Marketing

Week 1 BRANDING: Marketing Strategy and Brand Positioning

Building Strong Brands Part 1

Seller’s market: seller has product and if you want that product you have to come to the seller

Buyer’s market: Focused on customer and competition, lots of products to choose from.

Product marketing: Innovate and reduce cost, increase profitability via market share (business objective) (best for sellers) (inside out)

Customer Marketing: look at what customer wants and meets their needs, (outside in), every customer wants something different, go after some customers and ignore others, pick and choose to your customers and delivery value to those customers, profitability derives from value based, paying premium, giving customer what they want time after time, building customer loyalty (customer share) or share of wallet). Narrow market but getting more from customer’s wallet. Loyalty more profitable, cheaper to deliver to them time after time, higher upfront cost. Cross sale around needs (upsale).

Connected Community: Good and bad, careful in transactions delivery value and focus deeper on customer experiential value (experience), begins before the transaction and goes on after, communications between customers, transparent and authentic in today’s market

Economic uncertainty: Trust- focus on customer value, RESET, discipline, Flexibility.

Product Orientation: Persuade customer to want what the firm has – Generic Products – advantage to larger companies, lower cost – Profitability Drivers, market share

Marketing Orientation: Persuade firm to offer what the customer wants – Differentiated products/Services – advantage to quality and service/customer knowledge - Profitability Drivers, customer share and loyalty

Experience Orientation: Manage customer’s entire experience with the firm – Experiential value – advantage transformation; customer as co-creator of value - Profitability Drivers, Buzz, W-O-M, Referrals

Trust Orientation: Prioritize building a relationship of trust and discipline – Genuine Value – Advantage is Trust - Profitability Drivers, reduced costs (discipline)

Building Strong Brands Part 2

3 Principles of Marketing:

1. Principle of Customer Value2. Principle of Differentiation3. Principle of Segmentation, Targeting, and Positioning

4 P’s of Marketing:

1. Product2. Place3. Promotion4. Price

Strategic Marketing

Reading- Market Leadership

Market- Driven Principles

Know your markets Customers have the final say Commit to being first in the markets you serve Deliver total quality to guarantee customer satisfaction

Value Map: if you offer more benefits customers will pay more

Fair value constantly changing due to competitive reaction

Hatch marks are the fair value. Market research lets you determine where your fair value is based on your market.

Strategic Marketing Flip Chart

Fair Value: The expectation that customers have for a particular dimension of business performance (e.g. customer intimacy),

Need to meet fair value on 2, and be the best on 1.

The more mature the market the expectations are higher, younger market start lower but build over time.

Movement along one axis may affect placement on other 2.

Segmentation and Targeting

STP

Segment the market otherwise you don’t meet anyone’s needs.

What is Market Segment?

Process of dividing a market into distinct subsets, where any subset may conceivably be selected as a marketing target to be reached with a distinct marketing mix (4 P’s)

Companies should divide a market based on: Demographics/ characteristics of the customer, product benefits sought by the customer, systematic/product-related behaviors (e.g. online vs in-store purchasers)

Segmentation Methods

Characteristics of the customers Benefits Sought Systematic, Product-Related Behaviours

o Purchasing behavioro By channel

Cohort Analysis

Events during coming of age frame reactions

Geographic Segmentation

Regional Segmentation Zip Clustering

o Distinct marketing strategies created for similar types of neighborhoods stretched across the nation

o E.g., PRIZM

Select a Target Segment

What makes a segment attractive?

Balancing Segment Attractiveness with capability

Continuously monitoring whether the actual buyers match the target segment.

Segment Selection Criteria

Segment Size Growth of Segment Value of Segment ($) Stability Current Company position within segment Ease of entry into segment Ease of competitive entry into segment Number and strength of competitors

Market Targeting

Develop measures of segment attractiveness Select among attractive segments based on business capabilities.

Brand Positioning:

What is a Brand?

Formally, a proprietary trademark for a specific product or service.

Conceptually… a “contract” from a company to its customers; a promise of specific benefits, quality and value. A relationship.

A brand is whatever the customer thinks it is.

“A Brand is no longer what we tell a consumer it is – it is what consumers tell each other it is.” Scott D Cook, Founder and chairman of the Executive Committee –Intuit Board of Directors – P&G

Positioning Statement should include; target segment, point of difference, and frame of reference.

Brand should have crisp target segment even if other segments use product.

Positioning statement defines the value proposition of the product to the target market.

Target Market (for whom) Point of Difference (Reason to buy) Point of Parity (Frame of reference)

Positioning is implemented through all elements of the marketing mix; product, price, promotion, place.

Should focus on a few key benefits (unique selling proposition).

Position must be defensible

Position requires making choices.

Point of Parity (POP)

Associations that are not unique to the brand; they are shared with other brands

Category POPs: associations consumer views as necessary to be considered credible

Ec: Grocery store must have certain products (e.g. milk, eggs) to be truly considered a ‘grocery store.”

Competitive POPs: associations designed to negate competitors’’ point of difference

Point of Difference (POD)

Strong, favorable, unique brand associations

Similar to notion of USP (unique selling proposition)

SCA: sustainable competitive advantage (achieve an advantage in the marketplace for a prolonged period of time)

May involve: performance attributes, benefits, imagery associations

POD Criteria

Are the PD desirable to the Customer?

Is the POD Relevent (ex: customers didn’t care about clear cola or “unbreakable chips”) Is the POD Distinctive? (distinctive and superior)

Can you deliver the POD to the Customer?

Feasibility (affordable? Possible? E.g., can airlines deliver on-time arrival?) Communicability (evidence to communicate?) Sustainability (internal commitment, difficult to attack; must be consistent at any point in time and

over time)

Brand Mantra: The Elevator Speech:

Mental Map

Portrays brand associations and responses for a target market. Show how it is actually perceived.

Ask consumers “What comes to mind when you think about___?”

Then brand associations are grouped into categories

Core Brand Values

Set of abstract concepts or phrases that characters the five to ten most important dimensions of the mental map of a brand

Relate to points-of-parity and points-of-difference

Mental Map -> Core Brand Values -> Brand Mantra

Brand Mantra an articulation of the “heart and soul” of the brand

Similar to ‘brand essence” or “core brand promise”

Short three-to fife word phrases that capture the irrefutable essence or spirit of the brand positioning and brand values

Considerations

Communicate Simplify Inspire

Designing the Brand Mantra:

The brand function describes the nature of the product or service or the type of experiences or benefits the brand provides.

The descriptive modifier further clarifies its nature.

The emotional modifier provides another qualifier – how exactly does the brand provide benefits, and in what way?

Brand Mantras: used internally to guide decisions – what the brand should and should not be associated with.

Brand Mantra Considerations:

Communicate: define the business and boundaries; clarify what is unique about the brand. Simplify: Memorable, short, vivid, and crisp. Inspire: have higher level meaning from employees and consumers.

Experiential Branding:

What is an experience?

Experiences are processes that occur as a result of ecountering, undergoing, or living through situations.

Trigged stimulations to the senses, heart, and mind. They connect the company and the brand to the customer’s lifestyle and place individual customer

actions and purchase occasions in a broader social context.

Connecting Experience to the Brand

Experiential Brand Positioning

What does the brand stand for Should be a multisensory strategy Should be different in some real and valuable way from all competitors

Experiential Brand Value Promise

Describes what customers get in experiential Terms

Five Senses (Feel)o Consistent experience across senses; create a sensory experience that extends across

channels Emotions

o Appeal to the customers’ inner feelings and emotions; connect mild to strong positive feelings with a brand

Cognitiveo Appeal to the intellect; engage customers creatively, problem-solving experiences; use of

surprise, intrigue and provocation Behave

o Affect bodily experiences, lifestyles, enrich customer lives; show them alternative ways of doing things, alternative lifestyles, can be rational, but can be motivational, inspirational, and spontaneous

Socialo Create feeling of community or belonging; the “future ideal” self that consumer wants to

relate to; broader social system; culture

“Experience” within the 4 P’s

Product: build in experiential features

Marriott: Personal luxury, style, edge

Design: beauty, elegance (Apple)

Place: Design, music, fragrance, type of sales person

Sephora

Victoria’s secret

Promotion: noteworthy, experiential “brand personality:

Price

Embrace all changes

Other characteristics of great brands

Consistency in delivering on their promise Superior products and processes Distinctive positioning and customer experience Alignment of internal and external commitment to the brand An ability to stay relevant

Week 1 Readings:

[Optional] Check out this excerpt from Professor Kahn's book Global Brand Power: Leveraging Branding for Long-Term Growth [Optional] Branding Strategy As Your Secret Marketing Weapon - found here[Optional] 4 Examples of Brand Strategy Driving Organizational Success - found here[Optional] 6 Brand Strategies Most CMOs Fail To Execute - found here