Building Brands

Brand Equity

• Brand Equity is defined as:– Financial “asset value” of a brand – Derived from goodwill and loyalty it has

built among customers– Has high awareness and perceived quality– Better imagery and personality associations

Brand Equity• High Brand Equity brands

• Can extract higher prices

• Customers repurchase the brands more often than they should

• Have loyal customer bases

• Preference and loyalty higher• Not because the product is functionally superior

• But consumer perceptions of the brand is better

Brand Equity

• The associations of the brand in the consumers mind create– An intimacy and loyalty towards the brand.

• The associations do not vary much across segments

• The role of marketing is to • Build awareness to communicate high quality

• Create or modify product associations

• Build higher loyalty

• Direct marketing useful for building brand equity when target segment is

• Narrower, and

• Difficult to reach

Building Quality Reputation through Direct Marketing

• Communicating Quality– Detailed claims about product features and benefits– Stronger communications about why a product is

superior– Can provide customized messages to different

customers– Maximize the perceived degree or value and quality

communicated

Building Quality Reputation through Direct Marketing

• Achieving Credibility– Understand and refute customer objections– Cite testimonials from satisfied customers– Offer guarantee for satisfaction

• Frequency of post sale contact– Lower follow up costs to monitor and improve

customer satisfaction

Building Associations

• Communications should be designed to– Convey product information– Overcome consumer inertia to buy– Build the linkage between the brand, and its

symbols that possess “cultural meaning”• Loyalty

– Two types: behavioral and attitudinal– Attitudinal better for building brand loyalty

Customer Service and Database Marketing

Customer Service Department

• Historically functioned as complaint center.

• Today technology has allowed order processing and

next day shipment.

• Companies who do not meet baseline service standards

cannot survive.

• Service focus has shifted from product focused to

customer focused.

Customer Service Department

• Customer service is the primary channel of contact between both prospects and customers

• Responses given by Customer Service Representatives are critical for maintaining and building relationships.

• Proper service provides opportunities for cross-selling, affinity selling, and upselling.

• Most overlooked aspect- easy data collection.

Information Needed by Customer Service

• Basic Name, address information about the customer

• Company to customer communications • Bills, shipments, and promotions

• Customer to company transactions• Payments, returns, and complaints

• Details about products, services, policies, and procedures.

• The information needs to be timely, accurate and complete.

Marketing Information

• Two types of information collected:• Static and Dynamic

• Static Information– Basically Name, address information– Primary use is for mass mailings– Customer service can be used to fill in any

missing customer details

Dynamic Marketing Information

• Information regarding expected and unexpected event.

• Expected event– Initiator could be company or customer.– Example: response from a customer regarding a

promotion, or bill– Historical information regarding customer

events needs to considered when contacting a customer

Dynamic Marketing Information

• Unexpected events– Example: customer complaints, returns or inquiries.

• Current systems provide only summary information as to whether the contact was an order or complaint.

• Systems need to capture information at a better detail.• Information requirements:

• initial mode of contact, • whether the problem was resolved or not, and • how it was resolved

• Integration between all modes of communication required.

Survey Data

• Survey data normally collected by market research firms.

• Only summary data maintained.• The detailed data regarding specific responses is

also useful for database marketing.• Customer service can:

• Obtain survey data when customer initiates contact

• Use historic survey data to initiate contact with customers in a timely fashion

Issues with survey data

• Surveys sent to only a sample of customers.• Only a percentage of the original sample

respond.• Detailed information available only for a

small percentage of the total customer base.• Initial database design required to integrate

survey data with marketing data already existing.

Information Required for Customer Service

• Service representatives require information about individual customers when initiating dialogs.

• Information provided by the marketing database includes• Whether the customer is a gold/platinum member.• Product/services customer should be made aware of.• Information the representative can collect from a particular

customer.

• The representative is in closest contact with the customer.• Canned or broadcast oriented messages do not work here

Customer Service on the Internet

• Historically web sites gave out only 800 numbers.

• Currently web sites are more dynamic and provide:

• Product support and FAQs• Provisions for complaint e-mails• Separate corporate intranet access for dedicated

customer service

Customer Service on the Internet

• Pros:– Cost effective– Better reach – Faster service

• Cons:– Restricted currently to GenX– Internet has a Pull strategy Vs. Push strategy of

traditional direct marketing– Capabilities restricted by customers’ computers

Customer Service on the Internet

• Future:– Common web sites serving both customers and

service representatives– Access to information for customers restricted

through intranets– Customer service representatives can have

updated information in real time.

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