Marketing Management Unit 3(b)

8/10/2019 Marketing Management Unit 3(b)

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Price Discrimination

It occurs when a company sells a product or service at

different rates. It is of 3 types.

First degree price discrimination: Here, the seller

charges a separate price to each customer depending

on the intensity of demand.

Second degree price discrimination: Here, the seller

charges less to buyers who buy a large volume

Third degree price discrimination: Here, the seller

charges different amount to different classes of buyers

as mentioned in the following cases.


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Customer segment pricing:

Different customer groups pay different pricesfor the same product or service.

For example..museums often charge a loweradmission fee to students or senior citizens.

Product form pricing:

Big bazaar sells mens full sleeves shirt in therange starting from 300-800/- with having a

difference in quality of fabrics.


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Image pricing:

Some companies price the same product at

different levels based on image differences.

For example all the cosmetic products.

Channel pricing:

Coca-Cola carries a different price depending

on whether the consumer purchases it from

a costly restaurant or a fast food restaurant .


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Location pricing: The same product is priced

differently at different locations.

For example. viewing cricket match in stadium.

Time pricing: Offering different prices with

change in season / price on every day vs.

price charged on weekends.

For example.. some hotels offer off season

discount or some restaurants charges less

price of foods at weekends.


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Yield pricing: Some of the airlines and

hospitality industries offers discount on

early purchase or change in price with thechange in flight timings.

Sometimes, company offering low cost for

products whose expiry date is very near.


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Brand loyalty creates a barrier for entry of other

firms for the same product.

Branding is a powerful means to secure a

competitive advantage.

It is a valuable legal property which influences

the consumers behavior of buying a product.


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Brand is a perceptual entity which is rooted

in reality of the consumers mind.

Branding is forcing the positive image of a

product into consumers mind.

Brands should be able to make a clear cut

difference of the product w.r.t its

competitors offering.


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The creation of significant brand equity requires

reaching the top of the brand pyramid:

A) Brand saliencehow often and easily consumers think of the brand.

B) Brand performance is how well the product or service meets

customers functional needs

C) Brand imagery describes the extrinsic properties of the product or

service

D) Brand judgments focus on customers own personal opinions andevaluations

E) Brand feelings are the customers emotional responses and reactions

with respect to the brand.


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Brand elements are those trade markable

devices that identify and differentiate the

brand.

Brand Element Choice Criteria

A) There are six criteria in choosing brandelements. The first three (memorable,

meaningful, and likeable) can be characterized

as brand building in terms of how brand

equity can be built through the judicious choice

of a brand element.


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B) The latter three (transferable, adaptable, andprotectable) are more defensive and are

concerned with how the brand equity containedin a brand element can be leverage and

preserved in the face of different opportunities

and constraints.

1) Memorable

2) Meaningful

3) Likeability

4) Transferable

5) Adaptable

6) Protectible


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Brand reinforcement:

A brand needs to be carefully managed so that its value does not

depreciate with time.

It is possible only by putting constant effort to improve the product,

services & marketing.

E.g companies like Coca cola & Heinz are able to survive today only

because of paying attention towards improving their products, services

and marketing.

Brand equity is reinforcement by marketing action that consistently

convey the image of brand and further tries to improve it by offering

more value added products.

For exampleNivea, one of the strongest brand from Europe hasexpanded its scope from a skin cream brand to a skin care and personal

care brand.


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Brand revitalization: Here, we try to understand the sources ofbrand equity and how to begin for achieving the same.

Generally, it is easier to revive a brand which is alive but has been

more or less forgotten. If it is not done then ultimately results into death

of the brand.

Brands which failed to move its name forward like Polaroid found that

their market leadership decreased and even disappeared.

For example..Harley Davidson in 1903 has twice escaped itself from

bankruptcy but is today one of the most recognized motor vehicle

brand in the world.

It was made possible by improving the complete manufacturing

process in 1980s. It also developed a strong brand community by

forming an owners club called the Harley Owners Group (HOG) which

sponsors bike rallies & other similar events.


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Cadburys Bournvita: It was launched in 1948 &maintained its position in the market by introducing the

new variants inline with the customers choice.

In 1970s it focused on good upbringing of child

Goodness that grows with you.

In 1980s Brought-up right, Bournvita bright etc..

Changes in the packaging and introducing different

flavours helped in improved positioning of the products.

5 Star, a strong brand in the chocolate category

collaborated with Bournvita and introduced a new variant

named Bournvita 5 Star chocolate.


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Brand Strategy:

when a firm introduces a new product, it has following 3

choice.

1. It can develop new brand element for the new product.

2. It can use some of its existing brand elements.

3. It can use a combination of new & existing brand elements.

When a firm uses an established brand to introduce a new

product, the product is called a brand extension.

When marketers combine a new brand with an existingbrand, the brand extension is also called as subbrand like

Amul Masti Dahi.


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Brand extension falls into 2 general categories.

In Line extension, the parent brand covers a new product within a product

category, it currently serves such as with new flavors, colors, ingredients

and package size.

For example.. Life buoy soap from Hindustan Unilever has many line

extensions and each one is identified by specific names such as Lifebuoy

care, Lifebuoy Deofresh, Lifebuoy nature and Lifebuoy Total in addition to

its Lifebuoy liquid soap.

In category extension, the parent brand is used to enter a different product

category from the one it currently serves.

For example.. Honda has used its company name to cover differentproducts such as automobiles, motorcycles, snow blowers, lawn mowers,

marine engine and snow mobiles.

Thus, Honda advertises that it can fit six Hondas in a 2 car garage.


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A Brand line consists of all products original as well as category

extensions-sold under a particular brand.

A Brand mix (Also known as brand assortment) is the set of all brands

introducing brand lines that a particular seller makes available to buyers.

Branded variants is specific brand lines supplied to specific retailers or

provide distinct offerings.

Documents

Marketing Management Unit 3(b)