://www.cnn.com/2022/0 8/19/business-food/starcoffee-starbucksrussia/index.html Steps to Building Brand Equity Brand Building Activities Key Objectives 1st Step Build a high level of brand awareness Provide an anchor point for linking meaning to the brand in later steps 2nd Step Link the brand name to its points of parity and difference Define the brand’s relative advantage(s) 3rd Step Build a deep emotional connection or “relationship” between brand and targeted customers Generate powerful, long-lasting barriers to competitors (i.e., SCA) Brand Awareness 1st Step ▪ Build a high level of brand awareness Provide an anchor point for linking meaning to the brand in later steps Brand awareness consists of brand recognition and brand recall performance: Brand recognition: – Consumer’s ability to confirm prior exposure to the brand when given the brand as a cue Brand recall: – Consumers’ ability to retrieve the brand from memory when given: The product category The needs fulfilled by the category, or A purchase or usage situation as a cue Which 3 car brands come to the top of your mind? Brand Image ▪ Once a sufficient level of brand awareness is created: Marketers can put more emphasis on crafting a brand image ▪ Creating a positive brand image: Takes marketing programs that link strong, favorable, and unique associations to the brand in memory ▪ Brand associations may be either brand attributes or benefits Brand Persuasion 3rd Step Build a deep emotional connection or “relationship” between brand and targeted customers Generate powerful, long-lasting barriers to competitors (i.e., SCA) ▪ Integrated marketing communications (IMC) refers to the process of designing and delivering marketing messages to customers while ensuring that they are relevant and consistent over time and channels ▪ To execute the three brand building steps and effectively implement the firm’s brand strategy, a firm typically uses multiple marketing communication formats, each of which has different strengths and weaknesses that define when each will be most effective, as well as the optimal combination of different formats The Importance of Customer-Centricity ▪ Brand equity can be vulnerable to destruction if product and service claims are not verified by actual experience: Review forums Reviews from peers Online word-of-mouth Integrated Marketing Communications (IMC) ▪ Some of the most commonly used marketing communication formats are: Advertising Sales promotion Public relations (PR) Events and experiential marketing Direct and interactive marketing Word-of-mouth (WOM) Personal selling Each have their own purpose but need to be consistent Source: https://www.smartcompany.com.au /marketing/advertising/threebrands-taking-advertising-risks/ Marketing Advantages of Strong Brands ▪ Improved perceptions of product performance ▪ Greater loyalty ▪ Less vulnerability to competitive marketing actions ▪ Less vulnerability to marketing crises ▪ Larger margins ▪ More inelastic consumer/customer response to price increases ▪ More elastic consumer/customer response to price decreases ▪ Greater trade cooperation and support ▪ Increased marketing communication effectiveness ▪ Possible licensing opportunities ▪ Additional brand extension opportunities End of Lecture Takeaways: Chapter 5 ▪ Investments in building a firm’s brand awareness and image in customers’ minds represent a strong barrier to competitive attacks and often provide the initial market-based SCA for a firm. ▪ The associative network memory model argues that the mind is a network of nodes and connecting links. The key characteristics of a brand that influence brand equity can be captured as nodes and linkages. ▪ Brands change how people think, often below a conscious level. Perceptions of brands even can change customers’ actual experiences (e.g., making beer taste better). ▪ Benefits from strong brand equity include sales, profit enhancement, and loyalty effects. ▪ Key branding elements include the brand objective, brand awareness, brand relative advantage, brand sustainability, brand image, and brand identity. Takeaways ▪ Brand architecture defines the rationale and structure that link the firm, its products, and its product and/or brand extensions. It defines how the brand is used at different levels across the organization. Noting the range of brand architecture structures available, firms must make strategic decisions, based on their branding strategy. ▪ Brand extensions can leverage existing brands as line or category extensions. ▪ The three steps to building brand equity are: building a high level of brand awareness, linking the brand name to the brand’s points of parity and difference, and building a deep emotional connection or “relationship” between the brand and targeted customers. ▪ Integrated marketing communication (IMC) is a process for sharing relevant, consistent marketing messages with consumers, across a variety of formats, including advertising, sales promotion, public relations, events and experiential marketing, direct and interactive marketing, word of mouth, and personal selling. ▪ To understand and measure brand equity, firms use qualitative and quantitative assessments of their brand’s health, which helps them identify areas for improvement.