By Roshan pant

MBM 2nd semester

Nepal Commerce Campus

Unit 5:

o Formulating and Implementing Strategic Marketing Programme:

Product and Branding Challenges in 21st Century

Everyone faces problems and challenges in their jobs. And a marketing managers job has gotten tougher with more and more introduction of different media vehicles and different costs of advertising present

in the market. In general, a marketing manager of the 21st century faces the following challenges.

Budget allocation is a challenge for marketing managers from day one – Where do you use your budget? Do you use it for TVC’s, hoardings, radio, online or where else? There are so many media vehicles today, and so many variant frequencies of advertising, that media planning has become a big challenge for marketers. If you select the right message but a wrong media, then the message will probably be lost.

Differentiation – The second challenge is differentiation. A customer sometimes watches 6-7 ads in a single minute. If the ads are longer, he will still watch 2-3 ads in every minute of advertisements. So how do you differentiate yourself? What is the message that needs to go along with the advertisement? And remember that the message needs to be effective enough to penetrate the noise and reach the customers mind. Thus, Differentiation is another big challenge for marketing managers.

Brand Recall – You got the perfect message. You even advertised it through the right channels. But now what do you do about the brand recall? After a month or so, the customer is going to forget your ad. So how much budget do you allocate for the brand recall? A smart tactic to learn here is from Vodafone, which always has a 15-20 second ad which can be run at anytime to increase the brand recall. Similarly Intel has a small jingle, which makes customers remember them in seconds.

Positioning – Another target of a marketing manager, is to achieve the right positioning for the brand. Off course, positioning has now become a holistic activity. A company like Apple or Samsung has to ensure that each of its various department is upto mark (including sales, service and others) to achieve the correct positioning in the customers mind. However, marketing is at the helm of positioning and the message sent by the company to its customers through advertisements, majorly forms an impression on the customer. The brand needs to be number 1 in the customers mind, or at least 2nd or 3rd. If it drops below that, it directly affects the sales of the product. Thus, positioning is no easy challenge to conquer.

The above challenges for marketing managers are such that each of them involves 100 decisions to be made and 100 options to be rejected. And even then, at the back of the

mind, always remains a doubt, what if we had selected the other option? What if we had shown the other marketing message? This is the exact reason why so many advertising agencies and media planning agencies have cropped up. Because marketing managers need as many minds working on the right strategy, as possible and affordable by the company.

o Identifying the Reasons for Product Failure in the Market;

Here’s our top 10 list of reasons new products and services fail:

1. Marketers assess the marketing climate inadequately.2. The wrong group was targeted.3. A weak positioning strategy was used.4. A less-than-optimal "configuration" of attributes and benefits was selected.5. A questionable pricing strategy was implemented.6. The ad campaign generated an insufficient level of awareness.7. Cannibalization depressed corporate profits.8. Over-optimism about the marketing plan led to a unrealistic forecast.9. Poor implementation of the marketing plan in the real world.10. The new product was pronounced dead and buried too soon

OverviewProduct and brand failures occur on an ongoing basis to varying degrees within most product-based organizations. This is the negative aspect of the development and marketing process. In most cases, this “failure rate” syndrome ends up being a numbers game. There must be some ratio of successful products to each one that ends up being a failure. When this does not happen, the organization is likely to fail, or at least experience financial difficulties that prohibit it from meeting profitability objectives. The primary goal is to learn from product and brand failures so that future product development, design, strategy and implementation will be more successful.

Studying product failures allows those in the planning and implementation process to learn from the mistakes of other product and brand failures. Each product failure can be investigated from the perspective of what, if anything, might have been done differently to produce and market a successful product rather than one that failed. The ability to identify key signs in the product development process can be critical. If the product should make it this far, assessing risk before the product is marketed can save an organization’s budget, and avoid the intangible costs of exposing their failure to the market.

Defining product and brand failuresA product is a failure when its presence in the market leads to:

The withdrawal of the product from the market for any reason; The inability of a product to realize the required market share to sustain its presence in

the market; The inability of a product to achieve the anticipated life cycle as defined by the

organization due to any reason; or, The ultimate failure of a product to achieve profitability.

In the big book of product failures, there are a few examples that stand out as so colossal you have to wonder what the company was thinking. Still, others seem to have just been a case of bad timing, bad marketing and bad luck. Below we'll look at six reasons why products fail, and the products that prove it.

1. TimingIn some cases, a luxury product that's been in planning stages for years is set to launch just as a major recession is starting. This was the case with the Ford Edsel. The Edsel has become synonymous with failure, and it is well known as a marketing catastrophe, but the 1958 recession certainly played a large part in its undoing.

Sometimes a product is just "ahead of its time," and the market for it just doesn't exist, like the precursor to popular PDA devices, the Apple Newton MessagePad. This kinda-clunky PDA had a few shortcomings - most famously, its inability to live up to the claim of understanding handwriting - but more than that was its release at a time when paying $700US for a PDA seemed absurd.

Today, if there was a PDA that came out and revolutionized the industry, $700 would seem like a bargain.

2. Not Living Up To The HypeThere's nothing worse than when the public feels like they're being tricked. This happens when something has hyped-up marketing, but the product is pretty ho-hum. It's another reason why the Edsel failed, as Ford had positioned it as a cutting-edge new automobile, but the public saw it as more of the same for a higher cost. This poor positioning cost Ford $350 million, a huge sum in 1959.

McDonald's also fell prey to this with the release of the Arch Deluxe menu in the '90s. No one was fooled when Mickey-D's claimed to have moved into the fine dining racket just by slapping a tomato on top of a burger. McDonald's reportedly spent $100 million on advertising the failed line. For another example, don't forget the Windows Vista saga.

3. Prohibitively Strong BrandingA strong brand can be a blessing and a curse. Consumers trusted Colgate for toothpaste, but it didn't make sense when that name was put on the Colgate Kitchen Entrees. Connecting the taste of food and toothpaste was off-putting for the consumer. With the McDonald's Arch Deluxe fiasco, McDonald's name was too strong as a value burger joint for anyone to take the "dining for adults" line seriously.

4. Fixing What Ain't BrokenCompanies that are already successful sometimes try to improve themselves but end up scaring off their already loyal consumers. This is best illustrated in what is known as one of the worst product failures in history: "New Coke." In 1985, Coca-Cola was doing fairly well, but was worried about losing more market share to Pepsi. There was a $4 million market research project stating that Coke drinkers would prefer the new taste, but when it came down to it, they still wanted the original.

Crystal Pepsi is another good example. Making a clear cola did not entice non-cola drinkers - it just confused Pepsi's branding.

5. Cross Contamination - Mixing Two Successful Products Into One Big FailureIt seems counterintuitive that combining two successful products or companies can somehow bring about disaster, but it happens. Just think of the combo of peanut butter and jam in one bottle or Kellogg's disastrous milk-with-cereal packaging campaign Cereal Mates.

Another example is the recently failed merger: AOL Time Warner. Though the AOL Time Warner debacle had a lot to do with management, timing and meshing of company culture, it goes to show that taking two successful things and combining them can lead to unmitigated disaster.

6. Not Making The Right Business PartnersSony's Betamax and Toshiba's HD DVD are perfect examples of this. Betamax was widely regarded as being superior to VHS, but its higher cost meant it wasn't picked up by the big distributors, which led to its downfall.

HD DVD was like the VHS of the DVD battle, because it cost less than Blu-Ray and held less information, except that HD DVD lost. Certain studios (Fox, Sony, Walt Disney), Sony's Playstation 3 and retailers like Wal-Mart and Best Buy all sided with Blu-Ray, leaving Toshiba's HD DVD at a disadvantage because it had less available titles and sales outlets. Like Betamax, this caused a chain reaction where fewer films were released for the less-available format, and Toshiba eventually stopped producing HD DVD players in mid-2008.

7.Lack of Demand

You can build a product, but consumers may simply reject it. A "Harvard Business Review" article that looked at the reasons why products failed saw the Segway as an example of a product that hasn't caught on, even though it is still available for sale. Months before the product came to the market, its inventor raised expectations by saying that he was building an "alternative to the automobile." When the Segway made its debut, consumers discovered that the product was essentially a motorized scooter, retailing for $5,000. Today, the product price has been dropped, but it is sold chiefly to police departments and city tour guides. The general public has shown no interest in the Segway. Find a need to fill, and establish it by surveys before investing a fortune in research and development that might go off a cliff.

8.Marketing Research

"Bad estimates of market potential (or other marketing research mistakes)" was one of the points a Booz, Allen and Hamilton study on the subject of new products found. In 2004, Coca-Cola released C2, a product aimed at 20- to 40-year-old men who like the taste of Coke, but whom

marketers believed would prefer half the calories and carbs of the original Coke. The product failed and research conducted after the launch showed that men wanted the full taste of Coke, but with no calories and no carbs. Had research been properly conducted the product would have never come to the market. Instead, its replacement, Coke Zero, would have been introduced, a product that men want with Coke's taste retained, but free of both calories and carbs. Research first, then release.

9.Target Market

You can serve up the right product, but your customer base won't receive it. An example of this is fast-food giant McDonald's, which has tried to bring many products to the market through the years and has seen quite a few fail. Among the products pronounced "dead on arrival" was McLobster, a $5.99 lobster sandwich that was the wrong product for its customers. Hot dogs, pizza and pasta were other products that were tried and failed, as did the McLean Deluxe, a lower calorie burger that also proved low on taste. Most failed McDonald's products just weren't right for this burger-loving crowd. Know your target market is the moral, and do limited roll-outs to a segment of it before going full-scale.

10.Flawed Product

The Microsoft Corporation has managed to make billions of dollars annually despite bringing to the market products that were considered flawed by many reviewers and users, including its VISTA operating system. Microsoft poured $500 million into marketing the product, which was designed to replace Windows XP. Instead, consumers found the product to be flawed and downgraded to XP or switched to Apple, a competing computer maker and operating system. Microsoft could have avoided a problem had it brought a product to the market that was not flawed. Thorough pre-market testing by a representative cross-section of actual potential customers can help businesses avoid this potential pitfall.

The benefits of studying failuresGaining a better understanding of product failures is important to help prevent future failures. Studying the history of product failures may generate some insight into the reason for those failures and create a list of factors that may increase the opportunity for success, but there are no guarantees.

o New Product Development & Analyzing New Product Adoption Trend;

NPD is Process of developing a new product or service for the market. This type of development is considered the preliminary step in product or service development and involves a number of steps that must be completed before the product can be introduced to the market. New product development may be done to develop an item to compete with a particular product/service or may be done to improve an already established product. New product development is essential to any business that must keep up with market trends and changes.Developing a new product shouldn’t feel like you’re fighting in the dark. There’s an easier way. What you need is a structured road-map that gives your business a clear path to follow.

Actually developing the tangible product or service is only a small part of the new product development process, which includes the complete journey from generating the initial idea to bringing the product to market.

By setting out the steps involved, and sticking to them, your product development will become a more focused and flexible approach that can be adapted for all different types of products and services.

#1.   Idea GenerationThe development of a product will start with the concept. The rest of the process will ensure that ideas are tested for their viability, so in the beginning all ideas are good ideas (To a certain extent!)

Ideas can, and will come, from many different directions. The best place to start is with a SWOT analysis, (Strengths, Weaknesses, Opportunities and Threats), which incorporates current market trends. This can be used to analyse your company’s position and find a direction that is in line with your business strategy.

In addition to this business-centred activity, are methods that focus on the customer’s needs and wants. This could be:

Under-taking market research Listening to suggestions from your target audience – including feedback on your current

products’ strengths and weaknesses. Encouraging suggestions from employees and partners Looking at your competitor’s successes and failures

#2.   Idea Screening

This step is crucial to ensure that unsuitable ideas, for whatever reason, are rejected as soon as possible. Ideas need to be considered objectively, ideally by a group or committee.

Specific screening criteria need to be set for this stage, looking at ROI, affordability and market potential. These questions need to be considered carefully, to avoid product failure after considerable investment down the line.

#3.   Concept Development & Testing

You have an idea and it’s passed the screening stage. However, internal opinion isn’t the most important. You need to ask the people that matter – your customers.

Using a small group of your true customer base – those that convert – the idea need to be tested to see their reaction. The idea should now be a concept, with enough in-depth information that the consumer can visualise it.

Do they understand the concept?

Do they want or need it?

This stage gives you a chance to develop the concept further, considering their feedback, but also to start thinking about what your marketing message will be.

#4.   Business Analysis

Once the concept has been tested and finalised, a business case needs to be put together to assess whether the new product/service will be profitable. This should include a detailed marketing strategy, highlighting the target market, product positioning and the marketing mix that will be used.This analysis needs to include: whether there is a demand for the product, a full appraisal of the costs, competition and identification of a break-even point.

#5.   Product Development

If the new product is approved, it will be passed to the technical and marketing development stage. This is when a prototype or a limited production model will be created. This means you can investigate exact design & specifications and any manufacturing methods, but also gives something tangible for consumer testing, for feedback on specifics like look, feel and packaging for example.

#6.   Test Marketing

Test marketing (or market testing) is different to concept or consumer testing, in that it introduces the prototype product following the proposed marketing plan as whole rather than individual elements.

This process is required to validate the whole concept and is used for further refinement of all elements, from product to marketing message.

#7.   Commercialisation

When the concept has been developed and tested, final decisions need to be made to move the product to its launch into the market. Pricing and marketing plans need to be finalised and the sales teams and distribution briefed, so that the product and company is ready for the final stage.

#8.   Launch

A detailed launch plan is needed for this stage to run smoothly and to have maximum impact. It should include decisions surrounding when and where to launch to target your primary consumer group. Finally in order to learn from any mistakes made, a review of the market performance is needed to access the success of the project.

New product development can be made much simpler and focused, with a higher likelihood of success, by following these steps to guide you.

New product adoption

A new product adoption can be defined as: “A good, service or idea that is “perceived” by some potential customers as new. It may have been available for some time, but many potential customers have not yet adopted the product nor decided to become a regular user of the product. Thus if they buy this product, it is new product adoption.”

Research suggests that customers go through five stages in the process of new product adoption or service: these are summarized below:

(1) Awareness – the customer becomes aware of the new product, but lacks information about it. This first stage is about creating awareness that your product is in the market.  It is important that your company develops a successful avenue for your consumers to become aware of your product. If consumers do not know your product exists, than it might as well not exist!  Create marketing material.  These can be one-sheets, video teasers, images, and landing pages.  Make these marketing materials easily accessible.  Utilizing creativity and wit is a great way to engage consumers in this awareness stage.  I recommend creating a strong social presence for said product. In the era of social media, many tools are available in the market that provide companies with the techniques and methods to increase product awareness through social channels – enabling them to reach a large number of customers at a low cost!

Case Example – Movie Teasers and Tesla Model D

As an example, movie teasers are designed to inform the audience and customers that a movie will be released soon, but it doesn’t provide them in-depth information about the movie. Another great example includes Tesla’s Model D. Prior to its launch and release, Elon Musk published the below image on his Twitter in order to build momentum and awareness of their upcoming launch. What’s amazing about this picture is the way it has been strategically designed to make consumers aware of the product without exposing too much about the product. The viewer is left wanting to learn more.

(2) Interest – the customer seeks information about the new product. In this stage consumers are ready to learn more about your companies product and / or service. Your organization must guide the consumer through the interest stage by providing easily accessible information on your product. Among the methods used in the todays business landscape include a website describing the product, blog posts, tutorial or instructional videos, white papers, and other sources of info that the potential consumer can discover and review.

Case Example – Apple

Apple utilizes its product launch to provide information and insight into its latest product. With well-designed and organized speech, scripted presentation, and balanced use of technical and non-technical vocabulary, Apple delivers information eloquently and successfully to broad range of customers. With the information now available in multiple mediums and comprehensible by both technical and non-technical individuals, Apple gains the interest of their potential customers and builds strong momentum of interested buyers.

(3) Evaluation – the customer considers whether trying the new product makes sense. Prior to purchasing, consumers examine, compare and evaluate the product. Such behavior increases in intensity and need once the item in question is more expensive, sophisticated and complex, or critical. Consumers are searching for information. We are now finding that consumers go online and utilize social media channels to ask other individuals about your product or service. In addition, they find online reviews and recommendations. In order to simplify a customer’s search and evaluation of your product, I suggest creating information that outlines the difference between your product and other similar products, or differences within the different products and services you sell. Outline what separates your product from others, and emphasize on strength. Another great system to utilize is the  webinar. This platform allow you to communicate with potential customer in depth information about your product and provides time for Q&A.

Case Example – PCMag

PCMag is a world-renowned website for comparing gadgets and computers. They are notable for their reliable reporting, comprehensive evaluation editorials, and categorization of different gadgets based on their qualities. For example, in order to maintain fairness, PCMag categorizes laptops differently (such as work laptop, ultra-notebooks, …etc) in order to provide a more reasonable evaluation that fits the needs of the customer. PCMag is a great tool for consumers to evaluate products. Product manufactures can contact PCMag and request to get their products included in the magazine.

(4) Trial – the customer tries the new product on a limited or small scale to assess the value of the product. This is the stage where the consumer “kicks the tires”.  Nothing helps a consumer make a decision about your product more than actually trying your product out! There are many ways this is accomplished. For example, your company can provide your consumer with a free trial or a proof of concept campaign. In this stage it is very important to set the customer expectations correctly and deliver on said expectations.

Case Example – Costco

Costco is known for their free samples. I have heard that some customers piecemeal an entire lunch just from bouncing around the free sample tables during a visit to a Costco location. This “free sample” approach is very smart. In some cases Costco has seen this strategy increase sales of a product over 1000 percent. There are additional psychological effects from this, which include consumer loyalty and consumer reciprocity. Consumers feel that if they receive something for free they owe something in return.

(5) Product Adoption – the customer decides to make full and/or regular use of the new product. When the consumer enters the product adoption phase, he/she is ready to purchase your companies product. This is the critical stage that businesses need to get their consumers to. When the customer is here, you need to make the payment process simple, intuitive, and pain free. In addition, you need to ensure that the consumer can easily obtain the product. If you make it to and through this last phase successfully, than you can take money to the bank – A job well done!

Thus if a customer goes through all the above stages he is assumed to have adopted the product. There are various stages post adoption as well which decide whether or not the customer will be retained with the product. One of such things is post sale service which is extremely important to retain the customer.

o Analyzing Product-life-cycle and Product-life-cycle Strategies

PRODUCT LIFE CYCLE

The life story of most successful products is a history of their passing through certain recognizable stages. These are shown in Exhibit I and occur in the following order:

Introduction Stage

When the product is introduced, sales will be low until customers become aware of the product and its benefits. Some firms may announce their product before it is introduced, but such announcements also alert competitors and remove the element of surprise. Advertising costs typically are high during this stage in order to rapidly increase customer awareness of the product and to target the early adopters. During the introductory stage the firm is likely to incur

additional costs associated with the initial distribution of the product. These higher costs coupled with a low sales volume usually make the introduction stage a period of negative profits.

During the introduction stage, the primary goal is to establish a market and build primary demand for the product class. The following are some of the marketing mix implications of the introduction stage:

Product - one or few products, relatively undifferentiated Price - Generally high, assuming a skim pricing strategy for a high profit margin as the

early adopters buy the product and the firm seeks to recoup development costs quickly. In some cases a penetration pricing strategy is used and introductory prices are set low to gain market share rapidly.

Distribution - Distribution is selective and scattered as the firm commences implementation of the distribution plan.

Promotion - Promotion is aimed at building brand awareness. Samples or trial incentives may be directed toward early adopters. The introductory promotion also is intended to convince potential resellers to carry the product.

Growth Stage

The growth stage is a period of rapid revenue growth. Sales increase as more customers become aware of the product and its benefits and additional market segments are targeted. Once the product has been proven a success and customers begin asking for it, sales will increase further as more retailers become interested in carrying it. The marketing team may expand the distribution at this point. When competitors enter the market, often during the later part of the growth stage, there may be price competition and/or increased promotional costs in order to convince consumers that the firm's product is better than that of the competition.

During the growth stage, the goal is to gain consumer preference and increase sales. The marketing mix may be modified as follows:

Product - New product features and packaging options; improvement of product quality. Price - Maintained at a high level if demand is high, or reduced to capture additional

customers. Distribution - Distribution becomes more intensive. Trade discounts are minimal if

resellers show a strong interest in the product. Promotion - Increased advertising to build brand preference.

Maturity Stage

The maturity stage is the most profitable. While sales continue to increase into this stage, they do so at a slower pace. Because brand awareness is strong, advertising expenditures will be reduced. Competition may result in decreased market share and/or prices. The competing products may be very similar at this point, increasing the difficulty of differentiating the product. The firm places effort into encouraging competitors' customers to switch, increasing usage per customer, and

converting non-users into customers. Sales promotions may be offered to encourage retailers to give the product more shelf space over competing products.

During the maturity stage, the primary goal is to maintain market share and extend the product life cycle. Marketing mix decisions may include:

Product - Modifications are made and features are added in order to differentiate the product from competing products that may have been introduced.

Price - Possible price reductions in response to competition while avoiding a price war. Distribution - New distribution channels and incentives to resellers in order to avoid

losing shelf space. Promotion - Emphasis on differentiation and building of brand loyalty. Incentives to get

competitors' customers to switch.

Decline Stage

Eventually sales begin to decline as the market becomes saturated, the product becomes technologically obsolete, or customer tastes change. If the product has developed brand loyalty, the profitability may be maintained longer. Unit costs may increase with the declining production volumes and eventually no more profit can be made.

During the decline phase, the firm generally has three options:

Maintain the product in hopes that competitors will exit. Reduce costs and find new uses for the product.

Harvest it, reducing marketing support and coasting along until no more profit can be made.

Discontinue the product when no more profit can be made or there is a successor product.

The marketing mix may be modified as follows:

Product - The number of products in the product line may be reduced. Rejuvenate surviving products to make them look new again.

Price - Prices may be lowered to liquidate inventory of discontinued products. Prices may be maintained for continued products serving a niche market.

Distribution - Distribution becomes more selective. Channels that no longer are profitable are phased out.

Promotion - Expenditures are lower and aimed at reinforcing the brand image for continued products.

Strategies for the Different Stages of the Product Life Cycle

IntroductionThe need for immediate profit is not a pressure. The product is promoted to create awareness and develop a market for the product. The impact on the marketing mix and strategy is as follows:

Product branding and quality level is established and intellectual property protection, such as patents and trademarks are obtained.

Pricing may be low penetration to build market share rapidly or high skim pricing to recover development costs.

Distribution is selective until consumers show acceptance of the product. Promotion is aimed at innovators and early adopters. Marketing communications seeks to

build product awareness and educate potential consumers about the product.

GrowthCompetitors are attracted into the market with very similar offerings. In the growth stage, the firm seeks to build brand preference and increase market share.

Product quality is maintained and additional features and support services may be added. Pricing is maintained as the firm enjoys increasing demand with little competition. Distribution channels are added as demand increases and customers accept the product. Promotion is aimed at a broader audience.

MaturityThose products that survive the earlier stages tend to spend longest in this phase. At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.

Product features may be enhanced to differentiate the product from that of competitors. Pricing may be lower because of the new competition. Distribution becomes more intensive, and incentives may be offered to encourage

preference over competing products. Promotion emphasizes product differentiation .

DeclineAt this point, there is a downturn in the market. For example, more innovative products are introduced or consumer tastes have changed. There is intense price cutting, and many more products are withdrawn from the market. Profits can be improved by reducing marketing spending and cost cutting.

As sales decline, the firm has several options:

Maintain the product, possibly rejuvenating it by adding new features and finding new uses.

Harvest the product–reduce costs and continue to offer it, possibly to a loyal niche segment.

Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.

By imaginatively repositioning their products, companies can change how customers mentally categorize them. They can rescue products struggling in the maturity phase of their life cycles and get them back to the growth phase. And in some cases, they might be able take their new products forward straight into the growth phase.

Identifying the Sources of Brand Equity and Building Competitive Brand

Brand Equity:

Brand equity is the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself. Brand equity describes the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than products with less well-known names.

Sources of brand equity 

There are two techniques of Capturing mindset:

• Quantitative Technique.

• Qualitative Technique.

 

Qualitative Technique.

1. Free Association

2. Projective Techniques

3. Brand Personality and Values

4. Experiential Methods

 

Quantitative Technique.

1. Awareness

2. Recognition

3. Recall

4. Image

 

Qualitative Research Techniques:

Qualitative research techniques are often employed to identify possible brand associations and sources of brand equity. Qualitative research techniques are relatively unstructured measurement approaches whereby a range of possible consumer responses are permitted. Because of the freedom afforded both researchers in their probes and consumers in their responses, qualitative research can often be a useful "first step" in exploring consumer brand and product perceptions. Consider the following three qualitative research techniques that can be employed to identify sources of brand equity.

 

1. Free Association

The simplest and often most powerful way to profile brand associations involves free association tasks whereby subjects are asked what comes to mind when they think of the brand without any more specific probe or cue than perhaps the associated product category (e.g., "What does the Rolex name mean to you?" or "Tell me what comes to mind when you think of Rolex watches.").

Answers to these questions help marketers to clarify the range of possible associations and assemble a brand profile.

 

2. Projective Techniques

Uncovering the sources of brand equity requires that consumers' brand knowledge structures be profiled as accurately and completely as possible. Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express themselves on these matters. The idea behind projective techniques is that consumers are presented with an incomplete stimulus and asked to complete it or given an ambiguous stimulus that may not make sense in and of itself and are asked to make sense of it. In doing so, the argument is that consumers will reveal some of their true beliefs and feelings. Thus, projective techniques can be especially useful when deeply rooted personal motivations or personally or socially sensitive subject matters may be operating. Projective techniques often provide useful insights that help to assemble a more complete picture of consumers and their relationships with brands.

 

3. Brand Personality and Relationships

Another useful set of measures to assemble the brand profile is brand personality. Brand personality is the human characteristics or traits that can be attributed to a brand. Brand personality can be measured in different ways. Perhaps the simplest and most direct way is to solicit open-ended responses to a probe such as: "If the brand were to come alive as a person, what would it be like, what would it do, where would it live, what would it wear, who would it talk to if it went to a party (and what would it talk about)." Other means are possible to capture consumers' point of view. For example, consumers could be given a variety of pictures or a stack of magazines and asked to assemble a profile of the brand. These pictures could be of celebrities or anything else. Along these lines, ad agencies often conduct "picture sorting" studies to clarify who are typical users of a brand. In terms of measuring brand image, the Zaltman Metaphor Elicitation Technique (ZMET) requires study participants to take photographs and/or collect pictures (from magazines, books, newspapers or other sources) and use these visuals to indicate what the brand means to them in various ways.

 

4. Ethnographic and Observational Approaches

Fresh data can be gathered by directly observing relevant actors and settings. Consumers can be unobtrusively observed as they shop or as they consume products to capture every nuance of their behavior. Marketers such as Procter & Gamble seek consumers’ permission to spend time with them in their homes to see how they actually use and experience products.

  Quantitative Research Techniques

Although qualitative measures are useful to identify and characterize the range of possible associations to a brand, a more quantitative portrait of the brand often is also desirable to permit more confident and defensible strategic and tactical recommendations. Whereas qualitative research typically elicits some type of verbal responses from consumers, quantitative research typically employs various types of scale questions so that numerical representations and summaries can be made. Quantitative measures are often the primary ingredient in tracking studies that monitor brand knowledge structures of consumers over time.

 

1. Awareness

Brand awareness is related to the strength of the brand in memory, as reflected by consumers' ability to identify various brand elements (i.e., the brand name, logo, symbol, character, packaging, and slogan) under different conditions. Brand awareness relates to the likelihood that a brand will come to mind and the ease with which it does so given different type of cues.

 

2. Recognition

In the abstract, recognition processes require that consumers be able to discriminate a stimulus -- a word, object, image, etc. -- as something they have previously seen. Brand recognition relates to consumers' ability to identify the brand under a variety of circumstances and can involve identification of any of the brand elements. The most basic type of recognition procedures gives consumers a set of single items visually or orally and asks them if they thought that they had previously seen or heard these items.

 

3. Recall

Brand recall relates to consumers' ability to identify the brand under a variety of circumstances. With brand recall, consumers must retrieve the actual brand element from memory when given some related probe or cue. Thus, brand recall is a more demanding memory task than brand recognition because consumers are not just given a brand element and asked to identify or discriminate it as one they had or had not already seen. Different measures of brand recall are possible depending on the type of cues provided to consumers.

 

4. Image

Brand awareness is an important first step in building brand equity, but usually not sufficient. For most customers in most situations, other considerations, such as the meaning or image of the brand, also come into play. One vitally important aspect of the brand is its image, as reflected by the associations that consumers hold toward the brand. Brand associations come in many different forms and can be classified along many different dimensions.

BUILDING COMPETITIVE BRAND

The most important brand building challenges they say they are facing is vision, innovation, and alignment.

No doubt, the stakes for marketplace success are growing ever higher for marketers. Consumers have more choice than their mind’s can process. Against the backdrop of a dicey economy, over-crowded retail channels, and price pressure driving nearly every decision these days, marketers are neck deep and choking on more short-term marketing tactics to sell more stuff.

Few are granted the luxury of stepping back and making big picture assessments with clarity and confidence that the future they are busy creating will matter to anyone by time they get there. Brand building is like riding a bullet train these days. It’s easy to feel like your being left behind. Regardless, I believe it’s a good idea to be looking up and out right now.

what may be the most important areas of focus for many marketing decision-makers and brand managers to pursue their best opportunities now and in the future.

Vision

The global economic reset continues to slowly shake itself out. As a result, more brand managers (with enlightened management) recognize the value of crafting a bigger, more compelling vision for their brand’s future. A future that will be rich in opportunity for those brands that truly know who they are, what they represent, where they’re going from here, and why they will matter to people. Vision is everything! Everything that ever was, is now, or ever will be, begins with a compelling vision.

How clear is your vision looking out onto the horizon of opportunity right now?

Innovation

The marketplace is a vast slush pile – with more slush added daily. The brands that are rewarded with existence are the ones that continue to innovate better ways to be of value and serve people. This is where the real game is played. Innovations, both incremental and disruptive, are happening at light speed in every product and service category. There’s simply no room left anymore for me-too anything. More marketers must put their creative energies into innovating highly valued “meanings” for their offerings, rather than adding more competitive features and benefits – and in the process, create whole new markets.

Where do you see your best opportunity to change the game?

Alignment

By now, most consumers are online. Increasingly, paid media messaging is less about awareness and more about engagement online. To genuinely connect with people there, the web has ever-evolving rules of engagement. Rule number one is you can’t control the message. Rule number two is you have to be invited. It is a continuing challenge for brand managers to align their brand vision and product innovations to stay relevant and highly valued by people. It is an understatement to say the social web is a sea change of profound magnitude for marketers. Brands must provide intrinsic value to people first, and the social web is the perfect venue for doing this. Brand managers who successfully connect the dots and add to the collective good in their customer’s lives dominate. Being authentic, honest, and trustworthy–is how the marketing gets baked in these days. Paraphrasing Seth Godin, “ideas have to ship” for your value to matter to people.