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Dr. Vibhuti Tripathi, SMS

What is a Product?What is a Product?

Anything that can be offered to a market for attention, acquisition, use or consumption.

Satisfies a want or a need.

Includes:Physical Products, Services, PersonsPlaces, Organizations, IdeasCombinations


Levels of ProductLevels of Product

BrandName

QualityLevel

Packaging

Design

Features

Delivery& Credit

Installation

Warranty

After-Sale

Service

CoreBenefit

orService

CoreBenefit

orService

ActualProduct

ActualProduct

CoreProduct

Fundamental Need

CoreProduct

Fundamental Need

Augmented ProductAdditional Attributes

Augmented ProductAdditional Attributes


Product Attribute DecisionsProduct Attribute Decisions

QualityQualityQualityQuality FeaturesFeaturesFeaturesFeatures

DesignDesignDesignDesign


What is a Service? A form of product that consists of activities,

benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

Examples: banking, hotel, airline, retail, tax preparation, home repairs.


The Product-Service Continuum

Sugar Restaurant College Education

Pure Tangible Good

Pure Service


Brand Defined

A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service

Branding:

Creating, maintaining, protecting, and enhancing products and services.


Brand is a product, that adds dimensions to differentiate from other products designed tosatisfy the same need.

Differences could be rational, tangible, functional

Symbolic, emotional, intangible

OR


Benefits of Brands to Consumers

1. Identification of source of products

2. Risk Reducer: Consumers may perceive different types of risks in buying

Functional Risk: product performance

Physical Risk: health related hazards

Financial Risk: worth for the price paid

Social Risk: status, embarrassments Dr. Vibhuti Tripathi, SMS

Time & Energy Risk: cost of finding another Satisfactory product

Brands can be a very important risk-handling device

3. Search Cost Reducer:

4. Bond or Pact with the manufacturer or Service Provider: utility, consistency, Appropriateness Ps of Marketing

5. Symbolic Device: Personality traits, values…


Benefits of Brands to Companies

1. Identification1. Identification

2. Legal Protection

3. Signal of quality level to satisfied customers

4. Competitive Advantage

5. Financial returns


Branding Challenges:

1.Savvy Customers: advent of IT, knowledgeableexperienced, demanding

2. Proliferations: line and brand extensions, complicated the marketing decisions

3. Increased Competition: Brand extensions, Globalization, Imitations

4. Media Fragmentation: non traditional forms of communication, zipping, cable TV

5. Decreasing Brand Loyalty in many categoriesDr. Vibhuti Tripathi, SMS

Brand Equity

Branding is all about creating differences

Differences in outcomes arising from the ‘added value’endowed to a product.

Brand Equity is the value of a brand.

A positive differential effect that knowing a Brand Name has on customer’s response towards the Product or services


Strategic Brand Management Process

Involves the design and implementation of marketingprograms and activities to build, measure and manage brand equity.


Identify and Establish Brand Positioning and

Values

Plan and Implement Brand Marketing

Program

Measure and InterpretBrand Performance

Grow and Sustain Brand Equity


Identify and Establish Brand Positioning and Values

Mental Maps: understanding what the brand represent

Competitive Frame: Advantages of a brand vis-a-vis competitors

Points of Parity and Difference:

Core Brand Values: Set of Attributes and benefits

Brand Mantra: three-to-five words expression of the most important aspects of the brand.


Plan and Implement Brand Marketing Program

Mixing and Matching the Brand Elements:

Visual or verbal information that serves to identify and differentiate a product.

Common Elements are : Brand Name, Logo, Symbol, Character, packaging and slogans.

Chosen to enhance brand awareness or facilitate the formation of strong, favorable and unique brand Association.

Different elements have different advantages, a subsetor even all the possible brand elements are often employed Dr. Vibhuti Tripathi, SMS

Integrating Brand into Marketing Activities and theSupporting Marketing Programs:

Primary input to build a strong brand comes from the marketing activities related to brand

Product, Price, and Channel Strategy

Leveraging Secondary Associations:

Product Origin

Channel Strategy

Ingredients

Co-branding

Endorsements

Sponsorships


Brand Building Tools

Choosing Brand Elements

Brand Name, Logo, SymbolCharacter, Packaging, Slogan

Memorable, Meaningful,Likeability, Adaptability,Protectable

Developing Marketing Programs

ProductPricePlacePromotion

Tangible / Intangible BenefitsValue PerceptionIntegration Push / PullMix and Match options


Leveraging Secondary Associations

Company NameCountry of OriginChannel of DistributionEndorsersEvents

Awareness Meaningfulness Transferability


Brand Awareness

Depth Breadth

RecallRecognition

PurchaseConsumption

Brand Associations




Strong

Unique

RelevanceConsistency

Points of ParityPoints of Difference





Brand Awareness

Brand Associations

Possible Outcomes

Loyalty

Less Vulnerability

Larger Margins

Trade Co-operations

Increased MarketingCommunication Efficiency

Brand Extensions


Customer Based Brand Equity Model

Basic Premise of the model is what customers haveLearnt, Felt, Seen and heard about the brand as a resultof their experiences over a period of time.

Power of brand lies in what lies the minds of the customers

The challenge to the marketers in to building a strong Brand is to ensure that customers have right experiencewith the product and associated marketing programs


Customer Based Brand Equity is defined as theDifferential effect that Brand knowledge has on consumer response to the marketing of that brand.

Differential Effect: difference in offerings than the Competitors.

If no difference occur, then the brand name can beessentially classified as COMMODITY or GENERIC

Competition may be based on Price.


Brand Knowledge: differences in response are a resultof consumers’ knowledge about the brand from past Experience. Learnt, felt, saw or heard.

Marketing Programs: differential response reflected in Perceptions, preferences and behavior related to allAspects of the marketing.

Recall of various touch points, Advertisements, sales promotions


Sources of Brand Equity


Brand Awareness consists of brand recognition and brand recall performance.

Brand Recognition relates to consumers’ ability to confirmprior exposure to the brand when given the brand as a cue.

Brand Recall relates to consumers’ ability to retrieve the brand from memory when given the cues.


Brand Awareness plays an important role in consumers’ decision making for three main reasons:

Learning Advantage: awareness influences the formationstrength of the brand associations that make up the Brand image.

Consideration Advantage: It is important that consumersthink of and consider the brand whenever they areMaking a purchase for which the brand can be potentiallybe acceptable.

Raising brand awareness increases the likelihood thatbrand will be a member of the consideration set.


Choice Advantage: Brand awareness can affect choices among the consideration set.

Consumers may make choices based on brand awareness considerations when they have low involvement.

Low involvement could be in terms of lack of motivation to purchase, nature of product, lack of knowledge or experience etc.

Brand Awareness is created by repeated exposure with the help of advertising, promotions, sponsorships, events etc.


It is important to visually and verbally reinforce the brand name with full complement of brand elements.

A positive brand image is created by marketing programs that link strong, favorable and unique associations to the brand in memory.


Steps of Brand Building

Ensure Identification of the brand with customers and an association of the brand in customers’ mind with a specific positioning.

Firmly establish the totality of brand meaning in the mindof customers by strategically linking tangible ad intangiblebrand associations with certain properties.

WHO ARE YOU? (brand Identity)

WHAT ARE YOU? (Brand Meaning)


Ensure Identification of the brand with customers and an association of the brand in customers’ mind with a specific positioning.

Convert Brand response to create an intense, active relationship between brand and the consumers.

WHAT DO I THINK OR FEEL ABOUT YOU? Brand Response

WHAT ABOUT YOU AND ME? Associations


Salience

Performance Imagery

Judgments Feelings

Resonance

1. Identity

2. Meaning

3. Response

4. Relationships

Customer Based Brand Equity Pyramid


Brand Salience: relates to aspects of the awareness of the brand. Brand Recall, Recognition.

Breadth and Depth of Awareness: it is important to have high levels brand awareness under a variety of conditions.

Depth of Awareness: Likelihood that a brand elementwill come to mind and the ease with which it does so.

Breadth of Awareness: The range of purchase and usage situations in which the brand elements comes tomind.


Product Hierarchy has important implication for how toimprove brand awareness.

Beverages

Water Flavored

Non Alcoholic Alcoholic

Milk

Hot Beverages

Juices

Soft Drinks

Wine Beer

Distilled Spirits

It contains schematic depiction of possible hierarchy thatMay exist in consumers’ mind


Organization of the product category hierarchy that prevails in memory plays an important role in consumer decision making.

Highly salient brand is the one which has both depth andbreadth of brand awareness.

It should be developed in such a manner that customersalways make sufficient purchases as well always think of the brand across a variety of settings in which it could be employed or consumed.


Brand Performance: Designing and delivering a productthat fully satisfies consumer needs and wants.

Product itself is at the heart of brand equity

To what extent does the brand satisfy utilitarian, aesthetic and economic needs and wants.

Different performance dimensions can serve as a means to differentiate the brand.

Salience

Performance Imagery

Judgments Feelings

Resonance

2. Meaning


Different types of attributes and benefits that often underlie brand performance;

1. Primary ingredients and supplementary features

2. Product reliability, durability and serviceability

3. Service effectiveness, efficiency and empathy

4. Style and Design

5. Price


Some attributes are essential ingredients necessary forFor a product to work.

Other attributes are supplementary features that allow for customization and more versatile, personalized usage.

These attributes vary by product or service category

Some categories have few ingredients or features; Bread

Some categories have many essential ingredients but few features; Oven – many optional features.

Some categories have numerous ingredients and featuresMusic Player – multiple options


Brand Imagery: deals with extrinsic properties of the product or service, including the way in which the brandattempts to meet customer’s psychological and socialneeds.

Brand Imagery is how people think about a brand abstractly rather than what they think the brand actually does.

Salience

Performance Imagery

Judgments Feelings

Resonance

2. Meaning


It refers to more intangible aspects of the brand.

Imagery associations can be formed directly or indirectly.

Directly: customer experience, contact with product, usage situations etc.

Indirectly: through the desirous depictions communicated in brand advertising or some other sources of information.


Many types of intangibles can be linked to a brand:

User Profile

Purchase and Usage Situations

Personality and Values

History, Heritage and Experiences


Brand Judgments: Focus on customer’s personal opinions and evaluations with the brand.

Brand Judgment involve how a customer puts together all different performance and imagery associations of the brand to form different kinds of opinions.

Salience

Performance Imagery

Judgments Feelings

Resonance

3. Response


Some of the brand judgments that are important toBuilding a strong brand are:

Quality Credibility

Consideration User Profile


Brand Quality: is the attitude towards brand performanceand its match with the perceived quality expectations

Brand attitudes are important because they often form the basis for actions and behavior that consumers takewith the brand.

Brand Credibility: refers to the extent to which the brand As a whole is seen as credible in terms of three dimensions

Perceived expertise: competent, innovative, market leader

Trustworthiness: dependable and keeping customer Interests in mindDr. Vibhuti Tripathi, SMS

Likeability: Fun, interesting and worth spending time with

Brand Consideration: it is more than mere awareness

Consideration depends on how personally relevant customers find the brand OR

The extent to which customers view the brand as beingappropriate and meaningful to themselves.

Customers make an overall appraisal as to whether theyHave any personal interest in a brand AND

Whether they should ever buy a brand


Brand superiority: relates to the extent to which customers view the brand as unique and better than Others.

Brand superiority: relates to the extent to which customers view the brand as unique and better than Others.

Superiority is intensely critical in terms of building intense and active relationships with customers and depends on

Number of unique brand association that make up the Brand image.


Brand Feeling: are customers emotional response and reactions with respect to the brand.

Brand feelings also relate to social currency evoked by the brand.

Feelings that can be evoked by the various marketing Programs can be Warmth, Fun, Excitement, Security,Social Approval, Self Respect etc.

Salience

Performance Imagery

Judgments Feelings

Resonance

3. Response


Brand Resonance: refers to the nature of the relationshipand the extent to which customers feel that they are INSYNC with the brand.

Resonance is characterized in terms of intensity, or the depth of the psychological bond and the level of activitiesengendered by this loyalty. (repeat purchases, referrals)

Resonance can be broken down into four categories:

Behavioral Loyalty Attitudinal Attachment

Sense of Community Active Engagement


Behavioral Loyalty is necessary but not sufficient for resonance to occur.

Some customers may buy out of necessity because the brand is the only product being stocked or easily available or only one that they can afford.

To create resonance there needs to be a strong personalattachment. (Attitudinal Attachment)

The brand may also take on broader meaning to the customers in terms of sense of community.


Identification with a brand community may reflect animportant social phenomenon whereby customers feel a kinship or affiliation with others associated with the brand

Strongest affirmation of brand loyalty is when customers are willing to invest time, energy, money or otherresources in brand beyond those spent during purchase


Choosing Brand Elements to Build Brand Equity


Brand Elements are also called brand identities.

These are trademarkable devices that serve to identifyand differentiate the brands.

Main Brand elements are:

Names Logos Symbols Characters Slogans

Jingles Packages Signage Spokespersons

These are independent of the decisions made about theproduct and how it is marketed.


Brand Elements are chosen to enhance brand awareness, facilitate the formation of strong, favorable,and unique brand associations; OR

Elicit (draw out) positive brand judgments and feelings.


Criteria for choosing Brand Elements

There are six criteria in choosing brand elements

Memorability: Easily recognized; Easily Recalled

Meaningful: Descriptive; Persuasive

Likability: Fun and Interesting; Rich visual and verbal imagery

Transferability: within and across product categories;across geographical boundaries and cultures

Adaptable: Flexible and Updatable

Protectable: Legally and Competitively Dr. Vibhuti Tripathi, SMS

Memorability

Intrinsic nature of brand elements may make them moreattention getting and easy to remember.

All of these to contribute to brand equity

Meaningfulness

Elements could be chosen whose inherent meaning enhances the formation of brand associations.


Important aspects of meaning of a brand element arethe extent to which it conveys;

General information about the nature of the product category:

Suggesting something about product category

Likelihood of consumer rightly identifying the product

Specific Information about particular attributes and benefits of the brand:

Product ingredients; kind of personality who might useetc…


Likeability

The associations suggested by a brand element maynot always related to product.

Brand elements can be chosen that are rich in visual andverbal imagery.

They may inherently denote fun and interest.


Memorability, Meaningful and Likeability; the set offersadvantages of

Recognition and Awareness: Consumers often do notexamine much information in making purchase decision

Reduce the burden on Marketing Communications

Transferability

Usefulness of the brand element for product category orline extension.

The less specific the name, the more easily it can be transferred across categories.


Reliance connotes a feeling of security and can be extended to variety of products related to safety and security.

Transferable across geographic boundaries

Depends on cultural content and linguistic qualities of the brand elements.

Using non meaningful names which do not have any inherent meaning can be transferred easily.


Pepsi marketed its products in China with the slogan “Pepsi Brings You Back in Life”, but the slogan inChinese really meant

“Pepsi Brings Your Ancestors Back from Grave”

A hair product company introduced the Mist Stick, a curling iron rod, in Germany.

Later on the company found out that mist is slang usedfor Manure in German.

An American Company sold Baby food in Africa, the packaging had Pictures of Babies on the pack.


Company failed and found out that as Africans could notread, African companies put pictures on the label of what is inside the pack.

Companies must review all their brand elements forcultural meaning before introducing the brand into a newmarket.

Adaptability

Because of the changes in consumer values and opinions, or simply because of a need to remaincontemporary, brand elements often must be updated over the time.


Protectable

Choose brand elements that can be legally protected on an international basis

Formally register them with the appropriate legal bodies

Vigorously defend trademarks from unauthorized competitive infringement.

It is important to reduce the likelihood that competitorscan imitate the brand creating a derivative based on salient prefixes or suffixes of the name, package looksor other actions.



Procedures and Considerations for choosing Brand Elements

Brand Name captures the central theme or key Associations of a product in a very compact and Economic manner .

It takes consumers to comprehend marketing communications and can range from half a minute to afew hours;

Brand names can be noticed and its meaning registeredor activated in memory within just a few seconds.

Brand Names can be chosen with certain criteria in mind


Descriptive

Describes function literally, generally unregisterable

Suggestive

Suggestive of benefit or function

Compounds

Combination of two or more, unexpected words

Classical

Based on Latin, Greek or Sanskrit words

Arbitrary

Words with no obvious tie-in to the company


Brand awareness is improved;

The extent to which brand names are chosen that are;

Simple and easy to pronounce or spell

Familiar and meaningful

Different, distinctive and unusual

Simplicity reduces consumers’ cognitive effort tocomprehend and process the brand name

Short names often facilitate recall because they are easy to encode and store in the memory


Longer names can be shortened to ease recall-ability


Pronounciation also affects the entry of the brand intoconsideration sets and the willingness of consumers toorder or request the brand orally.

To improve pronounciability and recall-ability marketersmay seek a desirable pleasant sound in their brand names.

Cultural differences may exist in brand name memorability and recall.


Chinese Speakers are more likely to recall names in visuals rather than spoken recall

Whereas, English speakers are more likely to recall thenames in spoken recall.

Brand names are not restricted to letters only but can contain Alphanumerics


Naming Procedures

1. Defining the brand objective:

also necessary to recognize the role of the brand within the corporate branding hierarchy and how the brand should relate to other brands and products

2. Generating as many names and concepts as possible

any potential source of names can be used;

Company management and employees, existing and potential customers, intermediaries, Ad agencies, professional consultants and so on.


3. Names must be screened based on branding objectives and marketing considerations.

Elimination can be based on

Names that have unintentional double meanings

Names that are patently unpronounceable, already in use or too close an existing name

Names that have obvious legal complications

Names that represent an obvious contradiction of thepositioning


4. Collecting more extensive information on each of the final 5-10 names.

Before spending large amounts of money on consumer research it is advisable to do an extensive internationallegal search

5. Consumer research to confirm management expectations as to the memorability and meaningfulnessof the names.

6. Based on all the information management can choosethe name that maximizes the firm’s branding and marketing objectives and register.


Brand Logos can be used as means to indicate origin, ownership or association.

logos may range from corporate names and trademarks written in a distinctive form to;

Distinctive abstract logos completely unrelated to corporate name or activities.

Strong word marks; BATA, COCA-COLA, KIT-KAT

Abstract Logos; Mercedes Benz, Nike, Olympic


Non-word mark logos are often called as symbols.

Because of their visual nature, logos and symbols are often easily recognizable.

Logos are non-verbal thus can be updated as neededover time and can be well transferred across culture

They can be relevant and appropriate in a range of product categories.


Brand characters

Represent a special type of brand symbol that takes a human or real life characteristics.

These are introduced through advertising and can play a central role in subsequent campaigns and package design.

Characters can be animated of live-action figures often colorful or rich in imagery.

Characters can help to break through the marketplace clutter


Help in easily communicating key product benefits.

The ability of a consumer to have a relationship with a brand can be easier when the brand literally has a humanistic character

Brand characters also do not have direct product meanings so they can be transferred easily across product categories.

Characters often must be updated over time so that their and personality remains relevant to the target market.


Brand Slogans

Slogans are short phrases that communicate descriptiveor persuasive information about the brand.

Just do it

Slogans often become closely tied to advertising campaigns and can be used as lines to summarize the descriptive or persuasive information conveyed in ads

Diamonds are forever: the tagline communicates the intended ad message that Diamonds bring eternal loveand never loose value.


Campaign-specific lag lines may be used to help reinforce the message of a particular campaign instead of the brand slogan for a certain period of time.

Brand Jingles

Jingles are musical messages written around the brand.

These are typically composed by professional songwriters

Can be thought as extended musical slogans

Because of their musical nature jingles are not easily transferrable as other brand elements.


Jingles can communicate brand benefits but often conveyproduct meaning in a fairly abstract manner.

The potential associations that might occur for the brand from jingles are feelings, personality or other intangible benefits.

Because of their catchy nature, consumers are likely to mentally rehearse or repeat the jingle even after seeing or hearing the ads.

This provides an additional encoding opportunities andincreasing memorability.


A well known jingle can serve as a foundation for advertising for years.

Brand Packaging

Packaging involves the activities of designing and producing containers or wrappers for a product.

Packaging should achieve certain objectives:

Identify the brand

Convey descriptive and persuasive information

Facilitate product transportation and protection


Assist at-home storage

Aid product consumption

The aesthetic and functional components of packaging must be chosen correctly.

Aesthetics: relate to package’s size and shape, materialcolour, text and graphics.

Functional: easy to hold, easy to open, resealable, tamperproof, storage, reusable.

One of the strong associations that a consumer has with the brand is the look of its packaging.


New packages can also expand a market and capture new market segments.

Package design has also become important as:

Brand proliferation is increasing and

Advertising is becoming more expensive.

For many consumers, the first encounter with a new brand may be on the shelf of a store.

Few product differences exist in some categories, packaging innovations can provide an edge


Packaging also means having a strong appeal on the shelf and standing out from the clutter.

Packaging is also called as;

‘Last five seconds of marketing’

‘Permanent Media’

‘The last salesman’


Putting it all together

It is necessary to ‘mix and match’ different brand elements to increase brand equity.

Marketers must choose to mix brand elements to achievedifferent objectives.

Brand elements must be chosen to reinforce each other by shared meaning and marketing programs.


Designing Marketing Programs to Build Brand Equity


Judicious selection of brand elements can make an important contribution to customer based brand equity.

But the primary input comes from marketing activities related to the brand and the corresponding marketingprograms.

Marketing activities in general and product, price and distribution strategies in particular can build brand equityby way of:

Enhancing brand awareness, improve brand image, eliciting positive brand response and increasing brandresonance


Brand itself can be effectively integrated into the marketing program to maximize the creation of brand equity

Changes in the economic, technological, socio-cultural,and competitive environments have forced marketers to adopt new marketing approaches.

Kotler identifies certain major drivers of new economies as;

Digitalization and connectivity

Disintermediation and re-intermediation


Customization

New customer and company capabilities.

New Capabilities in New Economy

A substantial increase in customer power

A greater variety of available goods and services

A greater amount of information , practically about anything

A greater ease in interacting, placing and receiving orders.

Consumers


An ability to exchange and compare notes, experiences or information on various issues , even with strangers.

Companies

Can collect full and richer information about market, customers, prospects and competitors.

Can facilitate transaction efficiency

Can customize their offerings and services to individual customers

Marketers are abandoning the mass marketing approachto implement new approaches


Companies are adopting Personalized marketing in theform of :

Experiential Marketing: Pine and Gilmore

It promotes a product by not only communicating product’s features and benefits but also connecting it with unique and interesting experiences.

Experiential Marketing differs from traditional marketing inseveral distinct ways:

Focuses on customer experience

Focuses on the consumption situation


Views customers as rational and emotional being

Use eclectic (diverse and assorted) methods and tools

Different Types of experiences enhanced: Sense, feel, think, act and relate

Different experience providers: Communications, visual/verbal identity and signage, product presence, co-branding, spatial environment and sales personnel.


One-to-one Marketing: Don Peppers and Martha Rogers

Basic rationale of one-to- one marketing is that consumers help to add value by providing information tothe marketer; and

Marketers add vale by taking that information and generating rewarding experiences for consumers.

A company reduces transaction costs and maximizeutility for consumers to build profitable relationships

One-to-one marketing is based on certain concepts like;


Focus on individual consumers through databases

Respond to consumer dialogue via interactivity

Customize products and services

Most important principle of one-to-one marketing is:

Treat different consumers differently because of their different needs and their different value to the company.


Permission Marketing: Seth and Godin

Interruption marketing in terms of mass media campaignscan no longer attract customers as they may expect butnot necessarily appreciate such interruptions

If a marketer wants to attract a consumer’s attention, theyfirst need to seek his permission.

Inducements for permission could be – a free sample, sales promotion, contest, discount etc.

By eliciting consumer co-operation, marketer canpotentially develop stronger relationships with consumers


Consumers may show a willingness to receive furthercommunications in the future.

Steps to effective permission marketing:

Offer the prospects an incentive to volunteer

Offer the interested prospect information over time

Reinforce the incentive to guarantee permission over time

Leverage the permission to change consumer behaviourtowards Brand Equity.


Permission marketing can be seen as developing the consumer dialogue components of one-to-one marketing in more details.


Reconciling The New Marketing Approaches

From branding perspective new marketing approaches are useful means of thinking how to:

Bring out positive brand responses and

Create brand resonance to build CBBE.

One-to-one and Permission Marketing can be effective at creating strong behavioural loyalty and attitudinal attachment.

Experiential Marketing can be effective in establishing brand imagery and variety of feelings.


The product itself is at the heart of brand equity because it is the primary influence on what consumers experienceWith a brand,

What they hear from others

To create brand loyalty, consumers’ experience with the product at least be met, if not actually surpass their expectations.

Important to know how consumers form their opinions ofthe quality and value of a product.


Perceived Quality and Value

Perceived quality has been defined as customers’ perception of the overall quality or superiority of a productrelative to;

Relevant alternatives, and

With respect to its intended purpose.

Quality Perceptions can vary from category to category


General Dimensions of Product Quality

Performance

Levels at which the primary characteristics of the productoperate.

Features

Secondary elements of a product that complement the primary characteristics.

Conformance Quality

Degree to which the product meets specifications and is absent of defects


Reliability

Consistency of performance over time and from purchaseto purchase

Durability

Expected economic life of the product

Serviceability

Ease of servicing the product

Style and Design

Appearance or feel of quality


Brand Attitudes may not necessarily be based only on product performance but

May also depend on more abstract product imagery.

Reflecting the importance of product quality, companies are adopting to quality management approaches like

Quality Function Deployment, Total Quality ManagementReturn on Quality


McKinsey Consulting has Developed a Model for 3-D Marketing

Model proposes three product or service benefit dimensions that are likely to be expected by a customer

Marketers must take a broad and holistic approach to building brand equity


Benefits

Functional Benefits: Product and performance attributes;value, quality so forth

Process Benefits: Ease of access to product information, broad product selection, simplified/ assisted decision making, convenient transaction, automatic product replenishment

Relationship Benefits: Value based on personalized service, strong emotional relevance, information sharingthat creates value exchange, differentiated loyalty rewards


Value Chain Concept

Consumers often combine quality perceptions with costperceptions to arrive at an assessment of the value of a product.

Costs are not restricted to the actual monetary price butmay also reflect opportunity costs of time, energy and psychological involvement in the decision making.

Michael Porter has proposed the value chain as a strategic tool for identifying ways to create more customervalue.


The value chain identifies FIVE primary value creatingactivities; and FOUR Support Activities.

Value CreationInbound Logistics

Outbound Logistics

Marketing

Sales

Services

Support Activities

Infrastructure

Human Resource

Technology Development

Procurement


Companies can create competitive advantages by partnering with other members of the values chain to improve the performance of the customer value deliverysystem.

From a branding perspective, various mentioned activities are potentially a means of creating strong, favourable, andunique brand associations that can serve as sources forbrand equity.

This broader set of activities and its integration is relationship marketing


Important Relationship Marketing Issues

Mass Customization

Making products to fit the customer’s exact specification

Dell, Levi’s, Fashion Markets, Nike

After Marketing

Those marketing activities that occur after customerpurchase

It can involve the sale of related, complementary products


Instruction Manuals for many products.

Loyalty Programs

These have become a popular means to create a stronger tie to customers.

The purpose is to identify, maintain and increase yieldFrom company’s best customers through

Long term, interactive, value added relationship


BRAND LOYALTY VERSUS PERCEIVED VALUE LOYALTY


Consumers look for “perceived value” and not at price alone as Value is a blend of quality and price.

A consumer is willing to pay a certain price for a certain quality.

Different segments of consumers look at different ‘perceived value’ points and not just price points. This is the tangible part.

The intangible part of perception, which is a combination of image and emotional value, also contributes to consumers’ purchase and consumption decisions.


The tangible value and the intangible perception make up the ‘perceived value’ of any brand in the minds and hearts of the consumers.

Ultimately it is the ‘perceived value points’ that the consumer looks for and the wars that are actually won are “perceived value” wars and not ‘price’ wars.

Price wars may be successful in certain categories like; Hindustan Lever and Procter and Gamble in the prices of their brand Wheel, Ariel and Tide to snatch back market share from brands like Ghadi detergent.


The same companies have also aggressively priced Sunsilk and Clinic and are resorting to aggressive marketing for brands like Head & Shoulders and Pantene to take back market share from brands like Chik and Nyle.

They have also changed the proportion of sachets and bottles to increase consumption.

Categories like TV a consumer evaluates the brands in terms of Perceived value.

It is not enough to have innovative exchange schemes, unique tie-ups or liberal consumer financing. But combined with sound positioning and servicing,


Consumers are more loyal to ‘perceived value’ than to ‘brands’.

If a brand consistently delivers ‘perceived value’ over a period of years, it may attain brand loyalty.

Marketers must focus on the consumer and not on the competition. Comparing and contrasting with competition, and even following the price cut road to a bottomless pit, is suicidal.

Companies must focus on its consumer segments and customize its offerings.

Ways to Acquire Perceived Value Points and Brand Loyalty


Unwarranted and adhoc promotions, that are actually disguised price cuts reduce the equity and the image of the brand, making the consumer focus on the ‘deal’ rather than the branded product.

It is important to create disparity through positioning, core values and enhancing the ‘perceived value’ in minds and hearts of consumers.

Companies may launch a new brand or a variant at a low, medium or high ‘perceived value point’. This is consciously done to focus on a given segment.


It would be prudent to have various brands or variants in the portfolio, allowing the consumer to choose which segment they would like to participate in.


Pricing Strategies

From brand equity perspective, it is important that consumers find the price of the band appropriate and reasonable;

Different kinds of price perceptions that consumers mightform and different pricing strategies that a firm may adopt leads to desired brand equity.

Pricing strategy can dictate how consumers categorize the price of a brand as low, medium or high priced

There could be various price tiers which are acceptable tothe consumers


Excellent

Very Good

Good

Fair

Specialty

Commodity

Price


Within any price tier there is a range of acceptable pricesa customer may pay; these are called PRICE BANDS

PRICE BANDS provide managers with some indication ofthe flexibility and breadth they can adopt in pricing their brands within a particular price tier.

In many product categories consumers may infer qualityof a product on the basis of its price.

Companies have adopted VALUE BASED PRICING STRATEGIES- attempting to sell the right product atright price.


The objective of value pricing is to uncover the right blend of;

product quality, product cost product price,

These fully satisfy the needs and wants of the consumersand the profit targets of a firm.

An effective value pricing strategy should strike the properbalance among

Product design and delivery

Product costs

Product prices


Proponents of value pricing point out that the concept does not mean selling stripped-down versions of productat lower prices but

Consumers are willing to pay premiums when they perceive added value in products and services

The product costs can be lowered for a successful value-pricing strategy

Cost savings could be achieved through

Productivity gains, Outsourcing Material Substitution

Product Reformulation Process changes,


Contemporary Pricing Strategy- Everyday Low Pricing

An Every Day Low Pricing (EDLP) strategy is more popular with shoppers, than one driven purely by promotions.

Advantages

Reduces price wars

Reduces advertising

Improves customer service

Increases overall profit margins

Companies charge a constant low price with no temporary discounts

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Predatory Pricing: Selling at unreasonably low prices to lessen competition.

Price Discrimination: The use of different prices for different customers.

It is illegal if a price advantage is granted to one, but not another, where both compete and the articles are similar.

Granting promotional allowances must be done on a proportionate basis to all customers.

Pricing Strategy Improvement

1. Base pricing strategies on sound research in order to understand relevant price factors.

2. Continuously monitor pricing decisions because they often help define company image.

3. Remember that consumers have trouble recognizing subtle price differences.

4. Remember that consumers evaluate prices comparatively. They often use a sense of what they think the item should cost as a benchmark.

5. Recognize that buyers typically have a range of acceptable prices defined by upper and lower limits.

6. Understand the importance of relative price to buyers – the relationship between a price and your competitors’ price.

7. Understand the importance of price information and its effects on differentiating products within a product line.

8. Recognize that price elasticity vary – it is easier to lose customers to price increases then gain them from price decreases.


Branding Strategies


A branding strategy can be seen as both DEPTH and BREADTH of the company offerings.

A branding strategy can be seen both as deep and broad if the firm has large number of brands;

Many of which have extended to various product categories

The Offering Mix The Offering Mix (Portfolio)(Portfolio)

Each line consists of individual offers or items (product line depth)

The totality of a company’s offerings is known as its product or service offering mix or portfolio

• Consists of distinct offering lines (product line width)

The Offering PortfolioThe Offering Portfolio

Bundling – enhancing the offering mix by providing two or more product or service items as a “package deal”

McDonald’s “value meal”

IBM hardware, software, and

maintenance contracts

Line Extension Strategy

Line Extension Strategy

Brand Extension Strategy

Brand Extension Strategy

New Brand Strategy

New Brand Strategy

Fighting/Flanker Brand Strategy

Fighting/Flanker Brand Strategy

ExistingExistingproductsproducts

NewNewproductsproducts

New New BrandBrand

Existing Existing BrandBrand

Brand extension

1 2 ….. N

A

B

Brand

Product-Brand Relationship

Product categories (Brand –Product Relationships)

LINE EXTENSION

CATEGORY EXTENSION

Rows : Number and nature of products sold under a company’s Brands

Columns : Number and nature of brands marketed in each category.

LINE EXTENSIONS BRAND EXTENSIONS

HorizontalExtension

VerticalExtension

AnotherProductClass

RangeBrand

Co-Branding

Up fromCore

Brand

Down fromCore

Brand

Adding offerings with the same brand in a product

class that an organization currently serves…

Respond to customers’ desire for variety

Eliminate gaps in the product line

Lowers advertising and promotion costs

Consider possibilities of product cannibalism and

proliferation of offerings (Coke and Vanilla Coke)

Adding offerings with the same brand in a product

class that an organization currently serves…

Respond to customers’ desire for variety

Eliminate gaps in the product line

Lowers advertising and promotion costs

Consider possibilities of product cannibalism and

proliferation of offerings (Coke and Vanilla Coke)

Line Extension StrategyLine Extension Strategy

The practice of using a current brand name to enter a completely different product class

Reduced risk due to brand equity

Success depends on perceptual fit with the original product class

e.g., Yamaha makes motorcycles, sound equipment, computer peripherals, and musical instruments

Brand Extension StrategyBrand Extension Strategy

Five Stages Model of Brand Extension Strategy

Five Stages Model of Brand Extension Strategy

The process requires a lot of decisions at the top and managerial levels for the sustainability of the brand and of course for greater returns.

Planning: comprises of comprehensive R&D, where customer’s needs are tested and their tastes and preferences being investigated thoroughly and bringing in the right product in the market.


Positioning: requires the recognition to touch the heartsand minds of the targeted group which creates BrandLoyalty and in turn Brand preference i.e. consumerreliance on previous experiences with a product to choosethat product again.

Sustainability of the brand as per its importance andimpact on ROI would require the brand mangers to checkthe pulse of the market regularly to see if it’s giving thesame kind of quality and benefits consumers wanted.


Building a value fit with what consumers’ perceptionsAnd expectations are and meeting them by creating aUnique value for them.

Brand equity is the most important as everything beingdone from step A to last one would revolve around thefinancial stability of the brand and the financial value it had in the market as compare to its rivals.

Co-branding

Pairing two brand names of two manufacturers on a single product

Co-branding

Pairing two brand names of two manufacturers on a single product

Brand Extension Strategy: Co-brandingBrand Extension Strategy: Co-branding

Flanker Brand Strategy

Involves adding a new brand on the high or low end of a product line based on a price-quality continuum

Fighting Brand Strategy

Involves adding a new brand whose sole purpose is to confront competitive brands in a product class being served by an organization.

Flanker Brand Strategy

Involves adding a new brand on the high or low end of a product line based on a price-quality continuum

Fighting Brand Strategy

Involves adding a new brand whose sole purpose is to confront competitive brands in a product class being served by an organization.

Flanker/Fighting Brand StrategyFlanker/Fighting Brand Strategy


Cash Cows:

Some brands may be kept in-spite of dwindling sales because;

They still manage to hold sufficient number of customers and maintain their profitability with virtually no marketingsupport.

Low- End Entry level of High- End Prestige Brands:

Introducing line extensions or brand variants in a product category that vary in price and quality.


These extensions / sub-brands leverage associations from parent / other brands while distinguishing themselves on the basis of their price and quality dimensions.

The end points of the brand line often play a specializedrole.

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Most challenging strategy

Most costly

e.g., Lexus by Toyota

Involves the development of a new brand

and often a new offering for a product

class that has not been previously

served by the organization.

New Brand StrategyNew Brand Strategy


Managing the brand Over the Time

Brand equity must be actively managed over time by

Reinforcing the brand meaning and adjusting the marketing programs to identify new sources of Brand Equity.

Managing the brand with consistency in amount and nature of support.

Being consistent in managing brand equity may require numerous tactical shifts and changes in order to maintainthe strategic thrust and direction of the brand


The tactics may be most effective for a particular brand at any one time can not be as effective during the other

Over the time :

Price may move up or down

Product features may be added or dropped

Ad campaigns may employ different creative strategies and slogans

Different brand extensions may be introduced or withdrawn


The mentioned changes may take place in order to create the same desired knowledge structures in customer’s mind.

Consistency should be viewed in terms of strategic direction and not necessarily any particular tactics employed by the supporting marketing programs.

In certain cases there are changes in:

Consumers, competition or the company that makes the strategic positioning of the brand less powerful.


Revitalizing the Brand

A major overhaul of a brand, starting with its positioning and proceeding through creative regeneration of the brand identity

A brand revitalization program is involving strategies to recapture lost sources of brand equity and;

Ways to identify and establishing new sources of brand equity for the brand or the brand portfolio.

Brands sometimes have to return to their roots to recapture lost sources of equity


By surveying consumers who have long-term relationships with older brands, the following data can be mined:

What are the points of differentiation, or unique selling proposition of the brand, per their perception?

What are the brand’s Enjoyment assets?

How many pleasant associations and experiences consumers have had with the brand?

What are the negatives, if any, associated with the brand?


What is the perceived value of the brand?

Is the perceived value of the brand still active, or is it dormant?

How relevant is the brand?

What, in the consumers’ perception, can the brand do for them to add value or more desirable attributes?

How much loyalty is there to the brand?


Brands are most likely to respond to Revitalization efforts

That have clear and relevant values that have been left dormant for a long time.

Have not been well expressed in the marketing and communication recently

Have violated by product problems


1. Refocus Entire Organization

2. Restore Brand’s Relevance

3. Reinvent Brand Experience

4. Rebuild Brand Trust

5. Realize Global Alignment

Revitalizing the Brand Involves


Revitalization Strategies involve a continuum with

PURE BACK TO BASIC at one end to PURE REINVENTon the other

The trick is to place the brand in the center. The “10-80-10” rule of focus can be useful :

Acknowledge your heritage (10%)

Address the needs of today (80%)

Look forward to the future (10%)


Identifying Additional or New Usage opportunities

Brand may be seen as useful only in certain times andAt certain times.

True in cases if a brand has strong associations to particular usage situations.

Marketing programs can be aligned and designed to increase additional or new usage opportunities by:

Communicating to consumers as to the appropriatenessand advantages of using the brand more frequently in existing situations or in new situations


Another way to increase usage is to provide consumers with better information about ;

When the product was first used or would need to be replaced, or;

The current level of product performance.


Brand Revitalization Strategies

Refresh old sources of brand equity

Create new sources of brand equity

Expand depth and breadth of awareness and usage of brand

Improve strength, favorability and

uniqueness of brand associations

Increase quantity of consumption(how much)

Increase frequency of consumption (how often)

Bolster fading

associations

Neutralize negative

associations

Create New Associations


Bolster fading

associations

Neutralize negative

associations

Create New Associations

Increase quantity of consumption(how much)

Increase frequency of consumption (how often)

Identify additional opportunities to use brand in same basic way

Identify completely new and different ways to use brand

• Retain vulnerable customers

• Recapture lost customers

• Identify neglected segments

• Attract new customers

Measuring Brand EquityMulti-dimensional concept

Many different measures required

The ultimate value of a brand depends on the underlying components of brand knowledge and sources of brand equity

Comparative Methods

Brand-based comparative approaches

Marketing-based comparative approaches

Conjoint analysis

Brand-Based ApproachesThe marketing element under consideration is fixed.

Consumer response is examined based on changes in brand identification.

Application example: Blind testing

Advantage: Isolates the value of the brand

Disadvantage: The totality of what is learned depends on how many applications are examined.

Marketing-Based ApproachesThe brand is held fixed and consumer response is

examined based on changes in marketing programs.

Applications: Explore price premiums’ effect on switching, consumer evaluations of marketing activities, brand extensions, etc.

Advantage: Ease of implementation

Disadvantage: Difficult to determine whether consumer responses are caused by brand knowledge or generic product knowledge

Conjoint AnalysisA survey-based multivariate technique that enables

marketers to profile the consumer decision process with respect to products and brands

Helps researchers determine the trade-offs consumers make between brand attributes

Applications: Assess advertising effectiveness and brand value; analyze brand/price trade-off

Advantage: Allows for different brands or different aspects of the product to be analyzed simultaneously

Disadvantage: May violate consumers’ expectations based on what they already know about brands

Holistic MethodsAttempt to place an overall value on the brand

in either abstract utility terms or concrete financial terms

Net out various considerations to determine the unique contribution of the brand

Holistic methods:Residual approachesValuation approaches

Free Association Here 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: What does the Rolex name mean to you? What comes into mind when you think of Rolex watches.

Free association can also provide some rough indication of the relative strength, favorability, and uniqueness of brand associations.

Free Association To better understand the favorability and uniqueness of the associations, one could ask follow-up questions:

“What do you like best about Rolex? “What are its positive aspects?” “What do you dislike?” “What are its disadvantages?”“What do you find unique about the Rolex brand?” “How is it different from other brands? In what ways is it the same?”

Free Association

LEVI’S

High quality, long lasting, and durable

Blue denim, shrink-to-fit cotton fabric, button-fly,

two-horse patch, and small red pocket tag

Feelings of self-confidenceand self-assurance

Comfortable fittingand relaxing to wear

Honest, classic,Contemporary, approachable,independent, and universal

Appropriate for outdoorwork and casual social

situations

Western, American, blue collar, hard-working,

traditional, strong, rugged, and masculine

BENEFITS

ATTRIBUTES

Symbolic

Usage ImageryUser Imagery

Brand Personality

Functional

Product-Related

Experiential

Projective Techniques

Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express them.

Under some situations, consumers may feel that it would be socially unacceptable or undesirable to express their true feelings: e.g. unwilling to say a brand enhances self-esteem.


Comparison Tasks:: Here we ask consumers to convey their impressions by comparing brands to people, countries, animals, activities, fabrics, occupations, cars, magazines, vegetables, nationalities, or even other brands. Completion and Interpretation Tasks: This technique

uses incomplete or ambiguous stimuli to gauge consumer thoughts and feelings. One approach is “bubble exercises” which show people buying or using certain products or services. Respondents are asked to fill in the empty bubbles.

Brand Personality and Values Brand personality is the human characteristics or traits that consumers can attribute to a brand. Jennifer Aaker created a brand personality

scale that reflected the following five factors of brand personality:

Sincerity (down-to-earth, wholesome, and cheerful)Excitement (daring, spirited, imaginative, and up-to-date)Competence (reliable, intelligent, and successful)Sophistication (upper class and charming)Ruggedness (outdoor and tough)

Quantitative Research TechniquesAlthough qualitative measures are useful to identify the range of possible associations to a brand and their characteristics in terms of strength, favorability, and uniqueness, marketers often want a more definitive portrait of the brand to allow them to make more confident decisions.Quantitative research typically employs various types of scaled questions from which researchers can draw numerical summaries: Brand Awareness Aided or Unaided Recall Brand Image Beliefs or perceptual mapping Brand Responses Purchase Intentions Brand Relationships Behavioural Loyalty

Qualitative methods allow marketers to probe consumers either through direct questions or through tasks that indirectly reveal perceptions and attitudes.

Quantitative methods, which typically use numerical rating scales or rankings, include measures of recognition, aided and unaided recall, beliefs, attitudes, intentions and behaviors toward the brand .

To measure sources of brand equity, we must understand two key areas: how consumers shop for and use products and services, and what consumers know, think, and feel about various brands.


Both methods enable marketers to construct “mental maps” that model consumers’ feelings, beliefs, and attitudes regarding a brand.

Residual ApproachesExamine the value of the brand by subtracting

consumers’ preferences based on physical product attributes alone from their overall brand preferences

Advantage: Useful benchmark for interpreting brand equity, especially from a financially oriented perspective

Disadvantage: Static view. Limited diagnostic value for strategic decision making

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Valuation ApproachesAttempt to place a financial value on brand

equity for accounting purposes

Useful in cases of mergers and acquisitions, brand licensing, fund raising, and brand management decisions

Valuation approaches:Accounting backgroundHistorical perspectivesGeneral approachesInterbrand’s brand valuation methodology

Accounting BackgroundIntangible assets are typically lumped under

the heading of goodwill and include things such as patents, trademarks, and licensing agreements, as well as “softer” considerations such as the skill of the management and customer relations.

In an acquisition, the goodwill item often includes a premium paid to gain control, which, in certain instances, may even exceed the value of tangible and intangible assets.

Historical PerspectivesIn Australia Rupert Murdoch’s News Corporation

included a valuation of some of its magazines on its balance sheets in 1984.

British firms used brand values primarily to boost their balance sheets.

In the United States, generally accepted accounting principles (blanket amortization principles) mean that placing a brand on the balance sheet would require amortization of that asset for up to 40 years. Such a charge would severely hamper firm profitability; as a result, firms avoid such accounting maneuvers.

General ApproachesIn determining the value of a brand in an

acquisition or merger, firms can choose from three main approaches:Cost approach: Brand equity is the amount of money that

would be required to reproduce or replace the brand

Market approach: The present value of the future economic benefits to be derived by the owner of the asset

Income approach: The discounted future cash flow from the future earnings stream for the brand

Interbrand’s Brand ValuationAssumes that brand value is the present worth of the

benefits of future ownership

Follows five valuation steps: Market segmentation Financial (role of branding) analysis Demand (brand strength) analysis Competitive benchmarking Brand value calculation

Brand value calculation : Calculate the brand value as the net present value (NPV) of the forecast brand earnings, discounted by the brand discount rate

Brand leadership – the evolving paradigm

Classic brand management Brand leadershipFrom tactical to strategic management

PERSPECTIVE

Tactical and reactive

Strategic and visionary

BRAND MANAGER STATUS

Less experienced,shorter time horizon

Higher in the organization,longer time horizon

CONCEPTUAL MODEL

Brand image Brand equity

FOCUS Short-term financials

Brand equity measures

Brand leadership – the evolving paradigm

Classic brand management Brand leadershipFrom tactical to strategic management

PRODUCT-MARKET SCOPE

Tactical and Single products and markets reactive

Multiple productsand markets

NUMBER OF BRANDS

Focus on single brands

Category focus –multiple brands

COUNTRY SCOPE Single country Global perspective

COMMUNICATION FOCUS

External/customerInternal as well as external