Product

and Brand Management

The value offer - Product basics
(Class 2)

1. Products – physical features, attributes, utilities

Product components:
Feature – a specific physical characteristics (i.e., large snooze button).
Attribute – a general more abstract performance characteristic (i.e. ease of use)
Benefit – a perceived favorable result that is derived from the presence of a particular feature (i.e., a kinder
way to wake up).

The Value Proposition
The value proposition consists of the whole cluster of benefits the company promises to deliver

Linking Attributes to Values
Means-Ends Chain theory suggests that, for the customer, products are a means to reach a desired end state.
Different attributes of the product are therefore functional to obtaining different end states or values. To
discover the linkages between attributes and end states we may apply a technique called laddering
By doing so it is possible to uncover the Value hierarchy —> the overall system of linkages among attributes
and end states.

Means-Ends chain Theory
Customers choose products on the basis of their attributes, in order to reach their own desired goals, by
means of the benefits or consequences they bring about.
Ex: the attribute is localization, the consequence is time saving and the desired end state is
productivity.
Ex2: attributes of a car —> concrete attributes: price (Cognitive representation of physical
characteristic of product.); abstract attributes: luxurious (Abstract chunk for several more concrete
attributes. Subjective, not directly measurable); functional consequences: very comfortable
(Immediate tangible consequences of product use. What does it do? What functions does it
perform?); psychological consequences: others see me as special (Psychological (How do I feel?) and
social (How do others feel about me?) consequences of product use); instrumental values: being
center of attention (Preferred models of conduct (mine or others ’toward me), abstract conseq. of
product use); terminal values: self-esteem (Preferred end states of being, very abstract
consequences of product use).








Laddering Technique















Choice of organic products (ex. meat)
Organically produced meat (Attribute) —> Feel better when environmental friendly (Consequence) —>
Wish to do something good for the environment (Consequence) —> Concern about the environment
(Value)




Laddering and Value Hierarchy
Ex: Hybrid car

Hierarchical value map (car)

The Hierarchical Value Map is the
system of linkages among
attributes, consequences and end
states.





2. Product Value

Customers ’product evaluation
Products are bundles of utilities, based on the attributes of the “offer” (its tangible and service components,
the experiences provided with it).
• In their evaluations, customers assess the value of a product by judging its overall value, as a whole (affect-
based evaluation) or by taking into account its attributes (attribute-based evaluation).
• In attribute-based models, very often, customers take the expected value or Fishbein index.

Measures of customer’s value
1. Overall (synthetic) (Dodds) ex —> This X is a very good value for the money
• At the price shown this X is very economical.
• This is a good buy.
• The price shown for this X is unacceptable. (R)
This X appears to be a bargain.

2. By “value category” (Holbrook):
• Social value - Helps me to feel acceptable, Improves the way I am perceived, Makes a good
impression on others, Gives me social approval
• Play - Makes me feel good, Gives me pleasure, Gives me a sense of joy, Makes me feel delighted,
Gives me happiness
• Excellence - The quality is excellent, One of the best regarding quality, High quality product, Superior
compared to competing products.
• Aesthetic value – I think I look good by using this XXX, I think my teeth/skin is beautiful by using this
XXX, I think I have a fresh breath by using this XXX, I think I have a nice figure by drinking this XXX, I
think this XXX is beautiful, This XXX looks good in my interior, This XXX has a beautiful design, This
XXX has a beautiful color.
• Efficiency - The price is high (R), The effort I expend to receive XXX is high (R), This XXX is easy to use.
Starting up the XXX requires a lot of time (i.e., the time between turning on the XXX and the moment
the XXX starts) (R).

3. Multi-attribute or Multi-benefit (Dale, Woodruff and Gardial):
• To measure the value placed by customers in attributes and products, firms resort to subjective
perceptions of customers.
• The purpose is to measure the importance given to product’s attributes by customers and the utility
they associate to each of the attributes and to every different “levels” of each attribute.
• Calculation of the Fishbein index (compositional approach)
• Find the relevant attributes
• Measure the perceived importance of the attributes
• Measure the perceived performance for each of the attributes
• Compute an overall value index
—> ALTERNATIVE APPROACH – Conjoint analysis


Expected value model











Firms ’evaluation of customer value (additional method – willingness to pay)
Process of measuring the benefits derived from the use of a resource in monetary terms
• In an economy based on monetary exchange, the individual's willingness to pay a € amount tells us that
the amount paid is worth the sacrifice of the other things that could have been purchased with the money.
• Total willingness to pay (WTP) is the total amount an individual would be willing to pay for a particular
quantity (How likely you are to buy this smartphone, if it costs xxx$? and if it costs xxx$? ……………………….).


3. Hedonic and utilitarian attributes

Hedonic motivation
Behavior very often is not “goal-directed” and buying model is not functional or utilitarian (extrinsic
motivations); the approach instead is “hedonic” (intrinsic motivation).
1. Hedonic motives —> Seeking recreation or seeking pleasure.
2. Hedonic Shopping Motives:
• Adventure shopping —> shopping for stimulation, adventure, and the feeling of being in another world
(adventure, thrills, stimulation, excitement, and entering a different universe of exciting sights, smells,
and sounds).
• Social shopping —> enjoyment of shopping with friends and family, socializing while shopping, and
bonding with others while shopping.
• Gratification shopping —> shopping for stress relief, to alleviate a negative mood, as a special treat to
oneself.
• Idea shopping —> shopping to keep up with trends and new fashions, and to see new products and
innovations.
• Role shopping —> enjoyment that shoppers derive from shopping for others, the influence that this
activity has on the shoppers ’feelings and moods, and the excitement and intrinsic joy felt by shoppers
when finding the perfect gift for others.
• Value shopping —> shopping for sales, looking for discounts, and hunting for bargains.
3. Modes of Intrinsic Motivation – Sensory Pleasure, Aesthetic pleasure, Emotional Experience and fun and
play.



Hedonic and utilitarian attributes
Hedonic attributes – emotional, symbolic, and aesthetic attributes or benefits that are associated with an
alternative (ex: fun, exciting, enjoyable, not delightful, etc…)
Utilitarian attributes – functional or economic aspects associated with an alternative (ex: effective, helpful,
functional, etc…)

Impact of hedonic and utilitarian attributes
Exceeding utilitarian expectations leads to satisfaction (involving confidence and security – prevention
emotions)
Exceeding hedonic expectations leads to delight (involving cheerfulness and excitement – promotion
emotions). Stronger brands are perceived by customers to offer greater hedonic benefits than utilitarian
benefits. Weaker brands are perceived by customers to offer greater utilitarian benefits than hedonic
benefits. Consumers are ready to spend more time in choice of hedonic goods, while they are ready to spend
more for utilitarian goods.

4. Product Categories


















Conjoint Analysis
Purpose: Assess the value of the product, the importance of its attributes and the associated “utilities”. It
measures how clients evaluate the components of a product and determines how much each feature
contributes to overall prefer.
How do we measure it? Vary the product features (independent variables) to build many (usually 12 or more)
product concepts. Ask respondents to rate/rank those product concepts (dependent variable). Regress
dependent variable (preferences) on independent variables (product concepts). In this simplified conjoint
analysis, ordinary least-squares (OLS) regression, betas equal “part worth” utilities, i.e. the contribution of
each feature to overall preference.

 Product and Brand Management
Marketing Research
(Class 3)

1. Conducting a survey – the research plan

Survey- based analyses related to branding (overview)
1) Product and product evaluation (Means-Ends chains, Fishbein index – expected value, Conjoint Analysis,
customer satisfaction analyses)
2) Consumption experience and perception
3) Brand associations
4) Brand personality and Brand love
5) Brand Equity
6) Brand targeting and positioning
7) Brand communication

Developing the research plan for conducting a survey
1. Formulate the survey keeping in mind your overall substantive and analytical needs.
Define the problem you want to examine
– Identify the population that will be surveyed
– Determine what kinds of variables you want to measure
• What questions do you want to have answered?
• What’s the best way to go about getting those answers?
2. Determine specifically what mode of collecting the data will be used.
– Personalinterviews
– Telephone surveys
– Mailed questionnaires/drop-off surveys
– Web-based surveys and email-based surveys
3. Determine an appropriate sampling plan
– What is the sampling frame? - What do I use to select elements of the sample?
– How many interviews need to be completed? (sample size, sampling fraction) - What response rate
is required?
– Who should be included in the sample?
– How can the sample be made representative of the
population?
– Select the sample - Probability & non probability samples
4. Develop the questionnaire (the survey instrument)
– Each question should fit into the overall plan of research
– Each question should be suitable for the mode you have chosen to conduct the survey and for the
population that has been sampled
5. If you are using telephone or personal interviews, be sure the interviewers are carefully trained (interviewer
bias can wreck otherwise well-designed surveys)
6. Conduct an early pretest of the survey, whenever possible (use these results to refine the instrument and
work out any bug in the survey procedures)
7. Execute the survey in the field and be ready to deal with problems such as length, unnecessary and
incompatible items,...
8. Edit and process the data
9. Analyze the data

Contact Methods
1. Mail surveys
2. Phone surveys (CATI)
3. Personal interviews
4. Web-based surveys (CAWI)

Sampling Plan
Sample: segment of the population selected to represent the population as a whole.
Sampling requires three decisions:
• Who is to be surveyed?
Sampling unit —> How many people should be surveyed?
Sample size —> How should the people in the sample be chosen? -
Sampling procedure —> probability vs non probability samples

Survey Complementary research approaches
Qualitative research Quantitative research
• Ill structured contexts • Well structured contexts
• No clear hypotheses • Clear hypotheses
• “deep” phenomena • “superficial” phenomena
• Limited understanding of the phenomenon • Good understanding of the phenomenon

An integrated research process














2. The Marketing research process
Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing
an organization. They can be realized in house or outsourced.

Defining Problem and Objectives
Problems and research objectives must be defined jointly by marketing managers and researchers. An
example of problem is the launch of a new product. An example of research objective is to understand how
consumers will react to the new product The statement of the problem and research objectives guides the
entire research process

Developing the Research Plan
Research objectives must be translated into specific information needs, which might include detailed
customer characteristics, usage patterns, retailer reactions, sales forecasts, or other information. The
research plan outlines sources of existing data and spells out specific research approaches:
a. Types of data: Secondary vs primary data
b. Research approach: Survey, observation, or experiment

Secondary and primary data
Secondary data —> data already existing and available
• Internal information sources
• Sales trends
• Accounting data
– External information sources
• Trade associations
• Industry profiles
• Public Authority reports
• Commercial online databases
Primary data —> data collected for the specific purpose at hand.

Research approach - Experiments
• Gathering primary data by running experiments, often selecting matched groups of subjects, giving them
different treatments, controlling related factors and checking for differences in group responses.
• Best suited for explaining cause-and-effect (causal) relationships.
Research instruments are Paper and pencil, ICT and multimedia and Shop Lab

Types of research
• Exploratory research:
– Gathering preliminary information that will help define the problem and suggest hypotheses.
• Descriptive research:
– Generating information to better describe marketing problems, situations, or markets.
• Causal research:
– Testing hypotheses about cause-and-effect relationships.
Research approach - Observations
• The gathering of primary data by observing relevant people, actions, and situations.
– Can obtain information that people are unwilling or unable to provide.
– Cannot be used to observe feelings, attitudes, and motives, and long-term or infrequent behaviors.
• Ethnographic research:
– Trained observers watch and interact with consumers in their “natural habitat.”
– Yields richer understanding of consumers.

Research approach - Survey
A detailed study of a market or geographical area to gather data on attitudes, preferences, impressions,
opinions, intentions, satisfaction levels…, by polling a section of the population. It gathers primary data by
asking people questions Most widely used method for primary data collection, but the best suited for
gathering descriptive information.

Implementing Research Plan
It involves collecting, processing, and analyzing the information during a given period and through a given
budget. It can be carried out by the company marketing research staff and/or by outside firms. Company’s
researchers must check data for accuracy and completeness.

Interpreting and reporting findings
It involves interpreting the findings, drawing conclusions, and reporting them to management.
A formal document is usually written and presented to management.
On the basis of these results, management takes decisions whose responsibility is shared with company’s
researchers.

Marketing information systems

Customer Insights
Marketing info system —> Consists of people and procedures for assessing information needs, developing
the needed information, and helping decision makers to use the information to generate and validate
actionable customer and market insights.
 • Internal databases
• Marketing intelligence
• Marketing research
• A marketing information system is a management information system designed to support marketing
decision making.
• Kotler et al. (2006) define it more broadly as "people, equipment, and procedures to gather, sort, analyze,
evaluate, and distribute needed, timely, and accurate information to marketing decision makers."
• Customer insights - Fresh understandings of customers and the marketplace derived from marketing
information that become the basis for creating customer value and relationships.

MSI – Internal databases
Internal databases are electronic collections of consumer and market information obtained from data
sources within the company network.
– Includes customer profile data, customer satisfaction data, and more.
– Accessed more quickly and cheaply than other information sources.
– Ages rapidly and may be incomplete.

MSI – Competitive Marketing Intelligence
It’s a systematic collection and analysis of publicly available information about consumers, competitors, and
developments in the marketing environment.
• Annual reports from the competition and consumer blogs are two examples.

MSI – Marketing Research
Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing
an organization.








Red Bull Case Discussion (Class 5)
The first case is about the development and introduction of Red Bull. Red Bull started as a small start-up (we
would say today) and enjoyed world-wide, global success This case analyzes the drivers of this success and
the un-conventional activities that lead to it.
DISCUSSION QUESTIONS:
1. What are the drivers of Red Bull success?
2. 2. How did competition change over time? 3. How did Red Bull establish a global brand?





 Product and Brand Management
Brand Management - Basics
(Class 6)

1. Brands - basic aspects

Brand definition
1. A name, term, sign, symbol, design, or a combination of these, that identifies the products or services of
one seller or group of sellers and differentiates them from those of competitors (identifier, signal of the
offer)
2. The brand is simply a collection of perceptions held in the mind of the consumer (Fournier) (value added
through associations)
—> A synthesis: Brands are the totality of perceptions and feelings that consumers have about any item
identified by a brand name, including its identity (e.g. its packaging and logos), its quality and performance,
familiarity, trust, perceptions about the emotions and values the brand symbolizes, and its user imagery.

Complementary views on brands
Brands are an intangible component of the product, geared to identify the product and to synthesize its
“meaning”. In addition, they are drivers of experience, the focal point around which customers ’experiences
are organized and take place. But they are also a way to express and validate their identity. They carry
different meanings and play a variety of roles within the marketing process. As already suggested, they are
an intangible asset and a strategic resource for the firm, carrying firm’s values and embodying its relational
capital.

Brand components
Brands combine 3 different aspects or dimensions:
1. Utilitarian/functional
2. Hedonic/emotional
3. Symbolic/self expressive

Brand Dualism
Appealing to hearts and minds, to sentiment and reason; with emotional and functional overtones, based on
the view that “Emotions are important determinants of economic behavior, more than rationality”
(Kahneman 2002).

Brand as a complex system - Brand diamond - McKinsey
Intangible (emotional benefits and intangible associations) and tangibles (rational benefits and presence).
Benefits (what it provides – rational and emotional benefits) and identity (who and what it is – intangible
associations and presence).





















Brand Experience
Brand as driver of experience, built on experiences before, during and after the purchase
• Purpose —> realize sensory stimulations, link to emotions and lifestyle
• Brand experience —> subjective, internal consumer responses (sensations, feelings, cognitions, and
behaviors) evoked by brand-related stimuli that are part of a brand’s design and identity, packaging,
communications, and environments.


1. Brands – key dimensions

There are 5 key dimensions of brands:
1. Brand associations
2. Brand personality
3. Brand identity and brand image
4. Brand relationships
5. Brand elements

Brand Associations
The brand consists of a “network” of (subjective) associations, made by customers and “resides” in their
minds:
• Product attributes (ex: Volvo —> durability and safety)
• Relative price (ex: Hyatt Regency —> super luxury)
• Intangibles (ex: Cadillac —> quality)
• Use/Application (ex: Campbells —> lunch)
• Customer Benefits (ex: McDonalds —> reward)
• User/Customer (ex: Covergirl —> young, blonde)
• Celebrity/Person (ex: Nike —> Michael Jordan)
• Lifestyle/personal (ex: betty crocker —> honest, dependable, friendly)
• Product class (ex: hoover —> vacuum cleaner)
• Competitors (ex: Avis —> Hertz)
• Country/Geographical Area (ex: Benehana —> Japan)

Not always brand associations are positives.

Brand Personality
Personality is the particular combination of emotional, attitudinal, and behavioral response patterns of an
individual. With brand personality we means a set of human characteristics associated with the name of a
product, service or company” (anthropomorphic)
• “brand personality is the way a brand speaks and behaves”
Ex: Marlboro ‘masculin’, Diana is ‘feminin’, IBM is ‘old’, Apple is ‘young’, Coke is ‘conforming’, while
Pepsi is ‘irreverent’, the Red Bull person is sporty, adventurous, an adrenalin seeker, a daredevil, and
someone who is into music.














Big Five – openness, conscientiousness, extraversion, agreeableness and neuroticism.

Brand identity
Brand identity is a unique set of brand associations that represent what the brand stands for and imply a
promise to customers from the organization members. It’s the outward expression of a brand (including its
name, trademark, communications, and visual appearance).
Because the identity is assembled by the brand owner, it reflects how the owner wants the consumer to
perceive the brand and by extension the branded company, organization, product or service. This is in
contrast with the brand image, which is a customer's mental picture of a brand.
Brand identity consists of twelve dimensions organized around four perspectives:
• the brand-as-product (product scope, product attributes, quality/value, uses, users, country of origin)
• brand-as-organization (organizational attributes, local versus global)
• brand-as-person (brand personality, brand-customer relationship)
• brand-as-symbol (visual imagery/metaphors and brand heritage).


The brand system:
– Brand essence: The brand essence captures the brand values and vision in an ambivalent timeless identity
statement. The internal magnet that keeps the core identity element connected
– Core identity: The core identity represents the essence of the brand and contains the associations that are
most likely to remain constant over time.
– Extended identity: The extended brand identity fulfills a completeness and texture role to funnel the
ambivalent core identity into a consistent direction of the brand. Where core elements are timeless, the
extended identity contains elements that do not belong to the timeless foundation of the brand identity.
– Value proposition
– Relationship

Brand Image
Consumers ’perceptions about a brand as reflected by the brand associations held in consumer memory
(Keller 1993).
• Strength of Brand Associations —> More deeply a person thinks about product information and relates it
to existing brand knowledge, stronger is the resulting brand association.
• Favorability Brand Associations —> Is higher when a brand possesses relevant attributes and benefits that
satisfy consumer needs and wants.
• Uniqueness of Brand Associations —> Unique selling proposition” of the product and provides brands with
sustainable competitive advantage.

Brand identity and brand image









Brand relationships
Customers establish relationships with their brands (and viceversa). Those relationships can be
conceptualized in very different ways (Fournier). They have very different strength (from very tight to very
loose) and features (for instance, kind of reward).

Brand elements
Brand assets are signals (excluding the brand’s name) that identify a brand. Ideally they should automatically
trigger memories of the brand and what it stands for (ipsos)
• Brand names, URLs, Logos and symbols, Characters, Slogans, Jingles, Packaging.


 Product and Brand Management
Brand Management - Brand Equity
(Class 7)

1. Brands ’value – an introduction

Brand’s Value (Complementary views on brands)
As already suggested, brands are an intangible component of the product, geared to identify the product and
to synthesize its “meaning”. As such, they may become drivers of experience and the focal point around
which customers ’experiences are organized and take place. In addition, they are a way for customers to
express and validate their identity. But they are also an intangible asset and a strategic resource for the firm,
carrying firm’s values and embodying its relational capital. As we know, intangible assets are difficult and
long to replicate and may become the cornerstone of a successful competitive strategy.


Brand value (generic)
Brands “have value” for both customers and firms

Value to customers:
– Quality Value to firms:
– Reliability and stability Monopolistic competition
– Hedonic – Profitability
– Practicality (ease in the buying process) – Innovativeness
– Accessibility – Extensions


2. Brand equity models

Brand Equity definition
Brand equity is the differential effect that knowing the brand name has on customer response to the product
or its marketing. (Keller - (CBBE) Customer-Based Brand Equity Model).
• It’s a valuable asset that offers a competitive advantage
• It measures the brand’s ability to build strong and profitable customer relationships that result in loyal
customers (customer equity).
• It’s the financial value of a brand which provides capital/value to products and services.


A few dimensions have been taken into account in the analysis of Brand Equity:
• Brand awareness • Brand association
• Brand image • Brand loyalty
• Perceived quality • Brand feelings

A number of models have been devised to account for Brand Equity. We report some of them:
1. Brand equity (Aaker) 3. Customer Based Brand Equity (Keller)
2. Brand asset valuator (Y&R) 4. Interbrand

















BE management according to different models
BE (Aaker) BAV (Y&R) CBBE (Keller) • Salience
• Awareness • Differentiation • Relevance • Imagery
• Associations • Esteem • Performance • Feelings
• Perceived quality • Knowledge • Judgments
• Loyalty • Resonance
• Other proprietary assets

These are the dimensions to be driven by branding actions. They need to be targeted in parallel or sequence


Brand Equity and its determinants
Brand equity is driven and measured (at the same
time) by 5 factors:
• Brand loyalty
• Brand awareness
• Perceived quality
• Brand associations
• Other proprietary assets
Those factors have a broad impact























BAV - Brand-Asset Valuator
Brand equity is determined by 4 different components:
1. Differentiation - ability of the brand to stand apart from its competitors (unique)
2. Relevance – actual and perceived importance of the brand (personally appropriate, tied to penetration)
3. Esteem - perceived quality and perceptions about the growing or declining popularity of a brand (quality
and popularity)
4. Knowledge - extent of the consumer’s awareness of the brand and understanding of its identity
(awareness about the brand and what it stands for, intimacy)
• 1 and 2 determine the strength (or vitality) of a brand (its potential for growth); 3 and 4 its stature (current
strength). These components develop in sequence.

Defining Customer Based Brand Equity (CBBE) Keller
Approaches brand equity from the perspective of the consumer and stresses that the power of a brand lies
in what resides in the minds and hearts of customers. Differential effect that brand knowledge has on
consumer response to the marketing of that brand; based on brand awareness (recall and recognition) and
image
• Salience - Brand Awareness (depth and breadth)
• Performance
• Imagery
• Judgment
• Feelings (strong and favorable)
• Resonance (intense and active)

CBBE Pyramid












Brand Building Blocks Sub-
dimensions














Step 1: Salience - talks about Brand Awareness (depth and breadth)
• Identity – Ensure customers can identify the brand and can associate the brand with a specific product
class or need.
 • Depth of brand awareness: how likely the brand will spring to mind (recognition and recall) much the
customer knows your brand when they see/hear about it
• Breadth of brand awareness: when the customer thinks about your brand, and the range of
purchase/usage situations in which the brand comes to mind.

Step 2a. Performance
Meaning – Establish meaning to the brand so that when customers think of the brand, they strategically link
both tangible and intangible brand associations with the brand.
Performance dimensions:
1a primary characteristics 3b service efficiency
1b secondary features 3c empathy
2a product reliability 4a style
2b durability 4b design
2c serviceability 5 price
3a service effectiveness

Step 2b. Imagery
User profiles, purchase and usage situations, personality and values, history, heritage and experiences.
Usually intangible aspects of the brand, can be formed directly; via own experiences, can be formed
indirectly; via external marketing communications, advertising, word-of-mouth

Step 3a. Judgment
Responses – Gauge customer responses to the brand identification and brand meaning.
Brand judgments are personal opinions and evaluations about the brand.
Judgment dimensions: quality, credibility, consideration, superiority

Step 3b. Feelings (strong and favorable)
Feelings dimensions: warmth, fun, excitement, security, social approval, self-respect

Step 4. Resonance (intense and active)
Relationships – Convert the brand response to create intense, active loyalty relationship between the
customer and the brand.
Loyalty, Attachment, Community, Engagement



3. Warning! Double Jeopardy

Double jeopardy is a well established and disturbing phenomenon. It says that brands with a low MS suffer
from a double disadvantage: they have a lower penetration and a lower purchase frequency. Therefore, it
doesn’t make much sense to contrast strong with weak brands; we should refer instead to large and small
brands. In addition, to grow brands, it is crucial to focus on penetration (and MS).




































 Product and Brand Management
Digital Marketing - Influencer Marketing
(Class 8 - Guest Speaker)

Market, Conversations and Reputation
Reputation: the mix of elements contributing to the idea that users have of the brand
- Intangible asset
- Credibility in the social group
- Business card —> Speaking negatively about the brand can affect the perception on the purchase
- Online reputation XXX
- The same applies to the ability of promote ourselves. Personal branding is the ability to create a reputation
on the basis of credibility, competency and authority.

Influencers
Individuals who have the power to influence purchasing decisions thanks to their (real or perceived)
authority, competency and relational abilities.
AFFECT —> Stimulate and affect people's decisions
AUTHORITY —> The quality to be recognised trustworthy on a given theme
POSITION —> Become the central part of network of a communication Network. There is no influencer
without a network
RELATIONSHIP —> The message is spread around thanks to the people’s
relationships.

Galdwell division (2001)
● Maven
● Connector
● Persuader

When a simple flu becomes a virus-idea!
Seth Godin compare an influencer to a ‘sneezer ’who infects other people
like in an illness. Godin defines two types of sneezer:
● Powerful Sneezer
● Promiscuous Sneezer

Consumers
• Large in numbers (they are at base of
the pyramid)
• Limited Reach
• Strong trust of their own network
• Projects taking advantage of the
‘community effect’
• Bigger conversation rating for purchases


Experts
- Very experienced in a particular field Guru
- Vertical ‘Influence’ - Expert with large audiences (reach)
- Not large audiences but very loyal - Celebrities in their fields
- The centre of communities of all sizes - Not always ‘super partes’, but still very credible for
- Social addicted their big know-how

VIP
- The most popular with large public exposure
- Well known, beloved and often venerated by their fans
- Visibility and transversal visibility
- Potentially present in every media

Influencer marketing is more than just employ a testimonial
Even with their large audiences, only 34% of people trust the opinion of a VIP. Their main motivation is to
monetize and for this reason they don't have the same trust of other group and even with a larger reach they
don’t convert as much.

How celeb endorsements influence young consumers














BONUS: When an influencer is not a
real person
Communities can be great a place for
enthusiasts and professionals. Here
users can find informations on
services and products as well as
conversation about them.






Influencer Marketing
Influencer Marketing is a form of marketing based on the identification of people who have the ability to
influence potential targets. The activities are focused on these people (Influencers), so that he can, in
autonomy, influence the large public.
Key points of the definition:
● Identification
● Focus on influential people
● Authonomy

Perception on influence
The democratic relationship that develops horizontally between similar subjects (at least on the surface). A
message without a commercial structure that aims to enrich the utility of a community.
Don’t call it Advertising (at least not just that…) —> Influencer marketing means establish and focus on the
value that this people can generate (influtility).

Objectives: you must always start from your objective to structure your campaign
● Awareness
● Lead Generation
● Improve brand reputation
● Thought Leadership
● Encourage purchase
● Use the brand

Different Influencers, different Objectives
The influencers pyramid with categories can be useful here. Each category is defined by its peculiarities and
prerogatives. Each category connected to different objectives
● Consumers: Encourage purchase. Humanization of the brand
● Experts : Thought leadership, brand reputation, Crisis Management, SEO
● Guru: Awareness, Thought leadership, lead generation, Brand Reputation, Crisis
Management, SEO
● VIP: Awareness, encourage purchase

The most important channel is instagram. The most important goal for the brands is awareness, it’s not the
only goal but it’s the easier one, it’s easy to create awareness with a creative idea.
But if they want to create a more impactful awareness they have to use a stronger strategy.
The budget for influencer marketing is increasing every year and now it’s over 30,000 euros, but it’s not that
much (an average campaign with 8/9 influencers is 20,000 euros).
Influencer marketing is a tool, but it’s to the only communication tool.
The top challenges is identifying the steps, but it’s difficult because of the presence of the quality dimension
(we could use the web listening after the campaign, analyze the increase of the buzz online to see if the
project generated a real impact). Another quality challenge is choosing the right influencer, because some
companies don’t analyze the audience of the influencer used, I need to know id that influencer has the same
interest as my target. Sometimes companies make mistakes in choosing influencers because they use engines
inside social media or reviews.
A limited budget means that brand have to work with influencers with a limited public (nano and micro
influencers), that’s why lot of brands use more than 10 (to 50) influencers. More influencers mean more
difficult.

4 steps of influencer marketing
1. Set the goals and create Concept
2. Identification: to research and choose the best figure to represent the project
3. Management: to begin and develop the collaborations
4. Measurement: to understand the results gatherers

Concept
Create activities capable of enhancing the qualities of influencers and generating impact on users.
We have to design an experience for the influencer so makes him credible and can exploit trust in favor of
the brand. Originality is the key!
In influencer marketing is the creative idea behind the project and thanks to the content you can create a
real campaign that connects all influencers. The concept is one of the best way to push the creativity and
give influencers to create something different, so that they create something impactful. The majority of
campaigns in Italy don’t have a real concept that’s why they don’t have good results. Here reputation is really
important, because they give influencers credibility.
1. Brand creates content by users, Hasbro decided to ask to their users to send them they best childhood
stories.
2. Hasbro selected the 6 more important stories by users and used then influencers to replicate them.

Identification
Influencer Outreach: Finding the right person for the right job is fundamental. ‘WHO ’becomes as important
as ‘WHAT ’and ‘HOW’. What do we mean for ‘identification’? Create a database with the potential individual
to involve like users, bloggers, celebrities. This is a document that will enable us focus the search and help us
choosing the right candidates.
Identification is one of the most important step, here we create a list of influencers that best represent our
brand. There’re some tools that can help to do that.
There’re basic element that can help us to decide which one is the best influencer, for example the country
(need to remember where the audience come from), sector (the element that creates a connection between
product and influencer).
Basic Variables:
● Country
● Platform
● Sector

Influencer outreach: the search needs to happen at different level and with different instruments. The search
for a fan is different than the search for a celebrity or instagrammer. Use more than one approach to have
the best results.
To find an influencer I can also use Google, which is also important to do a fast check of the reputation of the
influencer that I chose.
Another tool is using social media, for example on instagram we can look for a specific hashtag or location,
it’s not the best way, but whatever. We could also use human expertise of specific tools.
● Google
● Social Network
● Human Expertise
● Tool

Drivers of selection —> We have to measure and select our target, create a relationship, that’s why the
capability of engaging is very important. It’s important to understand the ability of engaging of the influencer,
but today, that why we should check for comment in the last period.
Influencers have the ability to give vitality to a message and they can become the new face of the company.
The last important point is the budget, because if I don’t have the right one I won’t be able to implement any
of the aspects previously defined.
● Audience
● Engagement
● Echo
● Know-how
● Budget
● Reputation

Case study: Lord & Taylor and the FTC in US
50 Influencer were chosen to wear the same dress at the same time. This appeared as a coincidence but it
clearly wasn’t.
La FTC ha per questo annunciato che gli influencer pagati devono inserire nei loro contenuti l’hashtag #ad o
#sponsored in modo da distinguerli dai contenuti “naturali”.
After this, the FTC announced that paid influencers need to ad in their content the hashtag #ad or #sponsored
to distinguish them between normal content

The measurement
The difficulty during the measurement
● The conception (not always true) that web activities, advertising in particular are totally measurable has
created some misunderstanding
● Influence is difficult to quantify in just one number or in absolute terms
● The quality aspect of the process is fundamental but also difficult to evaluate with numbers and data

Possible KPI
For each project, depending on their nature, it might be necessary to have different measurement
approaches to adapt to better to the content created. This will give us better and more calibrated analysis.
More than the numbers, we need to understand the development of the project. For this reason it possible
to define some Key Performance Indicator that are not strictly necessary for our analysis
• Traffic: check the number of visits towards our channels (site, blog, landing page).
• Awareness: an important data to monitor constantly. It allows to understand the performance of campaign
with respect to the brand.
• Sentiment: Understand what the users are saying about the campaign can tell us a lot.
• Critics and advocacy: derived by sentiment analysis
• Mention: an element connected to the world of socials. An increase of mentions is a simple analysis but
that offer us a clear idea of the relationships with our users.
• Users and influencers involved: an analysis to understand the capacities of engagement of a project.
• Lead generation: Metric based on the ability of our activities to attract new contacts
• Conversioni: Another numeric data. These are not leads but actions by the users
• Sales: A difficult parameter as it depends on many factors. difficult to use but remains an important
parameter for companies.

3 Steps of Influencer Marketing (ma solo uno)

Estimated Value
As you would do for an equivalent offline value, we tend to calculate the ROI with the product of a campaign
giving an economic value to all the elements generated by the project (like, shares, earned posts, video views,
etc).
These values are established on the basis of average prices paid for social ads and according to the expertise
of different companies. Many than multiply this results times 10 or 13 as content produced by influencers
and their performance generate more trust and impact. An important data for sure, but always to analyze
with care.

Influencer Marketing Tools
Some tools, both free and to purchase, can really help us in our analysis but we should never forget the
human element!
Altra nota da tenere sempre a mente prima di utilizzare uno strumento di ricerca è il mercato di riferimento
per la nostra campagna. Alcune piattaforme sono solo solo in inglese, ed hanno un database d’influencer solo
di alcuni paesi.
Another thing to we need to remember is that before start using a special tool is major market of our
campaign. Some platforms are only in english for instance and they have a database of influencers only from
a few countries

ITALIAN ORIENTED
● Launchmetrics: suite dedicated to influence marketing
● Buzoole Finder: tool Twitter oriented
● Blogmeter: social orientated with a database of influencers created by an expert team with specialized on
italian figures

ANGLO-SAXON
● Cision: The most popular
● Traackr: Helps companies ’engagement
● Klear: social oriented with excellent report function
● Buzzsumo: Amongst the most popular for Bloggers
● Blogdash: Large bloggers database


SUPPORT TOOL
● Authority spy: to download on your PC/Mac
● Followerwonk: tool for twitter by MOZ
● Similar Web: Great scanner to get info about info about sites
● Muck Rack: Good tool for journalists
● Iconosquare Influencer: for searches on Instagram.

#SANOEBUONOCHALLENGE
PLUS POINTS
To talk about a new product without talking about the product, aiming to join influnceer marketing and
corporate social responsibility
Eurocompany did it for the lunch of the new brand Cicioni
A challenge to give visibility to the values that it represents me than to the product itself
Results
● 138 produced content and 106 posts ‘gained ’cretaed by users
● A clear improvement in mention and sentiment
● More than €50K of value produced

PLUS POINTS
● Aim towards an original and involving concept
● Influencers and synergy with a brand are the real protagonist here
● Requested the participation of users after the first initial posts of the campaign
● Gives substance and value to influence marketing also adding RSI

Influencer Marketing Next Challenge?
● Digital Influencer
● AI will support the outreach
● Role of social advertising
● New platform (TikTok)
● Impact of Facebook Brand Collabs Manager
● Polarization









 Product and Brand Management
Digital Marketing - An Overview
(Class 9 - Guest Speaker)


1. New Consumer Behavior

Customer behavior has changed because of the digital transformation, thanks to digital tools. For example,
in only one minute we have more than 40.000 posts on instagram.

Traditional and Digital marketing












Segmentation in digital marketing is more accurate, because we can use the algorithms data to check the
specific target, personalize the communication, use the data collected to conduct the marketing research,
etc…

Traditional approach:
1. Stimulus —> the consumer gets a "stimulus" from an advertising campaign (commercials on television,
receiving mail at home, advertising in newspapers, etc.). This stimulation creates a need.
2. Recognition —> First Moment of Truth (“shelf”): the consumer enters a store (real or online) and
recognizes the product on the “shelf”. The first moment of truth takes place in the store when the
consumer decides which product to buy among the various items on the shelf.
3. Experience —> Second Moment of Truth (“experience”): the second moment of truth (SMOT) occurs
after the purchase, with the experience of use. At this stage the consumer is either satisfied or not with
the purchase and shares his/her experience.

The New approach:
10 years ago less than 2% of people were online, now more than the 25% of the world’s population use the
internet. In some countries, this data is close to 100% (i.e. all people have internet access).
• Two-thirds of the world’s population use a mobile phone.
• 70% of Americans say they read reviews of products before making a purchase.
• 79% of consumers say they use a smartphone to search for information on products/services before
purchasing. 83% of mothers say they do online research after seeing a commercial on TV
Zero Moment of Truth —> ZMOT is a new moment of the decision-making process which consists of online
research before going into a store.

Micro-moments —> “micro-moment occurs when people reflexively turn to a device—increasingly a
smartphone—to act on a need to learn something, do something, discover something, watch something, or
buy something. They are intent-rich moments when decisions are made and preferences shaped.” Google
• As a brand, being present at all phases of the consumer journey, not just when someone is ready to buy, is
where the biggest opportunities exist. To accomplish this, Google has defined four micro-moments that
represent the full range of user needs:
• I-Want-to-Know Moments (ex.consumer exploring and researching)
• I-Want-to-Go Moments (ex. Local marketing)
• I-Want-to-Do Moments (ex. Before or after purchase)
• I-Want-to-Buy Moments (ex. Online buying process)

This new process requires a different type of marketing: A multi-channel digital strategy, to better dialogue
with the consumer. Now brands need to go beyond the consumer experience, they need to design a strategy.


2. Online Customer Experience

Technology has democratized information and shifted power from the hands of businesses (company centric)
to the hands of customers (customer centric).
Customer Experience: the impact of all of the interactions a brand has with a customer over time across all
its touch-points, on and offline.
Meet functional customer needs, is not enough. Brands have to exceed customer expectations.

Designing the experience
IXD – Interaction design, is the practice of designing interactive digital products, and services. It focuses on
designing the flow whereby a user could locate information easily while enabling the achieving of her
information goal in each interaction.

Wireframes —> they define all interactions and experiences of the consumers. Here experiences are the
perceptions of the consumer.
User experience —> User experience is a person’s perceptions and responses that result from the use or
anticipated use of a system or service. It includes the users ’emotions, beliefs, preferences, perceptions,
physical and psychological responses, behaviors and accomplishments that occur before, during and after
use.

Customer experience online:
1. Discover: Explore project goals and its implications to better understand how to position, and distribute
the product online. Understand people needs and investigate the context to correctly differentiate the
service positioning. Exploring the opportunities disclosed by the emerging technological scenario
2. Think: Envision a compelling service value proposition based on a deep consideration of the brand
perception. Show, externalize and frame the concept vision for the product, extending the horizon of our
shared vision of the future.
3. Design: Combine design and strategy to create the experience users love. Architect the conceptual
experience to bring the user stories to life. Users flows and application maps are used to identify every
key moments and features to design. The core visual concept and design principles are created in order
to create something from nothing.
4. Build: Detail and prioritize key journeys, prototype interactions (through live prototypes), create
wireframes and visual designs. Design and craft the final experience sitting alongside developers making
critical decisions as the experience takes shape in live code.
5. Measure: Track performances to add value to the service model. Improve the user experience by
continuously testing designs as early as possible, changing, evolving and refining them based on user’s
needs and behaviors. Data drives constant learning.


3. Digital Marketing

Digital marketing consists of a process that keeps customers in a relationship with the company through
online activities. Digital Marketing = Marketing on the web.
Principles of digital marketing
1. Create better content (Inbount Marketing): Creare i migliori contenuti (Inbound Marketing): Simple,
original, concrete, credible and emotional.
2. Optimize the content for search engine
3. Brand voice
4. Multimedia
5. Customization
6. Create a strategy for conversions
Digital marketing can be define as marketing on the web. There’re lot of advantages, reach more customers
and develop a relationship with them, many channels available, create better contents, create dialogs with
the customers (customization), create strategies for the conversion. We can integrate the channels we use
with the digital marketing, we need to listen to the voice of the customers. The main advantage is measuring
the online activity and its performance (ex: campaign on facebook).

Digital strategy and the planning process
1. Analysis: Study and observe before starting any digital activity
2. Strategy: Establish guidelines to pinpoint clear goals through well-defined activities and measurable KPI.
3. Operating plan: Tools, calendar, resources and details 4) Execution: With energy, flexibility and efficacy
4. Measurement: What results have we achieved? Are we going in the right direction?

An analytical approach
The definition of an effective strategy is based on the analysis of data and on the definition of measurable
and achievable performance indicators.
1. Collect information: Knowing business processes, analyzing distribution and sales dynamics, building
customer relationships.
2. Audience analysis: in-depth analysis of the client’s target audience through the integration of analytics
data and information gathered within customer relationship management.
3. Competitive analysis: collect structured information on competitors’ positioning and digital marketing
actions.
4. Context analysis: analysis of trends, traffic volumes and user behavior in the reference sector, specific to
each brand.
5. Definition of objectives: for each brand, smart objectives will be based on the various features of the
funnel.
6. Definition of the instruments: in this phase the preexisting tools in the general strategy will be defined
in a more specific way in order to maximize the results.
7. Definition of KPIs: in agreement with the customer in the performance indicators and the measurement
method will be defined in order to analyze the results of the communication activities.
8. Analytical report: through dashboards, dynamic reports are created to analyze the results of each
channel and for each campaign.

Definition of the operational strategy
Definition of best practices with tools
Creativity guideline

The Online Customer Journey
The Customer Journey is the route we take, consciously or not, when we act as a consumer.
We move from an initial contact with a particular company, through a specific channel (offline or online),
until, through one or more contact points provided by the company itself or through stimuli provided by
other consumers, we decide to buy or not.
This allows companies to better understand consumers and the needs of their target market, anticipating
and optimizing their digital marketing investment.
1. Awareness
2. Consideration
3. Purchase
4. Retention
5. Advocacy: the consumer is a promoter.

Buyer persona
This is a term used in marketing to identify and understand different customer profiles, referring to their
personal characteristics, as well as their socio-demographics.
Advantages:
• More Precise Target: A defined buyer persona is much more precise and specific than a general customer
overview
• Personalized communication: The term “persona” is based on the desire to better recognize the humanity
of people you communicate with in marketing.
• Improved Budget Efficiency: As buyer personas take targeting precision to a greater level than general
marketplace descriptions, they also allow you to enhance your budget efficiency

Calculating Digital Communication ROI
Set SMART goals —> specific, measurable, achievable, relevant and time related.
Identify KPIs —> KPIs are metrics that tell us how effective we are at achieving our business goals
(impressions, reach, interaction, positive interaction, etc…)
Define each touchpoint’s role —> Channel roles: Each channel has to be considered for its own nature and
KPIs must be set according to that. Plus, the role you give to every touchpoint has to integrate with the other
ones inside the brand ecosystem.
Develop tactics
Measure and adjust —> - SEOCEROS, GOOGLE TRENDS, ANSWER THE PUBLIC, STATISTA, FACEBOOK IQ,
FACEBOOK AUDIENCE INSIGHTS, TWITTER AUDIENCE INSIGHTS, SIMILARSITES, OWLER, SIMILARWEB,
SEMRush, SEOZoom, GOOGLE ALERT, GOOGLE KEYWORDS PLANNER.


4. Digital Marketing Channels

SEO (search engine optimization, are all tools of research such as google or bing, but the SEO is usually free),
PPC: pay per click, Mobile, PR, Affiliate, Display, Social Media, Emailing, Shopbots.

Media type marketing channels
Paid, Owned media
Earned media (pr activities, influencer marketing).
Shared media are all social media.


5. Digital Marketing: Online Advertising

Online advertising —> email marketing, mobile ads, display ads, social media marketing, search marketing.

Search Marketing
Search marketing is the process of gaining traffic and visibility from search engines (Google, Bing, Yahoo!)
through paid (SEM) and unpaid (SEO) activities.

SEO activities (search engine optimization) consist of the optimization of websites in order to be more easily
found by users who do research on the search engine. Usually SEO activities increase the number of specific
users on a website.
o The main activities are: URL optimization, robot and sitemap optimization, code error optimization, link
optimization, images and content improvement, speed of website and quality score.

SEM (search engine marketing) includes all the techniques used to highlight a company website in order to
reach traffic goals and conversions through advertising, called paid search campaigns, using platforms like
AdWords (Google) that sell results from the SERP (Search Engine Result Page). This kind of activity is paid for
by the company/brand through a competitive bidding mechanism (we offer an amount of money for each
keywords we want to buy) and putting the specific web pages among the first 5 results of online searches.



6. Email Marketing

Email marketing is very important because is one of the main
activities that we do with our smartphones and is a marketing
channel that consists of sending commercial or non- commercial
messages to groups of people via email. The advantage is the low
price, we pay only the platform we use to send the email (ex: active
campaign); Measurable - it is possible to track hits, purchases and
cross-channel activities; It builds a one to one relationship (with a
personalized message); It is instant; It matches with CRM platform,
eCommerce and social networks; High level of ROI.


7. Mobile Marketing

Mobile Marketing means: All the strategies we use to communicate better with our target or potential target
market through interactive communication using mobile devices: smartphones, tablets, netbooks etc..
Examples are proximity, apps, MMS and SMS, coupons, banners, search and location based.

Mobile oriented —> Most people do research on mobile devices, they use social networks from mobile
devices. 86% of people use smartphones as a secondary screen when watching TV. Smartphone use in real
shops: 42% (Gfk, 2016).


Local Marketing
It is any marketing strategy that targets customers by a finely grained location such as a city or neighborhood.
It is used by small local businesses to conserve resources and develop unique advantages by reaching the
customers closest to them.



8. Affiliate Marketing

A way for a company to sell its products by signing up individuals or companies ("affiliates") who market the
company's products for a commission. It is a very effective way for a company to promote its products
through “guaranteed” sites that advertise the product of the company. The sites hosting promotions earn
only if they can make a sale. Therefore, the company has virtually no overhead costs for the campaign.


9. Display Advertising

Display advertising (banner advertising) is a form of advertising that conveys a commercial message visually
using text, logos, animation, videos, photographs, or other graphics. It uses a paid for space in a content that
is interesting for the user in a page that he/she is visiting.

Types of display advertising:









Native —> It is a contextual advertisement technique that allows you to add documents and
advertisements in an editorial context. In this type of advertisement it is clear who the advertiser of the
content is.
Rich Media —> Rich Media are all the types of online communication that use interactive features. Rich
Media is also a format with a high level of impact.
Video Advertising —> Advertising in a video can be:
• Video in streams – pre roll/mid roll / post roll: Video advertising before/during/after the content, in
automatic play.
• Video in banner: it is a video inside a rich media with automatic play when the mouse is over it.
• Video in read: when you scroll the page, the video advertising appears.

Focus on: Facebook Ads
An advertisement created by a business on Facebook that’s served up to Facebook users based on user
activity, demographic information, device use information, advertising and marketing partner-supplied
information, and off-Facebook activity.


10. Social Media

Social media are fundamentally changing the way people learn, read and share information and content.
On them there is a fusion of sociology and technology, transforming monologue (one to many) into
dialogue (many to many) and they create a democratization that transforms people from users of content
to publishers. They have become very popular because they allow people to use the web to establish
personal or business relationships.

The importance of social media for companies:
Brand recognition, brand awareness, create a relationship with clients, improve web visibility, listen and help
users (improve customer satisfaction), improve sales conversations.





11. Content Marketing & Inbound Marketing

Content marketing involves the creation and sharing of media and editorial content in order to gain
customers and monetize a website (or lead generation). This information can be displayed in a variety of
ways, including news, video, e-books, infographics, tutorials, articles, photos etc. Content marketing creates
interest in a particular product or service and entertains the audience, drawing attention from the end user.
Helpful for inbound marketing:
• Becoming an authoritative leader in a small segment of the market (e.g. Chiara Ferragni) Increasing traffic
on the website (SEO benefits)
• Acquiring leads (email databases) and use them in marketing strategy
• Differentiation from competitors
• Influencing purchasing decisions
• Creating a loyal community
Content marketing can be used through Social Media, Newsletters, Blogs, Video, Illustrations and
infographics. In content marketing we use the technique of storytelling (art of storytelling used as a
persuasive communication strategy).

Inbound marketing is a technique for drawing customers to products and services via content marketing,
social media marketing and search engine optimization.
It is a marketing strategy based on being visible to potential clients (outside-in) as opposed to the traditional
mode, also known as outbound marketing (inside-out) which is centred on a message directed only to the
customer. With Inbound you switch from Interruption in Permission Marketing: the audience must be won
over by providing interesting and useful content for your target audience, without interruption.
INBOUND MARKETING: OUTBOUND MARKETING:
Contents Advertising
Web Site Interruptive ads
Viral content Cold calls
Blogs Direct mail
Social media Pop-up
SEO

Differences between channels and strategies
To better understand the difference between different marketing channels, we use the metaphor of the
watermelon seller:
• Stable watermelon kiosk during a season = Sponsor/Banner
• Watermelon seller equipped with many Ape Cars = Banner Display Advertising
• Watermelon kiosk in a market in the city centre = SEO placement
• If the watermelon seller had the idea to create a space with a football table = Inbound Marketing.
Simple, because it would attract a specific audience of potential buyers with a sideline to the sale.
* The boys attracted by the chance to spend the afternoon in the city, with the summer drought, playing
football would create "thirsty" teams of players and they would be attracted to a fresh watermelon reward
to cool off and keep playing.

Digital Strategy
• Content Management: Video strategy + Blog (SEO)
• Viral Marketing with video polarization
• ChatBOT
• Community on Facebook Groups (90.000 people) [Goal: Drive to web-side/Consideration/Information
about New York –Ask Piero- ]
• Brand identity: French R, Video Intro “Amici del mio Viaggio a New York..”
• Positioning: “1° Urban explorer”


The Funnel














12. AIDAT & Analytics

AIDAT Model —> A model used to
analyze the impact of digital
marketing activities.




Digital
Analytics










13. eCommerce

It is a form of trade in which the purchase / sale is made through a website. Online commerce can be divided
into two categories:
• B2C (business to consumer) in which commercial transactions take place between the company and the
consumer.
• B2B (business to business), where the transactions take place between companies.
ADVANTAGES
• Reduction of fixed and variable costs
• Access to a global market
• Collection of data on the consumer (Big Data)

DISADVANTAGES
• Shipping costs
• Lack of customer confidence
• Lack of physical contact with the product

The key points for effective e-commerce are trust/reputation, user experience and digital strategy.


14. BOT & Digital Trends

Instant messaging services (WhatsApp, Messenger, WeChat, Viber) have exceeded social networks
(Facebook, Instagram, Twitter). With BOT, messaging services are transformed into services delivery
platforms.

ChatBOT
ChatBOTs are instruments based on artificial intelligence using messaging services and, independently, are
able to interact with real people and to respond to their demands.
They can be used to provide different shopping experiences (e.g. exploring the catalogue), for technical
support and customer care.
Opportunity for companies
• Improve customer service
• Simplify and broaden the possibilities for eCommerce
• Upselling and cross-selling
• Create engagement at an even more personal level
• Keep the potential experience
• Respond to needs in real-time
• Integrated service opportunities
• Improved Loyalty programs


 Product and Brand Management
Brand Management
Integrated Marketing Communications
(Class 10)

1. Introduction - IMC and basics

The message: We can draw on a number of tools/ channels/ platforms, very different, but complementary
(serving different purposes, addressing different audiences, promoting different content). These tools have
to be applied synergetically.

Marketing Value chain
• Understanding customers
• Creating a superior value proposition
• Delivering and communicating the value
proposition —> Communication and distribution are the last step.

A complex Market system
Companies are dealing with a complex market system, with 3 different segments of customers, where 2 of
them are related to the end customers. Usually business are selling to customers, to industrial customers,
and also market intermediates.
Marketing needs to develop communication to deal with all of those customers. We have to draw on tools
and techniques different but complementary.
The set of actual and potential buyers of a product. They share a need or want that can be satisfied through
exchange relationships.










Red Bull communication tools:
• Advertising on traditional media and Internet, stressing traditional and un- conventional themes
• Sponsorship of people in un-conventional and extreme sports, and of events (extreme and not (Red Bull
Flugtag, Flying machines, RB Air Race, RB Paper Wings)
• Ownership and sponsorship of soccer teams, RB Formula 1 team (RB, Toro Rosso)
• Ownership of media (TV, magazine,...), RB Music Academy
• Personal selling to club owners: their first big success was this one.
• Free giveaways to consumers
• Slogan (Red Bull gives you wings)
• Logo
• Packaging (blue and silver can)
• Huge investments ($1.4 on $1.1 revenues at the beginning; 30% of sales), mostly on adv.

Red Bull used not only traditional marketing, but also unusual and unconventional channels, adapting their
communication to their target.

New communication realities
There has been a shift in the consumption and usage of media…
• Mass markets are increasingly fragmented
• Diffusion and improvements in information technology (broadband and mobile)
• Customers are switching away from traditional media (Ad skipping; increasing Internet usage; multitasking)
• Customers are moving towards a more participatory and interactive approach
To this change, firms have responded by shifting to different targets (narrow marketing) and tried to reach
customers through different touchpoint. They created a more consistent and integrated flow
communication:
• Less broadcasting, more narrow casting
• Proliferation of media and messages
• Fragmentation of flows and budgets
• Integrated marketing communications
• By using IMC, the company carefully integrates and coordinates its many communication channels to
deliver a clear, consistent, and compelling message about the organization and its brands.

Marketing Communication
Marketing communications —> Kotler: the means by which firms attempt to inform, persuade, and remind
consumers – directly or
indirectly – about the
products and brands that
they sell.
Integrated Marketing
Communications —> AMA:
A planning process
designed to assure that all
brand contacts received by
a customer or prospect for a
product, service, or
organization are relevant to
that person and consistent
over time.



2. Communication tools (or platforms)

The communication tools tend to be called channels or platforms.
The communication mix is the specific blend of promotion tools that the company uses to persuasively
communicate customer value and build customer relationships —> a very large number of companies try to
mix different platforms:
• Advertising —> connected to consumers, large number of customers, create awareness and salience,
imagery and personality.
• Sponsorship —> connected to consumers, large number of customers, create awareness and salience,
imagery and personality.
• Public Relations —> connected to consumers, large number of customers, create awareness and salience,
imagery and personality.
• Direct Marketing —> related to selling activities, large number of customers
• Sales Promotion —> related to selling activities, large number of customers, inspires actions and loyalty.
• Personal Selling —> targets specific numbers of customers and in particular, it sells to B2B markets or
market of services, inspires actions, loyalty and builds trust.
• Online and SM marketing —> related to the world of internet
• Mobile Marketing —> related to the world of internet
All those different tools share the same purpose but they have lot of differences. Their objectives are strictly
related to Keller’s Brand Equity Model:
• Salience - Brand Awareness
• Performance
• Imagery
• Judgment
• Feelings
• Resonance
—> Which shows the idea that tools have different objectives but they alla contribute to creating BE.

Communication tools - Main features
• Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by
an identified organization
• Reaches large geographically dispersed audiences often with high frequency
• Low cost per exposure though overall costs are high
• Consumers perceive advertised goods as legitimate
• Dramatizes company/ brand
Defining characteristics: Pervasive, Amplified expressiveness, Control.

• Sponsorship is the financial or material support of an event, activity, person, organization or product by an
unrelated organization or donor.
• Reaches large geographically dispersed audiences often with high frequency
• Low cost per exposure, overall costs may be very different
• Sponsored goods share sponsee’s legitimacy —> so the sponsored people or team are able to reflect
the perception on the sponsored group.
Defining characteristics: Relevant, Engaging and Implicit.

The impact and characteristic of advertising is related to mass media where the commercial is placed
(television: large audience, small cost; magazine: small audience, but well targeted and they have a higher
contact cost than other media and cannot repeat the message with higher frequencies)

• Public Relations is any communication intended to establish and promote a favorable relationship with the
public to protect and/or promote company’s image/products
• Highly credible
• Many forms: news stories, features, events…
• Reaches many prospects missed via other promotional tools
• Dramatizes company or benefits
• Often underused
Defining characteristics: High credibility, Hard-to-reach buyers and Dramatization.

• Direct marketing is communication seeking to elicit an action (order, visit or a request for further
information) from a selected group of consumers. —> reach target close to the need one.
• Many forms (telephone, online, mail…)
• Non public, Immediate, Customized, Interactive
• Well suited to highly targeted efforts
Defining characteristics: Customized, Up-to-date and Interactive.

• Sales promotions – Short- term incentives to encourage the purchase of sale of a product or service (but,
Loyalty programs). Wide assortment of tools: Consumer, trade promotions
• Makes use of a variety of formats (premiums coupons…
• Attracts attention, offers strong purchase incentives, dramatizes offers…)
• Stimulates quick response
• Short lived
• Not effective at building long term brand preferences
Defining characteristics: Attention getting, Incentive and Invitation.

• Personal Selling – Communication taking place through the direct interaction of sources and recipients —
> allows interaction between the seller and the customer.
• Most effective tool for building buyers ’preferences, convictions and actions
• Personal interaction allows for feedback and adjustments
• Relationship oriented
• Buyers are more attentive
• Sales force represents long term commitment
• Most expensive of the promotional tools
Defining characteristics: Personal interaction, Cultivation and Response.
Defining characteristics of WOM (Word of Mouth): Credible, Personal and Timely.

Communication/ promotions tools mono-directional —> he didn’t go through it, it’s more like more info
about the tools (si ripetono sopra).

Heuristic Models - Reach Cost
Quality (MCKinsey)











Choice of mix - RCQ
• Reach - Relevant consumers who are actually exposed (Number of exposed unique consumers – in target
segment level)
• Cost - The actual cost to reach relevant consumers (Cost per 1,000 unique consumers).
• Quality -The impact on behavior and/or attitudes of reached relevant consumers (A quality factor based
on changes in attitudes, engagement, behavior).

How to integrate communication tools?
At first you have advertising and then personal selling.
Advertising is about communication and personal selling is more about the purchase.

3. Advertising and Sales promotions – how they work

Marketing mix elasticities
Elasticities come from lot of researches. A very small change of price has a big impact in sales (ex: increase
of 1% you get a decrease in sales of 2.6%). Sales elasticities are very sensitive to price and to sales promotions.

Example of a research
• Price elasticity: -2.6 • Advertising elasticity: 0.12
• Price promotion elasticity: -3.6 +30% advertising investment = -1% price cut
• Personal selling elasticity: 0.35
Advertising elasticity













The impact of advertising
Very important in building brand equity, but does have any roles in increasing sales. Research has shown that
advertising-to-sales elasticity in the short term is very small (sometimes non- significant) and decreasing:
Meta-analytic studies
• Assmus et al. (1984): 0.24
• Sethuraman et al. (2011): 0.12
Why this decline in elasticity over time?
• Clutter: Media proliferation, increased competition makes consumers less able to recall advertised brands
• Recession: during recession consumers are more sensitive to price (promotion) than to advertising.

1. Advertising elasticities depends on the kind of categories of products and places where they apply it
(countries).
• Durables > non-durables
• Experience > search goods
• New products > established products
• Europe > US
• Print<TV
2. Competitive intensity may reduce elasticities by as much as 50%
3. Decreasing returns to scale
− For frequently bought products returns to advertising diminish
fast after the third exposure
• There is a ceiling to advertising effects
• The average advertising duration interval on sales is between 6 and 9 months
4. Long term impact on
– Stakeholders perception
– Brand equity
– Price sensitivity
Price advertising increases price sensitivity; non-price advertising diminishes price sensitivity.

The impact of promotions
On the other hand, research has shown that (price) promotions-to-sales elasticity in the short term is larger
than price elasticity: 3.6, which means that promotions have a higher impact on sales and lower impact on
returns. There’re different phenomena that should be remembered: only one promotion out of 10 is
successful in the short or middle/long term, promo don’t have long term impact, and the brand equity of a
brand is not influenced positively by promotions.
Promotions create both lagged and lead effect, because consumers engage in stockpiling and anticipate
future promotions.
• The unit sales effect of a promotion are associated with a decrease of competing brands (1/ 3); anticipation
and stockpiling by consumers (1/ 3); category expansion (1/ 3).
There is a threshold (lower than 10%) and a saturation effect (higher than 25 %). Respectively, changes below
and above these 2 points have no effect on sales.
The higher the frequency of a promotion the lower (toward zero) the price elasticity on the long term. The
deeper the last price discount the lower (toward zero) the price elasticity.
Higher market share brands are less deal elastic. Cross-promotional effects are asymmetric, and promoting
higher quality brands impacts weaker brands (and private label products) disproportionately.








—> Lead effect (after campaign) and Lagged effect (delaying your purchase, it’s at the beginning of the
promotion).


4. Consumer Decision Journey and the IMC

Example of sunglasses and eyeglasses, which are different from one another.

Stages of Consumer Decision Journey
1 Recognizes a need or want for a product or service 7 Develops concrete plans to try the brand
2 Knows about the brand 8 Consumes the brand
3 Actively considers the brand 9 Is satisfied with the brand experience
4 Searches and learns more about the brand 10 Becomes loyal repeat buyer of the brand
5 Evaluates the brand and forms favorable attitudes 11 Is engaged and interacts with the brand
6 Arrives at a positive value judgment and 12 Advocates for the brand actively
willingness to pay for the brand

Awareness, information, imagery, trust, emotion, action, loyalty and connect are the important
communications need and objectives.

IMC choice criteria
• Coverage
• Cost
• Contribution
• Commonality
• Complementarity • Cross-effects
• Conformability

Product and Brand Management
Product and brand management over time
(innovation diffusion and PLC)
(Class 15)


Take home message:
• Product/ service diffusion shows a typical S-shaped pattern, across industries and countries;
• The evolution of product/ service diffusion can be forecast with simple models
• Product/ service diffusion is driven by the characteristics of the innovation, by adopters ’characteristics
and by firms ’launch strategies
• Brands follow a completely different path over time and they envelop a number of different product/
service diffusion trajectories.


1. Introduction

Innovation plays a key role in business activities and is perceived as such. It has a strong impact on sales and
on firm’s revenues and profits. But it influences also its:
– Growth and diversification
– Reputation and image
• In addition, it is the only way to assure firm’s survival, because most products go through a life cycle (PLC)
that ends in a declining stage, and eventually are discontinued.


2. Diffusion patterns: Shape and timing AND Bass Model

Diffusion patterns – Shape and timing
• Many innovations are launched, but
many of them fail and disappear (ex:
FMCG 49% fails)
• Once they are established, usually,
innovations follow a typical diffusion
path – slow introduction, at first; then,
faster development in terms of
penetration and sales; slower growth,
afterwards; finally, stable equilibrium
(ex: Mobile phone penetration in Italy).
• This pattern applies to most
innovations, by and large, but it may
vary substantially.
• In many industries, especially high tech, diffusion times are shortening (the diffusion takes less time to
happen).
Cumulative adoption (stock) —> there’s a slow introduction, a very fast diffusion then we get to an inflection
point where the diffusion and growth slows down to reach the end. We measure in term of stock/penetration
(not sure).
Point diffusion (flow)—> after
the maximum the new adoption
slows down,









Diffusion patterns: The Bass Model for Durables
Bass Model, derived from epidemiological 2-stage models
• Penetration is driven, at the beginning, by external influence (firms ’pressure – value, price,
communication; innovation proneness on the part of adopters); afterwards, by internal influence
(contagion – word-of-mouth, imitation)
• Penetration is function of 3 different parameters – innovation rate, imitation rate and size of the market
at equilibrium.

Contagious and Hierarchal Diffusion
The spread of an infectious disease through the direct contact of individuals with those infected. When it
spreads through an ordered sequence of classes or place

External & internal influence Bass model (1969)















Impact of economic and cultural variables








Diffusion patterns The Bass Model for Durables

3. Drivers of diffusion (adopters, innovations, innovators ’strategies)

Drivers - Adopters
Adopters show a different readiness to adopt inno
5 segments (Rogers):
– Innovators
– Early adopters
– Early majority
– Late majority
– Laggards
It’s interesting because firms can target the
different type of segments to accelerate the
diffusion or slower it down.
• based on individual and relational attributes

Drivers - Innovation
Patterns of diffusion (shape, timing, penetration level) are related to the characteristics of innovation, and
especially to its (Rogers)
– Relative advantage (existing status quo)
– Complexity (how easy or complex is to adopt the innovation)
– Compatibility
– Divisibility/ trialability
– Communicability/ observability

Drivers - Entry strategies
• Intensity/ invest. level (penetration, skimming)
• Entry speed/ timing (early, late)
• Breadth (broad, narrow)
• Development trajectory (sequential vs simultaneous path - waterfall vs sprinkler)
• Integration level (integr., disint.)

Penetration vs Skimming strategy
• Penetration
– Logic: Build MS and acquire competitive advantage/barriers to entry
– Economics: High volumes, Low unit margins (high overall margins?)
– Investments: High (product, price, promotion, communication, distribution)

• Market skimming
– Logic: Take fully advantage of the value of your offer, by addressing segments that place a high value on it
– Economics: Low volumes, High unit margins.
– Investments: Low


4. The Product Life Cycle

Sales and Profits Over the Product ’s Life from Inception to Decline


















Summary of Product Life-Cycle Characteristics, Objectives, and Strategies













5. Brand management over time

Brands differ from products and brand management over time is not like Product Life Cycle management.
Actions on brand over time address 2 sets of concerns:
a. Development and growth of Brand equity
b. Targeting and Brand positioning

They are concentrated mainly in 3 different areas:
1.Brand extension
2.Brand reinforcement
3.Brand revitalization

1. Brand extension

Example of Golf’s transformation from 1974 to 2012


2. Reinforcing brands

Reinforcing brands
– Maintaining Brand Consistency
– Protecting Sources of Brand Equity
– Fortifying versus Leveraging
– Fine-Tuning the Supporting Marketing Program

Maintaining brand consistency
- Product innovation and relevance are paramount in maintaining continuity and expanding the meaning of
the brand
- Reinforcing brand equity requires consistency in the amount and nature of the supporting marketing
program for the brand
- Effective brand management requires taking a long-term view and adopting proactive strategies designed
to maintain and enhance customer-based brand equity over time
- Marketers reinforce brand equity by actions that consistently convey the meaning of the brand.

Protecting Sources of Brand Equity
- Unless the company makes the strategic positioning of the brand less powerful, there is little need to
deviate from a successful positioning
- Brands should always look for potentially powerful new sources of brand equity. Top priority is to preserve
and defend those that already exist
- Key sources of brand equity are of enduring value

Fortifying versus Leveraging
- Marketers can design marketing programs that mainly try to capitalize on or maximize brand awareness
and image
- Without its sources of brand equity, the brand itself may not continue to yield valuable benefits.

Fine-tuning the marketing program
- Most important consideration in reinforcing brands is consistency in the nature and amount of marketing
support
- The strategy for reinforcing brand meaning depends on the nature of the brand association
- In managing brand equity, managers have to make trade-offs between those marketing activities that:
• Fortify the brand and reinforce its meaning,
• Attempt to leverage or borrow from its existing brand equity to reap some financial benefit
- Revitalizing a brand requires marketers to either recapture lost sources of brand equity or establish new
ones.



Brand
Reinforcement
Strategies











3. Revitalizing brands

Expanding Brand Awareness
– Identifying Additional or New Usage Opportunities
– Identifying New and Completely Different Ways to Use the Brand

Improving Brand Image
– Identifying the Target Market
– Repositioning the Brand
– Changing Brand Elements

Adjustments to the Brand Portfolio
– Migration Strategies
– Acquiring New Customers
– Retiring Brands

Brand Revitalization Strategies


















Product Life Cycle
Introduction Stage of PLC
• Sales: Low
• Costs: High cost per customer
• Profits: Negative or low
• Customers: Innovators
• Competitors: Few
• Marketing objective: Create product awareness and trial.
Marketing strategies:
– Product: Offer a basic product.
– Price: Use cost-plus pricing.
– Distribution: Build selective distribution.
– Advertising: Build product awareness among early adopters and dealers.
– Promotion: Use heavy promotion to entice product trial.

Growth Stage of PLC
• Sales: Rapidly rising
• Costs: Average cost per customer
• Profits: Rising profits
• Customers: Early adopters
• Competitors: Growing number
• Marketing objective: Maximize market share.

Strategies:
– Product: Offer product extensions, service,
– Price: Price to penetrate the market.
– Distribution: Build intensive distribution.
– Advertising: Build awareness and interest in the mass market.
– Promotion: Reduce to take advantage of heavy consumer demand.

Maturity Stage of PLC
• Sales: Peak sales
• Costs: Low cost per customer
• Profits: High profits
• Customers: Middle majority
• Competitors: Stable number beginning to decline
• Marketing objective: Maximize profits while defending market share.

Strategies:
– Product: Diversify brand and models.
– Price: Match or best competitors.
– Distribution: Build more intensive distribution.
– Advertising: Stress brand differences and benefits.
– Promotion: Increase to encourage brand switching.

Decline Stage of PLC
• Sales: Declining sales
• Costs: Low cost per customer
• Profits: Declining profits
• Customers: Laggards
• Competition: Declining number
• Marketing objective: Reduce expenditures and milk the brand.

Strategies:
Decline Stage of PLC
– Product: Phase out weak items.
– Price: Cut price.
– Distribution: Go selective—phase out unprofitable outlets.
– Advertising: Reduce to level needed to retain hard-core loyals.
– Promotion: Reduce to minimal level.

Practical Problems of PLC
• When used carefully, the PLC may help develop good marketing strategies.
• However, in practice, it is difficult to:
– Forecast sales level, length of each stage, and shape of PLC.
– Develop marketing strategy because strategy is both a cause and result of the PLC.
• Marketers should avoid blindly pushing products to next stage and instead seek ways to rescue products
and growth sales.

Brand extensions
• Brand extensions occur when a firm uses an established brand name to introduce a new product
• Basic assumption behind brand extension - Consumers have some awareness of and positive associations
about the parent brand in memory; Brand extension will evoke at least some of these associations
• The extension’s ability to establish its own equity will depend on:
– Salience of consumers ’associations with the parent brand
– How compelling and relevant is the evidence about the corresponding attribute
– How strong consumers ’existing attribute or benefit associations are for the parent brand

New products and brand extensions
Brand extensions
– Line extension - Adds a different variety, a different form or size, or a different application for the brand
– Category extension - Marketers apply the parent brand to enter a different product category from the one
it currently serves

Facilitates new product acceptance
– Improve Brand Image
– Reduce Risk Perceived by Customers
– Increase the Probability of Gaining Distribution and Trial
– Increase Efficiency of Promotional Expenditures
– Reduce Costs of Introductory and Follow-Up Marketing Programs
– Avoid Cost of Developing a New Brand
– Allow for Packaging and Labeling Efficiencies
– Permit Consumer Variety-Seeking

Provide Feedback Benefits to the Parent Brand
– Clarify Brand Meaning
– Enhance the Parent Brand Image
– Bring New Customers into the Brand Franchise and Increase Market Coverage
– Revitalize the Brand
 – Permit Subsequent Extensions

Disadvantages of brand extensions
• Can confuse or frustrate consumers
• Can encounter retailer resistance
• Can fail and hurt parent brand image
• Can succeed but cannibalize sales of parent brand
• Can succeed but diminish identification with any one category
• Can succeed but hurt the image of the parent brand
• Can dilute brand meaning
• Can cause the company to forgo the chance to develop a new brand

Understanding How Consumers Evaluate Brand Extensions
• Managerial assumptions
- Consumers have some awareness of and positive associations about the parent brand in memory
- At least some of these positive associations will be evoked by the brand extension
- Negative associations are not transferred from the parent brand
- Negative associations are not created by the brand extension

Evaluating brand extension opportunities
• Define actual and desired consumer knowledge about the brand
• Identify possible extension candidates
• Evaluate the potential of the extension candidate
• Design marketing programs to launch extension
• Evaluate extension success and effects on parent brand equity

Brand extension – key factors
• Functional credentials/ competences are a key influence
• Some brands are more ‘elastic ’than others
• Brand Elasticity is linked to brand personality, broader brand values, and diversity
• Brand strength in the existing realm of expertise does NOT drive brand elasticity.
 Product and Brand Management
The Value Offer - Services
(Class 11)
Take home message:
1. Services are an important component of the value offer
2. Services are very different from goods
3. In the management of services, key is the process of interaction between service providers and
service users
4. In the interaction, we focus on the physical environment, contact personnel and users


1. The Importance Of Services

Competition and Value creation
• Competition is shifting the focus from a basic Value offer, based on products, to a richer Value offer,
based on services and experience.
• Competitors can increase the value they provide to their customers by adding valued features &
benefits, by adding services and/ or by creating a valuable customer experience.
• Economic models are therefore moving from a model based on commodities to a model based on
services and experiences.

Competitive dynamics and Product/ service integration
• Due to competition, competitors are driven to increase the value of their offer – from a basic to a
richer offer, from generic to potential product.
• Services play an important role in such a process and are an important driver of value.
• Product/ services integration:
– Essential benefit (core benefit)
– Generic product (base version)
– Expected product (expected attributes, tangible and services)
– Augmented product (additional services and benefits)
– Potential product (likely future additions, to increase attractiveness) – 24 hours/ 7 days connection,
courtesy car...
Product-related services
a) servedifferentpurposes–maintainingorincreasing the value of the product, facilitating the actions of
the consumers, providing consumers with a more effective experience, customizing the offer for
particular target markets, etc.;
b) addresstargets,withdifferentelasticitytoservices;
c) contribute to the relationship with final consumers (from being simply a vendor to partnering with
clients for the creation of tailor-made offerings).

2. Beyond Products

The service economy – role of services
Services account for over 70% of total economic activity in most OECD countries.
Growth of services has outpaced overall economic growth in the OECD area, a trend which is
expected to continue.
Services are playing a greater role in business cycles, and knowledge-based services linked to
information technology (IT) may be an important engine in overall growth.
The service economy involves a large set of activities:
• Trade • Real estate • Administrative support
• Transportation • Professional, scientific & • Waste management
• Finance and insurance technical • Education
• Management
Apple’s services
iTunes store, App Store, iCloud, Apple Music, Apple TV, Apple Pay Revenues quarterly 2019
Services $12.7bn (out of $260.17bn)

Manufacturing firms – Beyond Products
• Branch out into services to stay competitive.
Some truck manufacturers, for instance, don’t just offer vehicles; they sell maintenance and service
packages, as well as driver-training programs. In some cases, they even sell services that go well
beyond caring for trucks, such as advising clients about improving their logistics operation.
• Why the push into services?
In part, necessity. In the fiercely competitive global market, companies must do whatever they can
to stand out. But companies that have successfully made the move say there are substantial
benefits, too.
• For one thing, unlike products, services often deliver a regular stream of income. They also require a
lower fixed capital investment, and frequently bring higher margins, than products do. What’s more,
they can be tougher for rivals to copy—which can bring big competitive advantages.
• Then there’s marketing. Companies say they can build on their existing products, brand image and
customer base when pitching a line of services. And when an existing customer buys services as well
as products, it builds loyalty, since the two companies work together much more closely.
For all of that promise, though, making services work isn’t easy, and success is far from assured.
• Service transition strategies (from product- to service-centric business) add to shareholders value,
but only after reaching a critical mass (25-30%)
• Motivations: Why the push into services?
o necessity (competition)
o regular stream of income
o lower fixed capital investment
o higher margins
o tougher for rivals to copy
o exploit opportunities - building on existing products, brand image (brand extension) and customer
base
o loyalty
• Hurdles –
o new territory without any clear strategy
o difficult to make customer pay for services
o internal resistance


3. Service – Definition and Distinguishing/ Specific Features

Services and their characteristics
• A service is any act or performance that one party can offer to another, that is essentially
intangible and does not result in the exchange of anything physical.
• Services are...
– intangible
– produced and consumed simultaneously
– with the involvement of customers in the process
• Therefore, services
– cannot be stocked (perishable, non reservable)
– are not easy to standardize and depend on the performance of both service providers and users
(variable, human touch, entangled)
• They are difficult to evaluate. In the evaluation, both outcomes and processes are involved.
Product VS Service

 4. The Servuction Model (Service Production)

• Service package
• Support activities (back office)
• Interaction process (front office) – Clients, Service Personnel, Physical evidence

Ethnic food restaurant (Korean attributes)
• Food taste • Attentive serves • Lightning
• Cleanliness • Accurate check • Food authenticity
• Food presentation • Décor and Design • Comfortable atmosphere
• Reliable Service • Food Variety • Portion Size food
• Prompt service • Fair price • Availability of healthy
• Prompt service • Aroma of the restaurant option

Service Package • Veg/gluten free etc.

• Location
• Ease of access Interaction components
• Brand image • Prompt service
• Price • Cleanliness
• Ethnicity • Reliable service
• Food variety • Attentive servers
• Food taste • Accurate check
• Food presentation • Decor and design
• Quality of products • Aroma of the restaurant
• Portion size • Lighting
• Healthy choice • Comfortable atmosphere

 SERVICE QUALITY
Physical Characteristics Attribute
• Time to book a table
• Promprt service
• Time to line up/wait to enter • Tangibles
• Time to order • Reliability
• Time to get your meal • Assurance
• Time to pay • Responsiveness
• Empathy
• Time to leave etc



SERVQUAL’S FIVE DIMENSIONS
1) Tangibles: Appearance of physical facilities, equipment, personnel and communication materials.
• Reflect physical attribution of service
o – Modern-looking equipment;
o – Visually appealing physical facilities;
o – Employees are neat in appearance;
o – Materials associated with the service are visually appealing.

2) Reliability: Ability to perform the promised service dependably and accurately.
• Keep Promise
o Promise to do something;
o Solve customers’ service problems reliably;
o Provide services at the right time;
o Provide services at the time they promise to do; – Error-free service.

3) Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence.
• Inspire Trust and Confidence
o Employees can instill confidence in customers;
o Make customers feel safe in the transactions;
o Employees are consistently courteous with customers;
o Employees have the knowledge to answer customer questions.

4) Responsiveness: Willingness to help customers and provide prompt service.
• Willing to help customers
o Tell customers exactly when service will be performed;
o Give prompt service to customers;
o Willing to help customers;
o Never too busy to respond to customer requests.
5) Empathy - Caring, individualized attention the firm provides its customers.
a. Treat customers with understanding
o Give customers individual attention;
o Employees give customers personal attention;
o Remember customer benefits;
o Employees understand the specific needs of customers;
o Have operations convenient to all customers.

5. The Service Blueprint

Service blueprinting is a process-based approach for service design.
It depicts the sequence of service activities and tasks in a dynamic manner. It describes the critical
touch points between the customer and service provider, hidden support, management activities in
different layers of the organization, and all physical evidences seen by customers.
A service blueprint consists of two dimensions : “the horizontal axis represents the chronology of
actions conducted by the service customer and service provider. The vertical axis distinguishes
between different area





6. The Serviscapes

The term servicescape connotes a physical, material setting designed and built to shape
consumption behavior.
It is made of: Physical facility (interior & exterior) and ambient conditions (temp. colors, noises,
smells..)
It can be supplemented by other tangibles
Servicescape
o Facility exterior o Facility interior
o Exterior design o Interior design
o Signage o Equipment
o Parking o Signage
o Landscape o Layout
o Surrounding environment o Air quality/temperature
• Kotler, atmospherics - the conscious design of buying environments “to produce specific emotional
effects in the buyer that enhance his purchase probability” (3 forms: architecture, interior design,
and window dressing)



 Product and Brand Management
Digital Marketing and SEO/SEM
(Class 12- Guest Speaker)
What Is a Marketing Funnel?
A marketing funnel is a way of breaking down the customer journey all the way from the
“awareness” stage (when they first learn about your business) to the “purchase” stage (when they're
ready to buy your product or service)
3 ways of funnel:
1. Top of the funnel (TOFU)
2. Middle of the funnel (MIFU)
3. Bottom of the funnel (BOFU)

Strategy and method - 4 stages
• Buyer personas (define the target)
o A buyer persona is not merely a description of your buyer. As hundreds of our partners and
customers can tell you, simply profiling your buyer results in too many personas and not nearly
enough marketing guidance.
• Impost/create the funnel
• Implementation of activities
• Monitoring and fine tuning
How to create a funnel

 Attract - Some of the most important facets of the inbound marketing methodology to attract the
right users to your site are:
Search Engine Optimization: Before you start with content marketing, or really any part of your
inbound marketing plan, you need to make sure you are targeting the appropriate keywords. There's
definitely a balance of trying to target keywords that you want to search for though, versus what
people are actually searching for when they are researching producing and services. This is where
having a tool that helps you aggregate that data comes into place. When optimizing your website
and content, focus on keywords that are built around your products/services, what challenges you
are solving for the visitor, how your products can help them, frequently asked questions, etc.
Convert - Here is where you start to see the rewards of all your content efforts. Turning website
visitors into leads begins with having them submit their contact information through your site.
A lead is simply a person who has expressed interest in your company’s product, information, or
service. Obtaining their information and saving their contact information into a comprehensive CRM
will keep them updated in all channels of communication within your business.
Close - The next step in the inbound marketing methodology is “closing” your leads and turning
them into happy customers. Because this goal is consumer-focused, the process is typically a joint
sales and marketing effort. Your leads should become “sales-qualified” and ready to buy by the end
of this step.
Delight - With inbound marketing you don’t abandon your customers once they have made a
purchase. Your goal is to establish brand loyalty, and in order to do so you need to continue to show
your customers that you still value them.
The tools
To obtain the best results from an inbound marketing strategy, the synergistic use of the most
important tools / channels will be fundamental:
• Search Engine Marketing: promotion through search engines.
• Social Media Marketing: updating and attracting new customers through the most popular social
channels.
• Content Creation e Curation: constant creation of new contents and updating of those already
present.
• Email Marketing: creating and sending emails you have contacts acquired to feed the leads
generated.
• Data Analysis: constant analysis of the data collected to review and optimize individual campaigns
by channel and all the flow of the conversion funnel.
• Creativity: creation and development of creativity and digital material to support the creation of
content.
Search Engine Marketing
Search engine marketing (SEM) is a digital marketing strategy used to increase the visibility of a
website in search engine results pages (SERPs). While the industry term once referred to both
organic search activities such as search engine optimization (SEO) and paid, it now refers almost
 exclusively to paid search advertising.
Search engine marketing is also alternately referred to as paid search or pay
Social Media Marketing
Social media are interactive computer-mediated technologies that facilitate the creation or sharing
of information, ideas, career interests and other forms of expression via virtual communities and
networks.
The variety of stand-alone and built-in social media services currently available introduces
challenges of definition; however, there are some common features:[2]
Content Creation e Curation
Content Creation is the process
of creating your own content from scratch and marketing it to your followers or subscribers. Content
Curation is the process of gathering existing information like blogs, social media posts or, ebooks
relevant to a particular topic and sharing it with your brand's followers
Email Marketing
Email marketing is a form of direct marketing that uses electronic mail as a means of communicating
commercial or fundraising messages to an audience. In its broadest sense, every email sent to a
potential or current customer could be considered email marketing.
Data Analysis
Data analysis is a process of inspecting, cleansing, transforming and modeling data with the goal of
discovering useful information, informing conclusion and supporting decision-making.
The approach
You must always think of proposing to support the customer in all stages of strategy development
starting from the identification of the buyer person, following the choice of the most suitable
channels for communication up to the revision of the data and the optimization of the acquisition
processes.


SEO
What is SEO?
Process of optimizing structure, design and content of yor website in order to increase ca index at
the top results of SERPs
It also boosts your search engine ranking with its various promotional activities.

Why it is important?
• Free advertising and long term
• Promotion/advertising of your products/service
• Brand Awareness
• Increase number of visitors through organic search traffic
• Increase and maintain search engine ranking of your website
• More traffic = More money

Who are the players?

What is a Website?
• Collection of related web pages, including multimedia content, usually identified with a common
domain name, and published on at least one web server.
• Structure of website, creation of WordPress sample website
• Website URL, HTML
• Header, title, description
• Body: actual content of webpage
• Footer
• Sitelinks
• Google webmaster tool and website verification
• Create sitemap

Types of SEO
• On page SEO optimization
• Off page SEO optimization

TIPOLOGIE DI KEYWORDS

Commercial - High commercial intent keywords are like invitations from prospective customers.
They beg you to tempt them with your wares. They tell you, loud and clear, that they have money in
their hands (or burning holes in their pockets), and they want what you're selling right now
Informational - Informational keywords are keywords w hich are used to
find information about a particular topic, person, product or service. When searching for products or
services, search engine users use Informational keywords to find (background) information t o help
them with their decision making process.
Navigational - Navigational keywords are used the find specific brand, website or location. The user
intend is very clear because the searcher is looking for a specific location (literally or virtually). Some
examples of Brand / website related Navigational queries: Facebook, Google and YouTube.
Transactional – Transactional keywords are keywords or keyword phrases potential customers use
to find the services or product they are looking to buy. ... Transactional keyword examples: Buy,
purchase, deal, discount, cheapest, for sale, where to buy, coupon

 Product and Brand Management
The Value Offer - Experience
(Class 13)

Take home message:
• The Value offer in an increasing number of industries is based on experiences.
• Experiences are built upon a host of different aspects - sensory, affective, cognitive, behavioral
• Traditional and experiential buying processes differ.
• And so does the Customer Experience Management process
• Introduction – the importance of experience


1. The Introduction – The importance of Experience

Competition and value creation
Competition is shifting the focus from a basic Value offer, based on products, to a richer Value offer,
based on services and experience.
Competitors can increase the value they provide to their customers by adding valued features &
benefits, by adding services and/ or by creating a valuable customer experience.
Economic models are therefore moving from a model based on commodities to a model based on
experience.

Price-Offering Correlation ex. coffee

• Experience
• Service
• Product
• Commodity
• Entertainment
• social, relax
• convenience
• basic need


Manage interactions to add value

Economic Models (From Pine and Gilmore 1997)


Red= experiential brands

2. Experience definition and metrics

What is an experience?
• Something that happens to you that affects how you feel
• Brand experience...subjective, internal consumer responses (sensations, feelings, and cognitions)
and behavioral responses evoked by brand-related stimuli that are part of a brand’s design (Schmitt)
• Customer experience (CX) is the totality of a customer’s interactions with a company or brand. How
customers perceive their interactions with your company (Forrester)
• An experience occurs when a company intentionally uses services as the stage, and goods as props,
to engage individual customers in a way that creates a memorable event (Pine and Gilmore)
• Experiences are driven by a very large array of variables, related to the product itself, associated
services and a few additional elements
• CE Measures:
o Forrester index: meets needs, easy, enjoyable/effectiveness, ease, emotions;
o EXQ (Klaus+Maklan):product experience, outcome focus, moments-of-truth, peace-of-mind;
o BE multiple dimensions: sensory, affective, behavioral, intellectual/ cognitive
Foster’s customer experience index - “ Thinking of your interactions with these firms over past 90
days”

How we calculate Customer Experience Index Scores – Ex. Acmwe

CEI and its impact

Customer experience index ex. PC Manufacturer

 Distribution of industry scores CEI index

B2. Customer experience dimensions
• Product experience refers to the importance of customers’ perception of having choices and the
ability to compare offerings.
• Outcome focus is associated with reducing customers’ transaction cost, such as seeking out and
qualifying new providers, reflecting the importance of goal-orientated experiences in consumer
behaviour.
• Moments-of-truth emphasises the importance of service recovery and flexibility, in dealing with
customers once complications arise.
• Peace-of-mind describes the customer’s assessment of all the interactions with the service provider
before, during and after the purchase of the service (emotional aspects).
• Product experience
– I need to choose between different options at XYZ. – I need to receive offers from more than just
XYZ.
– I need to compare different options from XYZ.
– I have one designated contact at XYZ.
• Outcome focus
– Staying with XYZ makes the process much easier. – XYZ gives me what I need swiftly.
– I prefer XYZ over an alternative provider.
– The people at XYZ can relate to my situation.
• Moments-of-truth
– XYZ was flexible in dealing with me and looked out for my needs. – XYZ keeps me up to date.
– XYZ is a safe and reputable company.
– The people at XYZ have good people skills.
– XYZ deal(t) with me correctly when things go (went) wrong.
• • Peace of mind
– I am confident in XYZ’s expertise.
– The whole process with XYZ was easy.
– XYZ will look after me for a long time.
– I stay with XYZ because of my past dealings with XYZ.
– I have dealt with XYZ before so getting what I needed was really easy.
– XYZ give(s) independent advice.

B3. Brand experience scale
• Sensory
o “I find this brand interesting in a sensory way”
o “This brand makes a strong impression on my visual sense or other senses”
o “This brand does not appeal to my senses”

• Affective
o This brand induces feelings and sentiments”
o “I do not have strong emotions for this brand”
o “This brand is an emotional brand”
• Cognitive
o “This brand stimulates my curiosity and problem solving”
o “I engage in a lot of thinking when I encounter this brand”
o “This brand does not make me think”
• Behavioral
o “I engage in physical actions and behaviors when I use this brand”
o “This brand results in bodily experiences”
o “This brand is not action oriented”

Brand Experiences measures and dimensions




3. Experiential Model

• Traditional and experiential models differ widely
o customers are rational and emotional
o focus on consumption
o customer consumption as an holistic experience
• The experiential model can be translated into 5 strategic modules
o Sense
o Feel
o Think
o Relate
o Act
• The Customer Experience Management process
o Analyze the experiential world
o Build the experiential platform
o Design the brand experience
o Structure the customer interface
o Engage in continuous innovation


 Experiential model

Comparison between buying processes
• Cognition
o Attribution
o Alternatives
• Affect
o Preference
o Intention
• Behaviour à Purchase
• Representation à holistic representation
• Emotions à Attraction
• Pleasure à Hedonic Gratification
Comparison between models
traditional experiential
• Interest in purchase itself • Participation to experience
• Exstrinsic motivations • Intrinsic motivations • Priority to emotional
• Priority to cognitive factors factors
• Purchase determined by exogenous factors • Purchase determined by intrins. factors
• Product as aggregate of different • Product as gestalt
components


4. Experiential Marketing

Sense – Feel – Think – Relate – Act à to offer holistic experiences
Strategic Experiential Modules – 1
• SENSE
o appeals to the senses
o create sensory experiences through sight, sound, touch, taste, & smell
• FEEL
o appeals to customers’ inner feelings & emotions
o create affective experiences that range from mildly positive moods to strong emotions
• THINK
o appeals to the intellect
o create cognitive, problem-solving experiences that engage customers’ convergent & divergent
thinking through surprise, intrigue, & provocation
• RELATE
o relates the individual to his or her ideal self, other people, or cultures
o appeals to the individual’s desire for self-improvement, to be perceived positively by other
individuals, or associate with a broader social group
• ACT
o aims to affect bodily experiences, lifestyles, & interactions
o enriches customers’ lives by enhancing their physical experiences, showing them alternative ways of
doing things, alternative lifestyles, & interactions
Customer Experience Management

1. Analyxe the experiential world of the client

2. Build the Experiential Platform
What? Experiential positioning
Why? Experiential Value Promise (EVP)
How? Overall implementation theme

3. Design the brand experience
o The product
• Functional attributes
• Experiential attributes
• Product Aesthetics
o Look and feel
• Visual identity
• Experiential Events
• Experiential Websites
o Communications
• Form USP (unique selling position) To ESP (Experiential selling paradigm

4. Structuring the customer interface


5. Engaging in continuous innovation

5. Customer Experience Management

Customer Satisfaction and related concepts
Customer satisfaction
Extent to which the product’s perceived performance matches a buyer’s expectations
A person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived
performance (or outcome) in relation to his or her expectations.
1. Customer Satisfaction index
2. Net Promoter score
3. Customer Engagement index
Antecedents and consequences of CS
• Disconfirmation paradigm
• Satisfaction is determined by the comparison of perceived performance with expectations
Satisfaction = f(Δ perceived – expected performance)
• Role of expectations, of ideals, of satisfaction as such.
• Satisfaction effects repeat buying, positive w-o-m (net promoter), “cross buying”
o Satisfaction à repeat buying, word of mouth, “cross buying”
ACSI Index
• The ACSI score is derived from three questions, each rated on a 1-10 scale
• ACSI score calculated as follows:
• ((Satisfaction)*.3885 + (Expectancy)*.3190 + (Performance)*.2925)/9*100
• The actual weights used vary by industry and are proprietary. The weights used in the example are
those of the state of Ohio.

ACSI MODEL

b) Net Promoter score
• The Net Promoter Score is obtained by asking customers a single question on a 0 to 10 rating scale,
where 10 is "extremely likely" and 0 is "not at all likely": "How likely is it that you would recommend
our company to a friend or colleague?"
• Based on their responses, customers are categorized into one of three groups: Promoters (9–10
rating), Passives (7–8 rating), and Detractors (0–6 rating).
• The percentage of Detractors is then subtracted from the percentage of Promoters to obtain a Net
Promoter score (NPS).
• NPS can be as low as -100 (everybody is a detractor) or as high as +100 (everybody is a promoter).
An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent.
c) Customer engagement - definition and measure
• Customer engagement is “a psychological state that occurs by virtue of interactive, co-creative
customer experiences with a focal agent/ object...under a specific set of context-dependent
 conditions...and exist as a dynamic interactive process...in which other relational concepts...are
antecedents and/ or consequences “(Brodie)
• "the level of a customer’s cognitive, emotional and behavioral investment in specific brand
interactions," (Hollebeek)


CE Metrix

Root metrics
Action metrics
• Duration of visit
• Frequency of visit • RSS feed Subscription
• % repeat visits • CE metrics
• Bookmarks, tags, ratings
• Recency of visit
• Viewing of high-value or medium-value
• Depth of visit (% of site visited) content
• Click-through-rate • Inquiries
• Sales • Providing personal information
• Downloads
• Lifetime value
• Content resyndication
Hollebeek – dimensions of CE: • Customer reviews
– Cognitive (immersion) • Comments
– Emotional (passion) • Ratio between posts and comments
–Behavioral (activation)

Overall, it is suggested that while satisfaction is a better indicator for consuming a product or service
when a collection of alternatives is being evaluated (as in the decision to repurchase – intention to

buy), engagement is a better indicator that customers will consume a product or service with
greater frequency and intensity. (Calder et al, MSI)
Measuring customer Engagement
Across a variety of industries – including B2C and B2B Gallup’s research has consistently shown a
powerful link between customer engagement and key business outcomes.
Consumers who are fully engaged represent an average 23% premium in terms of share of wallet,
profitability, revenue, and relationships growth compared with the average customer. In stark
contrast, actively disengaged consumer represent a 13% discount in those same measures.
The 3 items that produce the Gallup Customer Engagement score (Gallup CES) are:
1. Company always deliver what they promise
2. I feel proud to be a company customer
3. Company is the perfect company for people like me

Conceptual model of customer engagement



 The Analysis of CS
• Identify attributes
• Measure overall satisfaction
• For each attribute, measure
o Satisfaction The analysis of CS
o (Importance – stated, derived)
• For each attribute, calculate the impact on overall satisfaction
• Measure intention to repeat buying, w-o-m, cross-buy
• Assess the importance/ impact of attributes

Modified Quadrant Analysis – Priorities

 Product and Brand Management
The management of product and brand por5olios
(Class 17)

Take home message:

• Firms, even smaller one, are very o5en mul7- business and are dealing with a por>olio of products
• In order to manage the por>olio, they resort to Business Por>olio Models
• Brands call for a different approach:
- Brand Por>olios can be analyzed and managed as product por>olio do.
- But in addi7on, their connec7ons need to be taken into account and Brand Hierarchies have to
considered.

1. Designing products’ por2olios

• Business/ Product Por5olio - The collec7on of businesses (SBU) and products that make up the company.
• (Strategic) Business Unit - A unit of the company that has a separate mission and objec7ves and that can be
planned independently from other company businesses.
An SBU can be a company division, a product line within a division or, some7mes, a single product or
brand (examples follow).
• The role of individual businesses/products and por>olios on growth

A very broad business por5olio

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Growth drivers and role of product por5olios

Revenue CAGR

Where to compete’ vs. ‘how to compete’

Average revenue growth disaggrega7on, %, 1999-2005

Designing Business Por5olios

• Most businesses (even the small-sized ones) are mul7-business and derive their growth from the
management of the por>olio of ac7vi7es.
• Therefore, they need to design their business por>olio. To do so, they ought to
– Analyze current business or product por>olio and define strategies for growth and downsizing;
– Decide ac7vi7es to develop, maintain, harvest or scrap;
– Choose how to allocate resources among those ac7vi7es.
• The models that have been designed to manage the por>olio have focused on 2 variables:
– Market growth or market a^rac7veness (market)
– Market share or compe77ve strength (compe77ve posi7on)

Main models:
A. Boston Consul7ng Group (BCG): based on Market Growth and rela7ve Market Share; Market Growth is
resource-consuming; MS is resource-genera7ng. 2x2 matrix, combining H/L values; 4 different categories
B. McKinsey/ GE: based on Market A^rac7veness and Compe77ve Posi7on, measured by developing mul7-
item indices. 3x3 matrix, combining H/M/L values; 9 different categories

The BCG approach categories

• H growth, H rela7ve MS – star – balance; need resources to sustain growth.
• L growth, H rela7ve MS – cash cows – posi7ve cash flows; able to provide.

2
• H growth, L rela7ve MS – quesGon marks – nega7ve cash flows; need resources to improve compe77ve
posi7on.
• L growth, L rela7ve MS – dogs – nega7ve (marginally) cash flows; can be dismissed.

The BCG Approach objecGves and resource allocaGon

• Sustain and reinforce Stars
• Invest heavily on and develop Ques7on Marks
• Maintain and milk Cash Cow
• Disinvest from Dogs

3
2. The management of brand architectures: Brand por2olio/architecture strategy

Developing a Brand Architecture strategy

The firm’s brand architecture strategy provides general guidelines about its branding strategy and which
brand elements to apply across all the different products sold by the firm.
Key components
1. Brand por5olio - the set of different brands that a firm offers for sale to buyers in a par7cular category.
House of Brands vs Branded House (and combina7ons)
2. Brand hierarchy - the number and nature of common and dis7nc7ve brand components across the firm’s
set of brands.
Number and kind of Levels

1. Defining Brand Poten7al – The brand vision

– The brand boundaries
– The brand posi7oning
2. Iden7fying Brand Extension Opportuni7es
– Line and category extensions
– Equity implica7ons
3. Branding New Products and Services
– Brand strategy

Brand por>olio analysis (1)

Brand hierarchy analysis (2 and 3)

Branding strategies

P&G detergents –washing powders

• Tide
– Is so powerful; it cleans down to the fiber • Cheer
– All purpose family detergent for extra-tough – Color Guard gives “outstanding cleaning and color
laundry jobs. – “Tide’s in, dirt’s out” protec7on.

4
– Clothes look clean, bright, and more like new.
• Oxydol • Ivory snow
– Contains bleach. – Ninety-nine percent and forty-four one hundredths
– Makes your white clothes really white and your percent pure
colored clothes really bright. – “Mild, gentle soap for diapers and baby clothes”
– “So don’t reach for the bleach -- grab a box of • DreX
Ox!” – Formulated for baby’s diapers and clothes
• Gain – Contains borax - nature’s natural sweetener
– Originally P&G’s “enzyme” detergent – “A clean you can trust.”
– Reposi7oned as the detergent that gives you • Dash
clean, fresh smelling clothes – P&G’s value entry
– “Freshens like sunshine” – A^acks tough dirt
• Bold – “Dash does it for a great low price.”
– Detergent with fabric so5ener • Era Plus
– “Cleans, so5ens, and controls sta7c with fabric – Built-in stain removers
so5ener scent” – “Gets tough stains out and does a great job on your
whole wash too.”

Role of brands in Brand Por5olios

• Flankers • Well-defined role
– Protec7ve or fighter brands • Clear posi7oning
– Fighter brands shouldn’t
cannibalize other brands
• Cash Cows
– Sustainable with no resources
– With strong brand equity
• Low-End, Entry-Level or High-
End, PresGge Brands
– To a^ract customers to the
brand franchise
– To add pres7ge and credibility
to the en7re por>olio
5
Brand – Product Matrix

Brand Levels (with example)

• Company brand (corporate image) consumer associa7ons to the company or corpora7on) ex: FCA
• Family brand (range or umbrella brand, more categories) ex: Jeep
• Individual brand (one category, insulated from other brands, no leverage from other brands) ex: Renegade
• Modifier (specific item or model type or a par7cular version or configura7on of the product) ex: Sport
• Product descriptor (describes what the product is and does and Helps define the relevant compe77on in
consumers’ minds)

Designing a Brand Hierarchy

• Desired Awareness and Image at Each Hierarchy Level
• Combining Brand Elements from Different Levels
• Linking Brand Elements to Mul7ple Products

Brand architecture guidelines

• Adopt a Strong Customer Focus
• Create Broad, Robust Brand Pla>orms
• Avoid Overbranding and Having Too Many Brands
• Selec7vely Employ Sub-Brands
• Selec7vely Extend Brands

Example of brand extension —> Kinder

3. The management of brand architectures: Brand extension

New Products and Brand Extensions

• Brand extensions occur when a firm uses an established brand name to introduce a new product
• Basic assump7on behind brand extension - Consumers have some awareness of and posi7ve associa7ons
about the parent brand in memory; Brand extension will evoke at least some of these associa7ons
• The extension’s ability to establish its own equity will depend on:
– Salience of consumers’ associa7ons with the parent brand
– How compelling and relevant is the evidence about the corresponding a^ribute
– How strong consumers’ exis7ng a^ribute or benefit associa7ons are for the parent brand

6
Brand extension advantages and key success factors
• Advantages:
– Facilitates new product acceptance
– Provide Feedback Benefits to the Parent Brand
• Brand extension:
– Line extension - Adds a different variety, a different form or size, or a different applica7on for the brand
– Category extension - Marketers apply the parent brand to enter a different product category from the one
it currently serves
• Key success factors:
– Brand name effect – strength of the parent brand
– Similarity effect – fit between parent brand and extension
– Involvement effect – involvement in the extension’s product category
– Marke7ng power effect – marke7ng power off the company
• Facilitates new product acceptance
– Improve Brand Image
– Reduce Risk Perceived by Customers
– Increase the Probability of Gaining Distribu7on and Trial
– Increase Efficiency of Promo7onal Expenditures
– Reduce Costs of Introductory and Follow-Up Marke7ng Programs
– Avoid Cost of Developing a New Brand
– Allow for Packaging and Labeling Efficiencies
– Permit Consumer Variety-Seeking
• Provide Feedback Benefits to the Parent Brand
– Clarify Brand Meaning
– Enhance the Parent Brand Image
– Bring New Customers into the Brand Franchise and Increase Market Coverage
– Revitalize the Brand
– Permit Subsequent Extensions

Disadvantages of Brand Extensions

• Can confuse or frustrate consumers
• Can encounter retailer resistance
• Can fail and hurt parent brand image
• Can succeed but cannibalize sales of parent brand
• Can succeed but diminish iden7fica7on with any one category
• Can succeed but hurt the image of the parent brand
• Can dilute brand meaning
• Can cause the company to forgo the chance to develop a new brand

Understanding How Consumers Evaluate Brand Extensions

• Managerial assump7ons
– Consumers have some awareness of and posi7ve associa7ons about the parent brand in memory
– At least some of these posi7ve associa7ons will be evoked by the brand extension
– Nega7ve associa7ons are not transferred from the parent brand
– Nega7ve associa7ons are not created by the brand extension

7
8
 Product and Brand Management
Marke1ng strategy – Targe1ng & Posi1oning
(Class 18)

1. Targe)ng - Choice of targets

Designing a Customer-Driven Marke1ng Strategy

In concept, marke>ng boils

down to two ques>ons:
Which customers will we
serve?
How will we serve them?
Of course the tough part is
coming up with good answers
to these simple-sounding but
difficult ques>ons. The goal is
to create more value for the
customer we serve than
compe>tors do.

Segmenta1on, Targe1ng and Posi1oning

Targe1ng - process
• Process to evaluate and select market segments, by considering
a. Segment a?rac1veness - segment size and growth; structural a=rac>veness (compe>>on, subs>tute
products, power of buyers and suppliers,...); fit with company objec>ves and company resources;
profitability
b. Compe11ve posi1on – market share; reputa>on; product quality; entrenchment in distribu>on;
effec>veness and efficiency.

1
Targe1ng - Segment A?rac1veness Criteria

Evalua1on/ a?rac1veness Evalua1on/ compe11ve posi1on

Segment Evalua1on

2
2. Targe)ng - Approach towards targets

Demographic Targe1ng by Age

Crest targets adults with the ad and product on the leS, and children with the ad and product on right.

This figure covers a pre=y

broad range of targe>ng
s t ra t e g i e s , f ro m m a s s
marke>ng (virtually no
targe>ng) to individual
marke>ng (customizing
products and programs to
individual customers). An
e xa m p l e o f i n d i v i d u a l
marke>ng: at myMMs.com
you can order a batch of
M&Ms with your face and
personal message printed
on each li=le candy.

Approach towards targets

• Mass-marke>ng is a market-coverage strategy in which the firm decides to ignore market segment
differences and go aSer the whole market with one offer
• Differen>ated marke>ng is a market-coverage strategy in which the firm decides to target several market
segments and designs separate offers for each
• Concentrated marke>ng is a market-coverage strategy in which the firm goes aSer a large share of one or a
few segments or niches
• Micromarke>ng (local or individual marke>ng)

3. Compe)tors’ analysis
1. Iden)fica)on of compe)tors
2. Compe)tors’ analysis

Compe11on and compe1tors’ analysis

• Compe>>on revolves around compe>>ve advantage, i.e. the advantage over compe>tors gained by
offering greater customer value, either through lower prices (cost leadership) or by providing more benefits
that jus>fy higher prices (differen>a>on).
• Building a strong compe>>ve posi>on requires an understanding of compe>>on.
• To effec>vely devise and implement the best possible differen>a>on strategy, companies must pay keen
a=en>on to their compe>tors.
1. First of all, they have to understand who their compe>tors are;
2. Then, they have to understand their compe>>ve advantage and how powerful a threat they provide,
in terms of resources, capabili>es and strategies.

Defining compe11on boundaries/ intensity

Marketers must overcome “marke>ng myopia” and stop defining compe>>on in tradi>onal, “industry” or
category, terms. They need to think in “market” terms - compe>tors are firms that sa>sfy the same customer
need (product subs>tutability).
3
By taking into account subs>tutability, they can iden>fy also external (across industries) compe>tors.
They can also understand how strong is compe>>on coming from different groups of compe>tors.

• “Internal compe>>on” (within industry) vs “External compe>>on” (across industries)

– Brand compe>>on (Coca Cola vs. Pepsi Cola)
– Category compe>>on (Cola vs. pure water)
– Generic (budget) compe>>on (Santana vs. real estate)

• Iden1fying compe1tors
– “Naive” approach
– Perceptual maps (customer-based)
• Compe1tors’ analysis
– Performance – sales, MS, horizontal penetra>on, loyalty
– Strengths and weaknesses (SW)
– Marke>ng strategies (targe>ng, posi>oning)
– Marke>ng mix

The product market can be segmented by price, or by product type. We need to posi>on the brand
compared to its compe>tors and name product a=ributes.

4. Posi)oning: Differen)a)on & posi)oning

Differen1a1on strategies
• Differen>a>on strategies are based upon the idea that clients have different needs, mo>ves and
expecta>ons and that they value different offers.
• Not all differences are relevant and each of them may add value to the customers, but also costs to the
firm.
• Relevant differences are those that may result in a compe>>ve advantage in the target market.

Leverage strategically advantaged resources

• Product characteris1cs
– features, performance, durability, conformance, reliability, style, etc.
• Service a?ributes
– delivery, installa>on, consulta>on, customer training, repair, etc.
• Personnel
– competency, credibility, courtesy, responsiveness, etc.
• Brand image
– symbols, emo>on, personality, etc.

Differen1a1on and posi1oning – Key Concepts

• Differen1a1on (What you do as an offering): Crea>ng tangible or intangible differences on one or more
a=ributes between a focal offering and its main compe>tors.
• Posi1oning (How your customers perceive your offer): The impact of strategies developed by firms to
differen>ate their offering in the minds of their target customers. Successful posi>oning results in the
offering occupying a dis>nct, important, and sustainable posi>on in the minds of the target customers.

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The value proposi1on - consists of the whole cluster of benefits the company promises to deliver

Posi1oning
• The way the product is defined by consumers on important a=ributes—the place the product occupies in
consumers’ minds rela>ve to compe>ng products.
• Posi>oning is not based on objec>ve characteris>cs but on percep>ons...
• Therefore, in posi>oning we do not value the a=ributes of products, brands or companies but how they are
perceived by consumers.
• Posi>oning is made of all the percep>ons, sensa>ons, evalua>ons of a customer regarding a product or
service.

Successful Posi1oning Themes

Apple iPod —> 1000 songs
BMW —> Excep>onal performance
Burger King —> Have it your way
Charmin Tissue —> SoSness
Coke —> Authen>c, real, original

Posi1oning is a compe11ve or compara1ve percep1on…

It is a percep>on that is always shaped in rela>on to other products, companies or brands. In other words,
posi>oning depends on the other offers available to the consumer

How many differences to promote?

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Single Difference Strategy
• The Unique Selling Proposi>on
• Mercedes: Great automo>ve engineering
Double Benefit Strategy
• Volvo: Safest and Luxurious
Triple Benefit Posi1oning
• Aquafresh toothpaste: An>cavity protec>on, Be=er breath, Whiter teeth:3 colored toothpaste
• Lever 2000 soap: cleansing, deodorizing, and moisturizing

5. Posi)oning: Posi)oning process

Posi1oning - the process

1. Iden>fying a set of bases of compe>>ve advantage (a=ributes) on which to build a posi>on.
2. Developing a posi>oning statement:
3. Selec>ng an overall posi>oning strategy (and the appropriate marke>ng mix).

Choice of a?ributes for posi1oning

• Important: Does the difference deliver a highly valued benefit to a sufficient number of buyers?
• Dis1nc1ve: Is the difference not offered by others or offered in a more dis>nc>ve way by the company?
• Superior: Is the difference superior to other ways of obtaining the same benefit?
• Communicable: Is the difference communicable and visible to buyers?
• Preemp1ve: Is the difference difficult to be copied by compe>tors?
• Affordable: Can the buyers afford to pay for the difference?
• Profitable: Will the company find it profitable to introduce the difference?

Keys to successful posi1oning

• Clarity
• Consistency
• Credibility
• Compe>>veness.

6. Posi)oning: Posi)oning statement

Posi1oning Statements
To (target segment and need) our (brand) is a (concept) that (point-of-difference).
Ex: “To busy mobile professionals who need to always be in the loop, Blackberry is a wireless
connec>vity solu>on that allows you to stay connected to people, and resources while on the go,
more easily and reliably than the compe>ng technologies.”

Posi1oning (ex: easy jet)

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Objec1ves: To offer our clients safe and well-priced airplane transporta>on, developing and offering a
product and coherent and trust-worthy prices that result a=rac>ve both for the tourist and business traveler
for some European routes.
Posi1oning Proposal: Safe, affordable, and easy to buy Airplane transporta>on.

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