CHAPTER 3:

Planning and Implementing Brand Marketing Programs

 Choosing brand elements to build brand equity

 Criteria for choosing brand elements
 Options and tactics for brand elements
 Designing marketing programs to build brand equity
 New perspectives on marketing
 Personalizing Marketing
 Product strategy
 Pricing strategy
 Channel strategy
 Integrating marketing communications to build brand equity
 Four major marketing communication options
 Brand amplifiers
 Developing Integrated Marketing Communication programs
 Book chapter: 5

 Designing marketing programs to build brand equity

 New perspectives on marketing
 Personalizing Marketing
 Product strategy
 Pricing strategy
 Channel strategy
  New Perspectives on Marketing
The strategy and tactics behind marketing programs have
changed dramatically in recent years as firms have dealt with
enormous shifts in their external marketing environments:
 Rapid technological developments
 Greater customer empowerment
 Fragmentation of traditional media
 Growth of interactive and mobile marketing options
 Channel transformation and disintermediation
 Increased competition and industry convergence
 Globalization and growth of developing markets
 Heightened sustainability concerns
 Greater empowerment of consumers
  New Perspectives on Marketing
The New Capabilities of the New Economy
 Consumers
― Can wield substantially more customer power.
― Can purchase a greater variety of available goods
and services.
― Can obtain a great amount of information about
practically anything.
― Can more easily interact with marketers in placing
and receiving orders.
― Can interact with other consumers and compare
notes on products and services.
  New Perspectives on Marketing
The New Capabilities of the New Economy
 Companies
― Can operate a powerful new information and sales channel with
augmented geographic reach to inform and promote their
company and its products.
― Can collect fuller and richer information about their markets,
customers, prospects, and competitors.
― Can facilitate two-way communication with their customers and
prospects, and facilitate transaction efficiency.
― Can send ads, coupons, promotion, and information by e-mail to
customers and prospects who give them permission.
― Can customize their offerings and services to individual
customers.
― Can improve their purchasing, recruiting, training, and internal
and external communication.
 Personalizing Marketing
To adapt to the increased consumer desire for personalization,
marketers have embraced concepts such as experiential marketing
and relationship marketing.

 Experiential marketing
 Relationship Marketing
Mass Customization
One-to-one marketing
Permission marketing
 Personalizing Marketing

 Experiential Marketing
 Promote the product in a way that connects it with
the audience in a unique and interesting manner.
 Experiences can come in 4 varieties:
 Entertainment
 Education

 Aesthetic

 Escapist
 Bernd H. Schmitt details
Five different types of marketing experiences
that are becoming increasingly vital to consumers’
perceptions of brands: .
 Sense marketing appeals to consumers’ senses (sight, sound, touch,
taste, and smell).
 Feel marketing appeals to customers’ inner feelings and emotions,
ranging from mildly positive moods linked to a brand to strong emotions of
joy and pride.
 Think marketing appeals to the intellect in order to deliver
cognitive, problem-solving experiences that engage customers creatively.
 Act marketing targets physical behaviors, lifestyles, and interactions.
 Relate marketing creates experiences by taking into account
individuals’ desires to be part of a social context.
 Brand Experience Scale
by Bernd H. Schmitt and His colleagues
 Relationship Marketing

Relationship marketing attempts to provide a more holistic,

personalized brand experience to create stronger consumer
ties.

Relationship marketing focuses on customer loyalty and

long-term customer engagement rather than shorter-term
goals like customer acquisition and individual sales.
 Relationship Marketing
Benefits of relationship marketing:
• Acquiring new customers can cost five times as much
as satisfying and retaining current customers.
• The average company loses 10 percent of its
customers each year.
• A 5 percent reduction in the customer defection rate
can increase profits by 25–85 percent, depending on
the industry.
• The customer profit rate tends to increase over the life
of the retained customer.
 Relationship Marketing
Mass Customization
Mass customization is a marketing and
manufacturing technique that combines the
flexibility and personalization of custom-made
products with the low unit costs associated with
mass production.
 Relationship Marketing
Mass Customization: APPROACHES
 Relationship Marketing
Benefits of Mass Customization
• Mass customization enables consumers to
distinguish themselves with even basic purchases.
• Retailers can reduce inventory, saving warehouse
space and the expense of keeping track of
everything and discounting leftover merchandise.
 Relationship Marketing
One-to-One Marketing: Don Peppers and Martha Rogers
One-to-one marketing (sometimes expressed as 1:1
marketing) is a customer relationship management
(CRM) strategy emphasizing personalized interactions
with customers. The personalization of interactions is
thought to foster greater customer loyalty and better
return on marketing investment.

The basic rationale is that consumers help add value

by providing information to marketers; marketers
add value, in turn, by taking that information and
generating rewarding experiences for consumers.
 Relationship Marketing
One-to-One Marketing:

One-to-one marketing is thus based on several

fundamental strategies:
• Focus on individual consumers through
consumer databases—“We single out consumers.”
• Respond to consumer dialogue via
interactivity—“The consumer talks to us.”
• Customize products and services—“We make
something unique for him or her.”
 Relationship Marketing
Permission Marketing
Permission marketing is the privilege (not the
right) of delivering anticipated, personal and relevant
messages to people who actually want to get them.

Permission marketing, the practice of marketing to

consumers only after gaining their express permission,
was another influential perspective on how companies
can break through the clutter and build customer loyalty.
 Relationship Marketing
Permission Marketing
Seth Godin identifies five steps to effective
permission marketing:
1. Offer the prospect an incentive to volunteer.
2. Offer the interested prospect a curriculum over time,
teaching the consumer about the product or service being
marketed.
3. Reinforce the incentive to guarantee that the prospect
maintains his or her permission.
4. Offer additional incentives to get more permission from
the consumer.
5. Over time, leverage the permission to change consumer
behavior toward profits.
 Reconciling the Different Marketing
Programs
Supporting marketing mix should be designed to enhance
awareness and establish desired brand image.

 Product strategy
 Pricing strategy
 Channel strategy
  Product Strategy
Product strategy entails choosing both tangible and
intangible benefits the product will embody and
marketing activities that consumers desire and the
marketing program can deliver.

A range of possible associations can become linked

to the brand—some functional and performance-
related, and some abstract and imagery-related.
Perceived quality and perceived value are particularly
important brand associations that often drive
consumer decisions.
  Product Strategy
 Perceived quality
 Product Quality

 Brand attitudes

 After marketing: Managing customers post-purchase

 User manuals

 Customer Service Program

 Loyalty programs
  Product Strategy
 Perceived quality
Perceived quality is customers’ perception of the overall
quality or superiority of a product or service compared
to alternatives and with respect to its intended purpose.

Product quality depends not only on functional product

performance but on broader performance
considerations as well, like speed, accuracy, and care of
product delivery and installation; the promptness,
courtesy, and helpfulness of customer service and
training; and the quality of repair service.
  Product Strategy
 Perceived quality
Brand attitudes may also depend on more abstract
product imagery, such as the symbolism or
personality reflected in the brand.
Finally, consumer evaluations may not
correspond to the perceived quality of the product
and may be formed by less thoughtful decision
making, such as simple heuristics and decision rules
based on brand reputation or product
characteristics such as color or scent.
  Product Strategy
 After Marketing: Managing customers post-purchase
Marketing activities that occur after customer
purchase.

Innovative design, thorough testing, quality

production, and effective communication—
through mass customization or any other means—
are without question the most important
considerations in enhancing product consumption
experiences that build brand equity.
  Product Strategy
 After Marketing: Managing customers post-purchase
Means to enhance consumption experiences.
 user manuals
 customer service programs
 loyalty programs
  Product Strategy
 After Marketing: user manuals
To enhance consumers’ consumption
experiences, marketers must develop user
manuals or help features that clearly and
comprehensively describe both what the
product or service can do for consumers and
how they can realize these benefits.
  Product Strategy
 After Marketing: Customer Service Programs
Customer service is the process of ensuring
customer satisfaction with a product or service.
Customer service is the provision of service to customers
before, during and after a purchase.
Some characteristics of good customer service include:
 Promptness
 Politeness
 Professionalism
 Personalization
  Product Strategy
 After Marketing: Loyalty or frequency programs

Their purpose is “identifying, maintaining, and

increasing the yield from a firm’s ‘best’ customers
through long-term, interactive, value-added
relationships.
  Product Strategy
 After Marketing: Loyalty or frequency programs

Types of Loyalty Marketing Programs

1. Rebate/Cash Back Program
2. Discount Program
3. Frequency/Club or Punch Card Programs
4. Points Program
 Pricing Strategy
 Price is the one revenue-generating element of the
traditional marketing mix.
 Price premiums are among the most important brand
equity benefits of building a strong brand.
 Consumer price perceptions
 Consumers often rank brands according to
price tiers in a category.

 Setting prices to build brand equity

 Value pricing
 Pricing Strategy
 Consumer price perceptions
Consumers often rank brands according to price tiers in a
category.
 Pricing Strategy
 Consumer price perceptions
 There is also a relationship between price and quality.
 Within any price tier, there is a range of acceptable
prices, called price bands, that indicate the flexibility
and breadth marketers can adopt in pricing their brands
within a tier.
 Consumer purchase decisions are based on consumers’
perceived prices, however, not the marketer’s stated
value.
 Pricing Strategy
 Consumer price perceptions
When examining or considering an observed price, however,
consumers often compare it with internal frames of reference
(prices they remember) or external frames of reference (a posted
“regular retail price”).
Forms of Internal reference prices:
“Fair price” (what product should cost)
Typical price
Last price paid
Upper-bound price (the most consumer would pay)
Lower-bound price (the least consumer would pay)
Competitive prices
Expected future price
Usual discounted price
 Pricing Strategy
 Setting Prices to Build Brand Equity

Choosing a pricing strategy to build brand equity means

determining:

A method for setting current prices

A policy for choosing the depth and duration of
promotions and discounts.
 Pricing Strategy
 Setting Prices to Build Brand Equity

method for setting current prices

 value-pricing approach
 Pricing Strategy
 Setting Prices to Build Brand Equity
method for setting current prices
 value-pricing approach
The objective of value pricing is to uncover the right blend
of product quality, product costs, and product prices
that fully satisfies the needs and wants of consumers and
the profit targets of the firm.
An effective value-pricing strategy should strike the proper
balance among three key components:
• Product design and delivery - improved
• Product costs -- lower the cost
• Product prices -- match the consumer perception
 Pricing Strategy
 Setting Prices to Build Brand Equity

method for setting current prices

 value-pricing approach
 razor-and-blade pricing model
(printer pricing model)
 freemium model
 pay-as-you-wish pricing
 Pricing Strategy
 Setting Prices to Build Brand Equity
A policy for choosing the depth and duration of
promotions and discounts.
 communicating value

 price segmentation

 everyday-low-pricing (EDLP)
EDLP has received increased attention as a means of
determining price discounts and promotions over time.
 Channel Strategy
Marketing channels are defined as sets of
interdependent organizations involved in the
process of making a product or service available for
use or consumption.
 Channel strategy includes –
designing and managing direct and indirect
channels to build brand awareness and improve the
brand image.
 Channel Design
 Direct channels
 Selling through personal contacts from the company to
prospective customers by mail, phone, electronic means,
in-person visits, and so forth
 Company-owned stores
 Store-within-a-store
 Phone, mail, electronic means
 Indirect channels
 Selling through third-party intermediaries such as agents
or broker representatives, wholesalers or distributors, and
retailers or dealers
 Push and pull strategies
 Channel Support
 Retail segmentation
 Cooperative advertising
 Online strategies
 Push and Pull Strategies
 By devoting marketing efforts to the end
consumer, a manufacturer is said to employ a
pull strategy.
 Alternatively, marketers can devote their selling
efforts to the channel members themselves,
providing direct incentives for them to stock
and sell products to the end consumer. This
approach is called a push strategy.
 Channel Support
 Two such partnership strategies are retail segmentation
activities and cooperative advertising programs.
 Retail segmentation
 Retailers are “customers” too
 Cooperative advertising
 A manufacturer pays for a portion of the advertising that a retailer
runs to promote the manufacturer’s product and its availability in the
retailer’s place of business.
 Web Strategies
 Advantage of having both a physical “brick and
mortar” channel and a virtual, online retail
channel
 The Boston Consulting Group concluded that
multichannel retailers were able to acquire
customers at half the cost of Internet-only
retailers, citing a number of advantages for the
multichannel retailers.
 Book Chapter 6
 Integrating marketing communications to build brand equity
 Four major marketing communication options
 Brand amplifiers
 Developing Integrated Marketing Communication
programs
 Overview
 Marketing communications are the means by which
firms attempt to inform, persuade, and remind
consumers—directly or indirectly—about the
brands they sell.
 The New Media Environment
 Traditional advertising media such as TV, radio,
magazines, and newspapers seem to be losing
their grip on consumers.
 Marketers pour more than $332.84 billion into
Internet advertising in 2020.
 Social Media accounts for 17-20% of digital
advertising expenditure.
 Simple Test for
Marketing Communications
 Information Processing Model
of Advertising Effects (William McGuire, 1978)

1. Exposure
2. Attention
3. Comprehension
4. Yielding
5. Intention
6. Behavior
Four Major Marketing Communications Options

 Advertising and Promotions

 Interactive marketing
 Events and experience
 Mobile Marketing
 Advertising
Advertising is any paid form of nonpersonal presentation
and promotion of ideas, goods, or services by an
identified sponsor.
 A powerful means of creating strong, favorable, and
unique brand associations and eliciting positive
judgments and feelings
 Controversial because its specific effects are often
difficult to quantify and predict
 Nevertheless, a number of studies using very different
approaches have shown the potential power of
advertising on brand sales.
 Ideal Ad Campaign
The ideal ad campaign would ensure that:
1. The right consumer is exposed to the right message at
the right place and at the right time.
2. The creative strategy for the advertising causes the
consumer to notice and attend to the ad but does not
distract from the intended message.
3. The ad properly reflects the consumer’s level of
understanding about the product and the brand.
4. The ad correctly positions the brand in terms of desirable
and deliverable points-of-difference and points-of-parity.
5. The ad motivates consumers to consider purchase of the
brand.
6. The ad creates strong brand associations to all of these
stored communication effects so that they can have an
effect when consumers are considering making a purchase.
 Category of Advertising
 Television
 Radio
 Print
 Direct response
 Place advertising:
 Billboards; movies, airlines, and lounges; product placement;
and point-of-purchase advertising
 Promotions
 Short-term incentives to encourage trial or usage of a
product or service
 Marketers can target sales promotions at either the
trade or end consumers
Consumer promotions
Consumer promotions are designed to change the choices,
quantity, or timing of consumers’ product purchases.
Trade promotions
Trade promotions are often financial incentives or discounts
given to retailers, distributors, and other members of the
trade to stock, display, and in other ways facilitate the sale of
a product.
Four Major Marketing Communications Options

 Advertising and Promotions

 Interactive marketing
 Events and experience
 Mobile Marketing
 Interactive Marketing/
Online Marketing Communications
 Online brand-building tools:
(1) Web sites,
(2) online ads and videos, and
(3) social media.
 Social media comes in many forms, but six key
options are: (1) message boards and forums, (2)
chat rooms, (3) blogs, (4) Facebook, (5) Twitter,
and (6) YouTube.
 Event Marketing and Sponsorship
 Event marketing is public sponsorship of events
or activities related to sports, art, entertainment,
or social causes.
 Event sponsorship provides a different kind
of communication option for marketers. By
becoming part of a special and personally
relevant moment in consumers’ lives, sponsors
can broaden and deepen their relationship with
their target market.
 Mobile Marketing
 As smartphones are playing an increasingly
significant role in consumers’ lives, more marketers
are taking notice, and MANA predicts mobile ad
spending to pass $110 billion in 2017 and that was
only $ 1 billion in 2011 .
 Geotargeting occurs when
marketers take advantage of
digital technology to send
messages to consumers based
on their location and the
activities they are engaging in.
 Brand amplifiers
 Public Relations and Publicity
 Buzz Marketing
 Public Relations and Publicity
 Public relations and publicity relate to a variety of
programs and are designed to promote or
protect a company’s image or its individual
products.
Buzz Marketing
Buzz marketing is a viral marketing technique that is
focused on maximizing the word-of-mouth potential of a
particular campaign or product, whether that is through
conversations among consumers' family and friends or
larger scale discussions on social media platforms.
Integrated Marketing Communications
(IMC)
 The “voice” of the brand
 A means by which it can establish a dialogue and
build relationships with consumers.
 Allow marketers to inform, persuade, provide
incentives, and remind consumers directly or
indirectly
 Can contribute to brand equity by establishing
the brand in memory and linking strong,
favorable, and unique associations to it
 Developing IMC Programs
 Mixing communication options
 Evaluate all possible communication options
available to create knowledge structures according
to effectiveness criteria as well as cost considerations.
 Different communication options have different
strengths and can accomplish different objectives.
 Determine the optimal mix
Criteria for IMC Programs: the 6 Cs

1. Coverage
2. Contribution
3. Commonality
4. Complementarity
5. Conformability
6. Cost
Criteria for IMC Programs: the 6 Cs
 Coverage: What proportion of the target audience
is reached by each communication option
employed? How much overlap exists among
options?
Criteria for IMC Programs: the 6 Cs
 Contribution: The collective effect on brand equity
in terms of
 enhancing depth and breadth of awareness
 improving strength, favorability, and uniqueness of
brand associations

 Commonality: The extent to which information

conveyed by different communication options
share meaning
Criteria for IMC Programs: the 6 Cs
 Complementarity: The extent to which different
associations and linkages are emphasized across
communication options
 Conformability - ability of communications to
create the desired result even on different groups
of customers, e.g. where one group has been
exposed to the brand before and one group has
not.
 Cost: What is the per capita expense?
Marketing Communication Guidelines
 Be analytical: Use frameworks of consumer
behavior and managerial decision making to
develop well-reasoned communication programs
 Be curious: Fully understand consumers by using
all forms of research and always be thinking of
how you can create added value for consumers
 Be single-minded: Focus message on well-defined
target markets (less can be more)
 Be integrative: Reinforce your message through
consistency and cuing across all communications
Marketing Communication Guidelines
(Cont.)
 Be creative: State your message in a unique fashion;
use alternative promotions and media to create
favorable, strong, and unique brand associations
 Be observant: Monitor competition, customers,
channel members, and employees through tracking
studies
 Be realistic: Understand the complexities involved
in marketing communications
 Be patient: Take a long-term view of communi-
cation effectiveness to build and manage brand
equity