MARK 495:

Strategic
Marketing
Planning
Fall 2023
Managing Sustainable Competitive
Advantage: Brand Based SCA
Iman El Meniawy
Agenda
• Approaches for Managing Sustainable
Competitive Advantage
• Evolution of Sustainable Competitive
Advantage in Marketing
• Customer Equity Perspective
• Customer Experiments
• Framework for Managing Competitive
Advantage
• Inputs to the Sustainable Competitive
Advantage Framework
• Outputs of the Sustainable Competitive
Advantage Framework
• Process for Managing Sustainable
Competitive Advantage
 Customer Dynamics: A
Fundamental Assumption
of Marketing Strategy

Marketing principle #2: All competitors react

3
Criteria for Sustainable
Competitive Advantages
1. Customers care about what this SCA offers
2. The firm does it better than competitors, which
generates a relative advantage
3. The SCA must be hard to duplicate or substitute,
even with significant resources

4
Marketing-Based Sources
of Sustainable
Competitive Advantage
Brands
• More effective for consumer goods
• Advertising, PR, sponsors
Offerings
• R&D
• New products and services
• New technologies
Relationships
• More effective for B2B goods, services,
intangibles, and complex or risky
offerings
• Salespeople, any boundary spanner,
online relationships

5
Market-based Sources of SCAs

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Example: Starbucks (US)
• Brand
• valued at $5.4 billion
• customers feel emotionally attached to brand
• Offering
• unique coffee-based drinks
• Unique store environments
• Relationships
• With employees in local stores - remember their orders or recognize their
names
• SCA created through BOR strategies
• increase customers’ loyalty
• Makes it hard for competitors to overcome barriers.
• SCA Maintenance
• innovate its offerings (e.g., Teavana tea products)
• Provide technology-based services (e.g., mobile payment
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In Class Exercise on SCA
• Take a few minutes to describe 3 purchases
• Bought for brand _______________
• Top two reasons why __________ & ____________
• What would it take for you to change _______________
• Bought for offering _______________
• Top two reasons why __________ & ____________
• What would it take for you to change _______________
• Bought for relationship _______________
• Top two reasons why __________ & ____________
• What would it take for you to change _______________
• If it takes a lot for you to change then firm has built a
strong SCA © Palmatier 8
8
All Competitors
React
1. Technical innovations that provide
competitors with a platform to Marketing Principle #3: all competitors react
launch a disruptive offering and an effective marketing strategy must
2. Exploiting changes in customers’ manage the firm’s sustainable competitive
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desires due to cultural, advantage (SCA)
environmental, or other factors
3. Individual entrepreneurship that
constantly seeks a better way to
solve a problem
4. “Me-too” copycats that improve
the efficiency or effectiveness of an
existing execution
Evolution of
Approaches for
Managing Sustainable
Competitive
Advantage in
Marketing

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Customer Equity Perspective: Brand, Offering, Relationship Equity Stack

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 Using Experiments to
Determine Customer
Equity
• Randomly divide customers
into groups (2 to 3)
• Do nothing to one group
(control group)
• Do your test
(conditions/treatments) to
other group(s), but nothing else
(ideally customers and
employees involved don’t know
the difference; “double blind”)
• After period of time test the
difference in outcomes across
groups and see if it varied
significantly
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Customer Equity
• BOR equities are often the primary source of a firm’s
SCA
• To make optimal decisions, a firm needs a
framework that measures, tracks, and reports
customer equities
• Effective customer equity systems represent a SCA in
their own right.

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Marketing Principle #3: All Competitors React  Managing
Sustainable Competitive Advantage
Inputs (MP#1 & MP#2)
Positioning Statements
• Target (external customers)
• AER (internal personas)
AER Strategies
• What strategies work best for
each persona/AER stage
Future Trends
• Technology trends
• Regulatory trends
• Socioeconomic trends
Managing Sustainable Competitive
Advantage
Outputs (SCA, BOR)
SCAs
Approaches & Processes
SCA • Existing SCAs, why you win now
Brand, offering, relationship equity stack • Future SCAs, how you will win
in future
AER strategy and BOR equity grids
Brand and relationship mgt.
Innovation processes
Analyses
BOR Strategies
Field experiments
Conjoint analysis • Brand strategies
• Offering/innovation strategies
Multivariate regression
• Relationship marketing
Choice models
strategies
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Sequence for Using Brands,
Offerings, and Relationships
to Build SCA
1. Determine how the firm will be
positioned in the overall marketplace
and in existing customers’ minds –
based on MP#1 & MP#2
2. Focus offering decisions; product and
service innovation and R&D efforts need
to support brand strategies and the
firms positioning objectives
3. Determine relationship strategies

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Connections
Between AER
Strategy and
BOR Equity
Grids

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 Case E.G.: Creating
SCA
• Background:
• Exteriors Incorporated (EINC) is US leading manufacturer of roofing
shingles
• Elite player in the market – high prices and high quality
• Losing market share to low priced competitors after 2008 recession
• Problem: ENIC needs to build SCA
• What is the right mix of brand, offering, and relationship equity?
• Data:
• Survey: importance of the four key attributes: price, life
expectancy, aesthetics, and speed of installation  all were rated
as important by customers
• Conjoint model: understanding the importance of the trade-offs
among the attributes  relative importance of 9 product bundles
• Willingness to pay model: using part-worth utilities from conjoint
model
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 • Results:
• Products with high life expectancy, delivered
within a week were rated the best

Case E.G., • Aesthetics did not matter as much as EINC

thought they would

Creating • Price part-worths were not as large as the life

expectancy and speed of installation attributes
 consumers not as sensitive to price as other
SCA: product attributes
• Actions:
Results • Maintaining higher price
• Develop product with high life expectancy and
quick installation

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Creating Sustainable Competitive
Advantage
Brand
A branded world
(icebreaker)
• How many brands do you have
on you?
• Do you have a favourite?
• Is there one you've fallen out of
love with?
 1. Coca-Cola 6. Toyota
2. IBM 7. Intel
The Most 3.
4.
Microsoft
GE
8.
9.
McDonald's
Disney
Valuable Top 5. Nokia 10. Google

10 Brands
The 2010,
Interbrand
 1. Apple 6. Toyota
2. Microsoft 7. Coca-Cola
The Most 3.
4.
Amazon
Google
8. Mercedes-Benz
9. Disney
Valuable Top 5. Samsung 10. Nike

10 Brands
The 2022,
Interbrand
Brand Equity
What Is a Brand?
Brand elements: Name, term, symbol,
design, and other characteristics
Protected through registered
trademarks
Intangible asset = adds value to
company
Identify/differentiate goods and
services of one seller from another
Allows a company legal protection for
its products
What Is a
Brand? (cont.)

• Usage experience
• Associations with other
entities
• Internal communication with
employees
• Customer service/support
• Awareness
• Reputation
What Is a Brand to a Customer?

A promise Company
of specific must
product deliver on
performanc “moments
e of truth”

Emotional
connection A symbol of
with the customer’s
Peartree.com.au
company/pr self-image
oduct
What can be branded?

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Can Anything Be Branded?
Services
Sunwing Airlines British Airways

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Can Anything Be Branded?
People
Kanye West Michael Buble
Can Anything be Branded?
Platforms
Facebook LinkedIn
Can Anything be Branded?
Retailers and Distributors
Holt Renfrew Walmart

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Can Anything Be Branded?
Products
Rolls Royce Honda Civic
Can Anything Be Branded?
Organizations
Unilever United Nations
Can Anything Be Branded?
Narratives
Men in Black Disney Princesses
Can Anything be Branded?
Places
Las Vegas Iceland
 Customer-based brand
equity
Brand managers must build awareness of the brand with a
target audience and over time build on that knowledge,
adding more layers of meaning and associations.
BRAND EQUITY

Brand - Commodity = Brand Equity

Can you make a differential effect with

branding?

Do you have a brand logic and clear focus?37

 Three Steps to Building Brand Equity
Brand Building Activities Key Objectives

1st
Step Provide an anchor point for linking
Build a high level of brand awareness meaning to the brand in later steps

2nd
Step

3rd Link the brand name to its points of Define the brand’s relative
Step parity and difference advantage(s)

Build a deep emotional connection or

Generate powerful, long-lasting
“relationship” between brand and
barriers to competitors (i.e., SCA)
targeted customers

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Building Brand Knowledge
Building Brand Knowledge
Perceptual Maps
Positioning Statements (Stanford.edu, 2022)
Positioning (Stanford.edu, 2022)
Brand Architecture

An organizing structure of the brand portfolio

that specified brand roles and the nature of
relationships between brands
 Brand Architecture Spectrum
Many Single
Independent Master
Brands Brand
House of Endorsed
Sub-brands Branded House
Brands Brands
Many individual Sub-brands have a
brands are linked closer link to the
Many Single master
to an endorsing parent brand
independent brand used for all
brand to produce than do endorsed
brands products
a supportive brands but
foundation behave similarly
P&G’s Tide, Courtyard by Sony GE’s airplane
Cheer, All, Marriott; Polo Walkman; engines,
Ariel, and by Ralph Nestle Kit Kat appliances,
Purex Lauren and financing
Expanding Brand Meaning Through Extensions
Brand
Architecture
in Action
House of Brands
Pros and Cons of House of
Brands
• An inability to cross-
Minuses? promote

Alternatives? • Branded house

• Problems in one area can

Dangers? be contagious

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Positions Across Brands: Unilever’s Dove
Positions Across Brands: Unilever’s Axe
Brand
Extension
s
Brand extensions are “the use of an established
brand to launch new products or services.”

(Völckner and Sattler 2006, p. 18)

52
 Line Extensions Category Extensions
Line and • Easy to develop, higher • Higher chance of failure
Category success rate, but are they a
fit?
• Brand's expertise is not
under consideration
Extensions ‒ therefore no threat
to parent brand if it
fails
‒ adds to parent brand
associations if it
works
‒ financial risks can be
moderated by
licensing agreements

53
Bic Category Extension: Is It a Fit?
Lego category Extension: Is it a Fit?
Line Extensions
Integrated marketing communications (IMC)

57
IMC Persuasion
Process:
Think – Feel - Act
• Customer must be exposed to the
communication message.
• Message needs to capture customers’
attention.
• Customer must understand the desired
marketing message.
• Customer needs to develop favorable
attitudes toward the message.
• Customer must generate intentions to act, in
accordance with the information in the
communication message.
• Person then must actually behave in the
desired way.

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Importance of Measuring Brand Equity

To track the To understand the

effectiveness of state of the brand
Crucial for assessing
marketing after changes in
the overall brand
expenditures in strategy or
health
building brand equity competitive
over time disruptions
 • Brand audit
• Measuring brand awareness
• Brand health

Measurement • Brand asset valuator

• Measuring brand associations
Tools • Projective techniques
• Qualitative approaches
• Quantitative approaches
• Customer focused measures of brand meaning
Brand Equity Measurement Approaches

Exploratory
Various
Brand audit Qualitative
Methods
analysis
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Appendices
 CBBE: Brand Awareness =
Equity
Measuring Brand Awareness
Un Aided Recall Aided Recall
Name as many brands as
you can in this category

Stronger measure – suggests

familiarity of identity and
category Weaker - one has to
be prompted, but
Do you recognise the
nonetheless a critical
First one is top of mind following brands?
measure for nascent
(correlated with market
share) brands

Commoditization is
dangerous – advantage
eliminated with patent expiry
Basic Measurement of Brand
Health: Six Measures
Measuring Brand
Health
Brand Excels at
Delivering
Benefits
Customers Truly
Desire
Brand Stays Relevant
Brand is Properly Positioned
Brand is Consistent
Brand Managers Understand What
the Brand Means to Consumers
Brand Health: Brand Asset Valuator