Brand Management

Module-8
IMT Hyderabad

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Designing marketing programs to build Brand Equity

• Identify some of the new perspectives and developments in marketing

• Describe how marketers enhance product experience
• Explain the rationale for value pricing
• List some of the direct and indirect channel options
New Perspectives on Marketing
• Companies are dealing with enormous shifts in their external marketing environments:
• Marketing strategies and tactics have changed dramatically; marketers are increasingly moving away from
mass market strategies

• 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 environmental, community, and social concerns
• Rise of omni channels
The New Capabilities of the New Economy
Consumers
Wield substantially more power.
Purchase a greater variety of goods
and services.
Obtain a great amount of information
Easily interact with marketers in
placing and receiving orders.
Interact with other consumers and
compare notes
Companies
Operate a powerful new information and sales channel with
augmented geographic reach to inform and promote
Collect fuller and richer information about their markets
Facilitate two-way communication with customers and
prospects, and facilitate transaction efficiency.
Send ads, coupons, promotions, and information by e-mail
to customers and prospects
Customize their offerings and services to individual
customers.
Improve their purchasing, recruiting, training, and internal
and external communication.
Integrating Marketing
• Personalizing Marketing
• Reconciling the Different Marketing Approaches

• Marketers must now provide seamlessly integrated solutions & personalised

experiences to
• Create awareness
• Build demand
• Generate loyalty
Personalizing Marketing
• Rapid expansion of the Internet and continued fragmentation of mass media have
brought the need for personalized marketing
• Modern economy celebrates the power of the individual consumer
• Marketers have embraced concepts such as experiential marketing and relationship
marketing
Personalising Marketing
• Experiential marketing
• Promotes a product by communicating features and
benefits and connecting it with unique and interesting
consumer experiences
• Relationship marketing
• Transcend an actual product or service to create stronger
bonds with consumer
• Maximize brand resonance
• Mass customization
• Making products to fit customers’ exact specifications
• Digital-age technology enables customized products
• Permission marketing
• The practice of marketing to consumers only after gaining
their express permission
Reconciling the Different Marketing Approaches
• Mass customization and one-to-one and permission marketing are:
• Potentially effective means of getting consumers more actively engaged with a
brand
• According to the customer-based brand equity model:
• Different approaches emphasize different aspects of brand equity
Product Strategy
• Perceived Quality
• Customers’ perceptions of overall quality or superiority of a product
or service
• Compared with alternative
• With respect to its intended purpose

• Managing Customers Post-Purchase (Aftermarketing)

• Product strategies should focus on both purchase and
consumption
• Particularly important in the context of e-commerce
• Processes or programs that can help with managing customers
post-purchase
• User manuals
• Customer service programs
• Loyalty programs
Pricing Strategy
• Price is the one revenue-generating element of the traditional
marketing mix
• Price premiums are among the most important benefits of
building a strong brand

• Choosing a pricing strategy to build brand equity means

determining
• A method for setting current prices, and
• A policy for choosing the depth and duration of promotions
and discounts
• Factor related to costs of making and selling a product and relative
price of competing product are important determinant in pricing
strategy
• However, firms are putting greater importance on consumer
perceptions and preferences
Price Tiers in the Ice Cream Market
Services Provided by Channel Members

Source: Reprinted from Donald Lehmann and Russell Winer, Product Management, 2nd ed. (Burr
Ridge, IL: Irwin, 1997), Figure 13-8 on p 379. © The McGraw-Hill Companies.
age
Setting Prices to Build Brand Equity
• Value Pricing
• Communicating Value
• Price Segmentation
• Everyday Low Pricing
• Reasons for Price Stability
Setting Prices to Build Brand Equity
• Value pricing
• Objective is to uncover the right blend of product quality, product
costs, and product prices
• That fully satisfies the needs and wants of consumers
• As well as the profit targets of the firm

• Successful value-pricing strategy should strike a balance among

• Product design and delivery
• Product costs, and
• Product prices
Value based Vs Cost based price

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Setting Prices to Build Brand Equity
• Just delivering good value is not sufficient for achieving pricing success
• Consumers need to understand and appreciate the value of the brand
• Value is not always obvious
• Must be communicated
Setting Prices to Build Brand Equity
• Price segmentation
• Sets and adjusts prices for appropriate market segments (eg: Airlines)

• Everyday low pricing

• Avoids the sawtooth pattern of alternating price increases and decreases
• Avoids discounts
• In favor of a more consistent set of “everyday” base prices on products
Channel Strategy
• Channel design
• Direct channels
• Selling through personal contacts from the company to
prospective customers
• Mail, phone, electronic means, or in-person visits
• Online

• Indirect channels
• Selling through third-party intermediaries
• Agents, broker representatives, wholesalers or
distributors, or retailers or dealers
Direct Channels
• Manufacturers may choose to sell directly to
consumers
• Brand equity issues of selling through direct
channels include:
• Company-owned stores
• Store-within-a-store
• Online
Indirect Channels
• Retailers tend to have the most visible and direct contact with customers
• Has the greatest opportunity to affect brand equity
• Push and pull strategies
• Channel support
• Retail segmentation
• Cooperative advertising
Omnichannels

• Seamless experience for consumer

• Stronger brand loyalty
• More share of wallet

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