5

DESIGNING
MARKETING
PROGRAMS TO
BUILD BRAND
EQUITY

Dr.Ir. P. Philips Kembaren MBA

Reference: Strategic Brand Management, 4th Ed, Global Ed., Kevin L. Keller
New Perspectives on Marketing

2 4

1 3

Disintermediation Industry
and convergence
reintermediation
Digitalization Customization
and and
connectivity customerization
Integrating Marketing Programs and Activities

Creative and original thinking is

necessary to create fresh new marketing
programs that break through the noise
in the marketplace to connect with
customers.
Marketers are increasingly trying a host
of unconventional means of building
brand equity
“We have the great product, but then we put some
stupid little twist to it that makes us stand out from
everybody else.”
In Moosejaw’s “Operation Sale,” store customers were
invited to play the old electronic board game at
checkout. Picking up the charley horse without setting
off the buzzer brought the customer
20 percent off! The company launched a “Break-Up
Service” in which it volunteered to make the difficult
call to help customers seeking to end relationships.
Text messages from the store offer discounts for
replies.
One text challenged customers to a digital version of
the popular “Rock, Paper, Scissors” game with
a 20 percent discount for winners. When the company
added a single line to its catalog asking readers to
send their best illustration of “crying tomatoes,” 300
people replied. All these different efforts have had a
payoff: company market research shows that the 40
percent of customers who can be classified as “highly
engaged” with the brand place at least four orders
Personalizing Marketing
 All of these approaches are a means to create deeper,
richer, and more favorable brand associations
 Relationship marketing has become a powerful brand-
building force
 Can slip through consumer radar
 May creatively create unique associations
 May reinforce brand imagery and feelings

 Nevertheless, there is still a need for the control and

predictability of traditional marketing activities.
 Models of brand equity can help to provide direction and
focus to the marketing programs.
 1
2
3

Brand planning model

Experiential marketing
Personalizing
Marketing
Relationship Marketing Concepts
• Mass Costumization
• One-to-one marketing
• Permission marketing
Experience Economy

 If you charge for stuff, then you are in

the commodity
business.
 If you charge for tangible things, then
you are in the goods business.
 If you charge for the activities you
perform, then you are in the service
business.
 If you charge for the time customers
spend with you, then and only then
are you in the experience business
 Experiential Marketing
“The idea is not to sell something,
but to demonstrate how a brand
can enrich a customer’s life.”
 Focuses on customer
experience
 Focuses on the
consumption situation
 Views customers as
rational and emotional
elements
 Uses eclectic methods
and tools
VideoClip – Experiential Marketing
https://www.youtube.com/watch?v=f4iQ3TCbqTk
5 Strategies of Marketing the Experience
Bernd Schmitt

SENSE creating sensory experiences through sight, sound, touch, taste

MARKETING and smell.

FEEL marketing appeals to a customers’ inner feeling and emotions.

MARKETING

THINK targets customers’ potential thinking through surprise, intrigue

MARKETING and provocation.

ACT create customer experiences related to the physical body,

MARKETING longer-term patterns of behavior and lifestyles.

RELATE customers could be influenced by reference groups when they

MARKETING are making decisions.
 Bernd Schmitt’s 5 Steps
Customer Experience Management
Continuous innovation
05 Things which improve the customer’s life
(personal or business).

Structure the customer interface

04 Address the process and people around customer

exchanges, to address experiential consistency and
feel/mood of the brand.

Design the brand experience

03 Create brand experiences that differentiate; stripping
and redressing of the brand may be required.

02
Build the experiential platform
Develop the strategy: what should the customer
experience look like? Include CX journey mapping.

Analyse the experiential world of the customer.

01 Analyse and understand the customer experience,
the journey, and pain points.
Brand Experience Scale
Bernd Schmitt
 Relationship
Marketing
Relationship Marketing It Expands Both The
Attempts To Provide Depth And The Breadth
A More Holistic, Of Brand-building
Personalized Brand Marketing Programs.
Experience To Create
Stronger Consumer Ties.
Acquiring new customers can cost 5 times as
much as satisfying and retaining current
customers.

The average company loses 10 percent of its Relationship

customers each year.
Marketing
benefits
5 % 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.
 The advent of digital-age technology
enables companies to offer customized
products on a previously unheard-of scale
 Going online, customers can communicate
their preferences directly to the
Mass manufacturer, which, by using advanced
Costumization production methods, can assemble the
product for a price comparable to that of
a noncustomized item.
NIKEiD program at the NIKEiD Website
https://www.youtube.com/watch?v=-2O-Jd1eG9o&t=27s
 Batik Fractal adalah batik yang didesain dengan rumus
fractal menggunakan software jBatik.
 Fractal adalah cabang ilmu matematika yang meneliti
tentang perulangan atau iterasi dan kesamaan diri atau
self similarity.
 Pengaplikasian dalam kain tetap menggunakan cara
tradisional yaitu dengan canting dan cap.
 Produk Batik Fractal dapat diperoleh di
www.batikfractal.com dan software jBatik di
www.jbatik.com
https://www.blackxperience.com/blackinnovation/blackicon/nancy-margried-batik-fractal
https://www.youtube.com/watch?v=a1OWMxw5Q58&feature=emb_rel_end
One-to-One Marketing:
Competitive Rationale
 Consumers help to add value by
providing information.
 Firm adds value by generating
rewarding experiences with
consumers.
 Creates switching costs for consumers
 Reduces transaction costs for consumers
 Maximizes utility for consumers
One-to-One Marketing: Identify
consumers,
Five Key Steps individually and
addressably

Brand Differentiate
them by value and
the relationship needs

Customize Interact
with them more
some aspect of
cost-efficiently
the firm’s behavior
and effectively
One-to-One Marketing:
Consumer Differentiation

 Treat different consumers differently

 Different needs
 Different values to firm
 Current
 Future (lifetime value)

 Devote more marketing effort on most

valuable consumers (and customers)
Permission Marketing is the privilege (not the right) of delivering anticipated, personal
and relevant messages to people who actually want to get them
Example of Permission Marketing
 Supporting marketing mix should be
Integrating designed to enhance awareness and
the Brand establish desired brand image.
Into Product strategy  the role of extrinsic
Supporting factors
Marketing
Pricing strategy  value pricing
Programs
Channel strategy  channel
integration
 Perceived Quality

Product
Aftermarketing
Strategy
• User Manuals
• Costumer Service Program
• Loyalty Program
Perceived Quality
 Customers’ perception of the overall
quality or superiority of a product or
service compared to alternatives and
with respect to its intended purpose.
 General dimensions: primary ingredients and
supplementary features; product reliability,
durability and serviceability; and style and
design.
 Consumer beliefs about these characteristics
often define quality and, in turn, influence
attitudes and behavior toward a brand.
 Much marketing activity is devoted to finding
ways to encourage trial and repeat purchases
by consumers.
After the strongest and potentially most favorable
marketing associations, however, result from actual
product experience—
Procter & Gamble calls the “second moment
of truth” (the “first moment of truth” occurs
at purchase).
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.
 Manufacturers are spending more time designing and
testing instructions to make them as user friendly as
Costumer Service Program
 Creating stronger ties with consumers can be as
simple as creating a well-designed customer
service department.
 Research by Accenture in 2010 found that two in
three customers switched companies in the
past year due to poor customer service.
 In the auto industry, aftersales service from the
dealer is a critical determinant of loyalty and
repeat buying of a brand.
 Routine maintenance and unplanned repairs are
an opportunity for dealers to strengthen their
ties with customers
 Loyalty Programs

 Their purpose is “identifying, maintaining, and

increasing the yield from a firm’s ‘best’ customers
through long-term, interactive, value-added
relationships.”
 Firms in all kinds of industries—most notably the
airlines—have established loyalty programs
through different mixtures of specialized services,
newsletters, premiums, and incentives.
 Often they include extensive co-branding
arrangements or brand alliances.
 Price premiums are among the
most important brand equity
benefits of building a strong brand
Pricing Consumer price perceptions
Strategy  Consumers often rank brands
according to price tiers in a category.
Setting prices to build brand equity
 Value pricing
 Everyday low pricing
Consumers often rank brands according to price tiers in a category
 Value Pricing Strategy

An effective value-pricing strategy should

strike the proper balance among three key
components:
Product design and delivery
Product costs
Product prices

the right kind of product has to be made the right way and sold at the right price
 The manner by which a product is
sold or distributed can have a
profound impact on the resulting
Channel equity and ultimate sales success of
a brand.
Strategy Channel strategy includes the
design and management of
intermediaries such as wholesalers,
distributors, brokers, and retailers.
  Direct channels
 Selling through personal contacts from the
company to prospective customers by mail, phone,
electronic means, in-person visits, and so forth
Channel  Indirect channels

Design  Selling through third-party intermediaries such

as agents or broker representatives, wholesalers
or distributors, and retailers or dealers
 Push and pull strategies
 Web strategies
 By devoting marketing efforts to the
end consumer, a manufacturer is said
to employ a pull strategy.

Push and Alternatively, marketers can devote

their selling efforts to the channel
Pull members themselves, providing direct
Strategies incentives for them to stock and sell
products to the end consumer. This
approach is called a push strategy.
  Two such partnership strategies are retail
segmentation activities and cooperative
advertising programs
 Retail segmentation
 Retailers are “customers” too
Channel  Cooperative advertising
Support  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

The Boston Consulting Group

Advantage of having both concluded that multichannel
a physical “brick and retailers were able to acquire
mortar” channel and a customers at half the cost of
virtual, online retail Internet-only retailers, citing a
number of advantages for the
channel multichannel retailers.