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Presented By:Barun Singh BasnetKhusboo VermaSudha LuitelStrategic Brand ManagementChapter 5- Designing Marketing Programs to Build Brand EquityGroup 2Traditional mixRevenue generating element

In this section:Price perception that consumers might formPricing strategies firm might adopt for brand equityPricing StrategyCategorization of price of brand by consumersPrice bands: Range of acceptable price within price tiers.Value-based pricing strategiesOpportunity costConsumer Price PerceptionA method for setting current prices= Value PricingA policy for choosing the depth and duration of promotions and discounts.= Everyday-low-pricing

Setting prices to build brand equityThe key components:Product design and deliveryProduct costsProduct prices

Eg: Southwest Airlines, Walmart, MarlboroValue Pricing Strategy

Product design and deliveryConsumers pay premiums to value-added product and services.Strong brand differentiation have led to price premiums.Eg: P&Gs most expensive Gillette razor. i.e. innovative product with strong marketing support.Amazon.comLower cost as much as possible.Outsourcing, Material substitution, Product reformulation, Product changesConsidering your overhead, look if your customer really willing to pay?Product CostsStraightforward approach to know the consumers perception is to ask them.Price according to perceived value of the product.Eg:H.J. Heinz (Cat food- four cans for a dollar)Product PricesConsumers need to know and understand brand value.In some cases, values are clear and obvious.For unclear cases, Communicate in straightforward approachFrame and convince customer (Eg: P&G)Communicating ValueDifferent price for different value perceptionYield ManagementEg: Starbucks, Apple, Airlines.Price SegmentationMeans of determining price discounts and promotion over time.Eg: P&GEveryday Low Pricing (EDLP)On supply-side:Forward buying by retailersDiverting the selling areaOn demand side:Diminished brand equityReasons for Price StabilityChannel StrategySet of interdependent organizations involved in the process of making product or service available for use or consumption.Channel strategy includes design and management of intermediariesWholesaler, distributors, brokers and retailers.Marketing ChannelsDirect ChannelIndirect Channel

Winning strategies; Combination of physical store, Internet, Phone and CatalogsEg: NikeChannel Design

Information (learning about brand)Entertainment (means by which channel permits purchase)Experiences (participation in channel activities)

Eg: Wrong Channel Strategy; What are the key factors in channel from consumer viewpoint??

RetailersMost visible and direct contact with customers.Creates own brand equityEstablishes strong awareness on brand association.Indirect ChannelsShopper marketing:Collaboration between manufacturers and retailers for in-store marketingDisplays, Sampling promotion & so on.Eg: VLASICPush and Pull Strategies

Push Strategy: Devoting channel members to stock and sell products.Pull Strategy: Devoting marketing efforts to end consumersContd..Educate the distributors about product as to create effective sales force among the retail partners.Offer dealer exclusive access to new products or branded variantsChannel SupportRetail Segmentation (SC Johnson leveraged customized market research insights to develop unique category management solutions to its strategic retail customers.)Brand variants : Different product mixes, delivery systems for different retailers.Cooperative Advertising Advertising cost on percentage basis usually 50-50Co-op ad continue to strike balance between the brand and store at same time.Components of partnership strategiesCompany-Owned stores(Eg: Apple, Goodyear, Hallmark)Pop-up stores- temporary store that blends retail and event marketing.

Advantage:Disadvantage:Showcase of brandOperating as retailerDirect customer responsePotential conflict with distributors.Direct Channels2. Store-within-a-storeStore within major department storeBranded mini-stores existsDual benefits of retailers brand image and having control of manufacture over design and product presentation.

Direct Channels(Contd..)3. Other meansCatalog storesElectronic meansPhoneMailDirect Channels(Contd..)Integrated channels allow consumers to shop when and how they want.Manufacturer with multiple channels are benefitted.They gain market power with suppliers.They have established distribution and fulfillment systems.They can cross-sell between websites and stores.Online StrategiesProduct is heart of brand equity.To build brand equity, marketers must determine price and adjust them over short and long run which further reflects consumer perception of value.Channel strategy includes designing and managing various channels to build brand awareness and improve brand image.In NutshellThank You