CHAPTER - SIX

DESIGNING MARKETING PROGRAMS

TO BUILD BRAND EQUITY
 Cont’d…

Marketing programs or strategies are

the core of building brand equity.
 It can facilitate increasing brand
awareness as well as creating the
right brand image.
Marketing activities can be weaved
around product, pricing and
 New Perspectives on Marketing
• The strategy and tactics behind marketing programs
have changed dramatically in recent years.
Why?
Because
There are changes in:
• The economic,
• Technological,  have forced marketers to embrace
• Political–legal, new approaches and philosophies
• Sociocultural, and
• Competitive environments
 Some of these changes include:
• Rapid technological developments- Internet
• Greater customer empowerment
• Fragmentation of traditional media
• Growth of interactive and mobile marketing options
• Channel transformation and disintermediation
• Increased competition and industry convergence
• Globalization and growth of developing markets
• Heightened environmental, community, and social
concerns
• Severe economic recession.
 Cont’d…
• These and other changes in Marketing environments
give capabilities and implications to companies for the
practices of brand management.
• In this century Marketers are abandoning the mass-
market strategies, which is traditional.
• Companies are forced to fundamentally change the way
they develop their marketing programs
What are the new perspectives to marketing
to develop strong brands?

 Integration

and

 personalization
 1. Integrating Marketing
• There are many different means by which
products and services and their corresponding
marketing programs can build brand equity
Which means:
• Channel strategies, communication strategies,
pricing strategies, and other marketing activities
can all enhance from brand equity.
• Marketing activities surrounding that product,
however, can be critical, as is the way marketers
integrate the brand into them.
 2. Personalizing Marketing
• It’s a tailored/custom-made marketing
• A means to create deeper, richer, and more favorable
brand associations.
• Relationship marketing has become a powerful brand-
building force.
– Can slip through consumer radar
– May creatively create unique associations
– May reinforce brand imagery and feelings
• Nevertheless, there is still a need for the control and
predictability of traditional marketing activities.
• Models of brand equity can help to provide direction and
focus to the marketing programs.
 Cont’d…

Personalized marketing concepts

includes :-
• One-to-one marketing
• experiential marketing and
• Permission marketing
All potentially effective means of
getting consumers more actively
involved with a brand.
 One-To-One Marketing
 One-to-one marketing is based on several fundamental
strategies:
• Focus on individual consumers through consumer
databases—“We single out consumers.”
• Respond to consumer dialogue via interactivity—“The
consumer talks to us.”
• Customize products and services—“We make something
unique for him or her.”
• Treating different consumers differently because of
their different needs, and their different current and
future value to the firm.
• Devote more marketing effort on most valuable
consumers (and customers)
Experiential Marketing
• Focuses on customer experience

• Focuses on the consumption situation

• Views customers as rational and emotional

elements
 Permission Marketing
• Permission marketing, the practice of
marketing to consumers only after gaining their
express permission
• “Encourages consumers to participate in a long-
term interactive marketing campaign in which they
are rewarded in some way for paying attention to
increasingly relevant messages.”
– Anticipated
– Personal
– Relevant
• Permission marketing can be contrasted to
interruption marketing.
 Five Steps in Permission Marketing
1. Offer the prospect an incentive to volunteer.
2. Offer the interested prospect a curriculum over
time, teaching consumers about the product.
3. Reinforce the incentive to guarantee that
prospect maintains the permission.
4. Offer additional incentives to get more
permission from the consumer.
5. Over time, leverage the permission to change
consumer behavior toward profits.
 Integrating the Brand
Into Supporting Marketing
Programs
Supporting marketing mix should be
designed to enhance awareness and
establish desired brand image.
• Product strategy
• Pricing strategy
• Channel strategy
• Communication strategy
 Product Strategy

 At the heart of a great brand is invariably a great product.

 Designing and implementing a product or service that fully satisfies
consumers needs two things
1. Perceived quality and value
– Brand intangibles
– Total quality management and return on quality
– Value chain
2. Relationship marketing
– Mass customization
– After marketing
– Loyalty programs
 The dimensions of product quality are :

• Performance- primary characteristics of the product operate (e.g.

low, medium, high, or very high).
• Features- secondary elements of a product that complement the
primary characteristics.
• Conformance quality- degree to which the products meet
specifications and is absent of defect.
• Reliability- consistency of performance over time and from
purchase to purchase.
• Durability- expected economic life of the product.
• Serviceability- eases of servicing the product.
• Style and design- appearance or feel of quality.
 Relationship Marketing Issues
• Marketers attempt to Practice the simple
purchase exchange process with consumers
Provide a more holistic, personalized brand
experience to create stronger consumer ties.
• Current customers are the key to long-term brand
success.
• Means of customer retention, hence customer
retention can provide the following benefits.
 Relationship marketing is one means of customer retention and
can provide the following benefits.
 Acquiring new customers can cost five times more than the
costs involved in satisfying and retaining current
customers.
 The average company loses 10% of its customers each year.
 A 5% reduction in customer defection rate can increase profits
by 25% to 80% depending on the industry.
 The customer profit rate tends to increase over the life of
the retained customer. There are three important
relationship marketing issues

o Mass customization:- making products to fit the customer’s

exact specifications
o After marketing :- enhancing product consumption experience
 Loyalty programs: popular means that marketers
can create strong ties to customers.
 Identifying, maintaining, and increase the yield from a
firm’s ‘best’ customers through long-term,
interactive, value-added relationships.
 Practiced by many business organizations through
membership reward program, incentives, free
trip, etc.

 Some tips for building effective loyalty programs as

follow: Know your audience, Change is good:
Listen to best customers and Engaging people:
 Pricing Strategy
• Price premiums are among the most important brand
equity benefits of building a strong brand.
• Consumer price perceptions
– Consumers often rank brands according to price tiers in a
category.
• Setting prices to build brand equity
– Value pricing
– Everyday low pricing
 To build brand equity, a pricing strategy involves
determining the following:
A method or approach for how price will be set.
A policy or set of guidelines for the depth and
duration of promotions and discounts over time.
 Channel Strategy
• The manner by which a product is sold or distributed can have a
profound impact on the resulting equity and ultimate sales success
of a brand.
 Marketing channels are the process of making a
product or service available for use.
 Chanel strategy includes the design and
management of intermediaries such as wholesalers,
distributors, brokers and retailers.
 Channel Design

• Direct channels
– Selling through personal contacts from the company to
prospective customers by mail, phone, electronic means, in-
person visits, and so forth

• Indirect channels
– Selling through third-party intermediaries such as agents or
broker representatives, wholesalers or distributors, and retailers
or dealers
– Push and pull strategies
 Direct channels may be profitable when :

 Product information needs are high

 Product customization is high

 Product quality assurance is important

 Purchase lot size is important

 Logistics are important

 On the other hand, indirect channels may be

profitable when:
 A broad assortment is essential

 Availability is crucial
 Communications Strategy

• A Marketing programs play an important role in

building up of brand equity.
• It is essential in establishing point of similarity,
as well point of difference with competition,
making an impression in consumer’s mind
leading to development of strong consumer
based brand equity and also to develop long-
lasting relationship.
 Related to product, price and distribution
 Cont’d…
 Marketing communication options
• Advertising
• Sales promotion
• Personal selling
• Publicity or public relations
• Advertising plays an important role in contributing to
brand equity & has d/t types of mediums

Television-
Print media- like magazines and news-papers
Direct response-
Online-
Event marketing and sponsorship-
Consumer promotion-
 CHAPTER – SEVEN

DESIGNING AND IMPLEMENTING

BRANDING STRATEGIES
 Branding strategy
Branding strategy is critical because it is the means by which the
firm can help consumers understand its products and services and
organize them in their minds.

Two important strategic tools:

 The brand-product matrix and
 The brand hierarchy
 They help to characterize and formulate
branding strategies by defining various
relationships among brands and products.
 Cont’d…
The brand-product matrix, a
graphical representation of all the
brands and products sold by the firm.
 Brand-Product Matrix
Products
1 2 3 4
A
Brands B
C

 Must define:
 Brand-Product relationships (rows)
 Line and category extensions
 Product-Brand relationships (columns)
 Brand portfolio
 Important Definitions
• Product line
– A group of products within a product category
that are closely related
• Product mix (product assortment)
– The set of all product lines and items that a
particular seller makes available to buyers
• Brand mix (brand assortment)
– The set of all brand lines that a particular seller
makes available to buyers
 Designing a Branding Strategy

• The branding strategy for a firm reflects the

number and nature of common or distinctive
brand elements applied to the different
products sold by the firm.

– Which brand elements can be applied to which

products and the nature of new and existing
brand elements to be applied to new products
 Brand Hierarchy
• A means of summarizing the branding strategy by
displaying the number and nature of common and
distinctive brand elements across the firm’s
products, revealing the explicit ordering of brand
elements
• A useful means of graphically portraying a firm’s
branding strategy
11.32
 Brand Hierarchy Tree: Toyota
Toyota
Corporation

Toyota Toyota Toyota Toyota Lexus

(Trucks) (SUV/vans) (Cars) Financial
Services

Corolla MR2
Camry Avalon Celica ECHO Matrix Prius
Spyder
Platinum
CE SE Edition
S LE XL SE
LE XLE XLS SLE

11.33
 Brand Hierarchy Levels

Corporate Brand (General Motors)

Family Brand (Buick)

Individual Brand (Park Avenue)

Modifier: Item or Model (Ultra)

11.34
 Corporate Brand Equity

• Occurs when relevant constituents hold strong,

favorable, and unique associations about the
corporate brand in memory
• Encompasses a much wider range of
associations than a product brand

11.35
 Family Brands
• Brands applied across a range of product categories

• An efficient means to link common associations to

multiple but distinct products.
• It involves using one brand name to market multiple
products.
• For example, a company may use one brand to
market soap, lotion, hair shampoo, and nail
polish.
 Individual Brands

• Restricted to essentially one product category

• There may be multiple product types offered
on the basis of different models, package sizes,
flavors, etc.

11.37
 Modifiers
• Signals refinements or differences in the brand
related to factors such as quality levels, attributes,
functions, etc.
• Plays an important organizing role in
communicating how different products within a
category that share the same brand name are