PRODUCT CONCEPTS

THE PRODUCT

• Products are almost always combinations of the tangible and intangible. The entire package is sometimes referred to as the augmented product.

• The mix of tangibles and intangibles in the augmented product varies from one product or service to another.

Product?• Anything that can be offered to a market to

satisfy a want or need. It is usually judged on-

(1) product features

(2) services mix & quality and

(3) price appropriateness

PRODUCT MIX• A product mix (also called product assortment) is

the set of all products and items that a particular seller offers for sale.

• A total group of products that an organization markets.

• A company’s product mix has a certain width, length, depth and consistency.

DIMENSIONS OF PRODUCT MIX

• The width of company’s (say HLL’s) product

mix refers to how many different product

lines the company carries, such as bathing

soap, detergents, shampoos, toothpaste,

food products.

DIMENSIONS OF PRODUCT MIX

• The length of a company’s product mix refers to the total number of items in its product mix. Thus in each of the product line HLL has a number of product items. Eg., in the product line of bathing soaps, HLL has several product items like Lux, Liril, Lifebuoy, Pears.

DIMENSIONS OF PRODUCT MIX

• The depth of a company’s product mix refers to how many variants are offered of each product in the line. Thus if close up toothpaste comes in three formulations and in three sizes, Close up has a depth of nine (3x3). The average depth of HLL product mix can be calculated by averaging the number of variants within the brand groups.

DIMENSIONS OF PRODUCT MIX

• The Consistency of the product mix refers to how closely related the various product lines are in end-use, production requirements, distribution channels, or some other way. HLL’s product lines are consistent insofar as they are consumer goods that go through the same distribution channels.

DIMENSIONS OF PRODUCT MIX• These four dimensions of the product mix provide the

handles for defining the company’s product strategy. The company can expand its business in four ways.

• The Co. can add new product lines, thus widening its product mix.

• The Co. can lengthen each product line.• The Co. can add more product variants to each

product and deepen its product mix.• The Co. can pursue more product-line consistency or

less, depending upon whether it wants to acquire a strong reputation in a single field or participate in several fields.

PRODUCT CLASSIFICATION

ON THE BASIS OF PRODUCT CHARACTERISTICS :

DURABILITY, TANGIBILITY AND USE (consumer or industrial )

(1) NON-DURABLE (2) DURABLE (3) SERVICES

(1) NON-DURABLES

• These are tangible goods normally consumed in one or few uses. Because these goods are consumed quickly and purchased frequently, the appropriate strategy is to make them available at many locations, charge only a small mark up and advertise heavily to induce trial and build preference.

(2) DURABLES

• These are tangible goods that normally survive many uses. Normally require more personal selling and service, command a higher margin, and require more seller guarantees.

(3) SERVICES

These are intangible, inseperable, variable and perishable products.

Normally require more quality control, superior credibility, and adaptability.

PRODUCT CLASSIFICATION

ON THE BASIS OF CUSTOMER SHOPPING HABITS :

(1) CONVENIENCE GOODS(2) SHOPPING GOODS(3) SPECIALITY GOODS(4) UNSOUGHT GOODS

(1) CONVENIENCE GOODS

• are goods that the customer usually purchases frequently, immediately, and with a minimum of efforts.

• (A) Staples: Consumers purchase on a regular basis.

• (B) Impulse Goods: are purchased without any planning or search efforts.

• (C) Emergency Goods: are purchased when a need is urgent.

(2) SHOPPING GOODS

• are goods that the customer , in the process of selection and purchase, characteristically compares on such basis as suitability, quality, price and style.

• (A) Homogeneous Shopping Goods: are similar in quality but different enough in price to justify shopping comparisons.

• (B) Heterogeneous Shopping Goods: differ in product features and services that may be more important than price.

(3) SPECIALITY GOODS

• are goods with unique characteristics or

brand identification for which buyer is willing

to make a special purchasing effort.

(4) UNSOUGHT GOODS

• are goods the consumer does not know

about or does not normally think of buying.

These goods require advertising and personal

selling support.

What is the Product Life Cycle (PLC)?

• A concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death).

• It is based on the product category.

Introduction Stage

• High failure rates• Little competition• Frequent product modification• Limited distribution• High marketing and production costs• Promotion focuses on awareness and

information• Intensive personal selling to channels

Growth Stage

• Increasing rate of sales• Entrance of competitors• Initial healthy profits• Promotion emphasizes brand ads• Goal is wider distribution• Prices normally fall• Development costs are recovered

Maturity Stage

• Declining sales growth• Saturated markets• Extending product line• Stylistic product changes• Heavy promotions to dealers and consumers• Marginal competitors drop out • Prices and profits fall• Niche marketers emerge

Decline Stage

• Long-run drop in sales• Large inventories of unsold items• Elimination of all nonessential marketing

expenses• Options for Deleting Products:

• Maintaining• Deletion• Harvesting• Contracting

MARKETING STRATEGIES IN THE INTRODUCTION STAGE

Promotion

Price

High Low

High

Low

Rapid SkimmingStrategy

SlowSkimmingStrategy

Rapid PenetrationStrategy

Slow

PenetrationStrategy

(a) The rapid-skimming strategy

It requires that a product to be sold at higher prices. Expenditure on advertising is high if the following conditions exist;

• The market is unaware of the product or service.

• The market is able to pay the price.• The establishment of brand preference is

desirable

(b) The slow skimming strategy

It is implemented when a product is sold at higher prices, but expenditure on advertising is lower. The following conditions usually exist;

• The market is of a limited size.• The market is aware of the product.• The market is able to pay the price.• There is no likely competition.

( c ) The rapid penetration strategy

It is accompanied by low selling prices and high expenditure on promoting the product. The following conditions will prevail if such a strategy is followed;

• The market is not aware of the product's existence.

• The market is price sensitive.• A large market is anticipated.• Strong competition is likely.

(d) The slow penetration strategy

It is identified by lower prices and low expenditure on promoting the product or service. The rationale behind this strategy is that the market will purchase a product in large volumes. Conditions conducive to such a strategic approach are:

• There is a threat of competition.• The market favors lower prices.• Customers are aware of the product.• The market is large.

1. MARKETING STRATEGIES IN THE GROWTH STAGE

• It improves product quality and adds new product features and improved styling.

• It adds new models and flanker products (i.e., products of different sizes, flavors, and so forth that protect the main product ).

• It enters new market segments.• It increases its distribution coverage and enters

new distribution channels.• It lowers prices to attract the next layer of price-

sensitive buyers.• It shifts from product-awareness advertising to

product-preference advertising.

2. MARKETING STRATEGIES IN THE MATURITY STAGE

• Market Modification

• Product Modification

• Marketing Mix Modification

MARKETING STRATEGIES IN THE MATURITY STAGE

Market Modification• Expand number of users : - Convert non-users - Enter new market segments - Win competitors’ customers• Increase annual usage : - More frequent use - More usage per occasion - New and more varied uses

MARKETING STRATEGIES IN THE MATURITY STAGE

Product Modification

• A strategy of quality improvement aims at increasing the product’s functional performance - its durability, reliability, speed, taste.

• A strategy of feature improvement aims at adding new features ( for example - size, weight, materials, additives, accessories ) that expand the product’s versatility, safety, or convenience.

MARKETING STRATEGIES IN THE MATURITY STAGE

• A strategy of style improvement aims at increasing the product’s aesthetic appeal. The periodic introduction of new car models amounts to style competition rather than quality or feature competition.

MARKETING STRATEGIES IN THE MATURITY STAGE

Marketing Mix Modification• Prices• Distribution• Advertising• Sales Promotion• Personal Selling• Services

3. MARKETING STRATEGIES IN THE DECLINE STAGE

• Identifying the Weak Products To do this, many companies appoint a

product-review committee with representatives from marketing, R&D, manufacturing and finance. The product review committee makes a recommendation for each dubious product--leave it alone, modify its marketing strategy, or drop it.

MARKETING STRATEGIES IN THE DECLINE STAGE

• Determining Marketing Strategies : Continuation Strategy :-Increasing the firm’s investment ( to

dominate the market or strengthen the competitive position )

- Maintaining the firm’s investment level until the uncertainties about the industry are resolved. (Contd.)

MARKETING STRATEGIES IN THE DECLINE STAGE

Concentration Strategy :- Decreasing the firm’s investment level selectively,

by dropping unprofitable customer groups, while simultaneously strengthening the firm’s investment in lucrative niches.

Harvesting Strategy :- Divesting the business quickly by disposing of its

assets as advantageously as possible.

MARKETING STRATEGIES IN THE DECLINE STAGE

The Drop Strategy- When a company decides to drop a product, it

faces further decisions. If the product has strong distribution and residual goodwill, the company can probably sell it to another firm.

- If the company can’t find any buyers, it must decide whether to liquidate the brand quickly or slowly. It must also decide on how much parts inventory and service to maintain for past customers.

PRODUCT

PLANNING

Product planning is a process used to identify and develop new products.

The purpose of planning is to make choices about which product ideas a company should invest in.

9 - 49

Identifythe strategicrole of newproducts,

then...

Identifythe strategicrole of newproducts,

then...

1.Idea

generation

1.Idea

generation

2.Screeningof ideas

2.Screeningof ideas

3.Businessanalysis

3.Businessanalysis

4. Prototype

development

4. Prototype

development

5.MarketTests

5.MarketTests

6.Commer-cialization

6.Commer-cialization

The New Product Development Process

Marketing Planning

• An outline of a design to accomplish a specific objective: – To create value for customers.– To create a mutually

beneficial relationship

Marketing Planning

Market Needs

Wants

Strengths of organization

Weakness of organization

Existing competitors

Expected competitorsDesign for

creating value

Levels of a Marketing Plan

• Strategic– Target marketing

decisions– Value proposition– Analysis of

marketing opportunities

• Tactical– Product features– Promotion– Merchandising– Pricing– Sales channels– Service

Marketing Planning Process

Definition:• The application of marketing resources to

achieve marketing objectives.

Marketing Planning Process

1. Performing a situation analysis2. Formulating basic assumptions3. Setting objectives for what is being sold and

to whom4. Deciding how the objectives are to be

achieved5. Scheduling and costing out the actions

necessary for implementation

Developa Market Plan

• Management provides little guidance as to how the process should be managed.– To Compromise between what is desirable and what is

practicable

• Management must be customized to their particular organization– Size– Complexity– Character and diversity of company operations

Challenge

What should be managed:

Revenue ProfitReturn on investment

Cost

Optimization

Application of Marketing Plan

1. To help identify sources of competitive advantage2. To force an organized approach3. To ensure consistent relationships4. To inform everyone in the organization about priorities5. To obtain resources needed to implement plans6. To engage organizational support at all levels, from the

bottom to the top of the organization7. To set objectives and strategies8. To gain commitment towards goals

Marketing Planning ProcessA strategic marketing plan should contain the following:1. Executive summary2. Mission Statement3. Financial Summary of revenue, expenses and earnings4. Marketing audit5. SWOT analysis6. Assumption of key determinants7. Overall marketing objectives and strategies8. Expected results9. Alternatives (contingency plan)10. Budget

Stages of Marketing Plan1. Mission

2. Corporate objectives

3. Marketing audit

4.SWOT analysis

5. Assumptions

6. Marketing objective and strategies

7. Estimate expected result

8. Identity alternative plans and mixes

9. Budget

10. First year detailed implementation program

Phase one -Goal Setting

Phase Two –Situation Review

Phase Three-Strategy Formulation

Phase Four-Resources allocation and monitoring

Measurement and review

Portfolio Analysis

• A product portfolio or product mix is the range of products a firm produces. A single product firm is vulnerable(dangerous or open) to external forces and needs a range of products to spread risk. Products need to be developed and firms need to have a sensible portfolio of products, which are at varying stages of the product life cycle.

• The Boston Matrix helps firms assess if they have a balanced product mix. E.g.: today’s cash cows are tomorrow’s dogs. Dogs need to be replaced with new products to widen the product mix.

Problem Children

Low Rate of growth for the whole market High

High

Market share

low

Problem Child has a low share of a market with high potential for growth and requires large injections of finance needed. They could become a star or a dog. Firms need to decide on whether or not to halt production, or sell the brand.

These are the opportunities no one knows what to do with. They aren't generating much revenue right now because you don't have a large market share. But, they are in high growth markets so the potential to make money is there.

Stars

Low Rate of growth for the whole market High

High

Market share

low

Star products have a high share of a market in the growth stage of the product life cycle. Here you're well-established, and growth is exciting! There should be some strong opportunities here, and you should work hard to realize them.

Cash Cows

Low Rate of growth for the whole market High

High

Market share

low

Cash cows have a high market share and generally high sales revenue, cash flow and profit. However, no market growth likely.

Here, you're well-established, so it's easier to get attention and exploit new opportunities. However it's only worth expending a certain amount of effort, because the market isn't growing, and your opportunities are limited.

Dogs

Low Rate of growth for the whole market High

High

Market share

low

Dogs have low share of a market in a low growth market. These products have no growth potential and any profit has to be reinvested just to maintain market share.

In these areas, your market presence is weak, so it's going to take a lot of hard work to get noticed. And because market growth is low, it's going to take a lot of hard work to improve the situation.

Low Rate of growth for the whole market High

High

Market share

low

Boston Matrix or BCG matrix(Boston Consulting Group)

Ansoffs Matrix

Ansoff Matrix(1) Market penetration- involves increasing sales to present

target customers. The product remains unchanged although there may be a substantial change in how the product is promoted;

(2) Market development - involves identifying new segments for the current products offered by the company;

(3) Product development - seeks growth by modifying existing products or introducing new products to serve existing markets;

(4) Diversification - involves taking profits from existing products or businesses to acquire or enter new markets, usually in different industries from previous company efforts.

Internal

External

Market Potential & Forecasting

1-78

DiversificationDiversificationMarketDevelopment

MarketDevelopment

MarketPenetration

MarketPenetration

ProductDevelopment

ProductDevelopment

Existingproducts

Newproducts

Existingmarkets

Newmarkets

Product-Market Strategies

Product Evaluation

A product is a term for any item that has been manufactured and is useful to you. You are a consumer when you buy it and use it. Evaluation of the product means that its suitability and safety for use by consumers are checked out. All products made are required by law to be safe to use. This is not a requirement that they are absolutely safe - that is not possible. Nor must they be safe at unbearable costs to industry - that would put innovation at risk. But they are required to be as safe as it is reasonable to expect.

The process of assessing a program after development for the purpose of determining its merit and effectiveness.Product evaluation refers to measuring achieved results, as opposed to desired results.

1. DOES IT MEET THE SPECIFICATION?

The specification covers:• What the product must do.• Who it is made for.• Under what conditions it should operate.

HOW TO EVALUATE A PRODUCT ?

The product has to:

• Meet the needs of the user.• Fit the environment and conditions where it will be used.

This includes safety, ease of use (ergonomics), what it looks like (aesthetics), reliability, maintenance, the right price and quality.

2. COSTS

Production costs - Are they within target?Selling price - Is it acceptable?-Did it meet the target price?

3. CHECKING AGAINST THE COMPETITION

Compare:• Quality.• Unique features.• Selling price

Why to evaluate ?

•To prove that the product complies with relevant standards

•To investigate accidents to discover whether a product design fault caused the accident.

•To compare a product with others of a similar design.

Developing schematic representations that reflect how products or services compare to competitors’ on dimensions are most important to success in the industry.

Product Positioning

Product Positioning based on:

– Customers wants– Customers needs

Product Positioning

Product Positioning Steps

ProductPositioning

Steps

2. Diagram Map

1. Select Key Criteria

3. Plot competitors’products

4. Look for niches

5. Develop Marketing Plan

Product Positioning Map

LowConvenience

HighCustomerLoyalty

LowCustomerLoyalty

HighConvenience

Firm 1•

•Firm 2

• Firm 3

Major rules in product positioning

a. Establish a definition of positioning,b. Keep it simple,c. Make it unique,d. Excavate(bring out) product benefits and market needs,e. Construct a credible position,f. Ensure strong support by starting early,g. Follow the market dynamics,h. Make positioning visible in all communications,i. Test alternative positioning options,

PRODUCT DIFFERENTIATION

The challenge before the product marketers is to create relevant and distinctive product differentiation. The product differentiation may be based on :

• Physical Differences ( eg., features, performance, durability, reliability, design, style, packaging )

• Availability Differences ( eg., available from stores or orderable by phone, mail, fax, internet )

• Service Differences ( eg., delivery, installation, training, consulting, maintenance, repair )

• Price Differences ( eg., very high price, medium price, low price, very low price )

• Image Differences ( eg., symbols, atmosphere, events, media )

Positioning Strategies

1. By attribute or benefit- This is the most frequently used positioning

strategy. For a light beer, it might be that it tastes great. For toothpaste, it might be the mint taste .

2. By use or application- The users of Apple computers can design and

use graphics more easily than with Windows or UNIX. Apple positions its computers based on how the computer will be used.

3. By user- Facebook is a social networking site used

exclusively by college students. One can only log in with their e-mail IDs.

4. By product or service class- Margarine competes as an alternative to butter.

Margarine is positioned as a lower cost and healthier alternative to butter, while butter provides better taste and wholesome ingredients.

5. By competitor- BMW (Bayerische Motoren Werke) and Mercedes

often compare themselves to each other.

6. By price or quality- Tiffany and Costco both sell diamonds. Tiffany

wants us to believe that their diamonds are of the highest quality, while Costco tells us that diamonds are diamonds and that only a chump(fool) will pay Tiffany prices.

7. Positioning strategy based on Product Process – Another positioning approach is to associate the product with its users or a class of users. Makes of casual clothing like jeans have introduced ‘designer labels’ to develop a fashion image. In this case the expectation is that the model or personality will influence the product’s image by reflecting the characteristics and image of the model or personality communicated as a product user. Lets not forget that Johnson and Johnson repositioned its shampoo from one used for babies to one used by people who wash their hair frequently and therefore need a mild people who wash their hair frequently and therefore need a mild shampoo. This repositioning resulted in a market share.

8. Positioning strategy based on Cultural Symbols –

In today’s world many advertisers are using deeply entrenched cultural symbols to differentiate their brands from that of competitors. The essential task is to identify something that is very meaningful to people that other competitors are not using and associate this brand with that symbol. Air India uses Maharaja as its logo, by this they are trying to show that we welcome guest and give them royal treatment with lot of respect and it also highlights Indian tradition. Using and popularizing trademarks generally follow this type of positioning.

Benefit Segmentation• Marketers constantly attempt to identify the

single most important benefit of their product that will be the most meaningful to consumers

• Changing lifestyles play a major role in determining the product benefits that are important to consumers and also provide marketers with opportunities for new products and services.

• Experience with this approach has shown that benefits sought by consumers determine their behavior much more accurately than do demographic characteristics or volume of consumption.

This approach is based on being able to measure consumer value systems in detail, together with what the consumer thinks about various brands in the product category of interest. While this concept seems simple enough, operationally, it is very complex.

Types of Segments• The Status Seeker is a consumer who is very concerned with

the prestige of the brands purchased,

• The Swinger tries to be modern and up to date in all activities, including brand selection,

• The Conservative prefers to stick to large, successful companies and popular brands.

• The Rational Man looks for benefits such as economy, value, durability, and so forth.

• The Inner-Directed Man is especially concerned with self-concept. Members of this group consider themselves to be independent and honest and to have a sense of Humor.

UNIT - 2

BRAND

The word has been derived from the word “brandr”, which means “ to burn”.

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 the competitors .

A name becomes a brand when consumers associate it with a set of tangible and intangible benefits that they obtain from the product or service

BRAND ELEMENTS The different components of a brand that identify and

differentiate it are known as brand elements.

( eg: name, logo , symbol , colour ,packaging ,slogan etc.)

BRANDING

“Branding is the process by which companies distinguish their product offerings from the competition. Brands are created by creating a distinctive name, packaging and design.”

Certain factors should be considered before selecting abrand name. They are as follows:

• Distinguish the product from competitive brands• Memorable and easy to pronounce• Negative or offensive references should be avoided.• Evoke positive mental image• Evoke positive emotional reaction• Suggest product function or benefits• Simple• Sound appropriate• Be unique Possibly, translate well in other languages too.

BRAND Vs PRODUCT

A product is anything we can offer to a market for attention , acquisition , use , consumption that might satisfy a need or want.

A product is a physical good like tennis racquet, car, computer ,etc .

A brand is therefore more than a product , because it can have dimensions that differentiate it in some way from other product designed to satisfy the same need.

Five levels of meaning for a product :

• Core benefit level (fundamental need should be satisfied)

• Generic product level (attributes necessary for its functioning).

• Expected product level• Augmented product level (additional benefits)• Potential product (changes that the product can

undergo in future).

Eg: Level AC

Core benefit cooling n comfort.

Generic product sufficient cooling capacity and adequate air intakes and exhausts.

Expected product warranty of 1-2 yrs ,at least 2 cooling speeds, removable air filter.

Augmented product a display to show indoor and outdoor temp. , toll free no for customer service, automatic temp. setting.

Potential product silently running , balanced throughout the room etc.

Challenges • Savvy customers• Brand proliferation (eg : Coke ,Dove , Nivea)• Media fragmentation (clutter, technology)• Increased competition (globalization , low

priced competitors , brand extension)• Increased cost-

Increasing promotional expenditures • Maturing markets• Difficulty in differentiating

BRAND MANAGEMENT

• Brand management is the application of marketing techniques to a specific product, product line, or brand.

• Brand management includes managing the tangible and intangible characteristics of brand.

• In case of product brands, the tangibles include the product itself, price, packaging, etc. While in case of service brands, the tangibles include the customers’ experience. The intangibles include emotional connections with the product / service.

The important concepts of brand management:

• Definition of Brand• Brand Name• Brand Attributes• Brand Positioning• Brand Identity• Sources of Brand Identity• Brand Image• Brand Identity vs Brand Image• Brand Personality• Brand Awarenes• sBrand Loyalty• Brand Association• Building a Brand• Brand Equity• Brand Equity & Customer Equity• Brand Extension• Co-branding

BRAND EQUITY CONCEPT

“Brand equity refers to the value of a brand.”

Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations.

Brand equity also includes other intangible assets such as patents ,trademarks and channel relationships.

Brand equity can be viewed from 3 perspectives :

• Financial ( if customer is ready to pay Rs.1000 extra for a branded tv. )

• Brand extension (a successful brand can be used to as a platform to launch related products).

• Consumer based (strengthening customer attitude , which comes from experience with a product , thus trail samples are more effective than advertising in the early stages of building a strong brand ).

STRATEGIC BRAND MANAGEMENT PROCESS

Strategic brand management involves the design and

implementation of marketing programs and activities to build, measure, and manage brand equity.

Process : • Identifying and establishing Brand positioning and values

• Planning and implementing Brand marketing programs

• Measuring and interpreting Brand performance

• Growing and sustaining Brand equity

Eg of Brand Mantra- Disney – “fun family entertainment”.

• Brand audit- examination of brand to assess its health.

• Brand value chain – trace the value creation process for brands.

• Brand tracking –to collect information from consumers on routine basis about the brand.

• Brand equity measurement system- set of research procedures designed to provide timely, accurate and actionable information for marketers so that they can make best possible decisions.

Customer based Brand Equity• What makes a brand strong?• How do you build a strong brand?

CBBE approaches brand equity from the customer perspective.

The power of a brand lies in what customers have learned , felt , seen and heard about the brand as a result of their experience over time.

The power of brand lies in what resides in the mind of the customer.

Challenge for marketers in building a strongbrand is ensuring that customers have righttype of experience with the product/servicesand their marketing programs so that desiredfeelings , thoughts, images , beliefs , perceptionbecome linked to the brand.

CBBE is the differential effect that brand knowledge has on consumer response to the marketing of that brand ( +ve or –ve).

Brand equity as a bridge.Brand as a reflection of the past.Brand as direction for the future.

Brand knowledge – brand awareness ( brand recognition and brand recall performance). brand image (consumer perception about the brand).

Building a Strong BrandSteps:• Who r u? (brand identity)• What r u? (brand meaning)• What about u ? What do I think or feel about

u ? (brand response)• what about you and me ? What kind of

association and how much of connection would I like to have with u?

(brand relationship)

BRAND BUILDING BLOCKS

• 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?

Salience Dimensions• Depth of brand awareness

– Ease of recognition & recall– How likely the brand elements come to

mind

• Breadth of brand awareness– Purchase consideration– Consumption consideration

Performance Dimensions

Primary characteristics & supplementary features.

Product reliability (consistency in perf),

durability (life of product),

serviceability (ease of repairing the product).

Service effectiveness (how well the brand satisfies the customer req.),

efficiency (speed n responsiveness of service),

empathy (having customer’s interest in mind).

Style and design.

Price.

Imagery Dimensions• User profiles

– Demographic ( gender, age, income) & psychographic characteristics ( attitude towards life, career)

– Group perceptions -- popularity

• Purchase & usage situations– Type of channel, specific stores, ease of purchase– Time (day, week, month, year, etc.), location.

• Personality & values– Sincerity, excitement, competence, sophistication.

• History, heritage, & experiences

Judgment Dimensions• Brand quality

– Value– Satisfaction

• Brand credibility– Expertise ( innovative , competent , market leader).– Trustworthiness ( keeping customers interest in mind)– Likability ( worth spending time with)

• Brand consideration– Relevance

• Brand superiority– Differentiation

Feelings Dimensions It’s the customers emotional response and

reaction to the brand

• Warmth• Fun• Excitement• Security• Social approval• Self-respect

Resonance Dimensions • Behavioral loyalty

– Frequency and amount of repeat purchases

• Attitudinal attachment– Love brand (favorite possessions)– Proud of brand

• Sense of community– Kinship– Affiliation

• Active engagement– Seek information– Join club– Visit web site, chat rooms

BRAND IMPLICATIONS (significance)• Customers own the brand.• Don’t take short cuts with the brands.• Brand should have a duality.• Brand should have richness (strong , unique ,

distinctiveness).

Importance of Brand – for consumer

“The most powerful brands don't come from "marketing," but from great customer experiences”

Product quality, consistency, creativity, performance, value, features, design, and style are the main drivers of today’s conspicuous consumer.

Consumers require branding as it helps them differentiate a product from the thousands available in the market. The consumers are so overwhelmed by the variety of products available to them that making the right choice on the basis of quality, price, stylishness, etc. becomes difficult.

• This is where branding comes into play and solves the problem of the consumer by differentiation.

• “Google has perfectly executed a branding strategy which has proven to be one of the most brilliantly effective branding strategies witnessed by man”

• The strategy that Google has been seen to use is the “I’m your friend” strategy. Where this is seen to be the most doubted approach to branding, it has worked for Google.

• The consumers of Google, or in simple terms, its visitors, have been provided with a pool of information and a gateway to instant knowledge at the click of a button. It has a distinct logo, a popular name and has worked its way up to being the most differentiated as well as the most preferred search engine in the world. The fact that its convenience is incomparable makes it a strong, successful and an ethical brand. It has become a household name.

• McDonalds “is made for you”; this branding platform has catapulted the company to new heights. However, with “I’m loving it” being its showcase slogan, McDonalds has used both these slogans to position itself in such a way that it displays a sense of responsibility to the consumer and the link between ‘I’m loving it because it is made for me’.

• Since consumers want to feel special and derive emotional value from everything they spend on. Branding is one of the main platforms where this is made possible and no matter in what way companies do it, it is never too good for the consumers and this makes it the driving force of corporate branding in the race for excellence where brand value can change overnight if the consumer backlashes.

Importance of Brand – for Company

• “A company's brand is its definition in the world, the name that identifies it to itself and the marketplace”.

• "Strong company reputations can contribute to the product being a safe choice"

Toyota might not use extraordinary approaches to branding itself. But, its investment in the most ethical practices and culture reflects in the quality of the products and services. Academy on management and culture praises the Toyota Production system (TPS) and regards it as one of the best management practices in current times. Toyota, with a record earning of $120.9Bn has proved to be a self branded organization in its own respects.

Fashion retailer Zara’s branding strategy is very interesting as they do not give an option to their customers to shop online even though they have a website with one of the best aesthetics available to a fashion consumer. Encouraging customers to visit their stores is a very strategic move as expenses on website development are cut down and in-store sales are increased which is a popular mantra for today’s competitive organizations.

• Both the organizations are examples of sustainable and highly competitive, yet strategically differentiated giants in their respective fields.

• Where the value of a brand can easily exceed an organization’s assets, more and more companies are investing in branding activities than ever before. Projection of the right image can get the company to higher levels than any other strategy.

“Building brands rarely happens quickly. It

requires a lot of planning and patience. But your future profits and market share are likely to be far greater by putting the effort into branding from the start”

Role of Branding in -

• Physical goods - business to business products (corporate brands) eg: Eaton - high tech products – CEOs of technology companies can become a dominant component of their brand eg: Apple’s Steve Jobs, Microsoft’s Bill Gates

• Services eg: British Airways branded its premium class

service as “Club Class” and its regular coach class as “ world traveller”.

• Retailers & distributors• Online (eg: google)• Entertainment• Location• Ideas (eg: being human)

Creating customer value

• CRM (uses company’s data systems & applications to track consumer activity and manage customer interaction with the company.

• Customer equity - the sum of lifetime values of all the customers . - invest in highest value customer first

- Customer mgmt- Relate branding to customer equity

• Relationship of Customer equity to brand equity .

UNIT-3

BRAND POSITIONING Its the act of designing the company’s offer and

image so that it occupies a distinct and valued place in target customers mind.

TARGET MARKET :

Market is a set of potential and actual buyers who have sufficient interest in a product.

Market segmentation – dividing the market into homogeneous groups.

Segmentation basis –

Geographic (national /international)Psychographic (values, attitude, lifestyle)Demographic (income, age, gender)Behavioural (user status , brand loyalty)

Classification of users

• Convertible (likely to switch brand)• Shallow (not ready to switch but may consider alternatives)• Average (comfortable with the choice n unlikely to switch in future)• Entrenched (very loyal ,firmly fix)

Classification of non users

• Strongly unavailable (strongly prefer their current brand)• Weakly unavailable (not so strong)• Ambivalent (uncertain) (attracted to other brands like their current brand)• Available (prefer other brand but not yet switched)

Criteria for segmentation –IdentifiableSizeAccessibilityResponsiveness

Nature of competition• The other firms must have also tried to target

that segment in the past or plan to do so in the future.

POINTS OF PARITY AND POINT OF DIFFERENCE Points of difference associations – attributes /

benefits that consumers strongly associate with a brand

Points of parity associations –Category point of parity – it represents the not sufficient conditions to

select a brand.Competitive point of parity-Negate competitors point of difference

BRAND MANTRASIt helps a brand present a consistent image.

Designing a brand mantra – It must communicate what the brand is and

what it is not.

Eg : Nike - “authentic athletic performance” .Disney – “fun family entertainment”.

Parts of Brand Mantra• Brand function : Describes the nature of product / service or benefit

provided by the brand.

• Descriptive modifier: Clarifies it nature ( Nike performance is not just any kind but

athletic & Disney entertainment is not of any kind but family

entertainment).

• Emotional modifier : how exactly the brand provide benefits and in what ways.

Implementing a Brand Mantra They should be developed at the time of brand

positioning.• Communicate • Simplify (memorable)• Inspire

Internal Branding

Making sure that employees of the org are properly aligned with the brand and what it represents.

Internal branding motivates employees and attract external customers.

CHOOSING BRAND ELEMENTS TO

BUILD BRAND EQUITY

Criteria for choosing brand elements• Memorable – easily recognized, easily recalled.• Meaningful - descriptive (abt product category), persuasive ( abt particular benefit).• Likable - fun & interesting rich in visuals pleasing

• Transferable – within and across product category , across geographic boundaries & cultures.• Adaptable - flexible • Protectable - legally & competitively.

Options & tactics for brand elements

• Brand names- - brand awareness (easy to pronounce, differentiated ,distinctive, unique). - brand associations• URL • Logos & symbols• Characters• Slogans (short phrases communicating descriptive n

persuasive info about the brand)• Packaging.• Jingles.

Leveraging secondary brand associations

to build brand equity

1. Conceptualizing the leveraging process-

• creation of new brand associations (when consumers either don’t care much

about or don’t feel that they posses the knowledge to choose the proper brand ,they may be more likely to make decisions on the basis of secondary considerations such as what they think ,feel or know about the country from which the product came ,to store in which it is sold etc.)

• Effects on existing brand knowledge- “What is true for the entity ,must be true for

the brand”.

Important factors :1. Awareness and knowledge of the entity2. Meaningfulness of the knowledge of the

entity3. Transferability of knowledge of the entity

2. Country of origin & other geographic areas- Besides the company that makes the product

,the country or location from which it originates may also become linked to the brand and generate secondary associations.

The world is becoming “cultural bazaar”.

Linkage of brands & company –BMW - GermanyGUCCI shoes & purses - Italy

3. Co- Branding When 2 or more existing brands are combined

into a joint product or are marketed together in same fashion.

Eg: Dell Computers with Intel Processors.

Advantages :1. Borrow needed expertise.2. Expand brand meaning.3. Source of additional revenue.

Disadvantages :4. Loss of control.5. Risk of brand equity dilution.6. Negative feedback effects.

Guidelines :Ask these questions:1. What capabilities do we not have?2. What resource constraint do we face?3. What revenue needs do we have?4. Is it a profitable business venture?5. How does it help to enhance brand equity?

• Ingredient branding : Which creates brand equity for

materials ,components or parts that are contained within the other branded products.

Eg:PC with Intel Inside.

4. Licensing:

Contractual arrangements whereby firms can use the names, logos , etc of other brand to market their own brand for some fixed fee.

Eg: Entertainment licensing - movie title and logo

like harry potter , start wars , spider man.

5. Celebrity endorsement :Using well known people to promote products.Problems :6. Celebrities endorse so many products that

they lack any specific product meaning.7. There must be a reasonable match between

the celebrity and the product.8. Celebrities can lose their popularity and

hence diminish the value of the brand.

4. Many consumers feel that celebrities are doing endorsement just for money and do not believe or use the brand.

5. Celebrities may distract attention from the brand in the ad so that the customer notice the star but have trouble remembering the advertised brand.

Sporting , cultural & other events• Sponsored events can contribute to brand

equity by becoming associated to the brand.• A brand becomes more trustworthy by linking

to an event.

Integrating marketing communication to build brand equity

Marketing communications are the means by which firm attempts to inform ,remind consumers directly or indirectly about the brand they sell.

Marketing communication options:

• Advertisement – any paid form of non personal presentation and promotion of ideas ,goods ,services by an identifies sponsor.

Eg : 1. Television - Guidelines : Distinguish b/w message strategy and creative

strategy.

Message strategy : What an ad attempts to convey about the

brand.Creative strategy : The way the ad expresses the brand claims.

Copy testing – to evaluate the effectiveness of message & creative strategy copy testing is conducted. In this a sample of consumers is exposed to candidate ads and their reaction is observed.

• Radio – It is more effective in morningDisadvantages – lack of visuals.

Eg : AT & T uses radio to target African American

consumers

• Print –Magazine & Newspapers• Direct responses – Mail, telephone , internet • Interactive – Web sites ( P&G pampers.com) Advantage – low cost Web pages should be eye catching ,use latest

technology & effectively communicate the corporate message.

Online ads (banner ads or search advertising)

• Place – Out of home advertising (work place , shop ,

point of purchase , movies ).

2. Promotion – sales promotion are short term incentives to encourage usage of the product / service.

Advantage :• Price discrimination is possibleDisadvantages :• Low brand loyalty• Increased price sensitivity

Consumer promotion – change the choice , quantity of consumers product purchases.

Customer franchise building promotion (samples , demos) It enhances the attitude & loyalty of

consumers towards a brand.Non customer franchise building promotion(premiums , refund offers)

Trade promotion – financial incentives given to retailers , distributors .

3. Event marketing & sponsorship – It’s the sponsorship of events related to

sports, art , entertainment , social cause.Rationale :• To identify with particular target market • To increase awareness of the company /

product name• To evoke feelings (eg: American Express

launched its blue card through an outdoor concert in New York's central park)

• To express commitment to the community

4. Public relations & publicity –Publicity is non personal communication like press

releases , media interviews ,films , photographs .Public relations include annual reports , fund raising &

membership drives ,special event management.

BUZZ Marketing : Something about the product attracts a core group

of consumers who are eager to spread word of the product among their peers. This create a buzz about the brand.

Companies are attempting to create word of mouth through various techniques often called buzz marketing.

The bad news is that it only works in high interest product categories.

How to make buzz marketing successful :1. Keep it simple2. Tell us what’s new3. Don’t make claims you cant support4. Start measuring buzz5. Listen to the buzz

5. Personal selling – Face to face interaction with one or more

purchasers for the purpose of making sales.Advantage :• Can send detailed message to the customer &

get the feedback .Disadvantage :• High cost

Simple test for marketing communication effectiveness

Information processing model of communication –

• Exposure (a person must see or hear the comm.)• Attention (a person must notice the comm.)• Comprehension (a person must understand the intended message of the comm.)• Yielding (a person must respond favorably)• Intentions (a person must plan to act in the desired manner of the comm.) • Behavior (a person must actually act in the desired manner of the comm.)

Positioning Guidelines• Designing and communicating the

competitive frame of reference– To determine category membership– Which products does the brand complete?– Different categories will lead to different points of

parity and points of difference– Ex: Coca cola – it’s a leading brand of soft drink, Kellogg’s Corn Flakes is a leading brand of cereals .

• Choosing points of difference

– Desirability criteria• Relevance• Distinctiveness• Believability

– Deliverability criteria• Feasibility• Communicability• Sustainability (can the brand association be reinforced

and strengthened over time)

• Establishing Points of Parity and Points of Difference

– Separate the attributes (eg: Head & Shoulders met success in Europe with dual campaign in which one ad emphasized on its dandruff removal efficacy while the another ad emphasized the appearance and beauty of hair after is use.)

– Leverage equity of another entity– Redefine the relationship

Eg: When Apple computers launched Macintosh ,its key

point of difference was “user friendly”. Although many consumers valued ease of use –especially who bought personal computers for home – one drawback with the association was that customers who bought personal computers for business application inferred that if a personal computer is easy to use then it also must not be very powerful.

Recognizing this problem ,Apple ran a very clever ad campaign with the tag line- the power to be your best in an attempt to redefine what a powerful computer meant. The message behind the ads was that because Apple was easy to use people in fact did just that – they used them- a simple but important indication of power.

• Updating positioning over time– Laddering: how to deepen the meaning of the

brand to tap into core brand associations or more abstract considerations

– Reacting: how to respond to competitive challenges that threaten an existing positioning

• Do nothing (if the competitive action seem unlikely to recapture or create a new POD)

• Go on the defensive (if competitive actions appear to have the potential to disrupt the market then take a defensive stance. One way is to add some reassurance in the product or ad to strengthen PODs.

• Go on the offensive (if the competitive action seem potentially damaging then take more aggressive stance and reposition the brand to address the threat. One approach might be to launch a product extension or ad campaign that fundamentally changes the meaning of the brand)

Designing Marketing Programs to Build Brand Equity

1. New perspectives to marketing2. Product Strategy3. Pricing Strategy4. Channel Strategy

The four major drivers of this new economy are:

1. Digitalization and connectivity (internet, intranet, mobile devices)

2. Disintermediation and reintermediation (via new middlemen )

3. Customization and customerization ( through tailored products and ingredients provided to customers to make

their own products)

4. Industry convergence (overlapping) (blurring of industry boundaries)

New perspective on marketing

Customers: - Have more power- Have a large variety of available goods and services- Can obtain more information- Can easily interact with marketers in placing and receiving orders- Can interact with other consumers and

compare notes

Companies: - Can collect fuller and richer information about markets, customers, competition

- Better communication technologies and transaction efficiency

- Can use the internet and e-mail to send promotional messages to customers

- Can customize their offerings to individual customers

There is a move away from mass-market strategies

• The 21st century has forced marketers to change how they develop their marketing programs.

• Integration and Personalization are crucial factors in building and maintaining strong brands

Marketing is changing!

Product

brand building efforts

marketing activities

brand building efforts

marketing activities

• Expression of individuality

• Consumer desire for personalization

Experiential Marketing; One-to-One Marketing ; permission marketing

“The idea is not to sell something, but to demonstrate how a brand can enrich a customer’s life”

Experiential marketing connects a product to unique and interesting experiences

Consumers ----------------------------Marketers---------------------------------ConsumersINFORMATION

GENERATE EXPERIENCES

The Fundamental Strategies of One-to-One Marketing:- Focus on individual consumers through consumer databases- Respond to consumer dialogue via interactivity- Customize products and services

Marketing to consumers only after gaining their express permission

“anticipated, personal and relevant”

“At the heart of a great brand is invariably a great product”

• How do consumers form their opinions of the quality and value of a product?

• How can marketers use the relationship marketing perspective in formulating product strategy and offerings?

Perceived Quality and ValueDimensions of Quality:

• Performance • Features • Conformance Quality • Reliability • Durability • Serviceability • Style and Design

Brand Intangiblesspeed, accuracy, delivery and installation, courtesy, helpfulness of customer service and training

Product or Service Benefit Dimensions:

1. Functional benefits: Product and performance attributes

2. Process benefits: ease of access to product information; broad product selection; convenient transactions

3. Relationship benefits: personalized service; strong emotional relevance; loyalty rewards

“By improving the fuller customer experience, companies can keep consumers happier and hold on to them longer”

Value Chain

quality perceptions + cost perceptions = assessment of value

opportunity costs of time, energy and psychological involvement in the decision

The firm is a collection of activities that are performed to design, produce, market, deliver and support products

Firms can achieve competitive advantages by improving performance and reducing costs in any or all of the value creating activities

Relationship Marketingcurrent customers are the key to long term brand success

- Mass Customization

- Aftermarketing

- Loyalty Programs

Customization addresses the need for individuality Eg: Dell- built to order computers.

To achieve the desired brand image, product strategies should focus on both purchase and consumption

Activities that occur after customer purchase

Loyalty programs offer different mixtures of services, newsletters, premiums and incentives for a firm’s “best” customer

Revenue generating element from of the mix

Consumers willing to pay price premiums , when there is a perceived added value = Stronger brands

Aspects of pricing Strategy :

1. Price perceptions 2. Setting prices

Pricing Strategy

• Consumers rank brand according to prices

• Price Bands = range of acceptable prices

• price – product meaning - value and quality they received

Price Perceptions

Pricing Strategy

Needs and wants of consumers

Costs of producing the product

Relative prices of competitionProfit margin of the

company

Greater emphasis on the end consumer

Setting PricesSell the right product and the

right price- to better meet consumer needs

1. Assess what value the customer places on your brand2. Look for variation in assessing customers value3. Asses customers price sensitivity4. Identify an optimal pricing structure5. Consider competitors reactions6. Monitor prices at a transaction level7. Assess customer emotional response8. Analyse if the returns are worth the cost

8 steps to better Pricing

Value pricing

Product design and delivery

Product costs

Product prices

Setting Prices

Innovations , improvements , and convenience

Outsourcing , material substitution , technology, product reformulation , factory improvement .Cost reductions can’t sacrifice quality

Understand what consumers are willing to pay, if there are premiums and then adjust it for cost and competition

Everyday low pricing (EDLP)

Discount and promotions over time

Builds brand loyalty and awareness

Incentives to consumers to buy

Setting Prices

Everyday base prices

Consistent low prices on major items will bring consumers back to buy

- Forward buying versus diverting

• Forward buying - retailers order more products than they plan to sell during the promotional period so that they can later obtain a bigger margin by selling the remaining goods at the regular price after the promotional period has expired

• Diverting- retailers pass along or sell the discounted products to retailers outside the designed selling area

Marketing channels =“ a set of interdependent organizations involved in the process of making a product / service available for use “

This involves designing a channel and managing intermediaries.

Channel design :1. Indirect - sell through third party intermediaries2. Direct – sell through personal contacts

Try develop : “integrated shopping experiences “

Channel Strategies

DIRECT

Product info is high Customisation Quality assurance is important Lot size is important Logistics are important

INDIRECT

Broad assortment is essential Availability is critical After sales service is important

Indirect Vs Direct channels

-Hybrid approach = combing the both , must be careful not to have too many not too little

- The goal is to maximize channel coverage and effectiveness while minimizing cost and conflict

- It concentrates on retailers even though there are many other intermediaries

- Retailers have the most contact to customers – affect brand equity

- The image of the product and the image of the retailer is important to consider as customers tend to form associations.

- Consider : 1. Push and pull strategies 2. Channel support

- Retail segmentation - Cooperative advertising

Indirect Channels

1. Push and pull strategies

Retailers have power over manufactures and directly affect brand equity.- Demand lucrative and frequent trade promotions - Compensation to stock a new brand - Cash payments for shelf space (slotting allowances) - Introductory deals (“ one free with three”)- Postponed billing- Advertising or promotion to supports a new brand

Manufactures can overcome this power by creating unique products the consumer demands

Devoting marketing efforts to the end consumer = PULL STRATEGY( broad distribution)

Devoting marketing efforts to the channel members , offering them incentives to buy the brand = PUSH STRATEGY( selective distribution)

Indirect Channels

2. Channel support

Services provided by channel members may help enhance the value to consumers

and the brand. Establish “ Marketing partnership with retailers is critical to ensure channel support

Two channel support strategies are :

1. Retail segmentation – segmenting the retailers according to similar characteristics ,

as different retailers might need different product mixes , special delivery systems ,

customised promotions or even there own branded version of the product( Branded variants)

2. Cooperative advertising- manufacturer pays for a portion of the advertising to promote

the product and the availability at the retailer. Ideal situation would be to achieve synergy

between the manufacturers own ad campaigns and the corresponding co-op ad campaign

with the retailer . Must be balance between pushing the brand and advertising the retailer

Manufacturers who sell directly to the public

1. Company owned stores – by means to showcase the brand and all its products. Helps build stronger relationships with it’s customers. This may cause competition with the retailers.

2. Other means - create there own shops within a department store ; sell through phone , mail or electronic means ( Catalogue)

3. Web strategies – online retail channel

Direct Channels

UNIT -4

Developing a Brand Equity Measurement

&Management system

Establishing brand equity management system

Brand equity mgmt sys is a set of organizational process designed to improve understanding & use of the brand equity concept within the firm.

3 Steps that helps in implementing BEMS :• Brand equity charter.• Brand equity reports.• Brand equity responsibilities.

Brand Equity CharterIt provides relevant guidelines to the marketing

manager within the company & to the key marketing partners outside the company like the ad agency staff.

It should do the following:• Define the firms view of the brand equity

concept & explain why it is important.• Specify what actual & desired equity is for a

brand .

Brand Equity Report

Assemble the result of tracking survey & other relevant performances measures for the brand into a brand equity report or scorecard to be distributed to the mgmt on a regular basis.

Tracking survey/studies – collecting info from consumers on routine basis over time.(less detailed brand related info.)

Brand Equity Responsibilities

Overseeing brand equity: For central coordination the firm should

establish a position entitled vice president or director of strategic brand mgmt or brand equity mgmt. this person is responsible for implementation of the brand equity charter & brand equity reports

Organizational design & structures :

The firm should organize its marketing functionsto optimize brand equity .

Various industries like automobile, health care,pharmaceuticals , computer h/w & s/w areintroducing brand managers into their orgs.

Managing marketing partners : Since the performance of a brand also

depends on the action taken by outside suppliers & marketing partners ,firms must manage these relationship carefully.

Firms are now a days reducing their no. of

outside suppliers. They are placing their business with one agency.

Eg: Colgate – Palmolive works alone with Young & Rubicam.

Measuring sources of brand equity :

Capturing customer mindset

Qualitative Research Techniques

It’s the unstructured measurement approaches that permit a range of possible consumer responses.

It often identifies the brand associations & sources of brand equity.

1. Free associations : Asking consumers to tell what comes into

their mind when they think of the brand.

Eg: what does Rolex name means to you?

Free association gives a rough indication of the relative strength ,favorability & uniqueness of brand.

2. Projective techniques:

Under some situations consumers may feel that it would be socially unacceptable to express their true feelings –especially to an interviewer whom they don’t even know.

Projective techniques are the tools to uncover the true feelings& opinions of consumers .

The consumers is provided with an incomplete stimuli and are asked to make sense of it or complete it.

Few projective techniques are:

• completion & interpretation tasks – Bubble exercise – depict different people

buying different products , empty bubbles ,as in cartoons , are placed in the the scene to represent the thoughts , words ,action of one or more participant. The consumers are then asked to fill in the bubble by indicating what they believe is happening or being said in the scene

• Comparison tasks – Ask consumers to express their feelings by

comparing brands to people , animal , countries, cars , magazine , vegetables , fabrics, etc.

Eg:Association Bush KerryTechnology IBM AppleAuto Ford BMW

3. Zaltman metaphor elicitation technique : Its based on the belief that consumers often

have subconscious motives for their purchasing behavior . That's why its important to find out the hidden knowledge –

“to get at what people don’t know they know.”

Its based on the idea that most of the communication is non verbal.

This study starts with a group of participants who are asked in advance to think about the research topic at hand & select minimum of 12 images from their own sources (magazine, family photo album) that represents their thoughts and feelings about the research topic.

The participants then brings these images for 2 hour interview with the study administrator who uses advanced interview technique to explore the images & reveal the hidden meaning.

Finally the participants use a computer program to create a collage with these images that communicates their subconscious thoughts & feelings about the topic.

4. Brand Personalities & Values : Brand personality is the human characteristics

that consumers can attribute to a brand.Eg: if Campbell’s soup were to be described as a person , one possible response might be –

Mrs. Campbell is a rosy cheeked & plump grandmother who lives in a warm , cozy house & wears an apron as she cooks wonderful things for her grandchildren.

5. Experiential methods : The researchers were sent to the consumers

homes to see how they approach their day , cameras & diaries were provided to capture their feelings.

Hours of footage are then condensed into documentary like 30 min videos to help marketers & the agency see how people communicate and interact in different real life situations.

Quantitative Research Techniques It generates some verbal responses from the

consumers.1. Brand awareness : strength of brand in memory ,

as reflected by consumer’s ability to identify various brand elements like brand name, logo, under different situations.

• Recognition• Recall - unaided recall – Eg: “Please tell me all the brands of mobile phones

you can think of.”

aided recall – Eg: “Please look at these brands: A, B, C, and D. Which one do you use?” • Correction for guessing : Make sure that the consumers is not making

up the response.

2. Brand image : distinguish between -Lower level considerations – related to consumers

perceptions of specific performance & imagery attribute & benefits

Higher level considerations – related to overall judgment , feelings & relationship.

• Beliefs (descriptive thoughts that a person holds about something)

Eg : for Sony video games consumers have a belief that its -

“exciting & fun” “cool” “colorful “ ”advanced technology “

3. Brand responses : • Purchase intentions – It focuses on the likelihood of buying the brand or

of switching to another brand. The purchase intention can determine the actual purchase when there is correspondence b/w the 2 in these categories :

• Action ( buying for own use or to give as a gift)• Target ( specific type of brand & product)• Context ( what type of store based on what prices

& other conditions)• Time (within a week , month , year)

4. Brand relationship :

Behavioral loyalty – to find this ask consumers various questions directly.

Eg : manager of duracell batteries might ask following questions :

• Which brand of batteries do you usually buy?• Which brand of batteries did you buy last time?• Do you have any batteries on hand? Which brand?• Which brand of batteries will you buy next time?

Brand substitutability:Answer these 2 questions :1. Which brand did you but last time?2. If the brand had been not available ,what

would you have done?

Based on the answers we can place consumersinto 6 segments:1. People who bought your brand last time &

who would have waited or gone to another store to buy your brand.

2. People who bought your brand last time but would have accepted another brand as substitute.

3. People who bought your brand but specified a particular other brand as a substitute.

4. People who bought other brand but named your brand as a possible substitute.

5. People who bought other brand & did not name your brand as substitute.

6. People who bought other brand & would have waited or gone to another store to buy that brand.

Measuring Outcomes of Brand Equity :

Capturing market performance

Comparative Methods

These are the experiments that examine consumer attitudes and behaviour toward a brand, to more directly assess the benefits arising from having a high level of awareness and strong, favourable, and unique brand associations.

- Brand-based comparative approaches (BBCA)

- Marketing-based comparative approaches (MBCA)

- Conjoint analysis (CA)

Brand-based comparative approaches:

Experiments in which one group of consumers responds to an element of the marketing program when it is attributed to the brand and another group responds to that same element when it is attributed to a competitive or fictitiously named brand.

This approach holds marketing program fixed

Examines consumer response based on brand identification

Marketing-based comparative approaches:

Experiments in which consumers respond to changes in elements of the marketing program for the brand or competitive brands.

Hold the brand fixedExamines consumer response based to

changes in the marketing program

Conjoint analysis:

A survey-based variable technique that enables marketers to profile the consumer buying decision process with respect to products and brands.

Ask consumers to express their preferences or to choose among a number of carefully designed product profiles.

Goal:Determine the trade-offs consumers are making

between various brand attributes, and thus the importance they are attaching to them.

Holistic Methods

• Holistic methods place an overall value on the brand in either an abstract utility(usefulness) terms or in financial terms.

• Therefore holistic methods attempt to assess the unique contribution of the brand to over all product equity.

Two Approaches :1. The residual approach which examines the

value of the brand by subtracting consumers preference for the brand (based on physical product attributes alone) from the over all brand preference.

Residual value = Overall brand preference - consumer preference

2. Valuation ApproachesThe valuation approach places a financial valueon brand equity for accounting purposes.Putting a specific value on brands may be usefulfor -1. Mergers and acquisitions.2. Branding licensing.3. Fund raising.4. Brand management decisions (allocate

resources , develop brand strategies)

a. Historical perspective -

• Grand Metropolitan – first British company to place monetary value on the brand it owned & to put that value on its balance sheet.

• Grand Met used two different methods,

1. If a company consisted of one brand, it was said that the brand value was 75% of the purchase price.

2. Whereas if the company consisted of many brands, a multiple of an income figure was used.

b. General Approaches

When firms need to determine the value of a brand in an acquisition or merger, they can choose from three main approaches.

1. Cost approach2. Market approach3. Income approach

The Cost Approach• The cost approach maintains that brand equity is

the amount of money that would be required to reproduce or replace the brand.

The Market Approach• Brand equity is the amount an active market

would allow so that the asset would exchange between a willing buyer and seller.

The Income Approach• Argues that brand equity is the future discounted

cash flow from the future earnings stream for the brand.

Designing &

Implementing Brand Strategies

Brand architecture :It tells the marketers which brand names , logo, symbols , and so forth to apply to whichNew and existing products.

Role of defining brand strategies and brand architecture is twofold:• clarity – brand awareness.• motivate – brand image.

Brand - Product Matrix• It’s the graphical representation of all the

brands and products sold by the firm.

• The row represents brand - product relationship and capture brand extension strategies of the firm of the no. and nature of products sold under the firm’s different brands.

• The column represents product – brand relationship and capture the brand portfolio strategy in terms of no. and nature of brands to be marketed in each category.

Brand portfolio : set of all brands and brand lines that particular firm offers for sale to buyers in a particular category.

Brand Hierarchy

Corporate Brand

Family Brand

Individual Brand

Modifier

• Corporate branding is the practice of using a company's name as a product brand name

(it’s a type of family branding)

eg:

Disney, for example, includes the word "Disney" in the name of many of its products.

• Family branding is a marketing strategy that involves selling several related products under one brand name. Family branding is also known as umbrella branding

eg:

apple, amul.

• Individual branding, is the marketing strategy of giving each product in a portfolio its own unique brand name

eg : procter & gamble – tide , panteen ,pampers , olay , ariel,gillette , head & shoulders.

• A Modifier is a means to designate a specific item , or a particular version of the product.

eg :

Johnnie Walker Red Label , Black Label, Gold Label, Blue Label Scotch whiskey.

Corporate image dimensions

• Common products attributes , benefits & attitudes – quality n innovativeness

• People & relationship – customer orientation

• Values & programs – concern with envt. n social responsibility.

• Corporate credibility – expertise , trustworthiness , likability.

Designing Branding Strategy

Decide on the number of levels –

Principle of simplicity - Employ as few levels as possible Principle of clarity - Logic and relationship of all brand elements employed must be obvious and transparent.

Decide on the levels of awareness and types of associations to be created at each level –

Principle of relevance- Create abstract associations that are relevant across as many

individual items as possible

Principle of differentiation – Differentiate individual items and brands

Decide on which products are to be introduced –

Principle of growth – invest in mkt penetration or expansion Principle of survival – brand extension must achieve brand equity in their

categories Principle of synergy – brand extension must enhance the equity of the

parent brand

Decide on how to link brands from different levels for a product –

Principle of prominence- The relative prominence (imp) of brand elements affects

perceptions of product distance and the type of image created for new products.

Decide on how to link a brand across products –

Principle of commonality - The more common elements shared by products, the

stronger the linkages.

Introducing & naming new products& brand extensions

Brand extension fall into 2 category:

• Line extension – parent brand is applied to new product that targets a new market segment within a product category the parent brand currently serves.(eg: head & shoulders dry scalp shampoo).

• Category extension- parent brand is applied to enter a different product category from one its currently serving.

Advantages of extension• Facilitate new product acceptance :

Improve brand image .Reduce risk perceived by customers.Avoid cost of developing new brand.Increase efficiency of promotional

expenditures.Reduce cost of introductory and follow up

mktng prog.

• Provide feedback benefits to the parent brand :

Clarify brand meaningEnhance parent brand imageRevitalize the brandIncrease market coverage

Disadvantages of extension • Can encounter retailer resistance . (eg: campbell’s different lines of soup –

chunky, healthy request ,select ,simply home, ready to serve classic etc).

• Can fail and hurt parent brand image.• Can dilute brand meaning.• Can cause the company to forgo the chance to

develop a new brand.• Can succeed but hurt the image of the parent

brand.