what are brands good for?

In this era of disaggregation ,what are brands good for ?

What are brands?

Brands are the medium to reach a large number of people, with a promise to deliver clearly stated benefits.

Brand’s Purpose ?

Building Customer Relationship

Permits charging of Premium Prices

Reduced Risk in introduction of New Product

Firms get an edge over Distributors

What was ?

BRAND CENTERED MARKETING ………

THE ERA OF MASS COMMUNICATION

Based on Aggregation

What it is now ?

CONSUMER SEGMENT

CENTERED MARKETING

ERA OF INFORMATION REVOLUTION

Based on Disaggregation

What is “Disaggregation?”

Segmenting customers as per their needs and addressing their customized needs via

personalized two way communication is

DISAGGREGATION.

Why to disaggregate ?

Marketing becomes more adaptive to

differences in consumer needs.

Marketers become more responsive towards consumers‘ changing needs.

The strategic & tactical tasks performed by brand

are performed more profitably & less

expensively.

How to Disaggregate ?

VIA

Call Centers

Web Sites Direct

Mails

E- mails

Customized

Magazines

Thus , in this era of disaggregation, what are brands

good for ?

Well………

The purposes of brands have been redefined in three core areas:

Consumer Relationship

Channel Relationship

Brand Management Organization

Consumer Relationship

In a Brand Centered Approach….

• Is built by brands by fulfilling stated benefits.

• No personalization

• Driven by logic of ‘Aggregation.’• Relationships are shallow.

• One –way communication.

In the Approach of ‘ Disaggregation’ …….

• Is built by history of past interactions

• Personalized Interaction

• Driven by logic of ‘Disaggregation’

• Relationships are deep.

• Two-way communication

Both firms & Consumers prefer the personalized approach to blanket coverage of brands.

Changes that have come……

The locus of product

relationship is shifting away from product

brands towards umbrella brand.

The strategic &tactical activities are implemented

with targeted segments rather

than at brand level

Brands shed their roles and focuses on delivering their value proposition.

Thus………

Brands have become team players rather than individual stars for managing Consumer segment profitability.

Channel Relationship

Retailers’ business is no longer about collecting rent on shelf space.

In the present scenario, retail stores are …………

Promote Profitable Private Labels

Strong Loyalty

Create store-brand

awareness

Disaggregation is an opportunity to restore the balance to the imbalance of power b/w manufacturer & retailers.

How

Provides medium to manufactures to influence consumer decisions independent of retailers.

Restores credibility to manufactures.

Greater variety allow retailers to achieve finer level of segmentation

They can assemble an assortment of products &

brands that make sense to consumers.

Channel relationship no longer perceive Brand, as being the focal

point of marketing.

What do then BRANDS do ?

Brands have become building blocks of retailer’s value proposition to targeted segments.

Brand Management Organization

This organization was pioneer in introducing……………..

BRAND MANAGERS

They looked after………

Development of Marketing initiative at Brand level.

Profitability of their brand rather than entire portfolio

In this system, same consumers were addressed again and again by the same company under different brands

Thus the Brand Management System was not using the useful consumer information & proved to be a hindrance to disaggregation initiatives due to subtle differences which follows………….

In Brand Management System….

Teams are assigned to BRANDS

Mode of success gauge: Brand profitability

The question asked is………………..

Given our resources, what

else can we do ?

In Disaggregate Marketing……………

Teams are assigned to segments of similar CONSUMERS

Mode of success gauge: Segment level profitability

The question asked is……………..

What else does the consumer segment require ?

What else can we deliver to them as part of complete solution?

The difference disaggregate marketing can

bring can be seen on the right

Finally can be said,

the era of disaggregation has begun

&………………………………

The role of Brands have been reduced & now they have become more focused on value proposition as a whole under one

portfolio.

DISCLAIMER

Created by

Khushi Sahu,

IIT BHU,during an internship by

Prof. Sameer Mathur, IIM Lucknow.

www.IIMinternship.com