Final Examination

Answer Script
Semester: Spring 2020

Name: Md Atikur Rahman

ID: 2019210004111
Section: 1
Program: Master of Business Administration (1 Year)
Batch: 34
Course Code: MKT670
Course Title: Brand Management
Submission Date: 05-06-2020
Full Marks: 40
Question: Describe the pricing strategy for brand marketing with
real life examples.
Answer: Here are some pricing strategies you can use to sell your products in a competitive
market and still make profits.

Premium pricing: Premium pricing, also called image pricing or prestige pricing, is a pricing
strategy of marking the price of the product higher than the industry standards/competitors’
products.

Example: Branded unleaded petrol is sold at a higher price than regular unleaded petrol. The
consumer never gets to test if the branded is better, yet he buys the branded offering thinking if
it’s expensive, it must be better.

Penetration Pricing: Penetration pricing is a pricing strategy where the price of the product is
initially kept lower than the competitors’ products to gain most of the market share and to trigger
word of mouth marketing.

Example: Oneplus launched its flagship product Oneplus 1, which had all the features of an
iPhone, at a highly affordable price of $299. Once the company acquired a good market share, it
started launching its products at a premium. The recent phones from Oneplus are priced in the
range of $500-$700.

Price Skimming: Price skimming is a strategy of setting a relatively high introductory price of
the product when the product is new and unique and the market has fewer competitors. The idea
is to maximize the profits on early adopters before competitors enter the market and make the
product more price sensitive.
Example: Smartphones (both iPhones and Android) are introduced in the market at a higher
price, but the price is reduced as the time passes.

Psychological Pricing: Psychological pricing refers to the psychological pricing strategies

marketers use to make customers buy the products, triggered by emotions rather than logic. Such
strategies come in the form of:

Charm Pricing: This involves reducing the price by a minimal amount (say 1 cent)

which makes the customer perceive the price to be less. For example – the price of a $3 product
is set as $2.99 in supermarkets as customers’ brains process $2.99 to be nearer to

$2 and not $3.

Prestige Pricing: This involves rounding off and setting a higher price for premium and exclusive
products as rounded figures are easily processed and are preferred in such cases.

Bundle Pricing Bundle pricing involves selling packages or set of goods or services at lower
prices than they would have actually cost if sold separately. This is an effective strategy to
bundle unsold products or products with less demand with the high selling products to clear up
the shelf space and to increase the profits.

Example: Mcdonald’s happy meal is a perfect example of bundle pricing.

Freemium Freemium is an Internet-based pricing strategy where basic services are provided free
of charge but charges are levied on additional premium features. The freemium strategy is
different from premium with free samples strategy as you don’t pay anything to utilize the free
services provided under the freemium business model.

Example Candy Crush Saga is a great example of freemium pricing strategy where the game is
provided for free but a price is levied if you want more lives to play.

price of a product is given to the buyers, who pay their desired amounts for a product, which
could even be zero.

Example: Panera Bread Co. restaurant in the St. Louis is a famous example of a business
operating successfully using the pay-what-you-want pricing strategy.

Predatory Pricing Predatory pricing, or below the cost pricing, is an aggressive pricing strategy
of setting the prices low to a point where the offering is not even profitable, just in an attempt to
eliminate the competition and get the most market share.

Example A perfect example of a company adopting a predatory pricing strategy is Amazon

which, in 2013, offered books at a price less than the cost price and even shipped it for free just
to win over the traditional brick-and-mortar competitors.

Dynamic Pricing: Dynamic pricing, also called demand pricing, is a comparatively new pricing
strategy which charges different prices of the same item from different users depending upon
their perceived ability to pay.
Example: Ecommerce websites like Amazon, Flipkart, etc. use this strategy to remarket their
products to the window shoppers.

Question: Why there is a need for new perspective of marketing in

the twenty-first-century? What are the six steps in choosing naming
procedures for a brand? Explain briefly.

Answer:
Brand Naming

How the consumer sees and interacts with your brand often starts with its name. It’s the one
ingredient that will remain constant throughout a brand’s life cycle. When designing a brand
name you will need to build strong identification with the true purpose of the brand promise.

us to re-name a company or a brand to include the trademarks that set a company’s signature
products and services apart. The distinguishing factor often starts with the product’s unique
name.

There are six main steps that we recommend to guide your brand naming process.

1: Strategic Criteria

Of all the steps, this first one is probably the most critical because if you start out in the wrong
direction you will never get there! To decide what type of brand name you need, start by looking
at what your big product idea is all about. Is it a consumer consumable? A technical product? A
general information service for a niche market? Once you determine what the product is going to
do for its customers, write out what the strategy will be in formulating its name. Here’s the
Strategic Criteria that we used when choosing Market Cues as our corporate name.
2: Naming Alternatives

This is often the fun part: coming up with a large number of names that may or may not be used,
but allow you to express all of the thoughts you’ve had about naming your product. Because
there are millions of commercially used names, and since they are legally protected; you need a
long list to choose from that meets your specific strategic criteria.

3: Image Associations

Although tempting, it is never advisable to use “borrowed interest” when naming your brand.
Associations with famous people or leading brand names are usually not advisable. Neither is
trying to allude to another brand name or alter a name to disguise it from the original. For one
you may end up in court trying to defend a weakly veiled name and for another, borrowing does
not let your brand fulfill its true mission. Instead, try grouping the candidate names according to
what makes them unique and determine what type of imagery seems appropriate to begin
building awareness of the brand.

4: Availability Check

This next step may seem obvious but it is often overlooked. Why register your name? The
biggest reason is to protect what may become a very successful enterprise from worry that its
ownership will end up as some other company’s property because they registered the name
before you did! Unfortunately, this happens more than you may think and the legal process of
litigation is never enjoyable, and is always expensive.

5: Sanity Check

After you decide upon your “short list” of potential names, put them through a filter to search for
potential embarrassments. One controversial name is Apple’s new iPhone. The trademark is
actually owned by Cisco and a company called Nuvio owns the URL, and who knows who they
are? If you have a fantastic brand, then let the entire world see it – if you have 100% ownership
of that brand, prove it with a unique name. Rolex and PlayStation are 100% owned, and
regardless of where you go their brand name identity remains intact.
6: Review Board

The last step, The Review Board, can take many forms. You can conduct ‘Qualitative Research’
using a series of small groups controlled by a researcher, where the name and image impressions
are sought and discussed. This evaluation will guarantee an objective means of review.

Question: How do you characterize their efforts to reinforce or

revitalize brand equity?

Answer:

Brand can be a major contributor to investor value, working as a lever companies can pull to
drive or maintain value. Brand is a multiplier in every business, no matter what the category.

However, brand revitalization can be a daunting prospect. What does it entail? How do you
ensure the greatest potential for success? How do you prepare the organization to activate on the
new brand direction?

Below there are some factors for initiating, managing and, ultimately, activating a brand
revitalization initiative.

Instill an imperative for change

Organizations, by nature, play it safe — “Do what we’ve been doing, only better, cheaper,
faster” — approaching transformation as a gradual endeavor. The alternative is too scary, too
risky.

However, successful brand revitalization can’t be done incrementally. The status quo must be
rejected, existing beliefs challenged, and the unknown and uncomfortable embraced.

Own a mindset and create a sense of intimacy

The most powerful brands don’t appeal to a gender, generation or income bracket. They own a
mindset and create such a deep and intimate understanding of that mindset that their customers
feel as if they are in a relationship rather than merely buying a product or service.

Thinking about products and services. Consumers are people first, with goals and dreams, beliefs
and attitudes, and successes and struggles.

To revitalize your brand, you must determine how it can help people (even to the smallest
degree) pursue their goals, achieve their dreams and alleviate their struggles.

Aspire to indispensability

We’ve all seen the stats. Consumers are becoming increasingly indifferent to the vast majority of
brands. They give little consideration to brands and aren’t concerned if most simply vanish
tomorrow.

In full disclosure, no brand is literally indispensable to someone’s life, and consumers will go on
living even if their most cherished brand vanishes. However, a select group of brands have
created the illusion of indispensability and, thus, impacted the vocabulary with which consumers
refer to them. For example, “I can’t live without my morning Starbucks,” “How would I get
through a day without my iPhone?” or “What would I do without Netflix?”

As brands consider revitalization, brand managers need to figure out how to become as
indispensable as possible within the lives of the people who share their mindset.
Think as one — act as one

Actions matter more than strategy. While it’s tough for great execution to prop up a poor
strategy, it’s quite easy for bad execution to undermine a brilliant strategy. And, the worst kind
of execution is inconsistent and unfocused, making a brand appear schizophrenic.

Any brand revitalization effort incorporates those responsible for execution into the process not
merely as recipients of the final direction, but as active co-creators. Having those people along
for the journey will help ensure the “buy in” on the final direction. In addition, facilitating a
cross-functional activation session at the culmination of the strategic process.

Nurture your brand

Brands are living things. They shouldn’t be created in a vacuum and they certainly don’t live in a
vacuum. They exist in a dynamic, ever-changing marketplace — with evolving consumer wants
and needs, ever-increasing innovation, and shifting (often increasing) corporate expectations. As
such, brands must learn, grow and adapt. Is the imperative for change different? Has the
identified mindset shifted? Must the route to indispensability be re- evaluated? Is the execution
having the desired impact?

Brand revitalization is a never-ending process and your brand needs to be nurtured continually.
By following these steps, you’ll be on your way to revitalizing your brand and keeping it fresh.
Question: How “Intel inside Program” reinforced its brand over
time?

Answer:
Reinforcing Brands:

The advantage of creating a brand with a high level of awareness and a positive brand image is
that many benefits may accrue to the firm in terms of cost savings and revenue opportunities.
Marketing programs can be designed that primarily attempt to capitalize on or perhaps even
maximize these benefits - for example, by reducing advertising expenses, seeking increasingly
higher price premiums, or introducing numerous brand extensions. The more that there is an
attempt to realize or capitalize on brand equity benefits, however, the more likely it is that the
brand and its sources of equity may become neglected and perhaps diminished in the process. In
other words, marketing actions that attempt to leverage the

As we have discussed before, questions marketers should consider are as follows:

•What products does the brand represent, what benefits does it supply, and what needs does it
satisfy? Nutri-Grain has expanded from cereals into granola bars and other products, cementing
its reputation as “makers of healthy breakfast and snack foods.

•How does the brand make those products superior? What strong, favorable, and unique brand
Associations exist in the minds of consumers? Through product development and the successful
Introduction of brand extensions, Black & Decker is now seen as offering “innovative designs”
In its small appliance products.
Although brands should always look for potentially powerful new sources of brand equity, a top
priority is to preserve and defend those that already exist, as illustrated by this classic episode
with Intel. INTEL While the launch of the “Intel Inside” program in the early 1990s is a classic
example of how to successfully introduce an ingredient brand, Intel did also encounter a public
relations disaster with the “floating decimal” problem found by a Virginia researcher in its
Pentium microprocessors in 1994. Although a flaw in the chip at the time resulted in
miscalculations only in extremely unusual and exceedingly rare.

Instances, once the problem became public, Intel endured an agonizing six-week period as the
focus of media scrutiny and criticism. Intel was probably at fault—as company executives later
admitted—for not telling consumers and proposing remedies more quickly. Two key sources of
brand equity for Intel microprocessors like the Pentium—emphasized throughout the company’s
marketing program—are “power” and “safety.” Although consumers primarily thought of safety
in terms of upgradability, the potential for financial risk or other problems from a flawed chip
certainly should have created a sense of urgency within Intel to protect one of its prize sources of
brand equity.

Eventually, Intel capitulated and offered a replacement chip. Perhaps not surprisingly, only a
very small percentage of consumers (an estimated 1–3 percent) actually requested it, suggesting
that it was Intel’s stubbornness to act and not the defect per se that rankled many consumers.
Although it was a painful episode, Intel maintains it learned a lot about how to manage its brand
in the process.